Document:

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                                                                    EXHIBIT 10.2

                               ADVISORY AGREEMENT

         This ADVISORY AGREEMENT (this "AGREEMENT") is entered into on this the
____ day of June 2002, by and between BEHRINGER HARVARD REAL ESTATE INVESTMENT
TRUST I, INC., a Maryland corporation (the "COMPANY"), and BEHRINGER ADVISORS
LP, a Texas limited partnership (the "ADVISOR").

                                   WITNESSETH

         WHEREAS, the Company will be issuing shares of its common stock, par
value $.0001, to the public, such shares to be registered with the Securities
and Exchange Commission (the "SHARES") and may subsequently issue additional
securities other than such Shares (the "SECURITIES");

         WHEREAS, the Company intends to continue to qualify as a real estate
investment trust (a "REIT"), as defined below, and 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 (the "CODE"), as
defined below;

         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 of Directors of the Company, all as provided herein; and

         WHEREAS, the Advisor is willing to undertake to render such services,
subject to the supervision of the Board of Directors, 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 ONE

                                   DEFINITIONS

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

ACQUISITION EXPENSES. Any and all expenses incurred by the Company, the Advisor,
or any Affiliate of either in connection with the selection, acquisition or
development of any Asset, whether or not acquired, including, without
limitation, legal fees and expenses, travel and communications expenses, costs
of appraisals, nonrefundable option payments on property not acquired,
accounting fees and expenses, and title insurance premiums.

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ACQUISITION AND ADVISORY FEES. Any and all fees and commissions, exclusive of
Acquisition Expenses, paid by any person or entity to any other person or entity
(including any fees or commissions paid by or to any Affiliate of the Company or
the Advisor) in connection with identifying, reviewing, evaluating, investing in
or the purchase, development or construction of any Asset, including, without
limitation, real estate commissions, acquisition fees, finder's fees, selection
fees, nonrecurring management fees, consulting fees, loan fees, points, or any
other fees or commissions of a similar nature.

ADVISOR. Behringer Advisors LP, a Texas limited partnership, any successor
advisor to the Company, or any person or entity to which Behringer Advisors LP
or any successor advisor subcontracts substantially all of its functions.

AFFILIATE OR AFFILIATED. As to any individual, corporation, partnership, trust
or other association (other than the Excess Shares Trust), (i) any Person
directly or indirectly, through one or more intermediaries controlling,
controlled by, or under common control with another Person; (ii) any Person,
directly or indirectly owning or controlling ten percent (10%) or more of the
outstanding voting securities of another Person; (iii) any officer, director,
partner, or trustee of such Person; (iv) any Person ten percent (10%) or more of
whose outstanding voting securities are directly or indirectly owned,
controlled, or held, with power to vote, by such other Person; and (v) if such
other Person is an officer, director, partner, or trustee of a Person, the
Person for which such Person acts in any such capacity.

APPRAISED VALUE. Value according to an appraisal made by an Independent
Appraiser.

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 from time to time.

ASSETS. Properties and Mortgages owned, directly or indirectly through one or
more of its Affiliates, by the Company and any other investments made, directly
or indirectly through one or more of its Affiliates, by the Company, whether in
securities, loans or otherwise.

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 this Agreement.

AVERAGE INVESTED ASSETS. For a specified period, the average of the aggregate
book value of the assets of the Company invested, directly or indirectly, in
Properties and Loans secured by real estate before reserves for depreciation,
bad debts or other similar non-cash reserves, computed by taking the average of
such values at the end of each month during such period; provided, however, that
during such periods in which the Company is obtaining regular independent
valuations of the current value of its net assets for purposes of enabling
fiduciaries of employee benefit plan stockholders to comply with applicable
Department of Labor reporting requirements, "Average Invested Assets" will equal
the assets valuation established by the most recent such valuation report
without reduction for depreciation, bad debts or other similar non-cash
reserves.

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BOARD OF DIRECTORS. The Board of Directors of the Company.

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

CASH FROM FINANCINGS. Net cash proceeds realized by the Company from the
financing of Company Property or from the refinancing of any Company
indebtedness.

CASH FROM SALES. Net cash proceeds realized by the Company from the sale,
exchange or other disposition of any of its assets after deduction of all
expenses incurred in connection therewith. Cash from Sales shall not include
Cash from Financings.

CASH FROM SALES AND FINANCINGS. The total sum of Cash from Sales and Cash from
Financings.

CAUSE. With respect to the termination of this Agreement, fraud, criminal
conduct, willful misconduct or willful or negligent breach of fiduciary duty by
the Advisor, breach of this Agreement by the Advisor, or upon the filing of a
bankruptcy petition (either voluntary or involuntary) with respect to the
Advisor.

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
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.

COMPANY. Behringer Harvard Real Estate Investment Trust I, Inc., a corporation
organized under the laws of the State of Maryland.

COMPANY PROPERTY. Any and all property, real, personal or otherwise, tangible or
intangible, which is transferred or conveyed to the Company or the Partnership
(including all rents, income, profits and gains therefrom), and which is owned
or held by, or for the account of, the Company or the Partnership.

COMPETITIVE REAL ESTATE COMMISSION. A real estate or brokerage commission for
the purchase or sale of property which is reasonable, customary, and competitive
in light of the size, type, and location of the property. The total of all real
estate commissions paid by the Company to all Persons (including the
Subordinated Disposition Fee payable to the Advisor) in connection with any Sale
of one or more of the Company's Properties shall not exceed the lesser of (i) a
Competitive Real Estate Commission or (ii) 6% of the gross sales price of the
Property or Properties.

CONTRACT PURCHASE PRICE. The amount actually paid or allocated (as of the date
of purchase) to the purchase, development, construction or improvement of
Property, exclusive of Acquisition and Advisory Fees and Acquisition Expenses.

CONTRACT SALES PRICE. The total consideration received by the Company for the
sale of a Company Property.

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CUMULATIVE RETURN. For the period for which the calculation is being made, the
percentage resulting from dividing (A) the total Dividends paid on each
Dividends distribution date during such period (without regard to Dividends paid
out of Cash from Sales and Financings), by (B) the product of (i) the average
Invested Capital for such period (calculated on a daily basis), and (ii) the
number of years (including fractions thereof) elapsed during such period.

DIRECTOR. A member of the Board of Directors of the Company.

DIVIDENDS. Any dividends or other distributions of money or other property by
the Company to owners of Shares, including distributions that may constitute a
return of capital for federal income tax purposes.

EQUITY INTEREST. The stock of or other interests in, or warrants or other rights
to purchase the stock of or other interests in, any entity that has borrowed
money from the Company or that is a tenant of the Company or that is a parent or
controlling Person of any such borrower or tenant.

EQUITY SHARES. Transferable shares of beneficial interest of the Company of any
class or series, including common shares or preferred shares.

GOOD REASON. With respect to the termination of this Agreement, (i) any failure
to obtain a satisfactory agreement from any successor to the Company to assume
and agree to perform the Company's obligations under this Agreement; or (ii) any
material breach of this Agreement of any nature whatsoever by the Company.

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, the marketing support fee 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 Managing Dealer or a Soliciting Dealer
(where net proceeds to the Company are not reduced) shall be deemed to be
$10.00.

INDEPENDENT APPRAISER. A qualified appraiser of real estate as determined by the
Board of Directors. Membership in a nationally recognized appraisal society such
as the American Institute of Real Estate Appraisers ("M.A.I.") or the Society of
Real Estate Appraisers ("S.R.E.A.") shall be conclusive evidence of such
qualification.

