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Cont r act Concerning

Page 2 of 8

02-13-06

( Addr ess of Pr oper t y)

expense, legible copies

of r est rict ive cov enant s and docum ent s evidencing except ions in

t he

Com m it m ent

( Except ion

Docum ent s) ot her

t han t he st andard print ed except ions.

Seller

aut horizes t he Tit le Com pany t o deliver t he Com m it m ent and Except ion Docum ent s t o Buyer at

Buyer's address shown in Paragraph 21. I f t he Com m it m ent and Ex cept ion Docum ent s are not

delivered t o Buyer w it hin t he specified t im e, t he t im e for delivery w ill be aut om at ically ex t ended

up t o 15 days or t he Closing Dat e, w hichever is earlier .

C. SURVEY:

The surv ey m ust be m ade by a regist ered professional land survey or accept able t o

t he Tit le Com pany and any lender . ( Check one box only)

( 1)

Wit hin

days aft er t he effect ive dat e of t his cont ract , Seller shall fur nish t o Buyer

and

Tit le Com pany Seller's

ex ist ing surv ey of t he Propert y and a Resident ial

Real

Propert y Affidav it

pr om ulgat ed by t he Texas Depart m ent of I nsurance ( Affidavit ) . I f t he

exist ing survey or Affidavit is not accept able t o Tit le Com pany or Buyer's lender, Buyer

shall obt ain a new survey at

Seller's

Buyer 's expense no lat er t han 3 days prior t o

Closing

Dat e. I f Seller fails

t o furnish

t he exist ing survey or Affidav it w it hin t he

t im e

prescr ibed, Buy er shall obt ain a new surv ey at Seller's expense no lat er t han 3 days

prior t o Closing Dat e.

( 2)

Wit hin

days aft er t he effect ive dat e of t his cont ract , Buyer shall obt ain a new

survey at Buy er's ex pense. Buy er is deem ed t o receiv e t he survey on t he dat e of act ual

receipt or t he dat e specified in t his paragraph, w hichever is earlier .

( 3)

Wit hin

days aft er t he effect ive dat e of t his cont ract , Seller, at Seller's expense

.

Buy er m ust obj ect not lat er t han ( i) t he Closing Dat e or ( ii)

days aft er Buyer receives t he

obt ain a Tit le Policy .

I f

a

Tit le Policy is fur nished, t he Com m it m ent

should

be prom pt ly

r ev iew ed by an

at t or ney

of

Bu y er ’s choice due t o t he t im e lim it at ions on Buyer’s r ight

t o

obj ect .

( 2) MANDATORY OWNERS' ASSOCI ATI ON MEMBERSHI P: The Propert y

is

is not subj ect t o

m andat ory

m em bership in an ow ners' associat ion. I f t he Propert y is subj ect t o m andat ory

m em bership in an ow ners' associat ion, Seller not ifies Buyer

under §5 . 012, Texas Propert y

Code, t hat ,

as

a

purchaser

of

propert y

in

t he resident ial com m unit y

in w hich t he

Propert y is locat ed, you are obligat ed t o be a m em ber of t he ow ners' associat ion . Rest r ict ive

covenant s governing t he use and occupancy of t he Propert y and a dedicat ory

in st r u m en t

governing

t he

est ablishm ent ,

m aint enance,

and operat ion

of

t his resident ial com m unit y

have been or w ill be recorded in t he Real Propert y Records of t he count y in w hich t he

Propert y is locat ed. Copies of t he rest rict iv e covenant s and

dedicat or y

inst rum ent

m ay

be

obt ained from t he count y clerk . You are obligat ed t o pay

assessm ent s t o

t he

owners'

associat ion . The am ount

of

t he assessm ent s is subj ect t o change. Your failure t o pay t he

assessm ent s

could

result

in a

lien

on and

t he

foreclosure

of

t he

Propert y . I f

Buyer

is

concerned about

t hese m at t ers, t he TREC prom ulgat ed Addendum for Propert y Subj ect

t o

Mandat ory Mem bership in an Ow ner 's Associat ion should be used.

( 3) STATUTORY

TAX DI STRI CTS:

I f t he Propert y is

sit uat ed in a

ut ilit y

or ot her st at ut orily

creat ed dist r ict prov iding w at er , sew er, drainage, or flood

cont rol

facilit ies and

serv ices,

Chapt er 49,

Texas Wat er Code, requires Seller t o deliver and Buyer t o sign t he st at ut ory

not ice relat ing t o t he t ax rat e, bonded indebt edness, or st andby

fee of t he dist r ict

pr ior

t o

final execut ion of t his cont ract .

