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Exhibit 10.24
CONTRACT OF SALE
This Agreement is entered into by and between THOUSAND TRAILS, INC., a
Delaware 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 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:
Parcel 1: Those certain tracts of land located in LaSalle
County, Illinois, commonly known as the "Fox River Resort," in the
aggregate amount of approximately 178 acres, including (i) five (5)
tracts of land more particularly described in Exhibit "A" attached
hereto and made a part hereof for all purposes, which aggregate
approximately 138 acres, and (ii) a sixth tract of approximately 40
acres which will be surveyed and described prior to closing;
Parcel 2: Those certain tracts of land located in Jefferson
County, Missouri, commonly known as the "Jefferson Resort," and being
more particularly described in Exhibit "B" attached hereto and made a
part hereof for all purposes; and
Parcel 3: That certain tract of land located in Xxxxxxxx
County, Tennessee, commonly known as "Cherokee Landing Resort" and
being more particularly described in Exhibit "C" attached hereto and
made a part hereof for all purposes.
Hereafter the aforesaid real property is referred to collectively as the
"Land."
The conveyance by Seller to Purchaser shall also include all buildings
and other improvements on the Land, including specifically, without limitation,
all campsites, recreational
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and community facilities, comfort centers, lakes and parks located thereon (the
foregoing property is herein referred to collectively as the "Improvements").
The conveyance by Seller to Purchaser shall also include all fixtures
and personal property, tangible or intangible, of any kind whatsoever owned by
Seller and used in connection with the Land and/or Improvements, including but
not limited to, the following items:
a. All machinery, equipment, fixtures, furniture and
other personal property of every kind and character owned by Seller
and located on or used in connection with the operation of the Land
and Improvements;
b. The names "Fox River Resort," "Jefferson Resort," and
"Cherokee Landing Resort," as used in the ownership or operation of
the Land and Improvements;
c. All outstanding membership contracts which have been
generated from the sale of memberships at the campsites being operated
by Seller on the Land (except for Gold Card memberships), together
with certain receivables, hereinafter mentioned, which are payable to
Seller and which represent the unpaid portion of the purchase price
for such memberships;
d. All licenses, franchises and permits used in or
relating to the ownership, occupancy or operation of the resorts being
operated by Seller on the Land including, in particular, any water
permits or other utility permits; and
e. Any developer's, declarant's, or owner's interests
under any operating agreements or reciprocal easement agreements or
other similar agreements affecting and/or benefiting the Land.
The foregoing items are hereinafter collectively referred to as the "Resort
Assets."
Hereinafter all property being conveyed to Purchaser by Seller
pursuant to this Contract including the Land, the Improvements and the Resort
Assets 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 (less the receivables described in Article I, c.) shall be as
follows:
Fox River Resort $1,512,500.00
Jefferson Resort $1,100,000.00
Cherokee Landing Resort $ 570,000.00
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Total Purchase Price $3,182,500.00
The purchase price shall be payable all in cash at the closing.
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ARTICLE III
XXXXXXX 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
Twenty-Five Thousand and No/100 Dollars ($25,000.00) to Safeco Land Title of
Dallas, 5220 Renaissance Tower, 0000 Xxx Xxxxxx, Xxxxxx, Xxxxx 00000, Attn:
Xxxxxx Xxxxx (the "Title Company"). The Title Company shall immediately cash
the xxxxxxx 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 xxxxxxx money check shall be referred to as
the "xxxxxxx money"). If Purchaser does not terminate this Contract during the
Inspection Period (as defined in Article VI hereinbelow), then, within two (2)
business days after the expiration of the Inspection Period, Purchaser will
deposit with the Title Company the additional sum of Seventy-Five Thousand and
No/100 Dollars ($75,000.00) in cash, which sum shall be added to and become a
part of the xxxxxxx money. Upon receipt of the second xxxxxxx money deposit
from Purchaser, the Title Company shall immediately disburse the entire
$100,000.00 xxxxxxx money deposit to Seller; upon such disbursement the
$100,000.00 xxxxxxx money deposit shall be non-refundable to the Purchaser
except in the event of a default by Seller hereunder, but, if this Contract
closes, then the entire $100,000.00 xxxxxxx money deposit shall be applied in
partial satisfaction of the purchase price payable at closing.
