Case PGH Doc 748 Filed 05/21/09 Page 1 of 7

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1 Case PGH Doc 748 Filed 05/21/09 Page 1 of 7 UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF FLORIDA WEST PALM BEACH DIVISION In re: Mercedes Homes, Inc., et al., Case No PGH Debtors. (Chapter 11) Jointly Administered / LENNAR HOMES OF TEXAS LAND AND CONSTRUCTION, LTD.'S MOTION TO COMPEL ASSUMPTION OR REJECTION OF EXECUTORY CONTRACT Lennar Homes of Texas Land & Construction, Ltd. ("Lennar"), by and through undersigned counsel, pursuant to Section 365(d) of Title 11 of the United States Code, 11 U.S.C. 101, et seq. (the "Bankruptcy Code") and Rule 6006, Federal Rules of Bankruptcy Procedure, hereby files this Motion to Compel Assumption or Rejection of Executory Contract, and states as follows: JURISDICTION AND VENUE 1. This Court has jurisdiction over this matter under 28 U.S.C This matter is a core proceeding within the meaning of 28 U.S.C. 157(b)(2). Venue is proper in this District pursuant to 28 U.S.C. 1409(a). 2. On or about January 26, 2009, Debtors filed their voluntary petitions pursuant to Chapter 11, Title 11, U.S. Code. Since that time, Debtors have been debtors-in-possession, and have operated their businesses pursuant to 11 U.S.C 1107 and BACKGROUND

2 Case PGH Doc 748 Filed 05/21/09 Page 2 of 7 3. On or about August 1, 2006, Lennar and Mercedes Homes of Texas, Ltd. ("Mercedes" or "Debtor") 1 entered into the Rim Rock - Section 3- Lot Sale and Purchase Contract and subsequently entered into the following related amendments: First Amendment to Rim Rock - Section 3 Lot Sale and Purchase Contract; Second Amendment to Rim Rock - Section 3 Lot Sale and Purchase Contract; Third Amendment to Rim Rock - Section 3 Lot Sale and Purchase Contract; Fourth Amendment to Rim Rock - Section 3 Lot Sale and Purchase Contract; Fifth Amendment to Rim Rock - Section 3 Lot Sale and Purchase Contract; Sixth Amendment to Rim Rock - Section 3 Lot Sale and Purchase Contract; and Seventh Amendment to Rim Rock - Section 3 Lot Sale and Purchase Contract (collectively, the "Agreement"). True and correct copies of the Agreement are attached hereto as Exhibits "A", "B", "C", "D", "E", "F", "G" and "H". 4. Under the terms of the Agreement, the Debtor agreed to purchase the remaining 59 lots in accordance with the following takedown schedule referenced in Paragraph 3 of the Seventh Amendment to the Agreement: Buyer's next purchase obligation under the contract shall include three (3) Lots and shall occur on or before December 31, 2008, (the "Next Takedown"). Thereafter, until all the remaining Lots under the Contract have been purchased, Buyer shall purchase two (2) additional Lots per month. Each closing shall occur on or before the fifteenth (15 th ) day of each calendar month (the "Closing Date"). Additionally, within ten (10) days prior to each Closing Date, Buyer shall provide to the Seller the legal description of the Lots to be purchased by Buyer at such Closing. (the "Takedown Schedule"). See Exhibit "H", Seventh Amendment, Paragraph On January 15, 2009, Debtor defaulted under the Agreement by failing to purchase 2 Lots and other subsequent Lots in accordance with the Takedown Schedule. 6. In the event of a default by the Debtor, because of the difficulty, inconvenience and uncertainty of ascertaining actual damages, the Agreement provides that Lennar shall be

3 Case PGH Doc 748 Filed 05/21/09 Page 3 of 7 entitled to terminate the Agreement upon default and retain the earnest money deposit specified in Section 1.03 of the Agreement as liquidated damages. See Exhibit "A", Section VIII. 7. To date, Lennar has not received any written election from the Debtor regarding its intent to assume or reject the Agreement. Moreover, Lennar has not received any adequate assurance: (a) that Debtor's defaults under the Agreement will be cured; or (b) of Debtor's future performance under the terms of the Agreement. 8. By this Motion, Lennar seeks for this Court to compel the Debtor to assume or reject the Agreement. RELIEF REQUESTED 9. The Court should compel the Debtor to assume or reject the Agreement within 10 days of the Court's ruling. Section 365(d)(2) provides that: In a case under chapter 9, 11, 12 or 13 of this title, the trustee may assume or reject an executory contract at any time before the confirmation of the plan but the court, on request of any party to such contract or lease, may order the trustee to determine within a specified period of time whether to assume or reject such contract 11 U.S.C. 365(d)(2)(emphasis added). 10. Here, the Agreement is an unexpired, pre-petition executory contract which has not yet been assumed or rejected by the Debtor. 11. A non-debtor party to an executory contract, such as Lennar, may file a motion with the Court to compel a debtor to assume or reject an executory contract within a specified period of time. Id. 12. Debtor has defaulted under the terms of the Agreement and Lennar is prejudiced by its inability to re-list and sell the lots to other interested purchasers. Lennar has opportunities

4 Case PGH Doc 748 Filed 05/21/09 Page 4 of 7 to sell the subject lots to other homebuilders and individuals, but is precluded from doing so by virtue of Debtor's delay in assuming or rejecting the Agreement. 13. In addition to the lack of revenue from Debtor's failure to close on the lots (as per the Takedown Schedule), Lennar remains obligated to make interest payments, annual payments for real estate taxes and insurance, and monthly payments for the upkeep and maintenance of the lots which in the aggregate amounts to approximately $250 per day. 14. While Section 365(d)(2) is intended to give a debtor some "breathing room" by allowing reasonable time within which to decide whether assumption or rejection of an executory contract is appropriate, such breathing room is not "without limits". In re Adelphia Comm. Corp., 291 B.R. 283, 292 (Bankr. S.D.N.Y. 2003)(quoting In re Enron Corp., 279 B.R. 695, 702 (Bankr. S.D.N.Y. 2002)); see also In re Braniff, Inc., 118 B.R. 819, 845 (Bankr. M.D. Fla. 1990)(citations omitted). 15. Here, the Debtor has had more than 4 months to determine whether to assume or reject the Agreement, which under the circumstances is a reasonable amount of time. See, e.g., In re Adelphia Comm. Corp., 291 B.R. at 299 (holding 3 months to be a reasonable period); In re The Travelot Co., 286 B.R. 462 (S.D. Ga. 2002)(holding 6 months to be a reasonable period); In re Flying W. Airways, Inc., 328 F.Supp.1256 (E.D. Pa. 1971)(holding 3 months to be a reasonable time period). 16. Pursuant to Section 365(b), if there has been a default in an executory contract, there can be no assumption or rejection unless the debtor-in-possession: (a) cures, or provides adequate assurance that it will cure, the defaults; (b) compensates, or provides adequate assurance that it will promptly compensate the other party for its actual pecuniary loss resulting

5 Case PGH Doc 748 Filed 05/21/09 Page 5 of 7 from such default; and (c) provides adequate assurance of future performance under the executory contract. 17. Debtor's defaults and failure to assume and cure its defaults have harmed Lennar and expose Lennar to additional damages and expense with each day that the Debtor fails to assume or reject the Agreement. Lennar has not received the benefit of its bargain with the Debtor, and Lennar's damages under the Agreement are difficult and inconvenient to ascertain as indicated in the Agreement. Lennar, therefore, is entitled to retain the deposit specified in the Agreement as liquidated damages for the Debtor's breach of the Agreement. 18. By this Motion, Lennar requests that (1) the Agreement be rejected; (2) Lennar be relieved of any and all obligations under the terms of the Agreement; and (3) Lennar retain the earnest money deposit as liquidated damages as specified in Paragraph 1.03 and Section VIII of the Agreement. Alternatively, Lennar requests the Court order the Debtor to either assume or reject the Agreement within ten (10) days of the entry of such order. [Remainder of page left intentionally blank]

6 Case PGH Doc 748 Filed 05/21/09 Page 6 of 7 WHEREFORE, for all the foregoing reasons, Lennar Homes of Texas Land and Construction, Ltd. respectfully requests that this Court either enter an Order compelling Debtor to reject the Agreement with Lennar; or, alternatively, enter an Order compelling Debtor to assume the Agreement, cure all defaults and provide adequate assurance of future performance. Further, Lennar respectfully requests that the Court order that, in the rejection of the Agreement, Lennar is relieved of and from any and all obligations under the Agreement and is permitted to retain the earnest money deposit as liquidated damages; and grant such other and further relief as this Court deems proper and just. CERTIFICATE OF COMPLIANCE AND SERVICE I HEREBY CERTIFY that I am admitted to the Bar of the United States District Court for the Southern District of Florida and am in compliance with the additional qualifications to practice in this Court as set forth in Local Rule (A). I HEREBY CERTIFY that a true and correct copy of the foregoing was served via electronic transmission on all CM/ECF registered users for this case and by U.S. Mail to the attached service list on this 21st day of May, Dated: May 21, 2009 Respectfully submitted, HOLLAND & KNIGHT LLP 701 Brickell Avenue Suite 3000 Miami, FL Telephone (305) Facsimile (305) joaquin.alemany@hklaw.com By: /s/ Joaquin J. Alemany Jose A. Casal Florida Bar No Joaquin J. Alemany Florida Bar No

7 Case PGH Doc 748 Filed 05/21/09 Page 7 of 7 (a) DEBTOR: SERVICE LIST Mercedes Homes, Inc N. Wickham Rd., #501 Melbourne, FL (b) DEBTOR S ATTORNEYS: Craig D Hansen, Esq Sean T Cork, Esq Two Renaissance Square 40 N Central Ave # 2700 Phoenix, AZ Tina M. Talarchyk 777 S. Flagler Dr. #1900 West Palm Beach, FL (c) ATTORNEY FOR U.S. TRUSTEE: Heidi A Feinman Office of the US Trustee 51 SW 1 Ave #1204 Miami, FL (d) ATTORNEYS FOR CREDITORS COMMITTEE: Glenn D Moses, Esq Paul J. Battista, Esq 100 SE 2 St #4400 Miami, FL (e) NOTICING/CLAIMS AGENT: Kurtzman Carson Consultants LLC (Vandell) 2335 Alaska Ave El Segundo, CA 90245

