Exhibit 10.1

 

Confidential Treatment Requested.

Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

EXECUTION VERSION

 

 

 

MASTER MODIFICATION AGREEMENT

 

DATED AS OF AUGUST 31, 2012

 

by and among

 

BEHRINGER HARVARD REIT I, INC.,

 

BEHRINGER HARVARD REIT I SERVICES HOLDINGS, LLC,

 

BEHRINGER ADVISORS, LLC,

 

and

 

HPT MANAGEMENT SERVICES, LLC

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE I DEFINITIONS

2

 

 

ARTICLE II PURCHASE AND SALE OF ASSETS AND STOCK; CLOSING

11

SECTION 2.1

Purchase and Sale of Assets

11

SECTION 2.2

Waiver of Non-Solicit/Non-Hire Provisions with respect to the Specified
Employees

12

SECTION 2.3

Purchase and Sale of Series A Preferred Stock; Preferred Stock Closing;
Cancellation of Existing Convertible Shares

13

SECTION 2.4

Closing Payments; Waived Fees

14

SECTION 2.5

Closing; Closing Deliverables

15

 

 

ARTICLE III REPRESENTATIONS AND WARRANTIES OF REIT I

15

SECTION 3.1

Organization and Qualification

15

SECTION 3.2

Capitalization

15

SECTION 3.3

Issuance of Securities

16

SECTION 3.4

Authority; Approvals

16

SECTION 3.5

Litigation

17

SECTION 3.6

Brokers and Finders

17

 

 

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SERVICE PROVIDERS

18

SECTION 4.1

Organization

18

SECTION 4.2

Authority; Approvals

18

SECTION 4.3

Existing Convertible Shares

18

SECTION 4.4

Litigation

18

SECTION 4.5

No Infringement or Misappropriation

19

SECTION 4.6

Title to Purchased Assets

19

SECTION 4.7

Brokers and Finders

19

SECTION 4.8

Noncontravention

19

 

 

ARTICLE V SPECIFIED EMPLOYEE MATTERS

20

SECTION 5.1

Employees and Offers of Employment

20

SECTION 5.2

Paid Time Off; Other Leave

20

SECTION 5.3

Severance Obligations

21

SECTION 5.4

Employee Benefit Plans

21

SECTION 5.5

No Third Party Beneficiaries

23

 

 

ARTICLE VI ADDITIONAL AGREEMENTS

23

SECTION 6.1

Reservation of REIT I Common Stock

23

SECTION 6.2

Public Statements; SEC Filings

23

SECTION 6.3

Confidentiality

24

SECTION 6.4

Behringer Nominees

25

 

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SECTION 6.5

Status of the Existing Advisory Agreement

26

SECTION 6.6

Determination of Estimated Per Share Value

28

SECTION 6.7

Distributions under the LTIP Program

28

SECTION 6.8

Support Services Agreements

29

SECTION 6.9

Tax Matters

29

SECTION 6.10

Requests for Information

30

 

 

ARTICLE VII CLOSING DELIVERIES

30

SECTION 7.1

Closing Deliveries of REIT I

30

SECTION 7.2

Closing Deliveries of Services Holdings and the Service Providers

31

 

 

ARTICLE VIII SURVIVAL AND REMEDY; INDEMNIFICATION

32

SECTION 8.1

Survival

32

SECTION 8.2

Indemnification

32

SECTION 8.3

Limitations

36

SECTION 8.4

Contribution

37

SECTION 8.5

Exclusivity

38

SECTION 8.6

Insurance Coverage

38

 

 

ARTICLE IX GENERAL PROVISIONS

39

SECTION 9.1

Notices

39

SECTION 9.2

Interpretation

40

SECTION 9.3

Choice of Law; Venue

41

SECTION 9.4

Disputes

41

SECTION 9.5

Entire Agreement

41

SECTION 9.6

Amendment

42

SECTION 9.7

Waiver

42

SECTION 9.8

Remedies

42

SECTION 9.9

Severability

43

SECTION 9.10

Relationship of REIT I and the Behringer Group

43

SECTION 9.11

Further Assurances

43

SECTION 9.12

LIMITATIONS ON REPRESENTATIONS AND WARRANTIES

43

SECTION 9.13

Parties in Interest; No Third-Party Beneficiaries

45

SECTION 9.14

Successors and Assigns

45

SECTION 9.15

No Presumption Against Drafter

45

SECTION 9.16

Disclaimer

45

SECTION 9.17

Series A Preferred Stock Sample Conversion Calculations

45

SECTION 9.18

Counterparts

46

SECTION 9.19

Facsimile Signatures

46

 

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EXHIBITS

 

 

Exhibit A

Existing Advisory Agreement (conformed copy)

Exhibit B

Form of Administrative Services Agreement

Exhibit C

Form of Sixth Amended and Restated Property Management Agreement

Exhibit D

Form of Articles Supplementary (Series A Preferred Stock)

Exhibit E

Form of Registration Rights Agreement

Exhibit F

Form of Consulting Agreement

Exhibit G

Form of License Agreement

Exhibit H

Existing Property Management Agreement (conformed copy)

Exhibit I

Sample Series A Preferred Stock Calculations

 

 

ANNEXES

 

 

Annex I

Specified Advisor Employees

Annex II

Purchased Assets

Annex III

Advisory Fees and Expenses Annex

 

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SCHEDULES

 

Schedule 1.1(a)

Knowledge Persons of Services Holdings and the Service Providers

Schedule 1.1(b)

REIT I Knowledge Persons

Schedule 3.2(b)

Capitalization

Schedule 5.3

Severance Obligations

Schedule 6.4(a)

Acceptable Behringer Nominees

 

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MASTER MODIFICATION AGREEMENT

 

THIS MASTER MODIFICATION AGREEMENT, dated as of August 31, 2012 (this
“Agreement”), is entered into by and among Behringer Harvard REIT I, Inc.
(“REIT I”), Behringer Harvard REIT I Services Holdings, LLC (“Services
Holdings”), Behringer Advisors, LLC (“Advisor”), and HPT Management Services,
LLC (“Property Manager” and together with Advisor, the “Service Providers”).
Terms used herein are defined in Article I.

 

RECITALS

 

WHEREAS, the Board of Directors of REIT I (based upon the recommendation of the
REIT I Special Committee) and each of Services Holdings, Advisor and Property
Manager have approved and declared advisable, upon the terms and subject to the
conditions of this Agreement, the modification of the business relationship
between REIT I and the Service Providers;

 

WHEREAS, upon the terms and subject to the conditions of this Agreement, Advisor
desires to sell and REIT I desires to purchase all of the right, title and
interest of Advisor in, to and under those assets set forth on Annex II hereto
(the “Purchased Assets”);

 

WHEREAS, upon the terms and subject to the conditions of this Agreement, in
consideration for the Transactions (as defined below) the Board of Directors of
REIT I (based upon the recommendation of the REIT I Special Committee) desires
to authorize and issue to Services Holdings and Services Holdings desires to
acquire from REIT I 10,000 shares of Series A participating, voting, convertible
preferred stock, par value $0.0001 per share, of REIT I as described in the
Articles Supplementary (Series A Preferred Stock) in the form attached hereto as
Exhibit D;

 

WHEREAS, upon the terms and subject to the conditions of this Agreement, REIT I
and each of Services Holdings, Advisor and Property Manager desire to enter into
each Ancillary Agreement to which such Person is a party, concurrent with the
execution and Closing of this Agreement (this Agreement and the Ancillary
Agreements and the transactions contemplated hereby and thereby, including
issuance of the Series A Preferred Stock and the exercise of the rights
contemplated by the Articles Supplementary, collectively, the “Transactions”);
and

 

WHEREAS, the Board of Directors of REIT I (based upon the recommendation of the
REIT I Special Committee), including a majority of members of the Board of
Directors of REIT I not otherwise interested in the Transactions directly or
through an Affiliate (as defined in the REIT I Charter), has determined that the
Transactions are in furtherance of and consistent with its business strategy,
that the Transactions are fair and reasonable to REIT I and in the best
interests of its stockholders and that either (x) the price of the Purchased
Assets is no greater than the cost of the Purchased Assets to Advisor and its
Affiliates or (y) that substantial justification exists for the excess of the
price of the Purchased Assets over the cost of the Purchased Assets and such
excess is reasonable.

 

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NOW, THEREFORE, in consideration of the premises and the representations,
warranties, covenants and agreements contained herein, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto (the
“Parties”), intending to be legally bound hereby, agree as follows:

 

ARTICLE I
DEFINITIONS

 

For all purposes of this Agreement, the following terms shall have the following
respective meanings:

 

“Administrative Services Agreement” has the meaning set forth in Section 7.1(b).

 

“Advisor” has the meaning set forth in the Preamble.

 

“Advisory Fees and Expenses” shall mean all fees, expenses, reimbursements and
other amounts payable by REIT I to Advisor pursuant to the Existing Advisory
Agreement.

 

“Advisory Fees and Expenses Annex” has the meaning set forth in Section 2.4(b).

 

“Affiliate” shall mean, except as otherwise provided herein, with respect to any
Person, any other Person which, at the time of determination, directly or
indirectly controls, is controlled by or is under common control with, such
Person. For the purposes of this definition, “control” (including, with
correlative meaning, the terms “controlling,” “controlled by” and “under common
control with”) shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of management and policies of such Person
through the ownership of voting securities, by contract or otherwise. For the
avoidance of doubt, REIT I, BH OP, and their respective Subsidiaries shall not
be considered Affiliates of any member of the Behringer Group, Services
Holdings, Advisor, or Property Manager, and vice versa.

 

“Agreement” has the meaning set forth in the Preamble.

 

“Amended and Restated Property Management Agreement” has the meaning set forth
in Section 7.1(c).

 

“Ancillary Agreements” shall mean the Administrative Services Agreement, Amended
and Restated Property Management Agreement, Registration Rights Agreement,
Consulting Agreement, License Agreement and any other agreement, instrument or
document executed and delivered under this Agreement upon the Closing.

 

“Articles Supplementary” has the meaning set forth in Section 2.3(a).

 

“Behringer 401(k) Plan” has the meaning set forth in Section 5.4(f).

 

“Behringer Deductible” has the meaning set forth in Section 8.3(a).

 

“Behringer FSA Plans” shall mean the flexible spending account plans of the
Behringer Group.

 

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“Behringer Group” shall mean, collectively, (i) Services Holdings, (ii) the
Service Providers, (iii) Behringer Harvard REIT I LTIP, LLC, (iv) Behringer
Harvard Holdings, LLC, and (v) all of their respective Affiliates. For the
avoidance of doubt, REIT I, BH OP, and their respective Subsidiaries shall not
be considered members of the Behringer Group.

 

“Behringer Indemnified Parties” has the meaning set forth in Section 8.2(a).

 

“Behringer Nominees” has the meaning set forth in Section 6.4(a).

 

“Behringer Plans” shall mean, collectively, each plan, program, policy or
Contract providing for compensation, bonuses, pension, retirement, profit
sharing, health, dental, vision, life, disability, severance, termination pay,
performance awards, equity or “profits interests” awards, fringe benefits or
other employee benefits of any kind, if any, including any “employee benefit
plan” within the meaning of Section 3(3) of ERISA, which is sponsored,
maintained, or contributed to by any member of the Behringer Group in which any
Specified Employee participates.

 

“BH OP” shall mean Behringer Harvard Operating Partnership I LP, a Texas limited
partnership.

 

“Bill of Sale” has the meaning set forth in Section 7.1(a).

 

“Business Day” shall mean any day other than a Saturday or a Sunday or a day on
which banks located in Dallas, Texas generally are authorized or required by Law
or regulation to close.

 

“Change of Control” shall mean, with respect to REIT I, any event or series of
related events (including, without limitation, issue, transfer or other
disposition of shares of Equity Interests of REIT I, merger, share exchange or
consolidation) after which (a) any Person is or becomes the “beneficial owner”
(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of
Equity Interests representing greater than 50% of the combined voting power of
the then outstanding Equity Interests of REIT I and (b) the beneficial owners,
directly or indirectly, of Equity Interests of REIT I immediately prior to such
event or series of related events have less than 50% of the combined voting
power of the surviving entity after such event or series of events. In addition,
any event that causes, directly or indirectly, any Person other than REIT I to
become the beneficial owner of greater than 50% of the Equity Interests of BH OP
shall be deemed a Change of Control of REIT I.

 

“Claim” shall mean any threatened, pending or completed claim, action, suit,
litigation, arbitration, alternative dispute resolution mechanism,
investigation, hearing or any other proceeding, whether civil (including
intentional and unintentional tort claims), criminal, administrative,
regulatory, investigative or other, or any inquiry or investigation that might
lead to the institution of any such claim, action, suit, litigation or other
proceeding, whether civil (including intentional and unintentional tort claims),
criminal, administrative, regulatory, investigative or other.

 

“Closing” has the meaning set forth in Section 2.5(a).

 

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“Closing Date” has the meaning set forth in Section 2.5(a).

 

“COBRA” shall mean Consolidated Omnibus Budget Reconciliation Act of 1985.

 

“COBRA Liabilities” has the meaning set forth in Section 5.4(d).

 

“Confidential Material” shall mean information relating to the pricing related
terms under the Administrative Services Agreement (including retention amounts,
per employee costs, and hourly rates (the “Pricing Information”) and any other
mutually agreed information, whether oral, written or otherwise, furnished by a
party hereto (the “Providing Party”) or any directors, officers, partners,
Affiliates, employees, agents, attorneys, advisors, accountants, consultants or
representatives (collectively, “Representatives”) of the Providing Party to
another party hereto (the “Receiving Party”) or any of the Receiving Party’s
Representatives, and all reports, analyses, compilations, studies and other
material prepared by the Receiving Party or any of its Representatives (in
whatever form maintained, whether documentary, computer storage or otherwise)
containing, reflecting or based upon, in whole or in part, any such information.
The term “Confidential Material” shall not include any (i) information that
becomes generally available to the public other than as a result of a disclosure
by the Receiving Party, (ii) Pricing Information that becomes generally
available to the public as a result of disclosure by the Behringer Group after
the date hereof, (iii) information (other than Pricing Information) that becomes
available to the Receiving Party on a non-confidential basis from a source other
than the Providing Party, provided that such source is not known by the
Receiving Party to be bound by a confidentiality agreement with or other
obligation of secrecy to the Providing Party, or (iv) information (other than
Pricing Information) that is independently developed by the Receiving Party
without use of or reference to information from the Providing Party.

 

“Consulting Agreement” has the meaning set forth in Section 7.1(e).

 

“Contract” shall mean any loan agreement, mortgage, indenture, deed of trust,
lease, sublease, contract, covenant, plan, or other agreement, instrument,
arrangement, obligation, understanding or commitment, permit, concession,
franchise or license, whether oral or written, expressed or implied.

 

“Covered Claim” shall mean any Claim that arises from or relates to any
Transaction, including (a) any Claim by or on behalf of REIT I, (b) any Claim by
a stockholder of REIT I and (c) any Claim that the indemnification obligations
contained in Section 8.2(a)(v) are not valid or are not fully enforceable or
that such indemnification obligations are subject to any limitation or exclusion
not expressly set forth in such Section; provided, however, that Covered Claims
shall not include (i) any Claim by REIT I or another REIT I Indemnified Party
for indemnification under this Agreement or any Ancillary Agreement for a breach
or violation of this Agreement or any Ancillary Agreement, (ii) any Claim by a
Behringer Indemnified Party or any holder of Equity Interests of a member of the
Behringer Group against another Behringer Indemnified Party, or (iii) any Claim
that arises out of, relates to or results from a matter addressed by Section 4.8
without regard to any materiality, adverse effect or other qualifier contained
therein or any survival limitation with respect thereto contained in
Section 8.1, and, for the avoidance of doubt, assuming that the representations
and warranties contained in Section 4.8 are not made as of a specific date, but
are made on a continuous basis starting as of the date hereof; provided,

 

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however, that the representations and warranties contained in clause (b) of
Section 4.8 with respect to Judgments applies only to Judgments in existence on
the date hereof.

 

“Cross-Receipt” has the meaning set forth in Section 2.3(c)(i).

 

“Damages” shall mean any and all costs, losses, damages, Liabilities,
obligations, lawsuits, deficiencies, Claims, demands, penalties, assessments,
fines, return of any consideration, Judgments, arbitration awards,
indemnification payments, reasonable costs and Expenses, of any nature
whatsoever, reasonable costs and reasonable expenditures required or incurred to
comply with any Judgment, and all reasonable amounts paid in investigation,
defense or settlement of any of the foregoing. All Damages shall be calculated
on a pre-Tax basis, without reduction or other adjustment for any Tax
consequences arising out of the payment of such Damages.

 

“Employee Release” has the meaning set forth in Section 5.3(a).

 

“Equity Interests” shall mean (i) with respect to a corporation, as determined
under the Laws of the jurisdiction of organization of such entity, shares of
capital stock (whether common, preferred or treasury), (ii) with respect to a
partnership, limited liability company, limited liability partnership or similar
Person, as determined under the Laws of the jurisdiction of organization of such
entity, units, interests, or other partnership or limited liability company
interests, or (ii) any other equity ownership.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended, and the regulations issued thereunder.

 

“Estimated Per Share Value” has the meaning set forth in Section 6.6(a).

 

“Estimated Valuation Policy” shall mean the Second Amended and Restated Policy
for Estimation of Common Stock that was utilized by the REIT I Board in
calculating the December 16, 2011 estimated per share value of REIT I Common
Stock, as the same may be amended or replaced from time to time in the
discretion of the REIT I Board as contemplated by Section 6.6(b).

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

 

“Excluded Assets” has the meaning set forth in Section 2.1(c).

 

“Excluded Employee Claims” has the meaning set forth in Section 5.4(g).

 

“Excluded Employee Liabilities” has the meaning set forth in Section 5.1(a).

 

“Excluded Liabilities” has the meaning set forth in Section 2.1(d).

 

“Existing Advisory Agreement” shall mean that certain Fifth Amended and Restated
Advisory Agreement, dated December 29, 2006, by and between Advisor and REIT I,
as amended through February 20, 2012 and in effect immediately prior to its
amendment and

 

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restatement into the Administrative Services Agreement as contemplated by this
Agreement; a conformed version thereof is attached hereto as Exhibit A.

 

“Existing Convertible Shares” has the meaning set forth in Section 2.3(e).

 

“Existing Property Management Agreement” shall mean that certain Fifth Amended
and Restated Property Management and Leasing Agreement, dated May 15, 2008, by
and among REIT I, BH OP and Property Manager, as amended through February 2012
and in effect immediately prior to its amendment and restatement into the
Amended and Restated Property Management Agreement, as contemplated by this
Agreement; a conformed version thereof is attached hereto as Exhibit H.

 

“Expenses” shall mean reasonable attorney fees and expenses, retainers, court
costs, transcript costs, fees of experts, witness fees, travel charges, postage,
delivery service fees and all other reasonable costs, disbursements, expenses
and obligations of the types customarily paid or incurred in connection with
prosecuting, investigating, defending, being a witness in or participating in
(including on appeal), or preparing to prosecute, defend, be a witness in or
participate in any Claim.

 

“Federal Funds Rate” shall mean, for a particular day, the offered rate as
reported in The Wall Street Journal published for such day in the “Money Rates”
section for reserves traded among commercial banks for overnight use in amounts
of one million dollars or more or, if no such rate is published for a day, such
rate as most-recently published in The Wall Street Journal, calculated on a
daily basis based on a 365-day year.

 

“Final Advisory Fees and Expenses Payment” has the meaning set forth in
Section 2.4(b).

 

“FINRA” shall mean the Financial Industry Regulatory Authority, Inc. or any
successor thereto.

 

“Fundamental Representations” has the meaning set forth in Section 8.1(c).

 

“GAAP” shall mean United States generally accepted accounting principles in
effect on the date hereof, consistently applied.

 

“Governmental Authority” shall mean any United States or other international,
national, state or local government, any political subdivision thereof or any
other governmental, judicial, public or statutory instrumentality, authority,
body, agency, department, bureau, commission or entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, or any arbitrator with authority to bind a party at law.

 

“Indebtedness” of any Person shall mean any liabilities in respect of or
representing (i) borrowed money or evidenced by bonds, monies, debentures, or
similar instruments, (ii) the balance deferred and unpaid of the purchase price
of any property but excluding current trade payables, if and to the extent any
of the foregoing indebtedness would appear as a liability upon a balance sheet
prepared in accordance with GAAP, (iii) all amounts owed by and all obligations
of such Person as lessee under leases that have been recorded as capital leases,
in accordance with GAAP, (iv) guaranties, direct or indirect, in any manner, of
all or any part of any

 

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Indebtedness of any Person, (v) any obligation secured by a lien on a Person’s
assets, and (vi) accrued interest, premiums, fees, and prepayment penalties for
any of the foregoing.

 

“Indemnified Party” has the meaning set forth in Section 8.2(d)(i).

 

“Indemnifying Party” has the meaning set forth in Section 8.2(d)(i).

 

“Indemnity Claim” has the meaning set forth in Section 8.1(d).

 

“Intellectual Property Rights” shall mean any or all of the following and all
rights arising out of or associated therewith, in each case, in any jurisdiction
in the world: (i) patents and patent applications (including reissues,
reexaminations, divisions, renewals, extensions, provisionals, continuations and
continuations-in-part), inventions (whether or not patentable and whether or not
reduced to practice), invention or patent disclosures and inventor’s
certificates; (ii) trade secrets, proprietary information and know-how,
including methods, processes, designs, drawings, technical data and customer
lists; (iii) original works of authorship (whether copyrightable or not),
copyrights, copyright registrations and copyright applications; (iv) industrial
designs and all registrations and applications thereof; (v) trademarks, service
marks, certification marks, trade names, corporate names, domain names, uniform
resource identifiers or locators (commonly known as URLs), logos, trade dress or
other indicia of source or origin, including unregistered and common law rights
in the foregoing, and all registrations of and applications to register the
foregoing, in each case in any jurisdiction throughout the world; (vi) Software;
(vii) moral and economic rights of authors and inventors, however denominated;
and (viii) all other intellectual property or industrial property rights.

 

“IRS” shall mean the United States Internal Revenue Service.

 

“Judgments” shall mean any judgments, injunctions, orders, decrees, writs,
rulings, stipulations, consents, settlements, or awards of any court or other
judicial authority or any other Governmental Authority.

 

“Knowledge” shall mean (i) with respect to Services Holdings, Advisor and
Property Manager, as the case may be, the actual knowledge of the individuals
listed in Schedule 1.1(a) without any duty to investigate and (ii) with respect
to REIT I, shall mean the actual knowledge of the individuals listed in Schedule
1.1(b) and the members of the REIT I Special Committee without any duty to
investigate.

 

“Laws” shall mean all laws, statutes, by-laws, ordinances, rules, regulations,
common law or Judgments of any Governmental Authority.

 

“Liabilities” shall mean any liability, Indebtedness, guaranty, assurance,
commitment, claim, loss, damage, deficiency, assessment, obligation or
responsibility, whether fixed or unfixed, choate or inchoate, liquidated or
unliquidated, secured or unsecured, accrued or unaccrued, absolute, known or
unknown, contingent or unmatured, liquidated or unliquidated, asserted or
unasserted, due or to become due, whenever or however arising (including whether
arising out of any Contract or tort based on negligence or strict liability) and
whether or not the same would be required by GAAP to be stated in financial
statements or disclosed in the notes thereto.

 

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“License Agreement” has the meaning set forth in Section 7.1(f).

 

“Licensing Claim” shall mean any Claim that a Service Provider or any other
Behringer Indemnified Party does not possess a real estate brokerage or similar
license required by any Law in connection with services provided by such Person
to REIT I or any of its Affiliates, or any Claim that arises from or relates to
the foregoing.

 

“Listing Event” shall mean the listing of any Equity Interest of REIT I on a
national securities exchange.

 

“LTIP” shall mean Behringer Harvard REIT I LTIP, LLC.

 

“LTIP Program” shall mean the program pursuant to which Equity Interests in LTIP
were issued to certain employees providing services to REIT I on behalf of the
Service Providers, as such program is in effect as of the Closing.

 

“Non-Hired Specified Employee” has the meaning set forth in Section 5.1(a).

 

“Notice” has the meaning set forth in Section 9.1.

 

“Parties” has the meaning set forth in the Recitals.

 

“Person” shall mean any individual, corporation, limited liability company,
partnership, joint venture, association, trust or other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.

 

“Preferred Stock Closing” has the meaning set forth in Section 2.3(b).

 

“Preferred Stock Purchase Price” has the meaning set forth in Section 2.3(b).

 

“Pricing Information” has the meaning set forth in the definition of
Confidential Material.

 

“Property Manager” has the meaning set forth in the Preamble.

 

“Providing Party” has the meaning set forth in the definition of Confidential
Material.

 

“PTO Benefits” has the meaning set forth in Section 5.2.

 

“PTO Liabilities” has the meaning set forth in Section 5.2.

 

“Purchased Assets” has the meaning set forth in the Recitals.

 

“Purchased Assets Annex” has the meaning set forth in Section 2.1(a).

 

“Receiving Party” has the meaning set forth in the definition of Confidential
Material.

 

“Registration Rights Agreement” has the meaning set forth in Section 7.1(d).

 

“REIT I” has the meaning set forth in the Preamble.

 

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“REIT I 401(k) Plan” has the meaning set forth in Section 5.4(f).

 

“REIT I Board” shall mean the Board of Directors of REIT I.

 

“REIT I Bylaws” shall mean the Amended and Restated Bylaws of REIT I, as amended
and in effect immediately prior to Closing.

 

“REIT I Charter” shall mean the Ninth Articles of Amendment and Restatement of
REIT I, as amended and in effect immediately prior to Closing.

 

“REIT I Common Stock” has the meaning set forth in Section 3.2(a).

 

“REIT I Deductible” has the meaning set forth in Section 8.3(c).

 

“REIT I Disclosure Schedule” has the meaning set forth in Section 9.2(c).

 

“REIT I FSA Plans” shall mean flexible spending account plans of REIT I that are
comparable to the Behringer FSA Plans.

 

“REIT I Fundamental Representations” has the meaning set forth in
Section 8.1(b).

 

“REIT I Indemnified Parties” has the meaning set forth in Section 8.2(b).

 

“REIT I Material Adverse Effect” shall mean a material adverse effect on the
business, properties, assets, financial condition, or results of operations of
REIT I and its Subsidiaries, taken as a whole.

 

“REIT I Organizational Documents” shall mean the REIT I Charter and REIT I
Bylaws, collectively.

 

“REIT I Plans” has the meaning set forth in Section 5.4(a).

 

“REIT I Preferred Stock” has the meaning set forth in Section 3.2(a).

 

“REIT I SEC Filings” shall mean each report, registration statement or document
filed or furnished by REIT I with or to the SEC under the Exchange Act or the
Securities Act.

 

“REIT I Special Committee” shall mean the Special Committee of the REIT I Board
formed in connection with the contemplation of the Transactions, the members of
which currently are Charles G. Dannis, Steven W. Partridge, and G. Ronald
Witten.

 

“Representatives” has the meaning set forth in the definition of Confidential
Material.

 

“SDAT” has the meaning set forth in Section 2.3(a).

 

“SEC” shall mean the United States Securities and Exchange Commission.

 

“Securities Act” shall mean the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

 

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“Series A Preferred Stock” has the meaning set forth in Section 2.3(b).

 

“Service Provider Disclosure Schedule” has the meaning set forth in
Section 9.2(d).

 

“Service Providers Fundamental Representations” has the meaning set forth in
Section 8.1(c).

 

“Service Providers” has the meaning set forth in the Preamble.

 

“Service Providers Material Adverse Effect” shall mean a material adverse effect
on the business, properties, assets, financial condition, or results of
operations of Service Providers and their Subsidiaries, taken as a whole.

 

“Services Holdings” has the meaning set forth in the Preamble.

 

“Services Holdings Material Adverse Effect” shall mean a material adverse effect
on the business, properties, assets, financial condition, or results of
operations of Services Holdings and its Subsidiaries, taken as a whole.

 

“Software” shall mean all software of any type (including programs,
applications, middleware, interfaces, utilities, tools, drivers, firmware,
microcode, scripts, batch files, JCL files, instruction sets and macros) and in
any form (including source code, object code and executable code), databases,
associated data and related documentation, and all rights therein.

 

“Specified Employees” has the meaning set forth in Section 2.2(a).

 

“Specified Employee Annex” has the meaning set forth in Section 2.2(a).

 

“Stock Power” has the meaning set forth in Section 7.2(d).

 

“Stockholder Claim” shall mean any Covered Claim made by a stockholder of
REIT I, on behalf of REIT I by a stockholder of REIT I, or made by REIT I upon
or following a demand by a stockholder of REIT I with respect to such Covered
Claim.

 

“Subsidiary” or “Subsidiaries” of any Person shall mean any corporation,
partnership, limited liability company, association, trust, joint venture or
other entity or organization of which such Person, either alone or through or
together with any other Subsidiary, owns, directly or indirectly, more than 50%
of the stock or other Equity Interests, the holder of which is generally
entitled to vote for the election of the board of directors, managers or other
governing body of the entity or organization which such Person so owns. For the
avoidance of doubt, REIT I, BH OP, and their respective Subsidiaries shall not
be considered Subsidiaries of any member of the Behringer Group.

 

“Support Services Agreement” has the meaning set forth in Section 6.8.

 

“Tax Returns” shall mean any report, return (including information return),
election, document, estimated tax filing, declaration or other filing required
to be supplied to any taxing or other Governmental Authority with respect to
Taxes, including any amendments thereto.

 

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“Taxes” shall mean (i) all taxes, charges, fees, levies or other assessments,
including income, gross receipts, excise, property, sales, withholding, social
security, occupation, use, service, service and use, license, payroll,
franchise, transfer and recording taxes, fees and charges, imposed by the United
States, or any state, local or foreign government or subdivision or agency
thereof whether computed on a separate, consolidated, unitary, combined or any
other basis; and such term shall include any interest, fines, penalties or
additional amounts attributable to or imposed on or with respect to any such
taxes, charges, fees, levies or other assessments and (ii) any Liability for the
payment of amounts determined by reference to amounts described in clause (i) as
a result of being a member of an affiliated, consolidated, combined or unitary
group.

 

“Transactions” has the meaning set forth in the Recitals.

 

“Transfer Taxes” has the meaning set forth in Section 6.9(b)(ii).

 

“Transferred Account Balances” has the meaning set forth in Section 5.4(e).

 

“Transferred Employees” has the meaning set forth in Section 5.1(a).

 

“Two Briarlake” shall mean that certain property currently owned by REIT I in
Houston, Texas commonly known as Two Briarlake Plaza, located at 2050 West Sam
Houston Parkway South, Houston, Texas and the improvement and development
thereof.

 

“Two Briarlake Approved Plan” shall mean that plan described in the Board
Investment Package, dated February 20, 2012, as amended by the plan described in
the Board Investment Package, dated May 10, 2012, and approved by the REIT I
Board pursuant to resolutions of the REIT I Board, dated February 20, 2012 and
May 10, 2012, as such plan may be subsequently amended and approved by the
REIT I Board from time to time.

 

“Two Briarlake Development Fees” has the meaning set forth in
Section 6.5(f)(ii).

 

“Waived Fees” has the meaning set forth in Section 2.4(b).

 

ARTICLE II
PURCHASE AND SALE OF ASSETS AND STOCK; CLOSING

 

SECTION 2.1                                                  Purchase and Sale
of Assets.

 

(a)       Purchased Assets. Upon the terms and subject to the conditions of this
Agreement, REIT I shall purchase from Advisor and Advisor shall sell, convey,
transfer, assign and deliver, or cause to be sold, conveyed, transferred,
assigned and delivered, to REIT I (or its designee) at the Closing, all of
Advisor’s right, title and interest in, to and under the Purchased Assets
expressly set forth on Annex II hereto (the “Purchased Assets Annex”), which
Purchased Assets Annex includes those tangible assets of Advisor located at the
current corporate offices of REIT I that are used by the Specified Employees
exclusively in the conduct of the business of REIT I and which are not currently
owned by REIT I.

 

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(b)       Assumed Liabilities. At the Closing, REIT I or its permitted assigns
shall assume and agree to pay, perform, fulfill and discharge, and shall pay,
perform, fulfill and discharge, as they become due: (i) Liabilities of
Transferred Employees arising on and after the Closing as set forth in
Article V, (ii) the PTO Liabilities and (iii) the COBRA Liabilities.

 

(c)       Excluded Assets. The following assets and properties (the “Excluded
Assets”) are not included in the Purchased Assets and that REIT I shall have no
rights with respect to the following under this Agreement: (i) any and all
assets of any Person other than Advisor; (ii) any and all Behringer Plans;
(iii) any and all Contracts; and (iv) any and all assets of Advisor other than
those expressly set forth on the Purchased Assets Annex. For the avoidance of
doubt, except for the license of certain Intellectual Property Rights under the
License Agreement as set forth therein, no Intellectual Property Rights
(including Software and/or licenses for Software that may have been used by
Service Providers in connection with the Purchased Assets or to provide services
to REIT I prior to Closing ) are being conveyed or licensed to REIT I or its
Affiliates pursuant to this Agreement, any Ancillary Agreement or any
Transactions. For the avoidance of doubt, nothing in this Section 2.1(c) is
intended to, and nothing in this Section 2.1(c) will be deemed to, modify any
rights of any of the Parties with respect to insurance policies currently in
effect, including the status or rights of REIT I as a named insured or other
covered person under any group insurance policy maintained by a member of the
Behringer Group.

 

(d)       Excluded Liabilities. Services Holdings and Service Providers are
responsible for, and shall pay, perform, fulfill and discharge, as they become
due: (i) any and all Liabilities relating to the Excluded Assets; (ii) the
Excluded Employee Claims; and (iii) the Excluded Employee Liabilities
(collectively, the “Excluded Liabilities”).

 

SECTION 2.2                 Waiver of Non-Solicit/Non-Hire Provisions with
respect to the Specified Employees.

 

(a)       At Closing, Advisor shall waive the non-solicitation and non-hire
provisions contained in Section 6.15 (Non-Solicitation) of the Existing Advisory
Agreement as included in that certain First Amendment to the Existing Advisory
Agreement with respect to each employee (each, a “Specified Employee”) set forth
on Annex I hereto (the “Specified Employees Annex”). For the avoidance of doubt,
neither Advisor nor any other member of the Behringer Group shall be required to
or be deemed to waive any right (except as contemplated by the immediately
preceding sentence) under any non-solicit or non-hire provision of the Existing
Advisory Agreement, the Existing Property Management Agreement or any other
Contract, nor shall the foregoing Persons waive any such provision with respect
to any solicitation by such Specified Employees or any rights with respect to
any other employee (or other covered service provider) who is not a Specified
Employee and is covered by such a provision.

 

(b)       At Closing, each of Services Holdings and the Service Providers shall
waive or cause to be waived any non-solicitation, non-hire, non-compete or other
similar

 

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provisions contained in any Contract between any of them and any Specified
Employee to the extent necessary to allow such Specified Employee to work for
REIT I.

 

(c)       Services Holdings and the Service Providers acknowledge that to the
extent that a Specified Employee has on behalf of REIT I prior to Closing and in
connection with this Agreement and the Transactions, solicited other Specified
Employees to work for REIT I, such activities prior to Closing do not constitute
a breach or violation of any non-solicitation or other similar provisions
contained in any Contract between any of them and such Specified Employee.

 

(d)       Except as contemplated by this Section 2.2, no member of the Behringer
Group waives any non-solicitation, non-hire, non-compete or other similar
provisions contained in any Contract between any of them and any Specified
Employee. It is understood that REIT I is not or may not be aware of the
existence or terms of any such Contract with a Specified Employee.

 

SECTION 2.3                 Purchase and Sale of Series A Preferred Stock;
Preferred Stock Closing; Cancellation of Existing Convertible Shares.

 

(a)       The REIT I Board shall adopt and file with the State Department of
Assessments and Taxation of Maryland (the “SDAT”) as soon as practicable but in
no case later than one (1) Business Day after the Closing Date the Articles
Supplementary (Series A Preferred Stock) to the REIT I Charter in the form
attached hereto as Exhibit D (the “Articles Supplementary”).

 

(b)       On the date of the filing of the Articles Supplementary with the SDAT,
REIT I shall sell and issue to Services Holdings and Services Holdings shall
purchase 10,000 shares of Series A participating, voting, convertible preferred
stock, par value $0.0001 per share, of REIT I as described in the Articles
Supplementary (the “Series A Preferred Stock”) in consideration of the
agreements, covenants and obligations of Services Holdings, the Service
Providers and the other members of the Behringer Group under this Agreement and
the Ancillary Agreements, including the Transactions, and payment by Services
Holdings of an amount in cash equal to the aggregate par value of such Series A
Preferred Stock (the “Preferred Stock Purchase Price”). The Series A Preferred
Stock shall be registered in the name of Services Holdings and recorded on the
books of REIT I in uncertificated form. The Series A Preferred Stock shall not
be subject to any restriction on transfer other than: (i) any restrictions as
may be required or imposed pursuant to applicable state and federal securities
Laws; (ii) the Registration Rights Agreement; (iii) the REIT I Charter; and
(iv) as may be created by, or exist through or under, any of the holders
thereof.

 

(c)       The closing of the purchase and sale of the Series A Preferred Stock
pursuant to Section 2.3(b) (the “Preferred Stock Closing”) shall occur on the
date of the filing of the Articles Supplementary with SDAT.

 

(i)       At the Preferred Stock Closing, REIT I shall deliver or cause to be
delivered to Services Holdings: (A) evidence in form and substance reasonably

 

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satisfactory to Services Holdings that the Articles Supplementary have been
filed with and accepted by SDAT, (B) evidence, in form and substance reasonably
satisfactory to Services Holdings, of the issuance of 10,000 shares of Series A
Preferred Stock to Services Holdings, and (C) a duly executed counterpart of a
cross-receipt (the “Cross-Receipt”).

 

(ii)       At the Preferred Stock Closing, Services Holdings shall deliver or
cause to be delivered to REIT I a duly executed counterpart of the
Cross-Receipt.

 

(d)       The Series A Preferred Stock issued pursuant to this Section 2.3 shall
be subject to the restrictions and entitled to the registration and other rights
set forth in the Registration Rights Agreement.

 

(e)       Upon the Preferred Stock Closing, all 1,000 convertible shares of
non-participating, non-voting convertible stock, par value $0.0001 per share, of
REIT I held by Advisor (the “Existing Convertible Shares”) shall be transferred
by Advisor to REIT I pursuant to the Stock Power. All Existing Convertible
Shares shall be retired and cancelled promptly after such transfer.

 

(f)       The Parties shall treat the Series A Preferred Stock as stock for all
purposes.

 

SECTION 2.4                 Closing Payments; Waived Fees.

 

(a)       Acquired Rights Payment. At Closing, REIT I shall pay an amount equal
to $1,500,000 for the Purchased Assets and in consideration of the license of
the Intellectual Property Rights under the License Agreement and the other
agreements, covenants and obligations of the Behringer Group in connection with
the Transactions in cash by wire transfer of immediately available funds to the
bank account as shall be designated in writing by Services Holdings at least two
Business Days prior to the Closing.

 

(b)       Advisory Fees and Expenses. Attached hereto as Annex III is a schedule
(the “Advisory Fees and Expenses Annex”) setting forth the aggregate amount of
all Advisory Fees and Expenses for all services rendered through the Closing
under the Existing Advisory Agreement or otherwise due to Advisor with respect
to the period before the Closing under the Existing Advisory Agreement
(“Advisory Fees and Expenses Amount”). Subject to Section 6.5, Advisor, on
behalf of itself and its Affiliates, and its and their respective successors and
assigns, hereby waives the obligation of REIT I to pay $3,540,847 of fees earned
under Section 3.01 of the Existing Advisory Agreement between the opening of
business on July 1, 2012 and the date hereof (the “Waived Fees”). At the
Closing, REIT I shall pay an amount equal to the Final Advisory Fees and
Expenses Amount minus the Waived Fees to Advisor in cash by wire transfer of
immediately available funds to the bank account as shall be designated in
writing by Advisor (the “Final Advisory Fees and Expenses Payment”).

 

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(c)       Preferred Stock Purchase Price. At Closing, Services Holdings shall
pay the Preferred Stock Purchase Price to REIT I in cash by wire transfer of
immediately available funds to the bank account as shall be designated in
writing by REIT I.

 

SECTION 2.5                 Closing; Closing Deliverables

 

(a)       The closing (the “Closing”) of the purchase and sale of the Purchased
Assets, the assumption of Assumed Liabilities as contemplated by this Agreement,
the execution of the Administrative Services Agreement, the execution of the
Amended and Restated Property Management Agreement, the execution of the
Registration Rights Agreement, the execution of the Consulting Agreement, the
execution of the License Agreement, and the other transactions contemplated by
this Agreement (other than the Preferred Stock Closing) shall take place
simultaneously with the execution of this Agreement, on the date hereof (the
“Closing Date”) at the offices of Behringer Harvard Holdings, 15601 Dallas
Parkway, Addison, Texas, or at such other place as the Parties may mutually
agree. The Closing shall be deemed effective for all purposes at 11:59 P.M. on
the Closing Date.

 

(b)       At the Closing, the Parties shall deliver or cause to be delivered
those agreements, assignments, instruments and other documents set forth in
Article VII.

 

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF REIT I

 

REIT I hereby represents and warrants to Services Holdings and the Service
Providers as of the date hereof, as follows:

 

SECTION 3.1                 Organization and Qualification.

 

(a)       REIT I is a corporation validly existing and in good standing under
the laws of the State of Maryland. REIT I has the requisite corporate power and
authority to own, lease and operate its assets and properties and to carry on
its business as it is now being conducted except where the failure to have such
power and authority would not reasonably be expected to have a REIT I Material
Adverse Effect.

 

(b)       BH OP is a limited partnership validly existing and in good standing
under the laws of the State of Texas. BH OP has the requisite partnership power
and authority to own, lease and operate its assets and properties and to carry
on its business as it is now being conducted except where the failure to have
such power and authority would not reasonably be expected to have a REIT I
Material Adverse Effect.

 

SECTION 3.2                 Capitalization.

 

(a)       To the Knowledge of REIT I, The authorized capital stock of REIT I
consists of (i) 382,499,000 shares of common stock, par value $0.0001 per share
(“REIT I Common Stock”), (ii) 1,000 Existing Convertible Shares, and
(iii) 17,500,000 shares of preferred stock, par value $0.0001 per share (“REIT I
Preferred Stock”). As of August 31, 2012, 298,477,851.3007 of REIT I Common
Shares were issued and

 

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outstanding. As of the date hereof immediately prior to Closing, 1,000 Existing
Convertible Shares were issued and outstanding. As of the date hereof
immediately prior to Closing, no shares of REIT I Preferred Stock were issued
and outstanding.

 

(b)       To the Knowledge of REIT I, except as contemplated by this Agreement
or as set forth in Schedule 3.2(b), as of the date hereof, there are no
outstanding subscriptions, options, calls, contracts, commitments,
understandings, restrictions, agreements, arrangements, rights (including
preemptive rights) or warrants, including any right of conversion or exchange
under any outstanding security, instrument or other agreement or commitment of
any character, obligating REIT I to issue, deliver or sell, or cause to be
issued, delivered or sold, additional Equity Interests of REIT I or obligating
REIT I to grant, extend or enter into any such agreement or commitment. Except
as contemplated by this Agreement or as set forth in Schedule 3.2(b), there are
no registration rights granted by REIT I and held by any individual or entity
with respect to any securities of REIT I (whether such securities are currently
outstanding or issuable in the future).

 

SECTION 3.3                 Issuance of Securities. The Series A Preferred Stock
to be issued by REIT I to Services Holdings in connection with this Agreement,
when issued in accordance with the provisions of this Agreement, will (a) be
duly authorized, validly issued, fully paid and nonassessable, and (b) will not
be subject to any restriction on transfer other than: (i) any restrictions as
may be required or imposed pursuant to applicable state and federal securities
Laws; (ii) the Registration Rights Agreement; (iii) the REIT I Charter; and
(iv) as may be created by, or exist through or under, any of the holders
thereof.

 

SECTION 3.4                 Authority; Approvals.

 

(a)       REIT I has full corporate power and authority to enter into this
Agreement and the Ancillary Agreements to which it is a party and to consummate
the Transactions. No provision of Law applicable to REIT I or the REIT I
Organizational Documents requires approval by the stockholders of REIT I of any
of this Agreement, the Ancillary Agreements, or the Transactions. The execution
and delivery by REIT I of this Agreement and each Ancillary Agreement to which
it is a party, and the consummation by REIT I of the Transactions, have been
duly authorized by all necessary corporate action and no other proceedings on
the part of REIT I are necessary to authorize the execution and delivery of this
Agreement and such Ancillary Agreements and the consummation of the
Transactions, except for filing the Articles Supplementary with SDAT. This
Agreement has been, and each Ancillary Agreement to which REIT I is a party when
executed and delivered will be, duly and validly executed and delivered by
REIT I and, assuming the due authorization, execution and delivery hereof and
thereof by the other parties hereto or thereto, constitutes or will constitute,
as applicable, a legal, valid and binding agreement of REIT I, enforceable
against REIT I in accordance with its terms, except that such enforcement may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar Laws affecting or relating to enforcement of creditors’ rights
generally, and (ii) general equitable principles.

 

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(b)       BH OP has full partnership power and authority to enter into the
Ancillary Agreements to which it is a party and to consummate the Transactions.
No provision of Law applicable to BH OP or the partnership agreement of BH OP
requires approval by the limited partners of BH OP of the Ancillary Agreements
to which it is a party or the Transactions. The execution and delivery by BH OP
of each Ancillary Agreement to which it is a party, and the consummation by
BH OP of the Transactions, to the extent applicable to BH OP, have been duly
authorized by all necessary partnership action and no other proceedings on the
part of BH OP are necessary to authorize the execution and delivery of such
Ancillary Agreements and the consummation of the applicable Transactions. Each
Ancillary Agreement to which BH OP is a party when executed and delivered will
be duly and validly executed and delivered by BH OP and, assuming the due
authorization, execution and delivery hereof and thereof by the other parties
hereto or thereto, constitutes or will constitute, as applicable, a legal, valid
and binding agreement of BH OP, enforceable against BH OP in accordance with its
terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting or
relating to enforcement of creditors’ rights generally, and (ii) general
equitable principles.

 

(c)       To the Knowledge of REIT I, except for the filing by REIT I of the
Articles Supplementary, no declaration, filing or registration with, or notice
to, or authorization, consent or approval of, any Governmental Authority is
required to be made, obtained or given by or on behalf of REIT I or BH OP the
absence of which would prevent the consummation by REIT I or BH OP of the
Transactions, or the performance by REIT I of its obligations under this
Agreement and the Ancillary Agreements to which it is party or the performance
by BH OP of its obligations under each Ancillary Agreement to which it is a
party.

 

SECTION 3.5                 Litigation.

 

To the Knowledge of REIT I, there are no Claims pending or threatened in writing
against or investigations with respect to REIT I or its Affiliates, that, if
determined in a manner adverse to REIT I or its Affiliates would, individually
or in the aggregate, reasonably be expected to result in a REIT I Material
Adverse Effect or otherwise reasonably be expected to prohibit or restrict the
consummation of the Transactions. To the Knowledge of REIT I, neither of REIT I
nor any its Affiliates is subject to any Judgment or Contract which would,
individually or in the aggregate, reasonably be expected to result in a REIT I
Material Adverse Effect or otherwise reasonably be expected to prohibit or
restrict the consummation of the Transactions.

 

SECTION 3.6                 Brokers and Finders.

 

REIT I has not employed, paid or become obligated to pay any fee to any broker,
finder or other intermediary for or on account of the Transactions, except for
fees and expenses of Morgan Stanley for which REIT I will be exclusively liable.

 

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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SERVICE PROVIDERS

 

Each of Services Holdings and the Service Providers hereby represents and
warrants to REIT I, as of the date hereof, as follows:

 

SECTION 4.1                 Organization.

 

It is a limited liability company validly existing and in good standing under
the laws of its jurisdiction of organization.

 

SECTION 4.2                 Authority; Approvals.

 

(a)       It has the full limited liability company power and authority to enter
into this Agreement and the Ancillary Agreements to which it is a party, and to
consummate the Transactions. No provision of Law applicable to it or its
organizational documents requires approval by its members of any of this
Agreement, the Ancillary Agreements or the Transactions, except as duly obtained
prior to or concurrent with the execution and delivery of this Agreement. The
execution and delivery by it of this Agreement and each Ancillary Agreement to
which it is a party, and the consummation by it of the Transactions, have been
duly authorized by all necessary limited liability company action, and no other
proceedings on the part of it are necessary to authorize the execution and
delivery of this Agreement and such Ancillary Agreements or to consummate the
Transactions. This Agreement has been, and each Ancillary Agreement to which it
is a party when executed and delivered will be, duly and validly executed and
delivered by it, as applicable, and, assuming the due authorization, execution
and delivery hereof and thereof by the other parties hereto or thereto,
constitutes or will constitute, as applicable, a valid and binding agreement of
it, as applicable, enforceable against it in accordance with its terms, except
that such enforcement may be subject to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting or relating to
enforcement of creditors’ rights generally and (ii) general equitable
principles.

 

(b)       To its Knowledge, no declaration, filing or registration with, or
notice to, or authorization, consent or approval of, any Governmental Authority
is necessary for the execution and delivery by it of this Agreement and the
Ancillary Agreements to which it is party or the consummation by it of the
Transactions.

 

SECTION 4.3                 Existing Convertible Shares.

 

Advisor is the record and beneficial owner of the Existing Convertible Preferred
Shares and has the authority to transfer such Existing Convertible Shares to
REIT I pursuant to this Agreement.

 

SECTION 4.4                 Litigation.

 

To its Knowledge, there are no Claims pending or threatened in writing against
or investigations with respect to Services Holdings, Service Providers, and
their Affiliates that, if determined in a manner adverse to Services Holdings,
Service Providers, and their Affiliates

 

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would, individually or in the aggregate, reasonably be expected to result in a
Services Holdings Material Adverse Effect or Service Providers Material Adverse
Effect or otherwise reasonably be expected to prohibit or restrict the
consummation of the Transactions. To its Knowledge, neither of Services
Holdings, Service Providers nor or any of their Affiliates is subject to any
Judgment or Contract which would, individually or in the aggregate, reasonably
be expected to result in a Services Holdings Material Adverse Effect or Service
Providers Material Adverse Effect or otherwise reasonably be expected to
prohibit or restrict the consummation of the Transactions.

 

SECTION 4.5                 No Infringement or Misappropriation.

 

To its Knowledge, no Member of the Behringer Group has received any Claim
alleging that it or REIT I or any of their respective Affiliates has infringed
or misappropriated any Intellectual Property Rights of any third party
(including any Claim that it must license or refrain from using any Intellectual
Property Rights of any third party) through its use of the “Behringer Harvard”
service mark.

 

SECTION 4.6                 Title to Purchased Assets.

 

Advisor is the sole owner of and has good and valid title to each of the
Purchased Assets, free and clear of all Liabilities (except for immaterial
Liabilities).  At the Closing, Advisor will deliver to REIT I good and valid
title in and to the Purchased Assets, free and clear of all Liabilities (except
for immaterial Liabilities).

 

SECTION 4.7                 Brokers and Finders.

 

It has not employed any broker, finder or other intermediary on behalf of itself
or REIT I in connection with the Transactions, except for fees and expenses of
Robert A. Stanger & Co., Inc. for which the Behringer Group will be exclusively
liable.

 

SECTION 4.8                 Noncontravention.

 

The execution, delivery and performance of the Transactions by each of Services
Holdings, the Service Providers and the other members of the Behringer Group do
not and will not (a) violate, conflict with or result in the breach of any
provision of its organizational documents, or (b) except for matters addressed
under Section 8.2(b)(v), conflict with or violate, in any material respect, any
Judgment in existence on the date hereof applicable to it, or any of its assets,
properties or businesses, or (c) conflict with, result in any breach of,
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, require any consent under, or give to
others any rights of termination, amendment, acceleration, suspension,
revocation or cancellation of, or result in the creation of any lien or other
encumbrance on any of the shares of Series A Preferred Stock to be issued by
REIT I to Services Holdings in connection with this Agreement, pursuant to, any
note, bond, mortgage or indenture, agreement, lease, sublease, license, permit,
franchise or other Contract, instrument or arrangement to which it is a party or
by which any of such shares, assets or properties is bound or affected, except,
in the case of clause (c), to the extent that such conflicts, breaches, defaults
or other matters would not adversely affect its ability to carry out its
obligations under this Agreement, and to consummate the Transactions.

 

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ARTICLE V
SPECIFIED EMPLOYEE MATTERS

 

SECTION 5.1                 Employees and Offers of Employment.

 

(a)       Effective as of the Closing, REIT I shall offer employment to the
Specified Employees on the terms and subject to the conditions determined by the
Compensation Committee of the REIT I Board in accordance with the provisions of
this Article V. The Specified Employees who accept and commence employment after
the Closing with REIT I are hereinafter collectively referred to as the
“Transferred Employees.” For the period commencing on September 1, 2012 and
ending on December 31, 2013, such Transferred Employees shall receive
substantially similar (or more beneficial) base salaries and cash bonus
opportunities as received immediately prior to the Closing. Further, REIT I
hereby assumes, as of the Closing, all Liabilities of Transferred Employees
(including the employment and termination thereof) arising after the Closing in
connection with their employment by REIT I, including the employment and
termination thereof. Except for REIT I’s indemnification for PTO Liabilities
pursuant to Section 5.2 and assumption of severance benefits for Non-Hired
Specified Employees pursuant to Section 5.3, REIT I does not assume, and shall
not be liable or responsible for, any Liabilities with respect to any Specified
Employee who does not become a Transferred Employee (each, a “Non-Hired
Specified Employee”) or any other employee of the Service Providers (such
Liabilities, the “Excluded Employee Liabilities”).

 

(b)       Subject to applicable Law and the terms of any Contract between a
Transferred Employee and REIT I, each Transferred Employee shall be, upon
acceptance and commencement of employment with REIT I, an “at will” employee of
REIT I, and nothing in this Article V shall create a contract of employment
between (x) REIT I or any of its Affiliates and (y) a Transferred Employee, nor
limit the right of REIT I and its Affiliates to terminate the employment of any
Transferred Employee at any time, for any reason, with or without cause, and
without notice.

 

SECTION 5.2                 Paid Time Off; Other Leave.

 

For the period commencing on September 1, 2012 and ending on December 31, 2013,
REIT I shall provide to each Transferred Employee paid time off, vacation, and
other accrued leaves of absence benefits (“PTO Benefits”) substantially
comparable in the aggregate as those provided by the Behringer Group immediately
prior to Closing, and REIT I shall give each Transferred Employee credit for the
remaining PTO Benefits accrued by such Transferred Employee during his or her
employment with the Behringer Group prior to Closing (that has not been
forfeited or lost as of Closing), but REIT I may subject such accrued PTO
Benefits to any accrual caps and use limitations (such as a “use it or lose it”
policy) that are comparable to the accrual caps and use limitations under the
comparable Behringer Group policies for PTO Benefits, as REIT I may reasonably
determine. To the extent that any member of the Behringer Group incurs any
Damages with respect to any Liabilities for PTO Benefits with respect to any
Specified Employee (collectively, the “PTO Liabilities”), REIT I shall indemnify
such member of the Behringer Group with respect to such Damages.

 

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SECTION 5.3                 Severance Obligations.

 

(a)       From September 1, 2012 through December 31, 2013, REIT I shall provide
severance benefits substantially comparable to those which would be provided
using the formula set forth in Schedule 5.3 to any Transferred Employee who is
involuntarily terminated by REIT I under circumstances that would entitle the
Transferred Employee to severance benefits had his or her employment been
terminated by a member of the Behringer Group immediately prior to Closing (for
example, REIT I shall be under no obligation to provide severance benefits to
any Transferred Employee who has been terminated for cause). If REIT I or any of
its Affiliates seeks a release from any Transferred Employee with respect to
Claims of such Transferred Employee against REIT I or its Affiliates (an
“Employee Release”), REIT I shall use commercially reasonable efforts to obtain
a release releasing (among other Persons) the Behringer Indemnified Parties of
all employment-related Claims of such Transferred Employee arising during his or
her term of service (as an employee or otherwise) with the Behringer Group prior
to Closing on substantially similar terms as such Employee Release.

 

(b)       REIT I shall reimburse the applicable member of the Behringer Group
for any severance benefits paid up to the amount determined using the formula
set forth in Schedule 5.3 to any Non-Hired Specified Employee who has his or her
employment terminated by the applicable member of the Behringer Group within
ninety (90) days of the Closing Date.

 

SECTION 5.4                 Employee Benefit Plans.

 

(a)       Effective as of 11:59 P.M. on the Closing Date, Transferred Employees
shall cease participation in any and all Behringer Plans and shall be eligible
to participate in employee benefit and fringe benefit plans maintained by REIT I
or one of its Affiliates (the “REIT I Plans”). Effective as of 12:00 A.M.
September 1, 2012 and continuing for a period ending on December 31, 2013,
REIT I shall provide to the Transferred Employees through REIT I Plans, employee
benefits and fringe benefits which are, in the aggregate, substantially
comparable to the employee benefits and fringe benefits provided to such
Transferred Employees under the Behringer Plans immediately prior to the Closing
Date.

 

(b)       Following the Closing Date, each Transferred Employee shall receive
credit for all purposes (including credit for eligibility, benefit accrual and
for vesting) under the REIT I Plans for years of service with the Behringer
Group; provided, however, that with respect to any credit for benefit accruals
under any REIT I Plan, there shall be no duplication of benefits or accruals
under the employee benefit plans or programs of REIT I and those of the
Behringer Group (for example, with respect to employer contributions under a
REIT 401(k) Plan).

 

(c)       It is the intention of the Parties that the Transferred Employees and
their eligible dependents be placed in no worse a position but no better a
position than if they had remained participants in the group health plan of the
Behringer Group for the remainder of the applicable plan year. Following the
Closing Date, REIT I shall cause any and all pre-existing condition limitations,
eligibility waiting periods and evidence of

 

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insurability requirements under any REIT I Plans that are group health plans in
which such Transferred Employees and their eligible dependents shall participate
to be waived (but only to the extent that such Transferred Employees and their
eligible dependents would be covered under the applicable group health plan of
the Behringer Group).

 

(d)       As of the Closing, (i) REIT I hereby assumes all obligations and
Liabilities under COBRA (“COBRA Liabilities”) for each Transferred Employee (and
his/her dependents and beneficiaries) for a qualifying event occurring after the
Closing Date, and (ii) no member of the Behringer Group shall have any COBRA
Liabilities with respect to such Transferred Employees (and their dependents and
beneficiaries).

 

(e)       As of 12:00 A.M. September 1, 2012, (i) the election levels and the
coverage levels of the Transferred Employees shall apply under the REIT I FSA
Plans in the same manner as under the Behringer FSA Plans, and (ii) the
Transferred Employees shall be reimbursed from the REIT I FSA Plans for claims
incurred from and after 12:00 A.M. September 1, 2012 on the same basis and the
same terms and conditions as under the Behringer FSA Plans. Subject to a
reasonable blackout period for claims arising prior to the Closing Date, the
account balances of the Transferred Employees with respect to the plan year in
which the Closing Date occurs (whether positive or negative) (the “Transferred
Account Balances”) under the Behringer FSA Plans shall be transferred to one or
more REIT I FSA Plans. As soon as practicable after the Closing Date, and in any
event within thirty (30) Business Days after the amount of the Transferred
Account Balances is determined, Services Holdings shall pay or cause to be paid
to REIT I, in cash, the net aggregate amount of the Transferred Account Balances
of such Transferred Employees, if such amount is positive, and REIT I shall pay
Services Holdings (or its designee), in cash, the net aggregate amount of the
Transferred Account Balances of such Transferred Employees, if such amount is
negative. All adjustments shall be based upon the assumption that the flexible
spending account plans for both the Behringer Group and REIT I and its
Affiliates are calendar year plans. For purposes of illustration, if a
Transferred Employee who made a $5,000 annual election with respect to the
Behringer FSA Plan spent all $5,000 prior to June 30 and was transferred on
June 30, such employee would have a negative account balance of $2,500.

 

(f)       As of the Closing Date, Transferred Employee shall cease participation
in the Behringer Harvard Employee Retirement Plan (the “Behringer 401(k) Plan”).
Further, effective as of this date, Service Providers will take or cause to be
taken any and all actions required to fully vest such Transferred Employees in
their account balances in such Behringer 401(k) Plan. Lastly, as of the Closing
Date or as soon as practicable thereafter, Service Providers shall cause the
Behringer 401(k) Plan, in a trust to trust transfer, to transfer the account
balances of the Transferred Employees in the Behringer 401(k) Plan to the Metis
Property Investments, LLC 401(k) Profit Sharing Plan (the “REIT I 401(k) Plan”)
and REIT I shall cause the REIT I 401(k) Plan to accept such asset transfer. The
Service Providers and REIT I shall take any actions necessary and required by
Law and the terms of each such plan to effectuate such transfer.

 

(g)       The Service Providers shall be responsible for and shall bear and
discharge all Liabilities for any and all claims incurred or made by Transferred

 

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Employees (as well as any other employee of the Service Providers) and their
dependents and beneficiaries on and before 11:59 P.M. August 31, 2012 under any
Behringer Plan (“Excluded Employee Claims”). REIT I hereby shall be responsible
for and discharge all Liabilities for any and all claims incurred on or after
12:00 A.M. September 1, 2012 by Transferred Employees (and their dependents and
beneficiaries) under REIT I Plans. For purposes of this Section 5.4(g), a claim
shall be deemed incurred, in the case of health benefits (which includes
hospital, surgical, medical, dental or vision benefits), when the services that
are the subject of the claim are performed or provided and, in the case of other
benefits (such as life insurance, sickness, accident, severance and disability
benefits), when an event has occurred or when a condition has been diagnosed
that entitles the individual to the benefit.

 

SECTION 5.5                                                  No Third Party
Beneficiaries.

 

No provision of this Article V shall create any third party beneficiary or other
rights in any employee or former or future employee (including any beneficiary
or dependent thereof) of the Behringer Group or REIT I or any of its Affiliates
(including any Transferred Employee) in respect of employment, continued
employment (or resumed employment), compensation, benefits, or severance, and no
provision of this Article V shall create any such rights in any such Persons in
respect of any compensation, benefits, or severance that may be provided,
directly or indirectly, under any Behringer Plan or any plan or arrangement
which may be established by REIT I or any of its Affiliates. No provision of
this Agreement is intended as, nor shall any provision of this Agreement
constitute, the establishment, amendment, or modification of, or supplement to,
any employee benefit plan subject to ERISA, any other Behringer Plan or REIT I
Plan, or with respect to the LTIP Program. No provision of this Agreement shall
constitute a limitation on the rights of the Behringer Group, REIT I or their
respective Affiliates to establish, amend, modify, supplement, or terminate
after the Closing Date any such plans or arrangements.

 

ARTICLE VI
ADDITIONAL AGREEMENTS

 

SECTION 6.1                                                  Reservation of
REIT I Common Stock.

 

REIT I has available and REIT I shall reserve and keep available at all times,
free of preemptive and other similar rights of stockholders, the requisite
aggregate number of authorized but unissued shares of REIT I Common Stock to
enable REIT I to timely effect the issuance and delivery in full to the holders
of the Series A Preferred Stock the shares of REIT I Common Stock issuable upon
the conversion of such Series A Preferred Stock, in any case prior to the
issuance to the holders of Series A Preferred Stock of such shares of REIT I
Common Stock.

 

SECTION 6.2                                                  Public Statements;
SEC Filings.

 

(a)                                  Press Releases. The Parties shall consult
with each other prior to issuing any press release or making any other public
statement with respect to this Agreement, any Ancillary Agreement, the
Transactions or the disclosure of an Estimated Per Share Value as contemplated
by Section 6.6, and shall not issue any such press release or public statement
prior to review and approval by REIT I and Services Holdings as the case may

 

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be, except that prior review and approval shall not be required if, in the
reasonable judgment of counsel to the party seeking to issue such press release
or make such public statement, prior review and approval would prevent the
timely dissemination of such release or statement in violation of applicable
Law, except that in such case the issuing party shall use its reasonable best
efforts to consult with the other party before issuing such release or making
such public statement.

 

(b)                                 REIT I SEC Filings. REIT I shall not file
with or furnish to the SEC any REIT I SEC Filing that includes disclosures
related to Services Holdings, the Service Providers, the Behringer Group, this
Agreement, any Ancillary Agreement, or the Transactions with respect to which
Services Holdings shall not previously have been advised and given a reasonable
opportunity to comment on the sections thereof that describe or otherwise relate
to Services Holdings, the Service Providers, the Behringer Group, this
Agreement, any Ancillary Agreement or the Transactions, in each case to the
extent practicable under the circumstances.

 

(c)                                  Required approvals under this Section 6.2
shall not be unreasonably withheld or delayed.

 

SECTION 6.3                                                  Confidentiality.

 

(a)                                  Subject to Section 6.3(b) below, the
Confidential Material will be kept confidential and will not, without the prior
written consent of the Providing Party, be disclosed by the Receiving Party or
its Representatives, in whole or in part, and will not be used by the Receiving
Party or its Representatives, directly or indirectly, for any purpose other than
in connection with this Agreement, any Ancillary Agreement or the Transactions,
or evaluating, negotiating or advising with respect to such matters. Moreover,
the Receiving Party agrees to transmit Confidential Material to its
Representatives only if and to the extent that the Representatives need to know
the Confidential Material for purposes of the transactions contemplated hereby
and are informed by the Receiving Party of the confidential nature of the
Confidential Material and of the terms of this Section 6.3. In any event, the
Receiving Party will be responsible for any actions by its Representatives which
are not in accordance with the provisions hereof.

 

(b)                                 Notwithstanding the foregoing, the Receiving
Party may reveal Confidential Material to any Governmental Authority if and only
if such information to be disclosed is (i) approved in writing by the Providing
Party for disclosure, (ii) in response to an informal request for information
from the SEC, provided that (A) the Receiving Party shall notify the Providing
Party of the existence, terms and circumstances surrounding the request and
(B) any Confidential Material so disclosed shall be disclosed on a confidential
basis and shall continue to be deemed Confidential Material for purposes of this
Agreement, or (iii) subject to Section 6.3(c), required by Law to be disclosed
by the Receiving Party.

 

(c)                                  In the event that the Receiving Party, any
of its Representatives or anyone to whom the Receiving Party or its
Representatives supply the Confidential Material is

 

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requested (by oral questions, interrogatories, requests for information or
documents, subpoena, civil or criminal investigative demand, any informal or
formal investigation by any Governmental Authority or otherwise in connection
with any legal process) or required by applicable Law to disclose any
Confidential Material, the Receiving Party agrees: (i) to promptly notify the
Providing Party of the existence, terms and circumstances surrounding a request
or requirement; (ii) to consult with the Providing Party on the advisability of
taking available legal steps to resist or narrow the request or requirement; and
(iii) if disclosure of the information nonetheless is required by Law to be
disclosed by the Receiving Party, then the Receiving Party shall give prior
written notice of such required disclosure to the Providing Party and the
Receiving Party shall cooperate with the Providing Party to limit the extent of
such disclosure, including by submission of a request for confidential treatment
with the SEC for Confidential Materials contained in REIT I SEC Filings.

 

(d)                                 The provisions of Section 6.3 shall expire
and cease to have any further force and effect on the third anniversary of the
Closing Date.

 

SECTION 6.4                                                  Behringer Nominees.

 

(a)                                  So long as the members of the Behringer
Group and their respective employees and any direct and indirect owners of
Equity Interests in the LTIP (including employees participating in the LTIP
Program) or Behringer Harvard Holdings, LLC hold, in the aggregate, at least
2,500 shares of Series A Preferred Stock, at any time at which REIT I’s
stockholders shall have the right to, or shall, vote for or consent in writing
to the election of directors of REIT I (whether at an annual meeting of REIT I’s
stockholders, a special meeting of REIT I’s stockholders called for the purpose
of electing directors of REIT I or at any adjournment or postponement thereof),
then, and in each such event, Services Holdings shall have the right to
designate two (2) nominees to serve as directors (the “Behringer Nominees”);
provided, however, that if the Nominating Committee of the REIT I Board deems
any such Behringer Nominee not reasonably acceptable, the REIT I Board may
require that Services Holdings nominate an alternative director, it being
acknowledged and agreed that the individuals set forth on Schedule 6.4(a) are
deemed reasonably acceptable to the Nominating Committee of the REIT I Board;
provided, however, that no such designation may be made if, following such
election, there would be more than two (2) Behringer Nominees serving as
directors on the REIT I Board.