INDEPENDENT DIRECTOR. A Director who is not and within the last two years has
not been directly or indirectly associated with the Advisor by virtue of (i)
ownership of an interest in the Advisor or its Affiliates, (ii) employment by
the Advisor or its Affiliates, (iii) service as an officer or director of the
Advisor or its Affiliates, (iv) performance of services, other than as a
Director, for the Company, (v) service as a director or trustee of more than
three real estate investment trusts organized by any Affiliate of the Advisor or
advised by the Advisor, or (vi) maintenance of a material business or
professional relationship with the Advisor or any of its Affiliates. A business
or professional relationship is considered material if the gross revenue derived
by the Director from the Advisor and Affiliates exceeds 5.0% of either the
Director's annual gross

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income during either of the last two years or the Director's net worth on a fair
market value basis. An indirect relationship shall include circumstances in
which a Director's spouse, parents, children, siblings, mothers- or
fathers-in-law, sons- or daughters-in-law, or brothers- or sisters-in-law is or
has been associated with the Advisor, any of its Affiliates, or the Company.

INDEPENDENT EXPERT. A Person with no material current or prior business or
personal relationship with the Advisor or the Directors and who is engaged to a
substantial extent in the business of rendering opinions regarding the value of
assets of the type held by the Company.

INVESTED CAPITAL. The amount calculated by multiplying the total number of
Shares purchased by Stockholders by the issue price, reduced by the portion of
any Dividend that is attributable to Net Sales Proceeds and by any amounts paid
by the Company to repurchase Shares pursuant to the Company's plan for
redemption of Shares.

JOINT VENTURES. The joint venture or general partnership arrangements in which
the Company or the Partnership is a co-venturer or general partner which are
established to acquire Properties.

LINE OF CREDIT. One or more lines of credit, the proceeds of which will be used
to acquire Properties and invest in Mortgages.

LISTING. The listing of the Shares of the Company on a national securities
exchange or over-the-counter market.

MANAGING DEALER. ______________________, an Affiliate of the Advisor, or such
entity selected by the Board of Directors to act as the managing dealer for an
Offering. ______________________ is a member of the National Association of
Securities Dealers, Inc.

MORTGAGES. In connection with mortgage financing provided or invested in by the
Company, the notes or other evidence of indebtedness or obligations, which are
secured or collateralized by Real Property owned by the borrower.

NET ASSET VALUE. The total assets of the Company (other than intangibles), at
cost, before deducting depreciation or other non-cash reserves, less total
liabilities, calculated quarterly by the Company on a basis consistently
applied.

NET INCOME. For any period, the total revenues applicable to such period, less
the total expenses applicable to such period excluding additions to reserves for
depreciation, bad debts or other similar non-cash reserves; provided, however,
Net Income for purposes of calculating total allowable Operating Expenses (as
defined herein) shall exclude the gain from the sale of the Company's assets.

NET SALES PROCEEDS. In the case of a transaction described in clause (i) (A) of
the definition of Sale, the proceeds of any such transaction less the amount of
all real estate commissions and closing costs paid by the Company. In the case
of a transaction described in clause (i) (B) of such definition, Net Sales
Proceeds means the proceeds of any such transaction less the amount of any legal
and other selling expenses incurred in connection with such transaction. In the
case of a

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transaction described in clause (i) (C) of such definition, Net Sales Proceeds
means the proceeds of any such transaction actually distributed to the Company
from the Joint Venture. In the case of a transaction or series of transactions
described in clause (i) (D) of the definition of Sale, Net Sales Proceeds means
the proceeds of any such transaction less the amount of all commissions and
closing costs paid by the Company. In the case of a transaction described in
clause (ii) of the definition of Sale, Net Sales Proceeds means the proceeds of
such transaction or series of transactions less all amounts generated thereby
and reinvested in one or more Properties within 180 days thereafter and less the
amount of any real estate commissions, closing costs, and legal and other
selling expenses incurred by or allocated to the Company in connection with such
transaction or series of transactions. Net Sales Proceeds shall also include, in
the case of any Property consisting of a building only, any amounts that the
Company determines, in its discretion, to be economically equivalent to proceeds
of a Sale. Net Sales Proceeds shall not include any reserves established by the
Company in its sole discretion.

OFFERING. Any public offering of Shares pursuant to a Prospectus which is
registered with the SEC.

OPERATING EXPENSES. All costs and expenses incurred by the Company, as
determined under generally accepted accounting principles, which in any way are
related to the operation of the Company or to Company business, including
advisory fees, but excluding (i) the expenses of raising capital such as
Organizational and Offering Expenses, legal, audit, accounting, underwriting,
brokerage, listing, registration, and other fees, printing and other such
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
loan reserves, (v) the Advisor's subordinated 10% share of Net Sales Proceeds,
(vi) the Performance Fee, (vii) the Subordinated Incentive Listing Fee, (viii)
the Property Management Fee and (ix) Acquisition and Advisory Fees and
Acquisition Expenses, real estate commissions on the sale of property, and other
expenses connected with the acquisition, and ownership of real estate interests,
mortgage loans or other property (such as the costs of foreclosure, insurance
premiums, legal services, maintenance, repair and improvement of property).

ORGANIZATIONAL AND OFFERING EXPENSES. Any and all costs and expenses, other than
selling commissions and the 2.5% dealer manager fee, incurred by the Advisor or
any Affiliate in connection with the formation, qualification and registration
of the Company and the marketing and distribution of its Shares, including,
without limitation, the following: legal, accounting and escrow fees; printing,
amending, supplementing, mailing and distributing costs; filing, registration
and qualification fees and taxes; telecopier and telephone costs; and all
advertising and marketing expenses, including the costs related to investor and
broker-dealer sales meetings. The Organizational and Offering Expenses paid by
the Company in connection with any Offering will not exceed 3.0% of the Gross
Proceeds raised in such Offering.

PARTNERSHIP. Behringer Harvard Operating Partnership L.P., a Texas limited
partnership, formed to own and operate properties on behalf of the Company.

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PERFORMANCE FEE. The fee payable to the Advisor upon termination of this
Agreement under certain circumstances if certain performance standards have been
met and the Subordinated Incentive Listing Fee has not been paid.

PERMANENT FINANCING. The financing to acquire Assets, to pay a fee of 4.5% of
any Permanent Financing as Acquisition and Advisory Fees, and to refinance
outstanding amounts on the Line of Credit.

PERSON. An individual, corporation, partnership, estate, trust (including a
trust qualified under Section 401(a) or 501(c) (17) of the Code), a portion of a
trust permanently set aside for or to be used exclusively for the purposes
described in Section 642(c) of the Code, association, private foundation within
the meaning of Section 509(a) of the Code, joint stock company or other entity,
or any government or any agency or political subdivision thereof.

PROPERTY OR PROPERTIES. As the context requires, (i) the real properties,
including the buildings located thereon, or (ii) the real properties only, or
(iii) the buildings only, which are acquired by the Company, either directly or
through joint venture arrangements or other partnerships.

PROSPECTUS. Prospectus has the meaning set forth in Section 2(10) of the
Securities Act of 1933, as amended (the "SECURITIES ACT"), including a
preliminary Prospectus, an offering circular as described in Rule 256 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 to the public.

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

REAL ESTATE ASSET VALUE. The amount actually paid or allocated to the purchase,
development, construction or improvement of a Property, exclusive of Acquisition
and Advisory Fees and Acquisition Expenses.

REGISTRATION STATEMENT. The Company's most currently filed Registration
Statement on Form S-11 with the Securities and Exchange Commission, of which the
Prospectus is a part.

