Document:

Exhibit 10.1

THIRD AMENDMENT
AGREEMENT

This
THIRD AMENDMENT AGREEMENT (this “Amendment”) is made as of the 26th day of June, 2006 among:

(a)  EPIQ SYSTEMS, INC., a Missouri corporation (“Borrower”);

(b)  the Lenders, as defined in the Credit
Agreement, as hereinafter defined;

(c)  KEYBANK NATIONAL ASSOCIATION, as lead
arranger, sole book runner and administrative agent for the Lenders under the
Credit Agreement (“Agent”);

(d)  NATIONAL CITY BANK OF THE MIDWEST, as
co-documentation agent; and

(e)  SILICON VALLEY BANK, as co-documentation
agent.

WHEREAS,
Borrower, Lenders and Agent are parties to that certain Amended and Restated
Credit and Security Agreement, dated as of November 15, 2005, that
provides, among other things, for loans and letters of credit aggregating One
Hundred Twenty-Five Million Dollars ($125,000,000), all upon certain terms and
conditions (as amended and as the same may from time to time be further
amended, restated or otherwise modified, the “Credit Agreement”);

WHEREAS,
Borrower, Agent and the Lenders desire to amend the Credit Agreement to modify
certain provisions thereof and add certain provisions thereto;

WHEREAS,
each capitalized term used herein and defined in the Credit Agreement, but not
otherwise defined herein, shall have the meaning given such term in the Credit
Agreement; and

WHEREAS,
unless otherwise specifically provided herein, the provisions of the Credit
Agreement revised herein are amended effective as of the date of this
Amendment;

NOW,
THEREFORE, in consideration of the premises and of the mutual covenants herein
and for other valuable consideration, Borrower, Agent and the Lenders agree as
follows:

1.    Amendment to Definitions.
Article I of the Credit Agreement is hereby amended to delete the
definitions of “Derived Base Rate” and “Derived Eurodollar Rate” therefrom and
to insert in place thereof, respectively, the following:

“Derived Base Rate” shall
mean (a) prior to the Interest Reduction Date, a rate per annum equal to
the sum of the Applicable Margin (from time to time in effect) for Base Rate
Loans plus the Base Rate, and (b) on the Interest Reduction Date and
thereafter, a rate per annum equal to (i) the Applicable Margin (from time
to time in effect) for Base Rate Loans minus twenty-five (25) basis points,
plus (ii) the Base Rate.

 1
 

 

“Derived Eurodollar Rate”
shall mean (a) prior to the Interest Reduction Date, a rate per annum
equal to the sum of the Applicable Margin (from time to time in effect) for
Eurodollar Loans plus the Eurodollar Rate, and (b) on the Interest Reduction
Date and thereafter, a rate per annum equal to (i) the Applicable Margin
(from time to time in effect) for Eurodollar Loans minus twenty-five (25) basis
points, plus (ii) the Eurodollar Rate.

2.             Addition to Definitions.
Article I of the Credit Agreement is hereby amended to add the following
new definitions thereto:

“Applicable Margin
Adjustment Date” shall mean the first day of each month following the date upon
which Agent should have received, pursuant to Section 5.3(a) and (b) hereof,
the Consolidated financial
statements of Borrower.

“Equity Offering
Completion Date” shall mean the first day after June 26, 2006 that
Borrower shall have successfully completed an offering and sale of common stock
in an amount equal to or greater than Twenty-Five Million Dollars
($25,000,000).

“Interest Reduction Date”
shall mean the first Applicable Margin Adjustment Date following the Equity
Offering Completion Date.

“Term Loan Maturity Date”
shall mean the earlier of the Accelerated Maturity Date or June 30, 2007; provided
that there shall be no Accelerated Maturity Date if an Acceptable
Non-Acceleration Event shall occur prior to the Accelerated Maturity Date.

3.             Amendment to Term Loan.
Article II of the Credit Agreement is hereby amended to delete Section 2.3
therefrom and to insert in place thereof the following:

Section 2.3. Term
Loan.

Subject to the terms and
conditions of this Agreement, the Term Lenders shall make the Term Loan to
Borrower on the Closing Date, in the amount of the Term Loan Commitment. The
Term Loan shall be payable in full on the Term Loan Maturity Date. Borrower
shall notify Agent, in accordance with the notice provisions of Section 2.6
hereof, whether the Term Loan will be a Base Rate Loan or Eurodollar Loans. The
Term Loan may be a mixture of a Base Rate Loan and Eurodollar Loans.

