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HomeMy WebLinkAboutContract 36530 (2)BUY-OUT OPTION CONTRACT This Buy -Out Option Contract ("Contract") is entered into by and between the City of Fort Worth, Texas (the "City"), a home -rule municipal corporation situated in Tarrant, Denton, and Wise Counties, Texas, acting by and through its duly authorized Assistant City Manager; Aqua Utilities, Inc., formerly known as AquaSource Utility, Inc., a Texas corporation ("Aqua Utilities"); Aperion Communities, LLLP, Eladio Properties, LLLP, Drooy Properties, LLLP, and Rocksand Investments, LLLP, Arizona limited liability limited partnerships (individually and collectively, "Owner"); and Tradition Municipal Utility District No. 2 of Denton County, a municipal utility district created pursuant to Article XVI, Section 59, of the Texas Constitution, Chapters 49 and 54 of the Texas Water Code and the applicable Special District Local Law and any other district created over the Development by dividing the District into one or more new Districts pursuant to the District Legislation (the "District"), which District, after the District Confirmation Date (or, for any later created District, the date the election dividing a District is held pursuant to § 8189.104 of the District Legislation), will become a Parry to this Contract. RECITALS A. The Parties to this Contract will also execute that "Agreement Regarding Water and Wastewater Utility Service", City Secretary Contract No. (the "UtilitxAgreement"). B. The Utility Agreement governs the provision of water and wastewater utility service to approximately 1,920 acres in Denton County, Texas, as shown on Exhibit A and more particularly described in Exhibit B attached to this Contract (the "Development"). C. Article VII of the Utility Agreement provides that the Parties will enter into this Contract to "effectuate the future transfer of retail water or wastewater service from Aqua Utilities to the City," at the City's option and under the conditions set forth in that agreement. NOW THEREFORE, for and in consideration of the mutual agreements, covenants, and conditions hereinafter set forth, the Parties contract and agree as follows: 6.12. ARTICLE I SELLER AND PURCHASER 1.01 "Effective Date" means the effective date of this Contract as defined in Section 1.02 "Purchaser" means the City. 1.03 means, individually, the City, Owner, District or Aqua Utilities, and any permitted successors and assigns. 1.04 "Seller" means Aqua Utilities, Owner or District, and each of their permitted assigns, to the extent that each of those Parties or such assigns owns all or any interest in the Property, as defined in Section 2.02, at the time the Option is exercised under this Contract. Buy -Out Option Contract 1905 Other Defined Terms. Unless otherwise defined below, capitalized terms in this Contract shall have the same respective meanings as are ascribed to them in the Utility Agreement. ARTICLE II PROPERTY, GRANT AND EXERCISE OF OPTION 2.01 Grant of Option. Subject to the terms and conditions set forth in this Contract, Seller GRANTS to Purchaser an Option to purchase and accept from Seller, for the Purchase Price, all of Seller's right, title and interest in and to the Property, as it may now exist, or be acquired or constructed by Seller at any time during the Option Period (the "Option") and consisting of the following.0 a. all water distribution facilities, including meters, above ground tanks, pump stations and other equipment, fixtures, improvements or appurtenances used to provide water service to the Development, and located inside the Development (collectively, "Water Facilities"); b. all wastewater collection facilities, including meters, lift stations, and other equipment, fixtures, improvements or appurtenances used to provide wastewater service to the Development, and located inside the Development (collectively, "Wastewater Facilities"); c. all easements and rights -of --way inside the Development associated with the Water or Wastewater Facilities (the "Easements"); d. any tract of land within the Development owned by Seller and in use for the operation of the Water or Wastewater Facilities (the "Land"); e. account records and information for existing customers served by the Wastewater and Water Facilities (the "Account Information"h and f. surveys, plans and specifications in Seller's possession or control that relate to the Water Facilities or Wastewater Facilities (the "Documents"). 2.02 Property. The items listed in Section 2.01 above are collectively called the "Property." 2.03 Exercise of Option. Unless the Parties agree in writing to an earlier date, Purchaser may exercise the Option to purchase the Property located within each District at any time, and from time to time, upon the earlier of. (a) seventeen (17) years after the first connection to retail water or wastewater utility service within such District; or (b) 90 days before the date of annexation of a District by the City such that Closing will occur upon or after annexation. In the event the Development is not divided into any new District, then the City shall have the right to exercise the option (a) above only for each portion of the Development covered by a separate service plan (submitted to and approved by the City pursuant to Section 3.02 of the Utility Agreement) at any time after 17 years after the first connection to retail water or wastewater utility service within the portion of the Development covered by that service plan. Buy -Out Option Contract Page 2 In any event Purchaser must exercise the Option (if at all) on or before the earlier of the date that is ninety-nine (99) years from the Effective Date or the twenty-first (21 S) anniversary of the death of the last descendant of Queen Elizabeth II, the queen of the United Kingdom, who is living as of the Effective Date of this Contract ("Option Period"). The Option, if exercised, must be exercised simultaneously for both the Water and the Wastewater Facilities (and the Land, Easements, Account Information and Documents related thereto). 2.04 Exercise Notice. Whenever Purchaser desires to exercise the Option as to any portion the Property, Purchaser must provide Notice to Seller during the Option Period of its desire to exercise the Option ("Exercise Notice"). The date on which Purchaser sends the Exercise Notice is called the "Option Exercise Date." 2.05 Information to Purchaser. Within thirty (30) days following the Option Exercise Date, Sellers shall provide to Purchaser true and complete copies of all written information that either of them possesses (other than privileged communications or attorney work -product) regarding the Property, including but not limited to: environmental studies and reports; any permits required for the Water Facilities and Wastewater Facilities; all agreements granting or conveying the Easements; the Documents; and a complete and itemized inventory of any of the Property that is not described in or shown on the Documents. 2.06 Prohibited Encumbrance. Seller may not enter into any agreement to sell, transfer, mortgage, lease, or grant any preferential right to purchase (including but not limited to any option, right of first refusal, or right of first negotiation) with respect to, or otherwise encumber all or any portion of, the Property before Closing ("Prohibited Encumbrance"), unless such Prohibited Encumbrance is cured and removed at or before Closing. 2.0'7 Memorandum of Option. Seller and Purchaser shall execute and record, in the form attached as Exhibit C to this Contract, a "Memorandum of Buy -Out Option Contract" in the Real Property Records of Denton County, Texas within thirty (30) days after the District confirmation date. ARTICLE III PURCHASE PRICE AND OPTION CONSIDERATION 3.01 Purchase Price. When the Option is exercised pursuant to this Contract, the consideration ("Purchase Price") for the entirety of the Property purchased pursuant to that Option is TEN DOLLARS ($10.00). 3.02 Time of Payment. The Purchase Price is payable in cash at the Closing. 3.03 Consideration. As consideration for Seller's holding the Property available for purchase during the Option Period, Purchaser has paid Seller $100 ("Independent Option Consideration"), which Seller may retain, even if this Contract is terminated. The Independent Option Consideration does not apply to the Purchase Price. ARTICLE IV SURVEY, INSPECTION AND TITLE COMMITMENT Buy -Out Option Contract Page 3 4.01 Survey during Option Period. From time to time during the Option Period, Purchaser shall have the right to obtain, at Purchaser's expense, a current, on -the -ground land title survey ("Survey") of all or any portion of the Property made by a duly licensed surveyor reasonably acceptable to the Seller. 4.02 Inspection durin tg he Option Period. From time to time during the Option Period, Purchaser shall have the right to obtain an inspection, including an appraisal of real and personal property ("Inspection"), of all or any portion of the Property, for purposes of assessing the physical and operational condition of the Property. 4.03 Title Examination durin tg he Option Period. During the Option Period, Purchaser shall have the right to obtain, at Purchaser's expense, an examination of any or all of the real property records related to the Land and the Easements ("Title Commitment"), including any and all instruments constituting an exception or restriction upon the title or easement rights of Seller. 