SILVERLEAF RESORTS INC, 10-Q, 1998-08-12

SILVERLEAF RESORTS INC
10-Q, 1998-08-12
HOTELS & MOTELS

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<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 1998

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________________ to __________________

Commission file number: 001-13003

SILVERLEAF RESORTS, INC.
(Exact name of registrant as specified in its charter)

TEXAS 75-2259890
(State of incorporation) (I.R.S. Employer
Identification No.)

1221 RIVERBEND DRIVE, SUITE 120
DALLAS, TEXAS 75247
(Address of principal executive offices, including zip code)

214-631-1166
(Registrant's telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No

Number of shares of common stock outstanding of the issuer's Common
Stock, par value $0.01 per share, as of August 12, 1998: 13,017,717

<PAGE> 2
SILVERLEAF RESORTS, INC.

INDEX

<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION (Unaudited)

Item 1. Condensed Consolidated Statements of Income for the three months
and six months ended June 30, 1998 and 1997 ........................... 1
Condensed Consolidated Balance Sheets as of June 30, 1998 and
December 31, 1997 ..................................................... 2
Condensed Consolidated Statement of Shareholders' Equity for the
six months ended June 30, 1998 ........................................ 3
Condensed Consolidated Statements of Cash Flows for the six months
ended June 30, 1998 and 1997 .......................................... 4
Notes to Condensed Consolidated Financial Statements .................. 5
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations ................................................. 9

PART II. OTHER INFORMATION

Item 4. Submission of Matters to a Vote of Security Holders ................... 15
Item 5. Other Matters ......................................................... 15
Item 6. Exhibits and Reports on Form 8-K ...................................... 15
Signatures ............................................................ 16
</TABLE>

<PAGE> 3

SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share and per share amounts)
(Unaudited)

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------------- -----------------------------
1998 1997 1998 1997
------------ ----------- ------------ -----------
<S> <C> <C> <C> <C>
REVENUES:
Vacation Interval sales $ 36,633 $ 19,123 $ 62,872 $ 33,626
Interest income 4,024 2,095 6,983 4,028
Interest income from affiliates 16 96 31 204
Management fee income 591 502 1,093 1,001
Lease income 553 389 1,003 875
Other income 1,344 837 2,208 1,235
------------ ----------- ------------ -----------
Total revenues 43,161 23,042 74,190 40,969

COSTS AND OPERATING EXPENSES:
Cost of Vacation Interval sales 6,851 1,993 10,549 3,215
Sales and marketing 16,023 7,552 28,432 13,501
Provision for uncollectible notes 4,412 3,169 7,856 5,525
Operating, general and administrative 4,245 2,934 8,112 5,105
Depreciation and amortization 686 454 1,250 784
Interest expense to affiliates -- 196 -- 422
Interest expense to unaffiliated entities 2,058 1,498 3,333 2,958
------------ ----------- ------------ -----------
Total costs and operating expenses 34,275 17,796 59,532 31,510

Income before provision for income taxes 8,886 5,246 14,658 9,459
Provision for income taxes (3,386) (1,942) (5,584) (3,501)
------------ ----------- ------------ -----------
NET INCOME $ 5,500 $ 3,304 $ 9,074 $ 5,958
============ =========== ============ ===========

NET INCOME PER COMMON SHARE:

BASIC $ 0.42 $ 0.38 $ 0.74 $ 0.73
============ =========== ============ ===========
DILUTED $ 0.41 $ 0.38 $ 0.73 $ 0.73
============ =========== ============ ===========

WEIGHTED AVERAGE SHARES OUTSTANDING:

BASIC 13,245,583 8,678,550 12,283,893 8,197,705
============ =========== ============ ===========

DILUTED 13,395,215 8,678,550 12,493,091 8,197,705
============ =========== ============ ===========
</TABLE>

See notes to condensed consolidated financial statements.

<PAGE> 4

SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)

<TABLE>
<CAPTION>
June 30, December 31,
ASSETS 1998 1997
-------- ------------
<S> <C> <C>
Cash and equivalents $ 30,389 $ 4,970
Restricted cash 200 200
Notes receivable, net of allowance for doubtful accounts of
$20,259 and $15,450, respectively 131,961 92,036
Amounts due from affiliates 3,168 1,389
Inventory 42,463 28,310
Land, equipment and utilities, net 27,767 21,629
Land held for sale 466 466
Prepaid and other assets 16,110 7,401
-------- --------
Total Assets $252,524 $156,401
======== ========

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
Accounts payable and accrued expenses $ 10,701 $ 5,106
Unearned revenues 4,217 3,122
Income taxes payable 2,672 1,500
Deferred income taxes, net 17,461 14,037
Notes payable and capital lease obligations 4,852 48,871
Senior subordinated notes 75,000 --
-------- --------
Total Liabilities 114,903 72,636

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
Common stock, par value $0.01 per share, 100,000,000
shares authorized, 13,311,517 shares issued and
outstanding at June 30, 1998 and 11,311,517 shares
issued and outstanding at December 31, 1997 133 113
Additional paid-in capital 109,339 64,577
Retained earnings 28,149 19,075
-------- --------
Total Shareholders' Equity 137,621 83,765
-------- --------
Total Liabilities and Shareholders' Equity $252,524 $156,401
======== ========
</TABLE>

See notes to condensed consolidated financial statements.

2
<PAGE> 5

SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(In thousands, except share amounts)
(Unaudited)

<TABLE>
<CAPTION>
Common Stock
-------------------------
Number of Additional
Shares Issued Par Paid-in Retained
and Outstanding Value Capital Earnings Total
--------------- ----- ------- -------- -----
<S> <C> <C> <C> <C> <C>
January 1, 1998 11,311,517 $113 $ 64,577 $19,075 $ 83,765

Issuance of common stock 2,000,000 20 44,762 -- 44,782

Net income -- -- -- 9,074 9,074
--------------- ---- -------- ------- --------
June 30, 1998 13,311,517 $133 $109,339 $28,149 $137,621
=============== ==== ======== ======= ========
</TABLE>

See notes to condensed consolidated financial statements.

3
<PAGE> 6

SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
1998 1997
--------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net Income $ 9,074 $ 5,958
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,250 784
Discontinued operations -- 506
Deferred income taxes 3,424 2,663
Increase (decrease) in cash from changes in
assets and liabilities:
Amounts due from affiliates (1,779) 4,332
Inventory (14,153) (1,357)
Prepaid and other assets (8,709) (625)
Accounts payable and accrued expenses 5,595 349
Amounts due to affiliates -- 24
Unearned revenues 1,095 (192)
Income taxes payable 1,172 858
--------- --------
Net cash provided by (used in) operating activities (3,031) 13,300
--------- --------

INVESTING ACTIVITIES:
Purchases of land, equipment and utilities (6,187) (1,841)
Notes receivable, net (39,925) (15,694)
--------- --------
Net cash used in investing activities (46,112) (17,535)
--------- --------

FINANCING ACTIVITIES:
Proceeds from borrowings from unaffiliated entities 103,990 15,187
Payments on borrowings to unaffiliated entities (74,210) (42,017)
Payments on borrowings to affiliates -- (14,789)
Net proceeds from issuance of common stock 44,782 51,143
Discontinued operations -- (62)
--------- --------
Net cash provided by financing activities 74,562 9,462
--------- --------

Net increase in cash 25,419 5,227

CASH AND CASH EQUIVALENTS:
Beginning of period 4,970 973
--------- --------
End of period $ 30,389 $ 6,200
========= ========

SUPPLEMENTAL CASH FLOW INFORMATION:
Interest paid $ 1,994 $ 2,471

Income taxes paid $ 988 $ --

Equipment acquired under capital lease or note $ 749 $ 700
</TABLE>

See notes to condensed consolidated financial statements.

4
<PAGE> 7

SILVERLEAF RESORTS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1 - BACKGROUND

The condensed consolidated financial statements of Silverleaf Resorts, Inc. and
subsidiaries ("the Company") presented herein do not include certain information
and disclosures required by generally accepted accounting principles for
complete financial statements. However, in the opinion of management, all
adjustments considered necessary for a fair presentation have been included.
Operating results for the three and six months ended June 30, 1998 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1998.

These condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto included in the
Company's Form 10-K/A (File No. 001-13003) as filed with the Securities and
Exchange Commission. The accounting policies used in preparing the condensed
consolidated financial statements presented herein are the same as those
described in such Form 10-K/A.

The Company has adopted Statement of Financial Accounting Standards No. 130,
"Reporting on Comprehensive Income", effective January 1, 1998. The Company had
no items classified as other comprehensive income in the periods presented;
therefore, comprehensive income is not presented.

On April 3, 1998, the Accounting Standards Executive Committee issued Statement
of Position ("SOP") 98-5, "Reporting on Costs of Start-Up Activities", effective
for fiscal years beginning after December 15, 1998. SOP 98-5 requires that costs
for start-up activities, including organization costs, should be charged to
expense as incurred. The Company currently follows the practice of charging
start-up costs to expense as incurred. The adoption of SOP 98-5, therefore, will
have no effect on results of operations or financial position of the Company.

NOTE 2 - EARNINGS PER SHARE

For the three and six months ended June 30, 1998, the weighted average shares
outstanding assuming dilution was calculated by increasing the basic weighted
average shares outstanding by the assumed issuance of 900,000 and 1,025,000
shares, respectively, upon exercise of the options and the repurchase of
750,368 and 815,801 shares, respectively, with the proceeds from the exercise
of such options.

NOTE 3 - PUBLIC OFFERINGS

Effective April 3, 1998, the Company completed the sale of 2,000,000 shares of
Company common stock at a price of $24.375 per share. On the same date, the
majority shareholder of the Company sold 875,000 additional shares of Company
common stock.

Also effective April 3, 1998, the placement of $75 million aggregate principal
amount of 10 1/2% senior subordinated notes due 2008 ("Senior Subordinated
Notes") was completed by the Company. The Senior Subordinated Notes are general
unsecured obligations of the Company, ranking subordinate in right of payment to
all senior indebtedness of the Company, including indebtedness under the
Company's revolving credit facilities. The Company received proceeds from these
two offerings in an aggregate net amount of $118,940,000. Costs incurred in
connection with the offerings were approximately $4.4 million. The Company is
utilizing the proceeds primarily for the repayment of notes payable and capital
lease obligations, and its construction and acquisition programs.

