Exhibit 10.18



                Development Management Agreement


                         By and Between

             COMMERCIAL LAKEWAY LIMITED PARTNERSHIP,
                            as Owner

                               And

                    STRATUS PROPERTIES INC.,
                     as Development Manager





               __________________________________



                           Dated as of


                        January 26, 2001


               __________________________________




                Development Management Agreement


     THIS DEVELOPMENT MANAGEMENT AGREEMENT (this "Agreement")  is
made  effective  as  of  the  26th  day  of  January,  2001  (the
"Effective  Date"),  by  and between COMMERCIAL  LAKEWAY  LIMITED
PARTNERSHIP,  a  Delaware limited partnership, as  Owner  of  the
hereinafter-defined Property (the "Owner") and STRATUS PROPERTIES
INC.,  a  Delaware  corporation,  as  development  manager   (the
"Development Manager").

                            RECITALS

     A.    Owner is the owner and holder of fee title in  and  to
that certain property located in Travis County, Texas, containing
approximately 552 acres of land and known as the Vista  Royale  -
Non-Commercial Tract, the Vista Royale - Commercial Tract and the
Spillman  Tract,  as legally and more particularly  described  on
Exhibit  "A" attached  hereto and incorporated  herein  by  this
reference  (the "Property"),

     B.    Owner  desires to engage the services  of  Development
Manager  for  the purposes of developing, managing,  maintaining,
operating and selling the Property.

     C.    Development Manager desires to accept such  engagement
and  to  perform  such  services, and  acknowledges  that  it  is
familiar with Owner's current Business Plan (hereinafter defined)
for the Property and the Development Budget (hereinafter defined)
approved  by  Owner  for the Property as  of  the  date  of  this
Agreement.

     NOW, THEREFORE, in consideration of the mutual covenants and
agreements  set forth in this Agreement, and for other  good  and
valuable  consideration, the receipt and sufficiency of which  is
hereby acknowledged, the Partners hereby agree as follows:

                            ARTICLE 1
                           Definitions

     1.1   Definitions.  As used in this Agreement, the following
terms shall have the following meanings:

     "Affiliate"  shall  mean,  when used  with  reference  to  a
specified  Person, any other Person that directly or  indirectly,
through  one or more intermediaries, controls, is controlled  by,
or  is under common control with, the specified Person.  As  used
in  this  definition of Affiliate, the term "Control"  means  the
possession,  directly or indirectly, of the power  to  direct  or
cause  the direction of the management and policies of a  Person,
whether  through ownership of voting securities, by contract,  or
otherwise.

     "Agreement"shall have the meaning set forth in the Preamble
to this Agreement.

     "Business  Day"  shall mean any day other than  a  Saturday,
Sunday,  or  holiday  on which national banking  associations  or
other  financial institutions in the States of New York or  Texas
are authorized or required to be closed.

     "Business  Plan"  shall mean the business plan  prepared  by
Development  Manager and submitted to Owner, within fifteen  (15)
days  after the Effective Date, for Owner's approval, in  Owner's
sole discretion, and subsequently attached hereto as Exhibit  "B"
and  incorporated herein, and as may be amended from time to time
in accordance with the provisions hereof.

     "Cash  Flow"  for  any period shall mean any  and  all  cash
revenues  generated  from the ownership, sale,  lease  and  other
operation  of  the  Property by Owner or Development  Manager  on
behalf  of  Owner  and any and all capital transaction  proceeds,
minus  the sum of (i) any operating and capital expenses incurred
in   connection  with  the  development,  operation,  management,
maintenance  and  sale  of all or any portion  of  the  Property,
including  without  limitation  any  payments  of  interest   and
principal  required  by  the lender  of  any  Project  Loan,  and
(ii)  reasonable reserve(s) for necessary or desirable  operating
and  capital expenses of the Property that are anticipated to  be
incurred  or to become due and payable within six (6)  months  as
Development Manager, in the exercise of its reasonable discretion
and as is consistent with the Development Budget and the Business
Plan, shall determine and as shall be approved by Owner.  General
overhead  expenses of Owner which are allocable to  the  Property
and  other  properties  owned or controlled  by  Owner  shall  be
allocated  to the Property for purposes of determining Cash  Flow
on a pro rata basis as reasonably determined by Owner.

     "Completion" shall mean lien-free completion (or substantial
completion  if adequate reserves in amounts acceptable  to  Owner
have been fully funded), of all pre-development, development  and
construction  activities  described  in  the  Business  Plan   in
accordance  with the terms thereof, as evidenced  by  appropriate
and  necessary governmental inspections, approvals, licenses  and
permits,  certificate(s)  of  completion  certified  by   project
architect(s)  and  lien  waivers obtained  from  all  architects,
engineers,   general   contractors,  subcontractors,   tradesmen,
materialmen  and  other suppliers of services  and  materials  in
connection with the development of the Property.

     "Development  Budget"  shall mean  the  budget  prepared  by
Development  Manager and submitted to Owner, within fifteen  (15)
days  after the Effective Date, for Owner's approval, in  Owner's
sole discretion, and subsequently attached hereto as Exhibit  "C"
and  incorporated herein, as may be amended from time to time  in
accordance with the provisions hereof.

     "Development  Manager" shall have the meaning set  forth  in
the Preamble to this Agreement.

     "Development Manager Cash Consideration"shall mean the cash
consideration  to  be paid by Development Manager  to  Owner,  in
immediately available funds, in the amount of Two Million Dollars
($2,000.000.00),  on  or  before the Effective  Date  hereof,  in
consideration  for the contractual rights and privileges  granted
to Development Manager herein.

     "Development Manager Representative" shall have the  meaning
set forth in Section 2.2.

     "Distribution Period" shall mean (i) the period beginning on
the  date  of  Completion and payment in full of  all  principal,
interest  and other charges payable under the Project Loans,  and
ending  on  the  last  day of the calendar month  in  which  such
Completion and payment has occurred, and (ii) each calendar month
thereafter.

     "Effective  Date" shall have the meaning set  forth  in  the
preamble to this Agreement.

     "Major  Decision"  means any decision with  respect  to  (1)
approval  of  the Business Plan, (2) approval of the  Development
Budget,  (3)  approval  of  all  architects,  engineers,   design
consultants,  general  contractors,  subcontractors   and   other
professionals  necessary  or desirable  in  connection  with  the
planning, development and construction of any improvements on any
portion   of  the  Property,  (4)  approval  of  the  plans   and
specifications  for  any improvements to be  constructed  on  the
Property,  and  the subsequent approval of all change  orders  or
amendments  thereto the cost of which is reasonably estimated  to
exceed the lesser of (a) ten percent (10%) of the annual budgeted
amount for any such improvements or (b) $100,000, (5) approval of
any  financing  or  refinancing, whether  secured  or  unsecured,
including without limitation the Project Loans, unless previously
approved in the Business Plan or Development Budget, (6) approval
of  acquisition of any additional property, (7) approval  of  any
sale, exchange or other disposition of all or any portion of  the
Property,  (8)  undertaking or consenting  to  any  environmental
testing  or  inspections  in, on, under  or  in  respect  of  the
Property,  (9) entering into any consent decrees or acknowledging
any liability (particularly environmental liability) with respect
to the Property, (8) creating, establishing or changing any trade
name  or other fictitious name with respect to the Property, (10)
approval  of  any contract for services or materials rendered  in
connection   with   the   planning,  development,   construction,
management, maintenance, repair and operation of any  portion  of
the Property, the value of which exceeds or is budgeted to exceed
$5,000.00,  and modifying, amending, supplementing or terminating
any contract or agreement entered into with the consent of Owner,
unless the failure to do so would conflict with the Business Plan
or  Development Budget, (11) approving any site plans, site  plan
amendments, proffers, special exceptions, permits or  other  land
use  matters  which  are inconsistent in  any  respect  with  the
Business Plan, (12) instituting any legal action with respect  to
the  Property,  settling any legal action  with  respect  to  the
Property  or confessing judgment against Owner or otherwise  with
respect  to  the  Property,  (13)  approving  any  settlement  of
insurance claims or condemnation awards, and (14) approval of any
amendments to this Agreement.  Any and all Major Decisions  shall
require  the approval of Owner, which may be granted,  denied  or
conditioned  as determined by Owner in Owner's sole and  absolute
discretion.

     "Owner" shall mean COMMERCIAL LAKEWAY LIMITED PARTNERSHIP, a
Delaware  limited partnership, together with its  successors  and
assigns.

     "Owner  Account"shall have the meaning set forth in Section
3.7(a).

     "Owner  Representative" shall have the meaning set forth  in
Section 2.3.

     "Owner's Residual Value"shall mean Five Million One Hundred
Thousand  Dollars  ($5,100,000.00),  as  of  the  Effective  Date
hereof.

     "Person"  shall  mean  an  individual,  partnership,   joint
venture, limited partnership, limited liability company,  foreign
limited   liability  company,  trust,  business  trust,   estate,
corporation,   custodian,   trustee,   executor,   administrator,
nominee,  association, cooperative or entity in a  representative
capacity.

     "Property  Account" shall have the  meaning  set  forth  in
Section 3.7(b).

     "Project Loans"shall mean the Project Mortgage Loan and the
Project Unsecured Loan.