 

(b)                                 At each annual meeting of REIT I’s
stockholders, special meeting of REIT I’s stockholders called for the purpose of
electing directors of REIT I, and at any adjournment or postponement thereof,
the REIT I Board (or a duly authorized committee thereof) shall (i) nominate
each Behringer Nominee for election as a member of the REIT I Board and
(ii) include each Behringer Nominee in any proxy statement and related materials
used by REIT I in respect of the election to which such nomination pertains.
REIT I agrees to use its reasonable best efforts (to the extent within the
control of REIT I) to cause the Behringer Nominees to be elected to the REIT I
Board. Subject to the REIT I Organizational Documents, if a Behringer Nominee is
not elected a member of the REIT I Board at such a stockholders meeting,
(i) Services Holdings may designate a replacement Behringer Nominee to serve as
director; provided, however, that such

 

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Behringer Nominee must be deemed reasonably acceptable by the Nominating
Committee of the REIT I Board; provided further, that the individuals listed on
Schedule 6.4(b) are deemed reasonably acceptable by the Nominating Committee of
the REIT I Board, and (ii) the REIT I Board shall appoint (as promptly as
practicable) such replacement Behringer Nominee to the REIT I Board, including,
if necessary, by adding additional directorships to the REIT I Board. Upon the
death, resignation or removal of a Behringer Nominee that is a member of the
REIT I Board (or has been nominated), Services Holdings may designate a
replacement Behringer Nominee to fill such vacancy (or nomination), and REIT I
shall appoint such replacement Behringer Nominee to the REIT I Board as promptly
as practicable (or use the same reasonable best efforts to cause such Behringer
Nominee to be elected to the REIT I Board as it was obligated to use with
respect to the original Behringer Nominee). Notwithstanding the foregoing or
anything else in this Agreement to the contrary, (A) there shall not be more
than two (2) Behringer Nominees serving as directors on the REIT I Board at any
time, and (B) REIT I need not take any action under this Section 6.4(b) if such
would be the case.

 

(c)                                  For so long as the Consulting Agreement
remains in effect, Services Holdings hereby designates Robert S. Aisner as one
of the Behringer Nominees.

 

(d)                                 Each Behringer Nominee who (i) serves on the
REIT I Board, (ii) does not serve as an officer of REIT I, and (iii) does not
provide consulting services to REIT I other than commensurate with such
Behringer Nominee’s service as a director (including Mr. Aisner if he ceases to
serve as Chief Executive Officer of REIT I and ceases to provide services to
REIT I pursuant to the Consulting Agreement), shall be entitled to compensation
equivalent to the compensation generally provided to a non-employee director of
the REIT I Board who is not a Behringer Nominee from time to time.

 

SECTION 6.5                                                  Status of the
Existing Advisory Agreement.

 

Notwithstanding the amendment and restatement of the Existing Advisory Agreement
into the Administrative Services Agreement, certain provisions of the Existing
Advisory Agreement shall continue in full force and effect as set forth in this
Section 6.5.

 

(a)                                  Article V (Indemnification) of the Existing
Advisory Agreement, including indemnification of Advisor for contingent
Liabilities that arise or become due after Closing, remains in full force and
effect until the applicable statute of limitations.

 

(b)                                 Subject to Section 2.2(a) of this Agreement,
Section 6.15 (Non-Solicitation) of the Existing Advisory Agreement as included
in that certain First Amendment to the Existing Advisory Agreement remains in
full force and effect in accordance with its terms without limitation.

 

(c)                                  Subject to Section 6.5(f) below, the
provisions of the Existing Advisory Agreement that require REIT I to pay
Advisory Fees and Expenses to Advisor shall immediately terminate and be of no
further force and effect upon payment in full of the Final Advisory Fees and
Expenses Payment in accordance with Section 2.4(b), and the Final Advisory Fees
and Expenses Payment shall be the final and binding payment with

 

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respect to any and all Advisory Fees and Expenses for services provided by
Advisor prior to the Closing.

 

(d)                                 Subject to Section 6.5(f) below, at Closing,
Section 3.05 (Audit of Advisor Payments) of the Existing Advisory Agreement
shall terminate upon payment of the Final Advisory Fees and Expenses Amount. For
the avoidance of doubt, no Person shall have any audit rights pursuant to such
Section 3.05, and REIT I shall not have any right to claim overpayment or seek
reimbursement, with respect to Advisory Fees and Expenses (or other amounts)
paid to Advisor with respect to services provided prior to the Closing.

 

(e)                                  Any reservation of rights by Advisor under
the Existing Advisory Agreement shall continue in full force and effect. Advisor
and REIT I acknowledge that the amount of $31,900,000 shall be included in
amounts for which the Advisor will receive credit in respect of any overpayment
to the Advisor under Section 3.05 of the Existing Advisory Agreement.

 

(f)                                    Notwithstanding the foregoing,

 

(i)                                     the Existing Advisory Agreement remains
in full force in effect and shall continue in full force and effect with respect
to Two Briarlake (including Section 3.05) and

 

(ii)                                  REIT I shall pay to Advisor the fees
payable in connection with services rendered in the development of Two Briarlake
under Section 3.01(b) and Section 3.01(f) (with respect to development and
construction financing, but not any subsequent financing, whether permanent or
not) of the Existing Advisory Agreement (the “Two Briarlake Development Fees”)

 

until the earlier to occur of (x) REIT I ceasing development of Two Briarlake in
a manner that is reasonably consistent with the Two Briarlake Approved Plan and
(y) Advisor having received the last payment from REIT I with respect to Two
Briarlake pursuant to the Existing Advisory Agreement. Consequently, REIT I
shall pay all such Advisory Fees and Expenses relating to the development and
construction financing (but not any subsequent financing, whether permanent or
not) of Two Briarlake that become payable under the Existing Advisory Agreement
after the date hereof. For the avoidance of doubt, when expenses with respect to
Two Briarlake are paid by or on behalf of REIT I or its Affiliates, the Two
Briarlake Development Fees relating thereto payable under Section 3.01(b) of the
Existing Advisory Agreement shall become due and payable in accordance with the
terms of the Existing Advisory Agreement, and when any development and
construction financing (but not any subsequent financing, whether permanent or
not) with respect to Two Briarlake is originated, the Two Briarlake Development
Fees relating thereto payable under this Section 3.01(f) of the Existing
Advisory Agreement shall become due and payable in accordance with the terms of
the Existing Advisory Agreement. No Two Briarlake Development Fee shall be
payable in respect of any such subsequent financing (whether permanent or not).
When expenses with respect to Two Briarlake are paid by REIT I, the Advisory
Fees and Expenses relating thereto shall become due and payable in accordance
with the terms of the

 

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Existing Advisory Agreement. For the avoidance of doubt, Advisory Fees and
Expenses with respect to Two Briarlake that are payable as of the Closing Date
shall be included in the Advisory Fees and Expenses Annex, and Advisory Fees and
Expenses with respect to Two Briarlake that are not currently payable as of the
Closing Date shall not be included in the Advisory Fees and Expenses Annex.

 

SECTION 6.6                                                  Determination of
Estimated Per Share Value.

 

(a)                                  The REIT I Board shall in good faith
determine an estimated per share value of the REIT I Common Stock (an “Estimated
Per Share Value”) in accordance with Section 6.6(b) during the fourth quarter of
2012 and at least once during each subsequent year until the earliest to occur
of (i) a Listing Event, (ii) a Change of Control or (iii) the conversion of all
outstanding shares of Series A Preferred Stock into shares of REIT I Common
Stock.

 

(b)                                 Each determination of Estimated Per Share
Value pursuant to Section 6.6(a) shall be made in good faith by the REIT I Board
consistent with the practice, policies, and procedures (including the Estimated
Valuation Policy) utilized by the REIT I Board in connection with determining
the December 16, 2011 estimated per share value of the REIT I Common Stock;
provided that, for each subsequent Estimated Per Share Value, the REIT I Board
may in good faith revise its method for calculating the Estimated Per Share
Value.

 

(c)                                  Promptly after the final determination by
the REIT I Board of an Estimated Per Share Value in accordance with this
Section 6.6, REIT I shall publicly disclose such Estimated Per Share Value and
shall also disclose such Estimated Per Share Value in its Annual Report on
Form 10-K for the fiscal year ended December 31, 2012 and each subsequent year
in which such Estimated Per Share Value is calculated pursuant to this
Section 6.6.

 

SECTION 6.7                                                  Distributions under
the LTIP Program.

 

(a)                                  Acknowledgment. Services Holdings
acknowledges that it will distribute to LTIP and LTIP intends to distribute to
its members (including Specified Employees participating in the LTIP Program)
(i) the Series A Preferred Stock, (ii) any REIT I Common Stock or other
securities issued upon conversion of the Series A Preferred Stock, and
(iii) proceeds from the sales of such Series A Preferred Stock, REIT I Common
Stock and/or other securities (as the case may be) consistent with the current
terms of the LTIP Program. For the avoidance of doubt, neither Services Holdings
nor LTIP intends to distribute the Series A Preferred Stock, REIT I Common Stock
issued upon conversion of the Series A Preferred Stock or proceeds from the
sales of such Series A Preferred Stock and/or REIT I Common Stock prior to the
first anniversary of the Closing Date or while any Claim with respect to or
arising out of the Transactions is pending.

 

(b)                                 No Third Party Beneficiaries or LTIP Program
Modifications. No provision of this Section 6.7 shall create any third party
beneficiary or other rights in any

 

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owner of Equity Interests of LTIP or any participant or former participant in
any LTIP Program. No provision of this Agreement is intended as, nor shall any
provision of this Agreement constitute, an amendment to the operating agreement
of LTIP or the LTIP Program. No provision of this Agreement shall constitute a
limitation on rights to amend, modify or terminate after the Closing Date to the
operating agreement of LTIP or the LTIP Program.

 

SECTION 6.8                                                  Support Services
Agreements.

 

In the event that REIT I desires services from any member of the Behringer Group
in addition to the services provided under the Administrative Services Agreement
and the Amended and Restated Property Management Agreement and such member of
the Behringer Group desires to provide such services, such member of the
Behringer Group and REIT I may enter into one or more support service agreements
(the “Support Services Agreements”) whereby such member of the Behringer Group
will provide such additional services. The term of any Support Services
Agreement, the consideration payable for such additional services, and the other
terms and conditions of such Support Services Agreements shall be as REIT I and
such member of the Behringer Group mutually agree.

 

SECTION 6.9                                                  Tax Matters.

 

(a)                                  Tax Returns. REIT I and Services Holdings
shall prepare, and timely file or cause to be filed their respective Tax Returns
and any Tax Returns of their respective Subsidiaries that are required to be
filed, including as a result of any extension of time to file, after the Closing
Date.

 

(b)                                 Tax Matters Generally.

 

(i)                                     Cooperation. Each of REIT I, on the one
hand, and Services Holdings and the Service Providers, on the other hand, will
provide the other with such assistance and non-privileged information relating
to their respective businesses as may reasonably be requested in connection with
the preparation of any Tax Return or the performance of any audit, examination
or any other proceeding by any Governmental Authority, whether conducted in a
judicial or administrative forum.

 

(ii)                                  Transfer Taxes. All transfer, documentary,
sales, use, stamp, registration and other similar Taxes and fees (including any
interest, penalty or addition thereto) incurred in connection with this
Agreement, the Ancillary Agreements and the Transactions (the “Transfer Taxes”),
shall be paid 50% by Advisor and 50% by REIT I when due, and the Party required
by applicable Law will file all necessary Tax Returns and other documentation
with respect to all such Transfer Taxes and, if required by applicable Law, the
other Party or Parties will join in the execution of any such Tax Returns and
other documentation. For the avoidance of doubt, Transfer Taxes shall not
include income or franchise Taxes or other Taxes based on the net or gross
income of any Party, nor shall it include any standard corporate business
license or fees required of any Party or its respective Affiliates incurred to
carry out its normal business.

 

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SECTION 6.10                                            Requests for
Information.

 

(a)                                  REIT I shall promptly respond to requests
of Services Holdings or any other member of the Behringer Group, and to requests
of broker-dealers, agents/representatives of broker-dealers, and other offering
participants who have entered into a confidentiality agreement substantially
similar (as to content) to the current confidentiality agreement used by the
Behringer Group, for information and make employees reasonably available,
consistent with past practice, until the earliest to occur of a Listing Event or
a Change of Control.

 

(b)                                 Each of Services Holdings and Service
Providers shall (and shall cause any other member of the Behringer Group to)
respond promptly to reasonable requests of REIT I or BH OP, and to reasonable
requests of agents/representatives of REIT I or BH OP, including their
independent accountants, for information, in each case consistent with past
practice, and shall provide reasonable access to REIT I, BH OP or their
agents/representatives, as applicable, to books, records and information
relating to REIT I or any of its Affiliates, including in connection with the
assessment or audit of internal control of financial reporting and management’s
assessment thereof.

 

ARTICLE VII
CLOSING DELIVERIES

 

SECTION 7.1                                                  Closing Deliveries
of REIT I.

 

Simultaneous with the execution of this Agreement, REIT I has delivered or
caused to be delivered to Services Holdings and/or the Service Providers:

 

(a)                                  a duly executed counterpart of a bill of
sale with respect to the Purchased Assets, in form and substance reasonably
satisfactory to Services Holdings and the Service Providers (the “Bill of
Sale”), executed by REIT I;

 

(b)                                 a duly executed counterpart of the
Administrative Services Agreement in substantially the form attached hereto as
Exhibit B (the “Administrative Services Agreement”), executed by REIT I;

 

(c)                                  a duly executed counterpart of the Sixth
Amended and Restated Property Management Agreement in substantially the form
attached hereto as Exhibit C (the “Amended and Restated Property Management
Agreement”), executed by both REIT I and BH OP;

 

(d)                                 a duly executed counterpart of the
Registration Rights Agreement in substantially the form attached hereto as
Exhibit E (the “Registration Rights Agreement”), executed by REIT I;

 

(e)                                  a duly executed counterpart of the
Consulting Agreement with Robert S. Aisner in substantially the form attached
hereto as Exhibit F (the “Consulting Agreement”), executed by REIT I;

 

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(f)                                    a duly executed counterpart of the
Service Mark Licensing Agreement in substantially the form attached hereto as
Exhibit G (the “License Agreement”), executed by REIT I;

 

(g)                                 instruments of authority from the Special
Committee, the REIT I Board, or such other committee of the REIT I Board, in
form and substance reasonably acceptable to Services Holdings, authorizing this
Agreement, the Ancillary Agreements, and the Transactions; and

 

(h)                                 a certificate by Scott W. Fordham, in his
capacity as Chief Operating and Financial Officer of REIT I, that the
representations and warranties of REIT I made under Article III are accurate as
of Closing, in form and substance reasonably satisfactory to Services Holdings.

 

SECTION 7.2                                                  Closing Deliveries
of Services Holdings and the Service Providers.

 

Simultaneous with the execution of this Agreement, Services Holdings and/or the
Service Providers have delivered or caused to be delivered to REIT I:

 

(a)                                  a duly executed counterpart of the Bill of
Sale, in form and substance reasonably satisfactory to Services Holdings and the
Service Providers, executed by Advisor;

 

(b)                                 a duly executed counterpart of the
Administrative Services Agreement, executed by Advisor;

 

(c)                                  a duly executed counterpart Amended and
Restated Property Management Agreement, executed by Property Manager;

 

(d)                                 a duly executed stock power with respect to
conveyance of the Existing Convertible Shares to REIT I, executed by Advisor
(the “Stock Power”);

 

(e)                                  a duly executed counterpart of the
Registration Rights Agreement, executed by Services Holdings;

 

(f)                                    a duly executed counterpart of the
Consulting Agreement, executed by Robert S. Aisner;

 

(g)                                 a duly executed counterpart of the License
Agreement, executed by Behringer Harvard Holdings, LLC;

 

(h)                                 instruments of authority from Services
Holdings and the Service Providers in form and substance reasonably satisfactory
to REIT I authorizing this Agreement, the Ancillary Agreements, and the
Transactions; and

 

(i)                                     a certificate by an executive officer of
each of Services Holdings and the Service Providers, in his or her capacity as
such, that the representations and warranties

 

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of Services Holdings and the Service Providers made under Article IV are
accurate as of Closing, in form and substance reasonably satisfactory to REIT I.

 

ARTICLE VIII
SURVIVAL AND REMEDY; INDEMNIFICATION

 

SECTION 8.1                                                  Survival.

 

(a)                                  The covenants and agreements to be
performed after the Closing (including, without limitation, this Article VIII)
shall not expire until all obligations have been fully discharged with respect
thereto.

 

(b)                                 The representations and warranties of REIT I
contained in Article III shall survive until the first anniversary of the
Closing Date; provided, that the representations and warranties contained in
Section 3.1 (Organization and Qualification), Section 3.2 (Capitalization),
Section 3.3 (Issuance of Securities), Section 3.4(a) and (b) (Authority), and
Section 3.6 (Brokers and Finders) (collectively, the “REIT I Fundamental
Representations”) shall survive until the expiration of the applicable statute
of limitations with respect to the matters addressed in such sections.

 

(c)                                  The representations and warranties of the
Service Providers contained in Article IV shall survive until the first
anniversary of the Closing Date; provided, that the representations and
warranties contained in Section 4.1 (Organization), Section 4.2(a) (Authority),
Section 4.6 (Title to Purchased Assets), Section 4.7 (Brokers and Finders), and
Section 4.8 (Noncontravention) (collectively, the “Service Providers Fundamental
Representations,” and together with the REIT I Fundamental Representations, the
“Fundamental Representations”) each shall survive until the expiration of the
applicable statute of limitations with respect to the matters addressed in such
sections.

 

(d)                                 If written notice of a bona fide claim for
indemnification under Section 8.2 (an “Indemnity Claim”) has been given in
accordance with this Agreement prior to the expiration of the applicable
representations, warranties, covenants or agreements, then the applicable
representations, warranties, covenants or agreements shall survive as to such
claim, until such claim has been finally resolved.

 

SECTION 8.2                                                  Indemnification.

 

(a)                                  By REIT I. From and after Closing, and
subject to the limitations set forth in this Article VIII, Services Holdings,
the Service Providers and each member of the Behringer Group and (without
duplication) their Affiliates, successors and assigns and each of the respective
officers, directors, managers, employees and agents of the foregoing
(collectively, the “Behringer Indemnified Parties”) shall be indemnified by
REIT I, to the maximum extent permitted by Texas Law, from and against any and
all Damages which arise out of, result from or are incident to:

 

(i)                                     the breach or inaccuracy of any of the
REIT I Fundamental Representations;

 

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(ii)                                  the breach or inaccuracy of any
representation or warranty made by REIT I under Article III of this Agreement,
other than the REIT I Fundamental Representations;

 

(iii)                               the breach of any covenant or agreement
contained in this Agreement by REIT I;

 

(iv)                              PTO Liabilities; and

 

(v)                                 any Covered Claim.

 

(b)                                 By Services Holdings. From and after
Closing, and subject to the limitations set forth in this Article VIII, each of
Services Holdings and each Service Provider shall indemnify REIT I and its
Affiliates, successors and assigns and each of the respective officers,
directors, managers, employees and agents of the foregoing (collectively, the
“REIT I Indemnified Parties”), to the maximum extent permitted by Texas Law,
from and against any and all Damages, which Damages arise out of, result from or
are incident to:

 

(i)                                     the breach or inaccuracy of any of the
Service Providers Fundamental Representations by Services Holdings or such
Service Provider;

 

(ii)                                  the breach or inaccuracy of any
representation or warranty made by Services Holdings or the Service Providers
under Article IV of this Agreement, other than the Service Providers Fundamental
Representations, by Services Holdings or such Service Provider;

 

(iii)                               the breach of any covenant or agreement
contained in this Agreement by Services Holdings or such Service Provider;

 

(iv)                              the Excluded Liabilities; and

 

(v)                                 any Licensing Claim; provided, however, that
this Section 8.2(b)(v) shall not apply in respect of any Licensing Claim brought
by or on behalf of REIT I or an Affiliate of REIT I.

 

(c)                                  For purposes of determining the amount of
any Damages related to a breach or inaccuracy of any representation or warranty
made by REIT I under Article III or by Services Holdings or the Service
Providers under Article IV (but not whether any breach or misrepresentation has
occurred), the representations and warranties set forth in this Agreement shall
be considered without regard to any “material”, “Material Adverse Effect” or
similar qualifications set forth therein.

 

(d)                                 Procedures.

 

(i)                                     Any Person seeking any indemnification
under this Section 8.2 (an “Indemnified Party”) shall give the party from whom
indemnification is being sought (an “Indemnifying Party”) notice of any matter
which such Indemnified Party has

 

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determined has given or could give rise to a right of indemnification under this
Agreement as soon as reasonably practicable after the Person potentially
entitled to indemnification becomes aware of any fact, condition or event which
may give rise to Damages for which indemnification may be sought under this
Section 8.2. With respect to any Indemnity Claim by a Behringer Indemnified
Party, Services Holdings shall have sole and exclusive authority to act for and
in the name of the Indemnified Party. With respect to any Indemnity Claim by a
REIT I Indemnified Party, REIT I shall have sole and exclusive authority to act
for and in the name of the Indemnified Party. All notices given pursuant to this
Article VIII shall describe with reasonable specificity the nature of the
Indemnity Claim and the amount of Damages sought pursuant to such Indemnity
Claim to the extent then known; provided, however, that the failure to give such
notice shall not affect the rights of the Indemnified Party to indemnification
under this Article VIII, except to the extent that Indemnifying Party shall have
been actually prejudiced by reason of such failure.

 

(ii)                                  Upon a final determination (by agreement
of the Indemnifying Party or a final, non-appealable Judgment) that a payment is
due to the Indemnified Party under this Article VIII, and the failure of the
Indemnifying Party to pay such obligation within thirty (30) days of receipt by
the Indemnifying Party of the respective written demand for indemnification,
interest shall accrue at the Federal Funds Rate plus eight percent (8%) per
annum on the unpaid amount of the indemnification obligation from the date of
such written demand for indemnification until the indemnification obligation is
paid in full. All amounts owing under this Article VIII shall be paid by wire
transfer of immediately available funds to the account designated in writing by
the Indemnified Party entitled to such payment, promptly after receipt by the
Indemnifying Party of written notice from the Indemnified Party.

 

(iii)                               In connection with any Indemnity Claim that
results from or arises out of a third-party Claim against an Indemnified Party,
the following procedures in this clause (iii) shall apply. Subject to the
further provisions of this Section 8.2(d)(iii), the Indemnifying Party shall
have the right to defend, compromise and settle any third-party Claim in the
name of the Indemnified Party to the extent that the Indemnifying Party may be
liable to the Indemnified Party in connection therewith; provided, however, that
the Indemnifying Party shall not, without the prior written consent of the
Indemnified Party, which shall not be unreasonably withheld or delayed,
compromise or settle any Indemnity Claim (w) to the extent the Indemnified Party
would be required to make any payment in connection with such settlement, (x) to
the extent that the settlement includes an admission of guilt or wrongdoing by
the Indemnified Party, (y) to the extent the settlement would provide relief
consisting of anything other than money damages, or (z) to the extent that the
settlement does not include a provision where the plaintiff or claimant in the
matter fully releases the Indemnified Party from all liability; provided,
however, that if there exists a material conflict of interest that would make it
inappropriate for the Indemnifying Party to assume or control such defense, then
the Indemnified Party shall be entitled to retain its own counsel and control
the defense, at the expense of the Indemnifying Party, provided that the
Indemnifying Party shall not be obligated to pay the Expenses of more than one
separate counsel for all Indemnified Parties, taken together, except (A) to the
extent that local counsel are necessary or

 

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advisable for the conduct of such action or proceeding, in which case the
Indemnifying Party shall also pay the Expenses of any such local counsel, or
(B) to the extent that a conflict of interest exists between or among the
Indemnified Parties, in which case the Indemnifying Party shall pay the Expenses
of such additional counsels for the Indemnified Parties as necessary to avoid
such conflicts of interest; and provided further, that defense of the Claim and
the counsel selected by the Indemnifying Party to undertake the defense of the
Claim is approved without reservation/qualification by all carriers under
potentially available insurance coverage secured by the Indemnified Party and
such control of defense by the Indemnifying Party would not adversely affect (in
the reasonable judgment of the Indemnified Party) the availability of any such
insurance coverage. Subject to the provisions of this Section 8.2(c)(iii), the
Indemnifying Party shall be entitled to assume and control the defense of such
third-party Claim if it notifies the Indemnified Party in writing within 30 days
of delivery of the respective Indemnity Claim to the Indemnifying Party pursuant
to this Section 8.2. If the Indemnifying Party undertakes or assumes the defense
of a third-party Claim pursuant to this clause, the Indemnifying Party shall
keep the Indemnified Party (including as requested by any carriers under
potentially available liability insurance coverage secured by the Indemnified
Party) fully advised on an ongoing basis of matters material to the defense or
settlement of the Claim, including the drafting and filing of motions and
responses, the retention of expert witnesses, the taking and defending of
depositions, and matters of trial strategy. After notice from the Indemnifying
Party to the Indemnified Party of its election to assume the defense of such
third-party Claim and satisfaction of the conditions thereto, the Indemnifying
Party shall not be liable to the Indemnified Party under this Article VIII for
any Expenses of other counsel or any other Expenses with respect to the defense
of such third-party Claim, in each case incurred by the Indemnified Party in
connection with the defense of such third-party Claim. If the Indemnifying Party
controls the defense of a third-party Claim, the Indemnified Party shall have
the right to participate in the defense of such third-party Claim and to employ
its own counsel, and the Expenses of the Indemnified Party (including Expenses
of counsel) with respect to such participation shall be at the sole expense of
the Indemnified Party. If the Indemnifying Party shall undertake to defend any
third-party Claim, the Indemnified Party shall cooperate reasonably with the
Indemnifying Party and its counsel in the defense against such third-party
Claim. If the Indemnifying Party receiving notice of such third-party Claim
cannot defend or does not elect to defend such third-party Claim (as allowed
hereunder) within the time period specified above, the Indemnified Party shall
have the right, at the expense of the Indemnifying Party, to defend such
third-party Claim; provided, however, that in no event shall the Indemnifying
Party be responsible for the Expenses of more than one counsel for all
Indemnified Parties, except (i) to the extent that local counsel are necessary
or advisable for the conduct of such action or proceeding, in which case the
Indemnifying Party shall also pay the Expenses of any local counsel, or (ii) to
the extent that a conflict of interest exists between or among the Indemnified
Parties, in which case the Indemnifying Party shall pay the Expenses of such
additional counsels for the Indemnified Parties as necessary to avoid any such
conflicts of interest. The party controlling such defense shall keep the other
party advised of the status of such third-party Claim and the defense thereof
and shall consider recommendations made by the other party with respect thereto.
The Indemnified Party shall not agree to any settlement,

 

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compromise or discharge of, or admit any Liability with respect to, such
third-party Claim (to the extent that such settlement, compromise or discharge
obligates the Indemnifying Party to make any payment) without the prior written
consent of the Indemnifying Party, which consent shall not be unreasonably
withheld.

 

(iv)                              The Indemnified Party may at any time notify
the Indemnifying Party of its intention to settle or compromise any Claim
against the Indemnified Party solely at the Expense of the Indemnified Party
without the consent of the Indemnifying Party; provided, however, that the
Indemnifying Party shall have no further Liability in respect thereof under this
Article VIII or otherwise.

 

(v)                                 The Indemnifying Party shall be subrogated
to any claims or rights of the Indemnified Party as against any other Persons
with respect to any amount paid by the Indemnifying Party under this
Article VIII, other than (x) any current or former insurer of any Indemnified
Party or (y) in the case of a Behringer Indemnified Party, another Behringer
Indemnified Party. The Indemnified Party shall cooperate with the Indemnifying
Party (as reasonably requested by the Indemnifying Party) in the assertion by
the Indemnifying Party of any such claim (where subrogation has occurred)
against such other Persons.

 

SECTION 8.3                                                  Limitations.

 

Notwithstanding anything in this Agreement (including Article VIII) to the
contrary:

 

(a)                                  No amount of Damages shall be payable
pursuant to Section 8.2(a)(v) to any Behringer Indemnified Party unless the
aggregate amount of all Damages that are indemnifiable pursuant to
Section 8.2(a)(v) exceeds $1,500,000 (the “Behringer Deductible”), after which
the aggregate amount in excess of the Behringer Deductible shall thereafter be
recoverable in accordance with the terms hereof. For the avoidance of doubt, it
is acknowledged and agreed that the Behringer Deductible shall be calculated in
the aggregate with respect to all Indemnity Claims by the Behringer Indemnified
Parties, respectively, pursuant to Section 8.2(a)(v) and not separately.

 

(b)                                 In no event shall the aggregate amount of
Damages for which the Behringer Indemnified Parties shall be entitled to
indemnification pursuant to Section 8.2(a)(v) (but excluding, however,
Stockholder Claims) exceed $20,000,000. For the avoidance of doubt, it is
acknowledged and agreed that such $20,000,000 amount shall be calculated in the
aggregate with respect to all Indemnity Claims by the Behringer Indemnified
Parties, respectively, pursuant to Section 8.2(a)(v) and not separately.

 

(c)                                  No amount of Damages shall be payable
pursuant to Section 8.2(b)(v) to any REIT I Indemnified Party unless the
aggregate amount of all Damages that are indemnifiable pursuant to
Section 8.2(b)(v) exceeds $150,000 (the “REIT I Deductible”), after which the
aggregate amount in excess of the REIT I Deductible shall thereafter be
recoverable in accordance with the terms hereof. For the avoidance of doubt, it
is acknowledged and agreed that the REIT I Deductible shall be calculated in the
aggregate

 

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with respect to all Indemnity Claims by the REIT I Indemnified Parties,
respectively, pursuant to Section 8.2(b)(v) and not separately.

 

(d)                                 In no event shall any Indemnifying Party be
responsible and liable for any Damages or other amounts under this Article VIII
that are consequential, in the nature of lost profits, diminution in value,
damage to reputation or the like, special or punitive or otherwise not actual
Damages..

 

(e)                                  No Behringer Indemnified Party shall have
any right of contribution against REIT I or any of its Affiliates with respect
to any breach by a member of the Behringer Group of any of its representations,
warranties, covenants or agreements.

 

(f)                                    The amount of any Damages for which
indemnification is provided under this Article VIII shall be reduced by any
related recoveries actually recovered by the Indemnified Party under insurance
policies of the Indemnifying Party or other related payments actually received
from third parties other than, in the case of a Behringer Indemnified Party,
another Behringer Indemnified Party, and in the case of a REIT I Indemnified
Party, another REIT I Indemnified Party. However, and notwithstanding anything
else in this Agreement, it is agreed that under no circumstances shall any
Indemnified Party be required to prosecute any claim or seek payment or coverage
under any insurance policy of the Indemnified Party. In addition, all Expenses
and Damages incurred by the Behringer Indemnified Parties shall be counted
toward satisfaction of the Behringer Deductible even if a Behringer Indemnified
Party has received (or may receive) payment or reimbursement thereof under any
insurance policy maintained by a Behringer Indemnified Party.

 

(g)                                 Each party agrees that to the extent any
representation or warranty of any other party made in this Agreement is, to the
Knowledge of such party on or prior to the Closing Date, untrue or incorrect,
such party shall have no rights under this Article VIII by reason of such
untruth or inaccuracy.

 

(h)                                 For the avoidance of doubt, nothing in this
Agreement shall give any Person a right to indemnification under this Agreement
with respect to any Damages or Claims to the extent such Damages or Claims arise
out of the performance or non-performance of any party under any Ancillary
Agreement.

 

SECTION 8.4                                                  Contribution.

 

If the indemnification provided for in this Article VIII for any reason is held
by a court of competent jurisdiction or by an arbitrator to be unavailable to an
Indemnified Party in respect of any Damages arising from or relating to a Claim,
then the Indemnifying Party, in lieu of indemnifying an Indemnified Party
hereunder, shall, to the extent permitted by applicable Law, contribute to the
amount paid or payable by the Indemnified Party as a result of such Damages
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Indemnifying Party (taking into account all of the transactions
and agreements contemplated by this Agreement, which are intended to allow
REIT I to become self-managed and to allow the Behringer Parties to continue to
receive fees and other amounts pursuant to this Agreement and

 

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during the term of the Amended and Restated Property Management Agreement and
Administrative Services Agreement) and the Indemnified Party from the
transactions contemplated by this Agreement, or (ii) if the allocation provided
by clause (i) above is not permitted by applicable Law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Indemnifying Party and the
Indemnified Party in connection with the action or inaction which resulted in
such Damages, as well as any other relevant equitable considerations. The
Indemnifying Party and the Indemnified Party agree that it would not be just and
equitable if contribution pursuant to this Section 8.4 were determined by pro
rata or per capita allocation or by any other method of allocation which does
not take account of the equitable considerations referred to in the immediately
preceding sentence.

 

SECTION 8.5                                                  Exclusivity.

 

Except with respect to claims based on actual fraud and subject to
Section 8.3(h), the rights of the Indemnified Parties under this Article VIII
shall be the sole and exclusive remedies of the Indemnified Parties and their
respective Affiliates with respect to any and all Damages or Claims relating to
or arising out of or resulting from this Agreement; provided, however, that
solely in the case of a Behringer Indemnified Party who is both an individual
and a member of the Behringer Group, rights of indemnification under
Section 8.2(a)(v) and rights of indemnification under other sources (including
rights under any insurance policy, REIT I Organizational Document,
indemnification agreement, or Contract) are not mutually exclusive, and if and
to the extent that such individual is entitled to indemnification with respect
to Damages both under this Agreement and such other source, such individual may
pursue such indemnification claims under this Agreement or such other source or
both; provided further, however, that any recovery with respect to such
indemnification claims shall be limited to the actual amount of such
individual’s Damages, regardless of the number of sources on which such
individual’s indemnification claims may be based. For the avoidance of doubt and
notwithstanding the forgoing, (a) any Behringer Indemnified Party may be
subrogated to the rights of any other Behringer Indemnified Party with respect
to indemnification under this Agreement, including any rights of such
subrogating Behringer Indemnified Party to seek indemnification with respect to
Damages arising out of the advancement of expenses by such Behringer Indemnified
Party to the subrogated Behringer Indemnified Party with respect to Claims for
which the subrogated Behringer Indemnified Party is entitled to indemnification
under this Agreement, and (b) any REIT I Indemnified Party may be subrogated to
the rights of any other REIT I Indemnified Party with respect to indemnification
under this Agreement, including any rights of such subrogating REIT I
Indemnified Party to seek indemnification with respect to Damages arising out of
the advancement of expenses by such REIT I Indemnified Party to the subrogated
REIT I Indemnified Party with respect to Claims for which the subrogated REIT I
Indemnified Party is entitled to indemnification under this Agreement.

 

SECTION 8.6                                                  Insurance Coverage.

 

REIT I shall purchase at or prior to the Closing a six-year prepaid “tail”
policy having terms and conditions providing equivalent or more favorable
benefits (from the perspective of insured persons other than REIT I) as the
liability insurance policies maintained by REIT I as of

 

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the Closing for all Persons who are insured persons as of the Closing under such
policies with respect to matters arising on or prior to the Closing Date.

 

ARTICLE IX
GENERAL PROVISIONS

 

SECTION 9.1                                                  Notices.

 

Any notice, report, approval, authorization, waiver, consent or other
communication (each, a “Notice”) required or permitted to be given hereunder
shall be in writing and shall be deemed given or delivered: (i) when delivered
personally; (ii) one business day following deposit with a recognized overnight
courier service that obtains a receipt, provided such receipt is obtained, and
provided further that the deposit occurs prior to the deadline imposed by such
service for overnight delivery; (iii) when transmitted, if sent by electronic
mail, provided a read receipt is delivered to the sender, in each case provided
such communication is addressed to the intended recipient thereof as set forth
below:

 

If to REIT I, to:

 

Behringer Harvard REIT I, Inc.
c/o Special Committee of the Board of Directors
17300 Dallas Parkway

Suite 1010

Dallas, Texas 75248
Attention: Telisa Webb Schelin
Fax: (214) 365-7112

Email: tschelin@behringerharvard.com

 

with copies (which shall not constitute notice) to:

 

Proskauer Rose LLP

Eleven Times Square

New York, New York 10036

Attention:  Peter M. Fass
James P. Gerkis

Fax: (212) 969-2900

Email:    pfass@proskauer.com
jgerkis@proskauer.com

 

and:

 

Shefsky & Froelich, Ltd.
111 East Wacker

Suite 2800

Chicago, Illinois 60601
Attention: Michael J. Choate

Fax: (312) 275-7554

Email: mchoate@shefskylaw.com

 

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If to the Service Providers or Services Holdings:

 

Behringer Harvard REIT I Services Holdings
15601 Dallas Parkway

Suite 600

Addison, Texas 75001
Attention: Robert S. Aisner
Fax: (214) 655-1610

Email: baisner@behringerharvard.com

 

with copies (which shall not constitute notice) to:

 

Behringer Harvard Holdings
15601 Dallas Parkway

Suite 600

Addison, Texas 75001
Attention: Stanton P. Eigenbrodt
Fax: (214) 655-1610

Email: seigenbrodt@behringerharvard.com

 

and:

 

Jenner & Block LLP
353 N. Clark Street
Chicago, Illinois 60654

Attention:  Donald E. Batterson
Jeffrey R. Shuman

Fax: (312) 923-2707

Email:     dbatterson@jenner.com
jshuman@jenner.com

 

Either party shall, as soon as reasonably practicable, give Notice in writing to
the other Party of a change in its address for the purposes of this Section 9.1.
The failure of any Party to give notice shall not relieve any other Party of its
obligations under this Agreement except to the extent that such Party is
actually prejudiced by such failure to give notice.

 

SECTION 9.2                                                  Interpretation.

 

(a)                                  For purposes of this Agreement, (i) the
words “include,” “includes” and “including” and the words “such as” shall be
deemed to be followed by the words “without limitation,” (ii) the word “or” is
not exclusive and (iii) the words “herein”, “hereof”, “here by”, “hereto” and
“hereunder” refer to this Agreement as a whole. Unless the context otherwise
requires, references herein: (x) to Articles, Sections, Exhibits and Schedules
mean the Articles and Sections of, and the Exhibits and Schedules attached to,
this Agreement; (y) to an agreement, instrument or other document means such
agreement, instrument or other document as amended, supplemented and modified
from

 

40

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time to time to the extent permitted by the provisions thereof and by this
Agreement; and (z) to a statute means such statute as amended from time to time
and includes any successor legislation thereto and any regulations promulgated
thereunder. Words used herein regardless of the gender specifically used, shall
be deemed and construed to include any other gender, masculine, feminine or
neuter, as the context requires.

 

(b)                                 The Schedules and Exhibits referred to
herein shall be construed with and as an integral part of this Agreement to the
same extent as if they were set forth verbatim herein. Titles to Articles and
headings of Sections are inserted for convenience of reference only and shall
not be deemed a part of or to affect the meaning or interpretation of this
Agreement.

 

(c)                                  The REIT I disclosure schedule (the “REIT I
Disclosure Schedule”) to this Agreement shall be arranged in sections and
subsections corresponding to the numbered and lettered sections contained in
Article III. The disclosures in any section or subsection of the REIT I
Disclosure Schedule shall qualify other sections and subsections in Article III
only to the extent it is clear from a reading of the disclosure that such
disclosure is applicable to such other sections and subsections.

 

(d)                                 The disclosure schedule of the Service
Providers (the “Service Provider Disclosure Schedule”) to this Agreement shall
be arranged in sections and subsections corresponding to the numbered and
lettered sections contained in Article IV. The disclosures in any section or
subsection of the Service Provider Disclosure Schedule shall qualify other
sections and subsections in Article IV only to the extent it is clear from a
reading of the disclosure that such disclosure is applicable to such other
sections and subsections.

 

SECTION 9.3                                                  Choice of Law;
Venue.

 

The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of Texas, and venue for any action brought
with respect to any claims arising out of this Agreement shall be brought
exclusively in Dallas County, Texas.

 

SECTION 9.4                                                  Disputes.

 

If there shall be a dispute between REIT I and/or BH OP, on the one hand, and
any member of the Behringer Group, on the other, relating to this Agreement or
the Transactions resulting in litigation or arbitration, the prevailing party in
such litigation or arbitration shall be entitled to recover from the other party
to such proceeding such amount as the court or arbitrator shall fix as
reasonable attorneys’ fees.

 

SECTION 9.5                                                  Entire Agreement.

 

This Agreement and the Exhibits and Annexes referred to herein and the documents
delivered pursuant hereto and the Disclosure Schedules, contain the entire
understanding of the Parties with regard to the subject matter contained herein
or therein, and supersede all prior agreements, understandings or letters of
intent between or among the Parties, inducements and

 

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conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof.

 

SECTION 9.6                                                  Amendment.

 

This Agreement may not be amended except by an instrument in writing signed on
behalf of REIT I (as authorized by the REIT I Board or an applicable committee
thereof) and each of Services Holdings and the Service Providers and in
compliance with applicable Law.

 

SECTION 9.7                                                  Waiver.

 

(a)                                  REIT I (as authorized by the REIT I Board
or an applicable committee thereof) may (i) extend the time for the performance
of any of the obligations or other acts of Services Holdings or the Service
Providers hereunder, (ii) waive any inaccuracies in the representations and
warranties of such Persons contained herein or in any document delivered
pursuant hereto and (iii) waive compliance with any of the agreements or
conditions contained herein to be complied with or satisfied by such Persons.
Any agreement on the part of REIT I to any such extension or waiver shall be
valid only if set forth in an instrument in writing signed on behalf of REIT I.

 

(b)                                 Services Holdings may (i) extend the time
for the performance of any of the obligations or other acts of REIT I hereunder,
(ii) waive any inaccuracies in the representations and warranties of REIT I
contained herein or in any document delivered pursuant hereto and (iii) waive
compliance with any of the agreements or conditions contained herein to be
complied with or satisfied by such Persons. Any agreement on the part of
Services Holdings to any such extension or waiver shall be valid only if set
forth in an instrument in writing signed on behalf of Services Holdings.

 

(c)                                  Neither the failure nor any delay on the
part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence. No waiver shall be effective unless it is
in writing and is signed by the party asserted to have granted such waiver.

 

SECTION 9.8                                                  Remedies.

 

Neither any failure nor any delay by any Party in exercising any right under
this Agreement will operate as a waiver of such right and no single or partial
exercise of any such right will preclude any other or further exercise of such,
or any other, right. Each Party acknowledges and agrees that the other Parties
hereto will be damaged irreparably in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or are
otherwise breached. The Parties agree that money damages or other remedy at law
would not be sufficient or adequate remedy for any breach or violation of, or
default under, this Agreement by them and that in addition to all other remedies
available to them at law or in equity, each of them shall be entitled to the
fullest extent permitted by applicable Law to an

 

42

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injunction restraining such breach, violation or default and to other equitable
relief, including, without limitation, specific performance, with a bond or
other form of security not being required and specifically waived by the
Parties.

 

SECTION 9.9                                                  Severability.

 

In case any one or more of the provisions contained herein shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision or provisions shall be ineffective only to the extent of such
invalidity, illegality or unenforceability, without invalidating or affecting
the remainder of such provision or provisions or the remaining provisions of
this Agreement. If the final judgment of a court of competent jurisdiction or
other authority declares that any term or provision hereof is invalid, illegal
or unenforceable, the Parties agree that the court making such determination
shall have the power to reduce the scope, duration, area or applicability of the
term or provision, to delete specific words or phrases, or to replace any
invalid, illegal or unenforceable term or provision with a term or provision
that is valid, legal and enforceable and that comes closest to expressing the
intention of the invalid, illegal or unenforceable term or provision.

 

SECTION 9.10                                            Relationship of REIT I
and the Behringer Group.

 

Neither REIT I nor BH OP is a partner or joint venturer with any member of the
Behringer Group, and nothing in this Agreement shall be construed to make them
such partners or joint venturers or impose any Liability as such on either of
them. The obligations of the members of the Behringer Group pursuant to the
terms and provisions of this Agreement shall not be construed to preclude any
such Person from engaging in other activities or business ventures, whether or
not such other activities or ventures are in competition with REIT I or BH OP or
the business of REIT I or BH OP.

 

SECTION 9.11                                            Further Assurances.

 

The Parties shall use their commercially reasonable efforts to do and perform or
cause to be done and performed all such further acts and things and shall
execute and deliver all such other agreements, certificates, instruments or
documents as any other party may reasonably request in order to carry out the
intent and purposes of this Agreement, the Ancillary Agreements and the
consummation of the Transactions. Without the consent of Services Holdings,
REIT I shall not and shall not allow any of its Affiliates to take any voluntary
action or actions, or fail to take any action or actions, in each case, for the
purpose of avoiding or seeking to avoid the observance or performance of any of
the terms to be observed or performed under this Agreement or any Ancillary
Agreement or with respect to the Transactions.

 

SECTION 9.12                                            LIMITATIONS ON
REPRESENTATIONS AND WARRANTIES.

 

(a)                                  REIT I ACKNOWLEDGES THAT EXCEPT AS
EXPRESSLY SET FORTH IN ARTICLE IV, NONE OF SERVICES HOLDINGS, THE SERVICE
PROVIDERS, OR ANY MEMBER OF THE BEHRINGER GROUP MAKES ANY REPRESENTATION OR
WARRANTY OF ANY KIND WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN
CONNECTION WITH OR WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT OR IN

 

43

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CONNECTION WITH OR WITH RESPECT TO SERVICES HOLDINGS, THE SERVICE PROVIDERS, THE
BEHRINGER GROUP, THEIR RESPECTIVE EMPLOYEES, THE PURCHASED ASSETS, THE EXISTING
PROPERTY MANAGEMENT AGREEMENT, THE EXISTING ADVISORY AGREEMENT, ANY ANCILLARY
AGREEMENT, OR ANY OTHER AGREEMENT BETWEEN ANY MEMBER OF THE BEHRINGER GROUP AND
REIT I OR ITS AFFILIATES OR THE SERVICES PROVIDED THEREUNDER, OR WITH RESPECT TO
ANY INFORMATION PROVIDED OR MADE AVAILABLE TO REIT I OR THE REIT I SPECIAL
COMMITTEE, INCLUDING WITH RESPECT TO ANY REPRESENTATIONS OR WARRANTIES OF
MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE OR USE, TITLE, OR
NON-INFRINGEMENT. ALL OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY DISCLAIMED
BY SERVICES HOLDINGS AND THE SERVICE PROVIDERS. SERVICES HOLDINGS AND THE
SERVICE PROVIDERS EACH ACKNOWLEDGE THAT EXCEPT AS EXPRESSLY SET FORTH IN
ARTICLE III, REIT I DOES NOT MAKE ANY REPRESENTATION OR WARRANTY OF ANY KIND,
WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN CONNECTION WITH OR WITH
RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT. FOR THE AVOIDANCE OF DOUBT, THE
FOREGOING SHALL NOT AFFECT OR OTHERWISE LIMIT ANY EXPRESS REPRESENTATIONS OR
WARRANTIES CONTAINED IN ANY OF THE ANCILLARY AGREEMENTS.

 

(b)                                 EACH OF SERVICES HOLDINGS AND THE SERVICE
PROVIDERS ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE III, NONE
OF REIT I, OR ANY OF ITS AFFILIATES MAKES ANY REPRESENTATION OR WARRANTY OF ANY
KIND WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN CONNECTION WITH OR
WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT OR IN CONNECTION WITH OR
WITH RESPECT TO REIT I, ITS AFFILIATES, THEIR RESPECTIVE EMPLOYEES, THE
PURCHASED ASSETS, THE EXISTING PROPERTY MANAGEMENT AGREEMENT, THE EXISTING
ADVISORY AGREEMENT, ANY ANCILLARY AGREEMENT, OR ANY OTHER AGREEMENT BETWEEN
REIT I OR ITS AFFILIATES AND ANY MEMBER OF THE BEHRINGER GROUP OR THE SERVICES
PROVIDED THEREUNDER, OR WITH RESPECT TO ANY INFORMATION PROVIDED OR MADE
AVAILABLE TO SERVICES HOLDINGS, THE SERVICE PROVIDERS, AND ANY OTHER MEMBER OF
THE BEHRINGER GROUP, INCLUDING WITH RESPECT TO ANY REPRESENTATIONS OR WARRANTIES
OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR PURPOSE OR USE, TITLE, OR
NON-INFRINGEMENT. ALL OTHER REPRESENTATIONS OR WARRANTIES ARE HEREBY DISCLAIMED
BY REIT I. REIT I ACKNOWLEDGES THAT EXCEPT AS EXPRESSLY SET FORTH IN ARTICLE IV,
NONE OF SERVICES HOLDINGS AND THE SERVICE PROVIDERS MAKES ANY REPRESENTATION OR
WARRANTY OF ANY KIND, WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN
CONNECTION WITH OR WITH RESPECT TO THE SUBJECT MATTER OF THIS AGREEMENT. FOR THE
AVOIDANCE OF DOUBT, THE FOREGOING SHALL

 

44

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NOT AFFECT OR OTHERWISE LIMIT ANY EXPRESS REPRESENTATIONS OR WARRANTIES
CONTAINED IN ANY OF THE ANCILLARY AGREEMENTS.

 

SECTION 9.13                                            Parties in Interest; No
Third-Party Beneficiaries.

 

Except as set forth in Article V and Article VIII, this Agreement is not
intended, and shall not be deemed, to (a) confer upon any Person other than the
Parties and their respective successors and permitted assigns any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement, (b) create any agreement of employment with any Person, or
(c) otherwise create any third-party beneficiary hereto.

 

SECTION 9.14                                            Successors and Assigns.

 

This Agreement and all of the provisions hereof shall be binding upon and inure
to the benefit of the Parties hereto and their successors and permitted assigns,
but neither this Agreement nor any of the rights, interests and obligations
hereunder shall be assigned by any party hereto without the prior written
consent of the other Party.

 

SECTION 9.15                                            No Presumption Against
Drafter.

 

Each of the Parties has jointly participated in the negotiation and drafting of
this Agreement. In the event of an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by each of the Parties, and no presumptions or burdens of proof shall arise
favoring any party by virtue of the authorship of any of the provisions of this
Agreement.

 

SECTION 9.16                                            Disclaimer.

 

The representations and warranties in this Agreement are the product of
negotiations among the Parties hereto and are for the sole benefit of such
Parties (and, as applicable, the Behringer Indemnified Parties and the REIT I
Indemnified Parties). Any inaccuracies in such representations and warranties
are subject to waiver by the Parties hereto in accordance with Section 9.7
without notice or liability to any other Person. In some instances, the
representations and warranties in this Agreement may represent an allocation
among the Parties hereto of risks associated with particular matters regardless
of the knowledge of any of such Parties. Consequently, Persons other than the
Parties hereto (and, as applicable, the Behringer Indemnified Parties and the
REIT I Indemnified Parties) may not rely upon the representations and warranties
in this Agreement as characterizations of actual facts or circumstances as of
the date of this Agreement or as of any other date.

 

SECTION 9.17                                            Series A Preferred Stock
Sample Conversion Calculations.

 

Attached hereto as Exhibit I are, for illustrative purposes only, sample
calculations with respect to the conversion of the Series A Preferred Stock into
REIT I Common Stock according to the terms of the Articles Supplementary based
upon the assumptions set forth therein.

 

45

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SECTION 9.18                                            Counterparts.

 

This Agreement may be executed with counterpart signature pages or in multiple
counterparts, each of which shall be deemed to be an original as against any
Party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the Parties reflected hereon as the signatories.

 

SECTION 9.19                                            Facsimile Signatures.

 

A facsimile or other electronic signature on the signature pages hereto shall
for all purposes be deemed an original and shall bind the signor as if such
facsimile or other electronic signature were an original.

 

[SIGNATURE PAGE FOLLOWS]

 

46

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IN WITNESS WHEREOF, the Parties have caused this Master Modification Agreement
be signed by their respective officers or agents thereunto duly authorized as of
the date first written above.

 

BEHRINGER HARVARD REIT I, INC.

 

BEHRINGER HARVARD REIT I SERVICES

 

 

HOLDINGS, LLC

 

 

 

/s/ Charles G. Dannis

 

/s/ M. Jason Mattox

Name:

Charles G. Dannis

 

Name:

M. Jason Mattox

Title:

Chairman of the Special Committee

 

Title:

Executive Vice President

 

 

 

 

 

 

 

 

BEHRINGER ADVISORS, LLC

 

 

 

 

 

/s/ M. Jason Mattox

 

 

Name:

M. Jason Mattox

 

 

Title:

Executive Vice President

 

 

 

 

 

 

 

 

HPT MANAGEMENT SERVICES, LLC

 

 

 

 

 

/s/ M. Jason Mattox

 

 

Name:

M. Jason Mattox

 

 

Title:

Executive Vice President

 

[SIGNATURE PAGE TO MASTER MODIFICATION AGREEMENT]

 

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EXHIBIT A

 

EXISTING ADVISORY AGREEMENT (CONFORMED COPY)

 

See attached.

 

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

 

FIFTH AMENDED AND RESTATED

ADVISORY MANAGEMENT AGREEMENT

(CONFORMED COPY)

 

This FIFTH AMENDED AND RESTATED ADVISORY MANAGEMENT AGREEMENT (this “Agreement”)
is entered into on this 29 day of December, 2006, by and between BEHRINGER
HARVARD REIT I, INC., a Maryland corporation (the “Company”), and BEHRINGER
ADVISORS LP, a Texas limited partnership (the “Advisor”).

 

WITNESSETH

 

WHEREAS, the Company has issued and will continue to be issuing shares of its
common stock, par value $0.0001, to the public, such shares to be registered
with the Securities and Exchange Commission and may subsequently issue
additional securities;

 

WHEREAS, the Company and the Advisor previously entered into that certain
Advisory Agreement, dated February 14, 2003 (as amended, supplemented or
restated from time to time, the “Original Advisory Agreement”), and it is
intended that this Agreement amend and restate the Original Advisory Agreement
effective as of and for all periods after the date hereof;

 

WHEREAS, the Company is qualified as a real estate investment trust and intends
to invest its funds in investments permitted by the terms of the Company’s
Articles of Incorporation and Sections 856 through 860 of the Internal Revenue
Code;

 

WHEREAS, the Company desires to continue to avail itself of the experience,
sources of information, advice, assistance and certain facilities available to
the Advisor and to have the Advisor continue to undertake the duties and
responsibilities hereinafter set forth, on behalf of, and subject to the
supervision of, the Board, all as provided herein; and

 

WHEREAS, the Advisor is willing to continue to provide such services, subject to
the supervision of the Board, on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:

 

ARTICLE I.

DEFINITIONS

 

The following defined terms used in this Agreement shall have the meanings
specified below:

 

Acquisition Expenses.  Any and all expenses incurred by the Company, the
Advisor, or any Affiliate of either in connection with the selection,
acquisition or development of any Asset, whether or not acquired, including,
without limitation, legal fees and expenses, travel and communications expenses,
costs of appraisals, nonrefundable option payments on property not acquired,
accounting fees and expenses, and title insurance premiums.  Acquisition
Expenses

 

A-1

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

 

paid or incurred by the Advisor or any Affiliate are on behalf of the Company
and will be reimbursed by the Company in accordance with the terms of
Section 3.02(a)(ii).

 

Acquisition Fees.  Any and all fees and commissions, exclusive of Acquisition
Expenses but including the Acquisition and Advisory Fees, paid by any Person to
any other Person (including any fees or commissions paid by or to any Affiliate
of the Company or the Advisor) in connection with making or investing in
Mortgages or the purchase, development or construction of an Asset, including,
without limitation, real estate commissions, selection fees, Development Fees,
Construction Fees, non-recurring management fees, loan fees, points or any other
fees of a similar nature.  Excluded shall be Development Fees and Construction
Fees paid to any Person not affiliated with the Sponsor in connection with the
actual development and construction of any Property.

 

Acquisition and Advisory Fees.  The fees payable to the Advisor pursuant to
Section 3.01(b).

 

Advisor.  Behringer Advisors LP, a Texas limited partnership, any successor
advisor to the Company, or any Person to which Behringer Advisors LP or any
successor advisor subcontracts all or substantially all of its functions.

 

Affiliate or Affiliated.  As to any Person, (i) 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; (ii) 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; (iii) any Person,
directly or indirectly, controlling, controlled by, or under common control with
such other Person; (iv) any executive officer, director, trustee or general
partner of such other Person; and (v) any legal entity for which such Person
acts as an executive officer, director, trustee or general partner.

 

Aggregate Assets Value.  The aggregate book value of the Assets at the time of
measurement before deducting depreciation, bad debts or other similar non-cash
reserves and without reduction for any debt secured by or relating to such
assets; provided, however, that during such periods in which the Company is
obtaining regular independent valuations of the current value of its net assets
for purposes of enabling fiduciaries of employee benefit plan stockholders to
comply with applicable Department of Labor reporting requirements, “Aggregate
Assets Value” will equal the greater of (i) the amount determined pursuant to
the foregoing or (ii) the Assets’ aggregate valuation established by the most
recent such valuation report without reduction for depreciation, bad debts or
other non-cash reserves and without reduction for any debt secured by or
relating to such assets.

 

Appraised Value.  Value according to an appraisal made by an Independent
Appraiser.

 

Articles of Incorporation.  The Articles of Incorporation of the Company filed
with the Maryland State Department of Assessments and Taxation in accordance
with the Maryland General Corporation Law, as amended, supplemented or restated
from time to time.

 

Assets.  Properties, Mortgages and other direct or indirect investments in
equity interests in or loans secured by or otherwise relating to Real Property
(other than investments in bank

 

A-2

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accounts, money market funds or other current assets, whether of the proceeds
from an Offering or the sale of an Asset or otherwise) owned by the Company,
directly or indirectly through one or more of its Affiliates or Joint Ventures.

 

Asset Management Fee.  The fee payable to the Advisor for day-to-day
professional management services in connection with the Company and its
investments in Assets pursuant to this Agreement.

 

Average Invested Assets.  For a specified period, the average of the aggregate
book value of the Assets before deduction for depreciation, bad debts or other
non-cash reserves, computed by taking the average of such values at the end of
each month during such period; provided, however, that during such periods in
which the Company is obtaining regular independent valuations of the current
value of its net assets for purposes of enabling fiduciaries of employee benefit
plan stockholders to comply with applicable Department of Labor reporting
requirements, “Average Invested Assets” will equal the greater of (i) the amount
determined pursuant to the foregoing or (ii) the Assets’ aggregate valuation
established by the most recent such valuation report(s) without reduction for
depreciation, bad debts or other noncash reserves.

 

Board.  The Board of Directors of the Company.

 

Bylaws.  The bylaws of the Company, as the same are in effect from time to time.

 

Change of Control.  Any event (including, without limitation, issue, transfer or
other disposition of Shares of capital stock of the Company or equity interests
in the Partnership, merger, share exchange or consolidation) after which any
“person” (as that term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) is or becomes the “beneficial owner” (as
defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended),
directly or indirectly, of securities of the Company or the Partnership
representing greater than 50% of the combined voting power of the Company’s or
the Partnership’s then outstanding securities, respectively; provided, that a
Change of Control shall not be deemed to occur as a result of any widely
distributed public offering of the Shares.

 

Closing Price.  On any date, the last sale price for any class or series of the
Shares, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, for such Shares, in
either case as reported in the principal consolidated transaction reporting
system with respect to Shares listed or admitted to trading on the NYSE or, if
such Shares are not listed or admitted to trading on the NYSE, as reported on
the principal consolidated transaction reporting system with respect to Shares
listed or admitted to trading on a principal national securities exchange or, if
such Shares are not listed or admitted to trading on any national securities
exchange, the last quoted price on the Nasdaq National Market System (or any
successor market or exchange), or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the
principal automated quotation system or other quotation service that may then be
in use or, if such Shares are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a professional market maker
making a market in such Shares selected by the Board.

 

A-3

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

 

Code.  Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto.  Reference to any provision of the Code shall mean
such provision as in effect from time to time, as the same may be amended, and
any successor provision thereto, as interpreted by any applicable regulations as
in effect from time to time.

 

Company.  Behringer Harvard REIT I, Inc., a corporation organized under the laws
of the State of Maryland.

 

Company Value.  The actual value of the Company as a going concern based on the
difference between (a) the actual value of all of its assets as determined in
good faith by the Board, including a majority of the Independent Directors, and
(b) all of its liabilities as set forth on its then current balance sheet;
provided that (i) if such Company Value is being determined in connection with a
Change of Control that establishes the Company’s net worth (e.g., a tender offer
for the Shares, sale of all of the Shares or a merger) then the Company Value
shall be the net worth established thereby, and (ii) if such Company Value is
being determined in connection with a Listing, then the Company Value shall be
equal to the number of outstanding Shares multiplied by the Closing Price of a
single Share averaged over a period of 30 trading days during which the Shares
are listed or quoted for trading after the date of Listing.  For purposes
hereof, a “trading day” shall be any day on which the NYSE is open for trading
whether or not the Shares are then Listed on the NYSE and whether or not there
is an actual trade of such Shares on any such day.  If the holder of Convertible
Shares disagrees as to the Company Value as determined by the Board, then each
of the holder of Convertible Shares and the Company (determined by a majority of
the Independent Directors) shall name one appraiser and the two named appraisers
shall promptly agree in good faith to the appointment of one other appraiser
whose determination of the actual value of the Company as a going concern shall
be final and binding on the parties as to Company Value.  The cost of any such
appraisal shall be split evenly between the Company and the Advisor.

 

Competitive Real Estate Commission.  A real estate or brokerage commission paid
or, if no such commission is paid, the amount that customarily would be paid for
the purchase or sale of a Property that is reasonable, customary, and
competitive in light of the size, type and location of the Property.

 

Construction Fee.  A fee or other remuneration for acting as general contractor
and/or construction manager to construct improvements, supervise and coordinate
projects or to provide major repairs or rehabilitations on a Property.

 

Contract Purchase Price.  The amount actually paid or allocated in respect of
the purchase, development, construction or improvement of a Property, the amount
of funds advanced with respect to a Mortgage or the amount actually paid or
allocated in respect to the purchase of other Assets, in each case exclusive of
Acquisition Fees and Acquisition Expenses.

 

Contract Sales Price.  The total consideration provided for in the sales
contract for the sale of a Property.

 

Convertible Shares.  The 1,000 shares of the Company’s non-participating,
non-voting, convertible stock, par value $0.0001 per share.

 

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Dealer Manager.  Behringer Securities LP, an Affiliate of the Advisor, or such
Person selected by the Board to act as the dealer manager for an Offering.

 

Development Fee.  A fee for the packaging of a Property or Mortgage, including
the negotiation and approval of plans, and any assistance in obtaining zoning
and necessary variances and financing for a specific Property, either initially
or at a later date.

 

Director.  A member of the Board.

 

Distributions.  Any dividends or other distributions of money or other property
by the Company to owners of Shares, including distributions that may constitute
a return of capital for federal income tax purposes.

 

Gross Proceeds.  The aggregate purchase price of all Shares sold for the account
of the Company through an Offering, without deduction for Selling Commissions,
volume discounts, any marketing support and due diligence expense reimbursement
or Organization and Offering Expenses.  For the purpose of computing Gross
Proceeds, the purchase price of any Share for which reduced Selling Commissions
are paid to the Dealer Manager or a Soliciting Dealer (where net proceeds to the
Company are not reduced) shall be deemed to be the full amount of the Offering
price per Share pursuant to the Prospectus for such Offering without reduction.

 

Independent Appraiser.  A Person with no material current or prior business or
personal relationship with the Advisor or the Directors and who is a qualified
appraiser of Real Property of the type held by the Company or of other Assets as
determined by the Board.  Membership in a nationally recognized appraisal
society such as the American Institute of Real Estate Appraisers or the Society
of Real Estate Appraisers shall be conclusive evidence of such qualification as
to Real Property.

 

Independent Director.  A Director who is not on the date of determination, and
within the last two years from the date of determination has not been, directly
or indirectly associated with the Sponsor, the Company, the Advisor or any of
their Affiliates by virtue of (i) ownership of an interest in the Sponsor, the
Advisor or any of their Affiliates, other than the Company, (ii) employment by
the Sponsor, the Company, the Advisor or any of their Affiliates, (iii) service
as an officer or director of the Sponsor, the Advisor or any of their
Affiliates, other than as a Director of the Company, (iv) performance of
services, other than as a Director of the Company, (v) service as a director or
trustee of more than three real estate investment trusts organized by the
Sponsor or advised by the Advisor, or (vi) maintenance of a material business or
professional relationship with the Sponsor, the Advisor or any of their
Affiliates.  A business or professional relationship is considered material if
the aggregate gross revenue derived by the Director from the Sponsor, the
Advisor and their Affiliates exceeds 5% of either the Director’s annual gross
income during either of the last two years or the Director’s net worth on a fair
market value basis.  An indirect association with the Sponsor or the Advisor
shall include circumstances in which a Director’s spouse, parent, child,
sibling, mother- or father-in-law, son- or daughter-in-law, or brother- or
sister-in-law is or has been associated with the Sponsor, the Advisor, any of
their Affiliates, or the Company.

 

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Intellectual Property Rights.  All rights, titles and interests, whether foreign
or domestic, in and to any and all trade secrets, confidential information
rights, patents, invention rights, copyrights, service marks, trademarks,
know-how, or similar intellectual property rights and all applications and
rights to apply for such rights, as well as any and all moral rights, rights of
privacy, publicity and similar rights and license rights of any type under the
laws or regulations of any governmental, regulatory, or judicial authority,
foreign or domestic and all renewals and extensions thereof.

 

Invested Capital.  The amount calculated by multiplying the total number of
Shares outstanding by $10.00, reduced by the portion of any Distribution (other
than any Stock Dividends) that is attributable to Net Sales Proceeds and by any
amounts paid by the Company to repurchase Shares pursuant to the Company’s plan
for repurchase of Shares.

 

Joint Ventures.  The joint venture or partnership arrangements in which the
Company or the Partnership is a coventurer or general partner, which are
established to acquire or hold Assets.

 

Listing or Listed.  The listing of the Shares of the Company on a national
securities exchange or the quotation of shares on the Nasdaq National Market
System (or any successor market or exchange).  Upon such Listing, the Shares
shall be deemed Listed.

 

Mortgages.  In connection with mortgage financing provided, invested in or
purchased by the Company, all of the notes, deeds of trust, security interests
or other evidences of indebtedness or obligations, which are secured or
collateralized by Real Property owned by the borrowers under such notes, deeds
of trust, security interests or other evidences of indebtedness or obligations.

 

NASAA Guidelines.  The Statement of Policy Regarding Real Estate Investment
Trusts of the North American Securities Administrators Association, Inc.

 

Net Income.  For any period, the Company’s total revenues applicable to such
period, less the total expenses applicable to such period other than additions
to reserves for depreciation, bad debts or other similar non-cash reserves and
excluding any gain from the sale of the Assets.

 

Net Sales Proceeds.  In the case of a transaction described in clause (i)(A) of
the definition of Sale, the proceeds of any such transaction less the amount of
selling expenses incurred by or on behalf of the Company, including all real
estate commissions, closing costs and legal fees and expenses.  In the case of a
transaction described in clause (i)(B) of such definition, Net Sales Proceeds
means the proceeds of any such transaction less the amount of selling expenses
incurred by or on behalf of the Company, including any legal fees and expenses
and other selling expenses incurred in connection with such transaction.  In the
case of a transaction described in clause (i)(C) of such definition, Net Sales
Proceeds means the proceeds of any such transaction actually distributed to the
Company from the Joint Venture less the amount of any selling expenses,
including legal fees and expenses incurred by or on behalf of the Company (other
than those paid by the Joint Venture).  In the case of a transaction or series
of transactions described in clause (i)(D) of the definition of Sale, Net Sales
Proceeds means the proceeds of any such transaction (including the aggregate of
all payments under a Mortgage or in satisfaction

 

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thereof other than regularly scheduled interest payments to the extent such
interest accrues at a rate of less than ten percent (10%) per annum) less the
amount of selling expenses incurred by or on behalf of the Company, including
all commissions closing costs and legal fees and expenses.  In the case of a
transaction described in clause (i)(E) of such definition, Net Sales Proceeds
means the proceeds of any such transaction less the amount of selling expenses
incurred by or on behalf of the Company, including any legal fees and expenses
and other selling expenses incurred in connection with such transaction.  In the
case of a transaction described in clause (ii) of the definition of Sale, Net
Sales Proceeds means the proceeds of such transaction or series of transactions
less all amounts generated thereby which are reinvested in one or more Assets
within 180 days thereafter and less the amount of any real estate commissions,
closing costs, and legal fees and expenses and other selling expenses incurred
by or allocated to the Company in connection with such transaction or series of
transactions.  Net Sales Proceeds shall also include any consideration
(including non-cash consideration such as stock, notes, or other property or
securities) that the Company determines, in its discretion, to be economically
equivalent to proceeds of a Sale, valued in the reasonable determination of the
Company.  Net Sales Proceeds shall not include any reserves established by the
Company in its sole discretion.

 

NYSE.  The New York Stock Exchange, Inc.

 

Offering.  Any public offering of Shares pursuant to an effective registration
statement filed under the Securities Act during periods from and after the date
hereof.

 

Organization and Offering Expenses.  Specified as any and all costs and
expenses, other than Selling Commissions and the dealer manager fee (as in
effect from time to time), incurred by and to be paid by the Company, the
Advisor or any Affiliate in connection with the formation, qualification and
registration of the Company and the marketing and distribution of its Shares,
including, without limitation, the following: legal, accounting and escrow fees;
printing, amending, supplementing, mailing and distributing costs; filing,
registration and qualification fees and taxes; telecopier and telephone costs;
and all advertising and marketing expenses, including the costs related to
investor and broker-dealer sales meetings.  Organization and Offering Expenses
paid or incurred by the Advisor or any Affiliate are on behalf of the Company
and will be reimbursed by the Company in accordance with the terms of
Section 3.02(a)(i).

 

Partnership.  Behringer Harvard Operating Partnership I LP, a Texas limited
partnership, through which the Company may own Assets.

 

Performance Fee.  The fee payable to the Advisor upon termination of this
Agreement under certain circumstances if certain performance standards have been
met pursuant to Section 4.03(b) or (c).

 

Person.  An individual, corporation, association, business trust, estate, trust,
partnership, limited liability company or other legal entity.

