EX-10.9 PURCHASE AGREEMENT



 





Exhibit 10.9




CONTRACT OF SALE




44.385 ACRES, LTD.




and




MASON MSG, LTD.




collectively, as “Seller”




with




SERIES D, LLC




as “Purchaser”




PROPERTY:




Academy Distribution Center and Warehouse, Katy, Texas





 









 








Table of Contents




	 	 	 	 	 	 	 
	ARTICLE	 	TITLE	 	PAGE	 
	1.	 	Sale of Parcel and Acceptable Title
	 	 	1	 
	2.	 	Purchase Price
	 	 	2	 
	3.	 	Closing Due Diligence, Net Lease
	 	 	3	 
	4.	 	Representations and Warranties of Seller
	 	 	7	 
	5.	 	Representations and Warranties of Academy
	 	 	10	 
	6.	 	Representations and Warranties of Purchaser
	 	 	14	 
	7.	 	Covenants of Academy; Indemnity for Inspections and Repairs
	 	 	16	 
	8.	 	Destruction, Damage or Condemnation
	 	 	16	 
	9.	 	Conditions Precedent
	 	 	17	 
	10.	 	Seller’s and Academy’s Closing Obligations
	 	 	18	 
	11.	 	Purchaser’s Closing Obligations
	 	 	21	 
	12.	 	Apportionments and Other Payments
	 	 	22	 
	13.	 	Termination and Remedies
	 	 	23	 
	14.	 	Broker
	 	 	23	 
	15.	 	Notices
	 	 	24	 
	16.	 	Miscellaneous
	 	 	24	 
	 	 	 
	 	 	 	 
	EXHIBITS	 	 
	 	 	 	 
	 	 	 
	 	 	 	 
	1-A – Description of 44+ Acres Land	 	 	 	 
	1-B – Description of Mason Land	 	 	 	 
	2 – Lease	 	 	 	 
	3 – SEC Filing Letter	 	 	 	 






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     THIS CONTRACT OF SALE (this “Contract”) dated as of December ___, 2006
between 44.385 ACRES, LTD., a Texas limited partnership (“44+ Acres”) and MASON MSG, LTD.,
a Texas limited partnership (“Mason,” together with 44+ Acres, collectively,
“Seller”), each having an office at 1800 North Mason Road, Katy, Texas 77449; SERIES D,
LLC, an Arizona limited liability company, having an office at c/o Cole Companies, 2555 E.
Camelback Road, Suite 400, Phoenix, AZ 85016, and its permitted assigns
(“Purchaser”); and ACADEMY, LTD., a Texas limited partnership having an office at 1800
North Mason Road, Katy, Texas 77449 (“Academy” or “Lessee”).



     Seller, Purchaser and Lessee hereby covenant and agree as follows:



ARTICLE 1. Sale of Parcel and Acceptable Title.




     Section 1.01 Each Seller, as to its interest only, shall sell to Purchaser, and
Purchaser shall purchase from Seller, at the price and upon the terms and conditions set forth in
this Contract: (i) the approximately 44.385 acre tract of real property listed and described on
Exhibit 1-A owned by 44+ Acres (the “44+ Acres Land”) attached hereto and made a
part hereof; (ii) the tracts of real property containing approximately 49.3616 acres listed and
described on Exhibit 1-B owned by Mason (the “Mason Land,” together with the 44+
Acres Land, collectively, the “Land”) attached hereto and made a part hereof; (iii) the
buildings and Seller’s interest in all improvements situated on the Land (collectively, the
“Buildings”); (iv) all right, title and interest of Seller, if any, in and to the land
lying in the bed of any street or highway in front of or adjoining the Land to the center line
thereof and to any unpaid award for any taking of any portion of the Land or Buildings by
condemnation, or any damage to the Land or Buildings by reason of a change of grade of any street
or highway; (v) all the estate and rights of Seller in and to the Land, the Buildings, and all
appurtenances thereto; (vi) all right, title and interest of Seller, if any, in and to the fixtures
and equipment attached to the Land and/or the Buildings, excluding, however, trade fixtures used in
the operation of the business conducted at the property (the “Personal Property”); and
(vii) all of Seller’s interest, to the extent transferable, in all permits, licenses, warranties,
contracts and intangibles with respect to the
construction, operation, maintenance or repair of the Buildings and other improvements on the
Land



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(collectively, the “Permits”). The Land, Buildings and other interests being sold and
purchased as provided in this Section 1.01 are referred to herein collectively as the
“Parcel.”



     Section 1.02 Seller shall convey and Purchaser shall accept fee simple title to the Parcel in
accordance with the terms of this Contract, free and clear of all liens, claims, easements, and
encumbrances whatsoever except for the Permitted Exceptions (hereinafter defined). Academy shall
convey and Purchaser shall accept all of Academy’s interest in the leasehold improvements
constructed and installed by Academy on the Land (“Academy Leasehold Improvements”), as
further described in Exhibit 4 attached hereto.



     Section 1.03 Each Seller and Purchaser acknowledge that 44+ Acres and Mason, acting
collectively as Seller, have elected to enter into a single contract for the sale of the 44+ Acres
Land and the Mason Land as a matter of convenience to Seller and Purchaser, and, accordingly,
Seller and Purchaser agree that, notwithstanding anything in this Contract to the contrary, the
terms and provisions of this Contract shall apply to and be binding on each Seller only with
respect to the property actually owned by such Seller that is subject to this Contract as indicated
on Exhibit 1-A and Exhibit 1-B. Notwithstanding the foregoing, in the event that either 44+ Acres
or Mason breaches or defaults in its obligations under this Contract, makes a material
misrepresentation under this Contract or fails to satisfy any closing conditions applicable to it,
Purchaser shall not be obligated to purchase any portion of the Land.



ARTICLE 2. Purchase Price.




     Section 2.01 The purchase price (“Purchase Price”) to be paid by Purchaser to
Seller for the Parcel is ONE HUNDRED TWO MILLION and No/100 Dollars ($102,000,000.00), payable as
follows:



          (a) Five Hundred Thousand and No/100 Dollars ($500,000.00) by immediately available federal
funds transferred to the escrow account of the Title Company (sometimes hereinafter referred to
herein as the “Escrow Agent”), within three (3) business days after the full execution and
delivery of this Contract (the “First Downpayment”).




          (b) One Million, Five Hundred Thousand and No/100 Dollars ($1,500,000.00) by immediately
available federal funds transferred to the escrow account of the Escrow Agent, within
 

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three (3) business days after the full execution and delivery of this Contract (the
“Second Downpayment”).




          The First Downpayment, the Second Downpayment and, if deposited, the Extension Downpayment (as
hereinafter defined) are referred to in this Contract as the “Downpayment”. Escrow Agent
shall hold and disburse the Downpayment and interest earned thereon, in accordance with the
standard escrow provisions of the Escrow Agent, and




          (c) Balance of the Purchase Price (i.e., Purchase Price less Downpayment and interest earned
thereon) for the Parcel at the Closing by immediately available federal funds transferred to such
account in such bank as Seller shall designate.




     Section 2.02 During the Due Diligence Period (as hereinafter defined), Seller and Purchaser
shall use reasonable efforts to agree on the proper allocations of the Purchase Price, but failure
to reach such agreement shall not result in a default under or termination of this Contract.



ARTICLE 3. Closing; Due Diligence; Net Lease.



     Section 3.01 Except as otherwise provided in this Contract, the closing of title pursuant to
this Contract (the “Closing”) shall take place no later than January 16, 2007 (the
“Closing Date”). The time and place of closing shall be 10:00 a.m. at the offices of
LandAmerica Financial Services/Lawyers Title Insurance Corporation, Phoenix National Division
(“Title Company”), or such other location as the parties may agree upon or, at the option
of either Purchaser or Seller, in escrow through the Title Company. Purchaser acknowledges that
Title Company shall use Veritas Title Partners, L.P. as its local agent.



