Document:

EXHIBIT 10.1

 

PROPERTY ACQUISITION AGREEMENT

 

THIS
PROPERTY ACQUISITION AGREEMENT (this “Agreement”) is entered into as
of  March 9, 2006 by and among BEHRINGER
HARVARD OPPORTUNITY REIT I, INC., a Maryland corporation (“Behringer
Harvard Opportunity REIT I”), BEHRINGER HARVARD OPPORTUNITY ADVISORS I LP,
a Texas limited partnership (“Behringer Harvard Opportunity Advisors I”),
BEHRINGER HARVARD STRATEGIC OPPORTUNITY FUND II LP, a Texas limited partnership
(“Behringer Harvard Strategic Fund II”) and BEHRINGER HARVARD STRATEGIC
ADVISORS II LP, a Texas limited partnership (“Behringer Harvard Strategic
Advisors II”).  Behringer Harvard Opportunity REIT I, Behringer
Harvard Opportunity Advisors I, Behringer Harvard Strategic Fund II and
Behringer Harvard Strategic Advisors II are sometimes referred to herein
individually as a “Party” and collectively as the “Parties.”

 

WHEREAS,
each of Behringer Harvard Opportunity REIT I and Behringer Harvard Strategic
Fund II is in the business of, among other things, investing in and operating
real estate or real estate related assets on an opportunistic basis;

 

WHEREAS,
Behringer Harvard Opportunity Advisors I is responsible for managing the
affairs of Behringer Harvard Opportunity REIT I on a day-to-day basis and for
identifying and making acquisitions on behalf of Behringer Harvard Opportunity
REIT I;

 

WHEREAS,
Behringer Harvard Strategic Advisors II is responsible for managing the affairs
of Behringer Harvard Strategic Fund II and for identifying and making
acquisitions and investments on behalf of Behringer Harvard Strategic Fund II;

 

WHEREAS,
several officers, directors, partners and employees of the Parties, and
affiliates of such officers, directors, partners and employees, are affiliates
of some of all of the Parties;

 

WHEREAS,
Behringer Harvard Opportunity REIT I and Behringer Harvard Strategic Fund II
have similar, though not identical, investment objectives and criteria, and
thus, invest in similar opportunities for real estate or real estate related
assets;

 

WHEREAS,
a limited amount of real estate or real estate related assets or other
investment opportunities exists which satisfy the investment objectives and
criteria of Behringer Harvard Opportunity REIT I or Behringer Harvard Strategic
Fund II;

 

WHEREAS,
an investment opportunity may become available for real estate or real estate
related assets or other investment opportunities that are potentially suitable
for both Behringer Harvard Opportunity REIT I and Behringer Harvard Strategic
Fund II, and for which both Behringer Harvard Opportunity REIT I and Behringer
Harvard Strategic Fund II have sufficient uninvested funds (collectively, “Investment
Assets”); and

 

WHEREAS,
Behringer Harvard Strategic Fund II is willing to grant Behringer Harvard
Opportunity REIT I certain rights to acquire Investment Assets identified by either
Behringer Harvard Strategic Advisors II or Behringer Harvard Opportunity
Advisors I.

 

NOW,
THEREFORE, in consideration of the mutual promises and covenants contained
herein, the Parties agree as follows:

 

1.                                      Incorporation of Recitals.  By
this reference, the recitals set forth above are hereby incorporated into this
Agreement as if fully set forth herein.

 

2.                                      Right of Refusal. For and during the term of this Agreement,
and until the occurrence of a Right of First Refusal Termination Event (as
defined below) with respect to a particular Investment Asset, Behringer Harvard
Strategic Fund II hereby grants to Behringer Harvard Opportunity REIT I  an exclusive right of first refusal to
acquire each and every Investment Asset identified by Behringer Harvard
Opportunity Advisors I or Behringer Harvard Strategic Advisors II that may
become available, that is suitable for both Behringer Harvard Opportunity REIT
I and Behringer

 

 

Harvard Strategic Fund II,
and for which both Behringer Harvard Opportunity REIT I and Behringer Harvard
Strategic Fund II have sufficient uninvested funds.

 

3.                                      Negative Covenants. During the pendency of the right granted under Section 2 above, the Parties
hereto covenant and agree that they shall not pursue the acquisition of a
particular Investment Asset other than for Behringer Harvard Opportunity REIT I.
Any conflicts as to the allocation of investments among Behringer Harvard
programs other than specifically provided herein shall be unaffected by this
Agreement and shall be dealt with as provided in the programs’ respective
prospectuses or private placement memoranda..

 

4.                                      Procedures. If a particular Investment
Asset is identified as one Behringer Harvard Opportunity REIT I may wish to
acquire, it may do so without any further procedural requirements hereunder;
provided, however, Behringer Harvard Opportunity REIT I shall provide prompt notice
to Behringer Harvard Strategic Advisors II and Behringer Harvard Strategic Fund
II if it determines not to proceed with the acquisition of such Investment
Asset, in which event Behringer Harvard Strategic Fund II may acquire such Investment
Asset .

 

Other than as provided in the preceding sentence,
Behringer Harvard Strategic Fund II may not acquire any Investment Asset if at
that time Behringer
Harvard Opportunity REIT I has sufficient uninvested funds to acquire such Investment Asset and a Right
of First Refusal Termination Event has
not yet occurred in respect of such Investment Asset. In order to seek a Right
of First Refusal Termination Event in respect of such Investment Asset, Behringer Harvard Strategic Advisors II (or
one of its affiliates) shall deliver written notice to the Board of Directors
of Behringer Harvard Opportunity REIT I (the “Board”) in substantially
the form attached hereto as Exhibit A (each an “Acquisition
Notice”). The Board shall have ten (10) business days after the date
of its receipt of an Acquisition Notice (the “Notice Period”) to inform Behringer
Harvard Strategic Advisors II and Behringer Harvard Strategic Fund II in
writing (an “Election Notice”) whether Behringer Harvard Opportunity
REIT I desires to acquire the subject Investment Asset. Upon the occurrence of
a Right of First Refusal Termination Event (as defined below) with respect to
the subject Investment Asset, Behringer Harvard Opportunity REIT I shall be
deemed to have waived any and all rights to acquire the subject Investment
Asset, including any corporate opportunity with respect thereto.

 

Behringer Harvard Opportunity REIT I’s election,
whether in response to, or at any time after, its receipt of an Acquisition
Notice, not to pursue the acquisition of a particular Investment Asset shall
not affect or impair any of Behringer Harvard Opportunity REIT I’s rights set
forth in this Agreement with respect to any other Investment Asset.