4.04 Approval Period and Title. If Purchaser chooses to have a Survey, Inspection or Title Commitment of all or any portion of the Property during the Option Period, Purchaser may, after it has delivered its Exercise Notice, deliver to Seller a Notice of its written objections to anything contained therein. Seller shall, in good faith, attempt to satisfy such objections before Closing; but Seller shall not be required to incur any cost to do so, except with respect to any Prohibited Encumbrance, which must be removed or cured before Closing. For all objections except the Prohibited Encumbrances, if Seller is unable to satisfy such other objections on or before the Closing date, or if, for any reason, Seller is otherwise unable to convey title in accordance with Section 5.02(b) below, then Purchaser, as its sole and exclusive remedy hereunder may (a) waive such objections and accept the Property in its condition at the time of Closing, with such title to the Property as Seller is able to convey; (b) elect to exclude from the purchase any portion of the Property that it deems to be affected by its objections and accept such title to the remainder of the Property as Seller is able to convey or (c) withdraw the Exercise Notice in its entirety, and its corresponding exercise of the Option, but preserve its right to exercise the Option at a later date within the Option Period. The Purchaser may enforce by specific performance the Seller's obligation under Section 2.05 to remove any Prohibited Encumbrance. ARTICLE V CLOSING 5.01 Time of Closing. The closing ("Closing") of the sale of the Property by Seller to Purchaser will occur on or before ninety (90) days after the Option Exercise Date, or at such other time or place as the Parties may mutually determine ("Closing Date"). 5.02 Requirements of Seller. For all of the Property that is the subject of the Option Notice, unless excluded by Purchaser pursuant to Section 4.04, Seller shall deliver or cause to be delivered to Purchaser at Closing all of the following: (a) a Bill of Sale and Assignment in substantially the same form as that attached as Exhibit D to this Contract, fully executed and acknowledged by each Seller as its interests may appear, conveying, transferring, and assigning to Purchaser all of Seller's right, title, and interest in and to the Water Facilities, the Wastewater Facilities, the Account Information, and the Documents; (b) a Special Warranty Deed executed and acknowledged by each Seller as its interests may appear, conveying to Purchaser good and Buy -Out Option Contract Page 4 indefeasible fee simple title to the Land and subject to all matters of record; (c) an Assignment of Easements, executed and acknowledged by each Seller as its interests may appear, conveying, transferring, and assigning to Purchaser all of Seller's right, title, and interest in and to the Easements; (d) evidence reasonably satisfactory to Purchaser that the person(s) executing the Closing documents on behalf of Seller has full right, power, and authority to do so; and (e) any other document reasonably necessary to consummate the transaction. 5.03 Requirements of Purchaser. Purchaser shall deliver or cause to be delivered to Seller at Closing all of the following: (a) immediately available funds in an amount equal to the Purchase Price; and (b) evidence reasonably satisfactory to Seller the person executing any Closing documents on behalf of Purchaser has full right, power, and authority to do so. 5.04 Termination of Leases. Upon completion of the Closing, Seller shall terminate, as of the Closing Date, any and all leases and operating agreements between Aqua Utilities and the District or the Owner covering any portion of the Property purchased. 5.05 Purchaser's Remedies. If Seller fails or refuses to sell the Property at the Closing, then the Purchaser, at its sole option, is entitled to (ii) enforce specific performance of Seller's obligations under this Contract; or (ii) withdraw its Exercise Notice and its corresponding exercise of the Option, but preserve its right to exercise the Option at a later date within the Option Period; or (iii) to exercise any other right or remedy available to Purchaser at law or in equity. ARTICLE VI MISCELLANEOUS 6.01 Form of Easement within the Development. Before entering into any Easement, Seller shall submit to Purchaser for its review and approval (which approval by Purchaser shall not be unreasonably withheld) Seller's proposed forms of Easement for water and wastewater lines and related facilities and appurtenances. Among other things, the Easement forms must provide that the underlying land owner of the servient tenement consents in advance to any Future assignment of such Easement by Seller to Purchaser. After Purchaser has approved the forms of water and wastewater Easements, Purchaser's prior written consent will not be required for any new Easement that Seller enters into under the approved forms. Nevertheless, Seller must send to Purchaser copies of each fully executed and recorded Easement within thirty (30) days after such Easement is executed. 6.02 Other Forms. In case of a dispute as to the form of any document required by this Contract, unless otherwise required by the Utility Agreement, the current form prepared by the State Bar of Texas shall be conclusively deemed reasonable. 6.03 Notice. Any notices, approvals, or other communications required to be given by one Party to another under this Contract (a "Notice") shall be given in writing addressed to the Party to be notified at the address set forth below and shall be deemed given: (a) when the Notice is delivered in person to the person to whose attention the Notice is addressed; (b) when received if the Notice is deposited in the United States Mail, certified or registered mail, return receipt requested, postage prepaid; (c) when the Notice is delivered by Federal Express, UPS, or another nationally recognized courier service with evidence of delivery signed by any person at the Buy -Out Option Contract Page 5 delivery address; or (d) five business days after the Notice is sent by FAX with electronic confirmation by the sending FAX machine) with a confirming copy sent by United States mail within 48 hours after the FAX is sent. If any date or period provided in this Contract ends on a Saturday, Sunday, or legal holiday, the applicable period for calculating the Notice shall be extended to the first business day following the Saturday, Sunday, or legal holiday. For the purpose of giving any Notice, the addresses of the Parties are set forth below. The Parties may change the information set forth below by sending Notice of such changes to the other Party as provided in this Section 6.03. To the City: City of Fort Worth, Texas Attn: City Secretary 1000 Throckmorton Street Fort Worth, Texas 76102 FAX: (817) 392-6196 City of Fort Worth, Texas Attn: City Manager 1000 Throckmorton Street Fort Worth, Texas 76102 FAX: (817) 392-6134 City of Fort Worth, Texas Attn: Water Director 1000 Throckmorton Street Fort Worth, Texas 76102 FAX: (817) 392-2398 To a District: Tradition Municipal Utility District No. 2 of Denton County c/o: Coats Rose 2 Lincoln Center Suite 1300 Dallas, Texas 75240 FAX: 972-982-8451 To Owner: Aperion Communities, LLLP Attn: Mr. Gary Lane 7835 East Redfield Road, Suite 100 Scottsdale, Arizona 85260 FAX: 480-9514414 Eladio Properties, LLLP Attn: Mr. Gary Lane Buy -Out Option Contract Page 6 $� r 7835 East Redfield Road, Suite 100 Scottsdale, Arizona 85260 FAX: 480-9514414 Drooy Properties, LLLP Attn: Mr. Gary Lane 7835 East Redfield Road, Suite 100 Scottsdale, Arizona 85260 FAX: 480-951-8414 Rocicsand Investments, LLLP 7835 East Redfield Road, Suite 100 Scottsdale, Arizona 85260 Attn: Gary Lane FAX: 480-9514414 To Aqua Utilities: 1421 Wells Branch Pkwy., Ste. 105 Pflugerville, TX 78660 Attn: Vice President FAX: (512) 989-9891 762 West Lancaster Ave. Bryn Mawr, Pennsylvania 19010 Attn: Chief Legal Officer FAX: (610) 520-9127 6.04 City Consent and Approval. Except as provided by Section 6.01 of this Contract, in any provision of this Contract that provides for the consent or approval of the City staff or City Council, such consent or approval may be withheld or conditioned by the staff or City Council at its sole discretion. 6.05 Binding Effect and Assignment. This Contract, and the Option granted herein, shall inure to the benefit of and bind the Parties hereto and their respective heirs, representatives, successors and assigns. In the event an additional District is created over the Development in accordance with the District Legislation, such District shall become a party to this Agreement and such District shall assume all of the rights and obligations of the Tradition Municipal Utility District No. 2 of Denton County as to the land located within such District's boundaries. Within 30 days following the date the election dividing the District is held creating the additional District, such District shall execute the District Joinder attached as Exhibit H to the Consent Agreement and provide a copy thereof to the other Parties. Assignment of this Contract is permitted only under the same terms, and to the same extent as assignment of the Utility Agreement. Further, this Contract must be assigned at the same time and to the same entity as the Utility Agreement. 6.06 Amendment. This Contract may be amended only with the written consent of all Parties and with approval of the governing body of the City and the District. Buy -Out Option Contract Page 7 6.07 Severability. The provisions of this Contract are severable and, in the event any word, phrase, clause, sentence, paragraph, section, or other provision of this Contract, or the application thereof to any person or circumstance, shall ever be held or determined to be invalid, iRegal, or unenforceable for any reason, and the extent of such invalidity or unenforceability does not cause substantial deviation from the underlying intent of the Parties as expressed in this Contract, then such provision shall be deemed severed from this Contract with respect to such person, entity or circumstance, without invalidating the remainder of this Contract or the application of such provision to other persons, entities or circumstances, and a new provision shall be deemed substituted in lieu of the provision so severed which new provision shall, to the extent possible, accomplish the intent of the Parties as evidenced by the provision so severed. 