4.             Amendment to Term Loan Interest.
Section 2.4 of the Credit Agreement is hereby amended to delete subsection
(c)(ii) therefrom and to insert in place thereof the following:

(c)(ii)              Eurodollar Loans. With
respect to any portion of the Term Loan that shall be a Eurodollar Loan,
Borrower shall pay interest on the unpaid principal amount of such Eurodollar
Loan outstanding from time to time, fixed in advance on the first day of the
Interest Period applicable thereto through the last day of the Interest Period
applicable thereto (but subject to changes in the Applicable Margin for
Eurodollar Loans and subject to the additional increase pursuant to subpart (B) below),
at (A) for the period from the Closing Date through April 15, 2007,
the Derived Eurodollar Rate, and (B) on April 16,

 2
 

 

2007 and thereafter, the Derived Eurodollar Rate plus
two hundred (200) basis points. Interest on such Eurodollar Loan shall be
payable on each Interest Adjustment Date with respect to an Interest Period
(provided that if an Interest Period shall exceed three months, the interest
must be paid every three months, commencing three months from the beginning of
such Interest Period).

5.             Closing Items. Concurrently
with the execution of this Amendment, Borrower shall:

(a)            cause each Guarantor of Payment to
execute the attached Acknowledgement and Agreement;

(b)           pay an amendment fee to Agent, (i) for
the pro-rata benefit of the Revolving Lenders, in an amount equal to ten basis
points multiplied by the Revolving Amount, plus (ii) for the pro-rata
benefit of the Term Lenders, in an amount equal to ten basis points multiplied
by the outstanding principal balance of the Term Loan; and

(c)           pay all legal fees and expenses of
Agent in connection with this Amendment.

6.             Representations and Warranties.
Borrower hereby represents and warrants to Agent and the Lenders that (a) Borrower
has the legal power and authority to execute and deliver this Amendment; (b) the
officers executing this Amendment have been duly authorized to execute and
deliver the same and bind Borrower with respect to the provisions hereof; (c) the
execution and delivery hereof by Borrower and the performance and observance by
Borrower of the provisions hereof do not violate or conflict with the
organizational agreements of Borrower or any law applicable to Borrower or
result in a breach of any provision of or constitute a default under any other
agreement, instrument or document binding upon or enforceable against Borrower;
(d) no Default or Event of Default exists under the Credit Agreement, nor
will any occur immediately after the execution and delivery of this Amendment
or by the performance or observance of any provision hereof; (e) Borrower
is not aware of any claim or offset against, or defense or counterclaim to,
Borrower’s obligations or liabilities under the Credit Agreement or any Related
Writing; and (f) this Amendment constitutes a valid and binding obligation
of Borrower in every respect, enforceable in accordance with its terms.

7.             References to Credit Agreement.
Each reference that is made in the Credit Agreement or any Related Writing
shall hereafter be construed as a reference to the Credit Agreement as amended
hereby. Except as herein otherwise specifically provided, all terms and
provisions of the Credit Agreement are confirmed and ratified and shall remain
in full force and effect and be unaffected hereby. This Amendment is a Related
Writing.

8.             Waiver. Borrower, by signing
below, hereby waives and releases Agent and each of the Lenders, and their
respective directors, officers, employees, attorneys, affiliates and
subsidiaries, from any and all claims, offsets, defenses and counterclaims of
which Borrower is aware, such waiver and release being with full knowledge and
understanding of the circumstances and effect thereof and after having
consulted legal counsel with respect thereto.

 3
 

 

9.             Counterparts. This Amendment
may be executed in any number of counterparts, by different parties hereto in
separate counterparts and by facsimile signature, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute but one and the same agreement.

10.           Headings. The headings,
captions and arrangements used in this Amendment are for convenience only and
shall not affect the interpretation of this Amendment.

11.           Severability. Any term or
provision of this Amendment held by a court of competent jurisdiction to be
invalid or unenforceable shall not impair or invalidate the remainder of this
Amendment and the effect thereof shall be confined to the term or provision so
held to be invalid or unenforceable.

12.           Governing Law. The rights and
obligations of all parties hereto shall be governed by the laws of the State of
Ohio, without regard to principles of conflicts of laws.

[Remainder of page intentionally left blank.]

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JURY
TRIAL WAIVER. BORROWER, THE LENDERS AND AGENT, TO THE EXTENT
PERMITTED BY LAW, EACH HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG
BORROWER, THE LENDERS AND AGENT, OR ANY THEREOF, ARISING OUT OF, IN CONNECTION
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS
RELATED THERETO.

IN
WITNESS WHEREOF, the parties have executed and delivered this Amendment as of
the date first set forth above.

