Document:

KBS Legacy Q1 2013 Exhibit 10.3

Exhibit 10.3

KBS LEGACY PARTNERS APARTMENT REIT, INC.
Up to $2,760,000,000 of Shares of Common Stock
DEALER MANAGER AGREEMENT
March 8, 2013

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 $2,760,000,000 of shares of its common stock, $.01 par value per share (the “Shares”), of which $2,000,000,000 of Shares (the “Primary Shares”) will be sold to the public pursuant to the Company’s primary offering, and $760,000,000 of Shares (the “DRP 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
	 
	$10.68
	 
	$10.15

	Sales through all other distribution channels as discussed in the Prospectus
	 
	$9.9858
	 
	$10.15

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

		
	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. 333-181777) 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 of the Shares 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 the Company's charter, as amended and supplemented, 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, Rule 2440 of the NASD Conduct Rules and FINRA Rule 2310 and FINRA Rule 5141; (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 

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

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	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, including initial enrollments and increased participations in the DRP). 
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.

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	4.6.
	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.

		
	4.7.
	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. 

		
	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:

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	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 $10.68
Price Per Share)
	Dealer
Manager Fee
(Based on $10.68
Price Per Share)
	Price Per
Share to
Investor*

	$0
	to
	$999,999
	6.50%
	3.00%
	$10.6800

	$1,000,000
	to
	$1,999,999
	5.50%
	3.00%
	$10.5732

	$2,000,000
	to
	$2,999,999
	4.50%
	3.00%
	$10.4664

	$3,000,000
	to
	$3,999,999
	3.50%
	2.50%
	$10.3062

	$4,000,000
	to
	$9,999,999
	2.00%
	2.50%
	$10.1460

	$10,000,000
	and above
	 
	1.00%
	2.00%
	$9.9858

The reduced selling price, 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 $10.68. For example, a purchase of 250,000 shares in a single transaction would result in a purchase price of $2,616,600 ($10.4664 per share), selling commissions of $120,150 and dealer manager fees of $80,100.

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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, within 30 days after the end of the month in which the primary offering terminates, the Dealer Manager shall reimburse the Company to the extent that such Company reimbursements cause total underwriting compensation to exceed 10% of gross proceeds from the primary offering.  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 as described in the Prospectus. 
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 $9.9858 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 $9.9858 per share, reflecting that selling commissions in the amount of $0.6942 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.
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 

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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 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 

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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 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 (ii) in any 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 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; 

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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 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 (ii) in any 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 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 

13

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 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 

14

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 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, but rather by the applicable federal or state securities law.

		
	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.

15

		
	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.  

		
	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 only be amended by the written agreement of the Dealer Manager and the Company, except as set forth in Section 5 hereof.

		
	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 the Company.  The Dealer Manager, any agent of the Dealer Manager and any Dealer receiving a check not conforming to the foregoing instructions shall return 

16

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 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 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 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 Company or its agent 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).  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, or if instructed by the Dealer Manager, issue a check for the aggregate amount of the subscription proceeds 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]

17

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/ David E. Snyder

		
	Name:
	David E. Snyder

		
	Title:
	Chief Financial Officer    

Accepted and agreed as of the
date first above written.
KBS CAPITAL MARKETS GROUP LLC

		
	By:
	/s/ Michael Crimmins

		
	Name:
	Michael Crimmins

		
	Title:
	CEO

18

EXHIBIT A
KBS LEGACY PARTNERS APARTMENT REIT, INC.
Up to $2,760,000,000 of 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 $2,760,000,000 of 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 8, 2013, 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 the Company.  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 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 

A-1

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 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 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
	$10.68
	$10.15

	Sales through all other distribution channels as described in the Prospectus
	$9.9858
	$10.15

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
	$10.6800

	$
	1,000,000
	

	to
	$1,999,999
	$10.5732

	$
	2,000,000
	

	to
	$2,999,999
	$10.4664

	$
	3,000,000
	

	to
	$3,999,999
	$10.3062

	$
	4,000,000
	

	to
	$9,999,999
	$10.1460

	$
	10,000,000
	

	and above
	$9.9858

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 $2,616,600 ($10.4664 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 $9.9858 per share, reflecting that selling commissions in the amount of $0.6942 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.  

A-2

		
	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%

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 $10.68
Price Per Share)
	Dealer  
Manager Fee 
(Based on $10.68
Price Per Share)

	$
	0
	

	to
	$999,999
	6.50%
	3.00%

	$
	1,000,000
	

	to
	$1,999,999
	5.50%
	3.00%

	$
	2,000,000
	

	to
	$2,999,999
	4.50%
	3.00%

	$
	3,000,000
	

	to
	$3,999,999
	3.50%
	2.50%

	$
	4,000,000
	

	to
	$9,999,999
	2.00%
	2.50%

	$
	10,000,000
	

	and above
	1.00%
	2.00%

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 $10.68.  For example, a purchase of 250,000 shares in a single transaction would result in selling commissions of $120,150 and dealer manager fees of $80,100.
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.

A-3

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 the Company's 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 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, 

A-4

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 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 2420 and Rule 2440 of the NASD Conduct Rules and FINRA Rule 2310 and FINRA Rule 5141; (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, including initial enrollments and increased participations in the DRP) only to persons who meet the 

A-5

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 FINRA Rule 2111 or FINRA Rule 2310.  Dealer shall not purchase any Shares for a discretionary account without obtaining the prior written approval of Dealer's customer and his or her signature on a subscription agreement.
		
	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 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.

		
	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 

A-6

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 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 

A-7

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 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.

A-8

		
	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 

		
	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 to Dealer, if sent by facsimile copy (provided confirmation of receipt is received by sender) or electronic transmission (e-mail) and in each case such notice is also followed contemporaneously by the method provided under either (a) or (b) above.
To the Dealer Manager:
KBS Capital Markets Group LLC
660 Newport Center Drive, Suite 1200
Newport Beach, California 92660

A-9

		
	XV.
	Confidentiality

In connection with the Dealer's due diligence review of the Offering, the Dealer (or its agent performing due diligence) may request receipt of confidential information regarding the Offering, the Company, the Company's sponsor or the sponsor's affiliates.  The Company and the Dealer Manager will reasonably cooperate with such Dealer to accommodate such request; provided, however, any such information provided to Dealer or its agent will be subject to the terms of the confidentiality agreement attached as Appendix A to this Agreement.
		
	XVI.
	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.
		
	XVII.
	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.
		
	XVIII.
	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.  
		
	XIX.
	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 

A-10

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.
		
	XX.
	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.
		
	XXI.
	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.
		
	XXII.
	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]

A-11

	
							
	 
	 
	 
	 
	THE DEALER MANAGER:

	 
	 
	 
	 
	 
	 
	 

	Attest:
	 
	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:
	 

	 
	 
	 
	 
	 
	 

	Organized in the State of:
	 

	 
	 
	 
	 
	(State)

	 
	 
	 
	 
	 
	 

	Licensed as broker-dealer in the following States:
	 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	Tax I.D.#:
	 

	 
	 
	 
	 
	 
	 

A-12

		
	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:
	 

	 
	 
	 

A-13

APPENDIX A
Dealer Confidentiality Agreement
KBS Capital Advisors LLC (“KBS CA”), its subsidiaries and/or affiliates  (which group includes, but is not limited to, KBS Capital Markets Group LLC, KBS Holdings LLC (“KBS Holdings”) and investment programs sponsored by KBS Holdings and/or its respective subsidiaries and/or affiliates (whether such programs are sponsored directly or through joint ventures)), and joint venture partners of KBS Holdings  and KBS CA and their affiliates including, without limitation, Legacy Partners Residential Realty LLC (“Legacy”) (collectively, “KBS”), may disclose Confidential Information (as defined below) to ____________________ (“Recipient”) and its Representatives (as defined below), in connection with their due diligence efforts in respect of one or more offerings of securities sponsored by KBS (the “Offerings”).  This Appendix A constitutes part of the Selected Dealer Agreement between Dealer Manager and Dealer (the “Selected Dealer Agreement”) and sets forth the agreements and understandings among the Dealer Manager, Dealer and KBS with respect to the disclosure of Confidential Information.
1.    General.  As a condition to receiving such Confidential Information, Dealer hereby agrees that it and its Representatives will: (i) hold all such Confidential Information in trust and in the strictest confidence, (ii) protect such Confidential Information from disclosure in accordance with a standard of care that shall be no less than the care such party uses to protect its own confidential information of like importance but in no event with less than reasonable care, (iii) treat all such Confidential Information in accordance with the provisions of this Appendix A and (iv) take or abstain from taking certain other actions hereinafter set forth.  The Dealer shall only make the Confidential Information available to its Representatives that have a need to know such Confidential Information in connection with their due diligence efforts in respect of the Offerings.
Prior to the receipt of any Confidential Information, each Representative shall have been made aware of and have agreed to be bound by the terms set forth in this Appendix A or have entered into a separately-negotiated confidentiality agreement with KBS.  Except as otherwise expressly provided herein, neither the Dealer nor any of its Representatives shall use, copy, disclose, disseminate, or permit any unauthorized person access to, any Confidential Information without KBS’s prior written consent.  Further, the Dealer and each Representative shall ensure that any existing confidentiality notices included on or with the Confidential Information are included in any such disclosures or, if no such notices are included, “Confidential” or some similar notice is stamped on the Confidential Information.  The Dealer may, without KBS’s prior written consent, communicate Confidential Information to any other broker-dealer that has entered into a separately-negotiated confidentiality agreement with KBS, or that otherwise already has access to, or knowledge, of such Confidential Information; provided, that, such access or knowledge is not as a result of a breach or other violation of this Appendix A, or other confidentiality agreement with, or other obligation of secrecy to, KBS.  Any such Confidential Information disseminated to a broker-dealer pursuant to the immediately 

A-14

preceding sentence shall remain confidential notwithstanding any such communication to another broker-dealer.
(a)    For purposes of this Appendix A, the term “Dealer” shall also include any entity that controls, directly or indirectly, the Dealer, or any broker-dealer under common control of such Dealer.
(b)    For purposes of this Appendix A, the term “Representative” means any officer, director, manager, employee, owner, member, partner, representative, agent, consultant, due diligence provider, accountant, attorney or financial advisor of a party.
(c)    For purposes of this Appendix A, the term “affiliate” has the meaning ascribed such term under the Securities Exchange Act of 1934, as amended.
2.    Confidential Information.  For purposes hereof, “Confidential Information” means all information concerning the business, financial condition, operations, prospects, assets and liabilities of KBS that KBS believes is either confidential, proprietary or otherwise not generally available to the public, whether prepared by KBS, its advisors or otherwise (including information received by KBS from third parties under confidential conditions) and which is furnished to Dealer or any of its Representatives in writing, orally or by any other means in connection with the Offerings, and includes all analyses, notes, compilations, summaries, studies or other documents, records or data prepared by Dealer or its Representatives which contain, reflect or are generated from, such information.  However, Confidential Information shall not include information that: (A) is generally available to the public other than as a result of a disclosure by the Dealer or its Representatives in breach of this Appendix A; (B) is known to the Dealer or its Representatives prior to the date of the Selected Dealer Agreement; provided, that, such information is not known by the Dealer or its Representatives to be subject to another confidentiality agreement with, or other obligation of secrecy to KBS; (C) is independently disclosed to the Dealer or its Representatives by a third-party which the Dealer or its Representative reasonably believes has a bona fide right to do so without violating any obligation of confidentiality or (D) is developed by the Dealer or any of its Representatives completely independent of any information disclosed to the Dealer or any of its Representatives in connection with their due diligence review.  
3.    Legally Required Disclosures.  In the event that the Dealer or any of its Representatives is requested or required (by deposition, interrogatories, requests for information or documents in legal proceedings, subpoena, civil investigative demand or other similar process) by any court or governmental agency or authority or other supervisory body, or by application of law, regulation or legal or regulatory process to disclose any of the Confidential Information, the Dealer shall: (A) provide KBS with prompt written notice of any such request or requirement so that KBS may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Appendix A, (B) if the Dealer or any of its Representatives is required based upon the advice of their respective legal counsel, to disclose Confidential Information, the Dealer or such Representative may, without liability hereunder, disclose 

A-15

only that portion of the Confidential Information which such legal counsel advises is legally required to be disclosed; provided, that, the Dealer or such Representative exercises reasonable efforts to otherwise preserve the confidentiality of the Confidential Information and (C) upon reasonable notice, the Dealer and its Representatives will cooperate with KBS in obtaining a protective order or other appropriate remedy reasonably limiting disclosure to appropriate parties relating to the applicable proceeding; provided, that, the foregoing (i) shall not require the Dealer or its Representatives to delay production of any Confidential Information and (ii) shall apply only to the extent that KBS bears all costs and expenses of such cooperation, including, but not limited to, payment to the Dealer or its Representative, as applicable, for time expended by its staff relating to any such efforts at its then current billing rates and reimbursement of all reasonable attorney’s fees and costs of legal counsel associated therewith.  Neither the Dealer nor any of its Representatives is required to take any action pursuant to clause (C) of the immediately preceding sentence without reasonable assurances from KBS that such payment and reimbursement will be provided.
4.    Ownership of Confidential Information.  Confidential Information, including any copies, printouts and summaries thereof, shall remain the property of KBS and all applicable rights in patents, copyrights, trade secrets and similar intellectual property rights embodied in the Confidential Information shall remain in KBS.
5.    Return of Confidential Information.  Dealer agrees promptly upon KBS’s written request to return all written material, including copies or printouts and summaries thereof, and destroy all material held by Dealer or any of its Representatives in electronic form (including material on disks or tapes) containing Confidential Information, submitted to Dealer or its Representatives or prepared by Dealer or its Representatives based upon such Confidential Information.  Notwithstanding the return or destruction of Confidential Information, Dealer and its Representatives will continue to hold in confidence all Confidential Information and be bound by their respective obligations under the terms of this Appendix A.
6.    Remedies.  Each party agrees that the obligations hereunder are necessary and reasonable in order to protect KBS and its business, and expressly agrees that monetary damages would not be a sufficient remedy for any violation of the terms of this Appendix A and, accordingly, KBS shall be entitled to seek equitable relief, including, but not limited to, specific performance and injunctive relief as remedies for any violation, including, without limitation, the actual or threatened disclosure of Confidential Information without the prior written consent of KBS.  Such remedies shall not be deemed to be exclusive remedies for a violation of the terms of this Appendix A, but shall be in addition to all other remedies available to KBS at law or equity.  The Dealer agrees that neither it nor any of its Representatives will raise the defense of an adequate remedy at law in any action seeking equitable relief.  The Dealer shall indemnify and hold harmless KBS from and against all liabilities, obligations, claims, damages, penalties, causes of action costs and expenses (including reasonable attorneys’ fees and expenses actually incurred) imposed upon or incurred by or asserted against KBS by reason of a violation of the terms of this Appendix A by the Dealer or any of its Representatives.

A-16

7.    Waiver.  No delay or failure in exercising any rights hereunder shall be construed to be a waiver of such rights, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right hereunder.
8.    Governing Law.  THIS APPENDIX A SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.  EACH OF THE PARTIES HEREBY AGREE AND SUBMIT TO THE PERSONAL JURISDICTION OF THE STATE AND FEDERAL COURTS LOCATED WITHIN THE STATE OF CALIFORNIA FOR THE RESOLUTION OF ANY DISPUTE THAT MAY ARISE UNDER THIS APPENDIX A, AND THAT THE STATE AND FEDERAL COURTS LOCATED WITHIN THE STATE OF CALIFORNIA HAVE EXCLUSIVE JURISDICTION FOR ANY SUCH DISPUTES.
9.    Severability.  If for any reason any provision of this Appendix A shall be declared void or invalid, such declaration shall not affect the validity of the remainder of this Appendix A which shall remain in full force and effect as if executed with the void or invalid provision eliminated.
10.    Binding Agreement.  This Appendix A shall be binding upon, and shall inure to the benefit of KBS (including each of the entities included in the definition of “KBS” in the preamble to this Agreement including, without limitation, Legacy), the Dealer and their respective successors in interest.
11.    Non-Assignment.  This Appendix A, and the rights and obligations hereby created, may not be assigned by either KBS or the Dealer without the express written consent of the other party hereto, said consent not to be unreasonably withheld.
12.    Entire Agreement.  This Appendix A constitutes the entire agreement and supersedes and replaces any prior or existing agreement relating to treatment of Confidential Information relating to KBS and the Offerings.  
13.    Captions.  The captions contained in this Appendix A are for convenience only, form no part of this Appendix A and shall not in any manner amplify, limit, modify or otherwise affect the interpretation of this Appendix A.

