Exhibit 10.1

CONSTRUCTION LOAN AGREEMENT

          This CONSTRUCTION LOAN AGREEMENT (the “Agreement”) is entered into as
of the __18th__ day of November, 2011, among PROSPERITY BANK (the “Lender”) and
AmREIT WOODLAKE POINTE I, LP, a Texas limited partnership (the “Borrower”), as
follows:

RECITALS:

          A.          Borrower owns the real property (sometimes hereinafter
called the “Property”) described hereafter, and desires to construct certain
improvements (the “Improvements”, consisting of the Landlord’s Work and the
Tenant’s Work as defined below) thereon, said property being described as
follows, to wit:

 

A tract or parcel containing 3.7931 acres or 165,225 square feet of land, being
out of Unrestricted Reserve “A” of Woodlake Pointe, a subdivision recorded under
Film Code Number (F.C. No.) 631064, of the Harris County Map Records (H.C.M.R.),
situated in Harris County, Texas, with said 3.7931 acre tract being more
particularly described by metes and bounds attached as Exhibit “A”. With all
bearings based on said subdivision plat.

          B.          The Property has been leased by AmREIT Westheimer Gessner,
L.P. (which has assigned the Lease to Borrower) to L.A. FITNESS INTERNATIONAL,
LLC, a California limited liability company (the “Tenant”) pursuant to a Retail
Lease agreement dated May 12, 2011 (the “Lease”) which, including the defined
terms therein, is incorporated herein by reference for all purposes.

          C.          Pursuant to the terms of the Lease, Borrower is obligated
to construct certain improvements on the Property, being the “Landlord’s Work”
as defined in Section 4 of the Work Letter (Exhibit C to the Lease, being
referred to in this Agreement as the “Work Letter”, a copy of which is attached
as “Attachment 3” hereto). Out of the $6,715,000.00 Note, the amount of
$2,035,000.00 (the “Landlord Allocation”) is allocated to the Landlord’s Cost
for the Landlord’s Work and other costs, excluding the Tenant Allocation as
defined below, as scheduled on the Loan Budget (the “Budget”) attached hereto as
Exhibit “B”. Further, Borrower will be permitted to reallocate Budget line item
costs between categories, provided that the amount remaining in any line item
shall not be less than the expected cost thereof.

          D.          Pursuant to the terms of the Lease. Tenant through
Tenant’s contractor is obligated to construct certain improvements on the
Property, being the “Tenant’s Work” as defined in Section 6 of the Work Letter.
Out of the $6,715,000.00 Note, the amount of $4,680,000.00 (the “Tenant
Allocation”) is allocated to the Landlord’s Construction Cost Contribution (per
Section 7.1 of the Work Letter) for the Tenant’s Work.

          E.          The Improvements are to be constructed in conformity with
the architectural plans and specifications (the “Plans and Specifications”)
prepared by or on behalf of Borrower and Tenant.

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          F.          The Improvements shall be completed by the ___18th__ day
of May, 2013 (the “Completion Date”).

          G.          Borrower and Tenant may each engage one or more general
contractors (collectively any and all such general contractors, subcontractors,
materialmen, artisans, laborers and suppliers are referred to herein
collectively as the “Contractor”, with all contracts and agreements with any
Contractor being collectively the “Contract”). Borrower, Tenant and their
respective Contractor may have entered into an additional agreement and/or may
have agreed on plans and/or specifications (which collectively are referred to
herein as the “Construction Agreement”) for the construction of the
Improvements.

          H.          Borrower has executed a Promissory Note (the “Note”) to
Lender to finance the cost of construction of the Improvements, and Lender,
subject to the conditions hereinafter contained, has agreed to make the loan
evidenced by the Note. Borrower has executed a Deed of Trust, Security Agreement
and Financing Statement (the “Mortgage”) creating certain liens and security
interests (the “Liens”) in order to secure the Note and the indebtedness
described in the Mortgage and in this Agreement.

A G R E E M E N T S:

           NOW, THEREFORE, in consideration of the premises herein contained and
for Ten and No/100 ($10.00) Dollars and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the undersigned
agree as follows:

          1.          The Loan. Lender shall make a loan (the “Loan”) to
Borrower in the principal amount of SIX MILLION SEVEN HUNDRED FIFTEEN THOUSAND
AND NO/100 ($6,715,000.00) DOLLARS to pay for the costs of labor performed and
materials furnished (collectively called the “Work”, including the Landlord’s
Work and the Tenant’s Work) pursuant to the Lease, to be advanced by Lender as
provided below. Borrower agrees that Borrower will fully perform Borrower’s
covenants and obligations under the Contract and the Construction Agreement
executed by Borrower with respect to Landlord’s Work. Borrower will enforce the
performance by Tenant under the Lease, including Tenant’s covenants and
obligations under the Work Letter with respect to Tenant’s Work. Borrower agrees
that the Improvements will be completed by the Completion Date.

          2.          Warranties. Borrower warrants and represents that as of
the date hereof, no Work of any kind has been performed upon the Property, no
material or equipment has been delivered upon the Property, and no construction
contract has been executed by Borrower for any work or materials in connection
with any of the Improvements contemplated to be constructed on the Property.
Furthermore, Borrower confirms, ratifies and reiterates each and every warranty
and representation contained in the Mortgage and each instrument executed by
Borrower in connection with the Loan.

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          3.          Loan Advances; Retainage. The proceeds of the Loan
relating to the Work shall be advanced from time to time (at such intervals as
Lender shall determine) in installments, in amounts and after Borrower has
requested Lender, as provided in this Agreement, to pay for Work which has been
performed and completed under the Contract and after Lender is satisfied that
the Work, or such portion of the Work satisfactory to Lender, has been completed
in accordance with the Plans and Specifications and the terms and provisions of
this Agreement, the Contract and the Construction Agreement and such work has
been approved by Lender’s third party inspector (such as AECC). In no event
shall the total advances exceed the amount of the Note, unless otherwise agreed
to in writing by both of the undersigned or contemplated in this Agreement. The
Lender shall not have an obligation to make any advance under the Note if there
is a default under the Note, the Contract, this Agreement, the Construction
Agreement or any other instrument executed in connection with the Loan.

          The amount of each advance shall be the amount approved by Lender, in
its sole discretion, less ten percent (10%) (the “Retainage”) unless such
Retainage is waived by Borrower and Lender. To the extent Retainage may be
waived, Borrower acknowledges that Borrower may be additionally and personally
liable to Contractors, including subcontractors or material suppliers and other
lien claimants, for such amount under applicable law, but Lender shall have no
liability therefor. Borrower understands that such liability would be in
addition to all amounts Borrower will have paid Contractor, and in some
instances could make Borrower pay more than 100% of the Contract Price.

          Within ten (10) days following Lender’s written demand to Borrower,
Borrower shall deposit with Lender such sums (the “Borrower’s Deposit”) as
Lender may deem necessary in addition to the Loan for the completion and payment
of all costs in connection with the construction of the Improvements and for the
performance of any obligation of Borrower to Lender. Borrower agrees that such
Borrower’s Deposit will be advanced by Lender for the Work prior to Lender’s
advancing additional funds out of the Loan.

          4.          Conditions for Initial Advance. In addition to the
requirements contained in other Sections of this Agreement, prior to or at the
time of the initial advance on the Loan (including the purchase money portion of
the Loan), Lender shall be in receipt of the following, all in form and
substance satisfactory to Lender:

 

 

 

 

 

 

   (a)

The Note and the recorded Mortgage.

 

 

 

 

 

 

   (b)

This Agreement.

 

 

 

 

 

 

   (c)

A Loan Policy of Title Insurance, insuring that the lien created by the Mortgage
constitutes a valid first lien on the Property.

 

 

 

 

 

 

   (d)

Insurance policies for (i) public liability insurance and workmen’s compensation
insurance for Borrowers and Contractor; (ii) hazard insurance (builder’s risk)
providing all risk coverage on the Property and Improvements, including
materials stored on the Property or elsewhere and including all perils of
collapse; (iii) flood insurance, if applicable; and

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(iv) fire and extended coverage insurance, all policies with standard mortgagee
clauses attached in favor of Lender.

 

 

 

 

 

 

  (e)

A survey of the Property.

 

 

 

 

 

 

  (f)

A copy of the executed Construction Agreement, including the Plans and
Specifications, a copy of the building permit and the approval (if required) of
any deed restriction or architectural control committee having the right to
review and approve the plans.

 

 

 

 

 

 

  (g)

Proof satisfactory to Lender that Borrower has paid third party Contractor(s)
the first $0.00 of the cost of the Work.

 

 

 

 

 

 

  (h)

Such other documents as Lender may reasonably require in connection with the
Loan.

Notwithstanding the foregoing to the contrary, upon the closing of the Loan
(i.e., Lender receipt and approval of items a, b and c above), Lender shall
advance to Borrower the amount of Borrower’s closing costs, one half (1/2) of
the commission and soft costs as per the Budget which Borrower has provided to
Lender. Following that, the next series of advances on the Loan shall be with
respect to the Landlord’s Work as provided in this Agreement. Following
substantial completion of Landlord’s Work, then the next series of advances
shall be with respect to the Tenant’s Work as provided in this Agreement.

          5.          Application for Advances. An application for each advance,
in form approved by Lender, shall be filed a reasonable time before the date
upon which an advance is desired, certified to by: (i) Borrower’s architect,
engineer or inspector, if any, as approved by Lender; (ii) such inspector or
engineer as required by Lender, in its discretion; (iii) Borrower; and (iv) with
respect to any of Tenant’s Work, approved by Tenant in accordance with the Work
Letter. Such application shall contain such information as Lender may reasonably
request, including proof of payment to Contractor, including all contractors,
subcontractors, materialmen, laborers, vendors, suppliers and all others
providing labor and materials for the Improvements (in the case of
subcontractors, with respect to amounts greater than $10,000.00). With respect
to lien waivers from Contractor, the same may be conditional based on payment of
current amounts due, and with respect to any final lien waiver shall be
submitted to Lender within ten (10) days following advancement therefor.
Following any event of default by Borrower and/or with the prior consent of
Borrower, amounts advanced under the Loan on behalf of Borrower may be delivered
directly to any Contractor, or in Lender’s discretion may be funded by a check
issued jointly to Borrower and any such Contractor. Lender shall have the right
to enter the Property and to inspect the Work at any time. Additionally, Lender
shall have the right to inspect all books and records of Borrower relating to
the Property and the Improvements. Lender shall have the absolute right to
communicate directly with any contractors, workmen, artisans, materialmen,
suppliers or subcontractors. Lender shall not be obligated to advance for any
Work not approved by Lender. Lender may, but is not obligated to, exercise any
of the rights of Borrower or Architect (as defined in the Construction
Agreement) in deciding to reduce or withhold all or any part of any requested
advance or payment.

