Exhibit 10.1

Master Property Management, Leasing

and Construction Management Agreement

This Master Property Management, Leasing And Construction Management Agreement
(“Agreement”) is made and entered into as of the 1st day of April, 2007 by and
among Wells Real Estate Investment Trust II, Inc., a Maryland corporation
(“Wells REIT II”), Wells Operating Partnership II, L.P., a Delaware limited
partnership (“Wells OP II”), and Wells Real Estate Advisory Services, Inc., a
Georgia corporation (“Manager”).

Background

Wells OP II was organized to acquire, own, operate, lease and manage real estate
properties on behalf of Wells REIT II. Owner (as defined below) intends to
retain Manager to manage, coordinate the leasing of, and manage construction
activities related to, some of the real estate properties acquired for the
benefit of Wells REIT II under the terms and conditions set forth herein.

Agreement

Now, Therefore, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

 

1.

Definitions. Except as otherwise specified or as the context may otherwise
require, the following terms have the respective meanings set forth below for
all purposes of this Agreement, and the definitions of such terms are equally
applicable both to the singular and plural forms thereof:

 

 

1.1.

“Advisor” means Wells Capital, Inc., a Georgia corporation, or its successor as
advisor of Wells REIT II.

 

 

1.2.

“Affiliate” of another Person includes only the following: (i) any Person
directly or indirectly controlling, controlled by, or under common control with
such other Person; (ii) any Person directly or indirectly owning, controlling,
or holding with the power to vote 10% or more of the outstanding voting
securities of such other Person; (iii) any legal entity for which such Person
acts as an executive officer, director, trustee, or general partner; (iv) any
Person 10% or more of whose outstanding voting securities are directly or
indirectly owned, controlled, or held, with power to vote, by such other Person;
and (v) any executive officer, director, trustee, or general partner of such
other Person.

 

 

1.3.

“Conflicts Committee” has the meaning ascribed to that term in the articles of
incorporation of Wells REIT II.

 

 

1.4.

“Improvements” means buildings, structures, and equipment from time to time
located on the Properties and all parking and common areas located on the
Properties.

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1.5.

“Lease” means, unless the context otherwise requires, any lease or sublease made
by Owner or Owner JV as landlord or by its predecessor.

 

 

1.6.

“Management Fees” has the meaning set forth in Section 4 hereof.

 

 

1.7.

“Owner” means Wells OP II, Wells REIT II, and each of their direct and indirect
subsidiaries.

 

 

1.8.

“Owner JV” means, collectively, all joint ventures, limited liability companies
and other Affiliate of Owner that are controlled or managed by Owner and that
own, in whole or in part, any Improvements.

 

 

1.9.

“Ownership Agreements” has the meaning set forth in Section 2.3.B hereof.

 

 

1.10.

“Person” means any natural persons, partnership, corporation, association,
trust, limited liability company or other legal entity.

 

 

1.11.

“Properties” means all real estate properties owned by Owner or Owner JV and all
tracts acquired by Owner or Owner JV in the future containing income-producing
Improvements or on which Owner or Owner JV will construct income-producing
Improvements that are included on a Property Amendment to this Agreement (but
does not include real estate property owned by Owner or Owner JV that is not
included on a Property Amendment agreed to by Owner and Manager).

 

 

1.12.

“Property Amendment” means an amendment to this Agreement describing a parcel of
real estate and an Improvement thereon (or, in the case of construction
management services provided pursuant to Section 2.6, an Improvement or a
planned Improvement, as the case may be) and describing the services to be
provided by Manager to Owner or Owner JV under this Agreement.

 

2.

Appointment Of Manager; Services To Be Performed.

 

 

2.1.

Appointment of Manager. Owner hereby engages and retains Manager as the sole and
exclusive manager of the Properties to perform such functions as are specified
on the Property Amendment related to each Property and as set forth herein.
Manager hereby accepts such appointment on the terms and conditions hereinafter
set forth. It being understood that this Agreement causes Manager to be, at law,
Owner’s and Owner JV’s agent with respect to the Properties but only for the
limited purposes set forth on the Property Amendments and otherwise expressly
set forth herein upon the terms contained herein. Owner represents that it has
authority to grant such agency power. Nothing herein shall obligate Owner to
enter into any Property Amendment.

 

 

2.2.

Dealings with Advisor. Unless Owner specifically informs Manager to the
contrary, Advisor may perform any of the obligations or exercise any of the
rights of Owner or Owner JV under this Agreement; provided that any actions that
Advisor takes on behalf of Owner or Owner JV pursuant hereto are subject to the
terms of the agreements between Advisor and Owner, and this Section 2.2 does not
expand or modify the authority of Advisor to act on behalf of Owner or Owner JV.
No

 

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Property Amendment shall be entered into by Owner or Owner JV without the
approval of Owner’s Board of Directors (or a committee of the board authorized
to give such approval).

 

 

2.3.

General.

 

 

A.

Efforts of Manager. Manager agrees to perform its duties under this agreement
and to use reasonable commercial efforts to enhance the Properties’ ability to
generate income. Manager’s services are to be of scope and quality not less than
those generally performed by professional managers of other similar properties
in the areas in which Properties are located. Manager shall make available to
Owner and Owner JV the full benefit of the judgment, experience and advice of
the members of Manager’s organization and staff with respect to the policies to
be pursued by Owner and Owner JV relating to the management, operation, leasing,
construction and/or buildout of the Properties.

 

 

B.

Ownership Agreements. Manager has received copies of agreements of limited
partnership, joint venture partnership agreements and operating agreements of
Owner and its Affiliates as well as the articles of incorporation, bylaws, and
registration statement on Form S-11 (no. 333-125643) of Wells REIT II, including
all prospectus supplements and post-effective amendments thereto (collectively,
the “Ownership Agreements”) and is familiar with the terms thereof. Advisor
agrees to obtain and review copies of all mortgages on all Properties and inform
Manager of any restrictions relating to property use thereof. Manager will use
reasonable care to avoid any act or omission which, in the performance of its
duties hereunder, in any way conflicts with the terms of the Ownership
Agreements or the mortgages in the absence of the express direction of the
Conflicts Committee, and Manager shall promptly notify Owner if any such
conflict arises.

 

 

2.4.

Specific Duties as Property Manager. Manager’s duties as property manager for
any of the Properties indicated on a Property Amendment as being subject to the
management services as provided herein include the following:

 

 

A.

Monies Collected. Manager will collect all rent and other monies from tenants
and any sums otherwise due Owner or Owner JV with respect to the Properties in
the ordinary course of business in accordance with the terms and conditions of
all leases and other agreements for the use and occupancy of the Properties,
including any other charges that may become due at any time from any tenant or
from others for services provided in connection with the use and occupancy of
the Properties. In collecting such monies, Manager will inform tenants of the
Properties that all remittances are to be in the form of a check, money order or
wire transfer. Owner authorizes Manager to request, demand, collect and receipt
for all such rent and other monies and to institute legal proceedings in the
name of Owner or Owner JV for the collection thereof and for the dispossession

 

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of any tenant in default under its Lease. All monies so collected shall be
deposited in an Account (as defined in Section 2.4.K(1)). Manager shall not
write-off any income items without the prior approval of Owner.

 

 

B.

Lease and Mortgage Obligations. Manager will perform all duties of the landlord
under all Leases insofar as such duties relate to operation, maintenance, and
day-to-day management. Manager will also provide or cause to be provided, at
Owner’s or Owner JV’s (as appropriate) expense, all services normally provided
to tenants of like premises, including where applicable and without limitation,
gas, electricity or other utilities required to be furnished to tenants under
leases, normal repairs and maintenance, and cleaning and janitorial service.
Manager shall use its commercially reasonable efforts to comply with the terms
and conditions of all Leases and shall promptly advise Owner of any material
breaches. Manager shall also perform all covenants and obligations required to
be performed under the provisions of all mortgages, deeds of trust, deeds to
secure debt or other like instrument to the extent that the performance of such
covenants and obligations are within the day-to-day control of Manager or as may
be requested in writing by Owner.

