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                                                                   EXHIBIT 10.39

                                CONTRACT OF SALE


         This Agreement is entered into by and between J. PHILLIP BALLARD, JR.
("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 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:

                 Those certain tracts of land located in the 12th Land
         District, Habersham County, Georgia, commonly known as "Hollywood
         Hills Golf Club," containing approximately 220 acres, more or less,
         and being more particularly described in Exhibit "A" attached hereto
         and made a part hereof for all purposes.

Hereafter the aforesaid real property is referred to as the "Land."

         The conveyance by Seller to Purchaser shall also include all buildings
and other improvements on the Land, including specifically, without limitation,
the club house, all storage buildings, all recreational facilities, 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 including all golf carts;

                 b.       If and to the extent owned by Seller, the name
         "Hollywood Hills Golf Club," as used in the ownership or operation of
         the Land and Improvements;
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                 c.       All licenses, franchises and permits used in or
         relating to the ownership, occupancy or operation of the golf club
         being operated by Seller on the Land including, in particular, any
         water permits or other utility permits;

                 d.       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;

                 e.       All service, maintenance, management or other
         contracts respecting the ownership, maintenance, operation,
         provisioning or equipping of the golf club being operated on the Land
         by Seller, including warranties and guaranties relating thereto; and

                 f.       All outstanding receivables and membership
         agreements, if any, owned by Seller which have been generated from the
         sale of membership or use rights at the golf club being operated by
         Seller on the Land.

The foregoing items are hereinafter collectively referred to as the "Golf
Course Assets."

         Hereinafter all property being conveyed to Purchaser by Seller
pursuant to this Contract including the Land, the Improvements and the Golf
Course 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 Three Million Five Hundred Twenty-Five Thousand
and No/100 Dollars ($3,525,000.00).  The purchase price shall be payable all in
cash at the closing.

                                  ARTICLE III

                                 EARNEST MONEY

         Within two (2) business days after final execution of this Contract by
all parties hereto, Purchaser shall deliver Purchaser's check in the amount of
Fifty Thousand and No/100 Dollars ($50,000.00) to Safeco Land Title of Dallas,
5220 Renaissance Tower, 1201 Elm Street, Dallas, Texas  75270, Attn:  Bobbie
Irwin (the "Title Company").  The Title Company shall immediately cash the
earnest money check and deposit the proceeds thereof in an interest bearing
account, the earnings from which shall accrue to the benefit of Purchaser
(hereinafter the proceeds of the earnest money check shall be referred to as
the "earnest money").  If Purchaser does not terminate this Contract during the
Inspection Period (as defined in Article VI





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hereinbelow), then, within two (2) business days after the expiration of the
Inspection Period, the Title Company shall immediately disburse the entire
$50,000.00 earnest money deposit to Seller; upon such disbursement the
$50,000.00 earnest 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 $50,000.00 earnest money deposit shall be applied in
partial satisfaction of the purchase price payable at closing.

         In the event that this Contract is closed, then all earnest money
shall be applied in partial satisfaction of the purchase price.  In the event
that this Contract is not closed, then the earnest money shall be disbursed in
the manner provided for elsewhere herein.  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 earnest 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 AND PURCHASER

         Within ten (10) days from the date of execution of this Contract,
Seller shall furnish to Purchaser, each of the following (collectively, the
"Due Diligence Items"):

                a.        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;


                 b.       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;

                 c.       An accurate and complete schedule reflecting with
         respect to the golf club being operated by Seller at the Subject
         Property 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, and (iii) all other income or expenses of operation of the
         golf club 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;

                d.        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;





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                 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 tax statements
         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.       A schedule of all Golf Course Assets (specifying if
         any such Golf Course Assets are leased);

                 h.       A list of any unwritten agreements affecting the
         Subject Property to which Seller is a party or of which Seller has
         knowledge; and

                 i.       All other information of any kind whatsoever in the
         possession of Seller and pertaining to the ownership and operation of
         the Subject Property.

