Patterson PK Land Partnership, Ltd

Patterson PK Land Partnership, Ltd. Website

To Do:

-meet with IT and Jarod

-add multiple email addresses

-add column re “Timely April 2009 Survey Response”

-Notification re website changes

-email FAQs, 3 leases in pdf, most current resale contract in Word, 3 pdf doc packages, Unsung Heroes

PK BRA-FAQs

1)If our 2009 tax assessed land value goes up will that effect the sales price we pay to purchase our lot?

The options for lessees to purchase from Patterson PK Land Partnership, Ltd. during the first year that Patterson PK Land Partnership, Ltd. owns the properties are all based upon 2008 certified land values. Lessee purchase options after the one year period are all based upon the then current tax assessed land values.

2)When can we buy our property? What is the timeline for the different options?

a. BRA-Patterson Sales Contract Patterson PK Land Partnership, Ltd. has until about July 27, 2009 (90 days after BRA Board accepted Patterson bid) to contract with the BRA for the purchase.

b.BRA Board ApprovalThe BRA Board must approve and ratify the sales contract.

c.Preferred LendersIn the next couple of months Patterson PK Land Partnership, Ltd. will host a meeting here in Arlingtonto get a "Preferred Lender" group going. If you have a favorite lender let me know and I will send them an invitation. I am not trying to exclude any lender that wants to help with the acquisition loan.

d.Equity ProspectusAfter the debt piece is established, a prospectus will be sent out which will include other 3rd parties and those lessees that indicated in their response to me in my June 14 and 16, 2008 surveys that they had an interest in being involved in the equity for the partnership.That group is closed.

e.BRA-Patterson Closing Per RFB 09-04-391, after contract, I will have one year from BRA Board acceptance to close. HB3031 requires my closing to be on or before 1-1-2011, but not earlier than 6 months from BRA contract. HB3031:

(b) Sale to Purchaser. Prior to January 1, 2011, the Authority may sell the Leased Tract in whole or in part, to a Purchaser in accordance with applicable law, this subsection, and Subsections (d), (e), (f), (g), (h), and (i).

(3) Closing shall occur no later than December 31, 2010. The Authority shall post on its website no later than thirty days after entering into a Contract for sale with Purchaser the effective date of such Contract and the anticipated date of Closing, which date shall be at least six (6) months from the effective date of the Contract. Any changes to the anticipated date of Closing shall also be posted on the Authority's website. These dates shall be used to establish the time periods provided in Subdivision (2).

f.Contemporaneous ClosingsPer HB3031 those lessees that want to close "contemporaneously" with thePatterson PK Land Partnership, Ltd. purchase with the BRA must notify me and the BRA within 90 days after my contact with the BRA. HB3031:

(2) A Leaseholder who desires to buy such Leaseholder's individual Leased Tract from the Purchaser pursuant to the option set forth in either Subdivision (1)(A) or (B) concurrently with the Purchaser's Closing must exercise the desired option as follows:

(A) notify the Authority and Purchaser in writing within 90 days after the effective date of the Contract between the Authority and Purchaser of Leaseholder's intent to purchase the applicable Leased Tract;

(B) Leaseholder and Purchaser will enter into a purchase and sale agreement in substantially the form as agreed to between the Authority and Purchaser, which form will be attached to the Contract, and which individual purchase and sale agreements will be ratified by Purchaser at the Closing; the purchase and sale agreement shall contain, at a minimum, the following terms and conditions:

(i) the purchase price for the individual Leased Tract in accordance with the applicable purchase option;

(ii) earnest money in the amount of $1,000 to be delivered to the title company agreed to by Leaseholder and Purchaser and approved by the Authority along with the executed purchase and sale agreement;

(iii) the Leaseholder's obligation to provide a survey as set forth in this subsection and a title commitment from the agreed upon title company;

(iv) a 60-day period commencing on the date of the purchase and sale agreement for the Leaseholder to obtain financing (if exercising its option pursuant to Subdivision (1)(A) above);

(v) the Leaseholder must notify Purchaser of any objections to any items on the title commitment and/or survey within fifteen (15) days after receipt of same, but in no event less than 45 days prior to the anticipated date of Closing, provided however that neither the Purchaser nor the Authority shall have any obligation to cure any such items or to incur any expenses in curing any items, except that Purchaser and/or the Authority, as applicable, shall use good faith efforts to address and/or remove those requirements or exceptions shown on Schedule C of the title commitment that are applicable to or created by the Purchaser and/or Authority, as applicable, and, notwithstanding the foregoing, neither the Purchaser nor the Authority shall have any obligation to cure any exceptions on the attached Schedule C regarding legal right of access to or from the applicable Leased Tract;

(vi) Leaseholder is purchasing the applicable individual Leased Tract in its "as-is" condition and Purchaser shall have no obligation to make any improvements or modifications thereto, nor will Purchaser make any representations or warranties as to the condition or use of the applicable Leased Tract;

