SILVERLEAF RESORTS INC
2ND AMENDMENT TO AMENDED/RESTATED RECEIVABLES LOAN
<DOCUMENT>
<TYPE>EX-10.1
<SEQUENCE>7
<FILENAME>d00253exv10w1.txt
<DESCRIPTION>2ND AMENDMENT TO AMENDED/RESTATED RECEIVABLES LOAN
<TEXT>
<PAGE>
                                                                    EXHIBIT 10.1



            SECOND AMENDMENT TO AMENDED AND RESTATED RECEIVABLES LOAN
                             AND SECURITY AGREEMENT

                  THIS SECOND AMENDMENT TO AMENDED AND RESTATED RECEIVABLES LOAN
AND SECURITY AGREEMENT ("Second Amendment") dated April 30, 2002, is made by and
between Silverleaf Resorts, Inc., a Texas corporation f/k/a Silverleaf Vacation
Club, Inc., f/k/a Ascension Capital Corporation, successor by merger to
Ascension Resorts, Ltd., a Texas limited partnership d/b/a Silverleaf Resorts,
Ltd. ("Borrower"), whose address is 1221 Riverbend, Suite 120, Dallas, Texas
75247, and Heller Financial, Inc., a Delaware corporation ("Agent" and
"Lender"), as a Lender and as Agent for all Lenders and such financial
institutions as are or hereafter become parties to this Loan Agreement as
Lenders, whose address is 500 West Monroe Street, Chicago, Illinois 60661.

                                    RECITALS

         A. WHEREAS, Borrower and Lender entered into that certain Loan and
Security Agreement dated as of October 11, 1994 (the "Original Loan Agreement",
together with the amendments and restatements described below shall be
collectively referred to as the "Loan Agreement") pursuant to which Lender made
Borrower a Five Million Dollar ($5,000,000) revolving receivables loan ("Loan").

         B. The Loan was modified and increased by an additional Five Million
Dollars ($5,000,000) to Ten Million Dollars ($10,000,000) pursuant to the Loan
Modification Agreement between Borrower and Lender dated April 19, 1995.

         C. The Loan was amended to reflect the merger of the Borrower into its
general partner pursuant to the Amendment to Loan and Security Agreement between
Borrower and Lender dated December 6, 1995.

         D. The Loan was modified and increased by an additional Five Million
Dollars ($5,000,000) to Fifteen Million Dollars ($15,000,000) pursuant to the
Amended and Restated Loan and Security Agreement between Borrower and Lender
dated December 27, 1995.

         E. The Loan was amended to revise the procedure for making Advances and
for funding option pursuant to the Amendment to Amended and Restated Loan and
Security Agreement between Borrower and Lender dated February 28, 1996
("February 1996 Amendment").

         F. The Loan was modified and increased by an additional Ten Million
Dollars ($10,000,000) to Twenty-five Million Dollars ($25,000,000) pursuant to
the Amendment to Amended and Restated Loan and Security Agreement ("Second
Restated Agreement") between Borrower and Lender dated August 15, 1996.

         G. The Loan was amended to add provisions regarding biennial timeshare
interests pursuant to a letter agreement between Borrower and Lender dated March
31, 1997.




                                      -1-
<PAGE>

         H. The Loan was modified and increased by an additional Fifteen Million
Dollars ($15,000,000) to Forty Million Dollars ($40,000,000) pursuant to the
Second Amendment to Amended and Restated Loan and Security Agreement dated
October 31, 1997 ("October 31, 1997 Amendment").

         I. The Loan was modified by the Amended and Restated Receivables Loan
and Security Agreement dated September 1, 1999 ("September 1, 1999 Amendment")
to, among other things, increase the Loan to Seventy Million Dollars
($70,000,000) less Advances outstanding under the Ten Million Dollar
($10,000,000) Inventory Loan of even date therewith ("Inventory Loan") and to
provide for other Lenders to participate in the Loan and to join in and consent
to the terms and conditions of this Loan Agreement and for Lender to act as
Agent on behalf of such other Lenders and on behalf of Lender who shall also be
deemed a Lender hereunder.

         J. The Loan was further modified by the First Amendment to Amended and
Restated Receivables Loan and Security Agreement dated March 20, 2000 ("March
20, 2000 Amendment") to, among other things, modify the advance rates on certain
Collateral.

         K. Due to the existence and continuation of certain Events of Default,
Heller Financial, Inc. ("Heller"), Union Bank of California, N.A. ("UBOC") and
Borrower entered into that certain Forbearance Agreement dated April 27, 2001
(the "Forbearance Agreement") pursuant to which Borrower acknowledged such
Specified Events of Default and Heller, Agent and the Co-Lender as defined
therein agreed to temporarily forbear in any enforcement action conditioned upon
certain matters set forth therein including, but not limited to, Borrower's
acknowledgment that it has no rights to further Advances under this Loan and
that the obligations of Co-Lenders to make Advances hereunder terminated.

         L. Borrower and Lenders have entered into that certain First Amendment
to Forbearance Agreement dated December 31, 2001 ("First Amendment to
Forbearance Agreement") for the purpose of providing for, among other things,
the extension of the forbearance period as set forth under the Forbearance
Agreement.

         M. Borrower and Lenders have entered into that certain Second Amendment
to Forbearance Agreement dated February 12, 2002 ("Second Amendment to
Forbearance Agreement") for the purpose of providing for, among other things,
the extension of the forbearance period as set forth under the Forbearance
Agreement, as amended.

         N. Agent on behalf of Lenders has entered into that certain Amended and
Restated Intercreditor Agreement with Sovereign and Textron dated April 30, 2002
(the "Intercreditor Agreement").

         O. The parties desire to amend and modify the Loan further to provide
for, among other things, the amendment of certain terms in respect of the
Financed Notes Receivable under the Loan, as set forth hereinbelow.




                                      -2-
<PAGE>

         NOW, THEREFORE, in consideration of the foregoing premises and the
agreements, provisions and covenants herein contained, Borrower and Lender agree
as follows:

         1. RECITALS. The above recitals are true and correct and are
incorporated herein.

         2. INCORPORATION. The Exhibits and Schedules attached hereto are
incorporated herein and made a part hereof.

         3. DEFINITIONS. All capitalized terms not defined herein shall have the
meanings ascribed to them in the Loan Agreement, as amended, modified and
restated.

         4. SECTION 1.1 (a) OF THE LOAN AGREEMENT IS AMENDED AS FOLLOWS:

         Notwithstanding anything stated to the contrary in the Loan Agreement,
Availability under the Loan is zero (0) and no Unused Line Fee is payable by
Borrower. Borrower acknowledges that all obligations to make Advances hereunder
terminated on April 27, 2001 pursuant to the Forbearance Agreement and Lenders
and Agent are not obligated to make any Advances to Borrower.

