Document:

Exhibit 10.1

 

FIFTH AMENDED AND RESTATED 

PROPERTY MANAGEMENT AND LEASING AGREEMENT

 

This
FIFTH AMENDED AND RESTATED PROPERTY MANAGEMENT AND LEASING AGREEMENT (this “Management
Agreement”) is made and entered into as of the 15th day of May, 2008, by
and among BEHRINGER HARVARD REIT I, INC., a Maryland corporation (“BH
REIT”), BEHRINGER HARVARD OPERATING PARTNERSHIP I LP, a Texas limited
partnership (“BH OP”), and HPT MANAGEMENT SERVICES LP, a 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 OP and BH REIT and Manager
previously entered into that certain Property Management and Leasing Agreement
dated February 14, 2003, as amended and restated by the Amended and
Restated Property Management and Leasing Agreement dated June 2, 2003, the
Second Amended and Restated Property Management and Leasing Agreement dated February 11,
2005, the Third Amended and Restated Property Management and Leasing Agreement
dated March 20, 2006 and the Fourth Amended and Restated Property
Management and Leasing Agreement dated December 29, 2006 (collectively,
the “Original Management Agreement”); and

 

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

 

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

 

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

 

ARTICLE
I

 

DEFINITIONS

 

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

 

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

 

1.2           “Gross
Revenues” means all amounts actually collected as rents or other charges
for the use and occupancy of the Properties, but excluding interest and other
investment income of Owner and

 

 

proceeds received by Owner from a sale, exchange, condemnation, eminent
domain taking, casualty or other disposition of assets of Owner.

 

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

 

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

 

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

 

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

 

1.7           “Original
Effective Date” means February 14, 2003.

 

1.8           “Owner”
means BH REIT, BH OP or 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 Property or Properties.

 

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

 

1.10         “Properties”
means all interests in real estate owned by Owner and all tracts to be acquired
by Owner containing income-producing improvements or on which Owner will
construct income-producing improvements.

 

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

 

1.12         “Texas
Tax Code” means the Texas Tax Code as amended by Texas H.B. 3, 79th Leg.,
3rd C.S. (2006), and reference to any provision of the Texas Tax Code Act shall
mean 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
administrative rules as in effect from time to time.

 

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ARTICLE
II

 

APPOINTMENT
AND STATUS OF MANAGER; SERVICES TO BE PERFORMED

 

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

 

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

 

2.4           Specific
Duties.  In addition to the specific authority granted
to Manager by Owner pursuant to Article III of this Management
Agreement, Manager’s duties include the following:

 

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

 

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(b)           Maintenance.  Manager shall cause the Properties to be
maintained in a manner consistent with, or substantially similar to, the manner
in which similar rental properties in that geographic region are
maintained.  Manager’s duties and
supervision in this respect shall include, without limitation, cleaning the
interior and the exterior of the Improvements and making or supervising the
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, shall be limited to activities related to the management,
operation, maintenance, and leasing of the Properties (e.g., repairs,
renovations, and leasehold improvements), including planning and coordinating
the construction of any tenant-paid improvements.

 

(c)           Leasing Functions.  Manager shall coordinate the leasing of the
Properties and shall negotiate and use its reasonable best efforts to secure
executed Leases from what Manager believes are qualified tenants, and to
execute same on behalf of Owner, if requested, for available space in the
Properties, such Leases to be in form and on terms approved by Owner and
Manager.  Manager shall be responsible
for hiring all leasing agents, as necessary for the leasing of the Properties,
and for otherwise overseeing and managing 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 any notice as Manager
believes is appropriate.

 

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

 

(f)            Branding.  Manager shall maintain and administer for
Owner the standards of branding established by Behringer Harvard Holdings, LLC  with respect to all billboards, signage and uniforms.

 

(g)           Risk Management.  Manager shall provide to Owner risk
management services, including, but not limited to, the following: assisting
and providing ways to mitigate, minimize, control, and transfer risk through the
prudent use of risk management, insurance programs and recommendations of
safety and loss control techniques; selecting and managing insurance brokers
and service products; preparing underwriting data for use in marketing
insurance programs; negotiating and placing insurance and related services;
serving as liaison for insurance brokers and monitoring insurance premium
invoices for accuracy; managing and settling loss control and insurance claims;
consulting and coordinating  insurance
requirements for financing Properties; reviewing and monitoring sub-contractor
certificates of insurance; and consulting regarding insurance verbiage
requirements for leases and contracts.