 

For the purposes hereof, the term “Right of First
Refusal Termination Event” means the first to occur of: (i) Behringer
Harvard Opportunity REIT I’s failure to deliver to Behringer Harvard Strategic
Advisors II and Behringer Harvard Strategic Fund II an Election Notice with
respect to the subject Investment Asset prior to the expiration of the Notice
Period; (ii) delivery by Behringer Harvard Opportunity REIT I of an
Election Notice with respect to the subject Investment Asset providing that
Behringer Harvard Opportunity REIT I has elects not to acquire the subject Investment
Asset (delivery of such notice shall be made only if both a majority of the
independent directors of Behringer Harvard Opportunity REIT I and a majority of
the entire Board shall elect not to acquire the subject Investment Asset); and (iii) delivery
by Behringer Harvard Opportunity REIT I of a Property Termination Notice.

 

5.                                      No Partnership or Joint
Venture.  The
Parties to this Agreement are independent contractors.  Nothing in this
Agreement is intended or shall be deemed to constitute a partnership, agency,
franchise or joint venture relationship between the Parties.

 

6.                                      Term.  This term of this Agreement shall
commence on the date hereof and shall continue until the date that none of the
officers, directors, partners and employees of the Parties, and affiliates of
such officers, directors, partners and employees are affiliates of some or all
of the Parties.

 

7.                                      Assignments.  This Agreement may not be assigned
except with the written consent of each Party hereto, except in the case of an
assignment by a Party to a corporation, trust or other organization which is a
successor to such Party.  Any assignment of this Agreement shall bind the
assignee hereunder in the same manner as the assignor is bound hereunder.

 

8.                                      Amendments.  This Agreement shall not be amended,
changed, modified, terminated or discharged in whole or in part except by an
instrument in writing signed by each Party hereto or its respective successors
or assigns.

 

2

 

9.                                      Successors and Assigns.  This Agreement shall bind any
successors or assigns of the Parties hereto as herein provided.

 

10.                               Governing Law.  The provisions of this Agreement
shall be governed, construed and interpreted in accordance with the internal
laws of the State of Texas without regard to its conflicts of law principles.

 

11.                               Notices.  All notices or other communications
required or permitted hereunder shall be in writing and shall be deemed given
or delivered:  (i) when delivered personally or by commercial
messenger; (ii) one business day following deposit with a recognized
overnight courier service, provided the deposit occurs prior to the deadline
imposed by the overnight courier service for overnight delivery; (iii) when
transmitted, if sent by facsimile copy, provided confirmation of receipt is
received by sender and is sent by an additional method provided hereunder, in
each case above provided the notice of communication is addressed to the
intended recipient thereof as set forth below:

 

If to Behringer Harvard Opportunity REIT I, Inc.:

15601
Dallas Parkway, Suite 600

Addison,
Texas 75001

Facsimile:  (214) 655-1610

 

If to Behringer Harvard Opportunity Advisors I LP:

15601
Dallas Parkway, Suite 600

Addison,
Texas 75001

Facsimile:  (214) 655-1610

 

If to Behringer Harvard Strategic Opportunity Fund II LP:

15601
Dallas Parkway, Suite 600

Addison,
Texas 75001

Facsimile:  (214) 655-1610

 

If to Behringer Harvard Strategic Advisors II LP:

15601
Dallas Parkway, Suite 600

Addison,
Texas 75001

Facsimile:  (214) 655-1610

 

Any
Party may at any time give notice in writing to all other Parties of a change
of its address for the purpose of this Section 12.

 

12.                               Headings.  The section headings hereof have
been inserted for convenience of reference only and shall not be construed to
affect the meaning, construction or effect of this Agreement.

 

13.                               Equitable Relief. Each Party hereto recognizes and
acknowledges that a breach by another Party of this Agreement will cause
irreparable damage to the non-breaching Party which cannot be readily remedied
in monetary damages in an action at law.  In the event of any default or
breach by any Party, the non-breaching Parties shall be entitled to seek
immediate injunctive relief to prevent such irreparable harm or loss, in
addition to any other remedies available at law and in equity.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]

 

3

 

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

 

	
   

  	
  BEHRINGER HARVARD OPPORTUNITY REIT I, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President –
  Corporate Development & Legal

  and Secretary 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER
  HARVARD OPPORTUNITY ADVISORS I LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Harvard Property Trust,
  LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
  Gerald
  J. Reihsen, III

  
	
   

  	
   

  	
   

  	
  Executive Vice President –
  Corporate Development & Legal

  and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD STRATEGIC OPPORTUNITY FUND II

  LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Behringer Harvard Strategic Advisors II LP,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Harvard Property Trust,
  LLC

  
	
   

  	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President –
  Corporate Development &

  Legal and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD STRATEGIC ADVISORS II LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Harvard Property Trust, LLC

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
  Executive Vice President –
  Corporate Development & Legal and Secretary

  

 

4

 

EXHIBIT A

FORM OF
ACQUISITION NOTICE

 

ACQUISITION NOTICE

 

[NAME OF SUBJECT INVESTMENT
ASSET]

[GENERAL LOCATION]

[CITY, STATE]

[DATE OF ACQUISITION NOTICE]

 

Behringer Harvard
Opportunity REIT I, Inc.

15601 Dallas Parkway, Suite 600

Addison, Texas 75001

Attention:  Board of Directors

 

Reference
is made to that certain Property Acquisition Agreement, dated as of March 9,
2006 (the “Agreement”), by and among Behringer Harvard Opportunity REIT
I, Inc., a Maryland corporation (“Behringer Harvard Opportunity REIT I”),
Behringer Harvard Opportunity Advisors I LP, a Texas limited partnership (“Behringer
Harvard Opportunity Advisors I”), Behringer Harvard Strategic Opportunity
Fund II LP, a Texas limited partnership (“Behringer Harvard Strategic Fund
II”) and Behringer Harvard Strategic Advisors II LP, a Texas limited partnership
(“Behringer Harvard Strategic Advisors II”).  Capitalized terms
used in this Acquisition Notice but not defined herein shall have the meanings
ascribed to such terms in the Agreement.

 

Pursuant
to Section 2 of the Agreement, Behringer Harvard Strategic Advisors
II has identified the following Investment Asset: [DESCRIBE INVESTMENT ASSET].

 

Attached
hereto for your review is the preliminary investment package for the subject Investment
Asset.

 

This
letter constitutes the Acquisition Notice under and pursuant to the Agreement
with respect to the subject Investment Asset.

 

Please
direct all correspondence with respect to the subject Investment Asset to Behringer
Harvard Strategic Advisors II as follows:

 

Behringer
Harvard Strategic Advisors II LP

15601
Dallas Parkway, Suite 600

Addison,
Texas 75001

Attention:  Chief Legal Officer

Telephone:  (214) 655-1600

Facsimile:  (214) 655-1610

 

Sincerely,

 

	
  BEHRINGER HARVARD
  STRATEGIC ADVISORS II LP

  
	
   

  
	
   

  
	
  By:

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  
					

 

A-1EXHIBIT 10.2

 

AMENDED AND
RESTATED

PROPERTY MANAGEMENT AND LEASING AGREEMENT

 

This AMENDED AND RESTATED PROPERTY MANAGEMENT AND LEASING AGREEMENT
(this “Management Agreement”) is made and entered into as of the 9th day of
March, 2006, by and among BEHRINGER HARVARD OPPORTUNITY REIT I, INC., a
Maryland corporation (“BH OPPORTUNITY REIT”), BEHRINGER HARVARD OPPORTUNITY OP
I, LP, a Texas limited partnership (“BH OPPORTUNITY LP”), and HPT MANAGEMENT
SERVICES LP, Texas limited partnership (the “Manager”).

