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ST1002-CN080706 Page 1 of 2 Ken Griffin - RE: CSE Option Agreement From:   "Pete Smith" <Psmith@njdhs.com> To:    "Jeff Fink" <jfink@applenorrisfink.com> Date:   7/6/2008 12:43 PM Subject:   RE: CSE Option Agreement CC:    <cphilips@ci.coppell.tx.us>, "Mindi Hurley" <mhurley@ci.coppell.tx.us>, ... Attachments:CSE economic development agreement.doc; Clean PGS Copy Coppell Purchase Option     Agreement CSE Commercial Real Estate.doc   Jeff attached is clean copy of the Option Agreement and the latest draft of the economic development agreement. Please note that these documents have not been reviewed and approved by the City. The documents are subject to further change.   Peter G. Smith Nichols, Jackson, Dillard    Hager & Smith, LLP 1800 Lincoln Plaza 500 North Akard Street Dallas, Texas 75201 214-965-9900 214-965-0010 Fax   **Information contained in this transmission is attorney privileged and confidential. It is intended for the use of the individual or entity named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copy of this communication is strictly prohibited. If you have received this communication in error, please immediately notify us by telephone.   From: Jeff Fink [mailto:jfink@applenorrisfink.com] Sent: Saturday, July 05, 2008 4:50 PM To: Pete Smith Subject: RE: CSE Option Agreement   Pete, both of the attached are red-lined. Please send me a clean version as well so that we can use that version to respond with any suggested changes. Thanks.   Jeff Fink Apple Norris & Fink, L.L.P. 735 Plaza Boulevard, Suite 200 Coppell, Texas 75019 Phone: (972) 315-1900 x232 Fax: (972) 315-1955 www.applenorrisfink.com   CONFIDENTIALITY NOTICE:  This electronic mail transmission has been sent by a law firm.  It may contain information that is confidential, privileged, proprietary, or otherwise legally exempt from disclosure.  If you are not the intended recipient, you are hereby notified that you are not authorized to read, print, retain, copy or disseminate this message, or any part of it, or any attachments.  If you have received this message in error, please delete this message and any attachments from your system without reading the content and notify the sender immediately of the inadvertent transmission.  There is no intent on the part of the sender to waive any privilege, including the attorney-client privilege, that may attach to this communication.  Thank you for your cooperation.   IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any tax advice contained in this communication (including any attachments) was not intended or written to be used, and file://C:\Documents and Settings\radloo\Local Settings\Temp\XPgrpwise\4870BDD6City...11/15/2011 Page 2 of 2 cannot be used, for the purpose of (i) avoiding tax-related penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any matters addressed herein.     From: Pete Smith [mailto:Psmith@njdhs.com] Sent: Saturday, July 05, 2008 10:39 AM To: Jeff Fink Cc: cphillips@ci.coppell.tx.us; Mindi Hurley; Jim Witt; kgriffin@ci.coppell.tx.us; Kevin Laughlin Subject: CSE Option Agreement Jeff   Attached are redline and clean version of latest revisions to the CSE Option agreement. Please note that the attached draft has not been reviewed or approved by the city and is subject to change and approval.  This is just a working draft and by no means is our final draft document regarding the option and purchase transaction. Please review and provide your comments in by separate email.   We addressed some but not all of your comments.  The redline looks worse than it really is.  We have changed the format to be consistent with the format used in the EDIA.  We changed the term "CSE" to "Company" to be consistent with the EDIA.   In addressing the issue of whether or not to do separate sales agreements each time CSE wants to purchase the land for the next phase, we have opted to not do separate agreements, but instead place the provisions of the sales agreement into the option agreement.  The required the addition of some sections and moving of a number of sections in the prior draft to bring all of the terms of sale and closing into Article III.  In essence, the delivery of the Option Notice will trigger the sales provisions without the necessity of preparing and signing a whole new agreement.   As for who pays for the title policy, we have worked a middle ground where CEDF pays for the owners’ policy, but only as if this were being done in a single $2M transaction.  Thus, when we reach the point that the premiums exceed $10,039, CSE begins to pick up the tab.   On the assignment of the agreement, we have made provision for allowing collateral assignment of the contract and assignment to another entity controlled by the principals of CSE without consent, but subject to the assumption of the obligations of the agreement and without requirement to release the assignor.   On termination for default (Article IV), we have added provisions that are loosely based on what CSE added to its last version of the EDIA.  As to remedies we have crafted Sections 4.3 and 4.4 which need additional work.         