<PAGE>   1
                                                                    EXHIBIT 10.4





                               PURCHASE AGREEMENT


                                     between


                            SILVERLEAF RESORTS, INC.
                                    as Seller


                                       and


                           SILVERLEAF FINANCE I, INC.,
                                  as Purchaser






                          Dated as of October 30, 2000



<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                               Page
                                                                               ----
<S>            <C>                                                             <C>
ARTICLE I      DEFINITIONS ....................................................  1
               SECTION 1.1   General ..........................................  1
               SECTION 1.2   Specific Terms ...................................  2
               SECTION 1.3   Certain References ............................... 12

ARTICLE II     CONVEYANCE OF THE RECEIVABLES AND THE
               OTHER CONVEYED PROPERTY ........................................ 13
               SECTION 2.1   Conveyance of the Receivables and
                             the Other Conveyed Property ...................... 13
               SECTION 2.2   Collections ...................................... 15
               SECTION 2.3   Payments and Computations, Etc. .................. 15
               SECTION 2.4   Transfer of Records to Purchaser ................. 15
               SECTION 2.5   Characterization ................................. 16

ARTICLE III    CONDITIONS OF SALE ............................................. 16
               SECTION 3.1   Conditions Precedent to the Initial Purchase ..... 16
               SECTION 3.2   Conditions Precedent to All Purchases ............ 18

ARTICLE IV     REPRESENTATIONS AND WARRANTIES ................................. 23
               SECTION 4.1   Representations and Warranties of the Seller ..... 23
               SECTION 4.2   Indemnification .................................. 27

ARTICLE V      COVENANTS OF THE SELLER ........................................ 30
               SECTION 5.1   Protection of Title of the Purchaser ............. 30
               SECTION 5.2   Other Liens or Interests ......................... 32
               SECTION 5.3   Costs and Expenses ............................... 32
               SECTION 5.4   Compliance with Laws, Etc. ....................... 32
               SECTION 5.5   Collections ...................................... 33
               SECTION 5.6   Separate Conduct of Business ..................... 33
               SECTION 5.7   Financial Covenant ............................... 34
               SECTION 5.8   Amendment of Certain Documents ................... 34
               SECTION 5.9   Audits ........................................... 34

ARTICLE VI     REPURCHASES .................................................... 34
               SECTION 6.1   Repurchase of Receivables Upon Breach
                             of Warranty ...................................... 34
               SECTION 6.2   Reassignments of Purchased Receivables ........... 35
               SECTION 6.3   Waivers .......................................... 35
</TABLE>



<PAGE>   3




<TABLE>
<CAPTION>
                                                                             Page
                                                                             ----
<S>                                                                           <C>
ARTICLE VII MISCELLANEOUS.................................................... 35
            SECTION 7.1  Liability of the Seller............................. 35
            SECTION 7.2  Cost, Expenses and Taxes............................ 35
            SECTION 7.3  Limitation on Liability of the Seller and Others.... 36
            SECTION 7.4  Amendment........................................... 36
            SECTION 7.5  Notices............................................. 36
            SECTION 7.6  Merger and Intergration............................. 37
            SECTION 7.7  Severability of Provisions.......................... 37
            SECTION 7.8  Intention of the Parties............................ 37
            SECTION 7.9  Governing Law....................................... 37
            SECTION 7.10 Counterparts........................................ 37
            SECTION 7.11 Nonpetition Covenant................................ 38
            SECTION 7.12 Binding Effect; Assignability....................... 38
            SECTION 7.13 Third Party Beneficiary............................. 38

EXHIBIT A       FORM OF ASSIGNMENT....................................  Exh. A-1
EXHIBIT B       FORM OF ALLONGE.......................................  Exh. B-1
SCHEDULE A      SCHEDULE OF RECEIVABLES...............................  Sch. A-1
SCHEDULE B      ADDRESSES.............................................  Sch. B-1
SCHEDULE C      PRIOR NAMES AND TRADE NAMES OF SELLER.................  Sch. C-1
</TABLE>



                                       ii


<PAGE>   4



                       PURCHASE AND CONTRIBUTION AGREEMENT

                  THIS PURCHASE AND CONTRIBUTION AGREEMENT, dated as of October
30, 2000, between SILVERLEAF RESORTS, INC., a Texas corporation, as seller (the
"Seller"), and SILVERLEAF FINANCE I, INC., a Delaware corporation, as
purchaser (the "Purchaser").

                                  WITNESSETH:

                  WHEREAS, the Purchaser has agreed to purchase from the Seller
from time to time, and the Seller has agreed to sell to the Purchaser from time
to time, certain Receivables and Other Conveyed Property (in each case, as
hereinafter defined) related thereto on the terms set forth herein.

                  WHEREAS, the Seller may also wish to contribute certain
Receivables and Other Conveyed Property related thereto to the capital of the
Purchaser on the terms set forth herein.

                  NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter contained, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the Purchaser and
the Seller, intending to be legally bound, hereby agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

                  SECTION 1.1 General. The specific terms defined in this
Article include the plural as well as the singular. Words herein importing a
gender include the other gender. References herein to "writing" include
printing, typing, lithography, and other means of reproducing words in visible
form. References to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by this Agreement or the RLSA (as
hereinafter defined). References herein to Persons include their successors and
assigns permitted hereunder or under the RLSA. The terms "include" or
"including" mean "include without limitation" or "including without limitation".
The words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Agreement as a whole and not to any particular Article, Section or
other subdivision, and Article, Section, Schedule and Exhibit references, unless
otherwise specified, refer to Articles and Sections of and Schedules and
Exhibits to this Agreement. Capitalized terms used herein but not defined herein
shall have the respective meanings assigned to such terms in the RLSA.



<PAGE>   5

                  SECTION 1.2 Specific Terms. Whenever used in this Agreement,
the following words and phrases, unless the context otherwise requires, shall
have the following meanings:

                  "Acceptable Environmental Report" means an environmental
report or reports certified to the Seller and assigned by the Seller to the
Purchaser covering a Development and confirming (x) the absence of Hazardous
Materials on, under, or affecting the Land or any other real property or
personal property comprising such Development; (y) that an engineering or
environmental consulting firm has obtained, reviewed, and included within its
report a CERCLIS printout from the EPA, statements from the EPA and other
applicable state and local authorities, and such other information as the
Purchaser or its assigns may reasonably require, including, without limitation,
a Phase I Environmental Inspection, all of which information shall confirm that
there are no known or suspected Hazardous Materials located at, used or stored
on, or transported to or from the Development or in such proximity thereto as to
create a material risk of contamination of any of the related Applicable
Underlying Collateral; and (z) if such Development, or any part thereof, was
constructed prior to 1986, the absence of friable asbestos within the Units,
Common Elements, if any, or elsewhere at such Development. If any such
environmental report reflects the presence of friable asbestos, regardless of
when construction of the Development was completed, such report shall be deemed
not to be an Acceptable Environmental Report. To the extent that an
environmental report complying with the requirements of this definition has been
obtained with respect to a Development, there shall be no requirement to obtain
another environmental report or an update of the prior environmental report, in
each case, with respect to such Development unless there shall have occurred an
event that could make such environmental report materially incorrect or
misleading (in which case a new Acceptable Environmental Report with respect to
such Development shall be obtained).

                  "Agreement" means this Purchase and Contribution Agreement and
all amendments hereof and supplements hereto made in accordance with the terms
hereof.

                  "Allonge" means an allonge or allonges, substantially in one
or more of the forms attached hereto as Exhibit C, endorsing a Receivable from
the Seller to the Purchaser.

                  "Applicable Underlying Collateral" means any and all
collateral granted to the Seller by an Obligor to secure the payment of all
principal, interest, and other amounts owed to the Seller by such Obligor in
connection with a Receivable.

                  "Assignment" means an Assignment executed by the Seller and
the Purchaser, substantially in the form of Exhibit A attached hereto.

                  "Discount" means, (i) with respect to any Receivable with
respect to which the related Obligor has made at least but no more than 17
consecutive monthly payments (in accordance with the terms of such Receivable)
at such time, 20% of the Outstanding Principal Balance of such Receivable, (ii)
with respect to any Receivable with respect to which the related Obligor has
made at least but no more than 18 consecutive monthly payments (in accordance

                                       2

<PAGE>   6

with the terms of such Receivable) at such time, 17.5% of the Outstanding
Principal Balance of such Receivable and (iii) with respect to any Receivable
with respect to which the related Obligor has made 19 or more consecutive
monthly payments (in accordance with the terms of such Receivable) at such time,
15% of the Outstanding Principal Balance of such Receivable; provided, however,
that the foregoing Discount may be revised prospectively by request of either of
the parties hereto to reflect changes in recent experience with respect to
write-offs, timing and cost of Collections, cost of funds and other relevant
factors, provided that such revision is consented to by both of the parties (it
being understood that each party agrees to duly consider such request but shall
have no obligation to give such consent).

                  "Eligible Receivable" means a Receivable that satisfies each
of the following criteria:

                    (a) The relevant Obligor has no claim against the Seller or
               the Purchaser, or any Affiliate thereof, or any defense, set-off,
               or counterclaim with respect to the Receivable.

                    (b) The original of such Receivable and all related
               documents and instruments, the terms of each of which shall
               comply in all material respects with all Applicable Laws, have
               been endorsed by the Seller to the Purchaser in the manner
               prescribed by the Purchaser (or its assigns) and have been
               delivered to the Custodian.

                    (c) Each such Receivable is enforceable in accordance with
               its terms and represents the genuine, legal, valid and binding
               payment obligation of the Obligor related thereto (except as the
               enforcement thereof may be limited by bankruptcy or other laws
               affecting creditor's rights generally and general principles of
               equity), and such Obligor had full legal capacity to execute and
               deliver such Receivable, the related Mortgage (if such Receivable
               arose in connection with the purchase by such Obligor of a Fee
               Simple Interval) and any other documents related thereto, and
               such Receivable has not been prepaid or repaid in full.

                    (d) Each such Receivable is denominated in United States
               Dollars and, at the time of origination and at all times
               thereafter, conformed to all requirements of the Credit and
               Collection Policy applicable to such Receivable and, in any case,
               no such Receivable has been specifically reserved against or
               would be required to be written-off pursuant to the Credit and
               Collection Policy.

                    (e) All requirements of applicable federal, state and local
               laws, and regulations thereunder (including, without limitation,
               but only if and to the extent applicable, usury laws, the Federal
               Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair
               Credit Billing Act, the Fair Credit Reporting Act, the Fair Debt
               Collection Practices Act, the Federal Trade Commission Act, the
               Magnuson-Moss Warranty Act, the Federal Reserve Board's
               Regulations " B" and "Z," the Soldiers' and Sailors' Civil Relief
               Act of 1940 and state adaptations of the National Consumer Act
               and of the Uniform

                                       3

<PAGE>   7

               Consumer Credit Code, the Interstate Land Sales Full Disclosure
               Act, the Real Estate Settlement Procedures Act and all other
               consumer credit laws and equal credit opportunity and disclosure
               laws and any regulations promulgated thereunder) in respect of
               such Receivable, the sale of the Intervals related to such
               Receivable and the sale of credit life and credit accident and
               health insurance and any extended service contracts in connection
               with the sale of the Intervals related to such Receivable, have
               been complied with in all material respects.

                    (f) Such Receivable is not a Defaulted Receivable and, on
               the applicable Purchase Date therefor, is not a Delinquent
               Receivable.

                    (g) The Coupon Rate set forth in such Receivable shall not
               be less than 10%.

                    (h) Such Receivable arises from a bona fide sale by Seller
               of one or more Intervals to an Obligor.

                    (i) The Interval sale from which it arises has not been
               canceled by the related Obligor, any statutory or other
               applicable cancellation or rescission period with respect thereto
               has expired, and the Interval sale otherwise complies fully with
               the terms, provisions, and conditions of this Agreement, the
               other Transaction Documents and all Applicable Laws.

