Document:

exv10w3

 

Ex. 10.3

TRANSFER AGREEMENT

BETWEEN

SILVERLEAF RESORTS, INC.

AND

SILVERLEAF FINANCE III, LLC

DATED AS OF JULY 1, 2005

 

 

TRANSFER AGREEMENT

          This TRANSFER AGREEMENT (this “Agreement”), dated as of July 1, 2005, is between Silverleaf
Resorts, Inc., a Texas corporation (“Originator”) and Silverleaf Finance III, LLC, a Delaware
limited liability company (the “Issuer”), and their respective permitted successors and assigns.

W  I  T N  E  S  S  E  T  H :

          WHEREAS, the Issuer has been established as a bankruptcy-remote entity owned by Originator for
the purpose of acquiring (i) a certain pool of timeshare loans (the “Mortgage Loans”) each
evidenced by a promissory note and secured by a first Mortgage on a fractional fee simple timeshare
interest in a Unit, (ii) a pool of timeshare loans (the “Oak N’ Spruce Loans”), each evidenced by a
purchase and finance agreement (a “Finance Agreement”) for the purchase of a certificate of
beneficial interest in the Oak N’ Spruce Resort Trust evidencing the right of the owner thereof to
use and occupy a fixed unit at Oak n’ Spruce Resort at a fixed period of time (the Mortgage Loans
and Oak N’Spruce Loans, together, the “Timeshare Loans”), (iii) any Qualified Substitute Timeshare
Loans and (iv) all Related Security in respect of the Timeshare Loans and Oak N’ Spruce Loans. A
“Timeshare Property” shall consist of (i) in the case of a Timeshare Loan, a fractional fee simple
timeshare interest in a residential unit (a residential timeshare unit herein referred to as a
“Unit”) in a Resort or (ii) in the case of an Oak N’ Spruce Loan, a certificate of beneficial
interest (“Oak N’ Spruce Certificate”) in the Oak N’ Spruce Resort Trust. The Timeshare Loans,
Timeshare Properties, Mortgage Note, any Related Security and other conveyed property related
thereto and additional collateral, collectively, are the “Transferred Assets.”

          WHEREAS, on July 1, 2005 (the “Closing Date”), the Issuer intends to pledge such Transferred
Assets acquired thereby to Wells Fargo Bank National Association, as indenture trustee (in such
capacity, the “Securitization Indenture Trustee”), custodian (in such capacity, the “Securitization
Custodian”) and backup servicer, pursuant to an indenture, dated as of July 1, 2005 (the
“Securitization Indenture”), by and among the Issuer, Silverleaf Resorts, Inc., in its capacity as
servicer (the “Securitization Servicer”) and the Securitization Indenture Trustee, to secure the
Issuer’s (i) 4.857% Timeshare Loan-Backed Notes, Series 2005-A, Class A Notes, (ii) 5.158%
Timeshare Loan-Backed Notes, Series 2005-A, Class B Notes, (iii) 5.758% Timeshare Loan-Backed
Notes, Series 2005-A, Class C Notes and (iv) 6.756% Timeshare Loan-Backed Notes, Series 2005-A,
Class D Notes (collectively, the “Securitization Notes”);

          WHEREAS, proceeds from the sale of the Securitization Notes will be used by the Issuer, in
part, to (i) pay the Originator the purchase price for the Timeshare Loans and (ii) pay certain
expenses incurred in connection with the issuance of the Securitization Notes.

          WHEREAS, the Originator will derive an economic benefit from the transfer hereunder of the
Timeshare Loans to the Issuer.

          NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and for other
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto covenant and agree as follows:

 

 

          SECTION 1. Definitions; Interpretation. Capitalized terms used herein but not defined
herein shall have the respective meanings specified in “Standard Definitions” attached hereto as
Annex A.

          SECTION 2. Acquisition of Timeshare Loans.

          (a) Timeshare Loans.

(i) Effective as of the Closing Date, but subject to the terms and conditions of
this Agreement (including, without limitation, subsection (e) below),
the Originator hereby sells (“Sale” or “Sold”) or contributes (“Contribute” or
“Contribution”) (in each case to the extent described in subsection (e)
below) and otherwise transfers, assigns, and conveys to the Issuer, without
recourse (except to the extent specifically provided herein), and the Issuer
hereby agrees to purchase or accept a contribution of (in each case to the
extent described in subsection (e) below) and otherwise acquires, all
right, title and interest of the Originator in and to the Timeshare Loans
included on the schedule delivered to the Issuer on the Closing Date (as further
described in subsection (f) below), together with the Timeshare
Properties, Related Security and other conveyed property related thereto. In
connection with the initial transfer, Originator shall transfer, or cause the
deposit, into the Lockbox Account of all amounts received by the Originator on
account of such Timeshare Loans, Timeshare Properties, Related Security and
other conveyed property related thereto and additional collateral hereunder due
on and after the Initial Cut-Off Date within two (2) Business Days of the
receipt thereof.

(ii) The Originator hereby acknowledges that each sale, contribution and
conveyance to the Issuer hereunder is absolute and irrevocable, without
reservation or retention of any interest whatsoever by the Originator.

          (b) Delivery of Timeshare Loan Documents. In connection with the sale, transfer,
contribution, assignment and conveyance of any Timeshare Loans hereunder, the Issuer hereby directs
the Originator and the Originator hereby agrees to deliver or cause to be delivered to the
Securitization Custodian, all related Timeshare Loan Files and to the Securitization Servicer all
related Timeshare Loan Servicing Files.

          (c) Collections. The Originator shall deposit or cause to be deposited all collections
in respect of the Timeshare Loans received by the Originator or any of its Affiliates on and after
the related Cut-Off Date in the Lockbox Account.

          (d) Limitation of Liability. None of the Issuer or any subsequent assignee of the
Issuer shall have any obligation or liability with respect to any Timeshare Loan nor shall the
Issuer or any subsequent assignee have any liability to any Obligor in respect of any Timeshare
Loan. No such obligation or liability is intended to be assumed by the Issuer, the Originator or
any subsequent assignee herewith and any such liability is hereby expressly disclaimed.

