EX 10.6
STANDARD DEFINITIONS
“Account Intermediary” shall have the meaning specified in the preamble to the
Indenture.
“ACH Form” shall mean the ACH authorization form executed by Obligors
substantially in the form attached as Exhibit C to the Transfer Agreement.
“Act” shall have the meaning specified in Section 1.4 of the Indenture.
“Addition Notice” shall mean, with respect to any transfer of Subsequent
Timeshare Loans to the Issuer pursuant to Section 2 of the Transfer Agreement,
notice of the Originator's election to transfer Subsequent Timeshare Loans,
which notice shall designate the related Transfer Date and the Cut-Off Date
Aggregate Loan Balance of the Subsequent Timeshare Loans to be transferred on
such Transfer Date.
“Additional Servicing Compensation” shall mean any late fees related to late
payments on the Timeshare Loans, any non-sufficient funds fees, any processing
fees and any Liquidation Expenses collected by the Servicer and any unpaid
out-of-pocket expenses incurred by the Servicer during the related Due Period.
“Adverse Claim” shall mean any claim of ownership or any lien, security
interest, title retention, trust or other charge or encumbrance, or other type
of preferential arrangement having the effect or purpose of creating a lien or
security interest, other than the interests created under the Indenture in favor
of the Indenture Trustee and the Noteholders.
“Affiliate” shall mean any Person: (a) which directly or indirectly controls, or
is controlled by, or is under common control with such Person; (b) which
directly or indirectly beneficially owns or holds five percent (5%) or more of
the voting stock of such Person; or (c) for which five percent (5%) or more of
the voting stock of which is directly or indirectly 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 securities, by contract or
otherwise.
“Aggregate Defaulted Timeshare Loan Make-Whole Amount” shall equal the aggregate
of (A) the product of (i) the Loan Balance of each Timeshare Loan that is a
Defaulted Timeshare Loan at the end of the related Due Period and (ii) the
Funded Rate for such Determination Date and (B) the amount of any unpaid
Aggregate Defaulted Timeshare Loan Make-Whole Amounts from prior Determination
Dates.
“Aggregate Initial Note Balance” is equal to the sum of the Initial Note
Balances for all Classes of Notes.
“Aggregate Loan Balance” means the sum of the Loan Balances for all Timeshare
Loans (except Defaulted Timeshare Loans).
“Aggregate Outstanding Note Balance” is equal to the sum of the Outstanding Note
Balances for all Classes of Notes.
“Assignment of Mortgage” shall mean, with respect to a Mortgage Loan, a written
assignment of one or more Mortgages from the related Originator or Seller to the
Indenture Trustee, for the benefit of the Noteholders, relating to one or more
Timeshare Loans in recordable form, and signed by an Authorized Officer of all
necessary parties, sufficient under the laws of the jurisdiction wherein the
related Timeshare Property is located to give record notice of a transfer of
such Mortgage and its proceeds to the Indenture Trustee.
“Association” shall mean the timeshare owners' association responsible for
managing a Resort.
“Assumption Date” shall have the meaning specified in the Backup Servicing
Agreement.
“Authorized Officer” shall mean, with respect to any corporation, limited
liability company or partnership, the Chairman of the Board, the President, any
Vice President, the Secretary, the Treasurer, any Assistant Secretary, any
Assistant Treasurer, Managing Member and each other officer of such corporation
or limited liability company or the general partner of such partnership
specifically authorized in resolutions of the Board of Directors of such
corporation or managing member of such limited liability company to sign
agreements, instruments or other documents in connection with the Transaction
Documents on behalf of such corporation, limited liability company or
partnership, as the case may be.
“Available Funds” shall mean for any Payment Date, (A) all funds on deposit in
the Collection Account after making all transfers and deposits required from (i)
the Lockbox Account pursuant to the Lockbox Agreement, (ii) the Reserve Account
pursuant to Sections 3.2(b) and 6.6 of the Indenture, (iii) the Prefunding
Account pursuant to Sections 3.2(c) and 6.6 of the Indenture, (iv) the
Capitalized Interest Account pursuant to Sections 3.2(d) and 6.6 of the
Indenture, (v) the Originator or the Servicer, as the case may be, pursuant to
Section 4.5 of the Indenture, (vi) the Servicer pursuant to the Indenture and
(vii) the Guarantor pursuant to the Guaranty, plus (B) all investment earnings
on funds on deposit in the Collection Account from the immediately preceding
Payment Date through and including the day immediately preceding such Payment
Date, less (C) amounts on deposit in the Collection Account related to
collections related to any Due Periods subsequent to the Due Period related to
such Payment Date, less (D) any Additional Servicing Compensation or misdirected
payments on deposit in the Collection Account.
“Backup Servicer” shall mean Wells Fargo Bank, National Association, a national
association, and its permitted successors and assigns.
“Backup Servicing Agreement” shall mean the backup servicing agreement, dated as
of December 1, 2010, by and among the Issuer, the Servicer, the Backup Servicer
and the Indenture Trustee, as the same may be amended, supplemented or otherwise
modified from time to time.
“Backup Servicing Fee” shall on each Payment Date be equal to the greater of (i)
$1,500 or (ii) the product of one-twelfth of 0.075% and the Aggregate Loan
Balance as of the first day of the related Due Period.
“Bankruptcy Code” shall mean the federal Bankruptcy Code, as amended (Title 11
of the United States Code).
“Benefit Plan” shall mean (A) an “employee benefit plan” as defined in Section
3(3) of ERISA that is subject to Title I of ERISA, (B) a “plan” as defined in
Section 4975(e)(1) of the Code that is subject to Section 4975 of the Code, (C)
an entity whose underlying assets are deemed to include “plan assets” of any of
the foregoing under United States Department of Labor Regulation 29 C.F.R.
§2510.3-101 (as modified by Section 3(42) of ERISA) by reason of a direct or
indirect investment by an employee benefit plan or plan in such entity or (D)
any plan that is subject to any Similar Law.
“Business Day” shall mean any day other than (i) a Saturday, a Sunday, or (ii) a
day on which banking institutions in New York City, the State of Texas, the city
in which the Servicer is located or the city in which the Corporate Trust Office
of the Indenture Trustee is located are authorized or obligated by law or
executive order to be closed.
“Capitalized Interest Account” shall mean the account established and maintained
by the Indenture Trustee pursuant to Section 3.2(d) of the Indenture.
“Capitalized Interest Amount” shall mean, as of any date of determination, the
amount on deposit in the Capitalized Interest Account on such date, and as of
the Closing Date, $435,000.
“Carrying Charges” shall mean, with respect to a Payment Date, an amount equal
to (i) the product of (a) the weighted average of the Note Rates for each Class
of Notes for the related Interest Accrual Period, (b) the undisbursed funds
(excluding investment earnings) in the Prefunding Account as of the last day of
the related Due Period and (c) the number of days for which the Notes are to
receive Interest Distribution Amounts on such Payment Date, divided by 360,
minus (ii) the amount of any investment earnings on funds in the Prefunding
Account which were transferred to the Collection Account, as well as interest
earnings on amounts in the Capitalized Interest Account with respect to such
Payment Date.
“Class” shall mean, as the context may require, any of the Class A Notes or
Class B Notes.
“Class A Notes” shall have the meaning specified in the Recitals of the Issuer
in the Indenture.
“Class A Principal Distribution Amount” shall mean, with respect to any Payment
Date, the Principal Distribution Amount payable to the Holders of the Class A
Notes on such Payment Date.
“Class B Notes” shall have the meaning specified in the Recitals of the Issuer
in the Indenture.
“Class B Principal Distribution Amount” shall mean, with respect to any Payment
Date, the Principal Distribution Amount payable to the Holders of the Class B
Notes on such Payment Date.
“Closing Date” shall mean December 27, 2010.
“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time and any successor statute, together with the rules and regulations
thereunder.
“Collection Account” shall mean the account established and maintained by the
Indenture Trustee pursuant to Section 3.2(a) of the Indenture.
“Collection Policy” shall mean the collection policies of the initial servicer
in effect on the Closing Date, as may be amended from time to time in accordance
with the Servicing Standard.
“Completed Unit” shall mean a Unit at a Resort which has been fully constructed
and furnished, has received a valid permanent certificate of occupancy (if
required under applicable laws, rules or regulations), is ready for occupancy
