Exhibit 10.1

CONSTRUCTION LOAN AGREEMENT

This CONSTRUCTION LOAN AGREEMENT is entered into as of September 29, 2006
(“Closing Date”), by and between BEHRINGER HARVARD MOUNTAIN VILLAGE, LLC, a
Colorado limited liability company (“Borrower”), and TEXANS COMMERCIAL CAPITAL,
LLC, a Texas limited liability company (“Lender”).

W I T N E S S E T H:

WHEREAS, Borrower has requested that Lender make a loan to Borrower to refinance
the acquisition of the Land and to finance the construction of a residential
condominium development upon the Land, and for certain other purposes related
thereto, which loan is to be secured by, among other things, a first lien deed
of trust on the Property; and

WHEREAS, Lender is willing to make such loan to Borrower subject to and upon the
terms and conditions hereinafter set forth.

NOW, THEREFORE, for and in consideration of the mutual covenants herein
contained and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged by the parties hereto, Borrower and
Lender agree as follows:

ARTICLE I

DEFINITIONS

1.01         Definitions.  For purposes of this Loan Agreement, unless the
context otherwise requires, the following terms shall have the respective
meanings assigned to them in this Article I or in the sections and subsections
referred to below:

“ADA” means the Americans with Disabilities Act of 1990, Pub. L. No. 89-670, 104
Stat. 327 (1990), as amended, and all regulations promulgated pursuant thereto.

“Account” means an account of Borrower established with Texans Credit Union.

“Advance” means a disbursement by Lender of any of the proceeds of the Loan
and/or the Borrower’s Deposit, and “Advances” shall be the plural thereof..

“Affiliate” of any Person means any other Person:

(a)           which directly or indirectly through one or more intermediaries
controls, or is controlled by, or is under common control with, such Person; or

(b)           which, directly or indirectly, beneficially owns or holds 10% or
more of any class of stock or any other ownership interest in such Person; or

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(c)           10% or more of the direct or indirect ownership of which is
beneficially owned or held by such Person.

For purposes of this definition, the term “control” (and its correlative
meanings) means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of stock, by contract or otherwise.  In any event, each of
Borrower and Guarantor, and each of their respective Affiliates, shall be deemed
to be an Affiliate of each of the other of them.

“Anti-Terrorism and Anti-Money Laundering Laws” means the USA Patriot Act of
2001, the Bank Secrecy Act, as amended through the date hereof, Executive Order
13324 – Blocking Property and Prohibiting Transactions with Persons Who Commit,
Threaten to Commit, or Support Terrorism, as amended through the date hereof,
and as they may be amended, and other federal laws and regulations and executive
orders administered by the United States Department of the Treasury, Office of
Foreign Assets Control (“OFAC”) which prohibit, among other things, the
engagement in transactions with, and the provision of services to, certain
foreign countries, territories, entities and individuals (such individuals
include specially designated nationals, specially designated narcotics
traffickers and other parties subject to OAFC sanction and embargo programs),
and such additional laws and programs administered by OFAC which prohibit
dealing with individuals or entities in certain countries regardless of whether
such individuals or entities appear on any of the OFAC lists.

“Applicable Interest Rate” has the meaning assigned in the Note.

“Application for Advance” shall mean a written application submitted by the
Borrower’s Architect and Borrower on American Institute of Architects form G 702
and/or G 703, as appropriate, or such other form as Lender may hereafter request
which shall: (a) request an Advance, (b) specify by name, current address and
amount owed, all parties to whom Borrower is obligated for labor, materials or
services actually furnished for the construction of the particular part of the
Improvements which are the subject matter of such application and all other
expenses incident to the Loan, (c) certify among other things that such amounts
represent payments due for services or labor actually rendered or materials
actually acquired or furnished in connection with construction of the
Improvements, and interest then payable under the Note, (d) state whether the
sum requested is within the Approved Budget and whether, in the opinion of the
Architect and Borrower, the unadvanced portion of the Loan is sufficient to
complete the Improvements pursuant to the Plans and to pay for all labor,
material, interest and other expenses in connection with the Loan and the
construction of the Improvements, (e) if requested by Lender, be accompanied by
copies of billing statements, vouchers or invoices from the parties named
therein, in form satisfactory to Lender, (f) refer to an attached schedule,
verified by the Architect, and the Inspecting Architect/Engineer, identifying in
a manner satisfactory to Lender all materials not yet affixed or incorporated
into the Improvements but which have been covered by certificates submitted to
date, including the current certificate, (g) contain a statement, verified by
the Architect and the Inspecting Architect/Engineer, that all such materials not
yet affixed or incorporated into the Improvements have been stored upon the Land
under adequate safeguards to minimize the possibility of loss, damage or
commingling with other materials or projects, (h) be accompanied by appropriate
waivers of lien rights satisfactory to Lender executed by all contractors,
subcontractors, laborers,

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and materialmen who have furnished labor or material to the Property,
(i) certify that all labor and material bills of every kind and character
incurred by Borrower to the date of such certificate in connection with the
Improvements have been paid in accordance with the payment provisions of each
contract except for the unpaid bills to be paid from the proceeds of the current
Advance requested and items to be retained hereunder, and (j) certify that the
Builder’s Risk Insurance contains sufficient coverage for the construction of
the Improvements.

“Appraisal” means a written appraisal report of the Property, as that term is
defined in the Code of Professional Ethics (the “Appraisal Code”) of the
American Institute of Appraisers, meeting the requirements of the Federal
Institutions Reform, Recovery and Enforcement Act of 1989, prepared by a
professional appraiser approved by Lender, who is a member of the Appraisal
Institute (“MAI”), addressed to Lender and in form, scope and substance
satisfactory to Lender, setting forth such appraiser’s determination of the
market value of the Property on the appraisal date and as projected upon
completion of construction of the Improvements.

“Approved Budget” shall mean a budget or cost itemization prepared by Borrower
and approved in writing by Lender specifying the cost by item of (i) all labor,
materials, and services necessary for the construction of the Improvements in
accordance with the Plans and all Governmental Requirements, and (ii) all other
expenses anticipated by Borrower incident to the Loan, the Property and the
construction of the Improvements, including, without limitation, the Interest
Reserve.

“Architect” shall mean BOKA Powell, LLC whose address is 8070 Park Lane, Suite
300, Dallas, Texas 75231

“Assignment of Leases and Rents” means the Assignment of Leases and Rents dated
of even date herewith and executed by Borrower, as it may from time to time be
renewed, amended, supplemented or restated.

“Assignment of Plans and Specifications” shall mean the written agreement
whereby Borrower assigns its rights in and to the Plans to Lender in the form of
Exhibit F attached hereto.

“Assignment of Rights Under Construction Contract” shall mean the written
agreement whereby Borrower assigns its rights in the Construction Contract to
Lender in the form of Exhibit C attached hereto.

“Audited Financial Statements” means, for any Person, Financial Statements of
such Person in reasonable detail and accompanied by an opinion thereon of
independent public accountants of recognized standing reasonably acceptable to
Lender to the effect that such Financial Statements were prepared in accordance
with GAAP, and that the examination of such accounts in connection with such
Financial Statements has been made in accordance with generally accepted
auditing standards.

“Authorized Signatory” means Gerald J. Reihsen, III and any other person
authorized by Borrower by delivery of written authorization to Lender, each of
whom, without joinder of the

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other, is or will be authorized to execute any Request for Disbursement or any
other notice, request or document required or permitted hereunder to be
submitted by Borrower to Lender.

“Borrower” means BEHRINGER HARVARD MOUNTAIN VILLAGE, LLC, a Colorado limited
liability company.

“Borrower’s Deposit” means the deposit, if any, required of Borrower pursuant to
Section 4.22.

“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in Dallas, Texas are authorized or required by law to close.

“Closing” means the Closing and funding of the Loan.

“Closing Date” means the date of this Loan Agreement.

“Code” means the Uniform Commercial Code as codified in the State of Texas.

“Condemnation Proceeds” shall have the meaning assigned to such term in Section
8.12 of this Loan Agreement.

“Condominium Declaration” means the Condominium Declaration for the Esparanza to
be executed and recorded by Borrower as Declarant, covering the Property, or any
other condominium declaration affecting the Property, howsoever identified, to
which Lender has subordinated the lien of the Mortgage.

“Construction Commitment Termination Date” means April 1, 2008, as may be
extended by Lender in Lender’s reasonable discretion upon the written request of
Borrower.

“Construction Contract” means all construction contracts executed by Borrower
for the construction of all or any part of the Improvements.

“Contractor” means RJM Contractors, LP, whose address is 3629 Lovell Avenue,
Fort Worth, Texas 76197 and each other person contracting with Borrower to
supply labor or materials for the construction of all or any part of the
Improvements, each of whom must be approved in writing by Lender.

“Contractor’s Affidavit and Subordination” means an agreement in substantially
the form of Exhibit E attached hereto and incorporated herein by reference,
executed by each Contractor.

“Debtor Relief Laws” means any applicable relief, liquidation, conservatorship,
bankruptcy, moratorium, rearrangement, insolvency, reorganization, or similar
laws affecting the rights or remedies of creditors generally, as in effect from
time to time.

“Declarant Rights” means all rights reserved to Borrower as Declarant under the
Condominium Declaration.

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“Default Rate” means a per annum interest rate which shall from day-to-day be
equal to the Maximum Rate or, if no Maximum Rate exists, eighteen percent.

“Disclosed Litigation” means the matters listed on Exhibit I attached hereto.

“Distributions” means, with respect to any Person, the payment of any return on
income or proceeds on or with respect to any partner’s, shareholder’s, member’s
or other owner’s investment and/or capital or other contribution to or account
with respect to such Person (whether by cash or other property), or the purchase
of any ownership interest in such Person, or any income or proceeds therefrom.

“Dividends” means dividends (whether by cash, property or preferred stock) or
other distributions of capital stock or partnership interests, or the redemption
or acquisition of stock or any partnership interest unless made
contemporaneously from the net proceeds of the sale of such stock or partnership
interest to an unaffiliated third party.

“Dollars” and the sign “$” means lawful currency of the United States of
America.

“Environmental Audit” means the Phase 1 environmental audit of the Property
commissioned by Lender, prepared by an environmental engineering firm acceptable
to Lender, in form, scope and substance acceptable to Lender.

“Environmental Indemnity Agreement” means the Environmental Indemnity Agreement
dated of even date herewith, and executed by Borrower and Guarantors, as it may
from time to time be amended, confirmed, supplemented or restated.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and the rules and regulations promulgated thereunder by any Governmental
Authority, as from time to time in effect.

“ERISA Affiliate” means any organization, trade or business, or other
arrangement (whether or not incorporated) which is a member of a group of which
Borrower is also a member and which is treated as a single employer within the
meaning of IRC Section 414(b), (c), (m) or (o).

“ERISA Plan” means an employee benefit plan as defined in ERISA Section 3(3)
maintained or contributed to by Borrower or any ERISA Affiliate for employees of
Borrower or any ERISA Affiliate.

“Event(s) of Default” has the meaning set forth in Article VII hereof.

“Financial Statements” means, with respect to any Person, such balance sheets,
statements of operations, statements of cash flow, statements of changes in
partners’ capital or shareholders’ equity and other financial information with
respect to such Person as shall be

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reasonably required by Lender, and which shall be prepared in accordance with
GAAP, consistently applied for all periods.

“Financing Statements” means financing statements to be filed with the
appropriate state and/or county offices for the perfection of a security
interest in any of the Property or any other collateral or security for the
Loan.

“Fiscal Year” means, for any Person, (a) the calendar year, or (b) such other
period as such Person may designate and Lender may approve in writing.

“GAAP” means those generally accepted accounting principles and practices which
are recognized as such by the American Institute of Certified Public Accountants
or by the Financial Accounting Standards Board or through appropriate boards or
committees thereof after the date hereof, and which are consistently applied for
all periods, so as to properly reflect the financial position of a Person,
except that any accounting principle or practice required or permitted to be
changed by the Financial Accounting Standards Board (or other appropriate board
or committee of that Board) in order to continue as a generally accepted
accounting principle or practice may be so changed.

“Governmental Authority” means any federal, state, county, municipal, parish,
provincial, tribal or other government, or any department, commission, board,
court, agency (including, without limitation, the U. S. Environmental Protection
Agency), whether of the United States of America or any other country, or any
instrumentality of any of them, or any other political subdivision thereof
(a) in which any portion of the Property is located, (b) in which any of
Borrower, Guarantor or Lender, or any of their Affiliates, is located or
conducts business, or (c) exercising jurisdiction over Borrower, Guarantor or
Lender, or any of the Property, and any entity exercising legislative, judicial,
regulatory, or administrative functions of, or pertaining to, government
including, without limitation, any arbitration panel, any court or any
commission.

“Governmental Requirements” means all laws, ordinances, rules, regulations,
orders and directives of any Governmental Authority applicable to any of
Borrower, Guarantor, Lender or any of the Property, including, without
limitation, all applicable licenses, building codes, restrictive covenants,
zoning and subdivision ordinances, flood disaster, health and environmental laws
and regulations, and the ADA.

“Guarantors” means, collectively, Behringer Harvard Short Term Opportunity Fund
I LP, a Delaware limited partnership and any other Person at any time
guarantying all or any portion of the Obligation, and “Guarantor” shall mean
each of the Guarantors.

 “Guaranty” means, collectively, those certain Guaranty Agreements of even date
herewith by Guarantors for the benefit of Lender and any other guaranty at any
time executed in connection with the Loan.

“Improvements” means the Residential Condominium and all of the buildings,
improvements, structures, equipment, and amenities which are or will be
constructed and/or installed in relation thereto.

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“Indebtedness” means, with respect to any Person, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (including, without limitation, all obligations,
contingent or otherwise, of such Person in connection with letter of credit
facilities, acceptance facilities or other similar facilities and in connection
with any agreement to purchase, redeem, exchange, convert or otherwise acquire
for value any capital stock of such Person or any warrants, rights or options to
acquire such capital stock, now or hereafter outstanding), (b) all obligations
of such Person evidenced by bonds, notes, debentures or other similar
instruments, (c) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (d) all capital lease obligations of such Person, (e) all
obligations, contingent or otherwise, of such Person in connection with
indemnities, hold harmless agreements and similar arrangements and in connection
with interest rate exchange agreements and similar instruments (provided that
the obligations under such interest rate exchange agreements shall be marked to
market on a current basis), and (f) all Indebtedness of another Person secured
by (or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any lien, security interest or other
charge or encumbrance upon or in property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, but not in
such event in excess of the value of such property.  Notwithstanding the
foregoing, the term “Indebtedness” shall not include unearned deposits held by
Borrower for third parties not an Affiliate in the ordinary course of Borrower’s
business and which are returned to such third parties as required by the
applicable agreement with third parties.

“Initial Advance” means an Advance made on the Closing Date in the amount set
forth in a Borrower’s Statement prepared by the Title Company and approved by
Lender in Lender’s discretion.

“Initial Financial Statements” means the Financial Statements of each Person
delivered to Lender in connection with the application for the Loan.

“Inspecting Architect/Engineer” means such architects and engineers as Lender
shall select to conduct inspections of the Improvements from time to time.

“Inspecting Architect/Engineer Audit” means an audit and review by the
Inspecting Architect/Engineer of the final plans and working drawings for all
improvements to be constructed on the Property satisfactory to Lender in
Lender’s absolute and sole discretion.

“Insurance Policies” means satisfactory evidence (including appropriate
certificates and insurance digests summarizing policies) of insurance and
reinsurance policies (whether individual or blanket) issued by (a) responsible
and reputable insurance companies licensed to do business in Texas having a
Best’s rating of at least A-:VII or such other rating as Lender may specifically
approve, or (b) other insurers reasonably acceptable to Lender.  Such policies
shall include:

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(i)            during the course of construction of the Improvements, builder’s
completed value risk insurance against “all risks of physical loss,” including
collapse and transit coverage, with deductibles not to exceed $50,000, in
nonreporting form, covering the total value of work to be performed and
equipment, supplies and materials to be furnished;

(ii)           insurance on real and personal property for limits reflecting
100% of the full replacement cost (exclusive of foundations and footings) as a
so called “All Risk” form with coverage for flood and earthquake and such other
hazards as Lender may reasonably require.  Such insurance policies shall contain
replacement cost coverage and agreed amount endorsements (with no reduction for
depreciation), an endorsement providing building ordinance coverage, and an
endorsement covering the cost of demolition and increased cost of construction
due to the enforcement of building codes and ordinances;

(iii)          Borrower shall also furnish insurance providing boiler and
machinery for all mechanical and electrical equipment at the Improvements
insuring against breakdown or explosion of such equipment on a replacement cost
value, which coverage shall include coverage for increased cost of construction,
demolition and building laws.  Borrower also shall furnish business interruption
or loss of income insurance in connection with policies covering property and
boiler & machinery, for a period of not less than one year, endorsed to provide
a 180 day extended period of indemnity, which limit for business interruption
shall be in addition to the replacement cost of the building.  Not withstanding
any provisions set forth in paragraphs (a) or (b) above, all insurance required
under this paragraph shall be with companies, in amounts, and with coverage and
deductibles reasonably satisfactory to Lender and all insurance required under
this paragraph shall include endorsements naming Lender as a loss payee and
shall have endorsed thereon a standard mortgage clause in favor of the Lender. 
All policies shall provide that insurance evidenced thereby shall not be
canceled (including for non-payment) or modified without at least 30 days prior
written notice from the insurance carrier to the Lender and no act or thing done
by Borrower or any Affiliate of any of them shall invalidate the policy against
Lender. Borrower shall deliver renewal certificates for policies of insurance
required under this paragraph at least 10 Business Days prior to the expiration
of the then current policy;

(iv)          Commercial General Liability (including contractual liability)
covering the Property and Borrower’s operations in an amount not less than
$1,000,000 per occurrence and $2,000,000 in the aggregate per location;

(v)           Worker’s compensation insurance including liability and any other
appropriate insurance normally carried by companies engaged in similar business
and owning similar properties, in the statutory amount, covering all employees
of Borrower, if any;

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(vi)          Commercial Automobile Liability with a limit of not less than
$1,000,000 combined single limit and to be endorsed to cover owned, hired, and
non-owned automobiles, and garagekeepers liability;

(vii)         Borrower shall also furnish Umbrella Liability coverage in excess
of the foregoing liability coverage with a limit of not less than $10,000,000 or
such higher limits as Lender may reasonably require.

Such insurance policies (other than those referred to in subparagraph (v),
above) shall name Lender, as loss-payee, mortgagee or additional insured, as its
interests may appear, as may be appropriate for the particular type of
insurance.  At such time as any part of the Property is used for the sale or
dispensing of beer, wine or any other alcoholic beverages, Liquor Liability
insurance against claims arising out of such sale or dispensing of beer, wine or
other alcoholic beverages also shall be furnished.

“Interest Reserve” has the meaning assigned in Section 2.06(d).

“IRC” means the Internal Revenue Code of 1986, as amended.

“Land” means the real property described on Exhibit A attached hereto and
incorporated herein by reference.

“Late Payment Fee” has the meaning assigned in the Note.

