Document:

Exhibit 10.7

DEVELOPMENT AGREEMENT

(Hotel Renovation)

BY AND BETWEEN

BEHRINGER HARVARD CORDILLERA, LLC,

a Delaware limited liability company

(“Owner”)

and

TP CORDILLERA LLC,

a Delaware limited liability company

(“Developer”)

May 10, 2007

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
  PURPOSE

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
  APPOINTMENT AND
  DEVELOPMENT

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.1

  	
   

  	
  Appointment of Developer as Developer

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.2

  	
   

  	
  Acceptance by Developer

  	
   

  	
  3

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.3

  	
   

  	
  Pre-Construction Duties

  	
   

  	
  4

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.4

  	
   

  	
  Project Design

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.5

  	
   

  	
  Other Services

  	
   

  	
  5

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.6

  	
   

  	
  Commencement of Construction

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.7

  	
   

  	
  Project Administration

  	
   

  	
  7

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.8

  	
   

  	
  Limitation on Expenditures

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.9

  	
   

  	
  Employees

  	
   

  	
  11

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.10

  	
   

  	
  Funds for Construction

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.11

  	
   

  	
  Ownership of Information and Materials

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.12

  	
   

  	
  Hazardous Substances

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.13

  	
   

  	
  Payment for Materials

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 2.14

  	
   

  	
  Completion

  	
   

  	
  13

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  COMPENSATION

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.1

  	
   

  	
  Development Fee

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.2

  	
   

  	
  Adjustment to Development Fee

  	
   

  	
  14

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 3.3.

  	
   

  	
  No Other Compensation

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
  INSURANCE AND
  INDEMNITY

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.1

  	
   

  	
  Insurance Requirements

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.2

  	
   

  	
  Indemnity

  	
   

  	
  15

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.3

  	
   

  	
  Waiver of Subrogation

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 4.4.

  	
   

  	
  Non-Recourse Liability

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  TERM AND
  TERMINATION

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.1

  	
   

  	
  Term

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.2

  	
   

  	
  Termination by Owner

  	
   

  	
  17

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 5.3

  	
   

  	
  Termination by Developer

  	
   

  	
  18

  

 

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  Section 5.4

  	
   

  	
  Additional Remedies

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
  DUTIES UPON
  TERMINATION OR EXPIRATION

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.1

  	
   

  	
  Developer’s Duties

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 6.2

  	
   

  	
  Owner’s Duties

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 7

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.1

  	
   

  	
  Developer’s Representations and Warranties

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 7.2

  	
   

  	
  Owner’s Representations and Warranties

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
  MISCELLANEOUS
  PROVISIONS

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.1

  	
   

  	
  Notices

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.2

  	
   

  	
  Assignment

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.3

  	
   

  	
  Waiver of Lien Claims

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.4

  	
   

  	
  Lender Requirements

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.5

  	
   

  	
  Force Majeure Events

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.6

  	
   

  	
  Governing Law

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.7

  	
   

  	
  Time of Essence

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.8

  	
   

  	
  Compliance Amendments

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.9

  	
   

  	
  Entireties, Beneficiaries

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.10

  	
   

  	
  No Agency

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.11

  	
   

  	
  Attorneys’ Fees

  	
   

  	
  22

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.12

  	
   

  	
  No Waiver

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.13

  	
   

  	
  Entire Agreement

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.14

  	
   

  	
  Severability

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.15

  	
   

  	
  Amendments

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.16

  	
   

  	
  Counterparts

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.17

  	
   

  	
  Additional Acts

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.18

  	
   

  	
  Exhibits

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.19

  	
   

  	
  Limitation of Liability

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.20

  	
   

  	
  Confidentiality

  	
   

  	
  23

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.21

  	
   

  	
  Authority of Developer

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.22

  	
   

  	
  Licenses

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.23

  	
   

  	
  Non-Discrimination Policy

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.24

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  24

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Section 8.25

  	
   

  	
  Dispute Resolution

  	
   

  	
  24

  

 

 2

DEVELOPMENT
AGREEMENT

This Development
Agreement (“Agreement”) is made to be
effective as of the 10th day of May, 2007, by and between BEHRINGER
HARVARD CORDILLERA, LLC, a Delaware limited liability company (“Owner”), and TP CORDILLERA LLC, a
Delaware limited liability company (“Developer”),
as follows:

ARTICLE 1

PURPOSE

A.                                   Owner
is the owner of certain property in Eagle County, Colorado commonly known as
The Lodge and Spa at Cordillera located on the land (the “Land”)
described in Exhibit A attached hereto and
made a part hereof, which property is currently comprised of a 56 room lodge,
approximately 20,000 square feet of spa/fitness center space, approximately
3000 square feet of meeting/banquet space, 2 restaurants and a ski in/ski out
condo at the Strawberry Park Beaver Creek lift (the “Buildings”).

B.                                     Developer
and Owner desire to enter into this Agreement to provide the terms and
conditions upon which Owner will retain Developer to renovate the Buildings and
related improvements (the “Project”)
located on the Land (herein defined).

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

ARTICLE 2

APPOINTMENT AND DEVELOPMENT

Section 2.1                                      Appointment of Developer as Developer.  Owner hereby appoints Developer as its
independent contractor to perform, and delegates to Developer the right and
obligation to supervise, manage and carry out, on behalf and for the account of
Owner, all planning, development and construction management services for the
Project on the Land, as required by, and subject to, the terms and conditions
of this Agreement, as well as the preparation of the Final Development Plan,
Final Development Budget and Final Project Schedule (as each such term is
defined below) and all items related thereto.

Section 2.2                                      Acceptance by Developer.  Developer accepts such appointment and agrees
to perform such services on behalf of and for the account of Owner as required
by, and subject to, the terms and conditions of this Agreement, and agrees to
perform such additional duties and responsibilities as are customarily and
reasonably within the scope of such services and are reasonably designated from
time to time by Owner.  Developer agrees
to use commercially reasonable efforts in the performance of its duties
hereunder, which performance in all respects and at all times shall be carried
out to the same extent and with the same degree of 

 3
 

care and quality as the Developer would exercise in
the conduct of its own affairs if the Developer were the owner of the Project.
Developer agrees to apply prudent and reasonable business practices in the
performance of its duties hereunder and shall exercise that degree of skill,
competence, quality and professional care rendered by the leading and most
reputable companies performing the same or similar type services for first-class
quality hotel and spa projects in the Vail, Colorado area.  Developer will not subcontract any of its
services to any other entity or person without first obtaining Owner’s prior
written consent.  Subject to the other
provisions of this Agreement, Developer, on behalf of Owner, shall manage and
coordinate the development of the Project in accordance with the Final
Development Plan, Final Development Budget and Final Project Schedule (as each
such term is defined below) in a good and workmanlike manner and in accordance
with the standards of professional care applicable to such services.

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

(a)                                  Developer
shall submit to Owner for approval a development plan (the “Development Plan”) for the Project
setting forth a description of the proposed improvements included in the Project,
the schedule for preparation of the plans and specifications for the Project,
and the proposed parameters of agreements with architectural, engineering,
consulting, and general contracting firms. 
Attached hereto as Exhibit B
is a conceptual development plan for the Project that has been approved by
Owner.  Based upon the conceptual
development plan attached hereto as Exhibit B,
within sixty (60) days of execution of this Agreement, Developer shall prepare
and obtain Owner’s written approval of a final Development Plan (the “Final Development Plan”) for the
Project (such approval not to be unreasonably withheld so long as the Final
Development Plan is consistent with the conceptual development plan attached
hereto as Exhibit B, which may be modified by the Owner).

(b)                                 Developer
shall submit to Owner for approval a development budget (the “Development Budget”) for the Project
setting forth the hard costs, soft costs, allocated land acquisition costs and
other expenditures anticipated to be incurred in connection with developing the
Project.  Attached hereto as Exhibit C is a conceptual budget for
the Project that has been approved by Owner. 
Based upon the conceptual budget attached hereto as Exhibit
C, within sixty (60) days of execution of this Agreement,
Developer shall prepare and obtain Owner’s written approval of a final
Development Budget (the “Final Development Budget”)
for the Project (such approval not to be unreasonably withheld so long as the
proposed Final Development Budget is consistent with the conceptual budget
attached hereto as Exhibit C, which may be modified by the Owner).

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

(d)                                 Developer
shall develop and finalize operating pro forma income and 

 4
 

expense statements for
the Project and compute return on investment and other relative indicators to
help determine permanent financing and ownership strategies.

(e)                                  Developer
shall prepare and compile data for the Project, including without limitation,
site information, income and expense statements, schedules, drawings and
renderings. Such items shall be delivered to Owner upon request.

Section 2.4                                      Project Design.  Owner, after consultation with Developer,
shall designate an architect (“Architect”)
as the architect for the Project. 
Developer shall negotiate the contract with the Architect for the
Project, which shall be subject to the review and prior written approval of
Owner.  The contract with the Architect
shall substantially conform with the form, or in the absence of an actual form,
shall substantially conform with the guidelines and contain such specific
provisions as are pre-approved by Owner. 
Owner shall enter into the agreement with the Architect in its
name.  Developer shall not amend or alter
the terms of the Architect’s contract without the prior written approval of
Owner.  Developer shall use diligent
efforts to cause the plans and specifications for the Project to be prepared in
a timely manner and in accordance with the design criteria and the Final
Development Plan and Final Development Budget for the Project.  The final plans and specifications for the
Project shall be approved in writing by Owner.

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

(a)                                  Interview,
negotiate with, and, after consultation with and approval of Owner, recommend
for engagement by Owner any other independent design and development
consultants (the “Consultants”) for the
Project, including, if and as appropriate, space planners, landscape
architects, civil, soils, mechanical, electrical and plumbing engineers, and
acoustical, curtain wall, lighting, art and graphic design consultants.

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

(c)                                  Initiate
the planning and coordinate with Owner and the Architect the receipt of all
necessary public and private approvals for the Project, including city
planning, applicable building codes, public works, any applicable architectural
review committee, and building permit approvals.  Coordinate, with reliance on the Architect,
engineers and Consultants, satisfaction of all laws and regulations affecting
the Project, including, without limitation, the Americans with Disabilities Act
and all environmental laws.

(d)                                 Review
designs during their development and advise Owner regarding on-site use and
improvements, selection of materials, building systems and equipment and
methods of delivery.

(e)                                  Provide
Owner with a monthly (or more often, if Owner so requests) 

 5
 

progress report at the
beginning of each month detailing (i) the amount of work on the Project that
has been completed during the previous calendar month in relation to the
schedule for the Project (the “Project Schedule”);
and (ii) the General Contractor’s and all subcontractors’ compliance with the
Final Development Budget, as well as any changed conditions regarding
cost.  Any changes shall be reported to
Owner as soon as possible for Owner’s approval. Attached hereto as Exhibit D is a conceptual project
schedule that has been approved by Owner. 
Based upon the conceptual project schedule attached hereto as Exhibit D, Developer shall
prepare and obtain Owner’s approval of a final Project Schedule (the “Final Project Schedule”) (such
approval not to be unreasonably withheld so long as the proposed Final Project
Schedule is consistent with the conceptual project schedule attached hereto as Exhibit D).  In this regard, Owner and Developer agree
that it is their intent to commence renovation of the Project in accordance
with the Final Development Plan, and Developer shall prepare and obtain Owner’s
approval of the Project Schedule (such approval not to be unreasonably
withheld).  The Project Schedule and
General Contract shall clearly state number of delay days that are built into
the Project Schedule based on factual weather data for the Vail, Colorado area
as provided by the U.S. Weather Bureau.

(f)                                    Advise
Owner regarding space planning, design and finish-out evaluations for the
Project.

(g)                                 Prepare
a detailed estimate of construction costs, developed by using estimating
techniques which anticipate the various elements of the Project, and based on
schematic design documents prepared by the Architect.  Update and refine this estimate periodically
as the Architect prepares design development and construction documents.

(h)                                 Provide
business administration and supervision consistent with good construction
practices and as may be required for the Project; cause budget draw projections
for all key trades and schedules for the purchase and delivery of all materials
for the Project to be prepared and furnished to Owner.

Section 2.6                                      Commencement of Construction.

(a)                                  At
such time as Owner elects to commence construction of the Project, Owner will
give written notice thereof to Developer, and Developer shall commence or cause
to be commenced the construction with reasonable promptness thereafter.  Owner, after consultation with Developer,
shall designate the general contractor (“General Contractor”)
for the Project. Developer shall negotiate the contract with the General
Contractor for the Project, which shall be subject to the review and approval
of Owner. The Developer shall, if requested by Owner, require the General
Contractor and its major subcontractors to provide performance and payment
bonds in a form satisfactory to Owner as security for their respective
obligations naming Owner and Developer as co-obligees thereon.  The General Contract shall substantially
conform with the form, or in the absence of an actual form shall substantially
conform with the guidelines and contain such provisions as are approved by
Owner.  Owner shall enter into the
General Contract with the General Contractor in its name.  Developer shall not amend or alter the terms
of the General Contract or issue or authorize change orders in connection
therewith without 

 6
 

the prior written
approval of Owner.

(b)                                 Developer
shall cause the Project to be developed and constructed in accordance with the
Final Development Plan, Final Development Budget and Final Project
Schedule.  Developer shall provide Owner
with information in connection with updating the Final Development Plan, Final
Development Budget and Final Project Schedule as construction progresses and
when requested by Owner, and the Final Development Plan, Final Development
Budget and Final Project Schedule shall be modified from time to time based on
such updates to the extent such modifications are approved in writing by
Owner.  Developer shall use commercially
reasonable efforts to cause the General Contractor to comply with the Final
Development Plan, Final Development Budget and Final Project Schedule.

(c)                                  If
the development and construction of the Project does not progress in accordance
with the dates required by the Project Schedule, Owner, by written request,
shall instruct Developer to cause General Contractor to speed up the work by
all available means, including utilization of overtime, additional work crews
and alternate material suppliers.  Owner
shall bear all costs of such speed up efforts unless such delay arises by
reason of Developer’s gross negligence or willful misconduct.

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

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

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

(b)                                 Appoint
management and support staff to inspect the manner and progress of the
construction of the Project;

(c)                                  Make
visits to the Project site to inspect the work and progress of construction
with the General Contractor and with the Architect and other Consultants, which
visits shall be of such frequency and duration as shall be necessary for
Developer to carry out its duties under this Agreement, to guard against
defects and deficiencies in the work and to determine that the work is being
performed in accordance with the construction documents, but in no event shall
Developer make less than three (3) such visits per month during the
construction of the Project. Developer shall prepare and 

 7
 

submit to Owner a
progress report no less frequently than once each month detailing its
observations.

(d)                                 Advise
Owner immediately of any material omissions, substitutions, defects, or
deficiencies noted in the work of the General Contractor or any contractor,
subcontractor or materialman.

(e)                                  Consult
with Owner regarding proposed changes and modifications to the construction
documents and coordinate issuance of change orders if and when changes are
approved in writing by Owner and the affected party.  Developer shall ensure that all changes in
the work or services are implemented through written change orders signed by the
Owner and the affected party. Developer shall establish a changes system to
control the writing of change orders and to record all changes to the
construction documents. For changes initiated by the Owner or Developer with
respect to the General Contractor’s work, Developer shall prepare written
change order proposal requests, incorporating detailed drawings and
specifications prepared or approved by the Architect where appropriate.  Developer shall forward the requests to the
General Contractor for preparation of a proposal. For change order requests
initiated by the General Contractor, Developer shall evaluate the requests and,
if applicable, provide a copy to the Architect for comment. Developer shall
evaluate proposed change orders for price, schedule and coordination impact and
shall forward its recommendations to Owner, along with the comments of the
Architect.  For change order proposals
approved by the Owner and the affected party, Developer shall prepare written
change orders and shall obtain the signatures of the Owner and the affected
party. If a change is performed by the General Contractor or a Consultant under
a pricing arrangement other than lump sum, Developer shall make a record of
units, work or services or actual costs incurred, as the case may be.  Developer shall obtain from the General
Contractor and Consultants copies of supporting documents for all units of work
or services or costs incurred. Developer shall keep a record copy of all signed
change orders and shall provide copies to the Architect and Owner.

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

 8
 

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

(h)                                 Consult
with the Architect and Owner if the General Contractor or any contractor or
subcontractor requests interpretations of the meaning and intent of the plans
and specifications and assist in the resolution of any questions which may
arise.

(i)                                     Assist
in preparing such reports as may be reasonably required for the use of any
public agency on the progress of construction.

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

(k)                                  Arrange
for the delivery and storage, protection and security of Owner- purchased
materials, systems and equipment which are a part of the Project, until such
items are incorporated into the Project.

(l)                                     On
application for final payment by the General Contractor, cause a final
inspection of the work by the Architect to be performed, assemble and deliver
to Owner any written guaranties, releases, bonds and waivers, instruction
books, diagrams and charts required by the appropriate contract documents, and issue
an approval for final payment.

(m)                               Arrange
for and assist the General Contractor in coordinating the installation of the
public and private utilities with the appropriate utility companies on the most
favorable terms and conditions obtainable at the time.

(n)                                 Coordinate
the construction work with any activities of Owner on or about the Project site
during the construction period, including coordinating the preparation and
completion of punch list items.

(o)                                 Hold
regular meetings to be attended by representatives of Architect, General
Contractor and other key parties, and such special meetings as requested or
required, and record and distribute minutes and decisions; also provide copies
of meeting minutes to Owner.

(p)                                 Establish
a monthly reporting system that covers major operations, cost, schedule, and
marketing aspects of the Project, including:

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

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

 9
 

requirements and update
projections periodically.

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

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

(r)                                    Establish
and maintain a central file for all design, construction, and related
contractual documents, including contracts, purchase orders and change orders.

(s)                                  Receive
and confer with Owner regarding response to all notices, claims and pertinent
correspondence, and provide Owner with three (3) close-out binders containing
all warranties, guarantees, operating manuals and as-built drawings at
Completion of the Project.

(t)                                    Make
payment each month of expenditures authorized in the Final Development Budget,
to the extent funds are made available therefor by Owner.

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

(v)                                 Maintain
current and accurate records and reports with regard to the financing,
development and progress of the Project. 
Such records shall be maintained at the Developer’s principal place of
business and shall be made available to the Owner at any reasonable time,
during normal business hours, for review and inspection by the Owner.  Owner shall have the right at its sole cost
and expense to make copies of any books and records applicable to the development
of Project for Owner’s use and review. 
If Owner shall notify Developer of either weaknesses in internal control
or errors in record keeping, Developer shall correct such weaknesses or errors
as soon as possible after they are disclosed to Developer.  Developer shall notify Owner in writing of
the actions taken to correct such weaknesses or errors.

(w)                               Cause
the General Contractor to comply with all Governmental Requirements (as
hereinafter defined) relating to the Improvements and the Property 

 10
 

including, but not
limited to, all applicable environmental laws including the Resource
Conservation and Recovery Act and the Comprehensive Environmental Response
Compensation and Liability Act. As used herein, “Governmental
Requirements” means final land development approval and all
other permits and approvals required to commence and complete construction of
the Project in accordance with the Plans and Specifications and all applicable
statutes, ordinances, regulations, orders, rules, directives or contracts of
any federal, state, municipal or other governmental or quasi-governmental
board, agency, authority or body, including the preparation and submission of
all necessary drawings, documents, information and comments (all of which shall
be subject to Owner’s approval prior to submission to any governmental
authority).

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

(y)                                 If
there is a construction loan on the Project, assist Owner in preparing and
submitting to the construction lender draw requests in accordance with the
documents evidencing and securing the construction loan and otherwise use
reasonable efforts to ensure that construction of the Project is performed in
compliance with the construction.

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

Section 2.9                                      Employees.  Developer shall have in its employ at all
times and at its sole expense, a sufficient number of capable employees with
sufficient experience and knowledge to enable Developer to perform its duties
hereunder.  All personnel used by
Developer in the performance of its duties hereunder shall be qualifies by
training and experience to perform their assigned tasks and shall maintain any
and all necessary or appropriate licenses or permits in order to fulfill their
responsibilities in connection with the performance of such work.  The individual development managers
designated by Developer to be dedicated to the Project and 

 11
 

who shall be principally responsible for performing
the development management functions set forth in this Agreement shall be
subject to the reasonable approval of Owner. Owner hereby acknowledges its
approval of the following individuals as development managers principally
responsible for performing the development management functions set forth
herein:  Jeff Nelsen and Bill Sumski. Any
substitute development manager shall also be subject to the reasonable approval
of Owner. All persons employed by Developer in the performance of its
responsibilities hereunder shall be exclusively controlled by and shall be
employees of Developer and not of Owner, and Owner shall have no liability,
responsibility or authority with respect thereto.

Section 2.10                                Funds for Construction.  Owner agrees that it will fund the amount of
the construction, not to exceed the amount shown in the Final Development Budget
as the same is modified by written change orders approved in writing by Owner.

Section 2.11                                Ownership of Information and Materials.  As
between Owner and Developer, Owner shall have the right to use, without
further compensation to Developer, all written data and information generated
by or for Developer in connection with the Project or supplied to Developer by
Owner or Owner’s contractors or agents, and all drawings, plans, books,
records, contracts, agreements and all other documents and writings in its
possession relating to its services or the Project.  Such data and information shall at all times
be the property of Owner, and upon request of Owner, Developer shall deliver to
Owner any such data and information in the possession of under the control of
Developer. Developer agrees, for itself and all persons retained or employed by
Developer in performing its services, to hold in confidence and not to use or
disclose to others any confidential or proprietary information of Owner which
is heretofore or hereafter disclosed to Developer or any such persons and which
is designated by Owner as confidential and proprietary, including but not
limited to any proprietary or confidential data, information, plans, programs,
plants, processes, equipment, costs, operations, tenants or customers which may
come within the knowledge of Developer or any such persons in the performance
of, or as a result of, its services, except where (a) Owner specifically
authorizes Developer to disclose any of the foregoing to others or such
disclosure reasonably results from the performance of Developer’s duties
hereunder, or (b) such written data or information shall have theretofore been
made publicly available by parties other than Developer or any such persons, or
(c) Developer is required by law to disclose such information (provided that in
such case Developer shall give Owner prior notice of the request for disclosure
and shall cooperate with Owner in obtaining a protective order or other remedy
at Owner’s expense).