 

 

C.

Building Inspections. Conduct complete inspections of the Properties and the
surrounding common areas and all of their mechanical facilities as is prudent to
determine that the same are in good order and repair, but no less frequently
than once per calendar quarter during the term of this Agreement; provided,
however, that any Properties subject to triple-net leases need only be inspected
semi-annually.

 

 

D.

Maintenance. Manager will cause the Properties to be maintained in the same
manner as similar properties in the area. Manager’s duties and supervision in
this respect include, without limitation, cleaning of the interior and the
exterior of the Improvements and the public common areas on the Properties and
the making and supervision of repairs, alterations, and decoration of the
Improvements, subject to and in strict compliance with this Agreement and the
Leases.

 

 

E.

Limitations on Expenditures. Manager will not incur any costs other than those
estimated in any approved budget or approved pro forma statements or as
otherwise specified in a Property Amendment except for:

 

 

(1)

costs incurred in emergency situations in which action is immediately necessary
for the preservation or safety of a Property, or for the safety of occupant or
other person (or to avoid the suspension of any necessary service of the
Property);

 

 

(2)

expenditures for real estate taxes and assessments that exceed the amount
budgeted but only to the extent that such additional amounts are the result of a
tax rate increase, property value reassessment or other assessment that occurs
after the preparation of the budget;

 

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(3)

maintenance and repair costs that are individually under $10,000 so long as such
costs in the aggregate do not exceed the amount budgeted for such items by more
than 5%; and

 

 

(4)

maintenance supplies calling for an aggregate purchase price of less than
$5,000, unless a different amount is specified in a Property Amendment.

 

 

F.

Notice of Violations. Manager will forward to Owner promptly upon receipt all
notices of violation or other notices from any governmental authority, and board
of fire underwriters or any insurance company, and shall make such
recommendations regarding compliance with such notice as shall be appropriate.

 

 

G.

Personnel. Any personnel Manager hires to maintain and operate a Property shall
be the employees or independent contractors of Manager and not of Owner or Owner
JV. Manager agrees to use due care in the selection and supervision of such
employees or independent contractors. Manager is responsible for the preparation
of and shall timely file all payroll tax reports and timely make payments of all
withholding and other payroll taxes with respect to each employee.

 

 

H.

Utilities and Supplies. Manager shall enter into or renew contracts for
electricity, gas, steam, landscaping, fuel, oil, maintenance and other services
as are customarily furnished or rendered in connection with the operation of
similar properties in the area and shall order all necessary supplies and
equipment required for the proper operation, maintenance and repair of the
Properties;

 

 

I.

Tenant Complaints. Manager shall maintain business-like relations with the
tenants of the Properties and respond to tenant complaints in a prudent,
businesslike manner. Manager shall maintain a record of all tenant complaints
and Manager’s response to such complaints which record shall be available for
review by Owner.

 

 

J.

Signs. Manager shall place and remove, or cause to be placed and removed, such
signs upon the Properties as Manager deems appropriate, subject, however, to the
terms and conditions of the Leases and to any applicable ordinances and
regulations.

 

 

K.

Banking Accommodations.

 

 

(1)

Operating and Maintaining Bank Accounts. Manager shall establish and maintain
one or more separate checking accounts (each, an “Account”) in Owner’s or Owner
JV’s (as appropriate) name for funds relating to the Properties. All monies
deposited

 

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from time to time in each Account shall be and remain the property of Owner or
Owner JV (as appropriate) and shall be withdrawn and disbursed by Manager for
the account of Owner or Owner JV (as appropriate) only as expressly permitted by
this Agreement for the purposes of performing the obligations of Manager
hereunder. No monies collected by Manager on Owner’s or Owner JV’s behalf shall
be commingled with funds of Manager. Each Account shall be maintained, and
monies shall be deposited therein and withdrawn therefrom, in accordance with
the following:

 

 

(a)

All sums received from rents and other income from the Properties shall be
promptly deposited by Manager in an Account. All checks drawn to the order of
Owner, Owner JV, or Advisor should be endorsed by Manager for deposit only and
deposited in an Account.

 

 

(b)

Manager shall have the right to designate two or more persons who shall be
authorized to draw against each Account, but only for purposes authorized by
this Agreement. Manager may not under any circumstances write a check on an
Account payable to or in favor of Manager or any Affiliate of Manager other than
(i) to reimburse itself for expenditures made on behalf of the Properties, and
(ii) to pay itself the Management Fees payable hereunder, provided that any such
expenditure, reimbursement or Management Fee shall be reflected in the monthly
operating statement provided with respect to the month in which such expenditure
or reimbursement is paid, and all proper procedures for payment have been
followed.

 

 

(c)

All sums due to Manager hereunder, whether for compensation, reimbursement for
expenditures, or otherwise, as herein provided, shall be a charge against the
operating revenues of the Properties and shall be paid and/or withdrawn by
Manager from an Account in accordance with the terms of the approved budgets or
pro formas and to the extent funds are available therefor after taking into
account other required expenses of the Properties; provided, that if Manager has
received a notice in accordance with Section 7.1 that it is in default of any
material provision hereof and has not cured such default within ten
(10) business days, then Manager shall refrain from and be prohibited from
withdrawing funds from an Account pursuant to this Subsection 2.4.K(1)(c) until
such default is cured and Owner has consented to a normal resumption of the
activity provided for in this Subsection 2.4.K(1)(c). In the event that Manager
determines that there are insufficient funds in the Accounts for the

 

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Properties to pay sums due to Manager hereunder and to pay the other expenses of
the Properties, then Manager shall notify Owner in writing and Owner shall
promptly make sufficient funds available to satisfy such obligations.

 

 

(d)

Unless otherwise directed by Owner, by the 30th day of the first month following
each calendar quarter, Manager shall forward to Owner or Owner JV net operating
proceeds from the preceding quarter, retaining at all times, however a reserve
for each Property as specified on the Property Amendment related thereto, in
addition to any amounts otherwise provided in the budget as approved by Owner to
meet unbudgeted contingencies.

 

 

(2)

Closing Bank Accounts. All items relating to bank account closings are to be
coordinated through Owner. Manager is required to process cash activity in
accordance with any applicable termination agreement, purchase and sale
agreement, merger agreement, etc. Manager is responsible for final bank account
reconciliation at the time of close out or transfer of the account.

 

 

(3)

Bank Account Statements & Reconciliation.

 

 

(a)

Bank account statements will be delivered (via U.S. Mail) to a mailing address
stipulated by Manager directly from the banking institution to Manager’s
accounting offices.

 

 

(b)

Manager should reconcile all bank accounts in a timely manner and make available
such reconciliation(s) on request. Manager shall provide explanations for any
large, unusual or recurring reconciling items along with an indication as to
when they will be resolved. Bank reconciliations must be reviewed, approved, and
initialed by at least one accounting supervisor independent from the individual
preparing the bank reconciliation.

 

 

(c)

Any issues relating to timely receipt of the monthly bank account statement
(based on the established bank account statement cut-off date) should be
directed towards the banking institution. Recurring problems relating to the
timely receipt of statements should be brought to the attention of Owner.

 

 

(d)

Unless Owner specifically requires otherwise, bank account service charges/fees
will be set up to be billed (by the banking institution) directly to the
account.

 

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(e)

Outstanding checks (over 6 months old) should be researched and resolved in
accordance with instructions from Owner.

