exv10w2



 






Ex. 10.2




STANDARD DEFINITIONS




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



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



     “ACH Form” shall mean the ACH authorization form executed by Obligors substantially in
the form attached as Exhibit C to the Transfer Agreement.



     “Act” shall have the meaning specified in Section 1.4 of the Indenture.



     “Additional Servicing Compensation” shall mean any late fees related to late payments
on the Timeshare Loans, any non-sufficient funds fees, any processing fees and any Liquidation
Expenses collected by the Servicer and any unpaid out-of-pocket expenses incurred by the Servicer
during the related Due Period.



     “Adjusted Note Balance” shall equal, for any Class of Notes, the Outstanding Note
Balance of such Class of Notes immediately prior to such Payment Date, less any Note Balance
Write-Down Amounts as of such Payment Date; provided, however, to the extent that for purposes of
consents, approvals, voting or other similar act of the Noteholders under any of the Transaction
Documents, “Adjusted Note Balance” shall exclude Notes which are held by Silverleaf or any
Affiliate thereof.



     “Adverse Claim” shall mean any claim of ownership or any lien, security interest,
title retention, trust or other charge or encumbrance, or other type of preferential arrangement
having the effect or purpose of creating a lien or security interest, other than the interests
created under the Indenture in favor of the Indenture Trustee and the Noteholders.



     “Affiliate” shall mean any Person: (a) which directly or indirectly controls, or is
controlled by, or is under common control with such Person; (b) which directly or indirectly
beneficially owns or holds five percent (5%) or more of the voting stock of such Person; or (c) for
which five percent (5%) or more of the voting stock of which is directly or indirectly beneficially
owned or held by such Person. The term “control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.



     “Aggregate Initial Note Balance” is equal to the sum of the Initial Note Balances for
all Classes of Notes.



     “Aggregate Loan Balance” means the sum of the Loan Balances for all Timeshare Loans
(except Defaulted Timeshare Loans).



 









 





     “Aggregate Outstanding Note Balance” is equal to the sum of the Outstanding Note
Balances for all Classes of Notes.



     “Assignment of Mortgage” shall mean, with respect to a Mortgage Loan, a written
assignment of one or more Mortgages from the related Originator or Seller to the Indenture Trustee,
for the benefit of the Noteholders, relating to one or more Timeshare Loans in recordable form, and
signed by an Authorized Officer of all necessary parties, sufficient under the laws of the
jurisdiction wherein the related Timeshare Property is located to give record notice of a transfer
of such Mortgage and its proceeds to the Indenture Trustee.



     “Association” shall mean the not-for-profit corporation or cooperative association
responsible for operating a Resort.



     “Assumption Date” shall have the meaning specified in the Backup Servicing Agreement.



     “Authorized Officer” shall mean, with respect to any corporation, limited liability
company or partnership, the Chairman of the Board, the President, any Vice President, the
Secretary, the Treasurer, any Assistant Secretary, any Assistant Treasurer, Managing Member and
each other officer of such corporation or limited liability company or the general partner of such
partnership specifically authorized in resolutions of the Board of Directors of such corporation or
managing member of such limited liability company to sign agreements, instruments or other
documents in connection with this Indenture on behalf of such corporation, limited liability
company or partnership, as the case may be.



     “Available Funds” shall mean for any Payment Date, (A) all funds on deposit in the
Collection Account after making all transfers and deposits required from (i) the Lockbox Account
pursuant to the Lockbox Agreement, (ii) the General Reserve Account pursuant to Section 3.2(b) of
the Indenture, (iii) the Senior Reserve Account pursuant to Section 3.2(c) of the Indenture, (iv)
the Originator or the Servicer, as the case may be, pursuant to Section 4.4 of the Indenture, and
(v) the Servicer pursuant to the Indenture, plus (B) all investment earnings on funds on deposit in
the Collection Account from the immediately preceding Payment Date through such Payment Date, less
(C) amounts on deposit in the Collection Account related to collections related to any Due Periods
subsequent to the Due Period related to such Payment Date, less (D) any Additional Servicing
Compensation on deposit in the Collection Account.



     “Backup Servicer” shall mean Wells Fargo Bank, National Association, a national
association, and its permitted successors and assigns.



     “Backup Servicing Agreement” shall mean the backup servicing agreement, dated as of
July 1, 2005, by and among the Issuer, the Servicer, the Backup Servicer and the Indenture Trustee,
as the same may be amended, supplemented or otherwise modified from time to time.



     “Backup Servicing Fee” shall on each Payment Date be equal to $2,500.



     “Bankruptcy Code” shall mean the federal Bankruptcy Code, as amended (Title 11 of the
United States Code).



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     “Benefit Plan” shall mean (A) an “employee benefit plan” as defined in Section 3(3) of
ERISA that is subject to Title I of ERISA, (B) a “plan” as defined in Section 4975(e)(1) of the
Code, (C) an entity whose underlying assets are deemed to include “plan assets” of any of the
foregoing under United States Department of Labor Regulation §2510.3-101, by reason of investment
by an employee beneficiary or plan if such entity or (D) a plan that is subject to similar law.



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



     “Business Day” shall mean any day other than (i) a Saturday, a Sunday, or (ii) a day
on which banking institutions in New York City, Wilmington, Delaware, the State of Texas, the city
in which the Servicer is located or the city in which the Corporate Trust Office of the Indenture
Trustee is located are authorized or obligated by law or executive order to be closed.



