Exhibit 10.1
CONTRACT OF SALE
This Agreement is entered into by and between SILVERLEAF RESORTS, INC.,
a Texas corporation ("Seller"), and REED KLINE ("Purchaser").
WITNESSETH:
FOR AND IN CONSIDERATION of the promises, undertakings, and mutual
covenants of the parties herein set forth, Seller hereby agrees to sell and
Purchaser hereby agrees to purchase and pay for all that certain property
hereinafter described in accordance with the following terms and conditions:
ARTICLE I
PROPERTY
The conveyance by Seller to Purchaser shall include the following
described tracts or parcels of land, together with all and singular the rights
and appurtenances pertaining to such land including any right, title and
interest of Seller in and to adjacent strips or gores, streets, alleys, or
rights-of-way and all rights of ingress and egress thereto:
All of the Southeast one-quarter of Section 11; all of the
East one-half of the Northeast one-quarter of Section 14 lying North of
the public road known as F Highway; and all of the Northwest
one-quarter of the Northeast one-quarter of Section 14; all in Township
53, Range 33, in the City of Smithville, Clay County, Missouri,
containing approximately 254.40 acres, more or less, and being more
particularly described by metes and bounds on Exhibit "A" attached
hereto and made a part hereof for all purposes.
Hereafter the aforesaid real property is referred to as the "Land."
-1-
The conveyance by Seller to Purchaser shall also include all buildings,
fixtures and other improvements on the Land (the "Improvements").
Hereinafter all property being conveyed to Purchaser by Seller pursuant
to this Contract including the Land and the Improvements are sometimes referred
to collectively as the "Subject Property."
ARTICLE II
PURCHASE PRICE
The purchase price to be paid by Purchaser to Seller for the Subject
Property shall be the sum of One Million Eight Hundred Twenty Thousand and
No/100 Dollars ($1,820,000.00). The purchase price shall be payable all in cash
at the closing.
ARTICLE III
EARNEST MONEY
Within two (2) business days after final execution of this Contract by
all parties hereto, Purchaser shall deliver Purchaser's check in the amount of
Ten Thousand and No/100 Dollars ($10,000.00) to Thomson Title Co., 700 South 291
Highway, Suite 100, Liberty, Missouri 64068 (the "Title Company"). The Title
Company shall immediately cash the earnest money check and deposit the proceeds
thereof in an interest bearing account, the earnings from which shall accrue to
the benefit of Purchaser (hereinafter the proceeds of the earnest money check
shall be referred to as the "Earnest Money").
-2-
In the event that this Contract is closed, then all Earnest Money shall
be applied in partial satisfaction of the purchase price. In the event that this
Contract is not closed, then the Earnest Money shall be disbursed in the manner
provided for elsewhere herein.
ARTICLE IV
PRE-CLOSING OBLIGATIONS OF SELLER AND PURCHASER
Within ten (10) days from the date of execution of this Contract,
Seller shall furnish to Purchaser, the following information (collectively, the
"Due Diligence Items"):
(a) The most recent survey of the Subject Property in
possession of Seller; Purchaser shall be entitled to have this survey
updated and recertified as of a date subsequent to the date of
execution of this Contract and, if Purchaser does so, shall provide
copies thereof to Seller; unless otherwise agreed by Seller and
Purchaser, the metes and bounds description contained in the survey, as
updated, shall be the legal description employed in the documents of
conveyance of the Subject Property; and
b. A current commitment (the "Title Commitment") for the
issuance of an owner's policy of title insurance to the Purchaser from
the Title Company, together with good and legible copies of all
documents constituting exceptions to Seller's title as reflected in the
Title Commitment.