and is subject to a time share declaration.
“Confidential Information” means information obtained by any Noteholder
including, without limitation, the Preliminary Private Placement Memorandum
dated December 13, 2010 or the Private Placement Memorandum dated December 22,
2010 (as supplemented by the Supplement dated December 23, 2010) related to the
Notes and the Transaction Documents, that is proprietary in nature and that was
clearly marked or labeled as being confidential information of the Issuer, the
Servicer or their Affiliates, provided that such term does not include
information that (a) was publicly known or otherwise known to the Noteholder
prior to the time of such disclosure, (b) subsequently becomes, publicly known
through no act or omission by such Noteholder or any Person acting on its
behalf, (c) otherwise becomes known to the Noteholder other than through
disclosure by the Issuer, the Servicer or their Affiliates, (d) any other public
disclosure authorized by the Issuer or the Servicer, the U.S. Federal income tax
treatment of the offering of the notes and any fact that may be relevant to
understanding the tax treatment (the “Tax Structure”) and all materials of any
kind (including opinions or other tax analyses) that are provided to the Issuer,
the Placement Agent and each prospective investor relating to such tax treatment
and Tax Structure.
“Continued Errors” shall have the meaning specified in Section 5.4(b) of the
Indenture.
“Contribute” shall have the meaning specified in Section 2(a) of the Transfer
Agreement.
“Contribution” shall have the meaning specified in Section 2(a) of the Transfer
Agreement.
“Controlling Person” shall mean a person (other than a Benefit Plan Investor)
that has discretionary authority or control with respect to the assets of such
entity, or who provides investment advice for a fee (direct or indirect) with
respect to such assets, or any affiliate of such a person.
“Corporate Trust Office” shall mean the office of the Indenture Trustee located
in the State of Minnesota, which office is at the address set forth in Section
13.3 of the Indenture.
“Credit Policy” shall mean the credit and underwriting policies of the
Originator in effect on the Closing Date.
“Custodial Agreement” shall mean the custodial agreement, dated as of December
1, 2010 by and among the Issuer, the Servicer, the Backup Servicer, the
Indenture Trustee and Custodian, as the same may be amended, supplemented or
otherwise modified from time to time providing for the custody and maintenance
of the Timeshare Loan Files relating to the Timeshare Loans.
“Custodian” shall mean Wells Fargo Bank, National Association, a national
banking association, or its permitted successors and assigns.
“Custodian Fee” shall mean for each Payment Date, the fee payable by the
Servicer to the Custodian in accordance with the Custodial Agreement.
“Cut-Off Date” shall mean, with respect to (i) the Initial Timeshare Loans, the
Initial Cut-Off Date, and (ii) any Qualified Substitute Timeshare Loan or
Subsequent Timeshare Loan, the related Subsequent Cut-Off Date.
“Cut-Off Date Aggregate Loan Balance” shall mean (a) the aggregate of the Loan
Balances, as of the Initial Cut-Off Date, of all Timeshare Loans pledged
pursuant to the Indenture on the Closing Date and (b) the aggregate of the Loan
Balances as of the related Cut-Off Dates, of all Subsequent Timeshare Loans.
“Cut-Off Date Loan Balance” shall mean the Loan Balance of a Timeshare Loan on
the related Cut-Off Date.
“Default” shall mean an event which, but for the passage of time, would
constitute an Event of Default under the Indenture.
“Defaulted Timeshare Loan” is any Timeshare Loan for which any of the earliest
following events may have occurred: (i) the Servicer has commenced cancellation
or forfeiture proceedings on the related Timeshare Loan after collection efforts
have failed in accordance with its credit and collection policies, (ii) as of
the last day of any Due Period, all or part of a scheduled payment under the
Timeshare Loan is more than 120 days delinquent from the due date, or (iii) the
Servicer obtains actual knowledge that a bankruptcy event has occurred with
respect to the related Obligor.
“Defective Timeshare Loan” shall have the meaning specified in Section 4.5 of
the Indenture.
“Definitive Note” shall have the meaning specified in Section 2.3 of the
Indenture.
“Determination Date” shall mean, with respect to a Payment Date, the day that is
five Business Days prior to such Payment Date.
“Direction Letter” shall have the meaning set forth in the Escrow Agreement.
“Due Period” shall mean with respect to any Payment Date, the immediately
preceding calendar month.
“Eligible Bank Account” shall mean a segregated account, which may be an account
maintained with the Indenture Trustee, which is either (a) maintained with a
depositary institution or trust company whose long-term unsecured debt
obligations are rated at least “A” by Fitch and “A2” by Moody's and whose
short-term unsecured obligations are rated at least “A-1” by Fitch and “P-1” by
Moody's; or (b) a trust account or similar account maintained at the corporate
trust department of the Indenture Trustee.
“Eligible Investments” shall mean one or more of the following:
(a)obligations of, or guaranteed as to timely payment of principal and interest
by, the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(b)federal funds, certificates of deposit, time deposits and bankers'
acceptances, each of which shall not have an original maturity of more than 90
days, of any depository institution or trust company incorporated under the laws
of the United States or any state; provided that the long-term unsecured debt
obligations of such depository institution or trust company at the date of
acquisition thereof have been rated no lower than “A2” by Moody's; and provided,
further, that the short-term obligations of such depository institution or trust
company shall be rated “A-1+” by S&P;
(c)commercial paper or commercial paper funds (having original maturities of not
more than 90 days) of any corporation incorporated under the laws of the United
States or any state thereof; provided that any such commercial paper or
commercial paper funds shall be rated in the highest short-term rating category
by each Rating Agency;
(d)any no-load money market fund rated (including money market funds managed or
advised by the Indenture Trustee or an Affiliate thereof) “AAAm/AAAm-G” or
higher by S&P; provided that, Eligible Investment obligations purchased from
funds in the Eligible Bank Accounts shall include only such or securities that
either may be redeemed daily or mature no later than the Business Day next
preceding the next Payment Date;
(e)demand and time deposits in, certificates of deposit of, bankers' acceptances
issued by, or federal funds sold by any depository institution or trust company
(including the Indenture Trustee or any Affiliate of the Indenture Trustee,
acting in its commercial capacity) incorporated under the laws of the United
States of America or any State thereof and subject to supervision and
examination by federal and/or state authorities, so long as, at the time of such
investment, the commercial paper or other short-term deposits of such depository
institution or trust company are rated at least P-1 by Moody's and at least A-1
by S&P;
and provided, further, that (i) no instrument shall be an Eligible Investment if
such instrument evidences a right to receive only interest payments with respect
to the obligations underlying such instrument, and (ii) no Eligible Investment
may be purchased at a price in excess of par. Eligible Investments may include
those Eligible Investments with respect to which the Indenture Trustee or an
Affiliate thereof provides services.
“Eligible Timeshare Loan” shall mean a Timeshare Loan which meets all of the
criteria set forth in Schedule I of the Transfer Agreement and Schedule I of the
Loan Sale Agreement.
“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, together with the regulations thereunder.
“Errors” shall have the meaning specified in Section 5.4(b) of the Indenture.
“Escrow Agent” shall mean Stewart Vacation Ownership Title Agency, Inc., a
Florida corporation.
“Escrow Agreement” shall mean the escrow and closing agreement, dated as of
December 1, 2010, by and among the Servicer, the Issuer, the Indenture Trustee,
the Custodian, and the Escrow Agent, as the same may be amended or supplemented
from time to time.
“Event of Default” shall have the meaning specified in Section 6.1 of the
Indenture.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Finance Agreement” shall mean a purchase and finance agreement between an
Obligor and the Originator pursuant to which such Obligor finances the purchase
of Oak N' Spruce Certificates.
“First Rapid Amortization Distribution Amount” means for any Payment Date and a
Class of Notes, until the Outstanding Note Balance of such Class of Notes has
been reduced to zero, an amount equal to the product of (1) such Class' Rapid
Amortization Percentage Interest and (2) the First Rapid Amortization Aggregate
Distribution Amount for such Payment Date.
 
