<PAGE>

                                                                    EXHIBIT 10.5

                   BEHRINGER HARVARD OPPORTUNITY REIT I, INC.
                            2004 INCENTIVE AWARD PLAN

                                    SECTION 1.
                                     PURPOSE

        The purpose of this Plan is to promote the interests of the Company by
providing the opportunity to purchase or receive Shares, to receive Units, or to
receive compensation that is based upon appreciation in the value of Shares or
Units to Eligible Recipients in order to attract and retain Eligible Recipients
by providing an incentive to work to increase the value of Shares and Units and
a stake in the future of the Company that corresponds to the stake of each of
the Company's stockholders. The Plan provides for the grant of Incentive Stock
Options, Non-Qualified Stock Options, Restricted Stock Awards, Restricted Stock
Units, Restricted Unit Awards, and Stock Appreciation Rights to aid the Company
in obtaining these goals.


                                    SECTION 2.
                                   DEFINITIONS

        Each term set forth in this Section shall have the meaning set forth
opposite such term for purposes of this Plan and any Incentive Award Agreements
under this Plan (unless noted otherwise), and for purposes of such definitions,
the singular shall include the plural and the plural shall include the singular,
and reference to one gender shall include the other gender. Note that some
definitions may not be used in this Plan, and may be inserted here solely for
possible use in Incentive Award Agreements issued under this Plan.

        2.1     AFFILIATE means BHO Partners, LLC, Behringer Harvard Opportunity
OP I, LP, Behringer Harvard Opportunity Advisors I LP, Behringer Harvard
Partners, LLC, Behringer Securities LP, and HPT Management Services LP.

        2.2     BOARD means the Board of Directors of the Company.

        2.3     CAUSE shall mean an act or acts by an Eligible Recipient
involving (a) the use for profit or disclosure to unauthorized persons of
confidential information or trade secrets of the Company, a Parent or a
Subsidiary, (b) the breach of any contract with the Company, a Parent or a
Subsidiary, (c) the violation of any fiduciary obligation to the Company, a
Parent or a Subsidiary, (d) the unlawful trading in the securities of the
Company, a Parent or a Subsidiary, or of another corporation based on
information gained as a result of the performance of services for the Company, a
Parent or a Subsidiary, (e) a felony conviction or the failure to contest
prosecution of a felony, or (f) willful misconduct, dishonesty, embezzlement,
fraud, deceit or civil rights violations, or other unlawful acts.

        2.4     CHANGE OF CONTROL means either of the following:

                (a)     any transaction or series of transactions pursuant to
which the Company sells, transfers, leases, exchanges or disposes of
substantially all (I.E., at least eighty-five percent (85%)) of its assets for
cash or property, or for a combination of cash and property, or for other
consideration; or

                (b)     any transaction pursuant to which persons who are not
current stockholders of the Company acquire by merger, consolidation,
reorganization, division or other business combination or transaction, or by a
purchase of an interest in the Company, an interest in the Company so that after
such transaction, the stockholders of the Company immediately prior to such
transaction no longer have a controlling (I.E., 50% or more) voting interest in
the Company.

        2.5     CODE means the Internal Revenue Code of 1986, as amended.

<PAGE>

        2.6     COMMITTEE means any committee appointed by the Board to
administer the Plan, as specified in Section 5 hereof. Any such committee shall
be comprised entirely of Directors.

        2.7     COMMON STOCK means the common stock of the Company.

        2.8     COMPANY means Behringer Harvard Opportunity REIT I, Inc., a
Maryland corporation, and any successor to such organization.

        2.9     CONSTRUCTIVE DISCHARGE means a termination of employment with
the Company by an Employee due to any of the following events IF the termination
occurs within thirty (30) days of such event:

                (a)     FORCED RELOCATION OR TRANSFER. The Employee may continue
employment with the Company, a Parent or a Subsidiary (or a successor employer),
but such employment is contingent on the Employee's being transferred to a site
of employment which is located further than 50 miles from the Employee's current
site of employment. For this purpose, an Employee's site of employment shall be
the site of employment to which they are assigned as their home base, from which
their work is assigned, or to which they report, and shall be determined by the
Committee in its sole discretion on the basis of the facts and circumstances.

                (b)     DECREASE IN SALARY OR WAGES. The Employee may continue
employment with the Company, a Parent or a Subsidiary (or a successor employer),
but such employment is contingent upon the Employee's acceptance of a salary or
wage rate which is less than the Employee's prior salary or wage rate.

                (c)     SIGNIFICANT AND SUBSTANTIAL REDUCTION IN BENEFITS. The
Employee may continue employment with the Company, a Parent or a Subsidiary (or
a successor employer), but such employment is contingent upon the Employee's
acceptance of a reduction in the pension, welfare or fringe benefits provided
which is both significant and substantial when expressed as a dollar amount or
when expressed as a percentage of the Employee's cash compensation. The
determination of whether a reduction in pension, welfare or fringe benefits is
significant and substantial shall be made on the basis of all pertinent facts
and circumstances, including the entire benefit (pension, welfare and fringe)
package provided to the Employee, and any salary or wages paid to the Employee.
However, notwithstanding the preceding, any modification or elimination of
benefits which results solely from the provision of new benefits to an Employee
by a successor employer as a result of a change of the Employee's employment
from employment with the Company to employment with such successor shall not be
deemed a Significant and Substantial Reduction in Benefits where such new
benefits are identical to the benefits provided to similarly situated Employees
of the successor.

        2.10    DIRECTOR means a member of the Board.

        2.11    ELIGIBLE RECIPIENT means an Employee and/or a Key Person.

        2.12    EMPLOYEE means a common law employee of the Company, a
Subsidiary, a Parent or an Affiliate.

        2.13    EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.

        2.14    EXERCISE PRICE means the price that shall be paid to purchase
one (1) Share upon the exercise of an Option granted under this Plan.

        2.15    FAIR MARKET VALUE of each Share on any date means the price
determined below as of the close of business on such date (provided, however, if
for any reason, the Fair Market Value per share cannot be ascertained or is
unavailable for such date, the Fair Market Value per share shall be determined
as of the nearest preceding date on which such Fair Market Value can be
ascertained):


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 2

<PAGE>

                (a)     If the Share is listed or traded on any established
stock exchange or a national market system, including without limitation the
National Market of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, its Fair Market Value shall be the
closing sale price for the Share (or the mean of the closing bid and ask prices,
if no sales were reported), on such exchange or system on the date of such
determination, as reported in The Wall Street Journal or such other source as
the Board deems reliable; or

                (b)     If the Share is not listed or traded on any established
stock exchange or a national market system, its Fair Market Value shall be the
average of the closing dealer "bid" and "ask" prices of a Share as reflected on
the NASDAQ interdealer quotation system of the National Association of
Securities Dealers, Inc. on the date of such determination; or

                (c)     In the absence of an established public trading market
for the Share, the Fair Market Value of a Share shall be determined in good
faith by the Board.

        2.16    FLSA EXCLUSION means the provisions of Section 7(e) of the Fair
Labor Standards Act of 1938 (the "FLSA") that exempt certain stock-based
compensation from inclusion in overtime determinations under the FLSA.

        2.17    INCENTIVE AWARD means an ISO, a NQSO, a Restricted Stock Award,
a Restricted Stock Unit, a Restricted Unit Award, or a Stock Appreciation Right.

        2.18    INCENTIVE AWARD AGREEMENT means an agreement between the
Company, a Parent or a Subsidiary, and a Participant evidencing an award of an
Incentive Award.

        2.19    INITIAL LIMITED PARTNER shall mean HPT Management LP, a Texas
limited partnership.

        2.20    INSIDER means an individual who is, on the relevant date, an
officer, director or ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act.

        2.21    ISO means an option granted under this Plan to purchase Shares
that is intended by the Company to satisfy the requirements of Code ss.422 as an
incentive stock option.

        2.22    KEY PERSON means (1) a member of the Board who is not an
Employee, or (2) a consultant or advisor; provided, however, that such
consultant or advisor must be a natural person who is providing or will be
providing BONA FIDE services to the Company, a Subsidiary, a Parent or an
Affiliate, with such services (1) not being in connection with the offer or sale
of securities in a capital-raising transaction, and (2) not directly or
indirectly promoting or maintaining a market for securities of the Company, a
Subsidiary, a Parent or an Affiliate, within the meaning of the general
instructions to SEC Form S-8.

        2.23    NQSO means an option granted under this Plan to purchase Shares
that is not intended by the Company to satisfy the requirements of Code ss.422.

