Document:

Blueprint

 

 
Exhibit 10.1

 

AGREEMENT OF

LIMITED PARTNERSHIP

OF

150 CCM BLACK OAK, LTD.

 

 

THIS
AGREEMENT OF LIMITED PARTNERSHIP (the “Agreement”) is
made and entered into effective the 20th day of March, 2014 by and between 150 Black
Oak GP, Inc., a Texas corporation, whose address is 340 North Sam
Houston Parkway East, Suite 140, Houston, Texas 77060, as general
partner (“General Partner”), and each of the
individuals or entities whose names are set forth on Exhibit
“A” attached to this Agreement as limited partners
(“Limited Partners”).

 

ARTICLE I

ORGANIZATION OF THE PARTNERSHIP

 

1.1           
Formation of Limited
Partnership. The parties hereby form, pursuant to the Texas
Revised Limited Partnership Act, Article 6132a-1 of the Revised
Civil Statutes of the State of Texas, (the “Act”), a
Limited Partnership (the “Partnership”). The rights and
liabilities of the Partners shall be as provided for in this
Agreement and in the Act.

 

1.2           
Certificate of Limited
Partnership. The parties shall execute and file a
Certificate of Limited Partnership (the “Certificate”),
and other relevant documents ancillary to the Certificate, with the
office of the Secretary of State of the State of Texas as required
by the Act, and take all other appropriate action to comply with
all legal requirements for the formation and operation of a limited
partnership under the Act.

 

1.3           
Partnership Name. The name
of the Partnership shall be 150 CCM Black Oak, Ltd. If considered
necessary in the opinion of counsel to the Partnership to preserve
the limited liability of the Limited Partners, the business
conducted by the Partnership shall be conducted under that name or
under such other name or names as the General Partner may select
and might be necessary to preserve such limited
liability.

 

1.4           
Location of Office. The
principal business office of the Partnership shall be at 340 North
Sam Houston Parkway East, Suite 140, Houston, Texas
77060.

 

1.5           
Purpose of Partnership. The purpose of
the Partnership shall be as to buy, develop, manage and sell, as
appropriate, the real property acquired by the Partnership,
including improvements and personal property located thereon, such
real property to include the tracts or parcels of land more
particularly described in Exhibit “B” attached to this
Agreement (the “Project”).

 

             1.6            
Term of Partnership. The
Partnership shall become effective as of the date hereof and shall
remain effective until December 31, 2030, or until such earlier
date as the Partnership is dissolved pursuant to the Act or the
provisions of this Agreement.

 

 

 

 

ARTICLE II

DEFINITIONS

 

The
following terms used in this Agreement shall, unless otherwise
expressly provided in this Agreement or unless the context
otherwise requires, have the following respective
meanings:

 

2.1    
Agreement shall mean this
Agreement of Limited Partnership.

 

2.2 Annual Budget shall mean a budget
prepared by the General Partner and approved by a Majority Interest
of Limited Partners in accordance with the provisions of Section
9.12 of this Agreement. The first Annual Budget shall include
obtaining owner financing for the acquisition of the Property
(hereinafter defined) by the Partnership, which financing shall
include separate notes and deeds of trust covering the tracts or
parcels comprising the Property.

 

2.3 Budget and Development Plan shall mean
the budget and initial development plan for the development of the
Property. The General Partner shall periodically update the Budget
and Development Plan, as provided in Section 9.5 of this
Agreement.

 

2.4    
Budgets shall mean, jointly,
the Annual Budget and the Budget and Development Plan.

 

2.5    
Class A Limited Partner shall mean
CCM Development USA Corporation. Duties charged in this
Agreement to the Class A Limited Partner may be performed by its
designee.

 

2.6    
Consultants shall mean,
collectively, CCM Development USA Corporation, a Delaware
corporation, American Real Estate Investments, LLC, a Missouri
limited liability company, and Arete Real Estate and Development
Company, a Texas corporation.

 

2.7    
Effective Date shall mean
the date the Certificate is filed with the Secretary of State of
Texas.

 

2.8    
General Partner shall mean
150 Black Oak GP, Inc., a Texas corporation, or such substitute or
different General Partner as may be subsequently named pursuant to
the terms of this Agreement.

 

2.9    
Initial Capital
Contributions shall mean the amount contributed to the
Partnership on or after the date hereof by any
Partner.

 

2.10  
Limited Partners shall mean
those persons who execute this Agreement or any counterpart of this
Agreement as Limited Partners and whose names and residence
addresses appear on Exhibit “A”, which is attached to
this Agreement and made a part of this Agreement for all
purposes.

 

2.11  
Major Decisions shall mean
the actions as set forth in paragraph 9.12 of this
Agreement.

 

 

2

 

 

2.12  
Majority in Interest of Limited Partners shall mean
those Limited Partners who at the time of any determination of a
majority have 59.5% or more of the combined Partnership Interest of
the Partnership.

 

2.13  
Partner shall mean the
reference to the General Partner or any one of the Limited
Partners.

 

2.14  
Partners shall mean the
collective reference to the General Partner and the Limited
Partners.

 

2.15  
Partnership Interest shall
mean, as to any Partner, all of the interests of that Partner in
the Partnership, expressed as a percentage and set opposite his or
her name in Exhibit “A.”

 

2.16  
Person shall mean any
individual, corporation, partnership, trust, or other
entity.

 

2.17  
Preferred Return shall mean
with respect to the Class A Limited Partner (i) a sum that
accrues and accumulates at the rate of five percent (5%) per annum
on the unreturned Capital Contributions made by such Class A
Limited Partner to the Partnership, less (ii) any
distributions paid to such Class A Limited Partner under Section
5.1 hereof, as determined by the General Partner.

 

 

2.18  
Property shall mean that
certain tract(s) or parcel(s) of land described on Exhibit
“B”, which is attached to this Agreement and made a
part hereof for all purposes.

 

2.19  
Winding Up shall mean the
period following dissolution of the Partnership after which its
business is not continued as set forth in Article XII.

 

ARTICLE III

CAPITAL CONTRIBUTIONS AND

PARTNERSHIP INTERESTS

 

3.1    
Initial Contributions. The
capital to be contributed to the Partnership by the General Partner
and all the Limited Partners shall be cash, property, goods or
services as the General Partner shall agree. The initial capital to
be contributed by each Partner, General and Limited, shall be the
sum set opposite his or her name in the attached Exhibit "A." Each
Partner shall be personally liable to the Partnership for the full
amount of his or her initial capital contribution in the amounts
set forth on Exhibit “A”.

