Document:

Ex.
        10.2

       

      SECOND
        AMENDMENT TO AMENDED AND RESTATED

       

      LOAN
        AND SECURITY AGREEMENT

      (Inventory
        Loan)

      

      THIS
        SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND SECURITY
        AGREEMENT,
        dated
        as of October 26, 2005, (the “Second Amendment”) entered into by SILVERLEAF
        RESORTS, INC.,
        a Texas
        corporation, (as “Borrower”), and TEXTRON
        FINANCIAL CORPORATION,
        a
        Delaware corporation (as “Lender”).

      

      WITNESSETH:

      

      WHEREAS,
        Borrower is engaged in the business of acquiring, constructing, developing,
        owning, managing, selling and otherwise dealing with Intervals at the Resorts
        (as each such term is hereafter defined);

      

      WHEREAS,
        Lender and Borrower are parties to that certain Loan and Security Agreement,
        dated as of December 16, 1999, as amended by that certain First Amendment
        to
        Loan and Security Agreement, dated as of April 17, 2001, as further amended
        by
        that certain Second Amendment to Loan and Security Agreement, dated as of
        April
        30, 2002, as further amended by that certain Letter Amendment, dated as of
        March
        27, 2003, and as further amended by that certain Third Amendment to Loan
        and
        Security Agreement (Inventory Loan), dated as of December 19, 2003
        (collectively, the “Original
        Loan Agreement”);

      

      WHEREAS,
        pursuant to the Original Loan Agreement, Lender agreed, subject to the terms
        and
        conditions of the Original Loan Agreement, to provide to Borrower, for the
        purpose of providing liquidity in connection with Borrower’s ownership, purchase
        and warehousing of Intervals (as such term is hereinafter defined), a loan
        in
        the maximum amount of $10,000,000 (the “Existing
        Inventory Loan”),
        which
        loan is evidenced by Borrower’s Amended and Restated Secured Promissory Note,
        dated as of April 30, 2002 (the “Existing
        Note”);

      

      WHEREAS,
        Lender and Borrower further amended and restated the Original Loan Agreement
        in
        its entirety pursuant to an Amended and Restated Loan, Security and Agency
        Agreement dated as of March 5, 2004, as amended by that certain Letter
        Amendment, dated as of April 16, 2004, and as further amended by that certain
        Letter Amendment, dated as of July 30, 2004
        (the
“Restated
        Loan Agreement”);
        

      

      WHEREAS,
        pursuant to the Restated Loan Agreement, Lender agreed, subject to the terms
        and
        conditions of the Restated Loan Agreement, to provide to Borrower, for the
        purpose of providing liquidity in connection with Borrower’s ownership, purchase
        and warehousing of Intervals, to make an additional inventory loan to the
        borrower in the maximum amount of $8,000,000 (the “New
        Inventory Loan”).
        The
        Existing Inventory Loan and the New Inventory Loan are evidenced by the Existing
        Note, in the original principal amount of Ten Million Dollars ($10,000,000)
        and
        the Borrower’s Secured Promissory Note, dated March 5, 2004, in the original
        principal amount of Eight Million Dollars ($8,000,000);

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      WHEREAS,
        Borrower requested and Lender agreed, that Lender provide an additional
        inventory loan to Borrower in the maximum amount of $5,000,000 (the
“Inventory
        Term Loan,”
        which
        Inventory Term Loan together with the Existing Inventory Loan and the New
        Inventory Loan are collectively, the “Loan”)
        for
        the purpose of repaying the Term Loan Components of the Additional Credit
        Facility and Existing Credit Facilities;

      

      WHEREAS,
        pursuant to that certain First Amendment to Amended and Restated Loan and
        Security Agreement (Inventory Loan) dated as of February 28, 2005 (the
“First
        Amendment”)
        Lender
        and Borrower agreed to, among other things, increase the Inventory Loan to
        $21,000,000, (the Restated Loan Agreement as amended by the First Amendment
        and
        as may be amended from time to time, the “Inventory
        Loan Agreement”),
        and
        such increase in the Inventory Loan is evidenced by that certain Secured
        Promissory Note (Inventory Term Loan) dated February 28, 2005 in the original
        principal amount of $5,000,000.00 (the “Inventory
        Term Loan Note”);
        and

      

      WHEREAS,
        Borrower has requested and Lender has agreed, subject to the terms and
        conditions herein, to extend the period during which borrower may obtain
        advances pursuant to the Restated Loan Agreement as amended by the First
        Amendment and as further amended by this Second Amendment (collectively,
        the
“Loan
        Agreement”)
        and to
        extend the Final Maturity Date under the Loan Agreement.

      

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

      

      1.  Terms.
        All
        capitalized terms not otherwise defined herein shall have the meaning ascribed
        to such terms in the Loan Agreement.

