Document:

EXHIBIT 4.5

STATEMENT REGARDING RESTRICTIONS ON

TRANSFERABILITY OF SHARES OF COMMON STOCK

(To Appear on Stock Certificate or to
Be Sent upon Request

and without Charge to Stockholders Issued
Shares without Certificates)

The
securities of Behringer Harvard REIT II, Inc. are subject to restrictions on
Beneficial and Constructive Ownership and Transfer for the purpose of the
Company’s maintenance of its status as a real estate investment trust under the
Internal Revenue Code of 1986, as amended. 
Subject to certain further restrictions and except as expressly provided
in this Charter, (i) no Person may Beneficially or Constructively Own Common
Shares of the Company in excess of 9.8% (in value or number of Shares) of the
outstanding Common Shares of the Company unless the Person is an Excepted
Holder (in which case the Excepted Holder Limit shall be applicable); (ii) no
Person may Beneficially or Constructively Own Preferred Shares of the Company
in excess of 9.8% (in value or number of Shares) of the outstanding Preferred
Shares of the Company unless the Person is an Excepted Holder (in which case
the Excepted Holder Limit shall be applicable); (iii) no Person may
Beneficially or Constructively Own Shares that would result in the Company
being “closely held” under Section 856(h) of the Code or otherwise cause the
Company to fail to qualify as a REIT; and (iv) no Person may Transfer Shares if
the Transfer would result in the Shares of the Company being owned by fewer
than 100 Persons.  Any Person who
Beneficially or Constructively Owns or attempts to Beneficially or
Constructively Own Shares that cause or will cause a Person to Beneficially or
Constructively Own Shares in excess or in violation of the above limitations
must immediately notify the Company.  If
any of the restrictions on transfer or ownership are or would be violated, the
Shares will be deemed to have automatically transferred to a Trustee of a Trust
for the benefit of one or more Charitable Beneficiaries upon such transfer.  In addition, the Company may redeem Shares
upon the terms and conditions specified by the Board in its sole discretion if
the Board determines that ownership or a Transfer or other event may violate
the restrictions described above. 
Furthermore, upon the occurrence of certain events, attempted Transfers
in violation of the restrictions described above may be void ab initio.

Until
the Common Shares are Listed, to purchase Common Shares, the purchaser must
represent to the Company:  (i) that the
purchaser (or, in the case of sales to fiduciary accounts, that the
beneficiary, fiduciary account or grantor or donor who directly or indirectly
supplies the funds to purchase the shares if the grantor or donor is the
fiduciary) has a minimum annual gross income of $70,000 and a net worth (excluding
home, furnishings and automobiles) of not less than $70,000; or (ii) that the
purchaser (or, in the case of sales to 
fiduciary accounts, that the beneficiary, fiduciary account or grantor
or donor who directly or indirectly supplies the funds to purchase the shares
if the grantor or donor is the fiduciary) has a net worth (excluding home,
furnishings and automobiles) of not less than $250,000.  Until the Common Shares are Listed and
subject to certain individual state requirements, no sale or transfer of Common
Shares will be permitted involving an investment of less than 200 Shares, and a
Stockholder shall not transfer, fractionalize or subdivide such Shares so as to
retain less than the minimum number thereof.

All
capitalized terms in this notice have the meanings defined in the Charter of
the Company, as the same may be amended from time to time, a copy of which,
including the restrictions on transfer and ownership, will be furnished to each
holder of Shares of the Company on request and without charge.

Note:
Instead of the foregoing legend, the certificate may state that state that the
Company will furnish information about the restrictions on transfer to the
Stockholder on request and without charge.

 2EXHIBIT 10.1

FORM OF ADVISORY MANAGEMENT AGREEMENT

This ADVISORY MANAGEMENT AGREEMENT (this “Agreement”)
is entered into on this [        ] day of [                ], 2007, by and between BEHRINGER HARVARD REIT II, INC., a
Maryland corporation (the “Company”), and
BEHRINGER ADVISORS II LP, a Texas limited partnership (the “Advisor”).

W I T N E S S E T H

WHEREAS, the Company will be issuing shares of
its common stock, par value $0.0001, to the public, such shares to be
registered with the Securities and Exchange Commission and may subsequently
issue additional securities;

WHEREAS, the Company has been formed to
acquire and operate institutional quality commercial real estate and real
estate assets, including direct and indirect interests in office, industrial,
retail, hospitality, recreation and leisure, multifamily, public infrastructure
and other real estate assets;

WHEREAS, the Company intends to qualify as a
real estate investment trust and intends to invest its funds in investments
permitted by the terms of the Company’s Articles of Incorporation and Sections
856 through 860 of the Internal Revenue Code;

WHEREAS, the Company desires to avail itself
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, all as provided herein; and

WHEREAS, the Advisor is willing to undertake
to provide these services, subject to the supervision of the Board, on the
terms and conditions hereinafter set forth.

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

ARTICLE I

DEFINITIONS

 

The following defined terms used in this Agreement shall have the
meanings specified below: 

2%/25% Guidelines.  The requirement pursuant to the NASAA Guidelines
that, in any twelve month period, Total Operating Expenses not exceed the
greater of 2% of Average Invested Assets during the twelve month period or 25%
of Net Income over the same twelve month period.

Acquisition Expenses.  Any and all expenses incurred by the Company,
the Advisor, or any Affiliate of either in connection with the selection and
acquisition of any Asset, whether or not acquired, including, without
limitation, legal fees and expenses, travel and communications expenses, costs
of appraisals, nonrefundable option payments on property not acquired,
accounting fees and expenses, title insurance premiums and other closing
costs.  

Acquisition Fees.  Any and all fees and commissions, exclusive
of Acquisition Expenses but including the Acquisition and Advisory Fees, paid
by any Person to any other duly qualified and licensed Person (including any
fees or commissions paid by or to any duly qualified and licensed Affiliate of
the Company or the Advisor) in connection with making or investing in Mortgages
or other loans or the purchase, development or construction of an Asset,
including, without limitation, real estate commissions, selection fees,
investment banking fees, third party seller’s fees (to the extent the Company
agrees to pay any such fees as part of an acquisition), Development Fees,
Construction Fees, non-recurring management fees, loan fees, points or any
other fees of a similar nature.  Excluded
shall be Development Fees and Construction Fees paid to any Person not
affiliated with the Sponsor in connection with the actual development and
construction of any Property.  