     "Project  Mortgage  Loan"shall mean that certain  revolving
line of credit loan obtained by Development Manager from Comerica
Bank  to  Owner, as borrower, solely for the purpose of financing
the  costs of development, operation, management, maintenance and
sale of all or any portion of the Property.  The Project Mortgage
Loan  shall  be in the maximum principal amount of  Four  Million
Dollars  ($4,000,000.00), with interest on the principal  balance
from  time to time outstanding at a rate not to exceed LIBOR plus
250  basis  points,  and an upfront loan commitment  fee  not  to
exceed  Twenty Thousand Dollars ($20,000.00).  The terms  of  the
Project  Mortgage  Loan  and all note(s), documents,  agreements,
instruments  and  certificates executed in  connection  therewith
shall  be a Major Decision requiring the approval of Owner, which
may  be granted, denied or conditioned as determined by Owner  in
Owner's sole and absolute discretion.  The Project Mortgage  Loan
shall  be non-recourse in all respects to Owner, and any recourse
obligations   or   liabilities,  including   without   limitation
environmental  liabilities, shall be  guaranteed  by  Development
Manager; provided, however, that the Project Mortgage Loan may be
secured,  among  other things, by a first lien  mortgage  on  the
Property.   The Project Mortgage Loan documents may  provide  (if
permitted  by  the  lender)  that Development  Manager  shall  be
subrogated  to the rights of the lender in the event and  to  the
extent  that  Development Manager pays the Project Mortgage  Loan
pursuant to the terms of any such guaranty, and may enforce  such
rights  against  Owner, subject to the rights of the  lender,  as
security  for  repayment  of  sums  so  advanced  by  Development
Manager.

     "Project   Team"  shall  have  the  meaning  set  forth   in
Section 2.2.

     "Project  Unsecured Loan"shall mean an unsecured loan  made
by  Development  Manager  to  Owner solely  for  the  purpose  of
financing   the  costs  of  development,  operation,  management,
maintenance  and sale of all or any portion of the  Property,  as
more particularly provided in Section 3.8(a) hereof.  The Project
Unsecured Loan shall be in a maximum principal amount approved by
Owner.   Interest on the outstanding principal balance from  time
to time outstanding shall accrue but not be compounded, at a rate
of  interest equal to the "Prime Rate"(defined below), and shall
be  payable with principal at the earlier of (i) maturity of  the
Project Unsecured Loan on December 31, 2005, or (ii) the date  of
termination  of  the Term of this Agreement.  The  terms  of  the
Project  Unsecured  Loan and all note(s), documents,  agreements,
instruments  and  certificates executed in  connection  therewith
shall  be  mutually  and  reasonably  acceptable  to  Development
Manager  and Owner.  The Project Unsecured Loan shall be recourse
only to Owner and the assets of Owner (and not to Owner's general
and  limited  partners  and the partners, members,  shareholders,
officers, directors and employees of Owner's partners), and shall
be subordinate in all respects to the Project Mortgage Loan.  For
purposes  hereof, the term "Prime Rate"shall mean  the  rate  of
interest  published from time to time in The Wall Street  Journal
as  the  "Prime Rate"; if more than one "Prime Rate"is published
in  The  Wall  Street  Journal for a day, the  "Prime  Rate" for
purposes  hereof shall be the average of such rates; if The  Wall
Street  Journal ceases to publish a "Prime Rate", then the "Prime
Rate" for  purposes hereof shall be a comparable  interest  rate
index  mutually and reasonably acceptable to Development  Manager
and Owner.

     "Property" shall have the meaning set forth in the  Recitals
to   this   Agreement.   Unless  the  context  clearly  indicates
otherwise, the term "Property"shall mean "all or any portion  of
the Property".

     "Single Purchaser Transaction"shall mean any transaction or
series of transactions pursuant to one or more contracts of  sale
or  other  agreements in which all or substantially  all  of  the
Property is sold, at one time or in two or more installments,  to
a  single  purchaser (or to title-holding designees of  a  single
purchaser),  provided  that  all  or  substantially  all  of  the
Property  is sold and transferred within a period not  to  exceed
fifteen (15) months from the Effective Date of this Agreement.

     "Term" shall have the meaning set forth in Section 5.3.


                            ARTICLE 2
                Engagement of Development Manager

     2.1   Appointment  of  Development  Manager.   Owner  hereby
appoints  Development Manager as exclusive management  agent  for
the  purposes of developing, managing, maintaining, operating and
selling the Property, and Development Manager hereby accepts such
appointment, with the responsibilities and obligations  and  upon
the   terms   and   conditions  set  forth  in  this   Agreement.
Development Manager shall perform each and all of its obligations
under  this  Agreement  in an efficient and  first  class  manner
consistent with the Business Plan and the Development Budget  and
shall  exercise  best efforts and due diligence  in  all  of  its
endeavors.

     2.2   Project  Team.  Development Manager  shall  provide  a
project  team  (the  "Project Team") to perform  its  obligations
hereunder,  which  Project Team shall be  the  responsibility  of
Development  Manager  and  shall be  staffed  with  employees  of
Development  Manager.  The members of the Project Team  shall  be
subject  to  the  prior approval of Owner,  which  shall  not  be
unreasonably  withheld.  The members of the initial Project  Team
are listed on Exhibit "D"attached hereto and incorporated herein
by this reference, and are hereby approved by Owner.  Development
Manager shall designate a qualified and experienced member of the
Project  Team  as  its  representative (the "Development  Manager
Representative") to act for and on behalf of Development  Manager
when  recommendations, consents, approvals  or  commitments  from
Development  Manager are required under this  Agreement,  and  to
function  as  the  principal source of liaison and  communication
with Owner.  The Development Manager Representative is subject to
the  prior approval of Owner. William H. Armstrong III is  hereby
designated as the initial Development Manager Representative, who
is  hereby  approved  by  Owner.   Development  Manager  may  not
reassign or replace any member of the Project Team, name any  new
individual  to  fill  such  position or replace  the  Development
Manager  Representative without the prior approval  of  Owner  in
each  instance; provided, however, that notwithstanding  anything
to  the  contrary  set  forth in this  Section  2.2,  Development
Manager  shall not, as a result of this Section 2.2, be compelled
to  continue to employ any member of the Project Team, and in the
event  any  member ceases to be employed by Development  Manager,
Development Manager shall not be considered in default hereunder,
unless  three  (3)  or more members of the Project  Team  or  the
Development  Manager  Representative  cease  to  be  employed  by
Development  Manager  and have not been replaced  by  employee(s)
which  have  been approved by Owner.  Development  Manager  shall
remove  from the Project Team any member as reasonably  requested
by Owner from time to time.

     2.3   Owner  Representative.  Owner shall designate  one  or
more   representative(s)  (whether  one  or  more,   the   "Owner
Representative") to act for and on behalf of Owner when consents,
approvals  or  commitments from Owner  are  required  under  this
Agreement and to function as the principal source of liaison  and
communication with Development Manager.  If more than  one  Owner
Representative   is  designated  by  Owner,   each   such   Owner
Representative shall have authority to communicate on  behalf  of
Owner, and Development Manager shall be entitled to rely upon the
communication of any such Owner Representative.  Larry Goland  is
hereby designated as the initial Owner Representative.  Owner may
in its sole discretion replace the Owner Representative from time
to  time,  and add or subtract Owner Representatives, subject  to
prior written notice thereof to Development Manager.


                            ARTICLE 3
          Duties and Obligations of Development Manager

     3.1   Expenses.   All obligations and expenses  approved  by
Owner  in  writing,  including without  limitation  all  expenses
provided   for  in  the  Development  Budget,  and  incurred   by
Development Manager in the performance of its duties hereunder in
accordance with the provisions hereof, shall be paid out of funds
on deposit from time to time in the Property Account, as provided
in  Sections 3.7 and 3.8 hereof, except as otherwise specifically
provided  in  this  Agreement.   Without  Owner's  prior  written
consent  or  as  authorized in the Business Plan  or  Development
Budget,  Development  Manager  shall  not  incur  any  cost   not
specifically set forth in the most recently approved  Development
Budget.

     3.2   Contracts.  Subject to the provisions of  Section  3.4
hereof, to the extent necessary to fulfill its obligations  under
this  Agreement, Development Manager shall (i) identify and, with
the  prior  written  approval of Owner or as  set  forth  in  the
Business Plan or Development Budget, enter into, in Owner's name,
contracts   with  architects,  engineers,  tradesmen  and   other
independent   contractors  to  perform  services   necessary   or
advisable for the development, operation, maintenance or sale  of
all  or  any  portion of the Property; and (ii)  with  the  prior
written approval of Owner or as set forth in the Business Plan or
Development  Budget, place orders, in Development Manager's  name
on  behalf  of  Owner,  for  such equipment,  tools,  appliances,
materials  and  supplies  as  are  reasonable  and  necessary  to
properly  develop,  manage,  operate or  maintain  the  Property.
Except  with  the prior written consent of Owner, every  contract
entered into by Development Manager for or in connection with the
Property shall include as a condition thereof the right by  Owner
to  terminate, with or without cause, on thirty (30) days'  prior
written  notice,  without  the payment  of  a  cancellation  fee.
Development  Manager shall deliver to Owner a copy  of  each  and
every  contract  entered into in connection  with  the  Property,
whether  or  not  Owner's approval thereof  is  required,  within
fifteen (15) days after full execution thereof.

     3.3   Management  Standard; Specific  Development  Services.
Subject  to  the  provisions of Section 3.4  hereof,  Development
Manager  shall  manage  the development,  operation,  management,
maintenance  and  sale  of the Property in  accordance  with  the
"Management  Standard" (as  defined  in  Section  5.1   hereof).
Without  limiting the generality of the foregoing  or  any  other
provisions of this Agreement, Development Manager shall  perform,
among  other  services  and obligations, the  following  specific
services.

       (a)   Pre-Development  Services.   Development  Manager
          shall:

           (i)  Obtain  all necessary land use approvals  and
                permits and other governmental authorizations
                and entitlements;

           (ii) Hire any architects, land planners, engineers
                or other design consultants necessary for the
                planning, development and construction of any
                improvements on any portion of the Property;

           (iii) Supervise and/or assist the architect(s), land
                 planners, and engineer(s) in the preparation of all
                 necessary plans and specification

           (iv) Supervise   and/or  assist  the  engineer(s),
                consultant(s) and/or other professional(s) in
                performing    all   necessary    tests    and
                investigations,  including environmental  and
                soil tests; and

           (v)  Review  and  approve  (or disapprove)  bills,
                invoices and applications for payment, all of
                which  shall  be at reasonable, market  rates
                and  terms  of  payment,  received  from  the
                architect(s),  engineer(s),  land   planners,
                consultant(s)  and/or  other  professional(s)
                engaged in connection with the Property.

