Exhibit 10.1


 


 


 


 


 


DEVELOPMENT AGREEMENT


 


BY AND BETWEEN


 


Behringer
Harvard REIT I, Inc.


 


a
Maryland Corporation


 


(“Owner”)


 


AND


 


Behringer
Development Company LP


 


a
Texas limited partnership


 


(“Developer”)


 


February 29,
2008


 


 





















 


Table of Contents


 


	
   

  	
   

  	
   

  	
   

  	
  Page

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
  PURPOSE

  	
   

  	
  1

  
	
  ARTICLE 2

  	
   

  	
  APPOINTMENT AND DEVELOPMENT

  	
   

  	
  1

  
	
  Section 2.1

  	
   

  	
  Appointment of Developer as Developer

  	
   

  	
  1

  
	
  Section 2.2

  	
   

  	
  Acceptance by Developer

  	
   

  	
  1

  
	
  Section 2.3

  	
   

  	
  Pre-Construction Duties.

  	
   

  	
  2

  
	
  Section 2.4

  	
   

  	
  Project Design

  	
   

  	
  2

  
	
  Section 2.5

  	
   

  	
  Other Services

  	
   

  	
  3

  
	
  Section 2.6

  	
   

  	
  Commencement of Construction

  	
   

  	
  3

  
	
  Section 2.7

  	
   

  	
  Project Administration

  	
   

  	
  4

  
	
  Section 2.8

  	
   

  	
  Limitation on Expenditures

  	
   

  	
  7

  
	
  Section 2.9

  	
   

  	
  Ownership of Information and Materials

  	
   

  	
  8

  
	
  Section 2.10

  	
   

  	
  Payment for Materials

  	
   

  	
  8

  
	
  Section 2.11

  	
   

  	
  Completion

  	
   

  	
  8

  
	
  ARTICLE 3 

  	
   

  	
  COMPENSATION

  	
   

  	
  9

  
	
  Section 3.1

  	
   

  	
  Fee

  	
   

  	
  9

  
	
  Section 3.2

  	
   

  	
  No Other Compensation

  	
   

  	
  10

  
	
  ARTICLE 4

  	
   

  	
  INSURANCE AND INDEMNITY

  	
   

  	
  10

  
	
  Section 4.1

  	
   

  	
  Insurance Requirements

  	
   

  	
  10

  
	
  Section 4.2

  	
   

  	
  Indemnity

  	
   

  	
  10

  
	
  Section 4.3

  	
   

  	
  Non-Recourse Liability

  	
   

  	
  10

  
	
  ARTICLE 5 

  	
   

  	
  TERM AND TERMINATION

  	
   

  	
  10

  
	
  Section 5.1

  	
   

  	
  Term

  	
   

  	
  10

  
	
  Section 5.2

  	
   

  	
  Termination by Owner

  	
   

  	
  11

  
	
  Section 5.3

  	
   

  	
  Termination by Developer

  	
   

  	
  11

  
	
  ARTICLE 6 

  	
   

  	
  DUTIES UPON TERMINATION OR EXPIRATION

  	
   

  	
  12

  
	
  Section 6.1

  	
   

  	
  Developer’s Duties

  	
   

  	
  12

  
	
  ARTICLE 7 

  	
   

  	
  REPRESENTATIONS AND WARRANTIES

  	
   

  	
  12

  
	
  Section 7.1

  	
   

  	
  Developer’s Representations and Warranties

  	
   

  	
  12

  
	
  ARTICLE 8

  	
   

  	
  MISCELLANEOUS PROVISIONS

  	
   

  	
  13

  
	
  Section 8.1

  	
   

  	
  Notices

  	
   

  	
  13

  
	
  Section 8.2

  	
   

  	
  Assignment

  	
   

  	
  13

  
	
  Section 8.3

  	
   

  	
  Lender Requirements

  	
   

  	
  13

  
	
  Section 8.4

  	
   

  	
  Force Majeure Events

  	
   

  	
  14

  
	
  Section 8.5

  	
   

  	
  Governing Law

  	
   

  	
  14

  
	
  Section 8.6

  	
   

  	
  Time of Essence

  	
   

  	
  14

  
	
  Section 8.7

  	
   

  	
  Entireties, Beneficiaries

  	
   

  	
  14

  
	
  Section 8.8

  	
   

  	
  No Agency

  	
   

  	
  14

  
	
  Section 8.9

  	
   

  	
  No Waiver

  	
   

  	
  15

  
	
  Section 8.10

  	
   

  	
  Interpretation

  	
   

  	
  15

  
	
  Section 8.11

  	
   

  	
  Severability

  	
   

  	
  15

  
	
  Section 8.12

  	
   

  	
  Amendments

  	
   

  	
  15

  
	
  Section 8.13

  	
   

  	
  Counterparts

  	
   

  	
  15

  
	
  Section 8.14

  	
   

  	
  Additional Acts

  	
   

  	
  15

  



 


 


i





















 


	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.15

  	
   

  	
  Exhibits

  	
   

  	
  15

  
	
  Section 8.16

  	
   

  	
  Confidentiality

  	
   

  	
  15

  
	
  Section 8.17

  	
   

  	
  Authority of Developer

  	
   

  	
  16

  
	
  Section 8.18

  	
   

  	
  Licenses

  	
   

  	
  16

  
	
  Section 8.19

  	
   

  	
  Non-Discrimination Policy

  	
   

  	
  16

  
	
  Section 8.20

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EXHIBIT A

  	
   

  	
  LEGAL DESCRIPTION

  	
   

  	
   

  
	
  EXHIBIT B

  	
   

  	
  INSURANCE REQUIREMENTS

  	
   

  	
   

  



 


 


ii
















 


DEVELOPMENT
AGREEMENT


 


 This Development Agreement (“Agreement”) is
made to be effective as of the 29th day of February, 2008, by and between
Behringer Harvard REIT I, Inc., a Maryland corporation (“Owner” — Owner
shall include, to the extent applicable, any subsidiary of Behringer Harvard
REIT I, Inc. that may hold title to the Land), and Behringer Development
Company LP, a Texas limited partnership (“Developer”), as follows:


 


ARTICLE
1




PURPOSE


 


A.            Owner is the owner, through Behringer Harvard Operating Partnership
I LP which the Owner controls, of certain property in Houston, Texas commonly
known as Three Eldridge Place located on the land (the “Land”) described in Exhibit A
attached hereto and on which the Owner intends to develop a Class A office
building (the “Building”).


 


B.            Developer is an affiliate of Behringer Advisors LLC, a
Texas limited partnership (the “Advisor”), which is the advisor to Owner under
that certain Fifth Amended and Restated Advisory Management Agreement by and
between Owner and Advisor dated December 29, 2006 (the “Advisory Agreement”).


 


C.            Developer and Owner desire to enter into this Agreement
to provide the terms and conditions upon which Owner will retain Developer to
develop and construct the Building and related improvements (the “Project”) to
be constructed on the Land (herein defined).