                    (j) If such Receivable is secured by a lien on a Fee Simple
               Interval, a Mortgage covering such Fee Simple Interval is in full
               force and effect and such Mortgage and assignments thereof from
               any Previous Lender to Seller and from Seller to the Purchaser,
               shall have been duly recorded or registered in the Applicable
               Jurisdiction in accordance with all Applicable Laws (and such
               Mortgage has evidence thereon of payment of all required
               documentary stamps and intangible taxes, if any are required).

                    (k) If such Receivable was executed in connection with the
               related Obligor's purchase of an ONS Interval, Non-Disturbance
               Arrangements are in effect with respect to such ONS Interval and
               an Opinion of Counsel has been delivered to the Purchaser (or its
               assignee or designee) which shall contain an opinion that such
               Non-Disturbance Arrangements shall remain in full force and
               effect notwithstanding the occurrence of a Bankruptcy Event with
               respect to the Seller, the ONS Trust or any of their respective
               Affiliates.

                    (l) A down payment and/or other payments have been received
               by Seller from the Obligor who is the maker of the Receivable in
               an amount equal to at least ten percent (10%) of the original
               Purchase Price of the relevant Interval and such Obligor has
               received no cash or other rebates of any kind with respect to the
               Purchase Price of such Interval.

                                       4

<PAGE>   8

                    (m) Upon inclusion of such Receivable in the Net Eligible
               Receivables Balance, the Excess Spread Rate shall be not less
               than 3.50%.

                    (n) Such Receivable (i) has not been Modified or Downgraded
               more than one time since its origination and (ii) if such
               Receivable results from a Downgraded Receivable, such Pledged
               Receivable has not been Modified or Downgraded at any time.

                    (o) The Obligor who owns the relevant Interval has access to
               a Unit within the Development during any use period reserved by
               and/or assigned to such Obligor, all in accordance with the
               Applicable Timeshare Documents.

                    (p) The Obligor who owns the relevant Interval (i) is the
               maker of the related Receivable and an executed Allonge has been
               permanently affixed thereto and (ii) is not an Affiliate of, or
               related to, or employed by the Seller or the Purchaser.

                    (q) The maximum Outstanding Principal Balance of such
               Receivable does not exceed $35,000.

                    (r) (i) The Unit which the relevant Obligor has the right to
               occupy, pursuant to the Applicable Timeshare Documents, has been
               completed and furnished in accordance with the terms and
               provisions of such Obligor's purchase contract, the Development's
               public offering statement, and the other Applicable Timeshare
               Documents, (ii) a certificate of occupancy for such Unit (or the
               building in which the Unit is located) has been issued, and (iii)
               such Unit is not subject to any Lien (other than the lien created
               by the related Mortgage).

                    (s) The forms of promissory note, mortgage, if applicable,
               federal truth-in-lending disclosure statement, if applicable,
               purchase contract, and other documents and instruments relating
               to the Interval purchase transaction giving rise to such
               Receivable have been approved in advance by Purchaser (or its
               assignees or designees) in writing.

                    (t) Such Receivable has an original term of not more than
               120 months; provided that Receivables representing not more than
               10% of the Eligible Receivables Balance on any day may have
               original terms of 120 months.

                    (u) Such Receivable had no material provision thereof
               waived, amended, altered or modified in any respect (including,
               without limitation, as a result of the application of the
               Soldiers' and Sailors' Civil Relief Act of 1940, as amended)
               since its origination (other than in connection with a
               Modification, Downgrade, or Upgrade permitted under this
               Agreement).

                    (v) Such Receivable (i) was originated by the Seller in its
               ordinary course of business and in accordance with its
               underwriting guidelines (and the Seller had

                                       5

<PAGE>   9

               all necessary licenses and permits to originate Receivables in
               the jurisdiction where the related Eligible Development was
               located), (ii) contains customary and enforceable provisions such
               as to render the rights and remedies of the holder thereof
               adequate for realization against the collateral security related
               thereto, (iii) provides for level monthly payments (provided,
               that the payment in the first month and the final -------- month
               of the term of the Receivable may be different from the level
               payment) which, if made when due, shall fully amortize the debt
               evidenced by such Receivable over the original term of such
               Receivable and (iv) arises in respect of an Interval with respect
               to a Unit located at an Eligible Development.

                    (w) Such Receivable was originated by the Seller without any
               fraud or material misrepresentation on the part of the related
               Obligor or the Seller. Such Receivable was sold by the Seller to
               the Purchaser without any fraud or material misrepresentation on
               the part of the Seller.

                    (x) Such Receivable is payable by one or two Obligors, at
               least one of whom is a natural (and not a corporate) Person, and
               if a Receivable is payable by more than one Obligor, each such
               Obligor is jointly and severally obligated to pay the full amount
               payable under such Receivable.

                    (y) The related Obligor has made at least 17 consecutive
               monthly payments in respect of such Receivable on a timely basis
               (and otherwise in accordance with the terms of such Pledged
               Receivable).

                    (z) Such Receivable is not due from the United States or any
               State or from any agency, department, subdivision or
               instrumentality thereof.

                    (aa) The information pertaining to such Receivable set forth
               in the Schedule of Receivables and the related Assignment and
               Assignment Documents is true and correct.

                    (bb) Each Assignment Document exists with respect to such
               Receivable and is duly executed and enforceable in accordance
               with its terms and has been delivered to the Custodian and duly
               recorded in the Applicable Jurisdiction in accordance with all
               Applicable Laws.

                    (cc) The Seller shall have taken all steps necessary under
               all applicable law in order to cause a valid, subsisting and
               enforceable first priority perfected security interest to exist
               in its favor in such Receivable, the Applicable Underlying
               Collateral and all other Collateral related to such Receivable
               (and the proceeds thereof) on or before the applicable Purchase
               Date therefor and immediately prior to the Purchase of such
               Receivable by the Purchaser, there shall have existed in favor of
               the Seller as secured party, a valid, subsisting and enforceable
               first priority perfected lien in the Applicable Underlying
               Collateral and all other Collateral related to such Receivable
               (and the



                                       6
<PAGE>   10

               proceeds thereof), and such security interest is and shall be
               prior to all other liens upon and security interests in such
               Applicable Underlying Collateral and other Collateral (and the
               proceeds thereof) that now exist or may hereafter arise or be
               created.

                    (dd) The Seller shall have taken all steps necessary under
               all applicable law in order to cause to exist in favor of the
               Purchaser, (A) a valid, subsisting and enforceable first priority
               perfected ownership interest in such Receivable and (B) a valid,
               subsisting and enforceable first priority perfected security
               interest in the Applicable Underlying Collateral and all other
               Collateral related to such Receivable (and the proceeds thereof)
               on or before the applicable Purchase Date therefor and upon the
               Purchase of such Receivable by the Purchaser, there shall exist
               in favor of the Purchaser, a valid, subsisting and enforceable
               first priority perfected ownership interest in such Receivable
               and a valid, subsisting and enforceable first priority perfected
               security interest in the Applicable Underlying Collateral and all
               other Collateral related to such Receivable (and the proceeds
               thereof) and such security interest is and shall be prior to all
               other liens upon and security interests therein that now exist or
               may hereafter arise or be created.

                    (ee) The Seller owned such Receivable free and clear of any
               Adverse Claim immediately prior to its sale of such Receivable to
               the Purchaser.

                    (ff) All filings (including, without limitation, UCC and
               real property filings) required to be made by any Person and all
               other actions required to be taken or performed by any Person in
               any jurisdiction to give the Purchaser a first priority perfected
               ownership interest in such Receivables and in all right, title
               and interest of the Seller in, to and under all Applicable
               Underlying Collateral related thereto and the proceeds thereof
               have been made, taken or performed.

                    (gg) With respect to such Receivable, there exists a
               Receivable File and a copy of such Receivable File is in the
               possession of the Custodian.

                    (hh) Such Receivable has not been satisfied, subordinated or
               rescinded, and the Applicable Underlying Collateral securing such
               Receivable has not been released from the lien of the Purchaser,
               in whole or in part.

                    (ii) No such Receivable was originated in, or is subject to
               the laws of, any jurisdiction the laws of which would make
               unlawful, void or voidable the sale, transfer and assignment of
               such Receivable under this Agreement and neither the Obligor nor
               the Seller has entered into any agreement with any Person that
               prohibits, restricts or conditions the assignment of such
               Receivable.

                    (jj) Neither the Obligor nor the Seller has taken any action
               to convey any right to any Person that would result in such
               Person having a right to payments due under such Receivable or
               payments received under the related Acceptable Title Policy, if


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<PAGE>   11

               any, or otherwise to impair the rights of the Purchaser or any of
               its assignees or designees in such Receivable, the Applicable
               Underlying Collateral securing such Receivable or the proceeds
               thereof.

                    (kk) Such Receivable is not assumable by another Person in a
               manner which would release the related Obligor thereof from such
               Obligor's obligations to the Seller or the Purchaser (or any of
               its assignees or designees).

                    (ll) Such Receivable is in full force and effect and
               constitutes the legal, valid and binding obligation of the
               Obligor thereunder and is not subject to any right of rescission,
               setoff, counterclaim or defense (except the potential discharge
               in bankruptcy of such Obligor).

                    (mm) There has been no default, breach, violation or event
               permitting acceleration under the terms of such Receivable, and
               no condition exists or event has occurred and is continuing that
               with notice, the lapse of time or both would constitute a
               default, breach, violation or event permitting acceleration under
               the terms of such Receivable, and there has been no waiver of any
               of the foregoing.

                    (nn) No selection procedures adverse to the Purchaser (or
               its assignees or designees) have been utilized in selecting any
               such Receivable from all other similar receivables originated by
               the Seller.

                    (oo) Upon inclusion of such Receivable in the Net Eligible
               Receivables Balance, (i) the Weighted Average APR of all Eligible
               Receivables shall be not less than 12.00% and (ii) the Weighted
               Average Original Term of all Eligible Receivables shall be no
               more than 85 months.

                    (pp) If such Receivable was executed in connection with the
               related Obligor's purchase of an ONS Interval, a title policy in
               the form of Exhibit J to the RLSA is in effect in favor of the
               ONS Trust which (i) covers the Oak N' Spruce Development and (ii)
               is at all times in an amount not less than the acquisition costs
               incurred by the Seller with respect to the Oak N' Spruce
               Development.

                    (qq) If such Receivable was executed in connection with the
               related Obligor's purchase of a Fee Simple Interval, an
               Acceptable Title Policy is in effect in favor of the Agent, for
               the benefit of the Lender, which (i) covers such Fee Simple
               Interval and (ii) is at all times in an amount of not less than
               the principal amount of the Loan in respect of such Receivable
               under the RLSA.

                    (rr) If such Receivable was executed in connection with the
               related Obligor's purchase of an ONS Interval, (i) such Obligor
               was delivered a Certificate of Beneficial Interest by the Seller
               and such Certificate of Beneficial Interest was pledged and
               delivered by such Obligor to the Seller to secure such Receivable
               (and, if such



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<PAGE>   12

               Certificate of Beneficial Interest was pledged and delivered by
               the Seller to a Previous Lender, reassigned and redelivered to
               the Seller), (ii) such Obligor executed a Mortgage and Assignment
               of Beneficial Interest and such Mortgage and Assignment of
               Beneficial Interest was (A) delivered by such Obligor to the
               Seller and (B) if such Mortgage and Assignment of Beneficial
               Interest was pledged by the Seller to a Previous Lender,
               reassigned by any Previous Lender to the Seller and (iii) proper
               financing statements have been filed in the Commonwealth of
               Massachusetts and the jurisdiction of the residence of the
               Obligor describing and reflecting the pledge of such Receivable,
               Related Security and other Assets by the Obligor to the Seller
               (and, if such Receivable, Related Security and other Assets were
               pledged to a Previous Lender, the pledge and reassignment thereof
               to the Seller), the assignment thereof from the Seller to the
               Purchaser, and other similar instruments or documents, as may be
               necessary or, in the opinion of the Purchaser, desirable under
               the UCC of all appropriate jurisdictions or any comparable law to
               perfect the Purchaser's interest in such Receivable, Related
               Security and other Assets.

