exv10w5






Exhibit 10.5




SECOND AMENDMENT TO

CONSOLIDATED, AMENDED AND RESTATED

LOAN AND SECURITY AGREEMENT

AND LOAN DOCUMENTS




          THIS SECOND AMENDMENT TO CONSOLIDATED, AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT AND
LOAN DOCUMENTS, dated as of May 20, 2008 (the “Amendment”), by and between TEXTRON FINANCIAL
CORPORATION, a Delaware corporation (the “Lender”), and SILVERLEAF RESORTS, INC. (formerly known as
SILVERLEAF VACATION CLUB, INC.), a Texas corporation (the “Borrower”).




W I T N E S S E T H:




          WHEREAS, Lender and Borrower are parties to that certain Consolidated, Amended and Restated
Loan and Security Agreement, dated as of February 21, 2007, as amended by that certain Amendment to
Consolidated, Amended and Restated Loan and Security Agreement and Loan Documents, dated as of
October 31, 2007 (collectively, the “Agreement”);




          WHEREAS, Lender has agreed with Borrower to purchase approximately $40,000,000 of certain
asset backed secured notes to be issued by Silverleaf Finance VI, LLC, a bankruptcy-remote, special
purpose entity established by Borrower (“SFVI”); and




          WHEREAS, in connection with Lender’s purchase of such notes, Lender and Borrower have agreed
to make certain modifications to the Agreement as set forth herein.




          NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:




     1. Defined Terms. Except as expressly set forth herein, terms used but not defined
herein shall have the meaning ascribed to such terms in the Agreement.



     2. Acquisition Loan Component. The term “Acquisition Loan Component” is hereby
amended in its entirety to read as follows:



          “Acquisition Loan Component. The Acquisition Loan Component shall be that portion of
the Loan that may be used by Borrower to fund the acquisition of the Real Property in an aggregate
amount not to exceed $10,000,000.00, subject to the terms and provisions of this Agreement.”




     3. Commitment. The term “Commitment” is hereby amended in its entirety to read as
follows:



          “Commitment. The term “Commitment” shall refer singly to the obligation of Lender to
make a Loan or Loans to Borrower and collectively to all Loans to be made by Lender to Borrower as
provided herein. The maximum aggregate Commitment of Lender hereunder shall be $100,000,000.00,
provided, however, that: (i) the maximum Commitment of Lender




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with respect to the Acquisition Loan Component shall be $10,000,000.00; (ii) the maximum
Commitment of the Lender with respect to the Inventory Loan Component shall be $50,000,000.00;
(iii) the Maximum aggregate Commitment of Lender with respect to the Acquisition Loan Component and
the Inventory Loan Component shall be $50,000,000.00; and (iv) the maximum aggregate Commitment of
Lender hereunder shall be reduced by the aggregate of: (x) the outstanding principal balance from
time to time of the Notes purchased by Lender pursuant to the Note Purchase Documents and (y) an
amount equal to ten and one half percent (10.5%) of the outstanding principal balance of the TFC
Conduit Loan from time to time. The available amount of the Commitment that Borrower may borrow
from time to time as an Advance hereunder shall be determined by Lender on the date of each request
by Borrower for an Advance, but in no event less frequently than the last day of each month during
the Term hereof, based upon the then current aggregate principal balance on each such determination
date of the Loan, the Notes and the TFC Conduit Loan.”




     4. Interest Rate. The term “Interest Rate” is hereby amended in its entirety to read
as follows:



          “Interest Rate. The Interest Rate on: (i) the Receivable Note shall bear interest at
a variable rate, adjusted as of each Prime Rate Determination Date, equal to the Prime Rate,
determined as of each Prime Rate Determination Date, but in no event shall the Interest Rate on the
Receivable Note be less than six percent (6.0%) per annum at any time; (ii) the Inventory Note
shall bear interest at a variable rate, adjusted as of each Prime Rate Determination Date, equal to
the Prime Rate, determined as of each Prime Rate Determination Date, plus one percent (1.0%) per
annum, but in no event shall the Interest Rate on the Inventory Note be less than six percent
(6.0%) per annum at any time; and (iii) the Acquisition Note shall bear interest at a variable
rate, adjusted as of such Prime Rate Determination Date, equal to the Prime Rate, determined as of
each Prime Rate Determination Date, plus three percent (3.0%) per annum, but in no event shall the
Interest Rate on the Acquisition Note be less than eight percent (8.0%) per annum at any time.”