         5. SECTION 1.5(b)(II) OF THE SEPTEMBER 1, 1999 AMENDMENT IS HEREBY
DELETED AND REPLACED WITH THE FOLLOWING:

         INELIGIBLE FINANCED NOTE RECEIVABLE; VIOLATION OF OAK N' SPRUCE
LIMITATION. If at any time after the expiration of the Revolving Period a
Financed Note Receivable ceases to be an Eligible Note Receivable or if at any
time the aggregate amount of Advances outstanding under this Loan Agreement and
the Inventory Loan Agreement, as amended and restated, secured by assignments of
Assignments of Beneficial Interests at Oak N' Spruce Resort exceeds $5,000,000
(the "Oak N' Spruce Limitation"), Borrower shall, within five (5) Business Days
after notice, either (A) prepay the Loan in an amount equal to the balance due
under such ineligible Financed Note Receivable, or (B) deliver to Agent one (1)
or more Eligible Notes Receivable (depending on which type of Financed Note
Receivable has become ineligible) having an outstanding aggregate principal
balance equal to or in excess of the outstanding principal balance of such
ineligible Financed Note Receivable; provided, however, to the extent that the
aggregate amount of Advances then outstanding is equal to or less than the sum
of eighty-five percent (85%) of the principal balance of all Eligible Notes
Receivable, including, but not limited to, such replacement Eligible Notes
Receivable, then no prepayment or replacement shall be required by Borrower and
the Financed Note Receivable shall continue to be an Eligible Note Receivable,
or (C) with respect to the Oak N'Spruce Limitation, repay that portion of the
Loan, the Inventory Loan or the Supplemental Loan as determined by Agent, in its
sole and absolute discretion, secured by assignments of Assignments of
Beneficial Interests in excess of $5,000,000. Thereafter, at Borrower's request,
Agent shall return such ineligible Note Receivable to Borrower and, within five
(5) days of Agent's receipt from Borrower of a completed assignment relating to
such Note Receivable and the Mortgage securing the same, in form acceptable to
Agent substantially in the





                                      -3-
<PAGE>

form attached hereto as EXHIBIT A, Agent shall execute such instrument and
return it to Borrower.

         6. SECTION 5.4 OF THE SEPTEMBER 1, 1999 AMENDMENT IS HEREBY AMENDED AS
FOLLOWS:

         Notwithstanding anything stated to the contrary herein, each Lender
under this Loan Agreement shall have the same rights as Agent to audits,
inspections, and investigations as provided in this Section 5.4.

         7. SECTION 5.5 OF THE SEPTEMBER 1, 1999 AMENDMENT IS HEREBY AMENDED AS
FOLLOWS:

         Notwithstanding anything stated to the contrary herein, Borrower shall
deliver to each Lender, concurrently with its delivery to Agent, all information
and reports required to be delivered to Agent pursuant to this Section 5.5.

         8. SECTION 6.4 OF THE SEPTEMBER 1, 1999 AMENDMENT IS HEREBY DELETED AND
REPLACED WITH THE FOLLOWING:

                  COLLATERAL. (a) Borrower shall not take any action (nor permit
or consent to the taking of any action) which might reasonably be anticipated to
impair the value of the Collateral or any of the rights of Agent or Lenders in
the Collateral. Borrower shall not (i) modify or amend any of the Pledged
Documents without Agent's prior written consent except that Borrower shall be
permitted to modify up to (1) 15% of the Notes Receivable which are to be
pledged to Agent by reducing the interest rate charged and/or (2) 20% of the
Notes Receivable which are to be pledged to Agent by extending the term of the
Notes Receivable beyond 84 months so long as (a) no Financed Notes Receivable
shall have been modified more than two times; (b) all Financed Notes Receivable
have a weighted average interest rate of at least 13.75%; (c) no term exceeds
120 months; (d) no more than 20% of all Financed Notes Receivable have a term
exceeding 84 months; (e) at such time as 10% of the Financed Notes Receivable
constitute Notes Receivable which have been modified as permitted hereunder any
additional modified Notes Receivable to be pledged to Agent shall be subject to
the further requirement that the Purchasers under such modified Notes Receivable
to be pledged to Agent shall have made two (2) timely and consecutive monthly
payments; (f) no additional modified Notes Receivable shall be pledged to Agent
after the expiration of the Revolving Period except in replacement of a modified
Financed Note Receivable which has become ineligible; (g) no unmodified Financed
Note Receivable which becomes ineligible may be replaced with a modified Note
Receivable; and (h) there shall be no limit on assumptions of Notes Receivable
provided the purchaser has made a 10% down payment, or (ii) grant extensions of
time for the payment of, compromise for less than the full face value, release
in whole or in part any Purchaser liable for the payment of, or allow any credit
whatsoever except for the amount of cash to be paid upon, any Collateral or any
instrument or document representing the Collateral.




                                      -4-
<PAGE>

                  (b) If a Note Receivable is a newly originated Eligible Note
Receivable which is replacing an existing Eligible Note Receivable pledged as
Collateral under the Loan Agreement and the proceeds have been used to finance
the purchase of an Interval which is being upgraded by the consumer borrower to
a more expensive Interval, then (a) the principal balance of the existing
Eligible Note Receivable which is being upgraded may still be included for
purposes of calculating the Availability for a period of time expiring on the
earlier to occur of (i) the 31st day after the consumer documents effecting the
upgrade have been executed or (ii) the date on which any payment on such
Eligible Note Receivable becomes thirty (30) or more days past due, and (b) on
or before the second (2nd) Business Day after the expiration of the statutory
rescission period in connection with any consumer documents executed effecting
any upgrade involving an Eligible Note Receivable and in any event within ten
(10) days of such upgrade, Borrower shall deliver to Lender or its designee the
original of the new promissory note executed in connection with such upgrade
duly endorsed in blank by Borrower and Borrower will cause all payments made
with respect to such new promissory note to be forwarded to the Lockbox.

                  (c) SECURITY INTEREST IN ALL PLEDGED NOTES RECEIVABLE AND
INTERVALS. Borrower acknowledges and agrees that each of Lenders hereunder,
Heller (with respect to the Inventory Loan and the Supplemental Loan), Textron
and Sovereign has been and is hereby granted a security interest in all of
Borrower's Notes Receivable and Intervals securing the Loan Agreement, the
Inventory Loan Agreement, as amended and restated, the Textron Facility, and the
Sovereign Facility. As consideration for Lenders' and Agent's agreements under
this Loan Agreement and the Inventory Loan Agreement, as amended and restated,
Borrower agrees that to secure the payment and performance of the Inventory Loan
Agreement, as amended and restated, and the Loan Agreement, Borrower does hereby
unconditionally and irrevocably assign, pledge and grant to Lenders and Heller
(with respect to the Inventory Loan and the Supplemental Loan), (i) a second
priority continuing security interest and lien in and to the right, title, and
interest of Borrower in all of Borrower's Notes Receivable and Intervals pledged
to Sovereign as Primary Secured Lender, and (ii) a second priority continuing
security interest and lien in and to the right, title, and interest of Borrower
in all of Borrower's Notes Receivable and Intervals pledged to Textron as
Primary Secured Lender, and all proceeds, profits, extensions, additions,
improvements, betterments, renewals, substitutions and replacements of the
foregoing (the "Second Priority Collateral"). Borrower further acknowledges and
agrees that upon repayment in full of the Textron Facility and/or the Sovereign
Facility, Lenders' security interest in the Second Priority Collateral securing
such facilities shall automatically become a first priority security interest
securing the outstanding principal balance, interest and all other payment
obligations under the Loan Agreement, and Borrower shall take such steps as
Lenders and Agent may request to deliver such collateral to Agent on behalf of
Lenders and to confirm Lenders' first priority security interest therein.
Borrower, Agent and Lenders acknowledge and agree that Borrower has assigned,
pledged, and granted to Textron and Sovereign equal second priority continuing
security interest and lien (subordinated in priority and interest only to
Lenders) in and to the right, title, and interest of Borrower in all of
Borrower's Notes Receivable pledged to Lenders as Primary Secured Lenders.
Lenders shall have a continuing security interest in all of Borrower's Notes
Receivable and Intervals pledged to Lenders, including all Financed Notes
Receivable, all ineligible