 

3.2    
Additional Contributions. If
additional capital is needed for the purposes of the Partnership as
determined by the General Partner, subject to any limitations as
may be hereinafter provided, after contributions have been made by
the Partners pursuant to Section 3.1 hereof, then the General
Partner shall attempt to borrow such additional capital on behalf
of the Partnership first from any one or more of the Partners and
then from any third party. Any such loans shall be on commercially
reasonably terms, and if from any one or more of the Partners, such
loan or loans shall bear interest at the rate of fifteen percent
(15%) per annum.

 

 

3

 

 

ARTICLE IV

PROFITS AND LOSSES

 

4.1           
Allocations. Allocations of
income, gains, deductions, losses and credits among the General
Partner and the Limited Partners shall be determined by the
percentage set opposite his or her name in Exhibit
“A”.

 

4.2           
Transfer - Transferee
Allocations. If a Partnership Interest is transferred in
accordance with Article X during any year, the income, gains,
losses, and deductions allocable in respect to that Partnership
Interest shall be prorated between the transferor and the
transferee on the basis of the number of days in the year that each
was the holder of that Interest, without regard to the results of
the Partnership operations during the period before and after the
transfer, unless the transferor and transferee agree to an
allocation based on the result as of the record date of transfer
and agree to reimburse the Partnership for the cost of making and
reporting their agreed allocation.

 

4.3           
Recapture. In the event that
the Partnership recognizes income, gain, or addition to tax by
virtue of the recapture of any previously deducted or credited
item, such recaptured income or gain or addition to tax shall be
allocated to the Partners in the same percentage as allocated at
the time of its deduction.

 

ARTICLE V

CASH DISTRIBUTIONS

 

5.1           
Cash Distributions. In
accordance with the Budgets, or subject to the approval of the
Consultants, the General Partner shall determine the amount of net
cash flow and/or capital proceeds of the Partnership after payment
of expenses and the establishment of appropriate and reasonable
reserves determined by the General Partner in accordance with any
Partnership loan (collectively, the “Distributable Cash”),
such Distributable Cash to be distributed, subject to withholding
required by federal, state, local, or foreign authority, to the
Partners in amounts and at such times as provided in the Budgets,
or determined to be appropriate by the General Partner and the
Consultants to be no less frequently than quarterly in the
following manner and order of priority:

 

(1)

First, any loans to
the Partnership made by a mortgagee or any third party, whether or
not secured by a mortgage on the Property shall be
paid;

 

(2)

Second, any loans
to the Partnership made by any Partner shall be paid;

 

(3)

Third, the
Preferred Return to the Class A Limited Partner shall be paid to
such Partner:

 

(4)

Fourth, the initial
capital and any additional capital contributions of the Class A
Limited Partner shall be repaid to such Class A Limited Partner:
and

 

 

4

 

 

(5) 

Fifth, the
remainder shall be distributed to the Partners in accordance with
their respective Partnership Interest, pari passu, as they may
exist from time to time.

 

ARTICLE VI

OWNERSHIP OF PARTNERSHIP PROPERTY

 

6.1           
The Property and all other real property, including all
improvements placed or located thereon, and all personal property
acquired by the Partnership shall be owned by the Partnership, such
ownership being subject to the other terms and provisions of this
Agreement. Each Partner hereby expressly waives the right to
require partition of any Partnership property or any part
thereof.

 

ARTICLE VII

BOOKS AND RECORDS

 

7.1           
Elections. The Partnership
shall elect as a fiscal year the calendar year. The Partnership
shall elect to be taxed on such method of accounting as a Majority
in Interest of Limited Partners shall determine. The Partnership
shall not elect to be taxed other than as a
partnership.

 

7.2           
Capital Accounts of
Partners. The Partnership shall maintain a capital account
for each Partner, the initial balance of each of which shall be
zero. Each Partner's capital account shall be increased (1) by any
income and gains allocated to that Partner for federal income tax
purposes pursuant to Article IV of this Agreement, and (2) by the
amount of cash contributed to the Partnership by that Partner. The
Partner's capital account shall be decreased (1) by any deductions
and losses allocated to that Partner for federal income tax
purposes pursuant to Article 4 of this Agreement, and (2) by the
amount of cash distributed by the Partnership to that
Partner.

 

7.3           
Financial Statements. The
General Partner shall cause to be prepared on a timely basis
quarterly and annual statements showing the financial condition of
the Partnership, copies of which shall be transmitted to all
Partners.

 

7.4           
Tax Returns. The General
Partner shall cause the Partnership to file all tax and information
returns required of the Partnership and to furnish to the Limited
Partners the tax information required by them for federal, state
and local tax purposes in a timely fashion.

 

7.5           
Maintenance and Inspection of
Books. The Partnership shall maintain a complete and
accurate set of books, records, and supporting documents. The books
of account and all other financial records of the Partnership shall
be kept at the Partnership's principal place of business, and may
be inspected at any reasonable time by the Limited Partners or
their representatives.

 

7.6           
Bank Accounts, Funds and
Assets. The funds of the Partnership shall be deposited in
such bank or banks as the General Partner shall deem appropriate.
Subject to the provisions of this Agreement, the funds may be
withdrawn only by the General Partner or its duly authorized
agents. The General Partner shall have a fiduciary responsibility
for the safekeeping and use of all funds of the Partnership,
whether or not in its immediate possession or control, and it shall
not employ, or permit another to employ, the funds or assets in any
manner, except for the exclusive benefit of the Partnership. The
General Partner shall not commingle or permit the commingling of
the funds of the Partnership with the funds of any other
person.

 

 

5

 

 

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

 

8.1           
Admission of Limited
Partners. No additional Limited Partners shall be admitted
to the Partnership except upon amendment of this Agreement,
although substituted Limited Partners may be admitted pursuant to
Section 10 below.

 

8.2           
Participation in Management.
Subject to the Major Decisions, no Limited Partner shall have the
right, power, or authority to take any part in the control or
management of, or to transact any business for, the Partnership, or
to sign for or bind the Partnership in any manner.

 

8.3           
Limited Liability. No
Limited Partner shall be liable for losses, debts, or obligations
of the Partnership in excess of his or her Initial Capital
Contribution, plus his or her undistributed share of the
Partnership profits.

 

8.4           
Participation in Other
Activities. No Limited Partner, or any officer, director,
shareholder, or other person holding a legal or beneficial interest
in any Limited Partner, shall, by virtue of the interest in the
Partnership, be in any way prohibited or restricted from engaging
in, investing in, or possessing an interest in any business
activity of any nature or description, including those which may be
equivalent to or in competition with the Partnership. Neither the
Partnership nor any Partner shall have any right by virtue of this
Agreement or any relationship created by this Agreement in or to
such other ventures or activities or to the income or proceeds
derived from them.

