Document:

Ex.
      10.1

    

    FIRST
      AMENDMENT TO LOAN

    AND
      SECURITY AGREEMENT-INVENTORY

    

    THIS
      FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT-INVENTORY
      (this
      "First
      Amendment"),
      dated
      as of October 6, 2006, is by and between Silverleaf Resorts, Inc., a Texas
      corporation, having an address of 1221 River Bend Drive, Suite 120, Dallas,
      Texas 75247 (referred to herein as “Borrower”), Wells Fargo Foothill, Inc., a
      corporation established under the laws of the State of California, having an
      office and place of business at 13727 Noel Road, Suite 1020, Dallas, Texas
      75240
      and Wells Fargo Foothill, Inc., as facility agent and collateral agent (Wells
      Fargo Foothill in both of its capacities is herein referred to as
“Lender”).

    

    RECITALS

    

    A. WHEREAS,
      pursuant to the terms and subject to the conditions of that certain Loan and
      Security Agreement-Inventory, dated as of December 16, 2005 by and between
      Lender and Borrower (such Loan and Security Agreement-Inventory being
      hereinafter referred to as the "Loan
      Agreement"),
      Lender has agreed to make available to Borrower revolving credit facilities
      in a
      maximum principal amount of up to $15,000,000.00; and

    

    B. WHEREAS,
      Borrower and Lender have discussed certain revisions, modifications, additions
      and deletions to the Loan Agreement in an effort to more accurately reflect
      the
      relationship of Borrower and Lender under the Loan Agreement and the
      administrative and operating procedures under the Loan Agreement;
      and

    

    C. WHEREAS,
      in furtherance of the discussions and agreements between Borrower and Lender,
      the parties hereto desire to amend the Loan Agreement and to enter into such
      other agreements as are hereinafter provided.

    

    AGREEMENT

    

    NOW,
      THEREFORE, in consideration of the premises herein contained and for other
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, Borrower and Lender, intending to be legally bound, agree as
      follows:

    

    Article
      1

    Definitions

    

    1.01
      Capitalized terms used and not otherwise defined in this First Amendment shall
      have the meanings assigned to such terms in the Loan Agreement, as amended
      hereby.

    

    Article
      2

    Amendments
      to Loan Agreement

    

    The
      Loan
      Agreement is hereby amended as follows, such amendments to be deemed effective
      as of the First Amendment Effective Date (defined below):

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.01   Amendments
      to Section 1 Definition of Terms.
      As of
      the First Amendment Effective Date, the following Definitions are hereby
      amended:

    

    (A) The
      existing definition of EBITDA shall be deleted and the following new definition
      of EDITDA shall be substituted therefor: 

    

    EBITDA.
      The
      term
      EBITDA means, with respect to any Person for any period: (a) the sum of (i)
      net
      income (exclusive of extraordinary gains or losses including gains or losses
      from the sale or disposition of assets other than in the ordinary course of
      business, it being agreed however that gains from the sale of Notes Receivable
      in connection with syndication or conduit transactions shall be included in
      net
      income as same are in the ordinary course of Borrower’s business, but losses
      resulting from such sales shall not be considered extraordinary losses and
      not
      deducted from net income), (ii) interest expense, (iii) depreciation and
      amortization and other non-cash items properly deducted in determining net
      income, and (iv) federal, state and local income taxes, in each case for such
      Person for such period, computed and calculated in accordance with GAAP minus
      (b) non-cash items properly added in determining net income, in each case for
      the corresponding period.

    

    (B) The
      addition of a new definition: 

    

    UBS
      Finance Facility.
      The
      term “UBS Finance Facility” shall mean that certain credit facility provided by
      UBS Financial Services to Borrower pursuant to the documents listed on Schedule
      1.1(h) hereto (the “UBS Documents).

    

    (C) The
      addition of a new definition: 

    

    "First
      Amendment Effective Date"
      shall
      mean the date that each of the conditions set forth in Section 3 of the First
      Amendment to Loan Agreement by and between Borrower and Lender have been
      satisfied (that is, October 6, 2006)."

    

    2.02   Amendments
      to Section 7-Covenants. 

    

    (A) The
      introductory phrases to Section 7.1(h) shall be deleted in its entirety and
      replaced with: 

    

    So
      long
      as any portion of the Obligations remains unsatisfied, Borrower shall furnish
      in
      hard copy or by electronic transmittal, not later than five (5) days after
      same
      is due (or cause to be furnished, as the case may be) to Agent the
      following:

    

    (B) Section
      7.1(h)(i)(i) shall be deleted in its entirety and replaced under the monthly
      reporting section with:

    

    a
      sales
      report detailing the sales of all Intervals at the Resorts for the period
      covered thereby and a schedule showing any and all changes to Borrower’s sales
      price list, both of which shall be certified by Borrower to be true, correct
      and
      complete and otherwise in a form approved by Agent which shall be required
      to be
      submitted on a monthly basis within ten (10) days of each month
      end,

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    (C) Section
      7.1(w) shall be deleted in its entirety and replaced with:

    

    Additional
      Loan Facility Documents, TFC Conduit and UBS Finance Facility.
      Borrower will comply with the terms and conditions of the CapitalSource Finance
      Facility, the Resort Finance Facility, the Textron Facility, the TFC Conduit
      Loan and the UBS Finance Facility. Nothing contained herein shall prohibit
      or
      limit Borrower’s ability to amend or modify any of the CSF Documents or any of
      the RFC Documents or any of the TFC Documents or any document in connection
      with
      the TFC Conduit Loan or any UBS Documents or documents evidencing any other
      indebtedness of Borrower, provided Borrower provides Agent with a copy of the
      fully executed loan or facility documents promptly within ten (10) days after
      execution.

    

    (E) Section
      7.1(x)(ii) shall be deleted in its entirety and replaced with:

    

    As
      of the
      last day of each fiscal quarter, commencing with the fiscal quarter ending
      December 31, 2005, Borrower will not permit the four quarter cumulative ratio
      of
      Marketing and Sales Expenses to Vacation Interval Sales as recorded on the
      Borrower’s financial statements for the immediately preceding four (4)
      consecutive fiscal quarters of the Borrower to equal or exceed a ratio of .570
      to 1. The calculation used in this covenant for compliance purposes shall be
      without the impact of the new GAAP requirements of SFAS 152.

    

    (F) Section
      7.2(k) shall be deleted in its entirety and replaced with:

    

    Nothing
      contained herein shall prohibit or limit Borrower’s ability to amend or modify
      any of the CSF Documents or any of the RFC Documents or any of the TFC Documents
      or any of the UBS Documents or any document in connection with the TFC Conduit
      Loan or documents evidencing any other indebtedness of Borrower, provided
      Borrower provides Agent with a copy of the fully executed loan documents
      promptly within ten (10) days after execution. 

    

    
      	 	
              2.03

            	
              Amendments
                to Section 8-Events of Default.

            

    

    

    (A) Section 8.1(b) shall
      be
      deleted and replaced in its entirety with:

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    If
      Borrower shall fail to perform or observe any covenant, agreement or warranty
      contained in this Agreement or in any of the Loan Documents, (other than with
      respect to: (i) the failure to make timely payments in respect of the Loan
      as
      provided in Section 8.1(a); or (ii) the violation of: (y) the financial
      covenants in Section 7.1(x); or (z) any negative covenants in Section 7.2)
      and,
      such failure shall continue for fifteen (15) days after notice of such failure
      is provided by Agent, provided however, that if Borrower commences to cure
      such
      failure within such 15 day period, but, because of the nature of such failure,
      cure cannot be completed within 15 days notwithstanding diligent effort to
      do
      so, then, provided Borrower diligently seeks to complete such cure, an Event
      of
      Default shall not result unless such failure continues for a total of thirty
      (30) days). 