 

 

(4)

Failure of Depository Institution at which an Account is Located. Manager shall
have no liability to Owner or Owner JV for any amounts in an Account which are
lost or not covered by insurance if the depository institution at which the
Account is maintained fails or is otherwise placed in the control of a
governmental or quasi governmental authority and the assets of the Account are
thereby forfeited in whole or in part, provided such depository institution was
selected with reasonable care.

 

 

L.

Expenses. Manager shall analyze all bills received for services, work and
supplies in connection with the maintaining and operating the Properties, pay
all such bills, and pay utility and water charges, sewer rent and assessments,
and any other amount payable in respect to the Properties. Manager shall use
reasonable commercial efforts to pay all bills within the time required to
obtain discounts, if any. Owner may from time to time request that Manager
forward certain bills to Owner promptly after receipt, and Manager shall comply
with any such request. It is understood that the payment of real property taxes
and assessment and insurance premiums will be paid out of an Account by Manager.
All expenses shall be billed at net cost (i.e., less all commissions, discounts
and allowances, however designed, but excluding rebates). Additionally, Manager
will be held responsible for all Property 1099 reporting to the IRS. 1099’s must
be filed under Manager name and Manager taxpayer identification number (TIN),
listing Manager as the “payer”. Manager will provide annually a signed
declaration indicating compliance with 1099 reporting; Manager will provide this
declaration to Owner with the February Reporting Package. Penalties for
misfilings are not to be charged to the property, but are payable by Manager.

 

 

M.

Other Cash Management Items.

 

 

(1)

To the extent funds are available in an Account, Manager shall pay the operating
expenses of the Properties (including, without limitation, sums due Manager
under this Agreement) and any other payments relative to the Properties as
required by the terms of this Agreement.

 

 

(2)

Any interest or other income earned on the assets of an Account shall be
re-deposited in the Account, and shall for federal and state income tax purposes
be deemed to be income of Owner or Owner JV.

 

 

(3)

Unless the bank account structure utilizes an automated cash concentration to
Owner or Owner JV (e.g., zero balance account

 

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structure), amounts held in reserve should be forecasted for significant
expenditures (e.g. real estate tax payments) and must be held in interest
bearing vehicles until the funds are disbursed.

 

 

(4)

If a Property has petty cash, it is Manager’s responsibility to ensure that
petty cash is reconciled to general ledger and replenished on a monthly basis.

 

 

N.

Books and Records.

 

 

(1)

General. Manager shall cause to be kept account books and records for the
Properties. Books and records must show all receipts, expenditures and all other
records necessary or convenient for the recording of the results of operations
of the Properties. Such account books and records shall be kept in a secure
location at the office(s) where Manager normally keeps all of its records and
shall be open to inspection by Owner and its representatives at any reasonable
time. Upon the effective date of expiration or termination of this Agreement,
all such books and records shall be forthwith turned over to Owner so as to
ensure the orderly continuance of the operations of the Properties. Manager
shall take necessary measures to ensure such control over accounting and
financial transactions as is reasonably required to protect Owner’s and Owner
JV’s assets, from theft, error or fraudulent activity on the part of Manager’s
employees or other agents. Manager shall indemnify and hold Advisor, Owner, and
Owner JV harmless from all such losses, including, but not limited to, the
following:

 

 

(a)

Theft of assets by Manager’s employees or other agents;

 

 

(b)

Penalties and interest due to delay in payment of invoices, bills or other like
charges if funds of Owner or Owner JV or funds in an Account were available to
make said payments and delays were not the result of any action or inaction on
the part of Owner or Owner JV;

 

 

(c)

Overpayment or duplicate payment of invoices arising from either fraud or error;

 

 

(d)

Overpayment of labor costs arising from either fraud or error;

 

 

(e)

A sum equal to the value of any form of payment from purveyors to Manager’s
employees or associates arising from the purchase of goods or services for the
Properties; and

 

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(f)

Unauthorized use of facilities by Manager’s employees or associates.

 

 

(2)

Charts of Accounts. The format of all financial reports, documents and other
statements prepared by Manager pursuant to this Agreement shall utilize the
format required by Owner, as the same may be changed by Owner from time to time.

 

 

(3)

Fixed Asset Accounting. For Properties in portfolios requiring maintenance of
fixed asset accounting detail and related depreciation (as specified in the
Accounting Policies), Manager will be required to maintain and submit to Owner
on a monthly basis, a detailed schedule of all fixed asset additions and the
related depreciation/amortization and accumulated depreciation/ amortization
utilizing the useful lives and various depreciation methods specified within the
Accounting Policies. All such schedules shall agree to the amounts posted within
the general ledger. Manager shall not be responsible for any errors in data made
prior to Manager’s involvement with the data.

 

 

(4)

Periodic Meetings. As reasonably required by Owner, Manager and other personnel
engaged or involved in the management and operation of the Properties shall meet
to discuss the historical results of operations and to consider deviations from
budget.

 

 

(5)

Right to Conduct Audit. Owner shall have the right to conduct an audit of the
Properties’ operations by using its own internal auditors or by employing
independent auditors. Costs associated with conducting such audits by internal
or independent auditors shall be borne by Owner or Owner JV. Should such audits
result in the discovery of either weaknesses in internal control or errors in
record keeping, these shall be communicated to Manager in writing. Manager shall
correct such discrepancies either upon discovery or within a reasonable period
of time after notification. Manager shall inform Owner in writing of the action
taken and to be taken to correct such audit discrepancies. If any audit
conducted by or on behalf of Owner or Owner JV reveals a discrepancy in excess
of ten percent (10%), and greater than $10,000, for any material line item (i.e.
base rent, operating escalation income, total cleaning, total repairs and
maintenance, etc.), Manager shall be responsible for the reasonable expenses of
such audit.

 

 

(6)

Ownership of Books and Records. The books of accounts and all other records
relating to or reflecting the operations of the Properties shall at all times be
the property of Owner or Owner JV, as applicable.

 

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O.

Accounting Policies. Manager shall use the accrual method of accounting with
GAAP adjustments shown below (unless and until GAAP changes):

 

 

(1)

Straight-Line Rent Adjustment– Record straight-line rent over the entire lease
period on a lease by lease basis

 

 

(2)

Free Rent Adjustment – Recognize any Free Rent as part of the straight-line rent
calculation on a lease by lease basis

 

 

(3)

Capitalization Policy – Capitalize any expenditure that replace, improve, or
otherwise extend the economic life of an asset in excess of $5,000 for any given
project. This includes tenant improvements and lease acquisition costs (leasing
commissions, space planning fees, legal fees, etc) that are in excess of $5,000

 

 

(4)

Depreciation Expense – Record monthly depreciation expense on a straight-line
basis over the estimated useful life of a given asset

 

 

(5)

Amortization Expense – Record monthly amortization expense on a straight-line
basis over the life of the lease for which the cost was incurred

 

 

(6)

Other – Adopt such other accounting policies as Owner may direct from time to
time or as specified on Exhibit A.

 

 

P.

Reporting.

 

 

(1)

Monthly Financial Reporting Package. Not later than the 20th day of each month,
Manager shall cause to be delivered to Owner at least two copies of the standard
reporting package and the specific financial and property information and
reports set forth on Exhibit B. Manager acknowledges that the transmittal and
specific financial statements and/ or schedules required by Owner are subject to
change from time to time and may vary based on specific Property or portfolio
requirements. All such reports shall be in a form prescribed by Owner. In
addition, Manager shall prepare any forms required by Owner to facilitate the
input of financial information into Owner’s accounting system.

 

 

(2)

Quarterly Reports. On or before the 30th day of the first month following each
calendar quarter for which such report or statement is prepared and during the
term of this Agreement, Manager shall prepare and submit to Owner the reports
and statements detailed on Exhibit C.