       

      2.  Definitions.
        Provided that no Event of Default or condition, omission or act which, with
        the
        passage of time, notice or both, would constitute an Event of Default, has
        occurred, Section 1.1(ll) is amended in its entirety and replaced with the
        following new Section 1.1(ll):

       

      “(ll)
        Final
        Maturity Date.
        August
        31, 2010 with respect to the Existing Inventory Loan and the New Inventory
        Loan,
        and March 31, 2007 with respect to the Inventory Term Loan.”

      

      3.  Definitions.
        Provided that no Event of Default or condition, omission or act which, with
        the
        passage of time, notice or both, would constitute an Event of Default, has
        occurred, Section 1.1(fff) is amended in its entirety and replaced with the
        following new Section 1.1(fff):

       

      “(fff) Loan
        to Retail Value Ratio.
        The
term“Loan
        to
        Retail Value Ratio” shall mean the ratio of the outstanding principal balance of
        the Loan, from time to time, to the Retail Value of the Inventory. The Loan
        to
        Retail Value Ratio shall be: (i) 15% for the Existing Inventory Loan; (ii)
        11%
        for the Inventory Term Loan; and (iii) 15% for the New Inventory
        Loan.”

      

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      4.  Definitions.
        Provided that no Event of Default or condition, omission or act which, with
        the
        passage of time, notice or both, would constitute an Event of Default, has
        occurred, Section 1.1(uuu) is amended in its entirety and replaced with the
        following new Section 1.1(uuu):

       

      “(uuuu)
        Term.
        The
        term for the Existing Inventory Loan and New Inventory Loan, shall be the
        period
        ending August 31, 2010, and for the Inventory Term Loan shall be the period
        ending March 31, 2007.”

      

      5.  Definitions.
        Provided that no Event of Default or condition, omission or act which, with
        the
        passage of time, notice or both, would constitute an Event of Default, has
        occurred, Section 1.1(cccc) is amended in its entirety and replaced with
        the
        following new Section 1.1(cccc):

       

      “(cccc)
        Required
        Retail Value.
        The
        term “Required Retail Value” shall mean the aggregate Retail Value of the
        Inventory, such that the ratio of the outstanding balance of the Loan, from
        time
        to time, to the aggregate Retail Value of the Inventory does not exceed the
        Loan
        to Retail Value Ratio. By way of example, if the outstanding principal balance
        of the Existing Inventory Loan were $10,000,000, the outstanding principal
        balance of the Inventory Term Loan were $4,000,000, and the outstanding
        principal balance of the New Inventory Loan were $6,000,000, the Required
        Retail
        Value of the Inventory would be $143,030,303.03 (being the sum of $66,666,666.67
        with respect to the Existing Inventory Loan, $36,363,636.36 with respect
        to the
        Inventory Term Loan, and $40,000,000.00 with respect to the New Inventory
        Loan).”

       

      6.  Revolving
        Loan and Lending Limits.
        Provided that no Event of Default or condition, omission or act which, with
        the
        passage of time, notice or both, would constitute an Event of Default, has
        occurred, Section 2.1 is amended in its entirety and replaced with the following
        new Section 2.1:

       

      “2.1
        Revolving
        Loan and Lending Limits.
        Upon
        the
        terms and subject to the conditions set forth in this Agreement, including
        but
        not limited to Section 2.8 hereof, the Lender shall make Advances to the
        Borrower, of up to $16,000,000 million under the Existing Inventory Loan
        and the
        New Inventory Loan and on the Closing Date up to $5,000,0000 under the Inventory
        Term Loan. Borrower may borrow, repay and reborrow during the Revolving Loan
        Period, as such term is hereafter defined, principal under the Existing
        Inventory Loan and the New Inventory Loan in an amount not to exceed at any
        time
        in the aggregate the lesser of: (i) the Loan to Retail Value Ratio of the
        Required Retail Value of the Inventory or (ii) $16,000,000.00 (such amount
        being
        the aggregate principal amount of the Existing Inventory Loan and the New
        Inventory Loan), as reduced as set forth in Section 2.4(b)(ii) hereof. Under
        no
        conditions may the Borrower repay and reborrow principal under the Inventory
        Term Loan. Borrower acknowledges and agrees that Lender may make Advances
        from
        the Existing Inventory Loan, the New Inventory Loan and/or the Inventory
        Term
        Loan in such manner and amount as Lender may determine in its sole discretion.
        The Revolving Loan Period shall be the period during the Term in which the
        Borrower may borrow, repay and reborrow Advances and shall terminate in all
        respects on August 31, 2008.”

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      7.  Section
        2.4(d), Use of Program Reserve Account Withdrawals and Surplus Under the
        TFC
        Conduit Loan.
        Section
        2.4(d) is hereby deleted in its entirety.

