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Home My WebLink About05-15-12 Meeting of the La Porte Development Corporation Board of Directors RICHARD WARREN,PRESIDENT MIKE CLAUSEN, BOARD MEMBER MIKE COOKSLEY, BOARD MEMBERRANDY WOODARD, BOARD MEMBER JOHN ZEMANEK, BOARD MEMBERNANCY OJEDA, BOARD MEMBER CHUCK ENGELKEN, BOARD MEMBER CITY OF LA PORTE DEVELOPMENT CORPORATION MEETING AGENDA May 15, 2012,5:00p.m. 1. 2. 3. 4. 5. 6. 7. ( 8. 9. 10. 11. Page 1 of 2 May 15, 2012, La Porte Development Corporation Agenda In compliance with the Americans with Disabilities Act, the City of La Porte City will provide for reasonable accommodations for persons attending publicmeetings. To better serve attendees, requests should be received 24 hours prior to the meetings. Please contact Patrice Fogarty, City Secretary, at 281.470.5019. CERTIFICATION Page 2 of 2 May 15, 2012, La Porte Development Corporation Agenda RICHARD WARREN,PRESIDENT MIKE CLAUSEN, BOARD MEMBER VACANT POSITIONRANDY WOODARD,BOARDMEMBER JOHN ZEMANEK, BOARD MEMBERNANCY OJEDA, BOARD MEMBER CHUCK ENGELKEN, BOARD MEMBER MINUTES OF LA PORTE DEVELOPMENT CORPORATION BOARD MEETING OF APRIL 16, 2012 Monday, April 16,2012, 5:00p.m 1. Call to Order 2. Texas Government Code, Section 551.087(1)(2) – 3. 4. Page 1 of 2 April 16, 2012, La Porte Development Corporation Board Minutes MOTION PASSED. 5. 6. ( 7. 8.Adjournment Page 2 of 2 April 16, 2012, La Porte Development Corporation Board Minutes REQUEST FOR ECONOMIC DEVELOPMENT CORPORATIONAGENDA ITEM Appropriation Agenda Date Requested:May 14, 2012 Source of Funds:N/A Requested By: Traci Leach Account Number:N/A Department:Administration Amount Budgeted:N/A Report Resolution: Ordinance: Amount Requested: N/A Exhibit:Purchase and Sale Agreementfrom City to Budgeted Item:YESNO EDC Exhibit:Purchase and Sale Agreement from EDC to K. Belle Interests, LLC. SUMMARY & RECOMMENDATION In February 2012, staff presented information to both the Development Corporation Board(EDC) andthe City Council on an exception in Chapter 272 of the Local Government Code that allows municipalities to sell real property by utilizing an independent foundation, such as the EDC. This exception provides that a city can negotiate and sell property to a desired end user without public bid procedures provided that the land is developed by contract and sold through the independent foundation. Pursuant to Chapter 272.001 (b)(4), the City has, through its broker, negotiated the sale of 908W. Main Street toK. Belle Interests, LLCin the amount of $275,000 for the purpose of developing the property into officespace. The broker’s opinion of value, which in this case, is a more accurate representation of the property’s value than the appraisal, is $275,000.The prospective buyer has entered into aletter of intent, deposited earnest money with the broker, and will have to approve and sign the Restriction Agreementthat is attached to the Purchase and Sale Agreement as Exhibit A. The Purchase and Sale Agreement under consideration is the first procedural step that is required to complete the transaction. Should Council approve the Purchase and Sale Agreement to convey 908W. Main from the City to the EDC, the EDC must approve this documentprior to executing an identical Purchase and Sale Agreement that conveys the land from the EDC to K. Belle Interests, LLC. Staff recommendsthe following: Approval of the Purchase and Sale Agreement for 908 W. Main Street from the City to the EDC; and Approval of the Purchase and Sale Agreement for 908 W. Main Street from the EDC to K. Belle Interests, LLC. Action Required by Economic Development Corporation Board: 1.Consider approval or other action to authorize the La Porte Development Corporation Board president to negotiate and execute a purchase and sale agreement, and any necessary agreements and instruments related thereto, for the transfer of 908W. Main Street to the La Porte Development Corporation, acting as an independent foundation, for the resale of such property to K. Belle Interests for the development of office space. 2.Consider approval or other action to authorize the La Porte Development Corporation Board president to negotiate and execute a purchase and sale agreement, and any necessary agreements and instruments related thereto, for the transfer of 908 W. Main Street to K. Belle Interests for the development of office space. Approved for Economic Development CorporationAgenda Steve Gillett,Interim City Manager Date PURCHASE AND SALE AGREEMENT Purchase and Sales Agreement This (“Agreement”) to buy and sell real property is entered between City and Corporation as identified below and is effective on the date (“Effective Date”) of the last of the signatures by City and Corporation as parties to this Agreement, acknowledgement by Title Company of receipt of this Agreement. City: City of La Porte, a Texas home rule municipality Attn:Steve Gillett,Interim City Manager 604 W. Fairmont Parkway La Porte, Texas 77571 Phone: (281)471-5020 Fax: (281)___________________ E-mail: City’s Attorney: Knox W. Askins Askins & Askins, P.C. P.O. Box 1218 La Porte, Texas 77572-1218 Phone: (281)471-1886 Fax: (281)____-___________ E-mail: Corporation: La Porte Development Corporation, a Texas non-profit corporation Attn: Stacey Osborne 604 W Fairmont Parkway La Porte, Texas 77571 Phone: (281) 470-5017 Fax: (281) ____- ___________ E-mail: osbornes@laportetx.gov Developer: ___________________________________ ___________________________________ ___________________________________ Phone: (281)____________________ Fax: (281)____________________ E-mail: PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 1 Title Company:American Title Company Attn: _________________________ Commercial Division 5003 College Park Deer Park, Texas 77536 Phone: (281) 479-1913 Fax: (281).479-8609 E-Mail: dlansing@republictitle.com Property: Tract 1: Lots 9, 20 and 21, in Block 52, of TOWN OF LA PORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 57, Page 320 of the Deed Records of Harris County, Texas, SAVE LESS AND EXCEPT that portion of the above said lots (if any) and the interest therein, deeded to or condemned by governmental entities for the widening of West Main Street or for right of way purposes, and further described in instrument recorded in Volume 4569, Page 499 of the Deed Records of Harris County, Texas. Tract 2: Being a 0.241 acre tract or parcel of land situated in the Johnson Hunter Survey, Abstract No. 35, Harris County, Texas, and being all of Lots 7, 8 and 9 in Block 52 of the Resubdivision of Blocks 37 to 60 of the Town of La Porte, a subdivision according to the map or plat thereof recorded in Volume 67, Page 196 of the Deed Records of Harris County, Texas. Developer Sales Contract:That certain Purchase Agreementby and between Corporation and Developer relating to the sale by Corporation of the Property to Developer Attachment 1 substantially in the formattached hereto as and incorporated herein by reference. Restriction Agreement:That certain Restriction Agreement by and between Cityand Developer set forth asExhibit “A” in the Developer Sales Contract. Inspection Period: The period commencing on the Effective Date and ending on the termination of the Inspection Period as defined in the Developer Sales Contract. Closing Date:Concurrent with Corporation’s closing on the sale of the Property pursuant to the Developer Sales Contract. Purchase Price: $________________________ cash WHEREAS , Corporation desires to purchase the Property from City for resale to Developer pursuant to the Developer Sales Contract for development in accordance with the Restriction Agreement; and PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 2 WHEREAS, Tex. Loc. Gov’t Code § 272.001 allows City to convey land it wants developed by contracting with an independent foundation without auction or soliciting competitive bids; and WHEREAS, Corporation is a Texas non-profit corporation and qualifies as an independent foundation under Tex. Loc. Gov’t Code § 272.001; and WHEREAS, the Purchase Price isthe fair market value of the Property; and NOW, THEREFORE, in consideration of the sum of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: Sale and Purchase. 1. City agrees to sell and convey the Property to Corporation for the Purchase Price. Title, Survey, and Inspection Reports. 2. City and Corporation understand and acknowledge that Corporation will contract or has contracted with Developer pursuant to the Developer Sales Contract to sell and convey the Property to Developer. In order to save City, Corporation, and Developer the cost of multiple surveys and title policies and to expedite both transactions, City and Corporation agree: (a)City, as owner of the Property, agrees to reasonably cooperate with Corporation’s obligations as Seller set forth in Section 2 of the Developer Sales Contract with respect to curing title objections and, pursuant thereto, Corporation shall immediately forward to City any and all notices received by Corporation pursuant to Section 2(c) of the Developer Sales Contract; (b)The transaction described in this Agreement and the transaction described in the Developer Sales Contract shall be treated by the Title Company as a pass-through transaction such that Title Company shall issue only one owner’s title policy to Developer as the ultimate purchaser and owner of the Property pursuant to Section 5 of the Developer Sales Contract; and (c)City and Corporation will accept, review, and rely upon the survey, environmental studies, and other inspection reports of the Property obtained by Developer pursuant to the DeveloperSales Contract as if they were obtained by Corporation pursuant to this Agreement. Inspection Period. 3. During the Inspection Period, Corporation and/or Developer and its agents or employees shall have the right to enter upon the Property and conduct such inspections, tests and studies as they may deem reasonable and necessary in accordance with and subject to Section 3(a) of the Developer Sales Contract, including, but not limited to, Developer’s agreement to indemnify, defend, and hold City harmless as set forth in said Section 3(b) If for any reason Developer determines not to purchase the Property from Corporation and PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 3 terminates the Developer Sales Contract in accordance with Section 3(a) of the Developer Sales Contract, Corporation shall notify City and Title Company of such termination, in which case this Agreement shall terminate. In such event, neither party shall have any further claim against the other party under this Agreement. If Corporation does not timely terminate this Agreement under this Section 3, it shall have no further right to do so under this Section 3; and Corporation shall have waived its right to terminate this Agreement within the Inspection Period. Closing. 4. (a)Except as extended as provided herein, the closing of the sale of the Property shall occur on the Closing Date at the Title Company. (b)At the Closing, City shall deliver to the Title Company: (i)a special warranty deed, in form and substance reasonably acceptable to City, Corporation, and Developer conveyinggood and indefeasible title to the Property to Corporation, free and clear of any and all encumbrances subject only to the Permitted Exceptions; (ii)Such documents as may be reasonably required by Title Company in order for Title Company to issue a Title Policy in favor of Developer as the insured owner pursuant to Section 5 of the Developer Sales Contract; (iii)Evidence of City’s authority to close this transaction as may be required by the Title Company; and (iv)Settlementstatement, and such other documents as Title Company may reasonably require. (b) At the closing, Corporation shall deliver to City through Title Company: (i)the Purchase Price in cash or immediately available funds, inclusive of the Earnest Money previously paid by Developer and placed in Escrow pursuant to the Developer Sales Contract but less Corporation’s Closing cost deducted from the Purchase Price in accordance with the Developer Sales Contract; (ii)the Restriction Agreement signed by Corporation and Developer; and (iii)such other documents that the Title Company may reasonably require of Corporation. With respect to the issuance of the title policy, Cityagrees to execute such documents as required by the Title Company to allow the cost of the Owner’s Title Policy and any related endorsements that are required to be issued pursuant to the DeveloperSales PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 4 Contract regarding the Property are passed through to the sale of the Property by Corporation to Developer, it being the intent of City and Corporation that only one title policy by issued in favor of Developerfollowing the concurrent closing of this transaction and the transaction between Corporation and Developer. Taxes. 5. Corporation understands and acknowledges that the Property is presently exempt from the assessment of ad valorem taxes, which status may change upon conveyance of the Property to Corporation or Developer. City shall not be responsible for payment of property taxes assessed against the Property for periods after the date of Closing, if any become due and payable. Closing Costs. 6. City hereby agrees to pay and be responsible for all closing costs related to the sale of the Property to Corporation pursuant to this Agreement and Corporation’s closing costs as Seller pursuant to Section 7 of the Developer Sales Contract. Permitted Exceptions. 7. Those matters constituting Permitted Exceptions pursuant to the Developer Sales Contract shall constitute Permitted Exceptions pursuant to this Agreement. In addition, the Restriction Agreement shall be deemed to be a Permitted Exception. Property Sold As Is. 8. (a)Corporation hereby acknowledges and agrees that the sale of the Property hereunder is and will be made on an “as is, where is and with all faults” basis. The occurrence of Closing shall constitute an acknowledgment by Corporation that the Property was accepted without representation or warranty, express or implied (except as otherwise specifically set forth herein and except for the special warranties of title set forth in the special warranty deed). (b)Except as otherwise specifically set forth in this Agreement and except for the special warranties of title set forth in the special warranty deed, City hereby specifically negates and disclaims any representations, warranties or guaranties of any kind or character, whether express or implied, oral or written, past, present, future or otherwise, of, as to, concerning or with respect to the Property, including without limitation (i) the nature and condition of the Property and the suitability thereof for any and all activities and uses which Corporation or Developer may elect to conduct thereon, (ii) the nature and extent of any right-of-way, lease, possession, lien, encumbrance, license, reservation, condition orany other matter relating in any way to the Property, (iii) the compliance of the Property or its operation with any laws, ordinances or regulations of any government or other authority or body, (iv) the existence of any toxic or hazardous substance or waste in, on, under the surface of or about the Property, (v) geological conditions, including, without limitation, subsidence, subsurface conditions, water table, underground water reservoirs, limitations regarding the withdrawal of water and faulting, (vi)whether or not and to the extent to which the Property or any portion thereof is affected by any stream (surface or underground), body of water, flood prone area, floodplain, floodway or special flood hazard, (vii) drainage, (viii) zoning or land use restrictions rules and regulations to which the Property or any portion thereof may be PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 5 subject, (ix) the availability of any utilities to the Property or any portion thereof including, without limitation, water, sewage, gas and electric and including the utility availability capacities allocated to the Property by the relevant governmental or regulatory authority, (x) usages of adjoining property, (xi) access to the Property or any portion thereof, (xii) the value, compliance with the plans and specifications, size, location, age, use, design, quality, description, durability, structural integrity, operation, leasing, title to, or physical or financial condition of the Property or any portion thereof, or any income, expenses, charges, liens, encumbrances, rightsor claims on or affecting or pertaining to the Property or any part thereof, (xiii) the potential for further development of the Property, or (xiv) the merchantability of the Property or fitness of the Property for any particular purpose (Corporation affirming that Corporation has not relied on City’s skill or judgment to select or furnish the Property for any particular purpose, and that City makes no warranty that the Property is fit for any particular purpose). (c)Corporation agrees that prior to the expiration of the Inspection Period it will have the opportunity to examine and investigate the Property and that, in purchasing the Property, Corporation will rely solely upon its independent examination, study, inspection and knowledge of the Property, and Corporation is relying solely upon its own examination, study, inspection, and, except for representations and warranties specifically set forth herein and, except for the special warranties of title set forth in the special warranty deed, knowledge of the Property and Corporation’s determination of the value of the Property and uses to which the Property may be put, and not on any information provided or to be provided by City. (d)The provisions of this Section 8 shall survive the termination of this Agreement and the Closing. Compliance with Tex. Loc. Govt. Code §272.001. 