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Home My WebLink About2011-107s;\legal\our documents\ordinances\11\black bear ordinance .doe ORDINANCE NO. 2011-107 AN ORDINANCE OF THE CITY OF DENTON, TEXAS AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO EXECUTE A CONTRACT OF SALE (HEREIN SO CALLED) BETWEEN THE CITY OF DENTON, AS BUYER AND BLACK BEAR PROPERTIES, LLC, AS SELLER, CONTEMPLATING (I) THE SALE AND PURCHASE OF AN APPROXIMATE 4.024 ACRE TRACT OF LAND, BEING LOCATED IN THE M. FORREST SURVEY, ABSTRACT NUMBER 417, CITY AND COUNTY OF DENTON, TEXAS, AND ALSO KNOWN AS 4001 E. MCKINNEY, DENTON, TEXAS ("REAL PROPERTY") AND (II) THE EXECUTION AND DELIVERY OF A TEMPORARY LEASE (HEREIN SO CALLED) OF THE REAL PROPERTY TO SELLER, FOR A PURCHASE PRICE OF NINE HUNDRED AND FORTY THOUSAND AND N0/100 DOLLARS ($940,000.00); AUTHORIZING THE CITY MANAGER, OR HIS DESIGNEE, TO EXECUTE AND DELIVER THE TEMPORARY LEASE AND ANY AND ALL OTHER DOCUMENTS NECESSARY TO ACCOMPLISH CLOSING OF THE TRANSACTIONS CONTEMPLATED BY THE CONTRACT OF SALE; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFORE; AND PROVIDING AN EFFECTIVE DATE. (MAYHILL ROAD WIDENING AND IMPROVEMENTS PROJECT) THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The City Manager, or his designee, is hereby authorized to execute the Contract of Sale, between the City of Denton and Black Bear Properties, LLC, in the form attached hereto and made a part hereof as Exhibit "A" (the "Contract"), with a purchase price of $940,000.00 plus closing costs as prescribed in the Contract, and any and all other documents necessary for the acquisition of the Real Property, as more particularly described therein, including without limitation, the Temporary Lease. The Real Property is being acquired to accommodate the requirements of the Mayhill Road Widening and Improvements project. SECTION 2. The City Manager is hereby authorized to make expenditures as set forth in the Contract of Sale. SECTION 3. That this ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the /2 day of , 2011. MARK A: B RROOAS, MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: (lk APP VED 47TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: l� Page SALegall0ur Documenlsl0rdinnnccsll IlBlack Scar Ordinance .dac s:\legal\our documents\contracts\l 1\black bear - contract of sale - final.doc CONTRACT OF SALE STATE OF TEXAS § COUNTY OF DENTON § 4 This Contract of Sale (the "Contract") is made this /,":'? day of , 2011, effective as of the date of execution hereof by Buyer, as defined herein (th `Effe ve Date"), by and between Black Bear Properties, LLC (referred to herein as "Seller") and the City of Denton, Texas, a Home Rule Municipal Corporation of Denton County, Texas (referred to herein as "Buyer"). RECITALS WHEREAS, Seller owns those certain lands being more particularly described in Exhibit "A", attached hereto and made a part hereof for all purposes, being located in Denton County, Texas (the "Land"); and WHEREAS, Seller desires to sell to City, and City desires to buy from Seller, the Land, together with any and all rights or interests of Seller in and to adjacent streets, alleys and rights of way and together with all and singular the improvements and fixtures thereon and all other rights and appurtenances to the Land (collectively, the "Property"). ARTICLE I SALE OF PROPERTY For the consideration hereinafter set forth, and upon the terms, conditions and provisions herein contained, Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase from Seller, the Property. ARTICLE II PURCHASE PRICE AND EARNEST MONEY 2.01 Purchase Price. The Purchase Price to be paid to Seller for the Property is the sum of Nine Hundred and Forty Thousand Dollars and No/100 ($940,000.00) (the "Purchase Price"). 2.02 Earnest Money. Buyer shall deposit the sum of Twenty Five Thousand and No/100 Dollars ($25,000.00), as Earnest Money (herein so called) with Title Resources, 1112 Dallas Drive, Suite 402, Denton, Texas, 76205 (the "Title Company"), as escrow agent, upon execution of this Contract by Seller and Buyer. All interest earned thereon shall become part of the Earnest Money and shall be applied or disposed of in the same manner as the original Earnest Money deposit, as provided in this Contract. If the purchase contemplated hereunder is consummated in accordance with the terms and the provisions hereof, the Earnest Money, together with all interest earned thereon, shall be applied to the Purchase Price at Closing. In all other events, the Earnest Money, and the interest accrued thereon, shall be disposed of by the Title Company as Contract of Sale Page 1 of 37 s:llegallour documents\contracts111\black bear - contract of sale - final.doc provided in this Contract. 2.03 Independent Contract Consideration. Within fourteen (14) calendar days after the Effective Date, as defined below, Buyer shall deliver to Seller a check in the amount of One Hundred and No/100 Dollars ($100.00) (the "Independent Contract Consideration"), which amount the parties hereby acknowledge and agree has been bargained for and agreed to as consideration for Seller's execution and delivery of the Contract. The Independent Contract Consideration is in addition to, and independent of any other consideration or payment provided in this Contract, is non-refundable, and shall be retained by Seller notwithstanding any other provision of this Contract. ARTICLE III TITLE AND SURVEY 3.01 Title Commitment. (a) Within twenty (20) calendar days after the Effective Date, Seller, at Seller's sole cost and expense, shall cause to be furnished to Buyer a current Commitment for Title Insurance (the "Title Commitment") for the Property, issued by Title Company. The Title Commitment shall set forth the state of title to the Property, including a list of liens, mortgages, security interests, encumbrances, pledges, assignments, claims, charges, leases (surface, space, mineral, or otherwise), conditions, restrictions, options, severed mineral or royalty interests, conditional sales contracts, rights of first refusal, restrictive covenants, exceptions, easements (temporary or permanent), rights -of -way, encroachments, or any other outstanding claims, interests, estates or equities of any nature (each of which are referred to herein as an "Exception"). (b) Along with the Title Commitment, Seller shall also cause to be delivered to Buyer, at Seller's sole cost and expense, true and correct copies of all instruments that create or evidence Exceptions, including those described in the Title Commitment as exceptions to which the conveyance will be subject and/or which are required to be released or cured at or prior to Closing. 3.02 Survey. Within thirty (30) calendar days after the Effective Date, Buyer may cause to be prepared at Buyer's expense, a current on the ground ALTA survey of the Property (the "Survey"). The Survey may include but not be limited to, a depiction of the location of all roads, streets, easements and rights of way, both on and adjoining the Property, water courses, 100 year flood plain, fences and improvements and structures of any kind. The Survey may further describe the size of the Property, in acres, and contain a metes and bounds description thereof. Seller shall furnish or cause to be furnished any affidavits, certificates, assurances, and/or resolutions or amended or revised survey(s) as required by the Title Company in order to amend the survey exception as required by Section 3.05, below and/or to delete other Exceptions related to matters depicted or not depicted in the Survey. The description of the Property as set forth in the Survey, at the Buyer's election, shall be used to describe the Property in the deed to convey the Property to Buyer and shall be the description set forth in the Title Policy. Contract of Sale Page 2 of 37 sAlegallour documents\contracts1111black bear - contract of sale - final.doc 3.03 Review of Title Commitment, Survey and Exception Documents. Buyer shall have a period of fifteen (15) calendar days (the "Title Review Period") commencing with the day Buyer receives the last of the Title Commitment, the Survey, and the Exception documents, in which to give written notice to Seller, specifying Buyer's objections to one or more of the items ("Objections"), if any. All items set forth in the Schedule C of the Title Commitment, and all other items set forth in the Title Commitment which are required to be released or otherwise satisfied at or prior to Closing, shall be deemed to be Objections without any action by Buyer. 3.04 Seller's Obligation to Cure; Buyer's Right to Terminate. The Seller shall, within twenty (20) calendar days after Seller is provided notice of Objections, either satisfy the Objections at Seller's sole cost and expense or promptly notify Buyer in writing of the Objections that Seller cannot or will not satisfy at Seller's expense. Notwithstanding the foregoing sentence, Seller shall, in any event, be obligated to cure those Objections or Exceptions that have been voluntarily placed on or against the Property by Seller after the Effective Date. If Seller fails or refuses to satisfy any Objections that Seller is not obligated to cure within the allowed twenty (20) calendar day period, and if Buyer does not agree in writing to an extension of that period, said extension to not exceed an additional thirty (30) days, then Buyer has the option of either: (a) waiving the unsatisfied Objections by, and only by, notice in writing to Seller prior to Closing, in which event those Objections shall become Permitted Exceptions (herein so called), or (b) terminating this Contract by notice in writing prior to Closing and receiving back the Earnest Money, in which latter event Seller and Buyer shall have no further obligations, one to the other, with respect to the subject matter of this Contract. 3.05 Title Policy. At Closing, Seller, at Seller's sole cost and expense, shall cause a standard Texas Owner's Policy of Title Insurance ("Title Policy") to be furnished to Buyer. The Title Policy shall be issued by the Title Company, in the amount of the Purchase Price and insuring that Buyer has indefeasible fee simple title to the Property, subject only to the Permitted Exceptions. The Title Policy may contain only the Permitted Exceptions and shall contain no other exceptions to title, with the standard printed or common exceptions amended or deleted as follows: (a) survey exception must be amended if required by Buyer to read "shortages in area" only (although Schedule C of the Title Commitment may condition amendment on the presentation of an acceptable survey and payment, to be borne solely by Seller, of any required additional premium); (b) no exception will be permitted for "visible and apparent easements" or words to that effect (although reference may be made to any specific easement or use shown on the Survey, if a Permitted Exception); (c) no exception will be permitted for "rights of parties in possession"; Contract of Sale Page 3 of 37 sAlegal\our documents\contracts\1I\black bear - contract of sale - final. doc (d) no liens will be shown on Schedule B. Notwithstanding the enumeration of the following exceptions, amendments and/or deletions, Buyer may object to any Exception it deems material, in its sole discretion. ARTICLE IV FEASIBILITY REVIEW PERIOD AND IMPROVEMENTS 4.01 Review Period. Any term or provision of this Contract notwithstanding, the obligations of Buyer specified in this Contract are wholly conditioned on Buyer's having determined, in Buyer's sole and absolute discretion, during the period commencing with the Effective Date of this Contract and ending forty eight (48) calendar days thereafter (the "Absolute Review Period"), based on such tests, examinations (including intrusive examination, as deemed necessary by Buyer), studies, investigations and inspections of the Property the Buyer deems necessary or desirable, including but not limited to studies, assessments and/or inspections to determine the existence of any environmental hazards or conditions in any environmental media, performed at Buyer's sole cost, that Buyer finds the Property suitable for Buyer's purposes. Buyer is granted the right to conduct engineering and/or market and economic feasibility studies of the Property, and to conduct a physical inspection of the Property, including inspections that invade the surface and subsurface of the Property. If Buyer determines, in its sole judgment, that the Property is not suitable, for any reason, for Buyer's intended use or purpose, the Buyer may terminate this Contract by written notice to the Seller, as soon as reasonably practicable, but in any event prior to the expiration of the Absolute Review Period, in which case the Earnest Money will be returned to Buyer, and neither Buyer nor Seller shall have any further duties or obligations hereunder. In the event Buyer elects to terminate this Contract pursuant to the terms of this Article IV, Section 4.01, Buyer will provide to Seller copies of (i) any and all non - confidential and non -privileged reports and studies obtained by Buyer during the Absolute Review Period; and (ii) the Survey. ARTICLE V REPRESENTATIONS, WARRANTIES. COVENANTS AND AGREEMENTS 5.01 Representations and Warranties of Seller. To induce Buyer to enter into this Contract and consummate the sale and purchase of the Property in accordance with the terms and provisions herewith, Seller represents and warrants to Buyer as of the Effective Date and as of the Closing Date, except where specific reference is made to another date, that: (a) The descriptive information concerning the Property set forth in this Contract is complete, accurate, true and correct. (b) There are no adverse or other parties in possession of the Property or any part thereof, and no party has been granted any license, lease or other right related to the use or possession of the Property, or any part thereof, except those described in the Leases, as defined in Article V, Section 5.02(a). Contract of Sale Page 4 of 37 s:llegal\our documents\contracts\l1\black bear - contract of sale - fmal.doc (c) The Seller has good and marketable fee simple title to the Property, subject only to the Permitted Exceptions. (d) The Seller (i) has the full right, power, and authority to sell and convey the Property as provided in this Contract and to carry out Seller's obligations hereunder; and (ii) has taken all actions necessary to authorize the parry executing this Contract to bind, in all respects, Seller to all terms and provisions hereof, and that such party possesses the authority to execute this Contract and bind Seller hereto. (e) The Seller has not received notice of, and has no other knowledge or information of, any pending or threatened judicial or administrative action, or any action pending or threatened by adjacent landowners or other persons against or affecting the Property, including without limitation, Environmental Claims or claims related to Environmental Cleanup Liability, as those terms are defined below. (f) The Seller has disclosed to Buyer in writing of any and all facts and circumstances relating to the physical condition of the Property that may materially and adversely affect the Property and operation or intended operation thereof, or any portion thereof, of which Seller has knowledge. (g) The Seller has paid or will pay on or before the Closing Date, all real estate and personal property taxes, assessments, excises, and levies that are presently due, if any, which are against or are related to the Property, or will be due as of the Closing, and the Property will be subject to no such liens. (h) Seller has not contracted or entered into any agreement with any real estate broker, agent, finder, or any other party in connection with this transaction or taken any action which would result in any real estate broker commissions or finder's fee or other fees payable to any other parry with respect to the transactions contemplated by this Contract, except a 3% commission to David Vanderlaan to be paid by Seller from Seller's funds at Closing. (i) To the best of Seller's knowledge, there has not occurred the disposal or Release of any Chemical Substance on or from the Property that could result in any Environmental Claim or Environmental Cleanup Liability, as those terms are defined below. 