          (e) Purchase Price/Capital Contribution. The price paid for Timeshare Loans, Timeshare
Properties, Related Security and other conveyed property related thereto and

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additional collateral which are Sold hereunder shall be the Purchase Price with respect
thereto. Such Purchase Price shall be paid by means of an immediate cash payment to the Originator
by wire transfer on the applicable conveyance date to an account designated by the Originator on or
before such conveyance date or by means of proper accounting entries being entered upon the
accounts and records of the Originator and the Issuer on the applicable conveyance date. To the
extent that the cash amount received for any Timeshare Loans, Timeshare Properties, Related
Security and other conveyed property related thereto and additional collateral Sold by the
Originator to the Issuer hereunder is less than the Purchase Price of such property at the time of
the applicable Sale, the shortfall shall be deemed to have been Contributed by the Originator to
the capital of the Issuer on the applicable conveyance date.

          (f) Schedule of Timeshare Loans. Upon the Originator’s Sale or Contribution of the
Timeshare Loans, Timeshare Properties, Related Security and other conveyed property related thereto
and additional collateral to the Issuer, the Originator shall deliver a schedule of Timeshare
Loans, Timeshare Properties, Related Security and other conveyed property related thereto and
additional collateral, which schedule shall be attached hereto as Schedule III and made a
part hereof. Each schedule so delivered shall supersede any prior schedules so delivered.

          SECTION 3. Intended Characterization, Grant of Security Interest. It is the intention
of the parties hereto that the transfer of Timeshare Loans to be made pursuant to the terms hereof
shall constitute a sale and/or contribution by the Originator to the Issuer and not a loan secured
by the Timeshare Loans. In the event, however, that a court of competent jurisdiction were to hold
that any such transfer constitutes a loan and not a sale and/or contribution, it is the intention
of the parties hereto that the Originator shall be deemed to have granted to the Issuer as of the
date hereof a first priority perfected security interest in all of Originator’s right, title and
interest in, to and under the Transferred Assets specified in Section 2 hereof and that with
respect to such conveyance, this Agreement shall constitute a security agreement under applicable
law. In the event of the characterization of any such transfer as a loan, the amount of interest
payable or paid with respect to such loan under the terms of this Agreement shall be limited to an
amount which shall not exceed the maximum non-usurious rate of interest allowed by the applicable
state law or any applicable law of the United States permitting a higher maximum non-usurious rate
that preempts such applicable state law, which could lawfully be contracted for, charged or
received (the “Highest Lawful Rate”). In the event any payment of interest on any such loan
exceeds the Highest Lawful Rate, the parties hereto stipulate that (a) to the extent possible given
the term of such loan, such excess amount previously paid or to be paid with respect to such loan
be applied to reduce the principal balance of such loan, and the provisions thereof immediately be
deemed reformed and the amounts thereafter collectible thereunder reduced, without the necessity of
the execution of any new document, so as to comply with the then applicable law, but so as to
permit the recovery of the fullest amount otherwise called for thereunder and (b) to the extent
that the reduction of the principal balance of, and the amounts collectible under, such loan and
the reformation of the provisions thereof described in the immediately preceding clause (a) is not
possible given the term of such loan, such excess amount will be deemed to have been paid with
respect to such loan as a result of an error and upon discovery of such error or upon notice
thereof by any party hereto such amount shall be refunded by the recipient thereof.

          The characterization of the Originator as “debtor” and the Issuer as “secured

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party” in any such financing statement required hereunder is solely for protective purposes
and shall in no way be construed as being contrary to the intent of the parties that this
transaction be treated as a sale and/or contribution to the Issuer of such Originator’s entire
right, title and interest in and to the Transferred Assets.

          Each of the Originator, the Issuer and any of their Affiliates hereby agrees to make the
appropriate entries in its general accounting records and to indicate that the Timeshare Loans have
been transferred to the Issuer.

          SECTION 4. Conditions Precedent to Acquisition of Timeshare Loans by the Issuer. The
obligations of the Issuer to purchase any Timeshare Loans hereunder shall be subject to the
satisfaction of the following conditions:

          (a) All representations and warranties of Originator contained in Section 5 and in
Schedule I hereof, and all information provided in the Schedule of Timeshare Loans related
thereto shall be true and correct as of the Closing Date or the Transfer Date, as applicable, and
Originator shall have delivered to the Issuer, the Securitization Indenture Trustee and the UBS
Securities LLC (the “Initial Purchaser”) an officer’s certificate (the “Officer’s Certificate”) to
such effect.

          (b) On or prior to the Closing Date or a Transfer Date, as applicable, the Originator shall
have delivered or shall have caused the delivery of (i) the related Timeshare Loan Files to the
Securitization Custodian and the Securitization Custodian shall have delivered a receipt therefore
pursuant to the Custodial Agreement and (ii) the Timeshare Loan Servicing Files to the
Securitization Servicer.

          (c) The Originator shall have delivered or shall have caused to be delivered all other
information theretofore required or reasonably requested by the Issuer to be delivered by the
Originator or performed or caused to be performed all other obligations required to be performed as
of the Closing Date or Transfer Date, as the case may be, including all filings, recordings and/or
registrations as may be necessary in the reasonable opinion of the Issuer or the Securitization
Indenture Trustee to establish and preserve the right, title and interest of the Issuer or the
Securitization Indenture Trustee, as the case may be, in the related Timeshare Loans.

          (d) On or before the Closing Date, the Issuer, the Securitization Servicer, the Backup
Servicer and the Indenture Trustee shall have entered into the Securitization Indenture.

          (e) The Securitization Notes shall be issued and sold on the Closing Date, and the Issuer
shall receive the full consideration due it upon the issuance of the Securitization Notes, and the
Issuer shall have applied such consideration to the extent necessary, to pay that certain price
(the “Timeshare Loan Acquisition Price”) for each Timeshare Loan, except to the extent that the
Originator has made a Contribution to the Issuer pursuant to Section 2(e).

          (f) Each Timeshare Loan conveyed on a Transfer Date shall satisfy each of the criteria
specified in the definition of (the “Qualified Substitute Timeshare Loan”) and each of the
conditions herein and in the Securitization Indenture for substitution of Timeshare Loans shall
have been satisfied.

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          (g) The Issuer shall have received such other certificates and opinions as it shall reasonably
request.

          SECTION 5. Representations and Warranties and Certain Covenants of Originator.

          (a) Originator represents and warrants to the Issuer and the Securitization Indenture Trustee
for the benefit of the Securitization Noteholders, as of the Closing Date (with respect to the
Timeshare Loans transferred on the Closing Date) and on each Transfer Date (with respect to
Qualified Substitute Timeshare Loans transferred on such Transfer Date) as follows:

          (i) Due Incorporation; Valid Existence; Good Standing. It is a
corporation duly organized and validly existing in good standing under the laws of
the jurisdiction of its incorporation; and is duly qualified to do business as a
foreign corporation and in good standing under the laws of each jurisdiction where
the character of its property, the nature of its business or the performance of its
obligations under this Agreement makes such qualification necessary, except where
the failure to be so qualified will not have a material adverse effect on its
business or its ability to perform its obligations under this Agreement or any other
related documents (the “Transaction Document”) to which it is a party or under the
transactions contemplated hereunder or thereunder or the validity or enforceability
of the Timeshare Loans.

