Document:

EXHIBIT 10.1

 

FORM OF ADVISORY MANAGEMENT AGREEMENT

 

This ADVISORY
MANAGEMENT AGREEMENT (this “Agreement”) is
entered into on this [        ] day of [                    ], 2008, by and between BEHRINGER HARVARD REIT II, INC., a
Maryland corporation (the “Company”), and
BEHRINGER ADVISORS II LP, a Texas limited partnership (the “Advisor”).

 

W I T N E
S S E T H

 

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

 

WHEREAS, the Company has been formed to
acquire and operate a diverse portfolio of real estate assets such as office,
industrial, retail, hospitality, recreation and leisure, single-tenant and
multifamily, public infrastructure assets (such as roads, correctional
facilities and water utilities) and other real properties ;

 

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

 

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

 

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

 

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

 

ARTICLE I

DEFINITIONS

 

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

 

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

 

Acquisition Expenses.  Any and all expenses incurred by the Advisor
or any Affiliate thereof in connection with the selection and acquisition of
any Asset, including expenses incurred related to assets pursued or considered
but not ultimately acquired by the Company.

 

 

Acquisition Fees.  Any and all fees and commissions, exclusive
of Acquisition Expenses but including the Acquisition and Advisory Fees, paid
by any Person to any other duly qualified and licensed Person (including any
fees or commissions paid by or to any duly qualified and licensed Affiliate of
the Company or the Advisor) in connection with making or investing in Mortgages
or other loans or the purchase, development or construction of an Asset,
including, without limitation, real estate commissions, selection fees,
investment banking fees, third party seller’s fees (to the extent the Company
agrees to pay any such fees as part of an acquisition), Development Fees,
Construction Fees, non-recurring management fees, loan fees, points or any
other fees of a similar nature.  Excluded
shall be Development Fees and Construction Fees paid to any Person not
affiliated with the Sponsor in connection with the actual development and
construction of any Property.

 

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

 

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

 

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

 

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

 

Assets.  Properties, Mortgages, loans and other direct
or indirect investments (other than investments in bank accounts, money market
funds or other current assets) owned by the Company, directly or indirectly
through one or more of its Affiliates or Joint Ventures or through other
investment interests.

 

Asset Management Fee.  The fee payable to the Advisor for day-to-day
professional management services in connection with the Company and its
investments in Assets pursuant to Section 3.01(a) of this
Agreement.

 

Average Invested Assets.  For a specified period, the average of the
aggregate book value of the Assets before deduction for depreciation, bad debts
or other non-cash reserves, computed by taking the average of the values at the
end of each month during the period.

 

Board.  The Board of Directors of the Company.

 

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

 

Change of Control.  Any (i) event
(including, without limitation, issue, transfer or other disposition of Shares
of capital stock of the Company or equity interests in the Partnership, merger,
share exchange or consolidation) after which any “person” (as that term is used
in Sections 13(d) and 14(d) of the Exchange Act) is or becomes
the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company or the Partnership
representing greater than 50% of the 

 

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combined voting power of the
Company’s or the Partnership’s then outstanding securities, respectively; provided,
that a Change of Control shall not be deemed to occur as a result of any widely
distributed public offering of the Shares or (ii) direct or indirect sale,
transfer, conveyance or other disposition (other than pursuant to clause (i)),
in one or a series of related transactions, of all or substantially all of the
properties or assets of the Company or the Partnership, taken as a whole.

 

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

 

Company.  Behringer Harvard REIT II, Inc., a
corporation organized under the laws of the State of Maryland.  Unless the context clearly indicates
otherwise, references to the Company shall include its direct and indirect
subsidiaries, including the Partnership.

 

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

 

Competitive Real Estate Commission.  A real estate or brokerage commission paid
or, if no commission is paid, the amount that customarily would be paid for the
purchase or sale of a Property that is reasonable, customary, and competitive
in light of the size, type and location of the Property (as determined by the
Board, including a majority of the Independent Directors).

 

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

 

Contract Purchase Price.  The amount actually paid or budgeted
(whichever amount is greater) in respect of the purchase, development,
construction or improvement of a Property, the amount of funds advanced with
respect to a Mortgage or other loan or the amount actually paid or budgeted in
respect to the purchase of other Assets, in each case exclusive of Acquisition
Fees, Acquisition Expenses and Company Acquisition Expenses, but including any
debt attributable to the acquired Assets.

 

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

 

Cost of Investment. For each Asset, (i) with
respect to an Asset wholly owned by the Company or any wholly owned subsidiary,
the Fully Loaded Cost, and (ii) in the case of an Asset owned by any Joint
Venture or in some other manner in which the Company is a co-venturer or
partner or otherwise a co-owner, (A) the Fully Loaded Cost if the Company
(or any subsidiary) owns a 100% interest, directly or indirectly, in the Asset
or (B) the portion of the Fully Loaded Cost that is attributable to the
Company’s investment in the Joint Venture or other interest in such Asset if
the Company does not own a 100% interest in the Asset.

 

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

 

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

 

Director.  A member of the Board.

 

Disposition Fee.  The fee payable to the Advisor for services
provided in connection with the Sale of one or more Properties pursuant to Section 3.01(c).

 

Distributions.  Any dividends or other distributions of money
or other property by the Company to Stockholders, including distributions that
may constitute a return of capital for federal income tax purposes but
excluding distributions that constitute the redemption of any Shares and
excluding distributions on any Shares before their redemption.

 

Exchange Act. The Securities Exchange Act
of 1934, as amended from time to time, or any successor statute thereto.
Reference to any provision of the Exchange Act shall mean such provision as in
effect from time to time, as the same may be amended, and any successor
provision thereto, as interpreted by any applicable regulations as in effect
from time to time.

 

Fully Loaded Cost.  The Contract Purchase Price of an Asset
plus (i) the amount of any costs payable to third parties for the
development, construction or improvement of the Asset and (ii) the amount
of any subsequent debt attributable to the Asset.

 

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

 

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

 

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Intellectual Property Rights.  All rights, titles and interests, whether
foreign or domestic, in and to any and all trade secrets, confidential
information rights, patents, invention rights, copyrights, service marks,
trademarks, know-how, or similar intellectual property rights and all
applications and rights to apply for the 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.

 

Joint Ventures.  A legal organization formed to provide for
the sharing of risks and rewards in an enterprise co-owned and operated for
mutual benefit by two or more business partners and established to acquire or
hold Assets.

 

Listing or Listed.  The filing of a Form 8-A to register any
class of the Company’s securities on a national securities exchange and the
approval of an original listing application related thereto by the applicable
exchange; provided, that the Shares shall not be deemed to be Listed
until trading in the Shares shall have commenced on the relevant national
securities exchange.