“First Rapid Amortization Aggregate Distribution Amount” means for any Payment
Date, an amount equal to the lesser of (a) all remaining Available Funds after
payments of items set forth in Section 3.4(a)(i) through (x) of the Indenture,
and (b) the Principal Advance Reduction Amount.
 
“Fitch” shall mean Fitch Ratings, a subsidiary of Fitch, Inc.
 
“Foreclosure Property” shall have the meaning specified in Section 5.3(b) of the
Indenture.
“Funded Rate” for a Determination Date shall equal the Aggregate Outstanding
Note Balance on the immediately prior Payment Date (after giving effect to all
distributions on such Payment Date) divided by the sum of the Aggregate Loan
Balance and the Prefunding Loan Balance, each calculated at the end of the Due
Period related to such prior Payment Date.
“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
“Grant” shall mean to grant, bargain, convey, assign, transfer, mortgage,
pledge, create and grant a security interest in and right of set-off against,
deposit, set over and confirm.
“Guarantor” shall mean Silverleaf Resorts Inc. and its permitted successors and
assigns.
“Guaranty” shall mean that certain Guaranty, dated the Closing Date, made by the
Guarantor in favor of the Issuer and the Indenture Trustee.
“Guaranty Default Distribution Amount” means on any Payment Date where a
Guaranty Default Event exists, an amount equal to all remaining Available Funds
after payments of items set forth in Section 3.4(a)(i) through (vii) of the
Indenture.
 
“Guaranty Default Event” shall exist if an Event of Default of the type
described in clause (l) of the definition thereof has occurred (without regard
to the 3 Business Day grace period provided therein for the first instance of a
default of the payment of Aggregate Defaulted Timeshare Loan Make-Whole Amount);
provided, that if the Guarantor cures such first payment default within such 3
Business Day grace period and no other event has occurred of the type described
in clause (l) of the definition of Event of Default, a Guaranty Default Event
shall cease to exist for the immediately following Payment Date. Other than the
one time cure of the payment default described in the proviso to the immediately
preceding sentence, once a Guaranty Default Event exists, it shall continue to
exist until the Outstanding Note Balance of each Class of Notes has been reduced
to zero.
 
“Highest Lawful Rate” shall have the meaning specified in Section 3 of the
Transfer Agreement and Section 3 of the Loan Sale Agreement, as applicable.
 
