Document:

Advisory Agreement

 Exhibit 10.3 
 ADVISORY AGREEMENT 
 between 

KBS LEGACY PARTNERS APARTMENT REIT, INC. 
 and 
 KBS CAPITAL ADVISORS LLC 

January 25, 2013 

 TABLE OF CONTENTS 

 

					
		  	 	Page	  
	ARTICLE 1 – DEFINITIONS	  	 	1	  
	ARTICLE 2 – APPOINTMENT	  	 	8	  
	ARTICLE 3 – DUTIES OF THE ADVISOR	  	 	8	  
	   3.01 Organizational and Offering Services
	  	 	9	  
	   3.02 Acquisition Services
	  	 	9	  
	   3.03 Asset Management Services
	  	 	10	  
	   3.04 Stockholder Services
	  	 	12	  
	   3.05 Other Services
	  	 	12	  
	ARTICLE 4 – AUTHORITY OF ADVISOR	  	 	13	  
	   4.01 General
	  	 	13	  
	   4.02 Powers of the Advisor
	  	 	13	  
	   4.03 Approval by the Board
	  	 	13	  
	   4.04 Modification or Revocation of Authority of Advisor
	  	 	13	  
	ARTICLE 5 – BANK ACCOUNTS	  	 	13	  
	ARTICLE 6 – RECORDS AND FINANCIAL STATEMENTS	  	 	14	  
	ARTICLE 7 – LIMITATION ON ACTIVITIES	  	 	14	  
	ARTICLE 8 – FEES	  	 	14	  
	   8.01 Acquisition Advisory Fees
	  	 	14	  
	   8.02 Development and Construction Fees
	  	 	15	  
	   8.03 Asset Management Fees
	  	 	15	  
	   8.04 Disposition Fees
	  	 	17	  
	   8.05 Subscription Processing Fee
	  	 	17	  
	   8.06 Property Management Fee
	  	 	17	  
	   8.07 Subordinated Share of Cash Flows
	  	 	18	  
	   8.08 Subordinated Incentive Fee
	  	 	18	  
	   8.09 Changes to Fee Structure
	  	 	19	  
	ARTICLE 9 – EXPENSES	  	 	19	  
	   9.01 General
	  	 	19	  
	   9.02 Timing of and Limitations on Reimbursements
	  	 	20	  
	ARTICLE 10 – VOTING AGREEMENT	  	 	21	  
	ARTICLE 11 – RELATIONSHIP OF ADVISOR AND COMPANY; OTHER	  			
	ACTIVITIES OF THE ADVISOR	  	 	21	  
	   11.01 Relationship
	  	 	21	  
	   11.02 Time Commitment
	  	 	22	  
	   11.03 Investment Opportunities and Allocation
	  	 	22	  
	ARTICLE 12 – THE KBS NAME	  	 	22	  
	ARTICLE 13 – TERM AND TERMINATION OF THE AGREEMENT	  	 	23	  
	   13.01 Term
	  	 	23	  
	   13.02 Termination by Either Party
	  	 	23	  
	   13.03 Payments on Termination and Survival of Certain Rights and Obligations
	  	 	23	  
	ARTICLE 14 – ASSIGNMENT	  	 	24	  

  
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	ARTICLE 15 – INDEMNIFICATION AND LIMITATION OF LIABILITY	  	24
	   15.01 Indemnification
	  	24
	   15.02 Limitation on Indemnification
	  	24
	   15.03 Limitation on Payment of Expenses
	  	25
	ARTICLE 16 – MISCELLANEOUS	  	25
	   16.01 Notices
	  	25
	   16.02 Modification
	  	26
	   16.03 Severability
	  	26
	   16.04 Construction
	  	26
	   16.05 Entire Agreement
	  	26
	   16.06 Waiver
	  	26
	   16.07 Gender
	  	26
	   16.08 Titles Not to Affect Interpretation
	  	26
	   16.09 Counterparts
	  	26

  
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 ADVISORY AGREEMENT 

This Advisory Agreement, dated as of January 25, 2013 (the “Agreement”), is between KBS Legacy Partners Apartment
REIT, Inc., a Maryland corporation (the “Company”), and KBS Capital Advisors LLC, a Delaware limited liability company (the “Advisor”). 
 W I T N E S S E T H 
 WHEREAS, the Company desires to avail itself of the
knowledge, experience, sources of information, advice, assistance and certain facilities available to the Advisor and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision
of, the board of directors of the Company (the “Board”), all as provided herein; and 
 WHEREAS, the Advisor is
willing to undertake to render such services, subject to the supervision of the Board, on the terms and conditions hereinafter set forth. 
 NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows: 

ARTICLE 1 

DEFINITIONS 
 The following defined terms used in this Agreement shall have the meanings specified below: 
 “Acquisition Advisory Fees” shall have the meaning set forth in Section 8.01. 
 “Acquisition Expenses” means any and all expenses, excluding the fee payable to the Advisor pursuant to Section 8.01, incurred by the Company, the Advisor or any Affiliate of either
in connection with the selection, acquisition or development of any property or other potential investment, whether or not acquired, as applicable, including, without limitation, legal fees and expenses, travel and communications expenses, costs of
appraisals, nonrefundable option payments on properties or other investments not acquired, accounting fees and expenses, title insurance premiums and miscellaneous expenses related to selection and acquisition of properties, whether or not acquired.

 “Acquisition Fees” means the fee payable to the Advisor pursuant to Section 8.01 plus all other fees
and commissions, excluding Acquisition Expenses, paid by any Person to any Person in connection with making or investing in any Property or other Permitted Investment or the purchase, development or construction of any Property by the Company.
Included in the computation of such fees or commissions shall be any real estate commission, selection fee, Development Fee, Construction Fee, nonrecurring management fee, loan fees or points or any fee of a similar nature, however designated.
Excluded shall be Development Fees and Construction Fees paid to Persons not Affiliated with the Advisor in connection with the actual development and construction of a Property. 

  
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 “Advisor” means (i) KBS Capital Advisors LLC, a Delaware limited
liability company, or (ii) any successor advisor to the Company. 
 “Affiliate or Affiliated” An Affiliate
of another Person includes any of the following: (i) any Person directly or indirectly controlling, controlled by, or under common control with such other Person; (ii) any Person directly or indirectly owning, controlling, or holding with
the power to vote 10% or more of the outstanding voting securities of such other Person; (iii) any legal entity for which such Person acts as an executive officer, director, trustee, or general partner; (iv) any Person 10% or more of whose
outstanding voting securities are directly or indirectly owned, controlled, or held, with power to vote, by such other Person; and (v) any executive officer, director, trustee, or general partner of such other Person. An entity shall not be
deemed to control or be under common control with an Advisor-sponsored program unless (i) the entity owns 10% or more of the voting equity interests of such program or (ii) a majority of the board of directors (or equivalent governing
body) of such program is composed of Affiliates of the entity. 
 “Appraised Value” means the value according
to an appraisal made by an Independent Appraiser. 
 “Asset Management Fee” shall have the meaning set forth in
Section 8.03. 
 “Average Invested Assets” means, for a specified period, the average of the aggregate
book value of the assets of the Company invested, directly or indirectly, in Properties and other Permitted Investments secured by real estate before reserves for depreciation or bad debts or other similar non-cash reserves, computed by taking the
average of such values at the end of each month during such period. 
 “Board” means the board of directors of
the Company, as of any particular time. 
 “Bylaws” means the bylaws of the Company, as amended from time to
time. 
 “Cash from Financings” means the net cash proceeds realized by the Company from the financing of
Properties or other Permitted Investments or from the refinancing of any Company indebtedness (after deduction of all expenses incurred in connection therewith). 
 “Cash from Sales and Settlements” means the net cash proceeds realized by the Company (i) from the sale, exchange or other disposition of any of its assets or any portion thereof
after deduction of all expenses incurred in connection therewith including, without limitation, Disposition Fees and (ii) from the prepayment, maturity, workout or other settlement of any other Permitted Investment or portion thereof after
deduction of all expenses incurred in connection therewith. In the case of a transaction described in clause (i) (C) of the definition of “Sale” and (i)(B) of the definition of “Settlement,” Cash from Sales and
Settlements means the proceeds of any such transaction actually distributed to the Company from the Joint Venture or partnership. Cash from Sales and Settlements shall not include Cash from Financings. 

“Cash from Sales, Settlements and Financings” means the total sum of Cash from Sales and Settlements and Cash from
Financings. 

  
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 “Charter” means the articles of incorporation of the Company, as amended
from time to time. 
 “Code” means the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect
from time to time. 
 “Company” means KBS Legacy Partners Apartment REIT, Inc., a corporation organized under
the laws of the State of Maryland. 
 “Competitive Real Estate Commission” means a real estate or brokerage
commission for the purchase or sale of property that is reasonable, customary, and competitive in light of the size, type, and location of the property. 
 “Conflicts Committee” shall have the meaning set forth in the Company’s Charter. 
 “Construction Fee” means a fee or other remuneration for acting as general contractor and/or construction manager to construct improvements, supervise and coordinate projects or to
provide major repairs or rehabilitation on a Property, either initially or at a later date payable pursuant to Section 8.02. 
 “Contract Sales Price” means the total gross consideration received by the Company for the sale of a Property or other Permitted Investment. 

“Cost of Real Estate Investments” means the sum of (i) with respect to Properties wholly owned, directly or
indirectly, by the Company, the amount actually paid or allocated to fund the acquisition, development, construction or improvement of Properties, including expenses related thereto (but excluding any Acquisition Fees related thereto), plus the
amount of any outstanding debt attributable to such Properties and the budgeted capital improvement costs, and (ii) in the case of Properties owned by any Joint Venture or partnership in which the Company or the Partnership is, directly or
indirectly, a co-venturer or a partner, the portion of the amount actually paid or allocated to fund the acquisition, development, construction or improvement of Properties, including expenses related thereto (but excluding any Acquisition Fees
related thereto), plus the amount of any outstanding debt associated with such Properties that is attributable to the Company’s investment in the Joint Venture or partnership and the budgeted capital improvement costs. 