	
  

  	
  EPIQ SYSTEMS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Elizabeth M. Braham

  
	
   

  	
   

  	
  Elizabeth M. Braham

  
	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  
	
   

  	
  KEYBANK NATIONAL ASSOCIATION,

  as Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Jeff Kalinowski

  
	
   

  	
   

  	
  Name: Jeff Kalinowski

  
	
   

  	
   

  	
  Title: Senior Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NATIONAL CITY BANK OF THE MIDWEST,

  as Co-Documentation Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Alyson D. Ogden

  
	
   

  	
   

  	
  Name:   Alyson D. Ogden

  
	
   

  	
   

  	
  Title:   Associate

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SILICON VALLEY BANK,

  as Co-Documentation Agent and as a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/  Janice Galbavy

  
	
   

  	
   

  	
  Name:   Janice Galbavy

  
	
   

  	
   

  	
  Title:   Relationship Manager

  

 

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ACKNOWLEDGMENT AND
AGREEMENT

The undersigned consent
and agree to and acknowledge the terms of the foregoing Third Amendment
Agreement dated as of June 26, 2006. The undersigned further agree that
the obligations of the undersigned pursuant to the Guaranty of Payment executed
by the undersigned shall remain in full force and effect and be unaffected
hereby.

The undersigned hereby
waive and release Agent and the Lenders and their respective directors,
officers, employees, attorneys, affiliates and subsidiaries from any and all
claims, offsets, defenses and counterclaims of which the undersigned are aware,
such waiver and release being with full knowledge and understanding of the
circumstances and effect thereof and after having consulted legal counsel with
respect thereto.

JURY
TRIAL WAIVER. THE UNDERSIGNED, TO THE EXTENT PERMITTED BY
LAW, HEREBY WAIVE ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY
DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWERS,
AGENT, THE LENDERS AND THE UNDERSIGNED, OR ANY THEREOF, ARISING OUT OF, IN
CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
AMONG THEM IN CONNECTION WITH THIS AMENDMENT OR ANY NOTE OR OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR THE
TRANSACTIONS RELATED THERETO.

 

	
  BANKRUPTCY SERVICES LLC

  	
   

  	
   

  	
  FINANCIAL BALLOTING GROUP, LLC

  
	
  EPIQ SYSTEMS
  ACQUISITION, INC.

  	
   

  	
   

  	
   

  
	
  POORMAN-DOUGLAS
  CORPORATION

  	
   

  	
   

  	
   

  
	
  HILSOFT, INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/   Elizabeth
  M. Braham

  	
   

  	
  By:

  	
  /s/Elizabeth M. Braham

  
	
   

  	
  Elizabeth M.
  Braham

  	
   

  	
   

  	
  Elizabeth M. Braham

  
	
   

  	
  Secretary

  	
   

  	
   

  	
  Secretary, Chief Financial Officer and Treasurer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NOVARE, INC.

  	
   

  	
   

  	
  NMATRIX, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/   Elizabeth
  M. Braham

  	
   

  	
  By:

  	
  /s/Elizabeth M. Braham

  
	
   

  	
  Elizabeth M.
  Braham

  	
   

  	
   

  	
  Elizabeth M. Braham

  
	
   

  	
  Treasurer and
  Secretary

  	
   

  	
   

  	
  Executive Vice President and ChiefFinancial Officer

  

 

 

 6EXHIBIT
10.1

DEVELOPMENT
OPTION AGREEMENT

This
is an agreement made effective as of June 21, 2006, between W&G
Partnership, Ltd., Desta Three Partnership, Ltd., and Desta Six Partnership,
Ltd. (herein together referred to as “Owner”), and BEHRINGER HARVARD HOLDINGS,
LLC, a Delaware limited liability company 
(“Harvard”).

ARTICLE I

RECITALS

a.                                       As
of the date of this Agreement, pursuant to that Purchase and Sale Agreement
between Desta One Partnership, Ltd., Desta Two Partnership, Ltd, and Desta Five
Partnership, Ltd, as Seller, and Behringer Harvard Terrace LP (“Harvard Terrace”),
as Buyer (the “Purchase Agreement”), Harvard Terrace has acquired from certain
affiliates of Owner those certain office buildings known as The Terrace I, II,
V and VII Buildings (the “Terrace Property”). In addition, Owner is the owner
of the development tracts described on Attachment #1 attached hereto (the “Development
Land”).

b.                                      The
Development Property is subject to certain restrictions and development
parameters described in the Declarations of Covenants, Conditions and
Restrictions for The Terrace Planned Unit Development recorded in Volume 12740,
Page 260, of the Real Property Records of Travis County, Texas, and in the
Restrictive Covenants, Terrace P.U.D., City of Austin Zoning File No. C814-86-009
as recorded in Volume 10252, Page 135, of the Real Property Records of
Travis County, Texas (together referred to as the “Restrictive Covenants”).

c.                                       Owner
has agreed to grant Harvard a right of first offer relating to the acquisition
and development of the Development Property. In consideration for funds paid
pursuant to the Purchase Agreement, and in consideration of Ten and 00/100
($10.00) cash and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Harvard and Owner agree as
follows:

ARTICLE II

DEVELOPMENT OF DEVELOPMENT PROPERTY

a.                                       Owner
and Harvard agree that, subject to the terms of this Agreement, Harvard shall
have an exclusive right of first offer to participate in the future development
of each parcel of the Development Land. Development of the Development Land
shall be governed by a Development Agreement to be entered into by the New
Development Entity (as herein defined) and 

 

ClayDesta, L.P. (“Developer”) which will include the
terms outlined in Attachment #2 and 2A.

b.                                      At
such time as Owner determines to develop any parcel of the Development Land,
Owner shall advise Harvard of its proposed project by presenting a proposal
including a detailed proforma of Owner’s proposal (the “Offer Notice”). Said
Offer Notice shall include a development plan, a development budget, pro forma
income and expense estimates for the cost of development, including project
interest costs. Harvard shall advise Owner in writing within fifteen (15) business
days following receipt of the Offer Notice if Harvard desires to participate in
development of the parcel of Development land under the terms proposed by Owner.
Should Harvard elect not to participate in the development of a parcel of
Development Land or should Harvard fail to give Owner written notice of its
intent to participate in such development within fifteen (15) business days of
receipt of the Offer Notice, Owner shall be free to develop the parcel of
Development Land in the manner described in the Offer Notice without the
participation of Harvard. If, after Harvard’s election not to participate in
the development of a parcel of Development Land, Owner desires to pursue
development of such parcel of Development Land in a manner materially different
than presented to Harvard in the Offer Notice, then Owner shall first present a
revised Offer Notice for Harvard’s review in accordance with this Agreement. As
used herein the term “materially different” shall mean a proposal (i) with
a reduction of hard costs for the development of the parcel of Development
Property which is 10% or greater than set forth in the Offer Notice or (ii) with
a projected change in cash returns to Owner and Harvard of more than 10%
greater than set forth in the Offer Notice.

c.                                       Should
Harvard give notice of its intent to participate in the development of said
parcel of Development Land, Owner and Harvard shall promptly form an entity in
which to develop such parcel of Development Land (“New Development Entity”). Owner
and Harvard shall mutually agree on the fair market value of the parcel of
Development Land which Owner shall contribute to the New Development Entity. Should
Owner and Harvard be unable to agree upon the fair market value of the parcel
of Development Land, then Owner and Harvard shall submit the issue to
arbitration using the following procedure. Within ten (10) days after
Owner has advised Harvard of its election to proceed with arbitration, Owner
and Harvard shall each at their own expense, select an appraiser, each who
shall be a qualified and impartial person licensed in the State of Texas as an
MAI appraiser with not less than five (5) years experience in appraising
undeveloped commercial property in Travis County, Texas. Within thirty (30)
days of appointment, each appraiser shall render a written opinion as to the
value of the parcel. If the appraisals are within 10% of each other, the value
of the parcel shall be the average of the two appraisals. If the appraisals
differ by more than 10%, then the appraisers shall jointly appoint a third
appraiser who shall render an 

 2
 

 

appraisal (“Third Appraisal”) within thirty (30) days
of appointment. Whichever of the first two appraisals the Third Appraisal is
closest to shall be the fair market value of the parcel. Harvard and Owner
agree the arbitration process shall not delay Owner from proceeding with the
development process for the parcel of Development Land. Harvard and Owner will
amend the formation documents for the New Development Entity at the conclusion
of the arbitration process, if such amendments are required.

d.                                      Harvard’s
equity contribution shall be used to fund architectural fees, engineering fees,
other professional fees, the cost of application for appropriate permits from
governmental entities as well as any of the costs associated with development
of such parcel.

e.                                       The
New Development Entity will be owned in percentage to be determined by Owner
and Harvard, provided Harvard shall own not less than 50% of the New
Development Entity and Owner, by means of the contribution of the parcel of
Development Land and cash, shall, at Owner’s sole option, own up to 50% of the
New Development Entity. The governing document of the New Development Entity
shall provide:

(i)                                     the
distributions from the New Development Entity will be in the same percentage as
ownership of the New Development Entity until Harvard receives a 25% IRR on its
contributed equity and thereafter distributions will be 25% to Harvard and 75%
to Owner;

(ii)                                  a
four (4) to six (6) year hold strategy;

(iii)                               a
buy-sell arrangement at fair market value if either party desires to sell a
completed building after four (4) years;

(iv)                              any
project must be 50% preleased prior to commencement of construction;

(v)                                 neither
party shall propose development of a parcel unless the proforma reflects not
less than a return of eleven percent (11%) on the total estimated cost for
development of such parcel, assuming a five percent (5%) tenant vacancy rate;
and

(vi)                              Owner
may assign all or part of its ownership interest to entities owned and/or
controlled by Clayton W. Williams, Jr., Modesta S. Williams and/or the
children of Clayton W. Williams, Jr., without the consent of Harvard.