       

      8.  Loan
        Term.
        Provided that no Event of Default or condition, omission or act which, with
        the
        passage of time, notice or both, would constitute an Event of Default, has
        occurred, Section 2.7 is amended in its entirety and replaced with the following
        new Section 2.7:

       

      “2.7
        Loan
        Term.
        The
        term of the Loan shall terminate on August 31, 2010, except for the Inventory
        Term Loan, which shall terminate on March 31, 2007.”

      

      9.  Section
        3.7, Security Interest in All Pledged Notes Receivable.
        Section
        3.7 is amended in its entirety and replaced with the following new Section
        3.7:

       

      “3.7
        Security
        Interest in All Pledged Notes Receivable.
        Lender shall have a continuing security interest in all of the Pledged Notes
        Receivable, and Lender may collect all payments made under or in respect
        of all
        such Notes Receivable, including, without limitation, Eligible Notes Receivable
        that are or may become ineligible, until any of the same may be released
        by
        Lender, if at all, pursuant to Section 12.10 of the Consolidated, Amended
        and
        Restated Loan, Security And Agency Agreement dated as of August 5, 2005,
        as may
        be amended from time to time by and between Borrower and Lender (the
“Consolidated Loan Agreement”) or Section 7.2(a) below. Notwithstanding anything
        heretofore to the contrary, unless and until an Event of Default shall occur,
        Borrower, as agent for and on behalf of Lender, shall retain possession of
        and
        collect all payments under or in respect of all Notes Receivable. By executing
        this Agreement, Borrower acknowledges and agrees that it is holding such
        Notes
        Receivable as bailee and agent for Lender. Borrower shall hold and designate
        such Notes Receivable in a manner that clearly indicates that they are being
        held by Borrower as bailee on behalf of Lender. Upon the occurrence of an
        Event
        of Default, Borrower shall promptly deliver to Lender, to the extent not
        previously delivered to Lender, the documents listed in Section 5.1(b) of
        the
        Consolidated Loan Agreement and with respect thereto and after such Event
        of
        Default Lender shall have the right to collect all proceeds therefrom and
        apply
        the same to payment of the Obligations as set forth in Section 2.3(a)
        hereof.”

      

      10.  Section
        4.1(e)(ix), Intercreditor Agreement.
        Section
        4.1(e)(ix) is hereby deleted in its entirety.

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      11.  Conditions
        Precedent to Funding of Advances with Respect to Additional Eligible
        Resorts.

       

      Section
        4.5(i) is hereby amended in its entirety and replaced with the following
        new
        Section 4.5(i): 

      

      “(i) Management
        of Resort.
        Borrower shall provide evidence satisfactory to Lender that Borrower, or
        an
        Affiliate, is the manager or operator of each Resort, pursuant to a written
        management or operating agreement, in form and substance satisfactory to
        Lender,
        which with respect to all Resorts shall have a term which shall expire no
        earlier than March 27, 2010. Borrower agrees to provide an estoppel letter,
        in
        form and substance acceptable to Lender, from the applicable Timeshare Owner’s
        Association.”

      

      12.  Section
        6.24(a), First Lien.
        Section
        6.24(a) is hereby deleted in its entirety.

       

      13.  Section
        6.26(a), First Lien.
        Section
        6.26(a) is hereby deleted in its entirety.

       

      14.  Affirmative
        Covenants.

       

      (a)
        Subsection 7.1(z)(ii) is hereby amended in its entirety and replaced with
        the
        following new Subsection 7.1(z)(ii): 

      

      “(ii) Marketing
        and Sales Expenses.
        As of
        the last day of each fiscal quarter, Borrower will not permit the twelve
        (12)
        month cumulative ratio of Marketing and Sales Expenses to the Borrower’s net
        proceeds from the sale of Intervals as recorded on the Borrower’s financial
        statements for the immediately preceding twelve consecutive months to equal
        or
        exceed a ratio of .570 to 1.”

      

      (b)
        Section 7.1 is hereby amended in part to add the following new
        paragraph:

      

      “(dd) Debt
        to Equity Ratio.
        The
        Debt to Equity Ratio for Borrower shall be less than 6:1. The term Debt to
        Equity Ratio means the ratio of (a) debt consisting of all notes payable,
        capital lease obligations and senior subordinated debt as reported on the
        Borrower’s most recent consolidated financial statements to (b) equity
        consisting of the balance sheet equity and senior subordinated debt less
        intangible assets, including, without limitation, goodwill, trademarks,
        tradenames, copyrights, patents, patent allocations, licenses and rights
        in any
        of the foregoing and other items treated as intangible in accordance with
        GAAP,
        as reported on the Borrower’s most recent consolidated financial statements. In
        computing Borrower’s Debt to Equity Ratio, non-recourse off balance sheet
        financing will not be included as part of Borrower’s debt.”

