Form 24-26

Before completing this form, the attorney should complete the real estate sales contract checklist (RC), form 4-1 in this manual, and the supplemental checklist (SC), form 24-19 in this chapter. Information called for in this form by item numbers corresponds with the same-numbered items on those check­lists.

The following contract follows the format of the real estate sales contract at form 4-2 in this manual. The provisions below are revisions to that contract to reflect the special aspects applicable to a sale of property comprising a condominium project conditioned on the owners terminating the condominium regime before closing, with the condominium association acting as trustee being the seller in accor­dance with chapter 82 of the Texas Uniform Condominium Code.

At different stages in the drafting process of this sales contract and the condominium termination agreement, form 24-27 in this chapter, this form and all of its exhibits might be included as an exhibit in the other, and vice versa. To prevent confusion between the two forms’ exhibits, this form’s exhibits are lettered (“Exhibit A” etc.) and form 24-27’s exhibits are numbered (“Exhibit 1” etc.). Before for­warding these documents to the unit owners ahead of the special meeting, references to these two forms as exhibits in each other should be updated accordingly.

Real Estate Sales Contract Condominium Regime Termination and Sale of Property

This Real Estate Sales Contract (“Condominium Regime Termination and Sale of Prop­erty,” which together with all amendments is the “Contract”) to buy and sell real property between [RC item 2], a Texas [type of entity, e.g., nonprofit corporation] (“Association”), act­ing herein in its individual capacity and, upon recordation of the Condominium Termination Agreement following the Ratification Date, in its capacity as trustee pursuant to section 82.068 of the Texas Property Code (Texas Uniform Condominium Act, or TUCA) (“Seller”) for the owners of each of the units (each, together with all general and limited common ele­ments and appurtenances thereto being called a “Unit” in this Contract) in the “[SC item 22]” (“Condominiums”), hereinafter referred to as “Unit Owners,” and [RC item 3], [a/an] [SC item 3a] (“Buyer”), is effective on the date of the last of the signatures by Seller and Buyer and by the Title Company as escrow agent as defined below to acknowledge receipt of the Contract and the initial deposit of Earnest Money in good funds (“Effective Date” of this Contract). Particular provisions addressing termination of the condominium regime of the Condomini­ums and the sale by the Association, as trustee for the Unit Owners, are set out in section L. below.

The exhibits listed in section K. below are attached to and incorporated as part of the Contract.

A.Purchase and Sale of Property

A.1.Purchase and Sale Agreement.      Subject to the terms and provisions of this Contract, including conditioned on the satisfaction of the Condominium Termination Condi­tions, Seller agrees to sell and convey to Buyer, and Buyer agrees to buy and pay Seller for, the property [RC item 1] located at [RC item 4], state of Texas, and more fully described in Exhibit A (“Land”), together with improvements to the Land (“Improvements”), the leases associated with the Land and Improvements (“Leases”), and the personal property described in Exhibit A, all collectively referred to as the “Property.” See paragraphs L.1.g., , L.8., and L.9. below regarding Postclosing Leases and Subleases and Removables.

B.Earnest Money

B.1.Deposit of Earnest Money.      Upon execution of this Contract, Buyer will deposit Earnest Money in good funds in the amount of [RC item 6], along with this fully exe­cuted Contract by Seller and Buyer with [RC item 7] (the “Title Company”), as escrow agent, located at [RC item 8], which sum may be invested by the Title Company in a federally insured, interest-bearing account pending disposition thereof in accordance with this Contract (such sum and the interest accrued thereon being hereinafter referred to collectively as the “Earnest Money”) and applied according to the terms of this Contract. The Title Company will acknowledge receipt of the Earnest Money by signing the Title Company’s “Receipt for Earnest Money Deposit” at the end of this Contract and send copies thereof to Seller and Buyer. See paragraph D.2.b. below regarding additional earnest money.

B.2.Interest on Earnest Money.      Buyer may direct the Title Company to invest the Earnest Money in an interest-bearing account in a federally insured financial institution by giving notice to the Title Company and satisfying the Title Company’s requirements for investing the Earnest Money in an interest-bearing account. Any interest earned on the Ear­nest Money will become part of the Earnest Money.

B.3.Application of Earnest Money.      If the sale of the Property is consummated as contemplated in this Contract, the Earnest Money will be applied to the Purchase Price at Closing. If this Contract is terminated before consummation of the sale of the Property in accordance with this Contract, the Earnest Money will be applied in accordance with sections D. and G. below.

B.4.Payments to Seller

B.4.a.Initial Payment to Seller.      Within three business days after the deposit of the Earnest Money with the Title Company, the Title Company is to pay $[SC item 24] of the deposit to Seller (the “Initial Payment to Seller”). The Initial Payment to Seller is consider­ation to Seller for entering into this Contract and for the option granted by Seller to Buyer to terminate this Contract during the Inspection Period (an “Option Fee”). Upon payment of the Initial Payment to Seller, it no longer is part of the Earnest Money. Upon Closing, the Initial Payment to Seller is to be applied on the Purchase Price.

B.4.b.Subsequent Payment to Seller.      The Title Company is to pay an additional $[SC item 25] of the deposit to Seller (the “Subsequent Payment to Seller”) within three busi­ness days following the Ratification Date. The Subsequent Payment to Seller is consideration to Seller for entering into this Contract and for the option granted by Seller to Buyer to termi­nate this Contract during the Inspection Period (an “Option Fee”). Upon payment of the Sub­sequent Payment to Seller, it no longer is part of the Earnest Money. Upon Closing, the Subsequent Payment to Seller is to be applied on the Purchase Price.

C.Title and Survey

D.Inspection Period; Buyer’s Right to Terminate

D.2.Buyer’s Right to Terminate

D.2.a.Buyer’s Termination

D.2.b.Additional Earnest Money.      If Buyer does not terminate this Contract pursuant to this provision, Buyer must deposit the additional Earnest Money in the amount of $[SC item 6a] with the Title Company on or before the end of the Inspection Period (the “Addi­tional Earnest Money”) to be applied to the Purchase Price or distributed in accordance with the terms of the Contract.