8 Case PGH Doc Filed 05/21/09 Page 1 of 39 RIM ROCK - SECTION 3 LOT SALE AND PURCHASE CONTRACT THE STATE OF TEXAS 9 9 COUNTY OF HAYS 0 This Contract (the "Contract") made and entered into by and between LENNAR HOMES OF TEXAS LAND AND CONSTRUCTION, LTD., a Texas limited partnership ("Seller"), and MERCEDES HOMES OF TEXAS, LTD., a Florida limited partnership ("Buyer"). I. SALE AND PURCHASE OF THE PROPERTY 1.O1 Sale and Purchase. For the price and subject to the terms and conditions of this Contract, Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase approximately eighty-one (81) single-family residential lots (the "Lots") to be developed in three (3) sections of approximately twenty-seven (27) Lots each (the "Section" or "Sections") in the proposed RIM ROCK SECTION THREE SUBDIVISION, Hays County, Texas (the "Subdivision"), more fully described by metes and bounds on Exhibit "A", attached hereto and incorporated herein by reference for all purposes (the "Land"). The Lots will be more fully described on Exhibit "A-1 ", Exhibit "A-2" and Exhibit "A-3" to be attached hereto and incorporated herein by reference for all purposes pursuant to this Section The exact Lots to be purchased by Buyer in each Section pursuant to this Contract shall be determined and agreed upon Seller and Buyer prior to the end of the Feasibility Period in accordance with this Section Prior to the end of the Feasibility Period, Seller and Buyer shall agree upon the exact Lots in the Section One of the Subdivision to be purchased by Buyer pursuant to this Contract. When the Lots that Buyer is to purchase in Section One of the Subdivision pursuant to this Contract have been identified pursuant to this Section 1.01, Seller and Buyer shall amend this Contract by attaching an Exhibit "A-1" to this Contract which will identify the Lots in Section One of the Subdivision. Prior to the end of the Feasibility Period, Seller and Buyer shall agree upon the procedure by which the Lots to be purchased by Buyer pursuant to this Contract in the Sections Two and Three of the Subdivision shall be allocated to Buyer. When the Lots in the Sections Two and Three of Subdivision that Buyer is to purchase pursuant to this Contract have been identified pursuant to the procedure agreed upon as set forth in this Section 1.01, Buyer and Seller shall amend this Contract by attaching an Exhibit "A-2" to this Contract which will identify the Lots in the Section Two of the Subdivision and an Exhibit "A-3" which will identify the Lots in the Section Three of the Subdivision, respectively. Seller and Buyer acknowledge that the lot and block legal description for the Lots contained in this Contract technically may be legally insufficient for the purpose of supporting an action for specific performance or other enforcement hereof. Because the parties are desirous of executing this Contract to provide for the right of enforcement, Seller and Buyer agree that (a) they are experienced in transactions of this nature, (b) they are familiar with the location of the Lots, (c) each party waives any and all claims of an insufficient legal description, and (d) upon completion of, and recordation of, the final subdivision plat of the Subdivision without material

9 Case PGH Doc Filed 05/21/09 Page 2 of 39 changes from the Preliminary Plat which shall be furnished to Buyer, or with any such changes approved by Buyer, Buyer and Seller agree that this Contract will be amended to incorporate the legal description of the Lots as finally subdivided. The term "Lots" shall include all Seller's right, title and interest (but only to the extent such rights and property interests relate to the Lots and they are reserved to the extent the same relates to any of the remainder of the Subdivision or other property) in and to roads, rights-ofway, ingress and egress easements relating to any of the Lots, in and to any engineering plans, tests, surveys, feasibility reports and studies with respect to the Lots, and all other rights, privileges and appurtenances owned by Seller, reversionary or otherwise, applicable to any of the Lots, but excluding any reimbursables related to common utility facilities or rights to receive the return of any deposits or refunds of any fees paid in connection with the development of the Subdivision. As more thoroughly described in Section hereof, Seller and Buyer further acknowledge that the rights and obligations under this Contract are specifically conditioned upon Seller's prior acquisition of the Lots pursuant to an existing Lot Sale and Purchase Contract previously executed and enforceable as of the Effective Date hereof (the "Underlying Agreement"; the seller under the Underlying Agreement is referred to herein as the "Underlying Seller") Purchase Price. The purchase price for each of the Lots will be EIGHTY FIVE THOUSAND AND NO1100 DOLLARS ($85,000.00) per Lot (the "Purchase Price"). In addition to the Purchase Price, at each Closing Buyer shall pay an additional amount equal to eight (8%) percent per annum of the outstanding Purchase Price, as figured from the date of the Initial Closing (as defined below) until the Closing of each such Lot or Lots (the "Additional Purchase Price"). Notwithstanding the foregoing, if the Substantial Completion Date for any Lot to be closed subsequent to the Initial Closing is delayed beyond or does not occur at least fifteen (15) days before the first scheduled Closing that would include such Lot, and such delay is not the fault of the Buyer, then the Additional Purchase Price applicable to such Lot shall cease to accrue on the date of such fifteenth (15th) day before such first scheduled Closing and shall not re-commence until the Substantial Completion Date of such Lot occurs. Notwithstanding anything to the contrary, if permanent underground electric service is not available to and ready for connection for a Section, including, without limitation, available to and "hot" at the boundary of all of the Lots in such Section, on or before one hundred twenty (120) days after the Substantial Completion Date for the applicable Section, then Buyer's takedown obligations and the Additional Purchase Price for all Lots shall abate until such time as permanent underground electric power is available to and ready for connection for the applicable Section, including, without limitation, available to and "hot" at the boundary of all of the Lots in the applicable Section Earnest Money. On or before the expiration of five (5) business days following the Effective Date, Buyer shall deposit earnest money, in the form of an irrevocable letter of credit (the "Letter of Credit"), in the amount of Fifty Thousand and No1100 Dollars ($50,000.00) (the "Earnest Money") with North American Title Company (Attn: Dawn Schweter) (the "Title Company") whose address, telephone and facsimile numbers are: Address: Research Blvd, Building 4, Suite 120, Austin, Texas 78759; Telephone: (512) ; Facsimile: (512)

10 Case PGH Doc Filed 05/21/09 Page 3 of The Letter of Credit shall be in favor of the Title Company as the beneficiary and shall otherwise be in the form attached hereto as Exhibit "B" and made a part hereof for all purposes. Upon deposit of the Earnest Money, the Buyer shall pay Seller, One Hundred and No11 00 Dollars ($100.00) as non-refundable, independent consideration for the execution of this Contract (the "Independent Contract Consideration"). The Independent Contract Consideration is fully earned and shall be retained by Seller notwithstanding any other provision of this Contract and shall not be credited against the Purchase Price. On or before five (5) business days following the expiration of the Feasibility Period, Buyer shall amend the Letter of Credit to the amount of $480, and redeposit it with the Title Company. Buyer agrees to replace the Letter of Credit, at least thirty (30) days prior to its expiration, with a new Letter of Credit in the same amount and on the same terms as the original Letter of Credit Additional Earnest Money. On or before ten (1 0) days following expiration of the Feasibility Period, Buyer shall deposit with the Title Company a cash amount equal to Three Hundred Thousand and No1100 Dollars ($300,000.00), to be held as Earnest Money sometimes be referred to herein as the "Additional Earnest Money". After the Buyer has closed on forty-one (41) Lots under this Contract, the Additional Earnest Money will be credited against the Purchase Price on the next subsequent closing as described in Section 1.06 hereof TerminationIReturn of Letter of Credit. On or before ten (10) days following the Closing of the purchase of the final Lot under this Contract, the Letter of Credit shall be returned to Buyer Takedown Schedule. Buyer must close its purchase of Lots (each, a "Closing") according to the following schedule (the "Takedown Schedule"). At any given Closing, Buyer may purchase a greater number of lots only with the express consent of Seller which will not be - unreasonably withheld, delayed or conditioned. Likewise, Buyer may purchase lots at an earlier date than described in the Takedown Schedule only with the express consent of Seller which will not be unreasonably withheld, conditioned or delayed. The Takedown Schedule is as follows: (a) On the date that is fifteen (15) days after the Substantial Completion Date of Section One, Buyer agrees to purchase and close eight (8) Lots (the "Initial Closing"); and (b) On the date that is one hundred and fifty (150) days following the Initial Closing, Buyer agrees to purchase and close seven (7) Lots; and (c) Continuing every ninety (90) days thereafter Buyer agrees to purchase and close seven (7) Lots until all such lots are purchased. In no event will either party hereto be obligated to close on any lots before the Substantial Completion Date for the Section in which the Lot is located. If for any reason the Substantial Completion Date for a Section is delayed beyond or does not occur at least fifteen (15) days before the first scheduled Closing that would include a Lot or Lots in such Section of the Subdivision, the Takedown Schedule will be delayed accordingly on a day for day basis and will resume on or before the fifteenth (15th) day following the Substantial Completion Date for the applicable Section at which time Buyer agrees to purchase and close seven (7) Lots, minus the number of Lots purchased at the last Closing that occurred prior to the Substantial Completion

11 Case PGH Doc Filed 05/21/09 Page 4 of 39 Date for the applicable Section. For example, if Buyer purchased and closed six (6) Lots at the last Closing that occurred prior to the Substantial Completion Date of the second Section of the Subdivision but the Substantial Completion Date had not occurred for the seventh (7th) Lot at the time of such Closing, then Buyer would purchase and close one (1) Lot in the second Section of the Subdivision on or before the fifteenth (15th) day following the Substantial Completion Date for the second Section of the Subdivision, and then purchase and close seven (7) Lots ninety (90) days thereafter. The Takedown Schedule will then continue as described above. Buyer shall notify Seller in writing with respect to the Lots it intends to close at a Closing on or before that date which is five (5) days prior to the date on which Buyer desires to proceed with the applicable Closing. Any Lots purchased by Buyer in addition to the minimum takedown requirements during any period (and approved by Seller as required hereunder) shall count as a credit toward Buyer's subsequent minimum takedown obligations. 11. TITLE AND REVIEW 2.01 Feasibility Period. Buyer shall have a period commencing on the Effective Date of this Contract and ending on August 3 1, 2006 (the "Feasibility Period") in which to make all investigations and inspections of the Lots. Seller will allow Buyer to enter onto the Lots for the purpose of conducting investigations. Any expenses incurred by Buyer in performance of the inspections shall be paid for by Buyer. Buyer agrees to indemnify, defend and hold harmless Seller and each Lot not purchased by Buyer from any liens or claims arising fi-om any such activities and inspections except those arising out of the Seller's gross negligence or willfbl misconduct or the existence or discovery of a hazardous substance, conditions or material with respect to the Land or the Lots which are not caused by Buyer or its agents or contractors. Nothing herein is intended to obligate the Buyer to remediate or clean up any environmental or other condition existing at the Land or the Lots or discovered or uncovered by Buyer (or its agents) during its investigation of the Land or Lots. Upon completion of all testing or other examinations of the Lots, Buyer shall restore the Lots, as near as is reasonably possible to the condition it was in prior to having done any such testing or examinations. Notwithstanding any provision herein to the contrary, Buyer's liability and obligations under this Section 2.01 shall survive any termination of this Contract. If prior to the expiration of the Feasibility Period, Buyer for any reason deems the Lots to be unsuitable, then the Buyer, by giving written notice to Title Company prior to the expiration of the Feasibility Period, may terminate the Contract and, after Buyer: (1) restores the Lots to the condition which existed prior to any testing or other activities on the Lots which were undertaken by or through Buyer, (2) discharges all liens against the Lots resulting from Buyer's activities; and (3) returns to Seller copies of all studies, reports, analyses, market information, and other data which Seller provided to Buyer pursuant to this Contract, the Letter of Credit shall be returned to Buyer and neither party will have any further obligation to the other. Notwithstanding anything to the contrary in this Contract, if Buyer does not give Seller notice of Buyer's waiver of the right to terminate this Contract pursuant to this Section 2.01 (the "Acceptance Notice") on or before the last day of the Feasibility Period, this Contract shall automatically terminate. If this Contract terminates pursuant to this Section 2.01, then the Letter