      

      15.  Section
        7.1(bb), Net Securitization Cash Flow.
        Section
        7.1(bb) is amended in its entirety and replaced with the following new Section
        7.1(bb):

       

      “(bb)
        Net
        Securitization Cash Flow.
        If a Default or Event of Default has occurred, then Borrower shall cause
        Silverleaf Finance II, Inc. to declare, at least quarterly, a cash dividend
        payable to Borrower and/or a payment in respect of the Silverleaf Finance
        II
        Subordinated Note, in an aggregate amount equal to the Net Securitization
        Cash
        Flow in respect of Silverleaf Finance II, Inc. for such quarter, and all
        such
        dividends shall be paid directly to Lender and applied by Lender in repayment
        of
        the Loan. Borrower shall provide Lender with notice of Silverleaf Finance
        II,
        Inc.’s declaration of a cash dividend or a payment on the Silverleaf Finance II,
        Subordinated Note, together with a certification that: (i) states whether
        a
        Default or Event of Default exists, and (ii) contains a calculation of the
        Net
        Securitization Cash Flow.”

      

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

      16.  Exhibit
        B, Borrower’s Certificate and Request for Advance.
        Exhibit
        B
        is amended in its entirety and replaced with the Exhibit B attached hereto.
        

       

      17.  Conditions
        Precedent.
        This
        Second Amendment shall not be effective until all of the following conditions
        have been satisfied:

       

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

       

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

       

      (ii)  Copies
        of
        any amendments to the articles of incorporation/charter and bylaws of Borrower
        not previously delivered to Lender, certified to be true, correct and complete
        by Borrower and the Secretary of State of the State of Texas and current
        certificates of good standing for Borrower for the State of Texas and states
        where the Resorts are located, a current certificate of authority to conduct
        business by the Secretary of State in each state in which Borrower conducts
        business;

       

      (iii)  A
        certificate of the Secretary of Borrower certifying the adoption by the Board
        of
        Directors of Borrower of a resolution authorizing Borrower to enter into
        and
        execute the Second Amendment and all such documents requested by Lender in
        the
        form attached to the Second Amendment as Exhibit B-1;

       

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

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

      (v)  Title
        policies or endorsements to title policies previously issued to Lender insuring
        the lien of the Mortgages granted by Borrower to Lender to secure the loan
        but
        only with respect to the Mortgages covering Intervals in Resorts located
        in
        states other than Texas;

       

      (vi)  Closing
        opinions of counsels for Borrower, including opinions for the Resorts in
        Texas
        stating that this Second Amendment and the Amendments to the Inventory Mortgages
        do not impair the title insurance coverage under the existing title policies
        for
        the Resorts in the State of Texas; and

       

      (vii)  Such
        other agreements, documents, instruments, certificates and materials as Lender
        may request to evidence the Indebtedness, to evidence and perfect the rights
        and
        Liens and security interests of Lender contemplated by the Loan Documents
        as
        amended hereby, and to effectuate the transactions contemplated in this Second
        Amendment.

       

      (b)  Conditions
        to Closing.

       

      (i)  Execution
        of this Second Amendment;

       

      (ii)  Lender
        shall have received evidence, in form and substance satisfactory to Lender,
        that
        the consent of each party entitled to consent to this Second Amendment has
        been
        obtained;

       

      (iii)  Borrower
        shall have paid a commitment fee of $160,000 to Lender in consideration of
        this
        Second Amendment and shall have paid all other fees of all Lenders in connection
        with this Second Amendment; and

       

      (iv)  Borrower
        shall execute and deliver to Lender, in recordable form and otherwise acceptable
        to Lender in its sole discretion, Amendments to the Inventory Mortgages to
        reflect the continued securing of the Loan, as hereby modified and shall
        cause
        such Amendments to be recorded in the applicable recording offices.

       

      18.  Further
        Documentation.
        Borrower
        agrees to execute and deliver to Lender any and all additional documentation
        as
        Lender may now or hereafter require in order to effectuate the terms and
        conditions of this Second Amendment.

       

      19.  Effect
        of Amendment.
        The
        Loan
        Agreement, as herein amended, shall remain in full force and effect.

