Exhibit 10.2

KBS LEGACY PARTNERS APARTMENT REIT, INC.

Up to 280,000,000 Shares of Common Stock

DEALER MANAGER AGREEMENT

March 12, 2010

KBS Capital Markets Group LLC

660 Newport Center Drive, Suite 1200

Newport Beach, California 92660

Ladies and Gentlemen:

KBS Legacy Partners Apartment REIT, Inc., a Maryland corporation (the
“Company”), has registered for public sale 280,000,000 shares of its common
stock, $.01 par value per share (the “Shares”), of which 80,000,000 Shares are
intended to be offered pursuant to the Company’s dividend reinvestment plan (the
“DRP”). The Company desires for KBS Capital Markets Group LLC (the “Dealer
Manager”) to act as its agent in connection with the offer and sale of the
Shares to the public (the “Offering”).

It is anticipated that the Dealer Manager will enter into Selected Dealer
Agreements (in the form attached to this Agreement as Exhibit A) with other
broker-dealers participating in the Offering (each participating broker-dealer
being referred to herein as a “Dealer”). The Company shall have the right to
approve any material modifications or addendums to the form of the Selected
Dealer Agreement.

Except as described in the Prospectus (as defined below) or in Section 5.3
hereof, the Shares are to be sold at a per Share cash price as follows:

 

Distribution Channel

   Primary Offering
Shares    DRP
    Shares    

Sales through a Dealer earning transaction-based compensation

   $ 10.00    $ 9.50

Sales through all other distribution channels as discussed in the Prospectus

   $   9.35    $ 9.50

In connection with the sale of Shares, the Company hereby agrees with you, the
Dealer Manager, as follows:

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1. Representations and Warranties of the Company. As an inducement to the Dealer
Manager to enter into this Agreement, the Company represents and warrants to the
Dealer Manager and to each Dealer that:

 

  1.1. The Company has prepared and filed with the Securities and Exchange
Commission (the “SEC”) a registration statement (Registration No. 333-161449)
that has become effective for the registration of the Shares under the
Securities Act of 1933, as amended (the “Securities Act”), and the applicable
rules and regulations (the “Rules and Regulations”) of the SEC promulgated
thereunder. Copies of such registration statement as initially filed and each
amendment thereto have been or will be delivered to the Dealer Manager. The
registration statement and the prospectus contained therein, as finally amended
at the effective date of the registration statement (the “Effective Date”), are
respectively hereinafter referred to as the “Registration Statement” and the
“Prospectus,” except that if the Company files a prospectus or prospectus
supplement pursuant to Rule 424(b) under the Securities Act, or if the Company
files a post-effective amendment to the Registration Statement, the term
“Prospectus” includes the prospectus filed pursuant to Rule 424(b) or the
prospectus included in such post-effective amendment. The term “Preliminary
Prospectus” as used herein shall mean a preliminary prospectus related to the
Shares as contemplated by Rule 430 or Rule 430A of the Rules and Regulations
included at any time as part of the registration statement.

 

  1.2. On the Effective Date, on the date of the Prospectus and on the date any
post-effective amendment to the Registration Statement becomes effective or any
amendment or supplement to the Prospectus is filed with the SEC, the
Registration Statement and the Prospectus, as applicable, including the
financial statements contained therein, complied or will comply with the
Securities Act and the Rules and Regulations. On the Effective Date, the
Registration Statement did not or will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. On the date of the
Prospectus, as amended or supplemented, as applicable, the Prospectus did not or
will not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Notwithstanding anything contained herein to the contrary, the
Company’s representations in this Section 1.2 will not extend to such statements
contained in or omitted from the Registration Statement or the Prospectus, as
amended or supplemented, that are primarily within the knowledge of the Dealer
Manager or any of the Dealers and are based upon information furnished by the
Dealer Manager in writing to the Company specifically for inclusion therein.

 

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  1.3. No order preventing or suspending the use of any Preliminary Prospectus
or the Prospectus has been issued and no proceedings for that purpose are
pending, threatened or, to the knowledge of the Company, contemplated by the
SEC; and, to the knowledge of the Company, no order suspending the Offering in
any jurisdiction has been issued and no proceedings for that purpose have been
instituted or threatened or are contemplated.

 

  1.4. The Company intends to use the funds received from the sale of the Shares
as set forth in the Prospectus.

 

  1.5. The Company has full legal right, power and authority to enter into this
Agreement and to perform the transactions contemplated hereby, except to the
extent that the enforceability of the indemnity provisions contained in
Section 6 of this Agreement may be limited under applicable securities laws and
to the extent that the enforceability of this Agreement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws that
affect creditors’ rights generally or by equitable principles relating to the
availability of remedies.

 

  1.6. The execution and delivery of this Agreement, the consummation of the
transactions contemplated herein and compliance with the terms of this Agreement
by the Company will not conflict with or constitute a default or violation under
any charter, bylaw, contract, indenture, mortgage, deed of trust, lease, rule,
regulation, writ, injunction or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company, except to the extent that the enforceability of the indemnity
provisions contained in Section 6 of this Agreement may be limited under
applicable securities law and to the extent that the enforceability of this
Agreement may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws that affect creditors’ rights generally or by equitable
principles relating to the availability of remedies.

 

  1.7. No consent, approval, authorization or other order of any governmental
authority is required in connection with the execution or delivery by the
Company of this Agreement or the issuance and sale by the Company of the Shares,
except as may be required under the Securities Act and the Rules and Regulations
thereunder, by the Financial Industry Regulatory Authority (“FINRA”) or under
applicable state securities laws.

 

  1.8. The Shares have been duly authorized and, when issued and sold as
contemplated by the Prospectus and upon payment therefor as provided in the
Prospectus and this Agreement, the Shares will be validly issued, fully paid and
nonassessable and will conform to the description thereof contained in the
Prospectus.

 

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2. Representations and Warranties of the Dealer Manager. As an inducement to the
Company to enter into this Agreement, the Dealer Manager represents and warrants
to the Company that:

 

  2.1. The Dealer Manager is a member in good standing of FINRA and a
broker-dealer registered as such under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”). The Dealer Manager and its employees and
representatives have all required licenses and registrations to act under this
Agreement.

 

  2.2. The Dealer Manager represents and warrants to the Company and each person
that signs the Registration Statement that the information under the caption
“Plan of Distribution” in the Prospectus, as amended and supplemented, and all
other information furnished and to be furnished to the Company by the Dealer
Manager in writing expressly for use in the Registration Statement, any
Preliminary Prospectus or the Prospectus, does not and will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading.

 

3. Covenants of the Company. The Company covenants and agrees with the Dealer
Manager that:

 

  3.1. It will, at no expense to the Dealer Manager, furnish the Dealer Manager
with such number of printed copies of the Registration Statement, including all
amendments and exhibits thereto, as the Dealer Manager may reasonably request.
It will similarly furnish to the Dealer Manager and others designated by the
Dealer Manager as many copies as the Dealer Manager may reasonably request in
connection with the offering of the Shares of: (a) the Prospectus, including any
amendments and supplements thereto and (b) this Agreement.

 

  3.2. The Company will prepare and file with the appropriate regulatory
authorities, on behalf of and at no expense to the Dealer Manager, the printed
sales literature or other materials authorized by the Company to be used in the
Offering (“Authorized Sales Materials”). In addition, the Company will furnish
the Dealer Manager and others designated by the Dealer Manager, at no expense to
the Dealer Manager, with such number of printed copies of Authorized Sales
Materials as the Dealer Manager may reasonably request.

 

  3.3.

The Company will furnish such information and execute and file such documents as
may be necessary for it to qualify the Shares for offer and sale under the
securities laws of such jurisdictions as the Dealer Manager may reasonably
designate and will file and make in each year such statements and reports as may
be required. The Company will furnish to

 

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  the Dealer Manager upon request a copy of such papers filed by the Company in
connection with any such qualification.

 

  3.4. It will: (a) file every amendment or supplement to the Registration
Statement or the Prospectus that may be required by the SEC or any state
securities administration and (b) if at any time the SEC shall issue any stop
order suspending the effectiveness of the Registration Statement or any state
securities administration shall issue any order or take other action to suspend
or enjoin the sale of the Shares, it will promptly notify the Dealer Manager.

 

  3.5. If at any time when a Prospectus is required to be delivered under the
Securities Act and the Rules and Regulations thereunder any event occurs as a
result of which, in the opinion of either the Company or the Dealer Manager, the
Prospectus would include an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in view of the
circumstances under which they were made, not misleading, the Company will
promptly notify the Dealer Manager thereof (unless the information shall have
been received from the Dealer Manager) and will prepare an amendment or
supplement to the Prospectus that will correct such statement or omission.

 

  3.6. It will comply with all requirements imposed upon it by the Securities
Act and the Exchange Act, by the rules and regulations of the SEC promulgated
thereunder and by all securities laws and regulations of those states in which
an exemption has been obtained or qualification of the Shares has been effected,
to permit the continuance of offers and sales of the Shares in accordance with
the provisions hereof and of the Prospectus.

