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EXHIBIT 10.16
AMENDMENT NO. 1 TO
LOAN AND SECURITY AGREEMENT
BY THIS AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT ("Amendment")
dated as of July 24, 1995, Ascension Resorts, Ltd., a Texas limited
partnership, d/b/a Silverleaf Resorts, Ltd. ("Borrower") and FINOVA Capital
Corporation, a Delaware corporation, formerly known as Greyhound Financial
Corporation, a Delaware corporation ("Lender"), for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
hereby confirm and agree as follows:
ARTICLE 1 - INTRODUCTION
1.1 Borrower and Lender previously entered into a Loan and
Security Agreement dated as of August 12, 1994 (the "Loan Agreement"),
relating to a revolving line of credit loan in the amount of up to $6,000,000
("Loan").
1.2 Borrower and Lender wish to amend the Loan Agreement, among
other ways, to increase the maximum amount of the Loan to $12,000,000, extend
the Borrowing Term, revise the rate of interest of the Loan, and permit up to
$4,000,000 of the Loan to be used to finance lot receivables from the Holiday
Hills Lot Project in Branson, Missouri, all as more fully provided below.
ARTICLE 2 - AGREEMENT
2.1 Except as otherwise defined herein or unless the context
otherwise requires, capitalized terms used in this Amendment shall have the
meaning given to them in the Loan Agreement.
2.2 The Loan Agreement is amended as follows:
(a) The definition of Borrowing Base in paragraph 1.6 is
deleted in its entirety and the following is substituted in its place:
"Borrowing Base": with respect to an Eligible Instrument, an amount
equal to the lesser of:
(a) seventy percent (70%) of the unpaid principal balance
of such Eligible Instrument; or
(b) seventy-five percent (75%) of the present value of
the unmatured installments of principal and interest under
such Eligible Instrument, discounted at the greater of the
applicable interest rate under the terms of the Note or 13%.
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(b) The definition of Borrowing Term in paragraph 1.7 is
deleted in its entirety and the following is substituted in its place:
"Borrowing Term": the period commencing on the date of this Agreement
and ending on the close of Lender's normal business hours on the date
(or if not a Business Day, the first Business Day thereafter) which is
the earlier of (a) the date 12 months from the date of the first
Advance made after July 24, 1995, or (b) August 31, 1996.
(c) The definition of Eligible Instrument in paragraph
1.13 is deleted in its entirety and the following is substituted in its place:
"Eligible Instrument": an Instrument which conforms to the standards
set forth in EXHIBIT B (which at all times during the Borrowing Term
shall be limited to Instruments arising from the sale of Time-Share
Interests or Lots in Projects for which Permitted Encumbrances have
been agreed to by Lender in writing and stipulated on EXHIBIT E hereto
or any supplement thereto). An Instrument that has qualified as an
Eligible Instrument shall cease to be an Eligible Instrument upon the
date of the first occurrence of any of the following: (a) any
installment due with respect to that Instrument becomes more than
fifty-nine (59) days past due, or (b) that Instrument otherwise fails
to continue to conform to the standards set forth in EXHIBIT B.
(d) The definition of Instrument in paragraph 1.19 is
deleted in its entirety and the following is substituted in its place:
"Instrument": a promissory note which has arisen out of the
sale of a Time-Share Interest or Lot by Borrower to a Purchaser and is
secured by a Purchaser Mortgage.
(e) The following definition is inserted after paragraph
1.23:
1.23A "Lot": a fee simple interest in any
residential lot created by a recorded subdivision
plat of the Project identified on EXHIBIT F as the
Holiday Hills Lot Project.
(f) The definition of Maximum Loan Amount in paragraph
1.26 is deleted in its entirety and the following is substituted in its place:
"Maximum Loan Amount": Twelve Million United States Dollars
($12,000,000.00) minus the outstanding principal balance of the 1992
Loan.
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(g) The definition of Project in paragraph 1.36 is
deleted in its entirety and the following is substituted in its place:
"Project": any one of the time-share resorts, lot subdivision
project(s) or parts of such resorts or project(s) described in EXHIBIT
F and any other time-share resort, lot subdivision project or part
thereof as Lender may in its discretion from time to time hereafter
approve in writing.
(h) The definition of Purchaser in paragraph 1.38 is
deleted in its entirety and the following is substituted in its place:
"Purchaser": a purchaser of a Time-Share Interest or Lot from
Borrower.