 


                NOW THEREFORE, for and in consideration of the
premises, the mutual promises and agreements set forth herein and Ten and
No/100 Dollars ($10.00) and other good and valuable consideration, in hand
paid, the receipt and sufficiency of which is hereby acknowledged, the parties
do hereby agree as follows:


 


ARTICLE
2




APPOINTMENT AND DEVELOPMENT


 


Section 2.1             Appointment of Developer as Developer. Owner
hereby appoints Developer as its independent contractor to perform, and
delegates to Developer the right and obligation to supervise, manage and carry
out, on behalf and for the account of Owner, all planning, development and
construction management services for the Project on the Land, including, but
not limited to those duties set forth in Section 2.5 hereof and, as
otherwise required by, and subject to, the terms and conditions of this
Agreement, as well as the preparation of the Final Development Plan, Final
Development Budget and Final Project Schedule (as each such term is defined
below) and all items related thereto.


 


Section 2.2             Acceptance by Developer.  Developer accepts such appointment and agrees
to perform such services on behalf of and for the account of Owner as required
by, and subject to, the terms and conditions of this Agreement, and agrees to
perform such additional 


 


 

















 


 


duties
and responsibilities as are customarily and reasonably within the scope of such
services and are reasonably designated from time to time by Owner.  Developer agrees to use its best efforts in
the performance of its duties hereunder, which performance in all respects and
at all times shall be carried out to the same extent and with the same degree
of care and quality as the Developer would exercise in the conduct of its own
affairs if the Developer were the owner of the Project. Developer agrees to
apply prudent and reasonable business practices in the performance of its
duties hereunder and shall exercise that degree of skill, competence, quality
and professional care rendered by the leading and most reputable companies
performing the same or similar type services for Class A office buildings
in the Houston, Texas area.  Developer
may subcontract any of its services to any other entity or person with
expertise in the areas so subcontracted. 
Subject to the other provisions of this Agreement, Developer, on behalf
of Owner, shall manage and coordinate the development of the Project in
accordance with the Final Development Plan, Final Development Budget and Final
Project Schedule (as each such term is defined below) in a good and workmanlike
manner and in accordance with the standards of professional care applicable to
such services.


 


Section 2.3             Pre-Construction Duties.  The initial objectives of the parties are to
prepare a general development plan for the Project, cause the preparation of
plans and specifications for the Project, and formulate a budget for the
Project.


 


(a)           Developer has prepared and obtained Owner’s written
approval of a final Development Plan (the “Final Development Plan”) for the
Project.


 


(b)           Developer has submitted to Owner for approval a
development budget (the “Development Budget”) for the Project setting forth the
hard costs, soft costs, allocated land acquisition costs and other expenditures
anticipated to be incurred in connection with developing the Project.  Developer has prepared and obtained Owner’s
written approval of a final Development Budget (the “Final Development Budget”,
together with the Final Development Plan, the “Plan and Budget”) for the
Project.


 


(c)           Developer has made recommendations to Owner with respect
to the size and configuration of the Project, future growth, permanent
financing options, marketing, project execution (architect, contractors,
consultants), special requirements and conditions.


 


(d)           Developer has developed and finalized operating pro forma
income and expense statements for the Project and compute return on investment
and other relative indicators to help determine permanent financing and
ownership strategies.


 


(e)           Developer has prepared and compiled data for the Project,
including without limitation, site information, income and expense statements,
schedules, drawings and renderings. Such items have been provided to Owner’s
Board of Directors (the “Board”).


 


Section 2.4             Project Design.  Developer and Owner have designated Gensler (“Architect”)
as the architect for the Project. 
Developer has negotiated, and Owner has entered into, the contract with
the Architect for the Project, which shall be subject to further review and 


 


2

















 


prior
written approval of Owner to the extent it is amended and departs in any
material respect from the Plan and Budget, as they may be amended.  Developer shall not amend or alter the terms
of the Architect’s contract in any material respect to depart from the Plan and
Budget, as they may be amended, without the prior written approval of
Owner.  Developer shall use diligent
efforts to cause the detailed plans and specifications for the Project to be
prepared in a timely manner and in accordance with the design criteria and the
Plan and Budget for the Project.


 


Section 2.5             Other Services.  Developer shall also provide the following
services during the period prior to commencement of construction of the
Project:


 


(a)           Interview, negotiate with, and engage any other
independent design and development consultants (the “Consultants”) for the
Project consistent with the Plan and Budget pursuant to agreements entered into
by Owner, including, if and as appropriate, space planners, landscape
architects, civil, soils, mechanical, electrical and plumbing engineers, and
acoustical, curtain wall, lighting, art and graphic design consultants.


 


(b)           Manage and coordinate the Consultants regarding the Project
and coordinate Architect’s preparation of conceptual design, and the detailed
plans and specifications therefor, including matters relating to site planning,
engineering, building shell, public space, building height, total area, floor
size and landscape design, traffic and circulation matters.


 


(c)           Obtain all necessary public and private approvals for the
Project, including city planning, applicable building codes, public works, any
applicable architectural review committee, and building permit approvals.


 


Provide Owner with progress reports at least
quarterly detailing (i) the amount of work on the Project that has been
completed during the previous calendar month in relation to the schedule for
the Project (the “Project Schedule”); and (ii) the General Contractor’s
and all subcontractors’ compliance with the Final Development Budget, as well
as any changed conditions regarding cost. 
Any material changes from the Plan and Budget shall be reported to Owner
as soon as possible for approval by the Board. 
In this regard, Owner and Developer agree that (i) Developer shall
cause construction of the Project to commence no later than March 2008.  The Project Schedule and General Contract
(defined below) shall state the number of delay days that are built into the
Project Schedule based on factual weather data for the Houston, Texas area as
provided by the U.S. Weather Bureau.


 


Section 2.6             Commencement of Construction.


 


(a)           The Board, after consultation with Developer, has approved
the general contractor (“General Contractor”) for the Project. Developer shall
negotiate the written agreement with the General Contractor for the Project
within the Plan and Budget and it shall be entered into by the Owner (the “General
Contract”). The Developer may, if it deems appropriate, require the General
Contractor and its major subcontractors to provide performance and payment
bonds in a form satisfactory to Developer as security for their respective
obligations naming Owner and Developer as co-obligees thereon.  Developer shall not amend or alter the terms
of the General Contract or issue or authorize change 


 


 


3

















 


orders in connection therewith that is
materially adverse to the Owner without the prior written approval of Owner.


 


(b)           Developer shall cause the Project to be developed and
constructed in accordance with the Final Development Plan, Final Development
Budget and Project Schedule.  Developer
shall use commercially reasonable efforts to cause the General Contractor to comply
with the Plan and Budget and the Project Schedule.  Any material change to the Final Development
Plan, Final Development Budget and Project Schedule shall be presented by the
Developer to the Board and shall not be effective until it approves such change.


 


(c)           If the development and construction of the Project does
not progress in accordance with the dates required by the Project Schedule, at
Owner’s direction, Developer shall cause General Contractor to speed up the
work by all available means, including utilization of overtime, additional work
crews and alternate material suppliers.


 


(d)           Unless otherwise consented to by Owner, Developer shall
incur no expenditures nor authorize any other person or entity to incur or pay
any expenditures in connection with the development and construction of the
Project that are not provided for in the Final Development Budget, either in
total or in any one accounting category. 
All expenditures shall be charged to the proper account as specified in
the Final Development Budget and no expenditure may be classified or
reclassified for the purpose of avoiding an excess of the budgeted amount of an
accounting category without the written consent of Owner (which consent shall
not be unreasonably withheld).