9. Corporation understands and acknowledges that City is selling the Property to Corporation in Corporation’s capacity as an independent foundation pursuant to Tex. Loc. Gov’t Code §272.001 without conducting an auction or soliciting competitive bids, but subject to the requirement that the Property be developed in accordance with the Restriction Agreement. Corporation agrees that the resale of the Property to Developer shall be subject to the Restriction Agreement, which Developer must sign at Closing and which shall be recorded along with the Special Warranty Deed. Conditions of Closing. 10. Closing on this Agreement is expressly conditioned on and subject to the following: (a)The closing of the sale of the Property by Corporation to Developer concurrently with the Closing of this Agreement. (b)Developer signing, acknowledging and delivering to Title Company for recording at Closing the Restriction Agreement. Remedies. 11. If a party hereto defaults, the non-defaulting party’s sole remedy shall be to terminate this Agreement by providing written notice to the defaulting party. PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 6 Assignment of Rights to Depositand Option Fee. 12. As additional consideration for this Agreement, Corporation hereby assigns any and all rights that Corporation has as Seller pursuant to the Developer Sales Contract to receipt of any Earnest Money and the Option Fee as defined in the Developer Sales Contract in the event the Developer Sales Contract is terminated under such circumstances that Corporation becomes entitled to receipt of the Earnest Money from the Escrow Agent. City understands, acknowledges, and agrees that City shall have no vested rights in and to the Earnest Money unless and until such rights are vested in Corporation pursuant to the Developer Sales Contract. Reservation of Minerals. 13. Corporation agrees that City, for itself and its successors and assigns, as their interests may appear, reserves unto City all oil, gas and other minerals owned by City located in and under and that may be produced from the Property to the extent not reserved by prior grantors; provided, however, City, for itself and its successors and assigns hereby waives all surface rights and other rightsof ingress and egress in and to the Property, and agrees that in conducting operations with respect to the exploration for and production, processing, transporting and marketing of oil, gas and other minerals from the Property, that no portion of the surface of the Property will be used, occupied or damaged and that fixtures, equipment, buildings or structures used in connection with the exploitation of the reserved mineral, oil and gas rights, shall not be placed on the surface of the Property. Nothing herein, however, restricts or prohibits the pooling or unitization of the portion of the mineral estate owned by City with land other than the Property; or the exploration or production of the oil, gas, and other minerals by means of wells that are drilled or mines that open on land other than the Property but enter or bottom under the Property, provided that these operations in no manner interfere with the surface or subsurface support of any improvements constructed or to be constructed on the Property. The foregoing reservation of minerals and City’s waiver of surface rights set forth above shall be included in the special warranty deed. Additional Reservations. 14. In addition to the reservations of oil, gas, and mineral interests set forth in Section 13, above, City shall have the right to reserve at Closing for itself and its successors and assigns and the public such easements and rights-of-way shown on the final plat of the Propertyand such easements as may have been granted to City prior to City’s acquisition of title to the Property, which shall constitute Permitted Exceptions at Closing to the extent they affect the Property. Notices. 15. Notices must be in writing to and given at the addresses stated above. Notice given by delivery serviceor fax shall be effective upon receipt at the address of the addressee; notice given by mail shall be effective upon receipt. In addition, copies of notices shall be sent to (a) the attorney for the party to whom the notice is being sent and (b) to Developer and Developer’s attorneys as shown above. PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 7 Miscellaneous. 16. Entire Agreement (a).This Agreement contains the entire agreement between City and Corporation, and there are no other terms, conditions, promises, undertakings, statements or representations, either written or oral or express or implied, concerning the sale contemplated by this Agreement. Modifications and Waiver. (b)This Agreement may be amended only by an instrument in writing signed by both City and Corporation. This Agreement may be terminated only in accordance with the terms of this Agreement or by an instrument in writing signed by both City and Corporation. No waiver of any of the provisions of this Agreement shall constitute a waiver of any other provision, nor shall any waiver be a continuing waiver. Except as expressly provided in this Agreement, no waiver shall be binding unless executed in writing by the party making the waiver. Assignment (c). Neither party may assign its rights under this Agreement without the prior written consent of the other party.Corporation shall be authorized to consent to an assignment of the Developer Sales Contract without consent of City, but only if the assignee of the Developer Sales Contract assumes all obligations of Developer under the Developer Sales Contract. Time is of the Essence (d). Time is of the essence with respect to the performance by the parties of their respective obligations hereunder. Effective Date. (e)The Effective Date of this Agreement shall be the date on which the authorized representatives of the parties have signed this Agreementand the Option Fee has been paid. Non-Business Day. (f) If the final date of any period provided herein for the performance of an obligation or for the taking of any action falls on a Saturday, Sunday, or holiday, then the end of such period shall be extended to the next business day. Headings (g). Section headings are for convenience of reference only and do not modify or restrict any provisions hereof and shall not be used to construe any provisions. Brokers (h). City and Corporation represent that no other broker is involved in this Agreement and, to the extent allowed by law, each party indemnifies the other against brokerage or commission claims arising out of the indemnifying party's actions. Counterparts. (i)This Agreement may be executed in any number of counterparts, each of which shall be deemed an original for all purposes and constitute one and the same instrument; but in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 8 Legal Construction (j).In the event any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect other provisions,and the Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained in it. Law Governing (k). This Agreement shall be construed under and in accordance with the laws of the State of Texas; and venue for any action arising from this Agreement shall be in the State District Court of Dallas County, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. Survival of Covenants (l). Any of the representations, warranties, covenants, and obligations of the parties, as well as any rights and benefits of the parties, pertaining to a period of time following the Closing shall survive. (signature page to follow) PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 9 SIGNED AND AGREED this the _______ day of ___________, 2012. City of La Porte, Texas By: ______________________________________ Steve Gillett,Interim City Manager SIGNED AND AGREED this the ________ day of ___________, 2012. La Porte Development Corporation By: ______________________________________ Richard Warren, President RECEIPT OF CONTRACT Title Company acknowledges receipt of a copy of this Agreement executed by both Corporation and City on the ___ day of _______________________, 2012. By:______________________________________ Name:___________________________________ Title:____________________________________ PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 10 ATTACHMENT 1 FORM OF DEVELOPER SALES CONTRACT PURCHASE AND SALE AGREEMENT Purchase and Sale Agreement This (“Agreement”) to buy and sell real property is entered between Seller and Buyer as identified below and is effective on the date set forth in Section 17(e) (“Effective Date”). Seller:La Porte Development Corporation, a Texas non-profit corporation Seller’s AddressAttn: Stacey Osborne 604 W Fairmont Parkway La Porte, Texas 77571 Phone: (281) 470-5017 Fax: (281) ____- ___________ E-mail: osbornes@laportetx.gov Seller’s AttorneyKnox W. Askins Askins & Askins, P.C. P.O. Box 1218 La Porte, Texas 77572-1218 Phone: (281) 471-1886 Fax: (281) ___-_________ E-mail: Purchaser:___________________________________ Purchaser’s Attn:________________________________ Address____________________________________ La Porte, Texas 77571 Phone: (281) ____-__________ Fax: (281) ____-__________ E-mail: ATTACHMENT I TO PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 11 Property: Tract 1: Lots 9, 20 and 21, in Block 52, of TOWN OF LA PORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 57, Page 320 of the Deed Records of Harris County, Texas, SAVE LESS AND EXCEPT that portion of the above said lots (if any) and the interest therein, deeded to or condemned by governmental entities for the widening of West Main Street or for right of way purposes, and further described in instrument recorded in Volume 4569, Page 499 of the Deed Records of Harris County, Texas. Tract 2: Being a 0.241 acre tract or parcel of land situated in the Johnson Hunter Survey, Abstract No. 35, Harris County, Texas, and being all of Lots 7, 8 and 9 inBlock 52 of the Resubdivision of Blocks 37 to 60 of the Town of La Porte, a subdivision according to the map or plat thereof recorded in Volume 67, Page 196 of the Deed Records of Harris County, Texas. City:City of La Porte, a Texas home rule municipality City’s Address:Attn: City Manager 604 W Fairmont Parkway La Porte, Texas 77571 Phone: (281) 471-5020 Fax: (281) ____-___________ E-mail: gilletts@laportetx.gov City’s Attorney:Knox W. Askins Askins & Askins, P.C. P.O. Box 1218 La Porte, Texas 77572-1218 Phone: (281) 471-1886 Fax: (281) ____-___________ E-mail: Title Company:American Title Company Attn: Staci Gay Commercial Division 5003 College Park Deer Park, Texas 77536 Phone: (281) 479-1913 Fax: (281).479-8609 E-Mail: ATTACHMENT I TO PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 12 Inspection Period:The period commencing onthe Effective Date and ending fifteen (15) days after the Effective Date Earnest Money:$10,000.00 Option Fee:$100.00 (Paid to Seller at time of execution of this Agreement, non-refundable, and to be credited to Purchase Price at Closing) Closing Date:________ (____) days after the end of the Inspection Period Purchase Price:$275,000cash. City Sales That certain Purchase and Sale Agreementdated and effective May 14, 2012, by Contract: and between City and Seller relating to the sale by City of the Property to Seller. Restriction That certain Restriction Agreement by and between City and Purchaser set forth in AgreementExhibit “A,” attached hereto and incorporated herein by reference. NOW, THEREFORE, in consideration of the sum of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: Sale and Purchase. 1.Seller agrees to sell, and Purchaser agrees to purchase the Property as provided in this Agreement for the Purchase Price. Title, Survey, and Environmental Reports. 2. (a)Not later than ten (10) days after the Effective Date, Seller shall, at Seller’s expense, deliver to Purchaser: (i)a current commitment for an Owner’s Policy of Title Insurance for the Property from the Title Company, setting forth the state of title to the Property together with any easements or restrictions (existing or created pursuant hereto) benefiting or burdening the Property, together with all exceptions or conditions to such title; (ii)legible copies of all documents referenced in the Title Commitment; (iii)any environmental or geotechnical studies or reports that Seller may have in its possession with respect to the Property; and (iv)tax certificate(s) regarding the payment of ad valorem taxes for current and prior years. (b) Purchaser shall, not later than twenty (20) days after the Effective Date, and at Purchaser’s expense, obtain a survey of the Property and deliver same to Seller. “Survey” means an on- the-ground, staked plat of survey and metes-and-bounds description of the Property, prepared by a Texas Registered Property Land Surveyor or another surveyor satisfactoryto Title Company, dated after the Effective Date, and certified to comply with the current standards and specifications as published by the Texas Society of Professional Surveyors required for obtaining deletion of the survey exception in the Title Policy. In lieu of a new survey, Purchaser may provide a previously prepared survey accompanied ATTACHMENT I TO PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 13 by an affidavit (e.g. Form T-47 modified for commercial transactions) reasonably acceptable to Title Company and Seller. (c)Purchaser shall, not later than five (5) days after Purchaser’s receipt of the last of the Survey and Title Commitment, notify Seller and Title Company of any objections to the Survey or Title Commitment. If there are objections by Purchaser, Seller shall in good faith attempt to satisfy them prior to Closing, but Seller shall not be required to incur any cost to do so. If Seller delivers written notice to Purchaser not later than the ten (10) calendar day after Seller’s receipt of Purchaser’s objections that Seller is unable to satisfy such objections, Purchaser may either waive such objections and accept title as Seller is able to convey or terminate this Agreement by written notice to Seller and the Title Company prior to the expiration of the Inspection Period. Inspection Period. 3. (a)During the Inspection Period, Purchaser and its agents or employees shall have the right to enter upon the Property during regular business hours upon reasonable notice and conduct such inspections, tests and studies as they may deem necessary. If for anyreason Purchaser determines not to purchase the Property, Purchaser may terminate this Agreement by notifying Seller and Title Company in writing prior to the expiration of the Inspection Period and neither party shall have any further claim against the other under this Agreement. If Purchaser does not timely terminate this Agreement under this Section 3, Purchaser shall have no further right to do so under this Section 3; and Purchaser shall have waived its right to terminate this Agreement within the Inspection Period. (b) Purchaser may enter the Property to conduct its inspection, but shall be solely responsible . Purchaser shall repair any damage to the Property it causes or that for any damages caused thereby is caused by its agents or invitees, and shall indemnify and defend Seller and City and hold Seller and City harmless from and against any and all claims, liabilities or damages to the Property or against Seller caused by the intentional or negligent acts or omissions of Purchaser and/or Purchaser’s authorized agents, representatives or employees during the Inspection Period or as a result of any inspection of the Property by such parties. Closing Date. 4. The closing of the sale of the Property shall occur on the Closing Date at the Title Company, or at such other time as may be agreed in writing by the parties. Closing Deliverables. 