 

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

 

WHEREAS, BH OPPORTUNITY LP and BH OPPORTUNITY REIT and Manager
previously entered into that certain Property Management and Leasing Agreement
dated September 20, 2005 (the “Original Management Agreement”); and

 

WHEREAS, BH OPPORTUNITY REIT intends to continue to raise money from
the sale of its common stock to be used, net of payment of certain offering
costs and expenses, for investment in the acquisition or construction of
income-producing real estate and other real estate-related investments
(including the making or purchase of mortgage loans), some or all of which are
to be acquired and held by Owner (as hereinafter defined) on behalf of BH
OPPORTUNITY REIT; and

 

WHEREAS, Owner intends to continue to retain Manager to manage and
coordinate the leasing of certain of the real estate properties acquired by
Owner under the terms and conditions set forth in this Management Agreement;
and

 

WHEREAS, the parties desire to amend and restate the Original
Management Agreement in its entirety in accordance with the terms and
provisions hereof;

 

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

 

ARTICLE I

 

DEFINITIONS

 

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

 

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

 

1.2                                 “Gross Revenues” means all amounts actually
collected as rents or other charges for the use and occupancy of the
Properties, but shall exclude interest and other investment income of Owner and
proceeds received by Owner for a sale, exchange, condemnation, eminent domain
taking, casualty or other disposition of assets of Owner.

 

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

 

 

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

 

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

 

1.6                                 “Management Fees” has
the meaning set forth in Section 5.1 hereof.

 

1.7                                 “Owner” means BH
OPPORTUNITY REIT, BH OPPORTUNITY LP and any joint venture, limited liability
company or other Affiliate of BH OPPORTUNITY REIT or BH OPPORTUNITY LP that
owns, in whole or in part, on behalf of BH OPPORTUNITY REIT, any Properties.

 

1.8                                 “Person” means an
individual, corporation, association, business trust, estate, trust,
partnership, limited liability company or other legal entity.

 

1.9                                 “Properties” means all
real estate properties owned by Owner and all tracts as yet unspecified but to
be acquired by Owner containing income-producing improvements or on which Owner
will construct income-producing improvements.

 

1.10                           “Proprietary Properties”
means all modeling algorithms, tools, computer programs, know-how,
methodologies, processes, technologies, ideas, concepts, skills, routines,
subroutines, operating instructions and other materials and aides used in
performing the duties set forth in Article 2 that relate to management
advice, services and techniques regarding current and potential Properties, and
all modifications, enhancements and derivative works of the foregoing.

 

ARTICLE II

 

APPOINTMENT OF MANAGER;
SERVICES TO BE PERFORMED

 

2.1                                 Appointment of
Manager. Owner hereby engages and retains Manager as the manager and as
tenant coordinating agent of the Properties, and Manager hereby accepts such
appointment on the terms and conditions hereinafter set forth; it being
understood that this Management Agreement shall cause Manager to be, at law,
Owner’s agent upon the terms contained herein.

 

2.2                                 General Duties.
Manager shall devote its best efforts to performing its duties hereunder to
manage, operate, maintain and lease the Properties in a diligent, careful and
vigilant manner. The services of Manager are to be of scope and quality not
less than those generally performed by professional property managers of other
similar properties in the area. Manager shall make available to Owner the full
benefit of the judgment, experience and advice of the members of Manager’s
organization and staff with respect to the policies to be pursued by Owner
relating to the operation and leasing of the Properties.

 

2.3                                 Specific Duties.
Manager’s duties include the following:

 

(a)                                  Lease
Obligations. Manager shall perform all duties of the landlord
under all Leases insofar as such duties relate to operation, maintenance, and
day-to-day management. Manager shall also provide or cause to be provided, at
Owner’s expense, all services normally provided to tenants of like premises,
including where applicable and without limitation, gas, electricity or other
utilities required to be furnished to tenants under Leases, normal repairs and
maintenance, and cleaning, and janitorial service. Manager shall arrange for
and supervise the performance of all installations and improvements in space
leased to any tenant that are either expressly required under the terms of the
lease of such space or that are customarily provided to tenants.

 

(b)                                 Maintenance. Manager shall
cause the Properties to be maintained in the same manner as similar properties
in the area. Manager’s duties and supervision in this respect shall include,
without

 

2

 

limitation, cleaning of the interior and the
exterior of the Improvements and the public common areas on the Properties and
the making and supervision of repair, alterations, and decoration of the
Improvements, subject to and in strict compliance with this Management
Agreement and the Leases. Construction activities undertaken by Manager, if
any, will be limited to activities related to the management, operation,
maintenance, and leasing of the Property (e.g., repairs, renovations, and
leasehold improvements).

 

(c)                                  Leasing
Functions. Manager shall coordinate the leasing of the
Properties and shall negotiate and use its best efforts to secure executed
Leases from qualified tenants, and to execute same on behalf of Owner, if
requested, for available space in the Properties, such Leases to be in form and
on terms approved by Owner and Manager, and to bring about complete leasing of
the Properties. Manager shall be responsible for the hiring of all leasing
agents, as necessary for the leasing of the Properties, and to otherwise
oversee and manage the leasing process on behalf of Owner.

 

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

 

(e)                                  Personnel. Any personnel
hired by Manager to maintain, operate and lease the Property shall be the
employees or independent contractors of Manager and not of Owner of such
Property, BH OPPORTUNITY LP or BH OPPORTUNITY REIT. Manager shall use due care
in the selection and supervision of such employees or independent contractors.
Manager shall be responsible for the preparation of and shall timely file all
payroll tax reports and timely make payments of all withholding and other
payroll taxes with respect to each employee.

 

(f)                                    Utilities and
Supplies. Manager shall enter into or renew contracts for
electricity, gas, steam, landscaping, fuel, oil, maintenance and other services
as are customarily furnished or rendered in connection with the operation of
similar rental property in the area.

 

(g)                                 Expenses. Manager shall
analyze all bills received for services, work and supplies in connection with
maintaining and operating the Properties, pay all such bills when due, and, if
requested by Owner, pay, when due, utility and water charges, sewer rent and
assessments, and any other amount payable in respect to the Properties. All
bills shall be paid by Manager within the time required to obtain discounts, if
any. Owner may from time to time request that Manager forward certain bills to
Owner promptly after receipt, and Manager shall comply with any such request.
Manager shall pay all bills, assessments, real property taxes, insurance
premiums and any other amount payable in respect to the Properties out of the
Account (as hereinafter defined). All expenses shall be billed at net cost (i.e., less all rebates, commissions, discounts and
allowances, however designed).