5.02 Covenants and Agreements of Seller. Seller covenants and agrees with Buyer as follows: (a) Unless stated otherwise, prior to the Effective Date hereof, or within ten (10) days after the Effective Date, Seller, at Seller's sole cost and expense, shall deliver to Buyer, with respect to the Property, true, correct, and complete copies of the following: (i) All lease agreements and/or occupancy agreements and/or licenses of any kind or nature (if oral, Seller shall provide to Buyer in writing all material terms thereof) relating to the possession of the Property, or any part thereof, including any and Contract of Sale Page 5 of 37 sAlegahour documents\contracts\11\black bear - contract of sale - final.doc all modifications, supplements, and amendments thereto (the "Leases") (ii) All environmental audits, soil tests and engineering and feasibility reports, including any and all modifications, supplements and amendments thereto, with respect to the Property that Seller possesses or has the right to receive. (b) From the Effective Date until the date of Closing or earlier termination of this Contract, Seller shall: (i) Not enter into any written or oral contract, lease, easement or right of way agreement, conveyance or any other agreement of any kind with respect to, or affecting, the Property that will not be fully performed on or before the Closing or would be binding on Buyer or the Property after the date of Closing. (ii) Advise the Buyer promptly of any litigation, arbitration, or administrative hearing concerning or affecting the Property. (iii) Not take, or omit to take, any action that would result in a violation of the representations, warranties, covenants, and agreements of Seller. (iv) Not sell, assign, lease or convey any right, title or interest whatsoever in or to the Property, or create, or permit to exist, any lien, encumbrance, or charge thereon. (e) Seller shall indemnify and hold Buyer harmless, to the extent permitted by law, from all loss, liability, and expense, including, without limitation, reasonable attorneys' fees, arising or incurred as a result of any liens or claims resulting from labor or materials furnished to the Property under any written or oral contracts arising or entered into prior to Closing. (d) Environmental Indemnity. TO THE FULLEST EXTENT PERMITTED BY LAW, SELLER SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS BUYER, AND ITS RESPECTIVE OFFICERS, EMPLOYEES, ELECTED OFFICIALS, AGENTS, SUCCESSORS AND ASSIGNS, FROM AND AGAINST ANY AND ALL ENVIRONMENTAL CLAIMS AND ENVIRONMENTAL CLEANUP LIABILITY, AS DEFINED BELOW, WHICH ARISE DIRECTLY OR INDIRECTLY FROM OR ARE RELATED TO THE USE, OPERATION, MAINTENANCE, OCCUPATION, OWNERSHIP OR ABANDONMENT OF THE PROPERTY (I) BEFORE THE DATE OF CLOSING, INCLUDING WITHOUT LIMITATION, THE ABOVE DESCRIBED EVENTS CAUSED, OR CONTRIBUTED TO, IN WHOLE OR IN PART, BY THE NEGLIGENCE OF ANY KIND, TYPE, OR DEGREE, OR FAULT OF BUYER, ITS RESPECTIVE OFFICERS, EMPLOYEES, ELECTED OFFICIALS, AGENTS, SUCCESSORS AND /OR ASSIGNS; AND (II) AFTER THE DATE OF CLOSING, IF CAUSED OR CONTRIBUTED TO, IN WHOLE OR PART, BY SELLER, OR SELLER'S EMPLOYEES, AGENTS, CONTRACTORS. SELLER FURTHER COVENANTS AND AGREES TO DEFEND ANY SUITS OR ADMINISTRATIVE PROCEEDINGS BROUGHT AGAINST BUYER, AND ITS RESPECTIVE OFFICERS, ELECTED OFFICIALS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, ON ACCOUNT OF ANY SUCH Contract of Sale Page 6 of 37 salegal\our documents\contracis\111black bear - contract of sale - final.doc ENVIRONMENTAL CLAIMS OR ENVIRONMENTAL CLEANUP LIABILITY AND TO PAY OR DISCHARGE THE FULL AMOUNT OR OBLIGATION OF SUCH ENVIRONMENTAL CLAIMS OR ENVIRONMENTAL CLEANUP LIABILITY INCURRED BY, ACCRUING TO OR IMPOSED ON BUYER AND/OR ITS RESPECTIVE OFFICERS, ELECTED OFFICIALS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, AS APPLICABLE, RESULTING FROM ANY SUCH SUIT OR SUITS, OR ADMINISTRATIVE PROCEEDINGS, AND ANY AMOUNTS RESULTING FROM THE SETTLEMENT OR RESOLUTION OF SUCH SUIT OR SUITS OR ADMINISTRATIVE PROCEEDINGS. IN ADDITION, SELLER SHALL PAY TO BUYER, AND/OR ITS RESPECTIVE OFFICERS, ELECTED OFFICIALS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, AS APPLICABLE, REASONABLE ATTORNEYS' FEES INCURRED BY BUYER, AND/OR ITS RESPECTIVE OFFICERS, ELECTED OFFICIALS, EMPLOYEES, AGENTS, SUCCESSORS AND ASSIGNS, AS APPLICABLE, IN ENFORCING SELLER'S INDEMNITY IN THIS ARTICLE V. As used in this Contract: (i) "Arises." An Environmental Claim or Environmental Cleanup Liability shall be deemed to Arise upon each discrete Release of a Chemical Substance. (ii) "Chemical Substances" shall mean any chemical substance or substances that constitute any sort of pollutants, contaminants, chemicals, raw materials, metals, intermediates, products, industrial, solid, toxic or hazardous substances, materials, wastes, asbestos, asbestos -containing materials, polychlorinated biphenyls, or petroleum products, including crude oil or any derived product or component thereof, including, without limitation, gasoline and any material or substance of any kind containing any of the above. (iii) `Environmental Claim" shall mean any claim, demand, action, suit or proceeding for the injury, disease or death of any person (including, without limitation, the Seller, or Seller's successors, assigns, employees, agents and/or representatives), property damage, damage to the environment, or damage to natural resources made, arising or alleged to arise under, or relating to, any Environmental Law. Environmental Claim includes any damages, settlement amounts, fines and penalties assessed or costs of complying with any orders or decrees of courts, administrative tribunals or other governmental entities associated with resolving such claims, demands, actions, suits or proceedings and any costs, expenses and fees, including, without limitation, reasonable attorney's fees, incurred in the investigation, defense and resolution of such claims, demands, actions, suits and proceedings. (iv) `Environmental Cleanup Liability" shall mean any reasonable and necessary cost or expense of any nature whatsoever incurred to investigate, contain, remove, remedy, respond to, remediate, clean up, or abate any Release of Chemical Substances or other contamination or pollution of the air, surface water, groundwater, land surface or subsurface strata, which shall be deemed to include, without limitation, any cost or expense related to any activity prescribed or required (including those the subject of a Contract of Sale Page 7 of 37 s:\legal\our documentslcontracts\1 l\black bear - contract of sale - final.doc Settlement) by any governmental agency or other entity with jurisdiction over such matters, related to the operation, occupation, use, maintenance, abandonment or ownership of the Property, whether such Release, contamination or pollution is located on, within, under or above the Property or is located on, within, under or above any other lands or property including, but not limited to, any Release of Chemical Substances or other contamination or pollution arising out of or resulting from the manufacture, generation, formulation, processing, labeling, distribution, introduction into environment or commerce, or on site or off site use, treatment, handling, storage, disposal, or transportation of any Chemical Substance. Environmental Cleanup Liability includes, without limitation, any judgments, damages, settlements, reasonable and necessary costs or expenses (including, without limitation, attorneys', consultants, and experts' fees and expenses) which shall be deemed to include, without limitation, any cost or expense prescribed or required by any governmental agency or other entity with jurisdiction over such matters, incurred with respect to (i) any investigation, study, assessment, legal representation, cost recovery by a governmental agency or third party, or monitoring or testing in connection therewith, (ii) the Property, as a result of actions or measures necessary to implement or effectuate any such containment, removal, remediation, response, cleanup or abatement, and (iii) the resolution of such liabilities. (v) `Environmental Law" means any statutes or legal requirements relating to or regulating pollution, worker, employee and occupational safety and health, protection or cleanup of the environment or damage to or remediation of damage to real property and natural resources (including, but not limited to ambient air, surface water, groundwater, and land surface or subsurface strata) including, without limitation, legal requirements contained in the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601, et seq., as amended (CERCLA); the Resources Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., as amended (RCRA); the Superfund Amendments and Reauthorization Act of 1986, Pub. L. 99-499, as amended (SARA); the Clean Air Act, 42 U.S.C. § 7401, et seq., as amended; the Federal Water Pollution Control Act, 33 U.S.C. § 1251, et seq., as amended; the National Environmental Policy Act, 42 U.S.C. § 4321, et seq., as amended (NEPA); and the Safe Drinking Water Act, 42 U.S.C. § 300f, et seq., as amended; and/or any other federal, state or local laws, statutes, ordinances, rules, regulations or orders (including decisions of any court or administrative body) relating to pollution, worker, employee and occupational safety and health, damage to and protection or cleanup of, the environment, real property and/or natural resources as described above. Environmental Law shall also mean the Toxic Substance Control Act, 15 U.S.C. § 2601, et seq., as amended (TOSCA), and/or any other federal, state (including, without limitation, laws with respect to trespass, nuisance and other torts or similar legal theories which may be applied to establish liability or responsibility for Environmental Cleanup or Environmental Claims) or local laws, statutes, ordinances, rules, regulations or orders (including decisions of any court or administrative body) relating to (i) release, containment, removal, remediation, response, cleanup or abatement of any sort of Chemical Substance, (ii) the manufacture, generation, formulation, processing, labeling, distribution, introduction into environment or commerce, use, treatment, handling, storage, disposal or transportation of any Chemical Substance, (iii) exposure of persons, including agents, contractors and employees of Contract of Sale Page 8 of 37 sAlegal\our documents\contracts11.1\black bear - contract of sale - final.doc Seller, to any Chemical Substance and other occupational safety or health matters, or (iv) the enviromnental hazards relating to the physical structure or condition of a building, facility, tank, fixture or other structure, including, without limitation, those relating to the management, use, storage, disposal, cleanup or removal of any Chemical Substance. (vi) "Release" shall mean any spilling, leaking, pumping, pouring, emitting, spraying, emptying, discharging, escaping, leaching, dumping or disposing, in any way, manner or form, of any Chemical Substance into the environment (including, but not limited to, the ambient air, surface water, groundwater and/or land surface or subsurface strata) of any kind whatsoever (including without limitation the abandonment or temporary abandonment or discarding of barrels, containers, tanks or other receptacles containing or previously containing any Chemical Substance). (vii) "Settlement" shall mean any compromise or written resolution of any claim or matter that is agreed to by Seller and Buyer and any third party. 5.03 Covenants and Agreements of Buyer and Seller. Buyer and Seller covenant and agree with the other as follows: (a) At Closing, Buyer shall temporarily lease to the Seller, and the Seller shall temporarily lease from Buyer, the entirety of the Property, upon the terms and conditions set forth in the form of the Temporary Lease (herein so called), as attached hereto as Exhibit `B". (b) Seller shall remove all of Seller's personal property, trade fixtures and any other property of Seller, excepting the buildings, structures, improvements and other facilities that are fixtures, other than trade fixtures, to the Land ("the Fixtures"), (Seller's property described above, less the Fixtures, is herein called "Seller's Personal Property") from the Property on or before the Termination Date (as defined in the Temporary Lease) of the Temporary Lease. Any of Seller's Personal Property remaining on the Property after the Termination Date shall be deemed Abandoned Property, as prescribed by Section E.19. of the Temporary Lease, and may be disposed of by Buyer in any manner prescribed by the Temporary Lease. Further, Seller shall execute and deliver to Buyer a written stipulation and waiver, on or before the Termination Date, expressly stipulating that all of Seller's Personal Property has been removed from the Property and waiving any and all rights Seller may have in or to such Property. 5.04 Survival Beyond Closing. Notwithstanding anything to the contrary contained in this Contract, the representations, warranties, covenants and agreements of Seller and the covenants and agreements of Buyer contained in this Contract shall survive the Closing, and shall not, in any circumstance, be merged with the General Warranty Deed, as described in Article VII, Section 7.02(a). ARTICLE VI CONDITIONS PRECEDENT TO PERFORMANCE 6.01 Performance of Seller's Obligations. Buyer is not obligated to perform under this Contract unless, within the designated time periods, at Seller's sole cost and expense (except as herein expressly provided to the contrary), all of the following shall have occurred: Contract of Sale Page 9 of 37 s:\legal\our documents\contracts\11\black bear - contract of sale - final.doc (a) Seller has performed, furnished, or caused to be furnished to Buyer all items required to be so performed or furnished under other sections of this Contract; and (b) Seller cures or Buyer waives in writing, within the time periods specified in Article III, all of Buyer's objections made in accordance with Article III. 6.02 Breach of Seller's Representations, Warranties, Covenants and Agreements. Buyer is not obligated to perform under this Contract unless all representations, warranties, covenants and agreements of Seller contained in this Contract are true and correct or have been performed, as applicable, as of the Closing Date, except where specific reference is made to another date. 6.03 Adverse Change. Buyer is not obligated to perform under this Contract, if on the date of Closing, any portion of the Property has been condemned, or is the subject of condemnation, eminent domain, or other material proceeding asserted by any third party, or the Property, or any part thereof, has been materially or adversely impaired in any manner. 6.04 Review Period. Buyer is not obligated to perform under this Contract if Buyer delivers notice to Seller pursuant to Article IV, Section 4.01 that Buyer has determined that the Property is unsuitable to or for Buyer's purposes. 6.05 Buyer's Right to Waive Conditions Precedent. Notwithstanding anything contained in this Contract to the contrary, Buyer may, at Buyer's option, elect to waive any of the conditions precedent to the performance of Buyer's obligations under this Contract by giving to the Seller, at any time prior to Closing, a written waiver specifying the waived condition precedent. 