5. (a)At the closing of the Property, Seller shall deliver to the Title Company: (i)a special warranty deed, in form and substance reasonably acceptable to Seller and Purchaser, conveying good and indefeasible title to Purchaser, free and clear of any and all encumbrances except the Permitted Exceptions, excluding the mineral rights, such mineral rights being reserved by City pursuant to the City Sales Contract or by prior grantors; (ii)such documents as may be reasonably required by Title Company in order to cause Title Company to issue a Texas owner’s policy of title insurance (or equivalent) in the amount of the Purchase Price, insuring such title to Purchaser; (iii)possession of the Property, free of parties in possession. ATTACHMENT I TO PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 14 (b) At the Closing, Purchaser shall deliver to Seller through the Title Company: (i)the Purchase Price; and (ii)the Restriction Agreement duly executed by Purchaser. With respect to the issuance of the title policy, Purchaser agrees to execute such documents as required by the Title Company to allow the cost of the Owner’s Title Policy and any related endorsements that are required to be issued pursuant to the City Sales Contract regarding the Property are passed through to the sale of the Property by Seller to Purchaser, it being the intent of Purchaser and Seller that only one title policy by issued in favor of Purchaser following the concurrent closing of this transaction and the transaction between Seller and City. Taxes. 6. Purchaser understands and acknowledges that the Property is presently exempt from the assessment of ad valorem taxes, which status will change upon conveyance of the Property to Purchaser. Seller shall not be responsible for payment of property taxes assessed against the Property for periods after the date of Closing, if any become due and payable. Closing Costs. 7. (a)Seller hereby agrees to pay and be responsible for the following closing cost with respect to the closing of the Property: (i) the cost of all tax certificates relating to all taxes and other assessments incurred or arising in relation to the Property; (ii) one-half (½) of the Title Company’s escrow fees; (iii)the basic premium for the Owner’s Policy of Title Insurance; (iv) all costs and expenses incurred by or on behalf of the Seller, including Seller’s attorney’s fees; and (v) such other incidental costs and fees customarily paid by sellers of real property in Harris County, Texas, for transactions of a similar nature to the transaction contemplated herein. (b) Purchaser hereby agrees to pay and be responsible for the following closing cost with respect to the closing on the purchase of the Property: (i) all fees and premiums for any endorsements to the Basic Owner’s Title Policy; (ii) all fees and costs for the Survey; (iii) one-half (½) of the Title Company’s escrow fees; (iv)feesfor recording the Restriction Agreement and the Special Warranty Deed with the County Clerk of Harris County; ATTACHMENT I TO PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 15 (v) all costs and expenses incurred by or on behalf of the Purchaser, including Purchaser’s attorneys’ fees; (vi)all premiums and fees for optional riders and amendments to the Basic Owner’s Title Policy and all costs related to issuance of any Mortgagee’s Title Policy; and (vii) such other incidental costs and fees customarily paid by purchasers of property in Harris County, Texas, for transactions of a similar nature to the transaction contemplated herein. Conditions to Closing. 8. Closing on the sale of the Property shall be conditioned upon: (i)Purchaser having executed the Restriction Agreement; (ii)Seller closing on the purchase of the Property from City pursuant to the City Sales Contract; and (iii)The zoning of the Property being amended, if necessary, and a Site Plan for the Property, if necessary, such that Purchaser may develop and use the Property for the Required Use as defined in the Restriction Agreement. If the Property is not zoned for such use or a Site Plan is not approved as of the Effective Date, Seller agrees to obtain the consent of City to allow Purchaser the right to file an application with City to seek an amendment to the zoning regulations affecting the Property and/or adopt a Site Plan to allow the Property to be used for the Required Use. Purchaser understands and acknowledges that City has not waived its legislative authority or is otherwise contractually obligated pursuant to the City Sales Contract to adopt any amendments to City’s Comprehensive Zoning Ordinance, as amended, or approve any particular Site Plan, Seller agrees to reasonably cooperate with Purchaser in the application for any zoning amendment or Site Plan approval requested by Purchaser and shall execute all necessary and appropriate instruments as owner of the Property. The application for rezoning the Property and/or approving a Site Plan shall be made in the name of either Seller or Purchaser as required under governing law; and (iv)The Property being replatted, if necessary, so that it constitutes one or more defined lots as determined in accordance with Seller’s subdivision ordinance. Seller agrees to reasonably cooperate and participate with Purchaser in the prosecution of any plat application for the replat of the Property so that the Property is identified as one or more separate and distinct lots as determined by Purchaser. If the conditions set forth in (ii), (iii), and/or (iv) have not been satisfied on or before ten (10) days prior to Closing, the Closing Date shall be extended for a period of thirty (30) days. If the conditions set forth in (iii), and/or (iv) have still not been approved by the end of said thirty.(30) day period, Purchaser may either (1) extend the Closing Date for an additional thirty (30) day period, (2) waive the condition and proceed to Closing, or (3) terminate this Agreement as Purchaser’s sole remedy. If the condition set forth in (ii) has still not been approved by the end of said thirty.(30) day period, Purchase shall only have the right to (1) extend the Closing Date for and additional (30) day period or (2) terminate this Agreement and receive a refund of the Earnest Money. PermittedExceptions. 9. ATTACHMENT I TO PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 16 (a)Purchaser acknowledges and agrees that the Property will be conveyed by Seller at closing subject to the Restriction Agreement and that the Special Warranty Deed shall contain reference to same. The (i) zoning, (ii) lien for current taxes, (iii) environmental condition, (iv) the Restriction Agreement, and (v) matters appearing on Schedule B of the Title Commitment that were not cured and to which Purchaser failed to object or otherwise waived objection shall be deemed to be Permitted Exceptions. (b) Purchaser understands, acknowledges, and agrees that all rights-of-ways and easements dedicated to City on behalf of the public and which appear on the final plat of the Property may be reserved prior to Closing by City for itself and its successors and assigns and the public, which reservations shall constitute Permitted Exceptions at Closing to the extent they affect the Property. Representations and Covenants. 10. Seller represents and covenants that: (a) it has authority to enter into this Agreement; and (b) no other person has any interests in or claims against the Property (other than as reflected by the Title Commitment), and it will not hereafter encumber the Property. Purchaser represents that it has authority to enter into this Agreement. The only representations made by any party concerning the Property and this Agreement are as set out in this Section 10. Property Sold As Is. 11. (a)Purchaser represents that as of the Closing Date that it: (i)will have fully inspected the Property; and (ii)will have made all investigations as it deems necessary or appropriate and will be relying solely upon its inspection and investigation of the Property for all purposes whatsoever, including, but not limited to, the determination of the condition of the structures, improvements, soils, subsurface, drainage, surface and groundwater quality, and all other physical characteristics; availability and adequacy of utilities; compliance with governmental laws and regulations; access; encroachments; acreage and other survey matters and the character and suitability of the Property. (b) Purchaser hereby acknowledges and agrees that the sale of the Property hereunder is and will be made on an “as is, where is and with all faults” basis. The occurrence of Closing shall constitute an acknowledgment by Purchaser that the Property was accepted without representation or warranty, express or implied (except as otherwise specifically set forth herein and except for the special warranties of title set forth in the special warranty deed). (c)Except as otherwise specifically set forth in this Agreement and except for the special warranties of title set forth in the special warranty deed, Seller hereby specifically negates and disclaims any representations, warranties or guaranties of any kind or character, whether express or implied, oral or written, past, present, future or otherwise, of, as to, concerning or with respect to the Property, including without limitation (i) the nature and condition of the Property and the suitability thereof for any and all activities and uses which Purchaser may elect to conduct thereon, (ii) the nature and extent of any right- of-way, lease, possession, lien, encumbrance, license, reservation, condition or any other matter relating in any way to the Property, (iii) the compliance of the Property or its operation with any laws, ordinances or regulations of any government or other authority or body, (iv) the existence of any toxic or hazardous substance or waste in, on, under the surface of or about the Property, (v) geological conditions, including, without limitation, subsidence, subsurface conditions, water table, underground water reservoirs, ATTACHMENT I TO PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 17 limitations regarding the withdrawal of water and faulting, (vi) whether or not and to the extent to which the Property or any portion thereof is affected by any stream (surface or underground), body of water, flood prone area, floodplain, floodway or special flood hazard, (vii) drainage, (viii) zoning or land use restrictions rules andregulations to which the Property or any portion thereof may be subject, (ix) the availability of any utilities to the Property or any portion thereof including, without limitation, water, sewage, gas and electric and including the utility availability capacities allocated to the Property by the relevant governmental or regulatory authority, (x) usages of adjoining property, (xi) access to the Property or any portion thereof, (xii) the value, compliance with the plans and specifications, size, location, age, use, design, quality, description, durability, structural integrity, operation, leasing, title to, or physical or financial condition of the Property or any portion thereof, or any income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to the Property or any part thereof, (xiii) the potential for further development of the Property, or (xiv) the merchantability of the Property or fitness of the Property for any particular purpose (Purchaser affirming that Purchaserhas not relied on Seller’s skill or judgment to select or furnish the Property for any particular purpose, and that Seller makes no warranty that the Property is fit for any particular purpose). The warranties, representations, agreements, indemnification and release set forth in this Paragraph 11 shall survive closing, and shall be incorporated into the deed. Reservation of Minerals; Waiver of Surface Rights. 12. Purchaser understands, acknowledges, and agrees that City, for itself and its successorsand assigns, as their interests may appear, has reserved from its conveyance of the Property to Seller pursuant to the City Purchase Contract all oil, gas and other minerals owned by City located in and under the Property and that may be produced from the Property to the extent not reserved by prior grantors; and that City, for itself and its successors and assigns has agreed (i) to waive all surface rights and other rights of ingress and egress in and to the Property, and (ii) that in conducting operations with respect to the exploration for and production, processing, transporting and marketing of oil, gas and other minerals from the Property, that no portion of the surface of the Property will be used, occupied or damaged and that fixtures, equipment, buildings or structures used in connection with the exploitation of the reserved mineral, oil and gas rights, shall not be placed on the surface of the Property. Purchaser further understands, acknowledges, and agrees that City shall not be restricted or prohibited from the pooling or unitization of the portion of the mineral estate owned by City with land other than the Property; or the exploration or production of the oil, gas, and other minerals by means of wells that are drilled or mines that open on land other than the Property but enter or bottom under the Property, provided that such operations will in no manner interfere with the surface or subsurface support of any improvements constructed or to be constructed on the Property. The foregoing reservation of minerals and City’s waiver of surface rights set forth above shall survive closing and be included in substance in the special warranty deed. Remedies. 13. If Purchaser defaults, Seller’s sole remedy shall be to terminate this Agreement and receive payment of the Earnest Money as liquidated damages. If Seller defaults, Purchaser’s sole remedy shall be to terminate this Agreement and receive a refund of the Earnest Money. No termination shall occur pursuant to a default until the non-defaulting party has provided written notice of default not less than ten (10) days prior to the proposed date of termination and the defaulting party has failed to cure the default; provided, however, if all parties have fully performed and all conditions to Closinghave been satisfied other than the signing of documents close on the sale of the Property and one party fails to perform such necessary acts to deliver funds and execute documents required for Closing, on the date of Closing, then ATTACHMENT I TO PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 18 this Agreement shall terminate one (1) business day after demand is made to the non-performing party and the party continues to fail to close on the transaction. Notices. 14. Notices must be in writing and may be hand delivered and/or mailed by certified mail with return receipt requested to the addresses stated above. Notice given by delivery service shall be effective upon receipt at the address of the addressee; notice given by mail shall be effective upon earlier of actual receipt or three (3) days after placing the notice in a receptacle of the United States Postal Service, postage prepaid and properly addressed. In addition, copies of notices shall be provided to the party’s attorney at the addresses indicated above. Term. 15. This Agreement shall be effective onthe Effective Date and, except for the provisions of this Agreement that survive termination, shall terminate: (a)on the closing date of the sale of the Property to Purchaser; (b) on the date mutually agreed by the parties; or (c)the date the Agreement is terminated pursuant to Section 13, above. Sale Subject to Provisions of Tex. Loc. Govt. Code §272.001. 16. Purchaser acknowledges having been advised that pursuant to the City Purchase Contract, City has contracted with Seller as an independent foundation to sell the Property without requiring an auction or solicitation of competitive bids subject to City’s requirement that the Property be developed by Purchaser in accordance with the Restriction Agreement. Miscellaneous. 