Exhibit 10.284

 

AGREEMENT OF PURCHASE AND SALE

 

[Domain Site, Garland, TX]

 

ARTICLE 1. PROPERTY/PURCHASE PRICE; PHASES

 

1.1          Certain Basic Terms.

 

(a) Purchaser and Notice Address:

 

  With a copy to:     ArchCo Residential LLC Sherman & Howard L.L.C. Attn: Mark
Denyer Attn: Mike Shomo 2801 SE Hampden Road 633 Seventeenth Street, Suite 3000
Bartlesville, OK  74006 Denver, CO 80202 Telephone: (918) 397-3760 Telephone:
(303) 299-8256 E-mail: realcap@ionet.net E-mail: mshomo@shermanhoward.com      
and to:       ArchCo Residential LLC   Attn: Neil T. Brown   7 Piedmont Center,
Suite 300   Atlanta, GA 30305   Telephone: (571) 220-4829   E-mail:
neil@ntbrown.com

 

(b) Seller and Notice Address:

 

  With a copy to:     RCM Firewheel, LLC Realty Capital Management, LLC Attn:
Richard Myers Attn: Tim Coltart 909 Lake Carolyn Parkway, # 150 909 Lake Carolyn
Parkway, # 150 Irving, TX 75039 Irving, TX 75039 Telephone: (469) 533-4100
Telephone: (469) 533-4100 E-mail: myers@rcpinvestments.com E-mail:
tcoltart@realtycapital.com       and to:       Kelly Hart & Hallman, LLP     
Attn: J. Andrew Rogers   201 Main Street, Suite 2500   Fort Worth, Texas 76102  
Telephone: (817) 878-3546   E-mail: andy.rogers@kellyhart.com

 

(c) Title Company and Notice Address:

 

Old Republic National Title Insurance Company   Attn: David Lawrence   8201
Preston Road, Suite 450   Dallas, TX 75225   Telephone: (214) 239-6412   E-mail:
dlawrence@oldrepublictitle.com  

 

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(d) Escrow Agent:

 

Old Republic National Title Insurance Company   Attn: David Lawrence   8201
Preston Road, Suite 450   Dallas, TX 75225   Telephone: (214) 239-6412   E-mail:
dlawrence@oldrepublictitle.com  

 

(e) Agreement Date: The latest date of execution by the Seller or the Purchaser,
as indicated on the signature page of this Agreement.       (f) Purchase Price:
(i) With respect to the Phase I Property (defined in Section 1.3), $3,975,000
(the “Phase I Purchase Price”).  The Phase I Purchase Price may be increased
pursuant to Section 2.4(c)(1).           (ii) With respect to the Phase II
Property (defined in Section 1.3), $5,075,000 (the “Phase II Purchase
Price”).  The Phase II Purchase Price may be increased pursuant to Section
2.4(c)(2).           (iii) With respect to the Phase III Property (defined in
Section 1.3), $6,000,000 (the “Phase III Purchase Price”).  The Phase III
Purchase Price may be increased pursuant to Section 2.4(c)(3).       (g) Earnest
Money: Defined in Section 1.4.       (h) Due Diligence Period: The period ending
75 days after the Agreement Date.       (i) Closing Date: (i) With respect to
the Phase I Property, as designated by the Purchaser upon not less than five
days’ prior notice, but no later than the Outside Closing Date for the Phase I
Property.  The “Outside Closing Date” for the Phase I Property means October 30,
2015.           (ii) With respect to the Phase II Property, 30 days after
Purchaser delivers its Phase II Option Notice (defined in Section 1.2(c)), but
no later than the Outside Closing Date for the Phase II Property.  The “Outside
Closing Date” for the Phase II Property means the earlier of (A) six months
after Purchaser receives a final certificate of occupancy for the Phase I
Project or (B) December 15th, 2017.  The Outside Closing Date for the Phase II
Property may be extended by Purchaser pursuant to Section 1.2(d) and in
accordance with Sections 2.7(a) and 2.7(d).           (iii) With respect to the
Phase III Property, 30 days after Purchaser delivers its Phase III Option Notice
(defined in Section 1.2(e)), but no later than the Outside Closing Date for the
Phase III Property.  The “Outside Closing Date” for the Phase III Property means
the earlier of (A) six months after Purchaser receives a final certificate of
occupancy for the Phase II Project, or (B) December 15th, 2019.  The “Outside
Closing Date” for the Phase III Property may be extended by Purchaser pursuant
to Section 1.2(f) and in accordance with Sections 2.7(a) and 2.7(d).

 

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(j) Brokers: Mark Boone of Realty Capital Management and Andrew Prine of
Stratford Land Company.       (k) Proposed Project: A Class A, urban-style
apartment complex of approximately 1,025 units to be developed in three phases:
          (i)  The “Phase I Project”, comprised of a minimum of 300 units to be
constructed on the Phase I Development Parcel (defined in Section 1.6(d)(1);    
      (ii) The “Phase II Project”, comprised of approximately 350 units to be
constructed on the Phase II Development Parcel (defined in Section 2.3(b); and  
        (iii) The “Phase III Project”, comprised of approximately 375 units to
be constructed on the Phase III Development Parcel (defined in Section 2.3(b));
in each case pursuant to plans and specifications prepared by and reasonably
satisfactory to Purchaser.       (l) Business Day: Any day which is not (i) a
Saturday, (ii) a Sunday, or (iii) a holiday on which national banks operating in
Garland, Texas, are authorized to be closed.

 

1.2          Purchase and Sale and Option.

 

(a)          Agreement and Grant. Subject to the terms and conditions of this
Agreement, (i) Seller agrees to sell to Purchaser, and Purchaser agrees to
purchase from Seller, the Phase I Property (defined in Section 1.3), and (ii)
Seller grants to Purchaser the exclusive option to purchase the Phase II
Property (defined in Section 1.3) (the “Phase II Option”) and the Phase III
Property (defined in Section 1.3) (the “Phase III Option”). At the Closing
(defined in Section 5.1) for the Phase I Property, Seller and Purchaser shall
execute a Memorandum of Option (the “Memorandum”). Purchaser shall deliver a
proposed form of Memorandum to Seller for its reasonable review and approval
within 45 days after the Agreement Date and the parties shall mutually and in
good faith agree upon the form of the Memorandum prior to the end of the Due
Diligence Period. Upon the Closing for the Phase I Property, the Escrow Agent
shall record the Memorandum in the real property records of Dallas County,
Texas.

 

(b)          Intentionally Deleted.

 

(c)          Phase II Option. Purchaser may exercise the Phase II Option by
giving written notice to Seller of Purchaser’s exercise of the Phase II Option
(the “Phase II Option Notice”), subject to the following conditions: (i) Closing
for the Phase I Property has occurred; (ii) at the Closing for the Phase I
Property, Purchaser delivered $50,000 to Seller as the option payment for the
Phase II Property (the “Phase II Option Payment”); (iii) Purchaser delivers the
Phase II Option Notice to Seller not later than 30 days before the Outside
Closing Date for the Phase II Property. If Purchaser exercises the Phase II
Option in accordance with this Section 1.2(c), then Seller shall sell to
Purchaser, and Purchaser shall purchase from Seller, the Phase II Property under
the terms and conditions of this Agreement. If Purchaser does not exercise the
Phase II Option in accordance with this Section 1.2(c), the Phase II Option, the
Phase III Option and this Agreement shall terminate, and all further rights and
obligations of the parties under this Agreement shall terminate, except those
which by their terms survive any termination of this Agreement. The Phase II
Option Payment shall be deemed earned by Seller upon receipt by Seller and shall
not be credited against the Phase II Purchase Price at the Closing for the Phase
II Property. The Phase II Option Payment shall not be refunded to Purchaser
except in the event of Seller’s default under this Agreement.

 

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(d)          Phase II Extension. Purchaser may extend the Outside Closing Date
for the Phase II Property up to two times, for 30 days for each extension, by
(i) giving written notice to Seller (each, a “Phase II Extension Notice”) of the
extension at least 30 days before the Outside Closing Date for the Phase II
Property, as it may have been previously extended, and (ii) delivering an
extension payment in the amount of $20,000 (an “Extension Payment”) to Seller
within three Business Days after Purchaser delivers the corresponding Phase II
Extension Notice. If Purchaser does not pay an Extension Payment in accordance
with this Section 1.2(d), Purchaser shall be deemed to have not extended the
Outside Closing Date for the Phase II Property under the corresponding Phase II
Extension Notice. No Extension Payments shall be credited against the Phase II
Purchase Price or refunded to Purchaser except in the event of Seller’s default
under this Agreement.

 

(e)          Phase III Option. Purchaser may exercise the Phase III Option by
giving written notice to Seller of Purchaser’s exercise of the Phase III Option
(the “Phase III Option Notice”), subject to the following conditions: (i) at the
Closing for the Phase I Property, Purchaser delivered $50,000 to Seller as the
option payment for the Phase III Property (the “Phase III Option Payment”); (ii)
Closing for the Phase II Property has occurred; (iii) Purchaser delivers the
Phase III Option Notice to Seller not later than 30 days before the Outside
Closing Date for the Phase III Property. If Purchaser exercises the Phase III
Option in accordance with this Section 1.2(e), then Seller shall sell to
Purchaser, and Purchaser shall purchase from Seller, the Phase III Property
under the terms and conditions of this Agreement. If Purchaser does not exercise
the Phase III Option in accordance with this Section 1.2(e), the Phase III
Option and this Agreement shall terminate, and all further rights and
obligations of the parties under this Agreement shall terminate, except those
which by their terms survive any termination of this Agreement. The Phase III
Option Payment shall be deemed earned by Seller upon receipt by Seller and shall
not be credited against the Phase III Purchase Price at the Closing for the
Phase III Property The Phase III Option Payment shall not be refunded to
Purchaser except in the event of Seller’s default under this Agreement.

 

(f)          Phase III Extension. Purchaser may extend the Outside Closing Date
for the Phase III Property up to two times, for 30 days for each extension, by
(i) giving written notice to Seller (each, a “Phase III Extension Notice”) of
the extension at least 30 days before the Outside Closing Date for the Phase III
Property, as it may have been previously extended, and (ii) delivering an
Extension Payment to Seller within three Business Days after Purchaser delivers
the corresponding Phase III Extension Notice. If Purchaser does not pay an
Extension Payment in accordance with this Section 1.2(f), Purchaser shall be
deemed to have not extended the Outside Closing Date for the Phase III Property
under the corresponding Phase III Extension Notice. No Extension Payments shall
be credited against the Phase III Purchase Price or refunded to Purchaser except
in the event of Seller’s default under this Agreement.

 

1.3          Property. The “Property” means the approximately 135.89 gross acres
of land (the “Land”, comprised of, collectively, the Phase I Land, the Phase II
Land and the Phase III Land (as those terms are defined in Section 1.6(c))),
including at least 36.4 developable acres of land (comprised, collectively, of
the Phase I Development Parcel and the Phase II & III Development Parcel
(defined in Section 1.6(d))), located in Garland, Texas and as described in
Exhibit A attached to this Agreement, together with all and singular the rights,
benefits, privileges, easements, tenements, hereditaments, and appurtenances
belonging or appertaining to, respectively, each of the Phase I Land, the Phase
II Land and the Phase III Land, and Seller’s rights, easements or other
interests, if any, in and to adjacent streets, alleys and rights-of-way, or
other property abutting, respectively, each of the Phase I Land, the Phase II
Land and the Phase III Land, and together with any and all minerals and mineral
rights, water and water rights, wells, well rights and well permits, water and
sewer taps, sanitary or storm sewer capacity or reservations and rights under
utility agreements with any applicable governmental or quasi-governmental
entities or agencies with respect to the providing of utility services to,
respectively, each of the Phase I Land, the Phase II Land and the Phase III Land
(respectively, the “Phase I Property”, the “Phase II Property” and the “Phase
III Property”). Each of the Phase I Property, the Phase II Property and the
Phase III Property may be referred to individually as a “Phase”.

 

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1.4          Earnest Money. Within five Business Days after receipt of a fully
executed copy of this Agreement, Purchaser shall deposit $25,000 with the Escrow
Agent as an earnest money deposit (the “First Deposit”). If this Agreement is
not terminated under Section 2.2(b), Purchaser shall deposit $50,000 with the
Escrow Agent as an additional earnest money deposit (the “Second Deposit”)
within five Business Days after the end of the Due Diligence Period. “Earnest
Money” means, collectively, the First Deposit, and the Second Deposit (once made
by Purchaser), together with interest on such amounts. The Earnest Money shall
be applied to the Phase I Purchase Price at Closing for the Phase I Property.
If, before Closing for the Phase I Property occurs, this Agreement terminates
pursuant to any express right of Purchaser to terminate this Agreement, the
Escrow Agent shall disburse the Earnest Money in accordance with Article 9 of
this Agreement, and all further rights and obligations of the parties under this
Agreement shall terminate, except those which by their terms survive any
termination of this Agreement. The Escrow Agent shall hold and disburse the
Earnest Money in accordance with Article 9 of this Agreement.

 

1.5          Independent Contract Consideration. At the same time as the deposit
of the Earnest Money to the Escrow Agent, Purchaser shall deliver to Seller the
sum of $100.00 in cash or by check (the “Independent Contract Consideration”)
which amount has been bargained for and agreed to as consideration for
Purchaser’s exclusive option to purchase the Property and the Due Diligence
Period as provided in this Agreement, and for Seller’s execution and delivery of
this Agreement. The Independent Contract Consideration is in addition to and
independent of all other consideration provided in this Agreement, and is
nonrefundable in all events.

 

1.6          Land, Land Areas, Land Phases, Development Parcels and Flood Plain
Improvements.

 

(a)          Existing Land. Seller holds title to the Land, consisting of
approximately 135.89 acres of land depicted and described on the Land Title
Survey – 135.89 Acres, having a revision date of December 20, 2012 and prepared
by Dowdey, Anderson & Associates, Inc. as Job No. 07039 (the “Existing Land
Survey”). The locations and approximate boundaries of the Phase I Land, the
Phase II Land, and the Phase III Land are depicted on Exhibit B attached to this
Agreement (the “Land Areas Exhibit”).