 

8.5           
General Rights and Limitations of
the Limited Partners. A Limited Partner shall not
be:

 

(1)            Personally
liable because of his or her Interest in the Partnership for
any losses of any other Limited Partner:

 

(2)

Entitled to be paid
any salary or to have a Partnership drawing account;

 

(3)

Entitled to any
interest on his or her Initial Capital Account or balance in his or
her capital account.

 

(4)            

Unless specifically
provided herein, entitled to priority over any otherLimited
Partners.

 

8.6           
Voting. Each Limited Partner
shall be entitled to a vote in all matters for which this Agreement
gives Limited Partners the right to vote, consent, or agree. Each
Limited Partner's vote shall be equal in percentage to the ratio
that his or her Partnership Interest bears to one hundred percent
(100%).

 

8.7           
Limitations on
Transferability. The ownership interest in the Partnership
owned by a Limited Partner shall not be transferable except under
the conditions set forth in Article X of this
Agreement.

 

 

 

6

 

 

ARTICLE IX

MANAGEMENT BY THE GENERAL PARTNER

 

9.1           
Management. The powers of
the Partnership shall be exercised by or under the authority of,
and the business and affairs of the Partnership shall be managed
under the direction of the General Partner. The General Partner
need not be a resident of the State of Texas. Any Person dealing
with the Partnership, other than a Limited Partner, may rely on the
authority of the General Partner and its officers in taking any
action in the name of the Partnership without inquiry into the
provisions hereof or compliance herewith, regardless of whether
that action is actually taken in accordance with the provisions of
this Partnership Agreement.

 

9.2           Powers
and Duties of the General Partner. Subject to the other
provisions of this Agreement, the General Partner shall have all
the powers and duties necessary or incidental to the proper
administration of the affairs of the Partnership and may, at the
Partnership’s expense, do all such acts and things deemed by
it to be necessary or appropriate in furtherance of the
Partnership’s purpose. Except as otherwise provided in this
Agreement, the General Partner shall have sole authority to cause
the development of the Property and otherwise take actions on
behalf of the Partnership. Notwithstanding anything to the contrary
herein, the General Partner shall have complete authority to
operate and manage the business of the Partnership so long as such
operation and management is in accordance with the Budgets.
Further, notwithstanding anything to the contrary herein, the
General Partner is not guaranteeing the completion of the Property
in accordance with the Budgets, and the General Partner shall not
be liable if such becomes unfeasible due to causes not within its
reasonable control or not caused by its negligence or greater
fault, including, but not limited to, economic or market
conditions.

 

9.3           Insurance.
At the expense of the Partnership, the General Partner shall cause
the Partnership to maintain adequate and reasonable insurance
covering the injury or death of employees or others, as well as
insurance against fire and other risks, and to adjust all losses
and claims pertaining to or arising out of such
insurance.

 

9.4           Employment
of Others. The General Partner shall be authorized to
appoint, employ, or contract with, at the expense of the
Partnership, generally any Person it may deem necessary or
desirable for the transaction of the business of the Partnership.
Specifically, the General Partner shall appoint, employ or contract
with a project manager (the “Project Manager”) to
provide field supervision of the development and contraction of the
Project. The Project Manager shall be compensated as provided in
the Budgets.

 

9.5           Budget
and Development Plan. The General Partner shall periodically
update the Budget and Development Plan, as approved by a Majority
in Interest of Limited Partners, and provide copies thereof to the
other Limited Partners.

 

 

 

7

 

 

9.6           Annual
Budget. The General Partner agrees to prepare and deliver to
the Partners within forty-five (45) days after the execution of
this Agreement with respect to the initial Fiscal Year, and at
least forty-five (45) days prior to the beginning of each
subsequent Fiscal Year, a proposed Annual Budget for such Fiscal
Year for the management and operation of the Partnership and the
acquisition, development, management, operation, financing and sale
of the Property, setting forth (a) any proposed expenditures and
reserves for the forthcoming Fiscal Year, (b) any discretionary
expenditures which the General Partner determines to be necessary
or advisable to maintain the Property or facilitate the development
and sale of lots developed on the Property, and (c) a projected
cash flow analysis for the forthcoming Fiscal Year setting forth
the estimated receipts and expenditures of the Partnership. Each
Partner shall have a period of twenty (20) days to review and
approve the proposed Annual Budget for the forthcoming Fiscal Year.
Once approved by a Majority in Interest of Limited Partners, such
approved Annual Budget for the period of time covered thereby shall
be binding upon the Partners unless otherwise mutually agreed.
Notwithstanding the foregoing, (i) should any Partner fail to
notify the General Partner of its disapproval of the proposed
Annual Budget prior to the expiration of the twenty (20) day review
period described above, the proposed Annual Budget shall be deemed
to be approved by such Partner, and (ii) should any Partnership
lender require that the Partnership make expenditures or establish
reserves during any Fiscal Year, all such required expenditures and
reserves shall be deemed Approved by a Majority in Interest of
Limited Partners after such lender requirements are sent to the
Partners. The General Partner may, from time to time, submit
proposed revisions to the Annual Budget, and the Partners shall
consider and review such proposed revisions in the manner and time
frames set forth above in order to determine whether to approve
same, or to make such revisions thereto as they may mutually agree,
or to agree not to revise the Annual Budget.

 

9.7           Approval
of Budget and Development Plan and Annual Budget.
Notwithstanding anything to the contrary provided in this
Agreement, the Budget and Development and each Annual Budget shall
be submitted to the Consultants prior to submitting same to the
Partners for approval. If approved by the Consultants as providing
in the Consultant Agreement, then the General Partner shall submit
same to the Partners for approval as provided in Sections 9.5 and
9.6 hereof.

 

9.8           Licenses.
The General Partner shall, at its own expense, qualify to do
business and obtain and maintain such licenses as may be required
for the performance by the General Partner of its services
hereunder.

 

9.9           Third
Party Obligations. All debts and liabilities to any third
Persons incurred by the General Partner in the authorized course of
its operation and management of the Property shall be the debts and
liabilities of the Partnership only and the General Partner shall
not be liable for any such obligations by reason of its management,
supervision and direction of the Property for the Partnership. The
General Partner may so inform third parties with whom it deals on
behalf of the Partnership and may take any other reasonable steps
to carry out the intent of this Section 9.9.

 

 

 

8

 

 

9.10           Indemnification.
The Partnership shall indemnify, save harmless and pay all
judgments arising against the General Partner and its shareholders,
directors, employees and agents from any cost, expense, claim,
liability or damage incurred by reason of such Person’s
relationship to the Partnership or any act performed or omitted to
be performed by them in connection with this Article IX or the
business of the Partnership, including attorney’s fees and
costs incurred by them in connection with the defense of any action
based on any such act or omission, which attorneys’ fees and
costs may be paid as incurred, [including all such liabilities
under any Federal or state securities act (including the Securities
Act of 1933, as amended)] as permitted by law, except that the
Partnership shall have no indemnification obligation hereunder with
respect to any act or omission of any Person that constitutes
willful misconduct, gross negligence, or was outside the scope of
such Person’s authority under this Article VI. All judgments
against the Partnership with respect to which any Person is
entitled to indemnification may only be satisfied from the
Partnership’s assets. Any Person entitled to be indemnified
hereunder shall also be entitled to recover its attorney’s
fees and costs of enforcing this indemnity from the
Partnership’s assets.

