Document:

Exhibit 10.4

 

RESTRICTED STOCK AGREEMENT

 

NEUROMETRIX, INC.

 

AGREEMENT
made as of the         day of
            , 20XX
(the “Grant Date”), between NeuroMetrix Inc. (the “Company”), a Delaware corporation having its
principal place of business in Waltham, Massachusetts and
                        
(the “Participant”).

 

WHEREAS,
the Company has adopted the Third Amended and Restated 2004 Stock Option and
Incentive Plan (the “Plan”) to promote the interests of the Company by
providing an incentive for employees, directors and consultants of the Company
or its Subsidiaries;

 

WHEREAS,
pursuant to the provisions of the Plan, the Company desires to offer to the
Participant a Restricted Stock Award to purchase shares of the Company’s common
stock, $0.0001 par value per
share (“Common Stock”), in accordance with the provisions of the Plan, all on
the terms and conditions hereinafter set forth;

 

WHEREAS,
the Participant wishes to accept said offer; and

 

WHEREAS,
the parties hereto understand and agree that any terms used and not defined
herein have the meanings ascribed to such terms in the Plan.

 

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

 

1.             Terms of Restricted Stock Award.  The Participant hereby accepts the offer of
the Company to issue to the Participant, in accordance with the terms of the
Plan and this Agreement,                                 
(            )  Shares of
the Company’s Common Stock (such shares, subject to adjustment pursuant to Section 3(b) of
the Plan and Section 2(h) hereof, the “Granted Shares”) at a purchase
price per share of $0.0001 (the “Purchase Price”), receipt of which is hereby
acknowledged by the Participant’s prior service to the Company and which amount
will be reported as income on the Participant’s W-2 for this calendar year.

 

2.             Forfeiture Provisions.

 

(a)           Lapsing Forfeiture Right.  In the event that for any reason the
Participant is no longer an employee or consultant of the Company or a
Subsidiary prior to
            , 20XX
(the “Termination”), the Participant shall, on the date of Termination,
immediately forfeit to the Company all of the Granted Shares which have not yet
lapsed in accordance with the schedule set forth below (the “Lapsing Forfeiture
Right”) except as otherwise set forth in Section 2(b) or (c).  The Company’s Lapsing Forfeiture Right is as
follows:

 

The
Granted Shares will vest and no longer be subject to the Company’s Lapsing
Forfeiture Right with respect to 25% of the Granted Shares on
            , 20XX
and an additional 1/16th of the Granted Shares on each
            ,
            ,
             and
             thereafter
until             ,
20XX; provided that the total number of Shares for which the Lapsing Forfeiture
Right expires will be rounded down on each date to the nearest whole Share.

 

Accordingly,
for the avoidance of doubt:

 

 

(i)            if the Participant’s
termination is prior to
            , 20XX,
100% of the Granted Shares shall be forfeited to the Company;

 

(ii)           if the Participant’s
termination is on or after
            , 20XX,
but prior to
            , 20XX,
75% of the Granted Shares shall be forfeited to the Company;

 

(iii)          if the Participant’s
termination is on or after
            , 20XX,
but prior to
            , 20XX,
68.75% of the Granted Shares shall be forfeited to the Company;

 

(iv)          if the Participant’s
termination is on or after
            , 20XX,
but prior to
            , 20XX,
62.50% of the Granted Shares shall be forfeited to the Company;

 

(v)           if the Participant’s
termination is on or after
            , 20XX,
but prior to
            , 20XX,
56.25% of the Granted Shares shall be forfeited to the Company;

 

(vi)          if the Participant’s
termination is on or after
            , 20XX,
but prior to
            , 20XX,
50% of the Granted Shares shall be forfeited to the Company.

 

And
so forth until on or after
            , 20XX
at which time all Granted Shares shall no longer be subject to the Company’s
Lapsing Forfeiture Right.

 

(b)           Termination
Due to Death.  If the Participant’s
employment terminates by reason of death, the Company’s Lapsing Forfeiture
Right shall terminate as to all of the Granted Shares then subject.

 

(c)           Termination
Due to Disability.  If the
Participant’s employment terminates by reason of disability (as determined by
the Administrator), the Company’s Lapsing Forfeiture Right shall terminate as
to all of the Granted Shares then subject.

 

(d)           Effect
of a For Cause Termination. 
Notwithstanding anything to the contrary contained in this Agreement, in
the event the Company or a Subsidiary terminates the Participant’s employment
or service for “cause”  (for
purposes hereof, “cause” shall mean a vote by the Board of Directors resolving
that the Participant shall be dismissed as a result of (i) any material
breach by the Participant of any agreement between the Participant and the
Company; (ii) the conviction of or plea of nolo contendere by the
Participant to a felony or a crime involving moral turpitude; or (iii) any
material misconduct or willful and deliberate non-performance (other than by
reason of disability) by the Participant of the Participant’s duties to the
Company) or in the event the Board of Directors determines, within one year
after the Participant’s termination, that either prior or subsequent to the
Participant’s termination the Participant engaged in conduct that would
constitute “cause,” all of the Granted Shares (regardless of whether they are
then subject to the Company’s Lapsing Forfeiture Right) then held by the
Participant shall be forfeited to the Company immediately as of the time the
Participant is notified that he or she has been terminated for “cause” or that
he or she engaged in conduct which would constitute “cause”.

 

The
Administrator’s determination of the reason for termination of the Participant’s
employment shall be conclusive and binding on the Participant and his or her
representatives or legatees.

 

(e)           Escrow.  The certificates representing all Granted
Shares acquired by the Participant hereunder which from time to time are
subject to the Lapsing Forfeiture Right shall be delivered to the Company and
the Company shall hold such Granted Shares in escrow as provided in this Section 2(e).  Upon the request of the Participant, the Company shall promptly release from
escrow and deliver to the Participant the whole number of Granted Shares, if
any, as to which the Company’s Lapsing

 

2

 

Forfeiture Right has lapsed and without the legend
set forth in Section 5. In the event of forfeiture to the Company of
Granted Shares subject to the Lapsing Forfeiture Right, the Company shall
release from escrow and cancel a certificate for the number of Granted Shares
so forfeited.  Any securities distributed
in respect of the Granted Shares held in escrow, including, without limitation,
shares issued as a result of stock splits, stock dividends or other
recapitalizations, shall also be held in escrow in the same manner as the
Granted Shares.

 

(f)            Prohibition on Transfer.  The Participant recognizes and agrees that
all Granted Shares which are subject to the Lapsing Forfeiture Right may not be
sold, transferred, assigned, hypothecated, pledged, encumbered or otherwise
disposed of, whether voluntarily or by operation of law, other than to the
Company.  The
Company shall not be required to transfer any Granted Shares on its books which
shall have been sold, assigned or otherwise transferred in violation of this Section 2(f),
or to treat as the owner of such Granted Shares, or to accord the right to vote
as such owner or to pay dividends to, any person or organization to which any
such Granted Shares shall have been so sold, assigned or otherwise transferred,
in violation of this Section 2(f).

 

(g)           Failure to Deliver Granted Shares
to be Forfeited.  In the event that
the Granted Shares to be forfeited to the Company under this Agreement are not
in the Company’s possession pursuant to Section 2(e) above or
otherwise and the Participant fails to deliver such Granted Shares to the
Company, the Company may immediately take such action as is appropriate to
transfer record title of such Granted Shares from the Participant to the
Company and treat the Participant and such Granted Shares in all respects as if
delivery of such Granted Shares had been made as required by this
Agreement.  The Participant hereby
irrevocably grants the Company a power of attorney which shall be coupled with
an interest for the purpose of effectuating the preceding sentence.

 

3.             Securities
Law Compliance.  The Participant
specifically acknowledges and agrees that any sales of Granted Shares shall be
made in accordance with the requirements of the 1933 Act.

 

4.             Rights as a Stockholder.  The Participant shall have all the rights of
a stockholder with respect to the Granted Shares, including voting and dividend
rights, subject to the transfer and other restrictions set forth herein and in
the Plan.

 

5.             Legend.  In addition to any legend required pursuant
to the Plan, all certificates representing the Granted Shares to be issued to
the Participant pursuant to this Agreement shall have endorsed thereon a legend
substantially as follows:

 

“The
shares represented by this certificate are subject to restrictions set forth in
a Restricted Stock Agreement dated as of
            , 20XX
with this Company, a copy of which Agreement is available for inspection at the
offices of the Company or will be made available upon request.”

