MASTER AGREEMENT REGARDING FRISCO SQUARE PARTNERSHIPS

Exhibit 10.1

MASTER AGREEMENT

REGARDING

FRISCO SQUARE PARTNERSHIPS

This Master Agreement Regarding Frisco Square Partnerships (the “Agreement”) is made this 31^st day of December, 2004, by and between Fairways Frisco, L.P., a Texas limited partnership (“Fairways Frisco”), Fairways B1-6 F1-11, LLC, a Texas limited liability company (“Fairways B1-6”), Fairways B1-7 F1-10, LLC, a Texas limited liability company (“Fairways B1-7”) and Fairways FS Properties, LLC, a Texas limited liability company (“Fairways FS”) (Fairways Frisco, Fairways B1-6, Fairways B1-7 and Fairways FS are hereinafter collectively referred to as the “Fairways Group”), and Cole McDowell (“McDowell”), Mary Pat McDowell (“Mary”), Five Star Development Co, Inc., a Texas corporation (“Five Star”), CMP Management, LLC a Texas limited liability company (“CMP Management”) and CMP Family Limited Partnership, a Texas limited partnership (“CMP Family”), (McDowell, Mary, Five Star, CMP Management and CMP Family are hereinafter collectively referred to as the “Five Star Group”), and is joined in for the limited purposes described herein below by Frisco Square B1-6 F1-11, Ltd., a Texas limited partnership (“Frisco Square B1-6”), Frisco Square B1-7 F1-10, Ltd., a Texas limited partnership (“Frisco Square B1-7”), Frisco Square Properties, Ltd., a Texas limited partnership (“FS Properties”), and Frisco Square Ltd., a Texas limited partnership (“FSLTD”) (Frisco Square B1-6, Frisco Square B1-7, Frisco Square Properties and FSLTD are hereinafter collectively referred to as the “Partnerships” and singularly referred to as a “Partnership”).

R E C I T A L S:

A. McDowell and his wife, Mary, collectively own directly, or indirectly through entities they own, 100% of the legal and equitable ownership of each of the Partnerships.

B. The Partnerships own those certain improved and unimproved tracts of real property identified on Exhibit “I” attached hereto and incorporated herein for all purposes (“Property” or “Properties”).

C. Each of the Partnerships needs to raise capital in order to pay certain debts and obligations and Fairways Frisco is willing to invest capital into the Partnerships on the terms and conditions provided in this Agreement.

D. Time is of the essence because the Partnerships are obligated to make certain payments on the date hereof.

E. Pursuant to this Agreement, Fairways Frisco will contribute capital to Frisco Square B1-6, Frisco Square B1-7 and FS Properties (such Partnerships are collectively referred to as the “Equity Partnerships” and singularly referred to as an “Equity Partnership”) and will become a limited partner in each of the Equity Partnerships and, further, three subsidiary limited liability companies (Fairways B1-6, Fairways B1-7 and Fairways FS) will become co-general partners in the respective Equity Partnerships.

F. Pursuant to this Agreement, Fairways Frisco will purchase from FSLTD an option to acquire partnership interests in FSLTD.

G. This Agreement shall serve as an amendment to the agreements of limited partnership, as may have been amended, of each of the respective Equity Partnerships (the “Existing Partnership Agreements” or “Existing Partnership Agreement” if singular), and the Existing Partnership Agreements and this Agreement together shall govern the rights and responsibilities of the parties hereto (and their affiliates) with respect to the Existing Partnerships.

AGREEMENT:

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and agreed to by the parties hereto, the parties hereby agree that the Existing Partnership Agreements are hereby amended in accordance with this Agreement and further agree as follows:

1. Definitions. All terms used in this Agreement shall, to the extent possible and consistent with the terms and intent of this Agreement, have the same meaning that such terms have in the respective Existing Partnership Agreements unless otherwise expressly provided for in this Agreement.

2. Admission of Partners to Equity Partnerships.

capital contributions to Frisco Square B1-7 of cash in amounts equal to 99.9% of the amounts set forth on Schedule “A” relating to Frisco Square B1-7 on the dates set forth on Schedule “A”.

For purposes of the foregoing paragraphs 2(a), 2(b), 2(c), 2(d), 2(e) and 2(f), a member of the Fairways Group shall be deemed to have satisfied its obligation to make capital contributions to a respective Equity Partnership to the extent that the obligations to be paid with such capital contributions as set forth on Schedule “A”, as more specifically described in paragraph 4 below, are otherwise satisfied as a result of either a refinancing, discount, discharge or deferral arrangement by the respective Equity Partnership. Notwithstanding the provisions of any Existing Partnership Agreement, a member of the Fairways Group shall have the right to transfer its Partnership Interest in an Equity Partnership to any person that is controlled or managed by James C. Leslie.

3. Dilution of Five Star Group and Special Distributions and Development Fee.

the capital contributions to be made by the members of the Fairways Group pursuant to this Agreement. Consequently, the capital accounts of the members (directly or indirectly) of the Five Star Group with respect to each Equity Partnership shall be adjusted (without making any further capital contributions) on the date hereof and on such other dates as may be necessary, in such manner and at such times to ensure that the capital accounts of the Five Star Group in each Equity Partnership is collectively equal to the collective capital accounts of the members of the Fairways Group with respect to such Partnership (after the preferential $1,000,000 and $2,500,000 distributions have been made).

