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2007-262v . _ 1, s:\our documents\ordinances\07\1.943 acre purchase-se comer exposition & hickory.doc ORDINANCE NO. 2007- AN ORDINANCE OF THE CITY OF DENTON, TEXAS APPROVING A REAL ESTATE CONTRACT BETWEEN THE CITY OF DENTON AND ERI - EXPOSITION & HICKORY, L.P. RELATING TO THE PURCHASE OF AN APPROXIMATE 1.125 ACRE TRACT BEING LOT 1, BLOCK 1, FORD PROPERTIES ADDITION, RECORDED IN CABINET E, PAGE 242 OF THE PLAT RECORDS OF DENTON COUNTY, TEXAS AND AN APPROXIMATE 0.818 ACRE TRACT OF LAND, BOTH TRACTS BEING LOCATED IN THE H. SISCO SURVEY, ABSTRACT NO. 1184, CITY AND COUNTY OF DENTON, TEXAS, TOGETHER WITH IMPROVEMENTS, FOR PUBLIC USE; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, the City of Denton, Texas is desirous of entering into a Real Estate Contract with ERI - EXPOSITION & HICKORY L.P., a Texas limited partnership, as Sellers, to acquire approximately 1.943 acres of land as substantially in the form described in that certain Real Estate Contract attached hereto and made a part hereof by reference (the "Contract"); and WHEREAS, the City Council finds that the Contract serves valid municipal and public purposes and is in the public interest; NOW, THEREFORE, THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The findings and recitations contained in the preamble of this ordinance are incorporated herein by reference. SECTION 2. The Contract is hereby approved. The City Manager or his designee is hereby authorized to enter into the Contract, to make the expenditures provided for therein, and to carry out the City's rights and duties under the Contract. SECTION 3. This ordinance shall become effective immediately upon its passage and approval. PASSED AND APPROVED this the day of '2007. 9RAIJ, PERK . McNEIL , MAYOR ATTEST: JENNIFER WALTERS, CITY SECRETARY BY s:\our documents\ordinances\07\1.943 acre purchase-se comer exposition & hickory. doc APPROVED AS TO LEGAL FORM: EDWIN M. SNYDER, CITY ATTORNEY BY: Page 2 CONTRACT OF SALE THIS CONTRACT OF SALE (this "Contract") is made and entered into on the Effective Date (as hereinafter defined), by and between ERI - EXPOSITION & HICKORY, L.P., a Texas limited partnership ("Seller"), and City of Denton, Texas, a Home Rule Municipal Corporation ("Purchaser"). ARTICLE I. SALE OF THE PROPERTY 1.1 Subject Property. For the consideration and upon and subject to the terms, provisions and conditions of this Contract, Seller agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller, all that certain parcel of real property which is more fully described on Exhibit A attached hereto (the "Land") and all improvements (the "Improvements") and all of Seller's right, title and interest in and to the appurtenances (the "Appurtenances") located on or pertaining to the Land (the Land, Improvements and Appurtenances being collectively referred to herein as the "Property"); however Seller shall reserve from this conveyance all of the oil, gas and other minerals situated on, in and under the Property which are owned by Seller (the "Reserved Resources"). Seller shall waive and release, on behalf of Seller and Seller's successors and assigns, all rights of ingress and egress and all other rights to enter upon or to use the surface of the Property or any part thereof for purposes of exploring for, developing and/or producing the Reserved Resources in and under the Property; provided, however, nothing herein shall prevent Seller or its successors and assigns from exploring for, developing and/or producing the Reserved Resources in and under the Property by pooling or by directional drilling under the Property from well sites located on other property, so long as such activities do not damage the surface of the Property or any improvements thereon, or affect the Purchaser's ability to use the Property. The Property is subject to and encumbered by the Permitted Exceptions (as hereinafter defined) applicable to the Property. Notwithstanding the foregoing, the Property shall not include any personal property or any proprietary equipment or information belonging to Seller. ARTICLE II. PURCHASE PRICE 2.1 Purchase Price. The total Purchase Price (herein so called) to be paid by Purchaser to Seller for the Property is Six Hundred Fifty Thousand and No/100 Dollars ($650,000.00). The total Purchase Price shall be paid to Seller in Current Funds (as hereinafter defined) at Closing (as hereinafter defined). CONTRACT OF SALE ARTICLE III. EARNEST MONEY DEPOSIT 3.1 Earnest Money Deposit. Not later than five (5) business days after the Effective Date, Purchaser shall deliver to Senders Title, located at 220 San Jacinto Boulevard, Suite 310, Denton, Texas, 76205, Attention: Stacie Holbert (the "Title Company"), Six Thousand Five Hundred Dollars and No/100 Dollars $6,500.0) (the "Earnest Money Deposit") in Current Funds, to be held by the Title Company in escrow to be applied or disposed of by the title Company as is provided in this Contract. In the event Purchaser fails to deposit the Earnest Money Deposit with the Title Company as herein provided, Seller may, at its option, terminate this Contract, in which event neither Seller nor Purchaser shall have any further rights, duties or obligations hereunder except for provisions of this Contract which expressly survive the termination of this Contract. As used in this Contract, the term "Current Funds" shall mean wire transfers, certified funds or a cashier's check in a form acceptable to the Title Company that would permit the Title Company to immediately disburse such funds. 3.2 Application and Interest. If the purchase and sale hereunder is consummated, then the Earnest Money Deposit shall be applied to the Purchase Price at Closing to reduce the amount required under Section 8.2(b)(i) hereof In all other events, the Earnest Money Deposit shall be disposed of by the Title Company as provided in this Contract. The Title Company shall invest the Earnest Money Deposit in a federally insured interest-bearing account for the benefit of Purchaser at a bank deemed appropriate by the Title Company. All interest earned on the Earnest Money Deposit is part of the Earnest Money Deposit, to be applied or disposed of in the same manner as the Earnest Money Deposit under this Contract. 3.3 Demand for Earnest Money _Deposit. If for any reason the Closing does not occur and either party makes a written demand upon the Title Company for payment of the Earnest Money Deposit, the Title Company shall give written notice to the other party of such demand. If the Title Company does not receive a written objection from the other party to the proposed payment within ten (10) business days after, the giving of such notice, the Title Company is hereby authorized to make such payment. However, failure to make such objection does not constitute a waiver of any rights that a party may have as to the Earnest Money Deposit. If the Title Company does receive such written objection within such ten (10) business day period or if for any other reason the Title Company in good faith shall elect not to make such payment, the Title Company shall continue to hold such amount until otherwise directed by written instructions from both parties to this Contract or a final judgment of a court of competent jurisdiction which is not subject to further appeal. The parties acknowledge that the Title Company is acting solely as a stakeholder at their request and for their convenience, that the Title Company shall not be deemed to be the agent of either of the parties, except as expressly set forth herein, and that the Title Company shall not be liable to either of the parties for any act or omission on its part unless taken or suffered in bad faith, in willful disregard of this Contract or of any escrow agreement or involving gross negligence. The Title Company