Document:

exv4w1

 

EXHIBIT 4.1

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

GENITOPE CORPORATION

          GENITOPE CORPORATION, a corporation organized and existing under the
General Corporation Law of the State of Delaware, does hereby certify as
follows:

          FIRST: The name of the corporation is Genitope Corporation.

          SECOND: The original Certificate of Incorporation of the corporation
was filed with the Secretary of State of the State of Delaware on August 15,
1996.

          THIRD: The Amended and Restated Certificate of Incorporation of this
corporation is hereby amended and restated to read as follows:

“I.

          The name of the corporation is Genitope Corporation (the “Company”).

II.

          The address of the Company’s registered office in the State of Delaware
is:

2711 Centerville Road

Wilmington, Delaware 19808

County of New Castle

          The name of its registered agent at such address is The Prentice-Hall
Corporation System, Inc.

III.

          The purpose of this corporation is to engage in any lawful act or
activity for which a corporation may be organized under the Delaware General
Corporation Law (“DGCL”).

IV.

          A. The Company is authorized to issue two classes of stock to be
designated, respectively, “Common Stock” and “Preferred Stock.” The total number
of shares which the Company is authorized to issue is seventy million
(70,000,000). Of these shares, sixty-five million (65,000,000) shares of which
shall be Common Stock (the “Common Stock”) and five million (5,000,000) shares
of which shall be Preferred Stock (the “Preferred Stock”). The Preferred Stock
shall have a par value of one-tenth of one cent ($0.001) per share and the
Common Stock shall have a par value of one-tenth of one cent ($0.001) per share.

          B. The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby expressly authorized to provide for the
issue of all of any of the shares of the Preferred Stock in one or more series,
and to fix the number of shares and to determine or alter for each such series,
such voting powers, full or limited, or no voting powers, and such designation,
preferences, and relative,

 

 

participating, optional, or other rights and such qualifications, limitations,
or restrictions thereof, as shall be stated and expressed in the resolution or
resolutions adopted by the Board of Directors providing for the issuance of such
shares and as may be permitted by the DGCL. The Board of Directors is also
expressly authorized to increase or decrease the number of shares of any series
subsequent to the issuance of shares of that series, but not below the number of
shares of such series then outstanding. In case the number of shares of any
series shall be decreased in accordance with the foregoing sentence, the shares
constituting such decrease shall resume the status that they had prior to the
adoption of the resolution originally fixing the number of shares of such
series.

          C. Each outstanding share of Common Stock shall entitle the holder
thereof to one vote on each matter properly submitted to the stockholders of the
Company for their vote; provided, however, that, except as otherwise required by
law, holders of Common Stock shall not be entitled to vote on any amendment to
this Certificate of Incorporation (including any certificate of designation
filed with respect to any series of Preferred Stock) that relates solely to the
terms of one or more outstanding series of Preferred Stock if the holders of
such affected series are entitled, either separately or together as a class with
the holders of one or more other such series, to vote thereon by law or pursuant
to this Certificate of Incorporation (including any certificate of designation
filed with respect to any series of Preferred Stock).

V.

          For the management of the business and for the conduct of the affairs
of the Company, and in further definition, limitation and regulation of the
powers of the Company, of its directors and of its stockholders or any class
thereof, as the case may be, it is further provided that:

          A.

               1. MANAGEMENT OF BUSINESS.

               The management of the business and the conduct of the affairs
of the Company shall be vested in its Board of Directors. The number of
directors which shall constitute the whole Board of Directors shall be fixed
exclusively by one or more resolutions adopted by the Board of Directors.

               2. BOARD OF DIRECTORS.

                    a. Subject to the rights of the holders of any series
of Preferred Stock to elect additional directors under specified circumstances,
following the closing of the initial public offering pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the “1933
Act”), covering the offer and sale of Common Stock to the public (the “Initial
Public Offering”), the directors shall be divided into three classes designated
as Class I, Class II and Class III, respectively. At the first annual meeting of
stockholders following the closing of the Initial Public Offering, the term of
office of the Class I directors shall expire and Class I directors shall be
elected for a full term of three years. At the second annual meeting of
stockholders following the Initial Public Offering, the term of office of the
Class II directors shall expire and Class II directors shall be elected for a
full term of three years. At the third annual meeting of stockholders following
the Initial Public Offering, the term of office of the Class III directors shall
expire and Class III directors shall be elected for a full term of three years.
At each succeeding annual meeting of stockholders, directors shall be elected
for a full term of three years to succeed the directors of the class whose terms
expire at such annual meeting.

                    b. During such time or times that the corporation is
subject to Section 2115(b) of the California General Corporation Law (“CGCL”),
Section A. 2. a. of this Article V shall not apply and all directors shall be elected at each annual meeting of
stockholders to hold office until the next annual meeting.

 

 

                    c. No stockholder entitled to vote at an election for
directors may cumulate votes to which such stockholder is entitled, unless, at
the time of such election, the corporation is subject to Section 2115(b) of the
CGCL. During such time or times that the corporation is subject to Section
2115(b) of the CGCL, every stockholder entitled to vote at an election for
directors may cumulate such stockholder’s votes and give one candidate a number
of votes equal to the number of directors to be elected multiplied by the number
of votes to which such stockholder’s shares are otherwise entitled, or
distribute the stockholder’s votes on the same principle among as many
candidates as such stockholder thinks fit. No stockholder, however, shall be
entitled to so cumulate such stockholder’s votes unless (i) the names of such
candidate or candidates have been placed in nomination prior to the voting and
(ii) the stockholder has given notice at the meeting, prior to the voting, of
such stockholder’s intention to cumulate such stockholder’s votes. If any
stockholder has given proper notice to cumulate votes, all stockholders may
cumulate their votes for any candidates who have been properly placed in
nomination. Under cumulative voting, the candidates receiving the highest number
of votes, up to the number of directors to be elected, are elected.

                    d. Notwithstanding the foregoing provisions of this
section, each director shall serve until his successor is duly elected and
qualified or until his death, resignation or removal. No decrease in the number
of directors constituting the Board of Directors shall shorten the term of any
incumbent director.

               3. REMOVAL OF DIRECTORS.

                    a. During such time or times that the corporation is
subject to Section 2115(b) of the CGCL, the Board of Directors or any individual
director may be removed from office at any time without cause by the affirmative
vote of the holders of at least a majority of the outstanding shares entitled to
vote on such removal; provided, however, that unless the entire Board is
removed, no individual director may be removed when the votes cast against such
director’s removal, or not consenting in writing to such removal, would be
sufficient to elect that director if voted cumulatively at an election which the
same total number of votes were cast (or, if such action is taken by written
consent, all shares entitled to vote were voted) and the entire number of
directors authorized at the time of such director’s most recent election were
then being elected.

                    b. At any time or times that the corporation is not
subject to Section 2115(b) of the CGCL and subject to any limitations imposed by
law, Section A. 3. a. above shall no longer apply and neither the Board of
Directors nor any individual director may be removed without cause and any
individual director or directors may be removed with cause by the holders of a
majority of the outstanding shares entitled to vote thereon.

               4. VACANCIES.

                    a. Subject to the rights of the holders of any series of
Preferred Stock, any vacancies on the Board of Directors resulting from death,
resignation, disqualification, removal or other causes and any newly created
directorships resulting from any increase in the number of directors, shall,
unless the Board of Directors determines by resolution that any such vacancies
or newly created directorships shall be filled by the stockholders, except as
otherwise provided by law, be filled only by the affirmative vote of a majority
of the directors then in office, even though less than a quorum of the Board of
Directors, and not by the stockholders. Any director elected in accordance with
the preceding sentence shall hold office for the remainder of the full term of the director for which
the vacancy was created or occurred and until such director’s successor shall
have been elected and qualified.

 

 

                    b. If at the time of filling any vacancy or any newly created
directorship, the directors then in office shall constitute less than a majority
of the whole board (as constituted immediately prior to any such increase), the
Delaware Court of Chancery may, upon application of any stockholder or
stockholders holding at least ten percent (10%) of the total number of the
shares at the time outstanding having the right to vote for such directors,
summarily order an election to be held to fill any such vacancies or newly
created directorships, or to replace the directors chosen by the directors then
in offices as aforesaid, which election shall be governed by Section 211 of the
DGCL.

                    c. At any time or times that the Company is subject to Section
2115(b) of the CGCL, if, after the filling of any vacancy by the directors then
in office who have been elected by stockholders shall constitute less than a
majority of the directors then in office, then:

                         (i) Any holder or holders of an aggregate of five
percent (5%) or more of the total number of shares at the time outstanding
having the right to vote for those directors may call a special meeting of
stockholders; or

                         (ii) The Superior Court of the proper county shall,
upon application of such stockholder or stockholders, summarily order a special
meeting of stockholders, to be held to elect the entire board, all in accordance
with Section 305(c) of the CGCL. The term of office of any director shall
terminate upon that election of a successor.

          B.

               1. BYLAW AMENDMENTS.

               Subject to Section 45 of the Bylaws of the Company, the Board
of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the
Company. The stockholders shall also have power to adopt, amend or repeal the
Bylaws of the Company; provided, however, that, in addition to any vote of the
holders of any class or series of stock of the Company required by law or by
this Certificate of Incorporation, the affirmative vote of the holders of at
least sixty-six and two-thirds percent (66 2/3%) of the voting power of all of
the then-outstanding shares of the capital stock of the Company entitled to vote
generally in the election of directors, voting together as a single class, shall
be required to adopt, amend or repeal any provision of the Bylaws of the
Company.

               2. BALLOTS.

               The directors of the Company need not be elected by written
ballot unless the Bylaws so provide.

               3. ACTION BY STOCKHOLDERS.

               No action required or permitted to be taken by the
stockholders of the Company shall be taken except at an annual or special
meeting of stockholders called in accordance with the Bylaws, and following the
closing of the Initial Public Offering no action shall be taken by the
stockholders by written consent.

 

 

               4. ADVANCE NOTICE.

               Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Company shall be given in the manner provided in the
Bylaws of the Company.

VI.

          A. The liability of the directors for monetary damages shall be
eliminated to the fullest extent under applicable law. If the DGCL is amended to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Company shall be
eliminated to the fullest extent permitted by the DGCL, as so amended.

          B. Any repeal or modification of this Article 6 shall be prospective
and shall not affect the rights under this Article VI in effect at the time of
the alleged occurrence of any act or omission to act giving rise to liability or
indemnification.

VII.

          A. The Company reserves the right to amend, alter, change or repeal any
provision contained in this Certificate of Incorporation, in the manner now or
hereafter prescribed by statute, except as provided in paragraph B of this
Article VII, and all rights conferred upon the stockholders herein are granted
subject to this reservation.

          B. Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the voting stock of the Company required by law,
this Certificate of Incorporation or any certificate of designation of Preferred
Stock, the affirmative vote of the holders of at least sixty-six and two-thirds
percent (66-2/3%) of the voting power of all of the then-outstanding shares of
the voting stock, voting together as a single class, shall be required to alter,
amend or repeal Articles V, VI and VII.

VIII.

           The
Company shall be subject to and governed by the provision of
Section 203
of the General Corporation Law of the State of Delaware with respect
to business combinations between the Company and interested stockholders.”

* * *

          FOURTH: This Amended and Restated Certificate of Incorporation has been
duly approved by the Board of Directors of this Company.

          FIFTH: This Amended and Restated Certificate of Incorporation has been
duly adopted in accordance with the provisions of Sections 228 and 245, 242, of the
General Corporation Law of the State of Delaware by the Board of Directors and
the stockholders of the Company. The total number of outstanding shares entitled
to vote or act by written consent was 5,898,031 shares of Common Stock and
28,924,228 shares of Preferred Stock. A majority of the outstanding shares of
Common Stock and a majority of the outstanding shares of Preferred Stock
approved this Amended and Restated Certificate of Incorporation by written
consent in accordance with Section 228 of the General Corporation Law of the
State of Delaware and written notice of such was given by the Company in
accordance with said Section 228.

 

 

          IN WITNESS WHEREOF, Genitope Corporation has caused this Amended and
Restated Certificate of Incorporation to be signed by the Chief Executive
Officer and the Secretary in Redwood City, California this 4th day of November, 2003.

	 	 	 	 	 
	 	 	GENITOPE CORPORATION
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Dan W. Denney, Jr.
	 

	 	 	 	 
	 

	 	 	 	Chief Executive Officer

Dan W. Denney, Jr.

	 	 	 	 	 
	ATTEST:	 	 
	 
	 	 	 	 
	By:

	 	/s/ Laura Randall Woodhead
 

Laura Randall Woodhead

Secretaryexv10w1

 

Ex. 10.1

CONSOLIDATED, AMENDED AND RESTATED

LOAN, SECURITY AND AGENCY AGREEMENT

among

SILVERLEAF RESORTS, INC.

(as Borrower)

and

THE PARTIES WHICH HEREAFTER EXECUTE THIS AGREEMENT

(as Lenders)

and

TEXTRON FINANCIAL CORPORATION

(as Lender and Facility and Collateral Agent)

As of August 5, 2005

 

 

	 	 	 	 	 
	Section 1 -Definition Of Terms
	 	 	2	 
	Section 2 -The Loan
	 	 	15	 
	2.1 Facility Fee
	 	 	15	 
	2.2 Revolving Loan and Lending Limits
	 	 	16	 
	2.3 Interest Rate
	 	 	19	 
	2.4 Payments
	 	 	19	 
	2.5 Prepayments
	 	 	20	 
	2.6 Pro Rata Treatment
	 	 	22	 
	2.7 Maximum Obligation of Textron Financial Corporation Under the Loan and the Inventory Loan
	 	 	22	 
	2.8 Suspension of Advances
	 	 	22	 
	Section 3 -Collateral
	 	 	23	 
	3.1 Grant of Security Interest
	 	 	23	 
	3.2 Financing Statements
	 	 	24	 
	3.3 Priority of Each Lender’s Liens
	 	 	24	 
	3.4 Insurance
	 	 	24	 
	3.5 Protection of Collateral; Reimbursement
	 	 	24	 
	3.6 Additional Eligible Resorts
	 	 	25	 
	3.7 Modification of Eligible Notes Receivable
	 	 	25	 
	3.8 Assumption of Obligations under Eligible Notes Receivable
	 	 	26	 
	3.9 Purchaser/Criteria
	 	 	26	 
	3.10 Cross Collateralization
	 	 	26	 
	Section 4 -Conditions Precedent To The Closing
	 	 	26	 
	4.1 Conditions Precedent
	 	 	26	 
	4.2 Expenses
	 	 	31	 
	4.3 Proceedings Satisfactory
	 	 	31	 
	4.4 Conditions Precedent to Funding of Advances with Respect to Additional Eligible Resorts
	 	 	31	 
	Section 5 -Funding Procedure
	 	 	37	 
	5.1 The obligation of any Lender to make any loan shall be subject to the satisfaction of all of
the following conditions precedent:
	 	 	37	 
	Section 6 -General Representations And Warranties
	 	 	40	 
	6.1 Organization, Standing, Qualification
	 	 	40	 
	6.2 Authorization, Enforceability, Etc.
	 	 	40	 
	6.3 Financial Statements and Business Condition
	 	 	42	 
	6.4 Taxes
	 	 	42	 
	6.5 Title to Properties: Prior Liens
	 	 	43	 
	6.6 Subsidiaries, Affiliates and Capital Structure
	 	 	43	 
	6.7
Litigation, Proceedings, Etc.
	 	 	43	 
	6.8
Licenses, Permits, Etc.
	 	 	43	 
	6.9 Environmental Matters
	 	 	43	 
	6.10 Full Disclosure
	 	 	44	 
	6.11 Use of Proceeds/Margin Stock
	 	 	44	 
	6.12 Defaults
	 	 	44	 
	6.13 Compliance with Law
	 	 	44	 
	6.14 Restrictions of Borrower
	 	 	45	 
	6.15 Broker’s Fees
	 	 	46	 

 

 

	 	 	 	 	 
	6.16 Deferred Compensation Plans
	 	 	46	 
	6.17 Labor Relations
	 	 	46	 
	6.18 Resort
	 	 	46	 
	6.19 Timeshare Regimen Reports
	 	 	47	 
	6.20 Operating Contracts
	 	 	48	 
	6.21 Architectural and Environmental Control
	 	 	48	 
	6.22 Tax Identification/Social Security Numbers
	 	 	48	 
	6.23 Inventory Control Procedures
	 	 	48	 
	6.24 Additional Representations and Warranties
	 	 	48	 
	Section 7 -Covenants
	 	 	48	 
	7.1 Affirmative Covenants

	 	 	48	 
	7.2 Negative Covenants
	 	 	61	 
	Section 8 -Events Of Default
	 	 	64	 
	8.1 Nature of Events
	 	 	64	 
	Section 9 -Remedies
	 	 	66	 
	9.1 Remedies Upon Default
	 	 	66	 
	9.2 Notice of Sale
	 	 	68	 
	9.3 Application of Collateral; Termination of Agreements
	 	 	69	 
	9.4 Rights of Lender Regarding Collateral
	 	 	69	 
	9.5 Delegation of Duties and Rights
	 	 	69	 
	9.6 Agent and/or Lenders not in Control
	 	 	69	 
	9.7 Waivers
	 	 	70	 
	9.8 Cumulative Rights
	 	 	70	 
	9.9 Expenditures by Lenders or Agent
	 	 	70	 
	9.10 Diminution in Value of Collateral
	 	 	70	 
	9.11 Agent’s Knowledge
	 	 	70	 
	9.12 Lender’s Enforcement Rights
	 	 	70	 
	Section 10 -Certain Rights Of Lenders
	 	 	71	 
	10.1 Protection of Collateral
	 	 	71	 
	10.2 Performance by Agent
	 	 	71	 
	10.3 No Liability of Lender
	 	 	71	 
	10.4 Right to Defend Action Affecting Security
	 	 	72	 
	10.5 Expenses
	 	 	72	 
	10.6 Lender’s Right of Set-Off
	 	 	72	 
	10.7 No Waiver
	 	 	72	 
	10.8 Right
of Agent to Extend Time of Payment, Substitute, Release Security, Etc.
	 	 	73	 
	10.9 Assignment of Lender’s Interest
	 	 	73	 
	10.10 Notice to Purchaser
	 	 	73	 
	10.11 Collection of the Notes
	 	 	73	 
	10.12 Power of Attorney
	 	 	74	 
	10.13 Relief
from Automatic Stay, Etc.
	 	 	74	 
	10.14 Standby Servicer
	 	 	74	 
	Section 11 -Term Of Agreement
	 	 	75	 
	Section 12 -Miscellaneous
	 	 	75	 
	12.1 Notices
	 	 	75	 
	12.2 Survival
	 	 	77	 

3

 

	 	 	 	 	 
	12.3 Governing Law
	 	 	77	 
	12.4 Limitation on Interest
	 	 	77	 
	12.5 Invalid Provisions
	 	 	78	 
	12.6 Successors and Assigns
	 	 	78	 
	12.7 Amendment
	 	 	78	 
	12.8 Counterparts; Effectiveness
	 	 	78	 
	12.9 Lenders and Agent Not Fiduciaries
	 	 	78	 
	12.10 Return of Notes Receivable
	 	 	78	 
	12.11 Accounting Principles
	 	 	79	 
	12.12 Total Agreement
	 	 	79	 
	12.13 Litigation
	 	 	79	 
	12.14 Incorporation of Exhibits
	 	 	80	 
	12.15 Consent to Advertising and Publicity of Timeshare Documents
	 	 	80	 
	12.16 Directly or Indirectly
	 	 	80	 
	12.17 Headings
	 	 	80	 
	12.18 Gender and Number
	 	 	80	 
	Section 13 -Agent
	 	 	80	 
	13.1 Authorization and Action
	 	 	80	 
	13.2 Nature of Agent’s Duties
	 	 	80	 
	13.3 UCC Filings
	 	 	81	 
	13.4
Agent’s Reliance, Etc.
	 	 	81	 
	13.5 Agent and Affiliates
	 	 	82	 
	13.6 Credit Decision
	 	 	82	 
	13.7 Indemnification
	 	 	82	 
	13.8 Successor Agent
	 	 	83	 
	13.9 Duty of Care
	 	 	83	 
	13.10 Delegation of Agency
	 	 	83	 
	13.11 Agent’s Responsibilities
	 	 	85	 
	13.12 Power of Attorney
	 	 	86	 
	13.13 Ratification and Confirmation
	 	 	87	 
	13.14 Estoppel
	 	 	87	 
	13.15 Participation Agreement
	 	 	88	 
	Section 14 -Special Conditions
	 	 	88	 
	14.1 Effective Date
	 	 	88	 
	14.2 Release
	 	 	88	 

4

 

CONSOLIDATED, AMENDED AND RESTATED

LOAN,
SECURITY AND AGENCY AGREEMENT

     THIS CONSOLIDATED, AMENDED AND RESTATED LOAN, SECURITY AND AGENCY AGREEMENT, dated as of
August 5, 2005, entered into by and among SILVERLEAF RESORTS, INC. (as “Borrower”), the
parties, including TEXTRON FINANCIAL CORPORATION (“TFC”), a Delaware corporation, which
execute and deliver this Agreement in their respective capacities as lenders hereunder
(collectively, the “Lenders” and each individually, a “Lender”) and TEXTRON
FINANCIAL CORPORATION as facility agent and collateral agent (“Agent”).

W I T N E S S E T H:

     WHEREAS, Borrower and TFC entered into an Amended and Restated Loan, Security and Agency
Agreement (Tranche A), dated as of April 30, 2002, as amended to date (the “Tranche A Loan
Agreement”), pursuant to which the Borrower executed an Amended and Restated Secured Promissory
Note in the original principal amount of $56,894,400.00, dated April 30, 2002, in favor of TFC (the
“Tranche A Note”);

     WHEREAS, Borrower and Lenders entered into an Amended and Restated Loan, Security and Agency
Agreement (Tranche B), dated as of April 30, 2002, as amended to date (the “Tranche B Loan
Agreement”), pursuant to which Borrower executed: (i) an Amended and Restated Secured
Promissory Note in the original principal amount of $40,305,200.00, dated April 30, 2002, in favor
of TFC; (ii) an Amended and Restated Secured Promissory Note in the original principal amount of
$7,899,500.00, dated April 30, 2002, in favor of Webster Bank, currently known as Webster Bank,
National Association; and (iii) a Secured Promissory Note in the original principal amount of
$7,899,500.00, dated April 30, 2002, in favor of Bank of Scotland (singly and collectively the
“Tranche B Note”);

     WHEREAS, Borrower and TFC entered into an Amended and Restated Loan and Security Agreement
(Tranche C), dated as of April 17, 2001, as amended to date (the “Tranche C Loan
Agreement”, collectively with the Tranche A Loan Agreement and the Tranche B Loan Agreement,
the “Original Loan Agreement”), pursuant to which Borrower executed an Amended and Restated
Secured Promissory Note in the original principal amount of $8,060,000.00, dated April 30, 2002, in
favor of TFC (the “Tranche C Note”, collectively with the Tranche A Note and the Tranche B
Note, the “Original Note”);

     WHEREAS, the Lenders and Borrower have agreed to enter into this Agreement, as such term is
hereafter defined, to consolidate, amend and restate the: (i) Tranche A Loan Agreement; (ii)
Tranche B Loan Agreement; and (iii) Tranche C Loan Agreement;

     WHEREAS, pursuant to this Agreement, the Original Note will be replaced by a Consolidated,
Amended and Restated Secured Promissory Note or Notes in the aggregate principal amount of
$100,000,000.00 in favor of Agent, as agent for each of the Lenders (singly and collectively the
“Note”);

 

 

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

     NOW, THEREFORE, in consideration of the mutual covenants and agreements contained in this
Agreement, and for other good and valuable consideration, the receipt and adequacy of which are
acknowledged, the parties to this Agreement, intending to be legally bound, agree as follows:

Section 1-Definition Of Terms

     Capitalized terms used in this Agreement are defined in this Section 1. The definitions
include the singular and plural forms of the terms defined.

     (a) Additional Eligible Resorts or Additional Eligible Resort. The terms
“Additional Eligible Resorts” and “Additional Eligible Resort” shall have the meanings
ascribed to such terms in Section 3.6 hereof.

     (b) Advance. A portion of the proceeds of the Loans advanced from time to time
by Lenders to Borrower in accordance with the terms of this Agreement.

     (c) Affiliate. Any party controlled by, controlling, or under common control
with, Borrower.

     (d) Agreement. This Consolidated, Amended and Restated Loan, Security and
Agency Agreement by and among Borrower, Agent and each Lender which executes this Agreement
(including the Exhibits and Schedules to it), as it may be amended from time to time.

     (e) Assignment of Notes Receivable and Mortgages. The term “Assignment of
Notes Receivable and Mortgages” shall mean a recordable Collateral Assignment of Notes
Receivable and Mortgages, in the form attached hereto as Exhibit G, made by Borrower in
favor of Agent, as collateral agent for each Lender, evidencing the assignment to Agent, as
collateral agent for each Lender, of all of the Pledged Notes Receivable and Mortgages.

     (f) Backup Servicing Agreement. Shall mean that certain Backup Servicing
Agreement dated as of April 10, 2001, as amended to date.

     (g) Borrowing Base. With respect to each Eligible Note Receivable, pledged to
Agent hereunder in connection with each Advance from and after the Effective Date, an amount
equal to seventy-five percent (75%) of the remaining principal balance of each such Eligible
Note Receivable.

     (h) Closing Date. The term “Closing Date” shall mean the date hereof.

2

 

     (i) Code. The Uniform Commercial Code in force in the State of Rhode Island as
amended from time to time.

     (j) Collateral. Collectively, all now owned or hereafter acquired right, title
and interest of Borrower, in all of the following:

(i) Pledged Notes Receivable and all proceeds of or from them;

(ii) Mortgages and all proceeds of or from them;

(iii) Documents, instruments, accounts, chattel paper, and general
intangibles relating to the Pledged Notes Receivable and the related
Mortgages;

(iv) All collateral under the Inventory Loan;

(v) The Silverleaf Finance II Stock;

(vi) The Silverleaf Finance II Subordinated Note;

(vii) All books, records, reports, computer tapes, disks and software
relating to the Collateral; and

(viii) Extensions, additions, improvements, betterments, renewals,
substitutions and replacements of, for or to any of the Collateral, wherever
located, together with the products, proceeds, issues, rents and profits
thereof, and any replacements, additions or accessions thereto or
substitutions thereof.

     (k) Commitment. The term “Commitment” shall refer singly to the obligation of
each Lender to make a Loan or Loans to Borrower in an aggregate amount not to exceed the Pro
Rata Percentage for each Lender of each Advance and collectively to all Loans to be made by
all Lenders as provided herein. The Commitment as of the Closing Date is set forth on
Exhibit A hereto, and may from time to time be increased by Agent and Lender upon written
notice to Borrower. The maximum aggregate Commitment of the Lenders hereunder shall be
$100,000,000.00.

     (l) Common Elements. All common elements, including but not limited to any
limited common elements, as each such common element is defined or provided for in the
Declaration or other Timeshare Documents.

     (m) Custodian. Wells Fargo Bank, National Association having an address of 751
Kasota Ave, MAC# N9328-011, Minneapolis, MN 55414, or such other custodial agent as may be
approved by Agent in writing from time to time. Custodian shall be Lender’s agent for the
purpose of maintaining possession of all present and future Collateral documents described
in Section 3.5 hereof.

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     (n) Custodial Agreement. The Custodial and Collateral Agency Agreement, dated
as of January 13, 2005 by and among Agent, as Agent for each Lender, Borrower and Custodian,
pursuant to which the Custodian is to maintain possession of all present and future
Collateral documents described in Section 3.5 hereof, or any custodial agreement entered
into as a replacement of such agreement..

     (o) Debtor Relief Laws. Any applicable liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization or similar law, proceeding
or device providing for the relief of debtors from time to time in effect and generally
affecting the rights of creditors.

     (p) Declaration or Declarations. With respect to each Resort, the applicable
Declaration or Declarations described on Schedule 1.1(p) attached hereto.

     (q) Declarant Rights. Shall mean the rights of the declarant in the
Declaration for each Resort.

     (r) Default. An event or condition the occurrence of which immediately is or,
with a lapse of time or the giving or notice or both, becomes an Event of Default.

     (s) Default Rate. The term “Default Rate” shall have the meaning given to such
term in the Note.

     (t) Division or Commission. The governmental authority of each state in which
a Resort is located, having jurisdiction over the establishment and operation of the Resorts
in question and the sale of Intervals at such Resort.

     (u) EBITDA. The term EBITDA means, with respect to any Person for any period:
(a) the sum of (i) net income (but excluding any extraordinary gains or losses or any gains
or losses from the sale or disposition of assets other than in the ordinary course of
business), (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.

     (v) Effective Date. The term “Effective Date” shall have the meaning given in
Section 14.1 hereof.

