Ex. 10.1
CONTRACT OF SALE
This Contract is entered into by and between XXXX, INC., a Florida
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 to Purchaser shall include those certain tracts
or parcels of land situated in Davenport, Polk County, Florida, said tracts
containing approximately 5.3 acres and being more particularly described in
Exhibit "A" attached hereto and made a part hereof for all purposes, together
with all and singular the rights and appurtenances pertaining to such property
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 (the foregoing property is herein 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
unsold and unreserved
rental/timeshare units and all buildings, facilities and amenities comprising
the vacation resort project being operated under the name "Villas at Polo Park "
(the foregoing buildings and improvements are herein referred to collectively as
the "Project").
The conveyance by Seller to Purchaser shall also include all improvements,
facilities, fixtures and personal property, tangible or intangible, of any kind
whatsoever owned by Seller and used in connection with the operation of the
Project including, but not limited to, the following items:
(a) all unsold or unreserved timeshare inventory of Seller which
currently consists of approximately 812 proposed intervals. Twenty (20)
intervals, which are more particularly set forth in Exhibit "B" attached
hereto and made a part hereof, have been sold ("Sold Units") or reserved
("Reserved Units") by Seller. The proceeds from the Sold Units shall be
allocated, and ownership of the Reserved Units shall be transferred, in
accordance with the terms set forth herein.
(b) all engineering, maintenance, and housekeeping supplies of all
kinds, whether used, unused or held in reserve storage for future use in
connection with the maintenance and operation of the Project which are on
hand on the date hereof, subject to such depletion and including such
resupplies as shall occur and be made in the normal course of business;
(c) all machinery, equipment, fixtures, furniture, artwork and other
decorative items, signage and other personal property of every kind and
character owned by Seller and located in or used in connection with the
operation of the Project including, without limitation, (i) any
furnishings, equipment or other personalty located in any business or
management offices located in the Project; (ii) maintenance equipment and
tools owned by Seller used in connection with the Project; and (iii)
switchboards, computers and other machinery, equipment, fixtures, and
keys;
(d) any names, logos and designs owned by Seller and used
exclusively in the ownership or operation of the Project;
(e) all service, maintenance, employment, purchase orders and other
contracts respecting the ownership, maintenance, operation, provisioning
or equipping of the Project, including any transferable warranties and
guaranties relating thereto;
(f) all licenses, franchises and permits used in or relating to the
ownership,
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occupancy or operation of any part of the Project, if and to the extent
transferable to Purchaser;
(g) the owner's interest under all construction, development and
design contracts entered into in connection with the construction of the
Project and all transferable warranties, guaranties and bonds relating to
the Project for the acquisition, construction, fabrication or installation
thereof, if and to the extent transferable to Purchaser; and
(h) any developer's, declarant's, or owner's interest under any
declarations, operating agreements or reciprocal easement agreements or
other similar agreements affecting and/or benefiting the Project.
The foregoing items are hereinafter collectively referred to as the "Project
Assets". Notwithstanding the foregoing, the following items are not "Project
Assets" and will not be conveyed to Purchaser pursuant to this Contract: (i) 3
vans currently owned by Orlando Direct and stored at the Project; (ii) 2 Lincoln
Town cars which are stored at the Project that are owned by Xxx Boss and Xxxx
Xxxxxxx; (iii) all furnishings in the upstairs apartment which is located in the
reception building excluding the stove, refrigerator, washer and dryer; and (iv)
all furnishings located in Units A214 and D106.