“Holder” or “Noteholder” shall mean a holder of a Class A Note or a Class B
Note.
“Indebtedness” means, with respect to any Person at any time, (a) indebtedness
or liability of such Person for borrowed money whether or not evidenced by
bonds, debentures, notes or other instruments, or for the deferred purchase
price of property or services (including trade obligations); (b) obligations of
such Person as lessee under leases which should be, in accordance with generally
accepted accounting principles, recorded as capital leases; (c) current
liabilities of such Person in respect of unfunded vested benefits under plans
covered by Title IV of ERISA; (d) obligations issued for or liabilities incurred
on the account of such Person; (e) obligations or liabilities of such Person
arising under acceptance facilities; (f) obligations of such Person under any
guarantees, endorsements (other than for collection or deposit in the ordinary
course of business) and other contingent obligations to purchase, to provide
funds for payment, to supply funds to invest in any Person or otherwise to
assure a creditor against loss; (g) obligations of such Person secured by any
lien on property or assets of such Person, whether or not the obligations have
been assumed by such Person; or (h) obligations of such Person under any
interest rate or currency exchange agreement.
“Indemnified Amounts” shall have the meaning specified in Section 8 of the
Transfer Agreement and Section 8 of the Loan Sale Agreement, as applicable.
“Indemnified Parties” shall have the meaning specified in Section 8 of the
Transfer Agreement and Section 8 of the Loan Sale Agreement, as applicable.
“Indenture” shall mean the indenture, dated as of December 1, 2010, by and among
the Issuer, the Servicer, the Backup Servicer and the Indenture Trustee.
“Indenture Trustee” shall mean Wells Fargo Bank, National Association, a
national banking association, not in its individual capacity but solely as
Indenture Trustee under the Indenture, and any successor as set forth in Section
7.9 of the Indenture.
“Indenture Trustee Fee” shall mean for each Payment Date, the product of
one-twelfth and $9,000.
“Initial Cut-Off Date” shall mean November 30, 2010.
“Initial Note Balance” shall mean with respect to the Class A Notes and the
Class B Notes, $45,190,000 and $3,228,000, respectively.
“Initial Payment Date” shall mean the Payment Date occurring in January, 2011.
“Intended Tax Characterization” shall have the meaning specified in Section
4.2(b) of the Indenture.
“Initial Timeshare Loans” shall mean the initial pool of Timeshare Loans
acquired by the Issuer on the Closing Date.
“Interest Accrual Period” shall mean for each Class of Notes with respect to any
Payment Date, the immediately preceding calendar month (except that the initial
Interest Accrual Period shall be the period from and including the Closing Date
to and including December 31, 2010).
“Interest Distribution Amount” shall equal, for a Class of Notes and on any
Payment Date, the sum of (i) interest accrued during the related Interest
Accrual Period at the related Note Rate on the Outstanding Note Balance of such
Class of Notes immediately prior to such Payment Date and (ii) the amount of
unpaid Interest Distribution Amounts from prior Payment Dates for such Class of
Notes, plus, to the extent permitted by applicable law, interest on such unpaid
amount at the related Note Rate. The Interest Distribution Amount shall be
calculated on the basis of a 360-day year consisting of twelve 30-day months.
“Investment Company Act” shall mean the Investment Company Act of 1940, as
amended.
“Issuer” shall mean Silverleaf Finance IX, LLC, a limited liability company
formed under the laws of the State of Delaware.
“Issuer Order” shall mean a written order or request delivered to the Indenture
Trustee and signed in the name of the Issuer by an Authorized Officer of the
Issuer.
“Knowledge” shall mean (a) as to any natural Person, the actual awareness of the
fact, event or circumstance at issue or receipt of notification by proper
delivery of such fact, event or circumstance and (b) as to any Person that is
not a natural Person, the actual awareness of the fact, event or circumstance at
issue by a Responsible Officer of such Person or receipt, by a Responsible
Officer of such Person, of notification by proper delivery of such fact, event
or circumstance.
“Lien” shall mean any mortgage, pledge, hypothecation, assignment for security,
security interest, claim, participation, encumbrance, levy, lien or charge.
“Limited Liability Company Agreement” shall mean the limited liability company
agreement of the Issuer, dated as of December 1, 2010.
“Liquidation” means with respect to any Timeshare Loan, the sale or compulsory
disposition of the related Timeshare Property, following foreclosure, forfeiture
or other enforcement action or the taking of a deed-in-lieu of foreclosure, to a
Person other than the Servicer or an Affiliate thereof, except in accordance
with Section 5.3(b)(iv) of the Indenture.
“Liquidation Expenses” shall mean, with respect to a Defaulted Timeshare Loan,
as of any date of determination, any out-of-pocket expenses (exclusive of
overhead expenses) incurred by the Servicer in connection with the performance
of its obligations under Section 5.3(b) in the Indenture, including, but not
limited to, (i) any foreclosure or forfeiture and other repossession expenses
incurred with respect to such Timeshare Loan, (ii) actual commissions and
marketing and sales expenses incurred by the Servicer with respect to the
liquidation of the related Timeshare Property and (iii) any other fees and
expenses reasonably applied or allocated in the ordinary course of business with
respect to the Liquidation of such Defaulted Timeshare Loan (including any
assessed and unpaid Association fees and real estate taxes).
“Liquidation Proceeds” means with respect to the Liquidation of any Timeshare
Loan, the amounts actually received by the Servicer in connection with such
Liquidation.
“Loan Balance” shall mean, for any date of determination, the outstanding
principal balance due under or in respect of a Timeshare Loan (including a
Defaulted Timeshare Loan).
“Loan Sale Agreement” shall mean the loan sale agreement, dated as of
December 1, 2010, by and among Silverleaf Finance IV, LLC, the Servicer and the
Issuer pursuant to which certain of the Timeshare Loans are transferred to the
Issuer.
“Lockbox Account” shall mean the account maintained on behalf of the Indenture
Trustee by the Lockbox Bank pursuant to the Lockbox Agreement, which shall be a
non-interest bearing account.
“Lockbox Agreement” shall mean the Blocked Account Control Agreement, dated as
of December 1, 2010, by and among the Lockbox Processor, the Issuer, the
Servicer and the Indenture Trustee, as such agreement may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof, unless the Indenture Trustee shall cease to be a party
thereunder, or such agreement shall be terminated in accordance with its terms,
in which event “Lockbox Agreement” shall mean such other agreement, in form and
substance acceptable to the Indenture Trustee, among the Servicer, the Issuer,
the Lockbox Processor and any other appropriate parties.
“Lockbox Bank” means as of any date a depository institution named by the
Servicer and acceptable to the Indenture Trustee at which each Lockbox Account
is established and maintained as of such date.
“Lockbox Fee” shall mean on each Payment Date, the fee payable by the Servicer
to the Lockbox Bank in accordance with the Lockbox Agreement.
“Lockbox Processor” shall mean JPMorgan Chase Bank, N.A., a national banking
association, and its successors and assigns.
“Management Agreement” shall mean that certain Management Agreement between the
Managing Entity and each Association, dated as of March 28, 1990, as amended
from time to time.
“Managing Entity” shall mean Silverleaf Club, a Texas not-for-profit
corporation, in its capacity as manager for all Associations.
“Misdirected Deposits” shall mean such payments that have been deposited to the
Collection Account in error.
“Monthly Servicer Report” shall have the meaning specified in Section 5.5 of the
Indenture.
“Moody's” shall mean Moody's Investors Service, Inc.
“Mortgage” shall mean, with respect to a Mortgage Loan, any purchase money
mortgage, deed of trust, purchase money deed of trust or mortgage deed creating
a first lien on a Timeshare Property to secure debt granted by an Obligor to the
Originator with respect to the purchase of such Timeshare Property and otherwise
encumbering the related Timeshare Property to secure payments or other
obligations under such Timeshare Loan.
“Mortgage Loan” shall mean a Timeshare Loan originated by the Originator and
evidenced by a Mortgage Note and secured by a first Mortgage on a fractional fee
simple timeshare interest in a Unit.
“Mortgage Note” shall mean, with respect to a Mortgage Loan, the original,
executed promissory note evidencing the indebtedness of an Obligor under a
Mortgage Loan, together with any rider, addendum or amendment thereto, or any
renewal, substitution or replacement of such note.
“Net Liquidation Proceeds” shall mean with respect to a Liquidation, the
positive difference between Liquidation Proceeds and Liquidation Expenses.
“Note Rate” shall mean with respect to the Class A Notes and, the Class B Notes,
(i) for Payment Dates prior to and including the Optional Redemption Date,
12.00% and 12.00%, respectively and (ii) for Payment Dates after the Optional
Redemption Date, 15.00% and 15.00%, respectively; provided that if an Event of
Default or a Guaranty Default Event has occurred and is continuing, the Note
Rate shall be the per annum rate described in (i) or (ii) above, as applicable,
plus 5.00%.
“Note Register” shall have the meaning specified in Section 2.4(a) of the
Indenture.
“Note Registrar” shall have the meaning specified in Section 2.4(a) of the
Indenture.
“Noteholder” shall mean any holder of a Note of any Class.
“Notes” shall mean, collectively, the Class A Notes and the Class B Notes.
“Oak N' Spruce Loan” shall mean a Timeshare Loan relating to the Oak N' Spruce
Resort and evidenced by a Finance Agreement.
“Oak N' Spruce Certificate” shall mean a certificate of beneficial interest in
Oak N' Spruce Resort Trust which entitles the owner thereof the right to use and
occupy a specifically designated Unit at a fixed period of time each year at the
Oak N' Spruce Resort in perpetuity.
“Oak N' Spruce Financing Statement” means, with respect to an Oak N' Spruce
Loan, a UCC financing statement (UCC-1) in recordable form which (i) names as
“debtor” the Obligor on the underlying Oak N' Spruce Loan, (ii) names Silverleaf
as “secured party/assignor,” (iii) names as “secured party/assignee” the
Indenture Trustee for the benefit of the Noteholders and (iv) is sufficient
under applicable laws to give record notice of the pledge of such Oak N' Spruce
Loan and its proceeds to the Indenture Trustee and its assigns.
“Oak N' Spruce Financing Statement Amendment” means, with respect to an Oak N'
Spruce Loan, a UCC financing statement amendment (UCC-3) in recordable form
which (i) amends the initial UCC financing statement filed with respect to such
Oak N' Spruce Loan to evidence the assignment of the loan to the Indenture
Trustee for the benefit of the Noteholders as “secured party/assignee,” (ii)
names the Prior Secured Party as “assignor,” (iii) names the Obligor on the
underlying Oak N' Spruce Loan as “debtor,” and (iv) is sufficient under
applicable laws to give record notice of a transfer of such Oak N' Spruce Loan
and its proceeds to the Indenture Trustee and its assigns.
“Oak N' Spruce Resort” shall mean the timeshare resort and related facilities
located in South Lee, Massachusetts and operated by the Originator.
“Oak N' Spruce Resort Trust” shall mean the trust established under the Oak N'
Spruce Trust Agreement.
“Oak N' Spruce Trust Agreement” shall mean, collectively, that certain Sixth
Amended and Restated Declaration of Trust of Oak N' Spruce Resort Trust, dated
as of September 20, 2004, as amended, restated or otherwise modified from time
to time, together with all other agreements, documents and instruments governing
the operation of the Oak N' Spruce Resort Trust, including without limitation,
the Time Share Supplement to the Sixth Amended and Restated Declaration of Trust
of Oak N' Spruce Resort Trust, dated September 20, 2004 and the Recreation and
Use Easement, dated September 20, 2000, as any such documents may be amended,
restated or otherwise modified from time to time.
“Oak N' Spruce Trustee” shall mean Silverleaf Berkshires, Inc., a Texas
corporation, in its capacity as trustee under the Oak N' Spruce Trust Agreement,
and its permitted successors and assigns.
“Obligor” shall mean the related obligor under a Timeshare Loan.
“OC Floor Amount” shall mean $6,455,855.62.
 