A-17KBS Legacy Q1 2013 Exhibit 10.4

Exhibit 10.4

PURCHASE AND SALE AGREEMENT

by and between

FCP CRYSTAL PARK, LLC, 
a Maryland limited liability company,

as Seller

and

KBS-LEGACY APARTMENT COMMUNITY REIT VENTURE, LLC, 
a Delaware limited liability company,
as Purchaser

Property Name:  Crystal Park at Waterford Apartments 
Location:  Frederick, Maryland

Effective Date:  April 12, 2013

PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT (this “Agreement”) is made and entered into as of the 12th day of April, 2013, by and between FCP CRYSTAL PARK, LLC, a Maryland limited liability company (“Seller”), and KBS-LEGACY APARTMENT COMMUNITY REIT VENTURE, LLC, a Delaware limited liability company (“Purchaser”).    
RECITALS
A.Seller now desires to sell to Purchaser, and Purchaser desires to purchase from Seller, at the price and upon the terms and conditions set forth in this Agreement, (a) that certain parcel of land commonly known as Crystal Park at Waterford Apartments, located at 100 Alessandra Court, Frederick, Maryland, and more particularly described on Exhibit A attached hereto and made a part hereof (the “Land”), (b) the buildings, improvements, and structures located upon the Land (collectively, the “Improvements”), (c) all other easements and rights appurtenant to the Land and Improvements, if any (collectively, the “Appurtenant Rights”), (d) all right, title and interest of Seller in, to and under the Leases (as hereinafter defined) and, to the extent assignable, the Assumed Contracts (as hereinafter defined), (e) all right, title and interest of Seller, if any, in and to the furniture, tangible personal property, fixtures, equipment, machinery, apparatus, materials (including, but not limited to, all marketing materials for the apartment project located on the Land), appliances and equipment owned by Seller and currently used in the operation, repair and maintenance of the Land and Improvements and situated thereon (collectively, the “Personal Property”), and (f) to the extent assignable without consent or payment of any kind, all governmental permits, licenses and approvals, rights to use the name "Crystal Park at Waterford", the domain name “www.crystalparkapts.com”, plans and specifications, drawings, surveys, rights, warranties, guaranties, permits and licenses relating solely to the Property, together with all telephone listings and other items of intangible personal property relating solely to the Property and any warranties and guarantees that Seller has received in connection with any work or services performed with respect to, or equipment installed in, the Improvements (collectively, the “Intangible Property”; together with the Land, the Appurtenant Rights, the Improvements, the Leases, the Assumed Contracts, the Personal Property and the Intangible Property, collectively, the “Property”).
B.    Purchaser acknowledges that the Property is being sold on an “as is” “where is” and “with all faults” basis on the terms and conditions hereinafter set forth.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
1.Purchase and Sale.  Upon the terms and conditions hereinafter set forth, Seller shall sell to Purchaser, and Purchaser shall purchase from Seller, the Property.
2.    Purchase Price.  The purchase price (the “Purchase Price”) for the Property shall be the sum of Forty-Five Million Two Hundred Thousand and 00/100 Dollars ($45,200,000.00), subject to adjustments and prorations set forth herein.

2

3.    Payment of Purchase Price.  The Purchase Price shall be paid to Seller by Purchaser as follows:
3.1    Initial Deposit.  Within three (3) Business Days (as hereinafter defined) after the date this Agreement is executed by Seller and Purchaser, Purchaser shall deposit with James D. Fisher of Continental Title Group, 1500 Whetstone Way, Suite T-100, Baltimore, MD 21230 (“Escrowee”), by wire transfer of immediately available federal funds to an account designated by Escrowee (the “Escrow Account”), the sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (together with all interest thereon, but excluding the Independent Consideration (as hereinafter defined), the “Initial Deposit”), which Initial Deposit shall be held by Escrowee pursuant to the escrow agreement (the “Escrow Agreement”) attached hereto as Exhibit B and hereby made a part hereof.  If Purchaser shall fail to deposit the Initial Deposit with Escrowee within three (3) Business Days after the date this Agreement is executed and delivered by Seller and Purchaser, at Seller’s election, this Agreement shall be null and void ab initio and of no force or effect.
3.2    Additional Deposit.  Prior to the expiration of the Due Diligence Period (as hereinafter defined), Purchaser shall deposit with Escrowee, by wire transfer of immediately available federal funds to the Escrow Account, the additional sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) (together with all interest thereon, the “Additional Deposit”; and together with the Initial Deposit (less the Independent Consideration), collectively, the “Deposit”), which Additional Deposit shall be held by Escrowee in accordance with the terms and conditions of the Escrow Agreement.  If, prior to the expiration of the Due Diligence Period, Purchaser has not delivered both a Continuation Notice (as hereinafter defined) to Seller and the Additional Deposit to Escrowee, this Agreement shall be automatically deemed terminated, Escrowee shall return the Initial Deposit to Purchaser and Seller and Purchaser shall be released from further obligation or liability hereunder (except for those obligations and liabilities which, pursuant to the terms of this Agreement, expressly survive such termination).
3.3    Independent Consideration.  A portion of the amount deposited by Purchaser pursuant to Section 3.1, in the amount of One Hundred Dollars ($100) (the “Independent Consideration”) shall be earned by Seller upon execution and delivery of this Agreement by Seller and Purchaser.  Seller and Purchaser hereby mutually acknowledge and agree that the Independent Consideration represents adequate bargained for consideration for Seller’s execution and delivery of this Agreement and Purchaser’s right to have inspected the Property pursuant to the terms of this Agreement.  The Independent Consideration is in addition to and independent of any other consideration or payment provided for in this Agreement and is nonrefundable in all events.  The Independent Consideration shall be credited against the Purchase Price at Closing, or, if this Agreement is terminated pursuant to the terms hereof, the Independent Consideration shall be paid to Seller.
3.4    Closing Payment.  The Purchase Price, as adjusted by the application of the Deposit, and the prorations and credits specified herein, shall be paid by Purchaser, by wire transfer of immediately available federal funds to an account or accounts designated in writing by Seller on the Closing Date (as hereinafter defined) (the amount being paid under this Section 3.3 being herein called the “Closing Payment”).

3

4.    Title Matters; Due Diligence Review; Conditions Precedent.  
4.1    Title Matters.
4.1.1    Title to the Property.
(a)    Purchaser shall order, at its sole cost and expense, within five (5) days following the date hereof, (i) a commitment for an owner’s fee title insurance policy or policies with respect to the Property (the “Title Commitment”) from Chicago Title Insurance Company (the “Title Company”), and (ii) a survey of the Property prepared by a surveyor registered in the State of Maryland, certified by said surveyor to Purchaser and Seller as having been prepared in accordance with the minimum detail requirements of the ALTA land survey requirements (the “Survey”), and shall cause the Title Commitment, together with true, legible and complete copies of all instruments giving rise to any defects or exceptions to title to the Property, and the Survey to be delivered to Seller’s attorneys concurrently with the delivery thereof to Purchaser or Purchaser’s attorneys.  If any exceptions(s) to title to the Property should appear in the Title Commitment other than the Permitted Exceptions (as hereafter defined), subject to which Purchaser is unwilling to accept title (such exception(s) being herein called, collectively, the “Unpermitted Exceptions”), and Purchaser shall provide Seller with written notice (the “Title Objection Notice”) thereof within twenty (20) days after the date of this Agreement, then Seller, in its sole and absolute discretion, may endeavor to eliminate the same, subject to the terms and conditions of this Section 4.1.  Purchaser hereby waives any right Purchaser may have to advance, as objections to title or as grounds for Purchaser’s refusal to close this transaction, any Unpermitted Exception of which Purchaser does not notify Seller within such twenty (20) day period unless (i) such Unpermitted Exception was first created or reported subsequent to the date of the Title Commitment, and (ii) Purchaser shall notify Seller of the same within five (5) days after the date that the Title Company notifies Purchaser of such Unpermitted Exception (failure to so notify Seller shall be deemed to be a waiver by Purchaser of its right to raise such Unpermitted Exception as an objection to title or as a ground for Purchaser’s refusal to close the transaction contemplated by this Agreement).  Notwithstanding anything to the contrary contained in this Agreement, Seller, in its sole discretion, shall have the right to adjourn the Closing for a period not to exceed thirty (30) days (such period of time being herein called the “Extension Period”) in order to attempt to remove an Unpermitted Exception, provided that Seller shall notify Purchaser, in writing, within five (5) Business Days after receipt by Seller of the Title Objection Notice, whether or not it will endeavor to eliminate such Unpermitted Exceptions.  The failure of Seller to deliver such notification to Purchaser shall be conclusively deemed to be an election by Seller not to endeavor to eliminate any Unpermitted Exceptions other than Required Removal Items (as defined below).  Notwithstanding the foregoing or anything to the contrary set forth in this Agreement, Seller shall not, under any circumstance, be required or obligated to cause the cure or removal of any Unpermitted Exception including, without limitation, to bring any action or proceeding, to make any payments or otherwise to incur any expense in order to eliminate any Unpermitted Exception or to arrange for title insurance insuring against enforcement of such Unpermitted Exception against, or collection of the same out of, the Property, unless Seller notified Purchaser that it would endeavor to do so; provided, however, Seller shall satisfy, as a condition of Closing, and cause the release of, any mortgage, deed of trust or other lien intentionally placed on the Property by Seller or suffered by Seller (collectively, the “Required Removal Items”).   

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(b)    In the event that Seller is unable, or elects not, to eliminate all Unpermitted Exceptions in accordance with the provisions of this Section 4.1.1, or to arrange for title insurance in form reasonably acceptable to Purchaser, without special premium to Purchaser, insuring against enforcement of such Unpermitted Exceptions against, or collection of the same out of, the Property, and to convey title to the Property in accordance with the terms of this Agreement on or before the Closing Date (whether or not the Closing is adjourned as provided in Section 4.1.1(a)), Purchaser shall have the right, as its sole remedy for such inability or election of Seller, by delivery of written notice to Seller within three (3) Business Days following receipt of notice from Seller of its election (or within three (3) Business Days following its deemed election) not to, or of its inability to, remove such Unpermitted Exceptions, to either (i) terminate this Agreement, in which event Escrowee shall, provided that Purchaser is not otherwise in default of its obligations pursuant to this Agreement, return the Deposit to Purchaser and no party hereto shall have any further obligations in connection herewith except under those provisions that expressly survive the Closing or a termination of this Agreement, or (ii) accept title to the Property subject to such Unpermitted Exception(s) without a reduction in, abatement of, or credit against, the Purchase Price.  The failure of Purchaser to deliver timely any written notice of election under this Section 4.1.1(b) shall be conclusively deemed to be an election under clause (ii) above.
(c)    If, on the Closing Date, there are any Required Removal Items or other liens or encumbrances that Seller is obligated to discharge under this Agreement, Seller shall have the right (but not the obligation) to either (i) arrange, at Seller’s cost and expense, for affirmative title insurance or special endorsement (as applicable, in a form reasonably acceptable to Purchaser and/or the Title Company) insuring against enforcement of such liens or encumbrances against, or collection of the same out of, the Property, or (ii) use any portion of the Purchase Price to pay and discharge the same, either by way of payment or by alternative manner reasonably satisfactory to the Title Company.
4.1.2    Permitted Exceptions to Title.  The Property shall be sold and conveyed subject to the following exceptions to title (collectively, the “Permitted Exceptions”):
(a)    all laws, ordinances, rules and regulations of the United States, the State of Maryland, or any agency, department, commission, bureau or instrumentality of any of the foregoing having jurisdiction over the Property (each, a “Governmental Authority”), as the same may now exist or may be hereafter modified, supplemented or promulgated;
(b)    all presently existing and future liens of real estate taxes or assessments and water rates, water meter charges, water frontage charges and sewer taxes, rents and charges, if any, provided that such items are not yet due and payable and are apportioned as provided in this Agreement; 
(c)    any other matter or thing affecting title to the Property that Purchaser shall be deemed to have agreed to or otherwise waived as an Unpermitted Exception in accordance with the terms of this Agreement; and
(d)    all utility easements of record which do not interfere with the present use of the Property.

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4.2    Due Diligence Reviews.  Except for title and survey matters (which shall be governed by the provisions of Section 4.1 above), Purchaser shall have until 5:00 p.m. (Eastern time) on April 19, 2013, TIME BEING OF THE ESSENCE (such period being herein called the “Due Diligence Period”) to perform and complete all of Purchaser’s due diligence examinations, reviews and inspections of all matters pertaining to the purchase of the Property, including all Leases and Service Contracts, and all physical, environmental and compliance matters and conditions respecting the Property (collectively, the “Investigations”), which Investigations shall at all times be subject to Purchaser’s compliance with the provisions of this Section 4.2.  During the Due Diligence Period, Seller shall provide Purchaser with reasonable access to the Property during normal business hours upon no less than forty-eight (48) hours’ advance notice and shall also make available to Purchaser, at the offices of Seller and/or the property manager of the Property during normal business hours, access to Leases, Service Contracts, and other materials, contracts and agreements with respect to the Property in Seller’s or Seller’s property manager’s possession as Purchaser shall reasonably request, including, but not limited to, those items listed on Exhibit L attached hereto to the extent in Seller’s possession or control, all upon no less than forty-eight (48) hours’ advance written notice; provided, however, in no event shall Seller be obligated to make available (1) any document or correspondence which would be subject to the attorney-client privilege; (2) any document or item which Seller is contractually or otherwise bound to keep confidential; (3) any documents pertaining to the marketing of the Property for sale to prospective purchasers; (4) any of Seller's internal memoranda, internal reports or internal assessments relating to the Property not specified on Exhibit L; (5)appraisals of the Property whether prepared internally by Seller or Seller's affiliates or externally; or (5) any documents which Seller reasonably considers confidential or proprietary.  Purchaser has informed Seller that Purchaser is required by law to complete, with respect to certain matters relating to the Property, an audit commonly known as a "3-14" Audit (“Purchaser's 3-14 Audit”) and Seller shall provide the documents and information specified herein and set forth on Exhibit L in connection with Purchaser’s 3-14 Audit.  Any entry upon the Property and all Investigations shall be made or performed during Seller’s normal business hours and at the sole risk and expense of Purchaser, and shall not interfere with the activities on or about the Property of Seller, its tenants and their employees and invitees. Purchaser shall:
(a)    promptly repair any damage to the Property resulting from any such Investigations and replace, refill and regrade any holes made in, or excavations of, any portion of the Property used for such Investigations, so that the Property shall be in the same condition that it existed in prior to Purchaser’s commencement of its Investigations;
(b)    fully comply with all laws applicable to the Investigations and all other activities undertaken in connection therewith;
(c)    permit Seller to have a representative present during all Investigations undertaken hereunder;
(d)    take all actions and implement all protections reasonably necessary to ensure that the Investigations and the equipment, materials, and substances generated, used or brought onto the Property in connection with the Investigations, pose no foreseeable threat to the safety or health of persons or the environment, and cause no damage to the Property or other property of Seller, its tenants or any other persons which cannot be repaired;

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(e)    upon termination of this Agreement prior to the Closing, promptly upon receipt of written request from Seller, furnish to Seller, at no cost or expense to Seller, copies of all surveys, soil test results, engineering, asbestos, environmental and other studies and reports (other than internal analysis and proprietary information of the Purchaser) relating to the Investigations which Purchaser shall obtain with respect to the Property;
(f)    maintain or cause to be maintained, at Purchaser’s expense, a policy of commercial general liability insurance, with a broad form contractual liability endorsement and with a combined single limit of not less than $1,000,000 per occurrence for bodily injury and property damage, automobile liability coverage including owned and hired vehicles with a combined single limit of $1,000,000 per occurrence for bodily injury and property damage, and an excess umbrella liability policy for bodily injury and property damage in the amount of $5,000,000, insuring Purchaser, Seller, FCP Fund I Trust and FCP Fund I, L.P. as additional insureds, against any injuries or damages to persons or property that may result from or are related to (i) Purchaser’s and/or Purchaser’s Representatives’ (as hereinafter defined) entry upon the Property, (ii) any Investigations or other activities conducted thereon, and/or (iii) any and all other activities undertaken by Purchaser and/or Purchaser’s Representatives, all of which insurance shall be on an “occurrence form” and otherwise in such forms acceptable to Seller and with an insurance company acceptable to Seller, and deliver a copy of a certificate evidencing such insurance policy to Seller prior to the first entry on the Property;
(g)    not permit the Investigations or any other activities undertaken by Purchaser or Purchaser’s Representatives to result in any liens, judgments or other encumbrances being filed or recorded against the Property, and Purchaser shall, at its sole cost and expense, immediately discharge of record any such liens or encumbrances that are so filed or recorded (including, without limitation, liens for services, labor or materials furnished); and
(h)    indemnify Seller and any agent, advisor, representative, affiliate, employee, director, partner, member, beneficiary, investor, shareholder, trustee or other person or entity acting on Seller’s behalf or otherwise related to or affiliated with Seller (each, a “Seller Related Party,” and collectively, the “Seller Related Parties”) and hold harmless Seller and the Seller Related Parties from and against any and all claims, demands, causes of action, losses, damages, liabilities, costs and expenses (including, without limitation, attorneys’ fees and disbursements), suffered or incurred by Seller or any Seller Related Party and to the extent arising out of or in connection with (i) Purchaser’s and/or Purchaser’s Representatives’ entry upon the Property, (ii) any Investigations or other activities conducted thereon by Purchaser or Purchaser’s Representatives, (iii) any liens or encumbrances filed or recorded against the Property as a consequence of the Investigations, and/or (iv) any and all other activities undertaken by Purchaser or Purchaser’s Representatives with respect to the Property.  Notwithstanding the foregoing, Purchaser shall have no obligation to indemnify or hold harmless Seller or any Seller Related Party from any claims, demands, causes of action, losses, damages, liabilities, costs or expenses (including, without limitation, attorneys’ fees and disbursements) to the extent arising out of (A) the negligence or willful misconduct of Seller or any Seller Related Parties, or (B) any pre-existing conditions of the Property (but excluding any further aggravation thereof by Purchaser and/or any Purchaser’s Representatives following their discovery thereof) or (C) the mere discovery, by Purchaser or Purchaser's Representatives, of existing conditions on the Property during Investigations conducted pursuant to, and in accordance with, the terms of 

