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HomeMy WebLinkAbout901385Recorded at the request o'f, and after recording return to: Shadow Dancer Estates c/o Steven D. Olmstead 215 South Willow Street P.O. Box 1801 Jackson, Wyoming 83001 RECEIVED LI,,,COLI',J COUNTY CLERK Sale and Development Agreement THIS AGREEMENT (the "Agreement") is entered into the 24 day of //-Z/,4,'2-. 2004 between SPURLOCK PROPERTIES LLC, a Wyoming limited liability company whose address is P.O. Box 3448, Alpine, WYoming 83128 ("Spurlock"), and SI{^DOW DANCER ESTATES, a Wyoming corporation whose address is c/o Steven D. Olmstead, 215 South Willow Street (P.O. Box 1801), Jackson, Wyoming 83001 ("SDE"). Recitals: A. Spurlock Property. In 2003, Spurlock subdivided approximately 198 acres of real property (the "Spurlock Property") that is located in Lincoln County, Wyoming near Alpine into 63 residential building lots (the "Spurlock Residential Lots"), roads, equestrian ways, open spaces and a horse arena, all known as the "Trail Ridge Subdivision" (the "Spurlock &tbdivision"). The Spurlock Property includes approximately ten acres (the "Access Parcel") of real property that SDE's predecessors-in-interest quitclaimed to Spurlock and that is described as follows: South, plus or minus, 353.41' of BLM Lot 4, Section 10, Township 36 North, Range 119 West, 6"' Principal Meridian, Lincoln County, Wyoming. Portions of the Spurlock Property are subject to one or more easements (collectively the "SDE Access Easement") held by SDE for ingress, egress and utility lines. A legal description of the Spurlock Property is set forth in exhibit A that is attached to this Agreement. B. SDE Property. SDE owns approximately 82 acres of real property (the "SDE Property") that is east of and adjacent to the Spurlock Property. SDE intends to subdivide the SDE Property into approximately 30 residential building lots (the "SDE Residential Lots") to be 'known as Shadow Dancer Estates or another name selected by SDE (the "SDE &~bdivision"). A legal descripnon of the SDE Property is set forth in exhibit B that is attached to this Agreement. C. 14later System. In order to develop the Spurlock Subdivision and the SDE Subdivision (collectively the "Subdivisions") fully, the parties desire to develop a culinary water system (the "Water System") that can service the Spurlock Residential Lots and the SDE Residential Lots (collectively the "Residential Lots"). The Wmer System will include a "Water Storage System" (see recital D) and a "}Fater Distribz~tion System" (see recital E). D. Water Storage System. The Water Storage System will include the ~bllowing rights and improvements: D. 1. Water Rights. Water rights (the "}t'?/ter Rights") granted by the State of Wyoming for the beneficial use of water m connection with the Residential Lots. D.2. Water Tank and Tank Parcel. An approximate 200,000 gallon cement water tank (the "Water Tank") on an approximate one acre parcel (the "Tank Parcel") in the northwest corner of the SDE Property adjacent to the Spurlock Subdivision. The Water Tank is located approximately three-fourths underground. SDE intends to establish the Tank Parcel as a separate lot m tine SDE Subdivision. Prior to the date of this Agreement, SDE has given Spurlock pemfission to construct the Water Tank on the Tank Parcel. Locating tile Water Tank on the Tm~k Parcel provides adequate elevation to facilitate gravity flow of water to the Spurlock Subdivision. The Tnnk Parcel is not an SDE Residential Lot. D.3. Wells. Pumps andLines. Two wells located within the Spurlock Subdivision, with water well casings, ptmaps and buildings (the "Pump t~[ouses',) to house the pumps (collectively /he "Well Facilities"); and water lines (the "Feed Lines") fi'om tile Well Facilities to the Water Tank, both within the Spurlock Subdivision and the SDE Subdivision D.4. SDE Use Easement. One or more easements (collectively the "SDE Use Easement") benefiting the SDE Property and burdening: (a) all of Spurlock's interests m Water Storage System facilities located on the Tank Parcel, including the Water Tank, Feed Lines and utility lines servicing those facilities; (b) all of Spurlock's interests in Water Storage System lhcilities located on the Spurlock Property, including the Well Facilities, Feed Lines and utility lines servicing those facilities; and (c) portions of the Spurlock Property on which any Water Storage System facilities are constructed, including land on which Well Facilities are located and all roads, which lands are for the development, construction, use, operation, maintenance and repair of the Well Facilities, the Feed Lines and other Water Storage System facilities, including utilities servicing those facilities. 'D.5. Spurlock Use Easement. One or more easements (collectively the "Spurlock Use Easement") benefiting the Spurlock Property and burdening: (a) the Tank Parcel and any other portions of the SDE Property on which any Water Storage System facilities are constnicted, which lands are for the development, construction, use, operation, maintenance and repair of the Water Tank, the Feed Lines, other Water Storage System facilities and Distribution Lines leading from the Water Tank to the Spurlock Water Distribution System, including utilities servicing those thc;lines; and (b) a road (the "Water Tank ~tccess Road") to be constructed by SDE on the SDE Property that provides access to the Tank Parcel from a nearby Spurlock Subdivision road. E. Water Distribution System Water lines (the "Distribution Lines") will be constructed that lead out of the Water Tank for each of Subdivisions; including fire suppression water lines and culinary water lines (collectively the "Water Distribt/tion ~ ,, ~ystem ). There will be separate Water Distribution. ,, Systems for each Of the Spurlock Subdivision (the "Spurlock ,, Water Distrib~tion System ) and the SDE Subdivision (the SDE Water Distribution System"). 