Document:

exv10w1

 

Ex. 10.1

SILVERLEAF FINANCE III, LLC,

as Issuer

SILVERLEAF RESORTS, INC.,

as Servicer

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Backup Servicer

and

WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Indenture Trustee, Paying Agent, Custodian and Account Intermediary

INDENTURE

Dated as of July 1, 2005

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I.  DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
	 	 	3	 
	SECTION 1.1. General Definitions
	 	 	3	 
	SECTION 1.2. Compliance Certificates and Opinions
	 	 	3	 
	SECTION 1.3. Form of Documents Delivered to Indenture Trustee
	 	 	3	 
	SECTION 1.4.  Acts of Noteholders, etc
	 	 	4	 
	SECTION 1.5.  Notice to Noteholders, Waiver
	 	 	5	 
	SECTION 1.6. Effect of Headings and Table of Contents
	 	 	6	 
	SECTION 1.7. Successors and Assigns
	 	 	6	 
	SECTION 1.8. GOVERNING LAW
	 	 	6	 
	SECTION 1.9. Legal Holidays
	 	 	6	 
	SECTION 1.10. Execution in Counterparts
	 	 	6	 
	SECTION 1.11. Inspection
	 	 	6	 
	SECTION 1.12. Survival of Representations and Warranties
	 	 	7	 
	ARTICLE II.  THE NOTES
	 	 	7	 
	SECTION 2.1. General Provisions
	 	 	7	 
	SECTION 2.2. Global Notes
	 	 	8	 
	SECTION 2.3. Definitive Notes
	 	 	8	 
	SECTION 2.4. Registration, Transfer and Exchange of Notes
	 	 	9	 
	SECTION 2.5. Mutilated, Destroyed, Lost and Stolen Notes
	 	 	11	 
	SECTION 2.6. Payment of Interest and Principal; Rights Preserved
	 	 	11	 
	SECTION 2.7. Persons Deemed Owners
	 	 	12	 
	SECTION 2.8. Cancellation
	 	 	12	 
	SECTION 2.9. Noteholder Lists
	 	 	12	 
	SECTION 2.10. Treasury Notes
	 	 	12	 
	SECTION 2.11. Notice to Depository
	 	 	13	 
	SECTION 2.12. Confidentiality
	 	 	13	 
	ARTICLE III.  ACCOUNTS; COLLECTION AND APPLICATION
OF MONEYS; REPORTS
	 	 	13	 
	SECTION 3.1. Trust Accounts; Investments by Indenture Trustee
	 	 	13	 
	SECTION 3.2. Establishment and Administration of the Trust Accounts
	 	 	15	 
	SECTION 3.3. Reserved
	 	 	18	 
	SECTION 3.4. Distributions
	 	 	18	 
	SECTION 3.5. Reports to Noteholders
	 	 	20	 
	SECTION 3.6. Note Balance Write-Down Amounts
	 	 	21	 
	SECTION 3.7. Withholding Taxes
	 	 	21	 
	ARTICLE IV.  THE COLLATERAL
	 	 	21	 
	SECTION 4.1. Acceptance by Indenture Trustee
	 	 	21	 
	SECTION 4.2. Grant of Security Interest, Tax Treatment
	 	 	22	 
	SECTION 4.3. Further Action Evidencing Assignments
	 	 	22	 
	SECTION 4.4. Substitution and Repurchase of Timeshare Loans
	 	 	23	 
	SECTION 4.5. Release of Lien
	 	 	25	 
	SECTION 4.6. Appointment of Custodian and Paying Agent
	 	 	25	 

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	SECTION 4.7. Sale of Timeshare Loans
	 	 	26	 
	ARTICLE V.  SERVICING OF TIMESHARE LOANS
	 	 	26	 
	SECTION 5.1. Appointment of Servicer and Backup Servicer; Servicing Standard
	 	 	26	 
	SECTION 5.2. Payments on the Timeshare Loans
	 	 	26	 
	SECTION 5.3. Duties and Responsibilities of the Servicer
	 	 	27	 
	SECTION 5.4. Servicer Events of Default
	 	 	31	 
	SECTION 5.5. Accountings; Statements and Reports
	 	 	34	 
	SECTION 5.6. Records
	 	 	36	 
	SECTION 5.7. Fidelity Bond and Errors and Omissions Insurance
	 	 	36	 
	SECTION 5.8. Merger or Consolidation of the Servicer
	 	 	36	 
	SECTION 5.9. Sub-Servicing
	 	 	37	 
	SECTION 5.10. Servicer Resignation
	 	 	37	 
	SECTION 5.11. Fees and Expenses
	 	 	38	 
	SECTION 5.12. Access to Certain Documentation
	 	 	38	 
	SECTION 5.13. No Offset
	 	 	38	 
	SECTION 5.14. Account Statements
	 	 	38	 
	SECTION 5.15. Indemnification; Third Party Claim
	 	 	38	 
	SECTION 5.16. Backup Servicer
	 	 	39	 
	SECTION 5.17. Reserved
	 	 	40	 
	SECTION 5.18. Recordation
	 	 	40	 
	ARTICLE VI.  EVENTS OF DEFAULT; REMEDIES
	 	 	40	 
	SECTION 6.1. Events of Default
	 	 	40	 
	SECTION 6.2. Acceleration of Maturity; Rescission and Annulment
	 	 	42	 
	SECTION 6.3. Remedies
	 	 	43	 
	SECTION 6.4. Indenture Trustee May File Proofs of Claim
	 	 	44	 
	SECTION 6.5. Indenture Trustee May Enforce Claims Without Possession of Notes
	 	 	45	 
	SECTION 6.6. Application of Money Collected
	 	 	45	 
	SECTION 6.7. Limitation on Suits
	 	 	47	 
	SECTION 6.8. Unconditional Right of Noteholders to Receive Principal and Interest
	 	 	48	 
	SECTION 6.9. Restoration of Rights and Remedies
	 	 	48	 
	SECTION 6.10. Rights and Remedies Cumulative
	 	 	48	 
	SECTION 6.11. Delay or Omission Not Waiver
	 	 	48	 
	SECTION 6.12. Control by Noteholders
	 	 	49	 
	SECTION 6.13. Waiver of Events of Default
	 	 	49	 
	SECTION 6.14. Undertaking for Costs
	 	 	49	 
	SECTION 6.15. Reserved
	 	 	50	 
	SECTION 6.16. Collateral
	 	 	50	 
	SECTION 6.17. Action on Notes
	 	 	51	 
	SECTION 6.18. Performance and Enforcement of Certain Obligations
	 	 	51	 
	ARTICLE VII.  THE INDENTURE TRUSTEE
	 	 	51	 
	SECTION 7.1. Certain Duties
	 	 	51	 
	SECTION 7.2. Notice of Events of Default
	 	 	53	 
	SECTION 7.3. Certain Matters Affecting the Indenture Trustee
	 	 	53	 
	SECTION 7.4. Indenture Trustee Not Liable for Notes or Timeshare Loans
	 	 	54	 
	SECTION 7.5. Indenture Trustee May Own Notes
	 	 	54	 
	SECTION 7.6. Indenture Trustee’s Fees and Expenses
	 	 	55	 

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	SECTION 7.7. Eligibility Requirements for Indenture Trustee
	 	 	55	 
	SECTION 7.8. Resignation or Removal of Indenture Trustee
	 	 	55	 
	SECTION 7.9. Successor Indenture Trustee
	 	 	56	 
	SECTION 7.10. Merger or Consolidation of Indenture Trustee
	 	 	57	 
	SECTION 7.11. Appointment of Co-Indenture Trustee or Separate Indenture Trustee
	 	 	57	 
	SECTION 7.12. Paying Agent and Note Registrar Rights
	 	 	59	 
	SECTION 7.13. Authorization
	 	 	59	 
	SECTION 7.14. Maintenance of Office or Agency
	 	 	59	 
	ARTICLE VIII.  COVENANTS OF THE ISSUER
	 	 	60	 
	SECTION 8.1. Payment of Principal and Interest
	 	 	60	 
	SECTION 8.2. Reserved
	 	 	60	 
	SECTION 8.3. Money for Payments to Noteholders to Be Held in Trust
	 	 	60	 
	SECTION 8.4. Existence; Merger; Consolidation, etc
	 	 	61	 
	SECTION 8.5. Protection of Collateral; Further Assurances
	 	 	62	 
	SECTION 8.6. Additional Covenants
	 	 	64	 
	SECTION 8.7. Taxes
	 	 	65	 
	SECTION 8.8. Restricted Payments
	 	 	65	 
	SECTION 8.9. Treatment of Notes as Debt for Tax Purposes
	 	 	66	 
	SECTION 8.10. Further Instruments and Acts
	 	 	66	 
	SECTION 8.11. Compliance with LLC Agreement
	 	 	66	 
	SECTION 8.12. Separateness Covenants
	 	 	66	 
	ARTICLE IX.  SUPPLEMENTAL INDENTURES
	 	 	67	 
	SECTION 9.1. Supplemental Indentures
	 	 	67	 
	SECTION 9.2. Supplemental Indentures with Consent of Noteholders
	 	 	68	 
	SECTION 9.3. Execution of Supplemental Indentures
	 	 	69	 
	SECTION 9.4. Effect of Supplemental Indentures
	 	 	69	 
	SECTION 9.5. Reference in Notes to Supplemental Indentures
	 	 	69	 
	ARTICLE X.  REDEMPTION OF NOTES
	 	 	70	 
	SECTION 10.1. Optional Redemption; Election to Redeem
	 	 	70	 
	SECTION 10.2. Notice to Indenture Trustee
	 	 	70	 
	SECTION 10.3. Notice of Redemption by the Servicer
	 	 	70	 
	SECTION 10.4. Deposit of Redemption Price
	 	 	70	 
	SECTION 10.5. Notes Payable on Redemption Date
	 	 	70	 
	ARTICLE XI.  SATISFACTION AND DISCHARGE
	 	 	71	 
	SECTION 11.1. Satisfaction and Discharge of Indenture
	 	 	71	 
	SECTION 11.2. Application of Trust Money; Repayment of Money
Held by Paying Agent
	 	 	72	 
	SECTION 11.3. Trust Termination Date
	 	 	72	 
	ARTICLE XII.  REPRESENTATIONS AND WARRANTIES AND COVENANTS 
	 	 	72	 
	SECTION 12.1. Representations and Warranties of the Issuer
	 	 	72	 
	SECTION 12.2. Representations and Warranties of the Servicer
	 	 	74	 
	SECTION 12.3. Representations and Warranties of the Indenture Trustee
	 	 	76	 
	SECTION 12.4. Multiple Roles
	 	 	78	 
	SECTION 12.5. [Reserved]
	 	 	78	 
	SECTION 12.6. [Reserved]
	 	 	78	 
	SECTION 12.7. Representations and Warranties of the Backup Servicer
	 	 	78	 

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	ARTICLE XIII.  MISCELLANEOUS
	 	 	79	 
	SECTION 13.1.   Officer’s Certificate and Opinion of Counsel as to Conditions Precedent
	 	 	79	 
	SECTION 13.2.  Statements Required in Certificate or Opinion
	 	 	80	 
	SECTION 13.3.  Notices
	 	 	80	 
	SECTION 13.4.  No Proceedings
	 	 	82	 

	 	 	 
	Exhibit A

	 	Form of Notes
	 
	 	 
	Exhibit B

	 	Form of Investor Representation Letter
	 
	 	 
	Exhibit C

	 	Reserved
	 
	 	 
	Exhibit D

	 	Form of Monthly Servicer Report
	 
	 	 
	Exhibit E

	 	Servicing Officer’s Certificate
	 
	 	 
	Exhibit F

	 	Reserved
	 
	 	 
	Exhibit G

	 	Form of ROAP Waiver Letter
	 
	 	 
	Exhibit H

	 	List of Silverleaf Executive Management
	 
	 	 
	Annex A

	 	Standard Definitions
	 
	 	 
	Schedule I

	 	Schedule of Timeshare Loans

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INDENTURE

          This INDENTURE, dated as of July 1, 2005 (the “Indenture”), is among SILVERLEAF FINANCE III,
LLC, a limited liability company formed under the laws of the State of Delaware, as issuer (the
“Issuer”), SILVERLEAF RESORTS, INC. (“Silverleaf”), a Texas corporation, in its capacity as
servicer (the “Servicer”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as indenture trustee (the “Indenture Trustee”), paying agent (the “Paying Agent”), as
custodian (the “Custodian”), as backup servicer (the “Backup Servicer”) and as a securities
intermediary with respect to the Trust Accounts (in such capacity, the “Account Intermediary”).

RECITALS OF THE ISSUER

          WHEREAS, the Issuer has duly authorized the execution and delivery of this Indenture to
provide for the issuance of its $46,857,000 4.857% Timeshare Loan-Backed Notes, Series 2005-A,
Class A (the “Class A Notes”), $28,522,000 5.158% Timeshare Loan-Backed Notes, Series 2005-A, Class
B (the “Class B Notes”), $16,299,000 5.758% Timeshare Loan-Backed Notes, Series 2005-A, Class C
(the “Class C Notes”), and $16,977,000 6.756% Timeshare Loan-Backed Notes, Series 2005-A, Class D,
(the “Class D Notes” and together with the Class A Notes, Class B Notes and Class C Notes, the
“Notes”);

          WHEREAS, all things necessary to make the Notes, when executed by the Issuer and authenticated
and delivered by the Indenture Trustee hereunder, the valid recourse obligations of the Issuer, and
to make this Indenture a valid agreement of the Issuer, in accordance with its terms, have been
done; and

          WHEREAS, the Servicer has agreed to service and administer the Timeshare Loans securing the
Notes and the Backup Servicer has agreed to perform certain servicing duties pursuant to the Backup
Servicing Agreement;

          NOW, THEREFORE, THIS INDENTURE WITNESSETH:

          For and in consideration of the premises and the purchase of the Notes by the holders thereof,
it is mutually covenanted and agreed, for the benefit of the Noteholders, as allows:

GRANTING CLAUSE

          To secure the payment of the principal of and interest on the Notes in accordance with their
terms, the payment of all of the sums payable under this Indenture and the performance of the
covenants contained in this Indenture, the Issuer hereby Grants to the Indenture Trustee, for the
benefit of the Noteholders, all of the Issuer’s right, title and interest in and to the following
whether now owned or hereafter acquired and any and all benefits accruing to the Issuer from, (i)
the Timeshare Loans specified on Schedule I hereto, (ii) any Qualified Substitute Timeshare Loans,
(iii) the Receivables in respect of each Timeshare Loan due on and after the related Cut-Off Date,
(iv) 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), (v) all Related Security in respect

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of each Timeshare Loan, (vi) all rights and remedies under the Transfer Agreement, the Lockbox
Agreement, the Backup Servicing Agreement, and the Custodial Agreement, (vii) all amounts in or to
be deposited to the Lockbox Account, the Collection Account, the General Reserve Account and the
Senior Reserve Account, and (viii) proceeds of the foregoing (including, without limitation, all
cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind,
and other forms of obligations and receivables which at any time constitute all or part or are
included in the proceeds of any of the foregoing) (collectively, the “Collateral”). Notwithstanding
the foregoing, the Collateral shall not include (i) any Timeshare Loan released from the lien of
this Indenture in accordance with the terms hereof and any Related Security, Timeshare Loan
Documents, income or proceeds related to such released Timeshare Loan, (ii) any amount distributed
pursuant to Section 3.4 or Section 6.6 hereof or (iii) any Misdirected Deposits.

          Such Grant is made in trust to secure (i) the payment of all amounts due on the Notes in
accordance with their terms, equally and ratably except as otherwise may be provided in this
Indenture, without prejudice, priority, or distinction between any Note of the same Class and any
other Note of the same Class by reason of differences in time of issuance or otherwise, and (ii)
the payment of all other sums payable under the Notes and this Indenture.

          The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder in accordance with
the provisions hereof, and agrees to perform the duties herein required to the best of its ability
and to the end that the interests of the Noteholders may be adequately and effectively protected as
hereinafter provided.

          The Custodian shall hold the Timeshare Loan Files in trust, for the use and benefit of the
Issuer and all present and future Noteholders, and shall retain possession thereof. The Custodian
further agrees and acknowledges that each other item making up the Collateral that is physically
delivered to the Custodian will be held by the Custodian in the State of Minnesota or in any other
location acceptable to the Indenture Trustee and the Servicer.

          The Indenture Trustee further acknowledges that in the event the conveyance of the Timeshare
Loans by Silverleaf to the Issuer pursuant to the Transfer Agreement is determined to constitute a
loan and not a sale as it is intended by all the parties hereto, the Custodian will be holding each
of the Timeshare Loans as bailee of the Issuer; provided, however, that with respect to the
Timeshare Loans, the Custodian should not act at the direction of the Issuer without the prior
written consent of the Indenture Trustee.

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ARTICLE I.

DEFINITIONS AND OTHER PROVISIONS

OF GENERAL APPLICATION

     SECTION 1.1. General Definitions.

          In addition to the terms defined elsewhere in this Indenture, capitalized terms shall have the
meanings given them in the “Standard Definitions” attached hereto as Annex A.

     SECTION 1.2. Compliance Certificates and Opinions.

          Upon any written application or request (or oral application with prompt written or telecopied
confirmation) by the Issuer to the Indenture Trustee to take any action under any provision of this
Indenture, other than any request that (a) the Indenture Trustee authenticate the Notes specified
in such request, (b) the Indenture Trustee invest moneys in any of the Trust Accounts pursuant to
the written directions specified in such request or (c) the Indenture Trustee pay moneys due and
payable to the Issuer hereunder to the Issuer’s assignee specified in such request, the Indenture
Trustee shall require the Issuer to furnish to the Indenture Trustee an Officer’s Certificate
stating that all conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and that the request otherwise is in accordance with the
terms of this Indenture, and an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with, except that, in the case of any such
requested action as to which other evidence of satisfaction of the conditions precedent thereto is
specifically required by any provision of this Indenture, no additional certificate or opinion need
be furnished.

     SECTION 1.3. Form of Documents Delivered to Indenture Trustee.

          In any case where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified by, or covered by
the opinion of, only one such Person, or that they be so certified or covered by only one such
document, but one such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify or give opinion as
to such matters in one or several documents.

          Any certificate or opinion of an officer of the Issuer delivered to the Indenture Trustee may
be based, insofar as it relates to legal matters, upon an Opinion of Counsel, unless such officer
knows that the opinion with respect to the matters upon which his/her certificate or opinion is
based are erroneous. Any such officer’s certificate or opinion and any Opinion of Counsel may be
based, insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Issuer as to such factual matters unless such
officer or counsel knows that the certificate or opinion or representations with respect to such
matters is erroneous. Any Opinion of Counsel may be based on the written opinion of other
counsel, in which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel’s opinion and shall include a statement to the effect that such other counsel believes that

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such counsel and the Indenture Trustee may reasonably rely upon the opinion of such other
counsel.

          Where any Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this Indenture, they may,
but need not, be consolidated and form one instrument.

          Wherever in this Indenture, in connection with any application or certificate or report to the
Indenture Trustee, it is provided that the Issuer shall deliver any document as a condition of the
granting of such application, or as evidence of compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or at the effective
date of such certificate or report (as the case may be), of the facts and opinions stated in such
document shall in such case be conditions precedent to the right of the Issuer to have such
application granted or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy
of any statement or opinion contained in any such document as provided in Section 7.1(b) hereof.

          Whenever in this Indenture it is provided that the absence of the occurrence and continuation
of a Default, Event of Default or Servicer Event of Default is a condition precedent to the taking
of any action by the Indenture Trustee at the request or direction of the Issuer, then,
notwithstanding that the satisfaction of such condition is a condition precedent to the Issuer’s
right to make such request or direction, the Indenture Trustee shall be protected in acting in
accordance with such request or direction if it does not have knowledge of the occurrence and
continuation of such event. For all purposes of this Indenture, the Indenture Trustee shall not be
deemed to have knowledge of any Default, Event of Default or Servicer Event of Default nor shall
the Indenture Trustee have any duty to monitor or investigate to determine whether a default has
occurred (other than an Event of Default of the kind described in Section 6.1(a) hereof) or
Servicer Event of Default has occurred unless a Responsible Officer of the Indenture Trustee shall
have actual knowledge thereof or shall have been notified in writing thereof by the Issuer, the
Servicer or any secured party.

     SECTION 1.4. Acts of Noteholders, etc.

          (a) Any request, demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such Noteholders in person or by
agents duly appointed in writing; and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the Indenture Trustee
and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the
Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of
a writing appointing any such agent shall be sufficient for any purpose of this Indenture and
(subject to Section 7.1 hereof) conclusive in favor of the Indenture Trustee and the Issuer, if
made in the manner provided in this Section 1.4.

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          (b) The fact and date of the execution by any Person of any such instrument or writing may be
proved by the affidavit of a witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Where such execution
is by a signer acting in a capacity other than his individual capacity, such certificate or
affidavit shall also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner which the Indenture Trustee deems sufficient.

          (c) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the
holder of any Note shall bind every future holder of the same Note and the holder of every Note
issued upon the registration of transfer thereof or in exchange therefore or in lieu thereof in
respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in
reliance thereon, whether or not notation of such action is made upon such Note.

          (d) By accepting the Notes issued pursuant to this Indenture, each Noteholder irrevocably
appoints the Indenture Trustee hereunder as the special attorney-in-fact for such Noteholder vested
with full power on behalf of such Noteholder to effect and enforce the rights of such Noteholder
for the benefit of such Noteholder; provided that nothing contained in this Section 1.4(d) shall be
deemed to confer upon the Indenture Trustee any duty or power to vote on behalf of the Noteholders
with respect to any matter on which the Noteholders have a right to vote pursuant to the terms of
this Indenture.

     SECTION 1.5. Notice to Noteholders, Waiver.

          (a) Where this Indenture provides for notice to Noteholders of any event, or the mailing of
any report to Noteholders, such notice or report shall be sufficiently given (unless otherwise
herein expressly provided) if in writing and mailed, via first class mail, or sent by private
courier or confirmed telecopy to each Noteholder affected by such event or to whom such report is
required to be mailed, at its address as it appears in the Note Register, not later than the
interest date, and not earlier than the earliest date, prescribed for the giving of such notice or
the mailing of such report. In any case where a notice or report to Noteholders is mailed, neither
the failure to mail such notice or report, nor any defect in any notice or report so mailed, to any
particular Noteholder shall affect the sufficiency of such notice or report with respect to other
Noteholders. Where this Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after the event, and such
waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed
with the Indenture Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.

          (b) In case by reason of the suspension of regular mail service or by reason of other cause it
shall be impracticable to mail or send notice to Noteholders, in accordance with Section 1.5(a)
hereof, of any event or any report to Noteholders when such notice or report required to be
delivered pursuant to any provision of this Indenture, then such notification or

5

 

delivery as shall be made with the approval of the Indenture Trustee shall constitute a
sufficient notification for every purpose hereunder.

     SECTION 1.6. Effect of Headings and Table of Contents.

          The Article and Section headings herein and in the Table of Contents are for convenience only
and shall not affect the construction hereof.

     SECTION 1.7. Successors and Assigns.

          All covenants and agreements in this Indenture by each of the parties hereto shall bind its
respective successors and permitted assigns, whether so expressed or not.

     SECTION 1.8. GOVERNING LAW.

          THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK. UNLESS MADE APPLICABLE IN A SUPPLEMENT HERETO, THIS
INDENTURE IS NOT SUBJECT TO THE TRUST INDENTURE ACT OF 1939 AND SHALL NOT BE GOVERNED THEREBY AND
CONSTRUED IN ACCORDANCE THEREWITH.

     SECTION 1.9. Legal Holidays.

          In any case where any Payment Date or the Stated Maturity or any other date of which principal
of or interest on any Note is proposed to be paid shall not be a Business Day then (notwithstanding
any other provision of this Indenture or of the Notes) such payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and effect as if made on
such Payment Date, Stated Maturity or other date on which principal of or interest on any Note is
proposed to be paid; provided that, no penalty interest shall accrue for the period
from and after such Payment Date, Stated Maturity, or any other date on which principal of or
interest on any Note is proposed to be paid, as the case may be, until such next succeeding
Business Day.

     SECTION 1.10. Execution in Counterparts.

          This Indenture may be executed in any number of counterparts, each of which such executed
shall be deemed to be an original, but all such counterparts shall together constitute but one and
the same instrument.

     SECTION 1.11. Inspection.