          (ii) Possession of Licenses, Certificates, Franchises and Permits. It
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 Transaction Document to which it is a party or under the transactions
contemplated hereunder or thereunder or the validity or enforceability of 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 Transaction Document to which it is a party or under the
transactions contemplated hereunder or thereunder or the validity or enforceability
of the Timeshare Loans.

          (iii) Corporate Authority and Power. It has, and at all times during
the term of this Agreement will have, all requisite corporate power and authority to
own its properties, to conduct its business, to execute and deliver this Agreement
and all documents and transactions contemplated hereunder and to perform all of its
obligations under this Agreement and any other Transaction Document to which it is a
party or under the transactions contemplated hereunder or thereunder.

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          (iv) Authorization, Execution and Delivery Valid and Binding. This
Agreement and all other Transaction Documents and instruments required or
contemplated hereby to be executed and delivered by Originator have been duly
authorized, executed and delivered by Originator and, assuming the due execution and
delivery by, the other party or parties hereto and thereto, constitute legal, valid
and binding agreements enforceable against Originator in accordance with their
respective terms subject, as to enforceability, to bankruptcy, insolvency,
reorganization, liquidation, dissolution, moratorium and other similar applicable
laws affecting the enforceability of creditors’ rights generally applicable in the
event of the bankruptcy, insolvency, reorganization, liquidation or dissolution, as
applicable, of Originator and to general principles of equity, regardless of whether
such enforceability shall be considered in a proceeding in equity or at law.

          (v) No Violation of Law, Rule, Regulation, etc. The execution, delivery
and performance by Originator of this Agreement and any other Transaction Document
to which it is a party do not and will not (A) violate any of the provisions of its
articles of incorporation or bylaws, (B) violate any provision of any law,
governmental rule or regulation currently in effect applicable to it or its
properties or by which it or its properties may be bound or affected, including,
without limitation, any bulk transfer laws, where such violation would have a
material adverse effect on its ability to perform its obligations under this
Agreement or any other Transaction Document to which it is a party or under the
transactions contemplated hereunder or thereunder or the validity or enforceability
of the Timeshare Loans, (C) violate any judgment, decree, writ, injunction, award,
determination or order currently in effect applicable to it or its properties or by
which it or its properties are bound or affected, where such violation would have a
material adverse effect on its ability to perform its obligations under this
Agreement or any other Transaction Document to which it is a party or under the
transactions contemplated hereunder or thereunder or the validity or enforceability
of the Timeshare Loans, (D) conflict with, or result in a breach of, or constitute a
default under, any of the provisions of any indenture, mortgage, deed of trust,
contract or other instrument to which it is a party or by which it is bound where
such violation would have a material adverse effect on its ability to perform its
obligations under this Agreement or any other Transaction Document to which it is a
party or under the transactions contemplated hereunder or thereunder or the validity
or enforceability of the Timeshare Loans or (E) result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any such indenture,
mortgage, deed of trust, contract or other instrument.

          (vi) Governmental Consent. No consent, approval, order or authorization
of, and no filing with or notice to, any court or other Governmental Authority in
respect of Originator is required which has not been obtained in connection with the
authorization, execution, delivery or performance by Originator of this Agreement or
any of the other Transaction Documents to which Originator is a party or under the
transactions contemplated hereunder or thereunder, including, without limitation,
the transfer of the Timeshare Loans and the creation of the security interest of the
Issuer therein pursuant to Section 3 hereof.

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          (vii) Defaults. It is not in default under any material agreement,
contract, instrument or indenture to which it is a party or by which it or its
properties is or are bound, or with respect to any order of any court,
administrative agency, arbitrator or governmental body, in each case, which would
have a material adverse effect on the transactions contemplated hereunder or on its
business, operations, financial condition or assets, and no event has occurred which
with notice or lapse of time or both would constitute such a default with respect to
any such agreement, contract, instrument or indenture, or with respect to any such
order of any court, administrative agency, arbitrator or governmental body.

          (viii) Insolvency. It is solvent and will not be rendered insolvent by
the transfer of Timeshare Loans hereunder. On and after the Closing Date, it will
not engage in any business or transaction the result of which would cause the
property remaining with it to constitute an unreasonably small amount of capital.

          (ix) Pending Litigation or Other Proceedings. Other than as described
in the Offering Circular, there is no pending or, to its Knowledge, threatened
action, suit, proceeding or investigation before any court, administrative agency,
arbitrator or governmental body against or affecting it which, if decided adversely,
would materially and adversely affect (A) its condition (financial or otherwise),
its business or operations, (B) its ability to perform its obligations under, or the
validity or enforceability of, this Agreement or any other documents or transactions
contemplated under this Agreement including, without limitation, its ability to
foreclose or otherwise enforce the Liens of the Timeshare Loans, or (C) any
Timeshare Loan or title of any Obligor to any related Timeshare Property.

          (x) Information. No document, certificate or report furnished or
required to be furnished by or on behalf of it pursuant to this Agreement, contains
or will contain when furnished any untrue statement of a material fact or fails or
will fail to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances in which it was made.
There are no facts known to it 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 or the Originator’s ability to perform
its respective obligations under this Agreement, which have not been disclosed
herein or therein or in the certificates and other documents furnished to the Issuer
by or on its behalf pursuant hereto or thereto specifically for use in connection
with the transactions contemplated hereby or thereby.

          (xi) Foreign Tax Liability. It 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.

          (xii) No Deficiency Accumulation. It is not aware of any outstanding

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“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.

          (xiii) Taxes. It has filed all tax returns (federal, state and local)
which it reasonably believes are required to be filed and has paid or made adequate
provision for the payment of all taxes, assessments and other governmental charges
due from it or is contesting any such tax, assessment or other governmental charge
in good faith through appropriate proceedings or except where the failure to file or
pay will not have a material adverse effect on the rights and interests of the
Issuer or any of its subsequent assignees. It knows of no basis for any material
additional tax assessment for any fiscal year for which adequate reserves have not
been established. It shall pay all such taxes, assessments and governmental charges
when due.

