AMENDED
      AND RESTATED SALE AND SERVICING

    AGREEMENT

    


    among

    


    SILVERLEAF
      FINANCE IV, LLC, as

    Purchaser,

    


    SILVERLEAF
      RESORTS, INC., as

    Seller
      and Servicer,

    


    and

    


    WELLS
      FARGO BANK, NATIONAL ASSOCIATION, as

    Backup
      Servicer, Trustee and Account Intermediary

    


    


    Dated
      as of

    December
      22, 2006

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    TABLE
      OF CONTENTS

    
      
         

        


        
          	
                  Article
                    I DEFINITIONS

                	
                  1

                
	 	 
	
                   Section
                    1.1

                	
                   Definitions

                	
                  1

                
	
                   Section
                    1.2

                	
                   Other
                    Definitional Provisions

                	
                  1

                
	
                   Section
                    1.3

                	
                   Calculations

                	
                  2

                
	
                   Section
                    1.4

                	
                   Material
                    Adverse Effect

                	
                  2

                
	 	 	 
	
                  Article
                    II CONVEYANCE OF RECEIVABLES

                	
                  2

                
	 	 
	
                   Section
                    2.1

                	
                   Conveyance
                    of Receivables

                	
                  2

                
	
                   Section
                    2.2

                	
                   Transfers
                    Intended as Sale

                	
                  5

                
	
                   Section
                    2.3

                	
                   Further
                    Encumbrance of Receivables and Other Conveyed Property

                	
                  5

                
	 	 	 
	
                  Article
                    III THE RECEIVABLES

                	
                  5

                
	 	 
	
                   Section
                    3.1

                	
                   Representations,
                    Warranties and Certain Covenants of Seller

                	
                  5

                
	
                   Section
                    3.2

                	
                   Repurchases
                    and Substitutions

                	
                  9

                
	
                   Section
                    3.3

                	
                   Custody
                    of Timeshare Loan Files

                	
                  12

                
	
                   Section
                    3.4

                	
                   Trustee
                    to Obtain Fidelity Insurance

                	
                  12

                
	 	 	 
	
                  Article
                    IV ADMINISTRATION AND SERVICING OF RECEIVABLES

                	
                  12

                
	 	 
	
                   Section
                    4.1

                	
                   Duties
                    of the Servicer

                	
                  12

                
	
                   Section
                    4.2

                	
                   Collection
                    of Receivable Payments; Lockbox Agreements; Other Duties of the
                    Servicer

                	
                  13

                
	
                   Section
                    4.3

                	
                   Realization
                    Upon Receivables

                	
                  15

                
	
                   Section
                    4.4

                	
                   [RESERVED]

                	
                  16

                
	
                   Section
                    4.5

                	
                   Maintenance
                    of Security Interests

                	
                  16

                
	
                   Section
                    4.6

                	
                   Additional
                    Covenants of Servicer

                	
                  17

                
	
                   Section
                    4.7

                	
                   Purchase
                    of Receivables Upon Breach of Covenant

                	
                  18

                
	
                   Section
                    4.8

                	
                   Servicing
                    Fee

                	
                  18

                
	
                   Section
                    4.9

                	
                   Servicer’s
                    Certificate

                	
                  19

                
	
                   Section
                    4.10

                	
                   Annual
                    Statement as to Compliance, Notice of Servicer Termination
                    Event

                	
                  19

                
	
                   Section
                    4.11

                	
                   Independent
                    Accountants’ Reports

                	
                  19

                
	
                   Section
                    4.12

                	
                   Independent
                    Accountants’ Review of Receivables File

                	
                  20

                
	
                   Section
                    4.13

                	
                   Report
                    on Proceedings and Servicer Termination Event

                	
                  20

                
	
                   Section
                    4.14

                	
                   Access
                    to Certain Documentation and Information Regarding
                    Receivables

                	
                  20

                
	
                   Section
                    4.15

                	
                   Verification
                    of Servicer’s Certificate

                	
                  20

                
	
                   Section
                    4.16

                	
                   [RESERVED]

                	
                  22

                
	
                   Section
                    4.17

                	
                   Fidelity
                    Bond and Errors and Omissions Insurance

                	
                  22

                
	
                   Section
                    4.18

                	
                   Lien
                    Searches; Opinions as to Transfers and Security Interests

                	
                  22

                
	
                   Section
                    4.19

                	
                   Subservicing
                    Arrangements

                	
                  23

                
	 	 	 
	
                  Article
                    V ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDER

                	
                  23

                
	 	 
	
                   Section
                    5.1

                	
                   Establishment
                    of Pledged Accounts

                	
                  23

                
	
                   Section
                    5.2

                	
                   [RESERVED]

                	
                  25

                
	
                   Section
                    5.3

                	
                   Certain
                    Reimbursements to the Servicer

                	
                  25

                
	
                   Section
                    5.4

                	
                   [RESERVED]

                	
                  25

                
	
                   Section
                    5.5

                	
                   Reserve
                    Account

                	
                  25

                
	
                   Section
                    5.6

                	
                   Additional
                    Deposits

                	
                  26

                
	
                   Section
                    5.7

                	
                   Distributions

                	
                  26

                
	
                   Section
                    5.8

                	
                   Note
                    Distribution Account

                	
                  27

                
	
                   Section
                    5.9

                	
                   Statements
                    to the Noteholder

                	
                  28

                
	 	 	 
	
                  Article
                    VI [RESERVED]

                	
                  29

                
	 	 
	
                  Article
                    VII THE PURCHASER

                	
                  29

                
	 	 
	
                   Section
                    7.1

                	
                   Representations
                    of Purchaser

                	
                  29

                
	 	 	 
	
                  Article
                    VIII THE SELLER

                	
                  30

                


        

        


        
          
            
            

          

          
            iii

            
              

            

          

          
            
            

          

        

        


        
          	
                   Section
                    8.1

                	
                   Representations
                    of Seller

                	
                  30

                
	
                   Section
                    8.2

                	
                   Additional
                    Covenants of the Seller

                	
                  33

                
	
                   Section
                    8.3

                	
                   Liability
                    of Seller; Indemnities

                	
                  35

                
	
                   Section
                    8.4

                	
                   Merger
                    or Consolidation of Seller

                	
                  36

                
	
                   Section
                    8.5

                	
                   Limitation
                    on Liability of Seller and Others

                	
                  36

                
	 	 	 
	
                  Article
                    IX THE SERVICER

                	
                  36

                
	 	 
	
                   Section
                    9.1

                	
                   Representations
                    of Servicer

                	
                  36

                
	
                   Section
                    9.2

                	
                   Liability
                    of Servicer; Indemnities

                	
                  39

                
	
                   Section
                    9.3

                	
                   Merger
                    or Consolidation of the Servicer or Backup Servicer, and Assumption
                    of
                    the

                	 
	 	 	 
	
                   Obligations
                    of the Backup Servicer

                	
                  40

                
	 	 
	
                   Section
                    9.4

                	
                   [RESERVED]

                	
                  40

                
	
                   Section
                    9.5

                	
                   [RESERVED]

                	
                  40

                
	
                   Section
                    9.6

                	
                   Servicer
                    and Backup Servicer Not to Resign

                	
                  41

                
	
                   Section
                    9.7

                	
                   Reporting
                    Requirements

                	
                  41

                
	 	 	 
	
                  Article
                    X DEFAULT

                	
                  41

                
	 	 
	
                   Section
                    10.1

                	
                   Servicer
                    Termination Events

                	
                  41

                
	
                   Section
                    10.2

                	
                   Consequences
                    of a Servicer Termination Event

                	
                  43

                
	
                   Section
                    10.3

                	
                   Appointment
                    of Successor

                	
                  44

                
	
                   Section
                    10.4

                	
                   Notification
                    of Termination and Appointment

                	
                  45

                
	
                   Section
                    10.5

                	
                   Waiver
                    of Past Defaults

                	
                  45

                
	
                   Section
                    10.6

                	
                   Action
                    Upon Certain Failures of the Servicer

                	
                  45

                
	
                   Section
                    10.7

                	
                   Continued
                    Errors

                	
                  45

                
	 	 	 
	
                  Article
                    XI MISCELLANEOUS PROVISIONS

                	
                  45

                
	 	 
	
                   Section
                    11.1

                	
                   Amendment

                	
                  45

                
	
                   Section
                    11.2

                	
                   Protection
                    of Title to Property.
                    (a)

                	
                  46

                
	
                   Section
                    11.4

                	
                   Assignment

                	
                  48

                
	
                   Section
                    11.5

                	
                   Limitations
                    on Rights of Others

                	
                  48

                
	
                   Section
                    11.6

                	
                   Severability

                	
                  48

                
	
                   Section
                    11.7

                	
                   Separate
                    Counterparts

                	
                  48

                
	
                   Section
                    11.8

                	
                   Headings

                	
                  48

                
	
                   Section
                    11.9

                	
                   Governing
                    Law

                	
                  48

                
	
                   Section
                    11.10

                	
                   Assignment
                    to Trustee

                	
                  48

                
	
                   Section
                    11.11

                	
                   Nonpetition
                    Covenants

                	
                  48

                
	
                   Section
                    11.12

                	
                   Limitation
                    of Liability of Trustee

                	
                  49

                
	
                   Section
                    11.13

                	
                   Independence
                    of the Servicer

                	
                  49

                
	
                   Section
                    11.14

                	
                   No
                    Joint Venture

                	
                  49

                
	
                   Section
                    11.15

                	
                   Intention
                    of Parties Regarding Delaware Securitization Act

                	
                  49

                
	
                   Section
                    11.16

                	
                   Special
                    Supplemental Agreement

                	
                  49

                
	
                   Section
                    11.17

                	
                   Limited
                    Recourse

                	
                  49

                
	
                   Section
                    11.18

                	
                   Acknowledgement
                    of Roles

                	
                  50

                
	
                   Section
                    11.19

                	
                   Termination

                	
                  50

                
	
                   Section
                    11.20

                	
                   Submission
                    to Jurisdiction

                	
                  50

                
	
                   Section
                    11.21

                	
                   Waiver
                    of Trial by Jury

                	
                  50

                
	
                   Section
                    11.22

                	
                   Process
                    Agent

                	
                  50

                
	
                   Section
                    11.23

                	
                   No
                    Set-Off

                	
                  51

                
	
                   Section
                    11.24

                	
                   No
                    Waiver; Cumulative Remedies

                	
                  51

                
	
                   Section
                    11.25

                	
                   Merger
                    and Integration

                	
                  51

                


        

         

        
          
            
            

          

          
            iii

            
              

            

          

          
            
            

          

        

      

    


    SCHEDULES

    


    
      	
              Schedule
                A

            	
              -

            	
              [Intentionally
                Omitted]

            


    

    
      	
              Schedule
                B

            	
              -

            	
              Location
                for Delivery of Timeshare Loan
                Files

            


    

    
      	
              Schedule
                C

            	
              -

            	
              Form
                of Trial Balance Report/Delinquency
                Report

            


      	 	 	 


      	EXHIBITS 	 	 


      	 	 	 


      	Exhibit A 	
              - 

            	Form of Servicer’s
              Certificate 


      	Exhibit B 	
              - 

            	Eligibility Criteria 


      	Exhibit C 	
              - 

            	Form of Assignment 


      	Exhibit D 	
              - 

            	Form of Addition Notice 


      	Exhibit E 	
              - 

            	ACH Form 


      	Exhibit F 	
              - 

            	List of Silverleaf Executive
              Management 


      	Exhibit G 	
              - 

            	Record Layout 


      	Exhibit H 	
              - 

            	Servicer’s Monthly Representation
              Certificate 


      	Exhibit I 	
              - 

            	Escrow Agent Wiring
              Instructions  


      	Exhibit J 	
              - 

            	Form of Waiver Letter 


      	Exhibit K 	
              - 

            	Credit Policy/Collection
              Policy 


      	Exhibit L 	
              - 

            	Form of Notice of Non-Titled
              Loans 


      	 	 	 


      	ANNEXES 	 	 


      	 	 	 


      	Annex A 	- 	Amended and Restated Defined
              Terms 


    

     

    
      
        
        

      

      
        iv

        
          

        

      

      
        
        

      

    


    AMENDED
      AND RESTATED SALE AND SERVICING AGREEMENT (as amended, supplemented or otherwise
      modified from time to time, this “Agreement”) dated as of December 22, 2006,
      among SILVERLEAF FINANCE IV, LLC, a Delaware limited liability company (the
      “Purchaser”), SILVERLEAF RESORTS, INC., a Texas corporation (in its capacities
      as Seller, the “Seller” and as Servicer, the “Servicer,” respectively), WELLS
      FARGO BANK, NATIONAL ASSOCIATION, a national banking association (in its
      capacities as Backup Servicer, the “Backup Servicer,” as Trustee, the “Trustee,”
and as Account Intermediary, the “Account Intermediary”). 

    


    WHEREAS,
      the parties hereto agree to amend and restate in its entirety that certain
      Sale
      and Servicing Agreement, dated as of March 2, 2006, among the Purchaser, the
      Seller, the Servicer, the Backup Servicer, the Trustee and the Account
      Intermediary; 

    


    WHEREAS,
      the Purchaser desires to purchase, from time to time, a portfolio of receivables
      arising in connection with the sales of vacation ownership interests by
      Silverleaf Resorts, Inc.;

    


    WHEREAS,
      the Purchaser intends to finance such purchases by issuing the Note, secured
      by
      the Receivables and the Other Conveyed Property, pursuant to the Indenture
      (as
      defined below);

    


    WHEREAS,
      the Seller is willing to sell such Receivables and the Other Conveyed Property
      to the Purchaser from time to time; and

    


    WHEREAS,
      the Servicer is willing to service all such Receivables and related Other
      Conveyed Property.

    


    NOW,
      THEREFORE, in consideration of the premises and the mutual covenants herein
      contained, the parties hereto agree as follows:

    


    ARTICLE
      I

    


    DEFINITIONS

     

    Section
      1.1 Definitions.
      Capitalized
      terms used in this Agreement and not otherwise defined in this Agreement, shall
      have the meanings set forth in Annex A attached hereto.

     

    Section
      1.2 Other
      Definitional Provisions.

    


    (a) All
      terms
      defined in this Agreement shall have the defined meanings when used in any
      instrument governed hereby and in any certificate or other document made or
      delivered pursuant hereto unless otherwise defined therein.

    


    (b) Accounting
      terms used but not defined or partly defined in this Agreement, in any
      instrument governed hereby or in any certificate or other document made or
      delivered pursuant hereto, to the extent not defined, shall have the respective
      meanings given to them under U.S. generally accepted accounting principles
      as in
      effect on the date of this Agreement or any such instrument, certificate or
      other document, as applicable. To the extent that the definitions of accounting
      terms in this Agreement or in any such instrument, certificate or other document
      are inconsistent with the meanings of such terms under U.S. generally accepted
      accounting principles, the definitions contained in this Agreement or in any
      such instrument, certificate or other document shall control.

    


    (c) The
      words
“hereof,”
      “herein,”
      “hereunder”
and
      words of similar import when used in this Agreement shall refer to this
      Agreement as a whole and not to any particular provision of this
      Agreement.

    


    (d) Section,
      Schedule and Exhibit references contained in this Agreement are references
      to
      Sections, Schedules and Exhibits in or to this Agreement unless otherwise
      specified; and the term “including”
shall
      mean “including
      without limitation.”

    


    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

       

    

    (e) The
      definitions contained in this Agreement are applicable to the singular as well
      as the plural forms of such terms and to the masculine as well as to the
      feminine and neuter genders of such terms.

    


    (f) Any
      agreement, instrument or statute defined or referred to herein or in any
      instrument or certificate delivered in connection herewith means such agreement,
      instrument or statute as the same may from time to time be amended, modified
      or
      supplemented and includes (in the case of agreements or instruments) references
      to all attachments and instruments associated therewith; all references to
      a
      Person include its permitted successors and assigns.

     

    Section
      1.3 Calculations.
      Other
      than as expressly set forth herein or in any of the other Basic Documents,
      all
      calculations of the amount of the Servicing Fee, Backup Servicing Fee and the
      Trustee Fee shall be made on the basis of a 360-day year consisting of twelve
      30-day months. All calculations of the Commitment Fee and the Noteholder’s
      Monthly Interest Distributable Amount shall be made on the basis of the actual
      number of days in the Accrual Period or Interest Period, as applicable, and
      360
      days in the calendar year. All references to the Principal Balance of a
      Receivable as of any day shall refer to the close of business on such
      day.

     

    Section
      1.4 Material
      Adverse Effect.
      Whenever
      a determination is to be made under this Agreement whether a breach of a
      representation, warranty or covenant has or could have a material adverse effect
      on a Receivable, Other Conveyed Property or the interest therein of the
      Purchaser and the Noteholder (or any similar or analogous determination), such
      determination shall be made by the Noteholder in its sole and reasonable
      discretion.

    


    ARTICLE
      II

    


    CONVEYANCE
      OF RECEIVABLES

     

    Section
      2.1 Conveyance
      of Receivables

    


    (a) In
      consideration of the Purchaser’s delivery to or upon the order of the Seller on
      any Funding Date of the Purchase Price therefor, the Seller does hereby sell,
      transfer, assign, set over and otherwise convey to the Purchaser, without
      recourse (subject to the obligations set forth herein) all right, title and
      interest of the Seller, whether now existing or hereafter arising, in, to and
      under:

    


    (i)the
      Receivables listed in the Schedule of Receivables from time to
      time;

    


    (ii)Timeshare
      Loans relating to the Receivables and all monies received under the Receivables
      and the Timeshare Loans on and after the related Cutoff Date and all Net
      Liquidation Proceeds received with respect to the Receivables and the Timeshare
      Loans after the related Cutoff Date;

    


    (iii)with
      respect to any Timeshare Loan, all of the Seller’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
      Documents;

    


    (iv)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;

    


    (v)all
      guarantees, insurance and other agreements or arrangements of whatever character
      from time to time supporting or securing payment of such Timeshare Loan and
      all
      proceeds thereof (including, but not limited to, any insurance proceeds to
      the
      extent they are not used to rebuild or repair a Unit);

    


    (vi)Reserved;

    


    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    (vii)the
      Timeshare Loan File related to each Receivable and all other security and books,
      records and computer tapes relating to the foregoing;

    


    (viii)all
      amounts and property from time to time held in or credited to the Collection
      Account or the Lockbox Account;

    


    (ix)all
      property (including the right to receive future Net Liquidation Proceeds) that
      secures a Receivable that has been acquired by or on behalf of the Purchaser
      pursuant to a liquidation of such Receivable; and

    


    (x)all
      present and future claims, demands, causes and choses in action in respect
      of
      any or all of the foregoing and all payments on or under and all proceeds of
      every kind and nature whatsoever in respect of any or all of the foregoing,
      including all proceeds of the conversion, voluntary or involuntary, into cash
      or
      other liquid property, all cash proceeds, accounts, accounts receivable, notes,
      drafts, acceptances, chattel paper, checks, deposit accounts, insurance
      proceeds, condemnation awards, rights to payment of any and every kind and
      other
      forms of obligations and receivables, instruments and other property which
      at
      any time constitute all or part of or are included in the proceeds of any of
      the
      foregoing.

    


    (b) The
      Seller shall transfer to the Purchaser the Receivables and the other property
      and rights related thereto described in paragraph
      (a)
      above
      only upon the satisfaction of each of the conditions set forth below on or
      prior
      to the related Funding Date. In addition to constituting conditions precedent
      to
      any purchase hereunder and under each Assignment, the following shall also
      be
      conditions precedent to any Advance on any Funding Date under the terms of
      the
      Note Purchase Agreement:

    


    (i)the
      Seller shall have provided the Purchaser, the Trustee and the Noteholder with
      an
      Addition Notice substantially in the form of Exhibit
      D
      hereto
      (which shall include supplements to the Schedule of Receivables) not later
      than
      three Business Days prior to such Funding Date and shall have provided any
      information reasonably requested by any of the foregoing with respect to the
      Related Receivables;

    


    (ii)the
      Seller shall, to the extent required by Section
      4.2
      of this
      Agreement, have deposited in the Collection Account all collections received
      after the Cutoff Date in respect of the Related Receivables to be purchased
      on
      such Funding Date;

    


    (iii)as
      of
      each Funding Date, (A) the Seller shall not be insolvent and shall not become
      insolvent as a result of the transfer of Related Receivables on such Funding
      Date, (B) the Seller shall not intend to incur or believe that it shall incur
      debts that would be beyond its ability to pay as such debts mature, (C) such
      transfer shall not have been made with actual intent to hinder, delay or defraud
      any Person and (D) the assets of the Seller shall not constitute unreasonably
      small capital to carry out its business as then conducted;

    


    (iv)the
      Facility Termination Date shall not have occurred;

    


    (v)the
      Servicer shall have established one or more Lockbox Accounts acceptable to
      the
      Noteholder;

    


    (vi)each
      of
      the representations and warranties made by the Seller pursuant to Section
      3.1
      and the
      other Basic Documents with respect to the Related Receivables to be purchased
      on
      such Funding Date shall be true and correct as of the related Funding Date
      and
      the Seller shall have performed all obligations to be performed by it hereunder
      or in any Assignment on or prior to such Funding Date;

    


    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    (vii)the
      Seller shall, at its own expense, on or prior to the Funding Date, indicate
      in
      its computer files that the Related Receivables to be purchased on such Funding
      Date have been sold to the Purchaser pursuant to this Agreement or an
      Assignment, as applicable;

    


    (viii)the
      Seller shall have taken any action required to maintain (i) the first priority
      perfected ownership interest of the Purchaser in the Related Receivables and
      Other Conveyed Property and (ii) the first priority perfected security interest
      of the Trustee in the Collateral;

    


    (ix)no
      selection procedures adverse to the interests of the Noteholder shall have
      been
      utilized in selecting the Related Receivables to be sold on such Funding
      Date;

    


    (x)the
      addition of any such Related Receivables to be purchased on such Funding Date
      shall not result in a material adverse tax consequence to the Noteholder or
      the
      Purchaser;

    


    (xi)the
      Seller shall have delivered to the Noteholder and the Trustee an Officers’
Certificate confirming the satisfaction of each condition precedent specified
      in
      this paragraph (b);

    


    (xii)no
      Funding Termination Event, Servicer Termination Event, Event of Default or
      any
      event that, with the giving of notice or the passage of time, would constitute
      a
      Funding Termination Event, or Servicer Termination Event or Event of Default,
      shall have occurred and be continuing;

    


    (xiii)the
      Custodian shall have confirmed receipt of the related Timeshare Loan File (with
      the exception of the original mortgagee title insurance policy or master policy
      referencing each Timeshare Loan and covering Silverleaf Resorts, Inc., its
      successors and assigns, which shall be delivered by the Escrow Agent within
      90
      days of the related Funding Date, except with respect to any Non-Titled Loans,
      as described in Section
      3.1(a)(xxvii)
      below),
      for each Related Receivable included in the Borrowing Base calculation and
      shall
      have delivered a copy to the Noteholder, the Servicer and the Trustee of a
      Trust
      Receipt with respect to the Timeshare Loan Files related to the Related
      Receivables to be purchased on such Funding Date; 

    


    (xiv)the
      Seller shall have filed or caused to be filed all necessary UCC-l financing
      statements (or amendments thereto) necessary to maintain (in each case assuming
      for purposes of this clause (xiv) that such perfection may be achieved by making
      the appropriate filings), or taken any other steps necessary to maintain, (1)
      the first, priority, perfected ownership interest of Purchaser and (2) the
      first
      priority, perfected security interest of the Trustee, with respect to the
      Related Receivables and Other Conveyed Property and the Collateral, respectively
      to be transferred on such Funding Date;

    


    (xv)the
      Seller shall have executed and delivered to the Purchaser and the Noteholder
      an
      Assignment in the form of Exhibit C; 

    


    (xvi)the
      Noteholder Excess Principal Event Date shall not have occurred; 

    


    (xvii)each
      of
      the Escrow Agent and Custodian shall have delivered its respective
      certifications in accordance with the Escrow Agreement; 

    


    (xviii)each
      of
      the conditions precedent to such Advance set forth in the Indenture and the
      Note
      Purchase Agreement shall have been satisfied; and

    


    (xix)the
      Structuring Fee shall have been paid to the Noteholder in full. 

    


    Unless
      waived by the Noteholder in writing, the Seller covenants that in the event
      any
      of the foregoing conditions precedent are not satisfied with respect to any
      Related Receivable on the date required as specified above, the Seller will
      immediately repurchase such Related Receivable from the Purchaser, at a price
      equal to the Purchase Amount thereof, in the manner specified in Section
      3.2
      and
Section
      4.7.
      The
      Trustee may rely on the accuracy of the Officers’ Certificate delivered pursuant
      to item
      (xi)
      above
      without independent inquiry or verification.

    


    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    (c) Payment
      of Purchase Price.
      In
      consideration for the sale of the Related Receivables and Other Conveyed
      Property described in Section
      2.1(a)
      or the
      related Assignment, the Purchaser shall, on each Funding Date on which Related
      Receivables are transferred hereunder, pay to or upon the order of the Seller
      the applicable Purchase Price in the following manner: (i) cash in an amount
      equal to the amount of the Advance received by the Purchaser under the Note
      on
      such Funding Date and (ii) to the extent the Purchase Price for the related
      Receivables and Other Conveyed Property exceeds the amount of cash described
      in
      (i), such excess shall be treated as a capital contribution by the Seller to
      the
      Purchaser. On any Funding Date on which funds are on deposit in the Principal
      Funding Account, the Purchaser may direct the Trustee to withdraw therefrom
      an
      amount equal to the lesser of (i) the Purchase Price to be paid to the Seller
      for Related Receivables and Other Conveyed Property to be conveyed to the
      Purchaser and pledged to the Trustee on such Funding Date (or a portion thereof)
      and (ii) the amount on deposit in the Principal Funding Account, and, subject
      to
      the satisfaction of the conditions set forth in Section
      2.1(b)
      after
      giving effect to such withdrawal, in consideration for the sale of the Related
      Receivables and Other Conveyed Property on such Funding Date, pay such amount
      to
      the Escrow Agent pursuant to the wiring instructions set forth on Exhibit
      I
      (which
      wiring instructions may be updated from time to time by the Escrow Agent),
      which
      amount will be disbursed by the Escrow Agent in accordance with the Escrow
      Agreement.

     

    Section
      2.2 Transfers
      Intended as Sale.
      It
      is the
      intention of the Seller that each transfer and assignment contemplated by this
      Agreement and each Assignment shall constitute a sale of the Related Receivables
      and Other Conveyed Property from the Seller to the Purchaser free and clear
      of
      all liens and rights of others and it is intended that the beneficial interest
      in and title to the Related Receivables and Other Conveyed Property shall not
      be
      part of the Seller’s estate in the event of the filing of a bankruptcy petition
      by or against the Seller under any bankruptcy law. In the event that,
      notwithstanding the intent of the Seller, the transfer and assignment
      contemplated hereby or by any Assignment is held not to be a sale, this
      Agreement and each Assignment shall constitute a security agreement and a grant
      of a security interest in the property referred to in Section
      2.1
      and each
      Assignment to the Purchaser, which security interest has been assigned to the
      Trustee, acting on behalf of the Noteholder.

