ex10_1.htm


    
      

    

    Ex
10.1

     

     

    SECOND
AMENDMENT TO

    AMENDED
AND RESTATED SALE AND SERVICING AGREEMENT

     

     

    SECOND
AMENDMENT TO AMENDED AND RESTATED SALE AND SERVICING AGREEMENT (this
“Amendment”) dated as of February 12, 2010, by and among SILVERLEAF FINANCE IV,
LLC a Delaware limited liability company, as purchaser (the “Purchaser”),
SILVERLEAF RESORTS, INC., a Texas corporation, as seller and servicer (the
“Seller”) and
WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as
trustee (the “Trustee”), Backup
Servicer and Account Intermediary.

     

    WHEREAS,
the parties hereto have entered into the Amended and Restated Sale and Servicing
Agreement, dated as of December 22, 2006, by and among the Purchaser, the
Seller, and the Trustee (as amended from time to time, the
“Agreement”).  Capitalized terms used in this Amendment have the
meanings given such terms in the Agreement, except as provided otherwise herein;
and

     

    WHEREAS,
Section 11.1 of the Agreement permits the Agreement to be amended from time to
time pursuant to the conditions set forth therein.

     

    NOW
THEREFORE, in consideration of the above premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

     

    
      	
              1.

            	
              Amendments.

            


    

     

    (a)           Section
2.1(b)(xviii) is hereby amended by deleting the word “and” appearing after the
semi-colon (;) therein.

     

    (b)           Section
2.1(b)(xix) is hereby amended by replacing the period (.) appearing therein with
the following:

     

    “;
and”

     

    (c)           Section
2.1(b) is hereby amended by inserting the following after clause (xix)
thereof:

     

    “(xx) 
      the fee payable pursuant to Section 3.02(d)
of the Note Purchase Agreement shall have been paid to the Noteholder in
accordance with the terms thereof.”

     

    (d)           Section
4.10 is hereby replaced in its entirety by the following:

     

    “Section
4.10   Quarterly Statement as to
Compliance, Notice of Servicer Termination Event.


    
      
         


      

      
        1

        
          

        

      

      
         


      

    


    (a)           The
Servicer shall deliver to the Purchaser, the Trustee, the Noteholder, the Backup
Servicer and each Rating Agency, on or before the last day of each calendar
quarter beginning March 31, 2010, an Officer's Certificate, dated as of the last
day of the immediately preceding calendar quarter, stating that (i) a review of
the activities of the Servicer during the immediately preceding quarter (or, in
the case of the first such certificate, the period from January 1, 2009 to
December 31, 2009) and of its performance under this Agreement has been made
under such officer's supervision and (ii) to the best of such officer's
knowledge, based on such review, the Servicer has fulfilled all its obligations
under this Agreement throughout such calendar quarter (or, in the case of the
first such certificate, such year), or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.

    


    (b)           The
Servicer shall deliver to the Trustee, the Noteholder, the Backup Servicer and
each Rating Agency, promptly after having obtained Knowledge thereof, but in no
event later than two (2) Business Days thereafter, written notice in an
Officer's Certificate of any event which with the giving of notice or lapse of
time, or both, would become a Servicer Termination Event under Section
10.1.”

     

    (e)           Section
4.11 is hereby replaced in its entirety by the following:

     