6.08 Interpretation. The Parties acknowledge that each party and, if it so chooses, its counsel have reviewed and revised this Contract and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Contract or any amendments or exhibits hereto. As used in this Contract, the term "including" means "including without limitation" and the term "days" means calendar days, not business days. Wherever required by the context, the singular shall include the plural, and the plural shall include the singular. Each defined term herein may be used in its singular or plural form whether or not so defined. 6.09 Survival. Any portion of this Contract not otherwise consummated at the Closing will survive the Closing of this transaction as a continuing agreement by and between the Parties. 6.10 Counterpart Ori ig nals. This Contract may be executed in multiple counterparts, each of which shall be deemed to be an original. Upon execution and delivery of this Contract by any Party, such Party shall be bound by the terms of this Contract, regardless of whether or not executed and delivered by all Parties. 6.11 Incorporation of Exhibits by Reference. All exhibits attached to this Contract are incorporated into this Contract by reference for the purposes set forth herein, as follows: Exhibit A Map of Tradition showing the Development Exhibit B Legal description of the Development Exhibit C Memorandum of Buy -Out Option Contract Exhibit D Bill of Sale and Assignment 6.12 Effective Date. The Effective Date of this Contract is October 1, 2007. [SIGNATURE PAGES FOLLOW] Buy -Out Option Contract i AQUA UTILITIES, INC., a Texas corporation By: Robert L. Laughman, President Date: TRADITION MUNICIPAL UTILITY DISTRICT NO.2 OF DENTON COUNTY By: Name: President, Board of Directors Date: APERION COMMUNITIES, LLLP By: David P. Maniatis, General Partner ELADIO PROPERTIES LLLP By: David P. Maniatis, General Partner DROOY PROPERTIES, LLLP By: David P. Maniatis, General Partner ROCKSAND INVESTMENTS, LLLP By: David P. Maniatis, General Partner Buy -Out Option Contract Printed Name: City Secretary APPROVED AS TO FORM AND LEGALITY: Assistant City Attorney STATE OF TEXAS § COUNTY OF TARRANT § PURCHASER THE CITY OF FORT WORTH, a Texas home -rule municipal corporation of Tarrant, Denton, and Wise Counties By: Name: Title: Date: BEFORE ME, THE UNDERSIGNED AUTHORITY, on this day personally appeared as of THE CITY OF FORT WORTH, a municipal corporation, on behalf of said City, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said City. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of . 20 Notary Public, State of Texas Notary's Typed or Printed Name My Commission expires: Buy -Out Option Contract Page 10 STATE OF TEXAS § COUNTY OF § BEFORE ME, THE UNDERSIGNED AUTHORITY, on this day personally appeared as of AQUA UTILITIES, INC., a corporation, on behalf of said corporation, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said corporation. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of . 20 . Notary Public, State of Texas Notary's Typed or Printed Name My Commission expires: STATE OF TEXAS COUNTY OF BEFORE ME, THE UNDERSIGNED AUTHORITY, on this day personally appeared as of TRADITION MUNICIPAL UTILITY DISTRICT NO. 2 OF DENTON COUNTY, on behalf of said District, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said District. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of . 20 Notary Public, State of Texas Notary's Typed or Printed Name My Commission expires: Buy -Out Option Conh•act Page ll on this day personally appeared _of ELADIO PROPERTIES LLLP, a , on behalf of said partnership, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said partnership. STATE OF § COUNTY OF § BEFORE ME, THE UNDERSIGNED AUTHORITY, on this day personally appeared as of APERION COMMUNITIES, LLLP, a , on behalf of said partnership, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said partnership. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of . 20 . My Commission expires: STATE OF COUNTY OF Notary Public, State of Texas Notary's Typed or Printed Name BEFORE ME, THE UNDERSIGNED AUTHORITY, GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of 20 Notary Public, State of Texas Notary's Typed or Printed Name My Commission expires: Buy -Out Option Contract Page 12 STATE OF COUNTY OF § BEFORE ME, THE UNDERSIGNED AUTHORITY, on this day personally appeared as of DROOY PROPERTIES, LLLP, a partnership, on behalf of said partnership, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said partnership. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of . 20 . Notary Public, State of Texas Notary's Typed or Printed Name My Commission expires: STATE OF § COUNTY OF § BEFORE ME, THE UNDERSIGNED AUTHORITY, on this day personally appeared as of ROCKSAND INVESTMENTS, LLLP, a partnership, on behalf of said partnership, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said partnership. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of 20 Notary Public, State of Texas Notary's Typed or Printed Name My Commission expires: Buy -Out Option Contract Page 13 Exhibit A Map Showing the Development Exhibit A to Buy -Out Option Contract Page 1 Exhibit B Legal Description of the Development BEING a 1,922.737 acre tract of land in the G. Cardinas Survey, Abstract V. 214, the James Chesier Survey, Abstract No. 225, the W.D. Reed Survey, Abstract No. 1125, the W.C. Brookfield Survey, Abstract No. 34, and the W.A. Ferris Survey, Abstract No. 419 situated in Denton County, Texas and being a combination of a portion of those tracts conveyed to Aperion Communities, L.L.L.P. (Aperion Tract One -A and Aperion Tract One-B), by deed recorded under County Clerk's File No. 2004-11913 of the Real Property Records of Denton County, Texas (RPRDCT), that tract conveyed to Nancy Talley Reynolds, et al, by deed recorded in Volume 2301, Page 223 RPRDCT, a portion of that tract conveyed to Aperion Communities, L.L.L.P. by deed recorded under County Clerk's File No. 2003490652 RPRDCT (Aperion Tract Two), that tract conveyed to Rocksand Investments, LLLP by deed recorded in Instrument Number 2005-30851 RPRDCT and those tracts recorded in Volume 5128, Page 3102 and Volume 5119, Page 715, RPRDCT and being more particularly described as follows: TRACT ONE COMMENCING at a capped 5/8" iron pin found, said iron pin also being on the north right-of- way line of State Highway No. 114, said iron pin also being on the west line of said Alliance 161 Investments tract, said iron pin also being on the east line of a tract conveyed to Betty Marie McIntyre, et al, by deed recorded in Volume 2906, Page 363 RPRDCT; THENCEN OOE32'36" W along the west line of said Alliance 161 Investments tract and the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, a distance of 3701.24 feet to a 3/8" iron pin found; THENCE N 89E39'59" E along the north line of said Alliance 161 Investments tract and the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, a distance of 1826.89 feet to a 1/2" iron pin found, said iron pin also being on the west line of said Aperion Tract One -A; THENCE N OOE22'44" W along the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, and the west line of said Aperion Tract One -A, a distance of 1294.80 Feet to a capped 1/2" iron pin set, said capped iron pin set also being on the west line of said Nancy Reynolds Talley, et al tract, said iron pin also being the POINT OF BEGINNING of the herein described tract; THENCE N OOE22'44" W along the east line of said McIntyre, et al, not recorded in Volume 2906, Page 363 RPRDCT, and the west line of said Aperion Tract One -A, a distance of 102.53 feet to a capped 1/2" iron pin set THENCEN 57E46'29" W along the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, the east line of a tract conveyed to Peggy Jeannine Eaton and Betty Marie McIntyre by deed recorded under County Clerk's File No. 2003-203215 and the west line of said Nancy Reynolds Talley, et al tract, a distance of 253.45 feet to a 1/2" iron pin found; THENCE N OOE21'32" E along the east line of said Peggy Jeannine Eaton and Betty Marie McIntyre tract and the west line of said Nancy Reynolds Talley, et al tract, a distance of 1364.27 Exhibit B to Buy -Out Option Contract Page 1 feet to a railroad spike found, said railroad spike also being on a west line of said Aperion Tract One -A, said railroad spike also being in Sam Reynolds Road; THENCE N OOE12'20" W along the east line of said Peggy Jeannine Eaton and Betty Marie McIntyre tract and the west line of said Aperion Tract One -A and in Sam Reynolds Road, a distance of 2791.88 feet to a railroad spike found; THENCE S 89E52'16" W along the north line of said Peggy Jeannine Eaton and Betty Marie McIntyre tract and the west line of said Aperion Tract One -A and in Sam Reynolds Road, a distance of 1909.29 feet to a 5/8" iron pin found, said iron pin also being on the east line of Indian Trails Phase 1, an addition to Denton County, Texas as recorded in Cabinet G, Page 311 of the Plat Records of Denton County, Texas (PRDCT); THENCE N OOE09'15" W along the west line of said Aperion Tract One -A, the east line of said Indian Trails Phase 1, the east line of a tract conveyed to Avondale Ranch by deed recorded in Volume 5289, Page 4253 RPRDCT and in Sam Reynolds Road, a distance of 1437.47 feet to a 60d nail in asphalt found, said 60d nail also being the southwest corner of a tract conveyed to Milton High by deed recorded in Volume 501, Page 248 RPRDCT; THENCE N 76E15'28" E along the west line of said Aperion Tract One -A and the south line of said High tract, a distance of 381.87 feet to a 1/2" iron pin found; THENCE N OOE18'S8" W along the west line of said Aperion Tract One -A and the east line of said High tract, a distance of 307.76 feet to a 