(i) The first sentence of Paragraph 2.1 is deleted in its
entirety and the following is substituted in its place:
Lender hereby agrees, if Borrower has Performed all of the obligations
then due, to make Advances to Borrower in amounts equal to (a) the
then Borrowing Base of all Eligible Instruments then held by Lender
together with those delivered to and accepted by Lender with a Request
for Advance, less (b) the then unpaid principal balance of the Loan;
provided, (1) at no time shall the unpaid principal balance of the
Loan exceed the Maximum Loan Amount, (2) the maximum Advance for any
Eligible Instrument arising from the sale of a Lot shall be $35,000,
and (3) at no time shall the Borrowing Base for Eligible Instruments
arising from the sale of Lots exceed, in the aggregate, $4,000,000.
(j) The following is added to the Loan Agreement as a new
paragraph 2.4:
"2.4 With respect to any portion of an Advance that constitutes an
Availability Advance against an Eligible Instrument, Borrower shall
pay to Lender at the time of such Advance a fee equal to 1.5% of the
amount of such Availability Advance. The term "Availability Advance"
means each Advance made against an Eligible Instrument after the first
Advance made against such Instrument; provided that in the case of an
Eligible Instrument substituted for an ineligible Instrument pursuant
to paragraph 3.2, an Availability Advance shall be deemed made at the
time of the first Advance made against such substituted Instrument."
(k) The first sentence of Paragraph 3.2 is deleted in its
entirety and the following is substituted in its place:
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If a previously Eligible Instrument which is part of the Receivables
Collateral ceases to be an Eligible Instrument, and at that time, the
aggregate principal amount of the Loan outstanding exceeds the then
Borrowing Base of all Eligible Instruments, then within five (5)
Business Days thereafter, Borrower will either (i) pay to Lender an
amount equal to the Borrowing Base of the ineligible Instrument,
together with interest, costs and expenses attributable to it, or (ii)
replace such ineligible Instrument with an Eligible Instrument or
Eligible Instruments having a Borrowing Base not less than the
Borrowing Base (calculated immediately before its ineligibility) of
the ineligible Instrument(s) being replaced. If on any occasion,
Borrower fails to comply with the requirements of the first sentence
of this paragraph within the five (5) Business Days required therein
(a "Borrowing Base Reinstatement Event of Default"), but on such
occasion Borrower cures such Event of Default before Lender has
exercised its remedies under paragraph 7.2 below, then, at all times
following the next occurring Borrowing Base Reinstatement Event of
Default (following expiration of the five (5) Business Day cure period
described above), in addition to the remedies of Lender provided for
in this Agreement and the other Documents, and notwithstanding that
Borrower may have cured such second Borrowing Base Reinstatement Event
of Default, Borrower shall comply with the following requirement: If
at any time throughout the remaining Term of the Loan, a previously
Eligible Instrument which is part of the Receivables Collateral ceases
to be an Eligible Instrument (and even if at that time the Borrowing
Base of all Eligible Instruments exceeds the aggregate principal
amount of the Loan outstanding), then within thirty (30) days
thereafter, Borrower will either (i) pay to Lender an amount equal to
the Borrowing Base of the ineligible Instrument, together with
interest, costs and expenses attributable to it, or (ii) replace such
ineligible Instrument with an Eligible Instrument or Eligible
Instruments having a Borrowing Base not less than the Borrowing Base
(calculated immediately before its ineligibility) of the ineligible
Instrument(s) being replaced.
(l) All references to "Time-Share Interests" in paragraphs
6.1(a), 6.3(a), 6.3(b), 6.4(d), 6.4(f), 6.4(g), and 8.12 are deleted and
"Time-Share Interests or Lots" is substituted in their place. All references to
"Time-Share Interests" in paragraphs 6.10(a), 6.10(c), and 6.17 are deleted and
"Time-Share Interests and Lots" are substituted in their place.
(m) The following sentence is inserted at the end of
paragraph 6.10(b):
If Borrower delivers to Lender a copy of current audited annual
financial statements of Borrower prepared by an
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independent certified public accounting firm satisfactory to Lender,
and such financial statements are acceptable to Lender in Lender's
sole and absolute discretion, then Borrower will thereafter no longer
be required to furnish to Lender the status reports from Xxxxx
Xxxxxxxx & Associates required by this paragraph 6.10(b).
(n) Paragraph 6.16 is deleted in its entirety and the
following is substituted in its place:
Borrower shall maintain a minimum tangible net worth (as reflected on
the financial statements delivered pursuant to paragraph 6.10) of not
less than Twelve Million Dollars ($12,000,000) at all times during the
Term of the Loan.