2 F. Intent of Parties. By entering into this Agreement, SDE and Spurlock desire to provide for the development of the Water System, all on the terms and conditions that are set forth in this Agreement. Agreement: Now, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: Article 1 Property Transfers. Section 1.1. Sale of Access Parcel. Prior to the date of this Agreement, SDE's predecessors-indnterest quitclaimed the Access Parcel to Spurlock for inclusion within the Spurlock Subdivision. Spurlock shall pay SDE $100,000.00 (the "Access Parcel Purchase Price") as the purchase price for the Access Parcel as described in section 1.3. Section 1.2. Physical Condition of Parcels. Except for the express obligations of the parries under this Agreement, SDE sells the Access Parcel to Spurlock, SDE grants the Spur'lock Use Easement to Spurlock and Spurlock grants the SDE Use Easement to SDE all "as is, where is," unrepaired, WITHOUT WARRANTY, EXPRESS OR IMPLIED, AS TO any matter, including, but not lhnited to, the following matters related to the sold or burdened real property: physical condition, including the presence or absence of improvements or utility structures; environmental condition, including the existence or absence of hazardous materials, underground storage tanks and materials stored in underground storage tanks; value; exact boundary lines or acreages; overlaps of legal descripnons with adjoining properties; locations of roads, accesses or fences; existence or lack of utilities and utility lines; existence or lack of access to and from public roads and highways; development restrictions; applicability of, and compliance of the sold or burdened real property with, zoning, building, health, subdivision, flood plain and other governmental requirements; or the SUITABILITY, MERCHANTABILITY OR FITNESS OF THE SOLD OR BURDENED REAL PROPERTY FOR A PARTICULAR PURPOSE. Except for the express obligations of the parties under this Agreement, each party has relied solely on its independent investigations in acquiring rights in the sold or burdened property, including physical inspections and inspections of documents, which have been completed prior to the date of this Agreement. Section 1.3. Closing. On 15 May 2004 or another date that is agreed to by the parties in writing (the "Closing Date"), the parties shall take the following actions: 1.3.1. Access Parcel Title Policy. SDE shall provide Spnrlock, at Spurlock's expense, with a standard coverage owner's policy of title insurance that: (a) insures the persons who acquired the Access Parcel from SDE's predecessors-in-interest (or the transferees of such parties) as the owner of the Access Parcel; (b) is in the amount of the Access Parcel Purchase Price; and (c) is subject to a lien for current year's taxes, standard title exceptions m~d matters of record at the time Sale and DeYelol] menl ^greemem 3 SDE-SpuNock of transfer from SDE's predecessors-in-interest, except for any financial encumbrances created by those claiming by, through, or under SDE's immediate preclecessors-in-interest. 1.3.2. Payment of Access Parcel Purchase Price. Spurlock shall pay SDE $50,000.00 of the Access Parcel Purchase Price in collected fi. rods. Spurlock shall pay SDE the remaining balance of the Access Parcel Purchase Price by granting SDE a $50,000.00 credit against SDE's contribution to the "Water Storage System Construction Cost" as described in section 3.3. 1.3.3. Use Easements. SDE shall execute, acknowledge and deliver to Spurlock: (a) a release of the SDE Access Easement; and (b) the Spurlock Use Easement. Spurlock shall execute, acl~owledge and deliver to SDE: (x) the SDE Use Easement; (y) an easement burdening the roadways of the Spurlock Subdivision, benefiting the SDE Property and tbr the purposes of providing ingress, egress and underground utility lines; and (z) an easement burdemng equestrian watkways within the Spurlock Subdivision, benefiting the SDE Property and limited to horseback riding and walking, as described in the Spurlock Subdivision plat. Section 1.4. General Easement Provisions. Each of the easements (the "Easements") described in section 1.3 must be reasonably satisfactory to legal counsel for the grantee receiving the Easement and shall be subject to the following terms and provismns: 1.4 1. Content of Easemems. Each Easement: (a) shall include a release m~d waiver of all of the grantor's rights under Wyoming homestead exemption laws; (b) shall provide that it can be modified only with the consent of those parties who own 60% or more of the burdened property and 60% or more of the benefitted property; (c) shall not include gaps or protective strips between the burdened property and adjoining Subdivision lines; (d) shall include the right of the benefitted property owner to remove snow from and otherwise maintain the burdened property if the owner of the burdened property tails to do so (notwithstanding this, the benefitted property owner shall not be obligated to contribme to the cost Incurred by the burdened property owner for ongoing maintenance, snow removal or common service costs of the burdened property); (e) shall include the right of the benefitted property owner to transfer the control and management of the easement to any homeowners association (the "Association") formed for the Subdivision covering the benefited property (however, any modification of the easement shall still require approval as set forth in section 1.4.1(b), although the Assocmtion may execute the modification instrument on behalf of the consenting owners); and (f) shall include the right of the owner of the benefited property (including an Association) reasonably to control and administer the Water System within that Subdivision, including phYsical connection requirements and shut-offs for failure to pay assessments. 