6.06 Buyer's Termination if Conditions Precedent Not Satisfied or Waived. If any of the conditions precedent to the performance of Buyer's obligations under this Contract have not been satisfied by Seller or waived by the Buyer, the Buyer may, by giving written notice to Seller, terminate this Contract. On Buyer's termination, the Earnest Money shall be immediately returned to Buyer by the Title Company. The Seller shall, on written request from Buyer, promptly issue the instructions necessary to instruct the Title Company to return to Buyer the Earnest Money and, thereafter, except as otherwise provided in this Contract, Buyer and Seller shall have no further obligations under this Contract, one to the other. ARTICLE VII CLOSING 7.01 Date and Place of Closing. The Closing (herein so called) shall take place in the offices of the Title Company and shall be accomplished through an escrow to be established with the Title Company, as escrowee. The Closing Date (herein sometimes called), shall occur ten (10) days following the completion of all conditions precedent to Buyer's performance of this Contract, as set forth in Article VI, hereof; but no later than August 31, 2011, or as mutually agreed upon by Buyer and Seller. 7.02 Items to be Delivered at the Closing. Contract of Sale Page 10 of 37 sAlegal\our documents\contracts\l 1\black bear - contract of sale - final.doc (a) Seller. At the Closing, Seller shall deliver or cause to be delivered to Buyer or the Title Company, at the expense of the parry designated herein, the following items: (i) The Title Policy, in the form specified in Article III, Section 3.05; (ii) The General Warranty Deed, substantially in the form as attached hereto as Exhibit "C", subject only to the Permitted Exceptions, if any, duly executed by Seller and acknowledged; (iii) The Temporary Lease, in the form as attached hereto as Exhibit `B", duly executed by Seller and acknowledged; and (iv) Other items reasonably requested by the Title Company as administrative requirements for consummating the Closing. (b) Buyer. At the Closing, Buyer shall deliver to Seller or the Title Company, the following items: (i) The sum required by Article II, Section 2.01, less the Earnest Money and interest earned thereon, in the form of certified or cashier's check or other immediately available funds; (ii) The Temporary Lease, in the form attached hereto as Exhibit `B", duly executed by Buyer and acknowledged; and (iii) Other items reasonably requested by the Title Company as administrative requirements for consummating the Closing. 7.03 Adjustments at Closing. Notwithstanding anything to the contrary contained in this Contract, the provisions of this Article VII, Section 7.03 shall survive the Closing. The following item shall be adjusted or prorated between Seller and Buyer with respect to the Property: (a) Ad valorem taxes relating to the Property for the calendar year in which the Closing shall occur shall be prorated between Seller and Buyer as of the Closing Date. If the actual amount of taxes for the calendar year in which the Closing shall occur is not known as of the Closing Date, the proration at Closing shall be based on the amount of taxes due and payable with respect to the Property for the preceding calendar year. As soon as the amount of taxes levied against the Property for the calendar year in which Closing shall occur is known, Seller and Buyer shall readjust in cash the amount of taxes to be paid by each party with the result that Seller shall pay for those taxes attributable to the period of time prior to the Closing Date (including, but not limited to, subsequent assessments for prior years due to change of land usage or ownership) and Buyer shall pay for those taxes attributable to the period of time commencing with the Closing Date. Contract of Sale Page 11 of 37 s:\Iegal\our documentskontracts\11\black bear - contract of sale - final.doc 7.04 Possession at Closing. Possession of the Property shall be delivered to Buyer at Closing, subject to the Temporary Lease. 7.05 Costs of Closing. Each party is responsible for paying the legal fees of its counsel, in negotiating, preparing, and closing the transaction contemplated by this Contract. Seller is responsible for paying fees, costs and expenses identified herein as being the responsibility of Seller. Buyer is responsible for paying fees, costs, expenses identified herein as being the responsibility of Buyer. If the responsibility for such costs or expenses associated with closing the transaction contemplated by this Contract are not identified herein, such costs or expenses shall be allocated between the parties in the customary manner for closings of real property similar to the Property in Denton County, Texas. ARTICLE VHI DEFAULTS AND REMEDIES 8.01 Seller's Defaults and Buyer's Remedies. (a) Seller's Defaults. Seller is in default under this Contract on the occurrence of any one or more of the following events: (i) Any of Seller's warranties or representations contained in this Contract are untrue on the Closing Date; or (ii) Seller fails to meet, comply with or perform any covenant, agreement, condition precedent or obligation on Seller's part required within the time limits and in the manner required in this Contract; or (iii) Seller fails to deliver at Closing, the items specified in Article VII, Section 7.02(a) of this Contract for any reason other than a default by Buyer or termination of this Contract by Buyer pursuant to the terms hereof prior to Closing. (b) Buyer's Remedies. If Seller is in default under this Contract, Buyer at Buyer's sole option, do any one or more of the following: (i) Terminate this Contract by written notice delivered to Seller in which event the Buyer shall be entitled to a return of the Earnest Money, and Seller shall, promptly on written request from Buyer, execute and deliver any documents necessary to cause the Title Company to return to Buyer the Earnest Money; or (ii) Enforce specific performance of this Contract against Seller, requiring Seller to convey the Property to Buyer subject to no liens, encumbrances, exceptions, and conditions other than those shown on the Title Commitment whereupon Buyer shall waive title objections, and be entitled to assert rights for damages based on Seller's representations, warranties and obligations that are not expressly waived by Buyer; or Contract of Sale Page 12 of 37 sAlegal\our documents\c ontracts\l1\black bear - contract of sale - final.doc (iii) Seek any other recourse, remedy or relief as may be available to Buyer at law, contract, equity or otherwise. 8.02 Buyer's Default and Seller's Remedies. (a) Buyer's Default. Buyer is in default under this Contract if Buyer fails to deliver at Closing, the items specified in Article VII, Section 7.02(b) of this Contract for any reason other than a default by Seller under this Contract or termination of this Contract pursuant to the terms hereof prior to Closing. (b) Seller's Remedy. If Buyer is in default under this Contract, Seller, as Seller's sole and exclusive remedy for the default, may terminate this Contract by written notice delivered to Buyer in which event the Seller shall be entitled to retain the Earnest Money, and Buyer shall, promptly on written request from Seller, execute and deliver any documents necessary to cause the Title Company to return to Seller the Earnest Money. 8.03 Return of Earnest Money Deposit. On the occurrence of any event deemed by Buyer to be a default by Seller under this Contract, the Earnest Money, together with the interest thereon, shall be immediately returned to the Buyer by the Title Company. If the Earnest Money is properly returnable to Buyer in accordance with this Article VIII, Section 8.03, then Seller shall, promptly on written request from Buyer, execute and deliver any documents necessary to cause the Title Company to return to Buyer the Earnest Money. ARTICLE IX MISCELLANEOUS 9.01 Notice. All notices, demands, requests, and other communications required hereunder shall be in writing, and shall be deemed to be delivered, upon the earlier to occur of (a) the date provided if provided by telephonic facsimile, and (b) on the date of the deposit of, in a regularly maintained receptacle for the United States Mail, registered or certified, return receipt requested, postage prepaid, addressed as follows: SELLER: Black Bear Properties, LLC. 4001 East McKinney Street Denton, TX 76205-4608 Copies to: BUYER: City of Denton Paul Williamson Real Estate and Capital Support 901-A Texas Street Denton, Texas 76209 Telecopy: (940) 349-8951 For Seller: For Buyer: Richard Casner, Deputy City Attorney City Attorney's Office 215 E. McKinney Contract of Sale Page 13 of 37 sAlegallour documentslcontracts1111black bear - contract of sale - final.doc Denton, Texas 76201 Telecopy: (940) 382-7923 9.02 Governing Law and Venue. THIS CONTRACT IS BEING EXECUTED AND DELIVERED AND IS INTENDED TO BE PERFORMED IN THE STATE OF TEXAS, THE LAWS OF TEXAS GOVERNING THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND INTERPRETATION OF THIS CONTRACT. THIS CONTRACT IS PERFORMABLE IN, AND THE EXCLUSIVE VENUE FOR ANY ACTION BROUGHT WITH RESPECT HERETO, SHALL LIE IN DENTON COUNTY, TEXAS. 9.03 Entirety and Amendments. This Contract embodies the entire agreement between the parties and supersedes all prior agreements and understandings, if any, related to the Property, and may be amended or supplemented only in writing executed by the party against whom enforcement is sought. 9.04 Parties Bound. This Contract is binding upon and inures to the benefit of Seller and Buyer, and their respective successors and assigns. If requested by Buyer, Seller agrees to execute, acknowledge and record a memorandum of this Contract in the Real Property Records of Denton County, Texas, imparting notice of this Contract to the public. 9.05 Risk of Loss. If any damage or destruction to any improvement located on the Land shall occur prior to Closing or if any third party condemnation or eminent domain proceedings are threatened or initiated that might result in the taking of any portion of the Property, Buyer may, at Buyer's option, do any of the following: (a) Terminate this Contract and withdraw from this transaction without cost, obligation or liability, in which case the Earnest Money shall be immediately returned to Buyer; or (b) Consummate this Contract, in which case Buyer, with respect to the Property, shall be entitled to receive any (i) in the case of damage or destruction, any insurance proceeds, together with the deductible amount under Seller's policy or policies; and (ii) in the case of eminent domain, proceeds paid for the Property related to the eminent domain proceedings. If Buyer makes this election, the Closing shall be held on the tenth (10) calendar day after election is made to close and receive the proceeds described herein. Buyer shall have a period of ten (10) days after receipt of written notification from Seller on the final settlement of all condemnation proceedings or insurance claims related to damage or destruction of any improvement located on the Property, in which to make Buyer's election. 9.06 Further Assurances. In addition to the acts and deeds recited in this Contract and contemplated to be performed, executed and/or delivered by Seller and Buyer, Seller and Buyer agree to perform, execute.and/or deliver, or cause to be performed, executed and/or delivered at the Closing or after the Closing, any further deeds, acts, and assurances as are reasonably necessary to consummate the transactions contemplated hereby. Notwithstanding anything to the contrary contained in this Contract, the provisions of this Article IX, Section 9.06 shall survive Closing. Contract of Sale Page 14 of 37 s:\legal\our documents\contracts11 I\black bear -contract of sale -final. doc 9.07 Time is of the Essence. It is expressly agreed between Buyer and Seller that time is of the essence with respect to this Contract. 9.08 Exhibits. The Exhibits which are referenced in, and attached to this Contract, are incorporated in and made a part of, this Contract for all purposes. 9.09 Delegation of Authority. Authority to take any actions that are to be, .or may be, taken by Buyer under this Contract are hereby delegated by Buyer, pursuant to action by the City Council of Denton, Texas, to the City Engineer, or his designee. 9.10 Expiration of Offer. The execution of this Contract by Seller. constitutes, subject.to the terms hereof, an irrevocable offer to sell the Property to Buyer. Unless by 5 00-p.m.. on .July 13, 2011, this Contract is accepted by Buyer by action of the City Council of Buyer~the offer of this Contract shall be automatically revoked and terminated. SELLER: BLACK BEAR PROPERTIES, LLC., a Texas limited liability company By: NIBSTONE MANAGEMENT, a Texas Iimitedliability. company, Manager By: GENE NIBLE , MANAGER. Executed by Seller on t11e= day 'of 2011. 'BUYER: By: �( GEORGE C. CAMPBELL, CITY MANAGER 4 Executed by`Buyer on the 1;,2 — day of 2011. ATTEST: JENNIFER WALTERS, CITY SECRETARY Contract of Sale Page 15 of 37 sAlegal\our documents\contracts\11\black bear - contract of sale - final.doc BY: q"Z�Ihj A'O, v . 9- - APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY BY: /--e 6--, Contract of Sale Page 16 of 37 sAlegahour documents\contracts\11\black bear - contract of sale - final.doc RECEIPT OF AGREEMENT BY TITLE COMPANY By its execution below, Title Company acknowledges receipt of an executed copy of this Contract. Title Company agrees to comply with, and be bound by, the terms and provisions of this Contract and to perform its duties pursuant to the provisions of this Contract and comply with Section 6045(e) of the Internal Revenue Code of 1986, as amended from time to time, and as further set forth in any regulations or forms promulgated thereunder. TITLE COMPANY: Title Resources 1112 Dallas Drive, Suite 402 Denton, Texas 76205 By. Printed Name:CA- Title: �So Contract receipt date: VS- , 2011 Contract of Sale Page 17 of 37 sAlegahour documents\contracfs11 Bblack bear - contract of sale - final.doc EXHIBIT "A" to Contract of Sale Legal Description 4.024 ACRES BEING ALL THAT CERTAIN TRACT OR PARCEL OF LAND SITUATED IN THE CITY AND COUNTY OF DENTON, STATE OF TEXAS AND BEING IN THE M. FORREST SURVEY ABSTRACT NUMBER 417 AND BEING PART OF A TRACT OF LAND DESCRIBED IN A DEED FROM D.B. BOYD AND WIFE, MARIE BOYD TO TROY D. GLENN AND SYLVA JO GLENN AS RECORDED IN VOLUME 389, PAGE 144 OF THE DEED RECORDS OF DENTON COUNTY, TEXAS, AND BEING A PART OF A TRACT OF LAND DESCRIBED AS FIRST TRACT AND SECOND TRACT AS DESCRIBED IN A DEED FROM JOHN G. FREEMAN AND WIFE, EVELYN FREEMAN TO TROY D. GLENN AS RECORDED IN VOLUME 1765, PAGE 964 OF THE REAL PROPERTY RECORDS OF DENTON COUNTY, TEXAS, AND BEING PART OF A TRACT OF LAND DESCRIBED IN A DEED FROM MATTIE IRENE CARPENTER TO TROY D. GLENN AS RECORDED IN VOLUME 1108, PAGE 608 OF THE DEED RECORDS OF DENTON COUNTY, TEXAS, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A CAPPED %" IRON ROD SET FOR THE SOUTHWEST CORNER OF THE HEREIN DESCRIBED TRACT AND BEING IN THE NORTHERLY R.O.W. LINE OF E. MCKINNEY STREET AND THE EAST LINE OF MAYHILL ROAD; THENCE NORTH 00 DEGREES 08 MINUTES 57 SECONDS WEST WITH THE EAST LINE OF MAYHILL ROAD A DISTANCE OF 305.69 FEET TO A CAPPED'/2" IRON ROD SET FOR THE NORTHWEST CORNER OF THE HEREIN DESCRIBED TRACT AND BEING THE SOUTHWEST CORNER OF A TRACT OF LAND DESCRIBED IN A DEED FROM MARINE PLASTICS, INC. TO CARL L. BEAUCHAMP AND WIFE, DONA J. BEAUCHAMP AS RECORDED IN VOLUME 3375, PAGE 893 OF THE REAL PROPERTY RECORDS OF DENTON COUNTY, TEXAS; THENCE SOUTH 89 DEGREES 18 MINUTES 16 SECONDS EAST WITH SAID SOUTH LINE A DISTANCE OF 314.31 FEET TO A CAPPED Y2" IRON ROD FOUND FOR THE SOUTHEST CORNER OF SAID BEAUCHAMP TRACT; THENCE SOUTH 01 DEGREES 00 MINUTES 53 SECONDS WEST A DISTANCE OF 2.00 FEET TO A CAPPED 112" IRON ROD SET FOR THE NORTHWEST CORNER OF