Section 2.12                                Hazardous Substances.  Developer shall exercise such efforts as are
exercised by other prudent developers of similar property to prevent any
Hazardous Substances from being deposited, stored, disposed, placed, generated,
manufactured, buried, refined, transported, treated, discharged, handled or
located on the Land or Improvements, except as may be specifically authorized
by Owner of this Agreement.  In
connection with any such Hazardous Substances so authorized, Developer shall
exercise reasonable best efforts to confirm that any such authorized activity
with respect to Hazardous Substances is conducted in accordance with applicable
Governmental Requirements and the terms and conditions of any such
authorization by Owner.  The term “Hazardous Substances” includes (a)
any chemical, material, element, compound, solution, mixture, substance or
other matter of any kind whatsoever which is defined, classified, listed,
designated or regulated as hazardous, toxic or radioactive by any federal
statute, ordinance, regulation, order, 

 12
 

rule or directive, or any statute, ordinance,
regulation, order, rule or directive of the State of Colorado, any political
subdivisions of that state, any township or municipal corporation of the state,
or any board, agency, authority or body associated with any of the foregoing or
any quasi-governmental body or agency with jurisdiction over such matters; (b)
PCBs or asbestos or materials containing PCBs or asbestos; (c) petroleum and
petroleum-based chemicals and substances; and (d) urea formaldehyde.  Owner authorizes Developer to allow a
contractor engaged in construction to temporarily use or store Hazardous
Substances where (i) such Hazardous Substances are reasonably required for an
area in quantities appropriate to the performance of the contractors’ work;
(ii) the use and storage of such Hazardous substances is in conformity with all
applicable requirements; (iii) the contractor agrees to indemnify Owner and
Developer for all liability resulting therefrom; and (iv) Developer exercises
reasonable oversight over the contractors’ compliance with clauses (i) and
(ii).

Section 2.13                                Payment for Materials.  Notwithstanding anything contained herein to
the contrary, no amount shall be paid to Developer for materials delivered but
not yet incorporated into the Project unless Owner and Project Lender receives
(a) bills of sale or other evidence to the passage of title of such materials
to Owner, subject only to payment, (b) evidence that the materials ate insured
under applicable casualty insurance policies, and (c) evidence that such
materials are securely stored at the Property. 
In the event of any conflict between this Section 2.13 and the terms and
conditions of Owner’s agreements with the Project Lender, the latter shall
control.

Section 2.14           Completion.

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

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

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

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

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

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

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

 13
 

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

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

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

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

(vii)                           Developer
has delivered to Owner a certificate of occupancy for the Project (or similar
governmental approval) allowing unconditional occupancy of the Project for its
intended purpose;

(viii)                        Developer
has delivered to Owner three (3) binders with all warranties, guaranties,
operating manuals and similar closeout documents concerning the improvements
required by the plans and specifications for the Project;

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

ARTICLE 3

COMPENSATION

Section 3.1                                      Development Fee.  For all services rendered in connection with
the development of the Project pursuant to Article 2, Developer shall be paid a
fee (the “Development Fee”) equal to
three percent (3%) of all approved Designated Construction Costs (as defined in
Exhibit E attached hereto);
provided, however, that the Development Fee shall be subject to possible
reduction as set forth in Section 3.2 below. The Development Fee shall be paid
according to the schedule set forth on Exhibit F
attached hereto, subject to the provisions of Section 3.2 below. 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, whether or not enumerated in Article 2.  Developer shall not be entitled to payment
for or reimbursement of any costs or expenses incurred in the performance of
the services under Article 2 or otherwise in connection with the development of
the Project, except as expressly set forth in this Agreement or the Final
Development Budget.

Section 3.2                                      Adjustment to Development Fee.  Upon the date of Completion, a determination
shall be made as to whether the Development Fee should be reduced.  If the 

 14
 

Designated Construction Costs incurred to complete the
Project exceed the Designated Construction Costs set forth in the Final
Development Budget, or if the date of Completion is later than the date of
Completion projected in the Final Project Schedule (excluding delays caused by
Force Majeure Events, delays requested by the General Contractor and approved
by Owner, and delays resulting from change orders initiated by Owner), then the
Development Fee shall be reduced in the manner set forth in Exhibit G attached hereto and made a
part hereof.

Section 3.3                                      No Other Compensation.  Other than the Development Fee, 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 or the Final Development Budget. 
Without limiting the generality of the preceding sentence, it is specifically
agreed that, except as expressly set forth in the Final Development Budget,
Developer will not be entitled to reimbursement for (a) Developer’s overhead
and general expenses; (b) the salary and wages, payroll taxes, insurance,
workers’ compensation and other benefits of any employees of Developer; (c) the
cost of forms, papers, ledgers and other supplies and equipment used in the
Developer’s office; (d) the cost of electronic data processing or computer
services that Developer may elect to incur in the performance its duties under
this Agreement; (e) the cost of office equipment acquired by Developer to
enable it to perform its duties hereunder; (f) the cost of advances made to
employees of Developer; (g) the cost of travel and lodging by Developer’s
employees and agents, unless included in the Final Development Budget or
otherwise approved in writing by Owner (it being agreed that Owner shall allow
Developer a reasonable allowance for travel expenses); (h) costs arising from
the fault or negligence of Developer, and (i) costs Developer is prohibited
from incurring with respect to the Project pursuant to Section 2.6(d)

ARTICLE 4

INSURANCE AND INDEMNITY

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

Section 4.2                                      Indemnity.  Subject to Section 4.3, Developer shall
indemnify, defend and hold Owner and its owners, officers, employees and agents
harmless from and against any and all costs, expenses, attorneys’ fees, suits,
liabilities, damages, or claims for damages, in any way relating to the
management of the Project by Developer and arising out of or in connection with
the negligence or willful misconduct of Developer or Developer’s failure or
refusal to comply with or abide by or perform its obligations set forth in this
Agreement. Subject to Section 4.3, Owner shall indemnify, defend and hold
Developer and its owners, officers, employees and agents harmless from and
against all costs, expenses, attorneys’ fees, suits, liabilities, damages, or
claims for damages arising out of or in connection with the negligence or
willful misconduct of Owner or Owner’s failure or refusal to comply with or
abide by or perform its obligations set forth in this Agreement. The
indemnities set forth in this Section 4.2 shall survive the termination of this
Agreement, but shall lapse and be of no further effect unless a claim is made
thereunder in a court of competent jurisdiction within the applicable period of
limitations provided under Texas law.

 15
 

Section 4.3                                      Waiver of Subrogation. 
OWNER, ON BEHALF OF ITSELF AND ITS INSURERS, WAIVES ITS RIGHTS OF
RECOVERY AGAINST DEVELOPER OR DEVELOPER’S PARTNERS AND THEIR RESPECTIVE
OFFICERS, DIRECTORS AND EMPLOYEES, FOR DAMAGES SUSTAINED BY OWNER AS A RESULT
OF ANY DAMAGE TO ANY PROPERTY OR ANY INJURY TO PERSONS ARISING FROM ANY RISK OR
PERIL GENERALLY COVERED OR COVERABLE BY ANY INSURANCE POLICY ACTUALLY CARRIED
BY OR REQUIRED TO BE CARRIED BY OWNER PURSUANT TO THE TERMS OF THIS AGREEMENT,
REGARDLESS OF CAUSE, INCLUDING NEGLIGENCE; AND OWNER AGREES THAT NO PARTY SHALL
HAVE ANY SUCH RIGHT OF RECOVERY BY WAY OF SUBROGATION OR ASSIGNMENT.  DEVELOPER, ON BEHALF OF ITSELF AND ITS
INSURERS, WAIVES ITS RIGHTS OF RECOVERY AGAINST OWNER AND OWNER’S PARTNERS AND
THEIR RESPECTIVE OFFICERS, DIRECTORS AND EMPLOYEES, FOR DAMAGES SUSTAINED BY
DEVELOPER AS A RESULT OF ANY DAMAGE TO ANY PROPERTY OR ANY INJURY TO PERSONS
ARISING FROM ANY RISK OR PERIL GENERALLY COVERED OR COVERABLE BY ANY INSURANCE
POLICY ACTUALLY CARRIED BY OR REQUIRED TO BE CARRIED BY DEVELOPER PURSUANT TO
THE TERMS OF THIS AGREEMENT, REGARDLESS OF CAUSE, INCLUDING NEGLIGENCE; AND
DEVELOPER AGREES THAT NO PARTY SHALL HAVE ANY SUCH RIGHT OF RECOVERY BY WAY OF
SUBROGATION OR ASSIGNMENT.  OWNER AND
DEVELOPER SHALL EACH NOTIFY THEIR RESPECTIVE INSURANCE CARRIERS OF THE MUTUAL WAIVERS
HEREIN CONTAINED AND SHALL CAUSE THEIR RESPECTIVE INSURANCE POLICIES REQUIRED
HEREUNDER TO BE ENDORSED, IF NECESSARY, TO PREVENT ANY INVALIDATION OF COVERAGE
AS A RESULT OF THE MUTUAL WAIVERS HEREIN CONTAINED AND SHALL CAUSE THEIR
RESPECTIVE INSURANCE POLICIES REQUIRED HEREUNDER TO BE ENDORSED, IF NECESSARY,
TO PREVENT ANY INVALIDATION OF COVERAGE AS A RESULT OF THE MUTUAL WAIVERS
HEREIN CONTAINED.

Section 4.4                                      Non-Recourse Liability.  The liability of Owner for the payment of all
sums which may be owed to Developer under this Agreement and for the
performance of all other obligations of Owner to Developer under this Agreement
shall be limited to Owner’s interest in the Project and the proceeds
thereof.  Neither Owner nor any of the
constituent partners or members of Owner or any partners or members,
shareholders, officers, directors, beneficiaries or trustees of the constituent
partners or members of Owner shall be personally liable for the payment of any
sums or the performance of any other obligations to Developer.

ARTICLE 5

TERM AND TERMINATION

Section 5.1                                      Term.  Developer shall manage the development of the
Project as herein specified until Completion (as hereinafter defined) of the
Project; provided, however, if any remedial work to be performed by the General
Contractor (as hereinafter defined) following the Completion of the Project has
not been completed, the term of this Agreement shall be extended until the date
on which any remedial work required to be performed by the General Contractor
following completion of the Project shall be so performed and accepted by
Owner.

 16
 

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

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

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

(c)                                  Completion
of the Project is delayed (or in Owner’s reasonable judgment will be delayed)
beyond the scheduled date of Completion set forth in the Final Project
Schedule, and/or the costs of the Project exceed (or in Owner’s reasonable
judgment will exceed) the amount set forth in the Final Development Budget to
such an extent that the Development Fee will be decreased by an amount equal to
thirty percent (30%) of the budgeted
Development Fee pursuant to the provisions of Exhibit
G;

(d)                                 a
good faith determination by Owner that Developer is not developing the Project
in a manner satisfactory to Owner, provided that (i) Owner shall have notified
Developer in writing of such dissatisfaction, and (ii) Developer shall have
failed to cure Owner’s dissatisfaction within sixty (60) days after the giving
of such notice;

(e)                                  a good faith determination by Owner, after a
review of the status of the Project and a review of current market conditions,
that completion of the Project is not economically feasible;

(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 thirty (30) days to
complete such cure.

(g)                                 Owner
sells the Property, at Owner’s election.

(h)                                 Cordillera Partners, LLC, a Delaware limited liability
company and an affiliate of Developer (“CP
Investor”), defaults in any of its obligations under that
certain Limited Liability Company Agreement of Behringer Harvard Cordillera,
LLC dated as of May 10, 2007 (the “Owner LLC Agreement”),
and such default is not cured within any applicable notice or grace period;
provided, however, that for purposes of this Section 5.2(h), the failure of CP
Investor to make a capital contribution to Owner shall not be considered 

 17
 

such a default..

(i)                                     CP
Investor ceases to own any interest in Owner.

Section 5.3                                      Termination by Developer.  Developer may terminate this Agreement if one
or more of the following events shall occur:

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

(b)                                 a
material default by Owner under this Agreement that is not cured within thirty
(30) days following receipt of written notice from Developer 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
Owner 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, Owner shall be afforded an additional thirty (30) days to complete
such cure.

Section 5.4                                      Additional Remedies.  If either party defaults in the performance
of any of its obligations hereunder and such default continues beyond the
applicable notice and cure periods as set forth in Section 5.1, then the
non-defaulting party may pursue all other rights, remedies and recourses
available at law.  Enforcement of the
provisions of this Article 5 shall not diminish Developer’s obligations under
Article 6.

ARTICLE 6

DUTIES UPON TERMINATION OR EXPIRATION

Section 6.1                                      Developer’s Duties.  Upon termination or expiration of this
Agreement, Developer shall, within five (5) business days thereafter, deliver
to Owner complete copies of all books and records maintained by Developer for
the Project.

Section 6.2                                      Owner’s Duties.  Owner shall compensate Developer for all fees
earned hereunder through the date of termination promptly following the
delivery of the information called for in Section 6.1, subject to any claims
Owner may have arising out of Developer’s default in performance hereunder.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES

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

(a)                                  Developer
is duly organized, validly existing and in good standing under the laws of the
State of Delaware, and is authorized to conduct business in the State of
Colorado.  Developer has full power and
authority to execute, deliver and carry out the terms and provisions of this
Agreement and has taken all necessary action, corporate or 

 18
 

otherwise, to authorize
the execution, delivery and performance of this Agreement, and this Agreement
constitutes the legal, valid and binding obligation of Developer enforceable in
accordance with its terms, subject to creditor’s rights, bankruptcy and any
other equitable principles. The execution and delivery of this Agreement by the
party signing on behalf of Developer has been duly authorized.  No order, permission, consent, approval,
license, authorization, registration or validation of, or filing with, or
exemption by, any governmental agency, commission, board or public authority is
required to authorize, or is required in connection with, the execution,
delivery and performance of this Agreement.

(b)                                 The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereunder on the part of Developer do not and will
not conflict with or result in the breach of any material terms or provisions
of, or constitute a default under, or result in the creation or imposition of
any lien, charge, or encumbrance upon any of the assets of Developer by reason
of the terms of any contract, mortgage, lien, lease, agreement, indenture,
instrument or judgment to which Developer is a party or which is or purports to
be binding upon Developer or which otherwise affects Developer, or which
otherwise will not be discharged, assumed or released.  No action by any federal, state or municipal
or other governmental department, commission, board, bureau or instrumentality
is necessary to make this Agreement a valid instrument binding upon Developer
in accordance with its terms.

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

(d)                                 All
authorizations required to be obtained from, and all registrations,
declarations and filings, if any, required to be made with, all governmental
authorities and all other persons or entities to permit Developer to execute
and deliver this Agreement have been obtained.

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

(f)                                    Developer
is possessed of sufficient skill, qualifications, experience, expertise and
capability to perform its obligations hereunder, shall maintain adequate
personnel, manpower, capital, equipment and facilities to perform its
obligations hereunder, and holds any and all licenses, certificates,
authorizations and registrations required to permit it to perform its
obligations hereunder.

(g)                                 Developer
represents that it is knowledgeable and experienced in the development and
construction management of property similar to the Project.

 19

Section 7.2             Owner’s
Representations and Warranties. 
Owner hereby represents and warrants to Developer as of the date hereof:

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

(b)           The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereunder on
the part of Owner do not and will not conflict with or result in the breach of
any material terms or provisions of, or constitute a default under, or result
in the creation or imposition of any lien, charge, or encumbrance upon any of
the assets of Owner by reason of the terms of any contract, mortgage, lien,
lease, agreement, indenture, instrument or judgment to which Owner is a party
or which is or purports to be binding upon Owner or which otherwise affects
Owner, or which otherwise will not be discharged, assumed or released. No
action by any federal, state or municipal or other governmental department,
commission, board, bureau or instrumentality is necessary to make this
Agreement a valid instrument binding upon Owner in accordance with its terms.

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

(d)           All authorizations required to be
obtained from, and all registrations, declarations and filings, if any,
required to be made with, all governmental authorities and all other persons or
entities to permit Owner to execute and deliver this Agreement have been
obtained.

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

 20
 

ARTICLE 8

MISCELLANEOUS PROVISIONS

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

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

Section 8.3             Waiver of
Lien Claims.  Developer
hereby waives any and all rights it may now or hereafter have to assert a lien
(whether constitutional, statutory, conferred by common law or arising in any
other manner) against the Project or any part thereof.

Section 8.4             Lender Requirements.  In the event that a mortgagee of the Project
(a “Project Lender”)
requests that Developer execute a document in connection with a loan to Owner,
Developer will respond to such request promptly and will not unreasonably
withhold its consent to and execution of such document. Without limiting the
generality of the preceding sentence, Developer agrees that it will execute and
deliver the following documents within five (5) days after request therefor:
(a) an agreement that a Project Lender may terminate this Agreement if a
default occurs in respect of the loan secured by the Project; (b) an estoppel
certificate certifying that this Agreement is in full force and effect and
containing such other certifications as may be reasonably requested; (c) an
agreement subordinating this Agreement and the fees payable to Developer
hereunder  to any mortgage or deed or
trust held by a Project Lender; and (d) confirmation of the waiver by Developer
of any right to assert a lien against the Project.  Developer shall use reasonable care to avoid
any act or omission that, in the performance of its duties hereunder, shall in
any way conflict with the terms of any mortgage documents in respect of the
Project, provided that Developer has been furnished with copies of such
mortgage documents. In addition, Developer agrees to conform its general
policies and procedures to any commercially reasonable requirements of any
Project Lender providing financing for the acquisition or construction of the
Project.

Section 8.5             Force
Majeure Events.  Except
for obligations regarding the payment of money and the maintenance of
insurance, whenever a period of time is herein prescribed for action to be
taken by Owner or Developer, neither party shall be liable or responsible for,
and there shall be excluded from the computation for any such period of time,
any delays due to Force Majeure Events. 
For purposes hereof, “Force Majeure Events”
shall consist of abnormal weather patterns that affect critical path
construction, acts (or the failure to act) by the other party to this
Agreement, unforeseeable subsurface conditions, uncontrollable delay in
issuance of permits, changes in governmental laws, enemy or hostile
governmental action, civil commotion, and fire or other casualty.  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 

 21
 

thereof in writing, and of the cause or causes
thereof.

Section 8.6             Governing
Law.  This Agreement shall
be governed and construed in accordance with the laws of the State of Texas.

Section 8.7             Time of
Essence.  Time is of the
essence of this Agreement.

Section 8.8             Compliance
Amendments.  Reference is made to Behringer Harvard Opportunity Op
I, LP, a Texas limited partnership (“BH REIT”), which owns a
direct or indirect interest in Owner. 
Notwithstanding anything contained herein to the contrary, in the event
that legal counsel for Owner reasonably determines that an amendment to this
Agreement is necessary or advisable in order for this Agreement to comply with
applicable tax laws (including, without limitation, laws and regulations
pertaining to real estate investment trusts), applicable securities laws, the
offering documents pertaining to BH REIT or any Affiliate, or the Statement of Policy Regarding Real
Estate Programs of the North American Securities Administrators Association,
Inc., effective September
29, 1993, as amended, then Owner and Developer shall, within ten (10) business
days after request from Owner, execute such an amendment; provided,
however, that no such amendment may decrease the compensation to which
Developer is entitled hereunder or materially increase Developer’s liabilities
or obligations under this Agreement without Developer’s written consent.

Section 8.9             Entireties,
Beneficiaries.  This
Agreement represents the entire Agreement between Owner and Developer with
regard to management of the Project and all prior agreements are superseded
hereby.  This Agreement is for the sole
benefit of Owner and Developer and no other party is benefited hereby.  This Agreement creates contractual rights
only between Owner and Developer, and Developer has no lien rights in or to the
Project.

Section 8.10           No Agency.  Developer and its agents shall all act as
independent contractors in respect of Owner with regard to this Agreement.  All personnel and staff of Developer shall be
and remain employees or agents of, or independent contractors with, Developer
and not of or with Owner.  Developer
shall at all times represent to third parties that the relationship of
Developer to Owner, with regard to Developer’s duties under this Agreement, is
that of independent contractor, and Developer and Owner shall not represent to
any party that Developer and Owner are partners, co-venturers or principal and
agent, or have any other relationship other than that of independent
contractors with regard to this Agreement. 
Developer’s authority to act on behalf of Owner will be strictly limited
to that expressly delegated herein or in another written instrument executed by
Owner.  In connection with adoption by
Owner of its Business Plan (as such term is defined in the Owner LLC Agreement)
and approval by Owner of the Final Development Plan, Final Development Budget
and Final Project Schedule (as same may be amended from time to time,
collectively, the “Plan”), Owner will delegate
to Developer by written instrument certain authority consistent with the Plan,
which may include, but will not necessarily be limited to, authority to perform
the actions listed on Exhibit I
attached hereto.

Section 8.11           Attorneys’ Fees.  Should either the Owner or the Developer
employ an attorney or attorneys to enforce any of the terms and conditions of
this Agreement, or to protect any right or interest created or evidenced
hereby, the losing party shall pay the party obtaining 

 22
 

final, unappealable judgment all reasonable costs,
damages and expenses, including reasonable attorneys’ fees and expenses
incurred by the prevailing party.

Section 8.12           No Waiver.  The failure of either party to seek redress
for violation, or to insist upon the strict performance of any covenant,
agreement, provision or condition of this Agreement shall not constitute a
waiver of such strict performance and the parties shall have all remedies
provided in this Agreement and by applicable law with respect to any subsequent
act which would he originally constituted a violation.

Section 8.13           Entire Agreement.  This Agreement embodies the entire
understanding of the parties and supersedes all prior agreements and
understandings and there are no further agreements or understandings, written
or oral, in effect between the parties relating to the subject matter of this
Agreement.

Section 8.14           Severability.  If one or more of the provisions of this
Agreement or any application of this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions of this Agreement and any other application of such
provisions shall in no way be affected or impaired.

Section 8.15           Amendments.  This Agreement may be amended, from time to
time, only with the written consent of both Owner and Developer.

Section 8.16           Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and said counterparts
shall constitute but one and the same instrument.

Section 8.17           Additional Acts.  In connection with this Agreement, as well as
all transactions contemplated by this Agreement, Owner and Developer each agree
to execute and deliver such additional documents and instruments and take all
such necessary action and perform such additional acts as may be necessary or
appropriate to effectuate, carry out and perform all of the terms, provisions
and conditions of this Agreement and all such transactions; provided, however,
this Agreement may be modified only in accordance with the terms hereof.