        (b)  Construction Services.  Development Manager shall:

           (i)  Finalize all plans and specifications and any required
                approvals thereof;

           (ii) Supervise and/or assist the general contractor(s) for
                compliance with construction contracts, project schedules
                and project budgets;

          (iii) Supervise and/or assist the architect(s) in review and
                approval (or disapproval) of applications for payment,
                change orders, construction change directives, shop
                drawings, product data, samples and other submittals;

          (iv) Review and approve (or disapprove) bills, invoices and
               applications for payment, all of which shall be at
               reasonable, market rates and terms of payment, received
               from the general contractor(s), subcontractor(s),
               materialmen and/or other trades engaged in connection with
               any construction of improvements on the Property; and

           (v) Coordinate the transfer to Owner of all warranties,
               guarantees, affidavits, releases, waivers of liens, bonds,
               insurance certificates, manuals and other submittals.

      (c)  Sales and Marketing Services.  Development Manager
     shall:

           (i) Review the Property to determine its physical condition,
               relative market appeal, quality of location, market and
               area trends, and potential for value enhancement prior to
               entering the market;

          (ii) Develop and prepare for Owner's review and approval a
               detailed marketing plan (the "Marketing Plan"), consistent
               with the Business Plan and the Development Budget, setting
               forth a comprehensive strategy for sale of homesites and
               other portions of the Property;

         (iii) At Development Manager's sole discretion, supervise
               and/or assist consultant(s) and/or other professional(s)
               in the design, installation, production, implementation,
               dissemination and maintenance of the following to be used
               for marketing and selling homesites and other portions of
               the Property:

                 (a)  Site signs,
                 (b)  Directional signs,
                 (c)  Brochures, direct mail, flyers, sales packages and other
                      print collateral,
                 (d)  Radio, print, internet and television advertising, and
                 (e)  Promotional events;

         (iv) Market for sale to the general public, homebuilders, and
              other real estate companies, via direct mail, print advertising
              and on the internet, as deemed appropriate by Development
              Manager, and as otherwise reasonably requested by Owner,
              homesites and other portions of the Property based upon a price
              schedule set forth in the Marketing Plan, the Business Plan or
              Development Budget, or as otherwise approved in writing by Owner;

         (v)  Solicit, identify and qualify prospective purchasers of
              homesites and other portions of the Property, and provide
              prospective purchasers with additional information and coordinate
              site visits of the Property;

        (vi) Promptly inform Owner of all offers and inquiries received
             from brokers, prospective purchasers or anyone else with respect
             to the all or any portion of the Property;

       (vii) Negotiate letters of intent, contracts of sale and
             similar agreements prospective purchasers and Owner, and provide
             Owner with analyses and comparisons of each competing offer and
             counteroffer and recommend to Owner which offer to accept;

     (viii) Prepare deeds and other closing documentation for
            execution by or on behalf of Owner, and coordinate with the
            appropriate parties to secure all documents and information
            required for closing on any sale of homesites and other portions
            of the Property; and

      (ix) Review and approve (or disapprove) bills, invoices and
           applications for payment, all of which shall be at reasonable,
           market rates and terms of payment, received from the
           consultant(s), other professional(s), media sources, and/or other
           trades engaged in connection with any marketing, advertising,
           promotions, or public relations on the Property.

          (d)   Single  Purchaser  Transaction.   Notwithstanding
anything  to the contrary set forth above, in the event that  the
Property  is  sold in a Single Purchaser Transaction, Development
Manager shall be required to perform only the specific Sales  and
Marketing  Services that are described in clauses  (vii),  (viii)
and  (ix)  of  Subsection 3.3(c) above, to the extent applicable,
and   shall  be  required  to  perform  only  the  specific  Pre-
Development Services and Construction Services as are required or
necessary  to be performed by or on behalf of Owner as set  forth
in  the contract of sale or other agreement pursuant to which the
Single Purchaser Transaction is consummated.

     3.4   Major  Decisions.   Notwithstanding  anything  to  the
contrary  set forth in this Agreement, all Major Decisions  shall
be  made  by  Owner,  in  consultation with Development  Manager.
Further  notwithstanding anything to the contrary  set  forth  in
this Agreement, Owner shall have the right from time to time,  in
Owner's  sole  reasonable  discretion,  to  review  and  approve,
disapprove  or  advise Development Manager with  respect  to  any
matter related to Development Manager's services and obligations,
whether or not such matter is the subject of a Major Decision.

     3.5  Insurance.

     (a)   Owner's Insurance.  Owner shall cause to be placed and
kept  in force all forms of insurance as Owner deems prudent  and
reasonable given the nature of the Property.  All such  insurance
coverage  shall be placed with such companies, in  such  amounts,
and  with  such beneficial interests appearing therein  as  Owner
deems  prudent  and reasonable given the nature of the  Property.
Owner  shall procure appropriate clauses in, or endorsements  on,
all of the policies whereby the insurer names Development Manager
as  an additional insured, and the insurer waives subrogation and
agrees  to  not terminate any such policy or reduce  coverage  or
amount  without  giving Owner and Development  Manager  at  least
thirty (30) days' prior written notice.

     (b)   Development Manager's Insurance.  Development  Manager
shall  cause  to be placed and kept in force at all times  during
the  term  of  this Agreement (i) comprehensive public  liability
insurance  with  primary coverage of not less  than  Two  Million
Dollars  ($2,000,000.00) combined single limit for bodily  injury
or  property damage with a annual aggregate of not less than Five
Million   Dollars  ($5,000,000.00),  (ii)  errors  and  omissions
insurance,  (iii)  fidelity  bond  or  insurance,  (iv)  workers'
compensation  insurance  in amounts not  less  than  the  minimum
amounts required by applicable state law and employer's liability
insurance,  and  (v) all other forms of insurance as  Development
Manager  deems  prudent and reasonable given the  nature  of  the
Property  and  Development Manager's obligations hereunder.   All
such  insurance coverage shall be placed with such companies,  in
such  amounts,  and  with  such  beneficial  interests  appearing
therein as Development Manager deems prudent and reasonable given
the  nature of the Property and Development Manager's obligations
hereunder, as reasonably approved by Owner.  Development  Manager
shall procure appropriate clauses in, or endorsements on, all  of
the  policies  whereby the insurer names Owner as  an  additional
insured and agrees to give Owner not less than thirty (30)  days'
written  notice prior to any modification or termination  of  any
policy  or failure to renew or other lapse in coverage,  and  the
insurer  waives subrogation and agrees to not terminate any  such
policy  or  reduce coverage or amount without giving  Development
Manager and Owner at least thirty (30) days prior written notice.

     (c)   Development Manager Obligations.   Development Manager
shall  promptly  investigate and make a full and  timely  written
report  to  Owner  and, if Owner requests, to  Owner's  insurance
company as to all accidents, claims for damages relating  to  the
ownership,  operation  and maintenance of the  Property  and  any
damage  or destruction to the Property and the estimated cost  of
repair thereof, and shall prepare any and all reports required by
Owner  and,  if  Owner  requests, by  its  insurance  company  in
connection therewith. All such reports shall be timely filed with
the  insurance  company  as  required  under  the  terms  of  the
insurance  policy involved. Without obtaining the  prior  written
approval  of Owner, which may be granted or withheld  in  Owner's
sole  discretion, Development Manager shall not settle any claims
against  insurance companies arising out of any policies or  take
any  other  action in connection with such settlements, including
the  execution  of  proofs  of loss, the  adjustment  of  losses,
signing  of  receipts and collection of money. The  cost  of  the
insurance and all premiums therefor shall be paid out of funds on
deposit from time to time in the Property Account, as provided in
Sections  3.7 and 3.8 hereof, except for fidelity bond  insurance
which  shall  be  the sole responsibility of,  and  at  the  sole
expense  of,  Development  Manager.   Development  Manager  shall
assist   Owner   in   completing  any   insurance   applications,
questionnaires,  etc. reasonably requested by  Owner  or  Owner's
insurance agent or insurance company.

     3.6   Development Budgets; Business Plans.   Notwithstanding
the  delivery and approval of the Development Budget and Business
Plan  attached as exhibits to this Agreement, Development Manager
shall prepare the items described herein.

          (a)   Initial  Development Budget  and  Business  Plan.
Within  fifteen  (15)  days  after  the  Effective  Date  hereof,
Development Manager shall submit to Owner, for Owner's  approval,
in Owner's sole discretion, a proposed initial development budget
and  business  plan for the Property, which proposed  development
budget and business plan shall reflect thereon projections of all
receipts  (if  any)  and  operating costs and  expenses,  capital
expenditures  and  reserves  that  Development  Manager,  in  the
exercise of good business judgment, believes will be received  or
necessary  to  be  incurred, as the  case  may  be,  to  develop,
operate,  manage, maintain and sell the Property during  calendar
year  2001.   Owner shall promptly notify Development Manager  of
any  objections  to  the proposed initial development  budget  or
business  plan, and Development Manager and Owner shall negotiate
in  good faith to resolve any such objections.  In the event that
Owner  shall  not have approved the proposed initial  development
budget  and  business plan delivered pursuant to this  Subsection
3.6(a), in Owner's sole discretion, within thirty (30) days after
receipt thereof, this Agreement shall be deemed terminated and of
no  further  force  and  effect,  the  Development  Manager  Cash
Consideration  paid  to  Owner  shall  be  refunded  promptly  to
Development  Manager  without  interest  or  other  yield,   this
Agreement  shall terminate automatically and the  parties  hereto
shall  have  no  further  liabilities or  obligations  hereunder,
except as set forth in Section 5.6 hereof.