     Notwithstanding the foregoing, Purchaser shall have the right to extend the Closing Date to no
later than January 26, 2007 by delivering written notice to Seller prior to January 10, 2007 and by
depositing an additional earnest money deposit of Five Hundred Thousand and no/100 Dollars
($500,000.00) (the “Extension Downpayment”) with Title Company.



     Section 3.02 (a) Purchaser shall have from the date of the execution of this Contract until
January 2, 2007 (the “Due Diligence Period”) to conduct a due diligence review of the
Parcel (including, without limitation, the physical condition of the Parcel and the state of title
to the Parcel) and to secure approval of any financing Purchaser may require or desire in
connection with its acquisition of the Parcel (including, without limitation, such lender’s
approval of the form and substance of the Lease, as defined in Section 3.03 below). During the Due
Diligence Period, Seller



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and Academy will reasonably cooperate with Purchaser to have any existing environmental
reports and studies updated and certified to Purchaser and its lender, if any, at Purchaser’s sole
cost and expense. After such examination and inspection, if for any reason Purchaser decides to
withdraw from this transaction, Purchaser shall send notification of its withdrawal to Seller and
Lessee. If Purchaser notifies Seller and Lessee of its withdrawal, neither party under this
Contract shall have any obligation to the other and the Downpayment, together with accrued
interest, shall be remitted by Escrow Agent as follows:




The Second Downpayment, together with accrued interest thereon, shall be remitted to
Purchaser; and




The First Downpayment, together with accrued interest thereon, shall be remitted to Seller,
except that, if any third party reports obtained by Purchaser during the Due Diligence
Period (including any updates obtained by Purchaser to any of the existing third party
reports provided to Purchaser by Seller as referenced in Section 3.02(d) hereof) reveal
information about the Parcel that is adversely different in any material respect from the
information about the Parcel contained in the documents and other items referenced in
Section 3.02(d) hereof, then the First Downpayment, together with accrued interest thereon
(less the Independent Consideration, as hereinafter defined), shall be remitted to
Purchaser.



     Time is of the essence with respect to Purchaser’s withdrawal option. Purchaser shall not
have the right to withdraw from this transaction, or to alter or modify the terms, provisions or
conditions of this Contract or the form of the Lease, after the expiration of the Due Diligence
Period, and any such notice given after the expiration of the Due Diligence Period shall have no
force and effect; provided that the foregoing shall not prevent Purchaser from terminating this
Contract pursuant to Section 13.01. Seller shall allow Purchaser and/or Purchaser’s
representatives full access to the Parcel and to Seller’s books and records for the purposes of
inspection of, including, but not limited to, sales reports and environmental reports in the
possession of Seller. The “Independent Consideration” shall be the sum of $100.00 from the
First Downpayment which sum shall be retained by Seller in any event hereunder as consideration for
Seller’s grant of the “Due Diligence Period” option to Purchaser.



          (b) If Purchaser notifies Seller and Lessee of its withdrawal as set forth in Section 3.02(a)
above or if this Contract is terminated for any other reason, any and all records and other
information and copies of work sheets and other documents and materials obtained by

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Purchaser, including, without limitation, documents and/or materials obtained by Purchaser
from third parties, shall be delivered to Seller and Purchaser shall not retain any copy or
reproduction of any such written document or information, and all of such information shall
continue to be held in confidence by Purchaser as set forth in Section 3.02(c) below.




          (c) Purchaser agrees that Purchaser and Purchaser’s agents and representatives shall hold the
terms of this Contract and all information obtained with respect to the Parcel or Academy in
confidence and shall not disclose its content to others, except to Purchaser’s principals,
advisors, investors, consultants and lender and those parties approved by Seller and Academy or as
may be required by law, subpoena or other legal process. Notwithstanding any provision of this
Contract, the provisions of this Section 3.02(c) and Section 3.02(b) above shall survive any
termination of this Contract and the limitations on Seller’s remedies under Section 13.02 shall not
in any way limit Seller’s or Academy’s enforcement of the provisions of this Section 3.02(c) or
Section 3.02(b) above.




          (d) Prior to the execution of this Contract, Academy has provided to Purchaser (i) copies of
any and all documents and instruments affecting the Parcel in Academy’s or Seller’s possession,
including, but not limited to, site plans, surveys, soil and substrata studies, environmental site
assessments, architectural renderings, plans and specifications, engineering plans and studies,
landscape plans, and other plans, diagrams, or studies of any kind, if any, plus all other related
items, if any, relating to the Parcel; (ii) a title commitment for the issuance of the Owner Title
Policy described in Section 10.02 below, together with copies of all documents referenced therein
(the “Title Commitment”); and (iii) a copy of Seller’s existing survey of the Land,
Building and the appurtenances thereto of the Parcel (the “Existing Survey”).




          (e) Purchaser shall have until December 12, 2006 (the “Title Review Period”) to
examine the Title Commitment and the Existing Survey (collectively the “Title Materials”)
and to object in writing to any matters reflected thereby (the “Objections”). If an update
or endorsement to the Title Commitment delivered to Purchaser or an updated or revised survey for
the Parcel (each, a “Title/Survey Update”) discloses a title or survey matter that was not
disclosed in the Title Materials, the Existing Survey or in a previous Title/Survey Update,
Purchaser may deliver to Seller, within four (4) business days following Purchaser’s receipt of the
Title/Survey Update (“Title Update Review Period”) a written Objection to such defect first
disclosed on the Title/Survey

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Update accompanied by a copy of the Title/Survey Update. Purchaser shall be deemed to have agreed to
accept title subject to all matters reflected in the Title Commitment and any Title/Survey Update
and to the state of facts shown on the Existing Survey, other than Objections that have been timely
given and provided that, in no event shall Purchaser be deemed to have agreed to accept title
subject to (i) monetary liens, encumbrances or security interests against Seller and/or the Parcel,
(ii) encumbrances that have been voluntarily placed against the Parcel by Seller or Academy after
the date of the Title Commitment without Purchaser’s prior written consent and that will not
otherwise be satisfied on or before the Closing, (iii) exceptions for any repurchase options of
record with respect to the Parcel or any portion thereof, (iv) exceptions for any leases or other
occupancy agreements affecting the Parcel or any portion thereof (other than the Lease), or (v)
exceptions that can be removed from the Title Commitment by Seller’s delivery of a customary
owner’s title affidavit or gap indemnity (all of the foregoing hereinafter collectively referred to
as the “Seller’s Required Removal Items”). All title matters and exceptions set forth in
the Title Commitment and any Title/Survey Update and the state of facts shown on Seller’s existing
survey which are not Objections, or which are thereafter deemed to be accepted or waived by
Purchaser as hereinafter provided, other than the Seller’s Required Removal Items, are hereafter
referred to as the “Permitted Exceptions”. If Purchaser notifies Seller within the Title
Review Period or the Title Update Review Period, as applicable, of Objections, then within four (4)
business days after Seller’s receipt of Purchaser’s notice, Seller shall notify Purchaser in
writing (“Seller’s Title Response Notice”) of the Objections which Seller agrees to satisfy
on or prior to the Closing, at Seller’s sole cost and expense, and of the Objections that Seller
cannot or will not satisfy. Failure by Seller to respond to Purchaser by the expiration of said
four (4) business day response period shall be deemed as Seller’s election not to cure the
Objections raised by Purchaser. Notwithstanding the foregoing, Seller shall, in any event, be
obligated to satisfy Seller’s Required Title Removal Items. If Seller chooses not to satisfy all
or any of the Objections that Seller is not obligated to satisfy, Seller shall notify Purchaser
thereof within the allowed four (4) business day period, then Purchaser shall have the option, to
be exercised by the later of the expiration of the Due Diligence Period or four (4) business days
following Purchaser’s receipt of the Seller’s Title Response Notice, of either (i) terminating this
Contract by giving written notice of termination to Seller or (ii) electing to consummate the
purchase of the Parcel, in which case Purchaser shall be deemed to have waived such Objections and
such




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Objections shall become “Permitted Exceptions”
for all purposes hereunder. Failure by Purchaser to respond to Seller by the expiration of
said four (4) business day response period shall be deemed its election to waive the applicable
Objection(s), which shall become “Permitted Exceptions”. If Purchaser terminates this Contract
pursuant to clause (i) above, neither party under this Contract shall have any obligation to the
other and the Downpayment, together with accrued interest, shall be remitted by Escrow Agent as
follows:





The Second Downpayment, together with accrued interest thereon, shall be remitted to
Purchaser; and




The First Downpayment, together with accrued interest thereon, shall be remitted to Seller,
except that, if any Title/Survey Update obtained by Purchaser during the Due Diligence
Period reveals information that is adversely different in any material respect from the
information contained in the Title Commitment and Existing Survey provided to Purchaser by
Seller, then the First Downpayment, together with accrued interest thereon (less the
Independent Consideration), shall be remitted to Purchaser.