 

 

(3)

Final Accounting. Following the expiration or earlier termination of this
Agreement, by virtue of the termination of this Agreement by Owner or Owner JV
for cause or otherwise, or following the partial termination of this Agreement
by removal of one or more

 

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Properties from the scope of this Agreement, Manager shall nonetheless be
responsible for preparing a final accounting within sixty (60) days of said
expiration or earlier termination for any or all Properties subject to such
termination or expiration. Such final accounting shall set forth all current
income, all current expenses and all other expenses contracted for on Owner’s or
Owner JV’s behalf but not yet incurred in connection with the applicable
Property(ies). The final accounting shall also include all other items
reasonably requested by Owner.

 

 

(4)

Certification. All financial statements other than those audited by Owner’s or
Owner JV’s independent public accounting firm shall be certified by an officer
of Manager as true and correct in all respects and fairly presenting the
financial results of the operation of the Properties.

 

 

(5)

Other Reports and Statements. Manager will furnish to Owner, at Manager’s
expense, as promptly as practicable, such other reports, statements and other
information with respect to the operations of the Properties as Owner may
reasonably request from time to time.

 

 

Q.

Budgets and Leasing Plans. Not later than October 1 of each calendar year,
Manager shall prepare and submit to Owner for its approval an operating budget
and, if Manager is also the leasing agent, a marketing and leasing plan on the
Properties for the calendar year immediately following such submission. The
budget and leasing plan shall be in the form of the budget and plan approved by
Owner prior to the date thereof and shall note (1) how the property will be
managed and leased, (2) market conditions, (3) demographics, (4) annual planned
maintenance schedule, (5) major leasing assumptions, (6) detail schedules for
all revenue and expense items with assumptions, and (7) capital expenditure
plans. As often as reasonably necessary during the period covered by any such
budget, Manager may submit to Owner for its approval an updated budget or plan
incorporating such changes as shall be necessary to reflect cost over-runs and
the like during such period. If Owner does not disapprove any such budget within
30 days after receipt thereof by Owner, such budget shall be deemed approved. If
Owner shall disapprove any such budget or plan, it shall so notify Manager
within said 30-day period and explain the reasons therefor.

 

 

R.

Governmental Approvals. Obtain all governmental approvals and permits necessary
for the operation of the Properties and recommend to Owner such actions or steps
as are necessary to cause the Properties to comply with any and all applicable
laws, regulations, ordinances, orders and directives of federal, state or local
governmental authorities;

 

 

S.

Coordination with Property Manager. To the extent Manager is not also the
leasing agent performing the functions described in Section 2.5,

 

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Manager will coordinate and cooperate with the leasing agent of the respective
Property(ies) to ensure the full leasing and efficient operation of the
Properties.

 

 

T.

Other Actions. Manager will take such other action and perform such other
functions as Manager or Owner deems advisable or necessary for the efficient and
economic management, operation and maintenance of the Properties.

 

 

2.5.

Specific Duties as Leasing Agent. Manager’s duties as leasing agent for any of
the Properties indicated on a Property Amendment (and only such Properties) as
being subject to the leasing agent services as provided herein include the
following:

 

 

A.

Leasing Functions. Manager will coordinate the leasing of the Properties and
negotiate and use reasonable commercial efforts to secure executed leases from
qualified tenants for available space in the Properties. Such leases must be
consistent with form and terms approved by Owner. Manager will use its
reasonable commercial efforts to bring about complete leasing of the Properties.
Manager shall be responsible for the hiring of all leasing agents, as necessary
for the leasing of the Properties, and to otherwise oversee and manage the
leasing process on behalf of Owner. Such duties include, without limitation,
(1) the preparation and distribution of listings to potential tenants in the
market, as well as to reputable and active real estate agents within a
reasonable effective area surrounding each Property and (2) the supplying of
sufficient information to cooperating agents to enable them at all times to
promote the rental of the Properties. Advisor, Owner, and Owner JV agree to
refer to Manager all offerings and inquiries it receives regarding leasing
activity at the Properties.

 

 

B.

Advertising. Owner authorizes Manager to advertise and to place signage on the
Properties regarding the leasing, provided, that, such signage complies with all
applicable governmental laws, regulations and requirements. Manager, at its
expense, will provide its marketing package, signage and a two-sided flyer. Any
additional advertising and promotion will be done at Owner’s (or Owner JV’s)
expense pursuant to a program and budget agreed upon by Owner and Manager.

 

 

C.

Payments. Manager will pay such other reimbursable expenses and costs as Owner
has approved and deems advisable or necessary for the efficient and economic
leasing of the Properties.

 

 

D.

Coordination with Property Manager. To the extent Manager is not also the
property manager performing the functions described in Section 2.4, Manager will
coordinate and cooperate with the property manager of the respective
Property(ies) to ensure the full leasing and efficient operation of the
Properties.

 

13

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E.

Other Actions. Manager will take such other action and perform such other
functions as Manager or Owner deems reasonably advisable or necessary for the
efficient and economic leasing of the Properties.

 

 

2.6.

Specific Duties as Construction Manager. Manager’s duties as construction
manager for any of the Properties indicated on a Property Amendment (and only
such Properties) as being subject to the construction management services as
provided herein include the following:

 

 

A.

General.

 

 

(1)

The Manager shall secure or assist in securing all licenses, registrations, or
permits required by law and shall comply with all ordinances, laws, orders,
codes, rules, and regulations pertaining to building of an Improvement or the
services described herein.

 

 

(2)

In the event a project is suspended for a period of more than thirty (30) days,
Manager shall have the right to re-assign the personnel managing such project to
other projects, and upon resumption of the project, Manager shall be given a
reasonable amount of time to assign new personnel to the management of the
project. In addition, the compensation of Manager shall be equitably adjusted to
account for the suspension of services. If the project is abandoned at any time
for any reason, Owner shall give Manager written notice of such decision, and
Owner shall pay Manager for amounts due under this Agreement through the date of
abandonment, and for any costs, expenses and damages incurred by Manager as a
result of the abandonment of the project.

 

 

B.

Duties with Respect to New Construction, Tenant Improvements, and
Redevelopments. Manager will perform the following duties for construction of
Improvements on undeveloped land (“New Construction”) and for construction of
Improvements that are to be made at the direction of, or in conformity with
Lease obligations to, tenants (“Tenant Improvements”) or for the improvement to
Improvements that change the size or nature of such Improvements or for the
redevelopment of Improvements (collectively, “Redevelopments”):

 

 

(1)

Provide updated and detailed project budgets to Owner.

 

 

(2)

Arrange for, coordinate, supervise and advise Owner with respect to the
selection of architects, contractors, design firms and consultants, and the
execution of design, construction and consulting contracts.

 

 

(3)

Review design documents, and drafts thereof, submitted by the architect or other
consultants, and notify Owner in writing of any mistakes, errors or omissions
that Manager observes in the documents and any recommendations it may have with
respect to such mistakes, errors or omissions.

 

14

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(4)

Evaluate and make recommendations to Owner concerning cost estimates prepared by
others.

 

 

(5)

Review and evaluate proposed schedules for construction.

 

 

(6)

Procure subcontractors through a minimum of three quotes for any jobs estimated
to involve in excess of $50,000.

 

 

(7)

Coordinate the work of subcontractors.

 

 

(8)

Monitor the progress of construction.

 

 

(9)

Endeavor to identify any deficiencies in the work performed by subcontractors.

 

 

(10)

Provide Owner with monthly written status reports.

 

 

(11)

Advise Owner with respect to alterations and modifications in any design
documents submitted by the architect or other consultants that may be in Owner’s
interest, including obtaining advantages in terms of cost savings, scheduling,
leasing, operation and maintenance issues and other matters affecting the
overall benefit of the project.

 

 

(12)

Review and advise Owner on change order proposals and requests for additional
services submitted to Owner.

 

 

(13)

Schedule, coordinate, and attend necessary or appropriate project meetings.

