Exhibit 10.8

MANAGEMENT AGREEMENT

This MANAGEMENT AGREEMENT (this “Agreement”), is made and entered into on
January 29, 2015 to be effective as of the Effective Date (as hereinafter
defined), by and between Hunt Utility Services, LLC, a Delaware limited
liability company (the “Manager”), InfraREIT Partners, LP, a Delaware limited
partnership (the “Operating Partnership”), and InfraREIT, Inc., a Maryland
corporation and the general partner of the Operating Partnership (the
“Company”). The Manager, the Operating Partnership and the Company are sometimes
referred to in this Agreement individually as a “Party” or collectively as the
“Parties.”

RECITALS:

WHEREAS, the Company is a corporation that intends to elect to be taxed as a
real estate investment trust (“REIT”) and intends to continue to qualify to be
taxed as a REIT for federal income tax purposes;

WHEREAS, the Manager is an indirect subsidiary of Hunt Consolidated, Inc.
(“Hunt”); and

WHEREAS, the Company, the Operating Partnership and each of the Subsidiaries (as
defined below) desire to retain the Manager to provide management and advisory
service on the terms and conditions set forth herein, and the Manager wishes to
be retained to provide such services.

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements herein contained, and intending to be legally bound hereby, the
Parties hereby agree as follows:

Section 1. Definitions. Capitalized terms used in this Agreement (including
exhibits, schedules and amendments) shall have the meanings set forth below or
in the section of this Agreement referred to below, except as otherwise
expressly indicated or limited by the context in which they appear in this
Agreement.

“Adjustments” means additions or subtractions to the Company’s Cash Available
for Distribution related to the following: (i) the effect of the Company’s
percentage rent calculation method, which represents the difference between the
quarterly cash payments due on percentage rent and the revenue included in net
income; (ii) the effect of straight-line rents, which represents the difference
between the timing of cash based rent payments and the recognition of base rent
revenue in accordance with GAAP; (iii) the fair value adjustment of balance
sheet items such as contingent consideration and hedges; (iv) non-cash equity
compensation; (v) goodwill impairment; and (vi) subject to the approval of the
Independent Directors, such other adjustments as the Manager may recommend from
time to time to give effect to the intent of the Parties in the calculation of
Cash Available for Distribution under this Agreement or to reflect changes in
the public reporting practices of the Company.

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“Affiliate” means, with regard to a Person, a Person that controls, is
controlled by, or is under common control with such original Person. For
purposes of this definition, “control,” when used with respect to any Person,
means the power to direct the management and policies of such Person, directly
or indirectly, whether through the ownership of voting securities, by contract
or otherwise, and the terms “affiliated,” “controlling” and “controlled” have
meanings correlative to the foregoing. By way of example, and not limitation,
Affiliates of the Manager include, and are not limited to, Hunt Consolidated,
Inc., Hunt Investment Company, L.P., Hunt Equities, Inc., Hunt Transmission
Services, LLC, and Hunt Power, L.P.

“AFUDC” means allowance for funds used during construction.

“AFUDC on Other Funds” means the portion of AFUDC that relates to the cost of
equity, as determined in accordance with the electric plant instructions found
in the Federal Energy Regulatory Commission regulations.

“Agreement” has the meaning set forth in the Preamble.

“Arbitration Panel” has the meaning set forth in Section 24(a).

“Assets” means the assets of the Company Entities.

“Audit Committee” means the audit committee of the Board of Directors.

“Bankruptcy” means, with respect to any Person, (a) the filing by such Person of
a voluntary petition seeking liquidation, reorganization, arrangement or
readjustment, in any form, of its debts under Title 11 of the United States Code
or any other federal, state or foreign insolvency law, or such Person’s filing
an answer consenting to or acquiescing in any such petition, (b) the making by
such Person of any assignment for the benefit of its creditors, (c) the
expiration of 60 days after the filing of an involuntary petition under Title 11
of the United States Code, an application for the appointment of a receiver for
a material portion of the assets of such Person, or an involuntary petition
seeking liquidation, reorganization, arrangement or readjustment of its debts
under any other federal, state or foreign insolvency law, provided that the same
shall not have been vacated, set aside or stayed within such 60-day period or
(d) the entry against it of a final and non-appealable order for relief under
any bankruptcy, insolvency or similar law now or hereinafter in effect.

“Base Fee” means (a) for the period from January 1, 2014 through March 31, 2015,
an annual amount equal to $10,000,000 (prorated for partial periods), and
(b) for each 12 month Base Fee Period thereafter, an amount equal to 1.50% of
Total Equity as of the end of the immediately preceding calendar year; provided
that, in no event shall the Base Fee be more than $30,000,000 unless a greater
amount is approved by a majority of the Independent Directors (or a committee
consisting entirely of Independent Directors). By way of example, the Base Fee
for the Base Fee Period from April 1, 2016 through March 31, 2017 will be an
amount equal to 1.50% of Total Equity as of December 31, 2015.

“Base Fee Period” shall mean each 12-month period beginning on April 1 and
ending on March 31 of the following year.

 

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“Board of Directors” means the Board of Directors of the Company.

“Cash Available for Distribution” means, for any calendar quarter, an amount
equal to (i) (A) Net Income Before Noncontrolling Interest, plus
(B) depreciation, plus (C) amortization of deferred financing costs, if any,
minus (D) AFUDC on Other Funds, minus (E) capital expenditures to maintain net
assets, (ii) as adjusted by the Adjustments. The Parties intend that Cash
Available for Distribution will be calculated in a manner consistent with the
Company’s public reporting of Cash Available for Distribution from time to time.
Capital expenditures to maintain net assets means, for any calendar quarter, an
amount equal to the depreciation expense recognized by the Company. For the
avoidance of doubt, Cash Available for Distribution does not include the
proceeds of any debt recapitalization.

“Code” means the Internal Revenue Code of 1986, as amended.

“Company” has the meaning set forth in the Preamble.

“Company Account” has the meaning set forth in Section 6.

“Company Entity” or “Company Entities” means the Company, the Operating
Partnership and any of their Subsidiaries.

“Company Indemnified Party” has the meaning set forth in Section 13(b).

“Company Panel Member” has the meaning set forth in Section 24(b).

“Damages” has the meaning set forth in Section 13(a).

“Development Agreement” means the Development Agreement, of even date herewith,
among the Company, the Operating Partnership, Sharyland Utilities, L.P. and Hunt
Transmission Services L.L.C.

“Effective Date” means the closing date of the Initial Public Offering and the
effectiveness of the merger of InfraREIT, L.L.C. with and into the Company.

“Entity” means any partnership, limited partnership, proprietorship,
corporation, joint venture, joint stock company, limited liability company,
limited liability partnership, business trust, estate, governmental entity,
cooperative, association or other foreign or domestic enterprise, including
accounts or funds managed by an investor or any of its Subsidiaries.

“Equity Interests” means any shares of capital stock, membership interests,
partnership interests or other equity interests and options or warrants to
acquire, or securities convertible or exchangeable into, capital stock,
membership interests, partnership interests or other equity securities of an
Entity.

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

“Expenses” has the meaning set forth in Section 10.

 

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“GAAP” means generally accepted accounting principles in the United States,
consistently applied.

“Governing Instruments” means, with regard to any entity, the articles or
certificate of incorporation and bylaws in the case of a corporation,
certificate of limited partnership (if applicable) and the partnership agreement
in the case of a general or limited partnership, the articles or certificate of
formation and the operating agreement in the case of a limited liability
company, or similar governing documents, in each case as amended from time to
time.

“Hunt” has the meaning set forth in the Recitals.

“Incentive Fee” means, for any calendar quarter an amount equal to the Per Unit
Incentive Fee for such calendar quarter multiplied by the aggregate number of OP
Units outstanding as of the record date for the payment of Quarterly
Distributions during such calendar quarter.

“Indemnitee” has the meaning set forth in Section 13(b).

“Indemnitor” has the meaning set forth in Section 13(c).

“Independent Directors” means the members of the Board of Directors who are not
officers or employees of the Manager, Hunt or any of their Affiliates, and who
are otherwise “independent” in accordance with the Company’s Governing
Instruments and policies and, if applicable, the rules of any national
securities exchange on which the Company’s common stock is listed.

