FDIC TEXAS AUCTION

TERMS & CONDITIONS

General Information

The Federal Deposit Insurance Corporation ("FDIC" or "Seller") and David Kaufman & Company ("DKC") will be selling properties listed in the brochure in a series of auctions to be conducted beginning November 10, 1998 and concluding on November 14, 1998.

The foregoing notwithstanding, the FDIC reserves the right to remove or add properties to the auction(s) or to postpone or cancel the auction(s) at its sole discretion. The FDIC reserves the right to reject any and all bids, to waive any formalities or irregularities in any bid, to negotiate, reoffer or not sell any property, and neither FDIC nor DKC assume any responsibility for errors in property listings.

All properties are offered "as-is, where-is, with all faults," and prospective bidders accept the property as-is, where-is with all faults and further acknowledge and agree that the Seller hereby expressly disclaims any and all implied warranties concerning the condition of the property and any portions thereof, including but not limited to, the implied warranties of habitability, merchantability or fitness for a particular purpose.

PROPERTIES WITH A SALES PRICE OF $25,000.00 AND BELOW AND PROPERTIES SOLD IN A POOL (REGARDLESS OF THE BID AMOUNT) WILL BE CONVEYED BY QUIT CLAIM DEED. PROPERTIES WITH A SALES PRICE ABOVE $25,000.00 WILL BE CONVEYED BY SPECIAL WARRANTY DEED. A COPY OF EACH DEED CAN BE FOUND IN ANY PROPERTY INFORMATION PACKAGE.

Although information has been obtained from sources deemed reliable, the FDIC, DKC, their representatives, attorneys, agents and/or subagents make no guarantee as to the accuracy of the information herein contained or in any other property listing, file, advertisement or promotional/ publicity statement or material including Property Information Packages. Neither the FDIC nor DKC have any obligation to update this information. It is the responsibility of the prospective bidder to conduct his/her/their/its own due diligence including inspecting the property(ies) prior to attending the auction(s) to determine property condition, including possible zoning or code violations and needed repairs. In the event a prospective bidder wishes to obtain a professional pre-purchase inspection, the cost of such an inspection will be borne by the prospective bidder.

All properties are offered for sale to qualified bidders without regard to the prospective bidder's race, age, color, religion, national origin, sex, marital status, familial status and handicap.

Property Information Packages

The FDIC and DKC have prepared Property Information Packages (PIPs) of information on all properties available for sale at auction. The following properties (listed by brochure number) will be grouped in its respective PIP:

Broc. # PIP

103, 201, 202, 205 Vacant Land Property Information Package

206, 303, 304, 306, 312

101, 104, 203, 301 Improved Residential Property Information Package

102, 204, 305, 313 Improved Commercial Property Information Package

302, 307, 308, 309 Farms Property Information Package

310, 311, 314, 315

105A - 105G Houston Pooled Assets Property Information Package

207A - 207F San Antonio Pooled Assets Property Information Package

316A - 316E Dallas Pooled Assets #1 Property Information Package

317A - 317F Dallas Pooled Assets #2 Property Information Package

All Property Information Packages will be available for viewing free at the office of the respective Lead Broker and at all scheduled property inspections. In addition, PIPs may be purchased via the Auction Hotline (800/858-5700) for $15 per package. This $15 fee will include the cost of shipping via UPS. These packages may be ordered for delivery via overnight Federal Express with the prospective bidder's Federal Express account number or permission from the bidder to charge the shipping on the bidder's VISA or MasterCard number. Prospective bidders are advised to review all the information provided in the PIPs. PIPs may be supplemented or amended at any time prior to, or at the auction(s), with additional information that becomes available. Any supplemented, amended or additional information will be available at the auction. HOWEVER, NEITHER THE FDIC, DKC, THE AUCTIONEER NOR THE LEAD BROKERS WARRANT OR REPRESENT THAT INFORMATION SUPPLIED ABOUT THE PROPERTIES IS COMPLETE OR ACCURATE. PROSPECTIVE BIDDERS ARE RESPONSIBLE FOR PERFORMING HIS/HER/THEIR/ITS OWN DUE DILIGENCE INVESTIGATION AND OBTAINING INFORMATION ABOUT ANY PROPERTY THAT HE/SHE/THEY/IT WISHES TO PURCHASE.

