COMMERCIAL REAL ESTATE EARNEST MONEY CONTRACT

ALL CASH  SPECIAL  -  CONTRACT FOR THE SALE OF REAL ESTATE AT AUCTION

1.  PARTIES:  ___________________________________________________________________________________________(Seller) agrees to sell and convey to

 ____________________________________________________________________________________________________________  (Buyer) and Buyer agrees to buy from Seller the property described below.

 2.  PROPERTY:   Being the surface rights only in an to All of Lots 3 & 4 of the S.A. Kakeer Addition to the City of Bridgeport, Wise County, Texas. known as 406 Thirteenth Street (Address), and The surface estate only in and to Being 0.655 acres of land out of the Rebecca Coleman Survey or as described on attached exhibit, together with the following items if any, installed heating and air conditioning units and equipment, window air conditioning units, built-in security and fire detection equipment, lighting and pluming fixtures, and all other property owned by Seller and attached to the above described real property except the following property which is not included:  All property sold by this contract is called the “Property.”  The Property.  SEE PROPERTY DESCRIPTION ATTACHED FOR ALL PURPOSES INTENDED.

3. SALES PRICE:

                Total Gross Sales Price Payable in Full at Closing ............................................................$ _______________________

 4.  FINANCING:  Financing is not a part of this contract, property is sold at auction without regard to financing, PROPERTY SOLD NOT CONTINGENT UPON BUYER OBTAINING FINANCING.  

 5.   EARNEST MONEY:  Buyer shall deposit $1,000.00 as Earnest Money with Don Flusche Real Estate Trust as Escrow Agent, upon execution of this contract by both parties.   IF BUYER FAILS TO CLOSE DUE TO FINANCING OR ANY OTHER REASON OR MATTER EXCEPT VALID TITLE OBJECTIONS, ESCROW / DEPOSIT SHALL BE FORFEITED.

 6.  TITLE POLICY: Seller shall furnish to Buyer at Seller’s expense an Owner Policy of Title Insurance issued by a Title Company of mutual agreement of Buyer and Seller, in the amount of the Sales Price, dated at or after closing, insuring Buyer against loss under the provisions of the Title Policy, subject to the promulgated exclusions (including existing building and zoning ordinances) and the following exceptions:

   (1)                Restrictive covenants common to the platted subdivision in which the Property is located.

   (2)        The standard printed exception for standby fees, taxes and assessments.

   (3)        Utility easements created by the dedication deed or plat of the subdivision in which the Property is located.

   (4)                Reservations or exceptions otherwise permitted by this contract or as may be approved by Buyer in writing.

   (5)        The standard printed exceptions as to discrepancies, conflicts, shortages in area or boundary lines, encroachments or protrusions, or overlapping improvements.

   (6)        The standard printed exception as to marital rights.

   (7)        The standard printed exception as to waters, tidelands, beaches, streams, and related matters.

Within 20 days after the Title Company receives a copy of this contract, Seller shall furnish to Buyer a commitment for Title Insurance (the Commitment) and, at Buyer’s expense, legible copies of restrictive covenants and documents evidencing exceptions in the Commitment other than the standard printed exceptions.  Seller authorizes the Title Company to mail or hand deliver the Commitment and related documents to Buyer at Buyer’s address shown below.  If the Commitment is not delivered to Buyer within the specified time, the time for delivery shall be automatically extended up to 15 days.  Buyer shall have 5 days after the receipt of the Commitment to object in writing to matters disclosed in the Commitment.  Buyer may object to existing building and zoning ordinances and items 6 (A)(1) through (7) above if Buyer determines that any such ordinance or items prohibits the following use or activity:

____________________________________________________________________________________________________________________

 6.   [B.]  SURVEY:

   (1)        Survey will not be provided to Buyer and paid for by Seller.

   (2)        Survey may be obtained by the Buyer at Buyer’s expense for information purposes only, not affecting the sale of the Property in any manner.

 NOTICE TO SELLER AND BUYER:

(1)           Broker advises Buyer to have an Abstract covering the Property examined by an attorney of Buyer’s selection, or Buyer should be furnished with or obtain a Title Policy.  If a Title Policy is furnished, the Commitment should be promptly reviewed by an attorney of Buyer’s choice due to the time limitations on Buyer’s right to object.