The following unaudited condensed pro forma financial information for the six
months ended June 30, 1998 and 1997 was prepared from the consolidated financial
statements of the Company by adjusting for the effect of all public offerings in
1998 and 1997, which includes the Company's initial public offering completed in
June 1997 and the equity and debt offerings completed in April 1998, including
debt repaid from proceeds of such offerings, as if all of these transactions had
occurred on January 1, 1997. The pro forma information is for informational
purposes only and not necessarily indicative of the financial position or
results of operations that would have resulted had these offerings actually
occurred on January 1, 1997, nor does it purport to represent future financial
position or results of operations of the Company (in thousands, except per share
amounts):

5
<PAGE> 8
<TABLE>
<CAPTION>
Pro Forma Condensed Consolidated
Statements of Income
(Unaudited)
---------------------------
Six Months Ended June 30,
---------------------------
1998 1997
----------- -----------
<S> <C> <C>
Revenues $ 74,159 $ 40,765
Expenses 59,534 32,320
----------- -----------

Income before provision for income taxes 14,625 8,445
Provision for income taxes 5,572 3,125
----------- -----------

Net income $ 9,053 $ 5,320
=========== ===========

Net income per share:
Basic $ 0.68 $ 0.46
=========== ===========

Diluted $ 0.67 $ 0.46
=========== ===========

Weighted average shares outstanding:
Basic 13,311,517 11,553,116
=========== ===========

Diluted 13,520,715 11,553,116
=========== ===========
</TABLE>

6
<PAGE> 9

NOTE 4 - DEBT

Notes payable, capital lease obligations, and Senior Subordinated Notes consist
of the following:

<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
-------- ------------
<S> <C> <C>
$40 million revolving loan agreement, which contains certain financial
covenants, due October 2005, principal and interest payable from the proceeds
obtained from customer notes receivable which are pledged as collateral for
the note, at an interest rate of LIBOR plus 2.5% ................................................. $ 722 $22,137

$12 million revolving loan agreement, which contains certain financial
covenants, due May 2003, principal and interest payable from the proceeds
obtained from customer notes receivable which are pledged as collateral for
the note, at an interest rate of Base plus
2.75% (11.25% at December 31, 1997) .............................................................. -- 4,122

$60 million revolving loan agreement, which contains certain financial
covenants, due December 1999, principal and interest payable from the proceeds
obtained on customer notes receivable pledged as collateral for
the note, at an interest rate of LIBOR plus 2.55% ................................................ 34 1,529

$15 million revolving loan agreement, which contains certain financial
covenants, due November 2002, principal and interest payable from the proceeds
obtained from customer notes receivable which are pledged as collateral for
the note, at an interest rate of Prime plus 2% ................................................... 503 12,596

$10 million line of credit, due January 2000, with drawings permitted until
December 1998, at a variable rate of LIBOR plus 3%, secured by land,
improvements, and equipment of various existing resorts
and new resorts .................................................................................. -- 4,070

Various notes, due from April 1998 through October 2002, collateralized by
various assets with interest rates ranging from 4.3% to 24.7% at June 30, 1998
and 4.2% to 14.0% at December 31, 1997 ........................................................... 911 1,785
------- -------
Total notes payable ...................................................................... 2,170 46,239
Capital lease obligations .......................................................................... 2,682 2,632
------- -------
Total notes payable and capital lease obligations ........................................ 4,852 48,871

10 1/2% Senior Subordinated Notes, due 2008, interest payable semi-annually on
April 1 and October 1, guaranteed by all of the Company's present and future
domestic restricted subsidiaries ................................................................ 75,000 --
------- -------
Total ................................................................................... $79,852 $48,871
======= =======

</TABLE>

Prime rate at June 30, 1998 and December 31, 1997 was 8.50%.

Applicable LIBOR rates at June 30, 1998 and December 31, 1997 ranged from 5.69%
to 5.84% and 5.72% to 5.81%, respectively.

The Company's credit facilities provide for loans of up to $130 million.

7
<PAGE> 10

NOTE 5 - SUBSIDIARY GUARANTEES

All subsidiaries of the Company have guaranteed the $75.0 million of Senior
Subordinated Notes. The separate financial statements and other disclosures
concerning each guaranteeing subsidiary (each, a "Guarantor Subsidiary") are not
presented herein because management has determined that such information is not
material to investors. The guarantee of each Guarantor Subsidiary is full and
unconditional and joint and several, and each Guarantor Subsidiary is a
wholly-owned subsidiary of the Company, and together comprise all direct and
indirect subsidiaries of the Company. During the second quarter, the Company
liquidated several subsidiaries with nominal operations.

Combined summarized operating results of the Guarantor Subsidiaries are as
follows (in thousands):

<TABLE>
<CAPTION>
June 30,
----------------
1998 1997
---- ----
<S> <C> <C>
Revenues $ 26 190

Expenses (98) (329)
---- -----
Net income (loss) $(72) $(139)
==== =====
</TABLE>

Combined summarized balance sheet information as of June 30, 1998 for the
Guarantor Subsidiaries is as follows (in thousands):

<TABLE>
<CAPTION>
June 30,
1998
--------
<S> <C>
Land, equipment, inventory and utilities, net $ 12
Other assets 16
----
Total assets $ 28
====

Investment by parent (includes equity and
amounts due to parent) $ 72
Other liabilities (44)
----

Total liabilities and equity $ 28
====
</TABLE>

NOTE 6 - ACQUISITIONS

On May 29, 1998, the Company consummated an agreement with Crown Resort Co., LLC
("Crown") acquiring timeshare management rights and unsold Vacation Intervals at
eight resorts in Alabama, Mississippi, North Carolina, Pennsylvania, South
Carolina, Tennessee, and Texas for $4.8 million. The acquisition was accounted
for under the purchase method of accounting based on preliminary information,
and is subject to final allocation of the purchase price.

In February 1998, the Company entered into two agreements, one to acquire a golf
course and undeveloped land near Atlanta, Georgia, for $3.5 million, and another
to acquire undeveloped land near Kansas City, Missouri, for $1.6 million. The
Company is currently conducting customary due diligence procedures related to
Atlanta, Georgia, and has completed due diligence related to Kansas City,
Missouri. There is no assurance that either proposed acquisition will be
completed.

NOTE 7 - SUBSEQUENT EVENT

On June 26, 1998, the Board of Directors of the Company authorized the
repurchase of up to 300,000 shares of the Company's common stock. Subsequent to
June 30, 1998, approximately 294,000 shares had been repurchased at an average
price of $13.21 per share.

8
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Certain matters discussed throughout this Form 10-Q filing are forward looking
statements that are subject to risks and uncertainties that could cause actual
results to differ materially from those projected. Such risks and uncertainties
include, but are not limited to, those discussed in the Company's Form 10-K/A
(File No. 001-13003) which is incorporated herein by reference.

The Company currently owns and/or operates 20 resorts in various stages of
development. These resorts offer a wide array of country club-like amenities,
such as golf, swimming, horseback riding, boating, and many organized activities
for children and adults. The Company represents an owner base of approximately
61,000 owners. The condensed consolidated financial statements of the Company
include the accounts of Silverleaf Resorts, Inc. and its subsidiaries, all of
which are wholly-owned.

RESULTS OF OPERATIONS

The following table sets forth certain operating information for the Company.

<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1998 1997 1998 1997
------- ------- ------- -------
<S> <C> <C> <C> <C>
As a percentage of Total Revenues:
Vacation Interval sales 84.9% 83.0% 84.7% 82.1%
Interest income 9.3% 9.5% 9.4% 10.3%
Management fee income 1.4% 2.2% 1.5% 2.5%
Lease income 1.3% 1.7% 1.4% 2.1%
Other income 3.1% 3.6% 3.0% 3.0%
------- ------- ------- -------
Total revenues 100.0% 100.0% 100.0% 100.0%

As a percentage of Vacation Interval sales:
Cost of Vacation Interval sales 18.7% 10.4% 16.8% 9.6%
Sales and marketing 43.7% 39.5% 45.2% 40.2%
Provision for uncollectible notes 12.0% 16.6% 12.5% 16.4%

As a percentage of Interest Income:
Interest expense 50.9% 77.3% 47.5% 79.9%

As a percentage of Total Revenues:
Operating, general and administrative 9.8% 12.7% 10.9% 12.5%
Depreciation and amortization 1.6% 2.0% 1.7% 1.9%
Total costs and operating expenses 79.5% 77.2% 80.3% 76.9%
</TABLE>

9
<PAGE> 12

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1998 AND 1997

Revenues

Revenues for the three months ended June 30, 1998 were $43.2 million,
representing a $20.2 million or 87.3% increase over revenues of $23.0 million
for the three months ended June 30, 1997. The increase was primarily due to a
$17.5 million increase in Vacation Interval sales, a $1.8 million increase in
interest income, and a $0.5 million increase in other income. The strong
increase in Vacation Interval sales primarily resulted from increased sales at
existing resorts and sales at three new resorts, Timber Creek near St. Louis,
Missouri, and Fox River near Chicago, Illinois, which both opened sales offices
in the fourth quarter of 1997, and Oak N' Spruce near Boston, Massachusetts,
which opened a sales office in the second quarter of 1998. In the 1998 second
quarter, the number of Vacation Intervals sold, exclusive of upgraded Vacation
Intervals, increased 74.1% to 3,381 from 1,942 in the same period of 1997; the
average price per Vacation Interval sold increased 9.2% to $8,431 from $7,719.
Total Vacation Interval sales for the second quarter of 1998 included 873
biennial intervals (counted as 437 Vacation Intervals) compared to 552 (276
Vacation Intervals) in the second quarter of 1997. The Company experienced
increased revenues generated from sales of upgraded Vacation Intervals at the
existing resorts through the continued implementation of marketing and sales
programs focused on selling upgraded intervals to the Company's existing
Vacation Interval owners. In addition, Vacation Interval sales at existing
resorts increased as a result of enhanced telemarketing capacity, arising from
investments in computer and automated dialing technology.

Interest income increased 84.4% to $4.0 million for the three months ended June
30, 1998, from $2.2 million for the respective 1997 period. This increase
resulted from an increase in notes receivable, net of allowance for
uncollectible notes, due to increased sales, as well as interest income
generated from the proceeds of the debt and equity offerings completed on April
3, 1998.

Management fee income remained flat at $0.6 million for the 1998 second quarter
as compared to $0.5 million for the same period of 1997.

Lease income, which relates to the Company's sampler program, increased to $0.6
million for the three months ended June 30, 1998, compared to $0.4 million for
the same period in 1997. The increase resulted from increased sales of overnight
samplers offered at new resorts.

Other income increased to $1.3 million for the quarter ended June 30, 1998, from
$0.8 million for the quarter ended June 30, 1997. The increase is primarily the
result of increased filing fees per Vacation Interval sold, from $35 per
contract during 1997 to $250 per contract by June 30, 1998. This increase was
also due to higher amenity usage fees and higher water and sewer income from
resort utility operations.

Cost of Sales

Cost of sales as a percentage of Vacation Interval sales increased to 18.7% in
the second quarter of 1998 from 10.4% for the same period of 1997. As the
Company continues to deplete its inventory of low cost Vacation Intervals
acquired primarily in 1995 and 1996, the Company's sales mix has shifted to more
recently constructed units, which were built at a higher average cost per
Vacation Interval. Hence, the cost of sales as a percentage of Vacation Interval
sales has increased in comparison with the respective prior year period.

Sales and Marketing

Sales and marketing costs as a percentage of Vacation Interval sales increased
to 43.7% for the three months ended June 30, 1998, from 39.5% for the same
period of 1997. This increase is due primarily to the implementation of new
marketing programs, start up costs in recently opened markets or markets yet to
open where sales have not yet reached mature levels to offset costs, and the
deferred sales recognition associated with sales at resorts under construction
whereby only the direct sales commissions costs related to such sales have been
similarly deferred.

10
<PAGE> 13

Provision for Uncollectible Notes

The provision for uncollectible notes as a percentage of Vacation Interval sales
decreased to 12.0% for the three months ended June 30, 1998, from 16.6% for the
same period of 1997. This is the result of improvements in the Company's
collection effort, including increased staffing as well as improved collections
administrative software, the implementation of a program through which
delinquent loans are assumed by existing owners with a solid credit record, and
an increase in receivables related to upgrade sales, which typically represent
better performing accounts, resulting in fewer delinquencies.

Operating, General and Administrative

Operating, general and administrative expenses as a percentage of total revenues
decreased to 9.8% for the three months ended June 30, 1998, as compared to 12.7%
for the three months ended June 30, 1997, however, increased $1.3 million in
1998 compared to 1997. The decrease in operating, general and administrative
expenses as a percentage of total revenues is the result of the Company's
ability to increase sales without proportionate increases in overhead. The
dollar increase is attributable to additional salaries and other increased costs
resulting from growth and the Company's publicly traded status effective June
1997.

Depreciation and Amortization

For the three months ended June 30, 1998, depreciation and amortization expense
as a percentage of total revenues decreased to 1.6% from 2.0% for the same
period of 1997. Overall, depreciation and amortization expense increased $0.2
million for the second quarter of 1998 as compared to 1997, primarily due to
investments in a new automated dialer, telephone system, and central marketing
facility.