 

(h)                                 Monies
Collected. Manager shall timely collect all rent and other
monies, in the form of a check or money order, from tenants and any sums
otherwise due Owner with respect to the Properties in the ordinary course of
business. Owner authorizes Manager to request, demand, collect and provide
receipt for all such rent and other monies and to institute legal proceedings
in the name of Owner for the collection thereof and for the dispossession of
any tenant in default under its Lease.

 

(i)                                     Banking
Accommodations. Manager shall establish and maintain a separate
checking account (the “Account”) for funds relating to the Properties. All
monies deposited from time to time in the Account shall be deemed to be trust
funds and shall be and remain the property of Owner and shall be withdrawn and
disbursed by Manager for the account of Owner only as expressly permitted by
this Management Agreement for the purposes of performing the obligations of
Manager hereunder. No monies collected by Manager on Owner’s behalf shall be
commingled with funds of Manager. The Account shall be maintained, and monies
shall be deposited therein and withdrawn therefrom, in accordance with the
following:

 

(i)             All sums received from rents and other income from the
Properties shall be promptly deposited by Manager in the Account. Manager shall
have the right to designate two or more persons who shall be authorized to draw
against the Account, but only for purposes authorized by this Management
Agreement.

 

3

 

(ii)          All sums due to Manager
hereunder, whether for compensation, reimbursement for expenditures, or
otherwise, as herein provided, shall be a charge against the operating revenues
of the Properties and shall be paid and/or withdrawn by Manager from the
Account prior to the making of any other disbursements therefrom.

 

(iii)       By the 15th day
after the end of each month, Manager shall forward to Owner all monies
contained in the Account other than a reserve of $5,000 and any other amounts
otherwise provided in the budget, which shall remain in the Account.

 

(j)                                     Ownership
Agreements. Manager has received copies of (and will be
provided with copies of future) Articles of Incorporation, Agreements of
Limited Partnership, Joint Venture Partnership Agreements and Operating
Agreements, each as may be amended from time to time, of Owner, as applicable
(the “Ownership Agreements”) and is familiar with the terms thereof. Manager
shall use reasonable care to avoid any act or omission that, in the performance
of its duties hereunder, shall in any way conflict with the terms of Ownership
Agreements.

 

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

 

2.4                                 Approval of Leases,
Contracts, Etc. In fulfilling its duties to Owner, Manager may and hereby
is authorized to enter into any leases, contracts or agreements on behalf of
Owner in the ordinary course of the management, operation, maintenance and
leasing of the Property.

 

2.5                                 Accounting, Records
and Reports.

 

(a)                                  Records. Manager shall
maintain all office records and books of account and shall record therein, and
keep copies of, each invoice received from services, work and supplies ordered
in connection with the maintenance and operation of the Properties. Such
records shall be maintained on a double entry basis. Owner and persons
designated by Owner shall at all reasonable time have access to and the right
to audit and make independent examinations of such records, books and accounts
and all vouchers, files and all other material pertaining to the Properties and
this Management Agreement, all of which Manager agrees to keep safe, available
and separate from any records not pertaining to the Properties, at a place
recommended by Manager and approved by Owner.

 

(b)                                 Monthly Reports. On or before
the 15th day after the end of each month during the term of this
Management Agreement, Manager shall prepare and submit to Owner the following
reports and statements:

 

(i)             rental collection record;

 

(ii)          monthly operating statement;

 

(iii)       copy of cash disbursements ledger entries for such
period, if requested;

 

(iv)      copy of cash receipts ledger entries for such
period, if requested;

 

(v)         the original copies of all contracts entered into by
Manager on behalf of Owner during such period, if requested; and

 

(vi)      copy of ledger entries for such period relating to
security deposits maintained by Manager, if requested.

 

(c)                                  Budgets and
Leasing Plans. Not later than November 15 of each calendar
year, Manager shall prepare and submit to Owner for its approval an operating
budget and a marketing and leasing plan on each Property for the calendar year
immediately following such submission. In connection with any acquisition of a
Property by Owner, Manager shall prepare a budget and marketing and leasing
plan for the remainder of the calendar year. The budget and marketing and
leasing plan shall be in the form of the

 

4

 

budget and plan approved by Owner prior to the date
thereof. As often as reasonably necessary during the period covered by any such
budget, Manager may submit to Owner for its approval an updated budget or plan
incorporating such changes as shall be necessary to reflect cost over-runs and
the like during such period. If Owner does not disapprove any such budget
within 30 days after receipt thereof by Owner, such budget shall be deemed
approved. If Owner shall disapprove any such budget or plan, it shall so notify
Manager within said 30-day period and explain the reasons therefor. If Owner
disapproves of any budget or plan, Manager shall submit a revised budget or
plan, as applicable, within 10 (ten) days of receipt of the notice of
disapproval, and Owner shall have 10 (ten) days to provide notice to Manager if
it disapproves of any such revised budget or plan. Manager will not incur any
costs other than those estimated in any budget except for:

 

(i)             tenant improvements and real
estate commissions required under a Lease;

 

(ii)          maintenance or repair costs
under $5,000 per Property;

 

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

 

(iv)      expenditures for real estate
taxes and assessment; and

 

(v)         maintenance supplies calling
for an aggregate purchase price less than $25,000 per annum for all Properties.

 

Budgets prepared by Manager shall be for planning
and informational purposes only, and Manager shall have no liability to Owner
for any failure to meet any such budget. However, Manager will use its best
efforts to operate within the approved budget.

 

(d)                                 Legal
Requirements. Manager shall execute and file when due all forms,
reports, and returns required by law relating to the employment of its
personnel. Manager shall be responsible for notifying Owner in the event it
receives notice that any Improvement on a Property or any equipment therein
does not comply with the requirements of any statute, ordinance, law or
regulation of any governmental body or of any public authority or official
thereof having or claiming to have jurisdiction thereover. Manager shall
promptly forward to Owner any complaints, warnings, notices or summonses
received by it relating to such matters. Owner represents that to the best of
its knowledge each of its Properties and any equipment thereon will upon
acquisition by Owner comply with all such requirements. Owner authorizes
Manager to disclose the ownership of the Property by Owner to any such
officials. Owner agrees to indemnify, protect, defend, save and hold Manager
and its stockholders, officers, directors, employees, managers, successors and
assigns (collectively, the “Indemnified Parties”) harmless of and from any and
all Losses (as defined in Section 3.5(a) hereof) that may be imposed
on them or any or all of them by reason of the failure of Owner to correct any
present or future violation or alleged violation of any and all present or
future laws, ordinances, statutes, or regulations of any public authority or
official thereof, having or claiming to have jurisdiction thereover, of which
it has actual notice.

