Loading...
HomeMy WebLinkAboutExhibits 23-43GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING SE... Page I of 25 GOVERNMENT CODE TITLE 10. GENERAL GOVERNMENT SUBTITLE F. STATE AND LOCAL CONTRACTS AND FUND MANAGEMENT CHAPTER 2254. PROFESSIONAL AND CONSULTING SERVICES SUBCHAPTER A. PROFESSIONAL SERVICES Sec. 2254.001. SHORT TITLE. This subchapter may be cited as the Professional Services Procurement Act. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Sec. 2254.002. DEFINITIONS. In this subchapter: (1) "Governmental entity" means: (A) a state agency or department; (B) a district, authority, county, municipality, or other political subdivision of the state; (C) a local government corporation or another entity created by or acting on behalf of a political subdivision in the planning and design of a construction project; or (D) a publicly owned utility. (2) "Professional services" means services: (A) within the scope of the practice, as defined by state law, of: (i) accounting; (ii) architecture; (iii) landscape architecture; (iv) land surveying; (v) medicine; (vi) optometry; (vii) professional engineering; (viii) real estate appraising; or (ix) professional nursing; or (B) provided in connection with the professional employment or practice of a person who is licensed or registered as: 23-1 http://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING SE... Page 2 of 25 estate appraiser; or (i) a certified public accountant; (ii) an architect; (iii) a landscape architect; (iv) a land surveyor; (v) a physician, including a surgeon; (vi) an optometrist; (vii) a professional engineer; (viii) a state certified or state licensed real (ix) a registered nurse. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 244, Sec. 1, eff. Sept. 1, 1997; Acts 1999, 76th Leg., ch. 1542, Sec. 1, eff. Sept. 1, 1999; Acts 2001, 77th Leg., ch. 1409, Sec. 8, eff. Sept. 1, 2001. Sec. 2254.003. SELECTION OF PROVIDER; FEES. (a) A governmental entity may not select a provider of professional services or a group or association of providers or award a contract for the services on the basis of competitive bids submitted for the contract or for the services, but shall make the selection and award: (1) on the basis of demonstrated competence and qualifications to perform the services; and (2 ) for a fair and reasonable price. (b) The professional fees under the contract may not exceed any maximum provided by law. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by: Acts 2007, 80th Leg., R.S. , Ch. 1213, Sec. 14, eff. September 1, 2007. Sec. 2254.0031. INDEMNIFICATION. A state governmental entity may require a contractor selected under this subchapter to indemnify or hold harmless the state from claims and liabilities resulting from the negligent acts or omissions of the contractor or persons employed by the contractor. A state governmental entity may not require a 23-2 http://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING SE... Page 3 of 25 contractor to indemnify or hold harmless the state for claims or liabilities resulting from the negligent acts or omissions of the state governmental entity or its employees. Added by Acts 1999, 76th Leg., ch. 1499, Sec. 1.37, eff. . Sept. 1, 1999. Sec. 2254.004. CONTRACT FOR PROFESSIONAL SERVICES OF ARCHITECT, ENGINEER, OR SURVEYOR. (a) In procuring architectural, engineering, or land surveying services, a governmental entity shall: (1) first select the most highly qualified provider of those services on the basis of demonstrated competence and qualifications; and (2) then attempt to negotiate with that provider a contract at a fair and reasonable price. (b) If a satisfactory contract cannot be negotiated with the most highly qualified provider of architectural, engineering, or land surveying services, the entity shall: (1) formally end negotiations with that provider; (2 ) select the next most highly qualified provider; and (3) attempt to negotiate a contract with that provider at a fair and reasonable price. (c) The entity shall continue the process described in Subsection (b) to select and negotiate with providers until a contract is entered into. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. . Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 119, Sec. 1, eff. . Sept. 1, 1997. Sec. 2254.005. VOID CONTRACT. A contract entered into or an arrangement made in violation of this subchapter is void as against public policy. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993'. Sec. 2254.006. CONTRACT NOTIFICATION. A state agency, including an institution of higher education as defined by Section 23-3 http://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING SE... Page 4 of 25 61.003, Education Code, shall provide written notice to the Legislative Budget Board of a contract for professional services, other than a contract for physician or optometric services, if the amount of the contract, including an amendment, modification, renewal, or extension of the contract, exceeds $14,000. The notice must be on a form prescribed by the Legislative Budget Board and filed not later than the 10th day after the date the agency enters into the contract. Added by Acts 1999, 76th Leg., ch. 281, Sec. 13, eff. . Sept. 1, 1999. Sec. 2254.007. DECLARATORY OR INJUNCTIVE RELIEF. (a) This subchapter may be enforced through an action for declaratory or injunctive relief filed not later than the 10th day after the date a contract is awarded. (b) This section does not apply to the enforcement of a contract entered into by a state agency as that term is defined by Section 2151.002. In this subsection, "state agency" includes the Texas Building and Procurement Commission. Added by Acts 2007, 80th Leg. , R. S. , Ch. 1213, Sec. 13, eff . September 1, 2007. SUBCHAPTER B. CONSULTING SERVICES Sec. 2254.021. DEFINITIONS. In this subchapter: (1) "Consulting service" means the service of studying or advising a state agency under a contract that does not involve the traditional relationship of employer and employee. (2) "Major consulting services contract" means a consulting services contract for which it is reasonably foreseeable that the value of the contract will exceed $15,000, or $25,000 for an institution of higher education other than a public junior college. (3) "Consultant" means a person that provides or proposes to provide a consulting service. The term includes a political subdivision but does not include the federal government, a state agency, or a state governmental entity. am h-ftp://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING SE... Page 5 of 25 (4) "Political subdivision" means: (A) a county; (B) an incorporated or unincorporated municipality; (C) a public junior college; (D) a public school district or other educational or rehabilitative district; (E) a metropolitan or regional transit authority; (F) an airport authority; (G) a river authority or compact; (H) a regional planning commission, a council of governments, or a similar regional planning agency created under Chapter 391, Local Government Code; (I) the Edwards Aquifer Authority or a district governed by Title 4, Water Code; (J) a soil and water conservation district; (K) a county or municipal improvement district; (L) a county road or road utility district; (M) a county housing authority; (N) an emergency services or communications district; (0) a fire prevention district; (P) a public health or hospital authority or district; (Q) a mosquito control district; (R) a special waste district; (S) a rural rail transportation district; or (T) any other local government or special district of this state. (5) "State agency" has the meaning assigned by Section 2151.002. (6) "State governmental entity" means a state department, commission, board, office, institution, facility, or other agency the jurisdiction of which is not limited to a geographical portion of the state. The term includes a university system and aninstitutionof higher education, other than a public junior college, as defined by Section 61.003, Education Code. The term does not include a political subdivision. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. 23-5 hftp://www.statutes.legis.state.tx.us/docs/GV/htrn/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING SE... Page 6 of 25 Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.44 (a) , eff. Sept. 1, 1995; Acts 1997, 75th Leg., ch. 165, Sec. 17.19 (11) , eff. Sept. 1, 1997; Acts 1997, 75th Leg., ch. 1035, Sec. 3, eff. June 19, 1997; Acts 2003, 78th Leg., ch. 1266, Sec. 1.02, eff. June 20, 2003. Sec. 2254.022. INTERPRETATION OF SUBCHAPTER. (a) This subchapter shall be interpreted to ensure: (1) the greatest and fairest competition in the selection by state agencies of consultants; and (2) the giving of notice to all potential consultants of the need for and opportunity to provide consulting services. (b) This subchapter does not: (1) discourage state agencies from using consultants if the agencies reasonably foresee that the use of consultants will produce a more efficient and less costly operation or project; (2) prohibit the making of a sole -source contract for consulting services if a proposal is not received from a competent, knowledgeable, and qualified consultant at a reasonable fee, after F compliance with this subchapter; or (3) require or prohibit the use of competitive bidding procedures to purchase consulting services. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1035, Sec. 4, eff. June 19, 1997. Sec. 2254.023. APPLICABILITY OF SUBCHAPTER. This subchapter applies to consulting services that a state agency acquires with money: (1) appropriated by the legislature; (2) derived from the exercise of the statutory duties of a state agency; or ( 3 ) received from the federal government, unless a federal law or regulation conflicts with the application of this subchapter. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. 23-6 http://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING SE... Page 7 of 25 Sec. 2254.024. EXEMPTIONS. (a) This subchapter does not apply to or discourage the use of consulting services provided by: (1) practitioners of professional services described in Subchapter A; ( 2 ) private legal counsel; (3) investment counselors; (4 ) actuaries; (5) medical or dental services providers; or (6) other consultants whose services are determined by the governing board of a retirement system trust fund to be necessary for the governing board to perform its constitutional fiduciary duties, except that the governing board shall comply with Section 2254.030. (b) If the governor and comptroller consider it more advantageous to the state to procure a particular consulting service under the procedures of Chapters 2155-2158, instead of under this subchapter, they may make a memorandum of understanding to that effect and each adopt the memorandum by rule. Procurement of a consulting service described in a memorandum of understanding under this subsection is subject only to Chapters 2155-2158. (c) The comptroller by rule may define circumstances in which a state agency may procure, without complying with this subchapter, certain consulting services that will cost less than a minimum amount established by the comptroller. The comptroller must determine that noncompliance in those circumstances is more cost-effective for the state. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. . Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 165, Sec. 17.19 (1) , eff. . Sept. 1, 1997 . Amended by: Acts 2007, 80th Leg., R. S . , Ch. Sec. 3.14, eff. . September 1, 2007. Sec. 2254.025. EMERGENCY WAIVER. (a) The governor, after receipt of a request complying with this section, may grant a limited waiver of the provisions of this subchapter for a state agency that requires consulting services before compliance with this subchapter 23-7 h-ap://www.statutes.legis.state.tx.us/does/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING SE... Page 8 of 25 can be completed because of an unforeseen emergency. (b) A state agency's request for a waiver must include information required by the governor, including: (1) information about the nature of the emergency; (2) the reason that the state agency did not foresee the emergency; (3) the name of the consultant with whom the agency intends to contract; and (4) the amount of the intended contract. (c) As soon as possible after the governor grants a limited waiver, a state agency shall comply with this subchapter to the extent that the requirements of this subchapter are not superfluous or ineffective because of the waiver. The agency shall include with information filed with the secretary of state for publication in the Texas Register a detailed description of the emergency on which the request for waiver was predicated. (d) The governor shall adopt rules to administer this section. (e) In this section, "unforeseen emergency" means a situation that suddenly and unexpectedly causes a state agency to need the services of a consultant. The term includes the issuance of a court order, an actual or imminent natural disaster, and new state or federal legislation. An emergency is not unforeseen if a state agency was negligent in foreseeing the occurrence of the emergency. (f) This section applies to all consulting services contracts and renewals, amendments, and extensions of consulting services contracts. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1035, Sec. 5, eff. June 19, 1997. Sec. 2254.026. CONTRACT WITH CONSULTANT. A state agency may contract with a consultant only if: (1) there is a substantial need for the consulting services; and (2) the agency cannot adequately perform the services with its own personnel or obtain the consulting services through a 23-8 http://www.statutes.legis.state.tx.us/does/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING SE... Page 9 of 25 contract with a state governmental entity. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1035, Sec. 6, eff. June 19, 1997. Sec. 2254.027. SELECTION OF CONSULTANT. In selecting a consultant, a state agency shall: (1) base its choice on demonstrated competence, knowledge, and qualifications and on the reasonableness of the proposed fee for the services; and (2) if other considerations are equal, give preference to a consultant whose principal place of business is in the state or who will manage the consulting contract wholly from an office in the state. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1035, Sec. 7, eff. June 19, 1997. Sec. 2254.028. NOTICE OF INTENT: MAJOR CONSULTING SERVICES CONTRACT. (a) Before entering into a major consulting services contract, a state agency shall: (1) notify the Legislative Budget Board and the governor's Budget and Planning Office that the agency intends to contract with a consultant; (2) give information to the Legislative Budget Board and the governor's Budget and Planning Office to demonstrate that the agency has complied or will comply with Sections 2254.026 and 2254.027; and (3) obtain a finding o * f fact from the governor's Budget and Planning Office that the consulting services are necessary. (b) A major consulting services contract that a state agency enters into without first obtaining the finding required by Subsection (a) (3) is void. (c) Subsection (a)(3) does not apply to a major consulting services contract to be entered into by an institution of higher 23-9 hftp://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 10 of 25 education other than a public junior college if the institution includes in the invitation published under Section 2254.029 a finding by the chief executive officer of the institution that the consulting services are necessary and an explanation of that finding. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1035, Sec. 8, eff. June 19, 1997; Acts 2003, 78th Leg., ch. 1266, Sec. 1.03, eff. June 20, 2003. Sec. 2254.029. PUBLICATION IN TEXAS REGISTER BEFORE ENTERING INTO MAJOR CONSULTING SERVICES CONTRACT. (a) Not later than the 30th day before the date it enters into a major consulting services contract, a state agency shall file with the secretary of state for publication in the Texas Register: (1) an invitation for consultants to provide offers of consulting services; (2) the name of the individual who should be contacted by a consultant that intends to make an offer; (3) the closing date for the receipt of offers; and (4) the procedure by which the state agency will award the contract. (b) If the consulting services sought by a state agency relate to services previously provided by a consultant, the agency shall disclose that fact in the invitation required by Subsection (a). If the state agency intends to award the contract for the consulting services to a consultant that previously provided the services, unless a better offer is received, the agency shall disclose its intention in the invitation required by Subsection (a). Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1035, Sec. 9, eff June 19, 1997. Sec. 2254.030. PUBLICATION IN TEXAS REGISTER AFTER ENTERING INTO MAJOR CONSULTING SERVICES CONTRACT. Not later than the 20th day after the date of entering into a major consulting services contract, the contracting state agency shall file with the secretary of state 23-10 h-ftp://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 11 of 25 for publication in the Texas Register: (1) a description of the activities that the consultant will conduct; (2) the name and business address of the consultant; (3) the total value and the beginning and ending dates of the contract; and (4) the dates on which documents, films, recordings, or reports that the consultant is required to present to the agency are due. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1035, Sec. 10, eff. June 19, 1997; Acts 1999, 76th Leg., ch. 1467, Sec. 1.30, eff. Sept. 1, 1999. Sec. 2254.0301. CONTRACT NOTIFICATION. A state agency shall provide written notice to the Legislative Budget Board of a contract for consulting services if the amount of the contract, including an amendment, modification, renewal, or extension of the contract, exceeds $14,000. The notice must be on a form prescribed by the Legislative Budget Board and filed not later than the 10th day after the date the entity enters into the contract. Added by Acts 1999, 76th Leg., ch. 281, Sec. 14, eff. Sept. 1, 1999. Sec. 2254.031. RENEWAL; AMENDMENT; EXTENSION. (a) A state agency that intends to renew a major consulting services contract shall: (1) file with the secretary of state for publication in the Texas Register the information required by Section 2254.030 not later than the 20th day after the date the contract is renewed if the renewal contract is not a major consulting services contract; or (2) comply with Sections 2254.028 and 2254.029 if the renewal contract is a major consulting services contract. (b) A state agency that intends to renew a contract that is not a major consulting services contract shall comply with Sections 2254.028 and 2254.029 if the original contract and the renewal contract have a reasonably foreseeable value totaling more than 23-11 h-ftp://www.statutes.legis.state.tx.us/does/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 12 of 25 $15,000, or $25,000 for an institution of higher education other than a public junior college. (c) A state agency that intends to amend or extend a major consulting services contract shall: (1) not later than the 20th day after the date the contract is amended or extended, file the information required by Section 2254.030 with the secretary of state for publication in the Texas Register if the contract after the amendment or extension is not a major consulting services contract; or (2) comply with Sections 2254.028 and 2254.029 if the contract after the amendment or extension is a major consulting services contract. (d) A state agency that intends to amend or extend a contract that is not a major consulting services contract shall comply with Sections 2254.028 and 2254.029 if the original contract and the amendment or extension have a reasonably foreseeable value totaling more than $15,000, or $25,000 for an institution of higher education other than a public junior college. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1035, Sec. 11, eff. June 19, 1997; Acts 1999, 76th Leg., ch. 1467, Sec. 1.31, eff. Sept. 1, 1999; Acts 2003, 78th Leg., ch. 1266, Sec. 1.04, eff. June 20, 2003. Sec. 2254.032. CONFLICTS OF INTEREST. (a) An officer or employee of a state agency shall report to the chief executive of the agency, not later than the 10th day after the date on which a private consultant submits an offer to provide consulting services to the agency, any financial interest that: (1) the officer or employee has in the private consultant who submitted the offer; or (2) an individual who is related to the officer or employee within the second degree by consanguinity or affinity, as determined under Chapter 573, has in the private consultant who submitted the offer. (b) This section applies to all consulting services contracts and renewals, amendments, and extensions of consulting services 23-12 http://www.statutes.legis.state.tx.us/does/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 13 of 25 contracts. Added by Acts 1993, 73rd Leg. , ch. 268, Sec. 1, ef. f . Sept. 1, 1993. Sec. 2254.033. RESTRICTION ON FORMER EMPLOYEES OF A STATE AGENCY. (a) An individual who offers to provide consulting services to a state agency and who has been employed by that agency or by another agency at any time during the two years preceding the making of the offer shall disclose in the offer: (1) the nature of the previous employment with the agency or the other agency; (2) the date the employment was terminated; and (3) the annual rate of compensation for the employment at the time of its termination. (b) A state agency that accepts an offer from an individual described in Subsection (a) shall include in the information filed under Section 2254.030 a statement about the individual's previous employment and the nature of the employment. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Sec. 2254.034. CONTRACT VOID. (a) A contract entered into in violation of Sections 2254.029 through 2254.031 is void. (b) A contract entered into with a private consultant who did not comply with Section 2254.033 is void. (c) If a contract is void under this section: (1) the comptroller may not draw a warrant or transmit money to satisfy an obligation under the contract; and (2) a state agency may not make any payment under the contract with state or federal money or money held in or outside the state treasury. (d) This section applies to all consulting services contracts, including renewals, amendments, and extensions of consulting services contracts. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. 1467, Sec. 1.32, eff. June 19, 23-13 hftp://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 14 of 25 1999. Sec. 2254.035. DIVIDING CONTRACTS. (a) A state agency may not divide a consulting services contract into more than one contract to avoid the requirements of this subchapter. (b) This section applies to all consulting services contracts, including renewals, amendments, and extensions of consulting services contracts. Added by Acts 1993, 73rd Leg., ch. 2-68, Sec. 1, eff. Sept. 1, 1993. Sec. 2254.036. ARCHIVES. (a) On request, a state agency shall, after the agency's contract with a consultant has ended, supply the Legislative Budget Board and the governor's Budget and Planning Office with copies of all documents, films, recordings, or reports compiled by the consultant under the contract. (b) Copies of all documents, films, recordings, or reports compiled by the consultant shall be filed with the Texas State Library and shall be retained by the library for at least five years. (c) The Texas State Library shall list each document, film, recording, and report given to it under Subsection (b) and shall file the list at the end of each calendar quarter with the secretary of state for publication in the Texas Register. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1997, 75th Leg., ch. 1035, Sec. 12, eff. June 19, 1997. Sec. 2254.037. REPORTS. As part of the biennial budgetary hearing process conducted by the Legislative Budget Board and the governor's Budget and Planning Office, a state agency shall report to the Legislative Budget Board and the governor's Budget and.Planning Office on any actions taken in response to the recommendations of any consultant with whom the state agency contracts during the previous biennium. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. 23-14 h-ap://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 15 of 25 Amended by Acts 1997, 75th Leg., ch. 1035, Sec. 13, eff. June 19, 1997. Sec. 2254.038. MIXED CONTRACTS. This subchapter applies to a contract that involves both consulting and other services if the primary objective of the contract is the acquisition of consulting services. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Sec. 2254.039. COMPTROLLER'S RULES. (a) The comptroller shall adopt rules to implement and administer this subchapter. The comptroller's rules may not conflict with or cover a matter on which this subchapter authorizes the governor to adopt rules. (b) The comptroller shall give proposed rules to the governor for review and comment before adopting the rules. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by: Acts 2007, 80th Leg., R. S . , Ch. 937, Sec. 3.15, eff. Septemb,er 1, 2007. Sec. 2254.040. PROCUREMENT BY COMPTROLLER. (a) The comptroller may, on request of a state agency, procure for the agency consulting services that are covered by this subchapter. (b) The comptroller may require reimbursement for the costs it incurs in procuring the services. Added by Acts 1993, 73rd Leg., ch. 268, Sec. 1, eff. Sept. 1, 1993. Amended by Acts 1999, 76th Leg., ch. 426, Sec. 16, eff. June 18, 1999. Amended by: Acts 2007, 80th Leg., R. S . , Ch. 937, Sec. 1.75, eff. September 1, 2007. SUBCHAPTER C. CONTINGENT FEE CONTRACT FOR LEGAL SERVICES 23-15 http://www.statutes.legis.state.tx.us/docs/GV/htm/GV2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 16 of 25 Sec. 2254.101. DEFINITIONS. In this subchapter: (1) "Contingent fee" means that part of a fee for legal services, under a contingent fee contract, the amount or payment of which is contingent on the outcome of the matter for which the services were obtained. (2) "Contingent fee contract" means a contract for legal services under which the amount or the payment of the fee for the services is contingent in whole or in part on the outcome of the matter for which the services were obtained. - (3) "State governmental entity": (A) means the state or a board, commission, department, office, or other agency in the executive branch of state government created under the constitution or a statute of the state, including an institution of higher education as defined by Section 61.003, Education Code; (B) includes the state when a state officer is bringing a parens patriae proceeding in the name of the state; and (C) does not include a state agency or state officer acting as a receiver, special deputy receiver, liquidator, or liquidating agent in connection with the administration of the assets of an insolvent entity under Article 21.28, Insurance Code, or Chapter 36, 66, 96, or 126, Finance Code. Added by Acts 1999, 76th Leg., ch. 1499, Sec. 3.03, eff. Sept. 1, 1999. Sec. 2254.102. APPLICABILITY. (a) This subchapter applies only to a contingent fee contract for legal services entered into by a state governmental entity. (b) The legislature by this subchapter is providing, in accordance with Section 44, Article III, Texas Constitution, for the manner in which and the situations under which a state governmental entity may compensate a public contractor under a contingent fee contract for legal services. (c) This subchapter does not apply to a contract: (1) with a state agency to collect an obligation under Section 2107.003(b), (c), or (c-1); or 23-16 http://www.statutes.legis.state.tx.us/does/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 17 of 25 (2) for legal services entered into by an institution of higher education under Section 153.006, Education Code. (d) This subchapter does not apply to a contract for legal services entered into by the Teacher Retirement System of Texas if the services are paid for from money that is not appropriated from the general revenue fund, including funds of a trust administered by the retirement system. Added by Acts 1999, 76th Leg., ch. 1499, Sec. 3.03, eff. Sept. 1, 1999. Amended by Acts 2003, 78th Leg., ch. 1266, Sec. 1.13, eff. June 20, 2003. Amended by: Acts 2005, 79th Leg., Ch. 1.359, Sec. 31, eff. September 1, 2005. Acts 2007, 80th Leg., R.S. , Ch. 1386, Sec. 3, eff. September 1, 2007. Sec. 2254.103. CONTRACT APPROVAL; SIGNATURE. (a) A state governmental entity that has authority to enter into a contract for legal services in its own name may enter into a contingent fee contract for legal services only if: (1) the governing body of the state governmental entity approves the contract and the approved contract is signed by the presiding officer of the governing body; or (2) for an entity that is not governed by a multimember governing body, the elected or appointed officer who governs the entity approves and signs the contract. (b) The attorney general may enter into a contingent fee contract for legal services in the name of the state in relation to a matter that has been referred to the attorney general under law by another state governmental entity only if the other state governmental entity approves and signs the contract in accordance with Subsection ( a) . . (c) A state governmental entity, including the state, may enter into a contingent fee contract for legal services that is not described by Subsection ( a ) or (b) only if the governor approves and signs the contract. (d) Before approving the contract, the governing body, elected 23-17 http://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 18 of 25 or appointed officer, or governor, as appropriate, must find that: (1) there is a substantial need for the legal services; (2 ) the legal services cannot be adequately performed by the attorneys and supporting personnel of the state governmental entity or by the attorneys and supporting personnel of another state governmental entity; and (3) the legal services cannot reasonably be obtained from attorneys in private practice under a contract providing only for the payment of hourly fees, without regard to the outcome of the matter, because of the nature of the matter for which the services will be obtained or because the state governmental entity does not have appropriated funds available to pay the estimated amounts required under a contract providing only for the payment of hourly fees. (e) Before entering into a contingent fee contract for legal services in which the estimated amount that may be recovered exceeds $100,000, a state governmental entity that proposes to enter into the contract in its own name or in the name of the state must also notify the Legislative Budget Board that the entity proposes to enter into the contract, send the board copies of the proposed contract, and send the board information demonstrating that the conditions required by Subsection (d) (3 ) exist. If the state governmental entity finds under Subsection (d)(3) that the state governmental entity does not have appropriated funds available to pay the estimated amounts required under a contract for the legal services providing only for the payment of hourly fees, the state governmental entity may not enter into the proposed contract in its own name or in the name of the state unless the Legislative Budget Board finds that the state governmental entity's finding with regard to available appropriated funds is correct. (f) A contingent fee contract for legal services that is subject to Subsection ( e ) and requires a finding by the Legislative Budget Board is void unless the board has made the finding required by Subsection ( e) . Added by Acts 1999, 76th Leg., ch. 1499, Sec. 3.03, eff. . Sept. 1, 1999. 23-18 http://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 19 of 25 Sec. 2254.104. TIME AND EXPENSE RECORDS REQUIRED; FINAL STATEMENT. (a) The contract must require that the contracting attorney or law firm keep current and complete written time and expense records that describe in detail the time and money spent each day in performing the contract. (b) The contracting attorney or law firm shall permit the governing body or governing officer of the state governmental entity, the attorney general, and the state auditor each to inspect or obtain copies of the time and expense records at any time on request. (c) On conclusion of the matter for which legal services were obtained, the contracting attorney or law firm shall provide the contracting state governmental entity with a complete written statement that describes the outcome of the matter, states the amount of any recovery, shows the contracting attorney's or law firm's computation of the amount of the contingent fee, and contains the final complete time and expense records required by Subsection (a). The complete written statement required by this subsection is public information under Chapter 552 and may not be withheld from a requestor under that chapter under Section 552.103 or any other exception from required disclosure. (d) This subsection does not apply to the complete written statement required by Subsection (c). All time and expense records required under this section are public information subject to required public disclosure under Chapter 552. Information in the records may be withheld from a member of the public under Section 552.103 only if, in addition to meeting the requirements of Section 552.103, the chief legal officer or employee of the state governmental entity determines that withholding the information is necessary to protect the entity's strategy or position in pending or reasonably anticipated litigation. Information withheld from public disclosure under this subsection shall be segregated from information that is subject to required public disclosure. Added by Acts 1999, 76th Leg., ch. 1499, Sec. 3.03, eff. Sept. 1, 1999. Sec. 2254.105. CERTAIN GENERAL CONTRACT REQUIREMENTS. The 23-19 hftp://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 20 of 25 contract must: (1) provide for the method by which the contingent fee is computed; (2 ) state the differences, if any, in the method by which the contingent fee is computed if the matter is settled, tried, or tried and appealed; (3) state how litigation and other expenses will be paid and, if reimbursement of any expense is contingent on the outcome of the matter or reimbursable from the amount recovered in the matter, state whether the amount recovered for purposes of the contingent fee computation is considered to be the amount obtained before or after expenses are deducted; (4) state that any subcontracted legal or support services performed by a person who is not a contracting attorney or a partner, shareholder, or employee of a contracting attorney or law firm is an expense subject to reimbursement only in accordance with this subchapter; and (5 ) state that the amount of the contingent fee and reimbursement of expenses under the contract will be paid and limited in accordance with this subchapter. Added by Acts 1999, 76th Leg., ch. 1499, Sec. 3.03, eff. . Sept. 1, 1999. Sec. 2254.106. CONTRACT REQUIREMENTS: COMPUTATION OF CONTINGENT FEE; REIMBURSEMENT OF EXPENSES. (a) The contract must establish the reasonable hourly rate for work performed by an attorney, law clerk, or paralegal who will perform legal or support services under the contract based on the reasonable and customary rate in the relevant locality for the type of work performed and on the relevant experience, demonstrated ability, and standard hourly billing rate, if any, of the person performing the work. The contract may establish the reasonable hourly rate for one or more persons by name and may establish a rate schedule for work performed by unnamed persons. The highest hourly rate for a named person or under a rate schedule may not exceed $1,000 an hour. This subsection applies to subcontracted work performed by an attorney, law clerk, or paralegal who is not a 23-2.0 http://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 21 of 25 contracting attorney or a partner, shareholder, or employee of a contracting attorney or law firm as well as to work performed by a contracting attorney or by a partner, shareholder, or employee of a contracting attorney or law firm. (b) The contract must establish a base fee to be computed as follows. For each attorney, law clerk, or paralegal who is a contracting attorney or a partner, shareholder, or employee of a contracting attorney or law firm, multiply the number of hours the attorney, law clerk, or paralegal works in providing legal or support services under the contract times the reasonable hourly rate for the work performed by that attorney, law clerk, or paralegal. Add the resulting amounts to obtain the base fee. The computation of the base fee may not include hours or costs attributable to work performed by a person who is not a contracting attorney or a partner, shareholder, or employee of a contracting attorney or law firm. (c) Subject to Subsection (d), the contingent fee is computed by multiplying the base fee by a multiplier. The contract must establish a reasonable multiplier based on any expected difficulties in performing the contract, the amount of expenses expected to be risked by the contractor, the expected risk of no recovery, and any expected long delay in recovery. The multiplier may not exceed four without prior approval by the legislature. (d) In addition to establishing the method of computing the fee under Subsections (a), (b), and (c), the contract must limit the amount of the contingent fee to a stated percentage of the amount recovered. The contract may state different percentage limitations for different ranges of possible recoveries and different percentage limitations in the event the matter is settled, tried, or tried and appealed. The percentage limitation may not exceed 35 percent without prior approval by the legislature. The contract must state that the amount of the contingent fee will not exceed the lesser of the stated percentage of the amount recovered or the amount computed under Subsections (a) , (b) , and (c) . (e) The contract also may: (1) limit the amount of expenses that may be reimbursed; and (2) provide that the amount or payment of only part of the fee is contingent on the outcome of the matter for which the services 23-21 http://www.statutes.leg,is.state.tx.us/does/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 22 of 25 were obtained, with the amount and payment of the remainder of the fee payable on a regular hourly rate basis without regard to the outcome of the matter. (f) Except as provided by Section 2254.107, this section does not apply to a contingent fee contract for legal services: (1) in which the expected amount to be recovered and the actual amount recovered do not exceed $100,000; or (2) under which a series of recoveries is contemplated and the amount of each individual recovery is not expected to and does not exceed $100,000. (g) This section applies to a contract described by Subsection (f) for each individual recovery under the contract that actually exceeds $100,000, and the contract must provide for computing the fee in accordance with this section for each individual recovery that actually exceeds $100,000. Added by Acts 1999, 76th Leg., ch. 1499, Sec. 3.03, eff. Sept. 1, 1999. Sec. 2254.107. MIXED HOURLY AND CONTINGENT FEE CONTRACTS; REIMBURSEMENT FOR SUBCONTRACTED WORK. (a) This section applies only to a contingent fee contract: (1) under which the amount or payment of only part of the fee is contingent on the outcome of the matter for which the services were obtained, with the amount and payment of the remainder of the fee payable on a regular hourly rate basis without regard to the outcome of the matter; or (2) under which reimbursable expenses are incurred for subcontracted legal or support services performed by a person who is not a contracting attorney or a partner, shareholder, or employee of a contracting attorney or law firm. (b) Sections 2254.106(a) and (e) apply to the contract without regard to the expected or actual amount of recovery under the contract. (c) The limitations prescribed by Section 2254.106 on the amount of the contingent fee apply to the entire amount of the fee under the contingent fee contract, including the part of the fee the 23-22 http://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 23 of 25 amount and payment of which is not contingent on the outcome of the matter. (d) The limitations prescribed by Section 2254.108 on payment of the fee apply only to payment of the contingent portion of the fee. Added by Acts 1999, 76th Leg., ch. 1499, Sec. 3.03, eff. Sept. 1, 1999. Sec. 2254.108. FEE PAYMENT AND EXPENSE REIMBURSEMENT. ( a ) Except as provided by Subsection (b), a contingent fee and a reimbursement of an expense under a contract with a state governmental entity is payable only from funds the legislature specifically appropriates to pay the fee or reimburse the expense. An appropriation to pay the fee or reimburse the expense must specifically describe the individual contract, or the class of contracts classified by subject matter, on account of which the fee is payable or expense is reimbursable. A general reference to contingent fee contracts for legal services or to contracts subject to this subchapter or a similar general description is not a sufficient description for purposes of this subsection. (b) If the legislature has not specifically appropriated funds for paying the fee or reimbursing the expense, a state governmental entity may pay the fee or reimburse the expense from other available funds only if: (1) the legislature is not in session; and (2) the Legislative Budget Board gives its prior approval for that payment or reimbursement under Section 69, Article XVI, Texas Constitution, after examining the statement required under Section 2254.104(c) and determining that the requested payment and the contract under which payment is requested meet all the requirements of this subchapter. (c) A payment or reimbursement under the contract may not be made until: (1) final and unappealable arrangements have been made for depositing all recovered funds to the credit of the appropriate fund or account in the state treasury; and 23-23 http://www.statutes.legis.state.tx.us/does/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 24 of 25 (2) the state governmental entity and the state auditor have received from the contracting attorney or law firm the statement required under Section 2254.104(c). (d) Litigation and other expenses payable under the contract, including expenses attributable to attorney, paralegal, accountant, expert, or other professional work performed by a person who is not a contracting attorney or a partner, shareholder, or employee of a contracting attorney or law firm, may be reimbursed only if the state governmental entity and the state auditor determine that the expenses were reasonable, proper, necessary, actually incurred on behalf of the state governmental entity, and paid for by the contracting attorney or law firm. The contingent fee may not be paid until the state auditor has reviewed the relevant time and expense records and verified that the hours of work on which the fee computation is based were actually worked in performing reasonable and necessary services for the state governmental entity under the contract. Added by Acts 1999, 76th Leg., ch. 1499, Sec. 3.03, eff. Sept. 1, 1999. Sec. 2254.109. EFFECT ON OTHER LAW. (a) This subchapter does not limit the right of a state governmental entity to recover fees and expenses from opposing parties under other law. (b) Compliance with this subchapter does not relieve a contracting attorney or law firm of an obligation or responsibility under other law, including under the Texas'Disciplinary Rules of Professional Conduct. (c) A state officer, employee, or governing body, including the attorney general, may not waive the requirements of this subchapter or prejudice the interests of the state under this subchapter. This subchapter does not waive the state's sovereign immunity from suit or its immunity from suit in federal court under the Eleventh Amendment to the federal constitution. Added by Acts 1999, 76th Leg., ch. 1499, Sec. 3.03, eff. Sept. 1, 1999. 23-24 http://www.statutes.legis.state.tx.us/does/GV/htm/GV.2254.htm 7/16/2010 GOVERNMENT CODE CHAPTER 2254. PROFESSIONAL AND CONSULTING S... Page 25 of 25 SUBCHAPTER D. OUTSIDE LEGAL SERVICES Sec. 2254.151. DEFINITION. In this subchapter, "state agency" means a department, commission, board, authority, office, or other agency in the executive branch of state government created by the state constitution or a state statute. Added by Acts 2003, 78th Leg., ch. 309, Sec. 7.18, eff. June 18, 2003. Sec. 2254.152. APPLICABILITY. This subchapter does not apply to a contingent fee contract for legal services. Added by Acts 2003, 78th Leg., ch. 309, Sec. 7.18, eff. June 18, 2003. Sec. 2254.153. CONTRACTS FOR LEGAL SERVICES AUTHORIZED. Subject to Section 402.0212, a state agency may contract for outside legal services. Added by Acts 2003, 78th Leg., ch. 309, Sec. 7.18, eff. June 18, 2003. Sec. 2254.154. ATTORNEY GENERAL; COMPETITIVE PROCUREMENT. The attorney general may require state agencies to obtain outside legal services through a competitive procurement process, under conditions prescribed by the attorney general. Added by Acts 2003, 78th Leg., ch. 309, Sec. 7.18, eff. June 18, 2003. 23-25 hftp://www.statutes.legis.state.tx.us/docs/GV/htm/GV.2254.htm 7/16/2010 April 16, 2010 Katherine Aguilar inquiry Chairman Engelken: At our last meeting the committee requested the following information which is attached: 1) Garson's note/mortgage information for when he paid off his loan to the city 2) The professional services contract with URS 3) A list of the landscape material for the plaza. 4) Lien on the apartment building property. 5) Lien on the tank removal on Carson's property. 6) The appraisal of the triangle property. 7) Copy of Garson's lease 8) A list of items Garson owes the City The committee also requested staff to develop an art display policy for city hall, which we will be working on. In addition,. Ms. Aguilar submitted some additional questions, which I have attached. I have numbered her questions and provided answers to her questions, either listed here or in Knox s response: • Questions 1, 2, 3 and 5 are answered in K.nox's letter. • No money flowed out of the City. • Question 94: UIS was selected based upon their submittal. As I recall, we requested proposals from three firms and heard from two: URS and Knudson. The original contract was for $223,900. The final contract is for $249,300 -- change orders were issue for Geotechnical services ($6,900) and audio and wife design ($18,500). Both URS and Knudson have landscape architects, with Knudson being a landscape architect firm. • Question #6: We worked with Garson Silvers because he was the owner of the property. If it had been someone else who owned the property, we would have worked with them. • Question #7: This project was discussed in detail at numerous City Council and La Porte Development Corporation meetings, The cost/benefit was a m jor part of this discussion and consideration of this prof ect. lea let me know if you have additional questions. TSESrATE OF TSS V-nTwm OF muuw CONFUCr OF -r AFFIDAVIT tA mfil as a member Of ft MY of LA Porte &J—H-ma- - mmmmm--& am afff&vh and hmeby (m oath state ft mowing, I have a AnIA" U -IL C N 171, Tem Local in a-businas en* Or- red Property as - A�nM in will have a specbd. 11 SIM is to be made that Govemmem Code, and a vote is to be W= or ara " m on us bmimm eu&y or real FIVVV-L,,7• =6dl oil lot YA W-07"Ad"TA - Ril mp PAX 1;,4 HTW16"p " I w- CONTLETE (A) OR (B): (A) The business en* is (name); or (B) ne real propatY is located at: if hSwW ft=m fbr dc foUowing reasons: (check all which areapplcable} I have a ss WOOF a"ae-Ig Pat% q^A% CQ%%pft&w or sures of ft - isjum entity. OwwrAip of i0 % or more of the voting or of 10 % or more or $15,000 or more Of the hk market vable of the bus CE&Y. VIV -income for ft Funds received Er m the b-a-simm endty exceed 10 % of gross pm year. iavolved and I have -an equitable or Ing owDmbip of the Rol propertY is $295M. Fri With a fi& Mao= vat of at or real misd juterea in dw en&y A reladve of has a -- -- a of tie pubUe body of wbkh I dat woWd be affected by a Aem* mn a member. .1 will an U I pon of this affi&vit wiffi dc City S=emYt I !w -,.- -,a 4 011 on thus •icirma-rup. entity or real and fim any de ata involvb* ttus 16 mam by disc=on or debate. day of 20---Ok- Singed tdhgis ; 0 1APO Sime of ome J�& z� 9rATE OF TEXAS I COUNTY OF a��rs � {� yjrlrtl,��0. �7 i i e^'-" 4 on this I:w Befu0mc GIFT -1 wbm m= is Saa to known to = to be ft pm= exerxuad the same for the —090M mg wjm0wkdged to me that Wft k5Civetunftr my hand and seal of offtc thisday of 20L. (SEAL) A A Nary MUC is and fbr the S#jf Texas 25-1 MINUTES OF THE SPECIAI. CALLED REGULAR MEETING OF THE DEVELOPMENT CORPORATION BOARD OF DIRECTORS EXHI13IT 26 February 4, 2008 1. Call to order President Pat Muston called the meeting to order at 6:00 p.m. Members Present: Love, Muston, Moser, Clausen, Wise and Matuszak. Members/Officers Absent: Chuck Engelken and Michael Dolby. Staff Present: City Manager Ron Bottoms, Assistant City Manager John Joerns, City Secretary Martha Gillett, Assistant City Attorney Clark Askins, Main Street Coordinator Debra Dye and Economic Development Coordinator Gretchen Black. Others Present: Mayor Porter, Russell Plank and Mrs. Plank. 2. Motion was made -by Board Member Matuszak to approve the Minutes of November 12, 2007 of the Special called Regular Meeting of, La Porte Development Corporation Board with noted corrections. Second by Board Member Moser. Motion carried unanimously. Ayes: Love, Muston, Moser, Matuszak, Wise and Clausen Nays: None Abstain: None Absent: Chuck Engelken 8. Russell Plank presented report of status of Port Crossing Business Park and provided the board with marketing materials. He noted there will be future efforts in enhancing the landscaping and attracting retail and other businesses. Board member Matuszak noted some concerns with light pollution on one of the buildings. Mr. Prank noted he would drive by after he left the meeting. If changes are needed he will move in that direction. 4. Gretchen Black presented status report regarding website refurbishment. The project will be paid for by the 4b Development Board and Main Street. The City's general fund will not contribute funds to the project. 5. Gretchen Black presented status report regarding city-wide Economic Development Strategic Plan. This project will be brought back for action. It was the consensus of the board to keep this project moving forward. 6. Gretchen Black presented status report regarding Community Branding Campaign. It was the consensus of the board to keep this project moving forward. 7. La Porte Development Corporation to consider setting a Public Hearing date of February 25th, 2008, to consider expenditure of funds for the Sylvan Beach Shoreline Protection and Beach Re -nourishment Project. Motion was made by Board Member Love to set a Public Hearing date for February 25, 2008 as recommended. Second by Board Member Clausen. Motion carried, Ayes: Love, Muston, Moser, Wise and Clausen Nays: None Abstain: Matuszak Absent: Engelken 8. EXECUTIVE SESSION- PURSUANT TO PROVISION OF THE OPEN MEETINGS LAW. CHAPTER 551.071 THROUGH 551.076, 551.087, TEXAS GOVERNMENT CODE, (CONSULTATION WITH ATTORNEY, DELIBERATION ATTORNEYRNEY, DELIBERATION REGARDING REAL PROPERTY, DELIBERATION REGARDING PROSPECTIVE GIFT OR DONATION, PERSONNEL MATTERS, DELIBERATION REGARDING SECURITY DEVICES, OR EXCLUDING A WITNESS DURING EXAMINATION OF ANOTHER WITNESS IN AN INVESTIGATION, DELIBERATION REGARDING ECONOMIC DEVELOPMENT NEGOTIATIONS) SECTION 551.071-- (ECONOMIC DEVELOPMENT) MEET WITH CITY MANAGER AND CITY ATTORNEY TO DISCUSS JOINT VENTURE COMPLEX, GOLF COURSE, MAIN STREET ENHANCEMENTS, RETAIL DEVELOPMENTS PROPOSED SYLVAN BEACH HOTEL PROJECT AND PROJECT SCHOOL The La Porte Development Corporation retired to Executive Session at 6:53 p.m. The La Porte Development Corporation returned to the Special Called Regular Meeting at 8:15 p.m. 6. CONSIDERATIONS AND POSSIBLE ACTION ON ITEMS CONSIDERED IN EXCECUTIVE SESSION There was no action taken. 