Section 8.18           Exhibits.  All exhibits referred to herein shall be
considered a part of this Agreement as fully as if and with the same force and
effect as if such exhibit had been included herein in full.

Section 8.19           Limitation of Liability.  Any liability of Owner to Developer (or any
person or entity claiming by, through or under Developer) for any default by
Owner under this Agreement or any matter relating to this Agreement shall be
limited to Developer’s actual direct, but not consequential, damages
therefore.  Owner’s liability under this
Agreement is limited to Owner’s interest in the Project, and if Owner is
comprised of more than one entity, the liability of each entity comprising
Owner shall be several only (not joint) based upon such entity’s proportionate
share of ownership in the Project.

Section 8.20           Confidentiality.  Developer will keep confidential (a) the
terms of this Agreement, and (b) all written and verbal negotiations and
communications with Owner in connection with this Agreement (collectively, “Confidential Information”), and
Developer will 

 23
 

not disclose or make available any Confidential
Information to any other person or entity, except to Developer’s accountants,
brokers, attorneys, and other agents for the purpose of providing advice to
Developer in connection with the Confidential Information and who agree to
preserve the confidential nature of the Confidential Information.

Section 8.21           Authority of Developer.  Developer shall have no right or authority,
express or implied, to commit or otherwise obligate Owner in any manner
whatsoever except to the extent specifically provided herein or specifically
authorized in writing by Owner.

Section 8.22           Licenses.  Developer represents and warrants that (a) it
has all the requisite licenses and other approvals required by law to carry out
its duties hereunder; or (b) it will affect the services requiring such
licenses through duly licensed agents and subcontractors who are affiliates of
Developer that have all requisite licenses and authority to carry out such
services.  Developer shall, at its own
expense, qualify to do business and obtain and maintain such licenses as may be
required for the performance by Developer of its services.

Section 8.23           Non-Discrimination Policy.  Developer agrees that it will not deny the
benefits of this Agreement to any person, nor discriminate against any employee
or applicant for employment because of race, color, religion, sex, national
origin, age or any other applicable protected classification.  Developer will take affirmative action to
insure that the evaluation and treatment of employees ate free from such
discrimination.  Developer, unless
exempt, further agrees to abide by the terms of all applicable Federal, state
and local non-discrimination provisions, including but not limited to 41 CFR
Sec. 60-1.4, such non-discrimination provisions being incorporated herein by
reference.  Developer shall include this
non-discrimination clause in all contracts and subcontracts to perform work under
this Agreement and will notify all labor organizations with which it has a
collective bargaining agreements of the obligations hereunder.

Section 8.24           Waiver of Jury Trial.  Developer and Owner each hereby waives trial
by jury in any action arising out of matters related to this Agreement, which
waiver is informed and voluntary.

Section 8.25           Dispute
Resolution.  The parties hereto have agreed to submit
disputes to mandatory arbitration in accordance with the provisions of this
Section 8.25.  Each party waives the
right to commence an action in connection with this Agreement in any court and
expressly agrees to be bound by the decision of the arbitrator determined in
this Section 8.25; provided, however, the waiver in this Section 8.25 will not
prevent the other party from commencing an action in any court for the sole
purposes of enforcing the obligation of the other party to submit to binding
arbitration or the enforcement of an award granted by arbitration herein.  Notwithstanding the foregoing, prior to
submitting any dispute hereunder to arbitration, each party shall first attempt
in good faith, for thirty (30) days after the first notice given under this
Agreement regarding such dispute, to resolve any such dispute promptly by
negotiation between executives of each party who have authority to settle the
dispute, which shall include an in-person meeting between such executives in
Dallas, Texas.

(a)           Any
dispute between the parties as to the interpretation
of any provision of this Agreement or the rights and obligations of any party
hereunder shall be resolved through binding arbitration as hereinafter provided in Denver, Colorado.

 24
 

(b)           If arbitration is required to resolve
a dispute between the parties, a panel of three (3) arbitrators shall be
convened.  Each party hereto shall each
select one (1) arbitrator with at least five (5) years experience in commercial
real estate in general and hotel operation in particular, and those two (2)
arbitrators shall by agreement select a third arbitrator having recognized
expertise and at least five (5) years experience in commercial real estate in
general and hotel operation in particular.

(c)           The arbitrators selected pursuant to
Section 8.25(b) above will establish the rules for proceeding with the
arbitration of the dispute, which will be binding upon all parties to the
arbitration proceeding. The arbitrators may use the rules of the American
Arbitration Association for commercial arbitration but are encouraged to adopt
the rules the arbitrators deem appropriate to accomplish the arbitration in the
quickest and least expensive manner possible. Accordingly, the arbitrators may
(i) dispense with any formal rules of evidence and allow hearsay testimony
so as to limit the number of witnesses required, (ii) minimize discovery
procedures as the arbitrators deem appropriate, (iii) limit the time for
presentation of any party’s case as well as the amount of information or number
of witnesses to be presented in connection with any hearing, and
(iv) impose any other rules which the arbitrators believe appropriate to
effect a resolution of the dispute as quickly and inexpensively as possible. In
any event, the arbitrators (A) shall permit each side no more than two (2)
depositions (including any deposition of experts), which depositions may not
exceed four (4) hours each, one set of 10 interrogatories (inclusive of
sub-parts) and one set of five (5) document requests (inclusive of sub-parts);
(B) shall not permit any requests for admissions; (C) shall limit the hearing,
if any, to two (2) days; and (D) shall render their decision within sixty (60)
days of the filing of the arbitration.

(d)           The arbitrators will have the
exclusive authority to determine and award costs of arbitration and the costs
incurred by any party for its attorneys, advisors and consultants.

(e)           Any award made by the arbitrators
shall be binding on the parties and all parties to the arbitration and shall be
enforceable to the fullest extent of the law.

(f)            In reaching any determination or
award, the arbitrators will apply the laws of the state of Texas. Except as
permitted under Section 8.25(d) above, the arbitrators’ award will be limited
to actual damages and will not include consequential, special, punitive or
exemplary damages. Nothing. contained in this Agreement will be deemed to give
the arbitrators any authority, power or right to alter, change, amend, modify,
add to or subtract from any of the provisions of this Agreement. All privileges
under state and federal law, including, without limitation, attorney-client,
work product and party communication privileges, shall be preserved and
protected. All experts engaged by a party must be disclosed to the other party
within fourteen (14) days after the date of notice and demand for arbitration
is given.

(g)           Notwithstanding any provision of this
Agreement to the contrary, any party may seek injunctive relief or other form
of ancillary relief at any time from any court of competent jurisdiction in
Denver, Colorado. In the event that a dispute or 

 25
 

controversy requires
emergency relief before the matter may be resolved under the arbitration
procedures of this 

Section 8.25, notwithstanding the fact that any court of competent jurisdiction
may enter an order providing for injunctive or other form of ancillary relief,
the parties expressly agree that such arbitration procedures will still govern
the ultimate resolution of that portion of the dispute or controversy not
resolved pursuant to said court order.

[Signature Page Follows]

 26

Executed effective
as of the date written above.

	
  

  	
   

  	
  OWNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BEHRINGER HARVARD
  CORDILLERA, LLC,

  
	
   

  	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   /s/ Gerald J. Reihsen, III

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address: 

  	
  15601 Dallas Parkway,
  Suite 600

  
	
   

  	
   

  	
   

  	
  Addison, Texas 75001

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  DEVELOPER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TP CORDILLERA LLC,

  
	
   

  	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
   /s/ Jefford S. Nelsen

  	
   

  
	
   

  	
   

  	
   

  	
  Jefford S. Nelsen

  
	
   

  	
   

  	
   

  	
  Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address:

  	
  560 Townsend St., 7th Floor

  
	
   

  	
   

  	
   

  	
  San Francisco,
  California 94107

  
						

 

EXHIBIT A

LEGAL DESCRIPTION

Legal
Description of Lodge and Spa Real Property

LOT 1, ACCORDING TO THE “AMENDED
FINAL PLAT, LOT 36, CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2;
LOT 1, FILING NO. 1, CORDILLERA SUBDIVISION, FILING NO. 1
& NO. 2; AND TRACT X, CORDILLERA SUBDIVISION FILING NO. 3”, RECORDED
JANUARY 14, 2003 AT RECEPTION NO. 820221, COUNTY OF EAGLE, STATE OF COLORADO.

Legal
Description of Village Center Real Property

TRACT X, “AMENDED FINAL PLAT, LOT
36, CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2; LOT 1, FILING NO. 1,
CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2; AND TRACT X, CORDILLERA
SUBDIVISION, FILING NO. 3”, RECORDED JANUARY 14, 2003 AT RECEPTION NO. 820221,
COUNTY OF EAGLE, STATE OF COLORADO.

TOGETHER WITH EASEMENTS AND
BENEFITS AS DESCRIBED IN AMENDED AND RESTATED DECLARATION OF PROTECTIVE
COVENANTS RECORDED MAY 12, 1993 IN BOOK 608 AT PAGE 785 AND SECOND AMENDMENT
THERETO RECORDED MAY 11, 1998 AT RECEPTION NO. 655728, AFFIDAVIT OF
CLARIFICATION RECORDED MAY 10, 1995 IN BOOK 663 AT PAGE 72, COUNTY OF EAGLE,
STATE OF COLORADO.

TOGETHER WITH NONEXCLUSIVE
INGRESS AND EGRESS EASEMENTS RESERVED PURSUANT TO THE QUITCLAIM DEEDS RECORDED
APRIL 21, 2003 AT RECEPTION NO. 830524, 830525, 830526, 830527, 830528, 830529
AND 830530, COUNTY OF EAGLE, STATE OF COLORADO.

 A-1
 

Legal
Description of Cordillera Mountain Club

CONDOMINIUM UNIT 333-C, THE
STRAWBERRY PARK CONDOMINIUMS, IN ACCORDANCE WITH AND SUBJECT TO THE DECLARATION
OF COVENANTS, CONDITIONS AND RESTRICTIONS OF THE STRAWBERRY PARK CONDOMINIUMS,
RECORDED APRIL 3, 1989, IN BOOK 503 AT PAGE 354, AND AMENDMENT THERETO RECORDED
APRIL 12, 1991 IN BOOK 551 AT PAGE 656, AND SECOND AMENDMENT THERETO RECORDED
JUNE 4, 1992 IN BOOK 581 AT PAGE 544, AND RECORDED SEPTEMBER 25, 1992 IN BOOK
590 AT PAGE 185 AND MAP RECORDED ON APRIL 3, 1989 IN BOOK 503 AT PAGE 353.

FIRST STATEMENT OF INTENTION TO
ANNEX ADDITIONAL CONDOMINIUM UNITS AND COMMON ELEMENTS AND SUPPLEMENT TO
DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF STRAWBERRY PARK
CONDOMINIUMS, RECORDED ON MAY 30, 1989 IN BOOK 507 AT PAGE 220, AND FIRST
AMENDMENT THERETO RECORDED MAY 16, 1991 IN BOOK 554 AT PAGE 86, AND THE
SUPPLEMENTAL CONDOMINIUM MAP RECORDED MAY 30, 1989 IN BOOK 507 AT PAGE 219, AND
SECOND AMENDMENT THERETO RECORDED AUGUST 4, 1992 IN BOOK 586 AT PAGE 212,
COUNTY OF EAGLE, STATE OF COLORADO.

TOGETHER WITH PARKING SPACE NOS.
67 AND 68 AS DEPICTED AND DESCRIBED ON THE MAPS REFERENCED ABOVE, WHICH PARKING
SPACES SHALL BE LIMITED COMMON ELEMENTS APPURTENANT TO CONDOMINIUM UNIT NO.
333-C, THE STRAWBERRY PARK CONDOMINIUMS.

TOGETHER WITH BENEFITS AS CREATED
BY THE BEAVER CREEK DECLARATION RECORDED DECEMBER 27, 1979 IN BOOK 296 AT PAGE
446 AND ANY AND ALL AMENDMENTS THERETO AND TOGETHER WITH BENEFITS AS CREATED BY
THE STRAWBERRY PARK CONDOMINIUM DECLARATION RECORDED APRIL 3, 1989 IN BOOK 503
AT PAGE 354 AND ANY AND ALL SUPPLEMENTS AND AMENDMENTS THERETO

Legal
Description of Grouse on the Green Real Property

TRACT F, CORDILLERA SUBDIVISION,
FILING NO. 16, ACCORDING TO THE CORRECTION PLAT RECORDED NOVEMBER 21, 1994 IN
BOOK 655 AT PAGE 562, COUNTY OF EAGLE, STATE OF COLORADO.

 A-2

EXHIBIT B

CONCEPTUAL DEVELOPMENT PLAN

Cordillera Lodge Hotel

Exhibit B

CONCEPTUAL DEVELOPMENT
PLAN

Project Summary

	
  Site and Building

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land Acreage

  	
   

  	
  5.28

  	
   

  	
   

  	
   

  
	
  Building SF

  	
   

  	
  82,291

  	
   

  	
   

  	
   

  
	
  Saleable SF

  	
   

  	
  26,152

  	
   

  	
   

  	
   

  
	
  Total Units

  	
   

  	
  56

  	
   

  	
   

  	
   

  
	
  Total Keys

  	
   

  	
  56

  	
   

  	
   

  	
   

  
	
  Average Unit SF

  	
   

  	
  467

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Construction and
  Development Costs

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land Cost

  	
   

  	
  $

  	
  11,390,000

  	
   

  	
   

  	
   

  
	
  Hard
  Construction Costs

  	
   

  	
  4,770,000

  	
   

  	
   

  	
   

  
	
  FF&E 

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Soft Costs

  	
   

  	
  949,855

  	
   

  	
   

  	
   

  
	
  Total
  Construction/Development Costs

  	
   

  	
  $

  	
  17,109,855

  	
   

  	
   

  	
   

  
	
  Less Marketing
  Costs Paid from Sales Financing Costs

  	
   

  	
  2,643,890

  	
   

  	
   

  	
   

  
	
  Total Project
  Costs

  	
   

  	
  $

  	
  19,753,745

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash Flow

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Unleveraged
  Project Cash Flow

  	
   

  	
  $

  	
  10,921,395

  	
   

  	
   

  	
   

  
	
  Leveraged Project Cash
  Flow

  	
   

  	
  $

  	
  8,277,505

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Capitalization

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equity

  	
   

  	
  $

  	
  3,900,000

  	
   

  	
  25

  	
  %

  
	
  Mezzanine Debt 

  Construction Debt

  	
   

  	
  $

  	
  11,739,200

  	
   

  	
  75

  	
  %

  
	
   

  	
   

  	
  15,639,200

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sale of Asset

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Year Sold

  	
   

  	
  2010

  	
   

  	
   

  	
   

  
	
  Yearly NOI at Sale

  	
   

  	
  $

  	
  2,300,000

  	
   

  	
   

  	
   

  
	
  Cap Rate

  	
   

  	
  8

  	
  %

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Sales Revenues

  	
   

  	
  $

  	
  28,750,000

  	
   

  	
   

  	
   

  
	
  Cost of Sales

  	
   

  	
  718,750

  	
   

  	
   

  	
   

  
	
  Net Sales

  	
   

  	
  $

  	
  28,031,250

  	
   

  	
   

  	
   

  

 

 B-1

EXHIBIT C

CONCEPTUAL DEVELOPMENT BUDGET

Cordillera Lodge Hotel

Construction Cost

	
   

  	
   

  	
   

  	
   

  	
  $/GSF @

  	
   

  	
  $/SSF @

  	
   

  	
  $/Unit @

  	
   

  	
  Proposed

  	
   

  	
  Development

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  82,291 SF

  	
   

  	
  26,152 SF

  	
   

  	
  56 Units

  	
   

  	
  Budget

  	
   

  	
  Fee Cost

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land Cost

  	
   

  	
   

  	
   

  	
  138.41

  	
   

  	
  435.53

  	
   

  	
  203,393

  	
   

  	
  11,390,000

  	
   

  	
  120,000

  	
   

  
	
  Land+Bldg Cost

  	
   

  	
  Land Value Input

  	
   

  	
  133.67

  	
   

  	
  420.62

  	
   

  	
  196,429

  	
   

  	
  11,000,000

  	
   

  	
   

  	
   

  
	
  Land Due  Diligence Costs

  	
   

  	
  HVAC & H20 Study

  	
   

  	
  0.18

  	
   

  	
  0.57

  	
   

  	
  268

  	
   

  	
  15,000

  	
   

  	
  15,000

  	
   

  
	
  Land Closing Costs

  	
   

  	
  Legal

  	
   

  	
  0.36

  	
   

  	
  1.15

  	
   

  	
  536

  	
   

  	
  30,000

  	
   

  	
  30,000

  	
   

  
	
  Extra

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Ertra

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Extra

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Entitlement Costs

  	
   

  	
  Permits, New Map

  	
   

  	
  0.91

  	
   

  	
  2.87

  	
   

  	
  1,339

  	
   

  	
  75,000

  	
   

  	
  75,000

  	
   

  
	
  BH Asset Management Fee

  	
   

  	
   

  	
   

  	
  3.28

  	
   

  	
  10.32

  	
   

  	
  4,821

  	
   

  	
  270,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Construction (Hard) Costs

  	
   

  	
   

  	
   

  	
  57.97

  	
   

  	
  182.40

  	
   

  	
  85,179

  	
   

  	
  4,770,000

  	
   

  	
  4,770,000

  	
   

  
	
  Capital Improvements

  	
   

  	
  Old Wing Roof

  	
   

  	
  14.58

  	
   

  	
  45.89

  	
   

  	
  21,429

  	
   

  	
  1,200,000

  	
   

  	
  1,200,000

  	
   

  
	
   

  	
   

  	
  Balconies

  	
   

  	
  2.13

  	
   

  	
  6.69

  	
   

  	
  3,125

  	
   

  	
  175,000

  	
   

  	
  175,000

  	
   

  
	
   

  	
   

  	
  HVAC 4 Pipe system

  	
   

  	
  16.71

  	
   

  	
  52.58

  	
   

  	
  24,554

  	
   

  	
  1,375,000

  	
   

  	
  1,375,000

  	
   

  
	
   

  	
   

  	
  Boiler Replacement

  	
   

  	
  6.08

  	
   

  	
  19.12

  	
   

  	
  8,929

  	
   

  	
  500,000

  	
   

  	
  500,000

  	
   

  
	
   

  	
   

  	
  Misc Upgrades - Rock Resorts

  	
   

  	
  18.47

  	
   

  	
  58.12

  	
   

  	
  27,143

  	
   

  	
  1,520,000

  	
   

  	
  1,520,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FF&E

  	
   

  	
  New Case Goods and Refresh

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Soft Costs

  	
   

  	
   

  	
   

  	
  11.54

  	
   

  	
  36.32

  	
   

  	
  16,962

  	
   

  	
  949,855

  	
   

  	
  488,500

  	
   

  
	
  Architects/Consultants (% Hard Costs)

  	
   

  	
  3.04

  	
   

  	
  9.56

  	
   

  	
  4,464

  	
   

  	
  250,000

  	
   

  	
  250,000

  	
   

  
	
  Operations - Startup, Monthly Shortfall, Misc

  	
   

  	
  3.65

  	
   

  	
  11.47

  	
   

  	
  5,357

  	
   

  	
  300,000

  	
   

  	
   

  	
   

  
	
  Legal

  	
   

  	
  Estimate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Marketing (Fixed)

  	
   

  	
  Estimate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title Insurance - Upgrade over land prem Upgrade over
  land premium: $0.7/1000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Real Estate Taxes

  	
   

  	
  $.12/$100 of land during precon & 55% land+hard
  costs during const

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Owner’s Budget Contingency

  	
   

  	
  5.00% of hard costs

  	
   

  	
  2.90

  	
   

  	
  9.12

  	
   

  	
  4,259

  	
   

  	
  238,500

  	
   

  	
  238,500

  	
   

  
	
  Development Fee as % TPC

  	
   

  	
  3.00% of total
  project costs less Financing,  Sales
  & Marketing

  	
   

  	
  1.37

  	
   

  	
  4.32

  	
   

  	
  2,017

  	
   

  	
  112,949

  	
   

  	
   

  	
   

  
	
  Unit Sales Title & Escrow

  	
   

  	
  $ Per Unit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Warranty Reserve

  	
   

  	
  $ Per Unit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Insurance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Testing

  	
   

  	
  Lump Sum Estimate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deferred Development Fee

  	
   

  	
  Included in FF&E

  	
   

  	
  0.59

  	
   

  	
  1.85

  	
   

  	
  864

  	
   

  	
  48,407

  	
   

  	
   

  	
   

  
	
  Blueprints/Messenger/Misc.