    “Section
4.11   Independent Accountants'
Reports.   The Servicer shall cause a firm of nationally
recognized independent certified public accountants (the "Independent
Accountants"), who may also render other services to the Servicer or to the
Purchaser, to deliver to the Trustee, the Backup Servicer, the Noteholder and
each Rating Agency, on or before April 30 of each year beginning April 30, 2007,
a report dated as of December 31 of the preceding year in form and substance
reasonably acceptable to the Noteholder (the "Accountants' Report") and
reviewing the Servicer's activities during the preceding 12-month period (or, in
the case of the first such report, the period from the Cutoff Date with respect
to Receivables transferred to the Purchaser on the initial Funding Date to
December 31, 2006), addressed to the Board of Directors of the Servicer, to the
Trustee, the Backup Servicer and to the Noteholder, to the effect that such firm
has examined the financial statements of the Servicer and issued its report
therefor and that such examination (1) was made in accordance with generally
accepted auditing standards, and accordingly included such tests of the
accounting records and such other auditing procedures as such firm considered
necessary in the circumstances; (2) included tests relating to timeshare loans
serviced for others in accordance with the requirements of the Uniform Single
Attestation Program for Mortgage Bankers (the "Program"), to the extent the
procedures in the Program are applicable to the servicing obligations set forth
in this Agreement; (3) included an examination of the delinquency and loss
statistics relating to the Servicer's portfolio (including, without limitation,
the Servicer’s calculation of the Serviced Receivables Default Ratio, the Three
Month Rolling Average of Serviced Receivables Default Ratio and the Borrowing
Base); and (4) except as described in the report, disclosed no exceptions or
errors in the records relating to timeshare loans serviced for others that, in
the firm's opinion, paragraph four of the Program requires such firm to report.
The accountant's report shall further state that (1) such firm has examined and
audited the Servicer's servicing controls and procedures for the previous
calendar year and that such independent public accountants have examined certain
documents and records (including computer records) and servicing procedures of
the Servicer relating to the Receivables and the Other Conveyed Property, (2)
they have examined the most recent Servicer's Certificate prepared by the
Servicer and three other Servicer's Certificates chosen at random by such firm
and compared such Servicer's Certificates with the information contained in such
documents and records, (3) their examination included such tests and procedures
as they considered necessary in the circumstances, (4) their examinations and
comparisons described under clauses (1) and (2) above disclosed no exceptions
which, in their opinion, were material, relating to such Receivables and Other
Conveyed Property or such Servicer's Certificates, or, if any such exceptions
were disclosed thereby, setting forth such exceptions which, in their opinion,
were material, (5) on the basis of such examinations and comparison, such firm
is of the opinion that the Servicer has, during the relevant period, serviced
the Receivables and Other Conveyed Property in compliance with this Agreement
and the other Basic Documents in all material respects and that such documents
and records have been maintained in accordance with this Agreement and the other
Basic Documents in all material respects, except in each case for (A) such
exceptions as such firm shall believe to be immaterial and (B) such other
exceptions as shall be set forth in such written report. In the event such firm
requires the Trustee and/or the Backup Servicer to agree to the procedures
performed by such firm, the Servicer shall direct the Trustee and/or the Backup
Servicer, as applicable, in writing to so agree; it being understood and agreed
that the Trustee and/or the Backup Servicer will deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and neither
the Trustee nor the Backup Servicer makes any independent inquiry or
investigation as to, and shall have no obligation or liability in respect of,
the sufficiency, validity or correctness of such procedures. The Report will
also indicate that the firm is independent of the Servicer within the meaning of
the Code of Professional Ethics of the American Institute of Certified Public
Accountants.”


    
      
         


      

      
        2

        
          

        

      

      
         


      

    


    (f)           Section
4.16 is hereby replaced in its entirety by the following:

     

    “Section
4.16   Quarterly
Reports.   The Noteholder shall have the right, at its own
expense, with respect to each calendar quarter, beginning with the calendar
quarter ending March 31, 2010, to cause accountants or other parties to review
the Servicer’s and/or the Issuer’s activities during the preceding calendar
quarter (or the time period from the immediately preceding Quarterly Report (as
defined below), as applicable) and to deliver to the Noteholder on or before the
date that is 30 days from the end of such ended calendar quarter beginning April
30, 2010, a report dated as of the last day of such ended calendar quarter in
form and substance (including, without limitation, the results thereof)
acceptable to the Noteholder in its sole and absolute discretion (the “Quarterly
Report”).  Such Quarterly Report may include the review of the books
and records of Silverleaf for the preceding calendar quarter (or the time period
from the immediately preceding Quarterly Report, as applicable) as needed to
complete the Quarterly Report, including, without limitation, a review of the
Servicer’s policies and procedures and the Servicer’s calculation of the
Serviced Receivables Default Ratio, the Three Month Rolling Average of Serviced
Receivables Default Ratio, the Borrowing Base and any other matters requested by
the Noteholder.  The Servicer hereby agrees to comply with any
requests made by the Noteholder, accountants or other parties in connection with
any Quarterly Report.”

