exv10w1






Exhibit 10.1




EXECUTION COPY




STANDARD DEFINITIONS




     “Account Intermediary” shall have the meaning specified in the preamble to the
Indenture.



     “Accumulation Interval” shall have the meaning specified in the definition of “Cash
Accumulation Event”.



     “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.



     “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.



     “Adjusted Note Balance” shall equal, for any Class of Notes, the Outstanding Note
Balance of such Class of Notes immediately prior to such Payment Date, less any Note Balance
Write-Down Amounts as of such Payment 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, “Adjusted Note Balance” shall exclude Notes which are held by Silverleaf or any
Affiliate thereof.



     “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 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 General Reserve Account pursuant to Section 3.2(b) of
the Indenture, (iii) the Originator or the Servicer, as the case may be, pursuant to Section 4.5 of
the Indenture, and (iv) the Servicer pursuant to the Indenture, plus (B) all investment earnings on
funds on deposit in the Collection Account from the immediately preceding Payment Date through 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 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
June 1, 2008, 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)
$2,500 or (ii) the product of one-twelfth of 0.04% 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, Part 4 of ERISA, (B) a “plan” as defined in Section 4975(e)(1)



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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 §2510.3-101 (as modified by
Section 3(42) of ERISA), by reason of investment by an employee benefit plan or plan in such entity
or (D) a plan that is subject to Similar Law.



     “Benefit Plan Investor” shall mean (A) an “employee benefit plan” within the meaning
of Section 3(3) of ERISA that is subject to ERISA, (B) any “plan” described in Section 4975(e)(1)
of the Code or (C) any entity whose underlying assets include “plan assets” of any of the foregoing
by reason of an employee benefits plan’s or other plan’s investment in such entity.



     “Book-Entry Note” shall mean a beneficial interest in the Notes, ownership and
transfers of which shall be made through book-entries by the Depository.



     “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, Wilmington, Delaware, 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.



     “Cash Accumulation Event” shall exist on any Determination Date, if (i) the Three
Month Rolling Average of Serviced Timeshare Loan Delinquency Ratios exceeds 10.0% or (ii) the
Cumulative Default Level as of the last day of any Due Period specified below exceeds the following
parameters (each indicated 3-Due Period interval, an “Accumulation Interval”):



	 	 	 	 	 
	Due Period	 	Cumulative Default Level %
	1-3
	 	 	1.18	%
	4-6
	 	 	4.07	%
	7-9
	 	 	6.80	%
	10-12
	 	 	8.81	%
	13-15
	 	 	10.46	%
	16-18
	 	 	12.36	%
	19-21
	 	 	14.21	%
	22-24
	 	 	15.32	%
	25-27
	 	 	16.21	%
	28-30
	 	 	17.05	%
	31-33
	 	 	18.07	%
	34-36
	 	 	18.71	%
	37-39
	 	 	19.16	%
	40-42
	 	 	19.51	%
	43 and thereafter
	 	 	19.60	%






     The Cash Accumulation Event described in clause (i) above will continue until, on the last day
of each of the two Due Periods immediately following the Due Period during which such



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Cash Accumulation Event occurred, the Three Month Rolling Average of Serviced Timeshare Loan
Delinquency Ratios does not exceed 10.0%. The Cash Accumulation Event described in clause (ii)
above shall be deemed to be continuing until, on the last Business Day of each of the two
Accumulation Intervals immediately following the Accumulation Interval during which such Cash
Accumulation Event occurred, the Cumulative Default Level remains below the limits described above.




     “Cede & Co.” shall mean the initial registered holder of the Notes, acting as nominee
of The Depository Trust Company.



     “Class” shall mean, as the context may require, any of the Class A Notes, Class B
Notes, Class C Notes, Class D Notes, Class E Notes, Class F Notes or Class G 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.



     “Class C Notes” shall have the meaning specified in the Recitals of the Issuer in the
Indenture.



     “Class C Principal Distribution Amount” shall mean, with respect to any Payment Date,
the Principal Distribution Amount payable to the Holders of the Class C Notes on such Payment Date.



     “Class D Notes” shall have the meaning specified in the Recitals of the Issuer in the
Indenture.