 

 

(14)

Monitor and coordinate punch list preparation and resolution by the
subcontractors.

 

 

(15)

Make recommendations to Owner concerning, and monitor, the use of the site by
subcontractors, particularly as it relates to staging and storage, ingress and
egress, temporary signage, fencing, barricades, restrictions on hours of
operation, safety considerations and similar considerations.

 

 

(16)

Coordinate, monitor, supervise and advise Owner with respect to preparation,
execution, completion and filing of project-related documents, including, but
not limited to, contracts, permit applications, licenses, certifications, zoning
requirements, land use restrictions, governmental filings applicable to the
Project and any other similar documents.

 

15

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(17)

Review and advise Owner with respect to draw requests submitted on the project.

 

 

(18)

Upon completion of construction, walk the completed New Construction, Tenant
Improvements, or Redevelopments with Owner to ensure that everything has been
completed in accordance with the specifications. Manager shall cause the
subcontractors to repair or replace any items that are determined to be
deficient during this walk.

 

 

(19)

As instructed by Owner, perform additional related project management functions.

 

 

(20)

Collect warranties and operation manuals, certificates, guarantees, as-builts
and any similar documentation for the benefit of Owner or Owner JV (as
appropriate).

 

 

C.

Duties with Respect to New Construction and Redevelopments. Manager will perform
the following duties with respect to New Construction and Redevelopments:

 

 

(1)

Provide Owner with a budget for each Improvement to be built prior to beginning
construction of the respective Improvement.

 

 

(2)

Meet on a regular basis with Owner’s leasing agents and representatives of
prospective tenants.

 

 

(3)

Arrange for, coordinate, supervise and advise Owner with respect to various
development services prior to design and construction of the Project, including
due diligence, site investigations, land use and zoning matters, and similar
development services.

 

 

D.

Duties with Respect to Tenant Improvements. Manager will perform the following
duties related to Tenant Improvements:

 

 

(1)

Arrange for and supervise the performance of all installations and improvements
in space leased to any tenant which are either expressly required under the
terms of a Lease of such space or which are customarily provided to tenants.

 

 

(2)

Meet with tenants and prospective tenants and their architects, engineers,
consultants and contractors to facilitate design and construction of leasehold
improvements.

 

 

(3)

Maintain separate files as to each tenant, and thereby document the entire
design and construction process for each tenant.

 

 

(4)

Compile and disseminate such data regarding each tenant as Owner may reasonably
require.

 

16

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E.

Duties with Respect to Tenant Directed Improvements. Manager will perform the
following duties for construction of Improvements that are to be made by or
under the supervision of tenants (“Tenant Directed Improvements”)

 

 

(1)

Schedule, coordinate, and attend necessary or appropriate project meetings.

 

 

(2)

Review and evaluate lease exhibit language that identifies the scope and nature
of tenant construction of the Tenant Directed Improvements.

 

 

(3)

Meet with tenants and prospective tenants and their architects, engineers,
consultants and contractors to facilitate design and construction of Tenant
Directed Improvements.

 

 

(4)

Review tenant construction documents for compliance with landlord criteria and
requirements applicable to the Tenant Directed Improvements.

 

 

(5)

Review and evaluate proposed schedules for tenant construction.

 

 

(6)

Coordinate delivery of shell space to tenants for construction of Tenant
Directed Improvements.

 

 

(7)

Observe tenant construction with attention to adherence of actual construction
with construction documents.

 

 

(8)

Evaluate and make recommendations to Owner concerning the coordination of tenant
work and any landlord work.

 

 

(9)

Make recommendations to Owner concerning, and monitor, the use of the site by
tenant contractors, particularly as it relates to staging and storage, ingress
and egress, temporary signage, fencing, barricades, restrictions on hours of
operation, safety considerations and similar considerations.

 

 

(10)

Monitor the progress of tenant construction, and verify such key aspects of
tenant construction such as compliance with scheduling requirements, compliance
with rules and regulations of Owner, verifying the tenant has obtained proper
permits, etc.

 

 

(11)

Serve as an information conduit to Owner from the tenants’ consultants and
contractors when questions arise as to matters at the project site, and ensure
that questions and issues are being addressed in a timely manner.

 

17

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(12)

Ensure that tenant design and construction properly ties into building systems
and does not adversely affect their proper operation.

 

 

(13)

Review and make recommendations to Owner concerning any requests by tenants for
draws against allowances established by Owner or Owner JV.

 

 

(14)

Maintain separate files as to each tenant, and thereby document the entire
design and construction process for each tenant.

 

 

(15)

Compile and disseminate such data regarding each tenant as Owner may reasonably
require.

 

3.

Expenses.

 

 

3.1.

Owner’s and Owner JV’s Expenses. Except as otherwise specifically provided, all
costs and expenses incurred hereunder by Manager in fulfilling its duties to
Owner and Owner JV shall be for the account of and on behalf of Owner and Owner
JV. Such costs and expenses may include reasonable wages and salaries and other
employee-related expenses of all on-site and off-site employees of Manager who
are engaged in the operation, management, maintenance, leasing, construction, or
access control of the Properties, including taxes, insurance and benefits
relating to such employees, and legal, travel and other out-of-pocket expenses
which are directly related to the management of specific Properties. Manager
shall also allocate a portion of its office, administrative and supplies expense
to the extent directly related to the foregoing reimbursable expenses. All costs
and expenses for which Owner or Owner JV is responsible under this Agreement
shall be paid by Manager out of an Account. In the event said account does not
contain sufficient funds to pay all said expenses, Owner or Owner JV shall fund
all sums necessary to meet such additional costs and expenses.

 

 

3.2.

Manager’s Expenses. Manager shall, out of its own funds, pay all of its general
overhead and administrative expenses not allocable pursuant to the second or
third sentence of the preceding Section 3.1.

 

4.

Manager’s Compensation. For the services provided related to each Property
included on a Property Amendment, Owner will pay Manager a fee (collectively,
the “Management Fees”) as provided in this Section 4.

 

 

4.1.

Property Management Fee. For each Property for which Manager provides property
management services, Owner shall pay Manager a management fee as set forth in
the Property Amendment which will be based on the gross monthly income actually
collected from each Property for the preceding month. For all purposes hereof,
“gross monthly income” shall mean the total gross monthly collections received
from a Property, including, without limitation, rents (and any interest or
penalties accrued thereon), and miscellaneous gross income items of Owner, as
applicable; provided, however, “gross monthly income” specifically excludes:

 

 

A.

Interest paid on any depository accounts, including all Accounts and any
Accounts holding security deposits;

 

18

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B.

Security deposits unless and not until such deposits are applied as rental
income upon termination of a lease;

 

 

C.

Parking revenues when a third party operator is engaged, sales taxes, taxes paid
in lieu of ad valorem taxes, and termination payments, except to the extent of
previously uncollected rent or termination payments based in part on and to the
extent of the remaining rent payable pursuant to a lease terminated prior to its
stated expiration date;

 

 

D.

Imputed revenue related to employee occupied Improvements or spaces and space
allocated or utilized for administrative purposes such as office use or model
Improvements;

 

 

E.

Rents paid in advance of the due date until the month in which such payments are
to apply as rental income;

 

 

F.

Monies collected for any capital items that are paid by tenants (such as tenant
finish or other improvements); and

 

 

G.

Proceeds from a sale, refinancing, condemnation, hazard or liability insurance,
title insurance, tax abatement awards of all or any portion of a Property, other
than rental loss insurance payments.

Unless otherwise directed by Owner, Manager shall be entitled to withdraw its
compensation pursuant to this Section directly from an Account monthly in
arrears, on the tenth (10th) day of each calendar month, except for the
reporting period during which this Agreement is terminated, in which case Owner
will pay Manager the prorated fees due to Manager for the month of termination.

 

 

4.2.