          (b)   Annual Development Budget and Business Plan.   On
or  prior  to  November 1 of each calendar year during  the  Term
hereof, commencing on November 1, 2001, Development Manager shall
submit  to  Owner,  for Owner's approval, a proposed  development
budget and business plan for the Property on an annual basis  for
the upcoming calendar year, which proposed development budget and
business  plan shall reflect thereon projections of all  receipts
(if  any)  and operating costs and expenses, capital expenditures
and  reserves that Development Manager, in the exercise  of  good
business judgment, believes will be received or necessary  to  be
incurred,  as  the  case  may  be, to develop,  operate,  manage,
maintain  and sell the Property during such calendar year.   Such
proposed   development  budgets  and  business  plans  shall   be
submitted  by Development Manager solely as good faith estimates,
without  warranty  of their accuracy or attainability;  provided,
however,  that,  except as otherwise expressly provided  in  this
Agreement, Development Manager shall not be reimbursed  by  Owner
for,  and Development Manager hereby expressly indemnifies  Owner
against,  any  and all loss, cost, damage, expense  or  claim  in
connection   with  any  unauthorized  expenditure  or   liability
incurred by any action taken by Development Manager.

          (c)   Contents.  Without limiting the  foregoing,  each
development  budget  and  business plan proposed  by  Development
Manager  pursuant  to Subsections 3.6(a) and 3.6(b)  above  shall
include  between them: (i) a projected income statement  for  the
Property, (ii) a projected balance sheet for the Property,  (iii)
a  schedule  of  projected  operations  and  cash  flow,  (iv)  a
reasonable  estimate and projected budget of gross  receipts  and
operating expenses, itemized in a manner acceptable to Owner, (v)
a  projected  budget for capital expenditures  and  replacements,
(vi) an identification of staffing to be employed, (vii) separate
estimates  of  the Management Fee, Development Fee and  Brokerage
Commissions,  (viii) a narrative description of the  program  for
the  development and marketing of the Property, and (ix) any  and
all other matters reasonably requested by Owner.

          (d)   Owner Approval.  Owner shall, within thirty  (30)
days  after receipt of a proposed development budget and business
plan  delivered pursuant to Subsection 3.6(b) above,  approve  or
disapprove such development budget and business plan in its  sole
discretion.  Owner  shall  provide  Development  Manager  written
notice  of  its approval or disapproval; provided,  that  in  the
event  Owner  fails to do so, the Development Budget or  Business
Plan,  as  the case may be, from the previous year shall  control
until  a  new  development budget or business plan  is  approved.
Within fifteen (15) days after Owner submits any objection to the
proposed development budget or business plan, Development Manager
shall  submit  a revised development budget or business  plan  to
Owner,  as  the  case may be.  As used herein, the defined  terms
"Business Plan"and "Development Budget"shall refer to the then-
current Development Budget and Business Plan as approved by Owner
and  as  amended and/or modified from time to time  with  Owner's
approval.

          (e)   Owner's  Amendments  to  Development  Budget  and
Business  Plan.   Owner  may,  from  time  to  time,  submit   to
Development Manager, for Development Manager's approval, proposed
amendment(s)  to  the  Development Budget and/or  Business  Plan.
Development Manager shall, within fifteen (15) days after receipt
of  a  proposed amendment to the Development Budget  or  Business
Plan,  provide  Owner  with written notice  of  its  approval  or
disapproval  of  such  amendment.  Owner and Development  Manager
shall  use  good faith efforts to agree upon any such  amendment;
provided,  however, that in the event the parties fail to  agree,
such  amendment shall nevertheless become effective within  sixty
(60)  days  after  first  proposed  by  Owner.   The  Development
Manager's  failure  to  agree to any such amendment  proposed  by
Owner  shall not be grounds for termination of this Agreement  by
Owner.
     3.7  Owner Account and Property Account.

          (a)    Owner   Account.    Development  Manager   shall
establish   and   maintain  in  a  banking  or  other   financial
institution  approved by Owner or set forth in the Business  Plan
from  time  to  time  throughout the Term of  this  Agreement,  a
separate  bank or similar account in the name of, and  under  the
sole dominion and control of, Owner for the deposit of all moneys
received  with  respect  to the Property (the  "Owner  Account").
Development Manager shall also establish such other special  bank
or  similar  accounts as may be approved by Owner.   All  revenue
from   the  Property,  including  without  limitation  all  sales
proceeds,  rent  receipts,  royalties,  user  fees,  commissions,
forfeited   deposits,   insurance   proceeds,   condemnation   or
litigation  awards  and  all  interest  earned  on  any  of   the
foregoing,  shall  be promptly deposited in  the  Owner  Account.
Development  Manager  shall  not have  the  right  or  authority,
express  or implied, to withdraw any funds from the Owner Account
at  any time.  Owner shall not withdraw any funds from the  Owner
Account,  except as required pursuant to Section  3.7(a)  hereof,
until   the  earlier  of  (a)  the  commencement  of  the   first
Distribution  Period, or (b) termination of the  Term  hereof  in
accordance  with  the  terms  of Section  5.3  hereof;  provided,
however,  that Owner shall have the right from time to  time,  in
consultation with Development Manager, to withdraw funds from the
Owner Account to repay principal under the Project Mortgage Loan.

          (b)   Property Account.  Development Manager also shall
establish   and   maintain  in  a  banking  or  other   financial
institution  approved by Owner or set forth in the Business  Plan
from  time  to  time  throughout the Term of  this  Agreement,  a
separate bank or similar account in the name of Owner to  process
funds  as  described  in  Section 3.8 (the  "Property  Account").
Development  Manager shall be entitled to make withdrawals  from,
or  draw  checks  upon,  the Property Account  to  pay  operating
expenses  of  the  Property  in accordance  with  the  terms  and
conditions of this Agreement.

     3.8  Disbursements by Owner to Development Manager.

          (a)   Monthly  Payments.  On or  before  the  twentieth
(20th)  day  of  each calendar month, Development  Manager  shall
deliver  to  Owner  a  written request for disbursement,  setting
forth,  in  reasonable detail, the costs and expenses  reasonably
estimated  to  be  paid by Development Manager for  the  upcoming
calendar month, together with any other working capital needs  of
the  Property for the upcoming calendar month, in each  case,  in
accordance  with  the Development Budget (the  "Required  Monthly
Funds").    Development  Manager  shall  also  submit  reasonable
substantiation   as   requested  by  Owner  for   all   requested
disbursements.  In the event that any requested  disbursement  is
not  consistent  with,  or in compliance  with,  the  Development
Budget,  Development  Manager  shall  set  forth  such  requested
disbursements  in a separate report and shall set forth  a  brief
explanation  for  the  reason for such  discrepancy.   Each  such
written  request  for Required Monthly Funds shall  also  include
Development  Manager's calculation of the monthly Management  Fee
payable  for  the  preceding calendar  month,  and  a  reasonable
estimate of the amount of revenues expected to be received in the
upcoming  calendar  month  from  sales  of  homesites  and  other
portions  of  the  Property  and  the  amount  of  any  Brokerage
Commissions payable in connection with such sales.  On or  before
the first (1st) day of the month for which the particular request
for the Required Monthly Funds is made, Owner shall transfer, via
wire transfer, from the Owner Account to the Property Account the
amount  of  any  shortfall between the  amount  of  the  Required
Monthly  Funds approved by Owner for such calendar month and  the
balance  of  available funds, if any, on deposit in the  Property
Account.   Owner  and Development Manager hereby acknowledge  and
agree  that  if  there  are insufficient funds  in  the  Property
Account  and  the  Owner Account to fund  the  entire  amount  of
Required  Monthly Funds for any month, then the  amount  of  such
shortfall  shall be funded with proceeds drawn under the  Project
Mortgage Loan, provided that all such expenses are authorized  in
the  Development  Budget.   To the  extent  that  funds  are  not
available  under  the Project Mortgage Loan or the  expenses  for
which  funds  are required are not authorized in the  Development
Budget,  then Development Manager shall fund the amount  of  such
shortfall  to  Owner under the Project Unsecured  Loan,  provided
that  such unbudgeted expenses are due to change orders  approved
by Owner or to circumstances which could not have been reasonably
foreseen by an experienced and prudent manager of development  of
a  project similar to the Property.  To the extent that funds are
required  for  unbudgeted expenses that are  not  due  to  change
orders  approved  by  Owner  or  unforeseeable  circumstances  as
provided  in  the preceding sentence, then, notwithstanding  that
funds   may  be  available  under  the  Project  Mortgage   Loan,
Development  Manager  shall be solely  responsible  to  fund  the
amount  of  such  shortfall without reimbursement  or  repayment.
Owner  shall not be required under any circumstance to incur  any
out-of-pocket  expenses  in  connection  with  the   development,
operation, management, maintenance and sale of the Property.

          (b)  In  the  event that any portion  of  the  Required
Monthly Funds are required to be drawn under the Project Mortgage
Loan,  Development Manager shall prepare a draw  request  in  the
manner  required by the lender of the Project Mortgage  Loan  and
shall submit such draw request to Owner for Owner's approval,  at
the  same  time  that  the related written request  for  Required
Monthly  Funds  is submitted to Owner.  If the  draw  request  is
approved by Owner, Owner shall direct that the requested proceeds
be disbursed directly into the Property Account.

