EX 10.9
GUARANTY
 
This GUARANTY (this “Guaranty”), dated December 27, 2010, made by SILVERLEAF
RESORTS, INC., a Texas corporation (the “Guarantor”), in favor of SILVERLEAF
FINANCE IX, LLC, a Delaware limited liability company (the “Issuer”) and WELLS
FARGO BANK, NATIONAL ASSOCIATION, a national banking association, (“Wells
Fargo”) solely in its capacity as indenture trustee under the Indenture (as
defined below) (in such capacity, the “Indenture Trustee” and together with the
Issuer and their successors and assigns, the “Covered Parties”) for the benefit
of the Noteholders (as defined therein).
PRELIMINARY STATEMENT:
Reference is made to that certain Indenture, dated as of December 1, 2010 (the
“Indenture”), by and among the Issuer, the Indenture Trustee, Silverleaf
Resorts, Inc., as servicer (in such capacity, the “Servicer”), and Wells Fargo,
as backup servicer.
The Issuer is owned directly by the Guarantor.
In order to induce the Covered Parties to enter into the Indenture, the
Guarantor is entering into this Guaranty, pursuant to which the Guarantor will
make certain payments to the Collection Account for the benefit of the Covered
Parties.
Capitalized terms used but not defined herein shall have the meanings specified
in the “Standard Definitions” attached as Annex A to the Indenture.
NOW, THEREFORE, in consideration of the premises above and in order to induce
the Covered Parties to enter into the Indenture, the Guarantor hereby agrees as
follows:
SECTION 1. Guaranty. The Guarantor hereby unconditionally and irrevocably agrees
with and for the benefit of the Covered Parties to promptly pay, in immediately
available funds, to the Collection Account:
(i)    
prior to each Payment Date (but in any event not later than 10:00 a.m. Central
Time one (1) Business Day prior to such Payment Date), an amount equal to the
Aggregate Defaulted Timeshare Loan Make-Whole Amount for the related Payment
Date;

(ii)    
prior to each Payment Date (but in any event not later than 10:00 a.m. Central
Time one (1) Business Day prior to such Payment Date), if there are insufficient
Available Funds (after giving effect to payment of Aggregate Defaulted Timeshare
Loan Make-Whole Amounts, if any) to pay in full all Interest Distribution Amount
due on such Payment Date, the amount of such insufficiency; and

(iii)    
on the Stated Maturity, if there are insufficient funds to pay in full the
Aggregate Outstanding Note Balance of the Notes, the amount of such
insufficiency.

SECTION 2. Obligation Absolute. The obligations of the Guarantor under this
Guaranty (the “Obligations”) are independent of any obligation of the Issuer
under the Indenture, and a separate action or actions may be brought and
prosecuted against the Guarantor to enforce this Guaranty, irrespective of
whether any action is brought against the Issuer or whether the Issuer is joined
in any such action or actions. Except as provided in Section 12 hereof, the
liability of the Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(i)    
any lack of validity or enforceability against the Issuer of the Indenture, any
other Transaction Document or any other agreement or instrument relating
thereto;

(ii)    
any change in the time, manner or place of payment of, or in any other term of
the Indenture, or any other amendment or waiver of or any consent to departure
from any Transaction Document;

(iii)    
any taking, exchange, release or non-perfection of the Trust Estate;

(iv)    
any manner of application of collateral, or proceeds thereof, to payments on the
Notes (unless such application satisfies the Notes in full), or any manner of
sale or other disposition of any collateral or any other assets of the Issuer or
any of its respective subsidiaries;

(v)    
the absence of any attempt by, or on behalf of, the Indenture Trustee or any of
the Noteholders, to collect, or to take any other action to enforce, all or any
part of the Notes or the Obligations;

(vi)    
the election of any remedy by, or on behalf of, the Indenture Trustee or any of
the Noteholders with respect to all or any part of the Obligations or the Notes;