                                      -5-
<PAGE>

Notes Receivable in the Ineligible Note Portfolio, and any Notes Receivable or
Intervals pledged to Textron or Sovereign, and, subject to the Intercreditor
Agreement, Lenders and Agent may collect all proceeds derived from such
Intervals and all payments made under or in respect of all such pledged Notes
Receivable, including, without limitation, Eligible Notes Receivable that are or
may become ineligible, until any of the same may be released by Lenders and
Agent, if at all, pursuant to this Loan Agreement. Borrower acknowledges and
agrees that, pursuant to the foregoing terms contained in this Section, each of
Agent (in respect of this Loan), Heller (in respect of the Inventory Loan and
the Supplemental Loan), Textron and Sovereign shall be deemed to hold in
possession as agent and on behalf of each of the other lenders all of Borrower's
Notes Receivable pledged to such lender (or, as the case may be, Lenders) as
Primary Secured Lender(s) and upon the full payment of the outstanding principal
balance, interest and all other payment obligations by Borrower to such Primary
Secured Lender(s) under the Loan, the Inventory Loan, the Supplemental Loan, the
Textron Facility, or the Sovereign Facility, as the case may be, such Primary
Secured Lender(s) may, in accordance with the allocation and distribution
priority of the Loan Agreements of such Primary Secured Lender(s), at Borrower's
sole cost and expense deliver possession to the remaining lenders, whose loans
to Borrower have not been repaid in full, all of Borrower's Notes Receivable
pledged to such Primary Secured Lender(s). Pursuant to the foregoing and
notwithstanding anything stated to the contrary, Borrower further acknowledges
and agrees that Lenders and Agent, upon the full repayment of the outstanding
principal balance, interest and all other payment obligations under the Loan,
the Inventory Loan and the Supplemental Loan, shall not be obligated to deliver
possession to Borrower of the Financed Notes Receivable pledged by Borrower to
Lenders to secure the Loan and in Agent's or each Lender's possession.
Notwithstanding anything heretofore to the contrary, unless and until an Event
of Default shall occur Borrower shall retain possession of and collect all
payments under or in respect of all Notes Receivable in the Ineligible Note
Portfolio. Each of Lenders and Agent agrees that it will not file or record a
financing statement with respect to any Financed Note Receivable, except to the
extent that Lenders are or become Primary Secured Lenders with respect to such
Note Receivable.

                  (d) INELIGIBLE NOTE PORTFOLIO. In addition to the other
Collateral and as consideration for Lenders' agreements herein, Borrower agrees
that to secure the payment and performance of the Loan, Borrower does hereby
unconditionally and irrevocably assign, pledge and grant to Lenders hereunder,
together with Heller (in respect of the Inventory Loan and the Supplemental
Loan), Textron and Sovereign (as more particularly described in the
Intercreditor Agreement), a first priority continuing security interest and lien
in and to the right, title, and interest of Borrower in the Ineligible Note
Portfolio, which shall include the notes and mortgages as set forth on the
attached SCHEDULE G, and all proceeds, profits, extensions, additions,
improvements, betterments, renewals, substitutions and replacements of the
foregoing (collectively, the "Ineligible Note Portfolio"). To perfect the
security interest of Lenders in the Ineligible Note Portfolio, Borrower agrees,
subject to Lenders' prior approval, to execute and cause to be filed, at
Borrower's sole cost and expense, UCC-1 financing statement(s) with the
appropriate state and local governmental authorities as requested by Lenders and
Borrower, as agent and on behalf of Lenders, Textron and Sovereign, unless and
until an Event of Default shall occur, shall retain in its possession of and
collect all payments under or in respect of all Notes Receivable in the
Ineligible Note Portfolio. By executing this Second Amendment, Borrower




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<PAGE>

acknowledges and agrees that it is holding such Notes Receivables as bailee and
agent for the Lenders. Borrower shall hold and designate such Notes Receivable
and related Mortgages in a manner which clearly indicates that they are being
held by Borrower as bailee on behalf of Lenders. Upon the occurrence of an Event
of Default, Borrower shall promptly deliver to Textron, as agent for Lenders,
Sovereign and Textron, all original Notes Receivable comprising the Ineligible
Note Portfolio, the related Mortgages and the documents listed on SCHEDULE G
attached hereto and with respect thereto and thereafter Textron, as agent for
Lenders, Sovereign and Textron, shall have the right to collect all proceeds
therefrom and apply the same to payment of the Indebtedness as set forth in the
Intercreditor Agreement.

         Borrower also shall execute and deliver in escrow to Textron as agent
and on behalf of Lenders, Textron and Sovereign all appropriate Assignments of
Mortgage as requested by Lenders, Textron and Sovereign, in the form attached
hereto as SCHEDULE G and as approved by Lenders, Textron and Sovereign at their
sole and absolute discretion, assigning equally to each of Lenders, Textron and
Sovereign all of Borrower's rights, title and interests in all of the mortgages
relating to the Notes Receivable in the Ineligible Note Portfolio. Borrower
further agrees to promptly execute and deliver modifications or additional
Assignments of Mortgage requested by Lenders, Textron and Sovereign in order to
continue the security interests of Lenders, Textron and Sovereign in the
Ineligible Note Portfolio. Borrower acknowledges and agrees that upon a Default
or an Event of Default under this Loan, the Inventory Loan, the Supplemental
Loan, the Textron Facility or Sovereign Facility, Textron, or a designee as
designated by Lenders, Textron and Sovereign pursuant to the terms of the
Intercreditor Agreement, shall have the right to automatically record, at
Borrower's sole cost and expense, all such Assignments of Mortgage executed by
Borrower and delivered to Textron in accordance with the terms of this Section.
Upon a Default or Event of Default under the Loan, the Inventory Loan, the
Supplemental Loan, the Textron Facility or Sovereign Facility, Borrower shall
immediately deliver possession of the Ineligible Note Portfolio and all
documents relating thereto to Textron as agent on behalf of Lenders, Textron and
Sovereign, as more particularly described in the Intercreditor Agreement.