“Initial Public Offering” means the initial public offering of the Company’s
common stock under the Securities Act pursuant to the Registration Statement.

“Initial Term” means a period commencing on the date hereof and ending on the
earlier of (i) December 31, 2019 and (ii) a Successful Challenge.

“Intellectual Property” means all work product, documents, code, works of
authorship, programs, manuals, developments, processes, formulae, data,
specifications, fixtures, tooling, equipment, supplies, processes, inventions,
discoveries, improvements, trade secrets, and know-how or similar rights.

“Intellectual Property Rights” means the worldwide right, title, and interest in
any Intellectual Property and any goodwill appurtenant thereto, including,
without limitation, all copyrights, copyright renewals or reversions,
trademarks, trade names, trade dress rights, inventions, priority rights, patent
rights, patents, and any other rights or protections in connection therewith or
related thereto.

“Investment Company Act” means the Investment Company Act of 1940, as amended.

“Manager” has the meaning set forth in the Preamble.

“Manager Indemnified Party” has the meaning set forth in Section 13(a).

 

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“Manager Panel Member” has the meaning set forth in Section 24(b).

“Net Income Before Noncontrolling Interest” means the Company’s consolidated net
income, calculated in accordance with GAAP, before any deduction or reduction
thereto as a result of net income attributable to a noncontrolling interest.

“Operating Partnership” has the meaning set forth in the Preamble.

“OP Unit” means a partnership unit in the Operating Partnership.

“Party” or “Parties” has the meaning set forth in the Preamble.

“Person” means any individual, corporation, proprietorship, firm, partnership,
limited partnership, limited liability company, trust, association or other
Entity.

“Per Unit Incentive Fee” means, for any calendar quarter, an amount equal to 20%
of the amount by which (a) the Quarterly Distributions made by the Operating
Partnership during such quarter plus the amount of the Per Unit Incentive Fee
exceed (b) the Threshold Distribution Amount. By way of example, if the
Quarterly Distributions during a quarter are $0.37, the Per Unit Incentive Fee
for such quarter will be $0.025 (i.e., 20% multiplied by ($0.37 of Quarterly
Distributions, plus the $0.025 Per Unit Incentive Fee, minus the $0.27 Threshold
Distribution Amount).

“Quarterly Distributions” means the amount of per OP Unit distributions made by
the Operating Partnership during a particular calendar quarter; provided,
however, that any distributions in excess of 100% of quarterly Cash Available
for Distribution shall not be considered distributions for purposes of
calculating the amount of Quarterly Distributions; provided, further, any such
OP Unit distributions made to the Company will only be considered distributions
for purposes of this definition to the extent they are subsequently distributed
by the Company to its shareholders. For purposes of this definition, quarterly
Cash Available for Distribution will be measured based on the most recent
quarterly results that, at the time of declaration of the applicable OP Unit
distributions by the Board of Directors or a committee thereof, have been
publicly disclosed or, if no quarterly results have been publicly disclosed in
the preceding 90 days, the results from the Company’s most recently completed
quarter that have been reviewed by the Company’s independent auditors and
certified by an officer of the Company.

“Registration Statement” means the Registration Statement on Form S-11 (file no.
333-201106) filed by the Company.

“REIT” has the meaning set forth in the Recitals.

“Renewal Term” means a period commencing on the expiration of the Initial Term
or a Renewal Term and ending on the earlier of (i) the date that is five years
from the commencement of such Renewal Term and (ii) a Successful Challenge.

“SEC” means the United States Securities and Exchange Commission.

 

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“Securities Act” means the Securities Act of 1933, as amended.

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, trust, partnership or joint venture, or other Entity of which
a majority of (i) the voting power of the voting equity securities or (ii) the
outstanding Equity Interests is owned, directly or indirectly, by such Person.

“Successful Challenge” means the date a court of competent jurisdiction has
determined in a final, non-appealable order that this Agreement, or any term or
provision hereof, after giving effect to Section 27, caused a termination of the
Company’s REIT election under Section 856(g) of the Code.

“Termination Fee” has the meaning set forth in Section 16(b).

“Third Panel Member” has the meaning set forth in Section 24(b).

“Threshold Distribution Amount” means an amount per OP Unit equal to $0.270, as
adjusted for recapitalizations, reclassifications, stock splits, stock dividends
or other similar events.

“Total Equity” means, as of a particular date, the amount of total equity
reflected on the Company’s consolidated balance sheet as of such date (before
any reduction or deduction therefrom as a result of noncontrolling interest)
prepared in accordance with GAAP; provided that, Total Equity as of December 31,
2014 shall be $873.3 million. For reference, the “Total Equity” line is not
included in the Company’s audited Consolidated Balance Sheets included in the
Registration Statement (such line item is entitled “Total Members’ Capital” on
such balance sheets), but is included in the Company’s unaudited Pro Forma
Condensed Consolidated Balance Sheet as of September 30, 2014 included in the
Registration Statement. The Company expects that such line item will continue to
be included in the Company’s balance sheet data following the completion of the
Initial Public Offering.

Section 2. Appointment and Duties of the Manager.

(a) The Company and the Operating Partnership (in each case, on its own behalf
and on behalf of its Subsidiaries) hereby appoint the Manager to manage the
Assets and the day-to-day operations of the Company Entities subject to the
further terms and conditions set forth in this Agreement, and the Manager hereby
agrees to use its reasonable best efforts to perform each of the duties set
forth herein except where a higher standard of care is specified in this
Agreement. The appointment of the Manager shall be exclusive to the Manager
except to the extent that the Manager otherwise agrees, in its sole and absolute
discretion, and except to the extent that the Manager elects, pursuant to the
terms of this Agreement, to cause the duties of the Manager hereunder to be
provided by third parties.

(b) The Parties acknowledge that (i) the Manager is an Affiliate of Hunt; and
(ii) the Manager may perform its services for the Company Entities in part
through the personnel and facilities of Hunt or other Hunt Affiliates.

 

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(c) The Manager, in its capacity as manager of the Assets and the day-to-day
operations of the Company Entities, at all times will be subject to the
supervision and oversight of the Company’s Board of Directors and will have only
such functions and authority as the Company may delegate to it, including the
functions and authority identified herein and delegated to the Manager hereby.
The Manager will be responsible for the day-to-day operations of the Company
Entities and will perform (or cause to be performed) in accordance with the
guidelines that may be adopted from time to time by the Board of Directors, and
subject to the budget limitations set forth in Section 11(a), such services and
activities relating to the Assets and operations of the Company Entities as set
forth herein, including:

(i) administering the day-to-day business and performing and supervising the
performance of such other administrative functions necessary or appropriate for
the Company Entities’ management, including the collection of revenues and the
payment of debts and obligations;

(ii) providing executive and administrative personnel, office space and office
services required in rendering services to the Company Entities;

(iii) engaging, retaining and supervising, on behalf of a Company Entity, such
services of accountants, legal counsel, appraisers, insurers, brokers, transfer
agents, registrars, investment banks, valuation firms, financial advisors, due
diligence firms, underwriting review firms and banks as the Manager deems
necessary or advisable in connection with the management and operations of such
Company Entity;

(iv) communicating with the holders of any of the securities of a Company Entity
as required to satisfy the reporting and other requirements of any governmental
bodies or agencies or trading markets and to maintain effective relations with
such holders, including website maintenance, logo design, analyst presentations,
investor conferences and annual meeting arrangements;

(v) preparing for the review and approval of the Board of Directors and filing
on behalf of the Company Entities current reports on Form 8-K, quarterly reports
on Form 10-Q and annual reports on Form 10-K, proxy statements and other reports
required to be filed by the Exchange Act with the SEC and otherwise satisfying
reporting and compliance obligations under applicable securities laws or the
rules of the New York Stock Exchange and any exchange on which securities of a
Company Entity are listed;

(vi) arranging marketing materials, advertising, industry group activities (such
as conference participation and industry organization memberships) and other
promotional efforts designed to promote the business of the Company Entities;

(vii) communicating with analysts and the investment community generally;