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          6.          Change Orders. No amendment, modification and/or change
order (a “Change Order”) to the Contract, the Plans and Specifications and/or
the Construction Agreement, shall be effective unless the same is in writing and
signed by all parties to such respective instrument. Furthermore, Lender shall
have the right to review and approve all Change Orders (i) in excess of
$100,000, or (H) which cumulatively affect the contract price by more than 5% of
the contract price, or (iii) which extend the contract time by 30 or more
calendar days, or (iv) which make any material change in the Plans and
Specifications, as a condition precedent to said Change Orders becoming
effective. Notwithstanding any provision in this Agreement to the contrary,
Lender may, in Lender’s reasonable discretion (but without any obligation of
Lender to do so), choose to advance additional sums under this Agreement for
some or all of any Change Orders, or for any other purpose, even to the extent
that the total amount advanced is in excess of the amount of the Note, which
additional sums advanced shall be added to the principal amount due under the
Note and shall bear interest and shall be due and payable as provided in the
Note, or upon Lender’s request, Borrower shall execute such additional
Promissory Note to Lender and/or such modification of Note as Lender shall
request to evidence such indebtedness, bearing interest and being due and
payable as Lender shall require, all of which shall be secured by the Liens, and
Borrower shall execute such other and further instruments as Lender’s counsel
shall require.

          7.          Commencement; Completion; Payment of Retainage. Within ten
(10) days following the commencement of construction of the Improvements (which
must be after the date of filing of the Deed of Trust), Borrower shall sign and
file an Affidavit of Commencement in the form attached hereto as Attachment 1
and provide a copy of same to Lender. Any Retainage and/or “holdback” shall be
payable upon the expiration of thirty (30) days after the later to occur of (i)
the date of final completion of the Improvements, or (ii) the filing of a
statutory Affidavit of Completion in the form attached hereto as Attachment 2
and notice thereof under Section 53.106 of the Texas Property Code; provided
that the Improvements have been inspected and accepted by Lender and by any
financing agency providing permanent financing of the Improvements.
Additionally, the Improvements shall not be considered complete unless and until
all the Work requiring inspection by any property owners association or similar
entity, or by any municipal or other governmental authority having jurisdiction,
has been duly inspected and approved by such entity or authority and all
requisite certificates of occupancy and other approvals have been duly issued;
and provided further, that Lender may withhold approval of final payment until
after evidence satisfactory to Lender shall have been presented to Lender
showing payment in full of all obligations incurred in connection with
construction and completion of the Improvements.

          8.          Subrogation for Advances. Advances made by Lender pursuant
to this Agreement for Work shall be in payment of such respective portion of the
indebtedness from Borrower to each Contractor for such Work, and Lender shall be
subrogated to any rights of each such respective Contractor with respect to such
indebtedness, including any and all rights, security interests and liens of such
respective Contractor, irrespective of whether such liens, security interests,
charges or encumbrances are released of record.

          Borrower shall have no right of offset, counterclaim or defense
against Lender for payment of any indebtedness owing under any Contract which
Lender has advanced under the Loan because of any claim Borrower may have
against any such Contractor. The obligations arising under any Contract and/or
the Construction Agreement between any Contractor and

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Borrower are separate and independent of any obligations arising hereunder among
Borrower and Lender.

          If any portion of the indebtedness owing under any Contract or under
any document executed in connection with the Loan cannot lawfully be secured by
the Liens granted therein, any payment made on such indebtedness shall be
applied first to the discharge of such unsecured portion of the indebtedness.

          9.          No Liability of Lender. Lender has no liability,
obligation or responsibility whatsoever with respect to the Work related to the
construction of the Improvements except to advance the proceeds of the Loan as
herein agreed. Lender has no liability if the amount of the Loan is insufficient
to complete the Improvements. Lender is not obligated to inspect the
Improvements or the construction thereof nor is Lender liable for the
performance or default of any Contractor, including any contractor,
subcontractor, materialman, supplier, artisan or laborer, or for any failure to
construct, complete, protect or insure the Improvements, or for the payment of
any cost or expense incurred in connection therewith, or for the performance or
nonperformance of any obligation of Borrower to such parties; and nothing,
including without limitation, any disbursement hereunder or the deposit or
acceptance of any document or instrument, shall be construed as a representation
or warranty, express or implied, on Lender’s part. No party, including Borrower,
any Contractor and/or any third party, shall have the right to assert any claim
against Lender as a result of Lender’s inspections, failure to inspect, advances
or otherwise. No third party shall be entitled to be a beneficiary of this
Agreement. Borrower shall be responsible for inspecting the Improvements during
construction and for determining that the Improvements are in accordance with
the Contract, the Plans and Specifications and the Construction Agreement, and
shall promptly notify Lender in writing of any defects discovered by Borrower.

          10.         Borrower’s Additional Agreements. Borrower hereby agree as
follows:

(a)      Borrower agrees to save and hold Lender harmless from any and all
claims of Contractor, including any and all subcontractors, materialmen or
laborers for work performed, labor or supplies provided or for the construction
of the Work.

(b)      All amounts advanced by Lender in connection with the Work are
stipulated as “Trust Funds” for the benefit of those providing labor and
materials until all such labor and materials have been paid in full. Borrower
shall fully and promptly pay all Trust Funds promptly to the party entitled to
payment thereof. In the event Borrower should default in the payment of such
Trust Funds (any amounts owing as a result of such default being “Unpaid
Bills”), then Lender may elect to declare the Loan in default, or Lender may
choose to allow further construction of the Improvements (but without waiving
such default or the right to later declare any then uncured failure to pay Trust
Funds as a default under this Agreement), in which case the following shall
apply:

 

 

 

 

 

 

1)

Borrower shall continue to be fully responsible for all obligations under the
Agreement, the Contract, the Construction Agreement and all other

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instruments executed in connection with the Loan and in connection with the
Contract.

 

 

 

 

 

 

2)

Advances may be made by Lender directly to any Contractor for completed Work or
for completion of the Work. Lender may choose not to pay to or advance any
further proceeds of the Loan directly to Borrower until all Unpaid Bills have
been paid and satisfied in full.

 

 

 

 

 

 

3)

Upon completion of the Work, any unadvanced portion of the Loan may be advanced
by Lender to pay any then Unpaid Bills.

 

 

 

 

 

 

4)

Lender is not waiving its right to declare this Agreement to be in default as a
result of a default as described above. In the event Lender shall receive any
lien claim or notice from any Contractor with respect to Unpaid Bills, Lender
shall have the right to exercise all rights under the Note and this Agreement,
including the termination by Lender of Lender’s obligation to make further
advances under the Loan, however any such termination shall not effect or
diminish Lender’s lien with respect to the Property for all amounts advanced by
Lender pursuant to the Contract and/or this Agreement.

          11.          Assignment. Borrower hereby assigns to Lender any and all
contracts, agreements and warranties with any Contractor of said party, and all
professional agreements, including those with architects, engineers and
surveyors, and all plans and specifications relating to the Improvements.

          12.          Conformance with Contract and Laws. Borrower hereby
warrants to Lender that the Improvements, when complete, and all work in
progress, will be in strict conformance with the Plans and Specifications, the
Contract and the Construction Agreement and all applicable codes, ordinances,
regulations, laws, covenants and restrictions which may affect the Property or
the Improvements. This warranty to Lender shall survive termination, and shall
remain in existence until all indebtedness to Lender shall have been fully and
finally paid in full, and until all liens assigned to Lender have been fully and
finally released by Lender, notwithstanding the provisions of §16.009 of the
Texas Civil Practices and Remedies Code. This warranty is assignable by Lender.

          13.          Survey. Upon request, the Borrower shall furnish to
Lender, promptly after the foundation for the Improvements has been poured, a
survey by a surveyor, licensed as such in the State of Texas and acceptable to
Lender, of the Property showing, in addition to the usual and customary
information disclosed by a proper survey, the location of said foundation, duly
certified by such surveyor as an accurate survey. Such survey must reflect that
none of said Work encroaches upon a street or any adjoining property and that no
adjoining structure encroaches upon said Property, and said survey must not
disclose any violation of building setback lines or building restrictions or any
other title defect or encumbrance. A final survey covering the matters set forth
above shall be of said Work in accordance with the Plans and Specifications
therefor. Lender may also require Borrower to furnish an “as built” set of plans
and/or specifications.

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          14.          Lender’s Right to Complete. Subject to the force majeure
provision in the next paragraph, if Borrower at any time prior to the completion
of the Improvements abandons the same, ceases work thereon for a period of more
than twenty (20) days, fails to complete the erection of the Improvements
strictly in accordance with the Plans and Specifications, except as to changes
approved by Lender, makes material changes in the Plans and Specifications
without first securing written approval of the Lender in accordance with Section
6 of this Agreement, fails to enforce any default by Tenant under the Lease, or
otherwise fails to comply with the terms of this Agreement or the Mortgage, any
such failure shall be a default hereunder and Lender shall have the right, but
not the obligation, to complete the Improvements and the Liens granted under the
Mortgage shall secure all amounts incurred by Lender in connection with such
completion. Such amounts, together with an overhead and oversight fee of fifteen
percent (15%) thereof, shall be due and owing from Borrower to Lender and
(together with other amounts owing to Lender under the Loan and this Agreement)
shall be fully secured by the Liens. In the event of Borrower’s default, Lender
may terminate this Agreement, and/or the Lender, at its option, at any time
thereafter, may enter into possession of the Property and perform any and all
work and labor necessary to complete the Improvements; all sums so expended by
the Lender, together with an overhead and oversight fee of fifteen percent (15%)
thereof, shall be deemed advanced to Borrower and secured by the Mortgage.