     Section 3.03 At the Closing, Purchaser and Lessee shall (i) execute and, as applicable,
acknowledge (a) four (4) counterparts of a lease between Purchaser, as landlord, and Academy, as
tenant, for the Parcel, such lease to be in form and substance as the lease annexed hereto as
Exhibit 2 (the “Lease”), and (b) a lease memorandum for the Parcel in recordable
form (“Lease Memorandum”), and (ii) deliver to the other, two (2) fully-executed and
acknowledged counterparts of the Lease and Lease Memorandum. The initial annual rental for the
Lease of the Parcel shall be $7,038,000.00 (with 1.50% annual increases thereafter). The Lease
Memorandum shall be recorded at Closing in the appropriate real property records.



ARTICLE 4. Representations and Warranties of Seller.




     Section 4.01 As an inducement to Purchaser to purchase the Parcel and intending that the
warranties and representations contained in this Section shall be true on the Closing Date, each
Seller warrants and represents to Purchaser as follows solely with respect to (i) that portion of
the Parcel owned by each Seller and (ii) the business affairs of each Seller, and except as
disclosed in writing to Purchaser to the contrary prior to the date of this Contract:



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          (i) The Parcel is not subject to any agreements of sale, or any options, or other rights of
third parties to acquire any interest therein (except as contained in this Contract) of which
either Seller has knowledge or is a party (and neither Seller will enter into any such
agreement without Purchaser’s prior written consent), and neither Seller has any current, actual
knowledge of any condemnation proceedings, eminent domain proceedings or similar actions or
proceedings currently pending or threatened against the Parcel.




          (ii) Each Seller is duly organized, validly existing and in good standing as a limited
partnership under the laws of the State of Texas. The foregoing representation and warranty shall
be effective as of the date hereof and as of the Closing Date, and the applicable Seller’s
liability with regard to the accuracy of such representation and warranty shall survive
indefinitely, subject to any applicable statutes of limitations.




          (iii) Each Seller has all requisite power and authority, has taken all actions required by its
organizational documents and applicable law, and has obtained all consents which are necessary to
authorize or enable it to execute and deliver this Contract. Each Seller has such power and
authority and has obtained such consents and approvals that are necessary to consummate the
transactions contemplated in this Contract. The individual(s) executing this Contract on each
Seller’s behalf have been duly authorized and are empowered to bind such Seller to this Contract.
The foregoing representation and warranty shall be effective as of the date hereof and as of the
Closing Date, and the applicable Seller’s liability with regard to the accuracy of such
representation and warranty shall survive indefinitely, subject to any applicable statutes of
limitations.




          (iv) Neither Seller is a party to any litigation, arbitration or proceeding (i) in which
either Seller is adverse to any past tenant or present tenant of the Parcel with respect to such
tenancy, (ii) in which either Seller is adverse to any person or entity having or claiming any
interest in the Parcel with respect to such interest or claim, or (iii) which affects or questions
either Seller’s title to its respective portion of the Parcel or either Seller’s ability to perform
its obligations under this Contract. Neither Seller knows of any presently pending litigation,
arbitration, governmental investigation or proceeding, and, to the actual knowledge of each of
Seller, no litigation, arbitration or proceeding has been threatened against either Seller, in
either case, affecting or questioning either Seller’s title to, or use of, the portion of the Mason
Land or the 44+ Acres Land or any portion thereof.




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          (v) Neither the execution of this Contract, nor the consummation by either Seller of the
transactions contemplated by this Contract, will (a) result in a breach of the terms, conditions
or provisions of, or constitute a default under, or result in a termination of, any agreement
or instrument to which either Seller is a party (other than a termination of the current ground
leases and/or facilities leases between each Seller and Academy concerning the Mason Land or the
44+ Acres Land), (b) violate any restriction to which either Seller is subject, (c) constitute a
violation of any applicable code, resolution, law, statute, regulation, ordinance, judgment, rule,
decree or order of which either Seller is aware, or (d) except as expressly contemplated hereby,
result in the creation of any lien, charge or encumbrance upon the Parcel or any part thereof.
Neither Seller is in default under any agreement or instrument where the liability thereunder might
adversely affect either Seller’s ability to perform its obligations under this Contract.




          (vi) At Closing, there will be no unrecorded leases (other than the Lease), liens or
encumbrances which may affect title to the Parcel (other than Permitted Exceptions).




          (vii) No consent of any third party is required in order for either Seller to enter into this
Contract and perform its obligations hereunder.




     Section 4.02 If, at or before the Closing, Seller becomes aware of any fact or circumstance
which would change a representation or warranty, then Seller will immediately give notice of such
changed fact or circumstance to Purchaser. In the event Purchaser has current actual knowledge as
of the Closing Date of any breach of the foregoing representations and warranties and Purchaser
proceeds with the Closing, then Purchaser shall be deemed to have waived and forever released
Seller from any and all claims arising out of such breach.



     Section 4.03 ALL OF SELLER’S REPRESENTATIONS AND COVENANTS IN THIS AGREEMENT AND ALL EXHIBITS
ATTACHED TO THIS AGREEMENT ARE LIMITED AS SET FORTH IN THIS SECTION. Seller’s covenants to provide
information and documentation and all of Seller’s representations are limited to Seller’s period of
ownership of the Parcel and the actual knowledge gained by Seller with respect to the Parcel during
such period of ownership, without any duty of investigation nor the implication of any such duty as
to same during such period of ownership or otherwise. Accordingly, Purchaser must rely solely on
Purchaser’s inspection to verify the accuracy thereof. As to the period prior to Seller’s
ownership, Seller can make no representation, however, Seller shall provide such information and
documentation as described in



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this Contract as is in Seller’s possession. Seller shall not be a
warrantor or guarantor of any studies or tests conducted by any person other than Seller and their
employees and provided to Purchaser pursuant to this
Contract, if any. Except as otherwise set forth in Section 4.04 hereof, Seller’s
representations and covenants shall merge into the deeds delivered hereunder and such
representations and covenants shall not, and shall not be deemed to, survive the Closing.



     Section 4.04 Subject to Section 4.02, the representations and warranties in subparagraphs (ii)
and (iii) of Section 4.01 hereof shall survive the Closing as provided for therein. Each Seller
shall and does hereby indemnify against and hold Purchaser harmless from any loss, damage,
liability and expense, together with all court costs and attorneys’ fees which Purchaser may incur,
by reason of any material misrepresentation by such Seller or any material breach of any of such
Seller’s warranties contained in subparagraphs (ii) and (iii) of Section 4.01 hereof.



ARTICLE 5. Representations and Warranties of Academy.




     Section 5.01 As an inducement to Purchaser to purchase the Parcel and intending that the
warranties and representations contained in this Section shall be true on the Closing Date and
shall survive the Closing as hereinafter provided, Academy warrants and represents to Purchaser as
follows (except as disclosed in writing to Purchaser to the contrary prior to the date of this
Contract):



          (i) The Parcel is not subject to any agreements of sale, or any options, or other rights of
third parties to acquire any interest therein (except as contained in this Contract) of which
Academy has knowledge or is a party (and Academy will not enter into any such agreement without
Purchaser’s prior written consent).




          (ii) To the actual knowledge of Academy, no condemnation proceedings, eminent domain
proceedings or similar actions or proceedings are now pending or threatened against the Parcel.