     (w) Eligible Notes Receivable. Those Pledged Notes Receivable which satisfy
each of the following criteria:

(i) Borrower shall be the sole payee;

(ii) it arises from a bona fide sale by Borrower of one or more Intervals;

4

 

(iii) the Interval sale from which it arises shall not have been cancelled
by Purchaser, and any statutory or other applicable cancellation or
rescission period shall have expired and the Interval sale is otherwise in
compliance with this Agreement;

(iv) it is secured by a Mortgage on the purchased Interval;

(v) principal and interest payments on it are payable to Borrower in legal
tender of the United States;

(vi) payments of principal and interest on it are payable in equal monthly
installments;

(vii) it shall have an original term of no more than one hundred twenty
(120) months;

(viii) 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 each Interval, and Purchaser shall have received no cash or other rebates
of any kind;

(ix) no monthly installment is more than thirty (30) days contractually past
due at the time of an Advance in respect of such Eligible Note Receivable,
or more than sixty (60) days contractually past due at any time;

(x) the rate of interest payable on the unpaid balance is at least the rate
required so that when the Advance is made in respect of such Eligible Note
Receivable the average interest rate on all Eligible Notes Receivable in
respect of which Advances are outstanding shall not be less than twelve and
one-half percent (12.5%) per annum at any time;

(xi) Purchaser of the related Interval has immediate access, for the
timeshare “unit week” related to such purchase, to the Interval described in
the Mortgage securing such Eligible Note Receivable, which Interval has been
completed, developed, and furnished in accordance with the specifications
provided in the Purchaser’s purchase contract, public offering statement and
other Timeshare Documents; and Purchaser has, subject to the terms of the
Declaration, purchase contract, public offering statement and other
Timeshare Documents, complete and unrestricted access to the related
Interval and the Resort;

(xii) neither Purchaser of the related Interval or any other maker of the
Note is an Affiliate of, or related to, or employed by Borrower;

(xiii) Purchaser or other maker has no claim against Borrower and no
defense, set-off or counterclaim with respect to the Note Receivable;

5

 

(xiv) the maximum remaining principal balance of any such Note Receivable
shall not exceed $35,000 and the total maximum remaining principal balance
of the Notes Receivable executed by any one Purchaser or other maker shall
not exceed $60,000 in the aggregate (or such greater amount as may be
approved in writing in advance by Agent);

(xv) it is executed by a U.S. or Canadian resident; provided, however, that
no more than ten percent (10%) of the outstanding principal balance of all
Eligible Notes Receivable shall at any time be comprised of Notes Receivable
executed by Canadian residents, and, to the extent such outstanding
principal balance of such Notes exceeds ten percent (10%), they shall not be
considered Eligible Notes Receivable;

(xvi) the original of such Note Receivable has been endorsed to Agent and
delivered to the Custodian as provided in this Agreement, and the terms
thereof and all instruments related thereto shall comply in all respects
with all applicable federal and state laws and the regulations promulgated
thereunder;

(xvii) the Unit in which the timeshare Interval being financed or evidenced
by such Note Receivable is located, shall not be subject to any Lien which
is not previously consented to in writing by Agent; and

(xviii) If the loan is a newly originated Eligible Note Receivable which is
replacing an existing Eligible Note Receivable pledged as Collateral under
the Agreement and the proceeds have been used to finance the purchase of an
Interval which is being upgraded by the Purchaser to a more expensive
Interval:

(1) the principal balance of the existing Eligible Note Receivable
which is being upgraded may still be included for purposes of
calculating the Borrowing Base for a period of time expiring on the
earlier to occur of (i) the 31st day after the consumer documents
effecting the upgrade have been executed or (ii) the date on which
any payment on such Eligible Note Receivable becomes thirty (30) or
more days past due;

(2) on or before the second business day after the expiration of the
statutory rescission period in connection with any consumer documents
executed effecting any upgrade involving an Eligible Note Receivable
and in any event within ten (10) days of such upgrade, the Borrower
shall deliver to the Agent or its designee the original of the new
promissory note, comparable instrument or installment sale contract
executed in connection with such upgrade duly endorsed in blank by
the Borrower and the Borrower will cause all payments made with
respect to such new promissory

6

 

note, comparable instrument or installment sale contract to be
forwarded to the lockbox; and

(3) any new upgraded Note Receivable involving a prior Eligible Note
Receivable shall only be included as part of the Borrowing Base if
the prior Eligible Note Receivable has been removed from the
Borrowing Base and the new upgraded Note Receivable satisfies all
conditions for an Eligible Note Receivable.

     (x) Encumbered Intervals. The Intervals subject to the Mortgages.

     (y) Environmental Laws. Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time (“CERCLA”), the Resource Conservation
and Recovery Act of 1976, as amended from time to time (“RCRA”), the Superfund Amendments
and Reauthorization Act of 1986, as amended, the federal Clean Air Act, the federal Clean
Water Act, the federal Safe Drinking Water Act, the federal Toxic Substances Control Act,
the federal Hazardous Materials Transportation Act, the federal Emergency Planning and
Community Right to Know Act of 1986, the federal Endangered Species Act, the federal
Occupational Safety and Health Act of 1970, the federal Water Pollution Control Act, all
state and local environmental laws, rules and regulations of each state in which a Resort is
located, as all of the foregoing legislation may be amended from time to time, and any
regulations promulgated pursuant to the foregoing; together with any similar local, state or
federal laws, rules, ordinances or regulations either in existence as of the date hereof, or
enacted or promulgated after the date of this Agreement, that concern the management,
control, storage, discharge, treatment, containment, removal and/or transport of Hazardous
Materials or other substances that are or may become a threat to public health or the
environment; together with any common law theory involving Hazardous Materials or substances
which are (or alleged to be) hazardous to human health or the environment, based on
nuisance, trespass, negligence, strict liability or other tortious conduct, or any other
federal, state or local statute, regulation, rule, policy, or determination pertaining to
health, hygiene, the environment or environmental conditions.

     (z) Environmental Indemnification Agreement. The term “Environmental
Indemnification Agreement” shall mean the Environmental Indemnification Agreement made by
Borrower to Lenders pursuant to this Original Loan Agreement, as the same may be amended
from time to time.

     (aa) Exchange Company. Resort Condominiums International, Inc. (“RCI”).

     (bb) Event of Default. Defined in Section 8.1 of this Agreement.

     (cc) Final Maturity Date. The term “Final Maturity Date” shall mean the
earlier of (a) June 30, 2011 or (b) the weighted average maturity date of the Pledged Notes
Receivable pledged as Collateral as of the end of the Revolving Loan Term, as determined by
the Agent in its reasonable discretion.

7

 

     (dd) Financial Statements. The tax returns and balance sheets and statements
of income and expense of Borrower, and the related notes and schedules delivered by Borrower
to Agent prior to the date of this Agreement and provided for in Section 4.4(c) of this
Agreement; and quarterly and annual financial statements and reports required to be provided
to Lenders pursuant to Section 7.1(h).

     (ee) GAAP. Generally accepted accounting principles, applied on a consistent
basis, as described in Opinions of the Accounting Principles Board of the American Institute
of Certified Public Accountants and/or in statements of the Financial Accounting Standards
Board which are applicable in the circumstances as of the date in question.

     (ff) Hazardous Materials. “Hazardous substances,” “hazardous waste” or
“hazardous constituents,” “toxic substances”, or “solid waste”, as defined in the
Environmental Laws, and any other contaminant or any material, waste or substance which is
petroleum or petroleum based, asbestos, polychlorinated biphenyls, flammable explosives, or
radioactive materials.

     (gg) Interest Rate. The Interest Rate on the Note shall be a variable rate,
adjusted as of each Prime Rate Determination Date, equal to the sum of the Prime Rate,
determined as of each Prime Rate Determination Date, plus one percent (1.0%) per annum,
provided, however, that at no time shall the Interest Rate be less than six percent (6.0%)
per annum.

     (hh) Interval. With respect to each Resort the undivided fractional fee
interval ownership interest as a tenant-in-common (sometimes referred to in the Timeshare
Documents as a vacation ownership interest, condoshare interest, or condoshare week) in a
Unit sold to a Purchaser by delivery of a deed for a time-share period per calendar year
(or, in the case of a biennial use period, per alternate calendar year) of one week (as
defined in the Declaration), together with all appurtenant rights and interests, including,
without limitation, appurtenant rights to use Common Elements, and easement, license, access
and use rights in and to all Resort facilities and amenities (as described in the
Declaration), all as more particularly described in the Declaration or other Timeshare
Documents. Notwithstanding the foregoing, the term “Interval” shall also include, with
respect to the Oak N’ Spruce Resort only, the beneficial interest in the entity which owns
each of the Units at the Oak N’ Spruce Resort, as evidenced by the delivery to the Purchaser
of any such beneficial interest of a certificate of beneficial interest for a timeshare
period per calendar year (or, in the case of biennial use period, per alternate calendar
year) of one week (as defined in the Oak N’ Spruce Resort Declaration), together with all
pertinent rights and interests, including, without limitation, a pertinent right to use
Common Elements, and easements, license, access and use rights in and to all Oak N’ Spruce
Resort facilities and amenities, all as more particularly described in the Declaration or
other Timeshare Documents for the Oak N’ Spruce Resort.

     (ii) Inventory Loan. The term “Inventory Loan” shall mean that certain
$21,000,000 time share interval inventory loan provided by TFC to Borrower

8

 

pursuant to that certain Amended and Restated Loan and Security Agreement dated as of
March 5, 2004, as amended to date, (the “Inventory Loan Agreement”). The terms “Existing
Inventory Loan” and “New Inventory Loan” shall have the meanings given in the Inventory Loan
Agreement.

     (jj) Inventory Mortgage or Inventory Mortgages. The term “Inventory Mortgage”
or “Inventory Mortgages” shall mean singly and collectively, a properly recorded, first
priority mortgage, deed of trust, deed to secure debt, assignment of beneficial interest or
other security instrument, as applicable, executed and delivered by Borrower to Agent
encumbering all of the right, title and interest of the Borrower in the Intervals and Common
Elements, and related or appurtenant easement, access and use rights and benefits, that is
collateral under the Inventory Loan.

     (kk) Lien. Any interest in property securing an obligation owed to, or claim
by, a Person other than the owner of such property, whether such interest arises in equity
or is based on the common law, statute, or contract.

     (ll) Loan or Loans. The terms “Loan” and “Loans” mean, as the context
requires, singly each loan and collectively all loans made by TFC to Borrower prior to the
Effective Date pursuant to the Original Loan Agreement. The term “Loan” shall also mean, as
the context requires, collectively all Loans made to Borrower hereunder.

     (mm) Loan Documents. Collectively, this Agreement and the following documents
and instruments listed below as such agreements, documents, instruments or certificates may
be amended, renewed, extended, restated or supplemented from time to time.

(i) This Agreement;

(ii)  The Note;

(iii) The Environmental Indemnification Agreement;

(iv) The Assignment of Notes Receivable and Mortgages;

(v) Borrower’s Certificate and Request for Advance;

(vi) The Lockbox Agreement;

(vii) The Custodial Agreement;

(viii) The Stock and Subordinated Note Pledge Agreement;

(ix) The Standby Servicing Agreement Assignment;

(x) Financing Statements; UCC financing statements covering the
Collateral, to be filed with the Texas Secretary of State and the Secretary

9

 

of State and/or such other office where UCC financing statements are
required to be filed pursuant to the Code; and

(xi) Other Items; Such other agreements, documents, instruments,
certificates and materials as Agent may request to evidence the Obligations;
to evidence and perfect the rights and Liens and security interests of
Agent, as agent for Lenders, contemplated by the Loan Documents, and to
effectuate the transactions contemplated herein, as such agreements,
documents, instruments or certificates may be hereafter amended, renewed,
extended, restated or supplemented from time to time.

     (nn) Loan Year. The period commencing on the Effective Date through the last
day of the next full twelve calendar month period and each successive twelve calendar month
period thereafter during the Loan Term.

     (oo) Lockbox Agent. JP Morgan Chase Bank, a New York banking association
having a place of business at 2200 Ross Avenue, Dallas, Texas 75201, or such other financial
institution as may be approved by Agent in writing from time to time.

     (pp) Lockbox Agreement. The Lockbox and Servicing Agreement, dated as of
December 16, 1999, by and among Borrower, Lenders, Agent, Servicing Agent and Lockbox Agent,
pursuant to which the Lockbox Agent is to provide lockbox, reporting and related services
and is to provide for the receipt of payments on the Notes Receivable and the disbursement
of such payments to Agent.

     (qq) Mandatory Prepayment. Any prepayment required by Section 2.5(b) of this
Agreement.

     (rr) Marketing and Sales Expenses. Shall mean all promotion, lead generation,
sales commissions and all other marketing expenses incurred or paid by Borrower pursuant to
any marketing agreements or otherwise.

     (ss) Mortgage. A properly recorded, first priority mortgage, deed of trust,
deed to secure debt, assignment of beneficial interest or other security instrument, as
applicable, executed and delivered by each Purchaser to Borrower, securing a Pledged Note
Receivable and encumbering all of the right, title and interest of such Purchaser in the
related Encumbered Interval and Common Elements, and related or appurtenant easement, access
and use rights and benefits. Agent acknowledges that assignments of beneficial interest
executed by Purchasers of Intervals at Oak N’ Spruce Resort after July 2004 will not be
recorded.

     (tt) Net Securitization Cash Flow. All right, title and interest of Silverleaf
Finance II, Inc., a wholly owned subsidiary of Borrower, in any excess cash flow derived
from the Notes Receivable sold by Borrower to Silverleaf Finance II, Inc. and then sold by
Silverleaf Finance II, Inc. to Textron Financial Corporation, as Group Two Lender under the
Silverleaf Finance II Documents.

10

 

     (uu) Note. The term “Note” shall have the meaning given in the recitals
hereto.

     (vv) Note Receivable. A promissory note executed in favor of Borrower in
connection with a Purchaser’s acquisition of an Interval.

     (ww) Obligations. All amounts due or becoming due to each Lender in respect of
the Loan or Loans under any of the Loan Documents, including principal, interest, prepayment
premiums, contributions, taxes, insurance, loan charges, custodial fees, attorneys’ and
paralegals’ fees and expenses and other fees or expenses incurred by a Lender or advanced to
or on behalf of Borrower by a Lender pursuant to any of the Loan Documents, and the prompt
and complete payment and performance by Borrower of all obligations, indebtedness and
liabilities pursuant to this Agreement or any of the Loan Documents or otherwise

     (xx) Operating Contract or Operating Contracts. As defined in Section 6.20.

     (yy) Operating Expenses. Shall mean the total of all expenditures, computed in
accordance with Generally Accepted Accounting Principles, of whatever kind relating to the
ownership, operation, maintenance and management of the Resorts that are incurred on a
regular monthly or other periodic basis, including, without limitation, utilities, ordinary
and capital repairs and maintenance, insurance premiums, license fees, property taxes and
assessments, management fees, payroll and related taxes, computer processing charges,
operational equipment or other lease payments as approved by Agent, and other similar costs.

     (zz) Participant. Participant shall mean, singly and collectively, any bank or
other entity, which is indirectly or directly funding any Lender with respect to the Loan,
in whole or in part, including, without limitation, any direct or indirect assignee of, or
participant in, the Loan.

     (aaa) Payment Authorization Agreement. Pre-authorized electronic debit
agreement by a Purchaser for payment of a Note Receivable.

     (bbb) Person. An individual, partnership, corporation, limited liability
company, trust, unincorporated organization, other entity, or a government or agency or
political subdivision thereof.

     (ccc) Pledged Notes Receivable. Any Note Receivable which at any time has been
pledged to Agent on behalf of Lenders by Borrower pursuant to this Agreement or any of the
Loan Documents.

     (ddd) Prescribed Laws. The term “Prescribed Laws” shall mean, collectively, (a)
the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept
and Obstruct Terrorism Act of 2001 (Public Law 107 56) (the USA PATRIOT Act), (b) Executive
Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to
Blocking Property and Prohibiting Transactions With

11

 

Persons Who Commit, Threaten to Commit, or Support Terrorism, (c) the International
Emergency Economic Power Act, 50 U.S.C. § 1701 et seq., (d) the Trading with the Enemy Act,
50 U.S.C. App. 1 et seq., and (d) all other Legal Requirements relating to money laundering
or terrorism, and, in each case, any Executive Orders or regulations promulgated under any
such laws.

     (eee) Prime Rate Determination Date. The term “Prime Rate Determination Date”
shall mean the first day of each month, provided, however, that if the first day of any
month is not a Business Day, than the Prime Rate Determination Date for such month shall be
the Business Day immediately preceding the first day of the month in question.
Notwithstanding the foregoing, the initial Prime Rate Determination Date shall be the
Effective Date.

     (fff) Prime Rate. The highest prime rate of interest from time to time
announced or published in the Money Rates column of the Wall Street Journal (Eastern
Edition) (the “WSJ”). In the event that the prime rate established by the WSJ shall no
longer be available, due to either the nonexistence of the WSJ or the WSJ’s failure to
publish a prime rate, then the Prime Rate shall be the highest prime rate published by a
major money center bank selected by Lender.

     (ggg) Property or Properties. Any interest in any kind of property or asset,
whether real, personal or mixed, tangible or intangible.

     (hhh) Pro Rata Percentage. The applicable percentage of the Loan that each
Lender has agreed to make to Borrower pursuant to this Agreement as set forth in Exhibit A
hereto, as such percentage may from time to time be amended by Agent and the applicable
Lender.

     (iii) Purchase Price. The total purchase price of a timeshare Interval, as set
forth in the Timeshare Documents and Note Receivable relating to the purchase of such
Interval.

     (jjj) Purchaser. Any Person who purchases one or more Intervals.

     (kkk) Quarterly Financial Report. Individually and collectively, as
applicable, the financial reports delivered in accordance with Section 7.1(h)(i).

     (lll) Resort or Resorts (also “Eligible Resort” or “Eligible Resorts”).
Individually and collectively, as applicable, each or all of the interval ownership and
time-share projects consisting of: (i) (A) Holly Lake Ranch, Hawkins, Texas; (B) Piney
Shores Resort, Conroe, Texas; (C) Lake O’ The Woods, Flint, Texas; (D) Hill Country Resort,
Canyon Lake, Texas; (E) Ozark Mountain Resort, Kimberling City, Missouri; (F) Holiday Hills
Resort, Branson, Missouri; (G) Fox River Resort, LaSalle County, Illinois; (H) Timber Creek
Resort, Jefferson County, Missouri (I) Oak N’ Spruce Resort, South Lee, Massachusetts; (J)
Apple Mountain Resort, Habersham County, Georgia; (K) The Villages, Flint, Texas; (L)
Silverleaf’s Seaside Resort, Galveston County, Texas; (M) Orlando Breeze Resort, Polk
County, Florida (also sometimes individually and collectively referred to herein as the
“Existing Resorts”) and

12

 

     (ii) subject to Agent’s prior written approval and satisfaction by Borrower of the
conditions precedent set forth in Sections 3.6 and 4.4 hereof, the Additional Eligible
Resorts. The term “Resort” or “Resorts” includes, among other things, the undivided annual
or (biennial) timeshare ownership interests (Intervals) in the respective Resorts, and the
appurtenant exclusive rights to use Units in one or more buildings or phases and all
appurtenant or related properties, amenities, facilities, equipment, appliances, fixtures,
easements, licenses, rights and interests, including without limitation, the Common
Elements, as established by and more fully defined and described in the respective
Declarations, and the other Timeshare Documents.

     (mmm) Revenues. Shall mean all proceeds from the sale of Intervals, regardless
of whether such proceeds are in the form of cash or Notes Receivable.

     (nnn) Revolving Loan Term. Shall mean the period commencing on the Effective
Date and ending on June 30, 2008.

     (ooo) Security. Shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.

     (ppp) Servicing Agent. Agent’s exclusive agent, which shall be such Person or
Persons designated by Borrower and approved by Agent in its sole discretion, for the
purposes of billing and collecting amounts due on account of the Pledged Notes Receivable,
providing reports pursuant to the Lockbox Agreement and performing other servicing functions
not performed by the Lockbox Agent. Borrower shall be the Servicing Agent until: (i) an
Event of Default shall have occurred and Agent replaces Borrower as Servicing Agent as
provided in Section 9.1 (i); or (ii) Agent elects to appoint the Standby Servicer in
accordance with Section 10.14 hereof.

     (qqq) Silverleaf Club. Shall mean Silverleaf Club, a Texas non-profit
corporation.

     (rrr) Silverleaf Finance II Documents. Shall mean the SPV Loan Agreement, the
Developer Transfer Agreement, the Demand Notes and all other agreements or documents
executed in connection with the TFC Conduit Loan, as each may be amended, restated or
otherwise modified from time to time.

     (sss) Silverleaf Finance II Stock. Shall mean all equity interests in
Silverleaf Finance II, Inc., all documents, certificates or instruments representing any of
the foregoing and all cash, securities, dividends, rights and other property at any time
received or receivable in respect of or in exchange for the foregoing, and all proceeds of
the foregoing.

     (ttt) Silverleaf Finance II Subordinated Note. Shall mean the Subordinated
Note, dated as of December 19, 2003, payable by SPV to the order of Silverleaf Resorts,
Inc., and any other promissory note issued in replacement or restatement thereof, or
otherwise issued to evidence SPV’s obligation to pay the deferred purchase price of
Receivables under the Developer Transfer Agreement which is part of

13

 

the Silverleaf Finance II Documents, in each case as amended or otherwise modified from
time to time, and all proceeds of the foregoing.

     (uuu) Silverleaf Finance II Stock and Subordinated Note Pledge Agreement.
Shall mean the agreement pursuant to which the Silverleaf Finance II Stock and the
Silverleaf Finance II Subordinated Note is pledged to Agent, as agent for each Lender, as
security for the Loan.

     (vvv) SPV. Shall mean Silverleaf Finance II, Inc., a Delaware corporation.

     (www) SPV Assets. Shall mean all assets sold or conveyed by Borrower to the
SPV pursuant to the Silverleaf Finance II Documents.

     (xxx) Standby Servicer. Shall mean the Person selected by Agent to act as
standby servicer in accordance with this Agreement. The current Standby Servicer is Concord
Servicing Corporation.

     (yyy) Standby Servicing Agreement. Shall mean the agreement pursuant to which
the Standby Servicer shall provide servicing functions with respect to the Pledged Notes
Receivable in accordance with Sections 9.1(i) and 10.14 hereof.

     (zzz) Stock and Subordinated Note Pledge Agreement. Shall mean the agreement
pursuant to which all issued and outstanding shares of Silverleaf Finance II, Inc.’s capital
stock and all right, title and interest in such shares, all certificates, instruments or
other documents evidencing or representing the same and all dividends and distributions
therefrom, including dividends and distributions paid in stock (the “Silverleaf Finance II,
Inc. Stock”), and the subordinated note evidencing Silverleaf Finance II, Inc.’s obligation
to pay the deferred purchase price of the receivables under the Silverleaf Finance II
Documents are pledged to Agent, as agent for each Lender, as security for the Loan.

     (aaaa) Survey. A plat or survey of the Resorts prepared by a licensed surveyor
acceptable to Agent and in a form acceptable to Agent.

     (bbbb) Term. The period beginning on the Effective Date and ending on the
Final Maturity Date.

     (cccc) TFC Conduit Loan. Shall mean that certain loan facility provided by
Textron Financial Corporation (TFC) to SPV in accordance with the terms of the Silverleaf
Finance II Documents.

     (dddd) Timeshare Act. Any statute, act, regulation, ordinance, rule or law
applicable to the establishment and operation of the Resorts and the sales of the Intervals.

14

 

     (eeee) Timeshare Documents. Any registration statement required under any
Timeshare Act approving the establishment and operation of the Resorts and the sales of
Intervals.

     (ffff) Timeshare Owners’ Association. With respect to each Resort, the
applicable not-for-profit corporations described on Schedule 1.1(yyy).

     (gggg) Tangible Net Worth. Tangible Net Worth means, with respect to any
Person, the amount calculated in accordance with GAAP as: (i) the consolidated net worth of
such Person and its consolidated subsidiaries, minus (ii) the consolidated intangibles of
such Person and its consolidated subsidiaries, 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.
Notwithstanding the foregoing, if subsequent to the Effective Date deferred sales are no
longer considered an asset under GAAP, Agent agrees, at the request of Borrower, to
determine, in its reasonable discretion, whether deferred sales should continue to be
considered an asset for purposes of determining Borrower’s Tangible Net Worth.

     (hhhh) Total Interest Expense. For any period, the aggregate amount of
interest required to be paid or accrued by Borrower and its subsidiaries during such period
on all indebtedness of Borrower and its subsidiaries outstanding during all or any part of
such period, whether such interest was or is required to be reflected as an item of expense
or capitalized, including payments consisting of interest in respect of any capitalized
lease, or any synthetic lease and including commitment fees, agency fees, facility fees,
balance deficiency fees and similar fees or expenses in connection with the borrowing of
money.

     (iiii) Transfer Account. The account established by Agent to which all Loans
by Lenders will be made.

     (jjjj) UCC Financing Statements. The UCC-1 Financing Statements, naming
Borrower as debtor and Agent as secured party on behalf of Lenders, heretofore or hereafter
filed in connection with the Loans and all amendments thereto.

     (kkkk) Unit. With respect to each Resort, one living unit in a building
incorporated into the Resort pursuant to the Declaration, together with all related or
appurtenant Common Elements and related or appurtenant interests in services, easements and
other rights or benefits, as described and provided for in the Declaration, including but
not limited to the right to use the Resort amenities and facilities in accordance with the
Timeshare Documents.

Section 2-The Loan

     2.1 Facility Fee. Borrower acknowledges and agrees that a facility fee in the amount
of one half percent (0.5%) of the Lenders’ Commitment as set forth on Exhibit A hereto is due and
payable to Agent. Borrower acknowledges, agrees and confirms that Lender has earned such facility
fee notwithstanding whether the Loan or any portion is funded and further agrees that the facility
fee shall be payable by Borrower to Agent from the proceeds of the initial Advance

15

 

hereunder. The initial Advance, which shall be in an amount at least equal to the facility
fee, shall occur on the date that this Agreement becomes effective, and replaces the Original Loan
Agreement.

     Borrower further acknowledges and agrees that upon each increase of the Lenders’ Commitment in
accordance with Section 1(k), an additional facility fee in the amount of one half percent (0.5%)
of such increase shall be due and payable to Agent. Borrower acknowledges, agrees and confirms
that Lender(s) shall have earned such facility fee notwithstanding whether the Loan or any portion
is funded and further agrees that such facility fee shall be payable by Borrower from the proceeds
of the next Advance after such increase or, if sooner, within 30 days after such increase.

	 	2.2	 	Revolving Loan and Lending Limits.

     (a) Lenders. Borrower and TFC agree that no party other than TFC will execute
this Agreement in the capacity of Lender without the prior written consent of Borrower.

     (b) Revolving Loan. Upon the terms and subject to the conditions set forth in
this Agreement, each Lender agrees severally, at any time and from time to time during the
Revolving Loan Term, to make a loan or loans to Borrower, and Borrower may borrow, repay and
reborrow during the Revolving Loan Term, in an aggregate amount not to exceed at any time
the lesser of each Lender’s Pro Rata Percentage of: (i) the Borrowing Base; or (ii) such
Lender’s Commitment as set forth on Exhibit A hereto, which may from time to time be
increased by Agent and Lender upon written notice to Borrower.

     (c) Lending Limits. Borrower acknowledges, agrees and confirms that the
obligations of all Lenders, including TFC, to make Loans under this Agreement to Borrower is
limited to the lesser of: (i) the Borrowing Base or (ii) the maximum aggregate Commitment of
$100,000,000.00. Borrower further acknowledges, agrees and confirms that the obligation of
each Lender, including TFC, to make loans hereunder to Borrower is limited to: (i) with
respect to each Advance hereunder, each Lender’s Pro Rata Percentage of any such Advance
hereunder and (ii) with respect to all Advances made hereunder, such Lender’s obligation
hereunder shall be limited to its Commitment as set forth on Exhibit A hereto, which may
from time to time be increased by Agent and Lender upon written notice to Borrower.

     (d) Making of Loans. Each Loan by a Lender shall be made ratably in accordance
with each Lender’s respective Pro Rata Percentage, provided, however, that the failure of
any Lender to make any required Loan shall not in itself relieve any other Lender of its
obligation to make any required Loan hereunder. Likewise, no Lender, including TFC, shall
be responsible or liable for the failure of any other Lender to make any Loan required to be
made by such other Lender, nor shall any Lender, including TFC, be obligated to make any
Loan or Loans in excess of its respective Pro Rata Percentage, but not in excess of its
Commitment, in the event that any other Lender fails or refuses to make a Loan or Loans as
provided hereunder. As and when additional

16

 

Lenders, other than TFC, execute and deliver this Agreement, then (A) such additional Lenders
shall be deemed to have simultaneously purchased from each of the other Lenders which has
previously executed and delivered this Agreement, a share in such other Lenders’ Loans so that the
amount of the Loans of all Lenders shall be pro rata as otherwise set forth above and (B) such
other adjustments shall be made from time to time as shall be equitable to insure that the Advances
to Borrower are made ratably by each Lender in accordance with its respective Pro Rata Percentage.

          (e) Note Evidencing Borrower’s Obligations. 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 Agent, as agent for each Lender, which Note shall be dated as of the date hereof and
be in the principal amount of $100,000,000.00. The Note will mature on the Final Maturity
Date, bear interest as provided in Section 2.3 hereof and be otherwise entitled to the
benefits of this Agreement. Notwithstanding the stated principal amount of the Note, the
aggregate outstanding principal amount of the Loan at any time shall be the aggregate
principal amount owing on the Note at such time. Agent shall and is hereby authorized to
record on the grid attached to the Note (or, alternatively, in its internal books and
records) the date and amount of each Advance made by Lenders, the interest rate and interest
period applicable thereto and each repayment thereof; and such grid or other books and
records shall, as between Borrower and each Lender, absent manifest error, constitute prima
facie evidence of the accuracy of the information contained therein. Failure by Agent to so
record any Advance made by Lenders (or any error in such recordation) or any payment thereon
shall not affect the Obligations of Borrower under this Agreement or under the Note and
shall not adversely affect Lender’s rights under this Agreement with respect to the
repayment thereof. At the election of any Lender, Borrower shall execute and deliver to
such Lender a note in a stated principal amount equal to such Lender’s Pro Rata Percentage
of the Loan, which such note or notes shall be on the same terms and conditions as provided
above and which note or notes shall be included within the definition of “Note” as such term
is used herein.

          (f) Notice of Advances.

(i) Upon receipt by Agent from Borrower of a written request for Advance in
accordance with Section 5 hereof and Borrower’s
satisfaction of the requirements set forth in Section 5 hereof, Agent shall give a written notice (a “Notice of
Borrowing”) to each Lender, (which Notice of Borrowing shall be given to
each Lender not less than two (2) business days prior to the date of the
proposed Advance), setting forth: (i) the total amount of the Advance
requested by Borrower; (ii) the aggregate amount of all Loans previously
made by each respective Lender; (iii) the outstanding principal balance of
the Loan; (iv) the current Interest Rate as determined in accordance with
Section 2.3 hereof; (v) each such Lender’s Pro Rata Percentage of the
requested Advance and (vi) the date on which such Advance is to be made; or

17

 

(ii) at its option, the Agent shall provide to each Lender: (A) each month
by the close of business on the fifth (5th) business day following receipt
by Agent from Borrower, but in no event later than the 30th day of the
month: (i) an updated borrowing base report (a “Borrowing Base
Report”) in the form attached as Exhibit B; and (ii) an updated trial
balance and aging report for the Pledged Notes Receivable (a “Collateral
Data Report”); and (B) by the close of business on the tenth (10th)
business day following receipt by Agent from Borrower of the Borrowing Base
Report and the Collateral Data Report: (i) a summary of all Advances made by
Agent during the immediately preceding month (a “Summary of Weekly
Advances”); and (ii) a summary report of Advances and repayments or
collections for the immediately preceding month and a calculation of the net
Lender’s Advance required of such Lender with respect to all Advances made
during the immediately preceding month (a “Lender Advance Report”).

          (g) Disbursement of Funds.