Acquisition and Advisory Fees.  The fees payable to the Advisor pursuant to Section
3.01(b).  

Advisor.  Behringer Advisors II LP, a Texas limited
partnership, any successor advisor to the Company, or any Person to which
Behringer Advisors II LP or any successor advisor subcontracts all or
substantially all of its functions.  

Affiliate or Affiliated.  As to any Person, (i) any Person directly or
indirectly owning, controlling, or holding, with the power to vote, 10% or more
of the outstanding voting securities of the other Person; (ii) any Person 10%
or more of whose outstanding voting securities are directly or indirectly
owned, controlled, or held, with power to vote, by the other Person; (iii) any
Person, directly or indirectly, controlling, controlled by, or under common
control with the other Person; (iv) any executive officer, director, trustee or
general partner of the other Person; and (v) any legal entity for which the
Person acts as an executive officer, director, trustee or general partner.  

Articles of Incorporation.  The Articles of Incorporation of the Company
filed with the Maryland State Department of Assessments and Taxation in
accordance with the Maryland General Corporation Law, as amended or restated
from time to time.

Assets.  Properties, Mortgages, loans and other direct
or indirect investments (other than investments in bank accounts, money market
funds or other current assets) owned by the Company, directly or indirectly
through one or more of its Affiliates or Joint Ventures or through other
investment interests.

Asset Management Fee.  The fee payable to the Advisor for day-to-day
professional management services in connection with the Company and its
investments in Assets pursuant to Section 3.01(a) of this Agreement.

Average Invested Assets.  For a specified period, the average of the
aggregate book value of the Assets before deduction for depreciation, bad debts
or other non-cash reserves, computed by taking the average of the values at the
end of each month during the period.

Board.  The Board of Directors of the Company.

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

Change of Control.  Any
(i) event (including, without limitation, issue, transfer or other disposition
of Shares of capital stock of the Company or equity interests in the
Partnership, merger, share exchange or consolidation) after which any “person”
(as that 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 of the Exchange
Act), directly or indirectly, of securities of the Company or the Partnership
representing greater than 50% of the 

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combined voting power of the Company’s or the Partnership’s then
outstanding securities, respectively; provided, that a Change of Control
shall not be deemed to occur as a result of any widely distributed public
offering of the Shares or (ii) direct or indirect sale, transfer, conveyance or
other disposition (other than pursuant to clause (i)), in one or a series of
related transactions, of all or substantially all of the properties or assets
of the Company or the Partnership, taken as a whole, to any “person” (as that
term is used in Sections 13(d) or 14(d) of the Exchange Act).

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 the provision as in effect from time to time, as the
same may be amended, and any successor provision thereto, as interpreted by any
applicable regulations as in effect from time to time.  

Company.  Behringer Harvard REIT II, Inc., a
corporation organized under the laws of the State of Maryland.  Unless the context clearly indicates
otherwise, references to the Company shall include its direct and indirect
subsidiaries, including the Partnership.

Competitive Real Estate Commission.  A real estate or brokerage commission paid
or, if no commission is paid, the amount that customarily would be paid for the
purchase or sale of a Property that is reasonable, customary, and competitive
in light of the size, type and location of the Property (as determined by the
Board, including a majority of Independent Directors).

Construction Fee.  A fee or other remuneration for acting as
general contractor or construction manager to construct improvements, supervise
and coordinate projects or to provide major repairs or rehabilitations on a
Property.

Contract Purchase Price.  The amount actually paid or budgeted in
respect of the purchase, development, construction or improvement of a
Property, the amount of funds advanced with respect to a Mortgage or other loan
or the amount actually paid or budgeted in respect to the purchase of other Assets,
in each case exclusive of Acquisition Fees and Acquisition Expenses, but
including any debt attributable to the acquired Assets. 

Contract Sales Price.  The total consideration provided for in the
sales contract for the Sale of a Property.

Cost of Investment.
For each Asset, (i) with respect to an Asset wholly owned by the Company or any
wholly owned subsidiary, the Fully Loaded Cost, and (ii) in the case of an
Asset owned by any Joint Venture or in some other manner in which the Company
is a co-venturer or partner or otherwise a co-owner, (A) the Fully Loaded Cost
if the Company (or any subsidiary) controls the Asset; owns a majority
interest, directly or indirectly, in the Asset; or provides a substantial
amount of services in the acquisition, development, or management of the Asset
(as determined by a majority of the Independent Directors) or (B) the portion
of the Fully Loaded Cost that is attributable to the Company’s investment in
the Joint Venture or other interest in such Asset if the Company does not
control, own a majority of, or provide substantial services in the acquisition,
development, or management of, the Asset.

Dealer Manager.  Behringer Securities LP, an Affiliate of the
Advisor, or any Person selected by the Board to act as the dealer manager for
an Offering.  

Development Fee.  A fee for the packaging of an Asset,
including the negotiation and approval of plans, and any assistance in
obtaining zoning and necessary variances and financing for a specific
development Property, either initially or at a later date.

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Director.  A member of the Board.

Disposition Fee.  The fee payable to the Advisor for services
provided in connection with the Sale of one or more Properties pursuant to Section
3.01(c).

Distributions.  Any dividends or other distributions of money
or other property by the Company to Stockholders, including distributions that
may constitute a return of capital for federal income tax purposes but
excluding distributions that constitute the redemption of any Shares and
excluding distributions on any Shares before their redemption.

Exchange Act.
The Securities Exchange Act of 1934, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Exchange Act 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.

Fully Loaded Cost.  The Contract Purchase Price of an Asset
at the time of acquisition (exclusive of closing costs), plus the amount
actually paid or budgeted for the development, construction or improvement of
the Asset, inclusive of expenses related thereto, plus the amount of any
subsequent debt attributable to the Asset.