Hereinafter all property being conveyed to Purchaser by Seller pursuant to
this Contract including the Land, the Project, and the Project 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 shall be the sum of Six Million and No/100 Dollars ($6,000,000.00). The
purchase price shall be payable in the following manner:
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(a) One Million Five Hundred Thousand and No/100 Dollars
($1,500,000.00) shall be payable in cash at the closing; the entire cash
down payment, net of closing costs incurred by Seller, shall be applied by
Seller at closing to the reduction of the then outstanding principal
balance of the existing indebtedness in the aggregate principal amount of
approximately $3,400,000.00 which is secured by a first lien against the
Subject Property and which is owed by Seller to First Federal Savings Bank
of Lake County (the "Prior Indebtedness");
(b) The balance of the purchase price shall be paid by Purchaser's
execution and delivery at the closing of a promissory note (the "Note")
payable to Seller in the original principal amount of Four Million Five
Hundred Thousand and No/100 Dollars ($4,500,000.00). The Note shall
"wrap-around" (except as to those phases of the Subject Property which
contain Buildings A and D, the reception building, the pool, and the main
access road, such phases being depicted on the site plan of the Subject
Property attached hereto as Exhibit "C", which shall be released from the
lien of the Prior Indebtedness at closing) (the "Released Property") and
include the remaining aggregate unpaid principal balance of the Prior
Indebtedness as reduced by the amount of the cash down payment that is
applied to the Prior Note at closing by Seller. The Note shall provide and
be secured as follows:
(i) The Note shall bear interest at the rate of seven percent
(7%) per annum;
(ii) The principal balance of the Note shall be payable in
thirty-six (36) successive monthly installments, the first of such
installments to be due and payable thirty (30) days following the
date of closing, and a like installment to be due and payable on the
same day of each month thereafter, through and including the
thirty-sixth (36th) month thereafter. The first thirty-five (35) of
such principal installments shall each be in the amount of
$50,000.00, and the thirty-sixth (36th) and final installment shall
be in the amount of the then remaining unpaid principal balance of
the Note. Each monthly installment of principal shall be accompanied
by a payment of all then accrued but unpaid interest on the
outstanding principal balance of the Note;
(iii) The Note shall provide that Purchaser shall pay the
monthly installments of principal and interest due thereunder
directly to the holder of the Prior Indebtedness for application
against the outstanding principal balance of the Prior Indebtedness
until such time as the Prior Indebtedness has been paid in full.
Once the Prior Indebtedness has been paid in full, then any further
payments on the Note that are made by Purchaser shall be paid
directly to Seller.
(iv) The Note shall provide that it may be prepaid at any
time, in whole or in part, without premium or penalty, and that
interest shall immediately cease to
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accrue on any part of the Note so prepaid; any partial prepayment
shall be applied first to accrued interest and then to the next
maturing installment of principal due on the Note;
(v) Both the Note and the Mortgage, as defined below, shall
provide that upon the occurrence of a monetary default thereunder,
Seller must provide Purchaser with written notice thereof and permit
Purchaser to have ten (10) days from the date of the notice within
which to cure the same before exercising any of Seller's remedies
thereunder, and that upon the occurrence of a non-monetary default
thereunder, Seller must provide Purchaser with written notice
thereof and permit Purchaser to have thirty (30) days from the date
of the notice within which to cure the same before exercising any of
Seller's remedies thereunder; and
(vi) The Note shall be secured by a Mortgage and Security
Agreement (the "Mortgage") covering the Subject Property to be
executed by Purchaser and delivered at the time of closing;
Purchaser shall be entitled to obtain releases of the timeshare
units included as part of the Subject Property and of the remaining
land, building and amenities comprising the Subject Property in the
following sequence and manner. At the time of closing upon