 

Property or Properties.  As the context requires, any, or all, respectively, of
the Real Property acquired by the Company, either directly or indirectly
(whether through joint venture arrangements or other partnership or investment
interests).

 

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Proprietary Property.  All modeling algorithms, tools, computer programs,
know-how, methodologies, processes, technologies, ideas, concepts, skills,
routines, subroutines, operating instructions and other materials and aides used
in performing the duties set forth in Section 2.02 that relate to investment
advice regarding current and potential Assets, and all modifications,
enhancements and derivative works of the foregoing.

 

Prospectus.  Prospectus has the meaning set forth in Section 2(10) of the
Securities Act, including a preliminary prospectus, an offering circular as
described in Rule 256 of the General Rules and Regulations under the Securities
Act or, in the case of an intrastate offering, any document by whatever name
known, utilized for the purpose of offering and selling securities of the
Company to the public.

 

Real Property.  Land, rights in land (including leasehold interests), and any
buildings, structures, improvements, furnishings, fixtures and equipment located
on or used in connection with land and rights or interests in land.

 

REIT.  A corporation, trust, association or other legal entity (other than a
real estate syndication) that is engaged primarily in investing in equity
interests in real estate (including fee ownership and leasehold interests) or in
loans secured by real estate or both in accordance with Sections 856 through 860
of the Code.

 

Sale or Sales.  (i) Any transaction or series of transactions whereby: (A) the
Company or the Partnership directly or indirectly (except as described in other
subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its ownership of any Property or portion thereof, including the
lease of any Property consisting of a building only, and including any event
with respect to any Property which gives rise to a significant amount of
insurance proceeds or condemnation awards; (B) the Company or the Partnership
directly or indirectly (except as described in other subsections of this
definition) sells, grants, transfers, conveys, or relinquishes its ownership of
all or substantially all of the interest of the Company or the Partnership in
any Joint Venture in which it is a co-venturer or partner; (C) any Joint Venture
directly or indirectly (except as described in other subsections of this
definition) in which the Company or the Partnership as a co-venturer or partner
sells, grants, transfers, conveys, or relinquishes its ownership of any Property
or portion thereof, including any event with respect to any Property which gives
rise to insurance claims or condemnation awards; (D) the Company or the
Partnership directly or indirectly (except as described in other subsections of
this definition) sells, grants, conveys or relinquishes its interest in any
Mortgage or portion thereof (including with respect to any Mortgage, all
repayments thereunder or in satisfaction thereof other than regularly scheduled
interest payments) and any event with respect to a Mortgage which gives rise to
a significant amount of insurance proceeds or similar awards; or (E) the Company
or the Partnership directly or indirectly (except as described in other
subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its ownership of any other Asset not previously described in this
definition or any portion thereof, but (ii) not including any transaction or
series of transactions specified in clause (i) (A) through (E) above in which
the proceeds of such transaction or series of transactions are reinvested in one
or more Assets within 180 days thereafter.

 

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Securities Act.  The Securities Act of 1933, as amended from time to time, or
any successor statute thereto.  Reference to any provision of the Securities Act
shall mean such provision as in effect from time to time, as the same may be
amended, and any successor provision thereto, as interpreted by any applicable
regulations as in effect from time to time.

 

Selling Commissions.  Any and all commissions payable to underwriters, dealer
managers or other broker-dealers in connection with the sale of Shares,
including, without limitation, commissions payable to Behringer Securities LP.

 

Shares.  Any shares of the Company’s common stock, par value $0.0001 per share.

 

Soliciting Dealers.  Broker-dealers who are members of the National Association
of Securities Dealers, Inc., or that are exempt from broker-dealer registration,
and who, in either case, have executed participating broker or other agreements
with the Dealer Manager to sell Shares.

 

Sponsor.  Robert M. Behringer.

 

Stock Dividend.  Any dividend or other distribution paid to stockholders of the
Company in the form of additional Shares.

 

Stockholders.  The record holders of the Company’s Shares as maintained in the
books and records of the Company or its transfer agent.

 

Stockholders’ 9% Return.  As of any date, an aggregate amount equal to a 9%
cumulative, noncompounded, annual return on Invested Capital (calculated like
simple interest); provided, however, that for purposes of calculating the
Stockholders’ 9% Return, any Stock Dividend shall not be included as a
Distribution; and provided further that for purposes of determining the
Stockholders’ 9% Return, the return for each portion of the Invested Capital
shall commence for purposes of the calculation upon the issuance of the shares
issued in connection with such capital.

 

Subordinated Incentive Listing Fee.  The fee payable to the Advisor under
certain circumstances if the Shares are Listed pursuant to Section 3.01(e).

 

Subordinated Share of Net Sales Proceeds.  The fee payable to the Advisor under
certain circumstances following receipt of Net Sales Proceeds pursuant to
Section 3.01(d).

 

Termination Date.  The date of termination of this Agreement.

 

Texas Tax Code.  The Texas Tax Code as amended by Texas H.B. 3, 79th Leg., 3rd
C.S. (2006).  Reference to any provision of the Texas Tax Code Act shall mean
such provision as in effect from time to time, as the same may be amended, and
any successor provision thereto, as interpreted by any applicable administrative
rules as in effect from time to time.

 

Total Operating Expenses.  All costs and expenses paid or incurred by the
Company, as determined under generally accepted accounting principles, which are
in any way related to the operation of the Company or to Company business,
including the Asset Management Fee, but

 

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excluding (i) the expenses of raising capital such as Organization and Offering
Expenses, legal, audit, accounting, underwriting, brokerage, listing,
registration, and other fees, printing and other such expenses and tax incurred
in connection with the issuance, distribution, transfer, registration and
Listing of the Shares, (ii) interest payments, (iii) taxes, (iv) non-cash
expenditures such as depreciation, amortization and bad debt reserves, (v) the
Subordinated Share of Net Sales Proceeds, (vi) the Performance Fee, (vii) the
Subordinated Incentive Listing Fee, (viii) Acquisition Fees and Acquisition
Expenses, (ix) real estate commissions on the Sale of Property, and (x) other
fees and expenses connected with the acquisition, disposition, management and
ownership of real estate interests, mortgage loans or other property (including
the costs of foreclosure, insurance premiums, legal services, maintenance,
repair and improvement of property).

 

2%/25% Guidelines.  The requirement pursuant to the NASAA Guidelines that, in
any 12 month period, Total Operating Expenses not exceed the greater of 2% of
Average Invested Assets during such 12 month period or 25% of Net Income over
the same 12 month period.

 

ARTICLE II.

THE ADVISOR

 

2.01        Appointment.  The Company hereby appoints the Advisor to serve as
its advisor on the terms and conditions set forth in this Agreement, and the
Advisor hereby accepts such appointment.

 

2.02        Duties of the Advisor.  The Advisor undertakes to use its best
efforts to present to the Company potential investment opportunities and to
provide a continuing and suitable investment program consistent with the
investment objectives and policies of the Company as determined and adopted from
time to time by the Board.  In performance of this undertaking, subject to the
supervision of the Board and consistent with the provisions of the Company’s
most recent Prospectus for Shares, the Articles of Incorporation and Bylaws, the
Advisor shall, either directly or by engaging an Affiliate of the Advisor or
other Person:

 

(a)           serve as the Company’s investment and financial advisor and
provide research and economic and statistical data in connection with the Assets
and investment policies;

 

(b)           provide the daily management of the Company and perform and
supervise the various administrative functions reasonably necessary for the
management and operations of the Company;

 

(c)           maintain and preserve the books and records of the Company,
including stock books and records reflecting a record of the Stockholders and
their ownership of the Company’s uncertificated Shares, if any, and acting as
transfer agent for the Company’s Shares;

 

(d)           investigate, select, and, on behalf of the Company, engage and
conduct business with such Persons as the Advisor deems necessary to the proper
performance of its obligations hereunder, including but not limited to
consultants, accountants, correspondents, lenders, technical advisors,
attorneys, brokers, underwriters, corporate

 

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fiduciaries, escrow agents, depositaries, custodians, agents for collection,
insurers, insurance agents, banks, builders, developers, property owners,
mortgagors, property management companies, transfer agents and any and all
agents for any of the foregoing, including Affiliates of the Advisor, and
Persons acting in any other capacity deemed by the Advisor necessary or
desirable for the performance of any of the foregoing services, including but
not limited to entering into contracts in the name of the Company with any of
the foregoing;

 

(e)           consult with the officers and the Board and assist the Board in
the formulation and implementation of the Company’s financial policies, and, as
necessary, furnish the Board with advice and recommendations with respect to the
making of investments consistent with the investment objectives and policies of
the Company and in connection with any borrowings proposed to be undertaken by
the Company;

 

(f)            subject to the provisions of Sections 2.02(h) and 2.03 hereof,
(i) locate, analyze and select potential investments in Assets, (ii) structure
and negotiate the terms and conditions of transactions pursuant to which
investment in Assets will be made; (iii) make investments in Assets on behalf of
the Company or the Partnership in compliance with the investment objectives and
policies of the Company; (iv) arrange for financing and refinancing and make
other changes in the asset or capital structure of, and dispose of, reinvest the
proceeds from the sale of, or otherwise deal with the investments in, Assets;
and (v) enter into leases of Property and service contracts for Assets and, to
the extent necessary, perform all other operational functions for the
maintenance and administration of such Assets, including the servicing of
Mortgages;

 

(g)           provide the Board with periodic reports regarding prospective
investments in Assets;

 

(h)           obtain the prior approval of the Board (including a majority of
all Independent Directors) for any and all investments in Assets;

 

(i)            negotiate on behalf of the Company with banks or lenders for
loans to be made to the Company, negotiate on behalf of the Company with
investment banking firms and broker-dealers, and negotiate private sales of
Shares and other securities of the Company or obtain loans for the Company, as
and when appropriate, but in no event in such a way so that the Advisor shall be
acting as broker-dealer or underwriter; and provided, further, that any fees and
costs payable to third parties incurred by the Advisor in connection with the
foregoing shall be the responsibility of the Company;

 

(j)            obtain reports (which may be prepared by or for the Advisor or
its Affiliates), where appropriate, concerning the value of investments or
contemplated investments of the Company in Assets;

 

(k)           from time to time, or at any time reasonably requested by the
Board, make reports to the Board of its performance of services to the Company
under this Agreement;

 

(l)            provide the Company with all necessary cash management services;

 

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(m)          deliver to or maintain on behalf of the Company copies of all
appraisals obtained in connection with the investments in Assets;

 

(n)           upon request of the Company, act, or obtain the services of others
to act, as attorney-in-fact or agent of the Company in making, requiring and
disposing of Assets, disbursing, and collecting the funds, paying the debts and
fulfilling the obligations of the Company and handling, prosecuting and settling
any claims of the Company, including foreclosing and otherwise enforcing
mortgage and other liens and security interests comprising any of the Assets;

 

(o)           supervise the preparation and filing and distribution of returns
and reports to governmental agencies and to Stockholders and other investors and
act on behalf of the Company in connection with investor relations;

 

(p)           provide office space, equipment and personnel as required for the
performance of the foregoing services as Advisor;

 

(q)           prepare on behalf of the Company all reports and returns required
by the Securities and Exchange Commission, Internal Revenue Service and other
state or federal governmental agencies; and

 

(r)            do all things necessary to assure its ability to render the
services described in this Agreement.

 

2.03        Authority of Advisor.

 

(a)           Pursuant to the terms of this Agreement (including the
restrictions included in this Section 2.03 and in Section 2.06), and subject to
the continuing and exclusive authority of the Board over the management of the
Company, the Board hereby delegates to the Advisor the authority to (i) locate,
analyze and select investment opportunities, (ii) structure the terms and
conditions of transactions pursuant to which investments will be made or
acquired for the Company or the Partnership, (iii) acquire Properties, make and
acquire Mortgages and invest in other Assets in compliance with the investment
objectives and policies of the Company, (iv) arrange for financing or
refinancing of Assets, (v) enter into leases for the Properties and service
contracts for the Assets, including oversight of Affiliated companies that
perform property management or other services for the Company, (vi) oversee
non-affiliated and Affiliated property managers and other non-affiliated and
Affiliated Persons who perform services for the Company, and (vii) undertake
accounting and other record-keeping functions at the Asset level.

 

(b)           Notwithstanding the foregoing, any investment in Assets by the
Company or the Partnership (as well as any financing acquired by the Company or
the Partnership in connection with such investment), will require the prior
approval of the Board (including a majority of the Independent Directors).

 

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(c)           The prior approval of a majority of the Independent Directors and
a majority of the Board not otherwise interested in the transaction will be
required for each transaction with the Advisor or its Affiliates.

 

(d)           If a transaction requires approval by the Board, the Advisor will
deliver to the Directors all documents required by them to properly evaluate the
proposed transaction.

 

The Board may, at any time upon the giving of notice to the Advisor, modify or
revoke the authority set forth in this Section 2.03.  If and to the extent the
Board so modifies or revokes the authority contained herein, the Advisor shall
henceforth submit to the Board for prior approval such proposed transactions
involving investments in Assets as thereafter require prior approval, provided
however, that such modification or revocation shall be effective upon receipt by
the Advisor and shall not be applicable to investment transactions to which the
Advisor has committed the Company prior to the date of receipt by the Advisor of
such notification.

 

2.04        Bank Accounts.  The Advisor may establish and maintain one or more
bank accounts in its own name for the account of the Company or in the name of
the Company and may collect and deposit into any such account or accounts, and
disburse from any such account or accounts, any money on behalf of the Company,
under such terms and conditions as the Board may approve, provided that no funds
shall be commingled with the funds of the Advisor; and the Advisor shall from
time to time render appropriate accountings of such collections and payments to
the Board, its Audit Committee and the auditors of the Company.

 

2.05        Records; Access.  The Advisor shall maintain appropriate records of
all its activities hereunder and make such records available for inspection by
the Board and by counsel, auditors and authorized agents of the Company, at any
time or from time to time during normal business hours.  The Advisor shall at
all reasonable times have access to the books and records of the Company.

 

2.06        Limitations on Activities.  Anything else in this Agreement to the
contrary notwithstanding, the Advisor shall refrain from taking any action
which, in its sole judgment made in good faith, would (a) adversely affect the
status of the Company as a REIT, (b) subject the Company to regulation under the
Investment Company Act of 1940, as amended, or (c) violate any law, rule,
regulation or statement of policy of any governmental body or agency having
jurisdiction over the Company, the Shares or any of the Company’s securities, or
otherwise not be permitted by the Articles of Incorporation or Bylaws, except if
such action shall be ordered by the Board, in which case the Advisor shall
notify promptly the Board of the Advisor’s judgment of the potential impact of
such action and shall refrain from taking such action until it receives further
clarification or instructions from the Board.  In such event the Advisor shall
have no liability for acting in accordance with the specific instructions of the
Board so given.  The Advisor, its directors, officers, employees and
stockholders, and the directors, officers, employees and stockholders of the
Advisor’s Affiliates shall not be liable to the Company or to the Board or
Stockholders for any act or omission by the Advisor, its directors, officers,
employees or stockholders, or for any act or omission of any Affiliate of the
Advisor, its directors, officers or employees or stockholders except as provided
in Section 5.02 of this Agreement.

 

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2.07        Relationship with Directors.  Directors, officers and employees of
the Advisor or an Affiliate of the Advisor may serve as Directors, officers or
employees of the Company, except that no director, officer or employee of the
Advisor or its Affiliates who also is a Director shall receive any compensation
from the Company for serving as a Director other than reasonable reimbursement
for travel and related expenses incurred in attending meetings of the Board.

 

2.08        Other Activities of the Advisor.  Nothing herein contained shall
prevent the Advisor or its Affiliates from engaging in other activities,
including, without limitation, the rendering of advice to other Persons
(including other REITs) and the management of other programs advised, sponsored
or organized by the Advisor or its Affiliates; nor shall this Agreement limit or
restrict the right of any director, officer, employee, or stockholder of the
Advisor or its Affiliates to engage in any other business or to render services
of any kind to any other Person.  The Advisor may, with respect to any
investment in which the Company is a participant, also render advice and service
to each and every other participant therein.  The Advisor shall report to the
Board the existence of any condition or circumstance, existing or anticipated,
of which it has knowledge, which creates or could create a conflict of interest
between the Advisor’s obligations to the Company and its obligations to or its
interest in any other Person.  The Advisor or its Affiliates shall promptly
disclose to the Board knowledge of such condition or circumstance.  If the
Sponsor, Advisor, Director or Affiliates thereof have sponsored other investment
programs with similar investment objectives which have investment funds
available at the same time as the Company, it shall be the duty of the Board
(including the Independent Directors) to adopt the method set forth in the
Company’s most recent Prospectus for its Shares or another reasonable method by
which investments are to be allocated to the competing investment entities and
to use their best efforts to apply such method fairly to the Company.

 

ARTICLE III.

COMPENSATION AND REIMBURSEMENT OF SPECIFIED COSTS.

 

3.01        Fees.

 

(a)           Asset Management Fee.  The Company shall pay the Advisor a monthly
Asset Management Fee of (i) with respect to operating Assets, 0.6% of the
Aggregate Assets Value for such operating Assets (including any debt
attributable to the Assets), payable on the 15th day of each month in an amount
equal to 1/12th of 0.6% of the Aggregate Assets Value for such operating Assets
as of the last day of the immediately preceding month, and (ii) with respect to
development or redevelopment Assets, 0.6% of the Contract Purchase Price
(including any debt attributable to the Assets and any budgeted improvement
costs therefor) for such development or redevelopment Assets, payable on the
15th day of each month in an amount equal to 1/12th of 0.6% of the total
Contract Purchase Price for such development or redevelopment Assets as of the
date such amount is determinable.  In any given month, in no event shall the
Advisor be paid Asset Management Fees pursuant to both clause (i) and clause
(ii) of this Section 3.01(a) with respect to the same Asset.

 

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(b)           Acquisition and Advisory Fees.  The Company shall pay the Advisor
an Acquisition and Advisory Fee in an amount equal to (i) with respect to each
Asset acquired directly by the Company, 2.5% of the Contract Purchase Price of
such Asset and (ii) with respect to each Asset acquired indirectly by the
Company through one or more of its Affiliates or Joint Ventures, 2.5% of the
Contract Purchase Price of such Asset multiplied by the Company’s percentage
equity interest in such Affiliates or Joint Ventures, in each case payable at
the time and in respect of the funds expended for (A) the acquisition of such
Asset (including any debt attributable to the Asset), (B) to the extent that
such funds are capitalized, for the development, construction or improvement of
such Asset (including any debt attributable to the Asset) or (C) the making of a
Mortgage; provided, however, that in no event shall the Company pay the Advisor
Acquisition and Advisory Fees with respect to any temporary investment in
Assets.  The Acquisition and Advisory Fees include reimbursements of allocable
wages and compensation of employees of the Advisor and its Affiliates and
third-party expenses.  The total of all Acquisition Fees and any Acquisition
Expenses shall be limited in accordance with the Articles of Incorporation.

 

(c)           [Reserved]

 

(d)           Subordinated Share of Net Sales Proceeds.  Prior to Listing but
after the Stockholders have received total Distributions in an amount equal to
the sum of their aggregate Invested Capital and Stockholders’ 9% Return, upon
the consummation of any Sale, the Advisor shall receive a Subordinated Share of
Net Sales Proceeds in an amount equal to 15% of Net Sales Proceeds less the
amount by which the Company’s debt for borrowed money exceeds the aggregate book
value of the Company’s assets after the sale of the Asset(s) in respect of which
the Net Sales Proceeds is being determined.

 

Following Listing, and as soon as practicable after determination of Market
Value, if the Stockholders have received or been deemed to have received total
Distributions in an amount equal to the sum of their aggregate Invested Capital
and Stockholders’ 9% Return through the date of Listing, the Advisor shall
receive a Subordinated Share of Net Sales Proceeds in an amount equal to 15% of
Net Sales Proceeds less the amount by which the Company’s debt for borrowed
money exceeds the aggregate book value of the Company’s assets after the sale of
the Asset(s) in respect of which the Net Sales Proceeds is being determined. 
For purposes of this subparagraph (d), in determining whether the Subordinated
Share of Net Sales Proceeds is payable following Listing, in addition to actual
Distributions received, Stockholders will be deemed to have received
Distributions in the amount equal to the Market Value.

 

(e)           Subordinated Incentive Listing Fee.  Following Listing, and as
soon as practicable after determination of Market Value, the Advisor shall be
entitled to receive a Subordinated Incentive Listing Fee payable in the form of
an interest bearing promissory note (the “SILF Note”) in a principal amount
equal to 15% of the amount by which (i) the market value of the outstanding
Shares, measured by taking the Market Value, plus the total of all Distributions
paid to Stockholders from the Company’s inception until the date of Listing,
exceeds (ii) the sum of (A) 100% of Invested Capital and (B) the total
Distributions required to be paid to the Stockholders in order to pay the
Stockholders’ 9%

 

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Return from inception through the date of Listing.  Interest on the SILF Note
will accrue beginning on the date of Listing at a rate deemed fair and
reasonable by the Independent Directors on the date of Listing.  The Company
shall repay the SILF Note using the entire Net Sales Proceeds of each Sale after
Listing until the SILF Note is paid in full, with interest.  If the SILF Note
has not been paid in full within five years from the date of Listing, then the
Advisor, its successors or assigns, may elect to convert the balance of the SILF
Note, including accrued but unpaid interest, into Shares at a price per Share
equal to the average Closing Price of the Shares over the ten trading days
immediately preceding the date of such election.  If the Shares are no longer
listed at such time as the SILF Note becomes convertible into Shares as provided
by this paragraph, then the price per Share, for purposes of conversion, shall
equal the fair market value for the Shares as determined by the Board based upon
the Appraised Value of the Assets as of the date of election.  The principal
amount of the SILF Note shall be referred to as “Subordinated Disposition Fees.”

 

(f)            Debt Financing Fee.  In the event of the origination of any debt
financing obtained by or for the Company (including any refinancing or
assumption of debt), the Company will pay to the Advisor a debt financing fee
equal to one percent (1%) of the amount available under such financing.  The
Debt Financing Fee includes the reimbursement of the specified cost incurred by
the Advisor of engaging third parties to source debt financing, and nothing
herein shall prevent the Advisor from entering fee-splitting arrangements with
third parties with respect to the Debt Financing Fee.

 

(g)           Limitations on Payments.  Notwithstanding the foregoing, no
payments shall be made under Sections 3.01(d), 3.01(e), 4.03(b) or 4.03(c) if,
at or prior to the time the payment is due, the Convertible Shares have been
converted into Shares in the case of Sections 3.01(d) and 3.01(e), or, in the
case of Sections 4.03(b) and 4.03(c), the determination of the number of Shares
issuable upon conversion of the Convertible Shares has been made in accordance
with Article First, Section (iii)(c) of the Articles Supplementary, dated as of
March 22, 2006, to the Articles of Incorporation, in each case, without any
reduction in the number of Convertible Shares converted or in the value or
number of Shares to be issued upon such conversion that may be triggered under
the terms of the Convertible Shares to avoid jeopardizing the Company’s REIT
status.  If, however, the Convertible Shares have been converted into Shares in
the case of Sections 3.01(d) and 3.01(e), or, in the case of Sections
4.03(b) and 4.03(c), the determination of the number of Shares issuable upon
conversion of the Convertible Shares has been made in accordance with
Article First, Section (iii)(c) of the Articles Supplementary, dated as of
March 22, 2006, to the Articles of Incorporation, in each case, with a reduction
in the number of Convertible Shares converted or in the value or number of
Shares issued upon such conversion triggered under the terms of the Convertible
Shares to avoid jeopardizing the Company’s REIT status, (i) no payments
otherwise due and payable under Section 3.01(d) (“Offset Payments”) shall be
paid until the aggregate amount of such Offset Payments equals the aggregate
value of the Shares (as determined at the time of such conversion as being the
Company Value divided by the number of Shares outstanding at such time) issued
or issuable upon conversion of the Convertible Shares, and (ii) any payments
otherwise due and payable under Section 3.01(e), 4.03(b) or 4.03(c) shall be
reduced, dollar-for-dollar, by an amount equal to the aggregate value of the
Shares (as

 

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determined at the time of such conversion as being the Company Value divided by
the number of Shares outstanding at such time) issued or issuable upon
conversion of the Convertible Shares.

 

3.02        Expenses.

 

(a)           In addition to the compensation paid to the Advisor pursuant to
Section 3.01 hereof, the Company shall pay directly or reimburse the Advisor for
the specified cost of all expenses paid or incurred by the Advisor in connection
with the services it provides to the Company pursuant to this Agreement,
including, but not limited to:

 

(i)            Organization and Offering Expenses; provided, however, that
within 60 days after the end of the month in which an Offering terminates, the
Advisor shall reimburse the Company for any Organization and Offering Expenses
reimbursement received by the Advisor pursuant to this Section 3.02, to the
extent that such reimbursement exceeds 1.5% of the Gross Proceeds (2.0% for
Offerings conducted prior to the date hereof but after February 19, 2005, and
2.5% for Offerings conducted prior to February 19, 2005) exclusive of Gross
Proceeds from shares sold under the Company’s Distribution Reinvestment Plan. 
The Advisor shall be responsible for the payment of all Organization and
Offering Expenses in excess of 1.5% of the Gross Proceeds (2.0% for Offerings
conducted prior to the date hereof but after February 19, 2005, and 2.5% for
Offerings conducted prior to February 19, 2005) exclusive of Gross Proceeds from
shares sold under the Company’s Distribution Reinvestment Plan;

 

(ii)           Acquisition Expenses incurred in connection with the selection
and acquisition of Assets in an amount equal to up to 0.5% of the Contract
Purchase Price of each Asset;

 

(iii)          the actual cost of goods, services and materials used by the
Company and obtained from Persons not affiliated with the Advisor, other than
Acquisition Expenses, including brokerage fees paid in connection with the
purchase and sale of Shares or other securities;

 

(iv)          interest and other costs for borrowed money, including discounts,
points and other similar fees;

 

(v)           taxes and assessments on income or property and taxes as an
expense of doing business;

 

(vi)          costs associated with insurance required in connection with the
business of the Company or by the Board;

 

(vii)         expenses of managing and operating Assets owned by the Company,
whether payable to an Affiliate of the Company or a non-affiliated Person;

 

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(viii)        all expenses in connection with payments to the Board for
attendance at meetings of the Board and Stockholders;

 

(ix)           expenses associated with Listing or with the issuance and
distribution of Shares and other securities of the Company, such as Selling
Commissions and fees, advertising expenses, taxes, legal and accounting fees,
Listing and registration fees, and other Organization and Offering Expenses;

 

(x)            expenses connected with payments of Distributions in cash or
otherwise made or caused to be made by the Company to the Stockholders;

 

(xi)           expenses of organizing, revising, amending, converting,
modifying, or terminating the Company or the Articles of Incorporation;

 

(xii)          expenses of any third party transfer agent for the Shares and of
maintaining communications with Stockholders, including the cost of preparation,
printing, and mailing annual reports and other Stockholder reports, proxy
statements and other reports required by governmental entities;

 

(xiii)         administrative service expenses (including personnel costs;
provided, however, that no reimbursement shall be made for costs of personnel to
the extent that such personnel perform services in transactions for which the
Advisor receives a separate fee); and

 

(xiv)        audit, accounting and legal fees.

 

(b)           Expenses incurred by the Advisor on behalf of the Company and
payable pursuant to this Section 3.02 shall be reimbursed no less than quarterly
to the Advisor within 60 days after the end of each quarter.  The Advisor shall
prepare a statement documenting the expenses of the Company during each quarter,
and shall deliver such statement to the Company within 45 days after the end of
each quarter.

 

3.03        Other Services.  Should the Board request that the Advisor or any
director, officer or employee thereof render services for the Company other than
set forth in Section 2.02, such services shall be separately compensated at such
rates and in such amounts as are agreed by the Advisor and the Independent
Directors, subject to the limitations contained in the Articles of
Incorporation, and shall not be deemed to be services pursuant to the terms of
this Agreement.

 

3.04        Reimbursement to the Advisor.  The Company shall not reimburse the
Advisor for Total Operating Expenses to the extent that Total Operating Expenses
(including the Asset Management Fee), in the four consecutive fiscal quarters
then ended (the “Expense Year”) exceed (the “Excess Amount”) the greater of 2%
of Average Invested Assets or 25% of Net Income for such year.  Any Excess
Amount paid to the Advisor during a fiscal quarter shall be repaid to the
Company.  Reimbursement of all or any portion of the Total Operating Expenses
that exceed the limitation set forth in the preceding sentence may, at the
option of the Advisor, be deferred without interest and may be reimbursed in any
subsequent Expense Year where such limitation would permit such reimbursement if
the Total Operating Expense were incurred during such period.  Notwithstanding
the foregoing, if there is an Excess Amount in any Expense Year

 

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and the Independent Directors determine that such excess was justified, based on
unusual and nonrecurring factors which they deem sufficient, the Excess Amount
may be reimbursed to the Advisor.  Within 60 days after the end of any fiscal
quarter of the Company for which there is an Excess Amount which the Independent
Directors conclude was justified and reimbursable to the Advisor, there shall be
sent to the Stockholders a written disclosure of such fact, together with an
explanation of the factors the Independent Directors considered in determining
that such Excess Amount was justified.  Such determination shall be reflected in
the minutes of the meetings of the Board.  The Company will not reimburse the
Advisor or its Affiliates for services for which the Advisor or its Affiliates
are entitled to compensation in the form of a separate fee.  All figures used in
any computation pursuant to this Section 3.04 shall be determined in accordance
with generally accepted accounting principles applied on a consistent basis.

 

3.05        Audit of Advisor Payments.  It is the intention of the parties
hereto to conform strictly to the applicable provisions hereof as to fees,
reimbursements and any other amounts (the “Advisor Payments”) to be paid to the
Advisor hereunder.  However, at any time, either party shall have the right,
upon reasonable written notice, to engage a separate audit, on a confidential
basis, of its own and the other party’s records, books and accounts in respect
of Advisor Payments to ascertain whether the Advisor Payments were properly
determined and paid.  An audit may be engaged only once in any 12-month period
regardless of which party engages the audit.  Any such audit shall be conducted
by an independent certified public accounting firm of recognized national
standing designated by the party requesting the audit (the “Requesting Party’”),
other than the then current auditor of its or any of its Affiliates’ financial
statements, and shall be conducted during regular business hours and in such a
manner so as not to interfere with the Company’s or the Advisor’s regular
business activities.  The Requesting Party shall bear the costs of the audit
unless the audit conclusively reveals an underpayment or overpayment of Advisor
Payments adverse to the Requesting Party in an amount greater than 10% of the
total amount of Advisor Payments owed for the period being inspected, in which
case the other party shall bear the costs of the audit.  Any auditor who is
engaged to perform an audit shall not be compensated on a contingent basis or
any other basis that would tend to give the auditor an interest in the outcome
of the audit, and the auditor shall perform its audit on an impartial basis and
certify in writing as such.  If the audit conclusively reveals an overpayment or
underpayment of Advisor Payments, the Company or the Advisor shall promptly pay
to the other party the amount of the overpayment or underpayment, as the case
may be, without interest; provided, however, that in the event that the audit
conclusively reveals an overpayment of Advisor Payments and the Advisor has at
any time previously waived or forgiven in writing any Advisor Payments that it
would otherwise have been entitled to hereunder, the Company shall credit
against the overpayment any amounts previously waived or forgiven, without
interest, and the Advisor shall not be obligated to repay the Company to the
extent that the overpayments do not exceed the aggregate of the waived or
forgiven amounts not already so credited.  Any underpayment or overpayment under
this Agreement shall not be a breach of this Agreement unless and until an audit
performed in accordance with this Section 3.05 is completed and the party who
may be obligated to make a payment hereunder as a result of such audit shall
have failed to promptly make any required payment.

 

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ARTICLE IV.

TERM AND TERMINATION

 

4.01        Term; Renewal.  Subject to Section 4.02 hereof, this Agreement shall
continue in force until the first anniversary of the date hereof.  Thereafter,
this Agreement may be renewed for an unlimited number of successive one-year
terms upon mutual consent of the parties.  It is the duty of the Board to
evaluate the performance of the Advisor annually before renewing the Agreement,
and each such renewal shall be for a term of no more than one year.

 

4.02        Termination.  This Agreement will automatically terminate upon
Listing.  This agreement also may be terminated at the option of either party
(i) immediately upon a Change of Control or (ii) upon 60 days written notice
without cause or penalty (in either case, if termination is by the Company, then
such termination shall be upon the approval of a majority of the Independent
Directors).  Notwithstanding the foregoing, the provisions of this Agreement
which provide for payment to the Advisor of expenses, fees or other compensation
following the date of termination (i.e., Sections 3.01(e) and 4.03) shall
continue in full force and effect until all amounts payable thereunder to the
Advisor are paid in full.

 

4.03        Payments to and Duties of Advisor upon Termination.

 

(a)           After the Termination Date, the Advisor shall not be entitled to
compensation for further services hereunder except it shall be entitled to and
receive from the Company within 30 days after the effective date of such
termination all unpaid reimbursements of expenses, subject to the provisions of
Section 3.04 hereof, and all contingent liabilities related to fees payable to
the Advisor prior to termination of this Agreement, provided that the
Subordinated Incentive Listing Fee, if any, shall be paid in accordance with the
provisions of Section 3.01(e).  Upon termination, the SILF Note shall become
immediately due and payable and shall be promptly paid by the Company.  In the
event the Subordinated Incentive Listing Fee is paid to the Advisor following
Listing, no Performance Fee will be paid to the Advisor pursuant to Sections
4.03(b) or (c) below.

 

(b)           Upon termination, unless such termination is by the Company
because of a material breach of this Agreement by the Advisor or occurs upon a
Change of Control, the Advisor shall be entitled to receive a Performance Fee
payable in the form of an interest bearing promissory note (the “Performance Fee
Note”) in a principal amount equal to the product of 0.15 times the amount, if
any, by which (i) the Company Value plus the total Distributions paid to holders
of Shares through the Termination Date, exceeds (ii) the sum of the aggregate
Invested Capital plus the Stockholders’ 9% Return through the Termination Date. 
Interest on the Performance Fee Note will accrue beginning on the Termination
Date at a rate deemed fair and reasonable by the Independent Directors.  The
Company shall repay the Performance Fee Note using the entire Net Sales Proceeds
of each Sale after the Termination Date until the Performance Fee Note is paid
in full, with interest.  If the Performance Fee Note has not been paid in full
within five years from the Termination Date, then the Advisor, its successors or
assigns, may elect to convert the balance of the Performance Fee Note, including
accrued but unpaid interest, into Shares at a price per Share equal to the
average Closing Price of

 

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the Shares over the ten trading days immediately preceding the date of such
election if the Shares are Listed at such time.  If the Shares are not Listed at
such time, the Advisor, its successors or assigns, may elect to convert the
balance of the Performance Fee Note, including accrued but unpaid interest, into
Shares at a price per Share equal to the fair market value for the Shares as
determined by the Board based upon the Appraised Value of the Assets on the date
of election.

 

(c)           Notwithstanding the foregoing, if termination occurs upon a Change
of Control, the Advisor shall be entitled to payment of a Performance Fee equal
to the product of 0.15 times the amount, if any, by which (i) the Company Value
plus the total Distributions paid to holders of Shares through the Termination
Date, exceeds (ii) the sum of the aggregate Invested Capital plus the
Stockholders’ 9% Return.  No deferral of payment of the Performance Fee may be
made under this Section 4.03(c).

 

(d)           In the event that the Advisor disagrees with the valuation of
Shares pursuant to Section 4.03(b) where the Shares are not Listed, for purposes
of determining the number of shares to be issued to the Advisor following the
Advisor’s election to convert the balance of the Performance Fee Note owed to
the Advisor, then the fair market value of such shares shall be determined by an
independent appraiser of equity value selected by the Advisor and the Company. 
If the Advisor and the Company are unable to agree upon an expert independent
appraiser, then each of the Company and the Advisor shall name one appraiser and
the two named appraisers shall promptly agree in good faith to the appointment
of one such appraiser whose determination shall be final and binding on the
parties.  The cost of such appraisal shall be shared evenly between the Company
and the Advisor.

 

(e)           The Advisor shall promptly upon termination:

 

(i)            pay over to the Company all money collected and held for the
account of the Company pursuant to this Agreement, after deducting any accrued
compensation and reimbursement for its expenses to which it is then entitled;

 

(ii)           deliver to the Board a full accounting, including a statement
showing all payments collected by it and a statement of all money held by it,
covering the period following the date of the last accounting furnished to the
Board;

 

(iii)          deliver to the Board all assets, including the Assets, and
documents of the Company then in the custody of the Advisor; and

 

(iv)          cooperate with the Company and take all reasonable actions
requested by the Company to provide an orderly management transition.

 

ARTICLE V.
INDEMNIFICATION

 

5.01        Indemnification by the Company.  The Company shall indemnify and
hold harmless the Advisor and its Affiliates, including their respective
officers, directors, partners and

 

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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 Maryland, the Articles of
Incorporation and the NASAA Guidelines.  The foregoing indemnity shall extend,
without limitation, to any claims to the extent relating to any of the events or
outcomes set forth in the Prospectus as possible results, outcomes or risks
associated with the business and investment objectives of the Company. 
Notwithstanding the foregoing, the Advisor shall not be entitled to
indemnification or be held harmless pursuant to this Section 5.01 for any
activity which the Advisor shall be required to indemnify or hold harmless the
Company pursuant to Section 5.02.  Any indemnification of the Advisor may be
made only out of the net assets of the Company and not from Stockholders.

 

5.02        Indemnification by Advisor.  The Advisor shall indemnify and hold
harmless the Company 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 the Advisor’s bad faith,
fraud, misfeasance, misconduct, negligence or reckless disregard of its duties,
but the Advisor shall not be held responsible for any action of the Board in
following or declining to follow any advice or recommendation given by the
Advisor.

 

ARTICLE VI.
MISCELLANEOUS

 

6.01        Assignment to an Affiliate.  This Agreement may be assigned by the
Advisor to an Affiliate of the Advisor with the approval of a majority of the
Board (including a majority of the Independent Directors).  The Advisor may
assign any rights to receive fees or other payments under this Agreement without
obtaining the approval of the Board.  This Agreement shall not be assigned by
the Company without the consent of the Advisor, except in the case of an
assignment by the Company to a corporation or other organization which is a
successor to all of the assets, rights and obligations of the Company, in which
case such successor organization shall be bound hereunder and by the terms of
said assignment in the same manner as the Company is bound by this Agreement. 
This Agreement shall be binding on successors to the Company resulting from a
Change of Control or sale of all or substantially all the assets of the Company
or the Partnership, and shall likewise be binding upon any successor to the
Advisor.

 

6.02        Relationship of Advisor and Company.  The Company and the Advisor
are not partners or joint venturers with each other, and nothing in this
Agreement shall be construed to make them such partners or joint venturers or
impose any liability as such on either of them.

 

6.03        Treatment Under Texas Margin Tax.  For purposes of the Texas margin
tax, the Advisor’s performance of the services specified in this Agreement will
cause the Advisor to conduct part of the active trade or business of the
Company, and the compensation specified in Article III includes both the payment
of management fees and the reimbursement of specified costs incurred in the
Advisor’s conduct of the active trade or business of the Company.  Therefore,
the Advisor and Company intend Advisor to be, and shall treat Advisor as, a
“management company” within the meaning of Section 171.0001(11) of the Texas Tax
Code.

 

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The Company and the Advisor will apply Sections 171.1011(m-1) and
171.1013(f)-(g) of the Texas Tax Code to the Company’s reimbursements paid to
the Advisor pursuant to this Agreement of specified costs and wages and
compensation.  The Advisor and the Company further recognize and intend that
(i) as a result of the fiduciary relationship created by this Agreement and
acknowledged in Section 2.02, reimbursements paid to the Advisor pursuant to
this Agreement are “flow-though funds” that the Advisor is mandated by law or
fiduciary duty to distribute, within the meaning of Section 171.1011(f) of the
Texas Tax Code, and (ii) as a result of Advisor’s contractual duties under this
Agreement, certain reimbursements under this Agreement are “flow-through funds”
mandated by contract to be distributed within the meaning of
Section 171.1011(g) of the Texas Tax Code.  The terms of this Agreement shall be
interpreted in a manner consistent with the characterization of the Advisor as a
“management company” as defined in Section 171.0001(11), and with the
characterization of the reimbursements as “flow-though funds” within the meaning
of Section 171.1011(f)-(g) of the Texas Tax Code.

 

6.04        Notices.  Any notice, report or other communication required or
permitted to be given hereunder shall be in writing unless some other method of
giving such notice, report or other communication is required by the Articles of
Incorporation, the Bylaws, or accepted by the party to whom it is given, and
shall be given by being delivered by hand or by overnight mail or other
overnight delivery service to the addresses set forth herein:

 

To the Directors and to the Company:

 

Behringer Harvard REIT I, Inc.

15601 Dallas Parkway

Suite 600

Addison, Texas 75001

 

 

 

To the Advisor:

 

Behringer Advisors LP

15601 Dallas Parkway

Suite 600

Addison, Texas 75001

 

Either party shall, as soon as reasonably practicable, give notice in writing to
the other party of a change in its address for the purposes of this
Section 6.03.

 

6.05        Modification.  This Agreement shall not be changed, modified, or
amended, in whole or in part, except by an instrument in writing signed by both
parties hereto, or their respective successors or assignees.

 

6.06        Severability.  The provisions of this Agreement are independent of
and severable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.

 

6.07        Choice of Law; Venue.  The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of Texas, and
venue for any action brought with respect to any claims arising out of this
Agreement shall be brought exclusively in Dallas County, Texas.

 

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6.08        Entire Agreement.  This Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof.  The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof.  This Agreement may not be modified
or amended other than by an agreement in writing signed by each of the parties
hereto.

 

6.09        Waiver.  Neither the failure nor any delay on the part of a party to
exercise any right, remedy, power or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege, nor shall any waiver of
any right, remedy, power or privilege with respect to any occurrence be
construed as a waiver of such right, remedy, power or privilege with respect to
any other occurrence.  No waiver shall be effective unless it is in writing and
is signed by the party asserted to have granted such waiver.

 

6.10        Gender; Number.  Words used herein regardless of the number and
gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine, feminine or neuter,
as the context requires.

 

6.11        Headings.  The titles and headings of sections and subsections
contained in this Agreement are for convenience only, and they neither form a
part of this Agreement nor are they to be used in the construction or
interpretation hereof.

 

6.12        Execution in Counterparts.  This Agreement may be executed in
multiple counterparts, each of which shall be deemed to be an original as
against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument.  This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.

 

6.13        Name.  Behringer Advisors LP and/or one or more of its Affiliates
has a proprietary interest in the names “Harvard” (for the businesses engaged in
by the Company and its Affiliates) and “Behringer” (for all purposes). 
Accordingly, and in recognition of this right, if at any time the Company ceases
to retain Behringer Advisors LP or an Affiliate thereof to perform the services
of Advisor, the Company will, promptly after receipt of written request from
Behringer Advisors LP, cease to conduct business under or use the name “Harvard”
or “Behringer” or any diminutive thereof and the Company shall use its best
efforts to change the name of the Company to a name that does not contain the
name “Harvard” or “Behringer” or any other word or words that might, in the sole
discretion of Behringer Advisors LP, be susceptible of indication of some form
of relationship between the Company and Behringer Advisors LP or any Affiliate
thereof.  Consistent with the foregoing, it is specifically recognized that
Behringer Advisors LP or one or more of its Affiliates has in the past and may
in the future organize, sponsor or otherwise permit to exist other investment
vehicles (including vehicles for investment in real estate) and financial and
service organizations having “Harvard” or “Behringer” as a part of their name,
all without the need for any consent (and without the right to object thereto)
by the Company or its Board.

 

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6.14        Initial Investment.  The Advisor or one of its Affiliates has
contributed $200,000 (the “Initial Investment”) in exchange for the initial
issuance of Shares of the Company.  The Advisor or its Affiliates may not sell
any of the Shares purchased with the Initial Investment while the Advisor acts
in an advisory capacity to the Company.  The restrictions included above shall
not apply to any Shares acquired by the Advisor or its Affiliates other than the
Shares acquired through the Initial Investment.  Neither the Advisor nor its
Affiliates shall vote any Shares they now own, or hereafter acquires, in any
vote for the election of Directors or any vote regarding the approval or
termination of any contract with the Advisor or any of its Affiliates.

 

6.15        Ownership of Proprietary Property.  The Advisor retains ownership of
and reserves all Intellectual Property Rights in the Proprietary Property.  To
the extent that the Company has or obtains any claim to any right, title or
interest in the Proprietary Property, including without limitation in any
suggestions, enhancements or contributions that Company may provide regarding
the Proprietary Property, the Company hereby assigns and transfers exclusively
to the Advisor all right, title and interest, including without limitation all
Intellectual Property Rights, free and clear of any liens, encumbrances or
licenses in favor of the Company or any other party, in and to the Proprietary
Property.  In addition, at the Advisor’s expense, the Company will perform any
acts that may be deemed desirable by the Advisor to evidence more fully the
transfer of ownership of right, title and interest in the Proprietary Property
to the Advisor, including but not limited to the execution of any instruments or
documents now or hereafter requested by the Advisor to perfect, defend or
confirm the assignment described herein, in a form determined by the Advisor.

 

6.16        Non-Solicitation.  During the period commencing on the date on which
this Agreement is entered into and ending one year following the termination of
this Agreement, the Company shall not, without the Advisor’s prior written
consent, directly or indirectly, (i) solicit or encourage any person to leave
the employment or other service of the Advisor or its affiliates or (ii) hire,
on behalf of the Company or any other person or entity, any person who has left
the employment within the one year period following the termination of that
person’s employment the Advisor or its affiliates.  During the period commencing
on the date hereof through and ending one year following the termination of this
Agreement, the Company shall not, whether for its own account or for the account
of any other person, firm, corporation or other business organization,
intentionally interfere with the relationship of the Advisor or it affiliates
with, or endeavor to entice away from the Advisor or its affiliates, any person
who during the term of the Agreement is, or during the preceding one-year period
was, a customer of the Advisor or its affiliates.

 

[The remainder of this page intentionally blank]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

 

 

BEHRINGER HARVARD REIT I, INC.

 

 

 

 

 

 

 

 

By:

/s/ Gerald J. Reihsen, III

 

 

 

Gerald J. Reihsen, III

 

 

 

Executive Vice President – Corporate Development & Legal

 

 

 

 

 

 

 

 

BEHRINGER ADVISORS LP

 

 

 

 

 

 

 

 

By:

Harvard Property Trust, LLC,

 

 

 

its General Partner

 

 

 

 

 

 

 

 

 

 

 

By:

/s/ Gerald J. Reihsen, III

 

 

 

 

Gerald J. Reihsen, III

 

 

 

 

Executive Vice President – Corporate Development & Legal

 

A-26

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EXHIBIT B

 

FORM OF ADMINISTRATIVE SERVICES AGREEMENT

 

See attached.

 

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

 

Confidential Treatment Requested.

Confidential portions of this document have been redacted and have been
separately filed with the Commission.

 

FORM OF ADMINISTRATIVE SERVICES AGREEMENT

 

This ADMINISTRATIVE SERVICES AGREEMENT (this “Agreement”) is entered into on
this 31st day of August, 2012 (the “Effective Date”), by and between BEHRINGER
HARVARD REIT I, INC., a Maryland corporation (the “Company”), and BEHRINGER
ADVISORS LLC, a Texas limited liability company (the “Service Provider”).

 

WITNESSETH

 

WHEREAS, the Company and the Service Provider previously entered into that
certain Fifth Amended and Restated Advisory Management Agreement, dated December
29, 2006 (as amended through February 20, 2012, the “Advisory Agreement”), and
the Company and the Service Provider intend for this Agreement to amend and
restate the Advisory Agreement in its entirety as of the date hereof, subject to
the survival of certain provisions of the Advisory Agreement as contemplated in
Section 7.16;

 

WHEREAS, the Company, the Service Provider, Behringer Harvard REIT I Services
Holdings, LLC, and HPT Management Services, LLC have entered into that certain
Master Modification Agreement of even date herewith, pursuant to the terms of
which the Service Provider has agreed, among other things, to waive certain
non-hire and non-solicitation provisions with respect to certain specified
employees of the Service Provider or its Affiliates (who were providing certain
services to the Company under the Advisory Agreement) and the Company will offer
to hire certain of those employees (the “Modification Agreement”);

 

WHEREAS, after the restructuring of certain essential real estate functions
pursuant to the terms of the Modification Agreement, the Company desires to
continue to avail itself of the experience, sources of information, advice and
assistance available to or possessed by the Service Provider and to have the
Service Provider continue to undertake the duties and responsibilities
hereinafter set forth, all as provided herein; and

 

WHEREAS, the Service Provider is willing to agree to continue to provide such
services on the terms and conditions hereinafter set forth.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants
and agreements contained herein, and other good and valuable consideration, the
receipt and sufficiency of which hereby are acknowledged, the parties hereto
agree that the Advisor Agreement hereby is amended and restated in its entirety
as this Administrative Services Agreement, subject to the survival of certain
provisions of the Advisory Agreement as contemplated in Section 7.16, and reads
as follows:

 

ARTICLE I.
DEFINITIONS

 

The following defined terms used in this Agreement shall have the meanings
specified below:

 

Affiliate.  Except as otherwise provided herein, with respect to any Person, any
other Person which, at the time of determination, directly or indirectly
controls, is controlled by or is

 

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under common control with, such Person. For the purposes of this definition,
“control” (including, with correlative meaning, the terms “controlling,”
“controlled by” and “under common control with”) means the possession, directly
or indirectly, of the power to direct or cause the direction of management and
policies of such Person through the ownership of voting securities, by contract
or otherwise. For the avoidance of doubt, the Company, Behringer Harvard
Operating Partnership I LP, and their respective Subsidiaries shall not be
considered Affiliates of any of the Service Provider, Behringer Harvard REIT I
Services Holdings, LLC, HPT Management Services, LLC, Behringer Harvard REIT I
LTIP, LLC, Behringer Harvard Holdings, LLC, or their respective Affiliates and
vice versa.

 

Board.  The Board of Directors of the Company.

 

Change of Control shall occur, with respect to any specified person, if (a) any
Group, who prior to such time beneficially owned (as determined under Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) less than 50%
of the voting shares or other equity interests of such specified person
(measured by voting power rather than the number of shares or other equity
interests), shall acquire (including by merger,  consolidation or otherwise)
voting shares or other equity interests of such specified person, in one or more
transactions or series of transactions, and after such transaction or
transactions such Group beneficially owns 50% or more of voting shares or other
equity interests of such specified person (measured by voting power rather than
the number of shares or other equity interests), or (b) such specified person
shall sell all or substantially all of its assets to any Group which, prior to
the time of such transaction, beneficially, directly or indirectly, owned less
than 50% of the voting shares or other equity interests of such specified person
(measured by voting power rather than the number of shares or other equity
interests).

 

Core Services.  The Human Resources, Shareholder Services and Information
Technology standard services, in each case as described on Annex A attached
hereto.

 

Director.  A member of the Board.

 

Exit Costs.  All out-of-pocket fees, charges and costs incurred by the Service
Provider and its Affiliates at the request of or for the exclusive benefit of
the Company arising from or as a result of the cessation of any Administrative
Service upon the termination of this Agreement or any particular Administrative
Service, including (i) early termination charges, penalties and costs payable by
the Service Provider and its Affiliates to third parties performing part or all
of (or supporting) an Administrative Service; (ii) transition fees, charges and
costs, including with respect to data conversion or conveyance to the Company or
a new service provider to the Company; and (iii) fees, charges and costs
resulting from any ongoing failure to meet any minimum purchase commitments.

 

Force Majeure Event.  An act of God, act of a public enemy, war or national or
regional emergency, rebellion, insurrection, riot, epidemic, quarantine
restriction, fire, flood, explosion, storm, earthquake, interruption or shortage
in the supply of electricity, outside service provider network failure,
terrorist attack, labor dispute, strike, work slowdown or other labor
disruption, or other event beyond the reasonable control of such party.

 

B-2

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Group.  Any person, or any two or more persons acting as a group within the
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended, and
all Affiliates of such person or persons.

 

Non-Core Services.  The Human Resources, Shareholder Services and Information
Technology non-standard services and any Real Estate Transactional Support,
Internal Audit, Information Management, Risk Management, Marketing or Cash
Management services, in each case as described on Annex A attached hereto.

 

Person.  An individual, corporation, association, business trust, estate, trust,
partnership, limited liability company or other legal entity.

 

Other Service Recipients. Any other Person with respect to which the Service
Provider or any of its Affiliates provide any services substantially similar to
the Administrative Services.

 

Subsidiary or Subsidiaries of any Person shall mean any corporation,
partnership, limited liability company, association, trust, joint venture or
other entity or organization of which such Person, either alone or through or
together with any other Subsidiary, owns, directly or indirectly, more than 50%
of the stock or other equity interests, the holder of which is generally
entitled to vote for the election of the board of directors, managers or other
governing body of the entity or organization which such Person so owns. For the
avoidance of doubt, the Company and its Subsidiaries shall not be considered
Subsidiaries of the Service Provider and its Affiliates.

 

Texas Tax Code.  The Texas Tax Code as amended.  Reference to any provision of
the Texas Tax Code Act shall mean such provision as in effect from time to time,
as the same may be amended, and any successor provision thereto, as interpreted
by any applicable administrative rules as in effect from time to time.

 

ARTICLE II.
SERVICES AND TERMS

 

2.01                        Services to be Provided by the Service Provider.

 

(a)                                 During the period commencing on the
Effective Date and continuing until the earliest to occur of (i) with respect to
this Agreement as a whole, the termination of this Agreement, (ii) with respect
to each individual Administrative Service, the termination of such
Administrative Service pursuant to Section 4.02(a), and (iii) with respect to
the Initial Transitional/Implementation Services described in Annex A attached
hereto, the later of the date that is thirty (30) days after the Effective Date
or such later date as is mutually agreed in writing by the parties, subject to
the terms and conditions set forth in this Agreement, the Service Provider will
provide, or will cause to be provided in accordance with Section 2.01(b) to the
Company, (x) the Core Services and (y) as requested by the Company, the Non-Core
Services, in each case as described on Annex A attached hereto (collectively,
the “Administrative Services”).

 

(b)                                 Unless otherwise specifically set forth in
this Agreement or in Annex A attached hereto, the Service Provider will perform
for the Company, or cause one or more

 

B-3

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of its Affiliates or, to the extent permitted pursuant to Section 2.01(d), third
Persons to provide to the Company, the Administrative Services in the manner and
at the locations and level of service (including with respect to timing and
priority) consistent with past practice and with the same standard of care as
historically provided (for the respective Administrative Service) under the
Advisory Agreement.  In connection with providing the Administrative Services,
the Service Provider shall at all times during the term of this Agreement remain
in compliance with all applicable federal, state and local laws, rules and
regulations.  Notwithstanding the foregoing, to the extent there is a change to
such laws, rules or regulations relating to the Administrative Services (whether
identified by the Service Provider or the Company), all required changes to the
Administrative Services resulting from such change in law will be considered as
within the scope of the Administrative Services.

 

(c)                                  The Service Provider and its Affiliates
provide software programs for utilization by the Company in the performance of
certain Administrative Services.  If a vendor of any such software programs (or
services) alleges that use of such software (or services) by the Company is not
permitted under the terms of the applicable license agreement (or other
agreement), the Service Provider shall give written notice thereof to the
Company whereupon the Service Provider shall use commercially reasonable efforts
to negotiate, and the Company shall cooperate with such negotiation, with such
vendor for the Company’s continued use of such software (or services) or make
such other alternative arrangements to enable the continued provision of the
respective Administrative Service or portion thereof in accordance with this
Agreement.

 

(d)                                 In addition to such employees of the Service
Provider and its Affiliates that may be used to perform any of the
Administrative Services, the Service Provider may retain any reputable third
Person qualified to perform such Administrative Service or portion thereof
(each, a “Subcontractor”) to assist the Service Provider in the performance of
any of the Administrative Services, or to perform a particular Administrative
Service or portion thereof, (i) without obtaining the consent of the Company, if
the Service Provider pays the costs and reimbursable expenses of such
Subcontractor and does not seek reimbursement from the Company for the costs and
reimbursable expenses of such Subcontractor and (ii) after obtaining the prior
written consent of the Company, if the costs and reimbursable expenses of such
Subcontractor are to be paid directly by the Company or if the Service Provider
is to be reimbursed by the Company for the costs and reimbursable expenses of
such Subcontractor pursuant to Section 3.01(a).  Notwithstanding the foregoing,
if the Service Provider currently retains a Subcontractor and such Subcontractor
is listed on Schedule 2.01(d) attached hereto or provided less than $10,000 in
costs and expenses during the last twelve months  (each, an “Existing
Subcontractor”), no consent of the Company will be required.  All Existing
Subcontractors that account for costs and expenses in excess of $10,000 per
annum are set forth on Schedule 2.01(d) attached hereto.  The Service Provider
shall remain fully liable for all of the acts and omissions of each
Subcontractor and shall indemnify, defend and hold harmless the Company and its
Affiliates for any claims arising out of or in connection with such acts or
omissions, in each case pursuant to Article VI of this Agreement and as if the
Service Provider itself were providing the subject Administrative Service or
portion thereof. For the avoidance of doubt, no consent of the Company will

 

B-4

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be required prior to the Service Provider causing any of its Affiliates or any
of its or its Affiliates employed or contract personnel to perform any of the
Administrative Services.

 

(e)                                  The Service Provider and its Affiliates
shall have the right to shut down temporarily for maintenance purposes the
operation of any facilities or systems providing or used to provide any
Administrative Service consistent with past practice.  The Service Provider
shall use commercially reasonable efforts not to schedule any shutdown during
the hours of 7:00 am and 6:00 pm Central Time, to minimize periods of
unscheduled shutdown, to schedule each shutdown so as to minimize the disruption
to the business operations of the Company and to give the Company sufficient
advance notice of any shutdown.  With respect to the Administrative Services
dependent on the operation of such facilities or systems, the Service Provider
shall be relieved of its obligations hereunder to provide such Administrative
Services during the period that such facilities or systems are so shut down in
compliance with this Agreement.

 

(f)                                   The Service Provider may modify an
Administrative Service, including, without limitation, by implementing changes
to the software or other information technology used to provide such
Administrative Service, to the extent the same modification (including with
respect to the scope, timing and quality of such Administrative Service) is made
with respect to the Service Provider or its provision of such Administrative
Service to Other Service Recipients consistent with past practice.  The Service
Provider shall notify the Company of any such modification in advance.  The
Service Provider’s responsibilities with respect to such Administrative Service
shall be amended as necessary to conform to any such modification made pursuant
to this Section 2.01(f).  If the Company requests that the Service Provider make
a custom modification in connection with any Administrative Service, or
otherwise alter the manner or level of service from past practice under the
Advisory Agreement, and the Service Provider agrees to make such modification,
the Company will be responsible for all costs and expenses incurred by the
Service Provider and its Affiliates with respect thereto.  If at any time the
Service Provider is unable to provide any Administrative Service to the Company,
the Service Provider shall use its commercially reasonable efforts to promptly
resume the provision of such Administrative Service.

 

2.02                        Company’s Obligations.  The Company shall, as
necessary to enable the provision of the Administrative Services by the Service
Provider and its Affiliates and designees, use commercially reasonable efforts
to: (a) provide timely responses to any information requested by the Service
Provider and its Affiliates and designees; (b) provide access to the Company’s
facilities, employees, assets and information and records regarding employment
and personnel matters as requested by the Service Provider and its Affiliates
and designees; and (c) obtain and maintain all hardware and other equipment,
leases and contracts.  The Service Provider and its Affiliates and designees,
when on the property of the Company or when given access to any equipment,
computer, software, network or files owned or controlled by the Company, will
conform to, and abide by, the reasonable policies and procedures of the Company
concerning health, safety and security which have been made known to the Service
Provider or its applicable Affiliates or designees in advance or which were
applicable to the provision of such Administrative Service prior to the
Effective Date.  The Service Provider and its Affiliates and designees shall be
entitled to rely on any instructions or other information provided by

 

B-5

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authorized personnel designated by the Company, and the Service Provider shall
not be in breach of or in default under this Agreement as a result of any such
reliance and shall not have any liability for acting in accordance with such
instructions.

 

2.03                        Exclusivity.

 

(a)                                 Other than pursuant hereto, the Company
shall not contract with any Person to perform any Core Service prior to the date
of termination of the respective Core Service, each Core Service being provided
under this Agreement on an exclusive basis.  However, the Company may hire
personnel to perform any Core Service with prior written notice to the Service
Provider and if such personnel do not adversely affect the Service Provider’s
cost or ability to provide in any material respect any Core Service.

 

(b)                                 The Company may hire personnel or contract
with any Person at any time to provide any Non-Core Service; provided, however,
that if the retention of such Person would adversely affect the Service
Provider’s ability to provide in any material respect, or increase the Service
Provider’s cost to provide, any Core Service (in the good faith judgment of the
Services Provider), the prior written consent of the Service Provider shall be
required, which consent may be withheld or granted in Service Provider’s sole
discretion, however the withholding or granting of such consent shall not be
unreasonably delayed.

 

(c)                                  The Company shall provide the Service
Provider with no less than 20 days advance notice of its intention to retain any
Person to provide any Non-Core Service other than Information Management, Cash
Management, Marketing or Risk Management (subject to the Company providing
notice to the Service Provider of such retention and cooperating with the
Service Provider as provided in the Property Management Agreement), in each case
as set forth on Annex A, and shall promptly provide the Service Provider with
any reasonably requested information concerning such proposed engagement.  The
Service Provider may, within 10 days following such notice and delivery of all
such reasonably requested information, determine to cease providing all or part
of such Non-Core Service which would remain to be provided hereunder.  For the
avoidance of doubt, if the Service Provider determines not to provide all or any
part of any Non-Core Service, the Company may retain any Person to provide such
portion of such Non-Core Service immediately upon such determination.

 

2.04                        Other Activities of the Service Provider.

 

(a)                                 Nothing herein contained shall, consistent
with past practice, (a) prevent the Service Provider or its Affiliates from
engaging in other activities, including, the rendering of advice or services to
Other Service Recipients; (b) limit or restrict the right of any director,
manager, officer, employee, or stockholder of the Service Provider or its
Affiliates to engage in any other business or to render advice or services of
any kind to any other Person; or (c), with respect to any investment in which
the Company is a participant, also render advice and service to each and every
other participant therein.

 

B-6

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(b)                                 The Service Provider shall have the right
and sole discretion to establish priorities, as between the Service Provider
(and its Affiliates) and the Other Service Recipients, on the one hand, and the
Company on the other hand, as to the provision of the Administrative Services;
provided, however, that the Service Provider shall, and shall cause its
Affiliates to, use commercially reasonable efforts to, maintain sufficient
resources to perform the Administrative Services in accordance with this
Agreement; and provided further that such prioritization shall be consistent
with past practice (for the respective Administrative Service) under the
Advisory Agreement.

 

2.05                        Warranties.  The Service Provider represents,
warrants, and covenants to, and agrees with, the Company that: (a) it has the
full and unencumbered right and authority to enter into this Agreement; (b)
nothing in this Agreement conflicts with or violates any other agreement to
which the Service Provider is bound; and (c) subject to Section 2.01(c), it has
and will maintain all approvals, rights, consents, licenses, leases, permits and
authorizations necessary to execute, deliver and perform its obligations under
this Agreement and grant the Company the right to access and use the
Administrative Services.

 

2.06                        DISCLAIMER.  THIS IS A SERVICE AGREEMENT. EXCEPT AS
EXPRESSLY STATED IN THIS AGREEMENT, THERE ARE NO EXPRESS WARRANTIES OR
GUARANTIES, AND THERE ARE NO IMPLIED WARRANTIES OR GUARANTIES, INCLUDING, BUT
NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY, TITLE AND FITNESS FOR
A PARTICULAR PURPOSE.

 

ARTICLE III.:
SERVICE CHARGES AND REIMBURSEMENT OF SPECIFIED EXPENSES.

 

3.01                        Service Charges.

 

(a)                                 Annex A attached hereto sets forth with
respect to each of the Administrative Services a description of the charges for
such Administrative Service or the basis for the determination thereof (the
“Service Charges”).  In addition to the Service Charges, in connection with
performance of each Administrative Service, the Company shall reimburse the
Service Provider with respect to (i) costs of Subcontractors retained on behalf
of or for the benefit of the Company (whose retention has been separately
approved by the Company pursuant to Section 2.01(d) or who is retained by the
Service Provider as of the Effective Date) and paid by the Service Provider or
one of its Affiliates, including their products, services, materials and
expenses, (ii) cost of materials, including without limitation, cost of
software, provided, however, that in no event shall such reimbursement, after
consideration of reimbursement payments received or due with respect to such
materials from Other Service Recipients, exceed the cost of such materials, and
(iii) out-of-pocket travel and other expenses, in each case consistent with past
practice under the Advisory Agreement or otherwise contemplated hereby
(collectively, the “Other Costs”).  All Other Costs will be reimbursed to the
Service Provider by the Company; provided, however, that, any Other Costs will
only be payable after the Company has received from the Service Provider
reasonably detailed documentation to support the calculation of such amounts due
to the Service Provider.  For the avoidance of doubt, the Company shall not
incur any Service Charges for Non-

 

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Core Services delivered by the Service Provider to the Company in connection
with that certain License Agreement, between the Company and Behringer Harvard
Holdings, LLC, dated as of the date hereof, unless the Company and the Service
Provider agree that such Non-Core Services are to be delivered pursuant to this
Agreement.

 

(b)                                 Unless specifically indicated to the
contrary, the pricing provided on Annex A attached hereto covers the Company’s
current corporate headquarters in Dallas, Texas (the “Headquarters”) and its
other current corporate offices in Louisville, Kentucky, Atlanta, Georgia and
Chicago, Illinois (together with the Headquarters, the “Corporate Offices”).

 

(c)                                  All rates and amounts set forth on Annex A
attached hereto (other than the retainer amount for Real Estate Transactional
Support services detailed on Annex A attached hereto) shall be increased by 1.5%
of the immediately previously applicable rates and amounts on January 1, 2013
and by 3% of the immediately previously applicable rates and amounts on January
1 of each year starting on January 1, 2014.

 

3.02                        Invoices.

 

(a)                                 The Service Provider will deliver an invoice
(including line items for each category of Core Services and Non-Core Services
provided) to the Company not less frequently than on a quarterly basis (or at
such other frequency as is set forth in Annex A attached hereto) for all Service
Charges and any Other Costs for the respective period.  Following the
termination of this Agreement, the Service Provider will promptly deliver an
invoice to the Company for all Service Charges up to and including the date of
termination and any Other Costs payable by the Company.

 

(b)                                 The Company will pay the undisputed amount
of any invoice to the Service Provider in U.S. dollars within 30 days of the
date of such invoice and provide written notice to the Service Provider of the
amount of the invoice that the Company, in good faith, disputes at or before the
time of payment. If the Company fails to pay such invoice amount, or provide
such notice, by such date, the Company will be obligated to pay to the Service
Provider, in addition to the amount due, interest on the unpaid and undisputed
invoice amount at the lesser of (i) one percent (1%) per month and (ii) the
maximum rate of interest allowed by applicable law, from the date the payment
was due through the date of payment.  The Company and the Service Provider will
make a good faith effort to resolve billing disputes as expeditiously as
possible.

 

(c)                                  The Company and persons designated by the
Company shall at reasonable times and upon reasonable advance notice have
reasonable access to the Service Provider’s records, books and accounts in
respect to payments made with respect to the provision of the Administrative
Services in accordance with Annex A.

 

ARTICLE IV.
TERM AND TERMINATION

 

4.01                        Term.  The term of this Agreement shall commence on
the Effective Date and shall continue until February 14, 2017 unless otherwise
terminated in accordance with this

 

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[***] Confidential material redacted and filed separately with the Commission.

 

Agreement.  Each Administrative Service specified herein may be terminated
earlier (on an Administrative Service by Administrative Service basis) in
accordance with the provisions of Section 2.03(c) or this Article IV. The
Initial Transitional/Implementation Services described in Annex A attached
hereto will terminate on the later to occur of the date that is thirty (30) days
after the Effective Date or such later date as is mutually agreed in writing by
the parties.

 

4.02                        Termination.

 

(a)                                 The Company may terminate any category of
Administrative Services, separately or collectively, at the following times and
upon payment of the following amounts.  With respect to each category of Core
Services, the Company may terminate any such Core Service (in full, not in part)
beginning on June 30, 2015 for an amount (in cash) equal to ***; provided,
however, that the Company may terminate Shareholder Services (x) during the
period from June 30, 2013 through June 29, 2014 for an amount (in cash) equal to
*** and (y) during the period from June 30, 2014 through June 29, 2015 for an
amount (in cash) equal to ***.  Either the Company or the Service Provider may
terminate Real Estate Transactional Support services beginning on June 30, 2013,
subject to the advance notice requirement set forth in Section 4.02(e) and may
terminate Internal Audit, Information Management, Risk Management, Marketing or
Cash Management services at any time subject to the advance notice requirement
set forth in Section 4.02(e), in each case without payment of any termination
compensation amount.  Any such termination shall be by written notice, which
written notice shall be accompanied or preceded by payment of the entire
termination fee, if any, due in connection with such termination.

 

(b)                                 Notwithstanding Section 4.02(a):

 

(i)                                     Either party may terminate any category
of Administrative Services due to a material breach of this Agreement (subject
to the following notice and cure provisions) with respect to such category of
Administrative Services by the other party.  The non-breaching party shall
provide written notice to the breaching party of the alleged breach, and the
breaching party shall have forty-five (45) days to cure the breach. If the
breach has not been cured within this forty-five day period, then the
non-breaching party may terminate the respective category of Administrative
Services upon fifteen (15) days’ written notice.