          Force Majeure. Regarding the dates for completion of the Improvements
and/or the cessation of work for more than twenty (20) days as provided above in
this Agreement, if such date is prevented or delayed by reason of any act of
Nature (including, but not limited to lightning, storm, flood, hurricane),
strike, fire, explosion, lockout, labor trouble, acts of war or terrorism or
inability to secure materials, or any other cause (except financial inability)
not the fault of the party required to perform the act, and provided that such
delay qualifies as a force majeure event under the Lease with Tenant’s and
Borrower’s written acknowledgment thereof, Lender will not unreasonably withhold
its consent to Borrower’s request to extend the time for performance of the act
for a period equivalent to the number of days of delay and performance of the
act during the period of delay will be excused. However with respect to the date
of completion of the Improvements, such time of extension must be incorporated
into a written Modification Agreement executed by Borrower and Lender. Nothing
in this paragraph shall excuse the prompt payment of interest, principal or any
other amount required to be paid by Borrower to Lender under the Note or Loan
documents.

          If Lender takes possession of the Property, it may take any and all
actions necessary in Lender’s judgment to complete construction of the
Improvements, including but not limited to making changes in the Plans and
Specifications (subject to the provisions of the Lease), work, or materials and
entering into, modifying or terminating any contractual arrangements, subject to
Lender’s right at any time to discontinue any work without liability. If Lender
elects to complete the Improvements, it will not assume any liability to
Borrower, Tenant or to any other person for completing the Improvements or for
the manner or quality of construction of the Improvements, and Borrower
expressly waives any such liability. Borrower irrevocably appoints Lender as
Borrower’s attorney-in-fact, with full power of substitution, to complete the
Improvements, at Lender’s option, either in Borrower’s name or in Lender’s name.
Lender shall have the right, in its sole discretion, to: (a) use any funds of
the Borrower, including any balance which may be held in escrow and any funds
which may remain unadvanced under this Agreement for the

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purpose of completing the Improvements, (b) employ such contractors,
subcontractors, and agents, architects and inspectors as shall be required for
said purposes, (c) employ watchmen to protect the Property from injury, (d) pay,
settle or compromise all existing bills and claims which may be liens or claims
against the Improvements, or as may be necessary or desirable for the completion
of the Improvements, or for clearance of title, (e) execute all applications and
certificates in the name of the Borrower which may be required by any of the
contract documents relating to the Property and/or the Improvements, and (f) to
do any and every act which the Borrower might do in its own behalf with respect
to the Property and the Improvements It is further understood and agreed that
this power of attorney shall be deemed to be a power coupled with an interest
and cannot be revoked. The above mentioned attorney-in-fact shall also have the
power to prosecute and defend all actions or proceedings in connection with the
construction of the Improvements or the Property and to take such action and
require such performance as such attorney-in-fact deems necessary.

          In any event, all sums expended by Lender in completing the
construction of the Improvements will be considered to have been disbursed to
Borrower and will be secured by the collateral for the Loan. Any such sums that
cause the principal amount of the Loan to exceed the face amount of the Note
will be considered to be an additional Loan to Borrower, bearing interest as
provided in the Note, and being secured by Lender’s Liens on the Property and by
all collateral for the Loan.

          For these purposes, Borrower assigns to Lender all of its right, title
and interest in and to the following documents (the “Project Documents”): All
Plans and Specifications, all studies, data and drawings relating to the
Property and the Improvements, whether prepared by or for Borrower, all permits,
all construction contracts, all engineering and architectural contracts, and all
other contracts and agreements relating to the Property or to the construction
of the Improvements. However Lender will not have any obligation under the
Project Documents unless Lender expressly hereafter agrees to assume such
obligations in writing. Lender will have the right to exercise any rights of
Borrower under the Project Documents upon the occurrence of a default by
Borrower. Except as may be prohibited by applicable law, all of Lender’s rights
and remedies, whether evidenced by this Agreement or by any other writing, shall
be cumulative and may be exercised singularly or concurrently.

          15.          Borrower and Tenant Obligated to Their Contractor(s).
Borrower and Tenant shall be obligated to their respective Contractor(s) under
any Contract and under any Construction Agreement with Borrower or Tenant
respectively. Lender shall not be responsible to Contractor for the payment or
performance of any obligation of Borrower or Tenant under any such Contract or
Construction Agreement.

          16.          Affidavits of Commencement/Completion. Upon the request
of Lender, or at Borrower’s election, the Borrower shall execute and file an
Affidavit of Commencement as provided in Section 53.124 of the Texas Property
Code. Upon the request of Lender, Borrower shall execute and file an Affidavit
of Completion, and send such notices as provided in Section 53.106 of the Texas
Property Code.

          17.          Expenses. Borrower shall pay for all expenses incurred in
connection with the transactions described herein, including costs for the
issuance of any casualty, liability, and/or

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title insurance binders or policies, recording fees, survey fees, appraisal
charges, engineering fees, inspection fees, expenses of Lender’s counsel, loan
fees, and any other costs and expenses arising pursuant to this Agreement and/or
the Loan. Lender shall have the right to pay any of such expenses not paid by
Borrower as an advance on the Loan and add the same to the Note. Such inspection
fees shall include, without limitation, the cost of professional third party
inspection company such as AECC.

          18.          Assignment Prohibited. Except as provided in this
Agreement, Borrower shall not have the right to assign this Agreement, or any of
its rights, obligations or benefits, without first receiving the prior written
consent of Lender. Subject to the foregoing, the provisions of this Agreement,
the Contract, the Construction Agreement and all other instruments executed in
connection with the Loan and the Property, shall be binding upon the successors,
legal representatives, heirs and assigns of Borrower, and the benefits shall
extend to the successors and assigns of Lender.

          19.          Events of Default. Any of the following shall, if
determined by Lender (in its sole discretion) to have occurred or be occurring,
constitute an Event of Default:

 

 

 

(a)          Any representation or warranty of Borrower in this Agreement, or in
the Mortgage, Lease or any other instrument executed in connection with the
Loan, is or becomes untrue in any material respect, in whole or in part; or

 

 

 

(b)          Borrower breaches any agreement or obligation contained in this
Agreement, the Note and/or the Mortgage, or in the any Contract or Construction
Agreement executed by Borrower, or in any other instrument executed in
connection with the Loan, or if there is any default by Tenant under the Lease
which continues beyond any applicable cure period provided in the Lease; or

 

 

 

(c)          Any sum of money which is due under the Note, this Agreement, the
Mortgage or the Construction Agreement is not paid by the responsible party when
due; or

 

 

 

(d)          Borrower or Tenant is or becomes insolvent or is adjudicated a
bankrupt, or is the subject of a proceeding for debtor relief, or a receiver is
appointed for Borrower or Tenant, or if Lender determines that Borrower or
Tenant is financially unable to complete such parties obligations with respect
to this Agreement, the Note and/or the Mortgage, or pursuant to any Contract or
Construction Agreement; or

 

 

 

(e)          The Improvements or Property is damaged or destroyed, and any
insurance proceeds are insufficient (in Lender’s determination) to repair and
restore the same, or the Improvements cannot be completed by the Completion
Date; or

 

 

 

(f)          Borrower or Tenant abandons construction of the Improvements prior
to completion, or if construction of the Improvements ceases for a period of
twenty

10

--------------------------------------------------------------------------------

 

 

 

(20) consecutive days or more, subject to Force Majeure as provided in Section
14 of this Agreement.

          20.          Default Remedies. If an Event of a Default shall occur or
be continuing, Lender shall have the right (in addition to any other rights
available to Lender under the Note, the Mortgage, or any other instrument), to
refuse to make any further advance(s), and/or to declare the Note and the
Mortgage in default and to exercise all rights and remedies of Lender under such
instruments or any other instruments executed in connection with the Loan.

          21.          Construction Sign(s). Lender shall have the right at any
time, at Lender’s election and at Lender’s expense, to provide, install and/or
remove one or more temporary signs on the Property containing Lender’s name,
logo, address, etc. which indicate that Lender is providing construction
financing for the Improvements.

          22.          General. Time is of the essence hereof with respect to
the dates, terms and provisions of this Agreement. This Agreement is performable
at Lender’s office as stated in the Note. Under no circumstances shall Lender be
in default of any obligation or covenant herein unless the party claiming such
default shall notify Lender in writing by certified mail, return receipt
requested, or by hand delivery, to the President of Lender, specifying such
alleged default and specifying a period of time [no less than ten (10) business
days] in which Lender may cure such alleged default, and provided Lender fails
to cure or commence to cure such alleged default within such time period.

 

 

 

THIS WRITTEN LOAN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES.

11

--------------------------------------------------------------------------------

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

This Agreement is executed as of the date first stated above.

 

 

 

 

 

LENDER:

 

 

 

 

PROSPERITY BANK

 

 

 

 

By:

    /s/ Robert J. Dowdell

 

 

 

 

 

 

Name:

        Robert J. Dowdell

 

 

 

 

 

 

Title: 

             Regional President

 

 

 

 

 

 

 

BORROWER:

 

 

 

AmREIT WOODLAKE POINTE I, LP, a Texas limited
Partnership

 

 

 

 

 

By:

AmREIT Woodlake Pointe GP, LLC, a Texas
limited liability company, its general partner

 

 

 

 

 

 

By:

AmREIT Realty Investment
Corporation, a Texas corporation, its
Member

 

 

 

 

 

 

 

By

:     /s/ Chad C. Braun

 

 

 

 

        Chad C. Braun, Vice President

12

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Attachment 1

AFFIDAVIT OF COMMENCEMENT
OF CONSTRUCTION

 

 

THE STATE OF TEXAS

§

 

§

COUNTY OF HARRIS

§

          The undersigned are the Owner and General Contractor with regard to
the construction described below. This instrument is recorded in the records of
Harris County, Texas, pursuant to Section 53.124 of the Texas Property Code, and
provides notice to all concerned of the commencement of construction of
improvements on the real property, as described below:

          1.          The Owner is AmREIT WOODLAKE POINTE I, LP, a Texas limited
partnership, whose mailing address is 8 Greenway Plaza, Suite 1000, Houston,
Texas 77046.

          2.    The Contractor is ___________________________, whose mailing
address is
_________________________________________________________________________________________________.

          3.          The Real Property is known as
______________________________________________ County, Texas
_______________________, more fully described as follows:

 

 

 

A tract or parcel containing 3.7931 acres or 165,225 square feet of land, being
out of Unrestricted Reserve “A” of Woodlake Pointe, a subdivision recorded under
Film Code Number (F.C. No.) 631064, of the Harris County Map Records (H.C.M.R.),
situated in Harris County, Texas, with said 3.7931 acre tract being more
particularly described by metes and bounds attached as Exhibit “A”. With all
bearings based on said subdivision plat.

 

 

 

 

4.

Work actually commenced on _____________________, 20______.

 

 

 

 

5.