 

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

 

NASAA Guidelines.  The Statement of Policy Regarding Real Estate
Investment Trusts adopted by the North American Securities Administrators
Association, Inc. on May 7, 2007, and in effect on the date hereof.

 

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

 

Offering.  Any public offering of Shares pursuant to an
effective registration statement filed under the Securities Act, other than a
public offering of Shares under a distribution reinvestment plan.

 

Organization and Offering Expenses.  Any and all costs and expenses incurred by
and to be paid by the Company in connection with an Offering, the formation of
the Company, and including the qualification and registration of the Offering
and the marketing and distribution of its Shares, including, without
limitation: total underwriting and brokerage discounts and commissions (including
fees of the underwriters’ attorneys); expenses for printing, engraving,
amending registration statements and supplementing prospectuses; mailing and
distribution costs; salaries of employees while engaged in sales activity, such
as preparing supplemental sales literature; telephone and other
telecommunication costs; all advertising and marketing expenses, including the
costs related to investor and broker-dealer meetings; charges of transfer
agents, registrars, trustees, escrow holders, depositories and experts; filing,
registration and qualification fees and taxes relating to the Offering under
federal and state laws; and accountants’ and attorneys’ fees.

 

Partnership.  Behringer Harvard Operating Partnership II
LP, a Texas limited partnership, through which the Company may own Assets, or
otherwise conduct its operations.

 

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

 

5

 

Property or Properties.  As the context requires, any, or all,
respectively, of the Real Property acquired by the Company, either directly or
indirectly (whether through Joint Ventures or other investment interests,
regardless of whether the Company consolidates the financial results of these
entities).

 

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

 

Prospectus.  Prospectus has the meaning set forth in Section 2(a)(10) of
the Securities Act, including a preliminary prospectus, an offering circular as
described in Rule 253 of the General Rules and Regulations under the
Securities Act or, in the case of an intrastate offering, any document by
whatever name known, utilized for the purpose of offering and selling
securities of the Company.

 

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

 

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

 

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

 

Securities Act.  The Securities Act of 1933, as amended from
time to time, or any successor statute thereto. 
Reference to any provision of the Securities Act shall mean the
provision as in effect from 

 

6

 

time to time, as the same may
be amended, and any successor provision thereto, as interpreted by any
applicable regulations as in effect from time to time.

 

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

 

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

 

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

 

Sponsor.  Sponsor has the meaning ascribed to such term
in the Articles of Incorporation.

 

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

 

Termination Date.  The date of termination of this Agreement.

 

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

 

Total Operating Expenses.  All costs and expenses paid or incurred by
the Company, as determined under generally accepted accounting principles,
which are in any way related to the operation of the Company or to Company
business, including the Asset Management Fee, but excluding (i) the
expenses of raising capital such as Organization and Offering Expenses, legal,
audit, accounting, underwriting, brokerage, listing, registration, and other
fees, printing and other expenses and tax incurred in connection with the
issuance, distribution, transfer, registration and Listing of the Shares, (ii) interest
payments, (iii) taxes, (iv) non-cash expenditures such as
depreciation, amortization and bad debt reserves, (v) Acquisition Fees and
Acquisition Expenses, (vi) real estate commissions on the Sale of Assets
(including the Disposition Fee) and (vii) other fees and expenses
connected with the acquisition, disposition, management and ownership of real
estate interests, mortgage loans or other property (including the costs of
foreclosure, insurance premiums, legal services, maintenance, repair and
improvement of property).

 

Value of Investment.  For each Asset, if available, (i) with
respect to an Asset wholly owned by the Company or any wholly owned subsidiary,
the Asset’s value established by the most recent independent valuation report
(without reduction for depreciation, bad debts or other non-cash reserves), and
(ii) in the case of an Asset owned by any Joint Venture or in some other
manner in which the Company is a co-venturer or partner or otherwise a
co-owner, (A) the Asset’s value established by the most recent independent
valuation report (without reduction for depreciation, bad debts or other
non-cash reserves) if the Company (or any subsidiary) owns a 100% interest,
directly or indirectly, in the Asset or (B) the portion of the Asset’s
value established by the most recent independent valuation report (without
reduction for depreciation, bad debts or other non-cash reserves) that is
attributable to the Company’s investment in the Joint Venture or other interest
in such Asset if the Company does not own a 100% interest in the Asset.  Nothing in this definition is intended to
obligate the Advisor to obtain independent valuations at any point in time beyond
those specified in the Company’s Prospectus.

 

7

 

ARTICLE II

THE ADVISOR

 

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

 

2.02        Duties of the Advisor.  The Advisor shall be deemed to be in a
fiduciary relationship to the Company and its Stockholders.  Subject to Section 2.08, the
Advisor undertakes to use its commercially reasonable best efforts to present
to the Company potential investment opportunities consistent with the
investment objectives and policies of the Company as determined and adopted
from time to time by the Board.  In
performance of its duties, subject to the supervision of the Board and
consistent with the provisions of the Company’s most recent Prospectus for
Shares, the Articles of Incorporation and Bylaws, the Advisor shall, either
directly or by engaging a duly qualified and licensed Affiliate of the Advisor
or other duly qualified and licensed Person:

 

(a)           provide the Company
with research and economic and statistical data in connection with the Assets
and investment policies;

 

(b)           manage the Company’s
day-to-day operations and perform and supervise the various administrative
functions reasonably necessary for the management and operations of the
Company;

 

(c)           maintain and preserve
the books and records of the Company, including stock books and records
reflecting a record of the Stockholders and their ownership of the Company’s
Shares;

 

(d)           investigate, select,
and, on behalf of the Company, engage and conduct business with the duly
qualified and licensed Persons as the Advisor deems necessary to the proper
performance of its obligations hereunder, including but not limited to duly
qualified and licensed consultants, accountants, correspondents, lenders,
technical advisors, attorneys, brokers, underwriters, corporate fiduciaries,
escrow agents, depositaries, custodians, agents for collection, insurers, insurance
agents, banks, builders, developers, property owners, mortgagors, property
management companies, transfer agents and any and all agents for any of the
foregoing, including duly qualified and licensed Affiliates of the Advisor, and
duly qualified and licensed Persons acting in any other capacity deemed by the
Advisor necessary or desirable for the performance of any of the foregoing
services, including but not limited to entering into contracts in the name of
the Company with any of the foregoing;

 

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

 