 

9.11           Power
of Attorney. By the execution of this Agreement, each
Limited Partner and any assignee or transferee of a Limited
Partner's Partnership Interest irrevocably constitutes and appoints
the General Partner his or her true and lawful attorney-in-fact and
agent to execute, acknowledge, verify, swear to, deliver, record,
and file in that Partner's or assignee's name, place and stead, all
documents which may from time to time be required by any federal or
state law, including the execution, verification, acknowledgment,
delivery, filing and recording of this Agreement, as well as all
authorized amendments to any such document, all assumed name
certificates, documents, bills of sale, assignments, and other
instruments or conveyances, leases, contracts, loan documents
and/or counterparts of any such document, and all other documents
that may be required to effect a continuation of the Partnership
and that the General Partner deems necessary or reasonably
appropriate. The power of attorney granted in this paragraph shall
be deemed to be coupled with an interest, shall be irrevocable and
survive the death, bankruptcy, incompetency or legal disability of
a Limited Partner, and shall extend to that Limited Partner's heirs
successors and assigns. Each Limited Partner agrees to be bound by
any representations made by the General Partner acting in good
faith pursuant to the Power of Attorney, and each Limited Partner
waives any and all defenses that may be available to contest,
negate, or disaffirm any action of the General Partner taken in
good faith under this Power of Attorney.

 

9.12           Limitations
on Power and Authority of the General Partner. It is hereby
understood and agreed by the General Partner that it shall not take
any of the following actions on behalf of the Partnership, the
Partners or the Property, which actions shall be deemed Major
Decisions for purposes of this Agreement, unless such Major
Decisions have been approved by a Majority in Interest of the
Limited Partners:

 

(a) Any act which would
make it impossible to carry on the purpose and ordinary business of
the Partnership;

 

(b) Confession of a
judgment against the Partnership;

 

 

9

 

 

(c) Borrow or contract
for or otherwise create any indebtedness for which any Limited
Partner shall be personally liable;

 

(d) Acquire any
property other than the Property, except as provided in the Budget
and Development Plan;

 

(e) Settle any claim
for insurance proceeds if the loss thereunder exceeds Twenty
Thousand and No/100 Dollars ($20,000.00);

 

(f) Settle any claims
for payment of awards or damages arising out of the exercise of
eminent domain by any public or governmental
authority;

 

(g) Lend funds
belonging to the Partnership or another Partner to a Partner or to
any third party, or extend to any person, firm or corporation
credit on behalf of the Partnership except in accordance with the
terms of this Agreement, or guarantee the debt or obligations of
any Person;

 

(h) Other than in
connection with the development of the Property into lots to be
sold individually or in groups, partition all or any portion of the
Property or any other property of the Partnership, or file any
complaint or institute any proceeding at law or in equity seeking
such partition;

 

(i) Do any act in
contravention of this Agreement;

 

(j) Do any act or take
any action which is required herein to be approved by a Majority
Interest of Limited Partners or by unanimous consent of the Limited
Partners unless and until such act and/or action is approved by a
Majority Interest of Limited Partners or by unanimous consent of
the Limited Partners, as the case may be;

 

(k) Possess the
Property or any other Partnership assets or assign its rights in
the Property or any other Partnership assets for other than a
Partnership purpose, or use the Property or any other Partnership
assets except for the account and benefit of the
Partnership;

 

(l) Settle, or cause
the settlement of, any claims, suits, debts, demands or judgments
against the Partnership in excess of $10,000;

 

(m) Cause the sale by
the Partnership of any portion of the Property, other than the sale
of lots in the ordinary course of business;

 

(n) Admit, or cause the
admission, of any additional Limited Partners to the
Partnership;

 

(o) Incur any
indebtedness on behalf of the Partnership in excess of amounts as
provided in the Budget and Development Plan;

 

(p) Revise the Budget
and Development Plan if the resulting changes would cause the costs
of any line item on the Budget and Development Plan to be increased
by more than 10%;

 

 

10

 

 

(q) Withhold, as
reserves, more than 25% of the portion of the proceeds from the
sale of any portion of the Property;

 

(r) Incur any
obligation or make any expenditure on behalf of the Partnership,
which, when added to other expenditures, exceeds the amounts set
forth therefore in the appropriate line item of the Budget and
Development Plan by more than 10%;

 

(s) Any revision to or
deviation from the Budget and Development Plan which decreases by
more than 10% the proposed selling price for any lot or shall
otherwise cause the gross income of the Partnership projected in
the Budget and Development Plan to decrease by more than 10% for
any period;

 

(t) The institution, or
causing the institution of, any legal action by the Partnership,
including without limitation, any lawsuit, arbitration proceeding,
or bankruptcy or similar filing;

 

(u) Making payments to
or entering into any contracts with the General Partner or any
affiliate of the General Partner other than as specified herein or
the Budget and Development Plan;

 

(v) Any act or
transaction outside the ordinary course of the Partnership’s
business;

 

(w) Making any other
decision or taking any other action which, by the provisions of
this Agreement, is required to be approved by a Majority in
Interest of Limited Partners; and

 

(x) Modify or amend any
agreement, contract or other action involving a Major Decision, as
defined below (previously approved by a Majority in Interest of
Limited Partners), without the prior written approval of the other
Limited Partners.

 

9.13           
Inquiries. In no event shall
any person dealing with the General Partner or any of its
representatives with respect to any business or property of the
Partnership be obligated to ascertain that the provisions of this
Agreement have been complied with or be obligated to inquire into
the necessity or expedience of any act or action of such persons.
Every contract, agreement, security agreement, promissory note, or
other instrument or document executed by either the General Partner
or its representatives with respect to any business or property of
the Partnership shall be conclusive evidence in favor of any and
every person relying on or claiming thereunder that (1) at the time
of the execution and/or delivery of the instrument or document this
Agreement was in full force and effect; (2) the instrument or
document was duly executed in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership
and all of the Partners, and (3) the General Partner or its
representatives were duly authorized and empowered to execute and
deliver any such instrument or document for and on behalf of the
Partnership.