17. This Agreement is subject to the following additional provisions and conditions: (a)Entireties. This Agreement contains the entire agreement of the parties pertaining to the Property. (b) Modifications. This Agreement may only be modified by a written document signed by both parties. (c)Assignment. Purchaser may not assign its rights under this Agreement to any entity without the express written consent of Seller. (d) Time is of the Essence. Time is of the essence with respect to the performance by the parties of their respective obligations hereunder. (e)Effective Date. The Effective Date of this Agreement shall be the last date on which the authorized representatives of all parties have signed this Agreement and the payment of the Option Fee has been paid. (f)Non-Business Day. If the final date of any period provided herein for the performance of an obligation or for the taking of any action falls on a Saturday, Sunday, federal holiday, or a day on ATTACHMENT I TO PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 19 which Seller’s main offices are not open for regular business, then the end of such period shall be extended to the next day that is not one of the foregoing described days. (g)Zoning. Seller assumes no obligation to change the current zoning on the Property. (h) Brokers.The parties represent and warrant they have not worked with any broker relative to this transaction and that no brokerage commission is due and payable upon the Closing. To the extent allowed by law, each party shall indemnify each other from any claim for brokers’ commissions relative to the sale of the property and alleged to be due. Purchaser does represent and disclose that certain of its officers and employees are licensed real estate agents or brokers in the State of Texas. (i)Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original for all purposes and constitute one and the same instrument; but in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. (j)Legal Construction. In the event any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect other provisions, and the Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained in it. (k)Law Governing. This Agreement shall be construed under and in accordance with the laws of the State of Texas; and venue for any action arising from this Agreement shall be in the State District Court of Harris County, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. (l)Survival of Covenants. Any of the representations, warranties, covenants, and obligations of the parties, as well as any rights and benefits of the parties, pertaining to a period of time following the termination of this Agreement shall survive. (signatures on next page) ATTACHMENT I TO PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 20 SIGNED AND AGREED this the _______ day of ___________, 2012. SELLER : La Porte Development Corporation, a Texas non-profit corporation By: ______________________________________ Richard Warren, President SIGNED AND AGREED this the ________ day of ___________, 2012. PURCHASER: ________________________________, a Texas __________________________ By: _____________________________________ Name:_________________________________ Its:____________________________________ RECEIPT OF CONTRACT Title Company acknowledges receipt of a copy of this Agreement executed by both Seller and Purchaser on the ___ day of _______________________, 2012. By:______________________________________ Name:___________________________________ Title:____________________________________ ATTACHMENT I TO PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 21 EXHIBIT “A” Form of Restriction Agreement WHEN RECORDED RETURN TO: (Space Above For Recorder’s Use Only) NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER STATE OF TEXAS § § RESTRICTION AGREEMENT COUNTY OF HARIS § RESTRICTION AGREEMENT This (“Agreement”) is made and entered into as of the Effective Date by and between the City of La Porte, a Texas home-rule municipality (“City”), and K. Belle Interests(“Developer”), a Texas limited liability company, acting by and through their respective authorized officers. RECITALS WHEREAS, as of the Effective Date, pursuant to the Purchase Agreement, Developer has purchased the Property from the LPDC; and WHEREAS, prior to or concurrent with the sale of the Property to Developer, LPDC purchased the Property from City pursuant to that certain Purchase and Sale Agreement effective May 14, 2012, between City and LPDC (“the City Contract”) without City seeking sealed bids or conducting an auction prior to the sale of the Property to LPDC pursuant to the statutory exception to such requirements set forth in Texas Local Government Code §272.001(b)(4); and WHEREAS, as a condition of the sale of the Property to LPDC and pursuant to Texas Local Government Code §272.001(b)(4), the City Contract requires that LPDC have the Property redeveloped and used for the Required Use; and WHEREAS, LPDC has, as a condition of the conveyance of the Property to Developer, restricted the useof the Property and required Developer to develop the Property with the Improvements in accordance with the terms and conditions set forth herein; and WHEREAS, as a condition to and in consideration of the LPDC’s conveyance of the Property to Developer, Developer has agreed to develop the Property in accordance with this Restriction Agreement; and ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 1 WHEREAS, Developer desires to grant City an option to repurchase the Property in the event Developer fails to cause Commencement of Construction or Completion of Construction (hereinafter defined) of the Improvements in accordance this Restriction Agreement, subject to the terms and conditions hereafter set forth; NOW, THEREFORE, in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Developer hereby agree as follows: Article I Property Subject to Declaration The Property shall be owned, held, leased, transferred, sold, mortgaged and/or conveyed by Developer and any subsequent owners (as such term is hereinafter defined for the term specified in Section 5.2), subject to the terms of this Restriction Agreement. Article II Definitions For purposes of this Agreement, the following words and phrases shall have the following meanings unless the context clearly indicates a different meaning: “Developer” means K. Belle Interests, a Texas limited liability company. “City” shall mean the City of La Porte, a Texas a home rule municipality located in the County of Harris, State of Texas. “City Manager” shall mean the City Manager of City. “Commencement of Construction” shall mean (i) the plans have been prepared and all approvals thereof required by applicable governmental authorities have been obtained for construction of the Improvements, (ii) all necessary permits for the construction of the Improvements have been issued by the applicable governmental authorities and (iii) construction of the elements of the building elements of the Improvements has commenced. “Completion of Construction” shall mean (i) substantial completion of the Improvements on the Land has occurred, and (ii) a certificate of occupancy or final inspection has been issued by City for occupancy of the Improvements for the Required Use by Developer. “Effective Date” shall mean the date this Agreement is signed by all parties hereto. “LPDC” shall mean the La Porte Development Corporation, a Texas non-profit corporation. “Force Majeure” shall mean any contingency or cause beyond the reasonable control of a party including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, by the order of a court resulting from any litigation brought by a third party to prevent or delay Developer’ development, construction, or operation, City delay of permits or ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 2 other approvals, government or de facto governmental action (unless caused by acts of omissions of the party), pending referendum, fires,explosions or floods, strikes, slowdowns or work stoppages. Such extension shall be for a period equal to the actual length of such delay, together with any time reasonably required by Developer to re-mobilize for construction as a result of such delay. “Improvements” shall mean the structures located on the Property, inclusive of any materials, equipment, and fixtures incorporated into said structures by Developer as necessary to be able to use obtain a certificate of occupancy from City to occupy and use the Property for the Required Use. “Property” shall mean Tract 1: Lots 9, 20 and 21, in Block 52, of TOWN OF LA PORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 57, Page 320 of the Deed Records of Harris County, Texas, SAVE LESS AND EXCEPT that portion of the above said lots (if any) and the interest therein, deeded to or condemned by governmental entities for the widening of West Main Street or for right of way purposes, and further described in instrument recorded in Volume 4569, Page 499 of the Deed Records of Harris County, Texas; and Tract 2: Being a 0.241 acre tract or parcel of land situated in the Johnson Hunter Survey, Abstract No. 35, Harris County, Texas, and being all of Lots 7, 8 and 9 in Block 52 of the Resubdivision of Blocks 37 to 60 of the Town of La Porte, a subdivision according to the map or plat thereof recorded in Volume 67, Page 196 of the Deed Records of Harris County, Texas. “Option Period” shall mean that period of time commencing on closing of the purchase of the Land by Developer and ending on the earlier of (a) Completion of Construction or (b) (72 months. “Option Price” shall mean the Purchase Price stated in the Purchase Agreement less all closing costs and expenses paid orincurred by LPDC pursuant to the Purchase and Sale Agreement and pursuant to the exercise of the Option. “Property” shall collectively mean the Property and any Improvements following construction thereof on the Property. “Purchase Agreement” shall mean that certain Purchase and Sale Agreement, as amended or assigned, by and between LPDC and Developer, effective May 15, 2012. “Required Use” shall mean the development and use of the Property for the purpose of operating a business enterprise that meets the City’s economic development goals and is a permitted use under the zoning regulations applicable to the Property. ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 3 Article III Option Grant of Option 3.1. In consideration of TEN AND NO/100 DOLLARS ($10.00), in hand paid by City to Developer and other good and valuable consideration, the receipt and sufficiency of which is acknowledged by Developer, Developer hereby grants to City during the Option Period an option to repurchase the Property (the “Option”). Time for Exercising Option 3.2. Subject to Section 3.3, below, the Option may be exercised by City in its sole discretion by providing written notice to Developer upon the occurrence of the following: (a)any time after24 months, if Developer has failed to cause Commencement of Construction of the Improvements to occur on the Property on or before that date, provided Commencement of Construction has in fact still not occurred on the date of the exercise of the Option; or (b)any time after60 months, but before the end of the Option Period, if Commencement of Construction has occurred, but Developer has failed to cause Completion of Construction by that date, provided Completion of Construction has in fact still not occurred on the date of the exercise of the Option. Force Majeure 3.3. In the event of Force Majeure, Developer shall have such additional time to cause Commencement of Construction or Completion of Construction, as the case may be, so long as Developer is diligently and faithfully pursuing the same. The termination of the Option Period shall be extended for the same number days that the performance of Developer with respect to Commencement of Construction or Completion of Construction is extended by Force Majeure. Sole Remedy. 3.4The City’s sole and exclusive remedy for violation of the obligation of Developer for the Commencement of Construction of Construction and Completion of Construction shall be the exercise of the Option. Article IV Terms of Sale Upon Exercise of Option Effect of Exercise of the Option. 4.1 Upon any timely exercise of the Option by City in accordance with the foregoing provisions, the conveyance of the Property to be conveyed to City shall be in accordance with the provisions in this Article IV. ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 4 Title, Survey, and Environmental Reports. 4.2. (a)Not later than the fifteenth (15th) business day after the exercise of the Option, Developer shall, at Developer’ expense, deliver to City: (i)a current commitment for an Owner’s Policy of Title Insurance from the Title Company for the portion of the Property to be conveyed to City, setting forth the state of title to the Property together with any easements or restrictions (existing or created pursuant hereto) benefiting or burdening the Property, together with all exceptions or conditions to such title; (ii)legible copies of all documents referenced in the Title Commitment; (iii)any environmental studies or reports that Developer may have in its possession with respect to the Property; and, (iv)tax certificate(s) regarding the payment of ad valorem taxes for current and prior years. (b)Upon any exercise of the Option, City shall have the right, at its sole option, to cause a boundary or “as-built” survey of the Property to be made by a certified land surveyor selected by it. Such survey shall be made at the sole cost and expense of City. (c)City shall, not later than twenty (20) days after City’s receipt of the last of the Survey and Title Commitment, notify Developer and Title Company of any objections to the Survey or Title Commitment. If there are objections by City, Developer shall in good faith attempt to satisfy them prior to Closing. If Developer delivers written notice to City not later th than the tenth (10) calendar day after Developer’ receipt of City’s objections that Developer is unable tosatisfy such objections, City may either waive such objections and accept title as Developer is able to convey or terminate the exercise of the Right by written notice to Developer and the Title Company. Closing. 4.3. (a)The closing of the sale of the Property identified in the notice exercising the Option shall occur not later than sixty (60) calendar days following the date of exercise of the Option unless otherwise extended by written agreement of Developer and City. (b) At the closing, Developer shall deliver to City: (i)a special warranty deed, in form and substance substantially similar to the form used to convey the Property to Developer pursuant to the Purchase Agreement, conveying good and indefeasible title to the Property described in the notice exercising the Option and/or the survey obtained by City (whichever is the most accurate description) to City, free and clear of any and all encumbrances except the Permitted Exceptions, save and except such oil, gas, and other minerals as may have been reserved by prior grantors; ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 5 (ii) an owner’s policy of title insurance (or equivalent) in the amount of the Purchase Price, insuring such title to City; and (iii) possession of the Property, free of parties in possession. (c)At closing, City shall pay incash or by certified or cashier’s check the Option Price described in Article II, less all Closing Costs and other costs and expenses to be paid by Developer pursuant to this Article. Taxes 4.4. Ad valorem taxes, assessments, and any other charges against the Property and/or improvements conveyed to City pursuant to this Article IV shall be prorated as of the Closing Date for the current year, such that Developer will be responsible for all such items which accrue prior to the Closing Date, and City will be responsible for all such items which accrue on and after the Closing Date. Taxes and assessments for all prior years shall be paid by Developer. Closing Costs. 4.5 (a) Developer will pay and be responsible for the following closing cost: (i) the cost of all tax certificates relating to all taxes and other assessments incurred or arising in relation to the Land; (ii) all fees and premiums for Basic Owner’s Title Policy, and any endorsements to the Basic Owner’s Title Policy; (iii) one-half (½) of the Title Company’s escrow fees; (iv) all recording fees; (v) all costs and expenses incurred by or on behalf of Developer, including Developer’ attorney’s fees; (vi)all costs related to obtaining any releases of liens on the portion of the Land conveyed relating to any loans secured by a deed of trust lien on said property; and (vii) such other incidental costs and fees customarily paid by sellers of real property in Harris County, Texas, for transactions of a similar nature to the transaction contemplated herein. (b) City hereby agrees to pay and be responsible for the following closing cost: (i) all fees and premiums for the Survey; (ii) one-half (½) of the Title Company’s escrow fees; (iii) all costs and expenses incurred by or on behalf of City, including City’s attorneys’ fees; and ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 6 (iv) such other incidental costs and fees customarily paid by purchasers of property in Harris County, Texas, for transactions of a similar nature to the transaction contemplated herein. Permitted Exceptions. 