                    (ss) If such Receivable was executed in connection with the
               related Obligor's purchase of a Fee Simple Interval, such Obligor
               was delivered a deed with respect to such Fee Simple Interval and
               such deed was duly recorded or registered in the Applicable
               Jurisdiction in accordance with all Applicable Laws.

                    (tt) An Acceptable Environmental Report has been obtained by
               the Seller covering the Development related to such Receivable.

                    (uu) Purchaser has received certified copies of all
               Acceptable Insurance Policies and endorsements thereto with
               respect to the Development relating to such Receivable. In
               addition, the Seller has obtained and is maintaining or has
               caused the Applicable Timeshare Owners' Association to obtain and
               maintain all policies of insurance required by and in accordance
               with the terms of the Credit and Collection Policy and/or which
               are customary in the timeshare industry in the Applicable
               Jurisdiction.

                    (vv) Such Receivable constitutes a "general intangible" or
               an "instrument" within the meaning of the UCC of all
               jurisdictions which govern the perfection of the Purchaser's
               interest therein.

                    (ww) No notice of assessment has been issued to the related
               Obligor in respect to any dues, fees or other charges payable by
               the related Obligor in connection with the ownership and/or use
               of the Interval related to such Receivable.

                    (xx) Such Receivable arose in connection with the purchase
               by the related Obligor of (i) an ONS Interval with respect to a
               Unit located at the Oak N' Spruce Development or (ii) a Fee
               Simple Interval.



                                       9
<PAGE>   13

                    (yy) The Computer Tape or Listing to be made available by
               the Seller to the Purchaser (or its assignees or designees) on
               the Purchase Date on which such Receivable is to be purchased
               hereunder is complete and accurate in all material respects as of
               such Purchase Date.

                    (zz) There has been no default, breach, violation or event
               permitting acceleration under the terms of such Receivable, and
               no condition exists or event has occurred and is continuing that
               with notice, the lapse of time or both would constitute a
               default, breach, violation or event permitting acceleration under
               the terms of such Receivable, and there has been no waiver of any
               of the foregoing.

                    (aaa) The Seller's master computer records relating to such
               Receivable have been clearly and unambiguously marked to show
               that such Receivable has been sold to the Purchaser.

                  "Other Conveyed Property" means, with respect to any
Receivable, all of the Seller's right, title and interest in, to and under:

                    (a) all Applicable Underlying Collateral, all other
               Collateral related thereto and all other collateral security and
               guaranties securing or guaranteeing any or all of such
               Receivable;

                    (b) all Related Security related thereto;

                    (c) all Collections and other monies due and to become due
               in respect thereof and any security therefor;

                    (d) the Assigned Documents to the extent related thereto,
               including, in each case, without limitation, all monies due and
               to become due under or in connection therewith, and all legal
               opinions delivered or rendered in connection with such Receivable
               or any item included in clauses (a) through (d) of this
               definition or any transaction related to any of the foregoing;

                    (e) the Receivable File;

                    (f) the documents, books, records and other information
               (including, without limitation, computer programs, tapes, disks,
               punch cards, data processing software and related property and
               rights) and other Records related thereto or related to the
               obligors thereon;

                    (g) all Liquidation Proceeds related thereto;

                    (h) all UCC financing statements filed with respect to any
               of the foregoing;



                                       10
<PAGE>   14

                    (i) all environmental reports with respect to any portion of
               a Development related to such Receivable;

                    (j) any and all other property in which any interest was
               assigned or transferred to the Seller by the Obligor securing,
               guaranteeing or otherwise relating to or in connection with such
               Receivable; and

                    (k) all proceeds of the foregoing property described in
               clauses (a) through (j) above, including interest, dividends,
               cash, instruments and other property from time to time received,
               receivable or otherwise distributed in respect of, or in exchange
               for, or on account of, the sale or other disposition of such
               Receivable.

                  "Purchase" means a purchase by the Purchaser of Receivables
from the Seller pursuant to Section 2.1.

                  "Purchase Date" has the meaning specified in Section 2.1(b).

                  "Purchase Price" means, with respect to any Receivable that is
the subject of a Purchase hereunder, an amount equal to the Outstanding
Principal Balance of such Receivable on the Purchase Date therefor minus the
Discount with respect to such Receivable.

                  "Purchase Request Notice" has the meaning specified in Section
2.1(b).

                  "Purchaser" has the meaning specified in the Preamble.

                  "Receivable" means a promissory note made and executed by an
Obligor in favor of the Seller in connection with such Obligor's acquisition of
an Interval.

                  "RLSA" means the Receivables Loan and Security Agreement,
dated as of the date hereof, by and among the Purchaser, the Seller, as
Servicer, DG Bank Deutsche Genossenschaftsbank AG, as Agent, Autobahn Funding
Company LLC, as Lender, U.S. Bank Trust National Association, as the Agent's
Bank and Wells Fargo Bank Minnesota, National Association, as the Backup
Servicer, as amended or restated from time to time pursuant to the terms
thereof.

                  "Schedule of Receivables" means the schedule of all
Receivables sold pursuant to this Agreement which is attached hereto as Schedule
A, as amended from time to time pursuant to the terms hereof.

                  "Seller" has the meaning specified in the Preamble.



                                       11
<PAGE>   15

                  "Seller Repurchase Event" means, with respect to any
Receivable, the occurrence of a breach of any of the Seller's representations or
warranties under Section 4.1(a) or (p) with respect to such Receivable or any
related Other Conveyed Property.

                  SECTION 1.3 Certain References. For the purposes of this
Agreement, all references in those definitions in the RLSA set forth below to
(i) the terms "The Agent", "the Agent", "the Agent (for the benefit of the
Lender)", "the Agent, on behalf of the Lender", "the Agent and the Lender", "the
Lender", or other words or phrases of like import shall mean and be a reference
to "the Purchaser (or its assignees or designees)", (ii) any approvals or
consents with respect to any documentation as a condition precedent to any
"Loans hereunder. . ." shall mean and be a reference to any approvals or
consents with respect to any documentation as a condition precedent to any
"Purchases hereunder" and (iii) the term "Pledged Receivable" shall mean and be
a reference to the term "Receivable" as defined herein:

"Applicable Timeshare Documents"
"Applicable Underlying Collateral"
"Collections"
"Defaulted Receivable"
"Delinquent Receivable"
"Eligible Development"

                  Without limiting the foregoing, if any definition in the RLSA
used herein refers to (i) assets, property or documentation being pledged or
assigned by the Purchaser to the Agent, for the benefit of the Lender, or other
words or phrases of like import, for purposes of this Agreement, such definition
shall, to the extent the context requires, refer to such assets, property or
documentation prior to such pledge or assignment or to such assets, property or
documentation being purchased or assigned by the Seller to the Purchaser
hereunder and (ii) persons, documents or other items being acceptable or
satisfactory to, or being subject to the consent or approval of, the Agent or
the Lender or both or other words or phrases of similar import, for purposes of
this Agreement, such definition shall, to the extent the context requires, refer
to such persons, documents or other items being acceptable or satisfactory to,
or being subject to the consent or approval of, the Purchaser (or its assignees
or designees). Further, any reference herein to the term "Receivable File" shall
mean a reference to such term as defined in the RLSA but excluding any
Assignment Documents which provide for the pledge by the Purchaser to the Agent,
for the benefit of Lender, of the Purchaser's interest in any collateral
securing any Receivable.




                                       12
<PAGE>   16

                                   ARTICLE II

                          CONVEYANCE OF THE RECEIVABLES
                         AND THE OTHER CONVEYED PROPERTY

                  SECTION 2.1 Conveyance of the Receivables and the Other
Conveyed Property.

                  (a) Subject to the terms and conditions of this Agreement,
from time to time on and after the date of this Agreement, the Seller may, at
its option, sell, transfer, assign and otherwise convey to the Purchaser,
without recourse (except to the extent specifically provided in Section 4.2 or
6.1 hereof; it being understood and agreed, however, that the Seller has other
obligations and liabilities hereunder in addition to those under such Sections),
and the Purchaser may, at its option, purchase from the Seller, all right, title
and interest of the Seller in, to and under (i) Receivables designated by the
Seller from time to time and (ii) all Other Conveyed Property with respect
thereto. It is the express intention of the Seller and the Purchaser that the
sales, transfers, assignments, conveyances and contributions contemplated by
this Agreement shall constitute sales or contributions of such Receivables and
Other Conveyed Property with respect thereto from the Seller to the Purchaser
(and not loans by the Purchaser to the Seller secured by such Receivables and
related Other Conveyed Property), conveying good title thereto free and clear of
any Liens (other than, in the case of the Purchaser's security interest in any
Applicable Underlying Collateral for such Receivables which constitutes real
property, Permitted Liens and Encumbrances on such real property), which sales,
transfers, assignments and conveyances are, subject to the terms hereof,
absolute and irrevocable and provide the Purchaser with the full benefits of
ownership of such Receivables and Other Conveyed Property, and such Receivables
and Other Conveyed Property shall not be part of the Seller's estate in the
event of the filing of a bankruptcy petition by or against the Seller under any
bankruptcy or similar law. Except for (i) the Seller's repurchase obligations
set forth in Section 6.1 and (ii) the Seller's obligations and liabilities with
respect to the representations, warranties, covenants, indemnities and other
agreements made by the Seller under or pursuant to the terms of this Agreement,
each transfer of Receivables and the related Other Conveyed Property hereunder
is made without liability to the Seller; provided, that such transfer does not
constitute, and is not intended to result in, an assumption by the Purchaser or
any assignee thereof of any obligation of the Seller or any other Person arising
in connection with the Receivables or related Other Conveyed Property.

                  (b) Each Purchase (including the initial Purchase) from the
Seller shall be made on at least two Business Days' prior written notice from
the Seller to the Purchaser, provided that such request is received by the
Purchaser no later than 1:00 P.M. (New York City time) on the Business Day of
receipt. Each such request for a Purchase (each, a "Purchase Request Notice")
shall identify (i) all outstanding Receivables and Other Conveyed Property with
respect thereto originated or purchased subsequent to the immediately preceding
Purchase Date and owned by the Seller on the current Purchase Date, which are to
be purchased by and sold to the Purchaser on such Purchase Date ("Sold
Receivables") and (ii) at its option, outstanding Receivables and Other Conveyed
Property with respect thereto originated or


                                       13
<PAGE>   17

purchased and owned by the Seller on such Purchase Date which are to be
contributed to the Purchaser on such Purchase Date ("Contributed Receivables"),
and shall specify the date of such Purchase (which shall be a Business Day) and
the proposed Purchase Price for such Purchase. The Purchaser shall promptly
notify the Seller whether it has determined to make such Purchase. Each Purchase
Request Notice made by the Seller shall be irrevocable and binding on the
Seller, and the Seller shall indemnify the Purchaser against any loss or expense
incurred by it as a result of any failure by the Seller to complete such
Purchase, including, without limitation, any loss or expense incurred by reason
of the Purchaser having agreed to borrow monies under the RLSA to purchase the
Receivables which are the subject of such Purchase Request Notice. On the date
of each Purchase (each, a "Purchase Date"), the Purchaser shall, upon
satisfaction of the applicable conditions set forth in Article III, pay the
Purchase Price for such Purchase in the manner provided in Section 2.1(c). Each
delivery of a Purchase Request Notice shall be accompanied by an updated
Schedule of Receivables, which schedule shall be attached hereto as Schedule A
and made a part hereof. Each schedule so delivered shall supersede any prior
schedules so delivered.

                  (c) The price paid for Sold Receivables and Other Conveyed
Property related thereto shall be the Purchase Price. Such Purchase Price shall
be determined on or prior to the date of such Purchase and shall be paid by
means of an immediate cash payment to the Seller by wire transfer on the
applicable Purchase Date to an account designated by the Seller on or before
such Purchase Date or by means of proper accounting entries being entered upon
the accounts and records of the Seller and the Purchaser on the applicable
Purchase Date. On each Purchase Date, the Sold Receivables, the Contributed
Receivables and the Other Conveyed Property related thereto shall be assigned to
the Purchaser, and on such Purchase Date the Purchaser shall pay the Purchase
Price for such Sold Receivables and the Other Conveyed Property related thereto.
To the extent that the Purchase Price for any Sold Receivable is less than the
Outstanding Principal Balance of such Receivable, the shortfall shall be deemed
to have been contributed by the Seller to the capital of the Purchaser on the
applicable Purchase Date.

