| Re: | Amended                and Restated Loan and Security Agreement (Inventory Loan) dated as                of                March 5, 2004, by and between Textron Financial Corporation (“TFC”) and                Silverleaf Resorts, Inc. (“Silverleaf’) (the “Original Loan Agreement”),                as amended by the First Amendment to Amended and Restated Loan and                Security Agreement (Inventory Loan) dated as of February 28, 2005                (the                “First Amendment”), and the Second Amendment to Amended and Restated Loan                and Security Agreement (Inventory Loan) dated as of October 26, 2005                (the                “Second Amendment”) (the Original Loan Agreement, as amended by the First                Amendment and the Second Amendment, the “Inventory Loan                Agreement”) |
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|  | 1. | Section                    7.1(h)(ix) - Weekly                    Financial Reports. Section                    7,1(h)(ix) is hereby deleted in its                    entirety. |
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|   | 2. | Section                7.2(k) - Modifications                of Holler Documents, DZ Documents, Bond Holder Exchange Documents,                Sovereign Documents, Silverleaf Finance II Documents and Other Debt                Instruments. Section                7.2(k) is hereby amended in its entirety and replaced with the following                new Section 7.2(k): |
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|   | 3. | Section                7.2(I) - Compensation                of Senior Management.                Section 7.2(I) is hereby deleted in its                entirety. |
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|   | 4. | Sec(ion                7.2(m) - No                New Construction.                Section 7.2(m) is hereby deleted in its                entirety. |
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|   | 5. | Section                7.3 - Operation                of Borrower’s Business.                Section 7.3 is hereby deleted in its                entirety. |
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|         | Very              truly              yours,TEXTRON FINANCIAL CORPORATION,a Delaware              corporation |
|    |                                                                                                    |                                   |
|         |                                                                                                         | /S/ JOHN              D’ANNIBALE |
|         | By:              John D’Annibale                                                                       |
|         | Its:              V.P.                                                                                       |

|         |                                      |                                                   |
|--------------|-------------------------------------------|--------------------------------------------------------|
|         | SILVERLEAF              RESORTS, INC.     |
|    |                                 |                                              |
|         |                                      | /S/ HARRY              J.              WHITE, JR. |
|         | By:              Harry J. White, Jr.      |
|         | Its:              Chief Financial Officer |

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