(f)            subject to the
provisions of Sections 2.02(h) and 2.03 hereof, (i) locate,
analyze and select potential investments in Assets, (ii) structure and
negotiate the terms and conditions of transactions pursuant to which investment
in Assets will be made or acquired for the Company or the Partnership; (iii) make
investments in Assets on behalf of the Company or the Partnership in compliance
with the investment objectives and policies of the Company; (iv) arrange
for financing and refinancing and make other changes in the asset or capital
structure of, and dispose of, reinvest the proceeds from the sale of, or otherwise
deal with the investments in, Assets; (v) 

 

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enter into leases of Property and service
contracts for Assets with duly qualified and licensed non-affiliated and
Affiliated Persons and, to the extent necessary, perform all other operational
functions for the maintenance and administration of the Assets, including the
servicing of Mortgages; and (vi) arrange for, or provide, accounting and
other record-keeping functions at the Asset level;

 

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

 

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

 

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

 

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

 

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

 

(l)            assist the Company in
arranging for all necessary cash management services;

 

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

 

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

 

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

 

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

 

(q)           assist the Company in
preparing all reports and returns required by the Securities and Exchange
Commission, Internal Revenue Service and other state or federal governmental
agencies; and

 

9

 

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

 

2.03        Authority of Advisor.

 

(a)           Pursuant to the terms
of this Agreement (including the restrictions included in this Section 2.03
and in Section 2.06), and subject to the continuing and exclusive
authority of the Board over the management of the Company, the Board hereby
delegates to the Advisor the authority to take those actions set forth in Section 2.02.

 

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

 

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

 

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

 

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

 

2.04        Bank Accounts.  The Advisor may establish and maintain one or
more bank accounts in its own name for the account of the Company or in the
name of the Company and may collect and deposit into any account or accounts,
and disburse from any account or accounts, any money on behalf of the Company,
under the terms and conditions as the Board may approve, provided that no funds
of the Company or the Partnership shall be commingled nor shall any of such
funds be commingled with the funds of the Advisor; and the Advisor shall from
time to time render accountings of the collections and payments to the Board,
its Audit Committee and the auditors of the Company.

 

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

 

2.06        Limitations on Activities.  Anything else in this Agreement to the
contrary notwithstanding, the Advisor shall refrain from taking any action
which, in its sole judgment made in good faith, would (a) adversely affect
the status of the Company as a REIT, (b) subject the Company to regulation
under the Investment Company Act of 1940, as amended, or (c) violate any
law, rule, regulation or statement of policy of any governmental body or agency
having jurisdiction over the Company, the Shares or any of the Company’s
securities, or otherwise not be permitted by the Articles of Incorporation or
Bylaws, except if the action shall be ordered by the Board, in which case the
Advisor shall notify promptly the Board of the Advisor’s judgment of the
potential impact of the action and shall 

 

10

 

refrain from taking the action until it
receives further clarification or instructions from the Board.  The Advisor shall
have no liability for acting in accordance with the specific instructions of
the Board so given.  The Advisor,
its directors, officers, employees and stockholders, and the directors,
officers, employees and stockholders of the Advisor’s Affiliates shall not be
liable to the Company or to the Board or Stockholders for any act or omission
by the Advisor, its directors, officers, employees or stockholders, or for any
act or omission of any Affiliate of the Advisor, its directors, officers or
employees or stockholders except as provided in Section 5.02 of
this Agreement.

 

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

 

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

 

2.09        Third Party Alliances.
To the extent that the Advisor deems necessary, it may enter into strategic
relationships with third parties having specialized or particularized knowledge
or experience regarding certain Assets. 
The Advisor may reallow to these third parties a portion of the fees to
be paid to it by the Company, as described in Section 3.01.

 

2.10        Payment of Certain
Organization and Offering Expenses. The Company shall pay directly all
Organization and Offering Expenses considered underwriting compensation by the
Financial Industry Regulatory Authority, or FINRA.  Such payments, other than Selling Commissions
and the dealer manager fee, shall apply toward the limit on Organization and
Offering Expenses reimbursable by the Company to the Advisor pursuant to Section 3.02(a)(1) below.

 

11

 

ARTICLE III

COMPENSATION AND REIMBURSEMENT OF SPECIFIED COSTS.

 

3.01        Fees.

 

(a)           Asset Management Fee.  For each and every Asset, the Company shall
pay the Advisor a monthly Asset Management Fee on the 15th day of each month in
an amount equal to one-twelfth of 1% of the sum of, for each and every Asset,
the higher of the Cost of Investment or the Value of Investment; provided,
however, in the case of an Asset owned by any Joint Venture in which the
Company is a co-venturer or partner or otherwise a co-owner, the Asset
Management Fee may be paid to the Advisor directly by the Joint Venture rather
than the Company; provided, further, that any Asset Management
Fee paid by a Joint Venture in accordance with the terms of this Section 3.01(a) shall
be credited to the Company in an amount equal to (i) the Asset Management
Fee paid by the Joint Venture multiplied by (ii) the percentage of the
Company’s ownership interest in that Joint Venture.  The Advisor, in its sole discretion, may
waive, reduce or defer all or any portion of the Asset Management Fee to which
it would otherwise be entitled.

 

(b)           Acquisition and Advisory Fees.  The Company shall pay the Advisor a fee in
the amount of 2.5% of the Contract Purchase Price of each Asset as Acquisition
and Advisory Fees.  The total of all
Acquisition Fees and any Acquisition Expenses shall be limited in accordance
with the Articles of Incorporation. 
Acquisition and Advisory Fees shall be paid as follows: (1) for
real property (including properties where development/redevelopment is
expected), at the time of acquisition, (2) for development/redevelopment
projects (other than the initial acquisition of the real property), at the time
a final budget is approved and (3) for loans and similar assets (including
without limitation mezzanine loans), quarterly based on the value of loans made
or acquired.  In the case of a
development/redevelopment project subject to clause (2) above, upon
completion of the development/redevelopment project, the Advisor shall
determine the actual amounts paid.  To
the extent the amounts actually paid vary from the budgeted amounts on which
the Acquisition and Advisory Fee was initially based, the Advisor will pay or
invoice the Company for 2.5% of the budget variance such that the Acquisition
and Advisory Fee is ultimately 2.5% of amounts expended on such
development/redevelopment project.  The
Advisor, in its sole discretion, may waive, reduce or defer all or any portion
of the Acquisition and Advisory Fees to which it would otherwise be entitled.

 

(c)           Disposition Fee. 
If the Advisor or an Affiliate provides a substantial amount of services
(as determined by a majority of the Independent Directors) in connection with
the Sale of one or more Assets, the Advisor or the Affiliate shall receive,
subject to the satisfaction of the condition outlined below, a Disposition Fee
in an amount (the “Disposition Fee”)
equal to (subject to the limitation in the following paragraph) (i) in the
case of the sale of Property, the lesser of (A) one-half of a Competitive
Real Estate Commission or (B) 3% of the sales price of the Property and (ii) in
the case of the sale of any Asset other than Property, 3% of the sales price of
the Asset or Assets.