 

6.             Incorporation of the Plan.  The Participant specifically understands and
agrees that the Granted Shares issued under the Plan are being sold to the
Participant pursuant to the Plan, a copy of which Plan the Participant
acknowledges he or she has read and understands and by which Plan he or she
agrees to be bound.  The provisions of
the Plan are incorporated herein by reference.

 

7.             Tax Liability of the Participant
and Payment of Taxes.  The
Participant acknowledges and agrees that any income or other taxes due from the
Participant with respect to the Granted Shares issued pursuant to this
Agreement, including, without limitation, the Lapsing Forfeiture Right, shall
be the Participant’s responsibility. 
Without limiting the foregoing, the Participant agrees that, to the
extent that the lapsing of restrictions on disposition of any of the Granted
Shares or the declaration of dividends on any such shares before the lapse of
such restrictions on disposition results in the Participant’s being 

 

3

 

deemed
to be in receipt of earned income under the provisions of the Code, the Company
shall be entitled to immediate payment from the Participant of the amount of
any tax required to be withheld by the Company.

 

In connection with the foregoing, the Participant agrees that if an
arrangement to pay the withholding obligation in cash has not been received by
the Company prior to the date that Granted Shares shall be released from the
Lapsing Forfeiture Right, the Company shall authorize a registered broker (the “Broker”)
to sell on such date such number of Granted Shares otherwise deliverable to the
Participant on that date as the Company instructs the Broker to sell to satisfy
the Company’s withholding obligation, after deduction of the Broker’s
commission, and the Broker shall remit to the Company the cash necessary in
order for the Company to satisfy its withholding obligation.  If such sale is not sufficient to pay the
withholding obligation the Participant agrees to pay to the Company as soon as
practicable, including through additional payroll withholding, the amounts that
are not satisfied by the sale of shares of Common Stock.  The Participant agrees to hold the Company
and the Broker harmless from all costs, damages or expenses relating to any
such sale.  The Participant acknowledges
that the Company and the Broker are under no obligation to arrange for such
sale at any particular price.  In
connection with such sale of Granted Shares, the Participant shall execute any
such documents requested by Broker in order to effectuate the sale of the
Granted Shares and payment of the withholding obligation to the Company.  The Company shall not deliver any of the
Granted Shares to the Participant until all withholdings have been made.  The Participant acknowledges that this
paragraph is intended to comply with Section 10b5-1(c)(1(i)(B) under
the Exchange Act of 1934, as amended. 
Notwithstanding the foregoing, the Company shall have the right to
require the withholding obligation to be made in cash instead of through the
sale of shares of Common Stock if it reasonably believes that the sale of
shares would violate applicable securities laws.

 

Upon execution of this Agreement, the Participant may file an election
under Section 83 of the Code.  The
Participant acknowledges that if he does not file such an election, as the
Granted Shares are released from the Lapsing Forfeiture Right in accordance
with Section 2, the Participant will have income for tax purposes equal to
the fair market value of the Granted Shares at such date, less the price paid
for the Granted Shares by the Participant.

 

8.             Equitable Relief.  The Participant specifically acknowledges and
agrees that in the event of a breach or threatened breach of the provisions of
this Agreement or the Plan, including the attempted transfer of the Granted
Shares by the Participant in violation of this Agreement, monetary damages may
not be adequate to compensate the Company, and, therefore, in the event of such
a breach or threatened breach, in addition to any right to damages, the Company
shall be entitled to equitable relief in any court having competent
jurisdiction.  Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
to it for any such breach or threatened breach.

 

9.             No Obligation to Maintain
Relationship.  The Company is not by
the Plan or this Agreement obligated to continue the Participant as an employee
or consultant of the Company or a Subsidiary. 
The Participant acknowledges:  (i) that
the Plan is discretionary in nature and may be suspended or terminated by the
Company at any time; (ii) that the grant of the Shares is a one-time
benefit which does not create any contractual or other right to receive future
grants of shares, or benefits in lieu of shares; (iii) that all
determinations with respect to any such future grants, including, but not
limited to, the times when shares shall be granted, the number of shares to be
granted, the purchase price, and the time or times when each share shall be
free from a lapsing forfeiture right, will be at the sole discretion of the
Company; (iv) that the Participant’s participation in the Plan is
voluntary; (v) that the value of the Shares is an extraordinary item of
compensation which is outside the scope of the Participant’s employment
contract, if any; and (vi) that the Shares are not part of normal or
expected compensation for purposes of calculating any severance, resignation,
redundancy, end of service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments.

 

4

 

10.           Notices.  Any notices required or permitted by the
terms of this Agreement or the Plan shall be given by recognized courier
service, facsimile, registered or certified mail, return receipt requested,
addressed as follows:

 

If to the Company:

 

NeuroMetrix, Inc.

62
Fourth Avenue

Waltham,
MA 02451

Attn:
Stock Administrator

 

If to the Participant:

 

 

 

or
to such other address or addresses of which notice in the same manner has
previously been given.  Any such notice
shall be deemed to have been given on the earliest of receipt, one business day
following delivery by the sender to a recognized courier service, or three
business days following mailing by registered or certified mail.

 

11.           Benefit of Agreement.  Subject to the provisions of the Plan and the
other provisions hereof, this Agreement shall be for the benefit of and shall
be binding upon the heirs, executors, administrators, successors and assigns of
the parties hereto.

 

12.           Governing Law.  This Agreement shall be construed and
enforced in accordance with the laws of the State of Delaware, without giving effect to the conflict of law
principles thereof.  For the purpose of
litigating any dispute that arises under this Agreement, whether at law or in
equity, the parties hereby consent to exclusive jurisdiction in Massachusetts
and agree that such litigation shall be conducted in the courts of the
Commonwealth of Massachusetts or the federal courts of the United States for
the District of Massachusetts.

 

13.           Severability.  If any provision of this Agreement is held to
be invalid or unenforceable by a court of competent jurisdiction, then such
provision or provisions shall be modified to the extent necessary to make such
provision valid and enforceable, and to the extent that this is impossible,
then such provision shall be deemed to be excised from this Agreement, and the
validity, legality and enforceability of the rest of this Agreement shall not
be affected thereby.

 

14.           Entire Agreement.  This Agreement, together with the Plan,
constitutes the entire agreement and understanding between the parties hereto
with respect to the subject matter hereof and supersedes all prior oral or
written agreements and understandings relating to the subject matter
hereof.  No statement, representation,
warranty, covenant or agreement not expressly set forth in this Agreement shall
affect or be used to interpret, change or restrict the express terms and provisions
of this Agreement provided, however, in any event, this Agreement shall be
subject to and governed by the Plan.

 

15.           Modifications and Amendments;
Waivers and Consents.  The terms and
provisions of this Agreement may be modified or amended as provided in the
Plan.  Except as provided in the Plan,
the terms and provisions of this Agreement may be waived, or consent for the
departure therefrom granted, 

 

5

 

only
by written document executed by the party entitled to the benefits of such
terms or provisions.  No such waiver or
consent shall be deemed to be or shall constitute a waiver or consent with
respect to any other terms or provisions of this Agreement, whether or not
similar.  Each such waiver or consent
shall be effective only in the specific instance and for the purpose for which
it was given, and shall not constitute a continuing waiver or consent.

 

16.           Consent of Spouse/Domestic Partner.  If the Participant has a spouse or domestic
partner as of the date of this Agreement, the Participant’s spouse or domestic
partner shall execute a Consent of Spouse/Domestic Partner in the form of Exhibit A
hereto, effective as of the date hereof. 
Such consent shall not be deemed to confer or convey to the spouse or
domestic partner any rights in the Granted Shares that do not otherwise exist
by operation of law or the agreement of the parties.  If the Participant subsequent to the date
hereof, marries, remarries or applies to the Company for domestic partner
benefits, the Participant shall, not later than 60 days thereafter, obtain his
or her new spouse/domestic partner’s acknowledgement of and consent to the
existence and binding effect of all restrictions contained in this Agreement by
having such spouse/domestic partner execute and deliver a Consent of
Spouse/Domestic Partner in the form of Exhibit A.

