Document:

ex10-1.htm

 Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the “Agreement”) is made effective as of January 1, 2011 (the “Effective Date”), by and between Beacon Federal, a federally chartered savings association with its principal office in East Syracuse, New York (the “Bank”) and Lisa Jones (“Executive”).

 

WHEREAS, Executive has been serving as Vice President, Principal Financial and Accounting Officer of the Bank and the Executive currently has a Change in Control Agreement with the Bank dated as of October 1, 2007 (as amended in March, 2010) (the “Prior Agreement”); and

 

WHEREAS, the Bank wishes to change the Executive’s title, effective January 1, 2011, to “Senior Vice President, Chief Financial Officer,” and wishes to replace the Prior Agreement with this Agreement, also effective January 1, 2011.

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained, and upon the terms and conditions hereinafter provided, the parties hereby agree that the Prior Agreement is terminated and is replaced with this Agreement, effective January 1, 2011, as set forth below:

 

1.             POSITION AND RESPONSIBILITIES.

 

During the term of this Agreement, Executive shall serve as Senior Vice President and Chief Financial Officer of the Bank.  Executive shall be responsible for the financial reporting and disclosure obligations of the Bank and Beacon Federal Bancorp, Inc. (the “Company”), which owns 100% of the Bank, as well as other duties assigned to the Executive.  Executive shall directly report to the Chief Executive Officer.

 

2.             TERM AND DUTIES.

 

(a)           Two Year Contract; Annual Renewal. The term of Executive’s employment under this Agreement shall commence as of the Effective Date and shall continue thereafter for a period of two (2) years.  Commencing on the first anniversary date of this Agreement (the “Anniversary Date”) and continuing on each Anniversary Date thereafter, the term of this Agreement shall renew for an additional year such that the remaining term of this Agreement is always two (2) years, unless written notice of non-renewal (a “Non-Renewal Notice”) is provided to Executive at least thirty (30) days and not more than sixty (60) days prior to such Anniversary Date, in which case the term of this Agreement shall become fixed and shall end three (3) years following such Anniversary Date.  The Chief Executive Officer will conduct a performance evaluation and review of Executive annually for purposes of determining whether to give notice not to extend the term of this Agreement, and the results thereof shall be included in the minutes of the next Board meeting.

(b)           Termination of Agreement.  Notwithstanding anything contained in this Agreement to the contrary, either Executive or the Bank may terminate Executive’s employment with the Bank at any time during the term of this Agreement, subject to the terms and conditions of this Agreement.

 

  

  

  

 

(c)      Continued Employment Following Expiration of Term.  Nothing in this Agreement shall mandate or prohibit a continuation of Executive’s employment following the expiration of the term of this Agreement, upon such terms and conditions as the Bank and Executive may mutually agree.

(d)      Duties; Membership on Other Boards.  During the term of this Agreement, except for periods of absence occasioned by illness, reasonable vacation periods, and reasonable leaves of absence approved by the Board, Executive shall devote substantially all of Executive’s business time, attention, skill, and efforts to the faithful performance of Executive’s duties hereunder; provided, however, that, with the prior approval of the Chief Executive Officer,  Executive may serve, or continue to serve, on the boards of directors of, and hold any other offices or positions in, business companies or business organizations, which, in the Chief Executive Officer’s judgment, will not present any conflict of interest with the Bank, or materially affect the performance of Executive’s duties pursuant to this Agreement.  Executive shall provide the Chief Executive Officer annually for his approval a list of organizations for which the Executive acts as a director or officer.

 

3.             COMPENSATION, BENEFITS AND REIMBURSEMENT.

 

(a)  Base Salary.  In consideration of Executive’s performance of the duties set forth in Section 2, the Bank shall provide Executive the compensation specified in this Agreement.  The Bank shall pay Executive a salary of $180,000 per year (“Base Salary”). The Base Salary shall be payable biweekly, or with such other frequency as officers of the Bank are generally paid. During the term of this Agreement, the Base Salary shall be reviewed at least annually by the Chief Executive Officer, and the Bank may increase, but not decrease (except for a decrease that is generally applicable to all employees) Executive’s Base Salary. Any increase in Base Salary shall become “Base Salary” for purposes of this Agreement.

 

(b)  Bonus and Incentive Compensation.  Executive shall be entitled to incentive compensation and bonuses as provided in any plan or arrangement of the Bank in which Executive is eligible to participate.  Nothing paid to Executive under any such plan or arrangement will be deemed to be in lieu of other compensation to which Executive is entitled under this Agreement.

 

(c)  Employee Benefits.  The Bank shall provide Executive with employee benefit plans, arrangements and perquisites substantially equivalent to those in which Executive was participating or from which Executive was deriving benefit immediately prior to the commencement of the term of this Agreement, and the Bank shall not, without Executive’s prior written consent, make any changes in such plans, arrangements or perquisites that would adversely affect Executive’s rights or benefits thereunder, except as to any changes that are applicable to all participating employees or as reasonably or customarily available.  Without limiting the generality of the foregoing provisions of this Section 3(c), Executive will be entitled to participate in or receive benefits under any employee benefit plans including, but not limited to, retirement plans, supplemental retirement plans, pension plans, profit-sharing plans, health-and-accident insurance plans, medical coverage or any other employee benefit plan or arrangement made available by the Bank in the future to its senior executives, including any stock benefit plans, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and arrangements.

 

  

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(d)  Paid Time Off.  Executive shall be entitled to paid vacation time each year during the term of this Agreement (measured on a fiscal or calendar year basis, in accordance with the Bank’s usual practices), as well as sick leave, holidays and other paid absences in accordance with the Bank’s policies and procedures for senior executives.  Any unused paid time off during an annual period shall be treated in accordance with the Bank’s personnel policies as in effect from time to time.

 

(e)  Expense Reimbursements.  During the term of this Agreement, the Bank shall pay Executive $650 per month for the full cost of the use of an automobile that is mutually agreeable to the Bank and Executive.  During the term of this Agreement, the Bank shall pay or reimburse Executive for all reasonable travel, entertainment and other reasonable expenses incurred by Executive during the course of performing Executive’s obligations under this Agreement, including, without limitation, fees for memberships in such clubs and organizations as Executive and the Chief Executive Officer shall mutually agree are necessary and appropriate in connection with the performance of Executive’s duties under this Agreement, upon presentation to the Bank of an itemized account of such expenses in such form as the Bank may reasonably require.

 

4.             PAYMENTS TO EXECUTIVE UPON AN EVENT OF TERMINATION.

 

(a)  Upon the occurrence of an Event of Termination (as herein defined) during the term of this Agreement, the provisions of this Section 4 shall apply; provided, however, that benefits shall be provided either under Section 4 or Section 5 (related to a Change in Control), but not both, such that to the extent the Executive has received payments under one of those Sections, the Executive shall not receive payments under the other of those Sections. As used in this Agreement, an “Event of Termination’’ shall mean and include any one or more of the following:

 

  (i)            the termination by the Bank of Executive’s full-time employment hereunder for any reason other than a “Change in Control,” as defined in Section 5, a termination for death or “Disability,” as set forth in Section 6, a termination upon “Retirement,” as defined in Section 7, or a termination for “Cause,” as defined in Section 8; and

 

   (ii)           Executive’s resignation from the Bank’s employ upon any of the following, unless consented to by Executive:

 

  (A)           failure to appoint Executive to the position set forth in Section 1, or a material change in Executive’s function, duties, or responsibilities, which change would cause Executive’s position to become one of lesser responsibility, importance, or scope from the position and responsibilities described in Section 1, to which Executive has not agreed in writing (and any such material change shall be deemed a continuing breach of this Agreement by the Bank);

 

  (B)           a relocation of Executive’s principal place of employment to a location that is more than 50 miles from the location of the Bank’s principal executive offices as of the date of this Agreement;

 

  

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  (C)           a material reduction in the benefits and perquisites, including Base Salary, to Executive from those being provided as of the Effective Date (except for any reduction that is part of a reduction in pay or benefits that is generally applicable to officers or employees of the Bank);

 

  (D)           a liquidation or dissolution of the Bank; or

 

  (E)            a material breach of this Agreement by the Bank.