Peter G. Smith Nichols, Jackson, Dillard    Hager & Smith, LLP 1800 Lincoln Plaza 500 North Akard Street Dallas, Texas 75201 214-965-9900 214-965-0010 Fax   **Information contained in this transmission is attorney privileged and confidential. It is intended for the use of the individual or entity named above. If the reader of this message is not the intended recipient, you are hereby notified that any dissemination, distribution or copy of this communication is strictly prohibited. If you have received this communication in error, please immediately notify us by telephone.     file://C:\Documents and Settings\radloo\Local Settings\Temp\XPgrpwise\4870BDD6City...11/15/2011 PGS CLEAN Draft 07-05-07 State of Texas § § Option and Restriction Agreement County of Dallas § This Option and Restriction Agreement (“Agreement”) is made and entered into on __________, 2008 by and between CSE Commercial Real Estate, LP, a Texas Limited Partnership, (the “Company”), and the Coppell Economic Development Foundation, Inc., a Texas nonprofit corporation (the “CEDF”) acting by and through their authorized representatives. WHEREAS, CEDF owns, or has contracted to purchase the approximately 23 acres the Exhibit “A” of real property described in (the “Land”), attached hereto and incorporated herein by reference, and desires to grant Company an option to purchase the Land, or portions thereof, as set forth herein (the “Option”); and WHEREAS, the Company desires to purchase the Land pursuant to the Option and to develop the Land for a mixed use development anchored by a town square and consisting of approximately ten (10) retail office cottages built with craftsman architectural style, forty-four (44) townhomes, eight (8) retail service buildings, and one (1) restaurant and future commercial development to be agreed upon by the Parties (the “Project”); and WHEREAS , the Company will purchase and develop the Land in phases; NOW, THEREFORE, in consideration of the sum of Ten and No/100 Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows: Article I Definitions Whenever used in this Agreement, the following words, terms, and phrases shall have the following meanings: City Facilities” “ shall collectively mean the Infrastructure and the Town Square. “Commencement of Construction” shall mean that point in time at which: (i) the plans have been prepared and all approvals thereof required by applicable governmental authorities have been obtained for the respective phase of the Project or the Infrastructure, as the case may be; (ii) all necessary permits for construction of the respective phase of the Project or the Infrastructure, pursuant to the respective plans therefore having been issued by all applicable governmental authorities; and (iii) grading of the Land has commenced for the respective phase of the Project or the Infrastructure, as the case may be. “Company” shall mean CSE Commercial Real Estate. LP, a Texas limited partnership. “Completion of Construction” shall mean that point in time at which: (i) the Project or the Infrastructure, has been substantially completed, and (ii) a certificate of substantial CEDF CSE Option Agreement Page-1 27175 PGS CLEAN Draft 07-05-07 completion has been issued by the general contractor(s) for the Project or the Infrastructure; and (iii) the City has accepted the respective Infrastructure or the City has issued a Certificate of Occupancy for the respective phase of the Project, as the case may be. “Covenants” shall mean that certain declaration of covenants, conditions, and restrictions dated ________ as recorded in the Official Public Records of Dallas County, Texas. “Economic Development Incentive Agreement” shall mean that certain economic development incentive agreement by and between the Parties dated of approximate even date herewith. “Effective Date” shall mean the last date of execution hereof. “Event of Bankruptcy, Insolvency, or Forfeiture” shall mean the dissolution or termination of a party’s existence as a going business, insolvency, appointment of receiver for any significant part of such party’s property and such appointment is not terminated within ninety (90) days after such appointment is initially made, any general assignment for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency laws by or against such party and such proceeding is not dismissed within ninety (90) days after the filing thereof. An event of forfeiture shall also include the suspension or termination of the right to conduct business in the State of Texas pursuant to applicable provisions of the Texas Business Organizations Code for failure to pay required Impositions or file required reports. th “Expiration Date” “Ex shall mean the seventh (7) anniversary of the Effective Date. “Finished Lot” shall mean a developed lot or parcel with frontage on a public street with on-site utilities installed. “Force Majeure” means any contingency or cause beyond the reasonable control of a party including, without limitation, acts of God or the public enemy, war, terrorism, riot, civil commotion, insurrection, criminal