D.4.Entry onto Property.      Buyer and its duly authorized agents and representatives may enter the Property before Closing, at Buyer’s cost and risk, subject to the following:

D.4.a.Insurance.      Buyer must deliver evidence to Seller that Buyer and all contrac­tors of Buyer entering the Property have commercial general liability insurance, business auto liability insurance (including owned, leased, nonowned, and hired vehicles), and workers’ compensation insurance with coverages and in amounts set forth in Exhibit E, insuring Seller and Seller-related persons as additional insureds (except not on the workers’ compensation insurance) for liabilities and damages caused in whole or in part by Buyer or its contractors. If the insured party’s liability insurance limits the additional insured coverage to the limits spec­ified in a written agreement, the minimum limits required by this Contract for that insurance are the greater of the applicable limits required by this Contract or the limits actually carried by the insured party. The liability insurance required by this Contract will be primary and non­contributory. All Buyer consultants that are to conduct any environmental testing on the Prop­erty are to have environmental liability and pollution liability insurance in amounts and coverages reasonably acceptable to Seller, and Seller and Seller-related persons are to be insured on that insurance as additional insureds in accordance with Exhibit E. Also see para­graph L.5.f. below.

E.Representations; As Is, Where Is Provision; Environmental Matters

F.Condition of Property Until Closing; Cooperation; No Recording of Contract

F.2.Casualty Damage

F.2.a.Casualty Before Closing.      Seller will notify Buyer promptly after discovery of any casualty damage to the Property. Seller will have no obligation to repair or replace the Property if it is damaged by casualty before Closing.

F.2.b.Buyer’s Termination Option.      Buyer may terminate this Contract if the casu­alty damage that occurs before Closing would materially affect Buyer’s intended use of the Property, by giving notice to Seller within fifteen days after receipt of Seller’s notice of the casualty (or before Closing if Seller’s notice of the casualty is received less than fifteen days before Closing).

F.2.c.If Contract Is Not Terminated.      If Buyer does not terminate this Contract, Seller will at Closing (i) convey the Property to Buyer in its damaged condition and (ii) assign to Buyer all of Seller’s rights under any property insurance policies covering the Property less any amounts previously paid or incurred by Seller to repair the Property.

G.Disposition of Earnest Money After Termination

H.Closing      

In addition to this section H., see the additional provisions for Closing at section L.7. below.

H.4.Transaction Costs

H.4.c.Ad Valorem Taxes

i.Unit Owners’ Property.      Ad valorem taxes for the Property owned by Unit Own­ers before recordation of the Condominium Termination Agreement are payable by the Unit Owners as provided in Exhibit K.

ii.Property Owned by Association

(a)Proration for Year of Closing.      Ad valorem taxes on all property assessed in the name of the Association as the taxpayer and owned by the Association (“Property Owned by the Association”) for all years before the calendar year of Closing must be paid by Seller at or before Closing. Ad valorem taxes for the Property Owned by the Association for the calendar year of Closing will be prorated between Buyer and Seller as of the Closing Date. If the ad valorem taxes for the current year are assessed as to Property Owned by the Association, the Title Company will pay the current year’s ad valorem taxes at Closing.

(b)If Current Year’s Taxes Not Yet Assessed.      If the ad valorem taxes for the current year are not assessed, Seller’s portion of the prorated taxes for Prop­erty Owned by the Association will be paid to Buyer at Closing as a credit to the Purchase Price. Buyer will assume the obligation to pay, and will pay in full, such taxes for the year of Closing before delinquency as to the Property Owned by the Association and the Property formerly the property of the con­dominium regime. If the assessment for the calendar year of Closing is not known at the Closing Date, the proration will be based on tax rates for the previous tax year applied to the most current assessed value, and Buyer and Seller will adjust the prorations in cash within thirty days after the actual assessment and taxes are known.

(c)Notices Received by Seller from Tax Authorities.      Seller will promptly notify Buyer of all notices of proposed or final tax valuations and assess­ments that Seller receives after the Effective Date and after Closing.

H.4.d.Income and Expenses

i.Proration as of Closing Date.      Income and expenses, including service contracts assumed by Buyer, general and special assessments, and sewer, water, and other utility costs pertaining to the Property Owned by the Association will be prorated as of the Closing Date on an accrual basis and paid at Closing as a credit or debit adjustment to the Purchase Price. Income and expenses pertaining to Units of the Unit Owners are to be handled at Closing as follows: (a) income (for example, rents) attributable to Units before the Closing Date are to belong to the respective Unit Owner of each respective Unit, and (b) expenses (for example, utilities) of the Units are to be paid at Closing by the respective Unit Owner of each of the former Units. Income and expenses of former Units that continue to be occupied by the former Unit Owners or their tenants are to be allocated between Buyer and the for­mer Unit Owners and paid as provided in the leases by Buyer, as Landlord, to the former Unit Owner to be executed as of Closing.

ii.Postclosing Invoices.      Invoices that are received after Closing for operating expenses of the Property incurred on or before the Closing Date and not adjusted and paid at Closing will be borne by and payable by Buyer.

H.4.e.Postclosing Adjustments.      If errors in the prorations made at Closing are iden­tified after Closing, the expense thereof will be borne by and payable by Buyer.

I.Default and Remedies

J.Miscellaneous Provisions

K.Exhibits

The following exhibits are attached to and incorporated as part of the Contract:

Exhibit A—Legal Description of Land and Personal Property

Exhibit B—Representations; Environmental Matters

Exhibit C—Seller’s Records

Exhibit D—Notices, Statements, and Certificates

Exhibit E—Insurance for Buyer and Buyer’s Consultants

[Exhibit F—Condominium Termination Agreement]

Exhibit G—Special Warranty Deed

Exhibit H—Bill of Sale and Assignment

Exhibit I—Assignment of Assumed Contracts and Association Leases

Exhibit J—Some Postclosing Lease Terms; Form of Postclosing Lease and Postclosing Sublease

Exhibit K—Settlement Activities with Unit Owners

L.Additional Provisions

The following are additional provisions to the Contract. If any of the provisions in this section L. conflict with any other provisions of the Contract, these additional provisions con­trol and supersede the conflict.

L.1.Recitals

L.1.a.Condominiums.      “[SC item 22]” is a condominium under the Texas Property Code created by the documents comprising the “Declaration” recorded in the public records of [SC item 23] County, Texas.

L.1.b.Condominium Acts.      The Condominiums were established as a condominium by the Declaration in accordance with article 1301a of the Texas Revised Civil Statutes, the state statute that was later codified as chapter 81 of the Texas Property Code, which statute is known as the Texas Condominium Act. The Unit Owners amended the Declaration and the Bylaws to be governed by chapter 82 of the Texas Property Code, which statute is known as the Texas Uniform Condominium Act and is referred to herein as TUCA.

L.1.c.Association.      [RC item 2] is a Texas nonprofit corporation formed to be the “council of co-owners” (also known as the “Association”) governing the Condominiums.