                  (d) On each Purchase Date hereunder, after giving effect to
the Purchase on such date, the Purchaser shall own all Receivables identified as
being sold to the Purchaser under this Section 2.1 as of such date (including
Receivables previously sold by the Seller to the Purchaser hereunder). The
Purchase of any Receivable hereunder shall include all Other Conveyed Property
with respect to such Receivable. The Seller shall not take any action
inconsistent with such ownership and shall not claim any ownership interest in
such sold Receivables or Other Conveyed Property. Except as expressly provided
otherwise herein or in the related Assignment or Assignment Documents, the
Purchaser shall not, in connection with any Purchase hereunder, assume any
obligations or liabilities of the Seller under or with respect to any
Receivables or any Other Conveyed Property.

                  (e) Until the occurrence of a Servicer Default and the
replacement of the Seller as Servicer pursuant to the terms of the RLSA, the
Seller, as Servicer, shall conduct the servicing, administration and collection
of the Receivables transferred hereunder and shall take, or cause to be taken,
all such actions as may be necessary or advisable to service, administer and
collect such Receivables, from time to time, all in accordance with the terms of
the RLSA. In




                                       14
<PAGE>   18

accordance with the Custodial Agreement, certain documents relating to
Receivables sold hereunder shall be delivered to and held in trust by the
Custodian for the benefit of the Purchaser and its assignees, and the Purchaser
hereby instructs the Seller to so deliver such documents to the Custodian. Such
delivery to the Custodian of such documents and the possession thereof by the
Custodian is at the will of the Purchaser and its assignees and in a custodial
capacity for their benefit only.

                  (f) On each Purchase Date, the Seller shall deliver to the
Custodian on behalf of the Purchaser and any assignee thereof each item
contained in the Receivable Files of, and any other chattel paper and
instruments (as each term is defined in the UCC) representing or evidencing, any
of the Receivables being sold or contributed on such Purchase Date or the Other
Conveyed Property related thereto.

                  SECTION 2.2 Collections. Unless otherwise agreed (pursuant to
the RLSA or otherwise), the Seller (as Servicer or otherwise) shall, within two
Business Days after receipt thereof, deposit into the Collection Account, all
Collections of Receivables purchased by the Purchaser hereunder then held by the
Seller (and until so deposited, such Collections shall be held in trust by the
Seller for the benefit of the Purchaser and its assigns).

                  SECTION 2.3 Payments and Computations, Etc.

                  (a) All amounts to be paid by the Seller (whether as Servicer
or otherwise) under this Agreement to the Purchaser or its assignee shall be
paid or deposited as promptly as possible on the day when due in same day funds
to the Collection Account.

                  (b) The Seller shall, to the extent permitted by applicable
law, pay to the Purchaser or its assignee interest on any amount not paid or
deposited by the Seller (whether as Servicer or otherwise) when due hereunder at
an interest rate per annum equal to 2% above the Base Rate, payable on demand.

                  (c) All computations of interest hereunder shall be made on
the basis of a year of 360 days for the actual number of days elapsed. Whenever
any payment or deposit to be made hereunder shall be due on a day other than a
Business Day, such payment or deposit shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
such payment or deposit.

                  SECTION 2.4 Transfer of Records to Purchaser. Each Purchase
of Receivables hereunder shall include the transfer to the Purchaser of all of
the Seller's right, title and interest in and to the records relating to such
Receivables and the related Other Conveyed Property and shall include an
irrevocable non-exclusive license to the use of the Seller's computer software
system to access and create such records. Such license shall be without royalty
or payment of any kind, is coupled with an interest, and shall be irrevocable
until all of the Receivables purchased hereunder are either collected in full or
become Defaulted Receivables.



                                       15
<PAGE>   19

                  The Seller shall take such action reasonably requested by the
Purchaser, from time to time hereafter, that may be necessary or appropriate to
ensure that the Purchaser has an enforceable ownership interest in the records
relating to the Receivables purchased by it hereunder and the related Other
Conveyed Property and rights (whether by ownership, license or sublicense) to
the use of the Seller's computer software system to access and create such
records.

                  In recognition of the Seller's need to have access to the
records transferred to the Purchaser hereunder, the Purchaser hereby grants to
the Seller an irrevocable license to access such records in connection with any
activity arising in the ordinary course of the Seller's business or in
performance of its duties as Servicer, provided that (i) the Seller shall not
disrupt or otherwise materially interfere with the Purchaser's use of and access
to such records during such license period and (ii) the Seller consents to the
assignment and delivery of the records (including any information contained
therein relating to the Seller or its operations) to any assignees or
transferees of the Purchaser provided they agree to hold such records
confidential.

                  SECTION 2.5 Characterization. If, notwithstanding the
intention of the parties expressed in Section 2.1(a), any sale by the Seller to
the Purchaser of Receivables and related Other Conveyed Property hereunder shall
be characterized as a secured loan and not a sale or, such sale shall for any
reason be ineffective or unenforceable, then this Agreement shall be deemed to
constitute a security agreement under the UCC and other applicable law. For this
purpose and without being in derogation of the parties' intention that each sale
of Receivables and related Other Conveyed Property hereunder shall constitute a
true sale thereof, the Seller hereby grants to the Purchaser a duly perfected
security interest in all of the Seller's right, title and interest in, to and
under all Receivables intended by the parties to be conveyed to the Purchaser
pursuant to Section 2.1 and the Other Conveyed Property related thereto, now
existing or hereafter arising.

                                   ARTICLE III

                               CONDITIONS OF SALE

                  SECTION 3.1 Conditions Precedent to the Initial Purchase. The
initial Purchase hereunder is subject to the condition precedent that the
Purchaser shall have received on or before the date of the initial Purchase
under this Agreement, in form and substance satisfactory to the Purchaser:

                    (i) a Purchase Request Notice executed by the Seller with
               respect thereto and an Assignment executed by the Seller and
               setting forth the Receivables to be sold or contributed and the
               Other Conveyed Property with respect thereto to be sold on the
               date of the initial Purchase under this Agreement;


                                       16
<PAGE>   20

                    (ii) a certified copy of the resolutions duly adopted by the
               Board of Directors of the Seller approving this Agreement, the
               Assignments and the other documents to be delivered by it
               hereunder and the transactions and matters contemplated hereby
               and thereby;

                    (iii) the certificate of incorporation, as amended, of the
               Seller, certified by the Secretary of State of Texas, dated as of
               a recent date prior to the date hereof;

                    (iv) a good standing certificate for the Seller issued by
               the Secretary of State of Texas, dated not earlier than 10 days
               prior to the date hereof;

                    (v) a copy of the Seller's bylaws, as amended, certified by
               its Secretary or Assistant Secretary;

                    (vi) a certificate of the Secretary or Assistant Secretary
               of the Seller certifying (x) the names and true signatures of the
               officers authorized on its behalf to sign this Agreement, the
               Assignments, and the other documents to be delivered by it
               hereunder (on which certificate the Purchaser and its assigns may
               conclusively rely until such time as the Purchaser shall receive
               from the Seller a revised certificate meeting the requirements of
               this subsection (vi)), (y) that all representations and
               warranties made by the Seller in this Agreement are true and
               correct in all material respects and that the Seller is in
               compliance with each of its covenants and other agreements set
               forth herein and (z) that the certificate of incorporation of the
               Seller delivered to the Purchaser under clause (iii) above has
               not been amended, modified or supplemented and is in full force
               and effect;

                    (vii) copies of proper financing statements (on Form UCC-1)
               naming the Seller as the assignor of the Receivables and the
               Other Conveyed Property related thereto purchased pursuant to
               this Agreement and the Purchaser as assignee, or other similar
               instruments or documents, in form and substance sufficient for
               filing under the UCC or any comparable law of any and all
               jurisdictions as may be necessary or, in the opinion of the
               Purchaser or any assignee thereof, desirable to perfect the
               Purchaser's ownership interest in all Receivables and the Other
               Conveyed Property related thereto purchased pursuant to this
               Agreement;

                    (viii) copies of properly executed termination statements or
               statements of release (on Form UCC-3) or other similar
               instruments or documents, if any, in form and substance
               satisfactory for filing under the UCC or any comparable law of
               any and all jurisdictions as may be necessary or, in the opinion
               of the Purchaser and its assigns, desirable to release all
               security interests and similar rights of any Person in the
               Receivables and Other Conveyed Property related thereto purchased
               pursuant to this Agreement previously granted by the Seller;


                                       17
<PAGE>   21

                    (ix) certified copies of requests for information or copies
               (on Form UCC-11) (or a similar search report certified by a party
               acceptable to the Purchaser and any assignee thereof), dated a
               date reasonably near and prior to the date of such initial
               conveyance, listing all effective financing statements and other
               similar instruments and documents including those referred to
               above in subsections (vii) and (viii) which name the Seller
               (under its present name and any previous name) as debtor and
               which are filed in the jurisdictions in which filings are to be
               made pursuant to such subsections (vii) and (viii) above,
               together with copies of such financing statements, none of which,
               except those filed pursuant to subsections (vii) and (viii),
               above, shall cover any Receivables or Other Conveyed Property
               related thereto purchased pursuant to this Agreement;

                    (x) any necessary third party consents to the closing of the
               transactions contemplated hereby, in the form and substance
               satisfactory to the Purchaser; and

                    (xi) favorable opinions of Mayer, Brown & Platt, counsel to
               the Seller, and Meadows, Owens, Collier, Reed, Cousins & Blau,
               L.L.P., Texas counsel to the Seller, with respect to such matters
               as the Purchaser or any assignee thereof may reasonably request.

                  SECTION 3.2 Conditions Precedent to All Purchases. The
obligation of the Purchaser to pay for each Receivable and the Other Conveyed
Property related thereto on each Purchase Date (including the initial Purchase
Date) shall be subject to the further conditions precedent that on such Purchase
Date:

                  (a) The following statements shall be true:

                    (i) the representations and warranties of the Seller
               contained in Section 4.1 shall be correct on and as of such
               Purchase Date in all material respects, before and after giving
               effect to the Purchase to take place on such Purchase Date and to
               the application of proceeds therefrom, as though made on and as
               of such date; and

                    (ii) the Seller is in compliance with each of its covenants
               and other agreements set forth herein.

                  (b) The Purchaser shall have received an Assignment, dated the
date of such Purchase Date, executed by the Seller, listing each Receivable
being sold or contributed and Other Conveyed Property with respect thereto being
sold on such Purchase Date and designating each such Receivable as an Eligible
Receivable.

                  (c) The Seller shall have delivered to the Custodian on behalf
of the Purchaser and any assignee thereof a copy of the Assignment described in
clause (b) above for such



                                       18
<PAGE>   22

Purchase Date, together with each item contained in the Receivable Files of, and
any other chattel paper and instruments (as each term is defined in the UCC)
representing or evidencing, any of the Receivables being sold or contributed on
such Purchase Date or the Other Conveyed Property related thereto.

                  (d) The Seller shall have taken such other action, including
delivery of approvals, consents, opinions, documents and instruments to the
Purchaser, as the Purchaser or any assignee thereof may reasonably request.

                  (e) There shall have been no Material Adverse Effect.