1.4.2. Subordination. If property burdened by an Easement is subject to any encumbrance, then the granting party, at its expense, shall cause the holder of the encumbrance to subordinate its interest in the burdened property to the Easement. 1.4.3. SDEEasements. With Spurlock's written consent, SDE may defer the granting of any one or more of the Easements to be executed by SDE until the recording of the SDE Subdivision plat with the Lincoln County, Wyoming clerk. All Easernents granted by SDE shall be subject to the limitation that at or about the time SDE records the final plat for the SDE Subdivision, SDE may reasonably modify the legal description of the real property burdened by the Easement to match lots, roadways and other features forming part of the SDE Subdivision. 1.4.4. Definitions. The Easements described in section 1.3 that benefit the Spnrlock prOperty shall be referred to herein as the "Spurlock Easements." The Easements described in section 1.3 that benefit the SDE Property shall be referred to herein as the "SDE Easements." Section 1.5 TcmkParcel. In SDE's sole discretion, at troy time after the Closing Date, SDE may quitclaim the Tank Parcel to Spurlock, reserving an easement that burdens the Tank Parcel, that benefits the other SDE Property and that is for purposes similar to the Spurlock Use Easement but in favor of SDE rather than Spurlock Article 2. Subdivision Development. Section 2.1. Spurlock Subdivision. Within one year after the date of this Agreement, Spurlock, at Spurlock's expense shall develop the Spurlock Subdivision on the Spurlock Property in accordance with the requirements of Lincoln County, Wyoming, including the installation of all roads and equestrian walkways shown on the Spurlock Subdivision plat map. The parties acknowledge that restrictive covenants burdening the Spurlock Subdivision contemplate the formation of a homeowners Association (the "Spurlock Association") to be formed for the benetit of property owners within the Spurlock Subdivision. If the Spurlock Association is formed, then Spurlock shall assign and convey the following to the Spurlock Association, free and clear of security interests, liens and encumbrances and for the benefit of the Spurlock Property: (a) the Water Storage System, including, but not limited to, the Water Rights, the Water Tank, the Pump Houses, other Well Facilities and the Feed Lines; (b) the Spurlock Water Distribution System, including any Distribution Lines; and (c) the Spurlock Easements. Until the Spurlock Association is formed or if the Spurlock Association is never formed, Spurlock shall continue to hold the Water Storage System, the Spurlock Water Distribution System and the Spurlock Easements subject to the provisions of this Agreement. Section 2.2. SDE &tbdivision. Within 18 months after the date of this Agreement, SDE, at SDE's expense: (a) shall include the Tank Parcel as a separate lot within the SDE Subdivision, subject to the Spurlock Use Easement; and (b) shall develop the SDE Subdivision on the SDE Property in accordance with the requirements of Lincoln County, Wyoming, including the installation of the Water Tank Access Road. The parties ac ~knowledge that SDE intends to burden the SDE Subdivision with restrictive covenants that contemplate the formation of a homeowners Association (the "SDE Association") to be formed for the benefit of property owners within the SDE Subdivision. If the SDE Association is formed, then SDE shall assign and convey to the SDE Association, fi'ee and clear of security interests, liens and encumbrances and for the benefit of the SDE Property: (i) the SDE Water Distribution System, including any Distribution Lines and (ii) the SDE Easements. Until the SDE Association is formed or if the SDE Association is never formed, SDE shall continue to hold the SDE Water Distribution System and the SDE Easements subject to Sale and Development Agreemem 5 SDE-Spurlock the provisions of this Agreement. Notwithstanding the foregoing promsions and the provisions of secuon 3.2 to the contrary, from time to time SDE may elect to dela. y or disconnnue all or part of the development of the SDE Subdivision and the SDE Water Distribution System, but in that event SDE shall remain obligated to reimburse Spurlock' for SDE's share of the Water Storage System Construction Cost as described in section 3.3 and tbr SDE's share of the'"Water Storage System Operating Expenses" as described in section 4.3. Section 2.3. Highway Off Ramp. The parties acknowledge that the stats of Wyoming and/or Lincoln County, Wyoming will likely require the construction of a highway oft' ramp or acceleration / deceleration / turn lanes (collectively the "Off Ramp") on the east side of U.S. Highway 89 to provide access to the Subdivisions, at the expense of the developers of the Subdivisions. When the Off Ramp is required, Spurlock shall construct the Off Ramp at Spurlock's cost, and as SDE's total contribution to that cost, SDE shall reimburse Spurlock the lesser of $19,000.00 or one-third of the cost of the Off Ramp, upon receiving from Spurlock in writing a request for payment and reasonable supporting evidence of the cost. The parties acknowledge that Robert R. Meikle, his affiliates or other parties will be responsible for providing similar access on the west side of U.S. Highway 89. Article. 