Exhibit 10.6
SECOND AMENDMENT TO LOAN
AND SECURITY AGREEMENT-RECEIVABLES
This Second Amendment to Loan and
Security Agreement – Receivables (this “ Second
Amendment ”) is made and entered into this 4th day of
June, 2008 by and among SILVERLEAF RESORTS, INC ., a Texas
corporation (“ Borrower ”); the parties,
including WELLS FARGO FOOTHILL, INC ., a California
corporation, who have executed the Original Loan Agreement (as
hereinafter defined) or a joinder agreement thereto in their
respective capacities as lenders (collectively the “
Lenders ” and individually a “ Lender
”); and WELLS FARGO FOOTHILL, INC ., a California
corporation, in its capacity as facility agent and as collateral
agent (“ Agent ”).
W I T N E S S
E T H
WHEREAS , Borrower, Lenders
and Agent have heretofore entered into that certain Loan and
Security Agreement – Receivables dated as of
December 16, 2005 (the “ Original Loan Agreement
”) pursuant to which Lenders agreed to make a revolving
credit loan secured by, among other things, Pledged Notes
Receivables (as defined in the Original Loan Agreement), which
Original Loan Agreement has been heretofore amended pursuant to
(a) that certain First Amendment to Loan and Security
Agreement – Receivables dated as of October 6, 2006 and
(b) that certain letter modification agreement dated
March 1, 2007 from Borrower to Wells Fargo Foothill, Inc. (the
Original Loan Agreement, as amended by said First Amendment and
letter is hereinafter called the “ Loan Agreement
” and the loan made pursuant to the Loan Agreement is
hereinafter called the “ Loan ”); and
WHEREAS , Borrower, Lenders
and Agent have heretofore entered into a Loan and Security
Agreement – Inventory dated as of December 16, 2005 (the
“ Original Inventory LSA ”) pursuant to which
Lenders agreed to make a revolving credit loan secured by, among
other things, certain Intervals (as defined in the Original
Inventory LSA), which Original Inventory LSA was amended by that
certain First Amendment to Loan and Security Agreement Inventory
dated as of October 6, 2006 (the Original Inventory LSA, as
amended by said First Amendment is hereinafter called the “
Inventory LSA ” and the loan made pursuant to the
Inventory LSA is hereinafter called the “ Additional
Credit Facility ”); and
WHEREAS , although each of
the Loan Agreement and the Inventory LSA contemplate that there
could be a number of parties acting as Lender thereunder, Wells
Fargo Foothill, Inc. (“ WFF ”) is the sole party
acting as lender under each such agreement; and
WHEREAS , WFF is considering
purchasing from Silverleaf Finance VI, LLC, a Delaware limited
liability company (“ SL VI ”) and an affiliate
of Borrower, a portion of the timeshare loan-backed notes (the
“TLB Notes” ) being issued by SL VI in
connection with a securitization that SL VI is planning to
undertake (the “Securitization” ); and
WHEREAS , in order to induce
WFF to purchase the TLB Notes, WFF desires to limit WFF’s
aggregate exposure under the TLB Notes, the Loan and the Additional
Credit Facility and
Borrower
is willing to amend the Loan Agreement to accomplish that in the
manner hereinafter provided.
NOW THEREFORE , in
consideration of the mutual covenants and agreements contained in
the Loan Agreement and in this Second Amendment and for other good
and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties to this Second Amendment,
intending to be legally bound, agree as follows:
1. Integration of
Second Amendment and Loan Agreement . This Second Amendment
and the Loan Agreement shall, for all purposes, be deemed to be one
instrument. In the event of any conflict between the terms and
provisions of this Second Amendment and the terms and provisions of
the Loan Agreement, the terms and provisions of this Second
Amendment shall, in all instances, control and prevail. Except as
expressly defined herein, all words and phrases which are defined
in the Loan Agreement shall have the same meaning in this Second
Amendment as are ascribed to said words and phrases in the Loan
Agreement.
2. Section 1
Definition of Terms – Commitment . The last sentence
of the defined term “Commitment” is hereby deleted and
is hereby replaced with the following:
“From and
after the date of this Second Amendment, the maximum aggregate
outstanding Commitment at any time during the Term of the Loan
Agreement, as amended hereby, shall be the lesser of (a)
$35,000,000.00 and (b) the amount by which (i) $75,000,000.00
exceeds (ii) the sum of the aggregate amount outstanding under
the TLB Notes and the Additional Credit Facility. The amount of the
Commitment may from time to time be increased or decreased by Agent
and Lenders upon written agreement setting forth the terms and
conditions of any increase or decrease by and among Agent, Lenders
and Borrower.”
3.
Section 2. 1(a) .
(a) The first sentence of the first
grammatical paragraph of Section 2.1(a) is hereby deleted and
is hereby replaced with the following:
“Upon the
terms and subject to the express conditions set forth in
Section 2.1(c) hereof and the other provisions of the Loan
Agreement, as amended hereby, including, but not limited to,
Section 2.7 hereof, each Lender agrees severally, at any time
and from time to time during the Revolving Loan Period, to make
Advances to Borrower and Borrower may borrow, repay and re-borrow
during the Revolving Loan Term, in an aggregate amount not to
exceed at any time each Lender’s Pro Rata Percentage of the
lesser of: (i) the Borrowing Base and (ii) the
Commitment.”
(b) The first sentence of the second
grammatical paragraph of Section 2.1(a) is hereby deleted and
is hereby replaced with the following:
“Borrower
acknowledges, agrees and confirms that the obligations of all
Lenders to make Loans to Borrower under the Loan Agreement, as
amended hereby are limited to the lesser of (i) the Borrowing
Base and (ii) the Commitment.”
2
4.
Section 2.1(c) . Section 2.1(c) is
hereby deleted and is hereby replaced with the following:
“Notwithstanding anything to the contrary contained herein,
no Lender shall have an obligation to make an Advance or its Pro
Rata Percentage thereof hereunder to the extent that the aggregate
of Advances outstanding would cause the Loan to exceed the lesser
of (i) the Borrowing Base and (ii) the
Commitment.”
5.
Schedule 1.0 . The “Lender’s
Committed Amount” as set forth on Schedule 1.0 attached
to the Loan Agreement is hereby deleted and is hereby replaced with
the following:
“The
lesser of (a) $35,000,000.00 and (b) the amount by which (i)
$75,000,000.00 exceeds (ii) the aggregate amount outstanding
under the Additional Credit Facility and the TLB
Notes.”
6. Conditions to
Effectiveness . The effectiveness of this Second Amendment
and the agreements of Lender set forth herein, are subject to the
satisfaction of the following conditions precedent, all in form,
scope and substance satisfactory to Lender in its sole discretion
(the date on which such conditions shall have been satisfied being
referred to herein as the “ Second Amendment Effective
Date ”):
(a) The Securitization shall have
taken place and WFF shall have acquired the TLB Notes; and
(b) Lender shall have received each
of the following, and, where applicable, duly executed by each
party thereto, other than Lender:
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