(vii)    
the election by, or on behalf of, the Indenture Trustee or any of the
Noteholders, in any proceeding of the Issuer instituted under Chapter 11 of
Title 11 of the United States Code (11 U.S.C. 101 et seq.) (the “Bankruptcy
Code”), of the application of Section 1111(b)(2) of the Bankruptcy Code;

(viii)    
any borrowing or grant of a security interest by the Issuer, as a debtor in
possession, under Section 364 of the Bankruptcy Code;

(ix)    
the disallowance, under Section 502 of the Bankruptcy Code, of all or any
portion of the claims of the Indenture Trustee or any of the Noteholders against
the Issuer for repayment of all or any part of the Notes, including any amount
due hereunder;

(x)    
any actual or alleged fraud by any party (other than the Indenture Trustee);

(xi)    
any change, restructuring or termination of the corporate structure or existence
of the Issuer or any of its respective subsidiaries; or

(xii)    
any other circumstance that might otherwise constitute a legal or equitable
discharge or defense available to, or a discharge of, the Issuer or the
Guarantor (except payment in full of the Notes).

This Guaranty shall continue to be effective if at any time any payment made by
the Guarantor hereunder is rescinded or must otherwise be returned by any
Covered Party upon the insolvency, bankruptcy or reorganization of the Issuer or
otherwise, all as though such payment had not been made. Upon a failure of the
Issuer to make any payment constituting Obligations hereunder, when due, under
the Indenture, the Indenture Trustee, on behalf of the Noteholders may proceed
directly and at once, without notice, against the Guarantor to obtain
performance of and to collect and recover the full amount, or any portion, of
the Obligations, without first proceeding against any other party.
SECTION 3. Waiver.
(a) The Guarantor hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of receivership or bankruptcy of the
Issuer, protest or notice with respect to the Notes or the Obligations, all
setoffs and counterclaims and all presentments, demands for performance, notices
of nonperformance, protests, notices of protest, notices of dishonor and notices
of acceptance of this Guaranty, the benefits of all statutes of limitation, and
all other demands whatsoever (and shall not require that the same be made on the
Issuer as a condition precedent to the Guarantor's obligations hereunder), and
covenants that this Guaranty will not be discharged, except by complete payment
in cash of the Obligations. The Guarantor further waives all notices that the
principal amount, or any portion thereof, and/or any interest on any instrument
or document evidencing all or any part of the Notes or the Obligations is due,
notices of any and all proceedings to collect from the maker, any endorser, or
from any other party, and, to the extent permitted by law, notices of exchange,
sale, surrender or other handling of any security or collateral given to the
Indenture Trustee, on behalf of the Noteholders to secure payment of all or any
part of the Notes.
(b) The Indenture Trustee, on behalf of the Noteholders is hereby authorized,
without notice or demand and without affecting the liability of the Guarantor
hereunder, from time to time, (i) to modify, amend or change the terms of any of
the Transaction Documents; (ii) to accept partial payments on all or any part of
the Notes or the Obligations, (iii) to take and hold security or collateral for
the payment of all or any part of the Notes or the Obligations or this Guaranty,
(iv) to exchange, enforce, waive and release any such security or collateral;
(v) to apply such security or collateral and direct the order or manner of sale