 

17.           Counterparts.  This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

 

18.           Data Privacy.  By entering into this Agreement, the
Participant:  (i) authorizes the
Company and each Subsidiary, and any agent of the Company or any Subsidiary administering
the Plan or providing Plan record keeping services, to disclose to the Company
or any of its Subsidiaries such information and data as the Company or any such
Subsidiary shall request in order to facilitate the grant of Shares and the
administration of the Plan; (ii) waives any data privacy rights he or she
may have with respect to such information; and (iii) authorizes the
Company and each Subsidiary to store and transmit such information in
electronic form.

 

[THE NEXT PAGE IS THE SIGNATURE PAGE]

 

6

 

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

 

	
   

  	
  NEUROMETRIX,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Participant:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Print Name:

  

 

7

 

EXHIBIT A

 

CONSENT OF SPOUSE/DOMESTIC PARTNER

 

I,
                                                        ,
spouse or domestic partner of
                                                  ,
acknowledge that I have read the RESTRICTED STOCK AGREEMENT dated as of
            , 20XX
(the “Agreement”) to which this Consent is attached as Exhibit A and that
I know its contents.  Capitalized terms
used and not defined herein shall have the meanings assigned to such terms in
the Agreement.  I am aware that by its
provisions the Granted Shares granted to my spouse/domestic partner pursuant to
the Agreement are subject to a Lapsing Forfeiture Right in favor of NeuroMetrix, Inc.
(the “Company”) and that, accordingly, I may be required to forfeit to the
Company any or all of the Granted Shares of which I may become possessed as a
result of a gift from my spouse/domestic partner or a court decree and/or any
property settlement in any domestic litigation.

 

I
hereby agree that my interest, if any, in the Granted Shares subject to the
Agreement shall be irrevocably bound by the Agreement and further understand
and agree that any community property interest I may have in the Granted Shares
shall be similarly bound by the Agreement.

 

I
agree to the Lapsing Forfeiture Right described in the Agreement and I hereby
consent to the forfeiture of the Granted Shares to the Company by my
spouse/domestic partner or my spouse/domestic partner’s legal representative in
accordance with the provisions of the Agreement.  Further, as part of the consideration for the
Agreement, I agree that at my death, if I have not disposed of any interest of
mine in the Granted Shares by an outright bequest of the Granted Shares to my
spouse or domestic partner, then the Company shall have the same rights against
my legal representative to exercise its rights to the Granted Shares with
respect to any interest of mine in the Granted Shares as it would have had
pursuant to the Agreement if I had acquired the Granted Shares pursuant to a
court decree in domestic litigation.

 

I AM AWARE THAT THE LEGAL, FINANCIAL AND RELATED MATTERS CONTAINED IN
THE AGREEMENT ARE COMPLEX AND THAT I AM FREE TO SEEK INDEPENDENT PROFESSIONAL
GUIDANCE OR COUNSEL WITH RESPECT TO THIS CONSENT.  I HAVE EITHER SOUGHT SUCH GUIDANCE OR COUNSEL
OR DETERMINED AFTER REVIEWING THE AGREEMENT CAREFULLY THAT I WILL WAIVE SUCH
RIGHT.

 

Dated
as of the
              
day of
                                ,
20XX.

 

 

	
   

  	
   

  
	
   

  	
  Print
  name:

  

 

A-1Exhibit 10.1

 

FORM OF ADVISORY AGREEMENT

 

AMONG

 

CLARION PROPERTY TRUST INC.,

 

CLARION PROPERTY TRUST OPERATING PARTNERSHIP LP,

 

AND

 

CPT ADVISORS LLC

 

 

TABLE OF CONTENTS

 

	
  1.

  	
  Definitions

  	
  1

  
	
  2.

  	
  Appointment

  	
  6

  
	
  3.

  	
  Duties of the Advisor

  	
  6

  
	
  4.

  	
  Authority of Advisor

  	
  9

  
	
  5.

  	
  Sub-Advisors

  	
  9

  
	
  6.

  	
  Bank Accounts

  	
  10

  
	
  7.

  	
  Records; Access

  	
  10

  
	
  8.

  	
  Limitations on Activities

  	
  10

  
	
  9.

  	
  Relationship with Directors

  	
  10

  
	
  10.

  	
  Advisory Fee

  	
  11

  
	
  11.

  	
  Expenses

  	
  12

  
	
  12.

  	
  Other Services

  	
  13

  
	
  13.

  	
  Reimbursement to the Advisor

  	
  13

  
	
  14.

  	
  Other Activities of the Advisor

  	
  14

  
	
  15.

  	
  Relationship of the Parties

  	
  14

  
	
  16.

  	
  The Clarion Name

  	
  15

  
	
  17.

  	
  Term of Agreement

  	
  15

  
	
  18.

  	
  Termination by the Parties

  	
  15

  
	
  19.

  	
  Assignment to an Affiliate

  	
  15

  
	
  20.

  	
  Payments to and Duties of Advisor Upon Termination

  	
  15

  
	
  21.

  	
  Indemnification by the Company and the Operating
  Partnership

  	
  16

  
	
  22.

  	
  Indemnification by Advisor

  	
  16

  
	
  23.

  	
  Non-Solicitation

  	
  16

  
	
  24.

  	
  Miscellaneous

  	
  17

  

 

i

 

FORM OF
ADVISORY AGREEMENT

 

THIS
ADVISORY AGREEMENT (the “Agreement”), dated as of the         
day of     , 2010 and effective as of the date the
Registration Statement (as defined below) is declared effective by the
Securities and Exchange Commission (the “Effective Date”), is among
Clarion Property Trust Inc., a Maryland corporation (the “Company”),
Clarion Property Trust Operating Partnership LP, a Delaware limited partnership
(the “Operating Partnership”), and CPT Advisors LLC, a Delaware limited
liability company. Capitalized terms used herein shall have the meanings ascribed
to them in Section 1 below.

 

W I T N E S S E T H

 

WHEREAS,
the Company intends to qualify as a REIT, and to invest its funds in
investments permitted by the terms of Sections 856 through 860 of the
Code;

 

WHEREAS,
the Company is the general partner of the Operating Partnership and intends to
conduct all of its business and make all Investments through the Operating
Partnership;

 

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

 

WHEREAS,
the Advisor is willing to undertake to render such services, subject to the
supervision of the Board, on the terms and conditions hereinafter set forth;

 

NOW,
THEREFORE, in consideration of the foregoing and of the mutual covenants and
agreements contained herein, the parties hereto agree as follows:

 

1.             DEFINITIONS.  As used in this Agreement, the following terms have the definitions
hereinafter indicated:

 

Acquisition Expenses. Any and all expenses incurred by the Company, the
Operating Partnership, the Advisor, or any of their Affiliates in connection
with the selection, acquisition, origination, making or development of any
Investments, whether or not acquired, including, without limitation, legal fees
and expenses, travel and communications expenses, costs of appraisals,
nonrefundable option payments on property not acquired, accounting fees and
expenses, title insurance premiums, and the costs of performing due diligence.

 

Advisor. CPT Advisors
LLC, a Delaware limited liability company, any successor advisor to the Company,
the Operating Partnership or any Person to which CPT Advisors LLC or any
successor advisor subcontracts substantially all of its functions.
Notwithstanding the foregoing, a Person hired or retained by CPT Advisors LLC
to perform sub-advisory or property management and related services for the
Company or the Operating Partnership that is not hired or retained to perform
substantially all of the functions of CPT Advisors LLC with respect to the
Company or the Operating Partnership as a whole shall not be deemed to be an
Advisor.

 

Advisory Fee. The fee payable
to the Advisor pursuant to Section 10.

 

Affiliate or Affiliated. With respect to any Person, (i) any Person
directly or indirectly owning, controlling or holding, with the power to vote,
10.0% or more of the outstanding voting securities of such other Person; (ii) any
Person 10.0% or more of whose outstanding voting securities are directly or 

 

 

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

 

Annual Total Return. As further described in Section 10,
the investment return provided to Stockholders, which shall be equal to, for
all Shares outstanding during the period, (i) distributions paid per Share
over the period adjusted for (ii) the change in NAV per Share over the
period.

 

Articles of Incorporation. The Articles of Incorporation of the Company, as
amended from time to time.

 

Average Invested Assets. For a specified period, the average of the aggregate
book value of the assets of the Company invested, directly or indirectly, in
Investments before deducting depreciation, bad debts or other non-cash
reserves, computed by taking the average of such values at the end of each
month during such period.