7. ANNOUNCEMENTS/ADMINISTRATIVE REPORTS -- J. JOERNS/ G. BLACK LAKES OF FAIRMONT GREENS SUBDIVISION 8. BOARD COMMENTS Board Members had no comments. 9. ADJOURNMENT The meeting was duly adjourned at 8:24 p.m. Respectfully submitted 01 A., Martha Gillett, City Secretary TRMC, GMC La Porte Development Corporation Secretary Passed and approved on thinrelay of Fekfu a / , 2008. I Pat Mus on, President 26-2 askins & aski'ns P.c. ATTORNEYS and COUNSELORS Knox W. Asldns Clark T. AsIdns April 27, 2010 via email Charles Enge lken, Jr. Chairman, Fiscal. Affairs Committee Daryl. Leonard Tommy Moser Louis Rigby Gentlemen: You have requested my opinion on the application of conflict of interest law to directors of an economic development corporation. I enclose a copy of page 11, paragraph 26, from 112008 Texas Conflict of Interest Laws", a manual published by the Texas Attorney General. As you can see, the Attorney General states that Chapter 171 of the Texas Local Government Code does not apply to the directors of an economic development corporation, such as the City of La Porte Development Corporation. Development corporations are non-profit corporations, under the Texas Non -Profit Corporation Act. I also enclose a copy of page 5,;. article 5, paragraph 5.43, "Potential Conflicts of Interest", from the bylaws of the City of La Porte Development Corporation. As you can see, the bylaws "declare" that the members of the board of directors of the development corporation are local public officials within the meaning of Texas Local Government Code Chapter 171. Therefore, in my opinion., the directors of the City of La Porte Development Corporation are not covered public officials under Texas Local Government Code, Chapter 171.' However, members of the board of directors of the City of La Porte Development Corporation are bound by the provisions of Article S. "Potential Conflicts of Interest", Section 5.03, of the -corporate bylaws. 702 W. Fairmont Parkway, P.O. Box 1218, La Porte, TX 775 72-1218 281.471.1887 phone 281.471.2047 fax • knoxasldns@comcast.net • ctaskans@swbell.net Charles Engelken, Jr. April 27, 2010 page 2 KWA: sw Enclosures cc: via email Ron Bottoms City manager City of La Porte Clark T. Askins Assistant City Attorney City of La Porte 27-2 Yours very truly, Knox W. Askins City Attorney City of La Porte 'orale:Je+ LOCAL GOVERNMENT OFFICER FORM CIS CONFLICTS DISCLOSURE STATEMENT (instructions for completing and filing this form are provided on the next page.) This questionnaire reflects changes made to the law by H.B. 1491, 80th Leg., Regular Session. OFFICE USE ONLY This is the notice to the appropriate local governmental entity that the following local government officer has become aware of facts that require the officer to file this statement Date Received in accordance with Chapter 176, Local Government Code. 1 Name of Local Government Officer 2 Office Held Name of person described by Sections 176.002(a) and 176.003(a), Local Government Code 4 Description of the nature and extent of employment or other business relationship with person named in item 3 List gifts accepted by the local government officer and any family member, excluding gifts described by Section 176.003(a-1), if aggregate value of the gifts accepted from person named in item 3 exceed $250 during the 12 -month period described by Section 176.003(a)(2)(B) Date Gift Accepted Description of Gift Date Gift Accepted Description of Gift Date Gift Accepted Description of Gift (attach additional forms as necessary) 61 AFFIDAVIT I swear under penalty of perjury that the above statement is true and correct. I acknowledge that the disclosure applies to a family member (as defined by Section 176.001(2), Local Government Code) of this local government officer. I also acknowledge that this statement covers the 12 -month period described by Section 176.003(a), Local Government Code. Signature of Local Government Officer AFFIX NOTARY STAMP SEAL ABOVE Sworn to and subscribed before me, by the said this the day of 20 , to certify which, witness my hand and seal of office. Signature of officer administering oath Printed name of officer administering oath Title of officer administering oath Adopted 06/29/2007 LOCAL GOVERNMENT OFFICER CONFLICTS DISCLOSURE STATEMENT Section 176.003 of the Local Government Code requires certain local government officers to file this form. A "local government officer" is defined as a member of the governing body of a local governmental entity; a director, superintendent, administrator, president, or other person designated as the executive officer of the local governmental entity; or an employee of a local governmental entity with respect to whom the local governmental entity has, in accordance with Section 176.005, extended the requirements of Sections 176.003 and 176.004. This form is required to be filed with the records administrator of the local governmental entity not later than 5 p.m. on the seventh business day after the date on which the officer becomes aware of the facts that require the filing of this statement. A local government officer commits an offense if the officer knowingly violates Section 176.003, Local Government Code. An offense under this section is a Class C misdemeanor. Please refer to chapter 176 of the Local Government Code for detailed information regarding the requirement to file this form. INSTRUCTIONS FOR COMPLETING THIS FORM The following numbers correspond to the numbered boxes on the other side. 1. Name of Local Government Officer. Enter the name of the local government officer filing this statement. 2. Office Held. Enter the name of the office held by the local government officer filing this statement. 3. Name of person described by Sections 176.002(a) and 176.003(a), Local Government Code. Enter the name of the person described by Section 176.002, Local Government Code with whom the officer has an employment or other business relationship as described by Section 176.003(a), Local Government Code. 4. Description of the nature and extent of employment or business relationship with person named in item 3. Describe the nature and extent of the employment or other business relationship with the person in item 3 as described by Section 176.003(a), Local Government Code. 5. List gifts accepted, excluding gifts described by Section 176.003(a-1), if aggregate value of the gifts accepted from person named in item 3 exceed $250. List gifts accepted during the 12 -month period (described by Section 176.003(a), Local Government Code) by the local government officer or family member of the officer, excluding gifts described by Section 176.003(a-1), from the person named in item 3 that in the aggregate exceed $250 in value. 6. Affidavit. Signature of local government officer. 29-2 Adopted 06!29/2007 . U.S.DEPAr!TMENT OF HOUSING AND URBAN DEVELOPMENT BTYPEOF LOAN OM13 No. 2502-0265 1. L IFHA 2. L IFMHA 3. 1 ICONV- UNINS. 4. C 3VA 5. E ICONV, INS. 6. FILE NUMBER: 7. LOAN NUMBER: 07108752 =7T -1r -V- 8. MTG. INS. CASE NO.: .NOTE: This formis furnished to give you a statement of actual settlement costs. Amounts paid to and by the settlement agent are shown. Items marked ( 41p.o.c.") were paid outside the closing. they are shown here for information purposes and are not included in the totals. NAME OF BORROWER: EAST A. DEVELOPMENT, L.P. ADDRESS: 1001 USENER.., HOUSTON, TEXAS 77009 NAME OF SELLEI-",-. WADE. COOPER ADDRESS: 2501 PINEBROOK LANE, SEABROOK, TEXAS 77586 Sl:-,Ll.r--R TIN: NAME OF LENDER: LA PARTE ECONOMIC DEVELOPMENT CORPORATION ADDRESS: ;.PROPERTY LOCATION: NORTH 17FT OF L7 9, ALL OF LOTS 8,7,& 6, BLOCK 198 CITY OF LAPORTE 109 & 11 SAN JACINTO AVE TX 1. SETTLF-HENT AGENT: STEWART TITLE COMPANY ADDRESS: 9434 OLD KATY ROAD, SUITE 230 HOUSTON, TEXAS 77055 ,LACE OF SETTLEMENT: STEWART TITLE ADDRESS: 9434 OLD KATY ROADO SUITE 230 HOUSTON, TEXAS 77055 -- J. SIJMMARY OF BORROWER'S TRANSACTION 100. GROSS AMOUNT DUE FROM BORROWER: 101. Contract sales price (713) 688-4300 295,000.00 102. Personal property PHONE NUMBER: (713) 688-4300 I.SETTLEMENT DATE - 103. Settlement charges to borrower(line 1400) Proration date: 10/29/08 2,060.5 104. 400. GROSS AMOUNT DUE TO SELLER - 105. 295,000.00 402. Personal property Adjustments for items paid by seller in advance: 403. 106. City/town taxes to 404. 107. County taxes to 405. 108. Assessments to Adjustments for items paid for seller in advance, 109. Maintenance to 406. City/town taxes to 110. School/Taxes to 407. County taxes to 1 408. Assessments to 112. 409. Maintenance to 120. GROSS AMOUNT DUE FROM BORROWER: 297,060.55 200. AMOUNTS PAID BY OR IN BEHALF OF BORROWER: 411. 201. Deposit or earnest money 412. 100.00 202. Principal amount of new loans) 295fo510.00 150,000.00 203. Existing loan(s) taken subject to 501, Excess depposit(see instructions) -- 204. Commitment Far- 3t.381.46 503. Existing loan(s) taken subject to 205-.- 504. Payoff of first mortgage loan - 206. Option Fee 108,401.24 3,500.00 207.PAID TO SELLER 507. PAID TO SELLER 82,218.68 208.MTP,08108647 -POCK 150,000.00 209 I - CLOSER: PAM LESTER PHONE NUMBER: (713) 688-4300 s E� rim,EMENT AGENT 'r1N: 74-0923770 PHONE NUMBER: (713) 688-4300 I.SETTLEMENT DATE Ctosing date: 10/29/08 Proration date: 10/29/08 K. SUMMARY OF SELLER'S TRANSACTION 512. Assessments 400. GROSS AMOUNT DUE TO SELLER - 401. Contract sales price 295,000.00 402. Personal property 403. 514. Maintenance 404. 405. 515. Adjustments for items paid for seller in advance, 406. City/town taxes to 7 407. County taxes to 1 408. Assessments to 517. 409. Maintenance to --J 410. School/Taxes to 518. 411. 412. 519. 420, GROSS AMOUNT DUE TO SELLER: 295fo510.00 500. REDUCTIONS IN AMOUNT DUE TO SELLER: 237,629.71 520. TOTAL REDUCTION IN AMOUNT:, 501, Excess depposit(see instructions) 502. Settlement charges to sciler(line 1400) 3t.381.46 503. Existing loan(s) taken subject to 504. Payoff of first mortgage loan 95,687.59 505. Payoff of second mortEage loan 108,401.24 506. option Fee 3,500.00 507. PAID TO SELLER 82,218.68 509, 509. AAvivvtr"tartc fr%r it,-rnc iimvnn;r1 Nit 210. City/town taxes to .510. City/town taxes to 211. County taxes 01 /01 /08 to 10/29/08 1,811.03 511. County taxes 01 /01 /08 to 10/29/08 212. Assessments to 512. Assessments to 213. School/Taxes to 513. School/Taxes to 214. 514. Maintenance to 215. 515. 216. 516. 217. 517. 218. 518. 219. 519. 220. TOTAL PAID BY/FOR BORROWER: 237,629.71 520. TOTAL REDUCTION IN AMOUNT:, 295,000.00 300. CASI1 AT SETTLEMENT FROM/TO BORROWER: 600. CASH AT SETTLEMENT TO/FROM SELLER: 301. Gross amount due from borrower(line 120) 297,060.55 601. Gross amount due to seller(line 420) 295,000.00 302. Less amounts paidby/for borrower(line 220) 237,629.71 602. Less total reductions in amount duo seller(line 520) 295,000.00 303. CAS13 [X _ FROM I TO] BORROWER: 59,430.84 603. CAS14 ( -1'0] FROM] SELLER:. 0-00 EXHIBIT $ `i i L e 07108752 Tom. SETTLEMENT CHARGES _ 73.00 PAID FROM PAID FROM BORROWER'S SELLER'S 1202. Citylcounty tax/stamps: Deed $ Mrtg $ 1305, 2007 DELINQUENT TAXES^!� to LA PORTE CITY AND ISD I��UNDS FUNDS 700. To,rAL SALES/BROKER'S COMMISION Based on $ C % = AT SETTLEMENT AT SETTLEMENT Division of Commission (line 700) as follows: 701.$ _ _ �......_ --to 702.$ _ _ to 703, Commission paid at settlement 704. 800. ITEMS PAYABLE IN CONNECTION WITH LOAN. 801 Loan Origination fee_ Wn 802. Loan Discount % _ 803. Appraisal fee _ to 804. Credit Report to 805. Lender's inspection fee to _ - 806. Mortgage Insurance application fee _ _ to 807. Assumption Fee to $08. Commitment Fee _ _ to _ 809. FNMA Processing Fee to 810. Pictures _ to _. 811. to 812. to 900. ITEMS REQUIRED BY LENDFR TO BE PAID IN ADVANCE. 901. Interest from to /day _ 902. Mortgage insurance premium far � ITio, to 903. Lazard insurance premium for yrs. to _ 904, Flood Insurance yrs, to _ 905. 1000. RESERVES DEPOSITED WITH LENDER. 1001. Hazard Insurance mo . a $ POT MO. 1_002. Mortgage insurance mo.C9$ per mo. 1003.. City property taxes mo.Q$ per Mo. a 1004. County property taxes mo.Q$ per mo. 1005. Annual assessments (Maint.) rrio,(g$ per mo. _ 1006. School Property Taxes mo.(P$ per mo. _ 1007. 'Nater Dist. Prop. Tax mo.@$ per mo. _ 1008. Flood Insurance rno.(2$ per mo. 1009. Aggregate Accounting Adjustment 1100. TITLE CHARGES: 1101. Settlement or closing fee MTP, D8108647 to STEWART TITLE 1,160.00 1102. Abstract or title search TAXCERT, 08'10864 to STEWART TITLE 64.95 1103. Title examination GTYFEE, 08108647 to STEWART TITLE 5.00 1104. Title insurance binder to _ 1105. Document preparation RELEASE OF LIEN to RICHARD A . CROW P.C. 100.00 1106, Notary fee to 1107. Attorney's fee to to BENJAMIN MILLER 175.00 (includes above items No.: ) _ 1108, Title insurance 50% to R i chard A. Crow, to STEWART TITLE 432.60 1,884.00 (includes above items No.: ) 1109. Lender's coverage 1501000.00 $ 150.00 -_ 1110. Owner's coverage 2950,000.00 $ 2,166.60 Sur Del. 1 1 1 1. Escrow fee to RICHARD A. CROW, P . C . 300.00 300.00_ 1112. Restrictions to 1113, Messenger Fee/Doculzlent Deli very to RICHARD A . CROW. -P. C. 25.00 35.00 1 1 14. to Innn rrT7nIV. Xf X'IIYI IIIT-%TT.T!-! ANYri ITIV ANT V="E 7 1" T.3 A ID f-'- = V I Lrkiki t_7V V J .lel Y IVA. J31_1 1 IN. }i%_ %.i JtiJJ J.L V V rVJ N J1 t J\r'►1 N vi J✓J\ v a 1l-►A�V .Vv 1201, Recording fees: Deed $ 25.00 Mrtg $ 48.00 Rel. $ 50.00 _ 73.00 50-00 1202. Citylcounty tax/stamps: Deed $ Mrtg $ 1305, 2007 DELINQUENT TAXES^!� to LA PORTE CITY AND ISD _ 1203, State tax/stamps: Deed $ Mrtg $ 1204, Tax certificates to STEWART TITLE 2,060.55 3,381 .46 64.95 1205. to 1206. to 1 W)rl A nnVrTrW A T RTZT-rl RMRWrr C`N A R t .r .,R l 1301. Survey to ,! _ 1302. Pest inspection _ to 1303, to 1304. 2006 DEL I NQUENTAXES to HARRIS COUNTY TAX ASSESSOR COLLECTOR 204.35 1305, 2007 DELINQUENT TAXES^!� to LA PORTE CITY AND ISD 568.16 1400. TOTAL SETTLEMENT CHARGES (entered on lines 103, Section J and 502, Section K) 2,060.55 3,381 .46 'ERTIFICATION: 1 have carefully reviewed the HUD -1 Settlement Statement and to the gest of Illy knowledge and belief, it is a true and accurate statement of all -,ceipts and disbursements made on my account or by me in this transaction. I. further certify that I have received a copy of HUD -1 Settlement Statement. 3orrowers Sel le 'Ile HUD -1 Settlement Stateme which I have prepared is a true and a ate account of this transaction, have caused or will cause the funds • disbursed in ceordance with this statement. Settlement Agent Date SEE PAGE 3 FOR SIGNATURES, IF APPLICABLE YARNING: It is a c;rima to knowingly IIIaktC false Statements to Lila United States on this or Ally offier similar forin. Pcnalfic-.s upon c..ozivic:tion uan Inulude a fllle alid nprisonrnent. For details see: Title lei: U.S. Code Section 1001 and Section 1010. Page 3 to be affixed to HUD -1 Settlement Statement File No.: 07108752 CERTIFICATION Seller's and Purchaser's signature hereon acknowledges his/their approval of tax prorations and signifies their understanding that prorations were based on taxes for the preceding year or estimates for the current year, and in the event of any change for the current year, all necessary adjustments must be made between Seller and Purchaser; likewise any default in delinquent taxes will be reimbursed to Title Company by the Seller. The parties have. read and understood the above sentences, and recognize that the above recitations herein are material and important. The parties agree to these statements, and recognize Title Company is relying on these recitations in closing this transaction. Title Company has deposited the earnest money that it has received in a demand deposit account that is federally insured to the maximum extent permitted by law. Demand deposit accounts are non-interest bearing pursuant to federal law, but offer immediately available funds for withdrawal after a check has cleared. Title Company may receive other benefits from the financial institution where the funds are deposited. Bases{ upon the deposit of escrow funds in demand deposit accounts and other relationships with the financial institution, Title Company is eligible to participate in a program offered by the financial institution whereby the title Company may (i) receive favorable loan terms and earn income -from the investment of loan proceeds and (ii) receive other benefits offered by the financial institution. I have carefully reviewed the HUD -1 Settlement Statement and to the best of my knowledge and belief, it is a true and accurate statement of all receipts and disbursements made on my account; or by me in this transaction. I certify and acknowledge that I have received a copy of the HUD -1 Settlement Statement and have read and understood the disclosure state above. �J Purchasers)/8orrovver(.s, Seller(i) Purchaser (s) Seller(s) To the best of my knowledge', the HUD -1 Settlement Statement which I have prepared is a true and accurate account of the funds which were received and have been or will be disbursed by the under as part of t sett ment of this transactio settlement Agent bate WARNING: It is a crime to knowingly make false statements to the United States on this or any other similar form. Penalties upon conviction can include a fine and imprisonment. For details see: Title 18 U.S. Code Section 1001 and Section 1010. Aire Transfer Report Page 1 of 1 EXHIBIT 31' City of La Porte Money Transfer Report Printed on Oct 28,2008 on 03:15 PM Approved Transfers Beneficiary Status Bank No Cost Deft Aceount No Template Sank Beneficiary Beneficiary Ace# Name Curr Transfer Amount Pay tad Details Method Ref/Swift Acot ID Sand mate: Oct 28,2008 0000312088 (USD) - City BANK ONE, STEWART TITLE 20083D2000663 000065 of La Porte tient Oper 312088 NA. COMPANY ESCROW USD 153,424.56 FW Sent Ck Acot 566625102 ACCOUN 0000312€ 88 (USD) - City SANK ONE, STEWART TITLE 2008302000670 000056 of La Porte Genl oper 312088 N.A. COMPANY ESCROW USD 160,000,00 FW Sent Acct 656625102 ACCOUN Total: USD 303424.56 (2) Approved Total: USD 303,424.58 (2) Report Totals Curr Amount Processed REPORT TOTAL: USD 303,424.56 (2) h .ps:// r. a egytreas .r .a. agement. co am31 om0' e Y TRepor processWireRe ort... 10/28/2008 PROMISSORY NOTE This Promissory Note (this "Note") is made by East A Developments, L.P., as maker, under the terms and conditions as follows: Article I DEFINITIONS For purposes of this Note, the following defined terms shall have the meanings set forth in this Article 1: 1.1 "Borrower" means East A Developments, L.P., a Texas limited partnership. 1.2 "Borrower's Mailing Address" means 1001 Usener, Houston, Harris County, Texas 77007. 1.3 "Lender" means La Porte Economic Development Corporation, a Texas non-profit corporation. 1.4 "Placefor Payment" means 604 W. Fairmont Parkway, La Porte, Texas 77571. 1.5 "Principal Amount" means One Hundred Fifty Thousand Dollars and No Cents ($150,000.00). 1.6 'Annual Interest Rate" means Five Percent (5.00%) per year. 1.7 "Maturity Date" means the first day of the month following six (6) months after the Effective Date. 1.8 "PSA" means that certain Purchase and Sale Agreement by and between Lender and Borrower. The PSA is hereby incorporated by reference. 1.9 "Effective Date" means* Octobe4 2008 Article 11 TERMS OF PAYMENT 2.1 Borrower 'promises to pay to the order of Lender -the Principal Amount plus interest, compounding annually, at the Annual Interest Rate, the same being due and payable in equal monthly installments of Six Hundred Twenty -Five Dollars and No Cents ($625.00), on the first day of each month, beginning the first day of the calendar month after the Effective Date, and continuing until the Maturity Date, when the entire amount of remaining principal and accrued, unpaid interest will be payable in full. EXHIBIT A Page -I- 32-1 2.2 Payments will be applied first to accrued interest and the remainder to reduction of the Principal Amount. 2.3 This Note is payable at the Place for Payment. 2.4 All unpaid amounts are due by the Maturity Date, at which time they will reach maturity. After maturity, Borrower promises to pay any unpaid principal balance plus interest at the Annual Interest Rate. 2.5 Borrower may prepay this Note in any amount at any time before the Maturity Date without penalty or premium. 2.6 This Note is secured by a deed of trust of even date herewith from Borrower to Knox Askins, trustee, (the "Deed of Trust") which covers the following real property (such real property being the "Collateral Security"): All of Lots 6, 7, 8, 91 10, and the West fifty-six and four tenths (56.4) feet of Lots 11, 12 and 13, in Block One Hundred Ninety- Eight (198) of TOWN OF LA PORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 8, Page 16 of the Map Records of Harris County, Texas. 2.7 If Lender is obligated to indemnify Borrower under the terms of the PSA or if Lender defaults on the PSA, Borrower may elect to apply the amounts owed under the PSA to the outstanding, unpaid principal and accrued, unpaid interest, and such sums will be reduced by that amount. Article III DEFAULT 3.1 An "Event of Defaule' exists under this Note if: 3.1.1 Borrower fails to timely pay or perform any obligation or covenant in this Note; %-# 3.1.2 any warranty, covenant, or representation in this Note is materially false when made; 3.1.3 a receiver is appointed for Borrower or the Collateral Security; 3.1.4 any Collateral Security is assigned for the benefit of creditors; 3.1.5 a bankruptcy or insolvency proceeding is commenced by Borrower and continues for at least sixty (60) days; or 3.1.6 Borrower is dissolved, begins to wind up its affairs, or is authorized to dissolve or wind up its affairs by its governing body or persons. 3.2 If an Event of Default exists under this Note or the Deed of Trust, Lender may declare the unpaid principal balance, earned interest, and any other amounts owed on the Note immediately due. Page -2- 32-2 3.3 If an Event of Default exists under this Note, before exercising any of Lender's remedies under this Note or the Deed of Trust, Lender shall first give Borrower written notice of default at Borrower's Mailing Address and Borrower will have ten (10) days after such notice is received to cure the default. In the event that this Section 3.3 conflicts with any other provision in this Note, this Section 3.3 will control. Article IV MISCELLANEOUS 4.1 Interest on the debt evidenced by this Note will not exceed the maximum rate or amount of nonusurious interest that maybe contracted for, taken, reserved, charged, or received under law. Any interest in excess of that maximum amount will be credited on the Principal Amount or, if the Principal Amount has been paid, refunded. On any acceleration or required or permitted prepayment, any excess interest will be canceled automatically as of the acceleration or prepayment or, if the excess interest has already been paid, credited on the Principal Amount or, if the Principal Amount has been paid, refunded. This provision overrides any conflictin'g' provisions in this Note and all other instruments concerning the debt, 4.2 Whenever a period of time in this Note is prescribed for action to be taken by Borrower, Borrower will be liable or responsible for, and there will be excluded from the computation of any corresponding deadline, any delays due to strikes, riots, acts of God, shortages of labor or materials, war, government laws, regulations or restrictions or any other causes of any kind whatsoever which are beyond the r6asonable control of Borrower. 4.3 The section and paragraph headings, titles and captions used in this Note. are for convenience only and do not limit or amplify the provisions hereof. 4.4 Lender and Borrower each acknowledge that he has participated in the drafting of this Note, that this Note will not be construed against either party because it was the drafter, and that any rule of construction requiring that any provision of this Note be construed against a particular party because of that party's status as the drafter of the provision will be not be applicable to this Note. 4.5 When the context requires, singular nouns and pronouns include the plural. 4.6 This note will be construed under the laws of the State of Texas, without regard to choice -of -law rules of any jurisdiction. To the maximum extentpermitted by law, venue for all purposes will be the Harris County, Texas, Page -3- 32-3 EXECUTED AND EFFECTIVE AS OF THE EFFECTIVE DATE. EAST A DEVELOPMENTS, L.P. By: GSDB Management, L.L.C., its General Partner B ,f '• F J. Gars -on Silvers, Manager Page -4- 32-4 10131 PAOS -:RP3;�,i4-3&00 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, DEED OF TRUST THE STATE OF TEXAS § § Know All Men By These Presents: COUNTY OF HARRIS § THAT, this Deed of Trust ("Deed of Trust") is effective as of rarer , 2008 (the "Effective Date"), from EAST A DEVELOPMENTS, L.P., a Texas limited partnership (the "Grantor", whether one or more), to KNOX .ASKINS, TRUS'T`EE (the "Trustee"), for the benefit of the LaPorte Economic Development Corporation, a Texas J.At000 It. non-profit corporation (the "Beneficiary"); and WHEREAS, Grantor has executed and delivered to Beneficiary that certain Note (as defined below) in conjunction with the execution of that certain Purchase and Sale .Agreement by and between La Porte 5 Points Properties, L.P., Grantor and Beneficiary, dated October , 2008 (the "PSA"); WHEREAS, Grantor and Beneficiary desire to secure payment of that Note with the Property described below; W NOW, THEREFORE, in consideration of the sum of $10.00, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor has GRANTED, SOLD and CONVEYED, and by these presents does GRANT, SELL and CON'V'EY In trust unto Trustee, and his substitutes or successors, all of the following described property (the "Property") situated in Harris County, 'T'exas: ; All of Lots 6, 7, 8, 9, 10, and the West fifty-six and four tenths (56.4) feet of Lots 11, 12 and 13, in Block one Hundred Ninety -Eight (198) of TOWN OF LA PORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 8, Page 16 of the Map Records of Barris County, Texas. TO HAVE AND TO HOLD the Property in trust unto 'T'rustee, his successors in this trust and his assigns, forever, and Grantor does hereby - bind: Grantor, his respective heirs, legal representatives, successors and assigns, to warrant and defend the Property to Trustee, his successors and assigns, forever, against the claim or claims, of all persons whomsoever claiming or to claim the same or any part thereof, rough or under Grantor, but not otherwise, subject to the follo ing exceptions: EXHIBIT , � yr lI : =- � r -- •.