 


Section 2.7             Project Administration.  During construction of the Project, with due
assistance from the Architect and Consultants, Developer shall exercise general
management of the Project team and in connection therewith shall, without
limiting the generality of the foregoing, perform the following duties in
respect of the Project:


 


(a)           Provide direction to the General Contractor on behalf of
Owner in matters requiring such direction per the terms of the General
Contract.


 


(b)           Make visits to the Project site to inspect the work and
progress of construction with the General Contractor and with the Architect and
other Consultants, which visits shall be of such frequency and duration as
shall be necessary for Developer to carry out its duties under this Agreement,
to guard against defects and deficiencies in the work and to determine that the
work is being performed in accordance with the construction documents, but in
no event shall such visits be less than one (1) day per week during the
construction of the Project. Developer shall prepare and submit to the Advisor
a progress report no less frequently than once each month detailing its
observations.


 


(c)           Developer shall implement all changes in the work or
services approved by Owner. Developer shall establish a changes system to
control the writing of change orders and to record all changes to the
construction documents. For changes initiated by the Owner or Developer with
respect to the General Contractor’s work, Developer shall 


 


 


 


4

















 


prepare written change order proposal
requests, incorporating detailed drawings and specifications prepared or
approved by the Architect where appropriate. 
Developer shall forward the requests to the General Contractor for
preparation of a proposal. For change order requests initiated by the General
Contractor, Developer shall evaluate the requests and, if applicable, provide a
copy to the Architect for comment. Developer shall evaluate proposed change
orders for price, schedule and coordination impact and shall approve them to
the extent they are immaterial or are not reasonably judged by the Developer to
result in the Project going beyond the Plan or Budget or delay the Project
beyond the Project Schedule, or if they are judged by the Developer to result
in the Project going beyond the Plan or Budget or delay the Project beyond the
Project Schedule, the Developer shall forward its recommendations to Owner,
along with the comments of the Architect, for approval by the Board.  For change order proposals so approved,
Developer shall prepare written change orders which shall be executed on behalf
of the Owner and the affected party. If a change is performed by the General
Contractor or a Consultant under a pricing arrangement other than lump sum,
Developer shall make a record of units, work or services or actual costs
incurred, as the case may be.  Developer
shall obtain from the General Contractor and Consultants copies of supporting
documents for all units of work or services or costs incurred. Developer shall
keep a record copy of all signed change orders and shall provide copies to the
Architect and Owner.


 


(d)           Review and evaluate all invoices and payment applications
against actual progress to determine whether the amount claimed as the percent
complete is accurate. Developer shall certify the amounts due the General
Contractor and Consultants in a monthly draw request submitted to the Advisor
no later than the fifth (5th) day of each calendar month after which the draw
request applies, subject to change by the Project Lender (as defined herein).
Developer may certify, modify or withhold certification for payment, and shall
require necessary revisions to such invoices. 
Developer will submit certified Project invoices to the Advisor for
review and approval along with a report summarizing the status of payments to
the General Contractor and the construction costs of the Project.  The Developer’s certification for payment
shall constitute a representation to Owner and the Advisor, based on the
Developer’s determinations at the site and on the data comprising the General
Contractor’s invoices, that, to the best of the Developer’s knowledge,
information and belief, the work has progressed to the point indicated and,
except as stated in the certification for payment, the quality of the work is
in accordance with the construction documents.


 


(e)           Obtain from the General Contractor all required lien
waivers and all other documentation as provided for herein or in the General
Contract, and obtain payment and performance bonds from the General Contractor
covering the performance of all the work described in this Agreement.


 


(f)            Maintain construction cost reporting for the Project,
using Owner’s standard chart of accounts and report format.


 


(g)           On application for final payment by the General
Contractor, cause a final inspection of the work by the Architect to be
performed, assemble and deliver to Owner any written guaranties, releases,
bonds and waivers, instruction books, diagrams and 


 


 


5

















 


charts required by the appropriate contract
documents, and issue an approval for final payment.


 


(h)           Establish a monthly reporting system that includes:


 


(i)            Cost Status - a monthly cost status report for each major
cost item in the Project, employing a format acceptable to the Advisor and
tracking budget, estimate, amount contracted, change orders and estimated cost
to complete.


 


(ii)           Payments Status - a monthly payments status report for
each major cost item in the Project employing a format acceptable to the
Advisor and track payments made and amounts yet to be paid and project monthly
cash requirements and update projections periodically.


 


(iii)          Project Status - a monthly narrative with executive summary
that outlines project progress during reporting periods, and projection for
work to be commenced in the next period.


 


(i)            Review (and cause the appropriate Consultants to review)
all applicable building codes, environmental, zoning and land use laws and
other applicable local, state and federal laws, regulations and ordinances
concerning the development, use and operation of the Project or any portion
thereof. Developer shall make application for and seek to obtain and keep in
full force and effect all necessary governmental approvals and permits, and
shall endeavor to perform such acts as shall be reasonably necessary to effect
compliance by the Owner with all laws, rules, ordinances, statutes, and
regulations of any governmental authority applicable to the Project. Developer
shall seek to obtain any variances or rezoning of such portion of the Land as
are necessary or appropriate to cause the Project to be in compliance with
applicable codes, laws, regulations and ordinances. Such services shall be
performed at Owner’s cost. Developer shall coordinate and establish agreements
with all necessary government agencies and utilities.


 


(j)            Perform such other additional development management
functions as are commercially appropriate to complete the orderly and proper
construction of the Project in accordance with the Plan and Budget and the
Project Schedule.


 


(k)           Arrange for, negotiate and deliver all construction
contracts and any third party construction contracts for tenant improvements as
tenant leases are negotiated by Owner or Owner’s agent.  All contracts may be executed on behalf of
Owner or by Developer so long as upon completion of Developer’s obligations
hereunder, the contracts are assigned to Owner by Developer.  Developer shall have no right to pledge or
hypothecate these contracts.  The
Developer shall make certain that the General Contractor and all of its
subcontractors, laborers and agents are insured by a reputable insurance
company for acts and occurrences relating to the development and construction
of the Project and that the Owner is a named beneficiary of the applicable “occurrence-based”
insurance policy.


 


(l)            Maintain current and accurate records and reports with
regard to the financing, development and progress of the Project.  Such records shall be maintained at 


 


 


6

















 


the Developer’s principal place of business
and shall be made available to the Owner at any reasonable time, during normal
business hours, for review and inspection by the Owner.  Owner shall have the right at its sole cost
and expense to make copies of any books and records applicable to the
development of the Project for Owner’s use and review.


 


(m)          Use commercially reasonable efforts to cause the General
Contractor to comply with all Governmental Requirements (as hereinafter
defined) relating to the Improvements and the Project including, but not
limited to, all applicable environmental laws including the Resource
Conservation and Recovery Act and the Comprehensive Environmental Response
Compensation and Liability Act. As used herein, “Governmental Requirements”
means final land development approval and all other permits and approvals
required to commence and complete construction of the Project in accordance
with the Plans and Specifications and all applicable statutes, ordinances,
regulations, orders, rules, directives or contracts of any federal, state,
municipal or other governmental or quasi-governmental board, agency, authority
or body, including the preparation and submission of all necessary drawings, documents,
information and comments.