     5. TFC Conduit Loan. The term “TFC Conduit Loan” is hereby amended in its entirety to
read as follows:




     “TFC Conduit Loan. Shall mean that certain loan facility provided by Textron
Financial Corporation (TFC) to SPV in accordance with the terms of the Silverleaf Finance II
Documents, as evidenced by: (i) the Subordinated Note dated as of December 19, 2003 in the
original principal amount of $66,380,808.54 made by SPV to TFC and (ii) the Subordinated
Note dated as of March 28, 2005 in the original principal amount of $26,333,737.55 made by
SPV to TFC, regardless of whether such notes are now or hereafter held by TFC.”



     6. Section 1 is hereby amended to add the following new definitions:



          “Notes. The term “Notes” shall mean the asset backed secured notes that are purchased
by Lender from SFVI pursuant to the Note Purchase Documents.”




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          “Note Purchase Documents. The term “Note Purchase Documents” shall mean the documents
and agreement, dated as of May 1, 2008, pursuant to which Lender has purchased or will purchase from
SFVI the Notes.”




     7. Section 2.2(c) of the Agreement is hereby amended in its entirety to read as follows:



          “(c) Acquisition Loan Component. Upon the terms and subject to the conditions set
forth in this Agreement, including, but not limited to, Section 2.7 hereof, the Lender shall, in
its sole and absolute discretion, make Advances with respect to the Acquisition Loan Component to
the Borrower, and the Borrower may, subject to Lender’s approval, borrow, repay and reborrow from
the Acquisition Loan Component during the Revolving Loan Term in an amount not to exceed at any
time the lesser of (i)[A] with respect to unimproved Real Property, 70% of the actual cost paid by
Borrower for said Real Property; or [B] with respect to the improved Real Property, 75% of the
actual cost paid by Borrower for such Real Property or (ii) $10,000,000.00; provided, however, that
the fair market value of any such property, as determined by Lender in its sole discretion based on
an acceptable appraisal, shall in each case equal or exceed such actual costs. Notwithstanding
anything in this Section 2.2(c) or Section 2.2(b) to the contrary, the aggregate amount of all
Advances outstanding from time to time with respect to the Acquisition Loan Component and the
Inventory Loan Component may not exceed, in the aggregate, $50,000,000.”




     8. Section 2.6 is hereby amended in its entirety to read as follows:



          “2.6 Loan Component Ratio. Borrower shall maintain, at all times during the term of
the Loan, a ratio between (a) the average outstanding principal balance of the Receivable Loan
Component for the trailing six (6) month period and (b) the aggregate average outstanding principal
balances of the Acquisition Loan Component and the Inventory Loan Component for the trailing six
(6) month period of 1 to 1 computed monthly. If the 1 to 1 ratio is not maintained for any such
six month period, and during that same period, the average outstanding principal balance of the
Receivable Loan Component is less than $50,000,000, Borrower shall pay Lender a fee equal to 1/4% of
the difference between the average outstanding principal balance of the Receivable Loan Component
for such six (6) month period and $50,000,000. Furthermore, if either: (i) the ratio between the
outstanding principal balance of the Receivable Loan Component and the aggregate outstanding
principal balances of the Acquisition Loan Component and the Inventory Loan Component shall be less
than .5 to 1 at anytime or (ii) the ratio between the outstanding principal balance of the
Receivable Loan Component and the outstanding principal balance of the Acquisition Loan Component
shall be less than 1 to 1 at anytime (each an “Event of Non Funding”), then Lender shall not be
obligated to loan nor shall Borrower be entitled to borrow any Advance of the Inventory Loan
Component or the Acquisition Loan Component.”




