Document:

Exhibit 10.6

 

SECURED PROMISSORY NOTE

 

	
March 29,   2011
    	
 
    	
Up to $2,500,000
    

 

FOR VALUE RECEIVED, the undersigned, BEHRINGER HARVARD OPPORTUNITY REIT I, INC., a Maryland corporation (the “Borrower”), HEREBY PROMISES TO PAY to the order of BEHRINGER HARVARD HOLDINGS, LLC, a Delaware limited liability company (the “Lender”), the principal amount outstanding from time to time as set forth on a grid in substantially the form of attached Exhibit A as is maintained by the Lender equal to the outstanding amount of the Advances (as hereinafter defined), up to a maximum of Two Million Five Hundred Thousand Dollars ($2,500,000) in Advances, made by Lender to Borrower hereunder, on the Maturity Date, together with all accrued and unpaid interest hereunder on such date.  This Note is secured by that certain Pledge and Security Agreement (“Pledge Agreement”) of even date herewith, executed by Borrower and Lender.  All of the terms, covenants, and conditions contained in the Pledge Agreement are hereby made part of this Note to the same extent and with the same force as if they were fully set forth herein.  As used herein, “Maturity Date” shall mean the earliest to occur of (a) the second anniversary of the date hereof and (b) the termination, without cause, of (i) the Amended and Restated Advisory Management Agreement dated December 29, 2006, as may be amended or restated from time to time (the “Advisory Agreement”), by and between Borrower and Behringer Harvard Opportunity Advisors I, LLC (the “Advisor”) or (ii) the Second Amended and Restated Property Management and Leasing Agreement, dated as of December 29, 2006, as amended, by and between Behringer Harvard Opportunity REIT I, Inc., Behringer Harvard Opportunity OP I, LP, HPT Management Services, LLC, Behringer Harvard Real Estate Services, LLC, and Behringer Harvard Opportunity Management Services, LLC.

 

From time to time, until the day immediately prior to the Maturity Date, if requested by the Borrower, the Lender may, in its sole discretion, make advances to the Borrower (each an “Advance”).  An Advance may be made by transfer of funds to the Borrower or by payment of obligations of the Borrower by the Lender.  The Lender shall have no obligation to make any Advance hereunder, all of such Advances being discretionary and to be made on the sole discretion of the Lender.  In no event shall any actual or purported written or unwritten agreement of the Lender to make an Advance be enforceable or binding upon the Lender.  An Advance shall exist only after it is actually made by the advancement of funds to the Borrower by the Lender and no obligation to make such Advance shall exist until it is so made or such obligation is paid.  At no time shall an Advance be made such that there will be in excess of Two Million Five Hundred Thousand Dollars ($2,500,000) in principal amount outstanding hereunder upon the making of such Advance.

 

Each Advance shall be requested on notice, given not later than 10:00 a.m. (Dallas, Texas time) on the Business Day prior to the date of the requested Advance given by the Borrower to the Lender.

 

The Borrower shall pay interest on the unpaid principal amount of each Advance owing to the Lender from the date of such Advance until such principal amount shall be paid in full, at the rate of five percent (5%) per annum.  Notwithstanding the above, after the occurrence of an Event of Default (as hereinafter defined), interest on the unpaid principal amount of each Advance shall accrue, at the rate of the lesser of eight percent (8%) per annum or the highest rate permitted by applicable law from the date of the Event of Default while such Event of Default is continuing.  All payments on this Note shall be applied to the payment of accrued interest before being applied to the payment of principal.

 

 

The Borrower may, upon at least one Business Day notice to the Lender stating the proposed date and aggregate principal amount of the prepayment, and if such notice is given the Borrower shall on such proposed date, prepay the principal amount of outstanding Advances, in whole or in part, in the aggregate amount stated in such notice, without penalty or premium; provided that all interest accrued and unpaid hereunder to the date of such prepayment is paid therewith.  Notwithstanding any prepayment, borrowings in the form of additional Advances as set forth above may be made up to the Maturity Date set forth above.

 

The Net Sales Proceeds from a Sale and and the proceeds from any refinancing in respect of an asset owned by Borrower, in each case, after the application of such Net Sales Proceeds or proceeds, as the case may be, to the Borrower’s working capital reserves, shall be applied first toward payment of accrued interest hereunder and next toward payment of principal.  Capitalized terms used in this paragraph and not otherwise defined herein shall have the following meanings:

 

“Joint Ventures.”  The joint venture or partnership arrangements in which the Borrower or the Partnership is a partner, member or shareholder.