     “Cash Accumulation Event” shall exist on any Determination Date, if the Cumulative
Default Level as of the last day of any month specified below (in each case referring to whole
calendar months elapsed since the Cut-Off Date) exceeds the following parameters (each indicated
3-month period (except the first period, which is a 4-month period, but is included in this defined
term), an “Accumulation Interval”):



	 	 	 	 	 
	Month	 	Cumulative Default Level %
	0-3
	 	 	0.93	%
	 
	 	 	 	 
	4-6
	 	 	3.82	%
	 
	 	 	 	 
	7-9
	 	 	6.80	%
	 
	 	 	 	 
	10-12
	 	 	8.81	%
	 
	 	 	 	 
	13-15
	 	 	10.46	%
	 
	 	 	 	 
	16-18
	 	 	12.36	%
	 
	 	 	 	 
	19-21
	 	 	14.21	%
	 
	 	 	 	 
	22-24
	 	 	15.32	%
	 
	 	 	 	 
	25-27
	 	 	16.21	%
	 
	 	 	 	 
	28-30
	 	 	17.05	%
	 
	 	 	 	 
	31-33
	 	 	18.07	%
	 
	 	 	 	 
	34-36
	 	 	18.71	%
	 
	 	 	 	 
	37-39
	 	 	19.16	%
	 
	 	 	 	 
	40-42
	 	 	19.51	%
	 
	 	 	 	 
	43 and thereafter
	 	 	19.60	%






     A Cash Accumulation Event shall be deemed to be continuing until, on the last Business
Day of each of the two Accumulation Intervals immediately following the Accumulation Interval



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during which such Cash Accumulation Event occurred, the Cumulative Default Level remains below
the limits described above.




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



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



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



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



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



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



     “Closing Date” shall mean July 26, 2005.



     “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time and
any successor statute, together with the rules and regulations thereunder.



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



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



     “Collection Account” shall mean the account established and maintained by the
Indenture Trustee pursuant to Section 3.2(a) of the Indenture.



     “Collection Policy” shall mean the collection policies of the initial servicer in
effect on the Closing Date, as may be amended from time to time in accordance with the Servicing
Standard.



     “Completed Unit” shall mean a Unit at a Resort which has been fully constructed and
furnished, has received a valid permanent certificate of occupancy (if required under applicable
laws, rules or regulations), is ready for occupancy and is subject to a time share declaration.



     “Confidential Information” means information obtained by any Noteholder including,
without limitation, the Preliminary Confidential Offering Circular dated June 28, 2005 or the
Confidential Offering Circular dated July 14, 2005 related to the Notes and the Transaction
Documents, that is proprietary in nature and that was clearly marked or labeled as being
confidential information of the Issuer, the Servicer or their Affiliates, provided that such term
does not include information that (a) was publicly known or otherwise known to the Noteholder



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prior to the time of such disclosure, (b) subsequently becomes, publicly known through no act
or omission by such Noteholder or any Person acting on its behalf, (c) otherwise becomes known to
the Noteholder other than through disclosure by the Issuer, the Servicer or their Affiliates, (d)
any other public disclosure authorized by the Issuer or the Servicer, the U.S. Federal income tax
treatment of the offering of the notes and any fact that may be relevant to understanding the tax
treatment (the “Tax Structure”) and all materials of any kind (including opinions or other tax
analyses) that are provided to the Issuer, the Initial Purchaser and each prospective investor
relating to such tax treatment and Tax Structure.




     “Confidential Offering Circular” shall mean the confidential offering circular dated
July 14, 2005 related to the Notes and Transaction Documents.



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



     “Contribute” shall have the meaning specified in Section 2(a) of the Transfer
Agreement.



     “Contribution” shall have the meaning specified in Section 2(a) of the Transfer
Agreement.



     “Corporate Trust Office” shall mean the office of the Indenture Trustee located in the
State of Minnesota, which office is at the address set forth in Section 13.3 of the Indenture.



     “Credit Policy” shall mean the credit and underwriting policies of the Originator in
effect on the Closing Date.



     “Cumulative Default Level” shall mean for any date, an amount equal to the sum of the
Loan Balances of all Timeshare Loans that became Defaulted Timeshare Loans since the Cut-Off Date
divided by the Cut-Off Date Aggregate Loan Balance (expressed as a percentage).



     “Custodial Agreement” shall mean the custodial agreement, dated as of July 1, 2005 by
and among the Issuer, the Servicer, the Backup Servicer, the Indenture Trustee and Custodian, as
the same may be amended, supplemented or otherwise modified from time to time providing for the
custody and maintenance of the Timeshare Loan Files relating to the Timeshare Loans.



     “Custodian” shall mean Wells Fargo Bank, National Association, a national banking
association, or its permitted successors and assigns.



     “Custodian Fees” shall mean for each Payment Date, the fee payable by the Issuer to
the Custodian in accordance with the Custodial Agreement.



     “Cut-Off Date” shall mean, with respect to (i) the Initial Timeshare Loans, the
Initial Cut-Off Date, and (ii) any Qualified Substitute Timeshare Loan, the related Subsequent
Cut-Off Date.



     “Cut-Off Date Aggregate Loan Balance” shall mean the aggregate of the Loan Balances of
all Timeshare Loans as of the Initial Cut-Off Date.



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     “Cut-Off Date Loan Balance” shall mean the Loan Balance of a Timeshare Loan on the
related Cut-Off Date.



     “Default” shall mean an event which, but for the passage of time, would constitute an
Event of Default under the Indenture.



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



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



     “Defaulted Timeshare Loan” is any Timeshare Loan for which any of the earliest
following events may have occurred: (i) the Servicer has commenced cancellation or forfeiture
actions on the related Timeshare Loan after collection efforts have failed in accordance with its
credit and collection policies, (ii) as of the last day of any Due Period, all or part of a
scheduled payment under the Timeshare Loan is more than 120 days delinquent from the due date, or
(iii) the Servicer obtains actual knowledge that a bankruptcy event has occurred with respect to
the related Obligor.



     “Defective Timeshare Loan” shall have the meaning specified in Section 4.4 of the
Indenture.