 


(n)           Review the General Contractors’ notice of substantial
completion, the Punchlist initially prepare by the General Contractor and the
Punchlist as revised by the Architect. 
Developer shall inspect the work to determine whether substantial
completion has been achieved and to verify the accuracy of the Punchlist.  Developer shall refuse to accept the work as
substantially complete if Developer or Architect determines that the work has
not been substantially completed.  If
Developer or Architect agrees that the work is substantially complete,
Developer will coordinate the preparation by Architect of a certificate of
substantial completion which shall establish the date of substantial completion
of the work and shall fix the time within which the General Contractor shall
complete the items on the Punchlist. 
Developer shall use commercially reasonable efforts to obtain the
General Contractor’s written acceptance of the responsibilities assigned to
General Contractor in such certificate.


 


(o)           If there is a construction loan on the Project, prepare
and submit to the construction lender (the “Project Lender”) draw requests in
accordance with the documents evidencing and securing the construction loan and
otherwise use reasonable efforts to ensure that construction of the Project is
performed in compliance with the construction loan.


 


Section 2.8             Limitation on Expenditures.  Except for expenditures made and obligations
incurred in accordance with the Budget, as amended, or otherwise approved in
writing in advance by the Board, Developer shall not have the power or
authority to make any material expenditure or incur any material expense or
obligation on behalf of Owner in connection with development of the Project,
except in the face of an emergency affecting the safety of persons or property
in connection with the Project, and then only to the extent reasonably
necessary during the period of such emergency. 
In the event of an emergency, Developer shall notify Advisor as soon as
practicable of the existence of such emergency, the action taken by and the
expense or obligation incurred by Developer with respect thereto.


 


 


7

















 


Section 2.9             Ownership of Information and Materials.  Owner shall have the right to use, without
further compensation to Developer, all written data and information generated
by or for Developer in connection with the Project or supplied to Developer by
Owner or Owner’s contractors or agents, and all drawings, plans, books,
records, contracts, agreements and all other documents and writings in its
possession relating to its services or the Project.  Such data and information shall at all times
be the property of Owner, and upon request of Owner, Developer shall deliver to
Owner any such data and information in the possession of under the control of
Developer. Developer agrees, for itself and all persons retained or employed by
Developer in performing its services, to hold in confidence and not to use or
disclose to others any confidential or proprietary information of Owner which
is heretofore or hereafter disclosed to Developer or any such persons and which
is designated by Owner as confidential and proprietary, including but not
limited to any proprietary or confidential data, information, plans, programs,
plants, processes, equipment, costs, operations, tenants or customers which may
come within the knowledge of Developer or any such persons in the performance
of, or as a result of, its services, except where (a) Owner specifically
authorizes Developer to disclose any of the foregoing to others or such
disclosure reasonably results from the performance of Developer’s duties
hereunder, or (b) such written data or information shall have theretofore
been made publicly available by parties other than Developer or any such
persons, or (c) Developer is required by law to disclose such information
(provided that in such case Developer shall give Owner prior notice of the
request for disclosure and shall cooperate with Owner in obtaining a protective
order or other remedy at Owner’s expense).


 


Section 2.10           Payment for Materials.  Owner shall be responsible for paying all
costs and expenses set forth in the Plan and Budget; provided that Developer
shall not approve any amounts to be paid by Owner unless it receives (a) bills
of sale or other evidence to the passage of title of such materials to Owner,
subject only to payment, (b) evidence that the materials are insured under
applicable casualty insurance policies, and (c) evidence that such
materials are securely stored at the Project. 
In the event of any conflict between this Section 2.10 and
the terms and conditions of Owner’s agreements with the Project Lender, the
latter shall control; provided further, that nothing in this Section 2.10
shall in any manner impact any obligation of the Advisor to pay expenses on
behalf of Owner or reimburse Owner for amounts paid by Owner as set forth in
the Advisory Agreement.


 


Section 2.11           Completion.


 


(a)           Developer shall use its reasonable efforts to cause
Completion (as hereinafter defined) of the Project to occur on or before the
final completion date set forth in the Project Schedule.


 


(b)           For purposes of this Agreement, the “Completion” of the
Project shall be deemed to have occurred on such date as all the following
conditions are fulfilled:


 


(i)            The Project has been completed in substantial accordance
with the plans and specifications for the Project (as same have been approved
by Owner) and all Punchlist items have been completed;


 


 


8

















 


(ii)           Owner has received a true and correct copy of an affidavit
of the General Contractor in respect of the Project setting forth the
following;


 


(A)          That the General Contractor has been paid in full for all
work relating to the Project performed through the date of the affidavit;


 


(B)           That the General Contractor has paid all subcontractors,
suppliers and other vendors in full for all amounts due through the date of the
affidavit;


 


(C)           That the work on the Project through the date of the
affidavit has been performed in substantial accordance with the appropriately
approved plans and specifications;


 


(iii)          Owner and any escrowee under any construction escrow
created in relation to the Project have received the General Contractor’s final
lien waiver on a form approved by Owner, which among other things waives and
releases all lien rights and any claims the General Contractor may have with
respect to the Owner or the Project and related improvements;


 


(iv)          Developer has delivered to Owner, at the expense of Owner,
an endorsement to owner’s policy of title insurance insuring against mechanics’
or materialmen’s liens affecting the Project;


 


(v)           Developer has delivered to Owner a sworn certification by
Developer that it is not aware of any matter contained in the General
Contractor’s sworn statement required above that is incorrect;


 


(vi)          Developer has delivered to Owner a Certificate of
Substantial Completion from the Architect on the form promulgated by the AIA in
respect of the Project;


 


(vii)         Developer has delivered to Owner a final certificate of
occupancy for the Project;


 


(viii)        Developer has delivered to Owner binders
with all warranties, guaranties, operating manuals and similar closeout
documents concerning the improvements required by the plans and specifications
for the Project;


 


(ix)           Developer has otherwise complied with the provisions of
this Agreement relative to the Project and is not in default hereunder.


 


ARTICLE
3




COMPENSATION


 


Section 3.1             Fee.  For all services rendered in connection with
the development of the Project pursuant to Article 2, Owner shall pay the
Advisor a fee equal to the fee payable under 


 


9

















 


Section 3.01(b) of the Advisory
Agreement.  Any fee payable under this Section 3.1
shall be paid in the manner, and subject to the limits, prescribed in the
Advisory Agreement.  Any fee payable to
Developer or Advisor hereunder shall constitute full and complete compensation
for the performance of duties, services, efforts or activities in connection
with the development of the Project, whether or not enumerated in Article 2.  Developer shall not be entitled to payment
for, or reimbursement of, any costs or expenses incurred in the performance of
the services under Article 2 or otherwise in connection with the
development of the Project, except as expressly set forth in this Agreement or
the Final Development Budget, all subject to the limits on payments to the
Advisor or its affiliates including the Developer under the Advisory
Agreement.  Notwithstanding any fee paid
hereunder, all costs and expenses of the Project shall be the responsibility of
Owner.


 


Section 3.2             No Other Compensation.  Other than any fee payable under Section 3.1
hereof, Developer shall not be entitled to any compensation under this
Agreement, nor will Developer be entitled to any reimbursement of expenses
except as expressly set forth in this Agreement or the Budget and as limited by
the Advisory Agreement with regard to reimbursement of expenses by Owner to the
Advisor and its affiliates.