Interest Expense

Interest expense as a percentage of interest income decreased to 50.9% for the
second quarter of 1998 from 77.3% for the same period of 1997. This decrease
was due to the payment of indebtedness with proceeds from the Company's equity
and debt offerings in the second quarter of 1998, which resulted in lower
interest expense on outstanding indebtedness, as well as the increase in
interest income discussed above.

Income before Provision for Income Taxes

Income before provision for income taxes increased 69.4% to $8.9 million for the
quarter ended June 30, 1998, from $5.2 million for the quarter ended June 30,
1997, as a result of the above mentioned operating results.

Provision for Income Taxes

Income tax expense as a percentage of income before provision for income taxes
increased to 38.1% in the second quarter of 1998 as compared to 37.0% in the
second quarter of 1997. This increase resulted from an increase in state income
taxes due to additional operations commencing in Illinois, Missouri, and
Massachusetts.

Net Income

Net income increased $2.2 million, or 66.5%, for the three months ended June 30,
1998, compared to the respective 1997 period as a result of the results of
operations discussed above.

11
<PAGE> 14

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1998 AND 1997

Revenues

Revenues for the six months ended June 30, 1998 were $74.2 million, representing
a $33.2 million or 81.0% increase over revenues of $41.0 million for the six
months ended June 30, 1997. The increase was primarily due to a $29.3 million
increase in Vacation Interval sales, a $2.8 million increase in interest income,
and a $1.0 million increase in other income. The strong increase in Vacation
Interval sales primarily resulted from increased sales at existing resorts and
sales at three new resorts, Timber Creek near St. Louis, Missouri, and Fox River
near Chicago, Illinois, which both opened sales offices in the fourth quarter of
1997, and Oak N' Spruce near Boston, Massachusetts, which opened a sales office
in the second quarter of 1998. In the first half of 1998, the number of Vacation
Intervals sold, exclusive of upgraded Vacation Intervals, increased 79.0% to
6,043 from 3,376 in the same period of 1997; the average price per Vacation
Interval sold increased 4.4% to $8,035 from $7,693. Total Vacation Interval
sales for the first six months of 1998 included 1,552 biennial intervals
(counted as 776 Vacation Intervals) compared to 904 (452 Vacation Intervals)
during the respective 1997 period. The Company experienced increased revenues
generated from sales of upgraded Vacation Intervals at the existing resorts
through the continued implementation of marketing and sales programs focused on
selling upgraded intervals to the Company's existing Vacation Interval owners.
In addition, Vacation Interval sales at existing resorts increased as a result
of enhanced telemarketing capacity, arising from investments in computer and
automated dialing technology.

Interest income increased 65.7% to $7.0 million for the six months ended June
30, 1998, from $4.2 million for the respective 1997 period. This increase
resulted from an increase in notes receivable, net of allowance for
uncollectible notes, due to increased sales, as well as interest income
generated from the proceeds of the debt and equity offerings completed on April
3, 1998.

Management fee income remained flat at $1.1 million for the six months ended
June 30, 1998 as compared to $1.0 million for the comparative 1997 period.

Lease income, which relates to the Company's sampler program, increased to $1.0
million for the six months ended June 30, 1998, compared to $0.9 million for the
same period in 1997. The increase resulted from increased sales of overnight
samplers offered at new resorts.

Other income increased to $2.2 million for the six months ended June 30, 1998,
from $1.2 million for the six months ended June 30, 1997. The increase is
primarily the result of increased filing fees per Vacation Interval sold, which
increased from $35 per contract during 1997 to $250 per contract by June 30,
1998. This increase was also due to higher amenity usage fees and higher water
and sewer income from resort utility operations.

Cost of Sales

Cost of sales as a percentage of Vacation Interval sales increased to 16.8% in
the first half of 1998 from 9.6% for the comparative 1997 period. As the Company
continues to deplete its inventory of low cost Vacation Intervals acquired
primarily in 1995 and 1996, the Company's sales mix has shifted to more recently
constructed units, which were built at a higher average cost per Vacation
Interval. Hence, the cost of sales as a percentage of Vacation Interval sales
has increased in comparison with the respective prior year period.

Sales and Marketing

Sales and marketing costs as a percentage of Vacation Interval sales increased
to 45.2% for the six months ended June 30, 1998, from 40.2% for the same period
of 1997. This increase is due primarily to the implementation of new marketing
programs, start up costs in recently opened markets or markets yet to open where
sales have not yet reached mature levels to offset costs, and the deferred sales

12
<PAGE> 15
recognition associated with sales at resorts under construction whereby only
the direct sales commissions costs related to such sales have been similarly
deferred.

Provision for Uncollectible Notes

The provision for uncollectible notes as a percentage of Vacation Interval sales
decreased to 12.5% for the six months ended June 30, 1998, from 16.4% for the
same period of 1997. This is the result of improvements in the Company's
collection effort, including increased staffing as well as improved collections
administrative software, the implementation of a program through which
delinquent loans are assumed by existing owners with a solid credit record, and
an increase in receivables related to upgrade sales, which typically represent
better performing accounts, resulting in fewer delinquencies.

Operating, General and Administrative

Operating, general and administrative expenses as a percentage of total revenues
decreased to 10.9% for the six months ended June 30, 1998, as compared to 12.5%
for the six months ended June 30, 1997, however, increased $3 million in 1998
compared to 1997. The decrease in operating, general and administrative expenses
as a percentage of total revenues is the result of the Company's ability to
increase sales without proportionate increases in overhead. The dollar increase
is attributable to additional salaries and other increased costs resulting from
growth and the Company's publicly traded status effective June 1997.

Depreciation and Amortization

For the six months ended June 30, 1998, depreciation and amortization expense as
a percentage of total revenues decreased to 1.7% from 1.9% for the same period
of 1997. Overall, depreciation and amortization expense increased $0.5 million
for the first half of 1998 as compared to 1997, primarily due to investments in
a new automated dialer, telephone system, and central marketing facility.

Interest Expense

Interest expense as a percentage of interest income decreased to 47.5% for the
six months ended June 30, 1998, compared to 79.9% for the same period of 1997.
This decrease was due to the payment of indebtedness with proceeds from the
Company's equity and debt offerings in the second quarter of 1998, which
resulted in lower interest expense on outstanding indebtedness, as well as the
increase in interest income discussed above.

Income before Provision for Income Taxes

Income before provision for income taxes increased 55% to $14.7 million for the
six months ended June 30, 1998, from $9.5 million for the first half of 1997, as
a result of the above mentioned operating results.

Provision for Income Taxes

Income tax expense as a percentage of income before provision for income taxes
increased to 38.1% in the six months ended June 30, 1998 as compared to 37.0% in
the comparable period of 1997. This increase resulted from an increase in state
income taxes due to additional operations commencing in Illinois, Missouri, and
Massachusetts.

Net Income

Net income increased $3.1 million, or 52.3%, for the six months ended June 30,
1998, compared to the respective 1997 period as a result of the results of
operations discussed above.

13
<PAGE> 16

LIQUIDITY AND CAPITAL RESOURCES

SOURCES OF CASH. The Company generates cash primarily from the sale of Vacation
Intervals, the financing of customer notes receivable from Vacation Interval
owners, management fees, sampler sales, and resort and utility operations.
During the six months ended June 30, 1998 cash used in operations was $3
million. The Company generates cash from financing of customer notes receivable
(i) by borrowing at an advance rate of 70% of eligible customer notes receivable
and (ii) from the spread between interest received on customer notes receivable
and interest paid on related borrowing. The Company uses significant amounts of
cash in the development and marketing of Vacation Intervals, however, collects
cash on customer notes receivable over a seven-year period. Therefore, borrowing
against receivables has historically been a necessary part of normal operations.

For the six months ended June 30, 1998 and 1997, cash provided by financing
activities was $74.6 million and $9.5 million, respectively. The increase in net
cash provided by financing activities was mainly attributable to the issuance,
in the second quarter of 1998, of $75 million of Senior Subordinated Notes due
2008. The Company's credit facilities provide for loans of up to $130 million.
At June 30, 1998, approximately $1.3 million of principal and interest related
to advances under the credit facilities was outstanding. The Company expects to
borrow on its lines of credit during the third quarter of 1998.

For regular Federal income tax purposes, the Company reports substantially all
of the Vacation Interval sales it finances under the installment method. Under
this method, income on sales of Vacation Intervals is not recognized until cash
is received, either in the form of a down payment or as installment payments on
customer notes receivable. The deferral of income tax liability conserves cash
resources on a current basis. Interest will be imposed, however, on the amount
of tax attributable to the installment payments received after the year of sale
for the period beginning on the date of sale and ending on the date the
installment payments are received. If the Company is otherwise not subject to
tax in a particular year, no interest is imposed since the interest is based on
the amount of tax paid in that year. The condensed consolidated financial
statements do not contain an accrual for any interest expense, which would be
paid on the deferred taxes related to the installment method, as the interest
expense is not estimable. In addition, the Company is subject to current
alternative minimum tax ("AMT") as a result of the deferred income, which
results from the installment sales treatment. Payment of AMT reduces the future
regular tax liability attributable to Vacation Interval sales, and creates a
deferred tax asset. In April 1998, the Internal Revenue Service issued a letter
ruling to the Company granting a requested AMT accounting adjustment effective
as of January 1, 1997. As a result, the Company's alternative minimum taxable
income for 1997 through 2000 will be increased each year by an estimated amount
of approximately $9 million per year, which will result in the Company paying
substantial additional federal and state taxes in those years. The Company's
net operating loss carryforwards, which also may be used to offset installment
sales income, expire beginning in 2007 through 2012. Realization of the
deferred tax asset arising from net operating losses is dependent on generating
sufficient taxable income prior to the expiration of the loss carryforwards and
other factors.

USES OF CASH. Investing activities typically reflect a net use of cash as a
result of loans to customers in connection with the Company's Vacation Interval
sales, capital additions, and property acquisitions. Net cash used in investing
activities for the six months ended June 30, 1998 and 1997 was $46.1 million and
$17.5 million, respectively. The increase was primarily due to the increased
level of customer notes receivable resulting from higher sales volume and the
purchase of Crown for $4.8 million.

YEAR 2000 ISSUES

Computer systems may not properly categorize and process date information for
the year 2000 and subsequent years because of the two-digit formats. Systems
that do not properly classify dates could generate erroneous data or cause a
system to fail. Based on the Company's assessment of year 2000 issues, it has
implemented a project time line in order to ensure compliance, and believes all
systems should be year 2000 compliant by the end of the second quarter of 1999.
Company management believes additional external costs to the Company will be
minimal, as the majority of resources necessary to complete the compliance
procedures are within the Company.

SUBSEQUENT EVENTS

14
<PAGE> 17

PART II. OTHER INFORMATION

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

At the Company's Annual Meeting of Stockholders held on May 20, 1998, a proposal
to elect the nominee listed in the following table as a director of the Company
was submitted to a vote of the Company's stockholders.