         Lenders' security interest and rights with respect to the Shared
Collateral other than the Collateral pledged to Lenders as Primary Secured
Lenders are subject to the terms of the Intercreditor Agreement. In the event of
any conflict between the terms hereof and the Intercreditor Agreement regarding
the Shared Collateral other than the Collateral pledged to Lenders as Primary
Secured Lenders, the terms of the Intercreditor Agreement shall govern.
Notwithstanding anything stated herein or stated in the Intercreditor Agreement,
no provision contained herein or in the Intercreditor Agreement shall be
construed to permit Sovereign, Textron or any lender other than Lenders to
interfere with Lenders' rights, security interests, and remedies with respect to
any Collateral pledged to Lenders as Primary Secured Lenders. So long that any
indebtedness or obligations from Borrower to Lenders remain outstanding under
the Loan Agreement remains outstanding, Lenders shall have the sole and absolute
discretion to perfect, maintain, protect and enforce their security interests,
and exercise their remedies, sell or otherwise dispose of the Collateral pledged
to Lenders as Primary Secured Lenders. Lenders may exercise their discretion
with respect to exercising or refraining from exercising any of their rights and
remedies or taking any enforcement action with respect to the





                                      -7-
<PAGE>

Collateral where Lenders are Primary Secured Lenders, and Borrower shall not
permit Textron, Sovereign or any lender other than the Lenders to take an
enforcement action against the Collateral pledged to Lenders as Primary Secured
Lenders.

                  (e) MONTHLY REPORTS. So long as any indebtedness or obligation
remains outstanding under the Loan, the Inventory Loan or the Supplemental Loan,
Borrower shall provide to each Lender on a monthly basis a report which shall
indicate, among other things, the conformance of the Borrower's business in
respect to the Business Plan and any variance from the Business Plan. Such
monthly report for each month shall be delivered to each Lender no later than
the 15th day of the immediately following month.

                  9. ALLOCATION OF SHARED COLLATERAL. Notwithstanding anything
stated to the contrary, Borrower and Lenders agree that upon a sale or other
disposition of any Collateral cross-collateralized to secure the Loan, the
Inventory Loan, the Supplemental Loan, the Textron Facility, and the Sovereign
Facility (the "Shared Collateral") or the exercise of Textron's, Sovereign's
and/or Lenders' remedies following the occurrence of an Event of Default, the
proceeds derived from such Shared Collateral (which Shared Collateral shall not
include the Existing Real Property Collateral described in the Intercreditor
Agreement) shall be allocated as follows:

                  (a) With respect to any Shared Collateral where Lenders are
Primary Secured Lenders, proceeds derived from such Shared Collateral shall be
applied (A) first toward repayment of any outstanding balance under the loan
facilities where Lenders, individually or collectively, are Primary Secured
Lenders, (B) next toward the Inventory Loan or the Supplemental Loan, and (C)
any remaining proceeds thereafter will be applied against any outstanding
balance under the Loan, and (D) then as provided in the Intercreditor Agreement.

                  (b) With respect to any Shared Collateral where Lenders are
not Primary Secured Lenders, any remaining proceeds following application
against the indebtedness of Borrower to such Primary Secured Lender that are
allocated to Lenders pursuant to the terms of the Intercreditor Agreement shall
be applied (A) first toward repayment of any outstanding balance under the
Inventory Loan or the Supplemental Loan, and (B) any remaining proceeds
thereafter will be applied against any outstanding balance under the Loan, and
(C) then as provided in the Intercreditor Agreement.

                  (c) With respect to any Shared Collateral securing the
Inventory Loan and where Heller is the Primary Secured Lender, any remaining
proceeds following application against the indebtedness of Borrower to Heller
under the Inventory Loan shall be applied (A) first toward repayment of any
outstanding balance under the Supplemental Loan, and (B) any remaining proceeds
thereafter will be applied against any outstanding balance under the Loan, and
(C) then as provided in the Intercreditor Agreement.

                  (d) With respect to any Shared Collateral securing the
Supplemental Loan, and where Heller is the Primary Secured Lender, Borrower
agrees that any remaining proceeds





                                      -8-
<PAGE>

following application against the indebtedness of Borrower to Heller under the
Supplemental Loan shall be applied (A) first toward repayment of any outstanding
balance under the Inventory Loan, and (B) any remaining proceeds thereafter will
be applied against any outstanding balance under the Loan, and (C) then as
provided in the Intercreditor Agreement.

         10. FINANCIAL COVENANTS.

                  (a) SECTION 5.8 OF THE SEPTEMBER 1, 1999 AMENDMENT, AS
AMENDED, IS HEREBY REPLACED IN ITS ENTIRETY BY THE FOLLOWING: Borrower shall at
all times have and maintain a Tangible Net Worth in an amount which shall not be
less than an amount equal to (A) the greater of (1) $100,000,000 or (2) an
amount equal to 90% of the Tangible Net Worth of Borrower as of September 30,
2001 plus (B) one hundred percent (100%) of the aggregate amount of proceeds
received by Borrower after January 1, 2002 in connection with (1) each issuance
by Borrower of any class or classes of capital stock after January 1, 2002 and
(2) each incurrence of Indebtedness after January 1, 2002, other than
Indebtedness which shall be the most senior Indebtedness of Borrower plus (C)
one hundred percent (100%) of the aggregate amount of net income (calculated in
accordance with GAAP) of Borrower after January 1, 2002.

                  (b) MARKETING AND SALES EXPENSES. Borrower will not permit as
of March 31, 2002 and as of the last day of each calendar quarter thereafter the
ratio of Marketing and Sales Expenses for any calendar quarter, singly and on a
cumulative basis, during the specified period below (the "Reference Period") to
Borrower's net proceeds from the sale of Intervals for such Reference Period to
equal or exceed the ratio set forth opposite such period described in the table
below during such Reference Period:

<Table>
<Caption>
                           PERIOD                             RATIO
                           ------                             -----

<S>                                                           <C>
                           4/1/02 to 12/31/02                 0.550 to 1

                           1/1/03 and thereafter              0.525 to 1
</Table>

                  (c) MINIMUM LOAN DELINQUENCY. Borrower will not permit as of
the last day of each calendar quarter its over 30-day delinquency rate on its
entire Notes Receivable portfolio (including, without limitation, all Eligible
Notes Receivable pledged pursuant to the Textron Facility and the Sovereign
Facility) to be greater than twenty-five percent (25%). If, as of the last day
of each calendar quarter, Borrower's over 30-day delinquency on its entire Notes
Receivable portfolio (including, without limitation, all Eligible Notes
Receivable pledged to Heller under the Inventory Loan Agreement, as amended and
restated, all Notes Receivable pledged to Lenders under the Loan Agreement, and
all Notes Receivable pledged pursuant to the Textron Facility and the Sovereign
Facility) is greater than twenty percent (20%), then Lenders and Agent shall
have the right to conduct an audit, at Borrower's sole cost and expense, of all
of Borrower's Notes Receivable pledged to Lenders under this Loan Agreement, to
Heller under the Inventory Loan and the Supplemental Loan, to Textron under the
Textron Facility and to Sovereign under the Sovereign Facility.