 


ARTICLE
4




INSURANCE AND INDEMNITY


 


Section 4.1             Insurance Requirements.  Throughout the term of this Agreement,
insurance with respect to the Project shall be carried and maintained in force
in accordance with the provisions contained in Exhibit B attached
hereto and made a part hereof, with the premiums and other costs and expenses
for such required insurance to be borne as provided in Exhibit B.


 


Section 4.2             Indemnity.  The Owner shall indemnify and hold
harmless the Developer including its officers, directors, partners and
employees to the same extent and subject to the same limits as Owner may
indemnify and hold Advisor and its affiliates harmless under Section 5.01
of the Advisory Agreement.  Developer
shall indemnify Owner to the same extent and subject to the same limits as the
Advisor is required to indemnify the Owner under Section 5.02 of
the Advisory Agreement.


 


Section 4.3             Non-Recourse Liability.  The liability of Owner for the payment of all
sums which may be owed to Developer shall be subject to the same limits and
provisions governing payment by Owner to Advisor and its affiliates under the
Advisory Agreement; provided further that none of Owner’s shareholders,
officers, or directors, shall be personally liable for the payment of any sums
or the performance of any other obligations to Developer.


 


ARTICLE
5




TERM AND TERMINATION


 


Section 5.1             Term.  Developer shall manage the development of the
Project as herein specified until Completion (as hereinafter defined) of the
Project; provided, however, if any remedial work to be performed by the General
Contractor (as hereinafter defined) following the


 


 


10






 












 


Completion
of the Project has not been completed, the term of this Agreement shall be
extended until the date on which any remedial work required to be performed by
the General Contractor following completion of the Project shall be so
performed and accepted by Owner.


 


Section 5.2             Termination by Owner. 
Notwithstanding anything contained in this Agreement to the contrary,
Owner may terminate this Agreement to the same extent as Owner may terminate
the Advisory Agreement and if one or more of the following events shall occur:


 


(a)           the filing by Developer of a voluntary petition in
bankruptcy, the filing by a creditor of an involuntary petition in bankruptcy
which is not dismissed within sixty (60) days, the adjudication of Developer as
bankrupt or insolvent, the filing by Developer of any petition or answer
seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution, assignment for the benefit of creditors, or similar
relief for debtors;


 


(b)           a failure by Developer to pay any amounts or monetary
obligations due and owing to Owner which is not cured within three (3) business
days following receipt of written notice by Owner specifying such default;


 


(c)           failure by Developer to achieve Completion of the Project
within ninety (90) days after the scheduled date of Completion set forth in the
Final Project Schedule;


 


(d)           a good faith determination by Owner that either (i) Developer
is not developing the Project in a manner satisfactory to Owner, or (ii) completion
of the Project is not economically feasible;


 


(e)           The costs of the Project (except those costs incurred with
the written approval of Owner) exceed, or in Owner’s reasonable judgment will
exceed, the amount set forth in the Final Development Budget;


 


(f)            a default by Developer under this Agreement that is not
cured within thirty (30) days following receipt of written notice from Owner
specifying the default; provided, however, that if such default cannot be cured
within such thirty (30) day period through the use of diligent efforts, such
period shall be extended for an additional thirty (30) days; provided, further,
that if Developer promptly commences such cure and thereafter diligently
prosecutes such cure but is unable to complete such cure within the aforesaid
two thirty (30) day periods, Developer shall be afforded an additional thirty
(30) days to complete such cure;


 


(g)           Owner sells the Project, at Owner’s election; and


 


(h)           a failure by Developer to stay on schedule and maintain
steady progress of the Project Schedule.


 


Section 5.3             Termination by Developer. 
Developer may terminate this Agreement only if the Advisor terminates
the Advisory Agreement.


 


11

















 


ARTICLE
6

DUTIES UPON TERMINATION OR EXPIRATION


 


Section 6.1             Developer’s Duties. 
Upon termination or expiration of this Agreement, Developer shall
promptly:


 


(a)           pay over to the Owner all money collected and held for the
account of the Owner pursuant to this Agreement, after deducting any accrued
compensation and reimbursement for its expenses to which it is then entitled;


 


(b)           deliver to the Owner a full accounting, including a
statement showing all payments collected by Developer and a statement of all
money held by Developer, covering the period following the date of the last
accounting furnished to the Owner;


 


(c)           deliver to the Owner all assets and documents of the Owner
then in the custody of the Developer; and


 


(d)           cooperate with the Owner and take all reasonable actions
requested by the Owner to provide an orderly transition.


 


ARTICLE
7

REPRESENTATIONS AND WARRANTIES


 


Section 7.1             Developer’s
Representations and Warranties. 
Developer hereby represents and warrants to Owner as of the date hereof
as follows:


 


(a)           Developer is duly organized, validly existing and in good
standing under the laws of the State of Texas, and is authorized to conduct
business in the State of Texas. 
Developer has full power and authority to execute, deliver and carry out
the terms and provisions of this Agreement and has taken all necessary action,
corporate or otherwise, to authorize the execution, delivery and performance of
this Agreement, and this Agreement constitutes the legal, valid and binding
obligation of Developer enforceable in accordance with its terms, subject to
creditor’s rights, bankruptcy and any other equitable principles. The execution
and delivery of this Agreement by the party signing on behalf of Developer has
been duly authorized.  No order,
permission, consent, approval, license, authorization, registration or validation
of, or filing with, or exemption by, any governmental agency, commission, board
or public authority is required to authorize, or is required in connection
with, the execution, delivery and performance of this Agreement.


 


(b)           The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereunder on the part of
Developer do not and will not conflict with or result in the breach of any
material terms or provisions of, or constitute a default under, or result in
the creation or imposition of any lien, charge, or encumbrance upon any of the
assets of Developer by reason of the terms of any contract, mortgage, 


 


12

















 


lien, lease, agreement, indenture, instrument
or judgment to which Developer is a party or which is or purports to be binding
upon Developer or which otherwise affects Developer, or which otherwise will
not be discharged, assumed or released. 
No action by any federal, state or municipal or other governmental department,
commission, board, bureau or instrumentality is necessary to make this
Agreement a valid instrument binding upon Developer in accordance with its
terms.


 


(c)           There are no attachments, executions, assignments for the
benefit of creditors, receiverships, conservatorships or voluntary or
involuntary proceedings in bankruptcy or pursuant to any other debtor relief
laws contemplated or filed by Developer or pending against Developer.


 


(d)           All authorizations, approvals and consents, if any,
required to be obtained from, and all registrations, declarations and filings,
if any, required to be made with, all governmental authorities and all other
persons or entities to permit Developer to execute and deliver and to perform
its obligations under this Agreement have been obtained or made and all such
authorizations, approvals, consents, registrations, declarations and filings
are in full force and effect, and all terms and conditions contained in or
existing in respect of such authorizations, approvals, consents, registrations,
declarations and filings have, to the extent necessary prior to the date of
execution and delivery hereof and thereof, been duly satisfied and performed.


 


(e)           There are no claims, actions, litigation, judgments,
rulings, suits or proceedings actual, pending, or, to the best of Developer’s
knowledge, threatened, including, without limitation, bankruptcy or other
insolvency proceedings, by or against Developer which, if determined adversely
to Developer, would materially adversely affect Developer’s ability to perform
its obligations under this Agreement.


