WITH A STATEMENT ADDRESSED TO
LENDER, ITS SUCCESSORS AND ASSIGNS, DULY ACKNOWLEDGED AND CERTIFIED, SETTING
FORTH (I) THE UNPAID PRINCIPAL, (II) THE INTEREST RATE, (III) THE DATE
INSTALLMENTS OF INTEREST AND/OR PRINCIPAL WERE LAST PAID, (IV) ANY OFFSETS OR
DEFENSES TO THE PAYMENT OF THE DEBT, AND (V) THAT THE LOAN DOCUMENTS ARE VALID,
LEGAL AND BINDING OBLIGATIONS AND HAVE NOT BEEN MODIFIED OR IF MODIFIED, GIVING
PARTICULARS OF SUCH MODIFICATION.
5.12
PROPERTY MANAGEMENT.
5.12.1
MANAGEMENT AGREEMENT.
BORROWER SHALL (I) CAUSE THE PROPERTY
TO BE MANAGED PURSUANT TO THE MANAGEMENT AGREEMENT; (II) PROMPTLY PERFORM AND
OBSERVE ALL OF THE COVENANTS REQUIRED TO BE PERFORMED AND OBSERVED BY IT UNDER
THE MANAGEMENT AGREEMENT AND DO ALL THINGS NECESSARY TO PRESERVE AND TO KEEP
UNIMPAIRED ITS RIGHTS THEREUNDER; (III) PROMPTLY NOTIFY LENDER OF ANY DEFAULT
UNDER THE MANAGEMENT AGREEMENT OF WHICH IT IS AWARE; (IV) PROMPTLY DELIVER TO
LENDER A COPY OF EACH FINANCIAL STATEMENT, BUSINESS PLAN, CAPITAL EXPENDITURE
PLAN, AND PROPERTY IMPROVEMENT PLAN AND ANY OTHER NOTICE, REPORT AND ESTIMATE
RECEIVED BY BORROWER UNDER THE MANAGEMENT AGREEMENT; AND (V) PROMPTLY ENFORCE
THE PERFORMANCE AND OBSERVANCE OF ALL OF THE COVENANTS REQUIRED TO BE PERFORMED
AND OBSERVED BY MANAGER UNDER THE MANAGEMENT AGREEMENT.
WITHOUT LENDER'S PRIOR
WRITTEN CONSENT, BORROWER SHALL NOT (A) SURRENDER, TERMINATE, CANCEL, EXTEND OR
RENEW THE MANAGEMENT AGREEMENT (OTHER THAN EXTENSIONS OR RENEWALS PURSUANT TO
THE EXPRESS RENEWAL/EXTENSION PROVISIONS SET FORTH IN THE MANAGEMENT AGREEMENT
ON THE SAME TERMS AND CONDITIONS SET FORTH THEREIN (AS IN EFFECT ON THE DATE
HEREOF, OR AS HEREINAFTER AMENDED OR MODIFIED IN ACCORDANCE WITH THE TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT)) OR OTHERWISE REPLACE THE MANAGER OR
ENTER INTO ANY OTHER MANAGEMENT AGREEMENT (EXCEPT PURSUANT TO SECTION 5.12.2);
(B) REDUCE OR CONSENT TO THE REDUCTION OF THE TERM OF THE MANAGEMENT AGREEMENT;
(C) INCREASE OR CONSENT TO THE INCREASE OF THE AMOUNT OF ANY CHARGES UNDER THE
MANAGEMENT AGREEMENT; (D) OTHERWISE MODIFY, CHANGE, SUPPLEMENT, ALTER OR AMEND
IN ANY
55
MATERIAL RESPECT, OR WAIVE OR RELEASE ANY OF ITS RIGHTS AND REMEDIES UNDER, THE
MANAGEMENT AGREEMENT; (E) SUFFER OR PERMIT THE OCCURRENCE AND CONTINUANCE OF A
DEFAULT BEYOND ANY APPLICABLE CURE PERIOD UNDER THE MANAGEMENT AGREEMENT (OR ANY
SUCCESSOR MANAGEMENT AGREEMENT) IF SUCH DEFAULT PERMITS THE MANAGER TO TERMINATE
THE MANAGEMENT AGREEMENT (OR SUCH SUCCESSOR MANAGEMENT AGREEMENT); OR (F) SUFFER
OR PERMIT THE OWNERSHIP, MANAGEMENT OR CONTROL OF THE MANAGER TO BE TRANSFERRED
TO A PERSON OTHER THAN AN AFFILIATE OF BEHRINGER HARVARD REIT.
5.12.2
TERMINATION OF MANAGER / SUB-MANAGER.
(A)
IF (I) AN EVENT OF DEFAULT SHALL BE
CONTINUING, OR (II) MANAGER IS IN MATERIAL DEFAULT UNDER THE MANAGEMENT
AGREEMENT, OR (III) UPON THE GROSS NEGLIGENCE, MALFEASANCE OR WILLFUL MISCONDUCT
OF THE MANAGER OR IF MANAGER BECOMES INSOLVENT OR A DEBTOR IN A BANKRUPTCY
PROCEEDING, BORROWER SHALL, AT THE REQUEST OF LENDER, TERMINATE THE MANAGEMENT
AGREEMENT AND REPLACE MANAGER WITH A REPLACEMENT MANAGER ACCEPTABLE TO BOTH
LENDER (IN LENDER'S DISCRETION) AND THE APPLICABLE RATING AGENCIES, ON TERMS AND
CONDITIONS