 

(h)           Real Estate Tax
Management.  Manager shall provide to
Owner tax management services with respect to the Properties, including, but
not limited to, the following: coordinating payment of real estate taxes;
contesting real estate taxes, as Manager deems appropriate; accounting for all
bills to be processed at any given installment, and following up on missing
bills; data entry of tax amounts and equalized values when available; providing
copies of documents as requested (including following up on cancelled checks,
monitoring payment by 

 

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third parties, communicating with interested parties and forwarding tax
bills to purchasers and other parties as necessary).

 

(i)            Technology Use and
Support.          Manager shall utilize
the software and technology platforms that it believes are appropriate in connection
with fulfilling its duties under this Management Agreement.  In addition, Manager shall provide technical
support and maintenance with respect to any technology used in the maintenance,
operation, management and leasing of the Properties.

 

(j)            Management Plans.  Not later than 30 days after the date of this
Management Agreement, and each successive fifth anniversary thereafter, Manager
shall prepare and deliver to Owner a plan setting forth its strategies for the
overall management, operation and maintenance of the Properties under the terms
and conditions of this Management Agreement, for the five years immediately
following the submission (“Management Plan”).  As often as reasonably necessary during the
period covered by any Management Plan, the Manager may submit to Owner for its
approval an updated Management Plan.

 

2.5           The
Account.  Manager shall
establish and maintain a separate checking account (the “Account”) into
which all rent and other monies collected from tenants shall be deposited.  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.  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:

 

(a)           All sums received from rents and other income from
the Properties shall be promptly deposited by Manager 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 by Manager, furnish Manager’s
depository with an appropriate authorization for Manager to make such
endorsement.  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.

 

(b)           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 or withdrawn by Manager from the Account prior to the making of any other
disbursements therefrom.

 

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

 

2.6           Accounting,
Records and Reports.

 

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

 

5

 

and separate from any records not pertaining to the Properties, at a
place recommended by Manager and approved by Owner.

 

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

 

(i)            rental collection record;

 

(ii)           monthly operating statement;

 

(iii)          copies of cash disbursements ledger entries for such
period, if requested by Owner upon 15 days’ written notice;

 

(iv)          copies of cash receipts ledger entries for such
period, if requested by Owner upon 15 days’ written notice;

 

(v)           the original copies of all contracts entered into by
Manager on behalf of Owner during such period, if requested by Owner upon 15
days’ written notice; and

 

(vi)          copies of ledger entries for such period relating to
security deposits maintained by Manager, if requested by Owner upon 15 days’
written notice.

 

(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 (each, an “Annual
Budget”).  In connection with any
acquisition of a Property by Owner, Manager shall prepare an Annual Budget for
the remainder of the calendar year.  Each
Annual Budget shall incorporate financial models and analysis prepared by
Manager with respect to that Property. 
Each Annual Budget 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 Annual Budget
incorporating any changes as shall be necessary to reflect cost over-runs and
the like during that period.  If Owner
does not disapprove any proposed Annual Budget within 30 days after receipt
thereof by Owner, the Annual Budget shall be deemed approved.  If Owner shall disapprove any proposed Annual
Budget, it shall so notify Manager within said 30-day period and explain the
reasons therefor.  If Owner disapproves
of any proposed Annual Budget, Manager shall submit a revised Annual Budget, as
applicable, within 10 days of receipt of the notice of disapproval, and Owner
shall have 10 days to provide notice to Manager if it disapproves of the
revised Annual Budget.  If a proposed
Annual Budget is not approved by December 31 of any calendar year,  Manager shall operate the applicable Property
pursuant to the proposed Annual Budget for the following calendar year with
respect to those portions approved by Owner and in accordance with the prior
year’s Annual Budget with respect to those portions not approved by Owner (with
the exception of (i) non-recurring expenditures and capital expenditures
which shall be deemed removed from the prior year’s Annual Budget and (ii) actual
increases for real estate taxes, which shall be deemed added to the prior year’s
Annual Budget).

 

(d)           Additional Costs.  Manager will not incur any costs other than
those estimated in any Annual Budget except for:

 

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

 

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

 

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

 

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

 

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

 

Annual 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 Annual Budget. 
However, Manager will use its best efforts to operate within the
approved Annual Budget.