 

(ii)                                  Notwithstanding Section 4.02(b)(i), with
respect to Information Technology Services only, if such breach (A) is a
continuing breach that causes a material adverse effect on the operations of the
non-breaching party, (B) was not caused primarily by the non-breaching party,
and (C) was not caused by a Force

 

B-9

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Majeure Event, then following the provision of written notice by the
non-breaching party to the breaching party, the breaching party shall have
seventy-two (72) hours to cure such breach or provide for a reasonably
acceptable temporary workaround and, if the breach has not been cured or such
workaround been delivered within such seventy-two hour period, the non-breaching
party may immediately terminate the Information Technology Services without
payment of any termination compensation amount. For the avoidance of doubt, if
the Information Technology Services are not terminable by such non-breaching
party pursuant to this Section 4.2(b)(ii), then such non-breaching party shall
nevertheless have the right to terminate such Information Technology Services
pursuant to Section 4.02(b)(i), to the extent provided for in
Section 4.02(b)(i).

 

(iii)                               If any category of Administrative Services
is terminated pursuant to Section 4.02(b), no other category of Administrative
Services shall be affected by such termination.

 

(c)                                  Termination of this Agreement or an
Administrative Service shall not impact rights accrued or obligations incurred
by the Service Provider prior to such termination, such as the right of the
Service Provider to receive payment of Service Charges for Administrative
Services rendered before termination and the right to reimbursement for any
Other Costs associated with the provision of the Administrative Services or the
respective Administrative Service, whether payable before or following such
termination, including amounts payable by the Service Provider or its Affiliates
under any contract with a third party related to the provision of Administrative
Services or the respective terminated Administrative Service, which third party
contract is not then terminable; provided, however, that the Service Provider
shall terminate such third party contract as soon as such contract is terminable
and does not otherwise incur optional costs of expenses in connection with such
third party contract.  In no event shall the Service Provider be entitled to
reimbursement for the costs of any Subcontractor engaged by the Service Provider
pursuant to clause (i) of Section 2.01(d).  Termination of this Agreement or an
Administrative Service shall not impact rights accrued or obligations incurred
by the Company prior to such termination, such as the obligation of the Service
Provider to provide Administrative Services in accordance with the applicable
standards set forth herein prior to such termination.

 

(d)                                 In connection with any termination, in
addition to any Other Costs, the Company shall reimburse the Service Provider
for all Exit Costs; provided, however, that the Exit Costs for the
Administrative Services (taken as a whole) shall not exceed $350,000; provided,
further, however, that the Service Provider shall not be responsible for, and
the Company shall reimburse the Service Provider for, all Exit Costs (i) with
respect to arrangements or contracts the entry into which the Company has
previously consented in writing after the date of this Agreement (other than
arrangements or contracts or amendments or modifications thereto (other than the
arrangement with DST Systems referenced in clause (ii) below) in existence as of
the date of this Agreement that are renewed or replaced on the same terms and
conditions with respect to Exit Costs), which consent may be withheld or granted
in the Company’s sole discretion; and (ii)

 

B-10

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payable to DST Systems, Inc. pursuant to that certain Transfer Agency Agreement
dated February 22, 2008 to which the Company is a party, as amended from time to
time.

 

(e)                                  The Company will give the Service Provider
not less than 90 days’ advance written notice of its intention to terminate any
of the Administrative Services.  For the avoidance of doubt, with respect to the
termination of any Administrative Service by either the Company or the Service
Provider, while notice of termination may be delivered prior to the date such
Administrative Service may be terminated, termination shall not be effective
until on or after the date such Administrative Service may be terminated as
contemplated by this Agreement.

 

(f)                                    Notwithstanding the foregoing, in the
event of expiration or termination of this Agreement for any reason, the Company
may, at its option, request transition services, which may reasonably be needed
by the Company in connection with the orderly and expeditious transition of the
services provided by the Service Provider to a third-party provider
(“Post-Termination Services”).  The Company shall provide to the Service
Provider at least thirty (30) days, advance written notice specifying in
reasonable detail the Post-Termination Services required, and the Service
Provider and the Company shall agree in writing to the scope of such
Post-Termination Services and the other pricing, terms and conditions under
which they will be provided.

 

(g)                                 The terms and conditions of Articles V, VI
and VII shall survive any termination or expiration of this Agreement. In
addition, Section 3.01(a) shall continue in full force and effect following the
date of termination until all amounts payable thereunder to the Service Provider
are paid in full.

 

ARTICLE V.

INFORMATION SECURITY, CONFIDENTIALITY AND DISASTER RECOVERY

 

5.01                        Company Materials.

 

(a)                                  The Service Provider will take commercially
reasonable measures designed to maintain the security of Company Materials
consistent with past practice and agrees to comply in all material respects with
all federal, state and local laws and regulations governing the privacy and
security of stored or transmitted (whether electronically or otherwise) personal
information to the extent such laws are applicable to such party in connection
with this Agreement.

 

(b)                                 For purposes of this Agreement, “Company
Materials” shall mean all data, information, images, text, content or materials
(in whatever form or media) that: (i) is supplied to the Service Provider by, or
on behalf of, the Company hereunder, or (ii) the Company makes accessible to the
Service Provider in connection with the Administrative Services, including:
(A) any Personal Information (as defined on Annex B); (B) the Company’s standard
materials and derivations thereof and other material related thereto; (C) the
Company’s methodologies, techniques, templates, flowcharts, architecture
designs, tools, specifications, standard materials, practices, processes,
inventions, formulae, models, samples, records and documentation, concepts and
know-

 

B-11

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how (including, but not limited to, lease terms and conditions, tenant
information, materials related to title of the Company’s property, analyses
provided in connection with underwriting of the Company’s property and diligence
materials related to the acquisition or disposition of the Company’s property)
(D) all other materials or information in which the Company has intellectual or
proprietary property rights; and (E) any derivatives, modifications or
improvements of any of the foregoing.

 

5.02                        Confidentiality.

 

(a)                                  For purposes of this Agreement, the term
“Confidential Information” means all business information disclosed by one party
to the other in connection with this Agreement, and includes, the terms of this
Agreement and all information clearly identified in writing as confidential by
the disclosing party prior to or at the time of disclosure of such information
to the other party.  Each party’s Confidential Information may include trade
secrets and proprietary property of, and may have great commercial value to,
such party.  Without limiting the generality of the foregoing, the Company’s
Confidential Information includes the Company Materials and any information
relating to the Company’s use of the Administrative Services.  Confidential
Information does not include information the receiving party can document:
(i) is already in the receiving party’s possession, provided that such
information is not known by the receiving party to be subject to another
confidentiality agreement with or other obligation of secrecy to the providing
party, (ii) becomes generally available to the public other than as a result of
a disclosure by the receiving party, (iii) becomes available to the receiving
party on a non-confidential basis from a source other than the providing party,
provided that such source is not known by the receiving party to be bound by a
confidentiality agreement with or other obligation of secrecy to the providing
party, or (iv) is independently developed by the receiving party without use of
or reference to information from the providing party.

 

(b)                                 By virtue of this Agreement, either party
may have access to Confidential Information of the other party.  The parties
agree to hold each other’s Confidential Information in confidence and be bound
by the obligations set forth in this Article V during the term of this Agreement
and for a period of 2 years thereafter and in perpetuity in respect of Personal
Information.  The receiving party agrees not to make the disclosing party’s
Confidential Information available in any form to any third party or directly or
indirectly, communicate, publish, display, loan, give or otherwise disclose any
Confidential Information, or permit access to or possession of such Confidential
Information, other than as necessary for its performance under this Agreement,
unless, and only to the minimum extent, required by law or to satisfy
governmental regulatory requirements (in which case the party seeking to make
such disclosure shall notify the other party of its intent to make such
disclosure, and, to the maximum extent available, such party shall seek
protective treatment for such disclosed Confidential Information), or to use the
disclosing party’s Confidential Information for any purpose beyond the scope of
this Agreement.  In addition to the requirements set forth in Section 5.01 and
the Annex B, each party agrees to take all reasonable steps to ensure that the
other party’s Confidential Information is not disclosed or distributed by its
employees, contractors or agents in violation of the terms of this Agreement.

 

B-12

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(c)                                  In the event of any breach of these
confidentiality terms by a receiving party, the parties acknowledge that money
damages may not be a sufficient remedy for damages suffered by the disclosing
party, and the disclosing party may be entitled to seek equitable relief,
including injunctions or orders for specific performance, in an action
instituted in any court having subject matter jurisdiction, in addition to all
other remedies available to the disclosing party with respect thereto at law.  A
party’s pursuit of or obtaining equitable relief in the event of a breach of
this Agreement shall not preclude that party from recovering damages from the
breaching party subject to the terms of this Agreement.

 

5.03                        Return and Destruction of Information.  Promptly
after the expiration or termination of this Agreement, or, if applicable, the
Post-Termination Services: (a) all the Company’s Confidential Information
(including any Company Materials) in the Service Provider’s possession or
control shall be returned to the Company by the Service Provider or, at the
Company’s request, be destroyed; provided, however, that, subject to the
confidentiality obligations set forth herein, the Service Provider may retain
(and will not be obliged to erase, or destroy) one electronic copy of any
Confidential Information created as a result of automatic electronic back-up
procedures; (b) all electronic copies of the Company’s Confidential Information
(including any Company Materials) in the Service Provider’s possession or
control shall be deleted in a manner that makes the Confidential Information
non-readable and non-retrievable; and (c) the Service Provider will certify to
the Company, in writing, that the Service Provider has complied with its
obligations under this Section 5.03; provided, however, that in each case the
return, destruction or deletion of such Company Materials other than Personal
Information (except Personal Information that must be retained by the Service
Provider in accordance with applicable laws) shall be subject to the Service
Provider’s document retention policy as in effect on the date hereof, and that
the Service Provider may retain one copy of the Company Materials solely to the
extent required to support the Service Charges and for tax and accounting
purposes.  Notwithstanding any such return, destruction, deletion or retention
of the Company’s Confidential Information, the agreements and obligations of the
Service Provider under Section 5.02 shall remain unaffected thereby.

 

5.04                        Disaster Recovery Plan.  The Service Provider shall
maintain a written disaster recovery plan (the “Disaster Recovery Plan”), a copy
of which will be provided to the Company promptly upon availability, designed to
ensure the continuing provision of the Administrative Services in accordance
with this Agreement, notwithstanding any disaster or event which would otherwise
adversely affect the provision of the Administrative Services.  The Disaster
Recovery Plan, which may change from time to time, is available upon request
from the Service Provider consistent with past practice.  The Service Provider
shall bear any costs associated the Disaster Recovery Plan.

 

ARTICLE VI.
INDEMNIFICATION; LIMITATION ON LIABILITY

 

6.01                        Indemnification by the Company.  The Company shall
indemnify and hold harmless the Service Provider and its Affiliates, including
their respective officers, directors, managers, 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,

 

B-13

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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 Maryland.  Notwithstanding the foregoing, the Service
Provider shall not be entitled to indemnification or be held harmless pursuant
to this Section 5.01 for any activity which the Service Provider shall be
required to indemnify or hold harmless the Company pursuant to Section 5.02. 
Any indemnification of the Service Provider may be made only out of the net
assets of the Company and not from stockholders of the Company.

 

6.02                        Indemnification by Service Provider.  The Service
Provider shall indemnify and hold harmless the Company and its Affiliates,
including their respective officers, directors, managers, partners and
employees, 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 the Service Provider’s bad
faith, fraud, misfeasance, willful misconduct, gross negligence or reckless
disregard of its duties under this Agreement.

 

6.03                        Limitation on Liability.  Notwithstanding any other
provision contained in this Agreement, the Company agrees that the Service
Provider will not be liable to the Company, whether based on contract, tort
(including negligence), warranty or any other legal or equitable grounds, for
any special, indirect, punitive, incidental or consequential losses, damages or
expenses of the Company.

 

ARTICLE VII.
MISCELLANEOUS

 

7.01                        Assignment to an Affiliate.  Neither this Agreement
nor any of the rights, interests or obligations hereunder shall be assigned,
transferred, delegated or otherwise disposed of (whether voluntarily or
involuntarily, directly or indirectly, by operation of law, merger, sale of
stock, sale of assets or otherwise), by the Service Provider without the prior
written consent of the Company.  Notwithstanding the foregoing, (a) the Service
Provider may, without the prior consent of the Company, assign, transfer,
delegate or otherwise dispose of, this Agreement, or any of its rights,
interests or obligations hereunder to any Affiliate of Behringer Harvard
Holdings, LLC, in whole or in part; provided, however, that such Affiliate
remains an Affiliate of Behringer Harvard Holdings, LLC at all times following
such assignment, transfer, delegation or other disposition and, if this
Agreement is in whole assigned, transferred, delegated or disposed to such an
Affiliate, signs a joinder agreement and is bound hereunder, but no such
assignment, transfer, delegation or other disposition shall relieve the Service
Provider of any of its obligations hereunder, (b) the Service Provider may
assign any rights to receive fees or other payments under this Agreement without
obtaining the approval of the Company, and (c) this Section 7.01 shall not
restrict a Change of Control of Behringer Harvard Holdings, LLC.   Any purported
assignment, transfer, delegation or disposition by the Service Provider in
violation of this Section 7.01 shall be null and void ab initio.

 

7.02                        Relationship of Service Provider and Company.  The
Company and the Service Provider are not partners or joint venturers with each
other, and nothing in this Agreement shall be construed to make them such
partners or joint venturers or impose any liability as such on either of them.

 

B-14

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7.03                        Treatment Under Texas Margin Tax.  For purposes of
the Texas margin tax, the Service Provider’s performance of the services
specified in this Agreement will cause the Service Provider to conduct part of
the active trade or business of the Company, and the compensation specified in
Article III includes both the payment of management fees and the reimbursement
of specified costs incurred in the Service Provider’s conduct of the active
trade or business of the Company.  Therefore, the Service Provider and Company
intend the Service Provider to be, and shall treat the Service Provider as, a
“management company” within the meaning of Section 171.0001(11) of the Texas Tax
Code.  The Company and the Service Provider will apply Sections 171.1011(m-1)
and 171.1013(f)-(g) of the Texas Tax Code to the Company’s reimbursements paid
to the Service Provider pursuant to this Agreement of specified costs and wages
and compensation.  The Service Provider and the Company further recognize and
intend that (i) as a result of the relationship created by this Agreement,
reimbursements paid to the Service Provider pursuant to this Agreement are
“flow-though funds” that the Service Provider is mandated by law or fiduciary
duty to distribute, within the meaning of Section 171.1011(f) of the Texas Tax
Code, and (ii) as a result of the Service Provider’s contractual duties under
this Agreement, certain reimbursements under this Agreement are “flow-through
funds” mandated by contract to be distributed within the meaning of
Section 171.1011(g) of the Texas Tax Code.  The terms of this Agreement shall be
interpreted in a manner consistent with the characterization of the Service
Provider as a “management company” as defined in Section 171.0001(11), and with
the characterization of the reimbursements as “flow-though funds” within the
meaning of Section 171.1011(f)-(g) of the Texas Tax Code.

 

7.04                        Notices.  Any notice, report, approval, waiver,
consent or other communication (each, a “Notice”) required or permitted to be
given hereunder shall be in writing and shall be deemed given or delivered:
(i) when delivered personally; (ii) one business day following deposit with a
recognized overnight courier service that obtains a receipt, provided such
receipt is obtained, and provided further that the deposit occurs prior to the
deadline imposed by such service for overnight delivery; (iii) when transmitted,
if sent by electronic mail, provided a read receipt is delivered to the sender,
in each case provided such communication is addressed to the intended recipient
thereof as set forth below:

 

To the Company:

Behringer Harvard REIT I, Inc.

17300 Dallas Parkway

Suite 1010

Addison, Texas 75248

Attention: Telisa Webb Schelin

 

With a copy (which shall not constitute notice) to:

Proskauer Rose, LLP

Eleven Times Square

New York, New York 10036

Attention: Peter M. Fass

James P. Gerkis

 

Shefsky & Froelich

111 East Wacker, Suite 2800

Chicago, Illinois 60601

Attention:  Michael Choate

 

B-15

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To the Service Provider:

 

Behringer Advisors LLC

15601 Dallas Parkway

Suite 600

Addison, Texas 75001

Attention: M. Jason Mattox

Stanton P. Eigenbrodt

 

 

With a copy (which shall not constitute notice) to:

Jenner & Block LLP
353 North Clark Street
Chicago, Illinois 60654

Attention: Donald E. Batterson

Jeffrey R. Shuman

 

Either party shall, as soon as reasonably practicable, give Notice in writing to
the other party of a change in its address for the purposes of this
Section 7.04.  The failure of any Party to give notice shall not relieve any
other Party of its obligations under this Agreement except to the extent that
such Party is actually prejudiced by such failure to give notice.

 

7.05                        Modification.  This Agreement shall not be changed,
modified, or amended, in whole or in part, except by an instrument in writing
signed by both parties hereto, or their respective permitted successors or
permitted assignees.

 

7.06                        Severability.  The provisions of this Agreement are
independent of and severable from each other, and no provision shall be affected
or rendered invalid or unenforceable by virtue of the fact that for any reason
any other or others of them may be invalid or unenforceable in whole or in part.

 

7.07                        Choice of Law; Venue.  The provisions of this
Agreement shall be construed and interpreted in accordance with the laws of the
State of Texas, and venue for any action brought with respect to any claims
arising out of this Agreement shall be brought exclusively in Dallas County,
Texas.

 

7.08                        Entire Agreement.  This Agreement contains the
entire agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior agreements, understandings,
inducements and conditions, express or implied, oral or written, of any nature
whatsoever with respect to the subject matter hereof.  The express terms hereof
control and supersede any course of performance and/or usage of the trade
inconsistent with any of the terms hereof.

 

7.09                        Waiver.  Neither the failure nor any delay on the
part of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege
with respect to any other occurrence.  No

 

B-16

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waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

 

7.10                        Interpretation.  The words “include” and
“including,” and variations thereof, and the words “such as”, shall not be
deemed to be terms of limitation, but rather shall be deemed to be followed by
the words “without limitation.”  The terms “hereof,” “hereunder,” “herein” and
words of similar import shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.  Each party hereto has participated in
the drafting of this Agreement, which each party acknowledges is the result of
extensive negotiations between the parties, and consequently this Agreement
shall be interpreted without reference to any rule or precept of law to the
effect that any ambiguity in a document be construed against the drafter.

 

7.11                        Gender; Number.  Words used herein regardless of the
number and gender specifically used, shall be deemed and construed to include
any other number, singular or plural, and any other gender, masculine, feminine
or neuter, as the context requires.

 

7.12                        Headings.  The titles and headings of sections and
subsections contained in this Agreement are for convenience only, and they
neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.

 

7.13                        Execution in Counterparts.  This Agreement may be
executed with counterpart signature pages or in multiple counterparts, each of
which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same
instrument.  This Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.

 

7.14                        Facsimile Signatures.  A facsimile or other
electronic signature on the signature pages hereto shall for all purposes be
deemed an original and shall bind the signor as if such facsimile or other
electronic signature were an original.

 

7.15                        Non-Solicitation.  Subject to Section 2.2 of the
Modification Agreement, during the period commencing on the date on which this
Agreement is entered into and ending one year following the termination of this
Agreement, the Company shall not, without the Service Provider’s prior written
consent, directly or indirectly, (i) solicit or encourage any person to leave
the employment or other service of the Service Provider or its Affiliates or
(ii) hire, on behalf of the Company or any other person or entity, any person
who has left the employment or service within the one year period following the
termination of that person’s employment or service with the Service Provider or
its Affiliates.  During the period commencing on the date hereof through and
ending one year following the termination of this Agreement, the Company shall
not, whether for its own account or for the account of any other Person,
intentionally interfere with the relationship of the Service Provider or its
Affiliates, or endeavor to entice away from the Service Provider or its
Affiliates, any person who during the term of the Agreement is, or during the
preceding one-year period was, a customer of the Service Provider or its
Affiliates.  Upon the termination of any Administrative Service pursuant to
Section 4.2(a), Service Provider shall waive the non-solicitation and non-hire
provisions of this Section 7.15 with respect to any employee of Service Provider
or any of its Affiliates providing such Administrative Service

 

B-17

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solely to the Company during the 2 month period ending on the date of
termination of such Administrative Service to allow such employee to work for
the Company.

 

7.16                        Survival of Advisory Agreement Provisions.  This
Agreement amends and restates the Advisory Agreement in its entirety except in
respect of the provisions of the Advisory Agreement specified in Section 6.5 of
the Modification Agreement.  Notwithstanding the amendment and restatement of
the Advisory Agreement into this Agreement, those provisions of the Advisory
Agreement specified in Section 6.5 of the Modification Agreement as surviving
the amendment and restatement of the Advisory Agreement shall continue in full
force and effect.

 

7.17                        No Presumption Against Drafter.  Each of the parties
has jointly participated in the negotiation and drafting of this Agreement. In
the event of an ambiguity or a question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by each of the parties, and
no presumptions or burdens of proof shall arise favoring any party by virtue of
the authorship of any of the provisions of this Agreement.

 

[Signature Page Follows]

 

B-18

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.

 

 

BEHRINGER HARVARD REIT I, INC.

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

BEHRINGER ADVISORS LLC

 

 

 

 

 

 

By:

Harvard Property Trust, LLC,

 

 

its Manager

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

[Signature Page to the Administrative Services Agreement]

 

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[***] Confidential material redacted and filed separately with the Commission.

 

Schedule 2.01(d)

 

EXISTING SUBCONTRACTORS

IN EXCESS OF $10,000 PER YEAR

 

Subcontractors

 

***

 

Other Vendors (Not Subject to Section 2.01(d))

 

***

 

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[***] Confidential material redacted and filed separately with the Commission.

 

ANNEX A

 

Any Service Charges that are billed hourly and incurred with respect to
performance of Core Services and Non-Core Services as set forth on this Annex A
shall be listed on an invoice that includes line items for each category of Core
Services and Non-Core Services provided and each fee and cost incurred,
including specific amounts of time expended, and such invoice shall be delivered
pursuant to Section 3.02(a). Amounts due for services payable at an annual rate
(other than retainer amounts) shall be payable pro rata for any partial year.

 

HUMAN RESOURCES

 

Initial Transitional/Implementation Services

 

The following initial transitional/implementation services will be provided for
a flat fee of $*** payable on the Effective Date; provided, that the portion of
the previously approved expenditure of $*** made to the Service Provider that
was utilized for preparing human resources services for the transition and has
been paid will be credited to the Company as it relates to such flat fee
outstanding under the Administrative Services Agreement:

 

·      Employee Onboarding Activities

 

·      Policy/Document Development

 

·      Benefits Implementation

 

·      Systems Revision/Implementation (HRIS)

 

Refer to Exhibit A for additional details with respect to Human Resources
Initial Transitional/Implementation Services to be provided under this
Agreement.

 

Subsequent Transitional/Implementation Services

 

Pricing for any subsequent transitional/implementation services resulting from a
change of control or similar situation (including significant M&A activity on
the part of the Company) if one should occur during the term of the Agreement
will be mutually agreed by the parties at such time based on the number of
employees affected by such change of control or similar situation and the scope
of additional services requested by the Company.

 

Standard Services

 

The following standard services will be provided at a rate of $*** per annum,
payable in advance on no less frequently than a quarterly basis, based on the
assumption that the Company and its Affiliates will be employing less than ***
corporate-office-based (non-property-based) employees.  There will be no
downward adjustment in such annual rate should the number of such employees be
reduced (including to zero) from the number as of the Effective Date.  Any
increase in staffing (beyond *** corporate

 

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[***] Confidential material redacted and filed separately with the Commission.

 

employees) or the addition of non-corporate employees will require a mutually
agreed increase in pricing.

 

·      Policies & Procedure Administration

 

·      Compensation/Payroll Administration

 

·      Benefits Activities/Services

 

·      Performance Management

 

·      Recruiting Services

 

·      Reporting Services

 

·      Hiring/Termination Services

 

·      Training/Employee Relations Administration

 

·      EEO-1 tracking/reporting

 

Refer to Exhibit B for additional details with respect to Human Resources
Standard Services to be provided under this Agreement.

 

In addition, the Service Provider will provide human resources services to
on-site property-based employees of the Service Provider and its Affiliates (at
properties owned by the Company and its Affiliates) and the Company shall pay
the Service Provider an amount equal to a rate of $*** per such employee per
year, payable no less frequently than on a quarterly basis and shall be
determined on a monthly basis, based on the number of such employees on the last
business day of each month, excluding contract personnel through the term of
this Agreement and (thereafter) until the termination of the Sixth Amended and
Restated Property Management Agreement dated as of August 31, 2012 (the
“Property Management Agreement”), by and among the Company, Behringer Harvard
Operating Partnership I and HPT Management Services LLC or the consummation of
the buyout option provided for therein. The preceding sentence and such services
and fee obligations shall survive any termination of the Human Resources
Services pursuant to this Agreement.

 

Non-Standard Services

 

Non-standard services will be provided based on the following hourly personnel
rates.

 

·      HR Vice President/Director/Department Head at $*** per hour

 

·      HR Generalist/Payroll Supervisor at $*** per hour

 

·      HR Staff/Associate at $*** hour

 

B-22

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[***] Confidential material redacted and filed separately with the Commission.

 

Non-standard services may include any of the following services, in addition to
any other non-standard services as may be mutually agreed to from time to time,
and will be billed as incurred but not less frequently than quarterly in
arrears:

 

·      EEOC Claims

 

·      Travel for HR services (i.e., terminations/on-site training/counseling)

 

·      Litigation/hearings

 

·      WARN Act / office closings

 

·      Reductions in Force (*** or more in a department or location)

 

·      Affirmative Action Plan coordination and implementation with third Person
vendor

 

·      Immigration coordination

 

·      360 Performance Evaluations

 

·      Leadership training

 

·      Wellness Initiatives

 

·      Employee relations initiatives beyond those considered standard

 

·      Audit response coordination

 

·      Implementation of new HRIS systems or other new benefit products

 

·      Transition of information and materials for service separation

 

·      Out of office meetings with counsel or other consultants

 

·      Attendance at industry HR/real estate conferences (requested/approved by
client) relevant to client needs

 

·      Updating database and training on system enhancements (ADP)

 

·      Onboarding more than *** employees in one calendar month

 

·      Attend ADP annual conference for continuing education on enhancements and
improvements

 

·      Off cycle or extra payroll runs (i.e. special 401(k) calculations,
deferred comp distributions, etc.)

 

B-23

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[***] Confidential material redacted and filed separately with the Commission.

 

SHAREHOLDER SERVICES

 

Standard Services

 

The following standard services will be provided at an annual rate of $*** per
shareholder account (the Company has approximately 67,000 shareholder accounts
as of the Effective Date), which shall in no event be less than $*** per year in
the aggregate, and shall be determined on a monthly basis based on the number of
shareholder accounts (not less than 67,000) as of the last day of each month for
which Shareholder Services are provided:

 

Account Maintenance & Ongoing Program Operations

 

·      Investor account maintenance

·      Stockholder mailing address changes

·      Stockholder distribution address changes (one-time and ongoing)

·      Supplemental (third-Person) address changes

 

·      Custodian changes

·      Investment transfers to new custodian

 

·      Distribution issues (standard, no more than monthly)

·      IRS withholding

·      Foreign withholding

·      Print/Mail investor checks and statements, custodian reports, financial
advisor reports

·      Escheatment

·      Adjustments to calculations required as a result of
redemptions/liquidations

·      Investor requests to change distribution type (check / ACH)

·      Investor request to change distributions — reinvest / cash

·      Resolve lost distribution check issues

·      Regular check void / reissues

·      Stale dated check void / reissues

 

·      Distribution issues (Special or more frequent than monthly)

·      Support calculation and payment of appropriate distributions

·      Regular, special (preferred return), return of capital, fractional
shares, etc.

·      IRS withholding

·      Foreign withholding

·      Print/Mail investor checks and statements, custodian reports, financial
advisor reports

·      Escheatment

·      Adjustments to calculations required as a result of
redemptions/liquidations

·      Investor requests to change distribution type (check / ACH)

·      Investor request to change distributions — reinvest / cash

 

B-24

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

 

·      Resolve lost distribution check issues

·      Regular check void / reissues

·      Stale dated check void / reissues

 

·      Transfers of ownership/Secondary market/Resales/Matching service

·      Verify documents are properly completed

·      Effect transfers of ownership in accordance with investor instructions

·      Secondary market/resale transactions

·      Matching service

 

·      Transfer Processing

 

·      Change in Beneficiary requests

 

·      Transfers on death

·      Review for receipt of appropriate documentation

·      Effect transfer of ownership in accordance with written instructions
received

 

·      Redemptions/Liquidations

 

·      Reconciliation and balancing

 

·      IRS tax identification number (annual process)

·      Receive correspondence from IRS

·      Send letters to investors to verify tax identification numbers

 

·      Lost shareholder searches

 

·      Return mail

·      Research return mail

·      Determine new addresses

·      Update database

·      Research and resolve returned distribution checks and statements

·      Research and resolve returned financial advisor distribution statements

·      Research and resolve returned custodian distribution statements

·      Research and resolve returned commission checks

·      Research and resolve returned mail for regulation mailings

 

·      Corporate action communications

·      Estimated valuations

·      Special distributions

·      Distribution rate changes

·      Redemptions

·      Other material events

 

B-25

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

 

·      Custodian issues/cleanup

·      Consolidation of firms under one name (e.g., Fiserv)

·      Ongoing changes to custodian

 

Shareholder Communication

 

·      Confirmations

·      Generate various confirmations

·      Changes

·      Transfers

 

·      DRP Participation Agreement Mailings

 

·      FINRA estimated valuations

 

·      ERISA estimated valuations

 

·      Board requests

·      Data for board books

·      Special Requests

·      Basic demographics/profile for investors

·      Historical data or trends based on client/rep

·      One-off requests from shareholders for special consideration

 

·      Tax reporting

·      1099s

·      Cost basis inquiries and changes

·      Creation print/mail

 

·      Correspondence (email and mail) from Investors

·      Handling of complaints (executive and regular)

·      Handling of escalated calls and letters

 

General Tasks

 

·      Printing/mailing of investor confirms and statements (monthly/quarterly)

 

·      File transmissions (inbound and outbound) to broker/dealer back offices
and custodians

 

·      Position reports/issues and other requests for custodians

 

·      Position reports/issues and other requests for broker/dealers

 

·      Position reports/issues and other requests for financial advisors

 

·      Manage document and record retention (using 3rd Person system billed
separately)

 

B-26

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

 

·      Maintain all investor, financial advisor and broker/dealer records

 

·      Oversight of process to Print / Mail of broker/dealer copies of investor
confirms and statements (3rd Person billed)

 

·      Manage forms, including:

·      ACH/Direct Deposit

·      Financial Advisor

·      Custodian Change

·      Transfers

·      Home Address/Distribution Address

·      Dividend Reinvestment Program (“DRP”)

·      DRP Participation Agreements

·      Redemptions

 

·      Document retention and retrieval

 

·      Housing of 1099s

 

·      Routine quality control checks using standard sampling

 

·      Respond to special requests

·      Reports

·      Validation of distribution options (such as special distribution
instructions or ongoing monitoring of drip to cash reports)

·      State of Sale for shares (ie. Blue Sky report)

 

·      Projects

·      Tax form updates/corrections — multiple-year amendments and delivery to
client/rep

 

·      Corrections for processing errors (such as a qualified account set up as
non-qualified in error)

·      Position reconciliation

·      Custodian special needs

 

·      Tender Offers statistics/research/reporting

 

·      Lawsuits research/reporting

 

·      Routine compliance — FINRA / SEC / Internal Controls Audit

 

Shareholder “touchpoints”

 

·      Inbound and Outbound call center

·      7am – 6pm Central Time (business days)

 

B-27

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[***] Confidential material redacted and filed separately with the Commission.

 

·      Investor/Shareholder inquires

·      Research and respond to inquiries

·      Correspondence

 

·      Investor, Attorney, Financial Advisor and Broker/Dealer Correspondence
(except those associated with events such as listing, Change of Control
transactions, or others of significance)

·      Estimated value letters

·      Position confirmation requests

·      Control number confirmation requests

·      Response letters

·      Complaint letters

·      Position requests

 

·      Assisting the Company employees in development of scripts for call center
dissemination

 

·      Legal issues involving individual requests that tie to one account that
require no more than minor research and do not require copying of most account
documents and history (that the Service Provider has access to) and do not
require DST, State Street or any other third party to pull information. To add
clarity on standard service legal issues: for a service to be standard, the
Service Provider would be able to “straight-through” process an item after a
review by the Company’s legal department (consistent with past practice with
respect to similar items reviewed by the Service Provider’s shareholder services
function).

 

Non-Standard Services

 

Non-standard services may include any of the following services, in addition to
any other non-standard services as may be mutually agreed to from time to time,
and will be provided based on an aggregate department hourly personnel rate of
$***. Non-standard services will be billed as incurred but not less frequently
than quarterly in arrears.

 

Shareholder Communication

 

·      Regulatory mailings

·      8-Ks

·      Supplements

·      New York letters

·      Post-Effective Amendments

·      S-3s (information for REITs)

·      Label — for mailings

 

General Tasks

 

·      Proxies

·      Manage vendors

 

B-28

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

 

·      Provide alternatives or augmentation for solicitation

·      Verify record date shares

·      Return mail

·      Field questions on processes and other informational requests

·      Attest to results and report to Boards

 

·      Oversight and/or implementation of Imaging system

·      Workflow changes

·      Image retention per new legal instructions (WORM)

 

·      MIS (reporting of process, backlogs, system downtime, etc.)

 

Shareholder “touchpoints”

 

·      Investor, attorney, financial advisor and broker/dealer correspondence
(associated with events such as listing, Change of Control transactions, or
others of significance)

·      Estimated value letters

·      Position confirmation requests

·      Control number confirmation requests

·      Response letters

·      Complaint letters

·      Position requests

 

·      Legal issues to the extent not included in standard services.

 

·      Regulatory inquiries

·      Research and respond to inquiries

 

Extraordinary Events Not Yet Contemplated (non-exclusive)

 

·      Listing event

·      Change of Control

·      Sale of multiple assets simultaneously or entire portfolio

·      Transition of information and materials for service separation

 

INFORMATION TECHNOLOGY

 

Standard Services

 

Standard services will be provided based on the following cost per employee of
the Company and its Subsidiaries and per employee of the Service Provider and
its Affiliates performing on-site property management services per year, payable
one-fourth each quarter in arrears (prorated for employee start and termination
dates).

 

B-29

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

 

[***] Confidential material redacted and filed separately with the Commission.

 

Headquarters Personnel:

 

·

Executive, Asset Management, Legal and other non-Fund Accounting and Real Estate
Accounting department personnel

 

$

***

 

 

 

 

 

 

·

Fund Accounting, Real Estate Accounting department personnel

 

$

***

 

 

Non-Headquarters Personnel:

 

·

Personnel at other corporate offices

 

$

***

 

 

 

 

 

 

·

On-site property management personnel

 

$

***

 

 

 

 

 

 

·

ABM/Contractors

 

$

***

 

 

 

 

 

 

·

Work order only

 

$

***

 

 

With respect to Headquarters Personnel, pricing with respect to each additional
employee shall be adjusted such that, if the number of employees (inclusive of
the employee being hired) is less than or equal to ***, the cost for such
additional employee shall be ***% of the amount set forth above, if the number
of employees is greater than *** and less than or equal to ***, the cost for
such additional employee shall be ***% of the amount set forth above and, if the
number of employees is greater than ***, the cost for such additional employee
shall be equal to the weighted average of cost of the number of employees in the
designated category that make up the first *** employees.

 

Note that pricing may change, by the mutual consent of the Company and the
Service Provider if the Company requests a substantive change in the scope of
standard services.

 

·      Standard services are to be provided at the Service Provider’s US
corporate headquarters or the Company’s Corporate Offices only and will include
the following:

 

·      Access to, and support of, the Service Provider’s phone system and
equipment that support the Company’s needs for local phone service, domestic
long distance phone service and international long distance.

 

·      Access to, and support of, the Service Provider’s Internet connectivity
for use by the Company

 

·      Server room services, including maintenance of hardware

 

·      Hosting, implementation, maintenance, support and implementation of
routine updates requested by the Company to the uniform resource locator (URL)
of http://www.behringerharvard.com/Behringer_Harvard_REIT_I_Inc/ (the “Website”)
and any other URLs that are necessary for the operation of the Website,
consistent with past practice and consistent with the Service Provider’s

 

B-30

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[***] Confidential material redacted and filed separately with the Commission.

 

operation of the domain name “behringerharvard.com” (the “Domain Name”) and the
other URLs contained thereon

 

·      Routine technology purchasing/requisition services

 

·      Help desk support

·      On-site at the Company’s Bent Tree location 9am — 4pm Central Time
(business days)

 

·      Server administration

 

·      Network administration

 

·      Manage desktop software licenses, as long as the Service Provider’s
designated desktop suite is used (which may change from time to time as the
Service Provider directs in its sole discretion).  For illustration, the
following is a list of items typically included in a desktop suite:

·      Windows desktop (various versions)

·      Office Standard (Word, Excel, PowerPoint, Outlook)

·      Various client access licenses (CAL’s) for example

·      Exchange email

·      MS SQL Server

·      SharePoint

·      Miscellaneous utilities for things such as antivirus or configuration
management

 

·      Support of mobile devices for e-mail consistent with the Service
Provider’s policies (which may change from time to time as the Service Provider
directs in its sole discretion). Note that this may require the user to
(i) permit administrator management software to run on the device to allow the
Service Provider to, among other things, impose policy, remote wipe and restrict
applications that may otherwise interfere with the Service Provider’s
policies, etc., and (ii) agree to adhere to the Company’s cell phone policy,
which shall be substantially similar to the Service Provider’s policy,
appropriate use policy, and code of conduct.

 

Refer to Exhibits C and D for additional details regarding Infrastructure and
CRE Application services. These schedules may be modified from time to time with
a change in pricing by mutual agreement of the Company and the Service Provider.

 

Non-Standard Services

 

Non-standard services will be provided at the following aggregate departmental
hourly personnel rates.

 

·      IT Application services at $*** per hour

 

·      IT Infrastructure services at $*** per hour

 

B-31

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

 

Non-standard services may include any of the following services, in addition to
any other non-standard services as may be mutually agreed to from time to time,
and will be billed as incurred but not less frequently than quarterly in
arrears:

 

·      Deviation from the Service Provider’s standard desktop suite

 

·      Review, approval and implementation of any non-standard services and
technologies due to the shared infrastructure employed by the Service Provider,
including:

·      Hardware

·      Software

·      Third Person services

·      Consulting fees (both internal and external)

·      Other costs required to put the service/functionality in place, which may
also require an ongoing support and maintenance fee

 

·      Website services

·      Including implementation of customer facing websites

·      Creation of a web site for the Company which will incorporate basic
functionality to be agreed upon

·      Implementation of extensive functionality, e.g. investor portals, advisor
portals, multilingual support, etc.

 

·      Employee facing web sites or intranet utilizing SharePoint, or another
tool, as its website creation and content management tool

 

·      Services provided to locations other than existing locations of the
Corporate Offices may be considered non-standard and billed accordingly

 

·      Remote and HQ offices setup, relocation, remote decommissioning or
divesting from the Service Provider

 

·      Significant upgrades in hardware or software

 

·      Services relating to separation from the Service Provider, which includes
but may not be limited to isolating standard service(s), transferring web site
management to another servicer, separating operations into a standalone network
and migrating data from the Service Provider environment to some other
environment

 

·      Service initiation work (connectivity, phone service, separate
database/ASP work)

 

·      Software/hardware research, including work with consultants to determine
appropriate software or hardware selection for specific business activities or
implementation of such software/hardware

 

B-32

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

 

[***] Confidential material redacted and filed separately with the Commission.

 

INTERNAL AUDIT

 

Internal audit services will be provided based on the following hourly
department personnel rates.

 

·      Vice President/Director/Department Head at $*** per hour

 

·      Staff Auditor at $*** per hour

 

Internal audit services will include the following services and will be billed
as incurred but not less frequently than quarterly in arrears:

 

·      Review and evaluate the effectiveness of the existing systems of internal
controls

 

·      Review and evaluate operational effectiveness and efficiency

 

·      Review and evaluate the reliability of controls over financial reporting

 

·      Verify compliance with applicable laws and regulations

 

·      Review and evaluate the Company’s processes for assessing and managing
business risk

 

·      Provide audit coverage for areas deemed appropriate as identified through
a risk assessment process in conjunction with the judgment of management and the
audit committee of the Board

 

·      Provide written audit reports and other communications to senior
management of the Company and to the audit committee of the Board

 

REAL ESTATE TRANSACTIONAL SUPPORT

 

Real estate transactional support services will be provided for a non-refundable
annual retainer of $*** for the first twelve months of the Administrative
Services Agreement and $*** for each subsequent twelve month period against
which the Service Provider will credit the Company for costs as incurred for its
services based on the following hourly department personnel rates. Retainer
amounts shall be payable on a quarterly basis in advance, with one-quarter of
the annual retainer amount being payable on the first day of the quarter, be
non-refundable and may be applied to any services billed during any subsequent
quarter occurring during the 12- month period for which the retainer is paid. 
Services will be billed as incurred but not less frequently than quarterly in
arrears.

 

·      Vice President/Director/Department Head at $*** per hour

 

·      Project Coordinator at $*** per hour

 

B-33

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

 

[***] Confidential material redacted and filed separately with the Commission.

 

The Service Provider’s Real Estate Transactional Support personnel will provide
transactional support services to the Company in connection with an acquisition,
disposition or financing of the Company’s assets (including, without limitation,
due diligence services and other activities that support real estate-related
investment-level transactions such as the contracting and review of third Person
structural and environmental reports, review of targeted acquisition historical
budget and financial data, historical utility information, retrieval and review
of zoning and use data and review of leases and third Person contracts), the
scope of which will be mutually agreed by the Company and the Service Provider
at the time.

 

INFORMATION MANAGEMENT

 

At the Company’s request, the Service Provider’s Information Management
department may assist in the transition of information to the Company based on
an aggregate hourly department personnel rate of $*** per hour. Services will be
billed as incurred but not less frequently than quarterly.

 

RISK MANAGEMENT

 

To the extent agreed to by the Company and the Service Provider in advance, the
Service Provider’s Risk Management department may assist in the performance of
risk management services based on an aggregate hourly department personnel rate
of $*** per hour. Services will be billed as incurred but not less frequently
than quarterly.  For the avoidance of doubt, the Company shall not incur any
Service Charges for Risk Management Services delivered by the Service Provider
to the Company pursuant to Section 3.4, Article VI and Section 8.20 of the
Property Management Agreement.

 

MARKETING

 

At the Company’s request, the Service Provider’s Marketing department may
provide services to the Company either directly as requested, or in support of
certain initiatives previously approved by the Company that are undertaken by
other Service Provider departments such as Human Resources and Information
Technology, based on the following hourly department personnel rates. Services
will be billed as incurred but not less frequently than quarterly in arrears.

 

·      General marketing services at $*** per hour

 

·      Creative marketing services at $*** per hour

 

·      Conference and Events services at $*** per hour

 

·      Training services at $*** per hour

 

B-34

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[***] Confidential material redacted and filed separately with the Commission.

 

CASH MANAGEMENT

 

At the Company’s request, the Service Provider’s Cash Management department may
assist in the performance of cash management services based on an aggregate
hourly department personnel rate of $*** per hour. Services will be billed as
incurred but not less frequently than quarterly.

 

B-35

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

 

EXHIBIT A — HUMAN RESOURCES IMPLEMENTATION SERVICES

 

Employee Onboarding

 

Policy/Document
Development & Branding

 

Benefits Implementation

 

Systems (HRIS) –
EzLabor, HRB, Payex

 

Other

Term from HPT and file closure process (draft and distribute notice/term letters
to all employees and prepare internal term paperwork)

 

Company Policies (drafting/rebranding)

 

Broker discussions and evaluation of benefits

 

ADP — (Company set up, Data Transfer/upload, state tax registration) (1. Create
all business unit, department, location, class within HRB & PayEx. 2. Add all
custom fields that will appear in HRB and set-up auto flow into PayEx when
necessary. 3. Define all Time Off policies and create them within the portal and
set-up flow into EZLabor Manager system. 4. Detailed benefit/billing and create
all plans within the portal (including all side bar content and related forms)
5. Enter all job titles and associated pay structure in HRB & PayEx. 6. Create
e-Access profiles for all life events within HRB. 7. Customize manager and
employee access within HRB. 8. Customize the Portal home page. 9. Enter
employees and establish manager relationships in HRB & PayEx.

 

AAP development

Offer letters/JD’s (JD’s will need to be reviewed and approved by the Company).

 

Drug Free Workplace

 

Training and enrollment

 

Build Connection files with benefit providers

 

Applicant Tracking System (Balancetrak)

Background checks (coordination of distribution, submission, data review)

 

Anti-Harassment

 

Certificate of Prior Insurance

 

Test all systems for data audit

 

Recruiting sites (Monster, etc.)

Benefits Enrollment

 

Code of Business Conduct

 

Medical/Dental/Vision

 

Applicant Tracking (see Other)

 

Sharepoint

New personnel files and benefit files (file space)

 

Confidentiality Policy

 

Basic and Voluntary Life

 

Weekly calls with ADP implementation team

 

Banking set-up (Payroll)

OFAC, Credit Check, e-verify (if necessary)

 

Handbook

 

401(k)/Profit Sharing (Loans, Distributions)

 

Research state requirements (payroll, overtime, etc.)

 

Labor Law/Workers’ Comp postings

 

B-36

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

 

Employee Onboarding

 

Policy/Document
Development & Branding

 

Benefits Implementation

 

Systems (HRIS) –
EzLabor, HRB, Payex

 

Other

 

 

Education Assistance/Professional Development

 

STD/LTD

 

Set up custom management Reports

 

Termination documents from advisor

 

 

Employee Referral Bonus

 

Long Term Care

 

Timesheet implementation — set up payroll and holiday schedule

 

 

 

 

 

 

Cafeteria Plan and Flex Plans (address unused FSA matter)

 

 

 

 

 

 

 

 

Section 529 College Savings Plan

 

 

 

 

 

 

 

 

Financial Planning

 

 

 

 

 

 

 

 

COBRA Administration (Conexis)

 

 

 

 

 

 

 

 

Workers’ Compensation

 

 

 

 

 

 

 

 

State disability (if applicable)

 

 

 

 

 

 

 

 

Unemployment

 

 

 

 

 

 

 

 

AAP — engagement of administrator and program implementation

 

 

 

 

 

B-37

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

 

EXHIBIT B — HUMAN RESOURCES STANDARD SERVICES

 

Policies &
Procedure
Administration

 

Compensation/
Payroll

 

Benefits

 

Performance
Management

 

Recruiting

 

Reporting

 

Hiring/
Terminations

 

Training/
Employee
Relations

Employee Handbook, Code of Conduct, etc. Education Assistance Policy

 

Maintain semi-monthly payroll

 

Assistance with insurance questions and support

 

Employee counseling statements

 

Manage staffing vendor relations

 

Surveys

 

Offer Letters

 

Annual Open Enrollment Meetings (Health, Retirement) (Via Webinar — Property
travel considered non-standard)

Maintenance and storage of personnel files, term files, benefits files, etc.

 

Maintain HR/Benefits Solutions

 

Administration and Coordination of Leave policies (FMLA, STD/LTD, Personal)

 

Annual Performance review process

 

Maintenance of applicant tracking system

 

Census

 

Job Descriptions

 

Harassment/ Diversity

 

 

Maintain Time and Labor Management

 

COBRA administration

 

Employee counseling

 

 

 

Organizational Charts

 

New Hire Orientation

 

Time entry and approval for non-exempts and managers

 

 

Employee verifications

 

Medical/Dental/ Vision

 

Professional Development

 

 

 

Allocation Reports

 

Reductions in Force

 

 

 

 

Loans/ Garnishments/ Child Support

 

Basic and Voluntary Life

 

 

 

 

 

EEO-1 reports

 

Fee based on hiring of 1-5 employees per calendar month (additional onboarding
is considered non-standard)

 

 

 

 

Special management reports/audit reports

 

Retirement Program

 

 

 

 

 

 

 

 

 

 

 

B-38

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

 

Policies &
Procedure
Administration

 

Compensation/
Payroll

 

Benefits

 

Performance
Management

 

Recruiting

 

Reporting

 

Hiring/
Terminations

 

Training/
Employee
Relations

 

 

Manual checks (when needed)

 

529 Plans

 

 

 

 

 

 

 

 

 

 

 

 

Enter new hire data, audit same

 

Flex Plans

 

 

 

 

 

 

 

 

 

 

 

 

Termination — final payouts

 

EAP

 

 

 

 

 

 

 

 

 

 

 

 

Direct deposit/tax changes

 

Annual Benefit review and coordination of annual package with broker

 

 

 

 

 

 

 

 

 

 

 

 

Misc. earnings: commissions/ incentives, bonus, etc.)

 

Unemployment/ workers’ comp

 

 

 

 

 

 

 

 

 

 

 

 

Audit information flow from HRB to payex

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Enter special salary allocations

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Time sheet audit approval (each pay period)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Monthly reporting to DOL

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarterly review of ADP reports, check states, SUI rates, verify that wage & tax
register agrees

 

 

 

 

 

 

 

 

 

 

 

 

 

B-39

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Policies &
Procedure
Administration

 

Compensation/
Payroll

 

Benefits

 

Performance
Management

 

Recruiting

 

Reporting

 

Hiring/
Terminations

 

Training/
Employee
Relations

 

 

Prepare and upload ADP reports for 401(k)/529 Plan/ Deferred Comp/ Commuter
Benefit; input information into vendor template and upload

 

 

 

 

 

 

 

 

 

 

 

 

 

 

401(k) YTD reporting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Annual audits: W2, salary increases, update new STD/LTD amounts, calculate
retroactive pay, workers’ compensation

 

 

 

 

 

 

 

 

 

 

 

 

 

B-40

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EXHIBIT C — STANDARD INFRASTRUCURE SERVICES

 

Service Offering

 

Application/Function

 

Description

Application Hosting, Virtualization, SAN Storage, and Server Hosting

 

Server Hosting

 

Support server hardware, perform system backups (file, SQL, or Exchange),
monitor server health and availability, and provide server virus protection.
Includes patch management for critical operating system security patches.

Application Hosting, Virtualization, SAN Storage, and Server Hosting

 

Storage management

 

Monitor storage usage on servers/SAN and make recommendations for upgrades.
Perform upgrades as needed.

Application Hosting, Virtualization, SAN Storage, and Server Hosting

 

Exchange Email

 

Support Exchange environment including platform management and troubleshooting
end-user issues with performance, security, and reporting.

Application Hosting, Virtualization, SAN Storage, and Server Hosting

 

File Services

 

File Services support includes security administration, restoration of recently
deleted files through the Undelete recycle bin, and troubleshooting locked
files. Provide security reporting as needed.

Application Hosting, Virtualization, SAN Storage, and Server Hosting

 

Back End Database

 

Backup, monitor, and maintain SQL servers and associated data for in house
database applications such as FAS.

Application Hosting, Virtualization, SAN Storage, and Server Hosting

 

Print Services

 

Maintain print servers and manage printer queues.

Application Hosting, Virtualization, SAN Storage, and Server Hosting

 

SharePoint (WSS and MOSS)

 

SharePoint (WSS and MOSS) environments. Maintain and support environments.

Asset Management, Access Control, and Desktop Support

 

Purchasing & Asset Inventory

 

Enter hardware and software purchases into system inventory system and maintain
standard reports that can be run by the Service Provider or the Company. Perform
reconciliations with purchases as needed. Maintain hardware inventory and assign
software licenses to workstations to maintain compliance. Manage equipment
lifecycle. Invoicing to appropriate entities.

Asset Management, Access Control, and Desktop Support

 

IT Equipment Relocation

 

Coordination and management of moving office IT equipment either internally or
externally to new location within the Service Provider’s Addison office or the
Company’s Bent Tree office.

Asset Management, Access Control, and Desktop Support

 

Antivirus - Desktop

 

Desktop Antivirus/AntiSpyware solution.

 

B-41

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Service Offering

 

Application/Function

 

Description

Asset Management, Access Control, and Desktop Support

 

Mobile Device Management & Support

 

Monitor, backup, and maintain BES server, support for iPhone, iPad, Android
platforms

Asset Management, Access Control, and Desktop Support

 

Technical Support

 

Take calls and provide support for desktop hardware in covered offices, also
provide support for laptop users. Includes support for scanners and printers.
Take calls and provide support for desktop software. Desktop software includes
items which do not depend on server software, examples are Microsoft Word and
Adobe Acrobat.

Asset Management, Access Control, and Desktop Support

 

Help Desk Administration

 

Management and triage of help desk tickets and dispatch to appropriate technical
staff. Provide first point of communication between end users and IT. Provide
reports on tickets upon request.

Asset Management, Access Control, and Desktop Support

 

Conference room management

 

Configuration and management of conference room IT equipment including computer
screen projection, audio / video, and presentation assistance during meetings.

Asset Management, Access Control, and Desktop Support

 

User Provisioning

 

Provision user accounts within Service Provider authentication systems. Create
new accounts, change existing accounts, and terminate as needed.

Custom Application Support

 

Web (IIS) services

 

Maintain and create sites and applications hosted on IIS. Manage and maintain
Web servers.

FTP and Secure File Transfer

 

Secure File Transfer Services

 

Provide file transfer services that allows users to email secure links to files.

Infrastructure Management, WAN Acceleration, Routers, Switches, Firewalls

 

Firewall Services

 

Manage and maintain firewall policies, hardware/software maintenance, Intrusion
Detection, and inline antivirus scanning of all firewall traffic.

Infrastructure Management, WAN Acceleration, Routers, Switches, Firewalls

 

Internet Circuit Management

 

Monitor and maintain internet circuit connectivity to Company covered office
locations. Offering does not include the cost of the actual circuits. Monitor
contracts and negotiate better terms on behalf of its managed properties when
available.

Infrastructure Management, WAN Acceleration, Routers, Switches, Firewalls

 

Network Hardware Maintenance

 

Monitor, backup, and manage network appliances allowing regional offices access
to corporate resources. Monitor covered office network infrastructure, managed
services and other customer requested services 24x7. Monitor network traffic
types on covered offices for trending purposes and forensic investigation as
needed.

Infrastructure Management, WAN Acceleration, Routers, Switches, Firewalls

 

Domain Name Services

 

Perform adds and changes to DNS records for properties. Manage and maintain DNS
database to include adds/changes.

Infrastructure Management, WAN Acceleration, Routers, Switches, Firewalls

 

Security Event Management

 

Monitor privileged accounts, devices, servers, and groups in Active Directory
for changes and lockouts. Log events for historical reporting and send
notifications if desired.

Infrastructure Management, WAN Acceleration, Routers, Switches, Firewalls

 

Voice Services

 

Configuration and management of Voice over IP systems to provide internal and
sometimes inter-office phone services. Includes moves, adds, and changes. This
is limited to BH or the Company’s Corporate HQ locations.

 

B-42

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Service Offering

 

Application/Function

 

Description

IP Management, DNS, VPN, Active Directory

 

Active Directory

 

Backup, management, logging, and support of Active Directory.

IP Management, DNS, VPN, Active Directory

 

VPN Services

 

Monitor, backup, and manage network appliances allowing regional offices access
to corporate resources. Manage remote access to Corporate resources via Cisco
VPN client or AD integrated SSL VPN appliance.

IP Management, DNS, VPN, Active Directory

 

Private IP Address Management

 

Manage and maintain Private IP address database to include assignment of static
IP addresses.

Web Filtering, Intrusion Detection, Antivirus, Spyware, Etc.

 

Desktop Windows Updates

 

Managed Windows Updates deployment service that automatically deploys Windows
updates to all workstations. Regularly review, test, and deploy new security
updates to these systems.

 

B-43

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EXHIBIT D — STANDARD CRE APPLICATIONS AND SERVICES

 

Service Offering

 

Application/Function

 

Description

Software Licensing/Vendor Support

 

MRI

 

Day-to-day BH Support Services including how-to and break/fix.

Software Licensing/Vendor Support

 

Request

 

Day-to-day BH Support Services including how-to and break/fix.

Software Licensing/Vendor Support

 

Reporting Services

 

Day-to-day BH Support Services including how-to and break/fix.

Software Licensing/Vendor Support

 

Watchdog Pro

 

Day-to-day BH Support Services including how-to and break/fix.

Software Licensing/Vendor Support

 

Workspeed

 

Day-to-day BH Support Services including how-to and break/fix.

Software Licensing/Vendor Support

 

FAS (Fixed Asset System)

 

Day-to-day BH Support Services including how-to and break/fix.

Software Licensing/Vendor Support

 

Argus Software

 

Day-to-day BH Support Services including how-to and break/fix.

Software Licensing/Vendor Support

 

Argus DCF Utility

 

Day-to-day BH Support Services including how-to and break/fix.

Software Licensing/Vendor Support

 

Kardin Budgeting Software

 

Day-to-day BH Support Services including how-to and break/fix.

Software Licensing/Vendor Support

 

Realogic Tools for Excel

 

Day-to-day BH Support Services including how-to and break/fix.

Application Management & Administration

 

BHMRI

 

Day-to-day BH Support Services including how-to and break/fix.

Application Management & Administration

 

Reporting Services

 

Day-to-day BH Support Services including how-to and break/fix.

Application Management & Administration

 

Workspeed BH Support

 

Day-to-day BH Support Services including how-to and break/fix.

Application Management & Administration

 

FAS BH Support Services

 

Day-to-day BH Support Services including how-to and break/fix.

Application Management & Administration

 

Request BH Support Services

 

Day-to-day BH Support Services including how-to and break/fix.

 

B-44

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Service Offering

 

Application/Function

 

Description

Application Management & Administration

 

Quarterly Supplemental Package

 

Day-to-day BH Support Services including how-to and break/fix.

Application Management & Administration

 

Quarterly Watchdog Process

 

Vendor, tenants, and employee quarterly searches (Could be self-sufficient
through Reporting Services)

Application Management & Administration

 

CRE App Audit Services

 

MRI, Workspeed, FAS semi-annual user audits

Application Management & Administration

 

CRE App Audit Services

 

Internal Auditor Reviews (controls, change management, etc.)

Application Management & Administration

 

CRE App Audit Services

 

D&T Auditor Reviews (controls, change management, and trial balance query)

Web Site Services

 

Web Site Management

 

Company Web Site routine maintenance

 

B-45

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ANNEX B

 

INFORMATION SECURITY ADDENDUM

 

1.             Personal Information.  The parties acknowledge that in performing
its obligations hereunder, the Service Provider may obtain or have access to, or
otherwise store, process or transmit, certain personally identifiable
information of the Company, its employees, other personnel, agents, officers,
directors, contractors, customers, potential and prospective customers,
suppliers, and/or other persons, which information may include without
limitation name, address, other contact information, financial account
information, health or medical information, insurance information, social
security number, tax ID number, driver’s license or non-driver identification
card number, passport information, government ID number, tribal ID number,
mother’s maiden name, date of birth, password, PIN number, access code, routing
code, security code, biometrics, DNA profile information, electronic signature
or serial number, employee ID number, payroll records, salary information or
other human resources records and information, “protected health information” as
defined by the Health Insurance Portability and Accountability Act, consumer
report information, alien registration number or naturalization number, personal
identification number or code, other account information and/or account activity
information, other information or data that can be used for identity theft
(including that which is not personally identifiable) and other sensitive
information regarding such persons (collectively, “Personal Information”). 
Notwithstanding anything to the contrary, all Personal Information is and shall
remain the sole and exclusive property of the Company, and shall be deemed the
Company’s Confidential Information regardless of whether it is marked as such. 
Additionally, any account passwords issued to the Service Provider or its agents
for purposes of accessing the Company’s systems shall be protected as if they
were Personal Information for all purposes.

 

2.             Applicable Privacy and Data Security Laws.  For purposes of this
Information Security Schedule, “Applicable Privacy and Data Security Laws” shall
mean: (a) all privacy, security, data protection, direct marketing, consumer
protection and workplace privacy laws, rules and regulations of any applicable
jurisdiction (including, without limitation, the U.S., each state of the U.S.),
and (b) the applicable data security and privacy policies of the Service
Provider.

 

3.             Limited Use.  The Service Provider agrees that (a) at all times
during the term of this Agreement and thereafter, it will comply with all
Applicable Privacy and Data Security Laws in relation to Personal Information,
(b) Personal Information will not be utilized by the Service Provider, its
contractors or agents for any purpose other than for the purpose of rendering
the Services to the Company under the Agreement (and not, for example and
without limitation, to otherwise market to or contact such individuals) and
shall be accessible by the Service Provider’s personnel on a need-to-know basis
only, and (c) the Service Provider shall treat all Personal Information as
Confidential Information subject to the Service Provider’s other obligations
pursuant to the Agreement.  The Service Provider shall not collect any Personal
Information from or about individuals except that which is actively and
knowingly provided by such individuals or provided by the Company to the Service
Provider.

 

4.             Notification of Security Breach and Incident Response.  Without
limitation of the foregoing, the Service Provider shall advise the Company
promptly in the event that it learns or

 

B-46

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that there has been unauthorized access to or use of, or any security breach
relating to or affecting, Personal Information, or that any person who has had
access to Personal Information has violated or intends to violate the terms of
this Agreement.

 

5.             Disposal.  As soon as possible after any Personal Information (or
a portion thereof) is no longer needed by the Service Provider to fulfill its
obligations hereunder, and in any event upon termination of this Agreement for
any reason: such Personal Information in the Service Provider’s or its agent’s
or contractor’s possession or control shall be returned to the Company or
destroyed pursuant to and to the extent required by Section 5.03 of this
Agreement.

 

B-47

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EXHIBIT C

 

FORM OF PROPERTY MANAGEMENT AGREEMENT

 

See attached.

 

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

 

FORM OF

SIXTH AMENDED AND RESTATED
PROPERTY MANAGEMENT AGREEMENT

 

This SIXTH AMENDED AND RESTATED PROPERTY MANAGEMENT AGREEMENT (this “Management
Agreement”) is made and entered into as of this 31st day of August, 2012, by and
among BEHRINGER HARVARD REIT I, INC., a Maryland corporation (“BH REIT”),
BEHRINGER HARVARD OPERATING PARTNERSHIP I LP, a Texas limited partnership
(“BH OP”), and HPT MANAGEMENT SERVICES LLC, a Texas limited liability company
(the “Manager”).

 

WHEREAS, BH OP was organized to acquire, own, operate, lease and manage real
estate properties on behalf of BH REIT; and

 

WHEREAS, BH OP and BH REIT and Manager previously entered into that certain
Property Management and Leasing Agreement dated February 14, 2003, as amended
and restated by the Amended and Restated Property Management and Leasing
Agreement dated June 2, 2003, the Second Amended and Restated Property
Management and Leasing Agreement dated February 11, 2005, the Third Amended and
Restated Property Management and Leasing Agreement dated March 20, 2006, the
Fourth Amended and Restated Property Management and Leasing Agreement dated
December 29, 2006, and the Fifth Amended and Restated Property Management and
Leasing Agreement, dated May 15, 2008, as amended by the First Amendment dated
June 25, 2008, the Second Amendment dated August 13, 2008, the Third Amendment
dated November 9, 2010, and the Fourth Amendment dated February 20, 2012
(collectively, the “Original Management Agreement”); and

 

WHEREAS, Owner desires to continue retaining Manager to manage real estate
properties acquired by Owner upon the terms and subject to the conditions set
forth in this Management Agreement; and

 

WHEREAS, the Board of Directors of BH REIT (based upon the recommendation of the
BH REIT Special Committee), BH OP and Manager have each approved and declared
advisable, this Management Agreement; and

 

WHEREAS, upon the terms and subject to the conditions of this Management
Agreement, Manager desires to grant BH REIT the option and BH REIT desires the
option to undertake the property management functions of Manager as contemplated
by Article IX; and

 

WHEREAS, the Board of Directors of BH REIT (based upon the recommendation of the
BH REIT Special Committee) has determined that this Management Agreement,
including the Buyout Option (as defined below), is in furtherance of and
consistent with its business strategy, is fair and reasonable to BH REIT, and is
in the best interests of its stockholders; and

 

WHEREAS, concurrent with the entry into this Sixth Amended and Restated Property
Management Agreement, BH REIT, Manager, Behringer Harvard REIT I Services
Holdings, LLC, and Behringer Advisors, LLC are entering into that certain Master
Modification Agreement and certain related agreements;

 

C-1

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WHEREAS, the Board of Directors of BH REIT (based upon the recommendation of the
BH REIT Special Committee), including a majority of members of the Board of
Directors of BH REIT not otherwise interested in the transactions contemplated
hereby directly or through an Affiliate (as defined in the BH REIT Charter), has
determined that any assets acquired by BH REIT from Manager pursuant to this
Management Agreement are at a price to BH REIT no greater than the cost, to
Manager, of the assets being acquired, or at a price to BH REIT in excess of the
cost, to Manager, of the assets being acquired pursuant to this Management
Agreement, but substantial justification for such excess exists and such excess
is reasonable; and

 

WHEREAS, the parties desire to amend and restate in its entirety the Original
Management Agreement as set forth herein.

 

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, do hereby agree, as
follows:

 

ARTICLE I.
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 Management Agreement, and the definitions of such terms are equally
applicable both to the singular and plural forms thereof:

 

1.1                                 “Account” has the meaning set forth in
Section 2.5.

 

1.2                                 “Adjustment Date” has the meaning set forth
in Section 9.5(a).

 

1.3                                 “Administrative Services Agreement” means
that certain Administrative Services Agreement, dated as of August 31, 2012, by
and between BH REIT and Behringer Advisors, LLC, as amended, supplemented or
otherwise modified from time to time.

 

1.4                                 “Affiliate” means, except as otherwise
provided herein, with respect to any Person, any other Person which, at the time
of determination, directly or indirectly controls, is controlled by or is under
common control with, such Person. For the purposes of this definition, “control”
(including, with correlative meaning, the terms “controlling,” “controlled by”
and “under common control with”) means the possession, directly or indirectly,
of the power to direct or cause the direction of management and policies of such
Person through the ownership of voting securities, by contract or otherwise. For
the avoidance of doubt, BH REIT, BH OP, and their respective Affiliates shall
not be considered Affiliates of Manager or any Affiliates of Manager, and vice
versa.

 

1.5                                 “Agreement” means any loan agreement,
mortgage, indenture, deed of trust, lease, sublease, contract, covenant, plan,
insurance policy or other agreement, instrument, arrangement, obligation,
understanding or commitment, permit, concession, franchise or license, whether
oral or written, expressed or implied.

 

1.6                                 “Annual Budget” has the meaning set forth in
Section 2.6(c).

 

C-2

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1.7                                 “Behringer Group” means, collectively,
(i) Manager, (ii), Behringer Harvard REIT I Services Holdings, LLC,
(iii) Behringer Advisors, LLC, (iv) Behringer Harvard Holdings, LLC, and (v) all
of their respective Affiliates. For the avoidance of doubt, BH REIT, BH OP, and
their respective Affiliates shall not be considered members of the Behringer
Group.

 

1.8                                 “Behringer Plans” means, collectively, each
plan, program, policy or Agreement providing for compensation, bonuses, pension,
retirement, profit sharing, health, dental, vision, life, disability, severance,
termination pay, performance awards, equity or “profits interests” awards,
fringe benefits or other employee benefits of any kind, if any, including any
“employee benefit plan” within the meaning of Section 3(3) of ERISA, which is
sponsored, maintained, or contributed to by any member of the Behringer Group in
which any Manager Specified Employee participates.

 

1.9                                 “BH OP” has the meaning set forth in the
Preamble.

 

1.10                           “BH REIT” has the meaning set forth in the
Preamble.

 

1.11                           “BH REIT Plans” has the meaning set forth in
Section 9.6(e)(i).

 

1.12                           “Business Day” means any day other than a
Saturday or a Sunday or a day on which banks located in Dallas, Texas generally
are authorized or required by Law or regulation to close.

 

1.13                           “Buyout” means, collectively, the waiver of
certain non-solicitation and non-hire provisions and the other transactions
contemplated by Article IX.

 

1.14                           “Buyout Closing” has the meaning set forth in
Section 9.3(a).

 

1.15                           “Buyout Closing Date” has the meaning set forth
in Section 9.3(a).

 

1.16                           “Buyout Consideration” means 0.8 times the gross
amount of all Management Fees and Oversight Fees earned by Manager under this
Management Agreement for the trailing consecutive 12-month period ending with
the last full month prior to the delivery of the Buyout Notice; provided,
however, that if (i) the Buyout Notice Date occurs during the one-year period
prior to the Existing Expiration Date, and (ii) Remaining Amount is less than
the Buyout Consideration payable (but for the effect of this proviso), then the
Buyout Consideration means the Remaining Amount.

 

1.17                           “Buyout Consideration Schedule” has the meaning
set forth in Section 9.3(c).

 

1.18                           “Buyout Notice” has the meaning set forth in
Section 9.2.

 

1.19                           “Buyout Notice Date” has the meaning set forth in
Section 9.2.

 

1.20                           “Buyout Option” means the option to consummate
the Buyout, on the terms and subject to the conditions set forth in Article IX.