 

(b)          Land Areas. Approximately 50 acres of the Land fronting on Bunker
Hill Road (the “PD Land Area”) is zoned as Planned Development District (PD) for
Multifamily Uses under Ordinance No. 6539 adopted by the City of Garland, Texas
(the “City”) on May 1, 2012. The Land includes the entire PD Land Area. The
remainder of the land area of the Land (the “AG Land Area”) is zoned as
Agriculture (AG) District. The approximate location of the boundary line between
the PD Land Area and the AG Land Area is depicted on the Land Areas Exhibit. A
portion of the AG Land Area may be dedicated to the City (collectively, the
“Dedication Land Area”) following the Closing for the Phase I Property. The
approximate location of the proposed boundary line between the Dedication Land
Area and the remainder of the Land (the “Dedication Property Line”) is shown on
the Land Areas Exhibit, and the final location of the Dedication Property Line
shall be determined pursuant to Section 2.6(a).

 

(c)          Land Phases. The Land will be divided into the Phase I Land, the
Phase II Land and the Phase III Land in accordance with the terms and conditions
of this Agreement.

 

(1)         “Phase I Land” means the portion of the Land to be determined and
described in accordance with Section 2.3(a). Purchaser intends to construct the
Phase I Project on the Phase I Land.

 

(2)         “Phase II Land” means the portion of the Land to be determined and
described in accordance with Section 2.3(b). Purchaser intends to construct the
Phase II Project on the Phase II Land.

 

(3)         “Phase III Land” means the portion of the Land to be determined and
described in accordance with Section 2.3(b). Purchaser intends to construct the
Phase III Project on the Phase III Land.

 

(d)          Development Parcels. The “Development Parcels” means, collectively,
the Phase I Development Parcel and the Phase II & III Development Parcel.

 

(1)         “Phase I Development Parcel” means the portion of the Phase I Land
to be determined and described in accordance with Section 2.6(a), subject to the
following general criteria: The Phase I Development Parcel shall (A) be
comprised of at least 10 acres; (B) be located entirely within the Phase I Land;
(C) be located entirely within the PD Land Area; and (D) have boundaries in the
approximate locations depicted on the Land Areas Exhibit.

 

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(2)         “Phase II & III Development Parcel” means the portion of the Land
(excluding the Phase I Land) to be determined and described in accordance with
Section 2.6(a), subject to the following general criteria: The Phase II & III
Development Parcel shall (A) be comprised of at least 26.4 acres; (B) be located
entirely within the PD Land Area; and (C) have boundaries in the approximate
locations depicted on the Land Areas Exhibit.

 

(e)          Flood Plain Improvements. As of the Agreement Date, most of Tract 1
and all of Tract 2 and Tract 3 are located within a special flood hazard area
(as that phrase is defined in 49 CFR Part 59, an “SFHA”) designated on the Flood
Insurance Rate Map (the “FIRM”) promulgated by the Federal Emergency Management
Agency (“FEMA”) and applicable to the Property. “Flood Plain Improvements” means
all work and materials required to place fill, construct ponds and graded
floodplain storage shelves, and perform related grading and other work necessary
to cause the Development Parcels to be removed from the SFHA and cause FPI Final
Approval to occur. “FPI Final Approval” means, collectively, (i) the approval of
the completed Flood Plain Improvements by all applicable federal, state and
local governmental agencies, (ii) the issuance by FEMA of a letter of map
revision for the FIRM demonstrating that no portion of the Development Parcels
is, and no improvements constructed on the Development Parcels will be, within
an SFHA (the “LOMR”), (iii) any restrictions, obligations or conditions imposed
on the Property or the owner of the Property by any governmental agency, in
connection with the approval of the Flood Plain Improvements or the issuance of
the LOMR, has been approved in writing by Purchaser, which approval shall not be
unreasonably withheld and (provided Purchaser includes with its request for
approval a statement in BOLDFACE TYPE AND ALL CAPITAL LETTERS that Purchaser’s
approval shall be deemed given if Purchaser does not deliver written objections
to Seller within five (5) business days after Purchaser’s receipt of written
request for approval) shall be deemed given if Purchaser does not deliver
written objections to any request for approval within five (5) Business Days
after Purchaser’s receipt of written request for approval, together with copies
of all documents that describe or impose the restrictions, obligations or
conditions, and (iv) that all appeal periods with respect to the approvals under
clause (i) and the issuance of the LOMR under clause (ii) have expired without
any appeal having been filed or, if filed, the appeal has been resolved to the
reasonable satisfaction of Purchaser. Seller acknowledges that the completion of
the construction of the Flood Plain Improvements and achieving FPI Final
Approval by Seller in accordance with this Agreement is a material covenant and
a material part of the consideration to Purchaser under this Agreement.

 

ARTICLE 2. INSPECTION AND DEVELOPMENT APPROVALS

 

2.1          Seller’s Delivery of Specified Documents. Within five Business Days
after the Agreement Date, Seller shall provide to Purchaser the following
information with respect to the Property (the “Property Information”) to the
extent in Seller’s possession or control: (i) the latest property tax bills and
value renditions from all taxing authorities; (ii) any environmental reports and
a schedule listing any such reports; (iii) all existing plans, specifications,
permits, approvals (and any applications for permits or approvals), maps and
surveys (including, without limitation, archaeological, boundary, topographic
and tree surveys); (iv) any subdivision reports; (v) any existing title report,
commitment or policy, together with copies of any covenants, conditions,
restrictions and other exceptions to title; (vi) any soils and engineering
reports; (vii) any written notices, reports, citations, orders, decisions,
correspondence, or memoranda from any governmental authority (including, but not
limited to, copies of any zoning letters); (viii) all agreements with or
applications to, and responses and decisions from, any governmental authority
with respect to any zoning modification, variance, exception, platting or other
matter relating to the zoning, use, development, subdivision or platting of the
Property; (ix) copies of all agreements, studies, reports, correspondence and
other documents relating to the presence or absence of any endangered species or
environmentally sensitive areas on the Property; (x) any pleadings, judgments,
court orders and settlement agreements relating to or resulting from legal
proceedings affecting the Property; and (xi) any leases, contracts or agreements
relating to the Property or services being provided or to be provided to the
Property, including, without limitation, any agreements with electric, cable,
gas, telephone or other utility providers. Seller shall provide to Purchaser any
documents described above and coming into Seller’s possession or control or
produced by Seller after the initial delivery above and shall continue to
provide same during the pendency of this Agreement.

 

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2.2          Due Diligence.

 

(a)          Purchaser shall have through the last day of the Due Diligence
Period in which to examine, inspect, and investigate the Property and, in
Purchaser’s sole and absolute judgment and discretion, to determine whether the
Property is acceptable to Purchaser, whether Purchaser is prepared to make an
investment in the Property, and for Purchaser to obtain all necessary internal
approvals.

 

(b)          If Purchaser, in Purchaser’s sole and absolute judgment and
discretion, determines that the Property is acceptable to Purchaser, Purchaser
may deliver a written notice to Seller and Escrow Agent (a “Due Diligence
Approval Notice”) on or before the last day of the Due Diligence Period. If
Purchaser so delivers a Due Diligence Approval Notice to Seller and Escrow
Agent, Purchaser shall deposit the Second Deposit with the Escrow Agent in
accordance with Section 1.4. If Purchaser so delivers a Due Diligence Approval
Notice to Seller and Escrow Agent in accordance with this Section 2.2(b) and
deposits the Second Deposit with Escrow Agent in accordance with Section 1.4,
Purchaser and Seller shall proceed to Closing in accordance with and subject to
the terms and conditions of this Agreement. Notwithstanding anything to the
contrary in this Agreement, Purchaser may terminate this Agreement by giving
notice of termination (a “Due Diligence Termination Notice”) to Seller on or
before the last day of the Due Diligence Period. If Purchaser fails to deposit
the Second Deposit with Escrow Agent in accordance with Section 1.4 or fails to
deliver either a Due Diligence Approval Notice or a Due Diligence Termination
Notice to Seller and Escrow Holder, Purchaser shall be deemed to have delivered
a Due Diligence Termination Notice on the last day of the Due Diligence Period
and Purchaser shall be deemed to have terminated this Agreement effective as of
the expiration of the Due Diligence Period.

 

(c)          Purchaser and its agents, employees, and representatives shall have
a continuing right of reasonable access to the Property during the pendency of
this Agreement for the purpose of conducting surveys, engineering, geotechnical,
and environmental inspections and tests (including intrusive inspection and
sampling), and any other inspections, studies, or tests reasonably required by
Purchaser. In the course of its investigations Purchaser may make inquiries to
third parties including, without limitation, lenders, contractors, and
municipal, local, and other government officials and representatives, and Seller
consents to such inquiries. Purchaser shall keep the Property free and clear of
any liens and will indemnify, defend, and hold Seller harmless from all claims
and liabilities asserted against Seller as a result of any such entry by
Purchaser, its agents, employees, or representatives, excluding any claims or
liabilities arising from Purchaser’s discovery of any condition relating to the
Property. Further, Purchaser agrees that Purchaser shall carry commercial
general liability insurance with limits of liability of not less than
$1,000,000.00 per occurrence and $2,000,000.00 general aggregate covering all
activities of Purchaser’s agents, contractors and representatives while
exercising Purchaser’s right of entry upon the Property. Seller and Seller’s
lender shall be named as additional insureds on such commercial general
liability policy. Purchaser shall deliver the required certificate of insurance
to Seller evidencing such coverage prior to the date that any agent or
contractor of Purchaser first goes onto the Property. Purchaser shall deliver
copies of all written reports, inspections, tests and studies it obtains
regarding the Property to Seller within one Business Day after its receipt of
same. Purchaser agrees to keep the contents and results of such reports,
inspections, tests and studies confidential except that Purchaser may divulge
same to (i) its potential lenders and investors, (ii) its consultants and
attorneys, (iii) to the City if necessary in connection with obtaining the
Development Approvals (defined below), and (iv) if required by law. If any
inspection or test disturbs the Property, Purchaser will restore the Property to
the same condition as existed prior to any such inspection or test. Purchaser’s
obligations under this Section 2.2(c) shall survive the Closings and any
termination of this Agreement.

 

2.3          Land Phases.

 

(a)          Phase I Land. No later than 10 Business Days before the end of the
Due Diligence Period, Purchaser shall deliver to Seller the proposed legal
description for the Phase I Land. Within five Business Days after Purchaser
delivers the proposed legal description for the Phase I Land, Seller shall
review it and give written notice to Purchaser whether Seller approves it.
Seller shall not unreasonably withhold its approval of the proposed legal
description for the Phase I Land so long as it is substantially consistent with
the Land Areas Exhibit.

 

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(b)          Phase II Land and Phase III Land. Not later than 90 days before the
Outside Closing Date for the Phase II Property, as it may have been extended
under Section 1.2(d), Purchaser shall deliver to Seller the proposed legal
description for each of (i) the Phase II Land, (ii) the corresponding portion of
the Phase II & III Development Parcel located within the Phase II Land (the
“Phase II Development Parcel”), (iii) the Phase III Land, and (iv) the
corresponding portion of the Phase II & III Development Parcel located within
the Phase III Land (the “Phase III Development Parcel”). Within five Business
Days after Purchaser delivers the proposed legal descriptions, Seller shall
review them and give written notice to Purchaser whether Seller approves them.
Seller shall not unreasonably withhold its approval of the proposed legal
descriptions so long as they are substantially consistent with the Land Areas
Exhibit.

 

2.4          Development Approvals.

 

(a)          Purchaser’s Right to Obtain. Purchaser shall have the right to
apply for and obtain from all applicable private and governmental authorities
final zoning, site plan and all other applicable development approvals, permits
and licenses (excluding only platting and a building permit) (collectively, the
“Development Approvals”) required in connection with the development and
construction of the Proposed Project. Purchaser’s efforts to obtain the
Development Approvals shall be at its sole cost and expense (including the
posting of any fiscal requirements). Development Approvals shall include,
without limitation, a Concept Plan (as defined in the City Code of Ordinances)
for the entire Proposed Project, a Detail Plan (as defined in the City Code of
Ordinances) for the Proposed Project for each Phase, and any approvals required
under any declaration of covenants, conditions and restrictions or any other
private agreement affecting the Proposed Project for each Phase. Purchaser shall
submit to the City its proposed Concept Plan for the entire Proposed Project and
the Property within 30 days after the end of the Due Diligence Period. Purchaser
shall not be obligated to close the transaction for each Phase unless Final
Approval of the Development Approvals (defined below) has occurred with respect
to all Development Approvals required for the Proposed Project for the
respective Phase. By way of example, Development Approvals required for the
Phase I Project includes, among other things, a Concept Plan for the entire
Proposed Project and a Detail Plan for the Phase I Project. “Final Approval of
the Development Approvals” means that the Development Approvals must be without
conditions or restrictions (including the payment of assessments or the posting
of security) that are unacceptable to Purchaser, as determined by Purchaser in
its reasonable discretion, and that all appeal periods with respect to the
Development Approvals shall have expired without any appeal having been filed
or, if filed, such appeal shall have been resolved to the reasonable
satisfaction of Purchaser.

 

(b)          Seller’s Cooperation. Seller agrees to cooperate fully with
Purchaser, without expense to Seller, to enable Purchaser to apply for and
obtain all Development Approvals. Seller shall execute all documents required
for the development approval process including the appointment of Purchaser as
its agent or nominee to obtain any Development Approvals. Seller shall appear at
public hearings, city staff meetings, or other meetings related to the approval
of Purchaser’s application(s) as may be reasonably requested by Purchaser.
Seller agrees to execute such plats, including any necessary lot splits, as may
be required whereby each Phase shall be a “legal lot” under all applicable
ordinances, laws, and regulations, and Seller shall provide easements over
adjacent tracts of land owned by Seller (to be recorded at the appropriate
Closing), in form and substance reasonably satisfactory to Purchaser, for access
and utilities as may be required in connection with the Development Approvals
and as required by utility companies or any governmental authorities with
respect to the Proposed Project. Such plats and dedications shall be made and
granted by Seller at such time as is required by the applicable governmental
authority. The Property description and Survey shall be revised to take into
account de minimis changes to the Property boundaries requested by Purchaser
that are necessary to permit the development of the Proposed Project.