joins in the execution of this Contract solely for the purpose of acknowledging receipt of the Earnest Money Deposit and its agreement to hold the same pursuant to the terms hereof. CONTRACT OF SALE PAGE 2 3.4 Nonrefundable Consideration. Notwithstanding anything in this Contract to the contrary, a portion of the Earnest Money Deposit in the amount of One Hundred and No/100 Dollars ($100.00), which amount the parties bargained for and agreed to as consideration for Purchaser's exclusive right to inspect and purchase the Property pursuant to this Contract and for Seller's execution, delivery and performance of this Contract, will be non-refundable and will be distributed to Seller upon any termination of this Contract. Any provision of this Contract that states that the Earnest Money Deposit is to be returned to Purchaser means that the Earnest Money Deposit, less the non-refundable portion, is to be returned to Purchaser. ARTICLE IV. TITLE AND SURVEY 4.1 Title. Within twenty (20) days following the Effective Date, Purchaser shall cause the Title Company to deliver to Purchaser a title commitment (the "Title Commitment") for the Property, naming Purchaser as the insured, in the amount of the Purchase Price, together with copies of instruments, documents and agreements referenced in the Title Commitment that create or evidence conditions or exceptions to title affecting the Property (the "Exception Documents"). Within five (5) days after the Effective Date, Seller shall provide Purchaser the survey prepared by Adam Whitfield, RPLS No. 5786, dated August 6, 2007 (the "Survey"). Should an update be required by either Purchaser or Title Company, the updated survey cost shall be at the Purchaser's sole cost and expense. Purchaser shall promptly have copies of the Title Commitment and any updated Survey document(s) sent to Seller. 4.2 Review of Title and Survey. Purchaser shall have until ten (10) days after receipt of the last of the Title Commitment, Exception Documents and Survey in which to notify Seller in writing (the "Title Objection Notice") of any objections Purchaser has to any matters shown or referred to in the Title Commitment, the Exception Documents or Survey. Any title encumbrances, exceptions or other matters which are set forth in the Title Commitment, the Exception Documents or Survey, and to which Purchaser does not object within the aforementioned ten (10) day period, shall be deemed to be permitted exceptions to the status of Seller's title (such encumbrances, exceptions or other matters, together with such other matters included pursuant to other provisions of this Contract, shall be referred to as the "Permitted Exceptions"). 4.3 Obiections to Status of Title and Surv ey. If Purchaser properly objects to any item shown or referred to in the Title Commitment, Exception Documents or Survey within the ten (10) day period set forth in Section 4.2, Seller shall be given until ten (10) days after receipt of the Title Objection Notice to notify Purchaser whether or not Seller will cure, prior to Closing and at Seller's option and sole discretion but without any obligation to do so, any objection to the condition of title raised by Purchaser. If Seller notifies Purchaser that it elects not to cure any such objections, then Purchaser may, at its option exercisable within ten (10) days following the date of receipt by Purchaser of written notice from Seller stating that Seller is unable or unwilling to cure such objections, either (a) accept such title as Seller can deliver, in which case all exceptions to title set forth in the Title Commitment, Exception Documents and Survey which CONn2ACT of SALE PAGE 3 are not removed shall be deemed to be Permitted Exceptions, or (b) terminate this Contract by notice in writing to Seller in which event the Title Company shall return the Earnest Money Deposit to Purchaser and neither party shall have any further rights, duties or obligations hereunder, except for provisions of this Contract which expressly survive termination of this Contract. In the event Purchaser fails to notify Seller, within such ten (10) day period, that Purchaser has elected to proceed under either subpart (a) or (b) of the immediately preceding sentence, Purchaser shall be deemed to have elected to proceed under subpart (a), and this Contract shall remain in full force and effect. If Seller notifies Purchaser that it elects to cure any such objections but is unable to cure same by Closing or if Seller fails to notify Purchaser of its intentions with respect to such objections and fails to cure same by Closing, then Purchaser may, at its option, either (x) accept such title as Seller can deliver in which case the parties shall proceed with Closing and all exceptions to title set forth in the Title Commitment, Exception Documents and Survey which are not removed shall be deemed to be Permitted Exceptions, or (y) terminate this Contract by notice in writing to Seller at Closing, in which event the Title Company shall return the Earnest Money Deposit to Purchaser and neither party shall have any further rights, duties or obligations hereunder except for provisions of this Contract which expressly survive termination of this Contract. 4.4 Other Permitted Exceptions. The Permitted Exceptions shall include those matters shown in the Title Commitment, the Exception Documents, and Survey which become Permitted Exceptions pursuant to Sections 4.2 and 4.3 above and, in addition, the following: (a) taxes and assessments for the year in which Closing occurs and subsequent years; (b) liens and encumbrances arising after the date hereof to which Purchaser consents in writing; (c) building, zoning and subdivision laws and ordinances, and local, state and federal laws, rules and regulations; and (d) any title exceptions arising out of the acts of Purchaser. ARTICLE V. INSPECTION BY PURCHASER 5.1 Inspection Rights. Purchaser shall have a period of time commencing on the Effective Date and expiring at 5:00 p.m., Denton, Texas, time on the thirtieth (301i) day thereafter (the "Inspection Period"), within which to examine the Property and conduct its feasibility study thereof. Seller agrees that, during the Inspection Period, Seller will allow Purchaser and Purchaser's agents access to the Property during normal business hours to conduct soil and engineering, hazardous waste, marketing, feasibility, zoning and other studies or tests and to otherwise determine the feasibility of the Property for Purchaser's intended use. Notwithstanding the foregoing, (a) the costs and expenses of Purchaser's investigation shall be home solely by Purchaser, (b) prior to the expiration of the Inspection Period, Purchaser shall restore the Property to the condition which existed prior to Purchaser's entry thereon and investigation thereof to the extent the condition of the Property was affected by or as a result of the actions of Purchaser or its agents, contractors or representatives, (c) Purchaser shall not interfere, interrupt or disrupt the operation of Seller's business on the Property, (d) ih the event the transaction contemplated by this Contract does not close for any reason, Purchaser shall deliver to Seller a. descriptive listing of all tests, reports and inspections conducted by Purchaser with respect to the Property and deliver copies thereof to Seller, (e) Purchaser shall not permit any construction, mechanic's or materialman's liens or any other liens to attach to the Property CONTRACT OF SALE PAGE 4 or any portion thereof by reason of the performance of any work or the purchase of any materials by Purchaser or any other party in connection with any studies or tests conducted pursuant to this Section 5.1, (f) Purchaser shall give not less than two (2) business days notice to Seller prior to entry onto the Property and shall