L.1.d.TUCA’s Condominium Termination Provisions.      Section 82.068 of TUCA provides the following:

i.Agreement by Requisite Number of Unit Owners.      An agreement of Unit Owners to terminate a condominium regime must be evidenced by the execution or ratifi­cation of a condominium termination agreement by Unit Owners having an aggre­gate ownership interest of at least 80 percent (the “Requisite Number”).

ii.Terms of Sale Set Forth in Condominium Termination Agreement.      The termina­tion agreement sets forth the terms of sale of the property comprising the former condominium.

iii.Owner’s Sales Proceeds Percentage per TUCA Appraisal.      The proceeds of the sale shall be distributed by the Association to the Unit Owners pursuant to an inde­pendent appraisal by an appraiser (the “TUCA Appraiser”) of the fair market value (the “TUCA Appraisal”) determining each Unit Owner’s share of the proceeds of the sale (the “Owner’s Sales Proceeds Percentage”).

iv.TUCA Appraisal Disapproval Period.      The decision of the appraiser is final unless disapproved by Owners of Units to which 25 percent of the votes in the Association are allocated (the “Disapproval Number”) not later than the thirtieth day after the date of distribution of the TUCA Appraisal to the Unit Owners (the “TUCA Appraisal Disapproval Period”).

L.1.e.On Termination, Title to Property Vests in Association as Trustee.      Section 82.068 of the Texas Property Code (TUCA), a copy of which section is attached as an exhibit to the Condominium Termination Agreement [attached to this Contract as Exhibit F], pro­vides that upon termination of a condominium pursuant to a condominium termination agree­ment, title to the real property constituting the condominium vests in the Association as trustee for the holders of all interests in the Units with the power to effect the sale of the prop­erty of the condominium free and clear of the Condominium Documents and the condo­minium regime created thereby.

L.1.f.Sale.      The Association enters into this Contract for the sale of the Property conditioned on the approval by the Requisite Number of the Unit Owners to terminate the condominium regime and the Association’s compliance with the requirements of section 82.068 of the Texas Property Code. Buyer desires to purchase the Property from Seller, upon and subject to the terms and conditions of this Contract.

L.1.g.Postclosing Leases and Subleases.      The parties additionally wish to provide an opportunity for the former Unit Owners to use their former Units postclosing as tenants of Buyer for a limited time and their tenants, if any, to use the Unit Owners’ former Units as sub­tenants of the former Unit Owners, to facilitate the former Unit Owners and their tenants relo­cating to replacement living accommodations and to remove certain Removables.

L.1.h.Entitlements.      The parties have a keen interest in the city issuing a certificate of appropriateness and demolition permit for the demolition of the structures a part of the Condominiums, in order for the sale to Buyer to close. Seller also has a keen interest in closely participating in Buyer’s preparations for, contacts with, and presentations to the city in order to avoid the city issuing a determination that all or a portion of the Condominiums is a historic landmark that may not be demolished.

L.2.Condominium Termination Conditions

L.2.a.Conditions.      Buyer and Association’s obligations to consummate the transac­tion contemplated in this Contract is subject to the satisfaction of the following conditions (“Condominium Termination Conditions”):

i.Requisite Number Approve Termination.      The Requisite Number of Unit Owners approve termination of the Condominiums (the “Termination Approval”) in accor­dance with the procedures set forth in TUCA (Texas Property Code chapter 82) and ratify a condominium termination agreement whereby the Condominiums established by the Declaration will be terminated and the Property sold pursuant to the terms and conditions of this Contract.

ii.TUCA Appraisal Not Disapproved by Disapproval Number.      The Disapproval Number of Unit Owners do not on or before the expiration of the TUCA Appraisal Disapproval Period disapprove the Appraisal.

iii.Title Company’s Commitment to Insure Termination of Condominium.      The Title Company commits to issue the Owner’s Policy to Buyer insuring fee simple inde­feasible title in Buyer as of Closing as free and clear of the Condominium Docu­ments and the condominium regime without satisfaction of any further conditions related to approval by the Unit Owners of termination of the condominium or approval of the TUCA Appraisal or the Unit Owner’s respective interest in the proceeds of the sale to Buyer (“Title Company’s Commitment to Insure Termina­tion of the Condominium”).

iv.Recordation of Condominium Termination Agreement and Ratifications.      The Title Company records the Termination Agreement and Ratifications as directed in paragraph L.3. below and as required by TUCA and this Contract.

L.2.b.Seller’s Actions

i.Submission to Title Company in Advance.      The Title Company is to review among other matters (a) the proceedings by which the Declaration was amended to adopt TUCA as applicable to the Condominiums, (b) the proceedings and docu­mentation to change the percentage approval required to terminate the Condomini­ums to 80 percent of the votes in the Association, (c) the proceedings and documentation for the adoption of the Condominium Termination Agreement by Seller, (d) the TUCA Appraisal, and (e) the execution of the Ratifications by the Requisite Number of Unit Owners. Seller shall provide the Title Company with such documentation and take such actions as the Title Company requires for it to determine if it can issue the Title Company’s Approval of the Condominium Ter­mination. The Association is to, promptly following the Effective Date of this Contract and before submittal to the Unit Owners, submit the form of proposed Condominium Termination Agreement to the Title Company (with a copy to Buyer) together with a request that the Title Company review and confirm that, if the same is executed and filed of record, the Title Company is willing to issue the Owner’s Policy without taking exception for the Condominium Documents, the efficacy of the Condominium Termination Agreement, or any matter related thereto. The parties shall work reasonably and in good faith to satisfy any objec­tions or comments of the Title Company.

ii.Communications with Buyer.      Seller shall keep Buyer apprised of actions to be taken in seeking the termination of the Condominiums, and as to all related com­munications by Unit Owners with Seller. Seller shall copy Buyer on all communi­cations with the Title Company.

iii.Escrow of Condominium Termination Agreement.      Seller shall execute and escrow the Condominium Termination Agreement with the Title Company as soon after the Effective Date of this Contract as is reasonably possible.

iv.TUCA Appraisal.      Seller shall diligently pursue obtaining the TUCA Appraisal required by section 82.068(f) of TUCA. The TUCA Appraisal is to be obtained and sent to Unit Owners at least thirty days before circulation of the Condominium Termination Agreement to the Unit Owners.

v.Submit to Unit Owners for Termination Ratification.      Seller shall submit to the Unit Owners for Ratification of the Condominium Termination Agreement within thirty days of receipt by the Unit Owners of the TUCA Appraisal. Seller is to dili­gently pursue seeking Ratification of the Condominium Termination Agreement and the TUCA Appraisal.

vi.Notice to Buyer.      The Association agrees to notify Buyer promptly after satisfac­tion of the Condominium Termination Conditions.