(i) If
notice of Advances is provided in accordance with Section 2.2(g)(i)
above, then after receiving a Notice of Borrowing from Agent, each Lender
shall, not later than 11:00 a.m., Eastern Standard Time, on the date
specified in such Notice of Borrowing on which the proposed Advance is to be
made, wire transfer to Agent at the Transfer Account, in immediately
available funds, an amount equal to each such Lender’s Pro Rata Percentage
of the proposed Advance as set forth in the Notice of Borrowing. Upon
Agent’s receipt of funds from each Lender equal to the amount of the
requested Advance, and subject to Borrower’s compliance with the terms and
conditions of this Agreement, Agent shall disburse the Advance to Borrower
by wire transfer of funds as directed in writing by Borrower. If Agent
shall not receive funds from any Lender as set forth above, then the amount
of the Advance in question shall be automatically reduced by an amount equal
to the missing Lender’s Pro Rata Percentage of the Advance in question, and
Agent shall, subject to Borrower’s compliance with the terms and conditions
of this Agreement, disburse the Advance in the reduced amount to Borrower by
wire transfer of funds as directed in writing by Borrower. Agent, in its
sole and absolute discretion, may (but shall not be obligated to) make the
full amount of the requested Advance available to Borrower prior to the
receipt by Agent from one or more Lenders of funds representing such
Lender’s or Lenders’ Pro Rata Percentage of the Advance in question. If the
funds representing such Lender’s or Lenders’ Pro Rata Percentage of the
Advance in question are not received by Agent within two business days of
the date of such Advance, Borrower shall immediately, upon demand of Agent,
repay such amount to Agent. Nothing herein shall be deemed to relieve any
Lender from its obligations hereunder or to prejudice any rights Agent may
have against any Lender as a result of any Lender’s failure to make any Loan
or Loans as provided herein; or

18

 

(ii) If notice of Advances is provided in accordance with Section
2.2(f)(ii)above, then by the close of business on the third (3rd) business
day following such Lender’s receipt of the Lender Advance Report, such
Lender shall wire transfer to Agent at the Transfer Account, in immediately
available funds, the net amount due from such Lender as set forth in the
Lender Advance Report. If the funds representing such Lender’s amount of
the Advance or Advances in question are not received by Agent within five
(5) business days of the date of such Lender’s receipt of the Lender Advance
Report, Borrower shall immediately, upon demand of Agent, repay such amount
to Agent. Nothing herein shall be deemed to relieve any Lender from its
obligations hereunder or to prejudice any rights Agent may have against any
Lender as a result of any Lender’s failure to make any Loan or Loans as
provided herein.

          2.3 Interest Rate. From and after the Effective Date, the aggregate principal amount
of all Advances, that are outstanding from time to time, shall bear interest at the Interest Rate.
Each Advance shall bear interest at the Interest Rate as of the date of Agent’s wiring of funds to
Borrower through the date of Agent’s receipt of repayment of the Loan (if received by Agent later
than 12 noon, Eastern Standard Time, then interest accrual shall be through the next Business Day
following such receipt). Interest will accrue daily, and shall be payable monthly in arrears.
Immediately upon the occurrence of an Event of Default and after the Final Maturity Date (if the
Loan is not paid in full on the Final Maturity Date), at Agent’s election in its sole discretion,
the Loan will bear interest at the Default Rate. Each Lender’s Loan shall bear interest at the
Interest Rate or the Default Rate as applicable as of the date funds are received by Agent as
provided in Section 2.2(g) through the date of Agent’s wiring of repayment funds to each Lender in
accordance with Sections 2.2(g) and 2.4(c).

          2.4 Payments. From and after the Effective Date, Borrower agrees punctually to pay or
cause to be paid to Agent, as agent for each Lender all principal and interest due under each Note
in respect of the Loans. Borrower shall make the following payments on the Loan:

          (a) Monthly Payments. Borrower shall direct or otherwise cause all makers of
all Pledged Notes Receivable to pay all monies due thereunder to the lockbox established
pursuant to the Lockbox Agreement, or as otherwise required by Agent. One hundred percent
(100%) of the cleared funds collected from the Pledged Notes Receivable each week will be
paid to Agent by the Lockbox Agent pursuant to the Lockbox Agreement, and will be applied by
Agent first to the payment of costs or expenses incurred by Agent pursuant to this Agreement
in creating, maintaining, protecting or enforcing the Liens in and to the Collateral and in
collecting any amounts due to any Lender in connection with the Loan (“Collection Costs”)
and the balance to each Lender in accordance with the applicable percentage of the
outstanding principal balance of the Loan that each Lender has made (the “Pro Rata
Payment Percentage”) as provided in Section 2.6 hereof. Each Lender shall apply each
such payment in the following order: (i) to any interest accrued at the applicable Default
Rate; (ii) then to interest accrued and payable at the Interest Rate; and (iii) then to
outstanding principal. In the event that the cleared funds received by Agent are
insufficient to pay the amounts described in aforementioned clauses (i)-(ii), then Borrower
shall pay the difference to

19

 

Agent on or before the fifth (5th) day of the following month. In the event Borrower
receives any payments on any of the Pledged Notes Receivable directly from or on behalf of
the maker or makers thereof, Borrower shall receive all such payments in trust for the sole
and exclusive benefit of Lenders; and Borrower shall deliver to the Lockbox Agent all such
payments (in the form so received by Borrower) as and when received by Borrower, unless
Agent shall have notified Borrower to deliver directly to Agent all payments in respect of
the Pledged Notes Receivable which may be received by Borrower, in which event all such
payments (in the form received) shall be endorsed by Borrower to Agent as agent for Lenders
and delivered to Agent promptly upon Borrower’s receipt thereof.

          (b) Final Payment. The entire outstanding principal amount of the Loan,
together with all other Obligations hereunder, shall be due and payable on the Final
Maturity Date.

          (c) Payments to Lender. Agent may at its sole and absolute discretion either:
(i) promptly upon receipt wire transfer to any Lender its Pro Rata Percentage of any payment
received from Borrower in accordance with this Section 2.4 or
Section 2.5; or (ii) include
any Lender’s Pro Rata Percentage of any payment received from Borrower in accordance with
this Section 2.4 or Section 2.5 in the Lender Advance
Report pursuant to Section 2.2(f)(ii),
for transfer to Lender pursuant to 2.2(g).

          2.5 Prepayments.

          (a) Voluntary Prepayments. Except for regular payments of interest and
principal as provided hereunder, prepayments, (i) shall not be permitted during the first
Loan Year, and (ii) may be made in whole, but not in part, upon five (5) days prior written
notice to the Agent at any time after the end of the first Loan Year upon payment of the
applicable Prepayment Premium (whether such prepayment results from voluntary payments by
Borrower, acceleration, or otherwise); provided, however, that (A) payments or prepayments
of Pledged Notes Receivable made by Purchasers who are not directly or indirectly solicited
by Borrower to make such prepayment shall not violate this
Section 2.5(a), and no Prepayment
Premium shall be payable as a result of any such payment by Purchasers; and (B) if at any
time the Borrower wishes to release any Pledged Notes Receivable for the purpose of
including those Pledged Notes Receivable in a Securitization pooling or similar conduit
transaction, and after 30 days’ prior written notice to Agent, Borrower may prepay the
principal balance of the Loan in whole or in part, to the extent necessary to cause the then
current outstanding unpaid principal balance of the Loan to be equal to or less than the
Borrowing Base, and no Prepayment Premium will be due where such prepayment is the result of
a Securitization closing, as certified by Borrower to Agent. If Borrower voluntarily
prepays the entire Receivables Loan for any reason other than pursuant to a Securitization,
such prepayment must be accompanied by full payment of the outstanding balance under the
Inventory Loan.

          (b) Mandatory Prepayments.

20

 

(i) Overadvances. If at any time the outstanding principal balance of the
Loan exceeds the Borrowing Base or the maximum aggregate Commitment,
Borrower shall, within five (5) Business Days after notice, either (A)
prepay the Loan in an amount necessary to reduce the outstanding principal
balance of the Loan to an amount within the lending limits set forth in
Section 2.2(c), or (B) pledge and deliver to
Lender such additional or replacement Eligible Notes Receivable such that
the remaining outstanding principal balance of the Loan is within the
lending limits set forth in Section 2.2(c).

(ii) Ineligible Pledged Notes Receivable. If at any time after the
expiration of the Revolving Loan Term, Agent determines that any Pledged
Notes Receivable which are included in the Borrowing Base, do not qualify as
Eligible Notes Receivable (“Ineligible Notes Receivable”), then Borrower
shall, within five (5) Business Days after notice, either (A) prepay the
Loan in an amount equal to the balance due under such Pledged Note
Receivable, or (B) replace the Ineligible Note Receivable with an Eligible
Note Receivable having an outstanding aggregate principal balance equal to
or in excess of the outstanding principal balance of such Ineligible Note
Receivable. The pledge and delivery to Agent as agent for Lenders of
additional Eligible Notes Receivable shall comply with the document delivery
and recordation requirements set forth in Section 5.1 of this Agreement.

(iii) No Prepayment Premium. No Prepayment Premium shall be due in
connection with any mandatory prepayment made in accordance with Sections
2.5(b)(i) or 2.5(b)(ii) above.

          (c)
Prepayment Premium. Except as specifically set forth in
Section 2.5(a),
above, any prepayment of the Loan pursuant to Section 2.5(a) above must be accompanied by a
prepayment premium (the “Prepayment Premium”) calculated, as of immediately prior to such
prepayment, as follows:

	 	 	 
	Date of Prepayment

	 	Premium
	 
	 	 
	During the second Loan Year;

	 	three percent (3%) of the then outstanding
balance of the Loan;
	 
	 	 
	During the third Loan Year;

	 	two percent (2%) of the then outstanding
balance of the Loan;
	 
	 	 
	During the fourth Loan Year

	 	one percent (1%) of the then outstanding
balance of the Loan;
	 
Thereafter

	 	 
Zero

21

 

          (d) Prepayment Premium upon Acceleration. If the Loan is accelerated based on
an Event of Default prior to the expiration of the first Loan Year, or if Borrower
undertakes a voluntary prepayment prior to expiration of the first Loan Year, at Agent’s
sole discretion, payments on the Loan must include the Prepayment Premium that would be
applicable if prepayment occurred in the second Loan Year.

          2.6 Pro Rata Treatment. Each repayment of principal and interest shall be allocated
among Lenders in accordance with their respective Pro Rata Payment Percentage. Each Lender agrees
that in computing such Lender’s portion of any Advance to be made hereunder, Agent may, in its
discretion, round each Lender’s such Advance to the next higher or lower whole dollar amount. If
any Lender shall, through the exercise of a right of banker’s lien, set-off, counterclaim or
otherwise, obtain payment with respect to its Loans which results in its receiving more than its
Pro Rata Payment Percentage of any payments described above, then (A) such Lender shall be deemed
to have simultaneously purchased from each of the other Lenders a share in such other Lender’s
Loans so that the amount of the Loans of all Lenders shall be pro rata as otherwise set forth
above, (B) such Lender shall immediately pay to the other Lenders their Pro Rata Payment Percentage
of the payments otherwise received as consideration for such purchase and (C) such other
adjustments shall be made from time to time as shall be equitable to insure that all Lenders share
such payments ratably. If all or any portion of any such excess payment is thereafter recovered
from Lender which received the same, the purchase provided in this Section 2.6 shall be deemed to
have been rescinded to the extent of such recovery, without interest. Borrower expressly consents
to the foregoing arrangements and agrees that each Lender so purchasing a portion of another
Lender’s loans may exercise all rights of payment (including all rights of set-off, banker’s lien
or counterclaim) with respect to such portion as fully as if such Lender were the direct holder of
such portion.

          2.7 Maximum Obligation of Textron Financial Corporation Under the Loan and the Inventory
Loan. Borrower acknowledges, agrees and confirms that notwithstanding anything to the contrary
herein, in any other Loan Document or in any document evidencing or securing the Inventory Loan,
TFC, as a Lender, shall not be obligated to fund any Advance hereunder, which when taken together
with the loans or advances made by TFC to Borrower under this Agreement and the Inventory Loan,
would cause the aggregate amount of such loans and advances by TFC to Borrower to exceed a maximum
aggregate amount of $71,000,000.00.

          2.8 Suspension of Advances.

          (a) Suspension of Sales. If any stay, order, cease and desist order,
injunction, temporary restraining order or similar judicial or nonjudicial sanction shall be
issued limiting or otherwise materially adversely affecting any Interval sales activities,
other business operations in respect of the Resorts, or the enforcement of the remedies of
Agent and Lenders hereunder, then, in such event, Agent and Lenders shall have no obligation
to make any Advances hereunder: (i) in respect of Pledged Notes Receivable from the sale of
Intervals which are the subject of any stay, order, cease and desist order, injunction,
temporary restraining order or similar judicial or nonjudicial sanction has been issued
until the stay, order, cease and desist order, injunction, temporary restraining
order or similar judicial or nonjudicial sanction has been lifted or released to the
satisfaction of Agent and (ii) in respect of Pledged Notes Receivable from the sale of

22

 

Intervals at any Resort if: (x) the stay, order, cease and desist order, injunction,
temporary restraining order or similar judicial or nonjudicial sanction in question has not
been lifted or released to the satisfaction of Agent within sixty (60) days of its issuance
and (y) there is a reduction in the total number of sales of Intervals by Borrower in any
Loan Year of more than twenty percent (20%) from the total number of sales of Intervals in
the immediately preceding Loan Year.

          (b) Change in Control. If there shall occur a change, singly or in the
aggregate, of more than fifty percent (50%) of the executive management of Borrower as
described in Schedule 2.10(b) hereto, Lender shall have no obligation to make any Advances
hereunder, unless within thirty (30) days prior thereto Borrower provides Agent with written
information setting forth the replacement executive management personnel of Borrower
together with a description of those Persons’ experience, ability and reputation, and Agent,
acting in good faith, determines that the replacement management personnel’s experience,
ability and reputation is equal to or greater than that of Borrower as set forth on Schedule
2.10(b). Agent shall have no obligation to make any Advances hereunder if more than two (2)
of the five (5) Board of Directors’ positions are controlled by the Borrower’s bond holders.

Section 3-Collateral

          3.1 Grant of Security Interest. To secure the payment and performance of the
Obligations, for value received, Borrower unconditionally and irrevocably assigns, pledges and
grants to Agent, as agent for each Lender:

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

          (b) a second priority security interest in all collateral under the Inventory Loan,
subject only to the security interest securing the Inventory Loan;

          (c) a subordinate security interest in the Silverleaf Finance II Stock and the
Silverleaf Finance II Subordinated Note of equal priority with the security interest
securing the Existing Inventory Loan; and

          (d) a first or second priority security interest as applicable in all books, records,
reports, computer tapes, disks and software relating to the Collateral and all extensions,
additions, improvements, betterments, renewals, substitutions and replacements of, for or to
any of the Collateral, wherever located, together with the products, proceeds, issues, rents
and profits thereof, and any replacements, additions or accessions thereto or substitutions
thereof.

          To further secure the payment and performance of the Obligations, Borrower shall also execute
and deliver to Agent, as agent for each Lender, the modifications to the Inventory
Mortgages granting Agent, as agent for each Lender, first priority mortgage liens on the
Intervals.

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          For convenience of administration, Agent is acting as agent for Lenders under the Agreement.
Agent, as such agent, may execute any of its duties hereunder by or through its agents, officers or
employees and shall be entitled to rely upon the advice of counsel as to its duties. Agent, as
such agent, shall not be liable to Lenders for any action taken or omitted to be taken by it in
good faith and shall neither be responsible to Lenders for the consequences of any oversight or
error of judgment nor be answerable to Lenders for any loss unless the same shall happen through
Agent’s gross negligence or willful misconduct. To the extent that Agent, as such agent, shall not
be reimbursed by Borrower for any costs, liabilities or expenses incurred in such capacity, Lenders
shall reimburse Agent therefor pro rata in accordance with their respective Pro Rata Percentages
(including Agent as one of Lenders for this purpose). Each Lender agrees that Agent shall be
entitled to take and shall only be required to take, any action which it is permitted to take under
this Agreement.

          3.2 Financing Statements. Borrower agrees, at its own expense, to execute the
financing statements, continuation statements and amendments provided for by the Code together with
any and all other instruments or documents and take such other action as may be required to perfect
and to continue the perfection of Agent’s security interests in the Collateral. Borrower hereby
authorizes Agent to execute and/or file on Borrower’s behalf any such financing statements,
continuation statements and amendments.

          3.3 Priority of Each Lender’s Liens. Each Lender shall have an equal security
interest in the Collateral based upon its Pro Rata Percentage and no Lender’s security interest in
the Collateral shall have priority over any other Lender’s security interest in the Collateral,
except where TFC, as a secured party pursuant to another security agreement may have a security
interest in the Collateral, which is distinct from Agent’s security interest in the Collateral as a
Lender under this Agreement.

          3.4 Insurance. Insurance coverage with respect to the Resort(s) is provided by the
Silverleaf Club. Borrower shall furnish Agent, upon request, with satisfactory evidence that the
Units, Buildings and Resorts are adequately insured. Such insurance coverage shall insure against
such risks, be in such amounts, with such companies and on such other terms as Agent may reasonably
require. Each such policy shall name Agent as an additional insured and loss payee as agent for
Lenders, as their respective interests may appear.

          3.5 Protection of Collateral; Reimbursement. The portion of the Collateral consisting
of: (i) the original Pledged Notes Receivable, (ii) the original Mortgages, (iii) the original
purchase contracts (including addendum) related to such Pledged Notes Receivable and Mortgages, and
(iv) originals or true copies of the related truth-in-lending disclosure, loan application,
warranty deed, and if required by Agent, the related Purchaser’s acknowledgement receipt and the
Exchange Company application and disclosures, shall be delivered at Borrower’s expense to the
Custodian, and held in Custodian’s possession and control pursuant to the Custodial Agreement. All
fees and costs arising under the Custodial Agreement shall be borne and paid by Borrower; and if
Borrower fails to promptly pay any portion thereof when due, Agent may, at its option, but shall
not be required to, pay the same and charge Borrower’s account therefor, and Borrower agrees promptly to reimburse Agent therefor with interest
accruing thereon daily at the Default Rate. All sums so paid or incurred by Agent for any of the
foregoing and any and all other sums for which Borrower may become liable hereunder and all

24

 

costs and expenses (including attorneys’ and paralegals’ fees, legal expenses and court costs) which
Agent may incur in enforcing or protecting its Lien on, or rights and interest in, the Collateral
or any of its rights or remedies under this Agreement or any other Loan Document or with respect to
any of the transactions hereunder or thereunder, until paid by Borrower to Agent with interest at
the Default Rate, shall be included among the Obligations, and, as such, shall be secured by all of
the Collateral. Agent shall not be liable or responsible in any way for the safekeeping of any of
the Collateral or for any loss or damage thereto or for any diminution in the value thereof, or for
any act or default of the Custodian, Lockbox Agent, or Servicing Agent or any warehouseman,
carrier, forwarding agency, or other Person whomsoever.

          3.6 Additional Eligible Resorts. From time to time during the Term, Borrower may
propose to Agent that one or more additional time-share plans and projects owned and operated by
Borrower be included among the Eligible Resorts in respect of which Advances may be made. Any such
proposal will be in writing, and will be accompanied or supported by the due diligence and
supporting Borrower, Affiliate, project, financial and related information identified in Section
4.4 hereto, and such other information as Agent may require. Borrower will reasonably cooperate
with Agent’s underwriting and due diligence, and Borrower will be responsible for payment upon
billing for Agent’s out-of-pocket expenses in connection therewith. Subject to Agent’s
underwriting and due diligence review, including satisfaction of the conditions in Section 4 and
Section 5 hereof as they relate to such additional time-share resorts,
Agent may, but shall not be required to, approve one or more such additional time-share resorts,
including future phases or condominiums in an Existing Eligible Resort, as an Eligible Resort
qualifying for Advances under and subject to the terms of this Agreement and the other Loan
Documents.

          Subject in each instance to Agent’s underwriting and due diligence review, and Agent’s prior
written approval, any project as may be approved by Agent and Lenders after the Closing Date, if
any, is hereinafter referred to as an “Additional Eligible Resort”. Any Advances hereunder with
respect to any Additional Eligible Resort will be subject to all terms and conditions of this
Agreement and the other Loan Documents.

          3.7 Modification of Eligible Notes Receivable. Notwithstanding anything herein to the
contrary, Borrower shall have the right to modify the interest rate and term only of the Eligible
Notes Receivable without Agent’s prior consent, provided that: (i) any such change in the rate of
interest on any one or more Eligible Notes Receivable shall not reduce the average interest rate on
all Eligible Notes Receivable to less than twelve and one half percent (12 1/2%) per annum at any
time; (ii) the term of no Eligible Notes Receivable shall be increased to a term longer than one
hundred twenty (120) months from the date of the first required monthly payment of such Eligible
Note Receivable, except that with respect to any Eligible Note Receivable in respect of which one
or more monthly payments have been deferred, the term of such Eligible Note Receivable may be
extended one month for each such deferred payment provided, however, that in no event shall the
term of such Eligible Note Receivable be increased to a term longer than one hundred twenty eight
(128) months from the date of the first required monthly payment of such Eligible Note Receivable;
(iii) at no time may Borrower so modify the terms of Eligible Notes Receivable constituting more than fifteen percent (15%) of the
outstanding principal balance of all Eligible Notes Receivable at any time. 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

25

 

a ten percent (10%) down payment on the 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.

          3.8 Assumption of Obligations under Eligible Notes Receivable. 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 original sales price of the Interval in
question, which down payment shall be in addition to the cash down payment made by the original
obligor.

          3.9 Purchaser/Criteria. All Eligible Notes Receivable pledged as Collateral to Agent
subsequent to the Effective Date will be underwritten in a manner consistent with the Borrower’s
general underwriting criteria, as approved in writing by Agent, including, without limitation: (i)
the requirement that a majority of sales shall be made to Purchasers with minimum annual income as
follows: $35,000 for purchasers residing in the state of Texas, $40,000 for purchasers residing in
the state of Illinois, and $45,000 for purchasers residing in the state of Massachusetts, (ii) the
requirement for a cash down payment of at least 15% of the sales price of the Interval for any
Purchaser with a FICO score less than 600, and (iii) the requirement that the weighted average FICO
Credit Bureau Scores of all Purchasers with respect to which a FICO score can be obtained be not
less than 640, provided that the aggregate outstanding principal balance of Eligible Notes
Receivable pledged to Agent with respect to which a FICO score can not be obtained, does not exceed
ten percent (10%) of the aggregate outstanding principal amount of all Eligible Notes Receivable
pledged to Agent. Borrower shall not materially alter its general underwriting criteria without
the prior written approval of Agent, which approval, Agent may withhold in its sole discretion. On
a semi-annual basis, Borrower shall provide Agent with written certification that the underwriting
criteria as approved by Agent remain in full force and effect and have not been revised or altered
without Agent’s consent.

          3.10 Cross Collateralization. The Collateral also secures the Obligations of Borrower
under the Inventory Loan. Upon repayment of this Loan and the satisfaction by Borrower of all of
the Obligations under this Loan, the Collateral shall continue to secure the Inventory Loan as
provided in the documents evidencing and securing the Inventory Loan.

Section 4-Conditions Precedent To The Closing

          4.1 Conditions Precedent. The obligation of Agent and Lenders under this Agreement
and the obligation to fund any Advance, including the initial Advance, hereunder shall be subject
to the satisfaction of each of the following conditions precedent, in addition to all of the
conditions precedent set forth elsewhere in the Loan Documents:

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          (a) Representations, Warranties, Covenants and Agreements. The representations
and warranties contained in the Loan Documents are and shall be true and correct in all
respects, and all covenants and agreements have been complied with and are correct in all
respects, and all covenants and agreements to have been complied with and performed by
Borrower shall have been fully complied with and performed to the satisfaction of Agent.

          (b) No Prohibited Acts. Borrower shall not have taken any action or permitted
any condition to exist which would have been prohibited by any provision of this Agreement
or the Loan Documents.

          (c) No Changes. That all information and documents heretofore delivered by
Borrower to Agent with respect to Borrower or the Existing Resorts, including information
and documents delivered in connection with the Original Loan and the Inventory Loan, remain
true and correct in all respects.

          (d) Approval of Documents Prior to Effective Date. Borrower has delivered to
Agent (with copies to Agent’s counsel), and Agent has reviewed and approved the form and
content of all of the items specified in Subsection 4.1(d)(i) through
4.1(d)(v) below (the
“Submissions”). Agent shall have the right to review and approve any changes to the form of
any of the Submissions. If Agent disapproves of any changes to any of the Submissions,
Agent shall have the right to require Borrower either to cure or correct the defect objected
to by Agent or to elect not to fund the Loan or any Advance. Under no circumstances shall
Agent’s failure to approve or disapprove a change to any of the Submissions be deemed to be
an approval of such Submissions. All of the Submissions were and shall be prepared at
Borrower’s sole cost and expense, unless expressly stated to be an obligation and expense of
Agent. Agent shall have the right of prior approval of any Person responsible for preparing
a Submission (“Preparer”) and may disapprove any Preparer in its sole discretion, for any
reason, including without limitation, that Agent believes that the experience, skill,
reputation or other aspect of the Preparer is unsatisfactory in any respect. All
Submissions required pursuant to this Agreement shall be addressed to Agent and include the
following language: “THE UNDERSIGNED ACKNOWLEDGES THAT TEXTRON FINANCIAL CORPORATION AS
AGENT FOR EACH LENDER IS RELYING ON THE WITHIN INFORMATION IN CONNECTION WITH ITS
DETERMINATION TO MAKE A LOAN TO SILVERLEAF RESORTS, INC. IN CONNECTION WITH THE SUBJECT
COLLATERAL.”

(i) A certificate to be dated as of the Effective Date and signed by the
president, vice president, or secretary of Borrower, certifying that the
conditions specified in Sections 4.1(a), 4.1(b) and 4.1(c) above are true;

(ii) Copies of any amendments to the articles of incorporation of Borrower
not previously delivered to Agent, certified to be true and complete by
Borrower and the Secretary of State of the State of Texas and a current
certificate of good standing for Borrower, and copies of any amendments to
the by-laws of Borrower not previously delivered to

27

 

Agent, certified to be true, correct and complete by the secretary or assistant secretary of Borrower;

(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 this Agreement, the Notes, and the other Loan
Documents, to borrow the Loan from Lenders, and to grant to Lenders a first
priority security interest in and to the Collateral;

(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 the Agreement, the
Notes and the other Loan Documents; and

(v) Copies or other evidence of all loans to Borrower from any officers,
shareholders, or Affiliates of Borrower not previously delivered to Agent.

          (e) Execution and Delivery of Loan Documents. Borrower shall have delivered to
Agent, on or before the Effective Date, the following Loan Documents, each of which when
required, shall be in recordable form:

(i) This Agreement;

(ii) Closing Opinions for Borrower;

(iii) Consolidated Amended and Restated Note;

(iv) Environmental Indemnification Agreement;

(v) Modification to Interval Mortgages. Borrower shall have
executed and delivered to Agent, on or before the Effective Date,
modifications to the Interval Mortgages, each of which shall be in
recordable form;

(vi) Intercreditor Agreement. Borrower, Sovereign, CapitalSource,
and Resort Funding shall have executed and delivered to Agent, on or before
the Effective Date, the intercreditor agreement; and

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

          (f) Effective Date Conditions. On or before the Effective Date, the following
conditions shall be satisfied:

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(i) Assignment of Co-lenders’ Interests. Agent shall have obtained
from each Co-Lender: (1) an assignment of all right, title and interest of
each Co-Lender in and to the Loans and Collateral under the Original Loan
Agreement; and (2) an endorsement by each Co-Lender of such Co-Lender’s note
or notes under the Original Loan Agreement.

(ii) Outstanding Balance. The Lenders’ maximum aggregate Commitment
as set forth on Exhibit A hereto shall be greater than the then outstanding
balance under the Original Loan Agreement.

(iii) UCC Search. Agent shall have obtained, at Borrower’s cost,
such searches of the applicable public records as it deems necessary under
Texas, and other applicable law to verify that it has a first or second, as
applicable, and prior perfected Lien and security interest covering all of
the Collateral. Agent shall not be obligated to fund any Advance if Agent
determines that Lenders do not have a first or second, as applicable, and
prior perfected lien and security interest covering any portion of the
Collateral, except as expressly provided herein.

(iv) Litigation Search. Agent shall have obtained, at Borrower’s
cost, an independent search to verify that there are no bankruptcy,
foreclosure actions or other material litigation or judgments pending or
outstanding against the Resorts, any portion of the Collateral, Borrower, or
any Affiliates of Borrower (each a “Material Party”). The term “other
material litigation” as used herein shall not include matters in which (i) a
Material Party is plaintiff and no counterclaim is pending or (ii) which
Agent determines in its sole discretion exercised in good faith, are
immaterial due to settlement, insurance coverage, frivolity, or amount or
nature of claim. Lenders shall not be obligated to fund any Advance if
Agent determines that any such litigation is pending.

(v) Counsel Opinion Regarding Title Insurance Policies. Borrower
shall deliver to Agent, an opinion or opinions of counsel in a form
acceptable to Agent in Agent’s sole discretion, confirming that: (1) each
Lien on the Encumbered Intervals from the Resorts in Texas, including: (i)
Holly Lake Ranch, Hawkins, Texas; (ii) Piney Shores Resort, Conroe, Texas;
(iii) Lake O’ The Woods, Flint, Texas; (iv) Hill Country Resort, Canyon
Lake, Texas; (v) The Villages, Flint, Texas; and (vi) Silverleaf’s
Seaside Resort, Galveston County, that is perfected by an Inventory
Mortgage, will retain the priority interest afforded by the original
recording of that Inventory Mortgage notwithstanding the recording of the
modification to the Inventory Mortgage required under Section 3.1 hereof;
and (2) the modification of the Inventory Mortgages as provided herein will
not impair the coverage afforded by the mortgagee’s title insurance policies
previously issued in connection with the execution and recordation of the
Inventory Mortgages, and those policies remain in full force and effect.

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(vi) Recording of Modifications to Inventory Mortgages. The
modifications to the Inventory Mortgages for the Resorts in Texas,
including: (i) Holly Lake Ranch, Hawkins, Texas; (ii) Piney Shores Resort,
Conroe, Texas; (iii) Lake O’ The Woods, Flint, Texas; (iv) Hill Country
Resort, Canyon Lake, Texas; (v) The Villages, Flint, Texas; and (vi)
Silverleaf’s Seaside Resort, Galveston County, shall have been duly recorded
in the applicable land records.

(vii) Insurance. Evidence that Borrower is maintaining all policies
of insurance required by and in accordance with Section 7.1(d) hereof, including copies of the most current paid
insurance premium invoices;

(viii) Governmental Permits. To the extent not previously delivered
to Agent, copies of all applicable government permits, approvals, consents,
licenses and certificates with respect to the use and operation of the
Resorts;

(ix) Taxes. Evidence satisfactory to Agent that all taxes and
assessments owed by or for which Borrower is responsible for collection had
been paid with respect to the Resorts and the Collateral, including but not
limited to sales taxes, room occupancy taxes, payroll taxes, personal
property taxes, excise taxes, intangible taxes, real property taxes and any
assessments related to the resorts or the Collateral. Copies of the most
current tax bills for the Resorts shall be provided to Agent;

          (g) Post Closing Obligations.