 

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

 

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“Partnership.”  Behringer Harvard Opportunity OP I, LP, a Texas limited partnership, through which the Borrower may own assets.

 

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

 

The Borrower shall make each payment hereunder not later than 10:00 a.m. (Dallas, Texas time) on the day when due in United States Dollars.  All payments under this Note shall be made without setoff or counterclaim.

 

Whenever any payment hereunder shall be stated to be due on a day other than a Business Day (as hereafter defined), such payment shall be made on the next succeeding Business Day, and such extension of time shall in such case be included in the computation of payment of interest, as the case may be. A “Business Day” shall be any day that banks are authorized to be open in Dallas, Texas.

 

All computations of interest shall be made by the Lender on the basis of the number of days in the year in question, in each case for the actual number of days (including the first day but excluding the last day) occurring in the period for which such interest is payable.  Each determination by the Lender of an interest rate hereunder shall be conclusive and binding for all purposes, absent manifest error.

 

Interest on any past due payment shall be payable on demand.

 

Both principal and interest shall be due and payable, in lawful money of the United States of America, in immediately available funds to the Lender, 15601 Dallas Parkway, Suite 600, Addison, Texas 75001 or at such other place as may be designated by the Lender from time to time.  All Advances made and payments made on account of principal hereof shall be recorded by the Lender and endorsed on the schedule attached hereto which is part of this Note; provided that any failure to so record shall not affect the actual obligations of the Borrower hereunder.

 

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The Borrower, for itself and its legal representatives, successors, and assigns, hereby expressly waives presentment, demand (other than demand for payment), protest, notice of dishonor, notice of acceleration, notice of intent to accelerate, or further notice or other requirements of any kind.  No failure to exercise, and no delay in exercising, any rights hereunder on the part of the holder hereof shall operate as a waiver of such rights.

 

The liability of the Borrower hereunder shall be unconditional and shall not be in any manner affected by any indulgence whatsoever granted or consented to by the holder hereof, including but not limited to any extension of time, renewal, waiver, or other modification.  Any failure of the Lender to exercise any right hereunder shall not be construed as a waiver of the right to exercise the same or any other right at any time and from time to time thereafter.  The Lender or any holder may accept late payments, or partial payments, even though marked “payment in full” or containing words of similar import or other conditions, without waiving any of its rights.  No amendment, modification, or waiver of any provision of this Note nor consent to any departure by the Borrower therefrom shall be effective, irrespective of any course of dealing, unless the same shall be in writing and signed by the Lender, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.  This Note cannot be changed or terminated orally or by estoppel or waiver or by any alleged oral modification regardless of any claimed partial performance referable thereto.

 

Any notice from the Lender to the Borrower shall be deemed given when delivered to the Borrower by hand or facsimile or five days after deposited in United States mail or the day deposited in the U.S. mail and addressed to the Borrower at the last address of the Borrower appearing on the Lender’s records.

 

If any of the following events shall occur and be continuing:

 

(a)           (i)            the Borrower shall fail to pay any principal hereof, or interest hereon, when the same becomes due and payable, and, in the case of such payments other than principal, such failure shall continue for three days, or (ii) the Borrower shall fail to make any other payment under this Note within five days; or

 

(b)           the Borrower shall fail to perform any other term, covenant, or agreement contained in this Note to be performed or observed if such failure shall remain unremedied for ten days after the Borrower receives written notice thereof; or

 

(c)           the Borrower shall (i) breach any obligation of the Borrower under any instrument representing indebtedness for money borrowed causing the acceleration of the repayment of such indebtedness, (ii) breach any obligation of the Borrower under any capital lease causing the acceleration of the lease payments under any such capital lease or (iii) receive any notice of any such acceleration; or

 

(d)           (i)            the Borrower shall generally not pay its debts as such debts become due, or shall admit in writing its inability to pay its debts generally, or shall make a general assignment for the benefit of creditors;

 