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

      20.  Ratification
        and Confirmation.
        Except
        as herein expressly amended, Borrower hereby ratifies, confirms, assumes
        and
        agrees to be bound by all of representations, warranties, statements, covenants
        and agreements set forth in the Loan Agreement and the other Loan Documents,
        as
        previously amended. The
        Borrower reaffirms, restates and incorporates by reference all of the
        representations, warranties, covenants and agreements made in the Loan Documents
        as if the same were made as of this date. The Borrower agrees to pay the
        Loan
        and all related expenses, as and when due
        and
        payable in accordance with the Loan Agreement and the other Loan Documents,
        and
        to observe and perform the Obligations, and do all things necessary which
        are
        not prohibited by law to prevent the occurrence of any Event of Default.
        In
        addition, to further secure, and to evidence and confirm the securing of,
        the
        prompt and complete payment and performance by the Borrower of the Loan and
        all
        of the Obligations, for value received, Borrower unconditionally and irrevocably
        assigns, pledges and grants to Lender, and hereby confirms or reaffirms the
        prior granting to Lender of, a continuing first priority Lien, mortgage and
        security interest in and to all of the Collateral, except as otherwise set
        forth
        herein, whether now existing or hereafter acquired. Borrower agrees to deliver
        or cause to be delivered by its Affiliates, such mortgages, deeds of trust,
        deeds to secure debt, assignments, pledges, security agreements and UCC
        Financing Statements as Lender may deem necessary to further evidence and
        perfect the Lender’s Lien on the Collateral.

       

      21.  GOVERNING
        LAW.
        THIS AMENDMENT AND THE OTHER LOAN DOCUMENTS (EXCEPT AS MAY BE EXPRESSLY PROVIDED
        THEREIN TO THE CONTRARY) SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
        WITH
        THE LAWS OF THE STATE OF RHODE ISLAND, EXCLUSIVE OF ITS CHOICE OF LAWS
        PRINCIPLES.

       

      22.  General
        Representations and Warranties.Borrower
        hereby represents and warrants to Lender as follows:

       

      (a)  Organization,
        Standing, Qualification.
        Borrower: (a) is a duly organized and validly existing Texas corporation
        duly
        organized, validly existing and in good standing under the laws of the State
        of
        Texas, and (b) has
        all
        requisite power, corporate or otherwise, to conduct its business and to execute
        and deliver, and to perform its obligations under, the Loan
        Documents.

       

      (b)  Authorization,
        Enforceability, Etc

       

      (i)  The
        execution, delivery and performance by Borrower of the Loan Documents has
        been
        duly authorized by all necessary corporate action by Borrower and does not
        and
        will not: (1) violate any provision of the certificate or articles of
        incorporation of Borrower, bylaws of Borrower, or any agreement, law, rule,
        regulation, order, writ, judgment, injunction, decree, determination or award
        presently in effect to which Borrower is a party or is subject; (2) result
        in,
        or require the creation or imposition of, any Lien upon or with respect to
        any
        asset of Borrower other than Liens in favor of Lenders; or (3) result in
        a
        breach of, or constitute a default by Borrower under, any indenture, loan
        or
        credit agreement or any other agreement, document, instrument or certificate
        to
        which Borrower is a party or by which it or any of its assets are bound or
        affected.

       

      (ii)  No
        approval, authorization, order, license, permit, franchise or consent of,
        or
        registration, declaration, qualification or filing with, any governmental
        authority or other Person, including without limitation, the Division or
        the
        Timeshare Owners' Association is required in connection with the execution,
        delivery and performance by Borrower of any of the Loan Documents.

       

      (iii)  The
        Loan
        Documents constitute legal, valid and binding obligations of Borrower,
        enforceable against Borrower in accordance with their respective
        terms.

       

      (c)  No
        Event of Default.
        No
        Event of Default or condition, omission or act which, with the passage of
        time,
        notice or both, would constitute an Event of Default, has occurred under
        the
        Loan Agreement as amended to date, the Additional Credit Facility and Existing
        Credit Facilities, the Sovereign Facility or any other indebtedness of
        Borrower.

       

      

      THE
        REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

          
          

        

      

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

      

       

       

      
        	Witnessed
                By:	 	 	TEXTRON
                FINANCIAL CORPORATION
	 	 	 	 
	/S/
                KATIE	 	 	By:
                /S/
                JOHN D'ANNIBALE 
	
                
 	 	 	
                
                  

                

              
	/S/ SHANNON MUNSON	 	 	
                Name: John
                  D'Annibale

              
	
                
 	 	 	
                
                  Its: VP

                

              

      

       

       

      
        	STATE OF CONNECTICUT	)	 
	 	) 	ss: Glastonbury
	COUNTY OF HARTFORD	)	 

      

       

      At
        Glastonbury in said County and State on this 26TH
        day of
        October, 2005, personally appeared John
        D'Annibale,
        duly
        authorized VP of
        Textron Financial Corporation, and he acknowledged the foregoing instrument
        by
        him signed and sealed to be his free act and deed and the free act and deed
        of
        Textron Financial Corporation.

       

      Before
        me: _____/S/
        JL
        LABIANCA_________________

      Notary
        Public in and for said State

      My
        Commission Expires: ___________

      Commissioner
        of the Superior Court

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
         

         

        
          	 	 	 	
                  SILVERLEAF
                    RESORTS, INC.