 

2.6                                 Guaranty of
Deposits. Should Owner acquire real property from Behringer Development
Company LP, a Texas limited partnership (“Behringer Development”), Manager
hereby guarantees the full, prompt and unconditional refund of any earnest
money deposit paid by Owner to Behringer Development should Owner be entitled
to such refund as a result of (i) the failure of Behringer Development to
develop the property, (ii) the failure of all or a specified portion of
the pre-leased tenants to take possession under their leases for any reason, or
(iii) the inability of Owner to pay the full purchase price at closing.

 

ARTICLE III

 

AUTHORITY GRANTED TO
MANAGER AND CERTAIN OWNER OBLIGATIONS

 

3.1                                 Authority As To Tenants, Etc.
Owner agrees and does hereby give Manager the following exclusive authority and
powers (all of which shall be exercised either in the name of Manager, as
Manager for

 

5

 

Owner, or in the name or Owner entered into by Manager as Owner’s
authorized agent, and Owner shall assume all expenses in connection with such
matters):

 

(a)                                  to advertise
each Property or any part thereof and to display signs thereon, as permitted by
law;

 

(b)                                 to lease the
Properties to tenants;

 

(c)                                  to pay all
expenses of leasing such Property, including but not limited to, newspaper and
other advertising, signage, banners, brochures, referral commissions, leasing
commissions, finder’s fees and salaries, bonuses and other compensation of
leasing personnel responsible for the leasing of the Property;

 

(d)                                 to cause
references of prospective tenants to be investigated, it being understood and
agreed by the parties hereto that Manager does not guarantee the
creditworthiness or collectibility of accounts receivable from tenants, users
or lessees; and to negotiate new Leases and renewals and cancellations of
existing Leases that shall be subject to Manager obtaining Owner’s approval;

 

(e)                                  to collect from
tenants all or any of the following: a late rent administrative charge, a
non-negotiable check charge, credit report fee, a subleasing administrative
charge and/or broker’s commission; and Manager need not account for such
charges and/or commission to Owner;

 

(f)                                    to terminate
tenancies and to sign and serve in the name of Owner of each Property such
notices as are deemed necessary by Manager;

 

(i)             to institute and prosecute
actions to evict tenants and to recover possession of the Property or portions
thereof;

 

(ii)          with Owner’s authorization,
to sue for and in the name of Owner and recover rent and other sums due; and to
settle, compromise, and release such actions or suits, or reinstate such
tenancies. All expenses of litigation including, but not limited to, attorneys’
fees, filing fees, and court costs that Manager shall incur in connection with
the collecting of rent and other sums, or to recover possession of any Property
or any portion thereof, shall be deemed to be an operational expense of the
Property. Manager and Owner shall concur on the selection of the attorneys to
handle such litigation.

 

3.2                                 Operational
Authority. Owner agrees and does hereby give Manager the following
exclusive authority and powers (all of which shall be exercised either in the
name of Manager, as Manager for Owner, or in the name or Owner entered into by
Manager as Owner’s authorized agent, and Owner shall assume all expenses in
connection with such matters):

 

(a)                                  to hire,
supervise, discharge, and pay all labor required for the operation and
maintenance of each Property including but not limited to on-site personnel,
managers, assistant managers, leasing consultants, engineers, janitors,
maintenance supervisors and other employees required for the operation and
maintenance of the Property, including personnel spending a portion of their
working hours (to be charged on a pro rata basis) at the Property. All expenses
of such employment shall be deemed operational expenses of the Property.

 

(b)                                 to make or
cause to be made all ordinary repairs and replacements necessary to preserve
each Property in its present condition and for the operating efficiency thereof
and all alterations required to comply with lease requirements, and to decorate
the Property;

 

(c)                                  to negotiate
and enter into, as Manager of the Property, contracts for all items on budgets
that have been approved by Owner, any emergency services or repairs for items
not exceeding $5,000, appropriate service agreements and labor agreements for
normal operation of the Property, which have terms not to exceed three years,
and agreements for all budgeted maintenance, minor alterations, and utility
services, including, but not limited to, electricity, gas, fuel, water, telephone,
window washing, scavenger service, landscaping, snow removal, pest
exterminating, decorating and legal services in connection with

 

6

 

the Leases and service agreements relating to the
Property, and other services or such of them as Manager may consider
appropriate; and

 

(d)                                 to purchase
supplies and pay all bills.

 

Manager shall use its best efforts to obtain the foregoing services and
utilities for the Property under terms that are as cost-effective and otherwise
favorable to Manager as possible for the quality of services and utilities
required. Owner hereby appoints Manager as Owner’s authorized Manager for the
purpose of executing, as Manager for said Owner, all such contracts. In
addition, Owner agrees to specifically assume in writing all obligations under
all such contracts so entered into by Manager, on behalf of Owner of the
Property, upon the termination of this Agreement, and Owner shall indemnify,
protect, save, defend and hold Manager and the other Indemnified Parties
harmless from and against any and all Losses resulting from, arising out of or
in any way related to such contracts and that relate to or concern matters
occurring after termination of this Agreement, but excluding matters arising out
of Manager’s willful misconduct, gross negligence and/or unlawful acts. Manager
shall secure the approval of, and execution of appropriate contracts by, Owner
for any non-budgeted and non-emergency/contingency capital items, alterations
or other expenditures in excess of $5,000 for any one item, securing for each
item at least three written bids, if practicable, or providing evidence
satisfactory to Owner that the contract amount is lower than industry standard
pricing, from responsible contractors. Manager shall have the right from time
to time during the term hereof, to contract with and make purchases from
Affiliates of Manager, provided that contract rates and prices are competitive
with other available sources. Manager may at any time and from time to time
request and receive the prior written authorization of Owner of the Property of
any one or more purchases or other expenditures, notwithstanding that Manager
may otherwise be authorized hereunder to make such purchases or expenditures.

 

3.3                                 Rent and Other
Collections. Owner agrees and does hereby give Manager the exclusive
authority and powers (all of which shall be exercised either in the name of
Manager, as Manager for Owner, or in the name or Owner entered into by Manager
as Owner’s authorized agent, and Owner shall assume all expenses in connection
with such matters) to collect rents and/or assessments and other items,
including but not limited to tenant payments for real estate taxes, property
liability and other insurance, damages and repairs, common area maintenance,
tax reduction fees and all other tenant reimbursements, administrative charges,
proceeds of rental interruption insurance, parking fees, income from coin
operated machines and other miscellaneous income, due or to become due and give
receipts therefor and to deposit all such Gross Revenue collected hereunder in
the Account. Manager may endorse any and all checks received in connection with
the operation of any Property and drawn to the order of Owner, and Owner shall,
upon request, furnish Manager’s depository with an appropriate authorization
for Manager to make such endorsement. Manager shall also have the exclusive
authority to collect and handle tenants’ security deposits, including the right
to apply such security deposits to unpaid rent, and to comply, on behalf of
Owner of the Property, with applicable state or local laws concerning security
deposits and interest thereon, if any. Manager shall not be required to advance
any monies for the care or management of any Property. Owner agrees to advance
all monies necessary therefor. If Manager shall elect to advance any money in
connection with a Property, Owner agrees to reimburse Manager forthwith and
hereby authorizes Manager to deduct such advances from any monies due Owner. In
connection with any insured losses or damages relating to any Property, Manager
shall have the exclusive authority to handle all steps necessary regarding any
such claim; provided that Manager will not make any adjustments or settlements
in excess of $10,000 without Owner’s prior written consent.