application of the initial cash down payment to the outstanding
principal balance of the Prior Indebtedness, the holder of the Prior
Indebtedness shall release the Released Property so that the
Released Property is no longer encumbered by the liens securing
payment of the Prior Indebtedness. Thereafter, no further releases
from the liens securing payment of the Prior Indebtedness shall be
granted until such time as the Prior Indebtedness has been paid in
full at which time the remainder of the Subject Property shall be
fully and finally released from the liens securing payment of the
Prior Indebtedness. After closing, Purchaser shall also be entitled
to commence obtaining releases of the timeshare units in Buildings A
and D from the first lien created by the Mortgage and held by the
Seller for the purpose of securing payment of the Note. Each such
release of a timeshare unit will also include a release of the
furniture and fixtures contained therein. Seller shall not be
required to grant any release when the initial cash down payment is
made by Purchaser at the time of closing; thereafter, for every
$125,000.00 of principal which is paid by Purchaser on the Note,
regardless of whether such payment is made to Seller or to the
holder of the Prior Indebtedness, Purchaser shall be entitled to
obtain the release of one timeshare unit in either Building A or
Building D on a cumulative basis regardless of whether a release is
requested at the time Purchaser has become entitled to obtain any
such release. Aside from granting releases of the timeshare units
contained in Buildings A and D, Seller shall not be required to
release any other portion of the Subject Property until such time as
the remaining balance of the Note has been paid in full. In addition
to granting releases as set forth hereinabove, at such time as
Purchaser executes a timeshare declaration for the purpose of
subjecting the Released Property to a timeshare regime, Seller must
join in the execution of such declaration for the
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purpose of subordinating the liens which secure payment of the Note
to the timeshare regime created thereby so that in the event of a
foreclosure the rights of the purchasers of timeshare units will not
be disturbed or impaired. Such subordination shall be in form and
substance reasonably acceptable to Seller. At the time of filing of
the timeshare declaration, if deemed necessary by Seller and and/or
the holder of the Prior Indebtedness, Purchaser shall also execute
and record an easement for the benefit of the future
owners/occupants of the remainder of the Subject Property not
included within the Released Property granting such owners/occupants
the right to use the amenities included within the Released Property
provided that such owners/occupants pay a proportionate share of the
costs of operating and maintaining such amenities.
(vii) In addition to the foregoing, the Note and Mortgage
shall contain all terms and provisions customarily used in the State
of Florida for transactions of this type.
ARTICLE III
XXXXXXX MONEY
Contemporaneous with the mutual execution hereof, Purchaser shall deliver
to First American Title Insurance Company (the "Escrow Agent" or the "Title
Company"), whose address is 00000 Xxxx Xxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxx 00000, to the attention of Xxxxx Xxxxxxx, a check payable to the order
of the Agent in trust in the amount of Fifty Thousand and No/100 Dollars
($50,000.00) ("Xxxxxxx Money"). All Xxxxxxx Money shall be held and delivered in
accordance with the provisions hereof. Escrow Agent shall immediately present
for payment the check deposited by Purchaser and deposit same into an interest
bearing Trust Account. All interest accruing upon the Xxxxxxx Money shall be
held for the benefit of Purchaser so long as Purchaser is not in default under
the terms of this Contract. If Purchaser defaults under the terms of this
Contract or fails to acquire the Property through no fault of Seller, all
interest accruing on the Xxxxxxx Money shall accrue to the benefit of Seller.
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In the event that this Contract is closed, then all Xxxxxxx Money shall be
applied in partial satisfaction of the purchase price hereunder. In the event
that this Contract does not close, 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 Five Thousand Dollars ($5,000.00) 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.