     “Class D Principal Distribution Amount” shall mean, with respect to any Payment Date,
the Principal Distribution Amount payable to the Holders of the Class D Notes on such Payment Date.



     “Class E Notes” shall have the meaning specified in the Recitals of the Issuer in the
Indenture.



     “Class E Principal Distribution Amount” shall mean, with respect to any Payment Date,
the Principal Distribution Amount payable to the Holders of the Class E Notes on such Payment Date.



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     “Class F Notes” shall have the meaning specified in the Recitals of the Issuer in the
Indenture.



     “Class F Principal Distribution Amount” shall mean, with respect to any Payment Date,
the Principal Distribution Amount payable to the Holders of the Class F Notes on such Payment Date.



     “Class G Notes” shall have the meaning specified in the Recitals of the Issuer in the
Indenture.



     “Class G Principal Distribution Amount” shall mean, with respect to any Payment Date,
the Principal Distribution Amount payable to the Holders of the Class G Notes on such Payment Date.



     “Clearstream” shall mean Clearstream Banking, société anonyme, a limited liability
company organized under the laws of Luxembourg.



     “Closing Date” shall mean June 6, 2008.



     “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.



     “Collateral” shall have the meaning specified in the Granting Clause of the Indenture.



     “Collateral Liquidation Distribution Amount Shortfall” shall have the meaning
specified in Section 1, paragraph (iv) of the Guaranty.



     “Collateral Liquidation Event” shall have the meaning specified in Section 6.6(b) of
the Indenture.



     “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 Confidential Offering Circular dated May 29, 2008 or the
Confidential Offering Circular dated June 5, 2008 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



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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 Initial Purchaser and each prospective investor
relating to such tax treatment and Tax Structure.



     “Confidential Offering Circular” shall mean the confidential offering circular dated
June 5, 2008 related to the Notes and Transaction Documents.



     “Continued Errors” shall have the meaning specified in Section 5.4 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 the Issuer, 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.



     “Cumulative Default Level” shall mean for any date, an amount equal to the sum of the
Loan Balances of all Timeshare Loans that became Defaulted Timeshare Loans since the Cut-Off Date
(less the Loan Balances of Defaulted Timeshare Loans that subsequently became current prior to such
date of determination which are still subject to the lien of the Indenture at such time), divided
by the Cut-Off Date Aggregate Loan Balance (expressed as a percentage).



     “Custodial Agreement” shall mean the custodial agreement, dated as of June 1, 2008 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 Fees” shall mean for each Payment Date, the fee payable by the Issuer to
the Custodian in accordance with the Custodial Agreement.



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     “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, the related Subsequent
Cut-Off Date.



     “Cut-Off Date Aggregate Loan Balance” shall mean 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.



     “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.



     “Default Acceleration Event” shall have the meaning specified in Section 6.6(b) of the
Indenture.



     “Default Level” means, for any Due Period, the sum of the outstanding principal
balances due under or in respect of all Timeshare Loans that became Defaulted Loans during such Due
Period and have not been repurchased or substituted by the last day of such Due Period (less the
Loan Balances of Defaulted Timeshare Loans that subsequently became current during such Due Period
which are still subject to the lien of the Indenture at such time), divided by the Aggregate Loan
Balance on the first day of such Due Period.



     “Default Purchase Price” shall be equal to the greater of (i) the fair market value of
such Default Timeshare Loan as determined by the Originator in its commercially reasonable judgment
or (ii) fifteen percent (15%) of the original acquisition price paid for the Timeshare Property by
the Obligor under such Defaulted Timeshare Loan, as limited by the Optional Purchase Limit.



     “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
actions 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.



     “Deferred Interest Amount” shall mean, with respect to a Class of Notes and a Payment
Date, the sum of (i) interest accrued at the related Note Rate during the related Interest Accrual
Period on such Note Balance Write-Down Amounts applied in respect of such Class and (ii) any unpaid
Deferred Interest Amounts from any prior Payment Date, together with interest thereon at the
applicable Note Rate from the date any such Note Balance Write-Down Amount was applied in respect
of such Class, to the extent permitted by law.



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     “Definitive Note” shall have the meaning specified in Section 2.2 of the Indenture.



     “Delinquent Timeshare Loan” means, with respect to any Timeshare Loan as of any date,
a Timeshare Loan under which all or part of a scheduled payment is 31 or more days delinquent from
the due date and which is not a Defaulted Timeshare Loan.



