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THIS DOCUMENT (the "Agreement") constitutes the application of the above-named builder (the "Builder") for participation in the limited warranty program (the "Program") administered by ACES. ("ACES") and recited the terms and conditions governing the Builder's qualification for and participation in the Program.

ACCORDINGLY, in consideration of the mutual covenants, consideration and agreements herein contained, ACES and the Builder agree as follows:

1.  Registration Information/Periodic Reporting.  All information provided by the Builder pursuant to this Agreement (in this form and subsequent submissions) is represented to be true and accurate in all respects as of the date of submission.  Builder hereby authorizes ACES to make such inquiries and obtain such information about Builder and its activities as may be deemed necessary to confirm the accuracy and completeness of information provided to ACES.  If at any time ACES believes, in its sole judgment, that any of the information provided by the Builders is false, then ACES may terminate this agreement without notice to the Builder. 

2.  Full Participation.  Builder agrees to enroll with ACES all homes presently under construction and to be constructed during the time that Builder participates in the Program and agrees to pay all fees (including such fee increases as ACES may from time to time impose) and comply with all Program requirements for such homes.  Builder may, however, seek exemption from Program requirements for specific homes if such exemption is sought in writing, and the exemption is agreed to in writing by ACES. Any home(s) construction by the Builder within twelve (12) month period immediately preceding the Builder's and ACES execution of this Agreement may be eligible for enrollment upon the Builder's written certification that the home(s) and the Builder (at the time of construction) fulfilled Program requirements set forth in Paragraphs 5 through 8 of this Agreement.  If the Builder has homes that meet the foregoing requirements, but which already have been transferred to a purchaser, the Builder must also secure from the purchaser an acknowledgment (on the ACES BLW “Builders Limited Warranty” Form) that the purchaser accepts and agrees to be bound by the terms and conditions of the Limited Warranty (defined below) and recognizes that the warranty commencement date will be effective retroactively as of the date that the purchaser occupied the home.  Builder shall maintain records of its construction activity and the enrollment of home in the Program and provide such information to ACES on request.

3.  The Limited Warranty and the Builder/ACES Relationship.  Builder acknowledges that ACES is not an insurance policy and that the limited warranty documents and the performance standards (collectively referred to as the "Limited Warranty") have been prepared by ACES.  THE BUILDER HAS REVIEWED AND FULLY ADOPTS THE PROVISIONS OF THE LIMITED WARRANTY AS ITS OWN EXPRESS WARRANTY.  BUILDER AGREES THAT A COMPLETE COPY OF THE LIMITED WARRANTY SHALL BE PROVIDED TO THE PURCHASER (the "Homeowner") OF ANY HOME CONSTRUCTED BY BUILDER AND ENROLLED IN THE PROGRAM AND RELEASES AND HEREBY HOLDS ACES HARMLESS FROM ANY CLAIM OR CAUSE OF ACTION FOR ANY DEFICIENCY OR INADEQUACY OF THE LIMITED WARRANTY.  Builder acknowledges that ACES is not the warrantor under the Limited Warranty and that ACES has no obligations or responsibility to the Homeowner or the Builder to ensure compliance with the provisions of the Limited Warranty, and that the sole involvement of ACES will be the administration of the terms of the Limited Warranty and to facilitate the resolution of disputes and claims under the Limited Warranty.  BUILDER FURTHER AGREES TO INDEMNIFY AND HOLD ACES (and its officers, directors, agents, shareholders and representatives) HARMLESS FROM AND AGAINST ANY CLAIM, DEMAND OR CAUSE OF ACTION BY A HOMEOWNER OR ANY THIRD PARTY ARISING FROM OR IN ANY WAY RELATED TO THE LIMITED WARRANTY OR THE BUILDER'S SALES OF A HOME TO A HOMEOWNER, INCLUDING ANY COSTS, EXPENSES AND REASONABLE ATTORNEYS' FEES INCURRED BY ACES IN DEFENDING ANY SUCH CLAIM, DEMAND OR CAUSE OF ACTION.  Upon written request by ACES, the Builder shall pay for the defense of ACES in any controversy, arbitration or litigation in which any third party asserts a claim related to the administration of the Program by ACES or a claim that ACES is responsible for any act or omission of the Builder.  The Builder shall have the right to select counsel of its choice to the Builder in any such dispute but ACES retains the right to select counsel of its choice.