         During the Inspection Period (defined hereinbelow), Purchaser, at its
sole cost and expense, shall obtain and deliver to Seller copies of the
following (collectively the "Purchaser Due Diligence Items"):

                 a.       An updated survey of 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 Survey shall:  (a) include a metes and bounds legal description
         of the Subject Property; (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 number of
         acres included in the Subject Property; (d) state whether the Subject
         Property (or any portion thereof) lies within a flood zone, or flood
         prone area; (e) 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 Subject
         Property has been certified by the surveyor as being correct, that the
         Subject Property does not lie within any flood zone or flood prone
         area, except as indicated thereon; and (f) 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 legal
         description employed in the documents of conveyance of the Subject
         Property; and

                 b.       A current commitment (the "Title Commitment") for the
         issuance of an owner's policy of title insurance to the Purchaser from
         the Title Company, together with good and legible copies of all
         documents constituting exceptions to Seller's title as reflected in
         the Title Commitment.


                                   ARTICLE V

                            TITLE INSPECTION PERIOD

         Purchaser shall have a period of time commencing on the date of
execution of this Contract and expiring on the date of expiration of the
Inspection Period (as defined hereinbelow) within which to review and approve
the status of Seller's title to the Subject Property (the "Title Review
Period").  If the information to be provided to or obtained by Purchaser
pursuant to the





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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 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 sixty (60) 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





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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 earnest money (less $100.00)
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.  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
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 will be in a position to
convey the Subject Property to Purchaser free and clear of all liens,
encumbrances, covenants, restrictions, rights-of-way, easements and other such
matters affecting title except for the Permitted Exceptions.





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         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 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 or any portion thereof;

                 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;

                 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; and

                 g.       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





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         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.
Notwithstanding the foregoing or anything to the contrary contained herein, it
is understood and agreed that the representations and warranties set forth
hereinabove shall survive the closing of this Contract only for a period of two
(2) years following the closing date, but not thereafter, and Seller shall have
no liability of any kind whatsoever for any breach thereof except to the extent
a claim is asserted against Seller within such two (2) year period.

                                  ARTICLE 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 earnest money deposit (less $100.00) shall be returned
to Purchaser and thereafter neither Seller nor Purchaser shall have any
continuing obligations one unto the other.





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                                   ARTICLE IX

                                    CLOSING

         The closing hereunder shall take place at the offices of the Title
Company.  The closing shall occur on or before sixty (60) 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.  Purchaser
shall have the right to obtain one sixty (60) day extension of the deadline for
closing by delivering directly to Seller, prior to the then scheduled closing
deadline, an additional Twenty-Five Thousand and No/100 Dollars ($25,000.00) in
non-refundable earnest money.  If Purchaser exercises this right, then the
deadline for closing of this Contract shall be extended by sixty (60) days; the
additional $25,000.00 in earnest money which is paid by Purchaser in order to
extend the deadline for closing of this Contract shall be non-refundable to
Purchaser except in the event of a default by Seller hereunder, but, if this
Contract closes, then such additional earnest money shall be applied in partial
satisfaction of the purchase price payable hereunder.  Upon the expiration of
the first sixty (60) day extension, Purchaser shall have the right to obtain a
second sixty (60) day extension of the deadline for closing by delivering
directly to Seller, prior to the then scheduled closing deadline, an additional
Twenty-Five Thousand and No/100 Dollars ($25,000.00) in non-refundable earnest
money.  If Purchaser exercises this right, then the deadline for closing of
this Contract shall be extended by sixty (60) days; the additional $25,000.00
in earnest money which is paid by Purchaser in order to extend the deadline for
closing of this Contract shall be non-refundable to Purchaser except in the
event of default by Seller hereunder, but if this Contract closes, then such
additional earnest money 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 deed covering the Subject
         Property, duly signed and acknowledged by Seller, which deed shall be
         in form reasonably acceptable to Purchaser for recording and shall
         convey to Purchaser good and marketable title to the Subject Property,
         free and clear of all liens, rights-of-way, easements, and other
         matters affecting title to the Subject Property, except for the
         Permitted Exceptions.