acts by unrelated third parties, government or de facto governmental action (unless caused by acts or omissions of the party), adverse weather, fires, explosions or floods, strikes, slowdowns or work stoppages. “Impositions” shall mean all taxes, assessments, use and occupancy taxes, charges, excises, license and permit fees, and other charges by public or governmental authority, general and special, ordinary and extraordinary, foreseen and unforeseen, which are or may be assessed, charged, levied, or imposed by any public or governmental authority on the Company and/or affecting the Land. “Infrastructure” shall mean public streets, alleys, parking contiguous to the Town Square, parking on the west side of the Coppell entry to the Project, water, storm water and sanitary sewer in public right-of-way, retention pond if necessary, streetscape improvements in the public right-of- way and the Town Square. “Land” shall mean the real property described in Exhibit “A”. CEDF CSE Option Agreement Page-2 27175 PGS CLEAN Draft 07-05-07 “Old Coppell Design Guidelines” shall mean the development guidelines for Old Coppell Design as approved by the City, from time to time. “Option” shall mean the right granted to Company herein to purchase the Land, excluding the Town Square site of approximately 2 acres in one or more sales transactions that close within the periods required by this Agreement. “Option Fee” shall mean the sum of $2 Million Dollars to be paid by Company to the CEDF as independent consideration for the Option as set forth herein. “Parties” shall mean collectively Company and CEDF. “Phase One” shall mean the first phase of the Project which shall consist of at least one retail service building on the west side of the Town Square, one cottage on the north side of the Town Square, and the initial phase of 16 units of townhomes fronting on the Town Square together with the necessary water, sewer and other infrastructure including the respective portion of the Infrastructure. The retail service building fronting the west side of the Town Square shall consist of approximately 20,000 square feet of space, and the cottages fronting the north side of the Town Square shall be designed, constructed and leased such that not less than forty percent (40%) of the total cumulative square feet available will be used for restaurant and retail uses that produce regular daily foot traffic within the Project. “Plans” shall mean the plans and specifications for design and construction of the City Facilities as approved by the City. “Project” shall mean a mixed use development to be constructed on the Land, or portion thereof, to be anchored by the Town Square, and consisting of approximately ten (10) retail office cottages built with craftsman architectural style, forty-four (44) townhomes, eight (8) retail service buildings, one (1) restaurant and future commercial development to be defined and agreed upon by the Parties, private parking on the west, east and south sides of the perimeter of the City Facilities, together with other required parking and landscaping all as further described in the submittals filed with the City in order to obtain a building permit(s) from time to time. “Purchase Price” shall mean $1.00 per acre of land. “Related Agreements” shall mean the Economic Development Incentive Agreement and any other appropriate agreement(s) related to the Project. “Title Company” shall mean Republic Title Company, whose address is ______________________________.. “Town Square” shall mean the approximately two (2) acres of the Land on which the City intends to construct a town square open space, generally consisting of landscaping, pavilion, interactive water feature, playground equipment, and one additional public use venue or other mutually agreed upon improvements. CEDF CSE Option Agreement Page-3 27175 PGS CLEAN Draft 07-05-07 Article II The Option 2.1 Option Fee. Except as otherwise provided in this Agreement, the Option Fee is non-refundable. Company shall pay the Option Fee to CEDF in installments as follows: (a) $50,000.00 to be paid upon the Effective Date; th (b) $200,000.00 to be paid not later than the 90 day after the Effective Date; th (c) $1,750,000 to be paid not later than the fifth (5) business day following the date of the award of the bid for the contract for the construction of the Infrastructure but in any case on or before the date of closing of the Company’s purchase of the Phase One portion of the Land. Each installment of the Option Fee must be paid by certified or cashiers check made payable to CEDF, or wired directly to an account designated by CEDF. 2.2 Option Granted. In consideration of payment of the Option Fee, CEDF hereby grants to Company the Option, which may be exercised only upon and subject to the following: (a) All installments of the Option Fee that are due must be paid and current; (b) Company must deliver to CEDF a written notice of its desire and intent to close on a portion of the Property (“the Option Notice”) which must include: (1) a survey containing at least the legal description of the