(vii) Purchaser shall not be responsible for any broker fees or commissions due to any broker or agent engaged or claiming to have been engaged by Leaseholder for the purchase and sale of the applicable Leased Tract;

(viii) Purchaser shall be responsible for costs related to the release of any existing liens placed on the applicable portion of the Leased Tract by Purchaser, including prepayment penalties and recording fees, release of Purchaser's loan liability to the extent applicable to the individual Leased Tract, tax statements or certificates, preparation of the deed, and one-half of any escrow fee;

(ix) Leaseholder shall be responsible for any costs associated with a loan or financing for the applicable portion of the Leased Tract, including, without limitation, loan origination, discount, buy-down, and commitment fees, appraisal fees, loan application fees, credit reports, preparation of loan documents, loan-related inspection fees, and interest on the notes from the date of disbursement to date of first monthly payment; the cost of the survey; recording fees; copies of easements and restrictions; mortgagee title policy with endorsements required by lender, if any; one-half of any escrow fee; any prepaid items, including without limitation, insurance premiums and reserves and taxes; underwriting fee; and any title policy (including endorsements) obtained by Leaseholder;

(x) Taxes will be prorated as of the date of Closing; if taxes are not paid as of the date of Closing, then Leaseholder shall be responsible for the payment of taxes; and

(xi) the agreement between Leaseholder and Purchaser shall be contingent on Closing occurring within the timeframes set forth in this subsection.

g. SurveyThe survey work will take 6-12 months.

h.Resale and New Leases OptionsIf the survey work stays on schedule (6 months +/- best case) I hope to close my purchase as early as the 1st quarter of 2010. Resales and new leases to lessees could start as early as then. RFB 09-04-391 and HB3031:

1. “85% Preferred Lender Contemporaneous Close” Per the RFB 09-04-391 Patterson Bid response those lessees that want to close "contemporaneously" (see 90 day notice and contract requirement in #6 above) with the Patterson PK Land Partnership, Ltd. purchase with the BRA may do so at 85% of the 2008 assessed land only value IF PURCHASE FUNDS COME FROM LOAN PROCEEDS FROM A PREFERRED LENDER.

2. “90% Cash or Any Lender Financing” Per HB3031 purchase in cash or through lender financing for 90% of land only assessed value without any exemptions (as determined by the appraisal district) for the year 2008, such option to be available at Closing and for a period of at least one year from Closing.

3. “Seller Finance” Per HB3031purchase for the 90 percent of 2008 assessed land value only via seller financing, with a down payment of ten percent (10%) and an interest rate of six percent (6%), with a 30-year amortization, such option to be available at Closing and for a period of at least one year from Closing. The leaseholder shall not be charged any origination fees or points by purchaser as a part of the closing costs involved in the seller financing option.

4. “99 Year Lease” Per HB3031 execute a new 99-year lease at a rental rate of 6% of the land only assessed value without any exemptions (as determined by the appraisal district) for the year 2008, with annual Consumer Price Index increases or decreases, such option to be available for a period of at least one year from Closing. The 99-year lease will include an option to purchase the applicable Leased Tract at the land only assessed value without any exemptions (as determined by the appraisal district) at the time of purchase (but not less than the 2008 land only assessed value without any exemptions).

5. “Over 65, 20 Year Lease” Per HB3031 execute a new 20-year lease with a rental rate as determined by the current Authority lease rate methodology or other lease rate structure as set forth in the Ground Lease as applicable (and including increases and adjustments to such rates) with annual Consumer Price Index increases or decreases, to Leaseholders who are over the age of 65 and who receive an ad valorem tax exemption under Section 11.13, Tax Code, for a structure on the Leaseholder's individual Leased Tract, such option to be available for a period of at least one year from the date of Closing. The Leaseholder must have received the ad valorem tax exemption for a structure on the Leaseholder's individual Leased Tract by January 1, 2009. The 20-year lease will include an option to purchase the applicable Leased Tract at the land only assessed value without any exemptions (as determined by the appraisal district) at the time of purchase (but not less than the 2008 land only assessed value without any exemptions).

6. “Stay on Existing BRA Lease” Per HB3031 ratify the existing Ground Lease of any Leaseholder who does not timely exercise one of the foregoing options, such ratification to include:

(i) adoption of the current Authority lease rate methodology or other lease rate structure as set forth in the Ground Lease, as applicable (and including increases and adjustments to such rates) for a period of 8 years from Closing;

(ii) an option permitting the Leaseholder to purchase such Leaseholder's individual Leased Tract for the land only assessed value without any exemptions (as determined by the appraisal district) at the time of purchase, or for the year 2008, whichever is greater, for a period of 8 years from Closing; and

(iii) an agreement to extend Ground Leases as necessary to allow for this full 8-year purchase option period.

3) What title companies can we use?

If you choose the “seller finance” option you will be required to close with Attorney George Gault in Mineral Wells and purchase title insurance at your expense through his fee office.

If you are paying cash for your lot you can choose any title company you would like. You must pay for that expense.