1/2" iron pin found; THENCE S 89E55'09" W along the west line of said Aperion Tract One -A and the north line of said High tract, a distance of 370.41 feet to a 60d nail found, said 60d nail also being on the east line of said Avondale Ranch tract and in Sam Reynolds Road; THENCE N OOE12'09" W along the west line of said Aperion Tract One -A, the east line of said Avondale Ranch tract, the east line of a tract conveyed to W.E. Wilkerson by deed recorded in Volume 960, Page 35 RPRDCT, the east line of a tract conveyed to Edward Zelnik, et ux Janet by deed recorded in Volume 4062, Page 1905 RPRDCT, the east line of a tract conveyed to J. Lloyd Barksdale, et ux Dorthy by deed recorded in Volume 829, Page 271 RPRDCT, the east line of a tract conveyed to J. Lloyd Barksdale, et ux Dorthy by deed recorded in Volume 829, Page 275 RPRDCT, the east line of a tract conveyed to Gary Lynn Barksdale, et ux Toni Gayle by deed recorded in Volume 1545, Page 427 RPRDCT, the east line of a tract conveyed to Bobby J. Henry by deed recorded in Volume 5028, Page 3683 RPRDCT, and in Sam Reynolds Road, a distance of 3495.34 feet to a railroad spike found, said railroad spike also being on the south line of a tract conveyed to Margaret DiNapoli, et al, by deed recorded in Volume 4522, Page 2063 RPRDCT; THENCE S 89E57'51 " E along the west line of said Aperion Tract One -A and the south line of said Margaret DiNapoli, et al tract, a distance of 509.83 feet to a 5/8" iron pin found, said iron pin also being on the west line of a tract conveyed to Archie Eddleman by deed recorded in Volume 2322, Page 824 RPRDCT; Exhibit B to Buy -Out Option Contract Page 2 THENCE S OOE14'31" E along the west line of said Aperion Tract One -A and the west line of said Eddleman tract, a distance of 226.43 feet to a 1/2" iron pin found; THENCE N 89E05 10 E along the west line of said Aperion Tract One -A and the south line of said Eddleman tract, a distance of 870.61 feet to a 5/8" iron pin found, said iron pin also being the southwest corner of a tract conveyed to Ricky Iverson by deed recorded in Volume 4718, Page 362 RPRDCT; THENCE N 88E48'S4" E along the west line of said Aperion Tract One -A and the south line of said Iverson tract and the south line of a tract conveyed to Carol Theis by deed recorded in Volume 1038, Page 887 RPRDCT, a distance of 1598.77 feet to a 1/2" iron pin found; THENCE N OOE24'S4" W along the west line of said Aperion Tract One -A and the east line of said Theis tract and the east line of a tract conveyed to S.R. Harper by deed recorded in Volume 1726, Page 31 RPRDCT, a distance of 907.14 feet to a 1/2" iron pin found, said iron pin also being the southeast corner of a tract conveyed to Roy Chastain by Contract of Sale recorded under County Clerk's File No. 97-R0021328 RPRDCT; THENCE N OOE43'24" W along the west line of said Aperion Tract One -A and the east line of said Chastain tract, a distance of 423.43 feet to a 1/2" iron pin found, said iron pin also being the southeast corner of said Aperion Tract Two; THENCE S 88E53'O1" W along the south line of said Aperion Tract Two and the north line of said Chastain tract, a distance of 1193.21 feet to a capped 1/2" iron pin found, said iron pin also being on the east line of a tract conveyed to Wayne Harris by deed recorded in Volume 976, Page 42 RPRDCT; THENCE N OOE35'15" W along the west line of said Aperion Tract Two and the east line of said Harris tract, the east line of a tract conveyed to John McCurry by deed recorded in Volume 971, Page 697 RPRDCT, the east line of a tract conveyed to Samuel Haynes by deed recorded in Volume 962, Page 43 RPRDCT, and the east line of a tract conveyed to Howell Choate by deed recorded in Volume 924, Page 921 RPRDCT, a distance of 2336.13 feet to a 1/2" iron pin found, said iron pin also being the southwest corner of a tract conveyed to The Pennington Family Trust by deed recorded in Volume 4833, Page 525 RPRDCT; THENCE S 88E03'05" E along the north line of said Aperion Tract Two and the south line of said Pennington Family Trust tract recorded in Volume 4833, Page 525 RPRDCT, a distance of 977.84 feet to a capped 1/2" iron pin previously set, said iron pin also being on the north line of Aperion Tract One -A; THENCE N OOE33'20" W, departing the south line of said Pennington Family Trust tract and the north line of said Aperion Tract One -A, a distance of 723.83 feet to a capped 1/2" iron pin previously set, said iron pin also being on the south right-of-way line of F.M. 407 (90' R.O.W.); THENCE N 89E26'40" E, along the south right -of --way line of said F.M. 407 and along the north line of said Pennington Family Trust tract, a distance of 170.00 feet to a capped 1/2" iron pin previously set; Exhibit B to Buy -Out Option Contract Page 3 THENCE S OOE33'20" E, departing the south right-of-way line of said F.M. 407 and the north line of said Pennington Family Trust tract, a distance of 731.26 feet to a capped 1/2" iron pin previously set, said iron pin also being on the south line of said Pennington Family Trust tract and the north line of Aperion Tract One -A; THENCE S 88E03'OS" E along the north line of said Aperion Tract One -A and the south line of said Pennington Family Trust tract, a distance of 42.05 feet to a 1/2" iron pin found, said iron pin also being on the north line of Aperion Tract One -A; THENCE N 89E00'24" E along the north line of said Aperion Tract One -A, the south line of said Pennington Family Trust tract recorded in Volume 4833, Page 525 RPRDCT and the south line of a tract conveyed to The Pennington Family Trust by deed recorded in Volume 4833, Page 521 RPRDCT, a distance of 1146.79 feet to a 1/2" iron pin found, said iron pin also being on the southerly right -of --way line of Farm -to -Market Road No. 407 (F.M. 407) (90' ROW); THENCE S SOE10'Ol" E along the north line of said Aperion Tract One -A and the southerly right -of --way line of F.M. 407, a distance of 682.19 feet to a capped 1/2" iron pin set, said iron pin also being the Point of Curvature of a circular curve to the left having a radius of 617.96 feet, a central angle of 39E44'46" and being subtended by a chord which bears S 70E02'24 E , 420.13 feet; THENCE along said curve to the left and the north line of said Aperion Tract One -A and the southerly right -of --way line of F.M. 407, a distance of 428.68 feet to a capped 1/2" iron pin set; THENCE S 89E54'47" E tangent to said curve and along the north line of said Aperion Tract One -A and the southerly right -of --way line of F.M. 407, a distance of 458.09 feet to a point on the east line of the City of Fort Worth ETJ line and the west line of the Town of Northlake ETJ line; THENCE S OOE00'00" W, departing the north line of said Aperion Tract One -A and the southerly right -of --way line of said F.M 407, along the east line of the City of Fort Worth ETJ line and along the west line of the Town of Northlake ETJ line, a distance of 2998.33 feet to a point on the north line of a tract conveyed to Patricia Malloy by deed recorded in Volume 769, Page 965 RPRDCT; THENCE S 88E57'42" W along the east line of said Aperion Tract One -A and the north line of the north line of said Patricia Malloy tract, a distance of 802.46 feet to a 5/8" iron pin found; THENCE S OOE10'33" E along the east line of said Aperion Tract One -A and the west line of said Patricia Malloy tract, a distance of 3748.38 feet to a 5/8" iron pin found, said iron pin also being the northwest corner of Riggs Place, an addition to Denton County, Texas as recorded in Cabinet E, Page 359 PRDCT; THENCE S OOE17'37" E along the east line of said Aperion Tract One -A, the west line of said Riggs Place and the west line of a remainder tract conveyed to James Riggs, Jr., et ux Deborah, by deed recorded in Volume 870, Page 444 RPRDCT, a distance of 4211.11 feet to a 1/2" iron pin found, said iron pin also being in Sam Reynolds Road; Exhibit B to Buy -Out Option Contract Page 4 THENCE N 89E5615 E along the east line of said Aperion Tract One -A, the south line of said James Riggs, Jr. remainder tract, the south line of said Riggs Place, the south line of Sunflower Meadows, an addition to Denton County, Texas as recorded in Cabinet O, Page 122 PRDCT, the south line of Sage Meadows, Phase One, an addition to Denton County, Texas as recorded in Cabinet M, Page 208 PRDCT; the south line of a tract conveyed to Locust Thorn, L.P., by deed recorded in Volume 4009, Page 321 RPRDCT, the south line of Foxbane Estates, an addition to Denton County, Texas as recorded in Cabinet H, Page 24 PRDCT and in Sam Reynolds Road, a distance of 3409.24 feet to a capped 1/2" iron pin set, said iron pin also being the original northwest corner of Peyton Place, Phase One, an addition to Denton County, Texas as recorded in Cabinet M, Page 266 PRDCT; THENCE S OOE15'21" E along the east line of said Aperion Tract One -A, the west line of said Peyton Place, Phase One and the west line of Peyton Place, Phase Two, an addition to Denton County, Texas as recorded in Cabinet P, Page 50 PRDCT , a distance of 1482.19 feet to a 1/2" iron pin found, said iron pin also being the northeast corner of a tract conveyed to Rocksand Investments, LLLP by deed recorded in Instrument Number 2005-30851 RPRDCT; THENCE S OOE03'07" E along the east line of said Rocksand Investments tract, a distance of 503.35 feet to a 1/2" iron pin found, said iron pin also being on the northwesterly line of a tract conveyed to The Atchison, Topeka and Santa Fe Railway Company by deed recorded under County Clerk's File No. 93-R0020408 RPRDCT; said iron pin also being the Point of Curvature of a non -tangent circular curve to the left having a radius of 5829.65 feet, a central angle of 19E15'23" and being subtended by a chord which bears S 54E00'43" W , 1950.06 feet; THENCE along said curve to the left and the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 1959.27 feet to a 1/2" iron pin