 

1.21                           “Capital Plan” has the meaning set forth in
Section 2.4(g).

 

C-3

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1.22                           “Change of Control” shall occur, with respect to
any specified person, if (a) any Group, who prior to such time beneficially
owned (as determined under Rule 13d-3 promulgated under the Securities Exchange
Act of 1934, as amended) less than 50% of the voting shares or other equity
interests of such specified person (measured by voting power rather than the
number of shares or other equity interests), shall acquire (including by
merger,  consolidation or otherwise) voting shares or other equity interests of
such specified person, in one or more transactions or series of transactions,
and after such transaction or transactions such Group beneficially owns 50% or
more of voting shares or other equity interests of such specified person
(measured by voting power rather than the number of shares or other equity
interests), or (b) such specified person shall sell all or substantially all of
its assets to any Group which, prior to the time of such transaction,
beneficially, directly or indirectly, owned less than 50% of the voting shares
or other equity interests of such specified person (measured by voting power
rather than the number of shares or other equity interests). In addition, any
event that causes, directly or indirectly, any Person other than REIT I to
become the beneficial owner of greater than 50% of the Equity Interests of BH OP
shall be deemed a Change of Control of REIT I.

 

1.23                           “Claim” means any threatened, pending or
completed claim, action, suit, litigation, arbitration, alternative dispute
resolution mechanism, investigation, hearing or any other proceeding, whether
civil (including intentional and unintentional tort claims), criminal,
administrative, regulatory, investigative or other, or any inquiry or
investigation that might lead to the institution of any such claim, action,
suit, litigation or other proceeding, whether civil (including intentional and
unintentional tort claims), criminal, administrative, regulatory, investigative
or other.

 

1.24                           “COBRA” has the meaning set forth in
Section 9.6(e)(iii).

 

1.25                           “Construction Work” has the meaning set forth in
Section 5.2.

 

1.26                           “Contracts” has the meaning set forth in
Section 3.2(d).

 

1.27                           “Damages” means any and all costs, losses,
damages, Liabilities, obligations, lawsuits, deficiencies, Claims, demands,
penalties, assessments, fines, return of any consideration, Judgments,
arbitration awards, indemnification payments, reasonable costs and reasonable
expenses, of any nature whatsoever, reasonable costs and reasonable expenditures
required or incurred to comply with any Judgment, and all reasonable amounts
paid in investigation, defense or settlement of any of the foregoing. All
Damages shall be calculated on a pre-Tax basis, without reduction or other
adjustment for any Tax consequences arising out of the payment of such Damages.

 

1.28                           “Economic Interest Percentage” means the
percentage of capital contributed directly or indirectly to the Joint Venture as
compared with the total capital contributed to the Joint Venture by all of the
owners of the Joint Venture as the percentage shall be calculated in good faith
by the Owner. Any in-kind contribution shall be considered in the calculation of
the Economic Interest Percentage and valued at the fair market value of the
contribution on the date of contribution as determined by the Owner.

 

1.29                           “Employee Release” has the meaning set forth in
Section 9.6(d)(i).

 

C-4

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1.30                           “Equity Interests” means (i) with respect to a
corporation, as determined under the Laws of the jurisdiction of organization of
such entity, shares of capital stock (whether common, preferred or treasury),
(ii) with respect to a partnership, limited liability company, limited liability
partnership or similar Person, as determined under the Laws of the jurisdiction
of organization of such entity, units, interests, or other partnership or
limited liability company interests, or (ii) any other equity ownership.

 

1.31                           “Estimated Manager Fees and Expenses” has the
meaning set forth in Section 9.3(f)(ii).

 

1.32                           “Existing Expiration Date” has the meaning set
forth in Section 7.1.

 

1.33                           “Final Manager Fees and Expenses Amount” has the
meaning set forth in Section 9.5(a).

 

1.34                           “Final Manager Fees and Expenses Statement” has
the meaning set forth in Section 9.5(a).

 

1.35                           “GAAP” means United States generally accepted
accounting principles in effect on the Original Effective Date, consistently
applied.

 

1.36                           “Governmental Authority” means any United States
or other international, national, state or local government, any political
subdivision thereof or any other governmental, judicial, public or statutory
instrumentality, authority, body, agency, department, bureau, commission or
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, or any arbitrator with authority to
bind a party at law.

 

1.37                           “Gross Revenues” means all amounts actually
collected as rents or other charges for the use and occupancy of the Properties,
but excluding (i) interest and other investment income of Owner, (ii) proceeds
received by Owner from a sale, exchange, condemnation, eminent domain taking,
casualty or other disposition of assets of Owner, and (iii) proceeds received by
Owner from any financing.

 

1.38                           “Group” shall mean any person, or any two or more
persons acting as a group within the meaning of Section 13(d) of the Securities
Exchange Act of 1934, as amended, and all Affiliates of such person or persons.

 

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

 

1.40                           “Indemnified Parties” has the meaning set forth
in Section 6.5(a).

 

1.41                           “Intellectual Property Rights” means all right,
title and interest, whether foreign or domestic, in and to any and all trade
secrets, confidential information, patents, inventions, copyrights, service
marks, trademarks, know-how, or similar intellectual property rights and all
applications and rights to apply for these rights, as well as any and all
similar rights and license rights of any type under the laws or regulations of
any governmental, regulatory, or judicial authority, foreign or domestic and all
renewals and extensions thereof.

 

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1.42                           “Joint Venture” means an investment in a legal
organization formed to provide for the sharing of the risks and rewards in an
enterprise co-owned and operated for mutual benefit by two or more business
partners and established to acquire or hold Properties.

 

1.43                           “Judgments” means any judgments, injunctions,
orders, decrees, writs, rulings, stipulations, consents, settlements, or awards
of any court or other judicial authority or any other Governmental Authority.

 

1.44                           “Laws” means all laws, statutes, by-laws,
ordinances, rules, regulations, common law or Judgments of any Governmental
Authority.

 

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

 

1.46                           “Licensing Claim” shall mean any Claim that
Manager or any other member of the Behringer Group does not possess a real
estate brokerage or similar license required by any Law in connection with
services provided by such Person to Owner or any of its Affiliates, or any Claim
that arises from or relates to the foregoing.

 

1.47                           “Liabilities” means any liability, indebtedness,
guaranty, assurance, commitment, claim, loss, damage, deficiency, assessment,
obligation or responsibility, whether fixed or unfixed, choate or inchoate,
liquidated or unliquidated, secured or unsecured, accrued or unaccrued,
absolute, known or unknown, contingent or unmatured, liquidated or unliquidated,
asserted or unasserted, due or to become due, whenever or however arising
(including whether arising out of any Contract or tort based on negligence or
strict liability) and whether or not the same would be required by GAAP to be
stated in financial statements or disclosed in the notes thereto.

 

1.48                           “Losses” has the meaning set forth in
Section 6.5(a).

 

1.49                           “Management Agreement” has the meaning set forth
in the Preamble.

 

1.50                           “Management Fees” has the meaning set forth in
Section 5.1.

 

1.51                           “Manager” has the meaning set forth in the
Preamble.

 

1.52                           “Manager Fees and Expenses” has the meaning set
forth in Section 9.3(f)(ii).

 

1.53                           “Manager Purchased Assets” has the meaning set
forth in Section 9.3(d).

 

1.54                           “Manager Purchased Assets Schedule” has the
meaning set forth in Section 9.3(d).

 

1.55                           “Manager Representations Letter” has the meaning
set forth in Section 9.4(b)(i).

 

1.56                           “Manager Specified Employee” has the meaning set
forth in Section 9.3(e)(i).

 

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1.57                           “Manager Specified Employees Schedule” has the
meaning set forth in Section 9.3(e)(i).

 

1.58                           “Master Modification Agreement” means that
certain Master Modification Agreement, dated as of August 31, 2012, by and
between BH REIT, Manager, Behringer Harvard REIT I Services Holdings, LLC, and
Behringer Advisors, LLC, as amended, supplemented or otherwise modified from
time to time.

 

1.59                           “Non-Hired Manager Specified Employee” has the
meaning set forth in Section 9.6(a).

 

1.60                           “Notice” has the meaning set forth in
Section 8.1.

 

1.61                           “Original Effective Date” means February 14,
2003.

 

1.62                           “Original Management Agreement” has the meaning
set forth in the Recitals.

 

1.63                           “Oversight Fee” has the meaning set forth in
Section 5.1.

 

1.64                           “Owner” means BH REIT, BH OP or any joint
venture, limited liability company or other Affiliate of BH REIT or BH OP that
owns, in whole or in part, on behalf of BH REIT, any Property or Properties.

 

1.65                           “Ownership Agreements” has the meaning set forth
in Section 2.4(e).

 

1.66                           “Person” means an individual, corporation,
association, business trust, estate, trust, partnership, limited liability
company or other legal entity.

 

1.67                           “Pre-Closing Manager Fees and Expenses Schedule”
has the meaning set forth Section 9.3(f)(ii).

 

1.68                           “Properties” means all interests in real estate
owned by Owner and all tracts to be acquired by Owner containing
income-producing improvements or on which Owner will construct income-producing
improvements. For the avoidance of doubt, if at any time Owner ceases to own any
interest in a Property, it shall no longer be considered a “Property” for the
purposes of this Management Agreement.

 

1.69                           “Proprietary Properties” means all modeling
algorithms, tools, computer programs, know-how, methodologies, processes,
technologies, ideas, concepts, skills, routines, subroutines, operating
instructions and other materials and aides used in performing the duties set
forth in Article II that relate to management advice, services and techniques
regarding current and potential Properties, and all modifications, enhancements
and derivative works of the foregoing.

 

1.70                           “PTO Benefits” has the meaning set forth in
Section 9.6(c).

 

1.71                           “PTO Liabilities” has the meaning set forth in
Section 9.6(c).

 

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1.72                           “Remaining Amount” shall mean the gross amount of
all Management Fees and Oversight Fees that would have been earned by Manager
under this Management Agreement during the period beginning on the Buyout
Closing Date and ending on the Existing Expiration Date (based on an average of
the Management Fees and Oversight Fees earned by the Manager under this
Management Agreement for the trailing consecutive 12 month period ending with
the last full month prior to the delivery of the Buyout Notice) had the Buyout
Option not been exercised prior to the Existing Expiration Date.

 

1.73                           “Severance Schedule” has the meaning set forth in
Section 9.6(d)(i).

 

1.74                           “Submanager” has the meaning set forth in
Section 8.3(b).

 

1.75                           “Support Services Agreement” means any Agreement
for services between any member of the Behringer Group (on the one hand) and BH
REIT or its Affiliates (on the other hand), other than the Administrative
Services Agreement and this Management Agreement.

 

1.76                           “Tax Return” means any report, return (including
information return), election, document, estimated tax filing, declaration or
other filing required to be supplied to any taxing or other Governmental
Authority with respect to Taxes, including any amendments thereto.

 

1.77                           “Taxes” shall mean all taxes, charges, fees,
levies or other assessments, including income, gross receipts, excise, property,
sales, withholding, social security, occupation, use, service, service and use,
license, payroll, franchise, transfer and recording taxes, fees and charges,
imposed by the United States, or any state, local or foreign government or
subdivision or agency thereof whether computed on a separate, consolidated,
unitary, combined or any other basis; and such term shall include any interest,
fines, penalties or additional amounts attributable to or imposed on or with
respect to any such taxes, charges, fees, levies or other assessments and
(ii) any Liability for the payment of amounts determined by reference to amounts
described in clause (i) as a result of being a member of an affiliated,
consolidated, combined or unitary group.

 

1.78                           “Texas Tax Code” means the Texas Tax Code as
amended by Texas H.B. 3, 79th Leg., 3rd C.S. (2006), and reference to any
provision of the Texas Tax Code Act shall mean such provision as in effect from
time to time, as the same may be amended, and any successor provision thereto,
as interpreted by any applicable administrative rules as in effect from time to
time.

 

1.79                           “Third Party Leasing Agreement” has the meaning
set forth in Section 8.4.

 

1.80                           “Third Party Management Agreement” has the
meaning set forth in Section 8.5.

 

1.81                           “Transferred Manager Employees” has the meaning
set forth in Section 9.6(a).

 

ARTICLE II.
APPOINTMENT AND STATUS OF MANAGER; SERVICES TO BE PERFORMED

 

2.1                                 Appointment of Manager. Owner hereby engages
and retains Manager as the manager and as tenant coordinating agent of the
Properties, and Manager hereby accepts such appointment on the terms and
conditions hereinafter set forth; it being understood that this

 

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Management Agreement shall cause Manager to be, at law, Owner’s agent upon the
terms contained herein.

 

2.2                                 Treatment Under Texas Margin Tax. For
purposes of the Texas margin tax, Manager’s performance of the services
specified in this Management Agreement will cause Manager to conduct part of the
active trade or business of the Owner, and Manager’s compensation includes both
the payment of management fees and the reimbursement of specified costs incurred
in Manager’s conduct of the active trade or business of the Owner. Therefore,
Owner and Manager intend Manager to be, and shall treat Manager as, a
“management company” within the meaning of Section 171.0001(11) of the Texas Tax
Code. Owner and Manager will apply Sections 171.1011(m-1) and 171.1013(f)-(g) of
the Texas Tax Code to Owner’s reimbursements paid to Manager pursuant to this
Management Agreement of specified costs and allocable wages and compensation.
Owner and Manager further recognize and intend that as a result of the
relationship created by this Management Agreement, reimbursements paid to
Manager pursuant to this Management Agreement include (i) “flow-though funds”
that Manager is mandated by law or fiduciary duty to distribute, within the
meaning of Section 171.1011(f) of the Texas Tax Code, and (ii) “flow-through
funds” that Manager is mandated by contract to distribute, within the meaning of
Section 171.1011(g). The terms of this Management Agreement shall be interpreted
in a manner consistent with the characterization of the Manager as a “management
company” as defined in Section 171.0001(11), and with the characterization of
the reimbursements as “flow-though funds” within the meaning of
Section 171.1011(f)-(g) of the Texas Tax Code.

 

2.3                                 General Duties. Manager shall devote its
reasonable best efforts to performing its duties hereunder to manage, operate
and maintain the Properties in a diligent, careful and vigilant manner. The
services of Manager are to be of scope and quality not less than those generally
performed by professional property managers of other similar properties in that
geographic area. Manager shall make available to Owner 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 relating to the
operation and leasing of the Properties.

 

2.4                                 Specific Duties. In addition to the specific
authority granted to Manager by Owner pursuant to Article III of this Management
Agreement, but subject to the terms hereof, Manager’s duties include the
following:

 

(a)                                  Lease Obligations. Manager shall perform
all duties of the landlord under all Leases insofar as such duties relate to
operation, maintenance, and day-to-day management. Manager shall also provide or
cause to be provided, at Owner’s 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 arrange for and supervise the performance of all installations and
improvements in space leased to any tenant that are expressly required under the
terms of the lease of such space.

 

(b)                                 Maintenance. Manager shall cause the
Properties to be maintained in a manner consistent with, or substantially
similar to, the manner in which similar rental

 

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properties in that geographic region are maintained. Manager’s duties and
supervision in this respect shall include, without limitation, cleaning the
interior and the exterior of the Improvements and making or supervising the
repair, alterations, and decoration of the Improvements, subject to and in
strict compliance with this Management Agreement and the Leases. Construction
activities undertaken by Manager, if any, shall be limited to activities related
to the management, operation, maintenance, and leasing of the Properties (e.g.,
repairs, renovations, and leasehold improvements), including planning and
coordinating the construction of any tenant-paid improvements, in each case, at
Owner’s request.

 

(c)           Leasing Functions. Notwithstanding anything in this Management
Agreement to the contrary, unless requested in writing by Owner and agreed to in
writing by Manager, Manager shall not perform (and, unless so requested and
agreed in a separate written agreement, Manager shall not have any obligation to
perform) any leasing functions, and unless so requested and agreed, all leasing
functions will be performed by Owner or third parties pursuant to Section 8.4.
For the avoidance of doubt, Manager shall not pay and Manager will not be
reimbursed by Owner for, any expenses of leasing a Property (such as newspaper
and other advertising, signage, banners, brochures, referral commissions,
leasing commissions, finder’s fees and salaries, bonuses and other compensation
of leasing personnel responsible for the leasing of the Property) unless Owner
has requested Manager to perform such leasing functions or pay such amount and
Manager has agreed, in accordance with this Section 2.4(c).

 

(d)           Permits; Notice of Violations. At Owner’s request and cost and
expense, Manager shall use commercially reasonable efforts to obtain required
permits for each Property and take all commercially reasonable steps to ensure
compliance in all material respects with applicable Laws. Manager shall 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 any
notice as Manager believes is appropriate.

 

(e)           Ownership Agreements. Manager has received copies of (and will be
provided with copies of future) Articles of Incorporation, Agreements of Limited
Partnership, Joint Venture Partnership Agreements and Operating Agreements, each
as may be amended from time to time, of Owner, as applicable (the “Ownership
Agreements”) and is familiar with the terms thereof. Manager shall use
reasonable care to avoid any act or omission that, in the performance of its
duties hereunder, shall in any way conflict with the terms of Ownership
Agreements.

 

(f)            Technology Use and Support. Manager shall utilize the software
and technology platforms that it believes are appropriate in connection with
fulfilling its duties under this Management Agreement. In addition, Manager
shall provide technical support and maintenance with respect to any technology
used in the maintenance, operation, management and leasing of the Properties.

 

(g)           Capital Plans. Not later than 30 days after the Original Effective
Date, and each successive fifth anniversary thereafter, Manager shall prepare
and deliver to Owner

 

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a plan setting forth its strategies for the overall management, operation and
maintenance of the Properties under the terms and conditions of this Management
Agreement, for the five years immediately following the submission (“Capital
Plan”). As often as reasonably necessary during the period covered by any
Capital Plan, the Manager may submit to Owner for its approval an updated
Capital Plan.

 

2.5           The Account. Manager shall establish and maintain a separate
checking account (the “Account”) into which all rent and other monies collected
from tenants shall be deposited. All monies deposited from time to time in the
Account shall be deemed to be trust funds and shall be and remain the property
of Owner and shall be withdrawn and disbursed by Manager for the account of
Owner only as expressly permitted by this Management Agreement. No monies
collected by Manager on Owner’s behalf shall be commingled with funds of
Manager. The 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 the Account. Manager may endorse any
and all checks received in connection with the operation of any Property and
drawn to the order of Owner, and Owner shall, upon request by Manager, furnish
Manager’s depository with an appropriate authorization for Manager to make such
endorsement. Manager shall have the right to designate two or more persons, each
of whom shall be approved in advance by BH REIT, who shall be authorized to draw
against the Account, but only for purposes authorized by this Management
Agreement.

 

(b)           All sums due to Manager hereunder, whether (i) for compensation,
(ii) reimbursement for expenditures approved by Owner, including as part of the
Annual Budget in accordance with Section 2.6(c), or (iii) permitted under
Section 2.6(d) shall be a charge against the operating revenues of the
Properties and shall be paid or withdrawn by Manager or Owner from the Account
prior to the making of any other disbursements therefrom.

 

(c)           By the 15th day after the end of each month, Manager shall forward
to Owner all monies contained in the Account other than a reserve of $5,000 and
any other amounts otherwise provided in the budget for the relevant property
which shall remain in the Account.

 

Notwithstanding the foregoing provisions of this Section 2.5, Manager hereby
acknowledges that (A) Owner may obtain one or more mortgage loans secured by one
or more of the Properties and (B) Manager will act in conformity with the
commercially reasonable provisions of the documents evidencing or securing such
mortgage loans. Manager agrees that the existing terms of existing mortgage
loans as of the date hereof shall be deemed to be commercially reasonable for
the purposes of the immediately preceding sentence. For the avoidance of doubt,
neither this Management Agreement nor the rights of Manager under this
Management Agreement shall be subordinated to any future mortgage loans secured
by one or more of the Properties or any renegotiation, amendment, or other
modification to any such existing mortgage loans, in each case, without the
prior written consent of Manager, which consent may be withheld or granted

 

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in Manager’s sole discretion, however the withholding or granting of such
consent shall not be unreasonably delayed.

 

Notwithstanding the forgoing provisions of this Section 2.5, Manager shall not
have the duties and responsibilities set forth in this Section 2.5 to the extent
Owner performs the respective activity or function contemplated by this
Section 2.5.

 

2.6           Accounting, Records and Reports.

 

(a)           Records. Manager shall maintain the necessary books and records in
connection with the maintenance and operation of the Properties, including but
not limited to, copies of invoices, leases, billing records, recovery
calculations and budget data. Consistent with past practice, Manager will
provide requested data and support to Owner in order to account properly for the
Properties. Manager also shall provide the following services as reasonably
requested by Owner: (i) billing and collection of rent and other charges;
(ii) management reporting; (iii) variance analysis; (iv) recoveries analysis and
billings; (v) general ledger analysis; (vi) accrual support;
(vii) reforecasting; and (viii) budgeting. Owner and persons designated by Owner
shall at all reasonable time have access to and the right to audit and make
independent examinations of such records, books and accounts and all vouchers,
files and all other material pertaining to the Properties and this Management
Agreement, all of which Manager agrees to keep safe, available and separate from
any records not pertaining to the Properties, at a place recommended by Manager
and approved by Owner.

 

(b)           Copies of Contracts. Manager shall provide the original copies of
all contracts entered into by Manager on behalf of Owner during such period, if
requested by Owner upon 15 days’ prior written notice.

 

(c)           Budgets and Leasing Plans. Not later than August 15 of each
calendar year, Owner shall prepare and submit to Manager a leasing plan for each
Property. Utilizing (among other things) the leasing plan provided by Owner, not
later than October 15 of each calendar year, Manager shall prepare and submit to
Owner for its approval an operating budget on each Property for the calendar
year immediately following such submission (each, an “Annual Budget”). In
connection with any acquisition of a Property by Owner, Manager shall prepare an
Annual Budget for the remainder of the calendar year. Each Annual Budget shall
be in the form of the budget and plan approved by Owner prior to the date
thereof. As often as reasonably necessary during the period covered by any such
budget, Manager may submit to Owner for its approval an updated Annual Budget
incorporating any changes as shall be necessary to reflect cost over-runs and
the like during that period. If Owner does not disapprove any proposed Annual
Budget within 60 days after receipt thereof by Owner, the Annual Budget shall be
deemed approved. If Owner shall disapprove any proposed Annual Budget, it shall
so notify Manager within said 60-day period and explain the reasons therefor. If
Owner disapproves of any proposed Annual Budget, Manager shall submit a revised
Annual Budget, as applicable, within 10 days of receipt of the notice of
disapproval, and Owner shall have 10 days to provide notice to Manager if it
disapproves of the revised Annual Budget. If a proposed

 

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Annual Budget is not approved by December 31 of any calendar year, Manager shall
operate the applicable Property pursuant to the proposed Annual Budget for the
following calendar year with respect to those portions approved by Owner and in
accordance with the prior year’s Annual Budget with respect to those portions
not approved by Owner (with the exception of (i) non-recurring expenditures and
capital expenditures which shall be deemed removed from the prior year’s Annual
Budget and (ii) actual increases for real estate taxes, which shall be deemed
added to the prior year’s Annual Budget).

 

(d)           Additional Costs. Manager will not incur any costs other than
those estimated in any Annual Budget except for:

 

(i)            tenant improvements and real estate commissions required under a
Lease;

 

(ii)           maintenance or repair costs under $5,000 per Property;

 

(iii)          reasonable costs incurred in emergency situations in which action
is immediately necessary for the preservation or safety of the Property, or for
the safety of occupants or other persons (or to avoid the suspension of any
necessary service of the Property);

 

(iv)          expenditures for real estate taxes and assessment;

 

(v)           maintenance supplies calling for an aggregate purchase price less
than $25,000 per annum for all Properties; and

 

(vi)          as otherwise required in this Management Agreement.

 

Annual Budgets prepared by Manager shall be for planning and informational
purposes only, and Manager shall have no liability to Owner for any failure to
meet any Annual Budget. However, Manager will use its best efforts to operate
within the approved Annual Budget.

 

(e)           Legal Requirements. Manager shall execute and file when due all
forms, reports, and returns required by law relating to the employment of its
personnel. Manager shall be responsible for notifying Owner in the event Manager
receives notice that any Improvement on a Property or any equipment therein does
not comply with the requirements of any statute, ordinance, law or regulation of
any governmental body or of any public authority or official thereof having or
claiming to have jurisdiction thereover. Manager shall promptly forward to Owner
any complaints, warnings, notices or summonses received by it relating to such
matters. Owner represents that to the best of its knowledge each of its
Properties and any equipment thereon will upon acquisition by Owner comply with
all such requirements. Owner authorizes Manager to disclose the ownership of the
Property by Owner to any such officials.

 

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ARTICLE III.
AUTHORITY GRANTED TO MANAGER AND CERTAIN OWNER OBLIGATIONS

 

3.1           Authority As To Tenants, Etc. Owner agrees and does hereby give
Manager the following authority and powers (all of which, unless otherwise
provided herein, shall be exercised either as Manager for Owner, or in the name
of Owner entered into by Manager as Owner’s authorized agent, and Owner shall
assume all expenses in connection with such matters); provided, however, that
Owner will not assume or be responsible for any costs or expenses that (x) have
not been previously approved by Owner in writing (including, without limitation,
as set forth herein), (y) have not been previously approved by Owner as part of
the Annual Budget, or (z) are not permitted under Section 2.6(d):

 

(a)           to advertise each Property or any part thereof and to display
signs thereon, as permitted by law and subject to the terms and conditions of
the Leases;

 

(b)           to collect from tenants all or any of the following: a late rent
administrative charge, a non-negotiable check charge, credit report fee, a
subleasing administrative charge or broker’s commission;

 

(c)           with Owner’s prior written authorization, to terminate tenancies
and to sign and serve in the name of Owner of each Property such notices related
thereto as are deemed necessary by Manager;

 

(d)           with Owner’s prior written authorization, to institute and
prosecute actions to evict tenants and to recover possession of the Property or
portions thereof; and

 

(e)           with Owner’s prior written authorization, to sue for and in the
name of Owner and recover rent and other sums due; and to settle, compromise,
and release such actions or suits, or reinstate such tenancies. All expenses of
litigation that Manager participates in, at Owner’s prior written request,
including, but not limited to, attorneys’ fees, filing fees and court costs that
Manager shall incur in connection with the collecting of rent and other sums, or
to recover possession of any Property or any portion thereof, shall be deemed to
be an operational expense of the Property. Manager and Owner shall concur on the
selection of the attorneys to handle such litigation.

 

3.2           Operational Authority. Owner agrees and does hereby give Manager
the following authority and powers (all of which, unless otherwise provided
herein, shall be exercised either as Manager for Owner, or in the name of Owner
entered into by Manager as Owner’s authorized agent, and, unless otherwise
provided herein, Owner shall assume all expenses in connection with such
matters); provided, however, that Owner will not assume or be responsible for
any costs or expenses that (x) have not been previously approved by Owner in
writing (including, without limitation, as set forth herein), (y) have not been
previously approved by Owner as part of the Annual Budget, or (z) are not
permitted under Section 2.6(d):

 

(a)           to hire, supervise, discharge, and pay all labor required for the
operation and maintenance of each Property, including but not limited to on-site
personnel, managers, assistant managers, leasing consultants, engineers,
janitors, maintenance supervisors and other employees required for the operation
and maintenance of the

 

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Property, including personnel spending a portion of their working hours (to be
charged on a pro rata basis) at the Property; provided, however, that Manager
shall not hire any new personnel, unless the cost and expenses related to such
new personnel have been accounted for in the then Annual Budget or previously
approved by Owner in writing. Any personnel hired by Manager to maintain,
operate and lease the Properties shall be the employees or independent
contractors of Manager and not of Owner. Manager shall use due care in selecting
and supervising these employees or independent contractors. With respect to
these employees, Manager shall be responsible for maintaining timekeeping
records, processing regular payroll, filing payroll tax reports on a timely
basis, ensuring compliance with wage and tax laws and tracking benefit hours and
garnishments and child support orders. All expenses of these employees’
employment shall be deemed operational expenses of the Property.

 

(b)           to perform the duties assigned to Manager in Section 2.4(b);

 

(c)           to administer any Leases;

 

(d)           to prepare, negotiate and enter into, as Manager of the Property,
(i) contracts for all items on budgets that have been approved by Owner, any
emergency services or repairs for items not exceeding $5,000, (ii) appropriate
service agreements and labor agreements for normal operation of the Property,
which have terms not to exceed three years, (iii) agreements for all budgeted
maintenance, minor alterations, and utility services, including, but not limited
to, electricity, gas, fuel, water, telephone, window washing, scavenger service,
landscaping, snow removal, pest exterminating, decorating and legal services, in
connection with the Leases and relating to the Property and (iv) any other
service agreements as Manager may reasonably consider appropriate, consistent
with past practice, and accounted for in the then Annual Budget (collectively,
the “Contracts”); and

 

(e)           to purchase supplies and pay all bills in accordance with the
Annual Budget, or as permitted under Sections 2.6(d)(ii) or 2.6(d)(v).

 

Manager shall use its reasonable commercial best efforts to obtain the foregoing
services and utilities for each Property on terms consistent with, or
substantially similar to, those available to similar rental properties in the
geographic region in which the Property is located. Owner hereby appoints
Manager as Owner’s authorized Manager for the purpose of executing, as Manager
for said Owner, all Contracts. Manager shall secure the approval of, and
execution of appropriate Contracts by, Owner for any non-budgeted and
non-emergency/contingency capital items, alterations or other expenditures in
excess of $5,000 for any one item, securing for each item at least three written
bids, if practicable, or providing evidence satisfactory to Owner that the
Contract amount is lower than industry standard pricing in the geographic region
in which the Property is located, from responsible contractors. Manager shall
have the right from time to time during the term hereof, to contract with and
make purchases from Affiliates of Manager, provided that contract rates and
prices are no less favorable to Owner than those available from unaffiliated
third parties. Manager may at any time and from time to time request and receive
the prior written authorization of Owner of the Property of any one or more
purchases or other

 

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expenditures, notwithstanding that Manager may otherwise be authorized hereunder
to make such purchases or expenditures.

 

3.3           Rent and Other Collections. Owner agrees and does hereby give
Manager the authority and powers (all of which, unless otherwise provided
herein, shall be exercised either as Manager for Owner, or in the name of Owner
entered into by Manager as Owner’s authorized agent, and Owner shall assume all
expenses in connection with such matters) to collect rents, assessments and
other items, including but not limited to tenant payments for real estate taxes,
property liability and other insurance, damages and repairs, common area
maintenance, tax reduction fees and all other tenant reimbursements,
administrative charges, proceeds of rental interruption insurance, parking fees,
income from coin operated machines and other miscellaneous income, due or to
become due and give receipts therefor and to deposit all such Gross Revenue
collected hereunder in the Account. Manager shall also have the authority to
collect and handle tenants’ security deposits, including the right to apply such
security deposits to unpaid rent, and to comply, on behalf of Owner of the
Property, with applicable state or local laws concerning security deposits and
interest thereon, if any.

 

3.4           Advances. Manager shall not be required to advance any monies for
the care or management of any Property, but Owner agrees to advance all monies
necessary therefor, provided that any advanced amounts have been budgeted in the
Annual Budget. If Manager shall elect to advance any money in connection with a
Property, Owner agrees to reimburse Manager within 30 days, and hereby
authorizes Manager to deduct such advances from any monies due Owner. In
connection with any insured losses or damages relating to any Property, Manager
and Owner shall each reasonably cooperate with respect to all steps necessary
regarding any such claim. Manager will not make any adjustments or settlements
in excess of $2,500 without Owner’s prior written consent.

 

3.5           Payment of Expenses. Owner agrees and does hereby give Manager the
authority and power (all of which shall be exercised either as Manager for
Owner, or in the name of Owner entered into by Manager as Owner’s authorized
agent, and Owner shall assume and be responsible for all expenses in connection
with such matters; provided, however, that Owner will not assume or be
responsible for any costs or expenses that (x) have not been previously approved
by Owner in writing (including, without limitation, as set forth herein),
(y) have not been previously approved by Owner as part of the Annual Budget, or
(z) are not permitted under Section 2.6(d)) to pay all expenses of the Property,
including utility and water charges, sewer rent and assessments, from the Gross
Revenue collected in accordance with Section 3.3 above, subject to any lender
requirements, from the Account. All bills shall be paid by Manager 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. All expenses shall be billed at net cost
(i.e., less all rebates, commissions, discounts and allowances, however
designed).

 

It is understood that the Gross Revenue will be used first to pay the
compensation to Manager as contained in Article V below, then operational
expenses and then any mortgage indebtedness, including real estate tax and
insurance impounds, but only as directed by Owner in writing and only if
sufficient Gross Revenue is available for such payments. Nothing in this
Management Agreement shall be interpreted in such a manner as to obligate
Manager to pay

 

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from Gross Revenue, any expenses incurred by Owner prior to the commencement of
this Management Agreement, except to the extent Owner advances additional funds
to pay such expenses.

 

3.6           Environmental Matters. Owner hereby warrants and represents to
Manager that to the best of Owner’s knowledge, no Property acquired after the
date of this Management Agreement, upon acquisition by Owner, nor any part
thereof, will be used to treat, deposit, store, dispose of or place any
hazardous substance that may subject Manager to liability or claims under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (42
U.S.C.A. Section 9607) or any constitutional provision, statute, ordinance, law,
or regulation of any governmental body or of any order or ruling of any public
authority or official thereof, having or claiming to have jurisdiction
thereover.

 

3.7           Legal Status of Properties. Owner represents that to the best of
its knowledge each Property and any equipment thereon, in each case acquired
after the date of this Management Agreement, when acquired by Owner, will comply
with all legal requirements and authorizes Manager to disclose the identity of
the Owner of the Property to any such officials. In the event it is alleged or
charged that any Improvement or any equipment on a Property or any act or
failure to act by Owner with respect to the Property or the sale, rental, or
other disposition thereof fails to comply with, or is in violation of, any of
the requirements of any constitutional provision, statute, ordinance, law, or
regulation of any governmental body or any order or ruling of any public
authority or official thereof having or claiming to have jurisdiction thereover,
and Manager, in its sole and absolute discretion, considers that the action or
position of Owner, with respect thereto may result in damage or liability to
Manager, Manager shall have the right to stop providing services with respect to
such Property at any time by written cancellation notice to Owner of its
election so to do, which cancellation shall be effective upon the service of
such notice. Such cancellation shall not (a) terminate this Management
Agreement, (b) release the indemnities of Owner set forth in this Management
Agreement or (c) terminate any liability or obligation of Owner to Manager for
any payment, reimbursement, or other sum of money then due and payable to
Manager hereunder.

 

3.8           Extraordinary Payments. Owner agrees to give adequate advance
written notice to Manager if Owner desires that Manager make any extraordinary
payment, out of Gross Revenue, to the extent funds are available after the
payment of Manager’s compensation as provided for herein and all operational
expenses, of mortgage indebtedness, general taxes, special assessments, or
insurance premiums.

 

ARTICLE IV.
EXPENSES

 

4.1           Owner’s Expenses. Except as otherwise specifically provided, all
costs and expenses incurred hereunder by Manager in fulfilling its duties to
Owner shall be for the account of and on behalf of Owner. Such costs and
expenses shall include the wages and salaries and other employee-related
expenses, consistent with past practice, of all on-site and offsite employees
(other than the senior executives, identified by title, set forth on Exhibit D)
of Manager who are engaged in the operation, management, maintenance and leasing
or access control of the Properties, including taxes, insurance and benefits
relating to such employees,

 

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costs of technology related to the Properties, including computers, telephone
systems and property management and accounting software and any upgrades or
conversions thereof, and legal, travel and other out-of-pocket expenses that are
directly related to the management of specific Properties. All costs and
expenses for which Owner is responsible under this Management Agreement shall be
paid by Manager out of the Account. In the event the Account does not contain
sufficient funds to pay all said expenses, Owner shall fund all sums necessary
to meet such additional costs and expenses.

 

4.2           Manager’s Expenses. Manager shall, out of its own funds, pay all
of its general overhead and administrative expenses.

 

ARTICLE V.
MANAGER’S COMPENSATION

 

5.1           Management Fees. Owner shall pay to Manager property management
fees in an amount equal to three percent (3%) of Gross Revenues (the “Management
Fees”) on a monthly basis from the income received from the Properties over the
term of this Management Agreement; provided, however, the Management Fees shall
not be less than the following amounts for any Property on a monthly basis:

 

 

 

Minimum Monthly

 

Property Size

 

Management Fees

 

0 to 199,999 square feet

 

$

1,000

 

200,000 to 500,000 square feet

 

$

2,000

 

More than 500,000 square feet

 

$

3,000

 

 

Certain of these Properties may be owned by Joint Ventures. When the Manager is
not paid by the Joint Venture directly in respect of its services, the
applicable Management Fee or Oversight Fee (as defined below) to be paid by the
Owner will be calculated by multiplying the Management Fee by the Economic
Interest Percentage owned directly or indirectly by the Owner in that Property.
In the event that Owner contracts directly with a third-party property manager
not affiliated with the Manager in respect of a Property for which the Owner, in
its sole discretion, has the ability to appoint or hire the Manager, Owner shall
pay Manager an oversight fee (“Oversight Fee”) equal to one-half of one percent
(0.50%) of Gross Revenues. In no event will Owner pay both a Management Fee and
an Oversight Fee to Manager with respect to any Property. If Manager
subcontracts its responsibilities hereunder to another person or entity, Manager
shall be solely responsible for the payment to the third party. The Management
Fee includes the reimbursement of the specified cost incurred by the Manager of
engaging another person or entity to perform Manager’s responsibilities
hereunder; provided, however, that Manager shall be responsible for payment of
all amounts to these third parties. Nothing herein shall prevent Manager from
entering fee-splitting arrangements with third parties with respect to the
Management Fee.

 

5.2           Construction Supervision Fees. Manager shall supervise
construction performed by or on behalf of Owner with respect to the Properties,
including, but not limited to capital repairs and improvements, major building
construction and tenant improvements (collectively, the “Construction Work”).
Owner shall pay Manager a construction supervision fee based on

 

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hard construction costs incurred in connection with the Construction Work and in
accordance with the rates set forth in Appendix 1 attached to the Original
Management Agreement. Owner shall pay construction supervision fees at the same
time it makes payments to any third party contractors in respect of the
Construction Work.

 

5.3           Leasing Fees. In addition to the compensation paid to Manager
under Section 5.1 above, Manager shall be entitled to receive a separate fee as
mutually agreed for leasing services in the event Manager and Owner agree in a
separate written agreement that Manager shall perform leasing services pursuant
to Section 2.4(c).

 

5.4           Audit Adjustment. If any audit of the records, books or accounts
relating to the Properties discloses an overpayment or underpayment of
Management Fees, Owner 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 than the
correct Management Fees for such fiscal year, Manager shall bear the cost of
such audit.

 

ARTICLE VI.
INSURANCE AND INDEMNIFICATION

 

6.1           Insurance to be Carried.

 

(a)           Manager shall obtain and keep in full force and effect insurance
liability policies that shall provide sufficient insurance satisfactory to both
Owner and Manager consistent with past practice and shall contain waivers of
subrogation for the benefit of Owner.

 

(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,
employer’s liability insurance applicable to and covering all employees of
Manager at the Properties and all persons engaged in the performance of any work
required hereunder, and Manager shall furnish Owner certificates of insurers
naming Owner as an additional insured and evidencing that such insurance is in
effect. If any work under this Management Agreement is subcontracted as
permitted herein, Manager shall include in each subcontract a provision that the
subcontractor shall also furnish Owner with such a certificate.

 

6.2           Insurance Expenses. Premiums and other expenses of such insurance,
as well as any applicable payments in respect of deductibles shall be borne by
Owner.

 

6.3           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 that is in
effect or for which application has been made. Manager shall use its best
efforts to comply with all requirements of insurers.

 

6.4           Accidents and Claims. Manager shall promptly investigate and shall
report in detail to Owner all accidents, claims for damage relating to
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

 

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company in connection with any such accident, claim, damage, or destruction.
Such reports shall be given to Owner promptly consistent with past practice.
Manager and Owner shall cooperate with respect to settling any claim against an
insurance company arising out of any policy. Manager will not settle any claim
related to a Property or BH REIT against an insurance company arising out of any
policy and, in connection with any such claim, will not execute proofs of loss
and adjustments of loss and to collect and receipt for loss proceeds. Without
the prior written consent of Manager, which consent shall not be unreasonably
withheld or delayed, Owner shall not take a position with respect to any claim
under the portfolio property policy or general liability policy of the Behringer
Group that is inconsistent with past practice.

 

6.5           Indemnification.

 

(a)           Indemnification of Manager. Owner agrees to indemnify, defend,
protect, save and hold harmless Manager and any other member of the Behringer
Group who performs services pursuant to this Management Agreement and their
respective stockholders, partners, members, officers, directors, employees,
managers, successors and assigns (collectively, the “Indemnified Parties”) from
any and all claims, causes of action, demands, suits, proceedings, loss,
judgments, damage, awards, liens, fines, costs, attorney’s fees and expenses, of
every kind and nature whatsoever (collectively, “Losses”) in connection with or
in any way related to (i) any Contract, (ii) each Property, including any past,
current or future allegations regarding treatment, depositing, storage, disposal
or placement by any party other than Manager of hazardous substances on the
Property, from liability for damage to each Property and injuries to or death of
any person whomsoever, and damage to Property, and from liability arising out of
or related to a Property that Owner has abandoned or ceased funding operating
shortfalls, including the cessation of any service by Manager for such Property
as requested by Owner pursuant to Section 8.22, and (iii) the willful
misconduct, gross negligence or unlawful acts (such unlawfulness having been
adjudicated by a court of proper jurisdiction) of Owner, or the failure of Owner
to correct any present or future violation or alleged violation of any and all
present or future laws, ordinances, statutes, or regulations of any public
authority or official thereof, having or claiming to have jurisdiction
thereover, of which it has actual notice; provided, however, that the
indemnification and exculpation shall not extend to any such Losses arising out
of the willful misconduct, gross negligence or unlawful acts (the unlawfulness
having been adjudicated by a court of proper jurisdiction) of Manager, its
agents, servants, or employees; provided, further, that the indemnification and
exculpation shall be limited to the extent that Manager recovers insurance
proceeds with respect to that matter. Manager shall not be liable for any error
of judgment or for any mistake of fact or law, or for any thing that it may do
or refrain from doing, except in cases of willful misconduct, gross negligence
or unlawful acts (the unlawfulness having been adjudicated by a court of proper
jurisdiction).

 

(b)           Indemnification of Owner. Manager agrees to indemnify, defend,
protect, save and hold harmless Owner and its Affiliates and their respective
stockholders, partners, members, officers, directors, employees, managers,
successors and assigns from any and all Losses for any injury or damage to any
person or property whatsoever for which Manager is responsible occurring in, on,
or about the Properties, including, without limitation, the Improvements, when
the injury or damage shall be caused by the willful

 

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misconduct, gross negligence or unlawful acts (the unlawfulness having been
adjudicated by a court of proper jurisdiction) of Manager, its agents, servants,
or employees, except to the extent that Owner recovers insurance proceeds with
respect to such matter.

 

(c)           Limitations. Notwithstanding anything to the contrary in this
Management Agreement, any indemnification and exculpation by the Owner under
this Management Agreement is subject to any limitations imposed under the
Company’s Articles of Incorporation or any amendments thereto.

 

ARTICLE VII.
TERM AND TERMINATION

 

7.1           Term. This Management Agreement shall commence on the Original
Effective Date and shall continue until the earlier of (x) February 14, 2017
(the “Existing Expiration Date”) and (y) the consummation of the Buyout. In
addition, and notwithstanding the foregoing, Owner may terminate this Management
Agreement at any time upon delivery of written notice to Manager not less than
30 days prior to the effective date of termination, in the event of (and only in
the event of) a showing by Owner of willful misconduct, gross negligence, or
deliberate malfeasance by Manager in the performance of Manager’s duties
hereunder; provided, however, that Owner shall not have such a right of
termination if (i) such willful misconduct, gross negligence, or deliberate
malfeasance is cured by Manager within thirty (30) days of written notice
thereof by Owner, and (ii) Manager agrees to indemnify Owner for Losses arising
out of such conduct. In addition, either party may terminate this Management
Agreement immediately upon the occurrence of any of the following:

 

(a)           A decree or order is rendered by a court having jurisdiction
(i) adjudging Manager as bankrupt or insolvent, or (ii) 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 (iii) 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

 

(b)           Manager (i) institutes proceedings to be adjudicated a voluntary
bankrupt or an insolvent, (ii) consents to the filing of a bankruptcy proceeding
against it, (iii) files a petition or answer or consent seeking reorganization,
readjustment, arrangement, composition or relief under any similar applicable
law or practice, (iv) 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, (v) makes an
assignment for the benefit of creditors, (vi) 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 the other party, or (iv) takes corporate or
other action in furtherance of any of the aforesaid purposes.

 

Except as provided in Section 9.7, this Management Agreement may only be
terminated in whole and not in part.

 

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7.2           Manager’s Obligations Upon Termination. Upon the termination of
this Management Agreement (including termination upon consummation of the
Buyout), Manager shall cooperate with Owner and take all reasonable steps
requested by Owner to make an orderly transition of the Manager’s services,
including without limitation:

 

(a)           Manager shall deliver to Owner or its designee, all books and
records with respect to the Properties.

 

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

 

(c)           Manager shall render to Owner an accounting of all funds of Owner
in its possession and shall deliver to Owner a statement of all Management Fees
claimed to be due to Manager and shall cause funds of Owner held by Manager
relating to the Properties to be paid to Owner or its designee.

 

(d)           All provisions of this Management Agreement that require Manager
to have insured, or to protect, defend, save, hold and indemnify or to reimburse
Owner shall survive any expiration or termination of this Management Agreement
and, if Owner is or becomes involved in any claim, proceeding or litigation by
reason of Owner having retained services of Manager, such provisions shall apply
as if this Management Agreement were still in effect.

 

7.3           Owner’s Obligations Upon Termination. Upon the termination of this
Management Agreement (including termination upon consummation of the Buyout),
Owner shall cooperate with Manager and take all reasonable steps to make an
orderly transition of the Manager’s services to Owner, including without
limitation:

 

(a)           Owner shall pay or reimburse Manager for any sums of money due it
under this Management Agreement for services and expenses prior to termination
of this Management Agreement. The parties understand and agree that Manager may
withhold funds for 60 days after the end of the month in which this Management
Agreement is terminated to pay bills previously incurred but not yet invoiced
and to close accounts. Should the funds withheld be insufficient to meet the
obligation of Manager to pay bills previously incurred, Owner will, upon demand,
advance sufficient funds to Manager to ensure fulfillment of Manager’s
obligation to do so, within 10 days of receipt of notice and an itemization of
such unpaid bills.

 

(b)           Owner shall assume in writing all obligations under all Contracts
entered into by Manager, on behalf of Owner of the Property and in accordance
with this Management Agreement, upon the termination of this Management
Agreement.

 

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(c)           All provisions of this Management Agreement that require Owner to
have insured, or to protect, defend, save, hold and indemnify or to reimburse
Manager and the Indemnified Parties shall survive any expiration or termination
of this Management Agreement and, if Manager or an Indemnified Party is or
becomes involved in any claim, proceeding or litigation by reason of Manager
having been Manager of Owner, such provisions shall apply as if this Management
Agreement were still in effect.

 

ARTICLE VIII.
MISCELLANEOUS

 

8.1           Notices. Any notice, report, approval, authorization, waiver,
consent or other communication (each, a “Notice”) required or permitted to be
given hereunder shall be in writing and shall be deemed given or delivered:
(i) when delivered personally; (ii) one business day following deposit with a
recognized overnight courier service that obtains a receipt, provided such
receipt is obtained, and provided further that the deposit occurs prior to the
deadline imposed by such service for overnight delivery; (iii) when transmitted,
if sent by electronic mail, provided a read receipt is delivered to the sender,
in each case provided such communication is addressed to the intended recipient
thereof as set forth below:

 

If to BH REIT, to:

 

Behringer Harvard REIT I, Inc.
17300 Dallas Parkway

Suite 1010

Dallas, Texas 75248
Attention: Telisa Webb Schelin, Esq.

Fax: (214) 365-7112

Email: tschelin@behringerharvard.com

 

with copies (which shall not constitute notice) to:

 

Proskauer Rose LLP

Eleven Times Square

New York, New York 10036

Attention:

Peter M. Fass

 

James P. Gerkis

Fax: (212) 969-2900

Email:

pfass@proskauer.com

 

jgerkis@proskauer.com

 

and:

 

Shefsky & Froelich, Ltd.
111 East Wacker

Suite 2800

Chicago, Illinois 60601
Attention: Michael J. Choate

 

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Fax: (312) 275-7554

Email: mchoate@shefskylaw.com

 

If to Manager:

 

HPT Management Services LLC
15601 Dallas Parkway

Suite 600

Addison, Texas 75001
Attention: Robert S. Aisner
Fax: (214) 655-1610

Email: baisner@behringerharvard.com

 

with copies (which shall not constitute notice) to:

 

Behringer Harvard Holdings
15601 Dallas Parkway

Suite 600

Addison, Texas 75001
Attention: Stanton P. Eigenbrodt
Fax: (214) 655-1610

Email: seigenbrodt@behringerharvard.com

 

and:

 

Jenner & Block LLP
353 N. Clark Street
Chicago, Illinois 60654

Attention:

Donald E. Batterson

 

Jeffrey R. Shuman

Fax: (312) 923-2707

Email:

dbatterson@jenner.com

 

jshuman@jenner.com

 

Either party shall, as soon as reasonably practicable, give Notice in writing to
the other party of a change in its address for the purposes of this Section 8.1.
The failure of any Party to give notice shall not relieve any other Party of its
obligations under this Management Agreement except to the extent that such Party
is actually prejudiced by such failure to give notice.

 

8.2           Governing Law: Venue. This provisions of this Management Agreement
shall be construed and interpreted in accordance with the laws of the State of
Texas, and venue for any action brought with respect to any claims arising out
of this Management Agreement shall be brought exclusively in Dallas County,
Texas.

 

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8.3           Assignment.

 

(a)           Neither this Management Agreement nor any of the rights, interests
or obligations hereunder shall be assigned, transferred, delegated or otherwise
disposed of (whether voluntarily or involuntarily, directly or indirectly, by
operation of law, merger, sale of stock, sale of assets or otherwise), by
Manager without the prior written consent of Owner. Notwithstanding the
foregoing, (i) Manager may, without the prior consent of Owner, assign,
transfer, delegate or otherwise dispose of, this Management Agreement, or any of
its rights, interests or obligations hereunder to (x) any Person listed on
Schedule 8.3(a) attached hereto or (y) any Affiliate of Behringer Harvard
Holdings, LLC, in whole or not in part; provided, however, that such Affiliate
remains an Affiliate of Behringer Harvard Holdings, LLC at all times following
such assignment, transfer, delegation or other disposition and (if this
Management Agreement is in whole assigned, transferred, delegated or disposed to
such an Affiliate) signs a joinder agreement and is bound hereunder, but no such
assignment, transfer, delegation or other disposition shall relieve Manager of
any of its obligations hereunder, and (ii) this Section 8.3 shall not restrict a
Change of Control of Behringer Harvard Holdings, LLC.  Any purported assignment,
transfer, delegation or disposition by Manager in violation of this Section 8.3
shall be null and void ab initio.

 

(b)           Notwithstanding Section 8.3(a), Manager may delegate partially or
in full its duties and rights under this Management Agreement to (i) a Person
who is not a member of the Behringer Group only with the prior written consent
of Owner or (ii) any Person listed on Schedule 8.3(a) attached hereto. Subject
to the foregoing, Owner acknowledges and agrees that any or all of the duties of
Manager as contained herein may be delegated pursuant to this Section 8.3(b) by
Manager and performed by a person or entity (“Submanager”) with whom Manager
contracts for the purpose of performing such duties. Subject to the foregoing,
Owner specifically grants Manager the authority to enter into such a contract
with a Submanager; provided, however, that, unless Owner otherwise agrees in
writing with such Submanager, Owner shall have no liability or responsibility to
any such Submanager for the payment of the Submanager’s fee or for reimbursement
to the Submanager of its expenses or to indemnify the Submanager in any manner
for any matter; and provided, further, however, that Manager shall require such
Submanager to agree, in the written agreement setting forth the duties and
obligations of such Submanager, to indemnify Owner for all Losses incurred by
Owner as a result of the willful misconduct or gross negligence of the
Submanager, except that such indemnity shall not be required to the extent that
Owner recovers insurance proceeds with respect to such matter. Any contract
entered into between Manager and a Submanager pursuant to this Section 8.3 shall
be consistent with the provisions of this Management Agreement, except to the
extent Owner otherwise specifically agrees in writing. This Management Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective permitted successors and permitted assigns.

 

8.4           Third Party Leasing Services. Manager acknowledges that Owner may
retain a third party to provide leasing services with respect to the Properties
and to compensate such third party for such leasing services. Owner shall have
the authority to enter into such a contract for leasing services with a third
party (a “Third Party Leasing Agreement”); provided that Manager

 

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shall have no liability or responsibility to Owner for any of the duties and
obligations undertaken by such party, and Owner agrees to indemnify Manager for
all Losses incurred by Manager as a result of acts of such third party pursuant
to the Third Party Leasing Agreement. To the extent that leasing services are
specifically required to be performed by a third party pursuant to such Third
Party Leasing Agreement, Manager shall have no obligation to perform such
leasing services and Owner shall have no obligation to Manager for leasing fees
pursuant to Section 5.3 hereof.

 

8.5           Third Party Management Services. Manager acknowledges that from
time to time Owner may acquire interests in Properties in which Owner does not
control the determination of the party that is engaged to provide property
management and other services to be provided by Manager with respect to all
Properties acquired by Owner hereunder. Upon prior written notice to Manager,
Owner shall have the authority to acquire such non-controlling interests in
Properties for which a third party provides some or all of the services
otherwise required to be performed by Manager hereunder (a “Third Party
Management Agreement”); provided that (a) Manager shall have no liability or
responsibility to Owner for any of the duties and obligations undertaken by such
third party, and (b) Owner agrees to indemnify Manager for all Losses incurred
by Manager as a result of the acts of such third party pursuant to the Third
Party Management Agreement, except to the extent such Losses result from the
gross negligence or willful misconduct of Manager. To the extent that property
management and other services are specifically required to be performed by a
third party pursuant to such Third Party Management Agreement, Manager shall
have no obligation to perform such services and Owner shall have no obligation
to Manager for compensation for such services pursuant to Article V hereof.

 

8.6           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
Management Agreement shall not constitute a waiver thereof for the future.

 

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

 

8.8           Headings. The titles and headings of sections and subsections
contained in this Management Agreement are for convenience only, and they
neither form a part of this Management Agreement nor are they to be used in the
construction or interpretation hereof.

 

8.9           Counterparts. This Management Agreement may be executed with
counterpart signature pages or in multiple counterparts, each of which shall be
deemed to be an original as against any party whose signature appears thereon,
and all of which shall together constitute one and the same instrument.  This
Management Agreement shall become binding when one or more counterparts hereof,
individually or taken together, shall bear the signatures of all of the parties
reflected hereon as the signatories.

 

8.10         Facsimile Signatures. A facsimile or other electronic signature on
the signature pages hereto shall for all purposes be deemed an original and
shall bind the signor as if such facsimile or other electronic signature were an
original.

 

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8.11         Entire Agreement. Subject to express references to past practices
contained herein, this Management Agreement contains the entire agreement and
understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior agreements, understandings, inducements and
conditions, express or implied, oral or written, of any nature whatsoever with
respect to the subject matter hereof.

 

8.12         Disputes. If there shall be a dispute between Owner and Manager
relating to this Management Agreement resulting in litigation, the prevailing
party in such litigation shall be entitled to recover from the other party to
such litigation such amount as the court shall fix as reasonable attorneys’
fees.

 

8.13         Activities of Manager. The obligations of Manager pursuant to the
terms and provisions of this Management Agreement shall not be construed to
preclude Manager from engaging in other activities or business ventures, whether
or not such other activities or ventures are in competition with Owner or the
business of Owner.

 

8.14         Independent Contractor. Manager and Owner shall not be construed as
joint venturers or partners of each other pursuant to this Management Agreement,
and neither shall have the power to bind or obligate the other except as set
forth herein. In all respects, the status of Manager to Owner under this
Management Agreement is that of an independent contractor.

 

8.15         No Third-Party Rights. Nothing expressed or referred to in this
Management Agreement will be construed to give any Person other than the parties
to this Management Agreement any legal or equitable right, remedy or claim under
or with respect to this Management Agreement or any provision of this Management
Agreement, except such rights as shall inure to a successor or permitted
assignee pursuant to Section 8.3.

 

8.16         Ownership of Proprietary Property. The Manager retains ownership of
and reserves all Intellectual Property Rights in the Proprietary Property. To
the extent that Owner has or obtains any claim to any right, title or interest
in the Proprietary Property, including without limitation in any suggestions,
enhancements or contributions that Owner may provide regarding the Proprietary
Property, Owner hereby assigns and transfers exclusively to the Manager all
right, title and interest, including without limitation all Intellectual
Property Rights, free and clear of any liens, encumbrances or licenses in favor
of Owner or any other party, in and to the Proprietary Property. In addition, at
the Manager’s expense, Owner will perform any acts that may be deemed desirable
by the Manager to evidence more fully the transfer of ownership of right, title
and interest in the Proprietary Property to the Manager, including but not
limited to the execution of any instruments or documents now or hereafter
requested by the Manager to perfect, defend or confirm the assignment described
herein, in a form determined by the Manager.

 

8.17         Non-Solicitation. During the period commencing on the Original
Effective Date and ending one year following the termination of this Management
Agreement, BH REIT and BH OP shall not, without the Manager’s prior written
consent, directly or indirectly, (i) solicit or encourage any person to leave
the employment or other service of the Manager, or (ii) hire, on behalf of
BH REIT or BH OP or any other person or entity, any person who has left the
employment within the one year period following the termination of that person’s
employment

 

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the Manager. During the period commencing on the Original Effective Date through
and ending one year following the termination of this Management Agreement,
BH REIT and BH OP will not, whether for its or their own account or for the
account of any other person, firm, corporation or other business organization,
intentionally interfere with the relationship of the Manager with, or endeavor
to entice away from the Manager, any person who during the term of the
Management Agreement is, or during the preceding one-year period, was a
co-investor, co-developer, joint venturer or other customer of the Manager.

 

8.18         Right of First Refusal. Manager shall have a right of first refusal
to manage all Properties acquired by Owner during the term of this Management
Agreement on the terms and conditions set forth in this Management Agreement.
Subject to the provisions of Section 8.5 regarding Owner’s acquisition of
non-controlling interests in Properties, prior to the time Owner acquires each
Property, Owner shall notify Manager of such acquisition and offer Manager the
right to manage such Property in accordance with this Management Agreement,
including, for the avoidance of doubt, for the compensation set forth in
Article V. Manager shall notify Owner, within ten (10) days of its receipt of
such notice from Manager and all information reasonably requested by Manager
with respect to the proposed Property, whether it accepts such offer. If Manager
fails to give such a notice within such 10-day period, then Owner shall have the
right to enter into an agreement with a third party to provide such services, on
substantially the same terms as this Management Agreement or any other terms
that are not more favorable to such third party.

 

8.19         Licensing Claims. Owner shall not (i) bring or cause to be brought
or support any Licensing Claim or (ii) seek to avoid the observance or
performance of any of the terms to be observed or performed under this
Management Agreement (including, for the avoidance of doubt, Owner’s past or
future payment to Manager of fees and expenses under this Management Agreement)
as result of or with respect to any Licensing Claim. For the avoidance of doubt,
Owner may respond to requests for information from any Governmental Authority
with respect to Licensing Claims. Owner shall not have any indemnification
obligations under Section 6.5 or otherwise with respect to Licensing Claims or
any Losses arising from Licensing Claims.

 

8.20         Tax Cooperation. Each of BH REIT and BH OP, on the one hand, and
Manager, on the other hand, shall provide the other with such assistance and
non-privileged information relating to their respective businesses as may
reasonably be requested in connection with the preparation of any Tax Return or
the performance of any audit, examination or any other proceeding by any
Governmental Authority, whether conducted in a judicial or administrative forum;
provided, however, that the requesting party shall bear all reasonable costs and
expenses associated with such request.

 

8.21         Insurance Premium Allocation. So long as Manager or a member of the
Behringer Group maintains property insurance and general liability insurance
with respect to the Properties, a portion of the premium of such policy shall be
allocated to (and paid for by) BH REIT consistent with the allocation of the
premium on the respective type of policy in effect as of the date hereof with
changes as may be mutually agreed upon in writing by the parties from to time.
BH REIT and Manager acknowledge that the premium allocation for the current
policy period under all such policies has been agreed upon.

 

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8.22         Abandonment of Property. Subject to this Section 8.22, Owner may
abandon or cease funding an operating shortfall with respect to a Property.
Owner shall provide Manager 30 days advance written notice of its intention to
abandon a Property or cease funding operating shortfalls with respect to a
Property. With 30 days advance written notice, Owner may request that Manager
cease performing some or all services under this Management Agreement with
respect to such Property during the period of such abandonment or cessation of
funding. Manager shall thereupon (i) perform only the remaining services (if
any) contemplated by this Management Agreement, requested by Owner, but Manager
may continue to perform any services (at the expense of Owner) required by Law,
and (ii) incur expenses only in the performance of such remaining services (if
any) with respect to such Property during the period of such abandonment or
cessation of funding. For the avoidance of doubt, the rights of the Manager
under this Management Agreement with respect to such Property (including as to
Management Fees, Oversight Fees and expense reimbursements) shall not be
altered, amended or modified as a result of any such abandonment or funding
cessation.

 

8.23         No Presumption Against Drafter. Each of the parties has jointly
participated in the negotiation and drafting of this Management Agreement. In
the event of an ambiguity or a question of intent or interpretation arises, this
Management Agreement shall be construed as if drafted jointly by each of the
parties, and no presumptions or burdens of proof shall arise favoring any party
by virtue of the authorship of any of the provisions of this Management
Agreement.

 

ARTICLE IX.
BUYOUT OPTION

 

9.1           Buyout Option. On or after June 30, 2015 and prior to the Existing
Expiration Date, BH REIT has the right to exercise the Buyout Option, on the
terms and subject to the conditions of this Management Agreement. For the
avoidance of doubt, the Buyout Option may not be consummated prior to June 30,
2015, notwithstanding the delivery of the Buyout Notice prior to such date.

 

9.2           Buyout Notice. No less than 90 and no more than 180 days prior to
the proposed date of the Buyout Closing, BH REIT shall deliver to Manager a
notice of its irrevocable intent to exercise the Buyout Option in substantially
the form set forth as Exhibit A hereto (such notice, the “Buyout Notice” and the
date such Buyout Notice is delivered to Manager, the “Buyout Notice Date”),
which Buyout Notice shall include, among other things: (a) the representations
and warranties set forth in Article I of the Buyout Notice and (b) a proposed
date for the Buyout Closing.

 

9.3           Buyout Closing.

 

(a)           Buyout Closing. The closing of the Buyout (the “Buyout Closing”)
shall occur on the date specified in the Buyout Notice, or on such other date as
BH REIT and Manager mutually agree (the “Buyout Closing Date”), at the offices
of Behringer Harvard Holdings, 15601 Dallas Parkway, Addison, Texas, or at such
other place as BH REIT and Manager may mutually agree. The Buyout Closing shall
be deemed effective for all purposes at the open of business on the Buyout
Closing Date.

 

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(b)           Conditions to Buyout Closing. The obligations of Manager and BH
REIT to consummate the Buyout shall be subject solely to those conditions set
forth in Section 9.4 hereto.

 

(c)           Final Buyout Consideration Calculation. At least twenty (20)
Business Days prior to the Buyout Closing, Manager shall deliver to BH REIT a
schedule setting forth its calculation of the Buyout Consideration (such
schedule, the “Buyout Consideration Schedule”).

 

(d)           Manager Purchased Assets. Upon the terms and subject to the
conditions of this Article IX, BH REIT shall acquire from Manager and Manager
shall convey, transfer, assign and deliver, or cause to be conveyed,
transferred, assigned and delivered, to BH REIT (or its designee) at the Buyout
Closing, all of Manager’s right, title and interest in, to and under the assets
and Agreements (which shall be conveyed, if any, on an “as is, where is” basis)
expressly set forth in the schedule of assets and Agreements delivered by
Manager at least twenty (20) Business Days prior to the Buyout Closing (such
schedule, the “Manager Purchased Assets Schedule” and such assets and
Agreements, the “Manager Purchased Assets”).  The Manager Purchased Assets
Schedule shall be prepared in good faith by Manager and shall include such
assets as BH REIT and Manager shall mutually agree at the time of the Buyout.
For the avoidance of doubt, BH REIT and BH OP shall not assume any liabilities
of Manager arising under the Manager Purchased Assets, other than liabilities
under any Contracts to be assumed by Owner pursuant to Article VII.

 

(e)           Waiver of Certain Non-Solicit/Non-Hire Provisions.

 

(i)            At the Buyout Closing, Manager shall be deemed to have
irrevocably waived the non-solicitation and non-hire provisions contained in
Section 8.17 (Non-Solicitation) of this Management Agreement with respect to
each employee (each, a “Manager Specified Employee”) set forth in a schedule
prepared in good faith and delivered by Manager to BH REIT at least ten
(10) Business Days prior to the Buyout Closing (the “Manager Specified Employees
Schedule”). The Manager Specified Employees Schedule shall include (A) each
employee of the Behringer Group performing property management services for BH
REIT on-site at Properties under this Management Agreement as of the Buyout
Closing and (B) such other employees of the Behringer Group performing property
management services under this Management Agreement as of the Buyout Closing
that occupy the functions or have the titles set forth in Exhibit C hereto. It
is the intention of BH REIT and the Manager that the Manager Specified Employees
Schedule only set forth employees performing property management services
primarily or exclusively for Owner. For avoidance of doubt, the Manager
Specified Employees Schedule shall not include any employee of the Behringer
Group performing services under the Administrative Services Agreement, any
Support Services Agreement, or any other Ancillary Agreement (as defined in the
Master Modification Agreement).

 

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(ii)           At the Buyout Closing, Manager shall be deemed to have
irrevocably waived or cause to be waived any non-solicitation, non-hire,
non-compete or other similar provisions contained in any Agreement between
Manager (or an Affiliate of Manager) and any Manager Specified Employee to allow
such Manager Specified Employee to work for BH REIT.

 

(iii)          Except as contemplated by Section 9.3(e)(i) and
Section 9.3(e)(ii) above, neither Manager nor any other member of the Behringer
Group (A) waives any right under any non-solicit or non-hire provision of this
Management Agreement, the Administrative Services Agreement, any Support
Services Agreement, or any other Agreement, (B) waives any such rights with
respect to any employee who is not a Manager Specified Employee, or (C) waives
any non-solicitation, non-hire, non-compete or other similar provisions
contained in any Agreement between any of them and any Manager Specified
Employee, and all such Agreements remain in full force and effect without
limitation, including with respect to prohibition or limitation of the
solicitation of employees (and other covered service providers) of the Behringer
Group who are not Manager Specified Employees and are covered by such a
provision.

 

(f)            Buyout Closing Payments.

 

(i)            Buyout Consideration Payments. At the Buyout Closing, in
consideration for the agreements, covenants and obligations of Manager in
connection with the Buyout, BH REIT shall pay Manager an amount equal to the
Buyout Consideration in cash by wire transfer of immediately available funds to
the bank account as shall be designated in writing by Manager at least two
Business Days prior to the Buyout Closing Date.

 

(ii)           Pre-Closing Manager Fees and Expenses. At least three
(3) Business Days prior to the Buyout Closing Date, Manager shall deliver to
BH REIT a schedule (the “Pre-Closing Manager Fees and Expenses Schedule”)
setting forth Manager’s good faith estimate of the amount of all fees and
expenses due from BH REIT to Manager for all services rendered through the
Buyout Closing under this Management Agreement or otherwise due to Manager with
respect to the period before the Buyout Closing under this Management Agreement
(such fees and expenses, the “Manager Fees and Expenses” and the amount of such
estimate, the “Estimated Manager Fees and Expenses”). At the Buyout Closing, BH
REIT shall pay the Estimated Manager Fees and Expenses to Manager in cash by
wire transfer of immediately available funds to the bank account as shall be
designated in writing by Manager. The payment of such Estimated Manager Fees and
Expenses is subject to adjustment as set forth in Section 9.5.

 

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9.4           Conditions to Buyout Closing.

 

(a)           Conditions to Manager’s Obligations. The obligation of Manager to
consummate the Buyout is subject to the satisfaction of the following conditions
as of the Buyout Closing, any of which may be waived in writing exclusively by
Manager:

 

(i)            Representations of BH REIT. The representations and warranties of
BH REIT set forth in the Buyout Notice shall be true and correct in all material
respects both when made and at and as of the Buyout Closing as though then made.

 

(ii)           No Proceedings. No Judgment of any court or Governmental
Authority of competent jurisdiction nor any applicable Law shall be in effect
which would (a) prohibit the consummation of the Buyout, (b) declare unlawful
the Buyout, or (c) cause such Buyout to be rescinded.

 

(iii)          Receipt of Payments; No Dispute.

 

(A)          BH REIT shall have paid and Manager shall have received in full
(upon the Buyout Closing) the payments contemplated by Section 9.3(f);

 

(B)           there shall be no outstanding payment due and payable by BH REIT
to any member of the Behringer Group under the Master Modification Agreement or
any Ancillary Agreement (as defined in the Master Modification Agreement); and

 

(C)           no dispute shall be ongoing between BH REIT and Manager regarding
the payment of any fees, the reimbursement of any expenses or any other payments
under this Management Agreement.