 

(c)          Purchase Price Adjustment.

 

(1)         Phase I Purchase Price. If, pursuant to Final Approval of the
Development Approvals for the Phase I Project, the Phase I Project may be
comprised of more than 300 apartment units, the Phase I Purchase Price shall be
increased by an amount equal to the product of (A) the number of apartment units
so approved for the Phase I Project minus 300, times (B) $13,250.

 

(2)         Phase II Purchase Price. If, pursuant to Final Approval of the
Development Approvals for the Phase II Project, the Phase II Project may be
comprised of more than 350 apartment units, the Phase II Purchase Price shall be
increased by an amount equal to the product of (A) the number of apartment units
so approved for the Phase II Project minus 350, times (B) $14,500.

 

 8 

 

 

(3)         Phase III Purchase Price. If, pursuant to Final Approval of the
Development Approvals for the Phase III Project, the Phase III Project may be
comprised of more than 375 apartment units, the Phase III Purchase Price shall
be increased by an amount equal to the product of (A) the number of apartment
units so approved for the Phase III Project minus 375, times (B) $16,000.

 

(d)          Termination Right. Purchaser shall use its commercially reasonable
and diligent efforts to obtain the Development Approvals for the Phase I
Project. If Purchaser determines at any time that, in spite of the use of its
commercially reasonable and diligent efforts, it has been or will be unable to
obtain Final Approval of the Development Approvals for a Phase by the Outside
Closing Date for the respective Phase, then Purchaser may, by delivering written
notice to Seller at least 30 days before the applicable Outside Closing Date,
(i) terminate this Agreement (such notice is a “Development Approvals
Termination Notice”); or (ii) waive the condition for Final Approval of the
Development Approvals for the respective Phase and proceed with the Closing for
the respective Phase on such date to which the parties may mutually agree, but
in any event, no later than the Outside Closing Date for the respective Phase,
as it may have been extended under Section 1.2. In the event Purchaser delivers
the Development Approvals Termination Notice in compliance with this Section
2.4(d), Seller shall retain the Phase II Option Payment and Phase III Option
Payment if such payments were made by Purchaser.

 

2.5          Seller Subdivision and Dedication Responsibilities.

 

(a)          Seller Subdivision for the Phase I Property. Before the Closing for
the Phase I Property, Seller shall, at its cost and expense, use its
commercially reasonable and diligent efforts to obtain approval for any
subdivision of the Property required (A) in order for Seller to legally convey
to Purchaser, in accordance with state and local subdivision laws and
regulations, the Phase I Property at the Closing for the Phase I Property, and
(B) to satisfy the requirements of the City or other governmental agencies in
connection with the dedication of the Dedication Land Area.

 

(b)          Seller Subdivision for Subsequent Phases. Before the Closing for,
respectively, the Phase II Property and the Phase III Property, Seller shall, at
its cost and expense, use its commercially reasonable and diligent efforts to
obtain approval for any subdivision required in order for (A) Seller to legally
convey to Purchaser, in accordance with state and local subdivision laws and
regulations, the Phase II Property at the Closing for the Phase II Property, and
(B) Seller to legally convey to Purchaser, in accordance with state and local
subdivision laws and regulations, the Phase III Property at the Closing for the
Phase III Property.

 

(c)          Seller Subdivision Defined. “Seller Subdivision” means any
subdivision of the Property required under Section 2.5(a) or 2.5(b). Seller
shall be responsible for all obligations (including, without limitation, the
posting of any fiscal requirements, the construction of any improvements and the
dedication of any real property or improvements or the payment of any fees in
lieu of dedication) imposed as a condition of approval of any Seller Subdivision
by any governmental agency. Any Seller Subdivision, and any restrictions,
obligations or conditions imposed by any Seller Subdivision on the Property or
the owner of the Property, shall be subject to Purchaser’s prior written
approval, which approval shall not be unreasonably withheld and (provided
Purchaser includes with its request for approval a statement IN BOLDFACE TYPE
AND ALL CAPITAL LETTERS that Purchaser’s approval shall be deemed given if
Purchaser does not deliver written objections to Seller within five (5) business
days after Purchaser’s receipt of written request for approval) shall be deemed
given if Purchaser does not deliver written objections to any request for
approval within five (5) Business Days after Purchaser’s receipt of written
request for approval, together with copies of all documents that describe or
impose the restrictions, obligations or conditions.

 

(d)          Dedication Land Area. During the pendency of this Agreement, Seller
and Purchaser shall agree in writing regarding the timing of the dedication of
the Dedication Land Area and the terms upon which either Seller and/or
Purchaser, as applicable, may dedicate the Dedication Land Area to the City or
other governmental agencies. The parties contemplate that no earlier than the
Closing for the Phase I Property and no later than the Closing for the Phase II
Property, Seller and/or Purchaser may dedicate the Dedication Land Area to the
City or such other governmental agencies as Seller and Purchaser have agreed
upon. In the event of a dedication, the party dedicating the Dedication Land
Area shall be responsible for all obligations (including, without limitation,
the posting of any fiscal requirements, the construction of any improvements and
the dedication of any other property or improvements or the payment of any fees)
imposed as a condition of approval of the City’s acceptance of that portion of
the Dedication Land Area owned by such party. Any restrictions, obligations or
conditions imposed in connection with the dedication of the Dedication Land Area
on the Property (other than the Dedication Land Area) or on the owner of the
Property (other than the Dedication Land Area), shall be subject to Purchaser’s
prior written approval, which approval shall not be unreasonably withheld and
(provided Purchaser includes with its request for approval a statement IN
BOLDFACE TYPE AND ALL CAPITAL LETTERS that Purchaser’s approval shall be deemed
given if Purchaser does not deliver written objections to Seller within five (5)
business days after Purchaser’s receipt of written request for approval) shall
be deemed given if Purchaser does not deliver written objections to any request
for approval within five (5) Business Days after Purchaser’s receipt of written
request for approval.

 

 9 

 

 

(e)          Survival. The parties’ obligations under this Section 2.5 shall
survive the Closings.

 

2.6          FPI Pre-Construction Matters.

 

(a)          FPI Pre-Construction Package. Within 30 days after the Agreement
Date, Seller shall deliver to Purchaser the following items (collectively, the
“FPI Pre-Construction Package”) for Purchaser’s review and approval: (i) the
proposed final engineering drawings and specifications for all Flood Plain
Improvements (once approved by Purchaser under this Section 2.6(a), the “Plans
and Specifications”); (ii) an estimate of the costs to construct all Flood Plain
Improvements (once approved by Purchaser under this Section 2.6(a), the “FPI
Construction Estimate”); (iii) the preliminary construction schedule for
construction of the Flood Plain Improvements; (iv) the name of the contractor
that Seller proposes to engage to construct the Flood Plain Improvements (once
approved by Purchaser under this Section 2.6(a), the “FPI Contractor”); (v) a
copy of the proposed construction contract between Seller and the FPI Contractor
for the construction of all FPI Improvements (once approved by Purchaser under
this Section 2.6(a), the “FPI Construction Contract”) conforming to the
requirements of Section 2.6(b); (vi) the names of the surveyor, engineer and
other consultants (each, once approved by Purchaser under this Section 2.6(a),
an “FPI Consultant”) that Seller proposes to engage to administer and monitor
the construction of the Flood Plain Improvements, prepare and process the LOMR
Request and obtain the FPI Final Approval; (vii) a copy of the proposed contract
between Seller and each FPI Consultant (each, once approved by Purchaser under
this Section 2.6(a), an “FPI Consultant Contract”) conforming to the
requirements of Section 2.6(c); (viii) an estimate of total costs to administer
and monitor the construction of the Flood Plain Improvements, prepare and
process the LOMR Request and obtain FPI Final Approval (once approved by
Purchaser under this Section 2.6(a), the “FPI Administration Estimate”); and
(ix) a list of all permits from applicable federal, state and local governmental
agencies necessary to construct the Flood Plain Improvements (the “FPI
Permits”). Within 21 days after Seller delivers the complete FPI
Pre-Construction Package to Purchaser, Purchaser shall review, and give written
notice to Seller whether Purchaser approves, each item of the FPI
Pre-Construction Package. Purchaser shall not unreasonably withhold its approval
of each item of the FPI Pre-Construction Package, and Purchaser’s approval shall
be deemed given unless Purchaser delivers its written objections within such
21-day period. Purchaser’s approval of any item of the FPI Pre-Construction
Package shall not constitute Purchaser’s endorsement of the completeness or
adequacy of the item and, notwithstanding Purchaser’s approval of any item of
the FPI Pre-Construction Package, Seller shall remain responsible for
constructing the Flood Plain Improvements and obtaining FPI Final Approval in
accordance with this Agreement.

 

(b)          FPI Construction Contract. The FPI Construction Contract shall
provide that:

 

(1)         The FPI Contractor shall (A) construct all Flood Plain Improvements
for a fixed lump sum or guaranteed maximum price; (B) construct the Flood Plain
Improvements in accordance with the Plans and Specifications and all applicable
laws and regulations; (C) engage one or more independent third- party testing
agencies to perform soils compaction sampling and testing at intervals in the
work specified in the FPI Construction Contract and such other sampling and
testing consistent with the materials and work comprising the Flood Plain
Improvements; (D) maintain, and cause its subcontractors to maintain, commercial
liability insurance, workers compensation insurance, builder’s risk insurance
and other insurance, all with such coverages, minimum limits and maximum
deductibles that Seller and Purchaser shall reasonably require and naming Seller
and Purchaser as additional insureds; (E) give written notice to Purchaser of
any default by Seller the FPI Construction Contract at the same time that notice
of the default is given to Seller; (F) indemnify and hold harmless Purchaser for
all claims and liabilities arising in connection with the construction of the
Flood Plain Improvements; (G) provide, and cause its subcontractors to provide,
for the benefit of, and in form and substance acceptable to, Seller and
Purchaser lien waivers in connection with each progress payment and final,
unconditional lien waivers upon final payment; (H) remove any lien for labor and
materials filed against any portion of the Property so long as the FPI
Contractor has been paid (less any applicable retainage) for such labor and
materials; (I) provide, and cause its subcontractors to provide, for the benefit
of, and in form and substance reasonably acceptable to, Seller and Purchaser
warranties for a period of one year after FPI Final Approval that the Flood
Plain Improvements and all labor and materials incorporated into the Flood Plain
Improvements will be free from defects and that the Flood Plain Improvements
will conform with the requirements of the Plans and Specifications and all
applicable federal, state and local laws and regulations; and (J) if, within the
period ending one year after FPI Final Approval, any of the Flood Plain
Improvements are found to be not in accordance with the requirements of the
Plans and Specifications and all applicable federal, state and local laws and
regulations, correct them promptly after receipt of written notice from Seller
or Purchaser to do so.

 

 10 

 

 

(2)         Seller may assign the FPI Construction Contract to Purchaser; and

 

(c)          FPI Consultant Contract. Each FPI Consultant Contract shall provide
that:

 

(1)         Purchaser shall be named as (A) a third-party beneficiary of the FPI
Consultant Contract; (B) a reliance party under any report prepared by the FPI
Consultant with respect to the Flood Plain Improvements; (C) a beneficiary of
any certification given by the FPI Consultant under the FPI Consultant Contract
or otherwise with respect to the Flood Plain Improvements;

 

(2)         Purchaser shall have the right to use and rely on any surveys,
drawings, specifications, or other instruments of service prepared by any FPI
Consultant; and

 

(3)         Seller may assign the FPI Consultant Contract to Purchaser.

 

(d)          FPI Costs Estimate. No later than 10 days before the Closing for
the Phase I Property, Seller shall deliver to Purchaser an updated FPI
Construction Estimate and an updated FPI Administration Estimate. The sum of the
updated FPI Construction Estimate plus the updated FPI Administration Estimate
(the “FPI Costs Estimate”) shall not be less than the sum of the fixed lump sum
or guaranteed maximum price payable to the FPI Contractor under the FPI
Construction Contract, as executed by Seller and the FPI Contractor, plus all
amounts reasonably estimated to be paid to the FPI Consultants under the FPI
Consultant Agreements. The “FPI Escrow Amount” shall equal 115% of the FPI Costs
Estimate. At the Closing for the Phase I Property, Purchaser shall deposit a
portion of the Phase I Purchase Price equal to the FPI Escrow Amount with the
Escrow Agent to be held in the FPI Escrow Account and, upon deposit of the FPI
Escrow Amount together with the delivery of the balance of the Phase I Purchase
Price in accordance with this Agreement, Purchaser shall be deemed to have
satisfied its obligation to deliver Phase I Purchase Price in accordance with
this Agreement. Escrow Agent shall deposit the FPI Escrow Amount into an escrow
account to be held by Escrow Agent in accordance with the FPI Escrow Agreement
(the “FPI Escrow Account”). No later than 45 days after the Agreement Date,
Seller shall deliver to Purchaser for its approval a draft of the proposed form
of the FPI Escrow Agreement. The parties shall mutually and in good faith agree
on the form of the FPI Escrow Agreement prior to the end of the Due Diligence
Period.

 

(e)          Requirements for Closing for Phase I Property. Before the Closing
for the Phase I Property, Seller shall (i) obtain all FPI Permits; (ii) enter
into the FPI Construction Contract with the FPI Contractor and deliver to
Purchaser a copy of the fully-executed FPI Construction Contract; and (iii)
enter into an FPI Consultant Contract with each FPI Consultant and deliver to
Purchaser a copy of each fully-executed FPI Consultant Contract.

