DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (this Agreement) is made and
entered as of the 30th day of April, 1998, by and between
PHILLIPS DEVELOPMENT CORPORATION, an Arkansas Corporation
(hereinafter referred to as the Developer) and PYRAMID FOUR
LIMITED PARTNERSHIP, an Missouri limited partnership
(hereinafter referred to as the Partnership).
WITNESSETH:
WHEREAS, the Partnership is the owner of or has right to
purchase certain unimproved real property lying and being in
Jackson County, Missouri, and more fully described in Exhibit A
attached hereto and made a part hereof by reference (hereinafter
referred to as the Property); and
WHEREAS, the Partnership desires that the Developer assume
responsibility for the improvement, development and construction
of an apartment complex to be built on the Property (such
improvements, including all appurtenances thereto collectively
referred to as the Project). Pursuant to the terms hereof; and
WHEREAS, Developer is willing to accept such responsibility
and to perform the duties contained herein in consideration of
the compensation set forth herein;
NOW, THEREFORE, for and in consideration of Ten Dollars
($10.00) and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties
hereto agree as follows:
1. Engagement of the Developer. The Partnership does hereby
engage the Developer, as developer, and the Developer hereby
accepts such engagement as the developer for the Project and
agrees to perform the duties set forth in Paragraph 2 of this
Agreement.
2. Development Duties. The Developer hereby agrees to
assume responsibility for and faithfully perform, or cause to be
performed, the improvement, development and construction of the
Project to be built on the Property, including the installation
of all materials, fixtures, appliances and equipment on the
Property in accordance with the plans and specifications from
time to time agreed to between the Developer and the Partnership,
including but in no way limited to
(a) Preparation of specific plans and specification for
site improvements, roads, utilities, recreational facilities,
buildings and other improvements, when required;
(b) Preparation of detailed budget projections for the
cost of construction and development of the Project as are
required from time to time;
(c) Obtaining all necessary governmental approvals and
permits;
(d) Negotiation of contracts with architects,
contractors, vendors, and other suppliers and servicers utilized
in the design, construction and development of Project;
(e) Supervision of performance of architects,
contractors, vendors and other suppliers and servicers utilized
in construction of the Project;
(f) Review of invoices for payment of architects,
contractors, subcontractors, vendors and other suppliers and
servicers for the Project;
(g) Maintenance of financial records and preparation of
periodic updating and revision of cost projections;
(h) Reporting to the Partnership monthly regarding
progress of construction of the Project;
(i) Ensure that all contractors, vendors and other
suppliers have adequate general liability insurance and workmen's
compensation insurance, and that all performance bonds are in
force and legally effective in all respects;
(j) Negotiate and engage, on behalf and with the
approval of the Partnership, all attorneys, accountants, and
other professionals to handle all legal, accounting or other
matters in connection with the development of the Project;
(k) Negotiating and arranging financing for and
syndication of the Project, and
(l) Perform all other duties, upon written request of
the Partnership, which are reasonably related to the improvement,
construction, or development of the Project.
3. Compensation and Reimbursement of the Developer. As
compensation for the performance of all of its duties hereunder,
the Developer shall be entitled to a development fee (the
Developers Fee) in the total amount of Four Hundred Seventy Four
Thousand and One Hundred Twenty One Dollars ($474,121) earned by
the Developer and payable in accordance with a schedule attached
hereto and made a part hereof, but not later than completion of
the Project and issuance of a certificate of occupancy for all
units thereof (hereinafter referred to as the Completion Date.)
The Partnership shall further reimburse the Developer on a
monthly basis for any and all amounts disbursed by the Developer
on behalf of the Partnership, including, but not limited to, all
direct and indirect costs for labor and materials incurred in the
construction and development of the Project and all amounts paid
for taxes, utilities, assessments and the like on behalf of the
Partnership; provided however, that nothing in this Agreement
shall obligate Developer to make such payments, it being the
intent of the parties that such costs will be the responsibility
of the Partnership.
The Developers fee shall be payable only if a syndication
occurs and the total fees paid shall be adjusted by the total
credit delivered and the percentage of payment agreed to in the
syndication agreement, and in accordance with any reducers
contained in the syndication agreement and the completed
partnership agreement. In no event will the Developer's fee be
more than payments received by the partnership for sale of tax
credits.
4. Terms of Engagement. The engagement of Developer shall
commence upon the effective date of this Agreement as first above
written and shall continue until the last building constructed on
the Property is placed in service.