“Officer's Certificate” shall mean a certificate executed by a Responsible
Officer of the related party.
“Opinion of Counsel” shall mean a written opinion of counsel, in each case
acceptable to the addressees thereof.
“Optional Redemption Date” shall mean the first Payment Date in which the
Aggregate Outstanding Note Balance is less than or equal to 20% of the Aggregate
Initial Note Balance.
“Originator” shall mean Silverleaf Resorts, Inc., in its capacity as the
originator of the Timeshare Loans.
“Orlando Breeze Management Agreement” shall mean that certain Management
Agreement between the Originator and the Association of the Orlando Breeze
Resort, dated as of January 13, 2005, as amended from time to time.
“Outstanding” shall mean, with respect to the Notes, as of any date of
determination, all Notes theretofore authenticated and delivered under the
Indenture except:
(a)Notes theretofore canceled by the Indenture Trustee or delivered to the
Indenture Trustee for cancellation;
(b)Notes or portions thereof for whose payment money in the necessary amount has
been theretofore irrevocably deposited with the Indenture Trustee in trust for
the holders of such Notes; and
(c)Notes in exchange for or in lieu of other Notes, which other Notes have been
authenticated and delivered pursuant to the Indenture unless proof satisfactory
to the Indenture Trustee is presented that any such Notes are held by a Person
in whose hands the Note is a valid obligation; provided; however, that in
determining whether the holders of the requisite percentage of the Outstanding
Note Balance of the Notes have given any request, demand, authorization,
direction, notice, consent, or waiver hereunder, Notes owned by the Issuer or
any Affiliate of the Issuer shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent, or waiver, only Notes that a Responsible Officer of the
Indenture Trustee actually has notice are so owned shall be so disregarded.
“Outstanding Note Balance” shall mean as of any date of determination and Class
of Notes, the Initial Note Balance of such Class of Notes less payment of
principal actually distributed to the Holders of such Class of Notes as of such
date; provided, however, to the extent that for purposes of consents, approvals,
voting or other similar act of the Noteholders under any of the Transaction
Documents, “Outstanding Note Balance” shall exclude Notes which are held by
Silverleaf or any Affiliate thereof.
“Paydown Letter” shall have the meaning set forth in the Escrow Agreement.
“Paying Agent” shall mean any Person authorized under the Indenture to make the
distributions required under Section 3.4 of the Indenture, which such Person
initially shall be Wells Fargo Bank, National Association.
“Payment Date” shall mean the 15th day of each month, or, if such date is not a
Business Day, then the next succeeding Business Day, commencing on the Initial
Payment Date.
“Payment Default Event” shall have occurred if (i) each Class of Notes shall
become due and payable pursuant to Section 6.2(a) of the Indenture or (ii) each
Class of Notes shall become due and payable pursuant to Section 6.2(b) of the
Indenture and the Aggregate Loan Balance of the Timeshare Loans is less than the
Aggregate Outstanding Note Balance.
“Percentage Interest” shall mean, with respect to any Class of Notes as of any
date of determination, the quotient, expressed as a percentage, the numerator of
which is the Outstanding Note Balance of such Class of Notes as of the
immediately preceding Payment Date and the denominator of which is the sum of
the Aggregate Loan Balance and the Prefunding Loan Balances, each calculated at
the beginning of the related Due Period.
“Permitted Liens” shall mean (a) with respect to Timeshare Loans included in the
Trust Estate, Liens for state, municipal or other local taxes if such taxes
shall not at the time be due and payable, (ii) Liens in favor of the Issuer
created pursuant to the Transaction Documents, and (iii) Liens in favor of the
Indenture Trustee created pursuant to the Indenture; (b) with respect to the
related Timeshare Property, materialmen's, warehousemen's, mechanic's and other
Liens arising by operation of law in the ordinary course of business for sums
not due, (ii) Liens for state, municipal or other local taxes if such taxes
shall not at the time be due and payable, (iii) Liens in favor of the Issuer
pursuant to the Transfer Agreement and the Loan Sale Agreement and (iv) the
Obligor's interest in the Timeshare Property under the Timeshare Loan whether
pursuant to the Oak N' Spruce Trust Agreement or otherwise; and (c) with respect
to Timeshare Loans and Related Security included in the Trust Estate, any and
all rights of the Beneficiaries and the Other Beneficiaries referred to in the
Oak N' Spruce Trust Agreement under the Oak N' Spruce Trust Agreement.
“Person” means an individual, general partnership, limited partnership, limited
liability partnership, corporation, business trust, joint stock company, limited
liability company, trust, unincorporated association, joint venture, Issuer,
Governmental Authority, or other entity of whatever nature.
“Placement Agent” shall mean BB&T Capital Markets, a division of Scott &
Stringfellow, LLC.
“Private Placement Agreement” shall mean that certain private placement agency
agreement dated December 22, 2010, among the Placement Agent, the Issuer and
Silverleaf.
“Private Placement Memorandum” shall mean that certain Confidential Private
Placement Memorandum, dated December 22, 2010 (as supplemented by the Supplement
dated December 23, 2010), related to the Notes and the Transaction Documents.
“Predecessor Servicer Work Product” shall have the meaning specified in Section
5.4(b) of the Indenture.
“Prefunding Account” shall mean the account established and maintained by the
Indenture Trustee pursuant to Section 3.2(c) of the Indenture.
“Prefunding Account Initial Deposit” shall mean an amount equal to $10,875,000.
“Prefunding Loan Balance” shall mean the amount on deposit in the Prefunding
Account divided by 0.75.
“Prefunding Period” shall mean the period commencing on the Closing Date and
ending on the Prefunding Termination Date.
“Prefunding Termination Date” shall mean the earlier to occur of (i) April 30,
2011, (ii) the date on which the amount on deposit in the Prefunding Account is
less than $10,000 and (iii) the date on which an Event of Default or a Servicer
Event of Default occurs.
“Prior Secured Party” shall have the meaning set forth in the Escrow and Closing
Agreement.
 