Broker Participation

A Cooperating Broker Commission equal to percent 1.5% of the purchase price will be paid by DKC to a qualified licensed real estate broker ("Cooperating Broker") whose prospect closes a purchase of a Property. To qualify for the commission, the broker MUST:

(a) not be a partner, venturer or otherwise affiliated with the Successful High Bidder (unless acting as attorney-in-fact for the bidder under a written power of attorney) nor a principal, affiliate or other financial participant in the transaction, directly or indirectly, present or future;

(b) provide evidence satisfactory to DKC that the Cooperating Broker is a duly and actively licensed real estate broker in the state where the property is located;

(c) have registered the prospective bidder with DKC on a Cooperating Broker Registration form (found in the brochure). The form must be sent to David Kaufman & Company, FDIC Texas Broker Registration, 8725 W. Higgins Road, Suite 820, Chicago, IL 60631 VIA REGISTERED MAIL OR OVERNIGHT DELIVERY AND RECEIVED THERE NOT LATER THAN 4:00PM ON MONDAY, NOVEMBER 9, 1998. Commission will be paid only to the first broker registering a prospect;

(d) attend and register at that day's auction with the prospective buyer(s) unless bidding for the prospect with a Power of Attorney

If a Cooperating Broker has not met all of the requirements, no commission will be paid to the Cooperating Broker, even if its prospect purchases a Property. Brokers may purchase properties for themselves, but no cooperating broker commission will be paid on these purchases. No oral registrations by Cooperating Brokers will be accepted. Commission, if any, will be due and payable only following closing on the subject property. THERE WILL BE NO EXCEPTIONS TO THESE COOPERATING BROKER REQUIREMENTS and no one is authorized to make exceptions to these requirements. Any conflicts or problems arising from the Cooperating Broker participation process will be resolved solely and finally by DKC.

Property Inspections

Interested bidders are strongly encouraged to attend a property inspection/open house for all properties of interest to them. Vacant land parcels may be previewed at any time on a drive-by basis at the prospective purchaser's convenience and own risk, or may be viewed by appointment with the respective Lead Broker (listed under each property description within this brochure) for an inspection appointment. Improved Commercial and Farm Properties may be inspected on Wednesday, October 21, 1998 from 10:00am to Noon and/or Thursday, November 5, 1998 from 2:00pm to 4:00pm. Improved Residential Property Open Houses will be held on Saturday, October 24, 1998 from 11:00am to Noon and on Sunday, November 1, 1998 from 2:00pm to 4:00pm.

Some of the properties may be occupied, and the FDIC is not obligated to deliver the properties vacant. Additionally, the utilities may not be turned on in some property. NO SALE IS CONTINGENT UPON A BUYER'S INSPECTION OF THE PROPERTY.

Auction Bidder Registration

Only registered bidders will be eligible to bid at the auction(s). As a condition to registering for each auction, prospective bidders will be required, at the time and place of the auction(s), to: 1) present a photo I.D.; 2) complete and sign legible carbonless, two-part Bidder Registration Card with the bidder's name, address and telephone number (and that of the Cooperating Broker, if any); and 3) present to the Auctioneer's registrar separate evidence of funds equivalent to $2,000 (cash, cashiers checks or certified funds) as Initial Earnest Money for each property which the bidder intends to purchase. Evidence of separate Initial Earnest Money will be required FOR EACH PROPERTY the bidder intends to purchase. NO PERSONAL CHECKS OR CREDIT CARDS WILL BE ACCEPTED AT REGISTRATION. Cashier's checks and certified funds should be payable to the FDIC.

Persons who are bidding on behalf of a corporation, partnership, trust or other entity must provide satisfactory evidence of their authority to bid at the time of registration. A bidder who cannot attend an auction may send an agent to bid on the bidder's behalf. The agent must bring and executed Power of Attorney, signed by the bidder, to that auction's registration. Copies of these documents may be obtained by call DKC at 773/693-3200 ext. 40 prior to the auction(s). DKC reserves the right in its sole discretion to refuse to register any such agent, and encourages all bidders to attend the auction(s) in person.

Upon completion of the registration process, the Auctioneer's registrar will return the Initial Earnest Money funds and the cardstock part of the numbered Bidder Registration Card to the bidder. This card will enable the bidder to bid at that day's auction.

If a bidder is declared the Successful High Bidder on a property, said Successful High Bidder will tender his/her/their/its Initial Earnest Money check over to DKC immediately upon being declared the Successful High Bidder by the Auctioneer. If a bidder is not the Successful High Bidder, said bidder will retain his/her/their/its Initial Earnest Money.

Auction Procedures

The auction(s) will be open and verbal. Any announcements made by the Auctioneer on the day of the auction(s) will take precedence over all prior oral or written terms. The Auctioneer may rearrange the order in which the properties are offered, determine the bidding increments, reopen bids, settle disputes between bidders and resolve all other auction matters in its sole discretion.

Some properties in the auction(s) may be offered "without reserve." This means that, provided there are a minimum of two non-related qualified bidders, the highest bid (whatever the amount) will be accepted. Other properties will be offered "with reserve." If the reserve is not met, the highest bidder will be given the opportunity to match the reserve price on the auction floor. The Auctioneer will announce the FDIC's acceptance of the high bid with the word "SOLD," in which case the Successful High Bidder for a property will immediately initial the back of the Bidder Registration Card on the auction floor in confirmation of the amount of their accepted high bid amount.