     “Depository” shall mean an organization registered as a “clearing agency” pursuant to
Section 17A of the Exchange Act. The initial Depository shall be The Depository Trust Company.



     “Depository Agreement” shall mean the letter of representations dated as of June 5,
2008, by and among the Issuer, the Indenture Trustee and the Depository.



     “Depository Participant” shall mean a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Depository effects book-entry transfers
and pledges securities deposited with the Depository.



     “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.



     “DTC” shall mean The Depository Trust Company, and its permitted successors and
assigns.



     “Due Period” shall mean with respect to any Payment Date, the immediately preceding
calendar month; for the Initial Payment Date, the period from and including April 24, 2008 to May
31, 2008.



     “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



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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.



     “Errors” shall have the meaning specified in Section 5.4 of the Indenture.



     “Escrow Agent” shall mean Chicago Title Insurance Company.



     “Escrow Agreement” shall mean the escrow and closing agreement, dated as of June 1,
2008, 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.



     “Euroclear” shall mean Euroclear Bank S.A./N.V., as operator of the Euroclear System,
or its successor in such capacity.



     “Event of Default” shall have the meaning specified in Section 6.1 of the Indenture.



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     “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.



     “Fitch” shall mean Fitch Ratings, a subsidiary of Fitch, Inc.



     “Force Majeure Event” shall mean the occurrence at a single Resort of damage to over
25% of the Units as the result of a fire, hurricane, earthquake, flood, tornado, landslide, tsunami
and/or impact event.



     “Force Majeure Loan” shall mean a Timeshare Loan that has been the subject of a Force
Majeure Event.



     “Force Majeure Purchase Limit” shall mean, with respect to the purchase of a Force
Majeure Loan by the Originator, on any date, (x) 10% of the Cut-Off Date Aggregate Loan Balance
less (y) the aggregate Loan Balances of the Force Majeure Loans previously purchased by the
Originator.



     “Force Majeure Purchase Price” shall mean the fair market value of a Force Majeure
Loan as determined by the Originator in its commercially reasonable judgment.



     “Foreclosure Properties” shall have the meaning specified in Section 5.3(b) of the
Indenture.



     “General Reserve Account” shall mean the account maintained by the Indenture Trustee
pursuant to Section 3.2(b) of the Indenture.



     “General Reserve Account Initial Deposit” shall mean an amount equal to 5.00% of the
Aggregate Loan Balance as of the Initial Cut-Off Date.



     “General Reserve Account Required Balance” shall mean the lesser of (I) (a) if no Cash
Accumulation Event has occurred and is continuing, the greater of (x) 3.00% of the Cut-Off Date
Aggregate Loan Balance or (y) 7.50% of the Aggregate Loan Balance at such time and (b) if a Cash
Accumulation Event has occurred and is continuing, the greater of (x) 5.00% of the Cut-Off Date
Aggregate Loan Balance or (y) the product of (i) the Aggregate Loan Balance as of the last day of
the immediately preceding Due Period and (ii) 20.00% and (II) the Outstanding Note Balance on such
Payment Date after the distributions of principal in respect of the Notes on such Payment Date.



     “Global Note” shall have the meaning specified in Section 2.2 of the Indenture.



     “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.



     “Guarantor” shall mean Silverleaf in its capacity as guarantor under the Guaranty.



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     “Guaranty” shall mean the guaranty, dated as of June 1, 2008, issued by the Guarantor.



     “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.



     “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, a Class B
Note, a Class C Note, a Class D Note, a Class E Note, a Class F Note or a Class G 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 June 1, 2008, 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 $6,000.



     “Initial Cut-Off Date” shall mean the close of business on April 23, 2008.



     “Initial Note Balance” shall mean with respect to the Class A Notes, the Class B
Notes, the Class C Notes, the Class D Notes, the Class E Notes, the Class F Notes and the Class G
Notes, $45,292,000, $15,634,000, $22,411,000, $9,326,000, $8,655,000 $8,521,000 and $5,569,000,
respectively.



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     “Initial Payment Date” shall mean the Payment Date occurring in June, 2008.



     “Initial Purchaser” shall mean UBS Securities LLC.