ARTICLE IV
PRE-CLOSING OBLIGATIONS OF SELLER
Within twenty (20) days from the date of execution of this Contract,
Seller shall furnish to Purchaser, at Seller's sole cost and expense, each of
the following (collectively, the "Due Diligence Items"):
a. An as-built survey of the Subject Property which Survey shall be
dated subsequent to the date of execution of this Contract and which
Survey shall: (a) include a metes and bounds legal description of the
Land; (b) accurately show all improvements, encroachments and uses and
accurately show all easements and encumbrances visible or listed on the
Title Commitment (identifying each by recording reference if applicable);
(c) recite the exact number of square feet included within the Land and
within each building located on the Land; (d) state whether the Land (or
any portion thereof) lies within a flood zone or flood prone area; (e)
state the number of parking spaces situated on the Land; (f) contain a
certificate verifying that the 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 the Land and the Improvements has been certified
by the surveyor as being correct and that the Land does not lie within any
flood zone or flood prone area, except as indicated thereon, that the Land
has access to public streets as indicated thereon, and otherwise be in the
form of Exhibit "D" attached hereto and made a part hereof; and (g)
otherwise be in form sufficient for the amendment of the boundary
exception by the Title Company. Unless otherwise agreed by Seller and
Purchaser, the metes and bounds description contained in the Survey shall
be the
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legal description employed in the documents of conveyance of the Subject
Property;
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;
c. A list of all service contracts, warranties, management,
maintenance, or other agreements affecting the Subject Property, if any,
together with copies of same. Seller agrees not to enter into any
additional contracts, warranties, or agreements prior to closing which
would be binding on Purchaser and which cannot be cancelled by Purchaser
upon thirty (30) days written notice without cost, penalty, or obligation
unless such service contracts or other agreements are approved in writing
by Purchaser. A list of all existing leases affecting the Subject Property
together with copies of same shall also be provided to Purchaser;
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, if any,
including, but not limited to, any timeshare registration statement filed
by Seller in Florida;
e. All site plans, drawings, environmental, mechanical, electrical,
structural, soils and similar reports and/or audits and plans and
specifications relative to the Subject Property in the possession of
Seller, if any;
f. True and correct copies of the financial statements prepared by
Seller covering the Subject Property or any part thereof for each of the
two (2) years prior to the current year and, if available, for the current
year;
g. True and correct copies of any existing option contracts,
construction contracts, and architectural contracts relating to all or any
portion of the Subject Property;
h. A schedule of all Project Assets (specifying whether any such
Project Assets are leased);
i. A list of any unwritten agreements affecting the Subject Property
to which Seller is a party or of which Seller has knowledge; and
j. All other reasonably requested information in the possession of
Seller and pertaining to the ownership and operation of the Subject
Property.
k. Any Due Diligence Items provided to Purchaser shall be considered
confidential and if Closing does not occur as contemplated herein, all of
same shall be
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promptly returned to Seller.
Within forty (40) days from the date of execution of this Contract, Seller
must also have obtained written approval and consent to the transactions
necessary to close under this Contract as required under the terms and
conditions of any debt instruments, agreements or other obligations binding
Seller, Seller's affiliates or the Subject Property. In particular, Seller must
obtain the approval of the holder of the Prior Indebtedness with respect to the
sale of the Subject Property to Purchaser and the manner of payment of the Prior
Indebtedness by Seller as set forth in the Note described hereinabove.
ARTICLE V
TITLE INSPECTION PERIOD
Purchaser shall have a period of forty-five (45) days following the date
of execution of this Contract within which to review and approve the information
to be provided to Purchaser pursuant to subparagraphs (a) and (b) of Article IV
(the "Title Review Period"). If the information to be provided pursuant to
subparagraphs (a) and (b) of Article IV reflect 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 twenty (20) 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
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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 understood and agreed that the Subject Property
will be conveyed to Purchaser subject to the rights of all existing purchasers
who have executed contracts for the purchase of timeshare intervals in the
Project and that the rights of such purchasers shall be Permitted Exceptions.
The lien securing payment of the Prior Indebtedness shall also be a Permitted
Exception.
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 forty-five (45) days thereafter (the "Inspection Period").
During the Inspection Period, Purchaser shall also attempt to obtain all
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governmental approvals required in order to permit Purchaser to continue to sell
the timeshare intervals which are included within the Subject Property.
Purchaser and Purchaser's duly authorized agents or representatives shall be
permitted to enter upon the Subject Property at all reasonable times during the
initial 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 in the event that Purchaser is unable to obtain all necessary
governmental approvals in order to permit Purchaser to continue to sell the
timeshare intervals which are included within 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 Xxxxxxx Money (less $5,000.00) 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.
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ARTICLE VII
REPRESENTATIONS, WARRANTIES, AND COVENANTS OF SELLER
Seller represents and warrants to Purchaser that Seller will have at
closing 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.
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, easement, encumbrance, charge, or
condition affecting the Subject Property (other than the sale of timeshare
intervals in the ordinary course of business and the Permitted Exceptions)
without promptly discharging the same prior to closing.