 


ARTICLE
8

MISCELLANEOUS PROVISIONS


 


Section 8.1             Notices.  All notices given hereunder shall be made in
writing and given to the addressee at the address specified on the signature pages hereof.  Notices may be given by certified mail,
return receipt requested, by hand delivery, or by facsimile transfer (with
receipt confirmation) and shall be effective upon receipt at the address of the
addressee.


 


Section 8.2             Assignment.  Developer may not assign its rights nor
delegate its duties hereunder without the prior written consent of Owner.  Developer’s assignment in contravention of
this Section shall be null and void. 
Any permitted assignment by Developer shall not relieve Developer of any
of its obligations hereunder.  Owner
shall have the right to assign its rights and duties under this Agreement
without the consent of Developer.


 


Section 8.3             Lender
Requirements.  In the
event that a Project Lender requests that Developer execute a document in connection
with a loan to Owner, Developer will respond to such request promptly and will
not unreasonably withhold its consent to the execution of such document.
Without limiting the generality of the preceding sentence, Developer agrees
that it 


 


13

















 


will
execute and deliver the following documents within five (5) days after
request therefor: (a) an agreement that a Project Lender may terminate
this Agreement if a default occurs in respect of the loan secured by the
Project; (b) an estoppel certificate certifying that this Agreement is in
full force and effect and containing such other certifications as may be
reasonably requested; (c) an agreement subordinating this Agreement and
the fees payable to Developer hereunder 
to any mortgage or deed or trust held by a Project Lender; and (d) confirmation
of the waiver by Developer of any right to assert a lien against the
Project.  Developer shall use reasonable
care to avoid any act or omission that, in the performance of its duties
hereunder, shall in any way conflict with the terms of any mortgage documents
in respect of the Project, provided that Developer has been furnished with
copies of such mortgage documents. In addition, Developer agrees to conform its
general policies and procedures to any commercially reasonable requirements of
any Project Lender providing financing for the acquisition or construction of
the Project.


 


Section 8.4             Force
Majeure Events.  Except
for obligations regarding the payment of money and the maintenance of
insurance, whenever a period of time is herein prescribed for action to be
taken by Owner or Developer, neither party shall be liable or responsible for,
and there shall be excluded from the computation for any such period of time, any
delays due to Force Majeure Events.  For
purposes hereof, “Force Majeure Events” shall consist of abnormal weather
patterns that affect critical path construction, acts (or the failure to act)
by the other party to this Agreement, unforeseeable subsurface conditions,
uncontrollable delay in issuance of permits, changes in governmental laws,
enemy or hostile governmental action, civil commotion, and fire or other
casualty or any other event or circumstance outside of the control of the party
seeking the benefit of these force majeure provisions.


 


Section 8.5             Governing
Law.  This Agreement shall
be governed and construed in accordance with the laws of the State of Texas.


 


Section 8.6             Time of
Essence.  Time is of the
essence of this Agreement.


 


Section 8.7             Entireties,
Beneficiaries.  This
Agreement represents the entire Agreement between Owner and Developer with
regard to the development of the Project and all prior agreements are
superseded hereby.  This Agreement is for
the sole benefit of Owner and Developer and no other party is benefited
hereby.  This Agreement creates
contractual rights only between Owner and Developer, and Developer has no lien
rights in or to the Project.


 


Section 8.8             No
Agency.  Developer and its
agents shall all act as independent contractors in respect of Owner with regard
to this Agreement.  All personnel and
staff of Developer shall be and remain employees or agents of, or independent
contractors with, Developer and not of or with Owner.  Developer shall at all times represent to third
parties that the relationship of Developer to Owner, with regard to Developer’s
duties under this Agreement, is that of independent contractor, and Developer
and Owner shall not represent to any party that Developer and Owner are
partners, co-venturers or principal and agent, or have any other relationship
other than that of independent contractors with regard to this Agreement.  Developer’s authority to act on behalf of
Owner is strictly limited to that expressly delegated herein.  Developer represents and warrants that (a) it
has all the requisite licenses and other approvals required by law to carry out
its duties hereunder; or (b) it will affect the services 


 


14

















 


requiring
such licenses through duly licensed agents and subcontractors who are
affiliates of Developer that have all requisite licenses and authority to carry
out such services.


 


Section 8.9             No
Waiver.  The failure of
either party to seek redress for violation, or to insist upon the strict performance
of any covenant, agreement, provision or condition of this Agreement shall not
constitute a waiver of such strict performance and the parties shall have all
remedies provided in this Agreement and by applicable law with respect to any
subsequent act which would he originally constituted a violation.


 


Section 8.10           Interpretation.  Within this Agreement, words of any gender
shall be held and construed to include any other gender, and words in the
singular number shall be held and construed to include the plural, unless the
context otherwise requires.  The
paragraph headings used in this Agreement are intended for reference purposes
only and shall not be considered in the interpretation of the terms and
conditions of this Agreement.


 


Section 8.11           Severability.  If one or more of the provisions of this
Agreement or any application of this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions of this Agreement and any other application of such
provisions shall in no way be affected or impaired.


 


Section 8.12           Amendments.  This Agreement may be amended, from time to
time, only with the written consent of both Owner and Developer.


 


Section 8.13           Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and said counterparts
shall constitute but one and the same instrument.


 


Section 8.14           Additional Acts.  In connection with this Agreement, as well as
all transactions contemplated by this Agreement, Owner and Developer each agree
to execute and deliver such additional documents and instruments and take all
such necessary action and perform such additional acts as may be necessary or
appropriate to effectuate, carry out and perform all of the terms, provisions
and conditions of this Agreement and all such transactions; provided, however,
this Agreement may be modified only in accordance with the terms hereof.


 


Section 8.15           Exhibits.  All exhibits referred to herein shall be considered
a part of this Agreement as fully as if and with the same force and effect as
if such exhibit had been included herein in full.


 


Section 8.16           Confidentiality.  Developer will keep confidential (a) the
terms of this Agreement, and (b) all written and verbal negotiations and
communications with Owner in connection with this Agreement (collectively, “Confidential
Information”), and Developer will not disclose or make available any
Confidential Information to any other person or entity, except to Developer’s
accountants, brokers, attorneys, and other agents for the purpose of providing
advice to Developer in connection with the Confidential Information and who
agree to preserve the confidential nature of the Confidential Information.


 


15

















 


Section 8.17           Authority of Developer.  Developer shall have no right or authority,
express or implied, to commit or otherwise obligate Owner in any manner
whatsoever except to the extent specifically provided herein or as otherwise
authorized in writing by Owner.


 


Section 8.18           Licenses.  Developer shall, at its own expense, qualify
to do business and obtain and maintain such licenses as may be required for the
performance by Developer of its services.


 


Section 8.19           Non-Discrimination Policy.  Developer agrees that it will not deny the
benefits of this Agreement to any person, nor discriminate against any employee
or applicant for employment because of race, color, religion, sex, national
origin, age or any other applicable protected classification.  Developer will take affirmative action to
insure that the evaluation and treatment of employees ate free from such
discrimination.  Developer, unless exempt,
further agrees to abide by the terms of all applicable Federal, state and local
non-discrimination provisions, including but not limited to 41 CFR Sec. 60-1.4,
such non-discrimination provisions being incorporated herein by reference.  Developer shall include this
non-discrimination clause in all contracts and subcontracts to perform work
under this Agreement and will notify all labor organizations with which it has
a collective bargaining agreements of the obligations hereunder.


