CARACOL LIMITED TIME HOME BUILDING INCENTIVE RIDER

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1 CARACOL LIMITED TIME HOME BUILDING INCENTIVE RIDER Attached to and made a part of the Purchase Agreement dated, 2012 (the Agreement ) between Blackberry Island, LP ( Seller ) and ( Purchaser ) Purchaser is eligible for Seller s limited time home building incentive, provided that (i) the Closing Date occurs or on before June 30, 2012, (ii) Seller and Purchaser execute the attached Escrow Agreement at Closing, and (iii) Purchaser complies with the terms of the attached Escrow Agreement. The amount of the home building incentive (the Incentive ) shall be fifty percent (50%) of the Purchase Price, and the terms under which Purchaser may receive the Incentive are more particularly described in the attached Escrow Agreement. Any real estate commission paid on the Closing Date shall be based on amount equal to the Purchase Price less the Incentive. Purchaser s initials: Seller s initials:

2 ESCROW AGREEMENT [Caracol Home Building Incentive] THIS ESCROW AGREEMENT (the Agreement ) is made and entered into as of this day of, 2012 (the Effective Date ), by and among BLACKBERRY ISLAND, LP (the Seller ), (the Purchaser ), and TEXAS TITLE (hereinafter called the Escrow Agent ). W I T N E S S E T H: WHEREAS, of even date herewith, Purchaser is purchasing certain real property located in the Caracol subdivision in Calhoun County, Texas, which real property is more particularly described on Exhibit A attached hereto and incorporated herein by this reference (hereinafter, the Lot ), pursuant to a Purchase Agreement effective, 2012 by and between Seller and Purchaser (as amended, the Contract ); and WHEREAS, pursuant to the terms of Section 14 of the Contract, Seller and Purchaser have agreed, in connection with the consummation of the closing under the Contract, to enter into an escrow agreement regarding a portion of the funds payable to Seller by Purchaser as part of Seller s limited time home building incentive in connection with the closing of the Lot. NOW THEREFORE, for and in consideration of the foregoing premises and for other good and valuable consideration, the receipt of which is acknowledged, Seller, Purchaser, and the Escrow Agent agree as follows: 1. Defined Terms. All capitalized terms used but not defined herein shall have the meanings given such terms in the Contract. 2. Construction Deadlines. Purchaser shall (i) complete the foundation for the residence on the Lot (the Foundation ), as evidenced by a slab survey (the Slab Survey ), on or before the date that is six (6) months after the effective date (the Foundation Deadline ), and (ii) complete the framing of the residence on the Lot (the Framing ), as evidenced by a windstorm inspection report (the Windstorm Report ), on or before the date that is nine (9) months after the Effective Date (the Framing Deadline ). 3. Escrowed Funds; Receipt of Escrowed Funds. Escrow Agent hereby acknowledges receipt of the sum of AND /100 DOLLARS ($ ) (the Escrowed Funds ) to be disbursed in accordance with and subject to the terms of this Agreement. 4. Disbursements: (a) Escrow Agent shall disburse the Escrowed Funds to Purchaser in the event that Purchaser has (i) no later than thirty (30) days after the Foundation Deadline (the Notice Deadline ), submitted to Escrow Agent a fully executed and exhibited Notice to Escrow Agent in the form attached hereto as Exhibit B (the Notice ), which includes a copy of the Slab Survey, certifying that Purchaser has completed the Foundation on or before the Foundation Deadline, and (ii) no later than thirty (30) days after the Framing Deadline (the Draw Request Deadline ), submitted to Escrow Agent a fully executed and exhibited Draw Request in the form attached hereto as Exhibit C (the Draw Request ), which includes a copy of the Windstorm Inspection, certifying that Purchaser has completed the Framing on or before the Framing Deadline. The Notice and the Draw Request must be submitted by Purchaser to Seller prior to the Notice Deadline or the Draw Request Deadline (as applicable) and approved by Seller in the space 2