“Cost of other Permitted Investments” means the sum of the cost of all Permitted Investments held, directly or
indirectly, by the Company, calculated each month on an ongoing basis, and calculated as follows for each investment: the lesser of (i) the amount actually paid or allocated to acquire or fund the Permitted Investment, including expenses
related thereto (but excluding any Acquisition Fees related thereto) and the amount of any debt associated with or used to acquire or fund such investment and (ii) the outstanding principal amount of such Permitted Investment, including
expenses related to the acquisition or funding of such investment (but excluding any Acquisition Fees related thereto), as of the time of calculation. With respect to any Permitted Investment held by the Company through a Joint Venture or

  
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partnership of which it is, directly or indirectly, a co-venturer or partner, such amount shall be the Company’s proportionate share thereof. 

“Dealer Manager” means (i) KBS Capital Markets Group LLC, a Delaware limited liability company, or (ii) any
successor dealer manager to the Company. 
 “Development Fee” means a fee for the packaging of a Property,
including negotiating and approving plans, and undertaking to assist in obtaining zoning and necessary variances and necessary financing for the Property, either initially or at a later date payable pursuant to Section 8.02. 

“Director” means a member of the board of directors of the Company. 

“Disposition Fee” shall have the meaning set forth in Section 8.04. 

“Distributions” means any distributions of money or other property by the Company to owners of Shares, including
distributions that may constitute a return of capital for federal income tax purposes. 
 “GAAP” means
accounting principals generally accepted in the United States. 
 “Gross Proceeds” means the aggregate
purchase price of all Shares sold for the account of the Company through an Offering, without deduction for Organization and Offering Expenses.  
 “Independent Appraiser” means a person or entity with no material current or prior business or personal relationship with the Advisor or the Directors, who is engaged to a substantial
extent in the business of rendering opinions regarding the value of assets of the type held by the Company, and who is a qualified appraiser of real estate as determined by the Board. Membership in a nationally recognized appraisal society such as
the American Institute of Real Estate Appraisers (M.A.I.) or the Society of Real Estate Appraisers (S.R.E.A.) shall be conclusive evidence of such qualification. 
 “Initial Public Offering” means the initial public offering of Shares registered on Registration Statement No. 333-161449 on Form S-11. 

“Invested Capital” means the amount calculated by multiplying the total number of Shares purchased by Stockholders by
the issue price, reduced by any amounts paid by the Company to repurchase Shares pursuant to the Company’s plan for redemption of Shares. 
 “Joint Venture” means any joint venture, limited liability company or other Affiliate of the Company that owns, in whole or in part, on behalf of the Company any Properties or other
Permitted Investments. 
 “Listed” or “Listing” shall have the meaning set forth in the
Company’s Charter. 
 “Market Value” shall have the meaning set forth in Section 8.08. 

  
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 “NASAA Guidelines” means the NASAA Statement of Policy Regarding Real
Estate Investment Trusts as in effect on the date hereof. 
 “Net Income” means, for any period, the total
revenues applicable to such period, less the total expenses applicable to such period excluding additions to reserves for depreciation, bad debts or other similar non-cash reserves; provided, however, Net Income for purposes of calculating total
allowable Operating Expenses (as defined herein) shall exclude the gain from the sale of the Company’s assets. 

“Offering” means any offering of Shares that is registered with the SEC, excluding Shares offered under any employee
benefit plan. 
 “Operating Cash Flow” means Operating Revenue Cash Flows minus the sum of (i) Operating
Expenses, (ii) all principal and interest payments on indebtedness and other sums paid to lenders, (iii) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage,
listing, registration, and other fees, printing and other such expenses and tax incurred in connection with the issuance, distribution, transfer, registration and Listing of the Shares, (iv) taxes, (v) incentive fees paid in compliance
with Section IV.F. of the NASAA Guidelines and (vi) Acquisition Fees, Acquisition Expenses, real estate commissions on the resale of real property, and other expenses connected with the acquisition, disposition, and ownership of real estate
interests, mortgage loans or other property (other than commissions on the sale of assets other than real property), such as the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property. 

“Operating Expenses” means all costs and expenses incurred by the Company, as determined under GAAP, that in any way are
related to the operation of the Company or to Company business, including fees paid to the Advisor, but excluding (i) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage,
listing, registration, and other fees, printing and other such expenses and tax incurred in connection with the issuance, distribution, transfer, registration and Listing of the Shares, (ii) interest payments, (iii) taxes,
(iv) non-cash expenditures such as depreciation, amortization and bad loan reserves, (v) incentive fees paid in compliance with Section IV.F. of the NASAA Guidelines and (vi) Acquisition Fees, Acquisition Expenses, real estate
commissions on the resale of real property, and other expenses connected with the acquisition, disposition, and ownership of real estate interests, mortgage loans or other property (other than commissions on the sale of assets other than real
property), such as the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property. 
 “Operating Revenue Cash Flows” means the Company’s cash flow from ownership and/or operation of (i) Properties, (ii) Permitted Investments, (iv) short-term
investments, and (v) interests in Properties and Permitted Investments owned by any Joint Venture or any partnership in which the Company or the Partnership is, directly or indirectly, a co-venturer or partner. 

“Organization and Offering Expenses” means all expenses incurred by or on behalf of the Company in connection with or
preparing the Company for registration of and subsequently offering and distributing its Shares to the public, whether incurred before or after the date of this Agreement, which may include but are not limited to, total underwriting and brokerage
discounts 

  
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and commissions (including fees of the underwriters’ attorneys); any expense allowance granted by the Company to the underwriter or any reimbursement of expenses of the underwriter by the
Company; expenses for printing, engraving and mailing; compensation of employees while engaged in sales activity; charges of transfer agents, registrars, trustees, escrow holders, depositaries and experts; and expenses of qualification of the sale
of the securities under Federal and State laws, including taxes and fees, accountants’ and attorneys’ fees. 

“Partnership” means KBS Legacy Partners Limited Partnership, a Delaware limited partnership formed to own and operate
Properties and other Permitted Investments on behalf of the Company. 
 “Permitted Investments” means all
investments (other than Properties and short-term investments acquired for purposes of cash management) in which the Company may acquire an interest, either directly or indirectly, including through ownership interests in a Joint Venture or
partnership, pursuant to the Charter, Bylaws and the investment objectives and policies adopted by the Board from time to time, including, without limitation, mortgage loans and other types of debt financing investments. 

“Person” means an individual, corporation, partnership, estate, trust (including a trust qualified under
Section 401(a) or 501(c) (17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of
Section 509(a) of the Code, joint stock company or other entity, or any government or any agency or political subdivision thereof, and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended. 
 “Property” or “Properties” means any real property or properties
transferred or conveyed to the Company or the Partnership, either directly or indirectly, including through ownership interests in a Joint Venture or partnership in which the Company is, directly or indirectly, a co-venturer or partner. 

“Property Manager” means an entity that has been retained to perform and carry out at one or more of the Properties
property management services. 
 “Registration Statement” means the registration statement filed by the Company
with the SEC on Form S-11 (Reg. No. 333-161449), as amended from time to time, in connection with the Initial Public Offering. 
 “REIT” means a “real estate investment trust” under Sections 856 through 860 of the Code. 
 “Sale” means (i) any transaction or series of transactions whereby: (A) the Company or the Partnership sells, grants, transfers, conveys, or relinquishes its ownership of any
Property or other Permitted Investment or portion thereof, including the transfer of any Property that is the subject of a ground lease, including any event with respect to any Property or other Permitted Investment that gives rise to a significant
amount of insurance proceeds or condemnation awards; (B) the Company or the Partnership sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Company or the Partnership in any Joint

  
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Venture or any partnership in which it is, directly or indirectly, a co-venturer or partner; or (C) any Joint Venture or any partnership in which the Company or the Partnership is, directly
or indirectly, a co-venturer or partner, sells, grants, transfers, conveys, or relinquishes its ownership of any Property or other Permitted Investment or portion thereof, including any event with respect to any Property or other Permitted
Investment that gives rise to insurance claims or condemnation awards, but (ii) not including any transaction or series of transactions specified in clause (i) (A), (i) (B), or (i) (C) above in which the proceeds of such
transaction or series of transactions are reinvested in one or more Properties or other Permitted Investments within 180 days thereafter. 
 “SEC” means the United States Securities and Exchange Commission. 

“Settlement” means (i) the prepayment, maturity, workout or other settlement of any Permitted Investment or portion
thereof owned, directly or indirectly, by (A) the Company or the Partnership or (B) any Joint Venture or any partnership in which the Company or the Partnership is, directly or indirectly, a partner, but (ii) not including any
transaction or series of transactions specified in clause (i) (A) or (i) (B) above in which the proceeds of such prepayment, maturity, workout or other settlement are reinvested in one or more Properties or other Permitted
Investments within 180 days thereafter. 
 “Shares” means shares of common stock of the Company, par value $.01
per share. 
 “Stockholders” means the registered holders of the Shares. 

“Stockholders’ 8% Return” means, as of any date, an aggregate amount equal to a 8% cumulative, non-compounded,
annual return on Invested Capital (calculated like simple interest on a daily basis based on a three hundred sixty-five day year). For purposes of calculating the Stockholders’ 8% Return, Invested Capital shall be determined for each day during
the period for which the Stockholders’ 8% Return is being calculated and shall be calculated net of (1) Distributions of Operating Cash Flow to the extent such Distributions of Operating Cash Flow provide a cumulative, non-compounded,
annual return in excess of 8%, as such amounts are computed on a daily basis based on a three hundred sixty-five day year and (2) Distributions of Cash from Sales, Settlements and Financings, except to the extent such Distributions would be
required to supplement Distributions of Operating Cash Flow in order to achieve a cumulative, non-compounded, annual return of 8%, as such amounts are computed on a daily basis based on a three hundred sixty-five day year. 