        2.24    OPTION means an ISO or a NQSO.

        2.25    OUTSIDE DIRECTOR means a Director who is not an Employee and who
qualifies as (1) a "non-employee director" under Rule 16b-3(b)(3) under the 1934
Act, as amended from time to time, and (2) an "outside director" under Code
ss.162(m) and the regulations promulgated thereunder.

        2.26    PARENT means any corporation (other than the corporation
employing a Participant) in an unbroken chain of corporations ending with the
corporation employing a Participant if, at the time of the granting of the
Incentive Award, each of the corporations other than the corporation employing
the Participant owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporation in
such chain. However, for purposes of interpreting any Incentive Award Agreement
issued under this Plan as of a date of determination, Parent shall mean any
corporation (other than the corporation employing a Participant) in an unbroken
chain of corporations ending with the corporation employing a Participant if, at
the time of the granting of the Incentive Award and thereafter through such date
of determination, each of the corporations other than the corporation employing


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 3

<PAGE>

the Participant owns stock possessing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporation in
such chain.

        2.27    PARTICIPANT means an individual who receives an Incentive Award
hereunder.

        2.28    PERFORMANCE-BASED EXCEPTION means the performance-based
exception from the tax deductibility limitations of Code ss.162(m).

        2.29    PLAN means the Behringer Harvard Opportunity REIT I, Inc. 2004
Incentive Award Plan, as may be amended from time to time.

        2.30    RESTRICTED STOCK AWARD means an award of Shares granted to a
Participant under this Plan whereby the Participant has immediate rights of
ownership in the Shares underlying the award, but such Shares are subject to
restrictions in accordance with the terms and provisions of this Plan and the
Incentive Award Agreement pertaining to the award and may be subject to
forfeiture by the individual until the earlier of (a) the time such restrictions
lapse or are satisfied, or (b) the time such shares are forfeited, pursuant to
the terms and provisions of the Incentive Award Agreement pertaining to the
award.

        2.31    RESTRICTED STOCK UNIT means a contractual right granted to a
Participant under this Plan to receive a Share that is subject to restrictions
of this Plan and the applicable Incentive Award Agreement.

        2.32    RESTRICTED UNIT AWARD means an award of Units granted to a
Participant under this Plan whereby the Participant has immediate rights of
ownership in the Units underlying the award, but such Units are subject to
restrictions in accordance with the terms and provisions of this Plan and the
Incentive Award Agreement pertaining to the award and may be subject to
forfeiture by the individual until the earlier of (a) the time such restrictions
lapse or are satisfied, or (b) the time such shares are forfeited, pursuant to
the terms and provisions of the Incentive Award Agreement pertaining to the
award.

        2.33    SAR EXERCISE PRICE means the amount per Share specified in an
Incentive Award Agreement with respect to a Stock Appreciation Right, the excess
of the Fair Market Value of a Share over and above such amount, the holder of
such Stock Appreciation Right may be able to receive upon the exercise or
payment of such Stock Appreciation Right.

        2.34    SHARE means a share of the Common Stock of the Company.

        2.35    STOCK APPRECIATION RIGHT means a right granted to a Participant
pursuant to the terms and provisions of this Plan whereby the individual,
without payment to the Company (except for any applicable withholding or other
taxes), receives cash, Shares, a combination thereof, or such other
consideration as the Board may determine, in an amount equal to the excess of
the Fair Market Value per Share on the date on which the Stock Appreciation
Right is exercised over the exercise price per Share noted in the Stock
Appreciation Right for each Share subject to the Stock Appreciation Right.

        2.36    SUBSIDIARY means any corporation (other than the corporation
employing such Participant) in an unbroken chain of corporations beginning with
the corporation employing such Participant if, at the time of the granting of
the Incentive Award, each of the corporations other than the last corporation in
the unbroken chain owns stock possessing fifty percent (50%) or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain. However, for purposes of interpreting any Incentive
Award Agreement issued under this Plan as of a date of determination, Subsidiary
shall mean any corporation (other than the corporation employing such
Participant) in an unbroken chain of corporations beginning with the corporation
employing such Participant if, at the time of the granting of the Incentive
Award and thereafter through such date of determination, each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 4

<PAGE>

        2.37    TEN PERCENT STOCKHOLDER means a person who owns (after taking
into account the attribution rules of Code ss.424(d)) more than ten percent
(10%) of the total combined voting power of all classes of shares of stock of
either the Company, a Subsidiary or a Parent.

        2.38    UNIT shall mean a "Profits Interest Unit" that represents the
right to receive profits and appreciation earned by, or which inure to, the
Initial Limited Partner after the date of issuance of such Unit.


                                   SECTION 3.
                   SHARES & UNITS SUBJECT TO INCENTIVE AWARDS

        SHARES SUBJECT TO INCENTIVE AWARDS. The total number of Shares that may
be issued pursuant to Incentive Awards under this Plan (and the total number of
Shares that may be issued pursuant to the exercise of ISOs under this Plan)
shall not exceed eleven million, as adjusted pursuant to Section 10. Such Shares
shall be reserved, to the extent that the Company deems appropriate, from
authorized but unissued Shares, and from Shares which have been reacquired by
the Company. Furthermore, any Shares subject to an Incentive Award that remain
after the cancellation, expiration or exchange of such Incentive Award
thereafter shall again become available for use under this Plan. Notwithstanding
anything herein to the contrary, no Participant may be granted Incentive Awards
covering an aggregate number of Shares in excess of five million in any calendar
year, and any Shares subject to an Incentive Award which again become available
for use under this Plan after the cancellation, expiration or exchange of such
Incentive Award thereafter shall continue to be counted in applying this
calendar year Participant limitation.


                                   SECTION 4.
                                 EFFECTIVE DATE

        The effective date of this Plan shall be the date it is adopted by the
Board, as noted in resolutions effectuating such adoption, provided the
stockholders of the Company approve this Plan within twelve (12) months after
such effective date. If such effective date comes before such stockholder
approval, any Incentive Awards granted under this Plan before the date of such
approval automatically shall be granted subject to such approval.


                                   SECTION 5.
                                 ADMINISTRATION

        5.1     GENERAL ADMINISTRATION. This Plan shall be administered by the
Board. The Board, acting in its absolute discretion, shall exercise such powers
and take such action as expressly called for under this Plan. The Board shall
have the power to interpret this Plan and, subject to the terms and provisions
of this Plan, to take such other action in the administration and operation of
the Plan as it deems equitable under the circumstances. The Board's actions
shall be binding on the Company, on each affected Eligible Recipient, and on
each other person directly or indirectly affected by such actions.

        5.2     AUTHORITY OF THE BOARD. Except as limited by law or by the
Articles of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Board shall have full power to select Eligible Recipients
who shall participate in the Plan, to determine the sizes and types of Incentive
Awards in a manner consistent with the Plan, to determine the terms and
conditions of Incentive Awards in a manner consistent with the Plan, to construe
and interpret the Plan and any agreement or instrument entered into under the
Plan, to establish, amend or waive rules and regulations for the Plan's
administration, and to amend the terms and conditions of any outstanding
Incentive Awards as allowed under the Plan and such Incentive Awards. Further,
the Board may make all other determinations that may be necessary or advisable
for the administration of the Plan.

        5.3     DELEGATION OF AUTHORITY. The Board may delegate its authority
under the Plan, in whole or in part, to a Committee appointed by the Board
consisting of not less than one (1) Director or to one or


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 5

<PAGE>

more other persons to whom the powers of the Board hereunder may be delegated in
accordance with applicable law. The members of the Committee and any other
persons to whom authority has been delegated shall be appointed from time to
time by, and shall serve at the discretion of, the Board. The Committee or other
delegate (if appointed) shall act according to the policies and procedures set
forth in the Plan and to those policies and procedures established by the Board,
and the Committee or other delegate shall have such powers and responsibilities
as are set forth by the Board. Reference to the Board in this Plan shall
specifically include reference to the Committee or other delegate where the
Board has delegated its authority to the Committee or other delegate, and any
action by the Committee or other delegate pursuant to a delegation of authority
by the Board shall be deemed an action by the Board under the Plan.
Notwithstanding the above, the Board may assume the powers and responsibilities
granted to the Committee or other delegate at any time, in whole or in part.
With respect to Committee appointments and composition, only a Committee (or a
sub-committee thereof) comprised solely of two (2) or more Outside Directors may
grant Incentive Awards that will meet the Performance-Based Exception, and only
a Committee comprised solely of Outside Directors may grant Incentive Awards to
Insiders that will be exempt from Section 16(b) of the Exchange Act.