L.2.c.Contract Termination Option.      Either party may terminate this Contract by sending notice to the other party after the Ratification Date, which is 120 days after the Effec­tive Date of this Contract, if the Condominium Termination Conditions have not been satis­fied as of sending of the Contract termination notice. If this Contract is so terminated, the Earnest Money is to be refunded by the Title Company to the Buyer and, if already released to Seller pursuant to the provisions of this Contract, Seller is to retain the Initial Payment to Seller. Upon such termination, this Contract shall become null and void, and neither party shall have any further rights or obligations under this Contract, except for those that this Con­tract provides survive termination of the Contract.

L.2.d.Deposit Allocation

i.Before Ratification Date.      If Buyer delivers or is deemed to have delivered a Contract termination notice or if this Contract terminates on or before the Ratifica­tion Date, the Earnest Money and all interest earned on the Earnest Money (which does not include the Initial Payment to Seller if the same has been released to Seller pursuant to paragraph B.4.a. above) shall be returned to Buyer, except for the Option Fees, which are to be paid and disbursed by the Title Company in such event.

ii.After Ratification Date.      If Buyer delivers or is deemed to have delivered a Con­tract termination notice after the Ratification Date and on or before the expiration of the Inspection Period, the Earnest Money and all interest earned on the Earnest Money (which does not include the Option Fees if the same have been released to Seller) shall be returned to Buyer.

iii.After Inspection Period.      If Buyer terminates this Contract after the Inspection Period, the Earnest Money is nonrefundable to Buyer and is to be released by the Title Company to Seller unless the termination is pursuant to paragraph I.1.a. above, in which case the Earnest Money including the Additional Deposit is to be disbursed by the Title Company as provided in that paragraph of the Contract.

L.3.Recordation of Condominium Termination Agreement and Ratifications.      The Condominium Termination Agreement together with the Ratifications will not be recorded until immediately before the recording of the conveyance to the Buyer, at which time the ter­mination of the Condominiums will become effective.

L.4.Representations and Warranties

L.4.a.Actual Knowledge.      As used in this Contract, including section E., “actual knowledge” means that a representation is qualified by or given to the extent of the actual knowledge of the party making the representation, is made without investigation of the mat­ters stated therein, and is not constructive or imputed knowledge of what the party should have known based on further inquiry. A representation of Seller is based solely on the current actual knowledge of the current members of the board of directors of Seller on the date the representation is made. A representation made to one’s actual knowledge is not a representa­tion or warranty that the condition or circumstance does or does not exist, but is merely a statement of the party’s actual knowledge, if any, of the condition or circumstance.

L.4.b.Made As of Effective Date; Made Again as of Closing Date.      The representa­tions of each party set forth in this Contract are made as of the Effective Date of this Contract and shall be and are deemed to have been remade subject to the Exclusions as of the Closing Date.

L.5.Inspection Period; Buyer’s Right to Terminate

L.5.a.Inspections and Investigations.      During the Inspection Period and thereafter until Closing, and conditioned on Buyer and Buyer’s Consultants compliance with the Proto­cols set forth below, Buyer and its agents, contractors, engineers, surveyors, appraisers, audi­tors, and other representatives (“Buyer’s Consultants”) shall have the right to contact tenants and Unit Owners and enter on the Property (but only after making prior arrangements with the respective Unit Owner and its tenant for entry) to inspect, examine, survey, obtain engineering inspections, appraise, and otherwise do that which, in the opinion of Buyer, is necessary to determine the condition of the Property and the suitability of the Property for the uses intended by Buyer (“Inspections and Investigations”).

L.5.b.Cooperation.      To the extent it may do so at no cost to Seller and if it may do so without obtaining the permission of others, Seller shall take all reasonable actions necessary or appropriate for Buyer to conduct its Inspections and Investigations of the Property; how­ever, Seller is not obligated to give Buyer access to a Unit.

L.5.c.Buyer Seeking Entitlements

i.Buyer’s Historical Preservation Expert.      Subject to Seller’s review and approval, which is not to be unreasonably withheld, Buyer at Buyer’s expense agrees to hire and keep hired through the Inspection Period an expert on historic landmarks (“Buyer’s Historical Preservation Expert”) that will meet with the city’s historic preservation officer and city staff and testify at the historic landmark commission, then the planning commission, and perhaps the city council, to obtain approval of Buyer’s project including the issuance of a certificate of appropriateness and dem­olition permit. Buyer is to obtain approval of the terms of the services contract, and all modifications thereof, with Buyer’s Historical Preservation Expert, which approval by Seller is not to be unreasonably withheld. Buyer agrees to provide Seller with a copy of the signed services contract and all modifications. Buyer is to promptly provide Seller with a copy of all written communications between Buyer and Buyer’s Historical Preservation Expert.

ii.Coordination with Seller’s Representatives.       Buyer’s Historical Preservation Expert and Buyer’s legal counsel (“Buyer’s Representatives”) and Buyer are to coordinate their efforts with Seller’s historical preservation consultant and Seller’s legal counsel (each a “Seller’s Representative”) and Seller, including (a) meeting with Seller’s Representatives to explain the Buyer’s Historical Preservation Expert’s presentation, strategy, and opinions on obtaining approval of the demoli­tion permit and certificate of appropriateness before each meeting with the city staff, the historic landmark commission, the planning commission, and the city council (“City Proceedings”) and (b) coordinating with Seller’s Representatives the scheduling of City Proceedings to permit participation before and at the city meetings.

iii.City Proceedings.      Buyer and Buyer’s Representatives are not to take actions, including presentations to the city staff, board, commission, or council, if in Seller’s judgment such action (if taken) could result in a determination that the Condominiums include a historic landmark. The parties will revise the proposed action as is acceptable to Seller in its reasonable judgment or not take such action if Seller does not agree with the action to be taken.