SAID (VOLUME 1765, PAGE 964, SECOND TRACT); THENCE SOUTH 76 DEGREES 58 MINUTES 22 SECONDS EAST WITH THE NORTH LINE OF SAID SECOND TRACT PASSING AT 111.00 FEET THE NORTHEAST CORNER THEREOF AND CONTINUING ON SAID COURSE A TOTAL DISTANCE OF 192.79 FEET TO A CAPPED'/" IRON ROD SET FOR THE NORTHEAST CORNER THE HEREIN DESCRIBED TRACT; THENCE SOUTH 01 DEGREES 00 MINUTES 53 SECONDS WEST A DISTANCE OF 370.51 FEET TO A CAPPED 1/2" IRON ROD SET FOR THE SOUTHEAST CORNER OF THE HEREIN DESCRIBED TRACT AND BEING IN THE NORTHERLY R.O.W. LINE OF E. MCKINNEY STREET; THENCE NORTH 77 DEGREES 01 MINUTES 10 SECONDS WEST WITH THE NORTHERLY R.O.W. LINE OF E. MCKINNEY STREET A DISTANCE OF 507.70 FEET TO THE POINT OF BEGINNING AND ENCLOSING 4.024 ACRES OF LAND MORE OR LESS. Contract of Sale Page 18 of 37 s:\legal\our documents\contracts\11\black bear - contract of sale - final.doc EXHIBIT "B" to Contract of Sale Temporary Lease Basic Terms Effective Date: August 31, 2011 Landlord: City of Denton, Texas Landlord's Address: 215 E. McKinney, Denton, Texas 76201 Tenant: Black Bear Properties, LLC Tenant's Address: 4001 East McKinney Street, Denton, Texas 76208 Premises — As described on Exhibit "A", attached hereto. Term: Through and including April 30, 2012 Commencement Date: The Effective Date Termination Date: (i) April 30, 2012; (ii) earlier termination of this Lease, as provided herein; or (iii) surrender of the Premises by Tenant to Landlord, whichever is the earlier to occur. Rent: The consideration for this Lease is Ten Dollars and No Cents ($10.00) Permitted Use: Current manufacturing operation related to the manufacture of cast concrete building products, and office and warehouse related to same, and no other uses. Tenant's Insurance: As required by Insurance Addendum, attached hereto as Exhibit `B" Landlord's Insurance: None Tenant's Rebuilding Obligations: If the Premises are damaged by fire or other elements to the extent the Permitted Use may not continue absent repair, unless the Premises is repaired by Tenant as provided in Section A.7., below, this Lease shall terminate. Contract of Sale Page 19 of 37 Definitions "Arises." An Environmental Claim or Environmental Cleanup Liability shall be deemed to Arise upon each discrete Release of a Chemical Substance. "Chemical Substances" shall mean any chemical substance or substances that constitute any sort of pollutants, contaminants, chemicals, raw materials, metals, intermediates, products, industrial, solid, toxic or hazardous substances, materials, wastes, asbestos, asbestos -containing materials, polychlorinated biphenyls, or petroleum products, including crude oil or any derived product or component thereof, including, without limitation, gasoline and any material or substance of any kind containing any of the above. "Environmental Claim" shall mean any claim, demand, action, suit or proceeding for the injury, disease or death of any person (including; without limitation, the Tenant, or Tenant's successors, assigns, employees, agents and/or representatives), property damage, damage to the environment, or damage to natural resources made, arising or alleged to arise under, or relating to, any Environmental Law. Environmental Claim includes any damages, settlement amounts, fines and penalties assessed or costs of complying with any orders or decrees of courts, administrative tribunals or other governmental entities associated with resolving such claims, demands, actions, suits or proceedings and any costs, expenses and fees, including, without limitation, reasonable attorney's fees, incurred in the investigation, defense and resolution of such claims, demands, actions, suits and proceedings. "Environmental Cleanup Liability" shall mean any reasonable and necessary cost or expense of any nature whatsoever incurred to investigate, contain, remove, remedy, respond to, clean up, or abate any Release of Chemical Substances or other contamination or pollution of the air, surface water, groundwater, land surface or subsurface strata, which shall be deemed to include, without limitation, any cost or expense related to any activity prescribed or required (including without limitation, those the subject of a settlement) by any governmental agency or other entity with jurisdiction over such matters, related to the operation, occupation, use, maintenance, abandonment or ownership of the Premises, whether such Release, contamination or pollution is located on, within, under or above the Premises or is located on, within, under or above any other lands or property including, but not limited to, any Release of Chemical Substances or other contamination or pollution arising out of or resulting from the manufacture, generation, formulation, processing, labeling, distribution, introduction into environment or commerce, or on site or off site use, treatment, handling, storage, disposal, or transportation of any Chemical Substance. Environmental Cleanup Liability includes, without limitation, any judgments, damages, settlements, reasonable and necessary costs or expenses (including, without limitation, attorneys', consultants, and experts' fees and expenses), which shall be deemed to include, without limitation, any cost or expense prescribed or required (including without limitation, those included in a settlement) by any governmental agency or other entity with jurisdiction over such Contract of Sale Page 20 of 37 matters, incurred with respect to (i) any investigation, study, assessment, legal representation, cost recovery by a governmental agency or third party, or monitoring or testing in connection therewith, (ii) the Premises, as a result of actions or measures necessary to implement or effectuate any such containment, removal, remediation, response, cleanup or abatement, and (iii) the resolution of such liabilities. "Environmental Law" means any statutes or legal requirements relating to or regulating pollution, worker, employee and occupational safety and health, protection or cleanup of the environment or damage to or remediation of damage to real property and natural resources (including, but not limited to, ambient air, surface water, groundwater, and land surface or subsurface strata) including, without limitation, legal requirements contained in the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601, et seq., as amended (CERCLA); the Resources Conservation and Recovery Act, 42 U.S.C. § 6901, et seq., as amended (RCRA); the Superfund Amendments and Reauthorization Act of 1986, Pub. L. 99-499, as amended (SARA); the Clean Air Act, 42 U.S.C. § 7401, et seq., as amended; the Federal Water Pollution Control Act, 33 U.S.C. § 1251, et seq., as amended; the National Environmental Policy Act, 42 U.S.C. § 4321, et seq., as amended (NEPA); and the Safe Drinking Water Act, 42 U.S.C. § 300f, et seq., as amended; and/or any other federal, state or local laws, statutes, ordinances, rules, regulations or orders (including decisions of any court or administrative body) relating to pollution, worker, employee and occupational safety and health, damage to and protection or cleanup of, the environment, real property and/or natural resources as described above. Environmental Law shall also mean the Toxic Substance Control Act, 15 U.S.C. § 2601, et seq., as amended (TOSCA), and/or any other federal, state (including, without limitation, laws with respect to trespass, nuisance and other torts or similar legal theories which may be applied to establish liability or responsibility for Environmental Cleanup or Environmental Claims) or local laws, statutes, ordinances, rules, regulations or orders (including decisions of any court or administrative body) relating to (i) release, containment, removal, remediation, response, cleanup or abatement of any sort of Chemical Substance, (ii) the manufacture, generation, formulation, processing, labeling, distribution, introduction into environment or commerce, use, treatment, handling, storage, disposal or transportation of any Chemical Substance, (iii) exposure of persons, including agents, contractors and employees of Tenant, to any Chemical Substance and other occupational safety or health matters, or (iv) the environmental hazards relating to the physical structure or condition of a building, facility, tank, fixture or other structure, including, without limitation, those relating to the management, use, storage, disposal, cleanup or removal of any Chemical Substance. "Injury" means (a) damage, harm to or impairment or loss of property or its use, including without limitation, personal property, real property and/or natural resources, and (b) harm to or death of a person. "Landlord" means Landlord and its elected officials, agents, employees, invitees, licensees, or visitors. Contract of Sale Page 21 of 37 "Release" shall mean any spilling, leaking, pumping, pouring, emitting, spraying, emptying, discharging, escaping, leaching, dumping or disposing, in any way, manner or form, of any Chemical Substance into the environment (including, but not limited to, the ambient air, surface water, groundwater and/or land surface or subsurface strata) of any kind whatsoever (including without limitation the abandonment or temporary abandonment or discarding of barrels, containers, tanks or other receptacles containing or previously containing any Chemical Substance). "Tenant" means Tenant and its agents, contractors, employees, invitees, licensees, or visitors. Clauses and Covenants A. Tenant agrees to: 1. Lease the Premises for the entire Term beginning on the Commencement Date and ending on the earlier to occur of (i) Termination Date; or (ii) upon surrender of the Premises by Tenant to Landlord prior to the Termination Date. 2. ACCEPT THE PREMISES IN THEIR PRESENT CONDITION "AS IS," "WHERE IS" AND "WITH ALL FAULTS". TENANT STIPULATES THAT IT HAS THOROUGHLY INSPECTED THE PREMISES AND FINDS THAT THE PREMISES IS CURRENTLY SUITABLE FOR THE PERMITTED USE. LANDLORD MAKES NO REPRESENTATION, COVENANTS OR WARRANTIES, EXPRESSED, IMPLIED OR OF ANY KIND OR NATURE CONCERNING OR WITH RESPECT TO THE PREMISES, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, QUALITY, HABITABILITY, SUITABILITY, OR FITNESS FOR PARTICULAR PURPOSE OR USE. TENANT STIPULATES TO LANDLORD THAT IT HAS PREVIOUSLY OCCUPIED THE PREMISES AND IS AWARE OF THE CONDITION OF THE PROPERTY. TENANT REPRESENTS AND WARRANTS TO LANDLORD THAT THERE ARE NO CHEMICAL SUBSTANCES CONTAINED OR STORED OR THAT HAVE BEEN RELEASED IN OR ON THE PREMISES THAT WOULD RESULT IN AN ENVIRONMENTAL CLAIM OR ENVIRONMENTAL CLEANUP LIABILITY. 3. Obey (a) all applicable laws relating to the use, condition, and occupancy of the Premises, and (b) any requirements imposed by utility companies serving or insurance companies covering the Premises. 4. Obtain and pay for all utility services used by Tenant. 5. Pay all costs related to the utilities, of any kind or nature, related to the Premises. 6. Allow Landlord to enter the Premises to perform Landlord's obligations, if any, and inspect the Premises. Contract of Sale Page 22 of 37 7. Maintain the Premises in a good state of condition, normal wear and tear excepted. Notwithstanding the obligation to maintain the Premises, if so desired by Tenant, Tenant may repair and replace any and all parts of the Premises damaged during the Term hereof, in its entirety. In the event Tenant does not desire to repair or replace the Premises, it shall be under no obligation to do so but shall immediately surrender the Premises and remit any proceeds or monies attributable to damage or loss of the buildings, structures, improvements and other facilities that are fixtures to the Property, received by Tenant from insurance coverage required herein to Landlord upon such election. Tenant hereby expressly stipulates that Landlord is not obligated to repair, replace, or maintain, any part or parcel of the Premises, including without limitation, roof systems, HVAC systems, wall systems, foundations, windows, and doors. 8. Vacate, in its entirety, the Premises on or before the Termination Date. Tenant shall remove all personal property, trade fixtures and any other property, excepting the buildings, structures, improvements and other facilities that are fixtures, other than trade fixtures, to the Premises (collectively, "Tenant's Personal Property") owned by it from the Premises on or before the Termination Date or earlier termination of this Temporary Lease, whichever is earlier to occur, and shall execute a written stipulation and acknowledgement on such date (i) expressly stipulating that all such property of Tenant has been removed from the Premises; and (ii) waiving any and all rights the Tenant may have to the Premises and such property, 9. INDEMNIFY, DEFEND, AND HOLD LANDLORD HARMLESS FROM ANY DAMAGE OR INJURY (AND ANY RESULTING OR RELATED CLAIM, ACTION, LOSS, LIABILITY, OR REASONABLE EXPENSE, INCLUDING ATTORNEY'S FEES AND OTHER FEES AND COURT AND OTHER COSTS) CAUSED BY OR RELATED TO TENANT'S OCCUPANCY OF THE PREMISES, TENANT'S DEFAULT UNDER THIS LEASE AND/OR OTHERWISE OCCURRING IN OR RELATED TO ANY PORTION OF THE PREMISES. 9.A. TO THE FULLEST EXTENT PERMITTED BY LAW, TENANT SHALL INDEMNIFY, DEFEND AND HOLD HARMLESS LANDLORD, AND ITS SUCCESSORS AND ASSIGNS, FROM AND AGAINST ANY AND ALL ENVIRONMENTAL CLAIMS AND ENVIRONMENTAL CLEANUP LIABILITY, WHICH ARISE DIRECTLY OR INDIRECTLY FROM OR ARE RELATED TO THE USE, OPERATION, MAINTENANCE, OCCUPATION, OWNERSHIP OR ABANDONMENT OF THE PREMISES (I) BEFORE THE EFFECTIVE DATE, INCLUDING WITHOUT LIMITATION, THE ABOVE DESCRIBED EVENTS, CAUSED, OR CONTRIBUTED TO, IN WHOLE OR IN PART, BY THE NEGLIGENCE OF ANY KIND, TYPE, OR DEGREE, OR FAULT OF LANDLORD, ITS SUCCESSORS AND /OR ASSIGNS; AND (II) AFTER THE EFFECTIVE DATE, IF CAUSED OR CONTRIBUTED TO, IN WHOLE OR PART, BY TENANT. TENANT FURTHER COVENANTS AND AGREES TO DEFEND ANY SUITS OR ADMINISTRATIVE PROCEEDINGS BROUGHT AGAINST LANDLORD, ITS SUCCESSORS AND ASSIGNS, ON ACCOUNT OF ANY SUCH ENVIRONMENTAL CLAIMS OR ENVIRONMENTAL CLEANUP LIABILITY AND TO PAY OR Contract of Sale Page 23 of 37 DISCHARGE THE FULL AMOUNT OR OBLIGATION OF SUCH ENVIRONMENTAL CLAIMS OR ENVIRONMENTAL CLEANUP LIABILITY INCURRED BY, ACCRUING TO OR IMPOSED ON LANDLORD AND ITS SUCCESSORS AND ASSIGNS, AS APPLICABLE, RESULTING FROM ANY SUCH SUIT OR SUITS, OR ADMINISTRATIVE PROCEEDINGS, OR ANY AMOUNTS RESULTING FROM THE SETTLEMENT OR RESOLUTION OF SUCH SUIT OR SUITS OR ADMINISTRATIVE PROCEEDINGS. IN ADDITION, TENANT SHALL PAY TO LANDLORD, AND ITS SUCCESSORS AND ASSIGNS, AS APPLICABLE, REASONABLE ATTORNEYS' FEES INCURRED BY LANDLORD, AND ITS SUCCESSORS AND ASSIGNS, AS APPLICABLE, IN ENFORCING TENANT'S INDEMNITY PROVIDED HEREIN. 9.13. THE INDEMNITIES CONTAINED IN PARAGRAPHS 9 AND 9A ARE (A) INDEPENDENT OF TENANT'S INSURANCE, (B) WILL NOT BE LIMITED BY COMPARATIVE NEGLIGENCE STATUTES OR DAMAGES PAID UNDER THE WORKERS' COMPENSATION ACT OR SIMILAR EMPLOYEE BENEFIT ACTS, (C) WILL SURVIVE THE END OF THE TERM, AND (D) WILL APPLY EVEN IF AN INJURY OR DAMAGE IS CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (BUT SHALL NOT APPLY IN THE CASE OF THE LANDLORD'S SOLE OR GROSS NEGLIGENCE) OF LANDLORD. 10. During the term of this Lease, Tenant will not locate, store or dispose in or on, or release or discharge from (including groundwater contamination) the Premises, any Chemical Substances that could result in an Environmental Claim or Environmental Cleanup Liability. 11. Tenant shall, at no cost or expense to Landlord, take all actions necessary to comply with all Environmental Laws affecting the Premises. 12. Any of Tenant's Personal Property remaining on the Premises after the Termination Date shall be deemed Abandoned Property, as prescribed by Section E.19., below, and may be disposed of by Landlord in any manner prescribed by Section E.19., below. B. Tenant agrees not to: 1. Use the Premises for any purpose other than the Permitted Use. 2. Create a nuisance. 