ARTICLE V
TITLE INSPECTION PERIOD
Purchaser shall have a period of time commencing on the date of
execution of this Contract and expiring on the date of expiration of the
Inspection Period (as defined hereinbelow) within which to review and approve
the status of Seller's title to the Subject Property (the "Title Review
Period"). If the information to be provided to or obtained by Purchaser pursuant
to the provisions of Article IV hereinabove reflects or discloses any defect,
exception or other matter affecting the Subject Property ("Title Defects") that
is unacceptable to Purchaser, then prior to the expiration of the Inspection
Period Purchaser shall provide Seller with written notice of Purchaser's
objections.
-3-
Seller may, at its sole option, elect to cure or remove the objections raised by
Purchaser; provided, however, that Seller shall have no obligation to do so.
Should Seller elect to attempt to cure or remove the objections, Seller shall
have ten (10) days from the date of Purchaser's written notice of objections
(the "Cure Period") in which to accomplish the cure. In the event Seller either
elects not to cure or remove the objections or is unable to accomplish the cure
prior to the expiration of the Cure Period, then Seller shall so notify
Purchaser in writing specifying which objections Seller does not intend to cure,
and then Purchaser shall be entitled, as Purchaser's sole and exclusive
remedies, either to terminate this Agreement by providing written notice of
termination to Seller within ten (10) days from the date on which Purchaser
receives Seller's no-cure notice or waive the objections and close this
transaction as otherwise contemplated herein. If Purchaser shall fail to notify
Seller in writing of any objections to the state of Seller's title to the
Subject Property as shown by the Survey and Title Commitment, then Purchaser
shall be deemed to have no objections to the state of Seller's title to the
Subject Property as shown by the Survey and Title Commitment, and any exceptions
to Seller's title which have not been objected to by Purchaser and which are
shown on the Survey or described in the Title Commitment shall be considered to
be "Permitted Exceptions." It is further understood and agreed that any Title
Defects which have been objected to by Purchaser and which are subsequently
waived by Purchaser shall be Permitted Exceptions.
ARTICLE VI
INSPECTION PERIOD
Purchaser, at Purchaser's sole expense, shall have the right to conduct
a feasibility, environmental, engineering and physical study of the Subject
Property for a period of time commencing on the date of execution of this
Contract and expiring twenty (20) days thereafter (the
-4-
"Inspection Period"). Purchaser and Purchaser's duly authorized agents or
representatives shall be permitted to enter upon the Subject Property at all
reasonable times during the Inspection Period in order to conduct engineering
studies, soil tests and any other inspections and/or tests that Purchaser may
deem necessary or advisable. Purchaser further agrees to indemnify and hold
Seller harmless from any claims or damages, including reasonable attorneys'
fees, resulting from Purchaser's inspection of the Subject Property. In the
event that the review and/or inspection conducted by this paragraph shows any
fact, matter or condition to exist with respect to the Subject Property that is
unacceptable to Purchaser, in Purchaser's sole discretion, or in the event that
Purchaser is unable to arrange satisfactory financing for Purchaser's
acquisition of the Subject Property, or if for any reason Purchaser determines
that purchase of the Subject Property is not feasible, then Purchaser shall be
entitled, as Purchaser's sole remedy, to cancel this Contract by providing
written notice of cancellation to Seller prior to the expiration of the
Inspection Period. If Purchaser shall provide written notice of cancellation
prior to the expiration of the Inspection Period, then this Contract shall be
cancelled, all Earnest Money shall be immediately returned to Purchaser by the
Title Company, and thereafter neither Seller nor Purchaser shall have any
continuing obligations one unto the other.
ARTICLE VII
REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER
Seller represents and warrants to Purchaser that at closing Seller will
have good and marketable fee simple title to the Subject Property free and clear
of all liens, encumbrances, covenants, restrictions, rights-of-way, easements,
and any other matters affecting title to the Subject Property except for the
Permitted Exceptions, and at closing, Seller will be in a position to convey
-5-
the Subject Property to Purchaser free and clear of all liens, encumbrances,
covenants, restrictions, rights-of-way, easements and other such matters
affecting title except for the Permitted Exceptions.