          (iii) (a) Academy is not a party to any litigation, arbitration or proceeding (1) in which
Academy is adverse to any past tenant or present tenant of the Parcel with respect to such tenancy,
(2) in which Academy is adverse to any person or entity having or claiming any interest in the
Parcel with respect to such interest or claim, or (3) which affects or questions Academy’s rights
in the Parcel or Academy’s ability to perform its obligations under this Contract or the Lease.




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               (b) Academy knows of no presently pending or threatened litigation, arbitration, governmental
investigation or proceeding prohibiting Academy’s use of the Parcel or any part thereof.



          (iv) Neither the execution of this Contract or the Lease, nor the consummation by Academy of
the transactions contemplated by this Contract or the Lease, will (a) result in a breach of the
terms, conditions or provisions of, or constitute a default under, or result in a termination of,
any agreement or instrument to which Academy is a party, (b) violate any restriction to which
Academy is subject, (c) constitute a violation of any applicable code, resolution, law, statute,
regulation, ordinance, judgment, rule, decree or order of which Academy is aware, or (d) except as
expressly contemplated hereby, result in the creation of any lien, charge or encumbrance upon the
Parcel or any part thereof. To the actual knowledge of Academy, Academy is not in default under
any agreement or instrument where the liability thereunder might adversely affect Academy’s ability
to perform its obligations under this Contract or the Lease.




          (v) Academy is duly organized and validly existing as a limited partnership under the laws of
the State of Texas. The foregoing representation and warranty shall be effective as of the date
hereof and as of the Closing Date, and Academy’s liability with regard to the accuracy of such
representation and warranty shall survive indefinitely, subject to any applicable statutes of
limitations.




          (vi) Academy has all requisite power and authority, has taken all actions required by its
organizational documents and applicable law, and has obtained all consents which are necessary to
authorize or enable it to execute and deliver this Contract and the Lease. Academy has such power
and authority and has obtained such consents and approvals that are necessary to consummate the
transactions contemplated in this Contract, including the execution of the Lease. The individuals
executing this Contract on Academy’s behalf have been duly authorized and are empowered to bind
Academy to this Contract and to the Lease. The foregoing representation and warranty shall be
effective as of the date hereof and as of the Closing Date, and Academy’s liability with regard to
the accuracy of such representation and warranty shall survive indefinitely, subject to any
applicable statutes of limitations.




          (vii) To the actual knowledge of Academy, the Buildings are not, and on the Closing Date will
not be, in violation of any applicable building and zoning laws, rules, codes or regulations,
except to a de minimis extent not affecting the use or operation of the Parcel.




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          (viii) To the actual knowledge of Academy, the Parcel and the use thereof does not, and on the
Closing Date will not, violate, in any material respect, any (a) applicable federal, state, county,
municipal and/or other governmental statutes, laws, rules, orders, regulations, ordinances,
judgments, decrees and injunctions of any court, board, agency, commission, office or authority of
any nature whatsoever for any governmental unit, or (b) covenants, agreements, restrictions and
encumbrances contained in any instrument, either of record or known to Academy, affecting the
Parcel or any part thereof which may (A) require repairs, modifications or alterations in or to the
Parcel or any part thereof, or (B) in any way limit the use and enjoyment thereof.




          (ix) Academy has not received written notice nor does Academy have any knowledge of any
pending improvements, liens or special assessments to be made against the Parcel by any
governmental authority.




          (x) Academy has not and will not, without the prior written consent of Purchaser, take any
action before any governmental authority having jurisdiction thereover, the object of which would
be to change the present zoning of or other land-use limitations, upon the Land, or any portion
thereof, or its potential use, and, to Academy’s knowledge, there are no pending proceedings, the
object of which would be to change the present zoning or other land-use limitations.




          (xi) No consent of any third party is required in order for Academy to enter into this
Contract and the Lease and perform its obligations hereunder and thereunder.




          (xii) Academy has provided Purchaser with a copy of a Phase I Environmental Site Assessment
report prepared by Terracon Consulting Engineers & Scientists dated August 2, 2006 and a Limited
Site Investigation report prepared by them dated August 22, 2006 (collectively, the
“Environmental Site Assessment”).Other than the information contained in the Environmental
Site Assessment, Academy has no actual knowledge that there exists or has existed, and Academy has
not caused any generation, production, location, transportation, storage, treatment, discharge,
disposal, release or threatened release upon, under or about the Parcel of any Hazardous Materials.
“Hazardous Materials” shall mean any flammables, explosives, radioactive materials,
hazardous wastes, hazardous and toxic substances or related materials, asbestos or any material
containing
asbestos (including, without limitation, vinyl asbestos tile), or any other substance or material,
defined as a “hazardous substance” by any federal, state, or local environmental law, ordinance,
rule or regulation including, without limitation, the Federal Comprehensive Environmental Response




12









 







Compensation and Liability Act of 1980, as amended, the Federal Hazardous Materials Transportation
Act, as amended, the Federal Resource Conservation and Recovery Act, as amended, and the rules and
regulations adopted and promulgated pursuant to each of the foregoing.




          (xiii) Other than the information contained in the Environmental Site Assessment, to Academy’s
current, actual knowledge, there is not now, nor has there ever been, on or in the Parcel
underground storage tanks, any asbestos-containing materials or any polychlorinated biphenyls,
including those used in hydraulic oils, electric transformers, or other equipment. Academy hereby
assigns to Purchaser, effective as of the Closing Date, all claims, counterclaims, defenses, or
actions, whether at common law, or pursuant to any other applicable federal or state or other laws
which Academy may have against any third parties relating to the existence of any Hazardous
Materials in, at, on, under or about the Parcel (including Hazardous Materials released on the
Parcel prior to the Closing Date and continuing in existence on the Parcel at the Closing Date).




     Section 5.02 ALL OF ACADEMY’S REPRESENTATIONS AND COVENANTS IN THIS AGREEMENT AND ALL EXHIBITS
ATTACHED TO THIS AGREEMENT ARE LIMITED AS SET FORTH IN THIS SECTION. Academy’s covenants to
provide information and documentation and all of Academy’s representations are limited to the term
of Academy’s tenancy on the Parcel (including its tenancy in existence on the date of this
Contract) (“Academy’s Tenancy”) and the actual knowledge gained by Academy with respect to
the Parcel during such period, without any duty of investigation nor the implication of any such
duty as to same during such period or otherwise. Purchaser acknowledges that Academy’s “actual
knowledge” is limited to that of Rodney Faldyn, Chief Financial Officer of Academy, an individual
who does not reside at the Parcel, and who has not undertaken any investigation with respect to
such representations. Accordingly, Purchaser must rely solely on Purchaser’s inspection to verify
the accuracy thereof. As to the period prior to Academy’s Tenancy, Academy can make no
representation, however, Academy shall provide such information and documentation as described in
this Contract as is in Academy’s possession. Academy shall not be a warrantor or guarantor of any
studies or tests conducted by any person other than Academy and their employees and provided to
Purchaser pursuant to this Contract, if any.



     Section 5.03 If, at or before the Closing, Academy becomes aware of any fact or circumstance
which would change a representation or warranty, then Academy will immediately



13









 







give notice of such
changed fact or circumstance to Purchaser. In the event Purchaser has current actual knowledge as
of the Closing Date of any breach of the foregoing representations and warranties and Purchaser
proceeds with the Closing, then Purchaser shall be deemed to have waived and forever released
Academy from any and all claims arising out of such breach, but subject to the provisions of the
Lease.



     Section 5.04 Subject to Section 5.03, the representations and warranties in Section 5.01 shall
survive the Closing for a period of one (1) year (except to the extent expressly provided to the
contrary hereinabove). Academy shall and does hereby indemnify against and hold Purchaser harmless
from any loss, damage, liability and expense, together with all court costs and attorneys’ fees
which Purchaser may incur, by reason of any material misrepresentation by Academy or any material
breach of any of Academy’s warranties. To the extent Purchaser shall fail to assert a claim under
the foregoing indemnification within thirty (30) days after the expiration of said one (1) year
period following the Closing with respect to those representations and warranties that survive only
for a period of one (1) year, then such claim shall be deemed to be waived and forever released by
Purchaser, but subject to the provisions of the Lease.