                                      -9-
<PAGE>

                  (d) INTEREST COVERAGE. (i) For the calendar quarter of
Borrower ending June 30, 2002, Interest Coverage Ratio for Borrower shall be at
least 1.1:1, (ii) for the calendar quarter of Borrower ending September 30,
2002, the average of the Interest Coverage Ratio of Borrower of such calendar
quarter and the Interest Coverage Ratio for the immediately preceding calendar
quarter shall be at least 1.1:1, (iii) for the calendar quarter of Borrower
ending December 31, 2002, the average of the Interest Coverage Ratio of Borrower
for such calendar quarter and the Interest Coverage Ratios for the two
immediately preceding calendar quarters shall be at least 1.1:1, (iv) for each
calendar quarter of Borrower beginning with, and including, the calendar quarter
ending March 31, 2003 and for each calendar quarter of Borrower thereafter, the
average of the Interest Coverage Ratio of Borrower for such calendar quarter and
the Interest Coverage Ratios for each of the three immediately preceding
calendar quarters shall be at least 1.25:1. The term "Interest Coverage Ratio"
means with respect to any Person for any calendar quarter, the ratio of (y)
EBITDA for such period less capital expenditures, as determined in accordance
with GAAP, for such period to (z) the interest expense, minus all non-cash items
constituting interest expense for such period.

                  (e) PROFITABLE OPERATIONS. Borrower will not permit
Consolidated Net Income (i) for any fiscal year, commencing with the fiscal year
ending December 31, 2002, to be less than $1.00 and (ii) for any two consecutive
fiscal quarters (treated as a single accounting period ) to be less than $1.00.

         11. SILVERLEAF FINANCE. Lenders and Agent acknowledge and agree that:
(i) the transfer of Notes Receivable to Silverleaf Finance I, Inc. in connection
with the DZ Facility is a true sale and not a financing transaction; (ii)
Lenders and Agent will not file a motion to consolidate Silverleaf Finance I,
Inc. with the Borrower in the event of a bankruptcy of Borrower; and (iii)
Lenders and Agent will not take any affirmative action in support of any such
motion to consolidate.

         12. FILING AUTHORITY. Borrower reaffirms and grants to Lenders and
Agent (by and through Lenders), and its successors as designated by Lenders,
full power and authority to execute, acknowledge, deliver and file any security
agreements and UCC-1 financing statements (and amendments thereto) requested by
Lenders or necessary to perfect the security interest in the Collateral,
including, without limitation, the Second Priority Collateral, granted to
Lenders by Borrower to secure the Loan therewith.

         13. BORROWER CONFIRMATION. Borrower hereby ratifies and confirms that
the Loan Agreement, as amended, modified and restated, and other Loan Documents
as amended herein are in full force and effect and agrees that such Loan
Documents as amended and restated are and continue to be in full force and
effect and enforceable in accordance with their respective terms. Borrower
hereby incorporates by reference all covenants, warranties, and representations
contained in the Loan Documents and reaffirms such covenants, warranties, and
representations as of the day hereof.




                                      -10-
<PAGE>

         14. BORROWER ESTOPPEL. Execution of this Second Amendment by Lenders
shall be without prejudice to Lenders' rights at any time in the future to
exercise any and all rights conferred upon them by any of the Loan Documents in
accordance with their original terms as previously and hereby amended. Neither
this Second Amendment nor any provision hereof or of any other documents given
in connection herewith shall constitute or shall be construed to constitute a
waiver of any default, right, or remedy of Lenders under the Loan Agreement, the
Note or the other Loan Documents subsequent to the date hereof. Any failure by
Lenders at any point in time during the term of the Note or the Loan Agreement,
as amended and restated, to insist upon strict and timely compliance with the
terms and provisions of each such document shall not be deemed a waiver either
expressly or implied by Lenders of any of their rights under any such document
nor shall the same excuse Borrower's obligation to strictly and timely perform
its obligation hereunder and therein.

         15. RELEASE. The Borrower by execution of this Second Amendment hereby
declares that as of this date the Borrower has no claim, set-off, counterclaim,
defense, or other cause of action against Lenders including, but not limited to,
a defense of usury, any claim or cause of action at common law, in equity,
statutory or otherwise, in contract or in tort, for fraud malfeasance,
misrepresentation, financial loss, usury, deceptive trade practice, or any other
loss, damage or liability of any kind, including without limitation any claim
for exemplary or punitive damages arising out of any transaction between
Borrower and Lenders in connection with the Loan Agreement or any of the other
Loan Documents, any security therefore or this Second Amendment, or any document
mentioned herein. Further, to the extent that any such set-off, counterclaim,
defense, or other cause of action may exist or might hereafter arise based on
facts known or unknown which exist as of this date, such set-off, counterclaim,
defense and other cause of action is hereby expressly and knowingly waived and
released by Borrower.

         16. COMPLETE AGREEMENT. There are and were no oral or written
representations, warranties, understandings, stipulations, agreements, or
promises made by either party or by any agent, employee or other representative
of either party pertaining to the subject matter of this Second Amendment which
have not been incorporated into this Second Amendment. This Second Amendment
shall not be modified, changed, terminated, amended, superseded, waived or
extended except by a written instrument executed by the parties hereto. If any
term, comment or condition of this Second Amendment is held to be invalid,
illegal, or unenforceable as to a particular person, entity, or situation and
this Second Amendment will also be enforced to the fullest extent permitted by
law as to any other person, entity, or situation. Except as specifically
modified by the terms of this Second Amendment, the Loan Agreement, the Note and
all the remaining Loan Documents shall not be affected by this Second Amendment
and each shall remain in full force and effect. Nothing herein contained shall
be construed to impair Lenders' security under the Loan Agreement or Loan
Documents nor to limit or impair any rights or powers that Lenders now enjoy or
may hereafter enjoy under the Loan Documents for recovery of the Indebtedness
secured hereby.




                                      -11-
<PAGE>

         17. FURTHER ASSURANCES. Borrower agrees to execute such further
documents, instruments and agreements as Lenders through Agent may require from
time to time to effectuate the terms and conditions and understandings of this
Second Amendment.

         18. BORROWER REPRESENTATIONS. Borrower hereby represents and warrants
to Agent and Lenders that:

                  (a) The person executing this Second Amendment on behalf of
the Borrower has full authority to execute this Second Amendment on behalf of
Borrower and to bind Borrower thereby;

                  (b) The execution and delivery by Borrower of this Second
Amendment and the performance thereunder by Borrower has not and will not result
in a breach of or constitute a default under any mortgage, lease, bank loan,
credit arrangement or other instrument or agreement to which either Borrower or
the Collateral securing the Loan may be bound or affected;

                  (c) Borrower is a corporation duly formed, validly existing
and in good standing under the laws of the state of Texas; and

                  (d) The execution, delivery and performance by the Borrower of
this Second Amendment and other Loan Documents as amended as of the date hereof,
have been duly and validly authorized and all consents and approvals which are
necessary for authorization, binding effect, performance, and enforceability of
this Second Amendment and all other Loan Documents have been received.