(i) Title Insurance Policies. Within 90 days after the Closing Date
the Borrower shall deliver to Agent, with respect to each parcel of real
property comprising the Inventory from the Resorts in Missouri, Illinois and
Georgia, including: (i) Ozark Mountain Resort, Kimberling City, Missouri;
(ii) Holiday Hills Resort, Branson, Missouri; (iii) Timber Creek Resort,
Jefferson County, Missouri; (iv) Fox River Resort, LaSalle County, Illinois;
and (v) Apple Mountain Resort, Habersham County, Georgia; a new mortgagee’s
title insurance policy (the “Inventory Title Policy” or an endorsement to
the existing mortgagee’s title insurance policy updating each applicable policy previously issued with respect to the
Inventory through the date that the modifications required under Section
4.1(g)(ii) hereof are duly recorded in the applicable land records for each
state in which the Inventory is located (the “Inventory Title Endorsement”).
If an Inventory Title Policy is obtained, each such Inventory Title Policy
shall: (i) be in an amount equal to the full amount required for such title
insurance under the Inventory Loan; (ii) insure the Inventory Mortgages as
modified in accordance with Section 3.1 hereof; and (iii) be issued by
companies and in form and substance satisfactory to Agent in its sole
discretion. If an Inventory Title Endorsement is obtained, each such
Inventory Title Endorsement shall: (i) insure that the

30

 

modification of the Inventory Mortgages as provided herein will not impair the coverage afforded
by endorsed title insurance policies, and that those policies remain in full
force and effect; (ii) insure that the modification of the Inventory
Mortgages as provided herein will not impair the lien of the insured
mortgage; and (iii) be issued by companies and in form and substance
satisfactory to Agent in its sole discretion. Borrower shall be responsible
for the payment of all costs and expenses of the foregoing Inventory Title
Policy and/or Endorsement.

(ii) Recording of Modifications to Inventory Mortgages. Within 90
days after the Closing Date the modifications to the Inventory Mortgages for
the Resorts in Missouri, Illinois and Georgia, including: (i) Ozark Mountain
Resort, Kimberling City, Missouri; (ii) Holiday Hills Resort, Branson,
Missouri; (iii) Timber Creek Resort, Jefferson County, Missouri; (iv) Fox
River Resort, LaSalle County, Illinois; and (v) Apple Mountain Resort,
Habersham County, Georgia; shall be duly recorded in the applicable land
records for each state in which the Inventory is located.

          4.2 Expenses. Borrower shall have paid all fees and expenses required to be paid
pursuant to this Agreement. Lenders shall have no obligation to fund any Loan or make the initial
Advance or any subsequent Advance unless the amount of the initial Advance together with any moneys
paid by Borrower is sufficient to satisfy all fees and expenses required to be paid pursuant to
this Agreement.

          4.3 Proceedings Satisfactory. Borrower shall execute all of the Loan Documents
approved by Agent on the Effective Date, and all actions taken in connection with the execution or
delivery of the Loan Documents, and all documents and papers relating thereto, shall be
satisfactory to Agent and its counsel. Agent and its counsel shall have received copies of such
documents and papers as Agent or such counsel may reasonably request in connection therewith, all
in form and substance satisfactory to Agent and its counsel.

          4.4 Conditions Precedent to Funding of Advances with Respect to Additional Eligible
Resorts. As provided in Section 3.6 hereof, Borrower may propose to Agent that Agent approve
one or more additional timeshare plans for inclusion hereunder as an Additional Eligible Resort in
respect of which Advances may be made. The obligation of Lenders to fund any Advances with respect
to an Additional Eligible Resort shall be subject to the satisfaction of each
of the following conditions precedent, in addition to all of the conditions precedent set
forth elsewhere in the Loan Documents:

          (a) Representations, Warranties, Covenants and Agreements. The representations
and warranties contained in the Loan Documents are and shall be true and correct in all
respects, and all covenants and agreements have been complied with and shall be correct in
all respects, and all covenants and agreements to have been complied with and performed by
Borrower shall have been fully complied with and performed to the satisfaction of Agent.

31

 

          (b) No Prohibited Acts. Borrower shall not have taken any action or permitted
any condition to exist which would have been prohibited by any provision of the Loan
Documents.

          (c) Approval of Documents Prior to Advance. Borrower has delivered or caused
to be delivered to Agent (with copies to Agent’s counsel), at least fifteen (15) Business
Days prior to the date of each Advance, and Agent has reviewed and approved, at least five
(5) Business Days prior to the date of each Advance, the form and content of all of the
items specified in each of the Submissions required pursuant to this Section 4.4. Agent
shall have the right to review and approve any changes to the form of any of the
Submissions. If Agent disapproves of any changes to any of the Submissions, Agent shall
have the right to require Borrower either to cure or correct the defect objected to by Agent
or to elect on behalf of Lenders not to fund the Loan or any Advance. Under no
circumstances shall Agent’s failure to approve or disapprove a change to any of the
Submissions be deemed to be an approval of such Submissions. All of the Submissions were
and shall be prepared at Borrower’s sole cost and expense, unless expressly stated to be an
obligation and expense of Agent. Agent shall have the right of prior approval of any
Preparer and may disapprove any Preparer in its sole discretion, for any reason, including
without limitation, that Agent believes that the experience, skill, reputation or other
aspect of the Preparer is unsatisfactory in any respect. All Submissions required pursuant
to this Agreement shall be addressed to Agent and include the following language: “THE
UNDERSIGNED ACKNOWLEDGES THAT TEXTRON FINANCIAL CORPORATION AS AGENT FOR EACH LENDER IS
RELYING ON THE WITHIN INFORMATION IN CONNECTION WITH ITS DETERMINATION TO MAKE A LOAN TO
SILVERLEAF RESORTS, INC. IN CONNECTION WITH THE SUBJECT COLLATERAL.”

(i) a certificate in the form attached as Exhibit C, to be dated as of the
date of each such Advance and signed by the president, vice president, or
secretary of Borrower, certifying that the conditions specified in Sections
4.4(a) and 4.4(b) above are true;

(ii) copies of the articles of incorporation of Borrower, together with any
amendments thereto certified to be true and complete by Borrower and the
Secretary of State of the State of Texas, a current certificate of good
standing for Borrower issued by the Secretary of State of the State of
Texas, a current certificate of authority to conduct business issued by the
secretary of state in each state in which Borrower conducts business, and
copies of the by-laws of Borrower certified to be true, correct and complete
by the secretary or assistant secretary of Borrower;

(iii) a Survey for each Additional Eligible Resort for which Eligible Notes
Receivable are being pledged to Agent in connection with the Advance in
question;

(iv) a certificate of the secretary or assistant secretary of Borrower
certifying the adoption by the board of directors thereof, respectively, of
a

32

 

resolution authorizing the addition of the Resort in question as an
Additional Eligible Resort and to authorize Borrower to enter into, execute
and deliver any Documents in connection therewith;

(v) 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 all documents
required in connection with such Additional Eligible Resort as required
pursuant to this Section 4.4;

(vi) an inspection report or reports covering each Additional Eligible
Resort for which Eligible Notes Receivable are being pledged to Agent in
connection with the Advance in question, including without limitation all
real property and personal property subject to the Declaration and all
adjacent property, confirming:

(1) the absence of Hazardous Materials on the personal property and
real property comprising each such Additional Eligible Resort;

(2) that the inspection firm has obtained, reviewed and included
within its report a CERCLIS printout from the Environmental
Protection Agency (the “EPA”), statements from the EPA and other
applicable state and local authorities and a Phase I Environmental
Audit, all of which information shall confirm that there are no known
or suspected Hazardous Materials located at, used or stored on, or
transported to or from each such Additional Eligible Resort or in
such proximity thereto as to create a material risk of contamination
of each such Additional Eligible Resort;

(vii) evidence that Borrower is maintaining all policies of insurance
required by and in accordance with Section 7.1(d) hereof, including copies of the most current paid insurance premium
invoices;

(viii) evidence that Borrower and the Timeshare Documents for each
Additional Eligible Resort for which Eligible Notes Receivable are being
pledged to Agent as agent for Lenders in connection with the Advance in
question are in compliance with all applicable laws in connection with its
sales of Intervals, including without limitation, the Timeshare Acts;

(ix) a current preliminary title report or certificate of title for each
Additional Eligible Resort for which Eligible Notes Receivable are being
pledged to Agent in connection with the Advance in question, with copies of
all title exceptions;

(x) copies of all applicable governmental permits, approvals, consents,
licenses, and certificates for the establishment of each Additional Eligible

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Resort for which Eligible Notes Receivable are being pledged to Agent as
agent for Lenders in connection with the Advance in question as timeshare
projects in accordance with the applicable Timeshare Act, and for the
occupancy and intended use and operation of each such Additional Eligible
Resort, including the Units, including a letter certification from Borrower
regarding zoning classification and compliance, letters or other
satisfactory evidence from utility companies, governmental entities or other
persons confirming that water, sewer (sanitary and storm), electricity,
solid waste disposal, telephone, police, fire and rescue services are being
provided to each Resort, and any business licenses necessary for operation
of each such Additional Eligible Resort;

(xi) certified true, correct and complete copies of all of the Timeshare
Documents for each Additional Eligible Resort for which Eligible Notes
Receivable are being pledged to Agent as agent for Lenders in connection
with the Advance in question;

(xii) evidence satisfactory to Agent that all taxes and assessments owed by
or for which Borrower is responsible for collection have been paid,
including but not limited to sales taxes, room occupancy taxes, payroll
taxes, personal property taxes, excise taxes, intangibles taxes, real
property taxes, and income taxes, and any assessments related to each
Additional Eligible Resort for which Eligible Notes Receivable are being
pledged to Agent as agent for Lenders in connection with the Advance in
question and copies of the most current paid tax bills for each such
Additional Eligible Resort evidencing that each such Additional Eligible
Resort have been segregated from all other property on the applicable
municipal taxrolls;

(xiii) written confirmation from an architect covering each Additional
Eligible Resort, for which Eligible Notes Receivable are being pledged to
Agent as agent for Lenders in connection with the Advance in question as to
the physical condition of the improvements at each such Additional Eligible
Resort, including that soil conditions are sufficient to support all
existing and any contemplated improvements to the real property; which
written confirmation shall be in form and substance reasonably acceptable to
Agent;

(xiv) such credit references on Borrower as Agent deems necessary in its
sole discretion;

(xv) copies or other evidence of all loans to Borrower from any officers,
shareholders, or Affiliates of Borrower, if any;

(xvi) a commitment to issue Mortgagee Title Policies from Title Company for
each such Additional Eligible Resort. Notwithstanding anything heretofore
to the contrary, Agent and each Lender agree that

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Borrower shall not be required to provide such a commitment or a Mortgagee Title Insurance Policy
with respect to Oak N’ Spruce Resort until such time as deeded Intervals are
permitted under local law governing the Oak N’ Spruce Resort.
Notwithstanding anything heretofore to the contrary, if any claim, lien,
encumbrance, charge or other matter arises with respect to any Interval or
Intervals for which an Eligible Note Receivable has been pledged to Agent as
agent for Lenders pursuant to this Agreement, then, in such event:

(a) The Note Receivable with respect to the Interval in question
shall cease to be an Eligible Note Receivable and Borrower
immediately shall either replace the Note Receivable in question or
make a Mandatory Prepayment as provided in Section 2.5(b) hereof; and

(b) The Resort at which the Interval in question is located shall
cease to be an Additional Eligible Resort, unless and until Borrower
shall cure any such claim, lien, encumbrance, charge or other matter
to the satisfaction of Agent. Furthermore, any and all further
requests for Advances in respect of such Resort must be accompanied
by satisfactory Mortgagee Title Policies for all Intervals with
respect to which such Advances are requested.

(xvii) the Financial Statements;

(xviii) to the extent not previously delivered hereunder or in connection
with the Inventory Loan, Borrower will execute, or cause to be executed with
respect to each Additional Eligible Resort, an Assignment of Notes
Receivable and Mortgages, Borrower’s Affidavit with Respect to the
Additional Eligible Resorts and an Environmental Indemnification Agreement;

(xix) with respect to any improvements, including any Units, constructed at
a Resort within the twenty-four month period prior to any Advance with
respect to an Additional Eligible Resort, Borrower shall
also deliver to Agent, for its approval, such documents and instruments as
Agent may reasonably request in connection with such newly constructed
improvements, including, without limitation, copies of building permits,
plans and specifications, construction and architectural contracts, title
insurance insuring over, among other things, mechanics liens, certificates
of occupancy and satisfactory evidence of the completion of such
improvements;

(xx) such other documents, instruments, agreements, tests, reports and
inspections as Agent may require with respect to Borrower or any applicable
Affiliate, the Loan or any Resort, including any Additional Eligible Resort;
and

35

 

(xxi) Upon request of Agent, Borrower shall deliver to Agent evidence,
satisfactory to Agent, that there is no material litigation, written
complaint, suit, action, written claim or written charge pending against
Borrower or any Affiliate with any court or with any governmental authority
with respect to the Resorts, the Timeshare Documents, any Eligible Notes
Receivable, any Interval, or any marketing, offer or sale of any Interval.

          (d) Physical Inspection. Agent shall be satisfied with its physical inspection
of the Additional Eligible Resorts.

          (e) UCC Search. Agent shall have obtained, at Borrower’s cost, such searches
of the applicable public records as it deems necessary under all applicable law to verify
that it has a first or second, as applicable, and prior perfected Lien and security interest
covering all of the Collateral. Agent shall not be obligated to fund any Advance if Agent
determines that Lenders do not have a first or second, as applicable, and prior perfected
lien and security interest covering any portion of the Collateral, except as expressly
provided herein.

          (f) Litigation Search. Agent shall have obtained, at Borrower’s cost, an
independent search to verify that there are no bankruptcy, foreclosure actions or other
material litigation or judgments pending or outstanding against the Additional Eligible
Resorts, any portion of the Collateral, Borrower, or any Affiliate, (each a “Material
Party”). The term “other material litigation” as used herein shall not include matters in
which (i) a Material Party is plaintiff and no counterclaim is pending or (ii) which Agent
determines, in its sole discretion, exercised in good faith, are immaterial due to
settlement, insurance coverage, frivolity, or amount or nature of claim. Agent shall not be
obligated to fund any Advance if it determines that any such litigation is pending.

          (g) Opinions of Borrower’s Counsel. Borrower shall deliver to Agent, for the
benefit of Agent and each Lender, at Borrower’s sole cost and expense, such opinions of
counsel, including counsel admitted in each state in which each Additional Eligible Resort
is located, as to such matters with respect to Borrower and each Additional Eligible Resort
as Agent may request, and in form and substance acceptable to Agent in its sole discretion.

          (h) Funding Procedure. Borrower shall have complied to Agent’s satisfaction
with each of the conditions precedent to funding of an Advance set forth in Section 5 hereof.

          (i) Management of Resort. Borrower shall provide evidence satisfactory to
Agent 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 Agent,
which with respect to all Resorts shall have a term of at least three years..

          (j) Other Items. Such other agreements, documents, instruments, certificates
and materials as Agent may request to determine the acceptability of any such

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Additional Eligible Resort, to evidence the Obligations, to evidence and perfect the
rights and Liens and security interests of Agent contemplated by the Loan Documents, and to
effectuate the transactions contemplated herein, including, without limitation, true copies
of all Resort Documents for each such Additional Eligible Resort, all Timeshare Documents
and operating and management contracts and agreements, evidence of compliance with the
applicable Timeshare Act and other applicable laws, evidence of all required governmental
licenses and permits; title searches; title commitments or policies, including complete and
legible copies of each title exception, engineering, environmental and soil reports and
evidence of compliance with all applicable zoning and building codes; each of which shall be
satisfactory to Agent in its sole and absolute discretion.

Section 5-Funding Procedure

     5.1 The obligation of any Lender to make any loan shall be subject to the satisfaction of all
of the following conditions precedent:

          (a) Requests for Advances. Each request for an Advance shall:

(i) be in writing in form attached hereto as Exhibit C and shall certify the
amount of the then-current Borrowing Base and specify the principal amount
of the Advance requested and designate the account to which the proceeds of
such Advance are to be transferred;

(ii) state that the representations and warranties of Borrower contained in
the Agreement and any closing or funding related certifications are true and
correct as of the date of the request and, after giving effect to the making
of such requested Advance, will be true and correct as of the date on which
the requested Advance is to be made;

(iii) state that no Default or Event of Default exists as of the date of the
request and, after giving effect to the making of such requested Advance, no
Default or Event of Default would exist as of the date on which the
requested Advance is to be made;

(iv) be delivered to the office of Agent at least five (5) Business Days
prior to the date of the requested Advance;

(v) be signed by a principal financial officer of Borrower;

(vi) certify that Borrower has no knowledge of any asserted or threatened
defense, offset, counterclaim, discount or allowance in respect of each Note
Receivable to be pledged in connection with such requested Advance, or in
respect of any of the Pledged Notes Receivable;

(vii) contain an aging report of the Pledged Notes Receivable; identifying,
among other things, which among them are Eligible Notes Receivable; and

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(viii) contain a delinquency report which shall be in form and substance
satisfactory to Agent and shall show which of such Notes Receivable is
delinquent and the duration of such delinquency, and which of such Pledged
Notes Receivable is not an Eligible Note Receivable;

          (b) Loan Documents/Collateral. Not less than five (5) Business Days prior to
the date of any Advance, Borrower shall have:

(i) delivered to Agent a list of all Eligible Notes Receivable and related
Mortgages which are to be the subject of such requested Advance, indicating
the unpaid principal balance owing on each of the Pledged Notes Receivable
deemed to be an Eligible Note Receivable, together with such additional
information as Agent may require;

(ii) delivered to Agent (or, if Agent shall so instruct, a designee
appointed by Agent in writing) (A) the original of each Pledged Note
Receivable (duly endorsed with the words “Pay to the order of Textron
Financial Corporation as Agent with recourse”), (B) the original of each
Mortgage securing such Pledged Notes Receivable, (C) the original of each
purchase contract (including addenda) relating to the Pledged Notes
Receivable and Mortgages, (D) originals or true copies of the related
truth-in-lending disclosures, loan application, warranty deed, Payment
Authorization Agreement and, if required by Agent, the related Purchaser’s
acknowledgement, receipt and exchange company application, disclosures and
materials, and (E) with respect to each Eligible Note Receivable from the
sale of Intervals at Oak N’ Spruce: (i) the original UCC-1 Financing
Statement, naming the Purchaser of the Interval giving rise to the Eligible
Note Receivable as debtor and Borrower as secured party (the “Purchaser
Financing Statement”), perfecting Borrower’s security interest in the
applicable Interval to secure the Purchaser’s obligations under the Eligible
Note Receivable and (ii) a UCC-3 Assignment, naming Borrower as assignor and
Agent as assignee on behalf of Lenders, assigning to Agent, on behalf of
Lenders, all of Borrower’s right, title and interest under each Purchaser
Financing Statement.

(iii) delivered to Agent a duly executed Assignment of Notes Receivable and
Mortgages assigning to Agent all of Borrower’s right, title and interest in
and to each such Pledged Note Receivable and the related Mortgage; and

(iv) subject to Section 4.4(c)(xvi) hereof, delivered to Agent, with respect
to each Encumbered Interval, a commitment for a Mortgagee’s Title Policy
showing that the Mortgage in respect of such Interval has been assigned to
Agent and insuring in favor of Agent the first priority Lien of such
Mortgage in the amount of the Advance to be made in respect

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of such Pledged Note Receivable, with a satisfactory title insurance policy
to be issued within forty five (45) days from the date of the Advance.

     The Mortgages and the assignments thereof to Agent shall each have been duly recorded in the
applicable land records. The Mortgagee’s Title Policies shall be in form and substance
satisfactory to Agent and shall be issued by a title insurance company satisfactory to Agent (the
“Title Company”), and name Agent as the insured party therein as agent for Lenders. The funding of
the requested Advance, delivery of the Collateral and issuance of the title insurance policy, and
recording of the assignments or any releases may, in Agent’s discretion, be effected by way of an
escrow arrangement with the Title Company or other fiduciary, the form and substance of which shall
be satisfactory to Agent.

     (c) Other Conditions. In addition to the other conditions set forth in this
Agreement, the making of the initial or any requested Advance shall be subject to the
satisfaction of the following conditions:

(i) no Default or Event of Default shall exist immediately prior to the
making of such requested Advance or, after giving effect thereto,
immediately after the making of such requested Advance;

(ii) each agreement required to have been executed and delivered in
connection with any prior Advance shall be consistent with the terms of this
Agreement and shall be in full force and effect;

(iii) the date on which such requested Advance is to be made shall be a
Business Day;

(iv) Borrower shall have delivered to Agent a certification showing the
dollar amount of the requested Advance based on the Eligible Notes
Receivable pledged to Agent, and the Notes Receivable being pledged
contemporaneously with each requested Advance in the form attached hereto as
Exhibit C;

(v) not more than one Advance shall have previously been made in the same
calendar month in which such requested Advance is to be made, unless Agent,
in its sole discretion, agrees to make an additional Advance during such
calendar month;

(vi) such requested Advance shall be in a principal amount of not less than
$50,000, unless Agent, in its sole discretion, agrees to make an Advance in
an amount less than $50,000;

(vii) Agent shall have determined that the requested Advance, when added to
the aggregate outstanding principal amount of all previous Advances, if any,
does not, based on the Eligible Notes Receivable that have been duly pledged
in favor of Agent exceed the lesser of: (i) total amount of the Borrowing
Base, or (ii) $100,000,000;

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(viii) if Agent shall so require, Agent shall have received an executed
closing protection letter issued by the Title Company, which shall be
reasonably acceptable to Agent;

(ix) each Lender shall have agreed to make and does make an Advance in an
amount equal to its respective Pro Rata Percentage;

     (d) Expenses. Borrower shall have paid all fees and expenses required to be
paid by Borrower pursuant to this Agreement in connection with such requested Advance or any
conditions related thereto.

     (e) Proceedings Satisfactory. All actions taken in connection with such
requested Advance and all documents and papers relating thereto shall be satisfactory to
Agent and its counsel. Agent and its counsel shall have received copies of such documents
and papers as Agent or such counsel may reasonably request in connection with such requested
Advance, all in form and substance reasonably satisfactory to Agent and its counsel.

     (f) Partial Waiver of Requirement for Title Insurance Policies Upon Satisfactory
Maintenance of Inventory Control Procedures. Anything in Section 5.1(b)(iv) hereof to
the contrary notwithstanding, the delivery of a commitment for a Mortgagee Title Policy and
a Mortgagee Title Policy shall be required only with respect to twenty-five percent (25%) of
the Eligible Notes Receivable delivered to Agent in respect of each advance, subject to the
following requirements and limitations:

(i) Borrower shall be in full compliance with the Inventory Control
Procedures (as defined in Section 6.23 herein); and

(ii) Agent shall have the right in its sole discretion to determine those
Eligible Notes Receivable in respect of which commitments for Mortgagee
Title Policies and also the Mortgagee Title Policies themselves shall be
required.

     In the event that Borrower fails to satisfy the requirements of Subparagraph 5.1(f)(i), then,
immediately upon such failure, the partial waiver provided under this subparagraph shall no longer
be effective.

Section 6-General Representations And Warranties

     Borrower hereby represents and warrants to Agent and each Lender as follows:

     6.1 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.

     6.2 Authorization, Enforceability, Etc.

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     (a) 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: (i)
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; (ii) 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 (iii) 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.

     (b) 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.

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

     (d) Borrower has, or will have, good and marketable title to the Collateral, free and
clear of any lien, security interest, charge or encumbrance except for the security
interests created by this Agreement or any Loan Document or otherwise created in favor of
Agent or those specifically consented to in writing by Agent or permitted hereunder. No
financing statement or other instrument similar in effect covering all or any part of the
Collateral is on file in any recording office, except such as may have been filed in favor
of Lenders hereunder or Agent as permitted hereunder.

     (e) The execution and delivery of the Loan Documents, the delivery and endorsement to
Agent as agent for Lenders of the Pledged Notes Receivable, the filing of the UCC-1’s with
the office of the secretary of state of the state in which Borrower is organized and the
Assignment of Notes Receivable and Mortgages in the official records of the county in which
the applicable Resort is located, create in favor of Agent as agent for Lenders a valid and
perfected continuing first or second, as applicable, priority security interest in the
Collateral. The Collateral shall secure the full payment and performance of the
Obligations.

     (f) None of the Pledged Notes Receivable is forged or has affixed thereto any
unauthorized signatures or has been entered into by any Person without the required legal
capacity; and during the term of the Agreement, none will be forged, or will have affixed
thereto, any unauthorized signatures.

     (g) Except as permitted in Sections 3.7 and 3.8 hereof, there have been no
modifications or amendments to the Pledged Notes Receivable or Mortgages.

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     (h) The makers of the Eligible Notes Receivable have no defenses, offsets,
counterclaims or claims relating to the Eligible Notes Receivable or the Mortgages.

     (i) The Pledged Notes Receivable and the Mortgages were executed and delivered by
Purchasers in favor of Borrower in connection with the purchase of the related Encumbered
Intervals.

     (j) The Mortgages constitute and will constitute valid and enforceable first and prior
liens and security interests on the Encumbered Intervals.

     (k) The Pledged Notes Receivable and the Mortgages are and shall remain in full force
and effect, are and will be valid and binding obligations of the respective makers in favor
of Agent, as holder on behalf of Lenders; and Borrower further warrants and guarantees the
value, quantity, sound condition, grade and quality of the Encumbered Intervals and rights,
properties, easements and interests appurtenant or related thereto.

     (l) The grant of the security interests described herein has not affected and will not
affect the validity or enforceability of the obligations of the respective makers of the
Pledged Notes Receivable under such Notes Receivable or the respective Mortgages.

     (m) Neither Agent nor any Lender shall be required to take, and Borrower has taken any
and all required steps to protect each Lender’s security interest in the Collateral (other
than maintaining possession of the portion of the Collateral constituting instruments); and
neither Agent nor any Lender is or shall be required to collect or realize upon the
Collateral or any distribution of interest or principal, nor shall loss of, or damage to,
the Collateral release Borrower from any of the Obligations.

     6.3 Financial Statements and Business Condition. The Financial Reports for the first
five (5) months of the calendar year 2005 are, to the best of Borrower’s knowledge, accurate and
fairly represent the financial condition of the Borrower for the periods in question, subject to
the written qualifications set forth therein. To the best of Borrower’s knowledge, there are no
material liabilities, direct or indirect, fixed or contingent, of Borrower, except as disclosed to
Agent in writing.

     6.4 Taxes. In accordance with the requirements set forth in the Declaration, Borrower
represents and warrants that Borrower, Silverleaf Club, or the applicable Timeshare Owners’
Association, as required, has paid or will have paid in full, prior to delinquency, all ad valorem
taxes and other taxes and assessments against the Resorts and the Collateral; and Borrower knows of
no basis for any additional taxes or assessments against the Resorts or the Collateral. Borrower,
Silverleaf Club, or the applicable Timeshare Owners’ Association, as the case may be, has filed all
tax returns required to have been filed by it and has paid or will pay prior to delinquency, all
taxes shown to be due and payable on such returns, including interest and penalties thereon, and
all other taxes which are payable by it to the extent the same have become due and payable.

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     6.5 Title to Properties: Prior Liens. Borrower has good and marketable title to all
of the Collateral and to all unsold Units and Intervals at each Resort, and all rights, properties
and benefits appurtenant to or benefiting them. Borrower is not in default under any of the
documents evidencing or securing any indebtedness which is secured, wholly or in part, by any
portion of any Resort or any portion or all the Collateral and no event has occurred which with the
giving of notice, the passage of time or both, would constitute a default under any of the
documents evidencing or securing any such indebtedness. Other than the Liens granted in favor of
Agent, the Liens granted to secure the Inventory Loan, and the liens described in Schedule 6.5
attached hereto, there are no liens or encumbrances against the Collateral, or against any Resort.

     6.6 Subsidiaries, Affiliates and Capital Structure. Borrower has no subsidiaries or
Affiliates which have any involvement or interest in any Resort in any way. None of the Affiliates
of Borrower are parties to any proxies, voting trusts, shareholders agreements or similar
arrangements pursuant to which voting authority, rights or discretion with respect to Borrower is
vested in any other Person.

     6.7 Litigation, Proceedings, Etc. Except for those matters identified in Schedule 6.7
hereto, there are no actions, suits, proceedings, orders or injunctions pending or threatened
against or affecting Borrower, the Resorts or the Timeshare Owners’ Association at law or in
equity, or before or by any governmental authority or other tribunal, which (a) could have a
material adverse effect on Borrower or (b) relate to the Loan or which could have a material effect
on the Collateral or the Resorts. Borrower has received no notice from any court, governmental
authority or other tribunal alleging that Borrower or the Resorts have violated the Timeshare Act,
any of the rules or regulations thereunder, the Declaration or any other applicable laws,
agreements or arrangements that could have any material effect on the Loan, the Collateral or the
Resorts.

     6.8 Licenses, Permits, Etc. Borrower, the Resorts, the Timeshare Owners’ Associations
or Borrower’s Affiliates involved in the operations of the Resorts, and, to the best of Borrower’s
knowledge after diligent inquiry, other Persons involved in the operations of the Resorts, possess
all requisite franchises, certificates of convenience and necessity, operating rights, approvals,
licenses, permits, consents, authorizations, exemptions and orders as are necessary to carry on its
or their business as now being conducted, without any known conflict with the rights of others and,
with respect to Borrower, the Resorts and the Timeshare Owners’ Associations, in each case subject
to no mortgage, pledge, Lien, lease, encumbrance, charge, security interest, title retention
agreement or option other than as provided for by this Agreement.

     6.9 Environmental Matters. Except as otherwise noted on Schedule 6.9: (a) no Resort
contains any Hazardous Materials, (b) no Hazardous Materials are used or stored at or transported
to or from the Resorts, (c) neither Borrower nor the Resorts nor any manager thereof nor to
Borrower’s knowledge, the Timeshare Owners’ Associations, have received notice from any
governmental agency, entity or other Person with regard to Hazardous Materials on, under or
affecting any Resort, and (d) neither Borrower, the Resorts, nor any portion thereof, nor to
Borrower’s knowledge after diligent inquiry, the Timeshare Owners’ Associations, are in violation
of any Environmental Laws.

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     6.10 Full Disclosure. No information, exhibit or written report or the content of any
schedule furnished by or on behalf of Borrower to Agent or any Lender in connection with the Loan
or the Resorts contains any material misstatement of fact or omits the statement of a material fact
necessary to make the statement contained herein or therein not misleading. Borrower knows of no
fact or condition which will prevent the sale of Intervals to Purchasers or prevent the operation
of the Resorts in accordance with the Declarations and related public offering statements, and in
accordance with applicable law, or prevent Borrower from performing its Obligations pursuant to the
Loan Documents.