3. Water System Development. Section 3.1. Stcmts of Water Rights. Spurlock represents and warrants to SDE that as of the date of this Agreement: (a) Spurlock has filed an application with the state of Wyoming to obtain Water Rights for the Spurlock Property; (b) to Spurlock's knowledge, the Water Storage System has been designed with sufficient capacity to service all of the Residential Lots within the Subdivisions; (c) the Water Storage System is free and clear of security interests, liens and encumbrances, except that under a mortgage encumbering all or part of the Spurlock Property, part of the Water Storage System might be encumbered to secure repayment of a development loan for the Spurlock Subdivision (as to that mortgage loan, Spurlock shall make a commercially reasonable effort to cause the holder of the loan to acknowledge, and not to interfere with, SDE's rights under this Agreement); (d) Spurlock has constructed the Water Storage System in compliance with state and local governmental requirements and sound engineering practices, which warranty shall survive one ye~ after the completion date of the Water Storage System; and (e) ihe Water Tank, the Feed Lines, the Well Facilities and all other Water Storage System facilities have been constructed within areas of the SDE Use Easement or the Spurlock Use Easement Spurlock: (i) shall continue to pursue the Water Rights application with the state of Wyoming; and (ii) shall cause the Water Rights application to be expanded to include the SDE Property as benefitted property. Each party: (A) shall cooperate with the other in order to entitle owners of Residential Lots, either directly or indirectly, to have enforceable Water Rights under any approved application, permit or certificated water right issued by the state of Wyoming; and (B) shall hold any Water Rights approved in that party's name for the benefit of the Spurlock Property and the SDE Property; provided, however, that the foregoing shall not require Spurlock to make any assignment of Water Rights contrary to the requirements of Wyoming law. Sale and Developmcm Agreement 6 Section 3.2. Construction of Water System. At Spurlock's expense, Spurlock has constructed (or within seven months after the date of this Agreement, Sptlrlock ~vill complete the construction of) the Water Storage System. At Spurlock's expense, Spurlock may construct the Spurlock Water Distribution System within the Spurlock Subdivision, including all necessary Distribution Lines. At SDE's expense and subject to the limitations of section 2.2, SDE may construct the SDE Wafer Distribution System within the SDE Subdivision, including: (a) all necessary Distribution Lines, (b) any pressurization equipment and facilities and (c) processing any expansion applications with governmental entities in order to include the SDE Subdivision within the existing Water System. Whenever a party installs a Water Distribution System in its Subdivision, then the party shall complete all construction in accordance with approved engineering specifications, including those relating to line diameters and depth, so as to minimize the risk of future leaks and damage to the Water System. Section 3.3. fVater Storage System Constrztction Cost. SDE's total contribution to Spurlock's costs (the "}gater Storage System Constntction Cost") for constructing the Water Storage System shall be: (a) to give.Spurlock a $50,000.00 credit against the Access Parcel Purchase Price (see section 1.3.2), which shall pay the Access Parcel Purchase Price in full; and (b) not to charge Spurlock any separate amount for the original grant of the Spurlock Use Easement on the Tank Parcel. After Spurlock completes construction of the Water Storage System so that it is fi~nctioning and acceptgd by any necessary governmental entities: (i) Spurlock will provide SDE with written notice confirming the completion; and (b) SDE shall automatically give Spurlock the consideration that is described in this section. Article 4. Water System Managemem. Section 4.1. Use Rights. Subject to the terms and conditions of this Agreement, owners of all or pans of the Spurlock Property and owners of all or parts of the SDE Property shall have the exclusive right to use water from the Water Storage System. No owner of a Residential Lot in one Subdivision shall be required to pay any connection tees to the Residential Lot owners or Association of the other Subdivision in order to obtain such use, but the foregoing shall not limit the right of a Subdivision owner or an Association to charge purchasers of Residential Lots in that same Subdivision such a connection fee The types of uses of water t~rom the Water Storage System will be restricted by: (a) the terms of the Water Rights permit issued by the state of Wyoming; and (b) terms and conditions set forth by each party within one or more governing documents for a pm-ty's Subdivision, including restrictive covenants, deed restrictions, Association bylaws, rules or regulations, water use agreements or other documents. However, unless consent is obtained t¥om at least 60% of the owners of the Spurlock Residential Lots and at least 60% of the owners of the SDE Residential Lots (through votes at meetings of the owners, followed by a wriuen instrument signed by the Association or another designated person on behalf of the owners, or through a unanimous written consent signed by all of Residential Lot owners in a Subdivision): (i) the primary use of water from the Water Storage System shall be for culinary and fire suppression purposes on the Residential Lots; and (ii) no water 'from the Water System may be used to benefit property located outside of the Subdivisions. The parties acknowledge that the capacities of the Well Facilities and the Water Tank and the allocation of the Water Storage System Operating Expenses between the Sale and Development Agreemem 7 SDE Spurlocl~ Spurlock Subdivision and the SDE Subdivision have been based on the assumption that water will be used only for culinary and fire suppression purposes on the Residential Lots. If there is ever