(o) The covenant in paragraph 6.18 shall hereafter be
deemed to apply to the aggregate of distributions by Borrower to its partners
and any loans by Borrower to any of its Affiliates.
(p) The address for Lender on the signature page (and all
other references to the Lender's address in the Loan Agreement and the
Documents) is deleted in its entirety and the following is substituted in its
place:
FINOVA Capital Corporation
0000 Xxxx Xxxxxx Xxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
(Attention, Vice-President, Law)
Telecopy No.: (000) 000-0000
(q) SCHEDULE 1 is deleted in its entirety and SCHEDULE 1
hereto is substituted in its place, and incorporated in the Loan Agreement.
(r) EXHIBIT B is deleted in its entirety and EXHIBIT B
hereto is substituted in its place, and incorporated in the Loan Agreement.
(s) EXHIBIT E hereto is hereby added as a supplement to
EXHIBIT E to the Loan Agreement and incorporated therein.
(t) The following is inserted in the list of Projects in
Section A of EXHIBIT F:
A lot subdivision project to be named later (the first phase
of which is named The Fairways) located three miles east of Branson,
Missouri, in Taney County, Missouri (the "Holiday Hills Lot Project").
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(u) All references to "Time-Share Interests" in EXHIBIT
J are deleted and "Time-Share Interests or Lots" is substituted in their place.
(v) Paragraph (g) of EXHIBIT J is deleted in its entirety
and the following is substituted in its place:
(g) a credit report from a recognized consumer credit reporting
agency on each Purchaser obligated under an Instrument covered by (b)
above for all Instruments with a principal amount of $15,000 or more
and arising from the sale of Lots, and if requested by Lender in
accordance with its normal underwriting procedures, all other
Instruments covered by item (b) above.
(w) The following is inserted at the end of EXHIBIT J:
(k) a standard FNMA or other loan application acceptable to Lender
for each Purchaser obligated under an Instrument covered by item (b)
above for all Instruments with a principal amount of $15,000 or more
arising from the sale of Lots, and evidence satisfactory to Lender
that such Purchaser's debt-to-income ratio (including the obligations
under such Instrument) shall not exceed 55%.
2.3 Borrower will pay to Lender a non-refundable loan fee ("Loan
Fee") equal to $60,000. The Loan Fee shall be payable upon the initial Advance
under the Loan following the date of this Amendment, but not later than July
31, 1995. Borrower acknowledges that Lender has earned the Loan Fee and that
the Loan Fee is non-refundable.
2.4 Subject to the remaining provisions of this paragraph,
Borrower will on demand pay or, at Lender's election, reimburse Lender for all
Lender's attorneys' fees and other out-of-pocket expenses in connection with
the documentation and closing of this Amendment and the due diligence conducted
in May and June of 1995 in connection with Lender's approval of the Missouri
Projects for purposes of funding Advances on Eligible Instruments arising from
the sale of Time-Share Interests therein. Borrower will pay or reimburse
Lender or Lender's attorneys for all reasonable out-of-pocket expenses of
Lender's attorneys incurred in connection with the foregoing. Notwithstanding
the foregoing, to the extent Lender's attorneys' fees in connection with the
foregoing exceed $8,500.00 Borrower will pay or reimburse Lender for such
excess only if the excess fees are (a) caused by the negligence or lack of
diligence or cooperation by Borrower in the documentation and closing of this
Amendment, (b) caused by circumstances which could not reasonably have been
foreseen by Lender, or (c) incurred in connection with the review of materials
relating to the Holiday Hills Lots Project which are submitted to Lender
following the date of this Amendment in satisfaction of the conditions set
forth in
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paragraph 2.8 hereof. In reliance upon the representation and warranty made by
Lender in the following sentence, Borrower will indemnify, hold harmless and
defend Lender, and its officers, directors, employees, agents, affiliates,
successors and assigns for, from and against loss, expense, demand and
liability arising out of any claim for a broker's fee with respect to the
transaction contemplated by this Amendment. Lender represents and warrants to
Borrower that it has not dealt with any broker.
