Document:

Exhibit 10.3

 

ESCROW AGREEMENT

 

This Escrow Agreement (this “Agreement”) is made and entered into as of this              day of                         , 2013 by and among Adaptive Real Estate Income Trust, Inc., a Maryland corporation (the “Company”), Behringer Securities LP, a Texas limited partnership (the “Dealer Manager”), and UMB Bank, N.A., as Escrow Agent, a national banking association organized and existing under the laws of the United States of America (the “Escrow Agent”).

 

RECITALS

 

WHEREAS, the Company proposes to offer and sell the following classes of its common stock: (i) Class R Common Stock, (ii) Class W Common Stock and (iii) Class I Common Stock (the “Shares”), on a best efforts basis, for at least $2 million and up to $3 billion of gross offering proceeds (excluding shares of its common stock to be offered and sold pursuant to the Company’s distribution reinvestment plan), subject to the Company’s right to reallocate amounts as described in the Offering Document (defined below) at an initial purchase price of (x) $10.00 per share of Class R Common Stock (y) $9.30 per share of Class W Common Stock, and (z) $9.00 per share of Class I Common Stock (the “Offering”) to investors pursuant to the Company’s Registration Statement on Form S-11 (File No. 333-145692), as amended from time to time (the “Offering Document”);

 

WHEREAS, Adaptive Real Estate Income Trust Advisors, LLC, a Texas limited liability company (the “Advisor”), will externally manage and advise the Company;

 

WHEREAS, the Dealer Manager will act as dealer manager for the Offering;

 

WHEREAS, the Company is entering into this Agreement to set forth the terms on which the Escrow Agent will, except as otherwise provided herein, hold and disburse the proceeds from subscriptions for the purchase of the Shares in the Offering, which will be until such time as the Company has received subscriptions for Shares resulting in total minimum capital raised of at least $2 million, including subscriptions from the Company’s directors, officers and other persons and entities affiliated with the Company or the Advisor (the “Required Capital”);

 

WHEREAS, deposits received from residents of the State of New York (the “New York Subscribers”) and deposits received from residents of the State of Pennsylvania (the “Pennsylvania Subscribers”) will remain in the NY Escrow Account (as defined below) and PA Escrow Account (as defined below), as applicable, until the conditions of Section 3 and Section 4, respectively, have been met;

 

WHEREAS, the Company desires that the Escrow Agent act as escrow agent to the Escrow Accounts (as defined below), and the Escrow Agent is willing to act in such capacity.

 

WHEREAS, the Escrow Agent has engaged DST Systems, Inc. (the “Transfer Agent”) to examine for “good order” subscriptions and to act as record keeper, maintaining on behalf of the Escrow Agent the ownership records for the Escrow Account.  In so acting, the Transfer Agent shall be acting solely in the capacity of agent for the Escrow Agent and not in any capacity on behalf of the Company or the Dealer Manager.

 

AGREEMENT

 

NOW, THEREFORE, the Company and the Escrow Agent agree to the terms of this Agreement as follows:

 

1.                                    Appointment and Commencement of Duties.  The Company hereby appoints the Escrow Agent for purposes of holding the proceeds from the subscriptions for Shares on the terms and conditions set forth herein (the “Escrowed Funds”).  This Agreement will be effective as of the date on which the Offering Document becomes effective with the Securities and Exchange Commission.  Except as

 

 

otherwise set forth herein for the New York Subscribers and the Pennsylvania Subscribers, the “Escrow Period” shall commence upon the effectiveness of this Agreement and shall continue until the earlier of (i) the date upon which the Escrow Agent receives confirmation from the Company that the Company has raised the Required Capital, (ii) the termination of the Offering by the Company prior to the receipt of the Required Capital, or (iii) the close of business on the date (the “Threshold Date”) that is one year from the date the Offering Document becomes effective with the Securities and Exchange Commission.  As soon as practicable after the effective date of this Agreement, the Company shall establish three separate interest-bearing escrow accounts with the Escrow Agent, which shall be entitled (a) “ESCROW ACCOUNT FOR THE BENEFIT OF SUBSCRIBERS FOR COMMON STOCK OF ADAPTIVE REAL ESTATE INCOME TRUST, INC.” (the “Escrow Account”); (b) “ESCROW ACCOUNT FOR THE BENEFIT OF NEW YORK SUBSCRIBERS FOR COMMON STOCK OF ADAPTIVE REAL ESTATE INCOME TRUST, INC.” (the “NY Escrow Account”); and (c) “ESCROW ACCOUNT FOR THE BENEFIT OF PENNSYLVANIA SUBSCRIBERS FOR COMMON STOCK OF ADAPTIVE REAL ESTATE INCOME TRUST, INC.” (the “PA Escrow Account”, and collectively with the Escrow Account and the NY Escrow Account, the “Escrow Accounts”) or such similar designations as the parties may agree.

 

2.                                    Operation of the Escrow Account.

 

(a)                                 Deposits in the Escrow Account.

 

(1)                                 During the Escrow Period, persons subscribing to purchase the Shares (the “Subscribers”) will be instructed by the Dealer Manager or any soliciting dealers to remit the purchase price in the form of checks, drafts, wires, Automated Clearing House (ACH) or money orders (hereinafter “instruments of payment”) payable to the order of “UMB Bank, N.A., Escrow Agent for Adaptive Real Estate Income Trust, Inc.,” or a recognizable contraction or abbreviation thereof including, but not limited to, “UMB Bank, N.A., Escrow Agent for Adaptive Real Estate Income Trust, Inc.”  Completed subscription agreements and instruments of payment for the purchase price for Shares shall be remitted by the broker dealers or registered investment advisors, as applicable, on behalf of the Subscribers to the address designated on the subscription agreement for the receipt of such agreements and instruments of payment (the “Designated Address”) by the end of the next business day following receipt of any such instruments of payment or, if final internal supervisory review is conducted at a different location, by the end of the next business day following receipt of any such instruments of payment by the office conducting final internal supervisory review.  The Escrow Agent shall be responsible for ensuring that the funds contributed by the New York Subscribers and the Pennsylvania Subscribers will be separately accounted for on the records of the Transfer Agent so that the requirements of Section 3 and Section 4 of this Agreement can be met.  After subscriptions are received resulting in total minimum capital raised equal to the Required Capital and such funds are disbursed from the Escrow Accounts in accordance with Section 2(b)(1)(A) hereof, subscriptions may continue to be so submitted unless otherwise instructed by the Dealer Manager; provided that subscriptions received from New York Subscribers and Pennsylvania Subscribers shall continue to be so submitted until the conditions of Section 3 and Section 4, respectively, have been met.  Any checks, drafts or money orders received made payable to a party other than the Escrow Agent (or after the Required Capital is received, made payable to a party other than the party designated by the Dealer Manager) shall be returned to the soliciting dealer who submitted the check, draft or money order.  All instruments of payment from each such Subscriber shall, except as otherwise specified herein, be deposited into one of the designated Escrow Accounts by the end of the business day on which such instruments of payment are received at the Designated Address (after the Required Capital is received, a new account may be established in the name of the Company).