          (c)   Emergency Withdrawals.  Development Manager shall
only be entitled to make withdrawals from the Property Account in
accordance with the Development Budget or the Business Plan or in
connection with a bona fide emergency due to casualty or  act  of
God under circumstances in which it would be unreasonable to seek
to  obtain  Owner's  approval, in which case Development  Manager
shall  be entitled to exceed, by a reasonable amount, the amounts
set forth in the Development Budget in order to address such bona
fide  emergency situation; provided that, within two (2) Business
Days after such emergency, Development Manager shall fully inform
Owner  in writing of the circumstances surrounding such situation
and  obtain,  on  a "going-forward"basis only, Owner's  approval
with   respect  to  Development  Manager's  handling  of  similar
emergency events at the Property in the future.  It is understood
that  any action taken by Development Manager under this  Section
3.8(b) in connection with any particular emergency event shall be
considered  as  being  within  Development  Manager's  scope   of
authority under this Agreement but shall not create any precedent
or  duty on the part of Development Manager or Owner to take  any
action in connection with any future event.  Nothing contained in
this Section 3.8(b) or elsewhere in this Agreement is intended to
provide  any  benefit to any third parties who  are  not  parties
hereto, or successors or permitted assigns of parties hereto,  or
impose  upon Development Manager or Owner any duty or  obligation
to any third parties who are not parties hereto, or successors or
permitted assigns of parties hereto, nor shall it have the effect
of giving any enforceable rights to any third parties who are not
parties  hereto  or  successors or permitted assigns  of  parties
hereto,   whether  such  claims  are  asserted  as  third   party
beneficiary rights or otherwise.

     3.9   Costs  Not Reimbursed to Development Manager.   Unless
otherwise  provided  herein, Owner  shall  not  be  obligated  to
reimburse  Development  Manager for the  payment  by  Development
Manager  of  (a)  any  expense  for office  equipment  or  office
supplies  of  Development Manager other than those  used  on  the
Property  and  approved  in writing by Owner;  (b)  any  overhead
expenses  of Development Manager incurred in its general offices;
(c)  unless  otherwise  consented to by  Owner  in  writing,  any
salaries,  wages  and  expenses  for  any  personnel,  including,
without limitation, personnel spending all or a portion of  their
working   hours  at  or  providing  services  to   the   Property
specifically  performing Development Manager's duties  hereunder;
(d)  the cost of fidelity insurance; (e) any accounting costs  or
overhead  costs  incurred in connection with the preparation  and
delivery of the statements and reports required hereunder; or (f)
any travel costs incurred by Development Manager not specifically
provided for in the Development Budget.

     3.10 Records; Reporting.

          (a)   Records.   All  statements,  receipts,  invoices,
checks,  leases,  contracts,  worksheets,  financial  statements,
books  and  records,  and  all other  instruments  and  documents
relating  to  or  arising  from  the  development,  operation  or
management  of  the  Property shall be  the  property  of  Owner;
provided, that throughout the Term of this Agreement, all of such
items  shall  be maintained by Development Manager at Development
Manager's  offices in Austin, Texas in a manner  consistent  with
the   terms  of  this  Agreement  and  with  books  and   records
customarily  maintained by managing agents of properties  similar
to  the  Property. Owner shall have the right to inspect  and  to
copy all such items, at Owner's expense, at all reasonable times,
and  from  time to time, during the term of this Agreement.  Upon
the termination of this Agreement, all of such books, records and
all other information relating to the Property promptly shall  be
delivered  to  Owner;  provided,  however,  that  at  Development
Manager's    sole   expense,   Development   Manager    or    its
representatives shall have the right, for a reasonable period  of
time not to exceed three (3) years following such termination, to
inspect  such books, records and other information for data  that
directly  relates to the period during which Development  Manager
managed  the  Property and to make copies thereof, at Development
Manager's  expense,  at  the offices  of  Owner  upon  reasonable
advance notice to Owner.

          (b)   Statements.   Development Manager  shall  prepare
and  deliver  to Owner on a monthly basis, Development  Manager's
written estimates of the amounts, if any, by which any categories
of the Development Budget must be adjusted to adequately fund the
development,  operation, management, maintenance and/or  sale  of
the Property for the then current month, although Owner shall  be
under  no  obligation  to  change the Development  Budget.   Such
reports shall include the following information:  (i) a statement
of  operations  on the Property during such month  and  the  cost
thereof,  (ii)  a  statement of year-to-date  operations  on  the
Property,  and the cost thereof, (iii) a statement of the  actual
cost of operations on the Property during such month, compared to
the Development Budget which identifies any variance between such
costs  and  the  Development Budget, and (iv) a  description  and
explanation  of  such variances. Development Manager  also  shall
furnish  Owner,  within thirty (30) days after  Owner's  request,
such  further information covering the operation and  maintenance
of  the  Property  as  Owner  may reasonably  require,  including
without  limitation the following:  (i) income statement (accrual
basis  for  taxes  and insurance), month and year-to-date  versus
Development  Budget; (ii) variance report (narrative form,  month
and  year-to-date),  (iii) balance sheet,  (iv)  general  ledger,
(v)   rent   roll  (including  security  deposit   listing),   if
applicable,  (vi)  accounts receivable aging report,  (vii)  bank
reconciliation for each account, (viii) calculation of Management
Fee,  (ix) schedule of reserve and escrow accounts, (x)  schedule
of  capital expenditures, (xi) a re-forecast report, on a monthly
basis,   of  current  full  year  operations  compared   to   the
Development Budget with explanations for all material  variances,
(xii) a marketing qualitative summary of property operations  for
the  preceding  month  including comments on revenues,  expenses,
marketing, leases, competition, legal and other issues  affecting
the  Property,  and  (xiii) any and all other reports  reasonably
requested by Owner.

          (c)   Annual  Accounting Report.   Development  Manager
agrees (i) to deliver to Owner, within twenty (20) days after the
end  of  each fiscal year, an annual accounting report (including
balance  sheet, income statement and other financial statements),
showing  the results of gross receipts, gross operating expenses,
net  operating income, net cash flow [and the Property Management
Fee which would be payable if the Agreement were terminated as of
the  end of such fiscal year] and any other information necessary
to  make  the  computations  required  hereby  or  which  may  be
requested  by  Owner,  all  for such  fiscal  year  and  (ii)  to
cooperate   fully  with  Owner,  at  no  additional  expense   to
Development  Manager, but without limiting Development  Manager's
obligations  under  Section 3.10(e),  in  supplying  all  of  the
information   and  documentation  necessary  for   a   nationally
recognized firm of certified public accountants selected by Owner
(the  "Auditor") to prepare and deliver to Owner an audit of  the
annual accounting report provided by Development Manager to Owner
pursuant  to  this  Section 3.10(c) within forty-five  (45)  days
after the end of each fiscal year.

          (d)   Additional Fiscal Reports.   Development  Manager
shall,  upon  the request of Owner, prepare for Owner  or  assist
Owner  in  the  preparation of such additional financial  reports
with respect to the Owner or the Property as Owner may reasonably
request  or  may  be required in the preparation of  the  audited
annual  accounting to be prepared pursuant to this Section  3.10.
Development  Manager acknowledges and agrees  that  the  Property
Management   Fee  to  be  paid  under  this  Agreement   includes
compensation to Development Manager for the preparation of papers
and schedules reasonably necessary for the Auditor to conduct its
review  of  the Property's books and records. To the extent  such
papers  and  schedules  are  not properly  prepared,  Development
Manager  agrees to reimburse Owner for the reasonable  additional
cost  and  expense incurred by Owner for the Auditor  to  prepare
such papers or schedules.

          (e)    No  Liability  for  Returns  Required  by   Law.
Development Manager shall be responsible for preparing and filing
any forms, reports or returns (except Owner's income tax returns)
that may be required by law relating to the Property. Development
Manager  shall  also  be responsible for any  forms,  reports  or
returns  that  may  be  required  by  law  relating  to  any   of
Development Manager's employees.

     3.11   Compliance  with  Legal  Requirements.    Development
Manager shall take such action as may be necessary to comply with
any  and all orders or requirements affecting the Property by any
federal, state, county or municipal authority having jurisdiction
thereover. Development Manager, however, shall not take any  such
action  as  long as Owner is contesting, or has affirmed  Owner's
intention  to contest and institutes proceedings contesting,  any
such  order  or  requirement, except that if  failure  to  comply
promptly with any such order or requirement would or might expose
Development  Manager  to criminal liability, Development  Manager
shall comply with same. Development Manager shall promptly notify
Owner  in writing of all such orders and notices or requirements.
Nothing  contained  herein shall require Development  Manager  to
employ counsel to represent Owner in any such proceeding or suit.

     3.12  Taxes.   Development Manager shall timely  render  the
Property  for  taxation, and obtain and  verify  bills  for  real
estate,  personal property, and all other taxes and  assessments,
if  any, against the Property and promptly pay such tax bills and
any   other  Impositions  (as  defined  below),  and  assist  and
cooperate  with  Owner  in connection with  all  such  taxes  and
assessments  in all ways reasonably requested by Owner  including
applications  or  petitions of Owner for reduction  of  taxes  or
assessments.  Owner shall have the option but not the  obligation
to  employ  a third party consultant to accomplish the foregoing,
in  which  event, Development Manager shall assist and  cooperate
with  such  consultant. As used herein, "Impositions"shall  mean
all  taxes,  assessments, special assessments, rents and  charges
for  any  easement or agreement maintained as part of or for  the
benefit  of  the Property, use and occupancy taxes  and  charges,
water  and  sewer  for  public  and private  utilities,  excises,
levies,  license and permit fees and other governmental  charges,
general  and special, ordinary and extraordinary, unforeseen  and
foreseen,  of any kind and nature whatsoever which  at  any  time
prior  to  or during the term of this Agreement may be  assessed,
levied, confirmed, imposed upon or grow or become due and payable
out of or in respect of, or become a lien on (i) the Property  or
any  part  thereof  or  any appurtenances thereto,  or  upon  any
personal  property  located,  or used  in  connection  with,  the
Property,  (ii)  the  rent, income or  other  payments  (if  any)
received  by  or for the account of Owner or anyone claiming  by,
through  or  under  Owner, (iii) any use  or  occupation  of  the
Property,  (iv) such franchises, licenses and permits as  may  be
appurtenant  to the use of the Property, and (v) any document  to
which Owner is a party transferring an interest or estate in  the
Property.