                
	 	 	 	 
	/S/MARK
                  MORTENSON	 	 	By:
                  /S/HARRY
                  J. WHITE, JR.
	
                  
 	 	 	
                  
                    

                  

                
	/S/MIKE NORRIS	 	 	
                  Name: Harry
                    J. White, Jr.

                
	
                  
 	 	 	
                  
                    Its:
                      CFO

                  

                

        

        

           

          
            	STATE OF TEXAS	)	 
	 	) 	ss: Dallas
	COUNTY OF DALLAS	)	 

          

           

        

      

      At
        River
        Bend in said County and State on this 26th day
        of
        October, 2005, personally appeared Harry
        J. White, Jr.
        duly
        authorized officer of SILVERLEAF RESORTS, INC., and he/she acknowledged the
        foregoing instrument by him/her signed and sealed to be his/her free act
        and
        deed and the free act and deed of Silverleaf Resorts, Inc., a Texas corporation,
        on behalf of the corporation.

       

       

      
        Before
          me: _____/S/
          JOANN POSIVAL_______________

        Notary
          Public in and for said State

        My
          Commission Expires: ___________

         

        List
          of
          Exhibits to Agreement not filed herewith:

      

      
 

      Exhibit
        A-1: Officers'
        Certificate

      Exhibit
        B: Borrower's Certificate and Request for Advance

      Exhibit
        B-1: Secretary's
        Certificate

      Exhibit
        C-1: Incumbency
        CertificateUnassociated Document

    

      JOINDER
        AND AMENDMENT TO AMENDED AND RESTATED VOTING AGREEMENT

      

      

      THIS
        JOINDER AND AMENDMENT AGREEMENT (“Joinder
        Agreement”)
        to the
        Amended and Restated Voting Agreement dated as of February 6, 2004 (the
        "Agreement")
        by and
        among Acura Pharmaceuticals, Inc. (f/k/a Halsey Drug Co., Inc.), a New York
        corporation (the "Company"),
        Care
        Capital Investments II, LP, Care Capital Offshore Investments II, LP, Essex
        Woodlands Health Ventures V, L.P., Galen Partners III, L.P. and the other
        signatories thereto, is made and entered into as of November 9, 2005 by and
        among the Company, Care Capital Investments II, LP, Care Capital Offshore
        Investments II, LP (collectively “Care Capital”), Essex Woodlands Health
        Ventures, L.P. (“Essex”), Galen Partners International III, L.P., Galen Partners
        III, L.P., Galen Employee Fund III, L.P. (collectively, “Galen”) and GCE
        Holdings LLC (the “Transferee”). Capitalized terms used herein but not otherwise
        defined shall have the meanings set forth in the Agreement.

      

      WHEREAS,
        Transferee is acquiring Securities from each of Care Capital, Essex and Galen;
        and 

      

      WHEREAS,
        Section
        6 of the Agreement requires each transferee to which Securities are transferred,
        assigned, conveyed or otherwise disposed to agree to be bound by the terms
        of
        the Agreement (unless such transfer is made pursuant to an effective
        registration statement under the Securities Act or through a broker pursuant
        to
        Rule 144); and 

      

      WHEREAS,
        the
        Parties desire to amend the Agreement to preserve the rights of Care Capital,
        Essex and Galen relating to the nomination and election of Company directors
        following the conveyance of Securities from each of Care Capital, Essex and
        Galen to Transferee.

      

      NOW,
        THEREFORE,
        the
        parties to this Joinder Agreement hereby agree as follows:

      

      1.  Amendments.
        

      

      A.  Section
        2
        of the Agreement is hereby deleted and the following inserted in its
        place:

      

      “2. Election
        of Director Nominees.
        Commencing upon the Company's next upcoming meeting of shareholders, each
        Party
        and GCE Holdings LLC (the "Designating
        Party")
        agree
        as follows:

       

      
        	(a)  	
                Each
                  Party holding Common Stock, Series A Preferred, Series B Preferred
                  and
                  Series C Preferred (collectively, the "Securities")
                  shall vote its Securities, and take or cause to be taken such other
                  actions, as may be required from time to time to (i) ensure that
                  the Board
                  of Directors consists of no more than seven directors, and (ii)
                  elect to
                  the Board of Directors of the Company (A) four (4) persons designated
                  by
                  the Designating Party, (B) one person who shall be the Chief Executive
                  Officer of the Company, and (C) two persons who shall be independent
                  directors (as defined in Rule 4200(a)(15) of the National Association
                  of
                  Securities' Dealers Listing Standards, as may be modified or
                  supplemented) nominated
                  and elected to the Board of Directors by the then current directors.
                  Without limiting the generality of the foregoing, at each annual
                  meeting
                  of the shareholders of the Company, and at each special meeting
                  of the
                  shareholders and debentureholders of the Company called for the
                  purpose of
                  electing directors of the Company, and at any time at which the
                  shareholders and debentureholders of the Company have the right
                  to elect
                  directors of the Company, in each such event, each Party shall
                  vote all
                  Securities owned by them (or shall consent in writing in lieu of
                  a meeting
                  of shareholders and debentureholders of the Company, as the case
                  may be),
                  or take such other actions as shall be necessary, to elect the
                  Designating
                  Party's designees as a director of the Company in accordance with
                  the
                  preceding provisions of this Section
                  2(a);