2.5 Borrower confirms and restates to Lender as of the date
hereof all its representations and warranties set forth in the Loan Agreement,
as amended hereby, and the other documents executed by Borrower evidencing,
securing or otherwise pertaining to the Loan ("Documents"). Borrower
represents and warrants to Lender that since August 12, 1994, except for such
changes shown in the documents delivered to Lender and any changes to
advertising materials in conformance with applicable law, there have been no
material changes to the documents used in connection with the sale of
Time-Share Interests or the governance of the Project. Borrower reaffirms all
liens and security interests granted by it to Lender and agrees that such liens
and security interests shall continue to secure the Loan. Borrower further
acknowledges that Lender has performed and is not in default of its obligations
under the Documents and that there are no offsets, defenses or counterclaims
with respect to any of Borrower's obligations under the Documents.
2.6 Borrower will execute and deliver such further instruments and
do such things as in the sole and absolute judgment of Lender are necessary or
desirable to effect the intent of this Amendment and to secure to Lender the
benefits of all rights and remedies conferred upon Lender by the terms of this
Amendment and any other documents executed in connection herewith, including,
without limitation, amendments to security loan documents and financing
statements.
2.7 This Amendment shall not be binding upon Lender unless and
until the following conditions have been satisfied, which in no event shall be
later than July 31, 1995:
(a) Borrower has delivered to Lender the following
documents and other items, all of which shall be properly completed and
executed and shall otherwise be satisfactory in form and substance to Lender
in its sole and absolute discretion:
(i) a resolution or certificate from Borrower and
its general partner authorizing (A) the execution and delivery of this
Amendment and the other documents called for in this Amendment or
requested by Lender pursuant to this paragraph ("Modification
Documents") and (B) the transaction contemplated hereby;
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(ii) an "Amendment No. 1 to Promissory Note" in
form and substance acceptable to Lender executed by Borrower;
(iii) a "Consent of Guarantors and Amendment to
Guaranty" in form and substance acceptable to Lender executed by
Guarantor;
(iv) an "Acknowledgement of Subordinating Parties"
in form and substance acceptable to Lender executed by the
Subordinating Parties;
(v) an "Amendment and Reaffirmation of
Environmental Certificate" in form and substance acceptable to Lender
executed by Borrower;
(vi) opinions from counsel to Borrower and
Guarantor in form and substance the equivalent of Exhibits "A-1" and
"A-2" attached hereto;
(vii) such amendments to recorded and filed
Documents as Lender may deem necessary, including without limitation,
additional UCC-1 financing statements and amendments to UCC-1
financing statements;
(viii) a personal financial statement of Guarantor
dated within 90 days of the date of this Amendment and acceptable to
Lender;
(ix) updated lien, litigation, and judgment
searches acceptable to Lender, and updated Dun & Bradstreet and credit
information acceptable to Lender;
(x) updated information in form and substance
acceptable to Lender regarding the environmental condition of the
Projects; and
(xi) such other items as Lender may reasonably
require.
(b) Lender has received all material changes made since
August 12, 1994, to the documents used in connection with the sale of
Time-Share Interests and/or the governance of the Projects, and copies of all
public reports/offering statements/prospectuses required by law to be utilized
in those jurisdictions where it is currently selling Time-Share Interests or
Lots or offering them for sale.
(c) Lender has received evidence that Borrower has been
registered and maintained all necessary licenses and permits as required by
applicable law in all jurisdictions where either Borrower has sold or offered
Time-Share Interests or Lots for sale since August 12, 1994.
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(d) Lender has received evidence that Borrower is in
compliance with all environmental, health and safety laws and that it does not
have any material contingent liability in connection with such matters.
Waiver by Lender of any of the foregoing as a condition to the effectiveness of
this Amendment shall not relieve Borrower of the obligation to satisfy such
condition as promptly as possible thereafter.
2.8 Lender's obligation to make any Advance secured by Receivables
Collateral arising from the sale of Lots in the Holiday Hills Lot Project shall
be subject to and conditioned upon the following additional terms and
conditions:
(a) Lender shall have completed a site inspection of the
Holiday Hills Lot Project by Lender, satisfactory to Lender.