REIT. A "real estate investment trust" organized 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 sells, grants, transfers, conveys, or relinquishes
its ownership of any Property or portion thereof, including the lease of any
Property consisting of the 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 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; or (C) any Joint Venture in which the Company or
the Partnership as a co-venturer or partner sells, grants,

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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, but (ii) not including any transaction
or series of transactions specified in clause (i) (A), (i) (B), or (i) (C) above
in which the proceeds of such transaction or series of transactions are
reinvested in one or more Properties within 180 days thereafter.

SECURITIES. Any Equity Shares, Excess Shares, as such term is defined in the
Company's Articles of Incorporation, any other stock, shares or other evidences
of equity or beneficial or other interests, voting trust certificates, bonds,
debentures, notes or other evidences of indebtedness, secured or unsecured,
convertible, subordinated or otherwise, or in general any instruments commonly
known as "securities" or any certificates of interest, shares or participations
in, temporary or interim certificates for, receipts for, guarantees of, or
warrants, options or rights to subscribe to, purchase or acquire, any of the
foregoing.

SHARES. Any shares of the Company's common stock, par value $.0001 per share,
previously issued by the Company pursuant to an effective registration statement
and shares currently registered with the Securities and Exchange Commission
pursuant to the Registration Statement.

SOLICITING DEALERS. Broker-dealers who are members of the National Association
of Securities Dealers, Inc., or that are exempt from broker-dealer registration,
and who, in either case, have executed participating broker or other agreements
with the Managing Dealer to sell Shares.

SPONSOR. Any Person directly or indirectly instrumental in organizing, wholly or
in part, the Company or any Person who will control, manage or participate in
the management of the Company, and any Affiliate of such Person. Not included is
any Person whose only relationship with the Company is that of an independent
property manager of Company assets, and whose only compensation is as such.
Sponsor does not include wholly independent third parties such as attorneys,
accountants, and underwriters whose only compensation is for professional
services.

STOCKHOLDERS. The record holders of the Company's Shares as maintained in the
Company's books and records.

STOCKHOLDERS' 8.0% RETURN. As of each date, an aggregate amount equal to an 8.0%
cumulative, noncompounded, annual return on Invested Capital.

SUBORDINATED DISPOSITION FEE. The Subordinated Disposition Fee as defined in
Section 3.01(c).

SUBORDINATED INCENTIVE LISTING FEE. The fee payable to the Advisor under certain
circumstances if the Shares are listed on a national securities exchange or
over-the-counter market as defined in Section 3.01(e).

SUBORDINATED SHARE OF NET SALE PROCEEDS. The Subordinated Share of Net Sales
Proceeds as defined in Section 3.01(d).

TERMINATION DATE. The date of termination of the Agreement.

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TOTAL PROPERTY COST. With regard to any Company Property, an amount equal to the
sum of the Real Estate Asset Value of such Property plus the Acquisition and
Advisory Fees and Acquisition Expenses paid in connection with such Property.

2%/25% GUIDELINES. The requirement pursuant to the guidelines of the North
American Securities Administrators Association, Inc. that, in any 12 month
period, total Operating Expenses not exceed the greater of 2% of the Company's
Average Invested Assets during such 12 month period or 25% of the Company's Net
Income over the same 12 month period.

VALUATION. An estimate of value of the assets of the Company as determined by an
Independent Expert.

                                   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 such appointment.

2.02 DUTIES OF THE ADVISOR. The Advisor undertakes to use its best efforts to
present to the Company potential investment opportunities and to provide a
continuing and suitable investment program consistent with the investment
objectives and policies of the Company as determined and adopted from time to
time by the Board of Directors. In performance of this undertaking, subject to
the supervision of the Board of Directors and consistent with the provisions of
the Prospectus, Articles of Incorporation and Bylaws of the Company, the Advisor
shall, either directly or by engaging an Affiliate:

         (a) serve as the Company's investment and financial advisor and provide
         research and economic and statistical data in connection with the
         Company's assets and investment policies;

         (b) provide the daily management of the Company and perform and
         supervise the various administrative functions reasonably necessary for
         the management 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 uncertificated
         Shares, if any, and acting as transfer agent for the Company's
         uncertificated Shares, if any;

         (d) investigate, select, and, on behalf of the Company, engage and
         conduct business with such Persons as the Advisor deems necessary to
         the proper performance of its obligations hereunder, including but not
         limited to consultants, accountants, correspondents, lenders, technical
         advisors, attorneys, brokers, underwriters, corporate

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         fiduciaries, escrow agents, depositaries, custodians, agents for
         collection, insurers, insurance agents, banks, builders, developers,
         property owners, mortgagors, and any and all agents for any of the
         foregoing, including Affiliates of the Advisor, and 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 of Directors and assist the
         Board of Directors in the formulation and implementation of the
         Company's financial policies, and, as necessary, furnish the Board of
         Directors 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 paragraphs (g) and (h) hereof, (i)
         locate, analyze and select potential investments in Properties, (ii)
         structure and negotiate the terms and conditions of transactions
         pursuant to which investment in Properties will be made; (iii) make
         investments in Properties 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, Property; and (v) enter into leases and service contracts for
         Company Property and, to the extent necessary, perform all other
         operational functions for the maintenance and administration of such
         Company Property;

         (g) provide the Board of Directors with periodic reports regarding
         prospective investments in Properties;

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

         (i) negotiate on behalf of the Company with banks or lenders for loans
         to be made to the Company, and negotiate on behalf of the Company with
         investment banking firms and broker-dealers or negotiate private sales
         of Shares and Securities or obtain loans for the Company, 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 the Advisor or its
         Affiliates), where appropriate, concerning the value of investments or
         contemplated investments of the Company in Properties;

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

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         (l) provide the Company with all necessary cash management services;

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

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

         (o) notify the Board of Directors of all proposed material transactions
         before they are completed.

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 of Directors over the
         management of the Company, the Board of Directors hereby delegates to
         the Advisor the authority to (1) locate, analyze and select investment
         opportunities, (2) structure the terms and conditions of transactions
         pursuant to which investments will be made or acquired for the Company
         or the Partnership, (3) acquire Properties in compliance with the
         investment objectives and policies of the Company, (4) arrange for
         financing or refinancing of Properties, (5) enter into leases and
         service contracts for the Company's Properties, including oversight of
         Affiliated companies that perform property management services for the
         Company, (6) oversee non-affiliated property managers and other
         non-affiliated Persons who perform services for the Company, and (7)
         undertake accounting and other record-keeping functions at the Property
         level.

         (b) Notwithstanding the foregoing, any investment in Properties,
         including any acquisition of Property by the Company or the Partnership
         (as well as any financing acquired by the Company or the Partnership in
         connection with such acquisition), will require the prior approval of
         the Board of Directors.

         (c) If a transaction requires approval by the Independent Directors,
         the Advisor will deliver to the Independent Directors all documents
         required by them to properly evaluate the proposed investment in the
         Property.

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

         The Board of Directors 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 of Directors so modifies or revokes the authority
contained herein, the Advisor shall henceforth submit to the Board of Directors
for prior approval such proposed transactions involving investments in Property
as thereafter require prior approval, provided however, that such modification
or

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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 such 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 such account or accounts, and
disburse from any such account or accounts, any money on behalf of the Company,
under such terms and conditions as the Board of Directors may approve, provided
that no funds shall be commingled with the funds of the Advisor; and the Advisor
shall from time to time render appropriate accountings of such collections and
payments to the Board of Directors and to the auditors of the Company.