thereof as in its discretion it may determine; and (vi) to settle, release,
exchange, enforce, waive, compromise or collect or otherwise liquidate all or
any part of the Notes or the Obligations, this Guaranty and any security or
collateral for the Notes or the Obligations. Any of the foregoing may be done in
any manner, without affecting or impairing the obligations of the Guarantor
hereunder.
SECTION 4. Subrogation. The Guarantor will not exercise any rights that it may
acquire by way of subrogation under this Guaranty, by any payment or performance
made hereunder or otherwise, until all amounts payable under this Guaranty and
the Indenture shall have been paid and performed in full. If any amount shall be
paid to the Guarantor on account of such subrogation rights at any time prior to
the payment and performance in full of the amounts payable under this Guaranty
and the Indenture, such amount shall be held in trust for the benefit of the
applicable Covered Party, and shall forthwith be paid to the applicable Covered
Party, to be credited and applied to the Notes, whether matured or unmatured, in
accordance with the terms of the Indenture or to be held by the applicable
Covered Party as collateral security for any obligations thereafter existing.
SECTION 5. No Marshalling; Reinstatement. The Guarantor consents and agrees that
no Covered Party nor any party acting for or on behalf of a Covered Party shall
be under any obligation to marshall any assets in favor of the Guarantor or
against or in payment of any or all of the Obligations. The Guarantor further
agrees that, to the extent that the Issuer, the Guarantor or any other party
makes a payment or payments to the Indenture Trustee, on behalf of the
Noteholders, or the Indenture Trustee receives any proceeds of the Trust Estate,
which payment or payments or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to the Issuer, the Guarantor or any other party, or their respective
estates, trustees, receivers or any other party, including, without limitation,
the Guarantor, under any bankruptcy law, state or federal law, common law or
equitable cause, then, to the extent of such payment or repayment, the part of
the Obligations which has been paid, reduced or satisfied by such amount shall
be reinstated and continued in full force and effect as of the time immediately
preceding such initial payment, reduction or satisfaction.
SECTION 6. Subordination.
(a) The Guarantor agrees that any and all claims of the Guarantor against the
Issuer, any endorser or any other guarantor of all or any part of the
Obligations, or against any of their respective properties (collectively, the
“Subordinated Indebtedness”), shall be subordinate and subject in right of
payment to the prior payment, in full and in cash, of all Notes, which are
referred to herein as the “Senior Obligations”. Notwithstanding any right of the
Guarantor to ask, demand, sue for, take or receive any payment in respect of the
Subordinated Indebtedness, all rights, liens and security interests of the
Guarantor, whether now or hereafter arising and howsoever existing, in any asset
of the Issuer (whether constituting part of the security or collateral given to
the Indenture Trustee to secure payment of all or any part of the Senior
Obligations or otherwise) shall be and hereby are subordinated to the rights of
the Indenture Trustee on behalf of the Noteholders in such asset.
(b) From and after the occurrence of any Event of Default:
(i)    
The Guarantor shall have no right to possession of any asset of the Issuer or to
foreclose upon any such asset, whether by judicial action or otherwise, unless
and until all of the Senior Obligations shall have been fully paid and
satisfied.