     9. Section 2.7 is hereby amended in its entirety to read as follows:



          “2.7 Maximum Obligation of Textron Financial Corporation Under the Loan. Borrower
acknowledges, agrees and confirms as follows: (i) notwithstanding anything to the contrary in
Section 2.2(b) and 2.2(c) hereof, the aggregate principal balance of the Acquisition Loan Component
and the Inventory Loan Component shall not exceed




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$50,000,000.00; and (ii) notwithstanding anything to the contrary herein, in any other Loan
Document or in any document evidencing or securing the Receivable Loan Component, the Inventory
Loan Component and/or the Acquisition Loan Component, Lender shall not be obligated to fund any
Advance hereunder, whether of the Receivable Loan Component, the Inventory Loan Component and/or
the Acquisition Loan Component, that, when taken together with all loans or advances made by Lender
to Borrower under this Agreement, the Receivable Loan Agreement, and/or the Restated Inventory Loan
Agreement and the outstanding principal balance of the Notes and an amount equal to ten and
one-half percent (10.5%) of the outstanding principal balance of the TFC Conduit Loan, would cause
the aggregate amount of such loans, advances and principal balances to exceed a maximum aggregate
amount of $100,000,000.00. The available amount of the Commitment that Borrower may borrow from
time to time as an Advance hereunder shall be determined by Lender on the date of such request by
Borrower for Advance, but in no event less frequently than the last day of each month during the
Term hereof, based upon the then current aggregate principal balance as of each such determination
date of the Loan, the Notes and the TFC Conduit Loan.”




     10. The following new Section 2.12 is added:



          “2.12 Minimum Loan Usage Fee. In addition to the interest payable pursuant to this
Agreement, during the Revolving Loan Term Borrower shall pay to Lender, on the first day of each
month, a usage fee equal to the product of: (a) $100,000,000.00 (less the aggregate average daily
outstanding principal balance, during the immediately preceding month, of the Acquisition Loan
Component, the Inventory Loan Component, the Receivable Loan Component, the Notes and an amount
equal to ten and one-half percent (10.5%) of the average daily outstanding principal balance,
during the immediately preceding month, of the TFC Conduit Loan) times (b) one quarter
percent (.25%).”




     11. Section 7.1w(ii) is hereby amended in its entirety to read as follows:



          “(ii) Marketing and Sales Expenses. As of the last day of each fiscal quarter,
Borrower will not permit the preceding twelve (12) month cumulative ratio of Marketing and Sales
Expenses to the Borrower’s net proceeds from the sale of Intervals as recorded on the Borrower’s
financial statements for the immediately preceding twelve (12) consecutive months to equal or
exceed a ratio of .60 to 1.”




     12. Section 7.1w(iv) is hereby amended in its entirety to read as follows:



          “(iv) Interest Coverage. The Interest Coverage Ratio for Borrower shall be at least
1.25:1 calculated quarterly on the last day of each calendar quarter on a trailing twelve (12)
month basis. The term Interest Coverage Ratio means with respect to any Person on a trailing
twelve (12) month basis, the ratio of (a) EBITDA for such period less capital expenditures as
determined in accordance with GAAP, for such period to (b) the interest expense minus all non-cash
items constituting interest expense for such period.”




     13. 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 Amendment.



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     14. Effect of Amendment. Except as herein expressly amended, the Agreement shall
remain in full force and effect.