(viii) sourcing, evaluating, submitting for Board of Director approval, and,
subject to obtaining such Board of Director approval, directing the issuance of
any common or preferred stock issuances or other equity issuances;

 

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(ix) drawing on existing lines of credit at such times as the Manager deems
appropriate to support the business of the Company Entities and sourcing,
facilitating, evaluating and submitting for Board of Director approval any other
loan, indebtedness, guaranty or other financing arrangements necessary or
appropriate in connection with the business of the Company Entities and managing
the Company’s and the Company Entities’ relationships with existing or potential
lenders;

(x) evaluating and recommending to the Board of Directors hedging strategies and
engaging in hedging activities, consistent with such strategies as modified from
time to time, while maintaining the Company’s qualification as a REIT;

(xi) opening and managing Company Accounts and treasury/cash management
activities on behalf of the Company Entities;

(xii) investing and reinvesting any money and securities in short-term
investments pending investment in other investments; paying related fees, costs
and expenses;

(xiii) advising the Board of Directors on capital structure and capital raising;

(xiv) negotiating with tenants any new leases, lease amendments, lease
supplements or lease renewals, all in accordance with leasing standards
promulgated by the Board of Directors from time to time, and causing the
applicable Company Entity to perform its obligations under any such agreements
and enforcing any related rights; provided, however, the negotiation and
execution of any operating lease of a transmission and distribution Asset to an
operator thereof (e.g., Sharyland Utilities, L.P.), and any amendments thereto,
shall be subject to the direction and, subject to procedures approved by the
Board of Directors, approval of the Board of Directors;

(xv) evaluating, negotiating, submitting for Board of Director approval, and,
subject to receipt of such Board of Director approval, entering into, any
project acquisitions from a Hunt Affiliate in accordance with the terms of the
Development Agreement or from third parties;

(xvi) working with tenants or other third parties to construct transmission and
distribution projects, including causing a Company Entity to negotiate, enter
into and perform its obligations under any related construction contracts,
engineering, procurement and construction (EPC) contracts or other contracts
related to such construction activities;

(xvii) preparing annual budgets, and any related amendments, for Board of
Director approval and causing the Company Entities to perform and implement
then-effective annual budgets;

(xviii) preparing financial statements;

 

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(xix) coordinating the relationship with external auditors, subject to oversight
from the Audit Committee or other appropriate governing body when appropriate;

(xx) administering bookkeeping and accounting functions as are required for the
management and operation of the Company Entities;

(xxi) evaluating and recommending and, subject to obtaining approval of the
Board of Directors, making any accounting policy changes;

(xxii) designing, preparing, updating and monitoring internal control over
financial reporting and disclosure controls and procedures, subject to oversight
from the Audit Committee or other appropriate governing body when applicable;

(xxiii) managing any internal audit function required by securities laws,
exchange rules or the Board of Directors, including, if appropriate, engaging a
third party firm on behalf of a Company Entity to provide such function, and
managing the relationship with that firm, subject to oversight from the Audit
Committee or other appropriate governing body when appropriate;

(xxiv) sourcing, evaluating and submitting for Board of Director approval, and,
subject to receipt of such Board of Director approval, entering into, any
potential merger, acquisition, joint venture, financing, development,
refinancing or disposition opportunities;

(xxv) coordinating and managing the business of any joint venture or
co-investment interests a Company Entity holds directly or indirectly and
conducting all matters with the joint venture or co-investment partners;

(xxvi) sourcing and evaluating relationships with potential project developers;

(xxvii) monitoring the insurance required under the Company’s leases and
sourcing and evaluating any insurance, such as director and officer insurance,
and, subject to obtaining Board of Director or other appropriate approvals when
applicable, causing a Company Entity to obtain any such insurance;

(xxviii) enforcing the rights of Company Entities under any applicable insurance
policies when and as appropriate, subject to oversight and direction from the
Board of Directors or a committee thereof, when appropriate;

(xxix) assisting the Company regarding the maintenance of its qualification as a
REIT and monitoring compliance with the various REIT qualification tests and
other tax laws and regulations, and, in accordance with Section 8(b)(ii) hereof,
causing the Company to qualify as a REIT for U.S. federal income tax purposes;

 

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(xxx) managing all tax matters, including making necessary tax filings and
causing each Company Entity to make any related payments that are owed to taxing
authorities and filing appropriate tax appeals;

(xxxi) scheduling, managing and preparing materials for all meetings of the
Board of Directors or committees thereof;

(xxxii) counseling the Board of Directors in connection with any policy
decisions;

(xxxiii) subject to obtaining Board of Director or other appropriate Company
approvals, handling and resolving all claims, disputes or controversies between
Company Entities and third parties;

(xxxiv) furnishing the Board of Directors with reports and statistical and
economic research regarding activities and services performed by the Manager on
behalf of a Company Entity, as appropriate;

(xxxv) assisting the Company Entities in complying with all regulatory
requirements applicable to the Company Entities with respect to the Company
Entities’ business;

(xxxvi) keeping the Board of Directors apprised of material events affecting the
assets of the Company Entities, and, from time to time, at the request of the
Board of Directors, making reports to the Company of its performance of the
services set forth herein;

(xxxvii) performing the functions and tasks delegated to the Company pursuant to
that certain Delegation Agreement dated on or around the date hereof between
Sharyland Utilities, L.P. and the Company related to responsibilities and rights
under the Third Amended and Restated Company Agreement of Sharyland
Distribution & Transmission Services, L.L.C.; and

(xxxviii) performing such other services as may be required from time to time
for the management of, and other activities relating to, the Assets and business
and operations of the Company Entities as the Board of Directors shall
reasonably request or as Manager deems appropriate under the particular
circumstances.

(d) The Manager shall have the right and power to establish an employee stock
purchase plan (as such term is defined in section 423 of the Code) at the
Company for the benefit of employees of the Manager, Hunt and their Affiliates;
provided that, the Manager shall fund all costs associated with any such plan,
including the funds necessary to purchase shares of the Company’s stock in the
open market pursuant to the plan.

(e) In performing its duties under this Section 2, the Manager shall be entitled
to rely reasonably on qualified experts and professionals (including
accountants, legal counsel and other service providers) hired by the Manager at
the Company Entities’ sole cost and expense (subject to the last paragraph of
Section 10).

 

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Section 3. Devotion of Time; Additional Activities.

(a) The Manager and its Affiliates will provide the Company Entities with a
management team, including a Chief Executive Officer, President and Chief
Financial Officer, as well as other support personnel, to provide the management
services to be provided by the Manager to the Company Entities hereunder, the
members of which team shall devote such portion of their time to the management
of the Company Entities as is necessary and appropriate to operate the
businesses of the Company Entities. The Manager shall not be obligated to
dedicate itself exclusively to the management of the Company Entities nor shall
the Manager’s personnel be obligated to dedicate any specific portion of their
time to the Company Entities; provided, however, that the Manager devotes
sufficient resources to the business of the Company Entities as is necessary and
appropriate, commensurate with its level of activity, to discharge Manager’s
obligations under this Agreement. The Manager shall dedicate sufficient time and
shall engage and make available sufficient personnel (including personnel of the
Manager’s Affiliates) to perform the tasks and activities that typically would
be performed internally (and not outsourced to third parties) by a manager
rendering management and advisory services similar to those to be rendered by
the Manager hereunder, and the Manager shall engage third parties to perform
such tasks and activities only in accordance with the budget limitations set
forth in Section 11(a) hereof. For clarity, nothing in this Section 3(a),
Section 2 or any other provision of this Agreement will require the Manager or
any Affiliate thereof to bear or incur any Expenses (except as described in the
last paragraph of Section 10).

(b) Subject to the provisions of Section 3(a) and the Development Agreement,
nothing in this Agreement shall (i) prevent the Manager, Hunt or any of their
Affiliates, officers, directors, employees or personnel, from engaging in other
businesses or from rendering services of any kind (including the services to be
provided to the Company Entities hereunder) to any other Person, including
investing in, or rendering advisory services to others investing in, any type of
business (including acquisitions of assets that meet the principal investment
objectives of the Company), whether or not the investment objectives or policies
of any such other Person or Entity are similar to those of the Company or
(ii) in any way bind or restrict the Manager, Hunt or any of their Affiliates,
officers, directors, employees or personnel from buying, selling or trading any
securities or investments for their own accounts or for the account of others
for whom Hunt or any of its Affiliates (other than the Manager), officers,
directors, employees or personnel may be acting. For the avoidance of doubt, the
foregoing shall not limit any of the Company Entities’ rights under the
Development Agreement.