 

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(2)                                 Not later than ten (10) business days prior to any required disbursement of interest by the Escrow Agent to any Subscriber pursuant to Section 2(b)(4) hereof or other applicable provision herein, the Dealer Manager or the Company will provide or cause to be provided to the Escrow Agent, an executed IRS Form W-9 (which may be a Substitute Form W-9 as contained in the subscription agreement provided such Substitute Form W-9 is in conformity with all applicable Internal Revenue Service rules, regulations and guidelines)  (“Form W-9”), the calculation of the number of Shares intended to be purchased, and purchase price remitted or other documentation containing such information sufficient to identify the respective Subscriber.  The Escrow Agent shall not be obligated to use any efforts to obtain such information from the Subscriber, the Company or the Dealer Manager.  If such information regarding a Subscriber is not provided to the Escrow Agent in a timely manner after the Escrow Agent’s receipt of the purchase price from such Subscriber, the Company or the Dealer Manager shall cooperate with the Escrow Agent to return such funds to the soliciting dealer or other applicable party who submitted the funds, unless such information for a Subscriber is provided prior to the actual return of such funds by the Escrow Agent, and no interest otherwise payable shall be due or payable with respect to such funds under Section 2(b)(4) hereof.  The Escrow Accounts will be established and maintained in such a way as to permit the interest income calculations described in Section 2(b)(4) hereof.

 

(3)                                 All monies received from Subscribers for the payment of Shares shall, except as otherwise specified herein, be promptly deposited in the Escrow Accounts, as applicable, by the end of the business day on which such instruments of payment are received at the Designated Address.  The Transfer Agent will maintain a written account of each sale, which account shall set forth, among other things, the following information: (A) the Subscriber’s name and address, (B) the number of Shares intended to be purchased by the Subscriber, and (C) the amount paid by the Subscriber for the Shares.  During the Escrow Period, neither the Company nor the Transfer Agent will be entitled to any principal funds received into the Escrow Account.

 

(4)                                 The Escrow Agent agrees to promptly process for collection the instruments of payment upon deposit into the Escrow Accounts.  Deposits shall be held in the Escrow Account until such funds are disbursed in accordance with Sections 2(b)(1)(A)-(B) hereof, and Section 3 and Section 4 hereof for the NY Escrow Account and PA Escrow Account, as applicable.  Prior to disbursement of the funds deposited in the Escrow Accounts, such funds shall not be subject to claims by creditors of the Company or the Dealer Manager or any of their affiliates.  If any of the instruments of payment are returned to the Escrow Agent for nonpayment prior to receipt of the Required Capital (or the New York Required Capital or Pennsylvania Required Capital, as applicable), the Escrow Agent shall promptly notify the Dealer Manager, the Company and the Transfer Agent in writing by mail, email or facsimile of such nonpayment, and is authorized to debit the Escrow Accounts, as applicable, in the amount of such returned payment.

 

(5)                                 The Company hereby directs the Escrow Agent to provide the Transfer Agent with all electronic files and information needed by the Transfer Agent to perform its duties as record keeper under the agency agreement between the Transfer Agent and the Company.

 

(b)                               Distribution of the Escrowed Funds.

 

(1)                             Subject to the provisions of Sections 2(b)(2)-(4) below:

 

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(A)                               Once the collected funds in the Escrow Account are an amount equal to or greater than the Required Capital, the Escrow Agent shall promptly notify the Company and, upon receiving written instructions and certification of approval by the Company that the collected funds in the Escrow Account are an amount equal to or greater than the Required Capital, disburse to the Company, by check or wire transfer, the funds in the Escrow Account representing the gross purchase price for the Shares (other than any funds received from Pennsylvania Subscribers and New York Subscribers which cannot be released until the conditions of Section 3 and Section 4, respectively, have been met), together with any interest thereon.  For purposes of this Agreement, the term “collected funds” shall mean all funds received by the Escrow Agent that have cleared normal banking channels and are in the form of cash or a cash equivalent.  After the satisfaction of the aforementioned provisions of this Section 2(b)(1)(A), in the event the Company receives subscriptions made payable to the Escrow Agent, subscription proceeds may continue to be received in this account generally, but such proceeds (other than any funds received from Pennsylvania Subscribers and New York Subscribers) are not subject to this Agreement and at the instruction of the Company to the Escrow Agent shall be transferred from the Escrow Account or deposited directly into, as the case may be, a commercial deposit account in the name of the Company with the Transfer Agent (the “Deposit Account”) that has been previously established by the Company, unless otherwise directed by the Company.  The Company hereby covenants and agrees that it shall do all things necessary in order to establish the Deposit Account prior to its use.  No provisions of this Agreement shall apply to the Deposit Account.

 

(B)                               In order to induce the Escrow Agent to deposit into the Deposit Account any instruments for payment payable to the Escrow Agent, the Company warrants and represents that any subscription agreement or other disclosure provided to a subscriber of Shares shall specify that, notwithstanding such instruments for payment naming the Escrow Agent as payee thereon, it shall not be maintained in an escrow account with the Escrow Agent after the Required Capital (or New York Required Capital or Pennsylvania Required Capital, as applicable) has been achieved.

 

(2)                             Within four (4) business days of the Threshold Date, the Escrow Agent shall promptly notify the Company if it is not in receipt of deposits for the purchase of Shares providing for total purchase proceeds that equal or exceed the Required Capital.  The Company agrees that it will provide, or cause to be provided, to the Escrow Agent an executed Form W-9 for each Subscriber by the end of the ninth (9th) day following the date of such notice if interest will be payable to any such Subscribers.  On the tenth (10th) day following the date of such notice, the Escrow Agent shall promptly return directly to each Subscriber the collected funds deposited in the Escrow Account on behalf of such Subscriber, or shall return the instruments of payment delivered, but not yet processed for collection prior to such time, in each case, together with interest in the amounts calculated pursuant to Section 2(b)(4) for each Subscriber at the address provided by the Dealer Manager or the Company.

 

However, the Escrow Agent shall not be required to remit any payments until funds represented by such payments have been collected.

 

(3)                                 If the Company rejects any subscription for which the Escrow Agent has collected funds, the Escrow Agent shall, upon the written request of the Company, promptly issue a refund to the rejected Subscriber.  If the Company rejects any

 

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subscription for which the Escrow Agent has not yet collected funds but has submitted the Subscriber’s check for collection, the Escrow Agent shall promptly return the funds in the amount of the Subscriber’s check to the rejected Subscriber after such funds have been collected.  If the Escrow Agent has not yet submitted a rejected Subscriber’s check for collection, the Escrow Agent shall promptly remit the Subscriber’s check directly to the Subscriber.

