SILVERLEAF RESORTS INC
FIRST AMENDMENT TO AMENDED/RESTATED LOAN
<DOCUMENT>
<TYPE>EX-10.4
<SEQUENCE>8
<FILENAME>d11501exv10w4.txt
<DESCRIPTION>FIRST AMENDMENT TO AMENDED/RESTATED LOAN
<TEXT>
<PAGE>

                                                                    Exhibit 10.4

                     FIRST AMENDMENT TO AMENDED AND RESTATED
                 LOAN, SECURITY AND AGENCY AGREEMENT (TRANCHE A)

         THIS FIRST AMENDMENT TO AMENDED AND RESTATED LOAN, SECURITY AND AGENCY
AGREEMENT (TRANCHE A) dated as of December 19, 2003 (the "First Amendment"), is
entered into by and among SILVERLEAF RESORTS, INC., a Texas corporation (the
"BORROWER"), the parties, including TEXTRON FINANCIAL CORPORATION ("TFC"), a
Delaware corporation, which execute and deliver this Agreement in their
respective capacities as lenders hereunder (collectively, the "LENDERS" and
each, individually, a "LENDER"), and TEXTRON FINANCIAL CORPORATION as facility
agent and collateral agent (the "AGENT").

                              W I T N E S S E T H:

         WHEREAS, Borrower was formerly known as ASCENSION CAPITAL CORPORATION
(the "Guarantor"), the successor to ASCENSION RESORTS, LTD., a Texas limited
partnership (the "Original Borrower"), by merger of EQUAL INVESTMENT COMPANY, a
Texas corporation, ASCENSION RESORTS, LTD. and ASCENSION CAPITAL CORPORATION;

         WHEREAS, TFC, Original Borrower and Guarantor were parties to that
certain Loan and Security Agreement dated as of August 15, 1995 (the "Original
Agreement"), pursuant to which the Original Borrower executed its Secured
Promissory Note in favor of Lender in the amount of $5,000,000.00, as amended to
date (the "Original Note");

         WHEREAS, on December 28, 1995 Ascension Resorts, Ltd. was merged into
the Guarantor and Guarantor was thereafter renamed Silverleaf Vacation Club,
Inc.;

         WHEREAS, on December 28, 1995, TFC, Borrower and Guarantor amended the
Original Agreement pursuant to a First Amendment to Loan and Security Agreement
dated as of December 28, 1995 (the "First Amendment to Original Agreement") to,
among other things, evidence TFC's approval of the merger of Ascension Resorts,
Ltd. into Ascension Capital Corporation and to reflect the above-mentioned
merger and name change;

         WHEREAS, on October 31, 1996, TFC and Borrower further amended the
Original Agreement pursuant to a Second Amendment to Loan and Security Agreement
dated as of October 31, 1996 (the "Second Amendment") to, among other things,
increase the amount of the Loan, decrease the interest rate, and extend the
maturity date of the Loan;

         WHEREAS, pursuant to a commitment letter dated January 26, 1999, TFC
and Borrower agreed to further modify the terms of the Original Agreement to,
among other things, increase the amount of the Loan, decrease the interest rate,
extend the maturity date of the Loan and to reflect the change in Borrower's
name to Silverleaf Resorts, Inc.;

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         WHEREAS, TFC and Borrower further amended the Original Agreement
pursuant to a Third Amendment to Loan and Security Agreement dated as of March
31, 1999 (the "Third Amendment") to amend the Agreement as provided in the
January 26, 1999 commitment letter;

         WHEREAS, TFC and Borrower further amended the Original Agreement
pursuant to a Fourth Amendment to Loan and Security Agreement dated as of
December 16, 1999 (the "Fourth Amendment") to, among other things, modify the
definitions of Borrowing Base and Eligible Notes Receivable;

         WHEREAS, TFC and Borrower, as a result of certain Events of Default
under the Original Agreement, entered into that certain Forbearance Agreement
dated as of April 6, 2001 (the "Forbearance Agreement");

         WHEREAS, TFC and Borrower further amended the Original Agreement
pursuant to a Fifth Amendment to Loan and Security Agreement dated as of April
17, 2001 (the "Fifth Amendment") to, among other things, extend the Revolving
Credit Period and to incorporate the terms of the Forbearance Agreement;

         WHEREAS, TFC and Borrower further amended and restated the Original
Agreement in its entirety pursuant to an Amended and Restated Loan, Security and
Agency Agreement (Tranche A) (as amended hereby, the "Loan Agreement") to, among
other things, restructure and modify the Loan, including separating the Loan
into two separate components - the Revolving Loan Component in the original
amount of up to $56,894,400.00 and the Term Loan Component in the original
amount of up to $15,105,600.00; to reduce the Commitment, as defined in the Loan
Agreement, to $63,920,000.00 less the outstanding principal balance of the Term
Loan Component from time to time and to reduce the aggregate Commitment
hereunder, under the Additional Credit Facility and the Tranche C Facility, as
such terms are defined in the Loan Agreement, to $136,000,000.00 less the
outstanding principal balance of the Term Loan Component and the aggregate term
loan component of the Additional Credit Facility and the Tranche C Facility from
time to time; and to replace the Amended Note with: (i) an Amended and Restated
Secured Promissory Note or Notes in the aggregate original principal amount of
$56,894,400.00 in favor of Agent, as agent for each of the Lenders (singly and
collectively the "Revolving Loan Component Note") and (ii) a Secured Promissory
Note or Notes in the aggregate original principal amount of $15,105,600.00 in
favor of Agent, as agent for each of the Lenders (singly and collectively the
"Term Loan Component Note", and together with the Revolving Loan Component Note,
sometimes referred to herein singly and collectively as the "Amended Note");

         WHEREAS, TFC and Borrower amended the Loan Agreement pursuant to a
Letter Amendment dated March 27, 2003 to reinstate the maximum allowable ratio
of Marketing and Sales Expenses to the Borrower's net proceeds from the sale of
Intervals to a ratio of .550 to 1;

         WHEREAS, TFC and Borrower amended the Loan Agreement pursuant to a
Letter Agreement dated September 25, 2003 to exclude the $28,711,000 increase in
Borrower's allowance for doubtful accounts during the quarter ended March 31,
2003 from the calculations of EBITDA, the Interest Coverage Ratio and
Consolidated Net Income under the Loan Agreement and to approve the retirement
of certain subordinated notes with a face value of $7,620,000;

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         WHEREAS, Borrower entered into: (i) a Letter Agreement with TFC dated
November 17, 2003 (the "November Letter Agreement"); (ii) an amendment to the
Heller Documents dated November 21, 2003; and (iii) an amendment to the
Sovereign Documents dated October 1, 2003; each for the purpose of, among other
things, waiving certain Events of Default that may have arisen under the Loan
Agreement, the Heller Documents and the Sovereign Documents described therein,
respectively;

         WHEREAS, TFC and Borrower have agreed to enter into this First
Amendment to the Amended and Restated Loan, Security and Agency Agreement to
amend and modify the Loan Agreement as set forth below;

         WHEREAS, Borrower intends to convey and transfer certain assets to the
SPV, including the SPV Assets, in accordance with the terms of the Silverleaf
Finance II Documents, as such terms are hereafter defined and whereas in
connection with such transfer, the Commitment, as such term is hereafter
defined, shall be reduced as described herein;

         WHEREAS, in connection with the Loans to be made by Lenders pursuant to
the Loan Agreement, Textron Financial Corporation has agreed to act as facility
agent and collateral agent for the other Lenders and to perform such duties with
respect to the Loans as are expressly set forth herein; and

         WHEREAS, all capitalized terms not otherwise defined herein shall have
the meaning ascribed to such term in the Loan Agreement.

         NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree as
follows:

1.       ADDITIONAL RESORT COLLATERAL. Section 1.1(c) is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "(c) ADDITIONAL RESORT COLLATERAL. The term "Additional Resort
                  Collateral" shall mean singly and collectively, the
                  development rights, real property, fixtures and other personal
                  property, including all management agreements for the Resorts,
                  now owned or hereafter acquired by Borrower and described on
                  Schedule 1.1(c) attached hereto. "Additional Resort
                  Collateral" shall not include the promissory notes and other
                  property of Silverleaf Finance I, Inc., that constitute
                  "Pledged Assets" under the DZ Documents OR THE PROMISSORY
                  NOTES AND OTHER PROPERTY OF SILVERLEAF FINANCE II, INC. THAT
                  CONSTITUTE "CONVEYED ASSETS" OR COLLATERAL UNDER THE
                  SILVERLEAF FINANCE II DOCUMENTS."

2.       BUSINESS PLAN. Section 1.1(m) is hereby deleted in its entirety and in
its place instead is substituted the following:

                  "(m) BUSINESS PLAN. The term "Business Plan" shall mean the
                  five (5) year "Stand Alone" business plan, more particularly
                  described as document "BS.IS.02-08.Lender.9-03.NS.1a2",
                  prepared by Borrower and attached TO THE FIRST AMENDMENT as
                  Exhibit F-1. THE BUSINESS PLAN INCLUDES THE "IMPACT ON LENDERS
                  WORKSHEET" SETTING FORTH

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                  THE AMOUNTS TO BE ADVANCED BY TEXTRON (INDIVIDUALLY AND AS
                  AGENT FOR THE LENDERS), HELLER AND SOVEREIGN PURSUANT TO THEIR
                  RESPECTIVE CREDIT FACILITIES (THE "SENIOR LENDER ADVANCE
                  SCHEDULE")."

3.       COLLATERAL. Section 1.1(p) is hereby amended in part to add the
following new paragraphs:

                  "(xiv) THE SILVERLEAF FINANCE II STOCK."

                  "(iv) THE SILVERLEAF FINANCE II SUBORDINATED NOTE."