(c) Managers, partners, officers, employees, personnel and agents of the Manager
or Affiliates of the Manager may serve as directors, officers, employees,
personnel, agents, nominees or signatories for the Company Entities, to the
extent permitted by their Governing Instruments or by any resolutions duly
adopted by the applicable governing entities pursuant to the Company Entities’
Governing Instruments. When executing documents or otherwise acting in such
capacities for the Company Entities, such persons shall use their respective
titles in the applicable Company Entity.

Section 4. Development Activities and Rights of First Offer. On the date hereof,
the Company, the Operating Partnership, Sharyland Utilities, L.P. and Hunt
Transmission Services, L.L.C. have entered into the Development Agreement,
which, among other things, governs (a)

 

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the rights of the Company Entities to develop and construct Footprint Projects
(as defined in the Development Agreement) and (b) the circumstances under which
Hunt must offer to the Company the opportunity to acquire a ROFO Project (as
defined in the Development Agreement).

Section 5. Agency. Without expanding in any way the Manager’s powers or
authorities in Section 2, the Manager may act as agent of the Company Entities
in acquiring, financing, leasing, managing and disposing of Assets, disbursing
and collecting the funds of the Company Entities, paying the debts and
fulfilling the obligations of the Company Entities, supervising the performance
of professionals engaged by or on behalf of the Company Entities and handling,
prosecuting and settling any claims of or against the Company Entities, the
Board of Directors, holders of the Company Entities’ securities or
representatives or properties of the Company Entities.

Section 6. Bank Accounts. The Manager may establish and maintain one or more
bank accounts in the name of any Company Entity (any such account, a “Company
Account”), and may collect and deposit funds into any such Company Account or
Company Accounts, and disburse funds from any such Company Account or Company
Accounts in accordance herewith; and the Manager shall, on a quarterly basis or
upon request of the Board of Directors or a committee thereof from time to time,
render appropriate accountings of such collections and payments to the Board of
Directors and, upon request, to the auditors of the Company Entities. All funds
collected by Manager on behalf of Company Entities shall be deposited by Manager
in Company Accounts.

Section 7. Records; Confidentiality. The Manager shall maintain appropriate
books of accounts and records relating to services performed under this
Agreement, and such books of account and records shall be accessible for
inspection by representatives of the Company Entities at any time during normal
business hours upon reasonable advance notice. The Manager shall keep
confidential any and all information obtained in connection with the services
rendered under this Agreement and shall not disclose any such information (or
use the same except in furtherance of its duties under this Agreement) to
unaffiliated third parties except (i) with the prior written consent of the
Board of Directors; (ii) to legal counsel, accountants and other professional
advisors to the Company; (iii) to appraisers, financing sources and others in
the ordinary course of the Company’s business; (iv) pursuant to the order of
governmental officials having jurisdiction over any Company Entity; (v) in
connection with any governmental or regulatory filings of the Company Entities
or disclosure or presentations to the Company’s stockholders or prospective
stockholders; (vi) as required by law or legal process to which the Manager or
any Person to whom disclosure is permitted hereunder is a party; or (vii) to the
extent reasonably required to perform the services under this Agreement or
otherwise in connection with the business or assets of the Company Entities. The
foregoing shall not apply to information which has previously become publicly
available through the actions of a Person other than the Manager not resulting
from the Manager’s violation of this Section 7. The provisions of this Section 7
shall survive the expiration or earlier termination of this Agreement for a
period of three years. The Manager shall cause its agents, representatives and
subcontractors to keep confidential any such information to the same degree set
forth in this Section 7.

 

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Section 8. Obligations of Manager; Restrictions.

(a) The Manager shall require each seller or transferor of assets to the Company
Entities to make such representations and warranties regarding such assets as
may, in the commercially reasonable judgment of the Manager, be necessary and
appropriate. In addition, the Manager shall take such other action as it deems
necessary or appropriate in its commercially reasonable discretion with regard
to the protection of the Assets.

(b) The Manager shall use its reasonable best efforts to monitor relationships
among the Company Entities, any tenant that leases the assets of the Company
Entities, the Manager and its Affiliates and holders of equity interests in the
Company to ensure compliance with REIT rules and regulations related to related
party rents.

(c) The Manager shall refrain from any action that, in its sole but reasonable
judgment made in good faith, (i) is not in compliance with the guidelines and
policies of the Board of Directors, (ii) would adversely affect the status of
the Company as a REIT under the Code, (iii) would adversely affect the Company
Entities’ status as an entity intended to be exempted or excluded from
investment company status under the Investment Company Act or (iv) would violate
any law, rule or regulation of any governmental body or agency having
jurisdiction over any Company Entity or that would otherwise not be permitted by
the Company Entities’ Governing Instruments, code of conduct or other compliance
policies. If the Manager is ordered to take any such action by the Board of
Directors, the Manager shall promptly notify the Board of Directors of the
Manager’s judgment that such action would adversely affect such status or
violate any such law, rule or regulation or the Governing Instruments.

Section 9. Compensation.

(a) During the Initial Term and any Renewal Term, the Operating Partnership
shall pay the Manager an annual Base Fee. The annual Base Fee shall be payable
in cash in quarterly installments in arrears on the last day of each calendar
quarter (or the first business day that follows such day, if the last day of the
calendar quarter is not a business day). Within 10 days of the receipt by the
Company of its audited financial statements with respect to the most recently
completed fiscal year, the Manager shall deliver to the Board of Directors for
informational purposes only its computation of the Base Fee (and the
identification of the applicable quarterly installments in which the Base Fee
will be paid by the Company) based on the amount of Total Equity reflected in
such financial statements (or, in the case of Total Equity as of December 31,
2014, derived from such financial statements). If the Company does not have
audited financial statements within 90 days of the end of the most recently
completed fiscal year, the Manager shall calculate and send to the Board of
Directors its computation of Total Equity as of the end of the most recent
fiscal year and the resulting Base Fee, in which case the Audit Committee shall
review and approve or disapprove the calculation of the Base Fee within 10 days
of receipt thereof from the Manager. If the Manager and the Audit Committee are
unable to agree on the calculations during such 10 day period, the dispute will
be submitted to arbitration pursuant to Section 24 of this Agreement (however,
if the audited financial statements are received before the arbitration is
completed, then the calculation shall be based on such financial statements).

 

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(b) During the Initial Term and any Renewal Term, the Operating Partnership
shall pay the Manager the Incentive Fee in cash. The Incentive Fee shall be
payable within five days of the actual payment of Quarterly Distributions by the
Operating Partnership. In connection with its recommendation regarding the
amount of the Quarterly Distribution the Operating Partnership should make in a
calendar quarter, the Manager shall deliver to the Board of Directors its
computation of the Incentive Fee based on the amount of such recommended
Quarterly Distribution during such quarter. If the Audit Committee determines
that the amount of Quarterly Distributions will be different than the amount
recommended by the Manager, then the Manager will re-calculate the Incentive Fee
payment based on the Audit Committee’s determination of Quarterly Distributions.
In connection with approving the amount of Quarterly Distribution, the Audit
Committee will also approve or disapprove the amount of the Incentive Fee. If
the Audit Committee does not approve the amount of the Incentive Fee in
connection with any such approval of the amount of Quarterly Distributions, the
Manager may submit the determination of the amount of the Incentive Fee to
arbitration pursuant to Section 24 of this Agreement.