(ii)           any proceeding shall be instituted by the Borrower seeking to adjudicate it as bankrupt or insolvent, or seeking liquidation, winding up, reorganization, arrangement, adjustment, protection, relief or composition of it or its debts under any law relating to bankruptcy, insolvency, or reorganization or relief of debtors, or seeking the entry of an order for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its property;

 

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(iii) there shall be commenced against the Borrower any proceeding referred in subparagraph (d)(ii) above which results in the entry of an order for relief or any such adjudication or the appointment of a receiver, trustee or other similar official for it or any substantial part of its property which remains undismissed, undischarged, or unbonded for a period of 30 days, provided that the Borrower, for itself and on behalf of itself, hereby expressly authorizes the Lender to appear in any court conducting any such proceeding during such 30-day period to preserve, protect, and defend their rights under this Note; or

 

(iv)          the Borrower shall take any corporate action to authorize any of the actions set forth above in this subparagraph (d); or

 

(e)           Any provision of this Note after delivery hereof shall for any reason cease to be valid and binding on or enforceable against the Borrower, or the Borrower shall so state in writing.

 

Then, and in any such event (other than such an event described in subparagraph (d)(ii) or (iii) above), the Lender may (i) by written notice to the Borrower, declare that an “Event of Default” exists and any obligation of the Lender to make Advances to be terminated, whereupon the same shall forthwith terminate, (ii) by notice to the Borrower, declare this Note, all interest thereon and all other amounts payable under this Note to be forthwith due and payable, and thereupon this Note, all such interest and all such amounts shall become and be forthwith due and payable, without presentment, demand, protest, notice of intent to accelerate, other notice or other requirements of any kind, all of which are hereby expressly waived by the Borrower, (iii) pursue any other applicable rights and remedies, or (iv) reduce any claim to judgment or bring suit or other proceeding either for specific performance of any covenant or condition or in aid of the exercise of any right or remedy.

 

If an event occurs such as is described under subparagraph (d)(ii) or (iii) above, then, notwithstanding the foregoing an “Event of Default” shall automatically exist without the need for notice from the Lender, any obligation of the Lender to make any Advance thereupon shall cease without notice, and the unpaid principal amount of and any accrued interest on all of the Advances automatically shall become due and payable, without presentment, demand, protest, notice of intent to accelerate, notice of acceleration or other notice or other requirements of any kind, all of which are hereby expressly waived by the Borrower.

 

The Borrower agrees to pay on demand all reasonable costs and expenses incurred by the Lender in connection with this Note; provided, however that no fees shall be due or payable to the Lender hereunder.  The Borrower further agrees to pay on demand all costs and expenses incurred by the Lender in connection with the enforcement of this Note, including reasonable attorney’s fees, incurred in connection with such enforcement.  The Borrower shall not pay to the Advisor any debt financing fee, as provided for under the Advisory Agreement, in connection with any Advances hereunder.

 

It is the intention of the Lender and the Borrower to conform strictly to the applicable usury laws now or hereafter in force, and therefore, all agreements between the Borrower and the Lender whether now existing or hereafter arising and whether written or oral are hereby expressly limited so that in no contingency or event whatsoever, whether by reason of the creation of the indebtedness evidenced hereby, acceleration of the maturity hereof, or otherwise, shall the amount paid, or agreed to be paid, to the Lender for the use, forbearance, or detention of the money evidenced hereby or to be loaned hereunder or otherwise or for the payment or performance of any covenant or obligations contained herein or in any instrument evidencing, securing, or pertaining to the indebtedness evidenced hereby, exceed the

 