4.6.City acknowledges and agrees that the Property and improvements conveyed pursuant to this Article IV will be conveyed by Developer at closing subject only to such easements, conditions and restrictions as have been approved or deemed approved by City, including; (i) utility easements granted by subdivision plat or instrument subsequent to the purchase of the Property by Developer; and (ii) such other matters as City may waive. Conveyance As Is. 4.7City acknowledges and agrees that the Property and/or improvements conveyed pursuant to this Article IV will be conveyed “AS IS” with all faults and defects, whether patent or latent, existing as of the Closing. Except with respect to the quality of the title being conveyed by Developer as set forth in the Special Warranty Deed, City acknowledges and agrees that Developer will be making no representations, warranties, guarantees, statements or information, express or implied, pertaining to the Property or improvements conveyed, their condition, or any other matters whatsoever, made to or furnished to City by Developer or any employee or agent of Developer, except as specifically set forth in this Restriction Agreement. Article V Restrictions Use of Property; Buildings 5.1. No portion of the Property shallbe utilized for any use other than the Required Use. No building shall be constructed, reconstructed, erected, altered, or placed on any portion of the Property other than the Improvements or other structures that will be used in conformance with the Required Use. Term of Restrictions. 5.2 The restrictions set forth in Section 5.1, above, shall commence on the Effective Date and automatically terminate following the Completion of Construction of the Improvements. Article VI Miscellaneous Enforcement 6.1. City shall have the right, but not the obligation, to enforce this Restriction Agreement and any covenants and restrictions contained herein, as the same may be amended as herein provided. Subject to the limitation set forth in Section 5.1, above, enforcement of the provisions set forth in Section 5.1 contained herein may be exercised after failure of any person or persons violating or attempting to violate any covenants or restrictions to cure such violation or breach within two (2) thirty (30) day notice periods after receipt of written notice thereof, by proceeding at law or in equity, against any person or persons violating or attempting to violate any covenants or restrictions, to restrain violation or to recover damages, and failure to enforce any covenant, restriction or condition shall not be deemed a waiver of the right of enforcement either with respect to the violation in question or any other violation. This Restriction Agreement is not intended to restrict the rights of the City Council of the City of La Porte to exercise its legislative duties and powers insofar as the Land is concerned. For further remedy, ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 7 Developer, for itself, its successors, and assigns agrees that the City may withhold building permits, development approvals, certificates of occupancy and/or final inspection necessary for the lawful use of any portion of the Land not then in compliance with this Agreement. The City’s right to repurchase the Land pursuant to the exercise of the Option as set forth in Articles III and IV of this Restriction Agreement constitutes the City’s sole and exclusive remedy for any failure by Developer to Commence Construction or Complete Construction of the Improvements on the Land. The rights of City under this Restriction Agreement may not be waived or released except pursuant to an amendment or termination approved in accordance with the provisions hereof, except by expiration of the Term. Amendment 6.2. No amendment or any termination of this Restriction Agreement shall be effective unless and until approved by Developer and the City (as evidenced by a resolution of the City Council executed by the Mayor and recorded in the Official Public Records in the office of the Harris County Clerk); provided, however, the City may, without the consent of Developer, terminate and release the restrictions set forth in Section 5.1. In the event Developer, or subsequent owner of the Property desires to change, amend or alter the covenants, conditions or restrictions as set forth herein, Developer, or subsequent owner, as the case may be, shall file a written application for such change or amendment with City, which shall approve or deny such application in whole or in part within thirty (30) days after receipt of such application. Any change or amendment approved by the City shall not be effective unless and until an instrument executed by the Mayor is recorded in the Official Public Records in the office of the Harris County Clerk in accordance with this Section. Notices 6.3. All notices, requests, demandsor other communications required or permitted hereunder shall be in writing and shall be deemed to have been fully and completely made when given by hand, by confirmed facsimile transmission by overnight delivery by Federal Express or other reliable courier or the mailing of such by registered or certified mail, addressed as follows: If intended for City, to:With a copy to: City of La PorteAskins & Askins, P.C. Attn: City ManagerAttn: Clark T. Askins 604 W. Fairmont Parkway P.O. Box 1218 La Porte, Texas 77571La Porte, Texas 77572-1218 If intended for Developer: ___________________________ ___________________________ ___________________________ La Porte, Texas 77571 Any party may at any time and from time to time by notice in writing to the other party hereto change the name or address of the person to who notice is to be given as hereinbefore provided. Successors and Assigns. 6.4 This Restriction Agreement shall bind, and inure to the benefit of, the parties and their respective successors and assigns. ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 8 Governing Law 6.5. This Restriction Agreement is entered into and is intended to be performed in the State of Texas, and the validity, enforceability, interpretation and construction hereof shall be determined and governed by the laws (other than conflict of laws provisions) of the State of Texas. Venue for any action shall be in the state district court of Harris County, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. Recording 6.6. The parties agree that City may record this Restriction Agreement in the Official Public Records in the office of the Harris County Clerk. Covenants Run with the Property. 6.7This Restriction Agreement and the restrictions, covenants, and conditions set forth herein are for the purpose of protecting the value and desirability of the Property as well as to carry out compliance with Tex. Loc. Govt. Code §272.001(a)(4), as amended, and, consequently, shall run with the Property and be binding on the Developer and all parties having all right, title, or interest in the Land, in whole or in part, and their heirs, successors and assigns. These covenants, conditions and restrictions shall be for the benefit of the City of La Porte, Texas.This Restriction Agreement is binding upon Developer and each and every subsequent owner, tenant, subtenant, licensee, manager, and occupant of all or any portion of the Property, but only during the term of such party’s ownership, tenancy, license, management or occupancy of the Property, for which such party shall remain liable and shall be binding upon and inure to the benefit of the City and its successors and assigns. It is expressly understood and agreed that acceptance of title to all or a portion of the Property shall automatically, and without further acknowledgement or confirmation from the owner, constitute such owner’s assumption of the obligations of Developer hereunder. Severability 6.8. Invalidation of any one of these covenants, conditions, or restrictions by judgment or court order shall in no way affect any other provisions, and all other provisions shall remain in full force and effect. Entire Agreement. 6.9This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and no statement, promise, representation or modification hereof by any person, if any, and whether oral or written, shall be binding upon any party. Counterparts 6.10. This Agreement may be executed by the parties hereto in separate counterparts; each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all of the parties hereto. (signatures on following pages) ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 9 SIGNED AND AGREED on this ______ day of _______________________, 2012. City of La Porte, Texas, a Texas home rule municipality By: Steve Gillett, Interim City Manager Approved as to Form: By: City Attorney City’s Acknowledgment STATE OF TEXAS § § COUNTY OF HARRIS§ Acknowledged before me, the undersigned authority, this _________ day of __________________________, 2012, by Steve Gillett, Interim City Manager for theCity of La Porte, Texas, a Texas home rule municipality, on behalf of such municipality. Notary Public, State of Texas My Commission expires: ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 10 SIGNED AND AGREED on this _____ day of ___________________. 2012. K. Belle Interests, a Texas limited liability company By: Name:____________________________________ Title:_____________________________________ Developer’s Acknowledgment STATE OF TEXAS § § COUNTY OF HARRIS§ This instrument was acknowledged before me on the _______ day of 2012, _______________________,by _________________________, __________________ of _______________________, a Texas _______________________, on behalf of said ____________. Notary Public, State of Texas Printed Name:______________________________ My Commission expires: _______________________________ ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 11 PURCHASE AND SALE AGREEMENT Purchase and Sale Agreement This (“Agreement”) to buy and sell real property is entered between Seller and Buyeras identified below and is effective on the date set forth in Section 17(e) (“Effective Date”). Seller:La Porte DevelopmentCorporation, a Texas non-profit corporation Seller’s AddressAttn:Stacey Osborne 604 W Fairmont Parkway La Porte, Texas 77571 Phone: (281)470-5017 Fax: (281)842-1259 E-mail: osbornes@laportetx.gov Seller’s AttorneyKnox W. Askins Askins & Askins, P.C. P.O. Box 1218 La Porte, Texas 77572-1218 Phone: (281)471-1886 Fax: (281)___-_________ E-mail: ctaskins@swbell.net Purchaser:K. Belle Interests, LLC. Purchaser’s Attn:________________________________ Address____________________________________ La Porte, Texas 77571 Phone: (281)____-__________ Fax: (281)____-__________ E-mail: PSABLPDC URCHASE AND ALEGREEMENT ETWEEN AORTEEVELOPMENT ORPORATION K.BI,LLC–P1 AND ELLENTERESTSAGE Property: Tract 1: Lots 9, 20 and 21, in Block 52, of TOWN OF LA PORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 57, Page 320 of the Deed Records of Harris County, Texas, SAVE LESS AND EXCEPT that portion of the above said lots (if any) and the interest therein, deeded to or condemned by governmental entities for the widening of West Main Street or for right of way purposes, and further described in instrument recorded in Volume 4569, Page 499 of the Deed Records of Harris County, Texas. Tract 2: Being a 0.241 acre tract or parcel of land situated in the Johnson Hunter Survey, Abstract No. 35, Harris County, Texas, and being all of Lots 7, 8 and 9 in Block 52 of the Resubdivision of Blocks 37to 60 of the Town of La Porte, a subdivision according to the map or plat thereof recorded in Volume 67, Page 196 of the Deed Records of Harris County, Texas. City:City of La Porte, a Texas home rule municipality City’s Address:Attn: City Manager 604 W Fairmont Parkway La Porte, Texas 77571 Phone: (281)471-5020 Fax: (281)842-1259 E-mail: gilletts@laportetx.gov City’s Attorney:Knox W. Askins Askins & Askins, P.C. P.O. Box 1218 La Porte, Texas 77572-1218 Phone: (281)471-1886 Fax: (281) ____-___________ E-mail: ctaskins@swbell.net Title Company:AmericanTitle Company Attn: Staci Gay Commercial Division 5003 College Park Deer Park, Texas 77536 Phone: (281) 479-1913 Fax: (281).479-8609 E-Mail: PSABLPDC URCHASE AND ALEGREEMENT ETWEEN AORTEEVELOPMENT ORPORATION K.BI,LLC–P2 AND ELLENTERESTSAGE Inspection Period:The period commencing on the Effective Date and ending fifteen (15) days after the Effective Date Earnest Money:$10,000.00 Option Fee:$100.00(Paid to Seller at time of execution of this Agreement, non-refundable, and to be credited to Purchase Price at Closing) Closing Date:________(____) days after the end of the Inspection Period Purchase Price:$275,000cash. City Sales That certain Purchase and Sale Agreementdated and effectiveMay 14, 2012, by Contract: and between City and Sellerrelating to the sale by City of the Property to Seller. Restriction That certain Restriction Agreement by and between City and Purchaserset forth in AgreementExhibit “A,”attached hereto and incorporated herein by reference. NOW, THEREFORE, in consideration of the sum of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows: Sale and Purchase. 1.Seller agrees to sell, and Purchaser agrees to purchase the Property as provided in this Agreement for the Purchase Price. Title, Survey, and Environmental Reports. 2. (a)Not laterthan ten (10) days after the Effective Date, Seller shall, at Seller’s expense, deliver to Purchaser: (i)a current commitment for an Owner’s Policy of Title Insurance for the Property from the Title Company, setting forth the state of title to the Property together with any easements or restrictions (existing or created pursuant hereto) benefiting or burdening the Property, together with all exceptions or conditions to such title; (ii)legible copies of all documents referenced in the Title Commitment; (iii) any environmental or geotechnical studies or reports that Seller may have in its possession with respect to the Property; and (iv)tax certificate(s) regarding the payment of ad valorem taxes for current and prior years. (b) Purchaser shall, not later than twenty (20) days after the Effective Date, and at Purchaser’s expense, obtain a survey of the Property and deliver same to Seller. “Survey” means an on- the-ground, staked plat of survey and metes-and-bounds description of the Property, preparedby a Texas Registered Property Land Surveyor or another surveyor satisfactory to Title Company, dated after the Effective Date, and certified to comply with the current standards and specifications as published by the Texas Society of Professional Surveyors required for obtaining deletion of the survey exception in the Title Policy. In lieu of a new survey, Purchaser may provide a previously prepared survey accompanied PSABLPDC URCHASE AND ALEGREEMENT ETWEEN AORTEEVELOPMENT ORPORATION K.BI,LLC–P3 AND ELLENTERESTSAGE by an affidavit (e.g. Form T-47 modified for commercial transactions) reasonably acceptable to Title Company and Seller. (c)Purchaser shall, not later than five (5) days after Purchaser’s receipt of the last of the Survey and Title Commitment, notify Seller and Title Company of any objections to the Survey or Title Commitment. If there are objections by Purchaser, Seller shall in good faith attempt to satisfy them prior to Closing, but Seller shall not be required to incur any cost to do so. If Seller delivers written notice to Purchaser not later than the ten (10) calendar day after Seller’s receipt of Purchaser’s objections that Seller is unable to satisfy such objections, Purchaser may either waive such objections and accept title as Seller is able to convey or terminate this Agreement by written notice to Seller and the Title Company prior to the expiration of the Inspection Period. Inspection Period. 3. (a)During the Inspection Period, Purchaser and its agents or employees shall have the right to enter upon the Property during regular business hours upon reasonable notice and conduct such inspections, tests and studies as they may deem necessary. If for any reason Purchaser determines not to purchase the Property, Purchaser may terminate this Agreement by notifying Seller and Title Company in writing prior to the expiration ofthe Inspection Periodand neither party shall have any further claim against the other under this Agreement. If Purchaser does not timely terminate this Agreement under this Section 3, Purchasershall have no further right to do so under this Section 3; and Purchaser shall have waived its right to terminate this Agreement within the Inspection Period. (b) Purchaser may enter the Property to conduct its inspection, but shall be solely responsible . Purchaser shall repair anydamage to the Property it causes or that for any damages caused thereby is caused by its agents or invitees, and shall indemnify and defend Sellerand Cityand hold Seller and Cityharmless from and against any and all claims, liabilities or damages to the Property or against Seller caused by the intentional or negligent acts or omissions of Purchaser and/or Purchaser’s authorized agents, representatives or employees during the Inspection Period or as a result of any inspection of the Property by such parties. Closing Date. 4. The closing of the sale of the Property shall occur on the Closing Date at the Title Company, or at such other time as may be agreed in writing by the parties. Closing Deliverables. 