permit Seller to have a representative present during all investigations and inspections conducted with respect to the Property, and (g) Purchaser shall take all reasonable actions and implement all protections necessary to ensure that all actions taken in connection with the investigations and inspections of the Property, and all equipment, materials and substances generated, used or brought onto the Property pose no material threat to the safety of persons or the environment and cause no damage to the Property or other property of Seller or other persons. Except as otherwise provided in this Section 5.1, and subject to the requirements of the Texas Public Information Act, being Chapter 552 of the Texas Government Code (the "Act"), this Contract, the terns and conditions of this Contract, and all information made available by Seller to Purchaser in accordance with this Contract or obtained by Purchaser in the course of its investigations shall be treated as confidential information by Purchaser, and, prior to the purchase of the Property by Purchaser, Purchaser shall prevent its agents and employees from divulging such information to any third parties except as reasonably necessary to third parties engaged by Purchaser for the limited purpose of analyzing and investigating such information for the purpose of consummating the transaction contemplated by this Contract, including Purchaser's attorneys and representatives, prospective lenders and engineers; provided, that there shall be no limitation on any party hereto regarding the disclosure by such party to any other person or entity of the tax treatment or tax structure of the transactions described herein. To the extent permitted by law, Purchaser shall indemnify, defend and hold Seller harmless for, from and against any and all claims, liabilities, causes of action, damages, liens, losses and expenses (including, without limitation, attorneys' fees and costs) incident to, resulting from or in any way arising out of any of Purchaser's or its agents', contractors' or representatives' activities on the Property (including, without limitation, any tests or inspections conducted by Purchaser or its agents, contractors or representatives on the Property) or from Purchaser's breach of its obligations or agreements under this Article V. Purchaser's indemnity obligations contained in this Section 5.1 shall survive the Closing and not be merged therein and shall also survive any termination of this Contract. Copies of any and all reports which Purchaser obtains pursuant "to this Section 5.1 shall be promptly provided to Seller. Notwithstanding anything herein to the contrary, the parties recognize that this Contract will become a public document under the Act once it is placed on the Denton City Council's agenda for approval. As such the parties understand and agree that it will be available for review and reproduction by any member of the public. Such public disclosure of this Contract and its contents will not violate this section. 5.2 ADDroyal of Inspections. If Purchaser determines at any time prior to the expiration of the Inspection Period that the Property is not satisfactory to Purchaser, then Purchaser may terminate this Contract for any reason by delivering written notice of termination to Seller, in accordance with the provisions of Section 12.1 hereof, prior to the end of such Inspection Period stating that Purchaser is not satisfied with the condition of the Property. If Purchaser properly terminates this Contract pursuant to this Section 5.2, then this Contract shall be terminated, the Title Company shall return the Earnest Money Deposit to Purchaser, and neither party shall have any further rights, duties or obligations hereunder except with respect to the provisions of this Contract which expressly survive the termination of this Contract. If Purchaser does not timely deliver to Seller written notice of termination during the Inspection CONTRACT OF SALE PAGE 5 Period, the conditions of this Section 5.2 shall be deemed satisfied, and Purchaser may not thereafter terminate this Contract pursuant to this Section 5.2. 5.3 Matters to be Delivered by Seller. Seller has previously delivered or shall deliver to Purchaser the following items (collectively, the "Submission Matters"): (a) Copies of the most recent real estate and personal property tax statements in Seller's possession with respect to the Property; and (b) Any environmental studies regarding the Property which Seller has in its possession. ARTICLE VI. REPRESENTATIONS AND WARRANTIES; DISCLAIMERS AND WAIVERS 6.1 Representations and Warranties of Purchaser. Purchaser represents and warrants to Seller as of the Effective Date and as of the Closing Date, as applicable, that (a) Purchaser is a municipal corporation duly organized and validly existing under the laws of the State of Texas and duly qualified to do business in the State of Texas; (b) Purchaser has the full right, power and authority to enter into this Contract and to consummate the transactions contemplated herein; and (c) this Contract constitutes a valid and legally binding obligation of Purchaser, enforceable in accordance with its terms. 6.2 Representations and Warranties of Seller. Seller represents and warrants to Purchaser as of the Effective Date and as of the Closing Date, as applicable that (a) Seller is a limited partnership duly organized and validly existing under the laws of the State of Texas; (b) Seller has the full right, power and authority to enter into this Contract and to consummate the transactions contemplated herein; and (c) this Contract constitutes a valid and legally binding obligation of Seller, enforceable in accordance with its terms. 6.3 NO ADDITIONAL REPRESENTATIONS OR WARRANTIES OF SELLER. PURCHASER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS EXPRESSLY SPECIFIED IN SECTION 6.2 OF THIS CONTRACT OR THE SPECIAL WARRANTY DEED TO BE DELIVERED AT CLOSING, SELLER HAS NOT MADE, AND SELLER HEREBY SPECIFICALLY DISCLAIMS, ANY WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, OR CONCERNING, (a) THE NATURE AND CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY, AND THE SUITABILITY THEREOF AND OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH PURCHASER MAY ELECT TO CONDUCT THEREON; (b) THE EXISTENCE, NATURE AND EXTENT OF ANY RIGHT-OF-WAY, LEASE, RIGHT TO POSSESSION OR USE, LIEN, ENCUMBRANCE, LICENSE, RESERVATION, CONDITION OR OTHER MATTER AFFECTING TITLE TO THE PROPERTY; OR (c) WHETHER THE USE OR OPERATION OF THE PROPERTY COMPLIES WITH ANY AND ALL LAWS, ORDINANCES OR REGULATIONS OF ANY GOVERNMENT OR OTHER REGULATORY BODY. PURCHASER AGREES TO ACCEPT THE PROPERTY AND ACKNOWLEDGES THAT THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE BY SELLER, ON CONTRACT OF SALE PAGE 6 AN "AS IS, WHERE IS, AND WITH ALL FAULTS" BASIS. PURCHASER EXPRESSLY ACKNOWLEDGES THAT EXCEPT AS OTHERWISE EXPRESSLY SPECIFIED IN SECTION 6.2 OF THIS CONTRACT, IF ANY, AND EXCEPT FOR ANY WARRANTY OF TITLE CONTAINED IN THE SPECIAL WARRANTY DEED TO BE DELIVERED BY SELLER TO PURCHASER AT CLOSING, SELLER MAKES NO REPRESENTATION OR WARRANTY OF ANY KIND, ORAL OR WRITTEN, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW, WITH RESPECT TO THE PROPERTY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER THAN SELLER'S WARRANTY OF TITLE TO BE SET FORTH IN THE SPECIAL WARRANTY DEED), ZONING, TAX CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF ANY INFORMATION (INCLUDING, WITHOUT LIMITATION, THE SUBMISSION MATTERS) PROVIDED BY OR ON BEHALF OF SELLER TO PURCHASER, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY. FURTHER, AND WITHOUT IN ANY WAY LIMITING ANY OTHER PROVISION OF THIS CONTRACT, SELLER HAS NOT MADE AND WILL NOT MAKE ANY REPRESENTATION, WARRANTY OR GUARANTY, AND HEREBY SPECIFICALLY DISCLAIMS ANY WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, WITH RESPECT TO THE PRESENCE OR DISPOSAL ON OR BENEATH THE PROPERTY (OR ANY PARCEL IN PROXIMITY THERETO) OF HAZARDOUS SUBSTANCES OR MATERIALS WHICH ARE CATEGORIZED AS HAZARDOUS OR TOXIC UNDER ANY LOCAL, STATE OR FEDERAL LAW, STATUTE, ORDINANCE, RULE OR REGULATION PERTAINING TO ENVIRONMENTAL OR SUBSTANCE REGULATION, CONTAMINATION, CLEANUP OR DISCLOSURE (INCLUDING, WITHOUT LIMITATION, ASBESTOS) AND SHALL HAVE NO LIABILITY TO PURCHASER THEREFOR. WITHOUT LIMITATION OF THE PRECEDING SENTENCE, SELLER SPECIFICALLY DISCLAIMS ANY REPRESENTATION, WARRANTY OR GUARANTY REGARDING THE ACCURACY OF ANY ENVIRONMENTAL REPORTS WHICH MAY BE INCLUDED WITHIN THE SUBMISSION MATTERS. BY ACCEPTANCE OF THIS CONTRACT AND THE SPECIAL WARRANTY DEED TO BE DELIVERED BY SELLER AT THE CLOSING, PURCHASER ACKNOWLEDGES THAT PURCHASER'S OPPORTUNITY FOR INSPECTION AND INVESTIGATION OF THE PROPERTY (AND OTHER PARCELS IN PROXIMITY THERETO) WILL BE ADEQUATE TO ENABLE PURCHASER TO MAKE PURCHASER'S OWN DETERMINATION WITH RESPECT TO THE PRESENCE OR DISPOSAL ON OR BENEATH THE PROPERTY (AND OTHER PARCELS IN PROXIMITY THERETO) OF SUCH HAZARDOUS SUBSTANCES OR MATERIALS, AND PURCHASER ACCEPTS THE RISK OF THE PRESENCE OR DISPOSAL OF ANY SUCH SUBSTANCES OR MATERIALS. PURCHASER, AND ANYONE CLAIMING, BY, THROUGH OR UNDER PURCHASER, HEREBY FULLY RELEASES, DISCHARGES, AND HOLDS HARMLESS SELLER, ITS EMPLOYEES, OFFICERS, DIRECTORS, PARTNERS, REPRESENTATIVES AND AGENTS, AND THEIR RESPECTIVE PERSONAL REPRESENTATIVES, HEIRS, CONTRACT OF SALE PAGE 7 SUCCESSORS AND ASSIGNS FROM ANY COST, LOSS, LIABILITY, DAMAGE, EXPENSE, DEMAND, ACTION OR CAUSE OF ACTION ARISING FROM OR RELATED TO ANY CONSTRUCTION DEFECTS, ERRORS, OMISSION, OR OTHER CONDITIONS AFFECTING THE PROPERTY; PROVIDED, THAT THIS SHALL NOT RELEASE SELLER FROM CLAIMS ARISING, IF ANY, AS A RESULT OF ANY WRITTEN REPRESENTATION OR WARRANTY OF SELLER BEING FALSE WHEN MADE. PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT THIS RELEASE SHALL BE GIVEN FULL FORCE AND EFFECT ACCORDING TO EACH OF ITS EXPRESSED TERMS AND PROVISIONS, INCLUDING, BUT NOT LIMITED TO, THOSE RELATING TO UNKNOWN AND SUSPECTED CLAIMS, DAMAGES AND CAUSES OF ACTION. THIS COVENANT RELEASING SELLER SHALL BE BINDING UPON PURCHASER, ITS PERSONAL REPRESENTATIVES, HEIRS, SUCCESSORS AND ASSIGNS. THE PROVISIONS OF THIS SECTION 6.3 (INCLUDING, WITHOUT LIMITATION, THE WAIVER AND RELEASE OF CLAIMS CONTAINED HEREIN) SHALL SURVIVE THE CLOSING OR EARLIER TERMINATION OF THIS CONTRACT. 6.4 No Reliance on Documents. Seller makes no representation or warranty as to the truth, accuracy or completeness of any materials, data or information (including, without limitation, the Submission Matters) delivered by Seller to Purchaser in connection with the transaction contemplated hereby. Purchaser acknowledges and agrees that all materials, data and information (including, without limitation, the Submission Matters) delivered by Seller to Purchaser in connection with the transaction contemplated hereby are provided to Purchaser as a convenience only and that any reliance on or use of such materials, data or information by Purchaser shall be at the sole risk of Purchaser. 6.5 Survival of Representations and Warranties. The representations and warranties of Seller and Purchaser set forth in this Article VI shall survive the Closing for a period of two (2) years subsequent to Closing, and any action brought upon a claim by Purchaser or Seller against the other party for breach of any representation or warranty contained in this Article VI must be brought, if at all, within two (2) years after Closing or such claim and action shall be forever barred. 6.6 Effect of Disclaimers. Seller has informed and hereby does inform Purchaser that the compensation to be paid to Seller for the Property has been decreased to take into account that the Property is being sold subject to the provisions of this Article VI. ARTICLE VII. CONDITIONS PRECEDENT TO PURCHASER'S AND SELLER'S PERFORMANCE 7.1 Conditions to Purchaser's Obligations. Purchaser's obligation under this Contract to purchase the Property is subject to the fulfillment of each of the following conditions (any or all of which may be waived by Purchaser): CONTRACT OF SALE PAGE 8 (a) the representations and warranties of Seller contained herein shall be true, accurate and correct in all material respects as of the Closing Date; and (b) Seller shall have delivered all the documents and other items required pursuant to Section 8.2(a), and shall have performed, in all material respects, all other covenants, undertakings and obligations, and complied with all conditions required by this Contract to be performed or complied with by the Seller at or prior to the Closing. 7.2 Conditions to Seller's Obligations. Seller's obligation under this Contract to sell the Property to Purchaser is subject to the fulfillment of each of the following conditions (any or all of which may be waived by Seller): (a) the representations and warranties of Purchaser contained herein shall be true, accurate and correct in all material respects as of the Closing Date; and (b) Purchaser shall have delivered the Purchase Price, and other funds required hereunder and all the documents and other items required pursuant to Section 8.2(b), and shall have performed, in all material respects, all other covenants, undertakings and obligations, and complied with all conditions required by this Contract to be performed or complied with by Purchaser at or prior to Closing. ARTICLE VIII. CLOSING 8.1 Closing Date. (a) Time and Place. Provided the terms and conditions set forth in this Contract have been fulfilled, the consummation of the purchase and sale of the Property (the "Closing") shall take place by delivery of documents to the office of the Title Company (it being contemplated that the Closing will occur by delivery of Closing documents into escrow with- the Title Company) at 11:00 a.m., central time, on January 4, 2008, or at such earlier date and time as Purchaser and Seller may mutually agree (the "Closing Date")- (b) Delivery of Documents in Escrow, Title Insurance. The documents required hereunder to be delivered at Closing shall be delivered by Seller and Purchaser into escrow with the Title Company, which shall record and/or deliver all documents deposited into escrow hereunder upon unconditional payment of the Purchase Price to the Title Company and shall remit the Purchase Price to Seller simultaneously with the recordation and/or delivery of all documents deposited into escrow hereunder. 8.2 Items to be Delivered at the Closing. (a) Seller. At the Closing, Seller shall deliver, or cause to be delivered to the Title Company, for recording or delivery to the Purchaser, as applicable, each of the following items with respect to the Property: CONTRACT OF SALE - PAGE 9 (i) A Special Warranty Deed (the "Deed") substantially in the form attached hereto as Exhibit B, subject to the Permitted Exceptions, duly executed and acknowledged by Seller; (ii) A Non-Foreign Affidavit for purposes of compliance with Section 1445 ' (b)(2) of the Internal Revenue Code of 1986, as amended, and the regulations adopted thereunder in the form attached hereto as Exhibit C; and (iii) A resolution or other documentation evidencing that the persons or persons executing this Contract and the closing documents on behalf of Seller have full right, power and authority to do so and to bind Seller. (iv) Other items reasonably requested by the Title Company for the sale of the Property in accordance with this Contract or for administrative requirements for consummating the Closing. (b) Purchaser. At the Closing, Purchaser shall deliver or cause to be delivered, to the Title Company, for recording or delivery to Seller or perform, as applicable, each of the following items with respect to the Property: (i) The Purchase Price in Current Funds; (ii) Such additional funds in Current Funds, as may be necessary to cover Purchaser's share of the closing costs and proration hereunder; (iii) A resolution or ordinance evidencing that the person or persons executing this Contract and the closing documents on behalf of Purchaser have full right, power and authority to do so and to bind Purchaser. (iv) Other items reasonably requested by the Title Company for the sale of the Property in accordance with this Contract or for administrative requirements for consummating the Closing. 