The improvements commenced may generally be described as construction of
improvements and related site work for the Owners.

13

--------------------------------------------------------------------------------

          EXECUTED this the _________ day of________, 20____.

 

 

 

 

 

 

 

 

OWNER:

CONTRACTOR:

 

 

 

 

 

 

 

 

 

 

 

 

AmREIT WOODLAKE POINT I, a Texas limited

 

partnership

By:

 

 

 

 

 

Name:

 

By:

AmREIT Woodlake Pointe GP, LLC, a Texas

Title:

 

 

limited liability company, its general partner

 

 

 

 

 

 

 

By:

AmREIT Realty Investment Corporation, a Texas corporation, its Member

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

 

Chad C. Braun, Vice President

 

 

14

--------------------------------------------------------------------------------

(NOTARY ACKNOWLEDGMENTS FOR AFFIDAVIT OF
COMMENCEMENT OF CONSTRUCTION)

 

 

THE STATE OF TEXAS

§

 

§

COUNTY OF HARRIS

§

          BEFORE ME, the undersigned authority, on this day personally appeared
CHAD C. BRAUN, the VICE PRESIDENT of AmREIT REALTY INVESTMENT CORPORATION, a
Texas corporation, a Member of AmREIT WOODLAKE POINTE GP, LLC, a Texas limited
liability company, the general partner of AmREIT WOODLAKE POINTE I, LP, a Texas
limited partnership, known to me to be the persons whose names are subscribed to
the foregoing instrument, and acknowledged to me that they executed the same for
the purposes and consideration therein expressed.

          SWORN AND SUBSCRIBED TO BEFORE ME on this the _____ day
of___________________ 20_____, to certify which witness my hand and seal of
office.

 

 

 

 

 

Notary Public in and for

 

The State of Texas

 

 

THE STATE OF TEXAS

§

 

§

COUNTY OF HARRIS

§

          BEFORE ME, the undersigned authority, on this day personally appeared
_______________________________ the ___________________________________ of
________________________, known to me to be the person whose name is subscribed
to the foregoing instrument, and acknowledged to me that he executed the same
for the purposes and consideration therein expressed and in the capacity stated.

          SWORN AND SUBSCRIBED TO BEFORE ME on this the _____ day of
___________________ 20_____, to certify which witness my hand and seal of
office.

 

 

 

 

 

Notary Public in and for

 

The State of Texas

AFTER RECORDING RETURN TO:

PROSPERITY BANK
Attn: Loan Operations 202 W. Colorado
La Grange, Texas 78945

15

--------------------------------------------------------------------------------

Attachment 2

AFFIDAVIT OF COMPLETION OF CONSTRUCTION

 

 

THE STATE OF TEXAS

§

 

§

COUNTY OF HARRIS

§

          THE UNDERSIGNED are the owners with respect to the construction
described below. This instrument is recorded in the records of Harris County,
Texas, pursuant to Section 53.106 of the Texas Property Code, and provides
notice to all concerned of the completion of construction of improvements on the
real property as described below:

 

 

 

 

1.

The Owner is AmREIT WOODLAKE POINTE I, LP, a Texas limited partnership, whose
mailing address is 8 Greenway Plaza, Suite 1000, Houston, Texas 77046.

 

 

 

 

2.

The Contractor is _________________________, whose mailing address is
___________________________________________________________________.

 

 

 

 

3.

The Real Property is known as _____________________, _____________ County, Texas
________________________, more fully described as follows:

 

 

 

 

 

A tract or parcel containing 3.7931 acres or 165,225 square feet of land, being
out of Unrestricted Reserve “A” of Woodlake Pointe, a subdivision recorded under
Film Code Number (F.C. No.) 631064, of the Harris County Map Records (H.C.M.R.),
situated in Harris County, Texas, with said 3.7931 acre tract being more
particularly described by metes and bounds attached as Exhibit “A”. With all
bearings based on said subdivision plat.

 

 

 

 

4.

The improvements furnished under the original contract may generally be
described as construction of improvements and related site work for the Owners.

16

--------------------------------------------------------------------------------

 

 

 

 

5.

The improvements described above have been completed and the date of completion
was ______________, 20______.

 

 

 

 

ALL CLAIMANTS ARE HEREBY NOTIFIED THAT YOU MAY NOT HAVE A LIEN ON RETAINED FUNDS
UNLESS YOU FILE AN AFFIDAVIT CLAIMING THE LIEN NOT LATER THAN THE 30TH DAY AFTER
THE DATE OF COMPLETION.

 

 

 

 

 

OWNER:

 

 

 

AmREIT WOODLAKE POINTE I, LP, a Texas limited Partnership

 

 

 

By:

AmREIT Woodlake Pointe GP, LLC, a Texas limited liability company, its general
partner

 

 

 

 

 

 

By:

AmREIT Realty Investment Corporation, a Texas corporation, its Member

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Chad C. Braun, Vice President

 

17

--------------------------------------------------------------------------------

(NOTARY ACKNOWLEDGMENT FOR AFFIDAVIT
OF COMPLETION OF CONSTRUCTION)

 

 

THE STATE OF TEXAS

§

 

§

COUNTY OF HARRIS

§

          BEFORE ME, the undersigned authority, on this day personally appeared
CHAD C. BRAUN, the VICE PRESIDENT of AmREIT REALTY INVESTMENT CORPORATION, a
Texas corporation, a Member of AmREIT WOODLAKE POINTE GP, LLC, a Texas limited
liability company, the general partner of AmREIT WOODLAKE POINTE I, LP, a Texas
limited partnership, known to me to be the persons whose names are subscribed to
the foregoing instrument, and acknowledged to me that they executed the same for
the purposes and consideration therein expressed.

          SWORN AND SUBSCRIBED TO BEFORE ME on this the _____________ day of
__________________, 20______ to certify which witness my hand and seal of
office.

 

 

 

 

 

Notary Public in and for The State of Texas

AFTER RECORDING RETURN TO:

PROSPERITY BANK
Attn: Loan Operations
202 W. Colorado
La Grange, Texas 78945

18

--------------------------------------------------------------------------------

Attachment 3
Work Letter to Lease

19

--------------------------------------------------------------------------------

EXHIBIT C

WORK LETTER

THIS WORK LETTER (“Work Letter”) is part of that certain Retail Lease dated May
______, 2011 (the “Effective Date”) by and between AMREIT WESTHEIMER GESSNER,
LP, a Texas limited partnership, as Landlord, and L.A. FITNESS INTERNATIONAL,
LLC, a California limited liability company, as Tenant (the “Lease”).

1.         Force and Effect. The provisions of this Work Letter ate hereby
incorporated into the Lease and shall have the same force and effect as if this
Work Letter were a numbered article of the Lease.

2.         Defined Terms. All capitalized terms not defined herein but defined
in the Lease shall have the same meaning as set forth in the Lease, except as
otherwise specifically stated herein.

3.         Design and Construction Consultants.

 

 

 

3.1.         Tenant’s Architect. Heights Venture Architects, RKAA,
Schroeder-Slater Architecture, Architects Forum or such other Texas licensed
architect as Tenant may select with written notice to Landlord, shall act as
Tenant’s architect (“Tenant’s Architect”) for “Tenant’s Work” (as defined in
Section 6 below).

 

 

 

3.2          Landlord’s Civil Engineer. Ryan Getz of Ward, Getz & Associates,
LLP (with an address of 2500 Tanglewilde, Suite 301, Houston, Texas 77063 and
telephone number of 713.789.1900) or such other Texas licensed civil engineering
company as Landlord may identify with written notice to Tenant, shall act as
Landlord’s civil engineer with respect to the Premises (“Landlord’s Engineer”),

 

 

 

3.3          Tenant’s Project Manager. Jon Zaich at 2600 Michelson Drive, Suite
300, Irvine, CA 92612, tel.: (949) 255-7440, fax: (949) 660-4928, email:
jonz@lafitness.com, shall act as Tenant’s project manager (“Tenant’s Project
Manager”) with respect to the completion of Tenant’s Work.

 

 

 

3.4          Landlord’s Project Manager. Ron Lindsey and/or Jason Lax (with an
address of 8 Greenway Plaza, Suite 1000, Houston, Texas 77046 and telephone
number of 713¬850--1400) shall act as Landlord’s project manager (“Landlord’s
Project Manager”) with respect to the completion of Landlord’s Work (as defined
in Section 4.1 below).

 

 

 

3.5          Communications. All communications with respect to the matters
covered by this Work Letter are to be made to Tenant’s Project Manager or
Landlord’s Project Manager, as the case may be, in writing. Either party may
change its representative under this Work Letter at any time by written notice
to the other party in compliance with the notice provisions of the Lease.

20

--------------------------------------------------------------------------------

 

 

4.

Landlord’s Work.

 

 

 

4.1          Definition. The term “Landlord’s Work” shall mean (i) painting of
the east and north walls of the Other Building (as defined in the Lease), (ii)
repairing and striping the parking area within Tenant’s Area of Control (and the
Land to the extent any existing pavement in the parking area within the Land
remains) and (iii) the construction of the on-site and off-site work set forth)
on Addendum 1 and Addendum 2 hereto and as set forth in the Site Work Plans (as
defined in Section 4.6 below).

 

 

 

4.2          Delivery of Conceptual Engineering Package. Within thirty (30) days
after the Effective Date, at its sole cost and expense, Landlord shall prepare
and deliver to Tenant the Conceptual Engineering Package (as defined in Section
4.3 below).

 

 

 

4.3          Conceptual Engineering Package. The term “Conceptual Engineering
Package”, as used herein, shall mean the following documents related to the Land
and Tenant’s Area of Control (herein “Phase I of the Project”): (a) an ALTA,
boundary and topographical survey, (b) a site plan prepared by a licensed civil
engineer (“Site Plan”), (c) a preliminary grading and drainage plan, (d) a
preliminary utility plan for both “wet” and “dry” utilities, including power,
gas, telephone, water and sewer, (e) a signage plan including design and
location of any free-standing signs, (f) a geotechnical report on the soils
within Phase I of the Project prepared by a licensed soils engineer, (g) a Phase
I environmental assessment prepared by a licensed environmental engineer,
together with a certification from such engineer that Tenant may rely on the
information contained in such assessment, and any other environmental reports or
studies, (h) a preliminary title report dated no more than sixty (60) days prior
to the Effective Date, together with copies of all documents representing
exceptions to title and a color-coded plan plotting the easements, rights of way
and other third-party rights affecting title, (i) to the extent reasonably
available, “will serve letters” from all providers of utilities shown on the
utility plan, (j) a water flow (fire flow) test, (k) a preliminary parking and
landscaping plan, and (I) Landlord’s recap of Site Plan entitlement progress
including related agency correspondence and documentation. The Conceptual
Engineering Package shall be prepared based on the Utility Work and the Site
Work obligations of Landlord (each as defined in Section 4.6 below). Within
thirty (30) days of the date Tenant approves the Conceptual Engineering Package,
Landlord shall deliver to Tenant a preliminary site lighting plan for Phase I of
the Project with photometrics. 

