Ex. 10.3
[SILVERLEAF RESORTS
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
Second Amended and Restated 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
Second Amended and Restated Revolving Credit Agreement dated as of
July 30, 2004, as amended from time to time (as so amended, 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
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