(ii)    
If all or any part of the assets of the Issuer, or the proceeds thereof, are
subject to any distribution, division or application to the creditors of the
Issuer, whether partial or complete, voluntary or involuntary, and whether by
reason of liquidation, bankruptcy, arrangement, receivership, assignment for the
benefit of creditors or any other action or proceeding, or if the Issuer is
dissolved or if substantially all of the assets of the Issuer are sold, then,
and in any such event, any payment or distribution of any kind or character,
either in cash, securities or other property, which shall be payable or
deliverable upon or with respect to any of the Subordinated Indebtedness shall
be paid or delivered directly to the Indenture Trustee for application to the
Senior Obligations, due or to become due, until such Senior Obligations shall
have been fully paid and satisfied.

(iii)    
The Guarantor hereby irrevocably authorizes and empowers the Indenture Trustee
(as a present grant, effective the date hereof and subject only to the condition
that an Event of Default exists) in respect of the Subordinated Indebtedness to
demand, sue for, collect and receive every payment or distribution thereon and
give acquittance therefor and to make and present for and on behalf of the
Guarantor such proofs of claim and take such other action, in the Indenture
Trustee's own name or in the name of the Guarantor or otherwise, as the
Indenture Trustee may deem necessary or advisable for the enforcement of this
Guaranty. The Indenture Trustee may vote such proofs of claim in any such
proceeding, receive and collect any and all payments or disbursements made
thereon in whatever form the same may be paid or issued and apply the same on
account of any unpaid Senior Obligations.