Seller further covenants and agrees with Purchaser that, from the date
hereof until the closing, neither Seller nor its subsidiaries shall sell,
assign, or convey any right, title, or interest whatsoever in or to the Subject
Property, or create or permit to exist any lien, security interest, easement,
encumbrance, charge, or condition affecting the Subject Property (other than the
Permitted Exceptions) without promptly discharging the same prior to closing.
Seller hereby further represents and warrants to Purchaser, to the best
of Seller's knowledge, as follows:
a. There are no actions, suits, or proceedings pending or, to
the best of Seller's knowledge, threatened against Seller or otherwise
affecting any portion of the Subject Property, at law or in equity, or
before or by any federal, state, municipal, or other governmental
court, department, commission, board, bureau, agency, or
instrumentality, domestic or foreign;
b. The execution by Seller of this Contract and the
consummation by Seller of the sale contemplated hereby have been duly
authorized, and do not, and, at the closing date, will not, result in a
breach of any of the terms or provisions of, or constitute a default
under any indenture, agreement, instrument, or obligation to which
Seller is a party or by which the Subject Property or any portion
thereof is bound, and do not, and at the closing date will not,
constitute a violation of any regulation affecting the Subject
Property; and
c. Seller has not received any notice of any violation of any
ordinance, regulation, law, or statute of any governmental agency
pertaining to the Subject Property or any portion thereof.
All of the foregoing representations and warranties of Seller are made by Seller
both as of the date hereof and as of the date of the closing hereunder.
Notwithstanding the foregoing or anything to the contrary contained herein, it
is understood and agreed that the representations and warranties set forth
hereinabove shall survive the closing of this Contract only for a period of six
(6) months following the closing date, but not thereafter, and Seller shall have
no liability of any kind
-6-
whatsoever for any breach thereof except to the extent a claim is asserted
against Seller within such six (6) month period.
ARTICLE VIII
CLOSING
The closing hereunder shall take place at the offices of the Title
Company. The closing shall occur on or before November 15, 2003. Purchaser shall
notify Seller at least five (5) days in advance of the exact time and date of
closing.
ARTICLE IX
SELLER'S OBLIGATIONS AT CLOSING
At the closing, Seller shall do the following:
a. Deliver to Purchaser a special warranty deed covering the
Subject Property, duly signed and acknowledged by Seller, which deed
shall be in form reasonably acceptable to Purchaser for recording and
shall convey to Purchaser good and marketable title to the Subject
Property, free and clear of all liens, rights-of-way, easements, and
other matters affecting title to the Subject Property, except for the
Permitted Exceptions.
b. Deliver or cause to be delivered to Purchaser an ALTA
owner's form of title insurance policy (the "Title Policy") insuring
Purchaser in the amount of the purchase price that Purchaser has
acquired good and marketable title to the Subject Property, subject
only to the Permitted Exceptions. Purchaser shall be entitled to
request the Title Company to provide, at Purchaser's sole cost and
expense, such endorsements (or amendments) to the Title Policy as
Purchaser may reasonably require so long as such endorsements or
amendments impose no additional liability on Seller or delay the
closing. Purchaser acknowledges and agrees that the Title Policy may be
actually delivered within a reasonable time following the closing so
long as Purchaser has received at closing a current binding title
commitment obligating the Title Company to deliver the Title Policy.
Purchaser shall pay the premium for a standard owner's form of title
insurance policy in the amount of the purchase price; the cost of any
title endorsements required by Purchaser, and the cost of reinsurance
reasonably required by Purchaser, shall also be paid by Purchaser.
-7-
c. Deliver a non-withholding statement that will satisfy the
requirements of Section 1445 of the Internal Revenue Code so that
Purchaser is not required to withhold any portion of the purchase price
for payment to the Internal Revenue Service.
d. Provide such evidence or other documents that may be
reasonably required by the Title Company evidencing the status and
capacity of Seller and the authority of the person or persons who are
executing the various documents on behalf of Seller in connection with
the sale of the Subject Property.