L.5.d.Protocols.      Buyer agrees that it and Buyer’s Consultants will comply with the following protocols in conducting the Inspections and Investigations (“Protocols”):

i.Qualified Inspectors.      Buyer must employ only trained and qualified inspectors to inspect the Property and the Units.

ii.Advance Notice of Inspections.      Buyer must notify Seller, in advance, of when the inspectors will be on the Property, and Seller will be entitled to have a repre­sentative present during the inspection.

iii.Abide by Access Rules.      Buyer and Buyer’s Consultants must abide by reasonable entry rules or requirements (“Access Rules”), including parking spaces to be used by Buyer and Buyer’s Consultants, hours of Inspections and Investigations at the Property, noise and debris control, and reasonable designation of areas for inva­sive testing, provided, however, that Seller understands that such invasive testing will encompass drilling holes through pavement and testing for asbestos in walls. Seller and Buyer shall expeditiously prepare for and provide to Unit Owners a list of procedures and Access Rules that Buyer will follow and employ in seeking access to the Property, including Unit Owners’ Units, with an aim to inform the Association and its Unit Owners of the actions and procedures Buyer and Buyer’s Consultants will employ and undertake.

iv.No Unreasonable Interference.      Buyer must not unreasonably interfere with existing operations or occupants of the Property.

v.Unit Access.      Seller shall use its good-faith efforts to arrange access to the Units. Seller’s good-faith efforts do not include levying fines or suing Unit Owners that are not cooperative.

vi.Reports.      Buyer shall cause the following written reports of Buyer’s Consultants to be addressed to Buyer and Seller, as reliance parties, delivered to Buyer: phase I, phase II if obtained, geotechnical, and the Survey.

vii.Insurance.      Buyer shall comply with the insurance requirements set out in Exhibit E.

L.5.e.Protections.      All of Buyer’s Inspections and Investigations must be conducted so as not to permanently damage the Property. All costs and expenses related to Buyer’s Inspections and Investigations will be paid by Buyer in full and when due. If Buyer’s Inspec­tions and Investigations result in any material adverse change, alteration, or damage to the Property, Buyer will restore the Property to substantially the condition that existed immedi­ately before that adverse change, alteration, or damage, at Buyer’s sole expense, provided, however, Buyer has no liability for any diminution in value suffered or incurred by Seller or Unit Owners as a result of the discovery of any preexisting condition on, in, under, or about the Property by Buyer or Buyer’s Consultants.

L.5.f.Liability Insurance.      Before any entry by Buyer or Buyer’s Consultants, Buyer must secure, at Buyer’s expense, insurance meeting at least the specifications set forth in Exhibit E. Before entry or access to the Property, as a condition to entry, Buyer is to provide Seller with a certificate of insurance for this coverage from the agents for the insurers certified to Seller as certificate holder and with a copy of each of the endorsements required by the insurance specifications attached to the certificate. Neither Seller’s failure to require evidence that the insurance requirements have been met, nor Seller’s failure to object to evidence indi­cating that the requirements have not been met, will constitute a waiver of those requirements.

L.6.Title Insurance

L.6.a.Title Commitments.      The Title Commitment shall show the status of title to each of the Units, (i) listing in Schedule A of the Title Commitment (“Schedule A”) the names of the record owners of each of the Units; (ii) revising Schedule B of the Title Commitment (“Schedule B”) to update and revise the list of title insurance exceptions in Schedule B as determined by the Title Company; and (iii) setting out in Schedule C of the Title Commitment (“Schedule C”), for each Unit, the record owner of the Unit and a listing for each Unit of the liens and other encumbrances that are required by the Title Company to be released or other­wise satisfied on Closing. The Title Company is to update and reissue its Title Commitment as follows: (i) on request of a party, (ii) after the date of the recordation of an amendment to the Condominium Documents, (iii) after the Ratification Date, (iv) after the Inspection Period, and (v) before Closing. The Title Commitments shall include hyperlinks to copies of all docu­ments listed in the schedules or be accompanied by copies of the listed documents (“Excep­tion Documents”).

L.6.b.Extended Coverage Endorsements.      The Owner’s Policy to be issued to Buyer at Closing shall contain, to the extent the Title Company agrees to issue, Extended Coverage Endorsements. For purposes of this Contract “Extended Coverage Endorsements” means the endorsements and emendations to the Owner’s Policy as may be requested by Buyer to the extent permitted by the title insurance rules and regulations promulgated by the Texas Depart­ment of Insurance, that the Title Company is willing to issue upon satisfaction of the Title Company’s requirements and payment by Buyer on or before Closing of the associated title insurance premium and charge for the Extended Coverage Endorsements.

L.6.c.Pro Forma Owner’s Policy.      On a party’s request, from time to time, the Title Company is to issue and deliver to the parties a pro forma Owner’s Policy of title insurance including pro formas of the Extended Coverage Endorsements.

L.6.d.Insured Closing Letters.      The Title Company is to order and cause to be deliv­ered to each of the parties, for the party’s processing, a seller’s and a buyer’s insured closing letter issued by the title underwriter for the Title Company.

L.6.e.Potential Circumstances.      The parties acknowledge that as of Closing any or all of the following circumstances may exist, and Seller is not obligated to cause them not to exist (“Potential Circumstances”):

i.unit Owners in possession but not under a Postclosing Lease;

ii.tenants of Unit Owners in possession but not under a Postclosing Sublease;

iii.uncooperative Unit Owners; and

iv.insufficient sales proceeds due an Owner to pay off all liens on the Unit.

L.7.Closing

L.7.a.Action by Title Company.      At Closing, the Title Company is to perform the escrow, closing, and title insurance issuance services performed by title insurance companies licensed in Texas including the following:

i.Record Documents.      The Title Company is to record in the public records the closing documents required for issuance of the Owner’s Policy and additional doc­uments as the parties direct.

ii.Closing Statement.      The Title Company is to prepare Closing Statements in accordance with this Contract. At least two business days, but no more than seven business days, before the date scheduled for the Closing, the Title Company shall prepare and deliver to Buyer and Seller for their respective review and approval a preliminary Closing Statement relating to the consummation of the transactions contemplated by this Contract. The Closing Statement shall include, without lim­itation, calculations of estimated prorations as provided for in this Contract and disbursement of the Purchase Price and shall reflect the various charges and cred­its applicable to the parties as provided in this Contract. Based on Seller’s and Buyer’s respective comments on the preliminary Closing Statement, the Title Company shall revise the preliminary Closing Statement and deliver a revised Closing Statement to each party at least one business day before the scheduled Closing. Buyer’s and Seller’s written approvals of the Closing Statement shall be a condition precedent to the Closing, but those approvals shall not be withheld or delayed if the Closing Statement is in accordance with the terms of this Contract.

iii.Pro Forma Policy.      The Title Company is to issue to the parties pro formas of the Owner’s Policy (and the Loan Policy if a loan to Buyer is also to occur at Closing) for the parties’ review and acceptance (the Title Company is to deliver the Owner’s Policy to Buyer in accordance with the pro forma policy). The original of the Owner’s Policy is to be delivered to Buyer in the ordinary course of business.