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maximum lawful rate allowed by applicable law.  If any term hereof is susceptible of being construed as obligating the Borrower for the payment of interest in excess of that authorized by applicable law, or if, from any other circumstances whatsoever, including, but not limited to, acceleration of the maturity of the indebtedness evidenced hereby, fulfillment of any provision hereof or of any document or any other agreement referred to herein at the time performance of such provision shall be due, shall involve transcending the limit of validity prescribed by law which a court of competent jurisdiction may deem applicable thereto, then, the obligation to be fulfilled shall be automatically reduced to the limit of such validity; and, if from any such circumstances the Lender should ever receive or be entitled to receive as interest an amount deemed to be interest by applicable law which shall exceed the maximum lawful rate, such amount which would be excessive interest shall be cancelled automatically as of the date of the occurrence of any such circumstance, and if theretofore paid shall be refunded or credited and applied to the reduction of the principal amount owing hereunder or, at the option of the Lender, to the reduction of any other principal indebtedness of the Borrower to the Lender, and not to the payment of interest or, if such excess interest exceeds the unpaid balance of principal hereof and such other Indebtedness, the excess shall be refunded to the Borrower, and, in such event, no holder of this Note shall be subject to any penalties provided by law for contracting for, charging or receiving interest in excess of the maximum lawful rate.  The right to accelerate the maturity of sums due under this Note does not include the right to accelerate any interest which has not otherwise accrued on the date of such acceleration, and the Lender does not intend to charge or collect any unearned interest in the event of acceleration.  All sums paid or agreed to be paid by the Borrower to the Lender for the use, forbearance, or detention of the indebtedness due hereunder shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full term of such indebtedness evidenced by this Note until payment in full so that the actual rate of interest on account of such indebtedness does not exceed the applicable usury ceiling.  In determining whether or not the interest paid or payable under any specific contingency exceeds the maximum lawful rate, the Borrower and the Lender shall, to the maximum extent permitted under applicable law, (a) characterize any non-principal 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 term of this Note so that the interest rate Is uniform throughout the entire term of this Note.  The terms and provisions of this section shall control and supersede every other provision of all agreements between the Borrower and the Lender, notwithstanding any provision to the contrary contained herein or in any such agreements.

 

If any part of this Note cannot be enforced, this fact will not affect the rest of the Note.  In particular, this paragraph means (among other things) that the Borrower does not agree or intend to pay, and Lender does not agree or intend to contract for, charge, collect, take, reserve or receive (collectively referred to herein as “charge or collect”), any amount in the nature of interest or in the nature of a fee for this loan, which would in any way or event (including demand, prepayment, or acceleration) cause the Lender to charge or collect more for this loan than the maximum the Lender would be permitted to charge or collect by federal law or applicable state law.  Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability.  All such parties agree that Lender may renew or extend (repeatedly and for any length of time) this loan, or release any party or guarantor or collateral; or impair, fail to realize upon or perfect any security interest of the Lender in any collateral without the consent of or notice to anyone.  All such parties also agree that the Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made.  This Note and all the covenants, promises and agreements contained herein shall be binding upon and inure to the benefit of the respective legal representatives, successors and assigns of the Lender and the Borrower.

 

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Any obligation or liability of the Borrower hereunder shall be enforceable only against, and payable only out of, the assets of the Borrower, and in no event shall any officer, director, shareholder, partner, beneficiary, agent, advisor or employee of the Borrower be held to any personal liability whatsoever or be liable for any of the obligations of the Borrower under this Note.  Without limiting the generality of the preceding sentence, no general partner in the Borrower shall have any liability for payment of this Note.

 

THIS NOTE REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL  AGREEMENTS OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.

 

The provisions of Chapter 15 of the Texas Credit Code (Vernon’s Texas Civil Statutes, Article 5069-15)  are specifically declared by the parties hereto not to be applicable to this Note.

 

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH LAWS OF THE STATE OF TEXAS.

 

 

	
BEHRINGER   HARVARD HOLDINGS, LLC a Delaware limited liability company
    	
BEHRINGER   HARVARD OPPORTUNITY REIT I, INC., a Maryland corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
By:  
    	
/s/ Gerald J. Reihsen, III
    	
 
    	
By:   
    	
/s/   Kymberlyn K. Janney
    
	
 
    	
Gerald J. Reihsen, III
    	
 
    	
Kymberlyn   K. Janney
    
	
 
    	
Executive   Vice President — Corporate Development & Legal and Secretary
    	
 
    	
Chief   Financial Officer and Treasurer
    
					

 

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EXHIBIT A

 

LOANS AND PAYMENTS OF PRINCIPAL

 

	
Date
    	
 
    	
Amount of Loan
   or Principal Paid
    	
 
    	
Interest Paid
    	
 
    	
Unpaid Principal
   Balance
    	
 
    	
Notation
   Made By
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

8Exhibit 10.7

 

PLEDGE AND SECURITY AGREEMENT

 

THIS PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of March 29 2011, is made by and between Behringer Harvard Opportunity REIT I, Inc., a Maryland corporation (the “Pledgor”), and Behringer Harvard Holdings, LLC, a Delaware limited liability company (the “Lender”).