4. Utilization of Capital Contributions. The capital contributions made by members of the Fairways Group pursuant to paragraph 2 shall be used by the Existing Partnerships solely for the purpose of paying the obligations described on Schedule “A” attached hereto in accordance with the dates and amounts set forth on Schedule “A”.

5. Management and Governance.

6. Responsibility of Co-General Partner. Each Co-General Partner will be primarily responsible for determining and negotiating alternative sources of financing for its respective Equity Partnership, provided that no Co-General Partner is firmly committing, guaranteeing or warranting, and shall not be required to expend any of its own funds to receive, a commitment for or to obtain such financing.

7. Minimum Construction Requirements. With respect to Frisco Square B1-7, any improvements to be constructed on the Property owned by such Equity Partnership will have at least 71,700 gross square feet. With respect to Frisco Square Properties, improvements to be constructed on the following pad sites owned by such Equity Partnership will have the following minimum amounts of gross square feet:

8. Representations and Warranties. McDowell, CMP Management, CMP Family and Five Star, jointly and severally, hereby represent and warrant the following as of the date hereof, and such representations and warranties shall survive indefinitely:

9. Representations and Warranties of the Fairways Group. The Fairways Group, jointly and severally, hereby represent and warrant to the Five Star Group the following, and such representations and warranties shall survive indefinitely:

10. Special Remedy for Undisclosed Liabilities. In addition to any other remedies permitted at law or in equity, in the event that an Equity Partnership has liabilities in amounts exceeding the sum of (i) the amounts set forth on Schedule B (the “Excess Amounts”) plus (ii) $200,000, then the following shall apply:

11. Buy Sell Agreement. With respect to each Equity Partnership, the following Buy Sell provisions shall apply:

If at any time after December 31, 2005, and for any reason, those Partners of such Partnership who are members, subsidiaries of members or affiliates of the Five Star Group (the “Five Star Partners”) desire to either sell their collective Partnership Interests in such Partnership to those Partners of such Partnership who are members, subsidiaries of members or affiliates of members of the Fairways Group (“Fairways Partners”), or the Fairways Group desires to sell its Partnership Interests in such Partnership to the Five Star Group, then such group desiring to sell (“Offeror”) shall send a written notice (“Notice”) of such desire to sell to the other group (“Offeree”) which Notice shall set forth a gross value for all Property owned by such Partnership. Within sixty (60) days of delivery of such Notice, Offeree shall elect either to purchase all of the Offeror’s Partnership Interests in such Partnership, or Offeree may elect to sell all of its Partnership Interests in such Partnership to Offeror, in which event Offeror shall be obligated to purchase all of Offeree’s Partnership Interests in such Partnership. Such election shall be made in writing, and if Offeree fails to make such written election, Offeree shall be deemed to have elected to sell its Partnership Interests. The purchase price to be paid by the purchasing group to the selling group for all of the selling group’s Partnership Interests shall be equal to the amount that the selling group would receive if all of the assets of such Partnership were sold at a price equal to the gross value set forth in the Notice, all liabilities of such Partnership as of the closing date were paid in full and the remaining proceeds distributed to the Partners pursuant to the terms of the Existing Partnership Agreement as amended by this Agreement. The purchase price shall be paid 20% in cash at closing and the remaining balance (80%) of the purchase price shall be evidenced by a promissory note secured by the Partnership Interests purchased, bearing interest at the prime or base rate of interest plus two percent (2%) at Bank of America, NA, and payable in equal quarterly installments of principal and interest for sixteen successive quarters on the last day of the month of each such quarter, commencing with the last day of the third month following the closing. The closing of such purchase and sale shall occur on or before the one hundred twentieth (120^th) day following the delivery of the Notice.

12. Option for FSLTD. For and in consideration of the sum of $273,152 (the “Option Price”) paid on or before January 5, 2005 by Fairways Frisco to FSLTD, FSLTD hereby grants to Fairways Frisco the right and option to acquire a fifty percent (50%) Partnership Interest, Sharing Ratio and interest in FSLTD upon the refinancing of such Partnership’s current indebtedness payable to CoServe/Denton Realty Partners, provided that such refinancing occurs