     

    (g)          Article
VI is hereby replaced in its entirety by the following:

     

    “CERTAIN ESCROW
REPRESENTATIONS

     

    “Section
6.1   Certain Escrow
Representations of Purchaser and Seller.   The Purchaser
and the Seller hereby represent and warrant to the Noteholder that (i) that
certain Amended and Restated Escrow Agreement, dated as of December 22, 2006 (as
amended, the “Original
Escrow Agreement”), by and among the Purchaser, the Seller, the Trustee,
the Custodian, the Noteholder, Chicago Title Insurance Company (the “Original Escrow
Agent”), Stewart Title Guaranty Company, Tri-Lakes Title Company, Inc.,
Stone County Abstract and Title, Hillsboro Title Company, Inc., Tri County Title
Company, James C. Weidner and First American Title Insurance Company was
terminated pursuant to that certain Termination Agreement, dated as of February
12, 2010, by and among the Purchaser, the Seller, the Trustee, the Custodian,
the Noteholder and the Original Escrow Agent, and such termination was effective
as of the date thereof, (ii) there are no amounts outstanding that are due and
payable to the original Escrow Agent or any of Stewart Title Guaranty Company,
Tri-Lakes Title Company, Inc., Stone County Abstract and Title, Hillsboro Title
Company, Inc., Tri County Title Company, James C. Weidner and First American
Title Insurance Company (collectively, the “Original Title
Companies”) pursuant to the Original Escrow Agreement and (iii) the
Original Escrow Agent and the Original Title Companies have delivered or cause
the delivery of all required documentation pursuant to the Original Escrow
Agreement.  For the avoidance of doubt, a breach of any of the
representations or warranties contained in this Section 6.1 shall be deemed to
be an Event of Default.”


    
      
         


      

      
        3

        
          

        

      

      
         


      

    


    (h)          Article
VII of the Agreement is hereby amended by inserting the following after Section
7.1 thereof:

     

    “Section
7.2   Required Transaction, Rating
of the Note.   No later than June 30, 2010, the Purchaser
shall have either (i) completed the Required Transaction or (ii) obtained an
updated rating of the Note by Moody’s or Standard & Poor’s Rating Service, a
division of McGraw-Hill Companies, Inc., which rating shall be no lower than
“Baa2” or “BBB”, respectively.

    


    (i)           The
Escrow Agent Wire Instructions attached to the Agreement as Exhibit I is hereby
amended and replaced in its entirety with the Escrow Agent Wire Instructions
attached to this Amendment as Exhibit I.

     

    


    (j)           The
definition of “Applicable Margin” is hereby replaced in its entirety by the
following:

     

    “Applicable Margin”
means (a) with respect to any day prior to the commencement of the Amortization
Period, 5.00%; and (b) with respect to any day on or after which the
Amortization Period commences (other than due to the events described in
subsections (I) and (III) of the definition of Facility Termination Date), the
Default Applicable Margin.”

     

    (k)          The
definition of “Default Applicable Margin” is hereby replaced in its entirety by
the following:

     

    “Default Applicable
Margin” means 5.75%.”

     

    (l)           The
definition of “Escrow Agent” is hereby replaced in its entirety by the
following:

     

    “Escrow Agent” means
Stewart Vacation Ownership Title Agency, Inc.”

     

    (m)         The
definition of “Escrow Agreement” is hereby replaced in its entirety by the
following:


    
      
         


      

      
        4

        
          

        

      

      
         


      

    


    “Escrow Agreement”
means the Escrow Agreement dated as of February 12, 2010, among Silverleaf, the
Purchaser, the Issuer, UBS, Wells Fargo Bank, National Association, as Trustee
and Custodian, and the Escrow Agent, as the same may be amended or supplemented
from time to time.”