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



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



     “Depository” shall mean an organization registered as a “clearing agency” pursuant to
Section 17A of the Securities Exchange Act of 1934, as amended. The initial Depository shall be
The Depository Trust Company.



     “Depository Agreement” shall mean the letter of representations dated as of July 26,
2005, by and among the Issuer, the Indenture Trustee and the Depository.



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



     “Determination Date” shall mean, with respect to a Payment Date, the day that is five
Business Days prior to such Payment Date.



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



     “Due Period” shall mean with respect to any Payment Date, the immediately preceding
calendar month; for the Initial Payment Date, the period from and including June 21, 2005 to July
31, 2005.



     “Eligible Bank Account” shall mean a segregated account, which may be an account
maintained with the Indenture Trustee, which is either (a) maintained with a depositary institution
or trust company whose long-term unsecured debt obligations are rated at least “A” by Fitch and
“A2” by Moody’s and whose short-term unsecured obligations are rated at least “A-1” by Fitch and
“P-1” by Moody’s; or (b) a trust account or similar account maintained at the corporate trust
department of the Indenture Trustee.



     “Eligible Investments” shall mean one or more of the following:




     (a) obligations of, or guaranteed as to timely payment of principal and interest by,
the United States or any agency or instrumentality thereof when such obligations are backed
by the full faith and credit of the United States;




     (b) federal funds, certificates of deposit, time deposits and bankers’ acceptances,
each of which shall not have an original maturity of more than 90 days, of any depository
institution or trust company incorporated under the laws of the United States or any state;
provided that the long-term unsecured debt obligations of such depository institution or
trust company at the date of acquisition thereof have been rated by each Rating Agency in
one of the three highest rating categories available from S&P and no lower than “A2” by
Moody’s; and provided, further, that the short-term obligations of such depository
institution or trust company shall be rated in the highest rating category by such Rating
Agency;




     (c) commercial paper or commercial paper funds (having original maturities of not more
than 90 days) of any corporation incorporated under the laws of the United States or any
state thereof; provided that any such commercial paper or commercial paper funds shall be
rated in the highest short-term rating category by each Rating Agency; and




     (d) any no-load money market fund rated (including money market funds managed or
advised by the Indenture Trustee or an Affiliate thereof) in the highest short-term rating
category or equivalent highest long-term rating category by each Rating Agency; provided
that, Eligible Investment obligations purchased from funds in the Eligible Bank Accounts
shall include only such or securities that either may be redeemed daily or mature no later
than the Business Day next preceding the next Payment Date;




     (e) demand and time deposits in, certificates of deposit of, bankers’ acceptances
issued by, or federal funds sold by any depository institution or trust company (including
the Indenture Trustee or any Affiliate of the Indenture Trustee, acting in its commercial
capacity) incorporated under the laws of the United States of America or any State thereof
and subject to supervision and examination by federal



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and/or state authorities, so long as, at the time of such investment, the commercial
paper or other short-term deposits of such depository institution or trust company are rated
at least P-1 by Moody’s and at least A-1 by S&P;


and provided, further, that (i) no instrument shall be an Eligible Investment if such instrument
evidences a right to receive only interest payments with respect to the obligations underlying such
instrument, and (ii) no Eligible Investment may be purchased at a price in excess of par. Eligible
Investments may include those Eligible Investments with respect to which the Indenture Trustee or
an Affiliate thereof provides services.




     “Eligible Timeshare Loan” shall mean a Timeshare Loan which meets all of the criteria
set forth in Schedule I of the Transfer Agreement.



     “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.



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



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



     “Finance Agreement” shall mean a purchase and finance agreement between an Obligor and
the Originator pursuant to which such Obligor finances the purchase of Oak N’ Spruce Certificates.



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



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



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



     “General Reserve Account Required Balance” shall mean the lesser of (I) (a) if no Cash
Accumulation Event has occurred and is continuing, the greater of (x) 3.00% of the Cut-Off Date
Aggregate Loan Balance and (y) 11.00% of the Aggregate Loan Balance at such time and (b) if a Cash
Accumulation Event has occurred and is continuing, the greater of (x) 3.00% of the Cut-Off Date
Aggregate Loan Balance and (y) the product of (i) the Aggregate Loan Balance as of the last day of
the immediately preceding Due Period and (ii) 20.0% and (II) the Outstanding Note Balance on such
Payment Date after the distributions of principal in respect of the Notes on such Payment Date.



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



     “Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.



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     “Grant” shall mean to grant, bargain, convey, assign, transfer, mortgage, pledge,
create and grant a security interest in and right of set-off against, deposit, set over and
confirm.



     “Highest Lawful Rate” shall have the meaning specified in Section 3 of the Transfer
Agreement.



     “Holder” or “Noteholder” shall mean a holder of a Class A Note, a Class B
Note, a Class C Note or a Class D Note.



     “Indemnified Amounts” shall have the meaning specified in Section 8 of the Transfer
Agreement.



     “Indemnified Parties” shall have the meaning specified in Section 8 of the Transfer
Agreement.



     “Indenture” shall mean the indenture, dated as of July 1, 2005, by and among the
Issuer, the Oak N’ Spruce Trustee, the Servicer, the Backup Servicer and the Indenture Trustee.



     “Indenture Trustee” shall mean Wells Fargo Bank, National Association, a national
banking association, not in its individual capacity but solely as Indenture Trustee under the
Indenture, and any successor as set forth in Section 7.9 of the Indenture.



     “Indenture Trustee Fee” shall mean for each Payment Date, the product of one-twelfth
and $6,000.



     “Initial Cut-Off Date” shall mean the close of business on June 20, 2005.



     “Initial Note Balance” shall mean with respect to the Class A Notes, the Class B
Notes, the Class C Notes and the Class D Notes, $46,857,000, $28,522,000, $16,299,000 and
$16,977,000, respectively.