iv.Updated Title Commitment.      The Title Company is to update the Title Commit­ment to a current date and provide it to the parties for review and acceptance.

v.Escrow Closing Instructions.      The Title Company is to coordinate with the par­ties the review and agreement upon closing escrow instructions.

vi.Settlement Activities with Unit Owners.      Before the Closing Date, the Title Com­pany is to coordinate settlement activities with each of the Unit Owners, their lenders, and any other persons the Title Company determines are appropriate. The Title Company will keep the parties apprised of the settlement process. Some of the actions to be required by the Title Company of Unit Owners, including forms, are set out in Exhibit K.

vii.Disbursement of Funds.      The Title Company will pay at Closing out of the Pur­chase Price, for the Association’s account, the expenses to be paid at Closing by the Association and will apply any prorations allocable to Seller to the remainder of the Purchase Price. Thereafter, in accordance with TUCA, the Title Company will apportion between the Unit Owners the remainder of the Purchase Price on the basis of each Unit Owner’s interest, as determined by the appraisal completed in accordance with TUCA, and from such apportioned Purchase Price, the Title Company will pay any mortgage or deed of trust, assessments due the Association, other liens encumbering each Unit Owner’s Unit, and other costs necessary to resolve any Schedule C matters on the Title Commitment with regard to each such Unit Owner. The remainder of the apportioned amounts after those payments, sub­ject to any required IRS withholding (20 percent if the particular Unit Owner does not provide a nonforeign affidavit), will be paid to each respective Unit Owner. Buyer will have no responsibility for the disbursement of the Purchase Price or for the Unit Owners receiving their appropriate portions.

L.7.b.Action by Seller in Connection with Unit Owner Closings.      In addition to other actions for Seller to take at Closing specified elsewhere in this Contract, Seller is to take the following actions.

i.Coordinate with Title Company and Unit Owners.      Seller is to coordinate between and with the Title Company and Unit Owners to provide information to address the following matters: (a) obtaining and providing organizational docu­ments and legal capacity as to Unit Owners that are entities or that are subject of proceedings (e.g., divorce, death, probate, bankruptcy, and federal and judgment liens); (b) lienholder and mortgage servicer contact information and authorizations to request payoffs; and (c) status of Unit Owner leases.

ii.Mortgage Payoffs.      Seller is to provide instructions to the Title Company to send mortgage and lien payoffs to lienholders, or to retain in escrow a Unit Owner’s respective interest in the sales proceeds, if the Title Company determines that there is an insufficient amount in the Unit Owner’s Escrow Account to pay off and obtain a lien release from the holders of all liens on the Unit.

iii.Postclosing Leases and Subleases.      Seller is to encourage Unit Owners to exe­cute Postclosing Leases, if they wish to remove Removables after Closing.

iv.Tenants of Unit Owners.      Seller is to encourage Unit Owners to have their tenants vacate the Units before Closing.

v.Possession.      Upon Closing, Seller shall relinquish possession of the Property, subject to possession by the holders of interests that are disclosed in the public record or the Survey or that are visible and apparent on the ground, Postclosing Leases with the former Unit Owners and Subleases between the former Unit Own­ers and their Subtenants, and holdovers by Unit Owners or their tenants that have not signed Postclosing Leases and Subleases.

L.7.c.Closing Documents and Actions.      In addition to the actions to be taken by Seller and Buyer under section H. above, the following actions are to be taken as a part of the Closing:

i.Seller.      Seller is to deliver the following at Closing:

(a)a Condominium Termination Agreement executed and recorded before Clos­ing, [a sample for which is attached to this Contract as Exhibit F,] with attached thereto Ratifications executed and acknowledged by the Requisite Number of Unit Owners;

(b)to the extent in Seller’s possession, all keys and alarm codes relating to all improvements located on or about the Property; and

(c)evidence reasonably satisfactory to Buyer confirming the termination of all contracts, including service contracts and the property management agree­ment, other than the Assumed Contracts.

ii.Buyer.      In addition to other actions for Buyer to take at Closing specified else­where in this Contract, Buyer is to deliver the following at Closing:

(a)an affidavit in form customarily executed by buyers to the title company issu­ing an owner’s policy on Closing and

(b)Postclosing Leases executed by Buyer and Postclosing Subleases executed by Unit Owners and their subtenants, if any.

iii.Joint.      Buyer and Seller shall deliver the following to the Title Company:

(a)the assignment and assumption of Assumed Contracts and Association Leases, if any, in the form attached to this Contract as Exhibit I and

(b)a Closing Statement prepared by the Title Company, with the assistance of the parties, including all credits, debits, prorations, and other adjustments as set forth in this Contract.

L.8.Removables.      Unit Owners that do not have leases with tenants shall be permit­ted before the Closing Date, or in the event of their execution of a Postclosing Lease as pro­vided in paragraph L.9. below, before the expiration of the Lease Term, to remove from their Units the following (the “Removables”): (a) personal property items such as furniture and appliances and (b) removable fixtures such as window coverings; cabinets; countertops; kitchen and laundry appliances such as oven, stove, and refrigerator; lighting fixtures; and any other fixture that may be removed without causing harm to or otherwise adversely affecting any structural element or any area outside of the former Unit boundaries. The removal shall be performed in a manner that does not cause water, gas, or other utility leaks or damage the roof, interior or exterior walls, building systems or equipment, or structural components of the improvements on the Property. Should any former Unit Owner not remove the Removables before the Closing Date or the expiration of the Lease Term of its Postclosing Lease, it shall be presumed that the person has waived the option to retain ownership and remove the prop­erty, and the Unit Owner will have no obligation to remove the Removables, and Buyer may dispose of the property at Buyer’s sole discretion.

L.9.Postclosing Lease to Unit Owner at Closing; Postclosing Subleases.      Unit Owners are provided an option to lease from Buyer at Closing if the Unit Owner elects not to vacate their former Unit by Closing (“Postclosing Lease”) and execute the Postclosing Lease, and to execute a Postclosing Sublease with their tenants (“Postclosing Sublease”), as set forth in Exhibit J. The form of the Postclosing Lease and the Postclosing Sublease set forth in Exhibit J is to be prepared by Buyer for presentation to Unit Owners before Closing. As a con­dition to such and Postclosing Sublease, any Unit Owner electing to occupy its former Unit after Closing, or to provide for its tenant to occupy postclosing, is to execute and complete the Postclosing Lease, and Postclosing Sublease as to any tenants, before Closing and escrow them with Seller for delivery to Buyer at Closing for Buyer’s execution of the Postclosing Lease and processing.