5. (a)At the closing of the Property, Seller shall deliver to the Title Company: (i)a special warranty deed, in form and substance reasonably acceptable to Seller and Purchaser, conveying good and indefeasible title to Purchaser, free and clear of any and all encumbrances except the Permitted Exceptions, excluding the mineral rights, such mineral rights being reserved by Citypursuant to the CitySales Contractor by prior grantors; (ii)such documents as may be reasonably required by Title Company in order to cause Title Company to issue a Texas owner’s policy of title insurance(or equivalent) in the amount of the Purchase Price, insuring such title to Purchaser; (iii) possession of the Property, free of parties in possession. PSABLPDC URCHASE AND ALEGREEMENT ETWEEN AORTEEVELOPMENT ORPORATION K.BI,LLC–P4 AND ELLENTERESTSAGE (b) At the Closing, Purchaser shall deliver to Seller through the Title Company: (i) the Purchase Price; and (ii)the Restriction Agreement duly executed by Purchaser. With respect to the issuance of the title policy, Purchaseragrees to execute such documents as required by the Title Company to allow the cost of the Owner’s Title Policy and any related endorsements that are required to be issued pursuant to the City Sales Contractregarding the Property are passed through to the sale of the Property by Sellerto Purchaser, it being the intent of Purchaserand Seller that only one title policy by issued in favor of Purchaserfollowing the concurrent closing of this transaction and the transaction between Seller and City. Taxes. 6. Purchaser understands and acknowledges that the Property is presently exempt from the assessment of ad valorem taxes, which status will change upon conveyance of the Property to Purchaser. Seller shall not be responsible for payment of property taxes assessed against the Property for periods after the date of Closing, if any become due and payable. Closing Costs. 7. (a)Seller hereby agrees to pay and be responsible for the following closing cost with respect to the closing of the Property: (i) the cost of all tax certificates relating to all taxes and other assessments incurred or arising in relation to the Property; (ii) one-half (½) of the Title Company’s escrow fees; (iii)the basic premium for the Owner’s Policy of Title Insurance; (iv) all costs and expenses incurred by or on behalf of the Seller, including Seller’s attorney’s fees; and (v) such other incidental costs and fees customarily paid by sellers of real property in HarrisCounty, Texas, for transactions of a similar nature to the transaction contemplated herein. (b) Purchaser hereby agrees to pay and be responsible for the following closing cost with respect to the closing on the purchase of theProperty: (i) all fees and premiums for any endorsements to the Basic Owner’s Title Policy; (ii) all fees and costs for the Survey; (iii) one-half (½) of the Title Company’sescrow fees; (iv)fees for recording the Restriction Agreement and the Special Warranty Deed with the County Clerk of Harris County; PSABLPDC URCHASE AND ALEGREEMENT ETWEEN AORTEEVELOPMENT ORPORATION K.BI,LLC–P5 AND ELLENTERESTSAGE (v) all costs and expenses incurred by or on behalf of the Purchaser, including Purchaser’s attorneys’ fees; (vi) all premiums and fees for optional riders and amendments to the Basic Owner’s Title Policy and all costs related to issuance of any Mortgagee’s Title Policy; and (vii)such other incidental costs and fees customarily paid by purchasers of property in HarrisCounty, Texas, for transactions of a similar nature to the transaction contemplated herein. Conditions to Closing. 8. Closing on the sale of the Property shall be conditioned upon: (i)Purchaserhaving executed the Restriction Agreement; (ii)Seller closing on the purchase of the Property from City pursuant to the City Sales Contract; and (iii)The zoning of the Property being amended, if necessary,and a Site Plan for the Property, if necessary,such that Purchaser may develop and use the Property for the Required Use as defined in the Restriction Agreement. If the Property is not zoned for such use or a Site Plan is not approved as of the Effective Date, Seller agrees to obtain the consent of City to allow Purchaser the right to file anapplication with City to seek an amendment to the zoning regulations affecting the Property and/or adopt a Site Plan to allow the Property to be used for the Required Use. Purchaser understands and acknowledges that City has notwaivedits legislative authority or is otherwisecontractually obligated pursuant to the City Sales Contractto adopt any amendments to City’s Comprehensive Zoning Ordinance, as amended, or approve any particular Site Plan, Seller agrees to reasonably cooperate with Purchaser in the application for any zoning amendment or Site Plan approval requested by Purchaser and shall execute all necessary and appropriate instruments as owner of the Property. The application for rezoning the Property and/or approving a Site Plan shall be madein the name of either Seller or Purchaser as required under governing law; and (iv)The Property being replatted, if necessary, so that it constitutes one or more defined lots as determined in accordance with Seller’s subdivision ordinance. Seller agrees to reasonably cooperate and participate with Purchaser in the prosecution of any plat application for the replat of the Property so that the Property is identified as one or more separate and distinct lots as determined by Purchaser. If the conditions set forth in (ii), (iii), and/or (iv) have not been satisfied on or before ten (10) days prior to Closing, the Closing Date shall be extended for a period of thirty (30) days. If the conditions set forth in (iii), and/or (iv) have still not been approved by the end of said thirty.(30) day period, Purchaser may either (1) extend the Closing Date for an additional thirty (30) day period, (2) waive the condition and proceed to Closing, or (3) terminate this Agreement as Purchaser’s sole remedy.If the condition set forth in (ii) hasstill not been approved by the end of said thirty.(30) day period, Purchase shall only have the right to (1) extend the Closing Date for and additional (30) day period or (2) terminate this Agreement and receive a refundof the Earnest Money. Permitted Exceptions. 9. PSABLPDC URCHASE AND ALEGREEMENT ETWEEN AORTEEVELOPMENT ORPORATION K.BI,LLC–P6 AND ELLENTERESTSAGE (a)Purchaser acknowledges and agrees that the Property will be conveyed by Seller at closing subject to the Restriction Agreement and that the Special Warranty Deed shall contain reference to same. The (i) zoning, (ii) lien for current taxes, (iii) environmental condition, (iv) the Restriction Agreement, and (v) matters appearing on Schedule B of the Title Commitment that were not cured and to which Purchaser failed to object or otherwise waived objection shall be deemed to be Permitted Exceptions. (b) Purchaser understands, acknowledges, and agrees that all rights-of-ways and easements dedicated to City on behalf of the public and which appear on the final plat of the Property may be reservedprior toClosing by City for itself and its successors and assigns and the public, which reservations shall constitute Permitted Exceptions at Closing to the extent they affect the Property. Representations and Covenants. 10. Seller represents and covenants that: (a) it has authority to enter into this Agreement; and (b) no other person has any interests in or claims against the Property (other than as reflected by the Title Commitment), and it will not hereafter encumber the Property. Purchaser represents that it has authority to enter into this Agreement. The only representations made by any party concerning the Property and this Agreement are as set out in this Section 10. Property Sold As Is. 11. (a)Purchaser represents that as of the Closing Date that it: (i)will have fully inspected the Property; and (ii)will have made all investigations as it deems necessary or appropriate and will be relying solely upon its inspection and investigation of the Property for all purposes whatsoever, including, but not limited to, the determination of the condition of the structures, improvements, soils, subsurface, drainage, surface and groundwater quality, and all other physical characteristics; availability and adequacy of utilities; compliance with governmental laws and regulations; access; encroachments; acreage and other survey matters and the character and suitability of the Property. (b) Purchaserhereby acknowledges and agrees that the sale of the Property hereunderis and will be made on an “as is, where is and with all faults” basis. The occurrence of Closing shall constitute an acknowledgment by Purchaserthat the Property was accepted without representation or warranty, express or implied (except as otherwise specifically set forth herein and except for the special warranties of title set forth in the special warranty deed). (c) Except as otherwise specifically set forth in this Agreement and except for the special warranties of title set forth in the special warranty deed, Sellerhereby specifically negates and disclaims any representations, warranties or guaranties of any kind or character, whether express or implied, oral or written, past, present, future or otherwise, of, as to, concerning or with respect to the Property, including without limitation (i) the nature and condition of the Property and the suitability thereof for any and all activities and uses which Purchaser may elect to conduct thereon, (ii) the nature and extent of any right- of-way, lease, possession, lien, encumbrance, license, reservation, condition or any other matter relating in any way to the Property, (iii) the compliance of the Property or its operation with any laws, ordinances or regulations of any government or other authority or body, (iv) the existence of any toxic or hazardous substance or waste in, on, under the surface of or about the Property, (v) geological conditions, including, PSABLPDC URCHASE AND ALEGREEMENT ETWEEN AORTEEVELOPMENT ORPORATION K.BI,LLC–P7 AND ELLENTERESTSAGE without limitation, subsidence, subsurface conditions, water table, underground water reservoirs, limitations regarding the withdrawal of water and faulting, (vi) whether or not and to the extent to which the Property or any portion thereof is affected by any stream (surface or underground), body of water, flood prone area, floodplain, floodway or special flood hazard, (vii) drainage, (viii) zoning or land use restrictions rules and regulations to which the Property or any portion thereof may be subject, (ix) the availability of any utilities to the Property or any portion thereof including, without limitation, water, sewage, gas and electric and including the utility availability capacities allocated to the Property by the relevant governmental or regulatory authority, (x) usages of adjoining property, (xi) access to the Property or any portion thereof, (xii) the value, compliance with the plans and specifications, size, location, age, use, design, quality, description, durability, structural integrity, operation, leasing, title to, or physical or financial condition of the Property or any portion thereof,or any income, expenses, charges, liens, encumbrances, rights or claims on or affecting or pertaining to the Property or any part thereof, (xiii) the potential for further development of the Property, or (xiv) the merchantability of the Property or fitness of the Property for any particular purpose (Purchaseraffirming that Purchaserhas not relied on Seller’sskill or judgment to select or furnish the Property for any particular purpose, and that Sellermakes no warranty that the Property is fit for any particular purpose). The warranties, representations, agreements, indemnification and release set forth in this Paragraph 11 shall survive closing, and shall be incorporated into the deed. Reservation of Minerals; Waiver of Surface Rights. 12. Purchaser understands, acknowledges, and agrees that City, for itself and its successors and assigns, as their interests may appear, has reservedfrom its conveyance of the Property to Seller pursuant to the City Purchase Contractall oil, gas and other minerals owned by Citylocated in and under the Property and that may be produced from the Property to the extent not reserved by prior grantors; and that City, for itself and its successors and assigns has agreed(i) to waive all surface rights and other rights of ingress and egress in and to the Property, and (ii)that in conducting operations with respect to the exploration for and production, processing, transporting and marketing of oil, gas and other minerals from the Property, that no portion of the surface of the Property will be used, occupied or damaged and that fixtures, equipment, buildings or structures used in connection with the exploitation of the reserved mineral, oil and gas rights, shall not be placed on the surface of the Property. Purchaser further understands, acknowledges, and agrees that Cityshall not be restricted or prohibited from the pooling or unitization of the portion of the mineral estate owned by Citywith land other than the Property; or the exploration or production of the oil, gas, and other minerals by means of wells that are drilled or mines that open on land other than the Property but enter or bottom under the Property, provided that such operations will in no manner interfere withthe surface or subsurface support of any improvements constructed or to be constructed on the Property. The foregoing reservation of minerals and City’swaiver of surface rights set forth above shall survive closing and be included in substance in the special warranty deed. Remedies. 13. If Purchaser defaults, Seller’s sole remedy shall be to terminate this Agreement and receive payment of the Earnest Money as liquidated damages. If Seller defaults, Purchaser’s sole remedy shall be to terminate this Agreementand receive a refund of the Earnest Money. No termination shall occur pursuant to a default until the non-defaulting party has provided written notice of default not less than ten (10) days prior to the proposed date of termination and the defaulting party has failed to cure the default; provided, however, if all parties have fully performed and all conditions to Closing have been satisfied other than the signing of documents close on the sale of the Property and one party fails to perform such PSABLPDC URCHASE AND ALEGREEMENT ETWEEN AORTEEVELOPMENT ORPORATION K.BI,LLC–P8 AND ELLENTERESTSAGE necessary acts to deliver funds and execute documents required for Closing, on the date of Closing, then this Agreement shall terminate one (1) business day after demand is made to the non-performing party and the party continues to fail to close on the transaction. Notices. 14. Notices must be in writing and may be hand delivered and/or mailed by certified mail with return receipt requested tothe addresses stated above. Notice given by delivery service shall be effective upon receipt at the address ofthe addressee; notice given by mail shall be effective upon earlier of actual receipt or three (3) days after placing the noticein a receptacle of the United States Postal Service, postage prepaid and properly addressed. In addition, copies of notices shall be provided to the party’s attorney at the addresses indicated above. Term. 15. This Agreement shall be effective on the Effective Date and, except for the provisions of this Agreement that survive termination, shallterminate: (a) on the closingdate of the sale of theProperty to Purchaser; (b) on the date mutually agreed by the parties; or (c) the date the Agreement is terminated pursuant to Section 13, above. Sale Subject to Provisions of Tex. Loc. Govt. Code §272.001. 16. Purchaseracknowledges having been advised that pursuant to the City Purchase Contract, City has contracted with Seller as an independent foundation to sell the Property without requiring an auction or solicitation ofcompetitive bidssubject to City’s requirement that the Property be developed by Purchaser in accordance with the Restriction Agreement. Miscellaneous. 