     

    Section
      2.3 Further
      Encumbrance of Receivables and Other Conveyed Property.

    


    (a) Immediately
      upon the conveyance to the Purchaser by the Seller of the Related Receivables
      and any item of the related Other Conveyed Property pursuant to Section
      2.1
      and the
      related Assignment, all right, title and interest of the Seller in and to such
      Related Receivables and Other Conveyed Property shall terminate, and all such
      right, title and interest shall vest in the Purchaser.

    


    (b) Immediately
      upon the vesting of any Related Receivables and the related Other Conveyed
      Property in the Purchaser, the Purchaser shall have the sole right to pledge
      or
      otherwise encumber such Related Receivables and the related Other Conveyed
      Property. Pursuant to the Indenture, the Purchaser shall grant a security
      interest in the Collateral to secure the repayment of the Note.

    


    (c) The
      Trustee shall, at such time as (i) the Facility Termination Date has occurred,
      (ii) there is no Note outstanding and (iii) all sums due to the Trustee and
      the
      Noteholder pursuant to the Basic Documents have been paid, release any remaining
      portion of the Receivables and the Other Conveyed Property to the
      Purchaser.

    


    ARTICLE
      III

    


    THE
      RECEIVABLES

     

    Section
      3.1 Representations,
      Warranties and Certain Covenants of Seller.

    


    (a) The
      Seller makes the following representations and warranties as to the Receivables
      and the Other Conveyed Property to the Purchaser and to the Trustee for the
      benefit of the Noteholder on which the Purchaser relies in acquiring the
      Receivables and the Other Conveyed Property and on which the Noteholder has
      relied in purchasing the Note and will rely in paying the Advance Amount to
      the
      Purchaser. Such representations and warranties speak as of the Closing Date
      and
      as of each Funding Date; provided
      that to
      the extent such representations and warranties relate to the Related Receivables
      conveyed on any Funding Date, such representations and warranties shall speak
      as
      of the related Funding Date, but shall survive the sale, transfer and assignment
      of such Related Receivables to the Purchaser and the pledge thereof by the
      Purchaser to the Trustee for the benefit of the Noteholder pursuant to the
      Indenture.

    


    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    (i)Characteristics
      of Receivables.
      Each
      Receivable is related to, and payable pursuant to, an Eligible Timeshare
      Loan.

    


    (ii)Additional
      Receivables Characteristics.
      As of
      the related Funding Date, as applicable:

    


    (A) after
      the
      pledge of each Related Receivable pursuant to the Indenture, the Net Spread
      shall not be less than 5.0%; 

    


    (B) after
      the
      pledge of each Related Receivable pursuant to the Indenture, the weighted
      average Timeshare Loan Rate of all the Eligible Timeshare Loans shall be no
      less
      than 15% and the weighted average original term to maturity of all the Eligible
      Timeshare Loans shall not exceed 108 months; and

    


    (C) after
      the
      pledge of each Related Receivable pursuant to the Indenture, the Aggregate
      Principal Balance of Eligible Timeshare Loans with a related Obligor having
      a
      FICO score of greater than or equal to 500 and less than 600 as of the date
      of
      origination of such Timeshare Loan shall not exceed 20% of the Aggregate
      Principal Balance of all Eligible Receivables.

    


    (iii)Schedule
      of Receivables.
      The
      information with respect to the Related Receivables set forth in Schedule A
      to
      the related Assignment is true and correct in all material respects as of the
      close of business on the related Cutoff Date, and no selection procedures
      adverse to the Noteholder have been utilized in selecting the Related
      Receivables to be sold hereunder.

    


    (iv)No
      Government Obligor.
      None of
      the Related Receivables are due from the United States of America or any State
      or from any agency, department, or instrumentality of the United States of
      America or any State.

    


    (v)Security
      Interest.
      Immediately subsequent to the sale, assignment and transfer thereof to the
      Purchaser, each Related Receivable shall be secured by a validly perfected
      first
      priority security interest in the related Timeshare Property in favor of the
      Seller as secured party which has been validly assigned to the Purchaser, and
      such assigned security interest is prior to all other liens upon and security
      interests in such Timeshare Property which now exist or may hereafter arise
      or
      be created.

    


    (vi)Servicemembers.
      No
      Related Receivable has been modified as a result of application of the
      Servicemembers Civil Relief Act, as amended.

    


    (vii)Title.
      It is
      the intention of the Seller that each transfer and assignment herein
      contemplated constitutes a sale of the Related Receivables and the related
      Other
      Conveyed Property from the Seller to the Purchaser and that the beneficial
      interest in and title to such Related Receivables and related Other Conveyed
      Property not be part of the Seller’s estate in the event of the filing of a
      bankruptcy petition by or against the Seller under any bankruptcy law. No
      Related Receivable or related Other Conveyed Property has been sold,
      transferred, assigned, or pledged by the Seller to any Person other than the
      Purchaser and by the Purchaser to any Person other than the Trustee. Immediately
      prior to each transfer and assignment herein contemplated, the Seller had good
      and marketable title to each Related Receivable and related Other Conveyed
      Property and was the sole owner thereof, free and clear of all liens, claims,
      encumbrances, security interests, and rights of others, and, immediately upon
      the transfer thereof to the Purchaser and the concurrent pledge to the Trustee
      under the Indenture, the Trustee for the benefit of the Noteholder shall have
      a
      valid and enforceable first priority security interest in the Collateral, free
      and clear of all liens, encumbrances, security interests, and rights of others,
      and such transfer has been perfected under the UCC and all other applicable
      law.

    


    (viii)Lawful
      Assignment.
      No
      Related Receivable has been originated in, or is subject to the laws of, any
      jurisdiction under which the sale, transfer, and assignment of such Related
      Receivable under this Agreement or pursuant to transfers of the Note shall
      be
      unlawful, void, or voidable. None of the Seller or any Affiliate thereof has
      entered into any agreement with any account debtor that prohibits, restricts
      or
      conditions the assignment of any portion of the Related
      Receivables.

    


    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    (ix)All
      Filings Made.
      All
      filings (including, without limitation, UCC filings or other actions) necessary
      in any jurisdiction to give: (a) the Purchaser a first priority perfected
      ownership interest in the Receivables and the Other Conveyed Property,
      including, without limitation, the proceeds of the Receivables (to the extent
      that the Purchaser can obtain such first priority perfected security interest
      pursuant to one or more filings) and (b) the Trustee, for the benefit of the
      Noteholder, a first priority perfected security interest in the Collateral
      have
      been made, taken or performed.

    


    (x)Timeshare
      Loan File; One Original.
      The
      Seller has delivered to the Trustee, at the location specified in Schedule
      B
      hereto,
      a complete Timeshare Loan File with respect to each Related Receivable, and
      the
      Custodian has delivered to the Trustee, the Servicer, the Purchaser and the
      Noteholder a copy of the Trust Receipt therefor. There is only one original
      executed copy of each Timeshare Loan Document.

    


    (xi)Post-Office
      Box.
      On or
      prior to the next billing period after the related Cutoff Date, the Servicer
      will notify each Obligor to make payments with respect to its respective Related
      Receivables after the related Cutoff Date directly to the Post-Office Box,
      and
      will provide each Obligor with a monthly statement in order to enable such
      Obligor to make payments directly to the Post-Office Box.

    


    (xii)No
      Impairment.
      Neither
      Seller nor the Purchaser has done anything to convey any right to any Person
      that would result in such Person having a right to payments due under any
      Related Receivables, related Other Conveyed Property or otherwise to impair
      the
      rights of the Purchaser, the Trustee or the Noteholder in any Related
      Receivable, related Other Conveyed Property or the proceeds
      thereof.

    


    (xiii)Creation
      of Security Interest.
      This
      Agreement creates a valid and continuing security interest (as defined in the
      UCC) in the Receivables and the Other Conveyed Property in favor of the
      Purchaser, which security interest is prior to all other Liens and is
      enforceable as such as against creditors of and purchasers from the
      Seller.

    


    (xiv)Perfection
      of Security Interest in the Receivables and Other Conveyed
      Property.
      The
      Seller has caused the filing of all appropriate financing statements in the
      proper filing office in the appropriate jurisdictions under applicable law
      in
      order to perfect the security interest in the Receivables and the Other Conveyed
      Property granted to the Purchaser hereunder pursuant to Section
      2.1
      and the
      related Assignment.

    


    (xv)No
      Other Security Interests.
      Other
      than the security interest granted to the Purchaser pursuant to Section
      2.1
      and the
      related Assignment, the Seller has not pledged, assigned, sold, granted a
      security interest in, or otherwise conveyed any of the Receivables or the Other
      Conveyed Property, other than such security interests as are released at or
      before the conveyance thereof. The Seller has not authorized the filing of
      and
      is not aware of any financing statements filed against the Seller that include
      a
      description of collateral covering any portion of the Receivables and the Other
      Conveyed Property other than any financing statement relating to the security
      interest granted to the Purchaser hereunder or that has been terminated or
      released as to the Receivables and the Other Conveyed Property. The Seller
      is
      not aware of any judgment or tax lien filings against the Seller.

    


    
      
        
        

      

      
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    (xvi)Notations
      on Contracts; Financing Statement Disclosure.
      The
      Timeshare Loan Files that constitute or evidence the Receivables do not have
      any
      marks or notations indicating that they have been pledged, assigned or otherwise
      conveyed to any Person other than the Purchaser and/or the Trustee for the
      benefit of the Noteholder. All financing statements filed or to be filed against
      the Seller in favor of the Purchaser in connection herewith describing the
      Receivables and the Other Conveyed Property contain a statement to the following
      effect: “A purchase of or security interest in any collateral described in this
      financing statement will violate the rights of the secured party.”

    


    (xvii)Records.
      On or
      prior to each Funding Date, the Seller will have caused its records (including
      electronic ledgers) relating to each Related Receivable and Other Conveyed
      Property to be conveyed by it on such Funding Date to be clearly and
      unambiguously marked to reflect that such Related Receivable and Other Conveyed
      Property was conveyed by it to the Purchaser.

    


    (xviii)Computer
      Information.
      The
      computer diskette, computer tape or other electronic transmission made available
      by the Seller to the Purchaser on each Funding Date is, as of the related Cutoff
      Date, complete and accurate and includes a description of the same Receivables
      described in Schedule A to the related Assignment.

    


    (xix)Timeshare
      Loan Documents.
      All of
      the documents evidencing each of the Receivables and the Other Conveyed Property
      are in a form determined to be valid, binding and enforceable in the applicable
      state by the corresponding local counsel opinion issued by (I) Weinstock &
Scavo, P.C. dated as of March 2, 2006 pertaining to Georgia law matters, (II)
      Bulkley, Richardson and Gelinas, LLP dated as of March 2, 2006 pertaining to
      Massachusetts law matters, (III) Stinson Morrison Hecker LLP dated as of March
      2, 2006 pertaining to Missouri law matters, (IV) Mayer, Brown, Rowe & Maw
      LLP dated as of March 2, 2006 pertaining to Illinois law matters, (V) Meadows,
      Owens, Collier, Reed, Cousins & Blau, L.L.P. dated as of March 2, 2006
      pertaining to Texas law matters and (VI) Holland & Knight LLP dated as of
      March 2, 2006 pertaining to Florida law matters (collectively, the “Local
      Counsel Opinions”).
      

    


    (xx)Timeshare
      Marketing Materials and Disclosure Statements.
      The
      Seller has provided each of the law firms issuing the Local Counsel Opinions
      all
      of the existing marketing materials and disclosure statements in connection
      with
      the respective Resort. Moreover, no other marketing materials and disclosure
      statements exist except for those provided to the respective law firm issuing
      the Local Counsel Opinion. 

    


    (xxi)Local
      Counsel Opinions.
      The
      facts regarding the Seller, the Resorts, the Receivables, the Timeshare Loans,
      the Other Conveyed Property and related matters set forth or assumed in the
      Local Counsel Opinions are true and correct in all material
      respects.

    


    (xxii)Bankruptcy
      Opinion.
      The
      facts regarding the Seller, the Issuer, the Resorts, the receivables, the
      Timeshare Loans, the Other Conveyed Property and related matters set forth
      or
      assumed in the opinion issued by Mayer, Brown, Rowe & Maw LLP dated as of
      March 2, 2006, and the update of such opinion issued by Mayer, Brown, Rowe
&
Maw LLP dated as of December 22, 2006, pertaining to bankruptcy law matters
      are
      true and correct in all material respects.

    


    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    (xxiii)Custodial
      Files.
      The
      Seller shall, prior to the Closing Date and each Funding Date, in accordance
      with this Agreement and the Custodial Agreement, have delivered or caused the
      delivery to the Custodian a Timeshare Loan File for each Timeshare Loan, which
      Timeshare Loan File shall be complete and verified by the Custodian in
      accordance with the Custodial Agreement.

    


    (xxiv)No
      Conveyance.
      The
      Seller agrees not to convey and to ensure no party under its control conveys
      any
      interest in a Resort relating to a Receivable without obtaining the written
      consent of the Noteholder prior to such conveyance if such conveyance is
      reasonably likely to have a material adverse effect on the performance or value
      of such Receivable or related Timeshare Loan.

    


    (xxv)Escrow
      Documents and Oak N’ Spruce Financing Documents.
      Originator shall, on or prior to the ninetieth day following the date of the
      Escrow Agreement and on or prior to the ninetieth day following each Funding
      Date, deliver or cause the delivery to the Custodian the following: (I) with
      respect to a Mortgage Loan, an original recorded Assignment of Mortgage (which
      may be a part of a blanket assignment of more than one Mortgage Loan), showing
      a
      complete chain of title from the Seller to the Trustee on behalf of the
      Noteholder signed by an Authorized Officer of the Seller and each intervening
      party with evidence of proper recordation; (II) with respect to an Oak N’ Spruce
      Loan (pre-July 2004), an original recorded Mortgage and Assignment of Beneficial
      Interest with Property Description Addendum or Assignment of Beneficial Interest
      with Property Description Addendum (which may be a part of a blanket assignment
      of more than one Oak N’ Spruce Loan), showing a complete chain of title from the
      Seller to the Trustee on behalf of the Noteholder signed by an Authorized
      Officer of the Seller and each intervening party with evidence of proper
      recordation or evidence from a third party that submitted such assignment for
      recording that such assignment has been submitted for recordation; (III) with
      respect to an Oak N’ Spruce Loan (post-July 2004), a file stamped Oak N’ Spruce
      Financing Statement evidencing
      the security interest of the Trustee and its assigns in the Receivables and
      related other Conveyed Property in respect of such Oak N’ Spruce Loan by naming
      the Obligor with respect to the related Oak N’ Spruce Loan as debtor and by
      naming the Trustee on behalf of the Noteholder as the secured party/assignee,
      which
      document is authorized and completed; (IV) Title Policies (except with respect
      to the Non-Titled Loans, as set forth below in sub-section (xxvii)); and (V)
      all
      other recorded and/or filed documents provided under the Escrow
      Agreement.

    


    (xxvi)Prior
      Secured Parties’ Documents.
      In
      accordance with the Escrow Agreement, the Seller shall deliver or cause the
      delivery of (I) the Escrow Documents for each of the respective Prior Secured
      Parties to the Escrow Agent and (II) the Oak N’ Spruce Financing Documents for
      each of the respective Prior Secured Parties to the Custodian. 

    


    (xxvii)Non-Titled
      Loans.
      With
      respect to up to $10,000,000 in Aggregate Principal Amount of Mortgage Loans,
      the Seller may deliver or cause the delivery to the Custodian of Title
      Commitments within 45 days of the related Funding Date (such loans, the
“Non-Titled Loans”); provided,
      however,
      that
      following such Funding Date, the Seller shall have delivered or caused the
      delivery to the Custodian of Title Policies as follows: 

    


    (A) With
      respect to any Non-Titled Loans relating to a Resort located in the State of
      Texas, the Seller shall deliver or cause the delivery to the Custodian of a
      Title Policy with respect to each such Non-Titled Loan within 60 days of
      delivery of the related Title Commitment; and

    


    (B) With
      respect to any Non-Titled Loans relating to a Resort in any state other than
      the
      State of Texas, the Seller shall deliver or cause the delivery to the Custodian
      of a Title Policy with respect to each such Non-Titled Loan within 90 days
      of
      delivery of the related Title Commitment. 

    


    
      
        
        

      

      
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    Upon
      the
      Custodian’s receipt of the Title Policies, such documents shall be incorporated
      and treated as part of the Timeshare Loan Files.

    


    (xxviii)Notice
      of Non-Titled Loans.
      On or
      prior to each Funding Date, the Seller shall deliver or cause the delivery
      to
      the Custodian, the Trustee and the Noteholder of a notice, substantially in
      the
      form of Exhibit
      L
      hereto,
      setting forth each Non-Titled Loan conveyed to the Purchaser as of such Funding
      Date. 

     

    Section
      3.2 Repurchases
      and Substitutions.

    


    (a) Mandatory
      Repurchases and Substitutions for Breach of Representations and
      Warranties.
      

    


    (i) 
      The
      Seller, the Servicer, the Noteholder or the Trustee, as the case may be, shall
      inform the other parties to this Agreement (and the Noteholder, if it is not
      the
      notifying party) promptly, in writing, upon the discovery of any breach of
      the
      Seller’s representations, warranties or covenants made pursuant to Section
      3.1
      (without
      regard to any limitations therein as to the Seller’s knowledge). Except with
      respect to any breach of Section
      3.1(a)(xxvii)
      above
      (which breach shall be treated as set forth in Section
      3.2(e)
      below),
      unless the breach shall have been cured by the last day of the next Accrual
      Period following the earlier of the discovery thereof by the Seller or receipt
      by the Seller of notice of such breach, if the value of such Receivable is
      materially and adversely affected by the breach the Seller shall, on or prior
      to
      such last day of the next Accrual Period, either (i) repurchase such Receivable
      and related Other Conveyed Property from the Purchaser or its assignee for
      the
      Purchase Amount or (ii) provide one or more Qualified Substitute Timeshare
      Receivables and related Other Conveyed Property and pay the related Substitution
      Shortfall Amounts, if any. In consideration of the repurchase or substitution
      of
      any such Receivable, the Seller shall remit the Purchase Amount or the
      Substitution Shortfall Amount, as applicable, in the manner specified in
Section
      5.6.
      The
      sole remedy of the Purchaser, the Trustee or the Noteholder with respect to
      a
      breach of representations, warranties or covenants pursuant to Section
      3.1
      shall be
      to enforce the Seller’s obligation to purchase or substitute such Receivables;
provided,
      however,
      that
      the Seller shall indemnify the Trustee, the Backup Servicer, the Purchaser
      and
      the Noteholder against all costs, expenses, losses, damages, claims and
      liabilities, including reasonable fees and expenses of counsel, arising out
      of
      the events or facts giving rise to such breach. Upon receipt of the Purchase
      Amount or a Qualified Substitute Timeshare Receivable and the related
      Substitution Shortfall Amount, as applicable, in respect of any Defective
      Receivables and written instructions from the Servicer, the Trustee shall
      release to the Seller or its designee the related Timeshare Loan File and shall
      execute and deliver all reasonable instruments of transfer or assignment,
      without recourse, as are prepared by the Seller and delivered to the Trustee
      and
      necessary to vest in the Seller or such designee title to such Defective
      Receivables.

    


    (ii) Prior
      to
      the related date of substitution (the “Substitution
      Date”)
      in
      accordance with clause (a) above, the Purchaser hereby directs and the Seller
      hereby agrees to deliver or to cause the delivery of the Timeshare Loan Files
      of
      the related Qualified Substitute Timeshare Receivables to the Custodian, in
      accordance with the provisions of the Indenture, the Custodial Agreement and
      the
      Escrow Agreement, as applicable. As of such related Substitution Date, the
      Seller does hereby sell, transfer, assign, set over and otherwise convey to
      the
      Issuer, without recourse (subject to the obligation set forth herein), all
      right, title and interest of the Seller, whether then existing or thereafter
      arising, in, to and under (i) each Qualified Substitute Timeshare Receivable
      conveyed to the Purchaser on such Substitution Date and all amounts due
      thereunder after the related Cutoff Date, (ii) the related Qualified Substitute
      Timeshare Loans, (iii) the related Timeshare Loan Documents (excluding any
      rights as developer or declarant under the Timeshare Declaration, the Timeshare
      Program Consumer Documents or the Timeshare Program Governing Documents), (iv)
      all Other Conveyed Property in respect of such Qualified Substitute Timeshare
      Receivables, and (v) all income, payments, proceeds and other benefits and
      rights related to any of the foregoing. Upon such sale and/or contribution,
      the
      ownership of each Qualified Substitute Timeshare Receivable and all collections
      allocable to principal and interest thereon since the related Cutoff Date and
      all other property interests or rights conveyed pursuant to and referenced
      in
      this Section
      3.2(a)
      shall
      immediately vest in the Purchaser, its successors and assigns. The Seller shall
      not take any action inconsistent with such ownership nor claim any ownership
      interest in any Qualified Substitute Timeshare Receivable or related Other
      Conveyed Property for any purpose whatsoever other than consolidated financial
      and federal and state income tax reporting. The Seller agrees that such
      Qualified Substitute Timeshare Receivables shall be subject to the provisions
      of
      this Agreement.

    


    
      
        
        

      

      
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    (iii) The
      Seller shall, on each related Substitution Date, certify in writing to the
      Purchaser and the Trustee that each new Timeshare Loan meets all the criteria
      of
      the definition of “Qualified Substitute Timeshare Loan” and that (i) the
      Timeshare Loan Files for such Qualified Substitute Timeshare Loans have been
      delivered to the Custodian, and (ii) the Timeshare Loan Servicing Files for
      such
      Qualified Substitute Timeshare Loans have been delivered to the
      Servicer.

    


    (b) Mandatory
      Repurchases of Upgraded Timeshare Loans.
      With
      respect to Upgraded Timeshare Loans, on any date, the Seller shall prepay such
      Upgraded Timeshare Loan on behalf of the related Obligor by depositing the
      related Upgrade Purchase Price in the Collection Account as set forth in
Section
      5.6
      hereof.


    


    (c) Optional
      Purchases of Defaulted Timeshare Loans.
      With
      respect to any Defaulted Timeshare Loans, on any date, the Seller shall have
      the
      option, but not the obligation, to purchase the Defaulted Timeshare Loan at
      the
      Default Purchase Price for such Defaulted Timeshare Loan; provided,
      however,
      that
      the option to purchase a Defaulted Timeshare Loan is limited on any date to the
      Optional Purchase Limit. If the Seller shall purchase Defaulted Timeshare Loans
      as provided herein, the Seller shall deposit the related Default Purchase Price
      in the Collection Account as set forth in Section
      5.6
      hereof.
      The Seller may irrevocably waive the Seller’s option to purchase a Defaulted
      Timeshare Loan by delivering or causing to be delivered to the Trustee a Waiver
      Letter in the form of Exhibit
      J
      attached
      hereto. The Noteholder may at any time direct the Trustee, in connection with
      any subsequent purchases of Defaulted Timeshare Loans by the Seller, to require
      the Seller to conduct a public auction in respect of any such Defaulted
      Timeshare Loan in accordance with the provisions of Section
      4.3(d)-(f)
      below.
      Upon receipt of the Default Purchase Price in respect of any Defaulted Timeshare
      Loan and written instructions from the Servicer, the Trustee shall release
      to
      the Seller or its designee the related Timeshare Loan File and shall execute
      and
      deliver all reasonable instruments of transfer or assignment, without recourse,
      as are prepared by the Seller and delivered to the Trustee and necessary to
      vest
      in the Seller or such designee title to such Defaulted Timeshare Loan and to
      release the security interest of the Trustee in such Defaulted Timeshare Loan
      and all related collateral. 

    


    (d) Optional
      Sales of Timeshare Loans by Purchaser.
      In
      addition to the provisions providing for repurchase, substitution, and optional
      purchase contained in Sections 3.2(a)-(c)
      above
      and e
      below,
      the Purchaser, acting through the Servicer, shall have the right at any time
      to
      sell any Timeshare Loans which are neither Defaulted Timeshare Loans nor relate
      to Delinquent Receivables to either an unrelated third party or to the Seller,
      for a cash purchase price that is no less than the Upgrade Purchase Price;
      provided, however, that (x) the Purchaser may not sell any Timeshare Loans
      to
      the Seller if the cash purchase price to be paid for the Timeshare Loans, when
      added to the cash purchase price paid for all other Timeshare Loans previously
      sold by the Purchaser to the Seller under this Section 3.2(d)
      exceeds
      the lesser of 7.5% of the Maximum Invested Amount or 10% of the average monthly
      Aggregate Principal Balance of all Receivables held in the Trust Estate during
      the twelve month period immediately preceding the proposed date of sale and
      (y)
      the Seller shall be under no obligation to purchase any Timeshare Loans which
      the Purchaser determines to sell under this Section
      3.2(d).
      If the
      Purchaser sells any Timeshare Loans as provided herein, the Purchaser shall
      deposit the related purchase price in the Collection Account as set forth in
      Section
      5.6
      hereof.
      Notwithstanding the foregoing, the Issuer may only exercise its right pursuant
      to this Section
      3.2(d)
      so long
      as immediately prior to each such sale and immediately after such sale, no
      Event
      of Default, Servicer Termination Event or Noteholder Excess Principal Event
      shall have occurred and be continuing and no Borrowing Base Deficiency shall
      exist. Upon receipt of the Upgrade Purchase Price in respect of any Timeshare
      Loan sold by the Purchaser, and written instructions from the Servicer, the
      Trustee shall release to the purchaser the related Timeshare Loan File and
      shall
      execute and deliver all reasonable instruments of transfer or assignment,
      without recourse, as are prepared by the Servicer and delivered to the Trustee
      and necessary to vest in such purchaser title to such Timeshare Loan and to
      release the security interest of the Trustee in such Timeshare Loan and all
      related collateral. 

