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EXHIBIT 10.51
CONTRACT OF SALE
This Agreement is entered into by and between NATIONAL AMERICAN
CORPORATION, a Nevada corporation ("Seller"), and SILVERLEAF RESORTS, INC., a
Texas corporation ("Purchaser").
W I T N E S S E T H :
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, or Seller's subsidiary corporation that
holds title, to Purchaser shall include the accounts receivable more
particularly described on Exhibit "A" attached hereto and made a part hereof
for all purposes, together with all notes and security documents evidencing
and/or securing payment of said accounts receivable, which have been generated
from the sale of Unit Weeks at the following properties once operated by
Seller:
1. Capricorn Complex located in Talladega County, Alabama;
2. Dogwood Hills located in Talladega County, Alabama;
3. The Pines located in Talladega County, Alabama;
4. Quail Hollow Village located in Luzerne County, Pennsylvania
5. Carriage Manor located in Franklin County, North Carolina;
6. Kinston Manor located in Oconee County, South Carolina;
7. Villas of Foxwood Hills located in Oconee County, South
Carolina;
8. Villas of Hickory Hills located in Jackson County,
Mississippi;
9. Hiawatha Manor/Hiawatha Manor I located in Cumberland County,
Tennessee;
10. Hiawatha Manor West located in Cumberland County, Tennessee;
11. Silverwoods located in Clearfield County, Pennsylvania;
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12. Wolf Run Manor located in Clearfield County, Pennsylvania;
13. Westwind Manor located in Wise County, Texas.
Hereafter the aforesaid accounts receivables are 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 an amount equal to the aggregate outstanding principal
balance owed on the Subject Property as of the date of closing hereunder. It is
understood that the balance currently owed on the Subject Property is
approximately $175,000.00. The purchase price shall be payable all in cash at
the closing.
ARTICLE III
REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER
Seller represents and warrants to Purchaser that, notwithstanding the
fact that title to certain of the Subject Property is currently held by
subsidiaries of Seller, Seller will have at closing good title to the Subject
Property free and clear of all liens and encumbrances affecting title to the
Subject Property, and at closing, Seller will be in a position to convey the
Subject Property to Purchaser (free and clear of all liens and encumbrances
affecting title).
Seller further covenants and agrees with Purchaser that, from the date
hereof until the closing, Seller shall not 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, encumbrance, charge, or condition
affecting the Subject Property 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 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; and
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.
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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 two
(2) years following the closing date, but not thereafter, and Seller shall have
no liability of any kind whatsoever for any breach thereof except to the extent
a claim is asserted against Seller within such two (2) year period.
ARTICLE IV
CONDITIONS PRECEDENT TO CLOSING
The obligation of Purchaser to close this Contract shall, at the
option of Purchaser, be subject to the following conditions precedent:
I. All of the representations, warranties and agreements of
Seller set forth in this Contract shall be true and correct in all
material respects as of the date hereof and at closing, and Seller
shall not have on or prior to closing, failed to meet, comply with or
perform in any material respect any conditions or agreements on
Seller's part as required by the terms of this Contract; and
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b. No material and substantial change shall have occurred with
respect to the Subject Property.
If any such condition is not fully satisfied by closing, Purchaser may
terminate this Contract by written notice to Seller whereupon this Contract
shall be cancelled and thereafter neither Seller nor Purchaser shall have any
continuing obligations one unto the other.
ARTICLE V
CLOSING
The closing hereunder shall take place at the offices of Meadows,
Owens, Collier, Reed, Cousins & Blau, L.L.P., 3700 NationsBank Plaza, 901 Main
Street, Dallas, Texas 75202. The closing shall occur on or before thirty (30)
days from the date of execution of this Contract. Purchaser shall notify Seller
at least five (5) days in advance of the exact time and date of closing.