ARTICLE 6. Representations and Warranties of Purchaser.




     Section 6.01 As an inducement to Seller to sell the Parcel and intending that the
warranties and representations contained in this Section shall be true on the Closing Date and
shall survive the Closing, Purchaser warrants and represents to Seller that as of the date hereof:



          (i) Neither the execution of this Contract nor the consummation by Purchaser of the
transactions contemplated by this Contract will (i) conflict with, or result in a breach of, the
terms, conditions or provisions of, or constitute a default, or result in a termination of, any
agreement or instrument to which Purchaser is a party, (ii) violate any restriction to which
Purchaser is subject or (iii) constitute a violation of any applicable code, resolution, law,
statute, regulation, ordinance, judgment, rule, decree or order, of which Purchaser is aware.




          (ii) Purchaser is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Arizona.




          (iii) Purchaser has all requisite power and authority, has taken all actions required by its
organizational documents and applicable laws and has obtained all consents which are




14









 







necessary to
authorize or enable it to execute and deliver this Contract and to consummate the transactions
contemplated in this Contract. The individual(s) executing this Contract on Purchaser’s behalf
have been duly authorized and are empowered to bind Purchaser to this Contract.




     Section 6.02 Purchaser acknowledges that in entering into this Contract, Purchaser has not
been induced by and has not relied upon any representations, warranties or statements, whether
express or implied, made by Seller or any agent, employee or other representative of Seller or by
any broker or any other person representing or purporting to represent Seller, which are not
expressly set forth in this Contract, whether or not any such representations, warranties or
statements were made in writing or orally.



     Section 6.03 PURCHASER ACKNOWLEDGES AND AGREES THAT PURCHASER IS EXPERIENCED IN THE OWNERSHIP
AND OPERATION OF PROPERTIES SIMILAR TO THE PARCEL AND THAT PURCHASER PRIOR TO THE CLOSING DATE WILL
HAVE INSPECTED THE PARCEL TO ITS SATISFACTION AND IS QUALIFIED TO MAKE SUCH INSPECTION. PURCHASER
ACKNOWLEDGES THAT PURCHASER, PRIOR TO THE CLOSING DATE, WILL HAVE THOROUGHLY INSPECTED AND EXAMINED
THE PARCEL TO THE EXTENT DEEMED NECESSARY BY PURCHASER IN ORDER TO ENABLE PURCHASER TO EVALUATE THE
CONDITION OF THE PARCEL AND ALL OTHER ASPECTS OF THE PARCEL (INCLUDING, BUT NOT LIMITED TO, THE
ENVIRONMENTAL CONDITION OF THE PARCEL), AND PURCHASER ACKNOWLEDGES THAT PURCHASER IS RELYING SOLELY
UPON ITS OWN (OR ITS REPRESENTATIVES’) INSPECTION, EXAMINATION AND EVALUATION OF THE PARCEL AND
NOT UPON ANY STATEMENTS (ORAL OR WRITTEN) WHICH MAY HAVE BEEN MADE OR MAY BE MADE (OR PURPORTEDLY
MADE) BY SELLER OR ANY OF ITS REPRESENTATIVES OTHER THAN THE REPRESENTATIONS AND WARRANTIES OF
SELLER AND ACADEMY CONTAINED IN THIS CONTRACT, THE LEASE AND THE CLOSING DOCUMENTS. AS A MATERIAL
PART OF THE CONSIDERATION FOR THIS AGREEMENT AND THE
PURCHASE PRICE, PURCHASER HEREBY AGREES TO ACCEPT THE PARCEL ON THE CLOSING DATE IN ITS
“AS-IS, WHERE IS” CONDITION AND WITH ALL FAULTS, AND WITHOUT REPRESENTATIONS AND WARRANTIES OF ANY
KIND, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, EXCEPT ONLY THE TITLE



15









 









WARRANTIES
EXPRESSLY SET FORTH IN THE DEEDS DELIVERED BY SELLER TO PURCHASER ON THE CLOSING DATE AND THE
REPRESENTATIONS AND WARRANTIES OF SELLER AND ACADEMY CONTAINED IN THIS AGREEMENT AND IN THE LEASE.
THE PURCHASER HEREBY EXPRESSLY ASSUMES ALL RISKS, LIABILITIES, CLAIMS, DAMAGES, AND COSTS (AND
AGREES THAT SELLER SHALL NOT BE LIABLE FOR ANY SPECIAL, DIRECT, INDIRECT, CONSEQUENTIAL, OR OTHER
DAMAGES) RESULTING OR ARISING FROM OR RELATED TO THE OWNERSHIP, USE, CONDITION, LOCATION,
MAINTENANCE, REPAIR OR OPERATION OF THE PARCEL. THE PROVISIONS OF THIS SECTION 6.03 ARE A MATERIAL
INDUCEMENT FOR SELLER ENTERING INTO THIS CONTRACT AND SHALL SURVIVE THE CLOSING.



ARTICLE 7. Covenants of Academy; Indemnity for Inspections and Repairs. Section
7.01 Prior to the Closing, Academy shall allow Purchaser and Purchaser’s representatives access to
the Parcel for the purposes of inspection, upon reasonable prior notice at reasonable times during
business hours. All inspections shall be at the sole risk of Purchaser. Purchaser shall indemnify
and hold Seller and Academy harmless from and against any and all claims, demands, injuries,
damages, costs, expenses (including reasonable attorney’s fees) or liability incurred by or
asserted against Seller or Academy resulting from any of those inspections. If this Contract is
terminated for any reason, then within thirty (30) days after termination Purchaser shall repair
any damage caused by any of those inspections so as to restore the Parcel to its same condition
before the damage. Notwithstanding any provision of this Contract, the indemnity and repair
provisions of this Section 7.01 shall survive any termination of this Contract and the limitations
on Seller’s remedies under Section 13.02 shall not in any way limit Seller’s or Academy’s
enforcement of the provisions of this Section 7.01.



ARTICLE 8. Destruction, Damage or Condemnation.




     Section 8.01 Risk of loss due to damage or destruction or condemnation of the Parcel or
any part thereof, shall remain with Seller until legal title passes to Purchaser. In the event of
any damage, destruction or condemnation of the Parcel or any portion thereof, Purchaser shall have
the option of (i) terminating this Contract, or (ii) accepting title in its damaged or destroyed
condition



16









 







whereupon such damage or destruction shall be deemed to have occurred for purposes of the
Lease during the term of such Lease (in which event it shall be the obligation of Academy to
restore after the closing of title). If Purchaser terminates this Contract pursuant to clause
(i) above, neither party under this Contract shall have any obligation to the other and the
Downpayment, together with accrued interest (less the Independent Consideration), shall be promptly
returned to Purchaser by the Escrow Agent. Notwithstanding the foregoing, in the event of an
immaterial damage to the Parcel prior to the Closing, Purchaser shall be required to accept title
in accordance with the provisions of clause (ii) of this Section 8.01. For purposes hereof, damage
to the Parcel shall be deemed to be “immaterial” if the cost to repair or restore such damage does
not exceed $500,000.00 in the aggregate, the estimated time to repair or restore such damage does
not exceed 90 days, and Academy cannot abate or offset any payments under the Lease or terminate
the Lease.



ARTICLE 9. Conditions Precedent.




     Section 9.01 Purchaser’s obligation to consummate the acquisition of the Parcel pursuant
to the terms of this Contract is subject to and conditioned upon the following:



          (a) Each of the representations and warranties made by Seller and Academy in this Contract
being true and complete on the Closing Date in all material respects. At the Closing, Seller and
Academy shall deliver to Purchaser a certification to this effect, which certificate shall be
subject to the survival provisions and other limitations contained in this Contract.




          (b) Seller and Academy shall have performed all obligations that each is required to perform
pursuant to the provisions of this Contract.




          (c) The execution and delivery of the Lease and Lease Memorandum for the Parcel.