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

Independent Director.  A Director who is not on the date of
determination, and within the last two years from the date of determination has
not been, directly or indirectly associated with the Sponsor or the Advisor by
virtue of (i) ownership of an interest in the Sponsor, the Advisor or any of
their Affiliates, other than the Company, (ii) employment by the Sponsor, the
Company, the Advisor or any of their Affiliates, (iii) service as an officer or
director of the Sponsor, the Advisor or any of their Affiliates, other than as
a Director of the Company, (iv) performance of services for the Company, other
than as a Director of the Company, (v) service as a director or trustee of more
than three real estate investment trusts organized by the Sponsor or advised by
the Advisor, or (vi) maintenance of a material business or professional
relationship with the Sponsor, the Advisor or any of their Affiliates.  Notwithstanding the foregoing, and consistent
with (v) above, serving as a director of or receiving director fees from or
owning an interest in a REIT or other real estate program organized by the
Sponsor or advised or managed by the Advisor or its Affiliates shall not, by
itself, cause a Director to be deemed associated with the Sponsor or the
Advisor.  A business or professional
relationship is considered material if the aggregate annual gross revenue
derived by the Director from the Sponsor, the Advisor and their Affiliates
(excluding fees for serving as a director of the Company or other REIT or real
estate program organized or advised or managed by the Advisor or its
Affiliates) exceeds 5% of either the Director’s annual gross income during
either of the last two years or the Director’s net worth on a fair market value
basis.  An indirect association with the
Sponsor or the Advisor shall include circumstances in which a Director’s
spouse, parent, child, sibling, mother- or father-in-law, son- or
daughter-in-law, or brother- or sister-in-law is or has been associated with
the Sponsor, the Advisor, any of their Affiliates, or the Company.

Intellectual Property Rights.  All rights, titles and interests, whether
foreign or domestic, in and to any and all trade secrets, confidential
information rights, patents, invention rights, copyrights, service 

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marks, trademarks, know-how, or similar
intellectual property rights and all applications and rights to apply for the
rights, as well as any and all moral rights, rights of privacy, publicity and
similar rights and license rights of any type under the laws or regulations of
any governmental, regulatory, or judicial authority, foreign or domestic and
all renewals and extensions thereof.

Joint Ventures.  A legal organization formed to provide for
the sharing of risks and rewards in an enterprise co-owned and operated for
mutual benefit by two or more business partners and established to acquire or
hold Assets.

Listing or Listed.  The filing of a Form 8-A to register any
class of the Company’s securities on a national securities exchange and an
original listing application related thereto; provided, that the Shares
shall not be deemed to be Listed until trading in the Shares shall have
commenced on the relevant national securities exchange.  

Mortgages.  In connection with mortgage financing
provided, invested in or purchased by the Company, all of the notes, deeds of
trust, security interests or other evidence of indebtedness or obligations,
which are secured or collateralized by Real Property owned by the borrowers
under the notes, deeds of trust, security interests or other evidence of
indebtedness or obligations.  

NASAA Guidelines.  The Statement of Policy Regarding Real Estate
Investment Trusts adopted by the North American Securities Administrators
Association, Inc. on May 7, 2007, and in effect on the date hereof. 

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

Offering.  Any public offering of Shares pursuant to an
effective registration statement filed under the Securities Act.

Organization and Offering Expenses.  Any and all costs and expenses incurred by
and to be paid by the Company in connection with an Offering, the formation of
the Company, and including the qualification and registration of the Offering
and the marketing and distribution of its Shares, including, without
limitation: total underwriting and brokerage discounts and commissions
(including fees of the underwriters’ attorneys); expenses for printing,
engraving, amending registration statements and supplementing prospectuses; mailing
and distribution costs; salaries of employees while engaged in sales activity,
such as preparing supplemental sales literature; telephone and other
telecommunication costs; all advertising and marketing expenses, including the
costs related to investor and broker-dealer meetings; charges of transfer
agents, registrars, trustees, escrow holders, depositories and experts; filing,
registration and qualification fees and taxes relating to the Offering under
federal and state laws; and accountants’ and attorneys’ fees. 

Partnership.  Behringer Harvard Operating Partnership II
LP, a Texas limited partnership, through which the Company may own Assets, or
otherwise conduct its operations.

Person.  An individual, corporation, association,
business trust, estate, trust, partnership, limited liability company or other
legal entity.  

Property or Properties.  As the context requires, any, or all,
respectively, of the Real Property acquired by the Company, either directly or
indirectly (whether through Joint Ventures or other 

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investment interests, regardless of whether
the Company consolidates the financial results of these entities).  

Proprietary Property.  All
modeling algorithms, tools, computer programs, know-how, methodologies,
processes, technologies, ideas, concepts, skills, routines, subroutines,
operating instructions and other materials and aides used in performing the
duties set forth in Section 2.02 that relate to advice regarding current
and potential Assets, and all modifications, enhancements and derivative works
of the foregoing.

Prospectus.  Prospectus has the meaning set forth in
Section 2(a)(10) of the Securities Act, including a preliminary prospectus, an
offering circular as described in Rule 253 of the General Rules and Regulations
under the Securities Act or, in the case of an intrastate offering, any
document by whatever name known, utilized for the purpose of offering and
selling securities of the Company.  

Real Property or Real Estate.  Land, rights in land (including leasehold
interests), and any buildings, structures, improvements, furnishings, fixtures
and equipment located on or used in connection with land and rights or
interests in land.  

REIT.  A corporation, trust, association or other
legal entity (other than a real estate syndication) that is engaged primarily
in investing in interests in Real Estate (including fee ownership and leasehold
interests) or in loans secured by Real Estate or both in accordance with
Sections 856 through 860 of the Code.  

Sale or Sales.  (i) Any transaction or series of transactions
whereby: (A) the Company or the Partnership directly or indirectly (except as
described in other subsections of this definition) sells, grants, transfers,
conveys, or relinquishes its ownership of any Property or portion thereof,
including the lease of any Property consisting of a building only, and
including any event with respect to any Property which gives rise to a
significant amount of insurance proceeds or condemnation awards; (B) the
Company or the Partnership directly or indirectly (except as described in other
subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its ownership of all or substantially all of the interest of the
Company or the Partnership in any Joint Venture in which it is a co-venturer or
partner; (C) any Joint Venture directly or indirectly (except as described in
other subsections of this definition) in which the Company or the Partnership
as a co-venturer or partner sells, grants, transfers, conveys, or relinquishes
its ownership of any Property or portion thereof, including any event with
respect to any Property which gives rise to insurance claims or condemnation
awards; (D) the Company or the Partnership directly or indirectly (except as
described in other subsections of this definition) sells, grants, conveys or
relinquishes its interest in any Mortgage or other loan or portion thereof
(including with respect to any Mortgage or other loan, all payments thereunder
or in satisfaction thereof other than regularly scheduled interest payments of
amounts owed pursuant to the Mortgage or other loan) and any event with respect
to a Mortgage or other loan which gives rise to a significant amount of
insurance proceeds or similar awards; or (E) the Company or the Partnership
directly or indirectly (except as described in other subsections of this
definition) sells, grants, transfers, conveys, or relinquishes its ownership of
any other Asset not previously described in this definition or any portion
thereof, but (ii) not including any transaction or series of transactions
specified in clause (i) (A) through (E) above in which the proceeds of the
transaction or series of transactions are reinvested in one or more Assets
within 180 days thereafter.  