 

(e)           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 Manager receives notice that any Improvement
on a Property or any equipment therein does not comply with the requirements of
any statute, ordinance, law or regulation of any governmental body or of any
public authority or official thereof having or claiming to have jurisdiction
thereover.  Manager shall promptly
forward to Owner any complaints, warnings, notices or summonses received by it
relating to such matters.  Owner
represents that to the best of its knowledge each of its Properties and any
equipment thereon will upon acquisition by Owner comply with all such
requirements.  Owner authorizes Manager
to disclose the ownership of the Property by Owner to any such officials.

 

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

 

ARTICLE
III

 

AUTHORITY
GRANTED TO MANAGER AND CERTAIN OWNER OBLIGATIONS

 

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

 

(b)           to pay all expenses of
leasing such Property, including but not limited to, newspaper and other
advertising, signage, banners, brochures, referral commissions, leasing 

 

7

 

commissions, finder’s fees and salaries, bonuses and other compensation
of leasing personnel responsible for the leasing of the Property;

 

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

 

(d)           to collect from tenants
all or any of the following: a late rent administrative charge, a
non-negotiable check charge, credit report fee, a subleasing administrative
charge or broker’s commission;

 

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

 

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

 

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

 

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

 

(a)           to hire, supervise,
discharge, and pay all labor required for the operation, maintenance and
leasing of each Property, including but not limited to on-site personnel,
managers, assistant managers, leasing consultants, engineers, janitors,
maintenance supervisors and other employees required for the operation and
maintenance of the Property, including personnel spending a portion of their
working hours (to be charged on a pro rata basis) at the Property.  Any personnel hired by Manager to maintain,
operate and lease the Properties shall be the employees or independent
contractors of Manager and not of Owner. 
Manager shall use due care in selecting and supervising these employees
or independent contractors.  With respect
to these employees, Manager shall be responsible for maintaining timekeeping
records, processing regular payroll, filing payroll tax reports on a timely
basis, ensuring compliance with wage and tax laws and tracking benefit hours
and garnishments and child support orders. 
All expenses of these employees’ 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;

 

(c)           to prepare, negotiate,
enter into and administer any Leases;

 

8

 

(d)                                 to prepare, negotiate and enter into, as
Manager of the Property, (i) contracts for all items on budgets that have
been approved by Owner, any emergency services or repairs for items not
exceeding $5,000, (ii) appropriate service agreements and labor agreements
for normal operation of the Property, which have terms not to exceed three
years, (iii) 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 relating to the Property and (iv) any other service agreements
as Manager may consider appropriate (collectively, the “Contracts”); and

 

(e)                                  to purchase supplies and pay all bills in
accordance with the Annual Budget, or as permitted under Sections 2.6(d)(ii) or
2.6(d)(v).

 

Manager shall use its reasonable commercial best
efforts to obtain the foregoing services and utilities for each Property on
terms consistent with, or substantially similar to, those available to similar
rental properties in the geographic region in which the Property is
located.  Owner hereby appoints Manager
as Owner’s authorized Manager for the purpose of executing, as Manager for said
Owner, all Contracts.  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 in
the geographic region in which the Property is located, from responsible
contractors.  Manager shall have the
right from time to time during the term hereof, to contract with and make
purchases from Affiliates of Manager, provided that contract rates and
prices are no less favorable to Owner than those available from unaffiliated
third parties.  Manager may at any time
and from time to time request and receive the prior written authorization of
Owner of the Property of any one or more purchases or other expenditures,
notwithstanding that Manager may otherwise be authorized hereunder to make such
purchases or expenditures.

 

3.3                                 Rent and Other Collections. 
Owner agrees and does hereby give Manager the exclusive authority and
powers (all of which shall be exercised either in the name of Manager, as Manager
for Owner, or in the name or Owner entered into by Manager as Owner’s
authorized agent, and Owner shall assume all expenses in connection with such
matters) to collect rents, 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 shall also have the exclusive
authority to collect and handle tenants’ security deposits, including the right
to apply such security deposits to unpaid rent, and to comply, on behalf of
Owner of the Property, with applicable state or local laws concerning security
deposits and interest thereon, if any.