5. Performance of the Developer. While performing its
duties hereunder, the Developer shall diligently endeavor to
protect the property rights and interests of the Partnership as
vested in the Property and the Project; to perform all of its
duties hereunder in a good, diligent and workmanlike manner; to
employ skilled agents, lawyers, accountants and to supervise them
diligently; and to comply with all laws, ordinances, rules,
regulations and orders of any public authority bearing on the
performance of the Developer's duties. The Developer may engage
in other development, construction and similar activities on its
own behalf or for other entities; provided, however, that any
such other activities do not interfere with the performance of
its obligations hereunder.
6. Assignment. The Developer shall not assign this
Agreement in whole or in part without the consent of the
Partnership; provided however, that the Developer may employ such
agents as it shall deem necessary in the performance of its
duties contemplated hereunder. Notwithstanding any such
delegation, the Developer shall remain fully responsible for
performance of its duties set out hereunder.
7. Miscellaneous.
(a) At all times this Agreement shall inure to the
benefit of and constitute a binding obligation upon each of the
parties hereto and their respective successors and, where
permitted, their assigns.
(b) All notices, consent, approvals, acceptances and
other communications given or made under this Agreement shall be
in writing, duly signed by the party giving or making the same,
and shall be deemed to have been properly given or made if
personally delivered or five (5) days after deposit in the United
States certified mail, return receipt requested, addressed as
follows (or any subsequent address provided to all parties):
If to Developer:
Phillips Development Corporation
1501 N. University
Suite 740
Little Rock, AR 72207
If to Partnership:
Pyramid Four Limited Partnership
1501 N. University
Suite 740
Little Rock, AR 72207
Attn: General Partner
(c ) If any provision hereof is adjudged to be
invalid, the other provision hereof shall be enforceable.
(d) This Agreement contains the entire understanding
between the parties and supersedes any prior understandings or
agreements among them. There are no representations, agreements,
arrangements or understandings, oral or written, between and
among the parties hereto relating to any of the provisions of
this agreement which are not fully expressed and incorporated
herein.
(e) This Agreement may not be modified or amended except
with the written consent of all the Parties.
(f) This Agreement shall be governed by and construed in
accordance with the laws of the State of Missouri.
(g) The relationship between Partnership and Developer
is that of independent contracting parties. This Agreement shall
not in any manner be construed as a joint venture or partnership.
(h) Section titles or captions contained in this
Agreement are inserted as a matter of convenience and for
reference and in no way define, limit, extend or describe the
scope of this Agreement or the intent of any provision thereof.
(i) All pronouns and any variation thereof shall be
deemed to refer to the masculine, feminine, neuter, singular or
plural as the identity of the person or persons may require.
(j) This Agreement may be signed by each party hereto
upon a separate copy, in which event all of said copies shall
constitute a single counterpart of this Agreement. This
Agreement may be executed in any number of counterparts and all
of such counterparts shall for all purposes constitute one
agreement, binding on the parties hereto.
IN WITNESS WHEREOF, the parties have hereunto set their
hands and seals the year and day first above written.
(THE REMAINDER OF THIS PAGE IS LEFT BLANK INTENTIONALLY.)
DEVELOPER:
PHILLIPS DEVELOPMENT CORPORATION
By: ___________________________
Chairman/Phillips Development
Corp.
Attest:
______________________________
Secretary
(CORPORATE SEAL)
PARTNERSHIP:
PYRAMID FOUR LIMITED PARTNERSHIP
By: Phillips Development
Corporation
General Partner
By:/s/ Chester D. Phillips
Chester D. Phillips/Chairman
(CORPORATE SEAL
DEVELOPMENT FEE SCHEDULE
Option on property in place 5
Market analysis done 5
Evidence of all utilities 3
Evidence of zoning 4
Preliminary plans 1
Environmental reports 2
Syndication contract 5
PERMANENT/Construction applicatio 5
Tax Credit Reservation 6
Final Plans 4
Water permit 1
Sewer permit 1
Building permit 2
Construction loan commitment 4
Permanent loan commitment 6
Syndication agreement executed 6
Receipt of the C.O.'s 10
Receipt of tax credit allocation 15
Close permanent loan 15
100%
EXHIBIT A
All of Lots 18, 19, 20 and 21, COUNTRY CLUB ACRES, a subdivision
in Independence, Jackson County, Missouri, except that part in
Sterling Avenue, according to the recorded plat thereof.
synd.17537.1260.BOS2.78293_8