Nominee Votes For Votes Withheld
------- --------- --------------
Stuart Marshall Bloch 11,065,896 1,289

At the same meeting, proposals to (i) approve and adopt an Amendment to the 1997
Stock Option Plan and (ii) ratify the appointment of Deloitte & Touche L.L.P. as
independent accountants for the ensuing year were submitted to a vote of the
Company's stockholders. Both proposals were adopted by the stockholders. The
voting was as follows:

<TABLE>
<CAPTION>
Votes For Votes Against Abstentions
--------- ------------- -----------
<S> <C> <C> <C>
Amendments to 1997 Stock Option Plan 10,974,705 146,280 6,200

Ratification of Independent Accountants 11,065,825 0 1,360
</TABLE>

Item 5. Other Matters

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

4.1 First Amendment to 1997 Stock Option Plan for Silverleaf
Resorts, Inc., effective as of May 20, 1998.

10.1 Employment Agreement with Harry J. White, Jr.

10.2 Amendment to Employment Agreement with Sharon K. Brayfield.

10.3 Non-Qualified Stock Option Agreement dated June 25, 1998 with
Thomas C. Franks.

10.4 Incentive and Non-Qualified Stock Option Agreement dated June
25, 1998 with Sharon K. Brayfield.

10.5 Non-Qualified Stock Option Agreement dated June 29, 1998 with
Harry J. White, Jr.

10.6 Bill of Sale and Blanket Assignment dated May 28, 1998
between the Company and Crown Resort Co., LLC.

27.0 Financial Data Summary

(b) Reports on Form 8-K

none

15
<PAGE> 18

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

Dated: August 12, 1998 By: /s/ ROBERT E. MEAD
------------------------------
Robert E. Mead
Chairman of the Board and
Chief Executive Officer

Dated: August 12, 1998 By: /s/ HARRY J. WHITE JR.
------------------------------
Harry J. White Jr.
Chief Financial Officer

16
<PAGE> 19

INDEX TO EXHIBITS

<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
4.1 First Amendment to 1997 Stock Option Plan for Silverleaf
Resorts, Inc., effective as of May 20, 1998.

10.1 Employment Agreement with Harry J. White, Jr.

10.2 Amendment to Employment Agreement with Sharon K. Brayfield.

10.3 Non-Qualified Stock Option Agreement dated June 25, 1998 with
Thomas C. Franks.

10.4 Incentive and Non-Qualified Stock Option Agreement dated June
25, 1998 with Sharon K. Brayfield.

10.5 Non-Qualified Stock Option Agreement dated June 29, 1998 with
Harry J. White, Jr.

10.6 Bill of Sale and Blanket Assignment dated May 28, 1998
between the Company and Crown Resort Co., LLC.

27.0 Financial Data Summary
</TABLE>

<PAGE> 1
EXHIBIT 4.1

FIRST AMENDMENT TO 1997 STOCK OPTION PLAN
FOR
SILVERLEAF RESORTS, INC.

This First Amendment to 1997 Stock Option Plan (the "First Amendment")
is made and adopted by SILVERLEAF RESORTS, INC., a Texas corporation (the
"Company").

R E C I T A L S:

A. The Company adopted the 1997 Stock Option Plan as of May 15,
1997 (the "Plan"), and the Shareholders of the Company approved the Plan as of
the same date;

B. The Company desires to amend the Plan to increase the number
of shares of common stock of the Company reserved for issuance thereunder from
1,100,000 shares to 1,600,000 shares;

C. The Company also desires to amend the Plan to reduce the
number of directors required to administer the Plan;

D. This First Amendment was approved by the Board of Directors of
the Company on February 20, 1998 and duly submitted to the Shareholders for
consideration at the 1998 Annual Meeting of Shareholders; and

E. This First Amendment was adopted by the Shareholders of the
Company on May 20, 1998.

NOW, THEREFORE, in consideration of the foregoing, the Company hereby
amends the Plan as follows:

A G R E E M E N T:

Section 1. Amendment of Plan; Addition of Shares. Section 2.1 of the
Plan is hereby deleted in its entirety and the following is hereby substituted
in its place:

Section 2.1. Aggregate Number of Shares. The total number of
shares of common stock of the Company which may be purchased
pursuant to the exercise of Options granted under this Plan
shall not exceed, in the aggregate, 1,600,000 shares of the
authorized common stock, $0.01 par value per share, of the
Company (the "Shares").
<PAGE> 2
Section 2. Amendment of Plan; Reduction of Size of Committee. Section
4.1 of the Plan is hereby deleted in its entirety and the following is hereby
substituted in its place:

Section 4.1. Compensation Committee. The Board of Directors
shall designate a Compensation Committee (the "Committee"),
which shall consist of no fewer than two directors, to
administer the Plan. At least two members of the Committee
shall be "non-employee directors" within the meaning of Rule
16b-3 (or any successor rule or regulation) promulgated under
the Securities Exchange Act of 1934, as amended (the "Exchange
Act").

Section 3. Ratification. The Plan, as amended by this First
Amendment, is hereby ratified and confirmed.

Section 4. Governing Law. This Amendment and all related matters
shall be governed by, construed and enforced in accordance with, the laws of
the State of Texas.

The undersigned hereby certifies that the foregoing First Amendment
was duly adopted by the Board of Directors of Silverleaf Resorts, Inc., on
February 20, 1998, and was approved by the Shareholders of Silverleaf Resorts,
Inc., on May 20, 1998.

SILVERLEAF RESORTS, INC.

By: /s/ Robert E. Mead
------------------------------------
Robert E. Mead,
Chairman and Chief Executive
Officer

Attested by:

/s/ Sandra Cearley
- ----------------------------
Sandra Cearley, Secretary

<PAGE> 1

EXHIBIT 10.1

================================================================================

EMPLOYMENT AGREEMENT

BETWEEN

SILVERLEAF RESORTS, INC.

AND

HARRY J. WHITE, JR.

================================================================================
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
R E C I T A L S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

A G R E E M E N T . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Section 1. Employment . . . . . . . . . . . . . . . . . . . 1
Section 2. Duties . . . . . . . . . . . . . . . . . . . . . 1

(a) Non-Competition . . . . . . . . . . . . . . . . . 1
(b) Regulatory Laws . . . . . . . . . . . . . . . . . 1
(c) Silverleaf Rules . . . . . . . . . . . . . . . . 1

Section 3. Compensation . . . . . . . . . . . . . . . . . . 2

(a) Base Compensation . . . . . . . . . . . . . . . . 2
(b) Stock Options . . . . . . . . . . . . . . . . . . 2
(c) Company Vehicle . . . . . . . . . . . . . . . . . 2
(d) Fringe Benefits . . . . . . . . . . . . . . . . . 2

Section 4. Confidentiality . . . . . . . . . . . . . . . . . 2

(a) Nondisclosure and Nonuse . . . . . . . . . . . . 2
(b) Confidential Information . . . . . . . . . . . . 2

Section 5. Non-Interference . . . . . . . . . . . . . . . . 3
Section 6. Injunctive Relief . . . . . . . . . . . . . . . . 3
Section 7. Employee Investments . . . . . . . . . . . . . . 3
Section 8. Termination . . . . . . . . . . . . . . . . . . . 4

(a) Voluntary Termination, or for Good Cause . . . . 4
(b) Involuntary Termination Without Good Cause . . . 4
(c) General Release . . . . . . . . . . . . . . . . . 4
(d) Contingency . . . . . . . . . . . . . . . . . . . 4

Section 9. Return of Materials and Vehicles . . . . . . . . 5
Section 10. Non-Binding Alternate Dispute Resolution . . . . 5

(a) Agreement to Utilize . . . . . . . . . . . . . . 5
(b) Failure to Resolve . . . . . . . . . . . . . . . 5

Section 11. Waiver . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>

(i)
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 12. Successors, Assigns, Benefit . . . . . . . 5

(a) Silverleaf Successors . . . . . . . . . . . 5
(b) No Assignment by Employee . . . . . . . . . 6

Section 13. Severability . . . . . . . . . . . . . . . 6
Section 14. Governing Law and Venue . . . . . . . . . . 6
Section 15. Entire Understanding . . . . . . . . . . . 6
Section 16. Notices . . . . . . . . . . . . . . . . . . 6

(a) Silverleaf . . . . . . . . . . . . . . . . 6
(b) Employee . . . . . . . . . . . . . . . . . 6

Section 17. Section Headings . . . . . . . . . . . . . 6
Section 18. Counterparts . . . . . . . . . . . . . . . 7
Section 19. Effective Date . . . . . . . . . . . . . . 7
</TABLE>

(ii)
<PAGE> 4
EMPLOYMENT AGREEMENT
WITH SILVERLEAF RESORTS, INC.

THIS EMPLOYMENT AGREEMENT (the "Agreement") is made between SILVERLEAF
RESORTS, INC., a Texas corporation ("Silverleaf"), and HARRY J. WHITE, JR. (the
"Employee").

R E C I T A L S:

A. Silverleaf has agreed to employee Employee as an executive
employee; and

B. Silverleaf and Employee desire to set forth the terms of
Employee's proposed employment.

NOW, THEREFORE, in consideration of the premises and terms hereinafter
set forth, the parties agree as follows:

A G R E E M E N T:

SECTION 1. EMPLOYMENT. Employee is hereby employed as Chief
Financial Officer of Silverleaf, effective as of the Effective Date and until
terminated pursuant to the termination provisions of this Agreement. Employee
may not engage in other employment while he is in the employ of Silverleaf
pursuant to this Agreement.

SECTION 2. DUTIES. Employee agrees to devote such time,
attention and energies as are necessary to fulfill his duties as specified by
the Board of Directors of Silverleaf from time to time. Employee further
agrees that he will promote the best interests and welfare of Silverleaf and
shall perform any and all duties to the best of his abilities. The Employee
shall also:

(a) NON-COMPETITION: Not render to others, during his
employment with Silverleaf, service of any kind for compensation or
promote, participate or engage in any other business activity which
would conflict or interfere with the performance of his duties or
loyalty under this Agreement, including, but not limited to,
participating in the promotion or sale of products or services for a
competitor of Silverleaf or otherwise engage in business with such
competitor;

(b) REGULATORY LAWS: Abide by all applicable statutes,
rules and regulations of each State in which services may be rendered;
and

(C) SILVERLEAF RULES: Abide by all rules and regulations
issued by Silverleaf, which are pertinent to Employee's duties and
obligations.
<PAGE> 5
SECTION 3. COMPENSATION. As compensation for the services
rendered pursuant to this Agreement:

(a) BASE COMPENSATION: Silverleaf shall pay Employee
base compensation computed at the annual rate of Two Hundred Thousand
and No/100 Dollars ($200,000.00), payable in semi-monthly payments on
the 1st and 15th days of each month.

(b) STOCK OPTIONS: Employee shall be granted 50,000
Non-Qualified Stock Options pursuant to Silverleaf's 1997 Stock Option
Plan as of the Effective Date, one-quarter (1/4) of which will vest on
the date which is one (1) year after the grant and a like amount to
vest on the same date during each of the three years which follow
thereafter, such options to be exercisable for a period of 10 years
from the date of grant, at a price per share of Silverleaf's $0.01 par
value common stock equal to the greater of (1) $16.00; and (2) the
average of the high and low trading prices of the common stock on the
New York Stock Exchange on the Effective Date.

(c) COMPANY VEHICLE: Silverleaf shall furnish Employee a
company owned vehicle for use by Employee in performing his duties,
and Silverleaf shall pay all expenses associated therewith.

(d) FRINGE BENEFITS: Silverleaf shall provide Employee
health insurance under its group plan as it may exist from time to
time. The cost of any coverage of any of the Employee's family
members under Silverleaf's group plan shall be paid by the Employee.
The Employee shall also be entitled to such vacation time, sick leave
and other fringe benefits as may be specified by the Board of
Directors of Silverleaf from time to time for its executive personnel.

SECTION 4. CONFIDENTIALITY.

(a) NONDISCLOSURE AND NONUSE: Employee acknowledges that
during his employment with Silverleaf, he may have access to and
become acquainted with Silverleaf Confidential Information, as defined
below. Except as Employee's duties during his employment with
Silverleaf may require or Silverleaf may otherwise consent in writing,
Employee agrees that he shall not at any time disclose or use,
directly or indirectly, either during or subsequent to his employment
with Silverleaf, any Silverleaf Confidential Information.

