Ex. 10.4
[Silverleaf letterhead]
December 16, 2005
Sovereign
Bank
One Financial
Plaza
Providence,
Rhode Island 02903
Attention: Mr.
John T. Baer
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Re:
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Termination of
Inventory and Receivables Revolving Credit Agreement
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Ladies and
Gentlemen:
Reference is hereby made to the revolving credit
facility (the "Credit Facility") established pursuant to a certain
Inventory and Receivables Revolving Credit Agreement dated as of
July 30, 2004, as amended from time to time (the "Credit
Agreement"), among Silverleaf Resorts, Inc. (the "Borrower"),
Sovereign Bank, as agent (in such capacity, the "Agent"), and
Sovereign Bank and the other lenders party thereto (the "Lenders").
Capitalized terms used herein without definition have the meanings
specified therefor in the Credit Agreement.
This letter will confirm that the Borrower has
requested that the Credit Facility be terminated, and the Agent and
the Lenders have agreed to permit such termination, on the
following terms and conditions:
1. Immediately upon the occurrence of the
Termination Effective Date (as hereafter defined), and provided
that the Termination Effective Date has occurred by 2:00 p.m.,
Eastern Time, on December 30, 2005, the Agent and the Borrower
agree that (a) the Credit Facility and the Commitments shall
automatically and without need for further documentation be
terminated in their entirety, (b) the Borrower shall no longer
request, and the Lenders shall no longer advance, any Loans or
other amounts under the Credit Agreement or any other Loan
Documents, and (c) the Agent promptly shall (i) return to the
Borrower any items of Collateral in its possession or in the
possession of its custodian, (ii) cause each Lender to return the
original Notes marked "PAID" (or words to a similar effect) to the
Borrower, and (iii) execute and/or authorize to be filed and/or
recorded all instruments necessary to evidence the termination of
all interests of the Agent and the Lenders in any Collateral,
to