“Subordinated Incentive Fee” means the fee payable to the Advisor under certain circumstances if the Shares are Listed,
as calculated in Section 8.08. 
 “Subordinated Performance Fee Due Upon Termination” means a fee payable
in the form of an interest bearing promissory note (the “Performance Fee Note”) in a principal amount equal to (1) 15% of the amount, if any, by which (a) the Appraised Value of the Company’s Properties at the Termination
Date, less amounts of all indebtedness secured by the Company’s Properties, plus the fair market value of all other Permitted Investments of the Company at the Termination Date, less amounts of indebtedness related to such Permitted
Investments, plus total Distributions (excluding any stock dividend) through the Termination Date exceeds (b) the sum 

  
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of Invested Capital plus total Distributions required to be made to the stockholders in order to pay the Stockholders’ 8% Return from inception through the Termination Date less (2) any
prior payment to the Advisor of a Subordinated Share of Cash Flows. Interest on the Performance Fee Note will accrue beginning on the Termination Date at a rate deemed fair and reasonable by the Conflicts Committee. The Company shall repay the
Performance Fee Note at such time as the Company completes the first Sale or Settlement after the Termination Date using Cash from Sales and Settlements. If the Cash from Sales and Settlements from the first Sale or Settlement after the Termination
Date is insufficient to pay the Performance Fee Note in full, including accrued interest, then the Performance Fee Note shall be paid in part from the Cash from Sales and Settlements from the first Sale or Settlement, and in part from the Cash from
Sales and Settlements from each successive Sale or Settlement until the Performance Fee Note is repaid in full, with interest. If the Performance Fee Note has not been paid in full within five years from the Termination Date, then the Advisor, its
successors or assigns, may elect to convert the balance of the fee, including accrued but unpaid interest, into Shares at a price per Share equal to the average closing price of the Shares over the ten trading days immediately preceding the date of
such election if the Shares are Listed at such time. If the Shares are not Listed at such time, the Advisor, its successors or assigns, may elect to convert the balance of the fee, including accrued but unpaid interest, into Shares at a price per
Share equal to the fair market value for the Shares as determined by the Board based upon the Appraised Value of Company’s Properties on the date of election plus the fair market value of all other Permitted Investments of the Company on the
date of election. 
 “Subordinated Share of Cash Flows” has the meaning set forth in Section 8.07.

 “Subscription Processing Fee” has the meaning set forth in Section 8.05. 

“Termination Date” means the date of termination of the Agreement determined in accordance with Article 13 hereof.

 “2%/25% Guidelines” means the requirement pursuant to the NASAA Guidelines that, in any period of four
consecutive fiscal quarters, total Operating Expenses not exceed the greater of 2% of the Company’s Average Invested Assets during such 12-month period or 25% of the Company’s Net Income over the same 12-month period. 

ARTICLE 2 

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

ARTICLE 3 

DUTIES OF THE ADVISOR 
 The Advisor is responsible for managing, operating, directing and supervising the operations and administration of the Company and its assets. The Advisor undertakes to use its

  
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best efforts to present to the Company potential investment opportunities, to make investment decisions on behalf of the Company subject to the limitations in the Company’s Charter, the
direction and oversight of the Board and Section 4.03 hereof, and to provide the Company with a continuing and suitable investment program consistent with the investment objectives and policies of the Company as determined and adopted from time
to time by the Board. Subject to the limitations set forth in this Agreement, including Article 4 hereof, and the continuing and exclusive authority of the Board over the management of the Company, the Advisor shall, either directly or by engaging
an Affiliate or third party, perform the following duties: 
 3.01 Organizational and Offering Services. The Advisor
shall perform all services related to the organization of the Company or any Offering or private sale of the Company’s securities, other than services that (i) are to be performed by the Dealer Manager, (ii) the Company elects to
perform directly or (iii) would require the Advisor to register as a broker-dealer with the SEC or any state. 
 3.02
Acquisition Services. 
  (i) Serve as the Company’s investment and financial advisor and provide
relevant market research and economic and statistical data in connection with the Company’s assets and investment objectives and policies; 
  (ii) Subject to Section 4 hereof and the investment objectives and policies of the Company: (a) locate, analyze and select potential investments; (b) structure and negotiate the terms
and conditions of transactions pursuant to which investments in Properties and other Permitted Investments will be made; (c) acquire and dispose of Properties and other Permitted Investments on behalf of the Company; (d) arrange for
financing and refinancing and make other changes in the asset or capital structure of investments in Properties and other Permitted Investments; and (e) enter into leases, service contracts and other agreements for Properties and other
Permitted Investments; 
  (iii) Perform due diligence on prospective investments and create due diligence
reports summarizing the results of such work; 
  (iv) With respect to prospective investments presented to
the Board, prepare reports regarding such prospective investments that include recommendations and supporting documentation necessary for the Directors to evaluate the proposed investments; 

 (v) Obtain reports (which may be prepared by the Advisor or its Affiliates), where appropriate, concerning the
value of contemplated investments of the Company; 
  (vi) Deliver to or maintain on behalf of the Company
copies of all appraisals obtained in connection with the Company’s investments; and 
  (vii)
Negotiate and execute approved investments and other transactions, including prepayments, maturities, workouts and other settlements of Permitted Investments. 

  
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 3.03 Asset Management Services. 

(i) Real Estate and Related Services: 

 (a) Investigate, select and, on behalf of the Company, engage and conduct business with (including enter contracts
with) such Persons as the Advisor deems necessary to the proper performance of its obligations as set forth in this Agreement, including but not limited to consultants, accountants, lenders, technical advisors, attorneys, brokers, underwriters,
corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, developers, construction companies, Property Managers and any and all Persons acting in any other capacity deemed by the Advisor
necessary or desirable for the performance of any of the foregoing services; 
  (b) Negotiate and service
the Company’s and the Properties’ debt facilities and other financings; 
  (c) Monitor
applicable markets and obtain reports (which may be prepared by the Advisor or its Affiliates) where appropriate, concerning the value of the Properties and other Permitted Investments; 

 (d) Monitor and evaluate the performance of each asset of the Company and the Company’s overall portfolio of
assets, provide daily management services to the Company and perform and supervise the various management and operational functions related to the Properties and other Permitted Investments; 

 (e) Formulate and oversee the implementation of strategies for the administration, promotion, management,
operation, maintenance, improvement, financing and refinancing, marketing, leasing and disposition of Properties and other Permitted Investments on an overall portfolio basis; 

 (f) Consult with the Company’s officers and the Board and assist the Board in the formulation and
implementation of the Company’s financial policies, and, as necessary with respect to investment and borrowing opportunities presented to the Board, furnish the Board with advice and recommendations with respect to the making of investments
consistent with the investment objectives and policies of the Company and with respect to any borrowings proposed to be undertaken by the Company; 
  (g) Oversee the performance by the Property Managers of their duties, including collection and proper deposits of rental payments and payment of Property expenses and maintenance; 

 (h) Conduct periodic on-site property visits to some or all (as the Advisor deems reasonably necessary) of the
Properties to inspect the physical condition of the Properties and to evaluate the performance of the Property Managers; 

  
 10 

  (i) Review, analyze and comment upon the operating budgets, capital
budgets and leasing plans prepared and submitted by each Property Manager and aggregate these property budgets into the Company’s overall budget; 
  (j) Coordinate and manage relationships between the Company and any co-venturers or partners; and 
  (k) Consult with the Company’s officers and the Board and provide assistance with the evaluation and approval of potential asset disposition, sale and refinancing opportunities that are
presented to the Board. 
 (ii) Accounting and Other Administrative Services: 

 (a) Provide the day-to-day management of the Company and perform and supervise the various administrative
functions reasonably necessary for the management of the Company; 
  (b) From time to time, or at any
time reasonably requested by the Board, make reports to the Board on the Advisor’s performance of services to the Company under this Agreement; 
  (c) Make reports to the Conflicts Committee each quarter of the investments that have been made by other programs sponsored by the Advisor or any of its Affiliates, including KBS Realty Advisors
LLC, as well as any investments that have been made by the Advisor or any of its Affiliates directly; 

 (d) Provide or arrange for any administrative services and items, legal and other services, office space, office
furnishings, personnel and other overhead items necessary and incidental to the Company’s business and operations; 
  (e) Provide financial and operational planning services; 

 (f) Maintain accounting and other record-keeping functions at the Company and investment levels, including
information concerning the activities of the Company as shall be required to prepare and to file all periodic financial reports, tax returns and any other information required to be filed with the SEC, the Internal Revenue Service and any other
regulatory agency; 
  (g) Maintain and preserve all appropriate books and records of the Company;

  (h) Provide tax and compliance services and coordinate with appropriate third parties, including the
Company’s independent auditors and other consultants, on related tax matters; 
  (i) Provide the
Company with all necessary cash management services; 

  
 11 

  (j) Manage and coordinate with the transfer agent the monthly
dividend process and payments to Stockholders; 
  (k) Consult with the Company’s officers and the
Board and assist the Board in evaluating and obtaining adequate insurance coverage based upon risk management determinations; 
  (l) Provide the Company’s officers and the Board with timely updates related to the overall regulatory environment affecting the Company, as well as managing compliance with such matters,
including but not limited to compliance with the Sarbanes-Oxley Act of 2002; 
  (m) Consult with the
Company’s officers and the Board relating to the corporate governance structure and appropriate policies and procedures related thereto; 
  (n) Perform all reporting, record keeping, internal controls and similar matters in a manner to allow the Company to comply with applicable law, including federal and state securities laws and the
Sarbanes-Oxley Act of 2002; 
  (o) Notify the Board of all proposed material transactions before they are
completed; and 
  (p) Do all things necessary to assure its ability to render the services described in
this Agreement. 
 3.04 Stockholder Services. 

(i) Manage services for and communications with Stockholders, including answering phone calls, preparing and sending
written and electronic reports and other communications; 
 (ii) Oversee the performance of the transfer agent
and registrar; 
 (iii) Establish technology infrastructure to assist in providing Stockholder support and
service; and 
 (iv) Consistent with Section 3.01, the Advisor shall perform the various subscription
processing services reasonably necessary for the admission of new Stockholders. 
 3.05 Other Services. Except as
provided in Article 7, the Advisor shall perform any other services reasonably requested by the Company (acting through the Conflicts Committee). 

  
 12 

 ARTICLE 4 
 AUTHORITY OF ADVISOR 
 4.01 General. All rights and powers to manage
and control the day-to-day business and affairs of the Company shall be vested in the Advisor. The Advisor shall have the power to delegate all or any part of its rights and powers to manage and control the business and affairs of the Company to
such officers, employees, Affiliates, agents and representatives of the Advisor or the Company as it may deem appropriate. Any authority delegated by the Advisor to any other Person shall be subject to the limitations on the rights and powers of the
Advisor specifically set forth in this Agreement or the Charter. 
 4.02 Powers of the Advisor. Subject to the express
limitations set forth in this Agreement and the continuing and exclusive authority of the Board over the management of the Company, the power to direct the management, operation and policies of the Company, including making, financing and disposing
of investments, shall be vested in the Advisor, which shall have the power by itself and shall be authorized and empowered on behalf and in the name of the Company to carry out any and all of the objectives and purposes of the Company and to perform
all acts and enter into and perform all contracts and other undertakings that it may in its sole discretion deem necessary, advisable or incidental thereto to perform its obligations under this Agreement. 