Seller hereby further represents and warrants to Purchaser 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. 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 XIV
hereof, and shall continue to manage the Subject Property in the same
manner as it is currently being managed; Seller shall not remove any
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fixtures, equipment, furnishings or other personal property from the
Subject Property, nor shall Seller in any manner neglect the Subject
Property;
d. At all times from the date hereof through the date of closing,
Seller shall cause to be maintained in force fire and extended coverage
insurance upon the Subject Property, and public liability insurance with
respect to damage or injury to person or property occurring on the Subject
Property in at least such amounts as are maintained by Seller on the date
hereof;
e. With the exception of a budget clarification which has been
requested of Seller, which Seller will address immediately, 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;
f. Seller has not received any notices from any party of any defects
or inadequacies in the Subject Property or any part thereof which would
adversely affect the condition of the Subject Property or the insurability
of the Subject Property or the premiums for the insurance therefor;
g. 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;
h. From the date of execution of this Contract through the date of
closing, Seller will not enter into any long-term lease of any portion of
the Subject Property or make any further sales of timeshare inventory
without first obtaining the written consent of Purchaser, however, Seller
shall be permitted, without first obtaining the written consent of
Purchaser, to enter into leases for the rental of units (other than units
in Buildings A or D) in the ordinary course of business each for a period
of less than six (6) months. Notwithstanding the foregoing, Seller may
enter into leases for any units in Buildings A and D for weekly intervals
until closing. At closing, Purchaser shall pay Seller the sum of
$39,000.00, which payment shall be unconditional, non-refundable and made
in addition to the purchase price set forth in this Contract, for the
contracts evidencing the Sold Units ("Sold Unit Contracts"). Each of the
purchasers under the Sold Unit Contracts shall be referred to herein as a
"Retail Purchaser". Purchaser shall have until ninety (90) days after
closing to enter into a new contract with each Retail Purchaser and to
provide Seller with the following: (i) written instructions from each
Retail Purchaser detailing the transfer of the escrow deposits held
pursuant to the Sold Unit Contracts to Purchaser's escrow agent; and (ii)
written evidence from the State of Florida approving the appointment of
Purchaser's escrow agent. If in connection with any particular Sold Unit
Contract, items (i) and (ii) above are not received by Seller on or before
ninety (90) days following the closing, Purchaser and Seller hereby
acknowledge and agree that Seller may cancel any such Sold Unit Contract
and immediately return all escrow deposits to each such Retail Purchaser.
Notwithstanding the
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foregoing, Purchaser and Seller hereby agree that if at any xxxx Xxxxxx
receives a request from any Retail Purchaser for the return of their
deposit, Seller will immediately return such escrow deposit directly to
the Retail Purchaser and cancel the related Sold Unit Contract;
i. To the best of Seller's knowledge, there has been no material
release of any pollutant or hazardous substance of any kind onto or under
the Subject Property that would result in the prosecution of any claim,
demand, suit, action or administrative proceeding based on any
environmental requirements of state, local or federal law including, but
not limited to, the Comprehensive Environmental Response Compensation and
Liability Act of 1980, U.S.C. Section 9601 et seq.; and
j. The assets and other items to be conveyed to Purchaser by Seller
pursuant to this Contract comprise all of the assets and properties of
Seller that are used in the operation of the Subject Property in the
ordinary course of business and consistent with current practice;
notwithstanding anything to the contrary contained herein, in the event
that either Seller or Purchaser discovers after closing that any asset or
item used in connection with the operation of the Subject Property has not
been conveyed to Purchaser at closing, then Seller will immediately, upon
demand by Purchaser, convey such asset or other item to Purchaser for no
additional consideration of any kind whatsoever.
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 and shall
survive 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 one (1) year 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 one (1) year period. Notwithstanding the foregoing, it is understood and
agreed by Purchaser and Seller that the aggregate liability of Seller under this
Contract shall be limited to Two Hundred Fifty Thousand and No/100 Dollars
($250,000.00).
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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.