 

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2.7          Construction of Flood Plain Improvements and FPI Final Approval.

 

(a)          General Requirements. Seller, at its cost and expense, shall cause
the construction of the Flood Plain Improvements to begin within seven days
after the Closing for the Phase I Property and to be completed within 90 days
after the Closing for the Phase I Property (the “FPI Completion Date”). Seller
shall cause the construction of the Flood Plain Improvements to be performed in
accordance with the Plans and Specifications, the FPI Construction Contract, the
terms and conditions of the FPI Permits and all applicable federal, state and
local laws and regulations. Seller shall not amend, revise, issue any
modifications or change orders to or waive any conditions or requirements under
any of the Plans and Specifications, the FPI Permits, the FPI Construction
Contract or any FPI Consultant Contract without Purchaser’s prior written
consent, which consent shall not be unreasonably withheld and (provided
Purchaser includes with its request for consent a statement IN BOLDFACE TYPE AND
ALL CAPITAL LETTERS that Purchaser’s consent shall be deemed given if Purchaser
does not deliver written objections to Seller within five (5) business days
after Purchaser’s receipt of written request for consent) which shall be deemed
given if Purchaser fails to deliver its written objections to same within five
Business Days after receipt of a written request for consent, together with
copies of all documents that describe the modification or change order or the
condition or requirement to be waived. If the Flood Plain Improvements are not
completed in accordance with this Section 2.7(a) by the FPI Completion Date,
then, in addition to any other remedy Purchaser has under this Agreement, the
Outside Closing Date for the Phase II Property and the Outside Closing Date for
the Phase III Property shall be extended automatically by one day for each day
after the FPI Completion Date until the Flood Plain Improvements are completed
in accordance with this Section 2.7(a).

 

(b)          FPI Escrow Account. In accordance with the terms and conditions of
the FPI Escrow Agreement, Seller may withdraw funds from the FPI Escrow Account
for costs relating to the construction of the Flood Plain Improvements and
obtaining FPI Final Approval that are payable to the FPI Contractor in
accordance with the FPI Construction Contract or to each FPI Consultant in
accordance with its FPI Consultant Contract. Provided Seller complies with the
previous sentence, Escrow Agent shall disburse funds from the FPI Escrow
Agreement directly to Seller within two Business Days after Seller delivers
written request for such funds to Escrow Agent and Purchaser, with no
confirmation required from Purchaser. So long as the FPI Escrow Amount is funded
at the Closing for the Phase I Property, Seller’s obligation to construct the
Flood Plain Improvements and obtain FPI Final Approval at its cost and expense
shall not be conditioned on the amount or adequacy of funds available in the FPI
Escrow Account.

 

(c)          LOMR Request. Within 100 days after the Closing for the Phase I
Property, Seller shall prepare a formal request for the LOMR that complies with
all applicable FEMA requirements, includes all documents and approvals required
under applicable FEMA requirements and demonstrates satisfaction of all known
conditions, required to be satisfied by the requestor, for the issuance of the
LOMR (collectively, the “LOMR Request”).

 

(d)          FPI Final Approval. Seller shall have achieved FPI Final Approval
within 180 days after the Closing for the Phase I Property (the “FPI Final
Approval Date”). If FPI Final Approval does not occur by the FPI Final Approval
Date, then, in addition to any other remedy Purchaser has under this Agreement,
the Outside Closing Date for the Phase II Property and the Outside Closing Date
for the Phase III Property shall be extended automatically by one day for each
day after the FPI Final Approval Date until FPI Final Approval occurs.

 

(e)          Seller’s Obligations under Contracts. Seller shall perform all of
its obligations under the FPI Permits, the FPI Construction Contract, and each
FPI Consultant Agreement.

 

(f)          Seller’s Delivery of Documents. Within one Business Day after
Seller produces or receives each of the following items, Seller shall deliver,
or shall cause to be delivered, to Purchaser a copy of: (i) each sampling or
testing report prepared in connection with sampling and testing required under
the FPI Construction Contract; (ii) each inspection report created by the FPI
Consultants or received from any governmental agency with respect to the Flood
Plain Improvements; (iii) each payment request made by the FPI Contractor under
the FPI Construction Contract; (iv) evidence of each payment made and the amount
of each payment made to the FPI Contractor under the FPI Construction Contract;
(v) each lien waiver provided under the FPI Construction Contract; (vi) any
proposed change order to the FPI Construction Contract; (vii) each notice,
order, demand or written communication received from any governmental agency
with respect to the Flood Plain Improvements; and (viii) each certification
given by any FPI Consultant with respect to the Flood Plain Improvements or the
LOMR Request.

 

(g)          Liens. Within one Business Day after Seller receives any notice of
lien or lien against the Property in connection with the Flood Plain
Improvements, Seller shall give written notice, together with a copy, of the
notice or lien to Purchaser. Seller shall bond off or otherwise discharge any
lien filed against the Property within 45 days after receiving notice of the
lien.

 

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(h)          Seller’s Indemnification. To the fullest extent permitted by law,
Seller shall indemnify, reimburse, hold harmless, and defend Purchaser and its
lender, Purchaser’s members, partners, managers, project and/or development
manager, the Architect, Architect's consultants, and all of their agents,
employees, consultants, parent subsidiaries or affiliated companies, successors
and assigns from and against claims, damages, losses and expenses, including,
but not limited to, reasonable attorneys' fees, arising out of or resulting from
any personal injury or death related to the construction of the Flood Plain
Improvements, but only to the extent caused in whole or in part by negligent
acts or omissions of Seller, the FPI Contractor, any FPI Consultant, or any
subcontractor, material or equipment supplier, or anyone directly or indirectly
employed by any of them or anyone for whose acts they may be liable, regardless
of whether such claim, damage, loss or expense is caused in part by a party
indemnified hereunder. Such obligation shall not be construed to negate,
abridge, or reduce other rights or obligations of indemnity which would
otherwise exist as to a party or person described in this Section 2.7(h). Seller
shall indemnify, hold harmless (including reasonable attorneys’ fees and legal
expenses) and defend Purchaser and Purchaser's lenders, if any, from and against
any assertion of lien claims by the FPI Contractor, any FPI Consultant, or any
subcontractor, material or equipment supplier and against any assertion of
security interests by suppliers of goods or materials in connection with the
Flood Plain Improvements.

 

(i)          Intentionally Deleted.

 

(j)          FPI Collateral Assignment. Except as provided in this Section
2.7(j), Seller shall not assign or otherwise transfer or grant any security
interest in any of the FPI Permits, the FPI Construction Contract, each FPI
Consultant Agreement, or Seller’s interest in the FPI Escrow Agreement, the FPI
Escrow Account or the FPI Escrow Amount. At the Closing for the Phase I
Property, Seller shall execute and deliver to Escrow Agent an assignment (the
“FPI Collateral Assignment”), conditionally assigning to Purchaser the FPI
Permits, the FPI Construction Contract, each FPI Consultant Agreement, and
Seller’s interest in the FPI Escrow Agreement and the FPI Escrow Amount.
Purchaser shall deliver a proposed form of FPI Collateral Assignment to Seller
for its reasonable review and approval within 45 days after the Agreement Date
and the parties shall mutually and in good faith agree upon the form of the FPI
Collateral Assignment prior to the end of the Due Diligence Period. Escrow Agent
shall hold the FPI Collateral Assignment under the terms and conditions of the
FPI Escrow Agreement. If, after the Closing for the Phase I Property, Seller is
in default under any of its obligations regarding the construction and
completion of the Flood Plain Improvements, the LOMR Request or FPI Final
Approval, and Seller fails to cure the default within 30 days after Purchaser
gives Seller written notice of the default, Purchaser, in addition to any other
remedy Purchaser may have for the default, may give written notice to Seller and
Escrow Agent that Purchaser elects to accept the FPI Collateral Assignment. Upon
Purchaser’s delivery of such notice, Escrow Agent shall promptly deliver the FPI
Collateral Assignment to Purchaser and the FPI Collateral Assignment shall be
deemed effective.

 

(k)          Survival. The parties’ obligations under this Section 2.7 shall
survive the Closings.

 

2.8          Adverse Conditions. As a condition to Purchaser’s obligation to
close with respect to each Phase, there shall be no material change in any
condition of or affecting the respective Phase not caused by Purchaser or its
contractors, employees, affiliates or other related or similar parties, that has
occurred after the Due Diligence Period including without limitation (i) any
environmental contamination; (ii) access; (iii) the availability, adequacy or
cost of or for all utilities (including without limitation, water, sanitary
sewer, storm sewer, gas, electric, cable and any other utilities required to
serve or service the Property) that will be necessary to serve the Proposed
Project; or (iv) the imposition of any moratorium which would prohibit or delay
the commencement of construction. It shall also be a condition to Purchaser’s
obligation to close with respect to each Phase that there shall be no offsite
obligations required in connection with the development of the Proposed Project
and applicable water, sewer and impact fees charged by the applicable
governmental authorities shall not have increased over the levels assessed as of
the end of the Due Diligence Period.

 

ARTICLE 3. TITLE AND SURVEY REVIEW

 

3.1          Delivery of Title Commitment and Survey. Seller shall cause to be
prepared within seven Business Days after the Agreement Date a current,
effective commitment for title insurance for the Property (the “Title
Commitment”) issued by the Title Company, in the amount of the Purchase Price
with Purchaser as the proposed insured, and accompanied by true, complete, and
legible copies of all documents referred to in the Title Commitment. Purchaser
shall cause to be prepared and delivered to Seller and Title Company within 30
days after the Effective Date a current ALTA/ACSM survey of the Property (the
“Survey”) including a certification addressed to Purchaser, Seller and Title
Company.

 

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3.2          Title Review and Cure. During the Due Diligence Period, Purchaser
shall review title to the Property as disclosed by the Title Commitment and the
Survey. Seller shall cooperate with Purchaser in curing any objections Purchaser
may have to title to the Property. Seller shall have no obligation to cure title
objections except (a) liens or exceptions for delinquent property taxes and
assessments and related penalties, (b) deeds of trust and mortgages, (c)
mechanics’ liens, (d) other monetary liens, and (e) any exceptions or
encumbrances to title which are created by, through or under Seller after the
Agreement Date without the written consent of Purchaser, all of which shall be
removed from title to the applicable Phase at or prior to the Closing Date for
such Phase. Without limiting Seller’s obligations in the prior sentence or
elsewhere in this Agreement or Purchaser’s remedies under Section 8.1, Purchaser
may terminate this Agreement and receive a refund of the Earnest Money if the
Title Company revises the Title Commitment after the expiration of the Due
Diligence Period to add or modify exceptions or to delete or modify the
conditions to obtaining any endorsement requested by Purchaser during the Due
Diligence Period if such additions, modifications or deletions are not
acceptable to Purchaser in its reasonable discretion and are not removed by the
Closing Date for the applicable Phase. “Permitted Exceptions” means (i) the
specific exceptions (exceptions that are not part of the promulgated title
insurance form) in the Title Commitment that Purchaser has failed to object to
in writing as of the expiration of the Due Diligence Period and that Seller is
not required to remove as provided above, and (ii) real estate taxes not yet due
and payable. Subject to the preceding sentences of this Section 3.2, the failure
of Purchaser to deliver a Due Diligence Termination Notice to Seller prior to
the end of the Due Diligence Period shall be deemed Purchaser’s acceptance of
all specific exceptions in the most recent version of the Title Commitment.

 

3.3          Delivery of Title Policy at Closing. At the Closing for each Phase,
as a condition to Purchaser’s obligation to close, the Title Company shall
deliver to Purchaser an ALTA (or other form required by state law) Owner’s
Policy of Title Insurance (“Title Policy”) for the respective Phase issued by
the Title Company with ALTA General Exceptions 1 through 5 deleted (or
corresponding deletions or endorsements if the Property is located in a non-
ALTA state), containing the Purchaser’s Endorsements, dated the date and time of
the recording of the Deed for the respective Phase in the amount of the Purchase
Price for the respective Phase, insuring Purchaser as owner of good and
indefeasible fee simple title to the respective Phase, subject only to the
Permitted Exceptions applicable to the respective Phase. “Purchaser’s
Endorsements” means, to the extent such endorsements are available under the
laws of the state in which the Property is located: (a) owner’s comprehensive;
(b) access; (c) survey (accuracy of survey); (d) location (survey legal matches
title legal); (e) separate tax lot; (f) legal lot; (g) zoning 3.0; and (h) such
other endorsements as Purchaser may require based on its review of the Title
Commitment and Survey. Seller shall execute at Closing for each Phase an
affidavit on the Title Company’s standard form so that the Title Company can
delete or modify the standard printed exceptions as to parties in possession,
unrecorded liens, and similar matters and, if required to issue the Title Policy
at Closing for the respective Phase, the customary gap indemnity. The Title
Policy may be delivered after the Closing for the respective Phase if at the
Closing the Title Company issues a currently effective, duly-executed
“marked-up” Title Commitment and irrevocably commits in writing to issue the
Title Policy in the form of the “marked-up” Title Commitment promptly after the
Closing Date for the respective Phase.

 

3.4          Title and Survey Costs. The standard premium for the Title Policy,
including any search and examination fees, shall be paid by Seller. Purchaser
shall pay for any additional premium for any Purchaser’s Endorsements it
requires.

 

ARTICLE 4. OPERATIONS AND RISK OF LOSS

 

4.1          Performance under Contracts. During the pendency of this Agreement,
Seller shall perform its material obligations under agreements that affect the
Property.

 

4.2          New Contracts. During the pendency of this Agreement, Seller shall
not enter into any lease or contract that will be an obligation affecting the
Property after the Closing without Purchaser’s prior written consent.

 

4.3          Intentionally Deleted.

 

4.4          Seller’s Obligations. Other than the obligations of Seller
expressly assumed by Purchaser, Seller, subject to the terms and conditions of
this Agreement, covenants that it shall pay and discharge any and all
liabilities of each and every kind arising out of or by virtue of the conduct of
its business before and as of the Closing Date for each Phase on or related to
the respective Phase. The provisions of this Section 4.4 shall survive the
Closings.