(c) In the event that the Company’s or the Operating Partnership’s financial
statements with respect to any period during the Initial Term or any Renewal
Term are restated, and such restatement results in a change to the calculation
of Total Equity or Cash Available for Distribution that would have caused the
amount of the Base Fee or Incentive Fee paid in any period or the amount of the
Termination Fee to have been less than the amount actually paid, the Manager
shall re-pay to the Company any such excess fee amounts it received. To the
extent the Board of Directors or a committee thereof determines a portion of the
Base Fee, Incentive Fee or Termination Fee is recoverable from the Manager
pursuant to this Section 9(c), the Board of Directors or committee thereof may
(1) require the Manager to re-pay such amount in cash directly to the Operating
Partnership within 30 days of the determination that excess fees have been paid,
(2) reduce future payments of the Base Fee, Incentive Fee or Termination Fee by
such amounts or (3) recover such amounts through any combination of (1) and (2).
This Section 9(c) shall survive the expiration or earlier termination of this
Agreement.

Section 10. Expenses of the Company. The Company Entities shall bear and be
responsible for all expenses related to the conduct of the business of the
Company Entities (collectively, the “Expenses”), including any such Expenses
initially incurred by the Manager, and including the following:

(a) expenses in connection with the acquisition, disposition and financing of
other entities and Assets on behalf of the Company;

(b) costs of legal, tax, accounting, third party administrators for the
establishment and maintenance of the books and records, consulting, auditing,
administrative, and other similar services rendered for the Company Entities by
third parties retained by a Company Entity or by the Manager on behalf of a
Company Entity;

(c) the compensation and expenses of the Company’s directors and the cost of
liability insurance related to the officers, directors, consultants or agents of
any Company Entity and any obligations to indemnify any such persons;

 

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(d) costs associated with the establishment and maintenance of any of the
Company Entities’ secured and unsecured forms of borrowings (including
commitment fees, accounting fees, legal fees, closing and other similar costs)
or any of the Company Entities’ securities offerings (including the Initial
Public Offering);

(e) expenses connected with communications to holders of any Company Entities’
securities and other bookkeeping and clerical work necessary in maintaining
relations with holders of such securities and in complying with the continuous
reporting and other requirements of governmental bodies or agencies, including
all costs of preparing and filing required reports with the SEC, the costs
payable by a Company Entity to any transfer agent and registrar in connection
with the listing and/or trading of the Company’s stock on any exchange, the fees
payable by a Company Entity to any such exchange in connection with its listing,
and costs of preparing, printing and mailing any annual report to stockholders
and proxy materials with respect to any stockholder meetings;

(f) costs associated with any computer software or hardware, electronic
equipment or purchased information technology services from third party vendors
that is used for the Company Entities; provided that, if such software,
hardware, equipment or services also benefit the businesses of Affiliates of the
Manager or activities of the Manager that are unrelated to those of the Company
Entities, the Expenses shall only include an amount reasonably allocated to the
Company Entities by the Manager;

(g) costs and expenses incurred with respect to market information systems and
publications, pricing and valuation services, research publications and
materials, including financial analytics and market data, and settlement,
clearing and custodial fees and expenses, relevant to the business of a Company
Entity;

(h) compensation and expenses of the Company’s custodian and transfer agent, if
any;

(i) the costs of maintaining the Company’s compliance with all federal, state
and local rules and regulations or any other regulatory agency;

(j) all taxes and license fees payable by any Company Entity;

(k) all insurance costs incurred in connection with the operation of the
business of the Company Entities;

(l) all other costs and expenses relating to the business and investment
operations of the Company Entities, including the costs and expenses of
acquiring, owning, protecting, maintaining, developing and disposing of Assets,
including appraisal, valuation, reporting, audit and legal fees;

(m) expenses relating to any office(s) or office facilities, including disaster
backup recovery sites and facilities, maintained for the Company Entities or
Assets separate from the office or offices of the Manager;

 

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(n) expenses connected with the payments of interest, dividends or distributions
in cash or any other form authorized or caused to be made by the Board of
Directors to or on account of holders of the Company Entities’ securities,
including in connection with any dividend reinvestment plan;

(o) any judgment or settlement of pending or threatened proceedings (whether
civil, criminal or otherwise) against any Company Entity, or against any
trustee, director or officer of any Company Entity in his capacity as such for
which any Company Entity is required to indemnify such trustee, director or
officer by any court or governmental agency;

(p) all costs and expenses relating to the development and management of the
Company’s website; and

(q) all other third-party expenses actually incurred by the Manager that are
reasonably necessary for the performance by the Manager of its duties and
functions under this Agreement.

Notwithstanding the foregoing or anything to the contrary herein, Expenses will
not include the following, which will be the responsibility of (and paid
directly by) the Manager or another Affiliate thereof: (1) compensation expenses
related to the Manager’s and its Affiliates’ personnel, including officers of
the Company, (2) occupancy costs incurred by the Manager related to its place of
business, (3) time or project-based billing for work done by Affiliates of the
Manager, (4) office-related costs, travel and entertainment costs or costs
associated with professional service organizations, publications, professional
development or related matters for the Manager’s or any of its Affiliate’s
employees, or (5) income or franchise taxes payable by the Manager. The
provisions of this Section 10 shall survive the expiration or earlier
termination of this Agreement to the extent such Expenses have previously been
incurred or are incurred in connection with such expiration or termination. For
the avoidance of doubt, if a particular item of expense is described in this
paragraph, it will be the obligation of Manager or an Affiliate thereof, and not
the obligation of a Company Entity, even if such item of expense falls within
one of the enumerated list of Expenses set forth in Section 10(a)-(q) above.

Section 11. Preparation of Expense Budget; Calculation and Payment of Expenses.

(a) The Manager shall, in connection with the annual budgeting process
established by the Board of Directors, submit to the Board of Directors its
estimate of the general and administrative Expenses (“G&A Expenses”) to be
incurred on behalf of the Company Entities for each annual budgeting period. The
Manager shall use reasonable best efforts to cause the G&A Expenses for such
annual period not to materially exceed the estimates submitted to the Board of
Directors, and shall promptly notify the Board of Directors of any expected
material deviations from the estimates and the reasons for such deviations. Upon
receipt of such notice of expected material deviations from the budget, the
Board of Directors may instruct the Manager that any or all additional expenses
in excess of the budget shall be subject to approval of the Board of Directors.

 

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(b) The Manager may prepare and deliver to the Company a statement documenting
the unreimbursed Expenses incurred by the Manager on behalf of a Company Entity
in accordance herewith, which shall be reimbursed by the Operating Partnership
to the Manager on or before the 30th day following the date of delivery of such
statement. Expenses incurred by the Manager on behalf of a Company Entity in
accordance herewith shall be reimbursed by the Operating Partnership to the
Manager. The provision of this Section 11 shall survive the expiration or
earlier termination of this Agreement with respect to Expenses that have
previously been incurred or are incurred in connection with such expiration or
termination. All obligations of the Company under this Agreement to pay any
fees, reimbursements, indemnities or other amounts to the Manager shall be paid
by the Operating Partnership.

Section 12. Insurance.

(a) The Company will cover the Manager and its Affiliates under the Company’s
directors and officers insurance policy, including professional liability
coverage with limits no less than $50,000,000. The Manager may also request that
additional professional liability insurance be purchased and added to the
Company policy, and the Manager shall bear any premium costs over and above the
cost of coverage limits of $50,000,000. The Manager and the Company shall review
all such policies annually and shall mutually agree upon the terms and
conditions of such policies.

(b) Manager (or an Affiliate of Manager, on Manager’s behalf), shall maintain,
at its expense and at all times during the term of this Agreement, insurance as
follows:

(i) Commercial General Liability Insurance including Umbrella Liability
Insurance, written on occurrence basis, with limits of not less than $50,000,000
combined for bodily injury and property damage liability.

(ii) Workers Compensation Insurance, as required by the law of the State where
the Assets are located, covering all Manager’s employees, and Employer’s
Liability Insurance with limits of not less than $1,000,000 for bodily injury by
accident and $1,000,000 for bodily injury by disease.

(iii) Commercial Crime and/or Employee Dishonesty Insurance, covering the
activities of all of its employees who may handle or be responsible for monies
or other property of Company, with limits of not less than $5,000,000.

Upon request by the Company, the Manager shall furnish to the Company
certificates of insurance evidencing the insurance coverage required hereunder.
The Company Entities shall be included as additional insureds on the Manager’s
insurance policies.