a shortage in water capacity of the Water Storage System, then: (A) all uses of water other than culinary and fire suppression shall be subordinate to culinary and fire suppression water uses on the Residential Lots; and (B) the available water shall be allocated pro-rata among the Residential Lots in both Subdivisions for culinary and fire suppression uses. Initially, the parties do not intend to meter actual water usage by Residential Lots and charge lbr water based upon tha! usage, instead, the parties intend to charge for water usage based upon the number of Residential Lots. However, the parties shall modify the basis of allocating water' charges if the assumptions described above are no longer accurate to the end that charges are based roughly on water consumption. A modification may include installing meters on Distribution Lines leading to each Subdivision in order to measure the usage of water by that Subdivision. Section 4.2. Maintenance. Subject to the expense sharing provisions of section 4.3, Spurlock shall be responsible to maintain, operate, use and replace the Water Storage System after its original construction (the "FI/ater Storage System lVlain~eno,'~ce':), including, without limitation, the following: (a) testing water quality periodically (as required by governmental authorilies having oversight of the water system and otherwise); (b) replacing and upgrading Water Storage System improvements periodically in order to keep the Water Storage System in sound operating condition; (c) maintaining Water Storage System improvements, including the Well Facilities, the Pump Houses, the Feed Lines and the Water Tank, and utilities servicing those improvements; and (d) maintaining the Water Rights in full force and effect. Spurlock, at Spurlock's expense, shall be responsible for the maintenance and periodic replacement and upgrading of the Spurlock Water Distribution System in Order to keep the system in sound operating condition. SDE, at SDE's expense, shall be responsible for the maintenance and periodic replacement and upgrading of the SDE Water Distribution System in order to keep the system in sound operating condition. Each prow shall perform its obligations tinder this section in accordance with sotmd engineering practices and applicable governmental requirements. Section 4.3. Expenses of Operating 14/ater Storctge System. The parties shall pay for the expenses of the Water Storage System Maintenance in accordance with the following terms and provisions: 4.3.1. ~Fater Storage System Operating Expenses. In this Agreement, the term "IW'ater Storage System Operating Expenses" shall mean all commercially reasonable expenses incurred in connection with the Water Storage System Maintenance, including, without limitation, the expenses - (a) to draw water from the Well Facilities under authority of the Water Rights, including electricity to run Well Facilities; (b) to transport water to the Water Tank using Feed Lines, including repairs to the Feed Lines; (c) to maintain the Water Tank; (d) to keep the Water Rights in full force and effect; (e) to replace periodically the original Water Storage System improvements; (f) to test the quality and flow of water from the Well Facilities and from the Water Tank in accordance with sound engineering and govermnental requirements; and (g) to pay property taxes on any portion of the Water Storage System facilities and the real property on which the facilities are located, including the Tank Parcel and the Pump Houses, but not on roadways containing Feed Lines. · - 4.3.2. Expense Sharing Spurlock shall advance mad pay the Water Storage System Operating Expenses initially. Subject to section 4.1, each party shall be obligated to bear a portion of the Water Storage System Operating Expenses based on the ratio that the number of Residential Lots in the party's Subdivision bears to the total Residential Lots in both Subdivisions. Within a reasonable period after the end of each calendar quarter, Spurlock shall send SDE an invoice for SDE's share of the Water Storage System Operating Expenses for the prior quarter, and SDE shall pay the invoice within 20 days thereafter. Spurlock shall bear its share of the Water Storage System Operating Expenses without reimbursement. From time to time at SDE's request, Spurlock shall supply SDE with a detailed summary and supporting detail tbr the Water Storage System Operating Expenses, which shall be subject to the review and reasonable approval of SDE. Each party shall be responsible for collecting assessments from owners of Residential Lots within that party's own Subdivision in order to cover the Water Storage System Operating Expenses allocated to that Subdivision. 4.3.3. Start-up. Notwithstanding the foregoing provisions of this section to the contrary, SDE's obligation to commence making contributions to the Water Storage System Operating Expenses shall not commence until the recording of the SDE Subdivision plat; provided, however, that: (a) if the SDE Subdivision plat has not been recorded by 01 July 2004, then for the purposes of this section, it shall be deemed that the plat was recorded on 01 July 2004 with 23 SDE Residential Lots; (b) if the SDE Subdivision plat is recorded later, then the parties shall adjust tim allocation and make necessary adjusting payments in order to reflect the actual number of SDE Residential Lots; and (c) notwithstanding the foregoing, if there are fewer than 23 SDE Residential Lots shown on the final SDE Subdivision plat, then it shall be deemed that there are 23 SDE Residential Lots for purposes of this section. 