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this Agreement.  Notwithstanding anything to the contrary contained in this Agreement, Purchaser shall not in any event be liable for speculative, special, consequential, or punitive damages under this Agreement.  
Without limiting the foregoing, in no event shall Purchaser or Purchaser’s Representatives, without the prior written consent of Seller, which may be granted or withheld in Seller’s sole discretion:  (x) make any intrusive physical testing (environmental, structural or otherwise) at the Property (such as soil borings, water samplings or the like), or (y) contact or correspond with any tenant of the Property.  
The foregoing obligations of Purchaser under Section (a), (e), and (g) of this Section 4.2 shall survive the termination of this Agreement and the foregoing obligations of Purchaser under Section (b) and (h) of this Section 4.2 shall survive Closing.
4.2.1    Property Information and Confidentiality.  All Information (as hereinafter defined) provided to or obtained by Purchaser shall be subject to the following terms and conditions:
(a)    Any information provided or to be provided with respect to the Property is solely for Purchaser’s convenience and was or will be obtained from a variety of sources.  Neither Seller nor any Seller Related Party has made any independent investigation or verification of such information and, other than as expressly set forth in Section 7.1 of this Agreement, makes no (and expressly disclaims all) representations and warranties as to the truth, accuracy or completeness of the Information, or any other studies, documents, reports or other information provided to Purchaser hereunder and expressly disclaims any implied representations as to any matter disclosed or omitted.  Neither Seller nor any Seller Related Party shall be liable for any mistakes, omissions, misrepresentations or any failure to investigate the Property nor shall Seller or any Seller Related Party be bound in any manner by any verbal or written statements, representations, appraisals, environmental assessment reports, or other information pertaining to the Property or the operation thereof, except as expressly set forth in this Agreement.
(b)    Purchaser agrees that neither Purchaser nor Purchaser’s Representatives shall, at any time prior to the Closing or in any manner, either directly or indirectly, divulge, disclose or communicate to any person, entity, association or governmental authority any of the Information, or any other knowledge or information acquired by Purchaser or Purchaser’s Representatives from Seller, any Seller Related Party or by Purchaser’s own inspections and investigations of the Property, other than matters that were in the public domain at the time of receipt or discovery by Purchaser or Purchaser’s Representatives and as otherwise set forth below.  Prior to the Closing, without Seller’s prior written consent, Purchaser shall not disclose and Purchaser shall direct Purchaser’s Representatives not to disclose to any person, entity, association or governmental authority any of the terms, conditions or other facts with respect to this Agreement, including, without limitation, the status hereof, and Purchaser shall not market or offer the Property for sale.  Notwithstanding the foregoing, Purchaser may prior to the Closing disclose such of the Information, knowledge and other information, reports, studies, documents and other matters generated by Purchaser and the terms of this Agreement (i) as required by governmental regulation, law or court order (provided prior written notice of such 

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disclosure shall be provided to Seller), (ii) as Purchaser deems necessary or desirable to Purchaser’s Representatives in connection with Purchaser’s Investigation and the transaction contemplated hereby, provided that those to whom such Information is disclosed are informed of the confidential nature thereof and agree(s) to keep the same confidential in accordance with the terms and conditions hereof, and (iii) to Seller and the Seller Related Parties. Further notwithstanding the foregoing, nothing contained herein shall impair Purchaser's right to disclose information relating to this Agreement or the Property (a) to any due diligence representatives and/or consultants that are engaged by, work for or are acting on behalf of, any securities dealers and/or broker dealers evaluating Purchaser or its permitted assignees, (b) in connection with any filings (including any amendment or supplement to any Form S-11 Registration Filing) with governmental agencies (including the Securities  and Exchange Commission (the “SEC”)) by any real estate investment trust ("REIT") holding an interest (direct or indirect) in Purchaser or in any permitted assignee of Purchaser, and (c) to any broker/dealers in the REIT's broker/dealer network and any of the REIT's investors.  
(c)    Purchaser shall indemnify and hold harmless Seller and all Seller Related Parties from and against any and all claims, demands, causes of action, losses, damages, liabilities, costs and expenses (including, without limitation, attorneys’ fees and disbursements) suffered or incurred by Seller or any Seller Related Party and arising out of or in connection with a breach by Purchaser or Purchaser’s Representatives of the provisions of this Section 4.2.1.  Notwithstanding anything to the contrary contained in this Agreement, Purchaser shall not in any event be liable for speculative, special, consequential, or punitive damages under this Agreement.  
(d)    If this Agreement is terminated, Purchaser and Purchaser’s Representatives shall promptly deliver to Seller upon Seller’s request all originals of the Information in the possession of Purchaser and Purchaser’s Representatives.
(e)    As used in this Agreement, the term “Information” shall mean any of the following: (i) all information and documents in any way relating to the Property, the operation thereof or the sale thereof, including, without limitation, all leases and contracts furnished to, or otherwise made available for review by, Purchaser or its directors, officers, employees, affiliates, partners, members, managers, appraisers, investors, lenders, brokers, agents or other representatives, including, without limitation, attorneys, accountants, contractors, consultants, engineers, and advisors (collectively, “Purchaser’s Representatives”), by Seller or any Seller Related Party or their agents or representatives, including, without limitation, their contractors, engineers, attorneys, accountants, consultants, brokers or advisors, and (ii) all analyses, compilations, data, studies, reports or other information or documents prepared or obtained by Purchaser or Purchaser’s Representatives containing or based on, in whole or in part, the information or documents described in the preceding clause (i), the Investigations, or otherwise reflecting their review or investigation of the Property.
(f)    In addition to any other remedies available to Seller, Seller shall have the right to seek equitable relief, including, without limitation, injunctive relief or specific performance, against Purchaser or Purchaser’s Representatives in order to enforce the provisions of this Section 4.2.1.  

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(g)    The provisions of this Section 4.2.1 shall not survive the Closing but shall survive a termination of this Agreement in the event a Closing fails to occur, as the case may be.  
(h)    Notwithstanding anything contained herein to the contrary, Purchaser shall not disclose the terms of this Agreement (except for those that are matters of public record at Closing) to any parties not expressly permitted by Section 4.2.1(b) hereof before or after Closing.  The provisions of this Section 4.2.1(b) shall survive Closing.
4.2.2    Termination Right.  If, based upon the Investigations and/or the Information, Purchaser shall determine that it intends to proceed with the acquisition of the Property, then Purchaser shall, on or before 5:00 p.m. (Eastern time) on or prior to the date that the Due Diligence Period shall expire, TIME BEING OF THE ESSENCE, both (i) promptly notify Seller of such determination in writing (such notice being herein called the “Continuation Notice”) and (ii) deliver the Additional Deposit to Escrowee.  By so notifying Seller of its intention to proceed with the acquisition of the Property, Purchaser shall be deemed to have agreed that the Property is acceptable to Purchaser and that it intends to proceed with the acquisition of the Property without a reduction in, or an abatement of or credit against, the Purchase Price (and, thereafter, Purchaser shall have no further right to terminate this Agreement pursuant to this Section 4.2.2.).  In the event that Purchaser shall fail to deliver the Continuation Notice to Seller or the Additional Deposit to Escrowee on or before 5:00 p.m. (Eastern time) on the date that the Due Diligence Period shall expire, TIME BEING OF THE ESSENCE, then Purchaser shall be deemed to have determined that it no longer intends to acquire the Property, whereupon the Initial Deposit shall be promptly returned to Purchaser, and this Agreement and the obligations of the parties hereunder shall terminate (and no party hereto shall have any further obligations in connection herewith except under those provisions that expressly survive a termination of this Agreement).
4.2.3    Delivery of Post-Closing Records Seller agrees, at no cost to Seller, to deliver the following to Purchaser within forty-five (45) days after Closing in connection with Purchaser's 3-14 Audit to the extent not previously provided to Purchaser: i) detailed income statement for the Property for 2013 from January 1, 2013 through the Closing Date, ii) trial balance for 2013 from January 1, 2013 through the Closing Date, and iii) general ledger for 2013 from January 1, 2013 through the Closing Date.  The provisions of this Section 4.1.4 shall survive the Closing and not be merged therein.    4.3    Contracts.  Seller shall terminate at Closing all contracts and agreements relating to the management, brokerage, leasing, maintenance services or operation of the Property (the “Contracts”) unless (i) Purchaser elects to continue the same by written notice to Seller given prior to the expiration of the Due Diligence Period or (ii) if any of the Contracts cannot be terminated under their terms within the aforesaid time period, then Seller shall provide notice of any such non-terminable Contracts to Purchaser on or before the expiration of the Due Diligence Period, and Purchaser shall be required to assume such Contracts at Closing (such Contracts under (i) and (ii) shall be collectively referenced herein as the "Assumed Contracts").  Seller shall be responsible for all fees payable under Assumed Contracts through the Closing Date, and Purchaser shall be responsible for all fees payable under Assumed Contracts after the Closing Date until such Assumed Contracts are terminated.

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4.4    Conditions Precedent to Obligations of Purchaser.  The obligation of Purchaser to consummate the transactions contemplated by this Agreement shall be subject to the performance and observance, in all material respects, by Seller of all covenants, warranties and agreements of this Agreement to be performed or observed by Seller prior to or on the Closing Date, all representations and warranties made by Seller in this Agreement being true and correct in all material respects on the Closing Date and the fulfillment on or before the Closing Date of all other conditions precedent to Closing benefiting Purchaser specifically enumerated in this Agreement, any or all of which may be waived by Purchaser in its sole discretion.   A failure of the foregoing shall be deemed a default by Seller and Purchaser shall be entitled to the remedies set forth in Section 9.1. 
4.5    Conditions Precedent to Obligations of Seller.  The obligation of Seller to consummate the transactions contemplated by this Agreement shall be subject to the performance and observance, in all material respects, by Purchaser of all covenants and agreements of this Agreement to be performed or observed by Purchaser prior to or on the Closing Date (provided that Purchaser shall have delivered the full amount of the Closing Payment) and the fulfillment on or before the Closing Date of all other conditions precedent to Closing benefiting Seller specifically set forth in this Agreement, any or all of which may be waived by Seller in its sole discretion.
5.    Closing.  The closing of the sale and purchase contemplated herein (the “Closing”) shall occur no later than 2:00 p.m. on the date that is fifteen (15) days following the date that the Due Diligence Period shall expire (the “Scheduled Closing Date”), TIME BEING OF THE ESSENCE with respect to Purchaser’s obligation to close on such date.  Closing shall occur through escrow and pursuant to escrow instructions consistent with the terms of this Agreement and otherwise mutually satisfactory to Seller and Purchaser (the date on which the Closing shall ultimately occur being herein referred to as the “Closing Date”).  If the Closing Date is not a Business Day, then the Closing shall automatically be adjourned to the first Business Day after such day.  The Closing shall constitute approval by each party of all matters to which such party has a right of approval and a waiver of all conditions precedent.  
5.1    Seller Deliveries.  At the Closing, Seller shall deliver or cause to be delivered to Purchaser or to the Escrowee, as the case may be, the following items executed and acknowledged by Seller, as appropriate:
(a)    a deed (the “Deed”) in the form attached hereto and made a part hereof as Exhibit C subject only to the Permitted Exceptions.
(b)    an assignment and assumption of leases (the “Assignment and Assumption of Leases”), in the form attached hereto and made a part hereof as Exhibit D.
(c)    a bill of sale and general assignment (the “Bill of Sale”) in the form attached hereto and made a part hereof as Exhibit E. 
(d)    a certification of non-foreign status in the form attached hereto and made a part hereof as Exhibit F.

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(e)    an assignment and assumption of contracts (the “Assignment and Assumption of Contracts”), in the form attached hereto and made a part hereof as Exhibit G.
(f)    all existing surveys, blueprints, drawings, plans and specifications for or with respect to the Property or any part thereof, to the extent the same are in Seller’s possession.
(g)    all keys to the Improvements, to the extent the same are in Seller’s possession.
(h)    all Leases in effect on the Closing Date.
(i)    all Contracts that shall remain in effect after the Closing (all items in clauses (f) through (i) may be either delivered at Closing or left at the management office at the Property, to the extent not previously delivered to Purchaser).
(j)    all applicable transfer tax forms, if any.
(k)    such further instruments as may be reasonably required by the Title Company to consummate the transactions contemplated hereby and in connection with issuance of an ALTA Owner's Policy of Title Insurance covering the Property subject only to the Permitted Exceptions in the amount of the Purchase Price (the "Owner's Policy").
(l)    a generic notice to the tenants under the Leases (each, a “Tenant Notice”, and collectively, the “Tenant Notices”) in the form attached hereto and made a part hereof as Exhibit H, advising such tenants of the sale of the Property to Purchaser and directing them to make all payments to Purchaser or its designee, which Tenant Notices Purchaser shall, at Purchaser’s sole cost and expense, deliver to each applicable tenant upon consummation of Closing.
(m)    evidence reasonably satisfactory to Purchaser and the Title Company respecting the due organization of Seller and the due authorization and execution by Seller of this Agreement and the documents required to be delivered hereunder.
(n)    a Real Estate Transfer Disclosure Statement signed by Seller in the form attached hereto as Exhibit M.
5.2    Purchaser Deliveries.  At the Closing, Purchaser shall deliver or cause to be delivered to Seller or to the Escrowee, as the case may be, the following items executed and acknowledged by Purchaser, as appropriate:
(a)    payment of the Closing Payment to be made in accordance with Section 3 above. 
(b)    the Assignment and Assumption of Leases.
(c)    the Assignment and Assumption of Contracts.

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(d)    all applicable transfer tax forms, if any.
(e)    such further instruments as may be reasonably required by the Title Company or governmental authorities to consummate the transactions contemplated hereby.
(f)    evidence reasonably satisfactory to Seller and the Title Company respecting the due organization of Purchaser and the due authorization and execution by Purchaser of this Agreement and the documents required to be delivered hereunder.
(g)    a Real Estate Transfer Disclosure Statement signed by Purchaser in the form attached hereto as Exhibit M. 
(h)    a City of Frederick Disclosure Statement signed by Purchaser in the form attached hereto as Exhibit N.
5.3    Closing Costs.  Seller shall pay (a) one-half (1/2) of all applicable state and local transfer and recordation taxes payable in connection with the recording of the Deed, and (b) its federal and state income, franchise, personal property sales taxes, bulk sales taxes and similar taxes applicable to the transaction contemplated herein.  Purchaser shall pay (a) the title insurance premium for the Owner’s Policy, (b) the cost of any title endorsements and affirmative insurance required by Purchaser, (c) the costs of the Survey (or an update thereto), (d) all recording charges payable in connection with the recording of the Deed, (e) one-half (1/2) of all applicable state and local transfer and recordation taxes payable in connection with recording the Deed, (f) all escrow charges of the Escrowee, and (g) all fees, costs or expenses in connection with Purchaser’s due diligence reviews hereunder.  Any other closing costs shall be allocated in accordance with local custom.  Except as expressly provided in the indemnities set forth in this Agreement, Seller and Purchaser shall pay their respective legal, consulting and other professional fees and expenses incurred in connection with this Agreement and the transaction contemplated hereby and their respective shares of prorations as hereinafter provided.  The provisions of this Section 5.3 shall survive the Closing or a termination of this Agreement, as the case may be.
5.4    Prorations.
5.4.1    The following shall be prorated between Seller and Purchaser as of 12:01 a.m. on the Closing Date (on the basis of the actual number of days elapsed over the applicable period):
(a)    All real estate taxes, water charges, sewer rents, vault charges and assessments on the Property on the basis of the fiscal year for which assessed.  In no event shall Seller be charged with or be responsible for any increase in the taxes on the Property resulting from the sale of the Property or from any improvements made or leases entered into on or after the Closing Date.  If any assessments on the Property are payable in installments, then the installment for the current period shall be prorated (with Purchaser assuming the obligation to pay any installments due after the Closing Date).  

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(b)    Subject to this Section 5.4.1(b), all fixed rent and regularly scheduled items of additional rent under the Leases, and other tenant charges actually received.  Seller shall deliver or provide a credit in an amount equal to all prepaid rentals for periods after the Closing Date and all refundable security deposits (to the extent the foregoing were made by tenants under the Leases and are not applied or forfeited prior to the Closing Date in accordance with the terms of the respective Leases) to Purchaser on the Closing Date.  Seller shall deliver to Purchaser at Closing any tenant security deposits which are held in the form of letters of credit.  Rents which are delinquent as of the Closing Date shall not be prorated on the Closing Date.  Purchaser shall include such delinquencies in its normal billing and shall diligently pursue the collection thereof in good faith after the Closing Date (but Purchaser shall not be required to litigate or declare a default in any Lease).  To the extent Purchaser receives rents on or after the Closing Date, such payments shall be applied first toward the rents for the month in which the Closing occurs (and prorated between Purchaser and Seller accordingly), second, to the rents that shall then be due and payable to Purchaser for the period of time following the month in which Closing occurs, and third to any unpaid rents owed to Seller for the period of time prior to the month in which Closing occurs, with Seller’s share thereof being held by Purchaser in trust for Seller and promptly delivered to Seller by Purchaser.  Purchaser may not waive any delinquent rents or modify a Lease so as to reduce or otherwise affect amounts owed thereunder for any period in which Seller is entitled to receive a share of charges or amounts without first obtaining Seller’s written consent, which consent may be given or withheld in Seller’s sole and absolute discretion.  Seller hereby reserves the right to pursue any remedy against any tenant owing delinquent rents and any other amounts to Seller (but shall not be entitled to seek to terminate any lease or any tenant’s right to possession), which right shall include the right to continue or commence legal actions or proceedings against any tenant.  Delivery of the Assignment and Assumption of Leases shall not constitute a waiver by Seller of such right, and such right shall survive the Closing.  Purchaser shall reasonably cooperate with Seller in any collection efforts hereunder (but shall not be required to litigate or declare a default under any Lease).  With respect to delinquent rents and any other amounts or other rights of any kind respecting tenants who are no longer tenants of the Property as of the Closing Date, Seller shall retain all rights relating thereto.
(c)    All income and operating expenses customarily apportioned between sellers and purchasers of real estate properties similar to the Property and located in the same geographic area as the Property.
(d)    Charges and payments under Assumed Contracts or permitted renewals or replacements thereof assigned to Purchaser pursuant to the Assignment and Assumption of Contracts.
(e)    Any fees or licenses prepaid by Seller for which Purchaser will receive credit or benefit following Closing, including, without limitation, fees for licenses which are transferred to Purchaser at the Closing and annual permit and inspection fees.
(f)    Utilities, including, without limitation, telephone, steam, electricity and gas, on the basis of the most recently issued bills therefor, subject to adjustment after the Closing when the next bills are available, or if current meter readings are available, on the basis of such readings.