12 Case PGH Doc Filed 05/21/09 Page 5 of 39 of Credit shall be returned to Buyer immediately upon written request (a copy of which shall be simultaneously sent to Seller) without the necessity of obtaining any consent or release by Seller, and all further rights and obligations of the parties under this Contract shall terminate. Prior to any termination of this Contract, Buyer and its agents, employees, or representatives shall have a continuing right of reasonable access to the Property during the pendency of this Contract for the purpose of conducting surveys, architectural, engineering, geotechnical, and environmental inspections and tests (including intrusive inspection and sampling), and any other inspections, studies, or tests reasonably required by Buyer. It is acknowledged and agreed by Seller that no examination by Buyer, its agents, employees, or representatives, of the Property shall constitute a waiver or relinquishment on the part of Buyer of Buyer's right to rely on the covenants, representations, warranties and agreements made by Seller in this Contract. In the course of its investigations, Buyer may make inquires to third-parties including, without limitation, contractors, and municipal, local, and other governmental officials and representatives, and Seller consents to such inquiries Subdivision Plat; Restrictive Covenants; Other Diligence Materials. Seller shall provide the following to Buyer (the "Property Information"): (i) a Phase one environmental study; (ii) a preliminary soils report; (iii) proposed homeowner's association formation documents; (iv) Seller's existing copy of a survey of the property; and (v) a copy of the preliminary subdivision plat of the Subdivision (the "Preliminary Plat"), and the Feasibility Period hereunder will not commence until Seller has delivered to Buyer each of the above enumerated items. At least twenty (20) days prior the end of the Feasibility Period, Seller will deliver to Buyer: (i) preliminary concept plans for landscapinglentry features; and (ii) a copy of the proposed Declaration of Covenants, Conditions and Restrictions affecting the Subdivision (the "Subdivision Restrictions"). All such formation documents relating to the homeowner's association and the Subdivision Restrictions shall have been prepared by Robert Burton of Arrnbrust Brown, L.L.P. Buyer agrees to assume and perform all of the obligations of a lot owner under the Subdivision Restrictions, including but not limited to all financial obligations associated therewith. Seller and Buyer agree that prior to Closing, the Subdivision Restrictions will be recorded in a form substantially similar to that delivered to Buyer, which may include, among other things, an architectural control committee approval of all plans and specifications prior to commencement of construction or clearing on any Lot within the Subdivision. To the extent that there are any material changes to the Subdivision Restrictions from the form delivered to Buyer, such material changes shall be subject to the approval of Buyer and Buyer's obligations under this Contract are conditioned upon Buyer's approval of such changes. All of Buyer's plans and specifications are deemed approved by the architectural control committee, which shall be composed of members selected by Seller. Buyer understands that the Subdivision may be placed in one or more Owner's associations and will be subject to bylaws, rules and regulations and assessments of the Owner's associations. Buyer agrees to participate in the Owner's associations and to comply with the bylaws, rules and regulations and assessments of the Owner's associations. Each Final Plat that is recorded in the Hays County Plat Records shall be in substantially the same form of as the Preliminary Plat. To the extent that there are any material changes to the Final Plat of the applicable Section of Lots, such changes shall be subject to the approval of Buyer (which will not be unreasonably withheld, delayed or conditioned) and Buyer's obligations under this Contract are conditioned upon Buyer's approval of such changes.

13 Case PGH Doc Filed 05/21/09 Page 6 of Title Commitment. Within ten (10) days from the Effective Date of this Contract, Buyer shall obtain at Buyer's sole cost: (i) a commitment for an owner's title insurance policy covering the Lots (the "Title Commitment"), issued by the Title Company, and (ii) legible copies of all instruments (including, without limitation, all applicable restrictions) evidencing exceptions shown therein. Buyer shall have ten (10) days from the date of its receipt of such Title Commitment and legible copies of instruments to review the status of title to the Lots. If there are any exceptions or matters to which Buyer objects, Buyer shall notify Seller, in writing ("Buyer's Objection Notice"), of such objections within the ten (10) day review period. Seller may, but shall not be obligated to, cure the objections specified in Buyer's Objection Notice. In the event Seller is unable or unwilling to cure any such objections within ten (10) days after Seller's receipt of Buyer's Objection Notice, Buyer shall have the option within five (5) days of the expiration of Seller's ten (10) day cure period to either cancel this Contract by written notice to Seller and, following compliance with Section 2.01, receive a return of the Earnest Money, or waive its objections to the exceptions and proceed with the purchase of the Lots pursuant to this Contract. If Buyer does not object to the title exceptions within the ten (10) day review period, or Buyer does not cancel this Contract within the five (5) day period set forth in the immediately preceding sentence, Buyer shall have been deemed to have waived its right to make objections to such exceptions. Any title objections: (i) which are not timely objected to by Buyer or (ii) which are timely objected to by Buyer and, if not cured within the time period specified, waived by Buyer, are hereinafter called the "Permitted Exceptions". None of the foregoing shall be construed to release Seller from its obligation to satisfy all requirements set forth in Schedule C of the Commitment as a condition to the obligation of Buyer to close liereunder. Within ten (10) days prior to taking down and closing any Lot, if Buyer so requests, Seller shall cause the Title Company to deliver an updated Title Commitment for the Lots being closed and Buyer shall be entitled to object, in writing, to any encumbrance on the updated Title Commitment which was not reflected on the initial Title Commitment in its form as of the expiration of the Feasibility Period, provided, however, Buyer shall not be entitled to object to any Final Plat or the Subdivision Restrictions affecting the Lots, if the same are in form and content required by this Contract. In the event of any such reasonable objection by Buyer and Seller's subsequent failure or rehsal to cure such objection, Buyer may terminate this Contract as to such affected Lot(s) and receive a refund of a prorata portion of the Additional Earnest Money with respect to such Lot(s) DEVELOPMENT AND COMPLETION 3.01 Substantial Completion Date. For purposes of this Contract, the term "Substantial Completion" of the Lots for a particular Section is defined to mean the point in time that Seller forwards to Buyer the written notice of substantial completion (a "Substantial Completion Notice") provided to Seller pursuant to the Underlying Agreement certifying that each of the following shall have occurred with respect to the applicable Section: (i) the final plat of the applicable Section of Lots has been approved by the City of Austin and has been recorded in the Hays County Plat Records (each, a "Final Plat"); (ii) all streets, water lines and drainage improvements for that Section have been installed in accordance with the applicable governmental ordinances and regulations and approved by the applicable governmental authorities in sufficient committed capacities for each lot in the applicable Section of the

14 Case PGH Doc Filed 05/21/09 Page 7 of 39 Subdivision, including, without limitation, the applicable Lots; (iii) permanent underground electric is in place and available to the perimeter of each of the Lots in that Section for connection upon Buyer's application to and payment to each applicable service provider of its permit, connection and inspection fees, all in accordance with the policies of each applicable service provider, and with all developer fees and other charges for installation of such utilities having been paid by Seller or the Underlying Seller as herein defined (this requirement does not include payment of Capital Recovery Fees, which are to be the sole responsibility of Buyer); and (iv) all conduit needed for the installation of cable and telephone service by the applicable service providers has been installed and Seller has delivered to Buyer copies of letters to those service providers requesting that service be installed by the applicable service provider. Seller agrees that the Substantial Completion Date with respect to each Section of Lots shall occur no later than: (a) Section One of the Subdivision: nine (9) months after the expiration of the Feasibility Period; (b) Section Two of the Subdivision: twelve (12) months after the Substantial Completion Date of Section One; and (c) Section Three of the Subdivision: twelve (12) months after the Substantial Completion Date of Section Two. Notwithstanding the foregoing, Buyer, at Buyer's option, may purchase any Lot prior to the Substantial Completion Date, but only with Seller's prior consent (which shall not be unreasonably withheld, conditioned or delayed) and the same shall not relieve Seller from its covenants and obligations to satisfy the aforementioned requirements for such Lot or Lots in accordance with the terms of this Contract Substantial Completion Obiections. Upon receipt of a Substantial Completion Notice required pursuant to Section above, Buyer shall have a period of ten (1 0) days within which to (i) review all such documentation, (ii) inspect the applicable Lots, (iii) conduct such other investigations or studies as it deems necessary to determine if Substantial Completion for the applicable Lots has been achieved, and (iv) notify Seller in writing if any condition described in Section 3.01 above has not been achieved or remains unsatisfactory to Buyer. Upon receipt of Buyer's written notice, Seller shall within ten (10) days takes steps to correct, at no expense to Buyer, any work or defect which Buyer has designated as being unsatisfactory or not achieved. In the event Seller is unable in good faith to cure Buyer's objections within the ten (10) day period provided above, Seller shall notify Buyer, whereupon Buyer may elect by written notice to Seller within ten (10) days after Buyer's receipt of Seller's notice, in addition to Buyer's other remedies on account of Seller's failure to achieve Substantial Completion of all of the applicable Lots, to terminate this Contract with respect to the applicable Lot or Lots affected by the objections identified in Buyer's timely made notice. Buyer shall have the same review rights and Seller shall have the same obligations to correct work as set forth above with respect to any curative or correction work performed by Seller. For purposes of this Contract, the phrase "Substantial Com~letion Date" shall be either (a) the date of Buyer's receipt of the Substantial Completion Notice and all documents required in Section 3.01 above with respect to all of the applicable Lots, or (b) only if Buyer shall have timely made any such objections pursuant to this

15 Case PGH Doc Filed 05/21/09 Page 8 of 39 Section 3.02, three (3) days after Seller has satisfied all of Buyer's objections to the applicable Substantial Completion Notice. IV. CLOSINGS 4.01 Closings. Buyer will be obligated, as a minimum requirement, to close its purchase of Lots in the numbers and according to the schedule set forth in Section On the applicable Closing Date, the Closing of the Lot or Lots then being purchased will take place as set forth in this Section IV Payment of Purchase Price and Additional Purchase Price. At each Closing, Buyer must deliver to the Title Company funds in an amount equal to the sum of: (i) the aggregate Purchase Price of all Lots being purchased at the Closing, less the applicable credit for the Additional Earnest Money (applicable to the Purchase Price as described in Section 1.04 hereof); plus (ii) the Additional Purchase Price, if any; plus (iii) Buyer's closing costs as set forth in Section Seller's Obligations. At each Closing Seller will: (a) execute and deliver to Buyer a Special Warranty Deed free and clear of all liens, encumbrances or other matters, except the Permitted Exceptions and the lien for current ad valorem taxes, in fee simple. However, with respect to specific lenders designated from time to time by Buyer, the Special Warranty Deed shall contain customary "vendor's lienlassignment to lender" language if so required by Buyer; (b) execute and deliver to Buyer an affidavit, under penalty of perjury, stating that Seller is not a foreign person or a foreign corporation subject to the Foreign Investment in Real Property Tax Act and therefore not subject to its withholding, and stating Seller's taxpayer identification number; (c) upon request by Buyer and at Buyer's expense, cause the Title Company to deliver to Buyer (or commit to promptly forward to Buyer) an Owner's Policy of Title Insurance insuring title to the Lots being purchased at such Closing, for the amount of the purchase price, subject only to Permitted Exceptions and the lien for current ad valorem taxes, and containing other standard provisions and exceptions; and (d) an Assignment and Bill of Sale conveying all personal property on the Lots or relating to the Lots. (e) At the Initial Closing, Seller shall assign to Buyer, Seller's rights, if any, to the extent such rights are assignable, under the Underlying Agreement with respect to the Underlying Seller's covenants, representations and warranties pertaining to the Lots, with Seller retaining Seller's rights to enforce the Underlying Agreement with respect to the applicable Underlying Seller's covenants representations, and warranties pertaining to the Lots, but specifically excluding from the rights to be conveyed to Buyer pursuant to the terms hereof, Seller's rights to the extent they relate solely to other lots or properties adjacent to, contiguous