f.                                         In
the event Harvard determines it desires to develop any parcel of the
Development Land, Harvard shall advise Owner of its proposed project by 

 3
 

 

presenting a proposal including a detailed proforma of
Harvard’s proposal (“Harvard’s Offer Notice”). The Harvard Offer Notice shall
include a development plan, a development budget, proforma income and expense
estimates for the cost of development, including project interest costs. Owner
shall advise Harvard in writing within fifteen (15) business days if Owner
desires to participate in development of the parcel of Development Land under
the terms proposed by Harvard. Should Owner elect not to participate in the
development of a parcel of Development Land or should Owner fail to give
Harvard written notice of its intent to participate in such development within
fifteen (15) business days of receipt of, Owner shall convey said parcel of
Development Land to Harvard at the fair market value of said parcel plus 80% of
all actual costs previously paid to third parties for engineering and
architectural plans associated with development of Terrace III or Terrace VI at
such time as those parcels are developed. If Harvard and Owner cannot agree
upon the fair market value of the parcel, Harvard and Owner shall utilize the
procedure described in paragraph c above to determine the fair market value of
the parcel. Should Owner give notice to Harvard of its intent to participate in
the development of said parcel of Development Land in accordance with the
Harvard Offer Notice, Owner and Harvard shall proceed under the provisions of
paragraphs c, d and e of this Article II and ClayDesta, L.P., shall be the
Developer under the terms of a Development Agreement.

ARTICLE III

TERMINATION OF RIGHT OF FIRST OFFER

a.                                       Owner
and Harvard agree that should Harvard decline to participate in the development
of parcels of Development Land, Owner shall have the right to terminate this
Agreement as to the remainder of the undeveloped Development Land upon the
second proposal relating to the second separate parcel which Harvard declines
to be a participant.

b.                                      Owner
and Harvard agree that, should a Development Agreement not be executed relating
to at least one of the parcels of Development Land on or before August 1,
2011, this Agreement may be terminated by Owner by giving written notice to
Harvard.

c.                                       Owner
and Harvard agree that should the Management Agreement with ClayDesta, L.P.,
executed pursuant to the Purchase Agreement be terminated by Harvard Terrace
without cause, this Agreement may be terminated by Owner by giving written
notice to Harvard. In this event, Owner agrees that for a period of 60 months
following termination of the Management Agreement, Owner (including its agents,
affiliates and property managers) will not solicit for relocation any tenant of
any portion of the Terrace Property or any portion of the Development Land owned
by Harvard or an affiliate of Harvard. In the event 

 4
 

 

that ClayDesta, L.P. terminates the Management
Agreement, this agreement shall continue.

ARTICLE IV

GENERAL PROVISIONS

a.    Governing Law. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Texas.

b.    Captions Not Binding; Exhibits. The
captions in this Agreement are inserted for reference only and in no way
define, describe or limit the scope or intent of this Agreement or of any of
the provisions hereof. All Exhibits attached hereto shall be incorporated by
reference as if set out herein in full.

c.    Binding Effect. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors and permitted assigns.

d.    Severability. If any term or provision
of this Agreement or the application thereof to any persons or circumstances
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 enforced to the fullest extent permitted by Law.

e.    Notices. Any notice, request,
demand, consent, approval and other communications under this Agreement shall
be in writing, and shall be deemed duly given or made at the time and on the
date when received by facsimile (provided that the sender of such communication
shall orally confirm receipt thereof by the appropriate parties and send a copy
of such communication to the appropriate parties within one (1) Business
Day of such facsimile) or when personally delivered as shown on a receipt
therefore (which shall include delivery by a nationally recognized delivery
service such as Federal Express, UPS Next Day Air, Purolator Courier, U.S. Mail
or Airborne Express) or sent via e-mail, to the address for each party set
forth below. Any party, by written notice to the other in the manner herein
provided, may designate an address different from that set forth below.

 5
 

 

 

	
  If to Harvard:

  	
   

  	
  BEHRINGER HARVARD HOLDINGS, LLC,

  15601 Dallas Parkway, Suite 600

  Addison, Texas 75001-6026

  Attention: James D. Fant

  Telephone No.: (214) 655-1600

  Telecopy No.: (214) 655-1610

  E-mail: jfant@behringerharvard.com

  
	
   

  	
   

  	
   

  
	
     with
  a copy to:

  	
   

  	
  Powell & Coleman

  15601 Dallas Parkway, Suite 1380

  Addison, Texas 75001-6026

  Attention: Randy Osborne

  Telephone No.: (214) 890-7116

  Telecopy No.: (214) 373-8768

  E-mail: rosborne@psclaw.com

  
	
   

  	
   

  	
   

  
	
  If to
  Owner:

  	
   

  	
  W&G Partnership, Ltd.