     6.11 Use of Proceeds/Margin Stock. None of the proceeds of the Loan will be used to
purchase or carry any margin stock (as defined under Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time), and no portion of the proceeds of the Loan
will be extended to others for the purpose of purchasing or carrying margin stock. None of the
transactions contemplated in the Agreement (including, without limitation, the use of the proceeds
from the Loan) will violate or result in the violation of Section 7 of the Securities Exchange Act
of 1934, as amended, or any regulations issued pursuant thereto, including, without limitation,
Regulations G, T, U and X of the Board of Governors of the Federal Reserve System, 12 C.F.R.,
Chapter 11.

     6.12 Defaults. Borrower has no knowledge of any Default or Event of Default not
disclosed to Agent in writing. Borrower has no knowledge of any default or event of default under
any loan facility or with any lender. Borrower has no knowledge of any condition or event, which,
with the passage of time, notice or both, would constitute an Event of Default or an event of
default under any loan facility or with any lender

     6.13 Compliance with Law. Borrower

     (a) is not in violation, nor are any of its Resorts, or the business operations in
respect of any of the Resorts, or to Borrower’s knowledge after diligent inquiry, the
Timeshare Owners’ Association, in violation, of the Timeshare Act, or any laws, ordinances,
governmental rules or regulations of any state in which a Resort is located, any political
subdivision of said states or any other jurisdiction to which Borrower or the Resorts, or
the business operations conducted in respect of the Resorts, or the Timeshare Owners’
Association, are subject;

     (b) has not failed, nor have the Resorts or, to Borrower’s knowledge, the Timeshare
Owners’ Associations failed, to obtain any consents or joinders, or any approvals, licenses,
permits, franchises or other governmental authorizations, or to make or cause to be made any
filings, submissions, registrations or declarations with any government or agency or
department thereof, necessary to the establishment, ownership or operation of the Resorts or
any of Borrower’s Properties, or to the conduct of Borrower’s business, including, without
limitation, the operation of the Resorts and the sale, or offering for sale, of Intervals
therein; which violation or failure to obtain or register materially adversely affects
Borrower, the Resorts or the business, prospects, profits, properties or condition
(financial or otherwise) of Borrower or the Resorts. Borrower has, to the extent required
by its activities and businesses, and the operations of the Resorts, fully complied with:
(1) all of the applicable provisions of (a) the Consumer

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Credit Protection Act; (b) Regulation Z of the Federal Reserve Board; (c) the Equal
Credit Opportunity Act; (d) Regulation B of the Federal Reserve Board; (e) the Federal Trade
Commission’s 3-day cooling-off Rule for Door-to-Door Sales; (f) Section 5 of the Federal
Trade Commission Act; (g) the Interstate Land Sales Full Disclosure Act (“ILSA”); (h)
federal postal laws; (i) applicable state and federal securities laws; (j) applicable usury
laws; (k) applicable trade practices, home and telephone solicitation, sweepstakes,
anti-lottery and consumer credit and protection laws; (l) applicable real estate sales
licensing, disclosure, reporting and escrow laws; (m) the Americans With Disabilities Act
and related accessibility guidelines (“ADA”); (n) the Real Estate Settlement Procedures Act
(“RESPA”); (o) all amendments to and rules and regulations promulgated under the foregoing
acts or laws; (p) the Federal Trade Commission’s Privacy of Consumer Financial Information
Rule and (q) other applicable federal statutes and the rules and regulations promulgated
thereunder; and (2) all of the applicable provisions of the Timeshare Acts, any law or laws
of any state (and the rules and regulations promulgated thereunder) relating to ownership,
establishment or operation of the Resorts, or the sale, offering for sale, or financing of
Intervals;

     (c) has made diligent inquiry, and to the best of Borrower’s knowledge, all persons or
entities owning an interest in Borrower: (i) are not currently identified on United States
Office of Foreign Assets Control (“OFAC”) List; and (ii) are not persons or entities with
whom a citizen of the United States is prohibited to engage in transactions by any trade
embargo, economic sanction, or other prohibition of Untied States law, regulation, or
Executive Order of the President of the United States. The OFAC List currently is
accessible through the internet website www.treas.gov/ofac/t11sdn.pdf.

     (d) represents and warrants that at all times throughout the term of the Loan, (i) none
of the funds or other assets of Borrower shall constitute property of, or shall be
beneficially owned, directly or indirectly, by, any Person subject to trade restrictions
under the Prescribed Laws (each such Person, an “Embargoed Person”), with the result that
the investment in Borrower (whether directly or indirectly), is or would be prohibited by
law or the Loan made by Lender is or would be in violation of law; (ii) no Embargoed Person
shall have any interest of any nature whatsoever in Borrower with the result that the
investment in Borrower (whether directly or indirectly), is or would be prohibited by law or
the Loan is or would be in violation of law; and (iii) none of the funds of Borrower shall
be derived from any unlawful activity with the result that the investment in Borrower
(whether directly or indirectly), is or would be prohibited by law or the Loan is or would
be in violation of law.

     6.14 Restrictions of Borrower. Borrower will not be, on or after the date hereof, a
party to any contract or agreement which prohibits Borrower’s execution of or compliance with the
terms of this Agreement, the other Loan Documents, or the Inventory Loan Agreement. Borrower has
not agreed or consented to cause or permit in the future (upon the happening of a contingency or
otherwise) any of the Collateral, whether now owned or hereafter acquired, to be subject to a Lien
except in favor of Agent as provided herein and TFC under the Inventory Loan.

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     6.15 Broker’s Fees. Borrower, Agent and each Lender represent to each other that none
of them has made any commitment or taken any action which will result in a claim for any brokers’,
finders’ or other similar fees or commitments with respect to the transactions described in the
Agreement. Borrower agrees to indemnify Agent and each Lender and save and hold Agent and each
Lender harmless from all claims of any Person for any broker’s or finder’s fee or commission, and
this indemnity shall include reasonable attorneys’ fees and legal expenses.

     6.16 Deferred Compensation Plans. Borrower has no pension, profit sharing or other
compensatory or similar plan (herein called a “Plan”) providing for a program of deferred
compensation for any employee or officer. No fact or situation, including but not limited to, any
“Reportable Event,” as that term is defined in Section 4043 of the Employee Retirement Income
Security Act of 1974 as the same may be amended from time to time (“Pension Reform Act”), exists or
will exist in connection with any Plan of Borrower which might constitute grounds for termination
of any Plan by the Pension Benefit Guaranty Corporation or cause the appointment by the appropriate
United States District Court of a Trustee to administer any such Plan. No “Prohibited Transaction”
within the meaning of Section 406 of the Pension Reform Act exists or will exist upon the execution
and delivery of the Agreement or the performance by the parties hereto of their respective duties
and obligations hereunder. Borrower will (1) at all times make prompt payment of contributions
required to meet the minimum funding standards set forth in Sections 302 through 305 of the Pension
Reform Act with respect to each of its Plans; (2) promptly, after the filing thereof, furnish to
Agent copies of each annual report required to be filed pursuant to Section 103 of the Pension
Reform Act in connection with each Plan for each Plan Year, including any certified financial
statements or actuarial statements required pursuant to said Section 103; (3) notify Agent
immediately of any fact, including, but not limited to, any Reportable Event arising in connection
with any Plan which might constitute grounds for termination thereof by the Pension Benefit
Guaranty Corporation or for the appointment by the appropriate United States District Court of a
Trustee to administer the Plan; and (4) notify Agent of any “Prohibited Transaction” as that term
is defined in Section 406 of the Pension Reform Act. Borrower will not (a) engage in any
Prohibited Transaction or (b) terminate any such Plan in a manner which could result in the
imposition of a Lien on the Property of Borrower pursuant to Section 4068 of the Pension Reform
Act.

     6.17 Labor Relations. The employees of Borrower are not a party to any collective
bargaining agreement with Borrower, and, to the best knowledge of Borrower and its officers, there
are no material grievances, disputes or controversies with any union or any other organization of
Borrower’s employees, or threats of strikes, work stoppages or any asserted pending demands for
collective bargaining by any union or organization.

     6.18 Resort.

     (a) Timeshare Plan. Each Resort has been established and dedicated, and is and
will remain, a time-share plan and project in full compliance with all applicable laws and
regulations, including without limitation, the Timeshare Act.

     (b) Access. Each Resort has direct access to a publicly dedicated road and all
roadways inside each Resort are subject to an access and use easement or other dedication or
provision that benefits and will continue to benefit all Purchasers.

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     (c) Utilities. Electric, sanitary and stormwater sewer, telephone, water
facilities and other necessary utilities are available in sufficient capacity to service
each Resort and any easements necessary to the furnishing of such utility services have been
obtained and duly recorded, and inure to the benefit of each Resort and each Timeshare
Owners’ Association.

     (d) Amenities. Each Purchaser of an Interval has and will have access to and
the full use and enjoyment of all of the Common Elements and public utilities of the Resort
in which such interval is located, all in accordance with the Declaration and Timeshare
Documents.

     (e) Construction. All costs arising from the construction or acquisition of
any Units and any other improvements and the purchase of any fixtures or equipment,
inventory, furnishings or other personalty located in, at, or on the Resorts have been paid
or will be paid when due.

     (f) Sale of Intervals. The marketing, sale, offering of sale, rental,
solicitation of Purchasers or, if applicable, lessees, and financing of Intervals in the
Resort: (1) do not constitute the sale, or the offering of sale, of Securities subject to
the registration requirements of the Securities Act of 1933, as amended, or any state
securities law; (2) do not violate the Timeshare Act or any land sales or consumer
protection law, statute or regulation of the state where the Resort is located or any other
state or jurisdiction in which a Purchaser resides or in which sales or solicitation
activities occur; and (3) do not violate any consumer credit or usury statute of state where
the Resort is located or any other state or jurisdiction in which a Purchaser resides or in
which sales or solicitation activities occur. All marketing and sales activities are
performed by employees of Borrower, all of whom are and shall be properly licensed in
accordance with applicable laws.

     (g) Tangible Property. Except for specific items which may be owned by
independent contractors, the machinery, equipment, fixtures, tools and supplies used in
connection with the Resort, including without limitation, with respect to the operations and
maintenance of the Common Elements, are owned either by Borrower, Silverleaf Club, or the
applicable Timeshare Owners’ Association.

     (h) Operating Contracts. Borrower, Silverleaf Club, or the applicable
Timeshare Owners’ Association has entered into the contracts, agreements, and arrangements
necessary for the operation of the Resorts, including but not limited to those with respect
to utilities, maintenance, management, services, marketing and sales (hereinbelow defined as
“Operating Contracts”).

     6.19 Timeshare Regimen Reports. Borrower has furnished to Agent true and correct
copies of the Timeshare Documents listed on Schedule 6.19, which consist of all those placed on
file by Borrower with the Divisions or any federal, state or local regulatory or recording
agencies, offices or departments. All such filings and/or recordations, and all joinders and
consents, necessary in order to establish the plan in respect of the Resorts, including without
limitation, the Units, Intervals, and all appurtenant Common Elements, and all related use and

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access rights, have been done or obtained and all laws, regulations and statutes, and all
agreements or arrangements, in connection therewith have been complied with.

     6.20 Operating Contracts. The contracts, agreements and arrangements comprising those
agreements or arrangements relating to the operation of the Resorts, including without limitation,
with respect to utilities, maintenance, management, services, marketing and sales under which the
fees to be paid equal or exceed $50,000.00 (collectively, all such agreements and arrangements are
referred to herein as the “Operating Contracts”) are unmodified and in full force and effect and
shall remain free and clear of any lien.

     6.21 Architectural and Environmental Control. All Units, Common Elements and other
improvements at, upon or appurtenant to the Resort are and will be in compliance with the design,
use, architectural and environmental control provisions, if any, set forth in the Declaration.

     6.22 Tax Identification/Social Security Numbers. Borrower’s federal taxpayer’s
identification number is: 75-2259890.

     6.23 Inventory Control Procedures. Borrower has provided to Agent a true and complete
copy of Borrower’s Inventory, Sales and Assignments procedures (the “Inventory Control
Procedures”), a copy of which is attached hereto as Exhibit D. Borrower is and shall at all times
be in full compliance with the Inventory Control Procedures from the date hereof until the Loan is
repaid in full. Borrower shall permit Agent, its officers, employees, auditors, and other agents
or designees to review the books and records of Borrower and make such other examinations and
inspections as Agent in its sole discretion deems necessary to determine that Borrower is in full
compliance with such Inventory Control Procedures.

     6.24 Additional Representations and Warranties. This Agreement, the Note and the
other Loan Documents constitute the legal, valid and binding obligation of Borrower, enforceable
against Borrower in accordance with their respective terms.

Section 7-Covenants

     7.1 Affirmative Covenants. So long as any portion of the Obligations remains
unsatisfied, Borrower hereby covenants and agrees with Agent and each Lender as follows:

     (a) Payment and Performance of Obligations. Borrower shall pay all of the Loan
and related expenses when and as the same become due and payable, and Borrower shall
strictly observe and perform all of the Obligations, including without limitation, all
covenants, agreements, terms, conditions and limitations contained in the Loan Documents,
and will do all things necessary which are not prohibited by law to prevent the occurrence
of any Event of Default hereunder; and Borrower will maintain an office or agency in the
State of Texas where notices, presentations and demands in respect of the Loan Documents may
be made upon Borrower. Such office or agency and the books and records of Borrower shall be
maintained at 1221 Riverbend Drive, Suite 120, Dallas, Texas 75221 until such time as
Borrower shall so notify Agent, in writing, of any change of location of such office or
agency.

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     (b) Maintenance of Existence, Qualification and Assets. Borrower shall at all
times (i) maintain its legal existence, (ii) maintain its qualification to transact business
and good standing in any state and in any jurisdiction where it conducts business in
connection with the Resorts, and (iii) comply or cause compliance with all governmental
laws, rules, regulations and ordinances applicable to the Resorts, Borrower or its business,
including, without limitation, the Timeshare Act.

     (c) Consolidation and Merger. Borrower will not consolidate with or merge into
any other Person or permit any other Person to consolidate with or merge into it, unless:
(i) Borrower is the continuing or surviving corporation in any such consolidation or merger
and (ii) prior to and immediately after such consolidation or merger, Borrower shall not be
in default hereunder.

     (d) Maintenance of Insurance. Borrower, or if required pursuant to the
Declaration, the Timeshare Owners’ Association, shall maintain (or Borrower shall cause to
be maintained) at all times during the term of this Agreement, policies of insurance with
premiums being paid when due, and shall deliver to Agent originals of insurance policies
issued by insurance companies, in amounts, in form and in substance, and with expiration
dates, all acceptable to Agent and containing a waiver of subrogation rights by the insuring
company, a non-contributory standard mortgagee benefit clause, or their equivalents, and a
mortgagee loss payable endorsement in favor of and satisfactory to Agent on behalf of each
Lender, and breach of warranty coverage, providing the following types of insurance on and
with respect to Borrower (or, as appropriate, the respective Associations) and the Resort:

(i) Fire and extended coverage insurance (including lightning, hurricane,
tornado, wind and water damage, vandalism and malicious mischief coverage)
covering the improvements and any personal property located in or on the
Resorts in an amount not less than the full replacement value of such
improvements and personal property, and said policy of insurance shall
provide for a deductible acceptable to Agent, breach of warranty coverage,
replacement cost endorsements satisfactory to Agent, and shall not permit
co-insurance;

(ii) Public liability and property damage insurance covering the Resorts in
amounts and on terms satisfactory to Agent; and

(iii) Such other insurance on the Resorts or any replacements or
substitutions therefor including, without limitation, flood insurance (if
the Property is or becomes located in an area which is considered a flood
risk by the U.S. Emergency Management Agency or pursuant to the National
Flood Insurance program), in such amounts and upon terms as may from time to
time be reasonably required by Agent.

     To the extent any other timeshare receivable lender has any rights to approve the form of
insurance policies with respect to the Resorts, the amounts of coverage thereunder, the insurers
under such policies, or the designation of an attorney-in-fact for purposes of dealing with

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damage to any part of the Resorts or insurance claims or matters related thereto, or any
successor to such attorney-in-fact, or any changes with respect to any of the foregoing, Borrower
shall take all steps as may be necessary (and, after turnover, if any, of control of the Resort to
the Timeshare Owners’ Association, Borrower shall use its best efforts) to ensure that Agent, on
behalf of each Lender, shall at all times have a co-equal right, with such other lender (including,
without limitation, Borrower or any third-party lender), to approve all such matters and any
proposed changes in respect thereof; and Borrower shall not cause or permit any changes with
respect to any insurance policies, insurers, coverage, attorney-in-fact, or insurance trustee, if
any, without Agent’s prior written approval.

     In the event of any insured loss or claim in respect of the Resorts, Borrower shall apply (or
cause to be applied), and Borrower covenants that the Timeshare Owners’ Association shall apply (or
cause to be applied), all proceeds of such insurance policies in a manner consistent with the
Timeshare Documents and the Timeshare Act.

     All insurance policies required pursuant to this Agreement (or the Timeshare Documents or
Timeshare Act) shall provide that the coverage afforded thereby shall not expire or be amended,
canceled, modified or terminated without at least thirty (30) days prior written notice to Agent.
At least thirty (30) days prior to the expiration date of each policy maintained pursuant to this
Section 7.1(d), a renewal or replacement thereof satisfactory to Agent shall be delivered to Agent.
Borrower shall deliver or cause to be delivered to Agent receipts evidencing the payment for all
such insurance policies and renewals or replacements.

     In the event of any fire or other casualty to or with respect to the improvements on or at the
Resorts, Borrower covenants that Borrower or the Timeshare Owners’ Association, as the case may be,
will promptly restore or repair (or cause to be restored, repaired or replaced) the damaged
improvements and repair or replace any other personal property to the same condition as immediately
prior to such fire or other casualty and, with respect to the improvements and personal property on
the Resorts, in accordance with the terms of the Timeshare Documents or Timeshare Act. The
insufficiency of any net insurance proceeds shall in no way relieve Borrower or, as applicable,
Borrower and Timeshare Owners’ Association, of its obligation to restore, repair or replace such
improvements and other personal property in accordance with the terms hereof, of the Declaration or
other Timeshare Documents or of the Timeshare Act, and Borrower covenants that Borrower or, as the
case may be, the Timeshare Owners’ Association, shall promptly comply and cause compliance with the
provisions of the Declaration and other Timeshare Documents, or of the Timeshare Act relating to
such restoration, repair or replacement. Borrower shall, unless an Event of Default has occurred,
apply all insurance proceeds payable to or received by it, in accordance with the applicable
Declaration. If an Event of Default has occurred, Agent may, in its sole discretion, apply all
insurance proceeds in accordance with the applicable Declaration or to the repayment of the Loan in
accordance with Section 2.4 and 2.5 hereof.

     (e) Maintenance of Security. Borrower shall execute and deliver (or cause to
be executed and delivered) to Agent all security agreements, financing statements,
assignments and such other agreements, documents, instruments and certificates, and
supplements and amendments thereto, and take such other actions, as Agent deems necessary or
appropriate in order to maintain as valid, enforceable and

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perfected first or second priority liens and security interests, as applicable, all
Liens and security interests in the Collateral granted to Agent as agent for Lenders to
secure the Obligations. Borrower shall not grant extensions of time for the payment of,
compromise for less than the full face value or release in whole or in part, any Purchaser
or other Person liable for the payment of, or allow any credit whatsoever except for the
amount of cash to be paid upon, any Collateral or any instrument, chattel paper or document
representing the Collateral.

     (f) Payment of Taxes and Claims. Borrower will pay, and, as applicable
pursuant to the Declaration, Borrower covenants that the Timeshare Owners’ Association will
pay, when due, all taxes imposed upon the Resorts, the Collateral, Borrower, the Timeshare
Owners’ Association, or any of its or their property, or with respect to any of its or their
franchises, businesses, income or profits, or with respect to the Loan or any of the Loan
Documents; and Borrower and the Timeshare Owners’ Association, as the case may be, shall pay
all other charges and assessments against Borrower, the Collateral and the Resorts before
any claim (including, without limitation, claims for labor, services, materials and
supplies) arises for sums which have become due and payable. Except for the Liens in
connection with the Inventory Loan and the Liens in favor of Agent on behalf of Lenders
granted pursuant to the Loan Documents, and except as otherwise specifically provided for
herein, Borrower covenants that no statutory or other Liens whatsoever (including, without
limitation, mechanics’, materialmens’, judgment or tax liens) shall attach to any of the
Collateral or the Resorts except for such Liens as are expressly provided for pursuant to
the Declaration, which shall, in any event, be subordinate to the Lien of Agent on behalf of
Lenders. In the event any such Lien attaches to any of the Collateral or the Resorts
Borrower shall, within thirty (30) days after any such Lien attaches, either (i) cause such
Lien to be released of record or (ii) provide Agent with a bond in accordance with the
applicable laws of the State, issued by a corporate surety acceptable to Agent, in an amount
and form acceptable to Agent.

     (g) Inspections. Borrower shall, at any time and from time to time and at the
expense of Borrower, permit Agent or any Lender or their respective agents or
representatives (provided such Lender has coordinated such inspection with Agent) to inspect
the Resorts, the Collateral and if necessary, in Agent’s opinion, to ascertain or assure
Borrower’s compliance with the terms of this Agreement, any of Borrower’s other assets or
Property, and to examine and make copies of and abstracts from its and, to the extent it has
access thereto or possession thereof, the Timeshare Owners’ Association’s, books, accounts,
records, original correspondence, computer tapes, disks, software, and other papers as it
may desire; and to discuss its affairs, finances and accounts with any of its officers,
employees, Affiliates, contractors or independent public accountants (and by this provision
Borrower authorizes said accountants to discuss with Agent, its agents or representatives,
the affairs, finances and accounts of Borrower). Agent and each Lender agree to use
reasonable efforts not to unreasonably interfere with Borrower’s business operations in
connection with any such inspections. Without limiting the foregoing, Agent shall have the
right to make such credit investigations as Agent may deem appropriate in connection with
its review of Notes Receivable, and Borrower shall make available to Agent all credit
information in Borrower’s possession or under its control or

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to which it may have access, with respect to Purchasers or other obligors under Notes
Receivable as Agent may request.

     (h) Reporting Requirements. So long as any portion of the Obligations remain
unsatisfied, Borrower shall furnish (or cause to be furnished, as the case may be) to Agent
the following:

(i) Quarterly Financial Reports. As soon as available and in any
event within forty-five (45) days after the end of each fiscal quarter,
copies of income statements and balance sheets for the operations of each
Resort and for Borrower, certified by the Chief Financial Officer of
Borrower.

(ii) Annual Financial Reports. As soon as available and in any
event within ninety (90) days after the end of each calendar year or other
fiscal year as may be applicable with respect to Borrower (a “Fiscal Year”),
a statement of income and expense of Borrower for the annual period ended as
of the end of such Fiscal Year, and a balance sheet of Borrower as of the
end of such Fiscal Year, all in such detail and scope as may be reasonably
required by Lender and prepared in accordance with GAAP and on a basis
consistent with prior accounting periods. Each annual financial statement
of Borrower shall be prepared by an independent certified public accountant
and certified by Borrower to be true, correct and complete, and shall
otherwise be in form acceptable to Lender. In the event that Lender, acting
in good faith, is not satisfied with any such Financial Statement, and if
Borrower fails to provide Lender with new Financial Statements acceptable to
Lender within fifteen (15) days after Lender delivers written notice of such
dissatisfaction to Borrower, then, at Lender’s request, Borrower shall
furnish to Lender copies of audited income statements and balance sheets
certified by an independent certified public accountant acceptable to Lender
and prepared in accordance with GAAP and on a basis consistent with prior
accounting periods. Such audited annual statements shall also be in form
and content satisfactory to Lender. If the figures for net and total
operating income (as such terms are defined in accordance with GAAP) in the
audited annual statements do not vary by more than five percent (5%) from
the figures in the unaudited annual statements, Lender shall bear, pro rata
based upon its Pro Rata Percentage, the cost of the certified public
accountant’s audit. If, however, such figures vary by more than five
percent (5%), Borrower shall bear the cost of such certified public
accountant’s audit;

(iii) Officer’s Certificate. Each set of annual Financial
Statements or reports delivered to Agent pursuant to Sections 7.1(h)(i) and
7.1(h)(ii) of this Agreement will be accompanied by a certificate of the
President or the Treasurer of Borrower in the form attached as Exhibit E
setting forth that the signers have reviewed the relevant terms of the
Agreement (and all other agreements and exhibits between the parties) and
have made, or

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caused to be made, under their supervision, a review of the transactions and
conditions of Borrower from the beginning of the period covered by the
Financial Statements or reports being delivered therewith to the date of the
certificate and that such review has not disclosed the existence during such
period of any condition or event which constitutes a Default or Event of
Default or, if any such condition or event existed or exists or will exist,
specifying the nature and period of existence thereof and what action
Borrower has taken or proposes to take with respect thereto;

(iv) Sales Reports. Concurrently with the financial statements
required pursuant to Section 7.1(h)(i), Borrower shall deliver to Agent, a
sales report, detailing the sales of all Intervals at the Resorts for the
period covered thereby, certified by Borrower to be true, correct and
complete and otherwise in a form approved by Agent;

(v) Audit Reports. Promptly upon receipt thereof, one (1) copy of
each other report submitted to Borrower by independent public accountants or
other Persons in connection with any annual, interim or special audit made
by them of the books of Borrower;

(vi) Notice of Default or Event of Default. Immediately upon
becoming aware of the existence of any condition or event which constitutes
a Default or an Event of Default, Borrower shall deliver to Agent a written
notice specifying, as applicable, the nature and period of existence thereof
and what action Borrower is taking or proposes to take with respect thereto;

(vii) Notice of Claimed Default. Immediately upon becoming aware of
a claim of Default or Event of Default, a written notice specifying, as
applicable, the nature and period of existence thereof and what action
Borrower is taking or proposes to take with respect thereto;

(viii) Maintenance of Inventory Control. Borrower shall maintain
and at all times fully comply with the Inventory Control Procedures from the
date hereof until the Loan is repaid in full. Borrower shall permit Agent,
its officers, employees, auditors, and other agents or designees to review
the books and records of Borrower and make such other examinations and
inspections as Agent in its sole discretion deems necessary to determine
that Borrower is in full compliance with such Inventory Control Procedures.

(ix) Material Adverse Developments. Immediately upon becoming aware
of any claim, action, proceeding, development or other information which may
materially and adversely affect Borrower, the Collateral, the Resorts, the
business, prospects, profits or condition (financial or otherwise) of
Borrower, or the ability of Borrower to perform its Obligations under the
Agreement, Borrower shall provide Agent with

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telephonic or telegraphic notice, followed by telefaxed and mailed written
confirmation, specifying the nature of such development or information and
such anticipated effect;

(x) Other Information. Borrower shall deliver to Agent: (i) within
five (5) days of the filing thereof with the United States Securities and
Exchange Commission, copies of each Form 8-K, 10-Q and 10-K filed by
Borrower; (ii) at least semi-annually during the Term (or more frequently
upon request of Agent), current addresses and telephone numbers for each
obligor under an Eligible Note Receivable pledged to Agent on behalf of
Lenders hereunder and (iii) any other information related to the Loan, the
Collateral, the Resorts or Borrower as Agent may in good faith request
including, without limitation, annually, federal call reports relating to
Lockbox Agent; and

     (i) Records. Borrower shall keep adequate records and books of account
reflecting all financial transactions of Borrower and with respect to the Resorts in which
complete entries will be made in accordance with GAAP. In addition, Borrower shall keep,
and shall promptly deliver to Agent upon Agent’s request therefor, complete, timely and
accurate records of all sales of Intervals and all payments in respect of Pledged Notes
Receivable.

     (j) Management. Borrower shall: (i) remain engaged in the active management of
the Resorts, (ii) unless Borrower notifies Agent in writing at least thirty (30) days in
advance of its new location, retain its executive offices at 1221 Riverbend Drive, Suite
120, Dallas, Texas 75221, and (iii) continue to perform duties substantially similar to
those presently performed as provided in the management agreement relating to each Resort.
No management agreement for any Resort shall be modified, assigned, extended, terminated or
entered into nor shall the current method of operation and management of the Resorts be
changed in any material manner, without the prior written approval of Agent, except as
contemplated in Section 7.1(w) hereof.

     (k) FICA. Borrower shall furnish to Agent within thirty (30) days after the
expiration of each calendar quarter proof reasonably satisfactory to Agent that Borrower’s
obligations to make deposits for F.I.C.A., social security and withholding taxes have been
satisfied.

     (l) Operating Contracts. Subject to the rights of the Timeshare Owners’
Association as set forth in the Timeshare Documents, no Operating Contract shall be
modified, extended, terminated or entered into, without the prior written approval of Agent,
if any such modification, extension, termination or new agreement could have a material
adverse impact on the operation of the Resorts or the Collateral.

     (m) Notices. Borrower shall notify Agent within five (5) Business Days of the
occurrence of any event (i) as a result of which any representation or warranty of Borrower
contained in any Loan Documents would be incorrect or materially misleading if made at that
time, or (ii) as a result of which Borrower is not in full

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compliance with all of its covenants and agreements contained in this Agreement or any
Loan Document, or (iii) which constitutes or, with the passage of time, notice or a
determination by Agent would constitute, an Event of Default.

     (n) Maintenance. Borrower shall maintain, or shall cause to be maintained, or
to the extent provided for pursuant to the Declaration, shall use its best efforts to cause
the Timeshare Owners’ Association to maintain, and the Resorts in good repair, working order
and condition and shall make all necessary replacements and improvements to the Resorts
consisting of real property so that the value and operating efficiency of the Resorts will
be maintained at all times and so that the Resorts remain in compliance in all respects with
the Timeshare Act, the Timeshare Documents and other applicable law.

     (o) Claims. Borrower shall promptly notify Agent of any claim, action or
proceeding affecting the Resorts or Collateral, or any part thereof, or Agent, any Lender or
any of the security interests or rights granted in favor of Agent hereunder or under any of
the Loan Documents. At the request of Agent, Borrower shall appear in and defend in favor
of each Lender, at Borrower’s sole expense, any such claim, action or proceeding.

     (p) Registration and Regulations.

(i) Local Legal Compliance. Borrower will comply, and will cause
the Resorts to comply, with all applicable servitudes, restrictive
covenants, applicable planning, zoning or land use ordinances and building
codes, all applicable health and Environmental Laws and regulations, and all
other applicable laws, rules, regulations, agreements or arrangements.