          (xiv) Place of Business. The principal place of business and chief
executive office where it keeps its records concerning the Timeshare Loans will be
1221 Riverbend Drive, Suite 120, Dallas, Texas 75247 (or such other place specified
by it by written notice to the Issuer and the Securitization Indenture Trustee). It
is a corporation formed under the laws of the State of Texas.

          (xv) Securities Laws. It 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 Timeshare Loan Acquisition Price for
each of the Timeshare Loans will be used by it or the Originator 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.

          (xvi) Oak N’ Spruce Loans. With respect to Timeshare Loans that are
Oak N’ Spruce Loans:

          (A) The Oak N’ Spruce Trust is a trust duly, formed, validly existing,
and in good standing under the laws of the Commonwealth of Massachusetts.
The Oak N’ Spruce Trust is authorized to transact business in no other
state;

          (B) Silverleaf possesses all requisite franchises, operating rights,
licenses, permits, consents, authorizations, exemptions and orders as are
necessary to discharge its obligations under the Finance Agreement;

          (C) Silverleaf holds all right, title and interest in and to all of the
Timeshare Properties related to the Oak N’ Spruce Loans solely for the
benefit of the beneficiaries referred to in, and subject in each case to the
provisions of, the Finance Agreement and the other documents and agreements
related thereto;

          (D) There are no actions, suits, proceedings, orders or injunctions
pending against the Oak N’ Spruce Trust or Oak N’ Spruce Trustee, at law

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or in equity, or before or by any governmental authority which, if
adversely determined, could reasonably be expect to have a material adverse
effect on the Trust Estate or the Oak N’ Spruce Trustee’s ability to perform
its obligations under the Trust Documents;

          (E) Neither the Oak N’ Spruce Trust nor the Oak N’ Spruce Trustee has
incurred any indebtedness for borrowed money (directly, by guarantee, or
otherwise);

          (F) All ad valorem taxes and other taxes and assessments against the
Oak N’ Spruce Trust and/or its trust estate have been paid when due and
neither the Originator nor the Oak N’ Spruce Trustee knows of any basis for
any additional taxes or assessments against any such property. The Oak N’
Spruce Trust has filed all required tax returns and has paid all taxes shown
to be due and payable on such returns, including all taxes in respect of
sales of Owner Beneficiary Rights (as defined in the Finance Agreement);

          (G) The Oak N’ Spruce Trust and the Oak N’ Spruce Trustee are in
compliance with all applicable laws, statutes, rules and governmental
regulations applicable to it and in compliance with each instrument,
agreement or document to which it is a party or by which it is bound,
including, without limitation, the Finance Agreement except where the
failure to comply herein would not materially and adversely affect its
ability to perform its obligations under this Agreement or any other
Transaction Document to which it is a party or under the transactions
contemplated hereunder or thereunder or the validity or enforceability of
the Timeshare Loans;

          (H) The Originator shall continue to control and manage the Oak N’
Spruce Trust, and Originator shall not take any action to cause the Oak N’
Spruce Trustee to control or manage the Oak N’ Spruce Trust;

          (I) The Oak N’ Spruce Trustee is a wholly-owned subsidiary of
Silverleaf and is controlled by Silverleaf. Silverleaf shall cause
Silverleaf Berkshires, Inc. shall remain the Oak N’ Spruce Trustee and a
wholly-owned subsidiary of Silverleaf, and Silverleaf shall maintain the
existence of Silverleaf Berkshires, Inc. as a Texas corporation, with all
the requisite corporate powers and authority as exists on the Closing Date;
and

          (J) Silverleaf shall comply, and shall cause the Oak N’ Spruce Trustee
to comply, with all the terms and conditions of the Oak N’ Spruce Trust
Agreement and all other related documents.

          (xvii) Servicing. It is the initial Servicer and has been servicing
the Timeshare Loans in accordance with the Servicing Standard.

          (xviii) Certified Copy of Contract for Sale. It represents and
warrants that

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each Contract for Sale contained in a Timeshare Loan File is a true, correct
and accurate copy of the original Contract for Sale.

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

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

          (xxi) No Conveyance. Silverleaf agrees not to convey and to ensure no
party under its control conveys any interest in a Resort relating to a Timeshare
Loan without obtaining Rating Agency Confirmation if such conveyance is reasonably
likely to have a material adverse affect on the Noteholders.

          (xxii) Timeshare Loan Documents. Originator represents and warrants
that all of the documents evidencing each of the Timeshare Loans 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 July 26, 2005 pertaining to Georgia law matters, (II) Bulkley, Richardson and
Gelinas, LLP dated as of July 26, 2005 pertaining to Massachusetts law matters,
(III) Stinson Morrison Hecker LLP dated as of July 26, 2005 pertaining to Missouri
law matters, (IV) Mayer, Brown, Rowe & Maw LLP dated as of July 26, 2005 pertaining
to Illinois law matters and (V) Meadows, Owens, Collier, Reed, Cousins & Blau,
L.L.P. dated as of July 26, 2005 pertaining to Texas law matters (collectively, the
“Local Counsel Opinions”).

          (xxiii) Timeshare Marketing Materials and Disclosure Statements.
Originator represents and warrants that it 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.

          (xxiv) Local Counsel Opinions. The facts regarding the Originator, the
Resorts, the Timeshare Loans and related matters set forth or assumed in the Local
Counsel Opinions are true and correct in all material respects.

          (xxv) Bankruptcy Opinion. The facts regarding the Originator, the
Issuer, the Resorts, the Timeshare Loans and related matters set forth or assumed in
the opinion issued by Mayer, Brown, Rowe & Maw LLP dated as of July 26, 2005
pertaining to bankruptcy law matters are true and correct in all material respects.

          (xxvi) Custodial Files. Originator shall, on or prior to the Closing
Date, 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.

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          (xxvii) Escrow Documents. Originator shall, on or prior to the
ninetieth day following the date of the Escrow and Closing Agreement, 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
Originator to the Indenture Trustee on behalf of the Noteholders signed by an
Authorized Officer of the Originator 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, (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 Originator to the Indenture Trustee on behalf of the Noteholders signed
by an Authorized Officer of the Originator 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) Title
Policies (as defined in the Escrow and Closing Agreement) and (IV) all other
recorded and/or filed documents provided under the Escrow and Closing Agreement.

          (xxviii) Prior Secured Parties’ Documents. In accordance with the
Escrow and Closing Agreement, Originator shall deliver or cause the delivery of the
Escrow Documents for each of the respective Prior Secured Parties to the Escrow
Agent.