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(g)    Deposits with telephone and other utility companies, and any other persons or entities who supply goods or services in connection with the Property if the same are assigned to Purchaser at the Closing, which shall be credited in their entirety to Seller.
(h)    Intentionally Deleted.
(i)    Intentionally Deleted.
(j)    Intentionally Deleted.
5.4.2    Reserved.
5.4.3    If any of the items described in Section 5.4.1 hereof cannot be apportioned at the Closing because of the unavailability of information as to the amounts which are to be apportioned or otherwise, or are incorrectly apportioned at Closing or subsequent thereto, such items shall be apportioned or reapportioned, as the case may be, as soon as practicable after the Closing Date or the date such error is discovered, as applicable; provided that neither party shall have the right to request apportionment or reapportionment of any such item at any time following the one hundred eightieth (180th) day after the Closing Date.  If the Closing shall occur before a real estate or personal property tax rate or assessment is fixed for the tax year in which the Closing occurs, the apportionment of taxes at the Closing shall be upon the basis of the tax rate or assessment for the preceding fiscal year applied to the latest assessed valuation.  Promptly after the new tax rate or assessment is fixed, the apportionment of taxes or assessments shall be recomputed and any discrepancy resulting from such recomputation and any errors or omissions in computing apportionments at Closing shall be promptly corrected and the proper party reimbursed, which obligations shall survive the Closing.
5.4.4    The provisions of this Section 5.4 shall survive the Closing.
6.    Condemnation or Destruction of Property.  In the event that, after the date hereof but prior to the Closing Date, either any portion of the Property is taken, or under threat of being taken, pursuant to eminent domain proceedings or condemnation or any of the improvements on the Property are damaged or destroyed by fire or other casualty, Seller shall have no obligation to restore, repair or replace any portion of the Property or any such damage or destruction.  Seller shall, at the Closing, assign to Purchaser all of Seller’s interest in all awards or other proceeds for such taking by eminent domain or condemnation or the proceeds of any insurance collected by Seller for such damage or destruction (unless Seller shall have repaired such damage or destruction prior to the Closing and except to the extent any such awards, proceeds or insurance are attributable to lost rents or items applicable to any period prior to the Closing), less the amount of all costs incurred by Seller in connection with the repair of such damage or destruction or collection costs of Seller respecting any awards or other proceeds for such taking by eminent domain or condemnation or any uncollected insurance proceeds which Seller may be entitled to receive from such damage or destruction, as applicable.  In connection with any assignment of awards, proceeds or insurance hereunder, in addition Seller shall credit Purchaser with i) an amount equal to the applicable deductible amount under Seller’s insurance (but not more than the amount by which the cost, as of the Closing Date, to repair the damage is greater than the amount of insurance proceeds assigned to Purchaser), plus ii) in the event there is 

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uninsured damage, an amount equal to the cost to repair the uninsured damage which when added to the amount of the assigned insurance proceeds, if any, equals not more than $650,000; provided, however, if the amount of the damage (as determined by an independent third party contractor or engineer selected by Seller and reasonably approved by Purchaser) or the amount of condemnation award shall exceed $650,000, Purchaser shall have the right to terminate this Agreement by notice to Seller given within ten (10) days after notification to Purchaser of the estimated amount of damages or the determination of the amount of any condemnation award.  In any instance where this Agreement is terminated pursuant to this Section 6, the Deposit shall, provided that Purchaser is not otherwise in default of its obligations pursuant to this Agreement, be promptly returned to Purchaser, and this Agreement and the obligations of the parties hereunder shall terminate (and no party hereto shall have any further obligations in connection herewith except under those provisions that expressly survive the Closing or a termination of this Agreement, as the case may be).  The parties hereby waive the provisions of any statute which provides for a different outcome or treatment in the event of a casualty or a condemnation or eminent domain proceeding.
7.    Representations, Warranties and Covenants.
7.1    Representations and Warranties of Seller.  Subject to the provisions of this Section 7.1, Seller hereby represents to Purchaser as follows:
(a)    Leases.  Seller has no knowledge of any leases, licenses or other occupancy agreements to which Seller is a party or is bound affecting any portion of the Property which will be in force on the Closing Date other than the Leases.  As used herein, “Leases” shall be deemed to mean, collectively, (i) the leases described on Exhibit J attached hereto and made a part hereof (the “Lease Exhibit”) and (ii) the leases entered into after the date of this Agreement by Seller in accordance with this Agreement.  To Seller’s knowledge, as of the date of this Agreement (x) the Leases are in full force and effect and have not been amended except as set forth in the Lease Exhibit, and (y) the Lease Exhibit is true and correct in all material respects. 
(b)    Litigation. To Seller’s knowledge, there is no pending or threatened litigation or condemnation action against the Property or against Seller with respect to the Property.
(c)    No Insolvency.  Seller is not a debtor in any state or federal insolvency, bankruptcy, receivership proceeding.
(d)    Non-Foreign Person.  Seller is not a “foreign person” as defined in Section 1445 of the Internal Revenue Code, as amended.
(e)    Contracts.  As of the date of this Agreement, there are no Contracts in effect with respect to the Property other than the Contracts described on Exhibit K attached hereto and made a part hereof.  
(f)    Property Management Agreements; Lease Brokerage Agreements; Leasing Commission Agreements.  Seller has not entered into any property management 

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agreements, lease brokerage agreements or lease commission agreements that shall be binding upon Purchaser following Closing.
(g)    Due Authority.  This Agreement and all agreements, instruments and documents herein provided to be executed or to be caused to be executed by Seller are, or on the Closing Date will be, duly authorized, executed and delivered by and are binding upon Seller.  Seller is a limited liability company, duly organized and validly existing and in good standing under the laws of the State of Maryland, and is duly authorized and qualified to do all things required of it under this Agreement.
(h)    Special Assessments.  Seller has not received any written notice from any governmental agency that any special assessments are pending, noted or levied against any portion of the Property.
(i)    Rent Roll/Operating Statements/Contracts.  The Rent Rolls, Leases, Contracts and operating statements regarding the Property provided to Purchaser by Seller are the same as those used and relied upon by Seller and its property manager in connection with its operation of the Property.
References to the “knowledge” of Seller or words of similar import shall refer only to the current actual (as opposed to implied or constructive) knowledge of Alex Marshall and shall not be construed, by imputation or otherwise, to refer to the knowledge of Seller or any parent, subsidiary or affiliate of Seller or to any other officer, agent, manager, representative or employee of Seller or to impose upon Alex Marshall any duty to investigate the matter to which such actual knowledge, or the absence thereof, pertains.  Notwithstanding anything to the contrary contained in this Agreement, Alex Marshall shall have no personal liability hereunder.  Seller hereby represents and warrants that Alex Marshall is the individual affiliated with Seller responsible for the Property.  The representations and warranties of Seller set forth in this Section 7.1 shall survive Closing for a period of six (6) months.
7.2    GENERAL DISCLAIMER.  EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT, THE SALE OF THE PROPERTY HEREUNDER IS AND WILL BE MADE ON AN “AS IS” ,”WHERE IS,” AND “WITH ALL FAULTS” BASIS, WITHOUT REPRESENTATIONS AND WARRANTIES OF ANY KIND OR NATURE, EXPRESS, IMPLIED OR OTHERWISE, INCLUDING ANY REPRESENTATION OR WARRANTY CONCERNING TITLE TO THE PROPERTY, THE PHYSICAL CONDITION OF THE PROPERTY (INCLUDING THE CONDITION OF THE SOIL OR THE IMPROVEMENTS), THE ENVIRONMENTAL CONDITION OF THE PROPERTY (INCLUDING THE PRESENCE OR ABSENCE OF HAZARDOUS SUBSTANCES ON OR AFFECTING THE PROPERTY), THE COMPLIANCE OF THE PROPERTY WITH APPLICABLE LAWS AND REGULATIONS (INCLUDING ZONING AND BUILDING CODES OR THE STATUS OF DEVELOPMENT OR USE RIGHTS RESPECTING THE PROPERTY), THE FINANCIAL CONDITION OF THE PROPERTY OR ANY OTHER REPRESENTATION OR WARRANTY RESPECTING ANY INCOME, EXPENSES, CHARGES, LIENS OR ENCUMBRANCES, RIGHTS OR CLAIMS ON, AFFECTING OR PERTAINING TO THE PROPERTY OR ANY PART THEREOF.  PURCHASER ACKNOWLEDGES THAT, DURING THE DUE DILIGENCE PERIOD, PURCHASER WILL EXAMINE, REVIEW AND INSPECT ALL 

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MATTERS WHICH IN PURCHASER’S JUDGMENT BEAR UPON THE PROPERTY AND ITS VALUE AND SUITABILITY FOR PURCHASER’S PURPOSES.  PURCHASER IS A SOPHISTICATED PURCHASER WHO IS FAMILIAR WITH THE OWNERSHIP AND OPERATION OF REAL ESTATE PROJECTS SIMILAR TO THE PROPERTY AND THAT PURCHASER HAS OR WILL HAVE ADEQUATE OPPORTUNITY TO COMPLETE ALL PHYSICAL AND FINANCIAL EXAMINATIONS (INCLUDING ALL OF THE EXAMINATIONS, REVIEWS AND INVESTIGATIONS REFERRED TO IN SECTION 4) RELATING TO THE ACQUISITION OF THE PROPERTY HEREUNDER IT DEEMS NECESSARY, AND WILL ACQUIRE THE SAME SOLELY ON THE BASIS OF AND IN RELIANCE UPON SUCH EXAMINATIONS AND THE TITLE INSURANCE PROTECTION AFFORDED BY THE OWNER’S POLICY AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER (OTHER THAN AS EXPRESSLY PROVIDED HEREIN).  EXCEPT AS TO MATTERS SPECIFICALLY SET FORTH IN THIS AGREEMENT:  (A) PURCHASER WILL ACQUIRE THE PROPERTY SOLELY ON THE BASIS OF ITS OWN PHYSICAL AND FINANCIAL EXAMINATIONS, REVIEWS AND INSPECTIONS AND THE TITLE INSURANCE PROTECTION AFFORDED BY THE OWNER’S POLICY, AND (B) WITHOUT LIMITING THE FOREGOING, PURCHASER WAIVES ANY RIGHT IT OTHERWISE MAY HAVE AT LAW OR IN EQUITY, INCLUDING, WITHOUT LIMITATION, THE RIGHT TO SEEK DAMAGES FROM SELLER IN CONNECTION WITH THE ENVIRONMENTAL CONDITION OF THE PROPERTY, INCLUDING ANY RIGHT OF CONTRIBUTION UNDER THE COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT.  THE PROVISIONS OF THIS SECTION 7.2 SHALL SURVIVE THE CLOSING.
7.3    Interim Covenants of Seller.  Until the Closing Date or the sooner termination of this Agreement in accordance with the terms and conditions of this Agreement:
7.3.1    Seller shall maintain and manage the Property in substantially the same manner as prior hereto pursuant to Seller’s normal course of business (such as routine and customary maintenance obligations but expressly excluding any capital expenditures or expenditures not incurred in such normal course of business), subject to reasonable wear and tear and further subject to destruction by casualty or other events beyond the control of Seller.  
7.3.2    Following the date of this Agreement, Seller shall not modify, extend, renew or cancel any Contract, or enter into any new service or equipment leasing contract relating to the Property, without the prior written consent of Purchaser (which consent shall not be unreasonably withheld, conditioned or delayed); provided, however, that Purchaser’s consent shall not be required for any Contract modification, extension, renewal or cancellation, or for the execution of any new service or equipment leasing contract, which in either case is consistent with Seller’s operation of the Property prior to the date of this Agreement and so long as any such new service or equipment leasing contract or existing Contract, as modified, extended or renewed, is on market-rate or better terms and is cancelable upon not more than thirty (30) days’ notice without premium or penalty.  Purchaser’s failure to disapprove any request for consent by Seller under this Section 7.3.2 within five (5) business days following Seller’s request therefor shall be deemed to constitute Purchaser’s consent thereto.  Seller shall promptly deliver to Purchaser copies of any new service contracts or modifications, extensions or renewals of existing Contracts hereafter entered 

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into by Seller.  Any new service contract entered into by Seller in accordance with the terms of this Agreement shall thereafter be deemed a “Contract” for purposes of the transaction contemplated hereby.
7.3.3    Seller shall have the right to continue to offer the Property for lease in the same manner as prior hereto pursuant to its normal course of business and, upon request, shall keep Purchaser reasonably informed as to the status of leasing prior to the Closing Date.  Seller shall not enter into any lease with a term in excess of twelve (12) months.
7.3.4    Notwithstanding anything to the contrary contained in this Agreement: (i) Seller makes no representations or warranties and assumes no responsibility with respect to the continued occupancy of the Property or any part thereof by any tenant, (ii) the removal of a tenant whether by summary proceedings or otherwise prior to the Closing Date shall not give rise to any claim on the part of Purchaser of a breach hereunder or a failed representation or warranty, and (iii) Purchaser agrees that it shall not be grounds for Purchaser’s refusal to close this transaction that any tenant is a holdover tenant, is in default under its Lease or is no longer in occupancy of or a tenant of the Property on the Closing Date and Purchaser shall accept title subject to such holding over, default or missing tenant without an abatement in or credit against the Purchase Price.
7.3.5    Seller will keep in force and effect with respect to the Property the insurance policies currently carried by Seller or policies providing similar coverage through the Closing Date.
7.4    Representations and Warranties of Purchaser.  Purchaser hereby represents and warrants to Seller as follows:
(a)    this Agreement and all agreements, instruments and documents herein provided to be executed or caused to be executed by Purchaser are, or on the Closing Date will be, duly authorized, executed and delivered by and are binding upon Purchaser.  Purchaser is a limited liability company duly organized and validly existing and in good standing under the laws of the State of Delaware, and is duly authorized and qualified to do all things required of it under this Agreement.
(b)    No petition has been filed by or against Purchaser under the Federal Bankruptcy Code or any similar state or federal insolvency, bankruptcy or receivership laws.
(c)    The provisions of this Section 7.4 shall survive the Closing.
8.    Release.  EFFECTIVE AS OF THE CLOSING, PURCHASER SHALL BE DEEMED TO HAVE RELEASED SELLER AND ALL SELLER RELATED PARTIES FROM ALL CLAIMS WHICH PURCHASER OR ANY AGENT, REPRESENTATIVE, AFFILIATE, EMPLOYEE, DIRECTOR, OFFICER, PARTNER, MEMBER, SHAREHOLDER OR OTHER PERSON OR ENTITY ACTING ON PURCHASER’S BEHALF OR OTHERWISE RELATED TO OR AFFILIATED WITH PURCHASER (EACH, A “PURCHASER RELATED PARTY”) HAS OR MAY HAVE ARISING FROM OR RELATED TO ANY MATTER OR THING RELATED TO OR IN CONNECTION WITH THE PROPERTY INCLUDING THE DOCUMENTS AND INFORMATION REFERRED TO HEREIN, THE LEASES AND THE 

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TENANTS THEREUNDER, ANY CONSTRUCTION DEFECTS, ERRORS OR OMISSIONS IN THE DESIGN OR CONSTRUCTION OF ALL OR ANY PORTION OF THE PROPERTY AND ANY ENVIRONMENTAL CONDITIONS, AND PURCHASER SHALL NOT LOOK TO SELLER OR ANY SELLER RELATED PARTIES IN CONNECTION WITH THE FOREGOING FOR ANY REDRESS OR RELIEF.  THIS RELEASE SHALL BE GIVEN FULL FORCE AND EFFECT ACCORDING TO EACH OF ITS EXPRESSED TERMS AND PROVISIONS, INCLUDING THOSE RELATING TO UNKNOWN AND UNSUSPECTED CLAIMS, DAMAGES AND CAUSES OF ACTION.  THE FOREGOING IS NOT INTENDED TO AND SHALL NOT BE CONSTRUED AS AFFECTING OR IMPARING ANY RIGHTS THAT PURCHASER MAY HAVE AGAINST SELLER UNDER AND SUBJECT TO THE TERMS OF THIS AGREEMENT WITH RESPECT TO (I) ANY OF THE OBLIGATIONS OF SELLER UNDER A) THE DOCUMENTS DELIVERED AT CLOSING OR, B) THIS AGREEMENT THAT EXPRESSLY SURVIVE THE CLOSING (BUT SUBJECT IN ALL EVENTS TO ANY LIMITED SURVIVAL PERIODS AND LIABILITY CAPS APPLICABLE THERETO), OR (II) ANY ACTS CONSITUTING FRAUD OR INTENTIONAL MISREPRESENTATION BY SELLER.  THE PROVISIONS OF THIS SECTION 8 SHALL SURIVE THE CLOSING OR EARLIER TERMINATION OF THIS AGREEMENT, AS THE CASE MAY BE.
9.    Remedies For Default and Disposition of the Deposit.  
9.1    SELLER DEFAULTS.  IF THE TRANSACTION HEREIN PROVIDED SHALL NOT BE CLOSED BY REASON OF SELLER’S DEFAULT UNDER THIS AGREEMENT, THEN PURCHASER SHALL HAVE, AS ITS EXCLUSIVE REMEDIES (ALL OTHER RIGHTS AND/OR REMEDIES, WHETHER AVAILABLE AT LAW OR IN EQUITY, BEING IRREVOCABLY WAIVED) THE RIGHT TO EITHER (A) TERMINATE THIS AGREEMENT (IN WHICH EVENT THE DEPOSIT SHALL BE RETURNED TO PURCHASER AND SELLER SHALL REIMBURSE PURCHASER FOR ITS ACTUAL OUT OF POCKET THIRD PARTY COSTS AND EXPENSES INCURRED IN CONNECTION WITH THE TRANSACTION CONTEMPLATED HEREIN (NOT TO EXCEED ONE HUNDRED THOUSAND DOLLARS ($100,000)), AND NEITHER PARTY HERETO SHALL HAVE ANY FURTHER OBLIGATION OR LIABILITY TO THE OTHER EXCEPT WITH RESPECT TO THOSE PROVISIONS OF THIS AGREEMENT WHICH EXPRESSLY SURVIVE THE TERMINATION OF THIS AGREEMENT), PURCHASER HEREBY WAIVING ANY RIGHT OR CLAIM TO DAMAGES FOR SELLER’S BREACH OTHER THAN AS RELATED TO SUCH THIRD PARTY COSTS, OR (B) IF SELLER SHALL WILLFULLY FAIL TO TRANSFER THE PROPERTY PURSUANT TO AND IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, SPECIFICALLY ENFORCE SELLER’S OBLIGATIONS HEREIN; PROVIDED THAT ANY ACTION BY PURCHASER FOR SPECIFIC PERFORMANCE MUST BE FILED, IF AT ALL, WITHIN THIRTY (30) DAYS OF SELLER’S DEFAULT, AND THE FAILURE TO FILE WITHIN SUCH PERIOD SHALL CONSTITUTE A WAIVER BY PURCHASER OF SUCH RIGHT AND REMEDY; IF PURCHASER SHALL NOT HAVE FILED AN ACTION FOR SPECIFIC PERFORMANCE WITHIN THE AFOREMENTIONED TIME PERIOD OR SO NOTIFIED SELLER OF ITS ELECTION TO TERMINATE THIS AGREEMENT, PURCHASER’S SOLE REMEDY SHALL BE TO TERMINATE THIS AGREEMENT IN ACCORDANCE WITH CLAUSE (A) ABOVE, PROVIDED THAT NOTWITHSTANDING THE FOREGOING, IN THE EVENT 