Signature Page to Real Estate Sales Contract

[RC item 2], a Texas nonprofit corporation

By:      
        [Name and title of signatory of seller]

Date:

[RC item 3], [a/an] [SC item 3a]

By:      
        [Name and title of signatory of buyer]

Date:

Exhibit A

Legal Description of Land and Personal Property

A.Land and Improvements

B.Personal Property.      Personal property includes the following:

1.all furniture, fixtures, building systems and related equipment, and other personal property located at and used in connection with the operation of the Real Property (the “Per­sonal Property”), save and except but subject to the Unit Owners’ removal of Removables as permitted in section L. of this Contract or in Exhibit J, and

2.all right, title, and interest of Seller in and to the following:

a.all contracts relating to the upkeep, repair, maintenance, or operation of the Property that will extend beyond the Closing Date, including any leases by the Association of portions of the Property (“Association Leases”) and equip­ment leases, solely to the extent Buyer assumes in writing the obligations under those contracts (collectively, the “Assumed Contracts”);

b.all licenses, permits, certificates of occupancy, and governmental approvals with respect to the Land and Improvements and all development and similar agreements relating to governmental permits or utility services with respect to the Land and Improvements, to the extent transferable; and

c.all of Seller’s Records including all surveys, drawings, property reports and studies, plans, and specifications for the Land and Improvements.

Exhibit B

Representations; Environmental Matters

Exhibit C

Seller’s Records

Exhibit D

Notices, Statements, and Certificates

Exhibit E

Insurance for Buyer and Buyer’s Consultants

Before the entry on or access to the Property by Buyer or any of Buyer’s Consultants, Buyer and Buyer’s Consultants shall maintain the following insurance, meeting at least the following specifications, and shall provide Seller, Seller’s property manager, and Seller’s insurance agent reasonable proof of the existence of the following insurance by Buyer, Buyer’s agents, or contractors (including but not limited to ACORD certificates certifying the existence of each of the following):

A.General Liability.      commercial general liability insurance—

1.on an occurrence basis;

2.on the most recent ISO form CG 00 01 or equivalent;

3.with limits of not less than $[SC item 26] single occurrence and $[SC item 27] in the aggregate;

4.with a designated location endorsement general aggregate for the Property using the most recent ISO form CG 25 04 so that the limits above apply separately to the Property;

5.that does not have any exclusions or limitations that modify the definition of “insured contract” or waive or otherwise limit the coverage for liability assumed under an “insured contract”; and

6.without (a) any endorsement modifying the employer’s liability exclusion or (b) any “insured vs. insured” exclusion.

B.Workers’ Compensation and Employer’s Liability

1.workers’ compensation insurance with statutory limits and

2.employer’s liability insurance with limits of not less than $1 million per accident, per employee for disease and $1 million in the aggregate for disease, covering each individual employed in connection with the inspections, studies, or assessments (whether employed by Buyer, by an entity affiliated with Buyer, or by a Buyer’s contractor).

C.Excess or Umbrella

1.commercial excess or umbrella liability insurance with respect to the general lia­bility, business auto, and employer’s liability insurance;

2.on a follow form (and no less broad than primary) basis; and

3.with a limit of collectively of the primary and the excess/umbrella coverage of not less than $[SC item 28] each occurrence and general aggregate.

D.Pollution Liability.      as to Buyer’s Consultants, if any, undertaking a Phase II assess­ment, pollution liability insurance with a limit of not less than $[SC item 29].

E.General Requirements.      with the general requirements that—

1.insurers must have a rating of at least an A-VII in Best’s Key Rating Guide and be licensed to do business in Texas;

2.with the exception of workers’ compensation and employer’s liability coverage, each of the policies shall insure the Association, its board of directors and officers, the Unit Owners, and the property manager as additional insureds, and as to the general liability insur­ance, endorsed by the most recent ISO form CG 20 26;

3.the commercial general liability coverage in favor of the additional insureds required above will be primary and noncontributory, and the commercial general liability insurance policy will be endorsed by the most recent ISO form CG 20 01; and

4.the insurance must include a waiver of subrogation as to claims against the Asso­ciation, its board of directors and officers, the Unit Owners, and the property manager.

Exhibit F

Condominium Termination Agreement

Exhibit G

Special Warranty Deed

Exhibit H

Bill of Sale and Assignment

Exhibit I

Assignment of Assumed Contracts and Association Leases

Exhibit J

Some Postclosing Lease Terms; Form of Postclosing Lease and Postclosing Sublease

1.Landlord and Tenant.      Commencing upon Closing and provided the former Unit Owner has executed and delivered to Buyer before Closing a Postclosing Lease in the form required pursuant to this Agreement, Buyer is the landlord (“Landlord”), and the former Unit Owner will be the tenant (“Tenant”).

2.Lease Term.      The term of the Lease is as follows (the “Lease Term”):

a.Closing On or After Outside Closing Date.      If Closing is on or after [SC item 30], the Lease Term is fifteen days from Closing or such shorter period as the former Unit Owner has notified Buyer before Closing, subject to termination by Buyer at an earlier date upon compliance with the move-out procedures set forth in the Lease.

b.Closing Before Outside Closing Date.      If Closing is before [SC item 30], the Lease Term is the period from Closing to and including [SC Item 31] or such shorter period as the former Unit Owner has notified Buyer before Closing, subject to termination by Buyer at an earlier date upon compliance with the move-out procedures set forth in the Lease.

3.Leased Premises.      The space within the Tenant’s former Unit that is to be rented is the “Leased Premises” and is referred to in the Rent Chart as “Unit No.” In addition to the Leased Premises, Tenant shall have the right without payment in addition to the Rent during the Lease Term to park Tenant’s vehicle in a parking space to be assigned to Tenant in the Lease and to continue to use any storage room assigned to the former Unit. The Leased Prem­ises and the Property are leased on an “AS IS, WITH ALL FAULTS” basis without any repre­sentations or warranties, express or implied, on the part of the Landlord to Tenant.

4.Expenses and Rent

a.Expenses.      Tenant is responsible for paying all electricity charges servicing the Leased Premises and directly billed to the Leased Premises (“Leased Premises Expenses”). Landlord will pay all other utility charges, including water utilities and trash removal.

b.Rent

i.Month’s Rent Rate.      Rent is to be payable by each Unit Owner who elects to remain as a Tenant under an executed Postclosing Lease for the Lease Term at the Month’s Rent rate for the Unit No. set forth below (“Rent”). The Month’s Rent for the month after Closing is to be prorated by Landlord if the Lease Term terminates or expires before the lapse of a month. Landlord is to rebate to Tenant the unamortized portion of the Month’s Rent. Unit Owner can retain any rent it receives from its Sub­tenant in excess of the Rent payable by the former Unit Owner to Buyer.

ii.Holdover.      Notwithstanding the Month’s Rent rate set out in paragraph 4.b.i. above, if a Tenant (or its Subtenant) fails to vacate the Leased Premises on or before the expiration of the Lease Term, Tenant shall owe and pay to Landlord a per diem rent in the amount of $[SC item 32] per day for each day until Tenant (and its Subtenant, if applicable) has vacated the Leased Premises.