 

Board. The board of
directors of the Company, as of any particular time.

 

Business Day. Any day on
which the New York Stock Exchange is open for trading.

 

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

 

Cause. With respect to
the termination of this Agreement, fraud, criminal conduct, willful misconduct
or willful or negligent breach of fiduciary duty by the Advisor in connection
with performing its duties hereunder.

 

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

 

Company. Company shall
have the meaning set forth in the preamble of this Agreement.

 

Dealer Manager. ING Funds
Distributor, LLC, or such other Person or entity selected by the Board to act
as the dealer manager for the Offering.

 

Dealer Manager Fee. The dealer manager fee payable to the Dealer Manager
as described in the Company’s Prospectus.

 

Director. A member of the
Board.

 

Distribution Fee. The
distribution fee payable to the Dealer Manager and reallowable to Participating
Broker-Dealers with respect to Shares sold by them as described in the Company’s
Prospectus.

 

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

 

2

 

Effective Date. Effective Date
shall have the meaning set forth in the preamble of this Agreement.

 

Excess Amount. Excess Amount
shall have the meaning set forth in Section 13.

 

Expense Year. Expense Year
shall have the meaning set forth in Section 13.

 

Fixed Component. The
non-variable component of the Advisory Fee as described in Section 10(b).

 

GAAP. Generally
accepted accounting principles as in effect in the United States of America
from time to time.

 

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

 

Indemnitee. Indemnitee and
Indemnitees shall have the meaning set forth in Section 21 herein.

 

Independent Director. Independent Director shall have the meaning set
forth in the Articles of Incorporation.

 

Investment Company Act. The Investment Company Act of 1940, as amended.

 

Investments. Any investments
by the Company or the Operating Partnership in Real Property and Real Estate
Related Assets.

 

Joint Ventures. The joint
venture or partnership arrangements (other than with the Operating Partnership)
in which the Company or any of its subsidiaries is a co-venturer or general
partner which are established to acquire Real Properties.

 

Listing. The listing of
the Shares on a national securities exchange or the receipt by the Stockholders
of securities that are listed on a national securities exchange in exchange for
the Company’s common stock. Upon such Listing, the Shares shall be deemed
Listed.

 

Loans. Any
indebtedness or obligations in respect of borrowed money or evidenced by bonds,
notes, debentures, deeds of trust, letters of credit or similar instruments,
including mortgages and mezzanine loans.

 

NASAA REIT Guidelines. The Statement of Policy Regarding Real Estate
Investment Trusts published by the North American Securities Administrators
Association on May 7, 2007, as may be amended from time to time.

 

NAV. The Company’s
net asset value, calculated pursuant to the Valuation Guidelines.

 

3

 

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

 

Offering. The public
offering of Shares pursuant to a Prospectus.

 

Operating Partnership. Operating Partnership shall have the meaning set
forth in the preamble of this Agreement.

 

Operating Partnership Agreement. The Limited Partnership Agreement of Clarion
Property Trust Operating Partnership LP, as amended from time to time.

 

Organizational and Offering Expenses. All expenses incurred by or on behalf of the Company
in connection with and in preparing the Company for registration of, and
subsequently offering and distributing to the public, its Shares, whether
incurred before or after the date of this Agreement, which may include but are
not limited to: total underwriting and brokerage discounts and commissions
including fees of the underwriters’ attorneys; expenses for printing, engraving
and mailing; salaries of employees while engaged in sales activity; telephone
and other telecommunications costs; all advertising and marketing expenses
(including the costs related to investor and broker-dealer sales meetings);
charges of transfer agents, registrars, trustees, escrow holders, depositories
and experts; and fees, expenses and taxes related to the filing, registration
and qualification of the sale of the Shares under federal and state laws,
including accountants’ and attorneys’ fees and expenses.

 

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

 

Performance Component. The variable component of the Advisory Fee as
described in Section 10(b).

 

Person. An individual,
corporation, partnership, trust, joint venture, limited liability company or
other entity.

 

Primary Offering. The portion of
an Offering other than the Shares offered pursuant to the Company’s distribution
reinvestment plan.

 

Priority Return Percentage. Priority Return Percentage has the meaning set forth
in Section 10(d).

 

Prospectus. A “Prospectus”
under Section 2(10) of the Securities Act, including a preliminary
Prospectus, an offering circular as described in Rule 253 of the General Rules and
Regulations under the Securities Act or, in the case of an intrastate offering,
any document by whatever name known, utilized for the purpose of offering and
selling securities to the public.

 

Real Estate Related Assets. Any investments by the Company or the Operating Partnership in (i) mortgage,
mezzanine, bridge and other loans on Real Property, (ii) equity securities
such as common stocks, preferred stocks and convertible securities of public or
private real estate companies, and (iii) debt securities such as
collateralized mortgage backed securities, commercial mortgages and other debt
securities.

 

4

 

Real Property. Real property
owned from time to time by the Company or the Operating Partnership, either
directly or through Joint Ventures, which consists of (i) land only, (ii) land,
including the buildings located thereon, (iii) buildings only or (iv) such
investments the Board and the Advisor mutually designate as Real Property to
the extent such investments could be classified as Real Property.

 

Registration Statement. That certain registration statement on Form S-11
of the Company filed with the Securities and Exchange Commission related to the
registration of the Shares for the Company’s initial Offering.

 

REIT. A “real estate
investment trust” under Sections 856 through 860 of the Code or as may be
amended.

 

Related Party. With respect to
any Person, any other Person whose ownership of Shares would be attributed to
the first such Person under Code Section 544 (as modified by Code Section 856(h)(1)(B)).

 

Securities Act. The Securities
Act of 1933, as amended.

 

Selling Commission. That percentage of Gross Proceeds from the sale of
Shares in the Primary Offering payable to the Dealer Manager and reallowable to
Participating Broker-Dealers with respect to Shares sold by them as described
in the Company’s Prospectus.

 

Shares. The shares of
the Company’s common stock, par value $0.01 per share.

 

Stockholders. The registered
holders of the Shares.

 

Sub-Advisor. Sub-Advisor and
Sub-Advisors shall have the meaning set forth in Section 5.

 

Termination Date. The date of
termination of this Agreement or expiration of this Agreement in the event this
Agreement is not renewed for an additional term.

 

Total Operating Expenses. All costs and expenses paid or incurred by the
Company, as determined under GAAP, that are in any way related to the operation
of the Company or its business, including the Advisory Fee, but excluding (i) the
expenses of raising capital such as Organization and Offering Expenses, legal,
audit, accounting, underwriting, brokerage, listing, registration, and other
fees, printing and other such expenses and taxes incurred in connection with
the issuance, distribution, transfer and registration of securities, (ii) interest
payments, (iii) taxes, (iv) non-cash expenditures such as
depreciation, amortization and bad debt reserves, (v) incentive fees paid
in compliance with the NASAA REIT Guidelines; (vi) acquisition fees and
Acquisition Expenses, (vii) real estate commissions on the sale of Real
Property, and (viii) other fees and expenses connected with the
acquisition, disposition, management and ownership of real estate interests,
mortgages or other property (including the costs of foreclosure, insurance
premiums, legal services, maintenance, repair, and improvement of property).
The definition of “Total Operating Expenses” set forth above is intended to
encompass only those expenses which are required to be treated as Total
Operating Expenses under the NASAA REIT Guidelines. As a result, and
notwithstanding the definition set forth above, any expense of the Company
which is not part of Total Operating Expenses under the NASAA REIT Guidelines
shall not be treated as part of Total Operating Expenses for purposes hereof.

 

2%/25% Guidelines. 2%/25% Guidelines shall have the meaning set forth
in Section 13.

 

Valuation Guidelines. The valuation guidelines adopted by the Board, as
amended from time to time.

 

5

 

2.             APPOINTMENT. The Company
and the Operating Partnership hereby appoint the Advisor to serve as their
advisor on the terms and conditions set forth in this Agreement, and the
Advisor hereby accepts such appointment.