     15. Ratification and Confirmation. Except as herein expressly amended, Borrower
hereby ratifies, confirms, assumes and agrees to be bound by all of representations, warranties,
statements, covenants and agreements set forth in the Agreement and the other Loan Documents. The
Borrower reaffirms, restates and incorporates by reference all of the representations, warranties,
covenants and agreements made in the Loan Documents as if the same were made as of this date. The
Borrower agrees to pay the Loan and all related expenses, as and when due and payable in accordance
with the Loan Agreement and the other Loan Documents, and to observe and perform the Obligations,
and do all things necessary which are not prohibited by law to prevent the occurrence of any Event
of Default. In addition, to further secure, and to evidence and confirm the securing of, the
prompt and complete payment and performance by the Borrower of the Loan and all of the Obligations,
for value received, Borrower unconditionally and irrevocably assigns, pledges and grants to Lender,
and hereby confirms or reaffirm the prior granting to Lender of, a continuing first priority Lien,
mortgage and security interest in and to all of the Collateral, whether now existing or hereafter
acquired. Also, as provided in the Loan Documents, the Loan is and shall be further secured by the
Liens and security interests in favor of Lender in the properties and interests relating to
Additional Eligible Resorts, which now or hereafter serve as collateral security for any
Obligations. On the date of this Amendment and thereafter upon satisfaction of the requirements
for approval by Lender of Additional Eligible Resorts, Borrower shall record, or cause to be
recorded, such mortgages, deeds of trust, deeds to secure debt, assignments, pledges, security
agreements and UCC Financing Statements in the appropriate public records of the state in which
each Resort is located to further evidence and perfect the Lender’s Lien on the Collateral.
Borrower agrees to deliver or cause to be delivered by its Affiliates, such mortgages, deeds of
trust, deeds to secure debt, assignments, pledges, security agreements and UCC Financing Statements
as Lender may deem necessary to further evidence and perfect the Lender’s Lien on the Collateral.



     16. Estoppel. The Loan constitutes valuable consideration to the Borrower, which
consideration is uninterrupted and continuous since the dates on which the Loan was first made.
This Amendment and the other Loan Documents and the Loan modifications and transactions provided
for or contemplated hereunder or thereunder, shall in no way adversely affect the Lien or
perfection or priority of any Lien of Lender as of the date hereof in and to any Collateral, and
are not intended to constitute, and do not constitute or give rise to, any novation, cancellation
or extinguishment of any of Borrower’s Obligations existing as of the date hereof to Lender, or of
any interests owned or held by Lender (and not previously released) in and to any of the
Collateral; it being the intention of the parties that the transactions provided for or
contemplated herein shall be effectuated without any interruption in the continuity of the value
and consideration received by Borrower, and of the attachment, perfection, priority and
continuation in favor of Lender in and to all Collateral and proceeds.



     17. Loan Documents. This Amendment shall amend, without the necessity of any further
agreements, all Loan Documents as of the date hereof to reflect the decrease of the Acquisition
Loan Component from $20,000,000.00 to $10,000,000.00.



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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed on their
behalf as of the day and year first written above.




	 	 	 	 	 	 	 	 	 
	Witnessed By:	 	 	 	TEXTRON FINANCIAL CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 
	/S/ JAY MARTIN
 


	 	 	 	By
	 	/S/ JOHN D’ANNIBALE
 

	 	 
	 	 	 	 	Name:	 	 
	/S/ SHANNON MUNSON

	 	 	 	Its:	 	 	 	 
	 


	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	SILVERLEAF RESORTS, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	JERI BAKER
 


	 	 	 	By
	 	/S/ ROBERT M. SINNOTT
 

	 	 
	 	 	 	 	Name: Robert M. Sinnott	 	 
	MIKE NORRIS
 


	 	 	 	Its:
	 	 Chief Financial Officer 	 	 






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	STATE OF CONNECTICUT

	 	)	 	 
	 

	 	)ss:                     
	 	 
	COUNTY OF HARTFORD

	 	)	 	 






          At                      in said County and State on this 2ND day of June 2008, personally appeared
John D’Annibale duly authorized Vice President of Textron Financial Corporation, 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 Textron Financial Corporation.



	 	 	 	 	 	 	 
	 

	 	   Before me:
	 	/S/ MARIE G. IRIGARRY
 


Notary Public in and for said State

	 	 
	 

	 	 	 	My Commission Expires: July 31, 2012	 	 






	 	 	 	 	 
	STATE OF TEXAS

	 	)	 	 
	 

	 	)ss:                     
	 	 
	COUNTY OF DALLAS

	 	)	 	 






          At                      in said County and State on this  20th day of May
2008, personally appeared Robert M. Sinnott, duly
authorized officer of SILVERLEAF RESORTS, 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
Resorts, Inc., a Texas corporation, on behalf of the corporation.



	 	 	 	 	 	 	 
	 

	 	   Before me:
	 	/S/ JOANN POSIVAL
 

Notary Public in and for said State

	 	 
	 

	 	 	 	My Commission Expires: July 22, 2008	 	 







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