 

Upon the occurrence of any event described in clause (ii) above, Executive shall have the right to elect to terminate employment under this Agreement by resignation upon not less than 30 days prior written notice given within a reasonable period of time (not to exceed, except in case of a continuing breach, 90 days) after the event giving rise to the right to elect, which termination by Executive shall be an Event of Termination; provided, however, that the Bank shall have at least 30 days to remedy the situation.  No payments or benefits shall be due to Executive under this Agreement upon the termination of Executive’s employment except as provided in Section 4 or 5.

 

(b)  Upon the occurrence of an Event of Termination, the Bank shall pay Executive, or, in the event of Executive’s subsequent death, Executive’s beneficiary or beneficiaries or estate, as the case may be, as severance pay or liquidated damages, or both, a lump sum in cash equal to two times the sum of (i) the highest annual rate of Base Salary paid to Executive at any time under this Agreement, plus (ii) the highest bonus paid to Executive with respect to the two completed fiscal years prior to the Event of Termination.  Such payments shall not be reduced in the event Executive obtains other employment following the Event of Termination. Notwithstanding the foregoing, in the event Executive is a “Specified Employee” (as defined in Internal Revenue Code (“Code”) Section 409A), then, to the extent necessary to comply with Code Section 409A, no payment shall be made to Executive prior to the first day of the seventh month following the Event of Termination.

 

(c)  Upon the occurrence of an Event of Termination, the Bank shall provide at the Bank’s expense, life insurance coverage and non-taxable medical and dental coverage substantially comparable to the coverage maintained by the Bank for Executive prior to the Event of Termination, except to the extent such coverage may be changed in its application to all Bank employees.  Such coverage shall cease twenty-four (24) months following the Event of Termination. The period for group health care continuation coverage rights under COBRA shall not begin until the expiration of such twenty-four (24) month period.

 

5.             CHANGE IN CONTROL.

 

(a)  Any payment made to Executive pursuant to this Section 5 is in lieu of any payments that may otherwise be owed to Executive pursuant to Section 4, such that Executive shall either receive payments pursuant to Section 4 or pursuant to Section 5, but not pursuant to both Sections.

 

(b)  Except for payments that are subject to Code Section 409A, for purposes of this Agreement, the term “Change in Control” shall mean, any of the following:

 

  

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   (i)            a change in control of a nature that would be required to be reported in response to Item 5.01(a) of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”); or

 

   (ii)           a change in control of the Bank within the meaning of the Home Owners’ Loan Act, as amended (“HOLA”), and applicable rules and regulations promulgated thereunder, as in effect at the time of the Change in Control; or

 

   (iii)           any of the following events, upon which a Change in Control shall be deemed to have occurred:

 

  (A)           any “person” (as the term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Bank or the Bank’s holding company representing 25% or more of the combined voting power of such outstanding securities, except for any securities purchased by any employee stock ownership plan or trust established by the Bank; or

 

  (B)           individuals who constitute the Board on the Effective Date (the “Incumbent Board”) cease for any reason to constitute at least a majority thereof, provided that any person becoming a director subsequent to the Effective Date whose election was approved by a vote of at least three-quarters of the directors comprising the Incumbent Board, or whose nomination for election by stockholders of the Bank or the Bank’s holding company was approved by the same Nominating Committee serving under an Incumbent Board, shall be, for purposes of this subsection (B), considered as though they were members of the Incumbent Board; or

 

  (C)           a sale of all or substantially all the assets of the Bank or the Bank’s holding company, or a plan of reorganization, merger, consolidation, or similar transaction occurs in which the security holders of the Bank or the Bank’s holding company immediately prior to the consummation of the transaction do not own at least 50.1% of the securities of the surviving entity to be outstanding upon consummation of the transaction; or

 

  (D)           a proxy statement is issued soliciting proxies from stockholders of the Bank or the Bank’s holding company by someone other than the current management of the Bank or the holding company of the Bank, seeking stockholder approval of a plan of reorganization, merger or consolidation of the Bank or the Bank’s holding company, or similar transaction with one or more corporations as a result of which the outstanding shares of the class of securities then subject to the plan are to be exchanged for or converted into cash or property or securities not issued by the Bank or the Bank’s holding company; or

 

  (E)            a tender offer is made for 25% or more of the voting securities of the Bank or the Bank’s holding company, and stockholders owning beneficially or of record 25% or more of the outstanding securities of the Bank or the Bank’s holding company have tendered or offered to sell their shares pursuant to such tender offer and such tendered shares have been accepted by the tender offeror.

 

  

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(c)  With respect to any payments hereunder that are subject to Code Section 409A, “Change in Control” shall mean (i) a change in the ownership of the Bank or the Bank’s holding company, (ii) a change in the effective control of the Bank or the Bank’s holding company, or (iii) a change in the ownership of a substantial portion of the assets of the Bank or the Bank’s holding company, as described below:

 

   (i)            A change in ownership occurs on the date that any one person, or more than one person acting as a group (as defined in Treasury Regulations section 1.409A-3(i)(5)(v)(B)), acquires ownership of stock of the Bank or the Bank’s holding company that, together with stock held by such person or group, constitutes more than 50% of the total fair market value or total voting power of the stock of the Bank or the Bank’s holding company.

 

  (ii)            A change in the effective control of the Bank or the Bank’s holding company occurs on the date that either (i) any one person, or more than one person acting as a group (as defined in Treasury Regulations section 1.409A-3(i)(5)(vi)(B)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Bank or the Bank’s holding company possessing 30% or more of the total voting power of the stock of the Bank or the Bank’s holding company, or (ii) a majority of the members of the Bank’s or the Bank’s holding company’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Bank’s or the Bank’s holding company’s board of directors prior to the date of the appointment or election, provided that this subsection 9(b)(2) is inapplicable where a majority shareholder of the Bank or the Bank’s holding company is another corporation.

 

  (iii)           A change in a substantial portion of the Bank’s or the Bank’s holding company’s assets occurs on the date that any one person or more than one person acting as a group (as defined in Treasury Regulations section 1.409A-3(i)(5)(vii)(C)) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Bank or the Bank’s holding company that have a total gross fair market value equal to or more than 40% of the total gross fair market value of (i) all of the assets of the Bank or the Bank’s holding company, or (ii) the value of the assets being disposed of, either of which is determined without regard to any liabilities associated with such assets.  For all purposes of this subsection 5(c), the definition of Change in Control shall be construed to be consistent with the requirements of Treasury Regulations section 1.409A-3(i)(5), except to the extent that such proposed regulations are superseded by subsequent guidance.

 

(d)  Upon the occurrence of a Change in Control, Executive, or, in the event of Executive’s death following a Change in Control, Executive’s beneficiary or beneficiaries estate, as the case may be, shall receive as severance pay or liquidated damages, or both, a lump sum cash payment equal to two times the sum of (i) Executive’s highest annual rate of Base Salary paid to Executive at any time under this Agreement, plus (ii) the highest bonus paid to Executive with respect to the two completed fiscal years prior to the Change in Control.

 

  

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(e)  Upon the termination of Executive’s employment (other than for Cause) following a Change in Control, the Bank shall provide at the Bank’s expense, life insurance coverage and non-taxable medical and dental coverage substantially comparable to the coverage maintained by the Bank for Executive prior to Executive’s termination, except to the extent such coverage may be changed in its application to all Bank employees.  Such coverage shall cease twenty-four (24) months following the termination of Executive’s employment.  The period for group health care continuation coverage rights under COBRA shall not begin until the expiration of such twenty-four (24) month period.

 

(f)  Notwithstanding the preceding paragraphs of this Section 5, in the event that the aggregate payments or benefits to be made or afforded to Executive in the event of a Change in Control would be deemed to include an “excess parachute payment” under Code Section 280G or any successor thereto, then at the election of Executive, (i) such payments or benefits shall be payable or provided to Executive over the minimum period necessary to reduce the present value of such payments or benefits to an amount that is one dollar ($1.00) less than three times Executive’s “base amount” under such Code Section 280G, or (ii) the payments or benefits to be provided under this Section 5 shall be reduced to the extent necessary to avoid treatment as an excess parachute payment, with the allocation of the reduction among such payments and benefits to be determined by Executive.