          The Issuer agrees that, on ten Business Days’ prior notice (or, one Business Day prior notice
after the occurrence and during the continuation of an Event of Default or a Service-Event of
Default), it will permit the representatives of the Indenture Trustee or any Noteholder during the
Issuer’s normal business hours, to examine all of the books of account, records,

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reports and other papers of the Issuer, to make copies thereof and extracts therefrom, and to
discuss its affairs, finances and accounts with its designated officers, employees and independent
accountants in the presence of such designated officers and employees (and by this provision the
Issuer hereby authorizes its independent accountants to discuss with such representatives such
affairs, finances and accounts), all at such reasonable times and as often as may be reasonably
requested for the purpose of reviewing or evaluating the financial condition or affairs of the
Issuer or the performance of and compliance with the covenants and undertakings of the Issuer and
the Servicer in this Indenture or any of the other documents referred to herein or therein. Any
reasonable expense incident to the exercise by the Indenture Trustee at any time or any Noteholder
during the continuance of any Default or Event of Default, of any right under this Section 1.11
shall be borne by the Issuer. Nothing contained herein shall be construed as a duty of the
Indenture Trustee to perform such inspection.

     SECTION 1.12. Survival of Representations and Warranties.

          The representations, warranties and certifications of the Issuer made in this Indenture or in
any certificate or other writing delivered by the Issuer pursuant hereto shall survive the
authentication and delivery of the Notes hereunder.

ARTICLE II.

THE NOTES

     SECTION 2.1. General Provisions.

          (a) Form of Notes. The Notes shall be designated as the “Silverleaf, Timeshare
Loan-Backed Notes, Series 2005-A”. The Notes, together with their certificates of authentication,
shall be in substantially the form set forth in Exhibit A attached hereto, with such
appropriate insertions, omissions, substitutions and other variations as required or are permitted
by this Indenture, and may have such letters, numbers or other marks of identification and such
legends or endorsements placed thereon, as may consistently herewith, be determined by the officer
executing such Notes, as evidenced by such officer’s execution of such Notes.

          (b) Denominations. The Outstanding Note Balance of the Class A Notes, the Class B
Notes, the Class C Notes and the Class D Notes which may be authenticated and delivered under this
Indenture is limited to $46,857,000, $28,522,000, $16,299,000 and $16,977,000, respectively. The
Notes shall be issuable only as registered Notes, without interest coupons, in the denominations
of at least $50,000 and in integral multiples of $1,000; provided, however, that
the foregoing shall not restrict or prevent the transfer in accordance with Section 2.4 hereof of
any Note with a remaining Outstanding Note Balance of less than $50,000.

          (c) Execution, Authentication, Delivery and Dating. The Notes shall be manually
executed by an Authorized Officer of the Issuer. Any Note bearing the signature of an individual
who was at the time of execution thereof an authorized Officer of the Issuer shall bind the Issuer,
notwithstanding that such individual ceases to hold such office prior to the authentication and
delivery of such Note or did not hold such office at the date of such Note. No Note shall be
entitled to any benefit under this Indenture or be valid or obligatory for any

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purpose unless there appears on such Note a certificate of authentication substantially in the
form set forth in Exhibit A hereto, executed by the Indenture Trustee by manual signature,
and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such
Note has been duly authenticated and delivered hereunder. Each Note shall be dated the date of its
authentication. The Notes may from time to time be executed by the Issuer and delivered to the
Indenture Trustee for authentication together with an Issuer Order to the Indenture Trustee
directing the authentication and delivery of such Notes and thereupon the same shall be
authenticated and delivered by the Indenture Trustee in accordance with such Issuer Order.

     SECTION 2.2. Global Notes.

          Each of the Notes, upon original issuance, shall be issued in the form of one or more
book-entry global certificates (the “Global Notes” and each, a “Global Note”) to be deposited with
the Indenture Trustee as custodian for The Depository Trust Company, the initial Depository, by or
on behalf of the Issuer. All Global Notes shall be initially registered on the Note Register in the
name of Cede & Co., the nominee of DTC and no Note Owner will receive a definitive note (a
“Definitive Note”) representing such Note Owner’s interest in the related Class of Notes, except as
provided in Section 2.3 hereof. Unless and until Definitive Notes have been issued in respect of a
Class of Notes pursuant to Section 2.3:

          (a) the provisions of this Section 2.2 shall be in full force and effect with respect to such
Class of Notes;

          (b) the Issuer, the Servicer and the Indenture Trustee may deal with the Depository and the
Depository Participants for all purposes with respect to such Notes (including the making of
distributions on such Notes) as the authorized representatives of the respective Note Owners;

          (c) to the extent that the provisions of this Section 2.2 conflict with any other provisions
of this Indenture, the provisions of this Section 2.2 shall control; and

          (d) the rights of the respective Note Owners of a Class of Notes shall be exercised only
through the Depository and the Depository Participants and shall be limited to those established by
law and agreements between the respective Note Owners and the Depository and/or the Depository
Participants. Pursuant to the Depository Agreement, unless and until Definitive Notes are issued in
respect of the Notes pursuant to Section 2.3 hereof, the Depository will make book-entry transfers
among the Depository Participants and receive and transmit distributions of principal of, and
interest on, the Notes to the Depository Participants

     SECTION 2.3. Definitive Notes.

          If (a) the Depository advises the Indenture Trustee in writing that the Depository is no
longer willing, qualified or able to properly discharge its responsibilities as Depository with
respect to the Global Notes and the Issuer is unable to locate a qualified successor, (b) the
Issuer, at its sole option, advises the Indenture Trustee in writing that it elects to terminate
the book-entry system with respect to any or all Classes of Notes through the Depository,
or (c) after the occurrence of an Event of Default, Note Owners evidencing not less than 66-2/3% of
the Adjusted Note Balance of such Class of Notes, advise the Indenture Trustee and the Depository

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through the Depository Participants in writing that the continuation of a book-entry system
with respect to such Class of Notes, respectively, through the Depository is no longer in the best
interest of such Note Owners, the Indenture Trustee shall use its best efforts to notify all
affected Note Owners through the Depository of the occurrence of any such event and of the
availability of Definitive Notes to such Note Owners. None of the Issuer, the Indenture Trustee or
the Servicer shall be liable for any delay in delivery of such instructions and may conclusively
rely in, and shall be protected in relying on, such instructions. Upon the issuance of Definitive
Notes, the Issuer, the Indenture Trustee, the Note Registrar and the Servicer shall recognize
Holders of Definitive Notes as Noteholders hereunder. Upon the issuance of Definitive Notes, all
references herein to obligations imposed upon or to be performed by the Depository shall be deemed
to be imposed upon and performed by the Indenture Trustee, to the extent applicable with respect to
such Definitive Notes.

     SECTION 2.4. Registration, Transfer and Exchange of Notes.

          (a) The Issuer shall cause to be kept at the Corporate Trust Office a register (“Note
Register”) for the registration, transfer and exchange of Notes. The Indenture Trustee is hereby
appointed “Note Registrar” for purposes of registering Notes and transfers of Notes as herein
provided. The names and addresses of all Noteholders and the names and addresses of the transferees
of any Notes shall be registered in the Note Register; provided, however, in no
event shall the Note Registrar be required to maintain in the Note Register the names of the
individual participants holding Notes through the Depository. The Person in whose name any Note is
so registered shall be deemed and treated as the sole owner and Noteholder hereof for all purposes
of this Indenture and the Note Registrar, the Issuer, the Indenture Trustee, the Servicer and any
agent of any of them shall not be affected by any notice or knowledge to the contrary. A Definitive
Note is transferable or exchangeable only upon the surrender of such Note to the Note Registrar at
the Corporate Trust Office together with an assignment and transfer (executed by the Holder or his
duly authorized attorney), subject to the applicable requirements of this Section 2.4. Upon request
of the Indenture Trustee, the Note registrar shall provide the Indenture Trustee with the names and
addresses of any Noteholders.

          (b) Upon surrender for registration of transfer of any Definitive Note, subject to the
applicable requirements of this Section 2.4, the Issuer shall execute and the Indenture Trustee
shall duly authenticate in the name of the designated transferee or transferees, one or more new
Notes in denominations of a like aggregate denomination as the Definitive Note being surrendered.
Each Note surrendered for registration of transfer shall be canceled and consequently destroyed by
the Note Registrar. Each new Note issued pursuant to this Section 2.4 shall be registered in the
name of any Person as the transferring Holder may request, subject to the applicable provisions of
this Section 2.4. All Notes issued upon any registration of transfer or exchange of Notes
shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such
registration of transfer or exchange.

          (c) The issuance of the Notes will not be registered or qualified under the Securities Act or
the securities laws of any state. No resale or transfer of any Note may be made unless such resale
or transfer is made in accordance with this Indenture, in minimum denominations of $50,000 and in
integral multiples of $1,000, and only if (1) in the United States to a person whom the transferor
reasonably believes is a “qualified institutional buyer” (as

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defined in Rule 144A) that is purchasing for its own account or for the account of a qualified
institutional buyer in a transaction meeting the requirements of Rule 144A as certified by the
transferee (other than the Initial Purchaser and their respective initial transferees) in a letter
in the form of Exhibit B hereto, (ii) pursuant to an exemption from registration under the
Securities Act provided by Rule 144 (if available) or (iii) pursuant to an effective registration
statement under the Securities Act, in each of cases (i) through (iii) in accordance with any
applicable securities laws of any state of the United States. Each transferee and each subsequent
transferee will be required to notify any subsequent purchaser of such Notes from it of the resale
restrictions described herein. None of the Issuer, the Servicer or the Indenture Trustee is
obligated to register or qualify the Notes under the Securities Act or any other securities law or
to take any action not otherwise required under this Indenture to permit the transfer of any Note
without registration.

          (d) No resale or other transfer of any Note, following its purchase from the Issuer by the
Initial Purchaser may be made to any transferee unless (i) such transferee is not, and will not
acquire such Note on behalf or with the assets of, any Benefit Plan or (ii) no “prohibited
transaction” under ERISA or section 4975 of the Code or Similar Law that is not subject to a
statutory, regulatory or administrative exemption will occur in connection with purchaser’s or such
transferee’s acquisition or holding of such Note. In addition to the applicable provisions of this
Section 2.4 and the rules of the Depository, the exchange, transfer and registration of transfer of
Global Notes shall only be made in accordance with Section 2.4(c) and this Section 2.4(d).

          (e) No fee or service charge shall be imposed by the Note Registrar for its services in
respect of any registration of transfer or exchange referred to in this Section 2.4. The Note
Registrar may require payment by each transferor of a sum sufficient to cover any tax, expense or
other governmental charge payable in connection with any such transfer.

          (f) None of the Issuer, the Indenture Trustee, the Servicer or the Note Registrar is obligated
to register or qualify the Notes under the Securities Act or any other securities law or to take
any action not otherwise required under this Indenture to permit the transfer of such Notes without
registration or qualification. Any such Noteholder desiring to effect such transfer shall, and does
hereby agree to, indemnify the Issuer, the Indenture Trustee, the Servicer and the Note Registrar
against any loss, liability or expense that may result if the transfer is not so exempt or is not
made in accordance with such federal and state laws.

          (g) The Servicer agrees to cause the Issuer, and the Issuer agrees to provide, such
information as required under Rule 144A under the Securities Act so as to allow resales of Notes to
“qualified institutional buyers” (as defined therein) in accordance herewith.

          (h) The Notes represent the sole obligation of the Issuer payable from the Collateral and do
not represent the obligations of the Originator, the Servicer, the Backup Servicer, the Indenture
Trustee or the Custodian.

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     SECTION 2.5. Mutilated, Destroyed, Lost and Stolen Notes.

          (a) If any mutilated Note is surrendered to the Indenture Trustee, the Issuer shall execute
and the Indenture Trustee shall authenticate and deliver in exchange therefore a replacement Note
of like tenor and principal amount and bearing a number not contemporaneously outstanding.

          (b) If there shall be delivered to the Issuer and the Indenture Trustee (i) evidence to their
satisfaction of the destruction, loss or theft of any Note and (ii) such security or indemnity as
may be required by them to save each of them and any agent of either of them harmless then, in the
absence of actual notice to the Issuer or the Indenture Trustee that such Note has been acquired by
a bona fide purchaser, the Issuer shall execute and upon its request the Indenture Trustee shall
authenticate and deliver, in lieu of any such destroyed, lost or stolen Note, a replacement Note of
like tenor and principal amount and bearing a number not contemporaneously outstanding.

          (c) In case the final installment of principal on any such mutilated, destroyed, or stolen
Note has become or will at the next Payment Date become due and payable, the Issuer, in its
discretion, may, instead of issuing a replacement Note, pay such Note.

          (d) Upon the issuance of any replacement Note under this Section 2.5, the Issuer or the
Indenture Trustee may require the payment by the Noteholder of a sum sufficient to cover any Tax or
other governmental charge that may be imposed as a result of the issuance of such replacement Note.

          (e) Every replacement Note issued pursuant to this Section 2.5 in lieu of any destroyed, lost
or stolen Note shall constitute an original additional contractual obligation of the Issuer,
whether or not the destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and proportionately with any and
all other Notes duly issued hereunder.

          (f) The provisions of this Section 2.5 are exclusive and shall preclude (to the extent lawful)
all other rights and remedies with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Notes.

     SECTION 2.6. Payment of Interest and Principal; Rights Preserved.

          (a) Any installment of interest or principal, payable on any Note that is punctually paid or
duly provided for by or on behalf of the Issuer on the applicable Payment Date shall be paid to the
Person in whose name such Note was registered at the close of business on the Record Date for such
Payment Date by check mailed to the address specified in the Note Register, or if a Holder has
provided wire transfer instructions to the Indenture Trustee at least 5 Business Days prior to the
applicable Payment Date, upon the request of a Holder, by wire transfer of federal funds to the
account and number specified in the Note Register, in each case on such Record Date for such Person
(which shall be, as to each original purchaser of the Notes the account and number specified by
such purchaser to the Indenture Trustee in writing, or, if no such account or number is so
specified, then by check mailed to such Person’s address as it appears in the Note Register on such
Record Date).

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          (b) All reductions in the principal amount of a Note effected by payments of principal made on
any Payment Date shall be binding upon all Holders of such Note and of any Note issued upon the
registration of transfer thereof or in exchange therefore or in lieu thereof whether or not such
payment is noted on such Note. All payments on the Notes shall be paid without any requirement of
presentment, but each Holder of any Note shall be deemed to agreed by its acceptance of the same,
to surrender such Note at the Corporate Trust Office within thirty (30) days after receipt of the
final principal payment of such Note.

     SECTION 2.7. Persons Deemed Owners.

          Prior to due presentment of a Note for registration of transfer, the Issuer, the Indenture
Trustee, and any agent of the Issuer or the Indenture Trustee may treat the registered Noteholder
as the owner of such Note for the purpose of receiving payment of principal of and interest on such
Note and for all other purposes whatsoever, whether or not such Note be overdue, and neither the
Issuer, the Indenture Trustee, nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.

     SECTION 2.8. Cancellation.

          All Notes surrendered for registration of transfer or exchange or following final payment
shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture
Trustee and shall be promptly canceled by it. The Issuer may at any time deliver to the Indenture
Trustee for cancellation any Notes previously authenticated and delivered hereunder which the
Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes canceled as provided in this Section 2.8, except as expressly permitted by this
Indenture. All canceled Notes held by the Indenture Trustee may be disposed of in the normal course
of its business or as directed by an Issuer Order.

     SECTION 2.9. Noteholder Lists.

          The Indenture Trustee shall preserve in as current a form as is reasonably practicable the
most recent list available to it of the names and addresses of the Noteholders. In the event the
Indenture Trustee no longer serves as the Note Registrar, the Issuer (or any other obligor upon the
Notes) shall furnish to the Indenture Trustee at least 5 Business Days before each Payment Date
(and in all events in intervals of not more than 6 months) and at such other times as the Indenture
Trustee may request in writing a list in such form and as of such date as the Indenture Trustee may
reasonably require of the names and addresses of the Noteholders.

     SECTION 2.10. Treasury Notes.

          In determining whether the Noteholders of the required Outstanding Note Balance of the Notes
have concurred in any direction, waiver or consent, Notes held or redeemed by the Issuer or any
other obligor in respect of the Notes or held by an Affiliate of the Issuer or such other obligor
shall be considered as though not Outstanding, except that for the purposes of determining whether
the Indenture Trustee shall be protected in relying on any such direction, waiver or consent, only
Notes which a Responsible Officer of the Indenture Trustee knows are so owned shall be so
disregarded.

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     SECTION 2.11. Notice to Depository.

          Whenever notice or other communication to the Holders of Global Notes is acquired under this
Indenture, unless and until Definitive Notes have been issued to the related Note Owners pursuant
to Section 2.3 hereof, the Indenture Trustee shall give all such notices and communications
specified herein to be given to such Note Owners to the Depository.

     SECTION 2.12. Confidentiality.

          Each Noteholder, by acceptance of a Note, agrees and covenants that it shall hold in
confidence all Confidential Information; provided, however, that any Noteholder may
deliver or disclose Confidential Information to (i) its directors, officers, trustees, managers;
employees, agents, attorneys and affiliates (to the extent such disclosure reasonably relates to
the investment represented by the Notes), (ii) its financial advisors and other professional
advisors who agree to hold confidential such information substantially in accordance with the terms
of this Section 2.12, (iii) any other Noteholder, (iv) any institutional investor to which such
Noteholder sells or offers to sell such Note or any part thereof or any participation therein (if
such Person has agreed in writing prior to its receipt of such confidential information to be bound
by the provisions of this Section 2.12), (v) any federal or state regulatory authority having
jurisdiction over such Noteholder, (vi) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agencies that requires access to
information about such Noteholder’s investment portfolio, (vii) the Rating Agency, (viii) to the
extent the information relates to 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 or (ix) any other person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such
Noteholder, (x) in response to any subpoena or other legal process, (y) in connection with any
litigation to which such shareholder is a party or (z) if an Event of Default has occurred and is
continuing, to the extent such Noteholder may reasonably determine such delivery and disclosure to
be necessary or appropriate in the enforcement or for the protection of the rights and remedies
under the Notes and the Transaction Documents.

ARTICLE III.

ACCOUNTS; COLLECTION AND

APPLICATION OF MONEYS; REPORTS

     SECTION 3.1. Trust Accounts; Investments by Indenture Trustee.

          (a) On or before the Closing Date, the Indenture Trustee shall establish in the name of the
Indenture Trustee for the benefit of the Noteholders as provided in this Indenture, the Trust
Accounts, which accounts (other than the Lockbox Account) shall be Eligible Bank Accounts
maintained at the Corporate Trust Office.

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          Subject to the further provisions of this Section 3.1(a), the Indenture Trustee shall, upon
receipt or upon transfer from another account, as the case may be, deposit into such Trust Accounts
all amounts received by it which are required to be deposited therein in accordance with the
provisions of this Indenture. All such amounts and all investments made with such amounts,
including all income and other gain from such investments, shall be held by the Indenture Trustee
in such accounts as part of the Collateral as herein provided, subject to withdrawal by the
Indenture Trustee in accordance with, and for the purposes specified in the provisions of, this
Indenture.

          (b) The Indenture Trustee shall assume that any amount remitted to it in respect of the
Collateral is to be deposited into the Collection Account pursuant to Section 3.2(a) hereof unless
a Responsible Officer of the Indenture Trustee receives written instructions from the Servicer to
the contrary.

          (c) None of the parties hereto shall have any right of “set-off” with respect to any Trust
Account or any investment therein.

          (d) So long as no Event of Default shall have occurred and be continuing, all or a portion of
the amounts in any Trust Account (other than the Lockbox Account) shall be invested and reinvested
by the Indenture Trustee pursuant to an Issuer Order in one or more Eligible Investments. Subject
to the restrictions on the maturity of investments set forth in Section 3.1(f) below, each such
Issuer Order may authorize the Indenture Trustee to make the specific Eligible Investments set
forth therein and to make Eligible Investments from time to time consistent with the general
instructions set forth therein, in each case, in such amounts as such Issuer Order shall specify.

          (e) In the event that either (i) the Issuer shall have failed to give investment directions to
the Indenture Trustee by 9:30 A.M., New York City time on any Business Day on which there may be
uninvested cash or (ii) an Event of Default shall be continuing, the Indenture Trustee shall
promptly invest and reinvest the funds then in the designated Trust Account to the fullest extent
practicable in those obligations or securities described in clause (d) of the definition of
“Eligible Investments”. All investments made by the Indenture Trustee shall mature no later than
the maturity date therefor permitted by Section 3.1(f) below.

          (f) No investment of any amount held in any Trust Account shall mature later than the Business
Day immediately preceding the Payment Date which is scheduled to occur immediately following the
date of investment. All income or other gains (net of losses) from the investment of moneys
deposited in any Trust Account shall be deposited by the Indenture Trustee in such account
immediately upon receipt.

          (g) Subject to Section 3.1(d) above, any investment of any funds in any Trust Account shall be
made under the following terms and conditions:

     (i) each such investment shall be made in the name of the Indenture Trustee, in each
case in such manner as shall be necessary to maintain the identity of such investments part
of the Collateral; and

     (ii) any certificate or other instrument evidencing such investment shall be

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delivered directly to the Indenture Trustee, and the Indenture Trustee shall have sole
possession of such instrument, and all income on such investment.

          (h) The Indenture Trustee shall not in any way be held liable by reason of any insufficiency
in any Trust Account resulting from losses on investments made in accordance with the provisions of
this Section 3.1 including, but not limited to, losses resulting from the sale or depreciation in
the market value of such investments (but the institution serving as Indenture Trustee shall at all
times remain liable for its own obligations, if any, constituting part of such investments). The
Indenture Trustee shall not be liable for any investment or liquidation of an investment made by it
in accordance with this Section 3.1 on the grounds that it could have made a more favorable
investment or a more favorable selection for sale of an investment.

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

     SECTION 3.2. Establishment and Administration of the Trust Accounts.

          (a) Collection Account. The Issuer hereby directs and the Indenture Trustee hereby
agrees to cause to be established and maintained an account (the “Collection Account”) for the
benefit of the Noteholders. The Collection Account shall be an Eligible Bank Account initially
established at the corporate trust department of the Indenture Trustee, bearing the following
designation “Silverleaf Timeshare Loan-Backed Notes,
Series 2005-A — Collection Account, Wells
Fargo Bank National Association, as Indenture Trustee for the benefit of the Noteholders”. The
Indenture Trustee on behalf of the Noteholders shall possess all right, title and interest in all
funds on deposit from time to time in the Collection Account and in all proceeds thereof. The
Collection Account shall be under the sole dominion and control of the Indenture Trustee for the
benefit of the Noteholders as their interests appear in the Collateral. If, at any time, the
Collection Account ceases to be an Eligible Bank Account, the Indenture Trustee shall within two
(2) Business Days establish a new Collection Account which shall be an Eligible Bank Account,
transfer any cash and/or any investments to such new Collection Account, and from the date such new
Collection Account is established, it shall be the “Collection Account”. The Indenture Trustee
agrees to immediately deposit any amounts received by it into the Collection Account. Amounts on
deposit in the Collection Account shall be invested in accordance with Section 3.1 hereof.
Withdrawals and payments from the

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Collection Account will be made on each Payment Date as provided in Section 3.4 or Section 6.6
hereof, as applicable. The Indenture Trustee, at the written direction of the Servicer, shall
withdraw (no more than once per calendar week) from the Collection Account and return to the
Servicer or as directed by the Servicer, any amounts which (1) were mistakenly deposited by the
Lockbox Bank in the Collection Account, including, without limitation, amounts representing
Misdirected Payments and (ii) represent Additional Servicing Compensation. The Indenture Trustee
may conclusively rely on such written direction.

          (b) General Reserve Account. The Issuer hereby directs and the Indenture Trustee
hereby agrees to cause to be established and maintained an account (the “General Reserve Account”)
for the benefit of the Noteholders. On the Closing Date, the Indenture Trustee shall deposit, from
the proceeds from the sale of the Notes, an amount equal to the General Reserve Account Initial
Deposit. The General Reserve Account shall be an Eligible Bank Account initially established at the
corporate trust department of the Indenture Trustee, bearing the following designation “Silverleaf
Timeshare Loan-Backed Notes, Series 2005-A—General Reserve Account, Wells Fargo Bank National
Association, as Indenture Trustee for the benefit of the Noteholders”. The Indenture Trustee on
behalf of the Noteholders shall possess all right, title and interest in all funds on deposit from
time to time in the General Reserve Account and in all proceeds thereof. The General Reserve
Account shall be under the sole dominion and control of the Indenture Trustee for the benefit of
the Noteholders as their interests appear in the Collateral. If, at any time, the General Reserve
Account ceases to be an Eligible Bank Account, the Indenture Trustee shall within two (2) Business
Days establish a new General Reserve Account which shall be an Eligible Bank Account, transfer any
cash and/or any investments to such new General Reserve Account and from the date such new General
Reserve Account is established, it shall be the “General Reserve Account”. Amounts on deposit in
the General Reserve Account shall be invested in accordance with Section 3.1 hereof. Deposits to
the General Reserve Account shall be made in accordance with Section 3.4 hereof. Withdrawals and
payments from the General Reserve Account shall be made in the following manner:

     (i) Withdrawals. Subject to Sections 3.2(b)(ii) and (iii) below, if on any
Payment Date, Available Funds (without giving effect to any deposit from the General Reserve
Account) would be insufficient to pay any portion of the Required Payments on such Payment
Date, the Indenture Trustee shall, based on the Monthly Servicer Report, withdraw from the
General Reserve Account an amount equal to the lesser of such insufficiency and the amount
on deposit in the General Reserve Account and deposit such amount in the Collection Account.