    

    (B) Section 8.1(l) shall
      be
      deleted and replaced in its entirety with:

    

    Any
      default as defined in the applicable loan agreement, by Borrower (i) in the
      payment of any indebtedness to any lender, including any indebtedness owed
      under
      the Capital Source Finance Facility, the Resort Finance Facility, the Textron
      Financial Facility, the UBS Finance Facility or the Additional Credit Facility;
      (ii) in the payment or performance of other indebtedness for borrowed money
      or
      obligations secured by any part of the Resort; (iii) in the payment or
      performance of other material indebtedness or obligations (material indebtedness
      or obligations being defined for purposes of this provision as any indebtedness
      or obligation in excess of $200,000) where such default accelerates or permits
      the acceleration (after the giving of notice or passage of time or both) of
      the
      maturity of such indebtedness, or permits the holders of such indebtedness
      to
      elect a majority of the board of directors of Borrower (whether or not such
      default[s] have been waived by such holder) or (iv) the acceleration by
      CapitalSource Finance, LLC under the CSF Documents, Resort Funding, LLC under
      the RFC Documents, Textron Financial Corporation under the TFC Documents, UBS
      Finance under the UBS Documents or the bondholders of their respective credit
      facilities.

    

    2.04   Amendments
      to Section 12-Miscellaneous.
      Section 12.11 shall
      be
      deleted in its entirety
      and the existing Total Agreement Section which is presently un-numbered shall
      become Section 12.11. 

    

    2.05   Amendment,
      Addition and Substitution of Schedules.
      As of
      the First Amendment Effective Date, the form of the following Schedules shall
      be
      as stated:

    

    
      	 	
              (A)

            	
              Schedule
                1.0 to the Loan Agreement shall be deleted and the form attached
                hereto as
                Schedule 1.0 shall be utilized in lieu thereof.

            

    

    

    
      	 	
              (B)

            	
              A
                new Schedule 1.1(d)(iv) shall be added to the Loan Agreement in the
                form
                attached hereto as Schedule 1.1(d) and shall be completed by Borrower
                prior to its addition. 

            

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    2.06   Amendment
      and Substitution of Exhibits.
      As of
      the First Amendment Effective Date, the form of the following Exhibits to the
      Loan Agreement shall be as stated.

    

    
      	 	
              (A)

            	
              The
                form of Mortgages set forth as Exhibit B to the Loan Agreement shall
                be
                amended to reflect that the total obligations secured have been reduced
                from $65,000,000 to $50,000,000. By Lender and Borrower’s signature to
                this First Amendment to Loan and Security Agreement-Inventory, Lender
                and
                Borrower agree in connection with the next amendment adding or deleting
                Intervals to each Mortgage to include a provision in the form of
                an
                amendment or other appropriate document to indicate that the total
                obligations secured have been reduced from $65,000,000 to
                $50,000,000.

            

    

     

    
      	 	
              (B)

            	
              The
                form of Officer’s Certificate set forth as Exhibit D to the Loan Agreement
                shall be deleted and the form attached hereto as Exhibit D shall
                be
                utilized in lieu thereof. By Borrower’s signature to this First Amendment,
                Borrower agrees to utilize the attached Exhibit D form of the Officer’s
                Certificate from and after the First Amendment Effective
                Date.

            

    

    

    

    Article
      3

    Conditions

    

    3.01   Conditions
      to Effectiveness.
      The
      effectiveness of this First Amendment and the agreements of Lender set forth
      herein, are subject to the satisfaction of the following conditions precedent,
      all in form, scope and substance satisfactory to Lender in its sole discretion
      (the date on which such conditions shall have been satisfied being referred
      to
      herein as the "First
      Amendment Effective Date"):

    

    (a) Lender
      shall have received each of the following, and, where applicable, duly executed
      by each party thereto, other than Lender:

    
      	 	 	 

      	 	(i)	This First Amendment; and

      	 	 	 

      	 	(ii)	The
              First Amendment to Loan and Security Agreement-Receivables;
              and

      	 	 	 

      	 	(iii) 	a
              certificate from the principal financial officer of Borrower attesting
              to
              no change to the Articles of Incorporation or By Laws of Borrower since
              December 16, 2005 and/or providing an updated copy of any such changes;
              and

      	 	 	 

      	 	(vi)	A
              resolution from Borrower authorizing the changes to the financing
              relationship with Lender as contained in this First Amendment;
              and

      	 	 	 

      	 	
              (v)

            	
              a
                certificate from the principal financial officer of Borrower transmitting
                to Lender as attachments thereto a true and correct copy of all amendments
                to the CSF Documents since December 16, 2005 and also transmitting
                a revised and updated copy of Schedule 1.1(b) to the Loan Agreement;
                and

            

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	 	
              (vi)

            	
              a
                certificate from the principal financial officer of Borrower transmitting
                to Lender as attachments thereto a true and correct copy of all documents
                between Borrower and UBS Financial Services entered into since December
                16, 2005 and also transmitting a completed Schedule 1.1(h) for attachment
                to and inclusion with the Loan Agreement;
                and

            

    

    

    
      	 	
              (vii)

            	
              a
                certificate from the principal financial officer of Borrower transmitting
                to Lender a certificate attesting to the full payment of all quarterly
                FICA and other federal and state taxes due on or prior to June 30,
                2006
                and attaching thereto such documentary information as Borrower deems
                appropriate to support the statements contained in such certificate;
                and

            

      	 	 	 

      	 	(viii)	a certificate from the principal financial officer
              of
              Borrower which acknowledges that the fee paid and referenced in the
              Fee
              Letter of December 16, 2005 was as of the date of execution of such
              letter
              fully earned and non-refundable and that no refund, rebate or credit
              of
              any portion of such fee paid or deducted by you shall be returnable
              or
              credited to Borrower’s obligations as a result or consequence of
              Borrower’s agreement to reduce the Commitment as herein referenced;
              and

      	 	 	 

      	 	(ix)	Borrower shall have delivered hard copy or electronic
              copies of the following Form 8-k as filed with the Securities and Exchange
              Commission:

      	 	 	
            

      	 	 	Form
              8-k dated 2/3/06, 3/7/06, 3/8/06, 3/23/06, 3/29/06, 4/7/06, 4/10/06,
              5/2/06, 5/4/06 and 5/26/06; and

      	 	 	 

      	 	(x)	All other documents Lender may request with respect
              to
              any matter relevant to this First Amendment or the transactions
              contemplated hereby.

      	 	 	 

    (b) The
      representations and warranties contained herein and in the Loan Agreement and
      the other documents executed in connection with the Loan Agreement (herein
      referred to as "Loan
      Documents"),
      as
      each is amended hereby, shall be true and correct as of the date hereof, as
      if
      made on the date hereof, except for such representations and warranties as
      are
      by their express terms limited to a specific date.

    

    (c) No
      Default or Event of Default shall have occurred and be continuing,.

    

    (d) All
      corporate proceedings taken in connection with the transactions contemplated
      by
      this First Amendment and all documents, instruments and other legal matters
      incident thereto shall be satisfactory to Lender.

    

    (e) Borrower
      shall have paid Lender all fees, costs and expenses incurred by Lender in
      preparation and execution of this First Amendment and in connection with all
      matters referred to herein.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    Article
      4

    Ratifications,
      Representations and Warranties

    

    4.01 Ratifications.
      The
      terms
      and provisions set forth in this First Amendment shall modify and supersede
      all
      inconsistent terms and provisions set forth in the Loan Agreement and the other
      Loan Documents, and, except as expressly modified and superseded by this First
      Amendment the terms and provisions of the Loan Agreement and the other Loan
      Documents are ratified and confirmed and shall continue in full force and
      effect. Borrower and Lender agree that the Loan Agreement and the other Loan
      Documents, as amended hereby, shall continue to be legal, valid, binding and
      enforceable in accordance with their respective terms. This First Amendment
      is
      not intended to be or to create, nor shall it be construed as or constitute,
      a
      novation or an accord and satisfaction but shall constitute an amendment of
      the
      Loan Agreement.