        5.4     DECISIONS BINDING. All determinations and decisions made by the
Board (or its delegate) pursuant to the provisions of this Plan and all related
orders and resolutions of the Board shall be final, conclusive and binding on
all persons, including the Company, its stockholders, Directors, Eligible
Recipients, Participants, and their estates and beneficiaries, and the Initial
Limited Partner, its partners, and their estates and beneficiaries.

        5.5     INDEMNIFICATION FOR DECISIONS. No member of the Board or the
Committee (or a sub-committee thereof) shall be liable for any action taken or
determination made hereunder in good faith. Service on the Committee (or a
sub-committee thereof) shall constitute service as a director of the Company so
that the members of the Committee (or a sub-committee thereof) shall be entitled
to indemnification and reimbursement as directors of the Company pursuant to its
bylaws and applicable law. In addition, the members of the Board, Committee (or
a sub-committee thereof) shall be indemnified by the Company against (a) the
reasonable expenses, including attorneys' fees actually and necessarily incurred
in connection with the defense of any action, suit or proceeding, to which they
or any of them may be a party by reason of any action taken or failure to act
under or in connection with the Plan, any Incentive Award granted hereunder, and
(b) against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except in relation to matters as to which it shall be adjudged in
such action, suit or proceeding that such individual is liable for gross
negligence or misconduct in the performance of his duties, provided that within
60 days after institution of any such action, suit or proceeding a Committee
member or delegatee shall in writing offer the Company the opportunity, at its
own expense, to handle and defend the same.

        5.6     UNITS AS INCENTIVE AWARDS. To the extent that any Incentive
Awards involve Units, the Board, acting for the Company as manager of the
Initial Limited Partner, shall cause the Initial Limited Partner to issue Units
pursuant to the terms and provisions of the Plan.


                                   SECTION 6.
                                   ELIGIBILITY

        Eligible Recipients selected by the Board shall be eligible for the
grant of Incentive Awards under this Plan, but no Eligible Recipient shall have
the right to be granted an Incentive Award under this Plan merely as a result of
his or her status as an Eligible Recipient. Only Employees of the Company, a
Parent or a Subsidiary, shall be eligible to receive a grant of ISO's.




      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 6

<PAGE>

                                    SECTION 7
                            TERMS OF INCENTIVE AWARDS

        7.1     TERMS AND CONDITIONS OF ALL INCENTIVE AWARDS.

                (a)     GRANTS OF INCENTIVE AWARDS. The Board, in its absolute
discretion, shall grant Incentive Awards under this Plan from time to time and
shall have the right to grant new Incentive Awards in exchange for outstanding
Incentive Awards, including, but not limited to, exchanges of Stock Options for
the purpose of achieving a lower Exercise Price. Incentive Awards shall be
granted to Eligible Recipients selected by the Board, and the Board shall be
under no obligation whatsoever to grant any Incentive Awards, or to grant
Incentive Awards to all Eligible Recipients, or to grant all Incentive Awards
subject to the same terms and conditions.

                (b)     SHARES & UNITS SUBJECT TO INCENTIVE AWARDS. The number
of Shares or Units as to which an Incentive Award shall be granted shall be
determined by the Board in its sole discretion, subject to the provisions of
Section 3 as to the total number of Shares available for grants under the Plan.

                (c)     INCENTIVE AWARD AGREEMENTS. Each Incentive Award shall
be evidenced by an Incentive Award Agreement executed by the Company, a Parent
or a Subsidiary, and the Participant, which shall be in such form and contain
such terms and conditions as the Board in its discretion may, subject to the
provisions of the Plan, from time to time determine.

                (d)     DATE OF GRANT. The date an Incentive Award is granted
shall be the date on which the Board (1) has approved the terms and conditions
of the Incentive Award Agreement, (2) has determined the recipient of the
Incentive Award and the number of Shares or Units covered by the Incentive Award
and (3) has taken all such other action necessary to direct the grant of the
Incentive Award.

        7.2     TERMS AND CONDITIONS OF OPTIONS.

                (a)     NECESSITY OF INCENTIVE AWARD AGREEMENTS. Each grant of
an Option shall be evidenced by an Incentive Award Agreement that shall specify
whether the Option is an ISO or NQSO, and incorporate such other terms and
conditions as the Board, acting in its absolute discretion, deems consistent
with the terms of this Plan, including (without limitation) a restriction on the
number of Shares subject to the Option that first become exercisable during any
calendar year. The Board and/or the Company shall have complete discretion to
modify the terms and provisions of an Option in accordance with Section 12 of
this Plan even though such modification may change the Option from an ISO to a
NQSO.

                (b)     DETERMINING OPTIONEES. In determining Eligible
Recipient(s) to whom an Option shall be granted and the number of Shares to be
covered by such Option, the Board may take into account the recommendations of
the Chief Executive Officer of the Company and its other officers, the duties of
the Eligible Recipient, the present and potential contributions of the Eligible
Recipient to the success of the Company, and other factors deemed relevant by
the Board, in its sole discretion, in connection with accomplishing the purpose
of this Plan. An Eligible Recipient who has been granted an Option to purchase
Shares, whether under this Plan or otherwise, may be granted one or more
additional Options. If the Board grants an ISO and a NQSO to an Eligible
Recipient on the same date, the right of the Eligible Recipient to exercise one
such Option shall not be conditioned on his or her failure to exercise the other
such Option.

                (c)     EXERCISE PRICE. Subject to adjustment in accordance with
Section 10 and the other provisions of this Section, the Exercise Price shall be
as set forth in the applicable Incentive Award Agreement. With respect to each
grant of an ISO to a Participant who is not a Ten Percent Stockholder, the
Exercise Price shall not be less than the Fair Market Value on the date the ISO
is granted. With respect to each grant of an ISO to a Participant who is a Ten
Percent Stockholder, the Exercise Price shall not be less than one hundred ten
percent (110%) of the Fair Market Value on the date the ISO is granted. If an
Option is a NQSO, the Exercise Price for each Share shall be no less than (1)
the minimum price


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 7

<PAGE>

required by applicable state law, or (2) the minimum price required by the
Company's governing instrument, or (3) $0.01, whichever price is greater. Any
Option intended to meet the Performance-Based Exception must be granted with an
Exercise Price equivalent to or greater than the Fair Market Value of the Shares
subject thereto determined as of the date of such grant. Any Option intended to
meet the FLSA Exclusion must be granted with an Exercise Price equivalent to or
greater than eighty-five percent (85%) of the Fair Market Value of the Shares
subject thereto on the date granted determined as of the date of such grant. Any
Option that is intended to avoid taxation under Code ss.409A as a "nonqualified
deferred compensation plan" must be granted with an Exercise Price equivalent to
or greater than the Fair Market Value of the Shares subject thereto determined
as of the date of such grant.

                (d)     OPTION TERM. Each Option granted under this Plan shall
be exercisable in whole or in part at such time or times as set forth in the
related Incentive Award Agreement, but no Incentive Award Agreement shall:

                        (i)     make an Option exercisable before the date such
        Option is granted; or

                        (ii)    make an Option exercisable after the earlier of:

                                (A)     the date such Option is exercised in
        full, or

                                (B)     the date that is the tenth (10th)
anniversary of the date such Option is granted, if such Option is a NQSO or an
ISO granted to a non-Ten Percent Stockholder, or the date that is the fifth
(5th) anniversary of the date such Option is granted, if such Option is an ISO
granted to a Ten Percent Stockholder. An Incentive Award Agreement may provide
for the exercise of an Option after the employment of an Employee has terminated
for any reason whatsoever, including death or disability. The Employee's rights,
if any, upon termination of employment will be set forth in the applicable
Incentive Award Agreement.

                (e)     PAYMENT. Options shall be exercised by the delivery of a
written notice of exercise to the Company, setting forth the number of Shares
with respect to which the Option is to be exercised accompanied by full payment
for the Shares. Payment for shares of Stock purchased pursuant to exercise of an
Option shall be made in cash or, unless the Incentive Award Agreement provides
otherwise, by delivery to the Company of a number of Shares that have been owned
and completely paid for by the holder for at least six (6) months prior to the
date of exercise (I.E., "mature shares" for accounting purposes) having an
aggregate Fair Market Value equal to the amount to be tendered, or a combination
thereof. In addition, unless the Incentive Award Agreement provides otherwise,
the Option may be exercised through a brokerage transaction following
registration of the Company's equity securities under Section 12 of the Exchange
Act as permitted under the provisions of Regulation T applicable to cashless
exercises promulgated by the Federal Reserve Board, unless prohibited by Section
402 of the Sarbanes-Oxley Act of 2002. However, notwithstanding the foregoing,
with respect to any Option recipient who is an Insider, a tender of shares or a
cashless exercise must (1) have met the requirements of an exemption under Rule
16b-3 promulgated under the Exchange Act, or (2) be a subsequent transaction the
terms of which were provided for in a transaction initially meeting the
requirements of an exemption under Rule 16b-3 promulgated under the Exchange
Act. Unless the Incentive Award Agreement provides otherwise, the foregoing
exercise payment methods shall be subsequent transactions approved by the
original grant of an Option. Except as provided in subparagraph (f) below,
payment shall be made at the time that the Option or any part thereof is
exercised, and no Shares shall be issued or delivered upon exercise of an Option
until full payment has been made by the Participant. The holder of an Option, as
such, shall have none of the rights of a stockholder.