 

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4.5          Condemnation. By notice to Seller given within 10 days after
Purchaser receives notice of proceedings in eminent domain that are
contemplated, threatened or instituted by any applicable governmental or other
authority having the power of eminent domain, and if necessary the next Closing
Date for a Phase shall be extended to give Purchaser the full 10-day period to
make such election, Purchaser may: (i) terminate this Agreement with respect to
any Phase for which Closing has not occurred and the Earnest Money (if the
Closing for the Phase I Property has not occurred), the Phase II Option Payment
(if the Closing for the Phase II Property has not occurred), and the Phase III
Option Payment (if the Closing for the Phase III Property has not occurred)
shall be immediately returned to Purchaser; or (ii) proceed under this
Agreement, in which event Seller shall, at the next Closing for a Phase, assign
to Purchaser its entire right, title and interest in and to any condemnation
award, and Purchaser shall have the sole right during the pendency of this
Agreement to negotiate and otherwise deal with the condemning authority with
respect to such eminent domain proceedings.

 

ARTICLE 5. CLOSING

 

5.1          Closing. The consummation of the transaction contemplated in this
Agreement for each Phase (each, a “Closing”) shall occur on the Closing Date for
the respective Phase at the offices of the Escrow Agent. Closing shall occur
through an escrow with the Escrow Agent. The balance of the Purchase Price for
the respective Phase, plus or minus prorations, shall be deposited into and held
by Escrow Agent in a closing escrow account with a bank satisfactory to
Purchaser and Seller. Upon satisfaction or completion of all Closing conditions
and deliveries for the respective Phase, the parties shall direct the Escrow
Agent to immediately record and deliver the Closing documents for the respective
Phase to the appropriate parties and make disbursements according to the closing
statements executed by Seller and Purchaser. With respect to each Phase, the
Escrow Agent and the Title Company shall agree in writing with Purchaser that
(a) recordation of the Deed for the respective Phase constitutes the Escrow
Agent’s representation that it is holding the Closing documents, Closing funds
and Closing statement for the respective Phase and is prepared and irrevocably
committed to disburse the Closing funds in accordance with the Closing statement
for the respective Phase and (b) upon the Escrow Agent’s release of funds to
Seller for the respective Phase, the Title Company shall be irrevocably
committed to issue the Title Policy for the respective Phase in accordance with
this Agreement.

 

5.2          Conditions to the Parties’ Obligations to Close.

 

(a)          In addition to all other conditions set forth in this Agreement,
the obligation of Seller, on the one hand, and Purchaser, on the other hand, to
consummate the transactions contemplated under this Agreement for each Phase
shall be conditioned on the following:

 

(1)         The other party’s representations and warranties contained in this
Agreement shall be true and correct as of the Agreement Date and the Closing
Date. For purposes of this Section 5.2(a)(1), if a representation is made to
knowledge, but the factual matter that is the subject of the representation is
false notwithstanding any lack of knowledge or notice to the party making the
representation, such event shall constitute a failure of this condition only,
and not a default by the party making such representation;

 

(2)         As of the Closing Date for the respective Phase, the other party
shall have performed its obligations under this Agreement and all deliveries to
be made at Closing have been tendered;

 

(3)         There shall exist no pending or threatened actions, suits,
arbitrations, claims, attachments, proceedings, assignments for the benefit of
creditors, insolvency, bankruptcy, reorganization or other proceedings, pending
or threatened against the other party or the Property that would materially and
adversely affect the other party’s ability to perform its obligations under this
Agreement; and

 

(4)         There shall exist no pending or threatened action, suit or
proceeding with respect to the other party before or by any court or
administrative agency which seeks to restrain or prohibit, or to obtain damages
or a discovery order with respect to, this Agreement or the consummation of the
transactions contemplated under this Agreement.

 

 15 

 

 

(b)          In addition to all other conditions set forth in this Agreement,
the obligation of Purchaser to consummate the transactions contemplated under
this Agreement for each Phase shall also be conditioned on the following:

 

(1)         There shall exist no actions, suits, arbitrations, claims,
attachments, proceedings, assignments for the benefit of creditors, insolvency,
bankruptcy, reorganization or other proceedings, pending or threatened against
the Property that would materially and adversely affect the Property, the
operation of the Property or Purchaser’s Proposed Project;

 

(2)         There shall exist no pending or threatened review or appeal of, and
there shall exist no right to review or appeal, the Development Approvals by any
governmental authority or person other than Purchaser;

 

(3)         There shall exist no pending or threatened moratorium on development
or other governmental or quasi-governmental action which could prohibit or delay
Purchaser’s development of the Proposed Project;

 

(4)         The availability of all utilities (including without limitation,
water, sanitary sewer, storm sewer, gas, electric, cable and any other
utilities) to serve or service the Proposed Project shall not have materially
changed since the expiration of the Due Diligence Period;

 

(5)         There shall exist no new special assessments, or any additional
amounts for special assessments currently assessed, that are payable with
respect to the Property other than any special assessments that existed as of
the expiration of the Due Diligence Period; and

 

(6)         Final Approval of the Development Approvals has occurred with
respect to all Development Approvals required for the respective Phase.

 

(c)          In addition to all other conditions set forth in this Agreement,
the obligation of Purchaser to consummate the transactions contemplated under
this Agreement for the Phase I Property shall also be conditioned on the
following:

 

(1)         Seller and the FPI Contractor shall have entered into the FPI
Construction Contract.

 

(2)         Seller and each FPI Consultant shall have entered into an FPI
Consultant Contract.

 

(3)         Purchaser shall have approved, and Seller shall have obtained
approval for, any Seller Subdivision required under Section 2.5(a), and there
shall exist no pending review or appeal of, and there shall exist no right to
review or appeal, any such Seller Subdivision by any governmental authority or
person.

 

(4)         Seller shall have obtained all FPI Permits.

 

(d)          In addition to all other conditions set forth in this Agreement,
the obligation of Purchaser to consummate the transactions contemplated under
this Agreement for each of the Phase II Property and the Phase III Property
shall also be conditioned on the following:

 

(1)         Purchaser shall have given the Phase II Closing Notice (in the case
of the Closing for the Phase II Property) or the Phase III Closing Notice (in
the case of the Closing for the Phase III Property).

 

(2)         Seller shall have completed the construction of, and there shall be
no uncured defects in, the Flood Plain Improvements.

 

 16 

 

 

(3)         Seller shall have obtained FPI Final Approval.

 

(4)         Purchaser shall have approved, and Seller shall have obtained
approval for, any Seller Subdivision required under Section 2.5(b), and there
shall exist no right to review or appeal, any such Seller Subdivision by any
governmental authority or person.

 

(e)          So long as a party is not in default under this Agreement, if any
condition to that party’s obligation to proceed with the Closing for the
respective Phase under this Agreement has not been satisfied as of the Closing
Date for the respective Phase, the party may, in its sole discretion, elect to
(i) terminate this Agreement by delivering written notice to the other party on
or before the Closing Date for the respective Phase, (ii) extend the Closing for
the respective Phase for a maximum of 30 days to allow for satisfaction of such
condition, or (iii) consummate this transaction notwithstanding the
non-satisfaction of such condition, in which event the party shall be deemed to
have waived any such condition. If a party elects to close, notwithstanding that
a condition to that party’s obligation to proceed with the Closing for the
respective Phase has not been satisfied, the other party shall have no liability
for breaches of representations and warranties of which the party electing to
close had actual knowledge at the Closing for the respective Phase.
Notwithstanding the foregoing, the failure of a condition due to the breach of a
party shall not relieve the breaching party from any liability it would
otherwise have under this Agreement.

 

5.3          Seller’s Deliveries in Escrow. On or prior to the Closing Date for
each Phase, Seller shall deliver in escrow to the Escrow Agent the following:

 

(a)          Deed. A special warranty deed in form provided for under the law of
Texas or otherwise in conformity with the custom in such jurisdiction and
mutually satisfactory to the parties, executed by Seller, and acknowledged,
conveying to Purchaser good and indefeasible fee simple title to the respective
Phase, subject only to the Permitted Exceptions (the “Deed”).

 

(b)          Assignment of Intangible Property. Such assignments and other
documents and certificates as Purchaser may reasonably require in order to fully
and completely transfer and assign to Purchaser all of Seller’s right, title,
and interest, in and to the Development Approvals, all documents and contracts
related to the Development Approvals, and any other permits, rights under
utility agreements and similar rights applicable to the Property.

 

(c)          Memorandum of Option. With respect to the Closing for the Phase I
Property only, a counterpart of the Memorandum, executed by Seller and
acknowledged.

 

(d)          FPI Escrow Agreement. With respect to the Closing for the Phase I
Property only, a counterpart of the FPI Escrow Agreement, executed by Seller.

 

(e)          FPI Collateral Assignment. With respect to the Closing for the
Phase I Property only, the FPI Collateral Assignment, executed by Seller.

 

(f)          Plat. If any plats or approvals required in connection with any
Seller Subdivision or the Development Approvals are to be recorded at or
immediately after the Closing, the final executed plat or approvals in form for
recording according to applicable law.

 

(g)          State Law Disclosures. Such disclosures and reports, required by
applicable state and local law in connection with the conveyance of real
property.

 

(h)          FIRPTA. A Foreign Investment in Real Property Tax Act (“FIRPTA”)
certificate of non-foreign status in the form attached to this Agreement as
Exhibit C and executed by Seller. If Seller fails to provide the FIRPTA
certification on the Closing Date, Purchaser may proceed with withholding
provisions as provided by law.

 

(i)          Certificate of Representations and Warranties. A certificate
executed by Seller, reaffirming and updating to the Closing Date the
representations and warranties given by Seller under Section 7.1.

 

 17 

 

 

(j)          CCRs. If the Phase is subject to a declaration of covenants,
conditions and restrictions or similar instrument (“CCRs”) governing or
affecting the use, operation, maintenance, management or improvement of such
Phase, estoppel certificates, in form and substance reasonably satisfactory to
Purchaser, from the declarant, association, committee, agent and/or other person
or entity having governing or approval rights under the CCRs.

 

(k)          Authority. Evidence of the existence, organization, and authority
of Seller and the authority of the person executing documents on behalf of
Seller reasonably satisfactory to Purchaser, the Escrow Agent, and the Title
Company.

 

(l)          Additional Documents. Any additional documents that Purchaser, the
Escrow Agent or the Title Company may reasonably require for the proper
consummation of the transaction contemplated by this Agreement for the
respective Phase.

 

5.4           Purchaser’s Deliveries in Escrow. On or prior to the Closing Date
for each Phase, Purchaser shall deliver in escrow to the Escrow Agent the
following:

 

(a)          Purchase Price. The Purchase Price for the respective Phase (with
respect to the Closing for the Phase I Property, the Phase I Purchase Price,
less the sum of the Earnest Money plus the FPI Escrow Amount), plus or minus
applicable prorations, deposited by Purchaser with the Escrow Agent in
immediate, same day federal funds wired for credit into the Escrow Agent’s
escrow account.

 

(b)          Memorandum of Option. With respect to the Closing for the Phase I
Property only, a counterpart of the Memorandum, executed by Purchaser and
acknowledged.

 

(c)          FPI Escrow Agreement. With respect to the Closing for the Phase I
Property only, a counterpart of the FPI Escrow Agreement, executed by Purchaser.

 

(d)          FPI Deposit. With respect to the Closing for the Phase I Property
only, the FPI Escrow Amount, as partial payment of the Phase I Purchase Price,
for deposit into the FPI Escrow Account.

 

(e)          Option Payments. Phase II Option Payment and Phase III Option
Payment.

 

(f)          State Law Disclosures. Such disclosures and reports required by
applicable state and local law in connection with the conveyance of real
property.

 

(g)          Additional Documents. Any additional documents that Seller, the
Escrow Agent or the Title Company may reasonably require for the proper
consummation of the transaction contemplated by this Agreement for the
respective Phase.

 

5.5           Closing Statements. At Closing for each Phase, Seller and
Purchaser shall deposit with the Escrow Agent executed closing statements for
the respective Phase consistent with this Agreement in form required by the
Escrow Agent. If Seller and Purchaser cannot agree on the closing statements to
be deposited as aforesaid because of a dispute over the prorations and
adjustments set forth in the closing statements, the Closing nevertheless shall
occur, and the amount in dispute shall be withheld from the Purchase Price and
placed in an escrow with the Escrow Agent, to be paid out upon the joint
direction of the parties or pursuant to court order upon resolution or other
final determination of the dispute.

 

5.6           Title Policy. The Title Company shall deliver to Purchaser the
Title Policy for the respective Phase pursuant to Section 3.3.

 

5.7           Possession. Seller shall deliver possession of each Phase to
Purchaser at the Closing for the respective Phase subject only to the Permitted
Exceptions applicable to the respective Phase.

 

5.8           Costs. Seller shall pay the cost of recording the Deed for the
respective Phase and any other documents to be recorded in connection with the
Closing for the respective Phase and all documentary, transfer, excise and
similar taxes and fees for the respective Phase. The Escrow Agent’s fee shall be
evenly divided between Purchaser and Seller.

 

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ARTICLE 6. PRORATIONS

 

6.1           Proration of Taxes and Assessments. At the Closing for each Phase,
Purchaser shall receive a credit for any accrued but unpaid general real estate
taxes and special assessments for the respective Phase (including without
limitation any special assessments imposed by private covenant, “Taxes”)
applicable to any period before the Closing Date for the respective Phase, even
if such Taxes are not yet due and payable. If the amount of any Taxes has not
been determined as of Closing for the respective Phase, such credit shall be
based on 110 % of the most recent ascertainable Taxes and shall be reprorated
upon issuance of the final tax bill. The provisions of this Section 6.1 shall
survive each Closing.