 

6.             TERMINATION FOR DISABILITY OR DEATH.

 

(a)  Termination of Executive’s employment based on “Disability” shall be construed to comply with Code Section 409A and shall be deemed to have occurred if: (i) Executive is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than 12 months; (ii) by reason of any medically determinable physical or mental impairment that can be expected to result in death, or last for a continuous period of not less than 12 months, Executive is receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Bank or the Bank’s holding company; or (iii) Executive is determined to be totally disabled by the Social Security Administration. The provisions of Sections 6(b) and (c) shall apply upon the termination of the Executive’s employment based on Disability.

 

(b)  Executive shall be entitled to receive benefits under any short- or long-term disability plan maintained by the Bank.  To the extent such taxable or non-taxable benefits are less than Executive’s after-tax or pre-tax Base Salary (respectively), the Bank shall pay Executive an amount equal to the difference between such disability plan benefits and the amount of Executive’s Base Salary for the longer of (i) the remaining term of this Agreement, or (ii) one year following the termination of employment due to Disability.

 

(c)  The Bank shall cause to be continued life insurance coverage and non-taxable medical and dental coverage substantially comparable to the coverage maintained by the Bank for Executive prior to the termination of employment based on Disability, except to the extent such coverage may be changed in its application to all Bank employees or not available on an individual basis to an employee terminated based on Disability.  This coverage shall cease upon the earlier of (i) the date Executive returns to the full-time employment of the Bank; (ii) Executive’s full-time employment by another employer; (iii) Executive attaining the age of 65; or (iv) Executive’s death.

 

  

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(d)      In the event of Executive’s death during the term of this Agreement, Executive’s estate, legal representatives or named beneficiaries (as directed by Executive in writing) shall be paid Executive’s Base Salary at the rate in effect at the time of Executive’s death for a period of one (1) year from the date of Executive’s death, and the Bank shall continue to provide non-taxable medical, dental and other insurance benefits normally provided for Executive’s family (in accordance with its customary co-pay percentages) for one (1) year after Executive’s death.  Such payments are in addition to any other life insurance benefits that Executive’s beneficiaries may be entitled to receive under any employee benefit plan maintained by the Bank for the benefit of Executive.

 

7.             TERMINATION UPON RETIREMENT.

 

Termination of Executive’s employment based on “Retirement” shall mean termination of Executive’s employment at any time after Executive reaches age 65 or in accordance with any retirement policy established by the Board with Executive’s consent with respect to the Executive.  Upon termination of Executive based on Retirement, no amounts or benefits shall be due Executive under this Agreement, and Executive shall be entitled to all benefits under any retirement plan of the Bank and other plans to which Executive is a party.

 

8.             TERMINATION FOR CAUSE.

 

(a)      The Bank may terminate Executive’s employment at any time, but any termination other than termination for “Cause,” as defined herein, shall not prejudice Executive’s right to compensation or other benefits under this Agreement.  Executive shall have no right to receive compensation or other benefits for any period after termination for “Cause.”  Termination for “Cause” shall mean termination because of Executive’s personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, material breach of the Bank’s Code of Ethics, material violation of the Sarbanes-Oxley requirements for officers of public companies, if applicable, that in the reasonable opinion of the Chief Executive Officer will likely cause substantial financial harm or substantial injury to the reputation of the Bank of any holding company of the Bank, willfully engaging in actions that in the reasonable opinion of the Chief Executive Officer will likely cause substantial financial harm or substantial injury to the business reputation of the Bank, intentional failure to perform stated duties, willful violation of any law, rule or regulation (other than routine traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of this Agreement.

(b)      For purposes of this Section 8, no act or failure to act, on the part of Executive, shall be considered “willful” unless it is done, or omitted to be done, by Executive in bad faith or without reasonable belief that Executive’s action or omission was in the best interests of the Bank.  Any act, or failure to act, based upon the direction of the Chief Executive Officer or based upon the advice of counsel for the Bank shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Bank.

9.             RESIGNATION FROM BOARDS OF DIRECTORS

 

In the event of Executive’s termination of employment for any reason, Executive’s service (if any) as a director of the Bank, any holding company of the Bank, and any affiliate of the Bank or holding company shall immediately terminate.  This Section 9 shall constitute a resignation notice for such purposes.

  

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10.          NOTICE.

 

(a)  Any purported termination by the Bank for Cause shall be communicated by Notice of Termination to Executive.  If, within thirty (30) days after any Notice of Termination for Cause is given, Executive notifies the Bank that a dispute exists concerning the termination, the parties shall promptly proceed to arbitration, as provided in Section 20.  Notwithstanding the pendency of any such dispute, the Bank shall discontinue paying Executive’s compensation until the dispute is finally resolved in accordance with this Agreement.  If it is determined that Executive is entitled to compensation and benefits under Section 4 or 5, the payment of such compensation and benefits by the Bank shall commence immediately following the date of resolution by arbitration, with interest due Executive on the cash amount that would have been paid pending arbitration (at the prime rate as published in The Wall Street Journal from time to time).

 

(b)  Any other purported termination by the Bank or by Executive shall be communicated by a “Notice of Termination” (as defined in Section 10(c)) to the other party.  If, within thirty (30) days after any Notice of Termination is given, the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the parties shall promptly proceed to arbitration as provided in Section 20.  Notwithstanding the pendency of any such dispute, the Bank shall continue to pay Executive the Base Salary, and other compensation and benefits in effect when the notice giving rise to the dispute was given (except as to termination of Executive for Cause); provided, however, that such payments and benefits shall not continue beyond the date that is twenty-four (24) months from the date the Notice of Termination is given.  In the event the voluntary termination of employment by Executive is disputed by the Bank, and if it is determined in arbitration that Executive is not entitled to termination benefits pursuant to this Agreement, Executive shall return all cash payments made to Executive pending resolution by arbitration, with interest thereon at the prime rate as published in The Wall Street Journal from time to time, if it is determined in arbitration that Executive’s voluntary termination of employment was not taken in good faith and not in the reasonable belief that grounds existed for Executive’s voluntary termination.  If it is determined that Executive is entitled to receive severance benefits under this Agreement, then any continuation of Base Salary and other compensation and benefits made to Executive under this Section 10 shall offset the amount of any severance benefits that are due to Executive under this Agreement.

 

(c)  For purposes of this Agreement, a “Notice of Termination” shall mean a written notice that shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated.

 

11.          POST-TERMINATION OBLIGATIONS.

 

(a)      Executive hereby covenants and agrees that, for a period of one year following termination of employment with the Bank, Executive shall not, without the written consent of the Bank, either directly or indirectly:

 

  

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  (i)            solicit, offer employment to, or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any officer or employee of the Bank or of any holding company of the Bank, or any of their respective subsidiaries or affiliates, to terminate his or her employment and accept employment or become affiliated with, or provide services for compensation in any capacity whatsoever to, any business whatsoever that competes with the business of the Bank or of any holding company of the Bank, or any of their direct or indirect subsidiaries or affiliates or has headquarters or offices within 50 miles of the locations in which the Bank of any holding company of the Bank has business operations or has filed an application for regulatory approval to establish an office;

 

  (ii)            become an officer, employee, consultant, director, independent contractor, agent, sole proprietor, joint venturer, greater than 5% equity owner or stockholder, partner or trustee of any savings bank, savings and loan association, savings and loan holding company, credit union, bank or bank holding company, insurance company or agency, any mortgage or loan broker or any other entity competing with the Bank or its affiliates in the same geographic locations where the Bank or its affiliates has material business interests; provided, however, that this restriction shall not apply if Executive’s employment is terminated following a Change in Control; or

 

  (iii)           solicit, provide any information, advice or recommendation or take any other action intended (or that a reasonable person acting in like circumstances would expect) to have the effect of causing any customer of the Bank to terminate an existing business or commercial relationship with the Bank.

 

  (iv)           make any written or verbal statements which may defame, disparage or cast in a negative light the Bank or injure the Bank’s reputation, goodwill, or standing in the community or which may defame, disparage or cast in a negative light or injure the reputation, goodwill or standing in the community of any of the Bank’s current or former officers or employees.