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                b.        Deliver or cause to be delivered to Purchaser an ALTA
         owner's form of title insurance policy (the "Title Policy") insuring
         Purchaser in the amount of the purchase price that Purchaser has
         acquired good and marketable title to the Subject Property, subject
         only to the Permitted Exceptions.  Purchaser shall be entitled to
         request the Title Company to provide, at Purchaser's sole cost and
         expense, such endorsements (or amendments) to the Title Policy as
         Purchaser may reasonably require so long as such endorsements or
         amendments impose no additional liability on Seller or delay the
         closing.  Purchaser acknowledges and agrees that the Title Policy may
         be actually delivered within a reasonable time following the closing
         so long as Purchaser has received at closing a current binding title
         commitment obligating the Title Company to deliver the Title Policy.
         Seller shall pay the premium for a standard owner's form of title
         insurance policy in the amount of the purchase price, and Purchaser
         shall pay the cost of any title endorsements required by Purchaser and
         the cost of any reinsurance required by Purchaser.

                 c.       Deliver a bill 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
         Golf Course Assets.

                 d.       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.

                 e.       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.  In addition, if Purchaser elects to continue to use the Yamaha golf
carts now leased by Seller for use at the Subject Property, then Purchaser must
assume all obligations outstanding under any such lease at the time of closing.

                                  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 Seller.

                 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





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         shall be based upon the amount of such taxes for the immediately
         preceding calendar year, and adjusted by cash settlement when exact
         amounts are available.  However, anything herein to the contrary
         notwithstanding, any tax abatement or refund for a period of time
         prior to closing shall belong to Seller.

                 c.       All other 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 shall be prorated as
         of the closing date.  Seller will assign to Purchaser all of Seller's
         right, title and interest in and to utility deposits and other
         deposits heretofore made by Seller in connection with the operation of
         the Subject Property.

                 d.       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 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





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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, 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),
         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
         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 a credit for Seller's deductible and
         repair such damage itself;

or if said cost is:

                 b.       greater than One Hundred Thousand Dollars
         ($100,000.00), 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,
         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 earnest 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





                                     - 12 -
<PAGE>   13
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:                     J. Phillip Ballard, Jr.
                                     P.O. Box 520
                                     330 Foster Street
                                     Cornelia, Georgia  30531
                                     
         Purchaser:                  Silverleaf Resorts, Inc.
                                     1221 Riverbend Drive
                                     Suite 120
                                     Dallas, Texas  75247
                                     Attn:  Robert E. Mead
                                     Telephone No.:  (214) 631-1166
                                     Facsimile No.:  (214) 905-0514
                                     
         With Required Copy to:      Meadows, Owens, Collier, Reed, Cousins & 
                                     Blau, L.L.P.
                                     3700 NationsBank Plaza
                                     901 Main Street
                                     Dallas, Texas  75202
                                     Attn:  George R. Bedell, Esq.
                                     Telephone No.:  (214) 749-2448
                                     Facsimile No.:  (214) 747-3732


                                  ARTICLE XVII

                                    REMEDIES

         In the event that Seller fails to timely comply with all conditions,
covenants and obligations of Seller hereunder, it 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 earnest money (less
$100.00) shall be returned immediately to Purchaser by the Title Company and
the parties hereto shall have no further liabilities or obligations one unto
the other; (ii) to waive any defect or requirement and close this Contract; or
(iii) to sue Seller for specific performance or for damages.  The exercise of
any of the foregoing remedies of Purchaser shall not in any manner be construed
as a waiver of Purchaser's right to seek specific performance or to sue for
damages, and in the event of a default by Seller hereunder, Purchaser shall be
entitled to enforce specific performance hereunder or sue Seller for damages.





                                     - 13 -
<PAGE>   14
         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
Earnest Money.  The Earnest Money is agreed upon by and between the Seller and
Purchaser as liquidated damages due to the difficulty and inconvenience of
ascertaining and measuring actual damages, and the uncertainty thereof, and no
other damages, rights, or remedies shall in any case be collectible,
enforceable, or available to the Seller other than in this paragraph defined,
and Seller shall accept the Earnest Money as Seller's total damages and relief.