 

(4)                                 If the Company determines that interest will be payable to Subscribers as provided in Section 2(b)(2), Section 4 or Section 6 hereof, the Company agrees that it will inquire of the Escrow Agent whether the Escrow Agent is in possession of all Subscribers’ executed Forms W-9 or such Subscribers’ federal tax identification numbers provided by the Company, and agrees that it will not accept subscriptions of any Subscriber for which the Escrow Agent is not in possession of an executed Form W-9 provided by the Company, provided that the Escrow Agent has so informed the Company.  The Escrow Agent shall not be required to remit any payments until funds represented by such payments have been collected by the Escrow Agent.  The Escrow Agent shall issue checks for interest earned on subscription proceeds and IRS Forms 1099 relating thereto to Subscribers. [If an investor fails to remit an executed Form W-9 to the Escrow Agent prior to the date the Escrow Agent returns such funds, the Escrow Agent shall withhold 30% of the earnings attributable to such investor’s funds, in accordance with Treasury Regulations.]

 

3.                                      Distribution of Escrowed Funds from New York Subscribers.

 

Notwithstanding anything to the contrary herein, disbursements of funds contributed by New York Subscribers may only be distributed in compliance with the provisions of this Section 3.  Irrespective of any disbursement of funds from the Escrow Account or PA Escrow Account pursuant to Section 2 or Section 4 hereof, the Escrow Agent will continue to place deposits from the New York Subscribers into the NY Escrow Account until such time as the Company notifies the Escrow Agent in writing that total subscriptions (including amounts in the Escrow Account previously disbursed as directed by the Company and the amounts then held in the Escrow Account but excluding the amounts held in the PA Escrow Account for Pennsylvania Subscribers unless the conditions for disbursement in Section 4 have been met) equal or exceed $2.5 million (the “New York Required Capital”), whereupon the Escrow Agent shall disburse to the Company, at the Company’s request, the principal amount of the funds from the New York Subscribers received by the Escrow Agent for accepted subscriptions and any interest earned on such New York Subscribers’ subscription payments while such payments were held in the NY Escrow Account.  However, the Escrow Agent shall not disburse to the Company those funds of a subscriber, the subscription of which has been rejected or rescinded, if the Escrow Agent has been notified by the Company of such rejection or rescission.  Following such disbursements, in the event the Company receives subscriptions from New York Subscribers made payable to the Escrow Agent, such subscription proceeds are not subject to this Agreement and shall be deposited into the Escrow Account or, at the instruction of the Company to the Escrow Agent, shall be transferred from the Escrow Account to, or deposited directly into, as the case may be, the Deposit Account.  In the event the Company has not received the New York Required Capital by the Threshold Date, the Escrow Agent shall return the subscriptions of the New York Subscribers within ten (10) business days after the last day of the Offering period.

 

4.                                      Distribution of the Escrowed Funds from Pennsylvania Subscribers.

 

(a)                                 Notwithstanding anything to the contrary herein, disbursements of funds contributed by Pennsylvania Subscribers may only be distributed in compliance with the provisions of this Section 4.  Irrespective of any disbursement of funds from the Escrow Accounts pursuant to Section 2 or Section 3 hereof, the Escrow Agent will continue to place deposits from the Pennsylvania Subscribers into the PA Escrow Account until such

 

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time as the Company notifies the Escrow Agent in writing that total subscriptions (including amounts in the PA Escrow Account previously disbursed as directed by the Company and the amounts then held in the PA Escrow Account) equal or exceed $150 million (the “Pennsylvania Required Capital”), whereupon the Escrow Agent shall disburse to the Company, at the Company’s request, the principal amount of the funds from the Pennsylvania Subscribers received by the Escrow Agent for accepted subscriptions and any interest earned on such Pennsylvania Subscribers’ subscription payments while such payments were held in the PA Escrow Account.  However, the Escrow Agent shall not disburse to the Company those funds of a subscriber, the subscription of which has been rejected or rescinded, if the Escrow Agent has been notified by the Company of such rejection or rescission. Following such disbursements, in the event the Company receives subscriptions from Pennsylvania Subscribers made payable to the Escrow Agent, such subscription proceeds are not subject to this Agreement and shall be deposited into the Escrow Account or, at the instruction of the Company to the Escrow Agent, shall be transferred from the Escrow Account to, or deposited directly into, as the case may be, the Deposit Account.

 

(b)                                 If the Company has not received total subscriptions of at least the Pennsylvania Required Capital within 120 days of the date the Company first receives a subscription from a Pennsylvania Subscriber (the “Initial Escrow Period”), the Company shall notify each Pennsylvania Subscriber by certified mail or any other means (whereby receipt of delivery is obtained) of the right of Pennsylvania Subscribers to have their investment returned to them. If, pursuant to such notice, a Pennsylvania Subscriber requests the return of his or her subscription funds within ten (10) days after receipt of the notification (the “Request Period”), the Escrow Agent shall promptly refund, without interest and without deduction, directly to each Pennsylvania Subscriber the funds deposited in the PA Escrow Account on behalf of the Pennsylvania Subscriber.

 

(c)                                The funds of Pennsylvania Subscribers who do not request the return of their funds within the Request Period shall remain in the PA Escrow Account for successive 120-day escrow periods (each a “Successive Escrow Period”), each commencing automatically upon the termination of the prior Successive Escrow Period, and the Company and Escrow Agent shall follow the notification and payment procedure set forth in Section 4(b) above with respect to the Initial Escrow Period for each Successive Escrow Period, except that a pro rata share of any interest earned on funds deposited during each Successive Escrow Period shall be paid to each Pennsylvania Subscriber as well, until the occurrence of the earliest of (i) the termination of the offering by the Company prior to the receipt of the Pennsylvania Required Capital, (ii) the receipt and acceptance by the Company of total subscriptions that equal or exceed the Pennsylvania Required Capital and the disbursement of the PA Escrow Account on the terms specified in this Section 4, or (iii) all funds held in the PA Escrow Account having been returned to the Pennsylvania Subscribers in accordance with the provisions hereof.

 

(d)                               If the Company has not received total subscriptions of at least the Pennsylvania Required Capital within 365 days after the Threshold Date, all funds in the PA Escrow Account will be promptly returned in full to such Pennsylvania Subscribers, together with their pro rata share of any interest earned thereon after the Initial Escrow Period pursuant to instructions made by the Company, upon which the Escrow Agent may conclusively rely.

 

5.                                      Escrowed Funds.  Prior to the disbursement of funds deposited in the Escrow Accounts in accordance with the provisions of Section 2(b), Section 3 and Section 4 hereof, the Escrow Agent shall

 

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invest all of the funds deposited as well as earnings and interest derived therefrom in UMB Bank Money Market Special, an interest-bearing bank money market account permitted under Rule 15c2-4 of the Securities Exchange Act of 1934, as amended.  The Escrow Agent shall not invest funds deposited or any earnings or interest derived therefrom in any other investment without the prior written direction or approval from the Company.

 

Income, if any, resulting from the investment of the Escrowed Funds shall be retained by the Escrow Agent, and shall be distributed according to this Agreement.