              

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	(b)  	
                Each
                  Party shall take all actions necessary to remove forthwith the
                  director
                  designated by the Designating Party when such removal is requested
                  for any
                  reason, with or without cause, by the Designating Party. In the
                  case of
                  the death, resignation or removal as herein provided of a Designating
                  Party's designee, each Party shall vote all Securities held by
                  it to elect
                  another person designated by the Designating Party pursuant to
                  Section
                  2(a);

              

      

       

      
        	(c)  	
                Each
                  Party hereby agrees that it will not vote any of its Securities
                  in favor
                  of the removal of any director that shall have been designated
                  by the
                  Designating Party, unless the Designating Party shall have consented
                  to
                  such removal in writing.

              

      

       

      In
        the
        event that any Party shall fail to vote the Securities held by it in accordance
        with Section 2(a) and (b), such Party shall, upon such failure to so vote,
        be
        deemed immediately to have granted to the Designating Party, a proxy to vote
        its
        Securities solely for the election of the nominee of the Designating Party
        or
        the removal of director designated by the Designating Party. Such Party
        acknowledges that each such proxy granted hereby, including any successive
        proxy, if necessary, is being given to secure the performance of an obligation
        hereunder, is coupled with an interest, and shall be irrevocable until such
        obligation is performed;

       

      
        	(d)  	
                No
                  Party shall grant any proxy or enter into or agree to be bound
                  by any
                  voting trust with respect to the Securities held by such Party,
                  or enter
                  into any shareholder agreement or arrangement of any kind with
                  any person
                  with respect to the Securities held by such person that is, in
                  either
                  case, inconsistent with the terms of this Agreement (whether or
                  not such
                  agreement and arrangement was or is with other shareholders of
                  the Company
                  that are or are not parties to this
                  Agreement);

              

      

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      
        	(e)  	
                The
                  Company shall take, or cause to be taken, such actions as may be
                  required
                  from time to time to establish and maintain executive, audit and
                  compensation committees of the Board of Directors, as well as such
                  other
                  committees of the boards of directors of the Company as the Board
                  of
                  Directors shall determine, having such duties and responsibilities
                  as are
                  customary for such committees. The designees of the Designating
                  Party
                  shall be, if so requested by the Designating Party, in its sole
                  discretion, a member of each such committee; and
                  

              

      

       

      
        	(f)  	
                The
                  rights of the Designating Party shall terminate on the date the
                  Designating Party ceases to be a holder of the Minimum Threshold.
                  For
                  purposes hereof, "Minimum Threshold" shall mean at least 50% of
                  the shares
                  of Series A Preferred initially transferred and conveyed to the
                  Designating Party by Care Capital, Essex and Galen (or at least
                  50% of the
                  shares of Common Stock issued upon conversion
                  thereof).”

              

      

       

      B.  Section
        7
        of the Agreement is hereby deleted and the following inserted in its
        place:

      

      “7. Term.
        Except
        as provided in Sections 2(f) and 6 hereof, this Agreement and the Parties'
        obligations hereunder shall continue in effect for so long as the Designating
        Party owns the Minimum Threshold.”

      

      C.  Section
        8
        of the Agreement is hereby deleted and the following inserted in its
        place:

      

      “8. Amendment.
        Any
        term of this Agreement or the powers granted hereunder may be amended and
        the
        observance of any such term or power may be waived (either generally or in
        a
        particular instance and either retroactively or prospectively) only with
        the
        written consent of a majority of the Securities then subject to this Agreement,
        which majority must include the Designating Party so long as it owns the
        Minimum
        Threshold.”

      

      D.  Section
        9.1(a) of the Agreement is hereby deleted and the following inserted in its
        place: 

      

      “9.1 Binding
        Effect.
        (a)
        This Agreement and the powers granted hereunder shall be binding upon, and
        shall
        inure to the benefit of, the Designating Party and the Parties.”