     “Initial Payment Date” shall mean the Payment Date occurring in August, 2005.



     “Initial Purchaser” shall mean UBS Securities LLC.



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



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



     “Interest Distribution Amount” shall equal, for a Class of Notes and on any Payment
Date, the sum of (i) interest accrued during the related Interest Accrual Period at the related
Note Rate on the Outstanding Note Balance of such Class of Notes immediately prior to such Payment
Date (or, if any Note Balance Write-Down Amounts have been applied to such Class of Notes, the
Adjusted Note Balance of such Class of Notes) and (ii) the amount of unpaid Interest Distribution
Amounts from prior Payment Dates for such Class of Notes, plus, to the extent permitted by
applicable law, interest on such unpaid amount at the related Note Rate. The



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Interest Distribution Amount shall be calculated on the basis of a 360-day year consisting of
twelve 30-day months.




     “Issuer” shall mean Silverleaf Finance III, LLC, a limited liability company formed
under the laws of the State of Delaware.



     “Issuer Order” shall mean a written order or request delivered to the Indenture
Trustee and signed in the name of the Issuer by an Authorized Officer of the Issuer.



     “Knowledge” shall mean (a) as to any natural Person, the actual awareness of the fact,
event or circumstance at issue or receipt of notification by proper delivery of such fact, event or
circumstance and (b) as to any Person that is not a natural Person, the actual awareness of the
fact, event or circumstance at issue by a Responsible Officer of such Person or receipt, by a
Responsible Officer of such Person, of notification by proper delivery of such fact, event or
circumstance.



     “Leverage Ratio” shall mean, as of the last business day of each calendar quarter, the
ratio of (i) the sum of all debt of the Servicer and its subsidiaries on a consolidated basis
(other than off-balance sheet debt that is non-recourse to the Servicer) to (ii) the Servicer’s and
its subsidiaries’ Tangible Net Worth, on a consolidated basis.



     “Lien” shall mean any mortgage, pledge, hypothecation, assignment for security,
security interest, claim, participation, encumbrance, levy, lien or charge.



     “Limited Liability Company Agreement” shall mean the limited liability company
agreement of Silverleaf Finance III, LLC, dated as of July 1, 2005.



     “Liquidation” means with respect to any Timeshare Loan, the sale or compulsory
disposition of the related Timeshare Property, following foreclosure, forfeiture or other
enforcement action or the taking of a deed-in-lieu of foreclosure, to a Person other than the
Servicer or an Affiliate thereof, except in accordance with Section 5.3(b)(iv) of the Indenture.



     “Liquidation Expenses” shall mean, with respect to a Defaulted Timeshare Loan, as of
any date of determination, any out-of-pocket expenses (exclusive of overhead expenses) incurred by
the Servicer in connection with the performance of its obligations under Section 5.3(b) in the
Indenture, including, but not limited to, (i) any foreclosure or forfeiture and other repossession
expenses incurred with respect to such Timeshare Loan, (ii) actual commissions and marketing and
sales expenses incurred by the Servicer with respect to the liquidation of the related Timeshare
Property and (iii) any other fees and expenses reasonably applied or allocated in the ordinary
course of business with respect to the Liquidation of such Defaulted Timeshare Loan (including any
assessed and unpaid Association fees and real estate taxes).



     “Liquidation Proceeds” means with respect to the Liquidation of any Timeshare Loan,
the amounts actually received by the Servicer in connection with such Liquidation.



     “Loan Balance” shall mean, for any date of determination, the outstanding principal
balance due under or in respect of a Timeshare Loan (including a Defaulted Timeshare Loan).



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     “Lockbox Account” shall mean the account maintained pursuant to the Lockbox Agreement,
which shall be a non-interest bearing account.



     “Lockbox Agreement” shall mean the lockbox agreement, dated as of July 1, 2005, by and
among the Issuer, the Indenture Trustee and the Lockbox Bank.



     “Lockbox Bank” shall mean JPMorgan Chase Bank, a national banking association.



     “Lockbox Fee” shall mean on each Payment Date, the fee payable by the Issuer to the
Lockbox Bank in accordance with the Lockbox Agreement.



     “Management Agreement” shall mean that certain Management Agreement between the
Managing Entity and each Association, dated as of March 28, 1990, as amended from time to time.



     “Managing Entity” shall mean Silverleaf Club, a Texas not-for-profit corporation, in
its capacity as manager for all Associations.



     “Misdirected Deposits” shall mean such payments that have been deposited to the
Collection Account in error.



     “Monthly Servicer Report” shall have the meaning specified in Section 5.5 of the
Indenture.



     “Moody’s” shall mean Moody’s Investors Service, Inc.



     “Mortgage” shall mean, with respect to a Mortgage Loan, any purchase money mortgage,
deed of trust, purchase money deed of trust or mortgage deed creating a first lien on a Timeshare
Property to secure debt granted by an Obligor to the Originator with respect to the purchase of
such Timeshare Property and otherwise encumbering the related Timeshare Property to secure payments
or other obligations under such Timeshare Loan.



     “Mortgage Loan” shall mean a Timeshare Loan originated by the Originator and evidenced
by a Mortgage Note and secured by a first Mortgage on a fractional fee simple timeshare interest in
a Unit.



     “Mortgage Note” shall mean, with respect to a Mortgage Loan, the original, executed
promissory note evidencing the indebtedness of an Obligor under a Mortgage Loan, together with any
rider, addendum or amendment thereto, or any renewal, substitution or replacement of such note.



     “Net Liquidation Proceeds” shall mean with respect to a Liquidation, the positive
difference between Liquidation Proceeds and Liquidation Expenses.



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



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



     “Note Purchase Agreement” shall mean that certain note purchase agreement dated July
14, 2005 by and among the Initial Purchaser, Silverleaf and the Issuer.