                (f)     CONDITIONS TO EXERCISE OF AN OPTION. Each Option granted
under the Plan shall vest and shall be exercisable at such time or times, or
upon the occurrence of such event or events, and in such amounts, as the Board
shall specify in the Incentive Award Agreement; provided, however, that
subsequent to the grant of an Option, the Board, at any time before complete
termination of such Option, may accelerate the time or times at which such
Option may vest or be exercised in whole or in part. Notwithstanding the
foregoing, an Option intended to meet the FLSA Exclusion shall not be
exercisable for at least six (6) months following the date it is granted, except
by reason of death, disability, retirement, a


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 8

<PAGE>

change in corporate ownership or other circumstances permitted under regulations
promulgated under the FLSA Exclusion. Furthermore, if the recipient of an Option
receives a hardship distribution from a Code ss.401(k) plan of the Company, or
any Parent or Subsidiary, the Option may not be exercised during the six (6)
month period following the hardship distribution, unless the Company determines
that such exercise would not jeopardize the tax-qualification of the Code
ss.401(k) plan. The Board may impose such restrictions on any Shares acquired
pursuant to the exercise of an Option as it may deem advisable, including,
without limitation, vesting or performance-based restrictions, rights of the
Company to re-purchase Shares acquired pursuant to the exercise of an Option,
voting restrictions, investment intent restrictions, restrictions on transfer,
"first refusal" rights of the Company to purchase Shares acquired pursuant to
the exercise of an Option prior to their sale to any other person, "drag along"
rights requiring the sale of shares to a third party purchaser in certain
circumstances, "lock up" type restrictions in the case of an initial public
offering of the Company's stock, restrictions or limitations or other provisions
that would be applied to stockholders under any applicable agreement among the
stockholders, and restrictions under applicable federal securities laws, under
the requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and/or under any blue sky or state securities laws
applicable to such Shares.

                (g)     TRANSFERABILITY OF OPTIONS. An Option shall not be
transferable or assignable except by will or by the laws of descent and
distribution and shall be exercisable, during the Participant's lifetime, only
by the Participant; provided, however, that in the event the Participant is
incapacitated and unable to exercise his or her Option, if such Option is a
NQSO, such Option may be exercised by such Participant's legal guardian, legal
representative, or other representative whom the Board deems appropriate based
on applicable facts and circumstances. The determination of incapacity of a
Participant and the determination of the appropriate representative of the
Participant who shall be able to exercise the Option if the Participant is
incapacitated shall be determined by the Board in its sole and absolute
discretion. Notwithstanding the foregoing, except as otherwise provided in the
Incentive Award Agreement, a NQSO may also be transferred by a Participant as a
bona fide gift (i) to his spouse, lineal descendant or lineal ascendant,
siblings and children by adoption, (ii) to a trust for the benefit of one or
more individuals described in clause (i) and no other persons, or (iii) to a
partnership of which the only partners are one or more individuals described in
clause (i), in which case the transferee shall be subject to all provisions of
the Plan, the Incentive Award Agreement and other agreements with the
Participant in connection with the exercise of the Option and purchase of
Shares. In the event of such a gift, the Participant shall promptly notify the
Board of such transfer and deliver to the Board such written documentation as
the Board may in its discretion request, including, without limitation, the
written acknowledgment of the donee that the donee is subject to the provisions
of the Plan, the Incentive Award Agreement and other agreements with the
Participant.

                (h)     SPECIAL PROVISIONS FOR CERTAIN SUBSTITUTE OPTIONS.
Notwithstanding anything to the contrary in this Section, any Option in
substitution for a stock option previously issued by another entity, which
substitution occurs in connection with a transaction to which Code ss.424(a) is
applicable, may provide for an exercise price computed in accordance with Code
ss.424(a) and the regulations thereunder and may contain such other terms and
conditions as the Board may prescribe to cause such substitute Option to contain
as nearly as possible the same terms and conditions (including the applicable
vesting and termination provisions) as those contained in the previously issued
stock option being replaced thereby.

                (i)     ISO TAX TREATMENT REQUIREMENTS. With respect to any
Option that purports to be an ISO, to the extent that the aggregate Fair Market
Value (determined as of the date of grant of such Option) of stock with respect
to which such Option is exercisable for the first time by any individual during
any calendar year exceeds one hundred thousand dollars ($100,000.00), such
Option shall not be treated as an ISO in accordance with Code ss.422(d). The
rule of the preceding sentence is applied in the order in which Options are
granted. Also, with respect to any Option that purports to be an ISO, such
Option shall not be treated as an ISO if the Participant disposes of shares
acquired thereunder within two (2) years from the date of the granting of the
Option or within one (1) year of the exercise of the Option, or if the
Participant has not met the requirements of Code ss.422(a)(2).

                (j)     POTENTIAL REPRICING OF STOCK OPTIONS. With respect to
any Option granted pursuant to, and under, this Plan, the Board (or a committee
thereof) may determine that the repricing of all or any


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 9

<PAGE>

portion of existing outstanding Options is appropriate without the need for any
additional approval of the Stockholders of the Company. For this purpose,
"repricing" of Options shall include, but not be limited to, any of the
following actions (or any similar action): (1) lowering the Exercise Price of an
existing Option; (2) any action which would be treated as a "repricing" under
generally accepted accounting principles; or (3) canceling of an existing Option
at a time when its Exercise Price exceeds the Fair Market Value of the
underlying stock subject to such Option, in exchange for another Option, a
Restricted Stock Award, or other equity in the Company.

        7.3     TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS. A Stock
Appreciation Right may be granted in connection with all or any portion of a
previously or contemporaneously granted Option or not in connection with an
Option. A Stock Appreciation Right shall entitle the Participant to receive upon
exercise or payment the excess of the Fair Market Value of a specified number of
Shares at the time of exercise, over a SAR Exercise Price that shall be not less
than the Exercise Price for that number of Shares in the case of a Stock
Appreciation Right granted in connection with a previously or contemporaneously
granted Option, or in the case of any other Stock Appreciation Right, not less
than one hundred percent (100%) of the Fair Market Value of that number of
Shares at the time the Stock Appreciation Right was granted. The exercise of a
Stock Appreciation Right shall result in a pro rata surrender of the related
Option to the extent the Stock Appreciation Right has been exercised.

                (a)     PAYMENT. Upon exercise or payment of a Stock
Appreciation Right, the Company shall pay to the Participant the appreciation in
cash or Shares (at the aggregate Fair Market Value on the date of payment or
exercise) as provided in the Incentive Award Agreement or, in the absence of
such provision, as the Board may determine. To the extent that a Stock
Appreciation Right is paid in cash, it shall nonetheless be deemed paid in
Shares for purposes of Section 3 hereof.

                (b)     CONDITIONS TO EXERCISE. Each Stock Appreciation Right
granted under the Plan shall be exercisable at such time or times, or upon the
occurrence of such event or events, and in such amounts, as the Board shall
specify in the Incentive Award Agreement; provided, however, that subsequent to
the grant of a Stock Appreciation Right, the Board, at any time before complete
termination of such Stock Appreciation Right, may accelerate the time or times
at which such Stock Appreciation Right may be exercised in whole or in part. The
exercisability of a Stock Appreciation Right that is intended to avoid taxation
under Code ss.409A as a "nonqualified deferred compensation plan" must be
carefully restricted in accordance with Code ss.409A requirements. Furthermore,
if the recipient of a Stock Appreciation Right receives a hardship distribution
from a Code ss.401(k) plan of the Company, or any Parent or Subsidiary, the
Stock Appreciation Right may not be exercised during the six (6) month period
following the hardship distribution, unless the Company determines that such
exercise would not jeopardize the tax-qualification of the Code ss.401(k) plan.