 

6.                                      Interest Payable to Subscribers.  If the Offering terminates prior to receipt of the Required Capital or one or more Pennsylvania Subscribers elects to have his or her subscription returned in accordance with Section 4, interest income earned on subscription proceeds (the “Escrow Income”) deposited in the Escrow Accounts shall be allocated among Subscribers on a pro rata basis and without any deductions for any fees or expenses.  The Escrow Agent shall remit the Escrow Income in accordance with Section 2(b)(4).  If the Company chooses to leave the Escrow Accounts open after receiving the Required Capital, then it shall make regular acceptances of subscriptions therein, but no less frequently than monthly, and the Escrow Income from the last such acceptance shall be calculated and remitted to the Subscribers or the Company, as applicable, pursuant to the provisions of Section 2(b)(4).

 

7.                                      Reporting by Escrow Agent.  The Escrow Agent shall report to the Company up to daily but at least weekly as instructed by the Company or the Dealer Manager on the account balance in the Escrow Accounts and the activity in such account since the last report.

 

8.                                      Duties of the Escrow Agent.  The Escrow Agent shall have no duties or responsibilities other than those expressly set forth in this Agreement, and no implied duties or obligations shall be read into this Agreement against the Escrow Agent.  The Escrow Agent is not a party to, or bound by, any other agreement among the other parties hereto, and the Escrow Agent’s duties shall be determined solely by reference to this Agreement.  The Escrow Agent shall have no duty to enforce any obligation of any person, other than as provided herein.  Except as provided in Section 2(a)(1) hereof regarding ensuring that certain funds are separately accounted for on the records of the Transfer Agent, the Escrow Agent shall be under no liability to anyone by reason of any failure on the part of any party hereto or any maker, endorser or other signatory of any document or any other person to perform such person’s obligations under any such document.

 

9.                                    Liability of the Escrow Agent; Indemnification.  The Escrow Agent acts hereunder as a depository only.  The Escrow Agent is not responsible or liable in any manner for the sufficiency, correctness, genuineness or validity of this Agreement or with respect to the form of execution of the same.  The Escrow Agent shall not be liable for any action taken or omitted by it, or any action suffered by it to be taken or omitted, in good faith, and in the exercise of its own best judgment, and may rely conclusively and shall be protected in acting upon any order, notice, demand, certificate, opinion or advice of counsel (including counsel chosen by the Escrow Agent), statement, instrument, report or other paper or document (not only as to its due execution and the validity and effectiveness of its provisions, but also as to the truth and acceptability of any information therein contained) which is believed by the Escrow Agent to be genuine and to be signed or presented by the proper person(s).  The Escrow Agent shall not be held liable for any error in judgment made in good faith by an officer or employee of the Escrow Agent unless it shall be proved that the Escrow Agent was grossly negligent or reckless in ascertaining the pertinent facts or acted intentionally in bad faith.  The Escrow Agent shall not be bound by any notice of demand, or any waiver, modification, termination or rescission of this Agreement or any of the terms hereof, unless evidenced by a writing delivered to the Escrow Agent signed by the proper party or parties and, if the duties or rights of the Escrow Agent are affected, unless it shall give its prior written consent thereto.

 

The Escrow Agent may consult legal counsel and shall exercise reasonable care in the selection of such counsel, in the event of any dispute or question as to the construction of any provisions hereof or

 

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its duties hereunder, and it shall incur no liability and shall be fully protected in acting in accordance with the reasonable opinion or instructions of such counsel.

 

The Escrow Agent shall not be responsible, may conclusively rely upon and shall be protected, indemnified and held harmless by the Company, for the sufficiency or accuracy of the form of, or the execution, validity, value or genuineness of any document or property received, held or delivered by it hereunder, or of the signature or endorsement thereon, or for any description therein; nor shall the Escrow Agent be responsible or liable in any respect on account of the identity, authority or rights of the persons executing or delivering or purporting to execute or deliver any document, property or this Agreement.

 

In the event that the Escrow Agent shall become involved in any arbitration or litigation relating to the Escrowed Funds, the Escrow Agent is authorized to comply with any decision reached through such arbitration or litigation.

 

The Company hereby agrees to indemnify the Escrow Agent for, and to hold it harmless against, any loss, liability or expense incurred in connection herewith without gross negligence, recklessness or willful misconduct on the part of the Escrow Agent, including without limitation legal or other fees arising out of or in connection with its entering into this Agreement and carrying out its duties hereunder, including without limitation the costs and expenses of defending itself against any claim of liability in the premises or any action for interpleader.  The Escrow Agent shall be under no obligation to institute or defend any action, suit, or legal proceeding in connection herewith, unless first indemnified and held harmless to its satisfaction in accordance with the foregoing, except that the Escrow Agent shall not be indemnified against any loss, liability or expense arising out of its own gross negligence, recklessness or willful misconduct.  Such indemnity shall survive the termination or discharge of this Agreement or resignation of the Escrow Agent.

 

10.                             The Escrow Agent’s Fee.  The Escrow Agent shall be entitled to fees and expenses for its regular services as Escrow Agent as set forth in Exhibit A.  Additionally, the Escrow Agent is entitled to reasonable fees for extraordinary services and reimbursement of any reasonable out of pocket and extraordinary costs and expenses related to its obligations as Escrow Agent under this Agreement, including, but not limited to, reasonable attorneys’ fees.  All of the Escrow Agent’s compensation, costs and expenses shall be paid by the Company.

 

11.                             Security Interests.  No party to this Agreement shall grant a security interest in any monies or other property deposited with the Escrow Agent under this Agreement, or otherwise create a lien, encumbrance or other claim against such monies or borrow against the same.

 

12.                             Dispute.  In the event of any disagreement between the undersigned or the person or persons named in the instructions contained in this Agreement, or any other person, resulting in adverse claims and demands being made in connection with or for any papers, money or property involved herein, or affected hereby, the Escrow Agent shall be entitled to refuse to comply with any demand or claim, as long as such disagreement shall continue, and in so refusing to make any delivery or other disposition of any money, papers or property involved or affected hereby, the Escrow Agent shall not be or become liable to the undersigned or to any person named in such instructions for its refusal to comply with such conflicting or adverse demands, and the Escrow Agent shall be entitled to refuse and refrain to act until:

 

(a)                                 the rights of the adverse claimants shall have been fully and finally adjudicated in a court assuming and having jurisdiction of the parties and money, papers and property involved herein or affected hereby, or

 

(b)                                 all differences shall have been adjusted by agreement and the Escrow Agent shall have been notified thereof in writing, signed by all the interested parties.

 

13.                                            Resignation of Escrow Agent.  The Escrow Agent may resign or be removed, at any time, for any reason, by written notice of its resignation or removal to the proper parties at their respective

 

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addresses as set forth herein, at least 60 days before the date specified for such resignation or removal to take effect.  Upon the effective date of such resignation or removal:

 

(a)                                              all cash and other payments and all other property then held by the Escrow Agent hereunder shall be delivered by it to such successor escrow agent as may be designated in writing by the Company, whereupon the Escrow Agent’s obligations hereunder shall cease and terminate;

 

(b)                                                if no such successor escrow agent has been designated by such date, all obligations of the Escrow Agent hereunder shall cease and terminate, and the Escrow Agent’s sole responsibility thereafter shall be to keep all property then held by it and to deliver the same to a person designated in writing by the Company or in accordance with the directions of a final order or judgment of a court of competent jurisdiction; and

 

(c)                                               further, if no such successor escrow agent has been designated by such date, the Escrow Agent may petition any court of competent jurisdiction for the appointment of a successor agent and the Escrow Agent may pay into court all monies and property deposited with the Escrow Agent under this Agreement.