4.03 Approval by the Board. Notwithstanding the foregoing, the Advisor may not take any action on behalf of the Company without
the prior approval of the Board or duly authorized committees thereof if the Charter or Maryland General Corporation Law require the prior approval of the Board. If the Board or a committee of the Board must approve a proposed investment, financing
or disposition or chooses to do so, the Advisor will deliver to the Board or committee, as applicable, all documents required by it to evaluate such investment, financing or disposition. 

4.04 Modification or Revocation of Authority of Advisor. The Board may, at any time upon the giving of notice to the Advisor,
modify or revoke the authority or approvals set forth in Article 3 and this Article 4 hereof; provided, however, that such modification or revocation shall be effective upon receipt by the Advisor and shall not be applicable to investment
transactions to which the Advisor has committed the Company prior to the date of receipt by the Advisor of such notification. 

ARTICLE 5 

BANK ACCOUNTS 
 The Advisor may establish and maintain one or more bank accounts in the name of the Company and may collect and deposit into any such account or accounts, and disburse from any such account or accounts,
any money on behalf of the Company, under such terms and conditions as the Board may approve, provided that no funds shall be commingled with the funds of the Advisor. The Advisor shall from time to time render appropriate accountings of such
collections and payments to the Board and the independent auditors of the Company. 

  
 13 

 ARTICLE 6 
 RECORDS AND FINANCIAL STATEMENTS 
 The Advisor, in the conduct of its
responsibilities to the Company, shall maintain adequate and separate books and records for the Company’s operations in accordance with GAAP, which shall be supported by sufficient documentation to ascertain that such books and records are
properly and accurately recorded. Such books and records shall be the property of the Company and shall be available for inspection by the Board and by counsel, auditors and other authorized agents of the Company, at any time or from time to time
during normal business hours. Such books and records shall include all information necessary to calculate and audit the fees or reimbursements paid under this Agreement. The Advisor shall utilize procedures to attempt to ensure such control over
accounting and financial transactions as is reasonably required to protect the Company’s assets from theft, error or fraudulent activity. All financial statements that the Advisor delivers to the Company shall be prepared on an accrual basis in
accordance with GAAP, except for special financial reports that by their nature require a deviation from GAAP. The Advisor shall liaise with the Company’s officers and independent auditors and shall provide such officers and auditors with the
reports and other information that the Company so requests. 
 ARTICLE 7 

LIMITATION ON ACTIVITIES 
 Notwithstanding any provision in this Agreement to the contrary, the Advisor shall not take any action that, in its sole judgment made in good faith, would (i) adversely affect the ability of the
Company to qualify or continue to qualify as a REIT under the Code, (ii) subject the Company to regulation under the Investment Company Act of 1940, as amended, (iii) violate any law, rule, regulation or statement of policy of any
governmental body or agency having jurisdiction over the Company, its Shares or its other securities, (iv) require the Advisor to register as a broker-dealer with the SEC or any state, or (v) violate the Charter or Bylaws. In the event an
action that would violate (i) through (v) of the preceding sentence but such action has been ordered by the Board, the Advisor shall notify the Board of the Advisor’s judgment of the potential impact of such action and shall refrain
from taking such action until it receives further clarification or instructions from the Board. In such event, the Advisor shall have no liability for acting in accordance with the specific instructions of the Board so given. 

ARTICLE 8 

FEES 

8.01 Acquisition Advisory Fees. As compensation for the investigation, selection and acquisition (by purchase, contribution,
investment or exchange) of Properties and other Permitted Investments, the Company shall pay a fee to the Advisor (an “Acquisition Advisory Fee”) for each such investment. With respect to the acquisition of a Property or other
Permitted Investment to be wholly owned, directly or indirectly, by the Company, the Acquisition Advisory Fee payable to the Advisor shall equal 1.0% of the sum of the amount actually paid or allocated to fund the acquisition, development,
construction or improvement of the Property or 

  
 14 

 
other Permitted Investment, inclusive of the Acquisition Expenses associated with such Property or other Permitted Investment and the amount of any debt associated with, or used to fund the
investment in, such Property or other Permitted Investment plus budgeted capital improvement costs. With respect to the acquisition of a Property or other Permitted Investment through any Joint Venture or any partnership in which the Company or the
Partnership is, directly or indirectly, a co-venturer or partner, the Acquisition Advisory Fee payable to the Advisor shall equal 1.0% of the portion of the amount actually paid or allocated to fund the acquisition, development, construction or
improvement of the Property or other Permitted Investment, inclusive of the Acquisition Expenses associated with such Property or other Permitted Investment, plus the amount of any debt associated with, or used to fund the investment in, such
Property or other Permitted Investment that is attributable to the Company’s investment in such Joint Venture or partnership plus budgeted capital improvement costs. Notwithstanding anything herein to the contrary, the payment of Acquisition
Advisory Fees by the Company shall be subject to the limitations on Acquisition Fees contained in (and defined in) the Company’s Charter. The Advisor shall submit an invoice to the Company on or about the closing or closings of each
acquisition, accompanied by a computation of the Acquisition Fee. Generally, the Acquisition Advisory Fee payable to the Advisor shall be paid at the closing of the transaction upon receipt of the invoice by the Company. However, the Acquisition
Advisory Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Acquisition Advisory Fees not taken as to any fiscal year shall be deferred without interest and may be paid
in such other fiscal year as the Advisor shall determine. 
 8.02 Development and Construction Fees. If the Advisor or an
Affiliate provides development services and/or construction services with respect to a Property, the Company shall pay the Advisor Development Fees and/or Construction Fees, as applicable, in amounts that are usual and customary for comparable
services rendered to similar projects in the geographic market; provided, however, that the Conflict Committee must determine that such Development Fees and Construction Fees are fair and reasonable and on terms and conditions not less favorable
than those available from unaffiliated third parties. Development Fees and Construction Fees will include the reimbursement of the specified cost incurred by the Advisor of engaging third parties for such services. However, the Development Fee
and/or Construction Fee, as applicable, may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Development Fees and/or Construction Fees, as applicable, not taken as to any
fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. Notwithstanding the above, the Advisor may engage (on behalf of the Company) third parties to provide development or
construction services pursuant to its authority under Article 4 and pay such third parties all applicable Development Fees or Construction Fees. Notwithstanding anything herein to the contrary, the payment of Development Fees and Construction Fees
by the Company shall be subject to the limitations on Acquisition Fees contained in (and defined in) the Company’s Charter. 
 8.03 Asset Management Fees. 

(i)        The Company shall pay the Advisor as compensation for the services
described in Section 3.03 hereof a monthly fee (the “Asset Management Fee”) in an amount equal to one-twelfth of 1.0% of the sum of the Cost of Real Estate Investments and the Cost of other Permitted Investments. The Advisor
shall submit a monthly invoice 

  
 15 

 
to the Company, accompanied by a computation of the Asset Management Fee for the applicable period. Generally, the Asset Management Fee payable to the Advisor shall be paid on the last day of
such month, or the first business day following the last day of such month. However, the Asset Management Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Asset
Management Fees not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. 
 (ii)        Deferral of Asset Management Fee: 
   (a)        Notwithstanding the provisions of Section 8.03(i), with respect to Asset Management Fees accruing from February 1, 2013 through
July 31, 2013, the Advisor, on behalf of itself and its affiliates, and its and their respective successors and assigns, hereby defers the Company’s obligation to pay such Asset Management Fees. Advisor further agrees that the Company will
only be obligated to pay the Advisor such deferred amounts if and to the extent that the Company’s funds from operations, as such term is defined by NAREIT and interpreted by the Company, as adjusted for the effects of straight-line rents and
acquisition costs and expenses (“AFFO”) for the immediately preceding month exceeds the amount of distributions declared for record dates of such prior month (an “AFFO Surplus”). The amount of any AFFO Surplus in a given month
shall be applied first to pay to the Advisor Asset Management Fees currently due with respect to such month (including any that would otherwise have been deferred for that month in accordance with this Amendment), and then to pay Asset Management
Fees previously deferred by the Advisor in accordance with this Amendment. 

  (b)        Notwithstanding anything contained in
Section 8.03(ii)(a) herein to the contrary, any and all deferred Asset Management Fees that are unpaid shall be immediately due and payable at such time as the owners of all outstanding Shares have received Distributions in an aggregate amount
equal to the sum of: 
 i. the Stockholders’ 8% Return and 

ii. Invested Capital. 
 When determining whether the above threshold has been met: 
  

					
		  	(1)	  	Any stock dividend shall not be included as a Distribution; and
		  	(2)	  	Distributions paid on Shares redeemed by the Company (and thus no longer included in the determination of Invested Capital), shall not be included as a
Distribution.

   (c)        The Advisor acknowledges
and agrees that no interest shall accrue on the deferred amounts. To the extent payment of any deferred amount is due to the Advisor hereunder, the Company shall pay the Advisor no later than the last business day of the month in which the amount of
such payment is determined, or the first business day of the following month. 