4.3.4. Defimlt. If SDE fails to make payments of Water Storage System Operating Expenses as required by this section 4.3, then Spurlock shall give SDE written notice of the default, indicating that failure to cure the default might result in the disconnection of the SDE Subdivision from the Water System until the default is cured. IfSDE l~ails to cure the default within 30 days after the date of the notice, then Spurlock may disconnect the culinary and fire suppression water supply flowing from the Water Storage System to the SDE Subdivision until the default is cured, at which time the connection shall be re-established. Section 4.4. Obligations Binding on Successors. The parties contemplate that after Spurlock assigns rights to the Spurlock Association under section 2.1, the Spurlock Association will assume Spurlock's obligations under this article 4; from and after the time of such assumption, Spurlock shali be relieved of any further personal obligations under this article 4. The parties contemplate that after SDE assigns rights to the SDE Associanon under section 2.2, the SDE Association will assume SDE's obligations under this article 4; from and after the time of such assumption, SDE shall be relieved of any further personal obligations under this article 4. The parties shall impose the obligations and restrictions that are described in this article 4 (specifically including the prfvisions of section 4.1) on each purchaser of a Residential Lot within the Subdivision by appropriate restrictive covenants, deed restrictions or ongoing contractual requirements, including, without limitation, the recording of this Agreement against both Subdivisions. Sale and Development Agreement 9 SDE-Spurlock Article 5. General. Section 5.1. Payments of Costs and Expenses If there is a dispute concerning this Agreement or if a party seeks to enforce its rights under this Agreement, then the non-prevailing party shall pay all costs and expenses, including reasonable attorneys' fees, that the prevailing party incurs in connection with the dispute or enforcement or in pursuing any remedy provided hereunder or by relevant statutes or other laws, whether such costs and expenses are incun-ed with or without suit; before or after judgment; in any appeal; in any proceedings under any present or fim~re federal bankruptcy act or state receivership act; or in connection with any mediation, arbitration or other alternative dispute resolution proceeding initiated by the parties. Section 5.2. Additional Documems. The parties hereto shall cio such further acts and things and shall execute and deliver such additional documents and instruments that might be reasonably necessary in order to cra'fy out the intent of this Agreement or as the other party, or its counsel, may reasonably require in order to consummate, evidence or confirm the provisions that are contained herein. Section 5.3. /nterpretation. The captions that precede the sections of this Agreement are for convenience of reference only; if there is a conflict between the caption and the section tbllowing the caption, then the provisions of the section itself shall control. \Vhenever the context so requires, the singular shall include the plural, the plural shall include the singular, the whole shall include any pm't thereof and any gender shall in elude the other genders. Unless otherwise provided, references m this Agreement to particular exhibits, articles, sections and subsections are to those respective divisions in this Agreement (including all subparts of such divisions). Meanings of defined terms are equally applicable to the singular and plural forms of the terms. Section 5.4. Notices, All notices, writings, information, documents or other communications that are required or permitted to be given hereunder: (a) shall be in writing; (b) shall be deemed to be given and received either (i) on the date of delivery, if personally delivered; (ii) on the third business day following mailing, if delivered by certified mail, return receipt requested; (iii) on the next business day, if marked for next business day delivery and delivered by guaranteed overnight express courier or delivery service, such as Federal Express, which provides for evidence of receipt at the office of the intended addressee; (iv) when the ender s S ' facsimile system generates a message confirming successful transmission of the total number of pages of the notice or communication, if sent by facsimile transmission (unless within eight business hours after the transmission, the recipient notifies the sender that it has not received the entire transmission) or (v) in the case of refusal to accept delivery or inability to deliver the notice or other document, the earlier of the date of the attempted delivery or refusal to accept delivery, the date of the postmark on the return receipt~ or the date of receipt of notice of refusal or notice of nondelivery by the sending person; and (c) shall be addressed to the applicable party at the address that is indicated for such party in the Fa:st paragraph of this Agreement or as to each party at such other address that may be designated by 'such party in a written notice to the other party. Sale and Development Agreement 10 Section 5.5. Survival. Any agreements, representations, covenants and warranties on the pant of either party hereto that are contained in this Agreement and any amendment or supplement hereto shall survtve the closing described in section 1..3 and deliveries of docmnents and instruments hereunder and shall not be merged into such documents and instruments. Section 5.6. Modification; ~'aiver. No supplement, modification or amendment of this Agreement shall be binding upon the parties hereto unless executed in writing by an authorized representative of each party, but no such supplement, modification or amendment needs consideration to be binding. No waiver of any breach or default by any party to this Agreement shall be considered to be a