 

14.                             Notices.  All notices, demands and requests required or permitted to be given under the provisions hereof must be in writing and shall be deemed to have been sufficiently given, upon receipt, if (a) personally delivered, (b) sent by telecopy and confirmed by phone or (c) mailed by registered or certified mail, with return receipt requested, delivered as follows:

 

	
(1) If to   the Company:
    	
 
    	
Adaptive   Real Estate Income Trust, Inc.
    
	
 
    	
 
    	
15601   Dallas Parkway, Suite 600
    
	
 
    	
 
    	
Addison,   Texas 75001
    
	
 
    	
 
    	
Attention:   Legal Department
    
	
 
    	
 
    	
Telephone:   (214) 655-1600
    
	
 
    	
 
    	
Facsimile:   (214) 655-1610
    
	
 
    	
 
    	
 
    
	
(2) If to   the Escrow Agent:
    	
 
    	
UMB   Bank, N.A.
    
	
 
    	
 
    	
1010   Grand Blvd., 4th Floor
    
	
 
    	
 
    	
Mail   Stop: 1020409
    
	
 
    	
 
    	
Kansas   City, Missouri 64106
    
	
 
    	
 
    	
Attention:   Lara Stevens, Corporate Trust
    
	
 
    	
 
    	
Telephone:   (816) 860-3017
    
	
 
    	
 
    	
Facsimile:   (816) 860-3029
    
	
 
    	
 
    	
 
    
	
(3) If   to Dealer Manager:
    	
 
    	
Behringer   Securities LP
    
	
 
    	
 
    	
15601   Dallas Parkway, Suite 600
    
	
 
    	
 
    	
Addison,   Texas 75001
    
	
 
    	
 
    	
Attention:   Legal Department
    
	
 
    	
 
    	
Telephone:   (214) 655-1600
    
	
 
    	
 
    	
Facsimile:   (214) 655-1610
    

 

15.                             Governing Law.  This Agreement shall be construed and enforced in accordance with the laws of the State of Texas without regard to the principles of conflicts of law.

 

16.                             Binding Effect; Benefit.  This Agreement shall be binding upon and inure to the benefit of the permitted successors and assigns of the parties hereto.

 

17.                             Modification.  This Agreement may be amended, modified or terminated at any time by a writing executed by the Company, the Dealer Manager and the Escrow Agent.

 

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18.                             Assignability.  This Agreement shall not be assigned by the Escrow Agent without the Company’s prior written consent.  Each of the Company and the Dealer Manager may assign this Agreement without the Escrow Agent’s consent.

 

19.                             Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.  Copies, telecopies, facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be authentic and valid counterparts of such original documents for all purposes, including the filing of any claim, action or suit in the appropriate court of law.

 

20.                             Headings.  The section headings contained in this Agreement are inserted for convenience only, and shall not affect, in any way, the meaning or interpretation of this Agreement.

 

21.                             Severability.  This Agreement constitutes the entire agreement among the parties and supersedes all prior and contemporaneous agreements and undertakings of the parties in connection herewith.  No failure or delay of the Escrow Agent in exercising any right, power or remedy may be, or may be deemed to be, a waiver thereof; nor may any single or partial exercise of any right, power or remedy preclude any other or further exercise of any right, power or remedy.  In the event that any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, then to the maximum extent permitted by law, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement.

 

22.                             Earnings Allocation; Tax Matters; Patriot Act Compliance.  The Company or its agent shall be responsible for all tax reporting under this Agreement.  The Company shall provide to the Escrow Agent upon the execution of this Agreement any documentation requested and any information reasonably requested by the Escrow Agent to comply with the USA Patriot Act of 2001, as amended from time to time.

 

23.                             Sarbanes-Oxley.  The Escrow Agent will reasonably cooperate with the Company in fulfilling any of the Company’s obligations under the Sarbanes-Oxley Act of 2002, as such obligations relate to the provision of services under this Agreement, including assistance as to the documentation and auditing of the Escrow Agent’s procedures.

 

24.                               Miscellaneous.  This Agreement shall not be construed against the party preparing it, and shall be construed without regard to the identity of the person who drafted it or the party who caused it to be drafted and shall be construed as if all parties had jointly prepared this Agreement and it shall be deemed their joint work product, and each and every provision of this Agreement shall be construed as though all of the parties hereto participated equally in the drafting hereof; and any uncertainty or ambiguity shall not be interpreted against any one party.  As a result of the foregoing, any rule of construction that a document is to be construed against the drafting party shall not be applicable.

 

25.                             Termination of the Agreement.  This Agreement, except for Section 9 and Section 13 hereof, which shall continue in effect, shall terminate upon written notice from the Company to the Escrow Agent.

 

[SIGNATURE PAGE FOLLOWS]

 

10

 

	
 
    	
COMPANY:
    
	
 
    	
 
    
	
 
    	
ADAPTIVE   REAL ESTATE INCOME TRUST, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Robert   S. Aisner
    
	
 
    	
Title:
    	
Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
DEALER MANAGER:
    
	
 
    	
 
    
	
 
    	
BEHRINGER   SECURITIES LP
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Gerald   J. Reihsen, III
    
	
 
    	
Title:
    	
President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
ESCROW AGENT:
    
	
 
    	
 
    
	
 
    	
UMB   BANK, N.A.
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    	
Lara   Stevens
    
	
 
    	
Title:
    	
Vice   President
    

 

Signature Page

 

 

EXHIBIT A

 

ESCROW FEES AND EXPENSES

 

One Time Acceptance Fee

 

	
Review document, establish   accounts, and
    	
 
    	
[to be discussed]
    
	
 
    	
 
    	
 
    
	
Set up recon file/feeds with   Transfer Agent
    	
 
    	
 
    

 

Transactional Fees, if provided

 

	
Outgoing Wire Transfer
    	
 
    	
$
    	
15   each
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Web Exchange Access
    	
 
    	
$
    	
60   per month
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
Overnight Delivery/Mailings
    	
 
    	
$
    	
16.50   each
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
IRS Tax Reporting
    	
 
    	
$
    	
10   per 1099
    	
 
    

 

One Time Acceptance Fee will be payable at the initiation of the escrow.  Transactional fees, if any, will be billed quarterly in arrears. Other fees and expenses will be billed as incurred. If the Escrow Accounts are open for a period longer than 1 year than an additional $2,500 will be charged for each year the Escrow Accounts are opened, to be billed annually in advance.