� L \J �--- Page 1 21-A/RICHARD craw 8TMA.R'1" 'ST.'CLE COMPANY (i) any and all liens, encumbrances, reservations, restrictions, covenants, easements, rights of way, mineral interests and other matters, if any, of record in the County Clerk's Office of Harris County, Texas; (ii) all zoning, ordinances, regulations, restrictions, and other limitations imposed by any municipality with jurisdiction over the Property; and (iii) all matters which a survey and a physical inspection of the Property would reveal. If Grantor performs all the covenants and pays the Note according to its terms, this Deed of Trust shall have no further effect, and Beneficiary shall promptly release it. - Article I CONVEYANCE IN TRUST; PROMISSORY NOTE 1.1 Securing Payment In Trust. This conveyance is made IN TRUST to secure payment of that certain Promissory Note of even date herewith, in the principal amount of $150,000.00, executed by Grantor, as maker, and payable to the order of Beneficiary, bearing interest and being payable as therein provided (the "Note"). To the extent that this Deed of Trust conflicts with the PSA, the PSA will control. The Agreement is hereby incorporated into this Deed of Trust by reference. 1.2 Payment of Note. The Note shall be payable at the address specified in the Note until Beneficiary gives written notice to Grantor designating another place of payment. 1.3 Application of Payments. All payments received by Beneficiary, however designated, shall be applied to the principal or interest of the Note or to expenses provided for in this Deed of Trust, or any combination of the foregoing, as directed by Beneficiary in accordance with the provisions of the Note. Article 11 GRANTOR'S OBLIGATIONS 2.1 General Obligations. Grantor shall: 2.1.1 keep the property in good repair and condition; 2.1.2 pay all taxes and assessments on the property when due; and 2.1.3 preserve the lien's priority as it is established in this Deed of Trust; 2.2 Required Insurance Policy. Grantor shall maintain, in a form acceptable to Beneficiary, an 'insurance policy that: 2.2.1 covers all improvements for their full insurable value as determined when the policy is issued and renewed, unless Beneficiary approves a smaller amount in writing; 2.2.2 contains an 80% coinsurance clause; 2.2.3 provides fire and extended coverage, including windstorm coverage-, 2.2.4 protects Beneficiary with a standard mortgage clause; and 2.2.5 provides flood insurance at any time the property is in a flood hazard area. Page 2 33-2 2.3 Insurance Policy Covenants. Grantor shall do the following things related to the above-mentioned insurance policy: 2.3.1 comply at all times with the requirements of the 80% coinsurance clause; 2.3.2 deliver the insurance policy to Beneficiary and deliver renewals to Beneficiary at least ten days before expiration; and 2.3.3 keep any buildings occupied as required by the insurance policy. 2.4 Prior Liens. If this Deed of Trust is not a first lien, Grantor shall pay all prior lien notes that Grantor is personally liable to pay and abide by all prior lien instruments. 2.5 Subsequent Liens. Grantor may obtain other liens or security 'interests securing the lending of money for the construction, affixation, creation, purchase, or addition of improvements of any type or nature to the Property ('including, but not limited to, so called construction loans), and such other liens shall be superior to this Deed of Trust. Article III BENEFICIARY'S RIGHTS 3.1 Successor Trustees. Beneficiary may appoint in writing a substitute or successor trustee, succeeding to all rights and responsibilities of Trustee, provided that Beneficiary does so in writing, provides a copy of the same to Grantor promptly upon doing so, and records the same in the Real Property Records of Harris County, Texas. 3.2 Application of Insurance Proceeds. Beneficiary may apply any proceeds received under the insurance policy either to reduce the Note or to repair or replace damaged or destroyed improvements covered by the policy. 3.3 Beneficiary Performance of Obligations. If Grantor fails to perform any of Grantor's obligations, Beneficiary may perform those obligations and be reimbursed by Grantor on dernand for any sums so paid, including attorney's fees, plus interest on those sums from the dates of payment at the rate stated in the Note for matured, unpaid amounts. The sum to be reimbursed shall be secured by this Deed of Trust. 3.4 'Grantor Default. If Grantor defaults on the Note or fails to perform any of Grantor's obligations and the default continues after Beneficiary gives Grantor notice of the default and the time within which it must be cured, as may be required by law or by written agreement, then Beneficiary may: 3.4.1 declare the unpaid principal balance and earned interest on the Note immediately due; 1 3.4.2 request Trustee to foreclose, this lien, in which case Beneficiary or Beneficiary's agent shall give notice of the foreclosure sale as provided by the Texas Property Code as then amended; and RFECORDEFR S MEMORANDUM' At the, We Oi recordation, this instrument was found to oe inadequate for the best Dhoto, mhio reoroduction b6c.ause of itlegibi'lity, 0V 'Or cot ted aper, etc, All Diockout, Page 3 Pow copy, chs 0 16 additions and changes were Present at 0 110116- 33-3 the Ins6trument was filed and recDrdOO 3.4.3 purchase the property at any foreclosure sale by offering the highest bid and then have the bid credited on the Note. Article IV TRUSTEE'S DUTIES 4.1 Foreclosure Duties. If requested by Beneficiary to foreclose this lien, Trustee shall: 4.1.1 either personally or by agent give notice of the foreclosure sale as required by the Texas Property Code as then amended; and 4.1.2 sell and convey all or part of the property to the highest bidder for cash with a general warranty binding Grantor, subject to prior liens and to other exceptions to conveyance and warranty. 4.2 Foreclosure Sale Proceeds. From the proceeds of such sale, Trustee shall pay, in this order: 4.2.1 first, expenses of foreclosure; 4.2.2 second, to Beneficiary, the full amount of principal, interest, attorney's fees, and other charges due and unpaid; 4.2.3 third, any amounts required bylaw to be paid before payment to Grantor-, and 4.2.4 fourth, to Grantor, any balance, Article V GENERAL PROVISIONS 5.1 Surrender of Possession'. If any of the property is sold under this Deed of Trust, Grantor shall immediately surrender possession to the purchaser. If Grantor fails to do so, Grantor shall become a tenant at sufferance of the purchaser, subject to an action for forcible detainer. 5,2 Recitals. Recitals in any Trustee's deed conveying the property will be presumed to be true. 5.3 'Election of Remedies. Proceeding under this Deed of Trust, filing suit for foreclosure, or pursuing any other remedy will not constitute an election of remedies. 5.4 Superior Lien. Subject to the terms of this Deed of Trust, this lien shall remain superior to liens later created even if the time of payment of all or part of the Note is extended or part of the property is released. * 5.5 Application of Payments. If any portion of the Note cannot be lawfully secured by this Deed of Trust, payments shall be applied first to discharge that portion. Page 4 33-4 5.6 'Condemnation. Grantor assigns to Beneficiary all sums payable to or received by Grantor from condemnation of all or part of the property, from private sale in lieu of condemnation, and from damages caused by public works or construction on or near the property. After deducting any expenses 'incurred, including attorney's fees, Beneficiary may release any remaining sums to Grantor or apply such sums to reduce the Note. Beneficiary shall not be liable for failure to collect or to exercise diligence in collecting any such sums. 5.7 Usiiry. Interest on the debt secured by this Deed of Trust shall not exceed the maximum amount of nonusurious interest that maybe contracted for, taken, reserved, charged, or received under law; any 'Interest in excess of that maximum amount shall be credited on the principal of the debt or, if that has been paid, refunded. On any acceleration or required or permitted prepayment, any such excess shall be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded. This provision overrides other provisions in this and all other instruments concerning the debt. 5.8 Context. When the context requires, singular nouns and pronouns include the plural. All pronouns include the male, female and neuter genders. 5.9 Assignment. This Deed of Trust shall bind, inure to the benefit of, and be exercised by successors in interest of all parties. Grantor may expressly assign its interest in the Property subject to the liens and obligations under the Note and this Deed of Trust, and the assignee shall assume the same, at which time, Beneficiary releases Grantor from any of the obligations under this Deed of Trust and the Note, and Grantor shall have no further obligations under the Note and this Deed of Trust. 5.10 Partial Release. Any part of the Property may be released by Beneficiary without affecting the lien hereof against the remainder of the Property. .5.11 Headiness. The headings contained in this Deed of Trust are included for convenience of reference only and are in no way intended to describe, interpret, define or limit the scope intent or substance of this Deed of Trust or any provision hereof. 5.12 Governing Law. This Deed of Trust shall be governed by and construed and enforced in accordance with the laws of the State of Texas without giving effect to any conflicts -of -law rule or procedure which would refer the matter to another Jurisdiction. 5.13 'Notice. All notices, requests, demands and other communications required or permitted to be given hereunder shall be deemed to have been duly given if in writing and delivered personally or mailed first class, postage prepaid, registered or certified United States mail, to such address as provided below. Page 5 33-5 IN WITNESS WHEREOF, the undersigned executes this Agreement as _of the date of the acknowledgment set forth below, but to be effective as of the Effective Date. GRANTOR: EAST A DEVELOPMENTS, L.P. By: GSDB Management, L.L.C., its General Partner By: Garson Silvers Manager THE STATE OF TEXAS § COUNTY OF HARRIS § This instrument was acknowledged before me on th day of October, -2008, by East A Developments, L.P., by GSDB Management, L.L.C., its General Partner, by Garson 141114 611 6 PAMELA Notary JOANN* LEVER fell• Public, St EstER ate. Of Texas My Commission �() EX I Fes P, i JU 08, 2© N6TARY -PUBLIV., AYA ADDRESS OF GRANTOR: 1001 Usener Houston, Harris County, Texas 77007 MAILING ADDRESS OF TRUSTEE: Askins & Askins, P.C. 702 We Fairmont Parkway LaPorte, Texas 77571 ADDROF BENEFICIARY: 604 We tkrmont Parkway La Porte, Harris County Texas 77571 AFTER RECORDING, RETUR-N TO; AKY PROMON HERE 4N RSSMISIK ULL RENTAL. OR VE OF THE DESCRIBED REAL PROPERTY BECAUSE OF COLOR OR RACE IS INVALID AND UNENFORCEABLE UNDER FEDERAL LAW. THE STATE OF TEXAS COUNTY OF HARRIS I hereby ce* tat Ibis �Mment was FILED In fie Number Sequence on be date and at to be stamped hereon by me; and was dull RECORDED. In lhe Official Pubk Reords of Real Property of Hatt Cwt, Tax on OCT 3 1 2008 Page 6 COUNTY CLERK HARRIS COUNTY, TEXAS 33-6 Awl 0 M 0 RELEASE OF LIEN THAT the undersigned, the legal and equitable owner and holder of that one certain promissory note hereinafter described, for and in consideration of the full and final payment of all indebtedness secured by the hereinafter lien or liens, the receipt of which is hereby acknowledged, has released and discharged, and by these presents releases and discharges, the hereinafter described property from all liens held by the undersigned securing said indebtedness, to -wit: Date of Note: October 29, 2008 Amount of Note: $150,000-00 Executed by: East A Developments, LP Payable to: La Porte Economic Development Corporation Recording References: Deed of Trust: 20080542456 Property Description: All of Lots 6, 71 81 91 10, and the West fifty-six and four tenths (56.4) feet of Lots 11, 12 and 13, in Block One Hundred Ninety -Eight (198) of TOWN OF LA PORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 8, page 16 of the Map Records of Harris County, Texas. Date: M 1 2009. La P0( te is n D el By: Ron Bot &oKs,'.Mnage ment Corporation STATE OF TEXAS § COUNTY OF HARRIS § ` instrument was acknowledged before ore me on the 14-- day of This Inst g �'. 2009, by Ron Bottoms, Manager of La Porte Economic Development Corporation, a Texas non profit corporation, on behalf of said entity. Aft- -ANL- Ofi 10.2013 � AFTER RECORDING RETURN TO: L4C Neta y Public, State of Texas PREPARED IN THE LAW OFFICE OF: ASKINS & ASKINS, P.C. P.O. Box 1218 LaPorte, TX 77572-1218 Secure Mailbox - View Message Anlegy.Bank f Texas . i c es 1. ` j r e M rli lho x MESSAGES VIEW MESSAGE Inbox SUBRIO : t: 175 Wire Advice '42009032700005379* Sent Items FROM:%viretransfernotification@zbcorp.cam TO: R1NEHARTP@LAP0RTETX.G0V Search SENT: Fri 27 filar 2009 13:39:55 MDT Compose f:XmItES: Mon 06 Apr 2009 13:39:55 MOT f -rf F 00K if &' Reply Reply to All Forward Delete dove to Folder... Manage Folders ACr_ta1INT 1014> Preferences AmegyBank Change Password of Texas Wire Confirmation Transaction Type: Credit Transaction Reference Number: 2009032700005379 Account Name: CITY' OF LA PORTE GENERAL OPERATING ACCOUNT,AT N PHYL 504 W FAIRMONT PKWY Transaction Pasting Time: ****/23/2713:33:22 Transaction Amount: 15V83.70 USD Rate: 0. Rate Type: Direct Transaction Amount in Base Currency:153,1$3.70 USD Debit Party Infonnation: *A/* * O* *0021 JPll ORGAN CHASE BRIM NA NEVA YORK, N'Y Sender's Reference: 3816600086JO Originating Party Information: / #*a*'5l02 STEWART TITLE OF HOUSTON ESCROW ACCT i 4700 W SAM HOUSTON PKWY N STE 170 HOUg"1' N Tib. 77041-8210 Move EXHIBIT 35 Page 1 of 2 SIGN OUT ? HELP litips://secui-e-maii.amegybank.com/messenger/amegy/t%y 3/27/2009 Secure Mailbox - View Menage Credit Party Information: D►/****N 02088/ CITY OF LA PORTE GENERAL OPERATING ACCOUNT,ATTN PHYL 604 W FAIRMONT PKWY 1A PORTR TX 77571-6215 77571 Originator To Beneficiary Information: GF NO 09108323109-117 SAN JACINTO Additional Information; IMAD - 0327BiQGC04Co047560327i525F of/0327L4B74B3Coo208503271525FToi Copyright 1997-2001 Tumble cad Communications Corp. All Rights Reserved t:npysigilt IIJ91.2001 Tumblenveed Communications Coop. All Rights Reserved Page 2 of 2 llttps;llsectireMMail.ainegybank.conVmesseilgerlamegylt%y iiserrlUserPtirl.do?x= d-3886210-ToAUOU 3/2712009 Auly 20, 20*10 1401 Fairi-n-ont Par -k -way a, . -, - -X 7-5771 . ' If 7 -orte Of Lia P A nk Amegy Bank N.A. of Texas 1401 Fairmont Parkway La Porte, TX 77571 James W. Prickeft Senior Vice President Tel: 713.232.5801 Commercial Lending Fax: 713.571.5007 james.prickett@amegybank.com 24 Hour Accessline: 713.235.8810 www.amegybank.com :q.g. I . greed: up - on --pcedu res V-Ve. ha`kre eng' -ed the CPA fir'M,'Beft- Harris Pechao-e-k., LLLF to' . a* p�rfprm ziin p.:.r e7ngagemeen--t. As a 'art of t h: P Is eng-agement, please fumls.h directly to th-em .the aet` fX m of the accoun Nlder(s) for the flow"ng w1re, tran-s-fer' 0 2 Da. -I -ed Trans,felr.:- Max.ch 27, .0-9 2). Am-ouM`of Tran-sfer. 163,70 3) -Accaurnt. -nurribeer tri n-s--ferr-ed to:: 0-0.0031'2088 -Actaount Name- ,.ity Transaction Refeebb. ce Niumber The of Ih......e �Wfrb-, traba f'r n, q -sll v. + S �� lei, tie. tbrf atelnl Originator.: Srtewart Title of Houston GF#1303003264 Completed by: Jo%es W Prickett SerI or j C.e R. 1 P-0 .. ... .... ..... 4 Amggy Bank N.A./LaPorte Office 4 yo fter comote-tire the sheets il nec;lnlss-ar�t)-a...nd si-q a an -d in... ur nlna d: •+ -a,fi rel 'y, please m--ibil it directiv; to., LLLP, c/o S'....teph-ah.'Ife-E., H+a-..&Is,--GPA, 73:0 North Post .0 -a -k Rd, Suite- .4-0-1, Ho.---ust--on, Texas: 77024, Inthe.en-blared teAum envelopl�., very t ru 1-Y yours � zz. . . . . . . . . . . . . .40 P-1- Ar- -8.el Dolby, D� -t.cvr ofFin- -d Dity f1a. Porte, Texas: 36-1 A. U.S.DEPARZMENT OF. -HOUSING 6ND URBAN DEVELOPMgHT B.TYPE OF LOAN OMB No. 2502-0265 1. E 2 FHA 2. C 3 FMHA 3. E 3CONV. UNINS. 4. E SVA 5. C 3CONV. INS. 6. FILE NUMBER: 08105646 7. LOAN NUMBER: 8.-MTr,. INS. CASE NO.: C.NOTE: This form is furnished to give you a statement of actual settlement costs. Amounts paid to and by the sctdemont agent are shown. Items markod- ('P.o.o. *) were paid outside the closing: they are shown here for information purposcs and am not includod in the totals, D. NAME OF BORROWER: LA PORTS ECONOMIC DEVELOPMENT CORPORATION ADDR.tSS: E. NAMIS OF SELLER: LA PORTE 5 POINTS PROPERTIES, L.P. ADDRESS.- SELLER TIN: F. NAUM OF LENDER: ADDRESS: G.PROPMX Y LOCATION,. ALL OF BLK 199, TOWN OF LAPORTE, VOL. 8 PG 16 MRHCT BROADWAY AND A & SAN JACINTO TX H. SETTLEMENT AGENT: STEWART TITLE COMPANY CLOSER: PAM LESTER PHONE NUMBER: 0713) 688-4300 ADDRESS: 9434 OLD KATY ROAD, SUITE 230 HOUSTON p TEXAS 77055 SETTLEMENT AGENT TN: 74-0923770 PLACE OF SETTLEMENT: STEWART TITLE ADDRESS! 1900 NORTH LOOP WEST, STE 650 HOUSTON, TEXAS 77018 PHONE NUMBER: (713) 688-4300 'I.SETTLEMENT DATE CLoming date: 10129/08 Proration date: 10/29/08 1. SUMMARY OF BORROWER'S TRANSACTION X. SUMMARY OF SELL33RIS TRANSACTION 100. GROSS AMOUNT DUE FROM BORROWER; 400. GROSS AMOUNT DUE TO SELLER: 101. Contraot sales prl= 150 000.00 401. Contract sales price 150,000.00 102. Personal propeM 402. Pers6nal property 103. Settlement char es to borrowar(line 1400) 3,749.00 403. 104. 404. 105. 405. Adjustments for items paid by seller in advance: Adjustments for itzzns paid for sallor in advance:' 106. Ci /town taxes to 406. Ci/town taxes to 107. County taxes to 407. Count taxes to 108. Assessments to .Z 408. Assessments to 109. Maintenance to 409. Maintenance to 110. School/Taxes to 410. School/Taxes to Ill. 411. 112. 412. 120. GROSS AMj2jjNT DUE FROM BORROWER: 1531,749. 0 420. GROSS AMOUNT DUE TO SELLER: 150,000.00 200. AMOUNTS PAM BY OR IN BEHALF OF BORROWER: 500. REDUCTIONS IN AMOUNT DUE TO SELLER: 201. !7c osit or earnest mope y 501. Excess deposit(sm instructions) 202. Principal amount of now loan(s 502. Settlement chLwjcs to sellergine 14D0) 1,734.95 203. Existing loan s) taken subject to 503. Existing loan(s) taken sutjcct to 204, Commitment Fee 504. Payoff of first moMage loan 205. 505. Pa off of second mortgago loan 206. 506. 207. 507. 208, 508. 209. 509. Adjustments fox; items un aid by seller: Adjustments for Items unpaid by seller: 210. Ci /town taxes to 510. Ci /town taxes to 211. Coung taxes 01/01/08 to 10/29/08 324.44 511. Cour taxes 01/01/08 to 10/29/08 324.44 212. Assessments to 512. Assearnants to 213. School/Takcs to 513. Sebool/Taxes to -- --- 214. 514. Maintenance to 215. 515. 216. 516. 217. 517. 218. 1519. 519. 219. 220. TOTAL PAID IRYMOR BORROWER: 324.44 520. TOTAL REDUCTION IN AMOUNT; 2,059.39 300. CASH AT SETTLEMENT FROM/TO BORROWER: 600. CASH AT BETTLEUMNT TOIFROM SELLER: 301, Grow amount due from bprrower(linc 120) 153.749.00 601. Gross amount due to seller(line 420) 1501000.00 302. Less amounts paid by/fbr borrowSEq!R! 220) 324.44 602, Less total reductions in arnotmt due seller line 520) 2,059.39 303. CASH [X MpM j r Tol 13ORROWE1t: 153,424.56 603. CASH[X TO] f FROPM SELLER:- 147 940.61 Oct -28-2049 02:47pm From-AMNS & ASK#NS, PC 261 471 2047 NRO P.007/020 F-624 +� tu•i�;r►a i re: i na y r rroNi�� t YIOt EaJ mA Itt1,►�,i�l S�i�Ltt9 At tfi � a t,p I # b�ii t toY iC �r�ta W bbbefF h is o tiuo Ind b4�!! hitt �ttil �� rU r4R;lp and fit m m ata mjao or, 4 19cout orb, me h Ihit �otae a. [ ��� t�n�y �t � h,►rr� too V41d It C4PY Of D-1 SC-0Cmtnl SUIDA L /O'N r I3a►na�►rit jubruAu &Id% chi$ Mrtrwl. �i .0 toot i� �tv i : e�rstr pct ur�t o t�r�a ct�oa, cIVnd or wii! C.0 ljp4t NA ds ba Mbursed DAM SEE PAGE 3 FOR $103NATURFS, W ATTLYcAB �'VAl IEN{3: [ �# 4b 3c,4awsrt ty mate hlit ,iumMeDu is M's lJr%lh!d sotel vA EMS of Aoy 6mr 3i,rallf form. a fine 4flti MOMMM Por 0MIlf Mu: TiVa IS: V.S. Code 544doIy IDOI mad Se *A 1010. 37-2 Oct -20-2008 42:441n F r Dm-ASKM & ASK I NS r PC 281 411 DO T-880 P-008/026 P-524 Peke 3 t# 44 afrxce to Me Noa 0810864 6 CERTIFICATION IFICATION Stiller, 6 ano Furah"erye algnntor$ hKOA Ocknowledges hi LA, PORTE TAS. OFFICE PO BOX 1849 LA PORTE TX 775721849 Phone: (281) 471-5020 2/25/09 HCAD Number 024-004-099-0001 LA PORTE ECONOMIC DEVELOPMENT CORP 604 W FAI RMONT PKWY LA PORTE, TX 77571-5215 Ifr. Legal. Description 151 S BROADWAY ST LTS 1 THRU 9 BLK 19 9 LA PORTE * * DELINQUENT TAX STATEMENT TAX YEAR, BASE TAX PENALTY,/ INT OTHER TOTAL B ..M4 Nr rw+ •rr 08 OLP 99.84 6.99 .00 105. 08 ILP 186.32 13.04 .00 199. TOTAL 08 285.16 20.03 .00 306. Total Due 286.16 20.03 .00 305. Total amount due if paid during the month of February 306. March 31�. April. 317. This is a statement of your delinquent REAL PROPERTY as of 02/25%09. ON JULY IST ALL UNPAID TAKES ARE TURNED OVER TO DELINQUENT TAX .ATTORNE FOR COLLECTION AND ARE ALSO SUBJECT 1PO AN ADDI'T'IONAL COLLECTION PENALTY CURRENTLY IN THS AMOUNT OF 2 0 * r WITH THE EXCEPTION OF THE CITY OF MORGAN' S POINT, WHICH HAS AN ADDITIONAL PENALTY IN THE AMOUNT OF 151k. IF THIS PROPERTY IS AFFECTED BY BANKRUPTCY THE TAX YEARS SUBJECT TO THE BANKRUPTCY IS IN'F'ORMATIONAL ONLY, Wire Transfer Ditty Review EXHIBIT 39 Page 1 of I Phyllis Rinehart (A) Accepted on: Oct 28, 2008 at 02:56:04 PM City of La Porto Send Date., Oct 28, 2008 604 W Fairmont Parkway La Porte, TX 77571 Debit Bank: 175 - Amegy Bank Credit Bank: 111000614 M BANK ONE, N.A. Debit Account: 0000312088 - City of La Porte Genl Oper Credit Account: 656526102 - STEWART TITLE COMPANY ESCROW Acct ACCOUN 4700 W SAM HOUSTON PKWY, STE 140 HOUSTON, TEXAS 77041 Debit Currency: USD - US Dollar Credit Currency: USD - US Dollar Debit Amount: 153,424,56 Credit Amount: 153,424.56 Template ID: 312088 .1 Approvers originator -to- line 1 - GF#08108646 Beneficiary: Entry CustlUser: 176LAPORTE - PHYLLIS Entry, y Oct 28, 2008 - 02:56-.,05 PM DatelTime: Charges: Shared Bank Trace #: 2008302000663 Cast Pending #: 00OObO Addd Approvers Required: I In order to submit a Money Transfer request on the account numbers described above, approval is required. Please press the print button on your browser to generate a hard copy of this wire transfer request, INTERNATIONAL FOREIGN CURRENCY WIRE ALERT - When selecting a beneficiary bank, please ensure that you select a SWIFT code that ends In XXX. This will route your wire In the currency you select. If you select a SWIFT code that does not end In XXX, please roview the target bank Information displayed In addition to the beneficiary bank Information. If the target bank Is a domestic bank the transfer will occur In US dollars, not your designated currency. For ANY questions concerning wires, pleaso contact TM Customer Service at 713-235- 8805. 39-1 .,,itti)so//wNv-�v.amec!vtreastirvmanagemeiit.com/amegv/flowctl.cfm?n=771248584142365063&event=conf.. 10/28/2008 7s, PURCHASE A.ND SALE AGREEMENT THIS PURCHASE AND SALE AGREEMENT (this "Agreement") is entered into by and between LA PORTE 5 POINTS PROPERTIES, L.P., a Texas limited partnership ("Seller"), and LA PORTE ECONOMIC DEVELOPMENT CORPORATION, a Texas non-profit corporation ("Purchaser"), as of the Effective Date (as hereinafter defined). Agreement. For and in consideration of the mutual benefits enjoyed by each of the parties to this Agreement, Seller agrees to sell and convey to Purchaser, and Purchaser agrees to purchase and accept conveyance of, the Property (as hereinafter defined) pursuant to the terms and conditions herein set forth. The Property. The property which is the subject of this Agreement is the fee simple title in and to that certain real property, as more particularly described on Exhibit "A" attached hereto, together with all improvements, fixtures, equipment, and other personal property owned by Seller thereon, and located on or about or used in connection with said real property, if any, and all of Seller's right, title, and interest, if any, in and to all easements, tenements, hereditaments, privileges, and appurtenances in any way belonging or relating to the foregoing, including, without limitation, (i) any land to the midpoint of the bed of any highway, street, road, or avenue, open or proposed, in front of, abutting, or adjoining such land, (ii) any land lying in or under the bed of any creek, stream, bayou, or river running through, abutting, or adjacent to such land, (iii) any riparian, appropriative, or other water rights of Seller appurtenant to such land and relating to surface or subsurface waters, (iv) any oil, gas, or other minerals or mineral rights relating to such land or to the surface or subsurface thereof (v) any strips, gores, or pieces of property abutting, bounding or which are adjacent or contiguous to such land, and (vi) all easements, right-of-ways, rights of ingress, or egress and reversionary interests benefitting such land (collectively, the "Property"). 3 Purchase Price. Seller agrees to accept and Purchaser agrees to pay as consideration for the sale of the Property (the "Purchase Price"), subject to the terms of this Agreement, an amount equal to ONE HUNDRED FIFTY THOUSAND DOLLARS AND NO CENTS ($150,000.00). 4 Seller's Title. Ten (10) days following the Effective Date, Seller, at its sole cost and expense, shall furnish to Purchaser a Commitment for Title Insurance covering the Property prepared by Stewart Title Company (the "Commitment"), addressed to Purchaser, pursuant to which the Title Company shall commit to issue to Purchaser a Texas Owner's Policy of Title Insurance ("Title Policy"). 5 Survey. Purchaser acknowledges that Sellerhas provided its mostrecent survey of the Property. Any further surveys will be done at Seller's sole cost and expense. 