     

    (n)          The
definition of “Final Scheduled Settlement Date” in Annex A is hereby replaced in
its entirety by the following:

     

    “Final Scheduled Settlement
Date” means the Settlement Date occurring in February 2013; provided, that, if all the
conditions to the first Advance after February 12, 2010 as set forth in Sections
6.03 or 6.04 of the Note Purchase Agreement have not been satisfied by April 30,
2010 or if the Purchaser has failed to satisfy the requirements set forth in
Section 7.2 of the Sale and Servicing Agreement by June 30, 2010, the Final
Scheduled Settlement Date shall be the Settlement Date occurring in September
2011; provided,
further that,
if the content of any Quarterly Report delivered pursuant to Section 4.16 is not
satisfactory to the Noteholder, as determined in its sole and absolute
discretion, the Final Scheduled Settlement Date shall be the earlier of (i) the
Settlement Date occurring in February 2013 and (ii) the Settlement Date
occurring two years from the Scheduled Maturity Date.”

     

    (o)          The
definition of “Maximum Invested Amount” in Annex A is hereby replaced in its
entirety by the following:

     

    “Maximum Invested
Amount” means the lesser of $106,000,000 and the Invested Amount as of
February 12, 2010; provided, that, on June 30,
2010, such amount shall automatically be reduced to $100,000,000.”

     

    (p)          The
definition of “Note Interest Rate” in Annex A is hereby replaced in its entirety
by the following:

     

    “Note Interest Rate”
means (i) for any day prior to the Facility Termination Date, the sum of LIBOR
for such day and the Applicable Margin, or (ii) for any day after the Noteholder
Excess Principal Event Date, the sum of LIBOR for such day and 5.00%, or (iii)
for any day after the Facility Termination Date has occurred as a result of
events described in subsection (II) of the definition of Facility Termination
Date, the sum of the Prime Rate for such day and the Default Applicable Margin;
provided, however, that the Note Interest Rate will in no event be higher than
the maximum rate permitted by law.

     

    (q)          The
definition of “Noteholder Excess Principal Amount” in Annex A is hereby is
hereby replaced in its entirety by the following:

     

    “Noteholder Excess Principal
Amount" means, if a Noteholder Excess Principal Event has occurred, (i)
on each Settlement Date during the first 12 month period after the Noteholder
Excess Principal Event Date, the sum of (1) the Borrowing Base Deficiency, if
any, and (2) the product of (A) the Available Funds remaining after the
distribution on such Settlement Date of the amounts pursuant to Section
5.7(a)(i) through (viii) of the Sale and Servicing Agreement and the payment of
any Borrowing Base Deficiency, and (B) (x) if the Three Month Rolling Average of
Default Ratios as of the related Determination Date is less than 1.00%, 33.33%
and (y) in all other cases, 50.00%, (ii) on each Settlement Date during the
second 12 month period after the Noteholder Excess Principal Event Date, the sum
of (1) the Borrowing Base Deficiency, if any, and (2) the product of (A) the
Available Funds remaining after the distribution on such Settlement Date of the
amounts pursuant to Section 5.7(a)(i) through (viii) of the Sale and Servicing
Agreement and the payment of Borrowing Base Deficiency, and (B) (x) if the Three
Month Rolling Average of Default Ratios as of the related Determination Date is
less than 1.00%, 66.66% and (y) in all other cases, 75.00%, and (iii) on each
Settlement Date during the third 12 month period after the Noteholder Excess
Principal Event Date and thereafter, all the Available Funds remaining after the
distribution on such Settlement Date of the amounts pursuant to Section
5.7(a)(i) through (viii) of the Sale and Servicing Agreement.”