 

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

 

(a)       serve as the Company’s and the Operating Partnership’s
investment and financial advisor and provide research and economic and
statistical data in connection with the Company’s and the Operating Partnership’s
Investments and investment policies;

 

(b)       provide the daily management for the Company and the
Operating Partnership and perform and supervise the various administrative
functions reasonably necessary for the management of the Company and the
Operating Partnership, including the collection of revenues and the payment of
the Company’s and the Operating Partnership’s debts and obligations;
maintenance of appropriate computer services to perform such administrative
functions; maintaining the Company’s and the Operating Partnership’s books and
records; and organizing meetings of the Board;

 

(c)       determine the proper allocation of the Company’s and
the Operating Partnership’s Investments between (i) Real Property, (ii) Real
Estate Related Assets, and (iii) cash and cash equivalents and other
short-term investments;

 

(d)       consult with the officers and Directors of the
Company and assist the Directors in the formulation and implementation of the
Company’s financial, valuation and other policies and, as necessary, furnish
the Directors with advice and recommendations with respect to the making of
investments and dispositions consistent with the investment objectives and
policies of the Company and in connection with any borrowings proposed to be
undertaken by the Company or the Operating Partnership;

 

(e)       subject to the provisions of Section 4 hereof, (i) locate,
analyze and select potential Investments; (ii) structure and negotiate the
terms and conditions of transactions pursuant to which acquisitions and
dispositions of Investments will be made; (iii) research, identify, review
and recommend acquisitions and dispositions of Investments to the Board and
make investments on behalf of the Company and the Operating Partnership in
compliance with the investment objectives and policies of the Company; (iv) arrange
for financing and refinancing and make other changes in the asset or capital
structure of, and dispose of, reinvest the proceeds from the sale of, or
otherwise deal with, Investments; (v) enter into leases and service
contracts for Investments and, to the extent necessary, perform all other
operational functions for the maintenance and administration of such
Investments; (vi) actively oversee and manage Investments for purposes of
meeting the Company’s investment objectives; (vii) select Joint Venture
partners, structure corresponding agreements and oversee and monitor these
relationships; (viii) oversee Affiliated and non-Affiliated property
managers who perform services for the Company or the Operating Partnership; (ix) oversee
Affiliated and non-Affiliated Persons with whom the Advisor contracts to
perform certain of the services required to be performed under this Agreement;
and (x) manage accounting and other record-keeping functions for the
Company and the Operating Partnership;

 

6

 

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

 

(g)       monitor the operating performance of the Investments
and provide periodic reports with respect thereto to the Board, including
comparative information with respect to such operating performance and budgeted
or projected operating results;

 

(h)       from time to time, or at any time reasonably
requested by the Directors, make reports to the Directors of its performance of
services to the Company and the Operating Partnership under this Agreement,
including reports with respect to potential conflicts of interest involving the
Advisor or any of its Affiliates;

 

(i)        calculate, at the end of each Business Day, the NAV
as provided in the Valuation Guidelines, and in connection therewith, (i) obtain
appraisals and reports (which may, but are not required to, be prepared by the
Advisor or its Affiliates), where required and appropriate, concerning the
value of the Investments and (ii) engage such third-party appraisal
managers as the Advisor deems appropriate to supervise the appraisal process;
provided that any appraisal manager shall be approved in advance of engagement
by the Board;

 

(j)        deliver to, or maintain on behalf of, the Company
copies of all appraisals obtained in connection with the investments in any
Real Property;

 

(k)       provide the Company and the Operating Partnership
with all necessary cash management services;

 

(l)        arrange, negotiate, coordinate and manage operations
of any Joint Venture interests held by the Company or the Operating Partnership
and conduct all matters with any Joint Venture partners;

 

(m)      communicate on the Company’s or the Operating
Partnership’s behalf with the respective holders of any of the Company’s or the
Operating Partnership’s equity or debt securities as required to satisfy the
reporting and other requirements of any governmental bodies or agencies and to
maintain effective relations with such holders;

 

(n)       evaluate and recommend to the Board hedging
strategies and modifications thereto in effect and cause the Company to engage
in overall hedging strategies consistent with the Company’s status as a REIT
and with the Company’s investment policies approved by the Board;

 

(o)       advise the Company regarding the maintenance of the
Company’s exemption from the Investment Company Act and monitor compliance with
the requirements for maintaining an exemption from such act;

 

(p)       advise the Company regarding the maintenance of the
Company’s status as a REIT and monitor compliance with the various REIT
qualification tests and other rules set out in the Code and the
regulations promulgated thereunder;

 

7

 

(q)       invest or reinvest any money of the Company or the
Operating Partnership (including investing in short-term investments pending
investment in long-term Investments, payment of fees, costs and expenses, or
payments of distributions to the Stockholders and the Operating Partnership’s
partners), and advise the Company and the Operating Partnership as to the
Company’s or the Operating Partnership’s respective capital structure and
capital raising;

 

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

 

(s)       cause the Company and the Operating Partnership to
retain qualified accountants and legal counsel, as applicable, to assist in
developing appropriate accounting procedures, compliance procedures and testing
systems with respect to financial reporting obligations and compliance with the
REIT provisions of the Code and to conduct compliance reviews thereto, as
required;

 

(t)        cause the Company and the Operating Partnership to
qualify to do business in all applicable jurisdictions and to obtain and
maintain all appropriate licenses;

 

(u)       assist the Company in maintaining the registration
of the Shares under federal and state securities laws and complying with all
federal, state and local regulatory requirements applicable to the Company in
respect of the Offering and the Company’s business activities (including the
Sarbanes-Oxley Act of 2002), including preparing or causing to be prepared all
supplements to the Prospectus, post-effective amendments to the registration
statement for any Offering and financial statements required under applicable
regulations and contractual undertakings and all reports and documents, if any,
required under the Securities Act and the Securities Exchange Act of 1934, as
amended;

 

(v)       take all necessary actions to enable the Company and
the Operating Partnership to make required tax filings and reports, including
soliciting Stockholders for required information to the extent provided by the
REIT provisions of the Code;

 

(w)      handle and resolve all claims, disputes or
controversies (including all litigation, arbitration, settlement or other
proceedings or negotiations) in which the Company and the Operating Partnership
may be involved or to which the Company and the Operating Partnership may be
subject, arising out of the Company’s or the Operating Partnership’s day-to-day
operations, subject to such limitations or parameters as may be imposed from time
to time by the Board;

 

(x)        use commercially reasonable efforts to cause
expenses incurred by or on behalf of the Company and the Operating Partnership
to be reasonable or customary and within any budgeted parameters or expense
guidelines set by the Board from time to time;

 

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

 

8

 

(z)        perform such other services as may be required from
time to time for the management and other activities relating to the Company’s
and the Operating Partnership’s respective business and assets as the Board
shall reasonably request or the Advisor shall deem appropriate under the
particular circumstances; and

 

(aa)     use commercially reasonable efforts to cause the
Company and the Operating Partnership to comply with all applicable laws.

 

4.             AUTHORITY
OF ADVISOR.

 

(a)           Pursuant to the terms of
this Agreement (including the restrictions included in this Section 4 and
in Section 8), and subject to the continuing and exclusive authority of
the Board over the management of the Company, the Board (by virtue of its
approval of this Agreement and authorization of the execution hereof by the
officers of the Company) hereby delegates to the Advisor the authority to take,
or cause to be taken, any and all actions and to execute and deliver any and
all agreements, certificates, assignments, instruments or other documents and
to do any and all things that, in the judgment of the Advisor, may be necessary
or advisable in connection with the Advisor’s duties described in Section 3,
including the making of any Investment that fits within the Company’s
investment objectives, strategy and guidelines, policies and limitations as
described in the Company’s Prospectus and within the discretionary limits and
authority as granted to the Advisor from time to time by the Board.

 

(b)           Notwithstanding the
foregoing, any investment in an Investment that does not fit within the Company’s
investment objectives, strategy, guidelines, policies and limitations as
described in the Company’s Prospectus and within the discretionary limits and
authority as granted from time to time by the Board, will require the prior
approval of the Board, any particular Directors specified by the Board or any
committee of the Board, as the case may be.

 

(c)           If a transaction requires
approval by the Directors, the Advisor will deliver to the Directors all
documents and other information required by them to properly evaluate the
proposed transaction.

 

(d)           The prior approval of a
majority of the Independent Directors not otherwise interested in the
transaction and a majority of the Directors not otherwise interested in the
transaction will be required for each transaction to which the Advisor or its
Affiliates is a party.