If you are financing your purchase, your lender may require a particular title company. Check with your lender for their requirements.

4) What if we want to pay cash for our lot and don’t want to buy a title policy?

HB3031 provides and requires (emphasis):

(B) Leaseholder and Purchaser will enter into a purchase and sale agreement in substantially the form as agreed to between the Authority and Purchaser, which form will be attached to the Contract……; the purchase and sale agreement shall contain, at a minimum, the following terms and conditions:

(iii) the Leaseholder's obligation to provide …….a title commitment from the agreed upon title company;

(ix) Leaseholder shall be responsible for …….any title policy (including endorsements) obtained by Leaseholder;

Summary: You are required to close and purchase an owner’s title policy from a title company.

5) What lenders can we use?

You can use whatever lender you want. The “85% Contemporaneous Close” option is only available if you finance your purchase through a “Preferred Lender”. A “Preferred Lender” is one of the lenders that assists Patterson PK Land Partnership, Ltd.with the acquisition from the BRA or is otherwise designated by Patterson PK Land Partnership, Ltd.

6) Is it too late to be a "Preferred Lander"?

That group has not yet been finally determined. If you have a lender that wants to be included please ask them to contact Patterson PK Land Partnership, Ltd.

7) Who all is in the Patterson PK Partnership, Ltd now?

Only Mike Patterson and his money is at risk right now.

8) Is it too late to be an investor in this deal if I did not respond to earlier Patterson surveys?

Yes it is too late. Those lessees that indicated they had an interest in being a part of the ownership in the Patterson June 14&16, 2008 Survey-Questionnaire, and others will receive a investor prospectus detailing an equity offering they can consider. The offering will be filled based upon criteria, including but not limited to: 1)SEC qualifying investor requirements, 2)”first come-first served” and 3) other suitability standards established by Patterson PK Land Partnership, Ltd.

9) Can we use our existing survey?What surveyors can we use? The final {Phase 3) survey must be prepared by a surveyor that is approved by the BRA and Patterson PK Land Partnership, Ltd. If the surveyor you want to use is not our “Approved Survey List” please ask them to contact us. Here is the tentative timeline and process.

Phase 1-The Initial Master Survey

Per RFB No. 09-04-391:

"The Authority is in the process of obtaining a survey which will include the current 1000’ contour line, the back line and side line of the Leased Tract, and the boundary of the FERC Buffer, if needed ....(the “Initial Survey”). The Initial Survey may also include a portion of the Roads and the Undeveloped Strips."

The BRA has engaged SURVCON surveyors in Houston to prepare the Initial Survey.

Phase 2-The Updated Master Survey

Per RFB No. 09-04-391:

"The Initial Survey will not include the interior leased lot lines and may not encompass all the Roads or the Undeveloped Strips. The Successful Bidder will be responsible for obtaining prior to Closing at its expense, an updated survey to accurately reflect the entire Property being conveyed as well as any improvements located within 75 [25?] feet landward, measured horizontally, from the 1000’ contour line (the “Updated Survey”), which Updated Survey will be subject to the Authority’s review and approval prior to Closing."

Patterson PK Land Partnership, Ltd. will engage SURVCON to enhance the Initial Survey to be compliant with the RFB.

Patterson PK Land Partnership, Ltd. will post on a website the results of the individual SURVCON surveys. The individual survey posting will have 4 pages:

-Page 1: Will have the abbreviated legal description and property address. PDF Format.

-Page 2: Will have the boundary line configuration illustrated. Boundary line encroachments will be illustrated. Other improvements will not be illustrated. PDF format.

-Page 3: Will have the metes and bounds legal description that will be used for and deed conveyance from Patterson PK Land Partnership, Ltd. THIS IS THE LEGAL DESCRIPTION THAT WILL BE USED FOR ALL PATTERSON PK LAND PARTNERSHIP, LTD DEEDS TO LEASEHOLDERS. PDF Format.

-Page 4: Will have the metes and bounds legal description that will be used for and deed conveyance from Patterson PK Land Partnership, Ltd. to leaseholders Word Format.

Phase 3-Individual Surveys Required by Leaseholders

Leaseholders will be required to further enhance the Phase 2 individual property survey before Patterson PK Land Partnership, Ltd. sells the property to the leaseholder. The leaseholder may choose any surveyor is "a licensed state land surveyor or a registered professional land surveyor acceptable to the Authority".

A list of BRA acceptable surveyors will be posted on the web site.

THE SURVEYOR MUST USE THE METES AND BOUNDS DESCRIPTIONS DETERMINED IN PHASE 2 ABOVE UNLESS A BOUNDARY LINE AGREEMENT IS TIMELY ENTERED INTO BY ALL REQUIRED PARTIES AND THE AGREEMENT IS APPROVED BY THE BRA AND PATTERSON PK LAND PARTNERSHIP, LTD.

HB3031 provides:

"(iii) the Leaseholder's obligation to provide a survey as set forth in this subsection and a title commitment from the agreed upon title company;