(b)      Executive shall, upon reasonable notice, furnish such information and assistance to the Bank as may reasonably be required by the Bank, in connection with any litigation in which it or any of its subsidiaries or affiliates is, or may become, a party; provided, however, that Executive shall not be required to provide information or assistance with respect to any litigation between the Executive and the Bank or any of its subsidiaries or affiliates.

 

(c)      All payments and benefits to Executive under this Agreement shall be subject to Executive’s compliance with this Section 11.  The parties hereto, recognizing that irreparable injury will result to the Bank, its business and property in the event of Executive’s breach of this Section 11, agree that, in the event of any such breach by Executive, the Bank will be entitled, in addition to any other remedies and damages available, to an injunction to restrain the violation hereof by Executive and all persons acting for or with Executive. Executive represents and admits that Executive’s experience and capabilities are such that Executive can obtain employment in a business engaged in other lines and/or of a different nature than the Bank, and that the enforcement of a remedy by way of injunction will not prevent Executive from earning a livelihood.  Nothing herein will be construed as prohibiting the Bank or any holding company of the Bank from pursuing any other remedies available to them for such breach or threatened breach, including the recovery of damages from Executive.

 

  

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12.          SOURCE OF PAYMENTS.

 

All payments provided in this Agreement shall be timely paid in cash or check from the general funds of the Bank. Any holding company established by the Bank may accede to this Agreement but only for the purposed of guaranteeing payment and provision of all amounts and benefits due hereunder to Executive.

 

13.          EFFECT ON PRIOR AGREEMENTS AND EXISTING BENEFITS PLANS.

 

This Agreement contains the entire understanding between the parties hereto and supersedes any prior employment agreement between the Bank or any predecessor of the Bank and Executive, except that this Agreement shall not affect or operate to reduce any benefit or compensation inuring to Executive of a kind elsewhere provided.  No provision of this Agreement shall be interpreted to mean that Executive is subject to receiving fewer benefits than those available to Executive without reference to this Agreement.

 

14.          NO ATTACHMENT; BINDING ON SUCCESSORS.

 

(a)  Except as required by law, no right to receive payments under this Agreement shall be subject to anticipation, commutation, alienation, sale, assignment, encumbrance, charge, pledge, or hypothecation, or to execution, attachment, levy, or similar process or assignment by operation of law, and any attempt, voluntary or involuntary, to effect any such action shall be null, void, and of no effect.

 

(b)  This Agreement shall be binding upon, and inure to the benefit of, Executive and the Bank and their respective successors and assigns.

 

15.          MODIFICATION AND WAIVER.

 

(a)  This Agreement may not be modified or amended except by an instrument in writing signed by the parties hereto.

 

(b)     No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel against the enforcement of any provision of this Agreement, except by written instrument of the party charged with such waiver or estoppel.  No such written waiver shall be deemed a continuing waiver unless specifically stated therein, and each such waiver shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future as to any act other than that specifically waived.

 

16.          REQUIRED PROVISIONS.

 

(a)      The Bank may terminate Executive’s employment at any time, but any termination by the Board other than termination for Cause shall not prejudice Executive’s right to compensation or other benefits under this Agreement.  Executive shall have no right to receive compensation or other benefits for any period after termination for Cause.

 

  

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(b)      If Executive is suspended from office and/or temporarily prohibited from participating in the conduct of the Bank’s affairs by a notice served under Section 8(e)(3) [12 USC §1818(e)(3)] or 8(g)(1) [12 USC §1818(g)(1)] of the Federal Deposit Insurance Act, the Bank’s obligations under this contract shall be suspended as of the date of service, unless stayed by appropriate proceedings.  If the charges in the notice are dismissed, the Bank may in its discretion (i) pay Executive all or part of the compensation withheld while its contract obligations were suspended and (ii) reinstate (in whole or in part) any of its obligations which were suspended.

 

(c)      If Executive is removed and/or permanently prohibited from participating in the conduct of the Bank’s affairs by an order issued under Section 8(e)(4) [12 USC §1818(e)(4)] or 8(g)(1) [12 USC §1818(g)(1)] of the Federal Deposit Insurance Act, all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

 

(d)      If the Bank is in default as defined in Section 3(x)(1) [12 USC §1813(x)(1)] of the Federal Deposit Insurance Act, all obligations of the Bank under this Agreement shall terminate as of the date of default, but this paragraph shall not affect any vested rights of the contracting parties.

 

(e)      All obligations under this Agreement shall be terminated, except to the extent determined that continuation of the contract is necessary for the continued operation of the Bank, (i) by the Director of the OTS or his or her designee, at the time the FDIC enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) [12 USC §1823(c)] of the Federal Deposit Insurance Act; or (ii) by the Director or his or her designee at the time the Director or his or her designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Director to be in an unsafe or unsound condition.  Any rights of the parties that have already vested, however, shall not be affected by such action.

 

(f)       Notwithstanding anything herein contained to the contrary, any payments to Executive by the Bank or any holding company of the Bank, whether pursuant to this Agreement or otherwise, are subject to and conditioned upon their compliance with Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. Section 1828(k), and the regulations promulgated thereunder in 12 C.F.R. Part 359.

 

17.          SEVERABILITY.

 

If, for any reason, any provision of this Agreement, or any part of any provision, is held invalid, such invalidity shall not affect any other provision of this Agreement or any part of such provision not held so invalid, and each such other provision and part thereof shall to the full extent consistent with law continue in full force and effect.

 

  

12

  

 

18.          HEADINGS FOR REFERENCE ONLY.

 

The headings of sections and paragraphs herein are included solely for convenience of reference and shall not control the meaning or interpretation of any of the provisions of this Agreement.

 

19.          GOVERNING LAW.

 

This Agreement shall be governed by the laws of the State of New York but only to the extent not superseded by federal law.

 

20.          ARBITRATION.

 

Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by binding arbitration, as an alternative to civil litigation and without any trial by jury to resolve such claims, conducted by a panel of three arbitrators sitting in a location selected by Executive within fifty (50) miles from the main office of the Bank, in accordance with the rules of the American Arbitration Association’s National Rules for the Resolution of Employment Disputes (“National Rules”) then in effect.  One arbitrator shall be selected by Executive, one arbitrator shall be selected by the Bank and the third arbitrator shall be selected by the arbitrators selected by the parties.  If the arbitrators are unable to agree within fifteen (15) days upon a third arbitrator, the arbitrator shall be appointed for them from a panel of arbitrators selected in accordance with the National Rules.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

 

21.          INDEMNIFICATION.

 

(a)  Executive shall be provided with coverage under a standard directors’ and officers’ liability insurance policy, and shall be indemnified for the term of this Agreement and for a period of six years thereafter to the fullest extent permitted under applicable law against all expenses and liabilities reasonably incurred by Executive in connection with or arising out of any action, suit or proceeding in which Executive may be involved by reason of Executive having been a director or officer of the Bank or any affiliate (whether or not Executive continues to be a director or officer at the time of incurring such expenses or liabilities), such expenses and liabilities to include, but not be limited to, judgments, court costs and attorneys’ fees and the cost of reasonable settlements (such settlements must be approved by the Chief Executive Officer), provided, however, Executive shall not be indemnified or reimbursed for legal expenses or liabilities incurred in connection with an action, suit or proceeding arising from any illegal or fraudulent act committed by Executive.  Any such indemnification shall be made consistent with Section 545.121 of the OTS Regulations and Section 18(k) of the Federal Deposit Insurance Act, 12 U.S.C. §1828(K), and the regulations issued thereunder in 12 C.F.R. Part 359.

 

(b)      Any indemnification by the Bank shall be subject to compliance with any applicable regulations of the OTS.

 

  

13

  

 

22.          ADDRESS FOR NOTICE.  

 

For the purposes of this Agreement, notices and all other communications provided for in this Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by certified or registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth below:

 

	 	To the Bank:	Beacon Federal
	 	 	6311 Court Street Road
	 	 	East Syracuse, NY 13057
	 	 	Telephone: (315) 433-0111
	 	 	Fax: (315) 431-9514
	 	 	 
	 	To Executive:	Lisa Jones

 

 

 

 

 

SIGNATURES

 

IN WITNESS WHEREOF, the Bank has caused this Agreement to be executed by its duly authorized representatives, and Executive has signed this Agreement, as of the date first above written.