          (b) Originator hereby makes the representations and warranties relating to the Timeshare Loans
contained in Schedule I hereto for the benefit of the Issuer and its assignees as of the Closing
Date (with respect to each Timeshare Loan transferred on the Closing Date) and as of each Transfer
Date (with respect to each Qualified Substitute Timeshare Loan transferred on such Transfer Date),
as applicable.

          (c) It is understood and agreed that the representations, warranties and covenants set forth
in this Section 5 shall survive the (i) transfer of each Timeshare Loan to the Issuer and (ii) the
subsequent pledge of such Timeshare Loans and rights and remedies hereunder to the Securitization
Indenture Trustee on behalf of the Securitization Noteholders and shall continue so long as any
such Timeshare Loans shall remain outstanding or until such time as such Timeshare Loans are
repurchased, purchased or a Qualified Substitute Timeshare Loan is provided pursuant to Section 6
hereof. The Originator acknowledges that it has been advised that the Issuer intends to pledge,
transfer, assign and convey all of its right, title and interest in and to each Timeshare Loan and
its rights and remedies under this Agreement to the Securitization Indenture Trustee on behalf of
the Securitization Noteholders. The Originator agrees that, upon any such assignment, the
Securitization Indenture Trustee may enforce directly, without joinder of the Issuer (but subject
to any defense that Originator may have under this Agreement) all rights and remedies hereunder.

          (d) With respect to any representations and warranties contained in Section 5

12

 

which are made to Originator’s Knowledge, if it is discovered that any representation and
warranty is inaccurate and such inaccuracy materially and adversely affects the value of a
Timeshare Loan or the interests of the Issuer or any subsequent assignee thereof, then
notwithstanding such lack of Knowledge of the accuracy of such representation and warranty at the
time such representation or warranty was made (without regard to any Knowledge qualifiers), such
inaccuracy shall be deemed a breach of such representation or warranty for purposes of the
repurchase or substitution obligations described in Sections 6(a)(i) or (ii) below.

          SECTION 6. Repurchases and Substitutions.

          (a) Mandatory Repurchases and Substitutions for Breaches of Representations and
Warranties. Upon the receipt of notice by Originator of a breach of any of its respective
representations and warranties (on the date on which such representation or warranty was made) or
covenants in Section 5 which materially and adversely affects the value of a Timeshare Loan or the
interests of the Issuer or any subsequent assignee of the Issuer therein, Originator shall within
60 days of receipt of such notice, cure in all material respects the circumstance or condition
which has caused such representation or warranty to be incorrect or covenant to be breached or
either (i) repurchase the Issuer’s or its assignee’s interest in such related defective Timeshare
Loan (the “Defective Timeshare Loan”) from the Issuer or its assignee at the Repurchase Price or
(ii) provide one or more Qualified Substitute Timeshare Loans and pay the related Substitution
Shortfall Amounts, if any.

          (b) Mandatory Repurchases of Upgraded Timeshare Loans. With respect to Upgraded
Timeshare Loans, on any date, the Originator shall prepay such Upgraded Timeshare loan on behalf of
the related Obligor by depositing the related Repurchase Price in the Collection Account as set
forth in Section 4.4(d) in the Indenture.

          (c) Optional Purchases of Defaulted Timeshare Loans. With respect to any Defaulted
Timeshare Loans, on any date, the Originator 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 Originator, shall purchase Defaulted
Timeshare Loans as provided herein, the Originator shall deposit the related Default Purchase Price
in the Collection Account as set forth in Section 4.4(d) under the Indenture. The Originator, may
irrevocably waive the Originator’s option to purchase a Defaulted Timeshare Loan by delivering or
causing to be delivered to the Indenture Trustee a Waiver Letter in the form of Exhibit G
attached to the Indenture. The holder or holders of Notes representing at least 66-2/3% of the
Adjusted Note Balance may at any time direct the Indenture Trustee, in connection with any
subsequent purchases of Defaulted Timeshare Loans by the Originator, to require the Originator to
conduct a public auction in respect of any such Defaulted Timeshare Loan. The Originator may bid
on any such Defaulted Timeshare Loan during such auction, provided that no such bid may be lower
than fifteen percent (15%) of the original acquisition price paid for the Timeshare Property by the
Obligor under such Defaulted Timeshare Loan. Publication of notice of such auction in a newspaper
published daily in Dallas, Texas, shall be sufficient notice of such auction.

          (d) Payment of Repurchase Prices and Substitution Shortfall Amounts. The Issuer

13

 

hereby directs and Originator hereby agrees to remit or cause to be remitted all amounts in
respect of Repurchase Prices and Substitution Shortfall Amounts payable during the related Due
Period in immediately available funds to the Securitization Indenture Trustee to be deposited in
the Collection Account on the related Transfer Date in accordance with the provisions of the
Indenture. In the event that more than one Timeshare Loan is substituted pursuant to Sections 6(a)
or (b) hereof on any Transfer Date, the Substitution Shortfall Amounts and the Loan Balances of
Qualified Substitute Timeshare Loans shall be calculated on an aggregate basis for all
substitutions made on such Transfer Date.

          (e) Schedule of Timeshare Loans. The Issuer hereby directs and Originator hereby
agrees, on each date on which a Timeshare Loan has been repurchased, purchased or substituted, to
provide the Issuer and the Indenture Trustee with an electronic supplement to Schedule III
hereto and the Schedule of Timeshare Loans reflecting the removal and/or substitution of such
Timeshare Loans and subjecting any Qualified Substitute Timeshare Loans to the provisions of this
Agreement.

          (f) Qualified Substitute Timeshare Loans. On the related Transfer Date, the Issuer
hereby directs and Originator hereby agrees to deliver or to cause the delivery of the Timeshare
Loan Files of the related Qualified Substitute Timeshare Loans to the Securitization Indenture
Trustee or to the Custodian, at the direction of the Securitization Indenture Trustee, on the
related Transfer Date in accordance with the provisions of the Securitization Indenture. As of
such related Transfer Date, Originator does hereby transfer, assign, sell, contribute and grant to
the Issuer, without recourse (except as provided in Section 6 and Section 8 hereof), any and all of
Originator’s right, title and interest in and to (i) each Qualified Substitute Timeshare Loan
conveyed to the Issuer on such Transfer Date, (ii) the Receivables in respect of the Qualified
Substitute Timeshare Loans due after the related Cut-Off Date, (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
Related Security in respect of such Qualified Substitute Timeshare Loans, 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 Loan and all collections
allocable to principal and interest thereon since the related Cut-Off Date and all other property
interests or rights conveyed pursuant to and referenced in this Section 6(f) shall immediately vest
in the Issuer, its successors and assigns. Originator shall not take any action inconsistent with
such ownership nor claim any ownership interest in any Qualified Substitute Timeshare Loan for any
purpose whatsoever other than consolidated financial and federal and state income tax reporting.
Originator agrees that such Qualified Substitute Timeshare Loans shall be subject to the provisions
of this Agreement.