 

(iv)          Other Buyout Closing Deliverables. BH REIT shall have delivered or
caused to be delivered to Manager on or before the Buyout Closing Date the
following:

 

(A)          instruments of authority from the Board of Directors of BH REIT, or
an authorized committee thereof, in form and substance reasonably acceptable to
Manager, authorizing the Buyout; and

 

(B)           a certificate by the Principal Executive Officer or Principal
Financial Officer of BH REIT, in his or her capacity as such, that the
conditions of the Buyout Closing set forth in this Section 9.4(a) have been met,
in form and substance reasonably satisfactory to Manager.

 

(b)           Conditions to BH REIT’s Obligations. The obligation of BH REIT to
consummate the Buyout is subject to the satisfaction of the following conditions
as of the Buyout Closing, any of which may be waived in writing exclusively by
BH REIT:

 

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(i)            Representations of Manager. Manager shall deliver to BH REIT at
the Buyout Closing representations and warranties in substantially the form set
forth as Exhibit B to this Management Agreement (the “Manager Representations
Letter”), which representations and warranties shall be true and correct in all
respects as of the Buyout Closing.

 

(ii)           No Proceedings. No Judgment of any court or Governmental
Authority of competent jurisdiction nor any applicable Law shall be in effect
which would (A) prohibit the consummation of the Buyout, (B) declare unlawful
the Buyout, or (C) cause such Buyout to be rescinded.

 

(iii)          Other Buyout Closing Deliverables. Manager shall have delivered
or caused to be delivered to BH REIT on or before the applicable date specified
elsewhere in this Article IX the following:

 

(A)          the Manager Specified Employees Schedule;

 

(B)           the Severance Schedule;

 

(C)           the Buyout Consideration Schedule;

 

(D)          the Manager Purchased Assets Schedule;

 

(E)           the Pre-Closing Manager Fees and Expenses Schedule;

 

(F)           prior to the Buyout Closing, instruments of authority from
Manager, in form and substance reasonably acceptable to BH REIT, authorizing the
Buyout;

 

(G)           (F)           a certificate by a senior executive officer of
Manager, in his or her capacity as such, that the conditions of the Buyout
Closing set forth in Section 9.4(a) have been met, in form and substance
reasonably satisfactory to BH REIT.

 

9.5           Post-Closing Manager Fees and Expenses Adjustment.

 

(a)           Preparation of Final Manager Fees and Expenses Statement. As soon
as practicable after the last day of the next calendar quarter of BH REIT after
the Buyout Closing Date (the last day in such quarter, the “Adjustment Date”),
but in no event later than forty-five (45) days after the Adjustment Date,
Manager shall prepare in good faith and deliver to BH REIT a final statement
(the “Final Manager Fees and Expenses Statement”) calculating the Manager Fees
and Expenses for all services rendered through the Buyout Closing under this
Management Agreement or otherwise due to Manager with respect to the period
before the Buyout Closing under this Management Agreement (the “Final Manager
Fees and Expenses Amount”). BH REIT shall have the right to dispute the Final
Manager Fees and Expenses Statement and the calculation of the Final Manager
Fees and Expenses Amount. Each party shall make available to the other party
such

 

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books, records and personnel as shall be reasonably necessary for the other
party in connection with the matters contained in this Section 9.5(a).

 

(b)           Post-Closing Manager Fees and Expenses Payment. If the Final
Manager Fees and Expenses Amount exceeds the Estimated Manager Fees and
Expenses, then within five (5) Business Days of the receipt of the Final Manager
Fees and Expenses Statement, BH REIT shall pay the amount of such difference to
Manager in cash by wire transfer of immediately available funds to the bank
account as shall be designated in writing by Manager. If the Estimated Manager
Fees and Expenses exceeds the Final Manager Fees and Expenses Amount, then
within five (5) Business Days of the delivery of the Final Manager Fees and
Expenses Statement, Manager shall pay the amount of such difference to BH REIT
in cash by wire transfer of immediately available funds to the bank account as
shall be designated in writing by BH REIT.

 

9.6           Manager Specified Employee Matters.

 

(a)           Employees and Offers of Employment. Effective as of the Buyout
Closing, BH REIT shall offer employment to the Manager Specified Employees on
the terms and subject to the conditions of this Article IX and the other terms
and conditions determined by the Compensation Committee of the Board of
Directors of BH REIT consistent with this Article IX. The Manager Specified
Employees who accept and commence employment on or after the Buyout Closing with
BH REIT are hereinafter collectively referred to as the “Transferred Manager
Employees.” For the period commencing on the Buyout Closing Date and ending on
the December 31 next following the one year anniversary of the Buyout Closing
Date, such Transferred Manager Employees shall receive substantially similar (or
more beneficial) base salaries and cash bonus opportunities as received
immediately prior to the Buyout Closing Date. Further, BH REIT hereby assumes,
as of the Buyout Closing, all Liabilities of Transferred Manager Employees
(including the employment and termination thereof) arising on and after the
Buyout Closing Date in connection with their employment by BH REIT. Except for
BH REIT’s indemnification for PTO Liabilities pursuant to Section 9.6(c) and
reimbursement for severance benefits as provided in Section 9.6(d), BH REIT does
not assume, and shall not be liable or responsible for, any Liabilities with
respect to any Manager Specified Employee who does not become a Transferred
Manager Employee (each, a “Non-Hired Manager Specified Employee”) or any other
employee of the Behringer Group.

 

(b)           “At Will” Employment. Subject to applicable Law and the terms of
any Agreement between a Transferred Manager Employee and BH REIT, each
Transferred Manager Employee shall be, upon accept and commencement of
employment with BH REIT, an “at will” employee of BH REIT, and nothing in this
Article IX shall create a contract of employment between (i) BH REIT or any of
its Affiliates and (ii) a Transferred Manager Employee, nor limit the right of
BH REIT and its Affiliates to terminate the employment of any Transferred
Manager Employee at any time, for any reason, with or without cause, and without
notice; provided that nothing in this Section 9.6(b) shall limit the other
obligations of BH REIT as provided in this Article IX.

 

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(c)           Paid Time Off; Other Leave. For the twelve (12) month period
following the Buyout Closing Date, BH REIT shall provide to each Transferred
Manager Employee paid time off, vacation, and other accrued leaves of absence
benefits (“PTO Benefits”) substantially comparable in the aggregate as those
provided by the Behringer Group immediately prior to the Buyout Closing, and BH
REIT shall give each Transferred Manager Employee credit for the remaining PTO
Benefits accrued by such Transferred Manager Employee during his or her
employment with the Behringer Group prior to the Buyout Closing (that has not
been forfeited or lost as of the Buyout Closing), but BH REIT may subject such
accrued PTO Benefits to any accrual caps and use limitations (such as a “use it
or lose it” policy) that are comparable to the accrual caps and use limitations
under the comparable Behringer Group policies for PTO Benefits, as BH REIT may
reasonably determine. To the extent that any member of the Behringer Group
incurs any Damages with respect to any Liabilities for PTO Benefits with respect
to any Manager Specified Employee (collectively, the “PTO Liabilities”), BH REIT
shall indemnify such member of the Behringer Group with respect to such Damages.

 

(d)           Severance Obligations.

 

(i)            From the Buyout Closing and for the twelve (12) month period
following the Buyout Closing Date, BH REIT shall provide severance benefits
substantially comparable to those which would be applicable using the formula
set forth in the severance schedule attached hereto (the “Severance Schedule”),
to any Transferred Manager Employee who is involuntarily terminated by BH REIT
under circumstances that would entitle the Transferred Manager Employee to
severance benefits had his or her employment been terminated by a member of the
Behringer Group immediately prior to the Buyout Closing (for example, BH REIT
shall be under no obligation to provide severance benefits to any Transferred
Manager Employee who has been terminated for cause). If BH REIT or any of its
Affiliates seeks a release from any Transferred Manager Employee with respect to
Claims of such Transferred Employee against BH REIT or its Affiliates (an
“Employee Release”), BH REIT shall use commercially reasonable efforts to obtain
a release, releasing (among other Persons) the Behringer Indemnified Parties (as
defined in the Master Modification Agreement) of all Claims of such Transferred
Manager Employee arising during his or her term of service (as an employee or
otherwise) with the Behringer Group prior to the Buyout Closing on substantially
similar terms as such Employee Release.

 

(ii)           BH REIT shall reimburse the applicable member of the Behringer
Group for any severance benefits paid up to the amount determined using the
formula set forth in the Severance Schedule, to any Non-Hired Manager Specified
Employee who has his or her employment terminated by the applicable member of
the Behringer Group within ninety (90) days of the Buyout Closing Date.

 

(e)           Employee Benefit Plans.

 

(i)            Effective as of the Buyout Closing Date, Transferred Manager
Employees shall cease participation in any and all Behringer Plans and shall be

 

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eligible to participate in employee benefit and fringe benefit plans maintained
by BH REIT or one of its Affiliates (the “BH REIT Plans”). Effective as of the
Buyout Closing Date and continuing for a period ending on the December 31 next
following the one year anniversary of the Buyout Closing Date, BH REIT shall
provide to the Transferred Manager Employees through BH REIT Plans, employee
benefits and fringe benefits which are, in the aggregate, substantially
comparable to the employee benefits and fringe benefits provided to such
Transferred Manager Employees under the Behringer Plans immediately prior to the
Buyout Closing Date.

 

(ii)           Following the Buyout Closing Date, (A) each Transferred Manager
Employee shall receive credit for all purposes (including credit for
eligibility, benefit accrual and for vesting) under the BH REIT Plans for years
of service with the Behringer Group; provided, however, that with respect to any
credit for benefit accruals under any BH REIT Plans, there shall be no
duplication of benefits or accruals under the employee benefit plans or programs
of BH REIT and those of the Behringer Group (for example, with respect to
employer contributions under a BH REIT 401(k) Plan), and (B) BH REIT shall cause
any and all pre-existing condition limitations, eligibility waiting periods and
evidence of insurability requirements under any BH REIT Plans that are group
health plans in which such Transferred Manager Employees and their eligible
dependents shall participate to be waived (but only to the extent that such
Transferred Manager Employees would be covered under the applicable group health
plan of the Behringer Group) and shall provide credit, during the applicable
plan year, for any co-payments and deductibles prior to the Buyout Closing for
purposes of satisfying any applicable deductible, out-of-pocket or similar
requirements under any such plans that may apply after the Buyout Closing. It is
the intention of the parties that the Transferred Manager Employees and their
eligible dependents be placed in no worse position (as employees of BH REIT)
than if they had remained participants in the group health plans of the
Behringer Group. Manager and BH REIT Agree to work together in good faith
between the Buyout Notice Date and the Buyout Closing Date to ensure the orderly
transition of the Transferred Manager Employees from Behringer Plans, including
401(k), flexible spending account, and group health plans, to corresponding
BH REIT Plans.

 

(iii)          As of the Buyout Closing, (A) BH REIT hereby assumes all
obligations and Liabilities under the Consolidated Omnibus Budget Reconciliation
Act of 1985 (“COBRA”) for each Transferred Manager Employee (and his/her
dependents and beneficiaries) and (B) no member of the Behringer Group shall
have any Liabilities under COBRA with respect to such Transferred Manager
Employees (and their dependents and beneficiaries).

 

(f)            No Third Party Beneficiaries. No provision of this Section 9.6
shall create any third party beneficiary or other rights in any employee or
former or future employee (including any beneficiary or dependent thereof) of
the Behringer Group or BH REIT or any of its Affiliates (including the
Transferred Manager Employees) in respect of employment, continued employment
(or resumed employment), compensation, benefits,

 

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or severance, and no provision of this Section 9.6 shall create any such rights
in any such Persons in respect of any benefits that may be provided, directly or
indirectly, under any Behringer Plan or any plan or arrangement which may be
established by BH REIT or any of its Affiliates. No provision of this Management
Agreement is intended as, nor shall any provision of this Management Agreement
constitute, the establishment, amendment, or modification of, or supplement to,
any employee benefit plan subject to ERISA, any other Behringer Plan or BH REIT
Plan. No provision of this Management Agreement shall constitute a limitation on
the rights of Behringer Group, BH REIT or their respective Affiliate to
establish, amend, modify, supplement or terminate after the Buyout Closing Date
any such plans or arrangements.

 

9.7           Buyout Option Termination. If this Management Agreement is
terminated pursuant to Article VII prior to Buyout Closing, the Buyout Option
shall terminate automatically and the Buyout shall not be consummated.

 

9.8           Survival. The covenants and agreements under this Management
Agreement to be performed after the Buyout Closing (including, for the avoidance
of doubt, the obligations pursuant to Sections 7.2 and 7.3) shall not expire
until all obligations have been fully discharged with respect thereto. The
representations and warranties of the parties with respect to the Buyout Option
and the provisions of Section 9.9(c) shall survive until the expiration of the
applicable statute of limitations.

 

9.9           Miscellaneous Buyout Provisions.

 

(a)           Non-Assignment. The Buyout Option is a contractual right under
this Management Agreement and is granted solely to BH REIT and may not be
assigned to any other Person separate and apart from this Management Agreement;
provided, that any assignment of this Management Agreement (whether voluntarily
or involuntarily, directly or indirectly, by operation of law, merger, sale of
stock, sale of assets or otherwise) by Owner without the prior written consent
of Manager shall result in the automatic termination of this Article IX;
provided further that a Change of Control of Owner shall not automatically
terminate this Article IX. Any purported assignment, transfer, delegation or
disposition by Owner of Article IX in violation of this Section 9.9 shall be
null and void ab initio (provided, that for the purposes of this Article IX
only, all references to “50%” contained in the definition of “Change of Control”
set forth in Section 1.22 shall be deemed to be references to “25%”).

 

(b)           Further Assurances. The parties hereto shall use their
commercially reasonable efforts to do and perform or cause to be done and
performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments or documents as any other party
may reasonably request in order to carry out the intent and purposes of this
Article IX and the consummation of the transactions contemplated hereby,
including the Buyout.

 

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(c)           LIMITATIONS ON REPRESENTATIONS AND WARRANTIES.

 

(i)            BH REIT HEREBY ACKNOWLEDGES THAT, EXCEPT TO THE EXTENT
SPECIFICALLY STATED IN REPRESENTATIONS AND WARRANTIES ACTUALLY DELIVERED BY
MANAGER TO BH REIT PURSUANT TO THE REPRESENTATIONS LETTER, MANAGER MAKES NO
REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, AT LAW OR IN
EQUITY, IN CONNECTION WITH OR WITH RESPECT TO THE SUBJECT MATTER OF THIS
MANAGEMENT AGREEMENT OR IN RESPECT OF ANY OF MANAGER, THE BEHRINGER GROUP, THEIR
RESPECTIVE EMPLOYEES, THE MANAGEMENT AGREEMENT OR ANY AGREEMENT BETWEEN ANY
MEMBER OF THE BEHRINGER GROUP (ON THE ONE HAND) AND BH REIT OR ITS AFFILIATES
(ON THE OTHER HAND) OR THE SERVICES PROVIDED THEREUNDER, OR WITH RESPECT TO ANY
INFORMATION PROVIDED OR MADE AVAILABLE TO BH REIT OR ITS DIRECTORS, OFFICERS,
EMPLOYEES, REPRESENTATIVES OR AGENTS, INCLUDING WITH RESPECT TO ANY
REPRESENTATIONS OR WARRANTIES OF MERCHANTABILITY, FITNESS FOR ANY PARTICULAR
PURPOSE OR USE, TITLE, OR NON-INFRINGEMENT, AND THAT ALL OTHER REPRESENTATIONS
AND WARRANTIES ARE DISCLAIMED BY MANAGER. MANAGER ACKNOWLEDGES THAT EXCEPT AS
EXPRESSLY SET FORTH IN THIS MANAGEMENT AGREEMENT AND THE BUYOUT NOTICE, BH REIT
DOES NOT MAKE ANY REPRESENTATION OR WARRANTY OF ANY KIND, WHATSOEVER, EXPRESS OR
IMPLIED, AT LAW OR IN EQUITY, IN CONNECTION WITH OR WITH RESPECT TO THE SUBJECT
MATTER OF THIS MANAGEMENT AGREEMENT. FOR THE AVOIDANCE OF DOUBT, THE FOREGOING
SHALL NOT AFFECT OR OTHERWISE LIMIT ANY EXPRESS REPRESENTATIONS OR WARRANTIES
CONTAINED IN THE MASTER MODIFICATION AGREEMENT OR ANY OTHER AGREEMENT BETWEEN
ANY MEMBER OF THE BEHRINGER GROUP (ON THE ONE HAND) AND BH REIT OR ITS
AFFILIATES (ON THE OTHER HAND).

 

(ii)           MANAGER HEREBY ACKNOWLEDGES THAT, EXCEPT TO THE EXTENT
SPECIFICALLY STATED IN REPRESENTATIONS AND WARRANTIES ACTUALLY DELIVERED BY BH
REIT TO MANAGER PURSUANT TO THE BUYOUT NOTICE, BH REIT MAKES NO REPRESENTATION
OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN CONNECTION
WITH OR WITH RESPECT TO THE SUBJECT MATTER OF THIS MANAGEMENT AGREEMENT OR IN
RESPECT OF BH REIT, BH OP, THEIR RESPECTIVE EMPLOYEES, THE MANAGEMENT AGREEMENT
OR ANY AGREEMENT BETWEEN BH REIT OR ITS AFFILIATES (ON THE ONE HAND) AND ANY
MEMBER OF THE BEHRINGER GROUP (ON THE OTHER HAND) OR THE SERVICES PROVIDED
THEREUNDER, OR WITH RESPECT TO ANY INFORMATION PROVIDED OR MADE AVAILABLE TO
MANAGER OR ITS

 

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DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES OR AGENTS, INCLUDING WITH
RESPECT TO ANY REPRESENTATIONS OR WARRANTIES OF MERCHANTABILITY, FITNESS FOR ANY
PARTICULAR PURPOSE OR USE, TITLE, OR NON-INFRINGEMENT, AND THAT ALL OTHER
REPRESENTATIONS AND WARRANTIES ARE DISCLAIMED BY BH REIT. BH REIT ACKNOWLEDGE
THAT EXCEPT AS EXPRESSLY SET FORTH IN THIS MANAGEMENT AGREEMENT AND THE BUYOUT
NOTICE, MANAGER DOES NOT MAKE ANY REPRESENTATION OR WARRANTY OF ANY KIND,
WHATSOEVER, EXPRESS OR IMPLIED, AT LAW OR IN EQUITY, IN CONNECTION WITH OR WITH
RESPECT TO THE SUBJECT MATTER OF THIS MANAGEMENT AGREEMENT. FOR THE AVOIDANCE OF
DOUBT, THE FOREGOING SHALL NOT AFFECT OR OTHERWISE LIMIT ANY EXPRESS
REPRESENTATIONS OR WARRANTIES CONTAINED IN THE MASTER MODIFICATION AGREEMENT OR
ANY OTHER AGREEMENT BETWEEN BH REIT OR ITS AFFILIATES (ON THE ONE HAND) AND ANY
MEMBER OF THE BEHRINGER GROUP (ON THE OTHER HAND).

 

C-39

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IN WITNESS WHEREOF, the parties have executed this Sixth Amended and Restated
Property Management Agreement as of the date first above written.

 

 

BEHRINGER HARVARD REIT I, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

BEHRINGER HARVARD OPERATING
PARTNERSHIP I LP

 

 

 

By: BHR, Inc.

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

HPT MANAGEMENT SERVICES LLC

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

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EXHIBIT A

 

FORM OF BUYOUT NOTICE

 

                                   , 20

 

HPT Management Services LLC
15601 Dallas Parkway

Suite 600

Addison, Texas 75001

Attention: Chief Legal Officer

Fax: (214) 655-1610

 

Pursuant to Section 9.2 of that certain Sixth Amended and Restated Property
Management Agreement, dated as of August 31, 2012, by and among Behringer
Harvard REIT I, Inc., a Maryland corporation (“BH REIT”), Behringer Harvard
Operating Partnership I LLC, a Texas limited partnership (“BH OP”), and HPT
Management Services LLC, a Texas limited liability company (the “Manager”), as
amended, supplemented or otherwise modified from time to time (the “Management
Agreement”), BH REIT hereby provides this irrevocable notice (this “Buyout
Notice”) of its intent to exercise the Buyout Option. Capitalized terms used
herein and not otherwise defined shall have the respective meanings set forth in
the Management Agreement.

 

ARTICLE I.
REPRESENTATIONS AND WARRANTIES OF BH REIT

 

BH REIT represents and warrants to Manager as of the date hereof and as of the
Buyout Closing Date, as follows:

 

1.1           Organization and Qualification.

 

(a)           BH REIT is a corporation validly existing and in good standing
under the laws of the State of Maryland. BH REIT has the requisite corporate
power and authority to own, lease and operate its assets and properties and to
carry on its business as it is now being conducted except where the failure to
have such power and authority would not reasonably be expected to impact
BH REIT’s ability to perform its obligations under the Management Agreement and
the transactions contemplated thereby, including the Buyout.

 

(b)           BH OP is a limited partnership validly existing and in good
standing under the laws of the State of Texas. BH OP has the requisite
partnership power and authority to own, lease and operate its assets and
properties and to carry on its business as it is now being conducted except
where the failure to have such power and authority would not reasonably be
expected to impact BH REIT’s ability to perform its obligations under the
Management Agreement and the transactions contemplated thereby, including the
Buyout.

 

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1.2           Authority; No Conflicts; Approvals.

 

(a)           BH REIT has full corporate power and authority to consummate the
transactions contemplated by (i) Management Agreement and (ii) this Buyout
Notice and each other agreement, instrument or document executed and delivered
under the Management Agreement upon the Buyout Closing (each such document, a
“Ancillary Buyout Document”), including the Buyout. No provision of Law
applicable to BH REIT or the bylaws, charter or other organizational documents
or BH REIT (such documents, the “BH REIT Organizational Documents”) requires
approval by the stockholders of BH REIT of the transactions contemplated by the
Management Agreement, including the Buyout. The execution and delivery by
BH REIT of this Buyout Notice and each other Ancillary Buyout Document to which
it is a party, and the consummation by BH REIT of the transactions contemplated
hereby and thereby, including the Buyout, have been duly authorized by all
necessary corporate action and no other proceedings on the part of BH REIT are
necessary to authorize the execution and delivery of this Buyout Notice, the
Ancillary Buyout Documents and the consummation of the transactions contemplated
hereby and thereby. The Management Agreement and this Buyout Notice have been,
and each Ancillary Buyout Document to which BH REIT is a party when executed and
delivered will be, duly and validly executed and delivered by BH REIT and,
assuming the due authorization, execution and delivery hereof and thereof by the
other parties hereto or thereto, constitutes or will constitute, as applicable,
a legal, valid and binding agreement of BH REIT, enforceable against BH REIT in
accordance with its terms, except that such enforcement may be subject to
(i) bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting or relating to enforcement of creditors’ rights generally, and
(ii) general equitable principles.

 

(b)           BH OP has full partnership power and authority to consummate the
transactions contemplated by Management Agreement and the Ancillary Buyout
Documents, including the Buyout. No provision of Law applicable to BH OP or the
partnership agreement of BH OP requires approval by the limited partners of
BH OP of the transactions contemplated by the Management Agreement, including
the Buyout. The execution and delivery by BH OP of each Ancillary Buyout
Document to which it is a party, and the consummation by BH OP of the
transactions contemplated thereby, to the extent applicable to BH OP, have been
duly authorized by all necessary partnership action and no other proceedings on
the part of BH OP are necessary to authorize the execution and delivery of such
Ancillary Buyout Documents and the consummation of the applicable transactions
contemplated thereby. Each Ancillary Buyout Document to which BH OP is a party
when executed and delivered will be duly and validly executed and delivered by
BH OP and, assuming the due authorization, execution and delivery hereof and
thereof by the other parties hereto or thereto, constitutes or will constitute,
as applicable, a legal, valid and binding agreement of BH OP, enforceable
against BH OP in accordance with its terms, except that such enforcement may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar Laws affecting or relating to enforcement of creditors’ rights
generally, and (ii) general equitable principles.

 

(c)           To the knowledge of BH REIT and BH OP, no declaration, filing or
registration with, or notice to, or authorization, consent or approval of, any
Governmental

 

C-42

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Authority or any other Person is required to be made, obtained or given by or on
behalf of BH REIT or BH OP the absence of which would prevent the consummation
by BH REIT or BH OP of the transactions contemplated by this Buyout Notice or
the other Ancillary Buyout Documents, including the Buyout, or the performance
by BH REIT or BH OP of its obligations under the Management Agreement and the
Ancillary Buyout Documents to which it is party, other than such declarations,
filings, registrations, notices, authorizations, consents or approvals obtained
prior to the date hereof.

 

ARTICLE II.
PROPOSED CLOSING DATE

 

BH REIT proposes that the Buyout Closing occur on
                                          , 20   , or such other Business Day as
BH REIT and Manager shall agree, at the offices of Manager, or such other
location as BH REIT and Manager shall agree.

 

*  *  *  *  *  *

 

C-43

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Sincerely,

 

 

 

BEHRINGER HARVARD REIT I, INC.

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

CC (with attachments):

 

Behringer Harvard Holdings
15601 Dallas Parkway

Suite 600

Addison, Texas 75001
Attention:   Robert S. Aisner
Fax: (214) 655-1610

 

Behringer Harvard Holdings
15601 Dallas Parkway

Suite 600

Addison, Texas 75001
Attention:   Chief Legal Officer
Fax: (214) 655-1610

 

Jenner & Block LLP
353 N. Clark Street
Chicago, Illinois 60654
Attention:     Donald E. Batterson

Jeffrey R. Shuman

Fax: (312) 923-2707

 

C-44

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EXHIBIT B

 

FORM OF MANAGER REPRESENTATION LETTER

 

 

                                   , 20

 

Behringer Harvard REIT I, Inc.
15601 Dallas Parkway

Suite 600

Addison, Texas 75001
Attention: [                            ]
Fax: [                            ]

 

Pursuant to Section 9.4(b)(i) of that certain Sixth Amended and Restated
Property Management Agreement, dated as of August 31, 2012, by and among
Behringer Harvard REIT I, Inc., a Maryland corporation (“BH REIT”), Behringer
Harvard Operating Partnership I LP, a Texas limited partnership (“BH OP”), and
HPT Management Services LLC, a Texas limited liability company (the “Manager”),
as amended, supplemented or otherwise modified from time to time (the
“Management Agreement”), Manager hereby delivers this Manager Representations
Letter. Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in the Management Agreement. Manager hereby
represents and warrants to BH REIT, as of the Buyout Closing, as follows:

 

Section 1. Organization.

 

Manager is a limited liability company validly existing and in good standing
under the laws of its jurisdiction of organization.

 

Section 2. Authority; No Conflicts; Approvals.

 

(a)           Manager has full limited liability company power and authority to
consummate the transactions contemplated by (i) Management Agreement and the
Ancillary Buyout Document, including the Buyout. The execution and delivery by
Manager of each Ancillary Buyout Document to which it is a party, and the
consummation by Manager of the transactions contemplated thereby, including the
Buyout, have been duly authorized by all necessary limited liability company
action and no other proceedings on the part of Manager are necessary to
authorize the execution and delivery of the Ancillary Buyout Documents to which
it is a party and the consummation of the transactions contemplated thereby,
including the Buyout. The Management Agreement has been, and each Ancillary
Buyout Document to which Manager is a party when executed and delivered will be,
duly and validly executed and delivered by Manager and, assuming the due
authorization, execution and delivery hereof and thereof by the other parties
hereto or thereto, constitutes or will constitute, as applicable, a legal, valid
and binding agreement of Manager, enforceable against Manager in accordance with
its terms, except that such enforcement may be subject to (i) bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting or
relating to enforcement of creditors’ rights generally, and (ii) general
equitable principles.

 

C-45

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(b)           To Manager’s knowledge, no declaration, filing or registration
with, or notice to, or authorization, consent or approval of, any Governmental
Authority or any other Person is required to be made, obtained or given by or on
behalf of Manager the absence of which would prevent the consummation by Manager
of the transactions contemplated by the Ancillary Buyout Documents, including
the Buyout, or the performance by Manager of its obligations under the
Management Agreement and the Ancillary Buyout Documents to which it is party,
other than such declarations, filings, registrations, notices, authorizations,
consents or approvals obtained prior to the date hereof.

 

Section 3. Title to Manager Purchased Assets

 

Manager is the sole owner of and has good and valid title to each of the Manager
Purchased Assets, free and clear of all Liabilities (except for immaterial
Liabilities). At the Buyout Closing, Manager will deliver to BH REIT good and
valid title in and to the Manager Purchased Assets, free and clear of all
Liabilities (except for immaterial Liabilities).

 

C-46

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

 

 

Sincerely,

 

 

 

HPT MANAGEMENT SERVICES LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

CC:

 

Jenner & Block LLP
353 N. Clark Street
Chicago, Illinois 60654
Attention:     Donald E. Batterson

Jeffrey R. Shuman

Fax: (312) 923-2707

 

Proskauer Rose LLP

Eleven Times Square

(Eighth Avenue & 41st Street)

New York, New York 10036

Attention:     Peter M. Fass

James P. Gerkis

Fax: (212) 969-2900

 

Shefsky & Froelich, Ltd.
111 East Wacker

Suite 2800

Chicago, Illinois 60601
Attention: Michael J. Choate

Fax: (312) 275-7554

 

C-47

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EXHIBIT C

 

FUNCTIONS AND TITLES OF MANAGER SPECIFIED EMPLOYEES

 

Current Job Title

 

Current Job Descriptions

Senior Vice President – Commercial Property Management

 

Responsible for directing, coordinating and exercising functional authority for
the overall performance and profitability of the Property Management business on
a national level; establishing and maintaining policy and procedure manual;
leading preparation and presentation of annual property budgets; developing
overhead budgets, tracking variances and ensuring operational performance in
accordance with investment objectives; and overseeing key tenant relationships
and resolving critical impact tenant relations’ issues.

Vice President – Operations

 

Responsible for managing and supervising the commercial property and management
offices; setting measurable goals for the staff; assuring the timely preparation
of annual budgets and monthly reports; developing, implementing and assuring
adherence to company policies and procedures; supervising property management
regional staff; and working with asset management personnel to help make
properties run better.

Vice President – Engineering

 

Responsible for providing technical support to properties; managing operating
expenses; developing and implementing an auditable and consistent set of
engineering quality standards and processes; developing, implementing and
managing (1) an audit program to ensure property-level compliance, (2) a program
to ensure property-level code and regulatory compliance, and (3) a technical
skills enhancement program for all property-level engineering and maintenance
personnel; ensuring property-level compliance with OSHA required training;
assisting in scoping and negotiating national and regional agreements for major
services (e.g., water treatment); ensuring that all applicable properties
benchmark their energy consumption utilizing the online EPA Energy Star
Portfolio Manager tool; developing list of typical energy conserving capital
projects to be considered; developing minimum maintenance standrads for all
major equipment and system types; assisting in the development and review of
5-year capital plans; and review and comment on payback analysis, contract
proposals, bid analysis summaries, scope of work and request for proposals.

Vice President – Project Management

 

Responsible for assisting owner in defining development projects; managing the
project construction process from concept to completion; assist owner in
defining scope, size and type of project; assist in due diligence; preparing
requests for proposals; reviewing bids; negotiating contracts with consultants;
reviewing and recommending changes to construction documents; preparing

 

C-48

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and monitoring construction budgets; managing contract pricing negotiations;
orchestrating project meetings with consultants, construction team and local
city and building officials; monitoring contractor performance; managing tenant
improvement construction; preparing project reports as needed; reviewing project
Punch Lists, contractor record drawings, and contractor maintenance and
operations books; and review and process final application and certificate for
payments.

Director of Project Management

 

Responsible for ensuring project management policies and procedures are adhered
to for all portfolio properties called upon to serve, and recommending policy
enhancements when necessary; managing capital expenditure and tenant improvement
projects in the specified region as directed by the regional Vice President of
Property Management; tracking and preparing backup for billing of Project
Management Fees; assisting with due diligence assignments; and assisting
Property Management with the preparation of the annual and 5-10 year capital
budgets.

 

C-49

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EXHIBIT D

 

FORM OF ARTICLES SUPPLEMENTARY (SERIES A PREFERRED STOCK)

 

See attached.

 

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

 

FORM OF

ARTICLES SUPPLEMENTARY

BEHRINGER HARVARD REIT I, INC.

 

SERIES A PARTICIPATING, VOTING, CONVERTIBLE PREFERRED STOCK

($0.0001 PAR VALUE)

 

BEHRINGER HARVARD REIT I, INC., a Maryland corporation (the “Company”), hereby
certifies to the State Department of Assessments and Taxation of Maryland
pursuant to Section 2-208 of the Maryland General Corporation Law that:

 

FIRST:  Pursuant to authority expressly vested in the Board of Directors of the
Company (the “Board”) by Article V, Section 5.3 of the Ninth Articles of
Amendment and Restatement of the Company (the “Charter”), the Board has
classified 10,000 shares of the authorized but unissued preferred stock of the
Company, $0.0001 par value per share (“Preferred Stock”), as Series A
participating, voting, convertible preferred stock (the “Series A Preferred
Stock”) and the same hereby are established, and the issuance of such shares
authorized, such Series A Preferred Stock to have the preferences, conversion
and other rights, voting powers, restrictions, limitations as to dividends and
other distributions, qualifications and terms and conditions of redemption, as
follows, which, upon any restatement of the Charter, shall become part of
Article V of the Charter, with any necessary or appropriate renumbering or
relettering of the sections or subsections hereof:

 

Series A participating, voting, convertible preferred stock, $0.0001 par value
per share

 

The defined terms used in the following sections, other than those specifically
defined therein, shall have the meanings set forth in Section 8.

 

SECTION  1.          DESIGNATION AND NUMBER.  A series of Preferred Stock
designated as the “Series A participating, voting, convertible preferred stock”
is hereby established and the number of shares constituting the series shall be
10,000, which may be issued in fractions of a share.

 

SECTION  2.          DISTRIBUTION RIGHTS.  If the Company declares, pays or sets
apart for payment any dividend on any share of Common Stock (other than stock
dividends payable in shares of Common Stock), then at the time such dividend is
declared, paid or set apart, the Company shall simultaneously declare, pay or
set apart for payment a dividend on each issued and outstanding share of
Series A Preferred Stock, with payment to be in the same form as is being paid
to the holders of Common Stock and in an amount as if one share of Series A
Preferred Stock equaled one share of Common Stock.  Such dividend will be paid
to the holders of record of Series A Preferred Stock at the close of business on
the date specified by the Board and paid to such holders on the date specified
by the Board, which shall be on or prior to the payment date for the applicable
dividend on Common Stock.  If the holders of Series A Preferred Stock are
treated as receiving any amount as a consent dividend or as a deemed dividend,
for federal income tax purposes, the Company shall at such time declare cash
dividends to, and shall distribute to, the holders of Series A Preferred Stock
sufficient cash to pay tax (at an assumed combined federal and state rate of
50%) on the total of all dividends subject to tax to such holders (including any
taxable amount of the cash dividend required under this provision).

 

D-1

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

 

SECTION  3.          LIQUIDATION.  In the event of any liquidation, dissolution
or winding up of the Company, whether voluntary or involuntary, the holders of
Series A Preferred Stock shall be entitled to receive out of the assets of the
Company available for distribution to its stockholders, or there shall be set
apart out of such assets of the Company for the holders of Series A Preferred
Stock, whether from capital, surplus or earnings, before any distribution is
made to holders of shares of Junior Stock, liquidating distributions in an
amount equal to $10.00 per share (the “Liquidation Preference”).  The holders of
Series A Preferred Stock, upon liquidation, dissolution or winding up, shall not
be entitled to receive the Liquidation Preference until the liquidation
preference of all shares of Senior Stock shall have been paid in full or a sum
set apart sufficient to provide for such payment.  If, upon any liquidation,
dissolution or winding up of the Company, the amounts payable with respect to
the shares of the Series A Preferred Stock and any Parity Stock are insufficient
for payment to be made in full, the holders of shares of the Series A Preferred
Stock and the Parity Stock shall share ratably in any such distribution of
assets in proportion to the full respective preferential amounts to which they
are entitled.  After receipt of the full amount of the Liquidation Preference,
the holders of shares of the Series A Preferred Stock shall not be entitled to
any further participation in any distribution of assets by the Company upon
liquidation, dissolution or winding up.  For the purposes hereof, neither a
consolidation, nor a merger of the Company with another person, nor a sale or
transfer of all or part of its assets for cash or securities, shall be
considered a liquidation, dissolution or winding up of the Company.  In
determining whether a distribution (other than upon voluntary or involuntary
liquidation), by dividend, redemption or other acquisition of shares of stock of
the Company or otherwise, is permitted under the Maryland General Corporation
Law, amounts that would be needed, if the Company were to be dissolved at the
time of distribution, to satisfy the preferential rights upon dissolution of
holders of shares of the Series A Preferred Stock shall not be added to the
Company’s total liabilities.

 

SECTION  4.          VOTING RIGHTS.  The holders of shares of Series A Preferred
Stock shall have only the following voting rights:

 

(a)           Each share of Series A Preferred Stock shall entitle the holder
thereof to one (1) vote on all matters submitted to a vote of the holders of the
Series A Preferred Stock or the Common Stock.

 

(b)           Except as otherwise provided herein, the holders of shares of
Series A Preferred Stock and the holders of shares of Common Stock shall vote
together as a single class on all matters submitted to a vote of the holders of
Common Stock.

 

(c)           The affirmative vote of the Required Holders, voting together as a
single class for such purposes, shall be required for (i) the adoption of any
amendment, alteration or repeal of these Articles Supplementary and the terms of
the Series A Preferred Stock set forth herein, that adversely changes or has the
effect of adversely altering the preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends or other distributions or
qualifications of the shares of Series A Preferred Stock, or (ii) the adoption
of any amendment, alteration or repeal of any other provisions of the Charter
that materially adversely changes or has the effect of materially adversely
altering the preferences, conversion or other rights, voting powers,
restrictions, limitations as to dividends or other distributions or
qualifications of the shares of Series A Preferred Stock, (it being understood
that an increase in the number of

 

D-2

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directors on the Board is not, by itself, an adverse change referred to in the
foregoing clause (i) or (ii)).

 

SECTION  5.          AUTHORIZATION AND ISSUANCE OF OTHER SECURITIES.  The Board
shall not have the right to increase or decrease the number of shares that are
classified as Series A Preferred Stock or to authorize the issuance of or to
classify or reclassify any unissued shares of stock of the Company into,
additional shares of Series A Preferred Stock.

 

SECTION  6.          CONVERSION.

 

(a)           TRIGGERING EVENT.  All shares of Series A Preferred Stock then
outstanding will convert into Common Stock (i) automatically, in connection with
a Listing Event, (ii) automatically, upon a Change of Control, or
(iii) automatically, upon election by the Required Holders during the period
beginning on the Effective Date and ending at the close of business on the fifth
anniversary of the Effective Date (each a “Triggering Event”).

 

(b)           CONVERSION RATE.  Upon a Triggering Event, each share of Series A
Preferred Stock shall convert into shares of Common Stock at a rate equal to
(i) the Conversion Value Per Share of Series A Preferred Stock, divided by
(ii) the Conversion Common Stock Value (provided, however, that, for purposes of
this clause (ii) only, Estimated Per Share Value  shall be calculated in
Section 8(d)(i) assuming the conversion of all shares of Series A Preferred
Stock outstanding immediately prior to such Triggering Event, and assuming the
net asset value is not decreased by the Liquidation Preference referred to in
Section 6(c)(i)), in each case as applicable with respect to such Triggering
Event.

 

(c)           ESTIMATED PER SHARE VALUE.  The Company shall determine the
Estimated Per Share Value with respect to the Common Stock at least once per
calendar year and, if determined only once in any calendar year, such
determination must be made during the fourth quarter of 2012 and of each
subsequent year until the occurrence of a Triggering Event. In addition, the
Estimated Per Share Value shall be calculated, for the purposes of Sections
8(d)(i), 8(j)(i)(A)(2) and 8(j)(i)(B), on (i) a net asset value basis (i.e., net
of liabilities and, except as set forth in Section 6(b)(ii), net of the
aggregate Liquidation Preference that the then outstanding Series A Preferred
Stock would be entitled to receive in connection with a liquidation of the
Company), and (ii) except as set forth in Section 6(b)(ii), the assumption that
the Series A Preferred Stock is not outstanding.

 

The Company shall promptly publicly disclose each such Estimated Per Share Value
in a Form 8-K, by press release or otherwise.  The Required Holders may request
that the Company obtain an appraisal of the Estimated Per Share Value or the
Company may voluntarily obtain an appraisal of the Estimated Per Share Value
(1) with respect to any determination of the Estimated Per Share Value, if the
Company has not determined such Estimated Per Share Value using an independent
appraiser, and (2) if the Company has not determined the Estimated Per Share
Value using an independent appraiser during the six month period prior to the
Triggering Event.  In such event, each of the Company, on the one hand, and the
Required Holders, on the other hand, shall name one appraiser and the two named
appraisers shall promptly agree in good faith to the appointment of one other
appraiser, whose determination of such Estimated Per Share Value shall be final
and binding.  The cost of such appraisal shall be paid by the Company.

 

D-3

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(d)           ACCRUED AND UNPAID DIVIDENDS.  Upon conversion, holders of shares
of Series A Preferred Stock shall not be entitled to receive payment of any
declared, set apart or otherwise unpaid dividends with respect to the shares of
Series A Preferred Stock being converted, except with respect to any dividend
contemplated by the final sentence of Section 2.

 

(e)           CONVERSION PROCEDURE.

 

(i)            Conversion of the Series A Preferred Stock upon election of the
Required Holders pursuant to Section 6(a)(iii) shall be effected by delivery to
the Company by the Required Holders of a written notice stating the election of
such holders to convert the Series A Preferred Stock.  In the event the notice
shall specify any name or names other than that of the converting holder, the
notice shall be accompanied by documents confirming ownership, reflecting
compliance with the securities laws and, if applicable, payment of all transfer
taxes payable upon issuance of the shares of Common Stock in such name or
names.  Other than such taxes, the Company shall pay any and all issuance and
other taxes (excluding taxes based on income) that may be payable with respect
to the issuance and/or delivery of shares of Common Stock on conversion of
Series A Preferred Stock.  As promptly as practicable (but in no event more than
5 days, or within 5 days after the completion of any appraisal requested by the
Required Holders or obtained by the Company, as applicable, pursuant to
Section 6(c)) after receipt by the Company of the written notice of conversion
from the Required Holders, the Company shall (i) deliver notice of conversion of
the Series A Preferred Stock to all holders thereof, and (ii) if the notice
shall (or another recipient shall) specify any name or names other than that of
the converting holder, the requisite documents confirming ownership, reflecting
compliance with the securities laws and payment of all transfer taxes required
to be paid hereunder by the converting holder (or the demonstration to the
satisfaction of the Company that such taxes have been paid or are not
applicable), the Company shall deliver or cause to be delivered the number of
validly issued, fully paid and nonassessable whole shares (that is, any fraction
of a share a holder would otherwise be entitled to receive shall be rounded up
to the nearest whole share) of Common Stock to which each converting holder or
other recipient shall be entitled pursuant to Section 6(b) hereof.

 

(ii)           A conversion upon election of the Required Holders pursuant to
Section 6(a)(iii) shall be deemed effective immediately prior to the open of
business on the date of the respective written notice to the Company.  However,
the Required Holders may specify conversion upon a future date or event, such as
the fifth anniversary of the Effective Date.  Upon conversion, the rights of the
converting holder with respect to the shares being converted shall terminate,
except for the right to receive the shares of Common Stock issuable upon
conversion, and the person entitled to receive the shares of Common Stock so
issuable shall be treated for all purposes as having become the record holder of
such shares of Common Stock at the time of issuance.  In the event the written
notice for conversion is delivered on a day the transfer books of the Company
for its Common Stock are closed, the conversion shall be deemed to have occurred
upon the close of business on the first immediately preceding date on which such
transfer books are open.

 

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(iii)          In connection with any Listing Event or Change of Control, the
Company shall deliver or cause to be delivered the number of validly issued,
fully paid and nonassessable whole shares (that is, any fraction of a share a
holder would otherwise be entitled to receive shall be rounded up to the nearest
whole share) of Common Stock to which each holder of Series A Preferred Stock
shall be entitled pursuant to Section 6(b) hereof or, if applicable with respect
to a Change of Control, the amount of securities, cash or other property to
which each holder of Series A Preferred Stock shall be entitled pursuant to
Section 6(e)(vii), as promptly as practicable (but in no event more than 5 days
after the earliest day upon which the number of whole shares of Common Stock or
securities, cash or other property can be determined).

 

(iv)          Upon the vote or written consent of the Required Holders, voting
together as a class, all then outstanding shares of Series A Preferred Stock
shall be converted into Common Stock at the then applicable Conversion Rate.

 

(v)           The shares of Common Stock issuable upon conversion of shares of
Series A Preferred Stock, when issued in accordance with the terms hereof, are
hereby declared to be, and shall be, validly issued, fully paid and
nonassessable shares of Common Stock in the hands of the holders thereof.

 

(vi)          In connection with any Triggering Event, if the Conversion Value
Per Share of Series A Preferred Stock is zero, the Series A Preferred Stock will
be automatically deemed cancelled without further consideration and shall cease
to be outstanding.

 

(vii)         Notwithstanding Section 6(b) hereof, if, in connection with a
Change of Control, the Common Stock (but not the Series A Preferred Stock) is
converted into or exchanged for securities, cash or other property, then, in
connection with any such Change of Control, each share of Series A Preferred
Stock shall be convertible, in lieu of Common Stock, into the kind and amount of
securities, cash or other property which a holder of the number of shares of
Common Stock into which such share of Series A Preferred Stock would have been
convertible into in connection with such Change of Control would have been
entitled to receive pursuant to such Change of Control.

 

(f)            NO FRACTIONAL SHARES.  No fractional shares or scrip representing
fractional shares of Common Stock shall be issued upon conversion of shares of
the Series A Preferred Stock but, in lieu thereof, any fractional interest shall
be rounded up to the next whole share (on a holder by holder basis).

 

(g)           FUNDAMENTAL CHANGE.  In the event of any Fundamental Change, the
Company or the successor or purchasing business entity shall provide that the
holders of each share of Series A Preferred Stock then outstanding shall, in
connection with such Fundamental Change, receive shares, or fractions of shares,
of capital stock that the Board has determined in good faith to have at least
equivalent economic value and opportunity and other rights as the Series A
Preferred Stock following such Fundamental Change. The provisions of this
Section 6(g) shall similarly apply to successive Fundamental Changes.

 

D-5

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(h)           RESERVATION OF SHARES.  The Company shall at all times reserve and
keep available out of its authorized and unissued Common Stock, solely for the
purpose of effecting the conversion of the Series A Preferred Stock, such number
of shares of Common Stock, free of preemptive rights, as shall be sufficient to
effect the conversion of all shares of Series A Preferred Stock from time to
time outstanding.  The Company shall, from time to time, in accordance with the
laws of the State of Maryland, use its best efforts to increase the authorized
number of shares of Common Stock if, at any time, the number thereof shall not
be sufficient to permit the conversion of all the then outstanding shares of
Series A Preferred Stock.  If any shares of Common Stock required to be reserved
for conversion of shares of Series A Preferred Stock need to be registered with,
or approved by, any governmental authority under any federal or state law before
such shares may be issued upon conversion, the Company shall, in good faith and
as expeditiously as possible, endeavor to cause such shares to be duly
registered or approved, as the case may be.  If the Common Stock is listed on a
national securities exchange, the Company shall, in good faith and as
expeditiously as possible, if permitted by the rules of such exchange, endeavor
to list and keep listed on such exchange, upon official notice of issuance, all
shares of Common Stock issuable upon conversion of shares of the Series A
Preferred Stock.

 

SECTION  7.          REDEMPTION.  At any time after the fifth anniversary of the
Effective Date, the Company may redeem all, and not less than all, of the then
outstanding shares of Series A Preferred Stock (excluding any shares of Series A
Preferred Stock for which a Triggering Event has occurred, regardless of whether
the consummation of conversion upon such Triggering Event has occurred or is
pending) at a price per share of Series A Preferred Stock equal to the
Liquidation Preference plus declared and unpaid dividends thereon (the
“Redemption Price”).  At least 15 but not more than 35 days prior to the date
specified for redemption (the “Redemption Date”), the Company shall give written
notice to each holder of record of Series A Preferred Stock notifying such
holder of the redemption and specifying the Redemption Price and the Redemption
Date.  Any shares of Series A Preferred Stock redeemed pursuant to this
Section 7 or otherwise acquired by the Company in any manner whatsoever shall be
canceled and shall become authorized but unissued shares of Preferred Stock
without designation as to class or series.

 

SECTION  8.          DEFINITIONS.  For purposes hereof, the following terms
shall have the meanings indicated:

 

(a)           “Business Day” shall mean any day other than a Saturday, a Sunday,
or a day on which commercial banks in New York City are authorized or required
by law or executive order to close, or a day which is, or is declared to be, a
national or New York State holiday.

 

(b)           “Change of Control” shall mean, with respect to the Company, any
event or series of related events (including, without limitation, any issuance,
transfer or other disposition of shares of Equity Stock of the Company, merger,
share exchange or consolidation) after which (a) any person or Group is or
becomes the “beneficial owner” (as defined in Rule 13d-3 of the Securities
Exchange Act of 1934), directly or indirectly, of Equity Stock representing
greater than 50% of the combined voting power of the then outstanding Equity
Stock of the Company and (b) the beneficial owners, directly or indirectly, of
Equity Stock of the Company immediately prior to such event or series of related
events have less than 50% of the combined

 

D-6

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voting power of the surviving entity (or its parent company) after such event or
series of events. In addition, any event that causes, directly or indirectly,
any person or Group other than the Company to become the beneficial owner of
greater than 50% of the outstanding economic interests in the Operating
Partnership shall be deemed a Change of Control of the Company.

 

(c)           “Common Stock” shall mean the common stock, $0.0001 par value per
share, of the Company.

 

(d)           “Conversion Common Stock Value” shall mean: (i) in the case of
conversion of Series A Preferred Stock upon election of the Required Holders
pursuant to Section 6(a)(iii), the then most recent Estimated Per Share Value
(as adjusted for any stock dividends, combinations, splits, recapitalizations
and the like with respect to the Common Stock after the date of determination of
such Estimated Per Share Value) as of the date of such election, except that, to
the extent the Company (or one of its Affiliates) has sold any property included
in the determination of such Estimated Per Share Value, the gross sale price of
each such property shall be substituted for the estimated value of such property
included in such Estimated Per Share Value; (ii) in the case of a Listing Event,
the average daily closing price of the Common Stock for a 30 trading day period
(the “Measurement Period”) commencing on the first trading day after the date
that is the 180th day following the later to occur of (A) the Listing Event and
(B) the expiration of any applicable lock-up period entered into by any existing
holder or holders of Common Stock of not less than five (5) percent of the then
outstanding Common Stock to facilitate the orderly listing of the Common Stock
in public markets in connection with the Listing Event; provided, however, that,
if a Change of Control shall occur prior to the end of such Measurement Period,
the Conversion Common Stock Value shall be determined in accordance with clause
(iii) of this sentence; and (iii) in the case of a Change of Control, the value
per share of Common Stock established thereby or, if the value per share of
Common Stock is not established in connection with such Change of Control, the
value per share that the Board shall in good faith determine in connection with
such Change of Control, if applicable, based on the value of the consideration
paid for or with respect to or by extension to the Common Stock in connection
therewith.

 

(e)           “Conversion Company Value” shall mean (i) the Conversion Common
Stock Value multiplied by (ii) the Effective Date Outstanding Shares.

 

(f)            “Conversion Value Per Share of Series A Preferred Stock” shall
mean the result of: (i) 10.0 percent (0.10) of the excess, if any, of
(A) (1) Conversion Company Value plus (2) total distributions in excess of the
Current Distribution Rate on the Effective Date Outstanding Shares following the
Effective Date and through the date of the Triggering Event (or, in the case of
a Listing Event, through the date of the issuance of Common Stock upon the
conversion of the Series A Preferred Stock) over (B) the Effective Date Value;
divided by (ii) the number of shares of Series A Preferred Stock outstanding on
the date of the Triggering Event; and, in the case of a Triggering Event based
upon a Listing Event or Change of Control only, multiplied by (iii) 110 percent
(1.10); provided, however, that if a listing application or securities
registration statement has been filed in anticipation of a Listing Event, or a
Change of Control has been announced, in either case, prior to the fifth
anniversary of the Effective Date, and such Listing Event has not occurred or
Change of Control has not been closed, then the Conversion Value Per Share of
Series A Preferred Stock, in connection with an exercise of conversion on such
date, will be

 

D-7

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determined in connection with such subsequent Listing Event (and the subsequent
Measurement Period) or as of the date of closing of such Change of Control (or
other Change of Control that arises in response to such first Change of
Control); provided, further, however, that if such Listing Event or Change of
Control does not occur within 270 days following the fifth anniversary of the
Effective Date, then the Series A Preferred Stock shall be converted on the same
basis as if the holder had elected to convert the Series A Preferred Stock on
the fifth anniversary of the Effective Date.  If the amount of clause (A) above
is equal to, or less than, the amount of clause (B) above, then the Conversion
Value Per Share of Series A Preferred Stock shall be equal to zero.

 

(g)           “Current Distribution Rate” shall mean, on an annual basis, $0.10
per share of Common Stock (as adjusted for any stock dividends, combinations,
splits, recapitalizations and the like with respect to the Common Stock after
the Effective Date).

 

(h)           “Effective Date” shall mean August 31, 2012.

 

(i)            “Effective Date Outstanding Shares” shall mean 298,477,851.3007
shares of Common Stock (as appropriately adjusted for any stock dividends,
combinations, splits, recapitalizations and the like with respect to the Common
Stock after the Effective Date).  For the avoidance of doubt, shares of Common
Stock issuable upon the exercise or payment of stock options, warrants, rights
and other equity securities with respect to which shares of Common Stock have
not actually been issued prior to the Effective Date, including the Series A
Preferred Stock and any shares of Common Stock issuable upon conversion of the
Series A Preferred Stock, shall not be deemed outstanding for this purpose.

 

(j)            “Effective Date Value” shall mean the aggregate value of all
Effective Date Outstanding Shares, determined by multiplying: (i) the higher of
(A) the average of (1) $4.64 (as appropriately adjusted for any stock dividends,
combinations, splits, recapitalizations and the like with respect to the Common
Stock after the Effective Date and prior to the date the Estimated Per Share
Value is next publicly reported) and (2) the publicly reported Estimated Per
Share Value next publicly reported after the Effective Date; and (B) the
Estimated Per Share Value of the Common Stock next publicly reported after the
Effective Date; by (ii) 298,477,851.3007 (as appropriately adjusted for any
stock dividends, combinations, splits, recapitalizations and the like with
respect to the Common Stock after the Effective Date and prior to the date the
Estimated Per Share Value is next publicly reported).

 

(k)           “Equity Stock” shall mean all classes or series of stock of the
Company that the Company shall have authority to issue.

 

(l)            “Estimated Per Share Value” shall mean the estimated per share
value of Common Stock calculated in accordance with Section 6(c).

 

(m)          “Fundamental Change” shall mean the occurrence of any transaction
or event or series of transactions or events resulting in the reclassification
or recapitalization of the outstanding Common Stock (except a change in par
value, or from no par value to par value, or subdivision or other split or
combination of the shares of Common Stock), or the occurrence of any
consolidation or merger to which the Company is a party, except a merger in
which the

 

D-8

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Company is the surviving corporation and which does not result in any such
reclassification or recapitalization, in each case other than a Change of
Control.

 

(n)           “Group” means any person, or any two or more persons acting as a
group within the meaning of Section 13(d) of the Securities Exchange Act of
1934, as amended, and all Affiliates of such person or persons.

 

(o)           “Junior Stock” means the Common Stock and any other class or
series of stock of the Company that by its terms is junior to the Series A
Preferred Stock with respect to liquidation, dissolution and winding up.

 

(p)           “Listing Event” shall mean the listing of any Equity Stock of the
Company on a national securities exchange.  Upon such listing, such shares of
Equity Stock shall be deemed “listed.”

 

(q)           “Operating Partnership” shall mean Behringer Harvard Operating
Partnership I LP.

 

(r)            “Parity Stock” shall mean any class or series of shares entitled
by the terms thereof to amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in proportion to their respective liquidation
amounts, without preference or priority of one over the other as between the
holders of such shares and the holders of shares of Series A Preferred Stock.

 

(s)           “Required Holders” shall mean the holders of a majority of the
then outstanding shares of Series A Preferred Stock.

 

(t)            “Senior Stock” shall mean any class or series of stock of the
Company entitled by the terms thereof to the receipt of amounts payable upon
liquidation, dissolution or winding up, as the case may be, in preference to the
Series A Preferred Stock.

 

(u)           “Trading Day” shall mean any day on which the New York Stock
Exchange is open for trading whether or not the Common Stock is then listed on
the New York Stock Exchange and whether or not there is an actual trade of
Common Stock on any such day.

 

SECOND:  These Articles Supplementary have been approved by the Board in the
manner and by the vote required by law.

 

THIRD:  These Articles Supplementary shall be effective at the time the State
Department of Assessments and Taxation of Maryland accepts these Articles
Supplementary for record.

 

FOURTH:  The undersigned acknowledges these Articles Supplementary to be the
corporate act of the Company and, as to all matters or facts required to be
verified under oath, the undersigned acknowledges that to the best of his
knowledge, information and belief, these matters and facts are true in all
material respects and that this statement is made under the penalties for
perjury.

 

D-9

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FIFTH:  The Board has adopted a resolution authorizing the Chairman of the
Special Committee to sign these Articles Supplementary.

 

[SIGNATURES ON FOLLOWING PAGE]

 

D-10

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IN WITNESS WHEREOF, Behringer Harvard REIT I, Inc. has caused these Articles
Supplementary to be executed under the seal in its name and on its behalf by the
Chairman of the Special Committee of its Board of Directors, and attested to by
its Secretary, this 31st day of August, 2012.

 

 

BEHRINGER HARVARD REIT I, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

Attest:

 

 

 

[                                  ]

Secretary

 

D-11

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EXHIBIT E

 

FORM OF REGISTRATION RIGHTS AGREEMENT

 

See attached.

 

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FORM OF REGISTRATION RIGHTS AGREEMENT

 

dated as of

 

August 31, 2012

 

among

 

BEHRINGER HARVARD REIT I, INC.

 

and

 

THE SHAREHOLDERS FROM TIME TO TIME PARTY HERETO

 

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TABLE OF CONTENTS

 

 

 

PAGE

 

 

 

ARTICLE 1

DEFINITIONS

 

Section 1.01.

Definitions

1

Section 1.02.

Other Definitional and Interpretative Provisions

4

 

 

 

ARTICLE 2

REGISTRATION RIGHTS

 

Section 2.01.

Demand Registration

5

Section 2.02.

Piggyback Registration

8

Section 2.03.

Shelf Registration

9

Section 2.04.

Lock-Up Agreements

10

Section 2.05.

Registration Procedures

11

Section 2.06.

Participation In Public Offering

14

Section 2.07.

Rule 144 Sales; Cooperation By The Company

14

 

 

 

ARTICLE 3

INDEMNIFICATION AND CONTRIBUTION

 

Section 3.01.

Indemnification by the Company

15

Section 3.02.

Indemnification by Participating Shareholders

15

Section 3.03.

Conduct of Indemnification Proceedings

16

Section 3.04.

Contribution

16

Section 3.05.

Other Indemnification

17

 

 

 

ARTICLE 4

MISCELLANEOUS

 

Section 4.01.

Binding Effect; Assignability

17

Section 4.02.

Notices

18

Section 4.03.

Waiver; Amendment; Termination

18

Section 4.04.

Governing Law

19

Section 4.05.

Jurisdiction

19

Section 4.06.

WAIVER OF JURY TRIAL

19

Section 4.07.

Specific Enforcement

19

Section 4.08.

Counterparts; Effectiveness

19

Section 4.09.

Entire Agreement

19

Section 4.10.

Severability

20

Section 4.11.

Independent Nature of Shareholders’ Obligations and Rights

20

 

Exhibit A          Joinder Agreement

 

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REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT dated as of August 31, 2012 (this “Agreement”)
among Behringer Harvard REIT I, Inc., a Maryland corporation (the “Company”),
and the Shareholders from time to time party hereto (initially, Behringer
Harvard REIT I Services Holdings, LLC as the sole holder of Registrable
Securities) as listed on the signature pages, including any Permitted
Transferees (collectively, the “Shareholders”).

 

In consideration of the mutual promises made herein and other good and valuable
consideration, the receipt and sufficiency of which hereby are acknowledged, the
parties hereto agree as follows:

 

ARTICLE 1
DEFINITIONS

 

Section 1.01.               Definitions.  The following terms, as used herein,
have the following meanings:

 

“Agreement” has the meaning set forth in the preamble hereto.

 

“Affiliate” means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by or under common control with such Person,
provided that no security holder of the Company shall be deemed an Affiliate of
any other security holder solely by reason of any investment in the Company. 
For the purpose of this definition, the term “control” (including, with
correlative meanings, the terms “controlling”, “controlled by” and “under common
control with”), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.  For the avoidance of doubt, the Company,
Behringer Harvard Operating Partnership I LP, and their respective subsidiaries
shall not be considered Affiliates of Behringer Harvard Holdings, LLC and its
subsidiaries, and vice versa.

 

“Articles Supplementary” means the Articles Supplementary of the Company
establishing the Series A Participating, Voting, Convertible Preferred Stock
($0.0001 par value) filed with the State of Maryland in accordance with the
Master Modification Agreement, dated as of August 31, 2012, among the Company,
Behringer Harvard REIT I Services Holdings, LLC, Behringer Advisors, LLC and HPT
Management Services, LLC.

 

“Board” means the board of directors of the Company.

 

“Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York City are authorized by law to close.

 

“Common Shares” means shares of Common Stock, par value $0.0001 per share, of
the Company and any stock into which such Common Shares thereafter may be
converted or changed.

 

“Company” has the meaning set forth in the preamble hereto.

 

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“Convertible Securities” means shares of Series A Participating, Voting,
Convertible Preferred Stock, par value $0.0001 per share, of the Company.

 

“Damages” has the meaning set forth in Section 3.01.

 

“Demand Registration” has the meaning set forth in Section 2.01.

 

“Demand Requesting Shareholder” has the meaning set forth in Section 2.01(a).

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“FINRA” means the Financial Industry Regulatory and any successor thereto.

 

“Indemnified Party” has the meaning set forth in Section 3.03.

 

“Indemnifying Party” has the meaning set forth in Section 3.03.

 

“Inspectors” has the meaning set forth in Section 2.05(f).

 

“Lock-Up Period” has the meaning set forth in Section 2.03(f).

 

“Maximum Offering Size” has the meaning set forth in Section 2.01(e).

 

“Notice” has the meaning set forth in Section 4.02.

 

“Permitted Transferee” means in the case of any Shareholder, a Person to whom
Registrable Securities are Transferred by such Shareholder; provided, however,
that (i) such Transfer is not made in a registered offering or pursuant to
Rule 144, (ii) such Transfer does not violate Section 2.04 and (iii) such
transferee shall only be a Permitted Transferee if and to the extent the
transferor designates the transferee as a Permitted Transferee entitled to
rights hereunder pursuant to Section 4.01(b) or the transferee executes a
Joinder Agreement as contemplated by Section 4.01(b).

 

“Person” means an individual, corporation, limited liability company,
partnership, association, trust or other entity or organization, including a
government or political subdivision or an agency or instrumentality thereof.

 

“Piggyback Registration” has the meaning set forth in Section 2.02.

 

“Public Offering” means an underwritten public offering of Common Shares of the
Company pursuant to an effective registration statement under the Securities
Act, other than pursuant to a registration statement on Form S-4 or Form S-8 or
any similar or successor form.

 

“Records” has the meaning set forth in Section 2.05(f).

 

“Registering Shareholders” has the meaning set forth in Section 2.01.

 

“Registrable Securities” means, at any time, (i) any Common Shares issued or
issuable upon conversion of any Convertible Securities, and (ii) any additional
Common Shares issued or

 

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distributed by way of conversion, exchange, exercise, dividend, split, reverse
split, combination, recapitalization, reclassification, merger, amalgamation,
consolidation, sale of assets, other reorganization or other similar event in
respect of the Common Shares referred to in clause (i) above, in each case until
(A) a registration statement covering such Common Shares has been declared
effective by the SEC and such Common Shares have been disposed of pursuant to
such effective registration statement, or (B) such Common Shares are sold under
circumstances in which all the applicable conditions of Rule 144 are met or, if
the Common Shares are then listed on a national securities exchange and Rule 144
is available in connection with a sale of Registrable Securities, which could be
sold without restriction (on a single day) under Rule 144(e).

 

“Registration Expenses” means any and all expenses incident to the performance
of, or compliance with, any registration or marketing of securities, including
all (i) registration and filing fees, and all other fees and expenses payable in
connection with the listing of securities on any securities exchange or
automated interdealer quotation system, (ii) fees and expenses of compliance
with any securities or “blue sky” laws (including reasonable fees and
disbursements of counsel in connection with “blue sky” qualifications of the
securities registered), (iii) expenses in connection with the preparation,
printing, mailing and delivery of any registration statements, prospectuses and
other documents in connection therewith and any amendments or supplements
thereto, (iv) security engraving and printing expenses, (v) internal expenses of
the Company (including all salaries and expenses of its officers and employees
performing legal or accounting duties), (vi) reasonable fees and disbursements
of counsel for the Company and customary fees and expenses for independent
certified public accountants retained by the Company (including the expenses
relating to any comfort letters or costs associated with the delivery by
independent certified public accountants of any comfort letters requested
pursuant to Section 2.05(g)), (vii) reasonable fees and expenses of any special
experts retained by the Company in connection with such registration,
(viii) reasonable fees (not exceeding $35,000), plus reasonable out-of-pocket
expenses, of one counsel for all the Shareholders participating in the offering
selected by the Shareholders holding the majority of the Registrable Securities
to be sold for the account of all Shareholders in the offering, (ix) fees and
expenses in connection with any review by FINRA of the underwriting arrangements
or other terms of the offering, and all fees and expenses of any “qualified
independent underwriter,” including the fees and expenses of any counsel
thereto, (x) fees and disbursements of underwriters customarily paid by issuers
or sellers of securities, but excluding any underwriting fees, discounts and
commissions attributable to the sale of Registrable Securities, (xi) costs of
printing and producing any agreements among underwriters, underwriting
agreements, any “blue sky” or legal investment memoranda and any selling
agreements and other documents in connection with the offering, sale or delivery
of the Registrable Securities, (xii) transfer agents’ and registrars’ fees and
expenses and the fees and expenses of any other agent or trustee appointed in
connection with such offering, (xiii) expenses relating to any analyst or
investor presentations or any “road shows” undertaken in connection with the
registration, marketing or selling of the Registrable Securities, and (xiv) all
out-of pocket costs and expenses incurred by the Company or its appropriate
officers in connection with their compliance with Section 2.05(l).  Except as
set forth in clause (viii) above, Registration Expenses shall not include any
out-of-pocket expenses of the Shareholders (or the agents who manage their
accounts).

 

“Rule 144” means Rule 144 (or any successor provisions) under the Securities Act

 

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“Rule 144A” has the meaning set forth in Section 2.08(b).

 

“SEC” means the Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Shareholder” means at any time, any Person (other than the Company) who shall
then be a party to or bound by this Agreement, including any Permitted
Transferees, so long as such Person shall be the holder of record of any
Registrable Securities.

 

“Shelf Registration” has the meaning set forth in Section 2.03.

 

“Shelf Requesting Shareholder” means, in connection with a Shelf Registration,
(i) all the Shareholders in the case of a Triggering Event of the type referred
to in clause (i) of the definition thereof, or (ii) those requesting
Shareholder(s) referred to in clause (ii) of the definition of Triggering Event.

 

“Transfer” means, with respect to any securities, (i) when used as a verb, to
sell, assign, dispose of, exchange, pledge, encumber, hypothecate or otherwise
transfer such securities or any participation or interest therein, whether
directly or indirectly, or agree or commit to do any of the foregoing and
(ii) when used as a noun, a direct or indirect sale, assignment, disposition,
exchange, pledge, encumbrance, hypothecation, or other transfer of such
securities or any participation or interest therein or any agreement or
commitment to do any of the foregoing.

 

“Triggering Event” means the earlier to occur of (i) the automatic conversion of
all the then outstanding Convertible Securities upon a Listing Event (as defined
in the Articles Supplementary) and (ii) the request from one Shareholder or a
group of Shareholders holding not less than 15% of the then Registrable
Securities that the Company file a Shelf Registration, as the case may be.

 

“Underwritten Takedown” has the meaning set forth in Section 2.03.