(b) CONFIDENTIAL INFORMATION: For purposes of the
foregoing provisions, "Silverleaf Confidential Information" shall mean
(1) any and all confidential and proprietary business information and
trade secrets concerning the business and affairs of Silverleaf and
its affiliates, including but not limited to all marketing, sales and
lead generation techniques, know-how and studies, customer and lead
lists, current and anticipated customer requirements, price lists,
business plans, training programs, computer software and programs, and
computer software and data-base technologies,

2
<PAGE> 6
systems, structures and architectures (and related processes,
formulae, compositions, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information), (2)
any and all information concerning the business and affairs of
Silverleaf and its affiliates (including but not limited to their
historical financial statements, financial projections and budgets,
historical and projected sales, capital spending budgets and plans,
the names and backgrounds of key personnel, personnel training and
techniques and materials, however documented), and (3) any and all
notes, analysis, compilations, studies, summaries, and other material
prepared by or for Silverleaf and its affiliates containing or based,
in whole or in part, on any information included in the foregoing.
Provided, however, "Silverleaf Confidential Information" shall not
include information that is not unique to Silverleaf, information that
is generally known in the timeshare industry or information that was
known by Employee prior to his employment with Silverleaf.

SECTION 5. NON-INTERFERENCE. Employee further agrees that
during his employment and for a period of twelve (12) months thereafter,
Employee shall not, either on his own account or jointly with or as a manager,
agent, officer, employee, consultant, partner, joint venturer, owner or
shareholder or otherwise on behalf of any other person, firm or corporation,
directly or indirectly solicit or attempt to solicit away from Silverleaf or
its affiliates any of its officers, employees or independent contractors or
offer employment or business to any person who, on or during the 6 months
immediately preceding the date of such solicitation or offer, is or was an
officer, employee or independent contractor of Silverleaf or its affiliates.

SECTION 6. INJUNCTIVE RELIEF. Employee acknowledges that a
breach of Sections 4 or 5 hereof would cause irreparable damage to Silverleaf
and/or its affiliates, and in the event of Employee's breach of the provisions
of Sections 4 or 5 hereof, Silverleaf shall be entitled to a temporary
restraining order and an injunction restraining Employee from breaching such
Sections without the necessity of posting bond or proving irreparable harm,
such being conclusively admitted by Employee. Nothing shall be construed as
prohibiting Silverleaf from pursuing any other available remedies for such
breach, including the recovery of damages from Employee. Employee acknowledges
that the restrictions set forth in Sections 4 and 5 hereof are reasonable in
scope and duration, given the nature of the business of Silverleaf and its
affiliates. Employee agrees that issuance of an injunction restraining
Employee from breaching such Sections in accordance with their terms will not
pose an unreasonable restriction on Employee's ability to obtain employment or
other work following the effective date of any Termination.

SECTION 7. EMPLOYEE INVESTMENTS. Anything to the contrary
herein notwithstanding, Employee: (1) shall not be prohibited from investing
his assets in such form or such manner as will not, in the aggregate, detract
from the performance by Employee of his duties hereunder and will not violate
the provisions of Sections 4 or 5; and (2) shall not be prohibited from
purchasing stock in any publicly traded company solely as a stockholder so long
as Employee does not own (together or separately or through his affiliates)
more than two percent (2%) of the stock in any company, other than Silverleaf,
which is engaged in the timeshare business.

3
<PAGE> 7
SECTION 8. TERMINATION. This Agreement shall terminate: (1)
upon written notice by either party, at any time and for any or no reason
whatsoever, at least thirty (30) days prior to the effective date of the
termination; or (2) as of the end of the month of Employee's death, incapacity
due to Employee's physical or mental illness as determined in Silverleaf's sole
discretion or Employee reaching Silverleaf's normal retirement age (the
"Termination"). In the event of Termination, Employee shall be entitled to the
following:

(a) VOLUNTARY TERMINATION, OR FOR GOOD CAUSE: If
Employee voluntarily terminates Employee's employment, or if
Employee's employment is terminated for Good Cause as determined in
Silverleaf's sole discretion, Employee shall be entitled to no
severance pay. At the Termination, the payment to Employee of
compensation earned to date shall be in full satisfaction of all
claims against Silverleaf under this Agreement. Good Cause shall be
deemed to exist if the Employee's employment is terminated because
Employee:

[1] Willfully breaches or habitually neglects the
duties that the Employee is required to
perform under the terms of this Agreement;

[2] Willfully violates reasonable and substantial
rules governing employee performance;

[3] Refuses to obey reasonable orders in a manner
that amounts to insubordination;

[4] Commits clearly dishonest acts toward
Silverleaf;

[5] Becomes incapacitated as set forth above,
dies or reaches Silverleaf's normal
retirement age.

(b) INVOLUNTARY TERMINATION WITHOUT GOOD CAUSE: If
Silverleaf terminates Employee's employment, other than for Good
Cause, Employee shall also be paid severance pay equal to six (6)
months of Employee's base compensation set forth in Section 3(a) of
this Agreement, payable in semi-monthly payments on the 1st and 15th
days of each month for the 6 months following the Termination.

(c) GENERAL RELEASE: As a condition precedent to the
payment of the preceding severance payments, Employee agrees to execute
and deliver to Silverleaf a general release of Silverleaf from any and
all other claims that Employee might have against Silverleaf.

(d) CONTINGENCY: Payment of any amounts due under this
Section is also contingent upon return of all Silverleaf's property as
outlined below.

4
<PAGE> 8
SECTION 9. RETURN OF MATERIALS AND VEHICLES. Employee
understands and agrees that any accounting and training manuals, sales and
promotional material, vehicles or other equipment provided to him by Silverleaf
in connection with this Agreement shall remain the sole property of Silverleaf,
and shall be used by the Employee exclusively for Silverleaf's benefit. Upon
termination of this Agreement, any such material, vehicles or other equipment
shall be immediately returned to Silverleaf.

SECTION 10. NON-BINDING ALTERNATE DISPUTE RESOLUTION. Except for
actions brought by Silverleaf pursuant to Section 7 hereof:

(a) AGREEMENT TO UTILIZE: The parties shall attempt to
settle any claim or controversy arising from this Agreement through
consultation and negotiation in good faith and a spirit of mutual
cooperation prior to the commencement of any legal action. If such
attempts fail, then the dispute shall be mediated by a
mutually-accepted mediator to be chosen by the parties within
forty-five (45) days after written notice demanding mediation is sent
by one party to the other party. Neither party may unreasonably
withhold consent to the selection of a mediator, and the parties shall
share the costs of the mediation equally. By mutual written
agreement, however, the parties may postpone mediation until they have
completed some specified but limited discovery regarding the dispute.
The parties may also agree to replace mediation with any other form of
alternate dispute resolution ("ADR") available in Texas, such as a
mini-trial or arbitration.

(b) FAILURE TO RESOLVE: Any dispute which the Parties
cannot resolve through negotiation, mediation or any other form of
ADR, within six (6) months of the date of the initial demand for
mediation, may then be submitted to the appropriate court for
resolution. The use of negotiation, mediation, or any other form of
ADR procedures will not be construed under the doctrines of laches,
waiver or estoppel to affect adversely the rights of either party.

SECTION 11. WAIVER. Silverleaf's failure at any time to require
performance by Employee of any of the provisions hereof shall not be deemed to
be a waiver of any kind nor in any way affect the rights of Silverleaf
thereafter to enforce the provisions hereof. In the event that either party to
this Agreement waives any provision of this Agreement or any rights concerning
any breach or default of the other party hereto, such waiver shall not
constitute a continuing waiver of any such provision or breach or default of
the other party hereto.

SECTION 12. SUCCESSORS, ASSIGNS, BENEFIT.

(a) SILVERLEAF SUCCESSORS: The provisions of this
Agreement shall inure to the benefit of and be binding upon
Silverleaf, its successors, assigns and other affiliated entities,
including, but not limited to, any corporation which may acquire all
or substantially all of Silverleaf's assets or with or into which
Silverleaf may be consolidated, merged or reorganized. Upon any such
merger, consolidation or reorganization, the term "Silverleaf" as used
herein shall be deemed to refer to any such successor corporation.

5
<PAGE> 9
(b) NO ASSIGNMENT BY EMPLOYEE: The parties hereto agree
that Employee's services hereunder are personal and unique, and that
Silverleaf is executing this Agreement in reliance thereon. This
Agreement shall not be assignable by Employee.

SECTION 13. SEVERABILITY. If one or more of the provisions
contained in this Agreement shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement, but
shall be deemed stricken and severed from this Agreement and the remaining
terms of this Agreement shall continue in full force and effect.

SECTION 14. GOVERNING LAW AND VENUE. This Agreement shall be
deemed to have been made and entered into in the State of Texas and its
validity, construction, breach, performance and operation shall be governed by
the laws of that state. The obligations hereunder of Silverleaf shall be
performable in Dallas County, Texas, and venue for any suit involving this
Agreement shall lie exclusively in Dallas County, Texas.

SECTION 15. ENTIRE UNDERSTANDING. This Agreement sets forth the
entire understanding between the parties with respect to the employment of
Employee, and no other representations, warranties or agreements whatsoever
have been made by Silverleaf to Employee. Further, this Agreement may not be
modified or amended except by another instrument in writing executed by both of
the parties.

SECTION 16. NOTICES. All notices and communications under this
Agreement shall be sent to the parties at the following addresses or such other
addresses that the parties may subsequently designate in writing.

(a) SILVERLEAF:

Silverleaf Resorts, Inc.
Attention: Robert E. Mead, Chief Executive Officer
1221 Riverbend, Suite 120
Dallas, Texas 75247

(b) EMPLOYEE:

HARRY J. WHITE, JR.
2624 Cedar View Drive
Arlington, Texas 76006

SECTION 17. SECTION HEADINGS. Section and paragraph headings are
inserted herein only for convenience and shall not be used to interpret any of
the provisions hereof.

6
<PAGE> 10
SECTION 18. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same original.

SECTION 19. EFFECTIVE DATE. This Agreement is executed effective
as of June 29, 1998 (the "Effective Date").

Executed as of the 29th day of June, 1998.

"SILVERLEAF"

SILVERLEAF RESORTS, INC.

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

"EMPLOYEE"

/s/ HARRY J. WHITE, JR.
--------------------------------------
HARRY J. WHITE, JR.

<PAGE> 1

EXHIBIT 10.2

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT
WITH SILVERLEAF RESORTS, INC.

THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (the "First Agreement")
is made between SILVERLEAF RESORTS, INC., a Texas corporation ("Silverleaf"),
and SHARON K. BRAYFIELD (the "Employee").

R E C I T A L S:

A. Employee and Silverleaf have previously entered into that
certain Employment Agreement between them, dated effective as
of January 1, 1997 (the "Employment Agreement"); and

B. Silverleaf and Employee now desire to amend certain provisions
of the Employment Agreement.

NOW, THEREFORE, in consideration of the premises and terms hereinafter
set forth, the parties agree as follows:

A G R E E M E N T:

SECTION 1. AMENDMENT OF BASE COMPENSATION. Effective as of the
Effective Date of this First Amendment, Employee's base compensation under
Section 3(a) of the Employment Agreement is amended to provide for base
compensation computed at the annual rate of FOUR HUNDRED THIRTY FIVE THOUSAND
AND NO/100 DOLLARS ($435,000).

SECTION 2. AMENDMENT OF ADDITIONAL INCENTIVE COMPENSATION.
Effective as of the Effective Date of this First Amendment, Employee's
additional weekly incentive compensation under Section 3(b) of the Employment
Agreement is amended to reduce the percentage of net sales described therein to
125/1,000ths percent (0.125%).

SECTION 3. RATIFICATION. Except as amended by this First
Amendment, Silverleaf and Employee hereby ratify and confirm in all respects
the terms and conditions of the Employment Agreement.
<PAGE> 2
SECTION 4. EFFECTIVE DATE. This Amendment is executed on the
date set forth below, but shall be effective as of July 1, 1998 (the "Effective
Date").