 

(e)           The Board may, at any time
upon the giving of notice to the Advisor, modify or revoke the authority set
forth in this Section 4; provided, however, that such modification or
revocation shall be effective upon receipt by the Advisor and shall not be
applicable to investment transactions to which the Advisor has committed the
Company or the Operating Partnership prior to the date of receipt by the
Advisor of such notification.

 

5.             SUB-ADVISORS.
The Advisor is hereby authorized to enter into one or more sub-advisory
agreements with other investment advisors (each, a “Sub-Advisor”)
pursuant to which the Advisor may obtain the services of the Sub-Advisor(s) to
assist the Advisor in fulfilling any of its responsibilities hereunder. Specifically,
the Advisor may retain a Sub-Advisor to recommend specific real properties,
securities or other investments based upon the Company’s investment objectives,
policies, guidelines and restrictions, and work, along with the Advisor, in
sourcing, structuring, negotiating, arranging or effecting the acquisition or
disposition of such investments and monitoring investments on behalf of the
Company, subject to the oversight of the Advisor and the Board.

 

9

 

(a)           The Advisor and not the
Company shall be responsible for any compensation payable to any Sub-Advisor.
Notwithstanding the foregoing, the Company shall reimburse the Advisor for any
expenses properly incurred by the Sub-Advisor, to the extent such expenses
would be reimbursable if incurred by the Advisor pursuant to the terms of Section 11
hereof, in order for the Advisor to timely reimburse the Sub-Advisor for such
out-of-pocket costs.

 

(b)           Any sub-advisory agreement
entered into by the Advisor shall be in accordance with the requirements of the
Articles of Incorporation and other applicable federal and state law.

 

6.             BANK
ACCOUNTS. The Advisor may establish and maintain one or more
bank accounts in its own name for the account of the Company or the Operating
Partnership or in the name of the Company and the Operating Partnership and may
collect and deposit into any such account or accounts, and disburse from any
such account or accounts, any money on behalf of the Company or the Operating
Partnership, under such terms and conditions as the Directors may approve,
provided that no funds shall be commingled with the funds of the Advisor; and
the Advisor shall from time to time render appropriate accountings of such
collections and payments to the Directors and to the auditors of the Company,
as applicable.

 

7.             RECORDS;
ACCESS. The Advisor shall maintain appropriate records of
all its activities hereunder and make such records available for inspection by
the Directors and by counsel, auditors and authorized agents of the Company, at
any time or from time to time during normal business hours. The Advisor shall
at all reasonable times have access to the books and records of the Company and
the Operating Partnership.

 

8.             LIMITATIONS
ON ACTIVITIES. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from taking any action which, in its
sole judgment made in good faith, would (a) adversely affect the status of
the Company as a REIT, (b) subject the Company to regulation under the
Investment Company Act, or (c) violate any law, rule, regulation or
statement of policy of any governmental body or agency having jurisdiction over
the Company or its Shares, or otherwise not be permitted by the Articles of
Incorporation or Bylaws of the Company, except if such action shall be ordered
by the Directors, in which case the Advisor shall notify promptly the Directors
of the Advisor’s judgment of the potential impact of such action and shall
refrain from taking such action until it receives further clarification or
instructions from the Directors. In such event, the Advisor shall have no
liability for acting in accordance with the specific instructions of the
Directors so given. Notwithstanding the foregoing, the Advisor, its directors,
officers, employees and members, and partners, directors, officers, members and
stockholders of the Advisor’s Affiliates shall not be liable to the Company or
to the Directors or Stockholders for any act or omission by the Advisor, its
directors, officers, employees, or members, and partners, directors, officers,
members or stockholders of the Advisor’s Affiliates taken or omitted to be
taken in the performance of their duties under this Agreement except as
provided in Section 22 of this Agreement.

 

9.             RELATIONSHIP
WITH DIRECTORS. Subject to Section 8 of this Agreement and to
restrictions advisable with respect to the qualification of the Company as a
REIT, directors, managers, officers and employees of the Advisor or an
Affiliate of the Advisor or any corporate parent of an Affiliate, may serve as
a Director and as officers of the Company, except that no director, officer or
employee of the Advisor or its Affiliates who also is a Director or officer of
the Company shall receive any compensation from the Company for serving as a
Director or officer other than reasonable reimbursement for travel and related
expenses incurred in attending meetings of the Directors and no such Director
shall be deemed an Independent Director for purposes of satisfying the Director
independence requirement set forth in the Articles of Incorporation.

 

10

 

10.          ADVISORY
FEE.

 

(a)           The Advisor is not entitled
to acquisition, disposition or financing fees.

 

(b)           The Advisor shall receive
the Advisory Fee as compensation for services rendered hereunder. The Advisory
Fee will be calculated using a detailed policy approved by the Board, including
a majority of the Independent Directors, and agreed to by the Advisor, which
shall be consistent with the description of the calculation of the Advisory Fee
as set forth herein.  The Advisory Fee
will be comprised of two separate components: (1) a fixed component in an
amount equal to 1/365th of 1.1% of NAV for each day (the “Fixed
Component”), subject to reduction in accordance with Section 10(c) below,
and (2) a performance component (the “Performance Component”) that
is paid annually and calculated based on the Annual Total Return.

 

(c)           The amount of the Fixed
Component that accrues each day shall be reduced by up to 1/365th of 0.20% of NAV for such day, to the extent
and in the same amount that the daily accrual of the Distribution Fee for such
day is increased with respect to that portion of the overall NAV represented by
Shares held by a Participating Broker-Dealer that meets certain thresholds of
Shares under management.  In all cases,
the aggregate of the daily accrual of the Fixed Component and the Distribution
Fee will total 1/365th of 1.60% of NAV for each day.

 

(d)           The Performance Component
will not be paid for any calendar year in which the Annual Total Return
expressed as a percentage is less than or equal to 6.0% (the “Priority
Return Percentage”). The dollar amount of the Performance Component will
equal 25.0% of the difference between (i) the Annual Total Return and (ii) the
amount required to provide Stockholders an Annual Total Return equal to the
Priority Return Percentage. In no event will the Performance Component exceed
10.0% of the Annual Total Return for any calendar year.  In the event NAV per share decreases below
$10.00 on any day during the measurement period, any increase in NAV per share
to $10.00 shall not be included in the calculation of the Performance
Component.  If the Performance Component
is payable pursuant to this Section 10(d), the Advisor will be entitled to
such payment even in the event that the Annual Total Return to Stockholders (or
any particular Stockholder) expressed as a percentage on a cumulative basis
over any longer or shorter period has been less than the Priority Return
Percentage. The Advisor shall not be obligated to return any portion of any
Advisory Fee paid based on the Company’s subsequent performance.

 

(e)           The Advisor shall, on a
daily basis, (i) accrue a liability reserve account equal to the amount
due for both the Fixed Component and the Performance Component, such accrual to
be reflected in the NAV per share calculation for such day; and (ii) calculate
the Annual Total Return, prorated as of the end of such day and, based on such
calculation, adjust the balance of liability reserve accrual to reflect the
estimated amount due on account of the Performance Component.

 

(f)            The Advisory Fee will accrue
daily and is payable in cash. The Fixed Component is payable monthly in arrears
(after the close of business and NAV calculations for the last Business Day for
such month), the Performance Component is payable promptly after the audited
financial statements for each calendar year become available, provided that if
this Agreement or its term expires without renewal prior to December 31 of
any calendar year, then the Performance Component for such partial year shall
be payable promptly after the Company files its unaudicted financial statements
on Form 10-Q for the quarter that includes the Termination Date.  The Performance Component shall be payable
for each calendar year in which this Agreement is in effect, even if the Agreement
is in effect for less than a full calendar year.  In the event this Agreement is terminated or
its term expires without renewal, the Advisory Fee will be calculated and due
and payable after the calculation of NAV on the Termination Date. If the Advisory
Fee is payable with respect to any partial calendar month or calendar year, the
Fixed 

 

11

 

Component
will be prorated based on the number of days elapsed during any partial
calendar month and the Performance Component will be prorated based on the
number of days elapsed during and Annual Total Return achieved for the period
of such partial calendar year.

 

(g)           In the event the Company or
the Operating Partnership commences a liquidation of its Investments during any
calendar year, the Company will pay the Advisor its Advisory Fee from the
proceeds of the liquidation and the performance component of the Advisory Fee
will be calculated at the end of the liquidation period prior to the
distribution of the liquidation proceeds to the Stockholders.