portion of the Land that Company desires to purchase; provided, however, if the portion of the Land on which the Company desires to exercise its option to purchase can be described solely by reference to a final plat approved by City and recorded in the Official Public Records of Dallas County, Texas, without need to include a metes and bounds description, the Option Notice shall contain such description and no survey shall be required; (2) a description of the nature and use of the improvements to be constructed on the portion of the Land to be purchased under the exercise of the Option that is in compliance with the land use ordinances controlling development of the Land and the Covenants; (3) an acknowledgement and agreement that the purchase of the Land is subject to the provisions of this Agreement and that this Agreement is in full force and effect; and CEDF CSE Option Agreement Page-4 27175 PGS CLEAN Draft 07-05-07 (4) the date of the proposed closing, which date shall be: (i) for Phase One, on or before September 30, 2008; (ii) for all other purchases, not later than thirty (30) days following delivery of the Option Notice to CEDF, but in any case not later than the seventh th (7) anniversary following the Effective Date; and (c) Company must be in material compliance with the Economic Development Incentive Agreement. 2.3 Failure to Exercise Phase One Option; Termination. Failure of Company to exercise the Option as to the purchase of the Phase One property by September 30, 2008, shall terminate Company’s right to exercise the Option as to any other portions of the Property and this Agreement shall terminate without further notice, and neither party shall have any further rights or obligations herein. 2.4 Failure to Exercise Subsequent Options by Expiration Date: Company’s right to exercise the Option with respect to any or all of the Property will terminate if not exercised on or before the Expiration Date. Article III Sale of Land 3.1 Generally. Upon the timely exercise of the Option by Company through delivery of an Option Notice to CEDF, the CEDF agrees to sell, and Company agrees to purchase, the portion of the Land described in the Option Notice subject to and in accordance with the provisions this Article III and Articles V, and VI, below.. 3.2Survey and Title Commitment. (a) Not later than twenty (20) calendar days after the date of receipt of the Option Notice, CEDF, shall deliver to Company: (i) a current commitment for title insurance for the Land, or portion thereof, from the Title Company, setting forth the state of title to the Land, or portion thereof, as the case may be, together with any easements or restrictions (existing or created pursuant hereto) benefiting or burdening the Land, together with all exceptions or conditions to such title; CEDF CSE Option Agreement Page-5 27175 PGS CLEAN Draft 07-05-07 (ii) legible copies of all documents referenced in the title commitments; (iii) tax statements for current and prior years. (b) The Company shall, not later than twenty (20) days after the Company’s receipt of the last of the Survey and Title Commitment, notify CEDF and Title Company of any objections to the Survey or Title Commitment. If there are objections to title by Company, CEDF shall in good faith attempt to satisfy them prior to closing, but CEDF shall not be required to incur any cost to do so. If CEDF delivers written notice to Company on or before the original date for Closing that CEDF is unable to satisfy such objections to title prior to Closing, the date for Closing shall, at the request of CEDF, be extended for a period of 60 days to provide additional time to cure said objection. If CEDF is unable to cure the objection by the date of Closing, the Company may either, waive such objection(s) and accept such title as CEDF is able to convey, or terminate its exercise of the Option to purchase the Land or portion thereof by written notice to CEDF. (c) If CEDF is unable to cure the objection to title prior to Closing and the Company elects to terminate its exercise of its Option to purchase the portion of the Land described in the Option Notice, upon execution by Company of a release said tract from this Option Agreement, CEDF agrees to refund the Option fee in an amount equal to: (i) the ratio of the area of the portion of the Land described in the related Notice of Exercise of Option to the entire area of the Land; multiplied by (ii) $1,950,000.00. 3.3Insured Amount of Title Policy. For purpose of determining the insured amount of each title policy to be issued with respect to each sale a portion of the Land pursuant to this Agreement, the amount shall be deemed to be an amount equal to the ratio of the area of the portion of the Land being sold in relation to the entire area of the Land multiplied by the Option Fee. 3.4Title to the Land . At closing the Company shall be entitled to receive, and CEDF shall deliver, good and indefeasible fee simple title to portion of the Land described in the Option Notice, free and clear of all liens and encumbrances, except: (i) such easements, conditions and restrictions as are of record as of the date of the CEDF’s purchase of the Land; (ii) utility easements; (iii) such conditions, restrictions, and encumbrances as may be contained in the Covenants; CEDF CSE Option Agreement Page-6 27175 PGS CLEAN Draft 07-05-07 (iv) such liens and encumbrances in favor of the Company’s lenders as may be created at the time of Closing; and (v) such other matters as Companymay waive. 