    

    4.02 Representations
      and Warranties.
      Borrower
      hereby represents and warrants to Lender that (a) the execution, delivery and
      performance of this First Amendment and any and all other Loan Documents
      executed and/or delivered in connection herewith have been authorized by all
      requisite corporate action on the part of Borrower and will not violate the
      Articles of Incorporation or Bylaws of Borrower; (b) Borrower's Board of
      Directors has authorized the execution, delivery and performance of this First
      Amendment and any and all other Loan Documents executed and/or delivered in
      connection herewith; (c) the representations and warranties contained in the
      Loan Agreement, as amended hereby, and any other Loan Document are true and
      correct on and as of the date hereof and on and as of the date of execution
      hereof as though made on and as of each such date; (d) no Default or Event
      of
      Default under the Loan Agreement, as amended hereby, has occurred and is
      continuing or exists which with the lapse or passage of time would be or become
      a Default or Event of Default; (e) Borrower is in full compliance with all
      covenants and agreements contained in the Loan Agreement and the other Loan
      Documents, as amended hereby; (f) Borrower has not amended its Articles of
      Incorporation or Bylaws since December 16, 2005; (g) the execution, delivery
      and
      performance of this First Amendment and the Loan Documents executed in
      connection herewith by Borrower are within its powers, have been duly
      authorized, and do not contravene (A) its articles of incorporation or other
      organization documents, or (B) any applicable law; and (h) no consent, license,
      permit, approval or authorization of, or registration, filing or declaration
      with any governmental authority or other Person, is required in connection
      with
      the execution, delivery, performance, validity or enforceability of this First
      Amendment or the Loan Documents executed in connection herewith, as applicable,
      by or against Borrower.

    

    Article
      5

    Miscellaneous
      Provisions

    

    5.01 Survival
      of Representations and Warranties.
      All
      representations and warranties made herein and in the Loan Agreement or any
      other Loan Document, including, without limitation, any document furnished
      in
      connection with this First Amendment, shall survive the execution and delivery
      of this First Amendment and the other Loan Documents, and no investigation
      by
      Lender or any closing shall affect the representations and warranties or the
      right of Lender to rely upon them. 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    5.02 Reference
      to Loan Agreement.
      Each of
      the Loan Agreement and the other Loan Documents, and any and all other documents
      or instruments now or hereafter executed and delivered pursuant to the terms
      hereof or pursuant to the terms of the Loan Agreement, as amended hereby, are
      hereby amended so that any reference in the Loan Agreement and such other Loan
      Documents to the Loan Agreement shall mean a reference to the Loan Agreement,
      as
      amended hereby.

    

    5.03 Severability.
      If
      any
      term or provision of this First Amendment is adjudicated to be invalid under
      applicable laws or regulations, such provision shall be inapplicable to the
      extent of such invalidity without affecting the validity or enforceability
      of
      the remainder of this First Amendment which shall be given effect so far as
      possible.

    

    5.04 Successors
      and Assigns.
      This
      First Amendment is binding upon and shall inure to the benefit of Lender, all
      future holders of any Note and all assignees and transferees, and each of their
      respective successors and permitted assigns. No Borrower may assign or transfer
      any of its rights or obligations hereunder or under any of the other Loan
      Documents without the prior written consent of Lender. 

    

    5.05 Counterparts.
      This
      First Amendment may be executed in one or more counterparts, all of which taken
      together shall constitute but one and the same instrument. This First Amendment
      may be executed by facsimile transmission, which facsimile signatures shall
      be
      considered original executed counterparts for purposes of this Section
      5.05,
      and
      each party to this First Amendment agrees that it will be bound by its own
      facsimile signature and that it accepts the facsimile signature of each other
      party to this First Amendment.

    

    5.06 Effect
      of Waiver.
      No
      consent or waiver, express or implied, by Lender to or for any breach of or
      deviation from any covenant or condition by Borrower shall be deemed a consent
      to or waiver of any other breach of the same or any other covenant, condition
      or
      duty.

    

    5.07 Headings.
      The
      headings, captions, and arrangements used in this First Amendment are for
      convenience only and shall not affect the interpretation of this First
      Amendment.

    

    5.08 Applicable
      Law.
      THIS
      FIRST AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT HERETO SHALL
      BE
      DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY
      AND
      CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE CHOICE OF LAW PROVISIONS SET
      FORTH IN THE LOAN AGREEMENT AND SHALL BE SUBJECT TO NOTICE PROVISIONS OF THE
      LOAN AGREEMENT.

    

    5.09 Final
      Agreement.
      THE
      LOAN
      AGREEMENT AND THE OTHER LOAN DOCUMENTS, EACH AS AMENDED HEREBY, REPRESENT THE
      ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF
      ON
      THE DATE THIS FIRST AMENDMENT IS EXECUTED. THE LOAN AGREEMENT AND THE OTHER
      LOAN
      DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
      CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
      UNWRITTEN ORAL AGREEMENTS BETWEEN THE
      PARTIES. NO MODIFICATION, RESCISSION, WAIVER, RELEASE OR AMENDMENT OF ANY
      PROVISION OF THIS FIRST AMENDMENT SHALL BE MADE, EXCEPT BY A WRITTEN AGREEMENT
      SIGNED BY BORROWER AND LENDER.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    5.10 Release
      by Borrower.
      By
      execution of this First Amendment, Borrower acknowledges and confirms that
      Borrower does not have any offsets, defenses or claims against Lender, or any
      of
      its present or former subsidiaries, affiliates, officers, directors,
      shareholders, employees, agents, representatives, attorneys, predecessors,
      successors or assigns whether asserted or unasserted. To the extent that
      Borrower may have such offsets, defenses or claims, Borrower and each of its
      successors, assigns, parents, subsidiaries, affiliates, predecessors, employees,
      agents, heirs, executors, as applicable, jointly and severally, knowingly,
      voluntarily and intentionally waive, release and forever discharge Lender,
      its
      subsidiaries, affiliates, officers, directors, shareholders, employees, agents,
      attorneys, predecessors, successors and assigns, both present and former
      (collectively the "Lender Affiliates") of and from any and all actual or
      potential claims, demands, damages, actions, requests for sanctions and causes
      of action, torts, obligations, suits, debts, controversies, damages, judgments,
      executions, claims and demands whatsoever, all other liabilities whether known
      or unknown, matured or unmatured, contingent or absolute, of any kind or
      description whatsoever, either in law or in equity or otherwise, asserted or
      unasserted which against Lender and/or Lender Affiliates, Lender as Agent or
      Lender in any other capacity, they ever had, now have, claim to have or may
      later have or which any of any Borrower's successors, assigns, parents,
      subsidiaries, affiliates, predecessors, employees, agents, heirs, executors,
      as
      applicable, both present and former ever had, now has, claim to have or may
      later have, upon or by reason of any manner, cause, causes or thing whatsoever,
      including, without limitation, any presently existing claim or defense whether
      or not presently suspected, contemplated or anticipated, and Borrower hereby
      agrees that Borrower is collaterally estopped from asserting any claims against
      Lender or any of the Lender Affiliates relating to the foregoing.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

     

    IN
      WITNESS WHEREOF, this First Amendment has been executed and is effective as
      of
      the date first above written.