    
      
         


      

      
        5

        
          

        

      

      
         


      

    


    (r)           The
definition of “Scheduled Maturity Date” in Annex A is hereby replaced in its
entirety by the following:

     

    “Scheduled Maturity
Date” means February 12, 2011; provided, that, if all the
conditions to the first Advance after February 12, 2010 as set forth in Sections
6.03 and 6.04 of the Note Purchase Agreement have not been satisfied by April
30, 2010 or if the Purchaser has failed to satisfy the requirements set forth in
Section 7.2 of the Sale and Servicing Agreement by June 30, 2010, the Scheduled
Maturity Date shall be September 15, 2009; provided, further that, if the content
of any Quarterly Report delivered pursuant to Section 4.16 is not satisfactory
to the Noteholder, as determined in its sole and absolute discretion, the
Scheduled Maturity Date shall be the date of notice provided by the Noteholder
or on the Noteholder’s behalf to Silverleaf that such Quarterly Report is not
satisfactory to the Noteholder.”

     

    (s)          The
definition of “Required Credit Enhancement” is hereby replaced in its entirety
by the following:

     

    “Required Credit
Enhancement” means, subject to the proviso below, if the Purchaser has
not satisfied the requirements set forth in Section 7.2 of the Sale and
Servicing Agreement, (i) if the Aggregate Principal Balance of all Eligible
Receivables as of the most recent Determination Date is less than $10,000,000,
21.0% and (ii) in all other cases, the percentages indicated in the matrix below
as the Required Credit Enhancement (“RCE”):

     

    
      	
              Weighted
      Average FICO Score

            	
              Weighted
      Average Seasoning

              (0-6
      months)

               

            	
              Weighted
      Average Seasoning

              (7-12
      months)

               

            	
              Weighted
      Average Seasoning

              (12+
      months)

               

            
	
              650-665

            	
              RCE
      = 27.0%

               

            	
              RCE
      = 23.0%

               

            	
              RCE
      = 21.0%

               

            
	
              666-680

            	
              RCE
      = 26.0%

               

            	
              RCE
      = 22.0%

               

            	
              RCE
      = 20.0%

               

            
	
              681-699

            	
              RCE
      = 25.0%

               

            	
              RCE
      = 21.0%

               

            	
              RCE
      = 19.0%

               

            
	
              >
      or = 700

            	
              RCE
      = 24.0%

               

            	
              RCE
      = 20.0%

               

            	
              RCE
      = 18.0%

               

            


    

    


    For the
purposes of determining the Weighted Average FICO Score as referenced above,
Obligors for whom no FICO score is available will be deemed to have a FICO score
of 550.

     

    Provided,
however, if the Purchaser has satisfied the requirements set forth in Section
7.2 of the Sale and Servicing Agreement, “Required Credit Enhancement” shall
mean (i) if the Purchaser has obtained an updated rating of the Note pursuant to
Section 7.2(ii) of the Sale and Servicing Agreement, the percentage determined
by the Noteholder in its sole and absolute discretion to reflect the advance
rate applied by Moody’s or S&P (as defined below) to assign a rating of
“Baa2” or “BBB” to the Note, respectively, or (ii) if the Purchaser has
completed the Required Transaction pursuant to Section 7.2(i) of the Sale and
Servicing Agreement, the percentage determined by the Noteholder in its sole and
absolute discretion to reflect the advance rate applied by Moody’s and/or
Standard & Poor’s Rating Service, a division of McGraw-Hill Companies, Inc.
(“S&P”), in connection with the class of securities issued in connection
with the Required Transaction and rated “Baa2” or “BBB”, respectively; provided,
that, if no class of securities issued in connection with the Required
Transaction is rated “Baa2” or “BBB” by either Moody’s or S&P, respectively,
then the percentage determined by the Noteholder in its sole and absolute
discretion to reflect the advance rate that would have been by applied by
Moody’s or S&P if such class of securities had been issued; provided
further, that, if the advance rate that was applied or that would have been
applied by Moody’s and S&P resulted or would have resulted, as the case may
be, in different Required Credit Enhancement percentages, then the Required
Credit Enhancement shall be the greater of the Required Credit Enhancement
percentages, as determined by the Noteholder in its sole and absolute discretion
and based on such advance rates.