 

Fees specified are for the regular, routine services contemplated by the Escrow Agreement, and any additional or extraordinary services, including, but not limited to disbursements involving a dispute or arbitration, or administration while a dispute, controversy or adverse claim is in existence, will be charged based upon time required at the then standard hourly rate. In addition to the specified fees, all expenses related to the administration of the Escrow Agreement (other than normal overhead expenses of the regular staff) such as, but not limited to, travel, postage, shipping, courier, telephone, facsimile, supplies, legal fees, accounting fees, etc., will be reimbursable.Exhibit 10.4

 

BEHRINGER HARVARD HOLDINGS
 SERVICE MARK LICENSE AGREEMENT

 

THIS SERVICE MARK LICENSE AGREEMENT (this “Agreement”) is made and entered into this [   ] day of [              ], 2013, (the “Effective Date”), by and between BEHRINGER HARVARD HOLDINGS, LLC, a Delaware limited liability company (the “Licensor”), and ADAPTIVE REAL ESTATE INCOME TRUST, INC., a Maryland corporation (the “Licensee”).

 

RECITALS

 

WHEREAS, Licensor is the owner of valid and subsisting rights in and to the service marks “ADAPTIVE REAL ESTATE INCOME TRUST”, “ADAPTIVE REIT”, “ADAPTIVE”, and “AREIT” and similar marks in a variety of design and words-only formats, both in the United States and in various foreign jursidictions (referred to herein collectively as the “Licensed Marks”); and

 

WHEREAS, of even date herewith, Adaptive Real Estate Income Trust Advisors, LLC, a Texas limited liability company and an affiliate of Licensor (the “Advisor”), and Licensee have entered into an Advisory Management Agreement, pursuant to the terms of which Advisor will provide certain management and financial advisory services to Licensee in accordance with the terms and conditions thereof (the “Advisory Agreement”); and

 

WHEREAS, Licensor is a “sponsor” of Licensee, as that term is defined in the charter of Licensee; and

 

WHEREAS, for so long as Licensor desires to sponsor Licensee, Licensor desires to permit Licensee to utilize the Licensed Marks solely in connection with the operation and promotion of Licensee’s real estate business as intended to be conducted as of the Effective Date (the “REIT Operations”).

 

NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement, the Advisory Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and accepted by the parties to this Agreement, Licensor and Licensee mutually agree as follows:

 

AGREEMENTS

 

1.              Grant of License; Territory.

 

a.                                      Upon the terms and conditions hereinafter set forth, Licensor hereby grants to Licensee, for the period specified in Section 5 hereof, a non-exclusive, royalty-free, limited and nontransferable license to use the Licensed Marks solely for the purpose of identifying and promoting the REIT Operations worldwide.  In addition, each person or entity directly or indirectly controlled by Licensee on or after the Effective Date, either through the ownership of voting securities or otherwise (each person or entity a “Licensee Subsidiary”), shall have all of the rights granted to Licensee in this Section 1(a), but only during the period that the person or entity is directly or indirectly controlled by Licensee, either through the ownership of voting securities or otherwise.  Any reference in this Agreement to use of the Licensed Marks by or other actions of Licensee shall be deemed to include use of the Licensed Marks by or other actions of any Licensee Subsidiary during the period that the Licensee Subsidiary is directly or indirectly controlled by Licensee, either through the ownership of voting securities or otherwise.

 

 

b.                                      Licensor expressly reserves all rights with respect to the Licensed Marks not expressly granted herein.  Except as provided in Section 1(a) with respect to a Licensee Subsidiary, Licensee shall have no right to sublicense the use of the Licensed Marks to any other person or entity without the prior written consent of Licensor, which may be withheld or granted in Licensor’s sole and absolute discretion.

 

2.              Acknowledgement of Ownership.

 

a.                                      Licensee acknowledges the great value of the goodwill associated with the Licensed Marks and the ownership of the Licensed Marks by Licensor.  Licensee agrees that nothing in this Agreement shall give Licensee any right, title, or interest in or to the Licensed Marks other than the rights granted the Licensee in accordance with this Agreement.  Licensee further acknowledges that all goodwill arising from the ownership and use of the Licensed Marks (as distinguished from any enhancement of value to Licensee’s business arising from the license granted hereunder) shall inure exclusively to the benefit of Licensor.  All artwork, designs, stylized logotypes or other presentation materials whatsoever including the Licensed Marks or any elements thereof, and all copies and extracts thereof shall, notwithstanding their invention or use by Licensee, be and remain the sole property of Licensor.  Nothing in this Agreement shall be construed to prevent Licensor from granting any other licenses for the use of the Licensed Marks or from utilizing the Licensed Marks, or any variation thereof, in any manner whatsoever.

 

b.                                      Licensee agrees that it shall not challenge the title of Licensor to the Licensed Marks, the validity of the Licensed Marks, or the validity of this Agreement.  Licensee further agrees that it shall not at any time commence any opposition or cancellation proceeding regarding the Licensed Marks, or any other mark of Licensor, with the U.S. Patent and Trademark Office or any other agency that registers trademarks, commence any civil proceeding for damages or injunctive relief or make any other legal claim that would, directly or indirectly, hinder the value of or the Licensor’s ownership or use of the Licensed Marks or prevent the U.S. Patent and Trademark Office or any other agency that registers trademarks from issuing trademark registrations to Licensor for the Licensed Marks, or any variations thereof, or from renewing any trademark registrations for the Licensed Marks, or any variations thereof.

 

c.                                       Licensee shall not register or attempt to register the Licensed Marks alone or as part of its own trademark, service mark, Internet domain name, copyright, assumed name or trade name (except as may be otherwise required by applicable law in connection with Licensee’s REIT Operations during the term of this Agreement), nor shall Licensee use in such manner or attempt to register any name or designation confusingly similar to any of the Licensed Marks as determined in Licensor’s sole and absolute discretion.

 

d.                                      Licensee may not use the Licensed Marks in any manner to disparage or cause harm to Licensor, its products or services, or in any manner which, in Licensor’s reasonable judgment, may diminish or otherwise damage Licensor’s goodwill in the Licensed Marks or Licensor’s business reputation.

 

e.                                       The provisions of this Section 2 shall survive the expiration or termination of this Agreement for any reason.

 

3.              Quality Control.

 

a.                                      Licensee shall use the Licensed Marks solely as permitted in Section 1(a) above in a manner that will reasonably protect Licensor’s rights and goodwill therein, and will comply with all reasonable and customary trademark usage guidelines delivered to Licensee by Licensor from time to time, including those regarding the use of notices, legends, or markings that may be required by Licensor in order to give customary notice of ownership, including those provided in Section 4 hereof.

 

2

 

b.                                      Licensee shall, upon Licensor’s reasonable request: (i) permit Licensor to inspect the manner in which Licensee exercises the rights granted hereunder to use the Licensed Marks, and (ii) make available for Licensor’s inspection, at reasonable times and after reasonable notice from Licensor, all of Licensee’s materials relating to or displaying the Licensed Marks or any elements thereof.

 

c.                                       Licensee agrees that the products and services offered in connection with the Licensed Marks shall be sold and distributed in accordance with all Federal, State and local laws.

 

d.                                      If at any time the Licensee’s promotional materials, documents or signage bearing any of the Licensed Marks do not meet the quality standards described in this Section 3, Licensor shall have the right to require the Licensee to discontinue any and all nonconforming uses of the Licensed Marks immediately upon notice whereupon Licensee agrees to use its best efforts to cease all nonconforming uses immediately.