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SPECIFIC PERFORMANCE IS UNAVAILABLE TO PURCHASER AS A REMEDY DUE TO SELLER'S CONVEYANCE OF THE PROPERTY TO A THIRD PARTY WHILE THIS AGREEMENT IS IN EFFECT, THE DEPOSIT SHALL BE RETURNED TO PURCHASER AND SELLER SHALL REIMBURSE PURCHASER FOR ALL OUT OF POCKET THIRD PARTY COSTS AND EXPENSES INCURRED IN CONNECTION WITH THE TRANSACTION CONTEMPLATED HEREIN AND SELLER SHALL PAY PURCHASER AN AMOUNT EQUAL TO THE DIFFERENCE BETWEEN THE PURCHASE PRICE HEREUNDER AND THE PURCHASE PRICE PAID BY SUCH THIRD PARTY, UP TO AN AGGREGATE AMOUNT OF ONE MILLION DOLLARS ($1,000,000).   
9.2    PURCHASER DEFAULTS.  IN THE EVENT THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT SHALL NOT CLOSE ON ACCOUNT OF PURCHASER’S DEFAULT, THEN THIS AGREEMENT SHALL TERMINATE AND THE RETENTION OF THE DEPOSIT AS “LIQUIDATED DAMAGES” SHALL BE SELLER’S SOLE AND EXCLUSIVE REMEDY UNDER THIS AGREEMENT, SUBJECT TO THE PROVISIONS OF THIS AGREEMENT THAT EXPRESSLY SURVIVE THE TERMINATION OF THIS AGREEMENT; PROVIDED, HOWEVER, NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED TO LIMIT SELLER’S RIGHTS OR DAMAGES UNDER ANY INDEMNITIES GIVEN BY PURCHASER TO SELLER UNDER THIS AGREEMENT.  IN CONNECTION WITH THE FOREGOING, THE PARTIES RECOGNIZE THAT SELLER WILL INCUR EXPENSE IN CONNECTION WITH THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT AND THAT THE PROPERTY WILL BE REMOVED FROM THE MARKET; FURTHER, THAT IT IS EXTREMELY DIFFICULT AND IMPRACTICABLE TO ASCERTAIN THE EXTENT OF DETRIMENT TO SELLER CAUSED BY THE BREACH BY PURCHASER UNDER THIS AGREEMENT AND THE FAILURE OF THE CONSUMMATION OF THE TRANSACTION CONTEMPLATED BY THIS AGREEMENT OR THE AMOUNT OF COMPENSATION SELLER SHOULD RECEIVE AS A RESULT OF PURCHASER’S BREACH OR DEFAULT. 
9.3    Disposition of Deposit.  In the event the transaction contemplated by this Agreement shall close, the Deposit shall be applied as a partial payment of the Purchase Price.  Any interest earned on the Deposit shall accrue for the benefit of Purchaser.
10.    Reserved.
11.    Miscellaneous.
11.1    Brokers.
11.1.1    Except as provided in Section 11.1.2 below, Seller represents and warrants to Purchaser, and Purchaser represents and warrants to Seller, that no broker or finder has been engaged by it, respectively, in connection with the sale contemplated under this Agreement.  In the event of a claim for broker’s or finder’s fee or commissions in connection with the sale contemplated by this Agreement, then Seller shall indemnify, defend and hold harmless Purchaser from the same if it shall be based upon any statement or agreement alleged to have been made by Seller, and Purchaser shall indemnify, defend and hold harmless Seller from the same if it shall be based upon any statement or agreement alleged to have been made by 

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Purchaser.  Purchaser shall not in any event be liable in connection with claims made by Broker (as defined below).
11.1.2    If and only if the sale contemplated hereunder closes, Seller has agreed to pay a brokerage commission to ARA Real Estate Investment Services (“Broker”) pursuant to a separate written agreement between Seller and Broker.  Section 11.1.1 hereof is not intended to apply to leasing commissions incurred in accordance with this Agreement.
11.2    Limitation of Liability.  No partner or agent of Seller, nor any Seller Related Parties, shall have any personal liability, directly or indirectly, under or in connection with this Agreement or any agreement made or entered into under or pursuant to the provisions of this Agreement, or any amendment or amendments to any of the foregoing made at any time or times, heretofore or hereafter, and Purchaser and its successors and assigns and, without limitation, all other persons and entities, shall look solely to Seller’s assets for the payment of any claim or for any performance, and Purchaser, on behalf of itself and its successors and assigns, hereby waives any and all such personal liability.  Notwithstanding anything to the contrary contained in this Agreement or any documents executed in connection herewith, if the Closing of the transaction contemplated hereunder shall have occurred, (i) the aggregate liability of Seller arising pursuant to or in connection with any representations, warranties or other obligations (whether express or implied) of Seller under this Agreement or any document or certificate executed or delivered in connection herewith shall not exceed Five Hundred Thousand and 00/100 Dollars ($500,000.00) (the “Liability Ceiling”) and (ii) in no event shall Seller have any liability to Purchaser unless and until the aggregate liability of Seller arising pursuant to or in connection with any representations, warranties or other obligations (whether express or implied) of Seller under this Agreement or any document or certificate executed or delivered in connection herewith shall exceed Twenty Thousand and 00/100 Dollars ($20,000.00) (the “Liability Floor”).  If Seller’s aggregate liability to Purchaser shall exceed the Liability Floor, Seller shall be liable for the entire amount thereof up to but not exceeding the Liability Ceiling.  Notwithstanding the foregoing, the terms of this Section 11.2 shall not apply to Seller's obligations pursuant to Section 5.4 of this Agreement.
11.3    Exhibits; Entire Agreement; Modification.  All exhibits attached and referred to in this Agreement are hereby incorporated herein as if fully set forth in (and shall be deemed to be a part of ) this Agreement.  This Agreement contains the entire agreement between the parties respecting the matters herein set forth and supersedes any and all prior agreements between the parties hereto respecting such matters.  This Agreement may not be modified or amended except by written agreement signed by both parties. The parties hereby acknowledge and agree that that certain Access Agreement by and between Seller and Purchaser dated March 20, 2013 is hereby terminated and is superseded by the terms of this Agreement.
11.4     Business Days.  Whenever any action must be taken (including the giving of notice or the delivery of documents) under this Agreement during a certain period of time (or by a particular date) that ends (or occurs) on a non-Business Day, then such period (or date) shall be extended until the next succeeding Business Day.  As used herein, the term “Business Day” shall be deemed to mean any day, other than a Saturday or Sunday, on which commercial banks in the State of Maryland are not required or authorized to be closed for business.

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11.5    Interpretation.     Section headings shall not be used in construing this Agreement.  Each party acknowledges that such party and its counsel, after negotiation and consultation, have reviewed and revised this Agreement.  As such, the terms of this Agreement shall be fairly construed and the usual rule of construction, to wit, that ambiguities in this Agreement should be resolved against the drafting party, shall not be employed in the interpretation of this Agreement or any amendments, modifications or exhibits hereto or thereto.  Whenever  the words “including”, “include” or “includes” are used in this Agreement, they shall be interpreted in a non-exclusive manner.  Except as otherwise indicated, all Exhibit and Section references in this Agreement shall be deemed to refer to the Exhibits and Sections in this Agreement.
11.6    Governing Law.  This Agreement shall be construed and enforced in accordance with the laws of the State of Maryland.
11.7    Successors and Assigns.  Purchaser may not assign or transfer its rights or obligations under this Agreement without the prior written consent of Seller, which consent may be given or withheld in the sole and absolute discretion of Seller; provided, however, that Purchaser shall have the right to assign its rights under this Agreement without the consent of Seller to a) an entity controlled by, or under common ownership or control with, Purchaser, and/or b) an entity that is a REIT (or that is wholly owned directly or indirectly by a REIT) for which Purchaser or an affiliate of Purchaser acts as the investment advisor, provided that, in the event of such an assignment or transfer, the transferee shall assume in writing all of the transferor’s obligations hereunder (but Purchaser shall not be released from obligations hereunder until Closing).  Notwithstanding and without limiting the foregoing, no consent given by Seller to any transfer or assignment of Purchaser’s rights or obligations hereunder shall be deemed to constitute a consent to any other transfer or assignment of Purchaser’s rights or obligations hereunder and no transfer or assignment in violation of the provisions hereof shall be valid or enforceable.  Subject to the foregoing, this Agreement and the terms and provisions hereof shall inure to the benefit of and be binding upon the successors and assigns of the parties.  
11.8    Notices.  All notices, requests or other communications which may be or are required to be given, served or sent by either party hereto to the other shall be (a) delivered in person, (b) by facsimile and email transmission, with receipt thereof confirmed by printed facsimile acknowledgment, (c) by overnight delivery with any reputable overnight courier service, or (d) by deposit in any post office or mail depository regularly maintained by the United States Postal Office and sent by registered or certified mail, postage paid, return receipt requested, and shall be effective upon receipt (whether refused or accepted) and, in each case, addressed as follows:
To Seller:
c/o Federal Capital Partners
5425 Wisconsin Avenue, Suite 202
Chevy Chase, Maryland 20815
Attention:  Alex Marshall
Email:  alex@fcpdc.com 
Facsimile: (240) 395-2053

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With a Copy To:
Linowes and Blocher LLP
7200 Wisconsin Avenue, Suite 800
Bethesda, Maryland 20814
Attention:  Bryson M. Filbert, Esq.
Email:  bfilbert@linowes-law.com 
Facsimile: (301) 654-280
To Purchaser:
c/o Legacy Partners
4000 East Third Avenue, Suite 600
Foster City, California 94404
Attention: Jeffrey K. Byrd
Email:    Byrd@legacypartners.com
Facsimile:  (650) 571-2253
With a Copy To:
Schultz & Wright, LLP
545 Middlefield Rd., Suite 160
Menlo Park, California  94025
Attention: Anne Keeler Wright, Esq.
E-mail:  wright@swllp.com
Facsimile:  (650) 462-0998
11.9    Third Parties.  Nothing in this Agreement, whether expressed or implied, is intended to confer any rights or remedies under or by reason of this Agreement upon any other person other than the parties hereto and their respective permitted successors and assigns, nor is anything in this Agreement intended to relieve or discharge the obligation or liability of any third persons to any party to this Agreement, nor shall any provision give any third parties any right of subrogation or action over or against any party to this Agreement.  This Agreement is not intended to and does not create any third party beneficiary rights whatsoever.
11.10    Legal Costs.  The parties hereto agree that they shall pay directly any and all legal costs which they have incurred on their own behalf in the preparation of this Agreement, all deeds and other agreements pertaining to this transaction, and that such legal costs shall not be part of the closing costs.  
11.11    Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same document.  When counterparts or PDF copies have been executed by all parties, they shall have the same effect as if the signatures to each counterpart or copy were upon the same documents and copies of such documents shall be deemed valid as originals.  The parties agree that all such signatures may be transferred to a single document upon the request of any party.

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11.12    Effectiveness.  In no event shall any draft of this Agreement create any obligation or liability, it being understood that this Agreement shall be effective and binding only when a counterpart hereof has been executed and delivered by each party hereto.  Either Seller or Purchaser shall have the right to discontinue negotiations and withdraw any draft of this Agreement at any time prior to the full execution and delivery of this Agreement by each party hereto. Except as otherwise stated herein, each of Seller and Purchaser assumes the risk of all costs and expenses incurred by such party in any negotiations or otherwise in connection with the transactions contemplated hereby.
11.13    No Implied Waivers.  No failure or delay of either party in the exercise of any right or remedy given to such party hereunder or the waiver by any party of any condition hereunder for its benefit (unless the time specified in this Agreement for exercise of such right or remedy has expired) shall constitute a waiver of any other or further right or remedy nor shall any single or partial exercise of any right or remedy preclude other or further exercise thereof or any other right or remedy.  No waiver by either party of any breach hereunder or failure or refusal by the other party to comply with its obligations shall be deemed a waiver of any other or subsequent breach, failure or refusal to so comply.
11.14    Discharge of Seller’s Obligations.  Except as otherwise expressly provided in this Agreement, Purchaser’s acceptance of the Deed shall be deemed a discharge of all of the obligations of Seller hereunder and all of Seller’s representations, warranties, covenants and agreements in this Agreement shall merge in the documents and agreements executed at the Closing and shall not survive the Closing.
11.15    No Recordation.  Neither this Agreement nor any memorandum thereof shall be recorded and any attempted recordation hereof shall be void and shall constitute a default hereunder.
11.16    Unenforceability.  If all or any portion of any provision of this Agreement shall be held to be invalid, illegal or unenforceable in any respect, then such invalidity, illegality or unenforceability shall not affect any other provision hereof, and such provision shall be limited and construed as if such invalid, illegal or unenforceable provision or portion thereof were not contained herein unless doing so would materially and adversely affect a party or the benefits that such party is entitled to receive under this Agreement.  
11.17    Waiver of Trial by Jury.  SELLER AND PURCHASER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER ARISING IN TORT OR CONTRACT) BROUGHT BY EITHER AGAINST THE OTHER ON ANY MATTER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT.  
11.18    Intentionally Deleted. 
11.19    Press Releases.  Any press release or other public disclosure regarding this Agreement or the transaction contemplated hereby shall not be made prior to the Closing without Seller’s prior written consent except as may be required by law, regulation, rule or court order.  

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11.20    Exclusivity.  Seller hereby agrees that from the date of this Agreement through the earlier of the termination of this Agreement by any party hereto or the Closing Date, Seller shall not market the Property for sale or engage in negotiations with any other party other than Purchaser for the sale of the Property.
11.21    Notice to Purchaser concerning the Chesapeake and Atlantic Coastal Bays Critical Area. Purchaser is advised that all or a portion of the property may be located in the “critical area” of the Chesapeake and Atlantic Coastal Bays, and that additional zoning, land use, and resource protection regulations apply in this area. The “critical area” generally consists of all land and water areas within 1,000 feet beyond the landward boundaries of State or private wetlands, the Chesapeake Bay, the Atlantic Coastal Bays, and all of their tidal tributaries. The “critical area” also includes the waters of and lands under the Chesapeake Bay, the Atlantic Coastal Bays, and all of their tidal tributaries to the head of tide. For information as to whether the property is located within the critical area, buyer may contact the local department of planning and zoning, which maintains maps showing the extent of the critical area in the jurisdiction. Allegany, Carroll, Frederick, Garrett, Howard, Montgomery, and Washington counties do not include land located in the critical area.
11.22    Survival.  The provisions of this Section 11 shall survive the Closing or earlier termination of this Agreement.
[SIGNATURE PAGE FOLLOWS]

26

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.
SELLLER:
FCP CRYSTAL PARK, LLC, a Maryland limited
liability company
		
	By:
	FCP Fund I Trust, its Sole Member

		
	By:
	/s/ Authorized Signatory

		
	Name:
	__________________

		
	Title:
	___________________

PURCHASER:
KBS-LEGACY APARMENT COMMUNITY
REIT VENTURE, LLC, a Delaware limited liability
company
		
	By:
	Legacy Partners Residential Realty LLC, a

Delaware limited liability company, its Managing
Member
		
	By:
	/s/ Guy K. Hays

Name:  Guy K. Hays
		
	Title:
	as Trustee of the Hays 2009 Revocable

Trust u/d/t dated November 12, 2009,
a Managing Member

27

LIST OF EXHIBITS

Exhibit A – Legal description of the Land
Exhibit B – Form of Escrow Agreement
Exhibit C – Form of Deed
Exhibit D – Form of Assignment and Assumption of Leases
Exhibit E – Form of Bill of Sale and General Assignment
Exhibit F – Form of FIRPTA
Exhibit G – Form of Assignment and Assumption of Contracts
Exhibit H – Form of Tenant Notice
Exhibit I – Reserved
Exhibit J – List of Leases
Exhibit K – List of Service Contracts
Exhibit L – List of Property Materials
Exhibit M – Form of Real Estate Transfer Disclosure Statement
Exhibit N – Form of City of Frederick Disclosure Statement

28

EXHIBIT A 
(Legal description of the Land)
All that certain property located in Frederick County, Maryland more particularly described as follows:
Section 3-R, containing 16.345 acres of land, more or less, as set forth on plat entitled “Consolidated Plat, Section 3-R, Waterford”, as recorded in Plat Book 45 at Plat 105, among the Land Records of Frederick County, Maryland.
TAX I.D. No. 02-155591