    


    
      
        
        

      

      
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    (e) Mandatory
      Repurchase of Non-Titled Loans.
      With
      respect to any breach of Section
      3.1(a)(xxvii)
      above
      in respect of any Non-Titled Loan, including without limitation any Non-Titled
      Loan in respect of which: (i) no Title Commitment is delivered within 45 days
      of
      the related Funding Date upon which such Non-Titled Loan was conveyed to the
      Purchaser, (ii) no Title Policy is delivered within 60 days of delivery of
      the
      related Title Commitment, if such Non-Titled Loan relates to a Resort located
      in
      the State of Texas; or (iii) no Title Policy is delivered within 90 days of
      delivery of the related Title Commitment, if such Non-Titled Loan relates to
      a
      Resort located in any state other than the State of Texas, the Seller shall,
      within 5 Business Days, repurchase the Receivable and related Other Conveyed
      Property relating to such Non-Titled Loan from the Purchaser or its assignee
      for
      the Purchase Amount. In consideration of the repurchase of any such Receivable,
      the Seller shall remit the Purchase Amount in the manner specified in
Section
      5.6.
      The
      sole remedy of the Purchaser, the Trustee or the Noteholder with respect to
      a
      breach of the Seller’s representations pursuant to Section
      3.1(a)(xxvii)
      shall
      be to enforce the Seller’s obligation to purchase such Receivables; provided,
      however,
      that
      the Seller shall indemnify the Trustee, the Backup Servicer, the Purchaser
      and
      the Noteholder against all costs, expenses, losses, damages, claims and
      liabilities, including reasonable fees and expenses of counsel, arising out
      of
      the events or facts giving rise to such breach. Upon receipt of the Purchase
      Amount in respect of any Defective Receivables relating to Non-Titled Loans
      and
      written instructions from the Servicer, the Trustee shall release to the Seller
      or its designee the related Timeshare Loan File and shall execute and deliver
      all reasonable instruments of transfer or assignment, without recourse, as
      are
      prepared by the Seller and delivered to the Trustee and necessary to vest in
      the
      Seller or such designee title to such Defective Receivables.

     

    Section
      3.3 Custody
      of Timeshare Loan Files.

    


    (a) In
      connection with each sale, transfer and assignment of Receivables and related
      Other Conveyed Property to the Purchaser pursuant to this Agreement and each
      Assignment, and each pledge thereof by the Purchaser to the Trustee pursuant
      to
      the Indenture, the Purchaser shall deliver the related Timeshare Loan Files
      to
      the Custodian before the Closing Date or the related Funding Date in accordance
      with the Custodial Agreement.

    


    (b) Upon
      payment in full of any Receivable, the Servicer will notify the Trustee and
      the
      Custodian pursuant to a certificate of a Servicing Officer and shall request
      delivery of the related Timeshare Loan File to the Servicer in accordance with
      the Custodial Agreement.

     

    Section
      3.4 Trustee
      to Obtain Fidelity Insurance.
      The
      Trustee shall maintain a fidelity bond in the form and amount as is customary
      for entities acting as a trustee of funds and documents in respect of consumer
      contracts on behalf of institutional investors.

    


    ARTICLE
      IV

    


    ADMINISTRATION
      AND SERVICING OF RECEIVABLES

     

    Section
      4.1 Duties
      of the Servicer.
      The
      Servicer, as agent for the Purchaser and the Noteholder shall manage, service,
      administer and make collections on the Receivables and the Other Conveyed
      Property in accordance with the Servicing Standard. In performing such duties,
      the Servicer shall comply with its current servicing policies and procedures,
      as
      such servicing policies and procedures may be amended from time to time, so
      long
      as such amendments will not materially adversely affect the interests of the
      Noteholder, or otherwise with the prior written consent of the Noteholder (which
      consent shall not be unreasonably withheld), and notice of such amendments
      is
      given to the Noteholder prior to the effectiveness thereof. The Servicer’s
      duties shall include collection and posting of all payments, responding to
      inquiries of Obligors on such Receivables, investigating delinquencies, sending
      payment statements to Obligors, reporting tax information to Obligors,
      accounting for collections, furnishing monthly and annual statements to the
      Trustee and the Noteholder with respect to distributions. Without limiting
      the
      generality of the foregoing, and subject to the servicing standards set forth
      in
      this Agreement including, without limitation, the restrictions set forth in
      Section
      4.6,
      the
      Servicer is authorized and empowered by the Purchaser to execute and deliver,
      on
      behalf of itself, the Purchaser or the Noteholder, any and all instruments
      of
      satisfaction or cancellation, or partial or full release or discharge, and
      all
      other comparable instruments, with respect to such Receivables. If the Servicer
      shall commence a legal proceeding to enforce a Receivable, the Purchaser shall
      thereupon be deemed to have automatically assigned, solely for the purpose
      of
      collection, such Receivable to the Servicer. If in any enforcement suit or
      legal
      proceeding it shall be held that the Servicer may not enforce a Receivable
      on
      the ground that it shall not be a real party in interest or a holder entitled
      to
      enforce such Receivable, the Purchaser shall, at the Servicer’s expense and
      direction, take steps to enforce such Receivable, including bringing suit in
      its
      name or the name of the Noteholder. The Servicer shall prepare and furnish,
      and
      the Trustee shall execute, any powers of attorney and other documents reasonably
      necessary or appropriate to enable the Servicer to carry out its servicing
      and
      administrative duties hereunder.

     

    
      
        
        

      

      
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    Section
      4.2 Collection
      of Receivable Payments; Lockbox Agreements; Other Duties of the
      Servicer.

    


    (a) Consistent
      with the Servicing Standard, the Servicer shall collect all payments called
      for
      under the terms and provisions of the Receivables and the related Other Conveyed
      Property as and when the same shall become due; provided, however, that promptly
      after the Closing Date (or the related Funding Date, as applicable) the Servicer
      shall notify and direct each Obligor to make all payments with respect to the
      Receivables to the applicable Post-Office Box. The Servicer shall provide each
      Obligor with a monthly statement in order to notify such Obligors to make
      payments directly to the applicable Post-Office Box.

    


    (b) The
      Servicer shall establish a Lockbox Account in the name of the Purchaser for
      the
      benefit of the Trustee, acting on behalf of the Noteholder. Pursuant to a
      Lockbox Agreement, the Trustee has authorized the Servicer to direct
      dispositions of funds on deposit in the Lockbox Account to the Collection
      Account (but not to any other account), and no other Person, except the Lockbox
      Processor and the Trustee, shall have authority to direct disposition of funds
      on deposit in the Lockbox Account. However, the Lockbox Agreement shall provide
      that the Lockbox Bank will comply with instructions originated by the Trustee
      relating to the disposition of the funds in the Lockbox Account without further
      consent by the Seller, the Servicer or the Purchaser. The Trustee shall have
      no
      liability or responsibility with respect to the Lockbox Processor’s directions
      or activities as set forth in the preceding sentence. The Lockbox Account shall
      be established pursuant to and maintained in accordance with the Lockbox
      Agreement and shall be a demand deposit account initially established and
      maintained with JPMorgan Chase Bank, N.A., or at the request of the Noteholder
      an Eligible Account satisfying clause (i) of the definition thereof; provided,
      however, that the Trustee shall give the Servicer prior written notice of any
      change made at the request of the Noteholder in the location of the Lockbox
      Account. The Trustee shall establish and maintain each Post-Office Box at a
      United States Post Office Branch in the name of the Purchaser for the benefit
      of
      the Noteholder.

    


    (c) Notwithstanding
      the Lockbox Agreement, or any of the provisions of this Agreement relating
      to
      the Lockbox Agreement, the Servicer shall remain obligated and liable to the
      Purchaser, the Trustee and the Noteholder for servicing and administering the
      Receivables and the Other Conveyed Property in accordance with the provisions
      of
      this Agreement without diminution of such obligation or liability by virtue
      thereof.

    


    (d) In
      the
      event the Seller shall for any reason no longer be acting as the Servicer
      hereunder, the Backup Servicer or a successor Servicer shall thereupon assume
      all of the rights and obligations of the outgoing Servicer under the Lockbox
      Agreement. In such event, the Backup Servicer or a successor Servicer shall
      be
      deemed to have assumed all of the outgoing Servicer’s interest therein and to
      have replaced the outgoing Servicer as a party to the Lockbox Agreement to
      the
      same extent as if the Lockbox Agreement had been assigned to the Backup Servicer
      or a successor Servicer, except that the outgoing Servicer shall not thereby
      be
      relieved of any liability or obligations on the part of the outgoing Servicer
      to
      the Lockbox Bank under the Lockbox Agreement. The outgoing Servicer shall,
      upon
      request of the Trustee, but at the expense of the outgoing Servicer, deliver
      to
      the Backup Servicer or a successor Servicer all documents and records relating
      to the Lockbox Agreement and an accounting of amounts collected and held by
      the
      Lockbox Bank and otherwise use its best efforts to effect the orderly and
      efficient assignment of the Lockbox Agreement to the Backup Servicer or a
      successor Servicer. In the event that the Noteholder shall elect to change
      the
      identity of the Lockbox Bank, the Servicer, at its expense, shall cause the
      Lockbox Bank to deliver, at the direction of the Noteholder, to the Trustee
      or a
      successor Lockbox Bank, all documents and records relating to the Receivables
      and all amounts held (or thereafter received) by the Lockbox Bank (together
      with
      an accounting of such amounts) and shall otherwise use its best efforts to
      effect the orderly and efficient transfer of the Lockbox
      arrangements.

    


    
      
        
        

      

      
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    (e) On
      each
      Business Day, pursuant to the Lockbox Agreement, the Lockbox Processor will
      transfer any payments from Obligors received in the Post-Office Box to the
      Lockbox Account. The Servicer shall cause the Lockbox Bank to transfer all
      collections in respect of the Receivables and the Other Conveyed Property from
      the Lockbox Account to the Collection Account within two Business Days after
      receipt thereof. In addition, the Servicer shall remit all payments by or on
      behalf of the Obligors received by the Servicer with respect to the Receivables
      (other than Purchased Receivables) and the Other Conveyed Property, all Net
      Liquidation Proceeds, Liquidation Expenses as provided in Section
      4.3
      hereof,
      any amounts in respect of any insurance policies which are not payable to the
      Obligor and any amounts remitted to the Servicer by the Hedge Counterparty
      pursuant to the Hedge Agreement no later than two Business Days following
      receipt directly (without deposit into any intervening account) into the Lockbox
      Account or the Collection Account. The Servicer shall not commingle its assets
      and funds with those on deposit in the Lockbox Account.

    


    (f) In
      addition to any other customary services which the Servicer may perform or
      may
      be required to perform hereunder, the Servicer shall perform or cause to be
      performed through sub-servicers, the following servicing and collection
      activities in accordance with the Servicing Standard:

    


    (i)perform
      standard accounting services and general record keeping services with respect
      to
      the Timeshare Loans;

    


    (ii)respond
      to telephone or written inquiries of Obligors concerning the Timeshare
      Loans;

    


    (iii)keep
      Obligors informed of the proper place and method for making payment with respect
      to the Timeshare Loans;

    


    (iv)contact
      Obligors to effect collections and to discourage delinquencies in the payment
      of
      amounts owed under the Timeshare Loans and doing so by any lawful
      means;

    


    (v)report
      tax information to Obligors and taxing authorities to the extent required by
      law;

    


    (vi)take
      such
      other action as may be necessary or appropriate in the discretion of the
      Servicer for the purpose of collecting and transferring to the Trustee for
      deposit into the Collection Account all payments received by the Servicer or
      remitted to the Lockbox Account in respect of the Timeshare Loans (except as
      otherwise expressly provided herein), and to carry out the duties and
      obligations imposed upon the Servicer pursuant to the terms of this
      Agreement;

    


    (vii)arranging
      for Liquidations of Timeshare Properties related to Defaulted Timeshare Loans

      and the remarketing of such Timeshare Properties as provided in Section
      4.3
      below;

    


    (viii)use
      reasonable best efforts to enforce the purchase and substitution obligations
      of
      the Seller under this Agreement;

    


    (ix)refrain
      from modifying, waiving or amending the terms of any Timeshare Loan; provided,
      however, the Servicer may modify, waive or amend a Timeshare Loan for which
      a
      default on such Timeshare Loan has occurred or is imminent and such
      modification, amendment or waiver will not (i) materially alter the interest
      rate on or the principal balance of such Timeshare Loan, (ii) shorten the final
      maturity of, lengthen the timing of payments of either principal or interest,
      or
      any other terms of, such Timeshare Loan in any manner which would have a
      material adverse effect on the Noteholders, (iii) adversely affect the Timeshare
      Property underlying such Timeshare Loan or (iv) reduce materially the likelihood
      that payments of interest and principal on such Timeshare Loan shall be made
      when due; provided, further, the Servicer may grant extensions of the final
      maturity of any Timeshare Loan if the Servicer, in its good faith reasonable
      discretion, determines that (A) such Timeshare Loan is in default or a default
      on such Timeshare Loan is likely to occur in the foreseeable future and (B)
      the
      value of such Timeshare Loan will be enhanced by such extension; provided,
      however, that no more than two (2) such extensions may be granted during the
      term of such Timeshare Loan and no more than one (1) such extension may be
      granted during any twelve (12) month period; and provided, further, the Servicer
      shall not be permitted to modify, waive or amend the terms of any Timeshare
      Loan
      if the sum of the Principal Balance of the related Receivable as of the related
      Cutoff Date and the Principal Balances of all other Receivables as of their
      related Cutoff Dates for which the Servicer has modified, waived or amended
      the
      terms thereof exceeds 10% of the Aggregate Principal Balance as of any date
      of
      determination.

    


    
      
        
        

      

      
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    (x)work
      with
      Obligors in connection with any transfer of ownership of a Timeshare Property
      by
      an Obligor to another Person (to the extent permitted), whereby the Servicer
      may
      consent to the assumption by such Person of the Timeshare Loan related to such
      Timeshare Property (to the extent permitted); provided, however, in connection
      with any such assumption, the rate of interest borne by, the maturity date
      of,
      the principal amount of, the timing of payments of principal and interest in
      respect of, and all other material terms of, the related Timeshare Loan shall
      not be changed other than as permitted in clause (ix) above; 

    


    (xi)deliver
      such information and data to the Backup Servicer as is required pursuant to
      this
      Agreement; 

    


    (xii)deliver
      any new or amended ACH Forms executed by an Obligor to the Custodian to be
      held
      as part of the related Timeshare Loan File; 

    


    (xiii)(A)
      to
      cause each Resort to be insured in the event of fire, earthquake, or other
      casualty for the full replacement value thereof and if the Resort is located
      in
      a designated flood plain, to maintain flood insurance in an amount not less
      than
      the maximum level available under the National Flood Insurance Act of 1968,
      as
      amended; (B) in respect of each Resort, to maintain general liability insurance
      in such amounts generally acceptable in the industry; (C) to cause each Resort’s
      insurance policies to remain in full force and effect with a generally
      acceptable insurance carrier; and (D) to monitor the maintenance of the
      insurance coverage described in (A), (B), and (C) above with respect to each
      Resort and promptly obtain notice and otherwise acquire Knowledge of any lapse,
      cessation, decrease or other change in any such insurance coverage;
      and

    


    (xiv)to
      the
      extent it receives any amounts in respect of any insurance policies which are
      not payable to the Obligor or any other collections relating to the Receivables
      or the Other Conveyed Property, it shall deposit such amounts to the Collection
      Account within two (2) Business days of receipt thereof (unless otherwise
      expressly provided herein).

     

    Section
      4.3 Realization
      Upon Receivables.
      Upon
      a
      Receivable becoming a Defaulted Receivable, the Servicer shall, in accordance
      with the Servicing Standard, promptly institute collection procedures, which
      may
      include, but are not limited to, cancellation, forfeiture, termination or
      foreclosure proceedings or obtaining a deed-in-lieu of foreclosure in respect
      of
      the related Timeshare Property (each, a “Foreclosure
      Property”).
      Upon
      the Timeshare Property becoming a Foreclosure Property, the Servicer shall
      promptly attempt to liquidate such Foreclosure Property. The Servicer shall
      select the liquidation option reasonably anticipated to produce the highest
      Net
      Liquidation Proceeds, giving effect to the gross price obtainable, broker’s
      commissions, foreclosure costs, fees and marketing expenses and other factors.
      The Servicer shall be entitled to reimbursement of Liquidation Expenses out
      of
      Liquidation Proceeds. Any Liquidation Expenses later recovered by the Servicer
      shall be deposited by the Servicer in the Collection Account in accordance
      with
Section
      4.2(e)
      hereof.

    


    
      
        
        

      

      
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    (a) To
      the
      extent that the Seller or an Affiliate thereof is selected to remarket a
      Foreclosure Property, the Servicer shall cause the Seller or Affiliate thereof
      to agree that it will remarket such Foreclosure Property in accordance with
      the
      Servicing Standard.

    


    (b) The
      Servicer (if Silverleaf or its Affiliate is acting as Servicer) on behalf of
      the
      Purchaser and the Trustee shall take all necessary steps to have the record
      title of the applicable Timeshare Properties subject to the Defaulted Timeshare
      Loans relating to such Defaulted Receivables continue to be held by the Trustee.
      In such event, the Servicer shall exercise, directly or through its agents,
      the
      remedies provided for in the Oak N’ Spruce Trust Agreement, in the Mortgage Note
      or in the other documents with respect to such Defaulted Timeshare Loans and
      the
      Obligors thereunder, and the related Timeshare Property shall be remarketed
      with
      the purpose of obtaining the maximum Net Liquidation Proceeds in respect of
      such
      Defaulted Timeshare Loans.

    


    (c) The
      Servicer shall reserve its rights under the Oak N’ Spruce Trust Agreement and/or
      the applicable Mortgages to obtain, at any time, record title and all beneficial
      interests in respect of the Timeshare Properties related to Defaulted Timeshare
      Loans. All actions taken by the Servicer in respect of any Defaulted Timeshare
      Loans shall, at all times, be carried out in a manner such that none of the
      Purchaser, the Trustee or the Noteholder shall, under applicable law, be deemed
      to be the developer or declarant of any Resort.

    


    (d) The
      Servicer may elect to liquidate at a public auction any Defaulted Timeshare
      Loans or related Timeshare Properties foreclosed upon or otherwise reacquired
      on
      behalf of the Trustee from the Obligors of the Defaulted Timeshare Loans. In
      the
      event the Servicer elects to so liquidate Defaulted Timeshare Loans or the
      related Timeshare Properties securing these Defaulted Timeshare Loans, the
      Seller may bid on such Defaulted Timeshare Loans or related Timeshare Properties
      so long as the Seller pays an amount at least equal to the net fair market
      value
      of each related Timeshare Property, as determined by the Seller in its
      commercially reasonable judgment, which shall in no event be less than fifteen
      percent (15%) of the original acquisition price paid for the Timeshare Property
      by the Obligor under the Defaulted Timeshare Loan. Publication of notice of
      such
      auction in a newspaper published daily in Dallas, Texas shall be sufficient
      notice of such auction. 

    


    (e) The
      Servicer agrees that it shall require that any Liquidation Proceeds be in the
      form of cash only.

    


    (f) The
      Servicer may not sell any of the Defaulted Receivables and the related Defaulted
      Timeshare Loans that are included in the Collateral except for or as
      specifically permitted by this Agreement.

     

    Section
      4.4 [RESERVED]

    


    Section
      4.5 Maintenance
      of Security Interests.

    


    (a) Each
      of
      the Seller, the Servicer and the Purchaser agrees that, from time to time,
      it
      shall promptly execute and deliver all further instruments and documents, and
      take all further action, that may be necessary or appropriate, or that the
      Noteholder may request, in order to perfect, protect or more fully evidence
      the
      security interest in the Receivables and the Other Conveyed Property or to
      enable the Trustee to exercise or enforce any of its rights hereunder. Without
      limiting the generality of the foregoing, the Purchaser will, or will cause
      the
      Servicer to, without the necessity of a request and upon the request of the
      Trustee at the direction of the Noteholder, execute or authorize and file or
      record (or cause to be executed or authorized and filed or recorded) such
      Assignments of Mortgage, financing or continuation statements, or amendments
      hereto or assignments thereof, and such other instruments or notices, as may
      be
      necessary or appropriate to create and maintain in the Trustee a first priority
      perfected security interest, at all times, in the Collateral, including, without
      limitation, recording and filing UCC-1 financing statements, amendments or
      continuation statements prior to the effective date of any change of the name,
      identity or structure or relocation of its chief executive office or any change
      which could affect the perfection pursuant to any financing statement or
      continuation statement or assignment previously filed or make any UCC-1 or
      continuation statement previously filed pursuant to this Agreement or the
      Indenture seriously misleading within the meaning of applicable provisions
      of
      the UCC (and the Purchaser shall, or shall cause the Servicer to, give the
      Trustee at least thirty (30) Business Days prior notice of the expected
      occurrence of any such circumstance). The Issuer shall, or shall cause the
      Servicer to, deliver promptly to the Trustee file-stamped copies of any such
      filings.

    


    
      
        
        

      

      
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    (b) (i)
      The
      Purchaser hereby grants to each of the Servicer and the Trustee a power of
      attorney to execute all documents including, but not limited to, Assignments
      of
      Mortgage, UCC-l financing statements, amendments or continuation statements,
      on
      behalf of the Issuer as may be necessary or desirable to effectuate the
      foregoing and (ii) the Servicer hereby grants to the Trustee a power of attorney
      to execute all documents on behalf of the Servicer as may be necessary or
      desirable to effectuate the foregoing; provided, however, that such grant shall
      not create a duty on the part of the Trustee to file, prepare, record or
      monitor, or any responsibility for the contents or adequacy of, any such
      documents.

    


    (c) Upon
      the
      occurrence of a Servicer Termination Event, the Trustee and the Servicer, at
      the
      direction of the Noteholder, shall take or cause to be taken such action as
      may
      be reasonably necessary or otherwise desirable to perfect or re-perfect the
      security interests in the Receivables and the Other Conveyed Property in the
      name of the Trustee on behalf of the Noteholder. The Seller hereby agrees to
      pay
      all expenses related to such perfection or re-perfection and to take all action
      necessary therefor. 

     

    Section
      4.6 Additional
      Covenants of Servicer.

    


    (a) The
      Servicer shall not release the Timeshare Property securing each Receivable
      from
      the security interest granted by such Receivable in whole or in part except
      in
      the event of payment in full by the Obligor thereunder or liquidation of the
      Timeshare Property, nor shall the Servicer impair the rights of the Noteholder
      in such Receivables or related Other Conveyed Property, nor shall the Servicer
      amend or otherwise modify a Receivable or any of the related Other Conveyed
      Property, except as permitted in accordance with Section
      4.2.

    


    (b) The
      Servicer shall obtain and/or maintain all necessary licenses, approvals,
      authorizations, orders or other actions of any person, corporation or other
      organization, or of any court, governmental agency or body or official, required
      in connection with the execution, delivery and performance of this Agreement
      and
      the other Basic Documents.

    


    (c) The
      initial Servicer shall not make any material changes to its Collection Policy
      unless the Noteholder expressly consents in writing prior to such changes (which
      consent shall not be unreasonably withheld).

    


    (d) The
      Servicer shall provide written notice to the Noteholder and the Trustee of
      any
      Default, Event of Default or Servicer Termination Event under this transaction
      or a similar event under any other warehouse financing facility or
      securitization that has occurred and which Default, Event of Default or Servicer
      Termination Event (or similar event) shall not have been waived or otherwise
      cured within the applicable cure period.

    


    (e) For
      so
      long as Silverleaf or any of its Affiliates controls the Resorts, the Servicer
      shall use commercially reasonable efforts to maintain or cause the Resorts
      to be
      maintained in good repair, working order and condition (ordinary wear and tear
      excepted).

    


    (f) For
      so
      long as Silverleaf or any of its Affiliates controls the Association for a
      Resort, and Silverleaf or an Affiliate thereof is the manager, the related
      management contract may not be amended or modified if such amendment or
      modification is reasonably likely to have a material adverse effect on the
      interests of the Noteholder, except with the prior written consent of the
      Noteholder, which consent shall not be unreasonably withheld or
      delayed.

    


    
      
        
        

      

      
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    (g) In
      the
      event any Lien (other than a Permitted Lien) attaches to any Receivable or
      Other
      Conveyed Property or related collateral from any Person claiming from or through
      Silverleaf or one of its Affiliates which materially adversely affects the
      Purchaser’s or the Noteholder’s interest in such Receivable or Other Conveyed
      Property, Silverleaf shall, within the earlier to occur of ten (10) Business
      Days after such attachment or the respective lienholders’ action to foreclose on
      such lien, either (a) cause such Lien to be released of record, (b) provide
      the
      Trustee with a bond in accordance with the applicable laws of the state in
      which
      the Timeshare Property is located, issued by a corporate surety acceptable
      to
      the Trustee, in an amount and in form reasonably acceptable to the Trustee
      or
      (c) provide the Trustee with such other security as the Trustee may reasonably
      require.

    


    (h) The
      Servicer shall: (a) promptly notify the Trustee of (i) any claim, action or
      proceeding which may be reasonably expected to have a material adverse effect
      on
      the Receivables or any Other Conveyed Property, or any material part thereof,
      and (ii) any action, suit, proceeding, order or injunction of which the Servicer
      becomes aware after the date hereof pending or threatened against or affecting
      the Servicer or any Affiliate which may be reasonably expected to have a
      material adverse effect on the Receivables or any Other Conveyed Property or
      the
      Servicer’s ability to service the same; (b) at the request of Trustee with
      respect to a claim or action or proceeding which arises from or through the
      Servicer or one of its Affiliates, appear in and defend, at Servicer’s expense,
      any such claim, petition or proceeding which would have a material adverse
      effect on the Receivables or any Other Conveyed Property or the Servicer’s
      ability to service the same; and (c) comply in all respects, and shall cause
      all
      Affiliates to comply in all respects, with the terms of any orders imposed
      on
      such Person by any governmental authority the failure to comply with which
      would
      have a material adverse effect on the Receivables or any Other Conveyed Property
      or the Servicer’s ability to service the same.

    


    (i) Except
      as
      contemplated by the Basic Documents, the Servicer (for so long as Silverleaf
      or
      any Affiliate thereof is the Servicer hereunder, otherwise Silverleaf in its
      individual capacity) shall not, and shall not permit the Managing Entity to,
      encumber, pledge or otherwise grant a lien or security interest in and to the
      Reservation System (including, without limitation, all hardware, software and
      data in respect thereof) and furthermore agrees, and shall cause the Managing
      Entity, to use commercially reasonable efforts to keep the Reservation System
      operational, not to dispose of the same and to allow the members of each
      Association the use of, and access to, the Reservation System in accordance
      with
      the terms of the Management Agreement.

    


    (j) For
      so
      long as Silverleaf or any Affiliate thereof is the Servicer, it shall comply
      in
      all material respects with the Collection Policy in effect on the Closing Date
      (or, as amended from time to time with the consent of the Noteholder) and with
      the terms of the Timeshare Loans.

    


    (k) With
      respect to any Receivable (including but not limited to any Receivable which
      becomes a Defaulted Receivable) and its related Timeshare Loan, the Servicer
      shall, in accordance with the Servicing Standard, promptly institute collection
      procedures, which may include, but are not limited to, cancellation, forfeiture,
      termination or foreclosure proceedings or obtaining a deed-in-lieu of
      foreclosure in respect of the related Timeshare Property, prior to the
      initiation of any proceedings in respect of such Receivable and related
      Timeshare Loan by any other Person, including but not limited to the Managing
      Entity. 

