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EXHIBIT 10.11
SECOND AMENDMENT TO
LOAN AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT dated as of
October 31, 1996 (the "Second Amendment"), is by and between TEXTRON FINANCIAL
CORPORATION, a Delaware corporation (the "LENDER"), and SILVERLEAF VACATION
CLUB, INC., a Texas corporation (the "BORROWER"), formerly known as ASCENSION
CAPITAL CORPORATION, successor to ASCENSION RESORTS, LTD., a Texas limited
partnership (the "ORIGINAL BORROWER"), by merger of EQUAL INVESTMENT COMPANY, a
Texas corporation, ASCENSION RESORTS, LTD. and ASCENSION CAPITAL CORPORATION
(the "GUARANTOR").
W I T N E S S E T H :
WHEREAS, Lender, Original Borrower and Guarantor are parties to that
certain Loan and Security Agreement dated as of August 15, 1995 (the "LOAN AND
SECURITY AGREEMENT"), pursuant to which the Original Borrower executed its
Secured Promissory Note in favor of the Lender in the amount of $5,000,000.00,
as amended to date (the "NOTE");
WHEREAS, on December 28, 1995 Ascension Resorts, Ltd. was merged into
Ascension Capital Corporation, a Texas corporation ("ASCENSION"), and Ascension
was thereafter renamed Silverleaf Vacation Club, Inc. ("SILVERLEAF"); and
WHEREAS, on December 28, 1995, Lender, Borrower and Guarantor amended
the Loan and Security Agreement pursuant to a First Amendment to Loan and
Security Agreement dated as of December 28, 1995 (the "FIRST AMENDMENT TO LOAN
AND SECURITY AGREEMENT") to, among other things, evidence Lender's approval of
the merger of Ascension Resorts, Ltd. into Ascension Capital Corporation and to
reflect the above-mentioned merger and name change; and
WHEREAS, pursuant to a commitment letter dated as of October 29, 1996,
the parties thereto agreed, among other things, to modify the terms of the Loan
and Security Agreement to, among other things, increase the amount of the Loan,
to decrease the interest rate, and to extend the maturity date of the Loan; and
WHEREAS, Lender and Borrower have agreed to enter into this Second
Amendment to Loan and Security Agreement dated as of October 31, 1996 (the
"SECOND AMENDMENT TO LOAN AND SECURITY AGREEMENT") to amend the Loan and
Security Agreement as provided in the October 29, 1996 commitment letter; and
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:
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1. Loan Amount. The maximum loan amount is increased from
$5,000,000.00 to $15,000,000.00 and all references to "$5,000,000.00" on the
cover page, in Section 1.1(ff), and in Section 2.1 in the Loan and Security
Agreement are hereby changed to "$15,000,000.00".
2. Closing Date. "Closing Date" as defined in Section 1.1(g)
shall for purposes of Section 4.1 only mean November 30, 1996.
3. Commitment. To reflect the issuance of a second commitment
letter, Section 1.1(j) is hereby amended to read as follows:
(j) Commitment. Collectively, (i) the Loan
Commitment issued by Lender to Borrower dated May 11, 1995 and
accepted on May 26, 1995 (the "Original Commitment"); and (ii)
the Loan Commitment issued by Lender to Borrower dated October
29, 1996 and accepted on December 27, 1996 (the "1996
Commitment").
4. Commitment Fee. To reflect the commitment fee provided for by
the 1996 Commitment, Section 1.1(k) is hereby amended to read as follows:
(k) Commitment Fee. With respect to the Original
Commitment, the commitment fee in the amount of $50,000.00
described in the Original Commitment, which was paid in
accordance with the terms of the Original Commitment. With
respect to the 1996 Commitment, the commitment fee in the
amount of $100,000.00 described in the 1996 Commitment, which
is to be paid in accordance with the terms of the 1996
Commitment and this Agreement.
5. Final Maturity Date. The Final Maturity Date is hereby
extended from August 31, 2000 to November 30, 2002 and the reference to "August
31, 2000" set forth in Section 1.1(w) is hereby changed to "November 30, 2002".
6. Interest Rate. The variable Interest Rate described in Section
1.1(cc) is changed from the Prime Rate plus two and three-quarters percent (2
3/4%) per annum to the Prime Rate plus two percent (2.00%) per annum and the
reference to "two and three-quarters percent (2 3/4%) per annum" set forth in
Section 1.1(cc) is hereby changed to "two percent (2.00%) per annum".