     

    
      	 	 	 
	 	BORROWER:
	 	
              SILVERLEAF
                RESORTS, INC., a Texas corporation

            
	 
 	 
 	 
 
	/S/
              PATRICIA K. DOREY   	By:  	/s/
              HARRY
              J. WHITE, JR. 
	 	
              

              Name:
                Harry J. White, Jr.

            
	 	
              Title:
                Chief Financial Officer

            

    

     

    
      	 STATE OF TEXAS  	)
	 	) ss:
              
	COUNTY OF  DALLAS 	)

    

     

     

    The
      foregoing instrument was acknowledged before me this 20th day of
      September, 2006 by Harry J. White, Jr., Chief Financial Officer of
      Silverleaf Resorts, Inc., a Texas corporation, on behalf of the
      Corporation.

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	 	       
              	/s/ KIM
              W. MURDOCK
	 	
              
                

              

              Notary
                Public

              My
                Commission Expires:

            
	 	 
	 	 
	 	
              LENDER:

              WELLS
                FARGO FOOTHILL, INC., 
                a
                  California corporation

              

            

    

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	________________________________	By:  	/s/
              JAMES
              P. WELSH
	 	
              
                

              

              Name:
                James P. Welsh

              Title:
                Vice President

            
	 	 

    
      	STATE OF TEXAS  	)
	 	)  ss:
              
	COUNTY OF DALLAS 	)

    

     

     

    The
      foregoing instrument was acknowledged before me this 6th day of
      October, 2006 by James P. Welsh, VP of WELLS FARGO FOOTHILL, INC., a
      California corporation, on behalf of the corporation.

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	 	By:  	/s/ DEANIE
              B.
              RENOUF
	 	
              
                

              

              Commissioner of the Superior Court

              Notary
                Public

              My
                Commission Expires:

            
	 	 

    

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	 	 	
              AGENT:

              WELLS
                FARGO FOOTHILL, INC., 
                a
                  California corporation, as Agent

              

            
	 	 
	 
 	 
 	 
 
	________________________________	By:  	/s/
              JAMES P. WELSH
	 	
              
Name:
              James P. Welsh
	 	Title:
              

    

    
      	STATE OF TEXAS  	)
	 	)  ss:
              
	COUNTY OF DALLAS 	
              )

            

    

     

     

    The
      foregoing instrument was acknowledged before me this 6th day of
      October, 2006 by James P. Welsh, VP of WELLS FARGO FOOTHILL, INC., a
      California corporation, on behalf of the corporation.

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	 	By:  	/s/
              DEANIE B. RENOUF
	 	
              
                

              

              Commissioner
                of the Superior Court

              Notary
                Public

              My
                Commission Expires:

            
	 	 

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    List
      of
      Schedules and Exhibits to Agreement not Filed Herewith:

    

    Schedule
      1.0 Identification of Lenders and Their Respective Pro Rata
      Percentage

    Schedule
      1.1(d)(iv) UBS Documents

    Exhibit
      D
      Officer’s Certificate for Financial Statements 

    Certificate
      Pursuant to Section 3.01(a)(iii)

    Certificate
      Pursuant to Section 3.01(a)(iv)

    Certificate
      Pursuant to Section 3.01(a)(v)

    Certificate
      Pursuant to Section 3.01(a)(vi)

    Certificate
      Pursuant to Section 3.01(a)(vii)

    Certificate
      Pursuant to Section 3.01(a)(viii)

     

    
      
        
        

      

      12Ex.
      10.2

    

    FIRST
      AMENDMENT TO LOAN

    AND
      SECURITY AGREEMENT-RECEIVABLES

    

    THIS
      FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT-RECEIVABLES
      (this
      "First
      Amendment"),
      dated
      as of October 6, 2006, is by and between Silverleaf Resorts, Inc., a Texas
      corporation, having an address of 1221 River Bend Drive, Suite 120, Dallas,
      Texas 75247 (referred to herein as “Borrower”), Wells Fargo Foothill, Inc., a
      corporation established under the laws of the State of California, having an
      office and place of business at 13727 Noel Road, Suite 1020, Dallas, Texas
      75240
      and Wells Fargo Foothill, Inc., as facility agent and collateral agent (Wells
      Fargo Foothill in both of its capacities is herein referred to as
“Lender”).

    

    RECITALS

    

    A. WHEREAS,
      pursuant to the terms and subject to the conditions of that certain Loan and
      Security Agreement-Receivables, dated as of December 16, 2005 by and between
      Lender and Borrower (such Loan and Security Agreement-Receivables being
      hereinafter referred to as the "Loan
      Agreement"),
      Lender has agreed to make available to Borrower revolving credit facilities
      in a
      maximum principal amount of up to $50,000,000.00; and

    

    B. WHEREAS,
      Borrower and Lender have discussed certain revisions, modifications, additions
      and deletions to the Loan Agreement in an effort to more accurately reflect
      the
      relationship of Borrower and Lender under the Loan Agreement and the
      administrative and operating procedures under the Loan Agreement;
      and

    

    C. WHEREAS,
      in furtherance of the discussions and agreements between Borrower and Lender,
      the parties hereto desire to amend the Loan Agreement and to enter into such
      other agreements as are hereinafter provided.

    

    AGREEMENT

    

    NOW,
      THEREFORE, in consideration of the premises herein contained and for other
      good
      and valuable consideration, the receipt and sufficiency of which are hereby
      acknowledged, Borrower and Lender, intending to be legally bound, agree as
      follows:

    

    Article
      1

    Definitions

    

    1.01  
      Capitalized terms used and not otherwise defined in this First Amendment shall
      have the meanings assigned to such terms in the Loan Agreement, as amended
      hereby.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    Article
      2

    Amendments
      to Loan Agreement

    

    The
      Loan
      Agreement is hereby amended as follows, such amendments to be deemed effective
      as of the First Amendment Effective Date (defined below):

     

        2.01   Amendments
      to Section 1 Definition of Terms.
      As of
      the First Amendment Effective Date, the following Definitions are hereby
      amended:

    

    (A) The
      reference in the second sentence to the figure $50,000,000 in the Definitional
      Term “Commitment” shall be deleted in its entirety and replaced with
      $35,000,000. 

    

    (B) The
      existing definition of EBITDA shall be deleted and the following new definition
      of EDITDA shall be substituted therefor: 

    

    EBITDA.
      The
      term
      EBITDA means, with respect to any Person for any period: (a) the sum of (i)
      net
      income (exclusive of extraordinary gains or losses including gains or losses
      from the sale or disposition of assets other than in the ordinary course of
      business, it being agreed however that gains from the sale of Notes Receivable
      in connection with syndication or conduit transactions shall be included in
      net
      income as same are in the ordinary course of Borrower’s business, but losses
      resulting from such sales shall not be considered extraordinary losses and
      not
      deducted from net income), (ii) interest expense, (iii) depreciation and
      amortization and other non-cash items properly deducted in determining net
      income, and (iv) federal, state and local income taxes, in each case for such
      Person for such period, computed and calculated in accordance with GAAP minus
      (b) non-cash items properly added in determining net income, in each case for
      the corresponding period.