3. Permit any waste. 4. Use the Premises in any way that would increase insurance premiums or void insurance on the Premises. Contract of Sale Page 24 of 37 Change the lock system of the Premises. 6. Alter the Premises. 7. Allow a lien to be placed on the Premises. Assign this Lease or sublease any portion of the Premises. C. Landlord agrees to: 1. Lease to Tenant the Premises for the entire Term beginning on the Commencement Date and ending on the earlier to occur of (i) Termination Date; or (ii) upon surrender of the Premises by Tenant to Landlord prior to the Termination Date. D. Landlord agrees not to: Interfere with Tenant's possession of the Premises as long as Tenant is not in default hereunder. E. Landlord and Tenant agree to the following: 1. Alterations. Any physical additions, improvements or alterations to the Premises made by Tenant must be consented to by Landlord, in its sole and absolute discretion. 2. Insurance. Tenant will maintain the insurance coverages described in the attached Insurance Addendum during the Term of this Lease and, if coverage is afforded on a Claims Made basis, for three (3) years thereafter, as concerns the Environmental Liability coverage: The obligations provided herein related to the Environmental Liability coverage shall survive the _end of the Term. 3. Release of Claims/Subrogation. TENANT RELEASES LANDLORD FROM ANY AND ALL CLAIMS OR LIABILITIES FOR DAMAGE TO THE PREMISES, DAMAGE TO OR LOSS OF PERSONAL PROPERTY WITHIN THE PREMISES, AND LOSS OF BUSINESS OR REVENUES INCIDENT TO, ARISING FROM OR RELATED TO TENANT'S OCCUPATION OF THE PREMISES. THE RELEASE IN THIS PARAGRAPH WILL APPLY EVEN IF THE DAMAGE OR LOSS IS CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE, OF ANY KIND, TYPE OR DEGREE, OR STRICT LIABILITY OF THE LANDLORD BUT WILL NOT APPLY TO THE EXTENT THE DAMAGE OR LOSS IS CAUSED BY THE WILLFUL MISCONDUCT OF THE LANDLORD. 4. Casualty/Total or Partial Destruction. If the Premises are damaged by casualty to the extent the Permitted Use may not continue absent repair, unless the Premises is rep aired by Tenant as provided in Section A.7., above , t his Lease will terminate without liability of any kind to Landlord. Contract of Sale Page 25 of 37 5. CondemnationlSubstantial or Partial Taking a. If the Premises cannot be used for the purposes contemplated by this Lease because of condemnation or purchase in lieu of condemnation by a third party, this Lease will terminate. b. Tenant will have no claim to the condemnation award or proceeds in lieu of condemnation. 6. Default by LandlordlEvents. Defaults by Landlord are failing to comply with any provision of this Lease within thirty (30) calendar days after written notice. 7. Default by Landlord/Tenant's Remedies. Tenant's remedies for Landlord's default are solely to either (i) enforce the terms of this Lease by specific performance; or (ii) terminate this Lease. THE REMEDIES OF TENANT AS SET FORTH HEREIN ARE SOLE AND EXCLUSIVE AND TENANT WAIVES ANY OTHER RIGHT OR REMEDY THAT MIGHT BE AVAILABLE. 8. Default by Tenant/Events. Defaults by Tenant are (a) Tenant abandoning or vacating a substantial portion of the Premises without surrendering the Premises to Landlord, (b) Tenant failing to comply, within five (5) calendar days after written notice, with any provision of this Lease other than the default set forth in (a) above, which shall require no notice of default to Tenant; (c) Tenant shall become insolvent, or shall make a transfer in fraud of creditors, or shall make an assignment for the benefit of creditors; (d) a receiver or trustee shall be appointed for all or substantially all of the assets of Tenant; (e) Tenant shall file a voluntary petition in bankruptcy or admit in writing that it is unable to pay its debts as they become due; (f) Tenant shall apply for or consent to the appointment of a receiver, trustee, custodian, intervener or liquidator of itself or of all or substantial part of its assets; (g) Tenant shall file an answer admitting the material allegations of, or consent to, or default in answering, a petition filed against it in any bankruptcy, reorganization or insolvency proceeding; and (h) any of Tenant's representations or warranties contained in this Lease are untrue at any time during the Term. 9. Default by Tenant/Landlord's Remedies. Landlord's remedies for Tenant's default are to (a) enter and take possession of the Premises, after which Landlord may relet the Premises on behalf of Tenant and receive the rent directly by reason of the reletting, and Tenant agrees to reimburse Landlord for any expenditures made in order to relet; (b) enter the Premises and perform Tenant's obligations; and (c) terminate this Lease by written notice and sue for damages. Landlord may enter and take possession of the Premises pursuant to the exercise of any right or remedy, without prejudice to any other right or remedy, available to it by law, contract, equity or otherwise. 10. Default/Waiver/Mitigation. It is not a waiver of default if the non - defaulting party fails to declare immediately a default or delays in taking any action. Except as to the sole and exclusive remedies of Tenant, pursuit of any remedies set forth Contract of Sale Page 26 of 37 in this Lease does not preclude pursuit of other remedies in this Lease or provided by applicable law. 11. Holdover. If Tenant does not vacate the Premises following termination of this Lease, Tenant will become a tenant at sufferance. No holding over by Tenant, whether with or without the consent of Landlord, will extend the Term. Tenant stipulates that its possession of the Premises after the expiration of the Term, as a tenant of sufferance, will cause damage to Landlord in excess of fair market value of rent resulting, in part, due to delays to Landlord construction projects. 12. Lease of Commercial Rental Property. Tenant represents and warrants that the Premises is commercial rental property, as defined in Chapter 93 of the Texas Property Code. 13. Attorney's Fees. If either party retains an attorney to enforce this Lease, the parry prevailing in litigation is entitled to recover reasonable attorney's fees and other fees and court and other costs. 14. Venue. EXCLUSIVE VENUE FOR ANY ACTION HEREUNDER IS IN DENTON COUNTY, TEXAS, THE COUNTY IN WHICH THE PREMISES ARE LOCATED. 15. Entire Agreement. This Lease, together with the attached exhibits and addendums, comprises the entire agreement of the parties, and there are no oral representations, warranties, agreements, or promises pertaining to this Lease or occupation of the Premises. 16. Amendment of Lease. This Lease may be amended only by an instrument in writing, duly authorized and signed by Landlord and Tenant. Notwithstanding anything to the contrary herein, the authority to amend this Lease by Landlord is not delegated by the City Council of Landlord. IT Limitation of Warranties. THERE ARE NO IMPLIED WARRANTIES OF MERCHANTABILITY, QUALITY, SUITABILITY, HABITABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR OF ANY OTHER KIND ARISING OUT OF THIS LEASE, AND THERE ARE NO WARRANTIES THAT EXTEND BEYOND THOSE EXPRESSLY STATED IN THIS LEASE. 18. Notices. Any notice given by one party to the other in connection with this Lease shall be in writing and shall be sent by certified mail, return receipt requested, with postage fees prepaid, or via facsimile as follows: A. If to Landlord, addressed to: City Manager 215 E. McKinney Denton, Texas 76201 Contract of Sale Page 27 of 37 Fax No. 940.349.8596 w/copy to: Paul Williamson Real Estate Manager 901 A Texas Street Denton, Texas 76209 Fax No. 940.349.8951 B. If to Tenant, addressed to: Black Bear Properties, LLC Attn: Gene Niblett 4001 East McKinney Street Denton, Texas 76208 Fax No. 940.898.0918 Notice shall be deemed received for all purposes when placed in the United States mail, as set forth herein, or when delivered by telephonic facsimile to the other party at the facsimile number(s) provided above. 19. Abandoned Property. Landlord may retain, destroy, or dispose of any property, of any kind or type, including without limitation, Tenant's Personal Property left or remaining on the Premises after the Termination Date ("Abandoned Property") without liability of any kind to Landlord and without payment of consideration of any kind to Tenant. In the event Landlord shall elect to store said Abandoned Property, Landlord may store such Abandoned Property in the name and at the expense of Tenant. 20. No Broker. Tenant represents and warrants Landlord that it has not contracted with or otherwise retained any broker or any other third party related to this Lease to whom any commission or other fee may be payable. 21. Authority of Tenant. Tenant represents and warrants to Landlord that it has taken all actions necessary to authorize the party executing this Lease to bind, in all respects, Tenant to all terms and provisions of this Lease, and that such person possesses the authority to execute this Lease and bind Tenant hereto. 22. Delegation of Authority. Except as otherwise expressly provided herein, any action that is to be or may be taken by Landlord under this Lease is hereby delegated by Landlord, pursuant to approval of this Lease by City Council of Landlord, to the City Engineer of Landlord, or his designee. TENANT: BLACK BEAR PROPERTIES, LLC., a Texas limited liability company By: NIBSTONE MANAGEMENT, a Texas limited liability company, Manager am Contract of Sale Page 28 of 37 GENE NIBLETT, MANAGER Contract of Sale Page 29 of 37 ACKNOWLEDGMENT STATE OF TEXAS COUNTY OF DENTON § This instrument was acknowledged before me on this day of , 2011, by Gene Niblett, Manager of Nibstone Management, a Texas limited liability company, Manager of Black Bear Properties, LLC., a Texas limited liability company, on behalf of said limited liability company. Notary Public, State of Texas My commission expires: CITY OF DENTON-LANDLORD Lot", GEORGE C. CAMPBELL, CITY MANAGER ATTEST: JENNIFER WALTERS, CITY SECRETARY APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY Contract of Sale Page 30 of 37 STATE OF TEXAS COUNTY OF This instrument was acknowledged before me on this day of , 2011, by George C. Campbell, City Manager of the City of Denton, on behalf of the City of Denton. Notary Public, State of Texas My commission expires: Contract of Sale Page 31 of 37 EXHIBIT "A" to Temporary Lease 4.024 ACRES BEING ALL THAT CERTAIN TRACT OR' PARCEL OF LAND SITUATED IN THE CITY AND COUNTY OF DENTON, STATE OF TEXAS AND BEING IN THE M. FORREST SURVEY ABSTRACT NUMBER 417 AND BEING PART OF A TRACT OF LAND DESCRIBED IN A DEED FROM D.B. BOYD AND WIFE, MARIE BOYD TO TROY D. GLENN AND SYLVA JO GLENN AS RECORDED IN VOLUME 389, PAGE 144 OF THE DEED RECORDS OF DENTON COUNTY, TEXAS, AND BEING A PART OF A TRACT OF LAND DESCRIBED AS FIRST TRACT AND SECOND TRACT AS DESCRIBED IN A DEED FROM JOHN G. FREEMAN AND WIFE, EVELYN FREEMAN TO TROY D. GLENN AS RECORDED IN VOLUME 1765, PAGE 964 OF THE REAL PROPERTY RECORDS OF DENTON COUNTY, TEXAS, AND BEING PART OF A TRACT OF LAND DESCRIBED IN A DEED FROM MATTIE IRENE CARPENTER TO TROY D. GLENN AS RECORDED IN VOLUME 1108, PAGE 608 OF THE DEED RECORDS OF DENTON COUNTY, TEXAS, AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A CAPPED Y2" IRON ROD SET FOR THE SOUTHWEST CORNER OF THE HEREIN DESCRIBED TRACT AND BEING IN THE NORTHERLY R.O.W. LINE OF E. MCKINNEY STREET AND THE EAST LINE OF MAYHILL ROAD; THENCE NORTH 00 DEGREES O8 MINUTES 57 SECONDS WEST WITH THE EAST LINE OF MAYHILL ROAD A DISTANCE OF 305.69 FEET TO A CAPPED YO IRON ROD SET FOR THE NORTHWEST CORNER OF THE HEREIN DESCRIBED TRACT AND BEING THE SOUTHWEST CORNER OF A TRACT OF LAND DESCRIBED IN A DEED FROM MARINE PLASTICS, INC. TO CARL L. BEAUCHAMP AND WIFE, DONA J. BEAUCHAMP AS RECORDED IN VOLUME 3375, PAGE 893 OF THE REAL PROPERTY RECORDS OF DENTON COUNTY, TEXAS; THENCE SOUTH 89 DEGREES 18 MINUTES 16 SECONDS EAST WITH SAID SOUTH LINE A DISTANCE OF 314.31 FEET TO A CAPPED 1/2" IRON ROD FOUND FOR THE SOUTHEST CORNER OF SAID BEAUCHAMP TRACT; THENCE SOUTH 01 DEGREES 00 MINUTES 53 SECONDS WEST A DISTANCE OF 2.00 FEET TO A CAPPED 1/2" IRON ROD SET FOR THE NORTHWEST CORNER OF SAID (VOLUME 1765, PAGE 964, SECOND TRACT); THENCE SOUTH 76 DEGREES 58 MINUTES 22 SECONDS EAST WITH THE NORTH LINE OF SAID SECOND TRACT PASSING AT 111.00 FEET THE NORTHEAST CORNER THEREOF AND CONTINUING ON SAID COURSE A TOTAL DISTANCE OF 192.79 FEET TO A CAPPED %" IRON ROD SET FOR THE NORTHEAST CORNER THE HEREIN DESCRIBED TRACT; THENCE SOUTH 01 DEGREES 00 MINUTES 53 SECONDS WEST A DISTANCE OF 370.51 FEET TO A CAPPED 1/2" IRON ROD SET FOR THE SOUTHEAST CORNER OF THE HEREIN DESCRIBED TRACT AND BEING IN THE NORTHERLY R.O.W. LINE OF E. MCKINNEY STREET; THENCE NORTH 77 DEGREES 01 MINUTES 10 SECONDS WEST WITH THE NORTHERLY R.O.W. LINE OF E. MCKINNEY STREET A DISTANCE OF 507.70 FEET TO THE POINT OF BEGINNING AND ENCLOSING 4.024 ACRES OF LAND MORE OR LESS. Contract of Sale Page 32 of 37 Exhibit "B" to Temporary Lease Insurance Addendum Tenant shall procure and carry, at its sole cost and expense during the term of this Lease and as otherwise may be provided in this Lease, insurance protection as hereinafter specified, in form and substance satisfactory to Landlord, carried with an insurance company (or companies) authorized to transact business in the state of Texas, covering all aspects and risks of loss of all operations in connection with this Lease, including without limitation, the indemnity obligations set forth herein. Tenant shall obtain and maintain the following insurance coverages in full force and effect during the term of this Lease, and if coverage is afforded on a Claims Made basis, for three (3) years thereafter as concerns the Environmental Liability Coverage: Commercial General Liability. Per Occurrence Limit: Aggregate Limit: $1,000,000 $2,000,000 Business Automobile Liability (providing coverage for owned, non -owned and hired automobiles): Per Occurrence Limit Aggregate Limit: Property Insurance: $ 500,000 $1,000,000 All risk property coverage on all buildings, attachments and improvements, including the contents of all buildings, attachments and improvements. Contract of Sale Page 33 of 37 Environmental Liability Per Occurrence Limit: $1,000,000 Aggregate Limit: $2,000,000 The Landlord shall be listed as an Additional Insured with respect to the Commercial General Liability and Business Automobile Liability and shall be granted a waiver of subrogation under both policies. The Landlord shall be listed as an Additional Insured and Loss Payee with respect to the Environmental Liability Coverage and a Loss Payee with respect to the all risk property coverage. Tenant will provide a Certificate of Insurance on or before the Effective Date of this Lease to the Landlord as evidence of coverage. The Certificate will provide 30 days notice of cancellation. A copy of the additional insured endorsement and waiver of subrogation attached to the policy will be included in the certificate. All insurance carriers must be admitted to do business in the state of Texas and have an AM Best's Rating of A-VII or better. All policies should be written on an occurrence basis. If a policy is written on a "claims made" basis the Tenant shall provide evidence of continued coverage, or "tail coverage" for a period of three (3) years following the expiration of this Lease. Contract of Sale Page 34 of 37 NOTIICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL aSE+lAJR1'rY "lJMII1+.I' OR YOUR DRIVER'S LICENSE NUMBER..'" GENERAL WARRANTY DEED 1 STATE OF TEXAS §' COUNTY OF DENTON § KNOW ALL MEN BY THESE PRESENTS That Black Bear Properties, LLC, a Texas limited liability company (herein called "Grantor"), for and in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00), and other good and valuable consideration to Grantor in hand paid by the CITY OF DENTON, TEXAS, a Texas Home Rule Municipal Corporation (herein called "Grantee"), 215 E. McKinney, Denton, Texas 76201, the receipt and sufficiency of which are hereby acknowledged and confessed, has GRANTED, SOLD and CONVEYED, and by these presents does GRANT, SELL and CONVEY unto Grantee, all the real property in Denton County, Texas being particularly described on Exhibit "A", attached hereto and Made a part hereof for all purposes, and being located in Denton County, Texas, together with any and all rights or interests of Grantor in and to adjacent streets, alleys and rights of way and together with all and singular the improvements and fixtures thereon and all other rights and appurtenances thereto (collectively, the "Property"). This conveyance is subject to the following: (i) Easement executed by D. S. Carpenter, etal to Texas Power & Light Company filed May 19, 1936, recorded in Volume 256, Page 495, Deed Records of Denton County, Texas; (ii) Easement executed by Troy Glenn to Texas Power & Light Company filed July 14, 1972, recorded in Volume 650, Page 651, Deed Records of Denton County, Texas. (iii) Undivided 1/2 interest in Oil, Gas and other Minerals reserved in deed from D. S. CARPENTER to R. M. MILLS and wife SUSIE MAY MILLS filed March 1, 11 11� lig !IlI1111111111�1� 11111 fflsffgm� (iv) Undivided 1/2 interest in Oil, Gas and other Minerals conveyed 12 Mineral Deed from D. S. CARPENTER to ROY C. PHIPPS filed March 12, 195 recorded in Volume 368, Page 38, Deed Records of Denton County, Texas. I (v) Subject to terms and conditions of Boundary Line Agreement by and between MILDRED MORRIS and TROY GLENN and SYLVA JO GLENN, filed September 30, 1986, recorded in Volume 1991, Page 176, Real Property Records of Denton County, Texas. (vi) Protrusion of concrete drive along the South boundary line as shown on the survey by Paul Justin Whitlock, RPLS No. 6243, dated August 25, 2011. (vii) Over head utility lines and poles in place as shown on the survey by Paul Justin Whitlock, RPLS No. 6243, dated August 25, 2011. (viii) Protrusion of fence and debris pile along the North boundary line as shown on survey prepared by Paul Justin Whitlock, RPLS No. 6243, dated August 25, 2011. (ix) Protrusion of gravel drive over the East boundary line as shown on survey f�,repared by Paul Justin Whitlock, RPLS No. 6243, dated August 25, 2011. and appurtenances thereto in anywise belonging unto Grantee and Grantee's successors and assigns forever; and Grantor does hereby bind Grantor and Grantor's successors and assigns to WARRANT AND FOREVER DEFEND all and singular the Property unto Grantee and Grantee's successors and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof. EXECUTED the day of 2011 BLACK BEAR PROPERTIES,Texas limited liability company By: NIBSTONE MANAGEMENT, a Texas limited liability company, Manager By: ... . . . ... --- - ----- ir--- GENE NIBLETT, MANAGER General Warranty Deed Page 2 of 4 COUNTY OF b15�WMV § This iinstrunjent was acknowledged before me oof . ......... 2011, by Gene Niblett, Manager of Nibstone Management, a Texas finii(ed liability company, Manager of Black Bear Properties, LLC, a Texas limited liability company, on behalf of said limited liability company. u . ........... . . lell��e.-�' e iblic, State ol'Texas My co'41111issioti expires: ooly P�ihlic, SOW of'(WO, ";I'hfifilibdoll NOW Y- mWo'Himuff-, . I OF I,a j. J STIN WHITLOCK ClerkDenton County Cynthia Mitchell County Denton, Tx 76202 Instrument Number: 2011-82091 As Recorded ® August 31, 2011 Warranty listed above Examined and C arged as Follows: * Total Recording; 27.00 Billable Pages: NumberPages: DO NOT Any provision b . d REAL PROPERTY ber, a. yTio or race Is Invalid and unenforceable under federal File Inf®rtnatione Record and Return To: Document Number: 2011-82091 Receipt Number: 824665 TITLE Recorded t 1 August 31, 2011 03:24:26P WILL CALL DENTON TX 76202 User / Station: D Ki ill r ® Cash Station rljj�r THE STATE OF TEXAS) COUNTY OF D e, , ,X F O , Denton x �w b Co , Clerk r F/ CWTITLE RESO� C ��E . ..... S DATE: November 18, 2011 GFNO: 111741 TO: CITY OF DENTON, TEXAS, a Texas Home Rule Municipal Corporation 901-A TEXAS STREET DENTON, Texas 76209 RE: Owner's Title Policy (Texas Form T-1) regarding the property described in the above referenced file as M. FORREST SURVEY, Abstract #417, Denton County, Texas and being commonly known as 4001 E MCKINNEY ST, DENTON, TEXAS 76208 ("Property"). We are pleased to enclose an Owner's Title Policy No. 91143-7465 from TITLE RESOURCES GUARANTY COMPANY, issued in connection with the purchase of the property described in the Title Policy. The enclosed Title Policy is an important legal document, so please safeguard it with your other important papers. TITLE RESOURCES appreciates the opportunity to be of service to you and hope that you will remember us should you have a future need for the services of a title company. Please call if you have any further questions or if we can be of further assistance. Thank you again for letting TITLE RESOURCES help you with the purchase of your property. Gail Green Policy Processor gail@trnt.net 525 South Loop 288 Suite #125 * Denton, Texas 76205 10 Office (940) 381-1006 * Metro (940) 243-2913 * Fax (940) 898-0121 . ............. -- ............. File No 111741 Polic No. 91143 - 7465 Premium: $6,128.35 OWNER'S POLICY OF TITLE INSURANCE Issued by Title Resources Guaranty Company Any notice of claim and any other notice or statement in writing required to be given the Company under this Policy must be given to the Company at the address shown in Section 18 of the Conditions. COVERED RISKS SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS, TITLE RESOURCES GUARANTY COMPANY, a Texas corporation (the "Company") insures, as of Date of Policy and, to the extent stated in Covered Risks 9 and 10, after Date of Policy, against loss or damage, not exceeding the Amount of Insurance, sustained or incurred by the Insured by reason of: 1. Title being vested other than as stated in Schedule A. 2. Any defect in or lien or encumbrance on the Title. This Covered Risk includes but is not limited to insurance against loss from: (a) A defect in the Title caused by: (i) forgery, fraud, undue influence, duress, incompetency, incapacity or impersonation; (ii) failure of any person or Entity to have authorized a transfer or conveyance; (ihi) a document affecting Title not properly created, executed, witnessed, sealed, acknowledged, notarized or delivered; (iv) failure to perform those acts necessary to create a document by electronic means authorized by law; (v) a document executed under a falsified, expired or otherwise invalid power of attorney; (vi) a document not properly filed, recorded or indexed in the Public Records including failure to perform those acts by electronic means authorized by law; or (vii) a defective judicial or administrative proceeding. (b) The lien of real estate taxes or assessments imposed on the Title by a governmental authority due or payable, but unpaid. (c) Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land. The term "encroachment" includes encroachments of existing improvements located on the Land onto adjoining land, and encroachments onto the Land of existing improvements located on adjoining land. (d) Any statutory or constitutional mechanic's, contractor's, or materialman's lien for labor or materials having its inception on or before Date of Policy. 3. Lack of good and indefeasible Title. 4. No right of access to and from the Land. 5. The violation or enforcement of any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting or relating to: (a) the occupancy, use or enjoyment of the Land; (b) the character, dimensions or location of any improvement erected on the Land; (c) subdivision of land; or (d) environmental protection if a notice, describing any part of the Land, is recorded in the Public Records setting forth the violation or intention to enforce, but only to the extent of the violation or enforcement referred to in that notice. 6. An enforcement action based on the exercise of a governmental police power not covered by Covered Risk 5 if a notice of the enforcement action, describing any part of the Land, is recorded in the Public Records, but only to the extent of the enforcement referred to in that notice. 7. The exercise of the rights of eminent domain if a notice of the exercise, describing any part of the Land, is recorded in the Public Records. 8. Any taking by a govwr°rmental body that has occurred and is binding on the rights of a purchaser for value without Knowledge. 9. Title being vested other than as stated 'in Schedule A or being defective: (a) as a result of the avoidance in whole or in part, or from a court order providing an alternative remedy, of a transfer of all or any part of the title to or any interest in the Land occurring prior to the transaction vesting Title as shown in Schedule A because that prior transfer constituted a fraudulent or preferential transfer under federal bankruptcy, state insolvency or similar creditors' rights laws; or (b) because the instrument of transfer vesting Title as shown in Schedule A constitutes a preferential transfer under federal bankruptcy, state insolvency or similar creditors' rights laws by reason of the failure of its recording in the Public Records: (i) to be timely, or (ii) to impart notice of its existence to a purchaser for value or a judgment or lien creditor. 10. Any defect in or lien or encumbrance on the Title or other matter included in Covered Risks 1 through 9 that has been created or attached or has been filed or recorded in the Public Records subsequent to Date of Policy and prior to the recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A. The Company will also pay the costs, attorneys' fees and expenses incurred in defense of any matter insured against by this Policy, but only to the extent provided in the Conditions. Title Resources Guaraul)� Company m .................. _ ,_..... Ane'ti,itri uri Signature Executive Vice PforAf,rir T!W Resoull s LLC Form T-1: Owner's Pun,y v, a Effective 2/01/2010 De*n, rA 76=4616 TLTA T-I OWNER'S POLICY (2/1/10) Policy No..: 91143 7465 TITLE RESOURCES GUARANTY COMPANY SCHEDULE A I TITLE 101','SO1JRCES G1111JARVITY COMPAINY File No.: 111741 Amount of Insurance: $940,000.00 Premium: $6,12835 Date of Policy: August 31, 2011 1. Name of Insured: CITY OF DENTON, TEXAS, a Texas Home Rule Municipal Corporation 2. The estate or interest in the Land that is insured by this policy is: W� M 3. Title is insured as vested in: CITY OF DENT, TEXAS, a Texas Home Rule Municipal Corporation 4. The Land referred to in this policy is described as follows: File No,:: 111741 Page 11 of 4 08TLFA -T-4 Owneirs Pofty I'LTAT-I OWNER'S POLAICY (2/1/10) 1 1 Policy No.: 91143-7465 re lv,,,'rEs to is mal (""ertwv� tract cland gOaAateec ,n the PA Fnrresl Ar)sltacl 11hinfl,'jor 4-7, DHraw'i Co,,,Arity, lexas aid: DeUIC EW 0 U G00[i Al C24 acrc trzic,l of tanc descrb&d in a deprj ir,,),T,, Tro,,, 1) Gdenn and Sylya Ja GleM'i Tws�ees of the D Gdveirn, and F'*yW JC Gel era Revocalt')Ie bwriq I mast tc, ENack, Bear propflrtlrs' as rc'r.rzwdwl in C,,,xinty Veik f (je NUrnbe, 21.*4-15454EReal k�e:,orcnr, Ewit,,,vi C,'otinty as, retvqqri7v!rj AIXI 0r�cur(,,eo on tyne gro,ind, trracl beirg rrore parbrLIIWTV as fokjws BERNN0,11r.; at an CuD rmi foor)'n at tdl anter&e"tic, , �n rid vw' lame, Of East �ArAnne, ,y Strr,iet apd thr, L""'-Jst ijr'e Of vaytdi R,,-,wx,, tar the O'f tle Jwre n drscr[ oed trv,'A' ariCI 0)6 901,J ct, f Iles ()d ,4, U84 acre trwr 'THENC',E NrWrth 00 ch""qw,cws nB rnfntet'd sA4"I(or "' 'ds lk(Vast vv"tn the "i C Vayt'01 Road 4arxr the West WDf Z_024 a-�re iistarci' o fee Irr : SOL) n'ak rx1rxi ,'or tie tvlhweisl -orni,,�, o)prnr,)thc'� Sf,'%,,ItnweSJ ccrr'el )f a Cf 111e"scnbed Iin q alevd 'c V(be fIwes"r'wnl b")arners LIA", Rt-"�H� as, reccr:ded w, r-be NLOT"br-M 7L Der'llon Cagintyll "Texas THENCE Snr ,Alh �89 degrays, '18 rnbsutes 16 saiwinds Eas", the Soutrq Vmiivof i:tvd t�w Norlh line & sMd 4�024 tact tjart s dreT0ance� of 314-31 4wttu a cav,rxd ron rod fouirlcfor, ar eP r.irner, in,ft Norlt) Hne thvwf, the Cornew 0 Sad ftle Inviestn)ent Pa[wers kract ant'l w&D De0c u11, the V'Vesl I[aTe Of Vie rarnaindeir &'a bact of land desicdbirad M a dead h) Troy ' ta Q*nn, 85 rer,orde(I in Vahinie 1108, Page IRecords, Denton Ciour�tv, Tpxlas, ',3'oLAh 01 degrees 00 rnMteS 53 '9,PC0rd8 West wth JX~ VVE,�St thfneof a d,I8stwtco 0e 2,00 fPrt,, ,,c a cp.:,,.pad ir)')n rod IaLind fcr a Ixrner on thir" V'Ves:, Fn�.,,9 of sr,4rJ Citeriv, aric, Ws� .,,*), t)oing oan irPiw eiH corner qn vie ND,,,d , dOe of said 4.024 airre tract� THENICE 76 degrtit,, 5P rnin,stes 22 seconds E',�'as"' vv',10' North kre� raid a St")jth brie c,)a sajo C, der" rir ,,ract pan of wly, 101 VIT a (jqstjrre of 192 T9 fiep,t m a czawx,,�,o arx, INJ fOU110 OiFe,' d4W`thedSl, iu,oirner of 6d 4 r024 acre trart, a distance of 370.51 feet to a capped iron rod found in the said North line of Fast McKinney Street for the Southeast comer of said 4.024 acre tract; 1410ilth 77699i'auS 01 M�MIIWS 10 sew W,91i'Vest vwffli the SOUCI I ieireof and �ha lijart,�, bne iolf said S"el a of W,7(), teet bi�!H] W PLfigE (W BEGHNNNG arid encIrAing, 111102 imcres of Illkind r'iiiowie or Ile,ss yp mRgWNy 1��' tl'Rnii-Any Matow�clnlThi", CornImn'11U1lbi :11) the 6NIve devil oJ!ffi'(Iuu 0liVeh 01 VjIfi:IPfljv (�u! Wir�dl IS nio, 6 tMat sucrii arei�. or ii:xirrind " bid is m6'1' ordy foill 1111111011ril vionali andJlllii�!i,njiw)�JkMkln p�n!H PIIOS�5 R111W dIDIES, RDt !)VeFfiI!J0 IgCM 2 nD111 sid rCdulie 0, loll n ed"', File Noa 17C Page 2 of 4 teas TLFA Owner's Pod cy TLTA T-1 OWNER'S POLICY (2/1/10) Policy No.: 91143-7465 TITLE RESOURCES GUARANTY COMPANY SCHEDULEB EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) that arise by reason of the terms and conditions of the leases and easements, if any shown in Schedule A, and the following matters: ITTVOT r1rommm � I specific recording data or delete this exception): NEW= 4. Any titles or rights asserted by anyone, including but not limited to, persons, the public, corporations, governments or other entities, a. to tidelands, or lands comprising the shores or beds of navigable or perennial rivers and streams, lakes, bays, gulfs or oceans, or b. to lands beyond the line of the harbor or bulkhead lines as established or changed by any government, or c. to filled -in lands, or artificial islands, or d. to statutory water rights, including riparian rights, or e. to the area extending from the line of mean low tide to the line of vegetation, or the right of access to that area or easement along and across that area. 5. Standby fees, taxes and assessments by any taxing authority for the year 2011, and subsequent years; and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership, but not those taxes or assessments for prior years because of an exemption granted to a previous owner of the property under Section 11.13, Texas Tax Code, or because of improvements not assessed for a previous tax year. 6. The following matters and all terms of the documents creating or offering evidence of the matters (The Company must insert matters or delete this exception): a. Rights of third parties with respect to those portions of the subject property which lies within the boundaries of Mayhill Road along the West boundary line as shown on the survey by Paul Justin Whitlock, RPLS No. 6243, dated August 25, 2011. b. Easement executed by D. S. CARPENTER, ETAL to TEXAS POWER & LIGHT COMPANY filed May 19, 193 6, recorded in Volume 256, Page 495, Deed Records of Denton County, Texas. (Blanket type easement is unlocatable by description per survey by Paul Justin Whitlock, RPLS No. 6243, dated August 25, 2011) Easement executed by TROY GLENN to TEXAS POWER & LIGHT COMPANY filed July 14, 1972, recorded in Volume 650, Page 65 1, Deed Records of Denton County, Texas. (Blanket type easement does