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 or which would materially and adversely impact the income that
Purchaser expects to be generated by the Subject Property.
e. Seller must obtain the approvals and consents to the transactions
necessary to close under this Contract from the holder of the Prior
Indebtedness as set forth in Article IV hereinabove.
f. On or prior to closing, Seller must have approved any timeshare
declaration and the related timeshare regime that Purchaser proposes to
establish with respect to the Subject Property and must join in the
execution of any such declaration for the purpose of subordinating the
liens which secure payment of the Note to the timeshare regime created
thereby. In addition, Seller, Purchaser, and the holder of the Prior
Indebtedness must have agreed on any easement to be established for the
benefit of the future owners/occupants of the remainder of the Subject
Property not included within the Released Property for the purpose of
granting such owners/occupants the right to use the amenities included
within the Released Property provided that such owners/occupants pay a
proportionate share of the costs of operating and maintaining such
amenities.
15
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 (less $5,000.00) shall be returned to
Purchaser pursuant to the refund provisions in Article III hereinabove, 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 forty-five (45) 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, if prior to the date of closing hereunder Purchaser
has not received all governmental approvals required in order to permit
Purchaser to continue to sell the timeshare intervals that are included within
the Subject Property, then Purchaser shall have the right to obtain one ninety
(90) day extension of the deadline for closing hereunder by delivering to Seller
a non-refundable extension fee in the amount of $100,000.00 ("Extension Fee").
The Extension Fee shall be paid directly to Seller and shall not be subject to
any escrow. If Purchaser exercises this right, then the deadline for closing
hereunder shall be extended by ninety (90) days. The $100,000.00 extension fee
that must be paid by Purchaser in order to extend the deadline for closing
hereunder by ninety (90) days shall be non-refundable to Purchaser but, if this
Contract closes, shall be applied in partial satisfaction of the purchase price
payable hereunder. Seller and Purchaser
16
further agree that, if Purchaser has exercised Purchaser's right to obtain the
first ninety (90) day extension of the deadline for closing hereunder and still
has not obtained all necessary governmental approvals prior to the date of
closing as extended, then Purchaser shall have the right to obtain a second
ninety (90) day extension of the deadline for closing hereunder by delivering to
Seller a second non-refundable extension fee in the amount of $250,000.00
("Second Extension Fee"). The Second Extension Fee shall be paid directly to
Seller and shall not be subject to any escrow. If Purchaser exercises this
right, then the deadline for closing hereunder shall be extended by an
additional ninety (90) days. The Second Extension Fee shall be non-refundable to
Purchaser 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 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 indefeasible fee simple 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. Furnish to Purchaser, at Seller's sole expense, a "marked-up"
title commitment to be followed by an Owner's Policy of Title Insurance
(the "Title Policy") within a reasonable period of time and upon the Title
Company's receipt of the original, recorded documents evidencing the
transaction issued by the Title Company on the standard form in use in the
State of Florida, insuring good and marketable fee simple title to the
Subject Property in the Purchaser, in the amount of the purchase price
subject only to the Permitted Exceptions.
c. Deliver a xxxx of sale and a blanket assignment in form
reasonably acceptable to Purchaser, duly executed and acknowledged by
Seller, conveying and/or assigning to Purchaser the Project Assets. In
this blanket assignment, Seller shall be entitled to reserve
17
the right after closing to continue to use and occupy the upstairs
apartment and the furniture contained therein which is located in the
reception building included within the Subject Property and, in connection
therewith, Purchaser shall permit Seller to maintain one vehicle on the
Subject Property. This occupancy right of Seller shall continue in full
force and effect until such time as the Note has been paid in full.