 

RECITALS

 

A.            Lender has agreed to make advances of monies to Pledgor in an amount up to Two Million Five Hundred Thousand Dollars ($2,500,000.00).

 

B.            Pledgor has executed and delivered to Lender that certain Secured Promissory Note, dated March       , 2011 (the “Note”) in the principal amount of Two Million Five Hundred Thousand Dollars ($2,500,000.00).

 

C.            To secure the obligations under the Note, Pledgor has agreed to pledge and deposit with Lender the collateral hereinafter described

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, it is agreed as follows:

 

1.             Defined Terms. Unless otherwise defined herein, terms defined in this Agreement have such defined meanings when used herein

 

“Joint Ventures.”  The joint venture or partnership arrangements in which the Pledgor or the Partnership is a partner, member or shareholder.

 

“Loan.”  Any indebtedness or obligation in respect of borrowed money or evidenced by bonds, notes, debentures, deeds of trust, letters of credit or similar instruments, including Mortgages and mezzanine loans.

 

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

 

“Net Sales Proceeds.”  In the case of a transaction described in clause (i)(A) of the definition of Sale, the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Pledgor, including all real estate commissions, closing costs and legal fees and expenses. In the case of a transaction described in clause (i)(B) of such definition, Net Sales Proceeds means the proceeds of any such transaction less the amount of selling expenses incurred by or on behalf of the Pledgor, including any legal fees and expenses and other selling expenses incurred in connection with such transaction. In the case of a transaction described in clause (i)(C) of such definition, Net Sales Proceeds means the proceeds of any such

 

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

 

“Partnership.”  Behringer Harvard Opportunity OP I, LP, a Texas limited partnership, through which the Pledgor may own assets.

 

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

 

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

 

“Sale”  or  “Sales.”  (i) Any transaction or series of transactions whereby: (A) the Pledgor or the Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion thereof,  and including any event with respect to any Property which results in the Pledgor receiving a significant amount of insurance proceeds or condemnation awards; (B) the Pledgor or the Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Pledgor or the Partnership in any Joint Venture in which it is a co-venturer or partner; (C) any Joint Venture directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Property or portion thereof, including any event with respect to any Property which results in the Joint Venture receiving insurance claims or condemnation awards; (D) the Pledgor or the Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, conveys or relinquishes its interest in any Mortgage or portion thereof (including with respect to

 

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any Mortgage, all repayments thereunder or in satisfaction thereof other than regularly scheduled interest payments) and any event with respect to a Mortgage which gives rise to a significant amount of insurance proceeds or similar awards; or (E) the Pledgor or the Partnership directly or indirectly (except as described in other subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any other Asset not previously described in this definition or any portion thereof, but (ii) not including any transaction or series of transactions specified in clause (i) (A) through (E) above in which the proceeds of such transaction or series of transactions are reinvested in one or more Assets within 180 days thereafter.

 

2.             Pledge.  In consideration of Lender lending the amounts under the Note to Pledgor, Pledgor hereby assigns, pledges and grants to Lender a security interest in, all of its right, title and interest in and to the Net Sales Proceeds from the Sale of a Property and the proceeds to the Borrower from the refinancing of any Loan (the “Pledged Collateral”); provided, however, that in the event that the pledge of any of the proceeds specified herein would cause the Pledgor or the Partnership to default under any Loan, those proceeds shall be excluded from the Pledged Collateral.

 

3.             Security For Obligations.  This Agreement secures the payment of all obligations of Pledgor now or hereafter existing under the Note, whether for principal, interest, fees, including attorney’s fees, expenses or any additional amounts payable to Lender thereunder, and all obligations of Pledgor now or hereafter existing under this Agreement (collectively, the “Obligations”).

 

4.             Delivery of Pledged Collateral.  All certificates or instruments representing or evidencing the Pledged Collateral shall be delivered to and held by or on behalf of Lender pursuant hereto and shall be in suitable form for transfer by delivery, or shall be accompanied by duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to Lender.  Lender shall have the right, at any time in its discretion and with notice to Pledgor, to transfer to, or to register in the name of, Lender or any of its nominees, the Pledged Collateral, subject only to the revocable rights specified in Section 5 hereof.