(2)           If the Property is situated in a utility or other statutorily created district providing water, sewer, drainage, or flood control facilities and services, Chapter 50 of the Texas Water Code requires Seller to deliver and Buyer to sign the statutory notice relating to the tax rate, bonded indebtedness, or standby fee of the district prior to final execution of this contract.

(3)           Buyer is advised that the presence of wetlands, toxic substances including lead-base paint or asbestos and wastes or other environmental hazards or the presence of a threatened or endangered species or its habitat may affect Buyer’s intended use of the Property.  If Buyer is concerned about these matters, and addendum either promulgated by TREC or required by the parties should be used.

(4)           If the Property adjoins and shares a common boundary with the tidally influence submerged lands of the state, Section 33.135, Texas Natural Resources Code, requires a notice regarding coastal area property to be included in the contract.  An addendum either promulgated by TREC or required by the parties should be used.

 7.   PROPERTY CONDITION: The Property is being sold AS IS, WITH ALL FAULTS KNOWN OR UNKNOWN WITHOUT WARRANTY EXPRESSED OR IMPLIED, AS TO EXACTNESS, and CORRECTNESS OF FACT TO ANY DESCRIPTION OF PROPERTY INFORMATION.   NO REPAIRS, TREATMENTS, INSPECTIONS ARE A CONTINGENT PART OF THIS SALE.  SHOULD ANY EPA PROBLEMS EXIST NOW OR IN THE FUTURE THE BUYER WILL BE RESPONSIBLE FOR REPAIR, CLEAN UP, OR UPDATING ANY EQUIPMENT OR REAL ESTATE WITHOUT RECOURSE TO SELLER AND OR AGENT.

Purchaser agrees that purchaser is taking the Property “AS IS” with any and all latent and patent defects and that there is no warranty by Seller and Auctioneer that the Property is fit for a particular purpose.  Purchaser acknowledges that it is not relying upon any representations, statements, assertions or non-assertions by the Seller or Auctioneer with respect to the Property condition, but is relying solely upon its examination of the Property.  Purchaser takes the Property under the express understanding there are no express or implied warranties (except limited warranties of title when applicable.  Provisions of this Statement shall survive all other conditions.

 8.   BROKERS’ REPRESENTATION AND FEES: Don Flusche Real Estate Broker shall be entitled to a full Commission from Seller as agreed in separate contract.  It is understood and agreed by Buyer and Seller that Real Estate Broker is acting as agent for the Seller and fees are payable by Buyer as a Buyer’s Premium and these fees are included in the total gross sales price.

 9.   CLOSING:   The closing of the sale shall be on or before November 15, 2008, or within 7 days after objections to title have been cured, whichever date is later (the Closing Date); the Closing Date shall be extended up to 15 days only if necessary to comply with lender’s closing requirements  (for example, insurance policies, closing documents).  If either party fails to close this sale by the Closing Date, the non-defaulting party shall be entitled to exercise the remedies contained in Paragraph 15.  At closing Seller shall furnish tax statements or certificates showing no delinquent taxes, and a Warranty Deed conveying good and indefeasible title showing no additional exceptions to those permitted in Paragraph 6.

 10.   POSSESSION:   Seller shall deliver possession of the Property on Closing & Funding in its present condition, ordinary wear and tear excepted.   Any possession by Buyer prior to closing or by Seller after closing that is not authorized by a temporary lease form promulgated by TREC or required by the Parties shall establish a landlord-tenant at sufferance relationship between the parties.   Consult your insurance agent prior to change of possession as insurance coverage may be limited or terminated. 

 11.   SPECIAL PROVISIONS:

Except as expressly stated in this agreement, Seller has not made and does not make any representations, warranties or covenants of any kind or character whatsoever, whether express or implied, with respect to the quality or condition of the property.  Specifically, Seller does not make any representations regarding solid waste, as defined by the Texas Solid Waste Disposal Act and the Regulations adopted thereunder, or the U.S. Environmental Protection Agency regulations at 40 C.F.R., Part 261, or the disposal or existence, in or on the property, of any hazardous substance, as defined by the comprehensive environmental response compensation and liability act of 1980, as amended, and regulations promulgated thereunder.