“Principal Advance Reduction Amount” shall mean for any Payment Date, the amount
by which the Aggregate Outstanding Note Balance (determined after giving effect
to the payments of Principal Distribution Amounts on such Payment Date) exceeds
the greater of (a) the product of (1) the Target OC Percentage and (2) the sum
of the Aggregate Loan Balance and the Prefunding Loan Balance, each as of the
last day of the related Due Period and (b) the OC Floor Amount.
 
“Principal Amount” means for any Due Period, the amount of principal collected
in respect of each Timeshare Loan during the related Due Period (including but
not limited to principal in respect of scheduled payments, partial prepayments,
prepayments in full, liquidations, Substitution Shortfall Amounts and Repurchase
Prices but excluding the Aggregate Defaulted Timeshare Loan Make-Whole Amount,
if any).
 
“Principal Distribution Amount” shall equal for any Payment Date and Class of
Notes, until the Outstanding Note Balance of such Class of Notes has been
reduced to zero, the sum of: (A) an amount equal to the product of (1) such
Class' Percentage Interest and (2) the Principal Amount for the related Due
Period; (B) on the first Payment Date after the Prefunding Termination Date, the
product of (1) such Class' Rapid Amortization Percentage Interest and (2) the
amount transferred from the Prefunding Account to the Collection Account, if
any; (C) the product of (1) such Class' Rapid Amortization Percentage Interest
and (2) the Aggregate Defaulted Timeshare Loan Make-Whole Amount; and (iv) any
unpaid Principal Distribution Amounts for such Class from prior Payment Dates.
 
“Qualified Substitute Timeshare Loan” shall mean a Timeshare Loan (i) that, when
aggregated with other Qualified Substitute Timeshare Loans being substituted on
such Transfer Date, has a Loan Balance, after application of all payments of
principal due and received during or prior to the month of substitution, not in
excess of the Loan Balance of the Timeshare Loan being substituted on the
related Transfer Date, (ii) that complies, as of the related Transfer Date, with
each of the representations and warranties contained in the Transfer Agreement
or the Loan Sale Agreement, as applicable, including that such Qualified
Substitute Timeshare Loan is an Eligible Timeshare Loan, (iii) that shall not
cause the weighted average coupon rate of the Timeshare Loans, after such
substitution, to be less than 16.75%, (iv) that shall not cause the weighted
average months of age on the Timeshare Loans to be less than 13 months after
such substitution, (v) that shall not cause the weighted average FICO score (to
the extent that the related Obligors have FICO scores) of the Timeshare Loans to
be less than 545, (vi) that shall not cause the percentage of Obligors without a
FICO score to exceed 15%, (vii) that shall not cause the weighted average
remaining term to maturity of the Timeshare Loans to be equal to or greater than
84 months and (viii) that does not have a stated maturity later than 12 months
prior to the Stated Maturity.
“Rapid Amortization Percentage Interest” of any Class of Notes, as of any date
of determination, will be the quotient, expressed as a percentage, the numerator
of which is such Class' Percentage Interest and the denominator of which is the
sum of the Percentage Interests for both the Class A Notes and the Class B
Notes.
 
“Rating Agency” means any of S&P, Moody's or Fitch.
 
“Receivables” means the payments required to be made pursuant to a Timeshare
Loan.
“Record Date” shall mean, with respect to any Payment Date (except for the
Initial Payment Date), the close of business on the last Business Day of the
calendar month immediately preceding the month such Payment Date occurs. With
respect to the Initial Payment Date, the Record Date will be the Closing Date.
“Redemption Date” shall mean with respect to the redemption of the Notes on or
after the Optional Redemption Date, the date fixed pursuant to Section 10.1 of
the Indenture.
“Redemption Price” shall mean, with respect to each Class of Notes, the sum of
the Outstanding Note Balance of such Class of Notes, together with interest
accrued thereon at the applicable Note Rate up to and including the Redemption
Date.
“Related Security” shall mean with respect to any Timeshare Loan, (i) all of the
Issuer's interest in the Timeshare Property arising under or in connection with
the related Mortgage, Financing Agreement, Oak N' Spruce Certificate and the
related Timeshare Loan Files, (ii) all other security interests or liens and
property subject thereto from time to time purporting to secure payment of such
Timeshare Loan, together with all mortgages, assignments and financing
statements signed by an Obligor describing any collateral securing such
Timeshare Loan, (iii) all guarantees, insurance and other agreements or
arrangements of whatever character from time to time supporting or securing
payment of such Timeshare Loan, and (iv) all other security and books, records
and computer tapes relating to the foregoing.
“Repurchase Price” shall mean with respect to any Timeshare Loan to be purchased
by the Originator pursuant to the Transfer Agreement or the Servicer pursuant to
the Loan Sale Agreement, an amount equal to the Loan Balance of such Timeshare
Loan as of the date of such purchase or repurchase, as the case may be, together
with all accrued and unpaid interest on such Timeshare Loan at the related
Timeshare Loan Rate to, but not including, the due date in the then current Due
Period.
“Request for Release” shall be a request for release of Timeshare Loan Files in
the form required by the Custodial Agreement.
“Required Payments” shall mean each of the items described in (i) through (vi)
of Section 3.4(a) of the Indenture.
“Residual Certificate” shall mean that certain membership certificate of the
Issuer evidencing the limited liability company interest in the Issuer, the form
of which is attached as Schedule F to the Limited Liability Company Agreement.
“Reservation System” shall mean the centralized reservation system for all
Resorts.
“Reserve Account” shall mean the account maintained by the Indenture Trustee
pursuant to Section 3.2(b) of the Indenture.
“Reserve Account Initial Deposit” shall mean an amount equal to 1.00% of the sum
of the aggregate Cut-Off Date Loan Balances of the Initial Timeshare Loans and
the Prefunding Loan Balance on the Closing Date.
“Reserve Account Required Balance” shall mean an amount equal to the lesser of
(A) 1.00% of the sum of (i) the aggregate Cut-Off Date Loan Balances of the
Initial Timeshare Loans, (ii) the aggregate Cut-Off Date Loan Balances of the
Subsequent Timeshare Loans and (iii) the Prefunding Loan Balance and (B) the
Aggregate Outstanding Note Balance immediately prior to such Payment Date.
“Resort” shall mean any of the following resorts: Holly Lake Resort, The
Villages and Lake O' The Wood Resorts, Piney Shores Resort, Timber Creek Resort,
Fox River Resort, Apple Mountain Resort, Ozark Mountain Resort, Holiday Hills
Resort, Oak N' Spruce Resort, Silverleaf's Seaside Resort, Hill Country Resort
and Orlando Breeze Resort.
“Responsible Officer” shall mean (a) when used with respect to the Indenture
Trustee, any officer assigned to the Corporate Trust Office, including any
Managing Director, Vice President, Assistant Vice President, Secretary,
Assistant Secretary, Assistant Treasurer, any trust officer or any other officer
such Person customarily performing functions similar to those performed by any
of the above designated officers, and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject; (b) when used with
respect to the Servicer, the Chief Financial Officer, a Vice President, an
Assistant Vice President, the Chief Accounting Officer or the Secretary of the
Servicer; and (c) with respect to any other Person, the chairman of the board,
chief financial officer, the president, a vice president, the treasurer, an
assistant treasurer, the secretary, an assistant secretary, the controller,
general partner, trustee or the manager of such Person.
“S&P” shall mean Standard & Poor's Ratings Services, a Standard & Poor's
Financial Services LLC Business.
“Schedule of Timeshare Loans” shall mean the list of Timeshare Loans delivered
pursuant to the Transfer Agreement and the Loan Sale Agreement, as amended from
time to time to reflect repurchases, substitutions and Qualified Substitute
Timeshare Loans and Subsequent Timeshare Loans conveyed pursuant to the terms of
the Indenture, the Transfer Agreement and the Loan Sale Agreement, which list
shall set forth the following information with respect to each Timeshare Loan as
of the related Cut-Off Date, as applicable, in numbered columns:
1
 