     (ii) Sequential Pay Event or Event of Default. Upon the occurrence of a Sequential Pay
Event, the Indenture Trustee shall withdraw all amounts on deposit in the General Reserve
Account and shall deposit such amounts to the Collection Account for distribution in
accordance with Section 3.4(d) hereof. Upon the occurrence of an Event of Default, the
Indenture Trustee shall withdraw all amounts on deposit in the General Reserve Account and
shall deposit such amounts to the Collection Account for distribution in accordance with
Section 6.6 hereof.

     (iii) Stated Maturity or Payment in Full. On the earlier to occur of the Stated
Maturity and the Payment Date on which the Outstanding Note Balance of all Classes of

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Notes is reduced to zero, the Indenture Trustee shall withdraw all amounts on deposit
in the General Reserve Account and shall deposit such amounts to the Collection Account.

     (iv) Amounts in Excess of General Reserve Account Required Balance. Except if a
Sequential Pay Event or Event of Default shall have occurred and is continuing, on any
Payment Date, if amounts on deposit in the General Reserve Account are greater than the
General Reserve Account Required Balance (after giving effect to all other distributions and
disbursements on such Payment Date), the Indenture Trustee shall, based on the Monthly
Servicer Report, withdraw funds in excess of the General Reserve Account Required Balance
from the General Reserve Account and disburse such amounts to the Issuer.

          (c) Senior Reserve Account. The Issuer hereby directs and the Indenture Trustee hereby
agrees to cause to be established and maintained an account (the “Senior Reserve Account”) for the
benefit of the Noteholders. The Senior Reserve Account shall be an Eligible Bank Account initially
established at the corporate trust department of the Indenture Trustee, bearing the following
designation “Silverleaf Timeshare Loan-Backed Notes,
Series 2005-A — Senior Reserve Account, Wells
Fargo Bank National Association, as Indenture Trustee for the benefit of the Noteholders”. The
Indenture Trustee on behalf of the Noteholders shall possess all right, title and interest in all
funds on deposit from time to time in the Senior Reserve Account and in all proceeds thereof. The
Senior Reserve Account shall be under the sole dominion and control of the Indenture Trustee for
the benefit of the Noteholders as their interests appear in the Collateral. If, at any time, the
Senior Reserve Account ceases to be an Eligible Bank Account, the Indenture Trustee shall within
two (2) Business Days establish a new Senior Reserve Account which shall be an Eligible Bank
Account, transfer any cash and/or any investments to such new Senior Reserve Account and from the
date such new Senior Reserve Account is established, it shall be the “Senior Reserve Account”.
Amounts on deposit in the Senior Reserve Account shall be invested in accordance with Section 3.1
hereof. Deposits to the Senior Reserve Account shall be made in accordance with Section 3.4
hereof. Withdrawals and payments from the Senior Account shall be made in the following manner:

     (i) Withdrawal Upon a Sequential Pay Event or Event of Default. Upon the
occurrence of a Sequential Pay Event, the Indenture Trustee shall withdraw all amounts on
deposit in the Senior Reserve Account and shall deposit such amounts to the Collection
Account for distribution to the Noteholders in accordance with Section 3.4(d) hereof. Upon
the occurrence of an Event of Default, the Indenture Trustee shall withdraw all amounts on
deposit in the Senior Reserve Account and shall deposit such amounts to the Collection
Account for distribution in accordance with Section 6.6 hereof.

     (ii) Stated Maturity or Payment in Full. On the earlier to occur of the Stated
Maturity and the Payment Date on which the Outstanding Note Balance of all Classes of Notes
is reduced to zero, the Indenture Trustee shall withdraw all amounts on deposit in the
Senior Reserve Account and shall deposit such amounts to the Collection Account.

     (iii) Amounts in Excess of Outstanding Note Balance. Except if a Sequential
Pay Event or Event of Default shall have occurred, on any Payment Date, if amounts on
deposit in the Senior Reserve Account are greater than the Senior Reserve Account Cap

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(after giving effect to all other distributions and disbursements
on such Payment Date), the Indenture Trustee shall, based on the Monthly
Servicer Report, withdraw funds in excess of the Senior Reserve Account Cap
from the Senior Reserve Account and disburse such amounts to the Issuer.

     SECTION 3.3. Reserved.

     SECTION 3.4. Distributions.

          (a) So long as no Sequential Pay Event or Default Acceleration Event has occurred, on each
Payment Date, to the extent of Available Funds and based on the Monthly Servicer Report, the
Indenture Trustee shall withdraw funds from the Collection Account to make the following
disbursements and distributions to the following parties, in the following order of priority:

     (i) to the Indenture Trustee, the Indenture Trustee Fee, plus any accrued and unpaid
Indenture Trustee Fees with respect to prior Payment Dates, and any extraordinary
out-of-pocket expenses of the Indenture Trustee (up to $10,000 per Payment Date) incurred
and not reimbursed in connection with its obligations and duties under the Indenture;

     (ii) to the Servicer, the Servicing Fee, plus any accrued and unpaid Servicing Fees
with respect to prior Payment Dates and to the successor servicer, if any, the Servicer
Termination Costs, if any (up to a cumulative total of $100,000);

     (iii) to the Backup Servicer, the Backup Servicing Fee, plus any accrued and unpaid
Backup Servicing Fees with respect to prior Payment Dates;

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

     (v) to the extent not paid by the Servicer, to the Lockbox Bank, the Lockbox Fee, plus
any accrued and unpaid Lockbox Fees with respect to prior Payment Dates;

     (vi) to the Noteholders of each Class, the Interest Distribution Amount for such Class;

     (vii) to the Class A Noteholders, the Class A Principal Distribution Amount;

     (viii) to the Class B Noteholders, the Class B Principal Distribution Amount;

     (ix) to the Class C Noteholders, the Class C Principal Distribution Amount;

     (x) to the Class D Noteholders, the Class D Principal Distribution Amount;

     (xi) to (a) the Class A Noteholders, (b) the Class B Noteholders, (c) the Class C
Noteholders and (d) the Class D Noteholders, in that order, the Deferred Interest Amount for
such Class, if any;

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     (xii) if a Senior Reserve Accumulation Event shall have occurred, to the Senior Reserve
Account, all remaining Available Funds until the amount on deposit in the Senior Reserve
Account shall equal the Senior Reserve Account Cap;

     (xiii) if the amount on deposit in the General Reserve Account is less than the General
Reserve Required Balance, to the General Reserve Account, any remaining Available Funds
until amounts on deposit in the General Reserve Account shall equal the General Reserve
Account Required Balance;

     (xiv) to the Indenture Trustee, any extraordinary out-of-pocket expenses of the
Indenture Trustee not paid in accordance with (i) above; and

     (xv) to the Issuer, any remaining Available Funds.

          (b) Reserved.

          (c) Reserved.

          (d) Upon the occurrence of a Sequential Pay Event or pursuant to Section 6.6(a) after the
occurrence of a Payment Default Event, distributions shall be made in the following order of
priority:

     (i) to the Indenture Trustee, the Indenture Trustee Fee, plus any accrued and unpaid
Indenture Trustee Fees with respect to prior Payment Dates, and any extraordinary
out-of-pocket expenses of the Indenture Trustee (up to $10,000 per Payment Date) incurred
and not reimbursed in connection with its obligations and duties under the Indenture;

     (ii) to the Servicer, the Servicing Fee, plus any accrued and unpaid Servicing Fees
with respect to prior Payment Dates and to the successor servicer, if any, the Servicer
Termination Costs, if any (up to a cumulative total of $100,000);

     (iii) to the Backup Servicer, the Backup Servicing Fee, plus any unpaid Backup
Servicing Fees with respect to prior Payment Dates;

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

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

     (vi) to the Class A Noteholders, the Class A Interest Distribution Amount;

     (vii) to the Class B Noteholders, the Class B Interest Distribution Amount;

     (viii) to the Class C Noteholders, the Class C Interest Distribution Amount;

     (ix) to the Class D Noteholders, the Class D Interest Distribution Amount;

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     (x) to the Class A Noteholders, all remaining amounts until the Outstanding Note
Balance of the Class A Notes is reduced to zero;

     (xi) (ix) to the Class B Noteholders, all remaining amounts until the Outstanding Note
Balance of the Class B Notes is reduced to zero;

     (xii) to the Class C Noteholders, all remaining amounts until the Outstanding Note
Balance of the Class C Notes is reduced to zero;

     (xiii) to the Class D Noteholders, all remaining amounts until the Outstanding Note
Balance of the Class D Notes is reduced to zero;

     (xiv) to (a) the Class A Noteholders, (b) the Class B Noteholders, (c) the Class C
Noteholders and (d) the Class D Noteholders, in that order, the Deferred Interest Amount for
such Class, if any;

     (xv) to the Indenture Trustee, any extraordinary out-of-pocket expenses of the
Indenture Trustee not paid in accordance with (i) above; and

     (xvi) to the Issuer, any remaining Available Funds.

     SECTION 3.5. Reports to Noteholders.

          On each Payment Date, the Indenture Trustee shall make available via the Indenture Trustee’s
internet website the Monthly Servicer Report to the Initial Purchaser, the Noteholders, the Rating
Agency, the Backup Servicer and the Issuer; provided, however, the Indenture
Trustee shall have no obligation to provide such information described in this Section 3.5 until it
has received the requisite information from the Issuer or the Servicer. The Indenture Trustee will
make no representation or warranties as to the accuracy or completeness of such documents and will
assume no responsibility therefore. On or before the fifth day prior to the final Payment Date with
respect to any Class, the Indenture Trustee shall send notice of such Payment Date to each Rating
Agency, the Initial Purchaser and the Noteholders of such Class. Such notice shall include a
statement that if such Notes are paid in full on the final Payment Date, interest shall cease to
accrue as of the day immediately preceding such final Payment Date. In addition, the Indenture
Trustee shall deliver to the Note Owners, all notices, compliance reports and other certificates
delivered by the Servicer or the Issuer pursuant to Sections 4.4, 5.3(g), 5.5, 5.7, 5.8 and 11.1 of
this Indenture. At a Note Owner’s request, the Indenture Trustee agrees to provide such Note Owner
an accounting of balances in the General Reserve Account and the Senior Reserve Account.

          The Indenture Trustee’s internet website shall be initially located at “www.CTSLink.com” or at
another address as shall be specified by the Indenture Trustee from time to time in writing to the
Issuer, the Servicer, the Noteholders and the Rating Agency. For assistance with this service,
Noteholders may call the customer service desk at (301) 815-6600. In connection with providing
access to the Indenture Trustee’s internet website, the Indenture Trustee may require registration
and the acceptance of a disclaimer. The Indenture Trustee shall not be liable for the
dissemination of information in accordance with this Agreement.

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          The Indenture Trustee shall have the right to change the way Monthly Servicer Reports are
distributed in order to make such distribution more convenient and/or more accessible to the above
parties and the Indenture Trustee shall provide timely and adequate notification to all above
parties regarding any such changes.

          Annually (and more often, if required by applicable law), the Indenture Trustee shall
distribute to Noteholders any Form 1099 or similar information returns required by applicable tax
law to be distributed to the Noteholders. The Servicer shall prepare or cause to be prepared all
such information for distribution by the Indenture Trustee to the Noteholders.

     SECTION 3.6. Note Balance Write-Down Amounts.

          The Note Balance Write-Down Amount, if any, on each Payment Date shall be applied to the
Adjusted Note Balance of a Class of Notes immediately following the distribution of Available Funds
in the following order of Priority: first, to the Class D Notes until the Adjusted Note Balance
thereof is reduced to zero; second, to the Class C Notes until the Adjusted Note Balance thereof is
reduced to zero; third, to the Class B Notes until the Adjusted Note Balance thereof is reduced to
zero; and fourth, to the Class A Notes until the Adjusted Note Balance thereof is reduced to zero.
The application of the Note Balance Write-Down Amount to a Class of Notes shall not reduce such
Class’ entitlement to unpaid Principal Distribution Amounts.

     SECTION 3.7. Withholding Taxes.

          The Indenture Trustee, on behalf of the Issuer, shall comply with all requirements of the Code
and applicable Treasury Regulations and applicable state and local law with respect to the
withholding from any distributions made by it to any Noteholder of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting requirements in connection therewith.

ARTICLE IV.

THE COLLATERAL

     SECTION 4.1. Acceptance by Indenture Trustee.

          (a) Concurrently with the execution and delivery of this Indenture, the Indenture Trustee does
hereby acknowledge and accept the conveyance by the Issuer of the assets included in the
Collateral. The Indenture Trustee shall hold the Collateral in trust for the benefit of the
Noteholders, subject to the terms and provisions hereof. In connection with the conveyance of the
Collateral to the Indenture Trustee, the Issuer has delivered or has caused the Originator to
deliver (i) to the Custodian, the Timeshare Loan Files, and (ii) to the Servicer the Timeshare Loan
Servicing Files for each Timeshare Loan conveyed on the Closing Date. On or prior to each Transfer
Date, the Issuer will deliver or cause to be delivered (i) to the Custodian, the Timeshare Loan
Files, and (ii) to the Servicer, the Timeshare Loan Servicing Files, for each Qualified Substitute
Timeshare Loan to be conveyed on such Transfer Date.

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          (b) The Indenture Trustee shall perform its duties under this Section 4.1 for the benefit of
the Noteholders in accordance with the terms of this Indenture and applicable law and, in each
case, taking into account its other obligations hereunder, but without regard to:

     (i) any relationship that the Indenture Trustee or any Affiliate of the Indenture
Trustee may have with an Obligor;

     (ii) the ownership of any Note by the Indenture Trustee or any Affiliate of the
Indenture Trustee;

     (iii) the Indenture Trustee’s right to receive compensation for its service hereunder
or with respect to any particular transaction; or

     (iv) the ownership, or holding in trust for others, by the Indenture Trustee or any
other assets or property.

     SECTION 4.2. Grant of Security Interest, Tax Treatment.

          (a) The conveyance by the Issuer of the Timeshare Loans to the Indenture Trustee shall not
constitute and is not intended to result in an assumption by the Indenture Trustee or any
Noteholder of any obligation of the Issuer or the Servicer to the Obligors, to insurers under any
insurance policies, or any other Person in connection with the Timeshare Loans.

          (b) It is the intention of the parties hereto that, with respect to all taxes, the Notes will
be treated as indebtedness of the Issuer to the Noteholders secured by the Timeshare Loans (the
“Intended Tax Characterization”). The provisions of this Indenture shall be construed in
furtherance of the Intended Tax Characterization. Each of the Issuer, the Servicer, the Indenture
Trustee and the Backup Servicer by entering into this Indenture, and each Noteholder by the
purchase of a Note, agree to report such transactions for purposes of all taxes in a manner
consistent with the Intended Tax Characterization, unless otherwise required by applicable law.

          (c) None of the Issuer, the Servicer or the Backup Servicer shall take any action inconsistent
with the Indenture Trustee’s interest in the Timeshare Loans and shall indicate or shall cause to
be indicated in its books and records held on its behalf that such Timeshare Loan and the other
Timeshare Loans constituting the Collateral have been assigned to the Indenture Trustee on behalf
of the Noteholders.

     SECTION 4.3. Further Action Evidencing Assignments.

          (a) The Issuer and the Indenture Trustee each agrees that, from time to time, it shall
promptly execute and deliver all further instruments and documents, and take all further action,
that may be necessary or appropriate, or that the Holders representing at least 66-2/3% of the
Adjusted Note Balance of each Class of Notes may reasonably request, in order to perfect, protect
or more fully evidence the security interest in the Timeshare Loans or to enable the Indenture
Trustee to exercise or enforce any of its rights hereunder. Without limiting the generality of the
foregoing, the Issuer will, without the necessity of a request and upon the request of the
Indenture Trustee, execute and file or record (or cause to be executed and filed or

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recorded) such Assignments of Mortgage, financing or continuation statements, or amendments
hereto or assignments thereof, and such other instruments or notices, as may be necessary or
appropriate to create and maintain in the Indenture Trustee a first priority perfected security
interest, at all times, in the Collateral, including, without limitation, recording and filing
UCC-1 financing statements, amendments or continuation statements prior to the effective date of
any change of the name, identity or structure or relocation of its chief executive office or any
change which could affect the perfection pursuant to any financing statement or continuation
statement or assignment previously filed or make any UCC-1 or continuation statement previously
filed pursuant to this Indenture seriously misleading within the meaning of applicable provisions
of the UCC (and the Issuer shall give the Indenture Trustee at least thirty (30) Business Days
prior notice of the expected occurrence of any such circumstance). The Issuer shall deliver
promptly to the Indenture Trustee file-stamped copies of any such filings.

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

     SECTION 4.4. Substitution and Repurchase of Timeshare Loans.

          (a) Mandatory Substitution and Repurchase of Timeshare Loans for Breach of Representation
or Warranty. If at any time, any party hereto obtains knowledge, discovers, or is notified by
any other party hereto, that any of the representations and warranties of the Originator in the
Transfer Agreement were incorrect at the time such representations and warranties were made, then
the party discovering such defect, omission, or circumstance shall promptly notify the other
parties to this Indenture, the Rating Agency and the Originator. In the event any such
representation or warranty of the Originator is incorrect and materially and adversely affects the
value of a Timeshare Loan or the interests of the Noteholders therein, then the Issuer and the
Indenture Trustee shall require the Originator, within 60 days after the date it is first notified
of, or otherwise obtains Knowledge of such breach, to eliminate or otherwise cure in all material
respects the circumstance or condition which has caused such representation or warranty to be
incorrect or (1) if the breach relates to a particular Timeshare Loan and is not cured in all
material respects (such Timeshare Loan, a “Defective Timeshare Loan”), either (a) purchase the
Issuer’s interest in such Defective Timeshare Loan at the Repurchase Price or (b) provide one or
more Qualified Substitute Timeshare Loans and pay the Substitution Shortfall Amounts, if any. The
Indenture Trustee is hereby appointed attorney-in-fact, which appointment is coupled with an
interest and is therefore irrevocable, to act on behalf and in the name of the Issuer to enforce
the Originator’s purchase or substitution obligations if the Originator has not complied with its
purchase or substitution obligations under the Transfer Agreement within 30 days after the end of
the aforementioned 60-day period.

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          (b) Prepayment of Upgraded Timeshare Loans. Pursuant to the Transfer Agreement, with
respect to any Upgraded Timeshare Loan, on any date, the Originator shall prepay such Upgraded
Timeshare loan on behalf of the related Obligor by depository the related Repurchase Price in the
Collection Account as set forth in Section 4.4(d) below.

          (c) Optional Purchase of Defaulted Timeshare Loans. Pursuant to the Transfer
Agreement, 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) below. 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 hereto. 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 and
the Indenture Trustee shall direct that the Originator remit or cause to be remitted all amounts in
respect of Repurchase Price, Default Purchase Prices and Substitution Shortfall Amounts payable
during the related Due Period in immediately available funds to the Indenture Trustee on the
Transfer Date for deposit in the Collection Account.

          (e) Schedule of Timeshare Loans. The Issuer and Indenture Trustee shall direct the
Originator to provide or cause to be provided to the Indenture Trustee on any date on which a
Timeshare Loan is purchased, repurchased or substituted with an electronic supplement to the
Schedule of Timeshare Loans reflecting the removal and/or substitution of Timeshare Loans and
subjecting any Qualified Substitute Timeshare Loans to the provisions of the Transaction Documents.

          (f) Officer’s Certificate. No substitution of a Timeshare Loan shall be effective
unless the Issuer and the Indenture Trustee shall have received an Officer’s Certificate of the
Originator indicating that (1) the new Timeshare Loan meets all the criteria of the definition of
“Qualified Substitute Timeshare Loan”, (2) the Timeshare Loan Files for such Qualified Substitute
Timeshare Loan have been delivered to the Custodian, and (3) the Timeshare Loan Servicing Files for
such Qualified Substitute Timeshare Loan have been delivered to the Servicer.

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          (g) Qualified Substitute Timeshare Loans. On the related Transfer Date, the Issuer and
the Indenture Trustee shall direct the Originator to deliver or cause the delivery of the Timeshare
Loan Files of the related Qualified Substitute Timeshare Loans to the Custodian on the related
Transfer Date in accordance with the provisions of this Indenture and the Custodial Agreement.

     SECTION 4.5. Release of Lien.

          (a) The Lien of the Indenture shall be automatically released with respect to any Timeshare
Loan purchased, repurchased or substituted under Section 4.4 hereof, (i) upon satisfaction of each
of the applicable provisions of Section 4.4 hereof, (ii) in the case of any purchase or repurchase,
after a payment by the Originator of the Repurchase Price of the Timeshare Loan, and (iii) in the
case of any substitution, after payment by the Originator of the applicable Substitution Shortfall
Amounts, if any, pursuant to Section 4.4 hereof.

          (b) The Lien of the Indenture shall be automatically released with respect to any Timeshare
Loan which has been paid in full.

          (c) Reserved.

          (d) In connection with (a) and (b) above, the Issuer and Indenture Trustee will execute and
deliver such releases, endorsements and assignments as are provided to it by the Originator or
Silverleaf, in its capacity as the Servicer, as applicable, in each case, without recourse,
representation or warranty, as shall be necessary to vest in the Originator or Silverleaf, in its
capacity as the Servicer, as applicable, or its designee (or to evidence the vesting in such Person
of), the legal and beneficial ownership of each Timeshare Loan released pursuant to this Section
4.5. The Servicer shall deliver a Request for Release to the Custodian with respect to the related
Timeshare Loan Files and Timeshare Loan Servicing Files released pursuant to this Section 4.5, and
such files shall be transferred to the Originator or Silverleaf, in its capacity as the Servicer,
as applicable, or its designee.

     SECTION 4.6. Appointment of Custodian and Paying Agent.

          (a) The Indenture Trustee may appoint a Custodian to hold all or a portion of the Timeshare
Loan Files as agent for the Indenture Trustee. Each Custodian shall be a depository institution
supervised and regulated by a federal or state banking authority, shall have combined capital and
surplus of at least $10,000,000, shall be qualified to do business in the jurisdiction, in which it
holds any Timeshare Loan File and shall not be the Issuer or an Affiliate of the Issuer. The
initial Custodian shall be Wells Fargo Bank, National Association. The Indenture Trustee shall not
be responsible for paying the Custodian Fee or any other amounts owed to the Custodian.

          (b) The Issuer hereby appoints the Indenture Trustee as a Paying Agent. The Issuer may appoint
other Paying Agents from time to time. Any such other Paying Agent shall be appointed by Issuer
Order with written notice thereof to the Indenture Trustee. Any Paying Agent appointed by the
Issuer shall be a Person who would be eligible to be Indenture Trustee hereunder as provided in
Section 7.7 hereof.

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     SECTION 4.7. Sale of Timeshare Loans.

          The parties hereto agree that none of the Timeshare Loans in the Collateral shall be sold or
disposed of in any manner except as expressly provided for herein.

ARTICLE V.

SERVICING OF TIMESHARE LOANS

     SECTION 5.1. Appointment of Servicer and Backup Servicer; Servicing Standard.

          (a) Subject to the terms and conditions herein, the Issuer and the Indenture Trustee hereby
appoint Silverleaf as the initial Servicer hereunder. The Servicer shall service and administer the
Timeshare Loans and perform all of its duties hereunder in accordance with the Servicing Standard.

          (b) Subject to the terms and conditions herein and in the Backup Servicing Agreement, the
Issuer hereby appoints Wells Fargo Bank, National Association to act as the initial Backup Servicer
hereunder. The Backup Servicer shall service and administer the Timeshare Loans and perform all of
its duties hereunder and under the Backup Servicing Agreement in accordance with the Servicing
Standard.

     SECTION 5.2. Payments on the Timeshare Loans.

          (a) The Servicer shall, in a manner consistent with the Servicing Standard, reflect all
payments made under each Timeshare Loan and direct each Obligor to timely make all payments in
respect of his or her Timeshare Loan to the Lockbox Account maintained at the Lockbox Bank.

          (b) On the Closing Date, the Servicer shall cause to be deposited to the Collection Account
all amounts collected and received in respect of the Timeshare Loans after the Initial Cut-Off Date
(without deduction for any Liquidation Expenses).

          (c) Subject to subsection (d) below, on each Monday, Wednesday, Friday (or, if such day is not
a Business Day, then on the next Business Day) and the last Business Day of that related calendar
month, all collections in respect of the Timeshare Loans on deposit in the Lockbox Account will be
remitted to the Collection Account.