  	
   

  	
  Lump Sum

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Warranty Insurance per Unit

  	
   

  	
  $ Per Unit Estimate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Construction Costs

  	
   

  	
   

  	
   

  	
  207.92

  	
   

  	
  654.25

  	
   

  	
  305,533

  	
   

  	
  17,109,855

  	
   

  	
  5,378,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financing Costs

  	
   

  	
   

  	
   

  	
  31.87

  	
   

  	
  100.28

  	
   

  	
  46,831

  	
   

  	
  2,622,548

  	
   

  	
   

  	
   

  
	
  Construction Loan Interest

  	
   

  	
   

  	
   

  	
  27.48

  	
   

  	
  86.48

  	
   

  	
  40,385

  	
   

  	
  2,261,548

  	
   

  	
   

  	
   

  
	
  Debt and Equity Financing Fees

  	
   

  	
   

  	
   

  	
  4.39

  	
   

  	
  13.80

  	
   

  	
  6,446

  	
   

  	
  361,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Project Costs

  	
   

  	
   

  	
   

  	
  239.79

  	
   

  	
  754.53

  	
   

  	
  352,364

  	
   

  	
  19,732,403

  	
   

  	
   

  	
   

  

 

 C-1

EXHIBIT D

CONCEPTUAL PROJECT SCHEDULE

CORDILLERA

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Months

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
  1

  JUNE

  	
  2

  JULY

  	
  3

  AUG

  	
  4

  SEPT

  	
  5

  OCT

  	
  6

  NOV

  	
  7

  DEC

  	
  8

  JAN

  	
  9

  FEB

  	
  10

  MAR

  	
  11

  APR

  	
  12

  MAY

  	
  13

  JUNE

  	
  14

  JULY

  	
  15

  AUG

  	
  16

  SEPT

  	
  17

  OCT

  	
  18

  NOV

  	
  19

  DEC

  	
  20

  JAN

  	
  21

  FEB

  	
  22

  MAR

  	
  23

  APR

  	
  24

  MAY

  	
  25

  JUNE

  	
  26

  JULY

  	
  27

  AUG

  	
  28

  SEPT

  	
  29

  OCT

  	
  30

  NOV

  	
  31

  DEC

  
	
  1

  	
  Phase 1A
  - 19 Units

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
  Development

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
  Design

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  Conceptual/Schematic

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  Const Drwgs/Permits

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  Construction

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  Sales

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  DRE Submittal

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  DRE Approval

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  Setup

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
  Sales

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12

  	
  Phase
  1B- Lodge Renovations

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
  Development

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14

  	
  Design

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15

  	
  Conceptual/Schematic

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  Const Drwgs/Permits

  	
   

  	
   

  	
   

  	
   

  	
  Design Build 4
  Pipe, Boiler, Roof

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17

  	
  Construction

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18

  	
  4 Pipe system

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Summer-Central
  Plant, Fall - Rooms

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19

  	
  Roof

  	
   

  	
  Repair

  	
   

  	
   

  	
   

  	
  Renovate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19

  	
  Boilers

  	
   

  	
  Redundancy

  	
   

  	
   

  	
   

  	
  Replacement

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20

  	
  Balconies

  	
   

  	
  Weather Dependent

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21

  	
  Misc Interior

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
																																		

 

 D-1

EXHIBIT E

DEFINITION OF DESIGNATED
CONSTRUCTION COSTS

As used in this
Agreement, the term “Designated Construction
Costs” means the amounts identified as such on Exhibit E-1 attached hereto, to the
extent that such costs are included in the Final Development Budget and
actually spent. Acquisition costs of the Land, ad valorem and other taxes, the
costs of insurance premiums, and debt service shall in all events be excluded
from Designated Construction Costs.

	
  Cordillera Lodge Hotel

  	
  Exhibit
  E-1

  	
   

  

 

Construction
Cost

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Designated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $/GSF @

  	
   

  	
  $/SSF @

  	
   

  	
  $/Unit @

  	
   

  	
  Proposed

  	
   

  	
  Construction

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  82,291 SF

  	
   

  	
  26,152 SF

  	
   

  	
  56 Units

  	
   

  	
  Budget

  	
   

  	
  Costs

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land Cost

  	
   

  	
   

  	
   

  	
  138.41

  	
   

  	
  435.53

  	
   

  	
  203,393

  	
   

  	
  11,390,000

  	
   

  	
  120,000

  	
   

  
	
  Land+Bldg Cost

  	
   

  	
  Land Value Input

  	
   

  	
  133.67

  	
   

  	
  420.62

  	
   

  	
  196,429

  	
   

  	
  11,000,000

  	
   

  	
   

  	
   

  
	
  Land Due  Diligence Costs

  	
   

  	
  HVAC & H20 Study

  	
   

  	
  0.18

  	
   

  	
  0.57

  	
   

  	
  268

  	
   

  	
  15,000

  	
   

  	
  15,000

  	
   

  
	
  Land Closing Costs

  	
   

  	
  Legal

  	
   

  	
  0.36

  	
   

  	
  1.15

  	
   

  	
  536

  	
   

  	
  30,000

  	
   

  	
  30,000

  	
   

  
	
  Extra

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Extra

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Extra

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Entitlement Costs

  	
   

  	
  Permits, New Map

  	
   

  	
  0.91

  	
   

  	
  2.87

  	
   

  	
  1,339

  	
   

  	
  75,000

  	
   

  	
  75,000

  	
   

  
	
  BH Asset Management Fee

  	
   

  	
   

  	
   

  	
  3.28

  	
   

  	
  10.32

  	
   

  	
  4,821

  	
   

  	
  270,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Construction (Hard) Cost

  	
   

  	
   

  	
   

  	
  57.97

  	
   

  	
  182.40

  	
   

  	
  85,179

  	
   

  	
  4,770,000

  	
   

  	
  4,770,000

  	
   

  
	
  Capital Improvements

  	
   

  	
  Old Wing Roof

  	
   

  	
  14.58

  	
   

  	
  45.89

  	
   

  	
  21,429

  	
   

  	
  1,200,000

  	
   

  	
  1,200,000

  	
   

  
	
   

  	
   

  	
  Balconies

  	
   

  	
  2.13

  	
   

  	
  6.69

  	
   

  	
  3,125

  	
   

  	
  175,000

  	
   

  	
  175,000

  	
   

  
	
   

  	
   

  	
  HVAC 4 Pipe system

  	
   

  	
  16.71

  	
   

  	
  52.58

  	
   

  	
  24,554

  	
   

  	
  1,375,000

  	
   

  	
  1,375,000

  	
   

  
	
   

  	
   

  	
  Boiler Replacement

  	
   

  	
  6.08

  	
   

  	
  19.12

  	
   

  	
  8,929

  	
   

  	
  500,000

  	
   

  	
  500,000

  	
   

  
	
   

  	
   

  	
  Misc Upgrades - Rock Resorts

  	
   

  	
  18.47

  	
   

  	
  58.12

  	
   

  	
  27,143

  	
   

  	
  1,520,000

  	
   

  	
  1,520,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FF&E

  	
   

  	
  New Case Goods and Refresh

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Soft Cost

  	
   

  	
   

  	
   

  	
  11.54

  	
   

  	
  36.32

  	
   

  	
  16,962

  	
   

  	
  949,855

  	
   

  	
  488,500

  	
   

  
	
  Architects/Consultants (% Hard Costs)

  	
   

  	
  3.04

  	
   

  	
  9.56

  	
   

  	
  4,464

  	
   

  	
  250,000

  	
   

  	
  250,000

  	
   

  
	
  Operations - Startup, Monthly Shortfall, Misc

  	
   

  	
  3.65

  	
   

  	
  11.47

  	
   

  	
  5,357

  	
   

  	
  300,000

  	
   

  	
   

  	
   

  
	
  Legal

  	
   

  	
  Estimate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Marketing (Fixed)

  	
   

  	
  Estimate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title Insurance - Upgrade over land prem Upgrade over
  land premium: $0.7/1000

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Real Estate Taxes

  	
   

  	
  $.12/$100 of Land during precon & 55% land+hard
  costs during const

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Owner’s Budget Contingency

  	
   

  	
  5.00% of hard costs

  	
   

  	
  2.90

  	
   

  	
  9.12

  	
   

  	
  4,259

  	
   

  	
  238,500

  	
   

  	
  238,500

  	
   

  
	
  Development Fee as % TPC

  	
   

  	
  3.00% of total
  project costs less Financing,  Sales &
  Marketing

  	
   

  	
  1.37

  	
   

  	
  4.32

  	
   

  	
  2,017

  	
   

  	
  112,949

  	
   

  	
   

  	
   

  
	
  Unit Sales Title & Escrow

  	
   

  	
  $ Per Unit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Warranty Reserve

  	
   

  	
  $ Per Unit

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Insurance

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Testing

  	
   

  	
  Lump Sum Estimate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deferred Development Fee

  	
   

  	
  Included in FF&E

  	
   

  	
  0.59

  	
   

  	
  1.85

  	
   

  	
  864

  	
   

  	
  48,407

  	
   

  	
   

  	
   

  
	
  Blueprints/Messenger/Misc.

  	
   

  	
  Lump Sum

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Warranty Insurance per Unit

  	
   

  	
  $ Per Unit Estimate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Construction Costs

  	
   

  	
   

  	
   

  	
  207.92

  	
   

  	
  654.25

  	
   

  	
  305,533

  	
   

  	
  17,109,855

  	
   

  	
  5,378,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financing Cost

  	
   

  	
   

  	
   

  	
  31.87

  	
   

  	
  100.28

  	
   

  	
  46,831

  	
   

  	
  2,622,548

  	
   

  	
   

  	
   

  
	
  Construction Loan Interest

  	
   

  	
   

  	
   

  	
  27.48

  	
   

  	
  86.48

  	
   

  	
  40,385

  	
   

  	
  2,261,548

  	
   

  	
   

  	
   

  
	
  Debt and Equity Financing Fees

  	
   

  	
   

  	
   

  	
  4.39

  	
   

  	
  13.80

  	
   

  	
  6,446

  	
   

  	
  361,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Project Costs

  	
   

  	
   

  	
   

  	
  239.79

  	
   

  	
  754.53

  	
   

  	
  352,364

  	
   

  	
  19,732,403

  	
   

  	
   

  	
   

  

 

 E-1

EXHIBIT F

SCHEDULE FOR PAYMENT OF
DEVELOPMENT FEE

Seventy percent (70%) of the Development Fee
shall be funded in accordance with the following schedule.

Cordillera
Lodge Hotel 

Exhibit
F

Schedule for Payment of Development Fee

70% of Fee   =      
$ 112,949

	
  June-07

  	
   

  	
  $

  	
  37,650

  	
   

  
	
  July-07

  	
   

  	
  $

  	
  37,650

  	
   

  
	
  August-07

  	
   

  	
  $

  	
  9,412

  	
   

  
	
  September-07

  	
   

  	
  $

  	
  9,412

  	
   

  
	
  October-07

  	
   

  	
  $

  	
  9,412

  	
   

  
	
  November-07

  	
   

  	
  $

  	
  9,412

  	
   

  
	
   

  	
   

  	
  $

  	
  112,949

  	
   

  

 

 F-1

EXHIBIT G

REDUCTION IN DEVELOPMENT FEE

1.             Owner and Developer
have agreed that seventy percent (70%) of the Development Fee shall be funded
in accordance with the provisions of Exhibit F and that thirty percent
(30%) of the Development Fee (the “Retained Development Fee”) shall be
retained by Owner pending Completion and shall be subject to loss by Developer
in accordance with the provisions of this Exhibit G.

2.             If the Designated
Construction Costs incurred to complete the Project exceed the Designated Construction
Costs set forth in the Final Development Budget, then the Development Fee shall
be reduced as follows:

(a)           if the Designated
Construction Costs incurred to complete the Project exceed the Designated
Construction Costs set forth in the Final Development Budget by less than three
percent (3%) of the budgeted Designated Construction Costs, then the
Development Fee shall be reduced by the lesser of (i) the amount by which
incurred Designated Construction Costs exceed the Designated Construction Costs
set forth in the Final Development Budget, or (ii) seventeen percent (17%) of
the Retained Development Fee;

(b)           if the Designated
Construction Costs incurred to complete the Project exceed the Designated
Construction Costs set forth in the Final Development Budget by three percent
(3%) or more (but less than five percent (5%)) of the budgeted Designated
Construction Costs, then the Development Fee shall be reduced by an amount
equal to thirty four percent (34%) of the Retained Development Fee; and

(c)           if the Designated
Construction Costs incurred to complete the Project exceed the Designated
Construction Costs set forth in the Final Development Budget by five percent
(5%) or more of the budgeted Designated Construction Costs, then the
Development Fee shall be reduced by an amount equal to fifty percent (50%) of
the Retained Development Fee.

3.             If the actual date of
Completion extends beyond the date of Completion as projected in the Final
Project Schedule (excluding delays caused by Force Majeure Events or delays
resulting from change orders approved or deemed approved by Owner), then the
Development Fee shall be reduced as follows:

(a)           if the actual date of
Completion exceeds the projected Completion date by more than sixty (60) days
(but less than ninety (90) days), then the Development Fee shall be reduced by
seventeen percent (17%) of the Retained Development Fee;

(b)           if the actual date of
Completion exceeds the projected Completion date by ninety (90) days or more
(but less than one hundred twenty (120) days), then the Development Fee shall
be reduced by fifty percent (50%) of the Retained Development Fee; and

 G-1
 

(c)           if the actual date of
Completion exceeds the projected Completion date by one hundred twenty (120)
days or more, then the Development Fee shall be reduced by one hundred percent
(100%) of the Retained Development Fee.

4.             Notwithstanding the
foregoing provisions of this Exhibit G,
in no event shall the aggregate decrease in the Development Fee pursuant to
Sections 2 and 3 above exceed an amount equal to one hundred percent (100%) of
the Retained Development Fee.

 G-2

EXHIBIT H

INSURANCE REQUIREMENTS

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

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

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

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

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

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

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

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

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

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

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

 H-1
 

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

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

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

V.            Additional
Requirements.

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

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

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

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

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

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

 H-2

EXHIBIT I

POTENTIAL DELEGATION ITEMS

1.                                       Authority
to enter into contracts with third parties, as Owner’s agent, calling for total
payments in an amount not to exceed the limit specified by Owner, including
(without limitation) contracts with engineers and other consultants, as long as
same fit within the goals of the Plan.

2.                                       Authority
to represent, sign and obtain business licenses, building permits and special
permits for permanent improvements, excluding permits required to be obtained
directly by the various consultants and contractors on the Project.

3.                                       Authority
to represent, sign and obtain approvals from authorities having jurisdiction
over the Project, including planning, zoning and map approvals and all other
entitlements required to execute the Plan.

4.                                       Authority
to negotiate and disperse funds necessary for agreements with public bodies and
utility companies for access, traffic control and utility services for the
Project.

5.                                       Authority
to coordinate and supervise all design/development aspects of the Project.  The parties acknowledge that the Plans, once
created, are subject to revision.  Owner
may delegate to Developer by written instrument the right to approve changes to
the drawings and execute change orders that are not material changes and do not
affect the Plan.

6.                                       Authority
to initiate, facilitate and engage counsel to file any lawsuit involving a
dispute of less than $500,000.

7.                                       Authority
to facilitate and oversee the sale of any personal property so long as the sale
meets the goals of the Plan.

8.                                       Authority
to supervise all submittals to any lender or prospective lender and facilitate
all required disbursements of development draws in accordance with the terms
and conditions of any loan made with respect to the development of the Project.

9.                                       Authority
to coordinate inspections (in cooperation with the Architect and the GC)
required by municipal authorities, any lender and either of their respective
agents, contractors, employees or designees relating to the overall
construction of the Project, including, but not limited to, signing
applications for building permits, approvals and certificates of occupancy,
etc.

10.                                 Authority
to facilitate, at Owner’s sole cost and expense (subject to limitations on
amount imposed by Owner), Owner’s compliance with all legal requirements
governing the construction of the Project, the terms and conditions of any loan
with respect to the Project and the marketing and promotion of the Project.

 I-1
 

11.                                 Authority
to pay from the Operating Account, when due, all expenses, including without
limitation taxes, assessments and other levies applicable to the Project, and
deliver to the Owner reasonable proof of payment as soon as reasonably
available after the due date thereof. 
Should the Owner so elect, disbursements may be executed through a
commercial lender pursuant to said lender’s disbursement policies.

12.                                 Authority
to maintain records, books and accounts with respect to the Project, which
records shall be subject to examination by Owner or its authorized agents and
employees at all reasonable hours, and which records, books and accounts will
be the property of Owner.

13.                                 Developer
and Owner shall agree upon an initial amount to fund the Operating
Account.  Developer may be authorized by
Owner in writing to issue checks upon the Operating Account to pay for all
authorized obligations and expenditures incurred by Developer and for and on
account of the Owner in connection with the design, development, promotion and
marketing of the Project. It is expressly understood and agreed by Developer
that all disbursements of funds authorized by Owner to be made by Developer
shall be made by a check drawn on the Operating Account; provided, however,
that Developer shall not, without the prior consent of the Owner, draw any
checks on the Operating Account other than those for payment of expenses as
specified in the Plan. Developer shall cause all disbursements, transfers or
refunds of funds to be reflected by appropriate journal or bookkeeping entries
and substantiated by appropriate records and accounting procedures.

 I-2Exhibit 10.8

DEVELOPMENT AGREEMENT

(Fractionals)

BY AND BETWEEN

BEHRINGER HARVARD CORDILLERA, LLC,

a Delaware limited liability company

(“Owner”)

and

TP CORDILLERA LLC,

a Delaware limited liability company

(“Developer”)

May 10, 2007

TABLE OF CONTENTS

	
  

  	
   

  	
   

  	
   

  	
  Page No.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE 1

  	
   

  	
  PURPOSE

  	
   

  	
  1

  
	
  ARTICLE 2

  	
   

  	
  APPOINTMENT AND
  DEVELOPMENT

  	
   

  	
  1

  
	
  Section 2.1

  	
   

  	
  Appointment of Developer as Developer

  	
   

  	
  1

  
	
  Section 2.2

  	
   

  	
  Acceptance by Developer

  	
   

  	
  1

  
	
  Section 2.3

  	
   

  	
  Pre-Construction Duties

  	
   

  	
  2

  
	
  Section 2.4

  	
   

  	
  Project Design

  	
   

  	
  3

  
	
  Section 2.5

  	
   

  	
  Other Services

  	
   

  	
  3

  
	
  Section 2.6

  	
   

  	
  Commencement of Construction

  	
   

  	
  4

  
	
  Section 2.7

  	
   

  	
  Project Administration

  	
   

  	
  5

  
	
  Section 2.8

  	
   

  	
  Limitation on Expenditures

  	
   

  	
  9

  
	
  Section 2.9

  	
   

  	
  Employees

  	
   

  	
  9

  
	
  Section 2.10

  	
   

  	
  Funds for Construction

  	
   

  	
  10

  
	
  Section 2.11

  	
   

  	
  Ownership of Information and Materials

  	
   

  	
  10

  
	
  Section 2.12

  	
   

  	
  Hazardous Substances

  	
   

  	
  10

  
	
  Section 2.13

  	
   

  	
  Payment for Materials

  	
   

  	
  11

  
	
  Section 2.14

  	
   

  	
  Completion

  	
   

  	
  11

  
	
  Section 2.15

  	
   

  	
  REIT Limitations

  	
   

  	
  12

  
	
  ARTICLE 3

  	
   

  	
  COMPENSATION

  	
   

  	
  14

  
	
  Section 3.1

  	
   

  	
  Development Fee

  	
   

  	
  14

  
	
  Section 3.2

  	
   

  	
  Adjustment to Development Fee

  	
   

  	
  14

  
	
  Section 3.3.

  	
   

  	
  No Other Compensation

  	
   

  	
  14

  
	
  ARTICLE 4

  	
   

  	
  INSURANCE AND INDEMNITY

  	
   

  	
  15

  
	
  Section 4.1

  	
   

  	
  Insurance Requirements

  	
   

  	
  15

  
	
  Section 4.2

  	
   

  	
  Indemnity

  	
   

  	
  15

  
	
  Section 4.3

  	
   

  	
  Waiver of Subrogation

  	
   

  	
  15

  
	
  Section 4.4.

  	
   

  	
  Non-Recourse Liability

  	
   

  	
  16

  
	
  ARTICLE 5

  	
   

  	
  TERM AND TERMINATION

  	
   

  	
  16

  
	
  Section 5.1

  	
   

  	
  Term

  	
   

  	
  16

  
	
  Section 5.2

  	
   

  	
  Termination by Owner

  	
   

  	
  16

  
	
  Section 5.3

  	
   

  	
  Termination by Developer

  	
   

  	
  17

  
	
  Section 5.4

  	
   

  	
  Additional Remedies

  	
   

  	
  18

  
	
  ARTICLE 6

  	
   

  	
  DUTIES UPON TERMINATION
  OR EXPIRATION

  	
   

  	
  18

  
	
  Section 6.1

  	
   

  	
  Developer’s Duties

  	
   

  	
  18

  

 

 

 i
 

 

	
  Section 6.2

  	
   

  	
  Owner’s Duties

  	
   

  	
  18

  
	
  ARTICLE 7

  	
   

  	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  	
  18

  
	
  Section 7.1

  	
   

  	
  Developer’s Representations and Warranties

  	
   

  	
  18

  
	
  Section 7.2

  	
   

  	
  Owner’s Representations and Warranties

  	
   

  	
  19

  
	
  ARTICLE 8

  	
   

  	
  MISCELLANEOUS
  PROVISIONS

  	
   

  	
  20

  
	
  Section 8.1

  	
   

  	
  Notices

  	
   

  	
  20

  
	
  Section 8.2

  	
   

  	
  Assignment

  	
   

  	
  20

  
	
  Section 8.3

  	
   

  	
  Waiver of Lien Claims

  	
   

  	
  20

  
	
  Section 8.4

  	
   

  	
  Lender Requirements

  	
   

  	
  21

  
	
  Section 8.5

  	
   

  	
  Force Majeure Events

  	
   

  	
  21

  
	
  Section 8.6

  	
   

  	
  Governing Law

  	
   

  	
  21

  
	
  Section 8.7

  	
   

  	
  Time of Essence

  	
   

  	
  21

  
	
  Section 8.8

  	
   

  	
  Compliance Amendments

  	
   

  	
  21

  
	
  Section 8.9

  	
   

  	
  Entireties, Beneficiaries

  	
   

  	
  22

  
	
  Section 8.10

  	
   

  	
  No Agency

  	
   

  	
  22

  
	
  Section 8.11

  	
   

  	
  Attorneys’ Fees

  	
   

  	
  22

  
	
  Section 8.12

  	
   

  	
  No Waiver

  	
   

  	
  22

  
	
  Section 8.13

  	
   

  	
  Entire Agreement

  	
   

  	
  22

  
	
  Section 8.14

  	
   

  	
  Severability

  	
   

  	
  22

  
	
  Section 8.15

  	
   

  	
  Amendments

  	
   

  	
  23

  
	
  Section 8.16

  	
   

  	
  Counterparts

  	
   

  	
  23

  
	
  Section 8.17

  	
   

  	
  Additional Acts

  	
   

  	
  23

  
	
  Section 8.18

  	
   

  	
  Additional Phases

  	
   

  	
  23

  
	
  Section 8.19

  	
   

  	
  Exhibits

  	
   

  	
  23

  
	
  Section 8.20

  	
   

  	
  Limitation of Liability

  	
   

  	
  23

  
	
  Section 8.21

  	
   

  	
  Confidentiality

  	
   

  	
  23

  
	
  Section 8.22

  	
   

  	
  Authority of Developer

  	
   

  	
  23

  
	
  Section 8.23

  	
   

  	
  Licenses

  	
   

  	
  23

  
	
  Section 8.24

  	
   

  	
  Non-Discrimination Policy

  	
   

  	
  24

  
	
  Section 8.25

  	
   

  	
  Waiver of Jury Trial

  	
   

  	
  24

  
	
  Section 8.26

  	
   

  	
  Transfer

  	
   

  	
  24

  
	
  Section 8.27

  	
   

  	
  Dispute Resolution

  	
   

  	
  24

  

 

 

 ii

DEVELOPMENT
AGREEMENT

This Development
Agreement (“Agreement”) is made to be
effective as of the 10th day of May 2007, by and between BEHRINGER
HARVARD CORDILLERA, LLC, a Delaware limited liability company (“Owner”), and TP CORDILLERA LLC, a
Delaware limited liability company (“Developer”),
as follows:

ARTICLE 1

PURPOSE

A.                                   Owner
is the owner of certain property in Eagle County, Colorado located on the land
commonly known as The Lodge and Spa at Cordillera (the “Land”)
described in Exhibit A attached hereto and
made a part hereof on which Owner wishes to construct nineteen (19) private
residence club residences which will be sold as approximately 152 fractional
units of interest (the “Buildings”).