3.5Permitted Exceptions. . Company acknowledges and agrees that the Land, or portion thereof, will be conveyed by CEDF at closing subject to the Covenants, the Restriction Agreement, and that the Special Warranty Deed shall and be subject to such provisions. The zoning, the lien for current taxes, the environmental condition and the Restriction Agreement shall be deemed to be Permitted Exceptions. CEDF and Company agree and understand that CEDF is conveying the Land as an independent foundation for the City of Coppell, Texas, and Company acknowledges that the Land is conveyed subject to the Covenants and the Restriction Agreement. 3.6Additional Condition to Closing . Each closing is conditioned upon the CEDF closing on the purchase of the Land, or that portion thereof, from the City of Coppell, Texas pursuant to a purchase and option agreement for the Land by and between the CEDF and City of Coppell. 3.7Closing and Settlement . Closing Date: (a) Unless otherwise provided hereinabove, the closing and settlement of the purchase and sale of the Land pursuant to any exercise of the Option shall be th made not later than the forth-fifth (45) day following delivery of the Option Notice to CEDF. (“the Closing Date”) . Purchase Price: (b) At closing, Company shall pay the Purchase Price, in cash or by certified or cashier’s check. Special Warranty Deed: (c) At Closing, CEDF shall deliver to Title Company for delivery to the Company a special warranty deed and bill of sale conveying the tract described in the Option Notice which shall be in form and substance reasonably satisfactory to CEDF, the Company, and their respective counsel and containing such reservations and exceptions to title as allowed by the provisions of this Agreement, including, but not limited to, the Permitted Exceptions in accordance with the foregoing provisions 3.8 CEDF’s Closing Costs: CEDF hereby agrees to pay and be responsible for the following closing cost: (a) the cost of all tax certificates relating to all taxes and other assessments incurred or arising in relation to the Property; (b) one-half (½) of the Title Company’s escrow fees; CEDF CSE Option Agreement Page-7 27175 PGS CLEAN Draft 07-05-07 (c) all costs and expenses incurred by or on behalf of the CEDF, including CEDF’s attorney’s fees; (d) such other incidental costs and fees customarily paid by sellers of real property in Dallas County, Texas, for transactions of a similar nature to the transaction contemplated herein, and (e) all fees and premiums for the Basic Owner’s Title Policy; provided, however, CEDF’s responsibility for payment of title policy fees and premiums for all transactions closed pursuant to this Agreement shall not exceed the amount that would be paid for a single issuance of an owner’s title policy in the amount of $2,000,000.00, which is agreed to be $10,039.00. 3.9 The Company’s Closing Cost The Company hereby agrees to pay and be responsible for the following closing cost: (a) all fees and premiums for any endorsements to the Basic Owner’s Title Policy, and fees and premiums for concurrent issuance of any mortgagee’s policy or interim construction binder for the benefit of the Company’s lender; (b) all fees and premiums for the Basic Owner’s Title Policy in excess of the amount CEDF is required to pay pursuant to Section 9(d)(v), above. (c) all fees and premiums for the Survey(s); (d) recording fees for each deed, and any and all deeds of trusts, security agreements, collateral assignments, assignments of rents, and other similar documents related to any loan procured by the Company; (e) one-half (½) of the Title Company’s escrow fees; (f) all costs and expenses incurred by or on behalf of the Company, including the Company’s attorneys’ fees; (g) such other incidental costs and fees customarily paid by purchasers of property in Dallas County, Texas, for transactions of a similar nature to the transaction contemplated herein. 3.10Proration of Taxes. Ad valorem taxes, assessments, and any other charges against the tract described in the Option Notice shall be prorated as of the Closing Date and become the responsibility of the Company as of the Closing Date. CEDF CSE Option Agreement Page-8 27175 PGS CLEAN Draft 07-05-07 3.11 Representations and Covenants. . CEDF represents and covenants that: (a) it has authority to enter into this Agreement; and (b) no other person has any interests in or claims against the Land (other than as reflected by the title commitment), and it will not hereafter encumber the Land. Companyrepresents that it has authority to enter into this Agreement. The only representations made by any party concerning the Land and this Agreement are as set out in this Section 12. 