affect by granting an "easement and right of way for an electric transmission distribution line" with "the right to relocate said File No.: 111741 Page 3 of 4 08 TLTA — T-1 Owner's Policy TLTA T-1 OWNER'S POLICY (2/1/10) Policy No.: 91.143-7465 lines in the same relative position to any adjacent road if and when the road is widened in the future", width of easement and/or right of way not defined by instrument per survey by Paul Justin Whitlock, RPLS No. 6243, dated August 25, 2011) d. Undivided 1/2 interest in Oil, Gas and other Minerals reserved in deed from CARPENTER to R. M. MILLS and wife SUSIE MAY MILLS filed March 1, 195 1, recorded in Volume 367, Page 619, Deed Records of Denton County, Texas. (Title to said interest not checked subsequent thereto.) (May be amended upon obtaining surface waiver agreement) e. Undivided 1/2 interest in Oil, Gas and other Minerals conveyed by Mineral Deed from D. S. CARPENTER to ROY C. PHIPPS filed March 12, 195 1, recorded in Volume 3 68, Page 38, Deed Records of Denton County, Texas. (Title to said interest not checked subsequent thereto.) (May be amended upon obtaining surface waiver agreement) f. Subject to terms and conditions of Boundary Line Agreement by and between MILDRED MORRIS and TROY GLENN and SYLVA JO GLENN, filed September 30,1986, recorded in Volume 1991, Page 176, Real Property Records of Denton County, Texas. g. Protrusion of concrete drive along the South boundary line as shown on the survey by. Paul Justin Whitlock, RPLS No. 6243, dated August 25, 2011. h. Over head utility lines and poles in place as shown on the survey by Paul Justin Whitlock, RPLS No. 6243, dated August 25, 2011. No liability is assumed by protrusion of fence and debris pile along the North boundary line as shown on survey prepared by Paul Justin Whitlock, RPLS No. 6243, dated August 2, 2011. (Obtain and file for record a boundary agreement executed by owners of the real property wherein the fence herein described is located, establishing the boundary line of the property as fenced.) j. No liability is assumed by reason of protrusion of gravel drive over the East boundary lin* as shown on survey prepared by Paul Justin Whitlock, RPLS No. 6243, dated August 25, 2011. File No.: I 11741 Page 4 of 4 08 "I'LTA T. I Owner's Policy EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay |naw or damage, uoots, attorneys' fees or expenses that arise byreason of: (a) Any law, mdinanoe, permit, or governmental regulation (including those relating to building and zoning) reetricting, mgw|odng, prohibiting or relating to: Wthe occupancy, use, or enjoyment of the Land; VVthe character, dimensions orlocation ofany improvement erected onthe Land; (iiVsubdivision ofland; or @0environmental vrthe effect many violation of these |a*o, ordinances or governmental regulations. This Exclusion 1(a)Uoes not modify o,limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion I (b) does not modify or limit the coverage provided under Covered Risk 6. Defects, liens, encumbrances, adverse claims mother matters: (a)created, suffered, assumed oragreed tnbythe Insured Claimant; (b) not Known to the Cumpany, not recorded in the Public Records at Date mfPolicy, but Known to the Insured Claimant and not disclosed in writing tothe Company hythe Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting innoloss ordamage tothe Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk oand 1o); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction vesting the Title eo shown in Schedule A, is: $Vofraudulent conveyance nrfraudulent transfer; mr (b)upreferential transfer for any reason not stated ioCovehadRisk 9ufthis policy. s. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A. s.The refusal nfany person to purchase, lease or lend money on the estate or interest covered hereby in the land described in Schedule A because of Unmarketable Title. CONDITIONS 1.DEFINITION OFTERMS. The following terms when used inthis policy mean: (a)"Amount of|navranow^: the amount stated in Schedule A, as may be increased or decreased by endorsement to this policy, increased by Section e(b).ordecreased bySections 10and 11 ofthese Conditions. (N"Date nfpn||ny^:The date designated oa"Date vfPolicy" inSchedule *. (c)^EnUty^:Acorporation, partnership, trust, limited liability company nrother similar legal entity. (d)^|nmumd^: the Insured named in Schedule A, WThe term "Insumd also includes: (A) successors to the Title of the Insured by operation of law as distinguished from purchase, including heirs, devisees, survivors, personal representatives ornext ofkin; (B) successors toon Insured by dissolution, merger, cnnwo|idmdon, distribution or reorganization; (C)auccmemors toanInsured byits conversion »oanother kind ofEntity; (D) a grantee of an Insured under a deed delivered without payment of actual valuable consideration conveying the Title; (1)|fthe stock, shares, memberships, orother equity intermats of the grantee are wholly -owned bythe named Insured, (z)|fthe grantee wholly owns the named Insured, (8)|fthe grantee is wholly -owned by an affiliated Entity of the named Insured, provided the affiliated Entity and the named Insured are both wholly- ownedbytheeamepamonorEntity.or (4) If the grantee is a trustee or beneficiary of a trust created by a written instrument established by the Insured named in Schedule A for estate planning purposes. (ii) With regard to (A), (B), (C) and (D) reserving, however, all rights and defenses as to any successor that the Company would have had against any predecessor Insured. (e)"Insured Qaimanr:anInsured claiming loss urdamage. 0V^KnmwlaUge^or^Knnwn^:actual knowledge,notnonntructhmhnowledgenrnotimathatmaybvknputedman|nnumdbyreaannnfthePub|icReoordn or any other records that impart constructive notice of matters affecting the Title. (Q)^Lond'':the land described mSchedule A.and affixed improvements that bylaw constitute real property. The term ^Lang^does not include any property beyond the lines of the area described in Schedule A, nor any right, title, interest, estate or easement in abutting streets, roads, avenues, alleys, lanes, ways nrwaterways, but this does not modify orlimit the extent that aright ofaccess toand from the Land ioinsured bythis policy. (h) "Mortgage": mortgage, deed of trust, trust deed, or other security instrument, including one evidenced byelectronic means authorized bylaw. (i) "Public weuordm^:records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property mpurchasers for value and without Knowledge. VVithespect to Covered Risk u(d)."Public Records" shall also include environmental protection liens filed inthe records ofthe clerk nfthe United States District Court for the district where the Land ialocated. 0)7iUm^: the estate urinterest described inSchedule A. (k) "Unmarketable Title": Title affected by an alleged or apparent matter that would permit a prospective purchaser or lessee of the Title' or lender on the Title to be released from the obligation to purchase, lease or lend if there is a contractual condition requiring the delivery of marketable title. Form T-1:Cwner's Policy ofTitle Insurance (For Use Only in Texas) l..:.ffecflve 2/01/2010 The coverage of this policy shall continue inforce as of Date of Policy in favor ofanInsured, but only so long asthe Insured retains onestate minterest 'nthe Land, orholds anobligation secured byapurchase Mortgage ws from the Insured, monly molong amthe Insured shall have liability by reason of warranties in any transfer or conveyance of the Title. This policy shall not continue in force in favor of any purchaser from the Insured m[either (i) an estate or interest in the Land, or (ii) an obligation secured by a purchase money Mortgage given to the Insured, u.NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT. The Insured shall notify the Company promptly (1) in case of any litigation as set forth in Section 5(a) below, or (h) in case Knowledge shall come to an Insured hereunder of any claim of title or interest that is adverse to the Title, as insured, and that might cause loss or damage for which the Company may be liable by virtue of this policy. If the Company is prejudiced by the failure of the Insured Claimant to provide prompt notice, the Company's liability mthe Insured Claimant under the policy shall ue reduced mthe extent ufthe prejudice, When, after the Date ofthe Policy, the Insured notifies the Company eorequired herein ofa lien, encumbrance, adverse claim urother defect inTitle insured Uythis policy that ionot excluded nrexcepted from the coverage ofthis policy, the Company shall promptly investigate the charge to determine whether the lien, encumbrance, adverse claim or defect or other matter is valid and not barred by law or statute. The Company shall notify the Insured in writing, within a reasonable time, of its determination as to the validity or invalidity of the Insured's claim or charge under the policy. If the Company concludes that the lien, encumbrance, adverse claim ordefect ianot covered hythis policy, or was otherwise addressed in the closing of the transaction in connection with which this policy was issued, the Company shall specifically advise the Insured of the reasons for its determination. If the Company concludes that the lien, encumbrance, adverse claim or defect is valid, the Company shall take one o(the following actions: (i) institute the necessary proceedings to clear the lien, encumbrance, adverse claim or defect from the Title esinsured; (ii) indemnify the Insured as provided in this policy; (iii) upon payment of appropriate premium and charges therefor, issue to the Insured Claimant or to a subsequent owner, mortgagee vrholder nfthe estate orinterest in the Land insured by this policy, a policy of title insurance without exception for the lien, encumbrance, adverse claim or defect, said policy to be in an amount equal to the current value of the Land or, ifaloan policy, the amount nfthe loan; (iv)indemnify another title insurance company in connection with its issuance of a policy(ies) of title insurance without exception for the lien, encumbrance, adverse claim or defect; (v) secure a release or other document discharging the lien, encumbrance, adverse claim ordefect; or(vVundertake ucombination vf(V through (wherein. 4.PROOF OFLOSS. In the event the Company is unable to determine the amount of loss or damage, the Company may, at its option, require as a condition of paymentthau the Insured Claimant furnish asigned proof ofloss The proof nfloss must describe the defect, lien, encumbrance nrother matter insured against uy this policy that constitutes the basis of loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage. 5.DEFENSE AND PROSECUTION OFACTIONS. (a) Upon written request by the Insured, and subject to the options contained in Sections 3 and 7 of these Conditions, the Company, at its own cost and without unreasonable delay, shall provide for the defense of an Insured in litigation in which any third party asserts a claim covered by this policy adverse to the Insured. This obligation is limited to only those stated causes of action alleging matters insured against by this policy. The Company shall have the right to select counsel of its choice (subject to the right of the Insured to object for reasonable cause) to represent the Insured as to those stated causes of action. It shall not be liable for and will not pay the fees of any other counsel. The Company will not pay any fees, costs mexpenses incurred bythe Insured in the defense of those causes of action that allege matters not insured against hythis policy. (b) The Company shall have the right, in addition to the options contained in Sections 3 and 7, at its own cost, to institute and prosecute any action or proceeding or to do any other act that in its opinion may be necessary or desirable to establish the Title, as insured, or to prevent or reduce loss or damage to the Insured. The Company may take any appropriate action under the terms of this policy, whether or not it shall be liable to the Insured. The exercise of these rights shall not be an admission of liability or waiver of any provision of this policy. |fthe Company exercises its rights under this subsection, |tmust doaodiligently. (c) Whenever the Company brings an action or asserts a defense as required or permitted by this policy,the Company may pursue the litigation ma final determination by a court of competent jurisdiction and it expressly reserves the right, in its sole discretion, to appeal from any adverse judgment or G.DUTY DFINSURED CLAIMANT TOCOOPERATE. (a)|nall cases where this policy permits or requires the Company to prosecute or provide for the defense of any action or proceeding and any appeals, the Insured shall secure mthe Company the right t000prosecute or providedefense |nthe action orproceeding, including the right to use, at its option, the name of the Insured for this purpose. Whenever requested by the Company,thm|uoued.ottheCvmpony'sexpenae.ohu|| DivethaCompanyaUroonunob|waid(i)inmeouhngewiUenoe.obtoiningwitneoaee.pmnenudngnrdefending the action orproceeding, or effecting settlement, and (ii)inany other lawful act that in the opinion of the Company may be necessary or desirable to establish the Title or any other matter as insured. If the Company is prejudiced by the failure of the Insured to furnish the required cooperation, the Company's obligations to the Insured under the policy shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, with regard tothe matter or matters requiring such cooperation. (b) The Company may reasonably require the Insured Claimant to submit to examination under oath by any authorized representative of the Company and to produce for examination, inspection and copying, at such reasonable times and places as may be designated by the authorized representative of the Company, all records, in whatever medium maintained, including books, ledgers, checks, memoranda, correspondence, reports, e-mails, disks, tapes, and videos whether bearing a date before or after Date of Policy, that reasonably pertain mthe loss or damage. Further, ifrequested byany authorizedrepresentative ofthoCnmpany.tho|nsunedC|oimantmhuUgrantitopmnnimm|on.in*rit|ng.forany authorized representative of the Company to examine, inspect and copy all of these records in the custody or control of a third party that reasonably pertain to the loss or damage. All information designated aoconfidential bythe Insured Claimant provided to the Company pursuant to this Section shall not be disclosed to others unless, in the reasonable judgment of the Company, it is necessary in the administration wfthe claim. Failure ofthe Insured Claimant to submit for examination under oath, produce any reasonably requested information or grant permission msecure reasonably necessary information from third parties as required inthis subsection, unless prohibited by law orgovernmental regulation, shall terminate any liability nfthe Company under this policy as tothat claim (c)|fthe Insured demands that the Company accept a settlement offer that is not greater than the Amount of Insurance or if the Insured expressly agrees that a settlement offer should be accepted, the Company has a right to be reimbursed if ithas timely asserted its reservation ofrights and notified the Insured that it intends to seek reimbursement if it pays to settle or defend a claim that is not covered by the policy. Form T-1: Owner's Policy of Title Insurance (For Use Only in Texas) Effective 2/01/2010 |ncase ofaclaim under this policy, the Company shall have the following additional options: $VToPay nrTender Payment o,the Amount orInsurance To pay or tender payment of the Amount of Insurance under this policy together with any costs, attorneys' fees and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment or tender of payment and that the Company |aobligated m pay. Upon