 

(h)           In lieu of cash, the Advisor
may elect to receive the payment of any of its fees in Shares.  Any such Shares will be valued at the Company’s
NAV per Share on the issue date and will not be eligible for redemption by the
Advisor until six months from the issue date.

 

11.          EXPENSES.

 

(a)           As required by the NASAA
REIT Guidelines, the cumulative Selling Commissions, Dealer Manager Fees,
Distribution Fees and Organizational and Offering Expenses paid by the Company
will not exceed 15.0% of Gross Proceeds from the sale of Shares in the Primary
Offering.

 

(b)           In addition to the
compensation paid to the Advisor pursuant to Section 10 hereof, the
Company or the Operating Partnership shall pay directly or reimburse the Advisor
for all of the expenses paid or incurred by the Advisor in connection with the
services it provides to the Company and the Operating Partnership pursuant to
this Agreement, including, but not limited to:

 

(i)            Organizational
and Offering Expenses; provided that within 60 days after the end of the
month in which an Offering terminates, the Advisor shall reimburse the Company
to the extent the Organizational and Offering Expenses, Selling Commissions,
Dealer Manager Fees and Distribution Fees borne by the Company exceed 15.0% of
the Gross Proceeds raised in the completed Offering;

 

(ii)           Acquisition
Expenses incurred in connection with the selection and acquisition of
Investments, including such expenses incurred related to assets pursued or
considered but not ultimately acquired by the Company, subject to limitations
set forth in the Articles of Incorporation;

 

(iii)          the actual cost
of goods and services used by the Company and obtained from entities not
affiliated with the Advisor;

 

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

 

(v)           taxes and
assessments on income of the Company or Investments, taxes as an expense of
doing business and any other taxes otherwise imposed on the Company and its
business, assets or income;

 

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

 

(vii)         expenses of
managing, improving, developing, operating and selling Investments, whether
payable to an Affiliate of the Company or a non-affiliated Person;

 

12

 

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

 

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

 

(x)            expenses of
organizing, redomesticating, merging, liquidating or dissolving the Company or
of amending the Articles of Incorporation or the Bylaws;

 

(xi)           expenses of
providing services for and maintaining communications with Stockholders,
including the cost of preparation, printing, and mailing annual reports and
other Stockholder reports, proxy statements and other reports required by
governmental entities;

 

(xii)          administrative
service expenses, including but not limited to personnel and related employment
costs incurred by the Advisor or its Affiliates in performing the services
described in Section 3 hereof, including but not limited to reasonable
salaries, bonuses and wages, benefits and overhead of all individuals whose
primary job function relates to the Company’s business, provided that no
reimbursement shall be made for costs of such employees of the Advisor or its
Affiliates to the extent that such employees perform services for which the
Advisor receives a separate fee and provided further that in the event that
personnel costs are reimbursed for individuals who serve as executive officers
of the Company, the Advisor shall cause the Company to include disclosures of
the amount of such costs in its next quarterly or annual report filed with the
Securities and Exchange Commission; and

 

(xiii)         audit,
accounting and legal fees and other fees for professional services relating to
the operations of the Company and all such fees incurred at the request, or on
behalf of, the Board, the Independent Directors or any committee of the Board.

 

(c)           Expenses incurred by the
Advisor on behalf of the Company and the Operating Partnership and payable
pursuant to this Section 11 shall be reimbursed no less than monthly to
the Advisor. The Advisor shall prepare a statement documenting the expenses of
the Company and the Operating Partnership and the calculation of the Advisory
Fee during each quarter, and shall deliver such statement to the Company and
the Operating Partnership within forty-five (45) days after the end of
each quarter.

 

(d)           In lieu of cash, the Advisor
may elect to receive the reimbursement of any of its expenses in Shares.  Any such Shares will be valued at the Company’s
NAV per Share on the issue date and will not be eligible for redemption by the
Advisor until six months from the issue date.

 

12.          OTHER SERVICES. Should the
Board request that the Advisor or any director, officer or employee thereof
render services for the Company and the Operating Partnership other than set
forth in Section 3, such services shall be separately compensated at such
rates and in such amounts as are agreed by the Advisor and the Independent
Directors, subject to the limitations contained in the Articles of
Incorporation, and shall not be deemed to be services pursuant to the terms of
this Agreement.

 

13.          REIMBURSEMENT TO THE
ADVISOR. The Company shall not reimburse the Advisor at the
end of any fiscal quarter for Total Operating Expenses that in the four
consecutive fiscal quarters then ended (the “Expense Year”) exceeded
(the “Excess Amount”) the greater of 2.0% of Average Invested Assets or
25.0% of Net Income (the “2%/25% Guidelines”) for such year unless the
Independent Directors determine that such excess was justified, based on
unusual and nonrecurring 

 

13

 

factors
that the Independent Directors deem sufficient. If the Independent Directors do
not approve such excess as being so justified, any Excess Amount paid to the
Advisor during a fiscal quarter shall be repaid to the Company. If the
Independent Directors determine such excess was justified, then, within sixty
(60) days after the end of any fiscal quarter of the Company for which
total reimbursed Total Operating Expenses for the Expense Year exceed the
2%/25% Guidelines, the Advisor, at the direction of the Independent Directors,
shall cause such fact to be disclosed to the Stockholders in writing (or the
Company shall disclose such fact to the Stockholders in the next quarterly
report of the Company or by filing a Current Report on Form 8-K with the
Securities and Exchange Commission within sixty (60) days of such quarter
end), together with an explanation of the factors the Independent Directors
considered in determining that such excess were justified. The Company will
ensure that such determination will be reflected in the minutes of the meetings
of the Board. All figures used in the foregoing computations shall be
determined in accordance with GAAP applied on a consistent basis.

 

14.          OTHER
ACTIVITIES OF THE ADVISOR.

 

(a)           Relationship. Nothing
herein contained shall prevent the Advisor or any of its Affiliates from
engaging in or earning fees from other activities, including, without
limitation, the rendering of advice to other Persons (including other REITs)
and the management of other programs advised, sponsored or organized by the
Advisor or its Affiliates; nor shall this Agreement limit or restrict the right
of any director, officer, member, partner, employee, or stockholder of the
Advisor or its Affiliates to engage in or earn fees from any other business or
to render services of any kind to any other partnership, corporation, firm,
individual, trust or association and earn fees for rendering such services. The
Advisor may, with respect to any investment in which the Company is a
participant, also render advice and service to each and every other participant
therein, and earn fees for rendering such advice and service. Specifically, it
is contemplated that the Company may enter into joint ventures or other similar
co-investment arrangements with certain Persons, and pursuant to the agreements
governing such joint ventures or arrangements, the Advisor may be engaged to
provide advice and service to such Persons, in which case the Advisor will earn
fees for rendering such advice and service.

 

(b)           Time
Commitment. The Advisor shall, and shall cause its Affiliates
and their respective employees, officers and agents to, devote to the Company
such time as shall be reasonably necessary to conduct the business and affairs
of the Company in an appropriate manner consistent with the terms of this
Agreement. The Company acknowledges that the Advisor and its Affiliates and
their respective employees, officers and agents may also engage in activities
unrelated to the Company and may provide services to Persons other than the
Company or any of its Affiliates.

 

(c)           Investment
Opportunities. The Advisor shall use its best efforts to present
to the Company and the Operating Partnership a number of potential investment
opportunities appropriate for the portfolio of the Company and the Operating
Partnership consistent with the investment policies and objectives of the
Company, but neither the Advisor nor any Affiliate of the Advisor shall be
obligated generally to present any particular investment opportunity to the
Company or the Operating Partnership even if the opportunity is of a character
that, if presented to the Company or the Operating Partnership, could be taken
by the Company or the Operating Partnership. In the event an investment
opportunity is located, the allocation procedure set forth under the caption “Conflicts
of Interest — Certain Conflict Resolution Measures — Allocation of Investment
Opportunities” in the Prospectus shall govern the allocation of the opportunity
among the Company and the Operating Partnership, on the one hand, and
Affiliates of the Advisor, on the other hand; provided any changes to the
procedure shall be presented in advance and approved by the Board, including a
majority of the Independent Directors.