Securities Act.  The Securities Act of 1933, as amended from
time to time, or any successor statute thereto. 
Reference to any provision of the Securities Act shall mean the
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.  

 6
 

Selling Commissions.  Any and all commissions payable to
underwriters, dealer managers or other broker-dealers in connection with the
sale of Shares, including, without limitation, commissions payable to Behringer
Securities LP.

Shares.  Any shares of the Company’s common stock, par
value $0.0001 per share.  

Soliciting Dealers.  Broker-dealers who are members of the
National Association of Securities Dealers, Inc., or that are exempt from broker-dealer
registration, and who, in either case, have executed participating broker or
other agreements with the Dealer Manager to sell Shares.  

Sponsor.  Sponsor has the meaning ascribed to such term
in the Articles of Incorporation.

Stockholders.  The record holders of the Company’s Shares as
maintained in the books and records of the Company or its transfer agent.  

Termination Date.  The date of termination of this
Agreement.  

Texas Tax Code.  The Texas Tax Code as amended by Texas H.B.
3, 79th Leg., 3rd C.S. (2006).  Reference
to any provision of the Texas Tax Code Act shall mean the provision as in
effect from time to time, as the same may be amended, and any successor
provision thereto, as interpreted by any applicable administrative rules as in
effect from time to time.  

Total Operating Expenses.  All costs and expenses paid or incurred by
the Company, as determined under generally accepted accounting principles,
which are in any way related to the operation of the Company or to Company
business, including the Asset Management Fee, but excluding (i) the expenses of
raising capital such as Organization and Offering Expenses, legal, audit,
accounting, underwriting, brokerage, listing, registration, and other fees,
printing and other 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 Fees and Acquisition
Expenses, (vi) real estate commissions on the Sale of Assets (including the
Disposition Fee) and (vii) other fees and expenses connected with the
acquisition, disposition, management and ownership of real estate interests,
mortgage loans or other property (including the costs of foreclosure, insurance
premiums, legal services, maintenance, repair and improvement of
property).  

Value of Investment.  For each Asset, if available, (i) with
respect to an Asset wholly owned by the Company or any wholly owned subsidiary,
the Asset’s value established by the most recent independent valuation report
(without reduction for depreciation, bad debts or other non-cash reserves), and
(ii) in the case of an Asset owned by any Joint Venture or in some other manner
in which the Company is a co-venturer or partner or otherwise a co-owner, (A)
the Asset’s value established by the most recent independent valuation report
(without reduction for depreciation, bad debts or other non-cash reserves) if
the Company (or any subsidiary) controls the Asset; owns a majority interest,
directly or indirectly, in the Asset; or provides a substantial amount of
services in the acquisition, development, or management of the Asset (as
determined by a majority of the Independent Directors) or (B) the portion of
the Asset’s value established by the most recent independent valuation report
(without reduction for depreciation, bad debts or other non-cash reserves) that
is attributable to the Company’s investment in the Joint Venture or other
interest in such Asset if the Company does not control, own a majority of, or
provide substantial services in the acquisition, development, or management of,
the Asset.  Nothing in this definition is
intended to obligate the Advisor to obtain independent valuations at any point
in time beyond those specified in the Company’s Prospectus.

 7
 

ARTICLE II

THE ADVISOR

 

2.01        Appointment.  The Company hereby appoints the Advisor to
serve as its advisor on the terms and conditions set forth in this Agreement,
and the Advisor hereby accepts the appointment.

2.02        Duties
of the Advisor.  The Advisor shall be deemed to be in a
fiduciary relationship to the Company and its Stockholders.  Subject to Section 2.08, the Advisor
undertakes to use its commercially reasonable best efforts to present to the
Company potential investment opportunities consistent with the investment
objectives and policies of the Company as determined and adopted from time to
time by the Board.  In performance of its
duties, subject to the supervision of the Board and consistent with the
provisions of the Company’s most recent Prospectus for Shares, the Articles of
Incorporation and Bylaws, the Advisor shall, either directly or by engaging a
duly qualified and licensed Affiliate of the Advisor or other duly qualified
and licensed Person:  

(a)           provide
the Company with research and economic and statistical data in connection with
the Assets and investment policies; 

(b)           manage
the Company’s day-to-day operations and perform and supervise the various administrative
functions reasonably necessary for the management and operations of the
Company; 

(c)           maintain
and preserve the books and records of the Company, including stock books and
records reflecting a record of the Stockholders and their ownership of the
Company’s Shares;

(d)           investigate,
select, and, on behalf of the Company, engage and conduct business with the
duly qualified and licensed Persons as the Advisor deems necessary to the
proper performance of its obligations hereunder, including but not limited to
duly qualified and licensed 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, mortgagors,
property management companies, transfer agents and any and all agents for any
of the foregoing, including duly qualified and licensed Affiliates of the
Advisor, and duly qualified and licensed 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 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; 

(f)            subject
to the provisions of Sections 2.02(h) and 2.03 hereof, (i)
locate, analyze and select potential investments in Assets, (ii) structure and
negotiate the terms and conditions of transactions pursuant to which investment
in Assets will be made; (iii) make investments in Assets on behalf of the
Company or the 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,
Assets; and (v) enter into leases of Property and service 

 8
 

contracts for Assets with duly qualified and licensed Persons and, to
the extent necessary, perform all other operational functions for the
maintenance and administration of the Assets, including the servicing of
Mortgages; 

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

(h)           obtain
the prior approval of the Board (including a majority of all Independent
Directors) for any and all investments in Assets;

(i)            negotiate
on behalf of the Company with banks or lenders for loans to be made to the
Company, negotiate on behalf of the Company with investment banking firms and
broker-dealers, and negotiate private sales of Shares and other securities of
the Company or obtain loans for the Company, as and when appropriate, 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 or for the Advisor or its Affiliates), where
appropriate, concerning the value of investments or contemplated investments of
the Company in Assets; 

(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; 

(l)            assist
the Company in arranging for all necessary cash management services; 

(m)          deliver
to or maintain on behalf of the Company copies of all appraisals obtained in
connection with the investments in Assets; 

