FLEX HOUSE MODULAR HOME

PURCHASE AND SALE AGREEMENT

THIS MODULAR HOME PURCHASE AND SALE AGREEMENT (“Agreement”)

is made by and between SHELTER DYNAMICS, INC., a California corporation (“Seller”), and
__________________________________ (“Buyer”) as of [date]__________________.
Recitals
A. Seller is in the business of designing and manufacturing modular homes including
the modular home described in Section 1 of this Agreement.
B. Buyer is familiar with the design and features of this home and desires to
purchase the Home from Seller, and Seller desires to sell the Home to Buyer, all on the terms and
conditions of this Agreement.
Agreement
1. Definitions. The following defined terms shall have the following meanings
when used in this Agreement.
1.1 Buyer. The “Buyer” under this Agreement is _______________________.
1.2 Seller. The “Seller” under this Agreement is Shelter Dynamics, Inc., a California
corporation.
1.3 Home. The “Home” is a modular, single-family residential dwelling unit
described by Seller as Model _____________________________________ meeting the
Plans and Specifications (defined below) and as the same may be modified from time to
time as provided in this Agreement.
1.4 Plans and Specifications. The Home, including options chosen by the Buyer, is
more particularly described in detail in the “Plans and Specifications” for this Agreement
attached hereto as Exhibit A.
1.5 Destination. The “Destination” is the location where the Buyer desires and has
the right to have Home assembled and installed. The Destination for this Agreement
is ____________________________________.
1.6 Effective Date. The “Effective Date” shall be the date of the mutual execution
and delivery of this Agreement by Buyer and Seller and the delivery of the Initial Deposit
by Buyer to Seller.
1.7 Initial Deposit. The “Initial Deposit” shall reserve the Buyer’s right to purchase
the Home as provided in this Agreement, and shall be in the amount set forth in and be
due on the date set forth in Section 7.a.

1
 1.8 Initiation Notice. The “Initiation Notice” is the notice from Seller to Buyer that
Seller is prepared to begin manufacture and construction of the Home as provided in
Section 4 of this Agreement.
1.9 Initiation Date. The “Initiation Date” shall be the date on which Seller shall begin
the manufacture and construction of the Home under the Initiation Notice as provided in
Section 4 of this Agreement.
1.10 Rough Production. “Rough Production” shall mean the work to be completed by
the Seller to manufacture and construct the Home as a water tight shell, including all
exterior walls, flooring, roof, and windows, plus rough plumbing, rough mechanical and
HVAC and rough electrical systems for the Home
1.11 Rough Production Payment. The “Rough Production Payment” shall be the
Seller’s reasonable estimate of the amount necessary for labor, materials and profit for
completion of the Home from the initiation of manufacture and construction to Rough
Production.
1.12 Finish Production. “Finish Production” shall mean the work to be completed
following Rough Production to bring the Home to the final condition of the Plans and
Specifications and ready the Home for Delivery, including manufacture and construction
of interior wall, cabinetry, finish trims and, as applicable, installation of fixtures and
appliances.
1.13 Finish Production Payment. The “Finish Production Payment” shall be the
Seller’s reasonable estimate of the amount necessary for labor, materials and profit for
completion of the Home from Rough Production to the date of Delivery.
1.14 Outside Completion Date. The “Outside Completion Date shall be the date that is
one hundred fifty (150) days after the Initiation Date.
1.15 Completion Notice. The “Completion Notice” shall be the written notice
provided by Seller to Buyer that the Home has been completed through Finish Production
pursuant to the Plans and Specifications, all governmental inspections of the Home to be
undertaken by the Seller have been approved and the Home is ready for delivery to the
Destination.
2. Home. Subject to the terms and conditions set forth in this Agreement, Buyer has
requested to purchase from the Home from Seller, has tendered the Deposit Payment to Seller,
and Seller has agreed, upon notice to Buyer, to manufacture and construct and to sell, convey,
and deliver to the Home to Buyer.
3. Plans and Specifications. Buyer hereby acknowledges and agrees that Buyer has
received, fully reviewed and approved the Plans and Specifications (as indicated by the Buyer’s
and Seller’s initials found on Exhibit A) for the Home and that Buyer’s approval has been given
after the opportunity to review the Plans and Specifications with consultants of Buyer’s
selection, including without limitation structural engineers and contractors.