found; THENCE S 44E23'02" W along the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 27.66 feet to a 5/8" iron pin found; THENCE N 45E36'S8" W along the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 50.00 feet to a 5/8" iron pin found; THENCE S 44E23102" W along the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 1446.37 feet to a 5/8" iron pin found, said iron pin being on the east line of said Aperion Tract One -A and the west line of said Rocksand Investments tract; THENCE N 00E0720" W along the east line of said Aperion Tract One -A and the west line of said Rocksand Investments tract, a distance of 857.55 feet to a capped 1/2" iron pin set; THENCE N 90E00'00" W, departing the east line of said Aperion Tract One -A and the west line of said Rocksand Investments tract, a distance of 773.31 feet to a capped 1/2" iron pin set; THENCE N 65E58'36" W, a distance of 1029.92 feet to a capped 1/2" iron pin set; Exhibit B to Buy -Out Option Contract Page 5 e THENCE N 44E08'03" W, a distance of 999.82 feet to a capped 1/2" iron pin set; THENCE N 52E3422 W. a distance of 867.86 feet to a capped 1/2" iron pin set; THENCE N 86E1427 W, a distance of 222.13 feet to the POINT OF BEGINNING and containing 59,787,842 square feet or 1372.540 acres of land, more or less. ���111r1►L�L�: BEING a 550.197 acre tract of land in the W.C. Brookfield Survey, Abstract No. 34, situated in Denton County, Texas and being that same tract of land as described in deeds recorded in Volume 5128, Page 3102 and Volume 5119, Page 715 of the Real Property Records of Denton County, Texas (RPRDCT) and being more particularly described as follows: BEGINNING at a point in the north line of F.M. 407 at the southeast corner of the herein described tract of land, said point lying in the west line of a tract of land as described in deed to Bill Pennington, recorded in Volume 572, Page 131, RPRDCT; THENCE along the north line of said F.M. 407, as follows: Northwesterly, along a curve to the left, having a radius point that bears S 18E061281' W, 624.31 feet, an arc distance of 204.03 feet, a central angle of 18E43'31 " and being subtended by a chord which bears N 81 E 15' 18" W, 203.13 feet; S 89E22'S7" W, a distance of 1876.49 feet; S 89E18'36" W, a distance of 1931.01 feet; THENCE N OOE04'03" W, departing the north line of said F.M. 407, a distance of 2834.59 feet; THENCE N OOE001S1" E, a distance of 1161.59 feet; THENCE N OOE04' 13" E, a distance of 1244.99 feet to the northwest corner of the herein described tract of land; THENCE, being adjoined to the north by a not of land as described in deed to Orville Rogers, recorded in Document No. 94-R0029773, RPRDCT, along the north line of the herein described tract of land, as follows: S 89E37'03" E, a distance of 5409.41 feet; S OOE32'35" W, a distance of 352.79 feet; N 89E46'56" E, a distance of 651.45 feet; THENCE S OOE44'37" E, being adjoined to the east by a tract of land as described in deed to Laura Carter Johnson, recorded in Volume 3038, Page 713, RPRDCT, a distance of 1372.47 Exhibit B to Buy -Out Option Contract Page 6 feet; THENCE N 85E1640 W, a distance of 2099.00 feet; THENCE S OOE24'45" E, being adjoined tO the east by the aforementioned Pennington tract, a distance of 3642.68 feet to the POINT OF BEGINNING and containing 550.197 acres, more or less. Exhibit B to Buy -Out Option Contract Page 7 Exhibit C Memorandum of Buy -Out Option Contract STATE OF TEXAS § COUNTY OF DENTON § KNOW ALL BY THESE PRESENTS: This Memorandum of Buy -Out Option Contract ("Memorandum") is effective as of 2007, by and among APERION COMMUNITIES, LLLP, ELADIO PROPERTIES, LLLP, DROOY PROPERTIES, LLLP, and ROCKSAND INVESTMENTS, LLLP, Arizona limited liability limited partnerships; AQUA UTILITIES, INC., a Texas corporation, and TRADITION MUNICIPAL UTILITY DISTRICT NO. 2 OF DENTON COUNTY, a municipal utility district created pursuant to Article XVI, Section 59, of the Texas Constitution, Chapters 49 and 54 of the Texas Water Code, and Chapter 8189, Special District Local Laws Code, and any other district created over the Development by dividing the district into one or more new districts pursuant to Chapter 8189, Special District Local Laws Code, (collectively, "Seller"), and THE CITY OF FORT WORTH, a home -rule municipal corporation of Tarrant, Denton, and Wise Counties, Texas ("Purchaser"). A. Under that certain Buy -Out Option Contract dated as of October 1, 2007 ("Contract"), Seller has granted Purchaser the option ("Option") to purchase certain land, improvements, easements, account records, plans, and other associated property ("Property") related to the provision of water and wastewater utility service to, and located within, that certain real property development consisting of approximately 1,920 acres of land in Denton County, Texas, as more particularly described on EXHIBIT "A" attached hereto ("Development"). The period during which Purchaser may exercise the Option begins at any time (and from time to time) after October 1, 2022, but in any event, Purchaser must exercise the Option (if at all) on or before October 1, 2106 ("Option Period"). Purchaser's exercise of the Option is governed by the terms and conditions of the Contract. B. Seller and Purchaser are executing, acknowledging, and recording this Memorandum to provide public notice of the existence of the Contract and of the Option that exists in Purchaser's favor to purchase the Property in the Development under the terms and conditions of the Contract. C. Seller and Purchaser do not intend by this Memorandum —and nothing in this Memorandum may be deemed — to alter, amend or otherwise affect the terms or conditions of the Contract. Exhibit C to Buy -Out Option Contract Page 1 EFFECTIVE as of the date set forth above. SELLER APERION COMMUNITIES, LLLP By: David P. Maniatis, General Partner ELADIO PROPERTIES LLLP By: David P. Maniatis, General Partner DROOY PROPERTIES, LLLP By: David P. Maniatis, General Partner ROCKSAND INVESTMENTS, LLLP By: David P. Maniatis, General Partner AQUA UTILITIES, INC., a Texas corporation By: Name: Title: TRADITION MUNICIPAL UTILITY DISTRICT N0.2 OF DENTON COUNTY By: Name: Title: Exhibit C to Buy -Out Option Contract Page 2 ATTEST: Printed N City Secretary PURCHASER THE CITY OF FORT WORTH, By: Name: APPROVED AS TO FORM Title: AND LEGALITY: Assistant City Attorney Exhibit C to Buy -Out Option Contract Page 3 STATE OF § COUNTY OF § BEFORE ME, THE UNDERSIGNED AUTHORITY, on this day personally appeared as of APERION COMMUNITIES, LLLP, a , on behalf of said partnership, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said partnership. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of 20 Notary Public, State of Texas Notary's Typed or Printed Name My Commission expires: STATE OF COUNTY OF BEFORE ME, THE UNDERSIGNED AUTHORITY, on this day personally appeared as of ELADIO PROPERTIES LLLP, a , on behalf of said partnership, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said partnership. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of Notary Public, State of Texas Notary's Typed or Printed Name My Commission expires: Exhibit C to Buy -Out Option Contract Page 4 STATE OF § COUNTY OF § BEFORE ME, THE UNDERSIGNED AUTHORITY, on this day personally appeared as of DROOY PROPERTIES, LLLP, a partnership, on behalf of said partnership, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said partnership. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the ,20 . Notary Public, State of Texas Notary's Typed or Printed Name My Commission expires: STATE OF § COUNTY OF § BEFORE ME, THE UNDERSIGNED AUTHORITY, on this day personally appeared as of ROCKSAND INVESTMENTS, LLLP, a partnership, on behalf of said partnership, known to me to be the person and officer whose name is subscribed to the foregoing instrument, and acknowledged to me that he or she executed the same for the purposes and consideration therein expressed, in the capacity therein stated, and as the act and deed of said partnership. GIVEN UNDER MY HAND AND SEAL OF OFFICE this the day of ,20 Notary Public, State of Texas Notary's Typed or Printed Name My Commission expires: THE STATE OF TEXAS § Exhibit C to Buy -Out Option Contract Page 5 COUNTY OF § BEFORE ME, the undersigned, a Notary Public in and for the said County and State, on this day personally appeared , known to me to be the person and officer whose name is subscribed to the foregoing Memorandum of Option, and acknowledged to me that the same was the act of Aqua Utilities, Inc., a Texas corporation. GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of , Notary Public in and for the State of Texas My Commission expires: THE STATE OF TEXAS § COUNTY OF § BEFORE ME, the undersigned, a Notary Public in and for the said County and State, on this day personally appeared ,known to me to be the person and officer whose name is subscribed to the foregoing Memorandum of Option and acknowledged to me that the same was the act of Tradition Municipal Utility District No. 2 of Denton County. GIVEN UNDER MY HAND AND SEAL OF OFFICE this day of Notary Public in and for the State of Texas My Commission expires. STATE OF TEXAS § COUNTY OF TARRANT § Exhibit C to Buy -Out Option Contract This Memorandum of Option was acknowledged before me on the day of , 20_, by , the Assistant City Manager of The City of Fort Worth, a Texas home -rule municipal corporation of Tarrant, Denton, and Wise Counties, on behalf of that municipal corporation. Notary Public for the State of Texas Notary's Printed Name: My Commission Expires: Exhibit C to Buy -Out Option Contract Page 7 Exhibit A Legal Description of the Development BEING a 13922.737 acre tract of land in the G. Cardinas Survey, Abstract U. 214, the James Chesier Survey, Abstract No. 225, the W.D. Reed Survey, Abstract No. 1125, the W.C. Brookfield Survey, Abstract No. 34, and the W.A. Ferris Survey, Abstract No. 419 situated in