     “Note Rate” shall mean with respect to the Class A Notes, the Class B Notes, the Class
C Notes and the Class D Notes, 4.857%, 5.158%, 5.758% and 6.756%, respectively.



     “Note Register” shall have the meaning specified in Section 2.4(a) of the Indenture.



     “Note Registrar” shall have the meaning specified in Section 2.4(a) of the Indenture.



     “Noteholder” shall mean any holder of a Note of any Class.



     “Notes” shall mean collectively, the Class A Notes, the Class B Notes, the Class C
Notes and the Class D Notes.



     “Oak N’ Spruce Loan” shall mean a Timeshare Loan relating to the Oak N’ Spruce Resort
and evidenced by a Finance Agreement.



     “Oak N’ Spruce Certificate” shall mean a certificate of beneficial interest in Oak N’
Spruce Resort Trust which entitles the owner thereof the right to use and occupy a specifically
designated Unit at a fixed period of time each year at the Oak N’ Spruce Resort.



     “Oak N’ Spruce Resort” shall mean the timeshare resort and related facilities located
in Lee, Massachusetts and operated by the Originator.



     “Oak N’ Spruce Resort Trust” shall mean the trust established under the Oak N’ Spruce
Trust Agreement.



     “Oak N’ Spruce Trust Agreement” shall mean, collectively, that certain Sixth Amended
and Restated Declaration of Trust of Oak N’ Spruce Resort Trust, dated as of September 20, 2004, as
amended, restated or otherwise modified from time to time, together with all other agreements,
documents and instruments governing the operation of the Oak N’ Spruce Resort Trust, including
without limitation, the Time Share Supplement to the Sixth Amended and Restated Declaration of
Trust of Oak N’ Spruce Resort Trust, dated September 20, 2004 and the Recreation and Use Easement,
dated September 20, 2000, as any such documents may be amended, restated or otherwise modified from
time to time.



     “Oak N’ Spruce Trustee” shall mean Silverleaf Berkshires, Inc., a Texas corporation,
in its capacity as trustee under the Oak N’ Spruce Trust Agreement, and its permitted successors
and assigns.



     “Obligor” shall mean the related obligor under a Timeshare Loan.



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     “Officer’s Certificate” shall mean a certificate executed by a Responsible Officer of
the related party.



     “Opinion of Counsel” shall mean a written opinion of counsel, in each case acceptable
to the addressees thereof.



     “Optional Purchase Limit” shall mean, on any date, an amount equal to (x) 15% of the
Cut-Off Date Aggregate Loan Balance less (y) the aggregate Loan Balances (as of the related
purchase dates) of all Defaulted Timeshare Loans previously purchased by the Originator pursuant to
the Transfer Agreement.



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



     “Originator” shall mean Silverleaf Resorts, Inc., in its capacity as the originator of
the Timeshare Loans.



     “Outstanding” shall mean, with respect to the Notes, as of any date of determination,
all Notes theretofore authenticated and delivered under the Indenture except:




     (a) Notes theretofore canceled by the Indenture Trustee or delivered to the Indenture
Trustee for cancellation;




     (b) Notes or portions thereof for whose payment money in the necessary amount has been
theretofore irrevocably deposited with the Indenture Trustee in trust for the holders of
such Notes; and




     (c) Notes in exchange for or in lieu of which other Notes have been authenticated and
delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a Person in whose hands the Note is a valid
obligation; provided; however, that in determining whether the holders of the requisite
percentage of the Outstanding Note Balance of the Notes have given any request, demand,
authorization, direction, notice, consent, or waiver hereunder, Notes owned by the Issuer or
any Affiliate of the Issuer shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent, or waiver, only Notes that
a Responsible Officer of the Indenture Trustee actually has notice are so owned shall be so
disregarded.



     “Outstanding Note Balance” shall mean as of any date of determination and Class of
Notes, the Initial Note Balance of such Class of Notes less the sum of Principal Distribution
Amounts actually distributed to the Holders of such Class of Notes as of such date; provided,
however, to the extent that for purposes of consents, approvals, voting or other similar act of the
Noteholders under any of the Transaction Documents, “Outstanding Note Balance” shall exclude Notes
which are held by Silverleaf or any Affiliate thereof.



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     “Paying Agent” shall mean any Person authorized under the Indenture to make the
distributions required under Sections 3.4 of the Indenture, which such Person initially shall be
the Indenture Trustee.



     “Payment Date” shall mean the 15th day of each month, or, if such date is
not a Business Day, then the next succeeding Business Day, commencing on the Initial Payment Date.



     “Payment Default Event” shall have occurred if (i) each Class of Notes shall become
due and payable pursuant to Section 6.2(a) of the Indenture or (ii) each Class of Notes shall
otherwise become due and payable following an Event of Default under the Indenture and the
Aggregate Loan Balance of the Timeshare Loans is less than the Aggregate Outstanding Note Balance
as a result of a default on one or more of the Timeshare Loans.



     “Percentage Interest” shall mean with respect to the Class A Notes, the Class B Notes,
the Class C Notes and the Class D Notes, 34.5%, 21.0%, 12.0% and 12.5%, respectively.



     “Permitted Liens” shall mean (a) with respect to Timeshare Loans included in the
Collateral, Liens for state, municipal or other local taxes if such taxes shall not at the time be
due and payable, (ii) Liens in favor of the Issuer created pursuant to the Transaction Documents,
and (iii) Liens in favor of the Indenture Trustee created pursuant to the Indenture; (b) with
respect to the related Timeshare Property, materialmen’s, warehousemen’s, mechanic’s and other
Liens arising by operation of law in the ordinary course of business for sums not due, (ii) Liens
for state, municipal or other local taxes if such taxes shall not at the time be due and payable,
(iii) Liens in favor of the Issuer pursuant to the Transfer Agreement and (iv) the Obligor’s
interest in the Timeshare Property under the Timeshare Loan whether pursuant to the Oak N’ Spruce
Trust Agreement or otherwise; and (c) with respect to Timeshare Loans and Related Security included
in the Collateral, any and all rights of the Beneficiaries and the Other Beneficiaries referred to
in the Oak N’ Spruce Trust Agreement under the Oak N’ Spruce Trust Agreement.