waiver of any other breach or default. Section 5.7. Integration. There are no representations, warranties, covenants or agreements between the parties relating to the subject matter of this Agreement except as are specifically set i`orth or referred to in this Agreement. This Agreement contains the entire agreement between the parties hereto pertaining to such matters and supersedes all prior agreements, correspondence, memoranda, representations and understandings of the parties relating thereto. No representations have been made to induce the parties hereto to enter into this Agreement except as are set forth herein. Section 5.8. Severabilily. Whenever possible, each provision of this Agreement and every related document shall be interpreted in such manner as to be valid under applicable law; however, ii' any provision of any of the foregoing is invalid or prolfibited under applicable law, then such pro vision shall be ineffective to the extent of such invalidity or prohibition without invalidating the remainder of such provision or the remaining provisions of this Agreement. The parties acknowledge that they would have entered into this Agreement independently of any provision or provisions of this Agreement that might be held to be unenforceable, void or illegal. Section 5.9. F~cecution of Agreement. For the convenience of the parties, this Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same ~nstnunent. This Agreement shall be effective when one or more of such counterparts has been executed by each party and delivered, if a panty receives a facsimile transmission of this Agreement from another party, which transmission bears the signature of the other party, then it shall be deemed that (a) the Agreement that ~s sent by facsimile transmission conforms to the original, (b) the original Agreement bears a genuine signature of the other party and (c) the Agreement has been delivered by the other party. In such event, the other party shall send an original of the Agreement to the receiving party by regular mail. ,~my signature and acknowledgment page to a counterpart may be detached from that counterpart without impairing the legal effect of the signatures and acknowledgments appearing on the page, and the page may then be attached to and shall form part of another counterpart. Section 5.10. Negation of .Partnership and Third-Party Rights. None of the terms or provisions of this Agreement shall be deemed to create a partnership between S DE and Spurlock in their respective businesses or otherwise, nor cause them to be considered joint venturers or members of any joint enterprise This Agreement is not intended, nor shall it be construed, to create any third party beneficiary rights in any person or entity unless expressly otherwise provided. 1 1 SDF-Spurlock Section 5.11. Approvals. Unless otherwise provided in this Agreement, whenever approval or consent is required by any party hereto, such approval or consent shall .not unreasonably be withheld or delayed. If any party hereto disapproves of some matter hereunder, then the reasons therefor shall be stated. Section 5.12. Force Majeure. Whenever perfonnance is required of any party heretmder, such party shall use all due diligence to perform and take all necessm-y measures in good t:aith to perfbrm; provided, however, that notwithstanding anything contained hereto to the contrary if such performance is delayed at m~y time by reason of any of the following: acts of God; war; civil commotion; riots; terror/sm; strikes; picketing or other labor disputes; the inability, unwillingness or other failure of a governmental agency expeditiously to process plans, permit applications or other requests; the unavailability of labor or materials; damage to work in progress by reason of fire or other casuaJty; or any cause beyond the reasonable control of any party (other than financial inability), then the time tbr Performance required of such party as herein specified shall be extended by the length of delay actually so caused. Section 5.13. Cure Rights. Ifa party (the "Defaulting Party") fails to perform its obligations under this Agreement, then the other party (the "Demandi,~g Party") may demand in writing that the Defaulting Party perform the. obligation. If the Defaulting Part>, fails to cure the default within 30 days after the written demand, then the Demanding Party may, but shall not be required to, perform the obligation in place of the Defaulting Party. The Defanlting Party shall reimburse the Demanding Party for the Demanding Party's cost of performing the obligation within 10 days after receiving an invoice therefor, or the Demanding Party may set offthe cost of performing the obligation against any amounts owed by the Demanding Party to the Defaulting Party. SDE.. RHT~D\6338.008.doc PYG File # 10476-6 SHADOW DANCER ESTATES, a Wyoming corporation NIERRILL t. WEIGH~ President Spurlock.. SPURLocK PROPERTIES LLC, a Wyoming limited liability company Manager Sale and Dcv¢lopmcm Agr¢cmen~ 12 lO0 STATE OF ~ ) --"' '-~ ~' )ss. COUNTY OF (~d//_-d~z.-. ) The.._(oregqing Sale and Development Agreement was acknowledged before ~e this ~ day of (/j~fi4x~J 2004 by David R. Spurlock, as the manager of SpURLOCK PROPERTIES LLC, a Wy6ming limited liability company. WITNESS my hand and official seal.  