                  (f) (A) The Seller shall have timely delivered to the
Purchaser a Purchase Request Notice appropriately completed and executed by the
Seller, (B) the Seller shall have delivered to the Purchaser an Officer's
Certificate from the Seller certifying that (1) the Seller has delivered or
caused to have been delivered to the Custodian a copy of the Assignment related
to the Receivables being Purchased hereunder on such Purchase Date, together
with the Receivable File with respect to the Receivables being Purchased
hereunder on such Purchase Date, (2) the Receivables being Purchased or
contributed hereunder on such Purchase Date are duly endorsed or otherwise duly
assigned by any Previous Lender to the Seller and by the Seller to the Purchaser
and (3) the Mortgages related to each Receivable being Purchased or contributed
hereunder on such Purchase Date and assignments thereof by any Previous Lender
to the Seller and by the Seller to the Purchaser have all been duly recorded in
the appropriate recording offices, and (C) the Custodian has delivered to the
Purchaser by 11:30 A.M. (New York City time) on such Purchase Date, a Receipt
from the Custodian confirming that, inter alia, the Receivable Files received on
such Purchase Date conform with the Assignment delivered to the Custodian on
such Purchase Date.

                  (g) The Seller shall have taken all steps necessary under all
applicable law in order to cause a valid, subsisting and enforceable first
priority perfected security interest to exist in its favor in the Collateral
related to each Receivable (and the proceeds thereof) being Purchased or
contributed hereunder on such Purchase Date and immediately prior to the
Purchase or contribution of such Receivables by the Purchaser hereunder, there
shall have existed in favor of the Seller as secured party, a valid, subsisting
and enforceable first priority perfected lien in the Collateral related to such
Receivable (and the proceeds thereof), and such security interest is and shall
be prior to all other liens upon and security interests in such Collateral (and
the proceeds thereof) that now exist or may hereafter arise or be created.

                  (h) The Seller shall have taken all steps necessary under all
applicable law in order to cause a valid, subsisting and enforceable first
priority perfected ownership interest to exist in favor of the Purchaser in the
Receivables being Purchased or contributed hereunder on such Purchase Date and
in all right, title and interest of the Seller in, to and under the Other
Conveyed Property related thereto (and the proceeds thereof) and immediately
prior to the Purchase or contribution of such Receivables by the Purchaser,
there shall have existed in favor of the Seller as secured party, a valid,
subsisting and enforceable first priority ownership interest



                                       19
<PAGE>   23

in such Receivables and Other Conveyed Property related thereto (and the
proceeds thereof) which ownership interest is free of all liens and security
interests.

                  (i) The Seller shall have taken all steps necessary under all
applicable law in order to cause to exist in favor of the Purchaser a first
priority perfected security interest in the Collateral related to each
Receivable (and the proceeds thereof) being Purchased or contributed hereunder
on such Purchase Date and upon the Purchase or contribution of such Receivables
by the Purchaser, there shall exist in favor of the Purchaser, as secured party,
a valid, subsisting and enforceable first priority perfected security interest
in the Collateral related to each Receivable (and the proceeds thereof) being
Purchased or contributed hereunder on such Purchase Date and such security
interest is and shall be prior to all other liens upon and security interests
therein that now exist or may hereafter arise or be created.

                  (j) Each Receivable being Purchased or contributed hereunder
on such Purchase Date shall have been duly endorsed or otherwise duly assigned
by the Seller to the Purchaser and delivered to the Custodian.

                  (k) All Mortgages related to each Receivable being Purchased
or contributed hereunder on such Purchase Date and assignments thereof from the
Seller to the Purchaser shall each have been duly recorded or registered in the
Applicable Jurisdiction in accordance with all Applicable Laws. All Mortgages
assigned to the Purchaser hereunder must have evidence thereon of payment of all
required documentary stamps and intangible taxes, if any are required.

                  (l) The Seller shall have delivered or caused to have been
delivered to the Custodian a copy of the Assignment related to the Receivables
being Purchased or contributed hereunder on the related Purchase Date, together
with the Receivable File with respect to each Receivable being Purchased or
contributed hereunder on such Purchase Date.

                  (m) No law or regulation shall prohibit, and no order,
judgment or decree of any federal, state or local court or governmental body,
agency or instrumentality shall prohibit or enjoin, the Purchase or contribution
of any Receivables or related Other Conveyed Property on such Purchase Date in
accordance with the provisions hereof.

                  (n) To the extent not provided above, all Assignment Documents
with respect to the Receivables and related Other Conveyed Property being
Purchased or contributed hereunder on such Purchase Date shall have been duly
executed and delivered by the Seller and such Assignment Documents, to the
extent applicable, shall each have been duly recorded or registered in the
Applicable Jurisdiction in accordance with all Applicable Laws.

                  (o) As to each Receivable to be Purchased or contributed
hereunder on such Purchase Date, the Purchaser shall have received an Officer's
Certificate from the Seller certifying that:





                                       20
<PAGE>   24

                    (i) It has received no notice of any asserted or threatened
               defense, offset, counterclaim, discount, or allowance in respect
               of any Receivables or related Other Conveyed Property being
               Purchased or contributed hereunder on such Purchase Date; and

                    (ii) It has received such additional items as the Purchaser
               shall reasonably require, including, without limitation, an aging
               report and delinquency reports of any Receivables or related
               Other Conveyed Property being Purchased or contributed hereunder
               on such Purchase Date.

                  (p) The following conditions shall have been satisfied:

                    (i) Title Policies. If, applicable, with respect to any
               Receivables to be Purchased or contributed on such Purchase Date
               consisting of Receivables secured in whole or in part by Fee
               Simple Intervals, relating to Units located at such Development,
               the Seller has delivered to the Servicer, together with its
               successors and assigns, including, but not limited to, the
               Purchaser or its designee, an Acceptable Title Policy.

                    (ii) Background Documents. The Servicer shall have received
               and approved each of the following:

                         (A) Subdivision Plat. The approved and recorded
                    subdivision plat for all phases of the Developments in which
                    the Encumbered Intervals are located.

                         (B) Environmental Report. If applicable, an Acceptable
                    Environmental Report covering the related Development,
                    including all mortgaged real property which constitutes part
                    of such Development.

                    (iii) Evidence of Insurance. The Purchaser and assigns have
               received policies or binders therefor of all Acceptable Insurance
               Policies and endorsements thereto relating to the Development,
               including but not limited to the Encumbered Intervals. In
               addition, the Purchaser and assigns have received written
               evidence that the Seller has obtained and is maintaining or has
               caused the Applicable Timeshare Owners' Association to obtain and
               maintain all policies of insurance required by and in accordance
               with the terms hereof and of the Credit and Collection Policy and
               which are customary in the timeshare industry in the Applicable
               Jurisdiction together with copies of the most current paid
               insurance premium invoices for such policies and all other
               supporting information and documentation.

                    (iv) Applicable Laws. The Purchaser and assigns have
               received evidence satisfactory to the Purchaser that all
               Encumbered Intervals at the



                                       21
<PAGE>   25

               Development are and will be in compliance with all applicable
               zoning, building, and other Applicable Laws in connection with
               the construction, development, establishment, and operation of
               the Development and the sale, use, marketing, and occupancy of
               Units and Intervals thereat.

                    (v) Litigation. The Purchaser and assigns have received
               evidence satisfactory to the Purchaser and assigns that there
               exists no pending bankruptcy, foreclosure, or other material
               litigation or judgments outstanding against or with respect to
               the Development, the person managing the Development or the
               Seller (each, a "Material Party"). The term "other material
               litigation" as used herein shall not include matters in which (i)
               a Material Party is a plaintiff and no counterclaim is pending;
               or (ii) the Purchaser and assigns determine, in their reasonable
               discretion, that such litigation is immaterial due to settlement,
               insurance coverage, frivolity, or amount or nature of claim. The
               Purchaser and assigns shall have obtained an independent search,
               at the Seller's expense, confirming that no such bankruptcy,
               foreclosure action, or other material litigation or judgment
               exists.

                    (vi) Code/Other Searches. The Purchaser and assigns have
               obtained such searches of the applicable public records as it
               deems necessary under all Applicable Laws to verify that it has a
               first and prior perfected Lien and security interest covering all
               of the Applicable Underlying Collateral.

                    (vii) Taxes and Assessments. The Purchaser and assigns have
               received copies of the most current tax bills related to the
               Development together with evidence satisfactory to it that all
               real estate and personal property taxes and assessments owed by
               or for which the Seller or the Applicable Timeshare Owners'
               Association is responsible for collection have been paid, except
               for such taxes as are being disputed in good faith and with
               respect to which adequate reserves have been established.

                    (viii) Miscellaneous. Such other matters as the Purchaser or
               assigns shall reasonably require.

                  True copies or, to the extent required hereby, originals of
all of the above-referenced documents, instruments, forms, opinions, and other
materials shall be delivered to the Servicer, either prior to or
contemporaneously with the Seller's execution and delivery to the Purchaser of
the sworn written certificate required by this Section. The Servicer's written
acknowledgment of receipt and recommendation of approval of each such item is an
absolute condition precedent to the Purchaser's obligation to Purchase the
relevant Receivables hereunder.


                                       22
<PAGE>   26

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

                  SECTION 4.1 Representations and Warranties of the Seller. The
Seller makes the following representations and warranties, on which the
Purchaser relies in purchasing the Receivables and the Other Conveyed Property
related thereto and in granting a security interest in the Receivables and the
Other Conveyed Property related thereto to the Agent for the benefit of the
Lender under the RLSA. Such representations and warranties are made as of the
execution and delivery of this Agreement and on each Purchase Date and shall
survive the sale, transfer and assignment of the Receivables and the Other
Conveyed Property related thereto hereunder and the grant of a security interest
in such Receivables and the Other Conveyed Property related thereto by the
Purchaser to the Agent for the benefit of the Lender under the RLSA.

                  (a) Eligibility of Receivables. Each Receivable purported to
be sold or contributed by the Seller hereunder is an Eligible Receivable as of
the date of its purported sale or contribution to the Purchaser hereunder.

                  (b) Organization and Good Standing. The Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Texas, with power and authority to own its properties (including
the Receivables and Other Conveyed Property) and to conduct its business as such
properties are currently owned and such business is currently conducted.

                  (c) Due Qualification. The Seller is duly qualified to do
business, and is in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of its property
or the conduct of its business requires such qualification, licenses and/or
approvals.

                  (d) Power and Authority. The Seller has the power, authority
and legal right to execute, deliver and perform this Agreement, the RLSA and
each other Transaction Document to which it is a party and to carry out its
terms and their terms, respectively. The Seller has the power, authority and
legal right to sell and assign the Receivables and Other Conveyed Property
related thereto to be sold and assigned to the Purchaser hereunder and has duly
authorized such sale and assignment to the Purchaser by all necessary action and
the execution, delivery and performance of this Agreement, the RLSA and each
other Transaction Document to which it is a party have been duly authorized by
the Seller by all necessary action.

                  (e) Valid Sale; Binding Obligations. This Agreement, the RLSA,
each Assignment and each other Transaction Document to which the Seller is a
party have been and will be duly executed and delivered by the Seller. Sales
made pursuant to this Agreement will constitute a valid sale, transfer and
assignment of the Receivables and the Other Conveyed Property related thereto to
be purchased hereunder by the Purchaser, enforceable against creditors of, and
purchasers from, the Seller. The Seller shall have no remaining property



                                       23
<PAGE>   27

interest in any Receivable and the Other Conveyed Property related thereto
purchased by the Purchaser hereunder. This Agreement, the RLSA, each Assignment
and each other Transaction Document to which the Seller is a party constitutes
the legal, valid and binding obligation of the Seller enforceable in accordance
with their respective terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation or other similar laws affecting the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific remedies,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.

                  (f) No Violation. The consummation of the transactions
contemplated by this Agreement, the RLSA, each Assignment and the other
Transaction Documents to which the Seller is a party, and the fulfillment of the
terms of this Agreement, the RLSA, each Assignment and the other Transaction
Documents to which the Seller is a party, shall not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without
notice or lapse of time) a default under, the certificate of incorporation or
by-laws of the Seller, or any indenture, agreement, mortgage, deed of trust or
other instrument to which the Seller is a party or by which it is bound or any
of its properties are subject, or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of any such indenture,
agreement, mortgage, deed of trust or other instrument (other than this
Agreement or the RLSA), or violate any law, order, rule or regulation applicable
to the Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Seller or any of its properties, or in any way affect the Seller's
ability to perform its obligations under this Agreement, the RLSA, the
Assignments, or any other Transaction Documents to which it is a party.