                (c)     TRANSFERABILITY OF STOCK APPRECIATION RIGHTS. Except as
otherwise provided in a Participant's Incentive Award Agreement, no Stock
Appreciation Right granted under the Plan may be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Incentive Award Agreement, all Stock Appreciation Rights granted
to a Participant under the Plan shall be exercisable, during the Participant's
lifetime, only by the Participant; PROVIDED, HOWEVER, that in the event the
Participant is incapacitated and unable to exercise his or her Stock
Appreciation Right, such Stock Appreciation Right may be exercised by such
Participant's legal guardian, legal representative, or other representative whom
the Board deems appropriate based on applicable facts and circumstances in
accordance with the terms and provisions of the Incentive Award Agreement
governing such Stock Appreciation Right.. The determination of incapacity of a
Participant and the determination of the appropriate representative of the
Participant shall be determined by the Board in its sole and absolute
discretion. Notwithstanding the foregoing, except as otherwise provided in the
Incentive Award Agreement, (A) a Stock Appreciation Right which is granted in
connection with the grant of a NQSO may be transferred, but only with the NQSO,
and (B) a Stock Appreciation Right which is not granted in connection with the
grant of a NQSO, may be transferred by the Participant as a bona fide gift (i)
to his spouse, lineal descendant or lineal ascendant, siblings and children by
adoption, (ii) to a trust for the benefit of one or more individuals described
in clause (i), or (iii) to a partnership of which the only partners are one or
more individuals described in clause (i), in which case the transferee shall be
subject to all


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 10

<PAGE>

provisions of the Plan, the Incentive Award Agreement and other agreements with
the Participant in connection with the exercise of the Stock Appreciation Right.
In the event of such a gift, the Participant shall promptly notify the Board of
such transfer and deliver to the Board such written documentation as the Board
may in its discretion request, including, without limitation, the written
acknowledgment of the donee that the donee is subject to the provisions of the
Plan, the Incentive Award Agreement and other agreements with the Participant in
connection with the exercise of the Stock Appreciation Right.

                (d)     SPECIAL PROVISIONS FOR TANDEM SAR'S. A Stock
Appreciation Right granted in connection with an Option may only be exercised to
the extent that the related Option has not been exercised. A Stock Appreciation
Right granted in connection with an ISO (1) will expire no later than the
expiration of the underlying ISO, (2) may be for no more than the difference
between the exercise price of the underlying ISO and the Fair Market Value of
the Shares subject to the underlying ISO at the time the Stock Appreciation
Right is exercised, (3) may be transferable only when, and under the same
conditions as, the underlying ISO is transferable, and (4) may be exercised only
(i) when the underlying ISO could be exercised and (ii) when the Fair Market
Value of the Shares subject to the ISO exceeds the exercise price of the ISO.

                (e)     CODE SS.409A REQUIREMENTS. A Stock Appreciation Right
must meet certain restrictions contained in Code ss.409A if it is to avoid
taxation under Code ss.409A as a "nonqualified deferred compensation plan." No
Stock Appreciation Right should be granted under this Plan without careful
consideration of the impact of Code ss.409A with respect to such grant upon both
the Company and the recipient of the Stock Appreciation Right.

        7.4     TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.

                (a)     GRANTS OF RESTRICTED STOCK AWARDS. Shares awarded
pursuant to Restricted Stock Awards shall be subject to such restrictions as
determined by the Board for periods determined by the Board. Restricted Stock
Awards issued under the Plan may have restrictions which lapse based upon the
service of a Participant, or based upon the attainment (as determined by the
Board) of performance goals established pursuant to the business criteria listed
in Section 14, or based upon any other criteria that the Board may determine
appropriate. Any Restricted Stock Award which becomes exercisable based on the
attainment of performance goals must be granted by a Committee, must have its
performance goals determined by such a Committee based upon one or more of the
business criteria listed in Section 14, and must have the attainment of such
performance goals certified in writing by such a Committee in order to meet the
Performance-Based Exception. The Board may require a cash payment from the
Participant in exchange for the grant of a Restricted Stock Award or may grant a
Restricted Stock Award without the requirement of a cash payment; provided,
however, if the recipient of a Restricted Stock Award receives a hardship
distribution from a Code ss.401(k) plan of the Company, or any Parent or
Subsidiary, the recipient may not pay any amount for such Restricted Stock Award
during the six (6) month period following the hardship distribution, unless the
Company determines that such payment would not jeopardize the tax-qualification
of the Code ss.401(k) plan.

                (b)     ACCELERATION OF AWARD. The Board shall have the power to
permit, in its discretion, an acceleration of the expiration of the applicable
restrictions or the applicable period of such restrictions with respect to any
part or all of the Shares awarded to a Participant.

                (c)     NECESSITY OF INCENTIVE AWARD AGREEMENT. Each grant of a
Restricted Stock Award shall be evidenced by an Incentive Award Agreement that
shall specify the terms, conditions and restrictions regarding the Shares
awarded to a Participant, and shall incorporate such other terms and conditions
as the Board, acting in its absolute discretion, deems consistent with the terms
of this Plan. The Board shall have complete discretion to modify the terms and
provisions of Restricted Stock Awards in accordance with Section 12 of this
Plan.

                (d)     RESTRICTIONS ON SHARES AWARDED. Shares awarded pursuant
to Restricted Stock Awards shall be subject to such restrictions as determined
by the Board for periods determined by the Board. The Board may impose such
restrictions on any Shares acquired pursuant to a Restricted Stock Award as it
may deem advisable, including, without limitation, vesting or performance-based
restrictions, rights of the Company


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 11

<PAGE>

to re-purchase Shares acquired pursuant to the Restricted Stock Award, voting
restrictions, investment intent restrictions, restrictions on transfer, "first
refusal" rights of the Company to purchase Shares acquired pursuant to the
Restricted Stock Award prior to their sale to any other person, "drag along"
rights requiring the sale of shares to a third party purchaser in certain
circumstances, "lock up" type restrictions in connection with public offerings
of the Company's stock, restrictions or limitations or other provisions that
would be applied to stockholders under any applicable agreement among the
stockholders, and restrictions under applicable federal securities laws, under
the requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and/or under any blue sky or state securities laws
applicable to such Shares.

                (e)     TRANSFERABILITY OF RESTRICTED STOCK AWARDS. A Restricted
Stock Award may not be transferred by the holder Participant, except upon the
death of the holder Participant by will or by the laws of descent and
distribution.

                (f)     VOTING, DIVIDEND & OTHER RIGHTS. Unless the applicable
Incentive Award Agreement provides otherwise, holders of Restricted Stock Awards
shall be entitled to vote and shall receive dividends during the periods of
restriction.

        7.5     TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS.

                (a)     GRANTS OF RESTRICTED STOCK UNITS. A Restricted Stock
Unit shall entitle the Participant to receive one Share at such future time and
upon such terms as specified by the Board in the Incentive Award Agreement
evidencing such award. Restricted Stock Units issued under the Plan may have
restrictions which lapse based upon the service of a Participant, or based upon
other criteria that the Board may determine appropriate. The Board may require a
cash payment from the Participant in exchange for the grant of Restricted Stock
Units or may grant Restricted Stock Units without the requirement of a cash
payment; provided, however, if the recipient of a Restricted Stock Unit receives
a hardship distribution from a Code ss.401(k) plan of the Company, or any Parent
or Subsidiary, no payment for the Restricted Stock Unit may be made by the
recipient during the six (6) month period following the hardship distribution,
unless the Company determines that such payment would not jeopardize the
tax-qualification of the Code ss.401(k) plan.

                (b)     VESTING OF RESTRICTED STOCK UNITS. The Board shall
establish the vesting schedule applicable to Restricted Stock Units and shall
specify the times, vesting and performance goal requirements. Until the end of
the period(s) of time specified in the vesting schedule and/or the satisfaction
of any performance criteria, the Restricted Stock Units subject to such
Incentive Award Agreement shall remain subject to forfeiture.

                (c)     ACCELERATION OF AWARD. The Board shall have the power to
permit, in its sole discretion, an acceleration of the applicable restrictions
or the applicable period of such restrictions with respect to any part or all of
the Restricted Stock Units awarded to a Participant.

                (d)     NECESSITY OF INCENTIVE AWARD AGREEMENT. Each grant of
Restricted Stock Unit(s) shall be evidenced by an Incentive Award Agreement that
shall specify the terms, conditions and restrictions regarding the Participant's
right to receive Share(s) in the future, and shall incorporate such other terms
and conditions as the Board, acting in its sole discretion, deems consistent
with the terms of this Plan. The Board shall have sole discretion to modify the
terms and provisions of Restricted Stock Unit(s) in accordance with Section 12
of this Plan.