    

    (C) The
      existing qualification of Eligible Notes Receivable Subsection (h) shall be
      deleted and the following new Subsection (h) qualification of Note Receivable
      Promissory Note shall be substituted therefor: 

    

    (i)
      a
      cash down payment has been received from Purchaser or the maker in an amount
      equal to at least ten percent (10%) of the actual purchase price of a one week
      Interval and Purchaser shall have received no cash or other rebates of any
      kind,
      or (ii) in connection with an acquisition of an Interval from another Purchaser,
      the combined equity of such acquired Interval with the existing equity of an
      owned Interval is equivalent to an amount equal to at least ten percent (10%)
      of
      the actual purchase price of the acquired or assumed Interval and Purchaser
      shall have received no cash or other rebates of any kind, or (iii) in connection
      with an upgrade of an existing owned Interval, the cash amount, if any, together
      with the existing equity of the owned Interval which is traded in is equivalent
      to an amount equal to at least ten percent (10%) of the purchase price of the
      upgraded Interval and Purchaser shall have received no cash or other rebates
      of
      any kind;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    (D) The
      existing qualification of Eligible Notes Receivable Subsection (n) shall be
      deleted and the following new Subsection (n) qualification of Note Receivable
      Promissory Note shall be substituted therefor: 

     

    the
      maximum remaining principal balance of any such Note Receivable shall not exceed
      $50,000 and the total maximum remaining principal balance of the Notes
      Receivable executed by any one Purchaser or other maker shall not exceed $75,000
      in the aggregate (or such greater amount as may be approved in writing in
      advance by Agent), provided however that the aggregate amount of Notes
      Receivable in excess of $50,000 shall not exceed ten (10%) percent of all
      Eligible Note Receivables from time to time;

    

    

    (E) The
      addition of a new definition: 

    

    UBS
      Finance Facility.
      The
      term “UBS Finance Facility” shall mean that certain credit facility provided by
      UBS Financial Services to Borrower pursuant to the documents listed on Schedule
      1.1(h) hereto (the “UBS Documents).

    

    (F) The
      addition of a new definition: 

    

    "First
      Amendment Effective Date"
      shall
      mean the date that each of the conditions set forth in Section 3 of the First
      Amendment to Loan Agreement by and between Borrower and Lender have been
      satisfied (that is, October 6, 2006)."

    

    2.02   Amendments
      to Section 2-The Loan.
      As of
      the First Amendment Effective Date, the first sentence of Section 2.1(d) shall
      be deleted in its entirety and replaced with:

    Borrower’s
      obligations to pay the principal of and interest on the Loan or Loans made
      by
      each Lender shall be evidenced by the Note to the Agent, as Agent for each
      Lender, which Note shall be dated as of the date hereof and be in the principal
      amount of $35,000,000.00. 

    

    2.03   Amendments
      to Section 3-The Collateral.
      As of
      the First Amendment Effective Date, the following provisions of Section 3 of
      the
      Loan Agreement are hereby amended and restated as follows:

    

    (A) The
      last
      sentence of Section 3.6 shall be deleted in its entirety and replaced with:
      

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

    Solely
      for purposes of calculating the foregoing fifteen percent (15%) limit, an
      Eligible Note Receivable shall not be considered “to have been modified” if the
      Purchaser in respect of such note: (y) has made at least a ten percent (10%)
      cash down payment on the Interval or in connection with an upgrade of an
      Interval has utilized equity accrued on an existing Interval equivalent to
      at
      least a ten percent (10%) down payment on an upgraded Interval and (z) has
      made
      at least six (6) monthly payments, with at least four (4) payments being made
      after the date the note was modified; (iv) Borrower immediately provides Agent
      with notice of any such modification together with any original documentation
      evidencing such modification and (v) no Eligible Note Receivable is modified
      more than once in any twelve (12) month period or more than twice during the
      term of such Eligible Note Receivable.

     

    (B) Section
      3.7 shall be deleted in its entirety and replaced with: 

    

    Notwithstanding
      anything herein to the contrary, upon the sale by a Purchaser of an Interval,
      the new Purchaser of the Interval may be substituted as obligor under the
      Eligible Note Receivable in question, provided that: (i) said new Purchaser
      assumes in writing all of the obligations of the original obligor under the
      Eligible Note Receivable in question; (ii) the Eligible Note Receivable
      continues to meet all of the criteria for an Eligible Note Receivable as set
      forth herein and (iii) the new Purchaser has made a cash down payment equal
      to
      at least 10% of the sales price of the Interval in question or has equity in
      connection with an existing owned Interval which is traded in which combined
      with the cash paid, if any, is equivalent to at least the above-referenced
      ten
      percent (10%) down payment of the sales price of the acquired
      Interval.

    

    
      	 	
              2.04

            	
              Amendments
                to Section 7-Covenants. 

            

    

    

    (A) The
      introductory phrases to Section 7.1(h) shall be deleted in its entirety and
      replaced with: 

    

    So
      long
      as any portion of the Obligations remains unsatisfied, Borrower shall furnish
      in
      hard copy or by electronic transmittal, not later than five (5) days after
      same
      is due (or cause to be furnished, as the case may be) to Agent the
      following:

    

    (B) Section
      7.1(h)(i)(i) shall be deleted in its entirety and replaced under the monthly
      reporting section with:

    

    a
      sales
      report detailing the sales of all Intervals at the Resorts for the period
      covered thereby and a schedule showing any and all changes to Borrower’s sales
      price list, both of which shall be certified by Borrower to be true, correct
      and
      complete and otherwise in a form approved by Agent which shall be required
      to be
      submitted on a monthly basis within ten (10) days of each month
      end,

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

    (C)
      Section
      7.1(h)(i)(k) shall be deleted in its entirety and replaced with the following
      to
      be furnished on a semi annual basis as of June 30 and December 31 of each
      calendar year:

     

    a
      Certificate from the principal financial officer of Borrower which confirms
      that
      the underwriting criteria set forth on Schedule 1.1(d) to the Loan Agreement
      is
      the approved underwriting criteria for the Borrower in its sales operations
      and
      has been in full force and effect since the date of the last
      certification

     

    (D) Section
      7.1(x) shall be deleted in its entirety and replaced with: 

     

    Additional
      Loan Facility Documents, TFC Conduit and UBS Finance Facility.
      Borrower will comply with the terms and conditions of the CapitalSource Finance
      Facility, the Resort Finance Facility, the Textron Facility, the TFC Conduit
      Loan and the UBS Finance Facility. Nothing contained herein shall prohibit
      or
      limit Borrower’s ability to amend or modify any of the CSF Documents or any of
      the RFC Documents or any of the TFC Documents or any document in connection
      with
      the TFC Conduit Loan or any UBS Documents or documents evidencing any other
      indebtedness of Borrower, provided Borrower provides Agent with a copy of the
      fully executed loan or facility documents promptly within ten (10) days after
      execution.

    

    (E) Section
      7.1(y)(ii) shall be deleted in its entirety and replaced with:

    

    As
      of the
      last day of each fiscal quarter, commencing with the fiscal quarter ending
      December 31, 2005, Borrower will not permit the four quarter cumulative ratio
      of
      Marketing and Sales Expenses to Vacation Interval Sales as recorded on the
      Borrower’s financial statements for the immediately preceding four (4)
      consecutive fiscal quarters of the Borrower to equal or exceed a ratio of .570
      to 1. The calculation used in this covenant for compliance purposes shall be
      without the impact of the new GAAP requirements of SFAS 152.

    

    (F) Section
      7.2(m) shall be deleted in its entirety and replaced with:

    

    Nothing
      contained herein shall prohibit or limit Borrower’s ability to amend or modify
      any of the CSF Documents or any of the RFC Documents or any of the TFC Documents
      or any of the UBS Documents or any document in connection with the TFC Conduit
      Loan or documents evidencing any other indebtedness of Borrower, provided
      Borrower provides Agent with a copy of the fully executed loan documents
      promptly within ten (10) days after execution.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    
      	 	
              2.05

            	
              Amendments
                to Section 8-Events of Default.