     

    Section
      4.7 Purchase
      of Receivables Upon Breach of Covenant.
      Upon
      discovery by any of the Servicer, the Purchaser or the Trustee of a breach
      of
      any of the covenants of the Servicer set forth in Sections
      4.2(a),
      4.2(f),
      4.4,
      4.5
      or
4.6,
      the
      party discovering such breach shall give prompt written notice to the others
      and
      the Noteholder; provided, however, that the failure to give any such notice
      shall not affect any obligation of the Servicer under this Section
      4.7.
      Unless
      the breach shall have been cured by the last day of the next Accrual Period
      following such discovery, the Servicer shall, on or prior to such last day
      of
      the next Accrual Period, purchase any Receivable materially and adversely
      affected by such breach and the related Other Conveyed Property. In
      consideration of the purchase of such Receivable, the Servicer shall remit
      the
      Purchase Amount for such Receivable in the manner specified in Section
      5.6.
      The
      sole remedy of the Trustee, the Purchaser or the Noteholder with respect to
      a
      breach of Sections
      4.2(a),
      4.2(f),
      4.4,
      4.5
      or
4.6
      shall be
      to require the Servicer to repurchase Receivables and the related Other Conveyed
      Property pursuant to this Section
      4.7;
      provided,
      however,
      that
      the Servicer shall indemnify the Trustee, the Backup Servicer, the Purchaser
      and
      the Noteholder against all costs, expenses, losses, damages, claims and
      liabilities, including reasonable fees and expenses of counsel, arising out
      of
      the events or facts giving rise to such breach.

     

    
      
        
        

      

      
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    Section
      4.8 Servicing
      Fee.
      The
      “Servicing Fee” for each Settlement Date shall be equal to the product of (i)
      one twelfth, (ii) the Servicing Fee Percentage and (iii) the daily average
      of
      the Net Eligible Receivable Balance during the related Accrual Period. The
      Servicing Fee shall also include all late fees, prepayment charges, and other
      administrative fees or similar charges allowed by applicable law with respect
      to
      Receivables, collected (from whatever source) on the Receivables. If the Backup
      Servicer becomes the successor Servicer, it
      shall
      be entitled to receive the Servicing Fee and not the Backup Servicing
      Fee.

     

    Section
      4.9 Servicer’s
      Certificate.
      No
      later
      than 12:00 noon New York City time on each Determination Date, the Servicer
      shall deliver (facsimile delivery being acceptable) to the Trustee, the Rating
      Agency, the Noteholder and the Purchaser, a certificate substantially in the
      form of Exhibit A hereto (a “Servicer’s Certificate”) containing among other
      things, (i) all information necessary to enable the Trustee to make any
      withdrawal and deposit required by Section
      5.5
      and to
      make the distributions required by Section
      5.7,
      (ii)
      all information necessary for the Trustee to send or make available statements
      to the Noteholder pursuant to Section
      5.8(b)
      and
5.9,
      (iii) a
      listing of all Purchased Receivables purchased as of the related Accounting
      Date, identifying the Receivables so purchased, (iv) the calculation of the
      Borrowing Base, and (v) all information necessary to enable the Backup Servicer
      to verify the information specified in Section
      4.15(e)
      and to
      complete the accounting required by Section
      5.9.
      Each
      such
      Servicer’s Certificate shall be accompanied by an Officer’s Certificate of the
      Servicer in the form of Exhibit
      H
      hereto,
      certifying the accuracy of the computations reflected in such Servicer’s
      Certificate.

     

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

    


    (a) The
      Servicer shall deliver to the Purchaser, to the Trustee for delivery to the
      Noteholder, the Backup Servicer and each Rating Agency, on or before March
      31 of
      each year beginning March 31, 2007, an Officer’s Certificate, dated as of
      December 31 of the preceding year, stating that (i) a review of the activities
      of the Servicer during the preceding 12-month period (or, in the case of the
      first such certificate, the period from the Cutoff Date with respect to
      Receivables transferred to the Purchaser on the initial Funding Date to December
      31, 2006) and of its performance under this Agreement has been made under such
      officer’s supervision and (ii) to the best of such officer’s knowledge, based on
      such review, the Servicer has fulfilled all its obligations under this Agreement
      throughout such year (or, in the case of the first such certificate, such
      shorter period), or, if there has been a default in the fulfillment of any
      such
      obligation, specifying each such default known to such officer and the nature
      and status thereof.

    


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

     

    Section
      4.11 Independent
      Accountants’ Reports.
      The
      Servicer shall cause a firm of nationally recognized independent certified
      public accountants (the “Independent
      Accountants”),
      who
      may also render other services to the Servicer or to the Purchaser, to deliver
      to the Trustee, the Backup Servicer, the Noteholder and each Rating Agency,
      on
      or before April 30 of each year beginning April 30, 2007, a report dated as
      of
      December 31 of the preceding year in form and substance reasonably acceptable
      to
      the Noteholder (the “Accountants’
      Report”)
      and
      reviewing the Servicer’s activities during the preceding 12-month period (or, in
      the case of the first such report, the period from the Cutoff Date with respect
      to Receivables transferred to the Purchaser on the initial Funding Date to
      December 31, 2006), addressed to the Board of Directors of the Servicer, to
      the
      Trustee, the Backup Servicer and to the Noteholder, to the effect that such
      firm
      has examined the financial statements of the Servicer and issued its report
      therefor and that such examination (1) was made in accordance with generally
      accepted auditing standards, and accordingly included such tests of the
      accounting records and such other auditing procedures as such firm considered
      necessary in the circumstances; (2) included tests relating to timeshare loans
      serviced for others in accordance with the requirements of the Uniform Single
      Attestation Program for Mortgage Bankers (the “Program”),
      to
      the extent the procedures in the Program are applicable to the servicing
      obligations set forth in this Agreement; (3) included an examination of the
      delinquency and loss statistics relating to the Servicer’s portfolio; and (4)
      except as described in the report, disclosed no exceptions or errors in the
      records relating to timeshare loans serviced for others that, in the firm’s
      opinion, paragraph four of the Program requires such firm to report. The
      accountant’s report shall further state that (1) such firm has examined and
      audited the Servicer’s servicing controls and procedures for the previous
      calendar year and that such independent public accountants have examined certain
      documents and records (including computer records) and servicing procedures
      of
      the Servicer relating to the Receivables and the Other Conveyed Property, (2)
      they have examined the most recent Servicer’s Certificate prepared by the
      Servicer and three other Servicer’s Certificates chosen at random by such firm
      and compared such Servicer’s Certificates with the information contained in such
      documents and records, (3) their examination included such tests and procedures
      as they considered necessary in the circumstances, (4) their examinations and
      comparisons described under clauses (1) and (2) above disclosed no exceptions
      which, in their opinion, were material, relating to such Receivables and Other
      Conveyed Property or such Servicer’s Certificates, or, if any such exceptions
      were disclosed thereby, setting forth such exceptions which, in their opinion,
      were material, (5) on the basis of such examinations and comparison, such firm
      is of the opinion that the Servicer has, during the relevant period, serviced
      the Receivables and Other Conveyed Property in compliance with this Agreement
      and the other Basic Documents in all material respects and that such documents
      and records have been maintained in accordance with this Agreement and the
      other
      Basic Documents in all material respects, except in each case for (A) such
      exceptions as such firm shall believe to be immaterial and (B) such other
      exceptions as shall be set forth in such written report. In the event such
      firm
      requires the Trustee and/or the Backup Servicer to agree to the procedures
      performed by such firm, the Servicer shall direct the Trustee and/or the Backup
      Servicer, as applicable, in writing to so agree; it being understood and agreed
      that the Trustee and/or the Backup Servicer will deliver such letter of
      agreement in conclusive reliance upon the direction of the Servicer, and neither
      the Trustee nor the Backup Servicer makes any independent inquiry or
      investigation as to, and shall have no obligation or liability in respect of,
      the sufficiency, validity or correctness of such procedures. The Report will
      also indicate that the firm is independent of the Servicer within the meaning
      of
      the Code of Professional Ethics of the American Institute of Certified Public
      Accountants.

     

    
      
        
        

      

      
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    Section
      4.12 Independent
      Accountants’ Review of Receivables File.
      Commencing
      on January 31, 2007 and thereafter each year on or before January 31 (or upon
      the date of the closing of Seller’s next occurring term securitization
      transaction, provided that such review is not made more than 365 days after
      the
      immediately preceding review) prior to the Final Scheduled Settlement Date,
      the
      Seller at its own expense shall cause Independent Accountants reasonably
      acceptable to the Noteholder to conduct a post-funding review of the Seller’s
      compliance with its stated underwriting policies and verify certain
      characteristics of the Receivables and the Other Conveyed Property as of each
      Funding Date. If the cost to the Seller of any such review is greater than
      $30,000 (other than a review conducted in connection with a securitization
      transaction, as described above), the Noteholder in its sole discretion may
      elect to pay the amount in excess of $30,000 or to waive the performance of
      such
      review. If such review is performed in connection with a securitization
      transaction, the Seller shall pay the entire cost of the review, including
      any
      amount in excess of $30,000. The Independent Accountants shall within ten
      Business Days complete such physical inspection and limited review and execute
      and deliver to Seller, the Servicer, the Trustee and the Noteholder a report
      summarizing the findings, which report shall be delivered in any case within
      365
      days of the previous report delivered in accordance with this Section
      4.12.
      If such
      review reveals, in the Noteholder’s reasonable opinion, an unsatisfactory number
      of exceptions, the Noteholder, in its reasonable discretion, may require a
      full
      review of a larger sample of the Receivables and the Other Conveyed Property
      by
      the Independent Accounts at the expense of the Seller.

     

    Section
      4.13 Report
      on Proceedings and Servicer Termination Event.
      (i)
      Promptly upon a Responsible Officer of the Servicer’s obtaining Knowledge of any
      proposed or pending investigation of it by any Governmental Authority or any
      court or administrative proceeding which involves or is reasonably likely to
      involve the possibility of materially and adversely affecting the properties,
      business, prospects, profits or conditions (financial or otherwise) of the
      Servicer and its subsidiaries, as a whole, the Servicer shall send written
      notice specifying the nature of such investigation or proceeding and what action
      the Servicer is taking or proposes to take with respect thereto and evaluating
      its merits, or (ii) immediately upon obtaining Knowledge of the existence of
      any
      condition or event which constitutes a Servicer Termination Event, the Servicer
      shall send written notice to the Purchaser, the Trustee and the Noteholder
      describing its nature and period of existence and what action the Servicer
      is
      taking or proposes to take with respect thereto.

     

    
      
        
        

      

      
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    Section
      4.14 Access
      to Certain Documentation and Information Regarding Receivables.
      The
      Servicer shall provide to representatives of the Trustee, the Backup Servicer
      and the Noteholder reasonable access to the documentation regarding the
      Receivables and the Other Conveyed Property. In each case, such access shall
      be
      afforded without charge but only upon reasonable request and during normal
      business hours. Nothing in this Section shall derogate from the obligation
      of
      the Servicer to observe any applicable law prohibiting disclosure of information
      regarding the Obligors, and the failure of the Servicer to provide access as
      provided in this Section as a result of such obligation shall not constitute
      a
      breach of this Section.

     

    Section
      4.15 Verification
      of Servicer’s Certificate.
      On
      Friday
      of each week (or, if such day is not a Business Day, then on the next Business
      Day), the Servicer shall prepare and deliver to the Backup Servicer the
      following:

    


    (i)a
      computer file or files stored on diskette, magnetic tape, or provided
      electronically to Backup Servicer prepared in accordance with the four-page
      “Record Layout” for data conversion attached hereto as Exhibit G and made a part
      hereof. Such files shall contain all information with respect to the Receivables
      and the Other Conveyed Property as of the close of business on the prior
      Business Day of Servicer necessary to store the appropriate data in Backup
      Servicer’s system from which Backup Servicer will be capable of preparing a
      weekly trial balance relating to the data; and

    


    (ii)together
      with the file(s) described above, an initial trial balance showing balances
      of
      the Receivables as of the last Business Day corresponding to the date of the
      aforesaid initial file.

    


    (b) In
      the
      event the Servicer modifies its Record Layout after the initial conversion,
      Servicer shall advise Backup Servicer in writing and agrees to pay Backup
      Servicer for any additional programming and other work required as a result
      of
      such changes.

    


    (c) The
      Backup Servicer shall use the aforesaid files and initial trial balance
      described above to store the data thereon in its computer system and run a
      weekly trial balance report and shall provide such report to the Trustee, the
      Servicer and the Noteholder. The Backup Servicer shall receive data on diskette,
      tape or other acceptable electronic medium on Friday of each week (or, if such
      day is not a Business Day, then on the next Business Day), perform conversion
      of
      data onto its system on a weekly basis to produce a weekly trial balance report
      and a summary delinquency report in the form attached hereto as Schedule C,
      and
      shall provide such report to the Trustee, the Servicer and the Noteholder no
      later than 3 Business Days after receiving the required data from the Servicer,
      provided the data described in the diskettes or tapes is in a form that enables
      the Backup Servicer to do so.

    


    (d) Concurrently
      with the delivery by the Servicer of the Servicer’s Certificate each month, the
      Servicer will deliver to the Trustee, the Noteholder and the Backup Servicer
      a
      computer diskette (or other electronic transmission) in a format acceptable
      to
      the Trustee, the Noteholder and the Backup Servicer containing information
      with
      respect to the Receivables and the Other Conveyed Property as of the close
      of
      business on the last day of the preceding Interest Period which information
      is
      necessary for preparation of the Servicer’s Certificate. The Backup Servicer
      shall use such computer diskette (or other electronic transmission) to verify
      certain information specified in Section
      4.15(e)
      contained in the Servicer’s Certificate delivered by the Servicer, and the
      Backup Servicer shall notify the Servicer and the Noteholder of any
      discrepancies on or before the second Business Day following the Determination
      Date. In the event that the Backup Servicer reports any discrepancies, the
      Servicer and the Backup Servicer shall attempt to reconcile such discrepancies
      by the related Settlement Date, but in the absence of a reconciliation, the
      Servicer’s Certificate shall control for the purpose of calculations and
      distributions with respect to the related Settlement Date. In the event that
      the
      Backup Servicer and the Servicer are unable to reconcile discrepancies with
      respect to a Servicer’s Certificate by the related Settlement Date, the Backup
      Servicer shall notify the Noteholder thereof in writing and the Servicer shall
      cause a firm of Independent Accountants, at the Servicer’s expense, to audit the
      Servicer’s Certificate and, prior to the fifth day of the following calendar
      month, reconcile the discrepancies. The effect, if any, of such reconciliation
      shall be reflected in the Servicer’s Certificate for such next succeeding
      Determination Date. Other than the duties specifically set forth in this
      Agreement, the Backup Servicer shall have no obligations hereunder, including,
      without limitation, to supervise, verify, monitor or administer the performance
      of the Servicer. The Backup Servicer shall have no liability for any actions
      taken or omitted by the Servicer. The duties and obligations of the Backup
      Servicer shall be determined solely by the express provisions of this Agreement
      and no implied covenants or obligations shall be read into this Agreement
      against the Backup Servicer.

    


    
      
        
        

      

      
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    (e) The
      Backup Servicer shall review each Servicer’s Certificate delivered pursuant to
Section
      4.15(d)
      and
      shall:

    


    (i)confirm
      that such Servicer’s Certificate is complete on its face;

    


    (ii)load
      the
      computer diskette (which shall be in a format acceptable to the Backup Servicer)
      received from the Servicer pursuant to Section
      4.15(d)
      hereof,
      confirm that such computer diskette is in a readable form and calculate and
      confirm the Aggregate Principal Balance of the Receivables for the most recent
      Settlement Date and reconcile (A) the number of accounts currently being
      serviced comprising the Receivables and (B) the trial balance and summary
      delinquency information with the corresponding information in the Servicer’s
      Certificate; and

    


    (iii)confirm
      that Available Funds, the Noteholder’s Principal Distributable Amount, the
      Noteholder’s Interest Distributable Amount, the Servicing Fee, the Backup
      Servicing Fee, the Trustee Fee, Leverage Ratio, Delinquency Ratio, Serviced
      Receivables Delinquency Ratio, Default Ratio, Serviced Receivables Default
      Ratio, the Net Spread, the Three Month Rolling Average of Delinquency Ratios,
      the Three Month Rolling Average of Serviced Receivables Delinquency Ratios,
      the
      Three Month Rolling Average of Default Ratios, the Three Month Rolling Average
      of Serviced Receivables Default Ratios, the Three Month Rolling Average of
      Net
      Spread, and the percentage of Aggregate Principal Balance of Eligible Timeshare
      Loans with a related Obligor having a FICO score of greater than or equal to
      500
      and less than 600 as of the date of origination of such Timeshare Loan in the
      Servicer’s Certificate are accurate based solely on the recalculation of the
      Servicer’s Certificate. 

    


    (f) Within
      90
      days of the Closing Date, the Backup Servicer will data map to its servicing
      system all servicing/loan file information, including all relevant borrower
      contact information such as address and phone numbers as well as loan balance
      and payment information, including comment histories and collection notes.
      On or
      before the fifth calendar day of each month, the Servicer will provide to the
      Backup Servicer an electronic transmission of all servicing/loan information,
      including all relevant borrower contact information such as address and phone
      numbers as well as loan balance and payment information, including comment
      histories and collection notes, and the Backup Servicer will review each file
      to
      ensure that it is in readable form and verify that the data balances conform
      to
      the trial balance reports received from the Servicer. Additionally, the Backup
      Servicer shall store each such file.

     

    Section
      4.16 [RESERVED].

    


    Section
      4.17 Fidelity
      Bond and Errors and Omissions Insurance.
      The
      Servicer shall maintain a fidelity bond and errors and omissions insurance
      in
      such form and amount as is customary for entities acting as custodian of funds
      and documents in respect of consumer contracts on behalf of institutional
      investors; provided that such insurance shall be in a minimum amount of
      $1,000,000 per policy and shall name the Trustee as an additional insured.
      No
      provision of this Section
      4.17
      requiring such fidelity bond or errors and omissions insurance shall diminish
      or
      relieve the Servicer from its duties and obligations as set forth in this
      Agreement. Upon a request of the Trustee or the Noteholder, the Servicer shall
      deliver to the Trustee, a certification evidencing coverage under such fidelity
      bond and the errors and omissions insurance. Any such fidelity bond or errors
      and omissions insurance policy shall not be canceled or modified in a materially
      adverse manner without ten (10) Business Days’ prior written notice to the
      Trustee and the Noteholder.

     

    
      
        
        

      

      
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    Section
      4.18 Lien
      Searches; Opinions as to Transfers and Security Interests.
      The
      Servicer shall, as a condition precedent to the extension of the Scheduled
      Maturity Date and renewal of the Indenture by the Noteholder pursuant to
Section
      2.3
      thereof,
      deliver (or cause to be delivered) to the Trustee and the Noteholder an Opinion
      of Counsel, in form and substance satisfactory to the Noteholder, with respect
      to (a) the “true sale” nature of the transfers of Receivables and, to the extent
      applicable, related Other Conveyed Property hereunder and under each related
      Assignment, (b) the “backup security interest” with respect to the transfers of
      Receivables and, to the extent applicable, related Other Conveyed Property
      hereunder and under each related Assignment, (c) the validity of the security
      interest in connection with the pledge of Collateral to the Trustee under the
      Indenture on each Funding Date and (d) the perfection and first priority of
      the
      transfers and pledges referred to in clauses (a)-(c) above. To the extent each
      such Opinion of Counsel is in any manner reliant on UCC lien searches, each
      such
      UCC lien search shall be dated no earlier than ten Business Days prior to the
      date of each such related Opinion of Counsel, and shall be accompanied by
      officer’s certificates from the appropriate parties certifying that no filings
      subsequent to the date of such lien searches have been made. Such Opinion of
      Counsel shall state, among other things, that, in the opinion of such counsel,
      either (A) all financing statements and continuation statements have been
      authorized and filed that are necessary to perfect the interest of the Purchaser
      and the Trustee in the Receivables, and reciting the details of such filings
      or
      referring to prior Opinions of Counsel in which such details are given, or
      (B)
      no such action shall be necessary to preserve and protect such interest. The
      Opinion of Counsel referred to in this Section
      4.18
      shall
      specify any action necessary (as of the date of such opinion) to be taken to
      preserve and protect such interest.

     

    Section
      4.19 Subservicing
      Arrangements.
      The
      Servicer may arrange for the subservicing of all or any portion of the
      Receivables and the Other Conveyed Property by a subservicer; provided, however,
      that such subservicing arrangement must provide for the servicing of such
      Receivables and Other Conveyed Property in a manner consistent with the
      servicing arrangements contemplated hereunder; provided, further, that any
      such
      subservicing arrangement with a Person that is not an Affiliate of Silverleaf
      shall require the prior written consent of the Noteholder. Unless the context
      otherwise requires, references in this Agreement to actions taken or to be
      taken
      by the Servicer in servicing the Receivables include actions taken or to be
      taken by a subservicer on behalf of the Servicer. Notwithstanding the provisions
      of any subservicing agreement, any of the provisions of this Agreement relating
      to agreements or arrangements between the Servicer and a subservicer or
      reference to actions taken through a subservicer or otherwise, the Servicer
      shall remain obligated and liable to the Purchaser, the Trustee, the Backup
      Servicer and the Noteholder for the servicing and administration of the
      Receivables and the Other Conveyed Property in accordance with the provisions
      of
      this Agreement without diminution of such obligation or liability by virtue
      of
      such subservicing agreements or arrangements or by virtue of indemnification
      from the subservicer and to the same extent and under the same terms and
      conditions as if the Servicer alone were servicing and administering the
      Receivables and the Other Conveyed Property. All actions of each subservicer
      performed pursuant to a subservicing arrangement shall be performed as an agent
      of the Servicer with the same force and effect as if performed directly by
      the
      Servicer. The subservicer under each subservicing arrangement shall be engaged
      by the Servicer upon terms consistent with the engagement of the Servicer
      hereunder. Each subservicer shall be simultaneously terminated in the event
      that
      the Servicer is terminated hereunder. The fees paid by the Servicer to the
      related subservicer under each subservicing arrangement shall not exceed the
      Servicing Fees paid to the Servicer hereunder.

    


    ARTICLE
      V

    


    ACCOUNTS;
      DISTRIBUTIONS; STATEMENTS TO THE NOTEHOLDER

     

    Section
      5.1 Establishment
      of Pledged Accounts.

    


    (a) The
      Trustee, on behalf of the Noteholder, shall establish and maintain in its own
      name an Eligible Account (the “Collection
      Account”),
      bearing a designation clearly indicating that the funds deposited therein are
      held for the benefit of the Trustee on behalf of the Noteholder. The Collection
      Account shall initially be established with the Trustee.

    


    (b) The
      Trustee, on behalf of the Noteholder, shall establish and maintain in its own
      name an Eligible Account (the “Note
      Distribution Account”),
      bearing a designation clearly indicating that the funds deposited therein are
      held for the benefit of the Trustee on behalf of the Noteholder. The Note
      Distribution Account shall initially be established with the
      Trustee.

    


    
      
        
        

      

      
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    (c) The
      Trustee, on behalf of the Noteholder shall establish and maintain in its own
      name an Eligible Account (the “Principal
      Funding Account”),
      bearing a designation clearly indicating that the funds deposited therein are
      held for the benefit of the Trustee on behalf of the Noteholder. The Principal
      Funding Account shall initially be established with the Trustee.

    


    (d) The
      Trustee, on behalf of the Noteholder shall establish and maintain in its own
      name an Eligible Account (the “Reserve
      Account”),
      bearing a designation clearly indicating that the funds deposited therein are
      held for the benefit of the Trustee on behalf of the Noteholder. The Reserve
      Account shall initially be established with the Trustee.

    


    (e) Funds
      on
      deposit in the Collection Account, the Principal Funding Account, the Reserve
      Account and the Note Distribution Account (collectively, the “Pledged
      Accounts”)
      shall
      be invested by the Trustee (or any custodian with respect to funds on deposit
      in
      any such account) in Eligible Investments selected in writing by the Servicer
      or, after the resignation or termination of Silverleaf as Servicer, by the
      Noteholder (pursuant to standing instructions or otherwise). All such Eligible
      Investments shall be held by or on behalf of the Trustee for the benefit of
      the
      Noteholder. Other than as permitted by the Rating Agency and the Noteholder,
      funds on deposit in any Pledged Account shall be invested in Eligible
      Investments that will mature so that such funds will be available at the close
      of business on the Business Day immediately preceding the following Settlement
      Date. Funds deposited in a Pledged Account on the day immediately preceding
      a
      Settlement Date upon the maturity of any Eligible Investments are not required
      to be invested overnight. All Eligible Investments will be held to
      maturity.

    


    (f) All
      investment earnings of moneys deposited in the Pledged Accounts shall be
      deposited (or caused to be deposited) by the Trustee in the Collection Account
      for distribution pursuant to Section
      5.7(a),
      and any
      loss resulting from such investments shall be charged to such account. The
      Servicer shall not direct the Trustee to make any investment of any funds held
      in any of the Pledged Accounts unless the security interest granted and
      perfected in such account will continue to be perfected in such investment,
      in
      either case without any further action by any Person, and, in connection with
      any direction to the Trustee to make any such investment, if requested by the
      Trustee, the Servicer shall deliver to the Trustee an Opinion of Counsel,
      acceptable to the Trustee, to such effect.

    


    (g) The
      Trustee shall not in any way be held liable by reason of any insufficiency
      in
      any of the Pledged Accounts resulting from any loss on any Eligible Investment
      included therein except for losses attributable to the Trustee’s negligence, bad
      faith or willful misconduct or its failure to make payments on such Eligible
      Investments issued by the Trustee, in its commercial capacity as principal
      obligor and not as Trustee, in accordance with their terms.

    


    (h) If
      (i)
      the Servicer or the Noteholder, as applicable, shall have failed to give
      investment directions for any funds on deposit in the Pledged Accounts to the
      Trustee by 1:00 p.m. Eastern Time (or such other time as may be agreed by the
      Purchaser and Trustee) on any Business Day; or (ii) an Event of Default shall
      have occurred and be continuing with respect to the Note but the Note shall
      not
      have been declared due and payable, or, if the Note shall have been declared
      due
      and payable following an Event of Default, amounts collected or receivable
      from
      the Receivables and the Other Conveyed Property are being applied as if there
      had not been such a declaration; then the Trustee shall, to the fullest extent
      practicable, invest and reinvest funds in the Pledged Accounts in an Eligible
      Investment described in paragraph (f) of the definition thereof.

    


    (i) The
      Trustee shall possess all right, title and interest in all funds on deposit
      from
      time to time in the Pledged Accounts and in all proceeds thereof (including
      all
      Investment Earnings on the Pledged Accounts) and all such funds, investments,
      proceeds and income shall be part of the Other Conveyed Property. Except as
      otherwise provided herein, the Pledged Accounts shall be under the sole dominion
      and control of the Trustee for the benefit of the Noteholder. If at any time
      any
      of the Pledged Accounts ceases to be an Eligible Account, the Servicer with
      the
      consent of the Noteholder shall within five Business Days establish a new
      Pledged Account as an Eligible Account and shall transfer any cash and/or any
      investments to such new Pledged Account. The Servicer shall promptly notify
      the
      Rating Agency, the Trustee and the Noteholder of any change in the location
      of
      any of the aforementioned accounts. In connection with the foregoing, the
      Servicer agrees that, in the event that any of the Pledged Accounts are not
      accounts with the Trustee, the Servicer shall notify the Trustee and the
      Noteholder in writing promptly upon any of such Pledged Accounts ceasing to
      be
      an Eligible Account.