          (d) No material adverse change shall have occurred between the date hereof and the Closing
Date in the financial condition of Academy.




     Section 9.02 Seller’s obligation to consummate the sale of the Parcel pursuant to the terms
of this Contract is subject to and conditioned upon the following:



17









 





          (a) Each of the representations and warranties made by Purchaser in this Contract being true
and complete on the Closing Date. At the Closing, Purchaser shall deliver to Seller a
certification to this effect, which certificate shall provide that it survives the Closing Date.




          (b) Purchaser shall have performed all obligations that it is required to perform pursuant to
the provisions of this Contract.




          (c) The execution and delivery of the Lease and Lease Memorandum for the Parcel.




ARTICLE 10. Seller’s and Academy’s Closing Obligations.



     At the Closing, Seller and/or Academy, as applicable, shall deliver the following to
Purchaser or to Purchaser’s designee or assignee as directed by Purchaser with respect to the
Parcel:



     Section 10.01



          (a) A Special Warranty Deed (or its equivalent) from 44+ Acres in recordable form, conveying
to Purchaser indefeasible fee simple title to the 44+ Acres Land, subject only to the Lease and the
Permitted Exceptions.




          (b) A Special Warranty Deed (or its equivalent) from Mason in recordable form, conveying to
Purchaser indefeasible fee simple title to the Mason Land, subject only to the Lease and the
Permitted Exceptions.




     Section 10.02



     An owner policy of title insurance (the “Owner Title Policy”), which Owner Title
Policy shall (i) be issued by the Title Company in the form prescribed for use in the State of
Texas, (ii) insure good and indefeasible fee simple title to the Parcel in Purchaser in a face
amount equal to the Purchase Price, (iii) insure any easements, rights-of-way, licenses or other
similar rights or interests
appurtenant to or otherwise benefiting the Land to the extent insurable, and (iv) contain no
exceptions other than the Lease and Permitted Exceptions. The Owner Title Policy shall, to the
extent possible, (A) provide affirmative insurance against mechanics liens by reason of work
performed upon or materials delivered to the Parcel prior to Closing or by reason of any other act
or omission of Seller, Academy or its agents prior to Closing from which a mechanics lien may
arise, and (B) insure access to the Parcel as shown on the survey referred to in Section 10.03
hereof.



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Purchaser may, at Purchaser’s option and expense, cause the Title Company to delete the
“survey exception” from the Owner Title Policy without qualification or condition, except as to
“any shortages in area.” Purchaser may, at Purchaser’s option and expense, cause the Title Company
to provide any endorsements and coverages not contemplated above that Purchaser may desire, to the
extent available in the state where the Parcel is located.



     Section 10.03 To the extent not previously provided, six (6) copies of a current ALTA
as-built survey of the Land, Building and the appurtenances thereto of the Parcel, to be approved
by and certified to Purchaser, Purchaser’s lender and the Title Company and which has been prepared
by a Texas registered professional land surveyor reasonably acceptable to Purchaser in accordance
with 2005 Minimum Standard Detail Requirements for ALTA/ACSM Land Title Surveys (the
“Survey”). The Survey shall show the location on the Parcel of all improvements, building
and set-back lines, fences, evidence of abandoned fences, ponds, creeks, streams, rivers, flood
plains and flood prone areas, canals, watercourses, easements, roads, rights-of-way, encroachments
and such other exceptions, located on the Parcel or described in the commitment for the Parcel and
shall contain a surveyor’s certification in form and substance reasonably acceptable to Purchaser
and its lender.



     Section 10.04 A report of searches made of the local and centralized Uniform Commercial Code
records where the Parcel is located to a date which is not more than ten (10) days prior to the
Closing Date, showing no filings against, or with respect to, the Parcel or any portion thereof,
other than those to be released or provided for at Closing.



     Section 10.05 Unless required to be posted at the Parcel, to the extent in Seller’s or
Academy’s possession, the original, or a complete and accurate copy, of the current certificate of
occupancy or its legal equivalent for the Parcel with all amendments thereto (unless the
municipality where the Parcel is located does not issue such certificate or its legal equivalent).



     Section 10.06 The Lease duly executed by Academy, as tenant.



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     Section 10.07 The Lease Memorandum duly executed and acknowledged by Academy, as tenant.



     Section 10.09 A Non-foreign affidavit with respect to Seller as required by IRC Section
1445(b)(2) and the regulations issued thereunder.



     Section 10.09 A certified copy of the Resolutions of the general partner of each Seller, or
such other reasonable documentation, evidencing that those officers acting for each of Seller have
full authority to consummate the transactions in accordance with the terms of this Contract as
modified through the Closing.



     Section 10.10 A certified copy of the Resolutions of the general partner of Academy, or such
other reasonable documentation, evidencing that those officers acting for Academy have full
authority to consummate the transactions in accordance with the terms of this Contract as modified
through the Closing.



     Section 10.11 Such other documents and affidavits as may be reasonably required by this
Contract or by the Title Company in order to consummate this transaction and issue the Owner Title
Policy to Purchaser, including, without limitation, (a) any satisfactions or like instruments
necessary to discharge any of Seller’s Required Removal Items, (b) any lease terminations or like
instruments necessary to remove or terminate any leases that encumber the Parcel, and (c) any title
affidavits or gap indemnity required by Title Company.



     Section 10.12 Such other instruments, affidavits and documents as are customarily executed by
the seller of an interest in real property in connection with the recording of a deed.



     Section 10.13 The certification referred to in Section 9.01(a) for each Seller and Academy.



     Section 10.14 A Bill of Sale from each Seller conveying to Purchaser the Personal Property of
each Seller, if any, without warranty of title with respect thereto, and assigning to Purchaser,



20









 







without recourse or warranty, the Permits and all warranties, guaranties, indemnities and other
rights which each Seller may have against any manufacturer, seller, engineer, contractor or builder
with respect to the Parcel, and the delivery of originals, to the extent available, or copies (to
the extent originals are not available) of such documents.



     Section 10.15 A Bill of Sale from Academy conveying to Purchaser the Academy Leasehold
Improvements.



     Section 10.16 A subordination, nondisturbance and attornment agreement executed by Academy in
a form acceptable to Academy and Purchaser’s lender (the “SNDA”).



     Section 10.17 Copies of any final “as-built” record drawings for the Parcel in the control or
possession of Seller or Academy.



ARTICLE 11. Purchaser’s Closing Obligations.




     At the Closing, Purchaser shall deliver the following to Seller or Academy with respect to the
Parcel:



     Section 11.01 The Balance of the Purchase Price, as specified in Section 2.01(b).



     Section 11.02 The Lease, duly executed by Purchaser, as landlord.



     Section 11.03 The Lease Memorandum, duly executed and acknowledged by Purchaser.



     Section 11.04 Purchaser’s certification referred to in Section 9.02(a).



     Section 11.05 Such other documents as may be reasonably required by this Contract or by the
Title Company.



     Section 11.06 The SNDA executed by Purchaser’s lender and Purchaser.



21









 





ARTICLE 12. Apportionments and Other Payments.




     Section 12.01 There shall be no prorations or apportionments hereunder insofar as
Academy, pursuant to the Lease, shall be required to pay all items usually prorated in transactions
of the type described herein, including all real property taxes applicable to any period prior to
the Closing Date. Rent for the remainder of the month of Closing shall be paid at the Closing
pursuant to the Lease. Academy hereby acknowledges that, from and after Closing, it shall continue
to be liable for all taxes, construction costs and all other expenses and charges relating to the
operation of the Parcel accruing prior to Closing, and, as the tenant under the Lease, will assume
all such payment obligations commencing at Closing and for items accruing on and after the Closing
in accordance with the terms of the Lease.