 

The Disposition
Fee may be payable in addition to real estate commissions paid to persons not
affiliated with the Company or the Advisor and their respective Affiliates; provided,
however, that the total real estate commissions paid to all Persons by
the Company (together with the Disposition Fee) shall in no case exceed an amount
equal to the lesser of (i) 6% of the Contract Sales Price of an Asset or (ii) the
Competitive Real Estate Commission in respect of any Property.  The Advisor, in its sole discretion, may
waive, reduce or defer all or any portion of the Disposition Fee to which it
would otherwise be entitled.

 

12

 

(d)           Debt Financing Fee. 
In the event of any debt financing obtained by or for the Company
(including any refinancing of debt), the Company will pay to the Advisor a debt
financing fee equal to 1% of the amount available under the financing.  The Debt Financing Fee includes the
reimbursement of the specified cost incurred by the Advisor of engaging third
parties to source debt financing, and nothing herein shall prevent the Advisor
from entering fee-splitting arrangements with third parties with respect to the
Debt Financing Fee.  The Advisor, in its
sole discretion, may waive, reduce or defer all or any portion of the Debt
Financing Fee to which it would otherwise be entitled.

 

(e)           Development Fee. If the Advisor or an Affiliate
provides development services, the Company shall pay the Advisor Development
Fees in amounts that are usual and customary for comparable services rendered
to similar projects in the geographic market; provided, however,
the Company shall not pay Development Fees to the Advisor or any of its
Affiliates if the Advisor or any of its Affiliates elects to receive
Acquisition and Advisory Fees based on the cost of the construction of that development
project; provided, further, that a majority of the Independent
Directors must determine that such Development Fees are fair and reasonable and
on terms and conditions not less favorable than those available from
unaffiliated third parties.  Development
Fees will include the reimbursement of the specified cost incurred by the
Advisor of engaging third parties for such services.  The Advisor, in its sole discretion, may
waive, reduce or defer all or any portion of the Development Fee to which it
would otherwise be entitled.

 

3.02        Expenses.

 

(a)           In addition to the compensation paid to the Advisor
pursuant to Section 3.01 hereof and except as noted in Section 2.09
above, the Company shall pay directly or reimburse the Advisor for all of the
costs and expenses paid or incurred by the Advisor that are in any way related
to the operations of the Company or the business of the Company or the services
the Advisor provides to the Company pursuant to this Agreement, including, but
not limited to:

 

(i)            Organization and Offering Expenses; provided, however,
that (i)  the Company shall not reimburse the Advisor to the extent such
reimbursement would cause the total amount spent by the Company on Organization
and Offering Expenses (other than Selling Commissions and the dealer manager
fee) to exceed 1.5% of the Gross Proceeds as of the date of the reimbursement
and (ii) within 60 days after the end of the month in which an Offering
terminates, the Advisor shall reimburse the Company for any Organization and
Offering Expenses (other than Selling Commissions and the dealer manager fee)
to the extent that such Organization and Offering Expenses incurred by the
Company exceed 1.5% of the Gross Proceeds raised in the completed Offering;

 

(ii)           Acquisition Expenses in an amount equal to 0.5% of the
Contract Purchase Price of each asset acquired, pursued or considered by the
Company;

 

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

 

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

 

13

 

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

 

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

 

(vii)         expenses of managing and operating Assets owned by the
Company, whether or not payable to an Affiliate of the Advisor;

 

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

 

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

 

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

 

(xi)           expenses of organizing, reorganizing, liquidating or
dissolving the Company and the expenses of filing or amending the Articles of
Incorporation;

 

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

 

(xiii)         personnel and related employment costs incurred by the
Advisor or its Affiliates in performing the services described herein,
including but not limited to reasonable salaries and wages, benefits and
overhead of all employees directly involved in the performance of the services;
provided, that no reimbursement shall be made for costs of the employees
of the Advisor or its Affiliates to the extent that the employees perform
services for which the Advisor receives a separate fee; and

 

(xiv)        audit, accounting and legal fees.

 

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

 

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

 

14

 

3.04        Reimbursement to the Advisor.  The Company shall not reimburse the Advisor
for Total Operating Expenses paid by the Advisor to the extent that Total
Operating Expenses (including the Asset Management Fee), in the four
consecutive fiscal quarters then ended (the “Expense Year”)
exceed (the “Excess Amount”) the greater of 2%
of Average Invested Assets or 25% of Net Income for that period of four
consecutive fiscal quarters.  Any Excess
Amount paid to the Advisor during a fiscal quarter shall be repaid to the
Company.  Reimbursement of all or any
portion of the Total Operating Expenses that exceed the limitation set forth in
the preceding sentence may, at the option of the Advisor, be deferred without
interest and may be reimbursed in any subsequent Expense Year where the
limitation would permit the reimbursement if the Total Operating Expense were
incurred during that period. 
Notwithstanding the foregoing, if there is an Excess Amount in any Expense
Year and the Independent Directors determine that all or a portion of the
excess was justified, based on unusual and nonrecurring factors which they deem
sufficient, the Excess Amount may be reimbursed to the Advisor.  If the Independent Directors determine the
excess was justified, then after the end of any fiscal quarter of the Company
for which there is an Excess Amount for the twelve months then ended paid to
the Advisor, the Advisor, at the direction of the Independent Directors, shall
cause the fact to be disclosed in the next quarterly report of the Company in a
separate writing and sent to the Stockholders within sixty days of the quarter
end, together with an explanation of the factors the Independent Directors
considered in determining that the Excess Amount was justified. The
determination shall be reflected in the minutes of the meetings of the
Board.  The Company will not reimburse
the Advisor or its Affiliates for services for which the Advisor or its
Affiliates are entitled to compensation in the form of a separate fee.  All figures used in any computation pursuant
to this Section 3.04 shall be determined in accordance with
generally accepted accounting principles applied on a consistent basis.

 

ARTICLE IV

TERM AND TERMINATION

 

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

 

4.02        Termination.  This agreement may be terminated at the
option of either party upon sixty days written notice without cause or penalty
(if termination is by the Company, then the termination shall be upon the
approval of a majority of the Independent Directors).  Notwithstanding the foregoing, the provisions
of this Agreement which provide for payment to the Advisor of expenses, fees or
other compensation following the date of termination shall continue in full
force and effect until all amounts payable thereunder to the Advisor are paid
in full.