 

 

 

4.4          Approval of Conceptual Engineering Package. Within thirty (30) days
after receipt of the complete Conceptual Engineering’ Package, Tenant shall
either approve or reasonably disapprove of same in writing. If Tenant.
reasonably disapproves any aspect of the Conceptual Engineering Package, Tenant
shall notify Landlord in writing of any changes reasonably required by Tenant,
and, within fifteen (15) days thereafter, Landlord shall incorporate any such
changes (to the extent reasonably acceptable to Landlord) into the Conceptual
Engineering Package and redeliver the Conceptual Engineering Package, as
revised, to Tenant for approval. Within ten (10) days after receiving the
revised Conceptual Engineering Package, Tenant shall notify Landlord of Tenant’s
approval or reasonable disapproval thereof in writing. If Tenant again
disapproves such revised

21

--------------------------------------------------------------------------------

 

 

 

Conceptual Engineering Package in writing and Landlord does not revise and
redeliver the Conceptual Engineering Package to Tenant with changes acceptable
to Tenant in Tenant’s reasonable judgment within ten (10) days of Tenant’s
written submission of all requested changes to Landlord, then, on ten (10) days’
written notice to the other party, either party shall have the right to
terminate the Lease, following which neither party shall have any further
liability to the other (except as otherwise provided in the Lease or this Work
Letter). Landlord may cancel Tenant’s termination notice if, prior to the
expiration of the ten (10) day notice period, Landlord redelivers the Conceptual
Engineering Package to Tenant incorporating all of Tenant’s reasonably requested
changes. Tenant or Landlord, as the case may be, may cancel the other’s
termination notice if, prior to the expiration of the ten (10) day notice
period, Tenant or Landlord, as the case may be, delivers written notice to the
other that it accepts the Conceptual Engineering Package as last submitted.

 

 

 

4.5          Site Plan Submittal Package and Governmental Approvals. Within
fifteen (15) days following Tenant’s approval of the Conceptual Engineering
Package, Landlord shall prepare and submit all applications and submittals
(collectively, the “Site Plan Submittal Package”) to the Governmental
Authorities having jurisdiction over the design and construction of Landlord’s
Work necessary to obtain the Required Project Entitlements and all other
governmental permits and approvals for the construction of Landlord’s Work
(collectively, the “Approvals”). The Site Plan Submittal Package shall be
prepared in a manner consistent with the Conceptual Engineering Package and,
together with the proposed applications, drawings, plans and fee schedule, shall
be submitted to Tenant’s Architect for approval or disapproval prior to actual
submittal to the applicable Governmental Authorities. Landlord shall provide
Tenant with a prompt written notice of the issuance of the Approvals.

 

 

 

4.6          Site Work Plans. Within thirty (30) days following issuance of the
Approvals, Landlord shall prepare and deliver final site work plans and
specifications (“Site Work Plans”) to Tenant for Tenant’s approval (not to be
unreasonably withheld, conditioned or delayed). The Site Work Plans shall
include, without limitation, the Phase I of the Project utility work set forth
on Addendum l (the “Utility Work”) and the site work set forth on Addendum 2
(the “Site Work”). Within ten (10) days after receipt of the Site Work Plans,
Tenant shall either approve or reasonably disapprove the same in writing. If
Tenant reasonably disapproves any aspect of the Site Work Plans, Tenant shall
notify Landlord of any changes reasonably required by Tenant in writing, and
Landlord shall promptly incorporate any such changes into the Site Work Plans
and redeliver them, as revised, to Tenant, for Tenant’s written approval or
disapproval, Any elements of the Site Work Plans that conflict with the approved
Site Plan Submittal. Package are hereby deemed to be disapproved. Unless
Landlord is otherwise notified in writing by Tenant, Landlord shall be obligated
to correct any elements of the Site Work Plans which conflict with the approved
Site Plan Submittal Package. Once approved by Tenant, no material changes to the
approved Site Work Plans shall be made without Tenant’s prior written approval.
So long as Landlord has provided Tenant with a reminder notice ten (10) clays
prior to the expiration of the thirty (30) day period referenced in this
Section, or three (3)

22

--------------------------------------------------------------------------------

 

 

 

days prior to the expiration of the ten (10) day period referenced in this
Section, as the case may be, if Tenant fails to notify Landlord in writing of
any objections to the Site Work Plans within thirty (30) days of its receipt of
the Site Work Plans, or within ten (10) days after receipt its receipt of the
revised Site Work Plans, as the case may be, then Tenant shall be deemed to have
approved the Site Work Plans/revised Site Work Plans.

 

 

 

4.7          Construction Commencement. Subject to Force Majeure Events not to
exceed thirty (30) days and delays solely caused by Tenant, Landlord shall
commence construction of Landlord’s Work (“Landlord’s Commencement”) within ten
(10) days of the later to occur of the date that (i) Landlord obtains the
Approvals, (ii) Tenant approves the Site Work Plans in writing pursuant to
Section 4.6 above and (iii) Tenant obtains the Building Permit and provides
Landlord with a copy of same.

 

 

 

4.8          Landlord’s Cost. Landlord shall be responsible for all costs,
expenses and delays associated with Landlord’s Work including change order
requests to the extent that they are (i) initiated by Landlord, (ii) mandated by
applicable Governmental Authorities, (iii) required to bring the Conceptual
Engineering Package and/or the Site Work Plans into conformance with one
another, with applicable governmental requirements, the Utility Work and/or the
Site Work, or (iv) required to correct deficiencies or inaccuracies within such
plans.

 

 

 

4.9          Project Managers’ Review. Tenant’s Project Manager and Landlord’s
Project Manager shall determine on behalf of both Tenant and Landlord that each
is meeting its construction obligations hereunder. Both Tenant’s Project Manager
and Landlord’s Project Manager shall be given access to the Project at all times
and shall be provided by each other with all project schedules, copies of all
field inspections and copies of any correspondence from any Governmental
Authorities having jurisdiction over the design and/or construction process.

 

 

 

4.10        Completion of Tenant’s Building Pad and Critical Site Work. Landlord
shall complete the preparation of the Building Pad as well as all portions of
Landlord’s Work which may be required for Tenant to commence its uninterrupted
construction of Tenant’s Work (the “Critical Site Work”) in accordance with the
approved Site Work Plans. Critical Site Work is defined as performance and/or
completion of Landlord’s Work outlined in Addendum 1 and Sections 2, 3 and 8 of
Addendum 2, as well as fire protection and any other temporary utilities as may
be required by the Governmental Authorities, and all-weather access to and
around the Building Pad in accordance with the approved Site Work Plans. Subject
to Force Majeure Events and delays solely caused by Tenant, Landlord shall
satisfy Delivery on or before the date that is thirty (30) days after the
Landlord’s Commencement set forth in Section 4.7 above (the “Completion Date”).

 

 

 

4.11        Delay in delivery of the Building Pad. Subject to Force Majeure
Events and delays solely caused by Tenant, if Landlord fails to accomplish
Delivery on or before the Completion Dale, Landlord shall pay Tenant, within ten
(10) days of Tenant’s written demand therefor, liquidated damages of One
Thousand and 00/100 Dollars ($1,000.00). If Landlord fails to satisfy Delivery
on or before the Outside Turnover Date specified in

23

--------------------------------------------------------------------------------

 

 

 

Section 1.6 of the Lease, then Tenant may, at its sole option and discretion,
terminate the Lease pursuant to Article XXIV of the Lease or waive the
contingency and continue to accrue the foregoing per diem liquidated damages.
Landlord and Tenant agree that, based on the existing circumstances as of the
date hereof, the actual damages that will be suffered by Tenant as a result of
Landlord’s failure to satisfy Delivery as required hereunder are extremely
difficult to determine and that the liquidated damages provided hereunder are
reasonable under the circumstances; provided, however, the foregoing shall not
diminish or restrict Tenant’s self-help remedy under Section 9.2 of this Work
Letter.

 

 

 

4.12          Completion of Utility Work. Landlord shall complete, within sixty
(60) days following the date Tenant commences its construction pursuant to
Section 6.3 below, the construction and installation of all permanent utilities
set forth in Addendum 1 hereto at point of connection locations shown on
Tenant’s Plans and Specifications (as defined in Section 6.2 below), Tenant
will, at no third-party out-of-pocket cost to Tenant, reasonably cooperate with
Landlord in connection with the foregoing utility work obligation of Landlord.

 

 

 

4.13          Scheduling for Tenant’s Opening. Tenant shall give Landlord not
less than sixty (60) days prior written notice of the estimated date of Tenant’s
intended opening date for its health and fitness facility. Landlord shall cause
all of Landlord’s Work additional to the Critical Site Work (the “Non-Critical
Site Work”) to be substantially complete, including, but not limited to, the
parking lot paving and striping, construction of any required pylon or monument
sign structure (as described in Section 21.1 of the Lease) and all other work
required for Tenant to obtain a certificate of occupancy or equivalent for
Tenant’s Work, not later than thirty (30) days prior to Tenant’s scheduled
opening date.

 

 

 

4.14          Completion of Landlord’s Work. Landlord’s Work shall not be deemed
“completed” until such time that Tenant has received a certificate from
Landlord’s Engineer certifying that Landlord’s Work has been fully completed in
accordance with the Site Work Plans and evidence of approval from the
Governmental Authority having jurisdiction over Landlord’s Work in the form and
to the extent same is issued by such Governmental Authority in the ordinary
course of business. Within twenty (20) days following Tenant’s receipt of such
certification, Tenant shall provide Landlord with a written punchlist setting
forth the incomplete and defective items of Landlord’s Work which require
additional work by Landlord (the “Site Work Punchlist”). Landlord shall fully
perform or cause to be fully performed all items of work disclosed in the Site
Work Punchlist that Landlord should have performed pursuant to the terms of this
Work Letter, within thirty (30) days following Landlord’s receipt of the Site
Work Punchlist. Should Landlord fail or refuse to perform the work itemized in
the Site Work Punchlist, Tenant may, after providing written notice to Landlord,
perform the work. at the cost of Landlord, whereupon Landlord shall reimburse
Tenant for the actual itemized third-party out-of-pocket costs of performing
such work plus interest thereon at the Interest Rate within ten (10) clays
following Landlord’s receipt of Tenant’s or Tenant’s Architect’s itemized
invoice for same. Should Landlord fail to so reimburse Tenant, then such

24

--------------------------------------------------------------------------------

 

 

 

amounts shall be offset against Minimum Rent and other sums first coming due
under the Lease.