 

5.             Payment of Obligations; Release of Collateral.  Upon payment in full of the Obligations, Pledgor shall be entitled to the return, upon its request and at its expense, of the Pledged Collateral.

 

6.             Protection of Pledged Collateral.   Pledgor shall not grant a security interest in the Pledged Collateral to any other person or entity without the prior written consent of Lender.

 

7.             Representations and Warranties of Pledgor.  Pledgor represents and warrants that as of the date hereof:

 

(a)           This Agreement constitutes a valid, legal and binding obligation of Pledgor enforceable in accordance with its terms.  The execution, delivery and performance of this Agreement by Pledgor is not in contravention of any prior obligation of Pledgor or of any obligation with respect to the Pledged Collateral; and

 

(b)           The pledge, assignment and delivery of the Pledged Collateral pursuant to this Agreement creates a valid first lien and a first perfected security interest in the Pledged

 

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Collateral, subject to no prior pledge, lien, mortgage, hypothecation, security interest, charge, option or encumbrance or to any agreement to grant to any third party a security interest in the Pledged Collateral.

 

8.             Covenant of Pledgor.  Pledgor covenants and agrees that he will defend Lender’s right, title and security interest in and to the Pledged Collateral and the proceeds thereof against the claims of all persons.

 

9.             Default.  In the event that Pledgor fails to perform any of its Obligations or comply with the covenants under the terms of this Agreement or the Note (each such failure, an “Event of Default”), and Pledgor fails to cure such Event of Default after fifteen (15) days written notice by Lender to Pledgor of such Event of Default, Lender shall have the rights and remedies provided in the Uniform Commercial Code in force in the State of Texas.

 

10.           Waivers.  Pledgor assents to any extension or waiver of any obligation of Pledgor secured hereby.  Lender shall have no duty with respect to the preservation or protection of the Pledged Collateral or any income thereof or the preservation or protection of any rights against other parties with respect thereto.  Lender may exercise any rights it may have hereunder against Pledgor or the Pledged Collateral, after having given notice to Pledgor, whether or not it has given any other party any notice or otherwise taken any action against any other party or assets for the enforcement of such rights.

 

No waiver or modification of any of the provisions hereof shall be binding upon Lender unless in writing and signed by a duly authorized representative thereof, and no waiver by Lender of any right it may have hereunder shall be deemed a waiver of any other rights it may have.  All rights and remedies of Lender shall be cumulative and may be exercised singularly or concurrently.

 

11.           Assignment.  Pledgor shall not pledge, assign or otherwise transfer any or all of its rights in the Pledged Collateral, without the prior written consent of Lender.

 

12.           Costs.  Pledgor shall pay all costs, including, without limitation, reasonable attorneys’ fees, incurred by Lender in protecting, enforcing or releasing any of Lender’s rights hereunder.

 

13.           Additional Documents.  Upon the request of Lender, Pledgor will execute and deliver such further documents and take such further action as Lender may reasonably request in order to fully effect the purposes of this Agreement.

 

14.           Notices.  Any notice, demand, instruction or other communication required or permitted to be given hereunder shall be in writing, and shall be given by being delivered by hand or by overnight mail or other overnight delivery service to the addresses set forth herein:

 

	
To   the Pledgor:
    	
 
    	
Behringer   Harvard Opportunity REIT I, Inc.

15601   Dallas Parkway

Suite 600

Addison,   Texas 75001
    

 

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To   the Lender:
    	
 
    	
Behringer   Harvard Holdings, LLC

15601   Dallas Parkway

Suite 600

Addison,   Texas 75001
    

 

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

 

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

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Pledgor and the Lender have caused this Agreement to be executed as of the day and year first above written.

 

 

	
 
    	
PLEDGOR
    
	
 
    	
 
    
	
 
    	
BEHRINGER   HARVARD OPPORTUNITY REIT I, INC., a Maryland corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Kymberlyn   K. Janney
    
	
 
    	
 
    	
Chief   Financial Officer and Treasurer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
LENDER
    
	
 
    	
 
    
	
 
    	
BEHRINGER   HARVARD HOLDINGS, LLC, a Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Gerald   J. Reihsen, III
    
	
 
    	
 
    	
Executive   Vice President — Corporate Development & Legal and Secretary
    

 

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