Denton County, Texas and being a combination of a portion of those tracts conveyed to Aperion Communities, L.L.L.P. (Aperion Tract One -A and Aperion Tract One-B), by deed recorded under County Clerk's File No. 2004-11913 of the Real Property Records of Denton County, Texas (RPRDCT), that tract conveyed to Nancy Talley Reynolds, et al, by deed recorded in Volume 2301, Page 223 RPRDCT, a portion of that tract conveyed to Aperion Communities, L.L.L.P. by deed recorded under County Clerk's File No. 2003490652 RPRDCT (Aperion Tract Two), that tract conveyed to Rocksand Investments, LLLP by deed recorded in Instrument Number 2005-30851 RPRDCT and those tracts recorded in Volume 5128, Page 3102 and Volume 5119, Page 715, RPRDCT and being more particularly described as follows: TRACT ONE COMMENCING at a capped Sl8" iron pin found, said iron pin also being on the north right-of- way line of State Highway No. 114, said iron pin also being on the west line of said Alliance 161 Investments tract, said iron pin also being on the east line of a tract conveyed to Betty Marie McIntyre, et al, by deed recorded in Volume 2906, Page 363 RPRDCT; THENCEN OOE32'36" W along the west line of said Alliance 161 Investments tract and the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, a distance of 3701.24 feet to a 3/8" iron pin found; THENCE N 89E39'59" E along the north line of said Alliance 161 Investments tract and the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, a distance of 1826.89 feet to a 1/2" iron pin found, said iron pin also being on the west line of said Aperion Tract One -A; THENCE N OOE22'44" W along the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, and the west line of said Aperion Tract One -A, a distance of 1294.80 feet to a capped 1/2" iron pin set, said capped iron pin set also being on the west line of said Nancy Reynolds Talley, et al tract, said iron pin also being the POINT OF BEGINNING of the herein described tract; THENCE N O0E22'44" W along the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, and the west line of said Aperion Tract One -A, a distance of 102.53 feet to a capped 1/2" iron pin set THENCEN 57E46'29" W along the east line of said McIntyre, et al, tract recorded in Volume 2906, Page 363 RPRDCT, the east line of a tract conveyed to Peggy Jeannine Eaton and Betty Marie McIntyre by deed recorded under County Clerk's File No. 2003-203215 and the west line of said Nancy Reynolds Talley, et al tract, a distance of 253.45 feet to a 1/2" iron pin found; THENCE N OOE21'32" E along the east line of said Peggy Jeannine Eaton and Betty Marie McIntyre tract and the west line of said Nancy Reynolds Talley, et al tract, a distance of 1364.27 Exhibit A to Exhibit C to Buy -Out Option Contract Page 1 feet to a railroad spike found, said railroad spike also being on a west line of said Aperion Tract One -A, said railroad spike also being in Sam Reynolds Road; THENCE N OOE12'20" W along the east line of said Peggy Jeannine Eaton and Betty Marie McIntyre tract and the west line of said Aperion Tract One -A and in Sam Reynolds Road, a distance of 2791.88 feet to a railroad spike found; THENCE S 89E52'16" W along the north line of said Peggy Jeannine Eaton and Betty Marie McIntyre tract and the west line of said Aperion Tract One -A and in Sam Reynolds Road, a distance of 1909.29 feet to a 5/8" iron pin found, said iron pin also being on the east line of Indian Trails Phase 1, an addition to Denton County, Texas as recorded in Cabinet G, Page 311 of the Plat Records of Denton County, Texas (PRDCT); THENCE N OOE09' 15" W along the west line of said Aperion Tract One -A, the east line of said Indian Trails Phase 1, the east line of a tract conveyed to Avondale Ranch by deed recorded in Volume 5289, Page 4253 RPRDCT and in Sam Reynolds Road, a distance of 1437.47 feet to a 60d nail in asphalt found, said 60d nail also being the southwest corner of a tract conveyed to Milton High by deed recorded in Volume 501, Page 248 RPRDCT; THENCE N 76E15'28" E along the west line of said Aperion Tract One -A and the south line of said High tract, a distance of 381.87 feet to a 1/2" iron pin found; THENCE N OOE18'S8" W along the west line of said Aperion Tract One -A and the east line of said High tract, a distance of 307.76 feet to a 1/2" iron pin found; THENCE S 89E55'09" W along the west line of said Aperion Tract One -A and the north line of said High tract, a distance of 370.41 feet to a 60d nail found, said 60d nail also being on the east line of said Avondale Ranch tract and in Sam Reynolds Road; THENCE N OOE12'09" W along the west line of said Aperion Tract One -A, the east line of said Avondale an tract, the east line of a tract conveyed to W.E. Wilkerson by deed recorded in Volume 960, Page 35 RPRDCT, the east line of a tract conveyed to Edward Zelnik, et ux Janet by deed recorded in Volume 4062, Page 1905 RPRDCT, the east line of a tract conveyed to J. Lloyd Barksdale, et ux Dorthy by deed recorded in Volume 829, Page 271 RPRDCT, the east line of a tract conveyed to J. Lloyd Barksdale, et ux Dorthy by deed recorded in Volume 829, Page 275 RPRDCT, the east line of a tract conveyed to Gary Lynn Barksdale, et ux Toni Gayle by deed recorded in Volume 1545, Page 427 RPRDCT, the east line of a tract conveyed to Bobby J. Henry by deed recorded in Volume 5028, Page 3683 RPRDCT, and in Sam Reynolds Road, a distance of 3495.34 feet to a railroad spike found, said railroad spike also being on the south line of a tract conveyed to Margaret DiNapoli, et al, by deed recorded in Volume 4522, Page 2063 RPRDCT; THENCE S 89E57'51" E along the west line of said Aperion Tract One -A and the south line of said Margaret DiNapoli, et al tract, a distance of 509.83 feet to a 5/8" iron pin found, said iron pin also being on the west line of a tract conveyed to Archie Eddleman by deed recorded in Volume 2322, Page 824 RPRDCT; Exhibit A to Exhibit C to Buy -Out Option Contract Page 2 THENCE S OOE14'31" E along the west line of said Aperion Tract One -A and the west line of said Eddleman tract, a distance of 226.43 feet to a 1/2" iron pin found; THENCE N 89E0510 E along the west line of said Aperion Tract One -A and the south line of said Eddleman tract, a distance of 870.61 feet to a 5/8" iron pin found, said iron pin also being the southwest corner of a tract conveyed to Ricky Iverson by deed recorded in Volume 4718, Page 362 RPRDCT; THENCE N 88E48'S4" E along the west line of said Aperion Tract One -A and the south line of said Iverson tract and the south line of a tract conveyed to Carol Theis by deed recorded in Volume 1038, Page 887 RPRDCT, a distance of 1598.77 feet to a 1/2" iron pin found; THENCE N OOE24'S4" W along the west line of said Aperion Tract One -A and the east line of said Theis tract and the east line of a tract conveyed to S.R. Harper by deed recorded in Volume 1726, Page 31 RPRDCT, a distance of 907.14 feet to a 1/2" iron pin found, said iron pin also being the southeast corner of a tract conveyed to Roy Chastain by Contract of Sale recorded under County Cleric's File No. 97-R0021328 RPRDCT; THENCE N OOE43'24" W along the west line of said Aperion Tract One -A and the east line of said Chastain tract, a distance of 423.43 feet to a 1/2" iron pin found, said iron pin also being the southeast corner of said Aperion Tract Two; THENCE S 88E53'O1" W along the south line of said Aperion Tract Two and the north line of said Chastain tract, a distance of 1193.21 feet to a capped 1/2" iron pin found, said iron pin also being on the east line of a tract conveyed to Wayne Harris by deed recorded in Volume 976, Page 42 RPRDCT; THENCE N OOE35'15" W along the west line of said Aperion Tract Two and the east line of said Harris tract, the east line of a tract conveyed to John McCurry by deed recorded in Volume 971, Page 697 RPRDCT, the east line of a tract conveyed to Samuel Haynes by deed recorded in Volume 962, Page 43 RPRDCT, and the east line of a tract conveyed to Howell Choate by deed recorded in Volume 924, Page 921 RPRDCT, a distance of 2336.13 feet to a 1/2" iron pin found, said iron pin also being the southwest corner of a tract conveyed to The Pennington Family Trust by deed recorded in Volume 4833, Page 525 RPRDCT; THENCE S 88E03'OS" E along the north line of said Aperion Tract Two and the south line of said Pennington Family Trust tract recorded in Volume 4833, Page 525 RPRDCT, a distance of 977.84 feet to a capped 1/2" iron pin previously set, said iron pin also being on the north line of Aperion Tract One -A; THENCE N OOE33'20" W, departing the south line of said Pennington Family Trust tract and the north line of said Aperion Tract One -A, a distance of 723.83 feet to a capped 1/2" iron pin previously set, said iron pin also being on the south right -of --way line of F.M. 407 (90' R.O.W.); THENCE N 89E26'40" E, along the south right -of --way line of said F.M. 407 and along the north line of said Pennington Family Trust tract, a distance of 170.00 feet to a capped 1/2" iron pin previously set; Exhibit A to Exhibit C to Buy -Out Option Contract Page 3 THENCE S 0=3320 E, departing the south right -of --way line of said F.M. 407 and the north line of said Pennington Family Trust tract, a distance of 731.26 feet to a capped 1/2" iron pin previously set, said iron pin also being on the south line of said Pennington Family Trust tract and the north line of Aperion Tract One -A; THENCE S 88E03'OS" E along the north line of said Aperion Tract One -A and the south line of said Pennington Family Trust tract, a distance of 42.05 feet to a 1/2" iron pin found, said iron pin also being on the north line of Aperion Tract One -A; THENCE N 89E00'24" E along the north line of said Aperion Tract One -A, the south line of said Pennington Family Trust tract recorded in Volume 4833, Page 525 RPRDCT and the south line of a tract conveyed to The Pennington Family Trust by deed recorded in