  
 16 

 8.04 Disposition Fees. If the Advisor or any of its Affiliates provide a substantial
amount of services (as determined by the Conflicts Committee) in connection with a Sale, the Advisor or such Affiliate shall receive a fee at the closing (the “Disposition Fee”) equal to 1.0% of the Contract Sales Price; provided,
however, that no Disposition Fee shall be payable to the Advisor for any Sale if such Sale involves the Company selling all or substantially all of its assets in one or more transactions designed to effectuate a business combination transaction (as
opposed to a Company liquidation, in which case the Disposition Fee would be payable if the Advisor or an Affiliate provides a substantial amount of services as provided above). The payment of any Disposition Fees by the Company shall be subject to
the limitations contained in the Company’s Charter. Any Disposition Fee payable under this Section 8.04 may be paid in addition to commissions paid to non-Affiliates, provided that the total commissions (including such Disposition Fee)
paid to all Persons by the Company for each Sale shall not exceed an amount equal to the lesser of (i) 6% of the aggregate Contract Sales Price of each Property or other Permitted Investment or (ii) the Competitive Real Estate Commission
for each Property or other Permitted Investment. The Advisor shall submit an invoice to the Company on or about the closing or closings of each disposition, accompanied by a computation of the Disposition Fee. Generally, the Disposition Fee payable
to the Advisor shall be paid at the closing of the transaction upon receipt of the invoice by the Company. However, the Disposition Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any
portion of the Disposition Fees not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. 
 8.05 Subscription Processing Fee. The Company shall pay the Advisor as compensation for the services described in Section 3.04(iv) hereof a monthly fee (the “Subscription Processing
Fee”) in an amount equal to $35 per subscription agreement for Shares received and processed by the Advisor. The Advisor shall submit a monthly invoice to the Company, accompanied by a computation of the total amount of the Subscription
Processing Fee for the applicable period. Generally, the Subscription Processing Fee payable to the Advisor shall be paid on the last day of such month, or the first business day following the last day of such month. However, the Subscription
Processing Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Subscription Processing Fees not taken as to any fiscal year shall be deferred without interest and may be
paid in such other fiscal year as the Advisor shall determine. The Subscription Processing Fee is an Organization and Offering Expense of the Company and is subject to the limitations on Organization and Offering Expenses in Article 9 hereof.

 8.06 Property Management Fees. If the Company retains the Advisor or its Affiliates to manage any of its Properties,
the Company will pay the Advisor or its Affiliates in amounts that are usual and customary for comparable services rendered to similar Properties in the geographic market; provided, however, that the Conflict Committee must determine that such
Property Management Fees are fair and reasonable and on terms and conditions not less favorable than those available from unaffiliated third parties. Property Management Fees will include the reimbursement of the specified cost incurred by the
Advisor of engaging third parties for such services. However, the Property Management Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Property

  
 17 

 
Management Fees not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. Notwithstanding the above, the Advisor
may engage (on behalf of the Company) third parties to provide property management services pursuant to its authority under Article 4 and pay such third parties all applicable Property Management Fees. 

8.07 Subordinated Share of Cash Flows. The Subordinated Share of Cash Flows shall be payable to the Advisor in an amount equal to
15% of Operating Cash Flow and Cash from Sales, Settlements and Financings remaining after the Stockholders have received Distributions of Operating Cash Flow and of Cash from Sales, Settlements and Financings such that the owners of all outstanding
Shares have received Distributions in an aggregate amount equal to the sum of: 
 a.    the
Stockholders’ 8% Return and 
 b.    Invested Capital. 

When determining whether the above threshold has been met: 
  

	 	(A)	Any stock dividend shall not be included as a Distribution; and 

  

	 	(B)	Distributions paid on Shares redeemed by the Company (and thus no longer included in the determination of Invested Capital), shall not be included as a Distribution.

 Following Listing, no Subordinated Share of Cash Flows will be paid to the Advisor. 

If the Subordinated Share of Cash Flows is payable to the Advisor, the Advisor shall submit a monthly invoice to the Company, accompanied by a
computation of the total amount of the Subordinated Share of Cash Flows for the applicable period. Generally, the Subordinated Share of Cash Flows payable to the Advisor shall be paid on the last day of such month, or the first business day
following the last day of such month. However, the Subordinated Share of Cash Flows may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Subordinated Share of Cash Flows not
taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. 
 8.08 Subordinated Incentive Fee. Upon Listing, the Advisor shall be entitled to the Subordinated Incentive Fee in an amount equal to 15% of the amount by which (i) the market value of the
outstanding Shares of the Company, measured by taking the average closing price or the average of the bid and asked price, as the case may be, over a period of 30 days during which the Shares are traded, with such period beginning 180 days after
Listing (the “Market Value”), plus the total of all Distributions paid to Stockholders (excluding any stock dividends) from the Company’s inception until the date that Market Value is determined, exceeds (ii) the sum of
(A) 100% of Invested Capital and (B) the total Distributions required to be paid to the Stockholders in order to pay the Stockholders’ 8% Return from inception through the date Market Value is determined. The Company shall have the
option to pay such fee in the form of cash, Shares, a promissory note or any combination of the foregoing. The Subordinated Incentive Fee will be 

  
 18 

 
reduced by the amount of any prior payment to the Advisor of a Subordinated Share of Cash Flows. In the event the Subordinated Incentive Fee is paid to the Advisor following Listing, no other
performance fee will be paid to the Advisor. In addition, the Subordinated Incentive Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Subordinated Incentive Fee not
taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. 
 8.09 Changes to Fee Structure. In the event of Listing, the Company and the Advisor shall negotiate in good faith to establish a fee structure appropriate for a perpetual-life entity. 

ARTICLE 9 

EXPENSES 

9.01 General. In addition to the compensation paid to the Advisor pursuant to Article 8 hereof, the Company shall pay directly or
reimburse the Advisor for all of the expenses paid or incurred by the Advisor or its Affiliates on behalf of the Company or in connection with the services provided to the Company pursuant to this Agreement, including, but not limited to:

   (i) All Organization and Offering Expenses; provided, however, that the Company shall not
reimburse the Advisor to the extent such reimbursement would cause the total amount spent by the Company on Organization and Offering Expenses to exceed 15% of the Gross Proceeds raised as of the date of the reimbursement and provided further that
within 60 days after the end of the month in which an Offering terminates, the Advisor shall reimburse the Company to the extent the Company incurred Organization and Offering Expenses exceeding 15% of the Gross Proceeds raised in the completed
Offering; the Company shall not reimburse the Advisor for any Organization and Offering Expenses that are not fair and commercially reasonable to the Company, and the Advisor shall reimburse the Company for any Organization and Offering Expenses
that are not fair and commercially reasonable to the Company; 
   (ii) Acquisition Fees and
Acquisition Expenses incurred in connection with the selection and acquisition of Properties and other Permitted Investments, including such expenses incurred related to assets pursued or considered but not ultimately acquired by the Company,
provided that, notwithstanding anything herein to the contrary, the payment of Acquisition Fees and Acquisition Expenses by the Company shall be subject to the limitations contained in the Company’s Charter; 

  (iii) The actual out-of-pocket cost of goods and services used by the Company and obtained from entities not
Affiliated with the Advisor; 
   (iv) Interest and other costs for borrowed money, including
discounts, points and other similar fees; 
   (v) Taxes and assessments on income or Properties,
taxes as an expense of doing business and any other taxes otherwise imposed on the Company and its business, assets or income; 

  
 19 

   (vi) Out-of-pocket costs associated with insurance required in
connection with the business of the Company or by its officers and Directors; 
   (vii) Expenses of
managing, improving, developing, operating and selling Properties and other Permitted Investments owned, directly or indirectly, by the Company, as well as expenses of other transactions relating to such Properties and other Permitted Investments,
including but not limited to prepayments, maturities, workouts and other settlements of other Permitted Investments; 
   (viii) All out-of-pocket expenses in connection with payments to the Board and meetings of the Board and Stockholders; 

  (ix) Personnel and related employment costs incurred by the Advisor or its Affiliates in performing the
services described in Article 3 hereof, including but not limited to reasonable salaries and wages, benefits and overhead of all employees directly involved in the performance of such services, provided that, other than reimbursement of travel and
communications expenses, no reimbursement shall be made for costs of such employees of the Advisor or its Affiliates to the extent that such employees perform services for which the Advisor receives Acquisition Fees or Disposition Fees; 

  (x) Out-of-pocket expenses of providing services for and maintaining communications with Stockholders,
including the cost of preparation, printing, and mailing annual reports and other Stockholder reports, proxy statements and other reports required by governmental entities; 

  (xi) Audit, accounting and legal fees, and other fees for professional services relating to the operations of
the Company and all such fees incurred at the request, or on behalf of, the Board, the Conflicts Committee or any other committee of the Board; 
   (xii) Out-of-pocket costs for the Company to comply with all applicable laws, regulations and ordinances; 

  (xiii) Expenses connected with payments of Distributions made or caused to be made by the Company to the
Stockholders; 
   (xiv) Expenses of organizing, redomesticating, merging, liquidating or dissolving
the Company or of amending the Charter or the Bylaws; and 
   (xv) All other out-of-pocket costs
incurred by the Advisor in performing its duties hereunder. 
 9.02 Timing of and Additional Limitations on
Reimbursements. 
   (i) Expenses incurred by the Advisor on behalf of the Company and
reimbursable pursuant to this Article 9 shall be reimbursed no less than monthly to the Advisor. The Advisor shall prepare a statement documenting the expenses of the Company during each quarter and shall deliver such statement to the Company within
45 days after the end of each quarter. 

  
 20 

   (ii) Notwithstanding anything else in this Article 9 to the
contrary, the expenses enumerated in this Article 9 shall not become reimbursable to the Advisor unless and until the Company has raised $2.5 million in the Initial Public Offering. 