                (e)     TRANSFERABILITY OF RESTRICTED STOCK UNITS. Except as
otherwise provided in a Participant's Restricted Stock Unit Award, no Restricted
Stock Unit granted under the Plan may be sold, transferred, pledged, assigned or
otherwise alienated or hypothecated by the holder Participant, except upon the
death of the holder Participant by will or by the laws of descent and
distribution.

                (f)     VOTING, DIVIDEND & OTHER RIGHTS. Unless the applicable
Incentive Award Agreement provides otherwise, holders of Restricted Stock Units
shall not be entitled to vote or to receive dividends until they become owners
of the Shares pursuant to their Restricted Stock Units.


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 12

<PAGE>

                (g)     CODE SS.409A REQUIREMENTS. A Restricted Stock Unit must
meet certain restrictions contained in Code ss.409A if it is to avoid taxation
under Code ss.409A as a "nonqualified deferred compensation plan." No Restricted
Stock Unit should be granted under this Plan without careful consideration of
the impact of Code ss.409A with respect to such grant upon both the Company and
the recipient of the Restricted Stock Unit.

        7.6     TERMS AND CONDITIONS OF RESTRICTED UNIT AWARDS.

                (a)     GRANTS OF RESTRICTED STOCK UNITS. Units awarded pursuant
to Restricted Unit Awards shall be subject to such restrictions as determined by
the Board for periods determined by the Board. Restricted Unit Awards issued
under the Plan may have restrictions that lapse based upon the service of a
Participant, or based upon the attainment (as determined by the Board) or
performance goals established pursuant to the business criteria listed in
Section 14, or based upon any other criteria that the Board may determine
appropriate. Any Restricted Stock Unit which becomes exercisable based on the
attainment of performance goals must be granted by a Committee, must have its
performance goals determined by such a Committee based upon one or more of the
business criteria listed in Section 14, and must have the attainment of such
performance goals certified in writing by such a Committee in order to meet the
Performance-Based Exception.

                (b)     ACCELERATION OF AWARD. The Board shall have the power to
permit, in its discretion, an acceleration of the expiration of he applicable
restrictions or the applicable period of such restrictions with respect to any
part or all of the Units awarded to a Participant.

                (c)     NECESSITY OF INCENTIVE AWARD AGREEMENT. Each grant of a
Restricted Unit Award shall be evidenced by an Incentive Award Agreement that
shall specify the terms, conditions and restrictions regarding the Units awarded
to a Participant, and shall incorporate such other terms and conditions as the
Board, acting in its absolute discretion, deems consistent with the terms of
this Plan. The Board shall have complete discretion to modify the terms and
provisions of Restricted Unit Awards in accordance with Section 12 of this Plan.

                (d)     RESTRICTIONS ON UNITS AWARDED. Units awarded pursuant to
Restricted Unit Awards shall be subject to such restrictions as determined by
the Board for periods determined by the Board. The Board may impose such
restrictions on any Units acquired pursuant to a Restricted Stock Award as it
may deem advisable, including, without limitation, vesting or performance-based
restrictions, rights of the Company to re-purchase Units acquired pursuant to
the Restricted Units Award, voting restrictions, investment intent restrictions,
restrictions on transfer, "first refusal" rights of the Company to purchase
Units acquired pursuant to the Restricted Unit Award prior to their sale to any
other person, "drag along" rights requiring the sale of Units to a third party
purchaser in certain circumstances, restrictions or limitations or other
provisions that would be applied to other holders of Units under any applicable
agreement among the holders of Units or under the limited liability company
agreement of the Initial Limited Partner, and restrictions under applicable
federal securities laws, and/or under any blue sky or state securities laws
applicable to such Units.

                (e)     TRANSFERABILITY OF RESTRICTED UNIT AWARDS. A Restricted
Unit Award may not be transferred by the holder Participant, except upon the
death of the holder Participant by will or by the laws of descent and
distribution.

                (f)     OTHER RIGHTS. The holders of Restricted Unit Awards
shall be entitled to only such rights as are afforded such holders under the
limited liability company agreement of the Initial Limited Partner.

                (g)     CODE SS.409A REQUIREMENTS. A Restricted Unit Award must
meet certain restrictions contained in Code ss.409A if it is to avoid taxation
under Code ss.409A as a "nonqualified deferred compensation plan." No Restricted
Unit Award should be granted under this Plan without careful consideration of
the impact of Code ss.409A with respect to such grant upon both the Company and
the recipient of the Restricted Unit Award.


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 13

<PAGE>

                                   SECTION 8.
                              SECURITIES REGULATION

        Each Incentive Award Agreement may provide that, upon the receipt of
Shares or Units as a result of the exercise of an Incentive Award or otherwise,
the Participant shall, if so requested by the Company, hold such Shares or Units
for investment and not with a view of resale or distribution to the public and,
if so requested by the Company, shall deliver to the Company and/or the Initial
Limited Partner a written statement satisfactory to the Company to that effect.
Each Incentive Award Agreement may also provide that, if so requested by the
Company, the Participant shall make a written representation to the Company
and/or the Initial Limited Partner that he or she will not sell or offer to sell
any of such Shares or Units unless a registration statement shall be in effect
with respect to such Shares or Units under the Securities Act of 1933, as
amended ("1933 Act"), and any applicable state securities law or, unless he or
she shall have furnished to the Company an opinion, in form and substance
satisfactory to the Company, of legal counsel acceptable to the Company, that
such registration is not required. Certificates representing the Shares or Units
transferred upon the exercise of an Incentive Award granted under this Plan may
at the discretion of the Company bear a legend to the effect that such Shares or
Units have not been registered under the 1933 Act or any applicable state
securities law and that such Shares or Units may not be sold or offered for sale
in the absence of an effective registration statement as to such Shares or Units
under the 1933 Act and any applicable state securities law or an opinion, in
form and substance satisfactory to the Company, of legal counsel acceptable to
the Company, that such registration is not required.


                                   SECTION 9.
                                  LIFE OF PLAN

        No Incentive Award shall be granted under this Plan on or after the
earlier of:

                (a)     the tenth (10th) anniversary of the effective date of
this Plan (as determined under Section 4 of this Plan), in which event this Plan
otherwise thereafter shall continue in effect until all outstanding Incentive
Awards have been exercised in full or no longer are exercisable, or

                (b)     the date on which all of the Shares reserved under
Section 3 of this Plan have (as a result of the exercise of Incentive Awards
granted under this Plan or lapse of all restrictions under a Restricted Stock
Award or Restricted Unit Award or Restricted Stock Unit) been issued or no
longer are available for use under this Plan, in which event this Plan also
shall terminate on such date.

This Plan shall continue in effect until all outstanding Incentive Awards have
been exercised in full or are no longer exercisable and all Restricted Stock
Awards or Restricted Stock Units or Restricted Unit Awards have vested or been
forfeited.


                                   SECTION 10.
                                   ADJUSTMENT

        Notwithstanding anything in Section 12 to the contrary, the number of
Shares reserved under Section 3 of this Plan, the limit on the number of Shares
that may be granted during a calendar year to any individual under Section 3 of
this Plan, the number of Shares or Units subject to Incentive Awards granted
under this Plan, and the Exercise Price of any Options and the SAR Exercise
Price of any Stock Appreciation Rights, shall be adjusted by the Board in an
equitable manner to reflect any change in the capitalization of the Company or
the Initial Limited Partner, including, but not limited to, such changes as
stock dividends or stock splits. Furthermore, the Board shall have the right to
adjust (in a manner that satisfies the requirements of Code ss.424(a)) the
number of Shares reserved under Section 3, and the number of Shares or Units
subject to Incentive Awards granted under this Plan, and the Exercise Price of
any Options and the SAR Exercise Price of any Stock Appreciation Rights in the
event of any corporate transaction described in Code ss.424(a) that provides for
the substitution or assumption of such Incentive Awards. If any adjustment under
this Section creates a fractional Share or a right to acquire a fractional Share
or Unit, such fractional Share or Unit shall be disregarded, and the number of
Shares or Units


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 14

<PAGE>

reserved under this Plan and the number subject to any Incentive Awards granted
under this Plan shall be the next lower number of Shares or Units, rounding all
fractions downward. An adjustment made under this Section by the Board shall be
conclusive and binding on all affected persons and, further, shall not
constitute an increase in the number of Shares reserved under Section 3.