(ii) Registration Compliance. Borrower will maintain, or cause to
be maintained, all necessary registrations, current filings, consents,
franchises, approvals, and exemption certificates, and Borrower will make or
pay, or cause to be made or paid, all registrations, declarations or fees
with the Division and any other government or any agency or department
thereof, whether in the state or another jurisdiction, required in
connection with the Resorts and the occupancy, use and operation thereof,
the incorporation of Units into the time-share plan established pursuant to
the Declaration and the other Timeshare Documents, and the sale,
advertising, marketing, and offering for sale of Intervals. All such
registrations, filings and reports will be truthfully completed; and true
and complete copies of such registrations, applications, consents, licenses,
permits, franchises, approvals, exemption certificates, filings and reports
will be delivered to Agent. Borrower shall advise Agent of any changes with
respect to its marketing or sales programs in any jurisdiction, including
jurisdictions other than the state, and at Agent’s request from time to
time, Borrower shall deliver to Agent: (A) written statements by the
applicable state authorities, in form acceptable to Agent, stating that no
registration is necessary for the sale of Intervals in the particular state,
(B) an opinion of

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counsel in form acceptable to Agent and rendered by counsel acceptable to
Agent, stating that no such registration is necessary, or (C) such other
evidence of compliance with applicable laws as Agent may require; and

(iii) Other Compliance. Borrower has, in all material respects,
complied with and will comply with all laws and regulations of the United
States, the State of Texas, each state in which an applicable Resort or
Collateral is located, any political subdivision of either such state and
any other governmental, quasi-governmental or administrative jurisdiction in
which Intervals have been sold or offered for sale, or in which sales,
offers of sale or solicitations with respect to the Resorts have been or
will be conducted, including to the extent applicable, but not limited to:
(1) the Timeshare Act; (2) the Consumer Credit Protection Act; (3)
Regulation Z of the Federal Reserve Board; (4) the Equal Credit Opportunity
Act; (5) Regulation B of the Federal Reserve Board; (6) the Federal Trade
Commission’s 3-day cooling-off Rule for Door-to-Door Sales; (7) Section 5 of
the Federal Trade Commission Act; (8) ILSA; (9) federal postal laws; (10)
applicable state and federal securities laws; (11) applicable usury laws;
(12) applicable trade practices, home and telephone solicitation,
sweepstakes, anti-lottery and consumer credit and protection laws; (13)
applicable real estate sales licensing, disclosure, reporting and escrow
laws; (14) the ADA; (15) RESPA; (16) all amendments to and rules and
regulations promulgated under the foregoing acts or laws; (17) the Federal
Trade Commission’s Privacy of Consumer Financial Information Rule; (18)
other applicable federal statutes and the rules and regulations promulgated
thereunder; and (19) any state law or law of any state (and the rules and
regulations promulgated thereunder) relating to ownership, establishment or
operation of the Resort, or the sale, offering for sale, or financing of
Intervals.

     (q) Other Documents. Borrower will maintain to the satisfaction of Agent and
make available to Agent and the other Lenders, accurate and complete files relating to the
Resorts, the Pledged Notes Receivable and other Collateral, and such files will contain true
copies of each Pledged Note Receivable, as amended from time to time, copies of all relevant
credit memoranda relating to such Notes Receivable and all collection information and
correspondence relating thereto. Without limiting the foregoing, Borrower shall maintain
evidence of its compliance with the requirements of Section 3.9.

     (r) Further Assurances. Borrower will execute and deliver, or cause to be
executed and delivered, such other and further agreements, documents, instruments,
certificates and assurances as, in the judgment of Agent exercised in good faith may be
necessary or appropriate to more effectively evidence or secure, and to ensure the
performance of, the Obligations. In addition, Borrower shall deliver to Agent from time to
time upon each request by Agent such documents, instruments or other matters or items as
Agent may require to evidence Borrower’s compliance with the covenants set forth in this
Section 7.1 and Section 3.9.

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          (s) Utilities. Borrower will cause, or to the extent provided for pursuant to
the Declaration, covenants to use its best efforts to ensure that the Timeshare Owners’
Association, or the manager of the Resorts, as applicable, will cause, electric, sanitary
and stormwater sewer, water facilities, drainage facilities, solid waste disposal, telephone
and other necessary utilities to be available to the Resorts in sufficient capacity to
service the Resorts.

          (t) Amenities. Borrower will cause, or to the extent provided for pursuant to
the Declarations, will use its best efforts to ensure that the Timeshare Owners’
Association, or the manager of the Resort, as applicable, will cause, the Resorts to be
maintained in good condition and repair, and in accordance with the provisions of the
applicable Timeshare Documents, and Borrower will cause each Purchaser of an Interval at the
Resorts to have continuing access to, and the use of, to the extent of such Purchaser’s
time-share periods, all of the Common Elements and related or appurtenant services, rights
and benefits, all as provided in the Declaration and the Timeshare Documents.

          (u) Expenses and Closing Fees. Whether or not the transactions contemplated
hereunder are completed, Borrower shall pay all expenses of Agent, each Lender and each of
TFC’s participants relating to negotiating, preparing, documenting, closing and enforcing
this Agreement, including, but not limited to:

(i) the cost of preparing, reproducing and binding this Agreement, the other
Loan Documents and all Exhibits and Schedules thereto;

(ii) the reasonable fees and disbursements of Agent’s, each Lender’s and
each of TFC’s participants’ counsel;

(iii) Agent’s, each Lender’s and each of TFC’s participants’ reasonable
out-of-pocket expenses;

(iv) all reasonable fees and expenses (including fees and expenses of
Agent’s, each Lender’s and each of TFC’s participants’ counsel) relating to
any amendments, waivers, consents or subsequent closings pursuant to the
provisions hereof;

(v) all costs, outlays, legal fees and expenses of every kind and character
had or incurred in (1) the interpretation or enforcement of any of the
provisions of, or the creation, preservation or exercise of rights and
remedies under, any of the Loan Documents including the costs of appeal (2)
the preparation for, negotiations regarding, consultations concerning, or
the defense or prosecution of legal proceedings involving any claim or
claims made or threatened against Agent arising out of this transaction or
the protection of the Collateral securing the Loan or Advances made
hereunder, expressly including, without limitation, the defense by Agent,
each Lender and each of TFC’s participants of any legal proceedings
instituted or threatened by any Person to seek to recover or set aside any

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payment or setoff theretofore received or applied by Agent, each Lender and
each of TFC’s participants with respect to the Obligations, and any and all
appeals thereof; and (3) the advancement of any expenses provided for under
any of the Loan Documents;

(vi) all expenses relating to the maintenance and administration of the
Lockbox and Lockbox Account by the Lockbox Agent and Servicing and any
escrow by the Title Company or any other escrow agent;

(vii) all costs and expenses incurred by Agent under the Note, and all late
charges under the Note; and

(viii) all real and personal property taxes and assessments, documentary
stamp and intangible taxes, sales taxes, recording fees, title insurance
premiums and other title charges, document copying, transmittal and binding
costs, appraisal fees, lien and judgment search costs, fees of architects,
engineers, environmental consultants, surveyors and any special consultants,
construction inspection fees, brokers fees, escrow fees, wire transfer fees,
and all travel and out-of-pocket expenses of Agent, each Lender and each of
TFC’s participants to conduct inspections or audits. Without limitation of
the foregoing, Borrower shall pay the costs of UCC and other searches, UCC
and other Loan Document recording fees and applicable taxes, and premiums on
each Mortgagee Title Policy delivered to Agent pursuant to this Agreement.

With respect to the fees payable by Borrower under clauses (ii), (iii), and (iv) above,
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, TFC and/or TFC’s
participants shall provide Borrower in advance, as applicable, with good faith estimates of:
(1) the reasonable fees and disbursements of participant’s counsel; (2) the participant’s
reasonable out-of-pocket expenses; and (3) the reasonable fees and expenses of participants
and each participant’s counsel relating to any amendments, waivers, consents or subsequent
closings pursuant to the provisions hereof, respectively; and such fees, disbursements and
expenses shall be in accordance with such good faith estimates.

          (v) Indemnification of Agent and Lenders. In addition to (and not in lieu of)
any other provisions of any Loan Document providing for indemnification in favor of Agent or
Lenders, Borrower shall defend, indemnify and hold harmless Agent and each Lender, their
respective subsidiaries, affiliates, officers, directors, agents, employees,
representatives, consultants, contractors, servants, and attorneys, as well as the
respective heirs, personal representatives, successors or assigns of any or all of them
(hereafter collectively the “Indemnified Lender Parties”), from and against, and promptly
pay on demand or reimburse each of them with respect to, any and all liabilities, claims,
demands, losses, damages, costs and expenses (including without limitation, reasonable
attorneys’ and paralegals’ fees and costs), actions or causes of action of any and every
kind or nature whatsoever asserted against or incurred by any of them by reason of or
arising out of or in any way related or attributable to (i) this Agreement, the Loan

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Documents, or the Collateral; (ii) the transactions contemplated under any of the Loan
Documents or any of the Timeshare Documents, including without limitation, those in any way
relating to or arising out of the violation of any federal or state laws, including the
Timeshare Act; (iii) any breach of any covenant or agreement or the incorrectness or
inaccuracy of any representation and warranty of Borrower contained in this Agreement or any
of the Loan Documents (including without limitation any certification of Borrower delivered
to any Lender or Agent); (iv) any and all taxes, including real estate, personal property,
sales, mortgage, excise, intangible or transfer taxes, and any and all fees or charges,
including, without limitation under the Timeshare Act, which may at any time arise or become
due prior to the payment, performance and discharge in full of the Obligations; (v) the
breach of any representation or warranty as set forth herein regarding any Environmental
Laws; (vi) the failure of Borrower to perform any obligation or covenant herein required to
be performed pursuant to any Environmental Laws; (vii) the use, generation, storage,
release, threatened release, discharge, disposal or presence on, under or about the Resorts
of any Hazardous Materials; (viii) the removal or remediation of any Hazardous Materials
from the Resorts required to be performed pursuant to any Environmental Laws or as a result
of recommendations of any environmental consultant or as required by Agent; (ix) claims
asserted by any Person (including without limitation any governmental or quasi-governmental
agency, commission, department, instrumentality or body, court, arbitrator or administrative
board (collectively, a “Governmental Agency”), in connection with or any in any way arising
out of the presence, use, storage, disposal, generation, transportation, release, or
treatment of any Hazardous Materials on, in, under or affecting the Resorts; (x) the
violation or claimed violation of any Environmental Laws in regard to the Resorts; or (xi)
the preparation of an environmental audit or report on the Resorts, whether conducted by a
Lender, Agent, Borrower or a third-party, or the implementation of environmental audit
recommendations. Such indemnification shall not give Borrower any right to participate in
the selection of counsel for Agent or any Lender or the conduct or settlement of any dispute
or proceeding for which indemnification may be claimed. Agent and each Lender agree to give
Borrower written notice of the assertion of any claim or the commencement of any action or
lawsuit described in this Section. It is the express intention of the parties hereto that
the indemnity provided for in this Section, as well as the disclaimers of liability referred
to in this Agreement, are intended to and shall protect and indemnify Agent and each Lender
from the consequences of Agent’s and each Lender’s own negligence, whether or not that
negligence is the sole or concurring cause of any liability, obligation, loss, damage,
penalty, action, judgment, suit, claim, cost, expense or disbursement provided, however,
that Borrower shall not be required to protect and indemnify Agent or any Lender from the
consequences of Agent’s or any such Lender’s gross negligence, where that gross negligence
is the sole cause of the liability, obligation, loss, damage, penalty, action, judgment,
suit, claim, cost, expense or disbursement for which indemnification or protection would
otherwise be required. The provisions of this Section shall survive the full payment,
performance and discharge of the Obligations and the termination of this Agreement, and
shall continue thereafter in full force and effect.

          (w) Standby Servicer. Borrower will maintain the agreement for the Standby
Servicer in full force and effect. Borrower agrees that upon the occurrence of a Default or
Event of Default hereunder, the Standby Servicer will assume full control over

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the servicing of all Pledged Notes Receivable, reporting solely to Agent, as provided
in Sections 9.1(i) and 10.14 hereof.

          (x) Financial Covenants.

(i) Tangible Net Worth. Borrower shall at all times have and
maintain Tangible Net Worth in an amount which shall not be less than an
amount equal to the Tangible Net Worth as stated in the annual audited
financial statements as of December 31, 2004 plus (A) fifty percent (50%) of
the aggregate amount of proceeds received by Borrower after December 31,
2004 in connection with each issuance by Borrower of any class or classes of
capital stock after December 31, 2004, except for stock issued to retire
existing unsecured subordinated debt, plus (B) fifty percent (50%) of the
aggregate amount of net income (calculated in accordance with GAAP) of
Borrower after December 31, 2004.

(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 (12) consecutive months to equal or exceed
a ratio of .570 to 1.

(iii) Maximum Loan Delinquency. Borrower will not permit as of the
last day of each calendar quarter its over 30-day delinquency rate on its
entire Notes Receivable portfolio to be greater than twenty-five percent
(25%). If, as of the last day of each calendar quarter, Borrower’s over
30-day delinquency on its entire Notes Receivable portfolio is greater than
twenty percent (20%), then Agent shall have the right to conduct an audit,
at Borrower’s sole cost and expense, of all Borrower’s Notes Receivable
pledged to the Lenders hereunder.

(iv) Interest Coverage. The Interest Coverage Ratio for Borrower
shall be at least 1.25:1. The term Interest Coverage Ratio means with
respect to any Person for any calendar quarter, the ratio of (a) EBITDA for
such period less capital expenditures as determined in accordance with GAAP,
for such period to (b) the interest expense minus all non-cash items
constituting interest expense for such period.

(v) Profitable Operations. Borrower will not permit Consolidated
Net Income (a) for any fiscal year, commencing with the fiscal year ending
December 31, 2005, to be less than $1.00 and (b) for any two consecutive
fiscal quarters (reviewed on an individual rather than on an aggregate
basis) to be less than $1.00.

(vi) 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)

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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.

          (y) 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 Agent, as agent for each Lender, and applied by Agent in repayment
of the Loan. Borrower shall provide Agent with notice of Silverleaf Finance II, Inc.’s
declaration of a cash dividend or a payment on the Silverleaf Finance II Subordinated Note,
together with a certification that: (i) states whether a Default or Event of Default exists,
and (ii) contains a calculation of the Net Securitization Cash Flow.

          7.2 Negative Covenants. So long as any portion of the Obligations remain unsatisfied,
Borrower hereby covenants and agrees with Agent and each Lender as follows:

          (a) Limitation on Other Debt, Further Encumbrances. Borrower will not obtain
financing and grant liens with respect to the Collateral. Notwithstanding anything herein
to the contrary, Borrower may, without first obtaining the written consent of Agent obtain
financing and grant liens with respect to any of its assets or other property except for the
Collateral and those assets or property restricted by a negative pledge provided: (i)
Borrower provides ten days prior written notice to Agent setting forth the terms and
conditions of such financing; (ii) 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; (iii) such financing does not result in an Event of Default hereunder or under any
documents evidencing any other indebtedness of Borrower; and (iv) Agent is promptly provided
a copy of the fully executed loan documents relating thereto.

          (b) Restrictions on Transfers. Except as hereinafter specifically provided,
Borrower shall not, whether voluntarily or involuntarily, by operation of law or otherwise,
(i) without obtaining the prior written consent of Agent (which consent may be given,
withheld or conditioned by Agent in Agent’s sole discretion), transfer, sell, pledge,
convey, hypothecate, factor or assign all or any portion of the Collateral, the Encumbered
Intervals, the Common Elements relating to the Encumbered Intervals or any Resort facilities
or amenities, or contract to do any of the foregoing, including, without limitation,
pursuant to options to purchase, and so-called installment sales contracts, land contracts,
or contracts for deed, provided that the foregoing restriction on transfers shall

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not apply to the conveyance of SPV Assets to the SPV in accordance with the Silverleaf
Finance II Documents, (ii) without obtaining the prior written consent of Agent (which
consent may be given, withheld or conditioned by Agent in Agent’s sole discretion), lease or
license all or any portion of the Collateral, the Encumbered Intervals, the Common Elements
relating to the Encumbered Intervals or any Resort facilities or amenities (except for the
license created in favor of SPV under any license agreement with Borrower, Silverleaf Club
or any timeshare owners association, to use or access the reservation system or related
computer hardware or software for any Resort), or change the legal or actual possession or
use thereof, (iii) permit the assignment, transfer, delegation, change, modification or
diminution of the duties or responsibilities of Borrower, of any manager of the Resorts
approved by Agent as manager of the Resorts (except for an assignment of such duties to a
professional management company or companies reasonably acceptable to Agent in advance)
without obtaining the prior written consent of Agent (which consent shall not be
unreasonably withheld), or (iv) without obtaining the prior written consent of Agent (which
consent may be given, withheld or conditioned by Agent in Agent’s sole discretion), cause or
permit the assignment, pledge or other encumbrance of any of the Operating Contracts or all
or any portion of Borrower’s right, title or interest in the Declaration. Without limiting
the generality of the preceding sentence, and subject to the terms of this Agreement, the
prior written consent of Agent (as specified above) shall be required for (A) any transfer
of the Encumbered Intervals, the Common Elements relating to the Encumbered Intervals or any
Resort facilities or amenities or any part thereof made to a subsidiary or Affiliate or
otherwise, (B) any transfer of all or any part of the Encumbered Intervals, the Common
Elements relating to the Encumbered Intervals or any Resort facilities or amenities by
Borrower to its stockholders or Affiliates or vice versa, and (C) any corporate merger or
consolidation, disposition or other reorganization, except as permitted in Section 7.1(c).
In the event that Agent is willing to consent to a transfer which would otherwise be
prohibited by this Section 7.2(b) Agent may condition its consent on such terms as it
desires, including, without limitation, an increase in the Interest Rate and the requirement
that Borrower pay a transfer fee, together with any expenses incurred by Agent in connection
with the granting of such consent (including, without limitation, attorneys’ fees and
expenses). If Borrower violates the terms of this Section 7.2(b), in addition to any other
rights or remedies which Agent may have herein, in any other Loan Document, or at law or in
equity, Agent may by written notice to Borrower increase, effective immediately as of the
date of such violation, the Interest Rate to the Default Rate.

          (c) Use of a Lender’s or Agent’s Name. Borrower will not, and will not permit
any Affiliate to, without the prior written consent of Agent, such Lender or such TFC
participant, use the name of Agent, any Lender or any TFC participant or the name of any
affiliate of Agent, any Lender or any TFC participant in connection with any of their
respective businesses or activities, except in connection with internal business matters and
as required in dealings with governmental agencies.

          (d) Transactions with Affiliates. Except as provided in the Silverleaf Finance
II Documents, without the prior written consent of Agent, which shall not unreasonably be
withheld, Borrower will not enter into any transaction with any Affiliate in connection with
the Resorts, including, without limitation, relating to the purchase,

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sale or exchange of any assets or properties or the rendering of any service, except in
the ordinary course of, and pursuant to the reasonable requirements of, the operations of
the Resorts and upon fair and reasonable terms.

          (e) Restrictive Covenants. Borrower will not without Agent’s prior written
consent seek, consent to, or otherwise acquiesce in, any change in any private restrictive
covenant, planning or zoning law or other public or private restriction, which would limit
or alter the use of the Resorts.

          (f) Subordinated Obligations. Borrower will not, directly or indirectly, (i)
permit any payment to be made in respect of any indebtedness, liabilities or obligations,
direct or contingent, (the “Subordinated Debt”) to any of its shareholders or their
affiliates or which are subordinated by the terms thereof or by separate instrument to the
payment of principal of, and interest on, the Note; (ii) permit the amendment, rescission or
other modification of any such subordination provisions of any of Borrower’s subordinated
obligations in such a manner as to affect adversely the Lien in and to the Collateral or
Lenders’ senior priority position and entitlement as to payment and rights with respect to
the Note and the Obligations, or (iii) permit the prepayment or redemption, except for
mandatory prepayments, of all or any part of Borrower’s obligations to its shareholders, or
of any subordinated obligations of Borrower except in accordance with the terms of such
subordination. Notwithstanding anything to the contrary in this Section 7.2(f), so long as
Borrower’s Tangible Net Worth remains in compliance with Section 7.1(x)(i) Borrower may: (i)
retire unsecured subordinated debt, and/or (ii) declare dividends, buy back stock, and
perform other equity transactions.

          (g) Timeshare Regime. Without Agent’s prior written consent, Borrower shall
not amend, modify or terminate the Declarations or other Timeshare Documents, or any other
restrictive covenants, agreements or easements regarding the Resorts (except for routine
non-substantive modifications which have no impact on the Collateral). Except as otherwise
provided herein, Borrower shall not assign its rights as developer under the Declarations
without Agent’s prior written consent, or file or permit to be filed any additional
covenants, conditions, easements or restrictions against or affecting the Resorts (or any
portion thereof) without Agent’s prior written consent, which consent shall not be
unreasonably withheld.

          (h) Name Change. Borrower will not change its name or state of organization.

          (i) Collateral. Borrower shall not take any action (nor permit or consent to
the taking of any action) which might impair the value of the Collateral or any of the
rights of Lenders in the Collateral, except with respect to the Silverleaf Finance II Stock
and the Silverleaf Finance II Subordinated Note as provided in the Silverleaf Finance II
Documents, nor shall Borrower cause or permit any amendment to or modification of the form
or terms of any of the Pledged Notes Receivable, Mortgages or, except as specifically
provided herein above, the other Timeshare Documents.

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          (j) Marketing/Sales. Borrower shall not market, attempt to sell or sell or
permit or justify any sales or attempted sales of any Intervals except in compliance with
the Timeshare Act and applicable laws in state and other jurisdictions where marketing,
sales or solicitation activities occur.

          (k) Modification of Other Documents. Borrower shall not amend or modify the
Standby Servicing Agreement, without the prior written consent of Agent, which consent shall
not be unreasonably withheld.

          (l) Declarant’s Rights and Management Agreements. Borrower covenants, pledges
and agrees that until the Loan and all other amounts due and owing under the Loan Agreement
and the other Loan Documents are paid in full Borrower will not, voluntarily or
involuntarily, directly or indirectly, mortgage, pledge, assign, sell, transfer,
hypothecate, encumber, convey or grant a security interest in any: (i) contract or
agreement, whether written, oral or otherwise, whether now or hereafter existing, including
any management or operating contract and agreement, between Borrower or any Affiliate of the
Borrower and the governing body of any Resort, with respect to the management and operation
of the Resort; or (ii) any rights of the Declarant (the “Declarant Rights”) arising under
the Declaration creating any Resort, or under the Bylaws for the Resort, whether now or
hereafter existing.

Section 8-Events Of Default

          8.1 Nature of Events. An “Event of Default” shall exist if any of the following shall
occur:

          (a) Payments. If Borrower shall fail to make, as and when due, any payment or
mandatory prepayment of principal, interest, fees or other amounts with respect to the Loan
and such failure shall continue for five (5) days after notice of such failure is provided
by Agent.

          (b) Covenant Defaults. 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 2.4 as provided in
Section 8.1(h); or (iii) 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.

          (c) Warranties or Representations. If any representation or other statement
made by or on behalf of Borrower in this Agreement, in any of the Loan

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Documents or in any instrument furnished in compliance with or in reference to the Loan
Documents, is false, misleading or incorrect in any material respect as of the date made or
reaffirmed.

          (d) Enforceability of Liens. If any lien or security interest granted by
Borrower to Lenders in connection with the Loan is or becomes invalid or unenforceable or is
not, or ceases to be, a perfected first or second priority lien or security interest, as
applicable, in favor of Agent, for itself and as agent for the Lenders, encumbering the
asset which it is intended to encumber, and Borrower fails to cause such lien or security
interest to become a valid, enforceable, first or second, as applicable, and prior lien or
security interest in a manner satisfactory to Agent within ten (10) days after Agent
delivers written notice thereof to Borrower.

          (e) Involuntary Proceedings. If a case is commenced or a petition is filed
against Borrower under any Debtor Relief Law; a receiver, liquidator or trustee of Borrower
or of any material asset of Borrower is appointed by court order and such order remains in
effect for more than forty-five (45) days; or if any material asset of Borrower is
sequestered by court order and such order remains in effect for more than forty-five (45)
days.

          (f) Proceedings. If Borrower voluntarily seeks, consents to or acquiesces in
the benefit of any provision of any Debtor Relief Law, whether now or hereafter in effect;
consents to the filing of any petition against it under such law; makes an assignment for
the benefit of its creditors; admits in writing its inability to pay its debts generally as
they become due; or consents or suffers to the appointment of a receiver, trustee,
liquidator or conservator for it, or any part of its, assets.

          (g) Attachment, Judgment, Tax Liens. The issuance, filing, levy or seizure
against the Collateral, or, with respect to the Resorts or the Obligations, against Borrower
of one or more attachments, injunctions, executions, tax liens or judgments for the payment
of money cumulatively in excess of $100,000.00, which is not discharged in full or stayed
within thirty (30) days after issuance or filing.

          (h) Failure to Deposit Proceeds. If Borrower shall fail to deliver payments
made under the Pledged Notes Receivable directly to Agent as required pursuant to Section
2.4 above, or if Borrower shall take any other act which Agent shall deem to be a conversion
of the Collateral or fraudulent with respect to any Lender.

          (i) Timeshare Documents. If the Declaration, any of the other documents
creating or governing the Resorts, its timeshare regime, or the Timeshare Owners’
Association, or the restrictive covenants with respect to the Resorts, shall be terminated,
amended or modified without Agent’s prior written consent (except for routine
non-substantive modifications which have no impact on the Collateral).

          (j) Removal of Collateral. If Borrower conceals, removes, transfers, conveys,
assigns or permits to be concealed, removed, transferred, conveyed or assigned, any of the
Collateral in violation of the terms of the Loan Documents or with the intent to

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hinder, delay or defraud its creditors or any of them including, without limitation,
any Lender.

          (k) Other Defaults. If a material default shall occur in any of the covenants
or Obligations set forth in any of the Loan Documents.

          (l) Material Adverse Change. Any material adverse change in the financial
condition of Borrower or in the condition of the Collateral. For purposes of this
provision, a decline in the net worth of Borrower of $100,000.00 or less shall not be
considered a material adverse change.

          (m) Default by Borrower in Other Agreements. Any: (1) default, as defined in
the applicable loan agreement, by Borrower: (i) in the payment of any indebtedness to any
lender; (ii) in the payment or performance of other indebtedness for borrowed money or
obligations secured by any part of the Resorts; or (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); (2) acceleration by any
lender of its respective credit facilities; or (3) default under, or acceleration of the TFC
Conduit Loan.

          (n) Use of Resorts. Any act or failure to act by Borrower which materially and
adversely limits the rights of Purchasers to use Common Elements, and related or appurtenant
easement, access and use rights and benefits of any of the Resorts, including but not
limited to a default by Borrower or any Affiliate under any loan document or Declaration to
which Borrower or any Affiliate is a party.

          (o) Violation of Negative Covenants. Borrower violates any negative covenants
set forth in Section 7.2.

          (p) Violation of Financial Covenants. Borrower violates any financial
covenants set forth in Section 7.1(x).

          (q) Use of Loan Proceeds. If the proceeds of any Advance are used in
contravention of Section 6.11.

Section 9-Remedies

          9.1 Remedies Upon Default. Should an Event of Default occur, Agent, on behalf of each
Lender, may, take any one or more of the actions described in this Section 9, all without notice to
Borrower:

          (a) Acceleration. Without demand or notice of any nature whatsoever, declare
the unpaid balance of the Loans, or any part thereof, immediately due and payable, whereupon
the same shall be due and payable.

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          (b) Termination of Obligation to Advance. Terminate any obligation of Lenders
to lend under this Agreement in its entirety, or any portion of any such commitment, to the
extent Agent shall deem appropriate, all without notice to Borrower.

          (c) Judgment. Reduce each Lender’s claim to judgment, foreclose or otherwise
enforce each Lender’s security interest in all or any part of the Collateral by any
available judicial or other procedure under law.

          (d) Sale of Collateral and Foreclosure of Mortgages. After notification, if
any, provided for in Section 9.2 below, Agent may sell or otherwise dispose of, at the
office of Agent, or elsewhere, as chosen by Agent, all or any part of the Collateral, and
any such sale or other disposition may be as a unit or in parcels, by public or private
proceedings, and by way of one or more contracts (it being agreed that the sale of any part
of the Collateral shall not exhaust Agent’s power of sale, but sales may be made from time
to time until all of the Collateral has been sold or until the Obligations have been paid in
full and fully performed), and at any such sale it shall not be necessary to exhibit the
Collateral. Borrower hereby acknowledges and agrees that a private sale or sales of the
Collateral, after notification as provided for in Section 9.2, shall constitute a
commercially reasonable disposition of the Collateral sold at any such sale or sales, and
otherwise, commercially reasonable action on the part of Agent.

          (e) Retention of Collateral. At its discretion, retain such portion of the
Collateral as shall aggregate in value to an amount equal to the aggregate amount of the
Loans, in satisfaction of the Obligations, whenever the circumstances are such that Agent is
entitled on behalf of Lenders and elects to do so under applicable law.

          (f) Receiver. Apply by appropriate judicial proceedings for appointment of a
receiver for the Collateral, or any part thereof, and Borrower hereby consents to any such
appointment.

          (g) Purchase of Collateral. Buy the Collateral at any public or private sale.

          (h) Exercise of Other Rights. Agent, on behalf of each Lender, shall have all
the rights and remedies of a secured party under the Code and other legal and equitable
rights to which it may be entitled, including, without limitation, and without notice to
Borrower, the right to continue to collect all payments made on the Pledged Notes
Receivable, and to apply such payments to the Obligations, and to sue in its own name the
maker of any defaulted Pledged Notes Receivable. Agent may also exercise any and all other
rights or remedies afforded by any other applicable laws or by the Loan Documents as Agent
shall deem appropriate, at law, in equity or otherwise, including, but not limited to, the
right to bring suit or other proceeding, either for specific performance of any covenant or
condition contained in the Loan Documents or in aid of the exercise of any right or remedy
granted to Agent in the Loan Documents. Agent shall also have the right to require Borrower
to assemble any of the Collateral not in Agent’s possession, at Borrower’s expense, and make
it available to Agent at a place to be determined by Agent

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which is reasonably convenient to both parties, and shall, on behalf of each Lender,
have the right to take immediate possession of all of the Collateral, and may enter the
Resorts or any of the premises of Borrower or wherever the Collateral shall be located, with
or without process of law wherever the Collateral may be, and, to the extent such premises
are not the property of Agent, to keep and store the same on said premises until sold (and
if said premises be the property of Borrower, Borrower agrees not to charge Agent or any
Lender for use and occupancy, rent, or storage of the Collateral, for a period of at least
ninety (90) days after sale or disposition of the Collateral).

          (i) Replacement of Manager and Servicer. Without demand or notice of any
nature whatsoever, upon an Event of Default, Agent may terminate any then existing servicing
agreement and replace any then existing Servicer with the Standby Servicer or such other
servicer as Agent may select in its sole and absolute discretion. Agent shall also have the
right to assume management of the Resorts.