    


    
      
        
        

      

      
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    (j) The
      parties agree that each Pledged Account is a “securities account” within the
      meaning of Article 8 of the UCC and that all property (including without
      limitation all uninvested funds, securities and other investment property)
      at
      any time deposited in or carried in or credited to the Pledged Accounts shall
      be
      treated as “financial assets” within the meaning of Article 8 of the UCC. The
      Account Intermediary agrees that (i) it is a “securities intermediary” within
      the meaning of Article 8 of the UCC and will at all times act in such capacity
      with respect to the Pledged Accounts and (B) the Trustee is the entitlement
      holder of the Pledged Accounts. The parties agree that the Account Intermediary
      shall follow all “entitlement orders” (as such term is defined in Article 8 of
      the UCC) originated by the Trustee with respect to the Pledged Accounts and
      all
      financial assets deposited or carried in or credited to any Pledged Account.
      Notwithstanding anything to the contrary herein or in any other document
      relating to a Pledged Account, the “securities intermediary’s jurisdiction”
(within the meaning of Section 8-110 of the UCC) with respect to each Pledged
      Account and any security entitlements to financial assets credited thereto
      shall
      be the State of New York.

    


    (k) With
      respect to the Pledged Account Property, the Trustee agrees that:

    


    (i)any
      Pledged Account Property that is held in deposit accounts shall be held solely
      in an Eligible Account; and, except as otherwise provided herein, each such
      Eligible Account shall be subject to the exclusive custody and control of the
      Trustee and the Trustee shall have sole signature authority with respect
      thereto;

    


    (ii)any
      Pledged Account Property shall be delivered to the Trustee in accordance with
      the definition of “Delivery”;
      and

    


    (iii)the
      Servicer shall have the power, revocable by the Noteholder to instruct the
      Trustee to make withdrawals and payments from the Pledged Accounts for the
      purpose of permitting the Servicer and the Trustee to carry out their respective
      duties hereunder.

     

    Section
      5.2 [RESERVED]

    


    Section
      5.3 Certain
      Reimbursements to the Servicer.
      The
      Servicer will be entitled to be reimbursed from amounts on deposit in the
      Collection Account with respect to an Accrual Period for amounts previously
      deposited in the Collection Account but later determined by the Servicer to
      have
      resulted from mistaken deposits or postings or checks returned for insufficient
      funds. The amount to be reimbursed hereunder shall be paid to the Servicer
      on
      the related Settlement Date pursuant to Section
      5.7(a)(iv)
      upon
      certification by the Servicer of such amounts and the provision of such
      information to the Trustee and the Noteholder as may be necessary in the opinion
      of the Noteholder to verify the accuracy of such certification; provided,
      however, that the Servicer must provide such certification within three months
      of it becoming aware of such mistaken deposit, posting or returned check. In
      the
      event that the Noteholder has not received evidence satisfactory to it of the
      Servicer’s entitlement to reimbursement pursuant to this Section, the Noteholder
      shall give the Trustee notice to such effect, following receipt of which the
      Trustee shall not make a distribution to the Servicer in respect of such amount
      pursuant to Section
      5.7,
      or if
      prior thereto the Servicer has been reimbursed pursuant to Section
      5.7,
      the
      Trustee shall withhold such amounts from amounts otherwise distributable to
      the
      Servicer on the next succeeding Settlement Date.

     

    Section
      5.4 [RESERVED]

    


    Section
      5.5 Reserve
      Account.

    


    (a) The
      Reserve Account will be held for the benefit of the Noteholder. On or prior
      to
      the Closing Date, the Purchaser shall deposit or cause to be deposited into
      the
      Reserve Account an amount equal to the Required Reserve Account Amount. On
      each
      Funding Date, the Purchaser shall deposit a portion of the related Advance
      into
      the Reserve Account until the amount on deposit in the Reserve Account equals
      the Required Reserve Account Amount.

    


    
      
        
        

      

      
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    (b) In
      the
      event that the Servicer’s Certificate with respect to any Determination Date
      shall state that the Available Funds with respect to the related Settlement
      Date
      are insufficient to make the payments required to be made on the related
      Settlement Date pursuant to Sections
      5.7(a)(i)
      through
(ix)
      (such
      deficiency being a “Deficiency
      Claim Amount”),
      then
      on the Deficiency Claim Date, the Trustee shall deliver to the Noteholder and
      the Servicer, by hand delivery or facsimile transmission, a written notice
      (a
“Deficiency
      Notice”)
      specifying the Deficiency Claim Amount for such Settlement Date. The Trustee
      shall withdraw an amount equal to such Deficiency Claim Amount from the Reserve
      Account (to the extent of the funds available on deposit therein) for deposit
      in
      the Collection Account on the related Settlement Date and distribution pursuant
      to Sections
      5.7(a)(i)
      through
(ix),
      as
      applicable.

    


    (c) Any
      Deficiency Notice shall be delivered by 10:00 a.m., New York City time, on
      the
      Deficiency Claim Date. The amounts distributed to the Trustee pursuant to a
      Deficiency Notice shall be deposited by the Trustee into the Collection Account
      pursuant to Section
      5.6.

    


    (d) Following
      the Facility Termination Date, all amounts, or any portion thereof, on deposit
      in the Reserve Account will be deposited into the Collection Account for
      distribution pursuant to Section
      5.7.

    


    (e) On
      any
      Settlement Date prior to the Facility Termination Date on which, after all
      distributions required to be made on such Settlement Date pursuant to
Section
      5.7(a)
      have
      been made, the amount on deposit in the Reserve Account exceeds the Required
      Reserve Account Amount, the Trustee shall withdraw such excess (as indicated
      on
      the Servicer’s Certificate) and distribute the same to the Purchaser or its
      designee in accordance with Section
      5.7(a)(xiv).

     

    Section
      5.6 Additional
      Deposits.
      The
      Servicer or the Seller, as the case may be, shall deposit or cause to be
      deposited in the Collection Account (i) the aggregate Purchase Amount with
      respect to Purchased Receivables, (ii) the Upgrade Purchase Price with respect
      to the prepayment of any Upgraded Timeshare Loan, (iii) the Upgrade Purchase
      Price with respect to the sale of any Timeshare Loan pursuant to Section 3.2(d)
      hereof, (iv) the Default Purchase Price with respect to the optional purchase
      of
      any Defaulted Timeshare Loan, and (v) all Substitution Shortfall Amounts with
      respect to substituted Receivables. All such deposits shall be made, in
      immediately available funds, on the Business Day preceding the related
      Determination Date. On the Deficiency Claim Date, the Trustee shall remit to
      the
      Collection Account any amounts withdrawn from the Reserve Account pursuant
      to
Section
      5.5.

     

    Section
      5.7 Distributions.

    


    (a) On
      each
      Settlement Date, the Trustee (based on the information contained in the
      Servicer’s Certificate delivered on the related Determination Date) shall make
      the following distributions in the following order of priority from amounts
      on
      deposit in the Collection Account:

    


    (i)to
      the
      Noteholder, any payments from the Hedge Counterparty to the extent they are
      due
      and payable in an amount equal to the excess, if any, of the Noteholder’s
      Monthly Interest Distributable Amount over Capped Monthly Interest, in respect
      of the Noteholder’s Interest Distributable Amount;

    


    (ii)to
      the
      Hedge Counterparty, from Available Funds and any amounts deposited in the
      Collection Account pursuant to Section
      5.5(b)
      and
Section
      5.5(d)
      in
      respect of Hedge Counterparty Scheduled Fees;

    


    (iii)to
      the
      Trustee, from Available Funds and any amounts deposited in the Collection
      Account pursuant to Section
      5.5(b)
      and
Section
      5.5(d),
      the
      Trustee Fee, any accrued and unpaid Trustee Fees from prior Settlement Dates
      and
      all reasonable out-of-pocket expenses (including reasonable counsel fees and
      expenses) from prior Accrual Periods; provided however,
      that
      any reasonable out-of-pocket expenses payable to the Trustee pursuant to this
      clause (iii) that are incurred and not reimbursed in connection with the
      Trustee’s obligations and duties under the Basic Documents shall be limited to
      $10,000 per Settlement Date;

    


    
      
        
        

      

      
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    (iv)to
      the
      Servicer, from Available Funds and any amounts deposited in the Collection
      Account pursuant to Section
      5.5(b)
      and
Section
      5.5(d),
      in
      respect of the Servicing Fee and all unpaid Servicing Fees from prior Accrual
      Periods, all reimbursements to which the Servicer is entitled pursuant to
Section
      5.3
      and, if
      the Servicer is a successor Servicer, to the extent not previously paid by
      the
      predecessor Servicer pursuant to this Agreement, reasonable transition expenses
      (up to a maximum of $100,000 in the aggregate over the term of this Agreement)
      incurred in becoming the successor Servicer;

    


    (v)to
      the
      Backup Servicer, from Available Funds and any amounts deposited in the
      Collection Account pursuant to Section 5.5(b)
      and
Section
      5.5(d),
      in
      respect of the Backup Servicing Fee (so long as the Backup Servicer is not
      acting as successor Servicer), and all reasonable out-of-pocket expenses (other
      than expenses incurred in connection with transitioning the servicing to the
      Backup Servicer) thereof (including reasonable counsel fees and expenses) and
      all accrued and unpaid Backup Servicing Fees (so long as the Backup Servicer
      is
      not acting as successor Servicer) from prior Settlement Dates; provided,
      however,
      that
      any reasonable out-of-pocket expenses payable to the Backup Servicer pursuant
      to
      this clause
      (v)
      that
      are incurred and not reimbursed in connection with the Backup Servicer’s
      obligations and duties under the Basic Documents shall be limited to a total
      of
      $10,000 per annum;

    


    (vi)to
      the
      extent not paid by the Servicer, to the Custodian, the Custodian Fee, plus
      any
      accrued and unpaid Custodian Fees with respect to prior Settlement
      Dates;

    


    (vii)to
      the
      extent not paid by the Servicer, to the Lockbox Bank, the Lockbox Fee, plus
      any
      accrued and unpaid Lockbox Fees from prior Settlement Dates;

    


    (viii)to
      the
      Note Distribution Account, from Available Funds and any amounts deposited in
      the
      Collection Account pursuant to Section
      5.5(b)
      and
Section
      5.5(d),
      the
      remaining Noteholder’s Interest Distributable Amount after giving effect to
Section
      5.7(a)(i)
      hereof
      and the unused facility fee payable pursuant to Section
      3.02(b)
      of the
      Note Purchase Agreement;

    


    (ix)to
      the
      Note Distribution Account, from Available Funds and any amounts deposited in
      the
      Collection Account pursuant to Section
      5.5(b)
      and
Section
      5.5(d),
      the
      Noteholder’s Principal Distributable Amount for such Accrual
      Period;

    


    (x)to
      the
      Trustee, for deposit in the Reserve Account, from Available Funds, an amount
      equal to the excess of (A) the Required Reserve Account Amount for such
      Settlement Date over (B) the amount on deposit in the Reserve
      Account;

    


    (xi)to
      the
      Note Distribution Account, from Available Funds, to the Noteholder in respect
      of
      any amounts owed to the Noteholder pursuant to Sections
      3.03
      and
3.04
      of the
      Note Purchase Agreement;

    


    (xii)to
      the
      Hedge Counterparty, from Available Funds and any amounts deposited in the
      Collection Account pursuant to Section
      5.5(d),
      in
      respect of Hedge Counterparty Termination Fees;

    


    (xiii)to
      the
      Trustee and the Backup Servicer from Available Funds and any amounts deposited
      in the Collection Account pursuant to Section
      5.5(d),
      in
      respect of reasonable out-of-pocket expenses thereof (including reasonable
      counsel fees and expenses) and reasonable out-of-pocket expenses (including
      reasonable counsel fees and expenses) from prior Accrual Periods to the extent
      not paid thereto pursuant to Section
      5.7(a)(iii)
      and
(v)
      above;
      and

    


    
      
        
        

      

      
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    (xiv)to
      the
      Purchaser, the remaining Available Funds, if any, and any amounts deposited
      in
      the Collection Account pursuant to Section
      5.5(d) and
      any
      amounts released from the Reserve Account pursuant to Section
      5.5(e).

    


    (b) In
      the
      event that the Collection Account is maintained with an institution other than
      the Trustee, the Servicer shall instruct and cause such institution to make
      all
      deposits and distributions pursuant to Section
      5.7(a)
      on the
      related Settlement Date.

     

    Section
      5.8 Note
      Distribution Account.

    


    (a) On
      each
      Settlement Date (based solely on the information contained in the Servicer’s
      Certificate), the Trustee shall distribute all amounts on deposit in the Note
      Distribution Account to the Noteholder in respect of the Note to the extent
      of
      amounts due and unpaid on the Note for principal and interest in the following
      amounts and in the following order of priority:

    


    (i)to
      the
      Noteholder, the Noteholder’s Interest Distributable Amount; provided that if
      there are not sufficient funds in the Note Distribution Account to pay the
      entire amount then due on the Note, the amount in the Note Distribution Account
      shall be applied to the payment of such interest pro rata among the Holders
      of
      the Note;

    


    (ii)to
      the
      Noteholder, in reduction of the Invested Amount, the Noteholder’s Principal
      Distributable Amount to pay principal on the Note until the outstanding
      principal amount of the Note has been reduced to zero; provided
      that if
      there are not sufficient funds in the Note Distribution Account to pay the
      entire amount then due on the Note, the amount in the Note Distribution Account
      shall be applied to the payment of such principal pro rata among the Holders
      of
      the Note;

    


    (iii)to
      the
      Noteholder, any other amounts due the Noteholder pursuant to the Basic
      Documents.

    


    (b) On
      each
      Settlement Date, the Trustee shall provide or make available electronically
      in
      accordance with Section
      5.9(c)
      (or,
      upon written request, by first class mail or facsimile) to the Noteholder the
      statement or statements provided to the Trustee by the Servicer pursuant to
      Section
      5.9
      hereof
      on such Settlement Date; provided however,
      the
      Trustee shall have no obligation to provide such information described in this
      Section
      5.8(b)
      until
      it has received the requisite information from the Servicer.

     

    Section
      5.9 Statements
      to the Noteholder.

    


    (a) On
      each
      Determination Date (in accordance with Section
      4.9),
      the
      Servicer shall provide to the Trustee, the Rating Agency and the Noteholder
      as
      of the related Record Date a copy of the Servicer’s Certificate substantially in
      the form attached hereto as Exhibit
      A.
      

    


    (b) Within
      60
      days after the end of each calendar year, commencing February 28, 2007, the
      Servicer shall deliver to the Trustee, and the Trustee shall, provided it has
      received the necessary information from the Servicer, promptly thereafter
      furnish to the Noteholder (a) a report (prepared by the Servicer) as to the
      aggregate of the amounts reported pursuant to Sections I, IV, V and VII of
      the
      Servicer’s Certificate for such preceding calendar year, and (b) such
      information as may be reasonably requested by the Noteholder or required by
      the
      Code and regulations thereunder, to enable the Noteholder to prepare its Federal
      and State income tax returns. The obligation of the Trustee set forth in this
      paragraph shall be deemed to have been satisfied to the extent that
      substantially comparable information shall be provided by the Servicer to the
      Noteholder pursuant to any requirements of the Code.

    


    
      
        
        

      

      
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    (c) The
      Trustee may make available to the Noteholder and the Rating Agency via the
      Trustee’s Internet Website, all statements described herein and, with the
      consent or at the direction of the Seller, such other information regarding
      the
      Note and/or the Receivables as the Trustee may have in its possession, but
      only
      with the use of a password provided by the Trustee. The Trustee will make no
      representation or warranties as to the accuracy or completeness of such
      documents and will assume no responsibility therefore. The Trustee’s Internet
      Website shall be initially located at www.CTSLink.com
      or at
      such other address as shall be specified by the Trustee from time to time in
      writing to the Noteholder. In connection with providing access to the Trustee’s
      Internet Website, the Trustee may require registration and the acceptance of
      a
      disclaimer. The Trustee shall not be liable for the dissemination of information
      in accordance with this Agreement.

    


    ARTICLE
      VI

    


    [RESERVED]

    


    ARTICLE
      VII

    


    THE
      PURCHASER

     

    Section
      7.1 Representations
      of Purchaser.
      The
      Purchaser makes the following representations on which the Noteholder shall
      be
      deemed to have relied in purchasing the Note. The representations speak as
      of
      the execution and delivery of this Agreement, as of the Closing Date and as
      of
      each Funding Date, and shall survive the sale of the Receivables and the Other
      Conveyed Property to the Purchaser and the pledge thereof by the Purchaser
      to
      the Trustee pursuant to the Indenture.

    


    (a) Organization
      and Good Standing.
      The
      Purchaser has been duly formed and is validly existing as a limited liability
      company solely under the laws of the state of Delaware and is in good standing
      under the laws of the State of Delaware, with power and authority to own its
      properties and to conduct its business as such properties are currently owned
      and such business is currently conducted, and had at all relevant times, and
      now
      has, power, authority and legal right to acquire, own and pledge the Receivables
      and the Other Conveyed Property pledged to the Trustee.

    


    (b) Due
      Qualification.
      The
      Purchaser is duly qualified to do business as a foreign limited liability
      company in good standing, and has obtained all necessary licenses and approvals
      in all jurisdictions in which the ownership or lease of property or the conduct
      of its business shall require such qualifications.

    


    (c) Power
      and Authority.
      The
      Purchaser has the power (corporate and other) and authority to execute and
      deliver this Agreement and the other Basic Documents to which it is a party
      and
      to carry out its terms and their terms, respectively; the Purchaser has full
      power and authority to pledge the Collateral to be pledged to the Trustee by
      it
      pursuant to the Indenture and has duly authorized such pledge to the Trustee
      by
      all necessary corporate action; and the execution, delivery and performance
      of
      this Agreement and the Basic Documents to which the Purchaser is a party have
      been duly authorized by the Purchaser by all necessary action.

    


    (d) Valid
      Sale; Binding Obligations.
      This
      Agreement effects a valid sale of the Receivables and the Other Conveyed
      Property, enforceable against the Seller and creditors of and purchasers from
      the Seller, and this Agreement and the other Basic Documents to which the
      Purchaser is a party, when duly executed and delivered, shall constitute legal,
      valid and binding obligations of the Purchaser enforceable in accordance with
      their respective terms, except as enforceability may be limited by bankruptcy,
      insolvency, reorganization or other similar laws affecting the enforcement
      of
      creditors’ rights generally and by equitable limitations on the availability of
      specific remedies, regardless of whether such enforceability is considered
      in a
      proceeding in equity or at law.

    


    (e) No
      Violation.
      The
      consummation of the transactions contemplated by this Agreement and the other
      Basic Documents and the fulfillment of the terms of this Agreement and the
      other
      Basic Documents shall not conflict with, result in any breach of any of the
      terms and provisions of or constitute (with or without notice, lapse of time
      or
      both) a default under the Limited Liability Company Agreement of the Purchaser,
      or any indenture, agreement, mortgage, deed of trust or other instrument to
      which the Purchaser is a party or by which it is bound, or result in the
      creation or imposition of any Lien upon any of its properties pursuant to the
      terms of any such indenture, agreement, mortgage, deed of trust or other
      instrument, other than the Basic Documents, or violate any law, order, rule
      or
      regulation applicable to the Purchaser of any court or of any federal or state
      regulatory body, administrative agency or other governmental instrumentality
      having jurisdiction over the Purchaser or any of its properties.

    


    
      
        
        

      

      
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    (f) No
      Proceedings.
      There
      are no proceedings or investigations pending or, to the Purchaser’s knowledge,
      threatened against the Purchaser, before any court, regulatory body,
      administrative agency or other tribunal or governmental instrumentality having
      jurisdiction over the Purchaser or its properties (A) asserting the invalidity
      of this Agreement, the Note or any of the Basic Documents, (B) seeking to
      prevent the issuance of the Note or the consummation of any of the transactions
      contemplated by this Agreement or any of the Basic Documents, (C) seeking any
      determination or ruling that might materially and adversely affect the
      performance by the Purchaser of its obligations under, or the validity or
      enforceability of, this Agreement or any of the Basic Documents, or (D) relating
      to the Purchaser and which might adversely affect the federal or state income,
      excise, franchise or similar tax attributes of the Note.

    


    (g) No
      Consents.
      No
      consent, approval, authorization or order of or declaration or filing with
      any
      governmental authority is required for the issuance or sale of the Note or
      the
      consummation of the other transactions contemplated by this Agreement, except
      such as have been duly made or obtained or as may be required by the Basic
      Documents.

    


    (h) Tax
      Returns.
      The
      Purchaser has filed all federal and state tax returns which are required to
      be
      filed and paid all taxes, including any assessments received by it, to the
      extent that such taxes have become due. Any taxes, fees and other governmental
      charges payable by the Purchaser in connection with consummation of the
      transactions contemplated by this Agreement and the other Basic Documents to
      which the Purchaser is a party and the fulfillment of the terms of this
      Agreement and the other Basic Documents to which the Purchaser is a party have
      been paid or shall have been paid at or prior to the Closing Date and as of
      each
      Funding Date.

    


    (i) Chief
      Executive Office.
      The
      chief executive office of the Purchaser is at 1221 River Bend Drive, Suite
      120,
      Dallas, Texas 75247.

    


    ARTICLE
      VIII

    


    THE
      SELLER

     

    Section
      8.1 Representations
      of Seller.
      The
      Seller makes the following representations on which the Purchaser is deemed
      to
      have relied in acquiring the Receivables and the Other Conveyed Property and
      on
      which the Noteholder is deemed to have relied in purchasing the Note. The
      representations speak as of the execution and delivery of this Agreement, as
      of
      the Closing Date and as of each Funding Date, and shall survive the sale of
      the
      Receivables and the Other Conveyed Property to the Purchaser and the pledge
      thereof by the Purchaser to the Trustee pursuant to the Indenture.

    


    (a) Organization
      and Good Standing.
      The
      Seller has been duly organized and is validly existing as a corporation solely
      under the laws of the State of Texas and is in good standing under the laws
      of
      the State of Texas, with power and authority to own its properties and to
      conduct its business as such properties are currently owned and such business
      is
      currently conducted, and had at all relevant times, and now has, power,
      authority and legal right to acquire, own and sell the Receivables and the
      Other
      Conveyed Property transferred to the Purchaser and to perform its other
      obligations under this Agreement and any other Basic Documents to which it
      is a
      party.

    


    
      
        
        

      

      
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    (b) Due
      Qualification.
      The
      Seller is duly qualified to do business as a foreign corporation in good
      standing, and has obtained all necessary licenses and approvals in all
      jurisdictions in which the ownership or lease of property or the conduct of
      its
      business (including the origination, sale and servicing of the Receivables
      and
      the Other Conveyed Property as required by this Agreement) shall require such
      qualifications.

    


    (c) Power
      and Authority.
      The
      Seller has the power (corporate and other) and authority to execute and deliver
      this Agreement and the other Basic Documents to which it is a party and to
      carry
      out its terms and their terms, respectively; the Seller has full power and
      authority to sell and assign the Receivables and the Other Conveyed Property
      to
      be sold and assigned to and deposited with the Purchaser by it and has duly
      authorized such sale and assignment to the Purchaser by all necessary corporate
      action; and the execution, delivery and performance of this Agreement and the
      other Basic Documents to which the Seller is a party have been duly authorized
      by the Seller by all necessary corporate action.

    


    (d) Valid
      Sale; Binding Obligations.
      This
      Agreement effects a valid sale, transfer and assignment of the Receivables
      and
      the Other Conveyed Property to the Purchaser, is enforceable against the Seller
      and creditors of and purchasers from the Seller; and this Agreement and the
      other Basic Documents to which the Seller is a party, when duly executed and
      delivered, shall constitute legal, valid and binding obligations of the Seller
      enforceable in accordance with their respective terms, except as enforceability
      may be limited, by bankruptcy, insolvency, reorganization or other similar
      laws
      affecting the enforcement of creditors’ rights generally and by equitable
      limitations on the availability of specific remedies, regardless of whether
      such
      enforceability is considered in a proceeding in equity or at law.

    


    (e) No
      Violation.
      The
      consummation of the transactions contemplated by this Agreement and the other
      Basic Documents and the fulfillment of the terms of this Agreement and the
      other
      Basic Documents does not and will not conflict with, result in any breach of
      any
      of the terms and provisions of or constitute (with or without notice, lapse
      of
      time or both) a default under the certificate of incorporation or by-laws of
      the
      Seller, or any indenture, agreement, mortgage, deed of trust or other instrument
      to which the Seller is a party or by which it is bound, or result in the
      creation or imposition of any Lien upon any of its properties pursuant to the
      terms of any such indenture, agreement, mortgage, deed of trust or other
      instrument, other than the Basic Documents, or violate any law (including any
      bulk transfer laws), judgment, decree, writ, injunction, award, determination,
      order, rule or regulation applicable to the Seller of any court or of any
      federal or state regulatory body, administrative agency or other governmental
      instrumentality having jurisdiction over the Seller or any of its
      properties.

    


    (f) No
      Proceedings.
      There
      are no proceedings or investigations pending or, to the Seller’s knowledge,
      threatened against the Seller, before any court, regulatory body, administrative
      agency or other tribunal or governmental instrumentality having jurisdiction
      over the Seller or its properties (A) asserting the invalidity of this
      Agreement, the Note or any of the other Basic Documents, (B) seeking to prevent
      the issuance of the Note or the consummation of any of the transactions
      contemplated by this Agreement or any of the other Basic Documents, (C) seeking
      any determination or ruling that might materially and adversely affect the
      performance by the Seller of its obligations under, or the validity or
      enforceability of, this Agreement or any of the other Basic Documents, (D)
      relating to the Seller and which might adversely affect the federal or state
      income, excise, franchise or similar tax attributes of the Note, or (E) that
      if
      decided adversely, would materially and adversely affect its ability to
      foreclose or otherwise enforce the Liens of the Timeshare Loans, or any
      Timeshare Loan or title of any Obligor to any related Timeshare
      Property.

    


    (g) No
      Consents.
      No
      consent, approval, authorization or order of or declaration or filing with
      any
      governmental authority is required for the issuance or sale of the Note or
      the
      consummation of the other transactions contemplated by this Agreement and the
      other Basic Documents or the execution and delivery thereof, except such as
      have
      been duly made or obtained.

    


    (h) Financial
      Condition.
      The
      Seller has a positive net worth and is able to and does pay its liabilities
      as
      they mature. The Seller is not in default under any obligation to pay money
      to
      any Person except for matters being disputed in good faith which do not involve
      an obligation of the Seller on a promissory note. The Seller will not use the
      proceeds from the transactions contemplated by the Basic Documents to give
      any
      preference to any creditor or class of creditors, and this transaction will
      not
      render the Seller insolvent and will not leave the Seller with remaining assets
      which are unreasonably small compared to its ongoing operations.