7. Loan Year. Section 1.1(hh) is amended to read as follows:
Effective commencing November 30, 1996, the period from
November 30, 1996 through the last day of the next full
twelve
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(12) calendar month period (Loan Year One) and each
twelve (12) calendar month period thereafter.
8. Note. The definition of "Note" in Section 1.1(mm) is changed
to reflect the Amended and Restated Secured Promissory Note and Section 1.1(mm)
is hereby amended to read as follows:
The Secured Promissory Note evidencing the Loan dated
the Closing Date executed and delivered by Borrower
to Lender concurrently with the Agreement, as amended
and restated by the Amended and Restated Secured
Promissory Note dated as of October 31, 1996, a copy
of which is attached hereto as Exhibit B-1.
9. Revolving Credit Period. The revolving credit period is
extended from August 31, 1996 to November 30, 1998 and the reference to "August
31, 1996" in Section 2.1 of the Loan and Security Agreement is hereby changed to
"November 30, 1998".
10. Voluntary Prepayments. The right of the Borrower to make
voluntary prepayments is changed and Section 2.4(a) of the Loan and Security
Agreement is hereby amended to read as follows:
(a)(i) From the date hereof through and including
November 30, 1998, subject to the terms of this
Agreement, Borrower may not voluntarily prepay the
Loan, in whole or in part, except as set forth in
this Section 2.4(a)(i). A voluntary prepayment under
this Subsection 2.4(a)(i) shall be permitted solely
in connection with the sale or pledge in bulk in
minimum increments of $5,000,000.00 or more of notes
receivable relating to the Resorts and, in the event
of a bulk pledge, further provided that any such bulk
pledge is not made to a Warehouse Lender other than a
Warehouse Lender that is providing temporary
financing in connection with the securitization of
all such notes receivable. For purposes hereof, a
"Warehouse Lender" means a lender who agrees to
refinance notes receivable for a period of one (1)
year or less. Borrower may make such prepayment only
after thirty (30) days' prior written notice to
Lender. Any such prepayment must include all accrued
but unpaid interest, and accrued but unpaid
contributions, taxes, insurance, loan charges
(including Minimum Loan Usage Fees), custodial fees,
attorneys' and paralegals' fees and expenses and
other fees or expenses incurred by Lender or advanced
to or on behalf of
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Borrower by Lender pursuant to any of the Loan
Documents accrued but unpaid.
(a)(ii) No prepayment premium shall be required in
connection with any voluntary prepayment made in
accordance with Section 2.4(a)(i).
(a)(iii) Commencing on and after December 1, 1998,
subject to the terms of this Agreement, and to the
payment of the prepayment premium set forth in
Section 2.4(c) below, Borrower may prepay the Loan,
in whole but not in part, after (30) days' prior
written notice to Lender. Any such prepayment must
include all outstanding principal, accrued but unpaid
interest, and all other Obligations, including the
applicable prepayment premium provided in Section
2.4(c) below and the Minimum Loan Usage Fees.
11. Mandatory Prepayments. Section 2.4(b) is hereby amended to read
as follows:
If at any time and for any reason, the outstanding
unpaid principal balance of the Loan shall exceed the
aggregate amount of the Borrowing Base, then, within
five (5) Business Days following Borrower's receipt
of telecopied notice from Lender of the occurrence of
such excess over Borrowing Base or, absent such
telecopied notice, within fifteen (15) days after
the end of the calendar month in which such excess
occurred, (i) Borrower shall prepay the principal
balance of the Loan in an amount equal to the
difference between the aggregate principal amount of
the Loan and the amount of the Borrowing Base, or
(ii) if the Lender has determined that notes
receivable have been delivered to Lender and were
included in the Borrowing Base, which notes
receivable did not or no longer satisfy the
requirements for inclusion in the Borrowing Base as
Eligible Notes Receivable ("Ineligible Notes
Receivable"), Borrower shall substitute Eligible
Notes Receivable for the Ineligible Notes Receivable
and thereby increase the aggregate principal amount
of Eligible Note Receivables pledged to Lender so
that the amount of Borrowing Base equals or exceeds
the aggregate outstanding principal amount of the
Loan. The pledge and delivery to Lender of additional
Eligible Notes Receivable shall comply with the
document delivery and recordation requirements set
forth in Section 4.2(b) of this Agreement and shall
be accompanied by a written certification of the
Borrower to the effect that such additional Pledged
Notes
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Receivable are Eligible Notes Receivable, and that,
giving effect to the pledge to Lender of such
Eligible Note Receivable, the outstanding unpaid
principal balance of the Loan is equal to or less
than the aggregate amount of the Borrowing Base. If
Borrower elects to prepay the excess principal
balance of the Loan pursuant to this Section
2.4(b)(i) above, no prepayment premium shall be
payable in connection with such prepayment.