 

3.4                                 Payment of Expenses.
Owner agrees and does hereby give Manager the exclusive authority and power
(all of which shall be exercised either in the name of Manager, as Manager for
Owner, or in the name or Owner entered into by Manager as Owner’s authorized
agent, and Owner shall assume all expenses in connection with such matters) to
pay all expenses of the Property from the Gross Revenue collected in accordance
with Section 3.3 above, from the Account. It is understood that the Gross
Revenue will be used first to pay the compensation to Manager as contained in Article 5
below, then operational expenses and then any mortgage indebtedness, including
real estate tax and insurance impounds, but only as directed by Owner in
writing and only if sufficient Gross Revenue is available for such payments.
Nothing in this Agreement shall be interpreted in such a manner as to obligate
Manager to pay from Gross Revenue, any expenses incurred by Owner prior to the
commencement of this Agreement, except to the extent Owner advances additional
funds to pay such expenses.

 

3.5                                 Certain Owner
Indemnification Obligations.

 

(a)                                  On Termination. In the event
this Agreement is terminated for any reason prior to the expiration of its
original term or any renewal term, Owner shall indemnify, protect, defend, save
and hold

 

7

 

Manager and all of the other Indemnified Parties
harmless from and against any and all claims, causes of action, demands, suits,
proceedings, loss, judgments, damage, awards, liens, fines, costs, attorney’s
fees and expenses, of every kind and nature whatsoever (collectively, “Losses”),
that may be imposed on or incurred by Manager by reason of the willful
misconduct, gross negligence and/or unlawful acts (such unlawfulness having
been adjudicated by a court of proper jurisdiction) of Owner.

 

(b)                                 Property
Damage, Etc. Owner agrees to indemnify, defend, protect, save
and hold Manager and all of the other Indemnified Parties harmless from any and
all Losses in connection with or in any way related to the Property and from
liability for damage to the Property and injuries to or death of any person
whomsoever, and damage to property; provided, however, that such
indemnification shall not extend to any such Losses arising out of the willful
misconduct, gross negligence and/or unlawful acts (such unlawfulness having
been adjudicated by a court of proper jurisdiction) of Manager or any of the
other Indemnified Parties. Manager shall not be liable for any error of
judgment or for any mistake of fact or law, or for any thing that it may do or
refrain from doing, except in cases of willful misconduct, gross negligence
and/or unlawful acts (such unlawfulness having been adjudicated by a court of
proper jurisdiction).

 

3.6                                 Environmental
Matters. Owner hereby warrants and represents to Manager that to the best
of Owner’s knowledge, no Property, upon acquisition by Owner, nor any part
thereof, will be used to treat, deposit, store, dispose of or place any
hazardous substance that may subject Manager to liability or claims under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(42 U.S.C.A. Section 9607) or any constitutional provision, statute,
ordinance, law, or regulation of any governmental body or of any order or
ruling of any public authority or official thereof, having or claiming to have
jurisdiction thereover. Furthermore, Owner agrees to indemnify, protect,
defend, save and hold Manager and all of the other Indemnified Parties from any
and all Losses involving, concerning or in any way related to any past, current
or future allegations regarding treatment, depositing, storage, disposal or
placement by any party other than Manager of hazardous substances on the
Property.

 

3.7                                 Legal Status of
Properties. Owner represents that to the best of its knowledge each
Property and any equipment thereon, when acquired by Owner, will comply with
all legal requirements and authorizes Manager to disclose the identity of the Owner
of the Property to any such officials and agrees to indemnify, protect, defend,
save and hold Manager and the other Indemnified Parties harmless of and from
any and all Losses that may be imposed on them or any of them by reason of the
failure of Owner to correct any present or future violation or alleged
violation of any and all present or future laws, ordinances, statutes, or
regulations of any public authority or official thereof, having or claiming to
have jurisdiction thereover, of which it has actual notice. In the event it is
alleged or charged that any Improvement or any equipment on a Property or any
act or failure to act by Owner with respect to the Property or the sale,
rental, or other disposition thereof fails to comply with, or is in violation
of, any of the requirements of any constitutional provision, statute,
ordinance, law, or regulation of any governmental body or any order or ruling
of any public authority or official thereof having or claiming to have
jurisdiction thereover, and Manager, in its sole and absolute discretion,
considers that the action or position of Owner, with respect thereto may result
in damage or liability to Manager, Manager shall have the right to cancel this
Agreement at any time by written notice to Owner of its election so to do,
which cancellation shall be effective upon the service of such notice. Such
cancellation shall not release the indemnities of Owner set forth in this
Agreement and shall not terminate any liability or obligation of Owner to
Manager for any payment, reimbursement, or other sum of money then due and
payable to Manager hereunder.

 

3.8                                 Extraordinary
Payments. Owner agrees to give adequate advance written notice to Manager
if Owner desires that Manager make any extraordinary payment, out of Gross
Revenue, to the extent funds are available after the payment of Manager’s
compensation as provided for herein and all operational expenses, of mortgage
indebtedness, general taxes, special assessments, or fire, boiler or any other
insurance premiums.

 

ARTICLE IV

 

EXPENSES

 

4.1                                 Owner’s Expenses. Except as
otherwise specifically provided, all costs and expenses incurred hereunder by
Manager in fulfilling its duties to Owner shall be for the account of and on
behalf of Owner. Such costs and expenses shall include the wages and salaries
and other employee-related expenses of all on-site and off-

 

8

 

site employees of Manager who are engaged in the operation, management,
maintenance and leasing or access control of the Properties, including taxes,
insurance and benefits relating to such employees, and legal, travel and other
out-of-pocket expenses that are directly related to the management of specific
Properties. All costs and expenses for which Owner is responsible under this
Management Agreement shall be paid by Manager out of the Account. In the event
the Account does not contain sufficient funds to pay all said expenses, Owner
shall fund all sums necessary to meet such additional costs and expenses.

 

4.2                                 Manager’s Expenses.
Manager shall, out of its own funds, pay all of its general overhead and
administrative expenses.