(n)           upon
request of the Company, act, or obtain the services of duly qualified and
licensed others to act, as attorney-in-fact or agent of the Company in making,
acquiring and disposing of Assets, disbursing, and collecting the funds, paying
the debts and fulfilling the obligations of the Company and retaining counsel
or other advisors to assist in handling, prosecuting and settling any claims of
the Company, including foreclosing and otherwise enforcing mortgage and other
liens and security interests comprising any of the Assets; 

(o)           supervise
the preparation and filing and distribution of returns and reports to
governmental agencies and to Stockholders and other investors and act on behalf
of the Company; 

(p)           provide
office space, equipment and personnel as required for the performance of the
foregoing services as Advisor;  

(q)           assist
the Company in preparing all reports and returns required by the Securities and
Exchange Commission, Internal Revenue Service and other state or federal
governmental agencies; and

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

 9
 

2.03        Authority
of Advisor.

(a)           Pursuant
to the terms of this Agreement (including the restrictions included in this Section
2.03 and in Section 2.06), 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 (i) locate, analyze and select
investment opportunities, (ii) structure the terms and conditions of
transactions pursuant to which investments will be made or acquired for the
Company or the Partnership, (iii) acquire Properties, make and acquire
Mortgages and other loans and invest in other Assets in compliance with the
investment objectives and policies of the Company, (iv) arrange for financing
or refinancing of Assets, (v) enter into leases for the Properties and service
contracts for the Assets with duly qualified and licensed non-affiliated and
Affiliated Persons, including oversight of non-affiliated and Affiliated
Persons that perform property management, acquisition, advisory, disposition or
other services for the Company, (vi) oversee duly qualified and licensed
property managers and other Persons who perform services for the Company, and
(vii) arrange for, or provide, accounting and other record-keeping functions at
the Asset level.

(b)           Notwithstanding
the foregoing, any investment in Assets by the Company or the Partnership (as
well as any financing acquired by the Company or the Partnership in connection
with the investment), will require the prior approval of the Board (including a
majority of the Independent Directors).

(c)           The
prior approval of a majority of the Independent Directors and a majority of the
Board not otherwise interested in the transaction will be required for each
transaction with the Advisor or its Affiliates.

(d)           If
a transaction requires approval by the Board, the Advisor will deliver to the
Directors all documents required by them to properly evaluate the proposed
transaction.  

The Board may, at any time upon the giving of notice to the Advisor,
modify or revoke the authority set forth in this Section 2.03. 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 the proposed
transactions involving investments in Assets as thereafter require prior
approval; provided, however, that the 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 the notification.  

2.04        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 account or accounts,
and disburse from any account or accounts, any money on behalf of the Company,
under the terms and conditions as the Board may approve, provided that no funds
of the Company or the Partnership shall be commingled nor shall any of such
funds be commingled with the funds of the Advisor; and the Advisor shall from
time to time render accountings of the collections and payments to the Board,
its Audit Committee and the auditors of the Company.

2.05        Records;
Access. 
The Advisor shall maintain records of all its activities hereunder and
make the 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.

 10
 

2.06        Limitations
on Activities.  Anything else in this Agreement to the
contrary notwithstanding, the Advisor shall refrain from taking any action
which, in its sole judgment made in good faith, would (a) adversely affect the
status of the Company as a REIT, (b) subject the Company to regulation under
the Investment Company Act 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, the Shares or any of the Company’s securities,
or otherwise not be permitted by the Articles of Incorporation or Bylaws,
except if the 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 the action and shall refrain from taking the 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.  The Advisor, its directors, officers, employees and
stockholders, and the directors, officers, employees and stockholders of the
Advisor’s Affiliates shall not be liable to the Company or to the Board or
Stockholders for any act or omission by the Advisor, its directors, officers,
employees or stockholders, or for any act or omission of any Affiliate of the
Advisor, its directors, officers or employees or stockholders except as
provided in Section 5.02 of this Agreement.

2.07        Relationship
with Directors.  Directors, officers and employees of the
Advisor or an Affiliate of the Advisor may serve as Directors, officers or
employees of the Company, except that no director, officer or employee of the
Advisor or its Affiliates who also is a Director shall receive any compensation
from the Company for serving as a Director other than reasonable reimbursement
for travel and related expenses incurred in attending meetings of the Board.

2.08        Other
Activities of the Advisor.  Nothing herein contained shall prevent the
Advisor or its Affiliates from engaging in other activities, including, without
limitation, rendering 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 any other business or to render services of any kind to any other
Person.  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 Person.  The
Advisor or its Affiliates shall promptly disclose to the Board knowledge of the
condition or circumstance.  The Advisor
shall inform the Board at least quarterly of the investment opportunities that
have been offered to other programs with similar investment objectives sponsored
by the Sponsor, Advisor, Director or their Affiliates. If the Sponsor, Advisor,
Director or Affiliates thereof have sponsored other investment programs with
similar investment objectives which have investment funds available at the same
time as the Company, it shall be the duty of the Board (including the
Independent Directors) to adopt the method set forth in the Company’s most
recent Prospectus for its Shares or another reasonable method by which
investments are to be allocated to the competing investment entities and to use
their best efforts to apply the method fairly to the Company.

2.09        Payment of Certain Organization and
Offering Expenses. The Company shall pay directly
all Organization and Offering Expenses considered underwriting compensation by
the Financial Industry Regulatory Authority, Inc., or FINRA. Such payments, other
than Selling Commissions and the dealer manager fee, shall reduce the payments
owed by the Company to the Advisor with respect to the fixed reimbursement of
Organization and Offering Expenses as provided in Section 3.02(a)(1)
below.

 11
 

ARTICLE III

COMPENSATION AND REIMBURSEMENT OF SPECIFIED COSTS.

 

3.01        Fees.

(a)           Asset
Management Fee.  For each and every
Asset, the Company shall pay the Advisor a monthly Asset Management Fee on the
15th day of each month in an amount equal to one-twelfth of 1% of the sum of higher
of the Cost of Investment or the Value of Investment.