(c) Notwithstanding any other provision in this Agreement to the contrary, each
of the Company and the Manager hereby waives any and all rights of recovery,
claim, action or cause of action, and release all claims against the other
party, and the other party’s Affiliates, agents, employees, officers, partners,
servants and shareholders, for any loss or damage to such party’s property by
reason of any casualty which is covered by insurance, regardless of the cause or
origin thereof, including, without limitation, the negligence, gross negligence
or willful misconduct of the other party or the other party’s Affiliates,
agents, employees, officers, partners, servants or shareholders. Each party also
covenants that all property insurance policies carried by such party shall
contain provisions under which such party’s insurer waives its right of
subrogation against the other party (and such policies shall be so endorsed),
unless such waiver is illegal or against public policy or such waiver renders
such policy void or voidable, or is not available at a reasonable cost.

 

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Section 13. Limits of Manager Responsibility; Indemnification.

(a) The Manager assumes no responsibility under this Agreement other than to
render the services in the manner called for under this Agreement and shall not
be responsible for any action of the Board of Directors in following or
declining to follow any advice or recommendations of the Manager, including as
set forth in Section 8(b) of this Agreement. The Manager, its Affiliates, their
respective officers, directors, stockholders and employees and any Person
providing sub-advisory services to the Manager will not be liable to the
Company, to the Board of Directors, the Company’s stockholders or the Operating
Partnership’s partners for any acts or omissions by any such Person, pursuant to
or in accordance with this Agreement, except by reason of acts or omissions
constituting gross negligence, willful misconduct, bad faith or reckless
disregard of their duties under this Agreement, as determined by a final
non-appealable order of a court of competent jurisdiction. The Operating
Partnership shall, to the full extent lawful, reimburse, indemnify and hold the
Manager, its Affiliates, their respective officers, directors, stockholders and
employees and any Person providing sub-advisory services to the Manager (each a
“Manager Indemnified Party”), harmless of and from any and all expenses, losses,
damages, liabilities, demands, charges and claims of any nature whatsoever
(including reasonable attorneys’ fees) (“Damages”) in respect of or arising from
any acts or omissions of such Manager Indemnified Party, unless it has been
determined in a final non-appealable decision pursuant to Section 24 or
non-appealable order of a court of competent jurisdiction that such Damages
result from such Manager Indemnified Party’s gross negligence, willful
misconduct, bad faith or reckless disregard of duties under this Agreement.

(b) The Manager shall, to the full extent lawful, reimburse, indemnify and hold
the Company Entities and their respective officers, directors, employees and
agents (each, a “Company Indemnified Party” and together with a Manager
Indemnified Party, the “Indemnitee”), harmless of and from any and all Damages
in respect of or arising from (i) acts or omissions of the Manager constituting
gross negligence, willful misconduct, bad faith or reckless disregard of its
duties under this Agreement, as determined in a final non-appealable decision
pursuant to Section 24 or non-appealable order of a court of competent
jurisdiction or (ii) any claims by or relating to the Manager’s or its
Affiliates’ employees relating to the terms and conditions of their employment
by the Manager or such Affiliate (including, without limitation, any liability
with respect to severance or withdrawal liability).

(c) The Indemnitee will promptly notify the party against whom indemnity is
claimed (the “Indemnitor”) of any claim for which it seeks indemnification;
provided, however, that the failure to so notify the Indemnitor will not relieve
the Indemnitor from any liability which it may have hereunder, except to the
extent such failure actually prejudices the Indemnitor. The Indemnitor shall
have the right to assume the defense and settlement of such claim; provided,
that the Indemnitor notifies the Indemnitee of its election to assume such
defense and settlement within 30 days after the Indemnitee gives the Indemnitor
notice of the claim. In such case, the Indemnitor will not settle or compromise
such claim, and the Indemnitee

 

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will not be liable for any such settlement made by Indemnitor without
Indemnitee’s prior written consent. If the Indemnitor is entitled to, and does,
assume such defense by delivering the aforementioned notice to the Indemnitee,
the Indemnitee will (i) have the right to approve the Indemnitor’s counsel
(which approval will not be unreasonably withheld, delayed or conditioned),
(ii) be obligated to cooperate in furnishing evidence and testimony and in any
other manner in which the Indemnitor may reasonably request and (iii) be
entitled to participate in (but not control) the defense of any such action,
with its own counsel and at its own expense.

(d) The Operating Partnership shall be required to advance funds to a Manager
Indemnified Party for legal expenses and other costs incurred as a result of any
legal action or proceeding if a claim in respect thereof is to be made pursuant
hereto and if requested by such Manager Indemnified Party if (i) such suit,
action or proceeding relates to or arises out of, or is alleged to relate to or
arise out of or has been caused or alleged to have been caused in whole or in
part by, any action or inaction on the part of the Manager Indemnified Party in
the performance of its duties or provision of its services on behalf of the
Company Entities; and (ii) the Manager Indemnified Party affirms in writing that
such person in good faith believes that it has met the standard of conduct
necessary for indemnification under this Section 13 and undertakes to promptly
repay any funds advanced pursuant to this Section 13(d) in cases in which such
Manager Indemnified Party would not be entitled to indemnification under
Section 13(a). If advances are required under this Section 13(d), the Manager
Indemnified Party shall furnish the Operating Partnership with an affirmation
and undertaking as set forth in clause (ii) of the preceding sentence and shall
thereafter have the right to bill the Operating Partnership for, or otherwise
require the Operating Partnership to pay, at any time and from time to time
after such Manager Indemnified Party shall become obligated to make payment
therefor, any and all reasonable amounts for which such Manager Indemnified
Party is entitled to indemnification under this Section 13, and the Operating
Partnership shall pay the same within thirty (30) days after request for
payment. In the event that a determination is made by a final non-appealable
decision pursuant to Section 24 or non-appealable order of a court of competent
jurisdiction that the Operating Partnership is not so obligated in respect of
any amount paid by it to a particular Manager Indemnified Party, such Manager
Indemnified Party will refund such amount within sixty (60) days of such
determination, and in the event that a determination is made by a final
non-appealable decision pursuant to Section 24 or non-appealable order of a
court of competent jurisdiction that the Operating Partnership is so obligated
in respect to any amount not paid by the Operating Partnership to a particular
Manager Indemnified Party, the Operating Partnership will pay such amount to
such Manager Indemnified Party within thirty (30) days of such final
determination, in either case together with interest at the current prime rate
plus two percent (2%) from the date paid until repaid or the date it was
obligated to be paid until the date actually paid.

(e) Any Manager Indemnified Party entitled to indemnification under this
Agreement must seek recovery under any insurance policies by which such Manager
Indemnified Party is covered and must obtain the Company’s written consent prior
to entering into any compromise or settlement which would result in the
Operating Partnership having an obligation to indemnify such Manager Indemnified
Party. Any amounts actually recovered under any applicable Company-funded
insurance policies will offset any amounts that the Operating Partnership owes
pursuant to the Operating Partnership’s indemnification obligations under this
Agreement. If the

 

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amounts for which indemnification is sought arise out of the conduct of the
Company’s or the Company Entities’ business and affairs and also of any other
person for which a Manager Indemnified Party was then acting in a similar
capacity, the amount of the indemnification to be provided by the Operating
Partnership may be limited to its proportionate share thereof if so determined
by the Operating Partnership in good faith.

Section 14. Intellectual Property; License.

(a) All Intellectual Property created or developed in connection with the
Manager’s performance of this Agreement or otherwise and the Intellectual
Property Rights associated therewith shall be the sole and exclusive property of
the Manager. The Company and Operating Partnership (on behalf of themselves and
any Subsidiary) shall assign and do hereby assign to the Manager all
Intellectual Property Rights in such Intellectual Property. The Manager hereby
grants the Company Entities a non-exclusive, perpetual, worldwide, fully paid
up, royalty-free, non-sub-licensable, non-transferable license and right to use
the Intellectual Property made in connection with the Manager’s performance of
this Agreement for their business purposes. The Company and the Operating
Partnership will, or will cause their Subsidiaries to, upon request of the
Manager, do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged and delivered all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances as may be requested by the
Manager to carry out the intent of this Agreement or to otherwise perfect,
record, confirm, or enforce the Manager’s rights in and to the Intellectual
Property.