            

    

    

    
      	 	
              (A)

            	
              Section 8.1(b) shall
                be deleted and replaced in its entirety
                with:

            

    

    

    If
      Borrower shall fail to perform or observe any covenant, agreement or warranty
      contained in this Agreement or in any of the Loan Documents, (other than with
      respect to: (i) the failure to make timely payments in respect of the Loan
      as
      provided in Section 8.1(a); (ii) the failure to deliver payments made under
      the
      Pledged Notes Receivable directly to Agent as required pursuant to Section
      2.3
      as provided in Section 8.1(h); or (iii) violation of: (y) the financial
      covenants in Section 7.1(y); or (z) any negative covenants in Section 7.2)
      and,
      such failure shall continue for fifteen (15) days after notice of such failure
      is provided by Agent, provided however, that if Borrower commences to cure
      such
      failure within such 15 day period, but, because of the nature of such failure,
      cure cannot be completed within 15 days notwithstanding diligent effort to
      do
      so, then, provided Borrower diligently seeks to complete such cure, an Event
      of
      Default shall not result unless such failure continues for a total of thirty
      (30) days. 

    

    
      	 	
              (B)

            	
              Section 8.1(m) shall
                be deleted and replaced in its entirety
                with:

            

    

    

    Any
      default as defined in the applicable loan agreement, by Borrower (i) in the
      payment of any indebtedness to any lender, including any indebtedness owed
      under
      the Capital Source Finance Facility, the Resort Finance Facility, the Textron
      Financial Facility, the UBS Finance Facility or the Additional Credit Facility;
      (ii) in the payment or performance of other indebtedness for borrowed money
      or
      obligations secured by any part of the Resort; (iii) in the payment or
      performance of other material indebtedness or obligations (material indebtedness
      or obligations being defined for purposes of this provision as any indebtedness
      or obligation in excess of $200,000) where such default accelerates or permits
      the acceleration (after the giving of notice or passage of time or both) of
      the
      maturity of such indebtedness, or permits the holders of such indebtedness
      to
      elect a majority of the board of directors of Borrower (whether or not such
      default[s] have been waived by such holder) or (iv) the acceleration by
      CapitalSource Finance, LLC under the CSF Documents, Resort Funding, LLC under
      the RFC Documents, Textron Financial Corporation under the TFC Documents, UBS
      Finance under the UBS Documents or the bondholders of their respective credit
      facilities.

    

    

    2.06   Amendments
      to Section 12-Miscellaneous.
      Section 12.13 shall
      be
      deleted in its entirety.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

    2.07   Amendment,
      Addition and Substitution of Schedules.
      As of
      the First Amendment Effective Date, the form of the following Schedules shall
      be
      as stated:

    

    (A) Schedule
      1.0 to the Loan Agreement shall be deleted and the form attached hereto as
      Schedule 1.0 shall be utilized in lieu thereof. 

    

    (B) Schedule
      1.1(d) shall be deleted and the form attached hereto as Schedule 1.1.(d) shall
      be utilized in lieu thereof. 

    

    (C) A
      new
      Schedule 1.1(h) shall be added to the Loan Agreement in the form attached hereto
      as Schedule 1.1(h) and shall be completed by Borrower prior to its addition.
      

    

    

    2.08   Amendment
      and Substitution of Exhibits.
      As of
      the First Amendment Effective Date, the form of the following Exhibits to the
      Loan Agreement shall be as stated.

    

    
      	 	
              (A)

            	
              The
                form of Collateral Assignment of Notes Receivable and Interval Mortgages
                set forth as Exhibit A to the Loan Agreement shall be deleted and
                the form
                attached hereto as Exhibit A shall be utilized in lieu thereof. By
                Borrower’s signature to this First Amendment to Loan and Security
                Agreement-Receivables, Borrower agrees to utilize the form of Collateral
                Assignment of Notes Receivable and Interval Mortgages set forth as
                Exhibit
                A for the
                initial recording in any jurisdiction where prior to the date hereof
                Borrower has not transferred to Lender receivables collateral or
                recorded
                a prior form of such document. Borrower further agrees to utilize
                the form
                of the Supplement to the Collateral Assignment of Notes Receivable
                and
                Interval Mortgages in all jurisdictions where Borrower has previously
                filed a Collateral Assignment of Notes Receivable and Interval Mortgages
                or a First Modified Collateral Assignment of Notes Receivable and
                Interval
                Mortgages from and after the First Amendment Effective
                Date.

            

    

     

    
      	 	
              (B)

            	
              The
                form of Borrower Certificate and Request for Advance set forth as
Exhibit
                D to the Loan Agreement shall be deleted and the form attached hereto
                as
                Exhibit D shall be utilized in lieu thereof. By Borrower’s signature to
                this First Amendment, Borrower agrees to utilize the attached Exhibit
                D
                form of the First Modified Borrower Certificate and Request for Advance
                from and after the First Amendment Effective
                Date.

            

    

    

    
      	 	
              (C)

            	
              The
                form of Officer’s Certificate set forth as Exhibit F to the Loan Agreement
                shall be deleted and the form attached hereto as Exhibit F shall
                be
                utilized in lieu thereof. By Borrower’s signature to this First Amendment,
                Borrower agrees to utilize the attached Exhibit F form of the Officer’s
                Certificate from and after the First Amendment Effective
                Date.

            

    

    

    2.09   Amendment
      and Substitution of Promissory Note-Receivables.
      As of
      the First Amendment Effective Date, the Promissory Note-Receivables dated as
      of
      December 16, 2005, shall be deleted and the form of the First Modified
      Promissory Note-Receivables attached hereto as Exhibit E shall be utilized
      in
      lieu thereof. By Borrower’s signature to this First Amendment and the delivery
      to you of an originally executed First Modified Promissory Note-Receivables
      shall constitute our agreement to the above, Lender is authorized to mark the
      existing Promissory Note-Receivables, “Modified, Substituted and Replaced by a
      First Modified Promissory Note-Receivables dated October 6, 2006” and
      physically attach by staple the Promissory Note-Receivables, after being so
      marked to the back of the First Modified Promissory
      Note-Receivables.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    Article
      3

    Conditions

    

    3.01   Conditions
      to Effectiveness.
      The
      effectiveness of this First Amendment and the agreements of Lender set forth
      herein, are subject to the satisfaction of the following conditions precedent,
      all in form, scope and substance satisfactory to Lender in its sole discretion
      (the date on which such conditions shall have been satisfied being referred
      to
      herein as the "First
      Amendment Effective Date"):

    

    (a) Lender
      shall have received each of the following, and, where applicable, duly executed
      by each party thereto, other than Lender:

     

    
      	 	(i)	This First Amendment and the First Amendment to
              Loan and
              Security Agreement-Inventory; and

      	 	 	 

      	 	(ii)	The First Modified Promissory Note-Receivables;
              and

      	 	 	 

      	 	(iii)	a
              certificate from the principal financial officer of Borrower attesting
              to
              no change to the Articles of Incorporation or By Laws of Borrower since
              December 16, 2005 and/or providing an updated copy of any such changes;
              and

      	 	 	 

      	 	(vi)	A
              resolution from Borrower authorizing the changes to the financing
              relationship with Lender as contained in this First Amendment;
              and

      	 	 	 

      	 	
              (v)

            	
              a
                certificate from the principal financial officer of Borrower certifying
                to Lender that all credit card payments derived from Collateral consisting
                of Notes Receivable pledged to Lender are being directed to the lockbox
                referenced in the Lockbox Agreement and are being accounted for and
                serviced under the Servicing Agreement;
                and

            

    

    

    
      	 	
              (vi)

            	
              a
                certificate from the principal financial officer of Borrower transmitting
                to Lender as attachments thereto a true and correct copy of all amendments
                to the CSF Documents since December 16, 2005 and also transmitting
                a
                revised and updated copy of Schedule 1.1(b) to the Loan Agreement;
                and

            

    

     

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    
      	 	
              (vii)