 


Section 8.20           Waiver of Jury Trial.  Developer and Owner each hereby waives trial
by jury in any action arising out of matters related to this Agreement, which
waiver is informed and voluntary.


 


[Signature
page follows.]


 


16

















 


                                                Executed effective as
of the date written above.


 


	
  OWNER:

  	
   

  	
  BEHRINGER
  HARVARD REIT I, INC.,

  
	
   

  	
   

  	
  a
  Maryland corporation

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Gerald
  J. Reihsen, III  

  
	
   

  	
   

  	
  Executive
  Vice President — Corporate

  
	
   

  	
   

  	
  Development
  and Legal and Secretary

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  15601
  Dallas Parkway

  
	
   

  	
   

  	
  Suite 600  

  
	
   

  	
   

  	
  Addison,
  Texas 75001

  
	
   

  	
   

  	
   

  
	
  DEVELOPER:

  	
   

  	
  BEHRINGER
  DEVELOPMENT COMPANY LP,

  
	
   

  	
   

  	
  a
  Texas limited partnership

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  BHD,
  LLC,

  
	
   

  	
   

  	
  its
  general partner

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
  /s/
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Gerald
  J. Reihsen, III  

  
	
   

  	
   

  	
  Executive
  Vice President — Corporate  

  
	
   

  	
   

  	
  Development
  and Legal and Secretary

  
	
   

  	
   

  	
   

  
	
  Address:

  	
   

  	
  15601
  Dallas Parkway

  
	
   

  	
   

  	
  Suite 600

  
	
   

  	
   

  	
  Addison,
  Texas 75001

  



 


17
















 


 


 


	
  EXHIBIT A

  
	
   

  
	
  LEGAL DESCRIPTION

  
	
   

  
	
  [ATTACHED]

  



 


 


 


Exhibit A
















 


TRACT TWO


METES AND BOUNDS DESCRIPTION


OF 3.7778 ACRES OF LAND OUT OF


THORNWOOD ONE, RESTRICTED RESERVE “A”


VOLUME 313, PAGE 13, H.C.M.R. AND


THORNWOOD ONE, RESTRICTED RESERVE “C”


VOLUME 332, PAGE 148, H.C.M.R.


OUT OF THE JOEL WHEATON SURVEY, A—80


HOUSTON, HARRIS COUNTY, TEXAS


 


All
that certain 3.7778 acres (184,560 square feet) of land being a portion of that
certain called 10.2164 acre tract described in the deed dated December 5,
2005, from SV Eldridge, L.P. to TR Eldridge Place Corp., filed for record under
Clerk File No. X247398, Film Code No. 579-35-1004, of the Official
Public Records of Real Property of Harris County, Texas and also being out of
Thornwood one, Restricted Reserve “C”, according to the plot thereof recorded
in Volume 332, Page 148, of the Map Records of Harris County, Texas, out
of the Joel Wheaton Survey, A—80, Houston, Harris County, Texas and being more
particularly described, by metes and bounds as follows:


 


Commencing
at a found 5/8” iron rod with cap marking the northeast corner of Thornwood, Section Two,
according to the plot thereof recorded in Volume 143, Page 1, of the Map
Records of Harris County, Texas and the northwest corner of said Thornwood One,
Restricted Reserve “A”, said rod located in the south right-of-way line of Turkey
Creek Drive (60’ Wide); Thence, S 01’ 55’ 14” E — 555.34’, with the east line
of said Thornwood, Section Two, to a set 5/8” iron rod with cap marking
the POINT OF BEGINNING of the herein described tract;


 


THENCE,
S 01’ 55’ 14” E — 858.66’, continuing with said east line of Thornwood, Section Two,
to a set 5/8” iron rod with cap located in the west right-of-way line of
Eldridge Drive (100’ Wide) and being a point on a curve to the right having a
central angle of 05’ 51’ 50”, a radius of 1,950.00’ and chord bearing of N 26’
18’ 54” E — 199.48’, the center of said curve being located on a radial line
bearing S 66’ 37’ 01” E, from said point;


 


THENCE,
with said west right-of-way line of Eldridge Drive and said curve to the right
for an arc distance of 199.57’, to a found 5/8” iron rod with cap marking the
Point of Tangency;


 


THENCE,
N 29’ 14’ 49” E — 147.40’, continuing with said west right-of-way line of
Eldridge Drive, to a found 1” iron pipe marking the southeast corner of that
certain called 0.4632 acre tract described in the deed dated August 23,
1984, from BDC, Ltd. to RepublicBank Eldridge, National Association, filed for
record under Clerk File No. J665607, Film Code No. 092-89-0570, of
the Official Public Records of Real Property of Harris County, Texas;


 


THENCE,
with the south, west and north lines of said 0.4632 acre tract the following
courses:


 


	
  S

  	
  88’
  04’ 46”

  	
  W

  	
  —

  	
  39.66’,
  to a point for corner;

  
	
  S

  	
  01’
  55’ 14”

  	
  E

  	
  —

  	
  6.00’,
  to a point for corner;

  
	
  N

  	
  88’
  04’ 48”

  	
  E

  	
  —

  	
  1.00’,
  to a point for corner;

  
	
  S

  	
  01’
  55’14”

  	
  E

  	
  —

  	
  4.00’,
  to a point for corner;

  
	
  S

  	
  88’
  04’ 46”

  	
  W

  	
  —

  	
  4.00’,
  to a point for corner;

  
	
  N

  	
  01’
  55’14”

  	
  W

  	
  —

  	
  1.00’,
  to a point for corner;

  
	
  S

  	
  88’
  04’ 46”

  	
  W

  	
  —

  	
  14.00’,
  to a point for corner;

  
	
  S

  	
  01’
  55’ 14”

  	
  E

  	
  —

  	
  1.00’,
  to a point for corner;

  
	
  S

  	
  88’
  04’ 46”

  	
  W

  	
  —

  	
  4.00’,
  to a point for corner;

  
	
  N

  	
  01’
  55’ 14”

  	
  W

  	
  —

  	
  4.00’,
  to a point for corner;

  
	
  N

  	
  88’
  04’ 48”

  	
  E

  	
  —

  	
  1.00’,.
  to a point for corner;

  
	
  N

  	
  01’
  55’ 14”

  	
  W

  	
  —

  	
  6.00’,
  to a point for corner;

  
	
  S

  	
  88’
  04’ 46”

  	
  W

  	
  —

  	
  46.00’,
  to a found 5/8” iron rod with cap for corner;

  
	
  N

  	
  01’
  55’ 14”

  	
  W

  	
  —

  	
  137.00’to
  a found 5/8” iron rod with cap for corner;

  
	
  N

  	
  88’
  04’ 46”

  	
  E

  	
  —

  	
  45.00’,
  to a point for corner;

  
	
  N

  	
  01’
  55’ 14”

  	
  W

  	
  —

  	
  1.00’,
  to a point for corner;

  
	
  N

  	
  88’
  04’ 46”

  	
  E

  	
  —

  	
  4.00’,
  to a point for corner;