  (iii) Commencing upon the earlier to occur of four fiscal quarters after (i) the Company’s making
of its first investment or (ii) six months after commencement of the Initial Public Offering, the following limitation on Operating Expenses shall apply: The Company shall not reimburse the Advisor at the end of any fiscal quarter for Operating
Expenses that in the four consecutive fiscal quarters then ended (the “Expense Year”) exceed (the “Excess Amount”) the greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25%
Guidelines”) for such year unless the Conflicts Committee determines that such excess was justified, based on unusual and nonrecurring factors that the Conflicts Committee deems sufficient. If the Conflicts Committee does not approve such
excess as being so justified, any Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the Company. If the Conflicts Committee determines such excess was justified, then, within 60 days after the end of any fiscal quarter of
the Company for which total reimbursed Operating Expenses for the Expense Year exceed the 2%/25% Guidelines, the Advisor, at the direction of the Conflicts Committee, shall cause such fact to be disclosed to the Stockholders in writing (or the
Company shall disclose such fact to the Stockholders in the next quarterly report of the Company or by filing a Current Report on Form 8-K with the SEC within 60 days of such quarter end), together with an explanation of the factors the Conflicts
Committee considered in determining that such excess expenses were justified. The Company will ensure that such determination will be reflected in the minutes of the meetings of the Board. All figures used in the foregoing computation shall be
determined in accordance with GAAP applied on a consistent basis. 
 ARTICLE 10 

VOTING AGREEMENT 
 The Advisor agrees that, with respect to any Shares now or hereinafter owned by it, the Advisor will not vote or consent on matters submitted to the stockholders of the Company regarding (i) the
removal of the Advisor, a director or any of their Affiliates or (ii) any transaction between the Company and the Advisor, a director or any of their Affiliates. This voting restriction shall survive until such time that the Advisor is both no
longer serving as such and is no longer an Affiliate of the Company. 
 ARTICLE 11 

RELATIONSHIP OF ADVISOR AND COMPANY; 
 OTHER ACTIVITIES OF THE ADVISOR 
 11.01 Relationship. The Company
and the Advisor are not partners or joint venturers with each other, and nothing in this Agreement shall be construed to make them such partners or joint venturers. Nothing herein contained shall prevent the Advisor from engaging in other
activities, including, without limitation, the rendering of advice to other Persons (including other 

  
 21 

 
REITs) and the management of other programs advised, sponsored or organized by the Advisor or its Affiliates. Nor shall this Agreement limit or restrict the right of any manager, director,
officer, employee or equityholder of the Advisor or its Affiliates to engage in any other business or to render services of any kind to any other Person. The Advisor may, with respect to any investment in which the Company is a participant, also
render advice and service to each and every other participant therein. The Advisor shall promptly disclose to the Conflicts Committee the existence of any condition or circumstance, existing or anticipated, of which it has knowledge, that creates or
could create a conflict of interest between the Advisor’s obligations to the Company and its obligations to or its interest in any other Person. Notwithstanding the foregoing, the Advisor shall promptly provide notice to the Conflicts Committee
if the Advisor and Legacy Partners Residential Realty, LLC propose, after the date of this Agreement, to create any additional exclusion from the restrictions on competing business activities set forth in Section 8.1(a) of the operating
agreement of KBS-Legacy Apartment Community REIT Venture, LLC. Such notice shall include a detailed description of the proposed exclusion and the basis for the determination by the Advisor and Legacy Partners Residential Realty, LLC that the
excluded activity is not competitive with the Company or its investments. Within a reasonable time following its receipt of such notice, the Conflicts Committee shall approve or reject (by majority vote) the proposed exclusion. 

11.02 Time Commitment. The Advisor shall, and shall cause its Affiliates and their respective employees, officers and agents to,
devote to the Company such time as shall be reasonably necessary to conduct the business and affairs of the Company in an appropriate manner consistent with the terms of this Agreement. The Company acknowledges that the Advisor and its Affiliates
and their respective employees, officers and agents may also engage in activities unrelated to the Company and may provide services to Persons other than the Company or any of its Affiliates. 

11.03 Investment Opportunities and Allocation. The Advisor shall be required to use commercially reasonable efforts to present a
continuing and suitable investment program to the Company that is consistent with the investment policies and objectives of the Company. 
 ARTICLE 12 
 THE KBS NAME 

The Advisor and its Affiliates have a proprietary interest in the name “KBS.” The Advisor hereby grants to the Company a
non-transferable, non-assignable, non-exclusive royalty-free right and license to use the name “KBS” during the term of this Agreement. Accordingly, and in recognition of this right, if at any time the Company ceases to retain the Advisor
or one of its Affiliates to perform advisory services for the Company, the Company will, promptly after receipt of written request from the Advisor, cease to conduct business under or use the name “KBS” or any derivative thereof and the
Company shall change its name and the names of any of its subsidiaries to a name that does not contain the name “KBS” or any other word or words that might, in the reasonable discretion of the Advisor, be susceptible of indication of some
form of relationship between the Company and the Advisor or any its Affiliates. At such time, the Company will also make any changes to any trademarks, servicemarks or other marks necessary to remove any references to the word “KBS.”
Consistent 

  
 22 

 
with the foregoing, it is specifically recognized that the Advisor or one or more of its Affiliates has in the past and may in the future organize, sponsor or otherwise permit to exist other
investment vehicles (including vehicles for investment in real estate) and financial and service organizations having “KBS” as a part of their name, all without the need for any consent (and without the right to object thereto) by the
Company. 
 ARTICLE 13 
 TERM AND TERMINATION OF THE AGREEMENT 
 13.01 Term. This Agreement
shall have an initial term of one year from the date hereof and may be renewed for an unlimited number of successive one-year terms upon mutual consent of the parties. The Company’s board of directors will evaluate the performance of the
Advisor annually before renewing this Agreement, and each such renewal shall be for a term of no more than one year. Any such renewal must be approved by a majority of the Company’s board of directors (including a majority of the Conflicts
Committee) not otherwise interested in the transaction. 
 13.02 Termination by Either Party. This Agreement may be
terminated upon 60 days written notice without cause or penalty by either the Company (acting through the Conflicts Committee) or the Advisor. The provisions of Articles 1, 10, 12, 13, 15 and 16 shall survive termination of this Agreement.

 13.03 Payments on Termination and Survival of Certain Rights and Obligations. Payments to the Advisor pursuant to this
Section 13.03 shall be subject to the 2%/25% Guidelines to the extent applicable. 
 (i)  After
the Termination Date, the Advisor shall not be entitled to compensation for further services hereunder except it shall be entitled to receive from the Company within 30 days after the effective date of such termination (A) all unpaid
reimbursements of expenses and all earned but unpaid fees payable to the Advisor prior to termination of this Agreement and (B) the Subordinated Performance Fee Due Upon Termination, provided that no Subordinated Performance Fee Due Upon
Termination will be paid if the Company has paid or is obligated to pay the Subordinated Incentive Fee. 

(ii)  The Advisor shall promptly upon termination: 

(a)  pay over to the Company all money collected pursuant to this Agreement, if any, after deducting any
accrued compensation and reimbursement for its expenses to which it is then entitled; 
 (b)  deliver
to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board; 

(c)  deliver to the Board all assets and documents of the Company then in the custody of the Advisor; and

  
 23 

 (d)  cooperate with the Company to provide an orderly transition
of advisory functions. 
 ARTICLE 14 
 ASSIGNMENT 
 This Agreement may be assigned by the Advisor to an Affiliate
with the consent of a majority of the Company’s board of directors (including a majority of the Conflicts Committee) not otherwise interested in the transaction. The Advisor may assign any rights to receive fees or other payments under this
Agreement without obtaining the approval of the Board or the Conflicts Committee. This Agreement shall not be assigned by the Company without the consent of the Advisor, except in the case of an assignment by the Company to a corporation or other
organization that is a successor to all of the assets, rights and obligations of the Company, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company is bound by this
Agreement. 
 ARTICLE 15 
 INDEMNIFICATION AND LIMITATION OF LIABILITY 
 15.01 Indemnification.
Except as prohibited by the restrictions provided in this Section 15.01, Section 15.02 and Section 15.03, the Company shall indemnify, defend and hold harmless the Advisor and its Affiliates, including their respective officers,
directors, equity holders, partners and employees, from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liability,
claims, damages or losses and related expenses are not fully reimbursed by insurance. Any indemnification of the Advisor may be made only out of the net assets of the Company and not from Stockholders. 

Notwithstanding the foregoing, the Company shall not indemnify the Advisors or its Affiliates for any loss, liability or expense arising
from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material
securities law violations as to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee; or (iii) a court of competent jurisdiction
approves a settlement of the claims against a particular indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of
the SEC and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws. 

15.02 Limitation on Indemnification. Notwithstanding the foregoing, the Company shall not provide for indemnification of the
Advisor or its Affiliates for any liability or loss suffered by any of them, nor shall any of them be held harmless for any loss or liability suffered by the Company, unless all of the following conditions are met: 

  
 24 

 (i) The Advisor or its Affiliates have determined, in good faith, that the
course of conduct that caused the loss or liability was in the best interests of the Company. 
 (ii) The
Advisor or its Affiliates were acting on behalf of or performing services for the Company. 
 (iii) Such
liability or loss was not the result of negligence or misconduct by the Advisor or its Affiliates. 
 15.03 Limitation on
Payment of Expenses. The Company shall pay or reimburse reasonable legal expenses and other costs incurred by the Advisors or its Affiliates in advance of the final disposition of a proceeding only if (in addition to the procedures required by
the Maryland General Corporation Law, as amended from time to time) all of the following are satisfied: (a) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company, (b) the
legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement and (c) the Advisor or its Affiliates undertake
to repay the amount paid or reimbursed by the Company, together with the applicable legal rate of interest thereon, if it is ultimately determined that the particular indemnitee is not entitled to indemnification. 

ARTICLE 16 

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

 To the Company or the Board: 
  KBS Legacy Partners Apartment REIT, Inc. 
  620 Newport Center Drive,
Suite 1300 
  Newport Beach, California 92660 
 To the Advisor: 
 KBS Capital Advisors LLC 

620 Newport Center Drive, Suite 1300 
 Newport Beach, California 92660 
 Either party may at any time give notice in
writing to the other party of a change in its address for the purposes of this Section 16.01. 

  
 25 

 16.02 Modification. This Agreement shall not be changed, modified, terminated or
discharged, in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or permitted assigns. 
 16.03 Severability. The provisions of this Agreement are independent of and severable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact
that for any reason any other or others of them may be invalid or unenforceable in whole or in part. 
 16.04
Construction. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware. 
 16.05 Entire Agreement. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance
and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing. 
 16.06 Waiver. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver. 

16.07 Gender. Words used herein regardless of the number and gender specifically used, shall be deemed and construed to include
any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires. 
 16.08
Titles Not to Affect Interpretation. The titles of Articles and Sections contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof.

 16.09 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be
an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall
bear the signatures of all of the parties reflected hereon as the signatories. 
 [The remainder of this page is intentionally
left blank. 
 Signature page follows.] 

  
 26 

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

							
	KBS LEGACY PARTNERS APARTMENT REIT, INC.
		