8.3 Costs of Closing. The escrow fees of the Title Company shall be paid equally by Seller and Purchaser. Any and all costs relating to the issuance of a title policy with basic coverage and all premiums and other charges for any extended coverage, the modification of the survey exception and any endorsements to such title policy shall be home by Purchaser. Any and all recording costs or fees relating to the transfer of the Property from Seller to Purchaser shall be bore and paid exclusively by Purchaser. Any and all costs and expenses (including, without limitation, recording costs, loan fees, attorneys' fees, documentary or stamp taxes, transfer taxes, intangible taxes, mortgage taxes or other similar taxes, fees or assessments) relating to or incurred in connection with any loans or other financing obtained by the Purchaser for the purchase of the Property shall be bore and paid exclusively by Purchaser. Any and all transfer taxes, intangible taxes, documentary stamp taxes or similar taxes relating to the transfer of the Property from Seller to Purchaser shall be home and paid exclusively by Seller. All other expenses incurred by Seller and Purchaser with respect to the Closing, including, but not limited to, the attorneys' fees and costs and expenses incurred in connection with negotiating, preparing and closing the transaction contemplated by this Contract, shall be home and paid exclusively by CONTRACT OF SALE PAGE 10 the party incurring same, unless otherwise expressly provided in this Contract. The provisions of this Section 8.3 shall survive the Closing or earlier termination of this Contract. 8.4 Prorations. All normal and customarily proratable items, including, without limitation, taxes, operating expenses and other expenses and fees shall be prorated as of the Closing Date, Seller being charged and credited for all of same attributable to the period up to the Closing Date (and credited for any amounts paid by Seller attributable to the period on or after the Closing Date) and Purchaser being responsible for, and credited or charged, as the case may be, for all of same attributable to the period on and after the Closing Date. All real estate ad valorem or similar taxes for the Property, or any installment of assessments payable in installments which installment is payable in the year of Closing, shall be prorated to the date of Closing, based upon actual days involved. In connection with the proration of real property taxes or installments of assessments, such proration shall be based upon the assessed valuation and tax rate figures for the year in which the Closing occurs to the extent the same are available; provided, that in the event that actual figures (whether for the assessed value of the Property or for the tax rate) for the year of Closing are not available at the Closing Date, the proration shall be made using figures from the preceding year for the figures which are unavailable for the year of Closing. The proration shall be final and unadjustable. The provisions of this Section 8.4 shall survive the Closing. ARTICLE IX. CONDEMNATION OR CASUALTY 9.1 Condemnation. (a) In the event that all or any portion of the Property is condemned or taken by eminent domain or conveyed by deed in lieu thereof, or if any condemnation proceeding is commenced for all or any portion of the Property, prior to Closing, either party may elect to terminate this Contract by written notice thereof to the other party at any time prior to Closing, except that Purchaser shall not exercise such termination rights with respect to any proceedings commenced by Purchaser with respect to the Property. Upon termination of this Contract as provided in Section 9.1(a), all rights, duties and obligations hereunder shall cease and be of no further force or effect (except with respect to the provisions hereof which expressly survive the termination of this Contract). If neither parry terminates this Contract as aforesaid, then both parties shall proceed to close the transaction contemplated herein pursuant to the terms hereof, in which event Seller shall, except as limited in Section 9.1(b) hereof, at its option deliver to Purchaser at the Closing any proceeds actually received by Seller attributable to the Property from such condemnation, eminent domain proceeding or deed in lieu thereof or assign its interest in and to any such proceeds, and there shall be no reduction in the Purchase Price. (b) Notwithstanding anything to the contrary contained in Section 9.1(a), if neither party has timely elected to terminate in accordance with Section 9.1(a), and if the proceeds payable with respect to the Property as a result of condemnation exceed the Purchase Price for the Property, the portion of such proceeds in excess of the Purchase CONTRACT OF SALE PAGE 11 Price shall be paid to Purchaser at the Closing. The foregoing provision shall survive the Closing. 9.2 Casual . In the event that all or any portion of the Property shall be damaged or destroyed by fire or other casualty prior to Closing, either party may terminate this Contract by written notice thereof to the other party within ten (10) days after such party is notified of the casualty. Upon termination of this Contract as provided in this Section 9.2, all rights, duties and obligations hereunder shall cease and be of no further force or effect (except with respect to the provisions hereof which expressly survive the termination of this Contract). If neither party terminates this Contract as aforesaid, then both parties shall proceed to close the transaction contemplated herein pursuant to the terms hereof, in which event Purchaser shall have the rights set forth herein with respect to the Property and there shall be no reduction in the Purchase Price. ARTICLE X. DEFAULTS AND REMEDIES 10.1 Default by Purchaser. If Purchaser refuses or fails to consummate the Closing under this Contract for reasons other than as expressly set forth in Section 5.2 or Article IX hereof or other than due to a failure of a condition precedent to Purchaser's obligation to close as set forth in Section 7.1 hereof, the Purchaser shall be in default under this Contract and Seller may, as its sole and exclusive remedy, terminate this Contract in which event the Title Company shall pay the Earnest Money Deposit to Seller and Seller shall be entitled to receive and retain the Earnest Money Deposit as liquidated damages (Seller and Purchaser hereby acknowledging that the amount of damages in the event of Purchaser's default is difficult or impossible to ascertain but that such amount is a fair estimate of such damages), and neither party shall have any further rights, duties, or obligations hereunder except with respect to the provisions hereof which expressly survive the termination of this Contract. Notwithstanding the foregoing, nothing contained herein shall limit the Seller's rights and remedies against Purchaser with respect to any indemnity obligation of Purchaser under this Contract or any breach of a representation or warranty by Purchaser under this Contract. 