 

 

 

11

 

 

9.14           
Tax Matters Partner. The
General Partner is hereby designated as a Tax Matters Partner as
defined in Section 6231 of the Internal Revenue Code. In the event
that an audit of the Partnership occurs, and the Tax Matters
Partner does not reach a settlement agreement with the Internal
Revenue Service, the Tax Matters Partner shall in its sole
discretion choose whether to file a petition for readjustment of
the Partnership items with either the Tax Court, the District Court
of the United States for the district for which the Partnership's
place of business is located, or the Court of Claims.

 

9.15           
Obligations Not Exclusive.
The General Partner shall be required to devote only such time as
is reasonably necessary to manage the Partnership's business, it
being understood that the General Partner has other business
activities and therefore shall not devote their time exclusively to
the Partnership. Neither the General Partner, or any officer,
director, shareholder, or other person holding a legal or
beneficial interest in the General Partner, shall, by virtue of the
interest in the Partnership, be in any way prohibited or restricted
from engaging in, investing in, or possessing an interest in any
business activity of any nature or description, including those
which may be equivalent to or in competition with the Partnership.
Neither the Partnership nor any Partner shall have a right by
virtue of this Agreement or any relationship created by this
Agreement in or to such other ventures or activities or to the
income or proceeds derived from them.

 

9.16           
Liability of General Partner to
Limited Partners. The General Partner, its representatives,
employees, and agents shall not be liable to the Partnership or to
the Limited Partners for losses sustained or liabilities incurred
as a result of any error in judgment or mistake of law or fact,
including simple negligence, or for any act done or omitted to be
done in good faith in conducting the Partnership business, unless
the error, mistake, act, or omission was performed or omitted
fraudulently or constituted gross negligence or willful
misconduct.

 

9.17           
Consultants. The General
Partner shall consult with and obtain the advice of the Consultants
in the development and construction of the Project until such time
as the Project is completed or as otherwise determined by the
General Partner. Each Consultant shall be paid by the Partnership a
monthly fee of $10,000 during the development and construction of
the Project and as long as such as such person is actively
participating in the oversight and supervision of the construction
of the Project.

 

ARTICLE X

TRANSFERS OF PARTNERSHIP INTEREST

 

10.1           
Transfer of General Partner’s
Interest. The General Partner may not, without the approval
of a Majority in Interest of Limited Partners, transfer its
Partnership Interest or any part thereof.

 

10.2           
Withdrawal or Removal of General Partner.

 

(1)           

The General Partner
may:

 

(a) 

resign or withdraw
from the Partnership as General Partner without the consent of the
Limited Partners; or

 

 

12

 

 

(b) 

be removed at any
time, for cause, by the affirmative vote of a Majority in Interest
of Limited Partners. For the purposes of this provision,
“cause” shall mean action or inaction by the General
Partner amounting to gross negligence or wilful fraudulent
misconduct.

 

(2) 

Immediately on
withdrawal or removal of the General Partner, a successor General
Partner shall be selected by an affirmative vote or written consent
of a Majority in Interest of Limited Partners. The removed or
withdrawing General Partner shall turn over all Partnership books
and records to the new General Partner within ten (10) days of
removal or departure.

 

(3) 

A General Partner
departing voluntarily or having been removed shall become a Limited
Partner upon the selection of a successor General Partner, as
provided above, and shall continue to receive its share of any
Partnership distributions arising out of its interest in the
Partnership.

 

10.3           
Substituted Limited Partner.
Each Limited Partner hereby consents to the admission as a
substituted Limited Partner of any person complying with Section
10.8. When compliance with this Agreement has been shown, the
General Partner shall cause the necessary amendments to be filed as
required by law.

 

10.4           
Transfer On Death of a Limited
Partner. On the death of a Limited Partner, his or her
successor in interest shall succeed to the decedent's Partnership
Interest, and shall be liable for the obligations of the decedent,
but shall not become a substituted Limited Partner until compliance
with Section 10.6 and 10.8.

 

10.5           
Withholding of
Distributions. From the date of the receipt of any
instrument relating to the transfer of a Partnership Interest, or
at any time the General Partner is in doubt as to the person
entitled to receive distributions in respect of any such
Partnership Interest, the General Partner may withhold any such
distributions until the transfer is completed or abandoned or any
dispute is resolved.

 

10.6           
Prohibition Against
Transfer by Limited
Partners. Except as set forth below, no Limited Partner
shall sell, assign, transfer, encumber, or otherwise dispose of any
interest in the Partnership without the written consent of the
General Partner and a Majority in Interest of Limited Partners.
Notwithstanding the foregoing, and subject to Section 10.8 below, a
Limited Partner may sell or otherwise transfer all or any portion
of a Partnership Interest to the spouse or any direct ascendants or
descendants of the Limited Partner or to a trust, corporation,
partnership, or other entity in which all of the beneficial
interest is held by or for the Limited Partner, spouse, ascendants,
or descendants, provided the transfer would not result in a
termination of the Partnership.

 

 

 

13

 

 

10.7           
Permitted Sales

 

(1) 

In the event a
Limited Partner receives a bona fide offer (the
“Offer”) for the purchase of all or a part of his or
her interest in the Partnership (the “Offered
Interest”), the Limited Partner shall either refuse the Offer
or give the General Partner written notice setting out full details
of the Offer, which notice shall, among other things, specify the
name of the offeror, specify the Offered Interest covered by the
Offer, terms of payment, including whether the Offer is for cash or
credit, and, if on credit, the time and interest rate, as well as
any and all other consideration being received or paid in
connection with the proposed transaction, as well as any and all
other terms, conditions, and details of the Offer.

 

(2) 

Upon receipt of the
notice with respect to the Offer, the General Partner shall notify
in writing the other members of the Limited Partnership regarding
the terms of the Offer. The Partners shall have the option to match
the Offer and purchase the Offered Interest as hereinafter
provided. Should any individual Partner or group of Partners decide
to exercise the option of purchase, notification of this decision
shall be given in writing to the General Partner to be transmitted
to the selling Limited Partner within ten (10) days of notification
by the General Partner, and the sale and purchase of the Offered
Interest shall be closed within thirty (30) days thereafter. The
entire Offered Interest must be purchased and shall be purchased
prorata among the willing Partners, except as otherwise agreed by
the willing Partners. If none of the Partners decide to exercise
this option of purchase, the selling Limited Partner shall be so
notified in writing by the General Partner and shall be free to
sell the Offered Interest. The sale, if permitted, shall be made
strictly upon the terms and conditions of the Offer and to the
person described in the required notice from the selling Limited
Partner to the General Partner.

 

(3) 

Any assignment made
to anyone not already a Partner shall be effective only to give the
assignee the right to receive the share of profits to which the
assignor would otherwise be entitled, shall not relieve the
assignor from liability for additional contributions of capital,
shall not relieve the assignor from liability under the provisions
of this Agreement, and shall not give the assignee the right to
become a substituted Limited Partner. Neither the General Partner
nor the Partnership shall be required to state the tax consequences
to a Limited Partner or to a Limited Partner or to a Limited
Partner’s assignee arising from the assignment of a Limited
Partners Interest.