17. This Agreement is subject to the following additional provisions and conditions: (a)Entireties. This Agreement contains the entire agreement of the parties pertaining to the Property. (b) Modifications. This Agreement may only be modified by a written document signed by both parties. (c)Assignment. Purchaser may not assign its rights under this Agreement to any entity without the express written consent of Seller. (d) Time is of the Essence. Time is of the essence with respect to the performance by the parties of their respective obligations hereunder. (e)Effective Date. The Effective Date of this Agreement shall be the last date on which the authorized representatives of all parties have signed this Agreementand the payment of the Option Fee has been paid. PSABLPDC URCHASE AND ALEGREEMENT ETWEEN AORTEEVELOPMENT ORPORATION K.BI,LLC–P9 AND ELLENTERESTSAGE (f)Non-Business Day. If the final date of any period provided herein for the performance of an obligation or for the taking of any action falls on a Saturday, Sunday, federal holiday, or a day on which Seller’s main offices are not open for regular business, then the end of such period shall be extended to the next day that is not one of the foregoing described days. (g)Zoning. Seller assumes no obligation to change the current zoning on the Property. (h) Brokers.The parties represent and warrant they have not worked with any broker relative to this transaction and that no brokerage commission is due and payable upon the Closing. To the extent allowed by law, each party shall indemnify each other from any claim for brokers’ commissions relative to the sale of the property and alleged to be due. Purchaser does represent and disclose that certain of its officers and employees are licensed real estate agents or brokers in the State of Texas. (i)Counterparts.This Agreement may be executed in any number of counterparts, each of which shall be deemed an original for all purposes and constitute one and the same instrument; but in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. (j)Legal Construction. In the event any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect other provisions, and the Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained in it. (k)Law Governing. This Agreement shall be construed under and in accordance with the laws of the State of Texas; and venue for any action arising from this Agreement shall be in the State District Court of HarrisCounty, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. (l)Survival of Covenants. Any of the representations, warranties, covenants, and obligations of the parties, as well as any rights and benefits of the parties, pertaining to a period of time following the termination of this Agreement shall survive. (signatures on next page) PSABLPDC URCHASE AND ALEGREEMENT ETWEEN AORTEEVELOPMENT ORPORATION K.BI,LLC–P10 AND ELLENTERESTSAGE SIGNED AND AGREED this the _______ day of ___________, 2012. SELLER : La Porte Development Corporation, a Texas non-profit corporation By: ______________________________________ Richard Warren, President SIGNED AND AGREED this the ________ day of ___________, 2012. PURCHASER: K. Belle Interests, a Texas limited liability company By: _____________________________________ Name:_________________________________ Its:____________________________________ RECEIPT OF CONTRACT Title Company acknowledges receipt of a copy of this Agreement executed by both Sellerand Purchaser on the ___ day of _______________________, 2012. By:______________________________________ Name:___________________________________ Title:____________________________________ PSABLPDC URCHASE AND ALEGREEMENT ETWEEN AORTEEVELOPMENT ORPORATION K.BI,LLC–P11 AND ELLENTERESTSAGE EXHIBIT “A” Form of Restriction Agreement WHEN RECORDED RETURN TO: (Space Above For Recorder’s Use Only) NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER’S LICENSE NUMBER STATE OF TEXAS § § RESTRICTION AGREEMENT COUNTY OF HARIS § RESTRICTION AGREEMENT This (“Agreement”) is made and entered into as of the Effective Date by and between the City of La Porte, a Texas home-rule municipality (“City”), and K. Belle Interests(“Developer”), a Texas limited liability company, acting by and through their respective authorized officers. RECITALS WHEREAS, as of the Effective Date, pursuant to the Purchase Agreement, Developer has purchased the Property from the LPDC; and WHEREAS, prior to or concurrent with the sale of the Property to Developer, LPDC purchased the Property from City pursuant to that certain Purchase and Sale Agreement effective May 14, 2012, between City and LPDC (“the City Contract”) without City seeking sealed bids or conducting an auction prior to the sale of the Property to LPDC pursuant to the statutory exception to such requirements set forth in Texas Local Government Code §272.001(b)(4); and WHEREAS, as a condition of the sale of the Property to LPDC and pursuant to Texas Local Government Code §272.001(b)(4), the City Contract requires that LPDC have the Property redeveloped and used for the Required Use; and WHEREAS, LPDC has, as a condition of the conveyance of the Property to Developer, restricted the useof the Property and required Developer to develop the Property with the Improvements in accordance with the terms and conditions set forth herein; and WHEREAS, as a condition to and in consideration of the LPDC’s conveyance of the Property to Developer, Developer has agreed to develop the Property in accordance with this Restriction Agreement; and ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 1 WHEREAS, Developer desires to grant City an option to repurchase the Property in the event Developer fails to cause Commencement of Construction or Completion of Construction (hereinafter defined) of the Improvements in accordance this Restriction Agreement, subject to the terms and conditions hereafter set forth; NOW, THEREFORE, in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Developer hereby agree as follows: Article I Property Subject to Declaration The Property shall be owned, held, leased, transferred, sold, mortgaged and/or conveyed by Developer and any subsequent owners (as such term is hereinafter defined for the term specified in Section 5.2), subject to the terms of this Restriction Agreement. Article II Definitions For purposes of this Agreement, the following words and phrases shall have the following meanings unless the context clearly indicates a different meaning: “Developer” means K. Belle Interests, a Texas limited liability company. “City” shall mean the City of La Porte, a Texas a home rule municipality located in the County of Harris, State of Texas. “City Manager” shall mean the City Manager of City. “Commencement of Construction” shall mean (i) the plans have been prepared and all approvals thereof required by applicable governmental authorities have been obtained for construction of the Improvements, (ii) all necessary permits for the construction of the Improvements have been issued by the applicable governmental authorities and (iii) construction of the elements of the building elements of the Improvements has commenced. “Completion of Construction” shall mean (i) substantial completion of the Improvements on the Land has occurred, and (ii) a certificate of occupancy or final inspection has been issued by City for occupancy of the Improvements for the Required Use by Developer. “Effective Date” shall mean the date this Agreement is signed by all parties hereto. “LPDC” shall mean the La Porte Development Corporation, a Texas non-profit corporation. “Force Majeure” shall mean any contingency or cause beyond the reasonable control of a party including, without limitation, acts of God or the public enemy, war, riot, civil commotion, insurrection, by the order of a court resulting from any litigation brought by a third party to prevent or delay Developer’ development, construction, or operation, City delay of permits or ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 2 other approvals, government or de facto governmental action (unless caused by acts of omissions of the party), pending referendum, fires,explosions or floods, strikes, slowdowns or work stoppages. Such extension shall be for a period equal to the actual length of such delay, together with any time reasonably required by Developer to re-mobilize for construction as a result of such delay. “Improvements” shall mean the structures located on the Property, inclusive of any materials, equipment, and fixtures incorporated into said structures by Developer as necessary to be able to use obtain a certificate of occupancy from City to occupy and use the Property for the Required Use. “Property” shall mean Tract 1: Lots 9, 20 and 21, in Block 52, of TOWN OF LA PORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 57, Page 320 of the Deed Records of Harris County, Texas, SAVE LESS AND EXCEPT that portion of the above said lots (if any) and the interest therein, deeded to or condemned by governmental entities for the widening of West Main Street or for right of way purposes, and further described in instrument recorded in Volume 4569, Page 499 of the Deed Records of Harris County, Texas; and Tract 2: Being a 0.241 acre tract or parcel of land situated in the Johnson Hunter Survey, Abstract No. 35, Harris County, Texas, and being all of Lots 7, 8 and 9 in Block 52 of the Resubdivision of Blocks 37 to 60 of the Town of La Porte, a subdivision according to the map or plat thereof recorded in Volume 67, Page 196 of the Deed Records of Harris County, Texas. “Option Period” shall mean that period of time commencing on closing of the purchase of the Land by Developer and ending on the earlier of (a) Completion of Construction or (b) (72 months. “Option Price” shall mean the Purchase Price stated in the Purchase Agreement less all closing costs and expenses paid orincurred by LPDC pursuant to the Purchase and Sale Agreement and pursuant to the exercise of the Option. “Property” shall collectively mean the Property and any Improvements following construction thereof on the Property. “Purchase Agreement” shall mean that certain Purchase and Sale Agreement, as amended or assigned, by and between LPDC and Developer, effective May 15, 2012. “Required Use” shall mean the development and use of the Property for the purpose of operating a business enterprise that meets the City’s economic development goals and is a permitted use under the zoning regulations applicable to the Property. ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 3 Article III Option Grant of Option 3.1. In consideration of TEN AND NO/100 DOLLARS ($10.00), in hand paid by City to Developer and other good and valuable consideration, the receipt and sufficiency of which is acknowledged by Developer, Developer hereby grants to City during the Option Period an option to repurchase the Property (the “Option”). Time for Exercising Option 3.2. Subject to Section 3.3, below, the Option may be exercised by City in its sole discretion by providing written notice to Developer upon the occurrence of the following: (a)any time after24 months, if Developer has failed to cause Commencement of Construction of the Improvements to occur on the Property on or before that date, provided Commencement of Construction has in fact still not occurred on the date of the exercise of the Option; or (b)any time after60 months, but before the end of the Option Period, if Commencement of Construction has occurred, but Developer has failed to cause Completion of Construction by that date, provided Completion of Construction has in fact still not occurred on the date of the exercise of the Option. Force Majeure 3.3. In the event of Force Majeure, Developer shall have such additional time to cause Commencement of Construction or Completion of Construction, as the case may be, so long as Developer is diligently and faithfully pursuing the same. The termination of the Option Period shall be extended for the same number days that the performance of Developer with respect to Commencement of Construction or Completion of Construction is extended by Force Majeure. Sole Remedy. 3.4The City’s sole and exclusive remedy for violation of the obligation of Developer for the Commencement of Construction of Construction and Completion of Construction shall be the exercise of the Option. Article IV Terms of Sale Upon Exercise of Option Effect of Exercise of the Option. 4.1 Upon any timely exercise of the Option by City in accordance with the foregoing provisions, the conveyance of the Property to be conveyed to City shall be in accordance with the provisions in this Article IV. ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 4 Title, Survey, and Environmental Reports. 4.2. (a)Not later than the fifteenth (15th) business day after the exercise of the Option, Developer shall, at Developer’ expense, deliver to City: (i)a current commitment for an Owner’s Policy of Title Insurance from the Title Company for the portion of the Property to be conveyed to City, setting forth the state of title to the Property together with any easements or restrictions (existing or created pursuant hereto) benefiting or burdening the Property, together with all exceptions or conditions to such title; (ii)legible copies of all documents referenced in the Title Commitment; (iii)any environmental studies or reports that Developer may have in its possession with respect to the Property; and, (iv)tax certificate(s) regarding the payment of ad valorem taxes for current and prior years. (b)Upon any exercise of the Option, City shall have the right, at its sole option, to cause a boundary or “as-built” survey of the Property to be made by a certified land surveyor selected by it. Such survey shall be made at the sole cost and expense of City. (c)City shall, not later than twenty (20) days after City’s receipt of the last of the Survey and Title Commitment, notify Developer and Title Company of any objections to the Survey or Title Commitment. If there are objections by City, Developer shall in good faith attempt to satisfy them prior to Closing. If Developer delivers written notice to City not later th than the tenth (10) calendar day after Developer’ receipt of City’s objections that Developer is unable tosatisfy such objections, City may either waive such objections and accept title as Developer is able to convey or terminate the exercise of the Right by written notice to Developer and the Title Company. Closing. 4.3. (a)The closing of the sale of the Property identified in the notice exercising the Option shall occur not later than sixty (60) calendar days following the date of exercise of the Option unless otherwise extended by written agreement of Developer and City. (b) At the closing, Developer shall deliver to City: (i)a special warranty deed, in form and substance substantially similar to the form used to convey the Property to Developer pursuant to the Purchase Agreement, conveying good and indefeasible title to the Property described in the notice exercising the Option and/or the survey obtained by City (whichever is the most accurate description) to City, free and clear of any and all encumbrances except the Permitted Exceptions, save and except such oil, gas, and other minerals as may have been reserved by prior grantors; ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 5 (ii) an owner’s policy of title insurance (or equivalent) in the amount of the Purchase Price, insuring such title to City; and (iii) possession of the Property, free of parties in possession. (c)At closing, City shall pay incash or by certified or cashier’s check the Option Price described in Article II, less all Closing Costs and other costs and expenses to be paid by Developer pursuant to this Article. Taxes 4.4. Ad valorem taxes, assessments, and any other charges against the Property and/or improvements conveyed to City pursuant to this Article IV shall be prorated as of the Closing Date for the current year, such that Developer will be responsible for all such items which accrue prior to the Closing Date, and City will be responsible for all such items which accrue on and after the Closing Date. Taxes and assessments for all prior years shall be paid by Developer. Closing Costs. 4.5 (a) Developer will pay and be responsible for the following closing cost: (i) the cost of all tax certificates relating to all taxes and other assessments incurred or arising in relation to the Land; (ii) all fees and premiums for Basic Owner’s Title Policy, and any endorsements to the Basic Owner’s Title Policy; (iii) one-half (½) of the Title Company’s escrow fees; (iv) all recording fees; (v) all costs and expenses incurred by or on behalf of Developer, including Developer’ attorney’s fees; (vi)all costs related to obtaining any releases of liens on the portion of the Land conveyed relating to any loans secured by a deed of trust lien on said property; and (vii) such other incidental costs and fees customarily paid by sellers of real property in Harris County, Texas, for transactions of a similar nature to the transaction contemplated herein. (b) City hereby agrees to pay and be responsible for the following closing cost: (i) all fees and premiums for the Survey; (ii) one-half (½) of the Title Company’s escrow fees; (iii) all costs and expenses incurred by or on behalf of City, including City’s attorneys’ fees; and ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 6 (iv) such other incidental costs and fees customarily paid by purchasers of property in Harris County, Texas, for transactions of a similar nature to the transaction contemplated herein. Permitted Exceptions. 