 

  3.7.

The Company will pay all expenses incident to the performance of its obligations
under this Agreement, including (a) the preparation, filing and printing of the
Registration Statement as originally filed and of each amendment thereto,
(b) the preparation, printing and delivery to the Dealer Manager of this
Agreement, the Selected Dealer Agreement and such other documents as may be
required in connection with the offer, sale, issuance and delivery of the
Shares, (c) the fees and disbursements of the Company’s counsel, accountants and
other advisors, (d) the fees and expenses related to the review of the terms and
fairness of the Offering by FINRA, (e) the fees and expenses related to the
registration and qualification of the Shares under federal and state securities
laws, including the fees and disbursements of counsel in connection with the
preparation of any Blue Sky survey and any supplement thereto, (f) the printing
and delivery to the Dealer Manager of copies of any Preliminary Prospectus and
the Prospectus, including any amendments and supplements thereto, (g) the fees
and expenses of any registrar or transfer agent in connection with the Shares
and (h) the costs and expenses of the Company relating to the preparation and
printing of any Authorized Sales

 

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  Materials and Company-approved investor presentations undertaken in connection
with the marketing of the Shares, including, without limitation, expenses
associated with the production of slides and graphics, fees and expenses of any
consultants engaged in connection with presentations with the prior approval of
the Company and travel and lodging expenses of the representatives of the
Company and any such consultants.

 

4. Covenants of the Dealer Manager. The Dealer Manager covenants and agrees with
the Company that:

 

  4.1. In connection with the Dealer Manager’s participation in the offer and
sale of Shares (including, without limitation, any resales and transfers of
Shares), the Dealer Manager will comply, and in its agreements with Dealers will
require that the Dealers comply, with all requirements and obligations imposed
upon any of them by (a) the Securities Act, the Exchange Act and the rules and
regulations of the SEC promulgated under both such acts, including the
obligation to deliver a copy of the Prospectus as amended or supplemented;
(b) all applicable state securities laws and regulations as from time to time in
effect; (c) the applicable rules of FINRA, including, but not in any way limited
to, Rules 2440, 2730, 2740 and 2750 of the NASD Conduct Rules and FINRA Rule
2310; (d) all applicable rules and regulations relating to the suitability of
the investors, including, without limitation, the provisions of Articles III.C
and III.E of the Statement of Policy regarding Real Estate Investment Trusts of
the North American Securities Administrators Association, Inc. (“NASAA
Guidelines”); (e) any other state and federal laws and regulations applicable to
the Offering, the sale of Shares or the activities of the Dealer Manager
pursuant to this Agreement, including without limitation the privacy standards
and requirements of state and federal laws, including the Gramm-Leach-Bliley Act
of 1999, and the laws governing money laundering abatement and anti-terrorist
financing efforts, including the applicable rules of the SEC and FINRA, the Bank
Secrecy Act, as amended, the USA Patriot Act of 2001 and regulations
administered by the Office of Foreign Asset Control at the Department of the
Treasury; and (f) this Agreement and the Prospectus as amended and supplemented.

 

  4.2. The Dealer Manager will not offer the Shares, and in its agreements with
Dealers will require that the Dealers not offer Shares, in any jurisdiction
unless and until (a) the Dealer Manager has been advised by the Company in
writing that the Shares are either registered in accordance with, or exempt
from, the securities laws of such jurisdiction and (b) the Dealer Manager and
any Dealer offering Shares in such jurisdiction have all required licenses and
registrations to offer Shares in that jurisdiction.

 

  4.3.

The Dealer Manager will make, and in its agreements with Dealers will require
that Dealers make, no representations concerning the Offering

 

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  except as set forth in the Prospectus as amended and supplemented and in the
Authorized Sales Materials.

 

  4.4. The Dealer Manager will offer Shares, and in its agreements with Dealers
will require that the Dealers offer Shares, only to persons who meet the
financial qualification and suitability standards set forth in the Prospectus as
amended and supplemented or in any suitability letter or memorandum sent to the
Dealer Manager by the Company. The Dealer Manager further agrees that the
Company, in its sole and absolute discretion, may accept or reject any
subscription, in whole or in part, for any reason whatsoever and no commission
will be paid to the Dealer Manager with respect to the portion of any
subscription that is rejected.

The Dealer Manager shall maintain, or in its agreements with Dealers shall
require the Dealers to maintain, for at least six years, a record of the
information obtained to determine that an investor meets the financial
qualification and suitability standards imposed on the offer and sale of the
Shares (both at the time of the initial subscription and at the time of any
additional subscriptions).

In making these determinations as to financial qualification and suitability,
the Dealer Manager may rely on representations from (i) investment advisers who
are not affiliated with a Dealer or (ii) banks acting as trustees or
fiduciaries. With respect to the Dealer Manager’s obligation to maintain records
of an investor’s financial qualification and suitability, the Company agrees
that the Dealer Manager can satisfy its obligations by contractually requiring
such information to be maintained by the investment advisers or banks discussed
in the preceding sentence.

 

  4.5. Except for Authorized Sales Materials, the Company has not authorized the
use of any supplemental literature or sales material in connection with the
Offering and the Dealer Manager agrees not to use any such material that has not
been authorized by the Company. The Dealer Manager further agrees (a) not to
deliver any Authorized Sales Materials to any person unless it is accompanied or
preceded by the Prospectus as amended and supplemented, (b) not to show or give
to any investor or prospective investor or reproduce any material or writing
that is supplied to it by the Company and marked “broker-dealer use only” or
otherwise bearing a legend denoting that it is not to be used in connection with
the sale of Shares to members of the public and (c) not to show or give to any
investor or prospective investor in a particular jurisdiction any material or
writing that is supplied to it by the Company if such material bears a legend
denoting that it is not to be used in connection with the sale of Shares to
members of the public in such jurisdiction.

 

  4.6.

The Dealer Manager agrees to be bound by the terms of the Amended and Restated
Escrow Agreement dated March 8, 2010, among UMB Bank,

 

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  N.A., as escrow agent, the Dealer Manager and the Company, copies of which are
attached hereto as Exhibit B and the Dealer Manager further agrees that it will
not represent or imply that UMB Bank, N.A., as the escrow agent identified in
the Prospectus, has investigated the desirability or advisability of an
investment in the Company or has approved, endorsed or passed upon the merits of
the Shares or of the Company, nor will the Dealer Manager use the name of said
escrow agent in any manner whatsoever in connection with the offer or sale of
the Shares other than by acknowledgment that it has agreed to serve as escrow
agent.

 

  4.7. The Dealer Manager will provide the Company with such information
relating to the offer and sale of the Shares by it as the Company may from time
to time reasonably request or as may be requested to enable the Company to
prepare such reports of sale as may be required to be filed under applicable
federal or state securities laws.

 

  4.8. The Dealer Manager will permit a Dealer to participate in the Offering
only if such Dealer is a member of FINRA.

 

5. Obligations and Compensation of Dealer Manager.

 

  5.1. The Company hereby appoints the Dealer Manager as its agent and principal
distributor during the Offering Period (as defined in Section 5.2) for the
purpose of finding, on a best-efforts basis, purchasers for the Shares for cash
through the distribution channels contemplated herein. The Dealer Manager may
also arrange for the sale of Shares for cash directly to clients and customers
identified by the Company on the terms and conditions stated herein and in the
Prospectus. The Dealer Manager hereby accepts such agency and distributorship
and agrees to use its best efforts to find purchasers for the Shares on said
terms and conditions.

 

  5.2. The “Offering Period” shall mean that period during which Shares may be
offered for sale, commencing on the Effective Date of the Registration Statement
(but in no event prior to the Effective Date of the Registration Statement),
during which period offers and sales of the Shares shall occur continuously in
the jurisdictions in which the Shares are registered or qualified or exempt from
registration (as confirmed in writing by the Company to the Dealer Manager)
unless and until the Offering is terminated, provided that the Dealer Manager
and the Dealers will suspend or terminate offering Shares upon request of the
Company at any time and will resume offering Shares upon subsequent request of
the Company. The Offering Period shall in all events terminate upon the sale of
all of the Shares. Upon termination of the Offering Period, the Dealer Manager’s
agency and this Agreement shall terminate without obligation on the part of the
Dealer Manager or the Company except as set forth in this Agreement.

 

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  5.3. Except as may be provided in the “Plan of Distribution” section of the
Prospectus, which may be amended and supplemented from time to time, as
compensation for the services rendered by the Dealer Manager, the Company agrees
that it will pay to the Dealer Manager selling commissions plus a dealer manager
fee as follows:

 

     Selling Commissions

Distribution Channel

   Primary
Offering
Shares   DRP Shares

Sales through a Dealer earning transaction-based compensation

   6.5%*   0.0%*

Sales through all other distribution channels as described in the Prospectus

   0.0%     0.0%  

* Except as set forth herein or in the “Plan of Distribution” section of the
Prospectus (as amended and supplemented), the Dealer Manager will reallow all of
its selling commissions attributable to a Dealer.