                           ARTICLE IV
               COMPENSATION TO DEVELOPMENT MANAGER

     4.1  Management Fee. In consideration for the performance of
Development  Manager's  duties and  responsibilities  under  this
Agreement, and in exchange for its services provided to Owner and
the   Property  and  reimbursement  of  its  reasonable  overhead
expenses,  Development  Manager shall be entitled  to  receive  a
property management fee (the "Management Fee") in an amount equal
to  five  and one-half percent (5.5%) of the aggregate amount  of
direct development costs actually incurred in connection with the
Property  as set forth in the Development Budget during the  Term
of  this  Agreement,  excluding the cost of land,  any  interest,
principal or other amounts payable in connection with the Project
Loans  and  any  other indebtedness and any costs  reimbursed  to
Development  Manager in accordance with the terms  hereof  or  as
otherwise approved by Owner.  The Management Fee shall be payable
monthly  in  arrears, calculated on the basis  of  the  aggregate
amount of qualifying costs paid in the previous calendar month.

     4.2   Development  Fee.  In addition to the Management  Fee,
Development  Manager shall be entitled to receive  a  development
fee  (the  "Development Fee"), in an amount equal to (a)  twenty-
eight  percent  (28%) of available Cash Flow,  until  Development
Manager  shall  have received a Development Fee in  an  aggregate
amount equal to the amount of interest that would have accrued on
the  Development  Manager Cash Consideration  if  the  same  bore
interest at a rate of eighteen percent (18%) per annum, and Owner
shall  have received from available Cash Flow an amount equal  to
the  amount  of interest that would have accrued on  the  Owner's
Residual  Value if the same bore interest at a rate  of  eighteen
percent  (18%)  per annum, and (b) thereafter, either  (x)  forty
percent  (40%)  of  available Cash Flow in  the  event  that  the
Property is sold in a Single Purchaser Transaction, or (y)  fifty
percent  (50%) of available Cash Flow in all other cases, subject
in  any case to the terms and conditions hereof.  The Development
Fee shall not be payable until Completion and payment in full  of
all  principal,  interest  and other charges  payable  under  the
Project  Mortgage  Loan and the Project Unsecured  Loan.   On  or
before  the  twentieth (20th) calendar day after the end  of  the
first   and  each  subsequent  Distribution  Period,  Development
Manager shall deliver to Owner a written statement of the  amount
of  Cash Flow, if any, generated in such Distribution Period, and
the  amount,  if any, of the Development Fee accrued during  such
Distribution  Period.  No later than thirty  (30)  calendar  days
after  the  end  of  such Distribution Period  during  which  the
Property has generated Cash Flow, Owner shall transfer, via  wire
transfer, from the Owner Account to an account or accounts as may
be designated in writing by Development Manager, after payment of
all  third  party  obligations, the Development  Fee  payable  to
Development   Manager   for   such  Distribution   Period.    The
Development  Fee, if any, shall be payable in  arrears.   In  the
event that there is no Cash Flow for any Distribution Period,  no
Development Fee shall be payable for such Distribution Period.

     4.3   Brokerage Commissions.  In addition to the  Management
Fee and Development Fee, Development Manager shall be entitled to
receive sales commissions (a "Brokerage Commission") with respect
to  consummated  sales  of homesites and other  portions  of  the
Property, calculated at the rates set forth below:

          (a)  Six percent (6%) of "gross sales price"(hereinafter
               defined) for sales, other than a Single Purchaser Transaction, in
               which no cooperating broker or agent participates;  or

          (b)  Four percent (4%) of gross sales price for a Single
               Purchaser Transaction in which no cooperating broker or agent
               participates; or

          (c)  Six percent (6%) of gross sales price for all sales,
               including a Single Purchaser Transaction, in which the purchaser
               is represented by one or more cooperating brokers, in which event
               Development Manager shall be entitled to a portion thereof in an
               amount not to exceed three percent (3%) of gross sales price,
               with the balance thereof  (not to exceed 6% in the aggregate)
               being payable to the cooperating broker(s).

If  one  or  more cooperating broker(s) is involved  in  a  sales
transaction, Development Manager shall be solely responsible  for
paying  a  market  rate  commission or fee  to  such  cooperating
broker(s), and shall indemnify and hold Owner harmless  from  and
against  any  and all claims by such cooperating  broker(s).   As
used in this Section, the term "gross sales price"shall mean the
actual  cash price paid by the purchaser at closing for the  home
site  or  other portion of the Property, including the amount  of
any financing assumed or obtained by such purchaser in connection
with such purchase.  The Brokerage Commission with respect to any
sale  shall  be  earned  and payable  at  closing  and  upon  the
conveyance  of  title to such homesite or other  portion  of  the
Property.

     4.4   Termination;  Waiver of Lien Rights.   Notwithstanding
anything  in this Agreement to the contrary, in the  event  of  a
termination of this Agreement as provided in Sections 5.3, 5.4 or
5.5 of this Agreement or elsewhere herein, any Management Fee and
Brokerage  Commissions payable to Development Manager as  of  the
date  of  termination, and any Development Fee,  whether  payable
prior or subsequent to the date of termination, shall be paid  to
Development  Manager  when  due.  Except  as  set  forth  in  the
immediately  preceding  sentence, from  and  after  the  date  of
termination of this Agreement, Development Manager shall  not  be
entitled  to any further Management Fee or Brokerage Commissions.
Except  as  set  forth  in  the  following  Section,  Development
Manager,  for  itself  and on behalf of its  personnel  providing
services  under  this  Agreement, hereby  waives  any  right  now
existing or hereafter arising to file any lien against all or any
portion of the Property for any fees, costs, commissions or other
compensation payable under this Agreement.

     4.5   Development Manager's Lien.  In consideration  of  the
performance of the duties and obligations of Development  Manager
as set forth herein and to evidence the payment of any Management
Fee,  Development  Fee  and  Brokerage  Commissions  payable   to
Development Manager, Owner hereby agrees to execute and record  a
Memorandum  of  this  Agreement in the form  attached  hereto  as
Exhibit  "E" and  incorporated herein by this  reference,  which
shall  be  subordinate in all respects to the mortgage and  other
security documents securing the Project Mortgage Loan.


                            ARTICLE V
          RELATIONSHIP OF DEVELOPMENT MANAGER TO OWNER

     5.1   Use and Maintenance of Premises.   Development Manager
shall  employ  its  best  efforts to  develop,  operate,  manage,
maintain and sell the Property in a manner (referred to herein as
the  "Management  Standard")  consistent  with  (i)  first  class
standards  consistent with the Business Plan and the  Development
Budget, (ii) prudent business and management practices applicable
to  the development, operation, management, maintenance and  sale
of all or any portion of the Property, and (iii) the requirements
of  any deeds of trust and other loan documents, certificates  of
occupancy,  permits,  licenses, consents  or  other  recorded  or
unrecorded  agreements  now or hereafter affecting  the  Property
(collectively referred to herein as the "Key Documents"),  or  as
otherwise  reasonably  required by  Owner.   Development  Manager
shall  use  all  contacts,  discount  programs  and  cost-savings
measures at its disposal to obtain services, products and tax and
insurance  rates  for  the Property at the lowest  cost,  without
sacrificing the quality of such services or products. Development
Manager  shall  perform  such  other  acts  and  deeds   as   are
reasonable, necessary and proper in the discharge of  its  duties
under  this  Agreement. Subject to the prior written approval  of
Owner,  Development Manager may obtain goods or services for  the
Property  from  direct  or  indirect  affiliates  of  Development
Manager, its officers, directors, shareholders or employees,  but
only if such goods and services are of at least equal quality and
of no higher prices than comparable goods and services obtainable
from  unaffiliated  parties  and  such  goods  and  services  are
otherwise competitive with comparable goods and services.

     5.2   Sale  or  Refinancing  of the  Property.   Development
Manager shall assist and cooperate in any attempt(s) by Owner  to
sell,  finance  or refinance all or any portion of the  Property.
Such  assistance  and  cooperation  by  Development  Manager  and
Development Manager's personnel shall not be deemed to  create  a
broker,  principal or similar relationship.  Such assistance  and
cooperation   shall   include,  without   limitation,   answering
prospective purchasers' or lenders' questions about the  Property
or  any portion thereof and, if applicable, preparing rent rolls,
notifying  tenants about the sale of the Property  and  obtaining
estoppel certificates and other documents from all tenants of the
Property  in  the form required by the prospective  purchaser  or
lender.  Development  Manager shall also provide,  promptly  upon
request  by  Owner,  (a)  an  estoppel  certificate  executed  by
Development  Manager certifying that no uncured  default  by  the
Owner  exists  under  this Agreement or,  if  such  a  default(s)
exists, stating the nature thereof, (b) a certificate in favor of
Owner  and any lender executed by Development Manager confirming,
to  the best of Development Manager's actual knowledge, that  any
representations and warranties made (or to be made) by Owner with
respect  to the Property, or the condition or operation  thereof,
in  any  loan documents executed (or to be executed) by Owner  in
connection  with  any  sale,  financing  or  refinancing  of  the
Property,  are substantially true, correct and complete,  or,  if
not   substantially  true,  correct  or  complete,  stating  with
particularity  why  such representations and warranties  are  not
substantially  true, correct or complete, and (c) a subordination
and  attornment  agreement  executed by  Development  Manager  in
accordance with the provisions of Section 6.9 of this Agreement.

     5.3   Term.   This Agreement shall commence on the Effective
Date  and  shall continue until the earlier to occur of  (a)  the
last  day  of  the  calendar  month  in  which  the  third  (3rd)
anniversary of the Effective Date occurs, (b) such time  as  this
Agreement  is  terminated for Cause (as herein defined),  or  (c)
such  time  as  this  Agreement is  terminated  upon  the  mutual
agreement  of  the parties. The entire term of this Agreement  is
sometimes herein referred to as the "Term."