(b) Borrower shall have delivered to Lender at least
fifteen (15) Business Days prior to the date of the first Advance secured by
Receivables Collateral arising from the sale of Lots in the Holiday Hills Lot
Project:
(i) Evidence of assurances of completion of the
nine-hole golf course improvement at the Holiday Hills Lot Project
satisfactory to Lender;
(ii) if the Holiday Hills Lot Project has not been
registered under such act and Lender requests such an opinion, a copy
of an advisory opinion issued by the federal Office of Interstate Land
Sales Registration that the subject Project does not fall within the
purview of the Interstate Land Sales Full Disclosure Act, or a legal
opinion from Borrower's counsel acceptable to Lender;
(iii) a copy of the form of the purchase contract,
deed, Instrument, Purchaser Mortgage, credit applications and
disclosures, and other documents and exhibits which have been or are
being used by Borrower in connection with the Holiday Hills Lot
Project, together with the Project governing documents, the Project
management agreement, the Project exchange affiliation agreement(s) (if
any) and advertising materials;
(iv) a pro forma lender's title policy for Lots in
the Holiday Hills Lot Project in a form acceptable to Lender;
(v) an environmental assessment of the Holiday
Hills Lot Project satisfactory to Lender;
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(vi) a favorable opinion from independent counsel
for Borrower in form and substance substantially identical to Exhibit
A-3 hereto; and
(vii) such other items as Lender may reasonably
require related to the Holiday Hills Lot Project, including, without
limitation, a UCC financing statement covering all Receivables
Collateral arising from the sale of Lots therein that is assigned to
Lender, and an amendment to the Loan Agreement identifying the
Permitted Encumbrances with respect thereto.
2.9 Notwithstanding anything herein or in the Documents to the
contrary, Borrower shall, on or before the 60th day following the date hereof,
have completed the installation of (and provided to Lender documentary
evidence of such installation acceptable to Lender) "secondary containment" for
all above-ground storage tanks located on the real property comprising the
Holiday Hills Resort. Borrower's failure to comply with the foregoing
requirements shall constitute an Event of Default under the Documents.
2.10 Lender's continuing obligation to make Advances of the Loan
shall be conditioned upon Borrower's delivery of current financial statements
of Xxxxxx X. Xxxx to Lender within ninety (90) days following the date of this
Agreement.
2.11 This Amendment may not be amended or otherwise modified except
in a writing duly executed by the parties hereto.
2.12 If any one or more of the provisions of this Amendment is held
to be invalid, illegal or unenforceable in any respect or for any reason (all
of which invalidating laws are waived to the fullest extent possible), the
validity, legality and enforceability of any remaining portions of such
provision(s) in every other respect and of the remaining provision(s) of this
Amendment shall not be in any respect impaired. In lieu of each such
unenforceable provision, there shall be added automatically as a part of this
Amendment a provision that is legal, valid and enforceable and is as similar in
terms to such unenforceable provisions as may be possible.
2.13 This Amendment constitutes the entire agreement and
understanding of the parties with respect to the subject matter hereof and this
Amendment and the Documents, as amended hereby, supersedes all prior written or
oral understandings and agreements between the parties in connection with its
subject matter.
(a) All Schedules and Exhibits referred to herein are
herein incorporated by this reference.
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2.14 This Amendment may be executed in one or more counterparts,
and any number of which having been signed by all the parties hereto shall be
taken as one original.
2.15 Borrower and Lender hereby ratify and confirm the Loan
Agreement, as amended hereby, in all respects; and, except as expressly amended
hereby, the Loan Agreement shall remain in full force and effect.
IN WITNESS WHEREOF this instrument is executed as of the date set
forth above.
"BORROWER"
ASCENSION RESORTS, LTD., a Texas
limited partnership, d/b/a Silverleaf
Resorts, Ltd.
By: ASCENSION CAPITAL CORPORATION, a
Texas corporation
Its: General Partner
BY: /s/ XXXXXX X. XXXX
------------------------------------------
Xxxxxx X. Xxxx
Its: Chief Executive Officer
"LENDER"
FINOVA Capital Corporation,
a Delaware corporation,
formerly known as
Greyhound Financial Corporation
By: /s/ XXXX XXXXXX, III
----------------------------------------------
Print Name: XXXX XXXXXX, III
---------------------------------------
Title: Group Vice President
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List of Exhibits
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Exhibits A-1 and A-2 Form of Legal Opinion Required Pursuant to Paragraph
2.7(a)(vi)
Exhibit A-3 Form of Legal Opinion Required Pursuant to Paragraph
2.8(b)(vi)
Exhibit B Replacement Exhibit B to Loan Agreement (defining
"Eligible Instruments")
Exhibit E Supplement to Exhibit E to Loan Agreement (adding
Permitted Encumbrances for Missouri Time-Share
Projects and Holiday Hills Lot Project)
The above-listed exhibits are omitted from this filing. Registrant
agrees to furnish supplementally a copy of any omitted exhibit to the
Commission upon request.
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