4.  Limited Non-Exclusive License to Builder.  Builder acknowledges the ownership interest of ACES in the Program's trademarks, copyrighted material, service marks and Limited Warranty documentation and further acknowledges the copyright protection afforded to ACES by State and Federal laws.  Builder hereby accepts the limited and non-exclusive license granted to Builder under this Agreement for the Builder's use of the Limited Warranty documentation solely for homes duly enrolled in the Program and to promptly advise ACES of any unauthorized use of the Program trademarks, service marks or any part or all of the Limited Warranty by any other person, firm or entity.  Builder further agrees to assist ACES in preserving any ownership rights ACES has in the Program trademarks, service marks and the Limited Warranty documentation.  Any Limited Warranty materials disseminated by Builder or a prospective purchaser will clearly reflect that the Limited Warranty forms are samples only, that ACES is not a warrantor or otherwise an obligor of any type to the homebuyer or any third party and that ACES is not insurance.  The Builder shall always inform its customer (and any third parties) that the Builder is solely responsible for performance of the terms and conditions set out in the Limited Warranty.

5.  Requirements Relating to Building Codes and Standards.  The Builder agrees to construct all homes to be enrolled in the Program in accordance with the following (in the order listed):

(a)    The terms and conditions of the ACES limited warranty;

(b)    Any local governmental (i.e. city, county, etc.) building code or standard.

In the event that one or more of the standards overlap or conflict, Builder shall construct the improvements to the most rigorous of the standards.

6.  Requirements Relating to Inspections.  The Builder agrees to secure the following inspections of all homes to be enrolled in the Program:

(a)    Foundation (prior to placement of concrete);

(b)    Framing (including electrical, plumbing and HVAC rough-in); and

(c)    Final (including drainage).

All inspections shall be performed by a licensed inspector unless the home is subject to inspection by inspectors employed by applicable municipal or other governmental agencies.  The Builder will secure and retain during the term of each Limited Warranty copies of all inspections performed relating to the home that is covered by such Limited Warranty and shall provide copies of same to ACES upon request.

7.  Requirements Relating to Education. The Builder is encouraged to participate in continuing education in subjects pertinent to the homebuilding profession.  

8.  Registration and Enrollment Fees, Certifications and Inspection Fees.  Concurrent with the execution of this Agreement, Builder has paid to ACES an initial registration fee of $250.00.  An enrollment fee of $175.00 will be paid by Builder for each home enrolled in the Program with a sales price below $300,000.  Any home $300,000 or greater will be assessed a $275 enrollment fee.  The enrollment fee will be due and payable at the time the home is enrolled. A $175.00 fee will be payable to ACES by the Builder upon the annual renewal of this Agreement.  Builder agrees to pay ACES half of any inspection fees before the inspection occurs.  

9.  Dispute Resolution.  The Builder agrees to participate in good faith in the alternative dispute resolution procedures that are set forth in the Limited Warranty and that are to be administered by ACES.  Administrative intervention shall require an inspection fee, which the Builder and Homeowner will split and pay to ACES before the inspection occurs.  The cost of all mediations and arbitrations will be borne equally by the Builder and the Homeowner.  The Builder further agrees to fully and promptly comply with the decisions rendered in the dispute resolution process unless the decision is appealed by the Builder or the Homeowner to a subsequent level of the dispute resolution process.