Volume 4833, Page 521 RPRDCT, a distance of 1146.79 feet to a 1/2" iron pin found, said iron pin also being on the southerly right -of --way line of Farm -to -Market Road No. 407 (F.M. 407) (90' ROW); THENCE S SOE10'O1" E along the north line of said Aperion Tract One -A and the southerly right-of-way line of F.M. 407, a distance of 682.19 feet to a capped 1/2" iron pin set, said iron pin also being the Point of Curvature of a circular curve to the left having a radius of 617.96 feet, a central angle of 39E44'46 and being subtended by a chord which bears S 70E02'24 E , 420.13 Feet; THENCE along said curve to the left and the north line of said Aperion Tract One -A and the southerly right -of --way line of F.M. 407, a distance of 428.68 feet to a capped 1/2" iron pin set; THENCE S 89E54'47" E tangent to said curve and along the north line of said Aperion Tract One -A and the southerly right -of --way line of F.M. 407, a distance of 458.09 feet to a point on the east line of the City of Fort Worth ETJ line and the west line of the Town of Northlake ETJ line; THENCE S OOE00'00" W, departing the north line of said Aperion Tract One -A and the southerly right -of --way line of said F.M 407, along the east line of the City of Fort Worth ETJ line and along the west line of the Town of Northlake ETJ line, a distance of 2998.33 feet to a point on the north line of a tract conveyed to Patricia Malloy by deed recorded in Volume 769, Page 965 RPRDCT; THENCE S 88E57'42" W along the east line of said Aperion Tract One -A and the north line of the north line of said Patricia Malloy tract, a distance of 802.46 feet to a 5/8" iron pin found; THENCE S OOE10'33" E along the east line of said Aperion Tract One -A and the west line of said Patricia Malloy tract, a distance of 3748.38 feet to a 5/8" iron pin found, said iron pin also being the northwest corner of Riggs Place, an addition to Denton County, Texas as recorded in Cabinet E, Page 359 PRDCT; THENCE S OOE17'37" E along the east line of said Aperion Tract One -A, the west line of said Riggs Place and the west line of a remainder tract conveyed to James Riggs, Jr., et ux Deborah, by deed recorded in Volume 870, Page 444 RPRDCT, a distance of 4211.11 feet to a 1/2" iron pin found, said iron pin also being in Sam Reynolds Road; Exhibit A to Exhibit C to Buy -Out Option Contract Page 4 THENCE N 89E5615 E along the east line of said Aperion Tract One -A, the south line of said James Riggs, Jr. remainder tract, the south line of said Riggs Place, the south line of Sunflower Meadows, an addition to Denton County, Texas as recorded in Cabinet O, Page 122 PRDCT, the south line of Sage Meadows, Phase One, an addition to Denton County, Texas as recorded in Cabinet M, Page 208 PRDCT; the south line of a tract conveyed to Locust Thorn, L.P., by deed recorded in Volume 4009, Page 321 RPRDCT, the south line of Foxbane Estates, an addition to Denton County, Texas as recorded in Cabinet H, Page 24 PRDCT and in Sam Reynolds Road, a distance of 3409.24 feet to a capped 1/2" iron pin set, said iron pin also being the original northwest corner of Peyton Place, Phase One, an addition to Denton County, Texas as recorded in Cabinet M, Page 266 PRDCT; THENCE S OOE 15'21 " E along the east line of said Aperion Tract One -A, the west line of said Peyton Place, Phase One and the west line of Peyton Place, Phase Two, an addition to Denton County, Texas as recorded in Cabinet P, Page 50 PRDCT , a distance of 1482.19 feet to a 1/2" iron pin found, said iron pin also being the northeast corner of a tract conveyed to Rocksand Investments, LLLP by deed recorded in Instrument Number 2005-30851 RPRDCT; THENCE S OOE03'07" E along the east line of said Rocicsand Investments tract, a distance of 503.35 feet to a 1/2" iron pin found, said iron pin also being on the northwesterly line of a tract N onveyed to The Atchison, Topeka and Santa Fe Railway Company by deed recorded under County Clerk's File No. 93-R0020408 RPRDCT; said iron pin also being the Point of Curvature of a non -tangent circular curve to the left having a radius of 5829.65 feet, a central angle of 19E1523" and being subtended by a chord which bears S 54E00'43" W , 1950.06 feet; THENCE along said curve to the left and the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 1959.27 feet to a 1/2" iron pin found; THENCE S 44E23'02" W along the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 27.66 feet to a 5/8" iron pin found; THENCE N 45E36'S8" W along the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 50.00 feet to a 5/8" iron pin found; THENCE S 44E23'02" W along the northwesterly line of said Atchison, Topeka and Santa Fe Railway Company tract, a distance of 1446.37 feet to a 5/8" iron pin found, said iron pin being on the east line of said Aperion Tract One -A and the west line of said Rocksand Investments tract; THENCE N 00E0720" W along the east line of said Aperion Tract One -A and the west line of said Rocksand Investments tract, a distance of 857.55 feet to a capped 1/2" iron pin set; THENCE N 90E00'00" W, departing the east line of said Aperion Tract One -A and the west line of said Rocicsand Investments tract, a distance of 773.31 feet to a capped 1/2" iron pin set; THENCE N 65E58'36" W, a distance of 1029.92 feet to a capped 1/2" iron pin set; Exhibit A to Exhibit C to Buy -Out Option Contract Page 5 THENCE N 44E0803 W, a distance of 999.82 feet to a capped 1/2" iron pin set; THENCE N 52E3422 W, a distance of 867.86 feet to a capped 1/2" iron pin set; THENCE N 86E1427 W, a distance of 222.13 feet to the POINT OF BEGINNING and containing 59,787,842 square feet or 1372.540 acres of land, more or less. TRACT TWO BEING a 550.197 acre tract of land in the W.C. Brookfield Survey, Abstract No. 34, situated in Denton County, Texas and being that same tract of land as described in deeds recorded in Volume 5128, Page 3102 and Volume 5119, Page 715 of the Real Property Records of Denton County, Texas (RPRDCT) and being more particularly described as follows: BEGINNING at a point in the north line of F.M. 407 at the southeast corner of the herein described tract of land, said point lying in the west line of a tract of land as described in deed to Bill Pennington, recorded in Volume 572, Page 131, RPRDCT; THENCE along the north line of said F.M. 407, as follows: Northwesterly, along a curve to the left, having a radius point that bears S 18E06128" W, 624.31 feet, an arc distance of 204.03 feet, a central angle of 18E43'31" and being subtended by a chord which bears N 81 E 15' 18" W, 203.13 feet; S 89E22'S7" W, a distance of 1876.49 feet; S 89E18'36" W, a distance of 1931.01 feet; THENCE N OOE04'03" W, departing the north line of said F.M. 407, a distance of 2834.59 feet; THENCE N OOE00'S1" E, a distance of 1161.59 feet; THENCE N flu , a distance of 1244.99 feet to the northwest corner of the herein described tract of land; THENCE, being adjoined to the north by a tract of land as described in deed to Orville Rogers, recorded in Document No. 94-R0029773, RPRDCT, along the north line of the herein described tract of land, as follows: S 89E37'03" E, a distance of 5409.41 feet; S OOE32'35" W, a distance of 352.79 feet; N 89E46'56" E, a distance of 651.45 feet; THENCE S OOE44'37" E. being adjoined to the east by a tract of land as described in deed to Laura Carter Johnson, recorded in Volume 3038, Page 713, RPRDCT, a distance of 1372.47 Exhibit A to Exhibit C to Buy -Out Option Contract Page 6 feet; THENCE N 85E1640 W, a distance of 2099.00 feet; THENCE S 00E24'45" E, being adjoined to the east by the aforementioned Pennington tract, a distance of 3642.68 feet to the POINT OF BEGINNING and containing 550.197 acres, more or less. Exhibit A to Exhibit C to Buy -Out Option Contract Page 7 Exhibit D BILL OF SALE AND ASSIGNMENT THIS BILL OF SALE AND ASSIGNMENT ("Assignment"), effective for all purposes as of _, (the "Effective Date"), is from, Aqua Utilities, Inc., formerly known as AquaSource Utility, Inc., a Texas corporation; Aperion Communities, LLLP, Eladio Properties, LLLP, Drooy Properties, LLLP, and Rocksand Investments, LLLP, Arizona limited liability limited partnerships; and Tradition Municipal Utility District No. 2 of Denton County, a municipal utility district created pursuant to Article XVI, Section 59, of the Texas Constitution, Chapters 49 and 54 of the Texas Water Code and the applicable Special District Local Law and any other district created over the Development by dividing the District into one or more new Districts pursuant to the District Legislation, (individually and collectively, "Assignor") and is to the City of Fort Worth, Texas, a home -rule municipal corporation situated in Tarrant, Denton, and Wise Counties, Texas, ("Assignee"). Concurrently with this Assignment, the Assignor, as Seller, and Assignee, as Purchaser are executing a Special Warranty Deed transferring any tract of land owned by Assignor and in use for the operation of the Water or Wastewater Facilities (the "Land") described in Exhibit A to Assignee. It is the desire of Assignor to hereby ASSIGN, TRANSFER and CONVEY to Assignee all fixtures, fittings, appliances, apparatus equipment, machinery and other items of personal property, affixed or attached to, or placed or situated upon, the Land and any and all other Facilities, rights, contracts, documents, or appurtenances as more fully described below. FOR AND IN CONSIDERATION of the sum of Ten Dollars and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and confessed, Assignor hereby GRANTS, BARGAINS, SELLS, TRANSFERS, ASSIGNS and CONVEYS unto Assignee all of the following assets, (collectively, the "Assets," including, without limitation, the specific items listed on Exhibit B : g. all water distribution facilities, including meters, above ground tanks, pump stations and other equipment, fixtures, improvements or appurtenances used to provide water service to the Development, and located inside the Development (collectively, "Water Facilities"); h. all wastewater collection facilities, including meters, lift stations, and other equipment, fixtures, improvements or appurtenances used to provide wastewater service to the Development, and located inside the Development (collectively, "Wastewater Facilities" ); i. account records and information for existing customers served by the Wastewater and Water Facilities (the "Account Information"); j. surveys, plans and specifications in Seller's possession or control that relate to the Water Facilities or Wastewater Facilities (the "Documents") Exhibit D to Buy -Out Option Contract Page 1 k. any and all other incidental rights, leases, contractual rights, or otherwise related to the Water Facilities, Wastewater Facilities, Account Information, or Documents (the "Contractual Rights"). ON AND SUBJECT TO THE FOLLOWING TERMS AND CONDITIONS: 1. Warranty of Title. Assignor severally agrees to warrant and defend title to the Assets unto Assignee, its successors and assigns forever, as against the claims and demands of all persons claiming or to claim the same or any part thereof. 