 

	 	 	BEACON FEDERAL	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	December 23, 2010 	 	By:	/s/ Ross J. Prossner   	 
	Date	 	 	Ross J. Prossner, Chief Executive Officer
	 	 	 	 	 
	 	 	 	 	 
	 	 	EXECUTIVE:	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	December 23, 2010 	 	/s/ Lisa Jones   	 
	Date	 	Lisa Jones	 

14Third Amended and Restated Advisory Agreement

 Exhibit 10.1 
 EXECUTION VERSION 
 THIRD AMENDED AND RESTATED ADVISORY AGREEMENT

 THIS THIRD AMENDED AND RESTATED ADVISORY AGREEMENT (this “Agreement”), dated as of December 21, 2010 is made
and entered into among CB RICHARD ELLIS REALTY TRUST, a Maryland real estate investment trust (the “Company”), CBRE OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (the “Operating Partnership”) and CBRE ADVISORS LLC,
a Delaware limited liability company (the “Advisor”). 
 W I T N E S S E T H 

WHEREAS, the Company has elected to be taxed as a REIT (as defined below), and to invest its funds in investments permitted by the terms
of the Company’s Declaration of Trust (as defined herein) and Sections 856 through 860 of the Code (as defined below); 
 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 available to the Advisor and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision of, the Board of Trustees of the Company all as provided
herein; 
 WHEREAS, the Advisor is willing to undertake to render such services, subject to the supervision of the Board of
Trustees, on the terms and conditions hereinafter set forth; and 
 WHEREAS, the parties hereto are party to a Second Amended
and Restated Advisory Agreement (the “Amended Advisory Agreement”), dated as of January 30, 2009, which was renewed by the parties hereto on January 30, 2010 for a term of one year; 

WHEREAS, the parties hereto wish to modify the term of the Amended Advisory Agreement in the manner set forth in Section 14 hereof
to permit the Board of Trustees (as defined below) the opportunity to review the Company’s Annual Report on Form 10-K as part of its annual evaluation of the Advisor’s performance that it must undertake prior to formally renewing this
Agreement as required by the Declaration of Trust (as defined below). 
 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. As such term
is defined in the Declaration of Trust. 
 Acquisition Fee. The Acquisition Fee payable to the Advisor or its Affiliates
as set forth in Section 8(b). 

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

Affiliate or Affiliated. As such term is defined in the Declaration of Trust. 
 Appraised Value. As such term is defined in the Declaration of Trust. 

“Bankruptcy” means, with respect to any Person, (a) the filing by such Person of a voluntary petition seeking
liquidation, reorganization, arrangement or readjustment, in any form, of its debts under Title 11 of the United States Code or any other federal, state or foreign insolvency law, or such Person’s filing an answer consenting to or acquiescing
in any such petition, (b) the making by such Person of any assignment for the benefit of its creditors, (c) the expiration of sixty (60) days after the filing of an involuntary petition under Title 11 of the Unites States Code, an
application for the appointment of a receiver for a material portion of the assets of such Person, or an involuntary petition seeking liquidation, reorganization, arrangement or readjustment of its debts under any other federal, state or foreign
insolvency law, provided that the same shall not have been vacated, set aside or stayed within such 60-day period, (d) the entry against it of a final and non-appealable order for relief under any bankruptcy, insolvency or similar law now or
hereinafter in effect, (e) the attachment or other judicial seizure of all or substantially all of its assets, which remains pending, (f) its acknowledgement in writing of its inability to pay its debts as they come due, (g) its entry
into an offer of settlement, extension or composition to its creditors generally, (h) its taking any action for the purpose of effecting any of the foregoing, or (i) a determination by the Board, in its reasonable discretion, that such
Person is bankrupt, insolvent or otherwise unable to pay its debts as they come due. 
 Board of Trustees or Board. The
persons holding such office, as of any particular time, under the Declaration of Trust of the Company, whether they be the Trustees named therein or additional or successor Trustees. 
 Book Value. As such term is defined in the Declaration of Trust. 
 Bylaws. The
Amended and Restated Bylaws of the Company, as amended from time to time. 
 Cause. With respect to the termination of
this Agreement, (i) fraud, criminal conduct, willful misconduct or willful or negligent breach of fiduciary duty by the Advisor, (ii) a material breach of this Agreement by the Advisor which remains uncured after 30 days’ written
notice, (iii) the Bankruptcy or insolvency of the Advisor, CB Richard Ellis Investors L.L.C. and/or CB Richard Ellis Group, Inc. (collectively the “Sponsor Entities”), or (iv) there is a dissolution of any of the Sponsor
Entities. 
 Class B Interest. As such term is defined in Section 8(e). 

  
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 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. 
 Common Shares. Any of the Company’s common shares of beneficial interest, par value $0.01 per share.

 Company. As such term is defined in the preamble of this Agreement. 

Competitive Real Estate Commission. As such term is defined in the Declaration of Trust. 

Contract Purchase Price. As such term is defined in the Declaration of Trust. 

Dealer Manager. As such term is defined in the Declaration of Trust. 

Declaration of Trust. The Second Amended and Restated Declaration of Trust of the Company under Title 8 of the Corporations and
Associations Article of the Annotated Code of Maryland, as amended from time to time. 
 Effective Date. As such term is
defined in the Declaration of Trust. 
 GAAP. Generally accepted accounting principles as in effect in the United States
of America from time to time. 
 Gross Proceeds. As such term is defined in the Declaration of Trust. 

Independent Appraiser. As such term is defined in the Declaration of Trust. 

Independent Trustee. As such term is defined in the Declaration of Trust. 

Investment Management Fee. The Investment Management Fee payable to the Advisor as defined in Section 8(a). 

Joint Ventures. As such term is defined in the Declaration of Trust. 

Mortgage. As such term is defined in the Declaration of Trust. 

Net Income. As such term is defined in the Declaration of Trust. 

Net Operating Income. Equal to (i) revenues from Properties, less deferred rents receivable, calculated, in each case, in
accordance with GAAP, plus (ii) payments received pursuant to master lease agreements with sellers of Properties, less (iii) the costs of maintaining the Properties, including, without limitation, taxes, insurance, repairs and maintenance,
but excluding depreciation, amortization, principal and interest payments, and capital expenditures, calculated, in each case, in accordance with GAAP. 
 Net Sales Proceeds. As such term is defined in the Declaration of Trust. 

  
 - 3 -

 Offering. As such term is defined in the Declaration of Trust. 

Operating Expenses. All costs and expenses of every character paid or incurred by the Company as determined under generally
accepted accounting principles, that are in any way related to the operation of the Company or to Company business, including advisory fees, 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 tax incurred in connection with the issuance, distribution, transfer, registration and listing of the Shares, (ii) interest
payments, (iii) taxes, (iv) non-cash expenditures such as depreciation, amortization and bad debt reserves, (v) Acquisition Expenses, (vi) real estate commissions on the Sale of Property, and (vii) other fees and expenses
connected with the acquisition and disposition of real estate interests, mortgage loans or other property. 
 Operating
Partnership. As such term is defined in the preamble of this Agreement. 
 Operating Partnership Agreement. As such
term is defined in the Declaration of Trust. 
 Organizational and Offering Expenses. As such term is defined in the
Declaration of Trust. 
 Person. As such term is defined in the Declaration of Trust. 

Property or Properties. As such term is defined in the Declaration of Trust. 

Property Management, Leasing and Construction Fees. The Property Management, Leasing and Construction Fees payable to the Advisor
or its Affiliates as set forth in Section 8(c). 
 Prospectus. As such term is defined in the Declaration of Trust.

 Real Estate Commission Fee on Sale of Property. The Real Estate Commission Fees on Sale of Property payable to the
Advisor or its Affiliates as set forth in Section 8(d). 
 REIT. A real estate investment trust under
Section 856 of the Code. 
 Sale or Sales. As such term is defined in the Declaration of Trust. 

Securities. As such term is defined in the Declaration of Trust. 

Shareholders. The record holders of the Company’s Shares as maintained in the Advisor’s books and records. 

Shares. Any of the Company’s shares of beneficial interest of any class or series, including the Common Shares. 