  
	
  S

  	
  01’
  55’ 14”

  	
  E

  	
  —

  	
  1.00’,
  to a point for corner

  
	
  N

  	
  88’
  04’ 48”

  	
  E

  	
  —

  	
  14.00’,
  to a point for corner;

  
	
  N

  	
  01’
  55’ 14”

  	
  W

  	
  —

  	
  1.00’,
  to a point for corner;

  
	
  N

  	
  88’
  04’ 46”

  	
  E

  	
  —

  	
  4.00’,
  to a point for corner;

  
	
  S

  	
  01’
  55’ 14”

  	
  E

  	
  —

  	
  1.00’,
  to a point for corner;

  



 


 


THENCE,
N 88’ 04’ 46” E — 116.68’, continuing with said north line of the 0.4632 acre
tract, to a found 5/8” iron rod with cap located in the aforementioned west
right-of-way line of Eldridge Drive and marking a point on a curve to the left
having a central angle of 04’ 40’ 08”, a radius of 1,850.00’ and chord bearing
of N 23’ 04’ 38” E — 150.71’, the center of said curve being located on a
radial line bearing N 64’ 35’ 18” W, from said point;


 


THENCE,
with said west right-of-way line of Eldridge Drive and said curve to the left
for an arc distance of 150.75’, to a found 12” iron rod with cap marking the
Point of Tangency.


 


THENCE,
N 20’ 44’ 34” E — 107.20’, continuing with said west right-of-way line of
Eldridge Drive, to a found 1/2” iron rod with cap marking the Point of
Curvature of a curve to the left having a central angle of 03’ 47’ 09”, a
radius 1,850,00’ and chord bearing N 18’ 50’ 58” E — 122.22’;


 


THENCE,
continuing with said west right-of-way line of Eldridge Drive and said curve to
the left for an arc distance of 122.24’, to a found “X” in concrete for corner;


 


THENCE,
S 88’ 04’ 46” W — 157.01’, to a found 5/8” iron rod with cap for corner;


 


THENCE,
N 01’ 55’ 14” W — 70.00’, to a set 5/8” iron rod with cap for corner;


 


THENCE,
S 88’ 04’ 46” W — 240.00’, to the POINT OF BEGINNING of the herein described
tract and containing 3.7778 acres (164, 560 square feet), more or less.


 


 
















 


EXHIBIT
B


 


INSURANCE
REQUIREMENTS


 


I.              Owner’s Insurance
Requirements.  Throughout the term of
this Agreement, Owner shall carry or cause to be carried and maintained in
force insurance described in paragraphs A and B below. The cost of such
policies shall be at the sole cost and expense of Owner.


 


                A.            Builder’s Risk.  An “All Risk” builder’s risk policy including
coverage for collapse, flood, earthquake and installation risks written on a
completed value basis in an amount not less than total replacement value of the
Project under construction (less the value of such portions of the Project as
are uninsurable under the policy, i.e., site preparation, abrading, paving,
parking lots, etc., excepting, however, foundations and other undersurface
installations subject to collapse or damage by other insured perils)


 


                B.            Commercial General Liability.  This policy shall be written at a total limit
of no less than $2,000,000 per occurrence and $5,000,000 aggregate.


 


                C.            Automobile Liability.  This policy shall be written at a limit of no
less than $1,000,000 combined single limit.


 


II.            Developer’s
Insurance Requirements.  During the term
of this Agreement, Developer agrees to carry and maintain in force, at
Developer’s sole cost and expense:


 


                A.            Worker’s Compensation and Employer’s
Liability Insurance.  Statutory worker’s
compensation and Employer’s Liability with a limit of no less than $1,000,000.


 


                B.            Automobile Liability.  This policy shall be written at a limit of no
less than $1,000,000 combined single limit.


 


                C.            Commercial General and
Products/Completed Operations Liability. 
This policy shall be written at a total limit of no less than $2,000,000
per occurrence and $5,000,000 aggregate. Such insurance shall not exclude residential
construction.


 


III.           Insurance
Requirements for Architects and Engineers. 
Developer shall require any architect or engineering firm employed by
Owner to carry Professional Liability Insurance in an amount not less than
$1,000,000 per occurrence.


 


IV.           Insurance
Requirements for All Contractors and Third Party Services.  Every contractor and all parties furnishing
service to Owner and/or Developer must provide Owner and Developer prior to
commencing work and at each renewal of such insurance hereafter, evidence of
the following minimum insurance requirements. In no way do these minimum
requirements limit the liability assumed elsewhere in this Development
Agreement.  Owner and/or Developer
reserve the right to purchase construction wrap-up insurance to replace the
General Liability requirement listed in IV. B. and will notify all contractors
if such purchase is made.


 


 


 


Exhibit B

















 


                A.            Worker’s Compensation and Employers
Liability.  Statutory worker’s
compensation and Employer’s Liability with a limit of no less than $1,000,000.


 


                B.            Commercial General and
Products/Completed Operations Liability with the following minimum limits of
liability: (i) Bodily Injury $1,000,000 each occurrence, $1,000,000 per
project aggregate; (ii) Property Damage $1,000,000 each occurrence,
$1,000,000 per project aggregate; (iii) Personal and Advertising Injury
$1,000,000 each occurrence, $1,000,000 aggregate.  Such insurance shall not exclude residential
construction or explosion, collapse, underground resources.  Contractor/subcontractor shall maintain such
insurance for ten (10) years following completion of the Project


 


                C.            Comprehensive Automobile Liability,
with the following limits of Liability: (i) Bodily Injury $1,000,000 each
person, $1,000,000 each occurrence; (ii) Property damage $1,000,000 each
occurrence.


 


                D.            Umbrella Liability, with limits of
not less than $2,000,000 per occurrence/$2,000,000 aggregate and shall be on a
follow-form basis, without exclusion for residential construction or explosion,
collapse, underground resources. 
Contractor/subcontractor shall maintain such insurance for ten (10) years
following completion of the Project.


 


V.            Additional
Requirements.


 


                A.            The General Contractor shall require
the same minimum insurance requirements, as listed above, of all
subcontractors, and these subcontractors shall also comply with the additional
requirements listed below.


 


                B.            All insurance coverages required as
herein set forth, shall be at the sole cost and expense of contractor, subcontractor,
or those providing third party services, and deductibles shall be assumed by,
for the account of, and at their sole risk.


 


                C.            Except where prohibited by law, all
insurance policies shall contain provisions that the insurance companies waive
the rights of recovery or subrogation against the Owner and Developer, their
agents, servants, invitees, employees, tenants, affiliated companies,
contractors, subcontractors, and their insurers.


 


                D.            Developer shall be completely
responsible for reporting to the appropriate insurance carriers and/or their
agents all accidents involving injury to employees of any contractor, any
member of the public or property damages, provided that Developer receives a
report from the General Contractor regarding such accident or otherwise becomes
aware of such accident.


 


                E.             All insurance coverages required as
herein set forth except Worker’s Compensation shall name Owner and Developer as
additional insured and shall not be cancelled or materially changed without
thirty (30) days prior written notice to Owner and Developer.


 


                F.             Developer shall provide Owner with
certificates of insurance or other satisfactory documentation which evidences
that the insurance required under this Agreement is in full force and effect at
all times.


 


 


Exhibit B