     5.4   Termination  by  Owner.  Owner,  at  its  option,  may
terminate  this  Agreement for "Cause"at any  time  upon  giving
written  notice  thereof.  The term Cause shall include  (a)  any
fraud,   misrepresentation  or  misappropriation  of   funds   by
Development Manager, or the furnishing of any statement,  report,
notice,  writing  or  schedule to Owner that Development  Manager
knows,  or  reasonably should have known, is untrue or misleading
in  any  material respect on the date as of which the  facts  set
forth therein are stated or certified or the date such statement,
report,  notice, writing or schedule is furnished to  Owner,  (b)
the  failure  of Development Manager to comply with any  term  or
condition  of this Agreement (except for breach of the Management
Standard) and such failure continues for a period of thirty  (30)
days  after  written  notice  thereof  by  Owner  to  Development
Manager,   provided  that  if  such  default  is  not  reasonably
susceptible of cure within thirty (30) days, then such reasonable
time so long as Development Manager is diligently prosecuting the
cure  of  the  default, but in no event longer than  ninety  (90)
days, (c) the bankruptcy or insolvency of, the assignment for the
benefit of creditors by, or the appointment of a receiver for any
of  the  property of, Development Manager, (d) the sale or  other
disposition  of  all or part of the Property or Owner's  interest
therein; provided that in the case of a partial sale, termination
will  only apply to those portions of the Property sold, (e)  the
failure  of  Development Manager to cure a grossly  negligent  or
illegal  act committed by Development Manager against  Owner  and
such  failure  continues  for a period of  ten  (10)  days  after
written  notice thereof by Owner to Development Manager, (f)  the
failure  of  Development  Manager to cure  Development  Manager's
willful  and/or reckless misconduct that causes damage  to  Owner
and  such  failure continues for a period of ten (10) days  after
written  notice thereof by Owner to Development Manager,  or  (g)
the   failure  of  Development  Manager  to  perform  its  duties
consistent  with the Management Standard as reasonably determined
by  Owner, and such failure continues for a period of thirty (30)
days following the date Owner sends written notice to Development
Manager  specifying  in  reasonable  detail  the  reasons   Owner
believes  Development  Manager  has  not  performed  its   duties
consistent with the Management Standard.

     5.5  Termination by Development Manager.   Development Manager,
at  its  option, may terminate this Agreement (a) for the failure
of  Owner  to comply with any term or condition of this Agreement
and such failure continues for a period of thirty (30) days after
written  notice thereof by Owner to Development Manager, provided
that if such default is not reasonably susceptible of cure within
thirty  (30) days, then such reasonable time so long as Owner  is
diligently prosecuting the cure of the default, but in  no  event
longer  than  ninety  (90) days; or (b)  in  the  event  that  an
amendment to the Development Budget or the Business Plan proposed
by  Owner  and  disapproved by Development  Manager  nevertheless
becomes  effective  pursuant to the terms  of  Subsection  3.6(e)
hereof,  provided  that such amendment does  not  result  from  a
breach  or  default by Development Manager of any  of  the  terms
hereof  or  from circumstances which should have been  reasonably
foreseeable  by an experienced and prudent manager of development
of  a  project similar to the Property, and provided further that
such  termination  shall not become effective until  thirty  (30)
days  after  delivery of written notice thereof from  Development
Manager  to Owner, which shall not be delivered until  after  the
effective  date of such amendment.  Notwithstanding a termination
of this Agreement by Development Manager pursuant to this Section
5.5,  Development  Manager  shall  be  entitled  to  receive  the
Development Fee as and when the same would otherwise  be  payable
hereunder.

     5.6  Obligations Upon Termination.

          (a)   Upon  termination of this Agreement,  each  party
shall   continue   to  be  fully  liable  for  their   respective
obligations   which  have  accrued  up  to  and   including   the
termination date and shall promptly pay to the other all  amounts
due  to  the other party under the terms of this Agreement.  Such
payment  shall  be  made  as soon after  the  effective  date  of
termination as such amounts are determinable. Upon such  payment,
neither  party shall have any further claim or right against  the
other, except as expressly provided herein.

          (b)   In  the  event of termination of this  Agreement,
upon  the effective date of such termination, Development Manager
shall  (i)  surrender and deliver to Owner all revenue  from  the
Property  (as described in Section 3.7(a) hereof),  if  any,  and
other monies of Owner then held by Development Manager and/or  in
any  bank  account  (including,  without  limitation,  the  Owner
Account  and  the  Property Account), (ii) deliver  to  Owner  as
received by Development Manager any monies or other property  due
Owner  under  this Agreement but received after such termination,
and  (iii)  deliver to Owner everything then held by  Development
Manager pertaining to the Property, including, without limitation
copies  of  all  books,  records, keys and all  other  materials,
property  and  supplies pertaining to the  Property  and/or  this
Agreement.

     5.7   Negation  of  Partnership,  Joint  Venture  or  Lease.
Nothing in this Agreement shall constitute, or be construed to be
or to create, a partnership, joint venture or lease between Owner
and  Development  Manager with respect to the  Property.  In  the
performance  of  this Agreement, Development  Manager  shall  act
solely as an independent contractor.  Neither this Agreement  nor
any    agreements,   instruments,   documents   or   transactions
contemplated  hereby shall in any respect be interpreted,  deemed
or  construed  as making either party a partner, joint  venturer,
principal or agent with, or with respect to, the other  party  or
as  creating any similar relationship or entity, and  each  party
hereto  agrees  that  it  will not make any  contrary  assertion,
contention,  claim or counterclaim in any action, suit  or  other
legal   proceedings  involving  Development  Manager  and  Owner.
Nothing in this Agreement shall be deemed or construed to  create
in,  or  convey  to,  Development Manager  any  interest  in  the
Property,  and  Development Manager expressly hereby  waives  any
claim  of  right or interest in or to the Property,  and  further
hereby  waives  any right to file a lis pendens,  lien  or  other
encumbrance against the Property at any time and for any reason.

     5.8   Indemnification.   Development Manager shall be liable
for  and  shall  indemnify  and hold  harmless  Owner  (and  each
partner,  venturer,  employee, agent, shareholder,  director  and
officer of Owner) from any and all loss, damage, liability,  cost
or  expense (including reasonable attorneys' fees) arising out of
(i)  any  breach by Development Manager of Development  Manager's
obligations hereunder, including, without limitation  any  breach
of  the  Management Standard, or (ii) the negligence  or  willful
misconduct of Development Manager. Owner shall indemnify and hold
harmless Development Manager (and each employee, agent, director,
shareholder are officer of Development Manager) from any and  all
loss,  damage,  liability, cost or expense (including  reasonable
attorneys' fees) arising out of (x) a breach by Owner of  Owner's
obligations  hereunder,  or  (y) Owner's  negligence  or  willful
misconduct.

     5.9   Owner's  Limited Liability.   No  general  or  limited
partner  in  or  of  Owner, whether direct or  indirect,  or  any
disclosed  or  undisclosed  officers,  shareholders,  principals,
directors,  employees, partners, servants or agents of  Owner  or
any   of  the  foregoing  or  any  investment  advisor  of  Owner
(including any assignee or successor of Owner) or other holder of
any  equity interest in Owner, shall be personally liable for the
performance  of Owner's obligations under this Agreement.   Owner
shall not be liable for, and Development Manager expressly hereby
waives  any  right  to  make a claim for,  any  consequential  or
punitive damages.  The liability of Owner (including any assignee
or successor of Owner) for Owner's obligations hereunder shall be
limited solely to the equity interest of Owner in the Property.

     5.10 Development Manager's Limited Liability.  No general or
limited  partner in or of Development Manager, whether direct  or
indirect, or any disclosed or undisclosed officers, shareholders,
principals, directors, employees, partners, servants or agents of
Development  Manager or any of the foregoing  or  any  investment
advisor  of  Development  Manager  (including  any  assignee   or
successor  of Development Manager) or other holder of any  equity
interest  in Development Manager, shall be personally liable  for
the  performance of Development Manager's obligations under  this
Agreement.   Development Manager shall not  be  liable  for,  and
Owner expressly hereby waives any right to make a claim for,  any
consequential or punitive damages.

                           ARTICLE VI
                          MISCELLANEOUS

     6.1  No Assignment by Development Manager, Etc.  Without the
prior  written consent of Owner, which consent may be granted  or
withheld  in  Owner's sole discretion, Development Manager  shall
not  have  the  right  to  assign,  transfer  or  convey  any  of
Development  Manager's  right, title or interest  hereunder,  nor
shall  Development Manager have the right to delegate any of  the
obligations  or  duties  required to  be  kept  or  performed  by
Development  Manager  hereunder, nor  shall  Development  Manager
assign,  transfer  or  hypothecate any  interest  of  Development
Manager  in  the  Management Fee or the Development  Fee  to  any
party,  including without limitation as collateral  security  for
any  indebtedness.   For  purposes  hereof,  any  event  (whether
voluntary  or  involuntary) resulting in a  dissolution,  merger,
consolidation  or reorganization of Development Manager,  or  the
sale or transfer of any controlling interest therein, without the
prior  written consent of Owner in each instance, shall be deemed
to be an assignment in violation of this Section.

     6.2   Notices.    All notices, demands, consents,  approvals
and  requests given by either party to the other hereunder  shall
be  in writing and sent via the U.S. Postal Service by registered
or certified mail, postage prepaid or via a nationally recognized
overnight  delivery service (e.g. Federal Express) and  addressed
to the appropriate party at the respective addresses shown below.
All  such notices shall be deemed given on the earlier of  actual
receipt  or  refusal of receipt by the addressee. The  respective
addresses and additional notice parties are as follows:

     If to Owner:    Commercial Lakeway Limited Partnership
                     c/o  Credit  Suisse  First  Boston  Mortgage Capital LLC
                    277 Park Avenue
                    New York, New York  10172
                    Attn:  Lawrence Goland

     With a copy to: Commercial Lakeway Limited Partnership
                     c/o  Credit  Suisse  First  Boston  Mortgage Capital LLC
                    Eleven Madison Avenue
                    New York, New York  10172
                    Attn: Pamela McCormack, Esq.