2.05 RECORDS; ACCESS. The Advisor shall maintain appropriate records of all its
activities hereunder and make such records available for inspection by the Board
of Directors 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, its Shares or its Securities, or otherwise not be permitted by the
Articles of Incorporation or Bylaws of the Company, except if such action shall
be ordered by the Board of Directors, in which case the Advisor shall notify
promptly the Board of Directors of the Advisor's judgment of the potential
impact of such action and shall refrain from taking such action until it
receives further clarification or instructions from the Board of Directors. In
such event the Advisor shall have no liability for acting in accordance with the
specific instructions of the Board of Directors so given. Notwithstanding the
foregoing, the Advisor, its directors, officers, employees and stockholders, and
stockholders, directors and officers of the Advisor's Affiliates shall not be
liable to the Company or to the Board of Directors or Stockholders for any act
or omission by the Advisor, its directors, officers or employees, or
stockholders, directors or officers of the Advisor's Affiliates except as
provided in Paragraphs 20 and 21 of this Agreement.

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

2.08 OTHER ACTIVITIES OF THE ADVISOR. Nothing herein contained shall prevent the
Advisor from engaging in other activities, including, without limitation, the
rendering of advice to other

                                      -12-
<PAGE>

Persons (including other REIT's) 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 partnership, corporation, firm,
individual, trust or association. 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 of Directors 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 partnership, corporation, firm, individual,
trust or association. The Advisor or its Affiliates shall promptly disclose to
the Board of Directors knowledge of such condition or circumstance. 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 of
Directors (including the Independent Directors) to adopt the method set forth in
the Prospectus or another reasonable method by which properties are to be
allocated to the competing investment entities and to use their best efforts to
apply such method fairly to the Company.

         The Advisor shall be required to use its best efforts to present a
continuing and suitable investment program to the Company which is consistent
with the investment policies and objectives of the Company, but neither the
Advisor nor any Affiliate of the Advisor shall be obligated generally to present
any particular investment opportunity to the Company even if the opportunity is
of character which, if presented to the Company, could be taken by the Company.
The Advisor or its Affiliates may make such an investment in a property only
after (i) such investment has been offered to the Company and all public
partnerships and other investment entities affiliated with the Company with
funds available for such investment and (ii) such investment is found to be
unsuitable for investment by the Company, such partnerships and investment
entities.

         In the event that the Advisor or its Affiliates is presented with a
potential investment which might be made by the Company and by another
investment entity which the Advisor or its Affiliates advises or manages, the
Advisor shall consider the investment portfolio of each entity, cash flow of
each entity, the effect of the acquisition on the diversification of each
entity's portfolio, rental payments during any renewal period, the estimated
income tax effects of the purchase on each entity, the policies of each entity
relating to leverage, the funds of each entity available for investment and the
length of time such funds have been available for investment. In the event that
an investment opportunity becomes available which is suitable for both the
Company and a public or private entity which the Advisor or its Affiliates are
Affiliated, then the entity which has had the longest period of time elapse
since it was offered an investment opportunity will first be offered the
investment opportunity. The Advisor may consider the property for private
placement only if such property is deemed inappropriate for any investment
entity which is advised or managed by the Advisor, including the Company.

                                      -13-
<PAGE>

                                   ARTICLE III

                                  COMPENSATION

3.01     FEES.

         (a) Asset Management Fee. The Company shall pay the Advisor a monthly
         Asset Management Fee in an amount equal to one-twelfth of one-half
         percent (0.5%) of Average Invested Assets as of the preceding month.
         The Asset Management Fee may or may not be taken, in whole or in part
         as to any year, in the sole discretion of the Advisor. All or any
         portion of the Asset Management Fee not taken as to any fiscal year
         shall be deferred without interest and may be taken in such other
         fiscal year as the Advisor shall determine.

         (b) Acquisition and Advisory Fees. The Company shall pay the Advisor a
         fee in the amount of 3.0% of Average Invested Assets as Acquisition and
         Advisory Fees. The total of all Acquisition and Advisory Fees and any
         Acquisition Expenses shall be limited in accordance with the Articles
         of Incorporation.

         (c) Subordinated Disposition Fee. If the Advisor or an Affiliate
         provides a substantial amount of the services (as determined by a
         majority of the Independent Directors) in connection with the Sale of
         one or more Properties, the Advisor or an Affiliate shall receive a
         Subordinated Disposition Fee equal to the lesser of (i) one-half of a
         Competitive Real Estate Commission or (ii) 3.0% of the sales price of
         such Property or Properties. The Subordinated Disposition Fee will be
         paid only if Stockholders have received total Dividends in an amount
         equal to the sum of their aggregate Invested Capital and their
         aggregate Stockholders' 8.0% Return. To the extent that Subordinated
         Disposition Fees are not paid by the Company on a current basis due to
         the foregoing limitation, the unpaid fees will be accrued and paid at
         such time as the subordination conditions have been satisfied. The
         Subordinated Disposition Fee may be paid in addition to real estate
         commissions paid to non-Affiliates, provided that the total real estate
         commissions paid to all Persons by the Company shall not exceed an
         amount equal to the lesser of (i) 6.0% of the Contract Sales Price of a
         Property or (ii) the Competitive Real Estate Commission. In the event
         this Agreement is terminated prior to such time as the Stockholders
         have received total Dividends in an amount equal to 100% of Invested
         Capital plus an amount sufficient to pay the Stockholders' 8.0% Return
         through the Termination Date, an appraisal of the Properties then owned
         by the Company shall be made and the Subordinated Disposition Fee on
         Properties previously sold will be deemed earned if the Appraised Value
         of the Properties then owned by the Company plus total Dividends
         received prior to the Termination Date equals 100% of Invested Capital
         plus an amount sufficient to pay the Stockholders' 8.0% Return through
         the Termination Date. Upon Listing, if the Advisor has accrued but not
         been paid such Subordinated Disposition Fee, then for purposes of
         determining whether the subordination conditions have been satisfied,
         Stockholders will be deemed to have received Dividends in the amount
         equal to the product of the total number of Shares outstanding and the
         average closing price of the

                                      -14-
<PAGE>

         Shares over a period, beginning 180 days after Listing, of 30 days
         during which the Shares are traded.

         (d) Subordinated Share of Net Sales Proceeds. The Subordinated Share of
         Net Sales Proceeds shall be payable to the Advisor in an amount equal
         to 10% of Net Sales Proceeds remaining after the Stockholders have
         received Dividends equal to the sum of the Stockholders' 8.0% Return
         and 100% of Invested Capital. Following Listing, no Subordinated Share
         of Net Sales Proceeds will be paid to the Advisor.

         (e) Subordinated Incentive Listing Fee. Upon Listing, the Advisor shall
         be entitled to the Subordinated Incentive Listing Fee in an amount
         equal to 10.0% of the amount by which (i) the market value of the
         outstanding stock of the Company, measured by taking the average
         closing price or average of bid and asked price, as the case may be,
         over a period of 30 days during which the stock is traded, with such
         period beginning 180 days after Listing (the "MARKET VALUE"), plus the
         total of all Dividends paid to Stockholders from the Company's
         inception until the date of Listing, exceeds (ii) the sum of (A) 100%
         of Invested Capital and (B) the total Dividends required to be paid to
         the Stockholders in order to pay the Stockholders' 8.0% Return from
         inception through the date of Listing. The Company shall have the
         option to pay such fee in the form of cash, Shares, a promissory note
         or any combination of the foregoing. The Subordinated Incentive Listing
         Fee will be reduced by the amount of any prior payment to the Advisor
         of a deferred, Subordinated Share of Net Sales Proceeds from a Sale or
         Sales of a Property. In the event the Subordinated Incentive Listing
         Fee is paid to the Advisor following Listing, no Performance Fee will
         be paid to the Advisor.