(b) The Manager hereby grants to the Company Entities a non-transferable,
non-assignable, non-exclusive royalty-free right and license to use the logo
described on Exhibit A during the term of this Agreement.

Section 15. No Joint Venture. Nothing in this Agreement shall be construed to
make the Company (or any Subsidiary) and the Manager partners or joint venturers
or impose any liability as such on either of them.

Section 16. Term; Termination.

(a) Until this Agreement is terminated in accordance with its terms, this
Agreement shall be in effect during the Initial Term, and, subject to
Section 16(b) and Section 16(c), shall be automatically renewed for a Renewal
Term upon the expiration of the Initial Term and upon the expiration of each
Renewal Term. Notwithstanding the foregoing, in connection with the renewal of
this Agreement, at least 15 months prior to the expiration of the Initial Term
or a Renewal Term, a Party may request changes to this Agreement or the
Development Agreement to address market changes, changes in the relationship
between the Parties or such other changes in circumstances that a Party
determines in good faith warrant revisions to this Agreement (including, without
limitation, a request that the list of ROFO Projects included in the Development
Agreement be updated to include the transmission and development projects in the
then-current pipeline of Hunt and its Affiliates); provided, however, that the
Parties do not generally expect to change the manner in which the Base Fee,
Incentive Fee or Termination Fee are calculated unless such amounts are
determined to be, in consultation with a nationally recognized investment
banking firm, materially less favorable to the Manager or the Company,

 

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as the case may be, than other similar compensation arrangements for externally
managed vehicles in the same or comparable industries. Without limiting the
generality of the foregoing, the Parties shall negotiate any such requested
changes in good faith prior to the renewal of this Agreement, but neither Party
shall be obligated to agree to any such changes.

(b) Notwithstanding any other provision of this Agreement to the contrary, the
Independent Directors may elect not to renew this Agreement by delivering notice
of such election to the Manager at least 365 days prior to the end of the
Initial Term or any Renewal Term. In the event of such election, on the last day
of the Initial Term or Renewal Term, as applicable, the Operating Partnership
shall pay a termination fee (the “Termination Fee”) equal to three times the sum
of (i) the amount of the Base Fee paid with respect to the four full calendar
quarters preceding the date on which the termination notice is given and
(ii) the amount of the Incentive Fee paid with respect to the four full calendar
quarters preceding the date on which the termination notice is given. At the
Company’s election, the Termination Fee may be paid in cash or in OP Units (in
whole or in part). If the Company elects to pay the Termination Fee in OP Units,
such OP Units will be issued five days after the effective date of termination,
with the number of OP Units equal to the Termination Fee divided by the volume
weighted average price of the Company’s common stock on the New York Stock
Exchange (or such other national exchange on which the Company’s stock is then
traded) during the 10 trading day period that precedes the termination date. If
the Company’s common stock is not then traded on the New York Stock Exchange or
other national exchange, the Company will pay the Termination Fee in cash. For
the avoidance of doubt, the Termination Fee applies to terminations of this
Agreement pursuant to this Section 16(b) only and is not required to be paid in
the event of a termination of this Agreement pursuant to any other provision
hereof or for any other reason.

(c) Notwithstanding any other provision of this Agreement to the contrary, the
Manager may terminate this Agreement at any time upon 365 days’ prior written
notice to the Company and the Operating Partnership; provided, however, that the
Manager may not deliver notice of its termination of this Agreement prior to
December 31, 2018. In the event of a termination of this Agreement pursuant to
this Section 16(c), no Termination Fee shall be payable.

(d) Upon the expiration or termination of this Agreement for any reason, the
Manager shall: (i) immediately pay over to the Company Entities any and all
monies collected and held by the Manager for the account or on behalf of the
Company Entities, without deduction or offset; (ii) promptly turn over to the
Company Entities all books, papers, leases, agreements, documents, records, keys
and other items relating to the management and operation of the Assets; and
(iii) within thirty (30) days thereafter, render to the Company Entities a final
accounting with respect to the management and operation of the Assets through
the date of termination. In connection with any expiration or termination of
this Agreement for any reason, the Manager shall, prior to and following such
expiration or termination, cooperate with the Company Entities and provide
reasonable assistance to support a transition of the management duties to the
Company Entities or the Company’s designee.

(e) If this Agreement is terminated pursuant to this Section 16 or Section 18 of
this Agreement, such termination shall be without any further liability or
obligation of either party to the other, except that Sections 7, 9(c), 10,
11(b), 12(c), 13, and 19 through 28 will survive any such termination.

 

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Section 17. Assignment. This Agreement shall terminate automatically in the
event of its assignment, in whole or in part, by the Manager, unless such
assignment is consented to in writing by the Company after the approval of a
majority of the Board of Directors, including a majority of the Independent
Directors; provided, however, that the Manager may assign this Agreement to an
Affiliate of Hunt without the consent of the Company. Any such permitted
assignment shall bind the assignee under this Agreement in the same manner as
the Manager is bound, and the Manager shall be liable to the Company and the
Operating Partnership for all errors or omissions of the assignee under any such
assignment. In addition, the assignee shall execute and deliver to the Company
and the Operating Partnership a counterpart of this Agreement naming such
assignee as Manager. This Agreement shall not be assigned by the Company or the
Operating Partnership without the prior written consent of the Manager, except
in the case of assignment by the Company or Operating Partnership to another
REIT or other organization which is a successor (by merger, consolidation,
purchase of assets, or other transaction) to the Company or the Operating
Partnership, in which case such successor organization shall be bound under this
Agreement and by the terms of such assignment in the same manner as the Company
and Operating Partnership are bound under this Agreement.

Section 18. Termination for Cause. Notwithstanding anything to the contrary
contained in Section 16, the Company, with the approval of a majority of the
Independent Directors, may terminate this Agreement effective upon 30 days’
prior written notice of termination (or, with respect to clauses (iv) through
(vii) below, effective immediately upon written notice of termination) from the
Company to the Manager, without payment of any Termination Fee or any accrued
and unpaid Base Fee or Incentive Fee, if (i) the Manager materially breaches any
provision of this Agreement and, if such breach is capable of being cured, such
breach shall continue for a period of 30 days after written notice thereof
specifying such breach and requesting that the same be remedied in such 30-day
period, (ii) the Manager engages in any act of fraud, misappropriation of funds,
or embezzlement against any Company Entity, other than an immaterial
misapplication of funds that is promptly corrected, (iii) there is an event of
any bad faith, willful misconduct or gross negligence on the part of the Manager
in the performance of its duties under this Agreement that results in material
harm to any Company Entity, (iv) there is a commencement of any voluntary
proceeding relating to the Manager’s Bankruptcy or insolvency or an order for
relief in an involuntary Bankruptcy case, (v) there is a dissolution of the
Manager, (vi) the Manager is convicted of a felony (including a plea of nolo
contendere) or (vii) there is a Manager Change of Control (provided that, in the
case of (vii), any termination under this Section 18 must occur within 90 days
after the date the Independent Directors receive written notice from the Manager
of such Manager Change of Control, which Manager agrees to provide promptly).
For purposes of this Agreement, “Manager Change of Control” shall be deemed to
have occurred if members of the Hunt Group cease to both (1) own, directly or
indirectly, at least 51% of the Equity Interests in Manager or its successor
hereunder and (2) Control Manager or its successor hereunder. For purposes of
this Agreement: (A) “Control” means the possession, directly or indirectly, of
the power to direct or cause the direction of the management, policies or
activities of a Person, whether through ownership of voting securities, by
contract or otherwise; and (B)

 

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“Hunt Group” means (a) Ray L. Hunt and Hunter L. Hunt; (b) any lineal descendent
of the foregoing (including by adoption); (c) any spouse of the foregoing;
(d) any trust established primarily for the benefit of any one or more of the
foregoing; and (e) any entity controlled, individually or collectively, by any
of the foregoing Persons identified in the preceding clauses (a) through
(d) (including Hunt and its Subsidiaries).