“Leases” means all present and future space leases, subleases or other
agreements or arrangements, whether written or oral, and all agreements for the
use or occupancy of any portion of the Property, together with any and all
extensions or renewals of said leases and agreements and any and all future
leases or agreements upon or covering the use or occupancy of all or a part of
the Property, but excluding (i) room rents and meeting room rentals and (ii)
any lease entered into or assumed by Borrower, as lessee, to lease Personal
Property for use in connection with the operation of the Property.

“Legal Opinions” means favorable opinions of counsel for Borrower reasonably
acceptable to Lender as to form, scope and substance, and including opinions as
to Texas law.

“Lender” means Texans Commercial Capital, LLC, a Texas limited liability
company.

“Lien” means any lien, mortgage, security interest, assignment, tax lien, pledge
or encumbrance, or conditional sale or title retention agreement, or any other
interest in property designed to secure the repayment of indebtedness, whether
arising by agreement or under any statute or law, or otherwise.

“Loan” means the loan by Lender to Borrower, in an amount not to exceed the Loan
Amount, in accordance with this Loan Agreement and the other Loan Documents.

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“Loan Agreement” or “Agreement” means this Construction Loan Agreement, together
with all amendments and modifications hereof and supplements and attachments
hereto.

“Loan Amount” means Thirty-One Million Six Hundred Fifty Thousand and No/100
Dollars ($31,650,000.00).

“Loan Documents” means this Loan Agreement, the Note, the Mortgage, the
Financing Statements, the Environmental Indemnity Agreement, the Guaranty, the
Assignment of Leases and Rents,  and such other instruments evidencing,
securing, or pertaining to the Obligation, or any part thereof, as shall, from
time to time, be executed and delivered by Borrower, any Guarantor, or any other
Person to Lender pursuant to or in connection with this Loan Agreement or any
other Loan Document.

 “Managing Member” means Behringer Harvard Short Term Opportunity Fund I LP.

“Material Agreement” means any contract or agreement with respect to the
ownership or operation of the Property requiring total consideration of $100,000
or more, which Lender reasonably determines has a material impact on the
ownership or operation of the Property.

“Maturity Date” has the meaning assigned in the Note.

“MAXIMUM RATE” MEANS THE MAXIMUM RATE (OR, IF THE CONTEXT SO REQUIRES, AN AMOUNT
CALCULATED AT SUCH RATE) OF INTEREST WHICH THE HOLDER OF THE NOTE IS ALLOWED TO
CONTRACT FOR, CHARGE, TAKE, RESERVE, OR RECEIVE UNDER APPLICABLE LAW AFTER
TAKING INTO ACCOUNT, TO THE EXTENT REQUIRED BY APPLICABLE LAW, ANY AND ALL
RELEVANT PAYMENTS OR CHARGES.

“Minor Condemnation Proceeds” means, for all Condemnation Proceeds resulting
from any one (1) condemnation of the Property as described in Section 8.12, that
such Condemnation Proceeds do not exceed Two Hundred Fifty Thousand Dollars
($250,000.00).

“Mortgage” means the certain Deed of Trust, Security Agreement, Financing
Statement and Assignment of Rental, of even date herewith, executed by Borrower
for the benefit of Lender, covering the Property, as it may, from time to time,
be renewed, extended, modified, increased or supplemented.

“Multiemployer Plan” means a multiemployer plan as defined in ERISA
Section 4001(a)(3) or IRC Section 414 to which Borrower or any ERISA Affiliate
contributes, has contributed since September 2, 1974, or is required to
contribute.

“Net Sale Proceeds” means, with respect to each sale of a Unit, the remainder of
(i) the gross sales price for the Unit, less (ii) a sales commission not greater
than six percent and less (iii) customary third party closing costs in
Telluride, Colorado paid by a seller and actually paid by Borrower, all such
commissions and costs not to exceed eleven percent of the gross sales price.

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“Note” means the promissory note issued by Borrower to Lender pursuant to
Section 2.03 hereof, as it may be renewed, extended, modified or increased.

“Obligation” means all present and future indebtedness, obligations, and
liabilities of Borrower to Lender, and all renewals and extensions thereof, or
any part thereof, arising (a) pursuant to this Loan Agreement or represented by
the Note, and all interest accruing thereon, and reasonable attorneys’ fees
incurred in the drafting, negotiation, enforcement or collection thereof,
regardless of whether such indebtedness, obligations, and liabilities are
direct, indirect, fixed, contingent, joint, several or joint and several;
together with all indebtedness, obligations and liabilities of Borrower
evidenced or arising pursuant to any of the other Loan Documents, and all
renewals, modifications, increases and extensions thereof, or any part thereof,
(b) pursuant to any other loan and/or advances which Lender may hereafter make
to Borrower in connection with the Loan or the Property or any portion thereof,
and (c) pursuant to all other and additional debts, obligations and liabilities
of every kind and character of Borrower now or hereafter existing in favor of
Lender, in connection with the Loan or the Property or any portion thereof,
regardless of whether such debts, obligations and liabilities be direct or
indirect, primary or secondary, joint, several or joint and several, fixed or
contingent, and regardless of whether such present or future debt, obligations
and liabilities may, prior to their acquisition by Lender, be or have been
payable to or in favor of some other person or entity or have been acquired by
Lender in a transaction with one other than Borrower.

“OFAC Prohibited Person” means, a country, territory, individual or Person (i)
listed on, included within or associated with any of the countries, territories,
individuals or entities referred to on The Office of Foreign Assets Control’s
List of Specially Designated Nationals and Blocked Persons or any other
prohibited person lists maintained by governmental authorities, or otherwise
included within or associated with any of the countries, territories,
individuals or entities referred to in or prohibited by any other Anti-Terrorism
and Anti-Money Laundering Laws, or (ii) which is obligated or has any interest
to pay, donate, transfer or otherwise assign any property, money, goods,
services, or other benefits from the Mortgaged Property directly or indirectly,
to any countries, territories, individuals or entities on or associated with
anyone on such list or in such laws.

“Operating Agreements” means any agreement entered into by or on behalf of
Borrower, other than the Management Agreement and the Scheduled Personal
Property Contracts, which relates to the ownership, operation or maintenance of
the Property, but excluding cash purchase agreements.

“Organizational Documents” means:

For any limited partnership, the following:

(a)           Certificate of Limited Partnership and all amendments thereto,
certified as complete and correct by the Secretary of State (or other
appropriate officers) of the state of formation, together with a copy of the
partnership agreement, and all amendments thereto, certified as complete and
correct by the general partners of the partnership;

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(b)           Current certificates of existence and good standing issued by the
appropriate state officer(s) of the state of formation and states in which the
partnership does business; and

(c)           Consents of partners to the extent necessary under the partnership
agreement; and

For any general partnership, the following:

(a)           Certified copy of partnership agreement; and

(b)           Consent of partners to the extent necessary under the partnership
agreement.

For any corporation, the following:

(a)           Copy of the Articles of Incorporation of such corporation and all
amendments thereto certified as complete and correct by the Secretary of State
(or other appropriate officer) of the state of incorporation, together with a
true copy of the By-laws of such corporation and all amendments thereto;

(b)           A current certificate of corporate existence of such corporation
and certificate evidencing the filing of all required franchise tax reports and
the payment of all franchise taxes due, each issued by the appropriate officer
or department of the state of incorporation;

(c)           A signed certificate of the Secretary or Assistant Secretary of
such corporation certifying the names of the officers of such corporation
authorized to sign each of the Loan Documents to which it is a party and the
other documents or certificates to be delivered pursuant to the Loan Documents
to which it is a party, together with the true signatures of each such officer. 
Lender may conclusively rely on such certificate until Lender shall receive a
further certificate of the Secretary or Assistant Secretary of such corporation
canceling or amending the prior certificate and submitting the signatures of the
officers named in such further certificate; and

(d)           Resolutions of such corporation approving the execution, delivery
and performance of the Loan Documents to which such corporation is a party and
the transactions contemplated therein, duly adopted by the Board of Directors of
such corporation and accompanied by a certificate of the Secretary or Assistant
Secretary of such corporation stating that such Resolutions are true and
correct, have not been altered or repealed and are in full force and effect.

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For any limited liability company, the following:

(a)           Copy of the Regulations or other formation document of such
limited liability company and all amendments thereto certified as complete and
correct by the Secretary of State (or other appropriate officer) of the state of
formation;

(b)           A current certificate of existence of such entity and certificate
evidencing the filing of all required franchise tax reports and the payment of
all franchise taxes due, each issued by the appropriate officer or department of
the state of formation;

(c)           A signed certificate of the manager of such entity certifying the
names of the members or managers of such entity authorized to sign each of the
Loan Documents to which it is a party and the other documents or certificates to
be delivered pursuant to the Loan Documents to which it is a party, together
with the true signatures of each such member or manager.  Lender may
conclusively rely on such certificate until Lender shall receive a further
certificate of the manager of such entity canceling or amending the prior
certificate and submitting the signatures of the members or managers named in
such further certificate; and

(d)           Resolutions of the members of such entity approving the execution,
delivery and performance of the Loan Documents to which such entity is a party
and the transactions contemplated therein, duly adopted by the members of such
entity and accompanied by a certificate of the manager of such entity stating
that such resolutions are true and correct, have not been altered or repealed
and are in full force and effect.

“Origination Fee” means the Origination Fee required by and described in Section
2.05 hereof.

“Participant” shall have the meaning given to such term in Section 9.09(b).

“Payment Date” has the meaning assigned in the Note.

“PBGC” means the Pension Benefit Guaranty Corporation, and any successor to all
or any of the Pension Benefit Guaranty Corporation’s functions under ERISA.

“Permitted Exceptions” means the exceptions to title listed on Exhibit B
attached to the Mortgage.

“Permitted Indebtedness” means (a) the Loan, (b) property taxes and insurance
premiums accrued but not delinquent, (c) indebtedness for items permitted under
the Approved Budget for which no Advance has yet been made for payment and which
is not past due, and (d) trade Indebtedness incurred in the ordinary course of
business of operation and maintenance of the Property in an amount not to exceed
$100,000.00, which is not past due..

“Permitted Liens” means (a) the Permitted Exceptions, (b) Liens for taxes,
assessments, or governmental charges or levies not yet due or which Borrower is
actively contesting in good faith by appropriate proceedings and in conformance
with Sections 4.10 and 4.11 hereof, (c) Liens for any other purpose which
Borrower is actively contesting in good faith by

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appropriate proceedings and in conformance with Section 4.11 hereof and (d)
Liens in favor of Lender as contemplated in this Loan Agreement.

“Permitted Personal Property Transaction” means (a) any sale, assignment, trade,
transfer, exchange or other disposition of any item of Personal Property which
(i) has become obsolete or worn beyond practical use, and (ii) has been replaced
by an adequate substitute having a value equal to or greater than the replaced
item when new, which replacement item is owned by Borrower and is subject to a
first, perfected security interest in favor of Lender, and (b) sales of food and
beverages and gift shop inventory, to the extent such sales are made in the
ordinary course of Borrower’s business.

“Permitted Transfer” means any transfer of any limited partnership interest in
Borrower other than to an OFAC Prohibited Person provided that Behringer Harvard
Short-Term Opportunity Fund I at all times owns, directly or indirectly, at
least fifty-one percent of the ownership interests in Borrower..

“Person” means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization, government
or any agency or political subdivision thereof, or any other form of entity.

“Personal Property” means all fixtures, building materials, machinery,
equipment, inventory, furniture, furnishings, and personal property used in
connection with or resulting from the operation of the Property.

“Plans” means the final working drawings and specifications as prepared for the
construction, renovation or reconstruction of the Improvements as provided in
Section 4.15.

“Potential Default” means the occurrence of any event or circumstance which,
after the giving of notice or passage of time, or both, could constitute an
Event of Default.

“Pre-Sale Contract” means a written commitment from a third-party not an
Affiliate of Borrower or any member of Borrower for the purchase of a Unit for a
purchase price not less than that set forth in the Price Schedule attached
hereto as Exhibit J.

“Prohibited ERISA Transaction” means a transaction that is prohibited under IRC
Section 4975 or ERISA Section 406 and not exempt under IRC Section 4975 or ERISA
Section 408.

“Property” means the Land, the Improvements, the Personal Property, all other
estates, easements, licenses, interests, rights, titles, powers and privileges
of every kind and character arising from or used in connection with the
ownership or operation of the Land, and all accounts, accounts receivable,
inventory, instruments, chattel paper, documents, consumer goods, insurance
proceeds, Leases, contract rights and general intangibles used in connection
with or resulting from the ownership or operation of the Land, Improvements or
Personal Property, and all other property and appurtenances constituting the
“Mortgaged Property,” as described in the Mortgage.

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“Purchaser” means (a) any purchaser of all or any portion of the Property at
foreclosure or by deed in lieu of foreclosure, (b) Lender or any Affiliate of
Lender as the purchaser or successor owner of all or any portion of the Property
following foreclosure or deed in lieu of foreclosure, and any transferee of any
such Person which acquires the Property.

“Quarterly Period” means each fiscal quarter of Borrower.

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System, from time to time in effect, and shall include any successor or
other regulation relating to reserve requirements applicable to member banks of
the Federal Reserve System.

“Regulation U” means Regulation U promulgated by the Board of Governors of the
Federal Reserve System, 12 C.F.R. Part 221, or any other regulation hereafter
promulgated by said Board to replace the prior Regulation U and having
substantially the same function.

“Regulation X” means Regulation X promulgated by the Board of Governors of the
Federal Reserve System, 12 C.F.R. Part 224, or any other regulation hereafter
promulgated by said Board to replace the prior Regulation X and having
substantially the same function.

“Rents” means all rents, royalties, bonuses, income, accounts, accounts
receivable, receipts, revenues, issues, profits and other benefits derived from
the Property or any part thereof, or the occupation, use or enjoyment of the
Property, or any part thereof, or from any Lease, and all proceeds payable under
any policy of insurance covering the loss of rent or income resulting from
destruction of or damage to the Property.

“Reportable Event” shall have the meaning assigned to that term in Title IV of
ERISA.

“Residential Condominium” means a four building, 23 unit residential
condominium, and related amenities, to be constructed by Borrower on the
Property.

“Soils Report” means a report prepared by a competent engineer certifying that
the soils of the Property are adequate to support the Improvements.

“Subsidiary” means, with respect to any Person, any other Person directly or
indirectly owned by such Person.

“Survey” means a current, certified survey of the Land and Improvements in form
and substance, including certification, acceptable to Lender and meeting the
requirements of Exhibit G attached hereto.

“Tax Information” means tax certificates from the tax assessor-collectors of all
taxing authorities having jurisdiction over all or any part of the Property
setting forth all outstanding ad valorem taxes against such property.

“Term” means the period commencing on the Closing Date and ending on the
Maturity Date.

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“Title Company” means Stewart Title Guaranty Company, through its agent,
Telluride Mountain Title Company, 335 W. Colorado Avenue, Telluride, Colorado
81435, 970-728- 3025 (Telephone), 970-728-6416 (Fax); Attention:  Colette
Raeber.

“Title Insurance Commitment” means the commitment to issue the Title Insurance
Policy issued by the Title Company, along with copies of all instruments
creating or evidencing exceptions or encumbrances to title.

“Title Insurance Policy” means a Mortgagee Title Insurance Policy from the Title
Company and insuring the priority and sufficiency of the Mortgage as a first
Lien upon the Land and Improvements (a) in an amount equal to the Loan Amount,
(b) showing all easements or other matters affecting the Property, all subject
only to such exceptions or qualifications as are acceptable to Lender in its
sole discretion, (c) insuring unconditionally against contractors’, suppliers,
and mechanics’ lien claims recorded prior to the date hereof, as well as matters
related to the Survey; (d) contain any endorsements or assurances that Lender
may reasonably request for protection of its interests including, but not
limited to, (i) comprehensive endorsement, (ii) variable rate endorsement,
(iii) zoning endorsement, and (iv) an access endorsement, insuring that there
will be at least one location at the Property with unlimited vehicular ingress
and egress to an adjacent publicly dedicated street.

“Unit” means each residential condominium unit under the Condominium
Declaration.

“UCC Searches” means central and local current financing statement searches from
Texas and such other jurisdictions as Lender may request, covering the Borrower
and any other known owner of the Property during the past five years, together
with copies of all financing statements listed in said search.

1.02                           Other Definitional Provisions.

(a)           All terms defined in this Loan Agreement shall have the
above-defined meanings when used in the Notes or any of the other Loan
Documents, or in any other certificate, report or other document made or
delivered pursuant to this Loan Agreement, unless the context therein shall
otherwise require.

(b)           Defined terms used in the singular shall import the plural and
vice versa.

(c)           The words “hereof,” “herein,” “hereunder” and similar terms when
used in this Loan Agreement shall refer to this Loan Agreement as a whole and
not to any particular provision of this Loan Agreement.

(d)           Any accounting terms used in this Loan Agreement which are not
separately defined shall have the meanings customarily given them in accordance
with GAAP.

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ARTICLE II

THE LOAN

2.01         The Loan.

(a)           Subject to the terms and conditions of this Loan Agreement and
relying upon the representations and warranties herein set forth, and provided
that no Potential Default or Event of Default has occurred and is continuing,
Lender agrees to advance the Initial Advance to Borrower on the Closing Date and
to make Advances to Borrower from time to time as set forth in this Loan
Agreement.  The Advances for which Borrower qualifies hereunder shall be made
from time to time from the date hereof to and including the Construction
Commitment Termination Date (provided that, to the extent there remain funds in
the Interest Reserve, those funds may be advanced after the Construction
Commitment Termination Date).  Lender shall have no obligation to make any
advance hereunder after the Construction Commitment Termination Date. 
Notwithstanding anything herein to the contrary, the commitment of Lender to
make Advances shall terminate if Borrower has not satisfied all conditions
precedent to the first of the Advances contemplated in Section 2.12 on or before
November 1, 2006.  The Loan is not revolving and any principal payment or
prepayment made may not be reborrowed.

(b)           Lender shall advance the Initial Advance on the Closing Date by
wire transfer in immediately available funds to the Title Company for the
benefit of Borrower.

2.02         Interest on the Loan.  The Loan shall bear interest as provided in
the Note.

2.03         Note; Repayments.  The Loan shall be evidenced by and payable as
provided in the Note.  After the maturity of the Loan, the obligations of
Borrower and the rights and privileges of Lender under this Loan Agreement, the
Note and all other Loan Documents shall continue in full force and effect until
the Note and the remaining Obligation have been paid and performed in full.