 

 

5.

Intentionally omitted.

 

 

6.

Tenant’s Work.

 

 

 

6.1           Definition. The term “Tenant’s Work” shall mean the construction
of the Building pursuant to Tenant’s Plans and Specifications.

 

 

 

6.2           Tenant’s Plans and Specifications. Subject to Landlord Delays,
within ninety (90) days following the later to occur of the date (i) all
contingencies in Article XXIV of the Lease (except for that contained in Section
24.3) have been satisfied or otherwise waived in writing by Tenant, (ii) Tenant
receives from Landlord a geotechnical report on the soils in the Land and
Tenant’s Area of Control prepared by a licensed soils engineer in accordance
with the required Utility Work and Site Work, (iii) Tenant approves the Site
Work Plans in accordance with Section 4.6 above, and (iv) Landlord notifies
Tenant in writing that Landlord has obtained the Required Project Entitlements,
Tenant will cause Tenant’s Architect to prepare and deliver to Landlord complete
plans, drawings and specifications (“Tenant’s Plans and Specifications”) for the
construction of Tenant’s Work substantially in accordance with the elevations
set forth in Addendum 3 (“Tenant’s Elevations”) and the space plans set forth in
Addendum 4 (“Tenant’s Space Plans”), which Tenant’s Elevations and Tenant’s
Space Plans are hereby pre-approved by Landlord subject to Applicable Laws.

 

 

 

               Tenant’s Plans and Specifications will show the architectural,
structural and MEP detail for the construction of Tenant’s Work in sufficient
detail as is required to obtain necessary building permits and other approvals
and for Tenant’s contractor to prosecute the construction within the time frames
set forth in the Lease and this Exhibit C, including but not limited to: (a) the
base Building shell and other improvements constituting the Premises that are
not within the scope of Landlord’s Work; (b) all utility facilities which will
require conduiting or other improvements from the base Building shell work
and/or within the Premises; and (c) all other material specifications for
Tenant’s Work.

 

 

 

               As long as Tenant’s Plans and Specifications substantially
conform to Tenant’s Space Plans, Tenant’s Elevations and the terms and
conditions hereof in all material respects, Landlord will not unreasonably
withhold, delay or condition its consent to Tenant’s Plans and Specifications.
If Landlord reasonably disapproves any material aspect of Tenant’s Plans and
Specifications, Landlord agrees to advise Tenant in writing of such disapproval
and the reasons therefor within live (5) business days of its receipt of
Tenant’s Plans and Specifications. Landlord’s failure to so notify Tenant within
such five. (5) business day period shall be deemed to be Landlord’s approval of
Tenant’s Plans and Specifications. If Landlord reasonably disapproves any aspect
of Tenant’s Plans and Specifications, Tenant and Landlord shall then use
diligent efforts to reach agreement as to Tenant’s Plans and Specifications.
Notwithstanding the foregoing, any approval given

25

--------------------------------------------------------------------------------

 

 

 

or deemed given by Landlord in connection with Tenant’s Plans and Specifications
or the construction work described in this Work Letter, shall be a conceptual
approval and not a technical approval. No such submission or approval by
Landlord shall be deemed to mean approval of structural capacity, size of ducts
and piping, adequacy of electrical wiring, system/equipment capacities and,
without limitation, other technical matters pertaining to Tenant’s Work; nor
shall such approval relieve Tenant of the responsibility for proper and adequate
design and construction of Tenant’s Work or responsibility for compliance with
all Applicable Laws.

 

 

 

                Within ten (10) days following Landlord’s approval of Tenant’s
Plans and Specifications and to the extent permitted by the appropriate
Governmental Authorities, Tenant will submit Tenant’s Plans and Specifications
to the appropriate Governmental Authorities for plan checking and the issuance
of the Building Permit, and contemporaneously provide Landlord with a copy of
such submission. Tenant will use diligent and commercially reasonable efforts to
obtain the Building Permit as soon as commercially reasonable following the date
Tenant submits for the same (subject to delays caused by the Governmental
Authorities). Tenant’s Architect shall make any and all changes to Tenant’s
Plans and Specifications required by any applicable Governmental Authority
(“Governmental Changes”) to obtain the Building Permit, and Landlord is hereby
deemed to have approved all Governmental Changes. Subject to the immediately
preceding sentence, Tenant shall make no material changes to Tenant’s Plans and
Specifications without Landlord’s reasonable written approval (in this
particular regard, only structural changes or changes to the exterior facade of
the Building shall be deemed to be “material”). Tenant’s Work shall be
constructed in a good and workmanlike manner, in accordance with Applicable Laws
and in material conformity with Tenant’s Plans and Specifications, except where
Landlord has given or is deemed to have given prior written approval for
material modifications. Tenant shall diligently pursue the issuance of the
Building Permit and agrees to respond, to the extent reasonable, to plan review
comments from the Governmental Authorities within ten (10) days following the
date such comments are received by Tenant. Tenant shall keep Landlord promptly
informed of any such plan review comments from the Governmental Authorities.

 

 

 

6.3           Construction of the Building. Subject to Landlord Delays and
delays caused by Force Majeure. Events, within twenty (20) days following the
issuance of the Building Permit and satisfaction of Delivery, Tenant will
commence (“Tenant Commencement Date”) to construct Tenant’s Work substantially
in accordance with Tenant’s Plans and Specifications and will diligently pursue
completion of the same in such a manner as to achieve substantial completion on
or before the expiration of three hundred sixty five (365) days after the Tenant
Commencement Date (subject to Landlord Delays and delays caused by Force Majeure
Events).

 

 

 

6.4           General Contractor. In connection with the construction of
Tenant’s Work, Tenant shall select and use a bondable non-union general
contractor, possessing good labor relations and experienced in commercial
construction. Tenant shall have the right, but not the obligation, to select its
general contractor through a competitive bidding

26

--------------------------------------------------------------------------------

 

 

 

process. Excluding Landlord’s obligation to disburse Landlord’s Construction
Cost Contribution pursuant to this Work Letter, Landlord shall have no
obligation to Tenant’s general contractor, and Tenant’s general contractor shall
look solely to Tenant for the performance of any and all obligations pursuant to
the construction contract between Tenant and Tenant’s general contractor. In no
event is Tenant or Tenant’s general contractor required to obtain a performance
bond or any other bond in connection with the construction of Tenant’s Work.
Notwithstanding the foregoing, if Landlord’s lender shall require such a bond,
Tenant will obtain or cause its general contractor to obtain such bond and
Landlord shall reimburse Tenant (over and above Landlord’s Construction Cost
Contribution, as defined below) or its general contractor, as applicable, for
any and all costs and expenses incurred in the obtaining of such bond and shall
provide any other assurances or indemnities required by the surety company as a
condition to issuing such bond.

 

 

 

6.5           Condition of Tenant’s Work. Tenant’s Work will be deemed to be
completed at such time as (i) Tenant’s Architect certifies in writing to
Landlord that to the best of Tenant’s Architect’s knowledge, information and
belief, Tenant’s Work has been constructed substantially in accordance with
Tenant’s Plans and Specifications, but for minor punchlist items which do not
preclude Tenant from opening or operating the Premises for the Primary Uses, and
(ii) a certificate of occupancy, temporary certificate of occupancy, final
building department sign-off or the equivalent has been issued.

 

 

 

6.6           Warranties. Tenant shall assign to Landlord all of the warranties
Tenant obtains in connection with the construction of Tenant’s Work to the
extent Landlord is obligated to maintain and repair the same under the Lease.
Tenant shall retain rights to enforce such warranties in the event Landlord
breaches its maintenance and repair obligations.

 

 

7.

Landlord’s Construction Cost Contribution.

 

 

 

7.1           Construction Allowance. In consideration for the Rent to be paid
under the Lease, Landlord shall provide construction funding to Tenant
(“Landlord’s Construction Cost Contribution”) for the purpose of planning,
designing, permitting and constructing Tenant’s Work up to the amount of Four
Million Six Hundred Eighty Thousand and 00/100 Dollars ($4,680,000.00) (based on
$104.00 per square foot of the Premises). Landlord’s Construction Cost
Contribution may be used by Tenant to pay for any costs associated with the
improvement of the Premises for Tenant’s use (including, without limitation,
architectural and engineering fees and the cost of obtaining all necessary
permits and approvals that Tenant is required to obtain pursuant to the terms of
the Lease and this Work Letter). Tenant shall provide evidence of costs for
which it seeks reimbursement of Landlord’s Construction Cost Contribution
pursuant to Section 7.2 below. Should the cost to design, obtain permits for and
construct Tenant’s Work exceed Landlord’s Construction Cost Contribution, then
Tenant shall pay such excess. Landlord shall not impose any fee, cost or other
charge on Tenant (including, without limitation, for profit, overhead,
supervision or otherwise) in connection with the design and construction of
Tenant’s Work.

