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Inventory Loan and Security Agreement

 

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Title:

Inventory Loan and Security Agreement

Entities:

Citibank, NA; Silverleaf Resorts, Inc.; Wells Fargo Bank Minnesota, NA; Mayer, Brown, Rowe & Maw; Stinson Morrison Hecker

Date:

2005

Size:

Preview shows 15KB of 266KB total

Price:

$93

ID:

#1075111

 

 

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INVENTORY LOAN AND SECURITY AGREEMENT




Ex. 10.1

INVENTORY LOAN AND SECURITY AGREEMENT

BETWEEN

SILVERLEAF RESORTS, INC.

AND

CAPITALSOURCE FINANCE LLC

DATED AS OF APRIL 29, 2005



TABLE OF CONTENTS



PAGE


1. INTERPRETATION OF THIS AGREEMENT........................................ 1

1.1 Terms Defined.................................................. 1
1.2 Directly or Indirectly......................................... 12
1.3 Headings....................................................... 12
1.4 Accounting Principles.......................................... 13

2. ADVANCES AND NOTE....................................................... 13

2.1 Terms of the Advances.......................................... 13
2.2 The Loan; Rate of Interest; Receipt of Payments................ 14
2.3 Mandatory Prepayments of Loan; Voluntary Prepayments of Loan... 17
2.4 Participating Lender........................................... 20
2.5 Fees........................................................... 20
2.6 Computation of Fees; Lawful Limits............................. 21
2.7 Late Fee....................................................... 21
2.8 Taxes and Other Charges........................................ 21

3. COLLATERAL.............................................................. 22

3.1 Security....................................................... 22
3.2 Undertakings Regarding Collateral.............................. 23
3.3 Financing Statements........................................... 24
3.4 Location of Collateral; Books and Records...................... 24
3.5 Insurance of Collateral........................................ 25
3.6 Condemnation................................................... 28
3.7 Taxes Affecting Collateral..................................... 29
3.8 Discharge of Liens Affecting Collateral........................ 32
3.9 Use of the Resorts; Voting Rights of Borrower.................. 34
3.10 Other Timeshare Covenants...................................... 35
3.11 Protection of Collateral; Assessments; Reimbursement........... 37
3.12 Interest on Lender Paid Expenses............................... 37
3.13 Lender Responsibility.......................................... 37
3.14 Verification of Contracts...................................... 37
3.15 Release of Lien on Timeshare Interests......................... 37
3.16 Cross-Collateralization and Default............................ 39
3.17 Substitution of Collateral and Mortgages....................... 39

4. REPRESENTATIONS AND WARRANTIES AND COVENANTS............................ 40

4.1 Subsidiaries and Capital Structure............................. 40
4.2 Corporate Borrower............................................. 40
4.3 Financial Statements........................................... 40
4.4 Full Disclosure................................................ 40
4.5 Pending Litigation............................................. 40
4.6 Title to Properties............................................ 41
4.7 Trademarks, Licenses and Permits............................... 41


LOAN AND SECURITY AGREEMENT

i




4.8 Transaction Is Legal and Authorized............................... 41
4.9 No Defaults....................................................... 41
4.10 Governmental Consent.............................................. 41
4.11 Taxes............................................................. 41
4.12 Use of Proceeds................................................... 42
4.13 Compliance with Law............................................... 42
4.14 Restrictions of Borrower.......................................... 43
4.15 Brokers' Fees..................................................... 43
4.16 Deferred Compensation Plans....................................... 43
4.17 Labor Relations................................................... 43
4.18 Validity of Liens Granted to Lender............................... 43
4.19 Solvency.......................................................... 43
4.20 Timeshare Interest Regime Reports................................. 44
4.21 Sale of Timeshare Interests....................................... 44
4.22 Indebtedness...................................................... 44
4.23 Affiliate Transactions............................................ 45
4.24 Applicable Laws................................................... 45
4.25 Leases............................................................ 45

5. CONDITIONS PRECEDENT TO INITIAL ADVANCE.................................... 45

5.1 Opinions of Counsel............................................... 45
5.2 Warranties and Representations True as of Initial Advance Date.... 45
5.3 Compliance with this Agreement.................................... 45
5.4 Borrower's Secretary's Certificates; Good-Standing Certificates... 45
5.5 Uniform Commercial Code Financing Statements...................... 46
5.6 Hazardous Substance Indemnity Agreement........................... 46
5.7 Expenses.......................................................... 46
5.8 Mortgage.......................................................... 46
5.9 Title Insurance; Casualty Insurance............................... 46
5.10 Environmental Site Assessment Report.............................. 47
5.11 Taxes............................................................. 47
5.12 Inspection........................................................ 47
5.13 Delivery of:...................................................... 47
5.14 Proceedings Satisfactory.......................................... 47
5.15 Minimum Amount.................................................... 48

6. SUBSEQUENT ADVANCES CLOSING CONDITIONS..................................... 48

6.1 Special Submissions............................................... 48
6.2 Requests for Subsequent Advance................................... 50
6.3 Defaults; Expenses; Miscellaneous................................. 51
6.4 Disbursements..................................................... 51
6.5 Proceedings Satisfactory.......................................... 51