 

As of the Agreement Date, each Phase is taxed as a portion of the Property.
Seller shall pay when due all Taxes payable with respect to the Property (other
than with respect to any Phase conveyed to Purchaser). Seller and Purchaser
shall execute and deliver such documentation before and after Closing for each
Phase as may be necessary to cause the respective Phase to be assessed as a
separate parcel, which obligation shall survive the Closing for the respective
Phase.

 

If any portion of a Phase has been designated or valued as agricultural, open
space or other special category such that its sale or change of use would
trigger the imposition of any “rollback” or “catch up” tax, Seller shall be
responsible for any such taxes and interest on such taxes applicable to any
period prior to Closing for the respective Phase, subject, however, to the last
sentence of this paragraph. If the amount of Seller’s share of such taxes and
interest can be definitively determined at the Closing, then the amount of such
Seller obligation shall serve as a credit against the Purchase Price. If such
amount cannot be absolutely determined, then at the Closing, Seller shall
deposit into an escrow established by Seller and Purchaser 125% of the parties’
estimate of such obligation, or such greater amount as the Title Company may
require in order to issue the Title Policy without exception for such taxes (if
such exception can be deleted under applicable title insurance regulations). At
such time as the actual liability of Seller is determined, the funds retained
shall be applied to payment of such taxes and interest and any excess in such
escrow account shall be paid to Seller. Notwithstanding the above, if additional
funds are required to cover the rollback obligation, Purchaser shall be liable
for such excess amount.

 

6.2           Sales, Transfer, and Documentary Taxes. Seller shall pay all
sales, gross receipts, compensating, stamp, documentary, excise, transfer, deed
or similar taxes and fees imposed in connection with the transaction for each
Phase under applicable local or state law. The provisions of this Section 6.2
shall survive the Closing for the respective Phase.

 

6.3           Commissions. Seller and Purchaser represent and warrant each to
the other that they have not dealt with any real estate broker, sales person or
finder in connection with this transaction other than Broker. If the transaction
for a Phase is closed, Seller shall pay Broker in accordance with their separate
agreement. Broker is an independent contractor and is not authorized to make any
agreement or representation on behalf of either party. Except as expressly set
forth above, in the event of any claim for broker’s commissions, finder’s fees
or similar compensation in connection with the negotiation, execution or
consummation of this Agreement or the transactions contemplated under this
Agreement, each party shall indemnify and hold harmless the other party from and
against any such claim based upon any statement, representation or agreement of
the indemnifying party. The provisions of this Section 6.3 shall survive the
Closings or termination of this Agreement.

 

6.4           Other Expenses. Unless otherwise expressly agreed in writing
between Seller and Purchaser, no other expense related to the ownership or
operation of each Phase shall be charged to or paid or assumed by Purchaser,
whether allocable to any period before or after the Closing for the respective
Phase.

 

ARTICLE 7. REPRESENTATIONS AND WARRANTIES

 

7.1           Seller’s Representations and Warranties. As a material inducement
to Purchaser to execute this Agreement and consummate this transaction, Seller
represents and warrants to Purchaser that:

 

 19 

 

 

(a)          Authority. Seller is the sole owner of fee simple title to the
Property. Seller has been duly organized and is validly existing as a Texas
limited liability company, is in good standing in the state of its organization
and is qualified to do business, and is in good standing, in the state in which
the Property is located. Seller has the full right and authority and has
obtained any and all consents required to authorize Seller to enter into this
Agreement, consummate or cause to be consummated the sale of the Property and
make or cause to be made transfers and assignments contemplated in this
Agreement. The person(s) signing this Agreement on behalf of Seller are
authorized to do so. This Agreement has been, and the documents to be executed
by Seller pursuant to this Agreement will be, authorized and properly executed
and does and will constitute the valid and binding obligations of Seller,
enforceable against Seller in accordance with their terms.

 

(b)          Conflicts and Pending Actions or Proceedings. There is no agreement
to which Seller is a party or, to Seller’s knowledge, binding on Seller which is
in conflict with this Agreement. There is no action or proceeding pending or, to
Seller’s knowledge, threatened against or relating to the Property, which
challenges or impairs Seller’s ability to execute or perform its obligations
under this Agreement.

 

(c)          Agreements with Governmental Authorities/Restrictions. Except as
included in the Property Information delivered to Purchaser or as may be entered
into by Purchaser in connection with Purchaser’s obtaining the Development
Approvals, Seller has not entered into, and has no knowledge of, any agreement
with or application to any governmental authority with respect to any zoning
modification, variance, exception, platting or other matter. To Seller’s
knowledge, neither Seller nor the Property is in violation or non-compliance
with any restriction or covenant affecting the Property.

 

(d)          Condemnation. To Seller’s knowledge, no condemnation, eminent
domain or similar proceedings are pending or threatened with regard to the
Property.

 

(e)          Property Rights. Except as disclosed in the Property Information,
to Seller’s knowledge no person or entity holds any leasehold interest, easement
or any other right to use or occupy the Property.

 

(f)          Notice of Special Assessments. Seller has not received any notice
and has no knowledge of any pending or threatened liens, special assessments,
condemnations, impositions or increases in assessed valuations to be made
against the Property by any governmental authority.

 

(g)          Zoning. To Seller’s knowledge, the PD Land Area of the Property is
currently zoned Planned Development District (12-13) for Multi Family Uses, the
AG Land Area of the Property is currently zoned Agriculture District (AG) and
Seller has no knowledge of any pending or threatened zoning change, other than
actions to be taken by Purchaser in connection with securing the Development
Approvals.

 

(h)          Property Information. To Seller’s knowledge, the Property
Information contains all material documents, files, written information, books
and records in Seller’s possession or control and relating to the Property and
the Property Information is true, correct and complete in all material respects.

 

(i)          Environmental. Seller has no knowledge of any violation of
Environmental Laws (defined below) related to the Property or the presence or
release of Hazardous Materials (defined below) on or from the Property except as
disclosed in the Property Information. Seller has not manufactured, introduced,
released or discharged from or onto the Property any Hazardous Materials or any
toxic wastes, substances or materials (including, without limitation, asbestos),
and Seller has not used the Property or any part of the Property for the
generation, treatment, storage, handling or disposal of any Hazardous Materials,
in violation of any Environmental Laws. The term “Environmental Laws” includes
without limitation the Resource Conservation and Recovery Act and the
Comprehensive Environmental Response Compensation and Liability Act and other
federal laws governing the environment as in effect on the Agreement Date
together with their implementing regulations and guidelines as of the Agreement
Date, and all state, regional, county, municipal and other local laws,
regulations and ordinances that are equivalent or similar to the federal laws
recited above or that purport to regulate Hazardous Materials. The term
“Hazardous Materials” includes petroleum, including crude oil or any fraction
thereof, natural gas, natural gas liquids, liquefied natural gas, or synthetic
gas usable for fuel (or mixtures of natural gas or such synthetic gas), asbestos
and asbestos containing materials and any substance, material waste, pollutant
or contaminant listed or defined as hazardous or toxic under any Environmental
Law.

 

 20 

 

 

(j)          Withholding Obligation. Seller’s sale of the Property is not
subject to any federal, state or local withholding obligation of Purchaser under
the tax laws applicable to Seller or the Property.

 

(k)          ERISA. Seller is not (i) an “employee benefit plan” (within the
meaning of section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended (“ERISA”)) that is subject to the provisions of Title I of ERISA,
(ii) a “plan” that is subject to the prohibited transaction provisions of
section 4975 of the Internal Revenue Code of 1986 (the “Code”) or (iii) an
entity whose assets are treated as “plan assets” under ERISA by reason of an
employee benefit plan’s or plan’s investment in such entity.

 

(l)          Anti-Money Laundering Laws. To Seller’s actual knowledge, without
any duty of investigation, Seller: (i) is not under investigation by any
governmental authority for, or has been charged with, or convicted of, money
laundering, drug trafficking, terrorist-related activities, any crimes which in
the United States would be predicate crimes to money laundering, or any
violation of any Anti-Money Laundering Laws (defined below); (ii) has not been
assessed civil or criminal penalties under any Anti-Money Laundering Laws; or
(iii) has not had any of its funds seized or forfeited in any action under any
Anti Money Laundering Laws. The term “Anti-Money Laundering Laws” means all
applicable laws, regulations and sanctions, state and federal, criminal and
civil, that: (1) limit the use of and/or seek the forfeiture of proceeds from
illegal transactions; (2) limit commercial transactions with designated
countries or individuals believed to be terrorists, narcotics dealers or
otherwise engaged in activities contrary to the interests of the United States;
(3) require identification and documentation of the parties with whom a
financial institution conducts business; or (4) are designed to disrupt the flow
of funds to terrorist organizations.

 

As used in this Section 7.1, the term "to Seller's knowledge" or any other
reference to the knowledge of Seller shall mean and apply to the knowledge of
Tim Coltart ("Seller's Knowledge Individual"), without independent investigation
or inquiry, and not to any other person. The designation of the party making the
statements shall not be deemed to create personal liability for that person.

 

Except as expressly set forth in this Agreement and the documents executed and
delivered by Seller at the Closing (the "Closing Documents"), Seller shall not
have any liability to Purchaser, and Purchaser shall release Seller from any
liability for, concerning, or regarding the nature and condition of the
Property, including, without limitation, the suitability thereof for any
activity or use. Except as expressly provided in this Agreement and the Closing
Documents, Seller has not made, does not make, and expressly disclaims, any
warranties, representations, covenants or guarantees, express or implied, or
arising by operation of law, as to the merchantability, habitability, quantity,
quality, or environmental condition of the Property or its suitability or
fitness for any particular purpose or use. At each Closing, Purchaser agrees to
accept the applicable Phase in its then present condition on an "AS-IS,"
"WHERE-IS" basis, except as expressly set forth in this Agreement and the
Closing Documents. The provisions of this disclaimer and release shall expressly
survive each Closing.

 

7.2           Purchaser’s Representations and Warranties. As a material
inducement to Seller to execute this Agreement and consummate this transaction,
Purchaser represents and warrants to Seller that:

 

(a)          Organization and Authority. Purchaser has been duly organized and
is validly existing as a Delaware limited liability company and is in good
standing in the State of Delaware. Subject only to obtaining certain internal
approvals on or before the expiration of the Due Diligence Period, Purchaser has
the full right and authority and has obtained any and all consents required to
authorize Purchaser to enter into this Agreement, consummate or cause to be
consummated the purchase of the Property. This Agreement and all of the
documents to be delivered by Purchaser at the Closing have been and will be
authorized and properly executed and will constitute the valid and binding
obligations of Purchaser, enforceable in accordance with their terms.

 

(b)          Conflicts and Pending Action. There is no agreement to which
Purchaser is a party or to Purchaser’s knowledge binding on Purchaser which is
in conflict with this Agreement. There is no action or proceeding pending or to
Purchaser’s knowledge, threatened, against Purchaser which challenges or impairs
Purchaser’s ability to execute or perform its obligations under this Agreement.

 

(c)          ERISA. Purchaser is not (i) an “employee benefit plan” (within the
meaning of section 3(3) of ERISA) that is subject to the provisions of Title I
of ERISA, (ii) a “plan” that is subject to the prohibited transaction

provisions of section 4975 of the Code, or (iii) an entity whose assets are
treated as “plan assets” under ERISA by reason of an employee benefit plan’s or
plan’s investment in such entity.

 

 21 

 

 

(d)          Compliance with International Trade Control Laws and OFAC
Regulations. Purchaser (without reference to its constituent entities) is not
now nor shall it be at any time prior to or at the Closing a Person named in any
executive orders or lists published by OFAC as a Specially Designated National
and Blocked Person.

 

7.3           Survival of Representations and Warranties. The representations
and warranties set forth in this Article 7 are made as of the Agreement Date and
are remade as of the Closing Date for each Phase and shall not be deemed to be
merged into or waived by the instruments of Closing for the respective Phase,
but, with respect to each Phase, shall survive the Closing for the respective
Phase for a period of one year. Seller and Purchaser shall have the right to
bring an action on a breach of a representation or warranty in this Article 7
only if Seller or Purchaser, as the case may be, has given the other party
written notice of the circumstances giving rise to the alleged breach within
such one year period. Each party agrees to defend and indemnify the other
against any claim, liability, damage or expense asserted against or suffered by
such other party arising out of any such representation or warranty being
materially false or inaccurate. The parties agree that for the purposes of this
Section 7.3, a Seller representation or representations shall be deemed
“materially” false or inaccurate if the same results in damages which are
reasonably and in good faith estimated by Purchaser to be in excess of Fifty
Thousand and No/100 Dollars ($50,000.00), provided, however, that in no event
shall any (i) information which was disclosed to Purchaser or otherwise actually
known to Purchaser prior to the expiration of the Due Diligence Period, (ii)
changes permitted pursuant to the terms of this Agreement, or (iii) information
which discloses loss or damage to the Property occurring after the expiration of
the Due Diligence Period as a result of condemnation be deemed “material”
hereunder. Notwithstanding anything to the contrary contained herein, (i) in the
event Purchaser brings an action against Seller under this Section 7.3, Seller’s
liability to Purchaser shall be capped at $500,000.00, and (ii) Seller shall
have no liability to Purchaser for breach of any representations or warranties
contained in this Agreement except to the extent that the aggregate amount of
all such liability exceeds $50,000.00.

 

ARTICLE 8. DEFAULT AND REMEDIES

 

8.1           Seller’s Default. If the transaction for any Phase fails to close
as a result of Seller’s default, then Buyer, as its sole and exclusive remedy,
shall have the right to either (i) terminate this Agreement by written notice to
Seller and Title Company, in which event the Earnest Money (if the Closing for
the Phase I Property has not occurred), the Phase II Option Payment (if the
Closing for the Phase II Property has not occurred), and the Phase III Option
Payment (if the Closing for the Phase III Property has not occurred) shall be
returned to Purchaser, or (ii) bring an action against Seller for specific
performance; provided, however, if Purchaser is unable to bring an action
against Seller for specific performance because of Seller’s actions in breach of
this Agreement, then in such event Purchaser shall be entitled to sue Seller in
an action for Purchaser’s actual damages (excluding any punitive, exemplary and
consequential damages).