16 Case PGH Doc Filed 05/21/09 Page 9 of 39 with or in close proximity to the Lots. The assignment shall be made by the execution of a form of assignment attached hereto as Exhibit "C" and incorporated herein by reference (the "Assignment of Representations and Warranties"). Seller shall obtain the prior written consent of the Underlying Seller to such form of Assignment of Representations and Warranties and provide a copy of such written consent of the Underlying Seller to Buyer on or before the expiration of the Feasibility Period. Seller shall deliver such form of Assignment of Representations and Warranties approved in writing by the Underlying Seller at the Initial Closing Closing Costs. (a) Seller's closing costs will be (i) the roll-back taxes, if any (as hereinafter defined) and Seller's portion of the prorated taxes; (ii) Seller's attorney's fees; (iii) the cost of tax certificates; (iv) the cost of obtaining all required releases of any liens against the Lots; (v) one half of the cost of any escrow fee; (vi) any other incidental closing costs and fees customarily paid by sellers in Hays County, Texas. (b) Buyer will pay (i) Buyer's attorney's fees; (ii) Buyer's portion of the prorated taxes; (iii) the cost of all recording fees; (iv) if so requested, the cost of the Owner's Title Policy, and the cost of deleting the survey exception or any other standard exceptions to the Owner's Title Policy; (v) one half the cost of any escrow fee; and (vi) such other incidental closing costs and fees customarily paid by buyers in Hays County, Texas Prorations. Current ad valorem taxes and any other assessments for the Lots closed will be prorated effective as of the date of each Closing. If a Closing occurs at a time when the Lots have been platted but the taxing authorities have not assessed taxes based on that plat, then ad valorem taxes and assessments shall be prorated based on the number of gross square feet of land within the Lots being purchased as compared to the total number of gross square feet of land within the larger parcel assessed by the taxing authorities. Taxes due for a change in the use of Land ("roll-back taxes"), including interest, shall be the responsibility of Underlying Seller and shall be paid at or prior to the Initial Closing. If the amount of such rollback taxes is not known at the Initial Closing, then the Title Company shall make a reasonable estimate of such taxes and the Seller shall cause the amount so stated to be placed into escrow with the Title Company at the Initial Closing for the payment of roll-back taxes when due. Prior to the end of the Feasibility Period, Buyer and Seller shall agree upon the form and substance of an escrow agreement for the escrow and payment by the Underlying Seller of the roll-back taxes and Seller shall use good faith efforts to procure Underlying Seller's participation in such escrow agreement. Buyer shall not be responsible for payment of any roll-back taxes. The obligations in this Section 4.05 shall survive Closing. v. TITLE OF BUYER AND COMMENCEMENT OF CONSTRUCTION No right, title, equity or interest or right of possession in any of the Lots shall vest in Buyer until Buyer has completed the purchase of the Lots in the manner and within the time

17 Case PGH Doc Filed 05/21/09 Page 10 of 39 required by this Contract and Buyer has actually received a deed to the Lots. Buyer shall not commence construction of improvements on any Lot until such closing and conveyance. Buyer and Buyer's agents shall have reasonable access to and may enter upon the Lots and conduct such on site testing and inspections as Buyer reasonably desires throughout the term of this Contract, and Buyer's agents have been or will be given sufficient opportunities to fully inspect the Lots. If Buyer begins activity on any Lot before it acquires title to and pays for that Lot, Buyer agrees to indemnify and defend Seller from all claims for damages to persons or property that may be asserted by any person against Seller arising out of or resulting from the presence and activities of Buyer, and this indemnity will cover and include all costs of litigation that may be filed with respect to any claim, reasonable attorneys' fees and the amount of any judgment that may be recovered against Seller by any person damaged as a result of Buyer's presence or activities upon a Lot or Lots. VI. REPRESENTATIONS AND WARRANTIES OF SELLER Seller hereby makes the following representations, warranties and covenants related to each Section, which (except for matters which are based on Seller's knowledge) shall also be true as of the closings of the sale of the Lots in a Section to Buyer, and which shall survive the respective closings for each Section: (a) Seller has complied in all material respects, with all applicable laws, ordinances, regulations and restrictions relating to the Lots in the Subdivision, and Seller has not received any written notice that Seller has not complied with same; (b) There is no pending or, to the knowledge of Seller, threatened or contemplated condemnation or similar proceedings or special assessment affecting the Lots in the Subdivision by any Governmental Authority. "Governmental Authority" means the United States, the State of Texas, the City of Austin, Texas, the County of Hays, and any agency, department, commission, board, bureau or instrumentality of any of them; (c) The use of the Lots for single-family residences shall not materially violate any applicable current law, statute, ordinance, rule, regulation, order or determination of any Governmental Authority (herein sometimes collectively called "Applicable Laws"), or any recorded restrictive covenant or deed restriction affecting the Subdivision, and Seller has not received any notice of such a violation; (d) As of the date of closing of each Lot in the Subdivision there will be no unpaid charges, liabilities or obligations arising fi-om the construction, ownership or operation of the Lots (other than those which Seller shall pay in the ordinary course of business) which could give rise to any mechanic's or materialmen's or other statutory lien or lien of any type whatsoever against the Lots (except for liens to be released at the applicable Closing, the lien for homeowners' association dues and assessments and the lien for real estate taxes for the current year that are not yet due and payable), or for which Buyer shall otherwise be responsible;

18 Case PGH Doc Filed 05/21/09 Page 11 of 39 (e) When substantially completed, the Lots in the Subdivision shall have full and free access to and from public highways, streets or roads, and Seller has no knowledge of any pending or threatened governmental proceedings or any other fact which would limit or result in the termination of such access; (f) To the best of Seller's knowledge, there exists no judicial, quasi-judicial, administrative or other proceedings or court order, building code provisions, or recorded deed restriction or restrictive covenant which might in any way impede or adversely affect the construction of houses on the Lots in that Section by Buyer, other than the Subdivision Restrictions and normal building codes and ordinances common to the area; (g) On or before the Substantial Completion Date for a Section, clean and potable water suitable for domestic use and electric, telephone, and cable service shall be made available to the perimeters of the Lots in that Section, and shall be in sufficient, committed capacity for normal single-family residential service on the Lots in that Section; (h) To the knowledge of Seller, there is no pending or threatened litigation or administrative proceeding which could adversely affect title to the Lots in a Section or the ability of Seller to perform any of its obligations hereunder or the use of the Lots in that Section by Buyer; (i) Seller has no actual knowledge of any change contemplated in any Applicable Laws nor any judicial or administrative action, nor any action by adjacent landowners, which could prevent or impede Buyer's or any subsequent homeowner's use of the Lots in that Section; (j) Performance of this Contract shall not result in any breach of, or constitute any default under, or result in the imposition of any lien or encumbrance upon the Lots in that Section under any agreement or other instrument to which Seller or the Lots in that Section might be bound; (k) To the best of Seller's knowledge, the drainage of all surface waters to adjoining properties has been provided for in the manner and method approved by applicable Governmental Authority and any and all necessary offsite drainage and flowage easements and rights have been or shall be obtained prior to the Initial Closing and all related offsite improvements for the applicable Section shall have been constructed prior to the first Closing for the applicable Section; (1) Seller has made no commitments to any Governmental Authority, utility company, school board or church, or to any other religious body, or any other organization, group or individual relating to any of the Lots in that Section, which would impose an obligation upon Buyer or its successors or assigns to make any contribution or dedications of money or land to construct, install or maintain any improvements of a public or private nature on or off any of the Lots, and Seller has no knowledge or information that any Governmental Authority has imposed any requirements that any developer of any of the Lots or builder pay directly or indirectly any special fees or contributions or incur any expense or obligation in connection with any development of the Lots in that Section. 'The provisions of this subparagraph shall not apply

19 Case PGH Doc Filed 05/21/09 Page 12 of 39 to local real estate, homeowner's association, or school taxes or other assessments assessed or levied against any of the Lots; (m) To the best of Seller's knowledge, there exist no uncured notices which have been served by any Governmental Authority on Seller for violations of law, rules or regulations including, without limitation, violations of environmental or drainage laws, rules or regulations; (n) Seller is financially able to perform all of its obligations under this Contract; and (0) To the best of Seller's knowledge, there is no fill on any Lot or if there is fill on any Lot, then such fill areas have been filled with suitable soils, with moisture content acceptable to Buyer's engineer and compacted to 95 standard proctor; with those conditions to be verified to Buyer's reasonable satisfaction. (p) Seller has not received notice of any condemnation proceedings affecting the Lots. To the best of Seller's knowledge, no portion of the Lots contain any substance which may be classified as a hazardous, toxic, chemical or radioactive substance, or a contaminant or pollutant (together, "Hazardous Substances") under applicable federal, state or local law, ordinance, rule or regulation ("Hazardous Substances Applicable Laws") or which may require any cleanup, remediation or other corrective action pursuant to such Hazardous Substances Applicable Laws. Seller has not used any portion of the Lots, nor permitted any person or entity to use the Lots for the purpose of storage, generation, manufacture, disposal, transportation or treatment of any such Hazardous Substances in violation of Hazardous Substances Applicable Laws. Seller has complied with, and has no knowledge of, any violation, condition, or any action which with the passing of time or giving of notice would be deemed a violation of any and all Applicable Laws, Hazardous Substance Laws, ordinances, regulations, statutes, codes, rules, orders, decrees, determinations, covenants, on or affecting the Lots, and every part thereof. Seller shall not dispose of any trash, debris, building materials, Hazardous Substances or organic material (including without limitation trees and stumps) on the Lots. In the event such disposal has occurred prior to the date hereof, Seller shall remove all such materials at Seller's expense prior to the Closing. (q) To the extent that Seller continues to build homes in any Section of the Subdivision, Seller shall build in the Subdivision only homes that have plans, elevations, specifications, appearance and quality comparable to and substantially similar to the Village Builders product currently existing in Hielscher Estates, Section Twelve. (r) Seller represents and warrants that as of the Effective Date, Seller has not entered into any Other Builder Agreement (as hereinafter defined) on terms more favorable to the purchaser under such Other Builder Agreement than the terms contained in this Contract, including, particularly, but without limitation, the terms related to (i) the Purchase Price of the Lots, (ii) Takedown Schedule, and (iii) Earnest Money and Additional Earnest Money. Seller further represents and warrants that as of the Effective Date, Seller has not entered into any Other Builder Agreement with any purchaser other than Second Builder (as hereinafter defined). The representations in this paragraph shall survive for a period of six (6) months after the last Closing.

20 Case PGH Doc Filed 05/21/09 Page 13 of 39 (s) Seller has been duly organized and validly exists as a Texas limited partnership, and is qualified to do business in the state where the Land is located. Seller has the full right and authority and has obtained any and all consents required therefor to enter into this Contract, consummate or cause to be consummated the sale. This Contract and all of the documents to be delivered by Seller at the Closing have been and will be authorized and properly executed and will constitute the valid and binding obligations of Seller, enforceable in accordance with their terms. Performance of this Contract will not result in any breach of, or constitute a default under, any agreement or instrument to which Seller is a party or by which Seller or the Land or Lots might be bound. (t) As of each Closing, each of the Lots being conveyed shall have achieved Substantial Completion as described in Section 3.0land each Lot closed is buildable by Buyer (subject to the payment by Buyer of applicable fees for building permits). (u) Seller has not entered into any other contract or option for the sale of the Lots which has not been terminated, and during the pendency of this Contract, Seller will not enter into any other contract or option for the sale of the Lots. There is no agreement to which Seller is a party or, binding on Seller to sell all or any portion of the Lots to any party other than Buyer or which will prohibit or delay Seller's sale of the Lots to the Buyer. There is no outstanding option or right of first refusal in favor of any third party to buy the Lots, or any of them. VII. REPRESENTATIONS AND WARRANTIES OF BUYER Buyer represents, warrants and covenants to Seller as follows, which representations, warranties and covenants will survive the conveyance of the Lots to Buyer hereunder: (a) Buyer agrees to subordinate its equitable interest in the Lots if required by any governmental authority or public utility as a condition to the acceptance and recording of a subdivision plat (including, without limitation, any replat or amendment), or as a condition to providing utility services to the Subdivision. Buyer agrees to join in the execution of the Subdivision Restrictions (or amendments thereof) if required by Seller and approved by Buyer pursuant to this Contract. If any governmental authority or public utility serving the Subdivision requires Buyer to join in the dedication of any subdivision plat, replat or amendment, or in the granting of any restrictions or utility easements within the Subdivision, either before or after title to the Lots passes to Buyer, Buyer agrees to do so upon Seller's written request, provided that the plat, amendment, restriction or easement would not cause Buyer to be unable to construct a residential dwelling substantially in accordance with its approved plans on any affected Lot, Buyer otherwise approves the same pursuant to this Contract and there is no cost to Buyer to do so, which obligation shall expressly survive the closing of the Contract. (b) Prior to occupancy of a residence upon a Lot, Buyer further agrees to construct, at its expense, any driveways, approaches, and sidewalks that may be required by any applicable governmental authorities. (c) Buyer will, from and after the Closing of a Section, maintain all of the completed Lots in that Section in a neat, clean and orderly condition. Upon Buyer's receipt of written