          (d) Liquidation Expenses shall be reimbursed to the Servicer in accordance with Section 3.2(a)
hereof. To the extent that the Servicer has received any Liquidation Expenses as Additional
Servicing Compensation and shall subsequently recover any portion of such Liquidation Expenses from
the related Obligor, the Servicer shall deposit such amounts into Collection Account in accordance
with Section 5.3(b) hereof.

          (e) The Servicer agrees that to the extent it receives any amounts in respect of any insurance
policies which are not payable to the Obligor or any other collections relating to the Collateral,
it shall deposit such amounts to the Collection Account within two (2) Business days of receipt
thereof (unless otherwise expressly provided herein).

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     SECTION 5.3. Duties and Responsibilities of the Servicer.

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

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

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

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

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

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

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

     (vii) arranging for Liquidations of Timeshare Properties related to Defaulted Timeshare
Loans and the remarketing of such Timeshare Properties as provided in Section 5.3(b) below;

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

     (ix) refrain from modifying, waiving or amending the terms of any Timeshare Loan;
provided, however, the Servicer may modify, waive or amend a Timeshare Loan for which a
default on such Timeshare Loan has occurred or is imminent and such modification, amendment
or waiver will not (i) materially alter the interest rate on or the principal balance of
such Timeshare Loan, (ii) shorten the final maturity of, lengthen the timing of payments of
either principal or interest, or any other terms of, such Timeshare Loan in any manner which
would have a material adverse affect on the Noteholders, (iii) adversely affect the
Timeshare Property underlying such Timeshare Loan or (iv) reduce materially the likelihood
that payments of interest and principal on such Timeshare Loan shall be made when due;
provided, further, the Servicer may grant a single extension of the final maturity of a
Timeshare Loan if the Servicer, in its reasonable discretion,

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determines that (A) such Timeshare Loan is in default or a default on such Timeshare
Loan is likely to occur in the foreseeable future and (B) the value of such Timeshare Loan
will be enhanced by such extension; provided, further, the Servicer shall not be permitted
to modify, waive or amend the terms of any Timeshare Loan if the sum of the Cut-Off Date
Loan Balance of such Timeshare Loan and the Cut-Off Date Loan Balances of all other
Timeshare Loans for which the Servicer has modified, waived or amended the terms thereof
exceeds 1% of the Cut-Off Date Aggregate Loan Balance.

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

     (xi) to the extent that the Custodian Fees or the Lockbox Fees are, in the Servicer’s
reasonable business judgment, no longer commercially reasonable, use commercially reasonable
efforts to exercise its rights under the Custodial Agreement or the Lockbox Agreement to
replace the Custodian or Lockbox Bank, as applicable. Any such successor shall be reasonably
acceptable to the Indenture Trustee;

     (xii) deliver such information and data to the Backup Servicer as is required under the
Backup Servicing Agreement;

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

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

          (b) In the event that a Defaulted Timeshare Loan is not or cannot be released from the Lien of
the Indenture pursuant to Section 4.5 hereof, the Servicer shall, in accordance with the Servicing
Standard, promptly institute collection procedures, which may include, but is not limited to,
cancellation, forfeiture, termination or foreclosure proceedings or obtaining a deed-in-lieu of
foreclosure (each, a “Foreclosure Property”). Upon the Timeshare Property becoming a Foreclosure
Property, the Servicer shall promptly attempt to liquidate such foreclosure Property. The Servicer
shall select the liquidation option reasonably anticipated to

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produce the highest Net Liquidation Proceeds, giving effect to the gross price obtainable,
broker’s commissions, foreclosure costs, fees and marketing expenses and other factors. The
Servicer shall be entitled to reimbursement of Liquidation Expenses out of Liquidation Proceeds.
Any Liquidation Expenses later recovered by the Servicer shall be deposited by the Servicer in the
Collection Account in accordance with Section 5.2(c) and (d) hereof.

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

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

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

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

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

          (c) The Servicer may not sell any of the Defaulted Timeshare Loans that are included in the
Collateral except for or as specifically permitted by this Indenture.

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

          (e) For so long as Silverleaf or any of its Affiliates controls the Association for a Resort,
and Silverleaf or an Affiliate thereof is the manager, the related management contract may not be
amended or modified if such amendment or modification is reasonably likely to have a material
adverse affect on the interests of the Noteholder, except with the prior written consent of the
Holders representing at least 66-2/3% of the Adjusted Note Balance of each Class of Notes, which
consent shall not be unreasonably withheld or delayed, or after obtaining a Rating Agency
Confirmation.

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

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

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

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            (i) For so long as Silverleaf or any Affiliate thereof is the Servicer, it shall comply in all
material respects with the Collection Policy in effect on the Closing Date (or, as amended from
time to time with the consent of the holders representing at least 66-2/3% of the Adjusted Note
Balance of each Class of Notes if such amendment is reasonably likely to have material adverse
affect on the interests of the Noteholders or after obtaining a Rating Agency Confirmation) and
with the terms of the Timeshare Loans.

     SECTION 5.4. Servicer Events of Default.

          (a) A “Servicer Event of Default” means, the occurrence and continuance of any of the
following events:

            (i) any failure by the Servicer to make any required payment, transfer or deposit when due
hereunder and the continuance of such default for a period of five (5) Business Days;

     (ii) any failure by the Servicer to provide any required report within five (5)
Business Days of when such report is required to be delivered hereunder;

     (iii) any failure by the Servicer to observe or perform in any material respect the
covenant set forth in Section 5.3(a)(iv) hereof, which failure in respect of clause (A), (B)
or (C) of such Section 5.3(a)(iv) is not remedied within two (2) Business Days after the
Servicer first acquires Knowledge thereof;

     (iv) any failure by the Servicer to observe or perform in any material respect any
other covenant or agreement (other than as set forth in clause (iii) above), which has a
material adverse effect on the Noteholders and such failure is not remedied within 30 days
(or, if the Servicer shall have provided evidence satisfactory to the Indenture Trustee that
such covenant cannot be cured in the 30-day period and that it is diligently pursuing a
cure, 60 days), after the earlier of (x) the Servicer first acquiring Knowledge thereof and
(y) the Indenture Trustee’s giving written notice thereof to the Servicer;

     (v) any representation or warranty made by the Servicer in this Indenture shall prove
to be incorrect in any material respect as of the time when the same shall have been made,
and such breach is not remedied within 30 days (or, if the Servicer shall have provided
evidence satisfactory to the Indenture Trustee that such breach cannot be cured in the
30-day period and that it is diligently pursuing a cure, 60 days) after the earlier of (x)
the Servicer first acquiring Knowledge thereof and (y) the Indenture Trustee’s giving
written notice thereof to the Servicer;

     (vi) the entry by a court having competent jurisdiction in respect of the Servicer of
(i) a decree or order for relief in respect of the Servicer in an involuntary case or
proceeding under any applicable federal or state bankruptcy, insolvency, reorganization, or
other similar law or (ii) a decree or order adjudging the Servicer a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization, arrangement, adjustment,
or composition of or in respect of the Servicer under any applicable federal or state law,
or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator, or other
similar official of the Servicer, or of any substantial part of

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its property, or ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order for relief or any such other decree or order
unstayed and in effect for a period of 60 consecutive days;

     (vii) the commencement by the Servicer of a voluntary case or proceeding; under any
applicable federal or state bankruptcy, insolvency, reorganization, or other similar law or
of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by
either to the entry of a decree or order for relief in respect of the Servicer in an
involuntary case or proceeding under any applicable federal or state bankruptcy, insolvency,
reorganization, or other similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against it, or the filing by it of a petition or answer or consent
seeking reorganization or relief under any applicable federal or state law, or the consent
by it to the filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator, or similar official of the
Servicer or of any substantial part of its property, or the making by it of an assignment
for the benefit of creditors, or the Servicer’s failure to pay its debts generally as they
become due, or the taking of corporate action by the Servicer in furtherance of any such
action;

     (viii) a Sequential Pay Event that remains uncured for one Due Period;

     (ix) if Silverleaf is the Servicer, it fails to maintain a Leverage Ratio of not
greater than 6.0 to 1.0; or

     (x) if Silverleaf is the Servicer, a change occurs of more than 50% of the executive
management of the Servicer as described in Exhibit H hereto, unless Silverleaf provides
written certification to the Indenture Trustee (which the Indenture Trustee shall promptly
forward to the Noteholders) within 30 days after such change, certifying that such executive
management personnel have been replaced, and setting forth a description of those persons’
experience, ability and reputation, and the Indenture Trustee shall not have received an
objection to such replacement personnel from holders of Notes of at least 50% of the
Adjusted Note Balance, within 15 Business Days after sending such certificate to the
Noteholders.

          If any Servicer Event of Default shall have occurred and not been waived hereunder, the
Indenture Trustee may, and upon notice from Holders representing at least 66-2/3% of the Adjusted
Note Balance of each Class of Notes shall, terminate, on behalf of the Noteholders, by notice in
writing to the Servicer, all of the rights and obligations of the Servicer, as Servicer under this
Indenture.

          Unless consented to by the Holders representing at least 66-2/3% of the Adjusted Note Balance
of each Class of Notes, the Issuer may not waive any Servicer Event of Default.

          (b) Replacement of Servicer. From and after the receipt by the Servicer of such
written termination notice or the resignation of the Servicer pursuant to Section 5.10 hereof, all
authority and power of the Servicer under this Indenture, whether with respect to the Timeshare
Loans or otherwise, shall, pass to and be vested in the Indenture Trustee, and the

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Indenture Trustee shall terminate the Backup Servicing Agreement and be the successor Servicer
hereunder and the duties and obligations of the Servicer shall terminate. The Servicer shall
perform such actions as are reasonably necessary to assist the Indenture Trustee and the Backup
Servicer in such transfer. If the Servicer fails to undertake such action as is reasonably
necessary to effectuate such a transfer, the Indenture Trustee is hereby authorized and empowered
to execute and deliver, on behalf of and at the expense of the Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish all other acts or
things reasonably necessary to effect the purposes of such notice of termination. The Servicer
agrees that if it is terminated pursuant to this Section 5.4, it shall promptly (and, in any event,
no later than five (5) Business Days subsequent to its receipt of the notice of termination from
the Indenture Trustee) provide the Indenture Trustee, the Backup Servicer or their respective
designees (with reasonable costs being borne by the Servicer) with all documents and records
(including, without limitation, those in electronic form) reasonably requested by it to enable the
Indenture Trustee to assume the Servicer’s functions hereunder, and the Servicer shall cooperate
with the Indenture Trustee in affecting the termination of the Servicer’s responsibilities and
rights hereunder and the assumption by a successor of the Servicer’s obligations hereunder,
including, without limitation, the transfer within one (1) Business Day to the Indenture Trustee or
its designee for administration by it of all cash amounts which shall at the time or thereafter be
received by it with respect to the Timeshare Loans (provided, however, that the Servicer shall
continue to be entitled to receive all amounts accrued or owing to it under this Indenture on or
prior to the date of such termination). The Indenture Trustee shall be entitled to renegotiate the
Servicing Fee; provided, however, no change to the Servicing Fee may be made unless
the Indenture Trustee shall have received the written consent of Holders representing at least
66-2/3% of the Adjusted Note Balance of each Class of Notes. Notwithstanding anything herein to the
contrary, in no event shall the Indenture Trustee or Silverleaf be liable for any Servicing Fee or
for any differential in the amount of the Servicing Fee paid hereunder and the amount necessary to
induce any successor Servicer to assume the obligations of Servicer under this Indenture.

          The successor servicer shall be entitled to be reimbursed by the Servicer, (or from the
Collateral to the extent set forth in Section 3.4(a)(ii), 3.4(d)(ii) or Section 6.6(a)(ii) hereof)
if the Servicer is unable to fulfill its obligations hereunder for all Servicer Termination Costs.

          The successor Servicer shall have (i) no liability with respect to any obligation which was
required to be performed by the terminated Servicer prior to the date that the successor Servicer
becomes the Servicer or any claim of a third party based on any alleged action or inaction of the
terminated Servicer, (ii) no obligation to perform any repurchase obligations, if any, of the
Servicer, (iii) no obligation to pay any taxes required to be paid by the Servicer, (iv) no
obligation to pay any of the fees and expenses of any other party involved in this transaction that
were incurred by the prior Servicer and (v) no liability or obligation with respect to any Servicer
indemnification obligations of any prior Servicer including the original Servicer.

          Notwithstanding anything contained in the Indenture to the contrary, any successor Servicer is
authorized to accept and rely on all of the accounting, records (including computer records) and
work of the prior Servicer relating to the Timeshare Loans (collectively, the “Predecessor Servicer
Work Product”), without any audit or other examination thereof, and such successor Servicer shall
have no duty, responsibility, obligation or liability for the acts

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and omissions of the prior Servicer. If any error, inaccuracy, omission or incorrect or
non-standard practice or procedure (collectively, “Errors”) exist in any Predecessor Servicer Work
Product and such Errors make it materially more difficult to service or should cause or materially
contribute to the successor Servicer making or continuing any Errors (collectively, “Continued
Errors”), the successor Servicer shall have no duty, responsibility, obligation or liability for
such Continued Errors; provided, however, that each successor Servicer shall agree to use its best
efforts to prevent further Continued Errors. In the event that the successor Servicer becomes aware
of Errors or Continued Errors, the successor Servicer shall, with the prior consent of the
Indenture Trustee, use its best efforts to reconstruct and reconcile such data as is commercially
reasonable to correct such Errors and Continued Errors and to prevent future Continued Errors and
to recover its costs thereby.

          The Indenture Trustee may appoint an Affiliate as the successor Servicer and the provisions of
this Section 5.4(b) related to the Indenture Trustee shall apply to such Affiliate.

          (c) Any successor Servicer, including the Indenture Trustee, shall not be deemed to be in
default or to have breached its duties as successor Servicer hereunder if the predecessor Servicer
shall fail to deliver any required deposit to the Collection Account or otherwise fail to cooperate
with, or take any actions required by such successor Servicer related to the transfer of servicing
hereunder.

     SECTION 5.5. Accountings; Statements and Reports.

          (a) Monthly Servicer Report. Not later than four (4) Business Days prior to the
Payment Date, the Servicer shall deliver to the Issuer, the Indenture Trustee, the Rating Agency,
the Backup Servicer and the Initial Purchaser, a report (the “Monthly Servicer Report”)
substantially in the form of Exhibit D hereto, detailing certain activity relating to the
Timeshare Loans. The Monthly Servicer Report shall be completed with the information specified
therein for the related Due Period and shall contain such other information as may be reasonably
requested by the Issuer, the Indenture Trustee or the Initial Purchaser in writing at least five
(5) Business Days prior to such Determination Date. Each such Monthly Servicer Report shall be
accompanied by an Officer’s Certificate of the Servicer in the form of Exhibit E hereto,
certifying the accuracy of the computations reflected in such Monthly Servicer Report.

          (b) Certification as to Compliance. The Servicer shall deliver to the Issuer, the
Indenture Trustee, the Rating Agency and the Initial Purchaser, an Officer’s Certificate on or
before April 30 of each year commencing in 2006: (x) to the effect that a review of the activities
of the Servicer during the preceding calendar year, and of its performance under this Indenture
during such period has been made under the supervision of the officers executing such Officer’s
Certificate with a view to determining whether during such period, to the best of such officer’s
knowledge, the Servicer had performed and observed all of its obligations under this Indenture, and
either (A) stating that based on such review, no Servicer Event of Default is known to have
occurred and is continuing, or (B) if such a Servicer Event of Default is known to have occurred
and is continuing, specifying such Servicer Event of Default and the nature and status thereof.

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          (c) Annual Accountants’ Reports. On or before each April 30 of each year commencing in
2006, the Servicer (unless the Indenture Trustee is the Servicer) shall (i) cause a firm of
independent public accountants to furnish a certificate or statement (and the Servicer shall
provide a copy of such certificate or statement to the Issuer, the Indenture Trustee, the Rating
Agency and the Initial Purchaser), to the effect that (1) such firm has examined and audited the
Servicer’s servicing controls and procedures for the previous calendar year and that such
independent public accountants have examined certain documents and records (including computer
records) and servicing procedures of the Servicer relating to the Timeshare Loans, (2) they have
examined the most recent Monthly Servicer Report prepared by the Servicer and three other Monthly
Servicer Reports chosen at random by such firm and compared such Monthly Servicer Reports with the
information contained in such documents and records, (3) their examination included such tests and
procedures as they considered necessary in the circumstances, (4) their examinations and
comparisons described under clauses (1) and (2) above disclosed no exceptions which, in their
opinion, were material, relating to such Timeshare Loans or such Monthly Servicer Reports, or, of
any such exceptions were disclosed thereby, setting forth such exceptions which, in their opinion,
were material, (5) on the basis of such examinations and comparison, such firm is of the opinion
that the Servicer has, during the relevant period, serviced the Timeshare Loans in compliance with
this Indenture and the other Transaction Documents in all material respects and that such documents
and records have been maintained in accordance with this Indenture and the other Transaction
Documents in all material respects, except in each case for (A) such exceptions as such firm shall
believe to be immaterial and (B) such other exceptions as shall be set forth in such written
report. The report will also indicate that such firm is independent of the Servicer within the
meaning of the Code of Professional Ethics of the American Institute of Certified Public
Accountants. In the event such independent public accountants require the Indenture Trustee to
agree to the procedures to be performed by such firm in any of the reports required to be prepared
pursuant to this Section 5.5(c), the Servicer shall direct the Indenture Trustee in writing to so
agree; it being understood and agreed that the Indenture Trustee will deliver such letter of
agreement in conclusive reliance upon the direction of the Servicer, and the Indenture Trustee has
not made any independent inquiry or investigation as to, and shall have no obligation or liability
in respect of, the sufficiency, validity or correctness of such procedures.

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

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     SECTION 5.6. Records.

          The Servicer shall maintain all data for which it is responsible (including, without
limitation, computerized tapes or disks) relating directly to or maintained in connection with the
servicing of the Timeshare Loans (which data and records shall be clearly marked to reflect that
the Timeshare Loans have been Granted to the Indenture Trustee on behalf of the Noteholders and
constitute part of the Collateral) at the address specified in Section 13.3 hereof or, upon fifteen
(15) days’ notice to the Issuer and the Indenture Trustee, at such other place where any Servicing
Officer of the Servicer is located (or upon 24 hours’ written notice if an Event of Default or
Servicer Event of Default shall have occurred).

     SECTION 5.7. Fidelity Bond and Errors and Omissions Insurance.

          The Servicer shall maintain or cause to be maintained fidelity bond and errors and omissions
insurance with respect to the Servicer in such form and in amounts as is customary for institutions
acting as custodian of funds in respect of timeshare loans or receivables on behalf of
institutional investors; provided that such insurance shall be in a minimum amount of $1,000,000
per policy and shall name the Indenture Trustee as an additional insured. No provision of this
Section 5.7 requiring such fidelity bond or errors and omissions insurance shall diminish or
relieve the Servicer from its duties and obligations as set forth in this Indenture. The Servicer
shall be deemed to have complied with this provision if one of its respective Affiliates has such
fidelity bond or errors and omissions insurance coverage and, by the terms of such fidelity bond or
errors and omissions insurance policy, the coverage afforded thereunder extends to the Servicer.
Upon a request of the Indenture Trustee, the Servicer shall deliver to the Indenture Trustee, a
certification evidencing coverage under such fidelity bond and the errors and omissions insurance.
Any such fidelity bond or errors and omissions insurance policy shall not be canceled or modified
in a materially adverse manner without ten (10) Business Days’ prior written notice to the
Indenture Trustee.

     SECTION 5.8. Merger or Consolidation of the Servicer.

          (a) The Servicer shall promptly provide written notice to the Indenture Trustee and the Rating
Agency of any merger or consolidation of the Servicer. The Servicer shall keep in full effect its
existence, rights and franchise as a corporation under the laws of the state of its incorporation
except as permitted herein, and shall obtain and preserve its qualification to do business as a
foreign corporation in each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Indenture or any of the Timeshare Loans and to
perform its duties under this indenture.

          (b) Any Person into which the Servicer may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer shall be a party, or
any Person succeeding to the business of the Servicer, shall be the successor of the Servicer
hereunder, without the execution or filing of any paper or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; provided, however, that the
successor or surviving Person (i) is a company whose business includes the servicing of assets
similar to the Timeshare Loans and shall be authorized to lawfully transact business in the state
or states in which the related Timeshare Properties it is to service are

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situated; (ii) is a U.S. Person, and (iii) delivers to the Indenture Trustee (1) an agreement,
in form and substance reasonably satisfactory to the Indenture Trustee, which contains an
assumption by such successor entity of the due and punctual performance and observance of each
covenant and condition to be performed or observed by the Servicer under this Indenture and the
other Transaction Documents to which the Servicer is a party and (2) an opinion of counsel as to
the enforceability of such agreement; provided, further, that the Rating Agency shall have
confirmed that such action will not result in a downgrade or withdrawal of any rating assigned to
the Class of Notes.

     SECTION 5.9. Sub-Servicing.

          (a) The Servicer may enter into one or more sub-servicing agreements with a sub-servicer upon
such terms and conditions as the Servicer may reasonably agree and as are not inconsistent with
this Indenture. References herein to actions taken or to be taken by the Servicer in servicing the
Timeshare Loans include actions taken or to be taken by a sub-servicer on behalf of the Servicer.
The Servicer shall be solely responsible for any sub-servicing fees due and payable to such
sub-servicer.

          (b) Notwithstanding any sub-servicing agreement, the Servicer shall remain obligated and
liable for the servicing and administering of the Timeshare Loans in accordance with this
Indenture, without diminution of such obligation or liability by virtue of such sub-servicing
agreement, and to the same extent and under the same terms and conditions as if the Servicer alone
were servicing and administering the Timeshare Loans.

     SECTION 5.10. Servicer Resignation.

          The Servicer shall not resign from the duties and obligations hereby imposed on it under this
Indenture unless and until (i) a successor servicer, acceptable to the Issuer, the Indenture
Trustee and the Holders representing at least 66-2/3% of the Adjusted Note Balance of each Class of
Notes, enters into an agreement in form and substance satisfactory to the Indenture Trustee, which
contains an assumption by such successor servicer of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the Servicer under this
Indenture from and after the date of assumption and (ii) the ratings of the Notes will not be
qualified, downgraded or withdrawn (as evidenced by a letter from each Rating Agency to the
Indenture Trustee to such effect, which letter shall be obtained at the expense of the Servicer,
without right of reimbursement). Upon such resignation, the Servicer shall comply with Section
5.4(b) hereunder.

          Except as provided in the immediately preceding paragraph or elsewhere in this Indenture, or
as provided with respect to the survival of indemnifications herein, the duties and obligations of
a Servicer under this Indenture shall continue until this Agreement shall have been terminated as
provided herein. The duties and obligations of a Servicer hereunder shall survive the exercise by
the Indenture Trustee of any right or remedy under this Indenture or the enforcement by the
Indenture Trustee of any provision of this Indenture.

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     SECTION 5.11. Fees and Expenses.

          As compensation for the performance of its obligations under this Indenture, the Servicer
shall be entitled to receive on each Payment Date, from amounts on deposit in the Collection
Account and in the priorities described in Section 3.4 hereof, the Servicing Fee and any Additional
Servicing Compensation. Other than Liquidation Expenses, the Servicer shall pay all expenses
incurred by it in connection with its servicing activities hereunder.

     SECTION 5.12. Access to Certain Documentation.

          Upon ten (10) Business Days’ prior written notice (or, one Business Day’s prior written notice
after the occurrence and during the continuance of an Event of Default or a Servicer Event of
Default), the Servicer will, from time to time during regular business hours, as requested by the
Issuer, the Indenture Trustee or any Noteholder and, prior to the occurrence of a Servicer Event of
Default, at the expense of the Issuer or such Noteholder and upon the occurrence and continuance of
a Servicer Event of Default, at the expense of the Servicer, permit the Issuer, the Indenture
Trustee or any Noteholder or its agents or representatives (i) to examine and make copies of and
abstracts from all books, records and documents (including, without limitation, computer tapes and
disks) in the possession or under the control of the Servicer relating to the servicing of the
Timeshare Loans serviced by it and (ii) to visit the offices and properties of the Servicer for the
purpose of examining such materials described in clause (i) above, and to discuss matters relating
to the Timeshare Loans with any of the officers, employees or accountants of the Servicer having
knowledge of such matters. Nothing in this Section shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the Obligors, and the
failure of the Servicer to provide access to information as a result of such obligation shall not
constitute a breach of this Section.

     SECTION 5.13. No Offset.

          Prior to the termination of this Indenture, the obligations of Servicer under this Indenture
shall not be subject to any defense, counterclaim or right of offset which the Servicer has or may
have against the Issuer, the Indenture Trustee or any Noteholder, whether in respect of this
Indenture, any Timeshare Loan or otherwise.

     SECTION 5.14. Account Statements.