 

8.2           Purchaser’s Default. If the transaction for a Phase fails to close
due to the default of Purchaser, then Seller’s sole remedy in such event shall
be to terminate this Agreement and to retain the Earnest Money, the Extension
Payment(s) (if any), the Phase II Option Payment and the Phase III Option
Payment as liquidated damages, Seller waiving all other rights or remedies in
the event of such default by Purchaser. Purchaser and Seller have considered
carefully the loss to Seller occasioned by taking the Property off the market as
a consequence of the negotiation and execution of this Agreement, the expenses
of Seller incurred in connection with the preparation of this Agreement and
Seller’s performance under this Agreement, and the other damages, general and
special, which Purchaser and Seller realize and recognize Seller will sustain
but which Purchaser and Seller agree would be impracticable or extremely
difficult to calculate at this time if Purchaser so defaults. Based on all those
considerations, Purchaser and Seller agree that the Earnest Money (together with
interest on it), the Extension Payment(s) (if any), the Phase II Option Payment
and the Phase III Option Payment, represent a reasonable estimate of Seller’s
damages. Seller agrees to accept the Earnest Money, the Extension Payment(s) (if
any), the Phase II Option Payment and the Phase III Option Payment as Seller’s
total damages and relief under this Agreement if Purchaser defaults in its
obligations to close under this Agreement, Seller waiving all other rights and
remedies.

 

 22 

 

 

8.3           Notice of Default. Except for a party’s failure to close on the
Closing Date, and except as provided under Section 2.7(j), neither party shall
have the right to declare a default by the other party and terminate this
Agreement because of a failure by such other party to perform under the terms of
this Agreement unless the other party shall fail to cure such failure to perform
within five Business Days after its receipt of written notice of such failure to
perform.

 

8.4           Other Expenses. If this Agreement is terminated due to the default
of a party, then the defaulting party shall pay any fees due to the Escrow Agent
and any fees due to the Title Company for cancellation of the Title Commitment
for the respective Phase.

 

ARTICLE 9. EARNEST MONEY PROVISIONS

 

9.1           Investment and Use of Funds. The Escrow Agent shall invest the
Earnest Money in a government insured interest bearing account satisfactory to
Purchaser at an institution having assets of not less than $125,000,000, shall
not commingle the Earnest Money with any funds of the Escrow Agent or others,
and shall promptly provide Purchaser and Seller with confirmation of the
investments made. If the Closing for the Phase I Property occurs, the Escrow
Agent shall deliver the Earnest Money to, or upon the instructions of, Purchaser
on the Closing Date for the Phase I Property. Provided such supplemental escrow
instructions are not in conflict with this Agreement as it may be amended in
writing from time to time, Seller and Purchaser agree to execute such
supplemental escrow instructions as may be appropriate to enable Escrow Agent to
comply with the terms of this Agreement.

 

9.2           Termination Pursuant to Section 2.2 or 2.5. The Purchaser shall
notify the Escrow Agent of the date that the Due Diligence Period ends promptly
after such date is established under this Agreement, and Escrow Agent may rely
upon such notice. If Purchaser elects to terminate the Purchase Agreement
pursuant to Section 2.2 (or is deemed to have terminated this Agreement by
failing to deliver a Due Diligence Approval Notice), Escrow Agent shall pay the
entire Earnest Money to Purchaser one Business Day following receipt of the Due
Diligence Termination Notice (or if no Due Diligence Approval Notice is
delivered prior to the expiration of the Due Diligence Period, one Business Day
following the last day of the Due Diligence Period) from Purchaser (as long as
the current investment can be liquidated in one day) and this Agreement shall
then terminate. In such event, no notice to Escrow Agent from Seller shall be
required for the release of the Earnest Money to Purchaser by Escrow Agent. The
Earnest Money shall be released and delivered to Purchaser from Escrow Agent
upon Escrow Agent’s receipt of the Due Diligence Termination Notice (or if no
Due Diligence Approval Notice is delivered prior to the expiration of the Due
Diligence Period, one Business Day following the last day of the Due Diligence
Period) despite any objection or potential objection by Seller. Seller agrees it
shall have no right to bring any action against Escrow Agent which would have
the effect of delaying, preventing, or in any way interrupting Escrow Agent’s
delivery of the Earnest Money to Purchaser pursuant to this Section 9.2, any
remedy of Seller being against Purchaser, not Escrow Agent.

 

9.3           Other Terminations. Upon a termination of this Agreement other
than as described in Section 9.2, either party to this Agreement (the
“Terminating Party”) may give written notice to the Escrow Agent and the other
party (the “Non-Terminating Party”) of such termination and the reason for such
termination. Such request shall also constitute a request for the release of the
Earnest Money to the Terminating Party. The Non-Terminating Party shall then
have five Business Days in which to object in writing to the release of the
Earnest Money to the Terminating Party. If the Non-Terminating Party provides
such an objection, then the Escrow Agent shall retain the Earnest Money until it
receives written instructions executed by both Seller and Purchaser as to the
disposition and disbursement of the Earnest Money, or until ordered by final
court order, decree or judgment, which is not subject to appeal, to deliver the
Earnest Money to a particular party, in which event the Earnest Money shall be
delivered in accordance with such notice, instruction, order, decree or
judgment. For clarity, this Section 9.3 applies only to a termination of this
Agreement that is initiated by Purchaser or Seller after the expiration of the
Due Diligence Period.

 

9.4           Interpleader. Except as provided in Section 9.2 above, Seller and
Purchaser mutually agree that in the event of any controversy regarding the
Earnest Money, unless mutual written instructions are received by the Escrow
Agent directing the Earnest Money’s disposition, the Escrow Agent shall not take
any action, but instead shall await the disposition of any proceeding relating
to the Earnest Money or, at the Escrow Agent’s option, the Escrow Agent may
interplead all parties and deposit the Earnest Money with a court of competent
jurisdiction in which event the Escrow Agent may recover all of its court costs
and reasonable attorneys’ fees. Seller or Purchaser, whichever does not prevail
in any such interpleader action, shall be solely obligated to pay such costs and
fees of the Escrow Agent, as well as the reasonable attorneys’ fees of the
prevailing party in accordance with the other provisions of this Agreement.

 

 23 

 

 

9.5           Liability of Escrow Agent. The parties acknowledge that the Escrow
Agent is acting solely as a stakeholder at their request and for their
convenience, that the Escrow Agent shall not be deemed to be the agent of either
of the parties, and that the Escrow Agent shall not be liable to either of the
parties for any action or omission on its part taken or made in good faith, and
not in disregard of this Agreement, but shall be liable for its negligent acts
and for any loss, cost or expense incurred by Seller or Purchaser resulting from
the Escrow Agent’s mistake of law respecting the Escrow Agent’s scope or nature
of its duties. Seller and Purchaser shall jointly and severally indemnify and
hold the Escrow Agent harmless from and against all costs, claims and expenses,
including reasonable attorneys’ fees, incurred in connection with the
performance of the Escrow Agent’s duties under this Agreement, except with
respect to actions or omissions taken or made by the Escrow Agent in bad faith,
in disregard of this Agreement or involving negligence on the part of the Escrow
Agent.

 

9.6           Escrow Fee. Except as expressly provided in this Agreement to the
contrary, the escrow fee, if any, charged by the Escrow Agent for holding the
Earnest Money or conducting the Closing shall be shared equally by Seller and
Purchaser.

 

ARTICLE 10. MISCELLANEOUS

 

10.1         Parties Bound. Neither party may assign this Agreement without the
prior written consent of the other, and any such prohibited assignment shall be
void; provided that Purchaser may assign this Agreement without Seller’s consent
to an Affiliate (defined below) or in order to effect an Exchange pursuant to
Section 10.17. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the respective legal representatives, successors,
assigns, heirs, and devisees of the parties. For the purposes of this Section
10.1, (a) “Affiliate” means (i) an entity that directly or indirectly controls,
is controlled by or is under common control with the Purchaser or (ii) an entity
in which either of Purchaser or Neil T. Brown holds an economic interest; and
(b) “control” means the power to direct the management of such entity through
voting rights, ownership or contractual obligations.

 

10.2         Headings. The Article and Section headings of this Agreement are
for convenience only and in no way limit or enlarge the scope or meaning of the
language of this Agreement.

 

10.3         Invalidity and Waiver. If any portion of this Agreement is held to
be invalid or inoperative, then so far as is reasonable and possible the
remainder of this Agreement shall be deemed valid and operative, and, to the
greatest extent legally possible, effect shall be given to the intent manifested
by the portion held invalid or inoperative. The failure by either party to
enforce against the other party any term or provision of this Agreement shall
not be deemed to be a waiver of such party’s right to enforce against the other
party the same or any other such term or provision in the future.

 

10.4         Governing Law. This Agreement shall, in all respects, be governed,
construed, applied, and enforced in accordance with the laws of the state of
Texas.

 

10.5         Survival. The provisions of this Agreement that contemplate
performance after the Closing of any Phase and the obligations of the parties
not fully performed at the Closing of any Phase shall survive the Closing for
the respective Phase and shall not be deemed to be merged into or waived by the
instruments of Closing for the respective Phase.

 

10.6         No Third Party Beneficiary. This Agreement is not intended to give
or confer any benefits, rights, privileges, claims, actions or remedies to any
person or entity as a third party beneficiary, decree, or otherwise.

 

10.7         Entirety and Amendments. This Agreement embodies the entire
agreement between the parties and supersedes all prior agreements and
understandings relating to the Property. This Agreement may be amended or
supplemented only by an instrument in writing executed by the party against whom
enforcement is sought.

 

 24 

 

 

10.8         Time. Time is of the essence in the performance of this Agreement.

 

10.9         Intentionally Deleted.

 

10.10         Attorneys’ Fees. If either party employs attorneys to enforce any
of the provisions of this Agreement, the party against whom any final judgment
is entered agrees to pay the prevailing party all reasonable costs, charges and
expenses, including reasonable attorneys’ fees, expended or incurred by the
prevailing party in connection with the enforcement action. The provisions of
this Section 10.10 shall survive the Closing and any termination of this
Agreement.

 

10.11         Notices. All notices required or permitted under this Agreement
shall be in writing and shall be delivered to the parties at the addresses set
forth in Section 1.1. Any such notices shall be sent by (a) overnight delivery
using a nationally recognized overnight courier, in which case notice shall be
deemed delivered one Business Day after deposit with such courier; (b) personal
delivery, in which case notice shall be deemed delivered upon receipt; or (c)
electronic mail in a “PDF” format followed by one of the delivery methods
described in clauses (a) or (b) above, in which case notice shall be deemed
delivered upon transmission of such notice by electronic mail. A party’s address
may be changed by written notice to the other party; provided, however, that no
notice of a change of address shall be effective until actual receipt of such
notice. Copies of notices are for informational purposes only, and a failure to
give or receive copies of any notice shall not be deemed a failure to give
notice. Notices given by counsel to the Purchaser shall be deemed given by
Purchaser and notices given by counsel to the Seller shall be deemed given by
Seller.

 

10.12         Construction. The parties acknowledge that the parties and their
counsel have reviewed and revised this Agreement and agree that the normal rule
of construction – to the effect that any ambiguities are to be resolved against
the drafting party – shall not be employed in the interpretation of this
Agreement or any exhibits or amendments to this Agreement.

 

10.13         Calculation of Time Periods. Unless otherwise specified, in
computing any period of time described in this Agreement, the day of the act or
event after which the designated period of time begins to run is not to be
included and the last day of the period so computed is to be included, unless
the last day is not a Business Day, in which event the period shall run until
the end of the next day which is a Business Day. The last day of any period of
time described in this Agreement shall be deemed to end at 6:00 p.m. Dallas,
Texas, time.

 

10.14         Procedure for Indemnity. The following provisions govern actions
for indemnity under this Agreement. Promptly after receipt by an indemnitee of
notice of any claim for which the indemnitee is entitled to indemnification
under this Agreement, the indemnitee shall deliver to the indemnitor written
notice of the claim. The indemnitor shall have the right to participate in, and,
if the indemnitor agrees in writing that it will be responsible for any costs,
expenses, judgments, damages and losses incurred by the indemnitee with respect
to such claim, to assume the defense of such claim with counsel mutually
satisfactory to the indemnitor and the indemnitee. Notwithstanding the preceding
sentence, the indemnitee shall have the right to retain its own counsel, with
the fees and expenses to be paid by the indemnitor, if the indemnitee reasonably
believes that representation of the indemnitee by the counsel retained by the
indemnitor would be inappropriate due to actual or potential differing interests
between the indemnitee and any other party represented by such counsel in any
proceeding relating to the claim. The failure of the indemnitee to deliver
written notice to the indemnitor within a reasonable time after the indemnitee
receives notice of any such claim shall not relieve the indemnitor of any
liability to the indemnitee under the indemnity, unless and only if and to the
extent that the failure is prejudicial to the indemnitor’s ability to defend the
claim. The indemnitee’s failure to so deliver written notice to the indemnitor
shall not relieve the indemnitor of any liability that it may have to any
indemnitee other than the indemnitor’s indemnification obligation under this
Agreement. If an indemnitee settles a claim without the prior written consent of
the indemnitor, the indemnitor shall be released from liability with respect to
the claim unless the indemnitor has unreasonably withheld its consent to the
settlement. The provisions of this Section 10.14 shall survive the Closing and
any termination of this Agreement.

 

10.15         Further Assurances. In addition to the acts and deeds recited in
this Agreement and contemplated to be performed, executed and/or delivered by
the parties hereto, each party agrees to perform, execute and deliver, but
without any obligation to incur any additional liability or expense, on or after
the Closing any further deliveries and assurances as may be reasonably necessary
to consummate the transactions contemplated under this Agreement. The provisions
of this Section 10.15 shall survive the Closing.