     “Person” means an individual, general partnership, limited partnership, limited
liability partnership, corporation, business trust, joint stock company, limited liability company,
trust, unincorporated association, joint venture, Issuer, Governmental Authority, or other entity
of whatever nature.



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



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




	 	(i)	 	the product of (a) such Class’ Percentage Interest and (b) the amount of
principal collected in respect of each Timeshare Loan during the related Due Period
(including, but not limited to, principal in respect of scheduled payments, partial
prepayments, prepayments in full, liquidations, Substitution Shortfall Amounts,
Defaulted Purchase Prices and Repurchase Prices, if any, but excluding principal
received in respect of Timeshare Loans that became Defaulted Timeshare Loans during
prior Due Periods) or, if the Cut-Off Date for a Timeshare Loan shall have




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occurred during the related Due Period, the amount of principal collected in respect
of such Timeshare Loan after such Cut-Off Date, and




	 	(ii)	 	the product of (a) such Class’ Percentage Interest and (b) the aggregate Loan
Balance of all Timeshare Loans which became Defaulted Timeshare Loans during the
related Due Period, less the principal portion, of Default Purchase Prices paid in
respect of Defaulted Timeshare Loans during the related Due Period, and
	 
	 	(iii)	 	any unpaid Principal Distribution Amounts for such Class from prior Payment
Dates.





     “Qualified Substitute Timeshare Loan” shall mean a Timeshare Loan (i) that, when
aggregated with other Qualified Substitute Timeshare Loans being substituted on such Transfer Date,
has a Loan Balance, after application of all payments of principal due and received during or prior
to the month of substitution, not in excess of the Loan Balance of the Timeshare Loan being
substituted on the related Transfer Date, (ii) that complies, as of the related Transfer Date, with
each of the representations and warranties contained in the Transfer Agreement, including that such
Qualified Substitute Timeshare Loan is an Eligible Timeshare Loan, (iii) that shall not cause the
weighted average coupon rate of the Timeshare Loans to be less than 15.0% after such substitution,
(iv) that shall not cause the weighted average months of seasoning on the Timeshare Loans to be
less than 26 months after such substitution, and (v) that does not have a stated maturity greater
than 12 months prior to the Stated Maturity.



     “Rating Agency” shall mean Moody’s.



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



     “RCI” shall mean Resorts Condominium International, Inc.



     “Receivables” means the payments required to be made pursuant to a Timeshare Loan.



     “Record Date” shall mean, with respect to any Payment Date, the close of business on
the last Business Day of the calendar month immediately preceding the month such Payment Date
occurs.



     “Redemption Date” shall mean with respect to the redemption of the Notes on or after
the Optional Redemption Date, the date fixed pursuant to Section 10.1 of the Indenture.



     “Redemption Price” shall mean, with respect to each Class of Notes, the sum of the
Outstanding Note Balance of such Class of Notes, together with interest accrued thereon at the
applicable Note Rate up to and including the Redemption Date.



     “Related Security” shall mean with respect to any Timeshare Loan, (i) all of the
Issuer’s interest in the Timeshare Property arising under or in connection with the related
Mortgage, Financing Agreement, Oak N’ Spruce Certificate and the related Timeshare Loan Files, (ii)
all other security interests or liens and property subject thereto from time to time purporting to



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secure payment of such Timeshare Loan, together with all mortgages, assignments and financing
statements signed by an Obligor describing any collateral securing such Timeshare Loan, (iii) all
guarantees, insurance and other agreements or arrangements of whatever character from time to time
supporting or securing payment of such Timeshare Loan, and (iv) all other security and books,
records and computer tapes relating to the foregoing.




     “Repurchase Price” shall mean with respect to any Timeshare Loan to be purchased by
the Originator pursuant to the Transfer Agreement, an amount equal to the Loan Balance of such
Timeshare Loan as of the date of such purchase or repurchase, together with all accrued and unpaid
interest on such Timeshare Loan at the related Timeshare Loan Rate to, but not including, the due
date in the then current Due Period.



     “Request for Release” shall be a request for release of Timeshare Loan Files in the
form required by the Custodial Agreement.



     “Required Payments” shall mean each of the items described in (i) through (xi) of
Section 3.4 of the Indenture.



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



     “Resort” shall mean any of the following resorts: Holly Lake Resort, The Villages and
Lake O’ The Wood Resorts, Piney Shores Resort, Timber Creek Resort, Fox River Resort, Apple
Mountain Resort, Ozark Mountain Resort, Holiday Hills Resort, Oak N’ Spruce Resort, Silverleaf’s
Seaside Resort and Hill Country Resort.



     “Responsible Officer” shall mean (a) when used with respect to the Indenture Trustee,
any officer assigned to the Corporate Trust Office, including any Managing Director, Vice
President, Assistant Vice President, Secretary, Assistant Secretary, Assistant Treasurer, any trust
officer or any other officer such Person customarily performing functions similar to those
performed by any of the above designated officers, and also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer’s knowledge of and
familiarity with the particular subject; (b) when used with respect to the Servicer, the Chief
Financial Officer, a Vice President, an Assistant Vice President, the Chief Accounting Officer or
the Secretary of the Servicer; and (c) with respect to any other Person, the chairman of the board,
chief financial officer, the president, a vice president, the treasurer, an assistant treasurer,
the secretary, an assistant secretary, the controller, general partner, trustee or the manager of
such Person.