         19. ADDITIONAL RESORT COLLATERAL. Lenders and Agent acknowledge that
Textron and Sovereign have been and are hereby granted a first priority security
interest and Lien in the Additional Resort Collateral, as set forth on the
attached SCHEDULE B and more particularly described in the Textron Documents and
the Sovereign Documents. As additional consideration for Lenders' and Agent's
agreements in this Second Amendment, Borrower agrees, and shall cause Textron
and Sovereign to agree (as set out in their respective Loan Agreements and in
the Intercreditor Agreement), that upon the occurrence of an Event of Default,
Textron and Sovereign shall collectively, upon approval of the Majority of the
Lenders (as defined in the Intercreditor Agreement), take action to enforce
their rights against the Additional Resort Collateral, subject to the terms and
conditions of the Intercreditor Agreement, provided, however, that the consent
of the non-consenting Lender (for purposes of this Section 19 only, the term
"Lender" shall mean either Textron, Sovereign or Heller (individually in respect
to the Inventory Loan and the Supplemental Loan, and as agent and on behalf of
itself and Union Bank under the Loan), which consent shall not be unreasonably
withheld or delayed, shall be required for any sale or other disposition of all
or any portion of the Additional Resort Collateral if such action would, in the
reasonable determination of the non-consenting Lender, have a material adverse
impact on the Collateral securing the non-consenting Lender's respective Loans
to Borrower. The non-consenting Lender shall be entitled upon its written
request to receive such information from the





                                      -12-
<PAGE>

other Lenders and Borrower as may be reasonably necessary for the non-consenting
Lender to make such determination. In the event a Lender determines that a
decision by the Majority of the Lenders hereunder to sell or otherwise dispose
of all or any portion of the Additional Resort Collateral would, in the
reasonable determination of such non-consenting Lender, have a material adverse
impact on the Collateral securing such non-consenting Lender's respective Loans
to Borrower, such non-consenting Lender shall immediately notify the other
Lenders in writing and shall specify therein the basis for its decision. In such
event, such non-consenting Lender shall cooperate in good faith with the other
Lenders to effectuate such sale or disposition in a manner such that there is no
material adverse impact on the Collateral securing the non-consenting Lender's
respective Loans to Borrower. Notwithstanding the foregoing, any such sale or
disposition shall be conditioned upon the execution and recording in the
appropriate public records of subordination agreements protecting all use rights
of the owners of the Intervals entitled to use of the Additional Resort
Collateral. If the non-consenting Lender does not give such notice within ten
(10) days of the date of the decision of the Majority of the Lenders, the
non-consenting Lender shall be deemed to have waived any right to object to such
decision.

         Notwithstanding anything stated to the contrary herein, in the event
that Textron or Sovereign takes possession or control of the Additional Resort
Collateral, Borrower agrees that the Standby Manager (as defined in the April
___, 2002 Amendment to Inventory Loan) shall be responsible for, among other
things, the marketing, sale, resale and financing of all Intervals at the
related Resort or Resorts on behalf of Lenders, Textron and Sovereign and that
Lenders and Agent shall not be denied access to the amenities, sales centers or
Resort related information reasonably necessary to sell, finance, dispose of or
manage Lenders' Collateral under this Loan, the Inventory Loan and the
Supplemental Loan.

         20. ADDITIONAL ELIGIBLE NOTES RECEIVABLE. Borrower agrees that no
additional Advances shall be made against any Additional Eligible Note
Receivable (as defined in the March 2, 2000 Amendment) and all Additional
Eligible Notes Receivable which become ineligible hereafter shall only be
replaced with Eligible Notes Receivable conforming with the Eligible Notes
Receivable criteria as defined in APPENDIX 1 attached hereto, and provided, that
at all times hereafter the aggregate amount of Advances then outstanding shall
be at all times equal to or less than eighty-five percent (85%) of the principal
balance of all Notes Receivable pledged to Lenders hereunder.

         21. NEGATIVE COVENANTS.

                  (a) LIMITATION ON OTHER DEBT, FURTHER ENCUMBRANCES AND/OR
SECURITIZATION. Borrower will not obtain financing and grant liens with respect
to the Collateral or any of its other assets or property, except as expressly
provided herein. Prior to March 31, 2003, Borrower will not obtain financing and
grant liens with respect to any of Borrower's unpledged Notes Receivable, except
as provided in this Loan Agreement, the Inventory Loan, as amended and restated,
the Textron Facility and the Sovereign Facility, without Agent's and Lenders'
prior written consent, which consent shall not be unreasonably withheld. At any
time after March 31, 2003, Borrower may obtain financing and grant liens with
respect to any of






                                      -13-
<PAGE>

Borrower's unpledged Notes Receivable in an amount not to exceed twenty million
dollars ($20,000,000.00), provided that: (i) no Default or Event of Default has
occurred; and (ii) any such financing does not result in Borrower's failure to
substantially adhere to the Business Plan, as determined by Agent and Lenders in
their sole and absolute discretion. At any time after March 31, 2003, if
Borrower wishes to obtain financing in excess of twenty million dollars
($20,000,000.00) which will be secured by any of Borrower's unpledged Notes
Receivable, Borrower shall obtain Agent's and Lenders' written consent, which
consent shall not be unreasonably withheld. Borrower may obtain unsecured
financing provided: (i) Borrower provides prior written notice to Agent setting
forth the terms and conditions thereof; (ii) Lenders and Agent are provided with
a copy of the loan documents therefor; and (iii) such financing does not result
in Borrower's inability to substantially adhere to the Business Plan, as
determined by Agent and Lenders in their sole and absolute discretion.

              (b) MODIFICATIONS OF TEXTRON DOCUMENTS, DZ DOCUMENTS, BOND HOLDER
EXCHANGE DOCUMENTS, SOVEREIGN DOCUMENTS AND OTHER DEBT INSTRUMENTS. Borrower
shall not amend or modify the Textron Documents, the Sovereign Documents, DZ
Documents, Bond Holder Exchange Documents or the documents evidencing any other
indebtedness of Borrower, nor shall Borrower extend, modify, increase or
terminate the Textron Facility, DZ Facility, the Bond Holder Exchange
Transaction, the Sovereign Facility or any other credit facility or loan,
without the prior written consent of Lenders and Agent, which consent shall not
be unreasonably withheld.

              (c) BUSINESS OPERATIONS. Borrower shall not deviate from or fail
to operate its business in substantial compliance with the Business Plan.

         Failure to comply with the foregoing covenants under this Section shall
constitute an Event of Default.

         22. EFFECT. Except as modified by this Second Amendment, all other
terms and conditions of the Loan Agreement existing as of the date hereof shall
remain in full force and effect.

         23. CONDITIONS PRECEDENT. The following conditions shall have occurred
prior to this Second Amendment becoming effective and binding on Lenders and
Agent:

              (a) APRIL __, 2002 AMENDMENT TO INVENTORY LOAN. The April __, 2002
Amendment to Inventory Loan shall have been executed by Heller and Borrower and
shall have become effective as set forth in Section 8 therein.

              (b) DZ FACILITY. The DZ Letter Agreement shall been approved by
Lenders and Agent, which approval may be withheld at their sole and absolute
discretion, the DZ Letter remains in full force and effect and has not been
amended, modified or rescinded, the DZ Documents shall be satisfactory to
Lenders and Agent at their sole and absolute discretion, and





                                      -14-
<PAGE>

Borrower shall promptly furnish to Lenders and Agent copies of the DZ Documents
upon execution.

         (c) TEXTRON FACILITY AND SOVEREIGN FACILITY MODIFICATION. Borrower
shall deliver to Agent, evidence satisfactory to Agent and Lenders, that the
Textron Facility and the Sovereign Facility have each been modified in a manner
as previously approved by Lenders and Agent and Agent has been provided with
copies of all of the executed Textron Documents modifications and the executed
Sovereign Documents modifications.