In the event that this Contract is not closed, then the xxxxxxx money
shall be disbursed in the manner provided for elsewhere herein.
Notwithstanding the foregoing or anything to the contrary contained elsewhere
in this Contract, it is understood and agreed that One Hundred Dollars
($100.00) of the xxxxxxx money shall in all events be delivered to Seller as
valuable consideration for the Inspection Period described in Article VI
hereinbelow and the execution of this Contract by Seller.
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ARTICLE IV
PRE-CLOSING OBLIGATIONS OF SELLER AND PURCHASER
Within thirty (30) days from the date of execution of this Contract,
Seller shall furnish to Purchaser, each of the following (a-g) (collectively,
the "Due Diligence Items"):
a. 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;
b. Copies of the most recent appraisals of each parcel
included within the Land that are in the possession of Seller, if any;
c. A schedule showing (i) all members of the resorts
being operated on the Land by Seller, and (ii) the date through which
monthly membership dues have been paid by each such member; provided,
however, that such schedule need not include the name, address and
phone number of each such member;
d. Copies of all licenses, permits, applications,
authorizations, certificates of occupancy, governmental approvals and
other entitlements relating to the Subject Property and the operation
thereof in the possession of Seller, if any, including, in particular,
copies of all permits relating to utilities;
e. A schedule of all current or pending litigation with
respect to the Subject Property or any part thereof, if any, together
with a brief description of each proceeding;
f. An accurate and complete schedule reflecting with
respect to each resort being operated by Seller on the parcels
comprising the Land for the calendar year ending immediately preceding
the date of this Contract: (i) ad valorem taxes, (ii) expenses
incurred for such period for water, electricity, natural gas and other
utility charges, (iii) total dues collected from members for such year
and (iv) all other income or expenses of operation of each resort
being operated on the Land by Seller. Said operating schedule shall
be accompanied by Seller's statement that said operating schedule is
true, complete and correct as of the date provided; and
g. All information of any kind whatsoever in the
possession of Seller concerning possible development of the Subject
Property including, but not limited to, any and all plans for the
development of the Subject Property, any engineering studies of the
Subject Property, any information relating to obtaining the approval
of local governing bodies for the development of the Subject Property,
any information as to when construction on the Subject Property may
commence, any information regarding present or future zoning of the
Subject Property, and any information concerning the availability of
utilities.
During the Inspection Period (defined hereinbelow), Purchaser shall
obtain and deliver to Seller copies of the following (collectively, the
"Purchaser Due Diligence Items"):
h. Updated surveys of each parcel of land included
within the Subject Property dated subsequent to the date of execution
of this Contract and prepared by a licensed professional engineer or
surveyor acceptable to Purchaser, which surveys shall: (a) include a
metes and bounds legal description of each parcel comprising the Land;
(b) accurately show all improvements, encroachments and uses and
accurately show all easements and encumbrances visible or listed on
the Title Commitments (identifying each by recording reference if
applicable); (c) recite the number of gross acres included within
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each parcel of land comprising the Land; (d) state whether any portion
of the Land lies within a flood zone, or flood prone area or is
designated as "wetlands," and identify the exact number of square
feet, if any, that lies within a flood zone or flood prone area or is
designated as "wetlands"; and (e) contain a certificate verifying that
each survey was made on the ground, that the survey is correct, that
there are no improvements, encroachments, easements, uses or
encumbrances except as shown on the survey plat, that the area
represented for each parcel comprising the Land has been certified by
the surveyor as being correct, that no portion of the Land lies within
any flood zone or flood prone area, except as indicated thereon, and
that each parcel comprising the Land has access to public streets as
indicated thereon. Unless otherwise agreed by Seller and Purchaser,
the metes and bounds descriptions contained in the Surveys shall be
the legal descriptions employed in the documents of conveyance of the
Subject Property provided that the Title Company accepts such
descriptions; and
i. A Phase I Environmental Report for each resort
included within the Subject Property.
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 Title Review Period Purchaser shall provide Seller with written notice of
Purchaser's objections. 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
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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 one hundred twenty (120) days from the date on which
Purchaser receives the last of the due diligence items to be provided to
Purchaser by Seller pursuant to Article IV hereinabove (the "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; provided, however, that no drilling or other ground penetrations
or physical sampling in any building shall be done without Seller's prior
written consent, which consent shall not be unreasonably withheld or delayed.