3.12Right to Inspect Land;Land Sold As Is. . (a) Company shall have the right to conduct such inspections and obtain such reports from third party engineers and consultants (including environmental consultants) as it may require, to satisfy itself, as to the condition of the Land, or portion thereof. (b) Companyrepresents that as of the closing of any purchase pursuant to the Option that Companywill have fully inspected the Land, or portion thereof, will have made all investigations as it deems necessary or appropriate and will be relying solely upon its inspection and investigation of the Land, or portion thereof, for all purposes whatsoever, including, but not limited to, the determination of the condition of the structures, improvements, soils, subsurface, drainage, surface and groundwater quality, and all other physical characteristics; availability and adequacy of utilities; compliance with governmental laws and regulations; access; encroachments; acreage and other survey matters and the character and suitability of the Land. (c) In addition, Companyacknowledges and agrees that the Land is being purchased and will be conveyed “AS IS” with all faults and defects, whether patent or latent, as of the Closing. (d) Except with respect to the quality of the title being conveyed by CEDF to Company pursuant to this Agreement, Company acknowledges and agrees thatthere have been no representations, warranties, guarantees, statements or information, express or implied, pertaining to the Land, its condition, or any other matters whatsoever, made to or furnished to Companyby CEDF or City or any employee or agent of CEDF or City, except as specifically set forth in this Agreement. (e) The provisions of this Section 3.12 shall survive the Closing, whether one or more, and the termination of this Agreement. Article IV Default, Termination, Remedies 4.1 Termination Events. In addition to such other circumstances as set forth elsewhere in this Agreement, this Agreement shall terminate upon the occurrence of any one or more of the following: CEDF CSE Option Agreement Page-9 27175 PGS CLEAN Draft 07-05-07 (a) the execution by the Parties of a written agreement terminating this Agreement; (b) the Expiration Date; (c) by a party providing written notice of termination to the other party after the party receiving the notice has (1) failed to cure a breach of the terms and conditions of this Agreement within 30 days after receiving written notice of said breach or (2) with respect to a breach that cannot under the circumstances be reasonably cured within said 30 day period, the breaching party has failed to commence the cure of such breach within 30 days after receiving written notice of said breach and thereafter diligently pursued to completion the cure of said breach; (d) by CEDF, if the Company suffers and Event of Bankruptcy, Insolvency, or Forfeiture. 4.2 Termination by CEDF . In the event this Agreement is terminated by CEDF pursuant to Section 4.1(c) or (d), CEDF shall: (a) be relieved of any further obligation under this Agreement to sell any portion of the Land to the Company for which closing has not yet occurred; and (b) be relieved of any obligation, if any, to refund any portion of the Option Fee paid pursuant to this Agreement, to the extent this Agreement would otherwise require such refund; and (c) seek an award for actual damages incurred by CEDF as a result of such uncured default by the Company, which may include, but not be limited to, payment of any unpaid balance of the Option Fee. 4.3 Termination by the Company. In the event this Agreement is terminated by the Company pursuant to Section 4.1(c) prior to the Closing on all portions of the Land, Company’s sole remedy as liquidated damages shall be the lesser of: (a) the amount of the Option Fee paid to the date of termination less $50,000.00; or (b) the ratio of the area of the portion of Land which has not been conveyed to the Company to the entire area of the Land multiplied by $1,950,000.00. In no case shall the amount of liquidated damages paid to Company exceed the amount of the Option Fee paid to CEDF less $50,000.00. Article V Notices. 5.1Delivery of Notices. All notices, requests, demands or other communications required or permitted hereunder shall be in writing and shall be deemed to have been fully and completely made when given by hand, by confirmed facsimile transmission or by overnight CEDF CSE Option Agreement Page-10 27175 PGS CLEAN Draft 07-05-07 delivery by Federal Express or other reliable courier or the mailing of such by registered or certified mail, addressed as follows: If intended for CEDF, to: Coppell Economic Development Foundation, Inc. 255 Parkway Blvd. Coppell, Texas 75019 Attn: Clay Phillips 972/304-3677 Phone With copy to: Peter G. Smith Nichols, Jackson, Dillard, Hager & Smith, L.L.P. 1800 Lincoln Plaza 500 N. Akard Street Dallas, Texas 75201 Telephone: (214) 965-9900 Telecopier: (214) 965-0015 Email: psmith@njdhs.com If intended for Company, to: CSE Commercial Real Estate, L.P. 4956 N. O’Connor Blvd. Irving, Texas 75062 Attn: Charles Cotton With Copy to: Jeffrey Fink Apple Norris & Fink,LLP 735 Plaza Boulevard, Suite 200 Coppell, Texas 75019 5.2 Change of Address for Notice. Any party may at any time and from time to time by notice in writing to the other party hereto change the name or address of the person to whom notice is to be given as hereinbefore provided. Article VI Miscellaneous. 