 

4.03        Payments to and Duties of Advisor upon Termination.

 

(a)           After the Termination Date, the Advisor shall not be
entitled to compensation for further services hereunder except it shall be
entitled to and receive from the Company within thirty days after the effective
date of the termination all unpaid reimbursements of expenses, subject to the
provisions of Section 3.04 hereof, and all contingent liabilities
related to fees payable to the Advisor prior to termination of this Agreement.

 

(b)           The Advisor shall promptly upon termination:

 

15

 

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

 

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

 

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

 

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

 

ARTICLE V

INDEMNIFICATION

 

5.01        Indemnification by the Company.

 

(a)           The Company shall indemnify and hold harmless the Advisor
and its Affiliates, including their respective officers, directors, partners
and employees, from all liability, claims, damages or losses arising in the
performance of their duties hereunder, and related expenses, including
reasonable attorneys’ fees, to the extent such liability, claims, damages or
losses and related expenses are not fully reimbursed by insurance, subject to
any limitations imposed by the laws of the State of Maryland, the Articles of
Incorporation and the NASAA Guidelines. Notwithstanding the foregoing, the
Company shall not indemnify or hold harmless the Advisor or its Affiliates,
including their respective officers, directors, partners and employees, for any
liability or loss suffered by the Advisor or its Affiliates, including their
respective officers, directors, partners and employees, nor shall it provide
that the Advisor or its Affiliates, including their respective officers,
directors, partners and employees, be held harmless for any loss or liability
suffered by the Company, unless all of the following conditions are met: (i) the
Advisor or its Affiliates, including their respective officers, directors,
partners and employees, have determined, in good faith, that the course of
conduct which caused the loss or liability was in the best interests of the
Company; (ii) the Advisor or its Affiliates, including their respective
officers, directors, partners and employees, were acting on behalf of or
performing services of the Company; (iii) the liability or loss was not
the result of negligence or misconduct by the Advisor or its Affiliates,
including their respective officers, directors, partners and employees; and (iv) the
indemnification or agreement to hold harmless is recoverable only out of the
Company’s net assets and not from the individual assets of the stockholders.
Notwithstanding the foregoing, the Advisor and its Affiliates, including their
respective officers, directors, partners and employees, shall not be
indemnified by the Company for any losses, liability or expenses arising from
or out of an alleged violation of federal or state securities laws by such
party unless one or more of the following conditions are met: (i) there
has been a successful adjudication on the merits of each count involving
alleged securities law violations as to the particular indemnitee; (ii) such
claims have been dismissed with prejudice on the merits by a court of competent
jurisdiction as to the particular indemnitee; and (iii) a court of
competent jurisdiction approves a settlement of the claims against a particular
indemnitee and finds that indemnification of the settlement and the related
costs should be made, and the court considering the request for indemnification
has been advised of the position of the Securities and Exchange Commission and
of the published position 

 

16

 

of any state securities regulatory authority in which securities of the
Company were offered or sold as to indemnification for violations of securities
laws.

 

(b)           The Company may advance funds to the Advisor or its
Affiliates, including their respective officers, directors, partners and
employees, for legal expenses and other costs incurred as a result of any legal
action for which indemnification is being sought is permissible only if all of
the following conditions are satisfied: (i) the legal action relates to
acts or omissions with respect to the performance of duties or services on
behalf of the Company; (ii) the legal action is initiated by a third-party
who is not a stockholder or the legal action is initiated by a stockholder
acting in his or her capacity as such and a court of competent jurisdiction
specifically approves such advancement; (iii) the Advisor or its
Affiliates, including their respective officers, directors, partners and
employees, undertake to repay the advanced funds to the Company together with
the applicable legal rate of interest thereon, in cases in which the Advisor or
its Affiliates, including their respective officers, directors, partners and
employees, are found not to be entitled to indemnification.

 

(c)           Notwithstanding the provisions of this Section 5.01,
the Advisor shall not be entitled to indemnification or be held harmless
pursuant to this Section 5.01 for any activity which the Advisor
shall be required to indemnify or hold harmless the Company pursuant to Section 5.02.

 

5.02        Indemnification by Advisor.  The Advisor shall indemnify and hold harmless
the Company from contract or other liability, claims, damages, taxes or losses
and related expenses including attorneys’ fees, to the extent that the
liability, claims, damages, taxes or losses and related expenses are not fully
reimbursed by insurance and are incurred by reason of the Advisor’s bad faith,
fraud, misfeasance, misconduct, gross negligence or reckless disregard of its
duties, but the Advisor shall not be held responsible for any action of the
Board in following or declining to follow any advice or recommendation given by
the Advisor.

 

ARTICLE VI

MISCELLANEOUS

 

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

 

6.02        Assignment to an Affiliate.  This Agreement and any rights, duties,
liabilities and obligations hereunder and the fees and compensation related
thereto may be assigned by the Advisor, in whole or in part, to a duly
qualified and licensed Affiliate of the Advisor without obtaining the approval
of the Board.  Any other assignment shall
be made only with the approval of a majority of the Board (including a majority
of the Independent Directors). The Advisor may assign any rights to receive
fees or other payments under this Agreement without obtaining the approval of
the Board. This Agreement shall 

 

17

 

not be assigned by the Company
without the consent of the Advisor, except in the case of an assignment by the
Company to a corporation or other organization which is a successor to all of
the assets, rights and obligations of the Company, in which case the successor
organization shall be bound hereunder and by the terms of said assignment in
the same manner as the Company is bound by this Agreement. This Agreement shall
be binding on successors to the Company resulting from a Change of Control, and
shall likewise be binding upon any successor to the Advisor.

 

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

 

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

 

	
  To the Directors and to the Company:

  	
  Behringer Harvard REIT II, Inc.

  
	
   

  	
  15601 Dallas Parkway

  
	
   

  	
  Suite 600

  
	
   

  	
  Addison, Texas 75001

  
	
   

  	
   

  
	
  To the Advisor:

  	
  Behringer Advisors II LP

  
	
   

  	
  15601 Dallas Parkway

  
	
   

  	
  Suite. 600

  
	
   

  	
  Addison, Texas 75001

  

 

Either party
shall, as soon as reasonably practicable, give notice in writing to the other
party of a change in its address for the purposes of this Section 6.04.