2.04         Manner and Application of Payments.  All payments of principal of
and interest on the Loan, and of all other amounts payable under this Loan
Agreement or the other Loan Documents by Borrower to or for the account of
Lender, shall be made by Borrower to Lender, before 1:00 p.m. (Dallas, Texas
time) in federal or other immediately available funds.  Should any payment
required hereby become due and payable on a day other than a Business Day, the
maturity thereof shall be extended to the next succeeding Business Day.  Funds
received after 1:00 p.m. (Dallas, Texas time) shall be treated for all purposes
as having been received by Lender on the first Business Day next following
receipt of such funds.  All payments made on the Loan so long as no Event of
Default has occurred and is continuing shall be applied (except as may be
otherwise required by applicable Governmental Requirements) first to any payment
on the Loan (including principal, interest, costs, fees and expenses) then due
and owing, second to any past-due payment on the Loan, and third, to the
remaining Obligation in such order and manner as Lender may determine, any
instructions from Borrower or any other Person to the contrary

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notwithstanding.  All payments made on the Loan while an Event of Default has
occurred and is continuing shall be applied (except as may be otherwise required
by applicable Governmental Requirements) to the Obligation in such order and
manner as Lender may determine, any instructions from Borrower or any other
Person to the contrary notwithstanding.  Subject to the foregoing limitations,
Lender may, in its sole and absolute discretion, apply payments first to satisfy
the portion of the Obligation, if any, for which Borrower or any other Person
has no personal, partnership or corporate liability, if any, and then to the
remaining Obligation.

2.05         Origination Fee.  Contemporaneously with its execution of this
Agreement, Borrower shall pay to Lender an Origination Fee (herein so called) in
the amount of Three Hundred Sixteen Thousand Five Hundred Dollars ($316,500.00),
in consideration for the agreement of Lender to enter into this Agreement.

2.06         Advances.

(a)           Timing of Advances.  Advances for the payment of the cost of
labor, materials, and services supplied for the construction of the Improvements
shall be made by Lender upon compliance by Borrower with the terms and
conditions contained in this Loan Agreement after actual commencement of
construction of the Improvements for work actually done during the preceding
period.  From time to time, but no more frequently than monthly, Borrower may
submit to Lender an Application for Advance requesting an Advance under the Loan
for the payment of the cost of labor, materials, and services supplied for the
construction of the Improvements and for the payment of other costs and expenses
incident to the Loan or the construction of the Improvements and specified in
the Approved Budget.  Lender may require an inspection of, and favorable report
on, the Improvements by the Inspecting Architect/Engineer prior to making any
Advance.  Each Application for Advance shall be submitted by Borrower to Lender
a reasonable time (but not less than five (5) Business Days) prior to the date
upon which the Advance requested is desired by Borrower.  Borrower shall be
entitled to an Advance only in an amount approved by Lender.

(b)           Limitation on Advances.  Advances for payment of the cost of
construction of the Improvements shall not exceed the aggregate of (i) the cost
of labor, materials, and services incorporated into the Improvements in a manner
acceptable to Lender and as specified in the Approved Budget, plus (ii) the
purchase price of all uninstalled materials to be utilized in the construction
of the Improvements and stored upon the Property, or elsewhere with the written
consent of, and in a manner acceptable to, Lender, less (iii) retainage of not
less than ten percent (10%), and less (iv) all prior Advances made for payment
of the cost of labor, materials, and services for the construction of the
Improvements.  No Advances shall be made after the Construction Commitment
Termination Date.

(c)           Final Advance.  The final Advance, including all retainage, will
not be made until the expiration of thirty (30) days from the date of final
completion and acceptance by Lender of the Improvements, and in any event not
until Lender has received the following with respect to the Improvements and the
Loan; (i) a certificate from the Inspecting

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Architects/Engineers certifying to Lender that the Improvements have been
completed substantially in accordance with the Plans, (ii) evidence that no
mechanic’s or materialman’s liens or other encumbrances have been filed and
remain in effect against the Improvements, (iii) evidence that all Governmental
Requirements have been satisfied, including without limitation, delivery to
Lender of a Certificate of Occupancy permitting the Improvements to be legally
occupied, and (iv) a liens paid affidavit executed by Borrower and the
Contractor to the effect that (and/or, at Lender’s request, final lien releases
or waivers evidencing to Lender’s satisfaction that) all subcontractors,
materialmen, and other parties who have supplied labor, materials, or services
for the construction of the Improvements, or who otherwise might be entitled to
claim a contractual, statutory, or constitutional lien against the Property,
have been paid in full with respect to the Improvements, or Borrower, at its
option, may provide to Lender a Bond indemnifying Against Liens (pursuant to
Tex. Property Code §53.171) in such amount as Lender may reasonably require.

(d)           Interest Reserve Advances.  Borrower acknowledges and agrees that
the sum of Three Million One Hundred Thirty-Eight Thousand Four Hundred Seventy
Five and No/100 Dollars ($3,138,475.00) of the Loan as specified or to be
specified in the Approved Budget represents a reserve for the payment of
interest upon the full amount of the Advances of the Loan (the “Interest
Reserve”) pursuant to this Loan Agreement.  Borrower hereby authorizes Lender,
and Lender shall have the right, to disburse and charge (or cause to be
disbursed and charged) the Interest Reserve in reimbursement of Borrower for the
interest payments made by Borrower under this Loan Agreement and the other
Security Documents on each interest payment date as such interest payments
become due and payable pursuant to the terms hereof and of the Note.  Such
disbursements shall be made as Advances of the Loan, in amounts equal to the
accrued interest which has been paid on each of such interest payment dates. 
Interest as provided in the Note will be charged on any disbursed portion of the
Interest Reserve as and when disbursed, but interest will not be charged on the
undisbursed portion of the Interest Reserve.  If, at any time during the term of
the Loan, the Interest Reserve shall become depleted or shall be deemed by
Lender to be insufficient to reimburse Borrower for the interest payments on the
Loan as they are made, interest shall be payable on each interest payment date
in accordance with the terms of the Loan Agreement and the Note, and Lender
shall have no obligation to make any Advance to Borrower for any such interest
payments from the remaining proceeds of the Loan.  The Interest Reserve shall be
available only for disbursement of the periodic payments of accrued interest due
to Lender on the Loan pursuant to the terms of this Loan Agreement and the Note,
and for no other purpose.  If, at any time, Lender shall not have received on
the date due, any payment of interest upon the Loan, Lender may, at its sole
option, disburse the Interest Reserve directly in payment of such interest
amount.  Advances of the Interest Reserve shall be subject to the terms and
conditions of this Loan Agreement, including, without limitation, the conditions
precedent set forth in Sections 2.11 and 2.12.

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2.07         Prepayment of Loan.

(a)           Voluntary.

(i)            At any time and from time to time Borrower may, upon five (5)
Business Days’ written notice to Lender, prepay the principal of the Loan then
outstanding, in whole or in part, without penalty or premium; provided, however,
that  each prepayment of less than the full outstanding principal balance of the
Loan shall be in an amount equal to at least One Hundred Thousand Dollars
($100,000) and integral multiples thereof.

(ii)           All prepayments under this Section 2.07 shall also be subject to
the other terms of this Loan Agreement.

(iii)          All prepayments by Borrower hereunder shall be made by Borrower
to Lender, before 1:00 p.m. (Dallas, Texas time) in federal or other immediately
available funds.  Funds received after 1:00 p.m. (Dallas, Texas time) shall be
treated for all purposes as having been received by Lender on the first Business
Day next following receipt of such funds.  All prepayments made on the Loan
hereunder shall be made together with interest accrued (through the date of such
prepayment) on the principal amount prepaid, and shall be applied by Lender in
the manner described in Section 2.04 hereof.

(b)           Mandatory.  Borrower shall deliver to Lender, on October 1, 2008,
a prepayment of the principal balance of the Loan in the amount of $5,000,000.00
unless, prior to that date, Borrower has delivered to Lender valid and
subsisting Pre-Sale Contracts evidencing prospective Net Sale Proceeds of not
less than $6,000,000.00.

(c)           Partial Releases.  Borrower shall be entitled to partial releases
of the lien of the Mortgage in accordance with the terms and provisions of
Article VI of the Mortgage.  Each Release Price (as defined in the Mortgage)
received by Lender shall be applied as provided in Section 2.04 of this
Agreement.

2.08         Taxes.

(a)           Any and all payments by Borrower hereunder and under the other
Loan Documents shall be made free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, but excluding, with
respect to Lender, (i) taxes imposed on its income, and franchise taxes imposed
on it, by the jurisdiction under the laws of which Lender is organized or any
political subdivision thereof and, taxes imposed on its income, and franchise
taxes imposed on it, by the jurisdiction of Lender’s applicable lending office
or any political subdivision thereof and (ii) income and franchise taxes and any
other taxes imposed by the United States of America by means of withholding at
the source if and to the extent that such taxes shall be in effect and shall be
applicable, on the date hereof, to payments to be made to Lender (all such
taxes, levies, imposts, deductions,

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charges, withholdings and liabilities except as so excluded being hereinafter
referred to as “Taxes”).  If Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder to Lender, (A) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.08) Lender receives an amount equal to the sum it would have
received had no such deductions been made, (B) Borrower shall make such
deductions and (C) Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.

(b)           In addition, Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Loan Agreement
or any other Loan Document (hereinafter referred to as “Other Taxes”).

(c)           Borrower will indemnify Lender for the full amount of Taxes or
Other Taxes (including, without limitation, any Taxes or Other Taxes imposed by
any jurisdiction on amounts payable under this Section 2.08) paid by Lender and
any liability (including penalties, interest and expenses) arising therefrom or
with respect thereto except as a result of the gross negligence or willful
misconduct of Lender, whether or not such Taxes or Other Taxes were correctly or
legally asserted.  This indemnification shall be made within thirty (30) days
from the date Lender makes written demand therefor.

(d)           Within thirty (30) days after the date of any payment of Taxes by
or at the direction of Borrower, Borrower will furnish to Lender, at its address
referred to in Section 9.01 hereof, the original or a certified copy of a
receipt evidencing payment thereof.

(e)           Lender shall endeavor in good faith (consistent with its internal
policies and legal and regulatory restrictions) to select a jurisdiction for its
lending office or change the jurisdiction for its lending office, as the case
may be, so as to avoid the imposition of any Taxes or Other Taxes or to reduce
the amount of any such additional amounts which may thereafter accrue; provided
that no such selection or change of the jurisdiction for its lending office
shall be made if, in the judgment of Lender, such selection or change would be
disadvantageous to Lender.

(f)            Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in this
Section 2.08 shall survive the payment in full of the Obligation.

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2.09         Lending Office.  Lender may change its lending offices from time to
time by notice to Borrower.  Any such change in Lender’s principal office or
lending office which is a result of an election by Lender for its internal
corporate convenience shall not increase the cost of the Loan to Borrower.

2.10         Conditions Precedent for the Benefit of Lender.  All conditions
precedent to the obligation of Lender to make the Loan or any Advance are
imposed hereby solely for the benefit of Lender, and no other party may require
satisfaction of any such condition precedent or be entitled to assume that
Lender will refuse to make the Loan or any Advance in the absence of strict
compliance with such conditions precedent.  All requirements of this Loan
Agreement may be waived by Lender, in whole or in part, at any time in Lender’s
sole discretion.

2.11         Conditions to the Initial Advance.  As a condition precedent to the
Initial Advance under the Loan, Borrower must satisfy the conditions required
hereunder and execute and deliver to, procure for and deposit with, and pay to
Lender, and if appropriate, record in the proper records with all filing and
recording fees paid, the documents, certificates, and other items described in
Article VI, together with such other documents, instruments and certificates as
Lender may reasonably require from time to time.

2.12         Conditions to Subsequent Advances.  As a condition precedent to
each Advance subsequent to the Initial Advance, and in addition to all other
requirements herein, Borrower must satisfy the following requirements:

(a)           All conditions precedent to the Initial Advance shall have been
satisfied;

(b)           Borrower shall have delivered to Lender the following:

(i)            the Plans;

(ii)           the Construction Contract, executed by all parties;

(iii)          the Contractor’s Affidavit and Subordination, executed by
Borrower;

(iv)          the Assignment of Plans and Specifications, executed by Borrower
and acknowledged and consented to by the Architect;

(v)           the Assignment of Rights under Construction Contract, executed by
Borrower;

(vi)          a building permit for the construction of the Improvements and all
related amenities;

(vii)         the Approved Budget; and

(viii)        any endorsements to the Title Policy which Lender shall require.

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(c)           There shall exist no Event of Default or Potential Default;

(d)           The representations and warranties made in this Loan Agreement
shall be true and correct on and as of the date of each Advance, with the same
effect as if made on such date;

(e)           If any agreement or other instrument binding upon Borrower
requires that a consent of any third party be obtained before Borrower may
execute, deliver or perform this Loan Agreement, the Note or the other Loan
Documents executed by such party, then such consent shall be delivered to
Lender;

(f)            Borrower shall procure and deliver to Lender, the Inspecting
Architect/Engineer  and the Title Company releases or waivers of mechanic’s
liens and receipted bills showing payment to all parties who have furnished
materials or services or performed labor of any kind in connection with the
construction of any of the Improvements;

(g)           Promptly upon preparation thereof, Borrower shall deliver to
Lender copies of any inspection reports prepared by the Inspecting
Architect/Engineer, and/or any Governmental Authority having jurisdiction over
the Improvements;

(h)           Borrower shall procure and deliver to Lender, if required by
Lender, evidence reasonably satisfactory to Lender that the amount theretofore
invested by Borrower in the Property, together with the funds remaining to be
advanced by Lender under the terms of this Loan Agreement, or sums which
Borrower agrees to make available, are adequate to meet all costs incurred and
to be incurred in connection with the construction of the Improvements;

(i)            Borrower shall procure and deliver to Lender inspection reports,
in form and substance acceptable to Lender, from the Inspecting
Architect/Engineer at not less than thirty (30)-day intervals; and

(j)            Borrower shall have deposited into the Borrower’s Deposit such
funds as Lender may have required pursuant to Section 4.22 hereof.

2.13         Reallocation of Approved Budget.  At any time that an Event of
Default has occurred and is continuing, Lender shall have the right from time to
time to make Advances which are allocated to any of the designated items in the
Approved  Budget for such other purposes or in such different proportions as
Lender may, in its sole discretion, deem necessary or advisable.  Borrower may
not reallocate items of cost or make changes in the Approved Budget without the
prior written consent of Lender, except that upon presentation to Lender of
reasonable evidence of demonstrated cost savings in a line item, the Borrower
may reallocate the cost savings in that line item to another line item.

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2.14         No Waiver.  No Advance shall constitute a waiver of any condition
precedent to the obligation of Lender to make any further Advance or preclude
Lender from thereafter declaring the failure of Borrower to satisfy such
conditions precedent to be an Event of Default.

2.15         Subordination.  Lender shall not be obligated to make, nor shall
Borrower be entitled to receive, any Advance until such time as Lender shall
have received, to the extent requested by Lender, the Contractor Affidavit and
Subordination from the Contractor, and subordination agreements from all other
persons furnishing labor, materials, or services for the design or construction
of the Improvements, subordinating to the lien of the Mortgage any lien, claim
or charge which such party may have against Borrower or the Property.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF BORROWER

To induce Lender to enter into this Loan Agreement and to make the Loan
hereunder, Borrower hereby represents and warrants to Lender as of the Closing
Date the matters set forth in this Article III.

3.01         Organization.

(a)           Borrower.  Borrower is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Colorado,
in accordance with the Organizational Documents of Borrower.  The business which
Borrower carries on and which it proposes to carry on may be conducted in
limited partnership form by Borrower.  Managing Member is the sole managing
member of Borrower and owns one hundred percent (100%) of the Class A interests
in Borrower.  Borrower is duly authorized to conduct business in Texas and in
each other jurisdiction, if any, in which the nature of its properties, assets
or activities require such authorization.  Except as disclosed in writing to
Lender, neither General Partner nor Behringer Harvard Mockingbird Commons
Investors LP have transferred, assigned, pledged or mortgaged its interest in
Borrower or any profits or proceeds therefrom.

(b)           Guarantors.  Behringer Harvard Short Term Opportunity Fund I LP is
a limited liability company duly formed, validly existing and in good standing
under the laws of the State of Texas in accordance with the Organizational
Documents of such person.  The business which any Guarantor carries on and which
it proposes to carry on may be conducted in limited liability company form by
such Guarantor.  In addition, each Guarantor is duly authorized to conduct
business in Texas and in each other jurisdiction in which the nature of its
properties, assets or activities require such authorization.  Except as
disclosed in writing to Lender, no partner or member of any Guarantor has
transferred, assigned, pledged or mortgaged its interest in such Guarantor or
any profits or proceeds therefrom.

3.02         Authorization and Power.  Each of Borrower and each Guarantor has
the power and requisite authority to execute, deliver, and perform its
respective obligations under this Loan Agreement and the other Loan Documents to
which it is a party; each of Borrower and each

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Guarantor is duly authorized to, and has taken all action necessary to authorize
it to, execute, deliver and perform under this Loan Agreement and each of the
other Loan Documents to which it is a party and is and will continue to be duly
authorized to perform under this Loan Agreement and the other Loan Documents to
which it is a party.

3.03         Valid and Binding Obligation.  All of the Loan Documents, and all
other documents referred to herein to which Borrower, any Guarantor, or any
Partner is a party, upon execution and delivery by such Person, will constitute
valid and binding obligations of such Person, enforceable in accordance with
their terms, except as limited by Debtor Relief Laws and by general principles
of equity (regardless of whether such enforceability is considered in a
proceeding at law or in equity).

3.04         Conflicts.  Neither the execution and delivery of this Loan
Agreement, the Note or the other Loan Documents to which Borrower, any Guarantor
or any Partner is a party, nor consummation of any of the transactions herein or
therein contemplated nor compliance with the terms and provisions hereof or with
the terms and provisions thereof, will contravene any provision of law, statute,
rule or regulation to which such Person is subject or any judgment, decree,
license, order or permit applicable to such Person, or will conflict or be
inconsistent with, or will result in any breach of any of the terms of the
covenants, conditions or provisions of, or constitute a delay under, or result
in the creation or imposition of a Lien (except Liens in favor of Lender) upon
any of the property or assets of such Person pursuant to the terms of any
indenture, mortgage, deed of trust, agreement or other instrument to which such
Person is a party or by which such Person may be bound, or to which such Person
may be subject, or violate any provision of the Organizational Documents of such
Person.

3.05         Consents, Etc.  No consent, approval, authorization or order of any
court or governmental authority or any third party (other than those which have
been obtained prior to the date hereof and of which Borrower has notified Lender
in writing on the date hereof) is required in connection with the execution and
delivery by Borrower or any Guarantor of this Loan Agreement or the other Loan
Documents, or to consummate the transactions contemplated hereby or thereby.

3.06         Pending Litigation.  Other than the Disclosed Litigation, there are
no material proceedings pending, or to Borrower’s knowledge, threatened, against
or affecting Borrower, any Guarantor, or the Property or any portion thereof, in
any case in any court or before any Governmental Authority or arbitration board
or tribunal which involve the possibility of materially and adversely affecting
(a) the assets, business, prospects, profits or condition (financial or
otherwise) of Borrower, any Guarantor, or the ability of any such Person to
perform its respective obligations under the Loan Documents or any
Organizational Document of any such Person, or (b) the Property .  Neither
Borrower, any Guarantor, nor the Property is in default with respect to any
order of any court, Governmental Authority or arbitration board or tribunal.

3.07         Principal Office, Etc.  The chief executive office, principal
office and principal place of business of Borrower is at 15601 Dallas Parkway,
Suite 600, Addison, Texas 75001.  The addresses of Borrower and Guarantors set
forth in Section 9.01 hereof are accurate, true and correct.