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 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 xxxxxxx money (less $100.00) shall be
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immediately returned to Purchaser by the Title Company, and thereafter neither
Seller nor Purchaser shall have any continuing obligations one unto the other.
If no notice of cancellation is provided by Purchaser prior to the expiration
of the Inspection Period, then this Contract shall remain in full force and
effect.
ARTICLE VII
REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER
Seller represents and warrants to Purchaser that at closing Seller, or
a direct or indirect wholly-owned subsidiary of Seller, will have good and
indefeasible 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 or its subsidiaries will be in a position to
convey the Subject Property to Purchaser (free and clear of all liens,
encumbrances, 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;
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
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or any portion thereof except with respect to Cherokee Landing and Fox
River; Seller hereby advises Purchaser that in 1985 Cherokee Landing
entered into an assurance of voluntary compliance with the State of
Tennessee the details of which will be disclosed to Purchaser and that
in 1988 Seller entered into a consent judgment with the State of
Illinois the details of which will also be disclosed to Purchaser;
d. The Subject Property and the current operation
thereof comply in all material respects with all laws, regulations,
ordinances, rules, orders and other requirements of all governmental
authorities having jurisdiction over the Subject Property or affecting
all or any part thereof or bearing on its construction or operation,
and with all private covenants or restrictions;
e. From the date of execution of this Contract through
the date of closing, Seller shall continue to maintain the Subject
Property in its present condition, subject to ordinary wear and tear
and Article XV hereof, and shall continue to manage the Subject
Property in the same manner as it is currently being managed; Seller
shall not remove any fixtures, equipment, furnishings or other
personal property from the Subject Property unless replaced with items
of equal or greater quality and quantity, nor shall Seller in any
manner neglect the Subject Property; and
f. That, at closing, there will be no unpaid bills,
claims, or liens in connection with any construction or repair of the
Subject Property except for ones which will be paid in the ordinary
course of business or which have been bonded around or the payment of
which has otherwise been adequately provided for to the complete
satisfaction of Purchaser.
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.
Purchaser agrees that, having had the opportunity to inspect the
Subject Property for defects and having had the right to terminate this
Contract in the event any defects are found, Purchaser will accept at closing
the Subject Property in an "as is, where is" condition, and, except for the
representations and warranties set forth hereinabove, Seller shall not be
required to give any further representations or warranties at closing with
respect to the condition of the Subject Property or the income that may be
generated by the Subject Property.
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ARTICLE VIII
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:
a. 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;
b. There shall be no change in the matters reflected in
the Title Commitment, and there shall not exist any encumbrance or
title defect affecting the Subject Property not described in the Title
Commitment except for the Permitted Exceptions;
c. There shall be no changes in the matters reflected in
the Survey, and there shall not exist any easement, right-of-way,
encroachment, waterway, pond, flood plain, conflict or protrusion with
respect to the Subject Property not shown on the Survey; and
d. No material and substantial change shall have
occurred with respect to the Subject Property which would in any way
affect the findings made in the inspection of the Subject Property
described in Article VI hereinabove.
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, the xxxxxxx money deposit (less $100.00) shall be returned
to Purchaser by the Title Company and thereafter neither Seller nor Purchaser
shall have any continuing obligations one unto the other.
ARTICLE IX
CLOSING
The closing hereunder shall take place at the offices of the Title
Company. The closing shall occur on or before thirty (30) days from the date
of expiration of the Inspection Period. Purchaser shall notify Seller at least
five (5) days in advance of the exact time and date of closing. Seller and
Purchaser hereby agree that Purchaser shall have the right to obtain one (1)
ninety (90) day extension of the deadline for closing hereunder by delivering
to Seller an additional One Hundred Thousand Dollars ($100,000) in xxxxxxx
money. If Purchaser exercises this right, then the deadline for closing of
this Contract shall be extended by ninety (90) days; the additional $100,000
xxxxxxx money deposit that must be made by Purchaser in order to extend the
deadline for closing of this Contract by ninety (90) days shall be
non-refundable to
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Purchaser except in the event of a default by Seller hereunder, but, if this
Contract closes, shall be applied in partial satisfaction of the purchase price
payable hereunder.