 

     Dealer Manager Fee

Distribution Channel

   Primary
Offering
Shares   DRP Shares

Sales through a Dealer earning transaction-based compensation

   3.0%*   0.0%

Sales through all other distribution channels as described in the Prospectus

   3.0%*   0.0%

* Upon the terms set forth herein or in the Prospectus (as amended and
supplemented), the Dealer Manager may agree to reallow to any Dealer a portion
of its dealer manager fee pursuant to a separate marketing fee agreement.

Upon the terms set forth in the Prospectus, reduced selling commissions and
dealer manager fees will be paid to the Dealer Manager and reduced per share
selling prices shall be recovered on large transactions in accordance with the
following table, which may be amended and supplemented by the Prospectus:

 

Dollar Volume Shares Purchased

  

Sales

Commissions

(Based on $10.00

Price Per Share)

 

Dealer

Manager Fee

(Based on $10.00

Price Per Share)

 

Price Per

Share to

Investor

$                0     to      $   999,999

   6.5%   3.0%   $10.00

$  1,000,000     to     $1,999,999

   5.5%   3.0%   $  9.90

$  2,000,000     to     $2,999,999

   4.5%   3.0%   $  9.80

$  3,000,000     to     $3,999,999

   3.5%   2.5%   $  9.65

$  4,000,000     to     $9,999,999

   2.5%   2.0%   $  9.50

$10,000,000   and above

   1.5%   2.0%   $  9.40

The reduced selling price, selling commission and dealer manager fee will apply
to the entire purchase. All commission rates and dealer manager

 

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fees are calculated assuming a price per share of $10.00. For example, a
purchase of 250,000 shares in a single transaction would result in a purchase
price of $2,450,000 ($9.80 per share), selling commissions of $112,500 and
dealer manager fees of $75,000.

The Company will also reimburse the Dealer Manager for all items of underwriter
compensation referenced in the Prospectus to the extent the Prospectus indicates
that they will be paid by the Company, provided that the Company’s reimbursement
payments shall not cause (i) total underwriting compensation to exceed 10% of
gross proceeds from the Offering (excluding proceeds from the offering of Shares
pursuant to the DRP), or (ii) total organization and offering expenses to exceed
15% of gross proceeds from the Offering. In accordance with FINRA Rule 2310, the
Company shall also pay directly or reimburse the Dealer Manager for bona fide
invoiced due diligence expenses of the Dealers and non-participating
broker-dealers, subject to the cap on organization and offering expenses
described above.

As described in the Prospectus, the Dealer Manager agrees to sell up to 5% of
the Shares in the primary offering to persons identified by the Company pursuant
to the Company’s “friends and family” program. The purchase price for Shares
under this program will be $9.35 per share, reflecting that selling commissions
will not be payable in connection with such sales. The Dealer Manager agrees to
work together with the Company to implement this program and to execute sales
under the program according to the procedures agreed upon by the Dealer Manager
and the Company.

In addition, as described in the Prospectus, the Dealer Manager may sell shares
to Dealers, their retirement plans, their representatives and the family
members, IRAs and the qualified plans of their representatives at a purchase
price of $9.35 per share, reflecting that selling commissions in the amount of
$0.65 per share will not be payable in consideration of the services rendered by
such Dealers and representatives in the Offering. For purposes of this discount,
a family member includes such person’s spouse, parent, child, sibling, mother-
or father-in-law, son- or daughter-in law or brother- or sister-in-law.

Notwithstanding the foregoing, no commissions, payments or amounts whatsoever
will be paid to the Dealer Manager under this Section 5.3 unless or until the
Company raises $2.5 million in the Offering from persons not affiliated with the
Company or its sponsor (the “Minimum Offering”). Until the Minimum Offering is
reached, investments will be held in escrow. Until $66.7 million (the
“Pennsylvania Minimum”) has been raised in the Offering from persons not
affiliated with the Company or its sponsor, investments from Pennsylvania
investors will be held in a separate escrow and no commissions, payments or
amounts whatsoever

 

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will be paid thereon to the Dealer Manager under this Section 5.3 unless and
until the Pennsylvania Minimum has been reached, and then only with respect to
such investments from Pennsylvania investors as are released to the Company from
such escrow. Until $10 million (the “Tennessee Minimum”) has been raised in the
Offering from persons not affiliated with the Company or its sponsor,
investments from Tennessee investors will be held in a separate escrow and no
commissions, payments or amounts whatsoever will be paid thereon to the Dealer
Manager under this Section 5.3 unless and until the Tennessee Minimum has been
reached, and then only with respect to such investments from Tennessee investors
as are released to the Company from such escrow. If the Minimum Offering is not
reached within the time period specified in the Prospectus, investments will be
returned to the investors in accordance with the Prospectus. If the Pennsylvania
Minimum is not obtained within the time period specified in the Prospectus, the
investments from Pennsylvania investors will be returned or held for subsequent
escrow periods in accordance with the Prospectus. If the Tennessee Minimum is
not obtained within the time period specified in the Prospectus, the investments
from Tennessee investors will be returned to Tennessee investors in accordance
with the Prospectus.

The Company will not be liable or responsible to any Dealer for direct payment
of commissions to such Dealer; it is the sole and exclusive responsibility of
the Dealer Manager for payment of commissions to Dealers. Notwithstanding the
above, at its discretion, the Company may act as agent of the Dealer Manager by
making direct payment of commissions to such Dealers without incurring any
liability therefor.

 

6. Indemnification.

 

  6.1.

To the extent permitted by the Company’s charter and the provisions of Article
II.G of the NASAA Guidelines, and subject to the limitations below, the Company
will indemnify and hold harmless the Dealers and the Dealer Manager, their
officers and directors and each person, if any, who controls such Dealer or
Dealer Manager within the meaning of Section 15 of the Securities Act (the
“Indemnified Persons”) from and against any losses, claims, damages or
liabilities (“Losses”), joint or several, to which such Indemnified Persons may
become subject, under the Securities Act, the Exchange Act or otherwise, insofar
as such Losses (or actions in respect thereof) arise out of or are based upon
(a) any untrue statement or alleged untrue statement of a material fact
contained (i) in the Registration Statement, the Prospectus, any Preliminary
Prospectus used prior to the effective date of the Registration Statement or any
post-effective amendment or supplement to any of them or (ii) in any blue sky
application or other document executed by the Company or on its behalf
specifically for the purpose of qualifying any or all of the Shares for sale
under the securities laws of any jurisdiction or based upon written

 

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  information furnished by the Company under the securities laws thereof (any
such application, document or information being hereinafter called a “Blue Sky
Application”) or (iii) in any Authorized Sales Materials, or (b) the omission or
alleged omission to state in the Registration Statement, the Prospectus, any
Preliminary Prospectus used prior to the effective date of the Registration
Statement or any post-effective amendment or supplement to any of them or in any
Blue Sky Application or Authorized Sales Materials a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The Company will
reimburse each Indemnified Person for any legal or other expenses reasonably
incurred by such Indemnified Person in connection with investigating or
defending such Loss.

Notwithstanding the foregoing provisions of this Section 6.1, the Company will
not be liable in any such case to the extent that any such Loss or expense
arises out of or is based upon an untrue statement or alleged untrue statement
or omission or alleged omission made in reliance upon and in conformity with
written information furnished (x) to the Company by the Dealer Manager or (y) to
the Company or the Dealer Manager by or on behalf of any Dealer specifically for
use in the Registration Statement, the Prospectus, any Preliminary Prospectus
used prior to the effective date of the Registration Statement or any
post-effective amendment or supplement to any of them, any Blue Sky Application
or any Authorized Sales Materials, and, further, the Company will not be liable
in any such case if it is determined that such Dealer or the Dealer Manager was
at fault in connection with the Loss, expense or action.

The foregoing indemnity agreement of this Section 6.1 is subject to the further
condition that, insofar as it relates to any untrue statement, alleged untrue
statement, omission or alleged omission made in the Prospectus (or amendment or
supplement thereto) that was eliminated or remedied in any subsequent amendment
or supplement thereto, such indemnity agreement shall not inure to the benefit
of an Indemnified Party from whom the person asserting any Losses purchased the
Shares that are the subject thereof, if a copy of the Prospectus as so amended
or supplemented was not sent or given to such person at or prior to the time the
subscription of such person was accepted by the Company, but only if a copy of
the Prospectus as so amended or supplemented had been supplied to the Dealer
Manager or the Dealer prior to such acceptance.

 

  6.2.