 

4.                                      Protection of Licensed Marks.

 

a.                                      Each time any of the Licensed Marks is used on any product, document, signage, exterior display or other printed or tangible material or on the Internet, Licensee shall legibly include either the trademark or service mark notice “TM” or “SM”, as appropriate, or the Federal registration notice ®, if directed to do so by Licensor, adjacent to the first prominent use of the Licensed Marks therein or thereon.

 

b.                                      When directed by Licensor to do so, Licensee shall include a notice, such as the following notice, on any packaging, product, advertising, or promotional materials incorporating the Licensed Marks presented in any medium now known or hereafter created:

 

“ADAPTIVE REAL ESTATE INCOME TRUST”, “ADAPTIVE REIT”, “ADAPTIVE” and “AREIT” are service marks of Behringer Harvard Holdings, LLC.

 

c.                                       Licensee agrees to provide Licensor with any assistance as Licensor may reasonably require, at Licensor’s expense, in the procurement of any protection of Licensor’s rights to the Licensed Marks, or any similar mark.

 

d.                                      Licensee agrees that at all times during the term of this Agreement it will diligently and continuously cause to be promoted and rendered the REIT Operations as set forth in Section 1 hereof.  Licensor shall not be under any obligation whatsoever to utilize the Licensed Marks or any variation thereof.

 

5.                                      Term.

 

This Agreement shall continue in force and effect from the Effective Date and shall be coterminous with the Licensor’s sponsorship of Licensee, unless terminated earlier as provided for herein.  For purposes of the preceding sentence, Licensor’s sponsorship shall be deemed to continue until the time that no Affiliate (as that term is defined in the Advisory Agreement) of Licensor serves as an officer or director of Licensee.

 

6.                                      Termination.

 

a.                                      If Licensee breaches or otherwise fails to perform any of its obligations hereunder, Licensor shall have the right to terminate this Agreement upon thirty (30) days’ prior written notice to Licensee, but only in the event the failure of performance is not cured to Licensor’s satisfaction within the

 

3

 

thirty (30) day period.  Termination of this Agreement shall be without prejudice to any rights or remedies that Licensor may otherwise have against Licensee, which rights and remedies shall survive any termination.

 

b.                                      If at any time during the term of this Agreement Licensee ceases to conduct the REIT Operations under the Licensed Marks, Licensor, in addition to all other remedies available to it hereunder, may immediately terminate this Agreement by giving written notice of termination to Licensee.

 

c.                                       If Licensee files a petition in bankruptcy or is adjudicated bankrupt or if a petition in bankruptcy is filed against Licensee or if it becomes insolvent, or makes an assignment for the benefit of its creditors or an arrangement pursuant to any bankruptcy law, or if Licensee liquidates or discontinues its business or if a receiver is appointed for it or its business, the license hereby granted and this Agreement shall automatically terminate forthwith without any notice whatsoever being necessary.  In the event this Agreement is so terminated, Licensee, its receivers, representatives, trustees, agents, administrators, successors or assigns shall have no right to sublicense, sell, exploit or in any way deal with or in or use the Licensed Marks or any variation thereof, except with and under the special consent and instructions of Licensor in writing, which they shall be obligated to follow.

 

d.                                      Upon termination of this Agreement for any reason, Licensee agrees:  (i) to, within a reasonable time but not to exceed ninety (90) days, discontinue all use of the Licensed Marks and any name confusingly similar thereto; (ii) to, within a reasonable time but not to exceed ninety (90) days, delete, remove or cover-over all references to the Licensed Marks, or any confusingly similar variation thereof, in all of Licensee’s printed materials, signage or other exterior displays, and on the Internet; (iii) to not thereafter, directly or indirectly, identify itself in any manner as a licensee of Licensor or publicly identify itself as a former licensee of Licensor; (iv) to cooperate generally with Licensor to ensure that all rights in the Licensed Marks and the related goodwill remain the property of Licensor and to execute any instruments requested by Licensor to accomplish or confirm the foregoing; (v) that all rights granted to Licensee hereunder shall forthwith revert to Licensor without consideration other than the mutual covenants and considerations of this Agreement, and without notice; (vi) to cease to conduct any business, including, without limitation, the REIT Operations, under or to otherwise use the names “ADAPTIVE REAL ESTATE INCOME TRUST”, “ADAPTIVE REIT”, “ADAPTIVE”, or “AREIT”or any confusingly similar terms and to use its best efforts to change the corporate name of Licensee to a name that does not contain the terms “ADAPTIVE REAL ESTATE INCOME TRUST”, “ADAPTIVE REIT”, “ADAPTIVE”, or “AREIT”“ or any confusingly similar terms which may, directly or indirectly in the sole discretion of Licensor, indicate a continuing relationship between, or sponsorship of, Licensee by Licensor or any of Licensor’s Affiliates; and (vii) to deliver to Licensor within fifteen days from the date of termination any and all artwork, designs, stylized logotypes or other electronic or intangible presentation materials whatsoever including the Licensed Marks or any elements thereof prepared by or for Licensee, and all copies and extracts thereof.

 

e.                                       Licensee acknowledges that its failure to cease the use and display of the Licensed Marks, or any variation thereof, upon the termination or expiration of this Agreement will result in immediate and irreparable damage to Licensor and to the rights of any current or subsequent licensee.  Licensee acknowledges and admits that there is no adequate remedy at law for the failure to cease the use of the Licensed Marks, and Licensee agrees that in the event of such failure, Licensor shall be entitled to equitable relief by way of temporary and permanent injunction and temporary restraining order and any other further relief as any court with jurisdiction may deem just and proper.  Resort to any remedies referred to herein shall not be construed as a waiver of any other rights and remedies to which Licensor is entitled under this Agreement or otherwise.

 

4

 

7.                                      Third-Party Infringement Proceedings.

 

Licensee agrees to promptly notify Licensor of any unauthorized use of the Licensed Marks or any confusingly similar variations thereof by third parties of which Licensee becomes aware.  Licensor shall have the sole right to pursue through negotiations, litigation, or other dispute resolution procedure (“Litigation Rights”) any and all of its rights in the Licensed Marks against any third party.  Licensor’s exercise of the Litigation Rights shall be in its sole discretion and shall be at its sole cost.  Licensor shall have no duty to defend Licensee or itself or pursue any actual infringement arising out of any actions by a third party.  All recoveries received by Licensor in pursuing its Litigation Rights, if any, shall be the sole property of Licensor.

 

8.                                      Representations and Warranties.

 

a.                                      Licensor represents and warrants that this Agreement will not violate any prior licenses or rights to use the Licensed Marks granted by Licensor to any third party.

 

b.                                      Each party hereto hereby represents and warrants to the other that the party has the corporate, company or partnership power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and that the execution, delivery and performance of this Agreement by it have been duly authorized by all necessary corporate, company or partnership action.