the exercise by the Company of this option, all liability and obligations of the Company to the Insured under this policy, other than tumake the payment required in this subsection, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation. (b) To Pay or Otherwise Settle With Parties Other than the Insured or With the Insured Claimant. (i) to pay or otherwise settle with other parties for or in the name of an Insured Claimant any claim insured against under this policy. In addition, the Company will pay any costs, attorneys'fees and expenses incurred by the Insured Claimant that were authorized bythe Company upm the time of payment and that the Company is obligated to pay; or (I!) to pay or otherwise settle with the Insured Claimant the loss ordamage provided for under this policy, together with any costs, attorneys' fees and expenses incurred by the Insured Claimant that were authorized bythe Company vpm the time ofpayment and that the Company is obligated to pay. Upon the exercise by the Company of either of the options provided for in subsections (b)(i) or (ii), the Company's obligations to the Insured under this policy for the claimed loss or damage, other than the payments required to be made, shall terminate, including any liability or obligation to defend, prosecute or continue any litigation. uDETERMINATION AND EXTENT OFLIABILITY. This policy is a contract of indemnity against actual monetary loss or damage sustained nrincurred bythe Insured Claimant who has suffered loss or damage by reason of matters insured against by this policy. (a) The extent of liability of the Company for loss or damage under this policy shall not exceed the lesser of: (i)the Amount ofInsurance; m (ii) the difference between the value of the Title as insured and the value of the Title subject to the risk insured against by this policy. (b) If the Company pursues its rights under Section 3 or 5 and is unsuccessful in establishing the Title, aeinsured, <Vthe Amount nfInsurance shall ueincreased by1oY6.and (il) the Insured Claimant shall have the right to have the loss or damage determined either as of the date the claim was made by the Insured Claimant o,eeufthe date biesettled and paid. (c) In addition to the extent of liability under (a) and (b), the Company will also pay those costs, attorneys' fees and expenses incurred in accordance with Sections 5and 7ofthese Conditions. aLIMITATION QFLIABILITY. (a) If the Company establishes the Title, or removes the alleged defect, lien or encumbrance, or cures the lack of a right of access to or from the Land, all as insured, or takes action in accordance with Section 3 or 7, in a reasonably diligent manner by any method,including litigation and the completion nfany appeals, |tshall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused to the Insured. (b) In the event of any litigation, including litigation by the Company or with the Company's consent, the Company shall have no liability for loss o/ damage until there has been a final determination by a court of competent jurisdiction, and disposition of all appeals, adverse to the Title, as insured. (c) The Company shall not be liable for loss or damage to the Insured for liability voluntarily assumed by the Insured in settling any claim or suit without the prior written consent ofthe Company. 10. REDUCTION OFINSURANCE; REDUCTION ORTERMINATION mFLIABILITY, All payments under this policy, except payments made for costs, attorneys' fees and expenses, shall reduce the Amount of Insurance by the amount of the payment. 11.LIABILITY NONCUMULATIVE, The Amount ofInsurance shall bereduced byany amount the Company pays under any policy insuring aMortgage 0owhich exception iotaken in Schedule B or to which the Insured has agreed, assumed, or taken subject or which is executed by an Insured after Date of Policy and which is a charge or lien on the Title, and the amount so paid shall be deemed a payment to the Insured under this policy. 12. PAYMENT OFLOSS. When liability and the extent o[loss ordamage have been definitely fixed in accordance with these Conditions, the payment shall be made within 30 days. 13.RIGHTS OFRECOVERY UPON PAYMENT OR SETTLEMENT. V$Whenever the Company shall have settled and paid aclaim under this policy,it shallhe subrog@ted and entitledmthe rights ofthe Insured Clait in the Title and all other rights and remedies in respect to the claim that the Insured Claimant has against any person or property, to the extent of the amount of any loss, costs, attorneys' fees and expenses paid by the Company. If requested by the Company, the Insured Claimant shall execute documents to evidence the transfer to the Company of these rights and remedies. The Insured Claimant shall permit the Company to sue, compromise or settle in the name of the Insured Claimant and to use the name of the Insured Claimant in any transaction or litigation involving these rights and remedies If a payment on account of a claim does not fully cover the loss of the Insured Claimant, the Company shall defer the exercise of its right to recover until after the Insured Claimant shall have recovered its loss. (b) The Company's right of subrogation includes the rights of the Insured to indemnities, guaranties, other policies of insurance or bonds, notwithstanding any terms orconditions contained in those instruments that address subrogation rights. 1*.ARB|TRATDW. Either the Company the Insured may demand that the claim or controversy shall be submitted to arbitration pursuant to the Title Insurance Arbitration Rules oythe American Land Title Association ("Rules"). Except as provided in the Rules, there shall be no joinder or consolidation with claims or controversies ofother persons. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the Insured arising out of or relating to this policy, any service in connection with its issuance or the breach of a policy provision, or to any other controversy or claim arising out m[the transaction giving rise tuthis policy. All arbitrable matters when the Amount of Insurance is $2,000,000 or less shall be arbitrated at the option of either the Company or the Insured, unless the Insured is an individual person (as distinguished from an Entity). All arbitrable matters when the Amount of Insurance is in excess of $2,000,000 shall be arbitrated only when agreed to by both the Company and the Insured. Arbitration pursuant to this policy and under the Rules shall be binding upon the parties. Judgment upon the award rendered by the Arbitrator(s) may be entered inany court of competent jurisdiction. Form T-1: Owner's Policy of Title Insurance (For Use Only in Texas) Effective 2/01/2010 A$Thivpolicy together with all endorsements, if any, attached to it by the Company is the entire policy and contract between the Insured and the Company. |ninterpreting any provision ofthis policy, this policyshall beconstrued ooa whole, Any claim ofloss nrdamage that arises out ofthe status of the Title or by any action asserting such claim, shall berestricted tothis policy. (c) Any amendment of or endorsement to this policy must be in writing and authenticated by an authorized person, or expressly incorporated by Schedule Anfthis policy. (d) Each endorsement to this policy issued at any time is made a part of this policy and is»oall vfits terms and provisions. Except anthe endorsement expressly states, |tdoes not (Vmodify any ofthe terms and provisions ufthe policy, (ii)modify any prior endorsement, (iii)extend the Date ofPolicy or (iv) increase the Amount of Insurance. Each Commitment, endorsement or other form, or provision in the Schedules to this policy that refers toaterm defined inSection 1ofthe Conditions shall bedeemed to refer to the term regardless of whether the term is capitalized in the Commitment, endorsement nrother form, urSchedule. Each Commitment, endorsement or other form, or provision in the Schedules that refers tothe Conditions and Stipulations shall bedeemed torefer m the Conditions nfthis policy. 16.SEVEFuB!Lrr/ In the event any provision of this policy, in whole or in part, is held invalid or unenforceable under applicable law, the policy shall be deemed not to include that provision or such part held to be invalid and all other provisions shall remain in full force and effect. 1rCHOICE OpLAW; FORUM. (a) Choice of Law: The Insured acknowledges the Company has underwritten the risks covered by this policy and determined the premium charged therefor in reliance upon the law affecting interests in real property and applicable to the interpretation, rights, remedies or enforcement of policies of title insurance of the jurisdiction where the Land is located. Therefore, the court o,onarbitrator shall apply the law ofthe jurisdiction where the Land is located to determine the validity of claims against the Title that are adverse mthe Insured, and ininterpreting and enforcing the terms ofth|e policy. In ither case shall thrt or arbitrator apply its conflicts of laws principles to determine the applicable law. u4Choice mForum: Any litigation orother proceeding brought by the Insured against the Company must bafiled only inastate orfederal court within the United States o[America orits territories having appropriate jurisdiction. 18.NOTICES, WHERE SENT Any nu of claim and any other notice or statement in writing required to be given the Company under this Policy must be given to the Company at Form T-1: Owner's Policy of Title Insurance (For Use Only in Texas) Effective 2/01/2010 IMPORTANT NOTICE To obtain information or make a complaint: 1. You may contact your title insurance agent at (940) 381-1006. 2. You may call TITLE RESOURCES GUARANTY COMPANY's toll -free telephone number for information or to make a complaint: (insert underwriter information), 3. You may also write to TITLE RESOURCES GUARANTY COMPANY at (insert underwriter information), 4. You may contact the Texas Department of Insurance to obtain information on companies, coverages, rights or complaints at 1-800-252-3439. 5. You may write the Texas Department of Insurance, P.O. Box 149104 Austin, TX 78714-9104 Fax: (512) 475-1771 Web: http://www.tdi.state.tx.us E-mail: ConsumerProtection@.td1.state.tx.us PREMIUM OR CLAIM DISPUTES: Should you have a dispute concerning your premium or about a claim you should contact the title insurance agent first. If the dispute is not resolved, you may contact the Texas Department of Insurance. ATTACH THIS NOTICE TO YOUR POLICY: This notice is for information only and does not become a part or condition of the attached document. AVISO IMPORTANTE Para obtener informacion o para someter una queja: 1, Puede comunicarse con su agente de seguro de titulo al (940) 381-1006. 2. Usted puede Ilamar al numero de telefono gratis de TITLE RESOURCES GUARANTY COMPANY's para informacion o para someter una queja al (insert underwriter information), 3. Usted tambien puede escribir a TITLE RESOURCES GUARANTY COMPANY: (insert underwriter information). 4. Puede comunicarse con el Departamento de Seguros de Texas para obtener informacion acerca de companias, coberturas, derechos o quejas al: 1-800-252-3439 5. Puede escribir al Departamento de Seguros de Texas: P.O. Box 149104 Austin, TX 78714-9104 Fax: (512) 475-1771 Web: http://www.tdi.state.tx. us E-mail: ConsumerP rotection @td i. state. tx.us DISPUTAS SOBRE PRIMAS 0 RECLAMOS: Si tiene una disputa concerniente a su prima o a un reclamo, debe comunicarse con el agente de seguro de titulo primero, Si no se resuelve la disputa, puede entonces comunicarse con el departamento (TDI). UNA ESTE AVISO A SU POLIZA: Este aviso es solo para proposito de informacion y no se convierte en parte o condicion del documento adjunto. (i) ® FT (6/2001) Title V of the Granun-Leach-Bliley Act (GLBA) generally prohibits any financial institution, directly or through its affiliates, from sharing nonpublic personal information about you with a nonaffiliated third party unless the institution provides you with a notice of its privacy policies and practices, such as the type of information that it collects about you and the categories of persons or entities to whom it may be disclosed. In compliance with the GLBA, we are providing you with this docurnent, which notifies you of the privacy policies and practices of TITLE RESOURCES, LLC. ("TITLE RESOURCES"). We may collect nonpublic personal information about you from the following sources: • Information we receive from you, such as on applications or other forms. • Information about your transactions we secure from our files, or from our affiliates or others. • Information we receive fi-om a consumer -reporting agency. • Information that we receive fi-om others involved in your transaction, such as the real estate agent or lender. Unless it is specifically stated otherwise in an amended Privacy Policy Notice, no additional nonpublic personal information will be collected about you. We may disclose any of the above information that we collect about our customers or former customers to our affiliates or to nonaffiliated third parties as permitted by law. We also may disclose this information about our customers or foriner customers to the following types of nonaffiliated companies that perform marketing services on our behalf or with whom we have joint marketing agreements: • Financial service providers such as companies engaged in banking, consumer finance, securities and insurance. • Non -financial companies such as envelope stuffers and other fulfillment service providers. WE DO NOT DISCLOSE ANY NONPUBLIC PERSONAL INFORMATION ABOUT YOU WITH ANYONE FOR ANY PURPOSE THAT IS NOT SPECIFICALLY PERMITTED BY LAW. We restrict access to nonpublic personal information about you to those employees who need to know that information in order to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information. FT (6/2001) Title V of the Grainin-Leach-Bliley Act (GLBA) generally prohibits any financial institution, directly or through its affiliates, fi-orn sharing nonpublic personal information about you with a nonaffiliated third party unless the institution provides you with a notice of its privacy policies and practices, such as the type of information that it collects about you and the categories of persons or entities to whom it may be disclosed. In compliance with the GLBA, we are providing you with this document, which notifies you of the privacy policies and practices of. We may collect nonpublic personal information about you from the following sources: • Information we receive from you., such as on applications or other forms. • Information about your transactions we secure fi-om our files, or from our affiliates or others. • Information we receive from a consumer reporting agency, • Information that we receive from others involved in your transaction, such as the real estate agent or lender. Unless it is specifically stated otherwise in an amended Privacy Policy Notice, no additional nonpublic personal information will be collected about you. We may disclose any of the above information that we collect about our customers or former customers to our affiliates or to nonaffiliated third parties as permitted by law. We also may disclose this information about our customers or former customers to the following types of nonaffiliated companies that perform marketing services on our behalf or with whom we have joint marketing agreements: • Financial service providers such as companies engaged in banking, consumer finance, securities and insurance. • Non -financial companies such as envelope stuffers and other fulfillment service providers. WE DO NOT DISCLOSE ANY NONPUBLIC PERSONAL INFORMATION ABOUT YOU WITH ANYONE FOR ANY PURPOSE THAT IS NOT SPECIFICALLY PERMITTED BY LAW. We restrict access to nonpublic personal inforination about you to those employees who need to know that information in order to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information. L, I:p