4.       COMMITMENT. Section 1.1(q) is hereby deleted in its entirety and in its
place instead is substituted the following:

                  "(q) COMMITMENT. The term "Commitment" shall refer singly to
                  the obligation of each Lender to make a Loan or Loans under
                  the Revolving Loan Component to Borrower in an aggregate
                  amount not to exceed the Pro Rata Percentage for each Lender
                  of each Advance and to the obligation of TFC to make a Loan or
                  Loans under the Term Loan Component to Borrower and
                  collectively to all Loans to be made by all Lenders under the
                  Revolving Loan Component and by TFC under the Term Loan
                  Component as provided herein. AFTER GIVING EFFECT TO THE
                  DECEMBER 2003 LOAN PAYDOWN PROVIDED FOR IN SECTION 2.4(a)
                  BELOW, the maximum aggregate Commitment of the Lenders
                  hereunder shall not exceed (i) $44,650,000.00 for the
                  Revolving Loan Component; and (ii) $11,280,000.00 for the Term
                  Loan Component, for a total Commitment under this Agreement of
                  $55,930,000.00. The Commitment and the Maximum Available
                  Amount shall be subject to reduction as provided in Section
                  2.1(a). AFTER GIVING EFFECT TO THE DECEMBER 2003 LOAN PAYDOWN
                  PROVIDED FOR IN SECTION 2.4(a) BELOW, the maximum aggregate
                  Commitment under this Agreement, the Additional Credit
                  Facility and the Tranche C Facility shall be $95,000,000.00
                  for the Revolving Loan Component and $24,000,000.00 for the
                  Term Loan Component, which Commitment shall be reduced as
                  provided in Section 2.1(a)."

5.       DZ FACILITY. Section 1.1(w) is hereby deleted in its entirety and in
its place instead is substituted the following:

                  "(a) DZ FACILITY. The term "DZ Facility" shall mean that
                  certain note purchase facility to be provided by DZ Bank AG
                  Deutsche Zentral-Genossenschaftsbank, as agent for Autobahn
                  Funding Company, LLC ("DZ") to Borrower, on the terms outlined
                  in the DZ Letter Agreement, dated December 12, 2001, as
                  supplemented by that certain letter agreement by and between
                  Borrower and DZ dated February 7, 2002, and attached hereto as
                  Exhibit G, AS MAY BE HEREAFTER AMENDED FROM TIME TO TIME
                  (collectively, the "DZ LETTER AGREEMENT") and evidenced by the
                  documents listed on Schedule 1.1(w) hereto (the "DZ
                  DOCUMENTS")."

6.       EFFECTIVE ADVANCE RATE. Section 1.1(z) is hereby deleted in its
entirety and in its place instead is substituted the following:

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                  "(z) EFFECTIVE ADVANCE RATE. The term "Effective Advance Rate"
                  shall mean the aggregate outstanding principal balance of the
                  Revolving Loan Component and the Term Loan Component divided
                  by the aggregate outstanding principal balance of all Eligible
                  Notes Receivable pledged to Agent hereunder. The Effective
                  Advance Rate shall at no time exceed the "MAXIMUM EFFECTIVE
                  ADVANCE RATE", DETERMINED AS FOLLOWS: (i) 95%; or (ii) SUCH
                  HIGHER RATE AS MAY BE AGREED TO BY TFC IN WRITING IN ITS SOLE
                  AND ABSOLUTE DISCRETION PROVIDED, HOWEVER, THAT THE AGGREGATE
                  OUTSTANDING PRINCIPAL BALANCE OF THE REVOLVING LOAN COMPONENT
                  DIVIDED BY THE AGGREGATE OUTSTANDING PRINCIPAL BALANCE OF ALL
                  ELIGIBLE NOTES RECEIVABLE PLEDGED TO AGENT HEREUNDER WILL NOT
                  EXCEED 75%. In addition, the Effective Advance Rate determined
                  with respect to the aggregate of the Loan, the Additional
                  Credit Facility and the Tranche C Facility (collectively
                  "TFC's Facilities") shall at no time exceed: (i) 95% of the
                  aggregate outstanding principal balance of all Eligible Notes
                  Receivable pledged to TFC, as agent or lender as applicable,
                  under TFC's Facilities; or (ii) SUCH HIGHER RATE AS MAY BE
                  AGREED TO BY TFC IN WRITING IN ITS SOLE AND ABSOLUTE
                  DISCRETION PROVIDED, HOWEVER, THAT THE AGGREGATE OUTSTANDING
                  PRINCIPAL BALANCE OF THE REVOLVING LOAN COMPONENTS OF TFC'S
                  FACILITIES DIVIDED BY THE AGGREGATE OUTSTANDING PRINCIPAL
                  BALANCE OF ALL ELIGIBLE NOTES RECEIVABLE PLEDGED TO AGENT
                  UNDER TFC'S FACILITIES WILL NOT EXCEED 75%."

7.       ELIGIBLE NOTES RECEIVABLE. Section 1.1(bb)(xv) is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "(xv) the maximum remaining principal balance of any such Note
                  Receivable shall not exceed $30,000 and the total maximum
                  remaining principal balance of the Notes Receivable executed
                  by any one Purchaser or other maker shall not exceed $50,000
                  in the aggregate (or such greater amount as may be approved in
                  writing in advance by Agent);"

8.       FACILITY FEE. Section 1.1(ii) is hereby deleted in its entirety and in
its place instead is substituted the following:

                  "(ii) FACILITY FEE. The term "Facility Fee" shall mean the
                  facility fee set forth in the Fee Letter, which shall be
                  payable in accordance with Section 2.7. IN ADDITION TO THE
                  FEES SET FORTH IN THE FEE LETTER, THE FACILITY FEE SHALL
                  INCLUDE A FEE IN THE AMOUNT OF ONE-HALF OF ONE PERCENT (1/2%)
                  OF THE TOTAL AMOUNT OF THE MAXIMUM AGGREGATE COMMITMENT FOR
                  BOTH THE REVOLVING LOAN COMPONENT AND THE TERM LOAN COMPONENT
                  UNDER THIS AGREEMENT, THE ADDITIONAL CREDIT FACILITY, THE
                  TRANCHE C FACILITY AND THE INVENTORY LOAN."

9.       NET SECURITIZATION CASH FLOW. Section 1.1(iii) is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "(iii) NET SECURITIZATION CASH FLOW. All right, title and
                  interest of: (i) Silverleaf Finance I, Inc., a wholly owned
                  subsidiary of Borrower, in any excess cash flow derived from
                  the Notes Receivable sold by Silverleaf Finance I, Inc. to DZ
                  pursuant

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                  to the DZ Documents; and (ii) Silverleaf Finance II, Inc., a
                  wholly owned subsidiary of Borrower, in any excess cash flow
                  derived from the Notes Receivable sold by Borrower to
                  Silverleaf Finance II, Inc. and then sold by Silverleaf
                  Finance II, Inc. to Textron Financial Corporation, as Group
                  Two Lender under the Silverleaf Finance II Documents."

10.      REVOLVING LOAN COMPONENT. Section 1.1(zzz) is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "(zzz) REVOLVING LOAN COMPONENT. Shall mean that portion of
                  the Loan in the amount of $44,650,000.00, AS OF THE FIRST
                  AMENDMENT EFFECTIVE DATE, on the terms and conditions
                  described in Sections 2.1, 2.3, 2.4 and 2.5 hereof, which
                  amount shall be repaid as provided in Section 2.4 and Section
                  2.5(b) hereof."

11.      REVOLVING LOAN TERM. Section 1.1(bbbb) is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "(bbbb) REVOLVING LOAN TERM. Shall mean the period commencing
                  on the Effective Date and ending on March 31, 2006."

12.      TERM LOAN COMPONENT. Section 1.1(rrrr) is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "(rrrr) TERM LOAN COMPONENT. Shall mean that portion of the
                  Loan in the amount of $11,280,000.00, AS OF THE FIRST
                  AMENDMENT EFFECTIVE DATE, on the terms and conditions set
                  forth in Sections 2.2, 2.3, 2.4 and 2.5 hereof, which amount
                  shall be repaid as provided in Section 2.4 and Section 2.5(b)
                  hereof."

13.      DEFINITIONS. Section 1.1 is hereby amended in part to add the following
new paragraphs:

                  "(hhhhh) DECEMBER 2003 LOAN PAYDOWN. SHALL MEAN THE PAYMENT ON
                  THE TERM LOAN COMPONENT AND THE REVOLVING LOAN COMPONENT FROM
                  THE PROCEEDS OF THE TFC CONDUIT LOAN IN ACCORDANCE WITH
                  SECTION 2.4(a)(i)."

                  "(iiiii) FIRST AMENDMENT. SHALL MEAN THAT CERTAIN FIRST
                  AMENDMENT TO AMENDED AND RESTATED LOAN, SECURITY AND AGENCY
                  AGREEMENT (TRANCHE A) DATED AS OF DECEMBER 19, 2003 BY AND
                  AMONG SILVERLEAF RESORTS, INC., A TEXAS CORPORATION, AS
                  BORROWER, THE PARTIES, INCLUDING TEXTRON FINANCIAL
                  CORPORATION, A DELAWARE CORPORATION, AS LENDERS, AND TEXTRON
                  FINANCIAL CORPORATION AS FACILITY AGENT AND COLLATERAL AGENT."

                  "(jjjjj) FIRST AMENDMENT EFFECTIVE DATE. SHALL MEAN THE DATE
                  ON WHICH: (i) THE CLOSING OF THE TFC CONDUIT LOAN OCCURS; AND
                  (ii) AGENT DETERMINES, IN ITS SOLE AND ABSOLUTE DISCRETION,
                  THAT EACH OF THE CONDITIONS SET FORTH IN SECTION 41 OF THE
                  FIRST AMENDMENT HAVE BEEN SATISFIED."

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                  "(kkkkk) SILVERLEAF FINANCE II DOCUMENTS. SHALL MEAN THE SPV
                  LOAN AGREEMENT, THE DEVELOPER TRANSFER AGREEMENT, THE DEMAND
                  NOTES AND ALL OTHER AGREEMENTS OR DOCUMENTS EXECUTED IN
                  CONNECTION WITH THE TFC CONDUIT LOAN, AS EACH MAY BE AMENDED,
                  RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME."

                  "(lllll) SILVERLEAF FINANCE II STOCK. SHALL MEAN ALL EQUITY
                  INTERESTS IN SILVERLEAF FINANCE II, INC., ALL DOCUMENTS,
                  CERTIFICATES OR INSTRUMENTS REPRESENTING ANY OF THE FOREGOING
                  AND ALL CASH, SECURITIES, DIVIDENDS, RIGHTS AND OTHER PROPERTY
                  AT ANY TIME RECEIVED OR RECEIVABLE IN RESPECT OF OR IN
                  EXCHANGE FOR THE FOREGOING, AND ALL PROCEEDS OF THE
                  FOREGOING."