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3.08         Control Persons.  Borrower is not, and no Person having “control”
(as that term is defined in 12 U.S.C. §375b or in regulations promulgated
pursuant thereto) of Borrower is, an “executive officer,” “director,” or “person
who directly or indirectly or in concert with one or more persons, owns,
controls, or has the power to vote more than 10% of any class of voting
securities” (as those terms are defined in 12 U.S.C. §375b or in regulations
promulgated pursuant thereto) of Lender, of a holding company of which Lender is
a subsidiary, or of any other subsidiary of a holding company of which Lender is
a subsidiary, of any bank at which Lender maintains a correspondent account, or
of any bank which maintains a correspondent account with any Lender.

3.09         Government Regulation.

(a)           Borrower is not an “investment company” or a company “controlled”
by an “investment company,” within the meaning of the Investment Company Act of
1940.

(b)           Borrower is not a “public-utility company,” or a “holding
company,” or a “subsidiary company” of a “holding company,” or an “affiliate” of
a “holding company” or of a “subsidiary company” of a “holding company,” within
the meaning of the Public Utility Holding Company Act of 1935.

(c)           Borrower is not engaged principally, or as one of its important
activities, in the business of extending, or arranging for the extension of,
credit for the purpose of “purchasing or carrying any margin stock,” within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System.  No portion of the assets of Borrower consists of any such margin stock,
and no part of the proceeds of any Loan will be used to purchase or carry any
such margin stock within the meaning of said regulation or to extend credit to
others for such purpose.

(d)           Neither Borrower, any Guarantor or any Person who owns a
controlling interest in or otherwise controls Borrower or any Guarantor is an
OFAC Prohibited Person. Borrower has implemented appropriate procedures and
policies to ensure compliance with the requirements of the Anti-Terrorism and
Anti-Money Laundering Laws.

3.10         Insider.  Neither Borrower nor any general partner of Borrower is
an “executive officer”, “director”, or “person who directly or indirectly or
acting through or in concert with one or more persons, owns, controls, or has
the power to vote more than ten percent (10%) of any class of voting securities”
(as those terms are defined in 12 U.S.C. § 375b or in regulations promulgated
pursuant thereto) of Lender, of any bank holding company of which Lender is a
subsidiary, or of any subsidiary of a bank holding company of which Lender is a
subsidiary, of any bank at which Lender maintains a correspondent account or
which maintains a correspondent account with any Lender.

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3.11         O.S.H.A.  Each of Borrower, each Guarantor, and the Property, have
(or within thirty (30) days of the Closing Date will have) duly complied with,
and their respective facilities, business assets, property, leaseholds and
equipment are (or within thirty (30) days of the Closing Date will be) in
compliance in all material respects with, the provisions of the Federal
Occupational Safety and Health Act and all rules and regulations thereunder and
all similar state and local laws, rules and regulations, to the extent required
thereby; there are no outstanding citations, notices or orders of non-compliance
issued to Borrower or any Guarantor or relating to their respective businesses,
assets, property, leaseholds or equipment under any such laws, rules or
regulations, or with respect to the Property.

3.12         Financial Condition.  As of the date of execution hereof and the
Closing Date, the present fair salable value of the assets of Borrower and each
Guarantor is greater than the amount required to pay such Person’s total
liabilities, and each is able to pay its debts as they mature.  Borrower has
sufficient capital to carry on its business and transactions as now conducted
and as planned to be conducted in the future.  Neither Borrower nor any
Guarantor is the subject of any bankruptcy, insolvency, reorganization or
receivership proceeding and, to Borrower’s best knowledge, no such proceeding is
threatened or imminent with respect to any such Person.  The Initial Financial
Statements reflect the current financial condition of each Person described
therein and no material adverse change has occurred in the financial condition
of any such Person since the respective dates of the Initial Financial
Statements.

3.13         Restrictions.  Neither of Borrower nor any Guarantor is a party to
any contract or agreement, or subject to any charter or other restriction, which
materially and adversely affects its business.  Neither of Borrower or any
Guarantor has agreed or consented to cause or permit in the future (upon the
happening of a contingency or otherwise) any of its assets, whether now owned or
hereafter acquired, to be subject to any Liens (other than the Permitted
Liens).  Neither Borrower nor any Guarantor and no general partner or limited
partner of Borrower or any Guarantor has agreed or consented to cause or permit
in the future (upon the happening of a contingency or otherwise) all or any
portion of its direct ownership interest in such Person, or any profits or
proceeds therefrom, to be subject to any Liens (other than Permitted Liens).

3.14         No Default.  No Potential Default or Event of Default has occurred
and is continuing under this Loan Agreement or any other Loan Document.

3.15         Labor Relations.  Borrower is not a party to any collective
bargaining agreement.  There are no material grievances, disputes or
controversies with any union or any other organization of Borrower’s employees
with respect to the Property, or threats of strikes, work stoppages or any
asserted pending demands for collective bargaining by any union or organization
with respect to the Property.

3.16         ERISA.  (a) No Reportable Event has occurred and is continuing with
respect to any ERISA Plan; (b) PBGC has not instituted proceedings to terminate
any ERISA Plan; (c) neither Borrower, any Affiliate of Borrower or any General
Partner, nor any duly-appointed administrator of an ERISA Plan (i) has incurred
any liability to PBGC with respect to any ERISA Plan other than for premiums not
yet due or payable or (ii) has instituted or intends to institute proceedings to
terminate any ERISA Plan under Section 4041 or 4041A of ERISA or withdraw

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from any Multi-Employer Pension Plan (as that term is defined in Section 3(37)
of ERISA); and (d) each ERISA Plan of Borrower has been maintained and funded in
all material respects in accordance with its terms and with all provisions of
ERISA applicable thereto.

3.17         Single Purpose Entities; Nature of Borrower.  Borrower is a single
purpose limited partnership whose only business is the operation of the Property
and whose only asset is the Property and other assets directly related to the
operation of the Property.

3.18         Indebtedness.  Borrower has not incurred, created, contracted for,
waived, assumed, guaranteed or is otherwise liable in respect of any
Indebtedness other than the Permitted Indebtedness.  No default or failure of
performance has occurred and is continuing with respect to any Indebtedness of
Borrower

3.19         Taxes.  All tax returns required to be filed by Borrower in any
jurisdiction have been filed and all taxes, assessments, fees, and other
governmental charges upon Borrower or upon any of its properties, income or
franchises have been paid that are required to be paid prior to the time that
the non-payment of such taxes could give rise to a Lien on any asset of
Borrower, unless (i) such tax, assessment, fee or charge is being contested in
good faith by Borrower through appropriate proceedings after the establishment
of appropriate reserves therefor in accordance with GAAP or (ii) such filing,
tax, assessment, fee or charge would not involve the possibility of materially
and adversely affecting the assets, business, prospects, profits and condition
of Borrower or the Property.  There is no proposed tax assessment against
Borrower or, to the knowledge of Borrower, any basis for such assessment which
is not being contested in good faith by Borrower through appropriate proceedings
after the establishment of appropriate reserves therefor in accordance with
GAAP.  The Land is separately assessed from all other adjacent land for purposes
of real estate taxes and, to Borrower’s knowledge, there are no intended public
improvements which may involve any charge, assessment or lien, upon the
Property.

3.20         Property.

(a)           To Borrower’s knowledge, there is no existing or proposed plan to
modify or realign any street or highway or any existing or proposed eminent
domain proceeding that would result in the taking of all or any part of the
Property or that would adversely affect the Property or the use or operation of
the Property; and

(b)           As of the Closing Date, no bills for labor and materials furnished
in connection with construction, renovation or maintenance of the Property
remain unpaid in part or in full.

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3.21         Use of Property.

(a)           To Borrower’s knowledge, the Property and the uses which Borrower
makes of the Property and intends to make thereof as the Residential Condominium
comply with all applicable restrictive covenants and all Governmental
Requirements;

(b)           Borrower has obtained or will obtain all requisite zoning,
utility, building, health, and other necessary permits from each Governmental
Authority having jurisdiction over the Property or any portion thereof and to
Borrower’s knowledge, there is no problem which would jeopardize any license,
permit or approval necessary for the construction or operation of the Property
or any portion thereof.  Borrower owns, or is licensed or otherwise has the
lawful right to use, all applicable patents, trademarks, tradenames, copyrights,
technology, know-how and processes necessary for the conduct of its business as
currently conducted, and the operation of the Property in the manner currently
conducted.  There are no claims, and to the best of Borrower’s knowledge, there
is no infringement of the rights of any Person, arising from the use of such
patents, trademarks, copyrights, technology, know-how and processes by
Borrower.  Borrower has no knowledge of any infringement by any third party on
any rights of Borrower in any of its or any Guarantor’s intellectual property;

(c)           The sanitary water supply, storm and sanitary sewers, water lines,
and other necessary utility facilities (including gas, electric and telephone
facilities) are available to and operational at the Property and sufficient to
meet the current and anticipated needs of the Property, and design and as-built
conditions of the Property are such that no drainage or surface or other water
will drain across or rest upon the Land or the land of others.  All utility
service for the Property has been approved by applicable Governmental
Authorities, to the extent required or obtainable;

(d)           None of the Improvements create an encroachment over, across, or
upon any of the Property boundary lines, rights of way, or easements and no
buildings or other improvements on adjoining land create such an encroachment on
any of the Land;

(e)           The Property has been validly subdivided in accordance with all
Governmental Requirements so that, for all purposes, the Property forms a
separate tax lot, independent of any other property and the Property may be
mortgaged, conveyed or otherwise dealt with as a whole and independently of any
other property.

3.22         Full Disclosure.  There is no fact related specifically to
Borrower, any Guarantor or the Property known to Borrower that Borrower has not
disclosed to Lender which could have a material adverse effect on Borrower, any
Guarantor, or any of the Property.

3.23         Title to the Property.  Borrower is the sole legal and beneficial
owner of the Property and has and will have good and indefeasible title to the
Property, free and clear of any and all Liens, claims, charges, equities,
covenants, conditions, restrictions, easements, rights-of-way and all other
matters affecting such property, whether or not of record, except for the
Permitted Exceptions.  Borrower will preserve its title to the Property, will
forever warrant and

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defend the same to Lender, and will forever warrant and defend the validity and
priority of the Liens of the Loan Documents with respect to the Property against
the claims of all Persons whomsoever.  None of the Land is located within an
area that has been designated or identified as an area having special flood
hazards by the Secretary of Housing and Urban Development or by such other
official shall from time to time be authorized by federal or state law to make
such designation pursuant to the National Flood Insurance Act of 1968, as such
act may be from time to time amended, or pursuant to any other national, state,
county or city program of flood control.

3.24         Leases.  There are no Leases in existence with respect to the
Property or any portion thereof except the Scheduled Lease.  No default, failure
of performance or terminating event has occurred and is continuing under the
Scheduled Lease as of the Closing Date.

3.25         Governmental Requirements.  To Borrower’s knowledge, no violation
of any Governmental Requirement exists with respect to any of the Property, and
the current and anticipated use thereof complies with applicable restrictive
covenants.

3.26         Financing Statements.  There is no financing statement or other
document creating or evidencing a Lien now on file with any Governmental
Authority covering any of the Property, and there is no Lien on any of the
Property, whether such Property shall be real or personal, tangible or
intangible, or whether Borrower is named or signed as “Debtor”, other than the
Liens which are Permitted Exceptions.

3.27         Material Agreements.  The Management Agreement furnished to Lender
by or on behalf of Borrower pursuant to this Loan Agreement is true, correct and
complete.  The Management Agreement and each Material Agreement are in full
force and effect and no terminating event, default or failure of performance has
occurred thereunder.  No party to the Management Agreement or any of the
Material Agreements has challenged or denied the validity or enforceability of
any such agreement.

3.28         Accuracy of Information.  All statements, certificates and
information delivered or to be delivered to Lender by or on behalf of Borrower
or any Partner pursuant to or as required by this Loan Agreement or any other
Loan Document are, or shall be, when delivered, true and correct in all material
respects as of the date given and does not, and do not or shall not, when
delivered, contain any untrue statement of a material fact or omit to state any
material fact necessary to keep the statements contained therein from being
materially misleading.

3.29         Access.  The Land has access to and from completed public streets
and roads adequate for its current use and for its intended use after completion
of the Improvements.

3.30         Commencement of Construction.  As of the date hereof, there are not
bills for work performed or materials delivered to the Land which could give
rise to a mechanic’s or materialman’s lien which have not been paid or will not
be paid in full and there exists no contest or disagreement with respect to any
such bill.

3.31         Authorized Signatories.  Borrower has appointed and invested in
each of the Authorized Signatories full authority to execute and deliver, on
behalf of Borrower, any Request for Disbursement, and any other notice, request
or other document required or permitted

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hereunder to be submitted by Borrower to Lender and Lender is entitled to rely
upon the authority of each Authorized Signatory until and unless Lender shall
receive from Borrower written notice revoking such authority and naming a new
Authorized Signatory.

ARTICLE IV

AFFIRMATIVE COVENANTS OF BORROWER

Until payment in full of the Obligation, Borrower agrees that:

4.01         Financial Statements, Reports and Documents of Borrower and Other
Persons.  Borrower shall deliver or cause to be delivered to Lender each of the
following:

(A)           ANNUAL FINANCIAL STATEMENTS.  AS SOON AS AVAILABLE, AND IN ANY
EVENT WITHIN ONE HUNDRED FIVE (105) DAYS AFTER THE END OF EACH FISCAL YEAR OF
BORROWER AND EACH GUARANTOR, RESPECTIVELY, BEGINNING WITH THE FISCAL YEAR ENDING
DECEMBER 31, 2006, (I) A COPY OF THE ANNUAL REPORT OF BORROWER AND EACH
GUARANTOR FOR SUCH FISCAL YEAR CONTAINING, ON A CONSOLIDATED BASIS, BALANCE
SHEETS AND STATEMENTS OF INCOME, RETAINED EARNINGS, AND CASH FLOW AS AT THE END
OF SUCH FISCAL YEAR AND FOR THE 12-MONTH PERIOD THEN ENDED, IN EACH CASE SETTING
FORTH IN COMPARATIVE FORM THE FIGURES FOR THE PRECEDING FISCAL YEAR, ALL IN
REASONABLE DETAIL AND COMPILED BY INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS OF
RECOGNIZED STANDING REASONABLY ACCEPTABLE TO LENDER, TO THE EFFECT THAT SUCH
REPORT HAS BEEN PREPARED IN ACCORDANCE WITH GAAP AND CONTAINING NO MATERIAL
QUALIFICATIONS OR LIMITATIONS ON SCOPE AND (II) AUDITED FINANCIAL STATEMENTS FOR
BEHRINGER HARVARD SHORT TERM OPPORTUNITY FUND I LP.

(B)           QUARTERLY FINANCIAL STATEMENTS.  AS SOON AS AVAILABLE, AND IN ANY
EVENT WITHIN FORTY-FIVE (45) DAYS AFTER THE END OF EACH QUARTER OF EACH FISCAL
YEAR OF BORROWER AND EACH GUARANTOR, RESPECTIVELY, BEGINNING WITH THE QUARTER
ENDING SEPTEMBER 30, 2006, A COPY OF AN UNAUDITED FINANCIAL REPORT OF BORROWER
AND EACH GUARANTOR AS OF THE END OF SUCH QUARTER AND FOR THE PORTION OF THE
FISCAL YEAR THEN ENDED, CONTAINING BALANCE SHEETS AND STATEMENTS OF INCOME,
RETAINED EARNINGS, AND CASH FLOW, ALL IN REASONABLE DETAIL CERTIFIED BY THE
CHIEF EXECUTIVE OFFICER, PRESIDENT OR CHIEF FINANCIAL OFFICER OF BORROWER AND
EACH GUARANTOR TO HAVE BEEN PREPARED IN ACCORDANCE WITH GAAP AND TO FAIRLY AND
ACCURATELY PRESENT (SUBJECT TO YEAR-END AUDIT ADJUSTMENTS) THE FINANCIAL
CONDITION AND RESULTS OF OPERATIONS OF BORROWER AND EACH GUARANTOR, ON A
CONSOLIDATED AND CONSOLIDATING BASIS, AT THE DATE AND FOR THE PERIODS INDICATED
THEREIN.

(c)           Compliance Certificate.  Concurrently with the delivery of the
financial information and statements required by Sections 4.01(a) and (b)
hereof, a certificate executed by a responsible and authorized officer or
representative of Borrower in the form attached as Exhibit H stating that a
review of the activities of Borrower and the Property during such Quarterly
Period has been made under his or her supervision and that to the best of his or
her knowledge and belief after reasonable and due investigation, (i) Borrower
has observed, performed and fulfilled each and every material obligation and
covenant contained herein and in each of the Loan Documents or, if there is any

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exception to the foregoing, specifying the nature and status thereof, (ii) there
exists no Event of Default as of the date of such certificate or, if any such
event shall have occurred, specifying the nature and status thereof, (iii) no
default, material failure of performance or terminating event has occurred under
the Management Agreement or any other Material Agreement, and no party to any
such agreement has challenged or denied the validity or enforceability of such
agreement or given any notice of default, termination or intent to terminate
thereunder, or specifying the nature and status thereof, (iv) there is no
litigation, mediation or arbitration which is material and is not covered by
insurance pending with respect to Borrower or any of the Property or, if any
such litigation, mediation, or arbitration is pending, specifying the nature and
status thereof and (v) that all information and calculations delivered to Lender
with respect to Sections 4.01(a) and (b) are true and correct in all material
respects.  Concurrently with the delivery of the financial information and
statements required by Section 4.01(b) hereof, a certificate executed by a
responsible and authorized officer or representative of Borrower stating that
Borrower is in full compliance with Section 4.09 hereof.

(d)           Notices by Governmental Authorities.  Promptly upon receipt of the
same, true and complete copies of any official notice, claim or complaint by any
Governmental Authority pertaining to any of the Property and which would have a
material adverse effect upon Borrower, any Guarantor or the ownership, value,
income, revenues or operation of or from the Property.

(e)           Tax Returns.  Within ten (10) days after the first to occur of
(i) the date actually filed, and (ii) the applicable filing deadline (including
any extension(s) thereof), copies of all federal and state tax returns required
to be filed by Borrower and each Guarantor, together with evidence of payment of
any and all taxes shown to be due and owing thereunder.

(f)            Management Agreement.  Contemporaneously with Borrower’s receipt
or giving of same, a copy of any written communication with respect to any
alleged default or default pursuant to or in connection with any approved
management agreement.