     Section 12.02 Except as otherwise provided by the last two sentences of this Section 12.02,
Seller shall pay the cost of (i) all documents to be delivered to Purchaser pursuant to this
Contract and (ii) all Closing costs, including, without limitation, the title insurance premium and
the services provided by the Title Company (except as otherwise set forth herein and excluding
endorsements required by Purchaser pursuant to the last sentence of Section 10.02, but including
any endorsements obtained by Seller to cure a title objection or to provide coverages otherwise
contemplated by Section 10.02), survey charges, stamp taxes, transfer taxes, and all other fees
relating to the granting, executing and recording of the deed described in Section 10.01 above.
Purchaser shall pay the expenses incident to obtaining financing for the acquisition of the Parcel,
including the premium for the mortgagee title policies and the cost of endorsements to the Owner
Title Policy required by Purchaser pursuant to the last sentence of Section 10.02 (but excluding
any endorsements obtained by Seller to cure a title objection or to provide coverages otherwise
contemplated by Section 10.02).
Each party shall pay its own legal fees incidental to the execution of this Contract and the
consummation of the transactions contemplated hereby.



     Section 12.03 The provisions of this Article 12 shall survive the Closing or earlier
termination of this Contract in accordance with the terms hereof.



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ARTICLE 13. Termination and Remedies.




     Section 13.01 In the event that any of Seller’s or Academy’s representations or
warranties contained herein are untrue at Closing or if Seller or Academy shall have failed to have
performed any of the covenants and/or agreements contained herein which are to be performed by
Seller or Academy, or if any of the conditions precedent to Purchaser’s obligation to consummate
the transactions contemplated hereby shall have failed to occur, Purchaser may, as its sole and
exclusive remedies, (i) terminate this Contract in its entirety by giving written notice of
termination to Seller, in which event the Downpayment, together with accrued interest (less the
Independent Consideration), shall be promptly returned to Purchaser by the Escrow Agent, neither
party shall have any further rights or liabilities under this Contract except that Purchaser and
Seller shall continue to remain liable under the indemnification provisions of Section 14.01 or
(ii) seek to enforce specific performance of this Contract. Notwithstanding the foregoing, if
specific performance is unavailable as a remedy to Purchaser because of Seller’s or Academy’s
affirmative acts, Purchaser shall be entitled to pursue all rights and remedies available at law or
in equity. The foregoing provisions shall not limit any rights or remedies that Purchaser may have
after Closing under any provisions of this Contract that survive Closing.



     Section 13.02 In the event Purchaser shall default in the performance of its obligations to
purchase the Parcel and to make all payments to Seller required hereunder, Seller, as Seller’s sole
remedy, shall have the right to receive and retain the Downpayment and all interest and other sums
earned thereon as liquidated damages for all loss, damage and expense suffered by Seller,
including, without limitation, the loss of its bargain, and neither party shall have any further
rights or liabilities under this Contract except that Purchaser and Seller shall continue to remain
liable under the
indemnification provisions of Section 14.01 and Purchaser shall continue to remain liable
under the provisions of Section 3.02(b), Section 3.02(c) and Section 7.01.



ARTICLE 14. Broker.




     Section 14.01 Seller and Purchaser represent and warrant to each other that they know of
no broker who has claimed or may have the right to claim a commission in connection with this
transaction, except (i) Jeff Hughes of Stan Johnson Company (the “Seller Broker”) to which
Seller



23









 







agrees to pay a commission pursuant to a separate agreement between Seller and the Seller
Broker and (ii) Gill Warner of Stan Johnson Company (the “ Purchaser Broker”) to which
Purchaser agrees to pay a commission pursuant to a separate agreement between Purchaser and the
Purchaser Broker. Each party hereby indemnifies and agrees to save the other harmless of and from
all loss, cost, liability and expense, including reasonable attorney’s fees, arising out of the
breach by the other of the representations and warranties contained in this Section 14.01. The
provisions of this Section 14.01 shall survive the Closing or, if the Closing does not occur for
any reason, shall survive the termination of this Contract.



ARTICLE 15. Notices.




     Section 15.01 All notices required or desired to be given under this Contract shall be
in writing and shall be sent by Federal Express (or other national or regional overnight courier
which provides evidence of delivery), addressed to the other party at its address set forth on page
1 of this Contract, with a copy thereof to be sent in the manner herein provided, addressed to the
attorneys for the other party, or at such other addresses as shall be designated by Seller or
Purchaser by notice given in the manner herein provided. Any notice executed by Drenner & Golden
Stuart Wolff LLP 301 Congress Avenue, Suite 1200, Austin, Texas 78701, attorneys for Academy, shall
have the same force and effect as though signed by the principal. A copy of all notices given to
Seller or Academy shall be given to Drenner & Golden Stuart Wolff LLP, Attn: David A. Wolff, at the
foregoing address. Any notice executed by Kutak Rock LLP, 8601 N. Scottsdale Road, Suite 300,
Scottsdale, Arizona 85253, attorneys for Purchaser, shall have the same force and effect as though
signed by the principal. A copy of all notices given to Purchaser shall be given to Kutak Rock
LLP, Attn: Mitch
Padover, at the foregoing address. Any such notice shall be deemed given on the date it is
delivered to the correct address.



ARTICLE 16. Miscellaneous.




     Section 16.01 This Contract may be executed in any number of counterparts which together
shall constitute the agreement of the parties. Further, a photographic, photostatic, facsimile or
other reproduction of a signature to this Contract, when delivered to evidence the actual execution
of this Contract by a party hereto, shall be deemed to be the execution of this Contract by such
party. The



24









 







section headings herein contained are for purposes of identification only and shall not
be considered in construing this Contract.



     Section 16.02 This Contract embodies and constitutes the entire understanding between the
parties with respect to the transaction contemplated herein, and all prior agreements,
understandings, representations and statements, oral or written, are merged into this Contract.
Neither this Contract nor any provisions hereof may be waived, modified, amended, discharged or
terminated except by an instrument signed by the party against whom the enforcement of such waiver,
modification, amendment, discharge or termination is sought, and then only to the extent set forth
in such instrument.



     Section 16.03 This Contract shall be governed by Texas law.



     Section 16.04 This Contract and the terms and provisions hereof shall inure to the benefit of
and be binding upon the parties hereto and their respective heirs, executors, personal
representatives, successors and permitted assigns. Purchaser cannot assign this Contract to any
other person or entity (other than to an affiliate of Purchaser or a real state investment trust
sponsored by an affiliate of Purchaser) without the prior written consent of Seller, and in the
event of such permitted assignment by Purchaser, Purchaser shall remain liable for all of
Purchaser’s obligations under this Contract. The representations and warranties of Seller and
Academy in this Contract shall inure to the benefit of and be binding upon the parties hereto, the
Purchaser, any subsequent owners of the Parcel and Purchaser’s lender.



     Section 16.05 This Contract is executed by the authorized representatives of the parties, not
individually, but solely on behalf of such parties. All persons dealing with any party must look
solely to the assets of such party for the enforcement of any claim against it. The obligations
hereunder are not binding upon, nor shall resort be had to the private property of any of the
directors, officers, partners, shareholders, advisors, employees or agents of Purchaser or Seller.
Any Trustee executing this Contract in a trust capacity shall be liable hereunder solely in such
capacity.



25









 





     Section 16.06 In the event any portion of this Contract shall be declared by any court of
competent jurisdiction to be invalid, illegal or unenforceable, such portion shall be deemed
severed from this Contract and the remaining parts hereof shall remain in full force and effect, as
fully as though such invalid, illegal or unenforceable portion had never been part of this
Contract.



     Section 16.07 If it shall be necessary for either Purchaser or Seller (or Academy) to employ
an attorney to enforce its rights pursuant to this Contract (or defend any such enforcement), the
non-prevailing party shall reimburse the prevailing party for reasonable attorneys fees.



     Section 16.08 Time is important to each of Seller, Purchaser and Academy in the performance
of this Contract, and each party has agreed that strict compliance is required as to any date set
out herein. If the final date of any period which is set out in any paragraph of this Contract
falls upon a Saturday, Sunday or legal holiday under the laws of the United States or the State of
Texas, then, and in such event, the time of such period shall be extended to the next day which is
not a Saturday, Sunday or legal holiday.