Soliciting Dealers. As such term is defined in the Declaration of Trust. 

Termination Date. The date of termination of the Agreement. 

Total Assets. As such term is defined in the Declaration of Trust. 

  
 - 4 -

 Trustee. A member of the Board of Trustees of the Company. 

2%/25% Guidelines. The requirement pursuant to the North American Securities Administrators Association, Inc.’s Statement of
Policy Regarding Real Estate Investment Trusts, as amended from time to time, that, in any 12 month period, total Operating Expenses not exceed the greater of 2% of the Company’s Average Invested Assets during such 12 month period or 25% of the
Company’s Net Income over the same 12 month period. 
 2. Appointment. Each of the Company and the Operating
Partnership hereby appoints the Advisor to serve as its advisor on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment. 
 3. Duties of the Advisor. The Advisor undertakes to use its best efforts to present to the Company potential investment opportunities and to provide a continuing and suitable investment program
consistent with the investment objectives and policies of the Company as determined and adopted from time to time by the Board. The Advisor shall devote sufficient resources to the administration of the Company to discharge its obligations
hereunder. In performance of this undertaking, subject to the supervision of the Board and consistent with the provisions set forth herein and in Declaration of Trust and Bylaws of the Company, the Advisor shall, either directly or by engaging an
Affiliate: 
 (a) serve as the Company’s investment and financial advisor and provide research and economic and statistical
data in connection with the Company’s assets and investment policies; 
 (b) provide the daily management of the Company
and perform and supervise the various administrative functions reasonably necessary for the management of the Company; 
 (c)
maintain and preserve the books and records of the Company, including share books and records reflecting a record of the Shareholders and their ownership of the Company’s uncertificated Shares; 

(d) investigate, select, and, on behalf of the Company, engage and conduct business with such Persons as the Advisor deems necessary to
the proper performance of its obligations hereunder, including but not limited to consultants, accountants, correspondents, lenders, technical advisors, attorneys, brokers, underwriters, corporate 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 with any of the foregoing; 
 (e) consult with the officers and the Board of the Company
and assist the Board in the formulation and implementation of the Company’s financial policies, and, as necessary, furnish the Board with advice and recommendations with respect to the making of investments consistent with the investment
objectives and policies of the Company and in connection with any borrowings proposed to be undertaken by the Company; 

  
 - 5 -

 (f) subject to the provisions of Sections 3(h) and 4 hereof, (i) locate, analyze
and select potential investments in Properties, (ii) structure and negotiate the terms and conditions of transactions pursuant to which investment in Properties will be made; (iii) make investments in Properties on behalf of the Company or
the 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 the investments in, Property; (v) enter into leases and service contracts for Property and, to the extent necessary, perform all other operational functions for the maintenance and administration of such
Property; (vi) select Joint Venture partners, structure corresponding agreements and oversee and monitor these relationships; (vii) oversee Affiliated and non-Affiliated Persons with whom the Advisor contracts to perform certain of the
services required to be performed under this Agreement; (viii) manage accounting and other record keeping functions for the Company and the Operating Partnership; and (ix) recommend liquidity events to the Board when appropriate;

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

(h) obtain the prior approval of the Board (including a majority of all Independent Trustees) for any and all investments in, or
financings or dispositions of, Properties, except as described herein; 
 (i) negotiate on behalf of the Company with banks or
lenders for loans to be made to the Company, and negotiate on behalf of the Company with investment banking firms and broker-dealers or negotiate private sales of Shares and Securities or obtain loans for the Company, but in no event in such a way
so that the Advisor shall be acting as broker-dealer or underwriter; and provided, further, that any fees and costs payable to third parties incurred by the Advisor in connection with the foregoing shall be the responsibility of the Company;

 (j) obtain reports (which may be prepared by the Advisor or its Affiliates), where appropriate, concerning the value of
investments or contemplated investments of the Company in Properties; 
 (k) from time to time, or at any time reasonably
requested by the Board, make reports to the Board of its performance of services to the Company under this Agreement, including reports with respect to potential conflicts of interest involving the Advisor or any of its Affiliates; 

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

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

(n) deliver to or maintain on behalf of the Company copies of all appraisals obtained in connection with the investments in Properties;
and 
 (o) notify the Board of all proposed material transactions before they are completed. 

Notwithstanding the foregoing, the Advisor may delegate any of the foregoing duties to any Person so long as the Advisor or any Affiliate
remains responsible for the performance of the duties set forth in this Section 3. 

  
 - 6 -

 4. Authority of Advisor. 

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

(b) Notwithstanding the foregoing, any investment in Properties, including any acquisition of Property by the Company or the Operating
Partnership (as well as any financing acquired by the Company or the Operating Partnership in connection with such acquisition), will require the prior approval of the Board. The Company shall not purchase or lease properties in which the Advisor or
its Affiliates has an interest without a determination by a majority of the Board, including a majority of any Independent Trustees not otherwise interested in such transaction, that such transaction is fair and commercially reasonable to the
Company and at a price to the Company no greater than the cost of the property to the Advisor or its Affiliates, unless there is substantial justification for any amount that exceeds such cost and such excess amount is determined to be reasonable.
In no event shall the Company acquire any such property at an amount in excess of its current Appraised Value. The Company shall not sell or lease properties to the Advisor or its Affiliates or to the Company’s Trustees unless a majority of the
Board; including a majority of any Independent Trustees not otherwise interested in the transaction, determine the transaction is fair and reasonable to the Company. 
 (c) If a transaction requires approval by the Independent Trustees, the Advisor will deliver to the Independent Trustees all documents required by them to properly evaluate the proposed investment in the
Property. 
 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. If and to the extent the Board so modifies or revokes the authority contained herein, the Advisor shall henceforth submit to the Board for prior approval such proposed transactions involving investments in Property as thereafter
require prior approval, 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 prior to the date of
receipt by the Advisor of such notification. 
 There shall be no limitation on any shareholder, director, trustee, officer,
employee or Affiliate of the Advisor serving as a Trustee or any officer of the Company, except that no employee of the Advisor or its Affiliates who also is a Trustee or officer of the Company shall receive any compensation from the Company for
serving as a Trustee or officer other than for reasonable reimbursement for travel and related expenses incurred in attending meetings of the Board. 

  
 - 7 -

 5. Bank Accounts. The Advisor may establish and maintain one or more bank accounts in
its own name for the account of the Company or in the name of the Company and may collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company, under such terms and
conditions as the Board may approve, provided that no funds shall be commingled with the funds of the Advisor; and the Advisor shall from time to time render appropriate accountings of such collections and payments to the Board and to the auditors
of the Company. 
 6. Records; Access. The Advisor shall maintain appropriate records of all its activities hereunder and
make such records available for inspection by the Board 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. 
 7. 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 qualification of the Company as a REIT under the Code, (b) subject the Company to regulation
under the Investment Company Act of 1940, as amended, or (c) violate any law, rule, regulation or statement of policy of any governmental body or agency having jurisdiction over the Company, its Shares or its Securities, or otherwise not be
permitted by the Declaration of Trust or Bylaws of the Company, except if such action shall be ordered by the Board, in which case the Advisor shall notify promptly the Board of the Advisor’s judgment of the potential impact of such action and
shall refrain from taking such action until it receives further clarification or instructions from the Board. In such event the Advisor shall have no liability for acting in accordance with the specific instructions of the Board so given.
Notwithstanding the foregoing, the Advisor, its directors, officers, employees and members, and the partners, directors, officers, members and stockholders of the Advisor’s Affiliates shall not be liable to the Company or to the Board or
Shareholders for any act or omission by the Advisor, its directors, officers, members or employees, or stockholders, directors or officers of the Advisor’s Affiliates except as provided in Sections 18 and 19 of this Agreement. 