     “Intended Tax Characterization” shall have the meaning specified in Section 4.2(b) of
the Indenture.



     “Interest Accrual Period” shall mean with respect to any Payment Date the preceding
calendar month.



     “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 (or, if any Note Balance Write-Down Amounts have been applied to such Class of Notes, the
Adjusted Note Balance of such Class of Notes) 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.



     “Interest Expense” means the aggregate consolidated expense of Silverleaf and its
consolidated subsidiaries for interest on Indebtedness, including, without limitation, amortization
of original issue discount, incurrence fees (to the extent included in interest expense), the
interest portion of any deferred payment obligation and the interest component of any capital lease
obligation.



     “Investment Company Act” shall have the meaning set forth in Section 2(l) of the Note
Purchase Agreement.



     “Issuer” shall mean Silverleaf Finance VI, 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 amended and restated limited
liability company agreement of the Issuer, dated as of June 2, 2008 and effective as of April 3,
2008.



12









 





     “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 June 1, 2008, 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 May
19, 2008, 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 Issuer 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.



13









 





     “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.



     “Non-Sequential Distribution Amount Shortfall” shall have the meaning specified in
Section 1, paragraph (ii) of the Guaranty.



     “Note Balance Write-Down Amount” shall mean with respect to any Payment Date, an
amount equal to the excess, if any, of the Aggregate Outstanding Note Balance (immediately after
the distribution of Available Funds on such Payment Date) over the sum of (A) the Aggregate Loan
Balance as of the end of the Due Period related to such Payment Date and (B) amounts on deposit in
the General Reserve Account, if any.



     “Note Owner” shall mean, with respect to a Book-Entry Note, the Person who is the
beneficial owner of such Book-Entry Note, as reflected on the books of the Depository or on the
books of a Person maintaining an account with such Depository (directly or as an indirect
participant, in accordance with the rules of such Depository).



14









 





     “Note Purchase Agreement” shall mean that certain note purchase agreement dated May
30, 2008 by and among the Initial Purchaser, Silverleaf, the Issuer, and Merrill Lynch, Pierce,
Fenner & Smith Incorporated.



     “Note Rate” shall mean with respect to the Class A Notes, the Class B Notes, the Class
C Notes, the Class D Notes, the Class E Notes, the Class F Notes and the Class G Notes, 6.222%,
7.708%, 8.000%, 8.000%, 8.000%, 8.000% and 8.000% respectively.



     “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, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes and the Class G 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.



     “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 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,



15









 




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.



     “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 Purchase Limit” shall mean, on any date, an amount equal to (x) 20% of the
Cut-Off Date Aggregate Loan Balance less (y) the aggregate Loan Balances (as of the related
purchase dates) of all Defaulted Timeshare Loans previously purchased by the Originator and the
Servicer pursuant to the Transfer Agreement.



     “Optional Redemption Date” shall mean the first date in which the Aggregate
Outstanding Note Balance is less than or equal to 10% of the Aggregate Initial Note Balance of all
Classes of Notes.



     “Optional Substitution Limit” shall mean, on any date, an amount equal to (x) 10% of
the Cut-Off Date Aggregate Loan Balance less (y) the aggregate Loan Balances (as of the related
substitution dates) of all Defaulted Timeshare Loans previously substituted by the Originator and
the Servicer pursuant to the Transfer Agreement.



     “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;



16









 






     (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 the sum of Principal Distribution
Amounts 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 the
Indenture Trustee.



     “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
otherwise become due and payable following an Event of Default under the Indenture and the
Aggregate Loan Balance of the Timeshare Loans is less than the Aggregate Outstanding Note Balance
as a result of a default on one or more of the Timeshare Loans.



     “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 Adjusted Note
Balance of such Class of Notes and the denominator of which is the Aggregate Loan Balance. The
initial Percentage Interest with respect to the Class A Notes, the Class B Notes, the Class C
Notes, the Class D Notes, the Class E Notes, the Class F Notes and the Class G Notes is equal to
approximately 33.75%, 11.65%, 16.70%, 6.95%, 6.45%, 6.35% and 4.15%, respectively.



     “Permitted Liens” shall mean (a) with respect to Timeshare Loans included in the
Collateral, Liens for state, municipal or other local taxes if such taxes shall not at the time be
due



17









 







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 Collateral, 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.