Leasing Commissions. For each Property for which Manager provides leasing agent
services, Owner shall pay Manager fees as follows:

 

 

A.

Initial Lease-Up Fee. Manager shall be entitled to receive a separate fee for
the one-time initial rent-up or leasing-up of New Construction in an amount not
to exceed one-month’s rent. For this purpose, a Redevelopment constituting a
total rehabilitation shall be included in the term “New Construction.”

 

 

B.

Leasing Commissions.

 

 

(1)

New Lease Commission. For each Property for which Manager serves as leasing
agent, Owner will pay Manager, for each new

 

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tenant lease entered into during the term hereof, a commission equal to the
percentage specified in the related Property Amendment of the Net Rent payable
during the term (not to exceed ten (10) years). No commission shall be payable
as to any portion of the initial term beyond ten (10) years. As used herein,
“Net Rent” is defined as the total base rental and operating expenses (but
excluding future increases in operating expenses) actually to be paid to Owner
or Owner JV (as appropriate) by the tenant during the applicable term of the
lease; and the calculation of the total base rental specifically incorporates,
at a value of zero, any installments of base rental that the tenant is not
required to pay as an inducement to enter into the lease (i.e. free rent).
Payments shall be as negotiated between Owner and Manager and as set forth on
the Property Amendment.

 

 

(2)

Renewal Commissions. Owner shall pay to Manager a commission equal to the
percentage specified in the related Property Amendment of the Net Rent to be
paid by the tenant during the term of any renewal or extension of any tenant
lease; provided, however, that no commission shall be payable as to any portion
of such renewal or extension term beyond ten (10) years. For purposes of this
subsection 4.2.B(2), a renewal shall include (i) a renewal of any tenant lease
in a Property pursuant to a new agreement that is executed during the term of
this Agreement and (ii) a renewal of an existing tenant lease pursuant to a new
agreement that is executed during the term of this Agreement and prior to the
expiration of the term of the existing tenant lease. Renewal commissions shall
be paid out within thirty (30) days of the execution of the applicable renewal
or extension.

 

 

(3)

Expansion Commissions. Owner shall pay to Manager a commission equal to the
percentage specified in the related Property Amendment of the Net Rent to be
paid by the tenant with respect to expansion space in a Property for the
remaining portion of the initial lease term; provided, however, that no
commission shall be payable as to any portion of the remainder of such lease
term beyond ten (10) years. For purposes of this subsection 4.2.B(3), an
expansion shall include (i) an expansion of any tenant lease in the Property
pursuant to a new agreement that is executed during the term of this Agreement
and (ii) an expansion of an existing tenant lease pursuant to a new agreement
that is executed during the term of this Agreement and prior to the expiration
of the term of the existing tenant lease. Expansion commissions shall be paid
out within thirty (30) days of the execution of such expansion.

 

 

(4)

Co-Brokerage. As the exclusive leasing agent for the Properties, Manager shall
cooperate with any independent, affiliated or non-affiliated licensed real
estate brokers or agents and may offer co-

 

20

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agency but not sub-agencies with respect to the leasing of the Properties.
Notwithstanding any language to the contrary contained in this Section 4.2
providing for a fee or commission to be paid to Manager, in the event that any
such independent, affiliated or non-affiliated brokers participates, in good
faith (and has a rightful claim to a brokerage commission), as a procuring cause
of a tenant lease or any renewal, extension, expansion or other modification of
any tenant lease with respect to which Manager would otherwise be due a
commission pursuant to subsections 4.2.B(1) through 4.2.B(3), above (such broker
or agent being hereinafter referred to as “Co-Agent”), then the commission
payable by Owner shall only be as set forth on the Property Amendment under
“Co-Brokerage Commissions.” Any such commissions shall be shared between Manager
and Co-Agent as they shall agree.

 

 

C.

Pending Leases. Within fifteen (15) days after the expiration or earlier
termination of this Agreement, Manager shall deliver to Owner a list of all
parties to whom Manager has presented a bona fide “Letter of Proposal” or has
otherwise taken substantial and material steps evidenced in a manner acceptable
to Owner, in Owner’s reasonable discretion, with respect to a good faith effort
to enter into a lease at a Property during the term of this Agreement regarding
the possible leasing of space in a Property, or a possible renewal, extension or
of any existing tenant lease covering space in a Property. Owner agrees that it
will pay the commission that would otherwise be due in accordance with
Section 4.2.B hereof in the event Owner or its successor or assign enters into
any lease with any tenant validly included in Manager’s list or any affiliate
thereof, or enters into any renewal, extension or expansion of an existing
tenant lease included in Manager’s list so long as negotiations commence and are
a final written agreement is executed by all necessary parties during one
hundred eighty (180) days after such expiration or termination of this
Agreement. Owner covenants and agrees that it shall not delay entering into any
lease, or any renewal, extension or expansion thereof, for the purpose of
depriving Manager of any commission due Manager pursuant to this Section 4.2.C.

 

 

4.3.

Construction Management Fees. For each Property for which Manager provides
construction management services, Manager shall be entitled to fees as follows:

 

 

A.

Tenant Directed Improvements. For planning and coordinating the construction of
any tenant directed improvements pursuant to lease concessions in new leases or
lease renewals, including tenant-paid finish-out or improvements, Manager shall
be entitled to receive from Owner or Owner JV that portion of such lease
concessions as are specified in such lease or lease renewal, subject to a limit
of 5% of such lease concessions, and, in addition, Owner or Owner JV shall
ensure that any lease or lease renewal contains a provision requiring tenant to
pay Manager the same percentage for any tenant-paid finish-out or improvements
not covered by such lease concessions (i.e., paid by tenant).

 

21

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B.

Other Management Fees for Construction Management Services. The Owner agrees to
pay Contractor a management fee as specified in the appropriate Property
Amendment.

 

 

4.4.

Audit Adjustment. If any audit of the records, books or accounts relating to the
Properties discloses an overpayment or underpayment of Management Fees, Owner,
Owner JV, or Manager shall promptly pay to the other party the amount of such
overpayment or underpayment, as the case may be. If such audit discloses an
overpayment of Management Fees for any fiscal year of more 10% of the correct
aggregate Management Fees for such fiscal year, Manager shall bear the cost of
such audit.

 

5.

Insurance And Indemnification.

 

 

5.1.

Insurance to be Carried.

 

 

A.

Manager shall obtain and keep in full force and effect at Owner’s or Owner JV’s
expense insurance (1) on the Properties and (2) on activities at the properties
against such hazards as Owner and Manager shall deem appropriate. In any event,
Manager shall procure, for the Properties for which Manager is property manager,
insurance sufficient to comply with the Leases and the Ownership Agreements. All
liability policies shall provide sufficient insurance satisfactory to both Owner
and Manager and shall contain waivers of subrogation for the benefit of Manager
and the applicable Owner or Owner JV.

 

 

B.

Manager shall obtain and keep in full force and effect, in accordance with the
laws of the state in which each Property is located, worker’s compensation
insurance covering all employees of Manager at the Properties and all persons
engaged in the performance of any work required hereunder. Manager shall also
obtain and keep in full force and effect, in accordance with the laws of the
state in which each Property is located, employer’s liability, employee theft,
commercial general liability, and umbrella insurance, and Manager shall furnish
Owner certificates of insurers naming Advisor, Owner and/or Owner JV as
co-insureds and evidencing that such insurance is in effect. If any work under
this Agreement is subcontracted as permitted herein, Manager shall include in
each subcontract a provision that the subcontractor shall also furnish Advisor,
Owner and/or Owner JV, as appropriate, with such a certificate evidencing
coverage (and any other coverage Manager deems appropriate in the circumstances)
and the naming of Advisor, Owner and/or Owner JV as co-insureds and evidencing
that such insurance is in effect, as well as indemnification as is customary in
the discretion of Manager. The cost of such insurance procured by Manager shall
be reimbursable to the same extent as provided in Section 3.1.