                  "(mmmmm) SILVERLEAF FINANCE II SUBORDINATED NOTE. SHALL MEAN
                  THE SUBORDINATED NOTE, DATED AS OF DECEMBER 19, 2003, PAYABLE
                  BY SPVTO THE ORDER OF SILVERLEAF RESORTS, INC., AND ANY OTHER
                  PROMISSORY NOTE ISSUED IN REPLACEMENT OR RESTATEMENT THEREOF,
                  OR OTHERWISE ISSUED TO EVIDENCE SPV'S OBLIGATION TO PAY THE
                  DEFERRED PURCHASE PRICE OF RECEIVABLES UNDER THE DEVELOPER
                  TRANSFER AGREEMENT WHICH IS PART OF THE SILVERLEAF FINANCE II
                  DOCUMENTS, IN EACH CASE AS AMENDED OR OTHERWISE MODIFIED FROM
                  TIME TO TIME, AND ALL PROCEEDS OF THE FOREGOING."

                  "(nnnnn) SILVERLEAF FINANCE II STOCK AND SUBORDINATED NOTE
                  PLEDGE AGREEMENT. SHALL MEAN THE AGREEMENT IN THE FORM
                  ATTACHED TO THE FIRST AMENDMENT AS EXHIBIT B-1, PURSUANT TO
                  WHICH THE SILVERLEAF FINANCE II STOCK AND THE SILVERLEAF
                  FINANCE II SUBORDINATED NOTE IS PLEDGED TO AGENT, AS AGENT FOR
                  EACH LENDER, AS SECURITY FOR THE LOAN."

                  "(ooooo) SPV. SHALL MEAN SILVERLEAF FINANCE II, INC., A
                  DELAWARE CORPORATION."

                  "(ppppp) SPV ASSETS. SHALL MEAN ALL ASSETS SOLD OR CONVEYED BY
                  BORROWER TO THE SPV PURSUANT TO THE SILVERLEAF FINANCE II
                  DOCUMENTS."

                  "(qqqqq) SPV SUBORDINATION AGREEMENT. SHALL MEAN THAT CERTAIN
                  SUBORDINATION AGREEMENT RELATING TO TFC'S INTEREST IN THE
                  SILVERLEAF FINANCE II STOCK AND THE SILVERLEAF FINANCE II
                  SUBORDINATED NOTE, DATED AS OF DECEMBER 19, 2003 BY AND AMONG
                  TEXTRON FINANCIAL CORPORATION, IN ITS CAPACITY AS LENDER AND
                  AGENT FOR THE LENDERS UNDER THE LOAN DOCUMENTS AND TEXTRON
                  FINANCIAL CORPORATION, IN ITS CAPACITY AS LENDER UNDER THE
                  GROUP TWO DOCUMENTS (AS SUCH TERM IS DEFINED IN THE SPV
                  SUBORDINATION AGREEMENT), AS MAY BE AMENDED, RESTATED OR
                  MODIFIED FROM TIME TO TIME."

                  "(rrrrr) TFC CONDUIT LOAN. SHALL MEAN THAT CERTAIN LOAN
                  FACILITY TO BE PROVIDED BY TEXTRON FINANCIAL CORPORATION
                  ("TFC") TO SPV IN ACCORDANCE WITH THE TERMS OF THE SILVERLEAF
                  FINANCE II DOCUMENTS."

14.      REVOLVING LOAN COMPONENT. Section 2.1(a) is hereby deleted in its
entirety and in its place instead is substituted the following:

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                  "(a) REVOLVING LOAN COMPONENT. Upon the terms and subject to
                  the conditions set forth in this Agreement, each Lender agrees
                  severally, at any time and from time to time during the
                  Revolving Loan Term, to make a loan or loans to Borrower, and
                  Borrower may borrow, repay and reborrow during the Revolving
                  Loan Term, with respect to the Revolving Loan Component only,
                  in an aggregate amount not to exceed at any time the lesser
                  of: (i) each Lender's Pro Rata Percentage of the amount of the
                  Borrowing Base or (ii) the lending limits set forth in section
                  2.1(b) hereof. Notwithstanding anything herein to the
                  contrary, as of the First Amendment Effective Date, the
                  aggregate balance of all Advances shall not exceed
                  $44,650,000.00 (the "Maximum Available Amount"). Borrower's
                  right to receive Advances hereunder shall also be subject to
                  the terms and conditions set forth in that certain
                  Intercreditor Agreement between Lender, Borrower, Heller and
                  Sovereign dated of even date herewith. Borrower acknowledges,
                  confirms and agrees that TFC shall have the right to allocate
                  any request for an Advance hereunder to this Loan, the
                  Additional Credit Facility and/or the Tranche C Facility in
                  such manner as TFC may elect in its sole and absolute
                  discretion. Notwithstanding anything herein to the contrary,
                  Borrower acknowledges, confirms and agrees that it shall not
                  be entitled to receive, nor shall any Lender be required to
                  make, any Advance if and to the extent that: (i) Borrower has
                  failed to substantially adhere to the Business Plan, including
                  the Senior Lender Advance Schedule, as determined by Agent in
                  its sole and absolute discretion; or (ii) the most recent
                  weekly flash report delivered in accordance with Section
                  7.1(h)(xii) hereof (a "Weekly Flash Report"), indicates that
                  Borrower has in excess of five million dollars ($5,000,000) in
                  available unrestricted cash.

                           Borrower acknowledges, agrees and confirms that as
                  provided in the Business Plan, the Commitment for the
                  Revolving Loan Component and the Maximum Available Amount
                  shall be reduced to $39,950,000.00 ON MARCH 31, 2006.

                           On or before the FIRST AMENDMENT EFFECTIVE DATE, the
                  aggregate amount of the Commitment for the Revolving Loan
                  Component provided hereunder, under the Additional Credit
                  Facility and the Tranche C Facility shall be equal to
                  $95,000,000.00. Borrower further acknowledges, confirms and
                  agrees that the aggregate Commitment for the Revolving Loan
                  Component under this Agreement, the Additional Credit Facility
                  and the Tranche C Facility shall be reduced to $85,000,000.00
                  ON MARCH 31, 2006."

15.      INTEREST RATE. Section 2.3 is hereby deleted in its entirety and in its
place instead is substituted the following:

                  "2.3 INTEREST RATE. From and after the Effective Date, with
                  respect to the Revolving Loan Component, including each Loan
                  hereafter made pursuant to Section 2.1(a) hereof, the
                  Revolving Loan Component shall bear interest at the Interest
                  Rate applicable to the Revolving Loan Component as of the date
                  funds are received by Agent as provided in Section 2.1(f)
                  through each Lender's receipt of repayment of the Revolving
                  Loan Component in accordance with Section 2.4 (if received by
                  a Lender later than 1:00 p.m., Eastern Standard Time, then
                  interest accrual shall be through the

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<PAGE>

                  next Business Day following such receipt). From and after the
                  Effective Date, the Term Loan Component shall bear interest at
                  the Interest Rate applicable to the Term Loan Component
                  through TFC'S receipt of payment of the Term Loan Component as
                  provided in Section 2.4. Immediately upon the occurrence of an
                  Event of Default and after the Final Maturity Date (if the
                  Loan is not paid in full on the Final Maturity Date), at TFC's
                  election, in its sole discretion, the entire Loan will bear
                  interest at the Default Rate."

16.      PAYMENTS. The first paragraph of Section 2.4 is hereby deleted in its
entirety and in its place instead is substituted the following paragraph:

                  "2.4     PAYMENTS. From and after the Effective Date, Borrower
                  agrees punctually to pay or cause to be paid to Agent, as
                  agent for each Lender UNDER THE REVOLVING LOAN COMPONENT AND
                  TO TFC AS LENDER UNDER THE TERM LOAN COMPONENT, all principal
                  and interest due under each Note in respect of the Loans.
                  Borrower shall make the following payments on the Loan:"

17.      LOAN PAYDOWN. Section 2.4(a) is hereby deleted in its entirety and in
its place instead is substituted the following:

                  "(a)(i) INITIAL LOAN PAYDOWN. On or before May 31, 2002,
                  Borrower shall make, from the proceeds of the DZ Facility, a
                  payment on the Revolving Loan Component in the amount of
                  approximately $12,274,000. (ii) DECEMBER 2003 LOAN PAYDOWN. ON
                  OR BEFORE THE FIRST AMENDMENT EFFECTIVE DATE, BORROWER SHALL
                  MAKE, FROM THE PROCEEDS OF THE TFC CONDUIT LOAN, A PAYMENT ON
                  THE REVOLVING LOAN COMPONENT IN THE AMOUNT OF APPROXIMATELY
                  $21,857,538.07. ON OR BEFORE THE FIRST AMENDMENT EFFECTIVE
                  DATE, BORROWER SHALL MAKE, FROM THE PROCEEDS OF THE TFC
                  CONDUIT LOAN, A PAYMENT ON THE TERM LOAN COMPONENT IN THE
                  AMOUNT OF APPROXIMATELY $2,647,357.58."

18.      MONTHLY PAYMENTS, TERM LOAN COMPONENT. That portion of Section 2.4(b)
beginning "(2) Term Loan Component..." and ending "...as provided immediately
above.", describing monthly payments under the Term Loan Component, is hereby
deleted in its entirety and in its place instead is substituted the following:

                  "(2) TERM LOAN COMPONENT. Borrower shall pay to TFC on or
                  before the tenth day of each month an amount equal to: (i) all
                  interest accrued at the applicable Default Rate on the Term
                  Loan Component; plus (ii) all interest due and payable as of
                  the last day of the immediately preceding month; plus (iii) a
                  principal payment sufficient to amortize the Term Loan
                  Component in full on the basis of a FIFTEEN (15) year
                  amortization schedule. In the event that Borrower fails to
                  make the payment in question, TFC may, at its option, on or
                  before the tenth day of each month, make an Advance with
                  respect to the Revolving Loan Component and apply such Advance
                  to the payment of amounts due in respect of the Term Loan
                  Component as provided immediately above, PROVIDED THAT: (i) NO
                  DEFAULT OR EVENT OF DEFAULT SHALL EXIST IMMEDIATELY PRIOR TO
                  THE MAKING OF SUCH REQUESTED ADVANCE OR, AFTER GIVING EFFECT

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<PAGE>

                  THERETO, IMMEDIATELY AFTER THE MAKING OF SUCH REQUESTED
                  ADVANCE, EXCEPT FOR ANY DEFAULT OR EVENT OF DEFAULT THAT MAY
                  HAVE ARISEN AS A RESULT OF NON-PAYMENT OF THE TERM LOAN
                  COMPONENT; AND (II) AGENT SHALL HAVE DETERMINED THAT THE
                  REQUESTED ADVANCE, WHEN ADDED TO THE AGGREGATE OUTSTANDING
                  PRINCIPAL AMOUNT OF ALL PREVIOUS ADVANCES, IF ANY, DOES NOT,
                  BASED ON THE ELIGIBLE NOTES RECEIVABLE THAT HAVE BEEN DULY
                  PLEDGED IN FAVOR OF AGENT: (X) EXCEED THE TOTAL AMOUNT OF THE
                  BORROWING BASE, OR (Y) CAUSE THE EFFECTIVE ADVANCE RATE,
                  DETERMINED WITH RESPECT TO THE AGGREGATE OF THE LOAN, THE
                  ADDITIONAL CREDIT FACILITY AND THE TRANCHE C FACILITY, TO
                  EXCEED THE MAXIMUM EFFECTIVE ADVANCE RATE."