 

10.8           
Conditions of Effective
Transfer. A purported transfer of a Partnership Interest by
a Limited Partner shall be valid as to the Partnership and the
General Partner on the first day of the month following the month
in which (1) the General Partner has consented in writing to the
transfer; and (2) the General Partner is satisfied that the
following conditions, any of which may be waived by the General
Partner, have been met:

 

 

14

 

 

(a) 

The transferor and
transferee have agreed to provide the Partnership with the
information in their possession required to permit the Partnership
to make any basis adjustments required by the Internal Revenue Tax
Code;

 

(b) 

The transferee has
delivered an instrument satisfactory to the General Partner by
which the transferee accepts and adopts the terms and provisions of
this Agreement, including the assumption of any obligations of the
transferor to the Partnership;

 

(c) 

The transferor has
agreed to pay a reasonable fee to reimburse the Partnership for the
costs incurred in connection with the admission of the transferee
as a substitute limited partner, including any costs incurred or to
be incurred by the Partnership in connection with the basis
adjustments and additional accounting operations
required;

 

(d) 

The transferor has
delivered to the General Partner an opinion of counsel in form and
substance satisfactory to the General Partner to the effect that
neither the transfer nor any offering in connection with the
transfer violates any provision of any federal or state securities
or comparable law;

 

(e) 

The General Partner
has determined that the transfer would not cause a termination of
the Partnership, within the provisions of the Internal Revenue
Code;

 

(f) 

The transfer is
evidenced by an instrument in writing signed by the transferor and
transferee stating, among other things, that the transferor has the
right to transfer, and the transferee has the right to acquire, the
transferor's Partnership Interest, and acknowledging that the
transferee is bound by the terms of this Agreement;
and

 

(g) 

The transferee has
delivered a statement in form and substance reasonably satisfactory
to the General Partner making appropriate representation and
warranties with respect to the satisfaction of applicable federal
and state securities laws.

 

10.9           
Assignments by Operation of
Law. If any Limited Partner shall die, with or without
leaving a will, become non compos mentis, or become bankrupt or
insolvent, or if a corporate or partnership Limited Partner
dissolves during the Partnership term, the legal representatives,
heirs, and legatees, and the spouse, if the Partnership Interest of
the Limited Partner has been community property of the Partner and
the Partner's spouse, bankruptcy assignees, or corporate or
partnership distributees shall not become substitute Limited
Partners but shall have, subject to the other terms and provisions
thereof, such rights as are provided with respect to such persons
under the Act; provided, however, such legal representatives, heirs
and legatees, bankruptcy assignees and corporate or partnership
distributees may become substitute Limited Partners with the
consent of the General Partner.

 

 

 

15

 

 

10.10                      
Expenses of Transfer. The
person acquiring Partnership Interest pursuant to any of the
provisions of this Article X shall bear all costs and expenses
necessary to effect a transfer of that Partnership Interest
including, without limitation, reasonable attorney's fees incurred
in preparing amendments to this Agreement and Certificate of
Limited Partnership to reflect the transfer or acquisition and the
cost of filing the amendments with the appropriate governmental
officials.

 

10.11                      
Amendment of Certificate and
Agreement of Limited Partnership. For the admission to the
Partnership of any Partner, the General Partner shall take all
steps necessary and appropriate to prepare and record an amendment
of the Certificate and the Agreement of Limited Partnership. For
this purpose, the General Partner may exercise the powers of
attorney granted pursuant to Article 9.11. An amendment of this
Agreement required to add a new Limited or General Partner need
only be filed at the end of the month in which each new Limited or
General Partner is to be added.

 

10.12                      
Survival of Liabilities. No
sale or assignment of a Partnership Interest, even if it results in
substitution of the assignee or vendee as a Limited Partner, shall
release the assignor or vendor from those liabilities to the
Partnership that survive the assignment or sale as a matter of
law.

 

ARTICLE XI

AMENDMENTS

 

11.1           
Procedure. Amendments to
this Agreement may be proposed by the General Partner or by a
Majority in Interest of Limited Partners. The General Partner shall
submit any such proposed amendment to all of the Partners, and, if
within such reasonable period of time as may be specified in the
proposal, a Majority in Interest of Limited Partners and the
General Partner shall have given their written consent to the
amendment, the proposed amendment shall become effective as of the
date specified in the proposal. Each Limited Partner shall promptly
execute or cause to be executed one or more amendments to this
Agreement and such other documents as may be required under the
laws of the jurisdictions in which the Partnership does business at
the time.

 

11.2           
Effect. Any amendment to this Agreement
that increases the liability of any Partner, or changes the
contributions required by any Partner or the rights of any Partner
in interest in the profits, losses, deductions, credits, revenues,
or distributions of the Partnership, rights upon dissolution, or
any voting rights specifically set forth in this Agreement, shall
become effective as to that Partner only on his or her written
acceptance of the amendment.

 

ARTICLE XII

DISSOLUTION AND TERMINATION

 

12.1           
Dissolution and Termination of the
Partnership. The Partnership shall be dissolved upon the
occurrence of any of the following:

 

 

 

16

 

 

(1) 

The bankruptcy or
insolvency of the General Partner or the occurrence of any other
event that would permit a trustee or receiver to acquire control of
the affairs of General Partner and the failure of a Majority of
Interest of limited Partners to elect another General
Partner;

 

(2) 

The withdrawal from
the Partnership, death, or insanity of the General Partner and
failure of a Majority in Interest of Limited Partners to select a
successor General Partner;

 

(3) 

Agreement of the
General Partner and a Majority in Interest of Limited Partners to
dissolve;

 

(4) 

Any disposition of
all of the property of the Partnership;

 

(5) 

The termination of
the Partnership pursuant to Section 1.6; or

 

(6) 

The occurrence of
any other circumstances that by law would require the Partnership
to be dissolved.

 

The
dissolution shall be effective on the day on which the event
causing dissolution occurs, but the Partnership shall not terminate
until its assets have been distributed in accordance with the
provisions of this Agreement.

 

12.2           
Continuation of Business Enterprise.

 

(1) 

On dissolution of
the Partnership pursuant to Section 12.1 (1) or (2), the Partners
may elect to continue the Partnership by the vote of the Majority
in Interest of the Limited Partners taken within ninety (90) days
of any event of dissolution, with any election to continue being
binding on all the Partners. If they elect to continue the
Partnership, the Partners shall also by vote of the Majority in
Interest of Limited Partners elect a new general
partner.