Throughout the term of occupancy Seller shall be required to pay Purchaser
an annual occupancy fee in the amount of $1.00. The blanket assignment
shall also include an assignment of all existing lease agreements
affecting the Subject Property.
d. A Partial Release of the Released Property from the lien of the
Prior Indebtedness and an estoppel letter in which the holder of the Prior
Indebtedness consents to the sale of the Subject Property from Seller to
Purchaser subject to the outstanding principal balance of the Prior
Indebtedness, sets forth the outstanding principal balance of the Prior
Indebtedness as of the date of closing, confirms that there are no past
due payments of principal or interest owing with respect to the Prior
Indebtedness, confirms that there are no uncured defaults under any
document executed in connection with or as security for the payment of the
Prior Indebtedness, and confirms that all documents executed as security
for or in connection with the Prior Indebtedness are presently in full
force and effect.
e. 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.
f. 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.
g. Deliver to Purchaser an estoppel letter from the appropriate
parties under any easement, license agreement or restrictive covenants
benefiting or burdening the Subject Property in which such party confirms
that Seller is not in default in the performance of any of Seller's
obligations under any such agreement and, if and to the extent necessary,
in which such party consents to the transfer of the Subject Property to
Purchaser.
h. Deliver to Purchaser all keys to all buildings and other
improvements located on the Subject Property, combinations to any safes
thereon, and security devices therein in Seller's possession.
i. 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 XI
PURCHASER'S OBLIGATIONS AT CLOSING
At the closing, Purchaser shall deliver to Seller the cash portion of the
purchase price, via wire or cashier's check, the Note duly executed by
Purchaser, and the Mortgage duly executed and acknowledged by Purchaser and in
form ready for recording. In addition, Purchaser shall be obligated to transfer
to Seller indefeasible fee simple title to each of the Reserved Units at no cost
to the Seller. The transfer of title to the Reserved Units shall be completed
within ten (10) days of Purchaser obtaining its recorded Declaration of
Covenants, Conditions and Restrictions. This obligation of Purchaser shall
survive the closing.
ARTICLE XII
COSTS AND ADJUSTMENTS
At closing, the following items shall be adjusted or prorated between
Seller and Purchaser:
a. All interest owed on the Prior Indebtedness through and including
the date of closing shall be the responsibility of Seller and shall be
paid in full on or before the date of closing.
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 prorata portion of such
taxes. Seller's prorata portion of such taxes shall be based upon
assessments for the immediately preceding calendar year taking into
account the maximum allowable discount.
c. All other income and ordinary operating expenses for or
pertaining to the Subject Property including, but not limited to, public
utility charges, maintenance, service charges, and all other normal
operating charges of the Subject Property levied on or before the closing
date shall be paid by Seller. All charges and deposits levied or required
following the closing date shall be paid by Purchaser.
d. Purchaser will pay taxes and recording fees on notes, mortgages
and
19
financing statements and recording fees for the deed. Seller will pay
taxes on the deed and recording fees for documents needed to cure title
defects. Except as specifically set forth hereinabove, any other charges
and fees shall be paid as is normal and customary in Polk County, Florida.
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 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.
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,
20
damages, costs, or expenses incurred by Seller as a result of any inspections or
tests made by Purchaser.
ARTICLE XIV
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 Two Hundred Thousand Dollars ($200,000.00), then at
Purchaser's option, either (i) 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 closing, then the closing shall
nevertheless proceed as scheduled, and Purchaser may have the Title
Company withhold 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 in accordance with the terms of this Contract
or (ii) Purchaser may take an assignment of Seller's proceeds and a credit
for Seller's deductible (as described in paragraph [b] below) and repair
such damage;
or if said cost is:
b. greater than Two Hundred Thousand Dollars ($200,000.00), 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 but with Purchaser receiving a
credit for the amount of any deductible provided for in the applicable
insurance policy, or, if Purchaser does not elect to accept such insurance
proceeds, then either Seller or Purchaser may elect to terminate this
Contract.
ARTICLE XV
POSSESSION OF PROPERTY
Possession of the Property free and clear of all uses and encroachments,
except the
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Permitted Exceptions, shall be delivered to Purchaser at closing.
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: Xxxx, Inc.
0000 Xxxx Xxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Boss
Telephone No.: (000) 000-0000
With required copy to: Xxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxxx Xxxxxxxxxx Xxxxxx Xxxx &
Xxxxxx, P.A.