on or before June 30, 2005, and provided further that the terms of such refinancing are reasonable and market terms. Fairways Frisco will be primarily responsible for determining and negotiating alternative sources of financing for FSLTD, and FSLTD hereby authorizes and designates Fairways Frisco to negotiate with CoServe/Denton Realty Partners and to negotiate with potential lenders with respect to the financing for the FSLTD, provided that Fairways Frisco shall have no right, power, or authority to commit or bind FSLTD without the written consent of FSLTD; and provided further, that FSLTD hereby agrees to accept any financing or refinancing presented by Fairways Frisco so long as the terms of such refinancing are reasonable and market terms. For purposes of this paragraph 12, such refinancing must have a term of at least three (3) years and must, as a consequence, cause all members of the Five Star Group to be released from any and all personal liability that they had under the current indebtedness payable to CoServe/Denton Realty Partners. Fairways Frisco shall have the right to assign all or any portion of its rights and option granted under this paragraph 12 to any person controlled by or managed by James C. Leslie. All of the option price shall be paid immediately by FSLTD to CoServe/Denton Realty Partners as a payment on FSLTD’s outstanding indebtedness. If Fairways Frisco (or its assigns) exercises its right and option pursuant to this paragraph 12, then the Partnership Agreement of FSLTD shall thereupon, ipso facto, without any further action required on the part of Fairways Frisco, members of the Five Star Group, or FSLTD or its general partner, be deemed to be amended for and to the same extent that the Existing Partnership Agreements for the Equity Partnerships are amended pursuant to this Agreement, as more specifically provided in the foregoing paragraphs, provided that (i) Fairways Frisco will specifically designate an entity to be the Co-General Partner and (ii) Fairways Frisco shall receive credit for a capital contribution equal to the Option Price (and the capital account of Partners of FSLTD who are members of, subsidiaries of or affiliates of members of the Five Star Group will adjust their respective capital accounts to be collectively equal to the Option Price). Prior to June 30, 2005, the Five Star Group covenants and agrees that it shall not amend the Partnership Agreement of FSLTD or cause FSLTD or the general partner of FSLTD to take any action that would be a Major Decision (as described in paragraph 5(c)) without first obtaining the written consent of Fairways Frisco.

13. Financial Statements. On or before January 15, 2005, the Five Star Group shall deliver unaudited balance sheets and income statements (prepared on a tax basis) as of December 31, 2004 for each Partnership. If any such balance sheet or income statement is not delivered by such date, then Fairways Frisco shall have the right to engage an outside accountant to prepare such financial statements and the Five Star Group shall pay for such accountant’s services.

14. Municipal Management District Bond Debt. The parties hereby agree to endeavor to meet with the City of Frisco and determine all rights and obligations with respect to that certain municipal management district bond debt in the approximate amount of $12,500,000 on or before January 31, 2005.

15. Further Assurances. Each party to this Agreement agrees to act in good faith and make its best efforts to prepare, execute and deliver such additional documents and take such additional actions as may be reasonably necessary or appropriate to implement, effectuate and fulfill all of the terms, provisions, rights and obligations set forth in or contemplated by this Agreement. Without limiting the generality of the foregoing, each party hereto understands and agrees that the Existing Partnership Agreements may need further amendment to address inconsistencies, or ambiguities with this Agreement or to address matters that have not been covered by this Agreement.

16. Agreement Controls. If and to the extent that any provision of this Agreement is inconsistent or contradicts or is ambiguous with the terms and provisions of any Existing Partnership Agreement, the terms and provisions of this Agreement shall control.

17. Successors and Assigns. This Agreement shall be binding upon and shall enure to the benefit of each of the parties hereto and its respective heirs, administrators, representatives, successors and assigns.

18. Headings. The headings used in this Agreement are for convenience only and in no way limit or enlarge the scope or meaning of the language hereof.

19. Invalidity and Waiver. If any portion of this Agreement is held invalid or inoperative, then, so far as is reasonable and possible, the remainder of this Agreement shall be deemed valid and operative, and, to the greatest extent legally possible, effect shall be given to the intent manifested by the portion held invalid or inoperative. The failure by any party to enforce against any other party any term or provision of this Agreement shall not be deemed to be a waiver of such party’s right to enforce against any other party the same or any other such term or provision in the future.

20. Entirety and Amendments. This Agreement embodies the entire agreement between the parties and supersedes all prior agreements and understandings relating to the transactions contemplated hereby. This Agreement may be amended or supplemented only by instrument in writing executed by the party against whom enforcement is sought.

21. Time. Time is of the essence in the performance of the Agreement.

22. Notices. All notices required or permitted hereunder shall be in writing and shall be served on the parties at the addresses previously given in writing to the other parties hereto, or at such other address as subsequently may be given in writing to the parties. Any such notice shall, unless otherwise provided herein, be given or served (a) by depositing the same in the United States mail, postage paid, certified and addressed to the party to be notified, with return receipt requested, (b) by overnight delivery using a nationally recognized overnight courier, (c) by personal delivery, or (d) by facsimile transmission with a confirmation copy delivered by another method permitted under this paragraph 22. Notice given in accordance herewith for all permitted forms of notice shall be effective upon the earlier to occur of actual delivery to the address of the addressee or refusal of receipt by the addressee. Notices given by counsel to a party shall be deemed given by such party.

23. Construction and Waiver. The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and agree that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement or any exhibits or amendments hereto.

24. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of such counterparts shall constitute one

Agreement. To facilitate execution of this Agreement, the parties may execute and exchange by telephone facsimile counterparts of the signature pages, and such executed originals thereof shall be forwarded to the other party on the same day by any of the delivery methods set forth in the paragraph for Notices (other than facsimile).

This Agreement is executed as of and effective as of the date first written above.