2
 4. Initiation Notice. Buyer acknowledges and agrees that due to other projects
which Seller is working on or completing Seller may not be in a position to initiate manufacture
and construction of the Home on the Effective Date. In such event, Seller shall not be obligated
to initiate the manufacture and construction of the Home until Seller is in a position to initiate
and diligently complete the manufacture and construction of the Home. Notwithstanding the
foregoing, Seller agrees to undertake the manufacture and construction of each project in the
order in which Seller receives fully executed and completed agreements for projects. If Seller is
not in a position to begin manufacture and construction of the Home on the Effective Date, Seller
shall provide an Initiation Notice to Buyer of the Initiation Date, which shall be not more than
twenty (20) days following the date of the Initiation Notice. If Seller is prepared to begin
manufacture and construction of the Home immediately with the Initiation Date being the same
as the Effective Date, which shall be signified by Seller and Buyer inserting their initials as set
forth below, it is agreed Seller shall initiate the manufacture and construction of the Home, that
no Initiation Notice is due from Seller to Buyer and Buyer’s cancellation right, as provided in
Section 5 of this Agreement shall be of no force and effect.

______ ______
Seller’s Initials Buyer’s Initials

3
 5. Cancellation Right. From and after the Effective Date, each of the Seller and the
Buyer shall have the right to cancel and terminate this Agreement with the financial obligations
and consequences set forth in the following table:

Phase Seller’s Termination Right Buyer’s Termination Right

Effective Date to Initiation Seller may terminate – Buyer may terminate –
Date Initial Deposit less Initial Deposit less $1,500
$1,500 returned to Buyer returned to Buyer
Initiation Date to Seller may not terminate Buyer may terminate –
completion of Rough Payment by Buyer to Seller
Production of the Initial Deposit, plus
reasonable value of all
materials and labor to the
date of termination plus
twenty percent (20%) of the
Purchase Price

Post Rough Production Seller may not terminate Buyer may terminate -
through Delivery Payment by Buyer to Seller
of the Initial Deposit, the
Rough Production Payment,
plus reasonable value of all
materials and labor incurred
from and after the completion
of the Rough Production to
the date of termination plus
fifteen percent (15%) of the
Purchase Price

Upon the timely and effective cancellation and termination of this Agreement, Buyer shall return
(without retaining a copy) to Seller the Plans and Specifications and shall not retain any rights in
the Plans and Specifications. Buyer’s release of Buyer’s rights in the Plans and specifications
shall survive the termination of this Agreement. Except as set forth herein upon the timely and
effective termination of this Agreement neither party shall have any further rights or obligations
under this Agreement.
6. Construction of Home. Upon the Effective Date or the Initiation Date, as the case
may be, Seller shall begin and diligently continue the manufacture and construction of the Home.
Seller shall respond from time to time to reasonable requests received from Buyer concerning
Seller’s progress in the manufacture and construction of the Home and any estimated dates for
the completion of the Initial Construction, Finished Construction and the Delivery.

4
7. Purchase Price.
7.1 Total Purchase Price. The purchase price (“Purchase Price”) for the Home shall
be in the amount ________________________________________________ Dollars
($__________). The Purchase Price shall be paid in the following installments:
a. The Initial Deposit in the amount of $5,000.00 due from Seller to Buyer on
the execution and delivery of this Agreement; $1,500 of this Initial Deposit is non-
refundable.
b. The Rough Production Payment in the amount of $__________________
shall be due not later than ten (10) days after the Initiation Date; provided however if
Seller is prepared to initiate the manufacture and construction on the Home within 20
days from the Effective Date, as provided in Section 4, the Rough Production Payment
shall be due on the execution and delivery of this Agreement;
c. The Finish Production Payment in the amount of $__________________
shall be due not more than five (5) days following the completion of the work scheduled
for the Rough Production of the Home as determined by the approval of the Rough
Production inspection by the Quality Assurance Agent, _________________ and, if
Buyer so elects, Buyer’s inspection of the Rough Production; and
d. The Final Payment in the amount $___________ and shall be due within
ten (10) days after delivery of the Home by Seller to Buyer.
7.2 Form of Payment; Escrow. All payments are to be made in US Dollars. Seller
shall establish an escrow (“Escrow”) with _________________________ as Escrow
Holder. Within five (5) days after the Initiation Date, Buyer shall deposit with Escrow
Holder in immediately available funds the full amount of the Purchase Price, less the
Initial Deposit. Seller shall have the right to demand from Escrow and the Escrow Holder
shall remit to Seller from the Escrow the Rough Production Payment, the Finish
Production Payment and Final Payment pursuant to the schedule set forth in subsections
7.1.b, c and d. Buyer shall make any additional deposits to Escrow as shall be required to
account for changes in the Purchase Price following a modification as provided in this
Agreement. Buyer and Seller agree to execute and deliver in a timely fashion any escrow
agreement provided by the Escrow Holder which includes terms and provisions consistent
with this Agreement and are otherwise commercially reasonable. Buyer and Seller
acknowledge and agree that the fees and costs of the Escrow Holder are included in the
Purchase Price and are not to be separately billed to or incurred by Buyer.
7.3 Sales and Use Tax. The Purchase Price does not include applicable sales or use
tax and Buyer shall be responsible for the payment of any applicable sales or use tax.
Seller shall use Seller’s best efforts to advise Buyer as to the potential amount of and
method of collection of any sales or use tax.