6.1 Entireties . This Agreement contains the entire agreement of the Parties pertaining to the Land. CEDF CSE Option Agreement Page-11 27175 PGS CLEAN Draft 07-05-07 6.2Modifications . This Agreement may only be modified by a written document signed by the Parties. 6.3Assignment . Company may not assign its rights under this Agreement to any entity without the express written consent of CEDF; provided, however, Company may, without prior approval but with written notice to CEDF: (a) grant a security interest in this Agreement by means of a collateral assignment of this Agreement to a financial institution providing financing to the Company for the purchase and/or development of the Project, but only if such collateral assignment obligates the financial institution: (i) to notify CEDF of any default in the provisions of any note or security agreement which is secured in whole or in part by a security agreement in this Agreement; and (ii) obligates the financial institution, its successors, and assigns to assume the rights and obligations of the Company in the event the financial institution forecloses its security interest in this Agreement; (b) assigns this Agreement to an entity duly authorized to conduct business in the State of Texas controlled by Charles Cotton and Greg Yancy and the new entity agrees to assume all rights and obligations of this Agreement. The Company understands, acknowledges and agrees that CEDF shall be under no obligation to release the Company, its partners, shareholders, successors, representatives, or assigns from the obligations set forth in this Agreement in the event of any assignment of this Agreement, whether such assignment is made with or without the consent of CEDF. 6.4Time is of the Essence . Time is of the essence with respect to the performance by the Parties of their respective obligations hereunder. 6.5 Non-Business Day . If the final date of any period provided herein for the performance of an obligation or for the taking of any action falls on a Saturday, Sunday, or holiday, then the end of such period shall be extended to the next business day. 6.6Zoning . CEDF assumes no obligation to change the current zoning on the Land. 6.7Brokers . The Parties represent and warrant that they have not worked with any broker relative to this transaction and that no brokerage commission is due and payable upon the Closing. Each party shall indemnify each other from any claim for brokers’ commissions relative to the sale of the property and alleged to be due. 6.8Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed an original for all purposes and constitute one and the same CEDF CSE Option Agreement Page-12 27175 PGS CLEAN Draft 07-05-07 instrument; but in making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. 6.9Legal Construction . In the event any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect other provisions, and the Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been contained in it. 6.10Law Governing . This Agreement shall be construed under and in accordance with the laws of the State of Texas; and venue for any action arising from this Agreement shall be in the State District Court of Dallas County, Texas. The Parties agree to submit to the personal and subject matter jurisdiction of said court. 6.11Survival of Covenants . Any of the representations, warranties, covenants, and obligations of the Parties, as well as any rights and benefits of the Parties, pertaining to a period of time following the Closing or the termination of the Agreement shall survive. EXECUTED this the _______ day of ___________, 2008. Coppell Economic Development Foundation By: ____________________ Name: Clay Phillips Title: ___________________ EXECUTED this the ________ day of ___________, 2008. CSE Commercial Real Estate, L.P. By: Debco Partners, LLC, its general partner By: _________________________ Charles Cotton-Member CEDF CSE Option Agreement Page-13 27175 PGS CLEAN Draft 07-05-07 CEDF’S Acknowledgment State of Texas § § County of Dallas§ This instrument was acknowledged before me on the _____ day of __________, 2008 by Clay Phillips, the Director of the Coppell Economic Development Foundation, a Texas non- profit corporation on behalf of said corporation. Notary Public, State of Texas My Commission expires: Company Acknowledgment State of Texas § § County of Dallas§ This instrument was acknowledged before me this _________ day of ___________, 2008, by Charles Cotton, the member of Debco Partners, LLC, on behalf of said company. Notary Public, State of Texas My Commission expires:_______________ CEDF CSE Option Agreement Page-14 27175 PGS CLEAN Draft 07-05-07 Exhibit "A" Legal Description of the Land PGS CLEAN Draft 07-05-07 Exhibit “B” Covenants to Be Attached