( 4) TI DE WATERS:

I f

t he Propert y abut s t he t idally

inf luenced

w at ers of t he st at e, §33. 135,

Texas Nat ur al Resources Code, requires a not ice r egar ding coast al ar ea proper t y t o be

included in

t he

cont ract .

An

addendum cont aining t he not ice

prom ulgat ed

by

TREC

or

required by t he part ies m ust be used.

( 5) ANNEXATI ON: I f

t he Propert y is locat ed out side t he lim it s of a m unicipalit y , Seller not ifies

Buy er under §5 . 011, Tex as Propert y Code, t hat t he Propert y m ay now or lat er be included

in t he ext rat er r it or ial

j urisdict ion of

a m unicipalit y and m ay now

or

lat er be subj ect

t o

I nit ialed for ident ificat ion by Buy er

and Seller

TREC NO. 9 - 6

Cont r act Concerning

Page

3 of 8

02-13-06

( Addr ess of Pr oper t y)

annexat ion by t he m unicipalit y .

Each

m unicipalit y

m aint ains a

m ap

t hat

depict s it s

boundar ies and ext rat errit or ial j ur isdict ion . To det erm ine if t he Propert y is locat ed w it hin a

m unicipalit y’s ext rat err it or ial j urisdict ion

or is likely

t o be locat ed

w it hin

a m unicipalit y’s

ext rat er rit or ial j urisdict ion, cont act

all m unicipalit ies locat ed in t he gener al proxim it y

of t he

Propert y for furt her inform at ion.

you ar e about t o purchase

m ay

be locat ed in

a cer t ificat ed w at er or sew er service area,

w hich is aut horized by law

t o

provide wat er

or sew er service t o t he propert ies in t he

Local

Governm ent Code. The assessm ent m ay be due annually or in per iodic inst allm ent s.

More

inform at ion concerning t he am ount of t he assessm ent and t he due dat es of t hat

result in a lien on and t he foreclosure of your propert y .

( 8) TEXAS AGRI CULTURAL DEVELOPMENT DI STRI CT: The Propert y

is

is not locat ed in a

Texas Agricult ural Developm ent Dist r ict . For addit ional inform at ion,

cont act t he Texas

Depart m ent of Agr icult ur e.

t he Pr oper t y at r easonable t im es. Buyer m ay have

t he Pr opert y inspect ed by inspect or s

select ed by Buyer and licensed by TREC or ot herw ise

perm it t ed by law t o m ake inspect ions.

including

asbest os and

w ast es

or

ot her

environm ent al

hazards,

or

t he presence

of a

t hreat ened or endangered species or it s

habit at m ay affect Buyer’s

int ended use

of

t he

Propert y . I f Buyer is concerned about t hese m at t ers, an addendum

prom ulgat ed by TREC or

required by t he part ies should be used.

E. SELLER’S

DI SCLOSURES:

Except

as

ot herw ise disclosed

in t his

cont ract , Seller has

no

know ledge of t he follow ing:

( 1) any flooding of t he Propert y;

( 2)

any pending or t hreat ened lit igat ion, condem nat ion, or

special

assessm ent affect ing

t he

Propert y;

( 3)

any environm ent al hazar ds or condit ions affect ing t he Propert y;

( 4)

any dum psit e, landfill, or underground t anks or cont ainers now or previously locat ed on t he

Propert y;

( 5) any w et lands, as defined by feder al or st at e law or regulat ion, affect ing t he Propert y;

or

( 6)

any t hreat ened or endangered species or t heir habit at affect ing t he Proper t y .

I nit ialed for ident ificat ion by Buy er

and Seller

TREC NO. 9 - 6

Cont r act Concerning

Page 5 of 8

02-13-06

( Addr ess of Pr oper t y)

1 3 . PRORATI ON S AN D ROLLBACK TAX ES:

A. PRORATI ONS:

Taxes for t he

current year, int er est ,

m aint enance fees,

assessm ent s, dues

and rent s w ill

be prorat ed t hr ough t he Closing Dat e. The t ax pror at ion

m ay be

calculat ed

t aking int o consider at ion any change in exem pt ions t hat w ill affect t he current year's t axes. I f

t axes for t he current year v ary

from t he am ount prorat ed at closing,

t he part ies shall adj ust

t he prorat ions w hen t ax st at em ent s for t he current year are available. I f t axes ar e not paid at

or prior t o closing, Buyer shall pay t axes for t he current year .