Executed this 31st day of July, 1998.

"SILVERLEAF"

SILVERLEAF RESORTS, INC.

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

"EMPLOYEE"

/s/ SHARON K. BRAYFIELD
--------------------------------------
SHARON K. BRAYFIELD

<PAGE> 1
EXHIBIT 10.3

================================================================================

NONQUALIFIED STOCK OPTION AGREEMENT

BETWEEN

SILVERLEAF RESORTS, INC.

AND

THOMAS C. FRANKS

================================================================================
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE I.
GRANT OF OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Section 1.1. Grant of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.2. Fair Market Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.3. Purchase Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.4. Time for Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.5. Partial Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.6. Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.7. Method of Exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.8. Termination of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE II
RESTRICTIONS AND LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Section 2.1. Outstanding Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.2. Effect on Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3. Shares as Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.4. Reclassification, Consolidation, or Merger . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.5. Limitations Upon Transfer of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.6. Limitations Upon Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.7. Rights as Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE III
ADMINISTRATIVE PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Section 3.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.2. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.3. Nonqualified Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.4. Incorporation of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.5. Conditioned on Employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
</TABLE>

(i)
<PAGE> 3
NONQUALIFIED STOCK OPTION AGREEMENT
BETWEEN
SILVERLEAF RESORTS, INC.
AND
THOMAS C. FRANKS

This Nonqualified Stock Option Agreement (the "Option Agreement") is
made between SILVERLEAF RESORTS, INC., a Texas Corporation (the "Company"), and
THOMAS C. FRANKS ("Optionee") effective as of the date specified below.

RECITALS:

A. As Optionee is a valuable Officer and Employee of Silverleaf
Resorts, Inc., and has recognized leadership and experience in the business of
the Company, the Company deems it to be in its interest and in the interest of
its shareholders to provide an incentive to Optionee by granting Optionee an
additional proprietary interest in the Company, and the Company desires to
enter into this Option Agreement with Optionee under the terms and conditions
hereinafter set forth and to grant Optionee an option to purchase additional
common shares of the Corporation; and

B. The stock options granted hereunder are granted pursuant to
the terms of the 1997 Stock Option Plan for Silverleaf Resorts, Inc., which was
adopted by the Company and approved by the shareholders effective as of May 15,
1997, (the "Plan") and are intended to be Nonqualified Options as defined in
the Plan and not Incentive Options as defined in Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"),

AGREEMENT:

NOW, THEREFORE, in consideration of the promises and the mutual
agreements hereinafter contained, and for other good and valuable
consideration, the Parties agree as follows:

ARTICLE I.
GRANT OF OPTION

SECTION 1.1. GRANT OF OPTION. The Company hereby grants to
Optionee the right and option to purchase from it, on the terms and conditions
following, all or any part of an aggregate of TWENTY FIVE THOUSAND (25,000)
shares of the authorized $0.01 par value common shares of the Company.

SECTION 1.2. FAIR MARKET VALUE. The fair market value of the
Company's $0.01 par value common shares as of the effective date of this Option
Agreement is FIFTEEN AND 9,375/10,000 DOLLARS ($15.9375) per share, as
determined by the Company's Board of Directors pursuant to Section 7.3 of the
Plan.

SECTION 1.3. PURCHASE PRICE. The purchase price for each share
purchasable hereunder shall be SIXTEEN AND NO/100 DOLLARS ($16.00).
<PAGE> 4
SECTION 1.4. TIME FOR EXERCISE. Optionee may elect to exercise
the options at the times and for the number of shares indicated as follows:

(a) On or after June 25, 1999, to and including June 24, 2000,
6,250 shares;

(b) On or after June 25, 2000, to and including June 24, 2001,
6,250 shares;

(d) On or after June 25, 2002, to and including June 24, 2008 (the
"Option Termination Date"), 6,250 shares.

However, if Optionee does not purchase the full number of shares to
which Optionee is entitled in either period (a), (b) or (c) above, Optionee is
permitted to purchase those remaining shares in a later period through and
including the Option Termination Date in addition to those shares which
Optionee may otherwise be entitled to purchase.

SECTION 1.5. PARTIAL EXERCISE. No partial exercise of such option
may be for less than 100 full shares.

SECTION 1.6. FRACTIONAL SHARES. In no event shall the Company be
required to transfer fractional shares to the Optionee.

SECTION 1.7. METHOD OF EXERCISE. The option shall be exercised by
Optionee as to all or part of the shares covered by the option by giving
written notice of such exercise to the Company, specifying the number of shares
to be purchased and specifying a business day not more than fifteen (15) days
from the date such notice is given, for the payment of the purchase price
against delivery of the shares being purchased. Such notice shall set forth a
statement, if required by Section 8.8 of the Plan and Section 2.3 of this
Option Agreement, that the shares are being acquired for investment.

Subject to any applicable laws or regulations and to the terms of
Sections 8.8, 11.5, and 12.1 of the Plan, the Company shall cause certificates
for the Shares so purchased to be delivered to Optionee at the principal
business office of the Company, against payment of the full purchase price, on
the date specified in the notice of exercise, such payment to be made in cash
or by certified check or by transfer and delivery of shares of the common stock
of the Company as provided in Section 7.4 of the Plan.

SECTION 1.8. TERMINATION OF OPTION. The option and all rights
granted by this Option Agreement, to the extent those rights have not been
exercised, will terminate and become null and void on the sooner of:

(a) Such date as is ten (10) years from the date of this Option
Agreement;

(b) The Option Termination Date as defined in Section 1.4 hereof;

2
<PAGE> 5
(c) The date which is three months after the date Optionee ceases
to continually serve as an Officer or Employee of the Company,
if such cessation is by disability, retirement, or dismissal
other than for cause, as defined in Section 9.4 of the Plan,
provided that in the event of Optionee's cessation of office
or employment under such terms, Optionee may exercise such
option only to the extent that Optionee was entitled to
exercise it on the date of Optionee's cessation of office or
employment;

(d) The date Optionee ceases to continually serve as an Officer or
Employee of the Company if such cessation is by voluntary
termination or dismissal for cause as defined in Sections 9.3
and 9.4 of the Plan; or

(e) The date which is one year following the death of Optionee if
Optionee dies while serving as an Officer or Employee of the
Company or within the three-month period following the
termination of such office or employment if such termination
was by disability, retirement, or dismissal other than for
cause. In the event of Optionee's death under such terms, the
person or persons to whom Optionee's rights under the option
shall pass, whether by will or by the applicable laws of
descent and distribution, may exercise such option pursuant to
Section 8.7 of the Plan only to the extent that Optionee was
entitled to exercise it on the date of Optionee's death.

For purposes of the foregoing provisions, serving as an Officer or Employee of
a subsidiary of the Company shall be deemed to be serving as an Officer or
Employee of the Company.

ARTICLE II
RESTRICTIONS AND LIMITATIONS

SECTION 2.1. OUTSTANDING OPTIONS. The option granted to Optionee
under this Option Agreement shall in no event be exercised while there is
outstanding any Incentive Option previously granted to Optionee to purchase
common shares of the Company at a price higher than the option price under the
option herein granted to Optionee.

SECTION 2.2. EFFECT ON OTHER AGREEMENTS. Nothing herein contained
shall be deemed to modify the terms of any other agreement between the Company
and Optionee.

SECTION 2.3. SHARES AS INVESTMENT. By accepting this option and
if required by the Plan, Optionee acknowledges for Optionee, Optionee's heirs,
and legatees that any and all shares purchased under this Option Agreement
shall be acquired for investment and not for or with a view towards
distribution, and upon the transfer of any or all of the shares subject to the
option granted hereunder, Optionee, or Optionee's heirs or legatees receiving
such shares, shall deliver to the Company a representation in writing that such
shares are being acquired in good faith for investment and not for or with a
view towards distribution.

3
<PAGE> 6
SECTION 2.4. RECLASSIFICATION, CONSOLIDATION, OR MERGER.
Adjustments to the number of shares subject to the option and the option price
for them shall be proportionately adjusted, pursuant to Section 10.1 of the
Plan.

SECTION 2.5. LIMITATIONS UPON TRANSFER OF OPTION. During the
lifetime of Optionee, the option and all rights granted in this Option
Agreement shall be exercisable only by the Optionee, and except as Section
1.8(e) of this Option Agreement otherwise provides, the option and all rights
granted under this Option Agreement shall not be transferred, assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise),
and shall not be subject to execution, attachment, or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of such
option or of such rights contrary to the provisions in this Option Agreement,
or upon the levy of any attachment or similar process upon such option or such
rights, such option and such rights shall immediately become null and void.

SECTION 2.6. LIMITATIONS UPON TRANSFER OF SHARES. No shares
acquired by Optionee pursuant to this Option Agreement shall be sold or
disposed of within six (6) months following the date of acquisition of such
shares, unless either the grant of this Non-Qualified Option is approved by the
Board of Directors, or a committee of the Board of Directors that is composed
solely of two or more non-employee directors as defined in Rule 16b-3 of the
Exchange Act, or the grant of this Non-Qualified Option is approved or
ratified, in compliance with section 14 of the Exchange Act, by either: the
affirmative votes of the holders of a majority of the securities of the Company
present, or represented, and entitled to vote at a meeting duly held in
accordance with the applicable laws of the state or other jurisdiction in which
the Company is incorporated, or the written consent of the holders of a
majority of the securities of the Company entitled to vote, provided that such
ratification occurs no later than the date of the next annual meeting of the
shareholders. Any attempted sale, disposal or transfer of such shares shall be
without effect. All shares transferred to Optionee pursuant to the exercise of
the option granted hereby shall be clearly marked with the foregoing
restrictions on transfer.

SECTION 2.7. RIGHTS AS SHAREHOLDER. Neither Optionee nor
Optionee's executor, administrator, heirs, or legatees, shall be or have any
rights or privileges of a shareholder of the Company in respect of the shares
transferable upon exercise of the option granted under this Option Agreement,
unless and until certificates representing such shares shall have been
endorsed, transferred, and delivered and the Optionee, or the Optionee's
executor, administrator, heirs or legatees, as the case may be, has caused his
name to be entered as the shareholder of record on the books of the Company.

4
<PAGE> 7
ARTICLE III
ADMINISTRATIVE PROVISIONS

SECTION 3.1. NOTICES. Any notice to be given under the terms of
this Option Agreement shall be addressed to the Parties as follows:

If to the Company:

Silverleaf Resorts, Inc.
Attn: Robert E. Mead, Chief Executive Officer
1221 Riverbend Drive, Suite 120
P.O.Box 358
Dallas, Texas 75221

If to Optionee:

Thomas C. Franks
1504 Cottonwood Valley Circle North
Irving, Texas 75038

Any Party may change its address by giving notice in writing, stating
its new address, to the other Party as provided in the foregoing manner. Any
notice shall be deemed duly given when enclosed in a properly sealed envelope
or wrapper addressed as herein required certified and deposited (postage and
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government.

SECTION 3.2. BINDING EFFECT. This Option Agreement shall be
binding upon the heirs, executors, administrators, and successors of the
parties hereto.

SECTION 3.3. NONQUALIFIED OPTIONS. The options granted hereunder
are intended to be Nonqualified Options as defined in the Plan.

SECTION 3.4. INCORPORATION OF THE PLAN. The terms, conditions and
limitations contained in the Plan are incorporated herein by reference and such
provisions shall control to the extent they are not specifically contrary to a
provision of this Option Agreement.

5
<PAGE> 8
EXECUTED this 17th day of July, 1998, but EFFECTIVE the 25th day of
June, 1998.

SILVERLEAF RESORTS, INC., the Company

By: /s/ Robert E. Mead
---------------------------------
Robert E. Mead, Chief Executive
Officer

/s/ Thomas C. Franks
------------------------------------------
THOMAS C. FRANKS

<PAGE> 1

EXHIBIT 10.4

================================================================================

STOCK OPTION AGREEMENT

BETWEEN

SILVERLEAF RESORTS, INC.