          In connection with the Servicer’s preparation of the Monthly Servicer Reports, the Indenture
Trustee agrees to deliver to the Servicer via electronic delivery a monthly statement providing
account balances of each of the Trust Accounts.

     SECTION 5.15. Indemnification; Third Party Claim.

          The Servicer agrees to indemnify the Issuer, the Indenture Trustee, the Backup Servicer, the
Custodian and the Noteholders from and against any and all actual damages (excluding economic
losses related to the collectibility of any Timeshare Loan), claims, reasonable attorneys’ fees and
related costs, judgments, and any other costs, fees and expenses that each may sustain because of
the failure of the Servicer to service the Timeshare Loans in accordance with the Servicing
Standard or otherwise perform its obligations and duties

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hereunder in compliance with the terms of this Indenture, or because of any act or omission by
the Servicer due to its negligence or willful misconduct in connection with its maintenance and
custody of any funds, documents and records under this Indenture, or its release thereof except as
contemplated by this Indenture; provided, however, the Servicer shall not be obligated to indemnify
any party hereunder to the extent the related liability results from such party’s gross negligence
or willful misconduct. The Servicer shall immediately notify the Issuer and the Indenture Trustee
if it has Knowledge of a claim made by a third party with respect to the Timeshare Loans, and, if
such claim relates to the servicing of the Timeshare Loans by the Servicer, the Servicer shall
assume, with the consent of the Indenture Trustee, the defense of any such claim and pay all
expenses in connection herewith, including reasonable counsel fees, and promptly pay, discharge and
satisfy any judgment or decree which may be entered against it. In addition, so long as Silverleaf
or any Affiliate thereof acts as Servicer, the Servicer hereby agrees to indemnify the Indenture
Trustee and its officers, directors, employees and agents for, and to hold them harmless against,
any loss, liability or expense, including any loss, liability or expense directly or indirectly
incurred (regardless of negligence or bad faith on the part of the Indenture Trustee or the
Servicer) to the extent that such loss, liability or expense arose of out of or was imposed on the
Indenture Trustee as a result of any penalty or other cost imposed by the Internal Revenue Service
or other taxing authority. This Section 5.15 shall survive the termination of this Indenture or the
resignation or removal of the Servicer hereunder.

     SECTION 5.16. Backup Servicer.

          (a) Backup Servicing Agreement. The Issuer, the Indenture Trustee, the Servicer and
the Backup Servicer hereby agree to execute the Backup Servicing Agreement. The Backup Servicer
shall be responsible for each of the duties and obligations imposed upon it by the provisions of
the Backup Servicing Agreement and shall have no duties or obligations under any Transaction
Document to which it is not a party.

          (b) Termination of Servicer; Cooperation. In the event that the Servicer is terminated
or resigns in accordance with the terms of this Indenture, the Backup Servicer agrees that the
Backup Servicing Agreement will be terminated. The Backup Servicer agrees to cooperate in good
faith with any successor Servicer to effect a transition of the servicing obligations by the
Servicer and the Backup Servicer to any successor Servicer.

          (c) Reserved.

          (d) Backup Servicing Fee. The Backup Servicer shall receive its Backup Servicing Fee
in accordance with Sections 3.4 or 6.6, as applicable.

          (e) Termination of Backup Servicer. Notwithstanding anything to the contrary herein,
the Indenture Trustee shall have the right to remove the Backup Servicer with or without cause at
any time and replace the Backup Servicer pursuant to the provisions of the Backup Servicing
Agreement. In the event that the Indenture Trustee shall exercise its rights to remove and replace
Wells Fargo Bank, National Association as Backup Servicer, Wells Fargo Bank, National Association
shall have no further obligation to perform the duties of the Backup Servicer under this Indenture.
In the event of a termination of the Backup Servicing Agreement prior to the termination or
resignation of Silverleaf as the Servicer hereunder, the Indenture

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Trustee shall appoint a successor Backup Servicer reasonably acceptable to the Indenture
Trustee. Upon the termination or resignation of the Backup Servicer, the Indenture Trustee shall be
deemed to represent, warrant and covenant that it will service or engage a subservicer to perform
each of the servicing duties and responsibilities described in this Indenture.

     SECTION 5.17. Reserved.

     SECTION 5.18. Recordation.

          As soon as practicable after the Closing Date or Transfer Date, as applicable (but in no event
later than 10 Business Days or 60 days with respect to Timeshare Loans for which the original
Mortgages are still at the related recording office) after such date, the Servicer shall cause all
Assignments of Mortgage in respect of the Timeshare Loans to be recorded in the appropriate
offices. The Servicer agrees to cause all evidences of recordation to be delivered to the Custodian
to be held as part of the Timeshare Loan Files.

ARTICLE VI.

EVENTS OF DEFAULT; REMEDIES

     SECTION 6.1. Events of Default.

          “Event of Default” wherever used herein with respect to Notes, means any one of the following
events:

          (a) a default in the making of Interest Distribution Amounts, Principal Distribution Amounts,
Deferred Interest Amounts or any other payments in respect of any Note when such become due and
payable, and continuance of such default for five (5) Business Days; or

          (b) failure by Silverleaf, in its capacity as the Originator to purchase any Defective
Timeshare Loan or substitute a Qualified Substitute Loan for a Defective Timeshare Loan within the
specified time period; or

          (c) a non-monetary default in the performance, or breach, of any covenant of the Issuer in
this Indenture (other than a covenant dealing with a default in the performance of which or the
breach of which is specifically dealt with elsewhere in this Section 6.1), the continuance of such
default or breach for a period of 30 days (or, if the Issuer shall have provided evidence
satisfactory to the Indenture Trustee that such covenant cannot be cured in the 30-day period and
that it is diligently pursuing a cure, 60 days) after the earlier of (x) the Issuer first acquiring
Knowledge thereof, and (y) the Indenture Trustee’s giving written notice thereof to the Issuer; or

          (d) if any representation or warranty of the Issuer made in this Indenture shall prove to be
incorrect in any material respect as of the time when the same shall have been made, and such
breach is not remedied within 30 days (or, if the Issuer shall have provided evidence satisfactory
to the Indenture Trustee’ that such representation or warranty cannot be cured in the 30-day period
and that it is diligently pursuing a cure, 60 days) after the earlier of (x) the Issuer

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first acquiring Knowledge thereof, and (y) the Indenture Trustee’s giving written notice
thereof to the Issuer; or

          (e) the entry by a court having jurisdiction over the Issuer of (i) a decree or order for
relief in respect of the Issuer in an involuntary case or proceeding under any applicable federal
or state bankruptcy, insolvency, reorganization, or other similar law or (ii) a decree or order
adjudging the Issuer a bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment, or composition of or in respect of the Issuer under any
applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator, or other similar official of the Issuer, or of any substantial part of its
property, or ordering the winding up or liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or order unstayed and in effect for a period of
60 consecutive days; or

          (f) the commencement by the Issuer of a voluntary case or proceeding under any applicable
federal or state bankruptcy, insolvency, reorganization, or other similar law or of any other case
or proceeding to be adjudicated a bankrupt or insolvent, or the consent by either to the entry of a
decree or order for relief in respect of the Issuer in an involuntary case or proceeding under any
applicable federal or state bankruptcy, insolvency, reorganization, or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of
a petition or answer or consent seeking reorganization or relief under any applicable federal or
state law, or the consent by it to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator, or similar
official of the Issuer or of any substantial part of its property, or the making by it of an
assignment for the benefit of creditors, or the Issuer’s failure to pay its debts generally as they
become due, or the taking of corporate action by the Issuer in furtherance of any such action; or

          (g) the Issuer becoming subject to registration as an “investment company” under the
Investment Company Act of 1940, as amended; or

          (h) the impairment of the validity of any security interest of the Indenture Trustee in the
Collateral in any material respect, except as expressly permitted hereunder, or the creation of any
material encumbrance on or with respect to the Collateral or any portion thereof not otherwise
permitted, which is not stayed or released within ten (10) days of the Issuer having Knowledge of
its creation; or

          (i) (A) the occurrence and continuance of the Servicer Event of Default set forth under
Section 5.4(a)(iii) hereof or (B) the occurrence and continuance of a Servicer Event of Default
(other than as described in the immediately preceding clause (A), Section 5.4(a)(ix) and Section
5.4(a)(x) hereof) that is uncured for two consecutive Due Periods; or

          (j) on any Payment Date, after application of all Available Funds, the sum of the Aggregate
Loan Balance and the amount on deposit in the General Reserve Account is less than the aggregate
Outstanding Note Balance; or

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          (k) failure by the Originator as the Servicer to maintain a perfected, first priority
ownership interest (and backup security interest) in the Timeshare Loans in favor of the Issuer.

          For the avoidance of doubt, the amount of principal and Deferred Interest Amounts required to
be paid to Noteholders pursuant to this Indenture is generally limited to the Available Funds in
the Collection Account. Therefore, the failure to pay principal and Deferred Interest Amounts on
the Notes generally will not result in the occurrence of an Event of Default until the Stated
Maturity.

     SECTION 6.2. Acceleration of Maturity; Rescission and Annulment.

          (a) Upon the occurrence and continuance of an Event of Default, if (i) such Event of Default
of the kind specified in Section 6.1(e) or Section 6.1(f) above occurs, (ii) an Event of Default of
the kind specified in Section 6.1(a) above occurs and either (x) the Aggregate Loan Balance of the
Timeshare Loans is less than the Aggregate Outstanding Note Balance due to a default on one or more
of the Timeshare Loans or (y) such Event of Default specified in Section 6.1(a) above continues for
two consecutive Payment Dates, then each Class of Notes shall automatically become due and payable
at its Outstanding Note Balance together with all accrued and unpaid interest thereon.

          (b) Upon the occurrence and continuance of an Event of Default, if such Event of Default is of
the kind specified in Section 6.1(a) above (other than as described in Section 6.2(a) above), the
Indenture Trustee shall, upon notice from Holders representing at least 66-2/3% of the Adjusted
Note Balance of the most senior Class of Notes then Outstanding (and, if payment of interest and
principal on the most senior Class of Notes then Outstanding is current, the consent of the Holders
representing at least 66-2/3% of the Adjusted Note Balance of the most senior Class of Notes which
has failed to receive one or more payments of interest or principal), declare each Class of Notes
to be immediately due and payable at its Outstanding Note Balance plus all accrued and unpaid
interest thereon.

          (c) Upon the occurrence and continuance of an Event of Default, if such Event of Default
(other than an Event of Default of the kind described in Sections 6.2(a) or (b) above) shall occur
and is continuing, the Indenture Trustee shall, upon notice from Holders representing at least
66-2/3% of the Adjusted Note Balance of the most senior Class of Notes then Outstanding, declare
each Class of Notes to be immediately due and payable at its outstanding Note Balance plus all
accrued and unpaid interest thereon.

          (d) Upon any such declaration or automatic acceleration, the Outstanding Note Balance of each
Class of Notes together with all accrued and unpaid interest thereon shall become immediately due
and payable without presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Issuer. The Indenture Trustee shall promptly send a notice of any declaration
or automatic acceleration to each Rating Agency.

          (e) At any time after such a declaration of acceleration has been made but before a judgment
or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in
this Article provided, the Holders representing at least 66-2/3% of the

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Outstanding Note Balance of the most senior Class Outstanding (and, if the consent of another
Class shall have been required for such declaration, Holders representing at least 66-2/3% of the
Outstanding Note Balance of such Class) by written notice to the Issuer and the Indenture Trustee,
may rescind and annul such declaration and its consequences if-

     (i) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to
pay:

	 	(1)	 	all principal due on any Class of Notes which
has become due otherwise than by such declaration of acceleration and
interest thereon from the date when the same first became due until the
date of payment or deposit,
	 
	 	(2)	 	all interest due with respect to any Class of
Notes and, to the extent that payment of such interest is lawful,
interest upon overdue interest from the date when the same first became
due until the date of payment or deposit at a rate per annum equal to
the applicable Note Rate, and
	 
	 	(3)	 	all sums paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements, and advances of each of the Indenture Trustee and the
Servicer, its agents and counsel;

     and

     (ii) all Events of Default with respect to the Notes, other than the non-payment of the
Outstanding Note Balance of each Class of Notes which became due solely by such declaration
of acceleration, have been cured or waived as provided in Section 6.13 hereof.

          (f) An automatic acceleration under Section 6.2(a) may only be rescinded and annulled by
Holders representing at least 66-2/3% of the Adjusted Note Balance of each Class of Notes then
Outstanding.

          (g) Notwithstanding Section 6.2(d) and (e) above, (i) if the Indenture Trustee shall have
commenced making payments as described in Section 6.6, no acceleration may be rescinded or annulled
and (ii) no rescission shall affect any subsequent Events of Default or impair any rights
consequent thereon.

     SECTION 6.3. Remedies.

          (a) If an Event of Default with respect to the Notes occurs and is continuing of which a
Responsible Officer of the Indenture Trustee has Knowledge, the Indenture Trustee shall immediately
give notice to each Noteholder as set forth in Section 7.2 and shall solicit such Noteholders for
advice. The Indenture Trustee shall then take such action as so directed by the Holders
representing at least 66-2/3% of the Adjusted Note Balance of each Class of Notes then Outstanding
subject to the provisions of this Indenture.

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          (b) Following any acceleration of the Notes, the Indenture Trustee shall have all of the
rights, powers and remedies with respect to the Collateral as are available to secured parties
under the UCC or other applicable law, subject to the limitations set forth in subsection (d) below
and provided such action is not inconsistent with any other provision of this Agreement. Such
rights, powers and remedies may be exercised by the Indenture Trustee in its own name as trustee
under this Indenture.

          (c) (i) If an Event of Default specified in Section 6.1(a) above occurs and is continuing, the
Indenture Trustee is authorized to recover judgment in its own name and as trustee under this
Indenture against the Issuer for the Aggregate Outstanding Note Balance and interest remaining
unpaid with respect to the Notes.

     (ii) Subject to the provisions set forth herein, if an Event of Default occurs and is
continuing, the Indenture Trustee may, in its discretion, and at the instruction of the
Holders representing at least 66-2/3% of the Adjusted Note Balance of each Class of Notes
then outstanding shall, proceed to protect and enforce its rights and the rights of the
Noteholders by such appropriate judicial or other proceedings as the Indenture Trustee shall
deem most effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy. The Indenture Trustee shall
notify the Issuer, the Rating Agency, the Servicer and the Noteholders of any such action.

          (d) If the Indenture Trustee shall have received instructions, within 45 days from the date
notice pursuant to Section 6.3(a) is first given, from Holders representing at least 66-2/3% of the
Adjusted Note Balance of each Class of Notes then Outstanding that such Persons approve of or
request the liquidation of all of the Timeshare Loans, the Indenture Trustee shall to the extent
lawful, promptly sell, dispose of or otherwise liquidate all of the Timeshare Loans in a
commercially reasonable manner and on commercially reasonable terms, which shall include the
solicitation of competitive bids from third parties including any Noteholder (other than Silverleaf
or any Affiliates thereof), such bids to be approved by the Holders representing at least 66-2/3%
of the Adjusted Note Balance of each Class of Notes then Outstanding. The Indenture Trustee may
obtain a prior determination from any conservator, receiver or liquidator of the Issuer that the
terms and manner of any proposed sale, disposition or liquidation are commercially reasonable.

     SECTION 6.4. Indenture Trustee May File Proofs of Claim.

          (a) In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial proceeding related to the
Issuer, or any other obligor in respect of the Notes, or the property of the Issuer, or such other
obligor or their creditors, the Indenture Trustee (irrespective of whether the principal of the
Notes shall then be due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Indenture Trustee shall have made any demand on the Issuer for the
payment of overdue principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

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     (i) to file and prove a claim for the whole amount of principal and interest owing and
unpaid in respect of the Notes and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the Indenture Trustee and any
predecessor Indenture Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Indenture Trustee and any predecessor Indenture
Trustee, their agents and counsel) and of the Noteholders allowed in such judicial
proceeding;

     (ii) to collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same; and

     (iii) to participate as a member, voting or otherwise, of any official committee of
creditors appointed in such matter;

     (iv) and any custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official in such judicial proceeding is hereby authorized by each Noteholder to make
such payments to the Indenture Trustee and to pay to the Indenture Trustee any amount due it
for the reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and any predecessor Indenture Trustee, their agents and counsel, and any other
amounts due the Indenture Trustee and any predecessor Indenture Trustee under Section 7.6
hereof.

          (b) Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize,
consent to, accept or adopt on behalf of any Noteholder any plan of reorganization, agreement,
adjustment or composition affecting the Notes or the rights of any Noteholder thereof or affecting
the Timeshare Loans or the other assets included in the Collateral or to authorize the Indenture
Trustee to vote in respect of the claim of any Noteholder in any such proceeding.

     SECTION 6.5. Indenture Trustee May Enforce Claims Without Possession of Notes.

          All rights of action and claims under this Indenture, the Notes, the Timeshare Loans or the
other assets included in the Collateral may be prosecuted and enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Indenture Trustee shall be brought in its own
name as trustee under this Indenture, and any recovery of judgment shall, after provisions for the
payment of reasonable compensation, expenses, disbursements and advances of the Indenture Trustee
and any predecessor Indenture Trustee, their agents and counsel, be for the benefit of the
Noteholders in respect of which such judgment has been recovered, and distributed pursuant to the
priorities contemplated by Section 3.4 and Section 6.6 hereof, as applicable.

     SECTION 6.6. Application of Money Collected.

          (a) If a Payment Default Event shall have occurred and the Indenture Trustee has not yet
effected the remedies under Section 6.3(d) and Section 6.16 hereof, any money collected by the
Indenture Trustee in respect of the Collateral and any other money that may be held thereafter by
the Indenture Trustee as security for the Notes, including, without limitation,

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the amounts on deposit in the General Reserve Account and the Senior Reserve Account shall be
applied in accordance with the order set forth in Section 3.4(d) hereof.

          (b) If (i) a Payment Default Event shall have occurred and (ii) the Indenture Trustee shall
have effected a sale of the Collateral under Section 6.3(d) and Section 6.16 hereof ((i) and (ii),
a “Default Acceleration Event”), any money collected by the Indenture Trustee in respect of the
Collateral and any other money that may be held hereafter by the Indenture Trustee as security for
the Notes, including without limitation the Amounts on deposit in the General Reserve Account and
the Senior Reserve Account (all such amounts, collectively “Default Collections”) shall be applied
in the following order on each Payment Date:

     (i) to the Indenture Trustee, any accrued and unpaid Indenture Trustee Fees and any
extraordinary out-of-pocket expenses of the Indenture Trustee incurred and not reimbursed as
of such date;

     (ii) to the Servicer, the Servicing Fee, plus any accrued and unpaid Servicing Fees
with respect to prior Payment Dates and to the successor servicer, if any, the Servicer
Termination Costs, if any (up to a cumulative total of $100,000);

     (iii) to the Backup Servicer, the Backup Servicing Fee, plus any unpaid Backup
Servicing Fees with respect to prior Payment Dates;

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

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

     (vi) to the Class A Noteholders, the Class A Interest Distribution Amount;

     (vii) to the Class A Noteholders, the Class A Deferred Interest Amount, if any;

     (viii) to the Class A Noteholders, all remaining Default Collections until the
Outstanding Note Balance of the Class A Notes is reduced to zero;

     (ix) to the Class B Noteholders, the Class B Interest Distribution Amount;

     (x) to the Class B Noteholders, the Class B Deferred Interest Amount, if any;

     (xi) to the Class B Noteholders, all remaining Default Collections until the
Outstanding Note Balance of the Class B Notes is reduced to zero;

     (xii) to the Class C Noteholders, the Class C Interest Distribution Amount;

     (xiii) to the Class C Noteholders, the Class C Deferred Interest Amount, if any;

     (xiv) to the Class C Noteholders, all remaining Default Collections until the
Outstanding Note Balance of the Class C Notes is reduced to zero;

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     (xv) to the Class D Noteholders, the Class D Interest Distribution Amount;

     (xvi) to the Class D Noteholders, the Class D Deferred Interest Amount, if any;

     (xvii) to the Class D Noteholders, all remaining Default Collections until the
Outstanding Note Balance of the Class D Notes is reduced to zero; and

     (xviii) to the Issuer, any remaining amounts.

          (c) Notwithstanding the occurrence and continuation of an Event of Default, prior to the
occurrence of a Payment Default Event or Default Acceleration Event, Noteholders shall continue to
be paid in the manner and priorities described in Section 3.4(a) hereof.

     SECTION 6.7. Limitation on Suits.

          No Noteholder shall have any right to institute any proceeding, judicial or otherwise, with
respect to this Indenture or for any other remedy hereunder, unless:

          (a) there is a continuing Event of Default and such Noteholder has previously given written
notice to the Indenture Trustee of a continuing Event of Default;

          (b) such Noteholder or Noteholders have offered to the Indenture Trustee reasonable indemnity
(which may be in the form of written assurances) against the costs, expenses and liabilities to be
incurred in compliance with such request;

          (c) the Indenture Trustee, for 30 days after its receipt of such notice, request and offer of
indemnity, has failed to institute any such proceeding; and

          (d) no direction inconsistent with such written request has been given to the Indenture
Trustee during such 30-day period by the Holders representing at least 66-2/3% of the adjusted Note
Balance of each Class of Notes Outstanding;

          (e) it being understood and intended that no one or more of such Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to
affect, disturb or prejudice the rights of any other Noteholders, or to obtain or to seek to obtain
priority or preference over any other Noteholders or to enforce any right under this Indenture,
except in the manner herein provided and for the ratable benefit of all such Noteholders. It is
further understood and intended that so long as any portion of the Notes remains Outstanding, the
Servicer shall not have any right to institute any proceeding, judicial or otherwise, with respect
to its Indenture (other than for the enforcement of Section 3.4 hereof) or for the appointment of a
receiver or trustee (including without limitation a proceeding under the Bankruptcy Code), or for
any other remedy hereunder. Nothing in this Section 6.7 shall be construed as limiting the rights
of otherwise qualified Noteholders to petition a court for the removal of a Indenture Trustee
pursuant to Section 7.8 hereof.

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     SECTION 6.8. Unconditional Right of Noteholders to Receive Principal and Interest.

          Notwithstanding any other provision in this Indenture, other than the provisions hereof
limiting the right to recover amounts due on the Notes to recoveries from the property comprising
the Collateral, the Holder of any Note shall have the absolute and unconditional right to receive
payment of the principal of, and interest on, such Note as such payments of principal and interest
become due, including on the Stated Maturity, and such right shall not be impaired without the
consent of such Noteholder.

     SECTION 6.9. Restoration of Rights and Remedies.

          If the Indenture Trustee or any Noteholder has instituted any proceeding to enforce any right
or remedy under this Indenture and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Indenture Trustee or to such noteholder, then and,
in every such case, subject to any determination in such proceeding, the Issuer, the Indenture
Trustee and the Noteholders shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Indenture Trustee and the Noteholders
continue as though no such proceeding had been instituted.

     SECTION 6.10. Rights and Remedies Cumulative.

          Except as otherwise provided with respect to the replacement or payment of mutilated,
destroyed, lost, or stolen Notes in the last paragraph of Section 2.5 hereof, no right or remedy
herein conferred upon or reserved to the Indenture Trustee or to the Noteholders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any
other appropriate right or remedy.

     SECTION 6.11. Delay or Omission Not Waiver.

          No delay or omission of the Indenture Trustee or of any Holder of any Note to exercise any
right or remedy accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Indenture Trustee or to the Noteholders may be exercised
from time to time, and’ as often as may be deemed expedient, by the Indenture Trustee or by the
Noteholders, as the case may be.

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     SECTION 6.12. Control by Noteholders.

          Except as may otherwise be provided in this Indenture, until such time as the conditions
specified in Sections 11.1(a)(i) and (ii) hereof have been satisfied in full, the Holders
representing at least 66-2/3% of the Adjusted Note Balance of each Class of Notes shall have the
right to direct the time, method and place of conducting any proceeding for any remedy available to
the Indenture Trustee, or exercising any trust or power conferred on the Indenture Trustee; with
respect to the Notes. Notwithstanding the foregoing:

     (i) no such direction shall be in conflict with any rule of law or with this Indenture;

     (ii) the Indenture Trustee shall not be required to follow any such direction which the
Indenture Trustee reasonably believes might result in any personal liability on the part of
the Indenture Trustee for which the Indenture Trustee is not adequately indemnified; and

     (iii) the Indenture Trustee may take any other action deemed proper by the Indenture
Trustee which is not inconsistent with any such direction; provided that the Indenture
Trustee shall give notice of any such action to each Noteholder.

     SECTION 6.13. Waiver of Events of Default.

          (a) Unless a Default Acceleration Event shall have occurred, the Holders representing at least
66-2/3% of the Adjusted Note Balance of each Class of Notes may, by one or more instruments in
writing, waive any Event of Default hereunder and its consequences, except a continuing Event of
Default:

     (i) in respect of the payment of the principal of or interest on any Note (which may
only be waived by the Holder of such Note), or

     (ii) in respect of a covenant or provision hereof which under Article IX hereof cannot
be modified or amended without the consent of the Holder of each Outstanding Note affected
(which only may be waived by the Holders of all Outstanding Notes affected).