    


    
      
        
        

      

      
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    (i) Fraudulent
      Conveyance.
      The
      Seller is not selling the Receivables and the Other Conveyed Property to the
      Purchaser with any intent to hinder, delay or defraud any of its creditors;
      the
      Seller will not be rendered insolvent as a result of the sale of the Receivables
      and the Other Conveyed Property to the Purchaser.

    


    (j) Tax
      Returns.
      The
      Seller has filed all material federal and state tax returns which are required
      to be filed and paid all material taxes, including any assessments received
      by
      it, to the extent that such taxes have become due (other than taxes, the amount
      or validity of which are currently being contested in good faith by appropriate
      proceedings and with respect to which reserves in conformity with GAAP have
      been
      provided on the books of the Seller). Any taxes, fees and other governmental
      charges payable by the Seller in connection with consummation of the
      transactions contemplated by this Agreement and the other Basic Documents to
      which the Seller is a party and the fulfillment of the terms of this Agreement
      and the other Basic Documents to which the Seller is a party have been paid
      or
      shall have been paid as of each Funding Date.

    


    (k) Chief
      Executive Office.
      The
      Seller has more than one place of business, and the chief executive office
      of
      the Seller is at 1221 River Bend Drive, Suite 120, Dallas, Texas 75247, and
      its
      organizational number is 75-2259890.

    


    (l) Certificate,
      Statements and Reports.
      The
      officer’s certificates, statements, reports and other documents prepared by
      Seller and furnished by Seller to the Purchaser, the Trustee or the Noteholder
      pursuant to this Agreement or any other Basic Document to which it is a party,
      and in connection with the transactions contemplated hereby or thereby, when
      taken as a whole, do not and will not contain any untrue statement of a material
      fact or omit to state a material fact necessary to make the statements contained
      herein or therein not misleading. There are no facts known to the Seller which,
      individually or in the aggregate, materially adversely affect, or which (aside
      from general economic trends) may reasonably be expected to materially adversely
      affect in the future, its financial condition or assets or business, or which
      may impair its ability to perform its obligations under this Agreement or any
      other Basic Document, which have not been disclosed herein or therein or in
      the
      certificates and other documents furnished to the Noteholder by or on its behalf
      specifically for use in connection with the transactions contemplated hereby
      or
      thereby.

    


    (m) Legal
      Counsel, etc.
      Seller
      consulted with its own legal counsel and independent accountants to the extent
      it deems necessary regarding the tax, accounting and regulatory consequences
      of
      the transactions contemplated hereby, Seller is not participating in such
      transactions in reliance on any representations of any other party, their
      affiliates, or their counsel with respect to tax, accounting and regulatory
      matters.

    


    (n) No
      Material Adverse Change.
      No
      Material Adverse Change has occurred with respect to the Seller since the end
      of
      the quarter reported on in the Seller’s Form 10-Q filed with the Commission on
      November 10, 2005.

    


    (o) No
      Default.
      The
      Seller is not in default in the performance, observance or fulfillment of any
      of
      the obligations, covenants or conditions contained in, and is not otherwise
      in
      default under (i) any law or statute applicable to it, including, without
      limitation, any Consumer Law, (ii) any judgment, decree, writ, injunction,
      order, award or other action of any court or governmental authority or
      arbitrator or any order, rule or regulation of any federal, state, county,
      municipal or other governmental or public authority or agency having or
      asserting jurisdiction over it or any of its properties or (iii) (x) any
      indebtedness or any instrument or agreement under or pursuant to which any
      such
      indebtedness has been, or could be, issued or incurred or (y) any other
      instrument or agreement to which it is a party or by which it is bound or any
      of
      its properties is affected, including, without limitation, the Basic Documents,
      which either individually or in the aggregate, (A) could reasonably be expected
      to result in a Material Adverse Change with respect to the Seller, or in any
      impairment of the right or ability of the Seller to carry on its business
      substantially as now conducted or (B) could reasonably be expected to materially
      and adversely affect the Seller’s performance of its obligations hereunder, or
      the validity or enforceability of this Agreement or the other Basic
      Documents.

    


    
      
        
        

      

      
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    (p) Possession
      of Licenses, Certificates, Franchises and Permits.
      The
      Seller holds all licenses, certificates, franchises and permits from all
      governmental authorities necessary for the conduct of its business, except
      where
      the failure to hold such licenses, certificates, franchises and permits would
      not materially and adversely affect its ability to perform its obligations
      under
      this Agreement or any other Basic Document to which it is a party or under
      the
      transactions contemplated hereunder or thereunder or the validity or
      enforceability of the Receivables or the Timeshare Loans, and has received
      no
      notice of proceedings relating to the revocation of any such license,
      certificate, franchise or permit, which singly or in the aggregate, if the
      subject of an unfavorable decision, ruling or finding, would materially and
      adversely affect its ability to perform its obligations under this Agreement
      or
      any other Basic Document to which it is a party or under the transactions
      contemplated hereunder or thereunder or the validity or enforceability of the
      Receivables or the Timeshare Loans.

    


    (q) Foreign
      Tax Liability.
      The
      Seller is not aware of any Obligor under a Timeshare Loan who has withheld
      any
      portion of payments due under such Timeshare Loan because of the requirements
      of
      a foreign taxing authority, and no foreign taxing authority has contacted it
      concerning a withholding or other foreign tax liability.

    


    (r) No
      Deficiency Accumulation.
      The
      Seller is not aware of any outstanding “accumulated funding deficiency” (as such
      term is defined under ERISA and the Code) with respect to any “employee benefit
      plan” (as such term is defined under ERISA) sponsored by it.

    


    (s) Securities
      Laws.
      The
      Seller 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. No portion of the Purchase Price for each of the Receivables and
      the
      Other Conveyed Property will be used by it to acquire any security in any
      transaction which is subject to Section 13 or Section 14 of the Securities
      Exchange Act of 1934, as amended.

    


    (t) Transactions
      in Ordinary Course.
      The
      transactions contemplated by this Agreement are in the ordinary course of
      business of the Seller.

    


    (u) Name.
      The
      legal name of the Seller is as set forth in the signature page of this Agreement
      and the Seller does not have any tradenames, fictitious names, assumed names
      or
“doing business as” names.

     

    Section
      8.2 Additional
      Covenants of the Seller.

    


    (a) Sale.
      The
      Seller agrees to treat the conveyances hereunder for all purposes (including
      without limitation tax and financial accounting purposes) as sales on all
      relevant books, records, tax returns, financial statements and other applicable
      documents.

    


    (b) Non-Petition.
      In the
      event of any breach of a representation and warranty made by the Purchaser
      hereunder, the Seller covenants and agrees that it will not take any action
      to
      pursue any remedy that it may have hereunder, in law, in equity or otherwise,
      until a year and a day have passed since the date on which the Note issued
      by
      the Purchaser has been paid in full. The Purchaser and the Seller agree that
      damages will not be an adequate remedy for breach of this covenant and that
      this
      covenant may be specifically enforced by the Purchaser, and by the Trustee
      on
      behalf of the Noteholder.

    


    
      
        
        

      

      
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    (c) Changes
      to Credit Policy.
      The
      Seller covenants that it will not make, or permit to be made, any material
      changes to the Credit Policy unless (i) the Noteholder expressly consents in
      writing prior to such changes (such consent not to be unreasonably withheld)
      and
      (ii) after giving effect to any such changes, the Rating Agency Condition is
      satisfied.

    


    (d) Compliance
      with Laws.
      The
      Seller shall comply with all applicable laws, rules, regulations and orders
      applicable to it and its business and properties except where the failure to
      comply will not have a material adverse effect on its business or its ability
      to
      perform its obligations under this Agreement or any other Basic Document to
      which it is a party or under the transactions contemplated hereunder or
      thereunder or the validity or enforceability of the Receivables and the Other
      Conveyed Property.

    


    (e) Maintain
      of Existence.
      The
      Seller shall preserve and maintain for itself its existence (corporate or
      otherwise), rights, franchises and privileges in the jurisdiction of its
      organization and except where the failure to so preserve and maintain will
      not
      have a material adverse effect on its business or its ability to perform its
      obligations under this Agreement or any other Basic Document to which it is
      a
      party or under the transactions contemplated hereunder or thereunder or the
      validity of enforceability of the Receivables and the Other Conveyed
      Property.

    


    (f) Ownership
      Inquiries.
      The
      Seller shall respond to any inquiries with respect to ownership of a Receivable
      and the related Other Conveyed Property by stating that such Receivable and
      the
      related Other Conveyed Property has been sold to the Purchaser and that the
      Purchaser is the owner of such Receivable and the related Other Conveyed
      Property.

    


    (g) Change
      of Name.
      Any
      change in the legal name of the Seller and any use by it of any tradename,
      fictitious name, assumed name or “doing business as” name occurring after the
      Closing Date shall be promptly disclosed to the Purchaser, the Trustee and
      the
      Noteholder in writing.

    


    (h) Maintain
      Principal Place of Business.
      The
      Seller shall keep its principal place of business and chief executive office
      and
      the office where it keeps its records concerning the Receivables or the Other
      Conveyed Property at the address of the Seller listed herein.

    


    (i) Payment
      of Taxes.
      In the
      event that the Seller or the Purchaser or any assignee of the Purchaser should
      receive actual notice of any transfer taxes arising out of the transfer,
      assignment and conveyance of a Receivable or related Other Conveyed Property
      from the Seller to the Purchaser, on written demand by the Purchaser or its
      assignee, or upon the Seller otherwise being given notice thereof, the Seller
      shall pay, and otherwise indemnify and hold the Purchaser, and any subsequent
      assignee harmless, on an after-tax basis, from and against any and all such
      transfer taxes.

    


    (j) Filing
      Continuation Statements.
      The
      Seller authorizes the Purchaser and the Trustee to file continuation statements,
      and amendments thereto, relating to the Receivables and the Other Conveyed
      Property and all payments made with regard thereto without the signature of
      the
      Seller where permitted by law. A photocopy or other reproduction of this
      Agreement shall be sufficient as a financing statement where permitted by law.
      The Seller confirms that it is not its present intention to file a photocopy
      or
      other reproduction of this Agreement as a financing statement.

    


    (k) Accounting
      for Transfer.
      The
      Seller shall not prepare any financial statements or other statements (including
      any tax filings) which shall account for the transactions contemplated by this
      Agreement in any manner other than as the sale of, or a capital contribution
      of,
      the Receivables and the Other Conveyed Property by the Seller to the
      Purchaser.

    


    (l) Effect
      on Purchaser.
      The
      Seller shall not take any action or fail to take any action if, as a result
      of
      such action or failure to act, the Purchaser, in its capacity as Purchaser
      hereunder or as the Issuer under the Indenture or any other Basic Document,
      will
      be, or is reasonably likely to be, in breach of any of its representations,
      warranties or covenants under any Basic Documents or otherwise unable to perform
      any of its obligations thereunder. 

    


    
      
        
        

      

      
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    (m) Waiver
      of Stay or Extension Laws.
      The
      Seller covenants (to the extent it may lawfully do so) that it will not at
      any
      time insist upon, plead, or in any manner whatsoever claim or take the benefit
      or advantage of, any stay or extension law wherever enacted, now or at any
      time
      hereafter in force, that may affect the covenants or the performance of this
      Agreement; and the Seller (to the extent that it may lawfully do so) hereby
      expressly waives all benefit or advantage of any such law, and covenants that
      it
      will not hinder, delay or impede the execution of any power and any right of
      the
      Seller to take such action shall be suspended. 

    


    (n) Substantive
      Consolidation.
      The
      Seller shall not take any action or fail to take any action if, as a result
      of
      such action or failure to act, the Purchaser, in its capacity as Purchaser
      hereunder or as the Issuer under the Indenture or any other Basic Document,
      will
      be, or is reasonably likely to be, substantively consolidated with the Seller.
      

     

    Section
      8.3 Liability
      of Seller; Indemnities.
      Subject
      to the limitation of remedies set forth in Section
      3.2
      hereof
      with respect to a breach of any representations, warranties or covenants
      contained in Section
      3.1
      hereof,
      the Seller shall indemnify the Purchaser, the Servicer (so long as it is a
      party
      other than Silverleaf) the Backup Servicer, the Trustee, the Custodian, the
      Noteholder and their respective officers, directors, agents and employees
      (collectively, the “Indemnified
      Parties”)
      for
      any and all costs, expenses, losses, damages, claims and liabilities (including
      reasonable legal fees and related costs), that any of the Indemnified Parties
      may sustain arising out of or as a result of the failure of a Receivable or
      related Timeshare Loan to be originated in compliance with all requirements
      of
      law and for any breach of any of its representations, warranties, covenants
      or
      other agreements contained herein or in the other Basic Documents to which
      it is
      a party.

    


    (a) The
      Seller shall defend, indemnify, and hold harmless the Indemnified Parties from
      and against any and all costs, expenses, losses, damages, claims, and
      liabilities (including reasonable legal fees and related costs), arising out
      of
      or resulting from the use, ownership, or operation by the Seller, any Affiliate
      thereof or any of their respective agents or subcontractors, of a Resort or
      Timeshare Property, or out of non-compliance by the Seller or any Affiliate
      thereof with any applicable laws, rules or regulations relating thereto or
      relating to origination of Timeshare Loans or the documentation in connection
      therewith. 

    


    (b) The
      Seller shall indemnify, defend and hold harmless the Indemnified Parties from
      and against any taxes that may at any time be asserted against any such Person
      with respect to the transactions contemplated in this Agreement and any of
      the
      other Basic Documents (except any income taxes arising out of fees paid to
      the
      Trustee and the Backup Servicer and except any taxes to which the Trustee may
      otherwise be subject), including without limitation any sales, gross receipts,
      general corporation, tangible personal property, privilege or license taxes
      (but, in the case of the Purchaser, not including any taxes asserted with
      respect to federal or other income taxes arising out of distributions on the
      Note) and costs and expenses in defending against the same.

    


    (c) The
      Seller shall indemnify, defend and hold harmless the Indemnified Parties, from
      and against any and all costs, expenses, losses, damages and liabilities
      (including reasonable legal fees and related costs) incurred by reason of (i)
      the Seller’s willful misfeasance, bad faith or negligence in the performance of
      its duties under this Agreement or any of the other Basic Documents, or by
      reason of reckless disregard of its obligations and duties under this Agreement
      and/or (ii) the Seller’s or the Purchaser’s violation of Federal or state
      securities laws in connection with the offering and sale of the
      Note.

    


    (d) The
      Seller shall indemnify, defend and hold harmless the Trustee and the Backup
      Servicer and its officers, directors, employees and agents from and against
      any
      and all costs, expenses, losses, damages, claims and liabilities (including
      reasonable legal fees and related costs), arising out of, or incurred in
      connection with the acceptance or performance of the trusts and duties set
      forth
      herein and in the other Basic Documents except to the extent that such cost,
      expense, loss, claim, damage or liability shall be due to the willful
      misfeasance, bad faith or negligence (except for errors in judgment) of the
      Trustee or the Backup Servicer.

    


    
      
        
        

      

      
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    Indemnification
      under this Section shall survive the resignation or removal of the Servicer
      or
      the Trustee and the termination of this Agreement and the other Basic Documents,
      as applicable, and shall include reasonable fees and expenses of counsel and
      other expenses of litigation. If the Seller shall have made any indemnity
      payments pursuant to this Section and the Person to or on behalf of whom such
      payments are made thereafter shall collect any of such amounts from others,
      such
      Person shall promptly repay such amounts to the Seller, without
      interest.

    


    Notwithstanding
      any provision of this Section
      8.3
      or any
      other provision of this Agreement, nothing herein shall be construed as to
      require the Seller to provide any indemnification hereunder or under any other
      Basic Document for any costs, expenses, losses, claims, damages or liabilities
      arising out of, or incurred in connection with, credit losses with respect
      to
      the Receivables.

     

    Section
      8.4 Merger
      or Consolidation of Seller.
      Seller
      shall not merge or consolidate with any other person, convey, transfer or lease
      substantially all its assets as an entirety to another Person, or permit any
      other Person to become the successor to Seller’s business unless, after the
      merger, consolidation, conveyance, transfer, lease or succession, the Seller
      is
      the surviving entity and shall be capable of fulfilling its duties contained
      in
      this Agreement and the other Basic Documents. Nothing contained herein shall
      be
      deemed to release Seller or Servicer from any obligation. Seller shall provide
      notice of any merger, consolidation or succession pursuant to this Section
      to
      the Trustee, the Noteholder and each Rating Agency. Notwithstanding the
      foregoing, Seller shall not merge or consolidate with any other Person or permit
      any other Person to become a successor to Seller’s business, unless (x)
      immediately after giving effect to such transaction, no representation or
      warranty made pursuant to Section
      8.1
      shall
      have been breached (for purposes hereof, such representations and warranties
      shall be deemed made as of the date of the consummation of such transaction)
      and
      no event that, after notice or lapse of time, or both, would become an Event
      of
      Default shall have occurred and be continuing, (y) Seller shall have delivered
      to the Trustee, the Rating Agency and the Noteholder an Officer’s Certificate
      and an Opinion of Counsel each stating that such consolidation, merger or
      succession comply with this Section and that all conditions precedent, if any,
      provided for in this Agreement and the other Basic Documents relating to such
      transaction have been complied with, and (z) Seller shall have delivered to
      the
      Trustee, the Rating Agency and the Noteholder an Opinion of Counsel, stating
      in
      the opinion of such counsel, either (A) all financing statements and
      continuation statements and amendments thereto have been authorized and filed
      that are necessary to preserve and protect the interest of the Purchaser and
      the
      Trustee, respectively, in the Receivables and the Other Conveyed Property and
      reciting the details of the filings or (B) no such action shall be necessary
      to
      preserve and protect such interest.

     

    Section
      8.5 Limitation
      on Liability of Seller and Others.
      The
      Seller and any director or officer or employee or agent of the Seller may rely
      in good faith on the advice of counsel or on any document of any kind, prima
      facie properly executed and submitted by any Person respecting any matters
      arising under any Basic Document.

    


    ARTICLE
      IX

    


    THE
      SERVICER

     

    Section
      9.1 Representations
      of Servicer.
      The
      initial Servicer makes the following representations on which the Purchaser
      is
      deemed to have relied in acquiring the Receivables and the Other Conveyed
      Property and on which the Noteholder is deemed to have relied in purchasing
      the
      Note. The representations speak as of the execution and delivery of this
      Agreement, as of the Closing Date and as of each Funding Date, and shall survive
      the sale of the Receivables and the Other Conveyed Property to the Purchaser
      and
      the pledge thereof by the Purchaser to the Trustee pursuant to the
      Indenture.

    


    (a) Organization
      and Good Standing.
      The
      Servicer has been duly organized and is validly existing as a corporation and
      in
      good standing under the laws of the State of Texas (or, in the case of a
      successor Servicer, it is a validly existing entity in good standing in its
      jurisdiction of organization), with power, authority and legal right to own
      its
      properties and to conduct its business as such properties are currently owned
      and such business is presently conducted, and had at all relevant times, and
      shall have, power, authority and legal right to acquire, own and service the
      Receivables and the Other Conveyed Property.

    


    
      
        
        

      

      
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    (b) Due
      Qualification.
      The
      Servicer is duly qualified to do business as a foreign corporation in good
      standing and has obtained all necessary licenses and approvals, in all
      jurisdictions in which the ownership or lease of property or the conduct of
      its
      business (including the servicing of the Receivables as required by this
      Agreement) requires or shall require such qualification except where the failure
      to so qualify or obtain such licenses or consents could not reasonably be
      expected to result in a material adverse effect with respect to it or to the
      Receivables or the Other Conveyed Property.

    


    (c) Power
      and Authority.
      The
      Servicer has the power and authority to execute and deliver this Agreement
      and
      the other Basic Documents to which it is a party and to carry out its terms
      and
      their terms, respectively, and the execution, delivery and performance of this
      Agreement and the other Basic Documents to which it is a party have been duly
      authorized by the Servicer by all necessary corporate action.

    


    (d) Binding
      Obligation.
      This
      Agreement and the other Basic Documents to which the Servicer is a party shall
      constitute legal, valid and binding obligations of the Servicer enforceable
      in
      accordance with their respective terms, except as enforceability may be limited
      by bankruptcy, insolvency, reorganization, or other similar laws affecting
      the
      enforcement of creditors’ rights generally and by equitable limitations on the
      availability of specific remedies, regardless of whether such enforceability
      is
      considered in a proceeding in equity or at law.

    


    (e) No
      Violation.
      The
      consummation of the transactions contemplated by this Agreement and the other
      Basic Documents to which to the Servicer is a party, the execution and delivery
      thereof and the fulfillment of the terms of this Agreement and the other Basic
      Documents to which the Servicer is a party, does not and will not conflict
      with,
      result in any breach of any of the terms and provisions of, or constitute (with
      or without notice or lapse of time) a default under, the articles of
      incorporation or bylaws of the Servicer, or any indenture, agreement, mortgage,
      deed of trust or other instrument to which the Servicer is a party or by which
      it is bound or any of its properties are subject, or result in the creation
      or
      imposition of any Lien upon any of its properties pursuant to the terms of
      any
      such indenture, agreement, mortgage, deed of trust or other instrument, other
      than the Basic Documents, or violate any law, judgment, decree, writ,
      injunction, award, determination, order, rule or regulation applicable to the
      Servicer of any court or of any federal or state regulatory body, administrative
      agency or other governmental instrumentality having jurisdiction over the
      Servicer or any of its properties.

    


    (f) No
      Proceedings.
      There
      are no proceedings or investigations pending or, to the Servicer’s knowledge,
      threatened against the Servicer, before any court, regulatory body,
      administrative agency or other tribunal or governmental instrumentality having
      jurisdiction over the Servicer or its properties (A) asserting the invalidity
      of
      this Agreement or any of the other Basic Documents, (B) seeking to prevent
      the
      issuance of the Note or the consummation of any of the transactions contemplated
      by this Agreement or any of the other Basic Documents, or (C) seeking any
      determination or ruling that might materially and adversely affect the validity
      or enforceability of this Agreement, the Note or any of the other Basic
      Documents or (D) relating to the Servicer and which might adversely affect
      the
      federal or state income, excise, franchise or similar tax attributes of the
      Note.

    


    (g) No
      Consents.
      No
      consent, approval, authorization or order of or declaration or filing with
      any
      governmental authority is required for the issuance or sale of the Note or
      the
      consummation of the other transactions contemplated by this Agreement or the
      other Basic Documents or the execution and delivery thereof, except such as
      have
      been duly made or obtained.

    


    (h) Taxes.
      The
      Servicer has filed all federal and state tax returns which are required to
      be
      filed and paid all taxes, including any assessments received by it, to the
      extent that such taxes have become due (other than taxes, the amount or validity
      of which are currently being contested in good faith by appropriate proceedings
      and with respect to which reserves in conformity with GAAP have been provided
      on
      the books of the Servicer). Any taxes, fees and other governmental charges
      payable by the Servicer in connection with consummation of the transactions
      contemplated by this Agreement and the other Basic Documents to which the
      Servicer is a party and the fulfillment of the terms of this Agreement and
      the
      other Basic Documents to which the Servicer is a party have been paid or shall
      have been paid as of the Closing Date and each Funding Date.

    


    
      
        
        

      

      
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    (i) Chief
      Executive Office.
      The
      Servicer hereby represents and warrants that the Servicer’s principal place of
      business and chief executive office is located at 1221 River Bend Drive, Suite
      120, Dallas, Texas 75247.

    


    (j) Possession
      of Licenses, Certificates, Franchises and Permits.
      The
      Servicer holds all licenses, certificates, franchises and permits from all
      governmental authorities necessary for the conduct of its business, except
      where
      the failure to hold such licenses, certificates, franchises and permits would
      not materially and adversely affect its ability to perform its obligations
      under
      this Agreement or any other Basic Document to which it is a party or under
      the
      transactions contemplated hereunder or thereunder or the validity or
      enforceability of the Receivables or the Timeshare Loans, and has received
      no
      notice of proceedings relating to the revocation of any such license,
      certificate, franchise or permit, which singly or in the aggregate, if the
      subject of an unfavorable decision, ruling or finding, would materially and
      adversely affect its ability to perform its obligations under this Agreement
      or
      any other Basic Document to which it is a party or under the transactions
      contemplated hereunder or thereunder or the validity or enforceability of the
      Receivables or the Timeshare Loans.

    


    (k) No
      Deficiency Accumulation.
      The
      Servicer is not aware of any outstanding “accumulated funding deficiency” (as
      such term is defined under ERISA and the Code) with respect to any “employee
      benefit plan” (as such term is defined under ERISA) sponsored by
      it.

    


    (l) Securities
      Laws.
      The
      Servicer 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. No portion of the Purchase Price for each of the Receivables and
      the
      Other Conveyed Property will be used by it to acquire any security in any
      transaction which is subject to Section 13 or Section 14 of the Securities
      Exchange Act of 1934, as amended.

    


    (m) No
      Default.
      The
      Servicer is not in default in the performance, observance or fulfillment of
      any
      of the obligations, covenants or conditions contained in, and is not otherwise
      in default under (i) any law or statute applicable to it, including, without
      limitation, any Consumer Law, (ii) any judgment, decree, writ, injunction,
      order, award or other action of any court or governmental authority or
      arbitrator or any order, rule or regulation of any federal, state, county,
      municipal or other governmental or public authority or agency having or
      asserting jurisdiction over it or any of its properties or (iii) (x) any
      indebtedness or any instrument or agreement under or pursuant to which any
      such
      indebtedness has been, or could be, issued or incurred or (y) any other
      instrument or agreement to which it is a party or by which it is bound or any
      of
      its properties is affected, including, without limitation, the Basic Documents,
      which either individually or in the aggregate, (A) could reasonably be expected
      to result in a Material Adverse Change with respect to the Servicer, or in
      any
      impairment of the right or ability of the Servicer to carry on its business
      substantially as now conducted or (B) could reasonably be expected to materially
      and adversely affect the Servicer’s performance of its obligations hereunder, or
      the validity or enforceability of this Agreement or the other Basic
      Documents.

    


    (n) Financial
      Condition.
      The
      Servicer has a positive net worth and is able to and does pay its liabilities
      as
      they mature. The Servicer is not in default under any obligation to pay money
      to
      any Person except for matters being disputed in good faith which do not involve
      an obligation of the Servicer on a promissory note. The Servicer will not use
      the proceeds from the transactions contemplated by the Basic Documents to give
      any preference to any creditor or class of creditors, and this transaction
      will
      not leave the Servicer with remaining assets which are unreasonably small
      compared to its ongoing operations.