29

EXHIBIT B
(Form of Escrow Agreement)
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this “Agreement”) is dated as of the ___ day of March, 2013 by and among CONTINENTAL TITLE GROUP, a __________ (“Escrowee”), FCP CRYSTAL PARK, LLC, a Maryland limited liability company (“Seller”), and KBS-LEGACY APARTMENT COMMUNITY REIT VENTURE, LLC, a Delaware limited liability company (“Purchaser”).
W I T N E S S E T H
WHEREAS, Seller and Purchaser entered into that certain Purchase and Sale Agreement dated as of March ____, 2013, for the purchase and sale of the property known as the Crystal Park at Waterford Apartments located in Frederick, Maryland (the “Property”), as more particularly described therein (hereinafter referred to as the “Contract”);
WHEREAS, the Contract provides for the terms and conditions applicable to the sale and purchase of the Property and the performance obligations and rights of Seller and Purchaser; and 
WHEREAS, Seller and Purchaser agree, pursuant to the Contract, that Escrowee shall hold the Deposit in escrow (capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Contract) in accordance with the terms and conditions of the Contract and this Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
1.    Appointment of Agent.
1.1    Purchaser and Seller hereby appoint Escrowee to act as their escrow agent on the terms and conditions hereinafter set forth, and Escrowee accepts such appointment. 
1.2    Escrowee agrees to hold the Deposit on behalf of the parties to the Contract, and to apply, disburse and deliver the Deposit as provided in the Contract and this Agreement.  In the event of any conflict between the terms and conditions of the Contract and the terms or conditions of this Agreement, as to the obligations of Escrowee, the terms and conditions of this Agreement shall govern and control.
2.    Disposition of the Deposit.
2.1    Escrowee shall return the Initial Deposit to Purchaser without further instruction from Seller in the event Escrowee has not received the Additional Deposit on or prior to 5:00 p.m. Eastern time on April 16, 2013.  
2.2    Escrowee shall pay the Deposit to Seller or otherwise in accordance with the terms of the Contract or joint instruction signed by both Seller and Purchaser.  If prior to the 

Closing, either party alone makes a demand upon Escrowee for delivery of the Deposit, Escrowee shall give notice to the other party of such demand.  If a notice of objection to the proposed payment is not received from the other party within seven (7) Business Days after the giving of notice by Escrowee, Escrowee is hereby authorized to deliver the Deposit to the party who made the demand.  If Escrowee receives a notice of objection within said period, then Escrowee shall continue to hold the Deposit and thereafter pay it to the party entitled when Escrowee receives (a) notice from the objecting party withdrawing the objection, or (b) a notice signed by both parties directing disposition of the Deposit, or (c) a judgment or order of a court of competent jurisdiction.  
2.3    Nothing in this Section 2 shall have any effect whatsoever upon Escrowee’s rights, duties, and obligations under Section 3 below.
3.    Concerning Escrowee.
3.1    Escrowee shall be protected in relying upon the accuracy, acting in reliance upon the contents, and assuming the genuineness of any notice, demand, certificate, signature, instrument or other document which is given to Escrowee without verifying the truth or accuracy of any such notice, demand, certificate, signature, instrument or other document;
3.2    Escrowee shall not be bound in any way by any other contract or understanding between Seller and Purchaser, whether or not Escrowee has knowledge thereof or consents thereto unless such consent is given in writing;
3.3    Escrowee’s sole duties and responsibilities shall be to hold and disburse the Deposit in accordance with this Agreement and the Contract; provided, however, that Escrowee shall have no responsibility for the clearing or collection of the check representing the Deposit;
3.4    Upon the disbursement of the Deposit in accordance with this Agreement, Escrowee shall be relieved and released from any liability under this Agreement;
3.5    Escrowee may resign at any time upon at least ten (10) Business Days prior written notice to Seller and Purchaser hereto.  If, prior to the effective date of such resignation, Seller and Purchaser hereto shall have approved, in writing, a successor escrow agent, then upon the resignation of Escrowee, Escrowee shall deliver the Deposit to such successor escrow agent.  From and after such resignation and the delivery of the Deposit to such successor escrow agent, Escrowee shall be fully relieved of all of its duties, responsibilities and obligations under this Agreement, all of which duties, responsibilities and obligations shall be performed by the appointed successor escrow agent.  If for any reason Seller and Purchaser shall not approve a successor escrow agent within such period, Escrowee may bring any appropriate action or proceeding for leave to deposit the Deposit with a court of competent jurisdiction, pending the approval of a successor escrow agent, and upon such deposit Escrowee shall be fully relieved of all of its duties, responsibilities and obligations under this Agreement;
3.6    Seller and Purchaser hereby agree to, jointly and severally, indemnify, defend and hold harmless Escrowee from and against any liabilities, damages, losses, costs or 

2

expenses incurred by, or claims or charges made against, Escrowee (including reasonable attorneys’ fees and disbursements) by reason of Escrowee performing its obligations pursuant to, and in accordance with, the terms of this Agreement, but in no event shall Escrowee be indemnified for its negligence, willful misconduct or breach of the terms of this Agreement;
3.7    In the event that a dispute shall arise in connection with this Agreement or the Contract, or as to the rights of Seller and Purchaser in and to, or the disposition of, the Deposit, Escrowee shall have the right to (w) hold and retain all or any part of the Deposit until such dispute is settled or finally determined by litigation, arbitration or otherwise, or (x) deposit the Deposit in an appropriate court of law, following which Escrowee shall thereby and thereafter be relieved and released from any liability or obligation under this Agreement, or (y) institute an action in interpleader or other similar action permitted by stakeholders in the State of Maryland, or (z) interplead Seller or Purchaser in any action or proceeding which may be brought to determine the rights of Seller and Purchaser to all or any part of the Deposit; and
3.8    Escrowee shall not have any liability or obligation for loss of all or any portion of the Deposit by reason of the insolvency or failure of the institution of depository with whom the escrow account is maintained.
4.    Termination.
This Agreement shall automatically terminate upon the delivery or disbursement by Escrowee of the Deposit in accordance with the terms of the Contract and terms of this Agreement, as applicable.
5.    Notices.
All notices, requests or other communications which may be or are required to be given, served or sent by any party hereto to any other party hereto shall be deemed to have been properly given, if in writing and shall be deemed delivered (a) upon delivery, if delivered in person, (b) by facsimile and email transmission, with receipt thereof confirmed by printed facsimiled transmission acknowledgment, (c) one (1) Business Day after having been deposited for overnight delivery with any reputable overnight courier service, or (d) three (3) Business Days after having been deposited in any post office or mail depository regularly maintained by the United States Postal Office and sent by registered or certified mail, postage paid, return receipt requested, and in each case, addressed as follows:
To Seller:
c/o Federal Capital Partners
5425 Wisconsin Avenue, Suite 202
Chevy Chase, Maryland 20815
Attention:  Alex Marshall
Email:  alex@fcpdc.com 
Facsimile: (240) 395-2053

3

With a Copy To:
Linowes and Blocher LLP
7200 Wisconsin Avenue, Suite 800
Bethesda, Maryland 20814
Attention:  Bryson M. Filbert, Esq.
Email:  bfilbert@linowes-law.com 
Facsimile: (301) 654-2801
To Purchaser:
c/o Legacy Partners
4000 East Third Avenue, Suite 600
Foster City, California 94404
Attention: Jeffrey K. Byrd
Email:    Byrd@legacypartners.com
Facsimile: (650) 571-2253
With a Copy To:
Schultz & Wright, LLP
545 Middlefield Rd., Suite 160
Menlo Park, California  94025
Attention: Anne Keeler Wright, Esq.
Facsimile: (650) 462-0998
E-mail:  wright@swllp.com
If to Escrowee:
Continental Title Group 
1500 Whetstone Way
Suite T-100
Baltimore, Maryland 21230
Attention: James D. Fisher
Email: jfisher@continentaltg.com
Facsimile:  (410) 837-0866
6.    Governing Law/Waiver of Trial by Jury.
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO THE CONFLICTS OF LAW PRINCIPLES OF SUCH STATE.  THE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT.

4

7.    Successors.
This Agreement shall be binding upon and inure to the benefit of the respective successors and permitted assigns of the parties hereto; provided, however, that except as expressly provided herein as to the Escrowee, this Agreement may not be assigned by any party without the prior written consent of the other parties.
8.    Entire Agreement. 
This Agreement, together with the Contract, contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter.
9.    Amendments.
Except as expressly provided in this Agreement, no amendment, modification, termination, cancellation, rescission or supersession to this Agreement shall be effective unless it shall be in writing and signed by each of the parties hereto.
10.    Counterparts and/or PDF Signatures. 
This Agreement may be executed in any number of counterparts, including counterparts transmitted by PDF, any one of which shall constitute an original of this Agreement.  When counterparts or PDF copies have been executed by all parties, they shall have the same effect as if the signatures to each counterpart or copy were upon the same documents and copies of such documents shall be deemed valid as originals.  The parties agree that all such signatures may be transferred to a single document upon the request of any party.  This Agreement shall not be binding unless and until it shall be fully executed and delivered by all parties hereto.
11.    Severability.
If any provision of the Agreement or the application of any such provision to any person or circumstance shall be held invalid, illegal, or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof.
[Remainder of Page Intentionally Left Blank]

5

IN WITNESS WHEREOF, the parties have executed and delivered this Escrow Agreement as of the date and year first above written.
ESCROWEE:
CONTINENTAL TITLE GROUP, a __________
		
	By:
	_________________________

		
	Name:
	James D. Fisher

Title:
SELLER:
FCP CRYSTAL PARK, LLC, a Maryland limited
liability company
		
	By:
	FCP Fund I Trust, its Sole Member

		
	By:
	______________________________

Alex Marshall, Vice President

PURCHASER:
KBS-LEGACY APARTMENT COMMUNITY REIT
VENTURE, LLC, a Delaware limited liability company
		
	By:
	Legacy Partners Residential Realty LLC, a Delaware

limited liability company, its Managing Member
		
	By:
	_______________________________

Name:
Title:

6

EXHIBIT C
(Form of Deed)
SPECIAL WARRANTY DEED
THIS SPECIAL WARRANTY DEED is made this ______ day of _________ 2013, by and between FCP CRYSTAL PARK, LLC, a Maryland limited liability company (“Grantor”), and KBS________________________________, a ___________________ (“Grantee”).
WITNESSETH, that in consideration of the sum of Ten Dollars ($10.00) in hand paid by Grantee, the receipt and sufficiency of which are acknowledged by Grantor, Grantor does hereby grant and convey in fee simple unto Grantee, its successors and assigns, all that piece of land situate, lying, and being in the State of Maryland, and being more particularly described as follows:  See Exhibit A attached hereto.
BEING the same land conveyed to Grantor by deed recorded as Instrument No. ______.
SUBJECT TO the matters listed on Exhibit B attached hereto.
TOGETHER WITH all the buildings and improvements on the above-described land, erected, made or being; and all and every rights-of-way, alleys, ways, waters, easements, privileges, appurtenances, and advantages, to the same belonging or in anywise appertaining; and all the estate, title, right, interest and claim, either at law or in equity, or otherwise, of the Grantor of, in, to or out of the above-described land and premises, and all right, title and interest of the Grantor in and to the land lying in the bed of any street, road or highway (open or proposed) in front of, adjoining or servicing the above-described land, including condemnation awards or payments in lieu thereof as a result of a change of grade, alignment or access rights.
TO HAVE AND TO HOLD the land and premises above described and hereby intended to be conveyed, together with the building and improvements erected thereon and all rights, privileges, appurtenances, easements and advantages belonging and pertaining to the use and benefit of the Grantee, in fee simple, forever.
AND the Grantor covenants and warrants specially the property hereby conveyed and covenants to execute such further assurances as may be requisite.
[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the undersigned has duly executed this Special Warranty Deed as of the date set forth above.
GRANTOR:
FCP CRYSTAL PARK, LLC, a Maryland limited
liability company
		
	By:
	FCP Fund I Trust, its Sole Member

		
	By:
	________________________________

Alex Marshall, Vice President

	
				
	 
	***
	 
	 

	STATE OF MARYLAND
	*
	 
	 

	 
	*
	to wit:
	 

	COUNTY OF MONTGOMERY
	*
	 
	 

I HEREBY CERTIFY that on this ______ day of ________ 2013, before me, a Notary Public in and for the State of Maryland, County of ___________, personally appeared Alex Marshall, known to me (or satisfactorily proven) to be the Vice President of FCP Fund I Trust, the sole member of FCP CRYSTAL PARK, LLC, and that such person, being authorized to do so, executed the foregoing and annexed instrument for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.

____________________________________
Notary Public
My Commission Expires:_______________
[NOTARIAL SEAL]

* * *
ATTORNEY’S CERTIFICATION
THE UNDERSIGNED, a member in good standing of the Bar of the Court of Appeals of Maryland, hereby certifies that the foregoing deed was prepared by me or under my supervision.
_________________________________________
Bryson M. Filbert
*  *  *
For the Clerk of Court:   
Grantor:___________________________________
Grantor’s Interest:___________________________
Grantor’s Address:___________________________
Grantee:___________________________________
Grantee’s Interest:___________________________
Grantee’s Address:___________________________
Street Address of Property:____________________
Parcel Identifier (Tax Account) No.:_____________
Title Insurer:_______________________________

	
		
	2013
Maryland
Form
	Certification of Exemption from Withholding Upon Disposition of Maryland Real Estate  
Affidavit of Residence or Principal Residence

Based on the certification below, Transferor claims exemption from the tax withholding requirements of §10-912 of the Tax-General Article, Annotated Code of Maryland. Section  10-912 provides that certain tax payments must be withheld and paid when a deed or other instrument that effects a change in ownership of real property is presented for recordation.  The requirements of §10-912 do not apply when a transferor provides a certification of Maryland residence or certification that the transferred property is the transferor's principal residence.
	
	
	1.  Transferor Information

	Name of Transferor

FCP CRYSTAL PARK, LLC

	
		
	2.  Reasons for Exemption

	Resident
Status
	X    I, Transferor, am a resident of the State of Maryland. 
 ̈ Transferor is a resident entity as defined in Code of Maryland Regulations (COMAR) 
03.04.12.02B(11), I am an agent of Transferor, and I have authority to sign this document 
on Transferor’s behalf.

	Principal Residence
	 ̈    Although I am no longer a resident of the State of Maryland, the Property is my principal residence as defined in IRC 121 and is recorded as such with the State Department of Assessments and Taxation.

Under penalty of perjury, I certify that I have examined this declaration and that, to the best of my knowledge, it is true, correct, and complete.
	
			
	3a.  Individual Transferors

	 
	 
	 

	Witness
	 
	Name

	 
	 
	 

	 
	 
	Signature

	
			
	3b.  Entity Transferors

	 
	 
	FCP CRYSTAL PARK, LLC

	Witness/Attest
	 
	Name of Entity
By:  FCP Fund I Trust, its Sole Member

	 
	 
	By:

	 
	 
	Alex Marshall

	 
	 
	Name

	 
	 
	Vice President

	 
	 
	Title

EXHIBIT A TO DEED
LEGAL DESCRIPTION

All that certain property located in Frederick County, Maryland more particularly described as follows:
Section 3-R, containing 16.345 acres of land, more or less, as set forth on plat entitled “Consolidated Plat, Section 3-R, Waterford”, as recorded in Plat Book 45 at Plat 105, among the Land Records of Frederick County, Maryland.
TAX I.D. NO. 02-155591

EXHIBIT D

(Form of Assignment and Assumption of Leases)

ASSIGNMENT AND ASSUMPTION OF LEASES
THIS ASSIGNMENT AND ASSUMPTION OF LEASES (this “Assignment”) is executed as of the ____ day of __________, 2013 by and between FCP CRYSTAL PARK, LLC, a Maryland limited liability company (“Assignor”), whose address is 5425 Wisconsin Avenue, Suite 202, Chevy Chase, Maryland 20815, and _____________________________, a _____________________, whose address is 620 Newport Center Drive, Suite 1300, Newport Beach, California 92660 (“Assignee”).
WHEREAS, Assignee is this day purchasing from Assignor and Assignor is conveying to Assignee the Property (as such term is described in that certain Purchase and Sale Agreement dated as of March _____, 2013 between Assignor and Assignee) commonly known as Crystal Park at Waterford Apartments.
WHEREAS, the Property is encumbered by those certain tenants (the “Tenants”) occupying space under the leases listed and described on Exhibit A annexed hereto and made a part hereof (collectively, the “Tenant Leases”).
WHEREAS, Assignor desires to transfer and assign to Assignee, and Assignee desires to assume as provided herein, all of Assignor’s right, title and interest in and to the Tenant Leases.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.Assignor hereby transfers and assigns to Assignee all right, title and interest of Assignor in and to the Tenant Leases.
2.Assignee hereby affirmatively and unconditionally assumes all of Assignor’s obligations and liabilities under the Tenant Leases accruing from and after the date hereof.
3.This Assignment is made without warranty, representation, or guaranty by, or recourse against Assignor of any kind whatsoever.
4.This Assignment may be executed in any number of counterparts, each of which may be executed by any one or more of the parties hereto, but all of which shall constitute one and the same instrument, and shall be binding and effective when all parties hereto have executed and delivered at least one counterpart.
5.The terms and provisions of this Assignment shall be binding upon and inure to the benefit of the respective parties hereto, and their respective successors and assigns.

IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be duly executed as of the day and year first written above.
ASSIGNOR:

FCP CRYSTAL PARK, LLC, a Maryland limited
liability company

		
	By:
	FCP Fund I Trust, its Sole Member

		
	By:
	________________________________

Alex Marshall, Vice President

ASSIGNEE:

________________________________________, a
__________________________________________

		
	By:
	_____________________________________

Name:  _______________________________
Title:  ________________________________

EXHIBIT A TO ASSIGMENT OF LEASES

(List of Leases)

EXHIBIT E
(Form of Bill of Sale and General Assignment)
BILL OF SALE AND GENERAL ASSIGNMENT
THIS BILL OF SALE AND GENERAL ASSIGNMENT (this “Assignment”) is executed as of the ____ day of _____________, 2013 by FCP CRYSTAL PARK, LLC (“Assignor”), whose address is 5425 Wisconsin Avenue, Suite 202, Chevy Chase, Maryland 20815, and _____________________________________, a ____________________________, whose address is 620 Newport Center Drive, Suite 1300, Newport Beach, California 92660 (“Assignee”).
WHEREAS, Assignee is this day purchasing from Assignor and Assignor is conveying to Assignee the Property (as such term is described in that certain Purchase and Sale Agreement dated as of February ______, 2013 between Assignor and Assignee) commonly known as Crystal Park at Waterford Apartments.
WHEREAS, Assignor desires to assign, transfer, setover and deliver to Assignee all of Assignor’s rights, if any, in and to all furnishings, fixtures, fittings, appliances, apparatus, equipment, machinery, marketing materials and other items of personal property, if any, owned by Assignor and affixed or attached to, or placed or situated upon, the Property including, but not limited to, those items listed on Exhibit A attached hereto (collectively, the “Personal Property”), together with the following incidental rights and appurtenances relating to the Property: (i) to the extent assignable without third party consents or any cost or expense to Assignor, all of Assignor’s right, title and interest in and to all use, occupancy, building and operating permits, licenses, approvals, documents, instruments, if any, issued from time to time with respect to the Property; provided, however, if any such assignment may be made at an additional cost or expense, Assignor shall assign all of Assignor’s right, title and interest therein if and to the extent Assignee shall pay  (at Assignee’s election) such additional cost or expense; (ii) all of Assignor’s right, title and interest in and to all existing and assignable guaranties and warranties (express or implied), if any, issued in connection with the construction, alteration and repair of the Property and/or the purchase, installation and the repair of the Personal Property; (iii) domain names, iv) historic leasing and/or management data (including, but not limited to LRO data and YieldStar Site Owner Data), v) plans and specifications, vi) drawings, vii) surveys, viii) the right to use the name "Crystal Park at Waterstone ", and ix) all telephone listings and other items of intangible personal property relating solely to the Property, including, but not limited to easements, hereditaments, rights of way, appurtenances, oil, gas and mineral rights, water and riparian rights, airspace rights and development rights (collectively, the “Assigned Property”).
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.    Assignor hereby assigns, transfers, sets over and delivers to Assignee, its successors and assigns, all of Assignor’s right, title and interest, if any, in and to the Assigned Property.

2.    This Assignment is made without warranty, representation, or guaranty by, or recourse against Assignor of any kind whatsoever.  
3.    The terms and provisions of this Assignment shall be binding upon and inure to the benefit of the respective parties hereto, and their respective successors and assigns.
IN WITNESS WHEREOF, Assignor has caused this Assignment to be duly executed as of the day and year first written above.
ASSIGNOR:

FCP CRYSTAL PARK, LLC, a Maryland limited
liability company

		
	By:
	FCP Fund I Trust, its Sole Member

		
	By:
	________________________________

Alex Marshall, Vice President

EXHIBIT A TO BILL OF SALE AND GENERAL ASSIGNMENT
(Personal Property)

EXHIBIT F
(Form of FIRPTA)
FIRPTA
Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person.  To inform the transferee that withholding of tax is not required upon the disposition of a U.S. real property interest by FCP Crystal Park, LLC, a Maryland limited liability company (“Seller”), Seller hereby certifies the following:
1.    Seller is not a foreign corporation, foreign partnership, foreign trust, foreign estate or foreign person (as those terms are defined in the Internal Revenue Code and Income Tax Regulations);
		
	2.
	Seller’s U.S. taxpayer identification number is ____________;

		
	3.
	Seller is not a disregarded entity as defined in §1.1445-2(b)(2)(iii) of the Internal Revenue Code; and

		
	4.
	Seller’s principal place of business is 5425 Wisconsin Avenue, Suite 202, Chevy Chase, Maryland 20815.

Seller understands that this certification may be disclosed to the Internal Revenue Service by transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.
The undersigned officer of Seller declares that he has examined this certification and to the best of his knowledge and belief it is true, correct and complete, and he further declares that he has authority to sign this document on behalf of Seller.
SELLER:
FCP CRYSTAL PARK, LLC, a Maryland limited
liability company

		
	By:
	FCP Fund I Trust, its Sole Member

		
	By:
	________________________________

Alex Marshall, Vice President

EXHIBIT G
(Form of Assignment and Assumption of Contracts)
ASSIGNMENT AND ASSUMPTION OF CONTRACTS
THIS ASSIGNMENT AND ASSUMPTION OF CONTRACTS (this “Assignment”) is executed as of the ____ day of __________, 2013 by and between FCP CRYSTAL PARK, LLC, a Maryland limited liability company (“Assignor”), whose address is 5425 Wisconsin Avenue, Suite 202, Chevy Chase, Maryland 20815, and ___________________________, a __________________________, whose address is 620 Newport Center Drive, Suite 1300, Newport Beach, California 92660 (“Assignee”).
WHEREAS, Assignee is this day purchasing from Assignor and Assignor is conveying to Assignee the Property (as such term is described in that certain Purchase and Sale Agreement dated as of February ____, 2013 between Assignor and Assignee).
WHEREAS, in connection with its ownership and management of the Property, Assignor has entered into those certain maintenance, service and supply contracts and equipment leases, in effect on the date hereof, listed and described on Exhibit A annexed hereto and made a part hereof (collectively, the “Contracts”).
WHEREAS, Assignor desires to transfer and assign to Assignee, and Assignee desires to assume as herein provided, all of Assignor’s right, title and interest in and to the Contracts.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.    Assignor hereby transfers and assigns to Assignee all right, title and interest of Assignor in and to the Contracts.
2.    This Assignment shall constitute a direction and full authority to any person or entity that is a party to any of the Contracts to perform its obligation under the Contracts for the benefit of Assignee without further proof to any such party of the assignment to Assignee of the Contracts.
3.    Assignee hereby affirmatively and unconditionally assumes all of the obligations and liabilities of Assignor under the Contracts accruing from and after the date hereof.  
4.    This Assignment is made without warranty, representation, or guaranty by, or recourse against Assignor of any kind whatsoever.
5.    This Assignment may be executed in any number of counterparts, each of which may be executed by any one or more of the parties hereto, but all of which shall constitute one and the same instrument, and shall be binding and effective when all parties hereto have executed and delivered at least one counterpart.

6.    The terms and provisions of this Assignment shall be binding upon and inure to the benefit of the respective parties hereto, and their respective successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be duly executed as of the day and year first written above.
ASSIGNOR:

FCP CRYSTAL PARK, LLC, a Maryland limited
liability company

		
	By:
	FCP Fund I Trust, its Sole Member

		
	By:
	________________________________

Alex Marshall, Vice President

ASSIGNEE:

________________________________________, a
__________________________________________

		
	By:
	_____________________________________

Name:  
Title:  

EXHIBIT A TO ASSIGNMENT OF CONTRACTS
(Contracts)

EXHIBIT H
(Form of Tenant Notice)
_____________________, 2013
		
	To: 
	All tenants of Crystal Park at Waterford Apartments (the “Property”)

Dear Tenants:
You are hereby notified that, as of the date of this letter, FCP CRYSTAL PARK, LLC, a Maryland limited liability company (“Assignor”), has sold and conveyed the Property to _______________________________, a _____________________________ (“Assignee”).  In connection with that conveyance, Assignor has also assigned, and Assignee has assumed, all rights and interest in your lease of space within the Property, together your security deposit(s).
From and after the date of this letter, all rent and other sums payable under your lease shall be paid to “______________” at the following address or such address as Assignee may hereafter designate:
________________________
________________________
________________________
________________________
In addition, any questions, concerns or other communications regarding your lease or security deposits(s) should be directed to the attention of the following property manager for Assignee:
________________________
________________________
________________________
________________________
If you have any questions regarding any of this information, please contact the Assignee’s property manager, named above.
FCP CRYSTAL PARK, LLC, a Maryland limited
liability company

		
	By:
	FCP Fund I Trust, its Sole Member

		
	By:
	________________________________

Alex Marshall, Vice President

EXHIBIT I
(Reserved)

EXHIBIT J
(List of Leases)

	
			
	Rent Roll
	 
	 

	Crystal Park (000000491)
	 
	 

	 
	 
	 

	Unit
	 
	Name

	 
	 
	 

	Current/Notice Residents
	 
	 

	 
	 
	 

	101
	 
	Meghan Blom

	102
	 
	Mitchell rose

	103
	 
	Caroline Reed

	104
	 
	Thomas McCarthy

	105
	 
	Joe McGregor

	106
	 
	Patricia Reilly

	107
	 
	Kathryn Kalamajka  2x

	108
	 
	Lisa Hawkins

	109
	 
	Joell Lahti

	110
	 
	Denis King

	111
	 
	VACANT

	112
	 
	Andrea Harris

	113
	 
	Kim Klutterman

	114
	 
	Marcia Hirt-Reigeluth

	115
	 
	VACANT

	116
	 
	Bill & Debbie Spates

	117
	 
	JESSICA RIPPEON

	118
	 
	Kathy Heaton

	119
	 
	Ana & Jose Garcia

	120
	 
	VACANT

	121
	 
	SAMITHA NIX

	122
	 
	Daniel DePaz

	123
	 
	TIARAH HOLLAND

	124
	 
	Craig Tyler

	125
	 
	Brad Jurich

	126
	 
	Mike Sweeney

	127
	 
	VACANT

	128
	 
	Kelly and Brushaun Lagway

	129
	 
	Ernest Oyler

	130
	 
	Roman Laterza

	131
	 
	Lorren Kaberle

	132
	 
	Irwin Anderson

	133
	 
	CYNTHIA HAMILTON

	134
	 
	Ann Daniells

	135
	 
	Terry Ingham

	136
	 
	Brent Hill

	
			
	Unit
	 
	Name

	 
	 
	 

	Current/Notice Residents
	 
	 

	 
	 
	 

	137
	 
	Rodney Reed

	138
	 
	Kenneth Jacobs

	139
	 
	Shannon Solt

	140
	 
	Melissa Raymond

	141
	 
	Carly Wilding

	142
	 
	David Roser  2x

	143
	 
	Thomas Konrad

	144
	 
	Sara Brown

	145
	 
	Alexis Fissel

	146
	 
	Brooke Whetstone

	147
	 
	Aaron Whipp

	148
	 
	Michael Davidson

	149
	 
	Calvin Doudt

	150
	 
	Adam Lineberry

	151
	 
	Lisa Shriver

	152
	 
	Lacy Spielman

	153
	 
	Model

	154
	 
	Stacey Harmon

	155
	 
	Lauren Argenta

	156
	 
	Crystal Willoughby

	157
	 
	Lela Schreiber

	158
	 
	Patricia Mossburg

	159
	 
	Fancy Melton

	160
	 
	Jerry Hoffman

	161
	 
	Chris Powell

	162
	 
	Michael Lane

	163
	 
	Anders Detterberg

	164
	 
	MARCIA PATTERSON

	165
	 
	Elyse Steiner

	166
	 
	Priya Balasubramanian

	167
	 
	George Knizewski

	168
	 
	Shardae Chaconas

	169
	 
	Ashley Simon

	170
	 
	Alyssa Degroat

	171
	 
	Mathew Gilbride

	172
	 
	Darnell Broadnax

	173
	 
	William Conroy

	174
	 
	Sagar Kudchodkar

	175
	 
	Shannon Melia

	176
	 
	Eric and Ana Frazier

	 
	 
	 

	Rent Roll
	 
	 

	
			
	Unit
	 
	Name

	 
	 
	 

	Current/Notice Residents
	 
	 

	 
	 
	 

	177
	 
	Joseph Shaw

	178
	 
	Alyson Baker

	179
	 
	Ann Berkman

	180
	 
	Futurenet Group

	181
	 
	Heather Olsen

	182
	 
	Gary Williams

	183
	 
	Maxine Buige

	184
	 
	Roderick Calloway

	185
	 
	John Coffin Tufts University

	186
	 
	LaKeisha Baffoe-Bonnie

	187
	 
	Phyllis Adams

	188
	 
	Model

	189
	 
	Jason Centano

	190
	 
	Chih-Yuang (Edward) Chiang

	191
	 
	Theresa Carpenter

	192
	 
	Stephen Ford

	193
	 
	Marsha Kirdnual

	194
	 
	Shunsuke Tanigawa

	195
	 
	Jon Hershberger

	196
	 
	Margaret Bladen

	197
	 
	Alex Tosti  2x

	198
	 
	Ronald Cherry

	199
	 
	Carole Jones

	200
	 
	Renee Nirmal

	201
	 
	Jo Connour

	202
	 
	Tommy Clark

	203
	 
	Robert Williams

	204
	 
	VACANT

	205
	 
	Mark McKinney 2x

	206
	 
	Andrea Bickley

	207
	 
	Terry Nguyen

	208
	 
	Thomas Schneider

	209
	 
	John Grimley

	210
	 
	Paul Malatesta

	211
	 
	Trevor Lauer

	212
	 
	Bill Rose

	213
	 
	ROSEALEEN LOVEJOY

	214
	 
	Chase Mclendon

	215
	 
	Kelly Stiles

	216
	 
	Samantha Rose

	 
	 
	 

	Rent Roll
	 
	 

	
			
	Unit
	 
	Name

	 
	 
	 

	Current/Notice Residents
	 
	 

	 
	 
	 

	217
	 
	Harvey Clemons

	218
	 
	Karla Montenegro and Lauren

	219
	 
	Anthony Smothers

	220
	 
	Andrew Bailey

	221
	 
	Eileen Langstraat

	222
	 
	Jacqueline Wuertz

	223
	 
	Mark Cullins

	224
	 
	Jane Navarro

	225
	 
	Diana Clarke

	226
	 
	Yussef Laslami

	227
	 
	Brian Smith

	228
	 
	VACANT

	229
	 
	Jose Hakes

	230
	 
	Steven Brown

	231
	 
	Kimberly Drapeau

	232
	 
	Peter Henin

	233
	 
	Bruce Smith

	234
	 
	Jason Spence x2

	235
	 
	Brian Hoffman

	236
	 
	Jaime Arias

	237
	 
	Samantha Connors

	238
	 
	Kieran Lee

	239
	 
	David Prunner

	240
	 
	Eve Shafi

	241
	 
	Beverly Grubbs

	242
	 
	VACANT

	243
	 
	Rebecca Au

	244
	 
	Susan Smith  2x

	245
	 
	Sharon Zearfoss 2x

	246
	 
	Kelvin Milford

	247
	 
	Kara Thorndyke

	248
	 
	John Helm

	249
	 
	Lucas Barker

	250
	 
	Kevin Kundrat

	251
	 
	Aleshia Oland

	252
	 
	Bernice and Donald Wiles

	253
	 
	Jamel Sapia

	254
	 
	Norland James

	255
	 
	Todd Benedict

	256
	 
	Jim Chon

	 
	 
	 

	Rent Roll
	 
	 

	
			
	Unit
	 
	Name

	 
	 
	 

	Current/Notice Residents
	 
	 

	 
	 
	 

	257
	 
	Claire Deleage

	258
	 
	David Cao

	259
	 
	Jacqueline Coupe

	260
	 
	Ashley Daniel

	261
	 
	VACANT

	262
	 
	Amanda Johnson

	263
	 
	Alvin Badillo

	264
	 
	Mona Bernardo

	265
	 
	Joseph Ganely

	266
	 
	Ian Morrissey

	267
	 
	Mary Vaughn & James

	268
	 
	Tammy Bowers

	269
	 
	Thomas Hodges

	270
	 
	Valerie LaDue

	271
	 
	Rami Doueiri

	272
	 
	Scott Barrows

	273
	 
	Sheri Fake

	274
	 
	Difoliscia Hardy

	275
	 
	Frank mariona

	276
	 
	Sharon Boyd

	277
	 
	Shelitha Anderson - Simpson

	278
	 
	Beth Fogarty

	279
	 
	VACANT

	280
	 
	Donna Boyd

	281
	 
	Samuel Henry

	282
	 
	Charles Wallace

	283
	 
	Luis Estrella

	284
	 
	James Cannon

	285
	 
	Jennifer Tindale

	286
	 
	William Eason

	287
	 
	Andrew Wheelock

	288
	 
	VACANT

	289
	 
	Stephen Grate

	290
	 
	Belete Desimmie

	291
	 
	David Dixon

	292
	 
	Javier Folger

	293
	 
	Mathew Cotter

	294
	 
	Mike Tierney

	295
	 
	Ronnie Ann Powell

	296
	 
	Asser Elsamahy

	 
	 
	 

	Rent Roll
	 
	 

	
			
	Unit
	 
	Name

	 
	 
	 

	Current/Notice Residents
	 
	 

	 
	 
	 

	297
	 
	Thomas Momberg

	298
	 
	Lindsay Linthicum

	299
	 
	Travis Brown

	300
	 
	Ryan Link

	301
	 
	VACANT

	302
	 
	VACANT

	303
	 
	Roberto Camerieri

	304
	 
	Dave and Sally Dolch

	305
	 
	Abdulelah Almazrua

	306
	 
	John Yeager

	307
	 
	Kevin Miller

	308
	 
	James Hopkins

	309
	 
	Erkan Kris

	310
	 
	Ann Fritton

	311
	 
	Rebecca Hanna

	312
	 
	Pearleen Butler

	313
	 
	Kathi Morgan

	314
	 
	Hannah Barton

	315
	 
	Deborah Parsons

	316
	 
	Greg St. Louis

	317
	 
	Tom Boone

	318
	 
	VACANT

	319
	 
	Brenna Hill

	320
	 
	Abdullah Ismaeel

	321
	 
	Miranda Hughes

	322
	 
	Ron Pryber

	323
	 
	Suzanne Williams

	324
	 
	Charles Gregory

	325
	 
	Donna Napolitano

	326
	 
	Roberta Richard

	327
	 
	Adam Nack

	328
	 
	Ouahid Abdou

	329
	 
	Holly Hartung

	330
	 
	Linyi Wei

	331
	 
	Jessie McGihon

	332
	 
	Ariel Lee

	333
	 
	VACANT

	334
	 
	VACANT

	335
	 
	Kitty Poole

	336
	 
	Katie Reidy

	 
	 