The Auctioneer will collect information regarding the second highest bidder or other unsuccessful back-up bidder. The collection of such information does not create any option or other rights for such bidders.

Successful High Bidder Deposit

Successful High Bidders will be escorted to the Contract Signing Room by auction staff where the bidder will 1) sign the Purchaser Eligibility Certification, 2) sign the Real Estate Purchase and Sale Agreement and 3) make an Earnest Money Deposit in the amount of 5% of the high bid. The Initial Earnest Money (tendered upon conclusion of the bidding) will be applied toward the 5% Earnest Money Deposit and the Bidder must pay the balance by cash, cashier's check or certified funds.

Financing

Buyers are responsible for obtaining their own financing. The FDIC will not provide direct financing in the purchase of any properties in the auction. FAILURE TO CLOSE DUE TO THE INABILITY OF THE BUYER TO OBTAIN FINANCING WILL RESULT IN THE FORFEITURE OF THE BUYER'S EARNEST MONEY.

Closing Deadlines

The successful buyer must sign the contract and related documents immediately upon close of bidding on the purchased property. All closings must occur within 10 days of the auction if the purchase price is $25,000 or less, and on any of the pools. All closings must occur within 30 days of the auction if purchase price exceeds $25,000. Failure to meet these closing deadlines will result in cancellation of the contract and forfeiture of the earnest money deposit.

If closing is delayed for any reason beyond control of the buyer, FDIC reserves the right to extend the date of closing for a reasonable period of time to give possession and/or clear title. Extensions will be made on a case-by-case basis.

Closing Discount

THE FDIC IS OFFERING A TEN PERCENT (10%) DISCOUNT ON PROPERTIES PURCHASED FOR $25,000 OR LESS AND FOR ANY OF THE POOLS, IF THE PURCHASER CLOSES THE SALE (WITH CERTIFIED FUNDS) THE DAY OF THE AUCTION.

Closing Costs

Properties with a sale price of $25,000 and below and pools (regardless of bid amount): All sales must be coordinated with the FDIC closing agent and all expenses paid by the purchaser. The buyer will assume any outstanding taxes, encumbrances and other charges. Prospective bidders should refer to the Real Estate Purchase and Sale Agreement for clarification. Title will be conveyed via Quit Claim Deed.

Properties with a sales price above $25,000: All sales must be coordinated with Stewart Title. Real estate taxes as well as any water and sewerage charges, ground rent fees, HOA and condo fees will be prorated to the date of closing. As of the date of closing, the buyer assumes responsibility for ongoing assessments. Prospective bidders should refer to the Real Estate Purchase and Sale Agreement for clarification. Title will be conveyed via Special Warranty Deed.

Preference Under RTCC Act

Pursuant to Section 16 and 17 of the Resolution Trust Corporation Completion Act ("RTCC Act"), certain preferences will be given to a bidder which certifies that (a) with respect to Section 16, the bidder intends to use a property to provide housing or shelter for homeless persons or homeless families, and (b) with respect to Section 17, the bidder intends to use a property for offices and administrative purposes to carry out the programs providing housing to very-low-, low- and moderate-income families or housing or shelter for homeless persons or homeless families.

Prospective bidders qualifying under the RTCC Act (a "Qualified Bidder) must register for a "Certificate for Purchase Qualifying under Section 16 or Section 17 of the Resolution Trust Corporation Completion Act" no later than November 3, 1998 by calling Mr. Rafael Tallada, FDIC, 972/761-8313. In order to qualify for such a preference, Qualified Bidder must submit a signed Certificate for Purchase Qualifying under Section 16 or Section 17 of the Resolution Trust Corporation Completion Act at the time of that day's auction registration and must identify any property or properties for which such bidder intends to bid using such preference. At the completion of the bidding on a property identified by the Qualified Bidder and on which the Qualified Bidder has entered a bid, the Qualified Bidder (if not already the high bidder) will be given the opportunity, to be exercised immediately, to enter a bid for the property equal to or better than the last and highest bid.

Notice to purchaser of housing constructed before 1978

If the residential property the bidder intends to purchase was built before 1978, it may contain lead-based paint (about 75% of all pare-1978 buildings do). If the bidder purchases a property with lead-based paint, FDIC will not remove the paint. The purchaser must assume responsibility for any required remediation or removal.

Sales coordinated by the FDIC Dallas Field Operations Branch and David Kaufman & Company, license #AUCTNR00007070

This sale is being conducted in conjunction with Bullard Real Estate Inc #0196733

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