ARTICLE VI
SELLER'S OBLIGATIONS AT CLOSING
At the closing, Seller shall do the following:
a. Deliver an assignment, in form reasonably acceptable to
Purchaser, duly executed and acknowledged by Seller, conveying and/or
assigning to Purchaser the Subject Property.
b. Deliver all promissory notes and other security documents
evidencing and/or securing payment of the Subject Property to
Purchaser, with all notes being endorsed by Seller, or Seller's
subsidiary, as the case may be, so as to be payable to Purchaser.
c. Deliver a release in which Seller forever quitclaims and
releases any interest, either as an owner or as a lienholder, in any
Unit Weeks at the properties listed in Article I hereinabove.
d. Deliver such evidence or other documents that may be
reasonably necessary 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.
e. 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.
f. Deliver to Purchaser any other documents or items necessary
or convenient in the reasonable judgment of Purchaser to carry out the
intent of the parties under this Contract.
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ARTICLE VII
PURCHASER'S OBLIGATIONS AT CLOSING
At the closing, Purchaser shall deliver to Seller the purchase price
in cash.
ARTICLE VIII
COSTS AND ADJUSTMENTS
At closing, the following items shall be adjusted or prorated between
Seller and Purchaser:
a. Any transfer taxes or sales taxes payable in connection with
the sale of the Subject Property shall be paid in full by Purchaser.
b. 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 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 of the Subject Property, and all expenses related
thereto, including, but not limited to, court costs and attorneys' fees;
provided, however, that Seller shall not be required to indemnify Purchaser
against claims relating to events occurring prior to the date of closing but
which are provoked by the collection practices of Purchaser from and after the
date of closing hereunder.
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 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 VIII shall survive the closing hereunder.
ARTICLE IX
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
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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: National American Corporation
2711 LBJ Freeway, Suite 200
Dallas, Texas 75234
Attn: Kenneth E. Hendrycy, Vice President
Telephone No.: (972) 243-2228
Facsimile No.: (972) 488-5030
Purchaser: 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
ARTICLE X
REMEDIES
In the event that Seller fails to timely comply with all conditions,
covenants and obligations of Seller hereunder, such failure shall be an event
of default and Purchaser shall have the option (i) to terminate this Contract
by providing written notice thereof to Seller 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. Except as otherwise set forth herein, in no event shall
Purchaser have the right to sue Seller for damages.
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 from
Purchaser liquidated damages in the amount of Ten Thousand and No/100
($10,000.00). The foregoing liquidated damages are agreed upon by and between
Seller and
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Purchaser 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 in this paragraph defined. Seller shall
accept such liquidated damages as Seller's total damages and relief.
ARTICLE XI
ASSIGNMENT
Purchaser shall not, without Seller's consent, assign this Contract.
Notwithstanding the foregoing, the consent of Seller need not be obtained for
an assignment of this Contract made in connection with the merger,
consolidation or a combination of Purchaser into or with any other corporation
or entity, whether by operation of law or otherwise; however, Purchaser agrees
to furnish Seller with prior written notice thereof.
XII
INTERPRETATION AND APPLICABLE LAW
This Agreement shall be construed and interpreted in accordance with
the laws of the State of Texas. 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.
XIII
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.
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ARTICLE XIV
AUTHORITY
Each person executing this Contract warrants and represents that he is
fully authorized to do so.
ARTICLE XV
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.
ARTICLE XVI
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 XVII
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.
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ARTICLE XVIII
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 XIX
ACCEPTANCE
Seller shall have until 5:00 o'clock p.m., October 2, 1998, to execute
and return a fully executed original of this Contract to Purchaser, 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 Texas, 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 Texas.
EXECUTED on this the 30th day of September, 1998.
SELLER:
NATIONAL AMERICAN CORPORATION, a Nevada corporation
By: /s/ Kenneth E. Hendrycy
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Name: Kenneth E. Hendrycy
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Its: Vice President
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EXECUTED on this the 30th day of September, 1998.
PURCHASER:
SILVERLEAF RESORTS, INC., a Texas corporation
By: /s/ Robert E. Mead
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Name: Robert E. Mead
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Its: CEO
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Description of Exhibits:
Exhibit A: List of Accounts Receivable