ELLEN C PUGH ,~i~Notary Pubhc Counh/of /~d~'2~,[~"~ State of II Lincoln ~ Wyorn,no pires October 28, 2006 My Commission Expires: /tg-,~K-D~ No~tary Public STATE OF ~ r,,~/7t ) ) SS. COUNTY OF 5//'1-F /-,,'PA/'~ff-- ) The foregoing Sale and Development Agreement was acknowledged before me this ,:~z:5'7~ day of ~..,ff~//--- 2004 by Merrill L. Weight, as the as the president of SHADOW DANCER ESTATES, a Wyoming corporation. WITNESS my hand and official seal. My Commission Expires: }(©!r-O-~]r_pL/ N~_f~ry ,~-dblic ELIZABETH GRAHAM 586 Fine Drive Sail ~e CiW. Ulah 84115 My Commisai~ ~pires ~lober 24~ 2~4 3 SDE-Spurlc~ck Exhibit A to Sale and Developmen! Agreement Legal Description 'of Spurlock Property. That part of Section 10 and that part of Section 15, T36N R119W, Lincoln County, Wyoming, it being the intent to more correctly describe that tract of record in the Office of the Clerk of Lincoln County in Book 484 of Photostatic Records on page 878 and pm't of that tract of record in said Office in Book 386 of Photostatic Records on page 711, as follows: BEGINNING at the southwest corner of GLO Lot 7 (SW!4SEIA) of said Section 10; thence S00°-12'-05"W 1354.02 feet, to the northwest corner of Broken Wheel Ranch Subdivision of record in said Office as Plat No. 117, thence S89°-48'-50"E, 1304.45 feet, along the north line of said Subdivision, to the northeast corner thereof; thence N00°-36'-01"E, 1358.10 feet, to the southeast corner of said GLO Lot 7, thence N00°-24'-21"W, 2642.93 feet, to a point; thence S89°-38'-31"E, 1285.91 feet, to the southeast corner of GLO Lot 4 (SE IANE~A) of said Section 10; thence N00°-26'-37"W, 353.51 feet, along the east line of said GLO Lot 4, to a Morley pipe; thence S89°-14'-29"W, 944.38 feet, to a Morley pipe; thence S89°-13'-32"W, 71.21 feet, to the southeast Nelson monument of that tract of record in said OffiCe in Book 145 of Photostatic Records on page 318; thence continuing S89°-13'-32"W, 270.00 feet, along the south line of said tract, to the southwest Morley pipe thereof; thence N00°-27'-50"W, 239.96 feet, along the west line of said tract, to the northwest Nelson monument thereof;. thence N00°-29'-45"W, 46.81 feet, to the southeast Nelson monument of that tract of record in said Office in Book 204 of Photostatic Records on page 483; thence S89°-30'-13"W, 300.00 feet, along the south line of said tract, to the southwest Nelson monument thereof; thence N00°-27'-54"W, 299.94 feet, along the west line of said tract, to the northwest Nelson monument thereof, on the south line of that tract of record in said Office in Book 274 of Photostatic Records on page 181; thence S89°-39'-57"W, 1009.90 feet, along the'south line of said tract, 'to a Jorgensen monument; thence N89°-45'-12"W, 707.35 feet, along said south line, to a Jorgensen monument on the easterly right-of-way line of U.S. Highway 89; thence S04°-11'-25"E, 3570.60 feet, along said easterly right-of-way line, to a point on the south line of the SW ¼ of said Section 10; thence N88°-55'-20"E, 468.30 feet, along said south line, to the CORNER OF BEGINNING. encompassing an area of 203.77 acres, more or less; EXCEPTING that tract of record in said Office in Book 460 of Photostatic Records on page 803, encompassing an area of 1.9 acres, more or less; ENCOMPASSING a net area of 201.87 acres, more or less. the BASE BEARING for this survey is the west line of the SW ¼ of Section 10, T36N R119W, being N00 °-04'-42''E. Exhibit B to Sale and Development Agreement Legal Description of SDE Property That part of the SE~A of Section 10 and that part of the NE'/., of Section 15, T36N RI 19W Lincoln County, Wyoming, it being the intent to more correctly describe those tracts of record in the Office of the Clerk of Lincoln County in Book 386 of Photostatic Records on page 711 and in Book 398 of Photostatic Records on page 181, as follows: BEGINNING at the northeast corner of GLO Lot 5 (NE IA SE ~/~) of said Section 10; thence S00°-04'-32"E, 86.23 feet, along the east line of said GLO Lot 5 to the northwest corner of the SWtA of Section 11, T36N Rll9W; thence S00°-18'-23"E, 2548.92 feet, along the west line of said SW~/i, to the southeast corner of said Section 10; thence S00°-15'-26"E, 120.41 feet, along the east line of GLO Lot 2 (NE ~fi NE 'A ) of said Section 15, to the northwest corner of Section 14, T36N R119W; thence N89°-59'-39"W, 1282.73 feet, to a point; thence N00°-36'-01"E, 120.57 feet, to the southeast corner of GLO Lot 7 of said Section 10; thence N00°-24'-21"W, 2642.93 feet, to a point; thence S89°-38'-31"E, 1285.91 feet, to the CORNER OF BEGINNING; ENCOMPASSING an area of 81.29 acres, more or less; the BASE BEARING for this survey is the west line of the S.W~A of Section 10, T36N R119W, being N00 o_04,_42,,E. Subordination to Sale and Development Agreement THIS SUBORDINATION (the "Subordination") is attached to and forms part of that certain "Sale and Development Agreement" (the "Agreement") that is dated on or about 20 April 2004 and that was signed by Spurlock Properties, LLC and Shadow Dancer Estates. Except as they are defined in this Subordination, all capitalized terms that are used in this Subordination shall have the meanings for the term s that are set forth in the Agreement. The tmdersigned lender (the "Lender") holds a mortgage and/or other security instrument (collectively the "Mortgage") that encumbers all or part of a Subdivision. For the increased value to the Subdivision that is to be derived by the Agreement, the Lender hereby: (1) consents to the Agreement; (2) subordinates the lien and priority of the Mortgage to the Agreement; and (3) acknowledges that the Agreement will remain in force against the Subdivision encumbered by the Mortgage following the exercise of any remedies under the Mortgage. DATED the 22"d day of April 2004. Lender: ,'~. I~ilCH.AEL rm'nt~ CARL-A~. Kmnm STATE OF //~L/q;L.& ) ) SS. The foregoing Subordination to Sale and Development Agreement was acknowledged before me this .fl 32, day of April 2004 by F. Michael Kibbie and Carla S. Kibbie. WITNESS my hand and official seal. Notary Public My Commission Expires: RHTkD\6338 subordination SDE.doc NOTARY PUBLIC MONICA K WILLIAM$I 6510 SOuth Big Cottonwood Canyon Salt Lake City UT 84121 My Commission Expires September 30, 2007 STATE OF UTAH