 

3.4                                 Advances.  Manager shall
not be required to advance any monies for the care or management of any
Property, but Owner agrees to advance all monies necessary therefor, provided
that any advanced amounts have been budgeted in the Annual Budget.  If Manager shall elect to advance any money
in connection with a Property, Owner agrees to reimburse Manager within 30
days, and hereby authorizes Manager to deduct such advances from any monies due
Owner.  In connection with any insured
losses or damages relating to any Property, Manager shall have the exclusive
authority to handle all steps necessary regarding any such claim; provided
that Manager will not make any adjustments or settlements in excess of $10,000
without Owner’s prior written consent.

 

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3.5                                 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, including utility and water charges, sewer rent and
assessments, from the Gross Revenue collected in accordance with Section 3.3
above, from the Account.  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.  All expenses shall be billed at net cost
(i.e., less all rebates, commissions, discounts and allowances, however
designed).

 

It is understood that the
Gross Revenue will be used first to pay the compensation to Manager as
contained in Article V below, then operational expenses and then
any mortgage indebtedness, including real estate tax and insurance impounds,
but only as directed by Owner in writing and only if sufficient Gross Revenue
is available for such payments.  Nothing
in this Management 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 Management Agreement, except to the extent
Owner advances additional funds to pay such expenses.

 

3.6                                 Environmental
Matters.  Owner hereby warrants and
represents to Manager that to the best of Owner’s knowledge, no Property, upon
acquisition by Owner, nor any part thereof, will be used to treat, deposit,
store, dispose of or place any hazardous substance that may subject Manager to
liability or claims under the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 (42 U.S.C.A. Section 9607) or any
constitutional provision, statute, ordinance, law, or regulation of any
governmental body or of any order or ruling of any public authority or official
thereof, having or claiming to have jurisdiction thereover.

 

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

 

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

 

10

 

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 that are directly related to the management of specific
Properties.  All costs and expenses for
which Owner is responsible under this Management Agreement shall be paid by
Manager out of the Account.  In the event
the Account does not contain sufficient funds to pay all said expenses, Owner
shall fund all sums necessary to meet such additional costs and expenses.

 

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

 

ARTICLE V

 

MANAGER’S COMPENSATION

 

5.1                                 Management Fees.  Owner shall pay Manager property management
fees in an amount equal to three percent (3%) of Gross Revenues (the “Management
Fees”) on a monthly basis from the income received from the Properties over
the term of this Management Agreement.  In the event that Owner contracts
directly with a non-affiliated third-party property manager in respect of a
Property, Owner shall pay Manager an oversight fee equal to one percent (1%) of
Gross Revenues of such Property to compensate Manager for transition services
to coordinate and align the systems and policies of the third-party property
manager with those of Manager.  Manager’s compensation under this Section 5.1
shall apply to all renewals, extensions or expansions of Leases that Manager has originally
negotiated.  The Management Fees may
include the reimbursement of the specified cost incurred by the Manger of
engaging another person or entity to perform Manager’s responsibilities
hereunder, provided, however, that Manager shall be responsible
for payment to such third parties. 
Nothing herein shall prevent Manager from entering fee-splitting
arrangements with third parties with respect to the Management Fees.

 

5.2                                 Construction Management
Fees.  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 that tenant an
amount equal to not greater than five percent (5%) of the cost of such tenant
improvements.

 

5.3                                 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.

 

5.4                                 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.

 

11

 

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 payments in
respect of deductibles shall be borne by Owner.

 

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

 

6.4                                 Accidents and
Claims.  Manager shall promptly
investigate and shall report in detail to Owner all accidents, claims for
damage relating to Ownership, operation or maintenance of the Properties, and
any damage or destruction to the Properties and the estimated costs of repair
thereof, and shall prepare for approval by Owner all reports required by an
insurance company in connection with any such accident, claim, damage, or
destruction.  Such reports shall be given
to Owner promptly, and any report not so given within 10 days after the
occurrence of any such accident, claim, damage or destruction shall be noted in
the monthly operating statement delivered to Owner pursuant to Section 2.6(b)(ii).  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.