     “Predecessor Servicer Work Product” shall have the meaning specified in Section 5.4(b)
of the Indenture.



     “Preliminary Confidential Offering Circular” shall mean the preliminary confidential
offering circular dated May 29, 2008 related to the Notes and Transaction Documents.



     “Prior Secured Party” shall have the meaning set forth in the Escrow and Closing
Agreement.



     “Principal Distribution Amount” shall equal for any Payment Date and Class of Notes,
the sum of the following:




	 	(i)	 	the product of (a) such Class’ Percentage Interest and (b) 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, Default
Purchase Prices, Force Majeure Purchase Prices and Repurchase Prices, if any, but
excluding principal received in respect of Timeshare Loans that became Defaulted
Timeshare Loans during prior Due Periods) or, if the Cut-Off Date for a Timeshare Loan
shall have occurred during the related Due Period, the amount of principal collected in
respect of such Timeshare Loan after such Cut-Off Date;
	 
	 	(ii)	 	the product of (a) such Class’ Percentage Interest and (b) the aggregate Loan
Balance of all Timeshare Loans which became Defaulted Timeshare Loans during the
related Due Period, less the principal portion, of Default Purchase Prices paid in
respect of Defaulted Timeshare Loans during the related Due Period; and
	 
	 	(iii)	 	any unpaid Principal Distribution Amounts for such Class from prior Payment
Dates.




18









 











     “Prorata Payment Event” shall exist (a) if (i) on a Determination Date during the
first seven Due Periods, the Default Level exceeds 0.75% or (ii) on a Determination Date after the
seventh Due Period, the average of the Default Levels for the three most recently ended Due Periods
exceeds 1.50% or (b) so long as the Servicer has not opted to redeem the Notes on the Payment Date
occurring on or after the 60th day following the Optional Redemption Date; provided, however, that
a Prorata Payment Event shall not exist on any Determination Date on which a Sequential Pay Event
or a Default Acceleration Event exists. A Prorata Payment Event occurring as a result of clause
(a)(i) above, during the first seven Due Periods shall continue until the later of (a) the end of
the seventh Due Period and (b) the date on which the Default Level is below 1.50% for three
consecutive Due Periods. A Prorata Payment Event occurring as a result of clause (a)(ii) above
shall continue until the Default Level is below 1.50% for three consecutive Due Periods. A Prorata
Payment Event occurring as a result of clause (b) above shall continue until the Notes have been
paid in full.



     “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 the weighted average coupon rate of the Timeshare Loans as
of the immediately preceding Determination Date, (iv) that shall not cause the weighted average
FICO score of the Timeshare Loans, after such substitution, to be less than the weighted average
FICO score of the Timeshare Loans as of the immediately preceding Determination Date, (v) that
shall not cause the weighted average months of seasoning on the Timeshare Loans, after such
substitution, to be less than 11 months, (vi) that does not have a stated maturity greater than 12
months prior to the Stated Maturity and (vii) with respect to Qualified Substitute Timeshare Loans
which are being substituted for Defaulted Timeshare Loans, (A) that either (I) has a FICO score
greater than or equal to 675 or (II) has a FICO score greater than or equal to 650 and has at least
12 months of seasoning; and (B) for Qualified Substitute Timeshare Loans substituted during the
first seven Due Periods (I) such Qualified Substitute Timeshare Loans have a weighted average
remaining term to maturity of at least 72 months and (II) each such Qualified Substitute Timeshare
Loan has a remaining term to maturity of at least 36 months.



     “Rating Agency” shall mean S&P.



     “Rating Agency Confirmation” shall mean a written confirmation from the Rating Agency
that the specified action therein shall not cause the then existing rating on any of the Notes to
be negatively qualified, lowered or withdrawn.



     “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



19









 







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.



     “Regulation S Global Note” shall have the meaning set forth in Section 2.2 of the
Indenture.



     “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, 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 (xii) of
Section 3.4(a) of the Indenture.



     “Reservation System” shall mean the centralized reservation system for all Resorts.



     “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,



20









 







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.



     “Restricted Period” shall mean the 40-day period prescribed by Regulation S under the
Securities Act commencing on the later of (a) the date upon which Notes are first offered to
Persons other than the Initial Purchaser and any other distributor (as such term is described in
Regulation S) of the Notes and (b) the Closing Date.