  6 Desta Drive, Suite 6500

  Midland, Texas 79705

  Attention: L. Paul Latham

  Telephone No.: (432) 688-3212

  Telecopy No.: (432) 688-3247

  E-mail: platham@claytonwilliams.com

  
	
   

  	
   

  	
   

  
	
     with
  a copy to:

  	
   

  	
  Stubbeman McRae Sealy Laughlin &
  Browder, Inc.

  550 W. Texas Ave, Ste. 800

  Midland, Texas 79701

  Attn: Robert V. Rendall, Jr.

  Telephone No.: (432) 688-0246

  Telecopy No.: (432) 682-4884

  E-mail: rrendall@stubbemanlawfirm.com

  

 

f.     Assignability. This Agreement
may not be assigned in whole or in part by either party hereto without the
prior written consent of the other, provided Owner shall have the right to
assign all or any part of this Agreement to an Affiliate of Owner AND Harvard
shall have the right to assign all or any part of this Agreement of an
Affiliate of Harvard. As used herein “Affiliate of Owner” shall mean any entity
owned or controlled by Clayton W. Williams, Jr., Modesta S. Williams or
the children of Clayton W. Williams, Jr.

g.    Counterparts. This
Agreement may be executed in counterparts, each of which shall be an original
and all of which counterparts taken together shall constitute one and the same
agreement.

 6
 

 

h.    No Recordation. Harvard and Owner each
agrees that neither this Agreement nor any memorandum or notice hereof (except
as otherwise specifically authorized herein) shall be recorded.

Executed effective June 21, 2006.

	
  OWNER:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  W & G Partnership, Ltd.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  ClayDesta L.P.

  	
   

  	
   

  	
   

  
	
   

  	
  its general
  partner

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  ClayDesta Operating L.L.C.

  	
   

  	
   

  
	
   

  	
   

  	
  its general partner

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ L. Paul Latham

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  L. Paul Latham

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  President

  	
   

  	
   

  
							

 

	
  Desta Three Partnership, Ltd.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Desta Three Development Corp.

  	
   

  	
   

  
	
   

  	
  its general
  partner

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ L. Paul Latham

  	
   

  	
   

  
	
   

  	
   

  	
  L. Paul Latham

  	
   

  	
   

  
	
   

  	
   

  	
  President

  	
   

  	
   

  
						

 

	
  Desta Six Partnership, Ltd.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  Desta Six Development Corp.

  	
   

  	
   

  
	
   

  	
  its general
  partner

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ L. Paul Latham

  	
   

  	
   

  
	
   

  	
   

  	
  L. Paul Latham

  	
   

  	
   

  
	
   

  	
   

  	
  President

  	
   

  	
   

  
						

 

 7
 

 

 

	
  HARVARD:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Behringer Harvard Holdings, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Gerald J. Reihsen, III

  	
   

  	
   

  
	
   

  	
  Gerald J. Reihsen, III

  	
   

  	
   

  
	
   

  	
  Secretary

  	
   

  	
   

  

 

 8

 

ATTACHMENT #1

DEVELOPMENT
PROPERTY

TRACT #1 — (Terrace VI Office Building): Lot(s) 2, Block
“B” THE TERRACE, SECTION SEVEN, a subdivision in Travis County, Texas,
according to the map or plat thereof, recorded under Document No. 200100072
of the Official Public Records of Travis County, Texas.

TRACT #2 — (Terrace III Office Building): Lot(s) 2,
Block “A” THE TERRACE, SECTION FIVE, a subdivision in Travis County,
Texas, according to the map or plat thereof, recorded under Document No. 200000361
of the Official Public Records of Travis County, Texas.

TRACT
#3 — (Hotel Site): Lot(s) 1, Block “A” THE TERRACE, SECTION FIVE, a
subdivision in Travis County, Texas, according to the map or plat thereof,
recorded under Document No. 200000361 of the Official Public Records of
Travis County, Texas.

TRACT
#4 — (Terrace IV Office Building): Lot(s) 1, Block “B” THE TERRACE, SECTION SEVEN,
a subdivision in Travis County, Texas, according to the map or plat thereof,
recorded under Document No. 200100072 of the Official Public Records of
Travis County, Texas.

TRACT
#5 — (Retail Site): Lot 2, Block “E” of THE TERRACE SECTION SIX, a
subdivision in Travis County, Texas, according to the map or plat thereof,
recorded under Document No. 200000362 of the Official Public Records of Travis
County, Texas.

 9
 

 

ATTACHMENT #2

TERMS OF
DEVELOPMENT AGREEMENT

Any Development
Agreement executed in connection with this Agreement shall contain the
following key terms:

1.             The Developer shall have the
authority to sign documents on behalf of the Owner provided the identified
documents are consistent with the intended construction and use of the Project
as set forth in the final development budget. [As used in this Attachment #2,
the term “Owner” shall mean the New Development Entity].