 12.   SALES EXPENSES: The following expenses shall be paid at or prior to closing:

   A.         All expenses concerning financing will be the expenses of the Buyer, to include but not limited to:  Appraisal fee, loan discounts, buydown fees, Loan application, origination and commitment fees; loan assumption costs; preparation and recording of deed of trust to secure assumption; lender required expenses incident to new loan(s):  (for example, PMI premium, preparation of loan documents, survey, recording fees, tax service and research fees, warehouse or underwriting fees, copies of restrictions and easements, amortization schedule, premiums for mortgage title policies and endorsements required by lender, credit reports, photos;  required premiums for flood and hazard insurance;  required reserve deposit for insurance premiums and as advalorem taxes;  interest on all monthly installment payment notes from date of disbursements to one month prior to dates of first monthly payments;  customary Program Loan costs for Buyer;  one-half of escrow fee;  and other expenses stipulated to be paid by Buyer under other provisions of this contract.

   B.         Seller’s Expenses:  Releases of liens, including prepayment penalties and recording fees; release of Seller’s loan liability; tax statements or certificates; preparation of deed; one-half of escrow fee; and other expenses stipulated to be paid by Seller under other provisions of this contract.

 13.   PRORATIONS:   Flood and hazard insurance premiums (excluding mortgage insurance), taxes for the current year, interest, maintenance fees, assessments and rents shall be prorated through the Closing Date.  However, if a loan is assumed and the lender maintains an escrow account for the payment of taxes and insurance, the above items [ n/a ] shall not be prorated.  Whether or not prorations are made, the escrow account shall be transferred to Buyer without any deficiency.  If prorations are made Buyer shall reimburse Seller for the amount in the transferred account.  If prorations are not made, the escrow account shall be transferred to Buyer without reimbursement to Seller.  If transfer is permitted by the insurance carrier, the insurance policy in force   [ n/a ] not be transferred to Buyer.  If the insurance policy in force is not transferred, Buyer shall pay the premium for a new policy.

 14.   CASUALTY LOSS: If any part of the Property is damaged by fire or other casualty loss, Seller shall restore the Property to its previous condition as soon as reasonably possible, but in any event by the Closing Date.  If Seller is unable to do so without fault, Buyer may either  (a) terminate this contract and the Earnest Money shall be refunded to Buyer   (b) extend the time for performance up to 15 days and the Closing Date shall be extended as necessary or  (c) accept the property in its damaged condition and accept an assignment of insurance proceeds.  Provisions of the Texas Property Code to the contrary shall not apply.

 15.   DEFAULT:   If Buyer fails to comply with this contract, Buyer shall be in default, and Seller may either  (a) enforce specific performance, seek such other relief as may be provided by law, or both, or  (b) terminate this contract and receive the Earnest Money as liquidated damages, thereby releasing both parties from this contract.  If Seller is unable without fault to make any non-casualty repairs or deliver the Commitment within the time allowed, Buyer may either terminate this contract and receive the Earnest Money as the sole remedy or extend the time for performance up to 15 days and the Closing Date shall be extended as necessary.  If Seller fails to comply with this contract for any other reason, Seller shall be in default and Buyer may either (a) enforce specific performance, seek such other relief as may be provided by law, or both, or  (b) terminate this contract and receive the Earnest Money, thereby releasing both parties from this contract. 

 16.   ATTORNEY’S FEES: If Buyer, Seller, Listing Broker, Other Broker or Escrow Agent is a prevailing party in any legal proceeding brought under or with relation to this contract, such party shall be entitled to recover from the non-prevailing party all costs of such proceeding and reasonable attorney’s fees.

 17.   ESCROW:   The Earnest Money is deposited with Escrow Agent with the understanding that Escrow Agent is not  (a) a party to this contract and does not have any liability for the performance or non-performance of any party to this contract,  (b) liable for interest on the Earnest Money or  (c) liable for any loss of Earnest Money caused by failure of any financial institution in which the Earnest Money has been deposited unless the financial institution is acting as Escrow Agent.  If either party makes demand for the payment of the Earnest Money, Escrow Agent has the right to require from all parties and brokers a written release of liability of Escrow Agent for disbursement of the Earnest Money.  Any refund or disbursement of Earnest Money under this contract shall be reduced by the amount of unpaid expenses incurred on behalf of the party receiving the Earnest Money, and Escrow Agent shall pay the same to the creditors entitled thereto.  At closing, the Earnest Money shall be applied first to any cash down payment, then to Buyer’s closing costs and any excess refunded to Buyer.  Demands and notices required by this paragraph shall be in writing and delivered by hand delivery or by certified mail, return receipt requested.