19.      MANDATORY TERM LOAN COMPONENT FUND UP PREPAYMENT. Section 2.4(c),
Mandatory Term Loan Component Fund Up Prepayment, is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "(c) MANDATORY TERM LOAN COMPONENT FUND UP PREPAYMENT. If and
                  to the extent that: (i) at the end of each calendar quarter
                  during the first two (2) years of the Term following the
                  Effective Date, commencing the calendar quarter ending June
                  30, 2002 (x) the outstanding principal balance of all Loans
                  made with respect to the Revolving Loan Component is less than
                  seventy percent (70%) of the then outstanding principal
                  balance of the Eligible Notes Receivable pledged to Agent with
                  respect to such Loans (such difference being hereinafter
                  referred to as an "Available Fund-Up Amount") and (y) provided
                  Borrower has available unrestricted cash of five million
                  dollars ($5,000,000.00) or more as indicated in the most
                  recent Weekly Flash Report or (ii) at the end of each calendar
                  quarter commencing the calendar quarter ending June 30, 2004
                  (x) the outstanding principal balance of all Loans made with
                  respect to the Revolving Loan Component is less than
                  seventy-five percent (75%) of the then outstanding principal
                  balance of the Eligible Notes Receivable pledged to Agent with
                  respect to such Loans (such difference also being referred to
                  as an "Available Fund-Up Amount") and (y) provided Borrower
                  has available unrestricted cash of five million dollars
                  ($5,000,000.00) or more as indicated in the most recent Weekly
                  Flash Report, then Borrower agrees that Agent may, IN ITS SOLE
                  AND ABSOLUTE DISCRETION, on the last Business Day of each such
                  calendar quarter, make an Advance with respect to the
                  Revolving Loan Component in an amount NOT TO EXCEED such
                  Available Fund Up Amount and apply any such Advance to the
                  repayment of the Term Loan Component as follows: (i) first to
                  interest at the applicable Default Rate; (ii) then to interest
                  at the applicable Interest Rate and (iii) then to reduction of
                  principal of the Term Loan Component until such time as the
                  Term Loan Component is paid in full."

20.      USE OF PROGRAM RESERVE ACCOUNT WITHDRAWALS AND SURPLUS UNDER THE TFC
CONDUIT LOAN. Section 2.4 is hereby amended in part to add the following new
paragraph:

                  "(h) USE OF PROGRAM RESERVE ACCOUNT WITHDRAWALS AND SURPLUS
                  UNDER THE TFC CONDUIT LOAN. TO THE EXTENT THAT FUNDS ARE MADE
                  AVAILABLE TO SPV FROM THE PROGRAM RESERVE ACCOUNT IN
                  ACCORDANCE WITH SECTION 5.1(E) OF THE LOAN AND SECURITY
                  AGREEMENT WHICH IS PART OF THE SILVERLEAF FINANCE II
                  DOCUMENTS, TO THE EXTENT PERMITTED BY LAWS AND THE SILVERLEAF
                  FINANCE II DOCUMENTS, BORROWER SHALL

                                       10
<PAGE>

                  CAUSE SPV TO DISTRIBUTE SUCH FUNDS TO BORROWER AND BORROWER
                  SHALL MAKE PAYMENT IN THE AMOUNT OF SUCH DISTRIBUTION TO TFC
                  AND SOVEREIGN TO BE APPLIED IN THE ORDER SET FORTH IN THAT
                  CERTAIN INTERCREDITOR AGREEMENT BETWEEN TFC, BORROWER, HELLER
                  AND SOVEREIGN DATED OF EVEN DATE HEREWITH, AS AMENDED. TO THE
                  EXTENT THAT BORROWER RECEIVES ANY DISTRIBUTIONS FROM THE SPV
                  IN RESPECT OF ANY SURPLUS PAYMENTS, AS SUCH TERM IS DEFINED IN
                  THE SILVERLEAF FINANCE II DOCUMENTS, SUCH FUNDS SHALL BE USED
                  BY BORROWER STRICTLY TO FUND OPERATING EXPENSES IN ACCORDANCE
                  WITH THE BUSINESS PLAN AND FOR NO OTHER REASON, WITHOUT
                  AGENT'S PRIOR WRITTEN CONSENT."

21.      FACILITY FEE. Section 2.7 is hereby deleted in its entirety and in its
place instead is substituted the following:

                  "2.7 FACILITY FEE. Borrower acknowledges and agrees that a
                  Facility Fee in the amount set forth in the Fee Letter is due
                  and payable exclusively to Lenders. Borrower acknowledges,
                  agrees and confirms that each Lender has earned its respective
                  Pro Rata Percentage of the Facility Fee notwithstanding
                  whether the Loan or any portion is funded and further agrees
                  that the Facility Fee shall be payable BY BORROWER AT THE
                  CLOSING OF THE TFC CONDUIT LOAN."

22.      GRANT OF SECURITY INTEREST. Section 3.1 is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "3.1 GRANT OF SECURITY INTEREST. To secure the payment and
                  performance of the Obligations, for value received, Borrower
                  unconditionally and irrevocably assigns, pledges and grants to
                  Agent, as agent for each Lender, a continuing first priority
                  security interest in and to the Collateral (OTHER THAN THE
                  SILVERLEAF FINANCE II STOCK AND THE SILVERLEAF FINANCE II
                  SUBORDINATED NOTE , AS TO WHICH AGENT IS GRANTED A JUNIOR
                  SECURITY INTEREST AS HEREINAFTER PROVIDED) to further secure
                  the payment and performance of the Obligations. To further
                  secure the payment and performance of the Obligations,
                  Borrower shall also execute and deliver to Agent, as agent for
                  each Lender: (i) the modifications to the Land Mortgages in
                  the applicable form attached hereto as Exhibit A, granting
                  Agent, as agent for each Lender, a first priority mortgage
                  lien on the Land and (ii) the Additional Resort Collateral
                  Mortgages, in the applicable form attached hereto as Exhibit
                  A, granting Agent, as agent for each Lender, a first priority
                  mortgage lien on that portion of the Additional Resort
                  Collateral consisting of real property. To further secure the
                  payment and performance of the Obligations, Borrower shall
                  further execute and deliver to Agent, as agent for each
                  Lender: (1) the Additional Resort Collateral Assignment, in
                  the applicable form attached hereto as Exhibit A, granting
                  Agent, as agent for each Lender, a first priority security
                  interest on that portion of the Additional Resort Collateral
                  consisting of personal property; (2) the Stock Pledge
                  Agreement, in the applicable form attached hereto as Exhibit
                  A, granting Agent, as agent for each Lender, a first priority
                  security interest in the Silverleaf Finance I, Inc. Stock; (3)
                  the Amended Standby Management Agreement Assignment, in the
                  applicable form attached hereto as Exhibit A, assigning to
                  Agent, as agent for each Lender, all of Borrower's right,
                  title and interest in the Amended Standby

                                       11
<PAGE>

                  Management Agreement Assignment; (4) the Standby Servicing
                  Agreement Assignment, in the applicable form attached hereto
                  as Exhibit A, assigning to Agent, as agent for each Lender,
                  all of Borrower's right, title and interest in the Standby
                  Servicing Agreement; and (5) THE SILVERLEAF FINANCE II STOCK
                  AND SUBORDINATED NOTE PLEDGE AGREEMENT, IN THE APPLICABLE FORM
                  ATTACHED TO THE FIRST AMENDMENT AS EXHIBIT B-1, GRANTING
                  AGENT, AS AGENT FOR EACH LENDER, A JUNIOR AND SUBORDINATE
                  SECURITY INTEREST IN THE SILVERLEAF FINANCE II STOCK AND THE
                  SILVERLEAF FINANCE II SUBORDINATED NOTE, SUBJECT TO THE TERMS
                  AND CONDITIONS SET FORTH IN THE SPV SUBORDINATION AGREEMENT.
                  For convenience of administration, Agent is acting as agent
                  for Lenders under the Agreement. Agent, as such agent, may
                  execute any of its duties hereunder by or through its agents,
                  officers or employees and shall be entitled to rely upon the
                  advice of counsel as to its duties. Agent, as such agent,
                  shall not be liable to Lenders for any action taken or omitted
                  to be taken by it in good faith and shall neither be
                  responsible to Lenders for the consequences of any oversight
                  or error of judgment nor be answerable to Lenders for any loss
                  unless the same shall happen through Agent's gross negligence
                  or willful misconduct. To the extent that Agent, as such
                  agent, shall not be reimbursed by Borrower for any costs,
                  liabilities or expenses incurred in such capacity, Lenders
                  shall reimburse Agent therefor pro rata in accordance with
                  their respective Pro Rata Percentages (including Agent as one
                  of Lenders for this purpose). Each Lender agrees that Agent
                  shall be entitled to take and shall only be required to take,
                  any action which it is permitted to take under this Agreement.

                  Notwithstanding anything herein to the contrary, Borrower
                  acknowledges and agrees as follows:

                  (a)      The Revolving Loan Component shall be secured by:

                           (i)      a first priority security interest in the
                           Eligible Notes Receivable pledged to Agent on behalf
                           of Lenders as provided herein, the Mortgages with
                           respect thereto and that portion of the other
                           Collateral related thereto;

                           (ii)     a first priority security interest in the
                           Ineligible Note Portfolio, the Mortgages with respect
                           thereto and that portion of the other Collateral
                           related thereto; and

                           (iii)    a second priority security interest in the
                           Silverleaf Finance I Stock and the Additional Resort
                           Collateral, subject only to the security interest
                           securing the Term Loan Component and the Inventory
                           Loan AND A SUBORDINATE SECURITY INTEREST IN THE
                           SILVERLEAF FINANCE II STOCK AND THE SILVERLEAF
                           FINANCE II SUBORDINATED NOTE SUBJECT TO THE SECURITY
                           INTEREST SECURING THE TERM LOAN COMPONENT AND SUBJECT
                           TO THE TERMS AND CONDITIONS SET FORTH IN THE SPV
                           SUBORDINATION AGREEMENT.