          (g) Officer’s Certificate. Originator shall, on each related Transfer Date, certify in
writing to the Issuer and the Securitization Indenture 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
Securitization Custodian, and (ii) the timeshare Loan Servicing Files for such Qualified Substitute
Timeshare Loads have been delivered to the Securitization Servicer.

          (h) Release. In connection with any repurchase, purchase or substitution of one or

14

 

more Timeshare Loans contemplated by this Section 6, upon satisfaction of the conditions
contained in this Section 6, the Issuer and the Securitization Indenture Trustee shall execute and
deliver or shall cause the execution and delivery of such releases and instruments of transfer or
assignment presented to it by Originator, in each case, without recourse, as shall be necessary to
vest in Originator or its designee (or to evidence the vesting in such Person of) the legal and
beneficial ownership of such released Timeshare Loans. The Issuer shall cause the Securitization
Indenture Trustee to cause the Securitization Custodian to release the related Timeshare Loan Files
to Originator or its designee and the Securitization Servicer to release the related Timeshare Loan
Servicing Files to Originator or its designee.

          (i) Sole Remedy. It is understood and agreed that the obligations of Originator
contained in Section 6(a) to cure a material breach, or to repurchase or substitute related
Defective Timeshare Loans and the obligation of Originator to indemnify pursuant to Section 8 shall
constitute the sole remedies available to the Issuer or its subsequent assignees for the breaches
of any of its representations or warranties contained in Section 5, and such remedies are not
intended to and do not constitute “credit recourse” to Originator.

          SECTION 7. Additional Covenants of the Originator.

          (a) Originator hereby covenants and agrees with the Issuer as follows:

          (i) It 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 Transaction Document to which it
is a party or under the transactions contemplated hereunder or thereunder or the
validity or enforceability of the Timeshare Loans.

          (ii) It 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 Transaction Document to which it is a party or
under the transactions contemplated hereunder or thereunder or the validity of
enforceability of the Timeshare Loans.

          (iii) On or prior to the Closing Date or a Transfer Date, as applicable, it
shall indicate in its and any applicable Affiliate’s computer files and other
records that each Timeshare Loan has been sold to the Issuer.

          (iv) It shall respond to any inquiries with respect to ownership of a Timeshare
Loan by stating that such Timeshare Loan has been sold to the Issuer and that the
Issuer is the owner of such Timeshare Loan.

          (v) On or prior to the Closing Date, it shall file, at its expense, financing
statements in favor of the Issuer and the Securitization Indenture Trustee on behalf
of the Securitization Noteholders, with respect to the Timeshare Loans, in the form
and manner reasonably requested by the Issuer. It shall deliver file-

15

 

stamped copies of such financing statements to the Issuer and the
Securitization Indenture Trustee on behalf of the Securitization Noteholders.

          (vi) It agrees from time to time, at its expense, promptly to execute and
deliver all further instruments and documents, and to take all further actions, that
may be necessary, or that the Issuer or the Securitization Indenture Trustee may
reasonably request, to perfect, protect or more fully evidence the sale or
contribution of the Timeshare Loans, or to enable the Issuer or the Securitization
Indenture Trustee to exercise and enforce its rights and remedies hereunder or under
any Timeshare Loan including, but not limited to, powers of attorney, UCC financing
statements and assignments of mortgage.

          (vii) Any change in the legal name of the Originator 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 Issuer and the Securitization
Indenture Trustee in writing.

          (viii) Upon the discovery or receipt of notice by a Responsible Officer of
Originator of a breach of any of its representations or warranties and covenants
contained herein, Originator shall promptly disclose to the Issuer and the
Securitization Indenture Trustee, in reasonable detail, the nature of such breach.

          (ix) In the event that Originator shall receive any payments in respect of a
Timeshare Loan after the Closing Date or Transfer Date, as applicable (including any
insurance proceeds that are not payable to the related Obligor), it shall, within
two (2) Business Days of receipt, transfer or cause to be transferred, such payments
to the Lockbox Account.

          (x) Originator will keep its principal place of business and chief executive
office and the office where it keeps its records concerning the Timeshare Loans at
the address of Originator listed herein.

          (xi) In the event that the Originator or the Issuer or any assignee of the
Issuer should receive actual notice of any transfer taxes arising out of the
transfer, assignment and conveyance of a Timeshare Loan from the Originator to the
Issuer, on written demand by the Issuer, or upon the Originator otherwise being
given notice thereof, Originator shall pay, and otherwise indemnify and hold the
Issuer, and any subsequent assignee harmless, on an after-tax basis, from and
against any and all such transfer taxes.

          (xii) The Originator authorizes the Issuer and the Securitization Indenture
Trustee to file continuation statements, and amendments thereto, relating to the
Timeshare Loans and all payments made with regard to the related Timeshare Loans
without the signature of the Originator where permitted by law. A photocopy or
other reproduction of this Agreement shall be sufficient as a financing statement
where permitted by law. The Issuer confirms that it is not its present intention to
file a photocopy or other reproduction of this Agreement as a

16

 

financing statement, but reserves the right to do so if, in its good faith
determination, there is at such time no reasonable alternative remaining to it.

          (xiii) The Originator 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 Timeshare Loans, Timeshare Properties, Related Security and
other conveyed property related thereto and additional collateral by the Originator
to the Issuer.

          SECTION 8. Indemnification.