                                   SECTION 11.
                        CHANGE OF CONTROL OF THE COMPANY

        11.1    GENERAL RULE FOR OPTIONS. Except as otherwise provided in an
Incentive Award Agreement, if a Change of Control occurs, and if the agreements
effectuating the Change of Control do not provide for the assumption or
substitution of all Options granted under this Plan, with respect to any Option
granted under this Plan that is not so assumed or substituted (a "Non-Assumed
Option"), the Committee, in its sole and absolute discretion, may, with respect
to any or all of such Non-Assumed Options, take any or all of the following
actions to be effective as of the date of the Change of Control (or as of any
other date fixed by the Committee occurring within the thirty (30) day period
ending on the date of the Change of Control, but only if such action remains
contingent upon the effectuation of the Change of Control) (such date referred
to as the "Action Effective Date"):

                (a)     Accelerate the vesting and/or exercisability of such
Non-Assumed Option; and/or

                (b)     Unilaterally cancel any such Non-Assumed Option which
has not vested and/or which has not become exercisable as of the Action
Effective Date; and/or

                (c)     Unilaterally cancel such Non-Assumed Option in exchange
for:

                        (i)     whole and/or fractional Shares (or for whole
        Shares and cash in lieu of any fractional Share) that, in the aggregate,
        are equal in value to the excess of the Fair Market Value of the Shares
        that could be purchased subject to such Non-Assumed Option determined as
        of the Action Effective Date (taking into account vesting and/or
        exercisability) over the aggregate Exercise Price for such Shares; or

                        (ii)    cash or other property equal in value to the
        excess of the Fair Market Value of the Shares that could be purchased
        subject to such Non-Assumed Option determined as of the Action Effective
        Date (taking into account vesting and/or exercisability) over the
        aggregate Exercise Price for such Shares; and/or

                (d)     Unilaterally cancel such Non-Assumed Option after
providing the holder of such Option with (1) an opportunity to exercise such
Non-Assumed Option to the extent vested and/or exercisable within a specified
period prior to the date of the Change of Control, and (2) notice of such
opportunity to exercise prior to the commencement of such specified period;
and/or

                (e)     Unilaterally cancel such Non-Assumed Option and notify
the holder of such Option of such action, but only if the Fair Market Value of
the Shares that could be purchased subject to such Non-Assumed Option determined
as of the Action Effective Date (taking into account vesting and/or
exercisability) does not exceed the aggregate Exercise Price for such Shares.

However, notwithstanding the foregoing, to the extent that the recipient of a
Non-Assumed Option is an Insider, payment of cash in lieu of whole or fractional
Shares or shares of a successor may only be made to the extent that such payment
(1) has met the requirements of an exemption under Rule 16b-3 promulgated under
the Exchange Act, or (2) is a subsequent transaction the terms of which were
provided for in a transaction initially meeting the requirements of an exemption
under Rule 16b-3 promulgated under the Exchange Act. Unless an Incentive Award
Agreement provides otherwise, the payment of cash in lieu of whole or fractional
Shares or in lieu of whole or fractional shares of a successor shall be
considered a subsequent transaction approved by the original grant of an Option.


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 15

<PAGE>

        11.2    GENERAL RULE FOR SARS. Except as otherwise provided in an
Incentive Award Agreement, if a Change of Control occurs, and if the agreements
effectuating the Change of Control do not provide for the assumption or
substitution of all Stock Appreciation Rights granted under this Plan, with
respect to any Stock Appreciation Right granted under this Plan that is not so
assumed or substituted (a "Non-Assumed SAR"), the Committee, in its sole and
absolute discretion, may, with respect to any or all of such Non-Assumed SARs,
take either or both of the following actions to be effective as of the date of
the Change of Control (or as of any other date fixed by the Committee occurring
within the thirty (30) day period ending on the date of the Change of Control,
but only if such action remains contingent upon the effectuation of the Change
of Control) (such date referred to as the "Action Effective Date"):

                (a)     Accelerate the vesting and/or exercisability of such
Non-Assumed SAR; and/or

                (b)     Unilaterally cancel any such Non-Assumed SAR which has
not vested or which has not become exercisable as of the Action Effective Date;
and/or

                (c)     Unilaterally cancel such Non-Assumed SAR in exchange
for:

                        (iii)   whole and/or fractional Shares (or for whole
        Shares and cash in lieu of any fractional Share) that, in the aggregate,
        are equal in value to the excess of the Fair Market Value of the Shares
        subject to such Non-Assumed SAR determined as of the Action Effective
        Date (taking into account vesting and/or exercisability) over the SAR
        Exercise Price for such Non-Assumed SAR; or

                        (iv)    cash or other property equal in value to the
        excess of the Fair Market Value of the Shares subject to such
        Non-Assumed SAR determined as of the Action Effective Date (taking into
        account vesting and/or exercisability) over the SAR Exercise Price for
        such Non-Assumed SAR; and/or

                (d)     Unilaterally cancel such Non-Assumed SAR after providing
the holder of such SAR with (1) an opportunity to exercise such Non-Assumed SAR
to the extent vested and/or exercisable within a specified period prior to the
date of the Change of Control, and (2) notice of such opportunity to exercise
prior to the commencement of such specified period; and/or

                (e)     Unilaterally cancel such Non-Assumed SAR and notify the
holder of such SAR of such action, but only if the Fair Market Value of the
Shares that could be purchased subject to such Non-Assumed SAR determined as of
the Action Effective Date (taking into account vesting and/or exercisability)
does not exceed the SAR Exercise Price for such Non-Assumed SAR.

However, notwithstanding the foregoing, to the extent that the recipient of a
Non-Assumed SAR is an Insider, payment of cash in lieu of whole or fractional
Shares or shares of a successor may only be made to the extent that such payment
(1) has met the requirements of an exemption under Rule 16b-3 promulgated under
the Exchange Act, or (2) is a subsequent transaction the terms of which were
provided for in a transaction initially meeting the requirements of an exemption
under Rule 16b-3 promulgated under the Exchange Act. Unless an Incentive Award
Agreement provides otherwise, the payment of cash in lieu of whole or fractional
Shares or in lieu of whole or fractional shares of a successor shall be
considered a subsequent transaction approved by the original grant of a SAR.

        11.3    GENERAL RULE FOR RESTRICTED STOCK UNITS. Except as otherwise
provided in an Incentive Award Agreement, if a Change of Control occurs, and if
the agreements effectuating the Change of Control do not provide for the
assumption or substitution of all Restricted Stock Units granted under this
Plan, with respect to any Restricted Stock Unit granted under this Plan that is
not so assumed or substituted (a "Non-Assumed RSU"), the Committee, in its sole
and absolute discretion, may, with respect to any or all of such Non-Assumed
RSUs, take either or both of the following actions to be effective as of the
date of the Change of Control (or as of any other date fixed by the Committee
occurring within the thirty (30) day period ending on the date of the Change of
Control, but only if such action remains contingent upon the effectuation of the
Change of Control) (such date referred to as the "Action Effective Date"):


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 16

<PAGE>

                (a)     Accelerate the vesting of such Non-Assumed RSU; and/or

                (b)     Unilaterally cancel any such Non-Assumed RSU which has
not vested as of the Action Effective Date; and/or

                (c)     Unilaterally cancel such Non-Assumed RSU in exchange
for:

                        (v)     whole and/or fractional Shares (or for whole
        Shares and cash in lieu of any fractional Share) that are equal to the
        number of Shares subject to such Non-Assumed RSU determined as of the
        Action Effective Date (taking into account vesting); or

                        (vi)    cash or other property equal in value to the
        Fair Market Value of the Shares subject to such Non-Assumed RSU
        determined as of the Action Effective Date (taking into account
        vesting); and/or

                (d)     Unilaterally cancel such Non-Assumed RSU and notify the
holder of such RSU of such action, but only if the Fair Market Value of the
Shares that were subject to such Non-Assumed RSU determined as of the Action
Effective Date (taking into account vesting) is zero.

However, notwithstanding the foregoing, to the extent that the recipient of a
Non-Assumed RSU is an Insider, payment of cash in lieu of whole or fractional
Shares or shares of a successor may only be made to the extent that such payment
(1) has met the requirements of an exemption under Rule 16b-3 promulgated under
the Exchange Act, or (2) is a subsequent transaction the terms of which were
provided for in a transaction initially meeting the requirements of an exemption
under Rule 16b-3 promulgated under the Exchange Act. Unless an Incentive Award
Agreement provides otherwise, the payment of cash in lieu of whole or fractional
Shares or in lieu of whole or fractional shares of a successor shall be
considered a subsequent transaction approved by the original grant of an RSU.

        11.4    GENERAL RULE FOR OTHER INCENTIVE AWARD AGREEMENTS. If a Change
of Control occurs, then, except to the extent otherwise provided in the
Incentive Award Agreement pertaining to a particular Incentive Award or as
otherwise provided in this Plan, each Incentive Award shall be governed by
applicable law and the documents effectuating the Change of Control.