000 Xxxx Xxxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Purchaser: Silverleaf Resorts, Inc.
0000 Xxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx Xxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With required copy to: Xxxxxx X. Xxxxxx, Esq.
Meadows, Owens, Collier, Reed, Cousins & Blau,
L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
22
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 $5,000.00) shall be returned immediately to Purchaser pursuant to the
refund provisions of Article III 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) xxx Seller for specific
performance or for actual damages; provided, however, that, in the event that
Seller violates its obligations pursuant to this Contract and the closing does
not occur as a result thereof, Purchaser's right to obtain any damages hereunder
shall be limited to the recovery of Purchaser's out-of-pocket expenses, and in
no event shall Purchaser have the right to xxx for any other damages, including
consequential damages, lost profits or punitive 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.
23
ARTICLE XVIII
ASSIGNMENT
Subject to Seller's prior written approval which shall not be unreasonably
withheld, 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, duties, and obligations of Purchaser hereunder.
XIX
INTERPRETATION AND APPLICABLE LAW
This Agreement shall be construed and interpreted in accordance with the
laws of the State of Florida. 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
24
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.
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.
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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.
26
ARTICLE XXVI
ACCEPTANCE
Seller shall have until 5:00 o'clock p.m., February 16, 2004, 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 Florida, 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 Florida.
ARTICLE XXVII
ESCROW
The Escrow Agent receiving funds is authorized and agrees by acceptance of
them to deposit them promptly, hold same in escrow and, subject to clearance,
disburse them in accordance with the terms and conditions of this Contract.
Failure of clearance of funds shall not excuse Purchaser's performance. If in
doubt as to Escrow Agent's duties or liabilities under the provisions of this
Contract, Escrow Agent may, at Escrow Agent's option, continue to hold the
subject matter of the escrow until the parties mutually agree to its
disbursement, or until the judgment of a court of competent jurisdiction shall
determine the rights of the parties or Escrow Agent may deposit the subject
matter of this escrow with the Clerk of the Circuit Court having jurisdiction
over the dispute. Upon notifying all parties concerned of such action, all
liability on the part of Escrow Agent shall
27
fully terminate, except to the extent of accounting for any items previously
delivered out of escrow. Any suit between Purchaser and Seller where Escrow
Agent is made a party because of acting as Escrow Agent hereunder, or in any
suit wherein Escrow Agent interpleads the subject matter of the escrow, Escrow
Agent shall recover reasonable attorney's fees and costs incurred with the fees
and costs charged and assessed as Court costs in favor of the prevailing
parties. The parties agree that the Escrow Agent shall not be liable to any
party or person for misdelivery to Purchaser or Seller of items subject to this
escrow, unless such misdelivery is due to the willful breach of this Contract by
Escrow Agent.
ARTICLE XXVIII
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, or finder in
connection with this transaction except for a possible claim by Xxxxxx Xxxxxxx
Realty for which Seller shall be responsible, 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 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 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
28
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 XXVIII shall survive the closing.
EXECUTED on this the 12 day of February, 2004.
SELLER:
XXXX, INC., a Florida corporation
By: /s/ XXXXXX X. BOSS
-------------------------------
Name: Xxxxxx X. Boss
-----------------------------
Title: President
----------------------------
EXECUTED on this the 11 day of February, 2004.
PURCHASER:
SILVERLEAF RESORTS, INC.
By: /s/ XXXXXX X. XXXX
-------------------------------
Name: Xxxxxx X. Xxxx
-----------------------------
Title: CEO
----------------------------
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RECEIPT OF XXXXXXX MONEY AND ONE (1) EXECUTED COUNTERPART OF THIS CONTRACT IS
HEREBY ACKNOWLEDGED:
TITLE COMPANY:
FIRST AMERICAN TITLE INSURANCE COMPANY
By:_______________________________
Name:_____________________________
Title:____________________________
List of Exhibits:
Exhibit "A" Description of Property
Exhibit "B" Sold and Reserved Units
Exhibit "C" Site Plan
Exhibit "D" Surveyor's Certification
30