2. Counterpart Execution. Assignor and Assignee may execute this Assignment in multiple counterparts, each of which shall constitute an original hereof, and the execution and delivery of any one of such counterparts by any signatory party shall have the same force and eSect and shall be binding upon such signatory to the same extent as if the same counterpart were executed by all of the signatory parties. TO HAVE AND TO HOLD the Assigned Properties unto Assignee, its successors and assigns, forever. [THIS SPACE INTENTIONALLY LEFT BLANK/ SIGNATURES ON FOLLOWING PAGE] Exhibit D to Buy -Out Option Contract IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed on this day of 20 ASSIGNOR: AQUA UTILITIES, INC., a Texas corporation By: Robert L. Laughman, President Date: TRADITION MUNICIPAL UTILITY DISTRICT NO.2 OF DENTON COUNTY By: Name: Date: President, Board of Directors APERION COMMUNITIES, LLLP By: David P. Maniatis, General Partner ELADIO PROPERTIES, LLLP By: David P. Maniatis, General Partner DROOY PROPERTIES, LLLP By: David P. Maniatis, General Partner ROCKSAND INVESTMENTS, LLLP By: David P. Maniatis, General Partner Exhibit D to Buy -Out Option Contract Page 3 ATTEST: Printed Name: City Secretary APPROVED AS TO FORM AND LEGALITY: Assistant City Attorney ASSIGNEE: THE CITY OF FORT WORTH, a Texas home -rule municipal corporation of Tarrant, Denton, and Wise Counties By: Name: Title: Date: Exhibit D to Buy -Out Option Contract EXHIBIT A The an [insert legal description and map] Exhibit D to Buy -Out Option Contract Page 5 EXHIBIT B The Assets Exhibit D to Buy -Out Option Contract Page 6 Page 1 of 3 City of Fort Worth, Texas Mayor and Council Communication DATE: Tuesday, December 18, 2007 LOG NAME: 06TRADITION2 REFERENCE NO.: C-22589 SUBJECT: Authorize Execution of the Consent Resolution, Development Agreement, Buy -Out Option Agreement, Impact Fee Agreement, Utility Agreement, Wholesale Wastewater Service Agreement, and the Agreement for the Sale of Treated Water and Approve the Form of the Strategic Partnership Agreement for Tradition Municipal Utility District No. 2 of Denton County RECOMMENDATION: It is recommended that the City Council: 1. Adopt a resolution consenting to the creation of Tradition Municipal Utility District No. 2 of Denton County ("District"); 2. Authorize the City Manager or a designee to execute the following contingent upon receipt of necessary executed documents from Aqua Utilities: a. A Development Agreement between the City and Aperion Communities, LLLP, Eladio Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP; b. A Buy -Out Option Agreement between the City, Aqua Utilities, Aperion Communities, LLLP, Eladio Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP, and the District; c. An Impact Fee Agreement between the City, Aqua Utilities, Aperion Communities, LLLP, Eladio Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP, and the District; d. A Utility Agreement between the City and Aqua Utilities, Aperion Communities, LLLP, Eladio Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP, and the District; e. A Wholesale Wastewater Service Agreement between the City and Aqua Utilities; f. An Agreement for the Sale of Treated Water between the City and Aqua Utilities; and 3. Authorize the City Manager or a designee to bring forth the Strategic Partnership Agreement for approval after the formation of the Municipal Utility District. DISCUSSION: Aperion Communities, LLLP, Eladio Properties, LLLP, and Drooy Properties, LLLP, and Rocksand Investments, LLLP, (AEDR) are Arizona limited liability partnerships that own and are developing approximately 2,663 acres in Fort Worth's and Northlake's extraterritorial jurisdiction as a mixed -use development to be known as "Tradition." The property is in Denton County and is located north of Highway 114 and west of Highway 156. On December 13, 2005, (M&C C-21198) the City Council authorized the City Manager to enter into contracts for the first 431 acres of this development known as Tradition Municipal Utility District No. 1 of Denton County. The district was confirmed by the voters on May 12, 2007. it nar.kPt/RP.nnrl-c/m Page 2 of 3 On September 12, 2006, (M&C G-15392) the City Council granted conditional consent to Tradition Municipal Utility District No. 2 of Denton County in response to a petition submitted by AEDR. The intent was to allow the creation of a "master MUD" that would subsequently be subdivided into smaller tracts consistent with their development phases. During the 2007 legislative session, H.B. 3182 was approved and authorized the creation of this district consisting of 1,922.737 acres subject to adoption of a consent resolution by the Fort Worth City Council. The attached resolution grants formal consent to the formation of the District and specifically grants to the District the authority to finance road projects. In addition, it grants the City Manager the authority to execute the "Agreement Concerning Creation and Operation of Tradition Municipal Utility District No. 2 of Denton County" (the Consent Agreement). This is the contract between the developer, the District, and the City governing the issuance of bonds, the construction standards for infrastructure, and the terms of future annexation. The other documents listed above, which are available for public inspection and copying in the City Secretary's Office, can be summarized as follows: The Development Agreement provides for the enforcement of municipal building codes and establishes land use and development regulations for the Development. In addition, it imposes Special Regulations to govern design issues such as block lengths and street right-of-way and sidewalk widths. The Development will generally be in compliance with development standards within the City limits. The Agreement also identifies enhancements beyond the City's regulations in terms of amenities, entry features and landscaping. The remaining five agreements identified as items b through f above relate to the provision of water and wastewater facilities and service to the Development. Aqua Utilities is the holder of the Water Certificate of Convenience and Necessity (CCN) in the Development and are therefore party to several of the agreements. Aqua Utilities will provide retail water and wastewater service to the Development. The City will provide wholesale water service through a wholesale contract similar to those with our customer cities. The provider for wholesale wastewater service is still under negotiation. The goal of the City and the Developer is to partner with Trinity River Authority (TRA) and install a new interceptor line from the existing TRA wastewater treatment facility at Denton Creek. If this occurs, the City will provide wholesale wastewater service to Aqua Utilities through a wholesale contract and a TRA interceptor line agreement will be brought to City Council for consideration. If the negotiation of TRA interceptor option is unsuccessful, the Developer intends to build a package treatment plant to be operated by Aqua Utilities. The Impact Fee Agreement will allow the City to recover the treatment, pumping and other infrastructure costs associated with providing water and wastewater service to the Development. Under the Buy -Out Option Agreement the City has the option to purchase the water and wastewater facilities in the Development from the District for $10 and become the retail water and wastewater service provider. This can occur at anytime after 17 years of the first connection to retail water or wastewater utility service within a District, or within 90 days before the date of annexation of a District by the City. Aqua Utilities will agree not to contest the application of the City for the CCN for the area within that District. The Strategic Partnership Agreement will authorize the City to annex acreage within the Development designated for commercial development for the limited purpose of imposing sales and use tax. This agreement will be presented to the City Council with the appropriate public hearings after the district is formally established by election. This Development will not require the expenditure of City funds or the collection of offsetting revenue for wholesale services for several years. FISCAL INFORMATION/CERTIFICATION: The Finance Director certifies that approval of these Agreements will have no immediate material effect on lret/Rennrtc/mr. mint Page 3 of 3 City funds. Any effect on expenditures and revenues will be budgeted in future fiscal years. TO Fund/Account/Centers Submitted for City Manager's Office bv: Originating Department Head: Additional Information Contact: FROM Fund/Account/Centers Dale Fisseler (6140) Fernando Costa (8042) Susan Alanis (8180) int