                                   SECTION 12.
                            AMENDMENT OR TERMINATION

        This Plan may be amended by the Board from time to time to the extent
that the Board deems necessary or appropriate; provided, however, no such
amendment shall be made absent the approval of the stockholders of the Company
(a) to increase the number of Shares reserved under Section 3, except as set
forth in Section 10, (b) to extend the maximum life of the Plan under Section 9
or the maximum exercise period under Section 7, (c) to decrease the minimum
Exercise Price under Section 7, or (d) to change the designation of Eligible
Recipients eligible for Incentive Awards under Section 6. Stockholder approval
of other material amendments (such as an expansion of the types of awards
available under the Plan, an extension of the term of the Plan, a change to the
method of determining the Exercise Price of Options issued under the Plan, or a
change to the provisions of Section 7.2(j)) may also be required pursuant to
rules promulgated by an established stock exchange or a national market system
if the Company is, or become, listed or traded on any such established stock
exchange or national market system, or for the Plan to continue to be able to
issue Incentive Awards which meet the Performance-Based Exception. The Board
also may suspend the granting of Incentive Awards under this Plan at any time
and may terminate this Plan at any time. The Company shall have the right to
modify, amend or cancel any Incentive Award after it has been granted if (I) the
modification, amendment or cancellation does not diminish the rights or benefits
of the Incentive Award recipient under the Incentive Award (provided, however,
that a modification, amendment or cancellation that results solely in a change
in the tax consequences with respect to an Incentive Award shall not be deemed
as a diminishment of rights or benefits of such Incentive Award), (II) the
Participant consents in writing to such modification, amendment or cancellation,
(III) there is a dissolution or liquidation of the Company, (IV) this Plan
and/or the Incentive


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 17

<PAGE>

Award Agreement expressly provides for such modification, amendment or
cancellation, or (V) the Company would otherwise have the right to make such
modification, amendment or cancellation by applicable law.


                                   SECTION 13.
                                  MISCELLANEOUS

        13.1    STOCKHOLDER OR UNIT-HOLDER RIGHTS. No Participant shall have any
rights as a stockholder of the Company or a Unit holder of the Initial Limited
Partner as a result of the grant of an Incentive Award to him or to her under
this Plan or his or her exercise of such Incentive Award pending the actual
delivery of Shares or Units subject to such Incentive Award to such Participant.

        13.2    NO GUARANTEE OF CONTINUED RELATIONSHIP. The grant of an
Incentive Award to a Participant under this Plan shall not constitute a contract
of employment and shall not confer on a Participant any rights upon his or her
termination of employment or relationship with the Company in addition to those
rights, if any, expressly set forth in the Incentive Award Agreement that
evidences his or her Incentive Award.

        13.3    WITHHOLDING. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company as a
condition precedent for the fulfillment of any Incentive Award, an amount
sufficient to satisfy Federal, state and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan and/or any action taken by a Participant with
respect to an Incentive Award. Whenever Shares are to be issued to a Participant
upon exercise of an Option or a Stock Appreciation Right, or satisfaction of
conditions under a Restricted Stock Unit, or grant of or substantial vesting of
a Restricted Stock Award, the Company shall have the right to require the
Participant to remit to the Company, as a condition of exercise of the Option or
Stock Appreciation Right, or as a condition to the fulfillment of the Restricted
Stock Unit, or as a condition to the grant or substantial vesting of the
Restricted Stock Award, an amount in cash (or, unless the Incentive Award
Agreement provides otherwise, in Shares) sufficient to satisfy federal, state
and local withholding tax requirements at the time of such exercise,
satisfaction of conditions, or grant or substantial vesting. However,
notwithstanding the foregoing, to the extent that a Participant is an Insider,
satisfaction of withholding requirements by having the Company withhold Shares
may only be made to the extent that such withholding of Shares (1) has met the
requirements of an exemption under Rule 16b-3 promulgated under the Exchange
Act, or (2) is a subsequent transaction the terms of which were provided for in
a transaction initially meeting the requirements of an exemption under Rule
16b-3 promulgated under the Exchange Act. Unless the Incentive Award Agreement
provides otherwise, the withholding of shares to satisfy federal, state and
local withholding tax requirements shall be a subsequent transaction approved by
the original grant of an Incentive Award. Notwithstanding the foregoing, in no
event shall payment of withholding taxes be made by a retention of Shares by the
Company unless the Company retains only Shares with a Fair Market Value equal to
the minimum amount of taxes required to be withheld.

        13.4    NOTIFICATION OF DISQUALIFYING DISPOSITIONS OF ISO OPTIONS. If a
Participant sells or otherwise disposes of any of the Shares acquired pursuant
to an Option that is an ISO on or before the later of (1) the date two (2) years
after the date of grant of such Option, or (2) the date one (1) year after the
exercise of such Option, then the Participant shall immediately notify the
Company in writing of such sale or disposition and shall cooperate with the
Company in providing sufficient information to the Company for the Company to
properly report such sale or disposition to the Internal Revenue Service. The
Participant acknowledges and agrees that he may be subject to federal, state
and/or local tax withholding by the Company on the compensation income
recognized by Participant from any such early disposition, and agrees that he
shall include the compensation from such early disposition in his gross income
for federal tax purposes. Participant also acknowledges that the Company may
condition the exercise of any Option that is an ISO on the Participant's express
written agreement with these provisions of this Plan.

        13.5    TRANSFER. The transfer of an Employee between or among the
Company, a Subsidiary or a Parent shall not be treated as a termination of his
or her employment under this Plan. The transfer of an Employee between or among
the Company and the Initial Limited Partner shall also not be treated as a


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 18

<PAGE>

termination of his or her employment under this Plan. However, notwithstanding
the foregoing, a termination of employment may nonetheless occur for purposes of
determining whether an Option will satisfy the requirements of the Code to be an
ISO.

        13.6    CONSTRUCTION. This Plan shall be construed under the laws of the
State of Maryland.


                                   SECTION 14.
                              PERFORMANCE CRITERIA

        14.1    PERFORMANCE GOAL BUSINESS CRITERIA. Unless and until the Board
proposes for stockholder vote and stockholders approve a change in the general
performance measures set forth in this Section, the attainment of which may
determine the degree of payout and/or vesting with respect to Incentive Awards
to Employees and Key Persons pursuant to this Plan which are designed to qualify
for the Performance-Based Exception, the performance measure(s) to be used by a
Committee composed of two (2) or more Outside Directors for purposes of such
grants shall be chosen from among the following:

                (a)     Earnings per share;

                (b)     Net income (before or after taxes);

                (c)     Return measures (including, but not limited to, return
on assets, equity or sales);

                (d)     Cash flow return on investments which equals net cash
flows divided by owners equity;

                (e)     Earnings before or after taxes, depreciation and/or
amortization;

                (f)     Gross revenues;

                (g)     Operating income (before or after taxes);

                (h)     Total stockholder returns;

                (i)     Corporate performance indicators (indices based on the
level of certain services provided to customers);

                (j)     Cash generation, profit and/or revenue targets;

                (k)     Growth measures, including revenue growth, as compared
with a peer group or other benchmark;

                (l)     Share price (including, but not limited to, growth
measures and total stockholder return); and/or

                (m)     Pre-tax profits.

        14.2    DISCRETION IN FORMULATION OF PERFORMANCE GOALS. The Board shall
have the discretion to adjust the determinations of the degree of attainment of
the pre-established performance goals; provided, however, that Incentive Awards
that are to qualify for the Performance-Based Exception may not be adjusted
upward (although the Committee shall retain the discretion to adjust such
Incentive Awards downward).

        14.3    PERFORMANCE PERIODS. The Board shall have the discretion to
determine the period during which any performance goal must be attained with
respect to an Incentive Award. Such period may be of any length, and must be
established prior to the start of such period or within the first ninety (90)
days of


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 19

<PAGE>

such period (provided that the performance criteria is not in any event set
after 25% or more of such period has elapsed).

        14.4    MODIFICATIONS TO PERFORMANCE GOAL BUSINESS CRITERIA. In the
event that the applicable tax and/or securities laws change to permit Board
discretion to alter the governing performance measures noted above without
obtaining stockholder approval of such changes, the Board shall have sole
discretion to make such changes without obtaining stockholder approval. In
addition, in the event that the Board determines that it is advisable to grant
Incentive Awards that shall not qualify for the Performance-Based Exception, the
Board may make such grants without satisfying the requirements of Code
ss.162(m); otherwise, a Committee composed exclusively of two (2) of more
Outside Directors must make such grants.


      Behringer Harvard Opportunity REIT I, Inc. 2004 Incentive Award Plan
                                     Page 20