 

ARTICLE V

 

MANAGER’S COMPENSATION

 

5.1                                 Management Fees.
Commencing on the date hereof, Owner shall pay Manager property management and
leasing fees in an amount equal to four and one-half percent (4.5%) of Gross
Revenues (the “Management Fees”) on a monthly basis from the rental income
received from the Properties over the term of this Management Agreement. In the
event that Owner contracts directly with a non-affiliated third-party property
manager in respect of a Property, Owner shall pay Manager an oversight fee
equal to one percent (1%) of Gross Revenues of such Property to compensate
Manager for transition services to coordinate and align the systems and
policies of the third-party property manager with those of Manager. Manager’s
compensation under this Section 5.1 shall apply to all renewals,
extensions or expansions of Leases that Manager has originally negotiated. In
the event Manager assists with planning and coordinating the construction of
any tenant-paid finish-out or improvements, Manager shall be entitled to
receive from any such tenant an amount equal to not greater than five percent
(5.0%) of the cost of such tenant improvements.

 

5.2                                 Leasing Fees.
In addition to the compensation paid to Manager under Section 5.1 above,
Manager shall be entitled to receive a separate fee for the Leases of new
tenants and renewals of Leases with existing tenants in an amount not to exceed
the fee customarily charged in arm’s length transactions by others rendering
similar services in the same geographic area for similar properties as
determined by a survey of brokers and agents in such area.

 

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

 

ARTICLE VI

 

INSURANCE AND
INDEMNIFICATION

 

6.1                                 Insurance to be
Carried.

 

(a)                                  Manager shall
obtain and keep in full force and effect insurance on the Properties against
such hazards as Owner and Manager shall deem appropriate, but in any event
insurance sufficient to comply with the Leases and Ownership Agreements shall
be maintained. All liability policies shall provide sufficient insurance
satisfactory to both Owner and Manager and shall contain waivers of subrogation
for the benefit of Manager.

 

(b)                                 Manager shall
obtain and keep in full force and effect, in accordance with the laws of the
state in which each Property is located, employer’s liability insurance
applicable to and covering all employees of Manager at the Properties and all
persons engaged in the performance of any work required hereunder, and Manager
shall furnish Owner certificates of insurers naming Owner as a co-insured and
evidencing that such insurance is in effect. If any work under this Management
Agreement is subcontracted as permitted herein, Manager shall include in each
subcontract a provision that the subcontractor shall also furnish Owner with
such a certificate.

 

9

 

6.2                                 Insurance Expenses.
Premiums and other expenses of such insurance, as well as any applicable
payments in respect of deductibles shall be borne by Owner.

 

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

 

6.4                                 Accidents and
Claims. Manager shall promptly investigate and shall report in detail to
Owner all accidents, claims for damage relating to Ownership, operation or
maintenance of the Properties, and any damage or destruction to the Properties
and the estimated costs of repair thereof, and shall prepare for approval by
Owner all reports required by an insurance company in connection with any such
accident, claim, damage, or destruction. Such reports shall be given to Owner
promptly, and any report not so given within 10 (ten) days after the occurrence
of any such accident, claim, damage or destruction shall be noted in the
monthly operating statement delivered to Owner pursuant to Section 2.5(b).
Manager is authorized to settle any claim against an insurance company arising
out of any policy and, in connection with such claim, to execute proofs of loss
and adjustments of loss and to collect and receipt for loss proceeds.

 

6.5                                 Indemnification.
Manager shall hold Owner harmless from and indemnify and defend Owner against
any and all claims or liability for any injury or damage to any person or
property whatsoever for which Manager is responsible occurring in, on, or about
the Properties, including, without limitation, the Improvements when such
injury or damage shall be caused by the negligence of Manager, its agents,
servants, or employees, except to the extent that Owner recovers insurance
proceeds with respect to such matter. Owner will indemnify and hold Manager
harmless against all liability for injury to persons and damage to property
caused by Owner’s negligence and which did not result from the negligence of
misconduct of Manager, except to the extent Manager recovers insurance proceeds
with respect to such matter. Notwithstanding the foregoing, if the person
seeking indemnification under this Section 6.5 is an Affiliate, such
person’s right to indemnification is subject to any limitations imposed under
the Company’s Articles of Incorporation or any amendments thereto.

 

ARTICLE VII

 

TERM AND TERMINATION

 

7.1                                 Term. This
Agreement shall commence on the date first above written and shall continue
until the seventh (7th) anniversary of such date and thereafter for
successive seven (7) year renewal periods, unless on or before 30 days
prior to the date last above mentioned or on or before 30 days prior to the
expiration of any such renewal period, Manager shall notify Owner in writing
that it elects to terminate this Agreement, in which case this Agreement shall
be thereby terminated on said last mentioned date. In addition, and
notwithstanding the foregoing, Owner may terminate this Agreement at any time
upon delivery of written notice to Manager not less than thirty (30) days prior
to the effective date of termination, in the event of (and only in the event
of) a showing by Owner of willful misconduct, gross negligence, or deliberate
malfeasance by Manager in the performance of Manager’s duties hereunder. In
addition, either party may terminate this Agreement immediately upon the
occurrence of any of the following:

 

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

 

(b)                                 Manager (i) institutes
proceedings to be adjudicated a voluntary bankrupt or an insolvent, (ii) consents
to the filing of a bankruptcy proceeding against it, (iii) files a
petition or answer or consent seeking reorganization, readjustment,
arrangement, composition or relief under any similar applicable law or
practice, (iv) consents to the filing of any such petition, or to the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency for it or for a substantial part of its property, (v) makes an
assignment for the benefit of creditors, (vi) is unable to or admits in
writing its inability to pay its debts

 

10

 

generally as they become due unless such inability
shall be the fault of the other party, or (iv) takes corporate or other
action in furtherance of any of the aforesaid purposes.

 

7.2                                 Manager’s
Obligations Upon Termination. Upon the termination of this Management
Agreement, Manager shall have the following duties:

 

(a)                                  Manager shall
deliver to Owner or its designee, all books and records with respect to the
Properties.

 

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

 

(c)                                  Manager shall
render to Owner an accounting of all funds of Owner in its possession and shall
deliver to Owner a statement of all Management Fees claimed to be due to
Manager and shall cause funds of Owner held by Manager relating to the
Properties to be paid to Owner or its designee.

 

7.3                                 Owner’s Obligations
Upon Termination. Owner shall pay or reimburse Manager for any sums of
money due it under this Agreement for services and expenses prior to
termination of this Agreement. All provisions of this Agreement that require
Owner to have insured, or to protect, defend, save, hold and indemnify or to
reimburse Manager shall survive any expiration or termination of this Agreement
and, if Manager is or becomes involved in any claim, proceeding or litigation
by reason of having been Manager of Owner, such provisions shall apply as if
this Agreement were still in effect.

 

The parties understand and agree that Manager
may withhold funds for sixty (60) days after the end of the month in which this
Agreement is terminated to pay bills previously incurred but not yet invoiced
and to close accounts. Should the funds withheld be insufficient to meet the
obligation of Manager to pay bills previously incurred, Owner will, upon
demand, advance sufficient funds to Manager to ensure fulfillment of Manager’s
obligation to do so, within ten (10) days of receipt of notice and an
itemization of such unpaid bills.