 

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5.2.

Cooperation with Insurers. Manager shall cooperate with and provide reasonable
access to the Properties to representatives of insurance companies and insurance
brokers or agents with respect to insurance which is in effect or for which
application has been made. Manager shall use its best efforts to comply with all
requirements of insurers.

 

 

5.3.

Accidents and Claims. With respect to Properties for which Manager is property
manager, and with respect to Properties for which manager is construction
manager, Manager shall promptly investigate and shall report in detail to Owner
and insurance carriers as applicable all accidents, claims for damage relating
to the ownership, operation or maintenance of the Properties, and any damage or
destruction to the Properties and the estimated costs of repair thereof, and
shall prepare for approval by Owner all reports required by an insurance company
in connection with any such accident, claim, damage, or destruction. Such
reports shall be given to Owner promptly and any report not so given within 10
days after the occurrence of any such accident, claim, damage or destruction
shall be noted in the monthly report delivered to Owner pursuant to
Section 2.4.P(1). Manager is authorized to settle any claim against an insurance
company arising out of any policy and, in connection with such claim, to execute
proofs of loss and adjustments of loss and to collect and receipt for loss
proceeds.

 

 

5.4.

Indemnification.

 

 

A.

Wells OP II shall indemnify and hold harmless Manager and its Affiliates,
including their respective officers, directors, partners and employees, from all
liability, claims, damages or losses arising in the performance of their duties
hereunder, and related expenses, including reasonable attorneys’ fees, to the
extent such liability, claims, damages or losses and related expenses are not
fully reimbursed by insurance, subject to any limitations imposed by the laws of
the State of Delaware, the limited partnership agreement of Wells OP II, or as
specifically provided otherwise in this Agreement. Notwithstanding the
foregoing, Manager shall not be entitled to indemnification or be held harmless
pursuant to this Section 5.4.A for any activity for which Manager shall be
required to indemnify or hold harmless Wells OP II pursuant to Paragraph 5.4.B
or pursuant to another specific provision of this Agreement. Any indemnification
of Manager may be made only out of the net assets of Wells OP II and not from
the partners of Wells OP II.

 

 

B.

The Manager shall indemnify and hold harmless Owner and Owner JV from contract
or other liability, claims, damages, taxes or losses and related expenses
including attorneys’ fees, to the extent that such liability, claims, damages,
taxes or losses and related expenses are not fully reimbursed by insurance and
are incurred by reason of Manager’s bad faith, fraud, willful misfeasance,
misconduct, reckless disregard of its duties, gross negligence, or material
breaches of this Agreement.

 

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6.

Term, Termination.

 

 

6.1.

Term. This Agreement shall commence on the date first above written and shall
continue until terminated in accordance with the earliest to occur of the
following:

 

 

A.

One year from the date of the commencement of the term hereof. However, this
Agreement will be automatically extended for an additional one-year period at
the end of each year unless Owner or Manager gives sixty (60) days written
notice of its intention to terminate the Agreement;

 

 

B.

Sixty (60) days after prior written notice of intention to terminate the
Agreement given by Owner or Manager; or

 

 

C.

Immediately upon the occurrence of any of the following:

 

 

(1)

A decree or order is rendered by a court having jurisdiction (A) adjudging
Manager as bankrupt or insolvent, or (B) approving as properly filed a petition
seeking reorganization, readjustment, arrangement, composition or similar relief
for Manager under the federal bankruptcy laws or any similar applicable law or
practice, or (C) appointing a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of Manager or a substantial part of the property of
Manager, or for the winding up or liquidation of its affairs, or

 

 

(2)

Manager (A) institutes proceedings to be adjudicated a voluntary bankrupt or an
insolvent, (B) consents to the filing of a bankruptcy proceeding against it,
(C) files a petition or answer or consent seeking reorganization, readjustment,
arrangement, composition or relief under any similar applicable law or practice,
(D) consents to the filing of any such petition, or to the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency for it
or for a substantial part of its property, (E) makes an assignment for the
benefit of creditors, (F), is unable to or admits in writing its inability to
pay its debts generally as they become due unless such inability shall be the
fault of Owner or Owner JV, or (G) takes corporate or other action in
furtherance of any of the aforesaid purposes.

Upon termination, the obligations of the parties hereto shall cease, provided
that Manager shall comply with the provisions hereof applicable in the event of
termination and shall be entitled to receive all compensation which may be due
Manager up to the date of such termination and as may otherwise be provided in
this Agreement, and provided, further, that if this Agreement terminates
pursuant to Section 6.1.C above, Owner shall have other remedies as may be
available at law or in equity.

 

 

6.2.

Manager’s Obligations after Termination. Upon the termination of this Agreement
or upon partial termination of this Agreement with respect to certain

 

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Properties, Manager shall have the following duties (and in the case of a
partial termination, references to “Properties” mean only those Properties that
are being removed from the scope of this Agreement):

 

 

A.

Manager shall deliver to Owner, or its designee, all books and records
(including data files in magnetic or other similar storage media but
specifically excluding any licensed software) with respect to the Properties.

 

 

B.

Manager shall transfer and assign to Owner (or Owner JV, if applicable), or its
designee, all service contracts and personal property relating to or used in the
operation and maintenance of the Properties, except personal property paid for
and owned by Manager. Manager shall also, for a period of sixty (60) days
immediately following the date of such termination, make itself available to
consult with and advise Owner, or its designee, regarding the operation,
maintenance and leasing of the Properties.

 

 

C.

Manager shall render to Owner an accounting of all funds of Owner and Owner JV
in its possession and shall deliver to Owner a statement of Management Fees
claimed to be due Manager and shall cause funds of Owner and Owner JV held by
Manager relating to the Properties to be paid to Owner and Owner JV or their
designees and shall assist in the transferring of approved signatories on all
Accounts.

 

7.

Miscellaneous.

 

 

7.1.

Notices. All notices, approvals, consents and other communications hereunder
shall be in writing, and, except when receipt is required to start the running
of a period of time, shall be deemed given when delivered in person or on the
fifth day after its mailing by either party by registered or certified United
States mail, postage prepaid and return receipt requested, to the other party,
at the addresses set forth after their respect name below or at such different
addresses as either party shall have theretofore advised the other party in
writing in accordance with this Section 7.1.

 

Owner:

  

WELLS OPERATING PARTNERSHIP II, L.P.

  

C/O WELLS REAL ESTATE INVESTMENT TRUST II, INC.

  

6200 The Corners Parkway, Suite 250

  

Norcross, Georgia 30092

  

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

  

6200 The Corners Parkway, Suite 250

  

Norcross, Georgia 30092

With copy to Advisor:

  

WELLS CAPITAL, INC.

  

Attn: Managing Director, Asset Management

  

6200 The Corners Parkway, Suite 250

  

Norcross, Georgia 30092

 

25

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Manager:

  

WELLS REAL ESTATE ADVISORY SERVICES, INC.

  

Attn: Managing Director, Property Services

  

6200 The Corners Parkway, Suite 250

  

Norcross, Georgia 30092

Advisor:

  

WELLS CAPITAL, INC.

  

Attn: Managing Director, Asset Management

  

6200 The Corners Parkway, Suite 250

  

Norcross, Georgia 30092

 

 

7.2.

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

 

 

7.3.

Assignment. Manager may delegate partially or in full its duties and rights
under this Agreement but only with the prior written consent of Owner. Except as
provided in the immediately preceding sentence, this Agreement shall be binding
upon and shall inure to the benefit of the parties and their respective
successors and assigns. No consent will be required in the event that this
Agreement is transferred, assigned or otherwise conveyed by merger or otherwise
by operation of law.

 

 

7.4.