8. Fees. 

(a) Investment Management Fee. The Advisor shall be paid as compensation for the advisory services rendered to the Company
hereunder an investment management fee (the “Investment Management Fee”). The Investment Management Fee shall be payable in cash or stock, subject to certain restrictions, at the option of the Advisor, and may be deferred or waived, in
whole or in part, from time to time, by the Advisor (without interest). The Investment Management Fee will consist of (i) a monthly fee equal to one twelfth of 0.5% of the aggregate cost (before non-cash reserves and depreciation) of all
real estate investments within the Company’s portfolio and (ii) a monthly fee equal to 5.0% of the aggregate monthly Net Operating Income derived from all real estate investments within the Company’s portfolio. The Investment
Management Fee shall be calculated monthly, and the Investment Management Fee calculated with respect to each month shall be payable monthly in arrears within ten days from the end of each calendar month during the term hereof. 

  
 - 8 -

 In the event that a fee payable by the Company to the Advisor between the Effective Date and
Listing pursuant to this Section 8(a) cannot be paid in full due to the restrictions in Section 11, then the unpaid portion of the fee shall be deferred until such time as it may be paid in a later period without restriction under
Section 11. 
 (b) Acquisition Fees. The Advisor or its Affiliates shall receive as compensation for services
rendered in connection with the investigation, selection and acquisition (by purchase, investment or exchange) of Property an Acquisition Fee payable by the Company. The Advisor or its Affiliates shall be paid up to 1.5% of (i) the Contract
Purchase Price of Property acquired by the Company, including any debt attributable to such investments, or (ii) when the Company makes an investment indirectly through another entity, such investment’s pro rata share of the gross asset
value of Property held by that entity. However, the total of all Acquisition Fees and Acquisition Expenses payable with respect to any Property or Properties shall not exceed an amount equal to 6% of the Contract Purchase Price, or in the case of a
Mortgage, 6% of the funds advanced, provided, however, that a majority of the Board of Trustees (including a majority of the Independent Trustees) not otherwise interested in the transaction may approve fees and expenses in excess of this limit
if they determine the transaction to be commercially competitive, fair and reasonable to the Company. 
 (c) Property
Management, Leasing and Construction Fees. The Advisor or its Affiliates shall receive as compensation for services rendered with respect to any Property, Property Management, Leasing and Construction Fees based upon the customary property
management, leasing and construction supervision fees applicable to the geographic location and type of a Property. Such fees for each service provided shall range from 2% to 5% of gross revenues received from a Property the Company owns.

 (d) Real Estate Commission Fee on Sale of Property. The Company shall pay the Advisor or its Affiliates a Real Estate
Commission Fee upon Sale of one or more Properties, in an amount equal to the lesser of (i) one-half of the Competitive Real Estate Commission, or (ii) 3% of the sales price of such Property or Properties. Payment of such fee may be made
only if the Advisor or its Affiliates provides a substantial amount of services in connection with the Sale of Property or Properties, as determined by a majority of the Independent Trustees. In addition, the amount paid when added to all other real
estate commissions paid to unaffiliated parties in connection with such Sale shall not exceed the lesser of the Competitive Real Estate Commission or an amount equal to 6% of the sales price of such Property or Properties. 

(e) Operating Partnership Interests. An Affiliate of the Advisor has been issued one Class B limited partnership interest in the
Operating Partnership (the “Class B Interest”). The holder of the Class B Interest is entitled to distributions as set forth in the Operating Partnership Agreement of the Operating Partnership. The Class B Interest is subject to redemption
in the event of termination of this Agreement as described in the Operating Partnership Agreement of the Operating Partnership. 

(f) Loans. Except as set forth in the Declaration of Trust, the Company shall not make any loans to the Advisor or its Affiliates
or to the Company’s Trustees. 

  
 - 9 -

 (g) Review of Fee Structure and Advisor Performance. From the Effective Date until
Listing, the Independent Trustees shall review the fees and expenses and the performance of the Advisor at least annually in the manner set forth in the Declaration of Trust. 
 9. Expenses. 
 (a) In addition to the compensation paid to the Advisor
pursuant to Section 8 hereof, the Company shall pay directly or reimburse the Advisor for all of the expenses paid or incurred by the Advisor in connection with the services it provides to the Company pursuant to this Agreement, including, but
not limited to: 
 (i) the Company’s Organizational and Offering Expenses; provided, however, that the total amount of all
Organizational and Offering Expenses shall be reasonable and shall in no event exceed 15% of the Gross Proceeds of each Offering; 
 (ii) the annual cost of goods and materials used by the Company, including brokerage fees paid in connection with the purchase and sale of securities; 

(iii) administrative services including personnel costs; and 
 (iv) Acquisition Expenses, disposition expenses, financing expenses, and Operating Expenses. 
 (b) Expenses incurred by the Advisor on behalf of the Company and payable pursuant to this Section 9 shall be reimbursed no less than monthly to the Advisor. The Advisor shall prepare a statement
documenting the expenses of the Company during each quarter, and shall deliver such statement to the Company within 45 days after the end of each quarter. 
 10. Other Services. Except as set forth in the Declaration of Trust and herein, the Company shall not accept goods or services from the Advisor or its Affiliates. 

11. Reimbursement to the Advisor. The Company shall not reimburse the Advisor at the end of any fiscal quarter Operating Expenses
that, in the four consecutive fiscal quarters then ended (the “Expense Year”) exceed (the “Excess Amount”) the greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25% Guidelines”) for such
year. Any Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the Company, or, at the option of the Company, subtracted from the Total Operating Expenses reimbursed during subsequent fiscal quarters. If there is an Excess
Amount in any Expense Year and the Independent Trustees determine that such excess was justified, based on unusual and nonrecurring factors which they deem sufficient, the Excess Amount may be carried over and included in Operating Expenses in
subsequent Expense Years, and reimbursed to the Advisor in one or more of such years, provided that Operating Expenses in any Expense Year, including any Excess Amount to be paid to the Advisor, shall not exceed the 2%/25% Guidelines. Within 60 days
after the end of any fiscal quarter of the Company for which total Operating Expenses for the Expense Year exceed the 2%/25% Guidelines, there shall be sent to the stockholders a written disclosure of such fact, together with an explanation of the
factors the Independent Trustees considered in determining that such excess expenses were justified. Such determination shall be reflected in the minutes of the meetings of the Board of Trustees. The Company will not reimburse the Advisor or its
Affiliates for services for which the Advisor or its Affiliates are entitled to compensation in the form of a separate fee. All figures used in the foregoing computation shall be determined in accordance with generally accepted accounting principles
applied on a consistent basis. 

  
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 12. Other Activities of the Advisor. Nothing herein contained shall prevent the
Advisor or any of its Affiliates from engaging in or earnings 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, 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. The Advisor may, with respect to any investment in which the Company is a participant, also render advice and service to each and every other
participant therein. The Advisor shall report to the Board the existence of any condition or circumstance, existing or anticipated, of which it has knowledge, which creates or could create a conflict of interest between the Advisor’s
obligations to the Company and its obligations to or its interest in any other partnership, corporation, firm, individual, trust or association. The Advisor or its Affiliates shall promptly disclose to the Board knowledge of such condition or
circumstance. 
 The Advisor shall be required to use its reasonable efforts to present a continuing and suitable investment
program to the Company which is consistent with the investment policies and objectives of the Company, but neither the Advisor nor any Affiliate of the Advisor shall be obligated generally to present any particular investment opportunity to the
Company even if the opportunity is of a character which, if presented to the Company, could be taken by the Company. 
 From the
Effective Date until Listing, in the event that the Advisor is presented with a potential investment which might be made by the Company and by another investment entity which the Advisor advises or manages, then the entity that has had the longest
period of time elapse since it was offered an investment opportunity will first be offered such investment opportunity. Investment opportunities sourced directly by the Advisor and suitable for the Company will first be presented to the Company
before being offered to other programs or accounts. In determining whether or not such an investment opportunity is suitable for more than one program or account, the Advisor shall examine, among others, the following factors: (i) the degree to
which the potential acquisition meets the investment objectives and parameters of each program or account; (ii) the amount of funds available to each program or account and the length of time such funds have been available for investment;
(iii) the effect of the acquisition both on diversification of each program’s or account’s investments by type of property and geographic area, and on diversification of the tenants of its properties; (iv) the policy of each
program or account relating to leverage of properties; (v) the anticipated cash flow of each program or account; (vi) the income tax effects of the purchase of each program or account; and (vii) the size of the investment. 