 

9.                                      Indemnification.

 

Licensee hereby agrees to indemnify and hold Licensor harmless from and against any and all claims, suits, liabilities, judgments, and expenses, arising at law or in equity, attributable, in whole or in part, to: (i) the Licensee’s use of the Licensed Marks in violation of this Agreement or of any trademark usage guidelines provided to Licensee by Licensor; or (ii) the marketing, promotion, advertisement, distribution, or sale by Licensee of any product or service under the Licensed Marks.  Moreover, Licensee hereby further agrees to tender to Licensor the defense of any and all claims, actions and lawsuits that may be brought against Licensor arising out of, or related to, the wrongful use of the Licensed Marks by the Licensee and the Licensee shall pay all fees and expenses (including all reasonable attorneys’ and expert witnesses’ fees and costs of suit) incurred in connection with defending all such claims, actions and lawsuits; provided that Licensee shall have no obligation to pay any fees or expenses for claims, actions and lawsuits brought by a third party against the Licensor claiming that the Licensed Marks violate or infringe upon the rights of the third party.  Licensor shall control the defense with counsel of its choice, however, Licensee shall have the right to participate in the defense at its own cost and expense and Licensee shall provide reasonable cooperation to Licensor and its counsel with respect thereto; provided that in no event may Licensor settle any claim, action or lawsuit in which the Licensee or a Licensee Subsidiary is a named defendant without the consent of the Licensee.  Licensor shall also have the independent right to take any action it may deem necessary, in its sole discretion, to protect and defend itself against any threatened action arising out of the business of Licensee or any actions or activity by Licensee, including Licensee’s use of the Licensed Marks or any goods or services distributed or sold under the Licensed Marks.  Notwithstanding the foregoing, Licensee’s exculpation and indemnification obligations hereunder as well as Licensee’s obligations with respect to the advancement of expenses, shall be limited as provided in its charter.

 

10.                               Limitation of Liability

 

Licensor shall not be liable to Licensee for lost profits, lost business opportunities, or any other indirect, special, punitive, incidental or consequential damages arising out of or related to this Agreement,

 

5

 

even if Licensor has been advised of the possibility of damages.  The provisions of this Section 10 shall survive the termination of this Agreement for any reason.

 

11.                               Miscellaneous

 

a.                                      Assignment.  Licensee shall neither assign any of its rights under this Agreement nor delegate any of its duties hereunder to another person or legal entity without the prior written consent of Licensor, which may be withheld in Licensor’s sole discretion.  Any attempt to assign or delegate this Agreement, or any of the rights, licenses or duties set forth herein, shall be void ab initio and convey no rights or interests in the Licensed Marks.  Licensor shall have the right, in its sole discretion, to assign any of its rights or duties under this Agreement and all of its right, title, and interest in the Licensed Marks to another person or legal entity.  Notwithstanding anything to the contrary herein, this Section 11(a) shall not limit the rights granted in Section 1(a) with respect to a Licensee Subsidiary.

 

b.                                      Notices.  All notices or other communications required or permitted to be given by either party hereto to the other party under this Agreement shall be in writing and shall be sent by United States Mail, certified or registered, postage prepaid, return receipt requested or by an internationally recognized overnight carrier, in each case addressed to the party to be notified as follows:

 

(i) to Licensee at the address set forth in the Advisory Agreement, as the same may be modified as provided therein; and

 

	
(ii) to Licensor:
    	
 
    	
Behringer Harvard Holdings, LLC
    
	
 
    	
 
    	
15601 Dallas Parkway
    
	
 
    	
 
    	
Suite 600
    
	
 
    	
 
    	
Addison, Texas 75001
    
	
 
    	
 
    	
Attention: Stanton P. Eigenbrodt
    
	
 
    	
 
    	
Executive Vice   President and
    
	
 
    	
 
    	
General Counsel
    

 

With a copy to (which shall not constitute notice):

 

	
 
    	
 
    	
Stephen L. Sapp, Esq.
   Locke Lord Bissell & Liddell LLP
   2200 Ross Avenue, Suite 2200
   Dallas, Texas 75201
    

 

Notice delivered by mail shall be deemed given on the third Business Day after being deposited in a post office or other depository under the care or custody of the United States Postal Service, enclosed in a wrapper with proper postage affixed.  Notice given by overnight courier shall be deemed given upon receipt by the recipient of notice.  Licensor may change the address for notice specified herein by providing written notice to Licensee as set forth herein.

 

c.                                       Independent Contractors.  The parties acknowledge and agree that they are dealing with each other hereunder as independent contractors.  Nothing contained in this Agreement shall be interpreted as constituting either party the joint venturer or partner of the other party or as conferring upon either party the power or authority to bind the other party in any transaction with third parties.

 

d.                                      Attorneys’ Fees.  In the event of any action, suit, or proceeding brought by either party to enforce the terms of this Agreement, the prevailing party shall be entitled to receive its costs, expert witness fees, and reasonable attorneys’ fees and expenses, including costs and fees on appeal.

 

6

 

e.                                       Waivers, Cumulative Remedies and Amendments.  This Agreement may be amended, modified, superseded, or canceled, and the terms and conditions hereof may be waived only by a written instrument signed by each of the parties hereto or, in the case of a waiver, by the party waiving compliance.  No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right hereunder, nor any single or partial exercise of any rights hereunder, preclude any other or further exercise thereof or the exercise of any other right hereunder.  Unless expressly set forth herein to the contrary, either party’s election of any remedies provided for in this Agreement shall not be exclusive of any other remedies available hereunder or otherwise and all remedies shall be deemed to be cumulative.

 

f.                                        Approval.  Any approval given by Licensor to Licensee under the terms of this Agreement shall not constitute a waiver of any of Licensor’s rights or Licensee’s duties under any provision of this Agreement, other than with respect to the provision for which the specific approval was provided, subject to the other provisions hereof.

 

g.                                       Survival.  Upon the termination of this Agreement for any reason, those Sections that by their express terms or which by their nature should be deemed to survive the termination of this Agreement shall survive the termination of this Agreement.

 

h.                                      Governing Law and Validity.  The parties agree that the laws of the State of Texas shall govern the interpretation and enforcement of this Agreement, without giving effect to choice of law rules.  If any provision of this Agreement is held to be void, invalid or inoperative, the event shall not affect any other provisions herein, which shall continue and remain in full force and effect as though the void, invalid or inoperative provision had not been a part hereof.

 

i.                                          Entire Agreement.  This Agreement constitutes the entire agreement between the parties hereto with respect to the Licensed Marks and related subject matter and supersedes all prior agreements and understandings, oral and written, between the parties hereto with respect to those matters.

 

[Signature Page Follows]

 

7

 

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

 

	
 
    	
LICENSOR:
    
	
 
    	
 
    
	
 
    	
BEHRINGER   HARVARD HOLDINGS, LLC
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Stanton   P. Eigenbrodt
    
	
 
    	
 
    	
Executive   Vice President and General Counsel
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
LICENSEE:
    
	
 
    	
 
    
	
 
    	
ADAPTIVE   REAL ESTATE INCOME TRUST, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Stanton   P. Eigenbrodt
    
	
 
    	
 
    	
Secretary
    

 

8

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