AMENDED AND RESTATED SALE AND SERVICING AGREEMENT

AMENDED AND RESTATED SALE AND SERVICING

AGREEMENT

among

SILVERLEAF FINANCE IV, LLC, as

Purchaser,

SILVERLEAF RESORTS, INC., as

Seller and Servicer,

and

WELLS FARGO BANK, NATIONAL ASSOCIATION, as

Backup Servicer, Trustee and Account Intermediary

Dated as of

December 22, 2006

TABLE OF CONTENTS

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SCHEDULES

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

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

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

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

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

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

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

ARTICLE I

DEFINITIONS

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

Section 1.2   Other Definitional Provisions .

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

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

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

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

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

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

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

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

ARTICLE II

CONVEYANCE OF RECEIVABLES

Section 2.1   Conveyance of Receivables

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

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

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

(iii)with respect to any Timeshare Loan, all of the Seller’s interest in the Timeshare Property arising under or in connection with the related Mortgage, Financing Agreement, Oak N’ Spruce Certificate and the related Timeshare Loan Documents;

(iv)all other security interests or liens and property subject thereto from time to time purporting to secure payment of such Timeshare Loan, together with all mortgages, assignments and financing statements signed by an Obligor describing any collateral securing such Timeshare Loan;

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

(vi)Reserved;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 2.3   Further Encumbrance of Receivables and Other Conveyed Property .

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

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

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

ARTICLE III

THE RECEIVABLES

Section 3.1   Representations, Warranties and Certain Covenants of Seller .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 3.2   Repurchases and Substitutions .

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

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

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

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

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

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

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

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

Section 3.3   Custody of Timeshare Loan Files .

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

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

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

ARTICLE IV

ADMINISTRATION AND SERVICING OF RECEIVABLES

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(vii)arranging for Liquidations of Timeshare Properties related to Defaulted Timeshare Loans and the remarketing of such Timeshare Properties as provided in Section 4.3 below;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Section 4.4   [RESERVED]

Section 4.5   Maintenance of Security Interests .

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

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

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

Section 4.6   Additional Covenants of Servicer .

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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Section 4.14   Access to Certain Documentation and Information Regarding Receivables . The Servicer shall provide to representatives of the Trustee, the Backup Servicer and the Noteholder reasonable access to the documentation regarding the Receivables and