21 Case PGH Doc Filed 05/21/09 Page 14 of 39 request from Seller, Buyer will mow grass and weeds on all completed Lots in a Section from the first Closing for that Section until the resale of the Lots with a residence constructed thereon as follows: grass and weeds located within ten feet (10') of a Completed Home Boundary Line (as hereinafter defined) and grass and weeds located in the right-of-way of any street abutting such a Lot as such right-of-way is shown on the applicable Final Plat. The term "Completed Home Boundary Line" shall mean a boundary line between a completed Lot and another lot in the Subdivision on which a single-family residence has been completed. Buyer will maintain all construction sites in a neat and orderly condition, and be responsible for the proper disposal and removal of all construction debris from the Subdivision. In the event Buyer fails to properly maintain the Lots, Seller may, upon giving notice to Buyer and allowing three days for Buyer to remedy, have the Lots cleared of debris and trash and/or mowed, and Buyer hereby agrees to reimburse Seller for the reasonable, actual costs incurred by Seller for such cleaning. Seller covenants and agrees to include provisions in its Other Builder Agreement (as hereinafter defined) with Second Builder requiring that Second Builder (as hereinafter defined) mow grass and weeds on all lots owned by Other Builder in a completed Section and maintain such lots to the same extent that Buyer is required to maintain completed Lots and mow grass and weeds on completed Lots as set forth in this Section (c), and permitting Seller to have such lots maintained and mowed if Other Builder does not properly maintain such lots and requiring the Other Builder to reimburse Seller for the reasonable, actual costs incurred by Seller for such maintenance and mowing. (d) Buyer will be solely responsible at Buyer's expense, for all utility connection, capital recovery, subsequent user or tap fees and/or deposits, building permits, inspection fees and any other governmental fees associated with Buyer's ownership, improvement, use and sale of the Lots after closing. Buyer agrees to reimburse Seller for the cost of any capital recovery fee or impact fee related to water or wastewater service provided by the City of Austin in which the City of Austin requires Seller to pay prior to Closing that would otherwise be paid by Buyer after Closing. Such reimbursement to be made on or before three days after Seller has paid the City of Austin and provided to Buyer written evidence of such payment, including identification of the applicable Lots. Notwithstanding the foregoing, Buyer shall not be entitled to any payments, reimbursements, proceeds or offsets of any kind or character to which Seller is entitled pursuant to this Contract or Seller's agreements with any entity providing utilities to the Lots. (e) Buyer acknowledges that Seller has disclosed to Buyer that a portion of the building area on some applicable Lots lie within an area designated as a 100-year flood plain or a flood-prone area under the current FEMA flood insurance rate map covering the vicinity where the Lots are situated (collectively, "Flood Prone Area"). Notwithstanding anything to the contrary, if any Lot does not have a contiguous building area located outside the Flood Prone Area of such Lot of sufficient size and shape for a seventy-foot (70') deep by fifty-five-foot (55') wide building pad and a standard septic system complying with the Subdivision Restrictions and all applicable laws, statutes, rules and regulations of all applicable federal, state and local governmental and quasi-governmental authorities, then Buyer may terminate this Contract with respect to each such Lot and receive a refund of a pro rata portion of the Additional Earnest Money. Additionally, Buyer acknowledges that Seller has disclosed to Buyer that a portion of some Lots may lie within an area designated for fish and/or wildlife conservation.

22 Case PGH Doc Filed 05/21/09 Page 15 of 39 VIII. BUYER'S DEFAULT If any representation or warranty of Buyer is false or if Buyer breaches any provision of this Contract, including, but not limited to, a failure to close in the time and manner herein provided, to timely pay any sums coming due hereunder, Buyer will be in default hereunder. If Buyer defaults in the performance of this Contract, then Seller will give written notice to Buyer, specifying the event of default, and extending to Buyer fifteen (15) days from the date of the notice to cure the default prior to exercise of any rights or remedies pursuant to this Contract; provided however, no such notice shall be required to be given to a party who has sought relief under the United States Bankruptcy Code, as amended, and from time to time in effect (the "Code"). If Buyer fails to cure any such default within fifteen (1 5) days of the date of the notice, Seller, as its sole and exclusive remedy, may either: (i) terminate this Contract and receive the Earnest Money as liquidated damages (and not a penalty) for a default by Buyer under this Contract because of the difficulty, inconvenience and uncertainty of ascertaining actual damages, Buyer and Seller hereby agree that such sum is a fair estimate of such damages or (ii) extend the time for performance for such period of time as may be mutually agreed upon in writing by the parties hereto. In the event of termination of this Contract by Seller as a result of Buyer's default, Buyer will have no hrther right or obligation to purchase the Lots. In the event that Buyer shall file a petition seeking relief under the Code and shall thereafter, as debtor-in-possession or by action of a trustee appointed in the debtor's case, elect to assume this Contract, no such election shall be effective unless: (i) Seller has elected in writing to continue this Contract; (ii) all defaults of Buyer under this Contract have been cured and Buyer shall have promptly demonstrated to Seller, to Seller's reasonable satisfaction, Buyer's ability to so effect such cure of all defaults; and (iii) Buyer shall have delivered to Seller within ten (10) days of Buyer's election to assume this Contract, or Buyer shall have provided other evidence acceptable to Seller in Seller's reasonable discretion, that Buyer shall be able to comply with all of its obligations under this Contract. IX. SELLER'S DEFAULT In the event of the failure of Seller to perform any of its obligations under this Contract (or if any representation or warranty by Seller hereunder is false ) then Buyer will give written notice to Seller, specifying the event of default, and extending to Seller fifteen (15) Days from the date of the notice to cure the default prior to exercise of any rights or remedies pursuant to this Contract; provided however, no such notice shall be required to be given to a party who has sought relief under the United States Bankruptcy Code, as amended, and from time to time in effect (the "Code"). If Seller fails to cure any such default within fifteen (15) days of the date of the notice, Buyer shall be entitled, as its sole exclusive remedy to either: (i) terminate this Contract and receive a return of the Earnest Money and the Additional Earnest Money, (ii) seek specific performance of Seller's obligations under this Contract, provided that with respect to the conveyance of the Lots, Buyer may only seek specific performance as to a lot previously acquired by Seller pursuant to the Underlying Agreement, (iii) in the event Seller conveys or encumbers or fails to remove any encumbrance on any of the Lots in violation of this Contract or breaches any representation or warranty of Seller, sue Seller for damages (iv) suspend the

23 Case PGH Doc Filed 05/21/09 Page 16 of 39 accrual of the Additional Purchase Price and the Takedown Schedule until such time as Seller's default is cured, (v) pursue any specific remedy provided for in this Contract for a specific default, and/or (vi) extend the time for performance for such period of time as may be mutually agreed upon in writing by the parties hereto. Notwithstanding any other provision herein to the contrary, if the Seller fails to satisfy its obligations to discharge liens as provided herein, Buyer may, but shall not be obligated to elect to satisfy such obligations and Buyer will be granted a credit against the Purchase Price for the cost incurred by Buyer to satisfy such obligations of Seller. In the event that Seller shall file a petition seeking relief under the Code and shall thereafter, as debtor-in-possession or by action of a trustee appointed in the debtor's case, elect to assume this Contract, no such election shall be effective unless: (i) Buyer has elected in writing to continue this Contract; (ii) all defaults of Seller under this Contract have been cured and Seller shall have promptly demonstrated to Buyer, to Buyer's reasonable satisfaction, Seller's ability to so effect such cure of all defaults; and (iii) Seller shall have delivered to Buyer within ten (10) days of Seller's election to assume this Contract, or Seller shall have provided other evidence acceptable to Buyer in Buyer's reasonable discretion, that Seller shall be able to comply with all of its obligations under this Contract. X. DEFECTIVE LOTS If at any time during the performance of this Contract, Buyer reasonably determines that any Lot or Lots in that Section are not suitable for the construction of Buyer's single-family homes ("Defective Lots"), then Buyer shall have the option to terminate its obligation to purchase the Defective Lots (but shall be obligated to close on all other Lots). Defective Lots are only those, if any, which are not suitable for construction as aforesaid due to: (i) lack of availability or operation of utilities, (ii) the existence or location of items or conditions which would prevent the issuance of a building permit on an improved Lot; (iii) those which are the subject of a material inaccuracy in a representation or warranty contained in Section VI; or (iv) the existence of waste or debris which is buried on the Lot. Notwithstanding the foregoing Buyer is specifically prohibited from asserting a Lot as a Defective Lot for any condition specifically disclosed to and acknowledged by Buyer in Section VII(e) hereof. Buyer shall be entitled to delete any such Defective Lots from this Contract, with a proportionate reduction in the Purchase Price and the Earnest Money. If more than ten percent (10%) of the Lots in a Section are Defective Lots, then Buyer may terminate this Contract, in which event the Earnest Money shall be returned to Buyer and the parties hereto shall have no further obligations one to the other hereunder as to any Lots which Buyer does not actually purchase except as set forth in Section V above. XI. COMMISSION Seller and Buyer each represent and warrant to the other party that it has not dealt with a real estate agent, real estate broker or other third party in connection with this transaction. Seller and Buyer agree to indemnify and hold each other harmless from the payment or claim for any

24 Case PGH Doc Filed 05/21/09 Page 17 of 39 commission, fee, compensation of any agent, broker or other third party whose claim arises through its acts. XII. ACCEPTANCE OF SUBDIVISION Upon the acceptance of streets, curbs, gutters, utilities and drainage facilities by the applicable local governmental authorities and expiration of the 1 year contractor's warranty period, Buyer releases Seller from any further obligations in connection therewith and any covenants or warranties relating to the installation thereof. Buyer understands that such acceptance by governmental authorities may occur after the closings hereunder. XIII. DAMAGES TO THE SUBDIVISION Buyer agrees: (i) to repair any damage to the Subdivision which may be caused by Buyer or Buyer's contractors, subcontractors, materialmen or invitees, or the subcontractors, suppliers, materialmen or invitees of Buyer's contractors, subcontractors, or invitees (collectively, the "Buyer Parties"), and in connection therewith, to pay the full cost of repairing and restoring any streets, curbs, sidewalks, utilities, trees or other subdivision improvements or landscaping of any kind or nature which may be damaged by any one or more of the Buyer Parties'; and (ii) to comply with all maintenance and repair obligations which may be imposed upon the Buyer Parties or the Lot during Buyer's ownership of the Lot under the terms of any of the Subdivision Restrictions. Buyer's liabilities and obligations under this paragraph will survive all closings or any termination of this Contract. XIV. SELLER'S COVENANTS Seller hereby covenants and agrees that as soon as reasonably practicable after the Substantial Completion Date for the first Section for which the Substantial Completion Date occurs, but in no event later than one hundred fifty (150) days after the Substantial Completion Date for the first Section for which the Substantial Completion Date occurs, Seller shall, at Seller's sole cost and expense, cause all landscapinglentry features to be completed in accordance with the plans provided to Buyer pursuant to Section 2.02 above. xv. MISCELLANEOUS Communitv, Directional, and Billboard Signs. After the Initial Closing and only with the prior written consent of Seller, which consent shall not be unreasonably withheld, conditioned or delayed, Buyer shall have the right to erect community or directional signs in the Subdivision subject to Buyer obtaining the.necessary approvals and permits from the City of Austin. Buyer agrees to maintain all such signs in good condition and repair, with a reasonably neat and orderly appearance.