6 Documents Relating to the Property. Fifteen (15) days following the Effective Date, Seller, at its sole cost and expense, shall deliver to Purchaser true and correct copies of the following documents and materials (collectively, the "Due Diligence Materials"): 6.1 any existing environmental reports concerning the Property in Seller's possession or under :its direction and control; 6.2 copies of all tenant leases concerning the Property; 6.3 copies of all service contracts related to the Property; 6.4 copies of all insurance policies concerning or related to the Property; and 6.5 copies of all building plans and specifications related to the property. On -Site Inspections. Until the Closing Date or earlier termination of this Agreement, Purchaser may, at Purchaser's expense, conduct all on-site inspections of the Property determined by .Purchaser to be necessary or appropriate to determine whether the Property is suitable for, Purchaser's intended use, including, without limitation, the testing and inspection of the Property (and its subsurface) for any environmental contamination and for its suitability for development, the taking of ground water and core samples, soil tests, topographical and fault studies, and all other surveys, studies, tests and analysis desired by Purchaser. Seller hereby grants to Purchaser and its designated agents or contractors the right to enter upon the Property to perform such inspections, tests, and other studies; provided, however, that (i) Purchaser shall repair any material physical damage or alteration to the Property resulting therefrom and (ii) PURCHASER SHALL INDEMNIFY, DEFEND, AND HOLD SELLER, HARMLESS FROM AND AGAINST ANY DAMAGE, CLAIM, CAUSE OF ACTION, LIABILITY, COST (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES, AND COURT COSTS) OR OTHER OBLIGATION (collectively, "Entry Claims") CAUSED BY PURCHASER'S ENTRY UPON, INSPECTION OF, ALTERATION OF, TESTING OF, AND/OR DAMAGE OF THE PROPERTY, INCLUDING ANY SUCH ENTRY CLAIMS ARISING FROM THE NEGLIGENCE OF PURCHASER, PURCHASER'S AGENTS, CONTRACTORS, EMPLOYEES, OR ANY OTHER PERSON WHO IS CAUSED BY PURCHASER TO HAVE ANY CONTACT WHATSOEVER WITH THE PROPERTY, OR SUCH ENTRY CLAIMS ARISING IN STRICT LIABILITY BY ANY SUCH PERSONS. The obligation of Purchaser to indemnify Seller under this Section shall survive the Closing or the earlier termination of this Agreement. Permitted Encumbrances. "Permitted Encumbrances" means (i) taxes and assessments for the year 2008 and later, and any taxes and assessments which may arise from the change in land ownership or usage; (ii) any matters which a survey or physical inspection would disclose; (iii) the ordinances, zoning, restrictions, and similar regulations imposed by the City of La Porte or any other federal, state, or municipal authority of competent jurisdiction; and (iv) all matters of record in the office of the County Clerk of Harris County, Texas, to the extent the same are valid, subsisting, and affect the property in question. Warranties and Representations of Seller. Seller makes the following representations and warranties, all of which are true and correct as of the Effective Date, which shall be true and correct on the Closing Date (as hereinafter defined). 9.1 to the best of Seller's knowledge and belief, Seller has good, indefeasible, and insurable fee simple title in and to the Property, free and clear of all liens other than the Permitted Encumbrances; 9.2 to the best of Seller's knowledge and belief, Seller has not granted to any person, firm, or entity, other than Purchaser, any right to purchase, the Property or any portion thereof which remains outstanding as of the Effective Date or which shall remain outstanding as of the date the same is conveyed to Purchaser, and there are no parties in possession of any portion of the Property; 9.3 to the best of Seller's knowledge and belief, there- are no property agreements, warranties, permits, or other agreements relating to the ownership, operation or use of the Property other than those disclosed to Purchaser by Seller; 9.4 to the best of Seller's knowledge and belief, Seller has received no notice (and has no other knowledge) of any pending or threatened condemnation, special assessments, or similar proceedings affecting the Property; 9.5 Seller has full power and authority to enter into this Agreement and to assume and perform all of its obligations hereunder, and the execution and delivery of this Agreement and the performance by Seller of its obligations hereunder requires no further action or approval in order to constitute this Agreement as a binding and enforceable obligation of Seller; and 9.6 Seller is not a "foreign person" as defined in Section 1445 of the Internal Revenue Code. 10 Warranties and Representations of Purchaser. Purchaser makes the following representations and warranties, all of which are true and correct as of the Effective Date, and which shall be true and correct on the Closing Date (as hereinafter defined). 10.1 Purchaser represents and warrants to Seller that Purchaser has been duly authorized to enter into this Agreement on the terms and conditions of this Agreement, that this Agreement is fully binding and enforceable against Purchaser, and the person executing this Agreement on behalf of Purchaser has the authority to do so; 10.2 Purchaser is duly organized and legally existing under the laws of the State of Texas, or can legally conduct business in the State of Texas; and Q� 10.3 Purchaser is represented by counsel of its own selection and is not in a significantly disparate bargaining position with Seller. 11 Additional Covenants of Seller. Until the Closing, Seller covenants and agrees as follows: 11.1 Seller shall not commit any waste of the Property and shall keep the Property in substantially the same condition as its current condition, ordinary wear and tear excepted; and 11.2 Seller will promptly advise Purchaser in writing of any material changes, additions, deletions, or modifications in or to any of the Due Diligence Materials to be delivered to Purchaser, and shall provide Purchaser with true, correct and complete copies of such changes, additions, deletions or modifications. 12 Condemnation. 12.1 In the event any proceeding should be commenced for the taking in condemnation or under the power of eminent domain *of all or any portion of the Property (a "Condemnation Proceeding"), Seller shall promptly give to Purchaser written notice of, and full information concerning, such Condemnation Proceeding and shall thereafter keep Purchaser fully informed concerning such Condemnation Proceeding. If a Condemnation Proceeding occurs prior to the Closing, Purchaser shall have the right to terminate this Agreement. Upon any termination of this Agreement, both parties shall be released from their obligations hereunder, except as to those obligations that are expressly to survive the termination of this Agreement. 12.2 If Purchaser does not elect to terminate this Agreement as a result of a Condemnation. Proceeding, and the Property is purchased by Purchaser while such Condemnation Proceeding is pending, then Purchaser shall be substituted for Seller as a defendant in such proceeding. In the event such Condemnation Proceeding is concluded while Seller is still the owner of the Property and Seller receives the condemnation award, then the Purchase Price for the Property shall be reduced by the amount of the condemnation award which is attributable thereto. If Seller has not received the condemnation award at the tim a of Closing, then the Purchase Price shall remain unchanged., and Seller shall assign to Purchaser all of the right, title and interest of Seller in such condemnation award. Seller agrees that Purchaser shall have the right, at Purchaser's expense, to participate in any Condemnation Proceeding. 13 Closinx. 13.1 As used in this Agreement, the term "Cooper Property" means land in. Harris County, Texas, consisting of all of Lots 6-8 and the North 18 feet of Lot 9, Block 198, Town of La Porte, as recorded in the Map Records of Harris County, Texas Volume 8, Page 16. As used in this Agreement, the term "Retail Property" means land in Harris County, Texas, consisting of the South seven (7) feet of Lot 9, all of Lot 10, the Vest fifty-six and four tenths (56.4) feet of Lots 11, 12 and 13 of Block 198 of the TOWN DP LA PORTE, as recorded in the Map Records of Harris County, Texas Volume 8, Page 16. 13.2 The consummation of the purchase and sale of the Property (the "Closing") shall take place at Stewart Title Company, 1900 North Loop West, Suite 600, Houston, Texas 77018 (the "Title Company"), at mutually agreed upon time on or before September 23, 2008 (the "Closing Date"). 13.3 At the Closing, Seller, at its sole cost and expense, shall deliver to Purchaser (or to the Title Company in escrow for delivery to Purchaser upon consummation of the purchase and sale provided for herein) the following closing documents (collectively, the "Closing Documents"): 13.3.1 A Special Warranty Deed for the Property (the "Deed") executed by Seller, duly acknowledged and in form for recording, substantially in the form attached hereto as Exhibit "C", which Deed shall convey to Purchaser, subject to the Permitted Exceptions and "AS IS" condition, good, indefeasible and insurable fee simple title to the Property, free and clear of all liens, encumbrances, covenants, conditions, restrictions, right-of-ways, easements and other matters affecting title, except the Permitted Encumbrances; 13.3.2 the Title Insurance Policy; 13.3.3 Seller's affidavit in a form reasonably acceptable to Purchaser and Seller, as required by Section 1445 of the Internal Revenue Code; 13.3.4 possession of the Property to Purchaser in accordance with the terms of this Agreement; 13.3.5 consents in the form attached hereto as Exhibit "B" for the Cooper Property and. Retail Property executed by East A; 13.3.5 evidence, in form and content satisfactory to Purchaser and the Title Company, that the persons executing the instruments delivered at Closing on behalf of Seller have the authority to bind Seller to perform its obligations set forth therein; and 13.3.7 Such other documents and items as are contemplated to be delivered by Seller to Purchaser at the Closing pursuant to the other provisions of this Agreement. 13.4 At Closing, Purchaser shall execute all documents to be executed by Purchaser and deliver to Seller (or to the Title Company in escrow for delivery to Seller) the remaining portion of the Purchase Price (less any credits to which Purchaser is entitled pursuant to the terms hereof). The failure of Purchaser to fully fulfill all of its obligations under this Section shall be an Event of Default. 13.5 After the Closing, neither party hereto shall have any further rights, duties or obligations to the other pursuant to this Agreement other than those arising pursuant to the provisions hereof that are expressly to survive the Closing and those arising pursuant to the documents executed and delivered at the Closing. 13.6 The obligation of either party is contingent upon the execution of a lease by Purchaser, as tenant, and East A, as landlord, of the Retail Property at a rental rate of $1.00 per square foot per month, for a term of three (3) years, and under any other terms as East A and the Purchaser may agree. 13.7 Simultaneous with Closing, Purchaser shall loan to East A Developments, L.P. ("East A") the sum of $150,000.00 for the purchase of the Cooper Property under the terms of the promissory note attached hereto as Exhibit "D" ("Promissory Note'). Such loan shall be secured by a lien against Cooper Property and Retail Property; such lien being evidenced by the deed of trust attached hereto as Exhibit "E" (the "Deed of Trust"). East A shall, at Closing, (i) close on the purchase of the Cooper Property from Wade Cooper (at such time all liens must be released from the Cooper Property) in accordance with the terms of that certain Commercial Contract -- Improved Property by and between East A and Wade Cooper, (ii) execute the Promissory Note and Deed of Trust, (iii) execute the consent attached hereto as Exhibit "B", (iv) execute a Special Warranty Deed in the form attached hereto as Exhibit "F", and (v) obtain a Mortgagee's Title Insurance Policy for Seller for the Cooper Property and Retail Property(which may be paid by the seller of the Cooper Property). East A's obligations under this Agreement are contingent upon Purchaser's performance of all obligations under this Agreement (including those to Seller). East A shall be subrogated to all rights of Seller under this Agreement, including any remedies, claims, offsets, and defenses, and without limiting the generality of the foregoing, may offset any sums EastA owes under the Promissory Note with any sums Purchaser owes East A and/or Seller under this Agreement. 14 Closing Costs. 14.1 Seller agrees to pay for the cost of the Owner's title policy premium, all charges for tax certificates, all charges for the preparation and recordation of any releases or instruments required to clear Seller's title for conveyance in accordance with the provisions of this Agreement, and one-half (1/2) of any escrow fee charged by the Title Company. 14.2 Purchaser agrees to pay all charges for the recordation of the instruments conveying title to the Property, one-half (112) of any escrow fee charged by the Title Company, the costs of any recording fees which Seller is not obligated to pay above, the cost of any rollback taxes or similar fee resulting from the transfer of the Property or changed use of the Property; and all other fees payable by Purchaser under this Agreement. 14.3 All other costs, charges and expenses in connection with each closing shall be allocated between Purchaser and Seller as specified in this Agreement, or absent such specification, in accordance with the customary' practices in Houston, Harris County, Texas. 15 Property Taxes. All property taxes assessed against the Property for the year 2008 and beyond are the responsibility of Purchaser. I 16 Remedies. 16.1 Purchaser will be in default if any of the following occurs ("Event of Purchaser Default"): 16.1.1 Purchaser fails to perform any covenant in this Agreement; 16.1.2 any representation or warranty of Purchaser is untrue or becomes untrue; or 16.1.3 Purchaser (1) becomes insolvent; (2) makes a transfer in fraud, of creditors; (3) makes an assignment for the benefit of creditors; (4) files- a'petitioin under any section or chapter of the Federal Bankruptcy Code, as amended, or under any similar law or statute of the United States or any State thereof; (5) is adjudged bankrupt or insolvent; or (6) becomes subject to an appointed'receiver or trustee. 16.2 Upon the occurrence of an Event of Purchaser Default, Seller shall notify Purchaser of such default in accordance with the notice provisions of this Agreement, and Purchaser shall cure such Event of Purchaser Default within ten (10) days of the same. Upon the expiration of such ten (10) days, Seller may exercise any one or more of the following remedies to the extent they are not inconsistent: 16.2.1 terminate this Agreement and neither party will be further obligated hereby; 16.2.2 seek specific performance of any obligations of Purchaser hereunder; or 16.2.3 seek any relief provided at law or in equity. 16.3 Seller will be in default if any of the following occurs ("Event of Seller Default"): 16.3.1 Seller fails to perform any covenant in this Agreement; 16.3.2 any representation or warranty of Seller is untrue or becomes untrue; or 16.3.3 Seller (1) becomes insolvent; (2) makes a transfer in fraud of creditors; (3) makes an assignment for the benefit of creditors; (4) files a petition under any section or chapter of the Federal Bankruptcy Code, as amended, or under any similar law or statute of the United States or any State thereof; (5) is adjudged -bankrupt or insolvent; or (6) becomes subject to an appointed receiver or trustee. 16.4 Upon the occurrence of an Event of Seller Default, Purchaser shall notify Seller of such default in accordance with the notice provisions of this Agreement, and Seller shall cure such Event of Seller Default within ten (10) days of the same. Upon the expiration of such ten (10) days, Purchaser may exercise any one or more of the following remedies to the extent they are not inconsistent: 16.4.1 terminate this Agreement and neither party will be further obligated hereby; 16.4.2 seek specific performance of any obligations of Seller hereunder; or 16.4.3 seek any relief provided at law or in equity. 17 Real Estate Commissions. Each party hereto represents to the other that it has not authorized any broker or finder to act on its behalf in connection with the sale and purchase hereunder and that such party has not dealt with any broker or finder purporting to act on behalf of any other party. Each party hereto agrees to indemnify and hold harmless the other party from and against any and all, losses, liens, claims, judgments, liabilities, costs, expenses or damages (including reasonable attorneys' fees and court costs) of any kind or character arising out of or resulting from any agreement, arrangement or understanding alleged to hav**e been made by such party or on its behalf with any broker or finder in connection with this Agreement or the transaction contemplated hereby. This paragraph shall survive the Closing or any termination of this Agreement. 18 Notices. All notices, requests or permissions required or permitted to be given to either Purchaser or Seller under the terms of this Agreement shall be sufficient if they are in writing and mailed registered or certified mail, return receipt requested, or delivered in person, as follows: To Purchaser: LaPorte Economic Development Corporation City of La Porte, Texas 604 W. Fairmont Parkway LaPorte, Texas 77571 Attention: lion Bottoms, City Manager with copy to: Askins and Askins, P.C. . _ ) ��"W. Fairmont Parkwa ),A- TO t-' � �� —7 Attention: Clark T. Askins To Seller: La Porte 5 Points Properties 1001 Usener Houston, Texas 77007 With a copy to: Benjamin P. Miller Attorney and Counselor at Law 4900 Woodway Drive, Suite 517 Houston, Texas 77056 Tei: 713-892-5400 Fax: 713-892-5401 bpmiller82@gmail.com 19 Effective Date. The "Effective Date" means the date of acknowledgment of receipt of a fully executed copy of this Agreement by the Title Company as provided below. The party offering the Agreement may withdraw the offer at any time prior to its acceptance by the party to whom this Agreement is offered. 20 Miscellaneous. 20.1 This Agreement shall be construed and interpreted in accordance with the laws of the State of Texas . 20.2 Time is of the essence as to all matters contained in this Agreement. 20.3 If the final day of any time period or limitation set out in any provision of this Agreemeht falls on a Saturday, Sunday, or legal holiday recognized by the United States government or the State of Texas, then and in such event the time of such period or limitation shall be extended to the next day which is not a Saturday, Sunday or such legal holiday. 20.4 In the event of any controversy, claim or dispute between the parties arising from or relating to this Agreement (including, but not limited to, the enforcement of any indemnity provisions), the prevailing party shall be entitled to recover reasonable costs, expenses and attorneys' fees. For all purposes of this Agreement and any other documents relating to this Agreement, the terms "attorneys' fees" or "counsel fees" shall be deemed to include paralegals and legal assistants' fees, and wherever provision is made herein or therein for the payment of attorneys' or counsel fees or expenses, such provision shall include, but not be limited to, such fees and expenses (and any applicable sales taxes thereon) incurred in any and all judicial, bankruptcy, reorganization, administrative or other proceedings, including appellate proceedings, whether such fees or expenses arise before proceedings are commenced or after entry of a final judgment. 20.5 This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be an original, but such counterparts shall together constitute one and the same instrument. 20.6 This Agreement may not be modified or amended except by a subsequent agreement in writing signed by both Seller and Purchaser. Purchaser and Seller may waive any of the conditions herein or any of the obligations of the other party hereunder, but any such waiver shall be effective only if in writing and signed by the party waiving such condition or obligation. 20.7 This Agreement, includingthe exhibits, schedules, and attachments attached thereto (all of which shall be deemed incorporated into this Agreement by reference), constitutes the 20.8 20.9 20.10 20.11 entire agreement and understanding between the parties hereto and supersedes all prior and contemporaneous agreements and understandings of the parties in connection therewith. No statements, agreements or understandings, representations, warranties or conditions not expressed in this Agreement shall be binding upon the parties hereto, or shall be effective to interpret, change or restrict the provisions of this Agreement unless such is in writing signed by the party against whom enforcement thereof is sought. No oral agreements exist between the parties. If any provision of this Agreement or application to any party or circumstances shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this Agreement or the application of such provision to such person or circumstances, other than those as to which it is so determined invalid or unenforceable, shall not be affected thereby, and each provision hereof shall be valid and shall be enforced to the fullest extent permitted by law. The captions in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit or describe the scope of this Agreement or the scope or content of any of its provisions. All exhibits described herein and attached hereto are fully incorporated into this Agreement by this reference for all purposes. Except as expressly set forth herein or called for herein or called for in any of the instruments attached as exhibits hereto, SELLER MAKES NO OTHER WARRANTIES OR REPRESENTATIONS of any kind or character, express or implied, with respect to the Property, its physical condition, income to be derived therefrom or expenses to be incurred with respect thereto, or with respect to information or documents previously furnished to Purchaser or furnished to Purchaser pursuant to this Agreement, or with respect to Seller's obligations or any other matter or thing relating to or affecting the same, and there are no oral agreements, warranties or representations collateral to or affecting the Property except as may otherwise be expressly set forth herein. Notwithstanding anything contained herein to the contrary, this Section shall survive the Closing or any termination of this Agreement. PURCHASER ACKNOWLEDGES THAT THE CONVEYANCE OF THE PROPERTY IS SPECIFICALLY MADE "AS -IS" AND "WHERE -IS" WITH ALL FAULTS, WITHOUT ANY REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED (EXCEPT AS TO TITLE AS LIMITED IN THIS AGREEMENT), INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF FITNESS FOR ANY PARTICULAR PURPOSE, HABITABILITY, SUITABILITY, TENABILITY, OR MERCHANTABILITY OR ANY OTHER WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE TEXAS BUSINESS AND COMMERCE CODE, UNDER THE LAWS OF THE STATE OF TEXAS, OR OTHERWISE. PURCHASER ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, NEITHER SELLER NOR ANY OF ITS AGENTS HAVE MADE, AND SPECIFICALLY NEGATE AND DISCLAIM, ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF .ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, OF, AS TO, CONCERNING, OR WITH RESPECT TO, (i) THE VALUE, NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING, WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY, (ii) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH MAY BE CONDUCTED THEREON, (iii) THE HABITABILITY, MERCHANTABILITY, MARKETABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR, PURPOSE OF THE PROPERTY, OR (iv) ANY OTHER MATTER WITH RESPECT TO THE PROPERTY. PURCHASER SHALL RELY SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER OR ITS AGENTS OR, CONTRACTORS EXCEPTAS CONTAINED IN THIS AGREEMENT. SELLER SHALL NOT BE LIABLE OR BOUND IN ANY MANNER, BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY OR THE OPERATION THEREOF, FURNISHED BY ANY PARTY SM PURPORTING TO ACT ON BEHALF OF SELLER, EXCEPTAS CONTAINED IN THIS AGREEMENT. 20.12 Purchaser acknowledges that the Property may contain one or more underground storage tanks thereon. Purchaser shall assume all liability for such tanks, all responsibility for the removal of such tanks, and all costs associated therewith. 20.13 Purchaser shall not have the right to assign its interest in this Agreement without obtaining the prior written consent of Seller. Purchaser hereby agrees that any assignment by Purchaser in contravention of this provision shall be void and shall not relieve Purchaser of its obligations and liabilities hereunder. 20.14 This Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their heirs, successors and assigns. Whenever in this Agreement a reference is made to any of the parties hereto, such reference shall be deemed to include a reference to the heirs, legal representatives, successors and assigns of such parties. 20.15 Purchaser is hereby notified as to the following: Seller makes no representations or warranties as to the existence of or applicability of any honi6owners' associations. However, restrictive covenants governing the use and occupancy of the property and a dedicatory instrument governing the establishment, maintenance, and operation of this residential community may have been or will be recorded in the Real Property Records of the county in which the property is located. Copies of the restrictive covenants and dedicatory instrument may be obtained from the county clerk. Seller makes no representation as to whether membership may be required presently or in the future in any such homeowners' association. Seller makes no warranties or representation as to the applicability, enforceability, and/or existence of any restrictive covenants, and Purchaser acknowledges that Purchaser has not relied on any representations,, warranties, and/or materials made, provided, or delivered by seller. Purchaser acknowledges that it has used its own due diligence to research and investigate any homeowners' associations and/or Restrictive Covenants, their applicability, enforceability, existence, and affect on the feasibility of any use Purchaser is contemplating. 