27

--------------------------------------------------------------------------------

 

 

 

7.2     Payment of Landlord’s Construction Cost Contribution. Landlord shall
disburse Landlord’s Construction Cost Contribution on a monthly progress basis
throughout the course of the design and construction of Tenant’s Work in
accordance with the following:

 

 

 

 

 

(a)          For the first draw on Landlord’s Construction Cost Contribution,
Tenant shall deliver to Landlord (i) with respect to the payment of design,
architectural, engineering and agency fees relating to Tenant’s Work, written
invoices from the applicable party to Landlord, and (ii) with respect to
construction costs relating to Tenant’s Work, an Application and Certificate for
Payment (AIA Document G702/G703) executed by Tenant’s general contractor and
Tenant’s Architect showing the breakdown by sub-trades of the cost of Tenant’s
Work, including Tenant’s general contractor’s sworn statement and a conditional
release of lien from Tenant’s general contractor in the form attached hereto as
Addendum 6. Landlord shall pay Tenant the amount of the initial draw request in
accord with Section 7.2(c) below. An unconditional lien waiver from Tenant’s
general contractor in the form attached hereto as Addendum 6 for the first draw
will be provided with the next draw request per Section 7.2(b) below. No
subcontractor lien waivers shall be provided with the initial draw request, as
all such subcontractor lien waivers for the initial draw will be provided with
the next draw request per Section 7.2(b) below;

 

 

 

 

 

(b)          After the submission of the initial draw request, not more often
than monthly throughout the course of construction of Tenant’s Work, Tenant
shall (i) with respect to the payment of design, architectural, engineering and
agency fees relating to Tenant’s Work, supply written invoices from the
applicable party to Landlord, and (ii) with respect to construction costs
relating to Tenant’s Work, deliver to Landlord an Application and Certificate
for Payment (AIA Document G702/G703) executed by Tenant’s general contractor and
Tenant’s Architect, showing the percentage and value of work completed since the
prior disbursement and stating that the portion of Tenant’s Work for which the
disbursement is requested has been completed and deliver to Landlord, prior to
or simultaneously with each monthly draw request, partial conditional lien
releases (in the form attached as Addendum 6 and such other documents as
required by Applicable Law to the extent applicable) from Tenant’s general
contractor and each applicable subcontractor and/or material supplier providing
construction services or supplies for Tenant’s Work whose contract with Tenant’s
general contractor in the aggregate exceeds Ten Thousand and 00/100 Dollars
($10,000.00) (each, a “Material Subcontractor”) for the portion of the Work
completed by Tenant’s general contractor and/or such Material Subcontractor, as
applicable, and covered by the prior monthly disbursement request(s) along with
proof of payment by Tenant of Tenant’s general contractor’s and any Material
Subcontractor’s prior payment applications for the work completed by Tenant’s
general contractor and/or such Material Subcontractor, as applicable, in
connection with the prior monthly disbursement request(s) and an unconditional
lien release in the form attached as Addendum 6 and such other documents as
required by Applicable Law to the extent applicable from the Tenant’s general
contractor and any

28

--------------------------------------------------------------------------------

 

 

 

 

 

Material Subcontractor showing proof of payment for the prior application. The
Application and Certificate for Payment shall constitute a representation by
Tenant that Tenant’s Work identified therein has been completed in a good and
workmanlike manner and in substantial accordance with Tenant’s Plans and
Specifications;

 

 

 

 

 

(c)          Landlord shall disburse (i) one hundred percent (100%) of any
design, architectural, engineering and agency fees, and (ii) at least ninety
percent (90%) of the value stated in line item 4 of each Application and
Certificate for Payment (less any previous certificates for payment) within
twenty (20) days of each submittal for payment and shall retain no more than ten
percent (10%) of the value stated as retainage to be disbursed upon completion
The final disbursement of the remaining balance of Landlord’s Construction Cost
Contribution shall be disbursed to Tenant when Landlord has received an
Application and Certificate for Payment (AIA Document G702/G703) executed by
Tenant’s general contractor and Tenant’s Architect as to all of Tenant’s Work as
provided hereinabove and the following conditions have been satisfied:

 

 

 

 

 

 

1)

A certificate of occupancy, temporary certificate of occupancy, final building
department sign-off, or equivalent has been issued by the appropriate
Governmental Authority; and

 

 

 

 

 

 

2)

Tenant shall have provided Landlord with unconditional final lien
releases/waivers from Tenant’s general contractor and all Material
Subcontractors involved in Tenant’s Work.

 

 

 

7.3     Building Permits and Certificates of Occupancy. Landlord will fully
cooperate with Tenant in obtaining the Building Permit, all other permits for
the construction of Tenant’s Work required by Governmental Authorities, and all
required certificates of occupancy.

8.       Landlord Delays. For purposes of the Lease and this Work Letter, the
term “Landlord Delays” means any delay in the completion of Tenant’s Work or any
delay in the opening of the Premises for business to the general public
resulting from any or all of the following: (i) Landlord’s failure to timely
perform any of its obligations pursuant to this Work Letter including, without
limitation, the timely completion of Landlord’s Work and the timely payment of
Landlord’s Construction Cost Contribution, or (ii) Landlord’s changes to any of
the Conceptual Engineering Package, the Site Plan Submittal Package, or the Site
Work Plans after Tenant’s approval thereof pursuant to the terms of this Work
Letter.

9.       Defaults. Time is of the essence for each party’s obligations
hereunder. If Landlord fails to perform any of its obligations within the
timeframes set forth herein, Tenant may avail itself of the following remedies:

 

 

 

9.1     Monetary Default. If Landlord fails to pay any sum due to Tenant
pursuant to the terms of this Work Letter, then such sum shall accrue interest
at the Interest Rate from the date due until paid in full, and Tenant may bring
suit for collection against Landlord

29

--------------------------------------------------------------------------------

 

 

 

for such amounts. In addition, Tenant shall have the right to offset the amount
due, together with interest at the interest Rate, against Minimum Rent and other
charges due from Tenant to Landlord under the Lease until Tenant has received
all sums due under the Lease and Work Letter. In addition, if Landlord fails to
pay Tenant any portion of Landlord’s Construction Cost Contribution, Tenant may
cease construction of Tenant’s Work until such time as Tenant has received such
payment.

 

 

 

9.2     Non-monetary Default. In addition to any and all other remedies
available to Tenant hereunder or by law, but subject to Force Majeure Events and
delays caused by Tenant or Tenant’s employees, contractors or agents, if
Landlord fails to commence construction within the time period specified in
Section 4.7 above or if Tenant reasonably determines that the construction of
Landlord’s Work is not proceeding so as to be completed within the time limits
agreed to in Section 4 above, Tenant may give written notice of such fact to
Landlord. If within ten (10) days of Landlord’s receipt of Tenant’s written
notice Landlord does not present to Tenant evidence reasonably acceptable to
Tenant that Landlord’s Work will be commenced or completed as required, then
Tenant shall have the right, but not the obligation, to assume control of the
portion of Landlord’s Work made the basis of Tenant’s written notice (a
“Takeover Notice”). In such event, Tenant shall have the right to modify the
Site Work Plans as Tenant reasonably deems advisable in order to complete the
portion of Landlord’s Work over which Tenant has assumed control so as to
accommodate Tenant’s need to open on schedule. Landlord hereby grants to Tenant,
its contractors, agents and employees a temporary license to enter upon the Land
and Tenant’s Area of Control for the purpose of performing all or any part of
Landlord’s Work. Landlord shall remain liable for payment of the costs
associated with Landlord’s Work. If Landlord fails to pay for Landlord’s Work,
then the amounts owed to Tenant shall bear interest at the Interest Rate from
the date due until paid, and Tenant may offset such amounts against Minimum Rent
and other sums first coming due under the Lease until Tenant has been fully
reimbursed.

 

 

 

9.3     Certificate of Occupancy. If a temporary or permanent certificate of
occupancy (or its equivalent) cannot be issued after Tenant’s Work is complete
due to incompleteness of or defects in Landlord’s Work, then, notwithstanding
anything contained in the Lease to the contrary and without limiting any other
rights or remedies of Tenant, for each day that Tenant is delayed in opening for
business within the Premises, Tenant shall be given two (2) days of Minimum Rent
and Additional Rent free for every day until Landlord’s Work is completed or
corrected and a temporary or permanent certificate of occupancy (or its
equivalent) is issued and delivered to Tenant permitting use of the Premises for
the Primary Uses.

 

 

 

9.4     Cumulative Remedies. The remedies provided in this Section 9 are in
addition to any remedies available elsewhere in this Work Letter, in the Lease,
or under Applicable Law. Exercise of one remedy shall not be deemed to preclude
exercise of other remedies for the same default, and all remedies available to
Tenant may be exercised cumulatively.

10.     Intentionally omitted.

30

--------------------------------------------------------------------------------

11.     Temporary Easements.

 

 

 

11.1     Mutual Easements. By executing the Lease, Landlord and Tenant each
grants and conveys to the other and the other’s contractors, materialmen or
workmen, such temporary licenses of passage and use over and across the Project
as are reasonably necessary for Tenant to construct Tenant’s Work, or to perform
any maintenance or other work required to be performed by Tenant under the
Lease, and for Landlord to construct Landlord’s Work or to perform any
maintenance or other work required to be performed by Landlord under the Lease.
In addition, Landlord grants to Tenant an easement and right to use one of the
two (2) agreeable staging areas within the Land as depicted on the Site Plan for
the purpose of storage of materials and equipment during the construction of
Tenant’s Work; provided, Tenant shall initially use Staging Area A, but upon
Tenant’s receipt of Landlord’s written request, Tenant shall use Staging Area B
in lieu of Staging Area A; provided further, Landlord shall not request Tenant
use an alternative agreeable staging area more than once during the construction
of Tenant’s Work. This reciprocal grant is subject to the conditions that (i)
such licenses will be in effect only during periods when actual construction or
maintenance is performed and in any event will terminate upon the termination of
the Lease, and (ii) such licenses will be exercised so as not to unreasonably
interfere with the use and operation of the affected areas.

 

 

 

11.2     Construction Easements. By executing the Lease, Landlord does hereby
grant Tenant an easement in the area beneath Tenant’s Work for the purpose of
constructing foundations, pylons and other necessary building support for the
construction of Tenant’s Work and for the repair and maintenance of the same.
This easement will remain in effect for the full Term of the Lease or until any
earlier termination in accordance with its terms.

12.     Ownership of Tenant’s Work. Tenant acknowledges and agrees that upon
payment in full of Landlord’s Construction Cost Contribution to Tenant, Tenant’s
Work and any and all improvements at any time constructed, placed or maintained
on or under any part of the Premises (exclusive of Tenant’s Personal Property)
will be and remain the property of Landlord.

13.     Insurance. Tenant agrees to indemnify and hold harmless Landlord, and
Landlord’s members, partners, employees and agents, from all liability in
connection with Tenant’s Work and Landlord agrees to indemnify and hold harmless
Tenant, and Tenant’s members, partners, employees and agents, from all liability
in connection with Landlord’s Work. During performance of any work under this
Work Letter or the Lease, the parties shall provide or cause their contractor(s)
to provide, insurance as specified in Addendum 5 hereto and such insurance as
may from time to time be required by city, county, state or federal laws, codes,
regulations or authorities, together with such other insurance as is reasonably
necessary or appropriate under the circumstances. All insurance policies
required under Addendum 5 shall provide that Landlord or Tenant (as applicable)
shall be given thirty (30) days’ prior written notice of any alteration or
termination of coverage.