          (a) Originator hereby agrees to indemnify the Issuer, the Securitization Indenture Trustee,
the Securitization Noteholders and the Initial Purchaser (collectively, the “Indemnified Parties”)
against any and all claims, losses, liabilities, (including reasonable legal fees and related
costs) that the Issuer, the Securitization Indenture Trustee, the Securitization Noteholders or the
Initial Purchaser may sustain directly related to any breach of the representations and warranties
and covenants of Originator under Section 5 hereof (the “Indemnified Amounts”) excluding, however
(i) Indemnified Amounts to the extent resulting from the gross negligence or willful misconduct on
the part of such Indemnified Party; (ii) any recourse for any uncollectible Timeshare Loan not
related to a breach of representation or warranty; (iii) recourse to Originator for a related
Defective Timeshare Loan so long as the same is cured, substituted or repurchased pursuant to
Section 6 hereof; or (iv) income or similar taxes by such Indemnified Party arising out of or as a
result of this Agreement or the transfer of the Timeshare Loans. The parties hereto shall (A)
promptly notify the other parties hereto, the Securitization Indenture Trustee if a claim is made
by a third party with respect to this Agreement or the Timeshare Loans, and relating to (1) the
failure by Originator to perform its duties in accordance with the terms of this Agreement or (2) a
breach of Originator’s representations, covenants or warranties contained in this Agreement, (B)
assume (with the consent of the Issuer, the Securitization Indenture Trustee, the Securitization
Noteholders or the Initial Purchaser, as applicable, which consent shall not be unreasonably
withheld) the defense of any such claim and pay all expenses in connection therewith, including
legal counsel fees and (C) promptly pay, discharge and satisfy any judgment, order or decree which
may be entered against it or the Issuer, the Securitization Indenture Trustee, the Securitization
Noteholders or the Initial Purchaser in respect of such claim. If Originator shall have made any
indemnity payment pursuant to this Section 8 and the recipient thereafter collects from another
Person any amount relating to the matters covered by the foregoing indemnity, the recipient shall
promptly repay such amount to Originator.

          (b) The obligations of Originator under this Section 8 to indemnify the Issuer, the
Securitization Indenture Trustee, the Securitization Noteholders and the Initial Purchaser shall
survive the termination of this Agreement and continue until the Notes are paid in full or
otherwise released or discharged.

          SECTION 9. No Proceedings. The Originator hereby agrees that it will not, directly or
indirectly, institute, or cause to be instituted, or join any Person in instituting, against the
Issuer or any Association, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any federal or state bankruptcy or similar

17

 

law so long as there shall not have elapsed one year plus one day since the latest maturing
Securitization Notes issued by the Issuer.

          SECTION 10. Notices, Etc. All notices and other communications provided for hereunder
shall, unless otherwise stated herein, be in writing and mailed or telecommunicated, or delivered
as to each party hereto, at its address set forth below or at such other address as shall be
designated by such party in a written notice to the other parties hereto. All such notices and
communications shall not be effective until received by the party to whom such notice or
communication is addressed.

Issuer

Silverleaf Finance III, LLC

1221 Riverbend Drive, Suite 120

Dallas, Texas 75247

Attention: Harry J. White, Jr., Chief Financial Officer

Telecopier: 214-631-4981

Originator

Silverleaf Resorts, Inc.

1221 Riverbend Drive, Suite 120

Dallas, Texas 75247

Attention: Robert E. Mead, Chief Executive Officer

Telecopier: 214-905-0519

          SECTION 11. No Waiver; Remedies. No failure on the part of the Issuer, the
Securitization Indenture Trustee or any assignee thereof to exercise, and no delay in exercising,
any right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of
any right hereunder preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any other remedies
provided by law.

          SECTION 12. Binding Effect; Assignability. This Agreement shall be binding upon and
inure to the benefit of the Originator, the Issuer and their respective successors and assigns.
Any assignee shall be an express third party beneficiary of this Agreement, entitled to directly
enforce this Agreement. The Originator may not assign any of its rights and obligations hereunder
or any interest herein without the prior written consent of the Issuer and any assignee thereof.
The Issuer may, and intends to, assign all of its rights to the Securitization Indenture Trustee on
behalf of the Securitization Noteholders, and the Originator consents to any such assignments.
This Agreement shall create and constitute the continuing obligations of the parties hereto in
accordance with its terms, and shall remain in full force and effect until its termination;
provided, however, that the rights and remedies with respect to any breach of any representation
and warranty made by Originator pursuant to Section 5, and the cure, repurchase or substitution and
indemnification obligations shall be continuing and shall survive any termination of this
Agreement, but such rights and remedies may be enforced only by the Issuer and the Securitization
Indenture Trustee.

18

 

          SECTION 13. Amendments; Consents and Waivers. No modification, amendment or waiver of,
or with respect to, any provision of this Agreement, and all other agreements, instruments and
documents delivered thereto, nor consent to any departure by the Originator from any of the terms
or conditions thereof shall be effective unless it shall be in writing and signed by each of the
parties hereto, the written consent of the Securitization Indenture Trustee on behalf of the
Securitization Noteholders is given and confirmation from the Rating Agencies that such action will
not result in a downgrade, withdrawal or qualification of any rating assigned to a Class of Notes
is received. The Issuer shall provide or cause to be provided to the Securitization Indenture
Trustee and the Rating Agencies with such proposed modifications, amendments or waivers. Any
waiver or consent shall be effective only in the specific instance and for the purpose for which
given. No consent to or demand by the Originator in any case shall, in itself, entitle it to any
other consent or further notice or demand in similar or other circumstances. The Originator
acknowledges that in connection with the intended assignment by the Issuer of all of its right,
title and interest in and to each Timeshare Loan to the Securitization Indenture Trustee on behalf
of the Securitization Noteholders, the Issuer intends to issue the Notes, the proceeds of which
will be used by the Issuer, in part, to purchase the Timeshare Loans hereunder.

          SECTION 14. Severability. In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such provision or obligation,
shall not in any way be affected or impaired thereby in any other jurisdiction. Without limiting
the generality of the foregoing, in the event that a Governmental Authority determines that the
Issuer may not purchase or acquire Timeshare Loans, the transactions evidenced hereby shall
constitute a loan and not a purchase and sale or contribution, notwithstanding the otherwise
applicable intent of the parties hereto, and the Originator shall be deemed to have granted to the
Issuer as of the date hereof, a first priority perfected security interest in all of the
Originator’s right, title and interest in, to and under such Timeshare Loans and the related
property as described in Section 2 hereof.

          SECTION 15. GOVERNING LAW; CONSENT TO JURISDICTION.

     (A) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.

     (B) THE PARTIES TO THIS AGREEMENT HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF
MANHATTAN IN NEW YORK CITY AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS SET
FORTH ON THE SIGNATURE PAGE HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE DAYS
AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S. MAILS, POSTAGE PREPAID. THE PARTIES HERETO
EACH WAIVES ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION
INSTITUTED HEREUNDER AND CONSENTS

19

 

TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.
NOTHING IN THIS SECTION 15 SHALL AFFECT THE RIGHT OF THE PARTIES TO THIS AGREEMENT TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT THE RIGHT OF ANY OF THEM TO BRING ANY ACTION
OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.

          SECTION 16. Heading. The headings herein are for purposes of reference only and shall
not otherwise affect the meaning or interpretation of any provision hereof.