3 provided (which approval shall not be unreasonably withheld, conditioned or delayed). In the event that Seller fails to respond to a request to approve the Notice or the Draw Request submitted by Purchaser within five (5) business days of such submission, such Notice or Draw Request shall be deemed approved by Seller. (b) (c) (d) In the event that Purchaser fails to submit the fully executed Notice which has been approved (or deemed approved) by Seller by the Notice Deadline, Escrow Agent shall disburse any remaining Escrowed Funds to Seller[, less $, which shall be disbursed to as a commission on the sale of the Lot]. In the event that Purchaser fails to submit the fully executed Draw Request which has been approved (or deemed approved) by Seller by the Draw Request Deadline, Escrow Agent shall disburse any remaining Escrowed Funds to Seller[, less $, which shall be disbursed to as a commission on the sale of the Lot]. Escrowed Funds shall be disbursed by the Escrow Agent to Purchaser, if the circumstances described in paragraph 4(a) apply, or to Seller, if the circumstances described in paragraph 4(b) or 4(c) apply, upon the written direction of Purchaser or Seller, as applicable, within (5) days after a request therefor is made by Purchaser or Seller, as applicable, such request to be accompanied by the certificates and affidavits described in this paragraph 4, as applicable. 5. Interest. The Escrowed Funds shall be held by Escrow Agent in an interest bearing account for the benefit of (i) Purchaser, if the Escrowed Funds are distributed pursuant to Section 4(a) above, and (ii) Seller, if the Escrowed Funds are distributed pursuant to Section 4(b) or 4(c) above. 6. Fees and Expenses. Escrow Agent shall charge a fee for its services hereunder in the amount of $200.00, which fee shall be payable by Purchaser on the Effective Date. 7. Liability of Escrow Agent. Escrow Agent shall be liable only to hold the Escrowed Funds received herewith and to deliver same to persons or entities named herein in accordance with the provisions of this Agreement and any amendments hereto, it being expressly understood that by acceptance hereof Escrow Agent is acting in the capacity of a depository only and shall not be liable or responsible to anyone for any damages, losses, or expenses, unless same shall be caused by its gross negligence or willful malfeasance. Escrow Agent shall not be bound in any way by any other contract or agreement between Seller and Purchaser, whether it has knowledge of any such contract or agreement or of its terms and conditions. 8. Force Majeure Events. The Foundation Deadline and Framing Deadline may be extended for delays caused by Force Majeure Events, but only if Purchaser provides written notice to Seller and Escrow Agent of any such delay within five (5) business days after the occurrence of a Force Majeure Event. As used herein, Force Majeure Events means labor disputes; civil commotion; acts of terrorism; war; war-like operations; sabotage; governmental or judicial regulation; legislation or controls; inability to obtain any necessary materials or services; acts of God; weather; or other conditions beyond Purchaser s reasonable control (but specifically excludes financial inability to perform under this Agreement). 3

4 9. Modification and Termination. This Agreement shall not be modified, revoked, released, or terminated, except upon the mutual consent of Seller, Purchaser and Escrow Agent given in writing and delivered to Escrow Agent. 10. Resignation of Escrow Agent. Should, at any time, any attempt be made to modify this Agreement in a manner that would increase the duties and responsibilities of Escrow Agent, or to modify this Agreement in any manner that Escrow Agent shall not deem desirable, or at any other time, Escrow Agent may resign by notifying the parties hereto in writing, by certified mail to their respective addresses set forth below; and until (i) the acceptance by a successor escrow agent as Escrow Agent as shall be appointed by such parties; or (ii) fifteen (15) days following the date upon which notice was mailed, whichever occurs sooner, Escrow Agent s only remaining obligation shall be to perform its duties hereunder in accordance with the terms of this Agreement. 11. Disagreement. Should any controversy arise between the parties with respect to this Agreement or with respect to the right to receive any portion of the Escrowed Funds, or should Escrow Agent, in its sole discretion, deem it desirable, even in the absence of such controversies, Escrow Agent shall have the right to institute a bill of interpleader in any court of competent jurisdiction to determine the rights of the parties, or Escrow Agent may, in either of such events, refuse to take any action to deliver or dispose of the Escrowed Funds, having the right to hold the same without any right or obligation to deliver the same until it has been served with a judgment properly instructing Escrow Agent as to the disposition of such Escrowed Funds, as provided in any such judgment, even though it is a part of the suit. Should the bill of interpleader be instituted and Escrow Agent becomes involved in litigation in any manner whatsoever on account of this Agreement, the parties hereto agree, and bind their legal representatives, successor, and assigns, to pay Escrow Agent s reasonable attorneys fees incurred and any other reasonable disbursements, expenses, losses, costs, and damages in connection with or arising from such litigation. Escrow Agent shall have no obligation to take any legal action in connection with this Agreement or towards its enforcement, or to appear in, prosecute, or defend any action or legal proceeding which would or might involve it in any cost, expenses, loss, or liability, unless security and indemnity shall be furnished. 12. Binding Effect. This Agreement contains the entire understanding between and among the parties hereto, and shall be binding upon and inure to the benefit of such parties, and subject to its terms, their respective successors, heirs, assigns, and legal representatives. 13. Governing Law. This Agreement is being executed and delivered in and shall be governed and construed and enforced in accordance with the laws of the State of Texas, and venue shall lie in Harris County, Texas. 14. Prevailing Party. The prevailing party in any litigation concerning this Agreement shall be entitled to recover from the other party all court costs and reasonable attorneys fees incurred by such prevailing party in connection with such litigation. 15. Notices. Whenever any notice, demand or request is required or permitted under this Agreement, such notice, demand or request shall be in writing and shall be delivered by hand, sent by registered or certified mail, postage prepaid, return receipt requested, or sent by nationally recognized commercial courier for next business day delivery, or sent by facsimile, to the addresses set forth, or to such other addresses as are specified by written notice given in accordance herewith. All notices, demands or requests shall be deemed given upon the date of delivery to the other party. Any notice, demand or request not received because of a changed address of which no notice was given or because of the refusal or unavailability of a party to accept delivery shall be deemed received by the party to whom addressed on the date of attempted delivery in accordance with this paragraph. 4