                                 ARTICLE XVIII

                                   ASSIGNMENT

         Purchaser shall have the right to nominate who shall take title and
who shall succeed to Purchaser's duties and obligations hereunder, or assign
this Contract to any person, firm, corporation, or other entity which Purchaser
may, at Purchaser's sole option, choose, and from and after such nomination or
assignment, wherever in this Contract reference is made to Purchaser such
reference shall mean the nominee or assignee who shall succeed to all the
rights, duties, and obligations of Purchaser hereunder.

                                  ARTICLE XIX

                       INTERPRETATION AND APPLICABLE LAW

         This Agreement shall be construed and interpreted in accordance with
the laws of the State of Georgia.  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.





                                     - 14 -
<PAGE>   15
                                   ARTICLE 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.

                                  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





                                     - 15 -
<PAGE>   16
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.

                                  ARTICLE XXVI

                                   ACCEPTANCE

         Seller shall have until 5:00 o'clock p.m., February 25, 1998, to
execute and return a fully executed original of this Contract to Purchaser,
otherwise this Contract shall become null and void.  Time is of the essence of
this Contract.  The date of execution of this Contract by Seller shall be the
date of execution of this Contract.  If the final date of any period falls upon
a Saturday, Sunday, or legal holiday under the laws of the State of Georgia,
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 Georgia.

                                 ARTICLE XXVII

                             REAL ESTATE COMMISSION

         In the event that this Contract closes, but not otherwise, Seller
agrees to pay at closing a real estate commission to Steven Farish ("Broker"),
such commission to be in the amount of four percent (4%) of the purchase price
payable hereunder.  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.





                                     - 16 -
<PAGE>   17
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.

                                 ARTICLE XXVIII

                                    EXCHANGE

         Seller wishes to have the option to effect an exchange of real
property pursuant to the provisions of Section 1031 of the Internal Revenue
Code, as amended, in connection with the sale of the Subject Property to
Purchaser.  Consequently, if, prior to the closing hereunder, Seller designates
a property or properties as exchange property, Purchaser will use Purchaser's
best efforts to acquire the exchange property for use in an exchange with
Seller.  Alternatively, in the event Seller has not identified the exchange
property by the date of closing, this transaction shall close in such manner as
will not defeat a like kind exchange with respect to property later identified
and purchased within the qualifying time period.  Purchaser agrees to cooperate
with Seller in consummating a like kind exchange provided that in doing so
Purchaser incurs no additional cost and the closing of this Contract is not
thereby delayed.

         EXECUTED on this the 25 day of February, 1998.

                                           SELLER:


                                           /s/ J. PHILLIP BALLARD, JR.
                                           ---------------------------------
                                           J. PHILLIP BALLARD, JR.





                                     - 17 -
<PAGE>   18
         EXECUTED on this the 19TH day of February, 1998.

                                           PURCHASER:

                                           SILVERLEAF RESORTS, INC., a Texas 
                                           corporation



                                           By: /s/ ROBERT E. MEAD
                                              --------------------------------
                                           Name: Robert E. Mead
                                                ------------------------------
                                           Its:  CEO       
                                               -------------------------------



RECEIPT OF EARNEST MONEY AND ONE (1) EXECUTED COUNTERPART OF THIS CONTRACT IS 
HEREBY ACKNOWLEDGED:

TITLE COMPANY:

SAFECO LAND TITLE OF DALLAS



By:                                        
   --------------------------
Name:                             
     ------------------------
Its:                                       
    -------------------------




                                     - 18 -
<PAGE>   19
                       LIST OF EXHIBITS TO EXHIBIT 10.39


Exhibit A                  Legal Description of Land


The above-listed exhibit is omitted from this filing. Registrant agrees to
furnish supplementally a copy of any omitted exhibit to the Commission upon
request.



                                       19