            	
              a
                certificate from the principal financial officer of Borrower transmitting
                to Lender as attachments thereto a true and correct copy of all documents
                between Borrower and UBS Financial Services entered into since December
                16, 2005 and also transmitting a completed Schedule 1.1(h) for attachment
                to and inclusion with the Loan Agreement;
                and

            

    

    

    
      	 	
              (viii)

            	
              a
                certificate from the principal financial officer of Borrower transmitting
                to Lender a certificate attesting to the full payment of all quarterly
                FICA and other federal and state taxes due on or prior to June 30,
                2006
                and attaching thereto such documentary information as Borrower deems
                appropriate to support the statements contained in such certificate;
                and

            

      	 	 	 

      	 	(ix)	a certificate from the principal financial officer
              of
              Borrower which acknowledges that the fee paid and referenced in the
              Fee
              Letter of December 16, 2005 was as of the date of execution of such
              letter
              fully earned and non-refundable and that no refund, rebate or credit
              of
              any portion of such fee paid or deducted by you shall be returnable
              or
              credited to Borrower’s obligations as a result or consequence of
              Borrower’s agreement to reduce the Commitment as herein referenced;
              and

      	 	 	 

      	 	(x)	a
              certificate from the principal financial officer of Borrower which
              confirms that the summary of the underwriting criteria set forth on
              Schedule 1.1(d) attached hereto is the approved underwriting criteria
              for
              the Borrower in its sales operations and has been in full force and
              effect
              since December 16, 2005 except
              for the change in the income range from “$40,000 to $55,000” to “$35,000
              to $45,000” and providing a copy of the actual specific Underwriting
              Criteria and Guidelines adopted by and in currently in effect;
              and

      	 	 	 

      	 	(xi) 	Borrower
              shall have delivered hard copy or electronic copies of the following
              Form
              8-k as filed with the Securities and Exchange
              Commission:

      	 	 	 

      	 	 	Form
              8-k dated 2/3/06, 3/7/06, 3/8/06, 3/23/06, 3/29/06, 4/7/06, 4/10/06,
              5/2/06, 5/4/06 and 5/26/06; and

      	 	 	 

      	 	(xii) 	All
              other documents Lender may request with respect to any matter relevant
              to
              this First Amendment or the transactions contemplated
              hereby.

    

     

    (b) The
      representations and warranties contained herein and in the Loan Agreement and
      the other documents executed in connection with the Loan Agreement (herein
      referred to as "Loan
      Documents"),
      as
      each is amended hereby, shall be true and correct as of the date hereof, as
      if
      made on the date hereof, except for such representations and warranties as
      are
      by their express terms limited to a specific date.

    

    (c) No
      Default or Event of Default shall have occurred and be continuing,.

    

    (d) All
      corporate proceedings taken in connection with the transactions contemplated
      by
      this First Amendment and all documents, instruments and other legal matters
      incident thereto shall be satisfactory to Lender.

     

    (e) Borrower
      shall have paid Lender all fees, costs and expenses incurred by Lender in
      preparation and execution of this First Amendment and in connection with all
      matters referred to herein.

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

    

    Article
      4

    Ratifications,
      Representations and Warranties

    

    4.01   Ratifications.
      The
      terms
      and provisions set forth in this First Amendment shall modify and supersede
      all
      inconsistent terms and provisions set forth in the Loan Agreement and the other
      Loan Documents, and, except as expressly modified and superseded by this First
      Amendment the terms and provisions of the Loan Agreement and the other Loan
      Documents are ratified and confirmed and shall continue in full force and
      effect. Borrower and Lender agree that the Loan Agreement and the other Loan
      Documents, as amended hereby, shall continue to be legal, valid, binding and
      enforceable in accordance with their respective terms. This First Amendment
      is
      not intended to be or to create, nor shall it be construed as or constitute,
      a
      novation or an accord and satisfaction but shall constitute an amendment of
      the
      Loan Agreement.

    

    4.02   Representations
      and Warranties.
      Borrower
      hereby represents and warrants to Lender that (a) the execution, delivery and
      performance of this First Amendment and any and all other Loan Documents
      executed and/or delivered in connection herewith have been authorized by all
      requisite corporate action on the part of Borrower and will not violate the
      Articles of Incorporation or Bylaws of Borrower; (b) Borrower's Board of
      Directors has authorized the execution,
      delivery and performance of this First Amendment and any and all other Loan
      Documents executed and/or delivered in connection herewith; (c) the
      representations and warranties contained in the Loan Agreement, as amended
      hereby, and any other Loan Document are true and correct on and as of the date
      hereof and on and as of the date of execution hereof as though made on and
      as of
      each such date; (d) no Default or Event of Default under the Loan Agreement,
      as
      amended hereby, has occurred and is continuing or exists which with the lapse
      or
      passage of time would be or become a Default or Event of Default; (e) Borrower
      is in full compliance with all covenants and agreements contained in the Loan
      Agreement and the other Loan Documents, as amended hereby; (f) Borrower has
      not
      amended its Articles of Incorporation or Bylaws since December 16, 2005; (g)
      the
      execution, delivery and performance of this First Amendment and the Loan
      Documents executed in connection herewith by Borrower are within its powers,
      have been duly authorized, and do not contravene (A) its articles of
      incorporation or other organization documents, or (B) any applicable law; and
      (h) no consent, license, permit, approval or authorization of, or registration,
      filing or declaration with any governmental authority or other Person, is
      required in connection with the execution, delivery, performance, validity
      or
      enforceability of this First Amendment or the Loan Documents executed in
      connection herewith, as applicable, by or against Borrower.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    Article
      5

    Miscellaneous
      Provisions

    

    5.01   Survival
      of Representations and Warranties.
      All
      representations and warranties made herein and in the Loan Agreement or any
      other Loan Document, including, without limitation, any document furnished
      in
      connection with this First Amendment, shall survive the execution and delivery
      of this First Amendment and the other Loan Documents, and no investigation
      by
      Lender or any closing shall affect the representations and warranties or the
      right of Lender to rely upon them.

    

    5.02   Reference
      to Loan Agreement.
      Each of
      the Loan Agreement and the other Loan Documents, and any and all other documents
      or instruments now or hereafter executed and delivered pursuant to the terms
      hereof or pursuant to the terms of the Loan Agreement, as amended hereby, are
      hereby amended so that any reference in the Loan Agreement and such other Loan
      Documents to the Loan Agreement shall mean a reference to the Loan Agreement,
      as
      amended hereby.

    

    5.03   Severability.
      If
      any
      term or provision of this First Amendment is adjudicated to be invalid under
      applicable laws or regulations, such provision shall be inapplicable to the
      extent of such invalidity without affecting the validity or enforceability
      of
      the remainder of this First Amendment which shall be given effect so far as
      possible.

    

    5.04   Successors
      and Assigns.
      This
      First Amendment is binding upon and shall inure to the benefit of Lender, all
      future holders of any Note and all assignees and transferees, and each of their
      respective successors and permitted assigns. No Borrower may assign or transfer
      any of its rights or obligations hereunder or under any of the other Loan
      Documents without the prior written consent of Lender. 

    

    5.05   Counterparts.
      This
      First Amendment may be executed in one or more

    counterparts,
      all of which taken together shall constitute but one and the same instrument.
      This First Amendment may be executed by facsimile transmission, which facsimile
      signatures shall be considered original executed counterparts for purposes
      of
      this Section
      5.05,
      and
      each party to this First Amendment agrees that it will be bound by its own
      facsimile signature and that it accepts the facsimile signature of each other
      party to this First Amendment.