(g)           Notification by Borrower.  The following notifications:

(i)            promptly upon the filing of, and any material determination in,
all litigation and all proceedings before any Governmental Authority affecting
Borrower, any Guarantor or any of the Property;

(ii)           promptly upon the occurrence thereof, of any material change in
any fact or circumstance represented or warranted in this Loan Agreement or any
of the other Loan Documents, and of any fact or circumstance which might
materially interfere with the operation of the Property;

(iii)          within five (5) Business Days after the occurrence thereof, of
any payment default, any failure to satisfy any financial covenant, or any other
material default under any note, indenture, loan agreement, mortgage, lease,
deed

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or other similar agreement relating to any Indebtedness of Borrower or any
Guarantor;

(iv)          within five (5) Business Days after the occurrence thereof, if
Borrower or any Guarantor shall incur, create, contract for, waive, assume, have
outstanding, guarantee or otherwise become liable with respect to Indebtedness;

(v)           promptly upon the occurrence thereof, of any name change or change
in Fiscal Year for Borrower or any Guarantor;

(vi)          promptly upon the occurrence thereof, a copy of any amendment to
the Organizational Documents of Borrower;

(vii)         immediately upon Borrower’s learning thereof, of any event or
occurrence which constitutes a Potential Default; and

(viii)        within five (5) Business Days after the date entered into, a copy
of each contract, agreement, arrangement or understanding evidencing a material
Operating Agreement which has a primary term which is greater than one year and
involves payments by Borrower in excess of $50,000 per year.

(h)           Property Rights and Claims.  Promptly upon receipt of same, a copy
of any notice or other instrument received by Borrower which might materially
adversely affect the Property or the Liens securing the Obligation including,
without limitation, any notice from a public authority concerning any tax or
special assessment, or any notice of any alleged violation of any zoning
ordinance, restrictive covenant, fire ordinance, building code provision, or
other Governmental Requirement affecting the Property.

(i)            Other Information.  Such other information concerning the
business, properties, or financial condition of Borrower and any Guarantor as
Lender shall reasonably request.

4.02         Loan Proceeds.  Borrower shall use the proceeds of the Initial
Advance to pay amounts set forth on the Borrower’s Statement prepared by the
Title Company for Closing, approved by Lender, and shall use the balance of the
proceeds of the Loan Amount only for the purposes for which they are advanced in
accordance with this Loan Agreement.

4.03         Assets of Borrower.  The only business of Borrower shall be the
ownership and operation of the Property, and the only asset of Borrower shall be
the Property and other assets directly related to the operation of the Property.

4.04         Leases.  Borrower shall execute no Lease with respect to any
portion of the Property or Residential Condominium without the prior written
consent of Lender.  In the event Lender consents to any Lease upon such Property
(i) Borrower shall not collect any rent for more than one month in advance under
any such Lease, (ii) Borrower shall not pledge, transfer, assign, mortgage,
encumber, or allow to be encumbered any Leases or future payments of the Rents

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except to Lender and (iii) at the request of Lender, Borrower will assign and
transfer to Lender any and all Leases and execute and deliver all such further
assurances and assignments as Lender shall from time to time require.

4.05         Management, Maintenance, Repairs and Alterations.

(a)           The Property shall at all times be managed directly and
exclusively by Borrower and no property management company shall be utilized for
management of the Property unless approved in advance by Lender.

(b)           Once the Improvements are substantially complete, Borrower shall
cause the Property to be operated, maintained and managed at all times in a
first-class manner consistent with the requirements of the Condominium
Declaration.  Borrower shall keep in effect (or cause to be kept in effect) at
all times all permits, licenses and contractual arrangements as may be necessary
to meet the standard of operation described in the foregoing sentence or as may
be required by Governmental Requirements.

(c)           Except as contemplated by the Plans and Approved Budget, Borrower
(i) shall not undertake to construct any Improvements on the Property without
the prior written consent of Lender, (ii) shall not commit or permit any waste
or deterioration of or to the Property, and (iii) following completion of the
Improvements, shall constantly keep and maintain the Property and all amenities
in connection therewith in good and neat order and repair and in compliance with
the requirements of the Condominium Declaration.

(d)           From time to time, as required by Lender and Borrower shall permit
Lender and any Governmental Authority and their respective agents, employees and
representatives, to enter upon the Property for the purpose of inspection
thereof.

(e)           Borrower will act prudently and in accordance with customary
industry standards in managing and operating its assets, properties, business
and investments (including the Property).  Borrower will keep the Property, and
all of its other assets which are reasonably necessary to the conduct of its
business in good working order and condition.

4.06         Inspection of Books and Records.  Borrower shall at all times keep
complete and accurate books, records and accounts of its transactions, in
accordance with GAAP, and permit any representative of Lender, at all reasonable
times upon reasonable notice, to examine and copy the books and records of
Borrower, and all contracts, statements, invoices, bills, and claims for labor,
materials, and services supplied for the construction, reconstruction,
maintenance, operation and repair of the Property.

4.07         Compliance with Governmental Requirements.  Borrower shall timely
comply with all Governmental Requirements affecting the Property and, upon
request by Lender, deliver to Lender evidence thereof to the extent reasonably
available.  Borrower assumes full responsibility for the compliance of the Plans
and the Property with all Governmental

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Requirements, applicable restrictive covenants and sound building and
engineering practices and, notwithstanding any approvals by Lender, Lender shall
not have any obligation or responsibility whatsoever for the Plans or any other
matter incident to the Property or the construction, renovation or maintenance
of any part of the Improvements.

4.08         Insurance and Notice.

(a)           Borrower shall maintain, or cause to be maintained, in full force
and effect, until the Loan and Obligation have been paid in full, insurance as
evidenced by the Insurance Policies, and shall deliver or cause to be delivered
to Lender, (a) contemporaneously with the execution hereof, the Insurance
Policies or certificates evidencing the Insurance Policies and (b) all renewal
Insurance Policies, or certificates thereof, at least fifteen (15) days before
the expiration date of each expiring Insurance Policy.  Each insurance policy
shall contain a provision whereby the insurer agrees that the policy shall  not
be cancelled or modified without providing at least thirty (30) days prior
written notice to the Lender.  The insurers waive any rights to claim any
premiums and commissions against Lender and provide that the Lender is permitted
to make payments to effect continuation of the policies in the event of notice
of cancellation due to non-payment of premiums.  The policies shall provide
that, with respect to the interest of the Lender, the policy will not be
invalidated and shall insure Lender regardless of any act, failure to act,
negligence, or violation of warranties, or conditions in the policy by any named
insured.

(b)           BORROWER IS REQUIRED TO (i) KEEP THE PROPERTY INSURED AGAINST
DAMAGE IN THE AMOUNT THE LENDER SPECIFIES; (ii) PURCHASE THE INSURANCE FROM AN
INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THIS STATE OR AN ELIGIBLE SURPLUS
LINES INSURER; AND (iii) NAME THE LENDER AS THE PERSON TO BE PAID UNDER THE
POLICY IN THE EVENT OF A LOSS.  BORROWER MUST, IF REQUIRED BY THE LENDER,
DELIVER TO THE LENDER A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF
PREMIUMS.  IF BORROWER FAILS TO MEET ANY REQUIREMENT LISTED IN THE PRECEDING TWO
SENTENCES, LENDER MAY OBTAIN COLLATERAL PROTECTION INSURANCE ON BEHALF OF
BORROWER AT BORROWER’S EXPENSE.  This Notice is provided pursuant to the
requirements of Texas Finance Code §307.052.

4.09         Payment of Taxes.  Borrower shall pay and discharge all taxes,
assessments, and governmental charges or levies imposed upon Borrower (whether
imposed by contract or agreement or by Governmental Requirement), or upon
Borrower’s income or profits, or upon any of the Property or upon any other
property belonging to it before delinquent; provided, however, that Borrower
shall not be required to pay any such tax, assessment, charge, or levy if and so
long as the amount, applicability, or validity thereof shall currently be
contested in good faith by appropriate proceedings and appropriate reserves
therefor have been established, unless such contest would violate Section 4.10
hereof.  Borrower shall deliver to Lender evidence of the payment of all such
taxes, assessments and governmental charges and levies by no later than

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thirty (30) days after the payment of any such taxes, assessments and
governmental charges or levies is due.

4.10         Payment of Claims.  Borrower shall promptly pay or cause to be paid
when due all lawful taxes and assessments and all costs and expenses incurred in
connection with the Property, and shall keep the Property free and clear of any
Liens, charges, or claims other than the Liens of the Mortgage and other Liens
securing obligations of Borrower to Lender, and the Permitted Exceptions. 
Notwithstanding anything to the contrary contained in this Loan Agreement,
Borrower (a) may contest the validity or amount of any claim of any contractor,
consultant, architect, or other person providing labor, materials, or services
with respect to the Property, (b) may contest any tax or special assessments
levied by any Governmental Authority, and (c) may contest the enforcement of or
compliance with any Governmental Requirement, and such contest on the part of
Borrower shall not be an Event of Default hereunder if during the pendency of
any such contest, Borrower shall furnish to Lender and Title Company (i) a bond
indemnifying against liens in accordance with applicable law with corporate
surety satisfactory to Lender and Title Company or (ii) other security as
required by a court of competent jurisdiction to remove any such lien as an
encumbrance against the Property, and provided that Borrower shall immediately
pay any amount adjudged by a court of competent jurisdiction to be due, with all
costs, interest, and penalties thereon.

4.11         Costs and Expenses.  Borrower shall pay when due all costs and
expenses required by this Loan Agreement including, without limitation, (a) all
taxes and assessments applicable to the Property, (b) all fees for filing or
recording the Loan Documents, (c) all fees and commissions lawfully due to
brokers, salesmen, and agents in connection with the Loan or the Property and
which are not incurred by Lender, (d) all reasonable fees, disbursements, and
expenses of legal counsel to Lender incurred in connection with the Loan,
(e) all title insurance and title examination charges, including premiums for
the Title Insurance Policy, (f) all survey costs and expenses, including the
cost of the Survey, (g) all premiums for the Insurance Policies, (h) all costs
and expenses of the Environmental Audit, the Engineer’s Audit, the Insurance
Audit, and the Appraisal, and (i) all other reasonable costs and expenses
payable to third parties which are incurred by Lender in connection with the
consummation of the transactions contemplated by this Loan Agreement, whether
incurred prior to or after the date hereof.

Borrower further agrees to pay all out-of-pocket expenses to third parties
incurred by Lender in connection with the preparation of this Loan Agreement and
the other Loan Documents or in connection with any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
thereby contemplated shall be consummated) or incurred by Lender in connection
with the administration or the enforcement or protection of its rights and
obligations (or the rights and obligations of Lender) in connection with this
Loan Agreement and the other Loan Documents or in connection with the Loan made
or any Note issued hereunder including, but not limited to, all reasonable fees,
charges and disbursements of counsel for Lender and all out-of-pocket expenses
incurred by Lender for reasonable visits by Lender’s employees and agents to
inspect the Property.

4.12         Indemnity by Borrower.  Borrower will indemnify, save, defend, and
hold harmless Lender and its respective Affiliates, directors, officers,
shareholders, agents, attorneys,

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and employees (collectively, the “indemnitee”) from and against: (a) any and all
claims, demands, actions, or causes of action that are asserted against any
indemnitee by any Person if the claim, demand, action, or cause of action
relates to a claim, demand, action, or cause of action that the Person asserts
or may assert against Borrower, any Guarantor or any of the Property, (b) any
and all claims, demands, actions or causes of action that are asserted against
any indemnitee if the claim, demand, action or cause of action directly or
indirectly relates to the failure of Borrower, any Guarantor or any other Person
to perform or comply with any of the terms, covenants or provisions of this Loan
Agreement or of any of the other Loan Documents, (c) any and all claims,
demands, actions or causes of action that are asserted against any indemnitee if
the claim, demand, action or cause of action directly or indirectly relates to
any failure of condition or any other breach or default under any Governmental
Requirement applicable to Borrower, any Guarantor or any of the Property,
(d) any administrative or investigative proceeding by any Governmental Authority
directly or indirectly related to a claim, demand, action or cause of action
described in clauses (a), (b) or (c) above, and (e) any and all liabilities,
losses, costs, or expenses (including reasonable attorneys’ fees, expenses and
disbursements) that any indemnitee suffers or incurs as a result of any of the
foregoing; provided, however, that Borrower shall have no obligation under this
Section 4.12 to any indemnitee with respect to any of the foregoing arising out
of the gross negligence or willful misconduct of such indemnitee or any of such
indemnitee’s agents or employees nor shall Borrower have any obligation under
this Section 4.12 to any indemnitee with respect to any negligent act of Lender
in operating or managing the Property after Lender has taken possession
thereof.  If any claim, demand, action or cause of action is asserted against
any indemnitee, such indemnitee shall promptly notify Borrower, but the failure
to do so shall not affect Borrower’s obligations under this Section 4.12 unless
such failure materially prejudices Borrower’s right to participate in the
contest of such claim, demand, action or cause of action, as hereinafter
provided.  If requested by Borrower in writing and so long as no Event of
Default shall have occurred and be continuing, such indemnitee shall in good
faith contest the validity, applicability and the amount of such claim, demand,
action or cause of action and shall permit Borrower to participate in such
contest.  Any indemnitee that proposes to settle or compromise any claim or
proceeding for which Borrower may be liable for payment of indemnity hereunder
shall give Borrower written notice of the terms of such proposed settlement or
compromise reasonably in advance of settling or compromising such claim or
proceeding and shall obtain Borrower’s concurrence thereto.  Each indemnitee is
authorized to employ counsel in enforcing its rights hereunder and in defending
against any claim, demand, action, or cause of action covered by this Section
4.12; provided, however, that each indemnitee shall endeavor, but shall not be
obligated, in connection with any matter covered by this Section 4.12 which also
involves other indemnitees, to use reasonable efforts to avoid unnecessary
duplication of effort by counsel for all indemnitees.

4.13         Further Assurances.  Borrower will make, execute or endorse, and
acknowledge and deliver or file or cause the same to be done, all such vouchers,
invoices, notices, certifications, additional agreements, undertakings,
conveyances, deeds of trust, mortgages, transfers, assignments, financing
statements or other assurances, and take all such other action, as Lender may,
from time to time, deem reasonably necessary or proper in connection with this
Loan Agreement or any of the other Loan Documents, the obligations of Borrower
hereunder or thereunder, or for better assuring and confirming unto Lender all
or any part of the security for any of the Obligation.

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4.14         Construction Contracts.  Borrower shall become party to no
contract, for the performance of any work on the Property or for the supplying
of any labor, materials, or services for the construction of any improvements on
the Property except upon such terms and with such parties as shall be reasonably
approved in advance in writing by Lender.  Contemporaneously with the execution
by Borrower of any construction contract for construction of any of the
Improvements, Borrower shall deliver to Lender a Contractor’s Affidavit and
Subordination executed by the Contractor.  Each Construction Contract shall
provide that all liens of the contractor are subordinate to the Mortgage and
shall require all subcontracts entered into by the contractor to contain a
provision subordinating the subcontractor’s liens to the lien of the Mortgage. 
No change orders requiring an increase in the cost of any labor, materials or
services in connection with the Property in excess of $100,000 per change order,
or in excess of $500,000 in the aggregate of increases required by all change
orders, shall be effective without the prior written approval of Lender. 
Notwithstanding the foregoing, no change order which results in a change in the
Approved Budget which is not permitted by Section 4.16 may be made.  No approval
by Lender of any construction contract or change order shall impose upon Lender
any responsibility for the adequacy, form, or content of such construction
contract or any change orders.

4.15         Plans.  Borrower shall deliver to Lender, for Lender’s review, a
complete set of plans and specifications for the Improvements not later than
thirty (30) days before Borrower desires to commence construction of the
Improvements.  Lender shall employ, at Borrower’s cost and expense, the
Inspecting Architect/Engineer to review and comment upon plans and
specifications submitted by Borrower.  Borrower and Borrower’s Architect shall
resolve any comments or concerns of Lender or the Inspecting
Architect/Engineer.  The plans and specifications approved by Lender shall
constitute the “Plans” for purposes of this Loan Agreement.  Lender shall use
commercially reasonable efforts to ensure that Lender and Lender’s consultants
do not unreasonably delay a response to Borrower as to any plans and
specifications submitted to Lender for review.

4.16         Prosecution of Construction.  The construction of the Improvements
shall be prosecuted with due diligence and continuity, in a good and workmanlike
manner, and in accordance with sound building and engineering practices, all
applicable Governmental Requirements, and the Plans.  From and after the date
hereof, Borrower shall not permit complete cessation of work for a period in
excess of thirty (30) consecutive days without the prior written consent of
Lender (which consent shall not be unreasonably withheld), except for staging of
construction as set forth in a schedule submitted to Lender in connection with
the Plans, delays due to weather, strikes, riots, acts of God, war,
unavailability of labor or materials, governmental laws, regulations or
restrictions.  Borrower shall promptly notify Lender of any such delays;
provided, however, that in no event shall work cease for a period in excess of
one hundred and twenty (120) aggregate days regardless of the cause.  Borrower
shall, in any event, complete construction of all Improvements free and clear of
all liens on or before the Construction Commitment Termination Date.

4.17         Correction of Defects.  Borrower shall correct or cause to be
corrected (i) any material defect in any part of the Improvements, (ii) any
material departure (other than pursuant to change orders provided for by Section
4.14 above) in the construction of any part of the Improvements from the Plans
and Governmental Requirements, or (iii) any encroachment by any part of the
Improvements upon any

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building line, easement, property line, or restricted area, in each case except
as may be consented to by Lender following Borrower’s written notice to Lender
of such issue.

4.18         Storage of Materials.  Borrower shall cause all materials supplied
for, or intended to be utilized in, the construction of any part of the
Improvements, but not affixed to or incorporated into the Improvements or the
Property, to be stored on the Property or at such other location as may be
approved by Lender in writing, with adequate safeguards, to prevent loss, theft,
damage, or commingling with other materials or projects.

4.19         Inspection of the Property.  Borrower shall permit Lender, the
Inspecting Architect/Engineer, any Governmental Authority, and their respective
agents and representatives, to enter upon the Property and any locations where
materials intended to be utilized in the construction of any part of the
Improvements are stored, for the purpose of inspection of the Property,  the
Improvements, and such materials at all reasonable times.

4.20         Notices by Governmental Authority, Fire and Casualty Losses, Etc.
Borrower shall timely comply with and promptly furnish to Lender true and
complete copies of any official notice or claim by any Governmental Authority
pertaining to the Property.  Borrower shall promptly notify Lender of any fire
or other casualty or any notice of taking or eminent domain action or proceeding
affecting the Property .

4.21         Application of Advances and the Loan.  No part of the Loan will be
used for the purpose, whether immediate, incidental or ultimate, of purchasing
or carrying any “margin stock” (as defined by Federal Reserve Board Regulation
U) or extending credit to others for the purpose of purchasing or carrying any
margin stock.

4.22         The Borrower’s Deposit.  If Lender reasonably determines at any
time that the unadvanced portion of the Loan will be insufficient for payment in
full of (i) the costs of labor, materials, and services required for the
construction of the Improvements, (ii) other costs and expenses specified in the
Approved Budget, and (iii) other costs and expenses required to be paid in
connection with the acquisition and financing of the Land and the construction
of the Improvements in accordance with the Plans and any Governmental
Requirements, then Borrower shall, within five (5) days of a written request
from Lender, deliver such funds as Lender may require (the “Borrower’s Deposit”)
to Lender.  Lender shall not be required to pay interest on such Borrower’s
Deposit.  Lender may advance all or a portion of the Borrower’s Deposit prior to
disbursing any additional proceeds of the Loan.  Borrower shall promptly notify
Lender in writing if and when the cost of the construction of the Improvements
exceeds, or appears likely to exceed, the amount of the unadvanced portion of
the Loan and the unadvanced portion of the Borrower’s Deposit.