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



     “Schedule of Timeshare Loans” shall mean the list of Timeshare Loans delivered
pursuant to the Transfer Agreement, as amended from time to time to reflect repurchases,
substitutions and Qualified Substitute Timeshare Loans conveyed pursuant to the terms of the
Indenture, which list shall set forth the following information with respect to each Timeshare Loan
as of the related Cut-Off Date, as applicable, in numbered columns:



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	 	1	 	Name of Obligor
	 
	 	2	 	Unit Ref/Loan Number
	 
	 	3	 	Interest Rate Per Annum
	 
	 	4	 	Monthly Payment
	 
	 	5	 	Original Loan Balance
	 
	 	6	 	Original Term
	 
	 	7	 	First Payment Date
	 
	 	8	 	Zip Code
	 
	 	9	 	Unit/Week
	 
	 	10	 	Resort Name





     “Securities Act” shall mean the Securities Act of 1933, as amended.



     “Securitization Custodian” shall have the meaning specified the second “whereas”
clause in the Transfer Agreement.



     “Securitization Indenture” shall have the meaning specified the second “whereas”
clause in the Transfer Agreement.



     “Securitization Indenture Trustee” shall have the meaning specified the second
“whereas” clause in the Transfer Agreement.



     “Securitization Servicer” shall have the meaning specified the second “whereas” clause
in the Transfer Agreement.



     “Seller” shall mean Silverleaf Resorts, Inc. under the Transfer Agreement.



     “Senior Reserve Account” shall mean that certain account maintained by the Indenture
Trustee pursuant to Section 3.2(c) of the Indenture.



     “Senior Reserve Account Cap” shall mean the excess, if any, of (a) the then
Outstanding Note Balance over (b) the amount on deposit in the General Reserve Account.



     “Senior Reserve Accumulation Event” means, (i) the sales growth of the Originator
exceeds 20% in 2005, (ii) the sales growth of the Originator exceeds 50% in 2005 and 2006, on an
aggregate basis, or (iii) if, in 2005 and 2006, the tangible net worth of the Originator is (A)
less than $100 million and the Originator does not retain at least 75% of its retained earnings or
(B) more than $100 million and the Originator does not retain at least 50% of its retained
earnings.



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     “Sequential Pay Event” shall exist on any Determination Date, if the Cumulative
Default Level as of the last day of any month specified below (in each case referring to whole
calendar months elapsed since the Cut-Off Date) exceeds the following parameters:



	 	 	 
	Month	 	Cumulative Default Level %
	0-3
	 	1.01%
	 
	 	 
	4-6
	 	4.14%
	 
	 	 
	7-9
	 	7.36%
	 
	 	 
	10-12
	 	9.55%
	 
	 	 
	13-15
	 	11.34%
	 
	 	 
	16-18
	 	13.39%
	 
	 	 
	19-21
	 	15.40%
	 
	 	 
	22-24
	 	16.59%
	 
	 	 
	25-27
	 	17.56%
	 
	 	 
	28-30
	 	18.47%
	 
	 	 
	31-33
	 	19.58%
	 
	 	 
	34-36
	 	20.27%
	 
	 	 
	37-39
	 	20.75%
	 
	 	 
	40-42
	 	21.13%
	 
	 	 
	43 and thereafter
	 	21.23%






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



     “Servicer Event of Default” shall have the meaning specified in Section 5.4 of the
Indenture.



     “Servicer Termination Costs” shall mean any extraordinary out-of-pocket expenses
incurred by the successor servicer associated with the transfer of servicing.



     “Servicing Fee” shall mean for any Payment Date, the product of (i) one-twelfth of
1.75% and (ii) the Aggregate Loan Balance as of the first day of the related Due Period.



     “Servicing Officer” shall mean those officers of the Servicer involved in, or
responsible for, the administration and servicing of the Timeshare Loans, as identified on the list
of Servicing Officers furnished by the Servicer to the Indenture Trustee and the Noteholders from
time to time.



     “Servicing Standard” shall mean, with respect to the Servicer a servicing standard
which complies with applicable law, the terms of the respective Timeshare Loans and, to the extent



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consistent with the foregoing, in accordance with the customary and usual procedures employed
by it with respect to comparable assets that the servicer services for itself or its Affiliates
(and if Silverleaf is no longer the Servicer, in accordance with the customary standard of prudent
servicers of loans secured by timeshare interests similar to the Timeshare Properties, employed by
it when servicing loans for third parties), but without regard for (i) any relationship that it or
any of its Affiliates may have with the related Obligor, and (ii) its right to receive compensation
for its services hereunder or with respect to any particular transaction.




     “Silverleaf Loans” shall mean the Timeshare Loans conveyed by Silverleaf to the Issuer
pursuant to the Transfer Agreement.



     “Similar Law” shall mean a provision of federal, state or local law that is
substantially similar to the prohibited transaction rules under ERISA or section 4975 of the Code.



     “Stated Maturity” shall mean the Payment Date occurring in November 2016.



     “Subsequent Cut-Off Date” shall mean with respect to any Transfer Date, (i) the close
of business on the last day of the Due Period immediately preceding such Transfer Date or (ii) such
other date designated by the Servicer.



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



     “Tangible Net Worth” shall mean difference between (a) the aggregate amount of all
assets of the Servicer as may be properly classified as such in accordance with generally accepted
accounting principles consistently applied, excluding such other assets as are properly classified
as intangible assets under generally accepted accounting principles, less (b) the aggregate amount
of all liabilities of Servicer.



     “Timeshare Declaration” shall mean the declaration or other document recorded in the
real estate records of the applicable municipality or government office where a Resort is located
for the purpose of creating and governing the rights of owners of Timeshare Properties related
thereto, as it may be in effect from time to time.