                  (g) No Proceedings. There are no proceedings or investigations
pending or threatened against the Seller before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over the Seller or its properties (i) asserting the invalidity of
this Agreement, the RLSA, any Assignment, or any of the other Transaction
Documents, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, the RLSA, any Assignment, or any of the other
Transaction Documents, (iii) seeking any determination or ruling that might
adversely affect the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement, the RLSA, any Assignment or any
other Transaction Documents to which it is a party or (iv) that could have an
adverse effect on the Receivables.

                  (h) No Consents. Other than that which has been obtained, no
consent of any other party and no consent, license, approval or authorization,
or registration, filing or declaration with, any governmental authority, bureau
or agency is required for the due execution, delivery and performance by the
Seller of this Agreement or any other document to be delivered by it hereunder.


                  (i) Chief Executive Office; Tradenames. The principal place of
business and chief executive office of the Seller and the office where the
Seller keeps its records



                                       24
<PAGE>   28


concerning the Receivables are located at the address or addresses listed on
Schedule B hereto. The Seller's legal name is as set forth in this Agreement;
the Seller has not changed its name since the date of its incorporation and the
Seller is not known by any trade names or doing-business-as name, in each
instance, other than those listed on Schedule C hereto.

                  (j) Solvency. The Seller is solvent and will not become
insolvent after giving effect to the transactions contemplated by this Agreement
and the other Transaction Documents. The Seller, after giving effect to the
transactions contemplated by this Agreement and the other Transaction Documents,
will have an adequate amount of capital to conduct its business in the
foreseeable future.

                  (k) Accounting Treatment. For accounting purposes, the Seller
will treat the sale or absolute assignment of each Receivable pursuant to this
Agreement as a sale or absolute assignment of the Seller's full right, title and
ownership interest in such Receivable to the Purchaser (and Contributed
Receivables shall be accounted for as an increase in the stated capital of the
Purchaser).

                  (l) Compliance With Laws. The Seller has complied and will
comply in all material respects with all applicable laws, rules, regulations,
judgments, agreements, decrees and orders with respect to its business and
properties.

                  (m) Taxes. The Seller has filed (on a consolidated basis or
otherwise) on a timely basis all federal, state and other material tax returns
required to be filed, is not liable for taxes payable by any other Person and
has paid or made adequate provisions for the payment of all taxes, assessments
and other governmental charges due from the Seller. No tax lien or similar
adverse claim has been filed, and, to the best of the Seller's knowledge, no
claim is being asserted, with respect to any such tax, assessment or other
governmental charge. Any taxes, fees and other governmental charges payable by
the Seller in connection with the execution and delivery of this Agreement and
the other Transaction Documents and the transactions contemplated hereby or
thereby have been paid, if due, or shall have been paid prior to delinquency.

                  (n) Purchase Request Notices. Each Purchase Request Notice is
accurate in all material respects.

                  (o) Assignments. Each Assignment is accurate in all material
respects as of the date of such Assignment.

                  (p) No Liens, Etc. The Receivables and Other Conveyed Property
related thereto to be sold and assigned to the Purchaser hereunder are owned
(immediately prior to their sale hereunder) by the Seller free and clear of any
Adverse Claim or restrictions on transferability and the Seller has the full
right, corporate power and lawful authority to assign, transfer and pledge the
same and interests therein, and upon transfer hereunder the Purchaser will have
acquired good and marketable title to and a valid and perfected ownership
interest in such


                                       25
<PAGE>   29


Receivables and Other Conveyed Property related thereto, free and clear of any
Adverse Claim or restrictions on transferability. No effective financing
statement or other instrument similar in effect covering all or any part of the
Receivables and Other Conveyed Property related thereto to be purchased
hereunder is on file in any recording office, except such as may have been filed
in favor of the Purchaser in accordance with this Agreement or in favor of the
Agent in accordance with the RLSA or except as shall be released upon purchase
of such Receivables and Other Conveyed Property by the Purchaser.

                  (g) Information True and Correct. All information heretofore
or hereafter furnished by or on behalf of the Seller to the Purchaser in
connection with this Agreement or any transaction contemplated hereby is and
will be true and complete in all material respects and does not and will not
omit to state a material fact necessary to make the statements contained therein
not misleading.

                  (r) ERISA Compliance. The Seller is in compliance with ERISA
and has not incurred and does not expect to incur any liabilities (except for
premium payments arising in the ordinary course of business) to the Pension
Benefit Guaranty Corporation (or any successor thereto) under ERISA.

                  (s) No Material Adverse Effect; No Default. (i) The Seller is
not a party to any indenture, loan or credit agreement or any lease or other
agreement or instrument or subject to any charter or corporate restriction that
could have, and no provision of applicable law or governmental regulation is
reasonably likely to have, a Material Adverse Effect and (ii) the Seller is not
in default under or with respect to any contract, agreement, lease or other
instrument to which the Seller is a party which is reasonably likely to have a
Material Adverse Effect.

                  (t) Financial or Other Condition. There has been no Material
Adverse Effect.

                  (u) Investment Company Status. The Seller is not an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended. The consummation of the transactions
contemplated by this Agreement and the other Transaction Documents to which the
Seller is a party will not violate any provision of such Act or any rule,
regulation or order issued by the Securities and Exchange Commission thereunder.

                  (v) No Shared Obligations. There is not now, nor will there be
at any time in the future, any agreement or understanding between the Seller and
the Purchaser (other than as expressly set forth herein or in the other
Transaction Documents) providing for the allocation or sharing of obligations to
make payments or otherwise in respect of any taxes, fees, assessments or other
governmental charges.

                  (w) Representation and Warranties True and Correct. Each of
the representations and warranties of the Seller contained in the Transaction
Documents to which it


                                       26
<PAGE>   30

is a party is true and correct in all material respects and the Seller hereby
makes each such representation and warranty to, and for the benefit of, the
Purchaser as if the same were set forth in full herein.

                  (x) Intent of Seller. The Seller has not transferred any
interest in any Receivable (or the Other Conveyed Property related thereto) to
the Purchaser with any intent to hinder, delay or defraud any of the Seller's
creditors.

                  (y) Consideration. The Seller has received fair consideration
and reasonably equivalent value in exchange for the sale of the Sold Receivables
hereunder.

                  (z) Filings. (i) All filings (including, without limitation,
UCC and real property filings) required to be made by any Person and all other
actions required to be taken or performed by any Person in any jurisdiction to
give the Purchaser a first priority perfected lien on all Applicable Underlying
Collateral and all other collateral security for all Receivables purchased by
the Purchaser hereunder and the proceeds thereof have been made, taken or
performed; and (ii) all filings (including, without limitation, UCC and real
property filings) required to be made by any Person and all other actions
required to be taken or performed by any Person in any jurisdiction to give the
Purchaser a first priority perfected ownership interest in all Receivables
Purchased hereunder and the proceeds thereof have been made, taken or performed.

                  (aa) Underwriting and Servicing. Each of the Receivables to be
Purchased hereunder was underwritten and is being serviced in conformance with
the Seller's standard underwriting, credit, collection, operating and reporting
procedures and systems (including, without limitation, the Credit and Collection
Policy).

                  (bb) Selection. In selecting the Receivables to be Purchased
under this Agreement, no selection procedures were employed which are intended
to be adverse to the interests of the Purchaser or which would reasonably be
expected to result in the Receivables Purchased hereunder containing a higher
percentage of Defaulted Receivables than the percentage of Defaulted Receivables
in the Receivables retained by the Seller.

                  (cc) Proceeds. No proceeds of any Purchase will be used to
acquire any equity security of a class which is registered pursuant to Section
12 of the Securities Exchange Act of 1934.

                  (dd) Bulk Sales. No transaction contemplated hereby requires
compliance with any bulk sales act or similar law.

                  SECTION 4.2 Indemnification.

                  (a) The Seller shall defend, indemnify and hold harmless the
Purchaser and its assigns and transferees from and against any and all costs,
expenses, losses,


                                       27
<PAGE>   31

damages, claims, and liabilities, arising out of or resulting
from any breach of any of the Seller's representations and warranties and
covenants contained herein.

                  (b) The Seller shall defend, indemnify and hold harmless the
Purchaser and its assigns and transferees against any and all costs, expenses,
losses, damages, claims and liabilities arising out of or resulting from any
acts, events or conditions relating to any Receivable or Other Conveyed Property
Purchased hereunder that occurred, existed or otherwise related to a time prior
to the respective Purchase Date therefor.

                  (c) The Seller shall defend, indemnify and hold harmless the
Purchaser and its assigns and transferees against any and all costs, expenses,
losses, damages, claims and liabilities arising out of or resulting from any
action taken by it in respect of any portion of the Receivables Purchased
hereunder or the Other Conveyed Property related to a Receivable Purchased
hereunder other than in accordance with this Agreement or the RLSA.

                  (d) The Seller agrees to pay, and shall defend, indemnify and
hold harmless the Purchaser and its assigns and transferees from and against,
any taxes that may at any time be asserted against the Purchaser or any of its
assigns or transferees with respect to the transactions contemplated in this
Agreement, including, without limitation, any sales, gross receipts, general
corporation, tangible or intangible personal property, privilege, or license
taxes and costs and expenses in defending against the same, arising by reason of
the acts to be performed by the Seller under this Agreement and imposed against
such Persons.

                  (e) The Seller shall defend, indemnify, and hold harmless the
Purchaser and its assigns and transferees from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such cost,
expense, loss, claim, damage, or liability arose out of, or was imposed upon the
Purchaser or any of its assigns or transferees through the negligence, willful
misfeasance, or bad faith of the Seller in the performance of its duties under
this Agreement or by reason of reckless disregard of the Seller's obligations
and duties under this Agreement.

                  (f) The Seller shall indemnify, defend and hold harmless the
Purchaser and its assigns and transferees from and against any loss, liability
or expense imposed upon, or incurred by, the Purchaser or any of its assigns or
transferees as result of the failure of any Receivable Purchased hereunder, or
the sale or financing of the related Interval, to comply with all requirements
of applicable law in effect as of the related Purchase Date.

                  (g) The Seller shall defend, indemnify and hold harmless the
Purchaser and its assigns and transferees from and against any and all damages,
claims, losses, liabilities and related costs and expenses, including reasonable
attorneys' fees and disbursements, awarded against or incurred by the Purchaser
or any assign or transferee as a result of any action or inaction by the Seller
in connection with any Purchase under this Agreement, including, without
limitation, arising out of or as a result of:


                                       28
<PAGE>   32

                    (i) the inclusion, or purported inclusion, in any Purchase
               of any Receivable that is not an Eligible Receivable on the date
               of such Purchase, or the characterization in any statement made
               by the Seller of any Receivable Purchased hereunder as an
               Eligible Receivable which is not an Eligible Receivable as of the
               date of such statement;

                    (ii) any representation or warranty or statement made or
               deemed made by the Seller (or any of its officers) under or in
               connection with this Agreement, which shall have been incorrect
               when made;

                    (iii) the failure by the Seller to comply with any
               applicable law, rule or regulation with respect to any Receivable
               Purchased hereunder or the related Other Conveyed Property; or
               the failure of any Receivable Purchased hereunder or the related
               Other Conveyed Property to conform to any such applicable law,
               rule or regulation in effect as of the related Purchase Date;

                    (iv) the failure to vest in the Purchaser absolute ownership
               of the Receivables that are, or that purport to be, the subject
               of a Purchase under this Agreement and the Other Conveyed
               Property in respect thereof, free and clear of any Adverse Claim
               arising or accruing prior to the related Purchase Date;

                    (v) the failure of the Seller to have filed, or any delay in
               filing, financing statements or other similar instruments or
               documents under the UCC of any applicable jurisdiction or other
               applicable laws with respect to any Receivables that are, or that
               purport to be, the subject of a Purchase under this Agreement and
               the Other Conveyed Property in respect thereof, whether at the
               time of any Purchase or at any subsequent time;

                    (vi) any dispute, claim, offset or defense (other than
               discharge in bankruptcy of the Obligor) of the Obligor to the
               payment of any Receivable that is, or that purports to be, the
               subject of a Purchase under this Agreement (including, without
               limitation, a defense based on such Receivable or the related
               Other Conveyed Property not being a legal, valid and binding
               obligation of such Obligor enforceable against it in accordance
               with its terms), or any other claim resulting from the sale of
               the Interval or other property related to such Receivable or the
               furnishing or failure to furnish such Other Conveyed Property;

                    (vii) any failure of the Seller, to perform its duties or
               obligations in accordance with the provisions hereof or to
               perform its duties or obligations under any agreement related to
               a Receivable purchased hereunder or the related Other Conveyed
               Property;



                                       29
<PAGE>   33

                    (viii) any products liability or other claim arising out of
               or in connection with merchandise, insurance, other property or
               services which are the subject of any Receivable purchased
               hereunder or the related Other Conveyed Property;

                    (ix) the commingling of Collections of Receivables purchased
               hereunder or the related Other Conveyed Property by the Seller or
               a designee of the Seller, at any time with other funds of the
               Seller;

                    (x) any investigation, litigation or proceeding related to
               this Agreement or the use of proceeds of Purchases or the
               ownership of Receivables, the related Other Conveyed Property, or
               Collections with respect thereto or in respect of any Receivable
               or the related Other Conveyed Property; or

                    (xi) any failure of the Seller to comply with its covenants
               contained in Article V.