5 SELLER: Blackberry Island, LP Three Riverway, Suite 120 Houston, Texas Attn: Robert E. Fondren Phone: (713) Fax No.: (713) PURCHASER: Phone: ( ) - Fax No.: ( ) - ESCROW AGENT: Texas Title 131 N. Virginia Street Port Lavaca, Texas Attn: Ceanne Hons Phone: (361) Fax No.: (361) Counterparts. This Agreement may be executed in any number of counterparts and may be executed by facsimile or portable document format (PDF) signatures, each of which when so executed and delivered shall be deemed an original. It shall not be required that any single counterpart thereof be signed by all the parties hereto so long as each party signs any counterpart hereof. [SIGNATURE PAGE FOLLOWS] 5

6 IN WITNESS WHEREOF, the parties hereto have caused these presents to be executed as of the day and year first above written. SELLER: BLACKBERRY ISLAND, LP, a Texas limited partnership Blackberry Island GP, LLC, a Texas limited liability company, a general partner C & O Development Corporation, a Texas corporation, its sole member and manager PURCHASER: ESCROW AGENT: TEXAS TITLE [SIGNATURE PAGE TO ESCROW AGREEMENT]

7 EXHIBIT A [insert Lot description]

8 EXHIBIT B NOTICE TO ESCROW AGENT Reference is hereby made to that certain Escrow Agreement (the Agreement ) dated, 2012 and executed by Blackberry Island, LP ( Seller ), ( Purchaser ) and Texas Title ( Escrow Agent ), wherein certain funds were escrowed with Escrow Agent in connection with Seller s home building incentive program. In connection therewith, before me, the undersigned authority, on this day personally appeared Purchaser, who, being by me first duly sworn, certifies that (i) Purchaser has completed the Foundation on or before the Foundation Deadline, and (ii) attached hereto as Schedule 1 is a true and correct copy of the Slab Survey which reflects completion of the Foundation on or before the Foundation Deadline. I understand that this affidavit is made for the purposes of inducing Seller to approve and consent to this Notice and for ultimately inducing Escrow Agent to make disbursement to Purchaser upon satisfaction of the conditions in the Agreement. Escrow Agent and Seller will rely upon the accuracy of matters stated in this affidavit. Purchaser has undertaken all investigation necessary to make all of the foregoing statements. EXECUTED as of the date first above written. THE STATE OF TEXAS COUNTY OF This instrument was acknowledged before me, the undersigned authority, on this day of, 201 by. Notary Public in and for the State of Texas Printed Name of Notary My Commission Expires:

9 CONSENTED TO AND APPROVED ON, 201 : BLACKBERRY ISLAND, LP, a Texas limited partnership Blackberry Island GP, LLC, a Texas limited liability company, a general partner C & O Development Corporation, a Texas corporation, its sole member and manager

10 SCHEDULE 1 TO NOTICE TO ESCROW AGENT [attach slab survey]

11 EXHIBIT C Form of Draw Request DRAW REQUEST Reference is hereby made to that certain Escrow Agreement (the Agreement ) dated, 2012 and executed by Blackberry Island, LP ( Seller ), ( Purchaser ) and Texas Title ( Escrow Agent ), wherein certain funds were escrowed with Escrow Agent in connection with Seller s home building incentive program. Purchaser hereby makes a request for disbursement of the Escrowed Funds to Purchaser, in accordance with the terms and provisions of the Agreement. In connection therewith, before me, the undersigned authority, on this day personally appeared Purchaser, who, being by me first duly sworn, certifies that (i) the Framing has been completed on or before the Framing Deadline, and (ii) attached hereto as Schedule 1 is a true and correct copy of the Windstorm Report which reflects that the Framing was completed on or before the Framing Deadline. I understand that this affidavit is made for the purposes of inducing Seller to approve and consent to this Draw Request and for inducing Escrow Agent to make such disbursement to Purchaser. Escrow Agent and Seller will rely upon the accuracy of matters stated in this affidavit. Purchaser has undertaken all investigation necessary to make all of the foregoing statements. EXECUTED as of the date first above written. THE STATE OF TEXAS COUNTY OF This instrument was acknowledged before me, the undersigned authority, on this day of, 2012 by. Notary Public in and for the State of Texas Printed Name of Notary

12 My Commission Expires: CONSENTED TO AND APPROVED ON, 2012: BLACKBERRY ISLAND, LP, a Texas limited partnership Blackberry Island GP, LLC, a Texas limited liability company, a general partner C & O Development Corporation, a Texas corporation, its sole member and manager

13 SCHEDULE 1 TO DRAW REQUEST [attach windstorm inspection]

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