The parties to this Agreement specifically agree that this transaction involves interstate commerce and that any dispute (whether contract, warranty, tort, statutory or otherwise), including, but not limited to, (a) any and all controversies, dispute or claims arising under, or relating to, this Agreement, and any amendments thereto, (b) any controversy, dispute or claim arising by virtue of any representations, omissions, promises or warranties alleged to have been made by Builder or Builder's representative; and (c) any person injury or property damage alleged to have been sustained by any purchaser of a home from Builder or any third party shall be submitted to the alternative dispute resolution mechanisms set out in the ACES warranty (including binding arbitration) as provided by the Federal Arbitration Act (9 U.S.C. §§ I et seq.) Or, if applicable, by similar state statute, and not by or in a court of law.  The parties agree that venue for any lawsuit shall be in Harris County, Texas, regardless of the location of the Property.  The arbitrator of any dispute shall have the right to award reasonable attorneys fees and expenses, including those incurred in mediation and arbitration.  The arbitration shall be conducted pursuant to any procedures set forth in the limited warranty documents.  If there is any conflict between this Agreement and such procedures, the provisions of this Agreement shall control.  In any arbitration proceeding between the parties: 

a)    All applicable Federal and State law (including Chapters 27 and 28 of the Texas Property Code) shall apply and must be considered by arbitration;

b)    All claims, causes of action, remedies and defenses that would be available in court shall apply;

c)    The proceeding shall be conducted by a single arbitrator selected by a process designed to ensure the neutrality of the arbitrator;

d)    The parties shall be entitled to conduct reasonable and necessary discovery;

e)    The arbitrator shall render a written award and, if requested by any party, a reasoned award;

f)    The arbitrator shall have the right to apportion the cost of any such items in an equitable manner in the arbitration award; and

g)    Any award rendered in the proceeding shall be final and binding and judgment which may be reduced to judgment, in any court having jurisdiction.

ACES and Builder agree that the rights and obligations set forth in this arbitration agreement shall survive (1) the termination of this Agreement by either party; or (2) the default of this Agreement by either party.  The waiver or invalidity of any portion of this arbitration agreement shall not affect the validity or enforceability of the remaining portions of this arbitration agreement.  The parties further agree (1) that any dispute involving ACES' directors, officers, employees and agents shall be resolved as set forth herein and not in a court of law; and (2) that Builder shall have the option to include its subcontractors and suppliers as parties in any arbitration.

10.  Default/Termination.  The failure of the Builder to comply fully with each of the terms and conditions of the Agreement shall entitle ACES to immediately terminate the Builder's participation in the Program and to take such further legal action as may be available to ACES at law or in equity.  The Builder or ACES may also terminate this Agreement, without cause, upon giving the other party thirty (30) days prior written notification.  Notwithstanding the foregoing, the Builder and ACES agree that the parties respective obligations under this Agreement shall continue unabated as to all homes enrolled by the Builder in the Program prior to any such termination.  Builder also acknowledges and agrees that ACES may communicate freely with third parties as to Builder's participation in, and/or termination from, the Program without incurring any liability to Builder.  The provisions of this Paragraph shall remain in effect and shall survive the termination of this Agreement. 

11.  Interpretation/Term of Agreement.  This Agreement constitutes the complete and exclusive statement of the understanding agreed upon by the parties, and it supersedes all prior agreements, written or oral.  Acquiescence in a course of performance rendered under this Agreement shall not change or alter the terms and conditions set forth in the Agreement, and this Agreement may not be amended or modified in any manner except by a written instrument signed by the parties.  This Agreement shall be deemed to be a contract entered into, and shall be construed in accordance with and governed by the laws of the State of Texas.  Any mediation, arbitration or legal proceeding involving ACES and Builder (whether concerning this Agreement or not) shall take place in Harris County, Texas.  The term of this Agreement, unless terminated sooner in accordance with the provisions of Paragraph 10, shall be for a one-year period from the date inserted below by ACES upon its acceptance and execution of this Agreement.  Upon payment of the annual renewal fee, this Agreement will be automatically renewed for a one-year period.  

12.  Relationship of the Parties/Assignments.  This Agreement shall be binding upon and inure to the benefit of the signatories to this Agreement and their respective successors, assigns, heirs, administrators, executors and legal representatives, provided that nothing contained in this Paragraph shall be construed so as to authorize the Builder to make any assignment or transfer of the Builder's rights or obligations under this Agreement to any third party.  The terms and provisions of this Agreement are intended solely for the benefit of ACES and the Builder and shall not inure to the benefit of any third party or entity not a signatory to this Agreement.  Nothing contained in this Agreement is intended to, or shall be construed as, creating to any extent and in any manner whatsoever, any partnership, joint venture, agency relationship or association between the parties.

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