 

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

 

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

 

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

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

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

 

6.15        Treatment Under Texas Margin Tax.  For purposes of the Texas margin tax, the
Advisor’s performance of the services specified in this Agreement will cause
the Advisor to conduct part of the active trade or business of the Company, and
the compensation specified in Article III includes both the payment
of management fees and the reimbursement of specified costs incurred in the
Advisor’s conduct of the active trade or business of the Company.  Therefore, the Advisor and Company intend
Advisor to be, and shall treat Advisor as, a “management company” within the
meaning of Section 171.0001(11) of the Texas Tax Code.  The Company and the Advisor will apply
Sections 171.1011(m-1) 

 

19

 

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

 

20

 

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

 

	
   

  	
  BEHRINGER
  HARVARD REIT II, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President – Corporate

  
	
   

  	
   

  	
  Development & Legal

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER
  ADVISORS II LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Harvard Property Trust II, LLC,

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
  Executive Vice President – Corporate

  
	
   

  	
   

  	
   

  	
  Development & Legal

  
					

 

21EXHIBIT 10.2

 

FORM OF
PROPERTY MANAGEMENT AND LEASING AGREEMENT

 

This
PROPERTY MANAGEMENT AND LEASING AGREEMENT (this “Management  Agreement”)
is made and entered into as of the [      ] day
of [                    ],
2008, by and among BEHRINGER HARVARD REIT II, INC., a Maryland corporation
(“BH REIT”), BEHRINGER HARVARD OPERATING PARTNERSHIP II LP, a Texas
limited partnership (“BH OP”), and BEHRINGER HARVARD REIT II
MANAGEMENT SERVICES, LLC, Texas limited liability company (the “Manager”).

 

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

 

WHEREAS,
BH REIT intends 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,
bridge or mezzanine loans), some or all of which are to be acquired and held by
Owner (as hereinafter defined) on behalf of BH REIT; and

 

WHEREAS,
Owner intends 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.

 

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 the terms are equally applicable
both to the singular and plural forms thereof:

 

1.1                                 “Advisor” means Behringer Advisors
II LP, a Texas limited partnership, or its successor as advisor of BH REIT.

 

1.2                                 “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 the 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 the other Person; (iii) any
Person directly or indirectly controlling, controlled by or under common
control with the other Person; (iv) any executive officer, director,
trustee or general partner of the other Person; and (v) any legal entity
for which the Person acts as an executive officer, director, trustee or general
partner.

 

1.3                                 “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.

 

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

 

1.5                                 “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 these
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.

 

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

 

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

 

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

 

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

 

1.10                           “Properties”
means all 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.

 

1.11                           “Property
Amendment” means an amendment to this Management Agreement describing a
Property and the Owner thereof and any variations to the basic terms and
conditions of this Management Agreement with respect to the Property related
thereto.

 

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

 

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

 

ARTICLE
II

 

APPOINTMENT
AND STATUS OF MANAGER; SERVICES TO BE PERFORMED

 

2.1                                 Appointment of Manager. 
Owner hereby engages and retains Manager as the manager and as tenant
coordinating agent of the Properties, and Manager hereby accepts the
appointment on the 

 

2

 

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.  Owner and Manager shall execute a Property
Amendment for each Property setting forth a description of the Property, the
individual legal Owner with respect to the Property, and any variations from
the terms and conditions set forth in this Management Agreement with respect to
the management and leasing of the Property.

 

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

 

2.3                                 General Duties.  Manager shall devote its 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 same geographic area.  Manager shall make available to Owner the
full benefit of the judgment, experience and advice of the members of Manager’s
organization and staff with respect to the policies to be pursued by Owner
relating to the operation and leasing of the Properties.

 

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

 

(a)                                  Lease Obligations. 
Manager shall perform all duties of the landlord under all Leases
insofar as the 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 commercial tenants, repairs and maintenance
necessary to preserve the Properties in its present condition and for the
operating efficiency thereof 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 the space or
that are customarily provided to commercial tenants.

 

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

 

3

 

any, will be limited to activities related to the
management, operation, maintenance, and leasing of each 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, the 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 duly qualified and licensed 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 recommendations regarding
compliance with the notice as shall be appropriate.

 

(e)                                  Personnel.  Any personnel
hired by Manager to maintain, operate and lease each Property shall be the
employees or independent contractors of Manager and not of Owner of the Property,
BH OP or BH REIT.  Manager
shall use due care in the selection and supervision of employees or independent
contractors, who shall be duly qualified and licensed, as necessary.  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 same geographic area.

 

(g)                                 Expenses.  Manager shall
analyze all bills received for services, work and supplies in connection with
maintaining and operating the Properties, pay all 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 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 the 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 

 

4

 

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.

 

(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 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)                                     Controlling Agreements. 
Manager has received copies of (and will be provided with copies of
future) articles of incorporation, agreements of limited partnership, joint venture
agreements, operating agreements, loan agreements, deeds of trust or mortgages,
each as may be amended from time to time, of Owner, as applicable (the “Controlling
Agreements”) and is and will be 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 Controlling Agreements.

 

(k)                                  Signs.  Manager shall
place and remove, or cause to be placed and removed, any 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.

 

2.5                                 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 each Property.

 

2.6                                 Accounting,
Records and Reports.

 

(a)                                  Records.  Manager shall
maintain all office records and books of account and shall record therein, and
keep copies of, each invoice received from services, work and supplies ordered
in connection with the maintenance and operation of the Properties.  The 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 the 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;

 

5

 

(ii)                                  monthly operating statement;

 

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

 

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

 

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

 

(vi)                              copy of ledger entries for the
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 the 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 budget and plan approved by Owner prior to the date
thereof.  As often as reasonably
necessary during the period covered by any budget, Manager may submit to Owner
for its approval an updated budget or plan incorporating any changes as shall
be necessary to reflect cost over-runs and the like during the period.  If Owner does not disapprove any budget
within 30 days after receipt thereof by Owner, the budget shall be deemed
approved.  If Owner shall disapprove any
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 days of receipt of the notice of disapproval, and Owner
shall have 10 days to provide notice to Manager if it disapproves of any
revised budget or plan.  Manager will not
incur any costs other than those included in, and only to the extent provided
for (subject to reasonable deviation for changes in market costs), 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 a Property, or for the safety of occupants or other persons (or to
avoid the suspension of any necessary service at a 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 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 

 

6

 

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 these 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 requirements.  Owner authorizes Manager to disclose the
ownership of each Property by Owner to any officials.  Owner agrees to indemnify, protect, defend,
save and hold Manager and its stockholders, officers, directors, employees,
managers, successors and assigns (collectively, the “Manager Indemnified
Parties”) harmless of and from any and all Losses (as defined in Section 6.5(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.

 

2.7                                 Dealings with Advisor. Unless Owner specifically informs
Manager to the contrary, Advisor may perform any of the obligations or exercise
any of the rights of Owner under this Management Agreement.