4.23         Direct Disbursement and Application by Lender.  Lender shall have
the right, but not the obligation, to disburse and directly apply the proceeds
of any Advance to the satisfaction of any of Borrower’s obligations hereunder. 
Any Advance by Lender for such purpose, except from the Borrower’s Deposit,
shall be part of the Loan and shall be secured by the Security Instruments. 
Lender shall notify Borrower in writing of any disbursements made directly by
Lender; provided, however, Lender shall have no liability to Borrower for
failure to deliver such notice.  Borrower hereby authorizes Lender to hold, use,
disburse, and apply the proceeds of the Loan and the Borrower’s Deposit for
payment of the costs of construction of the Improvements, expenses

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incident to the Loan and the Property, and the payment or performance of the
Obligation.  Borrower hereby assigns and pledges the proceeds of the Loan and
the Borrower’s Deposit to Lender for such purposes.  Lender may advance and
incur such expenses as Lender deems necessary for the completion of construction
of the Improvements and to preserve the Property, and any other security for the
Loan, and all such expenses, even though in excess of the amount of the Loan,
shall be secured by the Security Instruments, and payable to Lender upon
demand.  Lender may disburse any portion of any Advance at any time, and from
time to time, to persons other than Borrower for the purposes specified in this
Section 4.11, irrespective of the provisions of Section 2.03 hereof, and the
amount of Advances to which Borrower shall thereafter be entitled shall be
correspondingly reduced.

4.24         Anti-Terrorism Compliance  Borrower shall maintain adequate
procedures and policies to ensure that it is in compliance at all times with the
requirements of Anti-Terrorism and Anti-Money Laundering Laws, including without
limitation, Executive Order 13224, 66 Fed. Reg. 49079 (published September 25,
2001).

4.25         Defense of Title.  Borrower will preserve and defend its title to
the Property, will forever warrant and defend the same to Lender, and will
forever warrant and defend the validity and priority of the Liens of the Loan
Documents with respect to the Property against the claims of all Persons
whomsoever.

4.26         Pre-Sale Contracts.  Borrower shall deliver to Lender a copy of
each Pre-Sale Contract within five (5) Business Days of its execution.

ARTICLE V

NEGATIVE COVENANTS

Until payment in full of the Obligation, Borrower agrees that:

5.01         Name, Fiscal Year and Accounting Method.  Borrower will not change
its Fiscal Year or, except as may be approved by Lender, its method of
accounting or its name.  Lender will not unreasonably withhold its consent to
any name change if, in connection with such name change, Borrower executes such
financing statements and other documents as Lender may reasonably require to
protect and preserve the Liens, rights, benefits, privileges and claims of
Lender under the Loan Documents.

5.02         Consolidation, Merger, Conveyance, Transfer or Lease.  Without the
prior written consent of Lender, which consent may be granted or withheld at
Lender’s sole discretion, Borrower will not consolidate with or merge into any
other Person or convey, transfer or lease its properties or assets substantially
as an entirety to any Person.

5.03         ERISA Compliance.  Neither (a) Borrower, nor (b) any ERISA
Affiliate will take any action of fail to take any action in violation of ERISA.

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5.04         Transactions with Affiliates.  Borrower will not enter into any
transaction with, or pay any construction, service, operation, management or
other fees to itself or any Affiliate of Borrower except with Lender’s consent,
such consent not to be unreasonably withheld (it being agreed that each
transaction disclosed in the prospectus of  Behringer Harvard Short–Term
Opportunity Fund I LP has been approved by Lender); provided, however, that
Borrower may enter into transactions with an Affiliate of Borrower upon terms
not less favorable to Borrower than would be obtainable at the time in
comparable transactions of Borrower in arms-length dealings with Persons other
than such affiliated or related Persons.

5.05         No Conditional Sales Contracts, Etc.  No materials, equipment, or
fixtures shall be supplied, purchased, or installed for the construction or
operation of the Property pursuant to security agreements, conditional sale
contracts, lease agreements, or other arrangements or understandings whereby
title or a security interest is retained by any party or the right is reserved
or accrues to any party to remove or repossess any property, materials,
equipment or fixtures intended to be utilized in the construction, renovation or
operation of the Property.

5.06         Lines of Business.  Borrower will not, directly or indirectly,
engage in any business other than those in which it is presently engaged, or
discontinue any of its existing lines of business or substantially alter its
method of doing business.

5.07         Easements.  Borrower shall not grant any easements or licenses for
utilities, roads or any other purposes over, under or on any of the Property
without the prior written consent of Lender, which consent will not be
unreasonably withheld or delayed by Lender.

5.08         Changes in Zoning.  Borrower will not request or seek to obtain any
change to, or consent to any request for or change in, any Governmental
Requirement, restrictive covenant or other restriction applicable to any of the
Property or any other law, ordinance, rule, regulation, restrictive covenant or
restriction affecting the zoning, development or use of any of the Property, or
any variance or special exception therefrom, without the prior written consent
of Lender, which consent will not be unreasonably withheld or delayed.

5.09         New Construction.  Except with respect to construction of the
Improvements as contemplated in the Plans and Approved Budget, Borrower shall
not undertake to construct any new building or other significant improvement on
the Land without the prior written consent of Lender.

5.10         Limitation on Indebtedness and Liens.  Borrower shall not incur,
create, contract for, waive, assume, have outstanding, guarantee or otherwise
become liable with respect to Indebtedness other than Permitted Indebtedness, or
grant or suffer to exist any Liens other than Permitted Liens.

5.11         Distributions, Dividends and Repayments.  Borrower shall not make
or allow to be made any Distributions or Dividends at any time if any Event of
Default has occurred and is continuing.

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5.12         Limitation on Investments.  Borrower shall not, without the prior
written consent of Lender, directly or indirectly, make, retain or have
outstanding any investments (whether through purchase of stock or obligations or
otherwise) in, or loans or advances to, any other Person or acquire all of any
substantial part of the assets or business of any other Person, or be or become
liable as endorser, guarantor, surety or otherwise for any debt, obligation or
undertaking of any other Person or otherwise agree to provide funds for payment
of the obligations of another, or supply funds thereto or invest therein or
otherwise assure a creditor of another against loss or apply for or become
liable to the issuer of a letter of credit or subordinate any claim or demand it
may have to the claim or demand of any other Person; provided, however, that the
foregoing provisions shall not apply to nor operate to prevent.

(a)           investments in direct obligations of the United States of America
or of any agency or instrumentality thereof whose obligations constitute full
faith and credit obligations of the United States of America provided that any
such obligations shall mature within one year from the date the same are
acquired by Borrower;

(b)           investments in commercial paper rated P-1 by Moody’s Investors
Services, Inc., or A-1 by Standard & Poor’s Corporation maturing within  one
year of the date of issuance thereof;

(c)           investments in certificates of deposit issued by any United States
or OECD commercial bank with a branch in the U.S. and in all cases having
capital and surplus of not less than $50,000,000; and

(d)           endorsements for collection or deposit of commercial paper
received in the ordinary course of business.

5.13         Organizational Documents.  Borrower shall not amend its
Organizational Documents without the prior written consent of Lender, which
consent will not be unreasonably withheld or delayed with respect to any
amendment necessary in connection with a Permitted Transfer.

5.14         Material Agreements.  Without Lender’s prior written consent, which
consent will not be unreasonably held, Borrower shall not amend, restate or
supplement, or allow the amendment, restatement or supplement of, or allow any
default or failure of performance to occur under, any Material Agreement. 
Without the prior written consent of Lender, Borrower shall not allow the
termination or rescission of any Material Agreement.

5.15         Anti-Terrorism Compliance.  Borrower shall not permit any Person
who is an OFAC Prohibited Person to own any direct or indirect interest in
Borrower or any Guarantor.

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ARTICLE VI

CONDITIONS OF LENDING

The effectiveness of this Loan Agreement and the obligation of Lender to make
the Loan are subject to the conditions precedent that Lender shall have
received, each dated as of the date hereof, unless otherwise expressly stated,
all of the following, in form and substance acceptable to Lender:

6.01         Loan Documents.  Fully executed and, where appropriate,
acknowledged counterparts of this Loan Agreement, the Note, the Mortgage, the
Assignments of Leases and Rents, the Environmental Indemnity Agreement, the
Guaranties and the Financing Statements.

6.02         Governmental Approvals.  Zoning letters, an engineer’s report or
other evidence, in form reasonably satisfactory to Lender, that the Property
complies with applicable zoning requirements and that the Improvements, after
completion of construction, will comply with the Americans with Disabilities Act
of 1990, Pub. L. No. 89-670, 104 Stat. 327 (1990), as amended, and all
regulations promulgated pursuant thereto to the extent compliance is required
thereby.

6.03         Appraisal.  An Appraisal of the Property dated not earlier than
June 28, 2006, confirming that the aggregate value of the Property, after
completion of the Improvements, will be equal to or will exceed Forty-Two
Million Two Hundred Thousand Dollars ($42,200,000.00).

6.04         Insurance.  Insurance Policies covering the Property, including
without limitation, prior to commencement of construction, builder’s risk
insurance.

6.05         Survey.  A Survey of the Land dated within six (6) months of the
Closing Date or such more recent date as is required by the Title Insurance
Company to issue to Lender the Title Policy in the form required.

6.06         Title Insurance.  A Title Insurance Commitment, whereby the Title
Insurance Company unconditionally commits to issue the Title Insurance Policy.

6.07         UCC Searches.  The UCC Searches.

6.08         Financial Information.  The Initial Financial Statements.

6.09         Soils Report .  The Soils Report.

6.10                         Inspecting Architect/Engineer Audit.  The
Inspecting Architect/Engineer Audit.

6.11         Environmental Audit.  The Environmental Audit.

6.12         [Reserved]

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6.13         Organizational Documents.  True and complete copies of the
Organizational Documents of Borrower, each partner of Borrower, and Guarantors.

6.14         Tax Information.  The Tax Information.

6.15         Opinions of Counsel.  The Legal Opinions.

6.16         Account. The Account shall have been established with Texans Credit
Union.

6.17         The Fees.  The Origination Fee required by Section 2.05 hereof.

6.18         Partnership Consent.  A consent of Borrower to the incurrence by
Borrower of the Loan, in form and substance reasonably acceptable to Lender.  A
consent of the members of each Guarantor to the execution and delivery of their
respective Guaranty and the Environmental Indemnity.

6.19         Additional Information.  Such other information and documents as
may reasonably be required by Lender and its counsel.

ARTICLE VII

EVENTS OF DEFAULT

An “Event of Default” (herein so called) shall exist if any one or more of the
following events shall occur:

(a)           The failure of payment when due of (i) the principal of or
accrued, unpaid interest on the Note upon maturity, whether upon the Maturity
Date or earlier following acceleration, (ii) any regularly scheduled installment
of interest on the Note on or before ten (10) days after the due date, or (iii)
any other part of the Obligation on or before ten (10) days after written notice
from Lender;

(b)           The failure of any Person other than Lender to punctually and
properly perform any covenant, agreement, obligation, or condition contained
herein or in any other Loan Document and (except for any negative covenant
contained in Article IV, for which no notice or grace period shall apply) the
continuance of such failure for a period of thirty (30) days following the
earlier of Borrower’s actual knowledge thereof or written notice thereof from
Lender, or such longer period of time (but in no event longer than sixty (60)
days from the date of such failure) as may be necessary to cure such failure
provided that such Person is diligently working to cure or remedy such failure;
or

(c)           Any statement, representation, or warranty in this Loan Agreement
or any other Loan Document by any Person other than Lender was false,
misleading, or erroneous in any material respect as of the date made; or

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(d)           Borrower or any Guarantor shall (i) execute a general assignment
for the benefit of its creditors, or (ii) become the subject, voluntarily or
involuntarily, of any bankruptcy, insolvency or reorganization proceeding;
provided, however, it shall not be an Event of Default if Borrower or a
Guarantor becomes the subject of an involuntary bankruptcy, insolvency or
reorganization proceeding so long as such person promptly objects to such
proceeding and seeks a dismissal thereof and the proceeding is dismissed within
sixty (60) days following its filing, or (iii) admit in writing that it is
unable to pay its debts generally as they become due, or (iv) apply for or
consent to the appointment of a custodian, receiver, trustee, or liquidator of
itself or of all or a substantial part of its assets, or (v) file a voluntary
petition seeking protection under any Debtor Relief Laws, or other insolvency
law now or hereafter existing, or (vi) file an answer admitting the material
allegations of, or consenting to, or default in filing an answer to, a petition
filed against it in any bankruptcy, reorganization, or other insolvency
proceedings, or (vii) institute or voluntarily be or become a party to any other
judicial proceedings intended to effect a discharge of the debts of such person,
in whole or in part, or a postponement of the maturity and the collection
thereof, or a suspension of any of the rights or powers of Lender granted in the
Note, the Mortgage, this Loan Agreement, any Guaranty or the other Loan
Documents; or

(e)           An order, judgment, or decree shall be entered by any court of
competent jurisdiction appointing a custodian, receiver, trustee, or liquidator
of Borrower or any Guarantor or of all or any substantial part of such Person’s
assets; or

(f)            The failure of Borrower or any Guarantor to pay (or bond to the
satisfaction of Lender) any money judgment against such person in excess of
$10,000.00, or with respect to each and every money judgment against Borrower or
any Guarantor, $50,000.00 in the aggregate as to each such person, at least ten
(10) Business Days prior to the date on which its assets may be sold to satisfy
such judgment; or

(g)           The failure to have discharged within a period of ten (10)
Business Days after the commencement thereof any attachment, sequestration, or
similar proceedings against any of the assets of Borrower or any Guarantor; or

(h)           The liquidation, dissolution or termination of  Borrower or any
Guarantor; or

(i)            Any of the Loan Documents shall for any reason cease to be in
full force and effect, or be declared null and void or unenforceable in whole or
in material part; or the validity or enforceability (but excluding reasonable
issues of interpretation) of any Loan Document shall be challenged or denied by
any party thereto; or

(j)            Condemnation of all or any part of the Property which, in
Lender’s good faith judgment, (i) results or will result in the Property or any
portion thereof failing to comply in any material respect with any Governmental
Requirement or any restriction affecting the Property or (ii) will, in Lender’s
reasonable judgment, materially and

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adversely affect the operation or use of the Property, including without
limitation, access, parking, security or material amenities; or

(k)           Without the prior written consent of Lender, which consent may be
withheld in Lender’s sole and absolute discretion, there shall be any transfer,
sale, Lease, trade, conveyance, exchange, mortgage, encumbrance, pledge,
assignment or other disposition of (i) the Property (except for Leases permitted
hereunder and Permitted Personal Property Transactions), (ii) any ownership
interest in Borrower except for a Permitted Transfer, (iii) the right to receive
distributions, dividends or profits from Borrower, or (iv) any portion of, or
any interest in, any of the property, rights and interests described in the
foregoing subsections (i), (ii), or (iii); or

(l)            The Liens created (or purported to be created) by the Mortgage or
any other Loan Documents should become unenforceable, or cease to be first
priority Liens; or

(m)          Any default or failure of performance occurs under any Permitted
Indebtedness (except the Obligation) involving an aggregate amount in excess of
$100,000 and is not cured to the satisfaction of the holder of such Indebtedness
within the applicable cure period, if any, expressly granted in the documents
evidencing such Indebtedness; or

(n)           An inability of Borrower to satisfy any conditions specified in
this Loan Agreement as precedent to the obligation of Lender to make an Advance
within thirty (30) days after written notice from Lender that Borrower has
failed to satisfy the conditions to an Advance requested pursuant to a Request
for Disbursement; or

(o)           A failure of any of the materials supplied for the construction of
the Improvements to comply in any material respect with the Plans or any
Government Requirements and such non-compliance is not corrected by (i) if such
failure is reasonably susceptible of cure within thirty (30) days, within thirty
(30) days of written notice from Lender, or (ii) if such failure is not
reasonably susceptible of cure within thirty (30) days, the first to occur of
(A) within one hundred twenty (120) days following written notice from Lender,
so long as Borrower commences the cure within the first thirty (30) days and
diligently prosecutes such cure to completion, (B) the applicable deadline
imposed by any Governmental Authority or Governmental Requirement, or (C) the
Construction Commitment Termination Date; or

(p)           The Improvements are not complete (other than non-material punch
list items) as contemplated in the Plans and the Approved Budget within thirty
(30) days beyond the Construction Commitment Termination Date; or

(q)           The proceeds of the Loan, or any part thereof, are being, or shall
at any time have been, diverted to a purpose other than the purpose for which
advanced.

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ARTICLE VIII

RIGHTS AND REMEDIES OF LENDER

8.01         Rights of Lender.  At any time upon the occurrence and during the
continuance of any Event of Default, Lender shall have the right, in addition to
any other right or remedy of Lender, but not the obligation, in its own name or
in the name of Borrower, to enter into possession of all or any portion of the
Property; to perform all work necessary to complete the construction,
reconstruction, maintenance or renovation of or to operate the Property; and to
employ watchmen and other safeguards to protect such Property.  Borrower hereby
appoints Lender as the attorney-in-fact of Borrower, with full power of
substitution, and in the name of Borrower, if Lender elects to do so, at any
time upon the occurrence and during the continuance of any Event of Default to
use such sums as are necessary to make such alterations, repairs and renovations
to the Property and employ such architects, engineers, and contractors as may be
required for the purpose of completing any construction, reconstruction,
maintenance or renovation on the Property or any portion thereof substantially
in accordance with Governmental Requirements, applicable restrictive covenants
and the Management Agreement, or to operate the Property or any portion thereof,
(b) execute all applications and certificates in the name of Borrower which may
be required for completion of construction, maintenance or renovation of or for
the operation of any of the Improvements, or for the benefit of the Property,
(c) endorse the name of Borrower on any checks or drafts representing proceeds
of the Insurance Policies, or other checks or instruments payable to Borrower
with respect to the Property, (d) do every act with respect to the construction,
repair, maintenance and operation of any of the Property or any portion thereof
which Borrower may do, and (e) prosecute or defend any action or proceeding
incident to the Property.  The power-of-attorney granted hereby is a power
coupled with an interest and is irrevocable.  Lender shall have no obligation to
undertake any of the foregoing actions, and if Lender should do so, it shall
have no liability to Borrower for the sufficiency or adequacy of any such
actions taken by Lender.

Notwithstanding the foregoing, it is expressly understood that Lender assumes no
liability or responsibility for the performance of any duties of Borrower
hereunder or under any of the Loan Documents, applicable Governmental
Requirements or restrictive covenants, or the Management Agreement, or other
control over the management and affairs of Borrower, nor by any such action
shall Lender be deemed to create a partnership with Borrower.

8.02         Acceleration.  At any time upon the occurrence and during the
continuance of any Event of Default, Lender may, at its option, declare the Loan
and the remaining Obligation to be immediately due and payable without
presentment, demand, protest, notice of protest and non-payment, or other notice
of default, notice of acceleration and intention to accelerate or other notice
of any kind, all of which are expressly waived by Borrower; provided, however,
that if any Event of Default specified in Article VII(e) hereof shall occur, the
principal of and all interest on the Loan shall thereupon become due and payable
concurrently therewith, without any further action by Lender and without
presentment, demand, protest, notice of protest and non-payment, or other notice
of default, notice of acceleration and intention to accelerate or other notice
of any kind, all of which are expressly waived by Borrower.