ARTICLE X
SELLER'S OBLIGATIONS AT CLOSING
At the closing, Seller shall do the following:
a. Deliver, or cause its subsidiary to deliver, to
Purchaser a deed covering the Subject Property, duly signed and
acknowledged by Seller, or its subsidiary, 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
Standard Owner Policy of Title Insurance (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 standard printed exceptions and 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 are at no cost to Seller nor impose
additional liability on Seller nor delay the closing. Purchaser shall
be responsible for paying the cost of the Title Policy.
c. Deliver a xxxx of sale and a blanket assignment in
form reasonably acceptable to Purchaser, duly executed and
acknowledged by Seller or its subsidiary, conveying and/or assigning
to Purchaser the Resort Assets.
d. Deliver 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.
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.
ARTICLE XI
PURCHASER'S OBLIGATIONS AT CLOSING
At the closing, Purchaser shall deliver to Seller the purchase price
in cash.
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ARTICLE XII
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. Purchaser shall pay Seller in cash at closing an
amount equal to seventy percent (70%) of the then outstanding
principal balance of all receivables for the purchase of campground
memberships which are not then thirty-one (31) days or more past due
and which are being transferred to Purchaser by Seller at closing.
d. Membership dues which have already been collected by
Seller for the current calendar year shall be prorated as of the date
of closing, and Seller shall pay to Purchaser in cash at closing the
amount of any such dues which have already been paid to Seller by
members of the Subject Property for a period subsequent to the closing
date.
e. Purchaser shall have the right to collect all
membership dues which are past due as of the closing date; provided,
however, that Purchaser shall pay to Seller in cash at closing (i) an
amount equal to the full amount of all membership dues which are 365
days or less past due as of the date of closing, plus (ii) an amount
equal to twenty-one percent (21%) of all membership dues which are
more than 365 days past due as of the date of closing.
f. 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, 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
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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 XII shall survive the closing hereunder.
ARTICLE XIII
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.
ARTICLE XIV
POSSESSION OF PROPERTY
Possession of the Property free and clear of all uses and
encroachments, except the Permitted Exceptions which shall include the rights
of existing members, shall be delivered to Purchaser at closing.
ARTICLE XV
DAMAGE OR DESTRUCTION PRIOR TO CLOSING
In the event that the Subject Property should be damaged by any
casualty prior to closing, then if the cost of repairing such damage, as
estimated by an architect or contractor retained pursuant to the mutual
agreement of Seller and Purchaser, is:
a. Less than One Hundred Thousand Dollars ($100,000.00)
per resort, then at Purchaser's option, either (i) the Seller shall
repair such damage as promptly as is reasonably possible, restoring
the damaged property at least to its condition immediately prior to
such damage; and, in the event such repairs have not been completed
prior to
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closing, then the closing shall nevertheless proceed as scheduled, and
Purchaser may have the Title Company withhold from Seller the funds
necessary to make such repairs until Seller has repaired such damage
pursuant to the provisions hereof, at which time such funds shall be
distributed to Seller or (ii) Purchaser may take an assignment of
Seller's insurance proceeds and repair such damage itself;
or if said cost is:
b. greater than One Hundred Thousand Dollars
($100,000.00) per resort, then, at Purchaser's election, Seller shall
pay to Purchaser, at closing, all insurance proceeds payable for such
damage, and the sale shall be closed without Seller's repairing such
damage, or, if Purchaser does not elect to accept such insurance
proceeds, then either Seller or Purchaser may elect to terminate this
Contract, in which case the xxxxxxx money (less $100.00) shall be
returned to Purchaser and thereafter neither party shall have any
further obligations one unto the other.
ARTICLE XVI
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: Thousand Trails, Inc.
------ 0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxx, Vice President
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Purchaser: Silverleaf Resorts, Inc.
--------- 0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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With Required Copy to: Meadows, Owens, Collier, Reed,
--------------------- Cousins & Blau, L.L.P.
0000 XxxxxxxXxxx Xxxxx
000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
ARTICLE XVII
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, in which event the xxxxxxx money
(less $100.00) 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
xxx Seller for specific performance. Except as otherwise set forth herein, in
no event shall Purchaser have the right to xxx 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 the
xxxxxxx money. The xxxxxxx 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 in this paragraph defined,
and Seller shall accept the xxxxxxx money as Seller's total damages and relief.