 

ARTICLE
III

 

AUTHORITY
GRANTED TO MANAGER AND CERTAIN OWNER OBLIGATIONS

 

3.1                                 Authority As To
Tenants, Etc.  Owner agrees
and does hereby give Manager the following exclusive authority and powers (all
of which shall be exercised either in the name of Manager, as manager for
Owner, or in the name or Owner entered into by Manager as Owner’s authorized
agent, and Owner shall assume all expenses in connection with these 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 the
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 duly qualified and
licensed leasing personnel responsible for the leasing of each 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 or broker’s commission;
and Manager need not account for charges or commission to Owner;

 

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

 

7

 

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

 

(h)                                 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 the actions or suits, or reinstate the 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 the litigation.

 

3.2                                 Operational Authority. 
Owner agrees and does hereby give Manager the following exclusive
authority and powers (all of which shall be exercised either in the name of
Manager, as manager for Owner, or in the name of Owner entered into by Manager
as Owner’s authorized agent, and Owner shall assume all expenses in connection
with these 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 each Property, including
personnel spending a portion of their working hours (to be charged on a pro
rata basis) at each Property.  All
expenses of this employment shall be deemed operational expenses of the
Property (notwithstanding any possible implication to the contrary in Section 2.4(e)).;

 

(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 each Property;

 

(c)                                  to negotiate and enter into, as Manager
of each Property, contracts for all items on budgets that have been approved by
Owner, any repairs for items not exceeding $5,000, any emergency services, appropriate
service agreements and labor agreements for normal operation of each Property
with duly qualified and licensed Persons, 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 the Leases and
service agreements relating to each Property, and other services or any 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 each 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 contracts for the
foregoing services and utilities.  In
addition, Owner agrees to specifically assume in writing all obligations under
all these contracts so entered into by Manager, on behalf of Owner of the
Property, upon the termination of this Management Agreement, and Owner shall
indemnify, protect, save, defend and hold harmless Manager and the other
Indemnified Parties from and against any and all Losses resulting from, arising
out of or in any way related to these contracts and that relate to or concern
matters occurring after termination of this Management Agreement, but excluding
matters arising out of Manager’s willful misconduct, gross negligence or
unlawful acts.  Manager shall secure the
approval of, and execution of appropriate contracts 

 

8

 

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 duly
qualified and licensed 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 specific Property
of any one or more purchases or other expenditures, notwithstanding that
Manager may otherwise be authorized hereunder to make these 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 these
matters) to collect rents and 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 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 the endorsement.  Manager shall also have the exclusive
authority to collect and handle tenants’ security deposits, including the right
to apply the security deposits to unpaid rent, and to comply, on behalf of
Owner of each 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 the 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 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 these matters) to pay all
expenses of each 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 V below, then operational expenses
and then any mortgage indebtedness, including real estate tax and insurance
impounds, but only as directed by Owner in writing and only if sufficient Gross
Revenue is available for the payments. 
Nothing in this Management Agreement
shall be interpreted in a manner as to obligate Manager to pay from Gross
Revenue, any expenses incurred by Owner prior to the commencement of this Management Agreement, except to the
extent Owner advances additional funds to pay the expenses.

 

3.5                                 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 

 

9

 

harmless Manager and all of the other Manager
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 any 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 each Property to
any officials and agrees to indemnify, protect, defend, save and hold harmless Manager
and the other Manager Indemnified Parties 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 Management Agreement at
any time by written notice to Owner of its election so to do, which
cancellation shall be effective upon the service of the notice.  Cancellation shall not release the
indemnities of Owner set forth in this Management Agreement and shall not
terminate any liability or obligation of Owner to Manager for any payment,
reimbursement, or other sum of money then due and payable to Manager hereunder.

 

3.8                                 Extraordinary
Payments.  Owner
agrees to give adequate advance written notice to Manager if Owner desires that
Manager make any extraordinary payment, out of Gross Revenue, to the extent
funds are available after the payment of Manager’s compensation as provided for
herein and all operational expenses, of mortgage indebtedness, general taxes,
special assessments, or 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.  These costs and
expenses shall include the wages and salaries and other employee-related
expenses of all on-site and off-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 the 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 the
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.

 

10

 

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 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 1% of Gross Revenues of the
subject 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 tenant an amount
equal to not greater than 5% of the cost of the tenant improvements.  The Management Fees may include the
reimbursement of the specified cost incurred by the Manager of engaging another
person or entity to perform Manager’s responsibilities hereunder; provided,
however, that Manager shall be responsible for payment to third parties.
Nothing herein shall prevent Manager from entering fee-splitting arrangements
with third parties with respect to the Management Fees.

 

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 the
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 the overpayment or underpayment, as the
case may be.  If the audit discloses an
overpayment of Management Fees for any fiscal year of more than the correct
Management Fees for the fiscal year, Manager shall bear the cost of the 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 any hazards as Owner and
Manager shall deem appropriate, but in any event insurance sufficient to comply
with the Leases and Controlling 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, workers’ compensation and employer’s liability insurance
applicable to and covering all employees of Manager at the Properties, and
Manager shall furnish Owner certificates of insurers evidencing that the
insurance is in effect.  If any work
under this Management Agreement is subcontracted as permitted herein, Manager
shall 

 

11

 

include in each subcontract a provision that the
subcontractor shall also furnish Owner with the certificate.

 

6.2                                 Insurance
Expenses.  Premiums
and other expenses of 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 accident, claim, damage, or
destruction.  These reports shall be
given to Owner promptly, and any report not so given within 10 days after the
occurrence of any accident, claim, damage or destruction shall be noted in the
monthly operating statement delivered to Owner pursuant to Section 2.5(b) hereof.  Manager is authorized to settle any claim
against an insurance company arising out of any policy and, in connection with the
claim, to execute proofs of loss and adjustments of loss and to collect and
receipt for loss proceeds.

 

6.5                                 Indemnification.

 

(a)                                  On Termination. In the event
this Management 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 harmless Manager and all of the other Manager Indemnified
Parties 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 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 harmless Manager and all of the other Manager Indemnified Parties from
any and all Losses in connection with or in any way related to each Property
and from liability for damage to each Property and injuries to or death of any
person whomsoever, and damage to property; provided, however,
that the indemnification and exculpation shall not extend to any such Losses
arising out of the willful misconduct, gross negligence or unlawful acts (the
unlawfulness having been adjudicated by a court of proper jurisdiction) of
Manager, its agents, servants, or employees; provided, further,
that the indemnification and exculpation shall be limited to the extent that
Manager recovers insurance proceeds with respect to that matter. Manager shall
not be liable for any error of judgment or for any mistake of fact or law, or
for any thing that it may do or refrain from doing, except in cases of willful
misconduct, gross negligence or unlawful acts (the unlawfulness having been
adjudicated by a court of proper jurisdiction). Manager agrees to indemnify,
defend, protect, save and hold harmless Owner and its stockholders, officers,
directors, employees, managers, successors and assigns from any and all claims
or liability for any injury or damage to any person or property whatsoever for
which Manager is responsible occurring in, on, or about the Properties,
including, without limitation, the Improvements, when the injury or damage
shall be caused by the willful misconduct, gross negligence or unlawful acts (the
unlawfulness having been adjudicated by a court of proper jurisdiction) of
Manager, its 

 

12

 

agents, servants, or employees, except to the
extent that Owner recovers insurance proceeds with respect to such matter.