5
 8. Completion. Seller represents and warrants that Seller’s manufacture and
construction of the Home shall be completed and the Home shall be ready for final delivery to
the Destination and Seller shall provide Buyer with a written Completion Notice not more than
the Outside Completion Date. If the Seller does not issue the Completion Notice on or before the
Outside Completion Date, the Purchase Price shall be reduced by the product of one-tenth of one
percent (0.1%) times the number of days from and after the Outside Completion Date to the date
that Seller issues the Completion Notice. Seller and Buyer acknowledge and agree that in the
event that the Completion Notice is not issued by the Outside Completion Date, Buyer’s
damages would be impracticable or extremely difficult to determine and the foregoing reduction
of the Purchase Price is fair and reasonable under the circumstances. Notwithstanding the
foregoing, Seller shall not be responsible for a delay in the issuance of a Completion Notice if
the Completion Notice has not been issued because any final governmental inspections to be
undertaken by the Seller have not been completed so long as Seller has requested such
inspections in a reasonably timely manner. If the Completion Notice is not issued by Seller
within ninety (90) days after the Outside Completion Date, Seller shall be deemed to be in
default under this Agreement and Buyer shall have all rights and remedies available to Buyer
following a default by Seller including without limitation cancelation of this Agreement.
9. Infrastructure. Buyer, at Buyer’s sole cost and expense, shall arrange for the
design and installation at the Destination of all infrastructure required for the Home, including a
foundation that fully and adequately accommodates and supports the Home and conforms to the
Plans and Specifications and the installation of all utilities to service the Home (including
sewage connections or a sewage system). All such infrastructure shall be designed and installed
in compliance with all laws and ordinances of state and local governments having jurisdiction
over the Home at the Destination. Buyer acknowledges and agrees that none of the foregoing
infrastructure work is the responsibility of the Seller or included in the Purchase Price.
10. Governmental Inspections. It shall be the responsibility of the Seller during the
manufacture and construction of the Home, including at the completion of the Finish Production
to have the Home inspected by and to pass inspections by all [state]_________governmental
authorities having jurisdiction over the Home and the Home’s manufacture and construction.
Seller shall provide Buyer with copies of all written evidence that such inspections have been
successfully completed. Buyer shall be responsible for all inspections by governmental
authorities having jurisdiction over the Home from and after the delivery of the Home to the
Destination including any inspection by any governmental authority in jurisdiction of the
Destination.
11. Shipping and Delivery of Home. Upon receipt of all payments due under this
Agreement (other than the Final Payment) and completion of the manufacture and construction of
the Home through the Finish Production, Seller shall promptly arrange for the shipping of the
Home, at Buyer’s sole cost and expense, to the Destination. The shipping firm engaged by Seller
to deliver the Home shall be fully licensed and the shipment shall be insured for an amount equal
to or greater than the Purchase Price. Buyer shall pay all shipping and delivery fees associated
with the transportation of the Home to the Destination, and acknowledges that shipping and
6
delivery charges are not included in and are additional to the Purchase Price. Seller shall provide
logistical assistance and advice with respect to shipping and delivery as reasonably requested by
Buyer.
12. Modification. If Seller believes a modification to the Home from the Plans and
Specifications is necessary or advisable and constitutes a material variation from the Plans and
Specifications, Seller shall meet and confer with Buyer to discuss such modifications, any
adjustments to the Purchase Price as a result of the approval of the modification and any change
in the timing of the manufacture and construction of the Home associated with the modification.
Buyer may approve or withhold approval of such modification in Buyer’s sole discretion. If
Buyer withholds approval of such modification, Seller may terminate this Agreement and, if so
terminated prior to the initiation of Rough Production by Seller, Seller shall return the Initial
Deposit to Buyer and neither party shall have any further rights or liabilities under this
Agreement. If the modification is proposed by Seller after the initiation of the Rough Production
and Buyer withholds Buyer’s approval of such modification, then either Seller may withdraw
such proposed modification or if Seller does not withdraw such proposed modification Buyer
may terminate this Agreement, and Seller shall return to Buyer all amounts of the Purchase Price
paid by Buyer to Seller. If after the Effective Date the Buyer requests a modification to the
Home that constitutes a material variation from the Plans and Specifications, Seller shall meet
and confer with Buyer to discuss such modifications, any adjustments to the Purchase Price as a
result of the approval of the modification and any change in the timing of the manufacture and
construction of the Home associated with the modification. Buyer may thereafter approve or
withhold approval of such modification in Buyer’s sole discretion. If Buyer withholds approval
of such modification, Buyer may terminate this Agreement pursuant to the terms and provisions
of Buyer’s cancellation rights as set forth in Section 5 of this Agreement.
13. Inspection Right. Buyer shall have the right after completion of the Finish
Production and prior to delivery to inspect the Home at the site of the manufacture and
construction of the Home at a time that is mutually convenient to Buyer and Seller (and which
does not interfere with or delay Seller’s manufacture or construction of the Home or Seller’s
other projects). Seller shall provide Buyer not less than ten (10) days’ notice that Home is
available for inspection and Buyer shall within five (5) days of such notice advise Seller if Buyer
wishes to exercise its right to inspect the Home. The inspection shall take place on the first
reasonably available date for the Buyer and Seller. If Buyer exercises the opportunity to have an
inspection, following such inspection, Buyer shall advise Seller that Buyer approves the Home or
approves the Home subject to the correction of any items necessary for the Home to substantially
comply with the Plans and Specifications, or reject the Home. If Buyer approves the Home
subject to corrections, Seller shall undertake to make any necessary corrections. Upon approval
of the Home, including the completion of any necessary corrections so that the Home
substantially complies with the Plans and Specifications, Seller shall prepare the Home for
delivery to the Destination. If Buyer does not timely exercise its right to inspect the Home the
Home shall be deemed approved as manufactured and constructed and Seller shall ready the
Home for delivery and shall cause the Home to be delivered to the Destination.