The Dealer Manager will indemnify and hold harmless the Company, its officers
and directors (including any person named in the Registration Statement, with
his consent, as about to become a director), each other person who has signed
the Registration Statement and each person, if any, who controls the Company
within the meaning of Section 15 of the

 

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  Securities Act (the “Company Indemnified Persons”), from and against any
Losses to which any of the Company Indemnified Persons may become subject, under
the Securities Act, the Exchange Act or otherwise, insofar as such Losses (or
actions in respect thereof) arise out of or are based upon (a) any untrue
statement or alleged untrue statement of a material fact contained (i) in the
Registration Statement, the Prospectus, any Preliminary Prospectus used prior to
the effective date of the Registration Statement or any post-effective amendment
or supplement to any of them or in any Blue Sky Application or Authorized Sales
Materials; or (b) the omission or alleged omission to state in the Registration
Statement, the Prospectus, any Preliminary Prospectus used prior to the
effective date of the Registration Statement or any post-effective amendment or
supplement to any of them or in any Blue Sky Application or Authorized Sales
Materials a material fact required to be stated therein or necessary to make the
statements therein not misleading, provided that clauses (a) and (b) apply, to
the extent, but only to the extent, that such untrue statement or omission was
made in reliance upon and in conformity with written information furnished to
the Company by or on behalf of the Dealer Manager specifically for use with
reference to the Dealer Manager in the preparation of the Registration
Statement, the Prospectus, any Preliminary Prospectus used prior to the
effective date of the Registration Statement or any post-effective amendment or
supplement to any of them or in preparation of any Blue Sky Application or
Authorized Sales Materials; or (c) any use of sales literature not authorized or
approved by the Company or any use of “broker-dealer use only” materials with
members of the public by the Dealer Manager in the offer and sale of the Shares
or any use of sales literature in a particular jurisdiction if such material
bears a legend denoting that it is not to be used in connection with the sale of
Shares to members of the public in such jurisdiction; or (d) any untrue
statement made by the Dealer Manager or its representatives or agents or
omission to state a fact necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading in
connection with the offer and sale of the Shares; or (e) any material violation
of this Agreement; or (f) any failure to comply with applicable laws governing
privacy issues, money laundering abatement and anti-terrorist financing efforts,
including applicable rules of the SEC, FINRA and the USA PATRIOT Act of 2001; or
(g) any other failure to comply with applicable rules of FINRA or federal or
state securities laws and the rules and regulations promulgated thereunder. The
Dealer Manager will reimburse the aforesaid parties for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending such Loss, expense or action. This indemnity agreement will be in
addition to any liability that the Dealer Manager may otherwise have.

 

  6.3.

Each Dealer severally will indemnify and hold harmless the Company, the Dealer
Manager, each of their officers and directors (including any person named in the
Registration Statement, with his consent, as about to become

 

13

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  a director), each other person who has signed the Registration Statement and
each person, if any, who controls the Company or the Dealer Manager within the
meaning of Section 15 of the Securities Act (the “Dealer Indemnified Persons”)
from and against any Losses to which a Dealer Indemnified Person may become
subject, under the Securities Act, the Exchange Act or otherwise, insofar as
such Losses (or actions in respect thereof) arise out of or are based upon
(a) any untrue statement or alleged untrue statement of a material fact
contained (i) in the Registration Statement, the Prospectus, any Preliminary
Prospectus used prior to the effective date of the Registration Statement or any
post-effective amendment or supplement to any of them or in any Blue Sky
Application or Authorized Sales Materials; or (b) the omission or alleged
omission to state in the Registration Statement, the Prospectus, any Preliminary
Prospectus used prior to the effective date of the Registration Statement or any
post-effective amendment or supplement to any of them or in any Blue Sky
Application or Authorized Sales Materials a material fact required to be stated
therein or necessary to make the statements therein not misleading, provided
that clauses (a) and (b) apply, to the extent, but only to the extent, that such
untrue statement or omission was made in reliance upon and in conformity with
written information furnished to the Company or the Dealer Manager by or on
behalf of the Dealer specifically for use with reference to the Dealer in the
preparation of the Registration Statement, the Prospectus, any Preliminary
Prospectus used prior to the effective date of the Registration Statement or any
post-effective amendment or supplement to any of them or in preparation of any
Blue Sky Application or Authorized Sales Materials; or (c) any use of sales
literature not authorized or approved by the Company or any use of
“broker-dealer use only” materials with members of the public by the Dealer in
the offer and sale of the Shares or any use of sales literature in a particular
jurisdiction if such material bears a legend denoting that it is not to be used
in connection with the sale of Shares to members of the public in such
jurisdiction; or (d) any untrue statement made by the Dealer or its
representatives or agents or omission to state a fact necessary in order to make
the statements made, in light of the circumstances under which they were made,
not misleading in connection with the offer and sale of the Shares; or (e) any
material violation of this Agreement or the Selected Dealer Agreement entered
into between the Dealer Manager and the Dealer; or (f) any failure to comply
with applicable laws governing privacy issues, money laundering abatement and
anti-terrorist financing efforts, including applicable rules of the SEC, FINRA
and the USA PATRIOT Act of 2001; or (g) any other failure to comply with
applicable rules of FINRA or federal or state securities laws and the rules and
regulations promulgated thereunder. Each such Dealer will reimburse each Dealer
Indemnified Person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such

 

14

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  Loss, expense or action. This indemnity agreement will be in addition to any
liability that such Dealer may otherwise have.

 

  6.4. Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against any indemnifying party under this
Section 6, notify in writing the indemnifying party of the commencement thereof.
The failure of an indemnified party to so notify the indemnifying party will
relieve the indemnifying party from any liability under this Section 6 as to the
particular item for which indemnification is then being sought, but not from any
other liability that it may have to any indemnified party. In case any such
action is brought against any indemnified party, and it notifies an indemnifying
party of the commencement thereof, the indemnifying party will be entitled, to
the extent it may wish, jointly with any other indemnifying party similarly
notified, to participate in the defense thereof, with separate counsel. Such
participation shall not relieve such indemnifying party of the obligation to
reimburse the indemnified party for reasonable legal and other expenses (subject
to Section 6.5) incurred by such indemnified party in defending itself, except
for such expenses incurred after the indemnifying party has deposited funds
sufficient to effect the settlement, with prejudice, of the claim in respect of
which indemnity is sought. Any such indemnifying party shall not be liable to
any such indemnified party on account of any settlement of any claim or action
effected without the consent of such indemnifying party. Any indemnified party
shall not be bound to perform or refrain from performing any act pursuant to the
terms of any settlement of any claim or action effected without the consent of
such indemnified party.

 

  6.5.

The indemnifying party shall pay all legal fees and expenses of the indemnified
party in the defense of such claims or actions; provided, however, that the
indemnifying party shall not be obliged to pay legal expenses and fees to more
than one law firm in connection with the defense of similar claims arising out
of the same alleged acts or omissions giving rise to such claims notwithstanding
that such actions or claims are alleged or brought by one or more parties
against more than one indemnified party. If such claims or actions are alleged
or brought against more than one indemnified party, then the indemnifying party
shall only be obliged to reimburse the expenses and fees of the one law firm
that has been selected by a majority of the indemnified parties against which
such action is finally brought; and in the event a majority of such indemnified
parties are unable to agree on which law firm for which expenses or fees will be
reimbursable by the indemnifying party, then payment shall be made to the first
law firm of record representing an indemnified party against the action or
claim. Such law firm shall be paid only to the extent of services performed by
such law firm and no reimbursement shall be

 

15

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  payable to such law firm on account of legal services performed by another law
firm.

 

7. Survival of Provisions.

 

  7.1. The respective agreements, representations and warranties of the Company
and the Dealer Manager set forth in this Agreement shall remain operative and in
full force and effect regardless of (a) any investigation made by or on behalf
of the Dealer Manager or any Dealer or any person controlling the Dealer Manager
or any Dealer or by or on behalf of the Company or any person controlling the
Company and (b) the acceptance of any payment for the Shares.

 

  7.2. The respective agreements and obligations of the Company and the Dealer
Manager set forth in Sections 3.7, 4.1, 4.4, 4.6, 4.7, 5.3, 6 through 10 and 12
through 13 of this Agreement shall remain operative and in full force and effect
regardless of (a) any investigation made by or on behalf of the Dealer Manager
or any Dealer or any person controlling the Dealer Manager or any Dealer or by
or on behalf of the Company or any person controlling the Company, (b) the
acceptance of any payment for the Shares and (c) the termination of this
Agreement.

 

8. Applicable Law and Invalid Provision.

 

  8.1. This Agreement shall be construed under the laws of the State of
California; provided, however, that causes of action for violations of federal
or state securities laws shall not be governed by this Section 8.1.

 

  8.2. The invalidity or unenforceability of any provision of this Agreement
shall not affect the other provisions hereof, and this Agreement shall be
construed in all respects as if such invalid or unenforceable provision was
omitted.

 

9. Counterparts. This Agreement may be executed in any number of counterparts.
Each counterpart, when executed and delivered, shall be an original contract,
but all counterparts, when taken together, shall constitute one and the same
agreement.