          (b) A copy of each waiver pursuant to Section 6.13(a) above shall be furnished by the Issuer
to the Indenture Trustee and each Noteholder. Upon any such waiver, such Event of Default shall
cease to exist and shall be deemed to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other Event of Default or impair any right consequent
thereon.

     SECTION 6.14. Undertaking for Costs.

          All parties to this Indenture agree (and each Holder of any Note by its acceptance hereof
shall be deemed to have agreed) that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against the Indenture
Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any

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party litigant in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against
any party litigant in such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; but the provisions of this Section shall not apply to (i) any
suit instituted by the Indenture Trustee, (ii) to any suit instituted by any Noteholder, or group
of noteholders representing at least 66-2/3% of the Adjusted Note Balance of each Class of Notes
outstanding, or (iii) to any suit instituted by any Noteholder for the enforcement of the payment
of the principal of or interest on any Note on or after the maturities for such payments, including
the Stated Maturity, as applicable.

     SECTION 6.15. Reserved.

     SECTION 6.16. Collateral.

          (a) The power to effect the sale of the Collateral pursuant to Section 6.3 hereof shall
continue unimpaired until all the Collateral shall have been sold or all amounts payable on the
Notes shall have been paid or losses allocated thereto and borne thereby. The Indenture Trustee may
from time to time, upon directions in accordance with Section 6.12 hereof, postpone any public sale
by public announcement made at the time and place of such sale.

          (b) Unless required by applicable law, the Indenture Trustee shall not sell to a third party
the Collateral, or any portion thereof except as permitted under Section 6.3(d) hereof.

          (c) In connection with a sale of the Collateral:

     (i) any one or more Noteholders (other than Silverleaf or any Affiliates thereof) may
bid for and purchase the property offered for sale, and upon compliance with the terms of
sale may hold, retain, and possess and dispose of such property, without further
accountability, and any Noteholder (other than Silverleaf or any Affiliates thereof) may, in
paying the purchase money therefor, deliver in lieu of cash any Outstanding Notes or claims
for interest thereon for credit in the amount that shall, upon distribution of the net
proceeds of such sale, be payable thereon, and the Notes, in case the amounts so payable
thereon shall be less than the amount due thereon, shall be returned to the Noteholders
after being appropriately stamped to show such partial payment;

     (ii) the Indenture Trustee shall execute and deliver an appropriate instrument of
conveyance prepared by the Servicer transferring the Indenture Trustee’s interest in the
Collateral without recourse, representation or warranty in any portion of the Collateral in
connection with a sale thereof;

     (iii) the Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey the Issuer’s interest in any portion
of the Collateral in connection with a sale thereof, and to take all action necessary to
effect such sale;

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     (iv) no purchaser or transferee at such a sale shall be bound to ascertain the
Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or
see to the application of any moneys; and

     (v) The method, manner, time, place and terms of any sale of the Collateral shall be
commercially reasonable.

     (vi) Except as set forth in Section 5.3(b)(iv) hereof, none of Silverleaf or its
Affiliates may bid for and purchase the Timeshare Loans offered for sale by the Indenture
Trustee in Section 6.16(c)(i) above.

     SECTION 6.17. Action on Notes.

          The Indenture Trustee’s right to seek and recover judgment on the Notes or under this
Indenture or any other Transaction Document shall not be affected by the seeking, obtaining or
application of any other relief under or with respect to this Indenture or any other Transaction
Document. Neither the Lien of this Indenture nor any rights or remedies of the Indenture Trustee or
the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against
the Issuer or by the levy of any execution under such judgment upon any portion of the Collateral
or upon any of the assets of the Issuer. Any money or property collected by the Indenture Trustee
shall be applied in accordance with the provisions of this Indenture.

     SECTION 6.18. Performance and Enforcement of Certain Obligations.

          Promptly following a request from the Indenture Trustee, the Issuer shall take all such lawful
action as the Indenture Trustee may request to compel or secure the performance and observance by
the Originator and the Servicer, as applicable, of each of their respective obligations to the
Issuer under or in connection with the Transfer Agreement and any other Transaction Document and to
exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Transfer Agreement or any other Transaction Document to the extent, and
in the manner directed by the Indenture Trustee, including the transmission of notices of default
on the part of the Originator or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the Originator or the
Servicer of each of their obligations under the Transfer Agreement and the other Transaction
Documents.

ARTICLE VII.

THE INDENTURE TRUSTEE

     SECTION 7.1. Certain Duties.

          (a) The Indenture Trustee undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Indenture Trustee. Except as expressly set forth herein, the
Indenture Trustee shall have no obligation to monitor the performance of the Servicer under the
Transaction Documents.

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          (b) In the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as
to the truth of the statements and the correctness of the opinions expressed herein, upon
certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions which by any provision hereof
are specifically required to be furnished to the Indenture Trustee, the Indenture Trustee shall be
under a duty to examine the same to determine whether or not they conform to the requirements of
this Indenture; provided, however, the Indenture Trustee shall not be required to verify or
recalculate the contents thereof.

          (c) In case an Event of Default or a Servicer Event of Default (resulting in the appointment
of the Indenture Trustee as successor Servicer) has occurred and is continuing, the Indenture
Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise, as a prudent Person would exercise or use under
the circumstances in the conduct of such Person’s own affairs; provided, however, that no provision
in this Indenture shall be construed to limit the obligations of the Indenture Trustee to provide
notices under Section 7.2 hereof.

          (d) The Indenture Trustee shall be under no obligation to exercise any of the rights or powers
vested in it by this Indenture at the request or direction of any of the Noteholders pursuant to
this Indenture, unless such Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity acceptable to the Indenture Trustee (which may be in the form of written
assurances) against the costs, expenses and liabilities which might be incurred by it in compliance
with such request or direction.

          (e) No provision of this Indenture shall be construed to relieve the Indenture Trustee from
liability for its own negligent action, its own negligent failure to act, or its own willful
misconduct or bad faith, except that:

     (i) this Section shall not be construed to limit the effect of Section 7.1(a) and (b)
above,

     (ii) the Indenture Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer unless it shall be proved that the Indenture Trustee shall
have been negligent in ascertaining the pertinent facts; and

     (iii) the Indenture Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the written direction of the
holders of the requisite principal amount of the outstanding Notes, or in accordance with
any written direction delivered to it under Sections 6.2(a), (b) or (c) hereof relating to
the time, method and place of conducting any proceeding for any remedy available to the
Indenture Trustee, or exercising any trust or power conferred upon the Indenture Trustee,
under this Indenture.

          (f) Whether or not therein expressly so provided, every provision of this Indenture relating
to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall
be subject to the provisions of this Section 7.1.

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          (g) The Indenture Trustee makes no representations or warranties with respect to the Timeshare
Loans or the Notes or the validity or sufficiency of any assignment of the Timeshare Loans to the
Issuer or their pledge to the Indenture Trustee under this Indenture.

          (h) Notwithstanding anything to the contrary herein, the Indenture Trustee is not required to
expend or risk its own funds or otherwise incur financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable
grounds to believe that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.

     SECTION 7.2. Notice of Events of Default.

          The Indenture Trustee shall promptly (but, in any event, within three (3) Business Days)
notify the Issuer, the Servicer, the Rating Agency and the Noteholders upon a Responsible Officer
obtaining actual knowledge of any event which constitutes an Event of Default or a Servicer Event
of Default or would constitute an Event of Default or a Servicer Event of Default but for the
requirement that notice be given or time elapse or both.

     SECTION 7.3. Certain Matters Affecting the Indenture Trustee. 

          Subject to the provisions of Section 7.1 hereof:

          (a) The Indenture Trustee may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed or presented by the proper party or
parties;

          (b) Any request or direction of any Noteholders, the Issuer, or the Servicer mentioned herein
shall be in writing;

          (c) Whenever in the performance of its duties hereunder the Indenture Trustee shall deem it
desirable that a matter be proved or established prior to taking, suffering or omitting any action
hereunder, the Indenture Trustee (unless other evidence be herein specifically prescribed) may, in
the absence of bad faith on its part, rely upon an Officer’s Certificate or an opinion of counsel;

          (d) The Indenture Trustee may consult with counsel, and the advice of such counsel or any
Opinion of Counsel shall be deemed authorization in respect of any action taken, suffered, or
omitted by it hereunder in good faith and in reliance thereon;

          (e) Prior to the occurrence of an Event of Default or after the curing of all Events of
Default which may have occurred, the Indenture Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper document, unless requested
in writing so to do by Noteholders representing at least 66-2/3% of the Adjusted Note Balance of
each Class of Notes; provided, however, that if the payment within a reasonable time to the
Indenture Trustee of the costs, expenses or liabilities likely to be

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incurred by it in the making of such investigation is, in the reasonable opinion of the
Indenture Trustee, not reasonably assured to the Indenture Trustee by the security afforded to it
by the terms of this Indenture, the Indenture Trustee may require reasonable indemnity against such
cost, expense or liability as a condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Indenture Trustee, shall be reimbursed
by the Servicer upon demand;

          (f) The Indenture Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents or attorneys or a custodian (which may be
an Affiliate of the Indenture Trustee), and the Indenture Trustee shall not be liable for any acts
or omissions of such agents, attorneys or custodians appointed with due care by it hereunder; and

          (g) Delivery of any reports, information and documents to the Indenture Trustee provided for
herein or any other Transaction Document is for informational purposes only (unless otherwise
expressly stated), and the Indenture Trustee’s receipt of such shall not constitute constructive
knowledge of any information contained therein or determinable from information contained therein,
including the Servicer’s or Issuer’s compliance with any of its representations, warranties or
covenants hereunder (as to which the Indenture Trustee is entitled to rely exclusively on Officer’s
Certificates).

     SECTION 7.4. Indenture Trustee Not Liable for Notes or Timeshare Loans.

          (a) The Indenture Trustee makes no representations as to the validity or sufficiency of this
Indenture or any Transaction Document, the Notes (other than the authentication thereof) or of any
Timeshare Loan. The Indenture Trustee shall not be accountable for the use or application by the
Issuer of funds paid to the Issuer in consideration of conveyance of the Timeshare Loans and
related assets to the Indenture Trustee on behalf of the Noteholders.

          (b) The Indenture Trustee (in its capacity as Indenture Trustee) shall have no responsibility
or liability for or with respect to the validity of any security interest in any property securing
a Timeshare Loan, the existence or validity of any Timeshare Loan, the validity of the assignment
of any Timeshare Loan to the Indenture Trustee on behalf of the Noteholders or of any intervening
assignment, the review of any Timeshare Loan, any Timeshare Loan File, the completeness of any
Timeshare Loan File, the receipt by the Custodian of any Timeshare Loan or Timeshare Loan File (it
being understood that the Indenture Trustee has not reviewed and does not intend to review such
matters), the performance or enforcement of any Timeshare Loan, the compliance by the Servicer or
the Issuer with any covenant or the breach by the Servicer or the Issuer of any warranty or
representation made hereunder or in any Transaction Document or the accuracy of any such warranty
or representation, the acts or omissions of the Servicer, the Issuer or any Obligor, or any action
of the Servicer or the Issuer taken in the name of the Indenture Trustee.

     SECTION 7.5. Indenture Trustee May Own Notes.

          The Indenture Trustee in its individual or any other capacity may become the owner or pledgee
of Notes with the same rights as it would have if it were not the Indenture

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Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying agent may become the
owner or pledgee of Notes with the same rights as it would have if it were not the Paying Agent,
Note Registrar, co-registrar or co-paying agent.

     SECTION 7.6. Indenture Trustee’s Fees and Expenses.

          On each Payment Date, the Indenture Trustee shall be entitled to the Indenture Trustee Fee and
reimbursement of out-of-pocket expenses incurred by it in connection with its responsibilities
hereunder in the priorities provided in Sections 3.4 or 6.6 hereof, as applicable.

     SECTION 7.7. Eligibility Requirements for Indenture Trustee.

          Other than the initial Indenture Trustee, the Indenture Trustee hereunder shall at all times
(a) be a corporation, depository institution, or trust company organized and doing business under
the laws of the United States of America or any state thereof authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at least $100,000,000,
(b) be subject to supervision or examination by federal or state authority, (c) be capable of
maintaining an Eligible Bank Account, (d) have a long-term unsecured debt rating of not less than
“Baa1” from Moody’s and “BBB” from S&P, and (e) shall be acceptable to Noteholders representing at
least 66-2/3% of the Adjusted Note Balance of the each Class of Notes. If such institution
publishes reports of condition at least annually, pursuant to or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this Section 7.7, the
combined capital and surplus of such institution shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In case at any time the
Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section 7.7,
the Indenture Trustee shall resign in the manner and with the effect specified in Section 7.8
below.

     SECTION 7.8. Resignation or Removal of Indenture Trustee.

          (a) The Indenture Trustee may at any time resign and be discharged with respect to the Notes
by giving 60 days’ prior written notice thereof to the Servicer, the Issuer, the Rating Agency and
the Noteholders. Upon receiving such notice of resignation, the Issuer shall promptly appoint a
successor Indenture Trustee not objected to by Noteholders representing at least 66-2/3% of the
Adjusted Note Balance of each Class of Notes within 30 days after prior written notice, by written
instrument, in sextuplicate, one counterpart of which instrument shall be delivered to each of the
Issuer, the Servicer, the Rating Agency, the Noteholders, the successor Indenture Trustee and the
predecessor Indenture Trustee. If no successor Indenture Trustee shall have been so appointed and
have accepted appointment within 60 days after the giving of such notice of resignation, the
resigning Indenture Trustee may petition any court of competent jurisdiction for the appointment of
a successor Indenture Trustee.

          (b) If at any time the Indenture Trustee shall cease to be eligible in accordance with the
provisions of Section 7.7 hereof and shall fail to resign after written request therefor by the
Issuer, or if at any time the Indenture Trustee shall be legally unable to act, fails to perform in
any material respect its obligations under this Indenture, or shall be adjudged a bankrupt or
insolvent, or a receiver of the Indenture Trustee or of its property shall be appointed, or any

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public officer shall take charge or control of the Indenture Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the Issuer or Holders
representing at least 66/2/3% of the Adjusted Note Balance of each Class of Notes may direct the
Issuer to remove the Indenture Trustee. If it removes the Indenture Trustee under the authority of
the immediately preceding sentence, the Issuer shall promptly appoint a successor Indenture Trustee
not objected to by Holders representing at least 66/2/3% of the Adjusted Note Balance of each Class
of Notes, within 30 days after prior written notice, by written instrument, in sextuplicate, one
counterpart of which instrument shall be delivered to each of the Issuer, the Servicer, the
Noteholders, the Rating Agency, the successor Indenture Trustee and the predecessor Indenture
Trustee.

          (c) Any resignation or removal of the Indenture Trustee and appointment of a successor
Indenture Trustee pursuant to any of the provisions of this Section 7.8 shall not become effective
until acceptance of appointment by the successor Indenture Trustee as provided in Section 7.9
hereof.

     SECTION 7.9. Successor Indenture Trustee.

          (a) Any successor Indenture Trustee appointed as provided in Section 7.8 hereof shall execute,
acknowledge and deliver to each of the Servicer, the Issuer, the Rating Agency, the Noteholders and
to its predecessor Indenture Trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Indenture Trustee shall become effective
and such successor Indenture Trustee, without any further act, deed or conveyance, shall become
fully vested with all the rights, powers, duties and obligations of its predecessor Indenture
Trustee hereunder with like effect as if originally named Indenture Trustee. The predecessor
Indenture Trustee shall deliver or cause to be delivered to the successor Indenture Trustee or its
custodian any Transaction Documents and statements held by it or its custodian hereunder; and the
Servicer and the Issuer and the predecessor Indenture Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for the full and certain vesting
and confirmation in the successor Indenture Trustee of all such rights, powers, duties and
obligations.

          (b) In case of the appointment hereunder of a successor Indenture Trustee with respect to the
Notes, the Issuer, the retiring Indenture Trustee and each successor Indenture Trustee with respect
to the Notes shall execute and deliver an indenture supplemental hereto wherein each successor
Indenture Trustee shall accept such appointment and which (i) shall contain such provisions as
shall be necessary or desirable to transfer and confirm to, and to vest in, each successor
Indenture Trustee all the rights, powers, trusts and duties of the retiring Indenture Trustee with
respect to the Notes to which the appointment of such successor Indenture Trustee relates, (ii) if
the retiring Indenture Trustee is not retiring with respect to all Notes, shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts
and duties of the retiring Indenture Trustee with respect to the Notes as to which the retiring
Indenture Trustee is not retiring shall continue to be vested in the retiring Indenture Trustee,
and (iii) shall add to or change any of the provisions of this Indenture as shall be necessary to
provide for or facilitate the administration of the Collateral hereunder by more than one Indenture
Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute
such Indenture Trustees co-trustees of the same allocated trust and that

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each such Indenture Trustee shall be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other such Indenture Trustee; and upon the
execution and delivery of such supplemental indenture the resignation or removal of the retiring
Indenture Trustee shall become effective to the extent provided therein and each such successor
Indenture Trustee, without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Indenture Trustee with respect to the Notes to
which the appointment of such successor Indenture Trustee relates; but, on request of the Issuer or
any successor Indenture Trustee, such retiring Indenture Trustee shall duly assign, transfer and
deliver to such successor Indenture Trustee all property and money held by such retiring Indenture
Trustee hereunder with respect to the Notes of that or those to which the appointment of such
successor Indenture Trustee relates.

          Upon request of any such successor Indenture Trustee, the Issuer shall execute any and all
instruments for more fully and certainly vesting in and confirming to such successor trustee all
such rights, powers and trusts referred to in the preceding paragraph.

          (c) No successor Indenture Trustee shall accept appointment as provided in this Section 7.9
unless at the time of such acceptance such successor Indenture Trustee shall be eligible under the
provisions of Section 7.7 hereof.

          (d) Upon acceptance of appointment by a successor Indenture Trustee as provided in this
Section 7.9, the Servicer shall mail notice of the succession of such Indenture Trustee hereunder
to each Noteholder at its address as shown in the Note Register. If the Servicer fails to mail such
notice within ten (10) days after acceptance of appointment by the successor Indenture Trustee, the
successor Indenture Trustee shall cause such notice to be mailed at the expense of the Issuer and
the Servicer.

     SECTION 7.10. Merger or Consolidation of Indenture Trustee.

          Any corporation into which the Indenture Trustee may be merged or converted or with which it
may be consolidated, or any corporation resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation succeeding to the corporate trust
business of the Indenture Trustee, shall be the successor of the Indenture Trustee hereunder,
provided such corporation shall be eligible under the provisions of Section. 7.7 hereof, without
the execution or filing of any paper or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding.

     SECTION 7.11. Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

          (a) At any time or times for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Collateral may at the time be located or in which any action of the
Indenture Trustee may be required to be performed or taken, the Indenture Trustee, the Servicer or
the Holders representing at least 66/2/3% of the Adjusted Note Balance of each Class of Notes, by
an instrument in writing signed by it or them, may appoint, at the reasonable expense of the Issuer
and the Servicer, one or more individuals or corporations to act as separate trustee or separate
trustees or co-trustee, acting jointly with the Indenture Trustee, of all or any part of the
Collateral, to the full extent that local law makes it necessary for such separate trustee

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or separate trustees or co-trustee acting jointly with the Indenture Trustee to act.
Notwithstanding the appointment of any separate or co-trustee, the Indenture Trustee shall remain
obligated and liable for the obligations of the Indenture Trustee under this Indenture.

          (b) The Indenture Trustee and, at the request of the Indenture Trustee, the Issuer shall
execute, acknowledge and deliver all such instruments as may be required by the legal requirements
of any jurisdiction or by any such separate trustee or separate trustees or co-trustee for the
purpose of more fully confirming such title, rights, or duties to such separate trustee or separate
trustees or co-trustee. Upon the acceptance in writing of such appointment by any such separate
trustee or separate trustees or co-trustee, it, he, she or they shall be vested with such title to
the Collateral or any part thereof, and with such rights, powers, duties and obligations as shall
be specified in the instrument of appointment, and such rights, powers, duties and obligations
shall be conferred or imposed upon and exercised or performed by the Indenture Trustee, or the
Indenture Trustee and such separate trustee or separate trustees or co-trustees jointly with the
Indenture Trustee subject to all the terms of this Indenture, except to the extent that under any
law of any jurisdiction in which any particular act or acts are to be performed the Indenture
Trustee shall be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations shall be exercised and performed by such separate trustee or
separate trustees or co-trustee, as the case may be. Any separate trustee or separate trustees or
co-trustee may, at any time by an instrument in writing, constitute the Indenture Trustee its
attorney-in-fact and agent with full power and authority to do all acts and things and to exercise
all discretion on its behalf and in its name. In any case any such separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, the title to the Collateral and all
assets, property, rights, power duties and obligations and duties of such separate trustee or
co-trustee shall, so far as permitted by law, vest in and be exercised by the Indenture Trustee,
without the appointment of a successor to such separate trustee or co-trustee unless and until a
successor is appointed.

          (c) All provisions of this Indenture which are for the benefit of the Indenture Trustee shall
extend to and apply to each separate. trustee or co-trustee appointed pursuant to the foregoing
provisions of this Section 7.11.

          (d) Every additional trustee and separate trustee hereunder shall, to the extent permitted by
law, be appointed and act and the Indenture Trustee shall act, subject to the following provisions
and conditions: (i) all powers, duties and obligations and rights conferred upon the Indenture
Trustee in respect of the receipt, custody, investment and payment of monies shall be exercised
solely by the Indenture Trustee; (ii) all other rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed and exercised or performed by the
Indenture Trustee and such additional trustee or trustees and separate trustee or trustees jointly
except to the extent that under any law of any jurisdiction in which any particular act or acts are
to be performed, the Indenture Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations (including the holding of title to
the Timeshare Properties in any such jurisdiction) shall be exercised and performed by such
additional trustee or trustees or separate trustee or trustees; (iii) no power hereby given to, or
exercisable by, any such additional trustee or separate trustee shall be exercised hereunder by
such trustee except jointly with, or with the consent of, the Indenture Trustee; and (iv) no
trustee hereunder shall be personally liable by reason of any

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act or omission of any other trustee hereunder.

          If at any time, the Indenture Trustee shall deem it no longer necessary or prudent in order to
conform to such law, the Indenture Trustee shall execute and deliver all instruments and agreements
necessary or proper to remove any additional trustee or separate trustee.

          (e) Any request, approval or consent in writing by the Indenture Trustee to any additional
trustee or separate trustee shall be sufficient warrant to such additional trustee or separate
trustee, as the case may be, to take such action as may be so requested, approved or consented to.

          (f) Notwithstanding any other provision of this Section 7.11, the powers of any additional
trustee or separate trustee shall not exceed those of the Indenture Trustee hereunder.

     SECTION 7.12. Paying Agent and Note Registrar Rights.

          So long as the Indenture Trustee is the Paying Agent and Note Registrar, the Paying Agent and
Note Registrar shall be entitled to the rights, benefits and immunities of the Indenture Trustee as
set forth in Article VII to the same extent and as fully as though named in place of the Indenture
Trustee herein. The Paying Agent shall be compensated out of the Indenture Trustee Fee.

     SECTION 7.13. Authorization.

          The Issuer hereby authorizes and directs the Indenture Trustee to enter into the Lockbox
Agreement. Pursuant to the Lockbox Agreement, the Indenture Trustee agrees to cause to be
established and maintained an account (the “Lockbox Account”) for the benefit of the Noteholders.
The Lockbox Account will be titled as follows “Wells Fargo Bank National Association, as Indenture
Trustee of Silverleaf Finance III, LLC Blocked Account”, Timeshare Loan-Backed Notes, Series
2005-A”. The Indenture Trustee is authorized and directed to act as titleholder of the Lockbox
Account in accordance with the terms of the Lockbox Agreement for the benefit of the Noteholders
with interests in the funds on deposit in such accounts. In addition, the Indenture Trustee is
hereby authorized to enter into, execute, deliver and perform under, each of the applicable
Transaction Documents and the Depository Agreement. The Lockbox Bank will be required to transfer
and will be permitted to withdraw funds from the Lockbox Account in accordance with the Lockbox
Agreement.

     SECTION 7.14. Maintenance of Office or Agency.

          The Indenture Trustee will maintain in the City of Minneapolis, Minnesota, an office or agency
where Notes may be surrendered for registration of transfer or exchange, and where notices and
demands to or upon the Indenture Trustee in respect of the Notes and this Indenture may be served.
The Indenture Trustee will give prompt written notice to the Issuer, the Servicer and the
Noteholders of the location, and of any change in the location, of any such office or agency or
shall fail to furnish the Issuer or the Servicer with the address thereof, such surrenders, notices
and demands may be made or served at the Corporate Trust Office, and the

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Issuer hereby appoints the Indenture Trustee as its agent to receive all such surrenders,
notices and demands.