25 Case PGH Doc Filed 05/21/09 Page 18 of Condemnation. In the event that condemnation or rights of eminent domain or like process shall be commenced in connection with any of the Lots in a Section which, in Buyer's reasonable opinion, would have a material adverse impact on Buyer's proposed development of the Lots, Buyer shall have the right to elect in writing to either: (i) continue this Contract in full force and effect, notwithstanding such taking or threatened taking, (ii) delete the portion of the Lots condemned or threatened to be condemned from this Contract, (iii) terminate this Contract and receive a full refund of the remaining Additional Earnest Money and return of the Letter of Credit if the Lots which are taken or would be taken exceed fifteen percent (1 5%) of all Lots in that Section Construction Trailer. Buyer upon agreement by Seller shall have the right to use a Lot or Lots in the Subdivision ("Construction Trailer Lots") for (i) installation of a temporary sales trailer prior to model completion and opening, and (ii) installation of a temporary construction trailer which may be maintained throughout construction. Buyer's rights hereunder are subject to Seller's consent thereto, which consent shall not be unreasonably withheld, conditioned or delayed, and specifically include the following terms, conditions, agreements and requirements: (i) Buyer shall perform the improvement of the Construction Trailer Lots in a good and workmanlike manner and Buyer shall mow and maintain the Construction Trailer Lots in an attractive condition, all at Buyer's sole cost and expense; and (ii) Buyer shall indemnify, defend and hold Seller harmless from and against any liability, damage, claims, costs or expenses arising from, caused by, or in any way related to any activities upon or within the Construction Trailer Lots No Merger. Any term or condition imposing an obligation or duty or creating a right or benefit beyond the date of conveyance of any Lot shall not be deemed to merge into the instrument evidencing the conveyance but shall (subject to any limits specifically contained in this Contract) survive the particular Closing until fully performed or realized by the appropriate Party Attorney's Fees. In the event that either party brings suit for the breach of this Contract or of any condition, representation, covenant or agreement contained herein, the prevailing party shall be entitled to recover all reasonable attorney's fees, costs and expenses incurred by the prevailing party in connection therewith from the nongrevailing party Notices. All notices, demands and requests hereunder shall be in writing and shall be deemed to have been properly delivered and received (i) as of the date of delivery to the addresses set forth below if personally delivered, (ii) three (3) business days after deposit in a regularly maintained receptacle for the United States mail, certified mail, return receipt requested and postage prepaid, or (iii) one (1) business day after deposit with Federal Express or comparable overnight delivery system for overnight delivery with all costs prepaid. All notices, demands and requests hereunder shall be addressed as follows: SELLER: Lennar Homes of Texas Land and Construction, Ltd Research Blvd., Building 4, Suite 100 Austin, Texas 78759

26 Case PGH Doc Filed 05/21/09 Page 19 of 39 Attn: James Giddens, James Domey, Galen Whisnand and Brian Saathoff Facsimile: (5 12) With a copy to: Blake Buffington Buffington & Messina, P.C West Sixth Street Austin, Texas Facsimile: (5 12) BUYER: Mercedes Homes 1 Chisholm Trail, Suite 11 0 Round Rock, Texas Attn: Randy McGillem Facsimile: (512) and Mercedes Homes, Inc North Wickham Road Suite 500 Melbourne, Florida Attn: Karen Harkness, Esq. Telephone: (32 1) Facsimile: (321) and Mercedes Homes, Inc North Wickham Road Suite 500 Melbourne, Florida Attn: Keith Buescher Telephone: (321) Facsimile: (32 1)

27 Case PGH Doc Filed 05/21/09 Page 20 of 39 With a Copy To: Nathan M. Rosen, P.C. One Bent Tree Tower Dallas Parkway, Suite 660 Addison, Texas Attn: Nathan M. Rosen, Esq. Telephone: (972) Facsimile: (972) Entire Agreement. This Contract and the exhibits hereto set forth the entire agreement between the parties, and no other statement, agreement or understanding, oral or written, or amendment or modification to this Contract, will be recognized or enforced unless the same shall be in writing and signed by both parties subsequent to the effective date hereof. THERE ARE NO OTHER ORAL OR WRITTEN AGREEMENTS BETWEEN THE PARTIES HERETO OR OTHER THIRD PARTY RELATING TO THE SUBJECT TRANSACTION Binding Arbitration. Any dispute, claim, or controversy of any kind (e.g., whether in contract or in tort, statutory or common law, legal or equitable) now existing or hereafter arising between or among the parties hereto in any way arising out of, pertaining to or in connection with this Contract and the rights and/or obligations of the parties hereunder shall, except as expressly and specifically noted to the contrary in this Contract, be resolved by binding arbitration. The foregoing matters shall be referred to as a "Dispute". Each of the parties agrees on behalf of itself and its affiliates to arbitrate any Dispute. Any party to this Contract may, by summary proceedings (e.g., a plea in abatement or motion to stay fixther proceedings), bring an action in court to compel arbitration of any Disputes not referred to arbitration as required by this Contract. All Disputes between the parties shall be resolved by binding arbitration in accordance with the term of this Contract, the Commercial Arbitration Rules of the American Arbitration Association, and, to the maximum extent applicable, the Federal Arbitration Act (Title 9 of the United States Code). In the event of any inconsistency between this Contract and such statute and rules, this Contract shall control. Judgment upon the award rendered by the arbitrators shall be binding and not subject to appeal, but may be reduced to judgment in any court having jurisdiction. No provision of, nor the exercise of any arbitration rights hereunder, shall limit the right of any party, and the parties shall have the right during any dispute to seek, use and employ ancillary or preliminary remedies, judicial or otherwise, including, without limitation, rights and remedies relating to (1) exercising self-help remedies (including set-off rights) or (2) obtaining provisions or ancillary remedies such as injunctive relief, sequestration, attachment, garnishment, or the appointment of a receiver from a court having jurisdiction before, during or after the pendency of any arbitration. However, the institution and maintenance of an action for judicial relief or pursuit of provisional or ancillary remedies or exercise of self-help remedies shall not constitute a waiver of the right of any party, including the plaintiff, to submit the Dispute to arbitration nor render inapplicable the compulsory arbitration provisions hereof. All statutes of limitation that would otherwise be applicable shall apply to any arbitration proceeding. The foregoing notwithstanding, the parties hereto will not be obligated to arbitrate any Dispute arising out of a claim or lawsuit brought or initiated by any third party Buyer of any of the Lots from Buyer.

28 Case PGH Doc Filed 05/21/09 Page 21 of Date of Deadlines. In the event that any of the deadlines set forth herein end on a Saturday, Sunday or legal holiday, such deadline shall automatically be extended to the next day which is not a Saturday, Sunday or legal holiday Texas Law to Apply. This Contract shall be construed under and in accordance with the laws of the state of Texas, and all obligations of the parties created by this Contract are performable in Hays County, Texas Parties Bound. Neither party may assign this Contract without the prior written consent of the other, and any such prohibited assignment shall be void. Such consent shall not be unreasonably withheld, delayed or conditioned. Subject to the foregoing, this Contract shall be binding upon and inure to the benefit of the parties of this Contract and their respective heirs, executors, administrators, legal representatives, successors and assigns (only as permitted herein). Any permitted assignment of this Contract shall not relieve the assignor of its obligations under this Contract arising before or after such assignment unless the assignee assumes assignor's obligations under this Contract in writing Paragraph Headings. The paragraph headings or other headings contained in this Contract are for convenience only and shall not enlarge or limit the scope or meaning of the substance of this Contract Time of the Essence. Time is of the essence of this Contract Gender. Words of any gender used in this Contract shall be held and construed to include any other gender, and words in the singular shall be held to include the plural and vice versa unless the context requires otherwise Legal Construction. In the event any one or more of the provisions contained in this Contract shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Contract, and this Contract shall be construed as if such invalid, illegal or unenforceable provision had never been contained in this Contract Recordation. Neither this Contract nor any memorandum of this Contract shall be recorded No Waiver. No failure of a party to insist, or any election by a party not to insist, upon strict performance or enforcement of any of the terms, provisions, or conditions of this Contract shall not be deemed to be a waiver of the same or of performance of the other party of any or all of such terms, provisions and conditions Exhibits and Other Provisions. The following exhibits and/or other provisions of this Contract are attached hereto and incorporated herein by reference for all intents and purposes: Exhibit "A" -- Metes and Bounds Legal Description of the Lots

29 Case PGH Doc Filed 05/21/09 Page 22 of 39 Exhibit "A-1'' -- Lot and Block Legal Description of the Lots in the first Section of the Subdivision Exhibit "A-2" -- Lot and Block Legal Description of the Lots in the second Section of the Subdivision Exhibit "A-3" -- Lot and Block Legal Description of the Lots in the third Section of the Subdivision Exhibit "B" -- Letter of Credit Exhibit "C" -- Assignment of Representations and Warranties Delivery of Contract to Title Company. Within five (5) business days after the Effective Date of this Contract, the parties further agree to deposit with the Title Company a fully executed copy of this Contract with all attachments and exhibits hereto Authority. This Contract may be executed in two or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. Each party represents and warrants to the other party that such party and the individual executing this Contract on such party's behalf have been granted full legal right, power and authority to execute this Contract and all closing documents through all necessary corporate, partnership or other action and that all formal requirements necessary or required by any law, rule or regulation regarding its corporate organization or existence have been fulfilled. Seller and Buyer shall present to each other and the Title Company all reasonable evidence of such authority as may be reasonably requested in connection with this Contract. Each party further represents to the other party that neither the execution or delivery of this Contract nor their performance under this Contract requires the approval or joinder of any third party nor will it result in a violation or breach of any other agreement to which they may be a party Notice Regarding Title and Legal Counsel. As required by the Texas Real Estate License Act, Seller hereby advises Buyer that Buyer should have the abstract covering the property examined by an attorney of Buyer's own selection, or that Buyer should be furnished with or obtain a policy of title insurance. By signing this Contract, Buyer acknowledges receipt of this notice. Buyer and Seller further acknowledge that they have been given the opportunity to and are hereby advised to, consult with an attorney of their choice with regard to this Contract, and the closing documents to be executed in connection herewith and the transaction contemplated by this Contract Confidentiality. Neither party will disclose the terms or provisions of this Contract, or any information disclosed to such party as a result of having entered into this Contract, to any party other than: (i) such party's partners, owners, shareholders, lenders, attorneys, accountants or other advisors; or (ii) as may be required to comply with any reporting requirements, court orders, or other similar requirements imposed on such party Interpretation. All parties have been represented by counsel in the preparation and negotiation of this Contract, and this Contract shall be construed according to the fair meaning of its language. The rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Contract.