     And a copy to: Shaw Pittman
                    2300 N Street, N.W.
                    Washington, D.C.  20037
                    Attn:  Thomas R. Petty, Esq.

     If to Development   Stratus Properties Inc.
     Manager:       98 San Jacinto Boulevard, Suite 220
                    Austin, Texas  78701
                    Attn: William H. Armstrong, III

     With a copy to:  Arbrust Brown & Davis, L.L.P.
                    100 Congress Avenue, Suite 1300
                    Austin, Texas  78701
                    Attn: Kenneth N. Jones

Any  party  may  at  any  time change its respective  address  by
sending written notice to the other parties of the change in  the
manner hereinabove prescribed.

     6.3   GOVERNING  LAW. THIS AGREEMENT IS BEING  EXECUTED  AND
DELIVERED AND IS INTENDED TO BE PERFORMED IN THE STATE OF  TEXAS,
AND  THE  TERMS  AND PROVISIONS HEREOF SHALL BE GOVERNED  BY  AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

     6.4   Not a Third Party Beneficiary Contract.   Neither this
Agreement  nor  any part hereof nor any service, relationship  or
other matter alluded to herein shall inure to the benefit of  any
third  party  (specifically  including  any  lender,  tenants  or
contractors), to any trustee in bankruptcy, to any  assignee  for
the   benefit  of  creditors,  to  any  receiver  by  reason   of
insolvency,  to  any  other fiduciary or officer  representing  a
bankruptcy  or  insolvent  estate  of  either  party  or  to  the
creditors  or  claimants  of such an estate.  In  addition,  this
Agreement  shall terminate and be of no further force  or  effect
upon  the  filing  of  any  bankruptcy  petition  by  or  against
Development Manager.

     6.5   Validity.  If any term or provision of this  Agreement
or  the  application thereof to any person or circumstance shall,
to any extent, be invalid or unenforceable, the remainder of this
Agreement,  or  the  application of such  term  or  provision  to
persons or circumstances other than those as to which it is  held
invalid or unenforceable, shall not be affected thereby, and each
term  and  provision  of this Agreement shall  be  valid  and  be
enforced to the fullest extent permitted by law.

     6.6   Entire Agreement.  This Agreement contains the  entire
agreement between the parties hereto with respect to the  matters
herein  contained  and  any agreement  hereafter  made  shall  be
ineffective to effect any change or modification, in whole or  in
part, unless such agreement is in writing and signed by the party
against whom enforcement of the change or modification is sought.
This  Agreement  shall bind, and inure to  the  benefit  of,  the
parties   hereto   and   their   respective   successors,   legal
representatives and assigns.

     6.7   Attorneys'  Fees.    If either  Owner  or  Development
Manager  employs  an  attorney to enforce or  defend  its  rights
hereunder, the prevailing party shall be entitled to recover  its
reasonable  attorneys'  fees,  costs  and  expenses  incurred  in
connection with such enforcement or defense.

     6.8   INDEMNIFICATION  PROVISIONS. THIS  AGREEMENT  CONTAINS
INDEMNIFICATION PROVISIONS SPECIFICALLY DESCRIBED IN SECTION  5.8
HEREOF.

     6.9   Subordination.    This  Agreement  and  any  extension
hereof  shall be subordinate to any mortgage or similar  security
instrument  now  or  hereafter affecting the  Property,  and  all
renewals,   modifications,   consolidations,   replacements   and
extensions  thereof (a "Mortgage"). Development  Manager  further
agrees  to  attorn  to  the  holder of any  Mortgage  or  similar
security instrument affecting the Property, and any successor  or
assignee thereof, upon Owner's being dispossessed by such  holder
of  Owner's  interest in all or any portion of the Property.  The
provisions  of  this Section 6.9 shall be self-operative  and  no
further  instrument  of  subordination  or  attornment  shall  be
required.   Development  Manager  shall  execute   promptly   any
certificate  or  other document that Owner or  any  mortgagee  or
other security holder may request as to such subordination and/or
attornment,  which  certificate  or  document  may  include  such
customary  and  normal provisions as Owner may determine  in  its
sole  discretion. In the event that Development Manager fails  to
execute  and  deliver such certificate or document on  or  before
five  (5)  business  days  after written  notice  to  Development
Manager by Owner, then without any further notice and opportunity
to  cure, such failure by Development Manager shall be deemed  to
be an event for Cause hereunder.

     6.10   Representations,   Warranties   and   Covenants    of
Development  Manager.   In order to induce Owner  to  enter  into
this   Agreement,  Development  Manager  hereby  represents   and
warrants to, and covenants and agrees with, Owner as follows:

          (a)  Development Manager is a Delaware corporation,  is
duly  formed and legally existing under the laws of the state  of
its  formation and is duly qualified to do business in the  State
of Texas.

          (b)   Development Manager has full power and  authority
to  enter  into this Agreement and to carry out the  transactions
herein  contemplated,  and  that  the  undersigned  officers   of
Development  Manager have all necessary authority to execute  and
deliver this Agreement on behalf of Development Manager.

          (c)    This  Agreement  has  been  duly  executed   and
delivered by Development Manager and constitutes the legal, valid
and  binding  obligations of Development Manager  enforceable  in
accordance with their terms, subject to laws applicable generally
to creditor's rights.

          (d)   Development Manager shall deliver to Owner,  upon
the  effective  date hereof (i) a good standing certificate  from
the  State  of  Texas,  and  (ii) an incumbency  certificate  and
resolutions of Development Manager authorizing the execution  and
delivery  by Development Manager of this Agreement, certified  by
an  authorized  officer  of Development Manager  as  being  true,
correct and complete.

          (e)   There  is  no claim, litigation,  proceedings  or
governmental  investigation pending, or as far  as  is  known  to
Development Manager, threatened, against Development  Manager  or
relating to the Property or the transactions contemplated by this
Agreement  which does, or may reasonably be expected  to,  affect
the  ability of Development Manager to enter into this  Agreement
or  to  carry  out its obligations hereunder, and, to Development
Manager's actual knowledge, there is no basis for any such claim,
litigation, proceedings or governmental investigation.

          (f)  Neither the consummation of the actions contemplated by this
Agreement on the part of Development Manager to be performed, nor
the  fulfillment of the terms, conditions and provisions of  this
Agreement, conflicts with or will result in the breach of any  of
the  terms, conditions or provisions of, or constitute a  default
under,  any  agreement, indenture, instrument or  undertaking  to
which Development Manager is a party or by which it is bound.

          (g)  Development Manager is familiar with and abides by all
Federal,  state,  local  and  other applicable  laws,  rules  and
regulations  with  respect to (1) land  sales,  (2)  real  estate
settlement  procedures,  (3) non-discrimination  based  on  race,
gender  and  otherwise,  (4)  the  licensure  and  regulation  of
brokers,  agents  and other real estate professionals  generally,
and (5) all other obligations and services of Development Manager
under  this Agreement.  Development Manager covenants  to  comply
with  all  such laws, rules and regulations now and hereafter  in
effect   at   all  times  during  the  Term  of  this  Agreement.
Development  Manager specifically hereby represents that  it  and
its  personnel  providing sales services hereunder  are,  to  the
extent required by law, duly licensed, and covenants, at its sole
cost  and  expense, to obtain and keep in full force  and  effect
throughout  the Term of this Agreement all licenses  and  permits
required  to  be  maintained  by  Development  Manager  and   its
personnel in connection with the rendering of services hereunder.

          (h)  The Development Budget attached hereto is accurate and
complete  and  is  sufficient  for the  purposes  of  developing,
managing,  maintaining,  operating and selling  the  Property  in
accordance  with  the  Business  Plan  and  the  terms  of   this
Agreement,  and  Development Manager has obtained  a  bona  fide,
binding   and   legally  enforceable  commitment  for   financing
satisfying the terms of this Agreement and sufficient to fund all
costs and expenses set forth on the Development Budget.

          (i)  The Business Plan attached hereto is feasible and can be
completed within the Term of this Agreement at an aggregate  cost
not to exceed the Development Budget, and Development Manager  is
not  aware of any pending or threatened moratoria or proposed  or
enacted laws, statutes, ordinances, regulations, rules or  orders
which  would limit the development, construction and sale of  the
Property as contemplated in the Business Plan.

          (j)  All necessary and required inspections, approval, permits
and  licenses have been obtained to permit, as a matter of right,
without  special  permit,  special  exception  or  variance,  the
development of the Vista Royale - non-commercial tract into [131]
single-family homesites.

     6.11  Publicity and Public Relations. Owner shall  have  the
exclusive right to control, manage and monitor all publicity  and
public   relations  with  respect  to  the  Property  or  Owner's
ownership thereof.

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      IN  WITNESS WHEREOF, intending to be legally bound  hereby,
the  parties  hereto  have executed this  Development  Management
Agreement  under  seal as of the day and year  hereinabove  first
written.

WITNESS:                      OWNER:

                              COMMERCIAL LAKEWAY LIMITED
                              PARTNERSHIP,
                              a Delaware limited partnership


/s/  witness                       By: /s/ Edward J. Santoro
(Seal)					  -----------------------
Name: witness                      Name: Edward J. Santoro
Title: Director                    Title: Vice President



WITNESS:                      DEVELOPMENT MANAGER:

                              STRATUS PROPERTIES INC.,
                              a Delaware corporation


/s/ Kenneth N. Jones               By:/s/ William H. Armstrong III
(Seal)                                ----------------------------
Name: Kenneth N. Jones             Name:  William H. Armstrong III
Title: General Counsel             Title: President