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ARTICLE XVIII
ASSIGNMENT
Purchaser shall not, without Seller's prior written 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, and
provided further that any such assignee must abide by the covenants appearing
in this Contract.
XIX
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.
XX
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 XXI
AUTHORITY
Each person executing this Contract warrants and represents that he is
fully authorized to do so.
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ARTICLE XXII
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 XXIII
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 XXIV
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 XXV
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.
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ARTICLE XXVI
ACCEPTANCE
Seller shall have until 5:00 o'clock p.m., May 5, 1997, 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.
ARTICLE XXVII
REAL ESTATE COMMISSION
Seller represents and warrants to Purchaser that Seller has not
contacted or entered into any agreement with any 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 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 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 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 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 XXVII shall survive the closing.
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ARTICLE XXVIII
POST-CLOSING OBLIGATIONS OF SELLER AND PURCHASER
Seller and Purchaser hereby agree that following the closing hereunder
Purchaser will (i) take over responsibility for the operation and maintenance
of the existing campsites and recreational facilities currently located at each
of the three resorts being sold to Purchaser hereunder, and (ii) assume
responsibility for the performance of all of Seller's obligations under the
outstanding membership contracts pertaining to these three resorts, except for
Seller's obligation to provide its "Gold Card" members with access to resorts
other than the three resorts being sold to Purchaser hereunder. Purchaser
hereby warrants and represents that at all times following the closing the
standard of operation and maintenance of the facilities at these three resorts
shall never be lower than the standard of operation and maintenance that is in
effect at these three resorts as of the date of this Contract, and Purchaser
agrees to indemnify and hold harmless Seller from any loss incurred by Seller
due to a breach of this warranty which is caused by Purchaser. At all times
following closing hereunder, at Purchaser's election, (i) Purchaser shall be
entitled to collect all of the dues that are payable by members of these three
resorts except for that portion of such dues which is paid by "Gold Card"
members in order to have access to other resorts in Seller's system, or (ii)
Seller shall collect the dues that are payable by members of these three
resorts and will remit to Purchaser on a regular and timely basis all of such
dues except for that portion of the dues which is paid by "Gold Card" members
in order to have access to other resorts in Seller's system; if Purchaser
elects to have Seller collect the dues, then Purchaser will pay Seller a
reasonable fee to cover the costs that will be incurred by Seller in collecting
the dues, the exact amount of such fee to be mutually agreed upon by and
between Seller and Purchaser. Purchaser further agrees that Purchaser will
accept reservations for the use of the campsites at the Fox River Resort from
any of Seller's system members provided that Purchaser is given the same
advance written notice of any such reservation that Seller currently requires
from its members. The obligations of Purchaser under this paragraph shall
survive closing and shall continue in full force and effect (i) for a period of
five (5) years thereafter with respect to the Jefferson and Cherokee Landing
Resorts, and (ii) for
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a period of ten (10) years thereafter with respect to the Fox River Resort (and
for an additional ten (10) years if Purchaser extends the term of the License
described below).
Seller agrees to permit any existing Fox River Resort member (who is a
member as of the date of closing hereunder) to become a "Gold Card" member of
Seller provided that said member pays Seller the then required fees and
executes Seller's "Gold Card" contract. Both Seller and Purchaser also agree
to honor the usage rights of NACO Resort Club members.
Seller hereby agrees that for a period of one (1) year following the
date of closing hereunder, Seller will not hire any of the existing employees
at the resorts being purchased by Purchaser hereunder to work at other resorts
owned and operated by Seller.
Within thirty (30) days after the closing hereunder, both Purchaser
and Seller shall write a joint letter to all members of Jefferson Resort and
Cherokee Landing Resort advising of the sale and giving these members the
following options going forward: (i) for their membership to remain unchanged,
(ii) to become a member of Seller's entire campground system, in which case the
member must pay Seller the dues being charged by Seller for said system
membership, or (iii) to become a member of both Seller's campground system and
of the Jefferson or Cherokee Resort, in which case the member must pay Seller
the dues being charged by Seller for the system membership and must pay
Purchaser the dues being charged by Purchaser for membership at Jefferson or
Cherokee.