10.2 Default by Seller. If Seller refuses or fails to consummate the Closing under this Contract other than due to a termination permitted under this Contract or a failure of a condition precedent to Seller's obligation to close as set forth in Section 7.2 hereof, then Seller shall be in default under this Contract and Purchaser may, at Purchaser's sole option and as its sole and exclusive remedies, either (a) terminate this Contract in which event neither party shall have any further rights, duties or obligations hereunder except with respect to the provisions of this Contract which expressly survive the termination hereof, and Purchaser shall be entitled to a refund of the Earnest Money Deposit, or (b) enforce specific performance of this Contract against Seller. In no event shall Seller be liable to Purchaser for any damages, including, without limitation, any actual, punitive, speculative or consequential damages or damages for loss of opportunity or lost profit, in the event of Seller's default hereunder. 10.3 Attorneys' Fees. If it shall be necessary for either Purchaser or Seller to employ an attorney to enforce its rights pursuant to this Contract, the non-prevailing party shall CONTRACT OF SALE PAGE 12 reimburse the prevailing parry for its reasonable attorneys' fees. The provisions of this Section 10.3 shall.survive the Closing or termination of this Contract. ARTICLE XI. BROKERAGE COMMISSIONS 11.1 Brokerage Commission. Seller and Purchaser each represent to the other that each has had no dealings with any broker, finder or other parry concerning the purchase of the Property. Purchaser and Seller each agree to indemnify, defend and hold the other harmless for, from and against any and all loss, liability, damage, cost or expense (including, without limitation, reasonable attorneys' fees) arising out of or paid or incurred by such party by reason of any claim to any broker's, finder's or other fee in connection with this transaction by any party claiming by, through or under such party. Notwithstanding anything to the contrary contained herein, the indemnities set forth in this Article XI shall survive the Closing or termination of this Contract. ARTICLE XIL MISCELLANEOUS 12.1 Notices. Any notice provided or permitted to be given under this Contract must be in writing and may be served by depositing the same in the United States Mail, postage prepaid, certified or registered mail with return receipt requested, or by delivering the same in person to the party to be notified via a delivery service, Federal Express or any other nationally recognized overnight courier service that provides a return receipt showing the date of actual delivery of same to the addressee thereof, or by facsimile copy transmission with proof of receipt. Any party giving notice hereunder shall use reasonable efforts to send a copy of any such notice by facsimile transmission on the same date as deposited in the mail or given to such delivery service. Notice given in accordance herewith shall be deemed given and shall be effective upon the earlier of actual receipt (including, without limitation, receipt of a facsimile transmission) or refusal of delivery. For purposes of notice, the addresses of the parties shall be as follows: If to Seller: ERI - Exposition & Hickory 3311 N. IH-35, Suite 140 Denton, Texas 76207 Attention: Jeremy Sain Telephone No.: 940/381-4903 Facsimile No.: 940/381-4906 Email Address: icremvsain@elkriver.biz CONTRACT OF SALE PAGE 13 With a copy to: Liechty & McGinnis, P.C. 7502 Greenville Avenue, Suite 750 Dallas, Texas 75231 Attention: Lisa Hur, Esq. Telephone No.: 214/265-0008 Facsimile No.: 214/265-0615 Email Address: lhur@lmlawyers.com If to Purchaser: Edwin M. Snyder, City Attorney City of Denton, Texas 215 East McKinney Street Denton, Texas, 76201 Telephone No: 940-349-8333 Facsimile No.: 940-382-7923 Email Address: Edwin. Snyder@cityofdenton.com With a copy to: Paul Williamson, Real Estate Manager City of Denton, Texas Utilities Engineering 901-A Texas Street Denton, Texas 76209 Telephone No: 940-349-8921. Facsimile No.: 940-349-8951 Email Address: paul.williamson@cityofdenton.com If to Title Company: Sendera Title 220 San Jacinto Boulevard Dentonl, Texas 76205 Attention: Stacie Holbert Telephone No: 9401442-6103 Facsimile No.: 940/442-6159 Email Address: sholbert@senderatitle.com 12.2 GOVERNING LAW AND VENUE. THE LAWS OF THE STATE OF TEXAS SHALL GOVERN THE VALIDITY. CONSTRUCTION. ENFORCEMENT AND INTERPRETATION OF THIS CONTRACT. THIS CONTRACT IS FULLY PERFORMABLE IN DENTON COUNTY, TEXAS AND EXCLUSIVE VENUE FOR ITS ENFORCEMENT SHALL BE A COURT OF COMPETENT JURISDICTION IN DENTON COUNTY. 12.3 Entirety and Amendments. This Contract embodies the entire agreement between the parties and supersedes all prior agreements and understandings, if any, relating to the transaction described herein, and may be amended or supplemented only by an instrument in writing executed by the party against whom enforcement is sought. 12.4 Assignment. Purchaser may assign its rights under this Contract to an entity controlling, controlled by, or under common control with Purchaser without the prior written CONTRACT OF SALE PAGE 14 consent of Seller; provided, that Purchaser must immediately provide Seller with a copy of any instrument assigning this Contract and evidence of the Purchaser's affiliation with the assignee. Except as expressly provided in the preceding sentence, this Contract may not be assigned in whole or in part by Purchaser without the prior written consent of Seller, which consent shall not be unreasonably withheld, conditioned or delayed. In the event of an assignment of this Contract by Purchaser, Purchaser shall not be released from any liability or obligations hereunder, and Purchaser shall promptly deliver to Seller a copy of the instrument effecting such assignment. Subject to the foregoing, this Contract shall be binding upon and inure to the benefit of Seller and Purchaser and their respective heirs, personal representatives, successors and assigns. 12.5 Survival. Except as otherwise expressly provided herein, no representations, warranties, covenants or agreements contained in this Contract shall survive the termination of this Contract or the Closing and the assignment of the Property hereunder. 12:6 Time of Essence. It is expressly agreed by the parties hereto that time is of the essence with respect to this Contract and Closing hereunder. 12.7 Multiple Counterparts. To facilitate execution, this Contract may be executed in as many counterparts as may be convenient or required. It shall not be necessary that the signature of, or on behalf of, each parry, or that the signature of all persons required to bind any party, appear on each counterpart. Facsimile copies or electronic versions of a signature of any party shall be deemed the same as the original. All counterparts shall collectively constitute a single instrument. It shall not be necessary in making proof of this Contract to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, each of the parties hereto. Any signature page to any counterpart may be detached from such counterpart without impairing the legal effect of the signatures thereon and thereafter attached to another counterpart identical thereto except having attached to it additional signature pages. 12.8 Risk of Loss. Subject to the provisions of Article IX of this Contract, risk of loss or damage to the Property, or any part thereof, by fire or any other casualty from the date this Contract is fully executed up to the time of Closing will be on Seller and, thereafter, will be on Purchaser. 12.9 Business Days. All references to "business days" contained herein are references to normal working business days, i.e., Monday through Friday of each calendar week, exclusive of federal and national bank holidays. In the event that any event hereunder is to occur, or a time period is to expire, on a date which is not a business day, such event shall occur or time period shall expire on the next succeeding business day. 12.10 CUtions. The captions, headings and arrangements used in this Contract are for convenience only and do not in any way affect, limit, amplify or modify the terms and provisions hereof. 