          SECTION 17. Execution in Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed shall be deemed to be an original
and both of which when taken together shall constitute one and the same agreement.

20

 

          IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective
officers thereunto duty authorized, as of the date first above written.

	 	 	 	 	 
	 	Very truly yours,

SILVERLEAF FINANCE III, LLC, as Issuer

 	 
	 	By:  	/S/ HARRY J. WHITE, JR.
 	 
	 	 	Name:  	Harry J. White, Jr. 	 
	 	 	Title:  	CFO 	 
	 

	 	 	 	 	 
	 	SILVERLEAF RESORTS, INC.

 	 
	 	By:  	/S/ HARRY J. WHITE, JR
 	 
	 	 	Name:  	Harry J. White, Jr. 	 
	 	 	Title:  	CFO 	 
	 

[Signature Page to the Transfer Agreement]

List of Schedules and Exhibits to Agreement not filed herewith:

Schedule I Representations and Warranties relating to Timeshare Loans

Appendix A Standard Definitions

Schedule II Exceptions

Schedule of Timeshare Loans

Exhibit A ACH Form

21exv10w1

 

AMENDMENT NO. 2 TO CREDIT AGREEMENT

     THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT (the “Amendment”) is dated as of July 27, 2005, by
and between SS&C TECHNOLOGIES, INC., a Delaware corporation (the “Borrower”) and BANK OF AMERICA,
N.A., successor by merger to Fleet National Bank, a national banking association organized and
existing under the laws of the United States of America (the “Lender”).

     This Amendment amends that certain Credit Agreement, dated as of April 13, 2005, between the
Borrower and Lender, as amended by Amendment No. 1 to Credit Agreement dated as of May 27, 2005
(the “Credit Agreement”). Capitalized terms used herein without definition are used with the
meanings given them in the Credit Agreement.

     WHEREAS, Borrower has informed Lender that it will enter into certain agreements involving The
Carlyle Group which will result in a “Change of Control” of the Borrower (the “Restructuring
Agreements”).

     WHEREAS, Borrower has requested that Lender consent to its entering into the Restructuring
Agreements and waive any Event of Default that would result from its entering into the
Restructuring Agreements.

     WHEREAS, it is the agreement of Borrower and Lender that simultaneously with, and as a part of
the consummation of the transactions contemplated by the Restructuring Agreements, Borrower will
terminate the Commitment and refinance all Obligations outstanding under the Credit Agreement with
replacement debt financing, which will include Lender (or an affiliate of Lender) as a participant
in all components of the replacement debt financing.

     WHEREAS, Borrower desires to amend the Credit Agreement to extend the date for mandatory
reduction of the Lender’s Commitment to extend Committed Loans to Borrower from $75,000,000 to
$50,000,000 from August 31, 2005, to January 31, 2006.

     WHEREAS, the Lender has agreed to such waiver and consent and such amendment on the terms and
conditions set forth below.

     NOW THEREFORE, in consideration of the foregoing and for good and valuable consideration, the
parties hereby consent and agree as follows:

     1. Amendments. Section 1.01 of the Credit Agreement is hereby amended by deleting
the definition of “Reduction Date” in its entirety and inserting the following in its place:

     “Reduction Date” means January 31, 2006.

     2. Consent and Waiver. Lender hereby consents to Borrower entering into the
Restructuring Agreements and waives any Event of Default that would exist under the Credit
Agreement by reason of Borrower entering into the Restructuring Agreements. In the event the

 

 

transactions contemplated by the Restructuring Agreements are consummated and Borrower does
not simultaneously repay all Obligations owing to Lender and terminate the Commitment, Lender
reserves all rights under the Credit Agreement to declare an Event of Default at such time and
exercise any remedies provided under the Credit Agreement.

     3. Representations and Warranties. All representations, warranties and covenants
contained in, and schedules and exhibits attached to the Credit Agreement are true and correct on
and as of the date hereof, are incorporated herein by reference and are hereby remade.

     4. Expenses. The Borrower shall pay all costs and expenses of Lender, including
reasonable attorneys’ fees incurred in connection with this Amendment.

     5. Binding Effect. This Amendment is binding upon the successors and assigns of the
parties.

     6. Effectiveness. As a condition precedent to the effectiveness of this Agreement,
the Borrower shall deliver to the Lender an original, a telecopy or a .pdf file attachment of this
Amendment executed by the Borrower.

     7. Counterparts. This Agreement may be executed in counterparts (and by different
parties hereto in different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.

     8. No Other Changes. Except as expressly provided in this Amendment, the Credit
Agreement shall remain in full force and effect. This Amendment shall be governed by and construed
and enforced in accordance with the laws of the State of Connecticut (without regard to its
conflict of law rules).

     9. Reaffirmation of Guaranty. By its execution and delivery of this Amendment in the
space provided below, OMR SYSTEMS CORPORATION, a New Jersey corporation, (the “Guarantor”), hereby
acknowledges the amendments to the Credit Agreement set forth in this Amendment and reaffirms its
obligations under that certain Joint and Several Continuing Guaranty Agreement, dated as of April
13, 2005 by Guarantors in favor of Lender.

     10. Additional Guarantor. Borrower agrees to cause FINANCIAL MODELS COMPANY LTD., a
subsidiary of Borrower, to become a Guarantor by executing and delivering to Lender (i) a Joinder
Agreement and (ii) delivering those other items required by Section 4.1(a)(iii) and (iv) of the
Credit Agreement, in each case not later than August 12, 2005.

[THE NEXT PAGE IS THE SIGNATURE PAGE]

2

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and date first
above written.

	 	 	 	 	 	 	 
	 	 	 	 	SS&C TECHNOLOGIES, INC.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ William C. Stone
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: William C. Stone
	 

	 	 	 	 	 	Title: Chairman and CEO
	 
	 	 	 	 	 	 
	 	 	 	 	BANK OF AMERICA, N.A.
	 
	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Timothy B. Curtin
	 

	 	 	 	 	 	 
	 

	 	 	 	 	 	Name: Timothy B. Curtin
	 

	 	 	 	 	 	Title: Senior Vice President
	ACKNOWLEDGED AND AGREED

     (as to Section 9 above)	 	 	 	 
	 
	 	 	 	 	 	 
	OMR SYSTEMS CORPORATION	 	 	 	 
	 
	 	 	 	 	 	 
	By:

	 	/s/ Normand A. Boulanger	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name: Normand A. Boulanger	 	 	 	 
	 

	 	Title: President and COO	 	 	 	 

3

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