                  It is expressly agreed and understood by the parties hereto
(i) that the foregoing indemnification under this Section 4.2 is not intended
to, and shall not, constitute a guarantee of the collectibility or payment of
the Receivables purchased hereunder or any related Other Conveyed Property and
(ii) that nothing in this Section 4.2 shall require the Seller to indemnify any
Person (A) for Receivables which are not collected, not paid or uncollectible on
account of the insolvency, bankruptcy, or financial inability to pay of the
applicable Obligor, (B) for damages, losses, claims or liabilities or related
costs or expenses resulting from such Person's gross negligence or willful
misconduct, or (C) for any income taxes or franchise taxes incurred by such
Person arising out of or as a result of this Agreement or in respect of any
Receivable purchased hereunder or any related Other Conveyed Property.

                  Indemnification under this Section 4.2 shall include
reasonable fees and expenses of counsel and expenses of litigation. The
indemnity obligations hereunder shall be in addition to any obligation that the
Seller may otherwise have under applicable law or any other Transaction Document
and shall survive the termination of this Agreement.

                                    ARTICLE V

                             COVENANTS OF THE SELLER

                  SECTION 5.1 Protection of Title of the Purchaser.

                  (a) On or prior to the date hereof, the Seller shall have
filed or caused to be filed UCC-1 financing statements, executed by the Seller
as seller or debtor, naming the Purchaser as purchaser or secured party, naming
the Agent, for the benefit of the Lender, as assignee and describing the
Receivables Purchased hereunder and the Other Conveyed Property being sold by it
to the Purchaser as collateral, in such locations as the Purchaser or the Agent
shall have reasonably required. From time to time thereafter, the Seller shall
execute and file



                                       30
<PAGE>   34

such financing statements and cause to be executed and filed such continuation
statements, all in such manner and in such places as may be required by law (or
deemed desirable by the Purchaser or any assignee thereof) to fully perfect,
preserve, maintain and protect the interest of the Purchaser under this
Agreement, and the security interest of the Agent for the benefit of the Lender
under the RLSA, in the Receivables Purchased hereunder and the Other Conveyed
Property related thereto, as the case may be, and in the proceeds thereof. The
Seller shall deliver (or cause to be delivered) to the Purchaser, the Lender and
the Agent file-stamped copies of, or filing receipts for, any document filed as
provided above, as soon as available following such filing. In the event that
the Seller fails to perform its obligations under this subsection, the Purchaser
or the Agent may perform such obligations, at the expense of the Seller, and the
Seller hereby grants to the Purchaser and the Agent an irrevocable power of
attorney and license to take any and all steps in order to perform such
obligations in the Seller's or in its own name, as applicable, and on behalf of
the Seller, as are necessary or desirable, in the determination of the Purchaser
or Agent or any assignee thereof.

                  (b) On or prior to each Purchase Date hereunder, the Seller
shall have taken all steps required under applicable law in order to obtain and
assign outright to the Purchaser a first priority perfected security interest in
each item of Other Conveyed Property securing the Receivables being transferred
to the Purchaser on such Purchase Date. On or prior to each Purchase Date
hereunder, the Seller shall have taken all steps required under applicable law
in order for the Purchaser to grant to the Agent, for the benefit of the Lender,
a first priority perfected security interest in the Purchaser's first priority
perfected security interest in each item of Other Conveyed Property securing the
Receivables being transferred to the Purchaser on such Purchase Date and from
time to time thereafter, the Seller shall take all such actions as may be
required by law (or deemed desirable by the Agent) to fully preserve, maintain
and protect the Purchaser's first priority perfected security interest in each
such item of Other Conveyed Property and the Agent's first priority perfected
security interest in the Purchaser's first priority perfected security interest
in such Other Conveyed Property. Upon the occurrence of an Event of Default
under the RLSA, the Agent may instruct the Seller to take all additional steps,
if any, as are necessary or desirable, in the determination of the Agent to
create and/or maintain perfection of the security interest in the Other Conveyed
Property related to each Receivable sold to the Purchaser hereunder on behalf of
the Purchaser and to create and/or maintain perfection of the security interest
in the security interest of the Purchaser in the Other Conveyed Property related
to each Receivable purchased by the Purchaser hereunder on behalf of the Agent,
for the benefit of the Lender, and if the Seller fails to take all such steps,
the Agent may take such steps at the sole expense of the Seller, and the Seller
hereby grants to the Agent an irrevocable power of attorney and license to take
any and all such steps in the Seller's or its own name, as applicable, and on
behalf of the Seller, as are necessary or desirable, in the determination of the
Agent to create and/or maintain perfection of such security interests of the
Purchaser and the Agent, for the benefit of the Lender.

                  (c) The Seller shall not change its name, identity, or
corporate structure in any manner that would or could make any financing
statement or continuation statement filed by the Seller (or by the Purchaser on
behalf of the Seller) in accordance with




                                       31
<PAGE>   35

paragraph (a) above seriously misleading within the meaning of Section 9-402(7)
of the UCC, unless the Seller shall have given the Purchaser, the Custodian, the
Backup Servicer, the Lender and the Agent at least 60 days' prior written notice
thereof, and shall promptly file appropriate amendments to all previously filed
financing statements and continuation statements.

                  (d) The Seller shall give the Purchaser, the Custodian, the
Backup Servicer, the Lender and the Agent at least 60 days' prior written notice
of any relocation of its principal place of business or chief executive office
if, as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement. The Seller shall at
all times maintain each office from which it services Receivables and its
principal executive office within the United States of America.

                  (e) The Seller shall maintain its computer systems so that,
from and after the time of sale or contribution under this Agreement of
Receivables to the Purchaser and the grant of a security interest in such
Receivables by the Purchaser to the Agent for the benefit of the Lender, the
Seller's master computer records (including archives) that shall refer to such
Receivable indicate clearly that such Receivable has been Purchased hereunder
and Pledged under the RLSA. Indication of the Purchaser's ownership interest in,
and of the Agent's security interest for the benefit of the Lender in, a
Receivable purchased by the Purchaser hereunder shall be deleted from or
modified on the Seller's computer systems when, and only when, such Receivable
Purchased hereunder shall be (i) transferred from the ownership of the Purchaser
in connection with any Take-Out Securitization or otherwise, (ii) paid off by
the related Obligor, (iii) liquidated by the Servicer, or (iv) purchased by the
Seller in accordance with Section 6.1 or 6.2 hereof.

                  SECTION 5.2 Other Liens or Interests. Except for the
conveyances hereunder, the Seller will not sell, pledge, assign or transfer to
any other Person, or grant, create, incur, assume or suffer to exist any lien on
the Receivables purchased by the Purchaser hereunder, the Other Conveyed
Property with respect thereto or any interest therein, and the Seller shall
defend the right, title, and interest of the Purchaser and the Agent, for the
benefit of the Lender, in and to the such Receivables and the Other Conveyed
Property related thereto against all claims of third parties claiming through or
under the Seller.

                  SECTION 5.3 Costs and Expenses. The Seller shall pay all
reasonable costs and disbursements in connection with the performance of its
obligations hereunder and the Transaction Documents to which it is a party.

                  SECTION 5.4 Compliance with Laws, Etc.

                  (a) The Seller shall at all times comply with all requirements
of applicable foreign, federal, state and local laws, and regulations thereunder
(including, without limitation to the extent applicable, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit Billing
Act, the Fair Credit Reporting Act, the Fair Debt



                                       32
<PAGE>   36

Collection Practices Act, the Federal Trade Commission Act, the Magnuson-Moss
Warranty Act, the Federal Reserve Board's Regulations " B" and "Z", the
Soldiers' and Sailors' Civil Relief Act of 1940 and state adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code, the Interstate
Land Sales Full Disclosure Act, the Real Estate Settlement Procedures Act and
all other consumer credit laws and equal credit opportunity and disclosure laws
and any regulations promulgated thereunder) in the conduct of its business.

                  (b) The Seller will preserve and maintain its corporate
existence, rights, franchises, qualifications and privileges except to the
extent that the failure so to preserve and maintain such existence, rights,
franchises, qualifications, and privileges would not materially adversely affect
the collectibility of the Receivables purchased by the Purchaser hereunder or
the ability of the Seller to perform its obligations under this Agreement or the
RLSA.

                  SECTION 5.5 Collections.

                  (a) The Seller shall remit all payments by or on behalf of the
Obligors received directly by the Seller to the Collection Account, without
deposit into any intervening account as soon as practicable, but in no event
later than one Business Day after receipt thereof.

                  (b) The Seller will maintain and implement administrative and
operating procedures (including, without limitation, an ability to recreate
records evidencing Receivables purchased by the Purchaser hereunder and related
Other Conveyed Property in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and other
information reasonably necessary for the collection of all Receivables purchased
by the Purchaser hereunder and the related Other Conveyed Property (including,
without limitation, records adequate to permit the daily identification of each
new Receivable to be purchased hereunder and all Collections of and adjustments
to each Receivable purchased hereunder).

                  (c) The Seller will not change its instructions to Obligors
regarding payments to be made by such Obligors with respect to Receivables
purchased hereunder without the prior written consent of the Purchaser and its
assigns (which consent shall not be unreasonably withheld).

                  SECTION 5.6 Separate Conduct of Business. The Seller will:
(i) maintain separate corporate records and books of account from those of the
Purchaser; (ii) conduct its business from an office separate from that of the
Purchaser; (iii) ensure that all oral and written communications, including
without limitation, letters, invoices, purchase orders, contracts, statements
and applications, will be made solely in its own name; (iv) have stationery and
other business forms and a mailing address and a telephone number separate from
those of the Purchaser; (v) not hold itself out as having agreed to pay, or as
being liable for, the obligations of the Purchaser; (vi) not engage in any
transaction with the Purchaser except as contemplated by this Agreement or as
permitted by the RLSA; (vii) continuously maintain as official records the



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<PAGE>   37

resolutions, agreements and other instruments underlying the transactions
contemplated by this Agreement; and (viii) disclose on its annual financial
statements (A) the effects of the transactions contemplated by this Agreement in
accordance with generally accepted accounting principles and (B) that the assets
of the Purchaser are not available to pay its creditors.

                  SECTION 5.7 Financial Covenant. The Seller shall at all times
have and maintain a Tangible Net Worth in an amount which shall not be less than
an amount equal to (i) $140,000,000 plus (ii) seventy-five percent (75%) of the
aggregate amount of proceeds received by the Seller after the date of this
Agreement in connection with (A) each issuance by the Seller of any class or
classes of capital stock after the date of this Agreement and (B) each
incurrence of Debt after the date of this Agreement, other than Debt which shall
be the most senior debt of the Seller plus (iii) fifty percent (50%) of the
aggregate amount of net income (calculated in accordance with GAAP) of the
Seller after the date of this Agreement.