 

10. Successors and Assigns.

 

  10.1. This Agreement shall inure to the benefit of and be binding upon the
Dealer Manager and the Company and their respective successors and permitted
assigns. This Agreement shall inure to the benefit of the Dealers to the extent
set forth in Sections 1, 3 and 6 hereof. Nothing in this Agreement is intended
or shall be construed to give to any other person any right, remedy or claim,
except as otherwise specifically provided herein.

 

16

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  10.2. No party shall assign this Agreement or any right, interest or benefit
under this Agreement without the prior written consent of the other party.

 

11. Amendments. This Agreement may be amended by the written agreement of the
Dealer Manager and the Company.

 

12. Term. Any party to this Agreement shall have the right to terminate this
Agreement on 60 days’ written notice or immediately upon notice to the other
party in the event that such other party shall have failed to comply with any
material provision hereof. If not sooner terminated, the Dealer Manager’s agency
and this Agreement shall terminate upon termination of the Offering Period
without obligation on the part of the Dealer Manager or the Company, except as
set forth in this Agreement. Upon termination of this Agreement, (a) the Company
shall pay to the Dealer Manager all accrued amounts payable under Section 5
hereof at such time as such amounts become payable and (b) the Dealer Manager
shall promptly deliver to the Company all records and documents in its
possession that relate to the Offering and that are not designated as “dealer”
copies.

 

13. Customer Complaints. Each party herby agrees to promptly provide to the
other party copies of any written or otherwise documented complaints from
customers of the Dealer Manager or any Dealer received by such party relating in
any way to the Offering (including, but not limited to, the manner in which the
Shares are offered by the Dealer Manager or the Dealer).

 

14. No Partnership. Nothing in this Agreement shall be construed or interpreted
to constitute the Dealer Manager as in association with or in partnership with
the Company; instead, this Agreement shall only constitute the Dealer Manager as
a dealer authorized by the Company to sell and to manage the sale by others of
the Shares according to the terms set forth in the Registration Statement and
the Prospectus as amended or supplemented and in this Agreement.

 

15. Submission of Orders.

 

  15.1.

Those persons who purchase Shares will be instructed by the Dealer Manager or
the Dealer to make their checks payable to “UMB Bank, N.A., as escrow agent for
KBS Legacy Partners Apartment REIT, Inc.” or, after the Minimum Offering has
been achieved, to the Company, except with respect to Pennsylvania and Tennessee
investors. Checks from Pennsylvania and Tennessee investors must be made payable
to “UMB Bank, N.A., as escrow agent for KBS Legacy Partners Apartment REIT,
Inc.” until the Pennsylvania Minimum and Tennessee Minimum, respectively, have
been achieved. The Dealer Manager, any agent of the Dealer Manager and any
Dealer receiving a check not conforming to the foregoing instructions shall
return such check directly to such subscriber not later than the end of the next
business day following its receipt. Checks received by the Dealer Manager, any
agent of the Dealer Manager

 

17

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  or a Dealer that conform to the foregoing instructions shall be transmitted
for deposit pursuant to one of the methods described in this Section 15.

 

  15.2. Where, pursuant to a Dealer’s internal supervisory procedures, internal
supervisory review is conducted at the same location at which subscription
documents and checks are received from subscribers, checks will be transmitted
by the end of the next business day following receipt by the Dealer for deposit
to the escrow agent for the Company or, after the Minimum Offering has been
achieved, to the Company or its agent, except for investments from Pennsylvania
and Tennessee investors. The Dealer will transmit checks from Pennsylvania
investors for deposit to the escrow agent for the Company or, after the
Pennsylvania Minimum has been achieved, to the Company or its agent. The Dealer
will transmit checks from Tennessee investors for deposit to the escrow agent
for the Company or, after the Tennessee Minimum has been achieved, to the
Company or its agent.

 

  15.3. Where, pursuant to a Dealer’s internal supervisory procedures, final
internal supervisory review is conducted at a different location, checks will be
transmitted by the end of the next business day following receipt by the Dealer
to the office of the Dealer conducting such final internal supervisory review
(the “Final Review Office”). The Final Review Office will in turn by the end of
the next business day following receipt by the Final Review Office, transmit
such checks for deposit to the escrow agent for the Company or, after the
Minimum Offering has been achieved, to the Company or its agent, except for
investments from Pennsylvania and Tennessee investors. The Final Review Office
will transmit checks from Pennsylvania investors for deposit to the escrow agent
for the Company or, after the Pennsylvania Minimum has been achieved, to the
Company or its agent. The Final Review Office will transmit checks from
Tennessee investors for deposit to the escrow agent for the Company or, after
the Tennessee Minimum has been achieved, to the Company or its agent.

 

  15.4.

Where the Dealer Manager (or its agent) receives investor proceeds, checks will
be transmitted by the Dealer Manager (or its agent) for deposit to the escrow
agent for the Company or, after the Minimum Offering has been achieved, to the
Company or its agent (except for investments from Pennsylvania and Tennessee
investors) as soon as practicable but in any event by the end of the second
business day following receipt by the Dealer Manager (or its agent). The Dealer
Manager (or its agent) will transmit checks from Pennsylvania investors for
deposit to the escrow agent for the Company or, after the Pennsylvania Minimum
has been achieved, to the Company or its agent. The Dealer Manager (or its
agent) will transmit checks from Tennessee investors for deposit to the escrow
agent for the Company or, after the Tennessee Minimum has been

 

18

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  achieved, to the Company or its agent. Checks of rejected potential investors
will be promptly returned to such potential investors.

 

  15.5. Notwithstanding the above, the Dealer Manager may authorize certain
Dealers that are “$250,000 broker-dealers” to instruct their customers to make
their checks for Shares subscribed for payable directly to the Dealer or
authorize a debit from the customer’s account maintained with the Dealer for the
amount of shares subscribed for by the customer. In such case, the Dealer will
collect the proceeds of the subscribers’ checks and debits and wire funds to the
escrow agent or, if instructed by the Dealer Manager, issue a check for the
aggregate amount of the subscription proceeds made payable to the order of the
escrow agent, or if instructed by the Dealer Manager, made payable to “KBS
Legacy Partners Apartment REIT, Inc.” The procedures for the transmittal of
checks and wiring of funds of $250,000 broker-dealers will be set forth in the
agreements between the $250,000 broker-dealer and the Dealer Manager.

 

 

 

[signature page follows]

 

 

 

 

 

 

19

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If the foregoing correctly sets forth our understanding, please indicate your
acceptance thereof in the space provided below for that purpose, whereupon this
letter and your acceptance shall constitute a binding agreement between us as of
the date first above written.

 

Very truly yours,

 

KBS LEGACY PARTNERS APARTMENT REIT, INC.

 

 

 

By:   /s/ Peter M. Bren   Name: Peter M. Bren   Title:   President

 

Accepted and agreed as of the

date first above written.

 

KBS CAPITAL MARKETS GROUP LLC

 

 

 

By:   /s/ Mike Crimmins   Name: Mike Crimmins   Title:   CEO, KBS Capital
Markets Group

 

20

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EXHIBIT A

KBS LEGACY PARTNERS APARTMENT REIT, INC.

Up to 280,000,000 Shares of Common Stock

FORM OF SELECTED DEALER AGREEMENT

Ladies and Gentlemen:

KBS Capital Markets Group LLC, as the dealer manager (the “Dealer Manager”) for
KBS Legacy Partners Apartment REIT, Inc. (the “Company”), a Maryland
corporation, invites you (the “Dealer”) to participate in the distribution of up
to 280,000,000 shares of the Company’s common stock (the “Shares”) subject to
the following terms. Capitalized terms not otherwise defined herein shall have
the meanings set forth in the Dealer Manager Agreement between the Dealer
Manager and the Company, dated March 12, 2010, in the form attached hereto as
Exhibit A (the “Dealer Manager Agreement”).

 

I. Dealer Manager Agreement

By your acceptance of this Agreement, you will become one of the Dealers
referred to in the Dealer Manager Agreement and will be entitled and subject to
the provisions contained in such Dealer Manager Agreement related to the
Dealers, including the representations and warranties of the Company contained
in Section 1 of the Dealer Manager Agreement and the indemnification provisions
contained in Section 6 of the Dealer Manager Agreement, including specifically
the provisions of such Dealer Manager Agreement (Section 6.3) wherein each
Dealer severally agrees to indemnify and hold harmless the Company, the Dealer
Manager and each their officers and directors (including any person named in the
Registration Statement, with his consent, as about to become a director), each
person who signed the Registration Statement and each person, if any, who
controls the Company and the Dealer Manager within the meaning of Section 15 the
Securities Act of 1933, as amended (the “Securities Act”). The indemnification
agreements contained in Section 6 of the Dealer Manager Agreement shall survive
the termination of this Agreement and the Dealer Manager Agreement.