(b)           Acquisition
and Advisory Fees.  The Company shall
pay the Advisor a fee in the amount of 2.5% of the Contract Purchase Price of
each Asset as Acquisition and Advisory Fees. 
The total of all Acquisition Fees and any Acquisition Expenses shall be
limited in accordance with the Articles of Incorporation.  Acquisition and Advisory Fees shall be paid
as follows: (1) for real property (including properties where
development/redevelopment is expected), at the time of acquisition, (2) for
development/redevelopment projects (other than the initial acquisition of the
real property), at the time a final budget is approved and (3) for loans and
similar assets (including without limitation mezzanine loans), quarterly based
on the value of loans made or acquired. 
In the case of a development/redevelopment project subject to clause (2)
above, upon completion of the development/redevelopment project, the Advisor
shall determine the actual amounts paid. 
To the extent the amounts actually paid vary from the budgeted amounts
on which the Acquisition and Advisory Fee was initially based, the Advisor will
pay or invoice the Company for 2.5% of the budget variance such that the
Acquisition and Advisory Fee is ultimately 2.5% of amounts expended on such
development/redevelopment project.

(c)           Disposition
Fee.  If the Advisor or an Affiliate
provides a substantial amount of services (as determined by a majority of the
Independent Directors) in connection with the Sale of one or more Assets, the
Advisor or the Affiliate shall receive, subject to the satisfaction of the
condition outlined below, a Disposition Fee in an amount (the “Disposition Fee”) equal to (subject to the
limitation in the following paragraph) (i) in the case of the sale of Property,
the lesser of (A) one-half of a Competitive Real Estate Commission or (B) 3% of
the sales price of the Property and (ii) in the case of the sale of any Asset
other than Property, 3% of the sales price of the Asset or Assets.  

The
Disposition Fee may be payable in addition to real estate commissions paid to
persons not affiliated with the Company or the Advisor and their respective
Affiliates; provided, however, that the total real estate
commissions paid to all Persons by the Company (together with the Disposition
Fee) shall in no case exceed an amount equal to the lesser of (i) 6% of the
Contract Sales Price of an Asset or (ii) the Competitive Real Estate Commission
in respect of any Property.

(d)           Debt
Financing Fee.  In the event of any
debt financing obtained by or for the Company (including any refinancing of
debt), the Company will pay to the Advisor a debt financing fee equal to 1% of
the amount available under the financing. 
The Debt Financing Fee includes the reimbursement of the specified cost
incurred by the Advisor of engaging third parties to source debt financing, and
nothing herein shall prevent the Advisor from entering fee-splitting
arrangements with third parties with respect to the Debt Financing Fee.  

 12
 

(e)           Development
Fee. The Company shall pay the Advisor, Development Fees in amounts that
are usual and customary for comparable services rendered to similar projects in
the geographic market; provided, however, that no Development Fee
will be paid in the event that the Company pays an Acquisition and Advisory Fee
based on the cost of such development or construction. Development Fees will
include the reimbursement of the specified cost incurred by the Advisor of
engaging third parties for such services.

3.02        Expenses.

(a)           In
addition to the compensation paid to the Advisor pursuant to Section 3.01
hereof and except as noted in Section 2.09 above, the Company shall pay
directly or reimburse the Advisor for all of the costs and expenses paid or incurred
by the Advisor that are in any way related to the operations of the Company or
the business of the Company or the services the Advisor provides to the Company
pursuant to this Agreement, including, but not limited to:

(i)            Organization
and Offering Expenses in the form of a fixed reimbursement to the Advisor in an
amount equal to 1.5% of the Gross Proceeds exclusive of Gross Proceeds from
shares sold under the Company’s distribution reinvestment plan less any
Organization and Offering Expenses the Company pays directly (other than
Selling Commissions and the dealer manager fee), with the Advisor having the
right to retain the amount (if any) by which this fixed reimbursement exceeds
the Organization and Offering Expenses paid by the Advisor; 

(ii)           Acquisition
Fees and Acquisition Expenses incurred in connection with the selection and
acquisition of Assets, including such expenses incurred related to assets
pursued or considered but not ultimately acquired by the Company;

(iii)          the
actual cost of goods, services and materials used by the Company and obtained
from Persons not affiliated with the Advisor, other than Acquisition Expenses,
including brokerage fees paid in connection with the purchase and sale of
Shares or other securities; 

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

(v)           taxes
and assessments on income or property and taxes as an expense of doing
business; 

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

(vii)         expenses
of managing and operating Assets owned by the Company, whether or not payable
to an Affiliate of the Advisor; 

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

(ix)           except
as otherwise limited by the Articles of Incorporation, expenses associated with
Listing or with the issuance and distribution of Shares and other securities of
the Company, such as Selling Commissions and fees, advertising expenses, 

 13
 

taxes, legal and accounting fees, Listing and registration fees, and
other Organization and Offering Expenses; 

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

(xi)           expenses
of organizing, reorganizing, liquidating or dissolving the Company and the
expenses of filing or amending the Articles of Incorporation; 

(xii)          expenses
of any third party transfer agent for the Shares and of maintaining
communications with Stockholders, including the cost of preparation, printing,
and mailing annual reports and other Stockholder reports, proxy statements and
other reports required by governmental entities; 

(xiii)         personnel
and related employment costs incurred by the Advisor or its Affiliates in
performing the services described herein, including but not limited to
reasonable salaries and wages, benefits and overhead of all employees directly
involved in the performance of the services; provided, that no
reimbursement shall be made for costs of the employees of the Advisor or its
Affiliates to the extent that the employees perform services for which the
Advisor receives a separate fee; and 

(xiv)        audit,
accounting and legal fees.  

(b)           Expenses
incurred by the Advisor on behalf of the Company and payable pursuant to this Section
3.02 shall be reimbursed no less than quarterly to the Advisor within sixty
days after the end of each quarter.  The
Advisor shall prepare a statement documenting the expenses of the Company during
each quarter, and shall deliver the statement to the Company within 45 days
after the end of each quarter.  

3.03        Other
Services.  Should the Board request that the Advisor or
any director, officer or employee thereof render services for the Company other
than set forth in Section 2.02, the services shall be separately
compensated at the rates and in the amounts as are agreed by the Advisor and
the Independent Directors, subject to the limitations contained in the Articles
of Incorporation, and shall not be deemed to be services pursuant to the terms
of this Agreement.  