                  (b)      The Term Loan Component shall be secured by:

                                       12
<PAGE>

                           (i)      a first priority security interest in the
                           Additional Resort Collateral;

                           (ii)     a first priority security interest in
                           Borrower's Silverleaf Finance I, Inc. Stock;

                           (iii)    Intentionally Omitted;

                           (iv)     a second priority security interest, subject
                           only to the security interest securing the Revolving
                           Loan Component, in the Eligible Notes Receivable
                           pledged to Agent on behalf of Lenders as provided
                           herein, the Mortgages with respect thereto and that
                           portion of the other Collateral related thereto;

                           (v)      second priority security interest, subject
                           only to the security interest securing the Revolving
                           Loan Component, in the Ineligible Note Portfolio, the
                           Mortgages with respect thereto and the other
                           Collateral related thereto; and

                           (vi)     A SUBORDINATE SECURITY INTEREST IN THE
                           SILVERLEAF FINANCE II STOCK AND THE SILVERLEAF
                           FINANCE II SUBORDINATED NOTE SUBJECT TO THE TERMS AND
                           CONDITIONS SET FORTH IN THE SPV SUBORDINATION
                           AGREEMENT.

                  In addition to the foregoing, Borrower acknowledges, agrees
                  and confirms that the security interest granted to Agent, on
                  behalf of Lenders, in all other Collateral to secure the Loan,
                  including the Land, the Standby Management Agreement, the
                  Standby Servicing Agreement and the other collateral securing
                  the Heller Facility, the Sovereign Facility, the Additional
                  Credit Facility, the Tranche C Facility and the Inventory Loan
                  shall be equal in priority as between the Revolving Loan
                  Component and the Term Loan Component and, with respect to the
                  collateral securing the Heller Facility, the Sovereign
                  Facility, the Additional Credit Facility, the Tranche C
                  Facility and the Inventory Loan, subject only to the security
                  interests securing such facilities. For purposes hereof, the
                  reference to "collateral securing the Heller Facility" and
                  "collateral securing the Sovereign Facility" shall mean the
                  Notes Receivable and related Mortgages exclusively assigned to
                  Heller or Sovereign in connection with an advance under their
                  respective loan documents."

23.      PURCHASER/ CRITERIA. Section 3.11 is hereby deleted in its entirety and
in its place instead is substituted the following:

                  "3.11 PURCHASER/CRITERIA. All Eligible Notes Receivable
                  pledged as Collateral to Agent subsequent to the Effective
                  Date will be underwritten in a manner consistent with the
                  Borrower's general underwriting criteria, as approved in
                  writing by Agent, including, without limitation: (i) the
                  requirement that a majority of sales shall be made to
                  Purchasers with minimum annual income as follows: $35,000 for
                  purchasers residing in the state of Texas, $40,000 for
                  purchasers residing in the state of Illinois, and $45,000 for
                  purchasers residing in the state of Massachusetts, (ii) the
                  requirement that each Purchaser shall have a major credit card
                  issued in his or her name, with a copy of such credit card
                  maintained in Borrower's file for such Purchaser, and (iii)
                  the

                                       13
<PAGE>

                  requirement that the weighted average FICO Credit Bureau
                  Scores of all Purchasers with respect to which a FICO score
                  can be obtained be not less than 640, provided that the
                  aggregate outstanding principal balance of Eligible Notes
                  Receivable pledged to Agent with respect to which a FICO score
                  can not be obtained, does not exceed ten percent (10%) of the
                  aggregate outstanding principal amount of all Eligible Notes
                  Receivable pledged to Agent. Borrower shall not materially
                  alter its general underwriting criteria without the prior
                  written approval of Agent, which approval, Agent may withhold
                  in its sole discretion. ON A SEMI-ANNUAL BASIS, BORROWER SHALL
                  PROVIDE AGENT WITH WRITTEN CERTIFICATION THAT THE UNDERWRITING
                  CRITERIA AS APPROVED BY AGENT REMAIN IN FULL FORCE AND EFFECT
                  AND HAVE NOT BEEN REVISED OR ALTERED WITHOUT AGENT'S CONSENT."

24.      CROSS COLLATERALIZATION. Section 3.13 is hereby deleted in its entirety
and in its place instead is substituted the following:

                  "3.13 CROSS COLLATERALIZATION. The Collateral also secures the
                  Obligations of Borrower under the Additional Credit Facility,
                  the Inventory Loan, and the Tranche C Facility. Upon repayment
                  of this Loan and the satisfaction by Borrower of all of the
                  Obligations under this Loan, the Collateral shall continue to
                  secure the Additional Credit Facility, the Inventory Loan and
                  the Tranche C Facility, as provided in the documents
                  evidencing and securing the Additional Credit Facility, the
                  Inventory Loan and the Tranche C Facility. Borrower further
                  acknowledges and agrees that upon repayment in full of the
                  Heller Facility and/or the Sovereign Facility, Agent's
                  security interest in the collateral securing such facilities
                  shall automatically become a first priority security interest
                  securing the Borrower's Obligations hereunder and under the
                  Additional Credit Facility, the Tranche C Facility and the
                  Inventory Facility and Borrower shall take such steps as Agent
                  may request to deliver such collateral to Agent and to confirm
                  Agent's first priority security interest therein.
                  Notwithstanding the foregoing: (a) when the Term Loan
                  Component and the Inventory Loan are paid in full, the
                  Additional Resort Collateral shall be released from the Lien
                  of the security interest granted to Agent hereunder provided:
                  (i) an Event of Default has not occurred; and (ii) the
                  Additional Resort Collateral is also released from any lien
                  granted to Sovereign pursuant to the Sovereign Documents; (b)
                  when the Term Loan Component and the Inventory Loan are paid
                  in full, the Silverleaf Finance I, Inc. Stock shall be
                  released from the Lien of the security interest granted to
                  Agent hereunder provided: (i) an Event of Default has not
                  occurred; and (ii) the Silverleaf Finance I, Inc. Stock is
                  also released from any lien granted to Sovereign pursuant to
                  the Sovereign Documents; (c) WHEN THE TERM LOAN COMPONENT, THE
                  REVOLVING LOAN COMPONENT AND THE INVENTORY LOAN ARE PAID IN
                  FULL, THE SILVERLEAF FINANCE II STOCK AND THE SILVERLEAF
                  FINANCE II SUBORDINATED NOTE SHALL BE RELEASED FROM THE LIEN
                  OF THE SECURITY INTEREST GRANTED TO AGENT HEREUNDER PROVIDED:
                  (I) AN EVENT OF DEFAULT HAS NOT OCCURRED; AND (ii) THE
                  SILVERLEAF FINANCE II STOCK AND THE SILVERLEAF FINANCE II
                  SUBORDINATED NOTE ARE ALSO RELEASED FROM ANY LIEN GRANTED TO
                  SOVEREIGN PURSUANT TO THE SOVEREIGN DOCUMENTS."

                                       14
<PAGE>

25.      USE OF PROCEEDS/MARGIN STOCK. Section 6.11 is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "6.11 USE OF PROCEEDS/MARGIN STOCK. (a) The proceeds of the
                  Loan, the Additional Credit Facility, the Tranche C Facility,
                  the Inventory Loan, the Heller Loan, the Tax Refund, the
                  Sovereign Loan, the DZ Facility and any cash dividend or other
                  cash distribution Borrower receives from Silverleaf Finance I,
                  Inc. OR SILVERLEAF FINANCE II, INC. will be used strictly in
                  accordance with the Business Plan and for no other purpose and
                  (b) none of the proceeds of the Loan will be used to purchase
                  or carry any "margin stock" (as defined under Regulation U of
                  the Board of Governors of the Federal Reserve System, as in
                  effect from time to time), and no portion of the proceeds of
                  the Loan will be extended to others for the purpose of
                  purchasing or carrying margin stock. None of the transactions
                  contemplated in the Agreement (including, without limitation,
                  the use of the proceeds from the Loan) will violate or result
                  in the violation of Section 7 of the Securities Exchange Act
                  of 1934, as amended, or any regulations issued pursuant
                  thereto, including, without limitation, Regulations G, T, U
                  and X of the Board of Governors of the Federal Reserve System,
                  12 C.F.R., Chapter 11."

26.      RESTRICTIONS OF BORROWER. Section 6.14 is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "6.14 RESTRICTIONS OF BORROWER. Except for this Agreement and
                  the Loan Documents, the Inventory Loan Documents, the Tranche
                  B Loan Documents, the Tranche C Loan Documents, the Heller
                  Documents, the Sovereign Documents, THE DZ DOCUMENTS OR THE
                  SILVERLEAF FINANCE II DOCUMENTS, Borrower will not be, on or
                  after the date hereof, a party to any contract or agreement
                  which restricts its right or ability to incur indebtedness or
                  prohibits Borrower's execution of or compliance with the terms
                  of this Agreement, the other Loan Documents, the Inventory
                  Loan Agreement, the Tranche C Facility Loan Agreement, the
                  Additional Credit Facility Loan Agreement, the Heller
                  Documents, the Bond Holder Exchange Documents, the Sovereign
                  Documents, the DZ Documents or THE SILVERLEAF FINANCE II
                  DOCUMENTS. Borrower has not agreed or consented to cause or
                  permit in the future (upon the happening of a contingency or
                  otherwise) any of the Collateral, whether now owned or
                  hereafter acquired, to be subject to a Lien except: (i) in
                  favor of Agent as provided herein; and (ii) with respect to
                  the Land, the Additional Resort Collateral, the Silverleaf
                  Finance I. Inc. Stock, the Ineligible Notes Receivable, THE
                  SILVERLEAF FINANCE II SUBORDINATED NOTE AND THE SILVERLEAF
                  FINANCE II STOCK, in favor of Heller, Sovereign AND TFC, as
                  applicable."