7
 14. Delivery and Installation. Seller shall arrange for delivery of the Home by
common carrier to Buyer at Buyer’s sole cost and expense at Buyer’s Destination. The costs of
the delivery are not included in the Purchase Price and Buyer shall independently arrange for
payment of all delivery charges to the common carrier. Buyer acknowledges and agrees that
Seller is not responsible for assembly or installation of the Home at the Destination; provided
however Seller shall provide to the party with whom Buyer contracts for the assembly and
installation of the Home with sufficient documentation and reasonable support to complete the
full assembly and installation of the Home. Upon delivery of the Home at the Destination, Buyer
shall have the right to inspect the Home to confirm that the Home complies with the Plans and
Specifications, as the same may be modified during the term of the Agreement. Seller shall be
responsible at no additional expense to Buyer to correct any material deviations of the Home
from the final Plans and Specifications. Buyer may request Seller to assist or undertake in the
assembly and installation of the Home at the Destination, and if Seller, in Seller’s sole discretion,
agrees, the Seller shall not perform such services unless and until Buyer has agreed to Seller’s
compensation for such services, including hourly rates, travel expenses and housing fees, and
pays any deposit against such fees as requested by Seller. Subject to the foregoing, Buyer assu
15. Buyer’s Rights on Seller’s Breach. In the event of Seller’s breach of this
Agreement, and provided that Buyer has given Seller not less than fifteen (15) days’ notice of the
breach and Seller has not corrected such breach in this fifteen (15) day period, in addition to all
other rights and remedies Buyer may exercise at law, Buyer shall have the right to retain all Plans
and Specifications and to claim and remove from Seller’s place of business the Home and all
materials that Seller has specifically acquired and/or manufactured for incorporation into the
Home. Should Buyer decide to take the Home, Seller agrees to fully cooperate with Buyer and
provide access onto the property where the Home is located