 

Section 1.02.               Other Definitional and Interpretative Provisions. 
The words “hereof”, “herein” and “hereunder” and words of like import used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.  The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.  References to Articles, Sections or Exhibits are to
Articles, Sections and Exhibits of this Agreement unless otherwise specified. 
All Exhibits annexed hereto or referred to herein are hereby incorporated in and
made a part of this Agreement as if set forth in full herein.  Any capitalized
term used in any Exhibit but not otherwise defined therein shall have the
meaning as defined in this Agreement.  Any singular term in this Agreement shall
be deemed to include the plural, and any plural term the singular.  Whenever the
words “include”, “includes” or “including” are used in this Agreement, they
shall be deemed to be followed by the words “without limitation”, whether or not
they are in fact followed by those words or words of like import.  “Writing”,
“written” and comparable terms refer to printing, typing and other means of
reproducing words (including electronic media) in a visible form.  References to
any agreement or contract are to that agreement or contract as amended, modified
or supplemented from time to time in accordance with the terms hereof and
thereof.  References to any Person

 

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include the successors and permitted assigns of that Person.  References from or
through any date mean, unless otherwise specified, from and including or through
and including, respectively.

 

ARTICLE 2
REGISTRATION RIGHTS

 

Section 2.01.               Demand Registration.

 

(a)           If one Shareholder or a group of Shareholders holding not less
than 15% of the then Registrable Securities (the “Demand Requesting
Shareholders”) request that the Company file a registration statement (a “Demand
Registration”)  and the Company is not eligible to use Form S-3 (or a successor
to Form S-3) in connection with the resale of the Registrable Securities to be
sold pursuant to the registration statement, the Company:  (i) shall promptly
give notice thereof at least ten Business Days prior to the anticipated filing
date of the registration statement relating to such Demand Registration to all
Shareholders (not including the Demand Requesting Shareholders); (ii) shall file
such registration statement under the Securities Act within 45 days after the
occurrence of such request; and (iii) thereupon shall use its reasonable best
efforts to effect, as expeditiously as possible, the registration under the
Securities Act of:

 

(1)           subject to the restrictions set forth in Sections 2.01(e), all
Registrable Securities for which the Demand Requesting Shareholders have
requested registration under this Section 2.01; and

 

(2)           subject to the restrictions set forth in Sections 2.01(e), all
other Registrable Securities of the same class as those requested to be
registered by the Demand Requesting Shareholders that any Shareholders (all such
Shareholders, together with the Demand Requesting Shareholders, the “Registering
Shareholders”) have requested the Company to register by request received by the
Company within seven days after such Shareholders receive the Company’s notice
of the Demand Registration,

 

all to the extent necessary to permit the disposition (in accordance with the
intended method of disposition specified by the Registering Shareholders of the
Registrable Securities) so to be registered.

 

(b)           Promptly after the expiration of the seven-day period referred to
in clause (ii) of Section 2.01(a)(2), the Company will notify all Registering
Shareholders of the identities of the other Registering Shareholders and the
number of shares of Registrable Securities requested to be included therein.  At
any time prior to the effective date of the registration statement relating to
such registration, the Demand Requesting Shareholders (by majority vote) may
revoke such request, without liability to any of the other Registering
Shareholders, by providing a notice to the Company revoking such request.  A
request, so revoked, shall be considered to be a Demand Registration unless
(i) such revocation arose out of the fault of the Company (in which case the
Company shall be obligated to pay all Registration Expenses in connection with
such revoked request), or (ii) the Demand Requesting Shareholders or any other

 

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Shareholder or Shareholders reimburse the Company for all Registration Expenses
of such revoked request.

 

(c)           The Company shall be liable for and shall pay all Registration
Expenses in connection with any Demand Registration, regardless of whether such
Registration is effected, unless the Demand Requesting Shareholders elects to
pay such Registration Expenses as described in the last sentence of
Section 2.01(b).

 

(d)           A Demand Registration shall not be deemed to have occurred:

 

(1)           unless the registration statement relating thereto (A) has become
effective under the Securities Act, and (B) has remained effective for a period
of at least 180 days (or such shorter period in which all Registrable Securities
of the Registering Shareholders included in such registration have actually been
sold thereunder), provided that a Demand Registration shall not be deemed to
have occurred if, after such registration statement becomes effective, (1) such
registration statement is interfered with by any stop order, injunction or other
order or requirement of the SEC or other governmental agency or court, and
(2) less than 75% of the Registrable Securities included in such registration
statement have been sold thereunder; or

 

(2)           if the Maximum Offering Size is reduced in accordance with
Section 2.01(e) such that less than a majority of the Registrable Securities of
the Requesting Shareholders sought to be included in such registration are
included.

 

(e)           If a Demand Registration involves an underwritten Public Offering,
the holders of a majority of the Registrable Securities to be sold in the Public
Offering shall select the investment banking firm or firms to act as the
managing underwriter or underwriters in connection with such Public Offering,
subject to consent of the Company, which consent will not be unreasonably
withheld or delayed.  If a Demand Registration involves an underwritten Public
Offering and the managing underwriter advises the Company and the Registering
Shareholders that, in its view, the number of shares of Registrable Securities
requested to be included in such registration (including any securities that the
Company proposes to be included that are not Registrable Securities) exceeds the
largest number of shares that can be sold without having an adverse effect on
such offering, including the price at which such shares can be sold (the
“Maximum Offering Size”), the Company shall include in such registration, in the
priority listed below, up to the Maximum Offering Size:

 

(1)           first, all Registrable Securities requested to be included in such
registration by all Registering Shareholders (allocated, if necessary for the
offering not to exceed the Maximum Offering Size, pro rata among such
Shareholders on the basis of the relative number of Registrable Securities held
by each such Shareholder); and

 

(2)           second, any securities proposed to be registered by the Company
(including for the benefit of any other Persons not party to this Agreement).

 

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(f)            Upon notice to the Registering Shareholders, the Company may
postpone effecting a registration pursuant to this Section 2.01 on one occasion
during any period of six consecutive months for a reasonable time specified in
the notice but not exceeding 90 days (which period may not be extended or
renewed), if (i) the Company reasonably determines that effecting the
registration would materially and adversely affect an offering of securities of
the Company the preparation of which had then been commenced, or (ii) the
Company is in possession of material non-public information the disclosure of
which during the period specified in such notice the Company reasonably believes
would not be in the best interests of the Company.

 

(g)           Notwithstanding anything that may be to the contrary in this
Article 2, if the Common Shares are then listed on a national securities
exchange and Rule 144 is available in connection with a sale of Registrable
Securities, then the Company shall not be obligated to effect a Demand
Registration unless the aggregate proceeds expected to be received from the sale
of the Registrable Securities requested to be included in such Demand
Registration equals or exceeds $20,000,000 or such lesser amount that
constitutes all the Registrable Securities of the Demand Requesting Shareholders
(provided that such lesser amount is at least $10,000,000) or all of the
Registrable Securities then outstanding.  Notwithstanding anything that may be
to the contrary in this Article 2, the Company shall not be required to effect
(A) more than one registration pursuant to Section 2.01 hereunder within any
six-month period, or (B) more than three Demand Registrations hereunder in the
aggregate.

 

(h)           Notwithstanding anything that may be to the contrary in this
Article 2, the Company shall not be obligated to register any Registrable
Securities unless the holder thereof has notified the Company in writing of its
intended method of distribution in a timely manner.

 

Section 2.02.               Piggyback Registration.

 

(a)           If the Company proposes to register any Common Shares under the
Securities Act (other than (i) a Shelf Registration for Shareholders, which will
be subject to the provisions of Section 2.03, provided that any Underwritten
Takedown will be subject to this Section 2.02, or (ii) a registration on
Form S-8, S-4 or S-3D, or any successor forms, relating to Common Shares
issuable upon exercise of employee stock options or in connection with any
employee benefit or similar plan of the Company or in connection with a direct
or indirect acquisition by the Company of another Person), whether or not for
sale for its own account, the Company shall each such time give prompt notice at
least ten Business Days prior to the anticipated filing date of the registration
statement relating to such registration to each Shareholder, which notice shall
set forth such Shareholder’s rights under this Section 2.02 and shall offer such
Shareholder the opportunity to include in such registration statement the number
of Registrable Securities of the same class or series as those proposed to be
registered as each such Shareholder may request (a “Piggyback Registration”),
subject to the provisions of Section 2.02(b).  Upon the request of any such
Shareholder made within seven days after the receipt of notice from the Company
(which request shall specify the number of Registrable Securities intended to be
registered by such Shareholder), the Company shall use all reasonable best
efforts to effect the registration under the Securities Act of all Registrable
Securities that the Company has been so requested to register by all such
Shareholders, to the extent required to permit the disposition of the
Registrable Securities so to be registered, provided that (A) if such

 

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registration involves an underwritten Public Offering, all such Shareholders
requesting to be included in the Company’s registration must sell their
Registrable Securities to the underwriters, on the same terms and conditions as
apply to the Company or the holders of Common Stock (other than the
Shareholders) that have demanded such Piggyback Registration, as applicable, and
(B) if, at any time after giving notice of its intention to register any Common
Shares pursuant to this Section 2.02 and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine for any reason not to register such securities, the Company
shall give notice to all such Shareholders and, thereupon, shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration.  No registration effected under this Section 2.02 shall relieve
the Company of its obligations to effect a Demand Registration to the extent
required by Section 2.01 or a Shelf Registration to the extent required by
Section 2.03.  The Company shall pay all Registration Expenses in connection
with each Piggyback Registration.

 

(b)                                 If a Piggyback Registration involves an
underwritten Public Offering (other than any Demand Registration, in which case
the provisions with respect to priority of inclusion in such offering set forth
in Section 2.01(e) shall apply) and the managing underwriter advises the Company
that, in its view, the number of Common Shares that the Company and such
Shareholders intend to include in such registration exceeds the Maximum Offering
Size, the Company shall include in such registration, in the following priority,
up to the Maximum Offering Size:

 

(1)                                  first, so much of the Common Shares
proposed to be registered for the account of the Company (or, if such
registration is pursuant to a demand by a Person that is not a Shareholder, for
the account of such other Person) as would not cause the offering to exceed the
Maximum Offering Size,

 

(2)                                  second, all Registrable Securities
requested to be included in such registration by any Shareholders pursuant to
this Section 2.02 (allocated, if necessary for the offering not to exceed the
Maximum Offering Size, pro rata among such Shareholders on the basis of the
relative number of shares of Registrable Securities so requested to be included
in such registration by each), and

 

(3)                                  third, any securities proposed to be
registered for the account of any other Persons with such priorities among them
as the Company shall determine.

 

Section 2.03.                                             Shelf Registration.

 

(a)                                  If a Triggering Event occurs and the
Company is eligible to use Form S-3, the Company shall use its reasonable best
efforts to file a registration statement pursuant to Rule 415 under the
Securities Act (or any successor rule) (a “Shelf Registration”) with respect to 
all of the Registrable Securities that have been converted into Common Shares
pursuant to the Articles Supplementary and are contemplated to be included in
such Shelf Registration pursuant to Section 2.03(b), within 30 days after the
occurrence of the Triggering Event.  The Company only shall be required to
effectuate one Public Offering from such Shelf Registration (an

 

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“Underwritten Takedown”) within any six-month period, which offering shall be
deemed a Demand Registration.  The provisions of Section 2.01 shall apply
mutatis mutandis to each Underwritten Takedown, with references to “filing of
the registration statement” or “effective date” being deemed references to
filing of a prospectus or supplement for such offering and references to
“registration” being deemed references to the offering; provided, however,  that
Registering Shareholders shall only include Shareholders whose Registrable
Securities are included in such Shelf Registration or may be included therein
without the need for an amendment to such Shelf Registration (other than an
automatically effective amendment).  So long as the Shelf Registration is
effective, no Shareholder covered thereunder may request any Demand Registration
pursuant to Section 2.01 with respect to Registrable Shares that are registered
on such Shelf Registration.

 

(b)                                 If a Triggering Event of the type referred
to in either clause (i) or (ii) of the definition thereof occurs, the Company
promptly shall give notice of the subject Shelf Registration  (but at least ten
Business Days prior to the anticipated filing date of the registration statement
relating to such Shelf Registration) to all the Shareholders in the event of a
Trigger Event under such clause (i) and to all the Shareholders (other than the
Shelf Requesting Shareholders) in the event of a Trigger Event under such clause
(ii), and thereupon shall use its reasonable best efforts to effect  the
registration under the Securities Act of:

 

(1)                                  all Registrable Securities for which the
Shelf Requesting Shareholders have requested registration under this
Section 2.03 (which in the case of a Triggering Event of the type specified in
clause (i) of the definition thereof shall be deemed to be all the then
outstanding Registrable Securities), and

 

(2)                                  all other Registrable Securities of the
same class as those requested to be registered by the Shelf Requesting
Shareholders that any Shareholders have requested the Company to register by
request received by the Company within seven days after such Shareholders
receive the Company’s notice of the Shelf Registration,

 

all to the extent necessary to permit the registration of the Registrable
Securities so to be registered on such Shelf Registration.

 

(c)                                  At any time prior to the effective date of
the registration statement relating to such Shelf Registration, the Shelf
Requesting Shareholder may revoke such request, without liability to any of the
other Registering Shareholders, by providing a notice to the Company revoking
such request.

 

(d)                                 The Company shall be liable for and pay all
Registration Expenses in connection with any Shelf Registration.

 

(e)                                  Upon notice to the Shelf Requesting
Shareholder, the Company may postpone effecting a registration pursuant to this
Section 2.03 on one occasion during any period of six consecutive months for a
reasonable time specified in the notice but not exceeding 45 days (which period
may not be extended or renewed), if the Company determines that effecting the
registration would materially and adversely affect an offering of securities of
the Company the

 

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preparation of which had then been commenced, or the Company is in possession of
material non-public information the disclosure of which during the period
specified in such notice the Company reasonably believes would not be in the
best interests of the Company.

 

(f)                                    Notwithstanding anything that may be to
the contrary in this Article 2, the Company shall not be required to effect
(A) more than one Shelf Registration pursuant to Section 2.03 within any
three-month period, or (B) more than three Shelf Registrations (excluding any
Underwritten Takedown, which shall instead be counted as a Demand Registration)
hereunder in the aggregate.

 

Section 2.04.                                             Lock-Up Agreements. 
If any registration of Registrable Securities shall be effected in connection
with a Public Offering, neither the Company nor any Shareholder who (i) sold any
Registrable Securities in such Public Offering, (ii) is a director or executive
officer of the Company, or (iii) holds in excess of one half of one percent
(1/2%) of the then outstanding shares of Common Stock (nor, to the extent
requested by the lead managing underwriter or any governmental authority or
regulatory agency (including FINRA), any other Shareholder), shall effect any
public sale or distribution, including any sale pursuant to Rule 144, of any
Common Shares or other equity or equity-based security of the Company (except as
part of such Public Offering) during the period beginning 14 days prior to the
effective date of the applicable registration statement or, in the case of a
Shelf Registration, 14 days prior to launch of the offering or such later date
when the Shareholder receives notice thereof until the earlier of (i) such time
as the Company and the lead managing underwriter shall agree and (ii) 180 days
following the effective date of the applicable registration statement or, in the
case of a Shelf Registration, 90 days following the launch of the offering or
such later date when the Shareholder receives notice thereof (such period, the
“Lock-Up Period” for the applicable registration statement).

 

Section 2.05.                                             Registration
Procedures.  Whenever Shareholders request that any Registrable Securities be
registered pursuant to Section 2.01, 2.02 or 2.03, subject to the provisions of
such Sections, the Company shall use all reasonable best efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof as quickly as practicable, and, in
connection with any such request:

 

(a)                                  The Company shall as expeditiously as
possible prepare and file with the SEC a registration statement on any form for
which the Company then qualifies or that counsel for the Company shall deem
appropriate and which form shall be available for the sale of the Registrable
Securities to be registered thereunder in accordance with the intended method of
distribution thereof, and use all reasonable best efforts to cause such filed
registration statement to become and remain effective for a period of not less
than 180 days, or in the case of a Shelf Registration, three years (or such
shorter period in which all of the Registrable Securities of the Shareholders
included in such registration statement shall have actually been sold
thereunder).  Any such registration statement shall be an automatically
effective registration statement to the extent permitted by the SEC’s rules and
regulations.

 

(b)                                 Prior to filing a registration statement or
prospectus or any amendment or supplement thereto (other than any report filed
pursuant to the Exchange Act that is incorporated by reference therein), the
Company shall, if requested, furnish to each participating Shareholder

 

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and each underwriter, if any, of the Registrable Securities covered by such
registration statement copies of such registration statement as proposed to be
filed and provide each participating Shareholder with a reasonable period of
time to comment thereon, and thereafter the Company shall furnish to such
Shareholder and underwriter, if any, such number of copies of such registration
statement, each amendment and supplement thereto (in each case including all
exhibits thereto and documents incorporated by reference therein), the
prospectus included in such registration statement (including each preliminary
prospectus and any summary prospectus) and any other prospectus filed under
Rule 424, Rule 430A, Rule 430B or Rule 430C under the Securities Act and such
other documents as such Shareholder or underwriter may reasonably request in
order to facilitate the disposition of the Registrable Securities owned by such
Shareholder.

 

(c)                                  After the filing of the registration
statement, the Company shall (i) cause the related prospectus to be supplemented
by any required prospectus supplement and, as so supplemented, to be filed
pursuant to Rule 424 under the Securities Act, (ii) comply with the provisions
of the Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement during the applicable period
in accordance with the intended methods of disposition by the Shareholders
thereof set forth in such registration statement or supplement to such
prospectus, and (iii) promptly notify each Shareholder holding Registrable
Securities covered by such registration statement of any stop order issued or
threatened by the SEC or any state securities commission and take all reasonable
actions required to prevent the entry of such stop order or to remove it if
entered.

 

(d)                                 The Company shall use all reasonable best
efforts to (i) register or qualify the Registrable Securities covered by such
registration statement under such other securities or “blue sky” laws of such
jurisdictions in the United States as any Registering Shareholder holding such
Registrable Securities reasonably (in light of such Shareholder’s intended plan
of distribution) requests and (ii) cause such Registrable Securities to be
registered with or approved by such other governmental agencies or authorities
as may be necessary by virtue of the business and operations of the Company and
do any and all other acts and things that may be reasonably necessary or
advisable to enable such Shareholder to consummate the disposition of the
Registrable Securities owned by such Shareholder, provided that the Company
shall not be required to (A) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 2.05(d), (B) subject itself to taxation in any such jurisdiction or
(C) consent to general service of process in any such jurisdiction.

 

(e)                                  The Company shall immediately notify each
Shareholder holding such Registrable Securities covered by such registration
statement, at any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the occurrence of an event requiring the
preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and promptly prepare and make available to
each such Shareholder and file with the SEC any such supplement or amendment.

 

(f)                                    Upon execution of confidentiality
agreements in form and substance reasonably satisfactory to the Company, the
Company shall make available for inspection by any

 

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Shareholder and any underwriter participating in any disposition pursuant to a
registration statement being filed by the Company pursuant to this Section 2.05
and any attorney, accountant or other professional retained by any such
Shareholder or underwriter (collectively, the “Inspectors”), all financial and
other records, pertinent corporate documents and properties of the Company
(collectively, the “Records”) as shall be reasonably necessary or desirable to
enable any of the Inspectors to exercise its due diligence responsibility, and
cause the Company’s officers, directors and employees to supply all information
reasonably requested by any Inspectors in connection with such registration
statement.  Records that the Company determines, in good faith, to be
confidential and that it notifies the Inspectors are confidential shall not be
disclosed by the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such registration
statement, or (ii) the release of such Records is ordered pursuant to a subpoena
or other order from a court of competent jurisdiction.  Each Shareholder agrees
that information obtained by it as a result of such inspections shall be deemed
confidential and shall not be used by it or its Affiliates as the basis for any
market transactions in any of the Company’s securities unless and until such
information is made generally available to the public.  Each Shareholder further
agrees that, upon learning that disclosure of such Records is sought in a court
of competent jurisdiction, it shall give notice to the Company and allow the
Company, at its expense, to undertake appropriate action to prevent disclosure
of the Records deemed confidential.

 

(g)                                 The Company shall use reasonable best
efforts to furnish to each Registering Shareholder and to each such underwriter,
if any, a signed counterpart, addressed to such Shareholder or underwriter, of
(i) an opinion or opinions of counsel to the Company and (ii) a comfort letter
or comfort letters from the Company’s independent public accountants, each in
customary form and covering such matters of the kind customarily covered by
opinions or comfort letters, as the case may be, as the Shareholders holding the
majority of the Registrable Securities to be sold for the account of all
Shareholders in the offering  or the managing underwriter therefor reasonably
requests.

 

(h)                                 The Company shall otherwise use all
reasonable best efforts to comply with all applicable rules and regulations of
the SEC, and make available to its security holders, as soon as reasonably
practicable, an earnings statement or such other document covering a period of
12 months, beginning within three months after the effective date of the
registration statement, which earnings statement satisfies the requirements of
Rule 158 under the Securities Act.

 

(i)                                     The Company may require each Shareholder
promptly to furnish in writing to the Company such information regarding the
distribution of the Registrable Securities as the Company may from time to time
reasonably request and such other information as may be legally required in
connection with such registration.

 

(j)                                     Each Shareholder agrees that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 2.05(e), such Shareholder shall forthwith discontinue
disposition of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until such Shareholder’s receipt of the
copies of the supplemented or amended prospectus contemplated by
Section 2.05(e), and, if so directed by the Company, such Shareholder shall
deliver to the Company all copies, other than any permanent file copies then in
such Shareholder’s possession, of the most recent prospectus

 

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covering such Registrable Securities at the time of receipt of such notice.  If
the Company shall give such notice, the Company shall extend the period during
which such registration statement shall be maintained effective (including the
period referred to in Section 2.05(a)) by the number of days during the period
from and including the date of the giving of notice pursuant to Section 2.05(e)
to the date when the Company shall make available to such Shareholder a
prospectus supplemented or amended to conform with the requirements of
Section 2.05(e).

 

(k)                                  The Company shall use reasonable best
efforts to list all shares of Common Stock (or other securities) issued upon
conversion of the Convertible Securities on any securities exchange or quotation
system on which the Common Shares (or such other securities) are then listed or
traded, upon issuance thereof.

 

(l)                                     The Company shall select an underwriter
or underwriters in connection with any other Public Offering.  In connection
with any Public Offering, the Company shall enter into customary agreements
(including an underwriting agreement in customary form) and take such all other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities in any such Public Offering,
including the engagement of a “qualified independent underwriter” in connection
with the qualification of the underwriting arrangements with FINRA.

 

(m)                               The Company shall have appropriate senior
executive officers of the Company (i)  prepare and make presentations at any
“road shows” and before analysts, and (ii) otherwise use their reasonable
efforts to cooperate as reasonably requested by the underwriters in the
offering, marketing or selling of the Registrable Securities.

 

Section 2.06.                                             Participation In
Public Offering.  No Shareholder may participate in any Public Offering
hereunder unless such Shareholder (a) agrees to sell such Shareholder’s
Registrable Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements, and
(b) completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents reasonably required under the terms
of such underwriting arrangements and the provisions of this Agreement in
respect of registration rights.

 

Section 2.07.                                             Rule 144 Sales;
Cooperation By The Company.  If any holder of Common Stock (or other securities)
issued upon conversion of the Convertible Shares or holder of Registrable
Securities (but only if such holder is a Shareholder or a Permitted Transferee
thereof), shall Transfer or propose to Transfer any shares of Common Stock (or
other securities) issued upon conversion of the Convertible Securities or any
Registrable Securities pursuant to Rule 144 or Rule 144A, the Company shall
cooperate, to the extent commercially reasonable, with such holder and shall
promptly provide to such holder such information as such holder shall reasonably
request.  Without limiting the foregoing, the Company shall:

 

(a)                                  at any time after any of the Company’s
shares of capital stock are registered under the Securities Act or the Exchange
Act:  (i) make and keep available public information, as those terms are
contemplated by Rule 144; (ii) timely file with the SEC all reports and other
documents required to be filed under the Securities Act and the Exchange Act;
and (iii) furnish to each such holder forthwith upon request a written statement
by the Company

 

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as to its compliance with the reporting requirements of the Securities Act and
the Exchange Act, a copy of the most recent annual or quarterly report of the
Company, and such other information as such holder may reasonably request in
order to avail itself of any rule or regulation of the SEC allowing such holder
to sell any Registrable Securities without registration; and

 

(b)                                 each such holder and each prospective holder
(but only if such prospective holder is a Permitted Transferee) who may consider
acquiring Common Stock, other securities received upon conversion of the
Convertible Securities or Registrable Securities in reliance upon Rule 144A
under the Securities Act (or any successor rule then in force) (“Rule 144A”)
shall have the right to request from the Company, and the Company will provide
upon such request, such information regarding the Company and its business,
assets and properties, if any, as is at the time required to be made available
by the Company under Rule 144A so as to enable such holder or prospective holder
to transfer the respective securities to such prospective holder in reliance
upon Rule 144A.

 

(c)                                  In addition, the Company shall use
reasonable best efforts to furnish forthwith, but in any event within five (5)
business days following the receipt of a supportable request therefor, at the
Company’s expense, to the Company’s transfer agent an opinion of counsel that
such unlegended stock certificates may be issued and the requesting Shareholder
shall furnish to the transfer agent any representation letter requested by the
transfer agent in connection therewith, at such Stockholder’s expense.

 

ARTICLE 3

INDEMNIFICATION AND CONTRIBUTION

 

Section 3.01.                                             Indemnification by the
Company.  The Company agrees to indemnify and hold harmless each Shareholder
beneficially owning any Registrable Securities covered by a registration
statement, its officers, directors, employees, partners and agents, and each
Person, if any, who controls such Shareholder within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act from and against any and
all losses, claims, damages, liabilities and expenses (including reasonable
expenses of investigation and reasonable attorneys’ fees and expenses)
(collectively, “Damages”) caused by or relating to any untrue statement or
alleged untrue statement of a material fact contained in any registration
statement or prospectus relating to the Registrable Securities (as amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) or any preliminary prospectus or free-writing prospectus (as defined in
Rule 405 under the Securities Act), or caused by or relating to any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such Damages are caused by or related to any such untrue statement or omission
or alleged untrue statement or omission so made based upon information furnished
in writing to the Company by such Shareholder or on such Shareholder’s behalf
expressly for use therein.  The Company also agrees to indemnify any
underwriters of the Registrable Securities, their officers and directors and
each Person who controls such underwriters within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act on substantially the same
basis as that of the indemnification of the Shareholders provided in this
Section 3.01.

 

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Section 3.02.                                             Indemnification by
Participating Shareholders.  Each Shareholder holding Registrable Securities
included in any registration statement agrees, severally but not jointly, to
indemnify and hold harmless the Company, its officers, directors and agents and
each Person, if any, who controls the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the indemnity from the Company to such Shareholder provided in Section 3.01, but
only with respect to information furnished in writing by such Shareholder or on
such Shareholder’s behalf expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus or free-writing prospectus. 
Each such Shareholder also agrees to indemnify and hold harmless underwriters of
the Registrable Securities, their officers and directors and each Person who
controls such underwriters within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act on substantially the same basis as that of
the indemnification of the Company provided in this Section 3.02.  As a
condition to including Registrable Securities in any registration statement
filed in accordance with Article 2, the Company may require that it shall have
received an undertaking reasonably satisfactory to it from any underwriter to
indemnify and hold it harmless to the extent customarily provided by
underwriters with respect to similar securities.  No Shareholder shall be liable
under this Section 3.02 for any Damages in excess of the net proceeds realized
by such Shareholder in the sale of Registrable Securities of such Shareholder to
which such Damages relate.

 

Section 3.03.                                             Conduct of
Indemnification Proceedings.  If any proceeding (including any governmental
investigation) shall be instituted involving any Person in respect of which
indemnity may be sought pursuant to this Article 3, such Person (an “Indemnified
Party”) shall promptly notify the Person against whom such indemnity may be
sought (the “Indemnifying Party”) in writing and the Indemnifying Party shall
assume the defense thereof, including the employment of counsel reasonably
satisfactory to such Indemnified Party, and shall assume the payment of all fees
and expenses, provided that the failure of any Indemnified Party so to notify
the Indemnifying Party shall not relieve the Indemnifying Party of its
obligations hereunder except to the extent that the Indemnifying Party is
materially prejudiced by such failure to notify.  In any such proceeding, any
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party
unless (a) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel, (b) in the reasonable judgment of such
Indemnified Party representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them,
including one or more defenses or counterclaims that are different from or in
addition to those available to the Indemnifying Party, or (c) the Indemnifying
Party shall have failed to assume the defense within 30 days of notice pursuant
to this Section 3.03.  It is understood that, in connection with any proceeding
or related proceedings in the same jurisdiction, the Indemnifying Party shall
not be liable for the reasonable fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) at any time for all such
Indemnified Parties, and that all such fees and expenses shall be reimbursed as
they are incurred.  In the case of any such separate firm for the Indemnified
Parties, such firm shall be designated in writing by the Indemnified Parties. 
The Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent, or if
there be a final judgment for the plaintiff, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against any loss
or liability (to the extent stated above) by reason of such settlement or
judgment.  Without the prior

 

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written consent of the Indemnified Party, no Indemnifying Party shall effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement (i) includes
an unconditional release of such Indemnified Party from all liability arising
out of such proceeding, and (ii) does not include any injunctive or other
equitable or non-monetary relief applicable to or affecting such Indemnified
Person.

 

Section 3.04.                                             Contribution.  If the
indemnification provided for in this Article 3 is unavailable to the Indemnified
Parties in respect of any Damages, then each Indemnifying Party, in lieu of
indemnifying the Indemnified Parties, shall contribute to the amount paid or
payable by such Indemnified Party, in such proportion as is appropriate to
reflect the relative fault of the Indemnifying Party and Indemnified Party in
connection with the actions, statements or omissions that resulted in such
Damages as well as any other relevant equitable considerations.  The relative
fault of such Indemnifying Party and Indemnified Party shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission.  The amount paid or
payable by a party as a result of any Damages shall be deemed to include,
subject to the limitations set forth in this Agreement, any reasonable
attorneys’ or other reasonable fees or expenses incurred by such party in
connection with any proceeding to the extent such party would have been
indemnified for such fees or expenses if the indemnification provided for in
this Article 3 was available to such party in accordance with its terms.

 

The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 3.04 were determined by pro rata allocation or by any
other method of allocation that does not take into account the equitable
considerations referred to in the immediately preceding paragraph. 
Notwithstanding the provisions of this Section 3.04, no Shareholder shall be
required to contribute, in the aggregate, any amount in excess of the amount by
which the proceeds actually received by such Shareholder from the sale of the
Registrable Securities subject to the proceeding exceeds the amount of any
damages that such Shareholder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, except
in the case of fraud by such Shareholder.  Each Shareholder’s obligation to
contribute pursuant to this Section 3.03 is several in the proportion that the
proceeds of the offering received by such Shareholder bears to the total
proceeds of the offering received by all such Shareholders and not joint.

 

No Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from any
Person who was not guilty of such fraudulent misrepresentation.  The indemnity
and contribution agreements contained in this Article 3 are in addition to any
liability that the Indemnifying Parties may have to the Indemnified Parties.

 

Section 3.05.                                             Other
Indemnification.  Indemnification similar to that provided in this Article 3
(with appropriate modifications) shall be given by the Company and each
Shareholder participating therein with respect to any required registration or
other qualification

 

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of securities under any foreign, federal or state law or regulation or
governmental authority other than the Securities Act.

 

ARTICLE 4

MISCELLANEOUS

 

Section 4.01.                                             Binding Effect;
Assignability.

 

(a)                                  This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective heirs,
successors, legal representatives and permitted assigns.  Any Shareholder that
ceases to own of record any Registrable Securities shall cease to be bound by
the terms hereof (other than (i) the provisions of Article 3 applicable to such
Shareholder with respect to any offering of Registrable Securities completed
before the date such Shareholder ceased to own any Registrable Securities, and
(ii) this Article 4).

 

(b)                                 Neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by any party hereto pursuant to any Transfer of Registrable
Securities or otherwise, except that each Shareholder may assign rights
hereunder to any Permitted Transferee of such Shareholder.  Any such Permitted
Transferee shall (unless already bound hereby) execute and deliver to the
Company an agreement to be bound by this Agreement in the form of Exhibit A
hereto (a “Joinder Agreement”) and shall thenceforth be a “Shareholder”.

 

(c)                                  Nothing in this Agreement, expressed or
implied, is intended to confer on any Person other than the parties hereto, and
their respective heirs, successors, legal representatives and permitted assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.

 

Section 4.02.                                             Notices.  Any notice,
report, approval, waiver, consent or other communication (each, a “Notice”)
required or permitted to be given hereunder shall be in writing and shall be
deemed given or delivered: (i) when delivered personally; (ii) one business day
following deposit with a recognized overnight courier service that obtains a
receipt, provided such receipt is obtained, and provided further that the
deposit occurs prior to the deadline imposed by such service for overnight
delivery; (iii) when transmitted, if sent by electronic mail, provided a read
receipt is delivered to the sender, in each case provided such communication is
addressed to the intended recipient thereof as set forth below:

 

if to the Company to:

 

Behringer Harvard REIT I, Inc.

17300 Dallas Parkway

Suite 1010

Dallas, Texas 75248

Attention: Telisa Webb Schelin, Esq.

Fax: (214) 365-7112

Email: tschelin@behringerharvard.com

 

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with copies (which shall not constitute notice) to:

 

Proskauer Rose LLP

Eleven Times Square

New York, New York 10036

Attention:  Peter M. Fass

James P. Gerkis

Fax: (212) 969-2900

Email:  pfass@proskauer.com

jgerkis@proskauer.com

 

and:

 

Shefsky & Froelich, Ltd.

111 East Wacker

Suite 2800

Chicago, Illinois 60601

Attention: Michael J. Choate

Fax: (312) 275-7554

Email: mchoate@shefskylaw.com

 

if to any Shareholder, at the address for such Shareholder listed on the
signature pages below or otherwise provided to the Company as set forth below.

 

A party shall, as soon as reasonably practicable, give Notice in writing to the
other party of a change in its address for the purposes of this Section 4.02. 
The failure of any party to give notice shall not relieve any other party of its
obligations under this Agreement except to the extent that such party is
actually prejudiced by such failure to give notice.

 

Any Person who becomes a Shareholder after the date hereof shall provide its
address and fax number to the Company.

 

Section 4.03.                                             Waiver; Amendment;
Termination.  No provision of this Agreement may be waived except by an
instrument in writing executed by the party against whom the waiver is to be
effective.  No provision of this Agreement may be amended or otherwise modified
except by an instrument in writing executed by the Company and the holders of at
least 75% of the Registrable Securities held by the parties hereto at the time
of such proposed amendment or modification.

 

Section 4.04.                                             Governing Law; Venue. 
This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Maryland, and any action brought to enforce the
agreements made hereunder or any action which arises out of the relationship
created hereunder shall be brought exclusively in City of Dallas, State of
Texas.

 

Section 4.05.                                             Jurisdiction.  The
parties hereby agree that any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby shall be brought in any

 

E-20

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state or federal court in the City of Dallas, Texas, so long as one of such
courts shall have subject matter jurisdiction over such suit, action or
proceeding, and that any cause of action arising out of this Agreement shall be
deemed to have arisen from a transaction of business in the State of Texas, and
each of the parties hereby irrevocably consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection that it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding in any such court or that any such suit,
action or proceeding which is brought in any such court has been brought in an
inconvenient form.  Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court.  Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 4.02 shall be deemed
effective service of process on such party.

 

Section 4.06.                                             WAIVER OF JURY TRIAL. 
EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 4.07.                                             Specific Enforcement. 
Each party hereto acknowledges that the remedies at law of the other parties for
a breach or threatened breach of this Agreement would be inadequate and, in
recognition of this fact, any party to this Agreement, without posting any bond
or furnishing other security, and in addition to all other remedies that may be
available, shall be entitled to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent injunction
or any other equitable remedy that may then be available.

 

Section 4.08.                                             Counterparts;
Effectiveness.  This Agreement may be executed (including by facsimile or other
electronic transmission) with counterpart signature pages or in any number of
counterparts, each of which shall be deemed to be an original, and all of which
shall, taken together, be considered one and the same agreement, it being
understood that each party need not sign the same counterpart.  This Agreement
shall become effective when each party hereto shall have executed and delivered
this Agreement.  Until and unless each party has executed and delivered this
Agreement, this Agreement shall have no effect and no party shall have any right
or obligation hereunder (whether by virtue of any other oral or written
agreement or other communication).

 

Section 4.09.                                             Entire Agreement. 
This Agreement constitutes the entire agreement and understanding among the
parties hereto and supersedes all prior and contemporaneous agreements and
understandings, both oral and written, among the parties hereto with respect to
the subject matter hereof.

 

Section 4.10.                                             Severability.  If any
term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party.  Upon such a determination, the

 

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parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner so that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.

 

Section 4.11.                                             Independent Nature of
Shareholders’ Obligations and Rights.  The obligations of each Shareholder
hereunder are several and not joint with the obligations of any other
Shareholder hereunder, and no Shareholder shall be responsible in any way for
the performance of the obligations of any other Shareholder hereunder.  Nothing
contained herein or in any other agreement or document delivered at any closing,
and no action taken by any Shareholder pursuant hereto or thereto, shall be
deemed to constitute the Shareholders as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the
Shareholders are in any way acting in concert with respect to such obligations
or the transactions contemplated by this Agreement.  Each Shareholder shall be
entitled to protect and enforce its rights, including the rights arising out of
this Agreement, and it shall not be necessary for any other Shareholder to be
joined as an additional party in any proceeding for such purpose.

 

[Signature Pages Follow]

 

E-22

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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement or have
caused this Agreement to be duly executed by their respective authorized
officers as of the day and year first above written.

 

 

BEHRINGER HARVARD REIT I, INC.

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[Signature page to the Registration Rights Agreement]

 

E-23

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BEHRINGER HARVARD REIT I SERVICES HOLDINGS, LLC

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

Address for Notices:

 

 

 

Behringer Harvard REIT I Services Holdings,

 

LLC15601 Dallas Parkway

 

Suite 600

 

Addison, Texas 75001

 

Attention: Stanton P. Eigenbrodt

 

 

 

 

 

With Copies of Notices to:

 

 

 

Jenner & Block LLP

 

353 North Clark Street

 

Chicago, Illinois 60654

 

Attention: Donald E. Batterson

 

Jeffrey R. Shuman

 

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Exhibit A

 

JOINDER TO REGISTRATION RIGHTS AGREEMENT

 

This Joinder Agreement (this “Joinder Agreement”) is made as of the date written
below by the undersigned (the “Joining Party”) in accordance with the
Registration Rights Agreement dated as of August 31, 2012 (as the same may be
amended from time to time, the “Registration Rights Agreement”), among Behringer
Harvard REIT I, Inc. and the Shareholders party thereto.  Capitalized terms
used, but not defined, herein shall have the respective meanings ascribed to
such terms in the Registration Rights Agreement.

 

The Joining Party hereby acknowledges, agrees and confirms that, by its
execution of this Joinder Agreement, the Joining Party shall be deemed to be a
party to the Registration Rights Agreement as of the date hereof as a “Permitted
Transferee” of a Shareholder thereto, and shall have all of the rights and
obligations of a “Shareholder” thereunder as if it had executed the Registration
Rights Agreement.  The Joining Party hereby ratifies, as of the date hereof, and
agrees to be bound by, all of the terms, provisions and conditions contained in
the Registration Rights Agreement (including without limitation Section 4.01
thereof).

 

IN WITNESS WHEREOF, the undersigned has executed this Joinder Agreement as of
the date written below.

 

Date:                              ,        

 

 

[NAME OF JOINING PARTY]

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

Address for Notices:

 

 

 

 

 

Behringer Advisors LLC

 

15601 Dallas Parkway

 

Suite 600

 

Addison, Texas 75001

 

Attention: Stanton P. Eigenbrodt

 

 

 

 

 

With Copies of Notices to:

 

 

 

Jenner & Block LLP

 

353 North Clark Street

 

Chicago, Illinois 60654

 

Attention: Donald E. Batterson

 

Jeffrey R. Shuman

 

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EXHIBIT F

 

FORM OF CONSULTING AGREEMENT

 

See attached.

 

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

 

FORM OF  INTERIM CEO CONSULTING AGREEMENT

 

INTERIM CEO CONSULTING AGREEMENT dated as of August 31, 2012 (this “Agreement”),
between Behringer Harvard REIT I, Inc., a Maryland corporation (the “Company”),
and Robert S. Aisner (the “Consultant”).

 

WHEREAS, the Board of Directors of the Company desires to engage Consultant to
provide management consulting services, upon the terms and subject to the
conditions hereinafter set forth; and

 

WHEREAS, the Consultant has agreed to provide such management consulting
services, upon the terms and subject to the conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the above premises and for other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:

 

1.                                       Engagement:

 

(a)                                  The Company, through the action of its
Board of Directors (the “Board”), hereby engages the Consultant, and the
Consultant will serve the Company, as a management consultant.  During the term
of this Agreement, the Consultant will serve as the interim non-employee chief
executive officer of the Company (“CEO”) on a part-time basis.  The Company
confirms that the Consultant has been duly elected as the CEO of the Company and
will remain as an executive officer of the Company during the term of this
Agreement.

 

(b)                                 Each party represents and warrants to the
other party that it or he is not subject to any outstanding agreement that would
conflict with any provisions of this Agreement or that would preclude the
performance by it or him of its obligations hereunder.  The Company acknowledges
that this Agreement only obligates the Consultant to serve approximately 20
percent of his working time with the Company, that the Consultant has numerous
other commitments, including on behalf of other real estate investment trusts
and other investment and similar programs sponsored by Behringer Harvard
Holdings, LLC (the “Sponsor”) and its affiliates, which may compete with the
Company and place demands on the time of the Consultant (the “Competing
Demands”), and that as an executive officer of the Sponsor, the Consultant faces
certain of the conflicts of interest described in filings of the Company with
the Securities and Exchange Commission.

 

2.                                       Scope of Engagement:

 

(a)                                  The Board has engaged the Consultant to
serve as the interim non-employee CEO of the Company, to provide management
services consistent with the services rendered by the Consultant to the Company
in his capacity as CEO prior to entry into this Agreement and to assist with the
transition of the CEO position to such individual as hereafter may be designated
by the Board.  The key issues for the Consultant to address that are significant
to such engagement will be determined by a committee of independent directors of
the Board (the “Special Committee”), consisting as of the date hereof of Messrs.
Dannis, Partridge and Witten.  The members of the Special Committee may change
from time to time.  Subsequent to the time

 

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that the Company has engaged and elected a successor CEO and if the Board so
desires, the Consultant shall continue to serve (and shall be duly elected) as a
senior executive officer of the Company (during the remaining term of this
Agreement) in such specific senior executive officer position as the Board shall
determine, provided the Consultant’s duties shall remain the same subject to the
transition of duties to the successor CEO.

 

(b)                                 The Consultant will devote approximately 20
percent of his working time to this engagement during the term of this Agreement
(as directed by the Special Committee), notwithstanding the Competing Demands. 
In the course of performing his responsibilities under this Agreement, the
Consultant will report directly to the Special Committee.  It is understood and
agreed by the Company, in light of the fact that the Consultant will spend only
approximately 20 percent of his working time serving the Company under this
Agreement, that the actual times or days of service by the Consultant (and his
location when rendering such services to the Company) will be flexible and at
Consultant’s reasonable discretion, consistent with past practice.

 

(c)                                  Nothing contained in this Agreement shall
restrict Consultant from being employed by or accepting employment, consulting
arrangements or other positions with (or otherwise rending any advice or
services to) the Sponsor or any real estate or other investment or similar
program sponsored by the Sponsor or any of its affiliates.

 

(d)                                 During the term of this Agreement, the
Company will nominate the Consultant for election as a director at each meeting
of stockholders called for the purpose of electing directors and use its
reasonable best efforts to cause the Consultant to be elected (or appointed) as
a member of the Board, consistent with the efforts of the Company to cause other
nominees to the Board to be elected.

 

3.                                       Term:  The term of this Agreement will
commence as of the date of this Agreement and will continue until the date that
is 180 days after the date of this Agreement, and thereafter shall automatically
renew for successive three month periods unless (a) terminated with or without
cause by either party on 45 days’ prior written notice, or (b) terminated by
either party immediately upon written notice from one party that the other party
has materially breached this Agreement. If the Company believes that the
Consultant has materially breached this Agreement, the Company shall provide the
Consultant written notice of such act or failure to act, and the Consultant
shall have fifteen (15) days following receipt of such notice by the Company to
cure such act or failure to act, and if the Consultant cures such act or failure
to act within such period, such act or failure to act shall not be considered a
material breach under this Agreement and this Agreement may not be terminated
pursuant to clause (b) of the preceding sentence.  Upon such termination, all
earned and unpaid compensation for services rendered prior to the effective date
of such termination and documented expenses owing to the Consultant prior to and
including such date of termination shall be immediately due and payable.  Any
termination pursuant to clause (b) above shall not affect any party’s rights or
remedies in connection with a breach of this Agreement by the other party.

 

4.                                       Compensation:  The Company shall pay
the Consultant for his consulting services a fee of $22,166.67 per month during
the term of this Agreement, payable on or before the first day of each
successive month, to perform the services as outlined in Section 2.  Upon
termination of this Agreement and the cessation of service of the Consultant as
an officer of the Company, if the Consultant remains a member of the Board, the
Consultant shall be entitled to compensation

 

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equivalent to that received by the independent directors of the Board at that
time.  For the avoidance of doubt, the Consultant shall not receive compensation
related to his service as a member of the Board during his engagement hereunder
as interim non-employee CEO or in another executive officer position subsequent
to the engagement and election of a successor CEO.

 

5.                                       Expenses:  The Consultant shall be
entitled to reimbursement for all travel, communications and other out-of-pocket
expenses reasonably incurred by him in the performance of his duties (the
“Expenses”) upon presentation of documentation therefor in accordance with
Company policy.  The Consultant shall seek prior written approval for individual
Expenses (other than travel costs and expenses) in excess of $3,000 from the
Board or a designated committee of the Board or a designated director.

 

6.                                       Proprietary Work Product and
Confidential Company Information:

 

(a)                                  Consultant agrees to promptly disclose to
the Company every Company Innovation (as hereafter defined).  Consultant agrees
that the Company owns and shall continue to own all right, title and interest in
and to the Company Innovations.  All Company Innovations shall be considered
“works made for hire” (as that term is used in Section 101 of the United States
Copyright Act, 17 U.S.C. § 101) for the Company and, as between the Company and
Consultant, the Company shall be the sole and exclusive owner of all right,
title and interest in and to each Company Innovation, including all intellectual
property rights therein.  To the extent any Company Innovation is not considered
a “work made for hire,” Consultant shall, and hereby does, exclusively and
irrevocably assign, transfer and otherwise convey to the Company or the
Company’s designee, the Consultant’s entire worldwide right, title and interest
in and to all Company Innovations and all associated records and intellectual
property rights. The Consultant will cooperate as reasonably requested by the
Company (at the expense of the Company) with any registration of any Company
Innovation.

 

(b)                                 “Company Innovations” shall mean any
processes, machines, modeling tools, compositions of matter, improvements,
inventions (whether or not protectable under patent laws), works of authorship,
information fixed in any tangible medium of expression (whether or not
protectable under copyright laws), moral rights, mask works, trademarks, trade
names, trade dress, trade secrets, know-how, ideas (whether or not protectable
under trade secret laws), including without limitation all new or useful art,
combinations, discoveries, formulae, manufacturing techniques, technical
developments, discoveries, artwork, software, and designs, that the Consultant,
solely or jointly with other employees or consultants of the Company, conceives,
reduces to practice, creates, derives, develops or makes during the term of this
Agreement in connection with Consultant’s engagement hereunder or which is
developed using the Company’s equipment, resources or other property or
facilities which are related to the business of the Company.

 

(c)                                  Consultant will have access to the
Company’s confidential business information, trade secrets, intellectual
property and other confidential or proprietary information, including without
limitation: tenant rosters, marketing information, rental market data,
construction cost reports, cost information, proprietary processes, proprietary
software, databases and other financial and business information relating to the
Company and its transactions or other confidential information relating to the
Company and/or its business (collectively, “Confidential Information”); provided
that “Confidential Information” does not include information that (a) is

 

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or becomes available to the public without any breach by Consultant of his
obligations hereunder, (b) is obtained from a third party that the Consultant
believes was not bound by an obligation of confidentiality or (c) is
independently developed by Consultant other than in connection with his
engagement hereunder.  Except (A) (i) in connection with Consultant’s
performance of services under this Agreement, (ii) in Consultant’s capacity as a
director of the Company, (iii) to any member of the Behringer Group in
connection with such member’s performance of services under the Administrative
Services Agreement, dated as the date hereof, between the Company and Behringer
Advisors LLC, or the Property Management Agreement dated as the date hereof,
among the Company, Behringer Harvard Operating Partnership I LP, and HPT
Management Services LLC, (iv) in connection with the exercise, in good faith, of
any rights by any member of the Behringer Group under the Master Modification
Agreement, dated as the date hereof, among the Company, Behringer Harvard REIT I
Services Holding, LLC, Behringer Harvard Advisors, LLC and HPT Management
Services LLC, or any Ancillary Agreement as defined in such Master Modification
Agreement, or (B) as permitted by this Agreement or with the written consent of
the Company, the Consultant, shall not at any time during or after the term of
this Agreement divulge, disclose or communicate, directly or indirectly, to any
person, corporation or other entity or use for the Consultant’s or any other
party’s benefit other than the Company and its affiliates, any Confidential
Information except as required by law or order of a court.  The provisions of
this Section 6(c) shall expire and cease to have any further force and effect on
the third anniversary of the date of this Agreement.

 

(d)                                 Promptly upon termination of this Agreement,
the Consultant shall return all property of the Company and materials from the
Company which came into the Consultant’s possession during the term of this
Agreement that relate to the Company, its business, its properties, its
investors or its tenants, including without limitation all Confidential
Information and Company Innovations.

 

7.                                       Independent Contractor Status:  It is
the express intention of the Company and Consultant that the Consultant performs
the covered services under this Agreement as an independent contractor to the
Company.  Nothing in this Agreement shall in any way be construed to constitute
the Consultant as an employee, and, unless provided for by the Board in advance
in writing, the Consultant is not authorized to bind the Company to any
liability or obligation or to represent that the Consultant has any such
authority.  Each party acknowledges and agrees that the Consultant is obligated
to report as income all compensation received by the Consultant pursuant to this
Agreement.  The Consultant agrees to and acknowledges the obligation to pay all
self-employment and other taxes on such income.  Since the Consultant will not
be an employee of the Company, but shall act as an independent contractor, the
Company will not withhold from any amounts payable any federal, state, city or
any other taxes.  The Company and the Consultant agree that the Consultant will
receive no Company-sponsored benefits from the Company.

 

8.                                       Indemnification and D&O Insurance:  The
Company agrees to defend, indemnify (including, without limitation, by providing
for the advancement of expenses and reasonable attorneys’ fees) and hold
harmless the Consultant for any and all acts taken or omitted to be taken by the
Consultant hereunder (except for bad faith, gross negligence or willful
misconduct) as if the Consultant was a director of the Company as provided in
the charter and bylaws of the Company in accordance with the same terms,
conditions, limitations, standards, duties, rights and obligations as a
director.  If, during the term of this Agreement, the Company enters into an

 

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indemnification or similar agreement covering such indemnification matters with
any Company director, the Company will offer and enter into a similar
indemnification agreement with the Consultant.  The provisions of this Section
shall survive any termination of this Agreement.  In addition, until the five
(5) year anniversary of the termination or expiration of this Agreement, the
Company shall maintain in effect liability insurance coverage for the Consultant
(as an insured person) with respect to his service under this Agreement, on the
same or more favorable terms and conditions (from the perspective of the
Consultant) as under the liability insurance policies of the Company in effect
as of the date of this Agreement.

 

9.                                       Governing Law; Venue:

 

(a)                                  This Agreement shall be governed and
construed in accordance with the laws of the State of Texas (without giving
effect to any conflict of law principles).

 

(b)                                 The Company and the Consultant expressly and
irrevocably agree that any suit, action or proceeding arising out of or relating
to this Agreement and the transactions contemplated herein shall be subject to
the exclusive jurisdiction of any state or Federal court sitting in Dallas
County, Texas, United States of America and, by the execution and delivery of
this Agreement, thus expressly waive any objection which they may have now or
hereafter to the laying of the venue or to the jurisdiction of any such suit,
action or proceeding, and they irrevocably submit generally and unconditionally
to the jurisdiction of any such court in any such suit, action or proceeding. 
Each party hereto (i) waives to the fullest extent permitted by law any
objection which it or he may now or hereafter have to the courts referred to
above on the grounds of inconvenient forum or otherwise as regards any and all
disputes between the parties hereto which may arise pursuant to this Agreement,
(ii) waives to the fullest extent permitted by law any objection which it or he
may now or hereafter have to the laying of venue in the courts referred to above
for any dispute between the parties hereto which may arise pursuant to this
Agreement, and (iii) agrees that a judgment or order of any court referred to
above in connection with any and all disputes between the parties hereto which
may arise pursuant to this Agreement is conclusive and binding on it or him and
may be enforced against it or him in the courts of any other jurisdiction.

 

10.                                 Miscellaneous:

 

(a)                                  Assignability.  Neither party may sell,
assign or delegate any rights or obligations under this Agreement.

 

(b)                                 Entire Agreement.  This Agreement, including
the annex hereto, constitutes the entire agreement and understanding between the
parties with respect to the subject matter of this Agreement and supersedes all
prior written and oral agreements and understandings between the parties
regarding the subject matter of this Agreement.

 

(c)                                  Headings.  Headings are used in this
Agreement for reference only and shall not be considered when interpreting this
Agreement.

 

(d)                                 Notices.  Any notice, approval, consent,
waiver or other communication required or permitted by this Agreement to be
given to a party (a “Notice”) shall be in writing and shall be delivered
personally or by commercial messenger or courier service, or mailed by U.S.
registered or certified mail (return receipt requested), or sent via facsimile
(with receipt of confirmation of

 

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complete transmission), to the party at the party’s address or facsimile number
written below or at such other address or facsimile number as the party may have
previously specified by like Notice.  Each Notice shall be deemed given and
effective upon actual receipt (or refusal of receipt).

 

(1)                                  If to the Company, to:

Behringer Harvard REIT I, Inc.

c/o Mr. Charles G. Dannis

Crosson Dannis, Inc.

6060 North Central Expressway (Suite 860)

Dallas, TX  75206

Facsimile:  (214) 361-2632

 

with copies (which shall not constitute notice) to:

 

Proskauer Rose LLP

Eleven Times Square

New York, New York 10036

Attention:   Peter M. Fass

James P. Gerkis

Facsimile: (212) 969-2900

 

Shefsky & Froelich

111 East Wacker, Suite 2800

Chicago, Illinois 60601

Attention:  Michael Choate

Facsimile:  (312) 275-7554

 

(2)                                  If to the Consultant, to:

 

Mr. Robert S. Aisner

c/o Behringer Harvard

15601 Dallas Parkway (Suite 600)

Addison, TX  75001

Facsimile:  (214) 655-1610

 

with copies (which shall not constitute notice) to:

 

Jenner & Block LLP

353 N. Clark Street

Chicago, Illinois 60654

Attention:  Donald E. Batterson

Jeffrey R. Shuman

Facsimile: (312) 923-2707

 

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(e)                                  Attorneys’ Fees.  In any suit, action or
proceeding brought by one of the parties to this Agreement to enforce or
interpret the provisions of this Agreement, the prevailing party shall be
entitled to reimbursement or payment of its reasonable attorneys’ fees and
expenses.

 

(f)                                    Severability.  If any provision of this
Agreement is found to be illegal or unenforceable, the other provisions shall
remain effective and enforceable to the greatest extent permitted by law.

 

[Remainder of Page Intentionally Left Blank]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first written above.

 

 

 

The Company:

 

 

 

 

 

BEHRINGER HARVARD REIT I, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

Consultant:

 

 

 

 

 

Robert S. Aisner

 

F-8

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EXHIBIT G

 

FORM OF LICENSE AGREEMENT

 

See attached.

 

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

 

FORM OF  LICENSE AGREEMENT

 

This LICENSE AGREEMENT (this “Agreement”) is made and entered into this 31st day
of August, 2012, (the “Effective Date”), by and between BEHRINGER HARVARD
HOLDINGS, LLC, a Delaware limited liability company (the “Licensor”), and
BEHRINGER HARVARD REIT I, INC., a Maryland corporation (the “Licensee”).

 

RECITALS

 

WHEREAS, Licensor is the owner of valid and subsisting rights in and to the
service marks “BEHRINGER HARVARD” (U.S. Registration No. 2,947,624) and the
“BEHRINGER HARVARD MISCELLANEOUS CIRCULAR DESIGN LOGO” (U.S. Registration No.
3,200,214) (referred to herein collectively as the “Licensed Mark”); and

 

WHEREAS, Licensee, Behringer Harvard REIT I Services Holdings, LLC (“Services
Holdings”), Behringer Advisors, LLC (“Advisor”), and HPT Management Services,
LLC (“Property Manager”) have entered into that certain Master Modification
Agreement of even date herewith (the “Modification Agreement”); and

 

WHEREAS, Property Manager and Licensee have entered into that certain Sixth
Amended and Restated Property Management Agreement of even date herewith,
pursuant to the terms of which Property Manager provides certain property
management and other services to Licensee in accordance with the terms and
conditions thereof (the “Property Management Agreement”); and

 

WHEREAS, Licensor desires to permit Licensee to continue to utilize the Licensed
Mark solely in connection with the operation and promotion of Licensee’s real
estate business in substantially the same manner as conducted immediately prior
to the Effective Date (the “REIT Operations”) and as part of Licensee’s
corporate name, in each case on the terms and subject to the conditions set
forth in this Agreement; and

 

NOW, THEREFORE, in consideration of the mutual covenants and promises contained
in this Agreement and the Modification Agreement and the transactions
contemplated thereby, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged and accepted by the parties to this
Agreement, Licensor and Licensee mutually agree as follows:

 

AGREEMENTS

 

1.                                      Grant of License; Territory.

 

a.                                       On the terms and subject to the
conditions of this Agreement, Licensor hereby grants to Licensee, for the period
specified in Section 5 hereof, a non-exclusive, royalty-free, limited and
nontransferable license to use the Licensed Mark in the United States solely for
the purpose of identifying and promoting the REIT Operations and as a part of
Licensee’s corporate name. In addition, each person or entity directly or
indirectly controlled by Licensee on or after the Effective Date, either through
the ownership of voting securities or otherwise (each such

 

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person or entity a “Licensee Subsidiary”), shall have all of the rights granted
to Licensee in this Section 1(a), but only during such period that such person
or entity is directly or indirectly controlled by Licensee, either through the
ownership of voting securities or otherwise. Any reference in this Agreement to
use of the Licensed Mark by or other actions of Licensee shall be deemed to
include use of the Licensed Mark by or other actions of any Licensee Subsidiary
during such period that such Licensee Subsidiary is directly or indirectly
controlled by Licensee, either through the ownership of voting securities or
otherwise. Licensee shall be responsible and liable for ensuring that each
Licensee Subsidiary complies with the terms and conditions of this Agreement.
All restrictions and obligations of Licensee hereunder shall also apply to each
Licensee Subsidiary, and Licensee shall cause each Licensee Subsidiary to comply
with the foregoing.

 

b.                                      Licensor expressly reserves all rights
with respect to the Licensed Mark not expressly granted herein. Except as
provided in Section 1(a) with respect to a Licensee Subsidiary, Licensee shall
have no right to sublicense the use of the Licensed Mark to any other person or
entity without the prior written consent of Licensor, which may be withheld or
granted in Licensor’s sole and absolute discretion.

 

2.                                      Acknowledgement of Ownership.

 

a.                                       Licensee acknowledges the great value
of the goodwill associated with the Licensed Mark and the ownership of the
Licensed Mark by Licensor. Licensee agrees that nothing in this Agreement shall
give Licensee any right, title, or interest in or to the Licensed Mark other
than the license rights granted in this Agreement. Licensee further acknowledges
that all goodwill arising from use of the Licensed Mark by Licensee and any
Licensee Subsidiary shall inure exclusively to the benefit of Licensor. All
artwork, designs, stylized logotypes or other presentation materials whatsoever
including the Licensed Mark or any elements thereof, and all copies and extracts
thereof shall, notwithstanding their invention or use by Licensee, be and remain
the sole property of Licensor. Nothing in this Agreement shall be construed to
prevent Licensor from granting any other licenses for the use of the Licensed
Mark or from utilizing the Licensed Mark, or any variation thereof, in any
manner whatsoever.

 

b.                                      Licensee agrees that it shall not attack
the title of Licensor to the Licensed Mark, the validity of the Licensed Mark,
or the validity of this Agreement. Licensee further agrees that it shall not at
any time commence any opposition or cancellation proceeding regarding the
Licensed Mark, or any other similar mark of Licensor, with the U.S. Patent and
Trademark Office or any other agency that registers trademarks, commence any
civil proceeding for damages or injunctive relief or make any other legal claim
that would, directly or indirectly, hinder the value of or the Licensor’s
ownership or use of the Licensed Mark or prevent the U.S. Patent and Trademark
Office or any other agency that registers trademarks from issuing a trademark
registration to Licensor for the Licensed Mark, or any variations thereof, or
from renewing any trademark registration for the Licensed Mark, or any
variations thereof.

 

c.                                       Licensee shall not register or attempt
to register the Licensed Mark alone or as part of its own trademark, service
mark, Internet domain name, copyright, assumed name or trade name (except as may
be otherwise required by applicable law in connection with Licensee’s REIT
Operations during the term of this Agreement), nor shall Licensee use in such

 

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manner or attempt to register any name or designation confusingly similar to the
Licensed Mark as determined in Licensor’s sole and absolute discretion.

 

d.                                      Licensee may not use the Licensed Mark
in any manner that disparages Licensor, the Licensed Mark, Licensor’s products
or services, or in any manner which, in Licensor’s reasonable judgment, may
diminish or otherwise damage Licensor’s goodwill in the Licensed Mark or
Licensor’s business reputation.

 

e.                                       The provisions of this Section 2 shall
survive the expiration or termination of this Agreement for any reason.

 

3.                                      Quality Control.

 

a.                                       Licensee shall use the Licensed Mark
solely as permitted in Section 1(a) above in a manner that will reasonably
protect Licensor’s rights and goodwill therein, and will comply with all
reasonable and customary trademark usage guidelines delivered to Licensee by
Licensor from time to time, including those regarding the use of notices,
legends, or markings that may be required by Licensor in order to give customary
notice of ownership, including those provided in Section 4 hereof.

 

b.                                      Licensee shall, upon Licensor’s
reasonable request: (i) permit Licensor to inspect the manner in which the
Licensee exercises the rights granted hereunder to use the Licensed Mark, and
(ii) make available for Licensor’s inspection, at reasonable times and after
reasonable notice from Licensor, all of Licensee’s materials relating to or
displaying the Licensed Mark or any elements thereof.

 

c.                                       Licensee agrees that the products
and/or services offered in connection with the Licensed Mark shall be sold
and/or distributed in accordance with all Federal, State and local laws.

 

d.                                      If at any time the Licensee’s
promotional materials, documents or signage bearing the Licensed Mark do not
meet the quality standards described in this Section 3, Licensor shall have the
right to require the Licensee to discontinue any and all such nonconforming uses
of the Licensed Mark immediately upon notice whereupon Licensee agrees to use
its best efforts to cease all such nonconforming uses immediately.

 

4.                                      Protection of Licensed Mark.

 

a.                                       Each time the Licensed Mark is used on
any product, document, signage, exterior display or other printed or tangible
material or on the Internet, Licensee shall legibly include either the trademark
or service mark notice “TM” or “SM”, as appropriate, or the Federal registration
notice ®, if applicable, if directed to do so by Licensor, adjacent to the first
prominent use of the Licensed Mark therein or thereon.

 

b.                                      When directed by Licensor to do so,
Licensee shall include the following notice on any packaging, product,
advertising, or promotional materials incorporating the Licensed Mark presented
in any medium now known or hereafter created:

 

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“BEHRINGER HARVARD” is a service mark of Behringer Harvard Holdings, LLC.

 

c.                                       Licensee agrees to provide Licensor
with such assistance as Licensor may reasonably require, at Licensor’s cost and
expense, in the procurement or maintenance of any protection, or the
enforcement, of Licensor’s rights to the Licensed Mark or any similar mark.

 

d.                                      Licensee agrees that at all times during
the term of this Agreement it will diligently and continuously cause to be
promoted and rendered the REIT Operations as set forth in Section 1 hereof.
Licensor shall not be under any obligation whatsoever to utilize the Licensed
Mark or any variation thereof.

 

5.                                      Term.

 

This Agreement shall continue in force and effect from the Effective Date and
shall automatically terminate upon the expiration or termination of the Property
Management Agreement for any reason, unless terminated earlier as provided for
herein.

 

6.                                      Termination.

 

a.                                       If Licensee breaches in any material
respect or otherwise fails to perform in any material respect any of its
obligations hereunder, Licensor shall have the right to terminate this Agreement
upon ninety (90) days prior written notice to Licensee, but only in the event
such failure of performance is not cured to Licensor’s satisfaction within such
ninety (90) day period. Such termination of this Agreement shall be without
prejudice to any rights or remedies that Licensor may otherwise have against
Licensee, which rights and remedies shall survive any such termination.

 

b.                                      If at any time during the term of this
Agreement Licensee (i) ceases to conduct the REIT Operations under the Licensed
Mark or (ii) fails to perform its obligation to nominate or elect/appoint two
directors designated by Licensor to the board of directors of Licensee pursuant
to Section 6.4 of the Modification Agreement, Licensor, in addition to all other
remedies available to it hereunder, may immediately terminate this Agreement by
giving written notice of termination to Licensee.

 

c.                                       If Licensee files a petition in
bankruptcy or is adjudicated bankrupt or if a petition in bankruptcy is filed
against Licensee or if it becomes insolvent, or makes an assignment for the
benefit of its creditors or an arrangement pursuant to any bankruptcy law, or if
Licensee liquidates or discontinues its business or if a receiver is appointed
for it or its business, or if the shares of Licensee are listed on a national
securities exchange, or in the event of a Change of Control (as defined below)
of Licensee, the license hereby granted and this Agreement shall automatically
terminate forthwith without any notice whatsoever being necessary. In the event
this Agreement is terminated by Licensor pursuant to this Section 6(c),
Licensee, its receivers, representatives, trustees, agents, administrators,
successors and/or assigns shall have no right to sublicense, sell, exploit or in
any way deal with or in or use the Licensed Mark or any variation thereof,
except with and under the special consent and instructions of Licensor in
writing, which they shall be obligated to follow. “Change of Control” shall
mean, with respect to the Licensee, any event or series of related events
(including, without limitation, issue, transfer or other disposition of shares
of Equity Interests (as defined below) of the Licensee, merger, share

 

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exchange or consolidation) after which (a) any person is or becomes the
“beneficial owner” (as defined in Rule 13d-3 of the Securities Exchange Act of
1934, as amended), directly or indirectly, of Equity Interests representing
greater than 50% of the combined voting power of the then outstanding Equity
Interests of the Licensee and (b) the beneficial owners, directly or indirectly,
of Equity Interests of the Licensee immediately prior to such event or series of
related events have less than 50% of the combined voting power of the surviving
entity after such event or series of events; in addition, any event that causes,
directly or indirectly, any person other than the Licensee to become the
beneficial owner of greater than 50% of the Equity Interests of Behringer
Harvard Operating Partnership I LP, a Texas limited partnership, shall be deemed
a Change of Control of the Licensee. “Equity Interests” shall mean (i) with
respect to a corporation, as determined under the laws of the jurisdiction of
organization of such entity, shares of capital stock (whether common, preferred
or treasury), (ii) with respect to a partnership, limited liability company,
limited liability partnership or similar person, as determined under the laws of
the jurisdiction of organization of such entity, units, interests, or other
partnership or limited liability company interests, or (ii) any other equity
ownership.

 

d.                                      Upon expiration or termination of this
Agreement for any reason, Licensee agrees: (i) to, within a reasonable time but
not to exceed ninety (90) days, discontinue all use of the Licensed Mark and any
name confusingly similar thereto; (ii) to, within a reasonable time but not to
exceed ninety (90) days, delete, remove or cover-over all references to the
Licensed Mark, or any confusingly similar variation thereof, in all of
Licensee’s printed materials, signage or other exterior displays, and on the
Internet; (iii) to not thereafter, directly or indirectly, identify itself in
any manner as a licensee of Licensor or publicly identify itself as a former
licensee of Licensor; (iv) to cooperate reasonably with Licensor to ensure that
all rights in the Licensed Mark and the related goodwill remain the property of
Licensor and to execute any instruments requested by Licensor to accomplish or
confirm the foregoing; (v) that all rights granted to Licensee hereunder shall
forthwith revert to Licensor without consideration other than the mutual
covenants and considerations of this Agreement, and without notice; (vi) to
cease to conduct any business, including, without limitation, the REIT
Operations, under or to otherwise use the names “HARVARD” or “BEHRINGER” or any
confusingly similar terms and to use its best efforts to change the corporate
name of Licensee to a name that does not contain the terms “HARVARD” or
“BEHRINGER” or any confusingly similar terms which may, directly or indirectly
in the sole discretion of Licensor, indicate a continuing relationship between,
or sponsorship of, Licensee by Licensor or any of Licensor’s Affiliates; and
(vii) to deliver to Licensor or destroy within ninety (90) days from the date of
termination any and all artwork, designs, stylized logotypes or other electronic
or intangible presentation materials whatsoever including the Licensed Mark or
any elements thereof prepared by or for Licensee, and all copies and extracts
thereof.