(iv)    
Should any payment, distribution, security or instrument or proceeds of any of
the foregoing be received by the Guarantor upon or with respect to the
Subordinated Indebtedness following the occurrence of an Event of Default and
prior to the satisfaction of all of the Senior Obligations, the Guarantor shall
(to the extent of the unpaid Senior Obligations) receive and hold the same in
trust, as trustee, for the benefit of the Indenture Trustee and the Noteholders
and shall forthwith deliver the same to the Indenture Trustee, in precisely the
form received (except for the endorsement or assignment of the Guarantor where
necessary), for application to any of the Senior Obligations, due or not due,
and, until so delivered, the same shall be held in trust by the Guarantor as the
property of the Indenture Trustee on behalf of the Noteholders. If the Guarantor
fails to make any such endorsement or assignment to the Indenture Trustee, the
Indenture Trustee or any of its officers or employees are hereby irrevocably
authorized to make the same.

(v)    
The Guarantor agrees that until the Senior Obligations have been paid in full in
cash and satisfied (except for contingent indemnification obligations), the
Guarantor will not assign or transfer to any other party any claim the Guarantor
has or may have against the Issuer.

SECTION 7. Representations, Warranties and Covenants. Effective on, at and as of
the Closing Date, unless otherwise specifically set forth in each
representation, warranty and covenant, the Guarantor hereby represents, warrants
and covenants:
(a) Existence. The Guarantor (i) is a corporation duly organized, validly
existing and in good standing under the laws of the State of Texas; (ii) has all
requisite power and authority to own and operate its properties and to conduct
its business as currently conducted and as proposed to be conducted as
contemplated by this Guaranty, to enter into this Guaranty and to perform its
obligations hereunder; and (iii) has made all filings and holds all material
franchises, licenses, permits and registrations which are required under the
laws of each jurisdiction in which the properties owned (or held under lease) by
it or the nature of its activities makes such filings, franchises, licenses,
permits or registrations necessary, except where the failure to make such filing
will not have a material adverse effect on the Guarantor's activities or its
ability to perform its obligations hereunder.
(b) Solvency. The Guarantor is solvent. Prior to the date hereof, the Guarantor
did not, and is not about to, engage in any business or transaction for which
any property remaining with the Guarantor would constitute an unreasonably small
amount of capital. In addition, the Guarantor has not incurred debts that would
be beyond the Guarantor's ability to pay as such debts matured.
(c) Litigation. Except as specified in “RISK FACTORS” in the Private Placement
Memorandum, there is no pending or, to the best of the Guarantor's Knowledge,
threatened action, suit, proceeding or investigation before any court,
administrative agency, arbitrator or governmental body against or affecting the
Guarantor which, if decided adversely, would materially and adversely affect (i)
the condition (financial or otherwise), business or operations of the Guarantor
or (ii) the ability of the Guarantor to perform its obligations hereunder, or
the validity or enforceability of this Guaranty.
(d) Compliance with Law. The Guarantor is in material compliance with all
statutes, laws and ordinances and all governmental rules and regulations to
which it is subject, the violation of which, either individually or in the
aggregate, could materially adversely affect its business, earnings, properties
or condition (financial or other). The internal policies and procedures employed
by the Guarantor are in material compliance with all applicable statutes, laws
and ordinances and all governmental rules and regulations. The execution,
delivery and performance of this Guaranty do not and will not cause the
Guarantor to be in violation of any law or ordinance, or any order, rule or
regulation, of any federal, state, municipal or other governmental or public
authority or agency where such violation would, either individually or in the
aggregate, materially adversely affect its business, earnings, properties or
condition (financial or other).
(e) No Defaults or Violations. The Guarantor is not in violation of any term of
its certificate of incorporation or by-laws. The execution, delivery and
performance by the Guarantor of this Guaranty do not and will not (i) conflict
with or violate the organizational documents of the Guarantor, (ii) conflict
with or result in a breach of any of the terms, conditions or provisions of, or
constitute a default under, or result in the creation of any Lien on any of the
properties or assets of the Guarantor pursuant to the terms of any instrument or
agreement to which the Guarantor is a party or by which it is bound where such
conflict would have a material adverse effect on the Guarantor's activities or
its ability to perform its obligations hereunder or (iii) require any consent of
or other action by any trustee or any creditor of, any lessor to or any investor
in the Guarantor.
(f) Action. This Guaranty has been duly executed and delivered on behalf of the
Guarantor and this Guaranty constitutes a legal, valid and binding obligation of
the Guarantor enforceable in accordance with its terms except as may be limited
by bankruptcy, insolvency, moratorium or other similar laws affecting creditors'
rights and by general principles of equity.
(g) Approvals. No prior consent, approval or authorization of, registration,
qualification, designation, declaration or filing with, or notice to any
federal, state or local governmental or public authority or agency, is, was or