30 Case PGH Doc Filed 05/21/09 Page 23 of Purchase of Lots; Condition to Seller's Obligations. Seller's obligations under this Contract are specifically conditioned and contingent on the purchase of the Lots by Seller pursuant to the Underlying Agreement. Seller intends in good faith to fulfill all of its material covenants and obligations under and pursuant to the Underlying Agreement and, except in the event of a default by the applicable Underlying Seller, Seller shall use commercially reasonable efforts to acquire the Lots in the manner set forth in the Underlying Agreement. In this regard, if Seller breaches its obligations under the Underlying Agreement to acquire the Lots from the Underlying Seller, Seller shall promptly deliver to Buyer written notice of such breach and on or before expiration of the applicable notice and cure period, and at Buyer's request, to use commercially reasonable efforts to assign the Underlying Agreement, to the extent assignable, to Buyer allowing Buyer to acquire the Lots from said Underlying Seller pursuant to the Underlying Agreement without any further obligation or liability to Seller hereunder for such Lots. Seller shall then be released from all obligations pursuant to this Agreement with respect to the Lot(s) then subject to the Underlying Agreement assigned by Seller to Buyer; provided, however, Seller shall not be released from any actual damages incurred by Buyer resulting from Seller's default under this Contract. In this regard, Seller hereby represents warrants and covenants that it will cooperate with Buyer in exercising Buyer's rights hereunder and will permit Buyer to acquire the Lots as set forth above Caveat. DESPITE ANYTHING APPARENTLY TO THE CONTRARY CONTAINED IN THIS CONTRACT, THIS CONTRACT SHALL NOT BE A VALID OR ENFORCEABLE OBLIGATION OF BUYER UNLESS AND UNTIL IT IS EXECUTED BY ANY ONE OF KEITH BUESCHER, SCOTT BUESCHER, JON BUESCHER OR SUSAN GIRARD, IN HIS OR HER CAPACITY AS A MANAGER OF THE GENERAL PARTNER OF BUYER, AND, IN ADDITION, BY BOTH A REGIONAL PRESIDENT AND A DIVISION PRESIDENT. LIKEWISE, NO AMENDMENT TO THIS CONTRACT SHALL BIND BUYER UNLESS AND UNTIL IT HAS BEEN FULLY EXECUTED ON BEHALF OF BUYER IN ACCORDANCE WITH THE FOREGOING REQUIREMENTS Effective Date. The Effective Date of this Contract shall be the latest date of execution by the Seller or Buyer, as indicated on the signature page Two Builder Subdivision. During the pendency of this Contract, so long as Buyer is not in default under this Contract (after the expiration of the applicable notice and cure period), Seller agrees not to sell, convey or otherwise transfer any single-family residential lots in the entire Subdivision to any single-family residential builder other than Buyer and one affiliate or division of Seller (the "Second Builder") without first obtaining Buyer's prior written consent. For the purposes of this Section 15.27, the term "affiliate" means an entity that directly or indirectly controls, is controlled by or is under common control with the Seller, and "control" means the power to direct the management of such entity through voting rights, ownership or contractual obligations. Notwithstanding anything to the contrary, Seller shall not permit or allow the Second Builder to build any home in the Subdivision except homes that have plans, elevations, specifications, appearance and quality comparable to and substantially similar to the Village Builders product currently existing in Hielscher Estates, Section Twelve, and Seller covenants and agrees to include a provision in its Other Builder Agreement with Second Builder prohibiting Second Builder from building any home in the Subdivision except homes that have

31 Case PGH Doc Filed 05/21/09 Page 24 of 39 plans, elevations, specifications, appearance and quality comparable to and substantially similar to the Village Builders product currently existing in Hielscher Estates, Section Twelve. Seller's obligations under this paragraph shall survive for a period of six (6) months after the last Closing Sale of Lots at a Reduced Price. In the event Seller enters into an agreement to sell, convey or otherwise transfer lots in the Subdivision to any other purchaser (the "Other Builder Agreement"), Seller covenants and represents that each of the terms of the Other Builder Agreement will not be more favorable to the other purchaser than the terms contained in this Contract, including, particularly, but without limitation, the terms related to (i) the Purchase Price of the Lots, (ii) Takedown Schedule, and (iii) Earnest Money and Additional Earnest Money. In the event Seller enters into an Other Builder Agreement, or amends such agreement, to provide any terms more advantageous or favorable to such purchaser than the terms contained in this Contract, Seller agrees that it will amend this Contract to incorporate the same more favorable terms Survival. The provisions of this Contract that contemplate performance after each Closing or termination of this Contract, as designated throughout the Contract and the obligations of the parties not fully performed at each Closing shall survive each Closing or termination of this Contract and shall not be deemed to be merged into or waived by the instruments of Closing. [THE REMAINDER OF THE PAGE HAS BEEN LEFT BLANK INTENTIONALLY]

32 Case PGH Doc Filed 05/21/09 Page 25 of 39 IN WITNESS WHEREOF, this Contract has been duly executed on the dates set forth below and will be effective as of the later date. SELLER: LENNAR HOMES OF TEXAS LAND AND CONSTRUCTION, LTD., a Texas limited partnership Date: f+~f/~y By: LENNAR TEXAS HOLDING COMPANY, G.P., a Texas corporation, Its General Partne A By: BUYER: MERCEDES HOMES OF TEXAS, LTD., a Florida limited partnership By: MHI HOLDING COMPANY, LLC, a Florida limited liability company, General Partner Date: 7/~) /0-6 MERCEDES HOMES OF TEXAS, LTD., a Florida limited partnership By: MHI HOLDING COMPANY, LLC, a Florida limited liability company, General Partner // By: c%- r.' Name: -51 >.-Q fi &/Pd K8' Title: Regional President

33 Case PGH Doc Filed 05/21/09 Page 26 of 39 MERCEDES HOMES OF TEXAS, LTD., a Florida limited partnership By: MHI HOLDING COMPANY, LLC, a Florida limited liability company, General Partner Date: I51 ['I+ By: YS. I Name: 5143qYl. &, L /(.A U?' Title: Manager

34 Case PGH Doc Filed 05/21/09 Page 27 of 39 EXHIBIT "A" METES AND BOUNDS LEGAL DESCRIPTION OF THE LOTS

35 Case PGH Doc Filed 05/21/09 Page 28 of 39 EXHIBIT "A-1" LOT AND BLOCK LEGAL DESCRIPTION OF THE LOTS IN THE FIRST SECTION OF THE SUBDIVISION

36 Case PGH Doc Filed 05/21/09 Page 29 of 39 EXHIBIT " A-2 " LOT AND BLOCK LEGAL DESCRIPTION OF THE LOTS IN THE SECOND SECTION OF THE SUBDIVISION

37 Case PGH Doc Filed 05/21/09 Page 30 of 39 EXHIBIT "A-3" LOT AND BLOCK LEGAL DESCRIPTION OF THE LOTS LN THE THIRD SECTION OF THE SUBDIVISION

38 Case PGH Doc Filed 05/21/09 Page 31 of ,955 Acres Rim Rock, Phase Three Page 1 Freelove Woody $urvey No. 23, Abst. No. 20 March 20, STATE OF TEXAS COUNTY OF HAYS FIELDNOTE DESCRIPTION of a acre tract out of the Freelove Woody Survey No. 23, Abstract No. 20, Hays County, Texas, being a portion of that acre tract, described as Exhibit A-2, conveyed to LSM Ranch, Ltd., by deed recorded in Volume 1628, Page 206 of the Deed Records of Hays County, Texas and all of Lot 108, Block 'A', Rim Rock, Phase Three, Section One, a subdivision recorded in Book 12, Pages 7 through 11 of the Plat Records of Hays County, Texas; the said acre tract, being all of proposed Rim Rock, Phase Three, is more particularly described by metes and bounds as follows: BEGINNING at a lood nail found, with plastic cap marked "Capital Surveying Co., Inc.", on the southerly line of the aforesaid acre tract, being the southeast corner of said Rim Rock, Phase Three, Section One, the southest corner of Lot 102, Block 'C', Rim Rock, Phase One, Section Two, a subdivision recorded in Book 1 1, Pages 394 through 398 of the said Plat Records, and a point on the north line of the remainder of that acre tract conveyed to John Richard Rutherford by deed recorded in Volume 1214, Page 548 of the said Deed Records&om which a 92' iron rod, with plastic cap marked "Capital Surveying Co., Inc.", found on the south line of said Lot 102, Block 'C', Rim Rock, Phase One, Section Two, for the northeast corner of that acre tract, described as Exhibit A-1, conveyed to LSM Ranch, Ltd., by deed recorded in Volume 1628, Page 206 of the said Deed Records and a point on the north line of the remainder of the said acre tract, bears N8g002'23"E, feet; THENCE, S89 02'23"W, leaving the west line of said Lot 102, Block 'C', with the common line between the acre tract and the acre tract, at a distance of feet pass a '/z" iron rod found, with plastic cap marked "Capital Surveying Co., Inc,", for the southeast comer of said Lot 108, Block 'A', for a total distance of feet to a!h" iron rod found, with aluminum cap marked "Kent McMillan, Land Surveyor, RPLS 434lW, for a southwest corner of the aforesaid acre tract, being a northwest comer of the said acre tract and a point on the east line of the remainder of that 100 acre tract conveyed to Masa Scott Roberts by deed recorded in Volume 301, Page 865 of the said Deed Records, from which a 60d nail found for the southeast corner of the said 100 acre tract, being an angle point for the acre tract, bears S00 59'15"E, feet; THENCE, leaving the northerly line of said acre tract, with the common line between the said acre tract and the 100 acre tract, for the following two (2) courses: 1) N00 59'15"W, feet to a?4" iron rod found, without cap, for the northeast corner of the aforesaid 100 acre tract;

39 Case PGH Doc Filed 05/21/09 Page 32 of Acres Rim Rock, Phase Three Page 2 Freelove Woody Survey No, 23, Abst. No. 20 March 20, ) S88O3 ly49"w, 1, feet to a W iron rod found, with plastic cap marked "Capital Surveying Co., Inc.", on the southeast right-of-way line of State Highway FM 1826 (80.00' right-of-way), from which a TxDOT concrete highway monument found feet left of State Highway centerline station , bears S25O3 1 '3SWW, feet; THENCE, leaving the north line of the said 100 acre tract, with the common line between the said southeast right-of-way of State Highway FM 1826 and the acre tract, for the following five (5) courses:,"' 1) N25O3 1 '2OWE, feet to a TxDOT concrete highway monument found for the point of curvature of a non-tangent curve to the right, being feet left.of State Highway centerline station ; 2) With the said curve to the right having a cpntral angle of 25"28'58", a radius of 1, feet, a chord distance of feet (chord bears N3g014'54"E), for an arc distance of feet to a TxDOT concrete highway monument found for the point of tangency, being feet left of State Highway centerline station ; 3) N50 59'23"E, 1, feet to the calculated point of curvature of a nontangent curve to the right, being feet left of State Highway centerline station , fi.am which a TxDOT concrete highway monument found bears S75O54'16"W, 0.21 feet; 4) With the said curve to the right having a central angle of 24"00'50", a radius of 1, feet, a chord distance of feet (chord bears N62"59'20'%), for an arc distance of feet to the calculated point of non-tangency, being feet left of State Highway centerline station , from which a TxDOT concrete highway monument found bears N5503Sy06"W, 0.34 feet; 5) N75O0Oy39"E, feet to a cotton gin spindle found, with plastic cap marked "Capital Surveying Co., Inc.", for the northwest corner of that acre tract dedicated for additional right-of-way by plat recorded in Book 12, Pages 7 through 1 1 of the said Plat Records; THENCE, across the said remainder of the acre tract, with the perimeter of the said acre right-of-way dedication, for the following three (3) courses: 1) S32"19'33"E, feet to a %" iron rod set, with plastic cap marked "Capital Surveying Co., Inc.", for a aorthwest comer of aforesaid Lot 108, Block 'A', Rim Rock, Phase Three, Section One;