     Section 16.09 Whenever the term or phrase “effective date hereof” or “date hereof” (or other
similar phrases describing the date this Contract becomes binding on Seller, Purchaser and Academy)
are used in this Contract, such terms or phrases shall mean and refer to the date on which a
counterpart or counterparts of this agreement executed by Seller, Purchaser and Academy are
deposited with the Title Company.



     Section 16.10 All exhibits attached hereto are incorporated herein by this reference for all
purposes.



     Section 16.11 Seller and Academy acknowledge that Purchaser may elect to assign all of its
right, title and interest in and to this Contract to a company that is subject to the reporting
requirements of the Securities Exchange Act of 1934, as amended (“Registered Company”),
promoted by the Purchaser or to an affiliate of a Registered Company (a “Registered Company
Affiliate”). In the event Purchaser’s assignee under this Contract is a Registered Company or
a Registered Company Affiliate, the Registered Company will be required to make certain filings
with



26









 







the U.S. Securities and Exchange Commission required under SEC Rule 3-14 of Regulation S-X
(the “SEC Filings”) that relate to the most recent pre-acquisition fiscal year (the
“Applicable Fiscal Year”) for the Parcel. In such event, to assist the Registered Company
with the preparation of the SEC Filings, Seller and Academy agree to reasonably cooperate with
Purchaser and the Registered Company in providing or otherwise making available non-proprietary
financial information in Seller’s or Academy’s possession or control regarding the operation of the
Parcel for the Applicable Fiscal Year requested by Purchaser, the Registered Company, and/or
Purchaser’s or the Registered Company’s auditors (“SEC Filing Information”), it being
agreed however, that the delivery of such information shall not be deemed a condition to Closing.
Such information may include, but is not limited to, bank statements in Seller’s or Academy’s
possession or control, operating statements, general ledgers, cash receipts schedules, invoices for
expenses and capital improvements, insurance documentation, and accounts receivable aging related
to the Parcel, but shall not include any information concerning the operation of Academy’s retail
business. Upon receipt of written notice from Purchaser prior to the expiration of the Due
Diligence Period, Seller and Academy shall use good faith efforts to promptly deliver the SEC
Filing Information requested by Purchaser, the Registered Company and/or Purchaser’s or Registered
Company’s auditors, and Seller and Academy agree to cooperate with Purchaser, the Registered
Company and Purchaser’s or the Registered Company’s auditors regarding any reasonable inquiries by
Purchaser, the Registered Company and Purchaser’s or the Registered Company’s auditors concerning
any SEC Filing Information, including delivery by Seller and Academy of an executed representation
letter prior to the Closing Date in form and substance requested by Purchaser’s or the Registered
Company’s auditors and reasonably acceptable to Seller and Academy and their respective counsel
(“SEC Filings Letter”). A sample
SEC Filings Letter is attached to the Contract as Exhibit 3; however, Purchaser’s
and/or the Registered Company’s auditors may require additions and/or revisions to such letter
following review of the SEC Filing Information provided by Seller and Academy. The SEC Filing
Information provided by Seller and Academy shall be subject to a confidentiality agreement;
however, Seller and Academy consent to the disclosure of such SEC Filing Information that is
required to be disclosed in any SEC Filings by the Registered Company. Purchaser shall reimburse
Seller and Academy for the reasonable costs of Seller and Academy associated with providing SEC
Filing Information. The provisions of this Section 16.11 shall survive the Closing for a period of
one (1) year.



27









 





(Signatures to Follow)




28









 








     IN WITNESS WHEREOF, the parties hereto have executed this Contract as of the date first above
written.



	 	 	 	 	 	 	 	 	 	 	 
	 	 	PURCHASER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	SERIES D, LLC, an Arizona limited liability company
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Name: John M. Pons
	 	 
	 

	 	 	 	 	 	 	 	Its: Authorized Officer	 	 






(Signatures Continue on Next Page)




 









 








(Signatures Continued from Previous Page)




	 	 	 	 	 	 	 	 	 	 	 
	 	 	SELLER:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	44.385 ACRES, LTD., a Texas limited partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	44.385 GP, L.L.C. a Delaware limited liability company, its general partner
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	Its:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	MASON MSG, LTD., a Texas limited partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	FRANZ MSG, INC., a Texas corporation, its general partner
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	Its:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	LESSEE:
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	ACADEMY, LTD., a Texas limited partnership
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	Academy Managing Co., L.L.C., a Texas limited liability company, its
General Partner
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	 	 	 	 	Its:	 	 







 









 








EXHIBIT 1-A




Legal Description of 44+ Acres Land



All of Restricted Reserve “A”, in Block One (1) of ACADEMY WAREHOUSE AND DISTRIBUTION CENTER, a
SUBDIVISION in Harris County, Texas, according to the map or plat thereof recorded under Film Code
No. 505041 of the Map Records of Harris County, Texas.




 









 








EXHIBIT 1-B




Legal Description of Mason Land




     The tracts or parcels containing (i) approximately 19.046 acres, as described in that certain
instrument filed in the Official Public Records of Harris County under Clerk’s File Number S238325,
(ii) approximately 14.489 acres, as described in that certain instrument filed in the Official
Public Records of Harris County under Clerk’s File Number U165826, (iii) approximately 10.739
acres, as described in that certain instrument filed in the Official Public Records of Harris
County under Clerk’s File Number U979888, and (iv) approximately 5.0876 acres, as described in that
certain instrument filed in the Official Public Records of Harris County under Clerk’s File Number
X953121.




 









 








EXHIBIT 2




Form of Lease




 









 





EXHIBIT 3




FORM of SEC Compliance Letter




     We are providing this letter in connection with your audit of the historical records of
certain revenues and certain expenses of [property name], located at [property address] (the
“Property”) for the purpose of expressing an opinion as to whether the historical records presents
fairly, in all material respects, certain revenues and certain expenses for the year ended December
31, ___ of the Property on the basis of cash receipts and disbursements.



     We confirm, to the best of our knowledge and belief, the following representations made to you
during your audit:




	 	i.	 	We have made available to you all requested financial records and corresponding data
relating to the use and operation of the Property.
	 
	 	ii.	 	[We have no knowledge of any fraud or suspected fraud affecting the use or
operation of the Property involving (1) management, (2) employees or (3) others where the
fraud could have a material effect on the financial statements.]
	 
	 	iii.	 	We have no knowledge of any allegations of fraud or suspected fraud affecting the use
or operation of the Property received in communications from employees, former employees,
analysts, regulators, short sellers, or others.
	 
	 	iv.	 	There are no unasserted claims or assessments relating to the use or operation of the
Property that legal counsel has advised us are probable of assertion and must be disclosed
in accordance with Statement of Financial Accounting Standards No. 5, Accounting for
Contingencies.
	 
	 	v.	 	No events relating to the use or operation of the Property have occurred subsequent to
December 31, ___ that require consideration as adjustments to or disclosures in the
financial records.





	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	MASON MSG, LTD., a Texas
limited partnership	 	 	 	44.385 ACRES, LTD., a Texas limited partnership	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	FRANZ MSG, INC., a
Texas corporation, its
general partner	 	 	 	By:	 	44.385 GP, L.L.C. a Delaware limited
liability company, its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 	 	 	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 	 	 	 	 	 

Name:
	 	 
	 

	 	 	 	Its:
	 	 	 	 	 	 	 	Its:	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	ACADEMY, LTD., a Texas limited partnership	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	Academy Managing Co., L.L.C., a Texas limited liability company, its
General Partner	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 

Name:
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	Its:	 	 	 	 	 	 	 	 	 	 







 









 








EXHIBIT 4




Academy Leasehold Improvements



Academy distribution center and office leasehold improvements relating to the Leased Premises such
as, but not limited to, the following:




Bathroom fixtures

Carpeting

Ceiling assets

Concrete

Curbs

Dock doors

Doors

Drainage systems

Ductwork

Electrical assets

Elevators

Fencing

HVAC

Kitchen fixtures

Lighting

Mezzanines

Pavement

Plumbing assets

Roofing assets

Sheetrock

Signage

Sprinkler systems

Stairs

Water heaters

Windows




Ex 3 - 1