AND

SHARON K. BRAYFIELD

================================================================================
<PAGE> 2
TABLE OF CONTENTS

RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE I.
GRANT OF OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II
RESTRICTIONS AND LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Section 2.1. Outstanding Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.2. Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.3. Effect on Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.4. Shares as Investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.5. Reclassification, Consolidation, or Merger . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.6. Limitations Upon Transfer of Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.7. Limitations Upon Transfer of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.8. Rights as Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE III
ADMINISTRATIVE PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Section 3.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.2. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.3. Incentive Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.4. Incorporation of the Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>

(i)
<PAGE> 3
STOCK OPTION AGREEMENT
BETWEEN
SILVERLEAF RESORTS, INC.
AND
SHARON K. BRAYFIELD

This Incentive Stock Option Agreement (the "Option Agreement") is made
between SILVERLEAF RESORTS, INC., a Texas Corporation (the "Company"), and
SHARON K. BRAYFIELD("Employee") effective as of the date specified below.

RECITALS:

B. The stock options granted hereunder are granted pursuant to
the terms of the 1997 Stock Option Plan for Silverleaf Resorts, Inc., which was
adopted by the Company and approved by the shareholders effective as of May 15,
1997, (the "Plan") and are intended to be in part Incentive Options and in part
Non-Qualified Options as defined in the Plan and Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code").

AGREEMENT:

NOW, THEREFORE, in consideration of the promises and the mutual
agreements hereinafter contained, and for other good and valuable
consideration, the Parties agree as follows:

ARTICLE I.
GRANT OF OPTION

SECTION 1.1. GRANT OF OPTION. The Company hereby grants to
Employee the right and option to purchase from it, on the terms and conditions
following, all or any part of an aggregate of ONE HUNDRED TWENTY FIVE THOUSAND
(125,000) shares of the authorized $0.01 par value common shares of the
Company. The options covering TWENTY FIVE THOUSAND NINETY SIX (25,096) shares
shall be Incentive Options, and the options covering NINETY NINE THOUSAND NINE
HUNDRED FOUR (99,904) shares shall be Non-Qualified Options.

SECTION 1.2. FAIR MARKET VALUE. The fair market value of the
Company's $0.01 par value common shares on the date of this Option Agreement is
FIFTEEN AND 9,375/10,000 DOLLARS ($15.9375) per share as determined by the
Company's Board of Directors pursuant to Section 7.3 of the Plan.
<PAGE> 4
SECTION 1.3. PURCHASE PRICE. The purchase price for each share
purchasable hereunder shall be SIXTEEN AND NO/100 DOLLARS ($16.00).

SECTION 1.4. TIME FOR EXERCISE. Employee may elect to exercise
the options at the times and for the number of shares indicated as follows:

(a) On or after June 25, 1999, to and including June 24, 2000,
6,274 shares covered by the Incentive Options and 24,976
shares covered by the Non-Qualified Options, for a total of
31,250 shares;

(b) On or after June 25, 2000, to and including June 24, 2001,
6,274 shares covered by the Incentive Options and 24,976
shares covered by the Non-Qualified Options, for a total of
31,250 shares;

(c) On or after June 25, 2001, to and including June 24, 2002,
6,274 shares covered by the Incentive Options and 24,976
shares covered by the Non-Qualified Options, for a total of
31,250 shares;and

(d) On or after June 25, 2002, to and including June 24, 2008 (the
"Option Termination Date"), 6,274 shares covered by the
Incentive Options and 24,976 shares covered by the
Non-Qualified Options, for a total of 31,250 shares.

However, if Employee does not purchase the full number of shares to
which Employee is entitled in either period (a), (b) or (c) above, Employee is
permitted to purchase those remaining shares in a later period through and
including the Option Termination Date in addition to those shares which
Employee may otherwise be entitled to purchase.

SECTION 1.5. PARTIAL EXERCISE. No partial exercise of such option
may be for less than 100 full shares.

SECTION 1.6. FRACTIONAL SHARES. In no event shall the Company be
required to transfer fractional shares to the Employee.

SECTION 1.7. METHOD OF EXERCISE. The option shall be exercised by
Employee as to all or part of the shares covered by the option by giving
written notice of such exercise to the Company, specifying the number of
Incentive Option or Non-Qualified Option shares to be purchased and specifying
a business day not more than fifteen (15) days from the date such notice is
given, for the payment of the purchase price against delivery of the shares
being purchased. Such notice shall set forth a statement, pursuant to Section
8.8 of the Plan and Section 2.5 of this Option Agreement, that the shares are
being acquired for investment.

2
<PAGE> 5
full purchase price, on the date specified in the notice of exercise, such
payment to be made in cash or by certified check or by transfer and delivery of
shares of common stock of the Company as provided in Section 7.4 of the Plan.

(a) Such date as is ten (10) years from the date of this Option
Agreement;

(b) The Option Termination Date as defined in Section 1.4 hereof;

(c) The date which is three months after the date Employee ceases
to be in the continuous employ of the Company, if such
cessation is by disability, retirement, or dismissal other
than for cause, as defined in Section 9.4 of the Plan,
provided that in the event of Employee's cessation of
employment under such terms, Employee may exercise such option
only to the extent that Employee was entitled to exercise it
on the date of Employee's cessation of employment;

(d) The date Employee ceases to be in the continuous employ of the
Company if such cessation is by voluntary termination or
dismissal for cause as defined in Sections 9.3 and 9.4 of the
Plan; or

(e) The date which is one year following the death of Employee, if
Employee dies while employed by the Company or within the
three-month period following the termination of such
employment if such termination was by disability, retirement,
or dismissal other than for cause. In the event of Employee's
death under such terms, the person or persons to whom
Employee's rights under the option shall pass, whether by will
or by the applicable laws of descent and distribution, may
exercise such option pursuant to Section 8.7 of the Plan only
to the extent that Employee was entitled to exercise it on the
date of Employee's death.

For purposes of the foregoing provisions, serving as an Employee of a
subsidiary of the Company shall be deemed to be serving as an Employee of the
Company.

ARTICLE II
RESTRICTIONS AND LIMITATIONS

SECTION 2.1. OUTSTANDING OPTIONS. The option granted to Employee
under this Option Agreement shall in no event be exercised while there is
outstanding any option previously granted to Employee to purchase common shares
of the Company at a price higher than the option price under the option herein
granted to Employee.

3
<PAGE> 6
SECTION 2.2. LIMITATIONS. In accordance with the terms of Section
422 of the Code, the option granted under this Option Agreement is limited so
that the aggregate fair market value of the stock which Employee may purchase
hereunder for the first time in any calendar year does not exceed $100,000 as
to shares covered by the Incentive Options.

SECTION 2.3. EFFECT ON EMPLOYMENT AGREEMENTS. Nothing herein
contained shall be deemed to modify the terms of any employment agreement
between the Company and Employee.

SECTION 2.4. SHARES AS INVESTMENT. By accepting this option,
Employee acknowledges for Employee, Employee's heirs, and legatees that any and
all shares purchased under this Option Agreement shall be acquired for
investment and not for or with a view towards distribution, and upon the
transfer of any or all of the shares subject to the option granted hereunder,
Employee, or Employee's heirs or legatees receiving such shares, shall deliver
to the Company a representation in writing that such shares are being acquired
in good faith for investment and not for or with a view towards distribution.

SECTION 2.5. RECLASSIFICATION, CONSOLIDATION, OR MERGER.
Adjustments to the number of shares subject to this option and the option price
for them shall be proportionately adjusted, pursuant to Section 10.1 of the
Plan.

SECTION 2.6. LIMITATIONS UPON TRANSFER OF OPTION. During the
lifetime of Employee, the option and all rights granted in this Option
Agreement shall be exercisable only by the Employee, and except as Section
1.8(e) of this Option Agreement otherwise provides, the option and all rights
granted under this Option Agreement shall not be transferred, assigned,
pledged, or hypothecated in any way (whether by operation of law or otherwise),
and shall not be subject to execution, attachment, or similar process. Upon any
attempt to transfer, assign, pledge, hypothecate, or otherwise dispose of such
option or of such rights contrary to the provisions in this Option Agreement,
or upon the levy of any attachment or similar process upon such option or such
rights, such option and such rights shall immediately become null and void.

SECTION 2.7. LIMITATIONS UPON TRANSFER OF SHARES. No shares
acquired by Employee pursuant to this Option Agreement and covered by the
Incentive Options may be "disposed of", within the meaning of Section 424(c) of
the Code, by Employee within two (2) years from the date of granting of the
option nor within one year after the transfer of such share(s) to Employee. No
shares acquired by Optionee pursuant to this Option Agreement and covered by
the Non-Qualified Options shall be sold or disposed of within six (6) months
following the date of acquisition of such shares, unless either the grant of
the Non-Qualified Options are approved by the Board of Directors, or a
committee of the Board of Directors that is composed solely of two or more
non-employee directors as defined in Rule 16b-3 of the Exchange Act, or the
grant of the Non-Qualified Options are approved or ratified, in compliance with
section 14 of the Exchange Act, by either: the affirmative votes of the
holders of a majority of the securities of the Company present, or represented,
and entitled to vote at a meeting duly held in accordance with the applicable
laws of the state or other jurisdiction in which the Company is incorporated,
or the written consent of the holders of a majority of the securities of the
Company entitled to vote, provided that such ratification occurs no later than
the date of the next annual meeting of

4
<PAGE> 7
the shareholders. Any attempted sale, disposal or transfer of shares in
violation of the foregoing restrictions shall be without effect. All shares
transferred to Employee pursuant to the exercise of the option granted hereby
shall be clearly marked with the foregoing restrictions on transfer to the
extent applicable.

SECTION 2.8. RIGHTS AS SHAREHOLDER. Neither Employee nor
Employee's executor, administrator, heirs, or legatees, shall be or have any
rights or privileges of a shareholder of the Company in respect of the shares
transferable upon exercise of the option granted under this Option Agreement,
unless and until certificates representing such shares shall have been
endorsed, transferred, and delivered and the Employee, or the Employee's
executor, administrator, heirs or legatees, as the case may be, has caused his
name to be entered as the shareholder of record on the books of the Company.

ARTICLE III
ADMINISTRATIVE PROVISIONS

SECTION 3.1. NOTICES. Any notice to be given under the terms of
this Option Agreement shall be addressed to the Parties as follows:

If to the Company:

Silverleaf Resorts, Inc.
Attn: Robert E. Mead, Chief Executive Officer
1221 Riverbend Drive, Suite 120
P.O.Box 358
Dallas, Texas 75221

If to Employee:

Sharon K. Brayfield
2135 Texas Ash
Irving, Texas 75063

SECTION 3.2. BINDING EFFECT. This Option Agreement shall be
binding upon the heirs, executors, administrators, and successors of the
parties hereto.

SECTION 3.3. INCENTIVE OPTIONS. The options granted hereunder
which are designated as Incentive Options are intended to be Incentive Options
as defined in the Plan and Section 422

5
<PAGE> 8
of the Code, but the Company makes no warranty as to the qualification of any
option as an Incentive Option. The options granted hereunder which are
designated as Non-Qualified Options are intended to be Non-Qualified Options as
defined in the Plan.

EXECUTED this 3rd day of August, 1998, but EFFECTIVE as of the 25th
day of June, 1998.

SILVERLEAF RESORTS, INC., the Company

By: /s/ ROBERT E. MEAD
-------------------------------------
ROBERT E. MEAD,
Chief Executive Officer

/s/ SHARON K. BRAYFIELD
------------------------------------------
SHARON K. BRAYFIELD

<PAGE> 1
EXHIBIT 10.5

================================================================================

NONQUALIFIED STOCK OPTION AGREEMENT

BETWEEN

SILVERLEAF RESORTS, INC.