2.             Within 30 days following execution
of the Development Agreement, Developer shall provide an updated development
plan and development budget adequate for presentation to a third party lender
(the “Development Budget”).

3.             During the term of the Development
Agreement, Developer will be required to provide Owner with a monthly progress
report at the beginning of each month detailing the amount of work on the
Project which has been completed in the previous period in relation to the
schedule for the Project. This report shall also include (i) a detailed
summary of costs and payments, (ii) a marketing status report, and (iii) an
updated construction schedule, each in a format to be supplied prior to
commencement of construction

4.             The terms of the Development Fee and
related issues are included in Attachment 2A.

5.             Owner shall have the right to
terminate the Development Agreement in if one or more of the following events
shall occur:

(a)           the filing by Developer of a
voluntary petition in bankruptcy, the filing by a creditor of an involuntary
petition in bankruptcy which is not dismissed within ninety (90) days, the
adjudication of Developer as bankrupt or insolvent, the filing by Developer of
any petition or answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, assignment for the benefit of
creditors, or similar relief for debtors;

(b)           a failure by Developer to pay any
amounts or monetary obligations due and owing to Owner which is not cured
within ten (10) days following receipt of written notice by Owner
specifying such default;

(c)           failure
by Developer to achieve Substantial Completion of the Project within
one-hundred twenty (120) days after the scheduled date of Completion set forth
in the Project Schedule (as may be adjusted pursuant to a Development
Agreement). As used herein the term “Substantial Completion” shall mean the
issuance of a Certificate of Occupancy for the building shell by the City of
Austin, Texas;

 10
 

 

(d)           a good faith determination by Owner prior
to commencement of construction that completion of the Project is not
economically feasible;

(e)           Total
Project Costs exceed the amount scheduled in the Development Budget in excess
of ten percent (10%) excluding (i) interest costs, (ii) items to be
paid by tenants of the building, (iii) design changes required by law, (iv) increase
resulting from Force Majeure Events, (v) delays caused by the General
Contractor or any subcontractor, (vi) change orders requiring written
consent of the Owner, or (vii) change orders which are funded through
contingency items in the Development Budget (Items (i) through (vii) herein
referred to as “Budget Adjustments”); or

(f)            a
material default by Developer under this Agreement that is not cured within
thirty (30) days following receipt of written notice from Owner specifying the
default; provided, however, that if such default cannot be cured within such
thirty (30) day period through the use of diligent efforts, such period shall
be extended for an additional thirty (30) days; provided, further, that if
Developer promptly commences such cure and thereafter diligently prosecutes
such cure but is unable to complete such cure within the aforesaid two thirty
(30) day periods, Developer shall be afforded an additional sixty (60) days to
complete such cure.

6.             For purposes of the Development
Agreement, “Force Majeure Events” shall consist of abnormal weather
patterns that affect critical path construction, acts (or the failure to act)
by the other party to this Agreement, uncontrollable delay in issuance of
permits, changes in governmental laws, enemy or hostile governmental action,
civil commotion, and fire or other casualty. The party seeking to excuse delay
in performance by reason of a Force Majeure Event must, no later than the tenth
(10th) day of the calendar month immediately following the calendar month in
which such Force Majeure Event occurs, notify the other party thereof in
writing, and of the cause or causes thereof.

7.             So long as the Management Agreement
has not been terminated, prior to substantial completion of the Project the New
Development Entity will enter into a Property Management and Leasing
Subcontract on the same terms found in the current Property Management and
Leasing Subcontract between HPT Management Services, LP and ClayDesta, L.P.

 11
 

 

ATTACHMENT
#2A

Development Fee
Provisions

COMPENSATION

1.             Development Fee. For all services
rendered in connection with the development of the project pursuant to the
terms of the Development Agreement to be executed by Owner and Developer, Developer
shall be paid a fee (the “Development Fee”) equal to 4% of the actual
Controllable Construction Costs for the project. The Development Fee shall be
subject to possible reduction as set forth in Paragraph 3 below. For purposes
hereof, the term “Controllable Construction Costs” shall have the meaning set
forth below. During construction of the project, until the date of Completion
for the project, the Development Fee shall be paid monthly, on the tenth (10th) day of each calendar month,
based on the budgeted Controllable Construction Costs and beginning on the
first day of the month following the date of commencement of construction of
the project in accordance with the following formula:

3% of Controllable Construction Costs

(less amounts advanced prior to commencement)

_______________________________________________
(Divided by)

Number of months in the projected construction
schedule.