Rent Chart

5.Rules and Regulations.      Tenant shall abide by reasonable rules and regulations adopted by Landlord in the ordinary course of business.

6.Removables; Not Removables.      Tenant shall be permitted during the Lease Term to remove from the Leased Premises the following (the “Removables”): (a) personal property items such as furniture and appliances and (b) removable fixtures such as cabinets, counter­tops, kitchen and laundry appliances, lighting fixtures, and any other fixture which may be removed without causing harm to or otherwise adversely affecting any structural element or any area outside of the former Unit boundaries. The removal shall be performed in a manner that does not cause water, gas, or other utility leaks or damage the roof, interior or exterior walls, building systems or equipment, or structural components of the improvements on the Property. Should any former Unit Owner not remove the Removables before the expiration of the Lease Term, it shall be presumed that the person has waived the option to retain ownership and remove the property, and Buyer may dispose of the property at Buyer’s sole discretion. Tenant is not permitted to remove any of the former common elements of the former Condo­miniums or other property (“Not Removables”).

7.Insurance.      Tenants are responsible for obtaining at their expense insurance insuring the contents of the Leased Premises and as to bodily injury, death, and property dam­age caused by their acts or omissions.

8.Maintenance.      The cost of maintenance of the Property other than the Leased Premises is to be Buyer’s expense.

Form of Postclosing Lease

D.24.      Removables; Not Removables.      Tenant (the former Unit Owner) shall be per­mitted to remove from the Leased Premises the following (the “Removables”): (a) personal property items such as furniture and appliances and (b) removable fixtures such as cabinets, countertops, kitchen and laundry appliances, lighting fixtures, and any other fixture that may be removed without causing harm to or otherwise adversely affecting any structural element or any area outside of the Leased Premises. The removal shall be performed in a manner that does not cause water, gas, or other utility leaks or damage the roof, interior or exterior walls, building systems or equipment, or structural components of the improvements on the Prop­erty. Should any former Unit Owner not remove the Removables before the expiration of the Lease Term, it shall be presumed that the person has waived the option to retain ownership and remove that property, and Purchaser may dispose of the property at Purchaser’s sole dis­cretion. Tenant is not permitted to remove any of the former common elements of the former Condominiums or other property (“Not Removables”).

D.25.      Nonhomestead.      Tenant hereby stipulates, represents, and warrants to Land­lord that Tenant does not have, or claim to have, any constitutional, statutory, or probate homestead rights of whatsoever kind in and to the Property, and if, as, and to the extent that Tenant had, has, or may have any such homestead rights in and to the Property, Tenant for Tenant and Tenant’s heirs, legal representatives, successors, and assigns hereby waives, releases, and relinquishes forever all such homestead rights. Tenant further hereby stipulates, represents, and warrants to Landlord that Tenant intends to use and occupy the Property only for the term of this Lease; Tenant has no intention to use and occupy the Property as Tenant’s homestead; Tenant does not own or claim to own the Property; Tenant acknowledges that Landlord is the fee simple owner of the Property and Landlord’s fee simple ownership of the Property preceded the execution of this Lease; Tenant does not have, or claim to have, a pos­sessory interest in the Property and does not have, or claim to have, any retained possessory interest in the Property; and Landlord’s purchase of the Property immediately preceding the execution of this Lease is not a pretended or pretextual sale of the Property to Landlord. Tenant hereby stipulates, acknowledges, and agrees that Landlord is expressly relying on each and every stipulation, representation, and warranty made by Tenant herein, and but for such stipulations, representations, and warranties, Landlord would not have agreed to lease the Property to Tenant and to enter into this Lease with Tenant, and in the event that any such stipulations, representations, or warranties are untrue or disputed by Tenant or anyone claim­ing by, through, or under Tenant, Tenant shall be liable to Landlord for all losses and damages that Landlord actually suffers by reason or as a consequence thereof including, without limita­tion, all special, consequential, or indirect damages so suffered by Landlord, and any holdover rent specified in this Lease shall not limit or in any way restrict Tenant’s liability under this Lease.

Form of Postclosing Sublease

Exhibit K

Settlement Activities with Unit Owners

A.   Title Company

A.1.   Unit Owner’s Allocated Percentage of Net Proceeds.      The Title Company will apportion between the Unit Owners the net proceeds in accordance with instructions for Seller (which shall be in accordance with the provisions of TUCA) and from the net proceeds.

A.2.   Lien Payoffs and Releases.      Pursuant to the instructions of Seller, the Title Company will pay the amount necessary to release any mortgages and other liens encumber­ing any Units and other costs necessary to resolve any Schedule C matters on the Title Com­mitment for the Units.

A.3.   Foreign Person Withholding.      The Title Company will withhold from Unit Owners any required IRS withholding (20 percent if a particular Unit Owner does not provide a nonforeign affidavit).

A.4.   Unit Owner Escrow Accounts.      The Title Company will set up a separate escrow account for each Unit Owner into which the Unit Owner’s respective share of the net proceeds of the Purchase Price is to be held by the Title Company (“Unit Owner Escrow Accounts”).

B.   Buyer; Association

B.1.Buyer.      Buyer will have no responsibility for the disbursement of the Purchase Price to the Unit Owners or for the receipt of the appropriate portion of the Purchase Price by the Unit Owners.

B.2.Association.      The title to the Property will be vested in the Association as Trustee, and the Association will have all powers necessary and appropriate to effect the sale of the Property, including the power to convey the interests of nonconsenting Owners and dis­tribute the proceeds of the Purchase Price to the holders of liens and to the Owners under sec­tion 82.068 of the Texas Property Code (TUCA).

C.   Insufficient Net Proceeds Allocable to Unit Owner

If the proceeds due an applicable Unit Owner are not sufficient to pay all monetary liens encumbering the applicable Unit, Buyer may elect to pay (or purchase) those liens to clear title to the applicable Unit. If Buyer does not elect to do so, Buyer may terminate this Agreement and receive a refund of the Earnest Money.