will be required for the valid execution, delivery and performance by the
Guarantor of this Guaranty. The Guarantor has obtained all consents, approvals
or authorizations of, made all declarations or filings with, or given all
notices to, all federal, state or local governmental or public authorities or
agencies which are necessary for the continued conduct by the Guarantor of its
respective businesses as now conducted, other than such consents, approvals,
authorizations, declarations, filings and notices which, neither individually
nor in the aggregate, materially and adversely affect, or in the future will
materially and adversely affect, the business, earnings, prospects, properties
or condition (financial or other) of the Guarantor
(h) Conditions Precedent. There are no conditions precedent to the effectiveness
of this Guaranty that have not been satisfied or waived.
(i) Ownership. Effective on the Closing Date, the Guarantor directly owns the
Issuer.
(j) Taxes. The Guarantor has timely filed all tax returns (federal, state and
local) which are required to be filed and has paid all taxes that have become
due and payable, other than those which are being contested in good faith or
where the failure to file or pay would not have a material adverse effect on the
Guarantor's activities or its ability to perform its obligations hereunder.
(k) Investment Company Act. The Guarantor is not an “investment company” or a
company “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended.
(l) True and Complete Disclosure. No document, certificate or report furnished
by the Guarantor, in writing, pursuant to this Indenture or in connection with
the transactions contemplated hereby, contains or will contain when furnished
any untrue statement of a material fact or fails or will fail to state a
material fact necessary in order to make the statements contained therein, in
light of the circumstances under which they were made, not misleading. There are
no facts relating to the Guarantor as of the Closing Date which when taken as a
whole, materially adversely affect the financial condition or assets or business
of the Guarantor, or which may impair the ability of the Guarantor to perform
its obligations under this Guaranty, which have not been disclosed herein or in
the certificates and other documents furnished by or on behalf of the Guarantor
pursuant hereto or thereto specifically for use in connection with the
transactions contemplated hereby or thereby.
(m) ERISA. To the Guarantor's Knowledge: (i) with respect to plan years
beginning prior to January 1, 2008, neither the Guarantor nor any of its
Commonly Controlled Affiliates (as defined below) has any “accumulated funding
deficiency” (as such term is defined under ERISA and the Code), whether or not
waived, with respect to any Employee Pension Benefit Plan (as defined below),
and no event has occurred or circumstance exists that may result in any
accumulated funding deficiency as of the last day of any plan year beginning
before January 1, 2008 of any such plan; (ii) with respect to plan years
beginning after December 31, 2007, neither the Guarantor nor any of its Commonly
Controlled Affiliates has any unpaid “minimum required contribution” (as such
term is defined under ERISA and the Code) with respect to any Employee Pension
Benefit Plan, whether or not such unpaid minimum required contribution is
waived, and no event has occurred or circumstance exists that may result in any
unpaid minimum required contribution as of the last day of the current plan year
of any such plan; (iii) the Guarantor and each of its Commonly Controlled
Affiliates has no outstanding liability for any undisputed contribution required
under any Guarantor Multiemployer Plan (as defined below); and (iv) the
Guarantor and each of its Commonly Controlled Affiliates has no outstanding
liability for any material disputed contribution required under any Guarantor
Multiemployer Plan, (a) Neither the Guarantor nor any of its Commonly Controlled
Affiliates has incurred any Withdrawal Liability (as defined below) and (b) no
event has occurred or circumstance exists that could result in any Withdrawal
Liability. Neither the Guarantor nor any of its Commonly Controlled Affiliates
has received notification of the reorganization, termination, partition, or
insolvency of any Guarantor Multiemployer Plan. For purposes of this subsection,
“Commonly Controlled Affiliates” means those direct or indirect affiliates of
the Guarantor that would be considered a single employer with the Guarantor
under Section 414(b), (c), (m), or (o) of the Code; “Employee Pension Benefit
Plan” means an employee pension benefit plan, as such term is defined in Section
3(2) of ERISA, that is sponsored, maintained or contributed to by the Guarantor
or any of its Commonly Controlled Affiliates (other than an Guarantor
Multiemployer Plan); “Multiemployer Plan” means a multiemployer plan as such
term is defined in Section 3(37) of ERISA; “Guarantor Multiemployer Plan” means
a Multiemployer Plan to which the Guarantor or any of its Commonly Controlled
Affiliates contributes or in which the Guarantor or any of its Commonly
Controlled Affiliates participates; and “Withdrawal Liability” means liability
as determined under ERISA for the complete or partial withdrawal of the
Guarantor or any of its Commonly Controlled Affiliates from a Multiemployer
Plan.
(n) Financial Statements. If the Guarantor ceases to be a public company or its
financial statements are no longer publicly available, it shall furnish or cause
to be furnished to the Covered Parties:
(i)    
Annual Reporting. Within 100 days after the close of its fiscal year, audited,
unqualified financial statements (which shall include balance sheets, statements
of income and retained earnings and a statement of cash flows) for such fiscal
year certified by independent public accountants.