 

(2) 

On dissolution of
the Partnership after which the business enterprise of the
Partnership is not continued, the liquidating trustee, which shall
be a General Partner if the dissolution is one described in Section
12.1 (3), (4) or (5) and otherwise shall be a person selected by a
Majority in Interest of Limited Partners or by a court having
jurisdiction over the affairs of the Partnership, shall proceed
diligently to wind up the affairs of the Partnership and distribute
its assets. The liquidating trustee shall use its best efforts to
sell the equipment and otherwise convert Partnership assets into
cash as promptly as possible but in an orderly and businesslike
manner so as not to involve undue sacrifice. No Partner shall have
any right to demand or receive property other than cash during
Winding Up.

 

 

 

17

 

 

12.3           
Winding Up. The cash
proceeds of the Partnership shall be applied or distributed on the
winding up of the Partnership in the following order of
priority:

 

(1) 

In payment of all
liabilities of the Partnership to creditors other than Partners. If
any liability is contingent or uncertain in amount, a reserve equal
to the maximum amount for which the Partnership could be reasonably
held liable shall be established. On the satisfaction or other
discharge of that contingency, the amount of the reserve remaining,
if any, will be treated as income to the extent previously treated
as a deduction.

 

(2) 

In payment of any
loans to the Partnership by the Partners.

 

(3) 

The priority
detailed in Section 5.1.

 

ARTICLE XIII

MISCELLANEOUS

 

13.1           
Meetings of Partners.
Meetings of the Partners may be called by the General Partner or
the Limited Partners holding more than fifty percent (50%) of the
then outstanding Partnership Interest for any matters for which the
Partners may vote as set forth in this Agreement, or for a report
from the General Partner on matters pertaining to the Partnership
business and activities. A list of the names and addresses and
percentage interest of all Limited Partners shall be furnished each
Limited Partner and shall be maintained as a part of the books and
records of the Partnership. Within seven (7) days after receipt of
a written request in compliance with the above terms, either in
person or by registered or certified mail, stating the purpose of
the meeting, the General Partner shall mail to all Partners written
notice of the place and purpose of such meeting to be held on a
date not less than fourteen (14) nor more than twenty-eight (28)
days after receipt of the request. When a vote of the Limited
Partners is called, the Limited Partners may vote at the meeting in
person or by proxy.

 

13.2           
Action without Meeting. Any
matter as to which the Limited Partners are authorized to take
action under this Agreement or by law may be taken by the Limited
Partners without a meeting and shall be as valid and effective as
action taken by the Limited Partners at a meeting assembled, if
written consents to the action by the Limited Partners (1) approve
the action and (2) are delivered to the General
Partner.

 

13.3           
Tax Returns. Each Partner
hereby agrees to execute promptly, together with acknowledgment or
affidavit, if requested by the General Partner, all such
agreements, certificates, tax statements, tax returns, and other
documents as may be required of the Partnership or its Partners by
the laws of the United States of America, the State of Texas, or
any other state in which the Partnership conducts or plans to
conduct business, or any political subdivision or agency
thereof.

 

 

 

18

 

 

13.4           
Notices. All notices,
offers, or other communications required or permitted to be given
pursuant to this Agreement shall be in writing and either delivered
by messenger, including overnight delivery services such as Federal
Express, Airborne Express, etc., or deposited in the United States
Mail, postage prepaid, addressed to the respective Partners at the
addresses appearing in the records of the General Partner. Notice
shall be deemed received on the earlier of actual receipt or three
(3) days after deposit into the care and custody of the United
States Mail. Any Limited Partner may change his or her address for
notice by giving notice in writing to the General Partner stating
the new address. The General Partner may change its address for
notice by giving written notice of the change to the Limited
Partners.

 

13.5           
Effective Law. This
Agreement and the rights of the Partners shall be governed by and
interpreted in accordance with the laws of the State of
Texas.

 

13.6           
Assigns. This Agreement
shall be binding on and shall inure to the benefit of the Partners
and their spouses as well as their respective legal
representatives, heirs, successors and assigns.

 

13.7           
Counterpart Execution. This
Agreement may be executed in multiple counterparts, each of which
shall be considered an original, but all of which shall constitute
one (1) instrument.

 

13.8           
Gender and Number. Whenever
the context requires, the singular shall include the plural and the
masculine shall include the feminine and neuter, as the
identification of the person, corporation, or other entity may
require.

 

13.9          
Severability. This Agreement is intended
to be performed in accordance with, and only to the extent
permitted by, all applicable laws, ordinances, rules, and
regulations of the State of Texas. If any provision of this
Agreement or its application to any person or circumstances shall,
for any reason and to any extent, be held invalid or unenforceable,
the remainder of this Agreement and the application of such
provision to other persons or circumstances shall not be affected
thereby, but rather shall be effective and in force to the greatest
extent permitted by law.

 

13.10    
   Confidentially. Except such disclosure
as requires by the laws of the State of Texas, the Partners and
their agents and employees shall keep confidential any and all
business affairs of the Partnership. The Partnership shall be
entitled to any remedy available at law should a Partner or his
agent or employee violate the terms hereof, including injunctive
relief by a court of competent jurisdiction.

 

IN WITNESS WHEREOF, the parties have
executed this Agreement to be effective as of the date and year
first above written.

 

 

 

 

19

 

 

	
 

	

GENERAL
PARTNER:

 

150
BLACK OAK GP, INC.,

a Texas
corporation

 

 

By:
__/s/ Jeffrey
Busch____________

       Jeffrey
Busch, President and

      Chief
Executive Officer

 

 

By:
_/s/ Joe
Fogarty_______________

       Joe
Fogarty, Vice President and

      Chief
Operating Officer

 

 

 

 

LIMITED
PARTNERS:

 

 

	

CCM DEVELOPMENT USA CORPORATION

a
Delaware corporation

By:
/s/ Jeffrey
Busch 

Name: 

Title: 

 

Address:  

 

 

facsimile:  

e-mail:                

 

 

20

 

 

	

AMERICAN REAL ESTATE INVESTMENTS.
LLC,

a
Missouri Limited Liability Company

By:
/s/ Tracy Weaver 

Name: 

Title: 

 

Address:  

 

 

 

facsimile:  

e-mail:                

 

 

	

 

WOODROW A. HOLLAND, TRUSTEE FOR THE FOGARTY FAMILY TRUST
II

 

 

____/s/Woodrow H.
Holland__________________

 

Address:  

 

 

 

facsimile:  

e-mail:                

 

 

 

 

 

 

 

 

21

 

 

EXHIBIT “A”

TO

150 CCM BLACK OAK, LTD. PARTNERSHIP AGREEMENT

 

General Partner

 

	
Names
and Address of

General Partner

	
 Partnership
Interest

	
 Capital
Contribution

	
 

	
 

	
 