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8.03         Funds of Lender.  Any funds of Lender used for any purpose referred
to in this Article VIII shall constitute a portion of the Obligation, shall bear
interest from the date advanced at the Default Rate, shall be secured by all
collateral as security for the Loan and shall be due and payable immediately
upon demand.

8.04         Intentionally Deleted.

8.05         Payments to Affiliates.  Borrower shall not pay or allow to be paid
any amount to Borrower, Guarantor or any Affiliate of any such Person upon the
occurrence and during the continuance of an Event of Default.

8.06         Management Agreement  If Borrower has entered into a management
agreement with respect to management of the Property (which Borrower is not
permitted to do without Lender’s prior written consent and approval of the
manager) then upon the occurrence of any Event of Default, at any time prior to
the completion of the Improvements, Lender may, at its option, require that the
management agreement be terminated.  Upon a foreclosure or deed in lieu of
foreclosure with respect to all or any portion of the Property, each Purchaser
(and Lender, if Lender is a Purchaser) shall have the right to terminate the
management agreement at its discretion.

8.07         Other Rights and Remedies. Unless such document expressly allows
Lender to act prior to the occurrence of an Event of Default, and with or
without accelerating the maturity of the Loan, Lender may proceed to take and
enforce any of its rights, interests, benefits or privileges under the Loan
Documents or which may be otherwise available to Lender, at law or in equity.

8.08         No Waiver or Exhaustion.  No waiver by Lender of any of its rights
or remedies hereunder, in the other Loan Documents, or otherwise, shall be
considered a waiver of any other or subsequent right or remedy of Lender; no
delay or omission in the exercise or enforcement by Lender of any rights or
remedies shall ever be construed as a waiver of any right or remedy of Lender;
and, no exercise or enforcement of any such rights or remedies shall ever be
held to exhaust any right or remedy of Lender.

8.09         Right of Offset.  Borrower hereby grants to Lender a right of
offset, to secure the repayment of the Obligation, upon any and all monies,
securities or other property of Borrower, and the proceeds therefrom, now or
hereafter held or received by or in transit to Lender, from or for the account
of Borrower, whether for safekeeping, custody, pledge, transmission, collection
or otherwise, and also upon any and all deposits (general or special) and
credits of Borrower, and any and all claims of Borrower against Lender at any
time existing.  At any time upon the occurrence and during the continuance of
any Event of Default, Lender is hereby authorized at any time and from time to
time, without notice to Borrower, to offset, appropriate, apply and enforce said
liens against any and all items hereinabove referred to against the Loan and the
remaining Obligation.  Borrower waives any right of Borrower to require or
request that Lender look to any of the Property or Collateral for repayment of
the Obligation prior to exercising its right of offset and waives any obligation
of Lender to do so.

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8.10         Application of Insurance Proceeds..

(a)           Borrower shall give prompt notice to Lender of any damage,
destruction or casualty to the Property or any part thereof, whether or not
covered by insurance.

(b)           Lender may collect the proceeds of any and all insurance required
to be carried under this Loan Agreement that may become payable with respect to
the Property or any portion thereof (and Borrower hereby authorizes and directs
each insurance company to make payment of such proceeds directly to Lender at
Lender’s request) and, at Lender’s sole option, may apply the same to the
Obligation in the order and manner as Lender may determine, or use all such
casualty proceeds to allow Borrower to restore or rebuild the Property so
damaged to a condition reasonably satisfactory to Lender provided that all of
the following conditions are satisfied: (i) Lender determines in good faith that
it is economically, financially and practically feasible to repair and restore
the Property to its previous condition, with such repairs and restorations being
completed prior to the Maturity Date; (ii) the total cost of repairing and
restoring the Property to its previous condition, as estimated by an architect
approved by Lender, shall not be greater than the amount of such casualty
insurance proceeds together with any sums that Borrower deposits with Lender in
advance for the purpose of paying for the cost of such repairs and restoration;
(iii) such restoration and repair shall be accomplished in accordance with the
requirements and conditions of Section 8.10(c) hereof; and (iv) no Event of
Default has occurred and is continuing.  Notwithstanding the foregoing, upon the
request of Borrower, Lender shall make such insurance proceeds available to
Borrower to restore or rebuild the Property if the insurance proceeds payable
with respect to any damage, destruction or casualty do not exceed One Million
Dollars ($1,000,000.00); provided, that the conditions set forth in subsections
(i), (ii), (iii) and (iv) above have been satisfied.  To the extent Lender makes
such proceeds available to restore or rebuild, the Improvements shall be
repaired and restored so as to be of at least equal value in substantially the
same character as prior to such damage or destruction on or before the Maturity
Date.  If such casualty proceeds are made available by Lender to Borrower, any
surplus which may remain out of said insurance proceeds after payment of all
costs and expenses of such repair and restoration shall, at the option of
Lender, be applied as a payment or prepayment of the Obligation.

(c)           Any restoration or repair shall be commenced with due diligence
and in good faith by Borrower and all funds held by Lender in accordance with
the terms of this Section 8.10 shall be paid out from time to time as such
restoration and repair progresses upon the written approval of Lender and the
written request of Borrower, which requests shall be submitted in form and
substance, and with supporting notices, documentation and waivers as may be
required by Lender.

(d)           Prior to application or disbursal of any casualty insurance
proceeds under this Section 8.10, Lender may deduct therefrom any expenses
incurred in connection with the collection or handling of such proceeds, it
being understood and agreed that Lender shall not be, under any circumstances,
liable or responsible for failure to collect, or

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exercise diligence in the collection of, any such proceeds, and Lender shall
provide Borrower a written summary of all expenses deducted from such proceeds.

(e)           In the event the Mortgage is foreclosed, or title to any of the
Property is transferred in extinguishment, in whole or in part, of the
indebtedness secured thereby, or by transfer or conveyance in lieu of
foreclosure, and in connection therewith all right, title, and interest of
Borrower in and to all Insurance Policies passes to (i.e., is purchased by) such
transferee or purchaser, the Insurance Policies shall inure to the benefit of
and pass to such successor in interest of Borrower or the Purchaser.

(f)            Notwithstanding anything set forth in this Section 8.10 to the
contrary, if the casualty proceeds exceed the Obligation then outstanding,
Borrower may use such proceeds to first repay the Obligation in full, and upon
receipt of funds sufficient to repay the Obligation in full, Lender shall
release the balance of the casualty proceeds to Borrower.

8.11         Application of Condemnation Proceeds.

(a)           Lender shall be entitled to receive any and all sums which may be
awarded or become payable to Borrower for the condemnation of any of the
Property for public or quasi-public use, or by virtue of private sale in lieu
thereof, and any sums which may be awarded or become payable to Borrower for
damages caused by public works or construction on or near the Property
(collectively, “Condemnation Proceeds”).  All such Condemnation Proceeds are
hereby assigned to Lender, and Borrower shall, upon request of Lender, make,
execute, acknowledge and deliver any and all additional assignments and
documents as may be necessary from time to time to enable Lender to collect and
receipt for any such Condemnation Proceeds.  Lender shall not, under any
circumstances, be liable or responsible for failure to collect, or exercise
diligence in the collection of, any such Condemnation Proceeds.

(b)           Lender shall, upon Borrower’s written request and so long as no
Event of Default has occurred, make all Minor Condemnation Proceeds available to
Borrower to allow Borrower to repair, renovate or reconstruct the Property to a
condition reasonably satisfactory to Lender, provided that all of the following
conditions are satisfied:

(i)            Lender determines in good faith that following the contemplated
repairs, renovation or reconstruction, the Property shall not fail to comply
with the Management Agreement or any Governmental Requirement or other
restriction affecting the Property, and any changes in the Property resulting
therefrom will not materially adversely affect the operation or use of the
Property (including, without limitation, access, parking, food and beverage
service, security or amenities);

(ii)           Lender determines in good faith that it is economically,
financially and practically feasible to repair, renovate or reconstruct the
Property to a condition substantially equivalent to the condition of the
Property prior to such condemnation, with such repairs, renovation or
reconstruction being completed prior to the Maturity Date;

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(iii)          The total cost of repairing, renovating or reconstructing the
Property to a condition substantially equivalent to the condition of the
Property prior to such condemnation, as approved by Lender, and in accordance
with the requirements of subsections (c)(i) and (ii) herein, as estimated by an
architect approved by Lender, shall not be greater than the amount of the
Condemnation Proceeds, together with any sums that Borrower deposits with Lender
in advance for the purpose of paying for the cost of such repairs, renovation or
reconstruction;

(iv)          Such renovation, repairs or reconstruction shall be accomplished
in accordance with the requirements and conditions of Section 8.11(d) hereof;
and

(v)           Lender in good faith believes that prior to completion of such
repair, renovation or reconstruction, sufficient income and revenues will be
available from the Property to pay Total Debt Service and Expenses during the
period of such repair, renovation and reconstruction.

To the extent Lender makes Condemnation Proceeds available to renovate, repair
or reconstruct, the Improvements shall be renovated, repaired or reconstructed
so as to be of at least equal quality as the quality of the Property prior to
such condemnation on or before the Maturity Date.  If such Condemnation Proceeds
are made available by Lender to Borrower, any surplus which may remain out of
such Condemnation Proceeds after payment of all costs and expenses of such
repair, renovation or reconstruction, shall, at the option of Lender, be applied
as a payment or prepayment of the Obligation.

(c)           Any repairs, renovation or reconstruction, shall be commenced with
due diligence and in good faith by Borrower and all funds held by Lender in
accordance with the terms of this Section 8.11 shall be paid out from time to
time as such repair, renovation, reconstruction or satisfaction progresses upon
the written approval of Lender and the written request of Borrower, which
request shall be submitted in form and substance, and with supporting notices,
documentation and waivers as may be required by Lender.

(d)           If (i) the conditions to Lender’s obligation to make the
Condemnation Proceeds available to Borrower as set forth in Section 8.11(c)
hereof are not satisfied, (ii) an Event of Default has occurred, (iii) the
Condemnation Proceeds are not Minor Condemnation Proceeds, or (iv) Borrower does
not request that Lender make such Minor Condemnation Proceeds available to
Borrower to repair, renovate or reconstruct the Property, Lender may apply the
Condemnation Proceeds to the Obligation in the order and manner as Lender may
determine, or as otherwise provided in this Loan Agreement.

(e)           Prior to application or disbursal of any Condemnation Proceeds
under this Section 8.11, Lender may deduct therefrom any expenses incurred in
connection with the collection or handling of such Condemnation Proceeds, it
being understood and agreed that Lender shall not be, under any circumstances,
liable or responsible for failure to collect, or exercise diligence in the
collection of, any such Condemnation Proceeds.

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8.12         Third Party Payments  Whenever this Loan Agreement or any other
Loan Document requires that amounts payable by a third party be paid directly to
Lender, Lender may enforce such right with a preliminary injunction or temporary
restraining order.  Borrower agrees that irreparable harm may result if such
payments are not made directly to Lender.  Borrower agrees not to oppose a
motion for such injunction or restraining order.

8.13         Protective Advances.  If  Borrower has failed to keep or perform
any covenant whatsoever contained in any Loan Document, Lender may, but shall
not be obligated to any person to, perform or attempt to perform said covenant,
and any payment made or expense incurred in the performance or attempted
performance of any such covenant shall be a part of the Obligation, and Borrower
promises, upon demand, to pay to Lender all sums so advanced or paid by Lender,
with interest at the Default Rate from the date when paid or incurred by
Lender.  No such payment by Lender shall constitute a waiver of any Event of
Default.  In addition to the Liens of the Loan Documents, Lender shall be
subrogated to all rights, titles, liens, and security interests securing the
payment of any debt, claim, tax, or assessment for the payment of which Lender
may make an advance, or which Lender may pay.

8.14         Tax and Insurance Escrow.  At the request of Lender after the
occurrence of any Event of Default, Borrower shall create a  reserve for the
payment of all insurance premiums, taxes and assessments against the Property by
paying to Lender, on each Payment Date, a sum equal to the premiums that will
next become due and payable on the hazard Insurance Policies covering the
Property, or any part thereof, plus taxes and assessments next due on the
Property, or any part thereof, as estimated by Lender, less all sums paid
previously to Lender therefor, divided by the number of installments of
principal and/or interest to elapse before one month prior to the date when such
premiums, taxes and assessments will become delinquent, such sums to be held by
Lender for the purposes of paying such premiums, taxes and assessments.  Upon
notice from Lender to Borrower, any excess reserve may, at the discretion of
Lender, be credited by Lender on subsequent payments to be made on the
Obligation by Borrower, and any deficiency shall be paid by Borrower to Lender
on or before the date when such premiums, taxes and assessments shall have
become delinquent.  Transfer of legal title to the Property shall automatically
transfer title to any sums deposited under the provisions of this Section 8.15.

8.15         Waiver of Offset Right Deficiency Statute.  To the extent such
statute is ever determined applicable by a court of competent jurisdiction in
spite of the location of the Property in the State of Colorado, Borrower hereby
knowingly and intentionally waives, on its own behalf and on behalf of each
Guarantor, the right of offset granted by Sections 51.003, 51.004 and 51.005 of
the Texas Property Code.

ARTICLE IX

MISCELLANEOUS

9.01         Notices.  Any notice, demand, request, consent, approval or other
communication, which any party hereto may be required or may desire to give
hereunder, shall be in writing (except where telephonic instructions or notices
are expressly authorized herein to be given) and

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shall be deemed to be effective (a) if by hand delivery, telex, telecopy or
other facsimile transmission, on the day and at the time on which delivered to
such party at the address or telecopier numbers specified below; (b) if by mail,
on the second Business Day following the day upon which it is deposited, postage
prepaid, in the United States, registered or certified mail, return receipt
requested, (and first class mail) addressed to such party at the address
specified below; or (c) if by Federal Express or other reputable express mail
service, on the next Business Day following the delivery to such express mail
service, addressed to such party at the address set forth below:

If to Lender:

Texans Commercial Capital, LLC

 

777 East Campbell Road, Suite 650

 

Richardson, Texas 75081

 

Telephone:       972-348-2098

 

Telecopier:       972-348-2045

 

Attention:         Linda Robertson

 

 

with copy to:

Haynes and Boone, LLP

 

901 Main Street, Suite 3100

 

Dallas, Texas 75202

 

Telephone:       214-651-5515

 

Telecopier:       214-200-0516

 

Attention:         Brad Lowry, Esq.

 

 

If to Borrower:

Behringer Harvard Mountain Village, LLC

 

15601 Dallas Parkway, Suite 600

 

Addison, Texas 75001

 

Telephone:       214-655-1600

 

Telecopier:       214-655-1610

 

Attention:         Gerald J. Reihsen, III

 

 

with copy to:

Powell & Coleman, L.L.P.

 

8080 North Central Expressway, Suite 1380

 

Dallas, Texas 75206

 

Telephone:       214-890-7108

 

Telecopier:       214-373-8768

 

Attention:         Patrick M. Arnold, Esq.

 

Failure to deliver copies of notices to parties other than Borrower and Lender
shall not affect the effectiveness or validity of notices otherwise properly
given.  Any party may change its address for purposes of this Loan Agreement by
giving ten (10) days written notice of such change to the other parties pursuant
to this Section 9.01.

Notwithstanding any provision contained herein or in any of the Loan Documents
to the contrary, in the event that Lender shall fail to give any notice to any
Person required hereunder or thereunder, the sole and exclusive remedy for such
failure shall be to seek appropriate equitable

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relief to enforce this Loan Agreement and the other Loan Documents to give such
notice and to have any action of such Person postponed or revoked and any
proceedings in connection therewith delayed or terminated pending the giving of
such notice by Lender, and no Person shall have any right to damages (whether
actual or consequential) or any other type of relief not herein specifically set
out against Lender, all of which damages or other relief are expressly waived. 
The foregoing is not intended and shall not be deemed under any circumstances to
require Lender to give notice of any type or nature to any Person except as
expressly required hereby or thereby, or by applicable Governmental
Requirements.

9.02         Modifications.  No provision of this Loan Agreement or of the other
Loan Documents may be modified, waived, or terminated except by an instrument in
writing executed by Borrower and Lender.

9.03         Form and Substance.  All documents, certificates, Insurance
Policies, and other items required pursuant to the provisions of this Loan
Agreement or any other Loan Document to be executed and/or delivered to Lender
shall be in form and substance satisfactory to Lender.

9.04         No Third Party Beneficiary.  This Loan Agreement is for the sole
benefit of Lender and Borrower, and is not for the benefit of any third party.

9.05         Availability of Records; Confidentiality.  Borrower acknowledges
and agrees that Lender may provide to any Participant or proposed Assignee or 
Participant, originals or copies of this Loan Agreement, all Loan Documents and
all other documents, certificates, opinions, letters of credit, reports,
acquisitions and other material and information of every nature or description,
and may communicate all oral information, at any time submitted by or on behalf
of Borrower or received by Lender in connection with the Loan or the Property.

9.06         Number and Gender.  Whenever used herein, the singular number shall
include the plural and the singular, and the use of any gender shall be
applicable to all genders.

9.07         Captions.  The captions, headings, and arrangements used in this
Loan Agreement are for convenience only and do not in any way affect, limit,
amplify, or modify the terms and provisions hereof.

9.08         Survival of Agreement.  All covenants, agreements, representations
and warranties made by Borrower or any other Person herein or in the other Loan
Documents shall be considered to have been relied upon by Lender and shall
survive the making by Lender of the Loan and the execution and delivery to
Lender of the Note evidencing the Loan, regardless of any investigation made by
Lender or on its behalf, and shall continue in full force and effect as long as
all or any portion of the Obligation is outstanding.

9.09         Parties Bound; Assignment.

(a)           The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns, except that the Borrower

54

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may not assign or otherwise transfer any of its rights under this Agreement
without the prior written consent of Lender.

(b)           Lender may at any time grant to one or more financial institutions
or other entities (each a “Participant”) a participating interest in the Loan. 
In the event of any such grant by Lender of a participating interest to a
Participant, Lender shall remain responsible for the performance of its
obligations hereunder, and Borrower shall continue to deal solely and directly
with Lender in connection with Lender’s rights and obligations under this
Agreement.  Borrower shall not be responsible for the payment of any taxes
associated with the grant of a participating interest in the Loan to any
Participant as a result of the Participant’s domicile being other than within
the United States of America.

(c)           (i)            Lender may at any time assign to one or more
financial institutions or other entities (an “Assignee”) all, or a proportionate
part of all, of its rights and obligations under this Agreement and the Note.