 

II. Submission of Orders

Those persons who purchase Shares will be instructed by the Dealer to make their
checks payable to “UMB Bank, N.A. as escrow agent for KBS Legacy Partners
Apartment REIT, Inc.” or, after the Minimum Offering has been achieved, to the
Company, except with respect to Pennsylvania and Tennessee investors. Checks
from Pennsylvania and Tennessee investors must be made payable to “UMB Bank,
N.A., as escrow agent for KBS Legacy Partners Apartment REIT, Inc.” until the
Pennsylvania Minimum and Tennessee Minimum, respectively, have been achieved.
The Dealer will return any check it receives not conforming to the foregoing
instructions directly to such subscriber not later than the end of the next
business day following its receipt. Checks

 

A-1

--------------------------------------------------------------------------------

received by the Dealer that conform to the foregoing instructions shall be
transmitted for deposit pursuant to one of the following methods:

Where, pursuant to the Dealer’s internal supervisory procedures, internal
supervisory review is conducted at the same location at which subscription
documents and checks are received from subscribers, checks will be transmitted
by the end of the next business day following receipt by the Dealer for deposit
to an escrow agent for the Company or, after the Minimum Offering has been
achieved, to the Company or its agent, except for investments from Pennsylvania
and Tennessee investors. The Dealer will transmit checks from Pennsylvania
investors for deposit to the escrow agent for the Company or, after the
Pennsylvania Minimum has been achieved, to the Company or its agent. The Dealer
will transmit checks from Tennessee investors for deposit to the escrow agent
for the Company or, after the Tennessee Minimum has been achieved, to the
Company or its agent.

Where, pursuant to the Dealer’s internal supervisory procedures, final internal
supervisory review is conducted at a different location, checks will be
transmitted by the end of the next business day following receipt by the Dealer
to the office of the Dealer conducting such final internal supervisory review
(the “Final Review Office”). The Final Review Office will in turn by the end of
the next business day following receipt by the Final Review Office transmit such
checks for deposit to the escrow agent for the Company or, after the Minimum
Offering has been achieved, to the Company or its agent, except for investments
from Pennsylvania and Tennessee investors. The Final Review Office will transmit
checks from Pennsylvania investors for deposit to the escrow agent for the
Company or, after the Pennsylvania Minimum has been achieved, to the Company or
its agent. The Final Review Office will transmit checks from Tennessee investors
for deposit to the escrow agent for the Company or, after the Tennessee Minimum
has been achieved, to the Company or its agent.

 

III. Pricing

Except as otherwise provided in the “Plan of Distribution” section of the
Prospectus (as amended and supplemented), the Shares are to be sold at a per
Share cash price as follows:

 

Distribution Channel

   Primary
Offering
Shares    DRP Shares

Sales through a Dealer earning transaction-based compensation

   $ 10.00    $ 9.50

Sales through all other distribution channels as described in the Prospectus

   $   9.35    $ 9.50

 

A-2

--------------------------------------------------------------------------------

Upon the terms set forth in the Prospectus, pursuant to the Company’s volume
discount program, Shares shall be sold at reduced prices in accordance with the
following table, which may be amended and supplemented by the Prospectus:

 

Dollar Volume Shares Purchased

   Price Per Share to
Investor

$                0     to     $   999,999

   $10.00

$  1,000,000     to     $1,999,999

   $  9.90

$  2,000,000     to     $2,999,999

   $  9.80

$  3,000,000     to     $3,999,999

   $  9.65

$  4,000,000     to     $9,999,999

   $  9.50

$10,000,000   and above

   $  9.40

The reduced selling price (and the applicable selling commission and dealer
manager fee under the volume discount program) will apply to the entire
purchase. For example, a purchase of 250,000 shares in a single transaction
would result in a purchase price of $2,450,000 ($9.80 per share).

In addition, as described in the Prospectus, the Dealer Manager may sell shares
to the Dealer, its retirement plans, its representatives and the family members,
IRAs and the qualified plans of its representatives at a purchase price of $9.35
per share, reflecting that selling commissions in the amount of $0.65 per share
will not be payable in consideration of the services rendered by the Dealer and
its representatives in the Offering. For purposes of this discount, a family
member includes such person’s spouse, parent, child, sibling, mother- or
father-in-law, son- or daughter-in law or brother- or sister-in-law.

 

IV. Dealer’s Commissions

Except for discounts described in or as otherwise provided in the “Plan of
Distribution” section of the Prospectus (as amended and supplemented), the
Dealer’s selling commission applicable to the public offering price of the
Shares sold by the Dealer, which it is authorized to sell hereunder, is as
follows:

 

     Selling Commissions

Distribution Channel

   Primary
Offering
Shares    DRP

Sales through a Dealer earning transaction-based compensation

   6.5%    0.0%

Sales through all other distribution channels as discussed in the Prospectus

   0.0%    0.0%

 

A-3

--------------------------------------------------------------------------------

The preceding commission (for the Dealer distribution channel) shall be adjusted
for sales under the volume discount program in accordance with the following
table, which may be amended and supplemented by the Prospectus:

 

Dollar Volume Shares Purchased

   Sales
Commissions
(Based on $10.00
Price Per Share)    Dealer
Manager Fee
(Based on $10.00
Price Per Share)

$                0     to     $   999,999

   6.5%    3.0%

$  1,000,000     to     $1,999,999

   5.5%    3.0%

$  2,000,000     to     $2,999,999

   4.5%    3.0%

$  3,000,000     to     $3,999,999

   3.5%    2.5%

$  4,000,000     to     $9,999,999

   2.5%    2.0%

$10,000,000   and above

   1.5%    2.0%

The reduced selling commission and dealer manager fee will apply to the entire
purchase. All commission rates and dealer manager fees are calculated assuming a
price per share of $10.00. For example, a purchase of 250,000 shares in a single
transaction would result in selling commissions of $112,500 and dealer manager
fees of $75,000.

All selling commissions shall be based on Shares sold by Dealer and accepted and
confirmed by the Company, which commission will be paid by the Dealer Manager.
For these purposes, a “sale of Shares” shall occur if and only if a transaction
has closed with a subscriber for Shares pursuant to all applicable offering and
subscription documents, payment for the Shares has been received in full in the
manner provided in Section II hereof, the Company has accepted the subscription
agreement of such subscriber and the Company has thereafter distributed the
commission to the Dealer Manager in connection with such transaction. The Dealer
affirms that the Dealer Manager’s liability for commissions payable is limited
solely to the proceeds of commissions receivable from the Company and the Dealer
hereby waives any and all rights to receive payment of commissions due until
such time as the Dealer Manager is in receipt of the commission from the
Company.

In addition, upon the terms set forth herein or in the Prospectus (as amended
and supplemented), the Dealer Manager may agree to reallow to any Dealer a
portion of its dealer manager fee pursuant to a separate marketing fee
agreement. For volume discount sales of $3,000,000 or more, the dealer manager
fee is reduced as set forth above. The amount of the dealer manager fee
reallowed to a Dealer in that instance will be negotiated on a transaction by
transaction basis. The Dealer Manager or, in certain cases at the option of the
Company, the Company, will pay or reimburse bona fide invoiced due diligence
expenses of Dealer unless such payment would cause the aggregate of such
reimbursements to Dealer and other broker-dealers, together with all other
organization and offering expenses, to exceed 15% of gross proceeds from the
Offering.

The parties hereby agree that the foregoing commission is not in excess of the
usual and customary distributors’ or sellers’ commission received in the sale of
securities similar to the Shares, that Dealer’s interest in the Offering is
limited to such commission from the Dealer Manager and Dealer’s indemnity
referred to in Section 6 of the Dealer

 

A-4

--------------------------------------------------------------------------------

Manager Agreement and that the Company is not liable or responsible for the
direct payment of such commission to the Dealer.

 

V. Payment

Payment of selling commissions or any reallowance of a portion of the dealer
manager fee will be made by the Dealer Manager (or by the Company as provided in
the Dealer Manager Agreement) to the Dealer within 30 days of the receipt by the
Dealer Manager of the gross commission payments from the Company. Dealer
acknowledges that, if the Company pays selling commissions to the Dealer
Manager, the Company is relieved of any obligation for selling commissions to
the Dealer. The Company may rely on and use the preceding acknowledgment as a
defense against any claim by the Dealer for selling commissions the Company pays
to Dealer Manager but that Dealer Manager fails to remit to the Dealer.

 

VI. Right to Reject Orders or Cancel Sales

All orders, whether initial or additional, are subject to acceptance by and
shall only become effective upon confirmation by the Company. The Dealer agrees
that the Company, in its sole and absolute discretion, may accept or reject any
subscription, in whole or in part, for any reason whatsoever, and no commission
will be paid to the Dealer with respect to the portion of any subscription that
is rejected. Orders not accompanied by a Subscription Agreement with the
signature page and the required check in payment for the Shares may be rejected.
Issuance and delivery of the Shares will be made only after actual receipt of
payment therefor. If any check is not paid upon presentment, or if the Company
is not in actual receipt of clearinghouse funds or cash, certified or cashier’s
check or the equivalent in payment for the Shares, the Company reserves the
right to cancel the sale without notice. In the event an order is rejected,
canceled or rescinded for any reason, the Dealer agrees to return to the Dealer
Manager any commission theretofore paid with respect to such order within 30
days thereafter and, failing to do so, the Dealer Manager shall have the right
to offset amounts owed against future commissions due and otherwise payable to
the Dealer.