20.16 Additional Notices.. 20.16.1 Purchaser should have an abstract covering the Property examined by an attorney of Purchaser's selection, or Purchaser should obtain a title policy. 20.16.2 If'the Property is situated in a utility or other statutorily created district providingwater, sewer, drainage, or flood control facilities and services, Chapter 49, Texas Water Code, requires Seller to deliver and Purchaser to sign the statutory notice relating to the tax rate, bonded indebtedness, or standby fees of the district before final execution of this contract. 20.16.3 Notice required by Section 13.257 of the Texas Water Code: "The real property, described in Exhibit "A", that you are about to purchase may be located in a certificated water or sewer service area, which is authorized by law to provide water or sewer service to the properties in the certificated area. If your property is located in a certificated area, there may be special costs or charges that you will be required to pay before you can receive water or sewer service. There may be a period required to construct lines or other facilities necessary to provide water or sewer service to you property. You are advised to determine if the property is in a certificated area and contact the utility service pkovider to determine the cost that you will be required to pay and the period, if any, that is required to provide water or sewer service to your property. The undersigned purchaser hereby acknowledges receipt of the foregoing notice at or before the execution of a binding contract for the purchase of the real prope*rty described in the notice or at closing of purchase of the real property." The real 'property is described in Exhibit "A" of this Agreement. 20.16.4 If the Property is located outside the limits of a municipality, the Property may now or later be included in the extraterritorial jurisdiction ("ETJ") of a municipality and may now or later be subject to annexation by the municipality. Each municipality maintains a map that depicts its boundaries and ETJ. To determine if the Property is located within a municipality's ETJ, Purchaser should contact all municipalities located in the general proximity of the Property for further information. 20.16.5 Brokers are not qualified to perform property inspections, surveys, engineering studies, environmental assessments, or inspections to determine compliance with zoning, governmental regulations, or laws. Purchaser should seek experts to perform such services. Selection of inspectors and repairmen is the responsibility of Purchaser. IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the date set forth below, but shall be effective as of the Effective Date. SELLER: LA PORTE 5 POINTS PROPERTIES, L.P. By: GSBS La Porte Management, L.L.C., its General Partner By: _' Garson Silvers Manager le5-. D ate: 14 5;—:; ____7 ---------- �� - PURCHASER: LA PORrPE,, ECONOMIC EVELOPMENT CORPORATION 'L 'j J1 - it I -If "atiicia Muston, President Date: q"- 10 D ATTEST: Secretary of the Corporation EAST A: EAST A DEVELOPMENTS, L.P. By: GSDB Management, L.L.C., its General Partner By:Z' Garson Silvers Manager Date: The undersigned, as escrow agent, hereby acknowledges receipt of a fully executed original of this Agreement. Received this clay of September, 2008 STEWART TITLE COMPANY By: Name: Title: EXHIBIT "A" Legal Description of the Property: TRACT 1: Lots 1 thro'ugh 9 of Block 199 of the TOWN OF LA PORTE, as recorded in the Map Records of Harris County, Texas Volume 8, Page 16 TRACT 2: All of Seller's right, title and interest in and to the abutting 100' wide public right -of-way known as San Jacinto Street E� A, . _m, RESEARCH STAFF , SNC. Member of Public Record Retrievers Network Member of Title Agents of America THIS REPORT 15 NOT TITLE INSURANCE. By ecccgmwe of this mpm It is undowcod that the Ilabliisy hereunder is limited to the amount paid for same, This report is issued for the use of and shall inure to the benefit of ft party ragaasting same and may not be givo to, or used by, any third party. THIS REPORT IS ISSUED with the express understanding, evidenced by acceptunco of same, that the undersiped docs not undertake or give or expr m any opinion as to the validity of the tidz to the property desca ibod, but is a reporting limin as to the inssrua wets attached hcmw and found ofrvcard pestaWng to the. said pr+opesty. The inf oration provided is gus=hed to be as accurate as ma amble cam can make it as of the cenif flon date and we assume no responsibility for updalft the information unless puxsim to a specific request. 'PHIS REPORT IS BASED ON •PUBLIC INFORMATION CONTAINED IN THE RECORDS STATED HEREIN, WHICH ARE COWILED, MAINTAINED AND TNDEXED BY THE AOENCY P.S) NAMED HERMN. WE CANNOT INDEPENDENTLY VERIFY THE COMPLETENESS, OR ACCURACY, OF THE UNDMYING RECORDS. This rept n is nottitle insurance. Ira poticy of title insurance is pxnchascd, any liability th =*r shall be. determined solely by the terns of sack policy. • ... .. ww- w �r��...ry�w•ww�r�.r�r ..... �.♦ • •. �r.wrr r. •.• r.•rr... • . . . •. . ... . .. .. ...�t�..r.r ...�__....« t».. �..»... ...-.-- ..... _ . �w.w� . . ..r TITLE REPORT for Knox W. AsIdns Askins & Askins, PX Client Reference City of La Porte -Hants Abstrames Initials HCOGW TRSi Control # C-200-140730 Examiner's initials GBW/AM Jurisdiction Harris County, Texas Certification From: 08/03/2007 To: 03/24/2010 Owner of Record Listed In Last Title Deed Is: East A. Developments, LP SPECIAL WARRANTY DEED to East A. Developments, LP Executed by: Wade Cooper Executed on: 07/3012007 Filed for record on: 08/43/2007 Recorded under: 20070477563 Remarks ■ Vendor's Lien $59,999.00; Released by 20070632971 SPECIAL WARRANTY DEED to LaPorte Economic Development Corporation Executed by: Ease A. Developments, LP Executed on: 10129/2048 Filed for record on: 10/3112008 Recorded under: 20080542457 Remarks ■ --- CORRECT WARRANTY DEED to East A. Developments, LP Executed by: Wade Cooper Executed on: 030/2009 Filed for record on: 03/3 1 /2009 Recorded under: 20094131182 Remarks • Correction of 20080542455 Approval: Your RveeaXCA StAft ,5718 Hewitt + Houston, Texas 77092-5125 Telephone: 713-+688--3584 4 Facsimile: 713-686-1121 www.researchotaffonline.com Certified: 03/'24/2010 TRSI Control 1: C- 10 130 Page: 1/3 go Ak TNF- RESEARCH STAFF, INC. Member of Public Record Retrievers Network Member of Ting Agents of America Correct Description of Property: All of Lots d, 71 81 91 10 and the Nest fifty-six and four tenths (56.4) feet of Lots 11,12 and 13, in Block One Hundred !ninety -Bight (198) of TOWN OF LA PORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 8, Page 16 of the Map Records of Harris County, Texas. Transcribedit om Client's Requev Subject to: • Real Property Liens DEED OF TRUST for 528,916.00; due 0613012411 Executed by: East A. Developments, LP Trustee: Knox W. Askins Beneficiary: City of LaPorte Development Corporation Executed on: 07/0112009 Filed for record on: 07/1412009 Recorded under: 20490310843 Remarks @ — DEED OF TRUST for $110,000.00 Executed by: Bast A. Developments, LP Trustee: Frederick B. Cull Beneficiary: Gayle Investments Executed on: 10/t7/2007 Filed ror record on: 1011912007 Recorded under: 20070632972 Remarks • --- DEED OF TRUST for S 157,000.00; due 04101/2010 Executed by: East A. Developments, LP Trustee: Thomas Clarke Beneficiary: Meal Property Mortgage and Investment Co., Tne. Executed on: 032612049 Filed for record on: 03/3112409 Recorded under. 20090131183 Remarks Transfer executed on 03/2612009, filed on 03/31/2009, under document #20090131185; Gayle Investment Company Approval: Yaur Research Steffi 5718 Hewitt 4 Houstont Texas 77492--5125 Telephone: 713-699-3584 4 Facsimile! 713-688-1121 wwW. researchstaf famine . cora Certified: 83/24/2010 TRSI Control #: Cw 100730 Page: 2/3 Ilk T;13 RESEARCH STAFF, Member of Public Record Retrievers Network Member of Title Agents of America LTEN AFFIDAVIT for $4,300.00 Filed by: Halligan's Foam Coatings of Houston, Inc. Filed against East A. Development, LP Filed for record on: 10/09=09 009 Recorded under: 20090463380 • Personal Liens whieh may affect title Mo Abstracts of Juetment or Tax .dens (10 year search) located as o, f the date of this review. • Property Tax Information In Texas, all taxes are assessed in October of each year. In 7'eacas, all tires are due andpayable by 01131 of each year, ager which they are delinquent CAD Account # 024-004-098-0006 Taxpayer Name East A Developments LP Situs Address 109 Sart Jacinto St. CAD Land Value $'7,375.00 (2009) 7,375 Square feet CAD lmpry Value $171,749.00 (2009) No Exemptions Status of payment of taxes ( )HAS ( x )NOT been reviewed • Notes to Client Additional documera affecting tale to this property are listed as follows. a Affidavit of Compledon executed on 10107/2009, filed on 10/4912009, under document 920090463381. a TMS TITLE REPORT DOES NOT INCLUDE review of the status of (til, Gas and Minerals inter evs. THE RESEARCH SWAP', INC. Control # +C-100730 CertWication Date: 03/24/2410 Approval: Your Rese=ch Start 5718 Hewitt Houston, Texas 77032-5125 Telephone: 713-698-3584 Facsimile: 713-688-1121 ww. researchstoffenline . Ecom Certified: 03/24/2010 TR$1 Control $: C- 100730 Page: 313 so M A t I NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ,ARE A NATURAL PERSON, YOU MAY REMOTE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIFTER'S LICENSE NUMBER, SPECIAL WARRANTY DEED 20070477563 WITH VENDOR'S LIEN 08103i2007 RP2 s2440 THE STATE 4F TEXAS § § KNOW ALL MEN BY THESE PRESENTS: COUNTY OF HARRIS § That, WADE COOPER (hereinafter called "Grantor", whether one or more), for and in consideration of the sum of Ten Dollars ($10.00) and other good and valuable consideration to Grantor this dayaid and agreed to be aid b EAST A DEVELOPMENTS, L.P.(hereinafter called P � p Y "Grantee", whether one or more), the receipt and sufficient of which is hereby acknowledged, and � P y � the further consideration of the execution and delivery by Grantee of the following: That certain promissory note ("Note") of even date herewith in the original principal j balance of FIFTY-NINE THOUSAND, NINE HUNDRED NINETY•NfNE AND 00/1 OATHS DOLLARS ($59,999.00) payable to the order of 4011 NASA ROAD 1, LTD. ("Lender1), bearing interest and being payable as therein provided, which Note is secured by a vendors lien herein reserved, and is additionally secured by a Deed of Trust of even date herewith executed by Grantee to BENJAMIN P. MILLER, TRUSTEE, reference to which is here made for all purposes; N.- has GRAFTED, SOLD and CONVEYED and by these presents does GRANT, SELL and CONVEY unto Grantee all of the following described real and personal property situated in Harris County, Texas, to -wit: Land consisting of the South seven (7) feet of Lot 9, all of Lot 10, the west fifty-six , and four tenths (56.4) feet of Lots 11, 1 sand 13 of Block 198 ofthe TOWN OF LA PORTE, as recorded in the Map Records of Harris County, Texas Volume 8, Page 16 (the "Subjtct Property"). This conveyanee is executed by Granton and accepted by Grantee subject to all matters of record in the office of the County Clerk of Harris County, Texas and/or apparent on the ground, to the full extent sane are valid and pertain to the Subject Property (the "Permitted Exceptions") TO HAVE AND TO HOLD the Subject Property, together with all and singular the rights and appurtenances thereto in anywise belonging unto Grantee, and his, her, its or their heirs, legal representatives, successors and assigns, forever; and Grantor does herebybind himself herself, itself or themselves and his, her, its or their heirs, legal representatives, successors and assigns, to : M_, 0 F64 _a6aw 21 mA / RICHARD CROW 41-4 $ T TITLE COMPANY WARRANT AND FOREVER DEFEND, all and singular, the Subject Property unto Grantee, and his, her, its or their heirs, legal representatives, -successors and assigns, against every person whomsoever lawfully claiming or to claire the same or any part thereof, by, through and under Grantor, but not otherwise, and subject only to: (i) the Permitted Exceptions; (ii) real estate ad valorem taxes for the current year, and (iii) the liens herein described. But the express vendor's lien and superior title -are retained in favor of sender and his, her, its or their heirs, legal representatives, successors and assigns upon the Subject Property until the . Note and all other sums to accrue or to become payable thereunder shall have been paid in full in accordance with the face, tenor, effect and reading of the Note, whereupon this Geed shall become absolute. EXECUTED this the day of July, 2007. THE STATE OF TEXAS § COUNTY OF HARRIS § This instrument was acknowledged before me on July,,, 2007, by W,ade Cooper., MOL L. BROMSKY INA 7 x MY COMMISSION EXPIRES •�FdW4W 7, M I to Public in a d for elft' tate of Texas U0101 ADDRESS OF GRANTEE: 1041 Usener Houston, Texas 77049 s AFT R.EG ING, RETURN TO: COOP Sena in eller n a2 4900 o�dway Drive, Suite 17 Hous n, exas 77056 40 1MEMO �t • s� C1 ' +M IiMenTlient ReASllvecs. OatsonTa:t A DmIopmem. ILPT tt A SWD-Vendae % L1en.wpdv, AFTEA , RECORDING RETURN TO STEWART TITLE 1900 NORTH LOOP WE'S'T #5W 41-5 HOUSTON TEXAS 77018 .4M3 a x MYFM 1Hia1`Ap """'�a��Rl�DND �IEE�qYOF ��G�At ANN" —i� Cafes—w�it�iOiME$-, I�alr/bafaflts M'UaklNOW lJY/A*4fMrY AUG - 3 20D7 an t 1 `2008 54+2.4 5 7 ..:� 10131/2008&o RP3-, $24,06 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 AND INTEREST IN ASAI, PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER, Warrantu Dttb (Interest in Public sight -Of -Way) THE STATE OF TEXAS § § Know All Men By These Presents: COUNTY OF HARRIS § That EAST A DEVELOPMENTS, L, P,, a Texas limited partnership, ("Grantors", whether one or more), for and in consideration of the sum of Ten Dollars {$10.00} and other good and valuable consideration to Grantors this day paid by LA PoxTE ECONOMIC DEVELOPMENT CORPORATION, a Texas non-profit corporation ("Grantees", whether one or more), of Harris County, Texas, the receipt and sufficiency of which is hereby acknowledged, have GRANTED, BARGAINED, SOLD and CONVEYED and by these presents do GRANT, BARGAIN, SELL and corrvEY unto Grantees all of the real and tpersonal property situated in Harris County, Texas, to wit: All of Seller's right, title and interest in and to the 100' wide public «- right-of-way known as San Jacinto Street to the extent the same abuts Lots 6, 79 S, 9, 100 11, 12 and 13, in Block One Hundred Ninety -Eight (198) of TOWN OF LA POINTE, an addition in Harms County, Texas, according to the map or plat thereof recorded in Volume 8, Wage 18 of the Map records of Harris County, Texas (the "Subject Property"), This conveyance is executed by Grantors and accepted by Grantees subject to (i) taxes and assessments for the year 2008 and later, and any taxes and assessments which may arise from the change in land ownership or usage; (ii) any matters which a survey or physical inspection would disclose; (iii) the ordinances, zoning, restrictions, and similar regulations imposed by the City of Lia Porte or any other federal, state, or municipal authority of competent jurisdiction; and (iv) all matters of record in the office of the County Clerk of Harris County, Texas, to the extent the sane are valid, subsisting, and affect the property i n question. (collectively, the "Per ed E e too s"�. CROW P*? I I salki .; Ewp Ir TITLE COMPA10-Y tW 11 THE IMPROVEMENTS, IF ANY, LOCATED UPON THE SUBJECT PROPER ARE CONVEYED AND ACCEPTED "AS ISS', "H ERE IS", 'WITH ALL FAULTS", IN THEIR PRESENT CONDITION, OF ANY KIND, WHETHER EXPRESS OR IMPLIED, OTHER THAN THE EXPRESS WARRANTIES OF TITLE MADE HEREIN. THE. WARRANTIES OF HABITABILITY, SUITABILITY, TENABILITY, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPQSE, OR ANY OTHER WARRANTIES WHATSOEVER CONTAINED IN OR CREATED BY THE TEXAS BUSINESS AND COMMERCE CODE, TEXAS PROPERTY CODE, UNDER. THE LAWS OF THE STATE OF TEXAS, OR OTHERWISE, ARE EXPRESSLY DISCLAIMED. GRANTEE ACCEPTS ALL LIABILITY FOR ALL COSTS, LIABILITY, AND CLAIMS RELATING TO, OR RESULTING FROM, THE CONDITION OF THE SUBJECT PROPERTY, INCLUDING ANY UNDERGROUND STORAGE TANKS OR ENVIRONMENTAL HAZARDS THEREON, TO HAVE AND TO HOLD the Subject Property, together with all and singular the rights and appurtenances thereto in anywise belonging unto Grantees, their heirs, administrators, successors and assigns,' forever; and Grantors do hereby bind themselves, and their heirs, administrators, successors and assigns, to WARRANT AND FOREVER DEFEND, all and singular, the Subject Property unto Grantees, and their heirs, administrators, successors and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof, by, through or under Grantors, but not otherwise, and subject to the Permitted Exceptions and taxes for the current year and subsequent assessments for'prior years due to change in land usage or ownership. Except for any interest in that 1001 public right -o f -way known as San Jacinto Street, nothing in this Special warranty Deed shall be construed to convoy any right, title or interest in Lots S, 7, s, 8, 1.0, 11, 12 and 1.3, in Block One Hundred Ninety -Eight (198) of TOWN of LA PORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 8, Page 16 of the Map Record of Harris County, Texas. EXECUTED this th day of October, 2008. EAST A DEVELOPMENTS, L.P. By: GSDB Management, L.L.C,, its General Partner 1 � Carson Silvers, Manager "Grantors" THE STATE OF TEXAS § COUNTY OF HARRIS § A This instrument was acknowledged before me on thi� day of October, 200.8, by Garson Silvers, as manager of GSDB Management, L.L.C. as gene al partner of EAST A DEVELOPMENTS, L.P. de ,: paMFLa JoaHN iesrfa � Notary Publlc, State of Texas My Ccmmtsalon F.xplres auq► oe, zotz tary Public in the State of Te a ADDRESS OF GRANTEES: AFTER RECVDING, RETURN TO: 604 W. Fairmont Parkway Askins & Askins, P.C. La Porte, Texas 77571 742 W. Fairmont Parkway LaPorte, Texas 77571 21-WRICHM CROW SrrZWART TITLE COMPANY Im •, 1 ► ANY PING t KERE31t'I HO 1E3MIS THE WE R IKA USE CF TWE DESMSBREAL P1�r'f int BEC SI OF MOR 0R W � MALID AKD"FORCEAM UkIXR FUMI W. THE; STATE OF TEMS COUNTY OF KARRIS 114" CV* !`x3-6 0IMPI WN FILED h fit N ANI SM -010 45 h dih tai n ft be $211NIBertonlate 4fimpaRowdsalhoPWAYOttaz9lc Cam.Traito OCT 3 12008 J$D 4%oaf zf) 1� COUNTY CLERK MasRIs couNrr, TExns Elm =+ i+ NN c: �4 wn W �wMr mom �1i '• f 30(311..W9 4@47.-m $32soo NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU QQ((QP,JMAY REMOVE OR STRIAE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AND INTEREST IN REAL ,PROPERTY B1 FORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS; YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVERS LICENSE NUMBER., Correction General Warranty Deed with Vendor's Lien THE STATE OF TEXAS § § Know All Men By These Presents: COUNTY OF HARRIS § That WADE COOPER, an individual, ("Grantors", whether one or more), for and in consideration of the sum of Ten Dollars ($10,00) and other goad and valuable ' consideration to Grantors this day paid by EAST A DEVELOPmENTs, L.P., a Texas limited partnershiGranteee , whether one or more, of Harris County, Texas, the receipt and sufficiency of which is hereby acknowledged, and the further consideration of the execution and delivery by Grantees of the following: That certain promissory note ("Notel of even date herewith in the original principal sura of $150,000.00 payable to the order of La Forte Economic Development Corporation ("Loender), bearing interest and being payable as therein provided, which Note is secured by a vendor's lien herein reserved, and *s additionally secured by a Deed of Trust of even date herewith executed by Grantees to Knox Askins, Trustee, reference to which is here made for all purposes; and in consideration of the payment of the sum above mentioned, Grantor hereby transfers, sets over, assigns and conveys unto Lender, and his heirs, administrators and assigns, the vendor's lien and superior title herein conveyed, in the same manner and to the same extent as if the Note had been executed in Grantor's favor and assigned by Grantor to Lender without rwoourse; have GRANTED, BARGAINED, SOLD and CONVEYED and by these presents do GRANT, BARGAIN, SELL and CCNnY unto Grantees all of the real and personal property situated in Harris County, Texas, described ware particularly in ambit "W, attached hereto and incorporated by reference (the "Subject Property), 09 21-A/RYOHAW CROW J1 Page 4- ��MPAhTY STEWART TITLE V a a TO HAVE AND TO HOLD the Subject Property, together with all and singular the rights and appurtenances thereto in anywise belonging unto Grantees, their heirs, administrators, successors and assigns, forever; and Grantors do hereby bind themselves,. and their heirs, administrators, successors and assigns, to WARRANT AND FOREv Eft D ETEND, all and singular, the Subject Property unto Grantees, and their heirs, administrators, ,successors and assigns, against every person whomsoever lawfully claiming or to claire the same or any part thereof. But the express vendor's lien and superior title are retained in favor of Lender and his heirs, administrators and assigns, upon the Subject Property until the Note and all other sums to accrue or to become payable thereunder shall have been paid in full in accordance with the face, tenor, effect and reading of the Dote, whereupon this Beed shall become absolute. EXECUTED this the h day of March, 2009, but to be effective as of October 29, 2998 for all intents and purposes. AA Wade Cooper "Grantors" THE STATE OF TEXAS § COUNTY OF HARRIS § This instrument was acknowledged b f ore a ane on this Z�5- day of March 2009, by wade Cooper. WAND WGgW MY an Rolm Decomw 2010 ADDRESS OF GRANTEES: 1001 Usener Houston, Texas 771006 LAC� Notary Public in iffid for The State of Texas AYTER .RECORDING, RETURN TO: Page -2- 41-12 a. a Exhibit "A" to General Warranty Beed All of Lots 81 7, 8, and the North 1.8 feet of Lot S, in Block One Hundred Ninety -Eight (198) of TOWN OF IA PGRTE, an addition in Barris County, Texas, according to the map or plat thereof recorded in volume 8, Page 18 of the Map Records of Harris County, Texas, together with all improvements thereto. 0 Page •3!. 41-13 a CORRECTION RIDER This Correction Rider is made and incorporated into and shall be deemed to amend and supplement the General Warranty Deed with Vendor's Lien dated October 29, 2008 given by Wade Cooper ("Grantor") to East A Developments, L.P. ("Grantee"). In addition to the agreements made in the General Warranty Beed with vendors Lien, the Grantor and Grantee further covenant and agree as follows: 1. The General Warranty Deed with vendor's Lien to which this' correction rider is attached has been executed by Grantor for the purpose of correcting the General Warranty Deed with vendor's Lien filed of record under Clerk's File Dumber 20080542455 in the Harris County Deal Property Records, wherein a scrivener's error occurred in the legal description of the property. The correct legal description for the property shall read as follows: All of Lots 8, 7, 8, and the North 18 feet of Lot 9, in Block One Hundred Nm* ety-Eight (198) of TOWN OF LA PORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 8, Page 18 of the Map Records of Barris County, Texas, together with all improvements thereto. 2. That error or mistake has been corrected by the instrument to which this Correction Rider is attached. In all other respects, the General Warranty Deed with Vendor's Lien filed of record under Clerk's File Number 20080542455 in the Harris County Real Property Records is hereby confirmed and ratified. By signing below, Grantor and Grantee accept and agree to the terms and provisions contained in this Correction. Rider. Grantor, Grantee: East A Developments, L.P. /Z,,'.a zo -002 -A Wade Cooper By: GSDB Management, L.L.C., Its General Partner Aft Page 4w Elm By. Garson Silvc Its Manager THE STATE OF TEXAS § COUNTY OF HARRIS § This instrument was acknowledged before me on the day of March, 2009, by East A Develo mentg, L.P., by GSDB Management, L.L.C., its General Partner, by Carson s, MWARD EUGENE KING My comminion Expires aecomber It. 2010 y NOTARY PUBLIC STATE O ERAS THE STATE OF TEXAS § COUNTY OF HARRIS § This instrument was acknowledged before me on the ►. day of March 2009 b Wade Cooper, WAM EUGENE KING ��']'OTARY PLL TAT { EXAS my cornmIabon 9xvire►s ember 19p 2010 { 1: a\Qaat A DmIopmenta LP\2M MICo RefimacinoWwoction Daod wyd\03180 X71520 i �M a THS STI couwff�f �U"tjIROF �� rk NOVA WpMoua 041314W L4J�plttttOA h Iii � K11��I��Q. MAR 3 j OD "doof Af*A"Al 06UMi�`OktRK gARpig Ccnr uN.tEPS Page 05M 41-15 07 '.043R" .0 3R" f'I f2oil0 DE OF TRUST AND SECURITY AGREEMENT NOTICE OF CONVIDSMIALITY RIs: IF YOU ARB A NATURAL PERSON, YOU MAY 113"140V13 OR STRIKE ANY OF TKB FOLLOWING INPORMATION FROM THIS INSTRUNWT BRPORE IT IS PILED FOR RECORD IN THE PUBLIC RECORDS: YOUR S OCIn SECURITY NUMBER 05,,XDUR DRYVBR' S LI CENSS NUi BR Date. July 1, 2009 Grantor: BAST A DEV 13LOPMENTS , L . P . a Texas limited partnership Mailing Address: 1001 Usener, Houston, TX 77007 Trustee: KNOX W. ASKINS Mailing Address: P.O. Box 1218, La Porte, Texas 77572 Hen e f i c i ary : CITY OF LA PORTE DEVELOPMENT CORPORATION a Texas non-profit corporation Ma11ing Address: 604 West Pairmont Parkway, La Porte, TX 77571 Note (s) Date: July 1, 2009 Amount: $28j916,00 ' Maker: RAST A DEVELOPMENTS+ L,P. Payee. CITY OF LA PORTE DMMLOPPU NT CORPORATION Final Maturity Date: June 30 2011 Property (including any i rovem is) : All of Lots 6 and 7' n Block one Eundre Ninety -Bight ( 19 8) of TOWN OF LA PORTE, an addition in Harris count Texas, according to the trap or plat thereof recorded n Volume 8, Page 16 of the Map Records of Harris County, Texas For value received and to secure payment of the note,, Grantor conveys the property to Trustee in trust. Grantor warrants and agrees to defend the title to the property. if Grantor perfoxvw all the covenants and pays the note according to its texma , this Seed of trust shall have no further effect, and Beneficiary shall release it at Grantor's expense, FILED FOR RECORD 8:00 AM JUL in 2009 41-16 ��� grantor # a Obligations Grantor agrees to: 1. keep the property in good repair and condition; 2. pay all taxes and assessments on the property when due; 3, preserve the lien's priority as it is established in this deed of trust; 4. maintain, in a forth acceptable to Beneficiary, an insurance policy that: a. covers all improvements for their full insurable value as determined when the policy in issued and renewed, unless Beneficiary approves a smaller amount in writing; bo contains an 80t coinsurance clause; Co rovidee fire and extended coverage, including windstorm coverage; d. protects Beneficiary with a standard mortgage clause; e. provides flood insurance at any time the property is in a flood hazard area; and f. contains such other coverage as Beneficiary may reasonably require; 5* comply at all times with the requirements of the Sot coinsurance clause; S. deliver the insurance policy to Beneficiary. and deliver renewals to Beneficiary at least ten days before expiration; 7* keep any buildings occupied as required by the insurance pol icy; and 8. if this is not a first lien, pay all prior lien notes that Grantor is personally liable to pay and abide by all prior lien instruments. 