40 Case PGH Doc Filed 05/21/09 Page 33 of Acres Rim Rock, Phase Three Page 3 Freelove Woody Survey No. 23, Abst. No. 20 March 20, ) N75"00'39"E, with the north line of said Lot 108, Block 'A', for a distance of feet to a!4" iron rod set, with plastic cap marked "Capital Surveying Co., Inc.", for a northeast corner of aforesaid Lot 108, Block 'A'; 3) N32O19'33"W, leaving said Lot 108, Block 'A', feet to a W iron rod found, with plastic cap marked "Capital Surveying Co., Inc.", for the northeast comer of the aforesaid acre right-of-way dedication; THENCE, leaving the north line of the said acre right-of-way dedication, with the common line between said acre tract and the southerly right-of-way of State Highway FM 1826, for the following three (3) courses: 1) N75 00'39"E, a distance of feet to a TxDOT concrete highway monument found for the point of curvature of a non-tangent curve to the left, being feet left of State Highway centlrline station ; 2) With the said curve to the left having a central angle of 2g043'23", a radius of 1, feet, a chord distance of 1, feet (chord bears N60 09'32"E), for an arc distance of 1, feet to the calculated point of non-tangency, being feet left of State Highway centerline station , from which a TxDOT concrete highway monument found bears S44 42'10"E, 0.46 feet; 3) N45"17'13"E, feet to a W' iron rod found, with plastic cap marked "Capital Surveying Co., Inc.", for the northwest corner of that acre tract dedicated for additional right-of-way by plat recorded in Book 12, Pages 7 through 1 1 of the said Plat Records, from which a TxDOT concrete highway monwent found feet left of State Highway centerline station , bears N45" 17' 13"E, feet; THENCE, across the said remainder of the acre tract, with the perimeter of the said acre right-of-way dedication, for the following two (2) courses: 1) S28"19?35"E, feet to a W iron rod set, with plastic cap marked "Capital Surveying Co., Inc.", for a northwest comer of aforesaid Lot 108, Block 'A', Rim Rock, Phase Three, Section One; 2) N4S017'12"E, with the north line of said Lot 108, Block 'A', for a distance of feet to a W iron rod found, with plastic cap marked "Capital Surveying Co., Inc.", for the northeast corner of aforesaid Lot 108, Block 'A', being the northwest corner of aforesaid Lot 102, Block 'C', Rim Rock, Phase One, Section Two;

41 Case PGH Doc Filed 05/21/09 Page 34 of Acres Rim Rock, Phase Three Page 4 Freelove Woody Survey No. 23, Abst. No. 20 March 20, THENCE, leaving the southerly line of the said acre right-of-way dedication, across the said acre tract, with the common line between said Lot 108, Block 'A' and Lot 102, Block 'C', for the following eight (8) courses: 1) S44"22'31"E, a distance of feet to a cotton gin spindle found, with plastic cap marked "Capital Surveying Co., Im."; 2) S28"55'07"E, a distance of feet to a W' iron rod found, with plastic cap marked "Capital Surveying Co., Inc."; 3) S00 12'40"W, a distance of feet to a %" iron rod found, with plastic cap marked "Capital Surveying Co., Inc."; 4) S09"31'29"W, a distance of feet to a W' iron rqd found, with plastic cap marlqd "capital Surveying Co., Inc."l 5) S16"10'48"W, a distance of 321,72 feet to a %" iron rod found, with plastic cap marked "Capital Surveying Co,, Inc."; 6) S00 20'12"E, a distance of feet to a cotton gin spindle found, with plastic cap marked "Capital Surveying Co., Inc."; 7) S00 32'50"W, a distance of feet to a cotton gin spindle found, with plastic cap marked "Capital Surveying Co., lnc."; 8) S09O54'39"W, a distance of feet to the POINT OF BEGINNING, CONTAINING within these metes and bounds acres of land area. Basis of Bearing is the Texas State Plane Coordinate System, South Central Zone, NAD 83 (Grid). That I, Gregory A. Way, a Registered Professional Land Surveyor, do hereby certify that the above description is true and correct to the best of my knowledge and that the property described herein was determined by a survey made on the ground under my direction and supervision. WITNESS MY HAND AND SEAL day of March, 2006 No State of Texas

42 Case PGH Doc Filed 05/21/09 Page 35 of 39 EXHIBIT "B" LETTER OF CREDIT IRREVOCABLE STANDBY LETTER OF CREDIT ISSUING BANK: APPLICANT: MERCEDES HOMES OF TEXAS, LTD. ISSUE DATE: LETTER OF CREDIT NUMBER: AMOUNT: ($2 BENEFICIARY: North American Title Companv EXPIRATION: WE HEREBY ESTABLISH IN YOUR FAVOR OUR IRREVOCABLE STANDBY LETTER OF CREDIT WHICH IS AVAILABLE WITH BANK OF AMERICA, N.A. BY PAYMENT AGAINST PRESENTATION OF THE ORIGINAL OF THIS LETTER OF CREDIT AND YOUR DRAFTS AT SIGHT DRAWN ON BANK OF AMERICA, N.A. ACCOMPANIED BY THE DOCUMENTS DETAILED BELOW: BEARING THE CLAUSE: "DRAWN UNDER IRREVOCABLE LETTER OF CREDIT NO. " AND ACCOMPANIED BY THE DOCUMENTS DETAILED BELOW: 1. A STATEMENT OF AN AUTHORIZED OFFICIAL OF BENEFICIARY STATING: "I HEREBY CERTIFY THAT I AM AN AUTHORIZED OFFICIAL OF THE BENEFICIARY FOR THE PURPOSES OF DRAWING UNDER THIS LETTER OF CREDIT. I FURTHER CERTIFY THAT MERCEDES HOMES OF TEXAS, LTD. HAS DEFAULTED UNDER THE TERMS OF THE RIM ROCK - SECTION 3 LOT SALE AND PURCHASE CONTRACT ("CONTRACT") BETWEEN MERCEDES HOMES OF TEXAS, LTD. AND LENNAR HOMES OF TEXAS LAND AND CONSTRUCTION, LTD. ("SELLER) DATED, 2006, RELATIVE TO SINGLE-FAMILY LOTS LOCATED IN THE RIM ROCK SECTION THREE SUBDIVISION, HAYS COUNTY, TEXAS, AND THAT SUCH DEFAULT WAS NOT CURED WITHIN FIFTEEN (15) DAYS AFTER SELLER SENT WRITTEN NOTICE OF SUCH DEFAULT TO APPLICANT IN ACCORDANCE WITH THE CONTRACT AND BENEFICIARY HAS NOTIFIED EACH OF THE FOLLOWING BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED AT LEAST TEN (10) BUSINESS DAYS PRIOR TO THE DATE OF THIS DRAWING OF THEIR INTENT TO DRAW UNDER THE LETTER OF CREDIT: MR. RANDY MCGILLEM AT MERCEDES HOMES OF TEXAS, LTD., 1 CHISHOLM TRAIL, SUITE 110, ROUND ROCK, TEXAS 78681, MR. KEITH BUESHCER AT 6767 N. WICKHAM ROAD, SUITE 500, MELBOURNE, FL 32940, AND KAREN HARKNESS, ESQ. AT 6767 N. WICKHAM ROAD, SUITE 500, MELBOURNE, FL " 2. A COPY OF THE CERTIFIED MAIL RECEIPTS DATED AT LEAST 10 BUSINESS DAYS PRIOR TO DOCUMENT NO. 1 ABOVE, ADDRESSED TO EACH OF THE FOLLOWING: MR. RANDY MCGILLEM AT MERCEDES HOMES OF TEXAS, LTD., 1 CHISHOLM TRAIL, SUITE 110, ROUND ROCK, TEXAS 78681, MR. KEITH BUESHCER AT 6767 N. WICICHAM ROAD, SUITE 500, MELBOURNE, FL 32940, AND KAREN HARKNESS, ESQ. AT 6767 N. WICKHAM ROAD, SUITE 500, MELBOURNE, FL WE HEREBY AGREE WITH YOU THAT ANY DRAWING UNDER AND IN COMPLIANCE WITH THE TERMS AND CONDITIONS OF THIS LETTER OF CREDIT SHALL BE DULY HONORED BY US UPON RECEIPT OF YOUR DRAFT AND SIGNED STATEMENT ON OR BEFORE AT BANK OF AMERICA, N.A., 1000 WEST TEMPLE STREET, 7TH FLOOR, LOS ANGELES, CA UNLESS OTHERWISE EXPRESSLY STATED HEREIN THIS LETTER OF CREDIT IS SUBJECT TO THE "UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS (1993 REVISION), INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NO. 500." AUTHORIZED SIGNATURE

43 Case PGH Doc Filed 05/21/09 Page 36 of 39 RIM ROCK - SECTION 3 LOT SALE AND PURCHASE CONTRACT by and between LENNAR HOMES OF TEXAS LAND AND CONSTRUCTION, LTD., as Seller and MERCEDES HOMES OF TEXAS, LTD., as Buyer EXHIBIT "C" ASSIGNMENT OF REPRESENTATIONS AND WARRANTIES THIS ASSIGNMENT OF REPRESENTATIONS AND WARRANTIES (this "Assignment"), is made and entered into by and between LENNAR HOMES OF TEXAS LAND AND CONSTRUCTION, LTD., a Texas limited partnership ("Assignor"), and MERCEDES HOMES OF TEXAS, LTD., a Florida limited partnership ("Assignee"). WITNESSETH: WHEREAS, Assignor is the owner of certain lots located in RIM ROCK SECTION THREE SUBDIVISION, Hays County, Texas, which real property is described on Exhibit A attached hereto and incorporated herein by reference (the "m'); WHEREAS, Assignor acquired the Lots by purchase from the prior title holder to the Lots by closing under that certain Lot Sale and Purchase Contract dated,200-, as amended, by and between, as seller (the "Underlying Seller"), and Assignor, as purchaser (the "Underlying Contract"); and WHEREAS, a copy of the Underlying Contract is attached hereto as Exhibit B and incorporated herein by reference; WHEREAS, Assignee, as "Purchaser", and Assignor, as "Seller", entered into that certain Rim Rock - Section 3 Lot Purchase and Sale Contract dated effective,2006, as amended (the "Agreement"), whereby Assignor agreed to sell, and Assignee agreed to purchase, the Lots; WHEREAS, pursuant to the Agreement, Assignor agreed to assign to Assignee, Assignor's rights, if any, to the extent such rights are assignable by Assignor, in and to the representations, warranties and covenants made to Assignor in the Underlying Contract pertaining solely to the Lots, with Assignor retaining Assignor's rights to enforce the Underlying Contract with respect to the applicable Underlying Seller's covenants representations, and warranties pertaining to such Lots, but specifically excluding from the interests to be conveyed to Assignee pursuant to the terms hereof, Assignor's rights to the extent they relate solely to other lots or properties adjacent to, contiguous with or in close proximity to the Lots (collectively, the "Underlying Contract Warranties"); and

44 Case PGH Doc Filed 05/21/09 Page 37 of 39 WHEREAS, Assignor now desires to assign to Assignee, and Assignee desires to obtain from Assignor, Assignor's rights, if any, to the extent such rights are assignable by Assignor, in and to the Underlying Contract Warranties. NOW, THEREFORE, for and in consideration of the premises and the sum of TEN AND NO1100 DOLLARS ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Effective as of the date of Assignee's purchase of a Lot, Assignor hereby assigns to Assignee, Assignor's rights, if any, to the extent such rights are assignable by Assignor, in and to the Underlying Contract Warranties pertaining to such Lot, provided that Assignor retains Assignor's rights to enforce the Underlying Contract Warranties. 2. This Assignment shall be binding upon, and shall inure to the benefit of, the parties hereto and their respective successors and assigns.

45 Case PGH Doc Filed 05/21/09 Page 38 of 39 IN WITNESS WHEREOF, the parties hereto have executed this Assignment and made it effective as of the day of,200-. ASSIGNOR: LENNAR HOMES OF TEXAS LAND AND CONSTRUCTION, LTD., a Texas limited partnership By: LENNAR TEXAS HOLDING COMPANY, G.P., a Texas corporation, Its General Partner By: James Giddens, Vice President ASSIGNEE: MERCEDES HOMES OF TEXAS, LTD., a Florida limited partnership By: MHI HOLDING COMPANY, LLC, a Florida limited liability company, General Partner By: Name: Title:

46 Case PGH Doc Filed 05/21/09 Page 39 of 39 ~scrow By: / Address is acknowledged. RECEIPT. Eal-nest Money in the form of Agent: Ah*& & rn c. Date: B+~+L tid-7- City State Zip Facsimile: 572-2*-6 yo7

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