 

(c)                                  Limitations.
Notwithstanding anything to the contrary in this Management Agreement, any
indemnification and exculpation by the Owner under this Management Agreement is
subject to any limitations imposed under the Company’s Articles of
Incorporation or any amendments thereto.

 

ARTICLE
VII

 

TERM
AND TERMINATION

 

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

 

(a)                                  A decree or order is rendered by a court
having jurisdiction (i) adjudging Manager as bankrupt or insolvent, (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 petition, or to the appointment of a receiver or
liquidator or trustee or assignee in bankruptcy or insolvency for it or for a
substantial part of its property, (v) makes an assignment for the benefit
of creditors, (vi) is unable to or admits in writing its inability to pay
its debts generally as they become due unless 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 60 

 

13

 

days immediately following the date of 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 Management Agreement for services and expenses
prior to termination of this Management Agreement.  All provisions of this Management Agreement
that require Owner to have insured, or to protect, defend, save, hold and
indemnify or to reimburse Manager shall survive any expiration or termination
of this Management Agreement and, if Manager is or becomes involved in any
claim, proceeding or litigation by reason of having been Manager of Owner, such
provisions shall apply as if this Management Agreement were still in effect.

 

The parties understand and
agree that Manager may withhold funds for 60 days after the end of the month in
which this Management Agreement is terminated to pay bills previously incurred
but not yet invoiced and to close accounts. Should the funds withheld be
insufficient to meet the obligation of Manager to pay bills previously
incurred, Owner will, upon demand, advance sufficient funds to Manager to
ensure fulfillment of Manager’s obligation to do so, within 10 days of receipt
of notice and an itemization of any 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 any different addresses as either party shall have theretofore
advised the other party in writing in accordance with this Section 8.1.

 

	
   

  	
  Owner:

  	
   

  	
  BEHRINGER HARVARD OPERATING PARTNERSHIP II
  LP

  
	
   

  	
   

  	
  c/o Behringer Harvard
  REIT II, Inc.

  
	
   

  	
   

  	
  15601 Dallas Parkway

  
	
   

  	
   

  	
  Suite 600

  
	
   

  	
   

  	
  Addison, Texas 75001

  
	
   

  	
   

  	
  Attention: Chief Legal Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Manager:

  	
   

  	
  BEHRINGER HARVARD REIT II MANAGEMENT
  SERVICES, LLC

  
	
   

  	
   

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

 

14

 

8.3                                 Assignment.  Manager may assign or delegate partially or
in full its duties and rights under this Management Agreement and the fees and
compensation related thereto to a duly qualified and licensed Affiliate of Manager
without the approval of Owner. Any other assignment or delegation by Manager of
its duties and rights under this Management Agreement may be made 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 assigned or delegated by Manager and performed by a duly
qualified and licensed Person (“Submanager”) with whom Manager contracts
for the purpose of performing these duties. 
Owner specifically grants Manager the authority to enter into a contract
with a Submanager; provided that, unless Owner otherwise agrees in
writing with the Submanager, Owner shall have no liability or responsibility to
any 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
Submanager to agree, in the written agreement setting forth the duties and
obligations of the 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 indemnity shall not be required to the extent that
Owner recovers issuance proceeds with respect to that matter.  Any contract entered into between Manager and
a Submanager pursuant to this Section 8.3 shall be consistent with
the provisions of this Management Agreement, except to the extent Owner
otherwise specifically agrees in writing. 
This Management Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and permitted 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 the third party for
leasing services.  Upon the prior written
consent of Manager, Owner shall have the authority to enter into a contract for
leasing services with a duly qualified and licensed 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 the third party, and Owner agrees to indemnify Manager for all
Losses incurred by Manager as a result of acts of the 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 the Third Party Leasing Agreement, Manager shall have
no obligation to perform the 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 non-controlling interests in
Properties for which a duly qualified and licensed 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 the
third party, and Owner agrees to indemnify Manager for all Losses incurred by
Manager as a result of the acts of the 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 the Third Party Management Agreement,
Manager shall have no obligation to perform the services and Owner shall have
no obligation to Manager for compensation for the 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.

 

15

 

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 counterpart.

 

8.10                           Entire
Agreement.  This
Management Agreement (including the Property Amendments) 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 the litigation shall be entitled to recover from the other
party to the litigation the 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 the 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 Manager to
Owner under this Management Agreement is that of an independent contractor.

 

8.14                           No Third-Party Rights. 
Nothing expressed or referred to in this Management Agreement will be
construed to give any Person other than the parties to this Management
Agreement any legal or equitable right, remedy or claim under or with respect
to this Management Agreement or any provision of this Management Agreement,
except the 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.

 

 

16

 

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

 

 

	
   

  	
  BEHRINGER HARVARD REIT II, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President – Corporate

  
	
   

  	
   

  	
  Development & Legal

  
	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD OPERATING

  
	
   

  	
     PARTNERSHIP
  II LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Behringer Harvard REIT II, Inc.

  
	
   

  	
   

  	
  General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
  Executive Vice President – Corporate

  
	
   

  	
   

  	
   

  	
  Development & Legal

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  BEHRINGER HARVARD REIT II

  MANAGEMENT SERVICES, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President – Corporate

  
	
   

  	
   

  	
  Development & Legal

  
						

 

17

 

Form of Property Amendment

 

	
  Property
  Description:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Legal
  Name of Owner:

  	
   

  
	
   

  	
   

  
	
  Jurisdiction
  of Organization/Incorporation:

  	
   

  
	
   

  	
   

  
	
  Services
  to be Provided (if other than in Management Agreement):

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Alterations
  to basic terms and conditions of Management Agreement (if any):

  	
   

  
	
   

  	
   

  

 

 

	
   

  	
   

  	
  MANAGER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BEHRINGER HARVARD REIT II

  MANAGEMENT SERVICES, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
  Executive Vice President – Corporate

  
	
   

  	
   

  	
   

  	
  Development & Legal

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OWNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

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