8 ene f is i airy f s Rights 1. Beneficiary may appoint in writing a substitute or successor trustee, succeeding to all rights and responsibilities of Trustee. 2. If the proceeds of the note are used to pay y an debt secured by prior liens, Beneficiary is subrogated to all of the rights and liens of the holders of any debt so paid. 3. Beneficiary may apply any proceeds received under the insurance policy either to reduce the note or to repair or replace damaged or destroyed improveteents covered by policy. the olio . 4 . If Grantor fails to perfo= any of Grantor' s obligations, Beneficiary may perform those obligations and bre reimbursed by Grantor on demand at the place where the note is payable for any sums so paid, including attorneys fees, plus interest on those Bungs from the dates of payment at the rate stated in the note for matured, unpaid amounts, The sutra to be reimbursed shall be secured by this deed of trust. S. If Grantor defaults on the note or fails to perforin any of Grantor's obligations or if default occurs on a prior lien note or other instrument, and the default continues after Beneficiary gives Grantor notice of the default and the time within which it must be cured, '&a may be required by law or by written agreement, then Beneficiary may: a. declare the unpaid rincipal balance and earned interest on the mote immediately due; z Qin • a a • a a b. request Trustee to foreclose this lien, in which case Beneficiary or Beneficiary's agent shall give notice of the foreclosure sale as provided by the Texas Property Code as then amended; and c. purchase the property at any foreclosure sale by offering the highest bid and then have the bid credited on the note. war tee f s Duties 1f requested by Beneficiary to foreclose this lien.. Trustee shall: 1. either personally or by agent give notice of the foreclosure sale as required by the 'Texas Property Code as thew amended; 2 , sell and convey all or part of the prroprerty to the highest bidder for cash with a general, warranty bi M%g Grantor, subject to prior liens and to other exceptions to Conveyance and warranty + and 3, from the proceeds of the sale, pay, in this order: a. expenses of foreclosure, including a commission to Trustee of 5% of the bid; b. to Beneficiary, the full amount of principal, int ere s t , attorney's fees, and other charges due and unpaid; c . any amounts required by law to be paid before payment to Grantor; and d. to Grantor, any balance. General Provisions 1* if any of the property is sold under this deed of trust, Grantor shall immediately surrender poasession to the purchaser. If Grantor fails to do so, Grantor shall become a tenant at sufferance of the purchaser, subject to an action for forcible detainer. 2. Recitals in any Trustee's deed conveying the property will be presumed to be true. 3. Proceeding under this deed of trust, filing suit for foreclosure, or pursuing any other remedy will not constitute an election of remedies. 4. This lien shall remain superior to liens later created even if the time of payment of all or part of the note is extended or part of the property is released. So if any portion of the note cannot be lawfully secured by this deed of trust, payments shall be applied first to discharge that portion. 6.0 Grantor assigns to Beneficiary all sums payable to or received by Grantor from condemnation of all or part of the property, from private sale in Lieu of condemnation, and from damages caused by public works or construction on or near the property. After deducting any expenses incurred, including attorney' s fees , senef iciary may release any retaining sums to Grantor or apply ouch suras to reduce the note. Beneficiary shell not be liable for failure to collect or to exercise diligence in collecting any such sums, 7f, Grantor assigns to Beneficiary absolutely, not only as collateral, all present and future rent sad other income and K am w a receipts from the property. Leases are not assigned, Grantor warrants the validity and enf orceabii i ty of the as s ig61Mnt Grantor may as Beneficiary's licensee collect rent and other income and receipts as long as Grantor is not in default under the note or this dead of trust. Grantor will apply all rent and other income and receipts to payment of the note and performance of this dead of trust, but if the rent and other income and receipts exceed the amount due under the .note and dead of trust, Grantor may retain the excess* if Grantor defaults in payment of the nate or performance of this deed of trust, Beneficiary may temi.xnate Grantor's license to collect and then as Grantor ' s agent may rent the property if it is vacant and collect all rent and other income and receipts. Beneficiary neither has nor assumes any obligations as lessor or landlord with respect to any occupant of the property. Beneficiary nay exercise Beneficiary's rights and remedies under this paragraph without taking possession of the property, Beneficiary shall apply all rent and other income and receipts collected under this paragraph first to expenses incurred in exercising Beneficiary's rights and rem+ediao and thein to Granton a obligations under the note and this deed of trust in the order determined by Beneficiary. Beneficiary is not required to act under this paragraph, and acting under this paragraph does not waive any of Beneficiary's other rights or remedies, If Grantor becomes a voluntary or involuntary bankrupt, Beneficiary,' a filing a proof of claim in bankruptcy will be tantamount to the appointment of a receiver under 'texas law. S. Interest on the debt secured by this dead of trust shall not exceed the maximum amount of nonusurious interest that may be contracted for, taken, reserved, charged, or received under law; any interest in excess of that maximum amount shall be credited on the pri.nci.pal, of the debt or, if that has been paid, refunded. On any acceleration or required or permitted prepayment , any such excess shall be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded. This provision overrides other provisions in this and all other instruments concerning the debt. 9. When the context requires, singular nouns and pronouns include the plural, 10. The term *note" includes all suns secured by this deed of trust. 11. This deed of trust shall bind, inure, to the benefit of, and be exercised by successors in interest of all parties. 12. If Grantor and Maker are not the same person, the term * Grantor% shall include Maker, 13* if Grantor transfers any part of the property without Beneficiary's prior written consent, Beneficiary may declare the debt secured by this deed of trust immediately payable, In that event Beneficiary will, notif Grantor that the debt is payable; if it is not paid within th rty days after notice to Grantor, Beneficiary may without further notice of demand to Grantor invoke any remedies provided in this instrument for default, Exceptions to this provision for declaring the note due on sale or transfer are limited to the following a. creation of a lien or encumbrance subordinate to this deed of trust; 41-19 a a be creation of a purchase -money security interest for household appliances; c. transfer by devise, descent, or operation of law on the death of a joint tenant; and d. grant of a leasehold interest of three years or lees *ithout an option to purchase. 14. Grantor represents that this deed of trust and the note are given for the following purposes: In addition to the provisions herein,, Noteholder requires that all taxes due on property described herein be paid by January 15 of each and every year and that Grantor furnish to Noteholder the paid receipts of same by January 31 of each and every succeeding year thereafter until this Deed of Trust is of no further force or effect, CUTED o f f ect iVe July 1, 2 4 0 9. BAST A D PMBIrT S, L. P. By: GSDB MANAGEMUTt L.L.C. its General jartnerPartner Garson S Iver M a STATE OF TEXAS 5 5 COUNTY OF HARRIS I Thi a instrutment was acknowledged before ane on the $ day of duly, 2009, by Garson Silvers, Manager of GSDB MANAGEN , L.L.C. , General Partner of LAST A D LOPMENTS, , P . 0 j . Notary Public, State o Texas ,.•''•'yl , ROBIN A. EI, DRIDGE MY COMMISSION EXPIRES y Jur 1fi, X010 AFM RUCORDUG RZTM We AS IS & ASKINS , P . C . P.o. BOAC 1215 La Porte, TX 77572-1218 5 l A�tBD IN LM 07PICE of I AS KINS & AS KINE , P * C . P909 BOX 1218 La Porte, TX 77572w1218 PXCOnDRIVS Me,40. At tbO t438 Of Momdetion, thin inaslrumant w4v &tm d to bo insdequtnte fur than boat Rhut�Tap�iQ f0product�im ho�cou.a of its01.�tNjitY, .phat lbon or ptiata COPY, dfacotored papor* otc. All blachoign, Aatcotio= 611ci chanstr's WaIQ ptostdnt at Lhv tium U10 kwtUnuft WRP Dlod wd rwXrdML w a NoP"Vo"f*W afSTICI iHf SSE: EfNfAL0&iAfOFTnjf$p=RjAt 1Y PIMP WAUSE OFQL01 01 jACE �}�t G'kf 1 EJ4ttFU�IGERifD wWk THE STATE OF TUAS COUNTY OF KARRIS Icy W*10of MOW retFIB 0FMhotu*00olDidaV4tt� 1;iNl+r«o "I" d M tW)"MIKD I bI QftIh4iclM*dRutinpmjo" 02M. Tdu m JUL 14 2009 10 4O 41-2 ovn►n�caea� HARRIS P.i'9i IiJTV 7ervaw f NON -HOMESTEAD DEED OF TRUST AND SECURITY AGREEMENT NOTICE OF CONFIDENTIALITY RIGHTS; IF YOU AREA NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS (INSTRUMENT BEFORE ITIS FILED COR RECORD IN THE FUBI,IC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER, Date: October 1112007 Grantor: EAST A DEVELOPMENTS, LP Grantor's Mailing Address; 1001 Usener Houston, Texas 77009 ` Trustee: Frederick B. Cull Trustee's Mailing Address: P. 0. Box 550286 Houston, Texas 772554-0286 Beneficiary: Beneficiary's Address: The Indebtedness: GAGLE INVCSTMENTS P. O. Box 1405 Bellaire, Texas 77402 712(1? /19/200RPJ?6 ;iz Date: Of even date herewith. Original Principal Amount: ONE HUNDRED TEN THOUSAND AND NO/100THS DOLLARS ($110,000.00) Maker: EAST A DEVELOPMENTS, LA Payee: GAGLE INVESTMENTS Final Maturity Date: November 11, 2009 "Terms of Payment: $1,058.30 per month for 24 months as provided in the note, with the final payment due December 1, 2009. Property (including any improvements): the South 7 feet of Lot ?dine (9), all of Loi: Ten (10), and the 'Test 56.4 feet of Lots Eleven (11), Twelve (12), and Thirteen (13), in Block One Hundred Ninety - Light (198) of TOWN OF La PORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 8, Page 15 of the Map Records of Harris County, Texas, and commonly known as 117 San Jacinto, La Porte, Texas . NOWHOMSTEAD DEED of TRUST AND SECURITY AGREEMENT vo� 41-22 • Page I of ai-nrn cnaN � � c.t� .00 BT' 'Y'=TLE C� Exceptions to Conveyance and Warranty: For value received and to secure payment of the note, Grantor conveys the property to Trustee in trust. Grantor warrants and agrees to defend the title to the property. If Grantor performs all the covenants and pays the note according to its terms, this decd of trust shall have no further effect, and Beneficiary shall release it at Grantor's expense. Grantor's Obligations: Grantor agrees to: I . Keep the property in good repair and condition. 2. Pay all taxes and assessments on the property when due. 3. Preserve the lien priorities as established in this deed of trust. 4, 1Vlaintain, •in a form acceptable to Beneficiary, an insurance policy that: all is issued by a carrier legally admitted to do business in the State of Texas, and under the regulation and supervision of the r"exas Department of Insurance, and said policy shall contain lass payable clauses payable to the Beneficiary, showing a first pert in favor of Beneficiary. b, covers all improvements for their full insurable value as determined when the policy is issued and renewed, unless Beneficiary approves a smaller amount in writing; j contains an 80% coinsurance clause; do provides fire and extended coverage, including windstorm coverage; e. protects Beneficiary with a standard mortgage +clause# f, provides flood insurance at any time the property is in a flood hazard arca as determined in the absolute opinion of Beneficiary; and at contains such other coverage as Beneficiary may reasonably require. 5. Pay promptly when due all real estate and ad valorem taxes as well as any other assessments and charges which might be the basis for a lien against the subject property if not paid. 6. Deliver the insurance policy to Beneficiary and deliver renewals to Beneficiary at least ten days before expiration. 7, Deep any buildings occupied as required by the insurance policy; and 8. If this is not a first lien, pay all prior lien notes that Grantor is personally liable to pay and abide by all prior lien instruments. Beneficiary's bights l . Beneficiary may appoint in writing a substitute or successor trustee, succeeding to all rights and responsibilities of Trustee. NON-HoMSTEAD DEED OF TRUST AND SECURITY AGREEMENT Page 2 of 41-23 2. If the proceeds of the note are used to pay any debt secured by prior liens, Beneficiary is subrogated to all of the rights and liens of the holders of any debt so paid. 3. Beneficiary may apply any proceeds received under the insurance policy either to reduce the note or to repair or replace damaged or destroyed improvements covered by the policy. 4. If Grantor fails to perform any of Grantor's obligations, Beneficiary may perform those obligations and be reimbursed by Grantor on demand at the place where the nate is payable for any sums so paid, including attorney's fees, plus interest on those sums from the dates of payment at the rate stated in the note for matured, unpaid amounts. The sum to be reimbursed shall be secured by this deed of trust. 5. If Grantor defaults on the note or fail to perform any of Grantor's obligations or iF default occurs on a prior lien note or other instrument, and the default continues after Beneficiary gives Grantor notice of the default and the time within which it must be cured, as may be required by law or by written agreement, then Beneficiary may: a, declare the unpaid principal balance and earned interest on the note immediately dues b, request Trustee to foreclose this lien, in which ease Beneficiary or Beneficiary's agent shall give notice of the foreclosure sale as provided by the Texas Property Code as then amended; and Co. purchase the property at any foreclosure sale by offering the highest bid and then have the bid credited to the note. 6. If Grantor fails on demand to reimburse Beneficiary for the sums advanced, and such failure continues after Beneficiary ,gives Grantor notice of failure and the time within which it must be cured, as may be required by law or by written agreement, then Beneficiary may: 'Y ` a, request Trustee to foreclose this lien, in which Case, Beneficiary or �• Beneficiary's agent shall give notice of the foreclosure sale as provided by the Texas Property Code as then amended; and b. purchase the property at any foreclosure sale by offering the highest bid and then have the bid credited to the reimbursement of Beneficiary. Trustee's Duties: If requested by Beneficiary to foreclose this lien, Trustee shall: 1. Either personally or by agent give notice of the foreclosure sale as required by the Texas Property Code as then amended. 2. Sell and convey all or pan of the property to the highest bidder for cash with a general warranty binding Grantor, subject to prior liens and to other exceptions to conveyance and warranty. NON-HOMS'CEAD DEED 0F TRUST AND SECURITY AGREEMENT Page 3 of 36 3. From the proceeds of the sale, pay, in this order: a. expenses of foreclosure, including a commission to Trustee of 5% of the bid; b, to Beneficiary, the full amount of principal, interest, attorney's fees and other charges due and unpaid; C. any amounts required by law to be paid before payment to Grantor-, and d. to Grantor, any balance. General Provisions 1. If any of the property is sold under this deed of trust. Grantor shall immediately surrender possession to the purchaser. If Grantor fails to do so, Grantor shall become a tenant at sufferance of the purchaser, subject to an action for forcible detainer. 2. Recitals in any Trustee's deed conveying the property will be presumed to be true. 3. Proceeding under this deed of trust, filing suit for foreclosure, or pursuing any other remedy will not constitute an election of remedies. 4, This lien shall remain superior to liens later created even if the time of payment of all or part of the note is extended or part of the property is released. S. If any portion of the nate cannot be lawfully secured by this deed of trust, payments shall be applied first to discharge that portion. 6. Grantor assigns to Beneficiary all sures payable to or received by Grantor from condemnation of all or part of the property, from private sale in lieu of condemnation, and from damages caused by public works or construction on or near the property. After deducting any expense incurred, including attorney's fees, Beneficiary may release any remaining suras to Grantor or apply such sums to reduce the note. Beneficiary shall not be liable for failure to collect or to exercise diligence in collecting any such sums. 7. No sale under this deed of trust shall extinguish the lien created by this instrument. $. Grantor assigns to Beneficiary absolutely, not only as collateral, all present and future rent and other income and receipts from the property. Leases are not assigned. Grantor warrants the validity and enforceability of the assignment. Grantor may as Benelrciary's licensee, collect rent and other income and receipts as long as Grantor is not in default under the note or the deed of trust. Grantor will apply all rent and other income and receipt to payment of the note and performance of this deed of trust assumed, and Grantor may retain the excess. if Grantor defaults in payment of the nate or performance of this deed of trust assumed, Beneficiary may terminate Grantor's license to collect and then as Grantor's agent, may rent the property if it is vacant and collect all rents and other income and receipts. Beneficiary neither has nor assume any obligations as NON-HOMSTEAD DEED OF TRUST AND SECURITY AGREEMENT Page 4 of 6 41-25 w lessor or landlord with respect to any occupant of the property. Beneficiary may exercise Beneficiary's rights and remedies under this paragraph without taking possession of the property. Beneficiary shall apply all rent and other income and receipts collected under this paragraph, first to expenses incurred in exercising Beneficiary's rights and remedies, then to Grantor's obligations under the note and deed of trust assumed in the order determined by Beneficiary. Beneficiary are not required to act under this paragraph, and acting under this paragraph does not waive any of Beneficiary's other rights or remedies. If Grantor becomes a voluntary or involuntary bankrupt, Beneficiary's filing a proof of claim in bankruptcy will be tantamount to the appointment of a receiver under Texas law. 9. Interest on the debt secured by this deed of trust to secure assumption shall not exceed the maximum amount of nonusurious interest that may be contracted for, taken, reserved, charged, or received under law; any interest in excess of that maximum amount shall be credited on the principal of the debt or, if that has been paid, refunded. On any acceleration or required or permitted prepayment, any such excess shall be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded, This provision overrides other provisions in this and all other instruments concerning the debt. 10. when the context requires, singular nouns and pronouns include the plural. 11. The term note includes all sums secured by this deed of trust. 12. This deed of trust shall bind, inure to the benefit of, and be exercised by successors in interest of all parties. 13. If Grantor and Maker are not the same person, the term Grantor shall include Maker. Moreover, the terra Grantor shall include all Grantors, whether one or more. 14. This written loan agreement, and all other loan documents of even date, represents the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties 15. If in the Beneficiary's judgment, the Propgrty has materially decreased in value, or if the Beneficiary shall, at any time, deem that the value of the Property is inadequate to secure repayment of the Indebtedness, the Beneficiary shall notify the Grantor of this fact in writing, and Grantor shall within 30 days of such notice, either provide enough additional real property to secure and collateralize the Indebtedness, or reduce the total Indebtedness by an amount sufficient to satisfy the Beneficiary that its security for the Indebtedness is adequate. 16. Grantor represents that this deed of trust and the note are given for the following purposes: purchase money indebtedness, and to pay other loan related and business expenses. NON-HOMSTEAD DEED OF TRUST AND SECURITY AGREEMENT Rage 5 of!& EAST A DEVELOPMENTS, LP By: Ga on Silvers, Gene artner'- ACKNOWLEDGMENT STATE OF TEXAS § COUNTY OF HARRIS § 4 SWORN to and acknowledged before me by Garson S'lvers as t e act nd deed of EAST A DEVELOPMENTS, LP, on this the d ofOct r, 07. NOfA PUBLIC IN AND Z�° MM L BROWKY THE VATE OF TEXAS MY COWSSION EXPIRES 1% Febnuq 7, 20M 00 610 NON-HOMSTEAD DEED OF TRUST AND SECURITY AGREEMENT 41-27 Page 6 of 6 gram Page 6 of 6 0.4 r.n • 2009013 1.33 03/31/2009 RP2 $32M NON -HOMESTEAD DEED of TRUST AND SECURITY AGREEMENT NOTICE of CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OF THE FOLLOWING INFORMATION FROM THIS INSTRUMENT BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. Date: March�P 2009 Grantor, EAST• A DEVELOPMENTS, L.P. Grantor's Mailing Address: 1001 Usener ' Houston, Texas 77009 Trustee: Thomas Clarke Trustee's Mailing Address: P.O. Box 1155 Mineola, Texas 75773 Beneficiary: Real Property Mortgage & Investment Company, Inc. Beneficiary's Address: 4212 San Felipe, Suite 507. Houston, Texas 77027 The Indebtedness: Date: Of even date herewith. Original Principal Amount: ONE HUNDRED FIFTY-SEVEN THOUSAND AND NO/] 00 DOLLARS ($157,000.00) Maker: EAST A DEVELOPMENTS, LP Payee: Real Property Mortgage & Investment Company, Inc. Final Maturity Date: April 1, 2010 Terms of Payment, $1,741.21 per month for 12 months as provided in the note, with one final payment due April 1, 20100 Property (including any Improvements): Lots Six (6), Seven (7), Eight (8), and the adjoining forth 18 feet of Nine (9), in Block One Hundred Ninety-eight (198), of TOWN OF LAPORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in Volume 8, page 16 of the Map Records of Harris County, Texas, Exceptions to Conveyance and warranty: For value received and to secure payment of the note, Grantor conveys the property to Trustee in trust. Grantor warrants and agrees to defend the title to the property. If Grantor performs all the covenants and pays the note according to its terms, this deed of trust -shall have no further effect, and Beneficiary s all release it at Grantor's expense. G?# s. — - wL24Z3 21-A1 RICHARD CROW •STEWART TITLE COMPANY 41 1 28 Iaoj [A� a, a Grantor's obligations; Grantor agrees to: 1. Keep the property in good repair and condition, 2. Pay all taxes and assessments on the property when due. 3. Preserve the lien priorities as established in this deed of trust. 4, Maintain, in a form acceptable to Beneficiary, an insurance policy that. a. is issued by a carrier legally admitted to do business in the State of Texas, and under the regulation and supervision ref the Texas ,Deparlment of Insurance, and said pol icy shall contain loss payable clauses payable to the Benejklary, showing a first lien to favor of Beneficiary. b, covers all improvements for their full insurable value as determined when the policy is issued and renewed, unless Beneficiary approves a smaller amount in writing; C. contains an So% coinsurance clause; d. provides fire and extended coverage, including windstorm coverage; C, protects Beneficiary with a standard mortgage clause; f. provides flood insurance at any time the property is in a flood hazard area as determined in the absolute opinion of Beneficiary; and L contains such other coverage as Beneficiary may reasonably require. 5, Pay promptly when due all real estate and ad valorem taxes as well as any other assessments and charges which might be the basis for a lien against the subject property if not paid. 6. Deliver the insurance policy to Beneficiary and deliver renewals to Beneficiary at least ten days before expiration, . 7. Deep any buildings occupied as required by the insurance policy; and 81 If this is not a first lien, pay all prior lien notes that Grantor is personally liable to pay and abide by all prior lien instruments. Benefleiary's Rights I . Beneficiary may appoint in writing a substitute or successor trustee, succeeding to all rights and responsibilities of Trustee. 