(ii)    
Quarterly Reporting. Within 55 days after the close of the first three (3)
quarterly periods of its fiscal year, balance sheets as at the close of each
such period and statements of income and retained earnings and a statement of
cash flows for the period from the beginning of such fiscal year to the end of
such quarter, all certified by its chief financial officer.

SECTION 8. Amendments, Etc. No amendment or waiver of any provision of this
Guaranty, and no consent to any departure by the Guarantor herefrom, shall in
any event be effective unless the same shall be in writing and signed by the
Guarantor (only with respect to amendments) and all Covered Parties, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
SECTION 9. Severability. In the event that any provision hereof is deemed to be
invalid by reason of the operation of any law or by reason of the interpretation
placed thereon by any court, this Guarantee shall be construed as not containing
such provisions and the invalidity of such provisions shall not affect other
provisions hereof which are otherwise lawful and valid and shall remain in full
force and effect.
SECTION 10. Addresses for Notices. All notices and other communications
hereunder shall be in writing (which shall include facsimile communication),
shall be personally delivered, express couriered, electronically transmitted (in
which case a hard copy shall also be sent by regular mail) or mailed by
registered or certified mail to the Covered Parties and the Guarantor at the
address set forth under their respective names on the signature page hereof.
Notices and communications by facsimile and notices and communications sent by
other means shall be effective when received.
SECTION 11. No Waiver; Remedies. No failure on the part of any Covered Party to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
SECTION 12. General Limitation on Guarantee. In any action or proceeding
involving any applicable state, federal or foreign bankruptcy, insolvency or
other applicable law affecting the rights of creditors generally, if the
obligations of the Guarantor would otherwise be held or determined to be void,
voidable, invalid or unenforceable, or subordinated to the claims of any other
creditors, on account of the amount of its liability under this Guarantee, then,
notwithstanding any other provision to the contrary, the amount of such
liability shall, without any further action by such Guarantor or any Covered
Person, be automatically limited and reduced to the highest amount (after giving
effect to any rights of subrogation and contribution) that is valid and
enforceable, not void or voidable and not subordinated to the claims of other
creditors as determined in such action or proceeding.
SECTION 13. Continuing Agreement. This Guaranty is a continuing agreement and,
except with respect to the circumstances provided for in Section 12, shall:
(a) remain in full force and effect until the payment in full of the Notes and
the payment of all other amounts payable under the Transaction Documents;
(b) be binding upon the Guarantor, its successors and assigns; and
(c) inure to the benefit of, and be enforceable by, the Covered Parties and
their successors and assigns.
SECTION 14. Release of Silverleaf Resorts, Inc. as Guarantor. In the event (a)
that Silverleaf Resorts, Inc. (“Silverleaf”) ceases to control (within the
meaning of the Securities Act of 1933, as amended) the Issuer, (b) no Event of
Default under the Indenture has occurred and is continuing, (c) the new
controlling person has agreed to assume the obligations of Silverleaf hereunder,
(d) Silverleaf shall have received the consent of the Covered Parties and the
majority of the Noteholders, and (e) Silverleaf and such new controlling person
shall have executed documents and provided opinions of counsel reasonably
requested by the Covered Parties, then Silverleaf shall be permitted to assign
its obligations hereunder to such new controlling person, and upon such
assignment, this Guaranty shall terminate with respect to Silverleaf and
Silverleaf shall be released from its obligations hereunder without the
necessity of any further action of the parties to this Guaranty.
SECTION 15. GOVERNING LAW; WAIVER OF JURY TRIAL. THIS GUARANTY SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
(INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW BUT OTHERWISE WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES). THE GUARANTOR HEREBY AGREES TO THE
JURISDICTION OF ANY FEDERAL COURT LOCATED WITHIN THE STATE OF NEW YORK, AND
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED,
DIRECTED TO THE GUARANTOR AT THE ADDRESS SET FORTH ON THE SIGNATURE PAGE HEREOF,
AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED WHEN THE RETURN RECEIPT IS
SIGNED. THE GUARANTOR HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, BETWEEN
THE GUARANTOR AND ANY COVERED PARTY, ARISING OUT OF, CONNECTED WITH, RELATED TO,
OR INCIDENTAL TO THE RELATIONSHIP BETWEEN THEM IN CONNECTION WITH THIS GUARANTY.
INSTEAD, ANY DISPUTE RESOLVED IN COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT
A JURY. WITH RESPECT TO THE FOREGOING CONSENT TO JURISDICTION, THE GUARANTOR
HEREBY WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO
VENUE OF ANY ACTION INSTITUTED HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH
LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS
SECTION 11 SHALL AFFECT THE RIGHT OF ANY COVERED PARTY TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY COVERED PARTY TO
BRING ANY ACTION OR PROCEEDING AGAINST THE GUARANTOR OR ITS PROPERTY IN THE
COURTS OF ANY OTHER JURISDICTION.
SECTION 16. No Proceeding. The Guarantor hereby agrees that it will not,
directly or indirectly, institute, or cause to be instituted, or join any Person
in instituting, against the Issuer or any Association, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or state bankruptcy or similar law so long as
there shall not have elapsed one year plus one day since the latest maturing
Notes issued by the Issuer.
[Signature Pages Follow]
 
 
    

 

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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be duly executed
and delivered by its officer thereunto duly authorized as of the date first
above written.
 
 
SILVERLEAF RESORTS, INC.
 
 
By:
/S/ HARRY J. WHITE, JR.
 
Name:
Harry J. White, Jr.
 
Title:
VP, Treasurer and Chief Financial Officer
 
Address:
1221 River Bend Drive
 
 
Suite 120
 
 
Dallas, TX 75247
 
 
 
Acknowledged and Agreed:
 
SILVERLEAF RESORTS IX, LLC, as Issuer
 
 
 
By:
/S/ HARRY J. WHITE, JR.
 
Name:
Harry J. White, Jr.
 
Title:
VP, Treasurer and Chief Financial Officer
 
Address:
1221 River Bend Drive
 
 
Suite 120
 
 
Dallas, TX 75247
 
 
 
WELLS FARGO BANK, NATIONAL ASSOCIATION,
 
 
as Indenture Trustee
 
By:
/S/ BENJAMIN F. JORDAN
 
Name:
Benjamin F. Jordan
 
Title:
Vice President