B.                                     Developer
and Owner desire to enter into this Agreement to provide the terms and
conditions upon which Owner will retain Developer to develop and construct the
Buildings and related improvements (the “Project”)
located on a portion of the Land consisting of approximately three (3) acres of
land.

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

ARTICLE 2

APPOINTMENT AND DEVELOPMENT

Section 2.1                                      Appointment of Developer as Developer.  Owner hereby appoints Developer as its
independent contractor to perform, and delegates to Developer the right and
obligation to supervise, manage and carry out, on behalf and for the account of
Owner, all planning, development and construction management services for the
Project on the Land, as required by, and subject to, the terms and conditions
of this Agreement, as well as the preparation of the Final Development Plan,
Final Development Budget and Final Project Schedule (as each such term is
defined below) and all items related thereto.

Section 2.2                                      Acceptance by Developer.  Developer accepts such appointment and agrees
to perform such services on behalf of and for the account of Owner as required
by, and subject to, the terms and conditions of this Agreement, and agrees to
perform such additional duties and responsibilities as are customarily and
reasonably within the scope of such services and are reasonably designated from
time to time by Owner.  Developer agrees
to use commercially reasonable efforts in the performance of its duties
hereunder, which performance in all respects and at all times shall be carried
out to the same extent and with the same degree of 

 1
 

care and quality as the Developer would exercise in
the conduct of its own affairs if the Developer were the owner of the Project.
Developer agrees to apply prudent and reasonable business practices in the
performance of its duties hereunder and shall exercise that degree of skill,
competence, quality and professional care rendered by the leading and most
reputable companies performing the same or similar type services for
first-class quality fractional unit projects in the Vail, Colorado area.  Developer will not subcontract any of its
services to any other entity or person without first obtaining Owner’s prior
written consent.  Subject to the other
provisions of this Agreement, Developer, on behalf of Owner, shall manage and
coordinate the development of the Project in accordance with the Final
Development Plan, Final Development Budget and Final Project Schedule (as each
such term is defined below) in a good and workmanlike manner and in accordance
with the standards of professional care applicable to such services.

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

(a)                                  Developer
shall submit to Owner for approval a development plan (the “Development Plan”) for the Project
setting forth a description of the proposed improvements included in the
Project, the schedule for preparation of the plans and specifications for the
Project, and the proposed parameters of agreements with architectural,
engineering, consulting, and general contracting firms.  Attached hereto as Exhibit
B is a conceptual development plan for the Project that has been
approved by Owner.  Based upon the
conceptual development plan attached hereto as Exhibit
B, within five (5) months after the acquisition of the Land by
Owner provided that upon written notice by Developer to Owner such date shall
be automatically extended for thirty (30) days, Developer shall prepare and
obtain Owner’s written approval of a final Development Plan (the “Final Development Plan”) for the
Project (such approval not to be unreasonably withheld so long as the Final
Development Plan is consistent with the conceptual development plan attached
hereto as Exhibit B, which may be modified by the Owner).

(b)                                 Developer
shall submit to Owner for approval a development budget (the “Development Budget”) for the Project
setting forth the hard costs, soft costs, allocated land acquisition costs and
other expenditures anticipated to be incurred in connection with developing the
Project.  Attached hereto as Exhibit C is a conceptual budget for
the Project that has been approved by Owner. 
Based upon the conceptual budget attached hereto as Exhibit
C, within five (5) months after the acquisition of the Land by
Owner provided that upon written notice by Developer to Owner such date shall
be automatically extended for thirty (30) days, Developer shall prepare and
obtain Owner’s written approval of a final Development Budget (the “Final Development Budget”) for the
Project (such approval not to be unreasonably withheld so long as the proposed
Final Development Budget is consistent with the conceptual budget attached
hereto as Exhibit C, which may be modified by the Owner).

(c)                                  Developer
shall make recommendations to Owner with respect to the size and configuration
of the Project, future growth, permanent financing options, marketing, 

 2
 

project execution
(architect, contractors, consultants), special requirements and conditions.

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

(e)                                  Developer
shall prepare and compile data for the Project, including without limitation,
site information, income and expense statements, schedules, drawings and
renderings. Such items shall be delivered to Owner upon request.

Section 2.4                                      Project Design.  Owner, after consultation with Developer,
shall designate an architect (“Architect”)
as the architect for the Project. 
Developer shall negotiate the contract with the Architect for the
Project, which shall be subject to the review and prior written approval of
Owner.  The contract with the Architect
shall substantially conform with the form, or in the absence of an actual form,
shall substantially conform with the guidelines and contain such specific
provisions as are pre-approved by Owner. 
Owner shall enter into the agreement with the Architect in its
name.  Developer shall not amend or alter
the terms of the Architect’s contract without the prior written approval of
Owner.  Developer shall use diligent
efforts to cause the plans and specifications for the Project to be prepared in
a timely manner and in accordance with the design criteria and the Final
Development Plan and Final Development Budget for the Project.  The final plans and specifications for the
Project shall be approved in writing by Owner.

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

(a)                                  Interview,
negotiate with, and, after consultation with and approval of Owner, recommend
for engagement by Owner any other independent design and development
consultants (the “Consultants”) for the
Project, including, if and as appropriate, space planners, landscape
architects, civil, soils, mechanical, electrical and plumbing engineers, and
acoustical, curtain wall, lighting, art and graphic design consultants.

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

(c)                                  Initiate
the planning and coordinate with Owner and the Architect the receipt of all
necessary public and private approvals for the Project, including city
planning, applicable building codes, public works, any applicable architectural
review committee, and building permit approvals.  Coordinate, with reliance on the Architect,
engineers and Consultants, satisfaction of all laws and regulations affecting
the Project, including, without limitation, the Americans with Disabilities Act
and all environmental laws.

(d)                                 Review
designs during their development and advise Owner regarding on-

 3
 

site use and
improvements, selection of materials, building systems and equipment and
methods of delivery.

(e)                                  Provide
Owner with a monthly (or more often, if Owner so requests) progress report at
the beginning of each month detailing (i) the amount of work on the Project
that has been completed during the previous calendar month in relation to the
schedule for the Project (the “Project Schedule”);
and (ii) the General Contractor’s and all subcontractors’ compliance with the
Final Development Budget, as well as any changed conditions regarding
cost.  Any changes shall be reported to
Owner as soon as possible for Owner’s approval. Attached hereto as Exhibit D is a conceptual project
schedule that has been approved by Owner. 
Based upon the conceptual project schedule attached hereto as Exhibit D, Developer shall
prepare and obtain Owner’s approval of a final Project Schedule (the “Final Project Schedule”) (such
approval not to be unreasonably withheld so long as the proposed Final Project
Schedule is consistent with the conceptual project schedule attached hereto as Exhibit D).  In this regard, Owner and Developer agree
that it is their intent to commence construction of the Project in accordance with the Final Development Plan,
and Developer shall prepare and obtain Owner’s approval of the Project
Schedule (such approval not to be unreasonably withheld).  The Project Schedule and General Contract
shall clearly state number of delay days that are built into the Project
Schedule based on factual weather data for the Vail, Colorado area as provided
by the U.S. Weather Bureau.

(f)                                    Advise
Owner regarding space planning, design and finish-out evaluations for the
Project.

(g)                                 Prepare
a detailed estimate of construction costs, developed by using estimating
techniques which anticipate the various elements of the Project, and based on
schematic design documents prepared by the Architect.  Update and refine this estimate periodically
as the Architect prepares design development and construction documents.

(h)                                 Provide
business administration and supervision consistent with good construction
practices and as may be required for the Project; cause budget draw projections
for all key trades and schedules for the purchase and delivery of all materials
for the Project to be prepared and furnished to Owner.

Section 2.6                                      Commencement of Construction.

(a)                                  At
such time as Owner elects to commence construction of the Project, Owner will
give written notice thereof to Developer, and Developer shall commence or cause
to be commenced the construction with reasonable promptness thereafter.  Owner, after consultation with Developer,
shall designate the general contractor (“General Contractor”)
for the Project. Developer shall negotiate the contract with the General Contractor
for the Project, which shall be subject to the review and approval of Owner.
The Developer shall, if requested by Owner, require the General Contractor and
its major subcontractors to provide performance and payment bonds in a form
satisfactory to Owner as security for their respective obligations naming Owner
and Developer as co-obligees thereon. 
The General Contract shall substantially conform with the form, or in 

 4
 

the absence of an actual
form shall substantially conform with the guidelines and contain such
provisions as are approved by Owner. 
Owner shall enter into the General Contract with the General Contractor
in its name.  Developer shall not amend
or alter the terms of the General Contract or issue or authorize change orders
in connection therewith without the prior written approval of Owner.

(b)                                 Developer
shall cause the Project to be developed and constructed in accordance with the
Final Development Plan, Final Development Budget and Final Project
Schedule.  Developer shall provide Owner
with information in connection with updating the Final Development Plan, Final
Development Budget and Final Project Schedule as construction progresses and
when requested by Owner, and the Final Development Plan, Final Development
Budget and Final Project Schedule shall be modified from time to time based on
such updates to the extent such modifications are approved in writing by
Owner.  Developer shall use commercially
reasonable efforts to cause the General Contractor to comply with the Final
Development Plan, Final Development Budget and Final Project Schedule.

(c)                                  If
the development and construction of the Project does not progress in accordance
with the dates required by the Project Schedule, Owner, by written request,
shall instruct Developer to cause General Contractor to speed up the work by
all available means, including utilization of overtime, additional work crews
and alternate material suppliers.  Owner
shall bear all costs of such speed up efforts unless such delay arises by
reason of Developer’s gross negligence or willful misconduct.

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

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

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

(b)                                 Appoint
management and support staff to inspect the manner and progress of the
construction of the Project;

(c)                                  Make
visits to the Project site to inspect the work and progress of construction
with the General Contractor and with the Architect and other Consultants, which
visits shall be of such frequency and duration as shall be necessary for Developer

 5
 

to carry out its duties
under this Agreement, to guard against defects and deficiencies in the work and
to determine that the work is being performed in accordance with the
construction documents, but in no event shall Developer make less than three
(3) such visits per month during the construction of the Project. Developer
shall prepare and submit to Owner a progress report no less frequently than
once each month detailing its observations.

(d)                                 Advise
Owner immediately of any material omissions, substitutions, defects, or
deficiencies noted in the work of the General Contractor or any contractor,
subcontractor or materialman.

(e)                                  Consult
with Owner regarding proposed changes and modifications to the construction
documents and coordinate issuance of change orders if and when changes are
approved in writing by Owner and the affected party.  Developer shall ensure that all changes in
the work or services are implemented through written change orders signed by the
Owner and the affected party. Developer shall establish a changes system to
control the writing of change orders and to record all changes to the
construction documents. For changes initiated by the Owner or Developer with
respect to the General Contractor’s work, Developer shall prepare written
change order proposal requests, incorporating detailed drawings and
specifications prepared or approved by the Architect where appropriate.  Developer shall forward the requests to the
General Contractor for preparation of a proposal. For change order requests
initiated by the General Contractor, Developer shall evaluate the requests and,
if applicable, provide a copy to the Architect for comment. Developer shall
evaluate proposed change orders for price, schedule and coordination impact and
shall forward its recommendations to Owner, along with the comments of the
Architect.  For change order proposals
approved by the Owner and the affected party, Developer shall prepare written
change orders and shall obtain the signatures of the Owner and the affected
party. If a change is performed by the General Contractor or a Consultant under
a pricing arrangement other than lump sum, Developer shall make a record of
units, work or services or actual costs incurred, as the case may be.  Developer shall obtain from the General
Contractor and Consultants copies of supporting documents for all units of work
or services or costs incurred. Developer shall keep a record copy of all signed
change orders and shall provide copies to the Architect and Owner.

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

 6
 

information and belief,
the work has progressed to the point indicated and, except as stated in the
certification for payment, the quality of the work is in accordance with the
construction documents.

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

(h)                                 Consult
with the Architect and Owner if the General Contractor or any contractor or
subcontractor requests interpretations of the meaning and intent of the plans
and specifications and assist in the resolution of any questions which may
arise.

(i)                                     Assist
in preparing such reports as may be reasonably required for the use of any
public agency on the progress of construction.

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

(k)                                  Arrange
for the delivery and storage, protection and security of Owner- purchased
materials, systems and equipment which are a part of the Project, until such
items are incorporated into the Project.

(l)                                     On
application for final payment by the General Contractor, cause a final
inspection of the work by the Architect to be performed, assemble and deliver
to Owner any written guaranties, releases, bonds and waivers, instruction
books, diagrams and charts required by the appropriate contract documents, and
issue an approval for final payment.

(m)                               Arrange
for and assist the General Contractor in coordinating the installation of the
public and private utilities with the appropriate utility companies on the most
favorable terms and conditions obtainable at the time.

(n)                                 Coordinate
the construction work with any activities of Owner on or about the Project site
during the construction period, including coordinating the preparation and
completion of punch list items.

(o)                                 Hold
regular meetings to be attended by representatives of Architect, General
Contractor and other key parties, and such special meetings as requested or
required, and record and distribute minutes and decisions; also provide copies
of meeting minutes to Owner.

(p)                                 Establish
a monthly reporting system that covers major operations, cost, schedule, and
marketing aspects of the Project, including:

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

 7
 

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

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

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

(r)                                    Establish
and maintain a central file for all design, construction, and related
contractual documents, including contracts, purchase orders and change orders.

(s)                                  Receive
and confer with Owner regarding response to all notices, claims and pertinent
correspondence, and provide Owner with three (3) close-out binders containing
all warranties, guarantees, operating manuals and as-built drawings at
Completion of the Project.

(t)                                    Make
payment each month of expenditures authorized in the Final Development Budget,
to the extent funds are made available therefor by Owner.

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

(v)                                 Maintain
current and accurate records and reports with regard to the financing,
development and progress of the Project. 
Such records shall be maintained at the Developer’s principal place of
business and shall be made available to the Owner at any reasonable time,
during normal business hours, for review and inspection by the Owner.  Owner shall have the right at its sole cost
and expense to make copies of any books and records applicable to the development
of Project for Owner’s use and review. 
If Owner shall notify Developer of either weaknesses in internal control
or errors in record keeping, Developer shall correct such weaknesses or errors
as soon as possible after they are disclosed to Developer.  Developer shall notify Owner in writing of
the 

 8
 

actions taken to correct
such weaknesses or errors.

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

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

(y)                                 If
there is a construction loan on the Project, assist Owner in preparing and
submitting to the construction lender draw requests in accordance with the
documents evidencing and securing the construction loan and otherwise use
reasonable efforts to ensure that construction of the Project is performed in
compliance with the construction.

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

Section 2.9                                      Employees.  Developer shall have in its employ at all
times and at its sole expense, a sufficient number of capable employees with
sufficient experience and knowledge to enable Developer to perform its duties
hereunder.  All personnel used by
Developer in the 

 9
 

performance of its duties hereunder shall be qualifies
by training and experience to perform their assigned tasks and shall maintain
any and all necessary or appropriate licenses or permits in order to fulfill
their responsibilities in connection with the performance of such work.  The individual development managers
designated by Developer to be dedicated to the Project and who shall be
principally responsible for performing the development management functions set
forth in this Agreement shall be subject to the reasonable approval of Owner.
Owner hereby acknowledges its approval of the following individuals as
development managers principally responsible for performing the development
management functions set forth herein: 
Jeff Nelsen and Bill Sumski. Any substitute development manager shall
also be subject to the reasonable approval of Owner. All persons employed by
Developer in the performance of its responsibilities hereunder shall be
exclusively controlled by and shall be employees of Developer and not of Owner,
and Owner shall have no liability, responsibility or authority with respect
thereto.

Section 2.10                                Funds for Construction.  Owner agrees that it will fund the amount of
the construction, not to exceed the amount shown in the Final Development
Budget as the same is modified by written change orders approved in writing by
Owner.

Section 2.11                                Ownership of Information and Materials.  As
between Owner and Developer, Owner shall have the right to use, without
further compensation to Developer, all written data and information generated
by or for Developer in connection with the Project or supplied to Developer by
Owner or Owner’s contractors or agents, and all drawings, plans, books,
records, contracts, agreements and all other documents and writings in its
possession relating to its services or the Project.  Such data and information shall at all times
be the property of Owner, and upon request of Owner, Developer shall deliver to
Owner any such data and information in the possession of under the control of
Developer. Developer agrees, for itself and all persons retained or employed by
Developer in performing its services, to hold in confidence and not to use or
disclose to others any confidential or proprietary information of Owner which
is heretofore or hereafter disclosed to Developer or any such persons and which
is designated by Owner as confidential and proprietary, including but not
limited to any proprietary or confidential data, information, plans, programs,
plants, processes, equipment, costs, operations, tenants or customers which may
come within the knowledge of Developer or any such persons in the performance
of, or as a result of, its services, except where (a) Owner specifically
authorizes Developer to disclose any of the foregoing to others or such
disclosure reasonably results from the performance of Developer’s duties
hereunder, or (b) such written data or information shall have theretofore been
made publicly available by parties other than Developer or any such persons, or
(c) Developer is required by law to disclose such information (provided that in
such case Developer shall give Owner prior notice of the request for disclosure
and shall cooperate with Owner in obtaining a protective order or other remedy
at Owner’s expense).

Section 2.12                                Hazardous Substances.  Developer shall exercise such efforts as are
exercised by other prudent developers of similar property to prevent any
Hazardous Substances from being deposited, stored, disposed, placed, generated,
manufactured, buried, refined, transported, treated, discharged, handled or
located on the Land or Improvements, except as may be specifically authorized
by Owner of this Agreement.  In
connection with any such Hazardous Substances so authorized, Developer shall
exercise reasonable best efforts to confirm that any such authorized activity
with respect to Hazardous Substances is conducted in accordance with applicable
Governmental Requirements and the terms and conditions of any such
authorization 

 10
 

by Owner.  The
term “Hazardous Substances”
includes (a) any chemical, material, element, compound, solution, mixture,
substance or other matter of any kind whatsoever which is defined, classified,
listed, designated or regulated as hazardous, toxic or radioactive by any
federal statute, ordinance, regulation, order, rule or directive, or any
statute, ordinance, regulation, order, rule or directive of the State of
Colorado, any political subdivisions of that state, any township or municipal
corporation of the state, or any board, agency, authority or body associated
with any of the foregoing or any quasi-governmental body or agency with
jurisdiction over such matters; (b) PCBs or asbestos or materials containing
PCBs or asbestos; (c) petroleum and petroleum-based chemicals and substances;
and (d) urea formaldehyde.  Owner
authorizes Developer to allow a contractor engaged in construction to
temporarily use or store Hazardous Substances where (i) such Hazardous
Substances are reasonably required for an area in quantities appropriate to the
performance of the contractors’ work; (ii) the use and storage of such
Hazardous substances is in conformity with all applicable requirements; (iii)
the contractor agrees to indemnify Owner and Developer for all liability
resulting therefrom; and (iv) Developer exercises reasonable oversight over the
contractors’ compliance with clauses (i) and (ii).

Section 2.13                                Payment for Materials.  Notwithstanding anything contained herein to
the contrary, no amount shall be paid to Developer for materials delivered but
not yet incorporated into the Project unless Owner and Project Lender receives
(a) bills of sale or other evidence to the passage of title of such materials
to Owner, subject only to payment, (b) evidence that the materials ate insured
under applicable casualty insurance policies, and (c) evidence that such
materials are securely stored at the Property. 
In the event of any conflict between this Section 2.13 and the terms and
conditions of Owner’s agreements with the Project Lender, the latter shall
control.

Section
2.14                                Completion.

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

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

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

(ii)                                  All
fractional units have been completed with standard finishes in substantial
accordance with the plans and specifications therefore (as same have been
approved by Owner) and are ready for sale.

(iii)                               Owner
has been delivered a true and correct copy of an affidavit of the General
Contractor in respect of the Project setting forth the following:

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

 11
 

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

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

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

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

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

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

(viii)                        Developer
has delivered to Owner a certificate of occupancy for the Project (or similar
governmental approval) allowing unconditional occupancy of the Project for its
intended purpose;

(ix)                                Developer
has delivered to Owner three (3) binders with all warranties, guaranties,
operating manuals and similar closeout documents concerning the improvements
required by the plans and specifications for the Project;

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

Section
2.15                                REIT Limitations.

(a)                                  The
Developer understands and acknowledges that an indirect interest in Owner is
held by Behringer Harvard Opportunity REIT I, Inc. (“BHO”), a corporation
that has elected to be treated as a real estate investment trust under Code
Sections 856 et. seq. (a “REIT”).  The Developer further understands and
acknowledges that in order to maintain its status as a REIT, BHO must comply
with numerous and complex rules and regulations set forth in the Internal
Revenue Code of 1986, as amended (the “Code”), and the Treasury Regulations, many of
which are applied on a quarterly and/or annual basis (the “REIT Requirements”),
and that the actions of the Developer may have a material 

 12
 

effect on the ability of
BHO to continue to maintain its status as a REIT.  Accordingly, notwithstanding any other
provision of this Agreement, the Developer shall not take any action which (i)
could adversely affect the ability of BHO to qualify or continue to qualify as
a REIT, (ii) could subject BHO to any additional taxes under Code Section 857
or Code Section 4981 or other potentially adverse consequences under the Code,
or (iii) otherwise could cause BHO to violate the REIT Requirements.  The provisions of this Section 2.15 shall not
apply to any portion of the Project that has been transferred to a taxable REIT
subsidiary of BHO or an entity owned wholly or in part by a taxable REIT
subsidiary of BHO.