     “Rule 144A Global Note” shall have the meaning specified in Section 2.2 of the
Indenture.



     “S&P” shall mean Standard & Poor’s, a division of The McGraw-Hill Companies, Inc.



     “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 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





     “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.



21









 





     “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.



     “Sell” shall have the meaning set forth in 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 Distribution Amount Shortfall” shall have the meaning specified in Section
1, paragraph (iii) of the Guaranty.



     “Sequential Pay Event” shall exist on any Determination Date if the Cumulative Default
Level as of the last day of any Due Period specified below exceeds the following parameters:



	 	 	 	 	 
	Due Period	 	Cumulative Default Level %
	1-3
	 	 	1.26	%
	4-6
	 	 	4.39	%
	7-9
	 	 	7.36	%
	10-12
	 	 	9.55	%
	13-15
	 	 	11.34	%
	16-18
	 	 	13.39	%
	19-21
	 	 	15.40	%
	22-24
	 	 	16.59	%
	25-27
	 	 	17.56	%
	28-30
	 	 	18.47	%
	31-33
	 	 	19.58	%
	34-36
	 	 	20.27	%
	37-39
	 	 	20.75	%
	40-42
	 	 	21.13	%
	43 and thereafter
	 	 	21.23	%






     “Servicer” shall mean Silverleaf in its capacity as servicer under the Indenture, the
Backup Servicing Agreement and the Custodial Agreement, and its permitted successors and assigns.



22









 





     “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
1.75% 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 hereunder 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 Title I, Part 4 of ERISA or Section
4975 of the Code.



     “Stated Maturity” shall mean the Payment Date occurring in March 2020.



     “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.



     “Substitution Shortfall Amount” shall mean with respect to any Transfer Date, an
amount equal to the excess of the aggregate Loan Balances of the substituted Timeshare Loans over
the aggregate Loan Balances of the Qualified Substitute Timeshare Loans.



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     “Temporary Regulation S Global Note” shall have the meaning specified in Section 2.2
of the Indenture.



     “Three Month Rolling Average of Timeshare Loan Delinquency Ratios” means, as of any
date of determination, a fraction (expressed as a percentage), the numerator of which is the
quotient of (A) the sum of the Aggregate Loan Balance of all Timeshare Loans which were Delinquent
Timeshare Loans as of the last day of each of the three most recently ended Due Periods, divided by
(B) 3, and the denominator of which is the quotient of (C) the sum of the Aggregate Loan Balance of
all Timeshare Loans as of the last day of each of the three most recently ended Due Periods,
divided by (D) 3.



     “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 or a Qualified
Substitute 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 Initial 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




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	 	 	 	(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.	 	in the case of Timeshare Loans purchased by the Issuer from Silverleaf Resorts,
Inc., an original mortgagee title insurance policy or mater policy referencing such
Timeshare Loan and covering Silverleaf Finance VI, LLC, and its successors and assigns
(which shall be delivered by the Escrow Agent to the Custodian within 90 days of the
Closing Date or related Transfer Date),
	 
	 	8.	 	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 and covering Silverleaf Finance VI, LLC, and its successors and assigns
(which shall be delivered by the Escrow Agent to the Custodian within 90 days of the
related Funding Date),
	 
	 	9.	 	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
	 
	 	10.	 	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



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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, a certificate of beneficial interest in
the Oak N’ Spruce Resort Trust entitling the related Obligor to the use and occupancy of a
specifically designed Unit at such Resort for a fixed period of time each year in perpetuity.



     “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 Note Purchase Agreement, the Guaranty 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 June 1, 2008,
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.



     “Transferred Assets” shall mean collectively, the Timeshare Loans (including the
Qualified Substitute Timeshare Loans), Timeshare Properties, Mortgage Note, any Related Security
and other conveyed property related thereto and additional collateral.



     “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
and the General Reserve Account.



     “UCC” means the Uniform Commercial Code as in effect in the relevant jurisdiction, as
amended from time to time.



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     “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.



     “Upgraded Timeshare Loan” shall mean a Timeshare Loan for which the related Obligor
has elected to purchase a new upgraded timeshare property.




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