ARTICLE VIII.

COVENANTS OF THE ISSUER

     SECTION 8.1. Payment of Principal and Interest.

          The Issuer will cause the due and punctual payment of the principal of, and interest on, the
Notes in accordance with the terms of the Notes and this Indenture.

     SECTION 8.2. Reserved.

     SECTION 8.3. Money for Payments to Noteholders to Be Held in Trust.

          (a) All payments of amounts due and payable with respect to any Notes that are to be made from
amounts withdrawn from the Trust Accounts pursuant to Sections 3.4 or 6.6 hereof shall be made on
behalf of the Issuer by the Indenture Trustee, and no amounts so withdrawn from the Collection
Account for payments of Notes shall be paid over to the Issuer under any circumstances, except as
provided in this Section 8.3, in Section 3.4 or Section 6.6, as the case may be.

          (b) In making payments hereunder, the Indenture Trustee will hold all sums held by it for the
payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided
and pay such sums to such Persons as herein provided.

          (c) Except as required by applicable law, any money held by the Indenture Trustee or the
Paying Agent in trust for the payment of any amount due with respect to any Note shall not bear
interest and if remaining unclaimed for two (2) years after such amount has become due and payable
to the Noteholder shall be discharged from such trust and, subject to applicable escheat laws, and
so long as no Event of Default has occurred and is continuing, paid to the Issuer upon request;
otherwise, such amounts shall be redeposited in the Collection Account as Available Funds, and such
Noteholder shall thereafter, as an unsecured general creditor, look only to the Issuer for payment
thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the
Indenture Trustee or the Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Indenture Trustee or the Paying Agent, before being required to make
any such repayment, shall cause to be published once, at the expense and direction of the Issuer,
in a newspaper published in the English language, customarily published on each Business Day and of
general circulation in the City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid to the Issuer. The
Indenture Trustee or the Paying Agent shall also adopt and employ, at the expense and direction of
the Issuer, any other reasonable means of notification of such repayment (including, but not
limited to, mailing notice of such repayment to Noteholders whose Notes have been called but have
not been surrendered for redemption or whose right to or interest in moneys due and payable but not
claimed is

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determinable) from the records of the Indenture Trustee or of any Paying Agent, at the last
address of record for each such Noteholder.

          (d) The Issuer will cause each Paying Agent to execute and deliver to the Indenture Trustee an
instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture
Trustee is the Paying Agent, it hereby so agrees), subject to the provisions of this Section 8.3,
that such Paying Agent will:

     (i) give the Indenture Trustee notice of any occurrence that is, or with notice or with
the lapse of time or both would become, an Event of Default by the Issuer of which it has
actual knowledge in the making of any payment required to be made with respect to the Notes;

     (ii) at any time during the continuance of any such occurrence described in clause (i)
above, upon the written request of the Indenture Trustee, pay to the Indenture Trustee all
sums so held in trust by such Paying Agent;

     (iii) immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee
all sums held by it in trust for the payment of Notes if at any time it ceases to meet the
standards required to be met by a Paying Agent at the time of its appointment; and

     (iv) comply with all requirements of the Code or any applicable state law with respect
to the withholding from any payments made by it on any Notes of any applicable withholding
taxes imposed thereon and with respect to any applicable reporting requirements in
connection therewith.

     The Issuer may at any time, for the purpose of obtaining the satisfaction and discharge of
this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the
Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the
Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent;
and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such monies.

     SECTION 8.4. Existence; Merger; Consolidation, etc.

          (a) The Issuer will keep in full effect its existence, rights and franchises as a limited
liability company under the laws of the State of Delaware, and will obtain and preserve its
qualification to do business as a foreign entity in each jurisdiction in which such qualification
is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes or
any of the Timeshare Loans.

          (b) The Issuer shall at all times observe and comply in all material respects with (i) all
laws applicable to it, (ii) all requirements of law in the declaration and payment of
distributions, and (iii) all requisite and appropriate formalities in the management of its
business and affairs and the conduct of the transactions contemplated hereby.

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          (c) The Issuer shall not (i) consolidate or merge with or into any other Person or convey or
transfer its properties and assets substantially as an entirety to any other Person or (ii)
commingle its assets with those of any other Person.

          (d) The Issuer shall not become an “investment company” or under the “control” of an
“investment company” as such terms are defined in the Investment Company Act of 1940, as amended
(or any successor or amendatory statute), and the rules and regulations thereunder (taking into
account not only the general definition of the term “investment company” but also any available
exceptions to such general definition); provided, however, that the Issuer shall be in compliance
with this Section 8.4 if it shall have obtained an order exempting it from regulation as an
“investment company” so long as it is in compliance with the conditions imposed in such order.

     SECTION 8.5. Protection of Collateral; Further Assurances.

          (a) The Issuer will from time to time execute and deliver all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments of further
assurance, and other instruments, and will take such other action as may be necessary or advisable
to:

     (i) Grant more effectively the assets comprising all or any portion of the Collateral;

     (ii) maintain or preserve the Lien of this Indenture or carry out more effectively the
purposes hereof;

     (iii) publish notice of, or protect the validity of, any Grant made or to be made by
this Indenture and perfect the security interest contemplated hereby in favor of the
Indenture Trustee in each of the Timeshare Loans and all other property included in the
Collateral; provided, that the Issuer shall not be required to cause the recordation of the
Indenture Trustee’s name as Lien holder on the related title documents for the Timeshare
Properties so long as no Event of Default has occurred and is continuing;

     (iv) enforce or cause the Servicer to enforce any of the Timeshare Loans in accordance
with the Servicing Standard, provided, however, the Issuer will not cause the Servicer to
obtain on behalf of the Indenture Trustee or the Noteholders, any Timeshare Property or to
take any actions with respect to any property the result of which would adversely affect the
interests of the Indenture Trustee or the Noteholders (including, but not limited to,
actions which would cause the Indenture Trustee or the related Noteholders to be considered
a holder of title, mortgagee-in-possession, or otherwise, or an “owner” or “operator” of
Property not in compliance with applicable environmental statutes); and

     (v) preserve and defend title to the Timeshare Loans (including the right to receive
all payments due or to become due thereunder), the interests in the Timeshare Properties, or
other property included in the Collateral and preserve and defend the rights of the
Indenture Trustee in the Collateral (including the right to receive all payments due or to
become due thereunder) against the claims of all Persons and parties other than as

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permitted hereunder.

          (b) The Issuer will not take any action and will use its commercially reasonable efforts not
to permit any action to be taken by others that would release any Person from any of such Person’s
material covenants or obligations under any instrument or agreement included in the Collateral or
that would result in the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or agreement, except as expressly
provided in this Indenture or the Custodial Agreement or such other instrument or agreement.

          (c) The Issuer may contract with or otherwise obtain the assistance of other Persons to assist
it in performing its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer’s Certificate of the Issuer shall be deemed to be
action taken by the Issuer, provided, however that no appointment of such Person shall relieve the
Issuer of its duties and obligations hereunder. Initially, the Issuer has contracted with the
Servicer, Indenture Trustee and the Custodian pursuant to this Indenture to assist the Issuer in
performing its duties under this Indenture and the other Transaction Documents.

          (d) The Issuer will punctually perform and observe all of its obligations and agreements
contained in this Indenture, the Transaction Documents and in the instruments and agreements
included in the Collateral.

          (e) Without derogating from the absolute nature of the assignment granted to the Indenture
Trustee under this Indenture or the rights of the Indenture Trustee hereunder, the Issuer agrees
(i) that it will not, without the prior written consent of the Indenture Trustee and the
Noteholders representing at least 66-2/3% of the Adjusted Note Balance of each Class of Notes,
amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Timeshare Loan (except to the
extent otherwise provided in this Indenture or in the Timeshare Loan Documents) or the Transaction
Documents, or waive timely performance or observance by the Servicer, the Indenture Trustee, the
Custodian or the Paying Agent under this Indenture; and (ii) that any such amendment shall not (A)
reduce in any manner the amount of, or accelerate or delay the timing of, distributions that are
required to be made for the benefit of the Noteholders or (B) reduce the aforesaid percentage of
the Notes that is required to consent to any such amendment, without the consent of the Noteholders
of all the Outstanding Notes. If any such amendment, modification, supplement or waiver shall be so
consented to by the Indenture Trustee and the Noteholders, the Issuer agrees, promptly following a
request by the Indenture Trustee, to execute and deliver, at its own expense, such agreements,
instruments, consents and other documents as the Indenture may deem necessary or appropriate in the
circumstances.

     The Issuer, upon the Issuer’s failure to do so, hereby irrevocably designates the Indenture
Trustee and the Servicer, severally, its agents and attorneys-in-fact to execute any financing
statement or continuation statement or Assignment of Mortgage required pursuant to this Section
8.5; provided, however, that such designation shall not be deemed to create a duty in the Indenture
Trustee to monitor the compliance of the Issuer with the foregoing covenants, and provided,
further, that the duty of the Indenture Trustee or the Servicer to execute any instrument

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required pursuant to this Section 8.5 shall arise only if a Responsible Officer of the
Indenture Trustee or the Servicer, as applicable, has Knowledge of any failure of the Issuer to
comply with the provisions of this Section 8.5.

     SECTION 8.6. Additional Covenants. 

          (a) The Issuer will not:

     (i) sell, transfer, exchange or otherwise dispose of any portion of the Collateral
except as expressly permitted by this Indenture;

     (ii) claim any credit on, or make any deduction from, the principal of, or interest on,
any of the Notes (other than amounts properly withheld from such payments under the Code) or
any applicable state law or assert any claim against any present or former Noteholder by
reason of the payment of any taxes levied or assessed upon any portion of the Collateral; or

     (iii) engage in any business or activity other than as permitted by the Limited
Liability Company Agreement, this Indenture and the other Transaction Documents and any
activities incidental thereto;

     (iv) issue debt of obligations under any indenture other than this Indenture;

     (v) incur or assume, directly or indirectly, any indebtedness, except for such
indebtedness as may be incurred by the Issuer pursuant to this Indenture, or guaranty any
indebtedness or other obligations of any Person (other than the Timeshare Loans), or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital contribution to, any
other Person (other than the Timeshare Loans);

     (vi) dissolve or liquidate in whole or in part or merge or consolidate with any other
Person;

     (vii) permit the validity or effectiveness of this Indenture or any Grant hereby to be
impaired, or permit the Lien of this Indenture to be amended, hypothecated, subordinated,
terminated or discharged, or permit any Person to be released from any covenants or
obligations under this Indenture, except as may be expressly permitted hereby, (B) permit
any lien, charge, security interest, mortgage or other encumbrance to be created on or to
extend to or otherwise arise upon or burden the Collateral or any part thereof or any
interest therein or the proceeds thereof (other than tax liens, mechanics’ liens and other
liens that arise by operation of law, in each case on any of the Resort Interests and
arising solely as a result of an act or omission of the related Obligor) other than the Lien
of this Indenture or (C) except as otherwise contemplated in this Indenture, permit the Lien
of this Indenture (other than with respect to any Permitted Liens or such tax, mechanics’ or
other lien) not to constitute a valid first priority security interest in the Collateral.

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     (viii) take any other action or fail to take any actions which may cause the Issuer to
be taxable as an association pursuant to Section 7701 of the Code and the corresponding
regulations, (b) a publicly traded partnership taxable as a corporation pursuant to Section
7704 of the Code and the corresponding regulations or (c) a taxable mortgage pool pursuant
to Section 7701(i) of the Code and the corresponding regulations; or

     (ix) change the location of its principal place of business without the prior notice to
the Indenture Trustee and the Noteholders.

          (b) Notice of Events of Defaults. Immediately upon the Issuer having Knowledge of the
existence of any condition or event which constitutes a Default or an Event of Default or a
Servicer Event of Default, the Issuer shall deliver to the Indenture Trustee a written notice
describing its nature and period of existence and what action the Issuer is taking or proposes to
take with respect thereto.

          (c) Report on Proceedings. Promptly upon the Issuer’s becoming aware of (i) any
proposed or pending investigation of it by any governmental authority or agency; or (ii) any
pending or proposed court or administrative proceeding which involves or is reasonably likely to
involve the possibility of materially and adversely affecting the properties, business, prospects,
profits or condition (financial or otherwise) of the Issuer, the Issuer shall deliver to the
Indenture Trustee a written notice specifying the nature of such investigation or proceeding and
what action the Issuer is taking or proposes to take with respect thereto and evaluating its
merits.

     SECTION 8.7. Taxes.

          The Issuer shall pay all taxes when due and payable or levied against its assets, properties
or income, including any property that is part of the Collateral, except to the extent the Issuer
is contesting the same in good faith and has set aside adequate reserves in accordance with
accounting principles generally accepted in the United States for the payment thereof.

     SECTION 8.8. Restricted Payments.

          Except as otherwise permitted under the Transaction Documents, the Issuer shall not, directly
or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to any owner of an
interest in the Issuer or otherwise with respect to any ownership or equity interest or security in
or of the Issuer, the Originator or the Servicer, (ii) redeem, purchase, retire or otherwise
acquire for value any ownership or equity interest or security in or of the Issuer, the Originator
or the Servicer or (iii) set aside or otherwise segregate any amounts for any such purpose;
provided, however, that the Issuer may make, or cause to be made, payments and distributions to or
on behalf of the Servicer, the Originator, the Indenture Trustee and the Noteholders as
contemplated by, and to the extent funds are available for such purpose under, this Indenture or
the other Transaction Documents; and, provided, further, that the Issuer may make cash
distributions to its members from funds available pursuant to Section 3.4(a)(xv), 3.4 (d)(iv) or
6.6(b)(xviii). The Issuer will not, directly or indirectly, make or cause to be made payments to or
distributions from

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the Collection Account except in accordance with this Indenture and the other Transaction
Documents.

     SECTION 8.9. Treatment of Notes as Debt for Tax Purposes.

          The Issuer shall treat the Notes as indebtedness for all federal, state and local income and
franchise tax purposes.

     SECTION 8.10. Further Instruments and Acts.

          Upon request of the Indenture Trustee, the Issuer will execute and deliver such further
instruments and do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

     SECTION 8.11. Compliance with LLC Agreement

          The Issuer shall comply with and shall not amend the Limited Liability Company Agreement
without the consent of the Holders representing at least 66-2/3% of the Adjusted Note Balance of
each Class of Notes then Outstanding if such amendment would have a material adverse effect on the
rights of the Noteholders. In addition, the Issuer shall not amend in any material respect the
Limited Liability Company Agreement without providing the Rating Agency with notice no later than
the tenth Business Day prior to such amendment (unless the right to such notice is waived by the
Rating Agency) and provided that the Rating Agency has not informed the Issuer that the rating of
any Class of Notes Outstanding will be withdrawn or reduced as a result of such amendment.

     SECTION 8.12. Separateness Covenants

The Issuer shall:

          (a) Maintain its own deposit and other account or accounts, separate from those of any
Affiliate. The funds of the Issuer will not be diverted to any other Person or for other than the
use of the Issuer, and, except as may be expressly permitted by this Indenture or the other
Transaction Documents, the funds of the Issuer shall not be commingled with those of any Affiliate
of the Issuer.

          (b) Ensure that, to the extent that it shares the same officers or other employees as any of
its members or Affiliates the salaries of and the expenses related to providing benefits to such
officers and other employees shall be fairly allocated among such entities, and each such entity
shall bear its fair share of the salary and benefit costs associated with all such common officers
and employees.

          (c) Ensure that, to the extent that it jointly contracts with any of its members or Affiliates
to do business with vendors or service providers or to share overhead expenses, the costs incurred
in so doing shall be allocated fairly among such entities, and each such entity shall bear its fair
share of such costs. To the extent that the Issuer contracts or does business with vendors or
service providers where the goods and services provided are partially for the benefit of any other
Person, the costs incurred in so doing shall be fairly allocated to or among such

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entities for whose benefit the goods and services are provided, and each such entity shall
bear its fair share of such costs. Except as otherwise contemplated by the Transaction Documents,
all material transactions between the Issuer and any of its Affiliates shall be only on an
arm’s-length basis.

          (d) Maintain an office and a telephone number separate from those of each of its members and
Affiliates other than Affiliates that are bankruptcy remote entities. To the extent that the
Issuer and any of its members or Affiliates have offices in contiguous space, there shall be fair
and appropriate allocation of overhead costs (including rent) among them, and each such entity
shall bear its fair share of such expenses.

          (e) Ensure that decisions with respect to its business and daily operations shall be
independently made by the Issuer and shall not be dictated by any Affiliate of the Issuer.

          (f) Act solely in its own name and through its own authorized officers and agents. The Issuer
shall at all times use its own stationery.

          (g) Other than organizational expenses and as contemplated by the Transaction Documents, pay
all expenses, indebtedness and other obligations incurred by it using its own funds.

          (h) Not enter into any guaranty, or otherwise become liable, with respect to any obligation of
any Affiliate nor make any loans to any Person.

          (i) Ensure that any financial reports required by it shall comply with generally accepted
accounting principles and shall be issued separately from, but may be consolidated with, any
reports prepared for any of its Affiliates so long as such consolidated reports contain footnotes
describing the effect of the transactions on the Issuer and such Affiliate and also state that the
assets of the Issuer are not available to pay creditors of the Affiliate.

          (j) Ensure that at all times it is adequately capitalized to engage in the transactions
contemplated in the Limited Liability Company Agreement and in the Transaction Documents.

ARTICLE IX.

SUPPLEMENTAL INDENTURES

     SECTION 9.1. Supplemental Indentures.

          (a) The Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory
to the Indenture Trustee, for any of the following purposes:

     (i) without the consent of any Noteholder (x) to correct or amplify the description of
any property at any time subject to the Lien of this Indenture, or to better assure, convey
and confirm unto the Indenture Trustee any property subject or required to be subjected to
the Lien of this Indenture; provided, such action pursuant to this clause (i)

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shall not adversely affect the interests of the Noteholders in any respect; or

	 	(y)	 	to evidence and provide for the acceptance of
appointment hereunder by a successor Indenture Trustee with respect to
the Notes and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Indenture
Trustee, pursuant to the requirements of Section 7.9 hereof; or
	 
	 	(z)	 	to cure any ambiguity, to correct or supplement
any provision herein which may be defective or inconsistent with any
other provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture; provided that such
action pursuant to this clause (2) shall not adversely affect the
interests of any of the Holders of Notes.

          (b) Reserved.

          (c) The Indenture Trustee shall promptly deliver, at least five (5) Business Days prior to the
effectiveness thereof, to each Noteholder and the Rating Agency, a copy of any supplemental
indenture entered into pursuant to this Section 9.1(a).

     SECTION 9.2. Supplemental Indentures with Consent of Noteholders.

          (a) With the consent of Holders representing at least 66-2/3% of the Adjusted Note Balance of
each Class of Notes then Outstanding and by Act of said Noteholders delivered to the Issuer and the
Indenture Trustee, the Issuer and the Indenture Trustee may, pursuant to an Issuer Order, enter
into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Indenture or of modifying in
any manner the rights of the Noteholders under this Indenture; provided, that no supplemental
indenture shall, without the consent of the Holder of each Outstanding Note affected thereby,

     (i) change the Stated Maturity of any Note or the due date of any installment of
principal or any installment of interest on any Note, or the amount of principal payments or
interest payments due or to become due on any Payment Date with respect to any Note, or
change the priority of payment thereof as set forth herein, or reduce the principal amount
thereof or the Note Rate thereon, or change the place of payment where, or the coin or
currency in which, any Note or the interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the Stated Maturity; or

     (ii) reduce the required percentage of the Outstanding Note Balance or Adjusted Note
Balance, that must be repeated by the Noteholders voting on whether to approve any
supplemental indenture or to waive compliance with provisions of this Indenture or Events of
Default and their consequences; or

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     (iii) modify any of the provisions of this Section 9.2 or Section 6.13 hereof except to
increase any percentage of Noteholders required for any modification or waiver or to provide
that certain other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby;

     (iv) modify or alter the provisions of the proviso to the definition of the term
“Outstanding”; or

     (v) permit the creation of any lien ranking prior to or on a parity with the Lien of
this Indenture with respect to any part of the Collateral or terminate the Lien of this
Indenture on any property at any time subject hereto or deprive any Noteholder of the
security afforded by the Lien of this Indenture.

          (b) The Indenture Trustee shall promptly deliver, at least five (5) Business Days prior to the
effectiveness thereof to each Noteholder and the Rating Agency, a copy of any supplemental
indenture entered into pursuant to Section 9.2(a) above.

     SECTION 9.3. Execution of Supplemental Indentures.

          In executing, or accepting the additional trusts created by, any supplemental indenture (a)
pursuant to Section 9.1 of this Indenture or (b) pursuant to Section 9.2 of this Indenture without
the consent of each Holder of the Notes to the execution of the same, or the modifications thereby
of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and
(subject to Section 7.1 hereof) shall be, fully protected in relying upon, an Opinion of Counsel
stating that the execution of such supplemental indenture is authorized or permitted by this
Indenture. The Indenture Trustee may, but shall not be obligated to, enter into any supplemental
indenture which affects the Indenture Trustee’s own rights, duties, obligations, or immunities
under this Indenture or otherwise.

     SECTION 9.4. Effect of Supplemental Indentures.

          Upon the execution of any supplemental indenture under this Article, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a part of this
Indenture for all purposes; and every Holder of Notes theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.

     SECTION 9.5. Reference in Notes to Supplemental Indentures.

          Notes authenticated and delivered after the execution of any supplemental indenture pursuant
to this Article may, and shall if required by the Indenture Trustee, bear a notation in form
approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. New
Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any
such supplemental indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.

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ARTICLE X.

REDEMPTION OF NOTES

     SECTION 10.1. Optional Redemption; Election to Redeem.

          The Servicer shall have the option to redeem not less than all of the Notes and thereby cause
the early repayment of the Notes on any date after the Optional Redemption Date by payment of an
amount equal to the Redemption Price and any amounts, fees and expenses that are required to be
paid pursuant to Section 6.6(b) hereof (unless amounts in the Trust Accounts are sufficient to make
such payments).

     SECTION 10.2. Notice to Indenture Trustee.

          The Servicer shall give written notice of its intention to redeem the Notes to the Indenture
Trustee at least fifteen (15) days prior to the Redemption Date (unless a shorter period shall be
satisfactory to the Indenture Trustee).

     SECTION 10.3. Notice of Redemption by the Servicer.

          Notices of redemption shall be given by the Servicer by first class mail, postage prepaid,
mailed not less than fifteen (15) days prior to the Redemption Date to each Noteholder, at the
address listed in the Note Register and to the Rating Agency. All notices of redemption shall state
(a) the Redemption Date, (b) the Redemption Price, (c) that on the Redemption Date, the Redemption
Price will become due and payable in respect of each Note, and that interest thereon shall cease to
accrue if payment is made on the Redemption Date and (d) the office of the Indenture Trustee where
the Notes are to be surrendered for payment of the Redemption Price. Failure to give notice of
redemption, or any defect therein, to any Noteholder shall not impair or affect the validity of the
redemption of any other Note.

     SECTION 10.4. Deposit of Redemption Price.

          On or before the Business Day immediately preceding the Redemption Date, the Servicer shall
deposit with the Indenture Trustee an amount equal to the Redemption Price and any amounts, fees
and expenses that are required to be paid hereunder (less any portion of such payment to be made
from funds held in any of the Trust Accounts).

     SECTION 10.5. Notes Payable on Redemption Date.

          Notice of redemption having been given as provided in Section 10.3 hereof and deposit of the
Redemption Price with the Indenture Trustee having been made as provided in Section 10.4 hereof,
the Notes shall on the Redemption Date, become due and payable at the Redemption Price, and, on
such Redemption Date, such Notes shall cease to accrue interest. The Indenture Trustee shall apply
all available funds in accordance with Section 6.6(b) hereof and the Noteholders shall be paid the
Redemption Price by the Indenture Trustee on behalf of the Servicer upon presentment and surrender
of their Notes at the office of the Indenture Trustee. If the Servicer shall have failed to deposit
the Redemption Price with the Indenture Trustee, the principal and interest with respect to each
Class of Notes shall, until paid, continue to accrue

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interest at their respective Note Rates. The Servicer’s failure to deposit the Redemption
Price shall not constitute an Event of Default hereunder.

ARTICLE XI.

SATISFACTION AND DISCHARGE

     SECTION 11.1. Satisfaction and Discharge of Indenture.