         (f) Loans from Affiliates. If any loans are made to the Company by an
         Affiliate of the Advisor, the maximum amount of interest that may be
         charged by such Affiliate shall be the lesser of (i) 1.0% above the
         prime rate of interest charged from time to time by Bank of America,
         N.A. and (ii) the rate that would be charged to the Company by
         unrelated lending institutions on comparable loans for the same
         purpose. The terms of any such loans shall be no less favorable than
         the terms available between non-Affiliated Persons for similar
         commercial loans.

         (g) Changes to Fee Structure. In the event of Listing, the Company and
         the Advisor shall negotiate in good faith to establish a fee structure
         appropriate for a perpetual-life entity. A majority of the Independent
         Directors must approve the new fee structure negotiated with the
         Advisor. In negotiating a new fee structure, the Independent Directors
         shall consider all of the factors they deem relevant, including, but
         not limited to: (i) the amount of the advisory fee in relation to the
         asset value, composition and profitability of the Company's portfolio;
         (ii) the success of the Advisor in generating opportunities that meet
         the investment objectives of the Company; (iii) the rates charged to
         other REITs and to investors other than REITs by Advisors performing
         the same or similar services; (iv) additional revenues realized by the
         Advisor and its Affiliates through their relationship with the Company,
         including loan administration, underwriting or broker commissions,
         servicing, engineering, inspection and other fees, whether paid by the
         Company or by others with whom the Company does business; (v) the
         quality and extent of service and

                                      -15-
<PAGE>

         advice furnished by the Advisor; (vi) the performance of the investment
         portfolio of the Company, including income, conversion or appreciation
         of capital, and number and frequency of problem investments and
         competence in dealing with distress situations; and (vii) the quality
         of the Property portfolio of the Company in relationship to the
         investments generated by the Advisor for its own account. The new fee
         structure can be no more favorable to the Advisor than the current fee
         structure.

3.02     EXPENSES.

         (a) In addition to the compensation paid to the Advisor pursuant to
         Section 3.01 hereof, the Company shall pay directly or reimburse the
         Advisor for all of the expenses paid or incurred by the Advisor in
         connection with the services it provides to the Company pursuant to
         this Agreement, including, but not limited to:

                  (i) the Company's Organizational and Offering Expenses;
                  provided, however, that within 60 days after the end of the
                  month in which an Offering terminates, the Advisor shall
                  reimburse the Company for any Organizational and Offering
                  Expenses reimbursement received by the Advisor pursuant to
                  this Section 3.02, to the extent that such reimbursement
                  exceeds 3.0% of the Gross Proceeds. The Advisor shall be
                  responsible for the payment of all the Company's
                  Organizational and Offering Expenses in excess of 3.0% of the
                  Gross Proceeds;

                  (ii) Acquisition Expenses incurred in connection with the
                  selection and acquisition of Properties in an amount equal to
                  up to 0.5% of Gross Proceeds;

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

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

                  (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 of Directors;

                  (vii) expenses of managing and operating Properties owned by
                  the Company, whether payable to an Affiliate of the Company or
                  a non-affiliated Person.

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

                                      -16-
<PAGE>

                  (ix) expenses associated with Listing or with the issuance and
                  distribution of Shares and Securities, such as selling
                  commissions and fees, advertising expenses, taxes, legal and
                  accounting fees, Listing and registration fees, and other
                  Organization and Offering Expenses;

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

                  (xi) expenses of organizing, revising, amending, converting,
                  modifying, or terminating the Company or the Articles of
                  Incorporation;

                  (xii) expenses 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) administrative service expenses (including personnel
                  costs; provided, however, that no reimbursement shall be made
                  for costs of personnel to the extent that such personnel
                  perform services in transactions 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. The Advisor shall prepare a statement
         documenting the expenses of the Company during each quarter, and shall
         deliver such statement to the Company within 45 days after the end of
         each quarter.

3.03 OTHER SERVICES. Should the Board of Directors request that the Advisor or
any director, officer or employee thereof render services for the Company other
than set forth in Section 2.02, such services shall be separately compensated at
such rates and in such amounts as are agreed by the Advisor and the Independent
Directors of the Company, 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.

3.04 REIMBURSEMENT TO THE ADVISOR. The Company shall not reimburse the Advisor
at the end of any fiscal quarter for Operating Expenses (including the Asset
Management Fee) that, 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 such year. Any Excess Amount paid to
the Advisor during a fiscal quarter shall be repaid to the Company. If there is
an Excess Amount in any Expense Year and the Independent Directors determine
that such excess was justified, based on unusual and nonrecurring factors which
they deem sufficient, the Excess Amount may be carried over and included in
Operating Expenses in subsequent Expense Years, and reimbursed to the Advisor in
one or more of such years, provided that Operating Expenses in any Expense Year,
including any Excess Amount to be paid to the Advisor, shall not exceed the
2%/25% Guidelines. Within 60 days after the end of any fiscal

                                      -17-
<PAGE>

quarter of the Company for which total Operating Expenses for the Expense Year
exceed the 2%/25% Guidelines, there shall be sent to the Stockholders a written
disclosure of such fact, together with an explanation of the factors the
Independent Directors considered in determining that such excess expenses were
justified. Such determination shall be reflected in the minutes of the meetings
of the Board of Directors. 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 the foregoing
computation shall be determined in accordance with generally accepted accounting
principles applied on a consistent basis.

3.05 BOARD OF DIRECTOR APPROVAL. The compensation and reimbursements paid by the
Company to the Advisor and its Affiliates shall be approved by a majority of the
Directors (including a majority of the Independent Directors) as being fair and
reasonable to the Company.

                                   ARTICLE IV

                              TERM AND TERMINATION

4.01 TERM; RENEWAL. This Agreement shall continue in force until June 1, 2003,
subject to an unlimited number of successive one-year renewals upon mutual
consent of the parties. It is the duty of the Board of Directors to evaluate the
performance of the Advisor annually before renewing the Agreement, and each such
renewal shall be for a term of no more than one year.

4.02 TERMINATION. This Agreement may be terminated (a) upon 60 days written
notice without Cause or penalty, by either party (upon approval of a majority of
the Independent Directors of the Company or a majority of the Board of Directors
of the Advisor, as the case may be); (b) immediately by the Company for Cause;
and (c) immediately by the Advisor for Good Reason.

4.03 PAYMENTS TO AND DUTIES OF ADVISOR UPON TERMINATION. Payments to the Advisor
pursuant to this Section 4.03 shall be subject to the 2%/25% Guidelines to the
extent applicable.

         (a) After the Termination Date, the Advisor shall not be entitled to
         compensation for further services hereunder except it shall be entitled
         to receive from the Company within 30 days after the effective date of
         such termination all unpaid reimbursements of expenses and all earned
         but unpaid fees payable to the Advisor prior to termination of this
         Agreement.