If a subsequent event or development, such as a delay in the closing of a property or a delay in the construction of a property, causes
any such investment, in the opinion of the Board and the Advisor, to be more appropriate for a program or account other than the program or account that committed to make the investment, the Advisor may determine that another program or account
affiliated with the Advisor will make the investment. The Board has a duty to ensure that the 

  
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method used by the Advisor for the allocation of the acquisition of properties by two or more affiliated programs seeking to acquire similar types of properties shall be reasonable, and has
concluded that the procedures described above are reasonable; such procedures will be reviewed regularly by the Board. 
 13.
Relationship of Advisor and Company. The Company and the Advisor are not partners or joint venturers with each other, and nothing in this Agreement shall be construed to make them such partners or joint venturers or impose any liability as
such on either of them. 
 14. Term. This Agreement shall continue in force until April 30, 2011, subject to an
unlimited number of successive one-year renewals upon mutual consent of the parties. It is the duty of the Board 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. 
 15. Termination. This Agreement may be terminated upon 60 days written notice without Cause or penalty,
by either party (upon approval of a majority of the Independent Trustees of the Company or by the Advisor, as the case may be). This Agreement may be terminated immediately (i) by the Company for Cause or (ii) by the Advisor for a material
breach of this Agreement by the Company which remains uncured after 10 days’ written notice or the bankruptcy of the Company. 
 16. Assignment to an Affiliate. This Agreement may be assigned by the Advisor to an Affiliate with the approval of a majority of the Board (including a majority of the Independent Trustees). The
Advisor may assign any rights to receive fees or other payments under this Agreement without obtaining the approval of the Board. This Agreement shall not be assigned by the Company without the consent of the Advisor, except in the case of an
assignment by the Company to a corporation or other organization which is a successor to all of the assets, rights and obligations of the Company, in which case such successor organization shall be bound hereunder and by the terms of said assignment
in the same manner as the Company is bound by this Agreement. 
 17. Payments to and Duties of Advisor upon Termination.
Payments to the Advisor pursuant to this Section 17 shall be subject to the 2%/25% Guidelines to the extent applicable. 

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

(b) The Advisor shall promptly upon termination: 
 (i) pay over to the Company all money collected and held for the account of the Company pursuant to this Agreement, after deducting any accrued compensation and reimbursement for its expenses to which it
is then entitled; 
 (ii) deliver to the Board 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; 

  
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 (iii) deliver to the Board all assets, including Properties, and documents of the Company
then in the custody of the Advisor; and 
 (iv) cooperate with the Company to provide an orderly management transition. 

18. Indemnification by the Company. The Company shall indemnify and hold harmless the Advisor and its Affiliates, including their
respective officers, directors, partners and employees (the “Indemnitees”), from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including reasonable attorneys’
fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance, subject to any limitations imposed by the laws of the State of Maryland, the Declaration of Trust of the Company or the
limitations set forth below. Notwithstanding the foregoing, the Advisor shall not be entitled to indemnification or be held harmless pursuant to this Section 18 for any activity which the Advisor shall be required to indemnify or hold harmless
the Company pursuant to Section 19. Any indemnification of the Advisor may be made only out of the net assets of the Company and not from Shareholders. 
 The Company may indemnify and hold harmless Indemnitees pursuant to this Section 18 subject to the following limitations: 
 (a) The Company shall indemnify and hold harmless an Indemnitee against any or all losses or liabilities reasonably incurred by the Indemnitee in connection with or by reason of any act or omission
performed or omitted to be performed on behalf of the Company in such capacity, provided, that the Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company. The
Company shall not indemnify or hold harmless the Indemnitee if: (a) in the case that the Indemnitee is a Trustee (other than an Independent Trustee), an Advisor or an Affiliate, the loss or liability was the result of negligence or misconduct
by the Indemnitee, or (b) in the case that the Indemnitee is an Independent Trustee, the loss or liability was the result of gross negligence or willful misconduct by the Indemnitee. Any indemnification of expenses or agreement to hold harmless
may be paid only out of the net assets of the Company, and no portion may be recoverable from the shareholders. 
 (b) The
Company shall not provide indemnification to any Trustee, Advisor, Affiliate or broker-dealer for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the
following conditions are met: (a) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the Indemnitee, (b) such claims have been dismissed with prejudice on the
merits by a court of competent jurisdiction as to the Indemnitee; or (c) a court of competent jurisdiction approves a settlement of the claims against the Indemnitee and finds that indemnification of the settlement and the related costs should
be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any state securities regulatory authority in which securities were offered
or sold as to indemnification for violations of securities laws. 
 (c) The Company shall pay or reimburse reasonable legal
expenses and other costs incurred by an Indemnitee in advance of final disposition of a proceeding if all of the following are satisfied: 

  
 - 13 -

 
(i) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company, (ii) the Indemnitee provides the Company with written
affirmation of the Indemnitee’s good faith belief that the Indemnitee has met the standard of conduct necessary for indemnification by the Company as authorized by this Section 18, (iii) the legal proceeding was initiated by a third
party who is not a shareholder or, if by a shareholder of the Company acting in his or her capacity as such, a court of competent jurisdiction approves such advancement, and (iv) the Indemnitee provides the Company with a written agreement to
repay the amount paid or reimbursed by the Company, together with the applicable legal rate of interest thereon, if it is ultimately determined that the Indemnitee did not comply with the requisite standard of conduct and is not entitled to
indemnification. 
 19. Indemnification by Advisor. The Advisor shall indemnify and hold harmless the Company from
contract or other liability, claims, damages, taxes or losses and related expenses including attorneys’ fees, to the extent that such liability, claims, damages, taxes or losses and related expenses are not fully reimbursed by insurance and are
incurred by reason of the Advisor’s bad faith, fraud, willful misfeasance, gross negligence or reckless disregard of its duties, but the Advisor shall not be held responsible for any action of the Board of Trustees in following or declining to
follow any advice or recommendation given by the Advisor. 
 20. 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 Declaration of Trust, the Bylaws, or accepted by the party to whom it is given, and
shall be given by being delivered by hand or by overnight mail or other overnight delivery service to the addresses set forth herein: 
  

			
	 To the Board, the Company and the Operating Partnership:
	  	 CB Richard Ellis Realty Trust

		
		  	 47 Hulfish Street, Suite 210

		
		  	 Princeton, NJ 08542

		
	 To the Advisor:
	  	 CBRE Advisors LLC

		
		  	 515 South Flower Street, Suite 3100

		
		  	 Los Angeles, California 90071

 Either party may at any time give notice in writing to the other party of a change in its address for the purposes of this Section 20. 

  
 - 14 -

 21. Modification. This Agreement shall not be changed, modified, terminated, or
discharged, in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or assignees. 
 22. 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. 
 23. Construction.
The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of New York, notwithstanding any New York or other conflict-of-law provisions to the contrary. 

24. Entire Agreement. This Agreement contains the entire agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing. 

25. 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. 
 26. 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. 

27. Titles not to Affect Interpretation. The titles of paragraphs and subparagraphs 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. 
 28. 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. 
 29. Voting of Shares. From the Effective Date until Listing, neither the Trustees, the Advisor nor their Affiliates will vote or consent to the voting of Shares they own on the date hereof or
hereafter acquire on matters submitted to the Shareholders regarding either (1) the removal of the Advisor, any Trustee or any Affiliate, or (2) any transaction between the Company or the Operating Partnership and the Advisor, any Trustee
or any Affiliate. 
 [Signatures appear on next page.] 

  
 - 15 -

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

			
	 CB RICHARD ELLIS REALTY TRUST

		
	 By:
	 	 /s/ Jack A. Cuneo

		
	 Name:
	 	 Jack A. Cuneo

		
	 Title:
	 	 President and Chief Executive Officer

	
	 CBRE OPERATING PARTNERSHIP, L.P.

		
	 By:
	 	 /s/ Jack A. Cuneo

		
	 Name:
	 	 Jack A. Cuneo

		
	 Title:
	 	 President and Chief Executive Officer

	
	 CBRE ADVISORS LLC

		
	 By:
	 	 /s/ Jack A. Cuneo

		
	 Name:
	 	 Jack A. Cuneo

		
	 Title:
	 	 President and Chief Executive Officer

  
 - 16 -

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