27.      REPORTING REQUIREMENTS. Section 7.1(h)(i) ("Monthly Financial Reports")
is hereby deleted in its entirety and in its place instead is substituted the
following:

                  "(i) MONTHLY FINANCIAL REPORTS. As soon as available and in
                  any event within FIVE (5) BUSINESS days after the end of each
                  calendar month, a report showing (i) the trial balance of the
                  Pledged Notes Receivable, (ii) an aging report on the Pledged
                  Notes Receivable, (iii) a report detailing the collections on
                  each of the Pledged Notes

                                       15
<PAGE>

                  Receivable, (iv) a Borrowing Base Report, (v) monthly reports
                  from the Lockbox Agent required pursuant to the Lockbox
                  Agreement, and (vi) a report in form satisfactory to Agent
                  indicating, among other things, the conformity of the
                  Borrower's business to the Business Plan and any variances
                  therefrom during the preceding calendar month." IN ADDITION,
                  BORROWER SHALL DELIVER EACH OF THE MONTHLY FINANCIAL REPORTS
                  PROVIDED FOR IN THIS SECTION 7.1(h)(i) DIRECTLY TO WEBSTER
                  BANK AT THE ADDRESS PROVIDED FOR IN SECTION 12.1 OF THE LOAN
                  AGREEMENT. IN THE EVENT THAT WEBSTER BANK HAS QUESTIONS OR
                  COMMENTS RELATING TO SUCH MONTHLY FINANCIAL REPORTS, SUCH
                  QUESTIONS OR COMMENTS SHALL BE DIRECTED TO AGENT.

28.      STANDBY MANAGER, RESORT CONSULTANT AND STANDBY SERVICER. Section 7.1(y)
is hereby deleted in its entirety and in its place instead is substituted the
following:

                  "(y) STANDBY MANAGER, RESORT CONSULTANT AND STANDBY SERVICER.
                  Borrower will enter into agreements for the Standby Manager
                  and the Resort Consultant on or before the Effective Date and
                  will maintain such agreements in full force and effect. IN THE
                  EVENT THAT SUCH AGREEMENTS FOR THE STANDBY MANAGER AND THE
                  RESORT CONSULTANT EXPIRE BEFORE THE FINAL MATURITY DATE, SUCH
                  AGREEMENTS SHALL BE EXTENDED OR SHALL BE REPLACED, BEFORE
                  THEIR EXPIRATION, WITH AGREEMENTS FOR A STANDBY MANAGER AND A
                  RESORT CONSULTANT THAT EXPIRE NO SOONER THAN THE FINAL
                  MATURITY DATE. Borrower will maintain the agreement for the
                  Standby Servicer in full force and effect. Borrower agrees
                  that upon the occurrence of a Default or Event of Default
                  hereunder: (1) Agent may, with the approval of a majority of
                  the Borrower's Board of Directors, which approval shall not be
                  unreasonably withheld or delayed, terminate any then existing
                  management agreements and replace any existing manager with
                  such manager as Agent may select, provided however, if: (x)
                  the obligations have become immediately due and payable in
                  accordance with Section 9.1 (a) hereof, or (y) Agent elects to
                  have J & J Limited, Inc. act as manager, then no such approval
                  of Borrower's Board of Directors shall be required; and (2)
                  the Standby Servicer will assume full control over the
                  servicing of all Pledged Notes Receivable, reporting solely to
                  Agent, as provided in Sections 9.1(i) and 10.14 hereof."

29.      HELLER FACILITY, SOVEREIGN FACILITY, DZ FACILITY AND BOND HOLDER
EXCHANGE TRANSACTION. Section 7.1(bb) is hereby deleted in its entirety and in
its place instead is substituted the following:

                  "(bb) HELLER FACILITY, SOVEREIGN FACILITY, DZ FACILITY, TFC
                  CONDUIT LOAN AND BOND HOLDER EXCHANGE TRANSACTION. Borrower
                  will comply with each of the terms and conditions of the
                  Heller Facility, the Sovereign Facility, the DZ Facility, THE
                  TFC CONDUIT LOAN and the Bond Holder Exchange Documents and
                  will promptly deliver to Agent, upon receipt by Borrower,
                  copies of any notices received by Borrower in connection with
                  any of the forgoing credit facilities."

30.      PROFITABLE OPERATIONS. Section 7.1(cc)(v) is hereby deleted in its
entirety and in its place instead is substituted the following:

                                       16
<PAGE>

                  "(v) PROFITABLE OPERATIONS. Borrower will not permit
                  Consolidated Net Income (a) for any fiscal year, commencing
                  with the fiscal year ending December 1, 2002, to be less than
                  $1.00 and (b) for any two consecutive fiscal quarters
                  (reviewed on an individual rather than on an aggregate basis)
                  to be less than $1.00."

31.      NET SECURITIZATION CASH FLOW. Section 7.1(dd) is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "(dd) NET SECURITIZATION CASH FLOW. Borrower will cause
                  Silverleaf Finance I, Inc. to declare, at least quarterly, a
                  cash dividend payable to Borrower, in an amount equal to the
                  Net Securitization Cash Flow in respect of Silverleaf Finance
                  I, Inc. for such quarter. If no Default or Event of Default
                  has occurred, Borrower agrees to use such dividends for
                  payment of Operating Expenses as provided in the Business Plan
                  and for no other purpose. If a Default or Event of Default has
                  occurred, then all such dividends shall be paid directly to
                  Agent, as agent for each Lender, and applied by Agent in
                  repayment of the Term Loan Component as provided in Section
                  2.4(b). Borrower shall provide Agent with notice of Silverleaf
                  Finance I, Inc.'s declaration of a cash dividend, together
                  with a certification that: (i) states whether a Default or
                  Event of Default exists, and (ii) contains a calculation of
                  the Net Securitization Cash Flow.

                  Borrower will cause Silverleaf Finance II, Inc. to declare, at
                  least quarterly, a cash dividend payable to Borrower and/or a
                  payment in respect of the Silverleaf Finance II Subordinated
                  Note in an aggregate amount equal to the Net Securitization
                  Cash Flow in respect of Silverleaf Finance II, Inc. for such
                  quarter. If no Default or Event of Default has occurred,
                  Borrower agrees to use such dividends or payments for payment
                  of Operating Expenses as provided in the Business Plan and for
                  no other purpose. If a Default or Event of Default has
                  occurred, then all such dividends or payments, after payment
                  of all amounts then due and payable by Borrower to TFC in
                  respect of the Term Loan Component in accordance with Section
                  2.4(h) hereof, shall be paid directly to Agent, as agent for
                  each Lender, and applied by Agent in repayment of the Term
                  Loan Component and the Revolving Loan Component on a pro rata
                  basis, as provided in Section 2.4(b). Borrower shall provide
                  Agent with notice of Silverleaf Finance II, Inc.'s declaration
                  of a cash dividend or a payment on the Silverleaf Finance II
                  Subordinated Note, together with a certification that: (i)
                  states whether a Default or Event of Default exists, and (ii)
                  contains a calculation of the Net Securitization Cash Flow."

32.      RESTRICTIONS ON TRANSFERS. Section 7.2(b) is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "(b) RESTRICTIONS ON TRANSFERS. Except as hereinafter
                  specifically provided, Borrower shall not, whether voluntarily
                  or involuntarily, by operation of law or otherwise, (i)
                  without obtaining the prior written consent of Agent (which
                  consent may be given, withheld or conditioned by Agent in
                  Agent's sole discretion), transfer, sell,

                                       17
<PAGE>

                  pledge, convey, hypothecate, factor or assign all or any
                  portion of the Collateral, the Encumbered Intervals, the
                  Common Elements relating to the Encumbered Intervals or any
                  Resort facilities or amenities, or contract to do any of the
                  foregoing, including, without limitation, pursuant to options
                  to purchase, and so-called "installment sales contracts",
                  "land contracts", or "contracts for deed", PROVIDED THAT THE
                  FOREGOING RESTRICTION ON TRANSFERS SHALL NOT APPLY TO THE
                  CONVEYANCE OF SPV ASSETS TO THE SPV IN ACCORDANCE WITH THE
                  SILVERLEAF FINANCE II DOCUMENTS, (ii) without obtaining the
                  prior written consent of Agent (which consent may be given,
                  withheld or conditioned by Agent in Agent's sole discretion),
                  lease or license all or any portion of the Collateral, the
                  Encumbered Intervals, the Common Elements relating to the
                  Encumbered Intervals or any Resort facilities or amenities
                  (EXCEPT FOR THE LICENSE CREATED IN FAVOR OF SPV UNDER ANY
                  LICENSE AGREEMENT WITH BORROWER, SILVERLEAF CLUB OR ANY
                  TIMESHARE OWNERS ASSOCIATION, TO USE OR ACCESS THE RESERVATION
                  SYSTEM OR RELATED COMPUTER HARDWARE OR SOFTWARE FOR ANY
                  RESORT), or change the legal or actual possession or use
                  thereof, (iii) permit the assignment, transfer, delegation,
                  change, modification or diminution of the duties or
                  responsibilities of Borrower, of any manager of the Resort
                  approved by Agent as manager of the Resort (except for an
                  assignment of such duties to a professional management company
                  or companies reasonably acceptable to Agent in advance)
                  without obtaining the prior written consent of Agent (which
                  consent shall not be unreasonably withheld), or (iv) without
                  obtaining the prior written consent of Agent (which consent
                  may be given, withheld or conditioned by Agent in Agent's sole
                  discretion), cause or permit the assignment, pledge or other
                  encumbrance of any of the Operating Contracts or all or any
                  portion of Borrower's right, title or interest in the
                  Declaration. Without limiting the generality of the preceding
                  sentence, and subject to the terms of this Agreement, the
                  prior written consent of Agent (as specified above) shall be
                  required for (A) any transfer of the Encumbered Intervals, the
                  Common Elements relating to the Encumbered Intervals or any
                  Resort facilities or amenities or any part thereof made to a
                  subsidiary or Affiliate or otherwise, (B) any transfer of all
                  or any part of the Encumbered Intervals, the Common Elements
                  relating to the Encumbered Intervals or any Resort facilities
                  or amenities by Borrower to its stockholders or Affiliates or
                  vice versa, and (C) any corporate merger or consolidation,
                  disposition or other reorganization, except as permitted in
                  Section 7.1(c). In the event that Agent is willing to consent
                  to a transfer which would otherwise be prohibited by this
                  Section 7.2(b) Agent may condition its consent on such terms
                  as it desires, including, without limitation, an increase in
                  the Interest Rate and the requirement that Borrower pay a
                  transfer fee, together with any expenses incurred by Agent in
                  connection with the granting of such consent (including,
                  without limitation, attorneys' fees and expenses). If Borrower
                  violates the terms of this Section 7.2(b), in addition to any
                  other rights or remedies which Agent may have herein, in any
                  other Loan Document, or at law or in equity, Agent may by
                  written notice to Borrower increase, effective immediately as
                  of the date of such violation, the Interest Rate to the
                  Default Rate."