ARTICLE X
PURCHASER'S OBLIGATIONS AT CLOSING
At the closing, Purchaser shall deliver to Seller the purchase price in
cash.
ARTICLE XI
COSTS AND ADJUSTMENTS
At closing, the following items shall be adjusted or prorated between
Seller and Purchaser:
a. Any real estate transfer taxes or sales taxes payable in
connection with the sale of the Subject Property shall be paid in full
by Purchaser.
b. Ad valorem taxes for the Subject Property for the current
calendar year shall be prorated as of the date of closing, and Seller
shall pay to Purchaser in cash at closing Seller's pro rata portion of
such taxes. Seller's pro rata portion of such taxes shall be based upon
taxes actually assessed for the current calendar year or, if for any
reason such taxes for the Subject Property have not been actually
assessed, such proration shall be based upon the amount of such taxes
for the immediately preceding calendar year, and adjusted by cash
settlement when exact amounts are available. However, anything herein
to the contrary notwithstanding, any tax abatement or refund for a
period of time prior to closing shall belong to Seller.
c. All other closing costs, including but not limited to,
recording and escrow fees shall be divided equally between Seller and
Purchaser; provided, however, that Seller and Purchaser shall each be
responsible for the fees and expenses of their respective attorneys.
Seller agrees to indemnify and hold Purchaser harmless of and from any
and all liabilities, claims, demands, suits, and judgments, of any kind or
nature (except those items which under the
-8-
terms of this Contract specifically become the obligation of Purchaser), brought
by third parties and based on events occurring on or before the date of closing
and which are in any way related to the ownership, maintenance, or operation of
the Subject Property, and all expenses related thereto, including, but not
limited to, court costs and attorneys' fees.
Purchaser agrees to indemnify and hold Seller harmless of and from any
and all liabilities, claims, demands, suits, and judgments, of any kind or
nature, brought by third parties and based on events occurring subsequent to the
date of closing and which are in any way related to the ownership, maintenance
or operation of the Subject Property, and all expenses related thereto,
including, but not limited to, court costs and attorneys' fees.
Notwithstanding anything to the contrary contained herein, the
indemnities set forth in this Article XI shall survive the closing hereunder.
ARTICLE XII
ENTRY ON PROPERTY
Purchaser, Purchaser's agents, employees, servants, or nominees, are
hereby granted the right to enter upon the Subject Property at any time prior to
closing for the purpose of inspecting the Subject Property and conducting such
engineering and mechanical tests as Purchaser may deem necessary or advisable,
any such inspections and tests to be made at Purchaser's sole expense. Purchaser
agrees to indemnify and hold Seller harmless from and against any and all
losses, damages, costs, or expenses incurred by Seller as a result of any
inspections or tests made by Purchaser.
-9-
ARTICLE XIII
POSSESSION OF PROPERTY
Possession of the Property free and clear of all uses and
encroachments, except the Permitted Exceptions, shall be delivered to Purchaser
at closing.
ARTICLE XIV
NOTICES
All notices, demands, or other communications of any type given by the
Seller to the Purchaser, or by the Purchaser to the Seller, whether required by
this Contract or in any way related to the transaction contracted for herein,
shall be void and of no effect unless given in accordance with the provisions of
this paragraph. All notices shall be in writing and delivered to the person to
whom the notice is directed, either in person, by facsimile transmission, or by
United States Mail, as a registered or certified item, return receipt requested.
Notices delivered by mail shall be deemed given when deposited in a post office
or other depository under the care or custody of the United States Postal
Service, enclosed in a wrapper with proper postage affixed, addressed as
follows:
SELLER: Silverleaf Resorts, Inc.