    

    5.06   Effect
      of Waiver.
      No
      consent or waiver, express or implied, by Lender to or for any breach of or
      deviation from any covenant or condition by Borrower shall be deemed a consent
      to or waiver of any other breach of the same or any other covenant, condition
      or
      duty.

    

    5.07   Headings.
      The
      headings, captions, and arrangements used in this First Amendment are for
      convenience only and shall not affect the interpretation of this First
      Amendment.

    

    5.08   Applicable
      Law.
      THIS
      FIRST AMENDMENT AND ALL OTHER LOAN DOCUMENTS EXECUTED PURSUANT HERETO SHALL
      BE
      DEEMED TO HAVE BEEN MADE AND TO BE PERFORMABLE IN AND SHALL BE GOVERNED BY
      AND
      CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE CHOICE OF LAW PROVISIONS SET
      FORTH IN THE LOAN AGREEMENT AND SHALL BE SUBJECT TO NOTICE PROVISIONS OF THE
      LOAN AGREEMENT.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    

    5.09   Final
      Agreement.
      THE
      LOAN
      AGREEMENT AND THE OTHER LOAN DOCUMENTS, EACH AS AMENDED HEREBY, REPRESENT THE
      ENTIRE EXPRESSION OF THE PARTIES WITH RESPECT TO THE SUBJECT MATTER HEREOF
      ON
      THE DATE THIS FIRST AMENDMENT IS EXECUTED. THE LOAN AGREEMENT AND THE OTHER
      LOAN
      DOCUMENTS, AS AMENDED HEREBY, MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
      CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
      UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NO MODIFICATION, RESCISSION,
      WAIVER, RELEASE OR AMENDMENT OF ANY PROVISION OF THIS FIRST AMENDMENT SHALL
      BE
      MADE, EXCEPT BY A WRITTEN AGREEMENT SIGNED BY BORROWER AND LENDER.

    

    5.10   Release
      by Borrower.
      By
      execution of this First Amendment, Borrower acknowledges and confirms that
      Borrower does not have any offsets, defenses or claims against Lender, or any
      of
      its present or former subsidiaries, affiliates, officers, directors,
      shareholders, employees, agents, representatives, attorneys, predecessors,
      successors or assigns whether asserted or unasserted. To the extent that
      Borrower may have such offsets, defenses or claims, Borrower and each of its
      successors, assigns, parents, subsidiaries, affiliates, predecessors, employees,
      agents, heirs, executors, as applicable, jointly and severally, knowingly,
      voluntarily and intentionally waive, release and forever discharge Lender,
      its
      subsidiaries, affiliates, officers, directors, shareholders, employees, agents,
      attorneys, predecessors, successors and assigns, both present and former
      (collectively the "Lender Affiliates") of and from any and all actual or
      potential claims, demands, damages, actions, requests for sanctions and causes
      of action, torts, obligations, suits, debts, controversies, damages, judgments,
      executions, claims and demands whatsoever, all other liabilities whether known
      or unknown, matured or unmatured, contingent or absolute, of any kind or
      description whatsoever, either in law or in equity or otherwise, asserted or
      unasserted which against Lender and/or Lender Affiliates, Lender as Agent or
      Lender in
      any
      other capacity, they ever had, now have, claim to have or may later have or
      which any of any Borrower's successors, assigns, parents, subsidiaries,
      affiliates, predecessors, employees, agents, heirs, executors, as applicable,
      both present and former ever had, now has, claim to have or may later have,
      upon
      or by reason of any manner, cause, causes or thing whatsoever, including,
      without limitation, any presently existing claim or defense whether or not
      presently suspected, contemplated or anticipated, and Borrower hereby agrees
      that Borrower is collaterally estopped from asserting any claims against Lender
      or any of the Lender Affiliates relating to the foregoing.

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    

     

    IN
      WITNESS WHEREOF, this First Amendment has been executed and is effective as
      of
      the date first above written.

     

    
      	 	 	 
	 	BORROWER:
	 	
              SILVERLEAF
                RESORTS, INC., a Texas corporation

            
	 
 	 
 	 
 
	/s/
              PATRICIA K. DOREY__________  	By:  	/s/ HARRY
              J.
              WHITE, JR.
	 	
              

              Name:
                Harry J. White, Jr.

            
	 	
              Title:
                Chief Financial Officer

            

    

    
      	
              STATE
                OF TEXAS  

            	)
	              	) ss:
              
	COUNTY
              OF  DALLAS	)

    

     

     

    The
      foregoing instrument was acknowledged before me this 20th day of
      September, 2006 by Harry J. White, Jr., Chief Financial Officer of
      Silverleaf Resorts, Inc., a Texas corporation, on behalf of the
      Corporation.

     

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	 	By:  	/s/
              KIM
              W. MURDOCK
	 	
              
                

              

              Notary
                Public

              My
                Commission Expires:

            
	 	 
	 	
              LENDER:

              WELLS
                FARGO FOOTHILL, INC., 
                a
                  California corporation

              

            

    

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	________________________________ 	By:  	/s/
              JAMES P. WELSH 
	 	
              
Name:
              James P. Welsh
	 	Title:
               Vice
              President

    

    
      	STATE OF TEXAS  	)
	 	)  ss:
              
	 COUNTY OF DALLAS 	)

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    The
      foregoing instrument was acknowledged before me this 6th day of
      October, 2006 by James P. Welsh, VP of WELLS FARGO FOOTHILL, INC., a
      California corporation, on behalf of the corporation.

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	 	By:  	/s/
              DEANIE
              B. RENOUF
	 	
              
                

              

              Commissioner
                of the Superior Court

              Notary
                Public

              My
                Commission Expires:

            
	 	 
	 	 
	 	AGENT: 
              WELLS
                FARGO FOOTHILL, INC., 
                a
                  California corporation, as Agent

              

            

    

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	
              ________________________________

              

            	By:  
               	/s/ JAMES
              P. WELSH 
              

            
	 	Name: James P. Welsh
	 	Title:
              Vice President

    

    
      	STATE OF TEXAS  	)
	 	)  ss:
              
	COUNTY
              OF DALLAS 	)

    

     

     

    The
      foregoing instrument was acknowledged before me this 6th day of
      October, 2006 by James P. Welsh, VP of WELLS FARGO FOOTHILL, INC., a
      California corporation, on behalf of the corporation.

    
      	 	 	 
	 	 
	 
 	 
 	 
 
	 	By:  	/s/
              DEANIE
              B. RENOUF 
	 	
              
                

              

              Commissioner
                of the Superior Court

              Notary
                Public

              My
                Commission Expires:

            
	 	 

    

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

    List
      of
      Schedules and Exhibits to Agreement not Filed Herewith:

    Schedule
      1.0 Identification of Lenders and Their Respective Pro Rata
      Percentage

    Schedule
      1.1(d) Underwriting Guidelines and Criteria 

    Schedule
      1.1(h) UBS Documents

    Exhibit
      A
First
      Modified Collateral Assignment of Notes Receivable and Interval
      Mortgages

    Exhibit
      D
      First Modified Borrower’s Certificate and Request For Advance on Receivables
      Loan

    Exhibit
      E
      First Modified Promissory Note-Receivables

    Exhibit
      F
Officer’s
      Certificate For Financial Statements

    Certificate
      Pursuant to Section 3.01(a)(iii)

    Certificate
      Pursuant to Section 3.01(a)(iv)

    Certificate
      Pursuant to Section 3.01(a) (v)

    Certificate
      Pursuant to Section 3.01(a)(vi)

    Certificate
      Pursuant to Section 3.01(a)(vii)

    Certificate
      Pursuant to Section 3.01(a)(viii)

    Certificate
      Pursuant to Section 3.01(a)(ix)

    Certificate
      Pursuant to Section 3.01(a)(x)

     

    
      
        
        

      

      15

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