	 

	Rent Roll
	 
	 

	
			
	Unit
	 
	Name

	 
	 
	 

	Current/Notice Residents
	 
	 

	 
	 
	 

	337
	 
	Richard Stewart

	338
	 
	Joseph Thomas

	339
	 
	Douglas Delareza

	340
	 
	Kelly Vaughn

	341
	 
	Cynthia Allen x2

	342
	 
	Kyndal & Kyle Cook

	343
	 
	Wei Lu

	344
	 
	Rawle Tucker

	345
	 
	Heather Nichols

	346
	 
	Anny Sarmieuto

	347
	 
	Carolyn Keeton

	348
	 
	Devon Tucker

	349
	 
	Michael Mills

	350
	 
	VACANT

	351
	 
	Ryan Tabor

	352
	 
	Caroline Eick

	353
	 
	Ryan Gregory

	354
	 
	Ryan Jakubco

	355
	 
	Samantha Hilderbrand 2x

	356
	 
	Marshall Pye

	357
	 
	Glen Putnam

	358
	 
	Anthony Fazio

	359
	 
	Debra O'Dell

	360
	 
	Kenneth Fontaine

	361
	 
	Dilip Patel

	362
	 
	William Stover

	363
	 
	Robin Snoots

	364
	 
	Mary Scibelli

	365
	 
	Mark Ragonesi

	366
	 
	VACANT

	367
	 
	Dillon Trullson

	368
	 
	Richard Sheffield

	369
	 
	Lisa Mayer

	370
	 
	Esther Lewis-Fiammetta

	371
	 
	Hwang Soon-Kyung

	372
	 
	Emmet Ellis

	373
	 
	Ken Ishikawa

	374
	 
	VACANT

	375
	 
	Erin Sutton

	376
	 
	Jessica Rose

	 
	 
	 

	Rent Roll
	 
	 

	
			
	Unit
	 
	Name

	 
	 
	 

	Current/Notice Residents
	 
	 

	 
	 
	 

	377
	 
	Sarah Palazzolo Packard

	378
	 
	Amit Adhikari

	379
	 
	Laila Elisa Delviks

	380
	 
	Thomas Whitman

	381
	 
	Kerri Boyd

	382
	 
	Christine Hollingshead

	383
	 
	Joe Ferrante

	384
	 
	Kenzie Strickland

	385
	 
	Davis Breyer

	386
	 
	Martin Engman

	387
	 
	George Klisas

	388
	 
	Maxx Kulick

	389
	 
	VACANT

	390
	 
	Melvin Braswell

	391
	 
	Martha (Paige) Hillard

	392
	 
	Brenda Horner

	393
	 
	Steve Hartzell

	394
	 
	Todd Lynn

	395
	 
	Linda Loun 

	396
	 
	Tamara Ruggiero

	397
	 
	Tyrell Stewart

	398
	 
	Ramon Sanchez

	399
	 
	VACANT

	400
	 
	Charlene Gearhart

	401
	 
	Dale Moncer

	402
	 
	Amardeep Angroola

	403
	 
	Kimberly Bolum

	404
	 
	Chad Green

	405
	 
	VACANT

	406
	 
	Patricia Harley

	407
	 
	Maurice O'Neal

	408
	 
	VACANT

	409
	 
	Susan Jordan

	410
	 
	Cheryl Benedict

	411
	 
	Henrietta Koenig

	412
	 
	Mathew (Matt) Kio

	413
	 
	Natalie Wallingford

	414
	 
	VACANT

	Future
	 
	 

	111
	 
	David Beith

	 
	 
	 

	Rent Roll
	 
	 

	
					
	Unit
	 
	Name
	 
	 

	 
	 
	 
	 
	 

	Future
	 
	 
	 
	 

	 
	 
	 
	 
	 

	127
	 
	Kamesha Haywood
	 
	 

	178
	 
	Jason Trent
	 
	 

	204
	 
	Mary Vaughan
	 
	 

	264
	 
	Lela Schreiber
	 
	 

	302
	 
	Rawle Tucker
	 
	 

	333
	 
	Alexandra Kent
	 
	 

	334
	 
	Brian Frano
	 
	 

	350
	 
	Ryan Harvey
	 
	 

	366
	 
	David Van Duzer
	 
	 

	389
	 
	Rita Atwell
	 
	 

	408
	 
	Katie Gaudino
	 
	 

	 
	 
	 
	 
	 

	 
	 
	Market
Rent
	Actual
Rent

	 
	 
	 
	 
	 

	Current/Notice Res.
	 
	 
	368,706.00

	 
	 
	 
	 
	 

	Future
	 
	 
	 
	0.00

	 
	 
	 
	 
	 

	Occupied Units
	 
	376,400.00
	 

	 
	 
	 
	 
	 

	Total Non Rev Units
	 
	2,555.00
	 

	Total Vacant Units
	 
	30,570.00
	 

	 
	 
	409,525.00
	#####

	Totals:
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Rent Roll
	 
	 
	 
	 

EXHIBIT K
(List of Contracts)

	
			
	Vendor Name
	Service
	30 Day Out

	Carpet Time
	Turnover carpet and vinyl replacement
	Yes

	Metro Grounds Maintenance
	Landscape and Snow Removal
	Yes

	J&J Trash Inc
	Trash and recycle removal
	Yes

	Continental Pool Inc
	Pool management
	Yes

	Javy and Candy Cleaning
	Turnover cleaning and groundskeeper
	Yes

	Melendez Company LLC
	Turnover apartment painting
	Yes

	Easton Leasing
	Copier
	Yes

	Pitney Bowes
	Postage machine
	Yes

	Guardian Alarms
	Cable revenue
	Yes

	 
	Quarterly fitness equipment maintenance
	Yes

	 
	Pest Control
	Yes

	 
	Clubhouse and fire panel monitoring
	Yes

**All marketing sources and advertising are under the Bozzuto umbrella contract with a 30 day out.

EXHIBIT L
GENERAL MATERIALS:
		
	1.00
	FINANCIAL INFORMATION

	
					
	o
	1.01
	

	 
	Operating statements for the last three (3) years

	o
	1.02
	

	 
	[Intentionally deleted]

	o
	1.03
	

	 
	Financial statements for seller, including balance sheets for the last two (2) years

	o
	1.04
	

	 
	Current year's leasing and management reports

	o
	1.05
	

	 
	Certified rent roll (current month with lease expiration dates)

	o
	1.06
	

	 
	Other income and rental concessions

	o
	1.07
	

	 
	Current and historical property tax bills and assessments

	o
	1.08
	

	 
	Service agreements and maintenance contracts

	o
	1.09
	

	 
	Brokerage, management, and leasing contracts

	o
	1.10
	

	 
	List of employees with salaries, date of hire and bonus arrangements (if any)

	o
	1.11
	

	 
	Current insurance certificates

	o
	1.12
	

	 
	[Intentionally deleted]

	o
	1.13
	

	 
	Schedule of historical capital expenditures

	o
	1.14
	

	 
	[Intentionally deleted]

	o
	1.15
	

	 
	Tenant Leases and Tenant Files

		
	2.00
	PROPERTY/PHYSICAL INFORMATION 

	
					
	o
	2.01
	

	 
	Site plans (with dimensions) and unit floor plans

	o
	2.02
	

	 
	[Intentionally deleted]

	o
	2.03
	

	 
	Location maps, aerial and building photographs, if any

	o
	2.04
	

	 
	Phase I Environmental report

	o
	2.05
	

	 
	[Intentionally deleted]

	o
	2.06
	

	 
	[Intentionally deleted]

	o
	2.07
	

	 
	[Intentionally deleted]

	o
	2.08
	

	 
	Pest control/termite report (include termite bonds if applicable)

	o
	2.09
	

	 
	Certificate of occupancy (for each building if issued separately)

	o
	2.10
	

	 
	[Intentionally deleted]

	o
	2.11
	

	 
	[Intentionally deleted]

	o
	2.12
	

	 
	Current utility bills

	o
	2.13
	

	 
	Licenses (business, pool and spa, etc.) and use permits

	o
	2.14
	

	 
	[Intentionally deleted]

	o
	2.15
	

	 
	[Intentionally deleted]

	o
	2.16
	

	 
	All Contracts

		
	3.00
	TITLE & SURVEY INFORMATION 

	
					
	o
	3.01
	

	 
	Preliminary title report/title commitment with supporting exception documents and legal description

	o
	3.02
	

	 
	Existing as-built A.L.T.A. survey

	o
	3.03
	

	 
	[Intentionally deleted]

	o
	3.04
	

	 
	[Intentionally deleted]

	o
	3.05
	

	 
	[Intentionally deleted]

	o
	3.06
	

	 
	[Intentionally deleted]

1

		
	4.00
	OTHER INFORMATION 

	
					
	o
	4.01
	

	 
	[Intentionally deleted]

	o
	4.02
	

	 
	Standard lease form

	o
	4.03
	

	 
	Itemized inventory of personal property

	o
	4.04
	

	 
	Leasing brochures and marketing information

	o
	4.05
	

	 
	Offering package

	o 
	4.06
	

	 
	[Intentionally deleted]

	o
	4.07
	

	 
	[Intentionally deleted]

DOCUMENTS REQUIRED FOR 3-14 AUDIT:
		
	5.00
	BACKGROUND QUESTIONS (Please provide written answers):

	
					
	o
	5.01
	

	 
	What basis of accounting is used:  Cash, Accrual, GAAP?  GAAP is preferred.

	o
	5.02
	

	 
	Have property financial statements been audited?

	o
	5.03
	

	 
	If audited by what firm?

	o
	5.04
	

	 
	Have audits been performed for the most recent full calendar year?

		
	6.00
	GENERAL 

	
					
	o
	6.01
	

	 
	Property operating statements for the most recent full calendar year and for the current year to date, with break out in quarterly intervals.   Example:  for a property to be purchased 4/15/13,
o    need statements for quarter ended 3/31/12, 6/30/12, 9/30/12, 12/31/12, 3/31/13
o    if not included on quarterly reports, need YTD 12/31/12
o    need YTD 2013  
o    post closing, will need income statement from the last full quarter prior to  closing date   

	o
	6.02
	

	 
	Trial balance
o    for most recent full calendar year
o    as of the current date

	o
	6.03
	

	 
	General ledger (all activity for designated period, all general ledger accounts)
o    for most recent full calendar year
o    for the current year to date 

	o
	6.04
	

	 
	Bank Statements
o    as of prior year end (12/31/12 for 4/15/13 acquisition)
o    2 months of current year (01/31/13 and 02/28/12)
o    most recent quarter end (3/31/13)

		
	7.00
	REVENUES

	
					
	o
	7.01
	

	 
	Access to the following for the most recent full calendar year (e.g. 2012) and for the current year to date (e.g. 2013):   
o    Lease files  
o    Ledgers for residents occupying units 
o    Detailed receivables listing for all delinquent and prepaid 
o    Listing of write-offs
o    Access to support for tenant rent payments (i.e. check copies)
o    Schedule of misc. revenues (parking, vending, etc.) and related support (agreements, copy of receipts, etc.)

2

	
					
	 
	 
	 
	o    Listing of write-offs
o    Access to support for tenant rent payments (i.e. check copies)
o    Schedule of misc. revenues (parking, vending, etc.) and related support (agreements, copy of receipts, etc.)

	o
	7.02
	

	 
	Rent roll reflecting beginning & ending term, rental rate & any additional charges provided per terms of lease, for each current resident

	o
	7.03
	

	 
	Year end Rent Rolls for 2009, 2010, 2011, 2012

		
	8.00
	EXPENSES 

	
					
	o
	8.01
	

	 
	Access to the following for the most recent full calendar year and for the current year to date:
o    Invoices
o    Check copies
o    Property tax bills 
o    Insurance statements 
o    Management fee agreement/calculation
o    Utility bills
o    Service contracts

	o
	8.02
	

	 
	Check register for current year

Note:  support should cover entire prior and current year - e.g.  if insurance policy is from July-June and acquisition date is 4/15/13, include policy for July 2011-June 2012, July 2012-June 2013.
		
	9.00
	POST-CLOSING

	
					
	o
	9.01
	

	 
	YTD income statement for the current year (to acquisition date)

	o
	9.02
	

	 
	Trial balance as of the date of sale

	o
	9.03
	

	 
	YTD general ledger for the current year (to acquisition date)

3

EXHIBIT M
[Real Estate Transfer Disclosure Statement]

4

REAL ESTATE TRANSFER DISCLOSURE STATEMENT

THIS DISCLOSURE STATEMENT CONCERNS THE REAL PROPERTY LOCATED IN THE COUNTY OF FEDERICK, STATE OF MARYLAND, DESCRIBED AS ______________________________________________________, THIS STATEMENT IS A DISCLOSURE OF THE EXISTENCE OF THE FEDERICK COUNTY RIGHT TO FARM ORDINANCE IN COMPLIANCE WITH FEDERICK COUNTY ORDINANCE NO. ______________ (THE FEDERICK COUNTY RIGHT TO FARM ORDINANCE).

SELLER'S INFORMATION

THE FOLLOWING ARE REPRENTATIONS MADE BY THE SELLER AND ARE NOT THE REPRESENTATIONS OF THE AGENT(S), IF ANY.  THIS INFORMATION IS A DISCLOSURE AND IS NOT INTENDED TO BE PART OF ANY CONTRACT BETWEEN THE BUYER AND SELLER.

FREDERICK COUNTY ALLOWS AGRICULTURAL OPERATIONS (as defined in the Federick County Right to Farm Ordinance) WITHIN THE COUNTY.  You may be subject to inconveniences or discomforts arising from such operations, including, but not limited to, noise, odors, fumes, dust, flies, the operation of machinery of any kind during any 24-hour period (including aircraft), vibration, the storage and disposal of manure, and the application by spraying or otherwise of chemical fertilizers, soil amendments, and pesticides.  Federick County has determined that inconveniences or discomforts associated with such agricultural operations shall not be considered to be an interference with reasonable use and enjoyment of land, if such operations are conducted in accordance with generally accepted agricultural management practices.  Federick County has established a reconciliation committee to assist in the resolution of disputes which might arise between persons in this County regarding whether agricultural operations conducted on agricultural lands are causing an interference with the reasonable use and enjoyment of land or personnel well-being and whether those operations are being conducted in accordance with generally accepted agricultural practices.  If you have any question concerning this policy or the reconciliation committee, please contact the Federick County Planning Department for additional information.

		
	Seller:
	___________________________________    Date:    _________________________________

		
	Seller:
	___________________________________    Date:    _________________________________

I/WE ACKNOWLEDGE RECEIPT OF A COPY OF THIS STATEMENT:

		
	Buyer:
	___________________________________    Date:    _________________________________

		
	Buyer:
	___________________________________    Date:    _________________________________

IF YOU DESIRE LEGAL ADVICE, CONSULT YOUR ATTORNEY.

EXHIBIT N
[City of Frederick Disclosure Statement]

5

THE CITY OF FEDERICK DISCLOSURE STATEMENT

The City of Federick Disclosure Statement

THIS DISCLOSURE STATEMENT CONCERNS REAL PROPERTY LOCATED WITHIN THE CITY OF FEDERICK, STATE OF MARYLAND, AS DESCRIBED IN THE CONTRACT TO WHICH THIS DISCLOSUREES STAEMENTS IS ATTACHED.  THIS STATEMENT IS A DISCLOSURE OF THE EXISTENCE OF THE CITY OF FEDERICK DISCLOSURE UPON SALE OF REAL PROPERTY ORDINANCE.  THIS ORDINANCE AFFORDS A BUYER THE RIGHT TO REVIEW LAND USE DOCUMENTS, AND TO REQUEST A REVIEW PERIOD OR TO WAIVE SUCH REVIEW PERIOD.  SEE ORDINANCE FOR COMPLETE DETAILS.

THE FOLLOWING ARE REPRESENTATIONS MADE BY THE BUYER IN A CONTRACT OF SALE OR REAL PROPERTY WITHIN THE CITY OF FEDERICK AND ARE NOT THE REPRESENTATIONS OF THE AGENT(S), IF ANY.

BUYER ACKNOWLEDGES THAT IT IS BUYER'S RIGHT TO REVIEW THE APPROPRIATE MAPS AND PLANS  AT THE CITY OF FEDERICK DEPARTMENT OF PLANNING FOR INFORMATION ABOUT THE FEDERICK CITY AIRPORT, HISTORIC DISTRICT DELINEATION, ANY LAND USES, PLANNED NEIGHBORHOOD DEVELOPMENTS, ROADS, HIGHWAYS, PARKS AND OTHER PUBLIC FACILITIES AFFECTING PROPERTY, AND ANY AMENDMENTS THERETO, THE CITY OF FEDERICK ZONING ORDINANCE AND ANY OFFICIAL SUBMITTAL FOR DEVELOPMENT REVIEW WITH THE DEPARTMENT OF PLANNING.  BUYER FURTHER ACKNOWLEDGES THAT IT IS THE BUYER'S RESPONSIBILITY TO DETERMINE WHETHER THE BUYER'S PROPERTY LIES WITHIN THAT AREA OF THE CITY OF FEDERICK DESIGNATED AS THE FEDERICK HISTORIC DISTRICT AND TO COMPLY WITH ANY STATE AND LOCAL LAWS PERTAINING AS A RESULT OF SUCH DESIGNATION.

BUYER HEREBY ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE ABOVE DISCLOSURE AND REQUESTS A PERIOD OF TIME TO REVIEW THE ABOUVE STATED DOCUMENTS AS PER THE ATTACHED ADDENDUM:

		
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	BUYER'S SIGNATURE
	DATE

BUYER HEREBY ACKNOWLEDGES HAVING READ AND UNDERSTOOD THE ABOVE DISCLOSURE AND WAIVES THE REVIEW PERIOD:

		
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	BUYER'S SIGNATURE
	DATE

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