12.11 Number and Gender of Words. Whenever herein the singular number is used, the same shall include the plural where appropriate, and words of any gender shall include each other gender where appropriate. CONTRACT OF SALE PAGE 15 12.12 Interpretation. No provision of this Contract shall be construed in favor of, or against, any particular party by reason of any presumption with respect to the drafting of this Contract; both parties, being represented by counsel and having fully participated in the negotiation of this instrument, hereby agree that this Contract shall not be subject to the principle that a contract would be construed against the party which drafted the same. 12.13 Incorporation of Exhibits. All exhibits attached and referred to in this Contract are hereby incorporated herein as though fully set forth in (and shall be deemed to be a part hereof) this Contract. 12.14 Third-Party Beneficiaries. Nothing in this Contract, express or implied, is intended to confer any rights or remedies upon any person, other than the parties hereto and, subject to the restrictions on assignment herein contained, their respective successors and assigns. 12.15 Faxed Si ng attires. The parties agree that faxed signatures may be used to expedite the transaction contemplated by this Contract. Each party intends to be bound by its faxed signature and each is aware that the other will rely on the faxed signature, and each acknowledges such reliance and waives any defenses to the enforcement of the documents effecting the transaction contemplated by this Contract based on a faxed signature. 12.16 Abstract. Purchaser acknowledges that at the time of the execution of this Contract, the Seller advised Purchaser by this writing that Purchaser should have an abstract covering the parcels examined by an attorney of Purchaser's own selection or should be furnished with or obtain a policy of title insurance. 12.17 Effective Date. As used herein, the term "Effective Date" shall mean for all purposes in this Contract the date on which this Contract is executed by the last of Purchaser and. Seller. [SIGNATURES APPEAR ON FOLLOWING PAGES] CONTRACT OF SALE PAGE 16 IN WITNESS WHEREOF, the undersigned have executed this Contract of Sale to be effective as of the Effective Date. SELLER: ERI - EXPOSITION & HICKORY, L.P., a Texas limited partnership By: Elk River Investments, Inc., a Texas corporation, its general partner By: Name: f'~-- Srs✓ Title: -7 E -r DATE: l l I S/~ PURCHASER: CITY OF DENTON, S By: George C. Campbell, City Manager DATE: /(G 1& 7 ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: " 1 j APPROVED AS TO LEGAL FORM: EDWIN M. SNYDE-It, CITY A TTOR CONTRACT OF SALE PAGE 17 RECEIPT OF EARNEST MONEY DEPOSIT AND AGREEMENT OF TITLE COMPANY By its execution below, Title Company acknowledges receipt of. (1) 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 including without limitation those terms relating to compliance 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. Upon receipt, the Title Company agrees to hold the Earnest Money Deposit in escrow as escrow agent for the benefit of Seller and Purchaser and to dispose of the Earnest Money Deposit in strict accordance with the terms and provisions of this Contract. TITLE COMPANY: SENDERA TITLE OF FORT WORTH Attn: Stacie Holbert 220 San Jacinto Boulevard, Suite 310 Denton, Texas 76205 Telephone: (940) 442-6103 Telecopy: (940) 442-6159 By: Printed Name: Contract receipt date: RAM River\Exposition & Hickory\Sale\CONTRACT OF SALE (11-02-2007 L&M draft).doe CONTRACT OF SALE PAGE 18 EXHIBIT A LEGAL DESCRIPTION TRACTI BEING ALL OF LOT 1, BLOCK 1, FORD PROPERTIES ADDITION, AN ADDITION TO THE CITY OF DENTON, DENTON COUNTY, TEXAS, ACCORDING TO THE FINAL PLAT RECORDED IN CABINET E, PAGE 242 OF THE Plat Records, Denton County, Texas. TRACT 11 Being a 0.818 acre tract of land situated in the H. Sisco Survey, Abstract number 1184, Denton County, Texas and being all of that certain tract of land described in deed to T & B Properties as Tract II and recorded in Document Number 94-042652 of the Real Property Records of Denton County, Texas, said 0.818 acre tract being more particularly described by metes and bounds as follows; BEGINNING at a 1/2 inch capped iron rod found stamped Kern for the southeast comer hereof and lying in the west line of that called 2.599 acre tract of land described in deed to Baker Family Properties and recorded in Document Number 96-R0020890 of the Real Property Records of Denton County, Texas also lying in the north line of Lot 1, Block A of Baker Addition as recorded in Cabinet H, Page 167 of the Plat Records of Denton County, Texas, from which a 1/2 inch capped iron rod found stamped Kern bears N 89° 54'22" E a distance of 61.79 feet, for the northeast comer of said Baker Addition; THENCE South 89° 46' 47" West, along the south line hereof the north line of said Baker Addition a distance of 270.00 feet, to a 5/8 inch capped iron rod set, stamped "TNP," and lying in the east line of Exposition Avenue (variable width right of way) for the southwest comer hereof; THENCE North 0° 07' 47" East, along the east line of said Exposition Avenue the west line hereof a distance of 132.00 feet, to an "X" cut set for the northwest comer hereof, THENCE North 89° 46' 47" East passing at a distance of 4.87 feet, to a 5/8 inch capped iron rod set, stamped "TNP," for the southwest corner of Lot 1, Block 1 of the Ford Properties Addition as recorded in Cabinet E, Page 242 of said Plat Records, continuing in all a total distance of 270.00 feet, to a railroad spike set for the northeast corner hereof and lying in the west line of said 2.599 acre tract; THENCE South 0° 07'47" West, along the east line hereof and the west line of said 2.599 acre tract a distance 132.00 feet, to the POINT OF BEGINNING and containing 0.818 acres of land more or less EXHIBIT B This document is prepared by and please return to: SPECIAL WARRANTY DEED STATE OF § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF § a (hereinafter called "Grantor"), for and in consideration of the sum of TEN AND No/100 Dollars ($10.00) and other good and valuable consideration in hand paid by a (hereinafter called "Grantee"), whose mailing address is , the receipt and sufficiency of which are hereby acknowledged, has GRANTED, SOLD AND CONVEYED and by these presents does GRANT, SELL AND CONVEY unto Grantee that certain tract or parcel of land situated in County, and more particularly described on Exhibit A attached hereto and made a part hereof for all purposes, and interests of Grantor appurtenant thereto (all of the above-described properties being hereinafter collectively referred to as the "Property"). This conveyance is made and accepted subject to (a) general real estate taxes on the Property for the current year which Grantee assumes and agrees to pay, (b) zoning laws and regulations and ordinances of municipal and other governmental authorities, if any, affecting the Property, and (c) the matters set forth on Exhibit B attached hereto and made a part hereof for all purposes (all of the foregoing being hereinafter collectively referred to as the "Permitted Exceptions"). Notwithstanding the foregoing, Grantor expressly EXCEPTS herefrom and RESERVES unto itself, its heirs, personal representatives, successors and assigns, the interest in all of the oil, gas and other minerals owned by Grantor in, on, and under and that may be produced from the lands described herein (the "Reserved Resources"). Grantor waives and releases, on behalf of Grantor and Grantor's successors and assigns, all