	  By:	 	/s/ W. Dean Henry
		 	W. Dean Henry
		 	Chief Executive Officer
	
	KBS CAPITAL ADVISORS LLC
		
	  By:	 	PBren Investments, L.P., a Manager
			
		 	By:	 	PBren Investments, LLC, as general partner
				
		 		 	By:	 	/s/ Peter M. Bren
		 		 		 	Peter M. Bren, Manager
		
	  By:	 	Schreiber Real Estate Investments, L.P., a
		 	Manager
			
		 	By:	 	Schreiber Investments, LLC, as general partner
				
		 		 	By:	 	/s/ Charles J. Schreiber, Jr.
		 		 		 	Charles J. Schreiber, Jr., Manager

  
 27Property Management Agreement

 Exhibit 10.28 
 DAKOTA HILL APARTMENTS, IRVING, TEXAS 
 PROPERTY MANAGEMENT AGREEMENT 

BETWEEN 

MILESTONE MANAGEMENT, L.P., 
 AND 
 KBS LEGACY PARTNERS DAKOTA HILL LLC 

 TABLE OF CONTENTS 

 

					
	 	  	Page	 
		
	 Recitals
	  	 	1	  
	 ARTICLE 1.        DEFINITIONS
	  	 	1	  
	 1.01.    Definitions
	  	 	1	  
	 ARTICLE 2.        APPOINTMENT AND SERVICES OF PROPERTY MANAGER
	  	 	2	  
	 2.01.    Term
	  	 	2	  
	 ARTICLE 3.        COMPENSATION AND EXPENSES OF PROPERTY MANAGER
	  	 	9	  
	 3.01.    Fees
	  	 	9	  
	 3.02.    Expenses to be Borne by Property Manager
	  	 	10	  
	 3.04.    Nonpayment
	  	 	11	  
	 ARTICLE 4.        PERSONNEL AND BONDING
	  	 	11	  
	 4.01.    Stability of Management Team
	  	 	11	  
	 4.02.    Fidelity Bond
	  	 	12	  
	 4.03.    Affiliates
	  	 	12	  
	 ARTICLE 5.        COMPLIANCE WITH LAWS
	  	 	12	  
	 5.01.    Compliance
	  	 	13	  
	 5.02.    Notice
	  	 	13	  
	 5.03.    Hazardous Wastes
	  	 	13	  
	 5.04.    Asbestos and Similar Compliance Matters
	  	 	14	  
	 ARTICLE 6.        ACCOUNTING AND FINANCIAL MATTERS
	  	 	14	  
	 6.01.    Books and Records
	  	 	14	  
	 6.02.    Reports and Reconciliation of Accounts
	  	 	14	  
	 6.03.    Audit
	  	 	15	  
	 6.04.    Other Reports and Statements
	  	 	16	  
	 6.05.    Contracts and Other Agreements
	  	 	16	  
	 6.06.    Final Accounting
	  	 	16	  
	 6.07.    Tax Returns
	  	 	16	  
	 6.08.    Certification
	  	 	16	  
	 ARTICLE 7.        BANK ACCOUNTS
	  	 	16	  
	 7.01.    Property Accounts
	  	 	16	  
	 7.02.    Expenses Paid from Property Bank Account
	  	 	17	  
	 ARTICLE 8.        INSURANCE AND INDEMNITY
	  	 	18	  
	 8.01.    INDEMNIFICATION
	  	 	18	  
	 8.02.    Property Manager’s Insurance Responsibility
	  	 	19	  
	 8.03.    Contract Documents; Indemnity Provisions
	  	 	20	  
	 8.04.    Ratings of Insurance Companies
	  	 	21	  
	 8.05.    Owner’s Insurance Responsibility
	  	 	21	  
	 ARTICLE 9.        RELATIONSHIP OF PARTIES and REPRESENTATIONS and
WARRANTIES
	  	 	21	  
	 9.01.    Nature of Relationship
	  	 	21	  
	 9.02.    Communications Between Parties
	  	 	22	  
	 9.03.    Relationship of Owner and Property Manager with Respect to Leasing
	  	 	22	  
	 9.04.    No Sales Brokerage Agreement
	  	 	22	  
	 9.05.    Confidentiality
	  	 	23	  

							
	 9.06.
	  	Property Manager Not to Pledge Owner’s Credit	  	 	23	  
	 9.07
	  	Representations and Warranties	  	 	23	  
	ARTICLE 10.      TERMINATION	  	 	23	  
	 10.01.
	  	Termination by Owner Without Cause	  	 	23	  
	 10.02.
	  	Termination by Owner for Cause	  	 	23	  
	 10.03.
	  	Termination by Property Manager	  	 	24	  
	 10.04.
	  	Orderly Transition	  	 	24	  
	 10.05.
	  	Rights Which Survive Termination or Expiration	  	 	25	  
	ARTICLE 11.      MISCELLANEOUS	  	 	25	  
	 11.01.
	  	Governing Law	  	 	25	  
	 11.02.
	  	Table of Contents and Headings	  	 	25	  
	 11.03.
	  	Entire Agreement	  	 	25	  
	 11.04.
	  	Successors and Assigns	  	 	25	  
	 11.05.
	  	Waiver	  	 	25	  
	 11.07.
	  	Time	  	 	26	  
	 11.08.
	  	Attorneys’ Fees	  	 	26	  
	 11.09.
	  	Further Acts	  	 	26	  
	 11.10.
	  	No Advertising	  	 	26	  
	 11.11.
	  	Signs	  	 	26	  
	 11.12.
	  	Owner Exculpatory Clause; Waivers of Jury Trial and Punitive Damages	  	 	26	  
	 11.14.
	  	Notices	  	 	27	  
	 11.15.
	  	Counterparts	  	 	27	  
			
	EXHIBITS:	  		  			
		
	 A -        LEGAL DESCRIPTION
	  			
		
	 B -        RENTAL GUIDELINES
	  			
		
	 C -        STANDARD RESIDENTIAL LEASE FORM
	  			

 PROPERTY MANAGEMENT AGREEMENT 

This PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is made as of October 26, 2010 (the
“Effective Date”) between MILESTONE MANAGEMENT, L.P., a Delaware limited partnership, doing business in Texas as TMG Milestone Management, L.P. (“Property Manager”), and KBS Legacy Partners Dakota Hill LLC, a
Delaware limited liability company (“Owner”). 
 RECITALS 

A.        Owner is the record or beneficial owner of the Property (as defined
below) and Property Manager is experienced in the management, operation, leasing, service, repair and supervision of residential apartment projects similar to the Property. 

B.        The parties desire to enter into this Agreement and set forth the
terms and conditions under which Property Manager will manage the Property. 
 NOW, THEREFORE, in
consideration of the mutual covenants herein contained and other good and valuable consideration, Owner and Property Manager agree as follows: 
 AGREEMENT 
 ARTICLE 1.  DEFINITIONS. 

1.01.    Definitions.  As used in this Agreement, the following terms shall have the
respective meanings set forth below: 
 “Affiliate” shall mean, when used with respect to any person
(a) if such person is a corporation, any officer or director thereof and any person which is directly, or indirectly, the beneficial owner of more than 10% of any class of equity security (as defined in the Securities Exchange Act of 1934)
thereof, or if any such beneficial owner is a partnership, any partner thereof, or if any such beneficial owner is a corporation, any person controlling, controlled by or under common control with such beneficial owner or of any officer or director
of such beneficial owner or of any corporation occupying any such control relationship, (b) if such person is a partnership, any partner thereof, and (c) any other person which directly or indirectly controls or is controlled by or is
under common control with such person. For the purpose of this definition, “control” (including the correlative meanings of the term “controlling,” “controlled by” and “under common control with”), with
respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person, whether through the ownership of voting securities or by contract or otherwise.
The term “Affiliate” shall also mean, when used with respect to any individual, the parents and grandparents of such individual, the parents and grandparents of any other individual who is an Affiliate of such individual by virtue of any
one or more of the foregoing clauses (a), (b) and (c) of this definition, any descendant (whether natural or adopted) of any such parents or grandparents and any spouse of any such descendant. 

  
 1 

 “Approved Capital Budget” and “Approved Operating
Budget” shall have the meanings described in Section 2.02(b). 
 “Fiscal Year” shall mean
the twelve (12) months commencing January 1 and ending December 31. 
 “Gross Monthly
Collections” shall mean the total gross monthly collections received from the Property, including, without limitation, tenant rental income, pet rents and other charges and miscellaneous income items of Owner as applicable. Any payments by
tenants on account of any taxes imposed on rentals collected by Property Manager shall be excluded from Gross Monthly Collections. Any advance rental payments shall be included in Gross Monthly Collections when received. Security and other deposits
shall not be included therein unless the same are no longer used for security purposes and are applied to income. Without limitation, any payment of money by a tenant to Owner or Property Manager in consideration for or in conjunction with a rental
deposit, the termination, cancellation, expiration, renewal, extension or modification of a tenant’s lease, property insurance loss proceeds, remodeling and tenant improvement charge costs, condemnation proceeds, or proceeds received by Owner
in connection with the sale of any portion of the Property or the refinancing of any indebtedness secured by a lien on any portion of the Property, shall be excluded from the Gross Monthly Collections. Proceeds of business interruption insurance
shall be included in Gross Monthly Collections. 
 “Property” shall mean that certain real property
consisting of approximately twenty and three tenths (20.3) acres and improvements constructed thereon consisting of five hundred and four (504) residential units (commonly known as the Dakota Hill Apartments) and zero (-0-) square feet of
retail space located in the City of Irving, Texas as more particularly described on Exhibit A attached hereto. 

“Records Office” shall mean Property Manager’s offices located at the Property and its corporate office
in Dallas, Texas. 
 “Rental Guidelines” shall mean those guidelines attached hereto as Exhibit B, as
amended from time to time. 
 ARTICLE 2.  APPOINTMENT AND SERVICES OF PROPERTY MANAGER. 

2.01.    Term.  Owner hereby hires Property Manager as the exclusive manager of the
Property upon the terms and conditions herein stated, and Property Manager hereby accepts said engagement, for a term beginning on the date of this Agreement and ending at 12:00 midnight on the one-year anniversary of the beginning date, unless
sooner terminated by Owner or Property Manager as provided in Article 10 of this Agreement. At the expiration of said term, this Agreement, if not renewed in writing by Owner and Property Manager, shall then be deemed a month-to-month agreement
cancelable by either party on not less than thirty (30) days’ advance written notice, which notice may be given at any time during a month, provided that in any event the cancellation shall be effective at the end of the calendar month in
which the thirty (30) day notice period ends. 