 

(a)                                  Indemnification
of Manager. Owner agrees to indemnify, defend, protect, save
and hold harmless Manager and its stockholders, officers, directors, employees,
managers, successors and assigns (collectively, the “Indemnified Parties”)
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 (i) any Contract, (ii) each Property,
including 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, and from liability for damage to each
Property and injuries to or death of any person whomsoever, and damage to 

 

12

 

Property and (iii) the misconduct,
negligence or unlawful acts (such unlawfulness having been adjudicated by a
court of proper jurisdiction) of Owner, or 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; provided, however, that the
indemnification and exculpation shall not extend to any such Losses arising out
of the misconduct, negligence or unlawful acts (the unlawfulness having been
adjudicated by a court of proper jurisdiction) of Manager, its agents,
servants, or employees; provided, further, that the
indemnification and exculpation shall be limited to the extent that Manager
recovers insurance proceeds with respect to that matter. Manager shall not be
liable for any error of judgment or for any mistake of fact or law, or for any
thing that it may do or refrain from doing, except in cases of misconduct,
negligence or unlawful acts (the unlawfulness having been adjudicated by a
court of proper jurisdiction).

 

(b)                                 Indemnification
of Owner.  Manager
agrees to indemnify, defend, protect, save and hold harmless Owner and its
stockholders, officers, directors, employees, managers, successors and assigns
from any and all claims or liability for any injury or damage to any person or
property whatsoever for which Manager is responsible occurring in, on, or about
the Properties, including, without limitation, the Improvements, when the
injury or damage shall be caused by the misconduct, negligence or unlawful acts
(the unlawfulness having been adjudicated by a court of proper jurisdiction) of
Manager, its agents, servants, or employees, except to the extent that Owner
recovers insurance proceeds with respect to such matter.

 

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

 

ARTICLE
VII

 

TERM
AND TERMINATION

 

7.1                                 Term.  This Management Agreement shall commence on
the Original Effective Date and shall continue until the seventh (7th)
anniversary of such date and thereafter for successive seven 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
Management Agreement, in which case this Management Agreement shall be thereby
terminated on said last mentioned date. 
In addition, and notwithstanding the foregoing, Owner may terminate this
Management Agreement at any time upon delivery of written notice to Manager not
less than 30 days prior to the effective date of termination, in the event of
(and only in the event of) a showing by Owner of misconduct, negligence, or
deliberate malfeasance by Manager in the performance of Manager’s duties
hereunder.  In addition, either party may
terminate this Management Agreement immediately upon the occurrence of any of
the following:

 

(a)                                  A decree or order is rendered by a court
having jurisdiction (i) adjudging Manager as bankrupt or insolvent, 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

 

13

 

(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 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 cooperate with Owner and take all reasonable steps
requested by Owner to make an orderly transition of the Manager’s services,
including without limitation:

 

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

 

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

 

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

 

(d)                                 All provisions
of this Management Agreement that require Manager to have insured, or to
protect, defend, save, hold and indemnify or to reimburse Owner shall survive
any expiration or termination of this Management Agreement and, if Owner is or
becomes involved in any claim, proceeding or litigation by reason of having
been Owner, such provisions shall apply as if this Management Agreement were
still in effect.

 

7.3                                 Owner’s
Obligations Upon Termination.  Upon the termination of this Management
Agreement, Owner shall cooperate with Manager and take all reasonable steps to
make an orderly transition of the Manager’s services to Owner, including
without limitation:

 

(a)                                  Owner shall pay
or reimburse Manager for any sums of money due it under this Management
Agreement for services and expenses prior to termination of this Management
Agreement.  The parties understand and
agree that Manager may withhold funds for 60 days after the end of the month in
which this Management Agreement is terminated to pay bills previously incurred
but not yet invoiced and to close accounts. Should the funds withheld be
insufficient to meet the obligation of Manager to pay bills previously
incurred, Owner will, upon demand, advance sufficient funds to Manager to
ensure fulfillment of Manager’s obligation to do so, within 10 days of receipt
of notice and an itemization of such unpaid bills.

 

(b)                                 Owner shall
assume in writing all obligations under all Contracts entered into by Manager,
on behalf of Owner of the Property, upon the termination of this Management
Agreement.

 

14

 

(b)                                 All provisions
of this Management Agreement that require Owner to have insured, or to protect,
defend, save, hold and indemnify or to reimburse Manager shall survive any
expiration or termination of this Management Agreement and, if Manager is or
becomes involved in any claim, proceeding or litigation by reason of having
been Manager of Owner, such provisions shall apply as if this Management
Agreement were still in effect.

 

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

  
	
   

  	
   

  	
   

  	
   

  	
  c/o Behringer Harvard
  REIT I, Inc.