 

VII. Covenants of the Dealer

Dealer covenants and agrees with the Dealer Manager and the Company that:

 

  7.1 Dealer will use its best efforts to sell the Shares for cash on the terms
and conditions set forth in this Agreement and the Prospectus as amended and
supplemented.

 

  7.2

In connection with the Dealer’s participation in the offer and sale of Shares
(including, without limitation, all initial and additional subscriptions for
Shares and any resales and transfers of Shares), the Dealer will comply with all
requirements and obligations imposed upon it by (a) the Securities Act, the
Securities Exchange Act of 1934, as

 

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  amended (the “Exchange Act”), and the rules and regulations of the SEC
promulgated under both such acts; (b) all applicable state securities laws and
regulations as from time to time in effect; (c) the applicable rules of FINRA,
including, but not in any way limited to, Rule 2730, Rule 2740, Rule 2420, Rule
2440 and Rule 2750 of the NASD Conduct Rules and FINRA Rule 2310; (d) all
applicable rules and regulations relating to the suitability of investors,
including, without limitation, the provisions of Articles III.C. and III.E of
the Statement of Policy regarding Real Estate Investment Trusts of the North
American Securities Administrators Association, Inc. (the “NASAA Guidelines”);
(e) any other state and federal laws and regulations applicable to the Offering,
the sale of Shares or the activities of the Dealer pursuant to this Agreement,
including without limitation the privacy standards and requirements of state and
federal laws, including the Gramm-Leach-Bliley Act of 1999, and the laws
governing money laundering abatement and anti-terrorist financing efforts,
including the applicable rules of the SEC and FINRA, the Bank Secrecy Act, as
amended, the USA Patriot Act of 2001, and regulations administered by the Office
of Foreign Asset Control at the Department of the Treasury; and (f) this
Agreement and the Prospectus as amended and supplemented.

 

  7.3 The Dealer will not offer Shares in any jurisdiction unless and until
(a) the Dealer has been advised in writing by the Company or the Dealer Manager
that the Shares are either registered in accordance with, or exempt from, the
securities laws of such jurisdiction and (b) the Dealer has all required
licenses and registrations to offer shares in that jurisdiction.

 

  7.4 The Dealer will offer Shares (both at the time of an initial subscription
and at the time of any additional subscription) only to persons who meet the
financial qualifications and suitability standards set forth in the Prospectus
as amended or supplemented or in any suitability letter or memorandum sent to
the Dealer by the Company or the Dealer Manager. Nothing contained in this
section shall be construed to relieve the Dealer of the Dealer’s suitability
obligations under Rule 2310 of the NASD Conduct Rules (or applicable successor
FINRA rule).

 

  7.5

The Dealer agrees to comply with the record-keeping requirements imposed by
(a) federal and state securities laws and the rules and regulations thereunder,
(b) the applicable rules of FINRA and (c) the NASAA Guidelines, including the
requirement to maintain records (the “Suitability Records”) of the information
used to determine that an investment in Shares is suitable and appropriate for
each subscriber for a period of six years from the date of the sale of the
Shares. The Dealer further agrees to make the Suitability Records available to
the Dealer Manager and the Company upon request and to make them available to
representatives of the SEC and FINRA and applicable state securities

 

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  administrators upon the Dealer’s receipt of a subpoena or other appropriate
document request from such agency.

 

  7.6 The Dealer will provide the Dealer Manager with such information relating
to the offer and sale of the Shares by it as the Dealer Manager may from time to
time reasonably request or as may be requested to enable the Dealer Manager or
the Company, as the case may be, to prepare such reports of sale as may be
required to be filed under applicable federal or state securities laws and the
rules and regulations thereunder.

 

  7.7 The Dealer agrees to be bound by the terms of the Amended and Restated
Escrow Agreement dated March 8, 2010, among UMB Bank, N.A., as escrow agent, the
Dealer Manager and the Company, copies of which are attached hereto as Exhibit B
and the Dealer further agrees that it will not represent or imply that UMB Bank,
N.A., as the escrow agent identified in the Prospectus, has investigated the
desirability or advisability of an investment in the Company or has approved,
endorsed or passed upon the merits of the Shares or of the Company, nor will the
Dealer use the name of said escrow agent in any manner whatsoever in connection
with the offer or sale of the Shares other than by acknowledgment that it has
agreed to serve as escrow agent.

 

VIII. Prospectus and Sales Literature

Dealer is not authorized or permitted to give, and will not give, any
information or make any representation (written or oral) concerning the Shares
except as set forth in the Prospectus as amended and supplemented or in the
Authorized Sales Materials. The Dealer Manager will supply Dealer with
reasonable quantities of the Prospectus, including amendments of and supplements
to the Prospectus, and any Authorized Sales Materials, for delivery to
investors, and Dealer will deliver a copy of the Prospectus, including any
amendments and supplements thereto, as required by the Securities Act, the
Exchange Act and the rules and regulations promulgated under both. The Dealer
agrees that (a) it will deliver a copy of the Prospectus as amended and
supplemented to each investor to whom an offer is made prior to or
simultaneously with the first solicitation of an offer to sell the Shares to an
investor and (b) it will not send or give any Authorized Sales Materials to an
investor unless the Authorized Sales Materials are accompanied by or preceded by
the Prospectus as amended and supplemented.

Except for the Authorized Sales Materials, the Company has not authorized the
use of any supplemental literature or sales materials in connection with the
Offering and the Dealer agrees not to use any material unless it has been
authorized by the Company and provided to the Dealer by the Dealer Manager.
Dealer agrees that it will not show or give to any investor or prospective
investor or reproduce any material or writing that is supplied to it by the
Dealer Manager and marked “broker-dealer use only” or otherwise bearing a legend
denoting that it is not to be used in connection with the sale of Shares to
members of the public. Dealer agrees that it will not show or give to any
investor or prospective investor in a particular jurisdiction any material or
writing that is supplied to

 

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it by the Dealer Manager if such material bears a legend denoting that it is not
to be used in connection with the sale of Shares to members of the public in
such jurisdiction. Dealer agrees that it will not use in connection with the
offer or sale of Shares any material or writing that relates to another company
supplied to it by the Company or the Dealer Manager bearing a legend that states
that such material may not be used in connection with the offer or sale of any
securities of the Company.

Dealer agrees to furnish a copy of the Prospectus (as amended and supplemented)
required for compliance with the provisions of federal and state securities laws
and the rules and regulations thereunder, including Rule 15c2-8 under Exchange
Act. Regardless of the termination of this Agreement, Dealer will deliver a
Prospectus (as amended and supplemented) in transactions in the Shares for a
period of 90 days from the effective date of the Registration Statement or such
other period as may be required by the Exchange Act or the rules and regulations
thereunder.

 

IX. License and Association Membership

Dealer represents and warrants to the Company and the Dealer Manager that it is
a properly registered or licensed broker-dealer, duly authorized to offer and
sell Shares under federal securities laws and regulations and the securities
laws and regulations of all states where it offers or sells Shares and that it
is a member of FINRA in good standing. This Agreement shall automatically
terminate if the Dealer ceases to be a member of FINRA in good standing or is
subject to a FINRA suspension or if the Dealer’s registration or license under
the Exchange Act or any state securities laws or regulations is terminated or
suspended; the Dealer agrees to notify the Dealer Manager immediately if any of
these events occur.

 

X. Anti-Money Laundering Compliance Programs

Dealer’s acceptance of this Agreement constitutes a representation to the
Company and the Dealer Manager that the Dealer has established and implemented
an anti-money laundering and customer identification compliance program (“AML
Program”) in accordance with applicable laws and regulations, including federal
and state securities laws, applicable rules of FINRA, and the Bank Secrecy Act,
Title 31 U.S.C. Sections 5311-5355, as amended by the USA Patriot Act of 2001,
and related regulations (31 C.F.R. Part 103), and will continue to maintain its
AML Program consistent with applicable laws and regulations during the term of
this Agreement.

In accordance with these applicable laws and regulations and its AML Program,
Dealer agrees to verify the identity of its new customers; to maintain customer
records; to check the names of new customers against government watch lists,
including the Office of Foreign Asset Control’s (“OFAC”) list of Specially
Designated Nationals and Blocked Persons. Additionally, Dealer will monitor
account activity to identify patterns of unusual size or volume, geographic
factors and any other “red flags” described in the USA Patriot Act as potential
signals of money laundering or terrorist financing. Dealer will submit to the
Financial Crimes Enforcement Network any required suspicious activity reports
about such activity and further will disclose such activity to applicable

 

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federal and state law enforcement when required by law. Upon request by the
Dealer Manager at any time, the Dealer hereby agrees to furnish (a) a copy of
its AML Program to the Dealer Manager for review, and (b) a copy of the findings
and any remedial actions taken in connection with Dealer’s most recent
independent testing of its AML Program.