          9.2 Notice of Sale. Reasonable notification of time and place of any public sale of
the Collateral or reasonable notification of the time after which any private sale or other
intended disposition of the Collateral is to be made shall be sent to Borrower and to any other
person entitled under the Code to notice; provided, however, that if the Collateral threatens to
decline speedily in value or is of a type customarily sold on a recognized market, Agent may sell
or otherwise dispose of the Collateral without notification, advertisement or other notice of any
kind. It is agreed that notice sent not less than five (5) calendar days prior to the taking of
the action to which such notice relates is reasonable notification and notice for the purposes of
this Section 9.2. Agent shall have the right to bid at any public or private sale on behalf of
Lenders. Out of money arising from any such sale, Agent shall retain an amount equal to all of its
costs and charges, including attorneys’ fees for advice, counsel or other legal services or for
pursuing, reclaiming, seeking to reclaim, taking, keeping, removing, storing and advertising such
Collateral for sale, selling same and any and all other charges and expenses in connection
therewith and in satisfying any prior Liens thereon. Any balance shall be applied upon the
Obligations, and in the event of deficiency, Borrower shall remain liable to Lenders. In the event
of any surplus, such surplus shall be paid to Borrower or to such other Persons as may be legally
entitled to such surplus. If, by reason of any suit or proceeding of any kind, nature or
description against Borrower, or by Borrower or any other party against Agent or any Lender, which
in such Agent’s sole discretion makes it advisable for Agent to seek counsel for the protection and
preservation of Lenders’ security interest, or to defend the interest of Lenders, such expenses and
counsel fees shall be allowed to Agent and the same shall be made a further charge and Lien upon
the Collateral.

          In view of the fact that federal and state securities laws may impose certain restrictions on
the methods by which a sale of Collateral comprised of Securities may be effected after an Event of
Default, Borrower agrees that upon the occurrence or existence of an Event of Default, Agent may,
on behalf of Lenders, from time to time, attempt to sell all or any part of such Collateral by
means of a private placement restricting the bidding and prospective purchasers to whose who will
represent and agree that they are purchasing for investment only and not for, or with a view to,
distribution. In so doing, Agent may solicit offers to buy such Collateral, or any part of it for
cash, from a limited number of investors deemed by Agent, in its reasonable judgment, to be
responsible parties who might be interested in purchasing the Collateral, and if

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Agent solicits such offers from not less than two (2) such investors, then the acceptance by
Agent of the highest offer obtained therefrom shall be deemed to be a commercially reasonable
method of disposition of such Collateral.

          9.3 Application of Collateral; Termination of Agreements. Upon the occurrence of any
Event of Default: (i) each Lender may, with or without proceeding with such sale or foreclosure or
demanding payment or performance of the Obligations, without notice, terminate each Lender’s
further performance under this Agreement or any other agreement or agreements between any Lender
and Borrower, without further liability or obligation by Agent or any Lender; (ii) Agent may, on
behalf of Lenders, at any time, appropriate and apply on any Obligations any and all Collateral in
its, the Custodian’s, or the Lockbox Agent’s possession and (iii) each Lender may apply any and all
balances, credits, deposits, accounts, reserves, indebtedness or other moneys due or owing to
Borrower held by any Lender hereunder or under any other financing agreement or otherwise, whether
accrued or not, subject to Section 2.6 hereof. Neither such termination, nor the termination of
this Agreement by lapse of time, the giving of notice or otherwise, shall absolve, release or
otherwise affect the liability of Borrower in respect of transactions prior to such termination, or
affect any of the Liens, security interests, rights, powers and remedies of Agent or Lenders, but
they shall, in all events, continue until all of the Obligations are satisfied.

          9.4 Rights of Lender Regarding Collateral. In addition to all other rights possessed
by Agent or Lenders, Agent, at its option, may on behalf of each Lender from time to time after
there shall have occurred an Event of Default, and so long as such Event of Default remains
uncured, at its sole discretion, take the following actions:

          (a) Transfer all or any part of the Collateral into the name of Agent or its nominee;

          (b) Take control of any proceeds of any of the Collateral;

          (c) Extend or renew the Loan and grant releases, compromises or indulgences with
respect to the Obligations, any portion thereof, any extension or renewal thereof, or any
security therefor, to any obligor hereunder or thereunder; and

          (d) Exchange certificates or instruments representing or evidencing the Collateral for
certificates or instruments of smaller or larger denominations for any purpose consistent
with the terms of this Agreement.

          9.5 Delegation of Duties and Rights. Agent may execute any of its duties and/or
exercise any of its rights or remedies under the Loan Documents by or through its officers,
directors, employees, attorneys, agents or other representatives.

          9.6 Agent and/or Lenders not in Control. Except as expressly provided herein or in
any Loan Document, none of the covenants or other provisions contained in this Agreement or in any
Loan Document shall give Agent or any Lender the right or power to exercise control over the
affairs and/or management of Borrower.

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          9.7 Waivers. The acceptance by Agent or any Lender at any time and from time to time
of partial payments of the Loan or performance of the Obligations shall not be deemed to be a
waiver of any Event of Default then existing. No waiver by Agent or any Lender of any Event of
Default shall be deemed to be a waiver of any other or subsequent Event of Default. No delay or
omission by Agent or any Lender in exercising any right or remedy under the Loan Documents shall
impair such right or remedy or be construed as a waiver thereof or an acquiescence therein, nor
shall any single or partial exercise of any such right or remedy preclude other or further exercise
thereof, or the exercise of any other right or remedy under the Loan Documents or otherwise.
Further, except as otherwise expressly provided in this Agreement or by applicable law, Borrower
and each and every surety, endorser, guarantor and other party liable for the payment or
performance of all or any portion of the Obligations, severally waive notice of the occurrence of
any Event of Default, presentment and demand for payment, protest, and notice of protest, notice of
intention to accelerate, acceleration and nonpayment, and agree that their liability shall not be
affected by any renewal or extension in the time of payment of the Loan, or by any release or
change in any security for the payment or performance of the Loan, regardless of the number of such
renewals, extensions, releases or changes.

          9.8 Cumulative Rights. All rights and remedies available to any Lender or Agent on
behalf of Lenders under the Loan Documents shall be cumulative of and in addition to all other
rights and remedies granted under any of the Loan Document, at law or in equity, whether or not the
Loan is due and payable and whether or not Agent shall have instituted any suit for collection or
other action in connection with the Loan Documents.

          9.9 Expenditures by Lenders or Agent. Any sums expended by or on behalf of Agent or
Lenders pursuant to the exercise of any right or remedy provided herein shall become part of the
Obligations and shall bear interest at the Default Rate, from the date of such expenditure until
the date repaid.

          9.10 Diminution in Value of Collateral. Neither Agent nor any Lender shall have any
liability or responsibility whatsoever for any diminution or loss in value of any of the
Collateral, specifically including that which may arise from Agent or any Lender’s negligence or
inadvertence, whether such negligence or inadvertence is the sole or concurring cause of any
damage.

          9.11 Agent’s Knowledge. Agent shall not be deemed to have knowledge or notice of the
occurrence of any Event of Default unless Agent has actual knowledge of the Event of Default or has
received a notice from a Lender or Borrower referring to this Agreement and describing such Event
of Default. Each Lender agrees that upon learning of the existence of an Event of Default, it will
promptly notify Agent thereof in writing. Any such notice by a Lender, shall be in writing
sufficient to identify the nature of the Event of Default.

          9.12 Lender’s Enforcement Rights. Each Lender has assigned to Agent its absolute and
unconditional right to enforce the payment of its Note. No Lender may unilaterally enforce any
Lien or security interest in the Collateral, or bring suit against Borrower to enforce such
Lender’s rights hereunder or under its Note.

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Section 10
-Certain Rights Of Lenders

          10.1 Protection of Collateral. Agent on behalf of each Lender may at any time and
from time to time take such actions as it deems necessary or appropriate to protect Lender’s Liens
and security interests in and to preserve the Collateral, and to establish, maintain and protect
the enforceability of Lender’s rights with respect thereto, all at the expense of Borrower.
Borrower agrees to cooperate fully with all of Agent’s efforts to preserve the Collateral and
Lender’s Liens, security interests and rights and will take such actions to preserve the Collateral
and Lender’s Liens, security interests and rights as Agent may direct, including, without
limitation, by promptly paying upon Lender’s demand therefor, all documentary stamp taxes or other
taxes that may be or may become due in respect of any of the Collateral. All of Agent’s expenses
of preserving the Collateral and each Lender’s liens and security interests and rights therein
shall be added to the Loan.

          10.2 Performance by Agent. If Borrower fails to perform any agreement contained
herein, Agent may itself perform, or cause the performance of, such agreement on behalf of Lenders,
and the expenses of Agent incurred in connection therewith shall be payable by Borrower under
Section 10.5 below. In no event, however, shall Agent or any Lender have any obligation or duties
whatsoever to perform any covenant or agreement of Borrower contained herein or in any of the Loan
Documents, Timeshare Documents or Operating Contracts, and any such performance by Agent shall be
wholly discretionary with Agent. The performance by Agent, of any agreement or covenant of
Borrower on any occasion shall not give rise to any duty on the part of Agent to perform any such
agreements or covenants on any other occasion or at any time. In addition, Borrower acknowledges
that neither Agent nor any Lender shall at any time or under any circumstances whatsoever have any
duty to Borrower or to any third party to exercise any of Lender’s rights or remedies hereunder.

          10.3 No Liability of Lender. Neither the acceptance of this Agreement by Agent and
each Lender, nor the exercise of any rights hereunder by Lender or Agent on its behalf, shall be
construed in any way as an assumption by Agent or any Lender of any obligations, responsibilities
or duties of Borrower arising in connection with any Resort or under the Timeshare Documents or
Timeshare Acts, or any of the Operating Contracts, or in connection with any other business of
Borrower, or the Collateral, or otherwise bind Agent or any Lender to the performance of any
obligations with respect to any Resort or the Collateral; it being expressly understood that
neither Agent nor Lender shall be obligated to perform, observe or discharge any obligation,
responsibility, duty, or liability of Borrower with respect to any Resort or any of the Collateral,
or under any of the Timeshare Documents, the Timeshare Acts or under any of the Operating
Contracts, including, but not limited to, appearing in or defending any action, expending any money
or incurring any expense in connection therewith. Without limitation of the foregoing, neither
this Agreement, any action or actions on the part of Agent taken hereunder, nor the acquisition of
the Pledged Notes Receivable and the Mortgages by Agent prior to or following the occurrence of an
Event of Default shall constitute an assumption by Agent or any Lender of any obligations of
Borrower with respect to any Resort or the Pledged Notes Receivable, the Mortgages or any documents
or instruments executed in connection therewith, and Borrower shall continue to be liable for all
of its obligations thereunder or with respect thereto. Borrower agrees to indemnify, protect,
defend and hold Agent and each Lender harmless from and against any and all claims, demands, causes
of action, losses, damages,

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liabilities, suits, costs and expenses, including, without limitation, attorneys’ fees and court costs, asserted against or incurred by Agent and each Lender by reason of, arising out of, or connected in any way with (i) any failure or alleged failure of Borrower to perform any of its covenants or obligations with respect to each Resort or the Purchasers of any of the Intervals, (ii) a breach of any certification, representation, warranty or covenant of Borrower set forth in any of the Loan Documents, (iii) the ownership of the Pledged Notes Receivable, the Mortgages and the rights, titles and interests assigned hereby, or intended so to be, (iv) the debtor-creditor relationships between Borrower on the one hand, and the Purchasers, Agent or Lender, as the case may be, on the other, or (v) the Pledged Notes Receivable, the Mortgages or the operation of the Resorts or sale of Intervals. The obligations of Borrower to indemnify, protect, defend and hold Agent and each Lender harmless as provided in this Agreement are absolute, unconditional, present and continuing, and shall not be dependent upon or affected by the genuineness, validity, regularity or enforceability of any claim, demand or suit from which Agent or any Lender is indemnified. The indemnity provisions in this Section 10.3 shall survive the satisfaction of the Obligations and termination of this Agreement, and remain binding and enforceable against Borrower, or its successors or assigns. Borrower hereby waives all notices with respect to any losses, damages, liabilities, suits, costs and expenses, and all other demands whatsoever hereby indemnified, and agrees that its obligations under this Agreement shall not be affected by any circumstances, whether or not referred to above, which might otherwise constitute legal or equitable discharges of its obligations hereunder.

          10.4 Right to Defend Action Affecting Security. Agent may, at Borrower’s expense,
appear in and defend any action or proceeding at law or in equity which Agent in good faith
believes may affect the security interests granted under this Agreement, including without
limitation, with respect to Pledged Notes Receivable or Mortgages, the value of the Collateral or
each Lender’s rights under any of the Loan Documents.

          10.5 Expenses. All expenses payable by Borrower, under any provision of this
Agreement shall be an Obligation of Borrower and shall be paid by Borrower to Agent, upon demand,
and shall bear interest at the Default Rate from the date of expense until repaid by Borrower.

          10.6 Lender’s Right of Set-Off. Subject to Section 2.6 hereof, each Lender shall have
the right to set-off against any Collateral any Obligations then due and unpaid by Borrower,
provided Borrower is in Default.

          10.7 No Waiver. No failure or delay on the part of Agent in exercising any right,
remedy or power under this Agreement or in giving or insisting upon strict performance by Borrower
hereunder or in giving notice hereunder shall operate as a waiver of the same or any other power or
right, and no single or partial exercise of any such power or right shall preclude any other or
further exercise thereof or the exercise of any other such power or right. Agent, notwithstanding
any such failure, shall have the right thereafter to insist upon the strict performance by Borrower
of any and all of the terms and provisions of this Agreement to be performed by Borrower. The
collection and application of proceeds, the entering and taking possession of the Collateral, and
the exercise by Agent of the rights of Lenders contained in the Loan Documents and this Agreement
shall not cure or waive any default, or affect any notice of default, or invalidate any acts done
pursuant to such notice. No waiver by Agent or any Lender

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of any breach or default of or by any party hereunder shall be deemed to alter or affect
Lender’s rights hereunder with respect to any prior or subsequent default.

          10.8 Right of Agent to Extend Time of Payment, Substitute, Release Security, Etc.
Without affecting the liability of any Person or entity including without limitation, any
Purchasers, for the payment of any of the Obligations or without affecting or impairing Lender’s
Lien on the Collateral, or the remainder thereof, as security for the full amount of the Loan
unpaid and the Obligations, subject to Section 13.11 hereof, Agent may from time to time, without
notice: (a) release any Person liable for the payment of the Loan, (b) extend the time or otherwise
alter the terms of payment of the Loan, (c) accept additional security for the Obligations of any
kind, including deeds of trust or mortgages and security agreements, (d) alter, substitute or
release any property securing the Obligations, (e) realize upon any collateral for the payment of
all or any portion of the Loan in such order and manner as it may deem fit, or (f) join in any
subordination or other agreement affecting this Agreement or the lien or charge thereof.

          10.9 Assignment of Lender’s Interest. Each Lender shall have the right to assign its
Loans and all or any portion of its rights in or pursuant to this Agreement or any of the Loan
Documents to any subsequent holder or holders of its Note or the Obligations evidenced thereby,
provided that each Lender shall give Agent concurrent written notice of each such assignment.

          10.10 Notice to Purchaser. Borrower authorizes any of Agent, Lockbox Agent or
Servicing Agent (but none of Agent, Lockbox Agent nor Servicing Agent shall be obligated) to
communicate at any time and from time to time with any Purchaser or any other Person primarily or
secondarily liable under a Pledged Note Receivable with regard to the Lien of Agent thereon and any
other matter relating thereto, and by no later than the Effective Date, Borrower shall deliver to
Agent a notification to the Purchasers executed in blank by Borrower and in form acceptable to
Agent, pursuant to which the Purchasers (or other obligors) may be directed to remit all payments
in respect of the Collateral as Agent may require.

          10.11 Collection of the Notes. Borrower hereby directs and authorizes each party
liable for the payment of the Pledged Notes Receivable, and by no later than the Effective Date
shall direct in writing each such party, to pay each installment thereon to Lockbox Agent pursuant
to the Lockbox Agreement, unless and until directed otherwise by written notice from Agent or, at
Agent’s direction, from Borrower, after which such parties are and shall be directed to make all
further payments on the Pledged Notes Receivable in accordance with the directions of Agent.

          Following the occurrence of an Event of Default, Agent shall have the right to require that
all payments becoming due under the Pledged Notes Receivable be paid directly to Agent as agent for
Lenders, and Agent is hereby authorized to receive, collect, hold and apply the same in accordance
with the provisions of this Agreement. In the event that following the occurrence of an Event of
Default, Agent or Lockbox Agent does not receive any installment of principal or interest due and
payable under any of the Pledged Notes Receivable on or prior to the date upon which such
installment becomes due, Agent may, at its election (but without any obligation to do so), give or
cause Lockbox Agent to give notice of such default to the defaulting party or parties, and Agent
shall have the right (but not the obligation), subject to the terms of such Notes, to accelerate
payment of the unpaid balance of any of the Pledged Notes Receivable in default and

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to foreclose each of the Mortgages securing the payment thereof, and to enforce any other
remedies available to the holder of such Pledged Notes Receivable with respect to such default.
Borrower hereby further authorizes, directs and empowers Agent (and Lockbox Agent or any other
Person as may be designated by Agent in writing) to collect and receive all checks and drafts
evidencing such payments and to endorse such checks or drafts in the name of Borrower and upon such
endorsements, to collect and receive the money therefor. The right to endorse checks and drafts
granted pursuant to the preceding sentence is irrevocable by Borrower, and the banks or banks
paying such checks or drafts upon such endorsements, as well as the signers of the same, shall be
as fully protected as though the checks or drafts have been endorsed by Borrower.

          10.12 Power of Attorney. Borrower does hereby irrevocably constitute and appoint
Agent as Borrower’s true and lawful agent and attorney-in-fact, with full power of substitution,
for Borrower and in Borrower’s name, place and stead, or otherwise, to (a) endorse any checks or
drafts payable to Borrower in the name of Borrower and in favor of Agent on behalf of each Lender
as provided in Section 10.11 above, (b) to demand and receive from time to time any and all
property, rights, titles, interests and liens hereby sold, assigned and transferred, or intended so
to be, and to give receipts for same, (c) from time to time to institute and prosecute in Agent’s
own name any and all proceedings at law, in equity, or otherwise, that Agent may deem proper in
order to collect, assert or enforce any claim, right or title, of any kind, in and to the property,
rights, titles, interests and liens hereby sold, assigned or transferred, or intended so to be, and
to defend and compromise any and all actions, suits or proceedings in respect of any of the said
property, rights, titles, interests and liens, (d) upon an Event of Default to change Borrower’s
post office mailing address, and (e) generally to do all and any such acts and things in relation
to the Collateral as Agent shall in good faith deem advisable. Borrower hereby declares that the
appointment made and the powers granted pursuant to this Section 10.12 are coupled with an interest
and are and shall be irrevocable by Borrower in any manner, or for any reason, unless and until a
release of the same is executed by Agent and duly recorded in the appropriate public records of
Dallas County, Texas.

          10.13 Relief from Automatic Stay, Etc. To the fullest extent permitted by law, in the
event Borrower shall make application for or seek relief or protection under the federal bankruptcy
code (“Bankruptcy Code”) or other Debtor Relief Laws, or in the event that any involuntary petition
is filed against Borrower under such Code or other Debtor Relief Laws, and not dismissed with
prejudice within 45 days, the automatic stay provisions of Section 362 of the Bankruptcy Code are
hereby modified as to Agent and each Lender to the extent necessary to implement the provisions
hereof permitting set-off and the filing of financing statements or other instruments or documents;
and Agent and each Lender shall automatically and without demand or notice (each of which is hereby
waived) be entitled to immediate relief from any automatic stay imposed by Section 362 of the
Bankruptcy Code or otherwise, on or against the exercise of the rights and remedies otherwise
available to Lenders as provided in the Loan Documents.

          10.14 Standby Servicer. Borrower acknowledges and agrees that upon written notice
from Agent, to be given at any time during the term of the Loan in Agent’s sole and absolute
discretion, the Servicing Agent shall be replaced by the Standby Servicer, or such other servicing
entity as may be selected by Agent in its sole and absolute discretion, for the purpose of
servicing all Notes Receivable comprising the Collateral.

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Section 11-Term Of Agreement

          This Agreement shall continue in full force and effect and the security interests granted
hereby and the duties, covenants and liabilities of Borrower hereunder and all the terms,
conditions and provisions hereof relating thereto shall continue to be fully operative until all of
the Obligations have been satisfied in full. Borrower expressly agrees that if Borrower makes a
payment to Agent on behalf of any Lender, which payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, or otherwise required to be repaid to a
trustee, receiver or any other party under any Debtor Relief Laws, state or federal law, common law
or equitable cause, then to the extent of such repayment, the Obligations or any part thereof
intended to be satisfied and the Liens provided for hereunder securing the same shall be revived
and continued in full force and effect as if said payment had not been made.

Section 12-Miscellaneous

          12.1 Notices. All notices, requests and other communications to any party hereunder
shall be in writing and shall be given to such party at its address set forth below or at such
other address as such party may hereafter specify for the purpose of notice to Agent, any Lender or
Borrower. Each such notice, request or other communication shall be effective (a) if given by
mail, when such notice is deposited in the United States Mail with first class postage prepaid,
addressed as aforesaid, provided that such mailing is by registered or certified mail, return
receipt requested, (b) if given by overnight delivery, when deposited with a nationally recognized
overnight delivery service such as Federal Express or Airborne with all fees and charges prepaid,
addressed as provided below, or (c) if given by any other means, when delivered at the address
specified in this Section 12.1.

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	 	If to Borrower:
	 	Silverleaf Resorts, Inc.
	 

	 	 	 	1221 Riverbend Drive, Suite 120
	 

	 	 	 	Dallas, TX 75221
	 

	 	 	 	Attn: Mr. Robert Mead, CEO
	 
	 	 	 	 
	 

	 	With a Copy to:
	 	Meadows, Owens, Collier, Reed, Cousins and Blau
	 

	 	 	 	3700 Nations Bank Plaza
	 

	 	 	 	901 Main St.
	 

	 	 	 	Dallas, TX 75202
	 

	 	 	 	Attn: George R. Bedell, Esq.
	 
	 	 	 	 
	 

	 	If to Lender:
	 	Textron Financial Corporation
	 

	 	 	 	40 Westminster Street
	 

	 	 	 	Providence, Rhode Island 02903
	 

	 	 	 	Attention: Accounting Department/Collections
	 
	 	 	 	 
	 

	 	If to Agent:
	 	Textron Financial Corporation
	 

	 	 	 	40 Westminster Street
	 

	 	 	 	Providence, Rhode Island 02903
	 

	 	 	 	Attention: Accounting Department / Collections
	 
	 	 	 	 
	 

	 	With a copy to:
	 	Textron Financial Corporation
	 

	 	 	 	P.O. Box 6687
	 

	 	 	 	Providence, Rhode Island 02940-6687
	 

	 	 	 	Attention: Division Counsel (RRD)
	 
	 	 	 	 
	 

	 	And to:
	 	Textron Financial Corporation
	 

	 	 	 	Resort Finance Division
	 

	 	 	 	45 Glastonbury Blvd.
	 

	 	 	 	Glastonbury, CT 06033-4450
	 

	 	 	 	Attn: Division President

          Notwithstanding the foregoing, copies of the requests or notices from Borrower to Lender or
Agent which are specified in the Sections of this Agreement listed below shall not be delivered to
Providence, Rhode Island as provided above, but rather shall be delivered in accordance with this
Section 12.1 to Textron Financial Corporation, Resort Finance Division, 45 Glastonbury Blvd.,
Glastonbury, CT 06033-4450, Attention: Nicholas L. Mecca, Division President. The applicable
Sections of this Agreement are Section 5.1(a) Request for Advances, and Section 12.10 Return of
Notes Receivable. In addition, all documents, instruments and other items to be delivered to
Lenders from time to time pursuant to this Agreement shall be delivered

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to Agent’s office at Resort Finance Division, 45 Glastonbury Blvd., Glastonbury, CT
06033-4450.

          12.2 Survival. All representations, warranties, covenants and agreements made by
Borrower herein, in the other Loan Documents or in any other agreement, document, instrument or
certificate delivered by or on behalf of Borrower under or pursuant to the Loan Documents shall be
considered to have been relied upon by Lenders and shall survive the delivery to Lenders of such
Loan Documents (and each part thereof), regardless of any investigation made by or on behalf of
Lenders.

          12.3 Governing Law. THIS AGREEMENT 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.

          12.4 Limitation on Interest. Agent, each Lender and Borrower intend to comply at all
times with applicable usury laws. All agreements between Agent, each Lender and Borrower, whether
now existing or hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of demand or acceleration of the maturity of the Note or otherwise,
shall the interest contracted for, charged, received, paid or agreed to be paid to any Lender
exceed the highest lawful rate permissible under applicable usury laws. If, from any circumstance
whatsoever, fulfillment of any provision hereof, of the Note or of any other Loan Documents shall
involve transcending the limit of such validity prescribed by any law which a Court of competent
jurisdiction may deem applicable hereto, then ipso facto, the obligation to be fulfilled shall be
reduced to the limit of such validity; and if from any circumstance Agent or any Lender shall ever
receive anything of value deemed interest by applicable law which would exceed the highest lawful
rate, such amount which would be excessive interest shall be applied to the reduction of the
principal of Loan and not to the payment of interest, or if such excessive interest exceeds the
unpaid balance of principal of the Loan, such excess shall be refunded to Borrower. All interest
paid or agreed to be paid to Lenders shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full period until payment in full of the
principal so that the interest on the Loan for such full period shall not exceed the highest lawful
rate. Borrower agrees that in determining whether or not any interest payment under the Loan
Documents exceeds the highest lawful rate, any non-principal payment (except payments specifically
described in the Loan Documents as “interest”) including without limitation, prepayment fees and
late charges, shall to the maximum extent not prohibited by law, be an expense, fee, premium or
penalty rather than interest. Agent and each Lender hereby expressly disclaim any intent to
contract for, charge or receive interest in an amount which exceeds the highest lawful rate. The
provisions of the Note, this Agreement, and all other Loan Documents are hereby modified to the
extent necessary to conform with the limitations and provisions of this Section, and this Section
shall govern over all other provisions in any document or agreement now or hereafter existing.
This Section shall never be superseded or waived unless there is a written document executed by
Agent, each Lender and Borrower, expressly declaring the usury limitation of this Agreement to be
null and void, and no other method or language shall be effective to supersede or waive this
paragraph.

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          12.5 Invalid Provisions. If any provision of this Agreement or any of the other Loan
Documents is held to be illegal, invalid or unenforceable under present or future laws effective
during the term thereof, such provision shall be fully severable, this Agreement and the other Loan
Documents shall be construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof or thereof, and the remaining provisions hereof or thereof shall
remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance therefrom. Furthermore, in lieu of such illegal, invalid or
unenforceable provision there shall be added automatically as a part of this Agreement and/or the
Loan Documents (as the case may be) a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

          12.6 Successors and Assigns. This Agreement and the other Loan Documents shall be
binding upon and inure to the benefit of Borrower, Agent and each Lender and their respective
successors and assigns; provided that Borrower may not transfer or assign any of its rights or
obligations under this Agreement, the Commitment or the other Loan Documents without the prior
written consent of Agent. This Agreement and the transactions provided for or contemplated
hereunder or under any of the Loan Documents are intended solely for the benefit of the parties
hereto. No third party shall have any rights or derive any benefits under or with respect to this
Agreement, the Commitment or the other Loan Documents except as provided in advance in a writing
signed on behalf of Agent and each Lender.

          12.7 Amendment. This Agreement may not be amended or modified, and no term or
provision hereof may be waived, except by written instrument signed by Borrower and Agent on behalf
of itself and Lenders.

          12.8 Counterparts; Effectiveness. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the signature thereto
and hereto were on the same instrument. This Agreement shall become effective upon Agent’s receipt
of one or more counterparts hereof signed by Borrower.

          12.9 Lenders and Agent Not Fiduciaries. The relationship between Borrower, Agent and
each Lender is solely that of debtor and creditor, and Agent and Lenders have no fiduciary or other
special relationship with Borrower, and no term or provision of any of the Loan Documents shall be
construed so as to deem the relationship between Borrower, Agent and Lenders to be other than that
of debtor and creditor.

          12.10 Return of Notes Receivable.

              (a) In the event Borrower complies with its Obligations under Section 2.5(b) of this
Agreement with respect to Pledged Notes Receivable pursuant to which a default by the
Purchaser thereof has occurred, and Borrower thereafter desires to enforce such Note
Receivable against the Purchaser thereof, then provided that no Event of Default has
occurred which has not been cured to Agent’s satisfaction (as evidenced by a written
acceptance of such cure executed by Agent), and no event has occurred which with notice, the
passage of time or both, would constitute an Event of Default, then within thirty (30) days
after its receipt of a written request from Borrower, Agent shall deliver such ineligible
Note Receivable to Borrower, provided that such delivery shall be

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for the sole purpose of enforcing Agent’s rights thereunder and Agent, notwithstanding
such delivery, shall continue to have, on behalf of Lenders, a first priority security
interest in any such note.

              (b) In the event that all Obligations hereunder are fully satisfied, then within a
reasonable time thereafter, Agent shall endorse the Pledged Notes Receivable “Pay to the
order of Silverleaf Resorts, Inc. without recourse”, and deliver such Pledged Notes
Receivable, together with any other nonrecourse Collateral reassignment documents requested
and prepared by Borrower, at Borrower’s sole cost and expense.

          12.11 Accounting Principles. Where the character or amount of any asset or liability
or item of income or expense is required to be determined or any consolidation or other accounting
computation is required to be made for the purposes of this Agreement, the same shall be determined
or made in accordance with GAAP consistently applied at the time in effect, to the extent
applicable, except where such principles are inconsistent with the requirements of this Agreement.

          12.12 Total Agreement. This Agreement and the other Loan Documents, including the
Exhibits and Schedules to them, is the entire agreement between the parties relating to the subject
matter hereof, incorporates or rescinds all prior agreements and understandings between the parties
hereto relating to the subject matter hereof, cannot be changed or terminated orally or by course
of conduct, and shall be deemed effective as of the date it is accepted by Agent at the offices set
forth above. The documents evidencing the Inventory Loan shall remain in full force and effect.

          12.13 Litigation. TO THE FULLEST EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH CANNOT
BE WAIVED, BORROWER, AGENT AND EACH LENDER HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND
IRREVOCABLY WAIVE ANY AND ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR
DEFEND OR CLARIFY ANY RIGHT, POWER, REMEDY OR DEFENSE ARISING OUT OF OR RELATED TO THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREIN OR THEREIN, WHETHER SOUNDING IN
TORT OR CONTRACT OR OTHERWISE, OR WITH RESPECT TO ANY COURSE OF CONDUCT, COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY; AND EACH AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A JUDGE AND NOT BEFORE A JURY. EACH OF BORROWER, AGENT
AND EACH LENDER FURTHER WAIVES ANY RIGHT TO SEEK TO CONSOLIDATE ANY SUCH LITIGATION IN WHICH A JURY
TRIAL HAS BEEN WAIVED WITH ANY OTHER LITIGATION IN WHICH A JURY TRIAL CANNOT OR HAS NOT BEEN
WAIVED. FURTHER, BORROWER HEREBY CERTIFIES THAT NO REPRESENTATIVE OR AGENT OF AGENT OR ANY LENDER,
NOR AGENT’S OR ANY LENDER’S COUNSEL HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT AGENT OR ANY
LENDER WOULD NOT, IN THE EVENT OF SUCH LITIGATION, SEEK TO ENFORCE THIS WAIVER OF RIGHT TO JURY
TRIAL PROVISION. BORROWER ACKNOWLEDGES THAT THE PROVISIONS OF THIS SECTION ARE A MATERIAL

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INDUCEMENT TO AGENT’S AND EACH LENDER’S ACCEPTANCE OF THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.