 

15.          RELATIONSHIP OF THE PARTIES.
The Company and the Operating Partnership, on the one hand, and the
Advisor on the other, are not partners or joint venturers with each other, and 

 

14

 

nothing
in this Agreement shall be construed to make them such partners or joint
venturers or impose any liability as such on either of them.

 

16.          THE
CLARION NAME.  The Advisor and its Affiliates have a
proprietary interest in the name “Clarion.” 
The Advisor hereby grants to the Company a non-transferable,
non-assignable, non-exclusive, royalty-free right and license to use the name “Clarion”
during the term of this Agreement. 
Accordingly, and in recognition of this right, if at any time the
Company ceases to retain the Advisor or one of its Affiliates to perform
advisory services for the Company, the Company will, promptly after receipt of
written request from the Advisor, cease to conduct business under or use the
name “Clarion” or any derivative thereof and the Company shall change its name
and the names of any of its subsidiaries to a name that does not contain the
name “Clarion” or any other word or words that might, in the reasonable
discretion of the Advisor, be susceptible of indication of some form of
relationship between the Company and the Advisor or any of its Affiliates.  At such time, the Company will also make any
changes to any trademarks, servicemarks or other marks necessary to remove any
references to the word “Clarion.” Consistent with the foregoing, it is
specifically recognized that the Advisor or one or more of its Affiliates has
in the past and may in the future organize, sponsor or otherwise permit to
exist other investment vehicles (including vehicles for investment in Real
Property and Real Estate Related Assets) and financial and service
organizations having “Clarion” as a part of their name, all without the need
for any consent (and without the right to object thereto) by the Company.

 

17.          TERM OF AGREEMENT. This Agreement
shall continue in force for a period of one year from the Effective Date,
subject to an unlimited number of successive one-year renewals upon mutual
consent of the parties. It is the duty of the Directors to evaluate the
performance of the Advisor annually before renewing the Agreement, and each
such renewal shall be for a term of no more than one year.

 

18.          TERMINATION BY THE PARTIES. This Agreement
may be terminated (i) immediately by the Company or the Operating
Partnership for Cause or upon the bankruptcy of the Advisor or upon a material
breach of this Agreement by the Advisor; provided, that such material breach is
not capable of being cured or has not been cured within thirty (30) days
after the giving of notice thereof by the Company or the Operating Partnership
to the Advisor; (ii) upon sixty (60) days’ written notice without
Cause or penalty by a majority vote of the Independent Directors; or (iii) upon
sixty (60) days’ written notice by the Advisor. The provisions of
Sections 16 and 20 through 32 survive termination of this Agreement.

 

19.          ASSIGNMENT TO AN AFFILIATE. This Agreement
may be assigned by the Advisor to an Affiliate with the approval of a majority
of the Directors (including a majority of the Independent Directors). The
Advisor may assign any rights to receive fees or other payments under this
Agreement to any Person without obtaining the approval of the Directors. This
Agreement shall not be assigned by the Company or the Operating Partnership
without the consent of the Advisor, except in the case of an assignment by the
Company or the Operating Partnership to a corporation, limited partnership or
other organization which is a successor to all of the assets, rights and
obligations of the Company or the Operating Partnership, in which case such
successor organization shall be bound hereunder and by the terms of said
assignment in the same manner as the Company and the Operating Partnership are
bound by this Agreement.

 

20.          PAYMENTS TO
AND DUTIES OF ADVISOR UPON TERMINATION.

 

(a)           After the Termination Date,
the Advisor shall not be entitled to compensation for further services
hereunder except it shall be entitled to receive from the Company or the
Operating Partnership within thirty (30) days after the effective date of
such termination all unpaid reimbursements of expenses 

 

15

 

and
all earned but unpaid fees payable to the Advisor prior to termination of this
Agreement, subject to the 2%/25% Guidelines to the extent applicable.

 

(b)           The Advisor shall promptly
upon termination:

 

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

 

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

 

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

 

(iv)          cooperate with
the Company and the Operating Partnership to provide an orderly management
transition.

 

21.          INDEMNIFICATION BY THE
COMPANY AND THE OPERATING PARTNERSHIP. The Company and the
Operating Partnership shall indemnify and hold harmless the Advisor and its
Affiliates, including their respective officers, directors, partners and
employees (the “Indemnitees,” and each an “Indemnitee”), from all
liability, claims, damages or losses arising in the performance of their duties
hereunder, and related expenses, including reasonable attorneys’ fees, to the
extent such liability, claims, damages or losses and related expenses are not
fully reimbursed by insurance, and to the extent that such indemnification
would not be inconsistent with the laws of the State of Maryland, the Articles
of Incorporation or the provisions of Section II.G of the NASAA REIT
Guidelines.

 

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

 

23.          NON-SOLICITATION. During the
period commencing on the Effective Date and ending one year following the
Termination Date, the Company shall not, without the Advisor’s prior written
consent, directly or indirectly, (i) solicit or encourage any person to
leave the employment or other service of the Advisor or its Affiliates, or (ii) hire,
on behalf of the Company or any other person or entity, any person who has left
the employment within the one year period following the termination of that
person’s employment the Advisor or its Affiliates. During the period commencing
on the date hereof through and ending one year following the Termination Date,
the Company will not, whether for its own account or for the account of any
other Person, intentionally interfere with the relationship of the Advisor or
its Affiliates with, or endeavor to entice away from the Advisor or its
Affiliates, any person who during the term of the Agreement is, or during the
preceding one-year period, was a tenant, co-investor, co-developer, joint
venturer or other customer of the Advisor or its Affiliates.

 

16

 

24.          MISCELLANEOUS.

 

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

 

	
  To
  the Company:

  	
  Clarion
  Property Trust Inc.

  230 Park Avenue

  New York, NY 10169

  
	
   

  	
  Attention:
  

  	
  Edward
  L. Carey, Co-President

  
	
   

  	
   

  	
  Douglas
  L. DuMond, Co-President

  
	
   

  	
   

  	
   

  
	
  To
  the Operating Partnership:

  	
  Clarion
  Property Trust Operating Partnership LP

  230 Park Avenue

  New York, NY 10169

  
	
   

  	
  Attention:
  

  	
  Edward
  L. Carey, Co-President, Clarion

  
	
   

  	
   

  	
  Property
  Trust Inc.

  
	
   

  	
   

  	
  Douglas
  L. DuMond, Co-President,

  
	
   

  	
   

  	
  Clarion
  Property Trust Inc.

  
	
   

  	
   

  	
   

  
	
  To
  the Advisor:

  	
  CPT
  Advisors LLC

  230 Park Avenue

  New York, NY 10169

  
	
   

  	
  Attention:
  

  	
  Edward
  L. Carey, Co-President

  
	
   

  	
   

  	
  Douglas
  L. DuMond, Co-President

  

 

Any
party may at any time give notice in writing to the other parties of a change
in its address for the purposes of this Section 24.

 

(b)           Modification.  This Agreement shall not be
changed, modified, terminated, or discharged, in whole or in part, except by an
instrument in writing signed by the parties hereto, or their respective
successors or assignees.

 

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

 

(d)           Construction.  The provisions of this
Agreement shall be construed and interpreted in accordance with the laws of the
State of New York without regard to the conflicts-of-law principles that would
require the application of any other law.

 

(e)           Entire Agreement.   This Agreement contains the
entire agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof.
The express terms hereof control and supersede any course of performance or
usage of the trade inconsistent with any of the terms hereof.

 

17

 

(f)            Indulgences, Not Waivers.  Neither the failure nor any delay on the part of a party to exercise
any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege preclude any other or further exercise of the same or of any
other right, remedy, power or privilege, nor shall any waiver of any right, remedy,
power or privilege with respect to any occurrence be construed as a waiver of
such right, remedy, power or privilege with respect to any other occurrence. No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

 

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

 

(h)           Titles Not to Affect
Interpretation.  The titles of
Sections and Subsections contained in this Agreement are for convenience only,
and they neither form a part of this Agreement nor are they to be used in the
construction or interpretation hereof.

 

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

 

[Remainder of page intentionally
left blank]

 

18

 

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

 

	
   

  	
  Clarion Property Trust Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Clarion Property Trust Operating Partnership LP

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Clarion Property Trust Inc.,

  
	
   

  	
   

  	
  Its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CPT Advisors LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  ING Clarion Partners LLC,

  
	
   

  	
   

  	
  Its member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

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