         (b) Upon termination, the Advisor shall be entitled to payment of the
         Performance Fee if performance standards satisfactory to a majority of
         the Board of Directors, including a majority of the Independent
         Directors, when compared to (a) the performance of the Advisor in
         comparison with its performance for other entities, and (b) the
         performance of other advisors for similar entities, have been met. If
         Listing has not occurred, the Performance Fee, if any, shall equal 10%
         of the amount, if any, by which (i) the appraised value of the assets
         of the Company on the Termination Date, less the amount of all
         indebtedness secured by such assets, plus the total Dividends paid to
         Stockholders from the Company's inception through the Termination Date,
         exceeds (ii)

                                      -18-
<PAGE>

         Invested Capital plus an amount equal to the Stockholders' 8% Return
         from inception through the Termination Date. The Advisor shall be
         entitled to receive all accrued but unpaid compensation and expense
         reimbursements in cash within 30 days of the Termination Date. All
         other amounts payable to the Advisor in the event of a termination
         shall be evidenced by a promissory note and shall be payable from time
         to time.

         (c) The Performance Fee shall be paid in 12 equal quarterly
         installments without interest on the unpaid balance; provided, however,
         that no payment will be made in any quarter in which such payment would
         jeopardize the Company's REIT status, in which case any such payment or
         payments will be delayed until the next quarter in which payment would
         not jeopardize REIT status. Notwithstanding the preceding sentence, any
         amounts which may be deemed payable at the date the obligation to pay
         the Performance Fee is incurred which relate to the appreciation of the
         Company's assets shall be an amount which provides compensation to the
         Advisor only for that portion of the holding period for the respective
         assets during which the Advisor provided services to the Company.

         (d) If Listing occurs, the Performance Fee, if any, payable thereafter
         will be as negotiated between the Company and the Advisor. The Advisor
         shall not be entitled to payment of the Performance Fee in the event
         this Agreement is terminated because of failure of the Company and the
         Advisor to establish, pursuant to Section 3.01(g) hereof, a fee
         structure appropriate for a perpetual-life entity at such time, if any,
         as Listing occurs.

         (e) The Advisor shall promptly upon termination:

                  (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 of Directors 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 of Directors;

                  (iii) deliver to the Board of Directors all assets, including
                  Properties, 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. The Company shall indemnify and hold
harmless the Advisor and its Affiliates, including their respective officers,
directors, partners and employees,

                                      -19-
<PAGE>

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 or the Articles of Incorporation of
the Company. Notwithstanding the foregoing, 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. Any indemnification of the Advisor may be made
only out of the net assets of the Company and not from Stockholders.

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 such
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, willful misfeasance, misconduct, negligence or reckless disregard of its
duties, but the Advisor shall not be held responsible for any action of the
Board of Directors in following or declining to follow any advice or
recommendation given by the Advisor.

5.03 FIDELITY BOND. The Advisor shall maintain a fidelity bond for the benefit
of the Company which bond shall insure the Company from losses of up to $200,000
per occurrence and shall be of the type customarily purchased by entities
performing services similar to those provided to the Company by the Advisor.

                                   ARTICLE VI

                                  MISCELLANEOUS

6.01 ASSIGNMENT TO AN AFFILIATE. This Agreement may be assigned by the Advisor
to an Affiliate with the approval of a majority of the Board of Directors
(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 of Directors. This Agreement shall 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 such 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.

6.02 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 such partners or joint venturers or impose any
liability as such on either of them.

6.03 NOTICES. Any notice, report or other communication required or permitted to
be given hereunder shall be in writing unless some other method of giving such
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:

                                      -20-
<PAGE>

<Table>
<S>                                            <C>
To the Directors and to the Company:           Behringer Harvard Real Estate Investment Trust I, Inc.
                                               1323 N. Stemmons Freeway
                                               Suite 210
                                               Dallas, Texas 75207

To the Advisor:                                Behringer Advisors LP
                                               1323 N. Stemmons Freeway
                                               Suite 201
                                               Dallas, Texas 75207
</Table>

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
6.02.

6.04 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 assignees.

6.05 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.

6.06 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.

6.07 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.

6.08 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 such 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 such waiver.

                                      -21-
<PAGE>

6.09 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.

6.10 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.

6.11 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.

6.12 NAME. Behringer Advisors LP has a proprietary interest in the name
"Behringer." Accordingly, and in recognition of this right, if at any time the
Company ceases to retain Behringer Advisors LP or an Affiliate thereof to
perform the services of Advisor, the Company will, promptly after receipt of
written request from Behringer Advisors LP, cease to conduct business under or
use the name "Behringer" or any diminutive thereof and the Company shall use its
best efforts to change the name of the Company to a name that does not contain
the name "Behringer" or any other word or words that might, in the sole
discretion of the Advisor, be susceptible of indication of some form of
relationship between the Company and the Advisor or any Affiliate thereof.
Consistent with the foregoing, it is specifically recognized that the Advisor or
one or more of its Affiliates has in the past and may in the future organize,
sponsor or otherwise permit to exist other investment vehicles (including
vehicles for investment in real estate) and financial and service organizations
having "Behringer" as a part of their name, all without the need for any consent
(and without the right to object thereto) by the Company or its Board of
Directors.

6.13 INITIAL INVESTMENT. The Advisor or one of its Affiliates has contributed
$200,000 (the "INITIAL INVESTMENT") in exchange for 20,000 units of limited
partnership interest ("UNITS") in the Partnership. The Advisor or its Affiliates
may not sell any of the Units purchased with the Initial Investment while the
Advisor acts in such advisory capacity to the Company, provided, that such Units
may be transferred in connection with the exercise of the Advisor's right under
the Partnership Agreement of the Partnership to exchange its Units for Shares,
in which case similar restrictions on transfer will apply to the Shares received
by the Advisor. The restrictions included above shall not apply to any Shares
acquired by the Advisor or its Affiliates other than the Units acquired through
the Initial Investment or Shares acquired in exchange for the Units acquired
through the Initial Investment. The Advisor shall not vote any Shares it now
owns, 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.

                                      -22-
<PAGE>

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

                                        BEHRINGER HARVARD REAL
                                        ESTATE INVESTMENT TRUST I, INC.

                                        By:
                                           --------------------------------
                                             Robert M. Behringer, President

                                        BEHRINGER ADVISORS LP

                                        By:
                                           --------------------------------
                                             Robert M. Behringer, President

                                      -23-<PAGE>

                                                                    EXHIBIT 10.3

                    PROPERTY MANAGEMENT AND LEASING AGREEMENT

This PROPERTY MANAGEMENT AND LEASING AGREEMENT (this "Management Agreement") is
made and entered into as of the ____ day of June, 2002, by and among BEHRINGER
HARVARD REAL ESTATE INVESTMENT TRUST I, INC., a Maryland corporation ("BH
REIT"), BEHRINGER HARVARD OPERATING PARTNERSHIP I LP, a Texas limited
partnership ("BH OP"), and HPT MANAGEMENT SERVICES LP, Texas limited partnership
(the "Manager").

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

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

1.1 "Affiliate" means a person who is (i) in the case of an individual, any
relative of such person, (ii) any officer, director, trustee, partner, manager,
employee or holder of ten percent (10%) or more of any class of the voting
securities of or equity interest in such person; (iii) any corporation,
partnership, limited liability company, trust or other entity controlling,
controlled by or under common control with such person; or (iv) any officer,
director, trustee, partner, manager, employee or holder of ten percent (10%) or
more of the outstanding voting securities of any corporation, partnership,
limited liability company, trust or other entity controlling, controlled by or
under common control with such person. For purposes of this definition, the term
"controls," "is controlled by," or "is under common control with" shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of an entity, whether through ownership of voting
rights, by contract or otherwise.

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

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

<PAGE>

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

1.5 "Management Fees" has the meaning set forth in Section 5.1 hereof.

1.6 "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.

1.7 "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.