    


    (o) Certificate,
      Statements and Reports.
      The
      officer’s certificates, statements, reports and other documents prepared by the
      Servicer and furnished by Servicer to the Purchaser, the Trustee or the
      Noteholder pursuant to this Agreement or any other Basic Document to which
      it is
      a party, and in connection with the transactions contemplated hereby or thereby,
      when taken as a whole, do not and will not contain any untrue statement of
      a
      material fact or omit to state a material fact necessary to make the statements
      contained herein or therein not misleading. There are no facts known to the
      Servicer which, individually or in the aggregate, materially adversely affect,
      or which (aside from general economic trends) may reasonably be expected to
      materially adversely affect in the future, its financial condition or assets
      or
      business, or which may impair its ability to perform its obligations under
      this
      Agreement or any other Basic Document, which have not been disclosed herein
      or
      therein or in the certificates and other documents furnished to the Noteholder
      by or on its behalf specifically for use in connection with the transactions
      contemplated hereby or thereby.

    


    
      
        
        

      

      
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    (p) ACH
      Form.
      The
      Servicer has delivered a form of the ACH Form attached to this Agreement to
      the
      Backup Servicer for its review.

     

    Section
      9.2 Liability
      of Servicer; Indemnities.
      The
      Servicer (in its capacity as such) shall be liable hereunder only to the extent
      of the obligations in this Agreement and the other Basic Documents to which
      it
      is a party specifically undertaken by the Servicer and the representations,
      warranties, covenants and other agreements made by the Servicer in the Basic
      Documents to which it is a party.

    


    (i)The
      Servicer shall defend, indemnify and hold harmless the Purchaser, the Trustee,
      the Backup Servicer, the Noteholder and their respective officers, directors,
      agents and employees from and against any and all costs, expenses, losses,
      damages, claims and liabilities (including reasonable legal fees and related
      costs), arising out of or resulting from the use, ownership, repossession or
      operation by the Servicer or any Affiliate or agent or sub-covenants thereof
      of
      any Resort or Timeshare Property;

    


    (ii)The
      Servicer, so long as Silverleaf is the Servicer, shall indemnify, defend and
      hold harmless the Purchaser, the Trustee, the Backup Servicer, the Noteholder
      and their respective officers, directors, agents and employees from and against
      any taxes that may at any time be asserted against any of such parties with
      respect to the transactions contemplated in this Agreement, including, without
      limitation, any sales, gross receipts, general corporation, tangible personal
      property, privilege or license taxes (but not including any federal or other
      income taxes, including franchise taxes asserted with respect to, and as of
      the
      date of, the sale of the Receivables and the Other Conveyed Property to the
      Purchaser, the pledge thereof to the Trustee or the issuance and original sale
      of the Note) and costs and expenses in defending against the same;

    


    (iii)The
      Servicer shall indemnify, defend and hold harmless the Purchaser, the Trustee,
      the Backup Servicer, the Noteholder and their respective officers, directors,
      agents and employees from and against any and all costs, expenses, losses,
      damages, claims and liabilities (including reasonable legal fees and related
      costs) to the extent that such cost, expense, loss, claim, damage, or liability
      arose out of, or was imposed upon the Purchaser, the Trustee, the Backup
      Servicer or the Noteholder through the negligence, willful misfeasance or bad
      faith of the Servicer in the performance of its duties under this Agreement
      or
      by reason of reckless disregard of its obligations and duties under this
      Agreement or as a result of a breach of any representation, warranty, covenant
      or other agreement made by the Servicer in this Agreement and the other Basic
      Documents to which it is a party; and

    


    (iv)The
      Servicer shall indemnify, defend, and hold harmless the Trustee and the Backup
      Servicer from and against all costs, expenses, losses, damages, claims and
      liabilities (including reasonable legal fees and related costs) arising out
      of
      or incurred in connection with the acceptance or performance of the trusts
      and
      duties herein contained, except to the extent that such cost, expense, loss,
      claim, damage or liability: (A) shall be due to the willful misfeasance, bad
      faith, or negligence (except for errors in judgment) of the Trustee or the
      Backup Servicer, as applicable or (B) relates to any tax other than the taxes
      with respect to which the Servicer shall be required to indemnify the Trustee
      or
      the Backup Servicer.

    


    (b) Notwithstanding
      the foregoing, the Servicer shall not be obligated to defend, indemnify, and
      hold harmless the Noteholder for any losses, claims, damages or liabilities
      incurred by the Noteholder arising out of claims, complaints, actions and
      allegations relating to Section 406 of ERISA or Section 4975 of the Code as
      a
      result of the purchase or holding of Note by the Noteholder with the assets
      of a
      plan subject to such provisions of ERISA or the Code.

    


    
      
        
        

      

      
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    (c) For
      purposes of this Section
      9.2,
      in the
      event of the termination of the rights and obligations of the Servicer (or
      any
      successor thereto pursuant to Section
      9.3)
      as
      Servicer pursuant to Section
      10.1,
      or a
      resignation by such Servicer pursuant to this Agreement, such Servicer shall
      be
      deemed to be the Servicer pending appointment of a successor Servicer pursuant
      to Section
      10.2.
      The
      provisions of this Section
      9.2(c)
      shall in
      no way affect the survival pursuant to Section
      9.2(d)
      of the
      indemnification by the Servicer provided by Section
      9.2(a).

    


    (d) Indemnification
      under this Section
      9.2
      shall
      survive the termination of this Agreement and the other Basic Documents and
      any
      resignation or removal of the Servicer or any successor Servicer as Servicer
      and
      shall include reasonable fees and expenses of counsel and expenses of
      litigation. If the Servicer shall have made any indemnity payments pursuant
      to
      this Section and the recipient thereafter collects any of such amounts from
      others, the recipient shall promptly repay such amounts to the Servicer, without
      interest.

     

    Section
      9.3 Merger
      or Consolidation of the Servicer or Backup Servicer, and Assumption of the
      Obligations of the Backup Servicer.

    


    (a) The
      Servicer shall not merge or consolidate with any other Person, convey, transfer
      or lease all or substantially all of its assets as an entirety to another
      Person, or permit any other Person to become the successor to the Servicer’s
      business unless, after the merger, consolidation, conveyance, transfer, lease
      or
      succession, the Servicer shall be the surviving entity and shall be capable
      of
      fulfilling the duties of the Servicer contained in this Agreement and the other
      Basic Documents. Nothing contained herein shall be deemed to release the
      Servicer from any obligation. The Servicer shall provide notice of any merger,
      consolidation or succession pursuant to this Section to the Trustee, the
      Noteholder and each Rating Agency. Notwithstanding the foregoing, the Servicer
      shall not merge or consolidate with any other Person or permit any other Person
      to become a successor to the Servicer’s business, unless (x) immediately after
      giving effect to such transaction, no representation or warranty made pursuant
      to Section
      9.1
      shall
      have been breached (for purposes hereof, such representations and warranties
      shall be deemed made as of the date of the consummation of such transaction)
      and
      no event that, after notice or lapse of time, or both, would become Event of
      Default shall have occurred and be continuing, (y) the Servicer shall have
      delivered to the Trustee, the Rating Agency and the Noteholder an Officer’s
      Certificate and an Opinion of Counsel each stating that such consolidation,
      merger or succession comply with this Section and that all conditions precedent,
      if any, provided for in this Agreement relating to such transaction have been
      complied with, and (z) the Servicer shall have delivered to the Trustee, the
      Rating Agency and the Noteholder an Opinion of Counsel, stating in the opinion
      of such counsel, either (A) all financing statements and continuation statements
      and amendments thereto have been executed and filed that are necessary to
      preserve and protect the interest of the Purchaser and the Trustee,
      respectively, in the Receivables and the Other Conveyed Property and reciting
      the details of the filings or (B) no such action shall be necessary to preserve
      and protect such interest.

    


    (b) Any
      Person (i) into which the Backup Servicer (in its capacity as Backup Servicer
      or
      successor Servicer) may be merged or consolidated, (ii) resulting from any
      merger or consolidation to which the Backup Servicer shall be a party, (iii)
      which acquires by conveyance, transfer or lease substantially all of the assets
      of the Backup Servicer, or (iv) succeeding to the business of the Backup
      Servicer, in any of the foregoing cases shall execute an agreement of assumption
      to perform every obligation of the Backup Servicer under this Agreement and
      the
      other Basic Documents and, whether or not such assumption agreement is executed,
      shall be the successor to the Backup Servicer under this Agreement and the
      other
      Basic Documents without the execution or filing of any paper or any further
      act
      on the part of any of the parties to this Agreement and the other Basic
      Documents, anything in this Agreement and the other Basic Documents to the
      contrary notwithstanding; provided, however, that nothing contained herein
      shall
      be deemed to release the Backup Servicer from any obligation.

     

    
      
        
        

      

      
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    Section
      9.4 [RESERVED]

    


    Section
      9.5 [RESERVED]

    


    Section
      9.6 Servicer
      and Backup Servicer Not to Resign.
      Subject
      to the provisions of Section
      9.3,
      neither
      the Servicer nor the Backup Servicer shall resign from the obligations and
      duties imposed on it by this Agreement or the other Basic Documents to which
      it
      is a party as Servicer or Backup Servicer except (i) upon a determination that
      by reason of a change in legal requirements the performance of its duties under
      this Agreement or the other Basic Documents to which it is a party would cause
      it to be in violation of such legal requirements in a manner which would have
      a
      material adverse effect on the Servicer or the Backup Servicer, as the case
      may
      be, and the Noteholder does not elect to waive the obligations of the Servicer
      or the Backup Servicer, as the case may be, to perform the duties which render
      it legally unable to act or to delegate those duties to another Person or,
      (ii)
      in the case of the Backup Servicer, upon the prior written consent of the
      Noteholder. Any such determination permitting the resignation of the Servicer
      or
      Backup Servicer pursuant to clause (i) above shall be evidenced by an Opinion
      of
      Counsel to such effect delivered and acceptable to the Trustee and the
      Noteholder. No resignation of the Servicer shall become effective until the
      Backup Servicer or an entity acceptable to the Noteholder shall have assumed
      the
      responsibilities and obligations of the Servicer. No resignation of the Backup
      Servicer shall become effective until an entity acceptable to the Noteholder
      shall have assumed the responsibilities and obligations of the Backup Servicer;
      provided, however, that in the event a successor Backup Servicer is not
      appointed within 60 days after the Backup Servicer has given notice of its
      resignation and, if applicable, has provided the Opinion of Counsel required
      by
      this Section
      9.6,
      the
      Backup Servicer may petition a court for its removal.

     

    Section
      9.7 Reporting
      Requirements. 

    


    (a) The
      Servicer shall furnish, or cause to be furnished to the Noteholder:

    


    (a) Audit
      Report.
      As soon
      as available and in any event within 90 days after the end of each fiscal year
      of the Servicer, a copy of the consolidated balance sheet of the Servicer and
      its Affiliates as at the end of such fiscal year, together with the related
      statements of earnings, stockholders’ equity and cash flows for such fiscal
      year, prepared in reasonable detail and in accordance with GAAP certified by
      Independent Accountants of recognized national standing as shall be selected
      by
      the Servicer.

    


    (b) Quarterly
      Statements.
      As soon
      as available, but in any event within 45 days after the end of each fiscal
      quarter (except the fourth fiscal quarter) of the Servicer, copies of the
      unaudited consolidated balance sheet of the Servicer and its Affiliates as
      at
      the end of such fiscal quarter and the related unaudited statements of earnings,
      stockholders’ equity and cash flows for the portion of the fiscal year through
      such fiscal quarter (and as to the statements of earnings for such fiscal
      quarter) in each case setting forth in comparative form the figures for the
      corresponding periods of the previous fiscal year, prepared in reasonable detail
      and in accordance with GAAP applied consistently throughout the periods
      reflected therein and certified by the chief financial or accounting officer
      of
      the Servicer as presenting fairly the financial condition and results of
      operations of the Servicer and its Affiliates (subject to normal year-end
      adjustments).

    


    ARTICLE
      X

    


    DEFAULT

     

    Section
      10.1 Servicer
      Termination Events.
      For
      purposes of this Agreement, each of the following shall constitute a “Servicer
      Termination Event”:

    


    (a) Any
      failure by the Servicer to deliver any proceeds or payment required to be so
      delivered under this Agreement or any other Basic Document that continues
      unremedied for a period of two Business Days after notice (whether written
      or
      oral) of such failure is provided to Servicer;

    


    
      
        
        

      

      
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    (b) Failure
      by the Servicer to deliver to the Trustee and the Noteholder the Servicer’s
      Certificate by 12:00 noon New York City time on the second Business Day after
      the date such Servicer’s Certificate is required to be delivered;

    


    (c) Failure
      on the part of the Servicer to duly observe or perform any other covenants
      or
      agreements of the Servicer or the Purchaser, as applicable, set forth in this
      Agreement or any other Basic Document to which it is a party, which failure,
      except for covenants relating to merger and consolidation or preservation of
      ownership or security interests in the Receivables and the Other Conveyed
      Property and with respect to the items covered in clause (k) below, continues
      unremedied for a period of 30 days (or, if the Servicer shall have provided
      evidence satisfactory to the Noteholder that such obligation cannot be cured
      in
      the 30-day period and that it is diligently pursuing a cure, 60 days), after
      the
      earlier of (x) the Servicer first acquiring Knowledge thereof and (y) the date
      on which written notice of such failure shall have been given to the Servicer;
      

    


    (d) The
      occurrence of an Insolvency Event with respect to the Servicer;

    


    (e) Any
      representation, warranty or statement of the Servicer made in this Agreement
      or
      any other Basic Document to which it is a party or any certificate, report
      or
      other writing delivered pursuant hereto or thereto shall prove to be incorrect
      in any material respect as of the time when the same shall have been made
      (excluding, however, any representation or warranty set forth in this Agreement
      relating to the characteristics of the Receivables), and the incorrectness
      of
      such representation, warranty or statement has a material adverse effect on
      the
      Purchaser or the Noteholder and such breach is not remedied within 30 days
      (or,
      if the Servicer shall have provided evidence satisfactory to the Noteholder
      that
      such breach cannot be cured in the 30-day period and that it is diligently
      pursuing a cure, 60 days) after the earlier of (x) the Servicer first acquiring
      Knowledge thereof and (y) the date on which written notice of such failure
      shall
      have been given to the Servicer; 

    


    (f) So
      long
      as Silverleaf or an Affiliate thereof is the Servicer, the Leverage Ratio
      exceeds 6.0:1;

    


    (g) [Reserved];
      

    


    (h) An
      Event
      of Default shall have occurred;

    


    (i) If
      Silverleaf is the Servicer, a change occurs of more than 50% of the executive
      management of the Servicer as described in Exhibit F hereto, unless Silverleaf
      provides written certification to the Trustee (which the Trustee shall promptly
      forward to the Noteholder) within 30 days after such change, certifying that
      such executive management personnel have been replaced, and setting forth a
      description of the replacement personnel’s experience, ability and reputation,
      and the Trustee shall not have received an objection to such replacement
      personnel from Noteholder within 15 Business Days after sending such certificate
      to the Noteholder;

    


    (j) Any
      failure by the Servicer to duly observe and perform its obligations under
Section
      4.2(f)
      hereof,
      which failure is not remedied within 30 days (or, if the Servicer shall have
      provided evidence satisfactory to the Noteholder that such obligation cannot
      be
      cured in the 30-day period and that it is diligently pursuing a cure, 60 days),
      after the earlier of (x) the Servicer first acquiring Knowledge thereof and
      (y)
      the date on which written notice of such failure shall have been given to the
      Servicer; provided,
      however, that with respect to Section
      4.2(f)(xiii)
      hereof,
      the Servicer shall have 2 days to remedy any failure to perform its obligations
      thereunder; 

    


    (k) So
      long
      as Silverleaf or an Affiliate thereof is the Servicer, as of any date of
      determination, the Tangible Net Worth of Silverleaf is less than the sum of
      (1)
      $100,000,000, (2) 50% of the cumulative positive net income of the Servicer
      (without deduction for negative income) since June 30, 2005 and (3) 50% of
      the
      net proceeds of any equity issued by Silverleaf since June 30,
      2005;

    


    
      
        
        

      

      
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    (l) So
      long
      as Silverleaf or an Affiliate thereof is the Servicer, as of any date of
      determination, the sum of (1) available cash and (2) borrowing capacity for
      working capital, maintained by Silverleaf is less than $5,000,000;

    


    (m) So
      long
      as Silverleaf or an Affiliate thereof is the Servicer, Silverleaf experiences
      a
      net loss either in any fiscal year or in any two consecutive fiscal quarters;
      or

    


    (n) So
      long
      as Silverleaf or an Affiliate thereof is the Servicer, as of any date of
      determination, the ratio of Silverleaf’s (1) Earnings Before Interest, Taxes,
      Deductions and Amortization (EBITDA) to (2) Interest Expense, is less than
      1.25:1.

    


    In
      the
      event that the Servicer, Purchaser or Trustee gains Knowledge of the occurrence
      of a Servicer Termination Event, the Servicer, Purchaser or Trustee, as
      applicable, shall promptly notify the Noteholder in writing of such occurrence;
      provided that the Servicer shall be deemed to satisfy such obligation upon
      its
      delivery of an Officer’s Certificate in accordance with Section
      4.10(b)
      hereof.

     

    Section
      10.2 Consequences
      of a Servicer Termination Event.
      If
      a
      Servicer Termination Event shall occur and be continuing, the Noteholder by
      notice given in writing to the Servicer may terminate all of the rights and
      obligations of the Servicer under this Agreement; provided that such rights
      and
      obligations shall be automatically terminated without any further action in
      the
      case of a Servicer Termination Event described in Section
      10.1(d).
      The
      outgoing Servicer shall be entitled to its pro rata share of the Servicing
      Fee
      for the number of days in the Accrual Period prior to the effective date of
      its
      termination. On or after the receipt by the Servicer of such written notice
      or
      upon termination of the term of the Servicer, all authority, power, obligations
      and responsibilities of the Servicer under this Agreement, whether with respect
      to the Note or the Receivables and Other Conveyed Property or otherwise,
      automatically shall pass to, be vested in and become obligations and
      responsibilities of the Backup Servicer (or such other successor Servicer
      appointed by the Noteholder under Section
      10.3);
      provided, however, that the successor Servicer shall have no liability with
      respect to any obligation which was required to be performed by the terminated
      Servicer prior to the date that the successor Servicer becomes the Servicer
      or
      any claim of a third party based on any alleged action or inaction of the
      terminated Servicer. The successor Servicer is authorized and empowered by
      this
      Agreement to execute and deliver, on behalf of the terminated Servicer, as
      attorney-in-fact or otherwise, any and all documents and other instruments
      and
      to do or accomplish all other acts or things necessary or appropriate to effect
      the purposes of such notice of termination, whether to complete the transfer
      and
      endorsement of the Receivables and the Other Conveyed Property and related
      documents to show the Purchaser as lienholder or secured party, or otherwise.
      The terminated Servicer agrees to cooperate with the successor Servicer in
      effecting the termination of the responsibilities and rights of the terminated
      Servicer under this Agreement, including, without limitation, the transfer
      to
      the successor Servicer for administration by it of all cash amounts that shall
      at the time be held by the terminated Servicer for deposit, or have been
      deposited by the terminated Servicer, in the Collection Account or thereafter
      received with respect to the Receivables and the Other Conveyed Property and
      the
      delivery to the successor Servicer of all Timeshare Loan Servicing Files that
      shall at the time be held by the terminated Servicer and a computer tape in
      readable form as of the most recent Business Day containing all information
      necessary to enable the successor Servicer to service the Receivables and the
      Other Conveyed Property. All reasonable costs and expenses (including reasonable
      attorneys’ fees) incurred in connection with transferring any Timeshare Loan
      Servicing Files to the successor Servicer and amending this Agreement to reflect
      such succession as Servicer pursuant to this Section
      10.2
      shall be
      paid by the predecessor Servicer upon presentation of reasonable documentation
      of such costs and expenses. In addition, any successor Servicer shall be
      entitled to payment from the immediate predecessor Servicer for reasonable
      transition expenses incurred in connection with acting as successor Servicer,
      and to the extent not so paid, such payment shall be made pursuant to
Section
      5.7
      hereof.
      Upon receipt of notice of the occurrence of a Servicer Termination Event, the
      Trustee shall give notice thereof to the Rating Agency and the Noteholder.
      If
      requested by the Noteholder, the successor Servicer shall terminate the Lockbox
      Agreements and direct the Obligors to make all payments under the Receivables
      and the Other Conveyed Property directly to the successor Servicer (in which
      event the successor Servicer shall process such payments in accordance with
      Section
      4.2(e)),
      or to
      a lockbox established by the successor Servicer at the direction of the
      Noteholder, at the successor Servicer’s expense. The terminated Servicer shall
      grant the Trustee, the successor Servicer and the Noteholder reasonable access
      to the terminated Servicer’s premises at the terminated Servicer’s
      expense.

     

    
      
        
        

      

      
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    Section
      10.3 Appointment
      of Successor. 

    


    (a) On
      and
      after the time (i) the Servicer receives a notice of termination pursuant to
      Section
      10.2,
      (ii)
      the Servicer resigns pursuant to Section
      9.6,
      or
      (iii) the Servicer is automatically terminated upon the occurrence of a Servicer
      Termination Event described in Section
      10.1(d),
      the
      predecessor Servicer shall continue to perform its functions as Servicer under
      this Agreement as follows: (A) in the case of termination pursuant to
Section
      10.2,
      the
      predecessor Servicer shall only perform its functions as Servicer until the
      date
      specified in such termination notice or, if no such date is specified in a
      notice of termination, until receipt of such notice; (B) in the case of
      expiration and non-renewal of the term of the Servicer upon the expiration
      of
      such term, or resignation of the Servicer, the predecessor Servicer shall only
      perform its functions as Servicer until the later of (x) the date 45 days from
      the delivery to the Trustee of written notice of such resignation (or written
      confirmation of such notice) in accordance with the terms of this Agreement
      and
      (y) the date upon which the predecessor Servicer shall become unable to act
      as
      Servicer, as specified in the notice of resignation and accompanying Opinion
      of
      Counsel; and (C) in the case of automatic termination of the Servicer, the
      predecessor Servicer shall only perform its functions as Servicer until a
      successor Servicer has assumed such duties, obligations, and liabilities;
provided,
      however,
      that in
      no case shall the Servicer be relieved of its duties, obligations and
      liabilities as Servicer until a successor Servicer has assumed such duties,
      obligations and liabilities. Notwithstanding the preceding sentence, if the
      Backup Servicer or any other successor Servicer shall not have assumed the
      duties, obligations and liabilities of Servicer within 45 days of the
      termination or resignation described in this Section
      10.3,
      the
      Servicer may petition a court of competent jurisdiction to appoint any Eligible
      Servicer as the successor to the Servicer. Pending appointment as successor
      Servicer, Backup Servicer (or such other Person as shall have been appointed
      by
      the Noteholder) shall act as successor Servicer unless it is legally unable
      to
      do so, in which event the outgoing Servicer shall continue to act as Servicer
      until a successor has been appointed and accepted such appointment. In the
      event
      of termination of the Servicer, Wells Fargo Bank, National Association, as
      the
      Backup Servicer, shall assume the obligations of Servicer hereunder on the
      date
      specified in such written notice (the “Assumption Date”) pursuant to an
      assumption agreement in form and substance acceptable to the Noteholder or,
      in
      the event that the Noteholder shall have determined that a Person other than
      the
      Backup Servicer shall be the successor Servicer in accordance with Section
      10.2,
      on the
      date of the execution of a written assumption agreement by such Person to serve
      as successor Servicer. Notwithstanding the Backup Servicer’s assumption of, and
      its agreement to perform and observe, all duties, responsibilities and
      obligations of the Seller as Servicer, or any successor Servicer, under this
      Agreement arising on and after the Assumption Date, the Backup Servicer shall
      not: (i) be deemed to have assumed or to become liable for, or otherwise have
      any liability for any duties, responsibilities, obligations or liabilities
      of
      (A) the Seller or any other Servicer arising on or before the Assumption Date,
      whether provided for by the terms of this Agreement, arising by operation of
      law
      or otherwise, including, without limitation, any liability for any duties,
      responsibilities, obligations or liabilities of the Seller or any other Servicer
      arising on or before the Assumption Date under Section
      4.7
      or
9.2
      of this
      Agreement, regardless of when the liability, duty, responsibility or obligation
      of the Seller or any other Servicer therefor arose, whether provided by the
      terms of this Agreement, arising by operation of law or otherwise, or (B) under
      Section
      9.2(a)(ii),
      (iv)
      or
(v);
      (ii) be
      obligated to perform any repurchase or advancing obligations, if any, of the
      Servicer; (iii) be obligated to pay any taxes required to be paid by the
      predecessor Servicer; or (iv) be obligated to pay any of the fees and expenses
      of any other party involved in the transaction, other than any fees or expenses
      incurred in connection with its own negligence, willful misfeasance or bad
      faith. Notwithstanding the above, if the Backup Servicer shall be legally unable
      or unwilling to act as Servicer, the Backup Servicer, the Trustee or the
      Noteholder may petition a court of competent jurisdiction to appoint any
      Eligible Servicer as the successor to the Servicer. Pending appointment pursuant
      to the preceding sentence, the Backup Servicer shall act as successor Servicer
      unless it is legally unable to do so, in which event the outgoing Servicer
      shall
      continue to act as Servicer until a successor has been appointed and accepted
      such appointment. Subject to Section
      9.6,
      no
      provision of this Agreement shall be construed as relieving the Backup Servicer
      of its obligation to succeed as successor Servicer upon the termination of
      the
      Servicer pursuant to Section
      10.2
      or the
      resignation of the Servicer pursuant to Section
      9.6.
      If upon
      the termination of the Servicer pursuant to Section
      10.2
      or the
      resignation of the Servicer pursuant to Section
      9.6,
      the
      Noteholder appoints a successor Servicer other than the Backup Servicer, the
      Backup Servicer shall not be relieved of its duties as Backup Servicer
      hereunder.

    


    (b) Any
      successor Servicer shall be entitled to such compensation (whether payable
      out
      of the Collection Account or otherwise) as the Servicer would have been entitled
      to under this Agreement if the Servicer had not resigned or been terminated
      hereunder.

     

    
      
        
        

      

      
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    Section
      10.4 Notification
      of Termination and Appointment.
      Upon
      any
      termination of, or appointment of a successor to, the Servicer, the Trustee
      shall give prompt written notice thereof to the Noteholder and to the Rating
      Agency.

     

    Section
      10.5 Waiver
      of Past Defaults.
      The
      Noteholder may waive in writing any default by the Servicer in the performance
      of its obligations under this Agreement and the consequences thereof. Upon
      any
      such waiver of a past default, such default shall cease to exist, and any
      Servicer Termination Event arising therefrom shall be deemed to have been
      remedied for every purpose of this Agreement. No such waiver shall extend to
      any
      subsequent or other default or impair any right consequent thereto.