B. ROLLBACK TAXES: I f t his sale

or Buyer’s use of t he

Proper t y aft er

closing result s

in

t he

assessm ent of addit ional t axes, penalt ies or int er est ( Assessm ent s) for periods pr ior t o closing,

t he Assessm ent s w ill be t he obligat ion of Buy er . I f Seller’s change in use of t he Pr opert y pr ior

t o closing or denial of a special use valuat ion on t he Propert y claim ed

by

Seller

r esult s

in

Assessm ent s

for periods prior

t o closing, t he Assessm ent s w ill be t he obligat ion of Seller .

enforce specific perform ance,

seek such ot her r elief as m ay be prov ided by law ,

or

bot h,

or ( b)

t erm inat e t his cont ract and receive t he earnest m oney as liquidat ed dam ages, t hereby releasing

bot h par t ies from t his cont r act .

I f, due t o fact ors bey ond Seller ’s cont r ol, Seller

fails w it hin t he

t im e allow ed t o m ake any non - casualt y repairs or deliv er t he Com m it m ent , or survey, if r equired

of Seller, Buyer m ay ( a) ext end t he t im e for perform ance up t o 15 day s and t he Closing Dat e w ill

be ext ended as necessary or

( b) t erm inat e

t his cont ract

as t he sole r em edy and

receiv e t he

earnest

m oney .

I f Seller fails t o com ply w it h t his cont ract

for any ot her reason, Seller w ill be in

default

and Buyer m ay ( a) enforce specific

perform ance,

seek such ot her

relief as

m ay be

prov ided by law , or bot h, or ( b) t erm inat e t his cont ract and receive t he earnest m oney , t her eby

r eleasing bot h par t ies fr om t his cont ract .

1 6 . M ED I ATI ON : I t

is t he policy

of t he St at e of Tex as t o encourage r esolut ion of disput es t hrough

alt ernat ive disput e resolut ion

procedures

such as m ediat ion . Any

disput e bet w een Seller and

Buyer relat ed t o t his cont ract

w hich is not

resolv ed t hrough inform al discussion

w ill

w ill not

be subm it t ed t o a m ut ually accept able m ediat ion serv ice or provider . The part ies t o t he m ediat ion

shall bear t he m ediat ion cost s equally .

This paragraph does not preclude a part y fr om

seeking

equit able relief from a court of com pet ent j urisdict ion.

1 7 . ATTORN EY' S

FEES: The prevailing par t y in any legal proceeding relat ed

t o

t his

cont ract is

ent it led t o recov er r easonable at t orney’s fees and all cost s of such proceeding incur r ed

by t he

pr evailing part y .

1 8 . ESCROW :

A.

ESCROW:

The escrow agent is not ( i) a part y t o t his cont r act and does not have liabilit y for

t he perform ance or nonperform ance of any part y t o t his cont ract , ( ii) liable for int erest on t he

ear nest m oney and ( iii) liable for t he loss of any earnest m oney caused by t he failure of any

financial inst it ut ion in w hich

t he earnest m oney has

been deposit ed unless t he financial

inst it ut ion is act ing as escrow agent .

B.

EXPENSES: At closing, t he earnest m oney m ust be applied fir st t o any cash dow n paym ent ,

t hen t o Buyer's Expenses and any excess refunded t o Buyer .

I f no closing occurs,

escrow

agent m ay

require paym ent

of unpaid expenses incurred on

behalf of

t he par t ies

and a

w rit t en release of liabilit y of escrow agent from all part ies.

C.

DEMAND:

Upon t erm inat ion

of t his cont r act , eit her par t y or t he escrow

agent

m ay

send a

release of earnest m oney

t o

each

part y

and t he part ies shall

execut e count erpart s

of t he

release and

deliver sam e

t o

t he escrow

agent . I f eit her part y

fails t o execut e

t he

r elease,

eit her part y m ay m ake a w rit t en dem and t o t he escrow agent for t he earnest m oney . I f only

one part y m akes w rit t en dem and for t he earnest m oney , escrow agent shall prom pt ly prov ide

a copy of t he dem and t o t he ot her part y . I f escr ow agent does not receiv e w rit t en obj ect ion t o

t he

dem and

from t he ot her

part y w it hin

15 day s, escr ow agent m ay disbur se

t he

earnest

m oney t o t he part y m aking dem and r educed by t he am ount of unpaid expenses incurred on

behalf of t he part y receiving t he earnest m oney and escrow agent m ay pay t he sam e t o t he

credit ors. I f escrow agent

com plies w it h t he provisions of t his paragraph, each part y

her eby

releases escrow agent from all adverse claim s relat ed t o t he disbursal of t he earnest m oney .

I nit ialed for ident ificat ion by Buy er

and Seller

TREC NO. 9 - 6