Name of Obligor
2
 
Unit Ref/Loan Number
3
 
Interest Rate Per Annum
4
 
Date of Timeshare Loan Origination
5
 
Maturity
6
 
Sales Price
7
 
Monthly Payment
8
 
Original Loan Balance
9
 
Original Term
10
 
Outstanding Loan Balance
11
 
Down Payment
12
 
First Payment Date
13
 
Zip Code
14
 
Unit/Week
15
 
Resort Name

 
“Second Rapid Amortization Distribution Amount” means for a Class of Notes and
in respect of any Payment Date where a Second Rapid Amortization Event exists,
until the Outstanding Note Balance of such Class of Notes has been reduced to
zero, an amount equal to the product of (1) such Class' Rapid Amortization
Percentage Interest and (2) all remaining Available Funds after payments of
items set forth in Section 3.4(i) through (xii) of the Indenture.
 
“Second Rapid Amortization Event” shall exist if (i) an Event of Default has
occurred and is continuing or (ii) the Optional Redemption Date occurred but the
Servicer has not redeemed the Notes.
 
“Securities Act” shall mean the Securities Act of 1933, as amended.
 
“Securitization Custodian” shall have the meaning specified the second “whereas”
clause in the Transfer Agreement and the second “whereas” clause in the Loan
Sale Agreement.
“Securitization Indenture” shall have the meaning specified the second “whereas”
clause in the Transfer Agreement and the second “whereas” clause in the Loan
Sale Agreement.
“Securitization Indenture Trustee” shall have the meaning specified the second
“whereas” clause in the Transfer Agreement and the second “whereas” clause in
the Loan Sale Agreement.
“Securitization Servicer” shall have the meaning specified the second “whereas”
clause in the Transfer Agreement.
“Sells” shall have the meaning set forth in Section 2(a) of the Transfer
Agreement and the Loan Sale Agreement, as applicable.
“Seller” shall mean Silverleaf Resorts, Inc. under the Transfer Agreement and
Silverleaf Finance IV, LLC under the Loan Sale Agreement, as applicable.
“Sequential Pay Event” shall mean either a Trust Estate Liquidation Event or a
Payment Default Event.
 
“Servicer” shall initially mean Silverleaf in its capacity as servicer under the
Indenture, the Backup Servicing Agreement and the Custodial Agreement, and its
permitted successors and assigns.
“Servicer Event of Default” shall have the meaning specified in Section 5.4 of
the Indenture.
“Servicer Termination Costs” shall mean any extraordinary out-of-pocket expenses
incurred by the successor servicer associated with the transfer of servicing.
“Servicing Fee” shall mean for any Payment Date, the product of (i) one-twelfth
of 2.00% and (ii) the Aggregate Loan Balance as of the first day of the related
Due Period.
“Servicing Officer” shall mean those officers of the Servicer involved in, or
responsible for, the administration and servicing of the Timeshare Loans, as
identified on the list of Servicing Officers furnished by the Servicer to the
Indenture Trustee and the Noteholders from time to time.
“Servicing Standard” shall mean, with respect to the Servicer a servicing
standard which complies with applicable law, the terms of the respective
Timeshare Loans and, to the extent consistent with the foregoing, in accordance
with the customary and usual procedures employed by it with respect to
comparable assets that the servicer services for itself or its Affiliates (and
if Silverleaf is no longer the Servicer, in accordance with the customary
standard of prudent servicers of loans secured by timeshare interests similar to
the Timeshare Properties, employed by it when servicing loans for third
parties), but without regard for (i) any relationship that it or any of its
Affiliates may have with the related Obligor, and (ii) its right to receive
compensation for its services under the Indenture or with respect to any
particular transaction.
“Silverleaf” shall mean Silverleaf Resorts, Inc., a Texas corporation.
“Silverleaf Loans” shall mean the Timeshare Loans conveyed by Silverleaf to the
Issuer pursuant to the Transfer Agreement.
“Silverleaf Serviced Timeshare Loan” means any timeshare loan (including any
Timeshare Loan conveyed to the Issuer pursuant to the Transfer Agreement or the
Loan Sale Agreement) serviced by Silverleaf or an Affiliate thereof for the
benefit of the Noteholders, for Silverleaf's own account, or for the accounts of
any and all third parties.
“Similar Law” shall mean a provision of federal, state or local law that is
substantially similar to the prohibited transaction rules under Section 406 of
ERISA or Section 4975 of the Code.
“Stated Maturity” shall mean the Payment Date occurring in July 2022.
“Subsequent Cut-Off Date” shall mean with respect to any Transfer Date, (i) the
close of business on the last day of the Due Period immediately preceding such
Transfer Date or (ii) such other date designated by the Servicer.
“Subsequent Timeshare Loan” shall mean a Timeshare Loan acquired during the
Prefunding Period (i) that complies, as of the related Transfer Date, with each
of the representations and warranties contained in the Transfer Agreement,
including that such Subsequent Timeshare Loan is an Eligible Timeshare Loan,
(ii) that such Subsequent Timeshare Loan will not cause the weighted average
coupon rate of the Timeshare Loans to be less than 17.00% after the purchase
thereof by the Issuer and the subsequent pledge thereof pursuant to the
Indenture, (iii) that will not cause the weighted average months of seasoning on
the Timeshare Loans to be less than 13 months after the purchase thereof by the
Issuer and the subsequent pledge thereof pursuant to the Indenture, (iv) that
the weighted average FICO scores (to the extent the related Obligors have FICO
scores) of such Subsequent Timeshare Loans will not be less than 545, (v) that
such Subsequent Timeshare Loan will not cause the percentage of Obligors without
a FICO score to exceed 10%, (vi) the Loan Balance of such Subsequent Timeshare
Loan is less than $15,000, (vii) that such Subsequent Timeshare Loan will not
cause the percentage (by aggregate Cut-Off Date Loan Balance) of all Subsequent
Timeshare Loans transferred on such Transfer Date that have Obligors making
payments by either credit card automated charge or pre-authorized
checking/savings to be less than 59.01% (by aggregate Cut-Off Date Loan Balance)
of all Subsequent Timeshare Loans transferred on such Transfer Date, and (viii)
that such Subsequent Timeshare Loan does not have a stated maturity date greater
than 10 years from its origination.
“Substitution Shortfall Amount” shall mean with respect to any Transfer Date, an
amount equal to the excess of the aggregate Loan Balances of the Defective
Timeshare Loans over the aggregate Loan Balances of the Qualified Substitute
Timeshare Loans to be substituted for such Defective Timeshare Loans.
“Target OC Percentage” shall mean 50%.
“Timeshare Declaration” shall mean the declaration or other document recorded in
the real estate records of the applicable municipality or government office
where a Resort is located for the purpose of creating and governing the rights
of owners of Timeshare Properties related thereto, as it may be in effect from
time to time.
“Timeshare Loan” shall mean a Mortgage Loan, Oak N' Spruce Loan, a Qualified
Substitute Timeshare Loan or a Subsequent Timeshare Loan subject to the lien of
the Indenture. As used in the Transaction Documents, the term “Timeshare Loan”
shall include the related Mortgage Note, Mortgage, the Finance Agreement and
other Related Security contained in the related Timeshare Loan Documents.
“Timeshare Loan Acquisition Price” shall mean with respect to any Timeshare
Loan, an amount equal to the Loan Balance of such Timeshare Loan plus accrued
and unpaid interest thereon up to and including the related Cut-Off Date.
“Timeshare Loan Documents” shall mean with respect to each Timeshare Loan and
each Obligor, the related (i) Timeshare Loan Files, and (ii) Timeshare Loan
Servicing Files.
“Timeshare Loan File(s)” shall mean, with respect to a Timeshare Loan, the
Timeshare Loan and all documents related to such Timeshare Loan, including:
1.    
a Contract for Sale (copy), which includes Truth in Lending Disclosure,