                                   ARTICLE II

                APPOINTMENT OF MANAGER; SERVICES TO BE PERFORMED

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

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

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

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

         (b) Maintenance. Manager shall cause the Properties to be maintained in
the same manner as similar properties in the area. Manager's duties and
supervision in this respect shall include, without limitation, cleaning of the
interior and the exterior of the Improvements and the public common areas on the
Properties and the making and supervision of repair, alterations, and decoration
of the Improvements, subject to and in strict compliance with this Management
Agreement and the Leases. Construction activities undertaken by Manager, if any,
will be limited to activities related to the management, operation, maintenance,
and leasing of the Property (e.g., repairs, renovations, and leasehold
improvements).

         (c) Leasing Functions. Manager shall coordinate the leasing of the
Properties and shall negotiate and use its best efforts to secure executed
leases from qualified tenants, and to execute same on

                                      -2-
<PAGE>

behalf of Owner, if requested, for available space in the Properties, such
leases to be in form and on terms approved by Owner and Manager, and to bring
about complete leasing of the Properties. Manager shall be responsible for the
hiring of all leasing agents, as necessary for the leasing of the Properties,
and to otherwise oversee and manage the leasing process on behalf of Owner.

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

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

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

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

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

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

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

                                      -3-
<PAGE>

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

                  (iii) By the 15th day after the end of each month, Manager
                  shall forward to Owner net operating proceeds from the
                  preceding month, retaining at all times, however a reserve of
                  $5,000, in addition to any amounts otherwise provided in the
                  budget.

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

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

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

2.5 Accounting, Records and Reports.

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

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

                  (i) Rental collection record;

                  (ii) Monthly operating statement;

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

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

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

                                      -4-
<PAGE>

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

         (c) Budgets and Leasing Plans. Not later than November 15 of each
calendar year, Manager shall prepare and submit to Owner for its approval an
operating budget and a marketing and leasing plan on each Property for the
calendar year immediately following such submission. In connection with any
acquisition of a Property by Owner, Manager shall prepare a budget and marketing
and leasing plan for the remainder of the calendar year. The budget and
marketing and leasing plan shall be in the form of the budget and plan approved
by Owner prior to the date thereof. As often as reasonably necessary during the
period covered by any such budget, Manager may submit to Owner for its approval
an updated budget or plan incorporating such changes as shall be necessary to
reflect cost over-runs and the like during such period. If Owner does not
disapprove any such budget within 30 days after receipt thereof by Owner, such
budget shall be deemed approved. If Owner shall disapprove any such budget or
plan, it shall so notify Manager within said 30-day period and explain the
reasons therefor. Manager will not incur any costs other than those estimated in
any budget except for:

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

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

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

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

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

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

         (d) Legal Requirements. Manager shall execute and file when due all
forms, reports, and returns required by law relating to the employment of its
personnel. Manager shall be responsible for notifying Owner in the event it
receives notice that any Improvement on a Property or any equipment therein does
not comply with the requirements of any statute, ordinance, law or regulation of
any governmental body or of any public authority or official thereof having or
claiming to have jurisdiction thereover. Manager shall promptly forward to Owner
any complaints, warnings, notices or summonses received by it relating to such
matters. Owner represents that to the best of its knowledge each of its
Properties and any equipment thereon is or will upon acquisition by Owner comply
with all such requirements. Owner authorizes Manager to disclose the ownership
of the Property by Owner to any such officials. Owner agrees to indemnify,
protect, defend, save and hold Manager and its shareholders, officers,
directors, employees, Managers, successors and assigns ( collectively,
"Indemnified Parties") harmless of and from any and all Losses which 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.

                                      -5-
<PAGE>

                                   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 such matters):

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

         (b) to lease the Properties to tenants;

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

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

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

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

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

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

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

         (a) to hire, supervise, discharge, and pay all labor required for the
operation and maintenance of each Property including but not limited to on site
personnel, managers, assistant managers, leasing consultants, engineers,
janitors, maintenance supervisors and other employees required for the operation
and maintenance of the Property, including personnel spending a portion of their
working hours (to be

                                      -6-
<PAGE>

charged on a pro rata basis) at the Property (all of whom shall be deemed
employees of the Property, not of Manager). All expenses of such employment
shall be deemed operational expenses of the Property.

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

         (c) to negotiate and enter into, as Manager of Owner of the Property,
contracts for all items on budgets that have been approved by Owner, any
emergency services or repairs for items not exceeding $5,000, appropriate
service agreements and labor agreements for normal operation of the Property,
which have terms not to exceed 3 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 the Property, and
other services or such of them as Manager may consider appropriate; and

         (d) to purchase supplies and pay all bills. Manager shall use its best
efforts to obtain the foregoing services and utilities for the Property at the
most economical costs and terms available to Manager. Owner hereby appoints
Manager as Owner's authorized Manager for the purpose of executing, as managing
Manager for said Owner, all such contracts. In addition, Owner agrees to
specifically assume in writing all obligations under all such contracts so
entered into by Manager, on behalf of Owner of the Property, upon the
termination of this Agreement and Owner shall indemnify, protect, save, defend
and hold Manager and the other Indemnified Parties harmless from and against any
and all claims, causes of action, demands, suits, proceedings, loss, judgments,
damage, awards, liens, fines, costs, attorneys' fees and expenses, of every kind
and nature whatsoever, resulting from, arising out of or in any way related to
such contracts and which relate to or concern matters occurring after
termination of this Agreement, but excluding matters arising out of Manager's
willful misconduct, gross negligence and/or unlawful acts. Manager shall secure
the approval of, and execution of appropriate contracts by, Owner for any
non-budgeted and non-emergency/contingency capital items, alterations or other
expenditures in excess of $5,000 for any one item, securing for each item at
least three written bids, if practicable, or providing evidence satisfactory to
Owner that the contract amount is lower than industry standard pricing, from
responsible contractors. Manager shall have the right from time to time during
the term hereof, to contract with and make purchases from subsidiaries and
affiliates of Manager, provided that contract rates and prices are competitive
with other available sources. Manager may at any time and from time to time
request and receive the prior written authorization of Owner of the Property of
any one or more purchases or other expenditures, notwithstanding that Manager
may otherwise be authorized hereunder to make such purchases or expenditures.

3.3 Rent and Other Collections. Owner agrees and does hereby give Manager the
following exclusive authority and powers (all of which shall be exercised either
in the name of Manager, as Manager for Owner, or in the name or Owner entered
into by Manager as Owner's authorized agent, and Owner shall assume all expenses
in connection with such matters) to collect rents and/or assessments and other
items, including but not limited to tenant payments for real estate taxes,
property liability and other insurance, damages and repairs, common area
maintenance, tax reduction fees and all other tenant reimbursements,
administrative charges, proceeds of rental interruption insurance, parking fees,
income from coin operated machines and other miscellaneous income, due or to
become due and give receipts therefor and to deposit all such Gross Revenue
collected hereunder in the Account. Manager may endorse any and all checks
received in connection with the operation of any Property and drawn to the order
of Owner and Owner shall, upon request, furnish Manager's depository with an
appropriate authorization for Manager to make such endorsement. Manager shall
also have the exclusive authority to collect and handle tenants' security
deposits, including the right to apply such security deposits to unpaid

                                      -7-
<PAGE>

rent, and to comply, on behalf of Owner of the Property, with applicable state
or local laws concerning security deposits and interest thereon, if any. Manager
shall not be required to advance any monies for the care or management of any
Property. Owner agrees to advance all monies necessary therefor. If Manager
shall elect to advance any money in connection with a Property, Owner agrees to
reimburse Manager forthwith and hereby authorizes Manager to deduct such
advances from any monies due Owner. In connection with any insured losses or
damages, to handle all steps necessary regarding any such claim; provided that
Manager will not make any adjustments or settlements in excess of $10,000.00
without Owner's prior written consent.