      

      E.  Section
        12 of the Agreement is hereby deleted and the following inserted in its place:
        

      

      “12. Board
        Observer.
        So long
        as the Designating Party has the right to designate a director pursuant to
        Section 2(a) hereof, the Company will permit one observer selected by the
        Designating Party to attend all meetings of the Board of Directors of the
        Company, and shall provide such observer with such notice and other information
        with respect to such meetings as are delivered to the directors of the Company;
        provided,
        that
        such observer shall not be permitted to attend any meeting or portion thereof
        or
        have access to such other information if, in the judgment of the Company
        under
        advice of counsel, such observer’s presence or receipt of such information would
        adversely affect attorney-client privilege with respect to such meeting or
        information.”

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      2.  Agreement
        to be Bound.
        Upon
        execution of this Joinder Agreement, Transferee shall become a party to the
        Agreement and shall, together with the Company, and other parties thereto
        be
        fully bound by, subject to, and entitled to the rights and benefits of, all
        of
        the covenants, terms and conditions of the Agreement.

      

      3.  Successors
        and Assigns.
        Except
        as otherwise provided herein, this Joinder Agreement shall inure to the benefit
        of, and be binding upon and enforceable against, the parties hereto and their
        respective successors, assigns, heirs, executors and
        administrators.

      

      4.  Counterparts.
        This
        Joinder Agreement may be executed in separate counterparts, including by
        facsimile, each of which shall be an original and all of which taken together
        shall constitute one and the same agreement.

      

      5.  Notices.
        For
        purposes of Section
        10
        of the
        Agreement, all notices, demands or other communications to the Transferee
        shall
        be directed to the address set forth on the signature page hereto.

      

      6.  Governing
        Law.
        This
        Joinder Agreement and rights of the parties hereunder shall be governed in
        all
        respects by the laws of the State of New York wherein the terms of this Joinder
        Agreement were negotiated, excluding to the greatest extent permitted by
        law any
        rule of law that would cause the application of the laws of any jurisdiction
        other than the State of New York.

      

      [SIGNATURE
        PAGE TO FOLLOW]

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

      IN
        WITNESS WHEREOF,
        the
        parties hereto have executed this Joinder Agreement as of the date first
        above
        written.

      

      
        
          	 	 	 
	 	ACURA
                  PHARMACEUTICALS, INC.
	 
 	 
 	 
 
	 	By:  	/s/ Andrew
                  D. Reddick
	 	
                  
                    

                  

                  Name:
                    Andrew D. Reddick

                
	 	Title:
                  President and Chief Executive Officer
	 	 

        

      
        	 	 	 
	 	GCE
                HOLDINGS LLC
	 
 	 
 	 
 
	 	By:  	/s/ Bruce
                F. Wesson
	 	
                
Name:
                Bruce F. Wesson
	 	Title:  
	 	
                Address:   
                  c/o Galen Partners III, L.P

              
	 	
                610
                  Fifth Avenue, 5th Floor

              
	 	
                New
                  York, New York 10019

              
	 	 

      

      
        	 	 	 
	 	CARE
                CAPITAL INVESTMENTS II, LP
	 
 	 
 	 
 
	 	By:  	/s/ David
                R. Ramsay
	 	
                
                  

                

                Name:
                  David R. Ramsay

              
	 	Title:
                Authorized Signatory

      

      
        	 	 	 
	 	 	 
	 	CARE
                CAPITAL OFFSHORE INVESTMENTS II, LP
	 
 	 
 	 
 
	 	By:  	/s/ David
                R. Ramsay
	 	
                
                  

                

                Name:
                  David R. Ramsay 

              
	 	Title:
                Authorized Signatory

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      
        	 	 	 
	 	ESSEX
                WOODLANDS HEALTH VENTURES V, L.P.
	 
 	 
 	 
 
	 	By:  	/s/ Immanuel
                Thangaraj
	 	
                
Name:
                Immanuel Thangaraj
	 	Title:
                Managing Director 

      

      
        	 	 	 
	 	 	 
	 	GALEN
                PARTNERS III, L.P.
	 
 	 
 	 
 
	 	By:  	/s/ Srini
                Conjeevaram
	 	
                
                  
Name:
                  Srini Conjeevaram 

              
	 	Title:
                Member

      

      
        	 	 	 
	 	 	 
	 	GALEN
                EMPLOYEE FUND III, L.P.
	 
 	 
 	 
 
	 	By:  	/s/ Bruce
                F. Wesson
	 	
                
                  
Name:
                  Bruce F. Wesson 

              
	 	Title:
                President

      

      
        	 	 	 
	 	 	 
	 	GALEN
                PARTNERS INTERNATIONAL III, L.P
	 
 	 
 	 
 
	 	By:  	/s/ Srini
                Conjeevaram
	 	
                
                  
Name:
                  Srini Conjeevaram 

              
	 	Title:
                Member

      

    

     

     

    
      
        
        

      

      
        6

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