In order to secure performance of Purchaser's obligation to operate
and maintain the facilities at the three resorts in accordance with the
standards of operation and maintenance that are currently in effect, Purchaser
shall deliver to Seller at closing three (3) irrevocable and unconditional
letters of credit; the letter of credit for Fox River Resort shall be in the
amount of $300,000, and the letters of credit for the Jefferson and Cherokee
Landing Resorts shall each be in the amount of $100,000. The letters of credit
must be issued by a national banking association or other financial institution
satisfactory to Seller, must be payable directly to Seller and must expire no
earlier than (i) five (5) years from the date of closing in the case of the
letters of credit for the Jefferson and Cherokee Landing Resorts, and (ii) ten
(10) years from the date of closing in the case of the letter of credit for the
Fox River Resort, and must provide that the funds evidenced thereby will be
disbursed to Seller upon presentation of a draft therefor and
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a statement that Purchaser has defaulted in the performance of its obligations
regarding the operation and maintenance of the facilities at the applicable
resort. Seller hereby agrees that, if Purchaser ever breaches its obligations
regarding the operation and maintenance of the facilities at one of the
resorts, before drawing upon the letter of credit pertaining to that resort,
Seller will provide Purchaser with written notice specifying the alleged breach
and will allow Purchaser thirty (30) days from the date of the written notice
in which to cure the breach or, if the breach is curable but cannot be cured
within thirty (30) days, will allow Purchaser sufficient time to cure the
breach provided that Purchaser promptly commences cure of such breach within
the thirty (30) day period and continuously thereafter pursues the cure until
the breach is remedied.
At closing, Seller and Purchaser shall enter into a license agreement
(the "License") pursuant to which Seller will grant Purchaser a non-exclusive
license to use the name "Thousand Trails" in connection with the promotion and
operation of the campground facilities at the Fox River Resort. The License
shall endure for a term of ten (10) years; provided, however, Purchaser shall
have the option to extend such License for an additional ten (10) year period
by delivering to Seller written notice thereof within the ninety (90) day
period prior to the expiration of the original ten (10) year term. In return
for the right to use the name "Thousand Trails" in connection with its
operation of the campground facilities at Fox River Resort, Purchaser shall pay
Seller throughout the term (including the additional term, if applicable) of
the License annually in advance a fee of $30,000. The License shall be on the
terms and conditions and in form and substance identical to the License
Agreement attached hereto and made a part hereof for all purposes as Exhibit
"D." Upon the expiration of the License, the existing members will be required
by Seller to elect either (i) to be a member of Seller's entire campground
system, in which case the member must pay Seller the dues being charged by
Seller for system membership, (ii) to be a member of the Fox River Resort only,
in which case the member must pay Purchaser the dues being charged by Purchaser
for membership at that Resort, or (iii) to be a member both of Seller's entire
campground system and of the Fox River Resort, in which case the member must
pay Seller the dues being charged by Seller for system
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membership and must pay Purchaser the dues being charged by Purchaser for
membership at Fox River Resort.
EXECUTED on this 2nd day of May, 1997.
SELLER:
THOUSAND TRAILS, INC., a Delaware corporation
By: /s/ X. X. XXXX
-------------------------------------------
Name: X. X. Xxxx
Its: C.E.O.
EXECUTED on this 1st day of May, 1997.
PURCHASER:
SILVERLEAF RESORTS, INC., a Texas corporation
By: /s/ XXXXXX XXXX
-------------------------------------------
Name: Xxxxxx Xxxx
Its: C.E.O.
RECEIPT OF XXXXXXX MONEY AND ONE (1) EXECUTED COUNTERPART OF THIS CONTRACT IS
HEREBY ACKNOWLEDGED:
TITLE COMPANY:
SAFECO LAND TITLE OF DALLAS
By: /s/ XXXXXX XXXXX
---------------------------
Name: XXXXXX XXXXX
-------------------------
Its: V.P.
--------------------------
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LIST OF EXHIBITS
Exhibit "A" Legal Description of Parcel 1, commonly known as "Fox River
Resort"
Exhibit "B" Legal Description of Parcel 2, commonly known as "Jefferson
Resort"
Exhibit "C" Legal Description of Parcel 3, commonly known as "Cherokee
Landing Resort"
Exhibit "D" Form of License Agreement
The above-listed exhibits are omitted from this filing. Registrant
agrees to furnish supplementally a copy of any exhibit to the Commission upon
request.
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