3.04        Reimbursement
to the Advisor.  The Company shall not reimburse the Advisor
for Total Operating Expenses to the extent that Total Operating Expenses
(including the Asset Management Fee), 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 for that period
of four consecutive fiscal quarters.  Any
Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to
the Company.  Reimbursement of all or any
portion of the Total Operating Expenses that exceed the limitation set forth in
the preceding sentence may, at the option of the Advisor, be deferred without
interest and may be reimbursed in any subsequent Expense Year where the
limitation would permit the reimbursement if the Total Operating Expense were
incurred during that period. 
Notwithstanding the foregoing, if there is an Excess Amount in any
Expense Year and the Independent Directors determine that all or a portion of
the excess was justified, based on unusual and nonrecurring factors which they
deem sufficient, the Excess Amount may be reimbursed to the Advisor.  If the Independent Directors determine the excess
was justified, then after the end of any fiscal quarter of the Company for
which there is an Excess Amount for the twelve months then ended paid to the
Advisor, the Advisor, at the direction of the Independent Directors, shall
cause the fact to be disclosed in the next quarterly report of the Company in a
separate writing and sent to the Stockholders within sixty days of the quarter
end, together 

 14
 

with an explanation of the factors the
Independent Directors considered in determining that the Excess Amount was
justified. The determination shall be reflected in the minutes of the meetings
of the Board.  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 any computation pursuant
to this Section 3.04 shall be determined in accordance with generally
accepted accounting principles applied on a consistent basis.  

ARTICLE IV

TERM AND TERMINATION

4.01        Term;
Renewal.  Subject to Section 4.02 hereof, this
Agreement shall continue in force until the first anniversary of the date
hereof.  Thereafter, this Agreement may
be renewed for an unlimited number of successive one-year terms 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 renewal shall be for a term of no more than
one year.

4.02        Termination.  This Agreement will automatically terminate
upon Listing.  This agreement also may be
terminated at the option of either party upon sixty days written notice without
cause or penalty (if termination is by the Company, then the termination shall
be upon the approval of a majority of the Independent Directors).  Notwithstanding the foregoing, the provisions
of this Agreement which provide for payment to the Advisor of expenses, fees or
other compensation following the date of termination shall continue in full
force and effect until all amounts payable thereunder to the Advisor are paid
in full.

4.03        Payments
to and Duties of Advisor upon Termination.

(a)           After
the Termination Date, the Advisor shall not be entitled to compensation for
further services hereunder except it shall be entitled to and receive from the
Company within thirty days after the effective date of the termination all
unpaid reimbursements of expenses, subject to the provisions of Section 3.04
hereof, and all contingent liabilities related to 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; 

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

(iv)          cooperate
with the Company and take all reasonable actions requested by the Company to
provide an orderly management transition. 

 15
 

ARTICLE V

INDEMNIFICATION

5.01        Indemnification
by the Company.  

(a)           The
Company shall indemnify and hold harmless the Advisor and its Affiliates,
including their respective officers, directors, partners and employees, 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 Articles of Incorporation and the NASAA
Guidelines. Notwithstanding the foregoing, the Company shall not indemnify or
hold harmless the Advisor or its Affiliates, including their respective officers,
directors, partners and employees, for any liability or loss suffered by the
Advisor or its Affiliates, including their respective officers, directors,
partners and employees, nor shall it provide that the Advisor or its
Affiliates, including their respective officers, directors, partners and
employees, be held harmless for any loss or liability suffered by the Company,
unless all of the following conditions are met: (i) the Advisor or its
Affiliates, including their respective officers, directors, partners and
employees, have determined, in good faith, that the course of conduct which
caused the loss or liability was in the best interests of the Company; (ii) the
Advisor or its Affiliates, including their respective officers, directors,
partners and employees, were acting on behalf of or performing services of the
Company; (iii) the liability or loss was not the result of negligence or
misconduct by the Advisor or its Affiliates, including their respective
officers, directors, partners and employees; and (iv) the indemnification or
agreement to hold harmless is recoverable only out of the Company’s net assets
and not from the stockholders. Notwithstanding the foregoing, the Advisor and
its Affiliates, including their respective officers, directors, partners and
employees, shall not be indemnified by the Company for any losses, liability or
expenses 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: (i) there has been a successful adjudication on the merits of each
count involving alleged securities law violations as to the particular
indemnitee; (ii) such claims have been dismissed with prejudice on the merits
by a court of competent jurisdiction as to the particular indemnitee; and (iii)
a court of competent jurisdiction approves a settlement of the claims against a
particular 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 of the Company were offered or sold as to
indemnification for violations of securities laws.

(b)           The
Company may advance funds to the Advisor or its Affiliates, including their
respective officers, directors, partners and employees, for legal expenses and
other costs incurred as a result of any legal action for which indemnification
is being sought is permissible only if all of the following conditions are
satisfied: (i) the legal action relates to acts or omissions with respect to
the performance of duties or services on behalf of the Company; (ii) the legal
action is initiated by a third-party who is not a stockholder or the legal
action is initiated by a stockholder acting in his or her capacity as such and
a court of competent jurisdiction specifically approves such advancement; (iii)
the Advisor or its Affiliates, including their respective officers, directors,
partners and employees, undertake to repay the advanced funds to the Company
together with the applicable legal rate of interest thereon, in cases in which
the Advisor or its Affiliates, including their respective officers, directors,
partners and employees, are found not to be entitled to indemnification.

 16
 

(c)           Notwithstanding
the provisions of this Section 5.01, the Advisor shall not be entitled
to indemnification or be held harmless pursuant to this Section 5.01 for
any activity which the Advisor shall be required to indemnify or hold harmless
the Company pursuant to Section 5.02.

5.02        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 the
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, misfeasance, misconduct, gross negligence or reckless disregard of its
duties, but the Advisor shall not be held responsible for any action of the
Board in following or declining to follow any advice or recommendation given by
the Advisor. 

ARTICLE VI

MISCELLANEOUS

6.01        Assignment
to an Affiliate.  This Agreement and any rights, duties,
liabilities and obligations hereunder and the fees and compensation related
thereto may be assigned by the Advisor, in whole or in part, to a duly
qualified and licensed Affiliate of the Advisor without obtaining the approval
of the Board.  Any other assignment shall
be made only with the approval of a majority of the Board (including a majority
of the Independent Directors). 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 the 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. This Agreement shall be binding on
successors to the Company resulting from a Change of Control or sale of all or
substantially all the assets of the Company or the Partnership, and shall
likewise be binding upon any successor to the Advisor.

6.02        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 the partners or joint venturers or impose any liability
as such on either of them.

 17
 

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

	
  To the Directors and to the
  Company:

  	
   

  	
  Behringer Harvard REIT II, Inc.