         (d) BOND HOLDER EXCHANGE TRANSACTION. The Bond Holder Exchange
Transaction shall have been approved by Lenders and Agent, which approval may be
withheld at their sole and absolute discretion, and have been consummated on or
before March 31, 2002.

         THE TERMS AND PROVISIONS OF THIS SECOND AMENDMENT SHALL NOT BIND
LENDERS AND AGENT UNTIL AND UNLESS THE CONDITIONS SET FORTH IN THIS SECOND
AMENDMENT, INCLUDING WITHOUT LIMITATION, THIS SECTION 23 HEREOF, HAVE BEEN
SATISFIED, AS DETERMINED BY AGENT IN ITS SOLE AND ABSOLUTE DISCRETION. IN THE
EVENT THAT THE DZ FACILITY HAS NOT BEEN CONSUMMATED OR DZ FAILS TO MAKE ITS
FIRST FUNDING REQUIRED UNDER THE DZ FACILITY, OR AGENT DETERMINES, IN ITS SOLE
AND ABSOLUTE DISCRETION, THAT ANY OF THE CONDITIONS SET FORTH IN THIS SECTION
ARE NOT SATISFIED ON OR BEFORE MAY 31, 2002, THEN THIS SECOND AMENDMENT, AND THE
OBLIGATIONS OF LENDERS AND AGENT HEREUNDER, SHALL BE NULL AND VOID IN ALL
RESPECTS AB INITIO. IN SUCH EVENT, THE LOAN AGREEMENT EXISTING PRIOR HERETO AND
THE TERMS AND CONDITIONS THEREIN SET FORTH, AS MODIFIED BY THE FORBEARANCE
AGREEMENT AND THE ORIGINAL INTERCREDITOR AGREEMENT, SHALL CONTINUE TO GOVERN AND
CONTROL BORROWER'S OBLIGATIONS WITH RESPECT TO REPAYMENT IN FULL OF THE
INDEBTEDNESS, AS SUCH TERM IS DEFINED IN THE LOAN AGREEMENT.

         24. REPLACEMENT NOTES RECEIVABLE. Except as may be provided in the
Business Plan, ineligible Notes Receivable shall be replaced with Eligible Notes
Receivable, to the extent available, on a dollar for dollar basis. If Borrower
is unable to deliver Eligible Notes Receivable to replace any ineligible Notes
Receivable, Borrower shall, subject to Agent's prior written consent (which
consent may be withheld at Agent's sole and absolute discretion), deliver
additional Notes Receivable, if available, to Agent to replace the ineligible
Notes Receivable, including such additional Notes Receivable that do not satisfy
the criteria for Eligible Notes Receivable ("Non-Conforming Notes Receivable"),
provided, that no event of default has occurred and is continuing under such
additional Note Receivable. In the event that any Eligible Note Receivable
becomes available thereafter, Borrower shall promptly substitute such Eligible
Note Receivable for the Non-Conforming Note Receivable. Borrower acknowledges
and agrees that Borrower shall only deliver Non-Conforming Notes Receivable to
Agent (on behalf of Lenders), to the extent that Non-Conforming Notes Receivable
are also delivered to Textron and Sovereign pro rata based on the then
outstanding principal balance of their respective loans to Borrower.
Notwithstanding anything stated to the contrary herein, Borrower acknowledges,
confirms and agrees that the aggregate amount of Advances then outstanding under
the Loan Agreement shall be at all times equal to or less than eighty-five
percent (85%) of the principal balance of all Notes Receivable pledged to
Lenders hereunder.




                                      -15-
<PAGE>

         25. AUTHORITY. By execution of this Second Amendment, Union Bank of
California, N.A. hereby reaffirms and grants to Heller Financial, Inc. full
power and authority to enter into the Intercreditor Agreement as agent for and
on behalf of both Lenders, and Heller Financial, Inc. is hereby authorized and
directed to do all acts and execute all instruments in connection with the
Intercreditor Agreement.

         26. WAIVER. On the effective date of this Second Amendment and so long
as each condition precedent set forth in this Second Amendment has been
satisfied, Lenders agree to waive all prior Defaults and Events of Default under
the Receivables Loan, including the Specified Events of Default as described in
the Forbearance Agreement.

         27. COUNTERPARTS. This Second Amendment may be executed in any number
of counterparts, each of which shall be deemed an original and all of which
shall together constitute one and the same instrument.





                          [SIGNATURES ON THE NEXT PAGE]




                                      -16-
<PAGE>
         IN WITNESS WHEREOF, Borrower, Agent and Lenders have caused this Second
Amendment to be executed and delivered by their duly authorized officers
effective as of the date first above written.

                        BORROWER:

                        SILVERLEAF RESORTS, INC.,
                        a Texas corporation


                        By:      /s/ Harry J. White, Jr.
                           ----------------------------------------
                        Name:        Harry J. White, Jr.
                             --------------------------------------

                        Its:   Chief Financial Officer
                            ---------------------------------------
                               Silverleaf Resorts, Inc.

                        AGENT AND LENDER:

                        HELLER FINANCIAL, INC.


                        By:      /s/ Dennis K. Holland
                           ----------------------------------------
                        Name:      Dennis K. Holland
                             --------------------------------------
                        Its:     Senior Vice President
                            ---------------------------------------

                        LENDER:

                        UNION BANK OF CALIFORNIA, N.A.


                        By:      /s/ Daniel J. Isenberg
                            ---------------------------------------
                        Name:       Daniel J. Isenberg
                             --------------------------------------
                        Its:     Vice President
                            ---------------------------------------



                                      -17-
<PAGE>







                                   APPENDIX 1

                               DEFINITION OF TERMS

The following terms used in this Second Amendment are added to the Appendix of
the Loan Agreement and shall have the following meanings:

         ADDITIONAL RESORT COLLATERAL. Shall mean the real and personal
property, now or hereafter acquired by Borrower and listed on SCHEDULE B. For
the avoidance of doubt, "Additional Resort Collateral" shall not include the
promissory notes and other property of Silverleaf Finance I, Inc. that
constitutes "Pledged Assets" under the DZ Documents.

         ASSIGNMENTS OF MORTGAGE. The Assignments of Mortgage executed and
delivered by Borrower in connection with the Ineligible Note Portfolio and
pursuant to the terms of Section 8(d) of this Second Amendment, in the form
attached hereto as SCHEDULE G.

         AVAILABILITY. Pursuant to the Forbearance Agreement, Availability is
zero (0).

         BOND HOLDER EXCHANGE TRANSACTION. The term "Bond Holder Exchange
Transaction" shall mean that certain senior subordinate note holder exchange
transaction on the terms and conditions outlined in that certain Term Sheet
dated October 19, 2001 (the "Bond Holder Exchange Term Sheet"), a copy of which
is attached hereto as EXHIBIT C, and which is to be consummated by the documents
listed on SCHEDULE C hereto (the "Bond Holder Exchange Documents").

         BUSINESS PLAN. The term "Business Plan" shall mean the five (5) year
"Stand Alone" business plan prepared by Borrower, together with the Senior
Lender Advance, attached hereto as SCHEDULE A. The Business Plan includes the
"Impact on Lenders Worksheet" setting forth the amounts to be advanced by each
of Heller (under the Inventory Loan), Textron and Sovereign pursuant to their
respective credit facilities (the "Senior Lender Advance Schedule").