9.10         Governing Law; Choice of Forum; Consent to Service of Process and
Jurisdiction; Waiver of Trial by Jury.  This Agreement, the other Loan Documents
and all other aspects of the lending transaction contemplated herein and
evidenced by the Loan Documents shall be governed by the laws of the State of
Texas or the laws of the United States, as applicable.  Any suit, action or
proceeding against Borrower with respect to this Loan Agreement, the Note or the
other Loan Documents or any judgment entered by any court in respect thereof,
may be brought in the courts of the State of Texas or in the United States
Courts located in the Northern District of Texas as Lender in its sole
discretion may elect, and Borrower hereby submits to the non-exclusive
jurisdiction of such courts for the purpose of any such suit, action or
proceeding.  Borrower hereby agrees that service of all writs, process and
summonses in any such suit, action or proceeding brought in the State of Texas
may be brought upon its process agent appointed below, and Borrower hereby
irrevocably appoints Gerald J. Reihsen, III, whose address is 15601 Dallas
Parkway, Suite 600, Addison, Texas 75001, its process agent, as its true and
lawful attorney-in-fact in the name, place and stead of Borrower to accept such
service of any and all such writs, process and summonses.  Borrower hereby
irrevocably consents to the service of process in any suit, action or proceeding
in said court by the mailing thereof by Lender by registered or certified mail,
postage prepaid, to Borrower’s address set forth in Section 9.01 hereof. 
Borrower hereby irrevocably waives any objections which it may now or hereafter
have to the laying of venue of any suit, action or proceeding arising out of or
relating to this Loan Agreement, the Note or any other Loan Document brought in
the courts located in the State of Texas, County of Dallas, and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in an inconvenient forum. BORROWER AND LENDER
AND LENDER HEREBY WAIVE TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING BROUGHT
IN CONNECTION WITH THIS LOAN AGREEMENT, THE NOTE OR ANY OF THE OTHER LOAN
DOCUMENTS, WHICH WAIVER IS INFORMED AND VOLUNTARY.  TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, BORROWER HEREBY WAIVES ANY AND ALL RIGHTS TO
REQUIRE MARSHALING OF ASSETS BY LENDER, WITH RESPECT TO THEIR RESPECTIVE RIGHTS
UNDER THE LOAN DOCUMENTS OR OTHERWISE.

55

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

 

9.11         Time of the Essence.  Time is of the essence with respect to the
provisions of this Loan Agreement and the other Loan Documents.  By accepting
payment of any portion of the Obligation after its due date, Lender does not
waive its right to require prompt payment when due of all other portions of the
Obligation or to declare an Event of Default for failure so to pay.

9.12         Waivers.  No failure or delay of Lender in exercising any power or
right hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power.  The rights and remedies of Lender hereunder and under the other
Loan Documents are cumulative and not exclusive of any rights or remedies which
it would otherwise have.  No waiver of any provision of this Loan Agreement or
any of the other Loan Documents or consent to any departure by Borrower or any
other Person therefrom shall in any event be effective unless signed in writing
by Lender, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given.  No notice or demand on
Borrower or any other Person in any case shall entitle Borrower or such Person
to any other or further notice or demand in similar or other circumstances.

9.13         Severability.  In the event any one or more of the provisions
contained in this Loan Agreement or in any other Loan Documents should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall not
in any way be affected or impaired thereby.  The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.

9.14         Counterparts.  This Loan Agreement may be executed in any number of
counterparts, with the same effect as if all of the parties had signed the same
document.  All counterparts shall be construed together and constitute one
agreement.

9.15         MAXIMUM INTEREST RATE.  IT IS THE INTENTION OF EACH OF LENDER AND
BORROWER TO COMPLY WITH ALL APPLICABLE FEDERAL AND STATE LAWS RELATING TO USURY;
THAT IS, LAWS LIMITING CHARGES FOR THE USE, DETENTION OR FORBEARANCE OF MONEY
AND GOVERNING CONTRACTS RELATING THERETO.  ACCORDINGLY, THIS AGREEMENT AND ALL
AGREEMENTS BETWEEN BORROWER AND LENDER, WHETHER NOW EXISTING OR HEREAFTER
ARISING, ARE EXPRESSLY LIMITED SO THAT IN NO EVENT WHATSOEVER, WHETHER BY REASON
OF ACCELERATION OF THE MATURITY OF THE OBLIGATION, OR OTHERWISE, SHALL THE
AMOUNT PAID OR AGREED TO BE PAID TO LENDER FOR THE USE, FORBEARANCE OR DETENTION
OF THE MONEY TO BE LOANED UNDER THE NOTE OR OTHERWISE, OR FOR THE PERFORMANCE OR
PAYMENT OF ANY COVENANT OR OBLIGATION CONTAINED HEREIN OR IN ANY OTHER LOAN
DOCUMENT EXCEED THE MAXIMUM RATE.  IN THE EVENT LENDER EVER RECEIVES, COLLECTS,
OR APPLIES AS INTEREST, ANY EXCESS AMOUNT WHICH WOULD BE EXCESSIVE INTEREST,
THAT AMOUNT SHALL BE TREATED AS A PRINCIPAL PREPAYMENT UNDER THE NOTE AND
APPLIED TO REDUCE THE OUTSTANDING PRINCIPAL BALANCE OF THE NOTE; PROVIDED THAT,
IF THE PRINCIPAL OF THE NOTE IS PAID IN FULL, ANY REMAINING EXCESS SHALL BE PAID
TO BORROWER.  IN DETERMINING WHETHER OR NOT THE INTEREST PAID OR PAYABLE, UNDER
ANY SPECIFIC CONTINGENCY, EXCEEDS THE MAXIMUM RATE, BORROWER AND LENDER SHALL,
TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW, (A) CHARACTERIZE ANY
NONPRINCIPAL PAYMENT AS AN EXPENSE, FEE, OR PREMIUM RATHER THAN AS INTEREST, (B)
EXCLUDE VOLUNTARY PREPAYMENTS AND THE EFFECTS THEREOF, AND (C) SPREAD THE TOTAL
AMOUNT OF INTEREST THROUGHOUT THE ENTIRE CONTEMPLATED TERM OF THE NOTE; PROVIDED
THAT, IF THE NOTE IS PAID AND PERFORMED IN FULL PRIOR TO THE END OF THE FULL
CONTEMPLATED TERM OF

56

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THE NOTE, AND IF THE INTEREST RECEIVED BY LENDER FOR THE ACTUAL PERIOD OF
EXISTENCE OF THE NOTE EXCEEDS THE MAXIMUM RATE, LENDER SHALL REFUND TO BORROWER
THE AMOUNT OF SUCH EXCESS, AND, IN SUCH EVENT, LENDER SHALL NOT BE SUBJECT TO
ANY PENALTIES PROVIDED BY ANY LAWS FOR CONTRACTING FOR, CHARGING, TAKING,
RESERVING, OR RECEIVING INTEREST IN EXCESS OF THE MAXIMUM RATE.   TO THE EXTENT
THAT LENDER IS RELYING ON THE LAWS OF THE STATE OF TEXAS FOR PURPOSES OF
DETERMINING THE MAXIMUM RATE, SUCH TERM SHALL MEAN THE INTEREST RATE CEILING
FROM TIME TO TIME IN EFFECT AS PROVIDED IN CHAPTER 303 OF THE TEXAS FINANCE
CODE, AS MAY BE HEREAFTER AMENDED OR RECODIFIED.  TO THE EXTENT UNITED STATES
FEDERAL LAW PERMITS LENDER TO CONTRACT FOR, CHARGE OR RECEIVE A GREATER AMOUNT
OF INTEREST, LENDER WILL RELY ON UNITED STATES FEDERAL LAW INSTEAD OF CHAPTER
303 OF THE TEXAS FINANCE CODE, AS MAY BE HEREAFTER AMENDED OR RECODIFIED, FOR
THE PURPOSE OF DETERMINING THE MAXIMUM RATE.  ADDITIONALLY, TO THE EXTENT
PERMITTED BY APPLICABLE LAW NOW OR HEREAFTER IN EFFECT, LENDER MAY, AT ITS
OPTION AND FROM TIME TO TIME, IMPLEMENT ANY OTHER METHOD OF COMPUTING THE
MAXIMUM RATE UNDER CHAPTER 303 OF THE TEXAS FINANCE CODE, AS MAY BE HEREAFTER
AMENDED OR RECODIFIED, OR UNDER OTHER APPLICABLE LAW, BY GIVING BORROWER THE
NOTICE REQUIRED BY APPLICABLE LAW NOW OR HEREAFTER IN EFFECT.  IN NO EVENT SHALL
THE LOAN BE CONSIDERED A REVOLVING CREDIT ACCOUNT AS DEFINED IN CHAPTER 346 OF
THE TEXAS FINANCE CODE, AS MAY BE HEREAFTER AMENDED OR RECODIFIED.  THE TERMS
AND PROVISIONS OF THIS SECTION 9.15 SHALL CONTROL AND SUPERSEDE EVERY OTHER
PROVISION OF THIS AGREEMENT AND OF ALL AGREEMENTS WITH RESPECT TO THE LOAN
BETWEEN BORROWER AND LENDER IN THE EVENT OF A CONFLICT IN SUCH PROVISIONS.

9.16         Binding Effect.  This Loan Agreement shall become effective when it
shall have been executed by Borrower and Lender.

9.17         Controlling Document.  In the event of any conflict between the
terms of this Loan Agreement and any of the other Loan Documents, the terms of
this Loan Agreement shall control.

9.18         Final Release.  Full payment of the Note by Borrower or any other
Person shall automatically constitute a full release of any claims or causes of
action existing as of the date of such payment in favor of Borrower or any other
party, in connection with the Loan, this Agreement, the Note or any of the other
Loan Documents, to the extent that such claim relates to (i) alleged failure of
Lender or its Affiliates to act in good faith or deal fairly, (ii) alleged oral
agreements to modify the terms of this Agreement, the Note or the other Loan
Documents, (iii) alleged, special or fiduciary relationship between Borrower and
Lender, and (iv) tortuous interference with, or control, over the management of
Borrower.

9.19         Entire Agreement.  The Loan Documents embody the entire agreement
between the parties and supersede all prior agreements and understandings.

9.20         Liability.  Any obligation or liability of  Borrower hereunder
shall be enforceable only against, and payable only out of, the property of
Borrower, and in no event shall any officer, director, shareholder, partner,
beneficiary, agent, advisor or employee of Borrower, be held to any personal
liability whatsoever or be liable for any of the obligations of the parties
hereunder, or the property of any such Persons be subject to the payment of any
such obligations, except in the case of certain Persons as otherwise
specifically provided in the Loan Documents and where such Persons have executed
a written agreement pertaining thereto.

[Remainder of this page is blank.  Next page is signature page.]

57

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IN WITNESS WHEREOF, Borrower and Lender have caused this Loan Agreement to be
duly executed by their duly authorized officers, all as of the day and year
first above written.

LENDER:

TEXANS COMMERCIAL CAPITAL, LLC,

a Texas limited liability company

By:

 

 

James N. Roland, Senior Vice President

 

 

BORROWER:

BEHRINGER HARVARD MOUNTAIN VILLAGE, LLC,
a Colorado limited liability company

By:          Behringer Harvard Short-Term Opportunity Fund I LP,

a Texas limited partnership,

its manager

By:          Behringer Harvard Advisors II LP.

a Texas limited partnership,

its general partner

By:          Harvard Property Trust, LLC,

a Texas limited liability company

its general partner

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

58

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

 

LOAN AGREEMENT

by and among

BEHRINGER HARVARD MOUNTAIN VILLAGE LLC,
as Borrower

and

TEXANS COMMERCIAL CAPITAL, LLC,
as Lender

* * *

US $31,650,000

* * *

September 29, 2006

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

 

ARTICLE I

 

DEFINITIONS

 

1

1.01

 

Definitions

 

1

1.02

 

Other Definitional Provisions

 

16

 

 

 

 

 

ARTICLE II

 

THE LOAN

 

17

2.01

 

The Loan

 

17

2.02

 

Interest on the Loan

 

17

2.03

 

Note; Repayments

 

17

2.04

 

Manner and Application of Payments

 

17

2.05

 

Origination Fee

 

18

2.06

 

Advances.

 

18

2.07

 

Prepayment of Loan

 

20

2.08

 

Taxes

 

20

2.09

 

Lending Office

 

22

2.10

 

Conditions Precedent for the Benefit of Lender

 

22

2.11

 

Conditions to the Initial Advance

 

22

2.12

 

Conditions to Subsequent Advances

 

22

2.13

 

Reallocation of Approved Budget

 

23

2.14

 

No Waiver

 

24

2.15

 

Subordination

 

24

 

 

 

 

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES OF BORROWER

 

24

3.01

 

Organization

 

24

3.02

 

Authorization and Power

 

24

3.03

 

Valid and Binding Obligation

 

25

3.04

 

Conflicts

 

25

3.05

 

Consents, Etc

 

25

3.06

 

Pending Litigation

 

25

3.07

 

Principal Office, Etc.

 

25

3.08

 

Control Persons

 

26

3.09

 

Government Regulation

 

26

3.10

 

Insider

 

26

3.11

 

O.S.H.A.

 

27

3.12

 

Financial Condition

 

27

3.13

 

Restrictions

 

27

3.14

 

No Default

 

27

3.15

 

Labor Relations

 

27

3.16

 

ERISA

 

27

3.17

 

Single Purpose Entities; Nature of Borrower

 

28

3.18

 

Indebtedness

 

28

3.19

 

Taxes

 

28

 

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

 

3.20

 

Property

 

28

3.21

 

Use of Property

 

29

3.22

 

Full Disclosure

 

29

3.23

 

Title to the Property

 

29

3.24

 

Leases

 

30

3.25

 

Governmental Requirements

 

30

3.26

 

Financing Statements

 

30

3.27

 

Material Agreements

 

30

3.28

 

Accuracy of Information

 

30

3.29

 

Access

 

30

3.30

 

Commencement of Construction

 

30

3.31

 

Authorized Signatories

 

30

 

 

 

 

 

ARTICLE IV

 

AFFIRMATIVE COVENANTS OF BORROWER

 

31

4.01

 

Financial Statements, Reports and Documents of Borrower and Other Persons

 

31

4.02

 

Loan Proceeds

 

33

4.03

 

Assets of Borrower

 

33

4.04

 

Leases

 

33

4.05

 

Management, Maintenance, Repairs and Alterations

 

34

4.06

 

Inspection of Books and Records

 

34

4.07

 

Compliance with Governmental Requirements

 

34

4.08

 

Insurance and Notice

 

35

4.09

 

Payment of Taxes

 

35

4.10

 

Payment of Claims

 

36

4.11

 

Costs and Expenses

 

36

4.12

 

Indemnity by Borrower

 

36

4.13

 

Further Assurances

 

37

4.14

 

Construction Contracts

 

38

4.15

 

Plans

 

38

4.16

 

Prosecution of Construction

 

38

4.17

 

Correction of Defects

 

38

4.18

 

Storage of Materials

 

39

4.19

 

Inspection of the Property

 

39

4.20

 

Notices by Governmental Authority, Fire and Casualty Losses, Etc.

 

39

4.21

 

Application of Advances and the Loan

 

39

4.24

 

Anti-Terrorism Compliance

 

40

4.25

 

Defense of Title

 

40

4.26

 

Pre-Sale Contracts

 

40

 

 

 

 

 

ARTICLE V

 

NEGATIVE COVENANTS

 

40

5.01

 

Name, Fiscal Year and Accounting Method

 

40

5.02

 

Consolidation, Merger, Conveyance, Transfer or Lease

 

40

5.03

 

ERISA Compliance

 

40

 

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

 

5.04

 

Transactions with Affiliates

 

41

5.05

 

No Conditional Sales Contracts, Etc.

 

41

5.06

 

Lines of Business

 

41

5.07

 

Easements

 

41

5.08

 

Changes in Zoning

 

41

5.09

 

New Construction

 

41

5.10

 

Limitation on Indebtedness and Liens

 

41

5.11

 

Distributions, Dividends and Repayments

 

41

5.12

 

Limitation on Investments

 

42

5.13

 

Organizational Documents

 

42

5.14

 

Material Agreements

 

42

5.15

 

Anti-Terrorism Compliance

 

42

 

 

 

 

 

ARTICLE VI

 

CONDITIONS OF LENDING

 

43

6.01

 

Loan Documents

 

43

6.02

 

Governmental Approvals

 

43

6.03

 

Appraisal

 

43

6.04

 

Insurance

 

43

6.05

 

Survey

 

43

6.06

 

Title Insurance

 

43

6.07

 

UCC Searches

 

43

6.08

 

Financial Information

 

43

6.09

 

Soils Report

 

43

6.10

 

Inspecting Architect/Engineer Audit

 

43

6.11

 

Environmental Audit

 

43

6.13

 

Organizational Documents

 

44

6.14

 

Tax Information

 

44

6.15

 

Opinions of Counsel

 

44

6.16

 

Account

 

44

6.17

 

The Fees

 

44

6.18

 

Partnership Consent

 

44

6.19

 

Additional Information

 

44

 

 

 

 

 

ARTICLE VII

 

EVENTS OF DEFAULT

 

44

 

 

 

 

 

ARTICLE VIII

 

RIGHTS AND REMEDIES OF LENDER

 

47

8.01

 

Rights of Lender

 

47

8.02

 

Acceleration

 

47

8.03

 

Funds of Lender

 

48

8.04

 

Intentionally Deleted

 

48

8.05

 

Payments to Affiliates

 

48

8.06

 

Management Agreement

 

48

 

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

 

8.07

 

Other Rights and Remedies

 

48

8.08

 

No Waiver or Exhaustion

 

48

8.09

 

Right of Offset

 

48

8.10

 

Application of Insurance Proceeds.

 

49

8.11

 

Application of Condemnation Proceeds.

 

50

8.12

 

Third Party Payments

 

52

8.13

 

Protective Advances

 

52

8.14

 

Tax and Insurance Escrow

 

52

8.15

 

Waiver of Offset Right Deficiency Statute

 

52

 

 

 

 

 

ARTICLE IX

 

MISCELLANEOUS

 

52

9.01

 

Notices

 

52

9.02

 

Modifications

 

53

9.03

 

Form and Substance

 

53

9.04

 

No Third Party Beneficiary

 

53

9.05

 

Availability of Records; Confidentiality

 

53

9.06

 

Number and Gender

 

53

9.07

 

Captions

 

53

9.08

 

Survival of Agreement

 

53

9.09

 

Parties Bound; Assignment

 

53

9.10

 

Governing Law; Choice of Forum; Consent to Service of Process and Jurisdiction;
Waiver of Trial by Jury

 

55

9.11

 

Time of the Essence

 

56

9.12

 

Waivers

 

56

9.13

 

Severability

 

56

9.14

 

Counterparts

 

56

9.15

 

Maximum Interest Rate

 

56

9.16

 

Binding Effect

 

57

9.17

 

Controlling Document

 

57

9.18

 

Final Release

 

57

9.19

 

Entire Agreement

 

57

 

EXHIBITS

Exhibit A

Legal Description of Land

Exhibit B

Approved Budget

Exhibit C

Assignment of Construction Contract

Exhibit D

Application for Advance

Exhibit E

Contractor’s Affidavit and Subordination

Exhibit F

Assignment of Plans and Consent of Architect and Engineer

Exhibit G

Survey Requirements

Exhibit H

Compliance Certificate

Exhibit I

Disclosed Litigation

Exhibit J

Price Schedule

 

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