 

e.                                       Licensee acknowledges that its failure
to cease the use and display of the Licensed Mark, or any variation thereof,
after the applicable period during which such use or display is permitted
hereunder following the termination or expiration of this Agreement will result
in immediate and irremediable damage to Licensor and to the rights of any
current or subsequent licensee. Licensee acknowledges and admits that there is
no adequate remedy at law for such failure to cease such use, and Licensee
agrees that in the event of such failure Licensor shall be entitled to equitable
relief by way of temporary and permanent injunction and temporary restraining
order and such other further relief as any court with jurisdiction may deem just
and

 

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proper. Resort to any remedies referred to herein shall not be construed as a
waiver of any other rights and remedies to which Licensor is entitled under this
Agreement or otherwise.

 

7.                                      Third-Party Infringement Proceedings.

 

Licensee agrees to promptly notify Licensor of any unauthorized use of the
Licensed Mark or any confusingly similar variation thereof by third parties of
which Licensee becomes aware. Licensor shall have the sole right but not the
obligation to pursue through negotiations, litigation, or other dispute
resolution procedure (“Litigation Rights”) any and all of its rights in the
Licensed Mark against any third party. Licensor’s exercise of such Litigation
Rights shall be in its sole discretion and shall be at its sole cost and
expense. Licensor shall have no duty to defend Licensee or itself or pursue any
actual infringement arising out of any actions by a third party. All recoveries
received by Licensor in pursuing its Litigation Rights, if any, shall be the
sole property of Licensor. Licensee will cooperate with Licensor with respect to
any Litigation Rights, as reasonably requested by Licensor and at Licensor’s
cost and expense.

 

8.                                      Representations and Warranties.

 

a.                                       Licensor represents and warrants that
this Agreement will not violate any prior licenses or rights to use the Licensed
Mark granted by Licensor to any third party.

 

b.                                      Each party hereto hereby represents and
warrants to the other that such party has the corporate, company or partnership
power and authority, as applicable, to execute and deliver this Agreement and to
perform its obligations hereunder, and that the execution, delivery and
performance of this Agreement by it have been duly authorized by all necessary
corporate, company or partnership action.

 

9.                                      Indemnification.

 

a.                                       Licensee hereby agrees to indemnify and
hold Licensor harmless from and against any and all claims, suits, liabilities,
judgments, and expenses, arising at law or in equity, attributable, in whole or
in part, to: (i) the Licensee’s use of the Licensed Mark in violation of this
Agreement or of any trademark usage guidelines provided to Licensee by Licensor
or (ii) the marketing, promotion, advertisement, distribution, or sale by
Licensee of any product or service under the Licensed Mark. Moreover, Licensee
hereby further agrees to tender to Licensor the defense of any and all such
claims, actions and lawsuits that may be brought against Licensor arising out
of, or related to, the wrongful use of the Licensed Marks by the Licensee and
the Licensee shall pay all fees and expenses (including all reasonable
attorneys’ and expert witnesses’ fees and costs of suit) incurred in connection
with defending all of these claims, actions and lawsuits; provided that payment
of fees and expenses with respect to Third-Party Infringement Claims shall be
governed by Section 9(b) below. Licensor shall control such defense with counsel
of its choice, however, Licensee shall have the right to participate in such
defense at its own cost and expense and Licensee shall provide reasonable
cooperation to Licensor and its counsel with respect thereto; provided that in
no event may Licensor settle any claim, action or lawsuit in which the Licensee
or a Licensee Subsidiary is a named defendant without the consent of the
Licensee, which consent shall not be unreasonably withheld, conditioned or
delayed. Licensor shall also have the independent right to take any action it
may

 

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deem necessary, in its sole discretion, to protect and defend itself against any
threatened action arising out of the business of Licensee or any actions or
activity by Licensee, including Licensee’s use of the Licensed Mark or any goods
or services distributed or sold under the Licensed Mark.

 

b.                                      Licensor hereby agrees to indemnify and
hold Licensee harmless from and against any and all claims, suits, liabilities,
judgments, and expenses, arising at law or in equity, arising out of or in
connection with any claims that the Licensee’s use of the Licensed Mark as
permitted hereunder infringes the United States trademark rights of a third
party (“Third-Party Infringement Claims”); provided that (i) Licensee’s use of
the Licensed Mark is in strict accordance with this Agreement, (ii) Licensee
notifies Licensor of such Third-Party Infringement Claim promptly after Licensee
learns of such Third-Party Infringement Claim, (iii) Licensor has exclusive
control over the defense or settlement of any proceedings related to such
Third-Party Infringement Claim, (iv) Licensee provides Licensor such assistance
in relation to such proceedings as Licensor may reasonably request, and (v)
Licensee complies with any settlement or court order arising from such
proceedings, including any settlement or order that requires a change to
Licensee’s use of the Licensed Mark. Licensor shall have the right to terminate
Licensee’s right to use the Licensed Mark, without further liability to
Licensee, if Licensor determines, in good faith, that it may not prevail with
respect to such Third-Party Infringement Claim. Licensee shall have the right to
participate in the defense and settlement negotiations relating to any
Third-Party Infringement Claim at its own cost and expense.

 

c.                                       The provisions of this Section 9 shall
survive any expiration or termination of this Agreement for any reason.

 

10.                               Limitation of Liability.

 

Licensor shall not be liable to Licensee for lost profits, lost business
opportunities, or any other indirect, special, punitive, incidental or
consequential damages arising out of or related to this Agreement, even if
Licensor has been advised of the possibility of such damages. The provisions of
this Section 10 shall survive the expiration or termination of this Agreement
for any reason.

 

11.                               Miscellaneous.

 

a.                                       Assignment. Licensee shall have no
right to assign any of its rights under this Agreement or delegate any of its
duties hereunder to another person or legal entity without the prior written
consent of Licensor, which may be withheld in Licensor’s sole discretion. Any
attempt to assign or delegate this Agreement, or any of the rights, licenses or
duties set forth herein, shall be void ab initio and convey no rights or
interests in the Licensed Mark. Licensor shall have the right, in its sole
discretion, to assign any of its rights or duties under this Agreement and all
of its right, title, and interest in the Licensed Mark to another person or
legal entity. Notwithstanding anything to the contrary herein, this Section
11(a) shall not limit the rights granted in Section 1(a) with respect to a
Licensee Subsidiary.

 

b.                                      Notices. Any notice, report, approval,
authorization, waiver, consent or other communication (each, a “Notice”)
required or permitted to be given hereunder shall be in writing

 

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and shall be deemed given or delivered: (i) when delivered personally; (ii) one
business day following deposit with a recognized overnight courier service that
obtains a receipt, provided such receipt is obtained, and provided further, that
the deposit occurs prior to the deadline imposed by such service for overnight
delivery; (iii) when transmitted, if sent by electronic mail, provided a read
receipt is delivered to the sender, in each case provided such communication is
addressed to the intended recipient thereof as set forth below:

 

 

(i)

to Licensee:

Behringer Harvard REIT I, Inc.

 

 

 

17300 Dallas Parkway

 

 

 

Suite 1010

 

 

 

Addison, Texas 75248

 

 

 

Attention:  Telisa Webb Schelin, Esq.

 

 

 

Fax: (214) 365-7112

 

 

 

Email: tschelin@behringerharvard.com

 

 

 

 

 

 

With a copy to (which shall not constitute notice):

 

 

 

 

 

 

 

Proskauer Rose LLP

 

 

 

Eleven Times Square

 

 

 

New York, New York 10036

 

 

 

Attention:   Peter M. Fass

 

 

 

James P. Gerkis

 

 

 

Fax: (212) 969-2900

 

 

 

Email:         pfass@proskauer.com

 

 

 

jgerkis@proskauer.com

 

 

 

 

 

 

and:

 

 

 

 

 

 

 

 

Michael J. Choate

 

 

 

Shefsky & Froelich, Ltd.

 

 

 

111 East Wacker, Suite 2800

 

 

 

Chicago, Illinois 60601

 

 

 

Fax: (312) 275-7554

 

 

 

Email: mchoate@shefskylaw.com

 

 

 

 

 

(ii)

to Licensor:

Behringer Harvard Holdings, LLC

 

 

 

15601 Dallas Parkway

 

 

 

Suite 600

 

 

 

Addison, Texas 75001

 

 

 

Attention:  Robert S. Aisner

 

 

 

Fax: (214) 655-1610

 

 

 

Email: baisner@behringerharvard.com

 

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With copies (which shall not constitute notice):

 

 

 

 

 

 

 

15601 Dallas Parkway

 

 

 

Suite 600

 

 

 

Addison, Texas 75001

 

 

 

Attention: Stanton P. Eigenbrodt

 

 

 

Fax: (214) 655-1610

 

 

 

Email: seigenbrodt@behringerharvard.com

 

 

 

 

 

 

and:

 

 

 

 

 

 

 

 

Jenner & Block LLP

 

 

 

353 North Clark Street

 

 

 

Chicago, Illinois 60654

 

 

 

Attention:           Donald E. Batterson

 

 

 

Jeffrey R. Shuman

 

 

 

Fax: (312) 923-2707

 

 

 

Email:                 dbatterson@jenner.com

 

 

 

jshuman@jenner.com

 

Either party shall, as soon as reasonably practicable, give Notice in writing to
the other party of a change in its address for the purposes of this Section
11(b). The failure of any party to give notice shall not relieve any other party
of its obligations under this Agreement except to the extent that such party is
actually prejudiced by such failure to give notice.

 

c.                                       Independent Contractors. The parties
acknowledge and agree that they are dealing with each other hereunder as
independent contractors. Nothing contained in this Agreement shall be
interpreted as constituting either party the joint venturer or partner of the
other party or as conferring upon either party the power or authority to bind
the other party in any transaction with third parties.

 

d.                                      Attorneys’ Fees. In the event of any
action, suit, or proceeding brought by either party to enforce the terms of this
Agreement, the prevailing party shall be entitled to receive its costs, expert
witness fees, and reasonable attorneys’ fees and expenses, including costs and
fees on appeal.

 

e.                                       Waivers, Cumulative Remedies and
Amendments. This Agreement may be amended, modified, superseded, or canceled,
and the terms and conditions hereof may be waived only by a written instrument
signed by each of the parties hereto or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right hereunder, nor any single or
partial exercise of any rights hereunder, preclude any other or further exercise
thereof or the exercise of any other right hereunder. Unless expressly set forth
herein to the contrary, either party’s election of any remedies provided for in

 

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this Agreement shall not be exclusive of any other remedies available hereunder
or otherwise and all such remedies shall be deemed to be cumulative.

 

f.                                         Approval. Any approval given by
Licensor to Licensee under the terms of this Agreement shall not constitute a
waiver of any of Licensor’s rights or Licensee’s duties under any provision of
this Agreement, other than with respect to the provision for which such specific
approval was provided, subject to the other provisions hereof.

 

g.                                      Survival. Upon the termination of this
Agreement for any reason, those Sections that by their express terms or which by
their nature should be deemed to survive the termination of this Agreement shall
survive the termination of this Agreement.

 

h.                                      Governing Law and Validity. The parties
agree that the laws of the State of Texas shall govern the interpretation and
enforcement of this Agreement, without giving effect to choice of law rules. If
any provision of this Agreement is held to be void, invalid or inoperative, such
event shall not affect any other provisions herein, which shall continue and
remain in full force and effect as though such void, invalid or inoperative
provision had not been a part hereof.

 

i.                                          No Presumption Against Drafter. Each
of the parties has jointly participated in the negotiation and drafting of this
Agreement. In the event of an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by each of the parties, and no presumptions or burdens of proof shall arise
favoring any party by virtue of the authorship of any of the provisions of this
Agreement.

 

j.                                          Entire Agreement. This Agreement
constitutes the entire agreement between the parties hereto with respect to the
Licensed Mark and related subject matter and supersedes all prior agreements and
understandings, oral and written, between the parties hereto with respect to
such matters.

 

[SIGNATURE PAGE FOLLOWS]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the Effective Date.

 

 

 

LICENSOR:

 

 

 

BEHRINGER HARVARD HOLDINGS, LLC

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

LICENSEE:

 

 

 

BEHRINGER HARVARD REIT I, INC.

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[SIGNATURE PAGE TO LICENSE AGREEMENT]

 

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EXHIBIT H

 

EXISTING PROPERTY MANAGEMENT AGREEMENT (CONFORMED COPY)

 

See attached.

 

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FIFTH AMENDED AND RESTATED

PROPERTY MANAGEMENT AND LEASING AGREEMENT

(CONFORMED COPY)

 

This FIFTH AMENDED AND RESTATED PROPERTY MANAGEMENT AND LEASING AGREEMENT (this
“Management Agreement”) is made and entered into as of the 15th day of May,
2008, by and among BEHRINGER HARVARD REIT I, INC., a Maryland corporation (“BH
REIT”), BEHRINGER HARVARD OPERATING PARTNERSHIP I LP, a Texas limited
partnership (“BH OP”), and HPT MANAGEMENT SERVICES LP, a Texas limited
partnership (the “Manager”).

 

WHEREAS, BH OP was organized to acquire, own, operate, lease and manage real
estate properties on behalf of BH REIT; and

 

WHEREAS, BH OP and BH REIT and Manager previously entered into that certain
Property Management and Leasing Agreement dated February 14, 2003, as amended
and restated by the Amended and Restated Property Management and Leasing
Agreement dated June 2, 2003, the Second Amended and Restated Property
Management and Leasing Agreement dated February 11, 2005, the Third Amended and
Restated Property Management and Leasing Agreement dated March 20, 2006 and the
Fourth Amended and Restated Property Management and Leasing Agreement dated
December 29, 2006 (collectively, the “Original Management Agreement”); and

 

WHEREAS, Owner desires to continue retaining Manager to manage and coordinate
the leasing of certain of the real estate properties acquired by Owner under the
terms and conditions set forth in this Management Agreement; and

 

WHEREAS, the parties desire to amend and restate the Original Management
Agreement in its entirety in accordance with the terms and provisions hereof;

 

NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, do hereby agree, as
follows:

 

ARTICLE I.

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 Management Agreement, and the definitions of such terms are equally
applicable both to the singular and plural forms thereof

 

1.1                                 “Affiliate” means, with respect to any
Person, (i) 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; (ii) any Person 10% or more of whose outstanding voting securities
are directly or indirectly owned, controlled or held, with the power to vote, by
such other Person; (iii) any Person directly or indirectly controlling,
controlled by or under common control with such other Person; (iv) any executive
officer, director, trustee or general partner of

 

H-1

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such other Person; or (v) any legal entity for which such Person acts as an
executive officer, director, trustee or general partner.

 

1.2                                 “Gross Revenues” means all amounts actually
collected as rents or other charges for the use and occupancy of the Properties,
but excluding interest and other investment income of Owner and proceeds
received by Owner from a sale, exchange, condemnation, eminent domain taking,
casualty or other disposition of assets of Owner.

 

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

 

1.4                                 “Intellectual Property Rights” means all
right, title and interest, whether foreign or domestic, in and to any and all
trade secrets, confidential information, patents, inventions, copyrights,
service marks, trademarks, know-how, or similar intellectual property rights and
all applications and rights to apply for these rights, as well as any and all
similar rights and license rights of any type under the laws or regulations of
any governmental, regulatory, or judicial authority, foreign or domestic and all
renewals and extensions thereof.

 

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

 

1.6                                 “Management Fees” has the meaning set forth
in Section 5.1 hereof.

 

1.7                                 “Original Effective Date” means February 14,
2003.

 

1.8                                 “Owner” means BH REIT, BH OP or any joint
venture, limited liability company or other Affiliate of BH REIT or BH OP that
owns, in whole or in part, on behalf of BH REIT, any Property or Properties.

 

1.9                                 “Person” means an individual, corporation,
association, business trust, estate, trust, partnership, limited liability
company or other legal entity.

 

1.10                           “Properties” means all interests in real estate
owned by Owner and all tracts to be acquired by Owner containing
income-producing improvements or on which Owner will construct income-producing
improvements.

 

1.11                           “Proprietary Properties” means all modeling
algorithms, tools, computer programs, know-how, methodologies, processes,
technologies, ideas, concepts, skills, routines, subroutines, operating
instructions and other materials and aides used in performing the duties set
forth in Article II that relate to management advice, services and techniques
regarding current and potential Properties, and all modifications, enhancements
and derivative works of the foregoing.

 

1.12                           “Texas Tax Code” means the Texas Tax Code as
amended by Texas H.B. 3, 79th Leg., 3rd C.S. (2006), and reference to any
provision of the Texas Tax Code Act shall mean such provision as in effect from
time to time, as the same may be amended, and any successor provision thereto,
as interpreted by any applicable administrative rules as in effect from time to
time.

 

H-2

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1.13                           “Economic Interest Percentage” means the
percentage of capital contributed directly or indirectly to the Joint Venture as
compared with the total capital contributed to the Joint Venture by all of the
owners of the Joint Venture as the percentage shall be calculated in good faith
by the Owner.  Any in-kind contribution shall be considered in the calculation
of the Economic Interest Percentage and valued at the fair market value of the
contribution on the date of contribution as determined by the Owner.

 

1.14                           “Joint Venture” means an investment in a legal
organization formed to provide for the sharing of the risks and rewards in an
enterprise co-owned and operated for mutual benefit by two or more business
partners and established to acquire or hold Properties.

 

1.15                           “Oversight Fee” has the meaning set forth in
Section 5.1 hereof.

 

1.16                           “Construction Work” has the meaning set forth in
Section 5.2 hereof.

 

ARTICLE II.

APPOINTMENT AND STATUS OF MANAGER; SERVICES TO BE PERFORMED

 

2.1                                 Appointment of Manager.  Owner hereby
engages and retains Manager as the manager and as tenant coordinating agent of
the Properties, and Manager hereby accepts such appointment on the terms and
conditions hereinafter set forth; it being understood that this Management
Agreement shall cause Manager to be, at law, Owner’s agent upon the terms
contained herein.

 

2.2                                 Treatment Under Texas Margin Tax.  For
purposes of the Texas margin tax, Manager’s performance of the services
specified in this Management Agreement will cause Manager to conduct part of the
active trade or business of the Owner, and Manager’s compensation includes both
the payment of management fees and the reimbursement of specified costs incurred
in Manager’s conduct of the active trade or business of the Owner.  Therefore,
Owner and Manager intend Manager to be, and shall treat Manager as, a
“management company” within the meaning of Section 171.0001(11) of the Texas Tax
Code.  Owner and Manager will apply Sections 171.1011(m-1) and 171.1013(f)-(g)
of the Texas Tax Code to Owner’s reimbursements paid to Manager pursuant to this
Management Agreement of specified costs and allocable wages and compensation. 
Owner and Manager further recognize and intend that as a result of the
relationship created by this Management Agreement, reimbursements paid to
Manager pursuant to this Management Agreement include (i) “flow-though funds”
that Manager is mandated by law or fiduciary duty to distribute, within the
meaning of Section 171.1011(f) of the Texas Tax Code, and (ii) “flow-through
funds” that Manager is mandated by contract to distribute, within the meaning of
Section 171.1011(g).  The terms of this Management Agreement shall be
interpreted in a manner consistent with the characterization of the Manager as a
“management company” as defined in Section 171.0001(11), and with the
characterization of the reimbursements as “flow-though funds” within the meaning
of Section 171.1011(f)-(g) of the Texas Tax Code.

 

2.3                                 General Duties.  Manager shall devote its
reasonable best efforts to performing its duties hereunder to manage, operate,
maintain and lease the Properties in a diligent, careful and vigilant manner. 
The services of Manager are to be of scope and quality not less than those

 

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generally performed by professional property managers of other similar
properties in that geographic area.  Manager shall make available to Owner 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
relating to the operation and leasing of the Properties.

 

2.4                                 Specific Duties.  In addition to the
specific authority granted to Manager by Owner pursuant to Article III of this
Management Agreement, Manager’s duties include the following:

 

(a)                                  Lease Obligations.  Manager shall perform
all duties of the landlord under all Leases insofar as such duties relate to
operation, maintenance, and day-to-day management.  Manager shall also provide
or cause to be provided, at Owner’s 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 arrange for and supervise the performance of all installations and
improvements in space leased to any tenant that are either expressly required
under the terms of the lease of such space or that are customarily provided to
tenants.

 

(b)                                 Maintenance.  Manager shall cause the
Properties to be maintained in a manner consistent with, or substantially
similar to, the manner in which similar rental properties in that geographic
region are maintained.  Manager’s duties and supervision in this respect shall
include, without limitation, cleaning the interior and the exterior of the
Improvements and making or supervising the repair, alterations, and decoration
of the Improvements, subject to and in strict compliance with this Management
Agreement and the Leases.  Construction activities undertaken by Manager, if
any, shall be limited to activities related to the management, operation,
maintenance, and leasing of the Properties (e.g., repairs, renovations, and
leasehold improvements), including planning and coordinating the construction of
any tenant-paid improvements.

 

(c)                                  Leasing Functions.  Manager shall
coordinate the leasing of the Properties and shall negotiate and use its
reasonable best efforts to secure executed Leases from what Manager believes are
qualified tenants, and to execute same on behalf of Owner, if requested, for
available space in the Properties, such Leases to be in form and on terms
approved by Owner and Manager.  Manager shall be responsible for hiring all
leasing agents, as necessary for the leasing of the Properties, and for
otherwise overseeing and managing the leasing process on behalf of Owner.

 

(d)                                 Notice of Violations.  Manager shall 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 any
notice as Manager believes is appropriate.

 

(e)                                  Ownership Agreements.  Manager has received
copies of (and will be provided with copies of future) Articles of
Incorporation, Agreements of Limited Partnership, Joint Venture Partnership
Agreements and Operating Agreements, each as

 

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may be amended from time to time, of Owner, as applicable (the “Ownership
Agreements”) and is familiar with the terms thereof.  Manager shall use
reasonable care to avoid any act or omission that, in the performance of its
duties hereunder, shall in any way conflict with the terms of Ownership
Agreements.

 

(f)                                    Branding.  Manager shall maintain and
administer for Owner the standards of branding established by Behringer Harvard
Holdings, LLC with respect to all billboards, signage and uniforms.

 

(g)                                 Risk Management.  Manager shall provide to
Owner risk management services, including, but not limited to, the following: 
assisting and providing ways to mitigate, minimize, control, and transfer risk
through the prudent use of risk management, insurance programs and
recommendations of safety and loss control techniques; selecting and managing
insurance brokers and service products; preparing underwriting data for use in
marketing insurance programs; negotiating and placing insurance and related
services; serving as liaison for insurance brokers and monitoring insurance
premium invoices for accuracy; managing and settling loss control and insurance
claims; consulting and coordinating insurance requirements for financing
Properties; reviewing and monitoring sub-contractor certificates of insurance;
and consulting regarding insurance verbiage requirements for leases and
contracts.

 

(h)                                 Real Estate Tax Management.  Manager shall
provide to Owner tax management services with respect to the Properties,
including, but not limited to, the following:  coordinating payment of real
estate taxes; contesting real estate taxes, as Manager deems appropriate;
accounting for all bills to be processed at any given installment, and following
up on missing bills; data entry of tax amounts and equalized values when
available; providing copies of documents as requested (including following up on
cancelled checks, monitoring payment by third parties, communicating with
interested parties and forwarding tax bills to purchasers and other parties as
necessary).

 

(i)                                     Technology Use and Support.  Manager
shall utilize the software and technology platforms that it believes are
appropriate in connection with fulfilling its duties under this Management
Agreement.  In addition, Manager shall provide technical support and maintenance
with respect to any technology used in the maintenance, operation, management
and leasing of the Properties.

 

(j)                                     Management Plans.  Not later than 30
days after the date of this Management Agreement, and each successive fifth
anniversary thereafter, Manager shall prepare and deliver to Owner a plan
setting forth its strategies for the overall management, operation and
maintenance of the Properties under the terms and conditions of this Management
Agreement, for the five years immediately following the submission (“Management
Plan”).  As often as reasonably necessary during the period covered by any
Management Plan, the Manager may submit to Owner for its approval an updated
Management Plan.

 

2.5                                 The Account.  Manager shall establish and
maintain a separate checking account (the “Account”) into which all rent and
other monies collected from tenants shall be deposited. 

 

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All monies deposited from time to time in the Account shall be deemed to be
trust funds and shall be and remain the property of Owner and shall be withdrawn
and disbursed by Manager for the account of Owner only as expressly permitted by
this Management Agreement.  No monies collected by Manager on Owner’s behalf
shall be commingled with funds of Manager.  The 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 the
Account.  Manager may endorse any and all checks received in connection with the
operation of any Property and drawn to the order of Owner, and Owner shall, upon
request by Manager, furnish Manager’s depository with an appropriate
authorization for Manager to make such endorsement.  Manager shall have the
right to designate two or more persons who shall be authorized to draw against
the Account, but only for purposes authorized by this Management Agreement.

 

(b)                                 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 or withdrawn by Manager from the Account prior to the making of
any other disbursements therefrom.

 

(c)                                  By the 15th day after the end of each
month, Manager shall forward to Owner all monies contained in the Account other
than a reserve of $5,000 and any other amounts otherwise provided in the budget
for the relevant property which shall remain in the Account.

 

2.6                                 Accounting, Records and Reports.

 

(a)                                  Records.  Manager shall maintain all office
records and books of account and shall record therein, and keep copies of, each
invoice received from services, work and supplies ordered in connection with the
maintenance and operation of the Properties.  Such records shall be maintained
on a double entry basis.  Owner and persons designated by Owner shall at all
reasonable time have access to and the right to audit and make independent
examinations of such records, books and accounts and all vouchers, files and all
other material pertaining to the Properties and this Management Agreement, all
of which Manager agrees to keep safe, available and separate from any records
not pertaining to the Properties, at a place recommended by Manager and approved
by Owner.

 

(b)                                 Monthly Reports.  On or before the 15th day
after the end of each month during the term of this Management Agreement,
Manager shall prepare and submit to Owner the following reports and statements
with respect to each Property:

 

(i)                                     rental collection record;

 

(ii)                                  monthly operating statement;

 

(iii)                               copies of cash disbursements ledger entries
for such period, if requested by Owner upon 15 days’ written notice;

 

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(iv)                              copies of cash receipts ledger entries for
such period, if requested by Owner upon 15 days’ written notice;

 

(v)                                 the original copies of all contracts entered
into by Manager on behalf of Owner during such period, if requested by Owner
upon 15 days’ written notice; and

 

(vi)                              copies of ledger entries for such period
relating to security deposits maintained by Manager, if requested by Owner upon
15 days’ written notice.

 

(c)                                  Budgets and Leasing Plans.  Not later than
November 15 of each calendar year, Manager shall prepare and submit to Owner for
its approval an operating budget and a marketing and leasing plan on each
Property for the calendar year immediately following such submission (each, an
“Annual Budget”).  In connection with any acquisition of a Property by Owner,
Manager shall prepare an Annual Budget for the remainder of the calendar year. 
Each Annual Budget shall incorporate financial models and analysis prepared by
Manager with respect to that Property.  Each Annual Budget shall be in the form
of the budget and plan approved by Owner prior to the date thereof.  As often as
reasonably necessary during the period covered by any such budget, Manager may
submit to Owner for its approval an updated Annual Budget incorporating any
changes as shall be necessary to reflect cost over-runs and the like during that
period.  If Owner does not disapprove any proposed Annual Budget within 30 days
after receipt thereof by Owner, the Annual Budget shall be deemed approved.  If
Owner shall disapprove any proposed Annual Budget, it shall so notify Manager
within said 30-day period and explain the reasons therefor.  If Owner
disapproves of any proposed Annual Budget, Manager shall submit a revised Annual
Budget, as applicable, within 10 days of receipt of the notice of disapproval,
and Owner shall have 10 days to provide notice to Manager if it disapproves of
the revised Annual Budget.  If a proposed Annual Budget is not approved by
December 31 of any calendar year, Manager shall operate the applicable Property
pursuant to the proposed Annual Budget for the following calendar year with
respect to those portions approved by Owner and in accordance with the prior
year’s Annual Budget with respect to those portions not approved by Owner (with
the exception of (i) non-recurring expenditures and capital expenditures which
shall be deemed removed from the prior year’s Annual Budget and (ii) actual
increases for real estate taxes, which shall be deemed added to the prior year’s
Annual Budget).

 

(d)                                 Additional Costs.  Manager will not incur
any costs other than those estimated in any Annual Budget except for:

 

(i)                                     tenant improvements and real estate
commissions required under a Lease;

 

(ii)                                  maintenance or repair costs under $5,000
per Property;

 

(iii)                               costs incurred in emergency situations in
which action is immediately necessary for the preservation or safety of the
Property, or for the

 

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safety of occupants or other persons (or to avoid the suspension of any
necessary service of the Property);

 

(iv)                              expenditures for real estate taxes and
assessment; and

 

(v)                                 maintenance supplies calling for an
aggregate purchase price less than $25,000 per annum for all Properties.

 

Annual Budgets prepared by Manager shall be for planning and informational
purposes only, and Manager shall have no liability to Owner for any failure to
meet any Annual Budget.  However, Manager will use its best efforts to operate
within the approved Annual Budget.

 

(e)                                  Legal Requirements.  Manager shall execute
and file when due all forms, reports, and returns required by law relating to
the employment of its personnel.  Manager shall be responsible for notifying
Owner in the event Manager receives notice that any Improvement on a Property or
any equipment therein does not comply with the requirements of any statute,
ordinance, law or regulation of any governmental body or of any public authority
or official thereof having or claiming to have jurisdiction thereover.  Manager
shall promptly forward to Owner any complaints, warnings, notices or summonses
received by it relating to such matters.  Owner represents that to the best of
its knowledge each of its Properties and any equipment thereon will upon
acquisition by Owner comply with all such requirements.  Owner authorizes
Manager to disclose the ownership of the Property by Owner to any such
officials.

 

2.7                                 Guaranty of Deposits.  If Owner acquires any
Property or Properties from Behringer Development Company LP, a Texas limited
partnership (“Behringer Development”), Manager hereby guarantees the full,
prompt and unconditional refund of any earnest money deposit paid by Owner to
Behringer Development if Owner is entitled to a refund as a result of (i) the
failure of Behringer Development to develop the property, (ii) the failure of
all or a specified portion of the pre-leased tenants to take possession under
their leases for any reason, or (iii) the inability of Owner to pay the full
purchase price at closing.

 

ARTICLE III.

AUTHORITY GRANTED TO MANAGER AND CERTAIN OWNER OBLIGATIONS

 

3.1                                 Authority As To Tenants, Etc.  Owner agrees
and does hereby give Manager the following exclusive authority and powers (all
of which shall be exercised either in the name of Manager, as Manager for Owner,
or in the name or Owner entered into by Manager as Owner’s authorized agent, and
Owner shall assume all expenses in connection with such matters):

 

(a)                                  to advertise each Property or any part
thereof and to display signs thereon, as permitted by law and subject to the
terms and conditions of the Leases;

 

(b)                                 to pay all expenses of leasing such
Property, including but not limited to, newspaper and other advertising,
signage, banners, brochures, referral commissions, leasing commissions, finder’s
fees and salaries, bonuses and other compensation of leasing personnel
responsible for the leasing of the Property;

 

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(c)                                  to cause references of prospective tenants
to be investigated, it being understood and agreed by the parties hereto that
Manager does not guarantee the creditworthiness or collectibility of accounts
receivable from tenants, users or lessees; and to negotiate new Leases and
renewals and cancellations of existing Leases that shall be subject to Manager
obtaining Owner’s approval;

 

(d)                                 to collect from tenants all or any of the
following:  a late rent administrative charge, a non-negotiable check charge,
credit report fee, a subleasing administrative charge or broker’s commission;

 

(e)                                  to terminate tenancies and to sign and
serve in the name of Owner of each Property such notices as are deemed necessary
by Manager;

 

(f)                                    to institute and prosecute actions to
evict tenants and to recover possession of the Property or portions thereof; and

 

(g)                                 with Owner’s authorization, to sue for and
in the name of Owner and recover rent and other sums due; and to settle,
compromise, and release such actions or suits, or reinstate such tenancies.  All
expenses of litigation including, but not limited to, attorneys’ fees, filing
fees and court costs that Manager shall incur in connection with the collecting
of rent and other sums, or to recover possession of any Property or any portion
thereof, shall be deemed to be an operational expense of the Property.  Manager
and Owner shall concur on the selection of the attorneys to handle such
litigation.

 

3.2                                 Operational Authority.  Owner agrees and
does hereby give Manager the following exclusive authority and powers (all of
which shall be exercised either in the name of Manager, as Manager for Owner, or
in the name of Owner entered into by Manager as Owner’s authorized agent, and,
unless otherwise provided herein, Owner shall assume all expenses in connection
with such matters):

 

(a)                                  to hire, supervise, discharge, and pay all
labor required for the operation, maintenance and leasing of each Property,
including but not limited to on-site personnel, managers, assistant managers,
leasing consultants, engineers, janitors, maintenance supervisors and other
employees required for the operation and maintenance of the Property, including
personnel spending a portion of their working hours (to be charged on a pro rata
basis) at the Property.  Any personnel hired by Manager to maintain, operate and
lease the Properties shall be the employees or independent contractors of
Manager and not of Owner.  Manager shall use due care in selecting and
supervising these employees or independent contractors.  With respect to these
employees, Manager shall be responsible for maintaining timekeeping records,
processing regular payroll, filing payroll tax reports on a timely basis,
ensuring compliance with wage and tax laws and tracking benefit hours and
garnishments and child support orders.  All expenses of these employees’
employment shall be deemed operational expenses of the Property.

 

(b)                                 to make or cause to be made all ordinary
repairs and replacements necessary to preserve each Property in its present
condition and for the operating efficiency thereof and all alterations required
to comply with lease requirements;

 

H-9

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(c)                                  to prepare, negotiate, enter into and
administer any Leases;

 

(d)                                 to prepare, negotiate and enter into, as
Manager of the Property, (i) contracts for all items on budgets that have been
approved by Owner, any emergency services or repairs for items not exceeding
$5,000,(ii) appropriate service agreements and labor agreements for normal
operation of the Property, which have terms not to exceed three years,
(iii) agreements for all budgeted maintenance, minor alterations, and utility
services, including, but not limited to, electricity, gas, fuel, water,
telephone, window washing, scavenger service, landscaping, snow removal, pest
exterminating, decorating and legal services, in connection with the Leases and
relating to the Property and (iv) any other service agreements as Manager may
consider appropriate (collectively, the “Contracts”); and

 

(e)                                  to purchase supplies and pay all bills in
accordance with the Annual Budget, or as permitted under Sections 2.6(d)(ii) or
2.6(d)(v).

 

Manager shall use its reasonable commercial best efforts to obtain the foregoing
services and utilities for each Property on terms consistent with, or
substantially similar to, those available to similar rental properties in the
geographic region in which the Property is located.  Owner hereby appoints
Manager as Owner’s authorized Manager for the purpose of executing, as Manager
for said Owner, all Contracts.  Manager shall secure the approval of, and
execution of appropriate Contracts by, Owner for any non-budgeted and
non-emergency/contingency capital items, alterations or other expenditures in
excess of $5,000 for any one item, securing for each item at least three written
bids, if practicable, or providing evidence satisfactory to Owner that the
Contract amount is lower than industry standard pricing in the geographic region
in which the Property is located, from responsible contractors.  Manager shall
have the right from time to time during the term hereof, to contract with and
make purchases from Affiliates of Manager, provided that contract rates and
prices are no less favorable to Owner than those available from unaffiliated
third parties.  Manager may at any time and from time to time request and
receive the prior written authorization of Owner of the Property of any one or
more purchases or other expenditures, notwithstanding that Manager may otherwise
be authorized hereunder to make such purchases or expenditures.

 

3.3                                 Rent and Other Collections.  Owner agrees
and does hereby give Manager the exclusive authority and powers (all of which
shall be exercised either in the name of Manager, as Manager for Owner, or in
the name or Owner entered into by Manager as Owner’s authorized agent, and Owner
shall assume all expenses in connection with such matters) to collect rents,
assessments and other items, including but not limited to tenant payments for
real estate taxes, property liability and other insurance, damages and repairs,
common area maintenance, tax reduction fees and all other tenant reimbursements,
administrative charges, proceeds of rental interruption insurance, parking fees,
income from coin operated machines and other miscellaneous income, due or to
become due and give receipts therefor and to deposit all such Gross Revenue
collected hereunder in the Account.  Manager shall also have the exclusive
authority to collect and handle tenants’ security deposits, including the right
to apply such security deposits to unpaid rent, and to comply, on behalf of
Owner of the Property, with applicable state or local laws concerning security
deposits and interest thereon, if any.

 

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3.4                                 Advances.  Manager shall not be required to
advance any monies for the care or management of any Property, but Owner agrees
to advance all monies necessary therefor, provided that any advanced amounts
have been budgeted in the Annual Budget.  If Manager shall elect to advance any
money in connection with a Property, Owner agrees to reimburse Manager within 30
days, and hereby authorizes Manager to deduct such advances from any monies due
Owner.  In connection with any insured losses or damages relating to any
Property, Manager shall have the exclusive authority to handle all steps
necessary regarding any such claim; provided that Manager will not make any
adjustments or settlements in excess of $10,000 without Owner’s prior written
consent.

 

3.5                                 Payment of Expenses.  Owner agrees and does
hereby give Manager the exclusive authority and power (all of which shall be
exercised either in the name of Manager, as Manager for Owner, or in the name or
Owner entered into by Manager as Owner’s authorized agent, and Owner shall
assume all expenses in connection with such matters) to pay all expenses of the
Property, including utility and water charges, sewer rent and assessments, from
the Gross Revenue collected in accordance with Section 3.3 above, from the
Account.  All bills shall be paid by Manager 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.  All expenses shall be billed at net cost (i.e., less all rebates,
commissions, discounts and allowances, however designed).

 

It is understood that the Gross Revenue will be used first to pay the
compensation to Manager as contained in Article V below, then operational
expenses and then any mortgage indebtedness, including real estate tax and
insurance impounds, but only as directed by Owner in writing and only if
sufficient Gross Revenue is available for such payments.  Nothing in this
Management Agreement shall be interpreted in such a manner as to obligate
Manager to pay from Gross Revenue, any expenses incurred by Owner prior to the
commencement of this Management Agreement, except to the extent Owner advances
additional funds to pay such expenses.

 

3.6                                 Environmental Matters.  Owner hereby
warrants and represents to Manager that to the best of Owner’s knowledge, no
Property, upon acquisition by Owner, nor any part thereof, will be used to
treat, deposit, store, dispose of or place any hazardous substance that may
subject Manager to liability or claims under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (42 U.S.C.A. Section 9607) or
any constitutional provision, statute, ordinance, law, or regulation of any
governmental body or of any order or ruling of any public authority or official
thereof, having or claiming to have jurisdiction thereover.

 

3.7                                 Legal Status of Properties.  Owner
represents that to the best of its knowledge each Property and any equipment
thereon, when acquired by Owner, will comply with all legal requirements and
authorizes Manager to disclose the identity of the Owner of the Property to any
such officials.  In the event it is alleged or charged that any Improvement or
any equipment on a Property or any act or failure to act by Owner with respect
to the Property or the sale, rental, or other disposition thereof fails to
comply with, or is in violation of, any of the requirements of any
constitutional provision, statute, ordinance, law, or regulation of any
governmental body or any order or ruling of any public authority or official
thereof having or claiming to have jurisdiction thereover, and Manager, in its
sole and absolute discretion, considers that the action or position

 

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of Owner, with respect thereto may result in damage or liability to Manager,
Manager shall have the right to cancel this Management Agreement at any time by
written notice to Owner of its election so to do, which cancellation shall be
effective upon the service of such notice.  Such cancellation shall not release
the indemnities of Owner set forth in this Management Agreement and shall not
terminate any liability or obligation of Owner to Manager for any payment,
reimbursement, or other sum of money then due and payable to Manager hereunder.

 

3.8                                 Extraordinary Payments.  Owner agrees to
give adequate advance written notice to Manager if Owner desires that Manager
make any extraordinary payment, out of Gross Revenue, to the extent funds are
available after the payment of Manager’s compensation as provided for herein and
all operational expenses, of mortgage indebtedness, general taxes, special
assessments, or insurance premiums.

 

ARTICLE IV.
EXPENSES

 

4.1                                 Owner’s Expenses.  Except as otherwise
specifically provided, all costs and expenses incurred hereunder by Manager in
fulfilling its duties to Owner shall be for the account of and on behalf of
Owner.  Such costs and expenses shall include the wages and salaries and other
employee-related expenses of all on-site and offsite employees of Manager who
are engaged in the operation, management, maintenance and leasing or access
control of the Properties, including taxes, insurance and benefits relating to
such employees, costs of technology related to the Properties, including
computers, telephone systems and property management and accounting software and
any upgrades or conversions thereof, and legal, travel and other out-of-pocket
expenses that are directly related to the management of specific Properties. 
All costs and expenses for which Owner is responsible under this Management
Agreement shall be paid by Manager out of the Account.  In the event the Account
does not contain sufficient funds to pay all said expenses, Owner shall fund all
sums necessary to meet such additional costs and expenses.

 

4.2                                 Manager’s Expenses.  Manager shall, out of
its own funds, pay all of its general overhead and administrative expenses.

 

ARTICLE V.
MANAGER’S COMPENSATION

 

5.1                                 Management Fees.  Owner shall pay to Manager
property management fees in an amount equal to three percent (3%) of Gross
Revenues (the “Management Fees”) on a monthly basis from the income received
from the Properties over the term of this Management Agreement; provided,
however, the Management Fees shall not be less than the following amounts for
any Property on a monthly basis:

 

 

 

Minimum Monthly

 

Property Size

 

Management Fees

 

0 to 199,999 square feet

 

$

1,000

 

200,000 to 500,000 square feet

 

$

2,000

 

More than 500,000 square feet

 

$

3,000

 

 

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Certain of these Properties may be owned by Joint Ventures.  When the Manager is
not paid by the Joint Venture directly in respect of its services, the
applicable Management Fee or Oversight Fee (as defined below) to be paid by the
Owner will be calculated by multiplying the Management Fee by the Economic
Interest Percentage owned directly or indirectly by the Owner in that Property. 
In the event that Owner contracts directly with a third-party property manager
not affiliated with the Manager in respect of a Property for which the Owner, in
its sole discretion, has the ability to appoint or hire the Manager, Owner shall
pay Manager an oversight fee (“Oversight Fee”) equal to one-half of one percent
(0.50%) of Gross Revenues.  In no event will Owner pay both a Management Fee and
an Oversight Fee to Manager with respect to any Property.  If Manager
subcontracts its responsibilities hereunder to another person or entity, Manager
shall be solely responsible for the payment to the third party.  The Management
Fee includes the reimbursement of the specified cost incurred by the Manger of
engaging another person or entity to perform Manager’s responsibilities
hereunder; provided, however, that Manager shall be responsible for payment of
all amounts to these third parties.  Nothing herein shall prevent Manager from
entering fee-splitting arrangements with third parties with respect to the
Management Fee.

 

5.2                                 Construction Supervision Fees.  Manager
shall supervise construction performed by or on behalf of Owner with respect to
the Properties, including, but not limited to capital repairs and improvements,
major building construction and tenant improvements (collectively, the
“Construction Work”).  Owner shall pay Manager a construction supervision fee
based on hard construction costs incurred in connection with the Construction
Work and in accordance with the rates set forth in Appendix 1 attached hereto. 
Owner shall pay construction supervision fees at the same time it makes payments
to any third party contractors in respect of the Construction Work.

 

5.3                                 Leasing Fees.  In addition to the
compensation paid to Manager under Section 5.1 above, Manager shall be entitled
to receive a separate fee for the Leases of new tenants and renewals of Leases
with existing tenants in an amount not to exceed the fee customarily charged in
arm’s length transactions by others rendering similar services in the same
geographic area for similar properties as determined by a survey of brokers and
agents in such area.

 

5.4                                 Audit Adjustment.  If any audit of the
records, books or accounts relating to the Properties discloses an overpayment
or underpayment of Management Fees, Owner 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 than the correct Management Fees for such fiscal year, Manager shall bear
the cost of such audit.

 

ARTICLE VI.
INSURANCE AND INDEMNIFICATION

 

6.1                                 Insurance to be Carried.

 

(a)                                  Manager shall obtain and keep in full force
and effect insurance on the Properties against such hazards as Owner and Manager
shall deem appropriate, but in any event insurance sufficient to comply with the
Leases and Ownership Agreements shall be

 

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maintained.  All liability policies shall provide sufficient insurance
satisfactory to both Owner and Manager and shall contain waivers of subrogation
for the benefit of Manager.

 

(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, employer’s liability insurance applicable to and covering all employees
of Manager at the Properties and all persons engaged in the performance of any
work required hereunder, and Manager shall furnish Owner certificates of
insurers naming Owner as a co-insured and evidencing that such insurance is in
effect.  If any work under this Management Agreement is subcontracted as
permitted herein, Manager shall include in each subcontract a provision that the
subcontractor shall also furnish Owner with such a certificate.

 

6.2                                 Insurance Expenses.  Premiums and other
expenses of such insurance, as well as any applicable payments in respect of
deductibles shall be borne by Owner.

 

6.3                                 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 that is in effect or for which application has been made. 
Manager shall use its best efforts to comply with all requirements of insurers.

 

6.4                                 Accidents and Claims.  Manager shall
promptly investigate and shall report in detail to Owner all accidents, claims
for damage relating to 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 operating statement delivered to
Owner pursuant to Section 2.6(b)(ii).  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.

 

6.5                                 Indemnification.

 

(a)                                  Indemnification of Manager.  Owner agrees
to indemnify, defend, protect, save and hold harmless Manager and its
stockholders, officers, directors, employees, managers, successors and assigns
(collectively, the “Indemnified Parties”) from any and all claims, causes of
action, demands, suits, proceedings, loss, judgments, damage, awards, liens,
fines, costs, attorney’s fees and expenses, of every kind and nature whatsoever
(collectively, “Losses”) in connection with or in any way related to (i) any
Contract, (ii) each Property, including any past, current or future allegations
regarding treatment, depositing, storage, disposal or placement by any party
other than Manager of hazardous substances on the Property, and from liability
for damage to each Property and injuries to or death of any person whomsoever,
and damage to Property and (iii) the misconduct, negligence or unlawful acts
(such unlawfulness having been adjudicated by a court of proper jurisdiction) of
Owner, or the failure of Owner to correct any present or future violation or
alleged violation of any and all present or future laws, ordinances, statutes,
or regulations of any public authority or official thereof, having or claiming
to

 

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have jurisdiction thereover, of which it has actual notice; provided, however,
that the indemnification and exculpation shall not extend to any such Losses
arising out of the misconduct, negligence or unlawful acts (the unlawfulness
having been adjudicated by a court of proper jurisdiction) of Manager, its
agents, servants, or employees; provided, further, that the indemnification and
exculpation shall be limited to the extent that Manager recovers insurance
proceeds with respect to that matter.  Manager shall not be liable for any error
of judgment or for any mistake of fact or law, or for any thing that it may do
or refrain from doing, except in cases of misconduct, negligence or unlawful
acts (the unlawfulness having been adjudicated by a court of proper
jurisdiction).

 

(b)                                 Indemnification of Owner.  Manager agrees to
indemnify, defend, protect, save and hold harmless Owner and its stockholders,
officers, directors, employees, managers, successors and assigns from any and
all claims or liability for any injury or damage to any person or property
whatsoever for which Manager is responsible occurring in, on, or about the
Properties, including, without limitation, the Improvements, when the injury or
damage shall be caused by the misconduct, negligence or unlawful acts (the
unlawfulness having been adjudicated by a court of proper jurisdiction) of
Manager, its agents, servants, or employees, except to the extent that Owner
recovers insurance proceeds with respect to such matter.

 

(c)                                  Limitations.  Notwithstanding anything to
the contrary in this Management Agreement, any indemnification and exculpation
by the Owner under this Management Agreement is subject to any limitations
imposed under the Company’s Articles of Incorporation or any amendments thereto.

 

ARTICLE VII.
TERM AND TERMINATION

 

7.1                                 Term.  This Management Agreement shall
commence on the Original Effective Date and shall continue until the seventh
(7th ) anniversary of such date and thereafter for successive seven year renewal
periods, unless on or before 30 days prior to the date last above mentioned or
on or before 30 days prior to the expiration of any such renewal period, Manager
shall notify Owner in writing that it elects to terminate this Management
Agreement, in which case this Management Agreement shall be thereby terminated
on said last mentioned date.  In addition, and notwithstanding the foregoing,
Owner may terminate this Management Agreement at any time upon delivery of
written notice to Manager not less than 30 days prior to the effective date of
termination, in the event of (and only in the event of) a showing by Owner of
misconduct, negligence, or deliberate malfeasance by Manager in the performance
of Manager’s duties hereunder.  In addition, either party may terminate this
Management Agreement immediately upon the occurrence of any of the following:

 

(a)                                  A decree or order is rendered by a court
having jurisdiction (i) adjudging Manager as bankrupt or insolvent, or
(ii) 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
(iii) appointing a receiver or liquidator or trustee or assignee in bankruptcy
or insolvency of

 

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Manager or a substantial part of the property of Manager, or for the winding up
or liquidation of its affairs, or

 

(b)                                 Manager (i) institutes proceedings to be
adjudicated a voluntary bankrupt or an insolvent, (ii) consents to the filing of
a bankruptcy proceeding against it, (iii) files a petition or answer or consent
seeking reorganization, readjustment, arrangement, composition or relief under
any similar applicable law or practice, (iv) 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, (v) makes an assignment for the benefit of creditors, (vi) 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 the other party, or (iv) takes
corporate or other action in furtherance of any of the aforesaid purposes.

 

7.2                                 Manager’s Obligations Upon Termination. 
Upon the termination of this Management Agreement, Manager shall cooperate with
Owner and take all reasonable steps requested by Owner to make an orderly
transition of the Manager’s services, including without limitation:

 

(a)                                  Manager shall deliver to Owner or its
designee, all books and records with respect to the Properties.

 

(b)                                 Manager shall transfer and assign to Owner,
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 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 in its possession and shall deliver to Owner a statement
of all Management Fees claimed to be due to Manager and shall cause funds of
Owner held by Manager relating to the Properties to be paid to Owner or its
designee.

 

(d)                                 All provisions of this Management Agreement
that require Manager to have insured, or to protect, defend, save, hold and
indemnify or to reimburse Owner shall survive any expiration or termination of
this Management Agreement and, if Owner is or becomes involved in any claim,
proceeding or litigation by reason of having been Owner, such provisions shall
apply as if this Management Agreement were still in effect.

 

7.3                                 Owner’s Obligations Upon Termination.  Upon
the termination of this Management Agreement, Owner shall cooperate with Manager
and take all reasonable steps to make an orderly transition of the Manager’s
services to Owner, including without limitation:

 

(a)                                  Owner shall pay or reimburse Manager for
any sums of money due it under this Management Agreement for services and
expenses prior to termination of this Management Agreement.  The parties
understand and agree that Manager may withhold funds for 60 days after the end
of the month in which this Management Agreement is

 

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terminated to pay bills previously incurred but not yet invoiced and to close
accounts.  Should the funds withheld be insufficient to meet the obligation of
Manager to pay bills previously incurred, Owner will, upon demand, advance
sufficient funds to Manager to ensure fulfillment of Manager’s obligation to do
so, within 10 days of receipt of notice and an itemization of such unpaid bills.

 

(b)                                 Owner shall assume in writing all
obligations under all Contracts entered into by Manager, on behalf of Owner of
the Property, upon the termination of this Management Agreement.

 

(c)                                  All provisions of this Management Agreement
that require Owner to have insured, or to protect, defend, save, hold and
indemnify or to reimburse Manager shall survive any expiration or termination of
this Management Agreement and, if Manager is or becomes involved in any claim,
proceeding or litigation by reason of having been Manager of Owner, such
provisions shall apply as if this Management Agreement were still in effect.

 

ARTICLE VIII.
MISCELLANEOUS

 

8.1                                 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 8.1.

 

Owner:                                                         BEHRINGER HARVARD
OPERATING PARTNERSHIP I LP

c/o Behringer Harvard REIT I, Inc.

15601 Dallas Parkway

Suite 600

Addison, Texas 75001

Attention:  Chief Legal Officer

 

Manager:                                             HPT MANAGEMENT SERVICES LP

15601 Dallas Parkway

Suite 600

Addison, Texas 75001

Attention: Chief Legal Officer

 

8.2                                 Governing Law: Venue.  This Management
Agreement shall be governed by and construed in accordance with the internal
laws of the State of Texas, and any action brought to enforce the agreements
made hereunder or any action which arises out of the relationship created
hereunder shall be brought exclusively in Dallas County, Texas.

 

8.3                                 Assignment.  Manager may delegate partially
or in full its duties and rights under this Management Agreement but only with
the prior written consent of Owner.  Owner

 

H-17

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acknowledges and agrees that any or all of the duties of Manager as contained
herein may be delegated by Manager and performed by a person or entity
(“Submanager”) with whom Manager contracts for the purpose of performing such
duties.  Owner specifically grants Manager the authority to enter into such a
contract with a Submanager; provided that, unless Owner otherwise agrees in
writing with such Submanager, Owner shall have no liability or responsibility to
any such Submanager for the payment of the Submanager’s fee or for reimbursement
to the Submanager of its expenses or to indemnify the Submanager in any manner
for any matter; and provided, further, that Manager shall require such
Submanager to agree, in the written agreement setting forth the duties and
obligations of such Submanager, to indemnify Owner for all Losses incurred by
Owner as a result of the misconduct or negligence of the Submanager, except that
such indemnity shall not be required to the extent that Owner recovers issuance
proceeds with respect to such matter.  Any contract entered into between Manager
and a Submanager pursuant to this Section 8.3 shall be consistent with the
provisions of this Management Agreement, except to the extent Owner otherwise
specifically agrees in writing.  This Management Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and assigns.

 

8.4                                 Third Party Leasing Services.  Manager
acknowledges that from time to time Owner may determine that it is in the best
interests of Owner to retain a third party to provide certain leasing services
with respect to certain Properties and to compensate such third party for such
leasing services.  Upon the prior written consent of Manager, Owner shall have
the authority to enter into such a contract for leasing services with a third
party (a “Third Party Leasing Agreement”); provided that Manager shall have no
liability or responsibility to Owner for any of the duties and obligations
undertaken by such party, and Owner agrees to indemnify Manager for all Losses
incurred by Manager as a result of acts of such third party pursuant to the
Third Party Leasing Agreement.  To the extent that leasing services are
specifically required to be performed by a third party pursuant to such Third
Party Leasing Agreement, Manager shall have no obligation to perform such
leasing services and Owner shall have no obligation to Manager for leasing fees
pursuant to Section 5.3 hereof.

 

8.5                                 Third Party Management Services.  Manager
acknowledges that from time to time Owner may acquire interests in Properties in
which Owner does not control the determination of the party that is engaged to
provide property management and other services to be provided by Manager with
respect to all Properties acquired by Owner hereunder.  Upon the prior written
consent of Manager, Owner shall have the authority to acquire such
non-controlling interests in Properties for which a third party provides some or
all of the services otherwise required to be performed by Manager hereunder (a
“Third Party Management Agreement”); provided that Manager shall have no
liability or responsibility to Owner for any of the duties and obligations
undertaken by such third party, and Owner agrees to indemnify Manager for all
Losses incurred by Manager as a result of the acts of such third party pursuant
to the Third Party Management Agreement.  To the extent that property management
and other services are specifically required to be performed by a third party
pursuant to such Third Party Management Agreement, Manager shall have no
obligation to perform such services and Owner shall have no obligation to
Manager for compensation for such services pursuant to Article V hereof.

 

H-18

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8.6                                 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 Management Agreement shall not constitute a waiver thereof
for the future.

 

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

 

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

 

8.9                                 Counterparts.  This Management 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 Management
Agreement to produce or account for more than one such counterpart.

 

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

 

8.11                           Disputes.  If there shall be a dispute between
Owner and Manager relating to this Management Agreement resulting in litigation,
the prevailing party in such litigation shall be entitled to recover from the
other party to such litigation such amount as the court shall fix as reasonable
attorneys’ fees.

 

8.12                           Activities of Manager.  The obligations of
Manager pursuant to the terms and provisions of this Management Agreement shall
not be construed to preclude Manager from engaging in other activities or
business ventures, whether or not such other activities or ventures are in
competition with Owner or the business of Owner.

 

8.13                           Independent Contractor.  Manager and Owner shall
not be construed as joint venturers or partners of each other pursuant to this
Management Agreement, and neither shall have the power to bind or obligate the
other except as set forth herein.  In all respects, the status of Manger to
Owner under this Management Agreement is that of an independent contractor.

 

8.14                           No Third-Party Rights.  Nothing expressed or
referred to in this Management Agreement will be construed to give any Person
other than the parties to this Management Agreement any legal or equitable
right, remedy or claim under or with respect to this Management Agreement or any
provision of this Management Agreement, except such rights as shall inure to a
successor or permitted assignee pursuant to Section 8.3.

 

8.15                           Ownership of Proprietary Property.  The Manager
retains ownership of and reserves all Intellectual Property Rights in the
Proprietary Property.  To the extent that Owner has or obtains any claim to any
right, title or interest in the Proprietary Property, including without
limitation in any suggestions, enhancements or contributions that Owner may
provide regarding the Proprietary Property, Owner hereby assigns and transfers
exclusively to the Manager all right, title and interest, including without
limitation all Intellectual Property Rights, free and

 

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clear of any liens, encumbrances or licenses in favor of Owner or any other
party, in and to the Proprietary Property.  In addition, at the Manager’s
expense, Owner will perform any acts that may be deemed desirable by the Manager
to evidence more fully the transfer of ownership of right, title and interest in
the Proprietary Property to the Manager, including but not limited to the
execution of any instruments or documents now or hereafter requested by the
Manager to perfect, defend or confirm the assignment described herein, in a form
determined by the Manager.

 

8.16                           Non-Solicitation.  During the period commencing
on the date on which this Management Agreement is entered into and ending one
year following the termination of the this Management Agreement, BH REIT and BH
OP shall not, without the Manager’s prior written consent, directly or
indirectly, (i) solicit or encourage any person to leave the employment or other
service of the Manager, or (ii) hire, on behalf of BH REIT or BH OP or any other
person or entity, any person who has left the employment within the one year
period following the termination of that person’s employment the Manager. 
During the period commencing on the date hereof through and ending one year
following the termination of this Management Agreement, BH REIT and BH OP will
not, whether for its or their own account or for the account of any other
person, firm, corporation or other business organization, intentionally
interfere with the relationship of the Manager with, or endeavor to entice away
from the Manager, any person who during the term of the Management Agreement is,
or during the preceding one-year period, was a tenant, co-investor,
co-developer, joint venturer or other customer of the Manager.

 

H-20

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IN WITNESS WHEREOF, the parties have executed this Fifth Amended and Restated
Property Management and Leasing Agreement as of the date first above written.

 

 

BEHRINGER HARVARD REIT I, INC.

 

 

 

 

 

 

 

By:

/s/ Gerald J. Reihsen, III

 

 

Gerald J. Reihsen, III

 

 

Executive Vice President -

 

 

Corporate Development & Legal

 

 

 

 

 

 

 

BEHRINGER HARVARD OPERATING PARTNERSHIP I LP

 

 

 

 

By:

BHR, Inc.

 

 

 

 

 

 

 

 

By:

/s/ Gerald J. Reihsen, III

 

 

 

Gerald J. Reihsen, III

 

 

 

Executive Vice President -

 

 

 

Corporate Development & Legal

 

 

 

 

 

 

 

HPT MANAGEMENT SERVICES LP

 

 

 

 

By:

/s/ Gerald J. Reihsen, III

 

 

Gerald J. Reihsen, III

 

 

Executive Vice President -

 

 

Corporate Development & Legal

 

H-21

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APPENDIX 1

 

 

 

Construction Management Fees*

 

 

 

Project Size

 

 

 

$1

 

$200,001

 

$500,001

 

$1,000,001

 

 

 

 

 

to

 

to

 

to

 

to

 

over

 

 

 

$200,000

 

$500,000

 

$1,000,000

 

$2,000,000

 

$2,000,001

 

 

 

 

 

 

 

 

 

 

 

 

 

On-Site Property Manager

 

 

 

 

 

 

 

 

 

 

 

On-site Property Manager supervises and runs the project on a day-to-day basis;
no Project Manager or third party firm is involved.

 

5.0

%

4.0

%

3.0

%

2.0

%

1.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Project Manager

 

 

 

 

 

 

 

 

 

 

 

Project Manager supervises and runs the project; the on-site Property Manager or
Chief Enginer may assist the Project Manager in day-to-day activities.

 

5.0

%

4.0

%

3.0

%

2.0

%

1.5

%

 

 

 

 

 

 

 

 

 

 

 

 

Third Party Firm (Hired by Manager)

 

 

 

 

 

 

 

 

 

 

 

A third party firm is contracted by Manager to provide construction management
services; the on-site Property Manager or Chief Engineer may assist in
day-to-day activities.

 

 

 

(Per the Third Party Contract)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Administrative Fee to Manager (paid in addition to the third party fee) for
review of all draw requests, change orders and lien waivers submitted by the
third party and administration of invoice approval and check requests.

 

2.0

%

1.5

%

1.5

%

1.0

%

1.0

%

 

 

 

 

 

 

 

 

 

 

 

 

Third Party Firm (Hired by Tenant)

 

 

 

 

 

 

 

 

 

 

 

A third party firm is contracted by tenant to provide construction management
services; the on-site Property Manager and/or Chief Engineer will review and
approve actions and activities by third party firm.

 

 

 

(Per the Third Party Contract)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Administrative Fee to Manager (paid in addition to the third party fee) for
review of all draw requests, change orders and lien waivers submitted by the
third party and administration of invoice approval and check requests.

 

2.0

%

1.5

%

1.5

%

1.0

%

1.0

%

 

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

*The calculation of the above fees are cumulative. For example, for a project
supervised by the on-site property manager, the fee is calculated as 5% on the
first $200,000, 4% on the next $300,000, 3% on the next $500,000, 2% on the next
$1,000,000 and 1.5% on all amounts over $2,000,001.

 

H-22

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EXHIBIT I

 

SAMPLE SERIES A STOCK CALCULATIONS

 

See attached.

 

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

 

Set forth below are, for illustrative purposes only, sample calculations with
respect to the conversion of the Series A Preferred Stock into REIT I Common
Stock according to the terms of the Articles Supplementary based upon the
assumptions set forth therein.

 

 

 

Upon Election

 

Listing

 

Change of Control

 

Latest Estimated Value Per Share

 

$

4.64

 

$

4.64

 

$

4.64

 

Next Estimated Value Per Share

 

4.74

 

4.74

 

4.74

 

Average Estimated Value Per Share

 

$

4.69

 

$

4.69

 

$

4.69

 

Greater of Next Estimated Value Per Share or Average Estimated Value Per Share

 

$

4.74

 

$

4.74

 

$

4.74

 

Effective Date Shares Outstanding

 

298,477,851

 

298,477,851

 

298,477,851

 

Effective Date Value

 

$

1,414,785,014

 

$

1,414,785,014

 

$

1,414,785,014

 

 

 

 

 

 

 

 

 

Conversion Common Stock Value

 

$

5.03

 

$

5.00

 

$

5.00

 

Effective Date Shares Outstanding

 

298,477,851

 

298,477,851

 

298,477,851

 

Conversion Company Value

 

$

1,500,249,072

 

$

1,492,389,255

 

$

1,492,389,255

 

 

 

 

 

 

 

 

 

Conversion Company Value

 

$

1,500,249,072

 

$

1,492,389,255

 

$

1,492,389,255

 

Distributions in Excess of Current Distributions

 

1,000,000

 

1,000,000

 

1,000,000

 

Effective Date Value

 

(1,414,785,014

)

(1,414,785,014

)

(1,414,785,014

)

Excess of Conversion Company Value Over Effective Date Value

 

86,464,058.51

 

78,604,241

 

78,604,241

 

Percentage

 

10.0

%

10.0

%

10.0

%

 

 

8,646,406

 

7,860,424

 

7,860,424

 

Adjustment Factor

 

 

 

1.1

 

1.1

 

Adjusted Amount

 

8,646,406

 

8,646,467

 

8,646,467

 

Series A Shares Outstanding

 

10,000

 

10,000

 

10,000

 

Conversion Value Per Share of Series A Preferred Stock

 

$

864.64

 

$

864.65

 

$

864.65

 

Conversion Common Stock Value

 

$

5.00

 

$

5.00

 

$

5.00

 

Conversion Rate

 

172.93

 

172.93

 

172.93

 

 

I-1

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[***] Confidential material redacted and filed separately with the Commission.

 

Annex I

Specified Advisor Employees

 

Employee Name

 

 

1.

***

2.

***

3.

***

4.

***

5.

***

6.

***

7.

***

8.

***

9.

***

10.

***

11.

Fordham, Scott

12.

***

13.

***

14.

***

15.

***

16.

***

17.

***

18.

***

19.

***

20.

***

21.

***

22.

***

23.

***

24.

***

25.

***

26.

***

27.

***

28.

***

29.

***

30.

***

31.

***

32.

***

33.

***

34.

***

35.

***

36.

***

37.

Reister, Bill

38.

***

39.

***

40.

***

41.

Schelin, Telisa

 

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

 

[***] Confidential material redacted and filed separately with the Commission.

 

42.

***

43.

Sharp, Jim

44.

Simon, Thomas

45.

***

46.

***

47.

***

48.

***

49.

***

50.

***

51.

***

52.

***

53.

***

54.

***

 

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Annex II

Purchased Assets

 

Items located in Bent Tree office

 

Quantity

 

Headset

 

2

 

 

 

 

 

Monitor - NEC 221WM-BK 22 WIDE DVI SPK

 

4

 

Monitor - NEC 17”

 

1

 

Monitor - NEC E222W 22 WIDE DVI HA

 

1

 

Printer - HP LJ PRO M1212NF

 

1

 

Printer - HP LJ P2055dn

 

1

 

Printer - HP LJ 2100

 

1

 

Printer - HP 2035

 

1

 

Printer - HP 4250

 

1

 

Printer - Samsung 2251

 

1

 

Printer - HP LJ 4515

 

4

 

Printer - HP LJ 2015

 

1

 

Printer - HP LJ P2035N

 

1

 

 

 

 

 

Items located in Bent Tree, Louisvillle and

 

 

 

Atlanta offices

 

Quantity

 

Computers- Desktop /Laptop

 

66

 

 

 

 

 

Monitors

 

67

 

Keyboard and mice

 

67

 

Avaya 9630 Phones

 

63

 

 

 

 

 

Items located in Louisvillle office

 

Quantity

 

Modular workstation desk

 

6

 

 

 

 

 

Executive chair

 

7

 

Upholstery guest chair

 

13

 

Lateral filing cabinet - 2 drawer

 

2

 

Vertical filing cabinet - 2 drawer

 

18

 

Lateral filing cabinet - 5 drawer

 

5

 

Bookcase - 3 shelves

 

2

 

Executive work desk

 

1

 

Round laminate table

 

1

 

Dry erase board - wood framed

 

1

 

Storage cabinet

 

1

 

 

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

 

Items located in Atlanta office

 

Quantity

 

Round table - 42” with 4 guest chairs

 

2

 

 

 

 

 

Bookcase

 

1

 

Fabric chair - armless

 

2

 

Fabric chair - with arms

 

1

 

Loveseat

 

1

 

Round end table with lamp

 

1

 

Conference table - 10’

 

1

 

Black fabric chairs

 

10

 

U group desk - 2 pieces with hutch

 

2

 

Lateral file - 2 drawer

 

3

 

Free standing desk

 

1

 

Desk chair

 

5

 

Small end table

 

1

 

Desk with return - no hutch

 

1

 

Cubicles - 6 x 6 with desks

 

2

 

Lateral file - 63” 5 drawer

 

1

 

Lateral file - 68” 5 drawer

 

1

 

 

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

 

Annex III

Advisory Fees and Expenses

 

Advisory Fees and Expenses Amount: $4,413,011

 

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

 

SCHEDULES

 

Schedule 1.1(a)

Knowledge Persons of Services Holdings and the Service Providers

Schedule 1.l(b)

REIT I Knowledge Persons

Schedule 3.2(b)

Capitalization

Schedule 5.3

Severance Obligations

Schedule 6.4(a)

Acceptable Behringer Nominees

 

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

 

Schedule 1.1(a)

Knowledge Persons of Services Holdings and the Service Providers

 

1.              Robert S. Aisner

2.              Robert Chapman

3.              Jason Mattox

4.              Stan Eigenbrodt

 

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

 

Schedule 1.1(b)

REIT I Knowledge Persons

 

1.               Scott W. Fordham

2.              William J. Reister

3.              Telisa Webb Schelin

4.              Thomas P. Simon

5.              James E. Sharp

 

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Schedule 3.2(b)

Capitalization

 

1.              Outstanding options to purchase 107,875 shares of common stock
of REIT I

 

2.               432,586 limited partnership units of BH OP (convertible into
equal amount of shares of common stock of REIT I)

 

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[***] Confidential material redacted and filed separately with the Commission.

 

Schedule 5.3

Severance Obligations

 

For the purposes of this Schedule 5.3, years of service refers to years of
service with respect to any member of the Behringer Group or their predecessors.

 

Properly-level and non-executive corporate-level employees

 

***

 

 

 

VP-level and above employees

 

***

 

***

 

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

 

Schedule 6.4(a)

Acceptable Behringer Nominees

 

1.              Robert M. Behringer

2.              Robert S. Aisner

3.              Robert J. Chapman

4.              M. Jason Mattox

 

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