16. Representations and Warranties of Seller. Seller hereby represents and warrants
to Buyer:
16.1 Capacity and Authority. Seller has the right, power, legal capacity and authority
to enter into, and perform its obligations under, this Agreement and the party executing
and delivering this Agreement on behalf of the Seller is authorized to do so.
16.2 Manufacture and Construction. The manufacture and construction of the Home
shall conform to the specifications at the date of delivery of for a period of one year
following the date of delivery.
16.3 Limitations on Warranties.
a. The foregoing warranties are the sole and only warranties made by Seller
to Buyer with respect to the Home and are in lieu of all other warranties, express or
implied, of merchantability or fitness for a particular purpose.
b. Seller makes no representation or warranty with respect to any system or
appliance installed in or part of the Home and which is covered by the manufacturer or

8
 supplier of such system or appliance and Seller hereby assigns all of its rights in such
supplier’s or manufacturer’s warranty to the Buyer. The assigned manufacturer and
supplier warranties shall be set forth in list form to be delivered by Seller to Buyer at the
time of the delivery of the Home, along with all warranty information, certificates and
related documentation which Seller has received from any manufacturer or supplier of
any system or appliance.
c. Seller’s warranty under Section 16.2 shall be of no further force or effect
if and from the date after Buyer makes any modification or change to the Home.
Seller’s warranty under Section 16.2 does not cover any defect due to or caused by the
assembly and installation of the Home.
17. Representations and Warranties of Buyer. Buyer hereby represents and warrants
to Seller that Buyer has the right, power, legal capacity and authority to enter into, and perform
its obligations under, this Agreement and the party executing and delivering this Agreement on
behalf of the Buyer is authorized to do so.
18. Notices. All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on the date of service
if served personally on the party to whom notice is to be given, or on the third day after mailing
if mailed to the party to whom notice is to be given, by first class mail, registered or certified,
postage prepaid and properly addressed as follows:

Seller: Shelter Dynamics Inc.

_____________________________
_____________________________

Buyer: _____________________________
_____________________________
_____________________________

Any party may change its address for purposes of this paragraph by giving the other parties
written notice of the new address in the manner set forth above.

19. Arbitration. The parties hereby waive any right to trial by jury and further agree
that any controversy or claim relating to or arising from this Agreement shall be settled, first by
the submission of the dispute to mediation, and if not resolved by mediation by binding
arbitration. Mediation or arbitration on any such matter shall proceed in [_________________],
California in accordance with the Commercial Arbitration Rules of the Judicial Arbitration and
Mediation Services (the “JAMS”) as such rules may be modified herein or as otherwise agreed
by the parties in controversy. Following 30 days’ notice by any party of intention to invoke
mediation or arbitration, any dispute not mutually resolved by mediation within such 30-day
period shall be determined by a single arbitrator upon which the parties agree, or, in the event of

9
an absence of such agreement the single arbitrator will be appointed by JAMS. The parties may
(but shall not be required to) agree that the same party may act as both mediator and arbitrator.

20. Legal Expenses. Each party shall pay all costs and expenses incurred or to be
incurred by that party in negotiating and preparing this Agreement and in closing and carrying
out the transactions contemplated by this Agreement, except to the extent otherwise provided
herein. In the event that either party shall bring an action, including an arbitration, or employ
legal counsel to enforce the terms and conditions of this Agreement, the prevailing party shall
recover its reasonable legal fees and expenses.

21. Choice of Law. This Agreement shall be construed in accordance with, and
governed by, the laws of the State of California as applied to contracts that are executed and
performed entirely in California.

22. Entire Agreement. This Agreement, including the Exhibits attached hereto and
incorporated by reference herein, contains the entire agreement of the parties hereto with respect
to the subject matter hereof and supersedes all prior agreements and understandings, whether
written, oral or otherwise, among the parties hereto with respect to such subject matters.

IN WITNESS WHEREOF, the parties have executed this Purchase and Sale Agreement
as of the date first written above.

Buyer:

Dated: ______________, 20__

______________________________

Seller:

Dated: _______________, 20__ Shelter Dynamics, Inc.

_____________________________

By:

Its:

10