    
      
         


      

      
        6

        
          

        

      

      
         


      

    


    (t)           The
following definition is hereby added to Annex A, after the definition of
“Lien”:

     

    ““Limited Liability Company
Agreement” shall mean the limited liability company agreement of the
Issuer, effective as of January 19, 2006, as amended from time to
time.””

     

    (u)          The
following definition is hereby added to Annex A, after the definition of
“Required Reserve Percentage”:

     

    ““Required Transaction”
shall mean a securitization pursuant to which at least ninety percent (90%) of
the Principal Balance of all Receivables securing the Note, as of the most
recent Determination Date, has been sold for an amount equal to at least the sum
of (i) the Aggregate Principal Balance of such Receivables as of the most recent
Determination Date and interest accrued thereon and (ii) all accrued fees,
expenses and other amounts due and payable pursuant to the Basic
Documents.”

     

    (v)          The
following definition is hereby added to Annex A, after the definition of “Three
Month Rolling Average of Serviced Receivables Default Ratios”:

     

    ““Three Month Rolling Average
of Serviced Receivables Default Ratios Event” shall occur if the Three
Month Rolling Average of Serviced Receivables Default Ratios as of any date of
determination exceeds the following parameters:

     

    


    
      	
              Most
      Recently Ended Accrual Period

               

            	
              Three
      Month Rolling Average of Serviced Receivables Default Ratios

               

            
	 	
              January

            	
              1.80%

               

            
	 
      	
              February

            	
              1.70%

               

            
	 
      	
              March

            	
              1.60%

               

            
	 
      	
              April

            	
              1.50%

               

            
	 
      	
              May

            	
              1.40%

               

            
	 
      	
              June

            	
              1.30%

               

            
	 
      	
              July

            	
              1.40%

               

            
	 
      	
              August

            	
              1.50%

               

            
	 
      	
              September

            	
              1.60%

               

            
	 
      	
              October

            	
              1.70%

               

            
	 
      	
              November

            	
              1.70%

               

            
	 
      	
              December

            	
              1.80%”

               

            


    


    
      
         


      

      
        7

        
          

        

      

      
         


      

    


    
      	
              2.

            	
              Miscellaneous.

            


    

     

    (a)          This
Amendment may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.

     

    (b)          This
Amendment shall be deemed to be a contract made under the laws of the State of
New York and shall for all purposes be governed by, and construed in accordance
with, the laws of the State of New York.

     

    (c)          The
headings of the several sections of this Amendment are for convenience only and
shall not affect the construction hereof.

     

    (d)          This
Amendment shall be deemed to be a Basic Document under the Indenture and the
other Basic Documents.

     

    (e)          The
Noteholder shall not, by any act, delay, omission or otherwise, whether prior
to, on, or after the date hereof, be deemed to have expressly or impliedly
waived any of its rights, powers and/or remedies unless such waiver shall be in
writing and signed by an authorized officer of the Noteholder.  Any
such waiver shall be enforceable only to the extent specifically set forth
therein.  A waiver by the Noteholder of any right, power and/or remedy
on any one occasion shall not be construed as a bar to or waiver of any such
right, power and/or remedy which the Noteholder would otherwise have on any
future occasion, whether similar in kind or otherwise.


    
      
         


      

      
        8

        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, this Amendment has been duly executed and delivered as of the
date first above written.

     

    


    
      	 
      	
              SILVERLEAF
      FINANCE IV, LLC

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              S/ HARRY J. WHITE, JR.

            
	 
      	
              Title:

            	
              Chief Financial Officer

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              SILVERLEAF
      RESORTS, INC.

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              /S/ HARRY J. WHITE, JR.

            
	 
      	
              Title:

            	
              Chief Financial Officer

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              WELLS
      FARGO BANK, NATIONAL ASSOCIATION, in its capacity as
    Trustee

            
	 
      	 
      	 
      
	 
      	 
      	 
      
	 
      	
              By:

            	
              /S/ SUE DIGNAN

            
	 
      	
              Title:

            	
              Vice
President

            


    

    


    


    Exhibits
to Agreement Not Filed Herewith:

    


    Exhibit I
Escrow Agent Wire Instructions

    
 

    9