 

XI. Effectiveness, Termination and Amendment

This Agreement shall become effective upon the execution hereof by the Dealer
and the receipt of this executed Agreement by the Dealer Manager. Dealer will
immediately suspend or terminate its offer and sale of Shares upon the request
of the Company or the Dealer Manager at any time and will resume its offer and
sale of Shares hereunder upon subsequent request of the Company or the Dealer
Manager. In addition to termination pursuant to Section IX, any party may
terminate this Agreement by written notice, which termination shall be effective
48 hours after such notice is given. Upon the sale of all of the Shares or the
termination of the Dealer Manager Agreement, this Agreement shall terminate
without obligation on the part of the Dealer or the Dealer Manager, except as
set forth in this Agreement. The indemnification agreements contained in
Section 6 of the Dealer Manager Agreement shall survive the termination of this
Agreement and the Dealer Manager Agreement, and the respective agreements and
obligations of the Dealer Manager and the Dealer set forth in Sections IV, V,
VI, 7.2, 7.5, 7.6, VIII and XI through XXI of this Agreement shall remain
operative and in full force and effect regardless of the termination of this
Agreement.

This Agreement may be amended at any time by the Dealer Manager by written
notice to the Dealer. Any such amendment shall be deemed accepted by the Dealer
upon the Dealer placing an order for the sale of Shares after it has received
such notice.

 

XII. Privacy Laws

The Dealer Manager and Dealer (each referred to individually in this section as
a “party”) agree as follows:

 

  12.1 Each party agrees to abide by and comply in all respects with (a) the
privacy standards and requirements of the Gramm-Leach-Bliley Act of 1999
(“GLBA”) and applicable regulations promulgated thereunder, (b) the privacy
standards and requirements of any other applicable federal or state law,
including the Fair Credit Reporting Act (“FCRA”) and (c) its own internal
privacy policies and procedures, each as may be amended from time to time.

 

  12.2 Dealer shall not disclose nonpublic personal information (as defined
under the GLBA) of all customers who have opted out of such disclosures, except
to service providers (when necessary and as permitted under the GLBA) or as
otherwise required by applicable law;

 

  12.3 Except as expressly permitted under the FCRA, Dealer shall not disclose
any information that would be considered a “consumer report” under the FCRA; and

 

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  12.4 Dealer shall be responsible for determining which customers have opted
out of the disclosure of nonpublic personal information by periodically
reviewing and, if necessary, retrieving a list of such customers (the “List”) to
identify customers that have exercised their opt-out rights. In the event either
party expects to use or disclose nonpublic personal information of any customer
for purposes other than servicing the customer, or as otherwise required by
applicable law, that party must first consult the List to determine whether the
affected customer has exercised his or her opt-out rights. Each party
understands that it is prohibited from using or disclosing any nonpublic
personal information of any customer that is identified on the List as having
opted out of such disclosures.

 

XIII. Customer Complaints

Each party agrees to promptly provide to the other party copies of any written
or otherwise documented complaints from customers of the Dealer received by such
party relating in any way to the Offering (including, but not limited to, the
manner in which the Shares are offered by the Dealer).

 

XIV. Notice

All notices to the Dealer Manager shall be in writing addressed to the Dealer
Manager at the address set forth below. All notices to Dealer shall be in
writing addressed to the Dealer at the address specified by the Dealer at the
end of this Agreement. Notices addressed to the intended recipient as described
above will be duly given (a) when personally delivered or by commercial
messenger, (b) one business day following deposit with a recognized overnight
courier service, provided such deposit occurs prior to the deadline imposed by
such service for overnight delivery; or (c) when transmitted, if sent by
facsimile copy, provided confirmation of receipt is received by sender and such
notice is sent by an additional method provided hereunder.

To the Dealer Manager:

 

KBS Capital Markets Group LLC    660 Newport Center Drive, Suite 1200    Newport
Beach, California 92660   

 

XV. Confirmation

The Dealer Manager hereby acknowledges that the Dealer Manager has assumed the
duty to confirm on behalf of the Dealers all orders for purchases of Shares
accepted by the Company. Such confirmations will comply with the rules of the
SEC and FINRA and will comply with the applicable laws of such other
jurisdictions to the extent that the Dealer Manager is advised of such laws in
writing by the Dealer.

 

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XVI. Entire Agreement

This Agreement and the exhibits hereto are the entire agreement of the parties
and supersede all prior agreements, if any, relating to the subject matter
hereof between the parties hereto.

 

XVII. Successors and Assigns

No party shall assign this Agreement or any right, interest or benefit under
this Agreement without the prior written consent of the other party. This
Agreement shall be binding upon the Dealer Manager and the Dealer and their
respective successors and permitted assigns.

 

XVIII. Arbitration, Attorney’s Fees, Jury Trial and Applicable Law

In the event of a dispute concerning any provision of this Agreement (including
any provisions of the Dealer Manager Agreement incorporated into this
Agreement), either party may require the dispute to be submitted to binding
arbitration, conducted on a confidential basis, under the then current
commercial arbitration rules of FINRA or the American Arbitration Association
(at the discretion of the party requesting arbitration) in accordance with the
terms of this Agreement (including the governing law provisions of this section)
and pursuant to the Federal Arbitration Act (9 U.S.C. §§ 1 – 16). The parties
will request that the arbitrator or arbitration panel (“Arbitrator”) issue
written findings of fact and conclusions of law. The Arbitrator shall not be
empowered to make any award or render any judgment for punitive damages, and the
Arbitrator shall be required to follow applicable law in construing this
Agreement, making awards, and rendering judgments. The decision of the
arbitration panel shall be final and binding, and judgment upon any arbitration
award may be entered by any court having jurisdiction. All arbitration hearings
will be held at the Los Angeles FINRA District Office or at another mutually
agreed upon site. The parties may agree on a single arbitrator, or, if the
parties cannot so agree, each party will have the right to choose one
arbitrator, and the selected arbitrators will choose a third arbitrator. Each
arbitrator must have experience and education that qualify him or her to
competently address the specific issues to be designated for arbitration.
Notwithstanding the preceding, no party will be prevented from immediately
seeking provisional remedies in courts of competent jurisdiction, including but
not limited to, temporary restraining orders and preliminary injunctions, but
such remedies will not be sought as a means to avoid or stay arbitration. Except
as provided otherwise in Section 6 of the Dealer Manager Agreement, in any
action or arbitration to enforce the provisions of this Agreement or to secure
damages for its breach, the prevailing party shall recover its costs and
reasonable attorney’s fees. Each party to this Agreement hereby waives a trial
by jury in any legal action or proceeding relating to this Agreement. This
Agreement shall be construed under the laws of the State of California;
provided, however, that the governing law for causes of action for violations of
federal or state securities law shall be governed by the applicable federal or
state securities law.

 

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XIX. Severability

The invalidity or unenforceability of any provision of this Agreement shall not
affect the other provisions hereof, and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision was omitted.

 

XX. Counterparts

This Agreement may be executed in any number of counterparts. Each counterpart,
when executed and delivered, shall be an original contract, but all
counterparts, when taken together, shall constitute one and the same agreement.

 

XXI. No Partnership

Nothing in this Agreement shall be construed or interpreted to constitute the
Dealer as an employee, agent or representative of, or in association with or in
partnership with, the Dealer Manager, the Company or the other Dealers; instead,
this Agreement shall only constitute the Dealer as a dealer authorized by the
Dealer Manager to sell the Shares according to the terms set forth in the
Registration Statement and the Prospectus as amended and supplemented and in
this Agreement.

 

[signature page follows]

 

 

 

 

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Attest:

 

   

THE DEALER MANAGER:

 

KBS CAPITAL MARKETS GROUP LLC

 

By:         By:       Name:            Name:        Title:            Title:   
 

We have read the foregoing Agreement and we hereby accept and agree to the terms
and conditions set forth therein. We hereby represent that the list below of
jurisdictions in which we are registered or licensed as a broker or dealer and
are fully authorized to sell securities is true and correct, and we agree to
advise you of any change in such list during the term of this Agreement.

 

1. Identity of Dealer:

Name:      

Type of entity:            (corporation, partnership or proprietorship)

Organized in the State of:          (State)

Licensed as broker-dealer in the following States:      

    

Tax I.D. #:      

 

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2. Person to receive notice pursuant to Section XIV:

 

Name:      

Company:      

Address:     

City, State and Zip Code:     

Telephone No.:    (             )

Telefax No.:         (             )

E-mail Address:      

 

 

 

 

 

 

AGREED TO AND ACCEPTED BY THE DEALER:

 

 

 

(Dealer’s Firm Name)

  By:         Authorized Signature   Title:    

 

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