7. COVENANTS.................................................................. 52

7.1 Payment of Taxes and Claims....................................... 52
7.2 Maintenance of Properties; Borrower Existence; Indebtedness;
Liens; Business................................................... 52


LOAN AND SECURITY AGREEMENT

ii




7.3 Payment of Notes and Maintenance of Office.............. 54
7.4 Sale of Properties...................................... 54
7.5 Consolidation and Merger................................ 54
7.6 Intentionally Deleted................................... 54
7.7 Intentionally Omitted................................... 54
7.8 Compliance with Environmental Laws...................... 54
7.9 Transactions with Affiliates; Principal Properties...... 56
7.10 Use of Lender Name...................................... 56
7.11 Intentionally Deleted................................... 56
7.12 Notice of Legal Proceedings............................. 56
7.13 Further Assurances...................................... 56
7.14 Financial Statements.................................... 57
7.15 Officer's Certificate................................... 59
7.16 Inspection.............................................. 60
7.17 Sales................................................... 60
7.18 Minimum Tangible Net Worth.............................. 60
7.19 Leverage Ratio.......................................... 60
7.20 Minimum Net Income...................................... 60
7.21 Consolidated Net Income................................. 60
7.22 Maximum Delinquency..................................... 60
7.23 Marketing and Sales Expenses............................ 60
7.24 Debt Service Coverage Ratio............................. 61
7.25 Textron Facility, Sovereign Facility, and DZ Facility... 61
7.26 Maintaining Affiliation with Exchange Companies......... 61
7.27 Sales................................................... 61

8. EVENTS OF DEFAULT................................................ 61

8.1 Default................................................. 61
8.2 Default Remedies........................................ 63

9. REVIVAL OF OBLIGATIONS AND LIENS................................. 66

10. MISCELLANEOUS.................................................... 66

10.1 Governing Law........................................... 66
10.2 Expenses and Closing Fees............................... 66
10.3 Parties, Successors and Assign.......................... 67
10.4 Notices................................................. 67
10.5 Total Agreement......................................... 68
10.6 Survival................................................ 68
10.7 Litigation.............................................. 68
10.8 Power of Attorney; Substitution......................... 69
10.9 Survival of Indemnities................................. 70
10.10 Conflicting Obligations; Rights and Remedies............ 70
10.11 Duplicate Originals, Execution in Counterpart........... 70
10.12 No Joint Venture........................................ 70
10.13 Indemnity............................................... 70
10.14 Release................................................. 71


LOAN AND SECURITY AGREEMENT

iii




10.15 Custodian................................................... 71
10.16 Certain Waivers............................................. 71
10.17 Confidentiality and Publicity............................... 71


Schedule 1 -- Indebtedness
Schedule 2 -- Permitted Exceptions
Schedule 3 -- Intentionally Omitted
Schedule 4 -- Retail Value
Schedule 5 -- Resorts
Schedule 6 -- Affiliate Transactions
Schedule 7 -- Use Agreements and Management Agreements
Schedule 8 -- Subsidiaries
Schedule 9 -- Resort Facilities
Schedule 10 -- Litigation
Schedule 11 -- Compensation Payable to Brokers
Schedule 12 -- Payment Instructions
Schedule 13 -- Address of Borrower for Notices
Schedule 14 -- Address of Lender for Notices
Schedule 15 -- Deferred Corporate Plans and Collective Bargaining Agreements
Schedule 16 -- Description of Blue and Vintage Timeshare Interests
Exhibit A -- Intentionally Omitted
Exhibit B -- Form of Request for Release
Exhibit C -- Intentionally Omitted
Exhibit D -- Intentionally Omitted
Exhibit E -- Form of Initial Advance Request
Exhibit F -- Form of Subsequent Advance Request
Exhibit G -- Form of Borrowing Base Certificate
Exhibit H -- Form of Promissory Note

LOAN AND SECURITY AGREEMENT

iv


INVENTORY LOAN AND SECURITY AGREEMENT

THIS INVENTORY LOAN AND SECURITY AGREEMENT (as amended from time to time,
this "AGREEMENT"), made and executed as of the 29th day of April, 2005, by and
between CAPITALSOURCE FINANCE LLC, a Delaware limited liability company, as
secured party (herein referred to as the "LENDER") and SILVERLEAF RESORTS, INC.,
a Texas corporation, as debtor (herein referred to as the "BORROWER").

1. INTERPRETATION OF THIS AGREEMENT

1.1 TERMS DEFINED. As used in this Agreement, the following terms shall
have the following respective meanings set forth below or set forth in the
Section referred to following such term:

ADVANCE -- as defined in Section 2.1 of this Agreement.

AFFILIATE -- means any Person:

(a) which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such
Person;

(b) which beneficially owns or holds 5% or more of any class of the
Voting Equity of such Person; or

(c) 5% or more of the Voting Equity of which is beneficially owned
or held by such Person.

The term "control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of Voting Equity, other voting Securities,
by contract or otherwise.


 

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