     

    Section
      10.6 Action
      Upon Certain Failures of the Servicer.
      In
      the
      event that the Trustee shall have Knowledge of any failure of the Servicer
      specified in Section
      10.1
      which
      would give rise to a right of termination under such Section upon the Servicer’s
      failure to remedy the same after notice, the Trustee shall give prompt written
      notice thereof to the Servicer and the Noteholder. For all purposes of this
      Agreement (including, without limitation, Section
      6.2(b)
      and this
Section
      10.6),
      the
      Trustee shall not be deemed to have Knowledge of any failure of the Servicer
      as
      specified in Sections
      10.1(c)
      through
(n)
      unless
      notified thereof in writing by the Servicer or the Noteholder. The Trustee
      shall
      be under no duty or obligation to investigate or inquire as to any potential
      failure of the Servicer specified in Section
      10.1.

     

    Section
      10.7 Continued
      Errors.
      Notwithstanding
      anything contained herein to the contrary, if the Backup Servicer becomes
      successor Servicer it is authorized to accept and rely on all of the accounting,
      records (including computer records) and work of the prior Servicer relating
      to
      the Receivables (collectively, the “Predecessor Servicer Work Product”) without
      any audit or other examination thereof, and the Backup Servicer as successor
      Servicer shall have no duty, responsibility, obligation or liability for the
      acts and omissions of the prior Servicer. If any error, inaccuracy, omission
      or
      incorrect or non-standard practice or procedure (collectively, “Errors”) exist
      in any Predecessor Servicer Work Product and such Errors make it materially
      more
      difficult to service or should cause or materially contribute to the Backup
      Servicer as successor Servicer making or continuing any Errors (collectively,
      “Continued Errors”), the Backup Servicer as successor Servicer shall have no
      duty or responsibility, for such Continued Errors; provided, however, that
      the
      Backup Servicer as successor Servicer agrees to use its best efforts to prevent
      further Continued Errors. In the event that the Backup Servicer as successor
      Servicer becomes aware of Errors or Continued Errors, the Backup Servicer as
      successor Servicer shall, with the prior consent of the Noteholder use its
      best
      efforts to reconstruct and reconcile such data as is commercially reasonable
      to
      correct such Errors and Continued Errors and to prevent future Continued Errors.
      The Backup Servicer as successor Servicer shall be entitled to recover its
      costs
      thereby expended in accordance with Section
      5.7(a)(iv)
      hereof.

    


    ARTICLE
      XI

    


    MISCELLANEOUS
      PROVISIONS

     

    Section
      11.1 Amendment.

    


    (a) This
      Agreement may not be waived, amended or otherwise modified except in a writing
      signed by the parties hereto and the Noteholder.

    


    (b) Promptly
      after the execution of any such amendment or waiver, the Trustee shall furnish
      written notification of the substance of such amendment or waiver to the Rating
      Agency.

    


    (c) Prior
      to
      the execution of any amendment, waiver or consent to this Agreement the Trustee
      shall be entitled to receive and rely upon (i) an Opinion of Counsel stating
      that the execution of such amendment or waiver is authorized or permitted by
      this Agreement and (ii) if requested by the Noteholder, the Opinion of Counsel
      referred to in Section
      11.2(i).

    


    (d) The
      Trustee may, but shall not be obligated to, enter into any such amendment or
      waiver which affects the Trustee’s own rights, duties or immunities under this
      Agreement or otherwise.

    


    
      
        
        

      

      
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    (e) Upon
      the
      termination of the Seller as Servicer and the appointment of the Backup Servicer
      as Servicer hereunder, all amendments to the terms of this Agreement specified
      in an assumption agreement shall become a part of this Agreement, as if this
      Agreement was amended to reflect such changes in accordance with this
Section
      11.1.

     

    Section
      11.2 Protection
      of Title to Property.
      (a) The
      Seller, the Purchaser or Servicer or each of them shall authorize, execute
      (if
      necessary) and file such financing statements and cause to be authorized,
      executed (if necessary) and filed such continuation statements, all in such
      manner and in such places as may be required by law fully to preserve, maintain
      and protect the interest of the Purchaser and the interests of the Trustee
      in
      the Receivables, the Other Conveyed Property and in the proceeds thereof. The
      Seller shall deliver (or cause to be delivered) to the Noteholder and the
      Trustee file-stamped copies of, or filing receipts for, any document filed
      as
      provided above, as soon as available following such filing.

    


    (b) None
      of
      the Seller, the Purchaser or the Servicer shall change its name, identity,
      jurisdiction of organization, form of organization or corporate structure in
      any
      manner that would, could or might make any financing statement or continuation
      statement filed in accordance with paragraph (a) above seriously misleading
      within the meaning of Section 9-506(a) of the UCC, unless it shall have given
      the Noteholder and the Trustee at least thirty days’ prior written notice
      thereof and shall have promptly filed appropriate amendments to all previously
      filed financing statements or continuation statements. Promptly upon such
      filing, the Purchaser, the Seller or the Servicer, as the case may be, shall
      deliver an Opinion of Counsel to the Trustee and the Noteholder, in form and
      substance reasonably satisfactory to the Noteholder, stating either (A) all
      financing statements and continuation statements have been authorized, executed
      and filed that are necessary fully to preserve and protect the interest of
      the
      Purchaser and the Trustee in the Receivables and the Other Conveyed Property,
      and reciting the details of such filings or referring to prior Opinions of
      Counsel in which such details are given, or (B) no such action shall be
      necessary to preserve and protect such interest.

    


    (c) Each
      of
      the Seller, the Purchaser and the Servicer shall have an obligation to give
      the
      Noteholder and the Trustee at least 60 days’ prior written notice of any
      relocation of its chief executive office or a change in its jurisdiction of
      organization if, as a result of such relocation or change, the applicable
      provisions of the UCC would require the filing of any amendment of any
      previously filed financing or continuation statement or of any new financing
      statement and shall promptly file any such amendment or new financing statement.
      The Servicer shall at all times be organized under the laws of the United States
      (or any State thereof), maintain each office from which it shall service
      Receivables and Other Conveyed Property, and its chief executive office and
      jurisdiction of organization, within the United States of America.

     

    (d) The
      Servicer shall maintain accounts and records as to each Receivable and Other
      Conveyed Property accurately and in sufficient detail to permit (i) the reader
      thereof to know at any time the status of such Receivable and Other Conveyed
      Property, including payments and recoveries made and payments owing (and the
      nature of each) and any Liquidation Expenses or other expenses incurred in
      respect of any Receivable and Other Conveyed Property (and the nature of each)
      and (ii) reconciliation between payments or recoveries on (or with respect
      to)
      each Receivable and Other Conveyed Property and the amounts from time to time
      deposited in the Collection Account in respect of such Receivable and Other
      Conveyed Property.

    


    (e) The
      Servicer shall maintain its computer systems so that, from and after the time
      of
      sale under this Agreement of the Receivables and Other Conveyed Property to
      the
      Purchaser, the Servicer’s master computer records (including any backup
      archives) that refer to a Receivable or Other Conveyed Property shall indicate
      clearly the interest of the Purchaser in such Receivable and Other Conveyed
      Property and that such Receivable and Other Conveyed Property is owned by the
      Purchaser and pledged to the Trustee. Indication of the Purchaser’s and the
      Trustee’s interest in a Receivable and the related Other Conveyed Property shall
      be deleted from or modified on the Servicer’s computer systems when, and only
      when, such Receivable shall have been paid in full or repurchased.

    


    
      
        
        

      

      
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    (f) If
      at any
      time the Seller or the Servicer shall propose to sell, grant a security interest
      in or otherwise transfer any interest in Receivables or Other Conveyed Property
      to any prospective purchaser, lender or other transferee, the Servicer shall
      give to such prospective purchaser, lender or other transferee computer tapes,
      records or printouts (including any restored from backup archives) that, if
      they
      shall refer in any manner whatsoever to any Receivable or Other Conveyed
      Property, shall indicate clearly that such Receivable and the related Other
      Conveyed Property has been sold and is owned by the Purchaser and pledged to
      the
      Trustee.

    


    (g) The
      Servicer shall permit the Trustee, the Backup Servicer and the Noteholder and
      their respective agents upon reasonable notice and at any time during normal
      business hours to inspect, audit, and make copies of and abstracts from the
      Servicer’s records regarding any Receivable and the related Other Conveyed
      Property.

    


    (h) Upon
      request, the Servicer shall furnish to the Noteholder or to the Trustee, within
      five Business Days, a list of all Receivables (by contract number and name
      of
      Obligor) then pledged to the Trustee, together with a reconciliation of such
      list to the Schedule of Receivables and to each of the Servicer’s Certificates
      furnished before such request indicating removal of Receivables from the lien
      of
      the Indenture.

    


    (i) The
      Servicer shall deliver to the Noteholder and the Trustee:

    


    (1) promptly
      after the execution and delivery of this Agreement and, if required pursuant
      to
Section
      11.1,
      of each
      amendment, waiver, or consent, an Opinion of Counsel, in form and substance
      satisfactory to the Noteholder, stating that in the opinion of such counsel,
      either (A) all financing statements and continuation statements have been
      authorized, executed and filed that are necessary fully to preserve and protect
      the interest of the Purchaser and the Trustee in the Receivables and the Opinion
      Collateral and reciting the details of such filings or referring to a prior
      Opinion of Counsel in which such details are given, or (B) no such action shall
      be necessary to preserve and protect such interest; and

    


    (2) as
      a
      condition precedent to the renewal of the Indenture by the Noteholder pursuant
      to Section
      2.3
      thereof,
      an Opinion of Counsel stating that, in the opinion of such counsel, either
      (a)
      all financing statements and continuation statements have been authorized,
      executed and filed that are necessary fully to preserve and protect the interest
      of the Purchaser and the Trustee in the Receivables and the Opinion Collateral,
      and reciting the details of such filings or referring to prior Opinions of
      Counsel in which such details are given, or (b) no such action shall be
      necessary to preserve and protect such interest.

    


    Each
      Opinion of Counsel referred to in clause (1) or (2) above shall specify any
      action necessary (as of the date of such opinion) to be taken in the following
      year to preserve and protect such interest. 

    


    Section
      11.3 Notices.
      All
      demands, notices and communications upon or to the Seller, the Backup Servicer,
      the Servicer, the Trustee or the Rating Agency under this Agreement shall be
      in
      writing, via facsimile (and confirmed by telephone in the case of facsimiles
      to
      Seller, Servicer and Purchaser), personally delivered, or mailed by certified
      mail, return receipt requested, and shall be deemed to have been duly given
      upon
      receipt (a) in the case of the Seller, to Silverleaf Resorts, Inc., 1221 River
      Bend Drive, Suite 120, Dallas, Texas 75247, Attention: Robert E. Mead, Chief
      Executive Officer, Telecopy: (214) 905-0514; Telephone: (214) 631-1166, ext.
      2275; (b) in the case of the Servicer, to Silverleaf Resorts, Inc., 1221 River
      Bend Drive, Suite 120, Dallas, Texas 75247, Attention: Robert E. Mead, Chief
      Executive Officer, Telecopy: (214) 905-0514; Telephone: (214) 631-1166, ext.
      2275; (c) in the case of the Purchaser, to Silverleaf Finance IV, LLC, 1221
      River Bend Drive, Suite 120, Dallas, Texas 75247, Attention: Harry J. White,
      Jr., Chief Financial Officer, Telecopy: (214) 631-4981; Telephone: (214)
      631-1166, ext. 3990; (d) in the case of the Trustee or the Backup Servicer
      at
      the Corporate Trust Office; Telecopy: (612) 667-3464; (e) in the case of the
      Noteholder, to UBS Real Estate Securities Inc., 1285 Avenue of the Americas,
      11th Floor, New York, New York 10019, Attention: Prakash B. Wadhwani, Telecopy:
      (212)713-7999; Telephone: (212)713-3983; and (f) in the case of Moody’s, to
      Moody’s Investors Service, Inc., ABS Monitoring Department, 99 Church Street,
      New York, New York 10007, Telecopy: (212) 533-3850. Any notice so mailed within
      the time prescribed in this Agreement shall be conclusively presumed to have
      been duly given, whether or not the Noteholder shall receive such
      notice.

     

    
      
        
        

      

      
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    Section
      11.4 Assignment.
      This
      Agreement shall inure to the benefit of and be binding upon the parties hereto
      and their respective successors and permitted assigns. Notwithstanding anything
      to the contrary contained herein, except as provided in Sections
      8.4,
      9.3
      and this
Section
      11.4
      and as
      provided in the provisions of this Agreement concerning the resignation of
      the
      Servicer, this Agreement may not be assigned by the Purchaser, the Seller or
      the
      Servicer without the prior written consent of the Trustee, the Backup Servicer
      and the Noteholder; provided that the Purchaser will grant all of its right,
      title and interest herein to the Trustee for the benefit of the
      Noteholder.

     

    Section
      11.5 Limitations
      on Rights of Others.
      The
      provisions of this Agreement are solely for the benefit of the parties hereto
      and for the benefit of the Noteholder or its assignee, as a third-party
      beneficiary. Nothing in this Agreement, whether express or implied, shall be
      construed to give to any other Person any legal or equitable right, remedy
      or
      claim in the Collateral or under or in respect of this Agreement or any
      covenants, conditions or provisions contained herein.

     

    Section
      11.6 Severability.
      Any
      provision of this Agreement that is prohibited or unenforceable in any
      jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
      such prohibition or unenforceability without invalidating the remaining
      provisions hereof, and any such prohibition or unenforceability in any
      jurisdiction shall not invalidate or render unenforceable such provision in
      any
      other jurisdiction.

     

    Section
      11.7 Separate
      Counterparts.
      This
      Agreement may be executed by the parties hereto in separate counterparts, each
      of which when so executed and delivered shall be an original, but all such
      counterparts shall together constitute but one and the same
      instrument.

     

    Section
      11.8 Headings.
      The
      headings of the various Articles and Sections herein are for convenience of
      reference only and shall not define or limit any of the terms or provisions
      hereof.

     

    Section
      11.9 Governing
      Law.
      HIS
      AGREEMENT (OTHER THAN SECTIONS 2.1(a) AND 2.2 HEREOF) SHALL BE CONSTRUED IN
      ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
      CONFLICT OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS
      LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL
      BE
      DETERMINED IN ACCORDANCE WITH SUCH LAWS. SECTIONS 2.1(a) AND 2.2 OF THIS
      AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
      DELAWARE AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES UNDER SUCH
      SECTIONS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     

    Section
      11.10 Assignment
      to Trustee.
      The
      Seller hereby acknowledges and consents to any mortgage, pledge, assignment
      and
      grant of a security interest by the Purchaser to the Trustee pursuant to the
      Indenture for the benefit of the Noteholder of all right, title and interest
      of
      the Purchaser in, to and under the Receivables and Other Conveyed Property
      and/or the assignment of any or all of the Purchaser’s rights and obligations
      hereunder to the Trustee.

     

    Section
      11.11 Nonpetition
      Covenants.
      Notwithstanding
      any prior termination of this Agreement, the Servicer and the Seller shall
      not,
      prior to the date which is one year and one day after the Final Scheduled
      Settlement Date, acquiesce, petition or otherwise invoke or cause the Purchaser
      to invoke the process of any court or government authority for the purpose
      of
      commencing or sustaining a case against the Purchaser under any federal or
      state
      bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
      assignee, trustee, custodian, sequestrator or other similar official of the
      Purchaser or any substantial part of its property, or ordering the winding
      up or
      liquidation of the affairs of the Purchaser.

     

    
      
        
        

      

      
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    Section
      11.12 Limitation
      of Liability of Trustee.
      Notwithstanding
      anything contained herein to the contrary, this Agreement has been executed
      and
      delivered by Wells Fargo Bank, National Association, not in its individual
      capacity but solely as Trustee and Backup Servicer and in no event shall Wells
      Fargo Bank, National Association, have any liability for the representations,
      warranties, covenants, agreements or other obligations of the Purchaser
      hereunder or in any of the certificates, notices or agreements delivered
      pursuant hereto, as to all of which recourse shall be had solely to the assets
      of the Purchaser.

     

    Section
      11.13 Independence
      of the Servicer.
      For
      all
      purposes of this Agreement, the Servicer shall be an independent contractor
      and
      shall not be subject to the supervision of the Purchaser, the Trustee and Backup
      Servicer with respect to the manner in which it accomplishes the performance
      of
      its obligations hereunder. Unless expressly authorized by this Agreement, the
      Servicer shall have no authority to act for or represent the Purchaser in any
      way and shall not otherwise be deemed an agent of the Purchaser.

     

    Section
      11.14 No
      Joint Venture.
      Nothing
      contained in this Agreement (i) shall constitute the Servicer and the Purchaser
      as members of any partnership, joint venture, association, syndicate,
      unincorporated business or other separate entity, (ii) shall be construed to
      impose any liability as such on any of them or (iii) shall be deemed to confer
      on any of them any express, implied or apparent authority to incur any
      obligation or liability on behalf of the others.

     

    Section
      11.15 Intention
      of Parties Regarding Delaware Securitization Act.
      It
      is the
      intention of the Purchaser and the Seller that the transfer and assignment
      of
      the property contemplated by Section
      2.1(a)
      of this
      Agreement shall constitute a sale of property from the Seller to the Purchaser,
      conveying good title thereto free and clear of any liens, and the beneficial
      interest in and title to such assets shall not be part of the Seller’s estate in
      the event of the filing of a bankruptcy petition by or against the Seller under
      any bankruptcy or similar law. In addition, for purposes of complying with
      the
      requirements of the Asset-Backed Securities Facilitation Act of the State of
      Delaware, 6 Del. C. § 2701A, et seq. (the “Securitization Act”), each of the
      parties hereto hereby agrees that:

    


    (a) any
      property, assets or rights purported to be transferred, in whole or in part,
      by
      the Seller to the Purchaser pursuant to this Agreement shall be deemed to no
      longer be the property, assets or rights of the Seller;

    


    (b) none
      of
      the Seller, its creditors or, in any insolvency proceeding with respect to
      the
      Seller or the Seller’s property, a bankruptcy trustee, receiver, debtor, debtor
      in possession or similar person, to the extent the issue is governed by Delaware
      law, shall have any rights, legal or equitable, whatsoever to reacquire (except
      pursuant to a provision of this Agreement), reclaim, recover, repudiate,
      disaffirm, redeem or recharacterize as property of the Seller any property,
      assets or rights purported to be transferred, in whole or in part, by the Seller
      to the Purchaser pursuant to this Agreement;

    


    (c) in
      the
      event of a bankruptcy, receivership or other insolvency proceeding with respect
      to the Seller or the Seller’s property, to the extent the issue is governed by
      Delaware law, such property, assets and rights shall not be deemed to be part
      of
      the Seller’s property, assets, rights or estate; and

    


    (d) the
      transaction contemplated by this Agreement shall constitute a “securitization
      transaction” as such term is used in the Securitization Act.

     

    Section
      11.16 Special
      Supplemental Agreement.
      If
      any
      party to this Agreement is unable to sign any amendment or supplement due to
      its
      dissolution, winding up or comparable circumstances, then the consent of the
      Noteholder shall be sufficient to amend this Agreement without such party’s
      signature.

     

    Section
      11.17 Limited
      Recourse.
      Notwithstanding
      anything to the contrary contained in this Agreement, the obligations of the
      Purchaser hereunder are solely the obligations of the Purchaser, and shall
      be
      payable by the Purchaser, solely as provided herein. The Purchaser shall only
      be
      required to pay (a) any fees, expenses, indemnities or other liabilities that
      it
      may incur hereunder (i) from funds available pursuant to, and in accordance
      with, the payment priorities set forth in Section
      5.7(a)
      and (ii)
      only to the extent the Purchaser receives additional funds for such purposes
      or
      to the extent it has additional funds available (other than funds described
      in
      the preceding clause (i)) that would be in excess of amounts that would be
      necessary to pay the debt and other obligations of the Purchaser incurred in
      accordance with the Purchaser’s limited liability company agreement and all
      financing documents to which the Purchaser is a party. In addition, no amount
      owing by the Purchaser hereunder in excess of the liabilities that it is
      required to pay in accordance with the preceding sentence shall constitute
      a
“claim” (as defined in Section 101(5) of the Bankruptcy Code) against it.


     

    
      
        
        

      

      
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    Section
      11.18 Acknowledgement
      of Roles.
      The
      parties expressly acknowledge and consent to Wells Fargo Bank, National
      Association acting in the multiple capacities of Backup Servicer and Trustee.
      The parties agree that Wells Fargo Bank, National Association in such multiple
      capacities shall not be subject to any claim, defense or liability arising
      from
      its performance in any such capacity based on conflict of interest principles,
      duty of loyalty principles or other breach of fiduciary duties to the extent
      that any such conflict or breach arises from the performance by Wells Fargo
      Bank, National Association of any other such capacity or capacities in
      accordance with this Agreement or any other Basic Documents to which it is
      a
      party.

     

    Section
      11.19 Termination.
      The
      respective obligations and responsibilities of the Seller, the Purchaser, the
      Servicer, the Backup Servicer, and the Trustee created hereby shall terminate
      on
      the Termination Date; provided, however, in any case there shall be delivered
      to
      the Trustee and the Noteholder an Opinion of Counsel that all applicable
      preference periods under federal, state and local bankruptcy, insolvency and
      similar laws have expired with respect to the payments pursuant to this
Section
      11.19.
      The
      Servicer shall promptly notify the Trustee, the Seller, the Issuer, each Rating
      Agency and the Noteholder of any prospective termination pursuant to this
Section
      11.19. 

     

    Section
      11.20 Submission
      to Jurisdiction.
      ANY
      LEGAL
      ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS
      OF THE STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
      OF
      NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE PARTIES
      HERETO CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE
      JURISDICTION OF THOSE COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
      ANY
      OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
      GROUNDS OF FORUM NON CONVENIENS, OR ANY LEGAL PROCESS WITH RESPECT TO ITSELF
      OR
      ANY OF ITS PROPERTY, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
      ANY
      ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY
      DOCUMENT RELATED HERETO. EACH OF THE PARTIES HERETO WAIVES PERSONAL SERVICE
      OF
      ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
      PERMITTED BY NEW YORK LAW.

     

    Section
      11.21 Waiver
      of Trial by Jury.
      THE
      PARTIES HERETO EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY
      CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS
      AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING
      OR
      OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY PARTY AGAINST THE OTHER PARTY,
      WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS OR OTHERWISE. THE PARTIES
      HERETO EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY
      A
      COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
      AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION
      OF
      THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS,
      IN
      WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
      OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
      RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

     

    Section
      11.22 Process
      Agent.
      Each
      of
      Purchaser, Seller, Servicer and Trustee agrees that the process by which any
      proceedings in the State of New York are begun may be served on it by being
      delivered by certified mail at the chief executive office or corporate trust
      office, as applicable, or at its registered office for the time being. If such
      person is not or ceases to be effectively appointed to accept service of process
      on the Purchaser’s, Seller’s, Servicer’s or Trustee’s behalf, the Purchaser,
      Seller, Servicer or Trustee, as applicable, shall, on the written demand of
      the
      process agent, appoint a further person in the State of New York to accept
      service of process on its behalf and, failing such appointment within 15 days,
      the process agent shall be entitled to appoint such a person by written notice
      to the Purchaser, Seller, Servicer or Trustee, as applicable. Nothing in this
      sub-clause shall affect the right of the process agent to serve process in
      any
      other manner permitted by law.

     

    Section
      11.23 No
      Set-Off.
      Each
      of
      the Seller and Servicer agrees that it shall have no right of set-off or
      banker’s lien against, and no right to otherwise deduct from, any funds held in
      any account described herein or in the Basic Documents for any amount owed
      to it
      by the Seller, Servicer or Noteholder.

     

    Section
      11.24 No
      Waiver; Cumulative Remedies.
      No
      failure to exercise and no delay in exercising any right, remedy, power or
      privilege hereunder, shall operate as a waiver thereof; nor shall any single
      or
      partial exercise of any right, remedy, power or privilege hereunder preclude
      any
      other or further exercise hereof or the exercise of any other right, remedy,
      power or privilege. The rights, remedies, powers and privileges herein provided
      are cumulative and not exhaustive of any rights, remedies, powers and privileges
      provided by law.

     

    Section
      11.25 Merger
      and Integration.
      Except
      as
      specifically stated otherwise herein, this Agreement sets forth the entire
      understanding of the parties relating to the subject matter hereof, and all
      prior understandings, written or oral, are superseded by this Agreement. This
      Agreement may not be modified, amended, waived or supplemented except as
      provided herein.

    


    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
      executed and delivered by their respective duly authorized officers as of the
      day and the year first above written.

     

    
      	 	 	 
	 	SILVERLEAF
              FINANCE
              IV, LLC,
	 	a Delaware limited liability company,
              as
              Purchaser 
	 
 	 
 	 
 
	 	By:  	/S/ HARRY
              J.
              WHITE, JR.
	 	Name: Harry
              J. White, Jr. 
	 	Title: Vice
              President, Treasurer & Chief Financial
              Officer 


    

     

    
      	 	 	 
	 	SILVERLEAF
              RESORTS, INC.,
	 	a Texas corporation, as
              Seller 
	 
 	 
 	 
 
	 	By:  	/S/ HARRY
              J.
              WHITE, JR.
	 	Name: Harry
              J. White, Jr. 
	 	Title: Chief
              Financial Officer 


    

     

    
      	 	 	 
	 	SILVERLEAF RESORTS, INC.,
	 	a Texas corporation, as
              Servicer 
	 
 	 
 	 
 
	 	By:  	/S/
              HARRY J.
              WHITE, JR.
	 	Name: Harry
              J. White, Jr. 
	 	Title: Chief
              Financial Officer 


    

     

    
      	 	 	 
	 	WELLS FARGO BANK, NATIONAL
              ASSOCIATION,
	 	not in its individual capacity, but
              solely as
              Backup Servicer, 
	 	Trustee and Account
              Intermediary 
	 
 	 
 	 
 
	 	By:  	/S/ SUE
              DIGNAN
	 	Name: Sue Dignan 
	 	Title: Assistant Vice
              President 


    

     

    Agreed
      and accepted:

    


    UBS
      REAL
      ESTATE SECURITIES INC.

    


    By:
      Mostafiz
      Shahmohammed  

    Title:
      Executive
      Director 

    


    By:
      Reginald
      Devilliers  

    Title:
      Director 

    


    
      
        
        

      

      
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    List
      of
      Schedule and Exhibits to Agreement not Filed Herewith:

    


    Schedule
      B--Location for Delivery of Timeshare Loan Files

    Schedule
      C--Form of Trial Balance Report/Delinquency Report

    Exhibit
      A--Form of Servicer’s Certificate

    Exhibit
      B--Eligibility Criteria

    Exhibit
      C--Form of Assignment

    Exhibit
      D--Form of Addition Notice

    Exhibit
      E--ACH Form

    Exhibit
      F--List of Silverleaf Executive Management

    Exhibit
      G--Record Layout

    Exhibit
      H--Servicer’s Monthly Representation Certificate

    Exhibit
      I--Escrow Agent Wiring Instructions 

    Exhibit
      J--Form of Waiver Letter

    Exhibit
      K--Credit Policy/Collection Policy

    Exhibit
      L--Form of Notice of Non-Titled Loans

    


    
      
        
        

      

      
        52