14.     Addenda. The parties agree that all addenda attached to this Work Letter
are hereby incorporated by reference and arc made a part of this Work Letter and
the Lease.

31

--------------------------------------------------------------------------------

EXHIBIT A

DESCRIPTION
3.7931 ACRES OR 165,225 SQUARE FEET

A TRACT OR PARCEL CONTAINING 3.7931 ACRES OR 165,225 SQUARE FEET OF LAND, BEING
OUT OF UNRESTRICTED RESERVE “A” OF WOODLAKE POINTE, A SUBDIVISION RECORDED UNDER
FILM CODE NUMBER (F.C.NO.) 6.31064,OF THE HARRIS COUNTY MAP RECORDS (H.C.M.R.),
SITUATED IN HARRIS COUNTY, TEXAS, WITH SAID 3.7931 ACRE TRACT BEING MORE
PARTICULARLY DESCRIBED AS FOLLOWS. WITH ALL BEARINGS BASED ON SAID SUBDIVISION
PLAT;

BEGINNING AT A 1” INCH IRON PIPE FOUND ON THE WEST RIGHT-OF-WAY (R.O.W.) LINE OF
TANGLEWILDE AVENUE (EIGHTY FEE WIDE) AND MARKING THE NORTHEAST CORNER OF LOT 16
BLOCK 1, OF TANGLEWILDE, SECTION ONE, A SUBDIVISION RECORDED IN VOLUME 49, PAGE
25, OF THE H.C.M.R. AND THE SOUTHEAST CORNER OF SAID UNRESTRICTED RESERVE “A”
AND THE SOUTHEAST CORNER OF THE HEREIN DESCRIBED TRACT;

THENCE, WITH THE NORTH LINE OF SAID TANGLEWILDE SECTION ONE AND THE SOUTH LINE
OF SAID UNRESTRICTED RESERVE “A”, SOUTH 87 DEGREES 29 MINUTES 48 SECONDS WEST, A
DISTANCE OF 531.50 FEET TO A CAPPED 5/8” IRON ROD STAMPED “WINDROSE LAND
SERVICES” SET ON SAID COMMON LINE AND THE SOUTHWEST CORNER OF THE HEREIN
DESCRIBED TRACT;

THENCE, THROUGH AND ACROSS SAID UNRESTRICTED RESERVE “A” THE FOLLOWING THREE (3)
COURSES:

 

 

 

 

1.

NORTH 02 DEGREES 30 MINUTES 12 SECONDS WEST, A DISTANCE OF 235.29 FEET TO A CUT
“X” IN CONCRETE SET FOR A WESTERLY CORNER OF THE HEREIN DESCRIBED TRACT;

 

 

 

 

2.

NORTH 87 DEGREES 29 MINUTES 48 SECONDS EAST, A DISTANCE OF 64.74 FEET TO A
CAPPED 5/8” IRON ROD STAMPED “WINDROSE LAND SERVICES” SET FOR AN INTERIOR CORNER
OF THE HEREIN DESCRIBED TRACT;

 

 

 

 

3.

NORTH 02 DEGREES 30 MINUTES 12 SECONDS WEST, A DISTANCE 154.78 FEET TO A CUT “X”
IN CONCRETE SET ON THE SOUTH R.O.W. LINE OF WESTHEIMER ROAD (ONE HUNDRED-TWENTY
FEET WIDE) AND THE NORTH LINE OF SAID UNRESTRICTED RESERVE “A” AND FOR THE
NORTHWEST CORNER OF THE HEREIN DESCRIBED TRACT;

THENCE, WITH THE SOUTH LINE OF SAID WESTHEIMER ROAD AND THE NORTH LINE OF SAID
UNRESTRICTED RESERVE “A” NORTH 87 DEGREES 29 MINUTES 48

32

--------------------------------------------------------------------------------

SECONDS EAST, A DISTANCE OF 301.82 FEET TO A CUT “X” IN CONCRETE SET ON THE
SOUTH LINE OF SAID WESTHEIMER ROAD BEING THE NORTHEAST CORNER OF SAID
UNRESTRICTED RESERVE “A” AND THE NORTHWEST CORNER OF RESTRICTED RESERVE “A” OF
MCDONALD’S PLACE-TANGLEWILDE, A PLAT RECORDED IN VOLUME 339, PAGE 141, OF THE
H.C.M.R AND BEING THE NORTHEAST CORNER OF THE HEREIN DESCRIBED TRACT;

THENCE, WITH THE COMMON LINES OF SAID RESTRICTED RESERVE “A” AND SAID
UNRESTRICTED RESERVE “A” THE FOLLOWING TWO (2) COURSES:

 

 

 

 

1.

SOUTH 02 DEGREES 30 MINUTES 12 SECONDS EAST, A DISTANCE OF 230.00 FEET TO A CUT
“X” IN CONCRETE FOUND MARKING THE SOUTHEAST CORNER OF SAID RESTRICTED RESERVE
“A” AND AN INTERIOR CORNER OF SAID UNRESTRICTED RESERVE “A” AND OF THE HEREIN
DESCRIBED TRACT.

 

 

 

 

2.

NORTH 87 DEGREES 29 MINUTES 48 SECONDS EAST, A DISTANCE OF 231.62 FEET TO CUT
“X” IN CONCRETE SET FOR THE BEGINNING OF A NON-TANGENT CURVE TO THE RIGHT ON THE
WEST R.O.W. LINE OF SAID TANGLEWILDE AVENUE MARKING THE SOUTHEAST CORNER OF SAID
RESTRICTED RESERVE “A” AND THE MOST EASTERLY NORTHEAST CORNER OF SAID
UNRESTRICTED RESERVE “A” AND THE HEREIN DESCRIBED TRACT;

THENCE WITH SAID WEST R.O.W. LINE AND THE EAST LINE OF SAID UNRESTRICTED RESERVE
“A”, 159.01 FEET ALONG THE ARC OF SAID NON-TANGENT CURVE TO THE RIGHT, HAVING A
RADIUS OF 809.29 FEET, A CENTRAL ANGLE OF 11 DEGREES 15 MINUTES 26 SECONDS, AND
HAVING A CHORD BEARING AND DISTANCE OF SOUTH 19 DEGREES 38 MINUTES 11 SECONDS
WEST, 158.75 FEET TO A CUT “X” IN CONCRETE SET MARKING THE END OF SAID CURVE.

THENCE, CONTINUING ALONG SAID WEST R.O.W LINE AND THE EAST LINE OF SAID
UNRESTRICTED RESERVE, “A”, SOUTH 25 DEGREES 15 MINUTES 35 SECONDS WEST, A
DISTANCE OF 14.71 FEET TO THE PLACE OF BEGINNING AND CONTAINING 3.7931 ACRES OR
165,225 SQUARE FEET OF LAND, AS SHOWN ON JOB NO 45315WC FILED IN THE OFFICES OF
WINDROSE LAND SERVICES, INC.

33

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EXHIBIT B

Woodlake Pointe Phase 1- LA Fitness
Prosperity Bank Loan Budget

 

 

 

 

 

 

 

 

 

 

 

 

 

Budget

 

Funding at Closing

 

Progress
Fundings

 

Hard Cost

 

 

 

 

 

 

 

 

 

 

Fee

 

$

40,417

 

$

-

 

$

40,417

 

General Conditions

 

 

71,154

 

 

-

 

 

71,154

 

Site Work

 

 

230,896

 

 

-

 

 

230,896

 

Utilities

 

 

131,625

 

 

-

 

 

131,625

 

Landscaping & Irrigation

 

 

37,590

 

 

-

 

 

37,590

 

Concrete Paving/Sidewalks

 

 

370,929

 

 

-

 

 

370,929

 

Thermal/Moisture Protection

 

 

19,270

 

 

-

 

 

19,270

 

Electrical

 

 

76,600

 

 

-

 

 

76,600

 

Sales Tax

 

 

2,153

 

 

-

 

 

2,153

 

Insurance

 

 

22,262

 

 

-

 

 

22,262

 

Stripe Lot

 

 

3,825

 

 

-

 

 

3,825

 

Bond

 

 

5,433

 

 

-

 

 

5,433

 

Contingency

 

 

16,191

 

 

-

 

 

16,191

 

Signage

 

 

76,000

 

 

-

 

 

76,000

 

Less LAF sign reimbursement

 

 

(26,500

)

 

-

 

 

(26,500

)

Less Portion of Signage allocable to Borders Bldg

 

 

(49,500

)

$

-

 

 

(49,500

)

 

 

 

 

 

 

 

 

 

 

 

Subtotal

 

$

1,028,345

 

$

-

 

$

1,028,345

 

 

 

 

 

 

 

 

 

 

 

 

Tenant Improvements

 

 

4,680,000

 

 

 

 

$

4,680,000

 

Total Hard Cost

 

$

5,708,345

 

$

-

 

$

5,708,345

 

 

 

 

 

 

 

 

 

 

 

 

Soft Cost

 

 

 

 

 

 

 

 

 

 

Developer Fee

 

$

258,269

 

 

-

 

$

258,269

 

Architects & Engineers

 

 

35,000

 

 

21,185

 

 

13,815

 

Legal

 

 

15,000

 

 

14,613

 

 

387

 

Permits

 

 

10,000

 

 

-

 

 

10,000

 

Materials Testing

 

 

15,000

 

 

-

 

 

15,000

 

Loan Fee of 0.5%

 

 

33,575

 

 

32,511

 

 

1,064

 

Appraisal

 

 

2,500

 

 

2,500

 

 

-

 

Survey

 

 

4,000

 

 

3.953

 

 

47

 

Impact Fees

 

 

85,654

 

 

-

 

 

85,654

 

Contingency

 

 

13,889

 

 

-

 

 

13,889

 

Title Insurance (Loan at time of Closing)

 

 

33,079

 

 

33,168

 

 

(89

)

Construction Interest

 

 

95,689

 

 

-

 

 

95,689

 

Commission on LAF ($5 outside, $4 inside)

 

 

405,000

 

 

112,500

 

 

292,500

 

 

 

 

 

 

 

 

 

 

 

 

Total Soft Cost

 

 

 

 

 

 

 

 

 

 

 

 

$

1,006,655

 

 

220,430

 

 

786,225

 

 

 

 

 

 

 

 

 

 

 

 

Total Loan Budget

 

$

6,715,000

 

$

220,430

 

$

6,494,570

 

34

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