33.      TRANSACTIONS WITH AFFILIATES. Section 7.2(d) is hereby deleted in its
entirety and in its place instead is substituted the following:

                                       18
<PAGE>

                  "(d) TRANSACTIONS WITH AFFILIATES. EXCEPT AS PROVIDED IN THE
                  SILVERLEAF FINANCE II DOCUMENTS, without the prior written
                  consent of Agent, which shall not unreasonably be withheld,
                  Borrower will not enter into any transaction with any
                  Affiliate in connection with the Resorts, including, without
                  limitation, relating to the purchase, sale or exchange of any
                  assets or properties or the rendering of any service, except
                  in the ordinary course of, and pursuant to the reasonable
                  requirements of, the operations of the Resorts and upon fair
                  and reasonable terms."

34.      TIMESHARE REGIME. Section 7.2(g) is hereby deleted in its entirety and
in its place instead is substituted the following:

                  "(g) TIMESHARE REGIME. Without Agent's prior written consent,
                  which consent shall not be unreasonably withheld as to changes
                  necessary to implement the Business Plan, Borrower shall not
                  amend, modify or terminate the Declarations or other Timeshare
                  Documents, or any other restrictive covenants, agreements or
                  easements regarding the Resorts (except for routine
                  non-substantive modifications which have no impact on the
                  Collateral AND EXCEPT FOR AMENDMENTS OR MODIFICATIONS OF THE
                  TIMESHARE DOCUMENTS AND/OR DECLARATIONS, A LIST OF WHICH IS
                  ATTACHED TO THE FIRST AMENDMENT AS EXHIBIT C-1). Except as
                  otherwise provided herein or in the Sovereign Documents,
                  Borrower shall not assign its rights as "developer" under the
                  Declarations without Agent's prior written consent, or file or
                  permit to be filed any additional covenants, conditions,
                  easements or restrictions against or affecting the Resorts (or
                  any portion thereof) without Agent's prior written consent,
                  which consent shall not be unreasonably withheld."

35.      COLLATERAL. Section 7.2(i) is hereby deleted in its entirety and in its
place instead is substituted the following:

                  "(i) COLLATERAL. Borrower shall not take any action (nor
                  permit or consent to the taking of any action) which might
                  impair the value of the Collateral or any of the rights of
                  Lenders in the Collateral, EXCEPT WITH RESPECT TO THE
                  SILVERLEAF FINANCE II STOCK AND THE SILVERLEAF FINANCE II
                  SUBORDINATED NOTE AS PROVIDED IN THE SILVERLEAF FINANCE II
                  DOCUMENTS, nor shall Borrower cause or permit any amendment to
                  or modification of the form or terms of any of the Pledged
                  Notes Receivable, Mortgages or, except as specifically
                  provided herein above, the other Timeshare Documents."

36.      MODIFICATIONS OF HELLER DOCUMENTS, DZ DOCUMENTS, BOND HOLDER EXCHANGE
DOCUMENTS, SOVEREIGN DOCUMENTS, SILVERLEAF FINANCE II DOCUMENTS AND OTHER DEBT
INSTRUMENTS. Section 7.2(k) is hereby deleted in its entirety and in its place
instead is substituted the following:

                  "(k) MODIFICATIONS OF HELLER DOCUMENTS, DZ DOCUMENTS, BOND
                  HOLDER EXCHANGE DOCUMENTS, SOVEREIGN DOCUMENTS, SILVERLEAF
                  FINANCE II DOCUMENTS AND OTHER DEBT INSTRUMENTS. Borrower
                  shall not amend or modify the Heller Documents, the Sovereign
                  Documents, DZ Documents, Bond Holder Exchange Documents, THE
                  SILVERLEAF FINANCE II DOCUMENTS or the documents evidencing
                  any other indebtedness

                                       19
<PAGE>

                  of Borrower, nor shall Borrower extend, modify, increase or
                  terminate the Heller Facility, DZ Facility, the Bond Holder
                  Exchange Transaction, the Sovereign Facility, the TFC CONDUIT
                  LOAN or any other credit facility or loan, without the prior
                  written consent of Lender, which consent shall not be
                  unreasonably withheld."

37.      DEFAULT BY BORROWER IN OTHER AGREEMENTS. Section 8.1(m) is hereby
deleted in its entirety and in its place instead is substituted the following:

                  "(m) DEFAULT BY BORROWER IN OTHER AGREEMENTS. Except for any
                  Specified Event of Default (as provided in the Forbearance
                  Agreement), which Specified Events of Default shall include a
                  prior existing default under the Heller Facility or the
                  Sovereign Facility and for any "Waived Defaults" under the
                  November Letter Agreement, which "Waived Defaults" include
                  prior existing defaults under the Heller Facility or the
                  Sovereign Facility, any default, AS DEFINED IN THE APPLICABLE
                  LOAN AGREEMENT, by Borrower (i) in the payment of any
                  indebtedness to any Lender, including any indebtedness owed to
                  Agent under the Heller Facility, DZ Facility, Sovereign
                  Facility, Bond Holder Exchange Transaction, Tranche C
                  Facility, Additional Credit Facility, the Inventory Loan, OR
                  THE TFC CONDUIT LOAN, (ii) in the payment or performance of
                  other indebtedness for borrowed money or obligations secured
                  by any part of the Resort; (iii) in the payment or performance
                  of other material indebtedness or obligations (material
                  indebtedness or obligations being defined for purposes of this
                  provision as any indebtedness or obligation in excess of
                  $200,000) where such default accelerates or permits the
                  acceleration (after the giving of notice or passage of time or
                  both) of the maturity of such indebtedness, or permits the
                  holders of such indebtedness to elect a majority of the board
                  of directors of Borrower (whether or not such default[s] have
                  been waived by such holder) or (iv) the acceleration by
                  Heller, Sovereign, DZ or the bondholders of their respective
                  credit facilities OR THE ACCELERATION OF THE TFC CONDUIT
                  LOAN."

38.      AUTHORIZATION AND ACTION. Section 13.1 is hereby deleted in its
entirety and in its place instead is substituted the following:

                  "13.1 AUTHORIZATION AND ACTION. Each Lender hereby accepts the
                  appointment of and irrevocably (but subject to Section 13.8)
                  authorizes Agent to take such action as Agent on its behalf
                  and to exercise such powers as are expressly delegated to
                  Agent by the terms hereof, together with such powers as are
                  reasonably incidental thereto, INCLUDING BUT NOT LIMITED TO
                  THE EXECUTION, DELIVERY AND PERFORMANCE OF THE SPV
                  SUBORDINATION AGREEMENT AS DEFINED HEREIN. Agent shall not be
                  required to take any action which exposes Agent to personal
                  liability or which is contrary to this Agreement or applicable
                  law. Agent agrees to give to each Lender prompt notice of each
                  notice given to it by Borrower pursuant to the terms of this
                  Agreement. The appointment and authority of Agent hereunder
                  shall terminate upon the payment of the Obligations in full."

39.      AGENT'S RESPONSIBILITIES. The first paragraph of Section 13.11(d) is
amended as follows:

                                       20
<PAGE>

                  "(d) Except as otherwise provided in this Agreement, Agent
                  shall be entitled, at its option, from time to time and at any
                  time, to enter into any amendment of, or waive compliance with
                  the terms of the Loan Agreement without obtaining prior
                  approval from any Lender, provided that, without the prior
                  approval of each Lender in each instance, Agent may not TAKE
                  ANY OF THE FOLLOWING ACTIONS WITH RESPECT TO THE REVOLVING
                  LOAN COMPONENT: (i) reduce the principal amount of the Loan;
                  (ii) change the Borrowing Base (advance rate) (provided,
                  however, Agent may reduce the Borrowing Base for a limited
                  time (not more than sixty (60) days) to adjust an over-advance
                  circumstance); (iii) change the definition of Eligible Notes
                  Receivable; (iv) decrease the Interest Rate; (v) extend the
                  Final Maturity Date of the Loan; (vi) waive or excuse any
                  payment; (vii) release any material Collateral or any material
                  third party obligor (except as expressly authorized by this
                  Agreement in the normal course of Borrower's business); (viii)
                  waive an Event of Default; or (ix) waive any of the Advance
                  requirements set forth in Section 5.1. Notwithstanding the
                  foregoing, Agent may take any such actions referred to in such
                  preceding sentences and each Lender shall be bound thereby
                  with the consent of such Lenders (including Agent as a Lender
                  for this purpose) whose total Pro Rata Payment Percentage is
                  equal to or exceeds sixty-six and two-thirds percent (66 2/3%)
                  of the outstanding principal balance of the Loan. AGENT SHALL
                  BE ENTITLED, AT IS OPTION, FROM TIME TO TIME AND AT ANY TIME,
                  TO ENTER INTO ANY AMENDMENT OF, OR WAIVE COMPLIANCE WITH THE
                  TERMS OF THE LOAN AGREEMENT WITHOUT OBTAINING PRIOR APPROVAL
                  FROM ANY LENDER INSOFAR AS ANY SUCH ACTIONS RELATE TO OR
                  AFFECT THE TERM LOAN COMPONENT."

40.      DESCRIPTION OF LENDERS. Schedule A to the Loan Agreement is hereby
deleted in its entirety and in its place instead is substituted the amended
Schedule A-1 ATTACHED TO THE FIRST AMENDMENT.

41.      CONDITIONS PRECEDENT. This First Amendment shall not be effective until
all of the following conditions have been satisfied:

                  (a)      APPROVAL OF DOCUMENTS. Borrower has delivered to
                  Agent (with copies to Agent's counsel), and Agent has reviewed
                  and approved in its sole discretion, the form and content of
                  all of the items specified in Subsections (i) through (iv)
                  below (the "SUBMISSIONS"). Agent shall have the right to
                  review and approve any changes to the form of any of the
                  Submissions. If Agent disapproves of any changes to any of the
                  Submissions, Agent shall have the right to require Borrower
                  either to cure or correct the defect objected to by Agent or
                  to elect not to fund any Advance. Under no circumstances shall
                  Agent's failure to approve or disapprove a change to any of
                  the Submissions be deemed to be an approval of such
                  Submissions. All of the Submissions were and shall be prepared
                  at Borrower's sole cost and expense.