 18.   REPRESENTATIONS:   Seller represents that as of the Closing Date  (a) there will be no liens, assessments, Uniform Commercial Code or other security interest against the Property which will not be satisfied out of the Sales Price unless securing payment of any loans assumed by Buyer and  (b) assumed loans will be without default.  If any representation in this contract is untrue on the Closing Date, this contract may be terminated by Buyer and the Earnest Money shall be refunded to Buyer.    All representations contained in this contract and an agreement for mediation shall survive closing. 

 19.   NOTICES:   All notices shall be in writing and effective when mailed to or hand-delivered at the addresses shown below.

 20.   FEDERAL TAX REQUIREMENT: If Seller is a “foreign person”, as defined by applicable law, or if Seller fails to deliver an affidavit that Seller is not a “foreign person”, then the Buyer shall withhold from the sales proceeds an amount sufficient to comply with applicable tax law and deliver the same to the Internal Revenue Service together with appropriate tax forms.  IRS regulations require filing written reports if cash in excess of specified amounts is received in the transaction.

 21.   DISPUTE RESOLUTION:  It is the policy of the State of Texas to encourage the peaceable resolution of disputes through alternative dispute resolution procedures.  The parties are encouraged to use an addendum approved by TREC to submit to mediation disputes which cannot be resolved in good faith through informal discussion.

22.   AGREEMENT OF PARTIES: This contract contains the entire agreement of the parties and cannot be changed except by their written agreement.  Addenda which are a part of this contract are:

 None.

 23.   CONSULT YOUR ATTORNEY: Brokers cannot give legal advice.   This is intended to be a legally binding contract.  READ IT CAREFULLY.  If you do not understand the effect of this contract, consult your attorney BEFORE signing.

Don Flusche Real Estate Broker

a division of CJA, Inc.

PO Box 278

Muenster, Texas 76252-0278

940-759-4440   Phone

940-759-4288  FAX

Flusche Auction Co., Inc.

Federal I.D. # 75-2764015

 RECEIPT:

Receipt of  [    ]  Contract and  [    ]  $ ________________________ Earnest Money in the form of  _________________

_________________________________________________________________________________ is acknowledged.

 Escrow Agent: 

 By:  _______________________________________________

 Date:  _______   day of  __________________ , 2008 

EXHIBIT “A”

Legal Description

The surface estate only, less all oil, gas and other minerals in and under the subject property to include All of Lots 3 and 4 of the S.A. Kaker Addition to the City of Bridgeport, Wise County, Texas according to the plat thereof recorded in Volume 4, Page 12, Plat Records of Wise County, Texas.  Lot # 3 dimensions are approximately 133 feet north to south by 100 feet east to west.  Lot # 4 dimensions are approximately 133 feet north to south by 104 / 108 feet east to west.

Additionally:

The Surface Estate Only, in and To:  Being 0.655 acres of land out of the Rebecca Coleman Survey, Abstract No. 155, in Wise County, Texas, more particularly described as:

BEGINNING at an iron pin which is 2675.82 feet South and 1696.76 feet East of the Northwest corner of said Rebecca Coleman Survey;

THENCE South 0 deg 20’ West 132.5 feet to an iron pin;

THENCE North 89 deg. 49’ West 200.5 feet to an iron pin in the East right of way line of the old Highway No. 114;

THENCE North 9 deg. 05’ West along said right of way line 138.79 feet to an iron pin for corner;

THENCE South 88 deg. 40’ East 223.23 feet to the place of Beginning, and being the same land conveyed by Vernie Lee Jordan et us to C.W. Henderson et al, by deed dated January 14, 1963, of record in Volume 251, Page 163, of the deed Records of Wise County, Texas, and by Claude Wayne Henderson et ux to Shaw Equipment Company