2. If the proceeds of the note are used to pay any debt secured by prior liens, Beneficiary is subrogated to all of the rights and liens of the holders of any debt so paid. 3. Beneficiary may apply any proceeds received under the insurance policy either to reduce the note or to repair or replace damaged or destroyed improvements covered by the policy, 4. If Grantor fails to perform any of Grantor's obligations, Beneficiary may perforin those obligations and be reimbursed by grantor on demand at the place where the note is payable for any suras so paid, including attorney's fees, plus interest on z 41-29 those sures from the dates of payment at the rate stated in the note for matured, unpaid amounts. The sung to be reimbursed shall be secured by this deed of trust. s. If Grantor defaults on the note or fail to perform any of grantor's obligations or if default occurs on a prior lien note or other instrument, and the default continues after Beneficiary gives Grantor notice of the default and the time within which it must be cured, as may be required by law or by written agreement, then Beneficiary may: a, declare the unpaid principal balance and earned interest on the note immediately due; • b. request Trustee to foreclose this lien, in which case Beneficiary or Beneficiary's agent shall give notice of the foreclosure sale as provided by the Texas Property Code as then amended; and C. purchase the property at any foreclosure sale by offering the highest bid and then have the bid credited to the note. 6. If Grantor fails on demand to reimburse Beneficiary for the sums advanced, and such failure continues after Beneficiary gives Grantor notice of failure and the time within which it must be cured, as may be required by law or by written agreement, thea Benef clary may, a. request Trustee to foreclose this lien, in which case, Beneficiary or Beneficiary's agent shall give notice of the foreclosure sale as provided by the Texas Property Code as then amended; and b, purchase the property at any foreclosure sale by offering the highest bid and then have the bid credited to the reimbursement of Beneficiary, Trustee's Duties: If requested by Beneficiary to foreclose this lien, Trustee shall; l . Either personally or by agent give notice of the foreclosure sale as required by the Texas Property Code as then amended. • 2. Sell and convey all or part of the property to the highest bidder for cash with a general warranty binding Grantor, subject to prior liens and to other exceptions to conveyance and warranty. I From the proceeds of the sale, pay, in this order: a. expenses of foreclosure, including a commission to Trustee of 5% of the bid; b, to Beneficiary, the full amount of principal, interest, attorney's fees and other charges due and unpaid; c. any amounts required by law to be paid before payment to Grantor; and d. to Grantor, any balance. General Provisions 1. If any of the property is sold under this deed of trust. Grantor shall immediately surrender possession to the purchaser. If Grantor fails to do so, Grantor shall become a tenant at sufferance of the purchaser, subject to an action for forcible detainer. I Recitals in any Trustee's deed conveying the property will be presumed to be true. 3. Proceeding under this deed of trust, filing suit for foreclosure, or pursuing any other remedy will not constitute an election of remedies. 4. This lien shall remain superior to liens later created even if the time of payment of all or part of the note is extended or part of the property is released. 5. If any portion of the note cannot be lawfully secured by this deed of trust, payments shall be applied first to discharge that portion. 6. Grantor assigns to Beneficiary all sures payable to or received by Grantor from condemnation of all or part of the property, from private sale in lieu of condemnation, and from damages Caused by public works or construction on or near the property. After deducting any expense incurred, including attorney's fees, Beneficiary may release any remaining sures to Grantor or apply such sums to reduce the note. Beneficiary shall not be liable for failure to collect or to exercise diligence in collecting any such suras. 7* No sale under this deed of trust shall extinguish the lien created by this instrument. 41431 g. Grantor assigns to Beneficiary absolutely, not only as collateral, all present and future rent and other income and e receipts from the Leases are not R assigned. Grantor warrants the validity and enforceabilityof the assignment. 's Grantor may as Beneficia licensee collect rent and other income and receipts Y rY � F i as long as Grantor is not in default under the note or the deed of trust. Grantor will apply all rent and other income and receipt to payment of the note and 1sF y F P Ym erformance of this deed of trust assumed, and Grantor may retain e c 1 p me , r y the excess. f Grantor defaults in payment of the note or performance of this deed of trust • assumed, Beneficiary may terminate Grantor's license to collect and then as Grantor's agent, may rent the property if it is vacant and collect all rents and other income and receipts. Beneficiary neither has nor assume any obligations as lessor or landlord with respect to any occupant of the property. Beneficiary may exercise Benef clary s right sand remedies under this paragraph without taking • possession of the property. Beneficiary shall apply all rent and other income and receipts collected under this paragraph, Beneficiary shall apply all rent and other income and receipts collected under this paragraph, in accordance with that certain Assignment of Rents of even date herewith from Grantor to Beneficiary, to which reference is hereby mad and such Assignment of Rents is hereby incorporated by reference. Beneficiary are not required to act under this paragraph, and acting under this paragraph does not waive any of Beneficiary's other rights or remedies. If Grantor becomes a voluntary or involuntary bankrupt, Beneficiary's fling a proof of claim in bankruptcy will be tantamount to the appointment of a receiver under 'T'exas law, 9. Interest on the debt secured by this deed of trust to secure assumption shall not exceed the maximum amount of nonusurious interest that may be contracted for, taken, reserved, charged, or received under law; any interest in excess of that maximum amount shall be credited on the principal of the debt or, if that has been 41431 paid, refunded. On any acceleration or required or permitted prepayment, any such excess shall be canceled automatically as of the acceleration or prepayment or, if already paid, credited on the principal of the debt or, if the principal of the debt has been paid, refunded. This provision overrides other provisions in this and all other instruments concerning the debt. 10. when the context requires, singular nouns and pronouns include the plural. 11. The term note includes all sums secured by this deed -of trust. 12. This deed of trust shall bind, inure to the benefit of, and be exercised by successors in interest of all parties, 13. If Grantor and Maher are not the same person, the term Grantor shall include Maker. Moreover, the term Grantor shall include all Grantors, whether one or more. 14. This written loan agreement, and all other loan documents of even date, represents the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous, or subsequent oral agreements of the parties. There are no unwritten oral agreements between the parties 15. If in the Beneficiary's judgment, the Property has materially decreased in value, or if the Beneficiary shall, at any time, deem that the value of the Property is inadequate to secure repayment of the Indebtedness, the Beneficiary shall notify the Grantor of this fact in writing, and Grantor shall within 30 days of such notice, either provide enough additional real property to secure and collateralize the Indebtedness, or reduce the total Indebtedness by an amount sufficient to satisfy the Beneficiary that its security for the Indebtedness is adequate. 16. Grantor represents that this deed of trust and the note are given for the following purposes: renewal and extension of prior business indebtedness and for additional capital to complete improvements to the subject property. EAST A DEVELOPMENTS, L.P. By: GSDB Management, L.L.G., Its general partner By;.."-- CARSON SILVERS, its ACKNOWLEDGMENT STATE OF TEXAS § COUNTY OF HARRIS § C: w SWORN to and acknowledged before nye by GARSON SILVERS as the act and deed of EAST A DEVELOPMENTS L.P. on this the da of March 20flO OAN ERStPAMELA JN�SNotery Publicne. pireMy commission �1 08120 4 9;0 1- /7e� 8120 ,. rA) /J Ar"R0 ION KWIRWHO RSTI CTS INE W RE914. OR USE OFTHE DEQ WIFAt THE STATE OF TEXAS COUNTY OF KARRIS 1"tv* lit" raorl ys ROM NAW $"X* 44216U W 401 fie "nomwtial; wwit 4,4RIC8T0(0.anoftlhAtwo 0till Fwal119ft Cam. Tax MAR. 3 12009 4%vl af), � COMYCLURK HARRIS WUNI Y, TVA 41-33 Tette: Assignor: .Assignor' Mailing Address: Assignee: Assignee's Mailing Address: Mote Being Transferred: 20090131 185 03/31/2009 RP2 X20.00 TRANSFER OF NOTE Date: Original Principal Amount: Maker: Payee: Terms of Payment; Secured by : Property Securing Note: Mazche�6, 2009 Real Property Mortgage & Investment Company, Inc, 4212 San Felipe, Suite 507 Houston, Texas 77027 GAGLE INVESTMENT COMPANY PCS Box 1405 Bellaire, Texas 77402-1405 March.? L 2009 ONE HUNDRED FIFTY-SEVEN THOUSAND AND NO/100 DOLLARS ($157,000.00) EAST A DEVELOPMENTS, L.P. Real Property Mortgage & Investment Company, Inc, As provided in the Note Deed of trust of even date Lots Six (6), Seven (7), Eight (8), and the adjoining North 18 feet of Nine (9), in Block One Hundred Ninety-eight (198), of TOWN OF LAPORTE, an addition in Harris County, Texas, according to the map or plat thereof recorded in 'volume 8, page 16 of the Map Records of Harris County, Texas. Consideration: For ten dollars and other valuable and sufficient consideration paid, the receipt of which is hereby acknowledged, • Other Exceptions to Conveyance and Warranty: Assignor hereby TRANSFERS, ASSIGNS, GRANTS and CONVEYS unto Assignee, an undivided 52.229% interest in and to the above promissory note, together with all liens, rights, equities, interests and superior title, held by the undersigned securing the payment thereof. There remains unpaid upon the note the principal sum sof $157,000.00 plus interest thereon from the day of March, 2009. Assignee and Assignor as used in this g g agreement include, shall bind and shalt inure to the benefit of the respective heirs, executors or administrators, successors, representatives, receivers, trustee and assigns of such parties. This assignment is without recourse. OP 21-AIPlfr-T:104"fi4W 1 ST ARX 's +...s. �..v dPANY 41-34 i� I EXECUTED this. day of March 2009. Real Property Mortgage & Investment Company, Inc. By: Ronald D. Piperi, PRES[ ACKNOWLEDGMENT STATE OF TEXAS COUNTY OF HARRIS § Z6,00-0 This instrument was acknowledged before me on the day of March 2009, by RONALD IPER], as the act and deed of Real Property Mortgage & Investment Co any, Inc. ` PAMELA JOANN L8 Notery Public, Mate 818E ••'` My Cbr M111ai0a �Jr�xaa July 08,.2012 expires N0 ARY PUBLIC, S E CSF TE After Recording Return To: Real Property Mortgage 4212 San Felipe #507 Houston, TX 77027 M"NOVM, EMM00100SIRSALERENTILOVE of M DL9MJE4 THE STATE? aF T�4$ COUNTY pF 1RRi9 a" to* M115 tay"sSIO I 1 New340tra 64 4W me ah tt Ct1$CaM=#l;t�iNIt "Colnk MOMP'dk10*11011AIs 44itK� Mai a 12000 rq C4 r Sep 2S 2009, 10:29RM HEMSLEY & KRUEGER LLP 71 850852 8 P-03 I 0/0'x/2009 RP2 S1640 i ti State of Texas . County of Herds h1§d AFFJ2AW is Peter Helligan, owner and opamtor of MU10ANIS FOAM COATINGS OF HOUSTON, INCR appeared personally before me, the undemigned autharky, and, upon oath, deposed and staid: "My name is Peter Halligan. I am the owner of Halligan's Foam Coatings of Houston, Ift located at 110835 Sageburrow, Houston, Texas 77039, Halligan's Foam Comings of Houston, Inc. !s refe�d to in this etflrtav t as `Ctelmant." I have personal knowledge of the fees set forth below and am cof potent and authorized to make this affidavit Pursuant to s contract between Claimant and BAST JL DEVELOPMENT L.P. who Is the ower, or -reputed owner, of the rani property described In this aftida0l and whose address is 1001 Usenner, Houston, ,Texas 77009. Claimant performed labor and supplied specially febrimted materials to Imptrp e real pmperty located at 163 S. Broadway, LaPorte, Texas 77571. This labor may be generally described as follows; employed a unIque pirocesa to apply ruretherte ftp m to create a lightweight and leak roof roa#in s t rn, P g Ys a Ea t- P. This tabor was completed an July, 27 2005. Claimant le the original contractor far the Impmvernents for which this etfldavlt of oomphalon Is dainrted. After allavAng ep just credits and offsets, the amunt of $4300.00 mm*s unpaid and Is due and owing under this c ontrect Claimant claims a tion on the tollowing property to seoure the payment of the above amount; 163 Se BROADWAY, LAPO TEMS 77671. s 1 s . $ �• P suer Halligan m � sWoR i AND SUBSCRIBED TO BEFORE ME by Peter Halligan • pan this te h•„�,_ day of � swenwwj ,a• r- W 2W9, _ T PUBLIC ltd AND CSR ,r 9 ABELY MEDINA � :; Notary Public TME STATS OF TEAS 10 • •• IN,010%ire, W Nh► Comm.� -- .01-28-12 �yY 0 r V. 61 W ZAf4 o %&s rao, 07�, #7 010 i at HMO !tn„a Eh V-0 LUMI S 74 SAL E AWAL OR LGE OF fn �ESdk�EDJt�p � FA4Pf AtY 8c7..ISE CF '�L� i Y� til�C tS I�I�'IRl�t 11fj0 UktkF�4CEAdtE�' 0 FED Ut = 4.. THE STATE OF TEXAS COUNTYOF HARRIS fid hst �s � h Fit r��x��e oa kj ot; 1Whti0CORDEQb W pd* i Md �t�t n "610 row, OCT as 9 2009 n= wool OOLINT1'CLERK • HARRIS CCUttTY. i@N8 41-36 1 r.� Summary of City Purchasing Policies and Procedures City of La Porte Prepared by Belt Harris Pechacek, LLLP Purchasing Interview Our interview with staff related to the purchasing function centered on gaining an understanding of the general process. According to our interview, purchasing is generally a collaborative effort between individual departments and the purchasing department. City purchases for different amounts follow different procedures: • Purchases in excess of $50,000 require a formal bidding process with a few exceptions (professional services, goods or services for which there is only one provider, etc.). • For purchases between $2,000 and $50,000, the department is required to solicit three quotes. o Purchases between $5,000 and $10,000 require department director approval. o Purchases between $10,000 and $25,000 require the approval of the department director and either the City Manager or Assistant City Manager. • Purchases under $2,000 are made at the discretion of the individual department. During a formal bidding process, the City sends out Requests for Proposals (RFP's). This request is advertised. The RFP's received are opened on a specific date and the selection is made. Usually, this will be the lowest bidder. The purchase then goes to Council for approval. Items going through the quote process require the department to receive three written quotations from vendors. These quotes are then submitted to the purchasing department for issuance of a purchase order (PO). The purchasing department then issues a PO and work proceeds. As work is completed, departments review the work and sign off on progress using a receiving report. The accounts payable (A/P) department then issues the check in the AT system. The AT manager reviews each transaction, including supporting documentation, before signing off on them. A physical check is then printed. An AT technician then matches all documentation against the check as a last review before the checks are sent out. Summary of Written Purchasing Polic The written purchasing policy provided to us is attached as Exhibit 1. The purchasing policy appears to conform generally to the policies and procedures related in our interview of City staff and appears reasonable when compared to other cities of the same size and staffing levels. The written purchasing policies and procedures are unclear as to when formal, competitive, sealed bidding is required. Chapter 5, section 4 requires such bidding for "all contracts and expenditures in excess of $15,000" (see Exhibit 1, pages 1-12). Chapter 3, Section 3, however, states "Purchases over $25,000 shall be competitively bid" (see Exhibit 1, pages 1-6). Our interview with staff indicated a threshold of $50,000 was being used. Texas Local Government Code, Chapter 252, Purchasing and Contracting Authority of Municipalities (Exhibit 4), states that a "municipality may enter into a contract that requires an expenditure of more than $50,000 from one or more municipal funds, the municipality must, with a few exceptions, use competitive sealed bidding. However, this is a maximum threshold. Lower thresholds can be set forth by cities in their own policies and procedures". Whether the threshold is $15,000, $25,000, or $50,000; the City would be in compliance with Chapter 252. 42-1 Engagement Letter for Agreed Upon Procedures July 8, 2010 Honorable Mayor and City Council City of La Porte 604 W. Fairmont Parkway LaPorte, TX 77571 We are pleased to confirm our understanding of the nature and limitations of the services we are to provide for the City of LaPorte, Texas (the "City"). We will apply the agreed-upon procedures which the City has specified, listed in the attached schedule ("Exhibit A"), to analyze transactions associated with the City's 5 -Points Project. This engagement is solely to assist the City for the purpose of gaining a better understanding of certain aspects of the 5 -Points Project as they relate to applicable City and 4B Development Corporation policies and procedures as well as applicable State law. Our engagement to apply agreed-upon procedures will be conducted in accordance with attestation standards established by the American Institute of certified Public Accountants. The sufficiency of the procedures is solely the responsibility of those parties specified in the report. Consequently, we make no representation regarding the sufficiency of the procedures described in Exhibit A either for the purpose for which this report has been requested or for any other purpose. If, for any reason, we are unable to complete the procedures, we will describe any restrictions on the performance of the procedures in our report, or will not issue a report as a result of this engagement. Because the agreed-upon procedures listed in Exhibit A do not constitute an examination, we will not express an opinion on transactions associated with the City's 5 -Points Project. In addition, we have no obligation to perform any procedures beyond those listed in Exhibit A. We will submit a report listing the procedures performed and our findings. This report is intended solely for the use of the City and should not be used by anyone other than this specified party. Our report will contain a paragraph indicating that had we performed additional procedures, other matters might have come to our attention that would have been reported to you. You are responsible for the presentation of the requested items in accordance with the procedures listed above; and for selecting the criteria and deterrrL�ning that such criteria are appropriate for your purposes. You are also responsible for making all management decisions and performing all management functions; for designating an individual with suitable skill, knowledge, and /or experience to oversee the services we provide; and for evaluating the adequacy and results of those services and accepting responsibility for them. Partners Partner of Counsel Houston BellvilieAustin All Offices Governmental Robert Belt, CPA John R. Pechacelc, CPA 730 N. Post Oak Rd., Ste, 401 6100 Windaim'eol4 100 Congress Ave., Ste. 2000 www.texasauditors.com Audit Quality Center Stephanie E. Harris, CPA Houston, TX 77024 Bellville, TX 77418 Austin, TX 78701 info@txauditors.com Nathan Krupke, CPA 713.263.1123 979.865.3169 512.381.0222 713.263.1550 fax We plan to begin our procedures when the City approves the start date and unless unforeseeable conditions are encountered, the engagement should be completed within 6 weeks. At the conclusion of our engagement, we will require a representation letter from management that, among other things, will confirm management's responsibility for the presentation of the subject matter in accordance with the established criteria. Our fee for these services will be at our standard hourly rates plus out-of-pocket costs (such as report reproduction, travel, etc.) Our hourly rates vary according to the degree of responsibility involved and the experience level of the personnel assigned to the engagement which range from $125 to $245 per hour. We expect that a project of this nature will entail using one of our in -charge auditors ($125 per hour), with the exception of clerical support. We estimate 168 hours will be expended on this project. Fees for our services under this agreement will not exceed $24,600 without prior written approval. Our invoices for these fees will be rendered each month as work progresses and are payable within. 30 days. In accordance with our firm policies, work will be suspended if your account becomes 30 days or more overdue and will not be resumed until your account is paid in full. If we elect to terminate our services for nonpayment, our engagement will be deemed to have been completed even if we have not completed our report. You will be obligated to compensate us for all time expended and to reimburse us for all out-of-pocket costs through the date of termination. Notwithstanding anything contained in this engagement to the contrary, in the event no funds or insufficient funds are appropriated and budgeted or are otherwise unavailable in any fiscal period for fees due under this engagement agreement, the City will immediately notify us in writing of such occurrence and this agreement shall terminate on the last day of the fiscal period for which appropriations have been received or made. Any client certified public accountant involved with assisting us shall not be prohibited from disclosure of information required to be made available by the standards of the public accounting profession in reporting on the examination of financial statements. Management understands and provides permissions to staff certificate or registration holders as required under the Rules of Professional Conduct, Texas Administrative strative Code, Title 22, Part 22, Chapter 501, Subchapter C, Section 501.75. We appreciate the opportunity to assist you and believe this letter accurately summarizes the significant terms of our engagement. If you have any questions, please let us know. If you agree with the terms of our engagement as described in this letter, please sign the enclosed copy and return it to us. If the need for addi- tional services arises, our agreement with you will need to be revised. It is customary for us to enumerate these revisions in an addendum to this letter. If additional specified users of the report are added, we will require that they ackno-,�ATledge in writing their responsibility for the sufficiency of procedures. Sincerely, Stephanie E. Harris, CPA Partner RESPONSE: This letter correctly sets forth the understanding of the City of La Porte, Texas. Al I auzi Authorized Representative Date _") I / jo:�s If )/0 Date 0 7 Date 7// Z/ -/,b Exhibit A � � 1 1 Obtain further understanding of 5 -Points Project and areas of concern through interviews of Fiscal Affairs Committee Members and Concerned Citizen, as well as by a review minutes and open records request by Citizen to further define scope. 2 Obtain listing of all expenditures coded to 5 -Point Project as recorded on the City's and/or 4B Development Corporation General Ledger and review supporting documents/invoices against applicable policies and procedures for preparation of exhibit for final report. 3 Obtain copy of EDC Project plan and other applicable documents associated with advertising and approval of final project by City Council and review for compliance with applicable State Statute/By-laws. 4 Prepare timeline of events associated with 5 -Point Project from inception to completion thru review of minutes and other interviews. 5 Question officials about an alleged meeting on 10/1/08 with URS to determine if there was a violation of the open meetings act. 6 Review the contract and resulting invoices for services as submitted by URS (Project Engineer) to the City in connection with the 5 -Points Project for accuracy and compliance with the City's applicable policies and procedures. 7 Review process for selection of 5 -Points Project Engineer and Construction Contractor for compliance with applicable State Statute. 8 Verify filing of Conflict of Interest by 4B Development Board Member. 9 Review the expenditure of funds by the 4B Development Corporation for the 5 -Points Project for compliance with applicable State Statutes. 10 Verify proper authorization for expansion of funding for 5 -Points Project. 11 Review transactions between the City and Developer as they relate to the following: Ila Criteria used for providing loan to Developer 11 b Review loan documents to determine compliance with the agreement and applicable laws and regulations l l c for repayment by Developer Obtain Confirmation from the City to determine depositor of wire transfer used for repayment of loan 12 Review various real estate transactions between the City/4B Development Corporation and the Developer as they relate to the following 12a The sale of a portion of San Jacinto St. to Developer 12b Payment of property taxes on Triangle Property 12c Review of evidence of payments made by City to all parties at closing on Triangle Property 12d Review of Exhibit C for proper execution 12e Review title history along with lien documents on property if available and timing of transactions 13 Prepare report 14 Review procedures completed and report Enhi.bit A 3 1. Est. Hours Est. Hours Auditor Partner Total Cost Total Cost Procedure Auditor Partner Billing Rate Billing Rate Auditor Partner Total 1 8 12 $ 125 $ 225 $ 15000 $ 2,700 $ 35700 2 16 125 225 2,000 - 2,000 3 6 125 225 750 - 750 4 12 125 225 15500 - 15500 5 6 125 225 750 - 750 6 12 125 225 1,500 - 1,500 7 8 125 225 1,000 - 19000 8 1 125 225 125 - 125 9 6 125 225 750 - 750 10 6 125 225 750 - 750 11a 4 125 225 500 - 500 llb 4 125 225 500 - 500 11c 2 125 225 250 - 250 12a 2 125 225 250 m 250 12b 2 125 225 250 - 250 12c 1 125 225 125 - 125 12d 4 125 225 500 - 500 12e 8 125 225 1,000 - 15000 13 24 125 225 3,000 - 3,000 14 - 24 125 225 - 57400 5,400 132 36 $ 165500 $ 85100 $ 24,600