                  SECTION 5.8 Amendment of Certain Documents. The Seller shall
not make or allow to be made any amendment to the Credit and Collection Policy
without the prior written consent of the Purchaser or its assigns.

                  SECTION 5.9 Audits. The Seller will, from time to time during
regular business hours as requested by the Purchaser or its assigns, permit the
Purchaser, or its agents, representatives or assigns, (i) to examine and make
copies of and abstracts from all books, records and documents (including,
without limitation, computer tapes and disks) in the possession or under the
control of the Seller relating to the Receivables purchased hereunder and the
Other Conveyed Property related thereto and (ii) to visit the offices and
properties of the Seller for the purpose of examining such materials described
in clause (i) above, and to discuss matters relating to Receivables purchased
hereunder and the Other Conveyed Property related thereto or the performance of
the Seller hereunder or under the Other Conveyed Property with any of the
officers or employees of the Seller having knowledge of such matters.

                                     ARTICLE VI

                                   REPURCHASES

                  SECTION 6.1 Repurchase of Receivables Upon Breach of Warranty.
Upon the occurrence of a Seller Repurchase Event, the Seller shall, unless such
Seller Repurchase Event shall have been cured in all material respects,
repurchase the applicable Receivable from the Purchaser within three (3)
Business Days of the discovery by, or notice from any Person to, the Seller of
such Seller Repurchase Event, and the Seller shall pay the sum of the
outstanding principal amount of such Receivable plus all accrued but unpaid
interest and fees thereon in each case as of the date of the repurchase from the
Purchaser. Notwithstanding any other provision of this Agreement or the RLSA to
the contrary, the obligation of the Seller under this Section shall not
terminate upon a termination of the Seller as Servicer under the RLSA and shall
be performed in accordance with the terms hereof notwithstanding the failure of
the Servicer or the


                                       34
<PAGE>   38

Purchaser to perform any of their respective obligations with respect to such
Receivable under the RLSA.

                  SECTION 6.2 Reassignment of Purchased Receivables. Upon
deposit in the Collection Account of the price paid to the Purchaser for any
Receivable repurchased by the Seller under Section 6.1, the Purchaser shall (and
shall request the Agent to) take such steps as may be reasonably requested by
the Seller in order to assign to the Seller all of the Purchaser's and the
Agent's right, title and interest in and to such Receivable and all security and
documents and all Other Conveyed Property conveyed to the Purchaser and the
Agent directly relating thereto, without recourse, representation or warranty,
except as to the absence of liens, charges or encumbrances created by or arising
as a result of actions of the Purchaser or the Agent. Such assignment shall be a
sale and assignment outright, and not for security. If, following the
reassignment of a Receivable, in any enforcement suit or legal proceeding, it is
held that the Seller may not enforce any such Receivable on the ground that it
shall not be a party in interest or a holder entitled to enforce the Receivable,
the Purchaser shall, at the expense of the Seller, take such steps as the
Seller, deems reasonably necessary to enforce the Receivable, including bringing
suit in the Purchaser's name.

                  SECTION 6.3 Waivers. No failure or delay on the part of the
Purchaser or any assignee thereof, in exercising any power, right or remedy
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any such power, right or remedy preclude any other or future
exercise thereof or the exercise of any other power, right or remedy.

                                   ARTICLE VII

                                  MISCELLANEOUS

                  SECTION 7.1 Liability of the Seller. The Seller shall be
liable in accordance herewith only to the extent of the obligations in this
Agreement specifically undertaken by the Seller and its representations,
warranties, covenants and other agreements hereunder.

                  SECTION 7.2 Costs, Expenses and Taxes.

                  (a) In addition to the rights of indemnification granted to
the Purchaser pursuant to Section 4.2, the Seller agrees to pay on demand all
costs and expenses in connection with the preparation, execution and delivery of
this Agreement and the other documents and agreements to be delivered hereunder,
including, without limitation, the reasonable fees and out-of-pocket expenses of
counsel for the Purchaser with respect thereto and with respect to advising the
Purchaser as to its rights and remedies under this Agreement, and the Seller
agrees to pay all costs and expenses, if any (including reasonable counsel fees
and expenses), in connection with the enforcement of this Agreement and the
other documents to be delivered hereunder excluding,


                                       35
<PAGE>   39

however, any costs of enforcement or collection of Receivables purchased by the
Purchaser hereunder.

                  (b) In addition, the Seller agrees to pay any and all stamp
and other taxes and fees payable in connection with the execution, delivery,
filing and recording of this Agreement or the other documents or agreements to
be delivered hereunder, and the Seller agrees to save the Purchaser and its
assigns and transferees harmless from and against any liabilities with respect
to or resulting from any delay in paying or omission to pay such taxes and fees.

                  SECTION 7.3 Limitation on Liability of the Seller and Others.
The Seller and any officer, director, employee or agent of the Seller may rely
in good faith on the advice of counsel respecting any matters arising under this
Agreement. The Seller shall not be under any obligation to appear in, prosecute
or defend any legal action that is not incidental to its obligations under this
Agreement, the RLSA or the other Transaction Documents to which it is a party.

                  SECTION 7.4 Amendment. No amendment or waiver of any provision
of this Agreement or consent to any departure by the Seller therefrom shall be
effective unless in a writing signed by the Purchaser and the Agent and, in the
case of any amendment, also by the Seller, and then such amendment, waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given. No failure on the part of the Purchaser to exercise,
and no delay in exercising, any right hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the exercise of any other
right.

                  SECTION 7.5 Notices. All demands, notices and communications
to the Seller or the Purchaser hereunder shall be in writing, personally
delivered, or sent by telecopier (subsequently confirmed in writing), reputable
overnight courier or mailed by certified mail, return receipt requested, and
shall be delivered (a) in the case of the Seller at the following address: 1221
River Bend Drive, Suite 120, Dallas, Texas 75247, Attention: Robert E. Mead,
Facsimile No.: (214) 905-0514 or such other address as shall be designated by
the Seller in a written notice delivered to the Purchaser and (b) in the case of
the Purchaser at the following address: 1221 River Bend Drive, Suite 274,
Dallas, Texas 75247, Attention: Robert E. Mead, Facsimile No.: (214) 688-7067 or
such other address as shall be designated by the Purchaser in a written notice
delivered to the Seller. All such demands, notices and communications shall be
effective, upon receipt, or in the case of (i) notice by mail, five days after
being deposited in the United States mails, first class postage prepaid, (ii)
notice by telex, when telexed against receipt of answerback, or (iii) notice by
facsimile copy, when verbal communication of receipt is obtained, except that
notices and communications pursuant to Article II shall not be effective until
received.



                                       36
<PAGE>   40

                  SECTION 7.6 Merger and Integration. Except as specifically
stated otherwise herein, this Agreement, the RLSA and the other Transaction
Documents set forth the entire understanding of the parties relating to the
subject matter hereof, and all prior understandings, written or oral, are
superseded by this Agreement, the RLSA and the other Transaction Documents. This
Agreement may not be modified, amended, waived or supplemented except as
provided herein.

                  SECTION 7.7 Severability of Provisions. If any one or more of
the covenants, provisions or terms of this Agreement shall be for any reason
whatsoever held invalid, then such covenants, provisions or terms shall be
deemed severable from the remaining covenants, provisions or terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.

                  SECTION 7.8 Intention of the Parties. The execution and
delivery of this Agreement shall constitute an acknowledgment by the Seller and
the Purchaser that they intend that each assignment and transfer herein
contemplated constitutes a sale and assignment outright, and not for security,
of the Receivables and the Other Conveyed Property related thereto conveying
good title thereto free and clear of any liens, from the Seller to the Purchaser
(or a contribution by the Seller to the capital of the Purchaser of such
Receivables and the Other Conveyed Property related thereto conveying good title
thereto free and clear of any liens, from the Seller to the Purchaser), and that
the Receivables and the Other Conveyed Property related thereto shall not be a
part of the Seller's estate in the event of the bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding, or other proceeding under any
federal or state bankruptcy or similar law, or the occurrence of another similar
event, of, or with respect to, the Seller. In the event that any or all such
assignments and transfers are determined to be made as security for a loan made
by the Purchaser to the Seller (or are otherwise determined not to be sales and
assignments outright or contributions of collateral), the parties intend that
the Seller shall have granted to the Purchaser a security interest in all right,
title and interest in and to the Receivables and the Other Conveyed Property
conveyed pursuant to Section 2.1, and that this Agreement shall constitute a
security agreement under applicable law.

                  SECTION 7.9 Governing Law. THIS AGREEMENT SHALL, IN ACCORDANCE
WITH SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY CONFLICTS
OF LAW PRINCIPLES THEREOF THAT WOULD CALL FOR THE APPLICATION OF THE LAWS OF ANY
OTHER JURISDICTION.

                  SECTION 7.10 Counterparts. For the purpose of facilitating the
execution of this Agreement and for other purposes, this Agreement may be
executed simultaneously in any number of counterparts, each of which
counterparts shall be deemed to be an original, and all of which counterparts
shall constitute but one and the same instrument. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this Agreement.





                                       37
<PAGE>   41

                  SECTION 7.11 Nonpetition Covenant. Until one year and one day
after the latest maturing commercial paper issued by a Lender that is an Issuer
under the RLSA shall be paid in full, neither the Seller nor the Purchaser shall
petition or otherwise invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against such Lender (or, in
the case of the Seller, against the Purchaser) under any federal or state
bankruptcy, insolvency or similar law or appointing a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of such
Lender (or the Purchaser) or any substantial part of its property, or ordering
the winding up or liquidation of the affairs of such Lender (or the Purchaser).

                  SECTION 7.12 Binding Effect; Assignability.

                  (a) This Agreement shall be binding upon and inure to the
benefit of the Seller, the Purchaser and their respective successors and
assigns; provided, however, that the Seller may not assign its rights or
obligations hereunder or any interest herein without the prior written consent
of the Purchaser and any assignee thereof. The Purchaser may assign all of its
rights hereunder to an assignee, and such assignee shall have all rights of the
Purchaser under this Agreement (as if such assignee were the Purchaser
hereunder).

                  (b) This Agreement shall create and constitute the continuing
obligation of the parties hereto in accordance with its terms, and shall remain
in full force and effect until such time, after the Collection Date, when all of
the Receivables are collected in full; provided, however, that rights and
remedies with respect to any breach of any representation and warranty made by
the Seller pursuant to Article IV hereof and the provisions of Section 4.2,
Article V and Section 7.11 shall be continuing and shall survive any termination
of this Agreement.

                  SECTION 7.13 Third Party Beneficiary. Each of the parties
hereto hereby acknowledges that the Purchaser intends to assign all of its
rights under this Agreement to the Agent for the benefit of the Lender and the
Seller hereby consents to such assignment. The Agent and the Lender shall be
third party beneficiaries of, and shall be entitled to enforce the Purchaser's
rights and remedies under, this Agreement to the same extent as if they were
parties hereto.



                                       38
<PAGE>   42







                  IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed by their respective officers as of the day and year first above
written.

                                            SILVERLEAF RESORTS, INC., as Seller


                                            By: /s/ ROBERT E. MEAD
                                               ---------------------------------
                                               Name: Robert E. Mead
                                               Title: Chief Executive Officer


                                            SILVERLEAF FINANCE I, INC., as
                                            Purchaser


                                            By: /s/ HARRY J. WHITE, JR.
                                               ---------------------------------
                                               Name: Harry J. White, Jr.
                                               Title: Vice Presidnet & Chief
                                                      Financial Officer





                     [Signature Page to Purchase Agreement]


<PAGE>   43



List of Schedules and Exhibits

Exhibits A  Form of Assignment
Exhibits B  Form of Allonge
Schedule A  Schedule of Receivables
Schedule B  Addresses
Schedule C  Prior Names and Trade Name of Seller