(b)                                 Owner
hereby advises Developer that Developer may take the actions and engage in the
activities described in this Section 2.15(b) (collectively, the “REIT Permitted Activities”) without
being in breach of the covenants set forth in Section 2.15(a) above, so long as
such actions and activities are performed in compliance with the Business Plan,
Final Development Plan and Final Development Budget.  REIT Permitted Activities include any and all
activities (consistent with the Business Plan, Final Development Plan and Final
Development Budget) necessary or reasonably appropriate to develop the Property
up to (but not including) the commencement of actual physical construction of
improvements thereon, including specifically, without limitation, the
following:

(i)                                     Preparation
of a Final Development Plan, Final Development Budget and Final Project
Schedule;

(ii)                                  Interviewing,
negotiating with and recommending the Architect for the Project;

(iii)                               Interviewing,
negotiating with and recommending any other Consultants;

(iv)                              Overseeing
necessary public and private approvals for the Project, including platting,
city planning, applicable building codes, public works, any applicable
architectural review committee, and building permit approvals;

(v)                                 Overseeing
and managing any survey, soil, environmental or any other on site tests
required;

(vi)                              Overseeing,
managing and coordinating the Consultants and Architect;

(vii)                           Reviewing
all Consultants’ designs during their development;

(viii)                        Providing
Owner with monthly progress reports;

(ix)                                Providing
business administration and supervision in respect of the Project;

(x)                                   Soliciting
and negotiating the construction contract with the 

 13
 

General Contractor

(c)                                  The
parties agree that the following activities do not constitute REIT Permitted
Activities:  (i) engaging in the actual
construction of physical improvements on the Property, or (ii) selling,
transferring or entering into any binding agreement to sell or transfer any
portion of the Property to any person (other than an affiliate of Owner).

(d)                                 Nothing
contained in this Agreement shall be construed to restrict the right of
Developer (i) to conduct development activity in compliance with that certain
Development Agreement dated May 10, 2007, by and between Developer as “Developer”
and Behringer Harvard Cordillera, LLC as “Owner”, or (ii) to conduct sales and
marketing activity in compliance with that certain Sales Management Agreement
dated May 10, 2007, by and between Developer as “Manager” and Behringer Harvard
Residences at Cordillera, LLC as “Owner”.

ARTICLE 3

COMPENSATION

Section 3.1                                      Development Fee.  For all services rendered in connection with
the development of the Project pursuant to Article 2, Developer shall be paid a
fee (the “Development Fee”) equal to
three percent (3%) of all approved Designated Construction Costs (as defined in
Exhibit E attached hereto);
provided, however, that the Development Fee shall be subject to possible
reduction as set forth in Section 3.2 below. The Development Fee shall be paid
according to the schedule set forth on Exhibit F
attached hereto, subject to the provisions of Section 3.2 below. 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, whether or not enumerated in Article 2.  Developer shall not be entitled to payment
for or reimbursement of any costs or expenses incurred in the performance of
the services under Article 2 or otherwise in connection with the development of
the Project, except as expressly set forth in this Agreement or the Final
Development Budget.

Section 3.2                                      Adjustment to Development Fee.  Upon the date of Completion, a determination
shall be made as to whether the Development Fee should be reduced.  If the Designated Construction Costs incurred
to complete the Project exceed the Designated Construction Costs set forth in
the Final Development Budget, or if the date of Completion is later than the
date of Completion projected in the Final Project Schedule (excluding delays
caused by Force Majeure Events, delays requested by the General Contractor and approved
by Owner, and delays resulting from change orders initiated by Owner), then the
Development Fee shall be reduced in the manner set forth in Exhibit G attached hereto and made a
part hereof.

Section 3.3                                      No Other Compensation.  Other than the Development Fee, 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 or the Final Development Budget. 
Without limiting the generality of the preceding sentence, it is
specifically agreed that, except as expressly set forth in the Final
Development Budget, Developer will not be entitled to reimbursement for (a)
Developer’s overhead and general expenses; (b) the salary and wages, payroll taxes,
insurance, workers’ compensation and other benefits of any employees of 

 14
 

Developer; (c) the cost of forms, papers, ledgers and
other supplies and equipment used in the Developer’s office; (d) the cost of
electronic data processing or computer services that Developer may elect to
incur in the performance its duties under this Agreement; (e) the cost of
office equipment acquired by Developer to enable it to perform its duties
hereunder; (f) the cost of advances made to employees of Developer; (g) the cost
of travel and lodging by Developer’s employees and agents, unless included in
the Final Development Budget or otherwise approved in writing by Owner (it
being agreed that Owner shall allow Developer a reasonable allowance for travel
expenses); (h) costs arising from the fault or negligence of Developer, and (i)
costs Developer is prohibited from incurring with respect to the Project
pursuant to Section 2.6(d)

ARTICLE 4

INSURANCE AND INDEMNITY

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

Section 4.2                                      Indemnity.  Subject to Section 4.3, Developer shall
indemnify, defend and hold Owner and its owners, officers, employees and agents
harmless from and against any and all costs, expenses, attorneys’ fees, suits,
liabilities, damages, or claims for damages, in any way relating to the
management of the Project by Developer and arising out of or in connection with
the negligence or willful misconduct of Developer or Developer’s failure or
refusal to comply with or abide by or perform its obligations set forth in this
Agreement. Subject to Section 4.3, Owner shall indemnify, defend and hold
Developer and its owners, officers, employees and agents harmless from and
against all costs, expenses, attorneys’ fees, suits, liabilities, damages, or
claims for damages arising out of or in connection with the negligence or
willful misconduct of Owner or Owner’s failure or refusal to comply with or
abide by or perform its obligations set forth in this Agreement. The
indemnities set forth in this Section 4.2 shall survive the termination of this
Agreement, but shall lapse and be of no further effect unless a claim is made
thereunder in a court of competent jurisdiction within the applicable period of
limitations provided under Texas law.

Section 4.3                                      Waiver of Subrogation. 
OWNER, ON BEHALF OF ITSELF AND ITS INSURERS, WAIVES ITS RIGHTS OF
RECOVERY AGAINST DEVELOPER OR DEVELOPER’S PARTNERS AND THEIR RESPECTIVE
OFFICERS, DIRECTORS AND EMPLOYEES, FOR DAMAGES SUSTAINED BY OWNER AS A RESULT
OF ANY DAMAGE TO ANY PROPERTY OR ANY INJURY TO PERSONS ARISING FROM ANY RISK OR
PERIL GENERALLY COVERED OR COVERABLE BY ANY INSURANCE POLICY ACTUALLY CARRIED
BY OR REQUIRED TO BE CARRIED BY OWNER PURSUANT TO THE TERMS OF THIS AGREEMENT, REGARDLESS
OF CAUSE, INCLUDING NEGLIGENCE; AND OWNER AGREES THAT NO PARTY SHALL HAVE ANY
SUCH RIGHT OF RECOVERY BY WAY OF SUBROGATION OR ASSIGNMENT.  DEVELOPER, ON BEHALF OF ITSELF AND ITS
INSURERS, WAIVES ITS RIGHTS OF RECOVERY AGAINST OWNER AND OWNER’S PARTNERS AND
THEIR RESPECTIVE OFFICERS, DIRECTORS AND EMPLOYEES, FOR DAMAGES SUSTAINED BY
DEVELOPER AS A RESULT OF ANY DAMAGE TO ANY PROPERTY OR ANY INJURY 

 15

TO PERSONS ARISING FROM ANY RISK OR PERIL GENERALLY
COVERED OR COVERABLE BY ANY INSURANCE POLICY ACTUALLY CARRIED BY OR REQUIRED TO
BE CARRIED BY DEVELOPER PURSUANT TO THE TERMS OF THIS AGREEMENT, REGARDLESS OF
CAUSE, INCLUDING NEGLIGENCE; AND DEVELOPER AGREES THAT NO PARTY SHALL HAVE ANY
SUCH RIGHT OF RECOVERY BY WAY OF SUBROGATION OR ASSIGNMENT. OWNER AND DEVELOPER
SHALL EACH NOTIFY THEIR RESPECTIVE INSURANCE CARRIERS OF THE MUTUAL WAIVERS
HEREIN CONTAINED AND SHALL CAUSE THEIR RESPECTIVE INSURANCE POLICIES REQUIRED
HEREUNDER TO BE ENDORSED, IF NECESSARY, TO PREVENT ANY INVALIDATION OF COVERAGE
AS A RESULT OF THE MUTUAL WAIVERS HEREIN CONTAINED AND SHALL CAUSE THEIR
RESPECTIVE INSURANCE POLICIES REQUIRED HEREUNDER TO BE ENDORSED, IF NECESSARY,
TO PREVENT ANY INVALIDATION OF COVERAGE AS A RESULT OF THE MUTUAL WAIVERS
HEREIN CONTAINED.

Section 4.4                                      Non-Recourse Liability.  The liability of Owner for the payment of all
sums which may be owed to Developer under this Agreement and for the
performance of all other obligations of Owner to Developer under this Agreement
shall be limited to Owner’s interest in the Project and the proceeds
thereof.  Neither Owner nor any of the
constituent partners or members of Owner or any partners or members,
shareholders, officers, directors, beneficiaries or trustees of the constituent
partners or members of Owner shall be personally liable for the payment of any
sums or the performance of any other obligations to Developer.

ARTICLE 5

TERM AND TERMINATION

Section 5.1                                      Term.  Developer shall manage the development of the
Project as herein specified until Completion (as hereinafter defined) of the
Project; provided, however, if any remedial work to be performed by the General
Contractor (as hereinafter defined) following the Completion of the Project has
not been completed, the term of this Agreement shall be extended until the date
on which any remedial work required to be performed by the General Contractor
following completion of the Project shall be so performed and accepted by Owner.

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

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

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

 16
 

(c)                                  Completion
of the Project is delayed (or in Owner’s reasonable judgment will be delayed)
beyond the scheduled date of Completion set forth in the Final Project
Schedule, and/or the costs of the Project exceed (or in Owner’s reasonable
judgment will exceed) the amount set forth in the Final Development Budget to
such an extent that the Development Fee will be decreased by an amount equal to
thirty percent (30%) of the budgeted
Development Fee pursuant to the provisions of Exhibit
G;

(d)                                 a
good faith determination by Owner that Developer is not developing the Project
in a manner satisfactory to Owner, provided that (i) Owner shall have notified
Developer in writing of such dissatisfaction, and (ii) Developer shall have
failed to cure Owner’s dissatisfaction within sixty (60) days after the giving
of such notice;

(e)                                  a good faith determination by Owner, after a
review of the status of the Project and a review of current market conditions,
that completion of the Project is not economically feasible and the
simultaneous termination of the sales management agreement governing the sales
of the Project;

(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 thirty (30) days to
complete such cure.

(g)                                 Owner
sells the Property, at Owner’s election.

(h)                                 Cordillera Partners, LLC, a Delaware limited liability
company and an affiliate of Developer (“CP
Investor”), defaults in any of its obligations under that
certain Limited Liability Company Agreement of Behringer Harvard Residences at
Cordillera, LLC dated as of May 10, 2007 (the “Owner
LLC Agreement”), and such default is not cured within any
applicable notice or grace period; provided, however, that for purposes of this
Section 5.2(h), the failure of CP Investor to make a capital contribution to
Owner shall not be considered such a default..

(i)                                     CP
Investor ceases to own any interest in Owner.

Section 5.3                                      Termination by Developer.  Developer may terminate this Agreement if one
or more of the following events shall occur:

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

(b)                                 a
material default by Owner under this Agreement that is not cured within thirty
(30) days following receipt of written notice from Developer specifying the
default; provided, however, that if such default cannot be cured within such
thirty (30) day period

 17
 

through the use of
diligent efforts, such period shall be extended for an additional thirty (30)
days; provided, further, that if Owner 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, Owner shall be afforded an
additional thirty (30) days to complete such cure.

Section 5.4                                      Additional Remedies.  If either party defaults in the performance
of any of its obligations hereunder and such default continues beyond the
applicable notice and cure periods as set forth in Section 5.1, then the
non-defaulting party may pursue all other rights, remedies and recourses
available at law.  Enforcement of the
provisions of this Article 5 shall not diminish Developer’s obligations under
Article 6.

ARTICLE 6

DUTIES UPON TERMINATION OR EXPIRATION

Section 6.1                                      Developer’s Duties.  Upon termination or expiration of this
Agreement, Developer shall, within five (5) business days thereafter, deliver
to Owner complete copies of all books and records maintained by Developer for
the Project.

Section 6.2                                      Owner’s Duties.  Owner shall compensate Developer for all fees
earned hereunder through the date of termination promptly following the
delivery of the information called for in Section 6.1, subject to any claims
Owner may have arising out of Developer’s default in performance hereunder.

ARTICLE 7

REPRESENTATIONS AND WARRANTIES

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

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

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

 18
 

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

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

(d)                                 All
authorizations required to be obtained from, and all registrations,
declarations and filings, if any, required to be made with, all governmental
authorities and all other persons or entities to permit Developer to execute and
deliver this Agreement have been obtained.

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

(f)                                    Developer
is possessed of sufficient skill, qualifications, experience, expertise and
capability to perform its obligations hereunder, shall maintain adequate
personnel, manpower, capital, equipment and facilities to perform its
obligations hereunder, and holds any and all licenses, certificates,
authorizations and registrations required to permit it to perform its
obligations hereunder.

(g)                                 Developer
represents that it is knowledgeable and experienced in the development and
construction management of property similar to the Project.

Section 7.2                                      Owner’s Representations and Warranties.  Owner hereby represents and warrants to
Developer as of the date hereof:

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

 19
 

is required in connection
with, the execution, delivery and performance of this Agreement.

(b)                                 The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereunder on the part of Owner do not and will not
conflict with or result in the breach of any material terms or provisions of,
or constitute a default under, or result in the creation or imposition of any
lien, charge, or encumbrance upon any of the assets of Owner by reason of the
terms of any contract, mortgage, lien, lease, agreement, indenture, instrument
or judgment to which Owner is a party or which is or purports to be binding
upon Owner or which otherwise affects Owner, or which otherwise will not be
discharged, assumed or released. No action by any federal, state or municipal
or other governmental department, commission, board, bureau or instrumentality
is necessary to make this Agreement a valid instrument binding upon Owner in
accordance with its terms.

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

(d)                                 All
authorizations required to be obtained from, and all registrations,
declarations and filings, if any, required to be made with, all governmental
authorities and all other persons or entities to permit Owner to execute and
deliver this Agreement have been obtained.

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

ARTICLE 8

MISCELLANEOUS PROVISIONS

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

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

Section 8.3                                      Waiver of Lien Claims.  Developer hereby waives any and all rights it
may now or hereafter have to assert a lien (whether constitutional, statutory,
conferred by common law or arising in any other manner) against the Project or
any part thereof.

 20
 

Section 8.4                                      Lender Requirements.  In the event that a mortgagee of the Project
(a “Project Lender”)
requests that Developer execute a document in connection with a loan to Owner,
Developer will respond to such request promptly and will not unreasonably
withhold its consent to and execution of such document. Without limiting the
generality of the preceding sentence, Developer agrees that it will execute and
deliver the following documents within five (5) days after request therefor:
(a) an agreement that a Project Lender may terminate this Agreement if a default
occurs in respect of the loan secured by the Project; (b) an estoppel
certificate certifying that this Agreement is in full force and effect and
containing such other certifications as may be reasonably requested; (c) an
agreement subordinating this Agreement and the fees payable to Developer
hereunder  to any mortgage or deed or
trust held by a Project Lender; and (d) confirmation of the waiver by Developer
of any right to assert a lien against the Project.  Developer shall use reasonable care to avoid
any act or omission that, in the performance of its duties hereunder, shall in
any way conflict with the terms of any mortgage documents in respect of the
Project, provided that Developer has been furnished with copies of such
mortgage documents. In addition, Developer agrees to conform its general
policies and procedures to any commercially reasonable requirements of any
Project Lender providing financing for the acquisition or construction of the
Project.

Section 8.5                                      Force Majeure Events.  Except for obligations regarding the payment
of money and the maintenance of insurance, whenever a period of time is herein
prescribed for action to be taken by Owner or Developer, neither party shall be
liable or responsible for, and there shall be excluded from the computation for
any such period of time, any delays due to Force Majeure Events.  For purposes hereof, “Force
Majeure Events” shall consist of abnormal weather patterns that
affect critical path construction, acts (or the failure to act) by the other
party to this Agreement, unforeseeable subsurface conditions, uncontrollable
delay in issuance of permits, changes in governmental laws, enemy or hostile
governmental action, civil commotion, and fire or other casualty.  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.

Section 8.6                                      Governing Law.  This Agreement shall be governed and
construed in accordance with the laws of the State of Texas.

Section 8.7                                      Time of Essence.  Time is of the essence of this Agreement.

Section 8.8                                      Compliance Amendments.  Reference
is made to Behringer Harvard Opportunity Op I, LP, a Texas limited partnership (“BH
REIT”), which owns a direct or indirect interest in Owner.  Notwithstanding anything contained herein to
the contrary, in the event that legal counsel for Owner reasonably determines
that an amendment to this Agreement is necessary or advisable in order for this
Agreement to comply with applicable tax laws (including, without limitation,
laws and regulations pertaining to real estate investment trusts), applicable
securities laws, the offering documents pertaining to  BH REIT or any Affiliate, or the Statement of Policy Regarding Real
Estate Programs of the North American Securities Administrators Association,
Inc., effective September
29, 1993, as amended, then Owner and Developer shall, within ten (10) business
days after request from Owner, execute such an amendment; provided,
however, that no such amendment may decrease the compensation to 

 21
 

which
Developer is entitled hereunder or materially increase Developer’s liabilities
or obligations under this Agreement without Developer’s written consent.

Section 8.9                                      Entireties, Beneficiaries.  This Agreement represents the entire
Agreement between Owner and Developer with regard to management of the Project
and all prior agreements are superseded hereby. 
This Agreement is for the sole benefit of Owner and Developer and no
other party is benefited hereby.  This
Agreement creates contractual rights only between Owner and Developer, and
Developer has no lien rights in or to the Project.

Section 8.10                                No Agency.  Developer and its agents shall all act as
independent contractors in respect of Owner with regard to this Agreement.  All personnel and staff of Developer shall be
and remain employees or agents of, or independent contractors with, Developer
and not of or with Owner.  Developer
shall at all times represent to third parties that the relationship of
Developer to Owner, with regard to Developer’s duties under this Agreement, is
that of independent contractor, and Developer and Owner shall not represent to
any party that Developer and Owner are partners, co-venturers or principal and
agent, or have any other relationship other than that of independent
contractors with regard to this Agreement. 
Developer’s authority to act on behalf of Owner will be strictly limited
to that expressly delegated herein or in another written instrument executed by
Owner.  In connection with adoption by
Owner of its Business Plan (as such term is defined in the Owner LLC Agreement)
and approval by Owner of the Final Development Plan, Final Development Budget
and Final Project Schedule (as same may be amended from time to time,
collectively, the “Plan”), Owner will delegate
to Developer by written instrument certain authority consistent with the Plan,
which may include, but will not necessarily be limited to, authority to perform
the actions listed on Exhibit I
attached hereto.

Section 8.11                                Attorneys’ Fees.  Should either the Owner or the Developer
employ an attorney or attorneys to enforce any of the terms and conditions of
this Agreement, or to protect any right or interest created or evidenced
hereby, the losing party shall pay the party obtaining final, unappealable
judgment all reasonable costs, damages and expenses, including reasonable
attorneys’ fees and expenses incurred by the prevailing party.

Section 8.12                                No Waiver.  The failure of either party to seek redress
for violation, or to insist upon the strict performance of any covenant,
agreement, provision or condition of this Agreement shall not constitute a
waiver of such strict performance and the parties shall have all remedies
provided in this Agreement and by applicable law with respect to any subsequent
act which would he originally constituted a violation.

Section 8.13                                Entire Agreement.  This Agreement embodies the entire
understanding of the parties and supersedes all prior agreements and
understandings and there are no further agreements or understandings, written
or oral, in effect between the parties relating to the subject matter of this Agreement.

Section 8.14                                Severability.  If one or more of the provisions of this
Agreement or any application of this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality or enforceability of the
remaining provisions of this Agreement and any other application of such
provisions shall in no way be affected or impaired.

 22
 

Section 8.15                                Amendments.  This Agreement may be amended, from time to
time, only with the written consent of both Owner and Developer.

Section 8.16                                Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and said counterparts
shall constitute but one and the same instrument.

Section 8.17                                Additional Acts.  In connection with this Agreement, as well as
all transactions contemplated by this Agreement, Owner and Developer each agree
to execute and deliver such additional documents and instruments and take all
such necessary action and perform such additional acts as may be necessary or
appropriate to effectuate, carry out and perform all of the terms, provisions
and conditions of this Agreement and all such transactions; provided, however,
this Agreement may be modified only in accordance with the terms hereof.

Section 8.18                                Additional Phases.  Owner and Developer
agree that in the event that it is determined by Owner that additional phases
of fractional units will be developed, that a developer is needed in connection
with the same, and that Owner desires that Developer provide such services,
then provided that Developer is not then in default under this Agreement, the
development of the additional fractional units shall be governed by the terms
of this Agreement and Developer shall prepare and have approved by Owner a
Final Development Plan, Final Development Budget and a Final Development
Schedule for each new phase of fractional unit development.

Section 8.19                                Exhibits.  All exhibits referred to herein shall be
considered a part of this Agreement as fully as if and with the same force and
effect as if such exhibit had been included herein in full.

Section 8.20                                Limitation of Liability.  Any liability of Owner to Developer (or any
person or entity claiming by, through or under Developer) for any default by
Owner under this Agreement or any matter relating to this Agreement shall be
limited to Developer’s actual direct, but not consequential, damages
therefore.  Owner’s liability under this
Agreement is limited to Owner’s interest in the Project, and if Owner is
comprised of more than one entity, the liability of each entity comprising
Owner shall be several only (not joint) based upon such entity’s proportionate
share of ownership in the Project.

Section 8.21                                Confidentiality.  Developer will keep confidential (a) the
terms of this Agreement, and (b) all written and verbal negotiations and
communications with Owner in connection with this Agreement (collectively, “Confidential Information”), and
Developer will not disclose or make available any Confidential Information to
any other person or entity, except to Developer’s accountants, brokers,
attorneys, and other agents for the purpose of providing advice to Developer in
connection with the Confidential Information and who agree to preserve the
confidential nature of the Confidential Information.