         DZ FACILITY. The term "DZ Facility" shall mean that certain note
purchase facility to be provided by DZ Bank AG Deutsche
Zentral-Genossenschaftsbank Frankfurt Am Main, as agent for Autobahn Funding
Company LLC ("DZ") to Borrower, on the terms outlined in the DZ Letter Agreement
dated December 12, 2001, attached hereto as EXHIBIT D ("DZ Letter Agreement"),
and evidenced by the documents listed on SCHEDULE D hereto (the "DZ Documents").

         ELIGIBLE NOTE RECEIVABLE. Each Note Receivable satisfying all of the
following criteria:



<PAGE>

         (a) Purchaser has made a cash down payment of at least ten percent of
the actual purchase price of the Interval and at least one monthly payment under
the related Note Receivable and no part of such payment has been made or loaned
to Purchaser by Borrower or an Affiliate;

         (b) The weighted average interest rate of all Financed Notes Receivable
is no less than 13.75% per annum;

         (c) No installment is more than thirty (30) days past due on a
contractual basis at the time of assignment to Agent, nor becomes more than
sixty (60) days past due on a contractual basis thereafter;

         (d) The Unit with respect to the Interval purchased has been completed,
developed and furnished in accordance with the purchase contract;

         (e) All amenities for the Resort have been completed and are available
for use by all Purchasers;

         (f) The purchaser is not an Affiliate, shareholder, officer, director
or agent of, related to or employed by Borrower;

         (g) The Note Receivable is free and clear of adverse claims, liens and
encumbrances and is not currently, nor shall it be potentially in the future,
subject to claims of rescission, invalidity, unenforceability, illegality,
defense, offset or counterclaim;

         (h) The Note Receivable is secured by a first priority mortgage or deed
of trust on the purchased Interval or by a first priority perfected security
interest in the related Certificate of Beneficial Interest and an Assignment of
Mortgage and Assignment of Beneficial Interest;

         (i) Subject to the provisions of SCHEDULE 3.2.6.(IV) of this Loan
Agreement, the Mortgage securing a Note Receivable is insured under a mortgagee
title insurance policy acceptable to Agent subject only to the Permitted
Exceptions;

         (j) The Purchaser meets credit standards acceptable to Lenders and
Agent at their sole and absolute discretion and shall have a minimum Fair Isaac
Company (FICO) Credit Bureau Score of at least 550

         (k) No single Purchaser shall have an aggregate outstanding principal
balance due under his/her or its Notes in excess of $36,000;

         (l) Payments are to be in legal tender of the United States;

         (m) The Note Receivable and the Purchase Documents are valid, genuine
and enforceable against the obligor thereunder, and such obligor has not
assigned his or her interest thereunder;



<PAGE>

         (n) At least 90% of the aggregate outstanding principal balance of all
Financed Notes Receivable arises from Purchasers who are U.S. or Canadian
residents and no more than 25% of the Notes Receivable comprising the Collateral
shall be originated from Sales of Biennial Intervals;

         (o) Payments have been made by the obligor thereunder and not by
Borrower or any Affiliate of Borrower on the obligor's behalf; and

         (p) The Interval or Biennial Interval with respect to each Eligible
Note Receivable is subject to a Purchaser Mortgage or to an Assignment of
Mortgage and Beneficial Interest;

         (q) Up to 15% of the Eligible Notes Receivable may be modified to
reduce the interest rate charged in accordance with paragraph 6.4 hereof.

         (r) Up to 20% of the Eligible Notes Receivable may be modified to
extend the term thereof beyond 84 months, but not exceeding 120 months, and in
accordance with paragraph 6.4 hereof.

         (s) Each Eligible Note Receivable shall evidence a self-amortizing loan
and 80% of the Eligible Notes Receivable shall have a term not exceeding 84
months and the remainder shall have a term not exceeding 120 months.

         APRIL 30, 2002 AMENDMENT TO INVENTORY LOAN. That certain Fourth
Amendment to Second Amended and Restated Inventory Loan and Security Agreement
entered into between Heller Financial, Inc. and Borrower dated April 30, 2002.

         MATURITY DATE. August 31, 2004.

         MAXIMUM EXPOSURE. Subject at all times to a limit in the aggregate
amount of the Loan Commitments of all participating Lenders, the lesser of (a)
$70,000,000.00 less Advances outstanding under the Inventory Loan and the
Supplemental Loan or (b) the aggregate amount equal to eighty-five percent (85%)
of the outstanding principal balance of all Eligible Notes Receivable pledged to
Agent for the benefit of the Lenders hereunder.

         PRIMARY SECURED LENDER. The term "Primary Secured Lender" shall mean a
Lender who has been or is hereby granted a first priority security interest by
Borrower in Borrower's Notes Receivable to secure its (or as the case may be,
and its co-lender's or co-lenders') loan(s) to Borrower.

         RESORT(s). The projects as listed and legally described on the attached
SCHEDULE H, including, without limitation, all related common elements, limited
common elements, parking areas and other amenities, as established by the
Declaration.



<PAGE>

         SOVEREIGN FACILITY. The term "Sovereign Facility" shall mean that
certain credit facility provided by Sovereign Bank ("Sovereign") to Borrower
pursuant to the documents listed on SCHEDULE E hereto (the "Sovereign
Documents").

         SUPPLEMENTAL LOAN. That certain $10,000,000 loan facility from Heller
to Borrower under that certain Second Amended and Restated Inventory Loan and
Security Agreement between Borrower and Heller dated March 1, 2001, as modified
and amended, pursuant to which advances to Borrower are made from Heller during
the Supplemental Revolving Period (as defined therein).

         TANGIBLE NET WORTH. Tangible Net Worth means, with respect to any
Person, the amount calculated in accordance with GAAP as: (i) the consolidated
net worth of such Person and its consolidated subsidiaries, plus (ii) to the
extent not otherwise included in such consolidated net worth, unsecured
subordinated debt of such Person and its consolidated subsidiaries, the terms
and conditions of which are reasonably satisfactory to Agent, minus (iii) the
consolidated intangibles of such Person and its consolidated subsidiaries,
including, without limitation, goodwill, trademarks, tradenames, copyrights,
patents, patent allocations, licenses and rights in any of the foregoing and
other items treated as intangible in accordance with GAAP.

         TEXTRON FACILITY. The term "Textron Facility" shall mean that certain
credit facility provided by Textron Financial Corporation ("Textron") to
Borrower pursuant to the documents listed on SCHEDULE F hereto (the "Textron
Documents").



<PAGE>


                                LIST OF EXHIBITS

1.       Exhibit A - Assignment of Note Receivable And The Mortgage
2.       Exhibit C - Bond Holder Exchange Term Sheet


                                LIST OF SCHEDULES

1.       Schedule A - Business Plan
2.       Schedule B - Additional Resort Collateral
3.       Schedule C - Bond Holder Exchange Documents
4.       Schedule D  - Dz Documents
5.       Schedule E - Sovereign Documents
6.       Schedule F - Textron Documents
7.       Schedule G - Assignment of Mortgage
8.       Schedule H - Resorts


</TEXT>
</DOCUMENT>