4.6.City acknowledges and agrees that the Property and improvements conveyed pursuant to this Article IV will be conveyed by Developer at closing subject only to such easements, conditions and restrictions as have been approved or deemed approved by City, including; (i) utility easements granted by subdivision plat or instrument subsequent to the purchase of the Property by Developer; and (ii) such other matters as City may waive. Conveyance As Is. 4.7City acknowledges and agrees that the Property and/or improvements conveyed pursuant to this Article IV will be conveyed “AS IS” with all faults and defects, whether patent or latent, existing as of the Closing. Except with respect to the quality of the title being conveyed by Developer as set forth in the Special Warranty Deed, City acknowledges and agrees that Developer will be making no representations, warranties, guarantees, statements or information, express or implied, pertaining to the Property or improvements conveyed, their condition, or any other matters whatsoever, made to or furnished to City by Developer or any employee or agent of Developer, except as specifically set forth in this Restriction Agreement. Article V Restrictions Use of Property; Buildings 5.1. No portion of the Property shallbe utilized for any use other than the Required Use. No building shall be constructed, reconstructed, erected, altered, or placed on any portion of the Property other than the Improvements or other structures that will be used in conformance with the Required Use. Term of Restrictions. 5.2 The restrictions set forth in Section 5.1, above, shall commence on the Effective Date and automatically terminate following the Completion of Construction of the Improvements. Article VI Miscellaneous Enforcement 6.1. City shall have the right, but not the obligation, to enforce this Restriction Agreement and any covenants and restrictions contained herein, as the same may be amended as herein provided. Subject to the limitation set forth in Section 5.1, above, enforcement of the provisions set forth in Section 5.1 contained herein may be exercised after failure of any person or persons violating or attempting to violate any covenants or restrictions to cure such violation or breach within two (2) thirty (30) day notice periods after receipt of written notice thereof, by proceeding at law or in equity, against any person or persons violating or attempting to violate any covenants or restrictions, to restrain violation or to recover damages, and failure to enforce any covenant, restriction or condition shall not be deemed a waiver of the right of enforcement either with respect to the violation in question or any other violation. This Restriction Agreement is not intended to restrict the rights of the City Council of the City of La Porte to exercise its legislative duties and powers insofar as the Land is concerned. For further remedy, ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 7 Developer, for itself, its successors, and assigns agrees that the City may withhold building permits, development approvals, certificates of occupancy and/or final inspection necessary for the lawful use of any portion of the Land not then in compliance with this Agreement. The City’s right to repurchase the Land pursuant to the exercise of the Option as set forth in Articles III and IV of this Restriction Agreement constitutes the City’s sole and exclusive remedy for any failure by Developer to Commence Construction or Complete Construction of the Improvements on the Land. The rights of City under this Restriction Agreement may not be waived or released except pursuant to an amendment or termination approved in accordance with the provisions hereof, except by expiration of the Term. Amendment 6.2. No amendment or any termination of this Restriction Agreement shall be effective unless and until approved by Developer and the City (as evidenced by a resolution of the City Council executed by the Mayor and recorded in the Official Public Records in the office of the Harris County Clerk); provided, however, the City may, without the consent of Developer, terminate and release the restrictions set forth in Section 5.1. In the event Developer, or subsequent owner of the Property desires to change, amend or alter the covenants, conditions or restrictions as set forth herein, Developer, or subsequent owner, as the case may be, shall file a written application for such change or amendment with City, which shall approve or deny such application in whole or in part within thirty (30) days after receipt of such application. Any change or amendment approved by the City shall not be effective unless and until an instrument executed by the Mayor is recorded in the Official Public Records in the office of the Harris County Clerk in accordance with this Section. Notices 6.3. All notices, requests, demandsor other communications required or permitted hereunder shall be in writing and shall be deemed to have been fully and completely made when given by hand, by confirmed facsimile transmission by overnight delivery by Federal Express or other reliable courier or the mailing of such by registered or certified mail, addressed as follows: If intended for City, to:With a copy to: City of La PorteAskins & Askins, P.C. Attn: City ManagerAttn: Clark T. Askins 604 W. Fairmont Parkway P.O. Box 1218 La Porte, Texas 77571La Porte, Texas 77572-1218 If intended for Developer: ___________________________ ___________________________ ___________________________ La Porte, Texas 77571 Any party may at any time and from time to time by notice in writing to the other party hereto change the name or address of the person to who notice is to be given as hereinbefore provided. Successors and Assigns. 6.4 This Restriction Agreement shall bind, and inure to the benefit of, the parties and their respective successors and assigns. ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 8 Governing Law 6.5. This Restriction Agreement is entered into and is intended to be performed in the State of Texas, and the validity, enforceability, interpretation and construction hereof shall be determined and governed by the laws (other than conflict of laws provisions) of the State of Texas. Venue for any action shall be in the state district court of Harris County, Texas. The parties agree to submit to the personal and subject matter jurisdiction of said court. Recording 6.6. The parties agree that City may record this Restriction Agreement in the Official Public Records in the office of the Harris County Clerk. Covenants Run with the Property. 6.7This Restriction Agreement and the restrictions, covenants, and conditions set forth herein are for the purpose of protecting the value and desirability of the Property as well as to carry out compliance with Tex. Loc. Govt. Code §272.001(a)(4), as amended, and, consequently, shall run with the Property and be binding on the Developer and all parties having all right, title, or interest in the Land, in whole or in part, and their heirs, successors and assigns. These covenants, conditions and restrictions shall be for the benefit of the City of La Porte, Texas.This Restriction Agreement is binding upon Developer and each and every subsequent owner, tenant, subtenant, licensee, manager, and occupant of all or any portion of the Property, but only during the term of such party’s ownership, tenancy, license, management or occupancy of the Property, for which such party shall remain liable and shall be binding upon and inure to the benefit of the City and its successors and assigns. It is expressly understood and agreed that acceptance of title to all or a portion of the Property shall automatically, and without further acknowledgement or confirmation from the owner, constitute such owner’s assumption of the obligations of Developer hereunder. Severability 6.8. Invalidation of any one of these covenants, conditions, or restrictions by judgment or court order shall in no way affect any other provisions, and all other provisions shall remain in full force and effect. Entire Agreement. 6.9This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof, and no statement, promise, representation or modification hereof by any person, if any, and whether oral or written, shall be binding upon any party. Counterparts 6.10. This Agreement may be executed by the parties hereto in separate counterparts; each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a number of copies hereof each signed by less than all, but together signed by all of the parties hereto. (signatures on following pages) ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 9 SIGNED AND AGREED on this ______ day of _______________________, 2012. City of La Porte, Texas, a Texas home rule municipality By: Steve Gillett, Interim City Manager Approved as to Form: By: City Attorney City’s Acknowledgment STATE OF TEXAS § § COUNTY OF HARRIS§ Acknowledged before me, the undersigned authority, this _________ day of __________________________, 2012, by Steve Gillett, Interim City Manager for theCity of La Porte, Texas, a Texas home rule municipality, on behalf of such municipality. Notary Public, State of Texas My Commission expires: ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 10 SIGNED AND AGREED on this _____ day of ___________________. 2012. K. Belle Interests, a Texas limited liability company By: Name:____________________________________ Title:_____________________________________ Developer’s Acknowledgment STATE OF TEXAS § § COUNTY OF HARRIS§ This instrument was acknowledged before me on the _______ day of 2012, _______________________,by _________________________, __________________ of _______________________, a Texas _______________________, on behalf of said ____________. Notary Public, State of Texas Printed Name:______________________________ My Commission expires: _______________________________ ATTACHMENT I TO 908PURCHASE AND SALE AGREEMENT: CITY OF LA PORTE TO LA PORTE DEVELOPMENTCORPORATION – PAGE 11 REQUEST FOR LA PORTE ECONOMIC DEVELOPMENT CORPORATION AGENDA ITEM Appropriation Agenda Date Requested:5/15/12 Source of Funds: Requested By:Stacey Osborne Account Number:15-9892-993-1100 Department:CMO Amount Budgeted:$200,000 Report:Resolution:Ordinance: Amount Requested:$17,845 Exhibits:A.Application YESNO Budgeted Item: B.Evaluation Summary SUMMARY & RECOMMENDATION In the 2008-09 budget year, the La Porte Economic Development Corporation agreed to fund an enhancement grant program for the Main Street Overlay District. The program offered matching grants of up to $25,000 for businesses in the Main Street District to improve building facades. The project was allotted $200,000. The goals of the project were to beautify Main Street, to enhance Main Street’s appeal to new businesses and visitors, and to add value to the City of La Porte. Kathleen Lemon, P.C., CPAhas submitted a grant application for her businesslocated at 601 West Main Street in La Porte. The Enhancement Grant Application Committee metin Januaryto discuss the application, and had some questions that needed clarification before approving. Ms. Lemon supplied the needed information in early April, and the Board agreedon April 30that the applicationshould be approved for an amount not to exceed $17,845. The actual award will be one-half of the amount Ms. Lemonspends on approved expenses for the project up to $17,845, and will be contingent upon the project being completed as indicated in this grant application. Attached is the application that Ms. Lemon submitted, with supporting documentation, as well as an evaluation summary. The committee recommends that the Board conditionally award a grant in an amount not to exceed $17,845, based on receipts and completion of work as indicated. Action Required by Economic Development Corporation: Consider approving a grant amount not to exceed $17,845 for Ms. Lemon, to be awarded at the completion of the project, conditional upon receipts and completion of work as indicated. Approved for La Porte Development Corporation Agenda Steve Gillett,Interim City ManagerDate REQUEST FOR LA PORTE ECONOMIC DEVELOPMENT CORPORATION AGENDA ITEM Appropriation Agenda Date Requested:5/15/12 Source of Funds: Requested By:Stacey Osborne Account Number: Department:CMO Amount Budgeted: Report:Resolution:Ordinance: Amount Requested: Exhibits:A.Location of Proposed Parking Budgeted Item:YES NO B.Foreclosure Details C.Layout D.Preliminary Cost Estimate SUMMARY & RECOMMENDATION The La Porte Development Corporation has the opportunity to help alleviate some of the parking difficulties on Main Street with the purchase of five adjoining lotslocated next to the old fire rd station on 3Street between A and Main Street. The EDC could acquire the property for its adjudged value of $23,900. According to preliminary estimates, a total of 44 parking spaces can be constructed for an estimated construction cost of $112,671.25. Attached isa map showing the location of the property, the details of the foreclosure, and a construction layout and estimate prepared by staff. Staff proposes that the EDC purchase the property in this fiscal year, and then budget for the construction of the parkinglot in FY 2012-13. The final budget will be approved by the Board in July or August. Action Required by Economic Development Corporation: 1.Consider approval of the purchase of the land located at 114 N. Third Street for future parking for Main Street business patrons. 2.Consider approval of the addition of a budget item in the 2012-13 FY budget for parking construction. Approved for La Porte Development Corporation Agenda Steve Gillett,Interim City ManagerDate PRELIMINARY COST ESTIMATE FOR PROPOSED PARKING LOT ALONG THIRD STREET, LOTS 24-28, BLOCK 40 CITY OF LA PORTE, TEXAS SECTION "A" - PAVING ITEMBIDUNIT NO.ITEM DESCRIPTIONUNITQUANTITYPRICEAMOUNT 1Mobilization for Entire Contract @_________________________________________________ _________________________________________________LS1.00$10,000.00$10,000.00 Per Lump Sum 26" Reinforced Concrete w/ #4 Rebar on 24" Centers @_________________________________________________ _________________________________________________SY1,650.00$32.00$52,800.00 Per Square Yard 3Manipulation of Lime Subgrade @_________________________________________________ _________________________________________________SF15,720.00$1.50$23,580.00 Per Square Foot 4Hydrated Lime & Lime Slurry @_________________________________________________ _________________________________________________TON40.00$150.00$6,000.00 Per Ton 5Striping @_________________________________________________ _________________________________________________LS1.00$1,500.00$1,500.00 Per Lump Sum 66" Dowel Curb @_________________________________________________ _________________________________________________LF365.00$3.00$1,095.00 Per Linear Foot 7Stormwater Pollution Prevention (BMP) @_________________________________________________ _________________________________________________LS1.00$2,000.00$2,000.00 Per Lump Sum 8Tie-In to Third Street @_________________________________________________ _________________________________________________LS1.00$1,000.00$1,000.00 Per Lump Sum SUBTOTAL SECTION "A" $97,975.00 Plus 15% Contingency $14,696.25 TOTAL PRELIMINARY ESTIMATE $112,671.25 This is an Unaudited Statement. City of La Porte La Porte Development Corporation (038) Fund Summary (Section 4B Sales Tax) Previous ReportFY 2011-12FY 2010-11 Unaudited Beginning Fund Balance 9/302,125,2242,125,2241,639,258 Plus Year to Date Revenues: 1/2 Cent Sales Tax609,096738,774637,532 Transfers-In-154,914- Interest Income1,3402,5192,852 Total Revenues610,436896,207640,385 Equals Total Resources2,735,6603,021,4312,279,643 Less Year to Date Expenditures: Payroll25,71829,59241,412 Supplies1,9061,9211,085 Services & Charges (Memberships, Training, Advertising, Legal, Utilities)50,30452,17655,883 Debt Service Transfer330,169385,197363,237 Capital Projects Transfers485,000565,833207,083 Total Expenditures893,0961,034,719668,701 Estimated Year to Date Fund Balance$1,842,563$1,986,712$1,610,942 *Debt Service Payments for Library, Bay Area Boulevard & Canada Road and Ballfields. **Capital Project Transfers are for the Lomax Rodeo Arena Improvements, Dog Park, Playground Renovations, Golf Course Bathrooms and the remaining 50% of the bulkhead funding.