Section 19. Action Upon Termination. From and after the effective date of
termination of this Agreement, pursuant to Sections 16 or 18 of this Agreement,
the Manager shall not be entitled to compensation for further services under
this Agreement, but shall be paid (i) if terminated pursuant to Section 16, all
compensation accruing to the date of termination, (ii) if terminated pursuant to
Section 16(b), the applicable Termination Fee, and (iii) as provided in
Section 10 and Section 11.

Section 20. Notices. All notices, offers or other communications required or
permitted to be given pursuant to this Agreement shall be in writing and may be
personally served, sent via facsimile, sent via electronic mail or sent by
United States mail or by commercial courier and shall be deemed to have been
given when received at the address set forth below:

If to the Manager:

Hunt Utility Services, LLC

Attn: Hunter L. Hunt, President

1900 North Akard Street

Dallas, TX 75201

Facsimile: 214-978-8989

E-mail: HHunt@huntoil.com

If to the Company:

InfraREIT, Inc.

Attn: Chief Executive Officer

1807 Ross Avenue, 4th Floor

Dallas, TX 75201

E-mail: DCampbell@huntutility.com

With a copy to:

InfraREIT, Inc.

Attn: General Counsel

1807 Ross Avenue, 4th Floor

Dallas, TX 75201

E-Mail: Legal@Huntutility.com

The address of any party hereto may be changed by a notice in writing given in
accordance with the provisions of this Section 20.

 

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Section 21. Binding Nature of Agreement; Third Party Beneficiaries; Successors
and Assigns. This Agreement shall be binding upon and inure solely to the
benefit of each Party hereto and, with respect to Section 13 of this Agreement,
the Indemnitees, and nothing in this Agreement, express or implied, is intended
to or shall confer upon any Person other than the Parties and their respective
successors and permitted assigns any legal or equitable right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.

Section 22. Complete Agreement; Amendments. This Agreement contains the entire
understanding of the parties with respect to the transactions contemplated
hereby and supersedes all prior arrangements or understandings with respect
thereto. This Agreement shall not be modified or amended except in a writing
signed by all Parties. No purported modifications or amendments, including
without limitation any oral agreement (even if supported by new consideration),
course of conduct or absence of a response to a unilateral communication, shall
be binding on any Party.

Section 23. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES TO THE CONTRARY.

Section 24. Arbitration.

(a) Any dispute under or relating to this Agreement shall, if not resolved by
the Parties within 60 days after notice of such dispute is served by one Party
to the other (or, if different, the period provided for resolution by the
Parties in the provision of this Agreement under which such dispute is brought),
be submitted to an “Arbitration Panel” comprised of three members. No more than
one panel member may be with the same firm (which shall not be deemed to
prohibit the panel members from being members of the same organization such as
the American Arbitration Association or Judicial Arbitration and Mediations
Services), and no panel member may have an economic interest in the outcome of
the arbitration.

(b) The Arbitration Panel shall be selected as follows: Within five business
days after the expiration of the period referenced above, the Manager shall
select a panel member meeting the criteria of the above paragraph (the “Manager
Panel Member”) and the Company shall select its panel member meeting the
criteria of the above paragraph (the “Company Panel Member”). If a Party fails
to timely select its respective panel member, the other Party may notify such
Party in writing of such failure, and if such Party fails to select its
respective panel member within three business days from such notice, then the
other Party may select such panel member on such Party’s behalf. Within five
business days after the selection of the Manager Panel Member and the Company
Panel Member, the Manager Panel Member and the Company Panel Member shall
jointly select a third panel member meeting the criteria of the above paragraph
(the “Third Panel Member”). If the Manager Panel Member and the Company Panel
Member fail to timely select the Third Panel Member and such failure continues
for more than three business days after written notice of such failure is
delivered to the Manager Panel Member and Company Panel Member by either the
Manager or the Company, either the Manager or the Company may request the
managing officer of the American Arbitration Association to appoint the Third
Panel Member.

 

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(c) Within ten business days after the selection of the Arbitration Panel, each
Party shall submit to the Arbitration Panel a written statement identifying its
summary of the issues and claims. Any Party may also request an evidentiary
hearing on the merits in addition to the submission of written statements. The
Arbitration Panel shall make its decision within 20 days after the later of
(i) the submission of such written statements of particulars, and (ii) the
conclusion of any evidentiary hearing on the merits, and shall take into
consideration the relative risks and rewards undertaken and capital invested by
each Party. The Arbitration Panel shall reach its decision by majority vote and
shall communicate its decision by written notice to the Parties.

(d) The decision by the Arbitration Panel shall be final, binding and conclusive
and shall be non-appealable and enforceable in any court having jurisdiction.
All hearings and proceedings held by the Arbitration Panel shall take place in
Dallas, Texas.

(e) The resolution procedure described herein shall be governed by the
Commercial Rules of the American Arbitration Association and the Procedures for
Large, Complex Commercial Disputes in effect as of the date hereof and subject
to the Texas General Arbitration Act to the extent such act is applicable
hereto.

(f) The Parties shall bear equally the fees, costs and expenses of the
Arbitration Panel in conducting the arbitration.

Section 25. No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of any party hereto, any right, remedy, power or
privilege hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges herein provided
are cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law. No waiver of any provision hereunder shall be effective unless
it is in writing and is signed by the party asserted to have granted such
waiver.

Section 26. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed part of this
Agreement.

Section 27. Cure of Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws, such
provision shall be fully severable, and this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, and the remaining provisions hereof shall remain in
full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement; provided,
however, that if such illegal, invalid or unenforceable provision may be made
legal, valid and enforceable by limitation thereof, then the provision shall be
revised and reformed to make it legal, valid and enforceable to the maximum
extent permitted by law. Without limiting the foregoing, if, due to an amendment
to any provision of the Code or the Treasury Regulations, the issuance of a

 

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court opinion in any tax litigation, or the issuance of an IRS revenue ruling or
revenue procedure, it is determined by tax counsel for the Company, or if a
court of competent jurisdiction determines with respect to the Company, that one
or more provisions of this Agreement cause or will cause the Company to fail to
meet one or more of the requirements that are required to be met in order for
the Company to continue to qualify as a REIT, then the provision or provisions
that caused or will cause such failure shall be fully severable, and this
Agreement shall be construed and enforced as if such provision or provisions
that caused such failure had never comprised a part hereof.

Section 28. Construction of Agreement. As used herein, the singular shall be
deemed to include the plural, and the plural shall be deemed to include the
singular, and all pronouns shall include the masculine, feminine and neuter,
whenever the context and facts require such construction. The headings,
captions, titles and subtitles herein are inserted for convenience of reference
only and are to be ignored in any construction of the provisions hereof. Except
as otherwise indicated herein, all section, schedule and exhibit references in
this Agreement shall be deemed to refer to the sections, schedules and exhibits
of and to this Agreement, and the terms “herein”, “hereof”, “hereto”,
“hereunder” and similar terms refer to this Agreement generally rather than to
the particular provision in which such term is used. Whenever the words
“including”, “include” or “includes” are used in this Agreement, they shall be
interpreted in a non-exclusive manner as though the words “but [is] not limited
to” immediately followed the same. Time is of the essence for this Agreement.
The language in all parts of this Agreement shall in all cases be construed
simply according to the fair meaning thereof and not strictly against the party
that drafted such language. Except as otherwise provided herein, references in
this Agreement to any agreement, articles, by-laws, instrument or other document
are to such agreement, articles, by-laws, instrument or other document as
amended, modified or supplemented from time to time.

Section 29. Multiple Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original hereof and all of which
taken together shall constitute one and the same agreement. If any signature is
delivered by facsimile transmission or by PDF, such signature shall create a
valid and binding obligation of the party executing (or on whose behalf the
signature is executed) with the same force and effect as if such facsimile or
PDF signature were an original thereof.

* * *

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement to be effective as
of the Effective Date.

 

HUNT UTILITY SERVICES, LLC, a Delaware limited liability company By:

/s/ David A. Campbell

Name: David A. Campbell Title: President INFRAREIT, INC., a Maryland corporation
By:

/s/ David A. Campbell

Name: David A. Campbell Title: President INFRAREIT PARTNERS, LP, a Delaware
limited partnership By: InfraREIT, L.L.C., its general partner By:

/s/ David A. Campbell

Name: David A. Campbell Title: President

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Exhibit A

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