          The waiver and stipulations of Borrower, Agent, and each Lender in this Section 12.13 shall
survive the final payment or performance of all of the Obligations of Borrower and the resulting
termination of this Agreement.

          12.14 Incorporation of Exhibits. This Agreement, together with all Exhibits and
Schedules hereto, constitute one document and agreement which is referred to herein by the use of
the defined term “Agreement.” Such Exhibits and Schedules are incorporated herein as to fully set
out in this Agreement. The definitions contained in any part of this Agreement shall apply to all
parts of this Agreement.

          12.15 Consent to Advertising and Publicity of Timeshare Documents. Borrower hereby
consents that Agent and each Lender may issue and disseminate to the public information describing
the credit accommodation entered into pursuant to this Agreement, including the names and addresses
of Borrower and any subsidiaries and Affiliates, the amount and a general description of Borrower’s
business.

          12.16 Directly or Indirectly. Where any provision in the Agreement refers to action
to be taken by any Person, or which such Person is prohibited from taking, such provisions shall be
applicable whether such action is taken directly or indirectly by such Person.

          12.17 Headings. Section headings have been inserted in the Agreement as a matter of
convenience of reference only; such section headings are not a part of the Agreement and shall not
be used in the interpretation of this Agreement.

          12.18 Gender and Number. Words of any gender in this Agreement shall include each
other gender and the singular shall mean the plural and vice versa where appropriate.

Section 13-Agent

          13.1 Authorization and Action. Each Lender hereby accepts the appointment of and
irrevocably (but subject to Section 13.8) authorizes Agent to take such action as Agent on its
behalf and to exercise such powers as are expressly delegated to Agent by the terms hereof,
together with such powers as are reasonably incidental thereto. Agent shall not be required to
take any action which exposes Agent to personal liability or which is contrary to this Agreement or
applicable law. Agent agrees to give to each Lender prompt notice of each notice given to it by
Borrower pursuant to the terms of this Agreement. The appointment and authority of Agent hereunder
shall terminate upon the payment of the Obligations in full.

          13.2 Nature of Agent’s Duties. Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement or in the other Loan Documents. The duties of Agent
shall be mechanical and administrative in nature. Agent shall not have by reason of this Agreement
a fiduciary relationship in respect of any Lender. Nothing in this Agreement or any of the Loan
Documents, express or implied, is intended to or shall be construed to impose upon Agent any
obligations in respect of this Agreement or any of the Loan Documents except as expressly set forth
herein or therein. Agent shall not have any duty or responsibility, either

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initially or on a continuing basis, to provide any Lender with any credit or other information
with respect to Borrower, whether coming into its possession before the date hereof or at any time
or times thereafter (except as expressly set forth in this Agreement). If Agent seeks the consent
or approval of Lenders, to the taking or refraining from taking any action hereunder, Agent shall
send notice thereof to each Lender.

          13.3 UCC Filings. Each of Borrower, Agent and Lender expressly recognizes and agrees
that Agent shall be listed as the assignee or secured party of record on the various UCC filings
required to be made hereunder in order to perfect the grant of a security interest in the
Collateral herein for the benefit of Lenders, that such listing shall be for administrative
convenience only in creating a single secured party to take certain actions hereunder on behalf of
the holders of the Obligations, and that such listing will not affect in any way the status of such
holders as the beneficial holders of such security interest. In addition, such listing shall
impose no duties on Agent other than those expressly and specifically undertaken in accordance with
this Section 13.

          13.4 Agent’s Reliance, Etc. Neither Agent nor any of its directors, officers, agents
or employees shall be liable for any action taken or omitted to be taken by it or them as Agent
under or in connection with this Agreement (including Agent’s servicing, administering or
collecting Receivables) except for its or their own gross negligence or willful misconduct.
Without limiting the foregoing, Agent: (i) may consult with legal counsel (including counsel for
Borrower), independent public accountants and other experts selected by it and shall not be liable
for any action taken or omitted to be taken in good faith by it in accordance with the advice of
such counsel, accountants or experts; (ii) makes no warranty or representation to Lender and shall
not be responsible to any Lender for any statements, warranties or representations made in or in
connection with this Agreement; (iii) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this Agreement on the
part of Borrower or to inspect the property (including the books and records) of Borrower (except
as otherwise expressly set forth in this Agreement); (iv) shall not be responsible to any Lender
for the due execution, legality, validity, enforceability, genuineness, sufficiency, or value of
this Agreement, or any other instrument or document furnished pursuant hereto, or any certificate,
report, statement or other document referred to or provided for in, or received by Agent under or
in connection with, the Loan Documents, or for any failure of Borrower or any of its Affiliates to
perform its obligation under the Loan Documents; and (v) shall incur no liability under or in
respect of this Agreement by acting upon any notice (including notice by telephone), consent,
certificate or other instrument or writing (which may be by telex or telecopier) believed by it to
be genuine and to be or to have been signed or sent by the proper party or parties. Agent may, but
shall not be required to, at any time request instructions from Lenders with respect to any actions
or approvals which by the terms of this Agreement or of any of the other Loan Documents Agent is
permitted or required to take or to grant, and Agent shall be absolutely entitled to refrain from
taking any action or to withhold any approval and shall not be under any liability whatsoever to
any Person for refraining from any action or withholding any approval under any of the Loan
Documents until it shall have received such instructions from the requisite Lender, as applicable
in accordance with this Agreement. Without limiting the foregoing, Lender shall not have any right
of action whatsoever against Agent as a result of Agent acting or refraining from acting under this
Agreement or any of the other Loan Documents in accordance with the instructions of the requisite
Lender as applicable in accordance with this Agreement.

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Agent shall be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other document or conversation reasonably
believed by it or them to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel (including counsel to
Borrower), independent accountants and other experts selected by Agent.

          13.5 Agent and Affiliates. To the extent that Agent or any of its Affiliates are or
shall become Lenders hereunder, Agent or such Affiliate, in such capacity, shall have each and
every right and power under this Agreement as would any other Lender hereunder (including the right
to vote upon any matter upon which any of Lenders are entitled to vote) and, without exception, may
exercise the same as though it were not an Agent. Agent and its Affiliates may engage in any kind
of business with Borrower, any of its Affiliates and any Person who may do business with or own
securities of Borrower or any of its Affiliates, all as if it were not an Agent hereunder and
without any duty to account therefor to Lenders.

          13.6 Credit Decision. Independently, and without reliance upon Agent, each Lender
has, to the extent it deems appropriate, made and shall continue to make (a) its own independent
investigation of the financial affairs and business affairs of Borrower in connection with any
action or inaction with respect to the transactions contemplated herein, and (b) its own evaluation
of the creditworthiness of Borrower and of the value of the Collateral, and, except as expressly
provided in this Agreement, Agent has had and shall have no duty or responsibility to provide any
Lender with any credit or other information with respect thereto. Agent shall not be responsible
to any Lender for any recitals, statements, representation or warranties herein or in any document,
certificate or other writing delivered in connection herewith (unless made by Agent) or for the
execution, effectiveness, genuineness, validity, enforceability, collectibility, priority or
sufficiency of this Agreement (except with respect to Agent’s obligations hereunder) or the Loan
Documents or the financial condition of Borrower or the value of the Collateral. Except as
expressly herein provided with respect to its duties as agent, Agent shall not be required to make
any inquiry concerning either the performance or observance of any of the terms, provisions or
conditions of this Agreement or the Loan Documents, the financial condition of Borrower, or the
existence or possible existence of any Event of Default.

          13.7 Indemnification. Each Lender agrees to indemnify Agent (to the extent not
reimbursed by Borrower), ratably in accordance with each Lender’s Pro Rata Percentage, from and
against any and all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, or disbursements of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against Agent in any way relating to or arising out of this Agreement or
any action taken or omitted by Agent under this Agreement; provided, however, that no Lender shall
be liable for any portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses, or disbursements resulting from Agent’s gross negligence or
willful misconduct. Without limiting the generality of the foregoing, each Lender agrees to
reimburse Agent (to the extent not reimbursed by Borrower) ratably in accordance with Lender’s Pro
Rata Percentage, promptly upon demand, for any out-of-pocket expenses (including reasonable counsel
fees) incurred by Agent in connection with the administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in
respect of its rights or responsibilities under, this Agreement.

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The rights of Agent under this Section 13.7 shall survive the termination of this Agreement.
For purposes of this paragraph, the term “Agent” shall include Agent, its affiliates and their
respective officers, directors, employees and agents.

     13.8 Successor Agent. Agent may resign at any time by giving thirty days notice
thereof to Lenders and Borrower. Upon any such resignation Lenders, including TFC, shall have the
right to appoint a successor Agent, and such resignation shall not be effective until such
successor Agent is appointed and has accepted such appointment. If no successor Agent shall have
been so appointed and accepted such appointment within seventy-five (75) days after Agent’s giving
of notice of resignation, then Agent may, on behalf of Lenders, appoint a successor Agent, which
successor Agent shall be experienced in the types of transactions contemplated by this Agreement.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all of the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from all further duties
and obligations under this Agreement. After any retiring Agent’s resignation hereunder as Agent,
the provisions of this Section 13 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement.

     13.9 Duty of Care. Agent shall endeavor to exercise the same care in its
administration of the Loan Documents as it exercises with respect to similar transactions in which
it is involved and where no other co-lenders or participants are involved; provided that the
liability of Agent for failing to do so shall be limited as provided in the preceding paragraphs of
this Section 13.

     13.10 Delegation of Agency.

     (a) If at any time or times it shall be necessary or prudent in connection with the
exercise or protection of Agent’s rights hereunder in order to conform to any law of any
jurisdiction in which any of the Collateral shall be located, or Agent shall be advised by
counsel that it is so necessary or prudent in the interest of Lenders, or Agent shall deem
it necessary for its own protection in the performance of its duties hereunder Agent and, to
the extent required by Agent, Borrower shall execute and deliver all instruments and
agreements reasonably necessary or proper to constitute another bank or trust company, or
one or more individuals approved by Agent (each an “Approved Delegate”), either to act as
co-agent or co-agents or trustee of all or any of the Collateral, jointly with Agent
originally named herein or any successor, or to act as separate agent or agents or trustee
of any such Collateral. Every separate agent and every co-agent and every trustee, other
than any agent which may be appointed as successor to Agent, shall, to the extent permitted
by applicable law, be appointed to act and be such, subject to the following provisions and
conditions, namely:

(i) except as otherwise provided herein, all rights, remedies, powers,
duties and obligations conferred upon, reserved or imposed upon Agent in
respect of the custody, control and management of moneys, paper or
securities shall be exercised solely by Agent hereunder;

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(ii) all rights, remedies, powers, duties and obligations conferred upon,
reserved to or imposed upon Agent hereunder shall be conferred, reserved or
imposed and exercised or performed by Agent except to the extent that the
instrument appointing such separate agent or separate agents or co-agent or
co-agents or trustee shall otherwise provide, and except to the extent that
under any law of any jurisdiction in which any particular act or acts are to
be performed, Agent shall be incompetent or unqualified to perform such act
or acts, in which event such rights, remedies, powers, duties and
obligations shall be exercised and performed by such separate agents or
co-agent or co-agents to the extent specifically directed in writing by
Agent;

(iii) no power given thereby to, or which it is provided hereby may be
exercised by, any such separate agent or separate agents or co-agent or
co-agents or trustee shall be exercised hereunder by such separate agent or
separate agents or co-agent or co-agents or trustee except jointly with, or
with the consent in writing of, anything herein contained to the contrary
notwithstanding;

(iv) no separate agent or co-agent or trustee constituted under this Section
13.10 shall be personally liable by reason of any act or omission of any
other agent, separate agent, co-agent or trustee hereunder; and

(v) Agent, at any time by an instrument in writing, executed by it, may
accept the resignation of or remove any such separate agent or co-agent or
trustee of Agent, and in that case, by an instrument in writing executed by
Agent and Borrower (to the extent necessary or requested by Agent) jointly
may appoint a successor to such separate agent or co-agent or trustee, as
the case may be, anything therein contained to the contrary notwithstanding.
In the event that Borrower shall not have joined in the execution of any
such instrument with a Person or entity within ten (10) days after the
receipt of a written request from Agent to do so, Agent, acting alone, may
appoint a successor and may execute any instrument in connection therewith,
and Borrower hereby irrevocably appoints Agent its agent and attorney to act
for it in such connection in either of such contingencies.

     In the event that Borrower shall not have joined in the execution of such instruments or
agreements with any Approved Delegate within thirty (30) Business Days after the receipt of a
written request from Agent to do so, Borrower hereby irrevocably appoints Agent as its agent and
attorney to act for it under the foregoing provisions of this Section 13.10 in such contingency, it
being understood that the power of attorney granted hereunder is coupled with an interest.

     (b) Agent may execute any of its duties under the Loan Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel, and other specialists and
advisors (including affiliates of such Agent) selected by it, concerning all

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matters pertaining to such duties. Agent shall not be responsible for the negligence
or misconduct of any such agents, attorneys-in-fact, counsel and other specialists and
advisors selected by it with reasonable care.

     13.11 Agent’s Responsibilities.

     (a) Each subsequent holder of any Note by its acceptance thereof irrevocably joins in
the designation of TFC as agent for Lenders as provided herein with the same force and
effect as if it were an original Lender hereunder and signatory hereto. TFC hereby accepts
such designation and appointment as agent. Agent, acting as such under the provisions of
this Agreement, or under any other instrument or document delivered pursuant hereto, shall
not be liable or responsible, directly or indirectly, for any action taken, or omitted to be
taken, by it in good faith, nor shall Agent be liable or responsible for the consequences of
any oversight or error of judgment on its part, but Agent shall only be liable or
responsible for any loss suffered by any of Lenders hereunder provided such loss was caused
by Agent’s gross negligence or willful misconduct. Agent shall not, by any action or
inaction hereunder, be deemed to make any representation or warranty regarding the legality,
legal effect or sufficiency of any act of Borrower in connection with, or under any of the
provisions of, this Agreement, or any instrument or document delivered pursuant thereto, or
the validity or enforceability of any instrument or document furnished to Agent pursuant to
this Agreement. Agent shall have no liability or responsibility in connection with the
collection or payment of any sums due to Lenders by Borrower, the sole responsibility of
Agent being to account to Lenders only for monies actually received by it. Agent shall have
no obligation to make any application of any funds received by it until such funds are
immediately available at Agent’s office. Any monies received by Agent need not be
segregated from other funds except to the extent required by law, and Agent shall not be
liable for interest on any funds received by it. Agent shall not be charged with knowledge
of any facts which would prohibit the making of any payment of monies in accordance with the
provisions of this Agreement unless and until Agent shall have received written notice
thereof at its office from Borrower or any Lender. The duties of Agent shall be mechanical
and administrative in nature, Agent shall not, by reason of this Agreement, be deemed a
fiduciary in respect of Lenders, and nothing in this Agreement shall impose upon Agent any
obligations in respect of this Agreement except as expressly herein set forth.

     (b) Agent shall have the right to exercise all the rights granted to, and exercisable
by, it under this Agreement and any instrument or document delivered pursuant to this
Agreement, in such manner from time to time, as Agent in its sole discretion, shall deem
proper.

     (c) Agent agrees to provide each Lender with notice (and copies of documents, as
appropriate) of the any amendment waiver or modification of the terms of this Agreement
entered in accordance with Section 13.11(d);

     (d) Except as otherwise provided in this Agreement, Agent shall be entitled, at its
option, from time to time and at any time, to enter into any amendment of, or waive
compliance with the terms of this Agreement without obtaining prior approval

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from any Lender, provided that, without the prior approval of each Lender in each
instance, Agent may not take any of the following actions with respect to the Loan: (i)
reduce the principal amount of any Loans; (ii) expressly change the advance rate; (iii)
change the definition of Eligible Notes Receivable; (iv) decrease the Interest Rate; (v)
extend the Final Maturity Date of the Loan; or (vi) release any material Collateral or any
material third party obligor (except as expressly authorized by this Agreement in the normal
course of Borrower’s business); Notwithstanding the foregoing, Agent may take any such
actions referred to in such preceding sentences and each Lender shall be bound thereby with
the consent of such Lenders (including Agent as a Lender for this purpose) whose total Pro
Rata Payment Percentage is equal to or exceeds sixty-six and two-thirds percent (66 2/3%) of
the outstanding principal balance of the Loan.

     Notwithstanding the foregoing, in the event that a Lender does not consent to any of
the amendments or waivers requiring sixty-six and two-thirds percent (66 2/3%) consent under
the previous paragraph, then such Lender shall not be obligated to fund any additional
Advances hereunder but it shall continue to receive its Pro Rata Payment Percentage of each
repayment of principal and interest on the Loan in accordance with the terms of this
Agreement and shall be repaid in full over a period not to exceed the then existing Final
Maturity Date under the Loan. Furthermore, in the event a Lender does not consent to any
amendment or waivers regarding: (i) reduction of the principal amount of any Loans; (ii)
reduction of the Interest Rate; or (iii) any subordination or release of any material
Collateral, except as set forth in this Agreement or the Loan Documents, then in any of such
events any such modification shall be applicable only to new money advanced by Agent and
such changes shall not be applicable in any way to the existing balance due under the Loan
as of the date of such change. Notwithstanding anything to the contrary contained in this
Section 13.11(d), Agent may, in its sole and absolute discretion, require that the Lenders
(including TFC) unanimously consent to the approval of any such action(s) referred to in
this Section 13.11(d) before any such action(s) is taken. Borrower acknowledges and agrees
that in the event that a Lender does not consent to any of the amendments or waivers
requiring sixty-six and two-thirds percent (66 2/3%) consent under the previous paragraph
and such Lender is not obligated to fund any additional Advances hereunder, Commitment will
be reduced by an amount equal to the amount of any unused portion of such Lender’s
Commitment.

     13.12 Power of Attorney. Each Lender does hereby irrevocably constitute and appoint
Agent as its true and lawful agent and attorney-in-fact, with full power of substitution, for and
in its name, place and stead, or otherwise, to (a) demand and receive from time to time any and all
property, rights, titles, interests and liens hereby sold, assigned and transferred, or intended so
to be, and to give receipts for same, (b) from time to time to institute and prosecute in Agent’s
own name any and all proceedings at law, in equity, or otherwise, that Agent may deem proper in
order to collect, assert or enforce any claim, right or title, of any kind, in and to the property,
rights, titles, interests and liens hereby sold, assigned or transferred, or intended so to be, and
to defend and compromise any and all actions, suits or proceedings in respect of any of the said
property, rights, titles, interests and liens, and (c) generally to do all and any such acts and
things in relation to the Loans, the Collateral and this Agreement as Agent shall in good faith
deem advisable. Each Lender hereby declares that the appointment made and the powers granted

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pursuant to this Section 13.12 are coupled with an interest and are and shall be irrevocable
by it in any manner, or for any reason, unless and until the repayment in full of the Obligation.

     13.13 Ratification and Confirmation. Borrower hereby ratifies, confirms, assumes and
agrees to be bound by all statements, covenants and agreements set forth in the Original Loan
Agreement and the other Loan Documents. Borrower reaffirms, restates and incorporates by reference
all of the covenants and agreements made in the Loan Documents as if the same were made as of this
date. Borrower agrees to pay the Loan and all related expenses, as and when due and payable in
accordance with this 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 Borrower of the Loan and all of the
Obligations, for value received, Borrower unconditionally and irrevocably assigns, pledges and
grants to Agent, and hereby confirms or reaffirm the prior granting to Agent of, a continuing first
priority Lien, mortgage and security interest in and to all of the Collateral, whether now existing
or hereafter acquired. Also, as provided in the Loan Documents, the Loan is and shall be further
secured by the Liens and security interests in favor of Agent in the properties and interests
relating to Additional Eligible Resorts, which now or hereafter serve as collateral security for
any Obligations. On the date hereof and thereafter upon satisfaction of the requirements for
approval by Agent of Additional Eligible Resorts, Borrower shall record, or cause to be recorded,
such mortgages, deeds of trust, deeds to secure debt, assignments, pledges, security agreements and
UCC Financing Statements in the appropriate public records of the state in which each Resort is
located to further evidence and perfect Agent’s Lien on the Collateral. Borrower agrees to deliver
or cause to be delivered by its Affiliates, such mortgages, deeds of trust, deeds to secure debt,
assignments, pledges, security agreements and UCC Financing Statements as Agent may deem necessary
to further evidence and perfect Agent’s Lien on the Collateral.

     13.14 Estoppel. Borrower acknowledges, agrees and confirms that: (a) Advances under
the Original Loan Agreement have been made prior to the date hereof; (b) all such Advances made
prior to the date hereof were made in favor of the Borrower in respect of the Existing Eligible
Resorts; (c) Advances made prior to the date hereof under the Original Loan Agreement are deemed as
having been made for the benefit of Borrower and Borrower acknowledges and agrees that Borrower
received a direct and substantial financial benefit from such Advances and (d) immediately prior to
the date hereof, and without giving effect to any Advances that may be made pursuant to this
Agreement, the status of the Loan, including the outstanding principal balance thereof is as
reflected in the Loan Funding Report delivered to and approved by Agent, a copy of which is
attached as Exhibit F.

     The Loan constitutes valuable consideration to Borrower, which consideration is uninterrupted
and continuous since the dates on which the Loan was first made. This Agreement and the other Loan
Documents and the Loan modifications and transactions provided for or contemplated hereunder or
thereunder, shall in no way adversely affect the Lien or perfection or priority of any Lien of
Agent as of the date hereof in and to any Collateral, and are not intended to constitute, and do
not constitute or give rise to, any novation, cancellation or extinguishment of any of Borrower’s
Obligations existing as of the Closing Date to Agent, or of any interests owned or held by Agent
(and not previously released) in and to any of the Collateral; it being the

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intention of the parties that the transactions provided for or contemplated herein shall be
effectuated without any interruption in the continuity of the value and consideration received by
Borrower, and of the attachment, perfection, priority and continuation in favor of Agent in and to
all Collateral and proceeds.

     13.15 Participation Agreement. Nothing in this Section 13 shall affect or limit any
Participant’s rights or any of the Agent’s obligations under each Participant’s respective
participation agreement with the Agent.

Section 14-Special Conditions

     14.1 Effective Date. BORROWER ACKNOWLEDGES, AGREES AND CONFIRMS THAT THE TERMS AND
CONDITIONS OF THIS AGREEMENT, INCLUDING ANY OBLIGATION OF LENDERS TO MAKE ANY ADVANCE HEREUNDER,
SHALL NOT BECOME EFFECTIVE UNTIL THE EFFECTIVE DATE, AS SUCH TERM IS HEREINAFTER DEFINED. FOR
PURPOSES OF THIS AGREEMENT, THE TERM “EFFECTIVE DATE” SHALL MEAN THE DATE ON WHICH AGENT
DETERMINES, IN ITS SOLE AND ABSOLUTE DISCRETION, THAT EACH OF THE CONDITIONS SET FORTH IN SECTION 4
HEREOF, EXCEPT FOR SECTION 4.1(g), HAVE BEEN SATISFIED. IN THE EVENT THAT THE EFFECTIVE DATE DOES
NOT OCCUR ON OR BEFORE AUGUST 30, 2005, THEN THIS AGREEMENT, AND ALL OF THE OBLIGATIONS OF AGENT
AND LENDERS HEREUNDER, INCLUDING THE OBLIGATION TO MAKE ANY ADVANCE HEREUNDER SHALL BE VOID AB
INITIO, AS IF THIS AGREEMENT WAS NEVER ENTERED INTO. IN SUCH EVENT, THE LOAN, AND THE RIGHTS AND
OBLIGATIONS OF BORROWER WITH RESPECT THERETO, SHALL BE GOVERNED IN ALL RESPECTS BY THE TERMS AND
CONDITIONS SET FORTH IN THE ORIGINAL LOAN AGREEMENT. BORROWER EXPRESSLY ACKNOWLEDGES, AGREES AND
CONFIRMS THAT TIME IS OF THE UTMOST ESSENCE WITH RESPECT TO THE EFFECTIVE DATE OCCURRING ON OR
BEFORE AUGUST 30, 2005.

     14.2 Release. IN ORDER TO INDUCE AGENT, LENDERS AND PARTICIPANTS TO ENTER INTO THIS
AGREEMENT, BORROWER ACKNOWLEDGES AND AGREES THAT: (i) BORROWER HAS NO CLAIM OR CAUSE OF ACTION
AGAINST AGENT, ANY LENDER OR ANY PARTICIPANT (OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS,
EMPLOYEES OR AGENTS); (ii) BORROWER HAS NO OFFSET RIGHT, COUNTERCLAIM OR DEFENSE OF ANY KIND
AGAINST ANY OF ITS OBLIGATIONS, INDEBTEDNESS OR LIABILITIES TO AGENT, ANY LENDER OR ANY
PARTICIPANT; AND (iii) EACH OF AGENT, LENDERS AND PARTICIPANTS HAS HERETOFORE PROPERLY PERFORMED
AND SATISFIED IN A TIMELY MANNER ALL OF ITS OBLIGATIONS TO BORROWER. BORROWER WISHES TO ELIMINATE
ANY POSSIBILITY THAT ANY PAST CONDITIONS, ACTS, OMISSIONS, EVENTS, CIRCUMSTANCES OR MATTERS WOULD
IMPAIR OR OTHERWISE ADVERSELY AFFECT AGENT’S, ANY OF LENDERS’ OR ANY OF PARTICIPANTS’ RIGHTS,
INTERESTS, CONTRACTS, COLLATERAL SECURITY OR REMEDIES.

88

 

     THEREFORE, BORROWER UNCONDITIONALLY RELEASES, WAIVES AND FOREVER DISCHARGES (A) ANY AND ALL
LIABILITIES, OBLIGATIONS, DUTIES, PROMISES OR INDEBTEDNESS OF ANY KIND OF AGENT, ANY LENDER OR ANY
PARTICIPANT TO BORROWER, EXCEPT THE OBLIGATIONS TO BE PERFORMED BY AGENT, ANY LENDER OR ANY
PARTICIPANT ON OR AFTER THE DATE HEREOF AS EXPRESSLY STATED IN THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS, AND (B) ALL CLAIMS, OFFSETS, CAUSES OF ACTION, SUITS OR DEFENSES OF ANY KIND WHATSOEVER
(IF ANY), WHETHER ARISING AT LAW OR IN EQUITY, WHETHER KNOWN OR UNKNOWN, WHICH BORROWER MIGHT
OTHERWISE HAVE AGAINST AGENT, ANY LENDER, ANY PARTICIPANT OR ANY OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES OR AGENTS, IN EITHER CASE (A) OR (B), ON ACCOUNT OF ANY PAST OR PRESENTLY
EXISTING CONDITION, ACT, OMISSION, EVENT, CONTRACT, LIABILITY, OBLIGATION, INDEBTEDNESS, CLAIM,
CAUSE OF ACTION, DEFENSE, CIRCUMSTANCE OR MATTER OF ANY KIND.

89

 

     IN WITNESS WHEREOF, Borrower and Agent, for itself and as agent for each of the Lenders, have
caused this Agreement to be duly executed and delivered effective as of the date first above
written.

	 	 	 	 	 
	 	 	BORROWER:
	 
	 	 	 	 
	 	 	SILVERLEAF RESORTS, INC., a Texas corporation
	 
	 	 	 	 
	/S/ K Mikkelsen

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

	 	 	 	 
	Witness

	 	Name:
	 	Harry J. White, Jr.
	 

	 	Title:
	 	CFO

	 	 	 	 	 	 	 
	STATE OF TEXAS

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss:
	COUNTY OF DALLAS

	 	 	)	 	 	 

     The foregoing instrument was acknowledged before me this _8th___day of
_August___, 2005 by _Harry J. White, Jr._, ___CFO___of Silverleaf Resorts,
Inc., a Texas corporation, on behalf of the Corporation.

	 	 	 	 	 
	 	 	 
	 	                                                   /S/ PATRICIA PENNA
 	 
	 	Commissioner of the Superior Court 	 
	 	Notary Public

My Commission Expires: 3/5/06 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	 	LENDER:
	 
	 	 	 	 
	 	 	TEXTRON FINANCIAL CORPORATION,
	 	 	a Delaware corporation
	 
	 	 	 	 
	/S/ ELIZABETH M. ROOT

	 	By:
	 	/S/ JOHN D’ANNIBALE
	 

	 	 	 	 
	 	 	Name: John D’Annibale

	 

	 	Title:
	 	VP

	 	 	 	 	 	 	 
	STATE OF CONNECTICUT

	 	 	)

)	 	 	ss:
	COUNTY OF HARTFORD

	 	 	)	 	 	 

     The foregoing instrument was acknowledged before me this _9th___day of
___August___, 2005 by ___John D’Annibale___, ___VP___of TEXTRON
FINANCIAL CORPORATION, a Delaware corporation, on behalf of the corporation.

	 	 	 	 	 
	 	 	 
	 	                                                        /S/ SEBASTIAN D. GROMOWSKI
 	 
	 	Commissioner of the Superior Court 	 
	 	Notary Public

My Commission Expires: 	 

 

 

	 	 	 	 	 

	 	 	 	 	 
	 	 	AGENT:
	 
	 	 	 	 
	 	 	TEXTRON FINANCIAL CORPORATION,
	 	 	a Delaware corporation
	 	 	as Agent for each Financial Institution listed
	 	 	on Exhibit A
	 
	 	 	 	 
	/s/ Elizabeth M. Root

	 	By:	 	/s/ JOHN D’ANNIBALE
	 

	 	 	 	 
	 

	 	Name:	 	John D’Annibale 
	 

	 	Title:	 	VP 

	 	 	 	 	 	 	 
	STATE OF CONNECTICUT

	 	 	)	 	 	 
	 

	 	 	)	 	 	ss:
	COUNTY OF HARTFORD

	 	 	)	 	 	 

     The foregoing instrument was acknowledged before me this 9th day of August, 2005 by
John D’Annibale, VP of TEXTRON FINANCIAL CORPORATION, a Delaware
corporation, on behalf of the corporation.

	 	 	 
	 

	 	 
	 
	 	/s/ SEBASTIAN D. GROMOWSKI 
	 

	 	Commissioner of the Superior Court
	 

	 	Notary Public
	 

	 	My Commission Expires: 3-31-06

List of Exhibits to Agreement not filed herewith:

Exhibit A Description of Lenders

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