rights of ingress and egress and all other rights to enter upon or to use the surface of the Property or any part thereof for purposes of exploring for, developing and/or producing the Reserved Resources in and under the Property; provided, however, nothing herein shall prevent Grantor or its successors and assigns from exploring for, developing and/or producing the Reserved Resources in and under the Property by pooling or by directional drilling under the Property from well sites located on other property, so long as such activities do not damage the surface of the Property or any improvements thereon, or affect the Purchaser's ability to use the Property. TO HAVE AND TO HOLD the Property, together with all and singular the rights and appurtenances thereto in anywise belonging unto Grantee, its successors and assigns forever, and Grantor does hereby bind itself, its successors and assigns, to WARRANT AND FOREVER DEFEND all and singular the Property unto Grantee, its successors and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof, by, through or under Grantor, but not otherwise, subject, however, to the Permitted Exceptions. GRANTEE ACKNOWLEDGES AND AGREES THAT GRANTOR HAS NOT MADE, AND GRANTOR HEREBY SPECIFICALLY DISCLAIMS, ANY WARRANTY, GUARANTY OR REPRESENTATION, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, OR CONCERNING (i) THE NATURE AND CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY, THE PRESENCE OR ABSENCE OF ANY HAZARDOUS MATERIALS ON THE PROPERTY, AND THE SUITABILITY THEREOF AND OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH GRANTEE MAY ELECT TO CONDUCT THEREON; (ii) EXCEPT FOR ANY WARRANTY OF TITLE CONTAINED HEREIN, THE EXISTENCE, NATURE AND EXTENT OF ANY RIGHT-OF-WAY, LEASE, RIGHT TO POSSESSION OR USE, LIEN, ENCUMBRANCE, LICENSE, RESERVATION, CONDITION OR OTHER MATTER AFFECTING TITLE TO THE PROPERTY; AND (iii) WHETHER THE USE OR OPERATION OF THE PROPERTY COMPLIES WITH ANY AND ALL LAWS, ORDINANCES OR REGULATIONS OF ANY GOVERNMENT OR OTHER REGULATORY BODY. GRANTEE ACKNOWLEDGES THAT HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY, GRANTEE IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND NOT ON ANY INFORMATION PROVIDED BY GRANTOR. GRANTEE FURTHER ACKNOWLEDGES THAT ANY INFORMATION PROVIDED WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND GRANTOR (i) HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND (ii) MAKES NO REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. GRANTEE ACCEPTS THE PROPERTY, AND ACKNOWLEDGES THAT THE CONVEYANCE OF THE PROPERTY TO GRANTEE IS MADE BY GRANTOR, ON AN "AS IS, WHERE IS, AND WITH ALL FAULTS" BASIS. GRANTEE EXPRESSLY ACKNOWLEDGES THAT, EXCEPT FOR THE WARRANTY OF TITLE CONTAINED HEREIN, GRANTOR MAKES NO WARRANTY OR REPRESENTATION OF ANY KIND, ORAL OR WRITTEN, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW WITH RESPECT TO THE PROPERTY INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OR REPRESENTATIONS AS TO HABITABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE (OTHER THAN GRANTOR'S WARRANTY OF TITLE TO BE SET FORTH HEREIN), ZONING, TAX CONSEQUENCES, PHYSICAL OR ENVIRONMENTAL CONDITION, UTILITIES, OPERATING HISTORY OR PROJECTIONS, VALUATION, GOVERNMENTAL APPROVALS, THE COMPLIANCE OF THE PROPERTY WITH GOVERNMENTAL LAWS, THE TRUTH, ACCURACY OR COMPLETENESS OF ANY INFORMATION PROVIDED BY OR ON BEHALF OF GRANTOR TO GRANTEE, OR ANY OTHER MATTER OR THING REGARDING THE PROPERTY. -2- GRANTEE AGREES THAT GRANTOR SHALL NOT BE RESPONSIBLE OR LIABLE TO GRANTEE FOR ANY CONSTRUCTION DEFECTS, ERRORS, OMISSIONS, OR ON ACCOUNT OF ANY OTHER CONDITIONS AFFECTING THE PROPERTY, AS GRANTEE IS PURCHASING THE PROPERTY "AS IS, WHERE IS, AND WITH ALL FAULTS." EXCEPT AS EXPRESSLY LIMITED BY THE TERMS OF THE CONTRACT, GRANTEE, BY ITS ACCEPTANCE OF THIS SPECIAL WARRANTY DEED, AND ANYONE CLAIMING, BY, THROUGH OR UNDER GRANTEE, BY THEIR ACCEPTANCE OF A DEED TO THE PROPERTY, OR ANY PORTION THEREOF, FULLY RELEASES AND DISCHARGES SELLER FROM ANY COST, LOSS, LIABILITY, DAMAGE, EXPENSE, DEMAND, ACTION OR CAUSE OF ACTION ARISING FROM OR RELATED TO ANY CONSTRUCTION DEFECTS, ERRORS, OMISSIONS, OR OTHER CONDITIONS AFFECTING THE PROPERTY. GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS RELEASE SHALL BE GIVEN FULL FORCE AND EFFECT ACCORDING TO EACH OF ITS EXPRESSED TERMS AND PROVISIONS, INCLUDING, BUT NOT LIMITED TO, THOSE RELATING TO UNKNOWN AND SUSPECTED CLAIMS, DAMAGES AND CAUSES OF ACTION.. THIS COVENANT RELEASING GRANTOR SHALL BE A COVENANT RUNNING WITH THE PROPERTY AND SHALL BE BINDING UPON GRANTEE, ITS SUCCESSORS AND ASSIGNS. WHERE USED IN THIS PARAGRAPH, THE TERM "GRANTOR" SHALL INCLUDE GRANTOR AND GRANTOR'S EMPLOYEES, OFFICERS, DIRECTORS, PARTNERS,'REPRESENTATIVES AND AGENTS, AND THEIR RESPECTIVE PERSONAL REPRESENTATIVES, HEIRS, SUCCESSORS AND ASSIGNS. GRANTEE'S AGREEMENT TO, AND ACKNOWLEDGMENT OF, THE VARIOUS MATTERS SPECIFIED IN THIS SPECIAL WARRANTY DEED SHALL BE CONCLUSIVELY EVIDENCED BY GRANTEE'S ACCEPTANCE HEREOF. Current ad valorem taxes on the Property having been prorated, Grantee hereby assumes the payment thereof IN WITNESS WHEREOF, this Special Warranty Deed is executed by Grantor to be effective for all purposes as of the day of 200. GRANTOR: By: Witnesses: -3- STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on this day of 2007, by of ELK RIVER INVESTMENTS, INC., a Texas corporation, the general partner of ERI - EXPOSMON & HICKORY, L.P., a Texas limited partnership, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said corporation. Notary Public, State of Texas My Commission Expires: Printed Name of Notary Public GRANTEE'S ADDRESS: -4- EXHIBIT A TO SPECIAL WARRANTY DEED [Attach legal description of the Property] -5- EXFIIBIT B TO SPECIAL WARRANTY DEED PERMITTED EXCEPTIONS [Attach list of Permitted Exceptions created in accordance with the terms of the Contract] -6- EXIIIBIT C NON-FOREIGN AFFIDAVIT STATE OF § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF § On this date, , a ("Seller"), has sold and conveyed certain real property situated in County, , to , a ("Purchaser"). Section 1445 of the Internal Revenue Code of 1986, as amended, provides that a transferee of a U.S. Real Property Interest must withhold tax if the transferor is a foreign person. To inform Purchaser that withholding of tax is not required upon the disposition of a U.S. Real Property Interest by Seller, the undersigned hereby certifies the following on behalf of Seller: 1. Seller is not a foreign corporation, foreign partnership, foreign trust, or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); 2. Seller's U.S. Employer Identification Number is ; and 3. Seller's office address is Seller agrees to inform Purchaser if it becomes a foreign person at any time during the three year period immediately following the date of this notice. Seller understands that this certification may be disclosed to the Internal Revenue Service by Purchaser and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalties of perjury I declare that I have examined this certification and to the best of my knowledge and belief it is true, correct and complete, and I further declare that I have authority to sign this document on behalf of Seller. Executed this day of 200. SELLER: By: STATE OF TEXAS COUNTY OF DENTON This instrument was acknowledged before me on this day of 2007, by of ELK RIVER INVESTMENTS, INC., a Texas corporation, the general partner of ERI - EXPOSITION & HICKORY, L.P., a Texas limited partnership, known to me to be the person whose name is subscribed to the foregoing instrument, and acknowledged to me that he executed the same for the purposes and consideration therein expressed, in the capacity therein stated and as the act and deed of said corporation. Notary Public, State of Texas My Commission Expires: Printed Name of Notary Public -2-