 

ARTICLE VIII

 

MISCELLANEOUS

 

8.1                                 Notices. All
notices, approvals, consents and other communications hereunder shall be in
writing, and, except when receipt is required to start the running of a period
of time, shall be deemed given when delivered in person or on the fifth day
after its mailing by either party by registered or certified United States
mail, postage prepaid and return receipt requested, to the other party, at the
addresses set forth after their respect name below or at such different
addresses as either party shall have theretofore advised the other party in
writing in accordance with this Section 8.1.

 

	
   

  	
  Owner:

  	
  BEHRINGER HARVARD OPPORTUNITY OP I, LP

  
	
   

  	
   

  	
  c/o Behringer Harvard Opportunity REIT I, Inc.

  
	
   

  	
   

  	
  15601 Dallas Parkway

  
	
   

  	
   

  	
  Suite 600

  
	
   

  	
   

  	
  Addison, Texas 75001

  
	
   

  	
   

  	
  Attention: Chief Legal Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Manager:

  	
  HPT MANAGEMENT SERVICES LP

  
	
   

  	
   

  	
  15601 Dallas Parkway

  
	
   

  	
   

  	
  Suite 600

  
	
   

  	
   

  	
  Addison, Texas 75001

  
	
   

  	
   

  	
  Attention: Chief Legal Officer

  

 

8.2                                 Governing Law; Venue.
This Management Agreement shall be governed by and construed in accordance with
the laws of the State of Texas, and any action brought to enforce the
agreements made hereunder or

 

11

 

any action which arises out of the relationship created hereunder shall
be brought exclusively in Dallas County, Texas.

 

8.3                                 Assignment.
Manager may delegate partially or in full its duties and rights under this
Management Agreement but only with the prior written consent of Owner. Owner
acknowledges and agrees that any or all of the duties of Manager as contained
herein may be delegated by Manager and performed by a person or entity (“Submanager”)
with whom Manager contracts for the purpose of performing such duties. Owner
specifically grants Manager the authority to enter into such a contract with a
Submanager; provided that, unless Owner otherwise agrees in writing with such
Submanager, Owner shall have no liability or responsibility to any such Submanager
for the payment of the Submanager’s fee or for reimbursement to the Submanager
of its expenses or to indemnify the Submanager in any manner for any matter;
and provided further that Manager shall require such Submanager to agree, in
the written agreement setting forth the duties and obligations of such
Submanager, to indemnify Owner for all Losses incurred by Owner as a result of
the willful misconduct or gross negligence of the Submanager, except that such
indemnity shall not be required to the extent that Owner recovers issuance
proceeds with respect to such matter. Any contract entered into between Manager
and a Submanager pursuant to this Section 8.3 shall be consistent with the
provisions of this Agreement, except to the extent Owner otherwise specifically
agrees in writing. This Management Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective successors and
assigns.

 

8.4                                 Third Party Leasing
Services. Manager acknowledges that from time to time Owner may determine
that it is in the best interests of Owner to retain a third party to provide
certain leasing services with respect to certain Properties and to compensate
such third party for such leasing services. Upon the prior written consent of
Manager, Owner shall have the authority to enter into such a contract for
leasing services with a third party (a “Third Party Leasing Agreement”);
provided that Manager shall have no liability or responsibility to Owner for
any of the duties and obligations undertaken by such party, and Owner agrees to
indemnify Manager for all Losses incurred by Manager as a result of acts of
such third party pursuant to the Third Party Leasing Agreement. To the extent
that leasing services are specifically required to be performed by a third
party pursuant to such Third Party Leasing Agreement, Manager shall have no
obligation to perform such leasing services and Owner shall have no obligation
to Manager for leasing fees pursuant to Section 5.2 hereof.

 

8.5                                 Third Party
Management Services. Manager acknowledges that from time to time Owner may
acquire interests in Properties in which Owner does not control the
determination of the party that is engaged to provide property management and
other services to be provided by Manager with respect to all Properties
acquired by Owner hereunder. Upon the prior written consent of Manager, Owner
shall have the authority to acquire such non-controlling interests in
Properties for which a third party provides some or all of the services otherwise
required to be performed by Manager hereunder (a “Third Party Management
Agreement”); provided that Manager shall have no liability or responsibility to
Owner for any of the duties and obligations undertaken by such third party, and
Owner agrees to indemnify Manager for all Losses incurred by Manager as a
result of the acts of such third party pursuant to the Third Party Management
Agreement. To the extent that property management and other services are
specifically required to be performed by a third party pursuant to such Third
Party Management Agreement, Manager shall have no obligation to perform such
services and Owner shall have no obligation to Manager for compensation for
such services pursuant to Article V hereof.

 

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

 

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

 

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

 

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

 

12

 

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

 

8.11                           Disputes. If there
shall be a dispute between Owner and Manager relating to this Management
Agreement resulting in litigation, the prevailing party in such litigation
shall be entitled to recover from the other party to such litigation such
amount as the court shall fix as reasonable attorneys’ fees.

 

8.12                           Activities of Manager.
The obligations of Manager pursuant to the terms and provisions of this
Management Agreement shall not be construed to preclude Manager from engaging
in other activities or business ventures, whether or not such other activities
or ventures are in competition with Owner or the business of Owner.

 

8.13                           Independent Contractor.
Manager and Owner shall not be construed as joint venturers or partners of each
other pursuant to this Management Agreement, and neither shall have the power
to bind or obligate the other except as set forth herein. In all respects, the
status of Manger to Owner under this Agreement is that of an independent
contractor.

 

8.14                           No Third-Party Rights.
Nothing expressed or referred to in this Management Agreement will be construed
to give any Person other than the parties to this Management Agreement any
legal or equitable right, remedy or claim under or with respect to this
Management Agreement or any provision of this Management Agreement, except such
rights as shall inure to a successor or permitted assignee pursuant to Section 8.3.

 

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

 

[THE
REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

 

13

 

IN WITNESS WHEREOF,
the parties have executed this Property Management and Leasing Agreement as of
the date first above written.

 

 

	
   

  	
  BEHRINGER HARVARD OPPORTUNITY REIT I, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President –
  Corporate Development &

  Legal and Secretary 

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER
  HARVARD OPPORTUNITY OP I, LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Behringer Harvard Opportunity REIT I, Inc.

  
	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   /s/ Gerald J.
  Reihsen, III

  
	
   

  	
   

  	
   

  	
  Gerald
  J. Reihsen, III

  
	
   

  	
   

  	
   

  	
  Executive Vice President –
  Corporate Development

  & Legal and Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HPT MANAGEMENT SERVICES LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President – Corporate Development &

  Legal and Secretary

  

 

14

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