1221 Riverbend Drive
Suite 120
Dallas, Texas 75247
Attn: Robert E. Mead
Telephone No.: (214) 631-1166
Facsimile No.: (214) 905-0514
With Required Copy to: Meadows, Owens, Collier, Reed, Cousins & Blau, L.L.P.
3700 NationsBank Plaza
901 Main Street
Dallas, Texas 75202
Attn: George R. Bedell, Esq.
Telephone No.: (214) 749-2448
Facsimile No.: (214) 747-3732
PURCHASER: Reed Kline
3801 Beck Road
St. Joseph, Missouri 64506
-10-
With Required Copy to: Tim Dougherty
P. O. Box 1580
Kansas City, Missouri 64079
Telephone No.: (816) 223-5701
ARTICLE XV
REMEDIES
In the event all conditions of this Contract are satisfied and in the
event all covenants and agreements to be performed prior to closing are fully
performed, and in the event that performance of this Contract is tendered by the
Purchaser and the sale is not consummated through a default on the part of
Seller on the closing date, then Purchaser shall have the option (i) to
terminate this Contract by providing written notice thereof to Seller, in which
event the Earnest Money shall be returned immediately to Purchaser and the
parties hereto shall have no further liabilities or obligations one unto the
other; (ii) to waive any defect or requirement and close this Contract; or (iii)
to sue Seller for specific performance. In no event shall Purchaser have the
right to sue Seller for damages, bring any action against the Subject Property,
or file a notice of lis pendens regarding any claim of Purchaser other than a
claim for specific performance.
In the event that Purchaser fails to timely comply with all conditions,
covenants, and obligations Purchaser has hereunder, such failure shall be an
event of default, and Seller's sole remedy shall be to receive and retain the
Earnest Money. The Earnest Money is agreed upon by and between the Seller and
Purchaser as liquidated damages due to the difficulty and inconvenience of
ascertaining and measuring actual damages, and the uncertainty thereof, and no
other damages, rights, or remedies shall in any case be collectible,
enforceable, or available to the Seller other than
-11-
in this paragraph defined, and Seller shall accept the Earnest Money as Seller's
total damages and relief.
ARTICLE XVI
ASSIGNMENT
Purchaser shall have the right to nominate who shall take title and who
shall succeed to Purchaser's duties and obligations hereunder, or assign this
Contract to any person, firm, corporation, or other entity which Purchaser may,
at Purchaser's sole option, choose, and from and after such nomination or
assignment, wherever in this Contract reference is made to Purchaser such
reference shall mean the nominee or assignee who shall succeed to all the rights
of Purchaser hereunder. Any such assignment shall not be effective until Seller
has received written notice thereof; further, such assignment shall not relieve
Purchaser of any of its obligations or liabilities hereunder.
Further, either party may, as appropriate assign rights or obligations
under this agreement to a "Qualified Intermediary" in order to meet the
requirements as set forth in Section 1031 of the Internal Revenue code. Such
assignment shall in no way increase any obligations on the part of the
non-assigning party, and shall not relieve the assigning party of any
obligations hereunder to the detriment of the non-assigning party. All parties
agree to execute the documents and instruments reasonably necessary to
accomplish such an exchange.
ARTICLE XVII
INTERPRETATION AND APPLICABLE LAW
-12-
This Agreement shall be construed and interpreted in accordance with
the laws of the State of Missouri and venue for all suits shall be in Circuit
Court in Clay County, Missouri. Where required for proper interpretation, words
in the singular shall include the plural; the masculine gender shall include the
neuter and the feminine, and vice versa. The terms "successors and assigns"
shall include the heirs, administrators, executors, successors, and assigns, as
applicable, of any party hereto.
ARTICLE XVIII
AMENDMENT
This Contract may not be modified or amended, except by an agreement in
writing signed by the Seller and the Purchaser. The parties may waive any of the
conditions contained herein or any of the obligations of the other party
hereunder, but any such waiver shall be effective only if in writing and signed
by the party waiving such conditions and obligations.