Section 8.22                                Authority of Developer.  Developer shall have no right or authority,
express or implied, to commit or otherwise obligate Owner in any manner
whatsoever except to the extent specifically provided herein or specifically
authorized in writing by Owner.

Section 8.23                                Licenses.  Developer represents and warrants that (a) it
has all the 

 23
 

requisite licenses and other approvals required by law
to carry out its duties hereunder; or (b) it will affect the services requiring
such licenses through duly licensed agents and subcontractors who are
affiliates of Developer that have all requisite licenses and authority to carry
out such services.  Developer shall, at
its own expense, qualify to do business and obtain and maintain such licenses
as may be required for the performance by Developer of its services.

Section 8.24                                Non-Discrimination Policy.  Developer agrees that it will not deny the
benefits of this Agreement to any person, nor discriminate against any employee
or applicant for employment because of race, color, religion, sex, national
origin, age or any other applicable protected classification.  Developer will take affirmative action to
insure that the evaluation and treatment of employees ate free from such
discrimination.  Developer, unless
exempt, further agrees to abide by the terms of all applicable Federal, state
and local non-discrimination provisions, including but not limited to 41 CFR
Sec. 60-1.4, such non-discrimination provisions being incorporated herein by
reference.  Developer shall include this
non-discrimination clause in all contracts and subcontracts to perform work
under this Agreement and will notify all labor organizations with which it has
a collective bargaining agreements of the obligations hereunder.

Section 8.25                                Waiver of Jury Trial.  Developer and Owner each hereby waives trial
by jury in any action arising out of matters related to this Agreement, which
waiver is informed and voluntary.

Section 8.26                                Transfer.  Owner and Developer hereby acknowledge that
Owner anticipates conveying the Project Land to Behringer Harvard Residences at
Cordillera, LLC as soon as reasonably possible after the Project Land
is subdivided from the Land.  In connection with that conveyance, Owner
and Developer agree that this Agreement shall be assigned to Behringer Harvard
Residences at Cordillera, LLC and Owner and Developer agree that they will
execute all reasonable documents necessary to effect such assignment.

Section 8.27                                Dispute Resolution. 
The parties hereto have agreed to submit disputes to mandatory arbitration
in accordance with the provisions of this Section 8.26.  Each party waives the right to commence an
action in connection with this Agreement in any court and expressly agrees to
be bound by the decision of the arbitrator determined in this Section 8.26;
provided, however, the waiver in this Section 8.26 will not prevent the other
party from commencing an action in any court for the sole purposes of enforcing
the obligation of the other party to submit to binding arbitration or the
enforcement of an award granted by arbitration herein.  Notwithstanding the foregoing, prior to
submitting any dispute hereunder to arbitration, each party shall first attempt
in good faith, for thirty (30) days after the first notice given under this
Agreement regarding such dispute, to resolve any such dispute promptly by
negotiation between executives of each party who have authority to settle the
dispute, which shall include an in-person meeting between such executives in
Dallas, Texas.

(a)                                  Any
dispute between the parties as to the interpretation of any provision of this
Agreement or the rights and obligations of any party hereunder shall be
resolved through binding arbitration as hereinafter provided in Denver,
Colorado.

(b)                                 If
arbitration is required to resolve a dispute between the parties, a panel of
three (3) arbitrators shall be convened. 
Each party hereto shall each select one (1) 

 24
 

arbitrator with at least
five (5) years experience in commercial real estate in general and hotel
operation in particular, and those two (2) arbitrators shall by agreement
select a third arbitrator having recognized expertise and at least five (5)
years experience in commercial real estate in general and hotel operation in
particular.

(c)                                  The
arbitrators selected pursuant to Section 8.26(b) above will establish the rules
for proceeding with the arbitration of the dispute, which will be binding upon
all parties to the arbitration proceeding. The arbitrators may use the rules of
the American Arbitration Association for commercial arbitration but are
encouraged to adopt the rules the arbitrators deem appropriate to accomplish
the arbitration in the quickest and least expensive manner possible.
Accordingly, the arbitrators may (i) dispense with any formal rules of
evidence and allow hearsay testimony so as to limit the number of witnesses
required, (ii) minimize discovery procedures as the arbitrators deem
appropriate, (iii) limit the time for presentation of any party’s case as
well as the amount of information or number of witnesses to be presented in
connection with any hearing, and (iv) impose any other rules which the
arbitrators believe appropriate to effect a resolution of the dispute as
quickly and inexpensively as possible. In any event, the arbitrators (A) shall
permit each side no more than two (2) depositions (including any deposition of
experts), which depositions may not exceed four (4) hours each, one set of 10
interrogatories (inclusive of sub-parts) and one set of five (5) document
requests (inclusive of sub-parts); (B) shall not permit any requests for
admissions; (C) shall limit the hearing, if any, to two (2) days; and (D) shall
render their decision within sixty (60) days of the filing of the arbitration.

(d)                                 The
arbitrators will have the exclusive authority to determine and award costs of
arbitration and the costs incurred by any party for its attorneys, advisors and
consultants.

(e)                                  Any
award made by the arbitrators shall be binding on the parties and all parties
to the arbitration and shall be enforceable to the fullest extent of the law.

(f)                                    In
reaching any determination or award, the arbitrators will apply the laws of the
state of Texas. Except as permitted under Section 8.26(d) above, the
arbitrators’ award will be limited to actual damages and will not include
consequential, special, punitive or exemplary damages. Nothing. contained in
this Agreement will be deemed to give the arbitrators any authority, power or
right to alter, change, amend, modify, add to or subtract from any of the
provisions of this Agreement. All privileges under state and federal law,
including, without limitation, attorney-client, work product and party
communication privileges, shall be preserved and protected. All experts engaged
by a party must be disclosed to the other party within fourteen (14) days after
the date of notice and demand for arbitration is given.

(g)                                 Notwithstanding
any provision of this Agreement to the contrary, any party may seek injunctive
relief or other form of ancillary relief at any time from any court of
competent jurisdiction in Denver, Colorado. In the event that a dispute or
controversy requires emergency relief before the matter may be resolved under
the arbitration procedures of this Section 8.26, notwithstanding the fact that
any court of 

 25
 

competent jurisdiction
may enter an order providing for injunctive or other form of ancillary relief,
the parties expressly agree that such arbitration procedures will still govern
the ultimate resolution of that portion of the dispute or controversy not
resolved pursuant to said court order.

[Signature Page Follows]

 26

Executed effective
as of the date written above.

	
  

  	
  OWNER:

  
	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD
  CORDILLERA,LLC,

  
	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald J. Reihsen,
  III

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice
  President

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  15601 Dallas Parkway,
  Suite 600

  
	
   

  	
   

  	
  Addison, Texas 75001

  
					

 

	
  

  	
  DEVELOPER:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  TP CORDILLERA LLC,

  
	
   

  	
  a Delaware limited liability company

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jefford S. Nelsen

  	
   

  
	
   

  	
   

  	
  Jefford S. Nelsen

  
	
   

  	
   

  	
  Member

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  	
  560
  Townsend St., 7th Floor

  
	
   

  	
   

  	
  San Francisco,
  California 94107

  
					

 

EXHIBIT A

LEGAL DESCRIPTION

Legal Description of Lodge and Spa Real Property

LOT 1, ACCORDING TO THE “AMENDED FINAL PLAT, LOT 36, CORDILLERA
SUBDIVISION, FILING NO. 1 & NO. 2; LOT 1, FILING NO. 1, CORDILLERA
SUBDIVISION, FILING NO. 1 & NO. 2; AND TRACT X, CORDILLERA SUBDIVISION
FILING NO. 3”, RECORDED JANUARY 14, 2003 AT RECEPTION NO. 820221, COUNTY OF
EAGLE, STATE OF COLORADO.

Legal Description of Village
Center Real Property

TRACT X,
“AMENDED FINAL PLAT, LOT 36, CORDILLERA SUBDIVISION, FILING NO. 1 & NO. 2;
LOT 1, FILING NO. 1, CORDILLERA SUBDIVISION, FILING NO. 1 & NO 2; AND TRACT
X, CORDILLERA SUBDIVISION, FILING NO. 3”, RECORDED JANUARY 14, 2003 AT
RECEPTION NO. 820221, COUNTY OF EAGLE, STATE OF COLORADO.

TOGETHER
WITH EASEMENTS AND BENEFITS AS DESCRIBED IN AMENDED AND RESTATED DECLARATION OF
PROTECTIVE COVENANTS RECORDED MAY 12, 1993 IN BOOK 608 AT PAGE 785 AND SECOND
AMENDMENT THERETO RECORDED MAY 11, 1998 AT RECEPTION NO. 655728, AFFIDAVIT OF
CLARIFICATION RECORDED MAY 10, 1995 IN BOOK 663 AT PAGE 72, COUNTY OF EAGLE,
STATE OF COLORADO.

TOGETHER
WITH NONEXCLUSIVE INGRESS AND EGRESS EASEMENTS RESERVED PURSUANT TO THE
QUITCLAIM DEEDS RECORDED APRIL 21, 2003 AT RECEPTION NO. 830524, 830525,
830526, 830527, 830528, 830529 AND 830530, COUNTY OF EAGLE, STATE OF COLORADO.

 A-1
 

Legal Description of Cordillera
Mountain Club

CONDOMINIUM
UNIT 333-C, THE STRAWBERRY PARK CONDOMINIUMS, IN ACCORDANCE WITH AND SUBJECT TO
THE DECLARATION OF COVENANTS, CONDITIONS AND RESTRICTIONS OF THE STRAWBERRY
PARK CONDOMINIUMS, RECORDED APRIL 3, 1989, IN BOOK 503 AT PAGE 354, AND
AMENDMENT THERETO RECORDED APRIL 12, 1991 IN BOOK 551 AT PAGE 656, AND SECOND
AMENDMENT THERETO RECORDED JUNE 4, 1992 IN BOOK 581 AT PAGE 544, AND RECORDED
SEPTEMBER 25, 1992 IN BOOK 590 AT PAGE 185 AND MAP RECORDED ON APRIL 3, 1989 IN
BOOK 503 AT PAGE 353.

FIRST
STATEMENT OF INTENTION TO ANNEX ADDITIONAL CONDOMINIUM UNITS AND COMMON
ELEMENTS AND SUPPLEMENT TO DECLARATION OF COVENANTS, CONDITIONS AND
RESTRICTIONS OF STRAWBERRY PARK CONDOMINIUMS, RECORDED ON MAY 30, 1989 IN BOOK
507 AT PAGE 220, AND FIRST AMENDMENT THERETO RECORDED MAY 16, 1991 IN BOOK 554
AT PAGE 86, AND THE SUPPLEMENTAL CONDOMINIUM MAP RECORDED MAY 30, 1989 IN BOOK
507 AT PAGE 219, AND SECOND AMENDMENT THERETO RECORDED AUGUST 4, 1992 IN BOOK
586 AT PAGE 212, COUNTY OF EAGLE, STATE OF COLORADO.

TOGETHER WITH PARKING SPACE NOS.
67 AND 68 AS DEPICTED AND DESCRIBED ON THE MAPS REFERENCED ABOVE, WHICH PARKING
SPACES SHALL BE LIMITED COMMON ELEMENTS APPURTENANT TO CONDOMINIUM UNIT NO.
333-C, THE STRAWBERRY PARK CONDOMINIUMS.

TOGETHER WITH BENEFITS AS CREATED
BY THE BEAVER CREEK DECLARATION RECORDED DECEMBER 27, 1979 IN BOOK 296 AT PAGE
446 AND ANY AND ALL AMENDMENTS THERETO AND TOGETHER WITH BENEFITS AS CREATED BY
THE STRAWBERRY PARK CONDOMINIUM DECLARATION RECORDED APRIL 3, 1989 IN BOOK 503
AT PAGE 354 AND ANY AND ALL SUPPLEMENTS AND AMENDMENTS THERETO

Legal Description of Grouse on
the Green Real Property

TRACT F, CORDILLERA SUBDIVISION,
FILING NO. 16, ACCORDING TO THE CORRECTION PLAT RECORDED NOVEMBER 21, 1994 IN
BOOK 655 AT PAGE 562, COUNTY OF EAGLE, STATE OF COLORADO.

 A-2

EXHIBIT B

CONCEPTUAL DEVELOPMENT PLAN

Cordillera Lodge Residences

Exhibit B

CONCEPTUAL DEVELOPMENT PLAN

Project Summary

	
  Site and Building

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land Acreage

  	
   

  	
  3.00

  	
   

  	
   

  	
   

  
	
  Building SF

  	
   

  	
  63,722

  	
   

  	
   

  	
   

  
	
  Saleable SF

  	
   

  	
  35,321

  	
   

  	
   

  	
   

  
	
  Total Units

  	
   

  	
  19

  	
   

  	
   

  	
   

  
	
  Total Keys

  	
   

  	
  38

  	
   

  	
   

  	
   

  
	
  Average Unit SF

  	
   

  	
  1,857

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Construction and
  Development Costs

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land Cost

  	
   

  	
  $

  	
  9,550,000

  	
   

  	
   

  	
   

  
	
  Hard Construction Costs

  	
   

  	
  17,768,305

  	
   

  	
   

  	
   

  
	
  FF&E 

  	
   

  	
  2,280,000

  	
   

  	
   

  	
   

  
	
  Soft Costs

  	
   

  	
  5,346,600

  	
   

  	
   

  	
   

  
	
  Total
  Construction/Development Costs

  	
   

  	
  $

  	
  34,944,905

  	
   

  	
   

  	
   

  
	
  Less Marketing Costs
  Paid from Sales Financing Costs

  	
   

  	
  2,719,464

  	
   

  	
   

  	
   

  
	
  Total Project Costs

  	
   

  	
  $

  	
  37,664,369

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Cash Flow

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Unleveraged Project
  Cash Flow

  	
   

  	
  $

  	
  13,745,635

  	
   

  	
   

  	
   

  
	
  Leveraged Project Cash Flow

  	
   

  	
  $

  	
  11,026,171

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Capitalization

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equity

  	
   

  	
  $

  	
  6,300,000

  	
   

  	
  25

  	
  %

  
	
  Mezzanine Debt
  Construction Debt

  	
   

  	
  $

  	
  19,012,321

  	
   

  	
  75

  	
  %

  
	
   

  	
   

  	
  25,312,321

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sales

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Avg Sales Price
  per SF

  	
   

  	
  $

  	
  1,600

  	
   

  	
   

  	
   

  
	
  Avg Sales Price
  per Unit

  	
   

  	
  $

  	
  2,971,200

  	
   

  	
   

  	
   

  
	
  Fraction Share

  	
   

  	
  1/8

  	
   

  	
   

  	
   

  
	
  Total Fractions

  	
   

  	
  152

  	
   

  	
   

  	
   

  
	
  Avg Sales Price
  per Fraction

  	
   

  	
  $

  	
  371,400

  	
   

  	
   

  	
   

  
	
  Weeks per
  Fraction

  	
   

  	
  6.5

  	
   

  	
   

  	
   

  
	
  Avg Sales Price
  per Week

  	
   

  	
  $

  	
  57,138

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total Sales
  Revenues

  	
   

  	
  $

  	
  56,452,800

  	
   

  	
   

  	
   

  
	
  Cost of Sales

  	
   

  	
  7,762,260

  	
   

  	
   

  	
   

  
	
  Net Sales

  	
   

  	
  $

  	
  48,690,540

  	
   

  	
   

  	
   

  

 

 B-1

EXHIBIT C

CONCEPTUAL DEVELOPMENT BUDGET

Cordillera Lodge Residences

Construction Cost

	
   

  	
   

  	
   

  	
   

  	
  $/GSF @

  	
   

  	
  $/SSF @

  	
   

  	
  $/Unit @

  	
   

  	
  Proposed

  	
   

  	
  Development

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  63,722 SF

  	
   

  	
  35,321 SF

  	
   

  	
  19 Units

  	
   

  	
  Budget

  	
   

  	
  Fee Costs

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land
  Cost

  	
   

  	
   

  	
   

  	
  149.87

  	
   

  	
  270.38

  	
   

  	
  502,632

  	
   

  	
  9,550,000

  	
   

  	
  250,000

  	
   

  
	
  Land Cost

  	
   

  	
  Land Value Input

  	
   

  	
  141.24

  	
   

  	
  254.81

  	
   

  	
  473,684

  	
   

  	
  9,000,000

  	
   

  	
   

  	
   

  
	
  Land Due  Diligence Costs

  	
   

  	
  Market, Utility, H2O, HVAC Study

  	
   

  	
  0.78

  	
   

  	
  1.42

  	
   

  	
  2,632

  	
   

  	
  50,000

  	
   

  	
  50,000

  	
   

  
	
  Land Closing
  Costs

  	
   

  	
  Legal

  	
   

  	
  0.78

  	
   

  	
  1.42

  	
   

  	
  2,632

  	
   

  	
  50,000

  	
   

  	
  50,000

  	
   

  
	
  Onsite Improvements

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Offsite
  Improvements

  	
   

  	
  Contingency for Offsites

  	
   

  	
  0.78

  	
   

  	
  1.42

  	
   

  	
  2,632

  	
   

  	
  50,000

  	
   

  	
  50,000

  	
   

  
	
  Site Demolition

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Entitlement Costs

  	
   

  	
  Planning, DRE Submittal, Misc

  	
   

  	
  1.57

  	
   

  	
  2.83

  	
   

  	
  5,263

  	
   

  	
  100,000

  	
   

  	
  100,000

  	
   

  
	
  BH Asset
  Management Fee

  	
   

  	
   

  	
   

  	
  4.71

  	
   

  	
  8.49

  	
   

  	
  15,789

  	
   

  	
  300,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Construction
  (Hard) Costs

  	
   

  	
   

  	
   

  	
  278.84

  	
   

  	
  503.05

  	
   

  	
  935,174

  	
   

  	
  17,768,305

  	
   

  	
  17,768,305

  	
   

  
	
  Building Cost

  	
   

  	
  Conceptual Estimate

  	
   

  	
  208.64

  	
   

  	
  376.40

  	
   

  	
  699,726

  	
   

  	
  13,294,800

  	
   

  	
  13,294,800

  	
   

  
	
  Parking

  	
   

  	
  Conceptual Estimate

  	
   

  	
  21.69

  	
   

  	
  39.13

  	
   

  	
  72,742

  	
   

  	
  1,382,105

  	
   

  	
  1,382,105

  	
   

  
	
  Site Costs

  	
   

  	
   

  	
   

  	
  23.54

  	
   

  	
  42.47

  	
   

  	
  78,947

  	
   

  	
  1,500,000

  	
   

  	
  1,500,000

  	
   

  
	
  General
  Conditions

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Governmental
  & Utility Fees

  	
   

  	
  Estimate

  	
   

  	
  5.42

  	
   

  	
  9.78

  	
   

  	
  18,173

  	
   

  	
  345,290

  	
   

  	
  345,290

  	
   

  
	
  Construction Cost
  Contingency

  	
   

  	
  5.0% Construction cost contingency

  	
   

  	
  13.28

  	
   

  	
  23.95

  	
   

  	
  44,532

  	
   

  	
  846,110

  	
   

  	
  846,110

  	
   

  
	
  Covered Walkway
  Allowance

  	
   

  	
   

  	
   

  	
  6.28

  	
   

  	
  11.32

  	
   

  	
  21,053

  	
   

  	
  400,000

  	
   

  	
  400,000

  	
   

  
	
  Contractor Fee /
  Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FF&E

  	
   

  	
  Unit Interior Furnishings

  	
   

  	
  35.78

  	
   

  	
  64.55

  	
   

  	
  120,000

  	
   

  	
  2,280,000

  	
   

  	
  2,280,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Soft
  Costs

  	
   

  	
   

  	
   

  	
  83.91

  	
   

  	
  151.37

  	
   

  	
  281,400

  	
   

  	
  5,346,600

  	
   

  	
  2,458,243

  	
   

  
	
  Architectural/Consultants

  	
   

  	
  Estimate

  	
   

  	
  13.94

  	
   

  	
  25.15

  	
   

  	
  46,759

  	
   

  	
  888,415

  	
   

  	
  888,415

  	
   

  
	
  Civil Engineer

  	
   

  	
  Estimate

  	
   

  	
  0.39

  	
   

  	
  0.71

  	
   

  	
  1,316

  	
   

  	
  25,000

  	
   

  	
  25,000

  	
   

  
	
  Legal

  	
   

  	
  Estimate

  	
   

  	
  0.39

  	
   

  	
  0.71

  	
   

  	
  1,316

  	
   

  	
  25,000

  	
   

  	
  25,000

  	
   

  
	
  Marketing - Fixed
  Component

  	
   

  	
  Estimate

  	
   

  	
  23.54

  	
   

  	
  42.47

  	
   

  	
  78,947

  	
   

  	
  1,500,000

  	
   

  	
   

  	
   

  
	
  Land Title
  Insurance

  	
   

  	
  Upgrade over land premium: $0.7/1000

  	
   

  	
  0.36

  	
   

  	
  0.65

  	
   

  	
  1,203

  	
   

  	
  22,849

  	
   

  	
  22,849

  	
   

  
	
  Real Estate Taxes

  	
   

  	
  $.12/$100 of Land
  during precon & 55% land+hard costs during const.