  
	
   

  	
   

  	
   

  	
   

  	
  15601 Dallas Parkway

  
	
   

  	
   

  	
   

  	
   

  	
  Suite 600

  
	
   

  	
   

  	
   

  	
   

  	
  Addison, Texas 75001

  
	
   

  	
   

  	
   

  	
   

  	
  Attention: Chief Legal Officer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Manager:

  	
   

  	
  HPT MANAGEMENT SERVICES LP

  
	
   

  	
   

  	
   

  	
   

  	
  15601 Dallas Parkway

  
	
   

  	
   

  	
   

  	
   

  	
  Suite 600

  
	
   

  	
   

  	
   

  	
   

  	
  Addison, Texas 75001

  
	
   

  	
   

  	
   

  	
   

  	
  Attention: Chief Legal Officer

  

 

8.2                                 Governing Law;
Venue.  This Management Agreement
shall be governed by and construed in accordance with the internal 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, unless Owner otherwise agrees in writing with such Submanager, Owner
shall have no liability or responsibility to any such Submanager for the
payment of the Submanager’s fee or for reimbursement to the Submanager of its
expenses or to indemnify the Submanager in any manner for any matter; and provided,
further, that Manager shall require such Submanager to agree, in the
written agreement setting forth the duties and obligations of such Submanager,
to indemnify Owner for all Losses incurred by Owner as a result of the
misconduct or negligence of the Submanager, except that such indemnity shall not
be required to the extent that Owner recovers issuance proceeds with respect to
such matter.  Any contract entered into
between Manager and a Submanager pursuant to this Section 8.3 shall
be consistent with the provisions of this Management Agreement, except to the
extent Owner otherwise specifically agrees in writing.  This Management 

 

15

 

Agreement shall be binding upon and shall inure to
the benefit of the parties hereto and their respective successors and assigns.

 

8.4                                 Third Party
Leasing Services.  Manager
acknowledges that from time to time Owner may determine that it is in the best
interests of Owner to retain a third party to provide certain leasing services
with respect to certain Properties and to compensate such third party for such
leasing services.  Upon the prior written
consent of Manager, Owner shall have the authority to enter into such a
contract for leasing services with a third party (a “Third Party Leasing
Agreement”); provided that Manager shall have no liability or
responsibility to Owner for any of the duties and obligations undertaken by
such party, and Owner agrees to indemnify Manager for all Losses incurred by
Manager as a result of acts of such third party pursuant to the Third Party
Leasing Agreement.  To the extent that
leasing services are specifically required to be performed by a third party
pursuant to such Third Party Leasing Agreement, Manager shall have no
obligation to perform such leasing services and Owner shall have no obligation
to Manager for leasing fees pursuant to Section 5.3 hereof.

 

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

 

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

 

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

 

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

 

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

 

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

 

8.11                           Disputes.  If there shall be a dispute between Owner and
Manager relating to this Management Agreement resulting in litigation, the
prevailing party in such litigation shall be entitled to 

 

16

 

recover from the other party to such litigation such
amount as the court shall fix as reasonable attorneys’ fees.

 

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

 

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

 

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

 

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

 

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

 

17

 

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

 

 

	
   

  	
  BEHRINGER
  HARVARD REIT I, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/ Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President –

  
	
   

  	
   

  	
  Corporate Development & Legal

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER
  HARVARD OPERATING PARTNERSHIP I LP

  
	
   

  	
   

  	
   

  
	
   

  	
  By: 

  	
  BHR, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
    /s/ Gerald J. Reihsen, III

  
	
   

  	
   

  	
   

  	
  Gerald J.
  Reihsen, III

  
	
   

  	
   

  	
   

  	
  Executive Vice President –

  
	
   

  	
   

  	
   

  	
  Corporate Development & Legal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HPT
  MANAGEMENT SERVICES LP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Gerald J.
  Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President –

  
	
   

  	
   

  	
  Corporate Development & Legal

  

 

18Exhibit 10.1

 

AMENDED AND RESTATED UNSECURED
PROMISSORY NOTE

 

	
  March 27, 2008

  	
  Up to $20,000,000

  

 