	
150 Black Oak GP,
Inc.          

340
North Sam Houston Parkway East

Suite
140

Houston,
Texas 77060

	
 1%

	
 $100.00

	
 

	
 

	
 

 

 
Limited
Partners

 

	

Names and Addresses of

	
 

	
 

	

       Limited
Partners

	

Partnership
Interest

	

Capital
Contribution

	
 

	
 

	
 

	

CCM DEVELOPMENT USA

	
 

	
 

	

CORPORATION

	

59.5%

	

$4,300,000.00

	
 

	
 

	
 

	
 

	
 

	
 

	

AMERICAN REAL ESTATE

contribution

	

13%

 

	

property

 

	

INVESTMENTS LLC

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	

WOODROW A. HOLLAND, TRUSTEE

	
 

	
 

	

FOR THE FOGARTY FAMILY TRUST II

	

26.5%

contribution

	

property

 

 

 

 

22

 

 

EXHIBIT “B”

TO

150 CCM BLACK OAK, LTD. PARTNERSHIP AGREEMENT

 

Legal Description of Partnership Real PropertyBlueprint

 

Exhibit 10.2

 

November
7, 2014

 

This
Binding
Term Sheet is between the Limited Partners of the 150 CCM
Black Oak LP. The Limited Partners are Fogarty Family Trust II, CCM
Development USA Corp, and American Real Estate Investments, LLC
(“Partners”). Upon execution of this Binding Term
Sheet, the Limited Partnership Agreement (“LPA”)
between the Partners, dated March 20, 2014, will be amended to
incorporate the changes addressed below. All Partners understand
that this Binding Term Sheet is an amendment to the LPA in
accordance with Article XI of the LPA. As the General Partner is
comprised of two limited partners, the signatures of the applicable
limited partners will signify consent of the General
Partner.

 

CCM Funding and Bank Refinancing

 

CCM
shall fund the immediate equity needs of Black Oak, defined as
$7,440,697.29, as outlined below (the “Additional
Contribution”). This is the total funding requirement. Under
section 3.2 of the LPA, this Additional Contribution will accrue
interest at a 15% annual rate. This Additional Contribution will be
a loan with a standard 1st lien note and deed
of trust securing the repayment of the Additional Contribution. The
Partners will continue to work towards refinancing the Additional
Contribution with third party bank financing. If refinancing the
Additional Contribution does not occur by January 1, 2015, CCM
will receive an additional equity interest of  5%  (five
percent) in the form of a contribution of 5% from Fogarty Family
Trust II’s current ownership and no contribution from
American Real Estate Investments, LLC. If necessary, CCM will
guarantee repayment of any loan that refinances the Additional
Contribution, but the refinancing must be on reasonable and
competitive lending terms.

 

 

Repayment
of the Additional Contribution will occur upon the earliest of: 1)
refinancing with a third party bank loan; or 2) sale of Black Oak
Section One lots (expected in the 2nd Quarter of 2015).
In the event the Additional Contribution is not repaid from third
party bank refinancing or the sale of section one lots, and the
partnership has Distributable Cash, the Additional Contributions
shall be paid as provided in Section 5.1 (2) of the
LPA.

 

Use of Proceeds of Additional Contribution

 

	

Current
Liabilities

	

$76,887.26

	

Account
Payable

	

$87,597.09

	

A/P
F&R Professional Engineering

	

$70,443.90

	

N/P
Gina Gatto

	

$452,439.00
(Due 10/22/14)*

	

N/P
Ferrell & Holmes

	

$496,864.66
(Subject to extension)

	

N/P
Doughtie/ Gipson

	

$477,707.05
(Subject to extension)

	

N/P
Webb

	

$1,159,725.00
(Subject to extension)

	

N/P
Revere

	

$2,219,033.33

	

Development
Cost

	

$2,400,000.00
**

	
 

	
 

	

Total
Funding

	

$7,440,697.29

	

Expected
Builder Contribution

	

$1,300,000.00

	

Net
Funding

	

$6,140,697.29

 

*
Unless Extended.

 

**
Development costs on the above list will be paid as expenses (which
shall be approved by IAD), will be delivered directly to IAD, and
will be paid (when due) directly from an IAD bank
account.

 

 

 

Page 1 of
3

 

 

Partnership Contributions

As of
November 7, 2014, the Partnership Contributions shall be adjusted
to the following amounts:

 

	

CCM

	
 

	

63.5%

	

Fogarty
Family Trust II

	
 

	

28.5%

	

AREI

	
 

	

7.0%

	

General
Partner

	
 

	

1.0%

 

Partnership Distributions

Shall
remain the same. Return of Initial Capital and Preferred Return are
not affected.

 

Reimbursements

For
partnership costs that are reimbursable, the reimbursed costs shall
be distributed to the Partners per the above updated percentage
partnership contributions. The Partners acknowledge that the
attached September 12, 2014 pro-forma financial statements estimate
a total of $13,581,115 of reimbursable costs to the partnership.
[This number is comprised of the estimates of $11,776,115 from land
sale to the improvement district (streets, drainage and parks) and
$1,805,000 of Aqua Reimbursements (W & S)].

 

Development Costs to Consultants

ARETE
will also receive 3% of development costs and IAD will receive 2%
of development costs. Development costs are costs of the
partnership, excluding the cost to purchase the land.

 

Oversight Fees

 

1)

The consulting and
oversight fees in section 9.17 of the LPA prior to this Binding
Term Sheet shall be waived.

2)

Beginning November
1, 2014:

a.

Consultants
appointed by Fogarty Family Trust and CCM (currently ARETE and
Inter-American Development, LLC respectively) will each begin
receiving a $10,000 per month consulting and oversight fee;
and

b.

Consultant
appointed by AREI shall receive $2,000 per month consulting and
oversight fee.

3)

Consulting and
oversight fees shall only be payable after Outside Financing is
achieved (Outside Financing is refinancing of at least 65% of the
Additional Contribution and excludes financing from CCM, or
Inter-American Development, or affiliates of either); all
consulting and oversight fees shall be deferred until Outside
Financing.

4)

Upon Outside
Financing, the partnership shall pay AREI a one-time $40,000 fee to
represent reimbursement of all AREI expenses incurred on behalf of
partnership and acknowledgement that AREI will receive reduce
consulting and oversight fees for the life of the LPA.

 

 

Page 2 of
3

 

 

 

AGREED:

 

 

 

/s/ Joe
Fogarty______________                                                       

/s/ Tracy
Weaver______________

Fogarty Family
Trust
II                                        

American Real
Estate Investments, Inc.

 

 

 

 

/s/ Conn Flanigan____________

CCM
Development USA Corporation

 

 

 

 

 

(signature
page for Binding Term Sheet, November 7, 2014)

 

Page 3 of
3

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