 

 25 

 

 

10.16         Execution in Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and all
of such counterparts shall constitute one Agreement. To facilitate execution of
this Agreement, the parties may execute counterparts of the signature pages and
exchange them by electronic mail.

 

10.17         Section 1031 Exchange. Either party may consummate the purchase or
sale (as applicable) of the Property as part of an “Exchange” pursuant to § 1031
of the Internal Revenue Code of 1986, as amended (the “Code”), provided that:
(a) the Closing shall not be delayed or affected by reason of the Exchange; (b)
the consummation or accomplishment of an Exchange shall not be a condition
precedent or condition subsequent to the exchanging party’s obligations under
the Contract; (c) the exchanging party shall effect its Exchange through an
assignment of the Contract, or its rights under the Contract, to a qualified
intermediary; (d) the non-exchanging party shall not be required to take an
assignment of the purchase agreement for relinquished or replacement property or
to acquire or hold title to any real property for purposes of consummating the
exchanging party’s Exchange; (e) the exchanging party shall pay any additional
costs that the non-exchanging party would not otherwise have incurred but for
the exchanging party’s Exchange; (f) the non-exchanging party’s rights under the
Contract shall not be adversely affected or diminished in any manner in
connection with the exchanging party’s Exchange; and (g) the non- exchanging
party shall not be responsible for compliance, and does not warrant to the
exchanging party that the exchanging party’s Exchange in fact complies, with §
1031 of the Code.

 

 26 

 

 

SIGNATURE PAGE TO AGREEMENT OF

PURCHASE AND SALE

BY AND BETWEEN

RCM FIREWHEEL, LLC [Seller]

AND

ARCHCO RESIDENTIAL, LLC [Purchaser]

 

IN WITNESS WHEREOF, the parties to this Agreement have executed this Agreement
on the day and year set forth below.

 

SELLER:

 

RMC FIREWHEEL, LLC,

a Texas limited liability company

 

By: /s/ Tim Coltart   Date: 4/28/15  

 

Name: Tim Coltart      

 

Title: EVP      

 

PURCHASER:

 

ARCHCO RESIDENTIAL, LLC

a Delaware limited liability company

 

By: /s/ Neil T. Brown   Date: 4/29/15  

 

Name: Neil T. Brown      

 

Title: CEO      

 

Escrow Agent has executed this Agreement In order to confirm that the Escrow
Agent has received and shall hold the Earnest Money and the interest earned on
It, in escrow, and shall disburse the Earnest Money, and the interest earned on
it, pursuant to the provisions of Article 9.

 

ESCROW AGENT:

 

Old Republic National Title Insurance Company

 

By: /s/ David Lawrence   Date: May 6, 2015  

 

Name: David Lawrence      

 

Title: Escrow Officer/Sr. Closing Attorney      

 

 27 

 

 

AGREEMENT OF PURCHASE AND SALE

DOMAIN SITE, GARLAND, TEXAS

 

EXHIBITS

 

A – Legal Description of the Land       B – Land Areas Exhibit       C – Form of
Certificate of Non-Foreign Status

 

 28 

 

 

EXHIBIT A

 

LEGAL DESCRIPTION OF THE LAND

 

Being a portion of that tract of land situated in Dallas County, Texas, out of
the DANIEL CRIST SURVEY, ABSTRACT 226, and being part of that called 95 acres
(First Tract), 19.8 acres (Second Tract), and 68.73 acres (Fourth Tract)
described in a deed to Elizabeth H. Wilkins as recorded in Volume 93115, Page
592 of the Deed Records of Dallas County, Texas, and being a portion of that
tract of land described in a deed to W.T. Limerick as recorded in Volume 2121,
Page 126 of the Deed Records of Dallas County, Texas, and being further
described as follows:

 

BEGINNING at a 1 inch iron rod found at the intersection of the Southwest line
of Bunker Hill Road with the Northwest line of Old Miles Road;

 

THENCE with the Westerly line of said Old Miles Road as follows:

 

SOUTH 46°11'57” WEST, a distance of 276.09 feet to a 5/8 inch steel rod found
with plastic cap stamped “Boundary Solutions”;

 

SOUTH 42°12'35” WEST, a distance of 385.91 feet to a 5/8 inch steel rod found
with plastic cap stamped “Boundary Solutions” at the beginning of a curve to the
left having a central angle of 18°57'47”, a radius of 530.00 feet and a chord
bearing and distance of SOUTH 34°50'33” WEST, 174.61 feet;

 

Southwesterly with said curve to the left an arc distance of 175.41feet to a
TX-DOT right-of-way mark with aluminum cap found for a corner of this tract;

 

THENCE SOUTH 79°44'25” WEST, leaving the Westerly line of the above mentioned
Old Miles Road, a distance of 445.23 feet to a 1/2” iron rod with plastic cap
stamped “DAA” set for a corner of this tract in the new North Line of President
George W. Bush Turnpike;

 

CONTINUING with said North Line of President George W. Bush Turnpike the follow
courses and distances:

 

NORTH 10°15'36” WEST, a distance of 15.00 feet to a 1/2” iron rod with plastic
cap stamped “DAA” set for a corner of this tract, in said North Line;

 

SOUTH 79°44'14” WEST, a distance of 590.00 feet to a 1/2” iron rod with plastic
cap stamped “DAA” set for a corner of this tract in said North Line;

 

SOUTH 10°15'47” EAST, a distance of 15.00 feet to a 1/2” iron rod with plastic
cap stamped “DAA” set for a corner of this tract in said North Line;

 

SOUTH 79°43'52” WEST, a distance of 213.62 feet to a 1/2” iron rod with plastic
cap stamped “DAA” set for a corner of this tract in said North Line and being in
the Easterly line of that tract of land conveyed to Carol Swanzy and Charlotte
Householter, according to the document filed of record in Volume 2004190, Page
14250 of the Deed Records of Dallas County, Texas;

 

 A-1 

 

 

THENCE NORTH 43°18'50” EAST, with said Easterly line, a distance of 279.94 feet
to a 5/8 inch steel rod with plastic cap stamped “Boundary Solutions” found at
the Northeast corner of said Swanzy and Householter tract for a corner of this
tract;

 

THENCE NORTH 32°11'10” WEST, a distance of 148.78 feet to a point in a branch at
the Northwest corner of said Swanzy and Householter tract for a corner of this
tract;

 

THENCE SOUTH 43°18'11” WEST, with the Westerly line of said Swanzy and
Householter tract, a distance of 486.11feet to a 1/2” iron rod with plastic cap
stamped “DAA” set for a corner of this tract in the North Line of the above
mentioned President George W. Bush Turnpike;

 

THENCE SOUTH 80°03'57” WEST, leaving said Westerly line, a distance of 136.53
feet to a 1/2” iron rod with plastic cap stamped “DAA” set for a corner of this
tract in the new North Line of President George W. Bush Turnpike;

 

CONTINUING with said North Line of President George W. Bush Turnpike the follow
courses and distances:

 

NORTH 10°29'58” EAST, a distance of 24.96 feet to a 1/2” iron rod with plastic
cap stamped “DAA” set for a corner of this tract in said North Line;

 

SOUTH 80°02'03” WEST, a distance of 375.48 feet to a 1/2” iron rod with plastic
cap stamped “DAA” set for a corner of this tract in said North Line and being in
the Easterly line of that tract of land conveyed to the City of Garland
according to the document filed of record in Volume 93012, Page 4894, Deed
Records of Dallas County, Texas;

 

NORTH 39°48'17” WEST, passing at a distance of 3.91 feet, the Northerly corner
of said City of Garland tract, same being the most Easterly corner of that tract
of land conveyed to L&S Liquidating Trust, according to the document filed of
record in Volume 95136, Page 5446, Deed Records of Dallas County, Texas, and
continuing for a total distance of 9.88 feet to a 1/2” iron rod with plastic cap
stamped “DAA” set for a corner of this tract and said L&S Liquidating tract;

 

THENCE with the Northern Lines of said L&S Liquidating tract the following
courses and distance;

 

NORTH 78°48'17” WEST, a distance of 65.00 feet to a 1/2” iron rod with plastic
cap stamped “DAA” set for a corner of this tract in said Northern Line;

 

SOUTH 57°56'43” WEST, a distance of 86.14 feet to a 1/2” iron rod with plastic
cap stamped “DAA” set for a corner of this tract in the North Line of the above
mentioned President George W. Bush Turnpike, also being the most Westerly corner
of said L&S Liquidating tract;

 

THENCE SOUTH 80°10'46” WEST, with said North Line, a distance of 164.57 feet to
a point in the center of old Rowlett Creek for a corner of this tract;

 

THENCE with the meanderings of said creek the following courses and distances;

 

 A-2 

 

 

NORTH 25°15'38” WEST, a distance of 180.96 feet to a point for a corner;

 

NORTH 87°31'07” WEST, a distance of 174.06 feet to a point for a corner;

 

NORTH 38°44'03” WEST, a distance of 185.05 feet to a point for a corner;

 

NORTH 22°26'46” WEST, a distance of 346.39 feet to a point for a corner;

 

SOUTH 83°14'16” WEST, a distance of 124.63 feet to a point for a corner;

 

SOUTH 89°20'08” WEST, a distance of 248.25 feet to a point for a corner;

 

NORTH 84°12'20” WEST, a distance of 202.88 feet to a point for a corner;

 

NORTH 40°33'27” WEST, a distance of 134.35 feet to a point for a corner in the
East Line of that tract of land conveyed to JAMES DANIEL LAMBERT, SR. and
SHIRLEY JOY LAMBERT, according to the document filed of record in VOLUME 92240,
PAGE 3818 and VOLUME 92240, PAGE 3821, Deed Records of Dallas County Texas, from
said point a 5/8” iron rod found for reference bears NORTH 44°02'59” EAST, a
distance of 91.49 feet;

 

THENCE NORTH 44°02'59” EAST, passing through said 5/8” iron rod found for
reference, a distance of 959.87 feet to a 1/2” iron rod found at the most
Easterly corner of said Lambert tract, same being the Southeasterly corner of
that tract of land conveyed to NORBERTO GUILLEN according to the document filed
of record in VOLUME 2002058, PAGE 7057, Deed Records of Dallas County, Texas;

 

THENCE NORTH 43°58'32” EAST, with the Easterly line of said Guillen tract, a
distance of 1944.48feet to a 1/2” iron rod with plastic cap stamped “DAA” set in
the South Line of the above mentioned Bunker Hill Road for the Northwest corner
of this tract;

 

THENCE with the South Line of said road the following courses and distances:

 

SOUTH 45°45'07” EAST, a distance of 1482.02 feet to a 1/2” iron rod with plastic
cap stamped “DAA” set for a corner of this tract at the beginning of a curve to
the left having a radius of 845.00 feet, a central angle of 10°50'07” and a
chord bearing and distance of SOUTH 51°10'10” EAST, 159.56 feet;

 

With said curve to the left an arc distance of 159.80 feet to a1/2” iron rod
with plastic cap stamped “DAA” set for a corner of this tract;

 

SOUTH 56°35'13” EAST, a distance of 52.21 feet to a 1/2” iron rod with plastic
cap stamped “DAA” set for a corner of this tract at the beginning of a curve to
the right having a radius of 755.00 feet, a central angle of 10°31'18” and a
chord bearing and distance of SOUTH 51°19'34” EAST, 138.45 feet;

 

With said curve to the right an arc distance of 138.64 feet to a1/2” iron rod
with plastic cap stamped “DAA” set for a corner of this tract;

 

 A-3 

 

 

SOUTH 46°03'56” EAST, a distance of 333.56 feet to a 1/2” iron rod with plastic
cap stamped “DAA” set for a corner of this tract at the beginning of a curve to
the left having a radius of 845.00 feet, a central angle of 01°55'43” and a
chord bearing and distance of SOUTH 47°01'46” EAST, 28.44 feet;

 

With said curve to the left an arc distance of 28.44 feet to a1/2” iron rod with
plastic cap stamped “DAA” set for a corner of this tract;

 

SOUTH 45°57'50” EAST, a distance of 496.60 feet to the POINT OF BEGINNING and
containing 135.89 acres of land, more or less.

 

 A-4 

 

 

EXHIBIT B

 

LAND AREAS EXHIBIT

 

[tex10-287_34.jpg] 

 

 B-1 

 

 

 [tex10-287_35.jpg]

 

 B-2 

 

 

EXHIBIT C

 

FORM OF CERTIFICATE OF NON-FOREIGN STATUS

 

Section 1445 of the Internal Revenue Code of 1986, as amended (“Code”), provides
that a transferee (buyer) of a

U.S. real property interest must withhold tax if the transferor (seller) is a
foreign person.

 

To inform                            ,
a                            (“Transferee”), that withholding of tax under
section 1445 of the Code is not required upon disposition of certain real
property to the Transferee by                            _,
a                            (“Transferor”), the undersigned hereby warrants,
represents and certifies the following on behalf of Transferor:

 

1.          The undersigned is the duly and
acting                            [Title of Officer executing Certificate] of
Transferor.

 

2.          Transferor is not a foreign corporation, foreign partnership,
foreign trust, or foreign estate (as those terms are defined in the Internal
Revenue Code and Income Tax Regulations), but rather is an entity formed under
the laws of one of the United States.

 

3.          Transferor is not a disregarded entity as defined in section
1.1445-2(b)(2)(iii) of the Code;

 

4.          Transferor’s U.S. employer identification number
is                            _.

 

5.          Transferor’s office address is                            .

 

6.          Transferor understands that this certification may be disclosed to
the Internal Revenue Service by the transferee and that any false statement
contained in this certificate could be punished by fine, imprisonment, or both.

 

Under penalty of perjury the undersigned declares that the undersigned has
examined this certification and to the best of its knowledge and belief it is
true, correct, and complete.

 

TRANSFEROR:

 

 

 

By:     Date:           Name:               Title:      

 

 C-1