  
	
   

  	
   

  	
  15601 Dallas
  Parkway

  
	
   

  	
   

  	
  Suite 600

  
	
   

  	
   

  	
  Addison, Texas
  75001

  
	
   

  	
   

  	
   

  
	
  To the Advisor:

  	
   

  	
  Behringer Advisors II LP

  
	
   

  	
   

  	
  15601 Dallas
  Parkway

  
	
   

  	
   

  	
  Suite. 600

  
	
   

  	
   

  	
  Addison, Texas
  75001

  

 

Either party shall, as soon as reasonably practicable, give notice in
writing to the other party of a change in its address for the purposes of this Section
6.03.

6.04        Modification.  This Agreement shall not be changed,
modified, or amended, in whole or in part, except by an instrument in writing
signed by both parties hereto, or their respective successors or permitted
assignees.

6.05        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.

6.06        Choice
of Law; Venue.  The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of Texas,
and venue for any action brought with respect to any claims arising out of this
Agreement shall be brought exclusively in Dallas County, Texas.

6.07        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 signed by each of the parties hereto.

6.08        Waiver.  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 the 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 the waiver.

6.09        Gender;
Number. 
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.

 18
 

6.10        Headings.  The titles and headings of sections and subsections
contained in this Agreement are for convenience only, and they neither form a
part of this Agreement nor are they to be used in the construction or
interpretation hereof.

6.11        Execution
in Counterparts.  This Agreement may be executed in multiple 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.

6.12        Name.  Behringer Advisors
II LP and/or one or more of its Affiliates has a proprietary interest in the
names “Harvard” (for the businesses engaged in by the Company and its
Affiliates) and “Behringer” (for all purposes). 
Accordingly, and in recognition of this right, if at any time the
Company ceases to retain Behringer Advisors II LP or an Affiliate thereof to
perform the services of Advisor, the Company will, promptly after receipt of
written request from Behringer Advisors II LP, cease to conduct business under
or use the name “Harvard” or “Behringer” or any diminutive thereof and the
Company shall use its best efforts to change the name of the Company to a name
that does not contain the name “Harvard” or “Behringer” or any other word or
words that might, in the sole discretion of Behringer Advisors II LP, be
susceptible of indication of some form of relationship between the Company and
Behringer Advisors II LP or any Affiliate thereof. Consistent with the
foregoing, it is specifically recognized that Behringer Advisors II LP or one
or more of its Affiliates has in the past and may in the future organize,
sponsor or otherwise permit to exist other investment vehicles (including
vehicles for investment in real estate) and financial and service organizations
having “Harvard” or “Behringer” as a part of their name, all without the need
for any consent (and without the right to object thereto) by the Company or its
Board.

6.13        Initial
Investment.  The Advisor or one of its Affiliates has
contributed $200,000 (the “Initial Investment”)
in exchange for the initial issuance
of Shares of the Company.  The
Advisor or its Affiliates may not sell any of the Shares purchased with the
Initial Investment while the Advisor acts in an advisory capacity to the
Company.  The restrictions included above
shall not apply to any Shares acquired by the Advisor or its Affiliates other
than the Shares acquired through the Initial Investment.  Neither the Advisor nor its Affiliates shall
vote any Shares they now own, or hereafter acquires, in any vote for the
election of Directors or any vote regarding the approval or termination of any
contract with the Advisor or any of its Affiliates.

6.14        Ownership
of Proprietary Property.  The Advisor retains ownership of and reserves
all Intellectual Property Rights in the Proprietary Property.  To the extent that the Company has or obtains
any claim to any right, title or interest in the Proprietary Property,
including without limitation in any suggestions, enhancements or contributions
that Company may provide regarding the Proprietary Property, the Company hereby
assigns and transfers exclusively to the Advisor all right, title and interest,
including without limitation all Intellectual Property Rights, free and clear
of any liens, encumbrances or licenses in favor of the Company or any other
party, in and to the Proprietary Property. 
In addition, at the Advisor’s expense, the Company will perform any acts
that may be deemed desirable by the Advisor to evidence more fully the transfer
of ownership of right, title and interest in the Proprietary Property to the
Advisor, including but not limited to the execution of any instruments or
documents now or hereafter requested by the Advisor to perfect, defend or
confirm the assignment described herein, in a form determined by the Advisor.

6.15        Treatment
Under Texas Margin Tax.  For purposes of the Texas margin tax, the
Advisor’s performance of the services specified in this Agreement will cause
the Advisor to conduct part of the active trade or business of the Company, and
the compensation specified in Article III includes 

 19
 

both the
payment of management fees and the reimbursement of specified costs incurred in
the Advisor’s conduct of the active trade or business of the Company.  Therefore, the Advisor and Company intend
Advisor to be, and shall treat Advisor as, a “management company” within the
meaning of Section 171.0001(11) of the Texas Tax Code.  The Company and the Advisor will apply
Sections 171.1011(m-1) and 171.1013(f)-(g) of the Texas Tax Code to the Company’s
reimbursements paid to the Advisor pursuant to this Agreement of specified
costs and wages and compensation.  The
Advisor and the Company further recognize and intend that (i) as a result of
the fiduciary relationship created by this Agreement and acknowledged in Section
2.02, reimbursements paid to the Advisor pursuant to this Agreement are “flow-though
funds” that the Advisor is mandated by law or fiduciary duty to distribute,
within the meaning of Section 171.1011(f) of the Texas Tax Code, and (ii) as a
result of Advisor’s contractual duties under this Agreement, certain
reimbursements under this Agreement are “flow-through funds” mandated by
contract to be distributed within the meaning of Section 171.1011(g) of the
Texas Tax Code.  The terms of this
Agreement shall be interpreted in a manner consistent with the characterization
of the Advisor as a “management company” as defined in Section 171.0001(11),
and with the characterization of the reimbursements as “flow-though funds”
within the meaning of Section 171.1011(f)-(g) of the Texas Tax Code.

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

	
   

  	
  BEHRINGER HARVARD REIT II, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Gerald J.
  Reihsen, III

  
	
   

  	
   

  	
  Executive Vice
  President – Corporate

  
	
   

  	
   

  	
  Development
  & Legal

  
	
   

  	
   

  	
   

  
	
   

  	
  BEHRINGER
  ADVISORS II LP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Harvard Property Trust II, LLC,

  	
   

  
	
   

  	
   

  	
  its General Partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice
  President – Corporate

  
	
   

  	
   

  	
  Development
  & Legal

  
									

 

 20

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