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

3.5 Certain Owner Indemnification Obligations.

         (a) On Termination. In the event this Agreement is terminated for any
reason prior to the expiration of its original term or any renewal term, Owner
shall indemnify, protect, defend, save and hold Manager and all of the other
Indemnified Parties harmless from and against any and all claims, causes of
action, demands, suits, proceedings, loss, judgments, damage, awards, liens,
fines, costs, attorney's fees and expenses, of every kind and nature whatsoever
(collectively, "Losses"), which may be imposed on or incurred by Manager by
reason of the willful misconduct, gross negligence and/or unlawful acts (such
unlawfulness having been adjudicated by a court of proper jurisdiction) of
Owner.

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

3.6 Environmental Matters. Owner hereby warrants and represents to Manager that
to the best of Owner's knowledge, no Property has been nor is nor will any
Property be upon acquisition by Owner, nor any part thereof, 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,

                                      -8-
<PAGE>

protect, defend, save and hold Manager and all of the other Indemnified Parties
from any and all claims, causes of action, demands, suits, proceedings, loss,
judgments, damage, awards, liens, fines, costs, attorneys' fees and expenses, of
every kind and nature whatsoever, involving, concerning or in any way related to
any past, current or future allegations regarding treatment, depositing,
storage, disposal or placement by any party other than Manager of hazardous
substances on the Property.

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

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

                                   ARTICLE IV

                                    EXPENSES

4.1 Owner's Expenses. Except as otherwise specifically provided, all costs and
expenses incurred hereunder by Manager in fulfilling its duties to Owner shall
be for the account of and on behalf of Owner. Such costs and expenses shall
include the wages and salaries and other employee-related expenses of all
on-site and off-site employees of Manager who are engaged in the operation,
management, maintenance and leasing or access control of the Properties,
including taxes, insurance and benefits relating to such employees, and legal,
travel and other out-of-pocket expenses which 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 said account does not contain sufficient funds to pay all
said expenses, Owner shall fund all sums necessary to meet such additional costs
and expenses.

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

                                      -9-
<PAGE>

                                    ARTICLE V

                             MANAGER'S COMPENSATION

5.1 Management Fees. Commencing on the date hereof, Owner shall pay Manager
property management and leasing fees in an amount equal to four percent (4.0%)
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.
Manager's compensation under this Section 5.1 shall apply to all renewals,
extensions or expansions of leases which Manager has originally negotiated. In
the event Manager assists with planning and coordinating the construction of any
tenant-paid finish-out or improvements, Manager shall be entitled to receive
from any such tenant an amount equal to not greater than 5% of the cost of such
tenant improvements.

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

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

                                   ARTICLE VI

                          INSURANCE AND INDEMNIFICATION

6.1 Insurance to be Carried.

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

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

6.2 Insurance Expenses. Premiums and other expenses of such insurance, as well
as any applicable payment sin respect of deductibles shall be Owner expenses
under Section 6.1.

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

                                      -10-
<PAGE>

insurance which is in effect or for which application has been made. Manager
shall use its best efforts to comply with all requirements of insurers.

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

6.5 Indemnification. Manager shall hold Owner harmless from and indemnify and
defend Owner against any and all claims or liability for any injury or damage to
any person or property whatsoever for which Manager is responsible occurring in,
on, or about the Properties, including, without limitation, the Improvements
when such injury or damage shall be caused by the negligence of Manager, its
agents, servants, or employees, except to the extent that Owner recovers
insurance proceeds with respect to such matter. Owner will indemnify and hold
Manager harmless against all liability for injury to persons and damage to
property caused by Owner's negligence and which did not result from the
negligence of misconduct of Manager, except to the extent Manager recovers
insurance proceeds with respect to such matter.

                                   ARTICLE VII

                              TERM AND TERMINATION

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

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

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

                                      -11-
<PAGE>

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

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

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

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

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

7.3 Owner's Obligations Upon Termination. Owner shall pay or reimburse Manager
for any sums of money due it under this Agreement for services and advances
prior to termination of this Agreement. All provisions of this Agreement that
require Owner to have insured, or to protect, defend, save, hold and indemnify
or to reimburse Manager shall survive any expiration or termination of this
Agreement and, if Manager is or becomes involved in any claim, proceeding or
litigation by reason of having been Manager of Owner, such provisions shall
apply as if this Agreement were still in effect. The parties understand and
agree that Manager may withhold funds for sixty (60) days after the end of the
month in which this Agreement is terminated to pay bills previously incurred but
not yet invoiced and to close accounts. Should the funds withheld be
insufficient to meet the obligation of Manager to pay bills previously incurred,
Owner will upon demand advance sufficient funds to Manager to ensure fulfillment
of Manager's obligation to do so, within ten (10) days of receipt of notice and
an itemization of such unpaid bills.

                                  ARTICLE VIII

                                  MISCELLANEOUS

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

    Owner:   BEHRINGER HARVARD OPERATING PARTNERSHIP I LP
             1323 North Stemmons Freeway, Suite 210
             Dallas, Texas 75207
             Attention: Chief Executive Officer and Chief Operating Officer

                                      -12-
<PAGE>

    Manager: HPT MANAGEMENT SERVICES LP
             1323 North Stemmons Freeway, Suite 204
             Dallas, Texas 75207
             Attention: Chief Executive Officer and Chief Operating 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.

8.3 Assignment. Manager may delegate partially or in full its duties and rights
under this Management Agreement but only with the prior written consent of
Owner. Owner acknowledges and agrees that any or all of the duties of Manager as
contained herein may be delegated by Manager and performed by a person or entity
("Submanager") with whom Manager contracts for the purpose of performing such
duties. Owner specifically grants Manager the authority to enter into such a
contract with a Submanager; provided that Owner shall have no liability or
responsibility to any such Submanager for the payment of the Submanager's fee or
for reimbursement to the Submanager of its expenses or to indemnify the
Submanager in any manner for any matter; and provided further that Manager shall
require such Submanager to agree, in the written agreement setting forth the
duties and obligations of such Submanager, to indemnify Owner for all loss,
damage or claims incurred by Owner as a result of the willful misconduct, gross
negligence and/or unlawful acts of the Submanager. Owner further acknowledges
and agrees that Manager may assign this Agreement and all of Manager's rights
and obligations hereunder, to another management entity that is then managing
other property for Owner ("Successor Manager"). Owner specifically grants
Manager the authority to make such an assignment to a Successor Manager. Except
as provided in the immediately preceding sentence, this Management Agreement
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and assigns.

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

8.5 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.

8.6 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.

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

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

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

                                      -13-
<PAGE>

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

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

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

                                      -14-
<PAGE>

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

         BEHRINGER HARVARD REAL ESTATE INVESTMENT TRUST I, INC.

         By:
            ----------------------------------------------------------
               Robert M. Behringer
               President

         BEHRINGER HARVARD OPERATING PARTNERSHIP I LP

         By:    Behringer Harvard Real Estate Investment Trust I, Inc.
                  General Partner

         By:
            ----------------------------------------------------------
               Robert M. Behringer
               President

         HPT MANAGEMENT SERVICES LP

         By:    IMS, LLC, General Partner

         By:
            ----------------------------------------------------------
              Gary S. Bresky
              Chief Operating Officer

                                      -15-

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