12. Prepayment Premiums. Section 2.4(c) is hereby amended to read
as follows:
(c) Premiums. Any prepayment of the Loan
pursuant to Section 2.4(a) above must be accompanied
by a prepayment premium calculated, as of immediately
prior to such prepayment as follows:
Date of Prepayment Premium
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Loan Years One No prepayment premium.
and Two Prepayment, without
prepayment premium, permitted
only in accordance with
Section 2.4(a)(i).
Loan Year Three One half percent (0.5%) of
the then outstanding balance
of the Loan.
No prepayment premium shall be payable in connection
with any prepayment of the principal balance of the
Loan which arises from the prepayment of one or more
Eligible Notes Receivable by its maker or makers.
13. Minimum Loan Usage Fee. A new Section 2.5 is hereby added to
the Agreement as follows:
2.5 Minimum Loan Usage Fee. In addition to the
interest payable pursuant to this Agreement, Borrower
shall pay to Lender, with respect to the six month
period commencing on May 1, 1997 and ending on
November 30, 1997 and with respect to each six month
period thereafter through and including November 30,
1998, on the fifth day after every such six month
period, IN ARREARS, a fee (the "Minimum Loan Usage
Fee") equal to the product of: (a) the excess, if any
of (i) $7,500,000.00, over (ii) the average daily
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outstanding principal balance of the Note for such
six month period; times (b) two percent (2.00%).
14. Loan Documents/Collateral. Section 5(b)(iv) is hereby amended
to read as follows:
(iv) delivered to Lender, with respect to
each Encumbered Interval, a commitment for a
mortgagee's title insurance policy showing that the
Mortgage in respect of such Interval has been
assigned to Lender and insuring in favor of Lender
the first priority Lien of such Mortgage in the
amount of the Advance to be made in respect of such
Pledged Note Receivable, with a satisfactory title
insurance policy to be issued on the date of Advance.
15. Partial Waiver of Requirement for Title Insurance Policies Upon
Satisfactory Maintenance of Inventory Control Procedures. A new subparagraph
(f) is hereby added to Section 5 of the Agreement as follows:
(f) Partial Waiver of Requirement for Title Insurance Policies Upon
Satisfactory Maintenance of Inventory Control Procedures. Anything in
Section 5(b)(iv) hereof to the contrary notwithstanding, on and after
December 1, 1996, the delivery of a commitment for a mortgagee title
insurance policy and a mortgagee title insurance policy shall be
required only with respect to twenty-five percent (25%) of the
Eligible Notes Receivable delivered to Lender in respect of each
advance, subject to the following requirements and limitations:
(i) Borrower shall be in full compliance with the Inventory
Control Procedures (as defined herein); and
(ii) Lender shall have the right in its sole discretion to
determine those Eligible Notes Receivables in respect of which
commitments for mortgagee title insurance policies and also the
mortgagee title insurance policies themselves shall be
required.
In the event that Borrower fails to satisfy the requirements of
Subparagraph 5(f)(i), then, immediately upon such failure, the partial
waiver provided under this subparagraph shall no longer be effective.
16. Organization, Standing, Qualification. Section 6.1 is hereby
amended to read as follows:
Borrower (a) is a duly organized and validly existing Texas
corporation in good standing under the laws of the State of
Texas, and (b) has all requisite power, corporate or
otherwise, to conduct
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its business and to execute and deliver, and to perform its
obligations under, the Loan Documents.
17. Tax Identification/Social Security Numbers. Section 6.22 is
hereby amended to read as follows:
The Borrower's federal taxpayer's identification number is
00-0000000.
18. Inventory Control Procedures. A new Section 6.23 is hereby
added to the Agreement as follows:
6.23 Inventory Control Procedures. Borrower has provided to Lender a
true and complete copy of the Borrower's Inventory, Sales and
Assignments procedures (the "Inventory Control Procedures"), a copy of
which is attached hereto as Exhibit E.