     “Timeshare Loan” shall mean a Mortgage Loan, Oak N’ Spruce Loan, or a Qualified
Substitute Timeshare Loan, subject to the lien of the Indenture. As used in the Transaction
Documents, the term “Timeshare Loan” shall include the related Mortgage Note, Mortgage, the Finance
Agreement and other Related Security contained in the related Timeshare Loan Documents.



     “Timeshare Loan Acquisition Price” shall mean with respect to any Timeshare Loan, an
amount equal to the Loan Balance of such Timeshare Loan plus accrued and unpaid interest thereon up
to and including the Initial Cut-Off Date.



     “Timeshare Loan Documents” shall mean with respect to each Timeshare Loan and each
Obligor, the related (i) Timeshare Loan Files, and (ii) Timeshare Loan Servicing Files.



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     “Timeshare Loan File(s)” shall mean, with respect to a Timeshare Loan, the Timeshare
Loan and all documents related to such Timeshare Loan, including:




	 	1.	 	a Contract for Sale (copy), which includes Truth in Lending Disclosure,
	 
	 	2.	 	a Note (original),
	 
	 	3.	 	Allonge (original),
	 
	 	4.	 	for an Oak N’ Spruce Loan — Oak N’ Spruce Resort Certificate of Beneficial
Interest (original),
	 
	 	5.	 	one of the following: (a) for a Mortgage Loan — a Deed of Trust, Deed to Secure
Debt or Mortgage with Property Description Addendum (original or file-stamped or
certified copy), (b) for an Oak N’ Spruce Loan
(pre-July 2004) — a Mortgage and
Assignment of Beneficial Interest with Property Description Addendum (original or
file-stamped or certified copy) or (c) for an Oak N’ Spruce
Loan (post-July 2004) — an
Assignment of Beneficial Interest with Property Description Addendum (not recorded or
acknowledged),
	 
	 	6.	 	any assumption agreement or any refinancing agreement, if any, (copy), and
	 
	 	7.	 	all related finance applications executed and delivered by the related Obligor
with respect to the purchase of a Timeshare Property.





     “Timeshare Loan Rate” shall mean with respect to any Timeshare Loan, the specified
coupon rate thereon.



     “Timeshare Loan Servicing Files” shall mean with respect to each Timeshare Loan and
each Obligor, the portion of the Timeshare Loan Files necessary for the Servicer to service such
Timeshare Loan including but not limited to (i) the original truth-in-lending disclosure statement
executed by such Obligor, as applicable, (ii) all writings pursuant to which such Timeshare Loan
arises or which evidences such Timeshare Loan and not delivered to the Custodian, (iii) all papers
and computerized records customarily maintained by the Servicer in servicing timeshare loans
comparable to the Timeshare Loans in accordance with the Servicing Standard and (iv) each Timeshare
Program Consumer Document and Timeshare Program Governing Document, if applicable, related to the
applicable Timeshare Property.



     “Timeshare Program” shall mean the program under which (1) an Obligor has purchased a
Timeshare Property and (2) an Obligor shares in the expenses associated with the operation and
management of such program.



     “Timeshare Program Consumer Documents” shall mean, as applicable, the Finance
Agreement, Mortgage Note, Mortgage, credit disclosures, rescission right notices, final subdivision
public reports/prospectuses/public offering statements, the Timeshare Project exchange affiliation
agreement and other documents, disclosures and advertising materials used or to be used by an
Originator in connection with the sale of Timeshare Properties.



-20-









 





     “Timeshare Program Governing Documents” shall mean the articles of organization or
articles of incorporation of each Association, the rules and regulations of each Association, the
Timeshare Program management contract between each Association and a management company, and any
subsidy agreement by which the Originator is obligated to subsidize shortfalls in the budget of a
Timeshare Program in lieu of paying assessments, as they may be from time to time in effect and all
amendments, modifications and restatements of any of the foregoing.



     “Timeshare Property” shall mean (i) with respect to a Mortgage Loan, a fractional fee
simple timeshare interest in a Unit in a Resort entitling the related Obligor to the use and
occupancy of a Unit at the Resort for a specified period of time each year or every other year in
perpetuity and (ii) with respect to an Oak N’ Spruce Loan, a certificate of beneficial interest in
the Oak N’ Spruce Resort Trust entitling the related Obligor to the use and occupancy of a
specifically designed Unit at such Resort for a fixed period of time each year in perpetuity.



     “Transaction Documents” shall mean the Indenture, the Transfer Agreement, the Lockbox
Agreement, the Backup Servicing Agreement, the Custodial Agreement, the Note Purchase Agreement and
all other agreements, documents or instruments delivered in connection with the transactions
contemplated thereby.



     “Transfer Agreement” shall mean the transfer agreement, dated as of July 1, 2005,
between Originator and Issuer pursuant to which the Timeshare Loans are transferred to Issuer.



     “Transfer Date” shall mean the date on which the Originator substitutes one or more
Timeshare Loans in accordance with Section 4.4 of the Indenture.



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



     “Treasury Regulations” shall mean the regulations, included proposed or temporary
regulations, promulgated under the Code. References herein to specific provisions of proposed or
temporary regulations shall include analogous provisions of final Treasury Regulations or other
successor Treasury Regulations.



     “Trust Accounts” shall mean collectively, the Lockbox Account, the Collection Account,
the General Reserve Account and the Senior Reserve Account.



     “UCC” shall mean the Uniform Commercial Code as from time to time in affect in the
applicable jurisdiction or jurisdictions.



     “Unit(s)”: One individual air-space residential unit, cabin, villa, cottage or
townhome within a Resort, together with all furniture, fixtures and furnishings therein, and
together with any and all interests in common elements appurtenant thereto, as provided in the
related Timeshare Program Governing Documents.



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




-21-