Any portion of the Development Fee remaining unpaid as
of the date of Completion shall be paid to Developer within thirty (30) days
after the date of Completion. The Development Fee shall be Developer’s full and
complete compensation for the performance of duties, services, efforts and/or
activities in connection with the development of the project. The term “Completion”
shall mean the issuance of a Certificate of Occupancy for the building shell by
the City of Austin, Texas;

2.             Advances on Development Fee. Notwithstanding
the provisions of paragraph 1 above, Developer shall receive an advance against
the Development Fee prior to the commencement of construction of the project
pursuant to the provisions of this Paragraph 2. The amount of such advance
shall be $25,000 per month beginning on the date that the New Development
Entity formed (as described in the Development Option Agreement) acquires title
to the Development Land upon which the project is to be constructed and ending
on the earlier of (a) the Development Agreement is terminated, or (b) the
date construction of the project commences. Not more than twenty percent (20%)
of the Development Fee shall be paid to Developer prior to commencement of
construction. The advance payable with respect to any partial calendar month
during such period shall be prorated on a per diem basis. The amount of all
advances paid to Developer shall be deducted from the Development Fee payable
to Developer under paragraph 1. At such time as the Terrace III and Terrace VI
Buildings are developed, 

 12
 

 

W&G
Partnership, Ltd., shall be reimbursed for 80% of the actual costs previously
paid to third parties for engineering and architectural plans for each such
building.

3.             Adjustment to Development Fee. Prior to
the final payment described in paragraph 1, a determination shall be made as to
whether the Development Fee should be reduced, as follows:

(a)           If the Controllable Construction
Costs actually incurred to complete the project exceed the Controllable
Construction Costs set forth in the final Development Budget for the project
plus the Budget Adjustments, then the Development Fee shall be reduced by the
lesser of (i) the amount by which incurred Controllable Construction Costs
exceed the Controllable Construction Costs set forth in the Development Budget,
or (ii) one percent (1%) of the incurred Controllable Construction Costs;
and

(b)           If
the date of Completion is more than sixty (60) days after the date of
Completion projected in the Project Schedule (as adjusted for Force Majeure)
and delays resulting from Tenant delay, then the Development Fee shall be
reduced in the following manner:  (A) if
the date of Completion occurs more than thirty (30) days after the projected
date of Completion but not later than forty five (45) days after the projected
Date of Completion, then the Development Fee shall be reduced by .125% of
Controllable Construction Costs; (B) if the date of Completion occurs more
than forty five (45) days after the projected date of Completion but not later
than sixty (60) days after the projected Date of Completion, then the
Development Fee shall be reduced by .25% of Controllable Construction Costs; (C) if
the date of Completion occurs more than sixty (60) days after the projected
date of Completion but not later than seventy five (75) days after the
projected Date of Completion, then the Development Fee shall be reduced by
..375% of Controllable Construction Costs; and (D) if the date of
Completion occurs more than seventy five (75) days after the projected Date of
Completion, then the Development Fee shall be reduced by .5% of Controllable
Construction Costs.

(c)           Notwithstanding
the foregoing provisions of this paragraph 3, in no event shall the aggregate
decrease in the Development Fee pursuant to subparagraph 3(a) and (b) above
exceed one percent (1%) of Controllable Construction Costs.

4.             No Other Compensation. Other than the
Development Fee and construction management fees for tenant build-out, if any,
Developer shall be entitled to no compensation under this Agreement, nor will
Developer be entitled to any reimbursement of expenses except as expressly set
forth in this Agreement. Without limiting the generality of the preceding
sentence, it is specifically agreed that Developer will not be entitled to
reimbursement for (a) the salary and wages, payroll taxes, insurance,
workers’ compensation and other benefits of any employees of Developer; (b) the
cost of forms, papers, ledgers and other supplies and equipment used in the
Developer’s office; (c) the cost of electronic data processing or computer
services that Developer may elect to incur in the performance its duties under
this Agreement; (d) the cost of office equipment acquired by Developer to
enable it to perform its duties hereunder; or (e) the cost of advances
made to employees of Developer. However, the 

 13
 

 

cost of travel and lodging by Developer’s employees
and agents shall be reimbursable in accordance with the Development Budget
approved by Owner.

As used in this Agreement, the term “Controllable
Construction Costs” means the amounts actually expended in connection with
the development of the Project (to be allocated among the Phases as set forth
herein and in the Development Budget), consisting of the following items:  civil and structural engineering costs; costs
of site development; costs of labor and materials; the fees of the Architect and
Consultants; the cost of the General Contractor for the base building shells,
parking garage and other improvements included in the project; the cost of
acquiring and installing base building, common area and lobby fixtures and any
other items covered by the base building construction contract; landscaping
costs; and testing costs; but specifically excluding, without limitation, Land
acquisition costs, ad valorem and other taxes, the costs of insurance premiums,
and debt service.

 14

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