19. Maintenance of Inventory Control. A new Section 7.1(x) is
hereby added to the Agreement as follows:
(x) Maintenance of Inventory Control. Borrower shall maintain and at
all times fully comply with the Inventory Control Procedures from the
date hereof until the Loan is repaid in full. Borrower shall permit
Lender, its officers, employees, auditors, and other agents or
designees to review the books and records of Borrower and make such
other examinations and inspections as Lender in its sole discretion
deems necessary to determine that Borrower is in full compliance with
such Inventory Control Procedures.
20. Notice Address to Borrower. The notice address for the Borrower
is changed to reflect the change in name of the Borrower and the notice address
for the Borrower set forth in Section 12.1 is hereby changed to:
Silverleaf Vacation Club, Inc.
0000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xx. Xxxxxx X. Xxxx, CEO
21. Exhibit A. The Form of Request and Borrowing Base Certificate
is changed to reflect the changes to the Loan and the name of the Borrower and
Exhibit A attached to the Loan and Security Agreement is hereby deleted and
replaced by Exhibit A hereto.
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22. Exhibit C. The references to the terms Assignment of Deeds of
Trust, Subordination Agreement, Environmental Indemnity, and Lockbox Agreement
shall mean those documents as heretofore or hereafter amended.
23. Definitions. All capitalized terms used herein but not
otherwise defined herein shall have the meanings ascribed to such terms in the
Loan and Security Agreement.
24. Further Documentation. Borrower agrees to execute and deliver
to Lender any and all additional documentation as Lender may now or hereafter
require in order to effectuate the terms and conditions of this Second
Amendment.
25. Ratification and Affirmation. Except as herein expressly
amended, the Loan and Security Agreement is hereby ratified and affirmed in all
respects. Without limiting the foregoing, Borrower hereby again as of the date
hereof ratifies and affirms the warranties, covenants, agreements, and
representations which the Original Borrower and the Borrower made in the Loan
and Security Agreement on August 15, 1995.
26. Effective Date. This Second Amendment shall be effective
commencing as of the later of: (1) November 30, 1996, or (2) the satisfaction
of the terms of the 1996 Commitment and Section 4.1 of the Loan and Security
Agreement, as amended (which satisfaction shall be evidenced by notice from
Lender or Lender's counsel to the Borrower or the Borrower's counsel,
respectively).
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed on their behalf as of the day and year first written
above.
Witnessed By:
TEXTRON FINANCIAL CORPORATION
By: /s/ XXXXXXXX X. XXXXX
---------------------------------
By /s/ XXXXXXXX X. XXXXX
---------------------------------
/s/ XXXXX X. XXXXXX XXXXXXXX X. XXXXX
--------------------------------- Its Vice President
SILVERLEAF VACATION CLUB, INC.
/s/ XXXXXXXX XXXXX
--------------------------------- By /s/ XXXXXX X. XXXX
----------------------------------
XXXXXX X. XXXX
/s/ XXXXXX XXXXX Its Chief Executive Officer
---------------------------------
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STATE OF CONNECTICUT )
) ss: East Hartford
COUNTY OF HARTFORD )
At East Hartford in said County and State on this 26th day of
December, 1996, personally appeared Xxxxxxxx X. Xxxxx, duly authorized Vice
President of Textron Financial Corporation, and he acknowledged the foregoing
instrument by him signed and sealed to be his free act and deed and the free
act and deed of Textron Financial Corporation.
Before me: /s/ XXXXX X. XXXXXX
---------------------------------------
Commissioner of the Superior Court
STATE OF TEXAS )
) ss:
COUNTY OF DALLAS )
At Dallas in said County and State on this 19th day of December, 1996,
personally appeared Xxxxxx X. Xxxx, C.E.O., duly authorized officer of
SILVERLEAF VACATION CLUB, INC., and he/she acknowledged the foregoing
instrument by him/her signed and sealed to be his/her free act and deed and the
free act and deed of Silverleaf Vacation Club, Inc., a Texas corporation, on
behalf of the corporation.
Before me: /s/ XXXXXX XXXXXXX
Notary Public in and for said State
My Commission Expires: 8/14/98
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[SEAL] XXXXXX XXXXXXX
NOTARY PUBLIC
STATE OF TEXAS
COMM. EXP. 08/14/98
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