FOR VALUE RECEIVED, the undersigned, BEHRINGER HARVARD SHORT-TERM
OPPORTUNITY FUND I LP, a Texas limited partnership (the “Borrower”), HEREBY
PROMISES TO PAY to the order of BEHRINGER HARVARD HOLDINGS, LLC, a Delaware
limited liability company (the “Lender”), the principal amount outstanding from
time to time as set forth on the attached grid equal to the outstanding amount
of the Advances (as hereinafter defined), up to a maximum of Twenty Million
Dollars ($20,000,000) in Advances, made by Lender to Borrower hereunder, on the
third anniversary of the date hereof (the “Maturity Date”) together with all
accrued and unpaid interest hereunder on such date.  This Amended and Restated Promissory Note
(this “Note”), amends and restates in its entirety the Secured Promissory Note
dated November 9, 2007 made by the Borrower to the Lender (the “Original
Note”).  It is acknowledged and agreed
that amounts outstanding under the Original Note through December 31, 2007
were forgiven and that on January 14, 2008 an additional Advance of
$1,000,000 was made thereunder and remains outstanding on the date hereof.  All amounts borrowed under such prior note shall
be deemed borrowed hereunder as of the dates of such borrowings under the terms
hereof and as reflected on the attached grid. 
Amounts advanced (or deemed advanced) hereunder shall be unsecured
obligations of the Borrower.

 

From time to time, until the day immediately prior to the Maturity
Date, if requested by the Borrower, the Lender may, in its sole discretion,
make advances to the Borrower (each an “Advance”).  An Advance may be made by transfer of funds
to the Borrower or by payment of obligations of the Borrower by the
Lender.  The Borrower shall have no
obligation to make any Advance hereunder, all of such Advances being
discretionary and to be made on the sole discretion of the Lender.  In no event shall any actual or purported
written or unwritten agreement of the Lender to make an Advance be enforceable
or binding upon the Lender.  An Advance
shall exist only after it is actually made by the advancement of funds to or on
behalf of the Borrower or the payment of an obligation of the Borrower by the
Lender and no obligation to make such Advance shall exist until it is so made
or such obligation is paid.  At no time
shall there Advances by made such that there will be in excess of twenty
million dollars ($20,000,000) in principal amount outstanding hereunder upon
the making of such Advance.

 

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

 

The Borrower shall pay interest on the unpaid principal amount of each
Advance owing to the Lender from the date of such Advance until such principal
amount shall be paid in full, at the rate of five percent (5%) per annum.  Notwithstanding the above, after the occurrence
of an Event of Default (as hereinafter defined), interest on the unpaid
principal amount of each Advance shall accrue, at the rate of the lesser of
twelve percent (12%) per annum or the highest rate permitted by applicable law
from the date of the Event of Default while such Event of 

 

 

Default is continuing.  All payments on this Note shall-be applied to
the payment of accrued interest before being applied to the payment of
principal.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

The liability of the Borrower hereunder shall be unconditional and
shall not be in any manner affected by any indulgence whatsoever granted or
consented to by the holder hereof, including but not limited to any extension
of time, renewal, waiver, or other modification.  Any failure of the holder to exercise any
right hereunder shall not be construed as a waiver of the 

 

2

 

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

 

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

 

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

 

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

 

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

 

(c)           the Borrower
shall breach any covenant, agreement or obligation to the Lender existing under
any other agreement between the Borrower and the Lender; or

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

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

 

The Borrower agrees to pay on demand all reasonable costs and expenses
incurred by the Lender in connection with this Note.  The Borrower further agrees to pay on demand
all costs and expenses incurred by the Lender in connection with the enforcement
of this Note, including reasonable
attorney’s fees, incurred in connection with such enforcement.

 

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

 

4

 

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

 

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

 

5

 

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

 

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

 

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

 

 

	
  BEHRINGER
  HARVARD

  HOLDINGS, LLC

  	
  BEHRINGER HARVARD SHORT-TERM 

  OPPORTUNITY FUND I LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Behringer
  Harvard Advisors II LP

  
	
   

  	
   

  	
  Co-General
  Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
  Gerald J. Reihsen, III

  	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
  Executive
  Vice President

  	
   

  	
   

  	
  Secretary

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
    Robert
  M. Behringer, Co-General Partner

  
						

 

6

 

LOANS AND PAYMENTS OF PRINCIPAL

 

	
  Date

  	
   

  	
  Amount of Loan

  or Principal

  Paid

  	
   

  	
  Interest Paid

  	
   

  	
  Unpaid

  Principal

  Balance

  	
   

  	
  Notation 

  Made By

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

7

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