  	
   

  	
  0.37

  	
   

  	
  0.66

  	
   

  	
  1,233

  	
   

  	
  23,430

  	
   

  	
  23,430

  	
   

  
	
  Owner’s Budget
  Contingency

  	
   

  	
  3.00% of  land
  + hand costs

  	
   

  	
  12.86

  	
   

  	
  23.20

  	
   

  	
  43,134

  	
   

  	
  819,549

  	
   

  	
  819,549

  	
   

  
	
  Development Fee

  	
   

  	
  3.00% of total development costs less Financing,
  Sales & Marketing

  	
   

  	
  7.50

  	
   

  	
  13.53

  	
   

  	
  25,152

  	
   

  	
  477,888

  	
   

  	
   

  	
   

  
	
  Unit Sales Title &
  Escrow

  	
   

  	
  $2,000 Per Unit

  	
   

  	
  0.60

  	
   

  	
  1.08

  	
   

  	
  2,000

  	
   

  	
  38,000

  	
   

  	
  38,000

  	
   

  
	
  Warranty Reserve

  	
   

  	
  $2,000
  Per Unit

  	
   

  	
  0.60

  	
   

  	
  1.08

  	
   

  	
  2,000

  	
   

  	
  38,000

  	
   

  	
  38,000

  	
   

  
	
  Insurance

  	
   

  	
  Estimate

  	
   

  	
  0.55

  	
   

  	
  0.99

  	
   

  	
  1,842

  	
   

  	
  35,000

  	
   

  	
  35,000

  	
   

  
	
  Testing

  	
   

  	
  Lump Sum Estimate

  	
   

  	
  1.57

  	
   

  	
  2.83

  	
   

  	
  5,263

  	
   

  	
  100,000

  	
   

  	
  100,000

  	
   

  
	
  Deferred
  Development Fee

  	
   

  	
  Lump Sum

  	
   

  	
  3.21

  	
   

  	
  5.80

  	
   

  	
  10,779

  	
   

  	
  204,809

  	
   

  	
   

  	
   

  
	
  Blueprints/Messenger/Misc.

  	
   

  	
  Lump Sum

  	
   

  	
  0.39

  	
   

  	
  0.71

  	
   

  	
  1,316

  	
   

  	
  25,000

  	
   

  	
  25,000

  	
   

  
	
  Warranty
  Insurance

  	
   

  	
  $22,000 per Unit
  Estimate

  	
   

  	
  6.56

  	
   

  	
  11.83

  	
   

  	
  22,000

  	
   

  	
  418,000

  	
   

  	
  418,000

  	
   

  
	
  Marketing - Draw
  Against Fee

  	
   

  	
  Monthly minimum
  draw for 39 mos @ $18,094

  	
   

  	
  11.07

  	
   

  	
  19.98

  	
   

  	
  37,140

  	
   

  	
  705,660

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total
  Construction Costs

  	
   

  	
   

  	
   

  	
  548.40

  	
   

  	
  989.35

  	
   

  	
  1,839,206

  	
   

  	
  34,944,905

  	
   

  	
  22,756,548

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financing
  Costs

  	
   

  	
   

  	
   

  	
  44.90

  	
   

  	
  81.00

  	
   

  	
  150,586

  	
   

  	
  2,861,128

  	
   

  	
   

  	
   

  
	
  Construction Loan
  Interest

  	
   

  	
   

  	
   

  	
  31.25

  	
   

  	
  56.37

  	
   

  	
  104,796

  	
   

  	
  1,991,128

  	
   

  	
   

  	
   

  
	
  Debt and Equity
  Financing Fees

  	
   

  	
   

  	
   

  	
  13.65

  	
   

  	
  24.63

  	
   

  	
  45,789

  	
   

  	
  870,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total
  Project Costs

  	
   

  	
   

  	
   

  	
  593.30

  	
   

  	
  1,070.36

  	
   

  	
  1,989,791

  	
   

  	
  37,806,033

  	
   

  	
   

  	
   

  

 

 C-1

EXHIBIT D

CONCEPTUAL PROJECT SCHEDULE

CORDILLERA

	
   

  	
   

  	
  Months

  
	
   

  	
   

  	
  1

  JUNE

  	
  2

  JULY

  	
  3

  AUG

  	
  4

  SEPT

  	
  5

  OCT

  	
  6

  NOV

  	
  7

  DEC

  	
  8

  JAN

  	
  9

  FEB

  	
  10

  MAR

  	
  11

  APR

  	
  12

  MAY

  	
  13

  JUNE

  	
  14

  JULY

  	
  15

  AUG

  	
  16

  SEPT

  	
  17

  OCT

  	
  18

  NOV

  	
  19

  DEC

  	
  20

  JAN

  	
  21

  FEB

  	
  22

  MAR

  	
  23

  APR

  	
  24

  MAY

  	
  25

  JUNE

  	
  26

  JULY

  	
  27

  AUG

  	
  28

  SEPT

  	
  29

  OCT

  	
  30

  NOV

  	
  31

  DEC

  
	
  1

  	
  Phase 1A
  - 19 Units

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2

  	
  Development

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3

  	
  Design

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4

  	
  Conceptual/Schematic

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5

  	
  Const Drwgs/Permits

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6

  	
  Construction

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7

  	
  Sales

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8

  	
  DRE Submittal

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  DRE Approval

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9

  	
  Setup

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10

  	
  Sales

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  12

  	
  Phase 1B
  - Lodge Renovations

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  13

  	
  Development

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  14

  	
  Design

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  15

  	
  Conceptual/Schematic

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  16

  	
  Const Drwgs/Permits

  	
   

  	
   

  	
   

  	
  Design Build 4
  Pipe, Boiler, Roof

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  17

  	
  Construction

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  18

  	
  4 Pipe system

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Summer-Central
  Plant, Fall - Rooms

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19

  	
  Roof

  	
   

  	
  Repair

  	
   

  	
   

  	
  Renovate

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  19

  	
  Boilers

  	
   

  	
  Redundancy

  	
   

  	
   

  	
  Replacement

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  20

  	
  Balconies

  	
   

  	
  Weather Dependent

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  21

  	
  Misc Interior

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 D-1

EXHIBIT E

DEFINITION OF DESIGNATED
CONSTRUCTION COSTS

As used in this
Agreement, the term “Designated Construction
Costs” means the amounts identified as such on Exhibit E-1 attached hereto, to the
extent that such costs are included in the Final Development Budget and
actually spent. Acquisition costs of the Land, ad valorem and other taxes, the
costs of insurance premiums, and debt service shall in all events be excluded
from Designated Construction Costs.

Cordillera Lodge Residences

	
   

  	
   

  	
  EXHIBIT E-1

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Construction Cost

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Designated

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  $/GSF @

  	
   

  	
  $/SSF @

  	
   

  	
  $/Unit @

  	
   

  	
  Proposed

  	
   

  	
  Construction

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  63,722 SF

  	
   

  	
  35,321 SF

  	
   

  	
  19 Units

  	
   

  	
  Budget

  	
   

  	
  Costs

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Land
  Cost

  	
   

  	
   

  	
   

  	
  149.87

  	
   

  	
  270.38

  	
   

  	
  502,632

  	
   

  	
  9,550,000

  	
   

  	
  250,000

  	
   

  
	
  Land Cost

  	
   

  	
  Land Value Input

  	
   

  	
  141.24

  	
   

  	
  254.81

  	
   

  	
  473,684

  	
   

  	
  9,000,000

  	
   

  	
   

  	
   

  
	
  Land Due  Diligence Costs

  	
   

  	
  Market, Utility, H2O, HVAC Study

  	
   

  	
  0.78

  	
   

  	
  1.42

  	
   

  	
  2,632

  	
   

  	
  50,000

  	
   

  	
  50,000

  	
   

  
	
  Land Closing
  Costs

  	
   

  	
  Legal

  	
   

  	
  0.78

  	
   

  	
  1.42

  	
   

  	
  2,632

  	
   

  	
  50,000

  	
   

  	
  50,000

  	
   

  
	
  Onsite
  Improvements

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Offsite
  Improvements

  	
   

  	
  Contingency for Offsites

  	
   

  	
  0.78

  	
   

  	
  1.42

  	
   

  	
  2,632

  	
   

  	
  50,000

  	
   

  	
  50,000

  	
   

  
	
  Site Demolition

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Entitlement Costs

  	
   

  	
  Planning, DRE Submittal, Misc

  	
   

  	
  1.57

  	
   

  	
  2.83

  	
   

  	
  5,263

  	
   

  	
  100,000

  	
   

  	
  100,000

  	
   

  
	
  BH Asset
  Management Fee

  	
   

  	
   

  	
   

  	
  4.71

  	
   

  	
  8.49

  	
   

  	
  15,789

  	
   

  	
  300,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Construction
  (Hard) Costs

  	
   

  	
   

  	
   

  	
  278.84

  	
   

  	
  503.05

  	
   

  	
  935,174

  	
   

  	
  17,768,305

  	
   

  	
  17,768,305

  	
   

  
	
  Building Cost

  	
   

  	
  Conceptual Estimate

  	
   

  	
  208.64

  	
   

  	
  376.40

  	
   

  	
  699,729

  	
   

  	
  13,294,800

  	
   

  	
  13,294,800

  	
   

  
	
  Parking

  	
   

  	
  Conceptual Estimate

  	
   

  	
  21.69

  	
   

  	
  39.13

  	
   

  	
  72,742

  	
   

  	
  1,382,105

  	
   

  	
  1,382,105

  	
   

  
	
  Site Costs

  	
   

  	
   

  	
   

  	
  23.54

  	
   

  	
  42.47

  	
   

  	
  78,947

  	
   

  	
  1,500,000

  	
   

  	
  1,500,000

  	
   

  
	
  General
  Conditions

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Governmental
  & Utility Fees

  	
   

  	
  Estimate

  	
   

  	
  5.42

  	
   

  	
  9.78

  	
   

  	
  18,173

  	
   

  	
  345,290

  	
   

  	
  345,290

  	
   

  
	
  Construction cost
  Contingency

  	
   

  	
  5.0% Construction cost contingency

  	
   

  	
  13.28

  	
   

  	
  23.95

  	
   

  	
  44,532

  	
   

  	
  846,110

  	
   

  	
  846,110

  	
   

  
	
  Covered Walkway
  Allowance

  	
   

  	
   

  	
   

  	
  6.28

  	
   

  	
  11.32

  	
   

  	
  21,053

  	
   

  	
  400,000

  	
   

  	
  400,000

  	
   

  
	
  Contractor Fee /
  Bond

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FF&E

  	
   

  	
  Unit Interior Furnishings

  	
   

  	
  35.78

  	
   

  	
  64.55

  	
   

  	
  120,000

  	
   

  	
  2,280,000

  	
   

  	
  2,280,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Soft
  Costs

  	
   

  	
   

  	
   

  	
  83.91

  	
   

  	
  151.37

  	
   

  	
  281,400

  	
   

  	
  5,346,600

  	
   

  	
  2,458,243

  	
   

  
	
  Architectural/Consultants

  	
   

  	
  Estimate

  	
   

  	
  13.94

  	
   

  	
  25.15

  	
   

  	
  46,759

  	
   

  	
  888,415

  	
   

  	
  888,415

  	
   

  
	
  Civil Engineer

  	
   

  	
  Estimate

  	
   

  	
  0.39

  	
   

  	
  0.71

  	
   

  	
  1,316

  	
   

  	
  25,000

  	
   

  	
  25,000

  	
   

  
	
  Legal

  	
   

  	
  Estimate

  	
   

  	
  0.39

  	
   

  	
  0.71

  	
   

  	
  1,316

  	
   

  	
  25,000

  	
   

  	
  25,000

  	
   

  
	
  Marketing - Fixed
  Component

  	
   

  	
  Estimate

  	
   

  	
  23.54

  	
   

  	
  42.47

  	
   

  	
  78,947

  	
   

  	
  1,500,000

  	
   

  	
   

  	
   

  
	
  Land Title
  Insurance

  	
   

  	
  Upgrade over land premium: $0.7/1000

  	
   

  	
  0.36

  	
   

  	
  0.65

  	
   

  	
  1,203

  	
   

  	
  22,849

  	
   

  	
  22,849

  	
   

  
	
  Real Estate Taxes

  	
   

  	
  $.12/$100 of Land
  during precon & 55% land+hard costs during const.

  	
   

  	
  0.37

  	
   

  	
  0.66

  	
   

  	
  1,233

  	
   

  	
  23,430

  	
   

  	
  23,430

  	
   

  
	
  Owner’s Budget
  Contingency

  	
   

  	
  3.00% of land + hard costs

  	
   

  	
  12.86

  	
   

  	
  23.20

  	
   

  	
  43,134

  	
   

  	
  819,549

  	
   

  	
  819,549

  	
   

  
	
  Development Fee

  	
   

  	
  3.00% of total development
  costs less Financing, Sales & Marketing

  	
   

  	
  7.50

  	
   

  	
  13.53

  	
   

  	
  25,152

  	
   

  	
  477,888

  	
   

  	
   

  	
   

  
	
  Unit Sales Title &
  Escrow

  	
   

  	
  $2,000 Per Unit

  	
   

  	
  0.60

  	
   

  	
  1.08

  	
   

  	
  2,000

  	
   

  	
  38,000

  	
   

  	
  38,000

  	
   

  
	
  Warranty Reserve

  	
   

  	
  $2,000
  Per Unit

  	
   

  	
  0.60

  	
   

  	
  1.08

  	
   

  	
  2,000

  	
   

  	
  38,000

  	
   

  	
  38,000

  	
   

  
	
  Insurance

  	
   

  	
  Estimate

  	
   

  	
  0.55

  	
   

  	
  0.99

  	
   

  	
  1,842

  	
   

  	
  35,000

  	
   

  	
  35,000

  	
   

  
	
  Testing

  	
   

  	
  Lump Sum Estimate

  	
   

  	
  1.57

  	
   

  	
  2.83

  	
   

  	
  5,263

  	
   

  	
  100,000

  	
   

  	
  100,000

  	
   

  
	
  Deferred
  Development Fee

  	
   

  	
  Lump Sum

  	
   

  	
  3.21

  	
   

  	
  5.80

  	
   

  	
  10,779

  	
   

  	
  204,809

  	
   

  	
   

  	
   

  
	
  Blueprints/Messenger/Misc.

  	
   

  	
  Lump Sum

  	
   

  	
  0.39

  	
   

  	
  0.71

  	
   

  	
  1,316

  	
   

  	
  25,000

  	
   

  	
  25,000

  	
   

  
	
  Warranty
  Insurance

  	
   

  	
  $22,000 per Unit
  Estimate

  	
   

  	
  6.56

  	
   

  	
  11.83

  	
   

  	
  22,000

  	
   

  	
  418,000

  	
   

  	
  418,000

  	
   

  
	
  Marketing - Draw
  Against Fee

  	
   

  	
   

  	
   

  	
  11.07

  	
   

  	
  19.98

  	
   

  	
  37,140

  	
   

  	
  705,660

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total
  Construction Costs

  	
   

  	
   

  	
   

  	
  548.40

  	
   

  	
  989.35

  	
   

  	
  1,839,206

  	
   

  	
  34,944,905

  	
   

  	
  22,756,548

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Financing
  Costs

  	
   

  	
   

  	
   

  	
  44.90

  	
   

  	
  81.00

  	
   

  	
  150,586

  	
   

  	
  2,861,128

  	
   

  	
   

  	
   

  
	
  Construction Loan
  Interest

  	
   

  	
   

  	
   

  	
  31.25

  	
   

  	
  56.37

  	
   

  	
  104,796

  	
   

  	
  1,991,128

  	
   

  	
   

  	
   

  
	
  Debt and Equity
  Financing Fees

  	
   

  	
   

  	
   

  	
  13.65

  	
   

  	
  24.63

  	
   

  	
  45,789

  	
   

  	
  870,000

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total
  Project Costs

  	
   

  	
   

  	
   

  	
  593.30

  	
   

  	
  1,070.36

  	
   

  	
  1,989,791

  	
   

  	
  37,806,033

  	
   

  	
   

  	
   

  

 

 E-1

EXHIBIT F

SCHEDULE FOR PAYMENT OF
DEVELOPMENT FEE

Seventy percent (70%) of the Development Fee
shall be funded in accordance with the following schedule.

Cordillera
Lodge Residences

Exhibit
F

Schedule
for Payment of Development Fee

 

	
  70% of Fee

  	
  /   Schedule  
  =

  	
  Monthly

  
	
  $    477,888

  	
  /
       19 mos

  	
  $      25,152

  

 

	
  June-07

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  July-07

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  August-07

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  September-07

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  October-07

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  November-07

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  December-07

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  January-08

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  February-08

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  March-08

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  April-08

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  May-08

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  June-08

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  July-08

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  August-08

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  September-08

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  October-08

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  November-08

  	
   

  	
  $

  	
  25,152

  	
   

  
	
  December-08

  	
   

  	
  $

  	
  25,152

  	
   

  
	
   

  	
   

  	
  $

  	
  477,888

  	
   

  

 

 F-1

EXHIBIT G

REDUCTION IN DEVELOPMENT FEE

1.                                       Owner
and Developer have agreed that seventy percent (70%) of the Development Fee
shall be funded in accordance with the provisions of Exhibit F and that
thirty percent (30%) of the Development Fee (the “Retained Development Fee”)
shall be retained by Owner pending Completion and shall be subject to loss by
Developer in accordance with the provisions of this Exhibit G.

2.                                       If
the Designated Construction Costs incurred to complete the Project exceed the
Designated Construction Costs set forth in the Final Development Budget, then
the Development Fee shall be reduced as follows:

(a)                                  if
the Designated Construction Costs incurred to complete the Project exceed the
Designated Construction Costs set forth in the Final Development Budget by less
than three percent (3%) of the budgeted Designated Construction Costs, then the
Development Fee shall be reduced by the lesser of (i) the amount by which
incurred Designated Construction Costs exceed the Designated Construction Costs
set forth in the Final Development Budget, or (ii) seventeen percent (17%) of
the Retained Development Fee;

(b)                                 if
the Designated Construction Costs incurred to complete the Project exceed the
Designated Construction Costs set forth in the Final Development Budget by
three percent (3%) or more (but less than five percent (5%)) of the budgeted
Designated Construction Costs, then the Development Fee shall be reduced by an
amount equal to thirty four percent (34%) of the Retained Development Fee; and

(c)                                  if
the Designated Construction Costs incurred to complete the Project exceed the
Designated Construction Costs set forth in the Final Development Budget by five
percent (5%) or more of the budgeted Designated Construction Costs, then the
Development Fee shall be reduced by an amount equal to fifty percent (50%) of
the Retained Development Fee.

3.                                       If
the actual date of Completion extends beyond the date of Completion as
projected in the Final Project Schedule (excluding delays caused by Force
Majeure Events or delays resulting from change orders approved or deemed
approved by Owner), then the Development Fee shall be reduced as follows:

(a)                                  if
the actual date of Completion exceeds the projected Completion date by more
than sixty (60) days (but less than ninety (90) days), then the Development Fee
shall be reduced by seventeen percent (17%) of the Retained Development Fee;

(b)                                 if
the actual date of Completion exceeds the projected Completion date by ninety
(90) days or more (but less than one hundred twenty (120) days), then the
Development Fee shall be reduced by fifty percent (50%) of the Retained
Development Fee; and

 G-1
 

(c)                                  if
the actual date of Completion exceeds the projected Completion date by one
hundred twenty (120) days or more, then the Development Fee shall be reduced by
one hundred percent (100%) of the Retained Development Fee.

4.                                       Notwithstanding
the foregoing provisions of this Exhibit G,
in no event shall the aggregate decrease in the Development Fee pursuant to
Sections 2 and 3 above exceed an amount equal to one hundred percent (100%) of
the Retained Development Fee.

 G-2

EXHIBIT H

INSURANCE REQUIREMENTS

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

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

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

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

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

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

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

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

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

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

 H-1
 

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

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

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

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

V.                                     Additional
Requirements.

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

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

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

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

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

 H-2
 

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

 H-3

EXHIBIT I

POTENTIAL DELEGATION ITEMS

1.                                       Authority
to enter into contracts with third parties, as Owner’s agent, calling for total
payments in an amount not to exceed the limit specified by Owner, including
(without limitation) contracts with engineers and other consultants, as long as
same fit within the goals of the Plan.

2.                                      Authority
to represent, sign and obtain business licenses, building permits and special
permits for permanent improvements, excluding permits required to be obtained
directly by the various consultants and contractors on the Project.

3.                                       Authority
to represent, sign and obtain approvals from authorities having jurisdiction
over the Project, including planning, zoning and map approvals and all other
entitlements required to execute the Plan.

4.                                       Authority
to negotiate and disperse funds necessary for agreements with public bodies and
utility companies for access, traffic control and utility services for the
Project.

5.                                       Authority
to coordinate and supervise all design/development aspects of the Project.  The parties acknowledge that the Plans, once
created, are subject to revision.  Owner
may delegate to Developer by written instrument the right to approve changes to
the drawings and execute change orders that are not material changes and do not
affect the Plan.

6.                                       Authority
to initiate, facilitate and engage counsel to file any lawsuit involving a
dispute of less than $500,000.

7.                                       Authority
to facilitate and oversee the sale of any personal property so long as the sale
meets the goals of the Plan.

8.                                       Authority
to supervise all submittals to any lender or prospective lender and facilitate
all required disbursements of development draws in accordance with the terms
and conditions of any loan made with respect to the development of the Project.

9.                                       Authority
to coordinate inspections (in cooperation with the Architect and the GC)
required by municipal authorities, any lender and either of their respective
agents, contractors, employees or designees relating to the overall
construction of the Project, including, but not limited to, signing
applications for building permits, approvals and certificates of occupancy,
etc.

10.                                 Authority
to facilitate, at Owner’s sole cost and expense (subject to limitations on
amount imposed by Owner), Owner’s compliance with all legal requirements
governing the construction of the Project, the terms and conditions of any loan
with respect to the Project and the marketing and promotion of the Project.

 I-1
 

11.                                 Authority
to pay from the Operating Account, when due, all expenses, including without
limitation taxes, assessments and other levies applicable to the Project, and
deliver to the Owner reasonable proof of payment as soon as reasonably
available after the due date thereof. 
Should the Owner so elect, disbursements may be executed through a
commercial lender pursuant to said lender’s disbursement policies.

12.                                 Authority
to maintain records, books and accounts with respect to the Project, which
records shall be subject to examination by Owner or its authorized agents and
employees at all reasonable hours, and which records, books and accounts will
be the property of Owner.

13.                                 Developer
and Owner shall agree upon an initial amount to fund the Operating
Account.  Developer may be authorized by
Owner in writing to issue checks upon the Operating Account to pay for all
authorized obligations and expenditures incurred by Developer and for and on
account of the Owner in connection with the design, development, promotion and
marketing of the Project. It is expressly understood and agreed by Developer
that all disbursements of funds authorized by Owner to be made by Developer
shall be made by a check drawn on the Operating Account; provided, however,
that Developer shall not, without the prior consent of the Owner, draw any
checks on the Operating Account other than those for payment of expenses as
specified in the Plan. Developer shall cause all disbursements, transfers or
refunds of funds to be reflected by appropriate journal or bookkeeping entries
and substantiated by appropriate records and accounting procedures.

 I-2

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