AND

HARRY J. WHITE, JR.

================================================================================
<PAGE> 2
TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE I.
GRANT OF OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II
RESTRICTIONS AND LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE III
ADMINISTRATIVE PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

(i)
<PAGE> 3
NONQUALIFIED STOCK OPTION AGREEMENT
BETWEEN
SILVERLEAF RESORTS, INC.
AND
HARRY J. WHITE, JR.

This Nonqualified Stock Option Agreement (the "Option Agreement") is
made between SILVERLEAF RESORTS, INC., a Texas Corporation (the "Company"), and
HARRY J. WHITE, JR. ("Optionee") effective as of the date specified below.

RECITALS:

AGREEMENT:

NOW, THEREFORE, in consideration of the promises and the mutual
agreements hereinafter contained, and for other good and valuable
consideration, the Parties agree as follows:

ARTICLE I.
GRANT OF OPTION

SECTION 1.1. GRANT OF OPTION. The Company hereby grants to
Optionee the right and option to purchase from it, on the terms and conditions
following, all or any part of an aggregate of FIFTY THOUSAND (50,000) shares of
the authorized $0.01 par value common shares of the Company.

SECTION 1.2. FAIR MARKET VALUE. The fair market value of the
Company's $0.01 par value common shares as of the effective date of this Option
Agreement is SIXTEEN AND 46,875/100,000 DOLLARS ($16.46875) per share, as
determined by the Company's Board of Directors pursuant to Section 7.3 of the
Plan.

SECTION 1.3. PURCHASE PRICE. The purchase price for each share
purchasable hereunder shall be SIXTEEN AND 46,875/100,000 DOLLARS ($16.46875).
<PAGE> 4
SECTION 1.4. TIME FOR EXERCISE. Optionee may elect to exercise
the options at the times and for the number of shares indicated as follows:

(a) On or after June 29, 1999, to and including June 28, 2000,
12,500 shares;

(b) On or after June 29, 2000, to and including June 28, 2001,
12,500 shares;

(d) On or after June 29, 2002, to and including June 28, 2008 (the
"Option Termination Date"), 12,500 shares.

SECTION 1.5. PARTIAL EXERCISE. No partial exercise of such option
may be for less than 100 full shares.

SECTION 1.6. FRACTIONAL SHARES. In no event shall the Company be
required to transfer fractional shares to the Optionee.

(a) Such date as is ten (10) years from the date of this Option
Agreement;

(b) The Option Termination Date as defined in Section 1.4 hereof;

For purposes of the foregoing provisions, serving as an Officer or Employee of
a subsidiary of the Company shall be deemed to be serving as an Officer or
Employee of the Company.

ARTICLE II
RESTRICTIONS AND LIMITATIONS

SECTION 2.2. EFFECT ON OTHER AGREEMENTS. Nothing herein contained
shall be deemed to modify the terms of any other agreement between the Company
and Optionee.

4
<PAGE> 7
ARTICLE III
ADMINISTRATIVE PROVISIONS

SECTION 3.1. NOTICES. Any notice to be given under the terms of
this Option Agreement shall be addressed to the Parties as follows:

If to the Company:

Silverleaf Resorts, Inc.
Attn: Robert E. Mead, Chief Executive Officer
1221 Riverbend Drive, Suite 120
P.O.Box 358
Dallas, Texas 75221

If to Optionee:

Harry J. White, Jr.
2624 Cedar View Drive
Arlington, Texas 76006

SECTION 3.2. BINDING EFFECT. This Option Agreement shall be
binding upon the heirs, executors, administrators, and successors of the
parties hereto.

SECTION 3.3. NONQUALIFIED OPTIONS. The options granted hereunder
are intended to be Nonqualified Options as defined in the Plan.

5
<PAGE> 8
EXECUTED this 29th day of June, 1998, but EFFECTIVE the 29th day of
June, 1998.

SILVERLEAF RESORTS, INC., the Company

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

/s/ HARRY J. WHITE, JR.
--------------------------------------
HARRY J. WHITE, JR.

<PAGE> 1
EXHIBIT 10.6

BILL OF SALE AND BLANKET ASSIGNMENT

The undersigned, CROWN RESORT CO. LLC, a Delaware limited liability
company ("Seller"), for and in consideration of the sum of Ten and No/100
Dollars ($10.00) cash in hand paid by SILVERLEAF RESORTS, INC., a Texas
corporation ("Purchaser"), the receipt and sufficiency of which are hereby
acknowledged by Seller, has BARGAINED, SOLD, ASSIGNED, TRANSFERRED, AND
DELIVERED, and by these presents does BARGAIN, SELL, ASSIGN, TRANSFER AND
DELIVER unto Purchaser, the following:

1. All of Seller's right, title and interest in and to all of the
management agreements described in Exhibit "A" attached hereto and made a part
hereof for all purposes (the "Management Agreements").

2. The personal property described in Exhibit "B" attached hereto
and made a part hereof for all purposes (the "Personal Property").

3. All assets of Seller of any kind whatsoever that were acquired
by Seller from National American Corporation, LML Resort Corporation, Quail
Hollow Village, Inc., The Kinston Corporation, Foxwood Corporation, The Villas
of Hickory Hills, Inc., Carriage Manor Corporation, Lake Tansi Village, Inc.,
Wolf Run Manor Corporation and Westwind Manor Corporation (hereinafter
collectively referred to as "NACO") in connection with Seller's acquisition of
assets from NACO pursuant to the closing of the Purchase and Sale Agreement
dated November 21, 1996, between NACO and Seller, other than timeshare
inventory that has been sold by Seller subsequent to such acquisition and any
other assets or items that have been disposed of by Seller subsequent to such
acquisition in the ordinary course of Seller's business. Included in this
Assignment are any assets acquired by Seller from NACO at the secondary closing
which occurred on or about January 7, 1998.

4. All of Seller's right, title and interest in and to the names
"Crown Resort" and "Crown"; provided, however, that Seller shall retain the
right to keep the entity now known as "Crown Resort Co. LLC" in existence as
long as such entity is not actively conducting business from and after the date
hereof.

TO HAVE AND TO HOLD the above Management Agreements, Personal
Property, rights, and interests unto Purchaser, its successors and assigns,
forever. Seller does hereby bind itself, its successors and assigns, to
forever warrant and defend the title unto the above-described Personal Property
unto the Purchaser, its successors and assigns, against the lawful claims of
any and all persons whomsoever.

Seller represents and warrants that title to the Personal Property is
free and clear of all liens, claims, and encumbrances of any kind whatsoever.

EXECUTED this 28th day of May, 1998.

SELLER:

CROWN RESORT CO. LLC, a Delaware limited
liability company

By: /s/ Richard W. Dickson
------------------------------------
Name: Richard W. Dickson
Its: Member
<PAGE> 2
EXHIBIT "A"
MANAGEMENT AGREEMENTS LIST

1. Management Agreement dated December 9, 1982, as amended,
between Capricorn Owners' Association, Inc. and American Leisure Resorts, Inc.
and subsequently assigned to LML Resort Corporation by an Assignment and
Assumption Agreement dated February 4, 1985, and subsequently assigned to Crown
Resort Co. LLC pursuant to a Bill of Sale, Assignment and Assumption Agreement
dated November 26, 1996.

2. Management Agreement dated September 11, 1985, as amended,
between Dogwood Hills Condominium Association, Inc. and LML Corporation and
subsequently assigned to Crown Resort Co. LLC pursuant to a Bill of Sale,
Assignment and Assumption Agreement dated November 26, 1996.

3. Management Agreement dated June 14, 1984, as amended, between
The Pines Condominium Owners' Association, Inc. and LML Resort Corporation and
subsequently assigned to Crown Resort Co. LLC pursuant to a Bill of Sale,
Assignment and Assumption Agreement dated November 26, 1996.

4. Management Agreement dated January 23, 1986, as amended,
between Quail Hollow Village Association and Quail Hollow Village, Inc. and
subsequently assigned to Crown Resort Co. LLC pursuant to a Bill of Sale,
Assignment and Assumption Agreement dated November 26, 1996.

5. Management Agreement dated May 13, 1981, as amended, between
Kinston Manor Association and The Kinston Corporation and subsequently assigned
to Crown Resort Co. LLC pursuant to a Bill of Sale, Assignment and Assumption
Agreement dated November 26, 1996.

6. Management Agreement dated January 20, 1987, as amended,
between Villas of Foxwood Hills Association, Inc. and Foxwood Corporation and
subsequently assigned to Crown Resort Co. LLC pursuant to a Bill of Sale,
Assignment and Assumption Agreement dated November 26, 1996.

7. Management Agreement dated June 14, 1982, as amended, between
The Villas of Hickory Hills, Inc. and Hickory Resort Association, Inc. and
subsequently assigned to Crown Resort Co. LLC pursuant to a Bill of Sale,
Assignment and Assumption Agreement dated November 26, 1996.

8. Management Agreement dated March 18, 1986, as amended, between
Carriage Manor Property Owner Association, Inc. and Carriage Manor Corporation
and subsequently assigned to Crown Resort Co. LLC pursuant to a Bill of Sale,
Assignment and Assumption Agreement dated November 26, 1996.

9. Management Agreement dated July 12, 1979, as amended, between
Hiawatha Association and Lake Tansi Village, Inc. and subsequently assigned to
Crown Resort Co. LLC pursuant to a Bill of Sale, Assignment and Assumption
Agreement dated November 26, 1996.

10. Management Agreement dated October 27, 1980, as amended,
between Hiawatha Association and Lake Tansi Village, Inc. and subsequently
assigned to Crown Resort Co. LLC pursuant to a Bill of Sale, Assignment and
Assumption Agreement dated November 26, 1996.

11. Management Agreement dated August 3, 1982, as amended, between
Hiawatha Manor West Association, Inc. and Lake Tansi Village, Inc. and
subsequently assigned to Crown Resort Co. LLC pursuant to a Bill of Sale,
Assignment and Assumption Agreement dated November 26, 1996.

12. Management Agreement dated January 16, 1984, as amended,
between Silverwoods Association and Wolf Run Manor Corporation and subsequently
assigned to Crown
<PAGE> 3
Resort Co. LLC pursuant to a Bill of Sale, Assignment and Assumption Agreement
dated November 26, 1996.

13. Management Agreement dated September 18, 1981, as amended,
between Wolf Run Manor Association and Wolf Run Manor Corporation and
subsequently assigned to Crown Resort Co. LLC pursuant to a Bill of Sale,
Assignment and Assumption Agreement dated November 26, 1996.

14. Management Agreement dated March 12, 1985, as amended, between
Westwind Manor Resort Association, Inc. and Westwind Manor Corporation and
subsequently assigned to Crown Resort Co. LLC pursuant to a Bill of Sale,
Assignment and Assumption Agreement dated November 26, 1996.

<ARTICLE> 5
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 30,389
<SECURITIES> 0
<RECEIVABLES> 152,220
<ALLOWANCES> 20,259
<INVENTORY> 42,463
<CURRENT-ASSETS> 92,796
<PP&E> 33,917
<DEPRECIATION> 6,150
<TOTAL-ASSETS> 252,524
<CURRENT-LIABILITIES> 17,591
<BONDS> 75,000
0
0
<COMMON> 133
<OTHER-SE> 137,488
<TOTAL-LIABILITY-AND-EQUITY> 252,524
<SALES> 62,872
<TOTAL-REVENUES> 74,190
<CGS> 10,549
<TOTAL-COSTS> 48,343
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 7,856
<INTEREST-EXPENSE> 3,333
<INCOME-PRETAX> 14,658
<INCOME-TAX> 5,584
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<NET-INCOME> 9,074
<EPS-PRIMARY> 0.74
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</TABLE>