2.    
a Note (original),

3.    
an Allonge (copy) (or more than one Allonge that when taken together) shall show
the transfer of title as set forth in the Custodial Agreement,

4.    
for a post-July 2004 Oak N' Spruce Loan - Oak N' Spruce Resort Certificate of
Beneficial Interest (original),

5.    
one of the following: (a) for a Mortgage Loan - a Deed of Trust, Deed to Secure
Debt or Mortgage with Property Description Addendum (original or file-stamped or
certified copy), (b) for an Oak N' Spruce Loan (pre-July 2004) - a Mortgage and
Assignment of Beneficial Interest with Property Description Addendum (original
or file-stamped or certified copy) or (c) for an Oak N' Spruce Loan (post-July
2004) - an Assignment of Beneficial Interest with Property Description Addendum
(not recorded or acknowledged),

6.    
any assumption agreement, refinancing agreement, or general warranty deed
evidencing a transfer of title, if any, (copy),

7.    
(a)    in the case of Timeshare Loans purchased by the Issuer from Silverleaf
Resorts, Inc., an original mortgagee title insurance policy or master policy
referencing such Timeshare Loan naming as the insured thereunder (a) Silverleaf
Resorts, Inc., (b) a Prior Secured Party or (c) Silverleaf Finance IX, LLC, as
applicable, and in each case their respective successors and assigns and
covering Silverleaf Finance IX, LLC, and its successors and assigns (which shall
be delivered by (i) the Escrow Agent to the Custodian within 90 days of the
Closing Date and (ii) by Silverleaf to the Custodian within 90 days of the
related Transfer Date),

(a)in the case of Timeshare Loans purchased by Issuer from Silverleaf Finance
IV, LLC, an original mortgagee title insurance policy or master policy
referencing such Timeshare Loan naming as the insured thereunder (a) Silverleaf
Finance IV, LLC , (b) Silverleaf Finance IX, LLC or (c) the Prior Secured Party,
as applicable, and in each case their respective successors and assigns and
covering Silverleaf Finance IX, LLC, and its successors and assigns (which shall
be delivered by (i) the Escrow Agent to the Custodian within 90 days of the
Closing Date and (ii) by Silverleaf to the Custodian within 90 days of the
related Transfer Date),
8.    
an original of each guarantee, assumption, modification, substitution agreement,
deferment letter, or other document, if any, which relates to the related
Timeshare Loan (or copy thereof certified by an officer of the related
originator to be a true and correct copy), and which shall cover both the Note
and/or the Contract for Sale, and

9.    
all related finance applications executed and delivered by the related Obligor
with respect to the purchase of a Timeshare Property.

 
“Timeshare Loan Rate” shall mean with respect to any Timeshare Loan, the
specified coupon rate thereon.
“Timeshare Loan Servicing Files” shall mean with respect to each Timeshare Loan
and each Obligor, the portion of the Timeshare Loan Files necessary for the
Servicer to service such Timeshare Loan including but not limited to (i) the
original truth-in-lending disclosure statement executed by such Obligor, as
applicable, (ii) all writings pursuant to which such Timeshare Loan arises or
which evidences such Timeshare Loan and not delivered to the Custodian, (iii)
all papers and computerized records customarily maintained by the Servicer in
servicing timeshare loans comparable to the Timeshare Loans in accordance with
the Servicing Standard and (iv) each Timeshare Program Consumer Document and
Timeshare Program Governing Document, if applicable, related to the applicable
Timeshare Property.
“Timeshare Program” shall mean the program under which (1) an Obligor has
purchased a Timeshare Property and (2) an Obligor shares in the expenses
associated with the operation and management of such program.
“Timeshare Program Consumer Documents” shall mean, as applicable, the Finance
Agreement, Mortgage Note, Mortgage or certificate of beneficial interest, credit
disclosures, rescission right notices, final subdivision public
reports/prospectuses/public offering statements, the Timeshare Project exchange
affiliation agreement and other documents, disclosures and advertising materials
used or to be used by an Originator in connection with the sale of Timeshare
Properties.
“Timeshare Program Governing Documents” shall mean the articles of organization
or articles of incorporation of each Association, the rules and regulations of
each Association, the Timeshare Program management contract between each
Association and a management company, and any subsidy agreement by which the
Originator is obligated to subsidize shortfalls in the budget of a Timeshare
Program in lieu of paying assessments, as they may be from time to time in
effect and all amendments, modifications and restatements of any of the
foregoing.
“Timeshare Property” shall mean (i) with respect to a Mortgage Loan, a
fractional fee simple timeshare interest in a Unit in a Resort entitling the
related Obligor to the use and occupancy of a Unit at the Resort for a specified
period of time each year or every other year in perpetuity and (ii) with respect
to an Oak N' Spruce Loan, an Oak N' Spruce Certificate.
“Title Commitment” shall have the meaning set forth in the Escrow Agreement.
“Title Policy” shall have the meaning set forth in the Escrow Agreement.
“Transaction Documents” shall mean the Indenture, the Transfer Agreement, the
Loan Sale Agreement, the Lockbox Agreement, the Backup Servicing Agreement, the
Custodial Agreement, the Escrow Agreement, the Guaranty, the Private Placement
Agreement and all other agreements, documents or instruments delivered in
connection with the transactions contemplated thereby.
“Transfer Agreement” shall mean the transfer agreement, dated as of December 1,
2010, between the Originator and the Issuer pursuant to which certain of the
Timeshare Loans are transferred to the Issuer.
“Transfer Date” shall mean the date on which the Originator substitutes one or
more Timeshare Loans in accordance with Section 4.5 of the Indenture or pledges
one or more Subsequent Timeshare Loans in accordance with Section 4.2 of the
Indenture.
“Treasury Regulations” shall mean the regulations, included proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
“Trust Accounts” shall mean collectively, the Lockbox Account, the Collection
Account, the Prefunding Account, the Capitalized Interest Account and the
Reserve Account.
“Trust Estate” shall have the meaning specified in the Granting Clause of the
Indenture.
“Trust Estate Liquidation Event” shall have the meaning specified in Section 6.6
of the Indenture.
“UCC” means the Uniform Commercial Code as in effect in the relevant
jurisdiction, as amended from time to time.
“Unit(s)”: One individual air-space residential unit, cabin, villa, cottage or
townhome within a Resort, together with all furniture, fixtures and furnishings
therein, and together with any and all interests in common elements appurtenant
thereto, as provided in the related Timeshare Program Governing Documents.