Third Amendment to Amended and Restated Sale and Servicing Agreement dated as of August 6, 2010 , by and among Silverleaf Finance IV, LLC, Silverleaf Resorts, Inc. and Wells Fargo Bank, National Association

 

THIRD AMENDMENT TO AMENDED AND RESTATED SALE AND SERVICING AGREEMENT (this “Amendment”) dated as of August 6, 2010, by and among SILVERLEAF FINANCE IV, LLC a Delaware limited liability company, as purchaser (the “Purchaser”), SILVERLEAF RESORTS, INC., a Texas corporation, as seller and servicer (the “Seller”) and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as trus tee (the “Trustee”), Backup Servicer and Account Intermediary.

(a)    Section 3.1(a)(ii) of the Agreement is hereby amended by

(i)    replacing clause (B) thereof in its entirety with the following:

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

 

and

 

(ii)    replacing clause (C) thereof in its entirety with the following:

“(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 7.00% of the Aggregate Principal Balance of all Eligible Receivables;”.

 

(b)    Article VII of the Agreement is hereby amended by adding the following after Section 7.2 thereof:

 

“Section 7.3    .    The Purchaser and the Seller agree that

in the event that Silverleaf (whether directly, or through or involving any of its subsidiaries or affiliates) executes a term securitization of timeshare loans during any period when there remains any outstanding principal balance under the Notes (or under the Class A Notes or Class B Notes, following the S&P Rating Restructuring), not less than a pro rata amount of Timeshare Loans (constituting the same proportion of Timeshare Loans, by outstanding principal balance, that the aggregate principal amount of timeshare loans to be securitized in such term securitization bears to the aggregate principal amount of all timeshare loans, including the Timeshare Loans, available to Silverleaf for inclusion in such term securitization) shall be included as part of the timeshare loans being securitized by purchase from the Purchaser (and Silverleaf shall cause any of its subsidiaries or affiliates involved in such term securitization to abide by such requirement). Such inclusion shall be at a release price not less than the greater of (i) the allocable principal amount advanced against such Timeshare Loans under the t erm securitization plus all accrued and unpaid interest on such Timeshare Loans as of the date of purchase and (ii) the amount necessary to be received by the Purchaser and allocated as Available Funds such that, after giving effect to the release and transfer of such Timeshare Loans, no Borrowing Base Deficiency under the Notes (or under the Class A Notes or Class B Notes, following the S&P Rating Restructuring) would exist.”

 

(c)    Exhibit B, “Eligibility Criteria” is hereby amended by

 

(i)    replacing clause (d) thereof, currently reading

 

“(d)    as of the related Cutoff Date, no principal or interest due with respect to the Timeshare Loan is thirty (30) days or more delinquent;”

in its entirety with the following:

 

“(d)    as of the related Cutoff Date (i) at least six (6) consecutive Scheduled Receivable Payments on the Timeshare Loan shall have been received (in each case in the full amount and not more than thirty (30) days past the due date) and (ii) no principal or in terest due with respect to the Timeshare Loan is thirty (30) days or more delinquent;”

 

and

 

(ii)    replacing clause (iii) thereof, currently reading

 

“(iii) The Obligor had a FICO Score of at least 500 at the time such Obligor purchased the related Timeshare Property (except with respect to Obligors for whom no FICO score is available, to the extent permitted under clause (v) of the definition of “Overconcentration Amount”).”

 

in its entirety with the following:

 

“(iii) The Obligor had a FICO Score of at least 500 at the time such Obligor purchased the related Timeshare Property.”

 

(d)    The following definitions are hereby added to Annex A, to appear in correct alphabetical order:

“Class A Notes” has the meaning assigned to such term in Section 7.02(b) of the Note Purchase Agreement.

 

“Class B Notes” has the meaning assigned to such term in Section 7.02(b) of the Note Purchase Agreement.

 

“Required Restructuring Event” has the meaning assigned to such term in Section 7.02(b) of the Note Purchase Agreement.

 

“S&P Rating Restructuring” has the meaning assigned to such term in Section 7.02(b) of the Note Purchase Agreement.

 

(e)    The definition of “Funding Termination Event” in Annex A is hereby amended by deleting the “and” appearing before clau se (vii) thereof and adding the following after clause (vii) and before the ending period:

“; (viii) the failure of any of Silverleaf or the Purchaser to comply with its undertakings in respect of obtaining a rating of the Notes set forth in Section 7.02(a) of the Note Purchase Agreement or to effect the S&P Rating Restructuring described in Section 7.02(b) of the Note Purchase Agreement or to procure the ratings on the Class A Notes and Class B Notes described in Section 7.02(c) of the Note Purchase Agreement, in each case by the respective dates required in such Section 7.02(a) and, in respect of the S&P Rating Restructuring and procurement of ratings on the Class A Notes and Class B Notes, Section 7.02(c), as applicable); and (ix) the failure of any of Silverleaf or the Purchaser to comply with their respective undertakings concernin g future term securitizations as set forth at Section 7.3 hereof.”

 

(f)    The definition of “Net Spread” in Annex A is amended by replacing the phrase in clause (x) thereof, currently reading

 

“(x) weighted average Timeshare Loan Rate of the Eligible Timeshare Loans minus”

 

in its entirety with the following:

 

“(x) weighted average Timeshare Loan Rate of the Eligible Timeshare Loans included in the determination of Net Eligible Receivable Balance minus”.

 

(g)    The definition of “Note Interest Rate” in Annex A is amended by replacing the proviso at the end of such definition, currently reading

 

“provided, however, that the Note Interest Rate will in no event be higher than the maximum rate permitted by law”

 

in its entirety with the following:

 

“provided, however, that the Note Interest Rate will in no event (A) be less than 6.00% per annum (or 6.75% per annum, following a failure to obtain the rating of the Notes described in Section 7.02(a) of the Note Purchase Agreement or to effect the S&P Rating Restructuring described in Section 7.02(b) of the Note Purchase