                           (i)      A certificate in the form attached to THE
                           FIRST AMENDMENT as Exhibit D-1 to be signed by the
                           president, vice president or secretary of the
                           Borrower;

                           (ii)     Copies of any amendments to the articles of
                           incorporation/charter and bylaws of Borrower not
                           previously delivered to Agent, certified to be true,
                           correct and complete by Borrower and the Secretary of
                           State of the State

                                       21
<PAGE>

                           of Texas and current certificates of good standing
                           for Borrower for the State of Texas and states where
                           the Resorts are located, a current certificate of
                           authority to conduct business by the Secretary of
                           State in each state in which Borrower conducts
                           business;

                           (iii)    A certificate of the Secretary of Borrower
                           certifying the adoption by the Board of Directors of
                           Borrower of a resolution authorizing Borrower to
                           enter into and execute the First Amendment and all
                           such documents requested by Agent in the form
                           attached to THE FIRST AMENDMENT as Exhibit E-1; and

                           (iv)     A certificate of the secretary or assistant
                           secretary of Borrower certifying the incumbency, and
                           verifying the authenticity of the signatures of the
                           specified officers of Borrower authorized to sign
                           this First Amendment and all such documents requested
                           by Lender in the form attached to THE FIRST AMENDMENT
                           as Exhibit G-1.

                  (b)      EXECUTION AND DELIVERY OF DOCUMENTS. Borrower shall
                  have delivered to Agent the following:

                           (i)      The Silverleaf Finance II Documents;

                           (ii)     Closing Opinions of Counsels for Borrower;

                           (iii)    The Silverleaf Finance II Stock and
                           Subordinated Note Pledge Agreement;

                           (iv)     Amended and Restated Term Loan Component
                           Note;

                           (v)      Revised Form of Borrower's Certificate and
                           Request for Advance;

                           (vi)     Bailee Agreement; and

                           (vii)    Such other agreements, documents,
                           instruments, certificates and materials as Agent may
                           request to evidence the Indebtedness, to evidence and
                           perfect the rights and Liens and security interests
                           of Agent contemplated by the Loan Documents, and to
                           effectuate the transactions contemplated herein.

                  (c)      EXECUTION OF AMENDMENTS BY SOVEREIGN AND DZ BANK.
                  Agent shall have received evidence, in form and substance
                  satisfactory to Agent, that Sovereign and DZ have executed
                  amendments to the Sovereign Documents and DZ Documents,
                  respectively, in connection with the TFC Conduit Loan and
                  Agent shall have consented to such amendments.

                  (d)      NECESSARY CONSENTS OBTAINED. Agent shall have
                  received evidence, in form and substance satisfactory to
                  Agent, that the consent of each party entitled to consent to
                  this First Amendment has been obtained.

                  (e)      FEES. Borrower shall have paid all fees of all
                  Lenders in connection with the TFC Conduit Loan and this First
                  Amendment.

42.      FURTHER DOCUMENTATION. Borrower agrees to execute and deliver to Lender
any and all additional documentation as Lender may now or hereafter require in
order to effectuate the terms and conditions of this First Amendment.

                                       22
<PAGE>

43.      EFFECT OF AMENDMENT. The Loan Agreement, as herein amended, shall
remain in full force and effect.

44.      RATIFICATION AND CONFIRMATION. Except as herein expressly amended,
Borrower hereby ratifies, confirms, assumes and agrees to be bound by all of
representations, warranties, statements, covenants and agreements set forth in
the Loan Agreement and the other Loan Documents, as previously amended. The
Borrower reaffirms, restates and incorporates by reference all of the
representations, warranties, covenants and agreements made in the Loan Documents
as if the same were made as of this date. The Borrower agrees to pay the Loan
and all related expenses, as and when due and payable in accordance with the
Loan Agreement and the other Loan Documents, and to observe and perform the
Obligations, and do all things necessary which are not prohibited by law to
prevent the occurrence of any Event of Default. In addition, to further secure,
and to evidence and confirm the securing of, the prompt and complete payment and
performance by the Borrower of the Loan and all of the Obligations, for value
received, Borrower unconditionally and irrevocably assigns, pledges and grants
to Agent and each Lender, and hereby confirms or reaffirms the prior granting to
Agent and each Lender of, a continuing first priority Lien, mortgage and
security interest in and to all of the Collateral, except as otherwise set forth
herein, whether now existing or hereafter acquired. Also, as provided in the
Loan Documents, the Loan is and shall be further secured by the Liens and
security interests in favor of Agent and each Lender in the properties and
interests relating to Additional Eligible Resorts, which now or hereafter serve
as collateral security for any Obligations. Upon satisfaction of the
requirements for approval by Agent of Additional Resorts, Borrower shall record,
or cause to be recorded, such mortgages, deeds of trust, deeds to secure debt,
assignments, pledges, security agreements and UCC Financing Statements in the
appropriate public records of the state in which each Resort is located to
further evidence and perfect Agent and each Lender's Lien on the Collateral.
Borrower agrees to deliver or cause to be delivered by its Affiliates, such
mortgages, deeds of trust, deeds to secure debt, assignments, pledges, security
agreements and UCC Financing Statements as Agent may deem necessary to further
evidence and perfect the Agent and each Lender's Lien on the Collateral.

45.      ESTOPPEL. Borrower acknowledges, agrees and confirms that: (a) Advances
under the Loan Agreement have been made prior to the date hereof; (b) all such
Advances made prior to the Closing Date were made in favor of the Original
Borrower and the Borrower in respect of the Existing Eligible Resorts; (c)
Advances made prior to the date of the First Amendment are deemed as having been
made for the benefit of the Borrower and Borrower acknowledges and agrees that
Borrower received a direct and substantial financial benefit from such Advances
and (d) immediately prior to the date of the First Amendment, and without giving
effect to any Advances that may be made pursuant to the First Amendment, the
status of the Loan, including the outstanding principal balance thereof is as
reflected in the Loan Funding Report delivered to and approved by Lender in
connection with the closing of the First Amendment.

         The Loan constitutes valuable consideration to the Borrower, which
consideration is uninterrupted and continuous since the dates on which the Loan
was first made. This First Amendment and the other Loan Documents and the Loan
modifications and transactions provided for or contemplated hereunder or
thereunder, shall in no way adversely affect the Lien or perfection or priority
of any Lien of Lender as of the date hereof in and to any Collateral, and are
not intended

                                       23
<PAGE>

to constitute, and do not constitute or give rise to, any novation, cancellation
or extinguishment of any of Borrower's Obligations existing as of the Closing
Date to Lender, or of any interests owned or held by Lender (and not previously
released) in and to any of the Collateral; it being the intention of the parties
that the transactions provided for or contemplated herein shall be effectuated
without any interruption in the continuity of the value and consideration
received by Borrower, and of the attachment, perfection, priority and
continuation in favor of Lender in and to all Collateral and proceeds.

46.      EFFECTIVE DATE. Upon satisfaction of the conditions precedent set forth
in Section 41 hereof, this First Amendment shall be effective as of the First
Amendment Effective Date, as defined in the Loan Agreement as amended hereby.

47.      MAXIMUM OBLIGATION OF LENDER UNDER THE LOAN, THE ADDITIONAL CREDIT
FACILITY AND THE INVENTORY LOAN. Borrower acknowledges, agrees and confirms that
notwithstanding anything to the contrary herein, in any other Loan Document or
in any document evidencing or securing the Additional Credit Facility or the
Inventory Loan, Lender shall not be obligated to fund any Advance hereunder,
which when taken together with the loans or advances made by the Lender to the
Borrower under this Agreement, the Additional Credit Facility or the Inventory
Loan, would cause the aggregate amount of such loans and advances by the Lender
to Borrower to exceed the maximum aggregate amount as set forth in the Loan
Agreement.

         IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to be executed on their behalf as of the day and year first written above.

Witnessed By:                            TEXTRON FINANCIAL CORPORATION

    [illegible]
-----------------------
                                         By /S/ JOHN T. D'ANNIBALE
                                           -------------------------
/S/ JESSICA CONCORD                      Name: John T. D'Annibale
----------------------                   Its: Vice President

                                         SILVERLEAF RESORTS, INC.

 /S/ GEORGE BEDELL
--------------------
                                         By: /S/ HARRY J. WHITE, JR.
                                            ---------------------------
/S/ LAINE CLOSE                          Name: Harry J. White, Jr.
--------------------                     Its: CFO

                                       24
<PAGE>

STATE OF CONNECTICUT       )
                           ) ss: East Hartford
COUNTY OF HARTFORD         )

         At East Hartford in said County and State on this 22nd day of
December, 2003, personally appeared Nicholas L. Mecca, duly authorized Vice
President of Textron Financial Corporation, and he acknowledged the foregoing
instrument by him signed and sealed to be his free act and deed and the free act
and deed of Textron Financial Corporation.

                 Before me: /S/ MATTHEW CARRANO
                           ------------------------
                           Notary Public in and for said State
                           My Commission Expires:
                           Commissioner of the Superior Court

STATE OF  Texas            )
                           ) ss:
COUNTY OF Dallas           )

         At Dallas in said County and State on this 19th day of  December, 2003,
personally appeared   Harry J. White, Jr. , duly authorized officer of
SILVERLEAF RESORTS, INC., and he/she acknowledged the foregoing instrument by
him/her signed and sealed to be his/her free act and deed and the free act and
deed of Silverleaf Resorts, Inc., a Texas corporation, on behalf of the
corporation.

                 Before me: /S/ R. LAINE CLOSE
                           ---------------------
                           Notary Public in and for said State
                           My Commission Expires:

                                       25
<PAGE>

List of Exhibits and Schedules:

EXHIBIT A-1 Term Loan Component Note
EXHIBIT B-1 Stock and Subordinated Note Pledge Agreement
EXHIBIT C-1 Amendments to Timeshare Documents
EXHIBIT D-1 Borrower's Certificate
EXHIBIT E-1 Authorizing Resolution
EXHIBIT F-1 Business Plan
EXHIBIT G-1 Incumbency Certificate
SCHEDULE A-1 Description of Lenders

</TEXT>
</DOCUMENT>