          (a) This Indenture shall cease to be of further effect (except as to any surviving rights of
registration of transfer or exchange of Notes herein expressly provided for), and the Indenture
Trustee, on demand of, and at the expense of, the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when:

          (i) either:

	 	(1)	 	all Notes theretofore authenticated and
delivered (other than (A) Notes which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.5
hereof and (B) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Issuer and
thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 8.3(c) hereof) have been delivered to the Indenture
Trustee for cancellation; or
	 
	 	(2)	 	the final installments of principal on all such
Notes not theretofore delivered to the Indenture Trustee for
cancellation (x) have become due and payable, or (y) will become due
and payable at their Stated Maturity, as applicable within one year,
and the Issuer has irrevocably deposited or caused to be deposited with
the Indenture Trustee in trust an amount sufficient to pay and
discharge the entire indebtedness on such Notes not theretofore
delivered to the Indenture Trustee for cancellation, for principal and
interest to the date of such deposit (in the case of Notes which have
become due and payable) or to the Stated Maturity thereof;

     (ii) the Issuer and the Servicer have paid or caused to be paid all other sums payable
hereunder by the Issuer and the Servicer for the benefit of the Noteholders and the
Indenture Trustee; and

     (iii) the Issuer has delivered to the Indenture Trustee an Officer’s Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have been complied with.

At such time, the Indenture Trustee shall deliver to the Issuer all cash, securities and other
property held by it as part of the Collateral other than funds deposited with the Indenture Trustee
pursuant to Section 11.1(a)(i) above, for the payment and discharge of the Notes.

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          (b) Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the
Issuer to the Indenture Trustee under Section 7.6 hereof and, if money shall have been deposited
with the Indenture Trustee pursuant to Section 11.1(a)(i) above, the obligations of the Indenture
Trustee under Sections 11.2 and 8.3(c) hereof shall survive.

     SECTION 11.2. Application of Trust Money; Repayment of Money Held by Paying Agent.

          Subject to the provisions of Section 8.3(c) hereof, all money deposited with the Indenture
Trustee pursuant to Sections 11.1 and 8.3 hereof shall be held in trust and applied by the
Indenture Trustee in accordance with the provisions of the Notes, this Indenture and the Trust
Agreement, to the payment, either directly or through a Paying Agent, as the Indenture Trustee may
determine, to the Persons entitled thereto, of the principal and interest for whose payment such
money has been deposited with the Indenture Trustee.

          In connection with the satisfaction and discharge of this Indenture, all moneys than held by
any Paying Agent other than the Indenture Trustee under the provisions of this Indenture with
respect to the Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held
and applied according to Section 3.2 hereof and thereupon such Paying Agent shall be released from
all further liability with respect to such moneys.

     SECTION 11.3. Trust Termination Date.

          Upon the full application of (a) moneys deposited pursuant to this Article 11 or (b) proceeds
of the Timeshare Loans pursuant to Sections 3.4 or 6.6 hereof, and all Liens granted hereunder
shall be released.

ARTICLE XII.

REPRESENTATIONS AND WARRANTIES AND COVENANTS.

     SECTION 12.1. Representations, Warranties and Covenants of the Issuer.

          The Issuer represents and warrants to, and covenants with, the Indenture Trustee, the
Servicer, the Backup Servicer and the Noteholders as of the Closing Date, as follows:

          (a) Organization and Good Standing. The Issuer has been duly formed and is validly
existing and in good standing as a limited liability company under the laws of the State of
Delaware, with power and authority to own its properties and to conduct its business as presently
conducted and has the power and authority to own and convey all of its properties and to execute
and deliver this Indenture and the Transaction Documents and to perform the transactions
contemplated hereby and thereby;

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          (b) Binding Obligation. This Indenture and the Transaction Documents to which it is a
party have each been duly executed and delivered on behalf of the Issuer and this Indenture and
each Transaction Document to which it is a party constitutes a legal, valid and binding obligation
of the Issuer enforceable in accordance with its terms except as may be limited by bankruptcy,
insolvency, moratorium or other similar laws affecting creditors’ rights and by general principles
of equity;

          (c) No Consents Required. No consent of, or other action by, and no notice to or
filing with, any Governmental Authority or any other party, is required for the due execution,
delivery and performance by the Issuer of this Indenture or any of the Transaction Documents or for
the perfection of or the exercise by the Indenture Trustee or the Noteholders of any of their
rights or remedies thereunder which have not been duly obtained;

          (d) No Violation. The consummation of the transaction contemplated by this Indenture
and the fulfillment of the terms hereof shall not conflict with, result in any material breach of
any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a
default under, the organizational documents of the Issuer, or any indenture, agreement or other
instrument to which the Issuer is a party or by which it is bound; nor result in the creation or
imposition of any Lien upon any of its properties pursuant to the terms of any such indenture,
agreement or other instrument (other than this Indenture);

          (e) No Proceedings. There is no pending or, to the Issuer’s Knowledge, threatened
action, suit or proceeding, nor any injunction, writ, restraining order or other order of any
nature against or affecting the Issuer, its officers or directors, or the property of the Issuer,
in any court or tribunal, or before any arbitrator of any kind or before or by any Governmental
Authority (i) asserting the invalidity of this Indenture or any of the Transaction Documents, (ii)
seeking to prevent the sale and assignment of any Timeshare Loan or the consummation of any of the
transactions contemplated thereby, or (iii) seeking any determination or ruling that would be
reasonably expected to materially and adversely affect (A) the performance by the Issuer of this
Indenture or any of the Transaction Documents or the interests of the Noteholders, (B) the validity
or enforceability of this Indenture or any of the Transaction Documents, or (C) the Intended Tax
Characterization;

          (f) Issuer Not Insolvent. The Issuer is solvent and will not become insolvent after
giving effect to the transactions contemplated by this Indenture and each of the Transaction
Documents;

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

          (h) Reportable Transactions. The Issuer hereby represents and warrants that, after
consultation with its tax advisors, it is unaware of the presence of factors in the transaction
that would cause the transaction contemplated by this Indenture and the other Transaction Documents
to constitute a “reportable transaction” as defined in Treasury Regulation Section 1.6011-4(b); and

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          (i) Performance. The Issuer will perform all of its obligations under this Indenture
and the other Transaction Documents in accordance with its terms and will enforce its rights
thereunder.

     SECTION 12.2. Representations and Warranties of the Servicer.

          The initial Servicer hereby represents and warrants to the Indenture Trustee, the Issuer, the
Backup Servicer and the Noteholders, as of the Closing Date, the following:

          (a) Organization and Authority. The Servicer:

     (i) is a corporation duly organized, validly existing and in good standing under the
laws of the State of Texas;

     (ii) has all requisite power and authority to own and operate its properties and to
conduct its business as currently conducted and as proposed to be conducted as contemplated
by the Transaction Documents to which it is a party, to enter into the Transaction Documents
to which it is a party and to perform its obligations under the Transaction Documents to
which it is a party; and

     (iii) has made all filings and holds all material franchises, licenses, permits and
registrations which are required under the laws of each jurisdiction in which the properties
owned (or held under lease) by it or the nature of its activities makes such filings,
franchises, licenses, permits or registrations necessary, except where the failure to make
such filing will not have a material adverse effect on the Servicer activities or its
ability to perform its obligations under the Transaction Documents.

          (b) Place of Business. The address of the principal place of business and chief
executive office of the Servicer is 1221 River Bend Drive, Suite 120, Dallas, Texas 75247 and
there have been no other such locations during the immediately preceding four months.

          (c) Compliance with Other Instruments, etc. The Servicer is not in violation of any
term of its certificate of incorporation or by-laws. The execution, delivery and performance by the
Servicer of the Transaction Documents to which it is a party do not and will not (i) conflict with
or violate the organizational documents of the Servicer, (ii) conflict with or result in a breach
of any of the terms, conditions or provisions of, or constitute a default under, or result in the
creation of any Lien on any of the properties or assets of the Servicer pursuant to the terms of
any instrument or agreement to which the Servicer is a party or by which it is bound where such
conflict would have a material adverse effect on the Servicer’s activities or its ability to
perform its obligations under the Transaction Documents or (iii) require any consent of or other
action by any trustee or any creditor of, any lessor to or any investor in the Servicer.

          (d) Compliance with Law. The Servicer is in material compliance with all statutes,
laws and ordinances and all governmental rules and regulations to which it is subject, the
violation of which, either individually or in the aggregate, could materially adversely affect its
business, earnings, properties or condition (financial or other). The internal policies and

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procedures employed by the Servicer are in material compliance with all applicable statutes,
laws and ordinances and all governmental rules and regulations. The execution, delivery and
performance of the Transaction Documents to which it is a party do not and will not cause the
Servicer to be in violation of any law or ordinance, or any order, rule or regulation, of any
federal, state, municipal or other governmental or public authority or agency where such violation
would, either individually or in the aggregate, materially adversely affect its business, earnings,
properties or condition (financial or other).

          (e) Pending Litigation or Other Proceedings. Except as specified in “RISK FACTORS” in
the Offering Circular, there is no pending or, to the best of the Servicer’s Knowledge, threatened
action, suit, proceeding or investigation before any court, administrative agency, arbitrator or
governmental body against or affecting the Servicer which, if decided adversely, would materially
and adversely affect (i) the condition (financial or otherwise), business or operations of the
Servicer or (ii) the ability of the Servicer 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.

          (f) Taxes. The Servicer has filed all tax returns (federal, state and local) which are
required to be filed and has paid all taxes related thereto, other than those which are being
contested in good faith or where the failure to file or pay would not have a material adverse
effect on the Servicer’s activities or its ability to perform its obligations under the Transaction
Documents.

          (g) Reserved.

          (h) Securities Laws. The Servicer is not an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment Company Act of 1940,
as amended.

          (i) Proceedings. The Servicer has taken all action necessary to authorize the
execution and delivery by it of the Transaction Documents to which it is a party and the
performance of all obligations to be performed by it under the Transaction Documents.

          (j) Defaults. The Servicer 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,
which default would have a material adverse effect on the transactions contemplated hereunder; and
to the Servicer’s Knowledge, 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.

          (k) Insolvency. The Servicer is solvent. Prior to the date hereof, the Servicer did
not, and is not about to, engage in any business or transaction for which any property remaining
with the Servicer would constitute an unreasonably small amount of capital. In addition, the
Servicer has not incurred debts that would be beyond the Servicer’s ability to pay as

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such debts matured.

          (l) No Consents. No prior consent, approval or authorization of, registration,
qualification, designation, declaration or filing with, or notice to any federal, state or local
governmental or public authority or agency, is, was or will be required for the valid execution,
delivery and performance by the Servicer of the Transaction Documents to which it is a party. The
Servicer has obtained all consents, approvals or authorizations of, made all declarations or
filings with, or given all notices to, all federal, state or local governmental or public
authorities or agencies which are necessary for the continued conduct by the Servicer of its
respective businesses as now conducted, other than such consents, approvals, authorizations,
declarations, filings and notices which, neither individually nor in the aggregate, materially and
adversely affect, or in the future will materially and adversely affect, the business, earnings,
prospects, properties or condition (financial or other) of the Servicer.

          (m) Reserved.

          (n) Information. No document, certificate or report furnished by the Servicer, in
writing, pursuant to this Agreement or in connection with the transactions contemplated hereby,
contains or will contain when furnished any untrue statement of a material fact or fails or will
fail to state a material fact necessary in order to make the statements contained therein, in light
of the circumstances under which they were made, not misleading. There are no facts relating to the
Servicer as of the Closing Date which when taken as a whole, materially adversely affect the
financial condition or assets or business of the Servicer, or which may impair the ability of the
Servicer to perform its obligations under this Agreement, which have not been disclosed herein or
in the certificates and other documents furnished by or on behalf of the Servicer pursuant hereto
or thereto specifically for use in connection with the transactions contemplated hereby or thereby.

          (o) Reserved.

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

     SECTION 12.3. Representations and Warranties of the Indenture Trustee.

          The Indenture Trustee hereby represents and warrants to the Servicer, the Issuer, the Backup
Servicer and the Noteholders as of the Closing Date, the following:

          (a) The Indenture Trustee is a national banking association duly organized, validly existing
and in good standing under the laws of the United States.

          (b) The execution and delivery of this Indenture and the other Transaction Documents to which
the Indenture Trustee is a party, and the performance and compliance with the terms of this
Indenture and the other Transaction Documents to which the Indenture Trustee is a party by the
Indenture Trustee, will not violate the Indenture Trustee’s organizational documents or constitute
a default (or an event which, with notice or lapse of time, or both, would constitute a default)
under, or result in a breach of, any material agreement or other material instrument to which it is
a party or by which it is bound.

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          (c) Except to the extent that the laws of certain jurisdictions in which any part of the
Collateral may be located require that a co-trustee or separate trustee be appointed to act with
respect to such property as contemplated herein, the Indenture Trustee has the full power and
authority to carry on its business as now being conducted and to enter into and consummate all
transactions contemplated by this Indenture and the other Transaction Documents, has duly
authorized the execution, delivery and performance of this Indenture and the other Transaction
Documents to which it is a party, and has duly executed and delivered this Indenture and the other
Transaction Documents to which it is a party.

          (d) This Indenture, assuming due authorization, execution and delivery by the other parties
hereto, constitutes a valid and binding obligation of the Indenture Trustee, enforceable against
the Indenture Trustee in accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’
rights generally and the rights of creditors of banks and (B) general principles of equity,
regardless of whether such enforcement is considered in a proceeding in equity or at law.

          (e) The Indenture Trustee is not in violation of, and its execution and delivery of this
Indenture and the other Transaction Documents to which it is a party and its performance and
compliance with the terms of this Indenture and the other Transaction Documents to which it is a
party will not constitute a violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local governmental or regulatory
authority, which violation, in the Indenture Trustee’s good faith and reasonable judgment, is
likely to affect materially and adversely the ability of the Indenture Trustee to perform its
obligations under any Transaction Document to which it is a party.

          (f) No litigation is pending or, to the best of the Indenture Trustee’s knowledge, threatened
against the Indenture Trustee that, if determined adversely to the Indenture Trustee, would
prohibit the Indenture Trustee from entering into any Transaction Document to which it is a party
or, in the Indenture Trustee’s good faith and reasonable judgment, is likely to materially and
adversely affect the ability of the Indenture Trustee to perform its obligations under any
Transaction Document to which it is a party.

          (g) Any consent, approval, authorization or order of any court or governmental agency or body
required for the execution, delivery and performance by the Indenture Trustee of or compliance by
the Indenture Trustee with the Transaction Documents to which it is a party or the consummation of
the transactions contemplated by the Transaction Documents has been obtained and is effective.

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     SECTION 12.4. Multiple Roles.

          The parties expressly acknowledge and consent to Wells Fargo Bank, National Association,
acting in the multiple roles of Indenture Trustee, the Paying Agent, the successor Servicer, the
Backup Servicer and the Custodian. Wells Fargo Bank, National Association may, in such capacities,
discharge its separate functions fully, without hindrance or regard to conflict of interest
principles, duty of loyalty principles or other breach of fiduciary duties to the extent that any
such conflict or breach arises from the performance by Wells Fargo Bank, National Association of
express duties set forth in this Indenture in any of such capacities, all of which defenses, claims
or assertions are hereby expressly waived by the other parties hereto, except in the case of
negligence (other than errors in judgment) and willful misconduct by Wells Fargo Bank, National
Association.

     SECTION 12.5. [Reserved].

     SECTION 12.6. [Reserved].

     SECTION 12.7. Representations and Warranties of the Backup Servicer.

          The Backup Servicer hereby represents and warrants to the Indenture Trustee, the Issuer, the
Servicer and the Noteholders, as of the Closing Date, the following:

          (a) The Backup Servicer is a national banking association duly organized, validly existing and
in good standing under the laws of the United States.

          (b) The execution and delivery of this Indenture and the other Transaction Documents to which
the Backup Servicer is a party, and the performance and compliance with the terms of this Indenture
and the other Transaction Documents to which the Backup Servicer is a party by the Backup Servicer,
will not violate the Backup Servicer’s organizational documents or constitute a default (or an
event which, with notice or lapse of time, or both, would constitute a default) under, or result in
a breach of, any material agreement or other material instrument to which it is a party or by which
it is bound.

          (c) The Backup Servicer has the full power and authority to carry on its business as now being
conducted and to enter into and consummate all transactions contemplated by this Indenture and the
other Transaction Documents to which it is a party, has duly authorized the execution, delivery and
performance of this Indenture and the other Transaction Documents to which it is a party, and has
duly executed and delivered this Indenture and the other Transaction Documents to which it is a
party.

          (d) This Indenture and the other Transaction Documents to which it is a party, assuming due
authorization, execution and delivery by the other parties hereto, constitute the valid and binding
obligations of the Backup Servicer, enforceable against the Backup Servicer in accordance with the
terms hereof and thereof, subject to (A) applicable bankruptcy, insolvency, reorganization,
moratorium and other laws affecting the enforcement of creditors’ rights generally and the rights
of creditors of banks and (B) general principles of equity, regardless of whether such enforcement
is considered in a proceeding in equity or at law.

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          (e) The Backup Servicer is not in violation of, and its execution and delivery of this
Indenture and the other Transaction Documents to which it is a party and its performance and
compliance with the terms of this Indenture and the other Transaction Documents to which it is a
party will not constitute a violation of, any law, any order or decree of any court or arbiter, or
any order, regulation or demand of any federal, state or local governmental or regulatory
authority, which violation, in the Backup Servicer’s good faith and reasonable judgment, is likely
to affect materially and adversely the ability of the Backup Servicer to perform its obligations
under any Transaction Document to which it is a party.

          (f) No litigation is pending or, to the best of the Backup Servicer’s knowledge, threatened
against the Backup Servicer that, if determined adversely to the Backup Servicer, would prohibit
the Backup Servicer from entering into any Transaction Document to which it is a party or, in the
Backup Servicer’s good faith and reasonable judgment, is likely to materially and adversely affect
the ability of the Backup Servicer to perform its obligations under any Transaction Document to
which it is a party.

          (g) Any consent, approval, authorization or order of any court or governmental agency or body
required for the execution, delivery and performance by the Backup Servicer of or compliance by the
Backup Servicer with the Transaction Documents to which it is a party or the consummation of the
transactions contemplated by the Transaction Documents has been obtained and is effective.

ARTICLE XIII.

MISCELLANEOUS

     SECTION 13.1. Officer’s Certificate and Opinion of Counsel as to Conditions
Precedent.

          Upon any request or application by the Issuer (or any other obligor in respect of the Notes)
to the Indenture Trustee to take any action under this Indenture, the Issuer (or such other
obligor) shall furnish to the Indenture Trustee:

          (a) an Officer’s Certificate (which shall include the statements set forth in Section 13.2
hereof) stating that all conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been complied with; and

          (b) at the request of the Indenture Trustee, an Opinion of Counsel (which shall include the
statements set forth in Section 13.2 hereof) stating that, in the opinion of such counsel, all such
conditions precedent and covenants have been complied with.

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     SECTION 13.2. Statements Required in Certificate or Opinion.

          Each certificate or opinion with respect to compliance with a condition or covenant provided
for in this Indenture shall include:

          (a) a statement that the Person making such certificate or opinion has read such covenant or
condition;

          (b) a brief statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are based;

          (c) a statement that, in the opinion of such Person, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and

          (d) a statement as to whether or not, in the opinion of such Person, such condition or
covenant has been complied with.

     SECTION 13.3. Notices.

          (a) All communications, instructions, directions and notices to the parties thereto shall be
(i) in writing (which may be by telecopy, followed by delivery of original documentation within one
Business Day), (ii) effective when received and (iii) delivered or mailed first class mail, postage
prepaid to it at the following address:

If to the Issuer:

Silverleaf Finance III, LLC

1221 River Bend Drive, Suite 120

Dallas, Texas 75247

Attention:

Telecopier No.:

with a copy to:

Meadows, Owens, Collier, Reed, Cousins & Blair, L.L.P.

901 Main Street, Suite 3700

Dallas, Texas 75202

Attention: David N. Reed, Esq.

Telecopier No.: (214) 747-3732

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If to the Servicer:

Silverleaf Resorts, Inc.

1221 River Bend Drive, Suite 120

Dallas, Texas 75247

Attention:

Telecopier No.:

with a copy to:

Meadows, Owens, Collier, Reed, Cousins & Blair, L.L.P.

901 Main Street, Suite 3700

Dallas, Texas 75202

Attention: David N. Reed, Esq.

Telecopier No.: (214) 747-3732

If to the Backup Servicer:

Wells Fargo Bank, National Association

Sixth and Marquette Avenue

MAC N9311-161

Minneapolis, Minnesota 55479

Attention: Corporate Trust Services/Asset-Backed Administration

Facsimile Number: (612) 667-3464

Telephone Number: (612) 667-8058

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If to the Indenture Trustee, Paying Agent and Custodian:

Wells Fargo Bank, National Association

Sixth and Marquette Avenue

MAC N9311-161

Minneapolis, Minnesota 55479

Attention: Corporate Trust Services/Asset-Backed Administration

Facsimile Number: (612) 667-3464

Telephone Number: (612) 667-8058

If to the Rating Agency:

Moody’s Investors Service, Inc.

99 Church Street

New York, New York 10004

Attention: Residential Mortgage Pass-Through Surveillance Group

or at such other address as the party may designate by notice to the other parties hereto, which
shall be effective when received.

          (b) All communications and notices described hereunder to a Noteholder shall be in writing and
delivered or mailed first class mail, postage prepaid or overnight courier at the address shown in
the Note Register. The Indenture Trustee agrees to deliver or mail to each Noteholder upon
receipt, all notices and reports that the Indenture Trustee may receive hereunder and under any
Transaction Documents. Unless otherwise provided herein, the Indenture Trustee may consent to any
requests received under such documents or, at its option, follow the directions of Holders
representing at least 66-2/3% of the Adjusted Note Balance of each Class of Notes within 30 days
after prior written notice to the Noteholders. All notices to Noteholders (or any Class thereof)
shall be sent simultaneously. Expenses for such communications and notices shall be borne by the
Servicer.

     SECTION 13.4. No Proceedings.

          The Noteholders, the Servicer, the Indenture Trustee, the Custodian, and the Backup Servicer
each hereby agrees that it will not, directly or indirectly institute, or cause to be instituted,
against the Issuer or the Collateral any proceeding of the type referred to in Sections 6.1(d) and
(e) hereof, so long as there shall not have elapsed one year plus one day after payment in full of
the Notes.

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      IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of
the day and year first above written.

	 	 	 	 	 
	 	 	SILVERLEAF FINANCE III, LLC,
	 
	 	 	 	 
	 

	 	By:
	 	/S/ HARRY J. WHITE, JR.
	 

	 	 	 	 
	 

	 	 	 	Name: Harry J. White, Jr.
	 

	 	 	 	Title: CFO
	 
	 	 	 	 
	 	 	SILVERLEAF RESORTS, INC.,

as Servicer
	 
	 	 	 	 
	 

	 	By:
	 	/S/ HARRY J. WHITE, JR.
	 

	 	 	 	 
	 

	 	 	 	Name: Harry J. White, Jr.
	 

	 	 	 	Title: CFO
	 
	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION

as Backup Servicer
	 
	 	 	 	 
	 

	 	By:
	 	/S/ CORY W. BRANDEN
	 

	 	 	 	 
	 

	 	 	 	Name: Cory w. Branden
	 

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Indenture Trustee
	 
	 	 	 	 
	 

	 	By:
	 	/S/ CORY W. BRANDEN
	 

	 	 	 	 
	 

	 	 	 	Name: Cory w. Branden
	 

	 	 	 	Title: Vice President
	 
	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Custodian
	 
	 	 	 	 
	 

	 	By:
	 	/S/ CORY W. BRANDEN
	 

	 	 	 	 
	 

	 	 	 	Name: Cory w. Branden
	 

	 	 	 	Title: Vice President

83

 

	 	 	 	 	 
	 	 	WELLS FARGO BANK, NATIONAL ASSOCIATION,

as Account Intermediary
	 
	 	 	 	 
	 

	 	By:
	 	/S/ CORY W. BRANDEN
	 

	 	 	 	 
	 

	 	 	 	Name: Cory w. Branden
	 

	 	 	 	Title: Vice President

[Signature Page to the Indenture]

List of Schedules and Exhibits to Agreement not filed herewith:

Exhibit A Form of Notes

Exhibit B Form of Investor Representation Letter

Exhibit C Reserved

Exhibit D Form of Monthly Servicer Report

Exhibit E Servicing Officer’s Certificate

Exhibit F Reserved

Exhibit G Form of ROAP Waiver Letter

Exhibit H List of Silverleaf Executive Management

Annex A Standard Definitions

Schedule I Schedule of Timeshare Loan

84exv10w2

 

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).

-2-

 

     “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

-3-

 

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

-4-

 

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.

-5-

 

     “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.

-6-

 

     “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

-7-

 

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.

-8-

 

     “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

-9-

 

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).

-10-

 

     “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.

-11-

 

     “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.

-12-

 

     “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.

-13-

 

     “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

-14-

 

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

-15-

 

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:

-16-

 

	 	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.

-17-

 

     “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

-18-

 

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.

-19-

 

     “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-

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