No Waiver. The failure of Owner to seek redress for violation or to insist upon
the strict performance of any covenant or condition of this Agreement shall not
constitute a waiver thereof for the future.

 

 

7.5.

Amendments. This Agreement may be amended only by an instrument in writing
signed by the party against whom enforcement of the amendment is sought.

 

 

7.6.

Headings. The headings of the various subdivisions of this Agreement are for
reference only and shall not define or limit any of the terms or provisions
hereof.

 

 

7.7.

Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, and it shall not be necessary in making
proof of this Agreement to produce or account for more than one such
counterpart.

 

 

7.8.

Entire Agreement. This Agreement and the related Property Amendments and
Exhibits hereto contains the entire understanding and all agreements between
Owner, Owner JV and Manager respecting the management of the Properties. There
are no representations, agreements, arrangements or understandings, oral or
written, between Owner, Owner JV and Manager relating to the management of the
Properties that are not fully expressed herein.

 

 

7.9.

Disputes. If there shall be a dispute between Owner, Owner JV and Manager
relating to this Agreement resulting in litigation, the prevailing party in such

 

26

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litigation shall be entitled to recover from the other party to such litigation
such amount as the court shall fix as reasonable attorneys’ fees.

 

 

7.10.

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

 

 

7.11.

Other Activities of Manager. Nothing herein contained shall prevent Manager from
engaging in other activities or business ventures, whether or not such other
activities or ventures are in competition with Owner or Owner JV or the business
of Owner or Owner JV, including, without limitation, property management and
leasing activities for other Persons (including with respect to properties owned
by Affiliates of Manager and properties owned by third parties); nor shall this
Agreement limit or restrict the right of any director, officer, employee, or
stockholder of Manager or its Affiliates to engage in any other business or to
render services of any kind to any other partnership, corporation, firm,
individual, trust or association.

[Signatures appear on next page]

 

27

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In Witness Whereof, the parties have executed this Property Management, Leasing
and Asset Management Agreement as of the date first above written.

 

WELLS REIT II:

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

By:

   

Name:

   

Title:

   

OWNER:

WELLS OPERATING PARTNERSHIP II, L.P.

By:

 

Wells Real Estate Investment Trust II, Inc. (as

General Partner of Wells Operating Partnership II, L.P.)

 

By:

     

Name:

     

Title:

   

WELLS REAL ESTATE INVESTMENT TRUST II, INC.

 

By:

     

Name:

     

Title:

   

ADVISOR

WELLS CAPITAL, INC.

 

By:

     

Name:

     

Title:

   

MANAGER:

WELLS REAL ESTATE ADVISORY SERVICES, INC.

By:

   

Name:

   

Title:

   

--------------------------------------------------------------------------------

Exhibit A

Additional Accounting Policies

--------------------------------------------------------------------------------

Exhibit B

Monthly Reporting Package Contents

For the current month and year to date, statements presenting, on a comparative
basis, actual to budget (and/or forecast or other projections), including
variance explanations for material variances:

 

1.

Executive Summary (operations, leasing, capital, tenant/market issues, other)

 

2.

Balance Sheet

 

3.

Income Statement

 

4.

Trial Balance - Month Activity

 

5.

Trial Balance - YTD Balances

 

6.

General Ledger

 

7.

Copies of all bank statements & reconciliations.

 

8.

Aged Receivables and Delinquencies Report

 

9.

Check Register

 

10.

Rent Roll

 

11.

Schedule of Capital Additions.

 

12.

Schedule of Depreciation

 

13.

Schedule of Tenant Security Deposits

 

14.

Support Schedules for Asset & Liability accounts (Accrued Receivables, Prepaid
Expenses, Other Assets, Accrued Operating Expenses, Accrued Real Estate Taxes,
Accrued Interest, Other Liabilities, etc.)

 

15.

MTD & YTD variance report with explanations

 

16.

All reports should be provided using the Wells Chart of Accounts

 

17.

List of any material accrual adjustment that may have been missed on the last
business day of each month

--------------------------------------------------------------------------------

Exhibit C

Quarterly Reporting Package

 

1.

All items in the monthly reporting package with quarterly variances and
explanations of material variances;

 

2.

Rental collection record;

 

3.

Quarterly operating statement;

 

4.

Copy of cash disbursements ledger entries for such period, if requested;

 

5.

Copy of cash receipts ledger entries for such period, if requested;

 

6.

The original copies of all contracts entered into by Manager on behalf of Owner
or Owner JV during such period, if requested; and

 

7.

Copy of ledger entries for such period relating to security deposits maintained
by Manager, if requested.

Reforecast information is due to Owner within 35 days after each quarter end as
follows:

 

Quarter

   Due Date

1st Quarter reforecast

  

February 5

2nd Quarter reforecast

  

May 5

3rd Quarter reforecast

  

August 5

4th Quarter reforecast

  

November 5

--------------------------------------------------------------------------------

Form of Property Amendment

Property Description:
_________________________________________________________________

____________________________________________________________________________________

_____________________________________________________________________________________

Services to be Provided:

 

¨

Property management Services as specified in Section 2.4 of the Property
Management, Leasing, and Construction Management Agreement except as specified
below:

__________________________________________________________________________________

___________________________________________________________________________________

___________________________________________________________________________________

Reserve for Property $                     (per Section 2.4.K(1)(d) of
Agreement)

Maintenance or repair costs threshold (if other than $10,000):
$                     (per Section 2.4.E(3))

Maintenance supplies aggregate purchase price threshold (if other than $5,000):
$                     (per Section 2.4.E(4))

 

¨

Leasing Agreement duties as specified in Section 2.5 of the Property Management,
Leasing, and Construction management Agreement except as specified below:

______________________________________________________________________________________

______________________________________________________________________________________

______________________________________________________________________________________

 

¨

Construction Management Services as specified in Section 2.6 of the Property
Management, Leasing, and Construction Management Agreement except as specified
below. In particular, the construction management will include the following
(add attachments as necessary):

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

__________________________________________________________________________________

--------------------------------------------------------------------------------

Property Amendment (continued)

Fees

 

¨

Property Management Fee:                     %, as specified in Section 4.1

 

¨

Property Management Fee (other calculation):
                                             

 

¨

Leasing Agreement Fees:

 

 

¨

Lease Up Fee:                     

 

 

¨

New Lease Commission Percentage (see Section 4.2.B(1)):                     

 

 

¨

Renewal Commission Percentage (see Section 4.2.B(2)):                     

 

 

¨

Expansion Commission Percentage (see Section 4.2.B(3)):                     

 

 

¨

Co-Brokerage Commissions (see Section 4.2.B(4)):
___________________________________

_____________________________________________________________________________

_______________________________________________________________________________

 

 

¨

Payment terms (if other than specified in Section 4.2):                     

 

¨

Construction management Fees:

_______________________________________________________________________________________

________________________________________________________________________________________

_________________________________________________________________________________________

_________________________________________________________________________________________

Examples:

 

¨

The Owner agrees to pay Manager a management fee in the amount of
$                     within fifteen (15) days of acceptance of the Improvement
by Owner.

 

¨

As payment for the services to be performed by Manager hereunder, Owner shall
pay Manager a fee of                      ($                    ), to be paid on
the first day of each month of the term of the project in equal monthly
installments of                      ($                    ), plus reimbursable
expenses referenced in Section 3 of this Agreement.

 

¨

Manager agrees to collect and provide Owner with invoices for the work completed
on the Improvement on a monthly basis unless Owner and Manager agree to a more
frequent basis. Upon delivery of such invoices, Owner will be solely responsible
for promptly paying the company or companies performing the work. The contract
form used by Owner shall specify that Manager has no responsibility for payment.
Reimbursable expenses as described in Section 3 of this Agreement shall be
reimbursed to Manager at cost plus ten percent (10%) and shall be billed on a
monthly basis.