ARTICLE XIX
AUTHORITY
Each person executing this Contract warrants and represents that he is
fully authorized to do so.
ARTICLE XX
ATTORNEYS' FEES
In the event it becomes necessary for either party to file a suit to
enforce this Contract or any provisions contained herein, the prevailing party
shall be entitled to recover, in addition to all other remedies or damages,
reasonable attorneys' fees and costs of court incurred in such suit.
-13-
ARTICLE XXI
DESCRIPTIVE HEADINGS
The descriptive headings of the several paragraphs contained in this
Contract are inserted for convenience only and shall not control or affect the
meaning or construction of any of the provisions hereof.
ARTICLE XXII
ENTIRE AGREEMENT
This Contract (and the items to be furnished in accordance herewith)
constitutes the entire agreement between the parties pertaining to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
understandings of the parties in connection therewith. No representation,
warranty, covenant, agreement, or condition not expressed in this Contract shall
be binding upon the parties hereto or shall affect or be effective to interpret,
change, or restrict the provisions of this Contract.
ARTICLE XXIII
MULTIPLE ORIGINALS ONLY
Numerous copies of this Contract may be executed by the parties hereto.
Each such executed copy shall have the full force and effect of an original
executed instrument.
ARTICLE XXIV
ACCEPTANCE
-14-
Purchaser shall have until 5:00 o'clock p.m., October 14, 2003, to
execute and return a fully executed original of this Contract to Seller,
otherwise this Contract shall become null and void. Time is of the essence of
this Contract. The date of execution of this Contract by Seller shall be the
date of execution of this Contract. If the final date of any period falls upon a
Saturday, Sunday, or legal holiday under the laws of the State of Missouri, then
in such event the expiration date of such period shall be extended to the next
day which is not a Saturday, Sunday, or legal holiday under the laws of the
State of Missouri.
ARTICLE XXV
REAL ESTATE COMMISSION
In the event that this Contract closes, but not otherwise, Seller
agrees to pay at closing a real estate commission to Reece & Nichols Realtors
("Broker"), such commission to be in the amount of seven percent (7%). Seller
represents and warrants to Purchaser that Seller has not contacted or entered
into any agreement with any other real estate broker, agent, finder, or any
other party in connection with this transaction, and that Seller has not taken
any action which would result in any other real estate broker's, finder's, or
other fees or commissions being due and payable to any other party with respect
to the transaction contemplated hereby. Purchaser hereby represents and warrants
to Seller that Purchaser has not contracted or entered into any agreement with
any other real estate broker, agent, finder, or any other party in connection
with this transaction, and that Purchaser has not taken any action which would
result in any other real estate broker's, finder's, or other fees or commissions
being due or payable to any other party with respect to the transaction
contemplated hereby. Each party hereby indemnifies and agrees to hold the other
party harmless from any loss, liability, damage, cost, or expense (including
reasonable attorneys' fees) resulting to
-15-
the other party by reason of a breach of the representation and warranty made by
such party herein. Notwithstanding anything to the contrary contained herein,
the indemnities set forth in this Article XXV shall survive the closing.
EXECUTED on this the 8th day of October, 2003.
SELLER:
SILVERLEAF RESORTS, INC., a Texas corporation
By: /S/ ROBERT E. MEAD
----------------------------------------
Name: Robert E. Mead
Its: CEO
EXECUTED on this the 8th day of October, 2003.
PURCHASER:
/S/ REED KLINE
----------------------------------------------
REED KLINE
RECEIPT OF EARNEST MONEY AND ONE (1) EXECUTED COUNTERPART OF THIS CONTRACT IS
HEREBY ACKNOWLEDGED:
TITLE COMPANY:
THOMSON TITLE COMPANY
By: /S/ ROBIN GREENWALD
---------------------------
Name: Robin Greenwald
Its: Escrow Closer
List of Exhibits:
Exhibit A--Legal Description
-16-