  
 2 

 2.02.    Services of Property
Manager.  Property Manager shall direct, supervise, manage, operate, maintain and repair the Property and develop, institute and follow programs and policies to facilitate the efficient operation of the Property in compliance with this
Agreement, the Rental Guidelines and all written directions of Owner on as profitable a basis as reasonably possible. Without limiting the generality of the foregoing and subject at all times to such procedures and directions that shall be set forth
in this Agreement and the Rental Guidelines (as revised or amended from time to time), Property Manager shall do all of the following: 
   (a)        Employees.  Property Manager shall select, employ, pay, supervise and discharge all employees and personnel necessary for
the operation, maintenance and protection of the Property (subject to the limitations set forth in Section 4.01 hereof). All persons so employed by Property Manager shall be employees of Property Manager or independent contractors retained by
Property Manager, and not by Owner. All costs of gross salary and wages, payroll taxes, medical and dental insurance, worker’s compensation insurance, incentive leasing bonuses and other costs and employee benefit expenses payable on account of
such employees, shall be included in the Approved Operating Budget. Property Manager shall fully comply with all applicable laws and regulations having to do with workers’ compensation, social security, unemployment insurance, hours of labor,
wages, working conditions and other employer/employee-related subjects. 

  (b)        Records and
Budgets.  Property Manager shall keep or cause to be kept at the Records Office suitable books of control and account as provided in this Agreement. Property Manager shall prepare on Microsoft Excel worksheets (using Yardi templates)
and submit to Owner such monthly, quarterly, annual or other operating and capital budgets as shall be required by Owner. Without limitation, Property Manager shall prepare and submit to Owner a proposed operating budget and a proposed capital
budget for the Property for the management and operation of the Property for the forthcoming Fiscal Year no later than November 1 of each year during the term hereof. All proposed operating budgets and capital budgets shall be on a form
submitted by Property Manager and approved by Owner. Owner will consider the proposed budgets and endeavor to approve such budgets by December 1 of each year during the term hereof. The proposed budgets shall become the Approved Capital Budget
and the Approved Operating Budget only when approved by Owner. Following approval by Owner the Approved Capital Budget and the Approved Operating Budget shall be promptly uploaded into the Yardi accounting system for the Property. 

  In the event an annual operating budget for a Property has not been approved by Owner prior
to the commencement of any Fiscal Year during the term hereof, the operating budget for each month (the “Current Month”) until the annual operating budget is approved shall be the amount of the most recent Approved Operating Budget
for the Property for the same calendar month (“Base Month”), as adjusted to reflect (a) any increase or decrease between the Base Month and the Current Month in the Consumer Price Index for All Urban Consumers for the
metropolitan area in which the Property is located (base year 1982-84=100) published by the United States Department of Labor, Bureau of Labor Statistics and (b) any increase or decrease in the occupancy of the Property between the Base Month
and the Current Month and (c) any increase or decrease in the taxes, insurance and utilities of the Property. 

  
 3 

 Owner may revoke its approval of either Budget at any time
upon twenty (20) days’ prior written notice to Property Manager. Owner may amend its approval of either Budget and cause the Budget to be amended to conform to such approval at any time upon twenty (20) days’ prior written notice
to Property Manager and, in such event, only the Budget as so amended shall be deemed approved. 

With respect to the first Fiscal Year of the term, if not a full twelve months, Property Manager shall
submit to Owner for approval an operating and capital budget for the balance of such calendar year as soon as possible and no later than thirty (30) days after the date hereof. 

Property Manager shall have the right, from time to time, during each calendar year to submit revised
Budgets to Owner for approval. Property Manager agrees to use diligence and all reasonable efforts to ensure that the actual costs of maintaining and operating the Property shall not exceed the Approved Operating Budget or the Approved Capital
Budget pertaining thereto, as applicable. 

(c)        Leasing.  Property Manager shall
coordinate the leasing activities of the Property and, subject to Section 9.03 below, shall use commercially reasonable efforts to obtain responsible tenants for all unleased units and to renew existing leases at rental rates at least equal to
the Rental Guidelines. Property Manager may negotiate and execute leases using the standard lease forms for Owner approved by Owner and attached hereto as Exhibit C. Any deviation from the standard lease forms or the Rental Guidelines shall require
the prior written consent of Owner. 

(d)        Rent.  Property Manager shall use
reasonable efforts to ensure that all rents and all other monies payable under the leases are paid by the tenants of the Property as and when the same shall become due and payable directly to Property Manager. Property Manager shall adjust rentals
and other required payments where adjustment is contemplated by the leases, shall notify Owner and tenants of such adjustments and shall sign and serve in the name of Owner such notices (except as limited by Section 2.02(e) below), including
without limitation letters demanding past due and currently owed rents and other monies, as are deemed appropriate or necessary by Property Manager. Property Manager shall collect and identify any income due Owner from miscellaneous services
provided to tenants or the public, including, but not limited to, parking income, tenant storage and cable television charges. All rents and other monies so collected by Property Manager shall be immediately deposited in the Property Bank Account
(as defined below). 

(e)        Collections.  Property Manager shall
undertake the collection of rents and monetary payments of every kind and of any form due from tenants of the Property. Property Manager shall thereafter actively pursue collection of all such rent and payments. Except as allowed by applicable law,
Property Manager shall not terminate any lease, lock out a tenant, institute a suit for rent or for use and occupancy, or institute proceedings for recovery of possession. In the event that any tenant at the Property shall be delinquent in any
payment due to Owner beyond any applicable grace periods or otherwise be in default 

  
 4 

 
under the terms of its lease, Property Manager shall employ such methods as are commercially reasonable to either collect unpaid rent or to evict the tenant from the premises. Property Manager
shall employ a collection agency to pursue payment collection and, except as otherwise required by applicable law, shall utilize legal counsel only if a tenant refuses to vacate an apartment unit following proper notice. The commencement of any
litigation (other than for routine residential tenant eviction and residential rent collection matters, including bringing suit for and recovery of any delinquent rents or damages and possession of the premises in the name of Owner as an agent with
a beneficial interest), shall require the prior written approval of Owner. In connection with all suits or proceedings (other than for routine residential tenant eviction and residential rent collection matters, including bringing suit for and
recovery of any delinquent rents or damages and possession of the premises in the name of Owner as an agent with a beneficial interest), only legal counsel approved by Owner shall be retained, but Property Manager shall recommend legal counsel and
furnish Owner with the estimated costs of legal services to be incurred in bringing such suit or proceeding. 
 (f)        Maintenance.  Property Manager shall maintain or cause to be maintained (to the extent not maintained by tenants) the Property and
common areas thereof, external and internal, including, without limitation, sidewalks, signs, mechanical, electrical and other systems, parking lots and landscaping, in good and clean condition and repair, provided no maintenance expense, repairs or
alterations other than emergency repairs, which are not specifically identified within the Approved Operating Budget, shall be undertaken without the prior written consent of Owner. Property Manager shall coordinate and supervise all construction
activities (including, without limitation, tenant improvements, tenant refurbishment, common area refurbishment, maintenance and repairs) on the Property. All maintenance expenses, repairs or alterations (including, without limitation, alterations
required for the occupancy of new tenants) requiring expenditures in excess of $25,000 shall, at Owner’s election, be planned and supervised by an architect, designer, inspector or general contractor designated by Property Manager and approved
in writing by Owner. Property Manager shall institute and effectuate a preventative maintenance program. Notwithstanding the foregoing, in the event of an emergency in which there is an immediate danger to persons or property or in which action is
required in order to avoid suspension of services, Property Manager shall take such action as is reasonable and prudent under the circumstances and shall be reimbursed for any expense incurred in such action, even if not in the Approved Operating
Budget, so long as Property Manager attempts to consult with Owner in advance and, in any event, notifies Owner within 48 hours of taking such action explaining the reasons therefor. Property Manager shall obtain all necessary receipts, releases,
waivers, discharges and assurances necessary to keep the Property free of any mechanics’, laborers’, materials suppliers’ or vendors’ liens in connection with the maintenance or operation of the Property. All such documentation
shall be in such form as required by Owner. 

(g)        Contracts.  Property Manager shall
not enter into any contract without Owner’s prior written approval (including approval of the provisions of any equipment lease); provided, however, that Owner’s prior written approval shall not be required with respect to any utility or
service contract which is (i) entered into in the usual course of business, (ii) for a term of one year or less, and (iii) specifically provided for in the 

  
 5 

 
Approved Operating Budget. Without limiting the foregoing, each contract entered into by Property Manager pursuant to this Section 2.02(g) shall contain a thirty (30) day (or less)
cancellation clause exercisable by Owner without cause and without penalty or fee, unless otherwise approved in writing by Owner. All utility, supply, service, vending and related contracts or equipment leases are to be entered into by Property
Manager on behalf of Owner. Property Manager shall assure that any contractor performing work on the Property maintains insurance satisfactory to Owner, including, but not limited to, Workers’ Compensation Insurance (and, when required by law,
compulsory Non-Occupational Disability Insurance) and insurance against liability for injury to persons and property arising out of all such contractor’s operations naming Property Manager and Owner as additional insureds. Property Manager
shall obtain certificates of insurance for all such insurance before the work begins. Property Manager shall furnish copies of the certificates to Owner if requested by Owner. 

(h)        Purchases.  Property Manager shall
supervise and purchase or arrange for the purchase of all reasonable inventories, provisions, supplies and operating equipment which are provided for in the Approved Operating Budget or otherwise specifically approved by Owner in writing. To the
extent available, Property Manager shall give, or obtain for Owner, all volume purchasing benefits and discounts available to Property Manager or to properties of the size and class of the Property. 

(i)        Operating Expenses.  Property Manager
shall pay all normal operating expenses specifically provided for in the Approved Operating Budget not paid for by tenants of the Property in a manner commercially reasonable for the Property from funds in the Property Bank Account described in
Section 7.01(a). Property Manager shall recommend that Owner purchase major items of new or replacement equipment when Property Manager believes such purchase to be necessary or desirable. Owner may arrange to purchase and install such items
itself or may authorize Property Manager to do so subject to any supervision and specification requirements and conditions prescribed by Owner. Prior to purchasing, Property Manager must obtain Owner’s specific written authorization for all
capital expenditures that are not included in the Approved Capital Budget as well as for all capital expenditures of $25,000 or more that are included and itemized with specificity in any one (1) line item in the Approved Capital Budget. Unless
otherwise directed by Owner, Property Manager shall obtain at least three (3) written estimates from qualified bidders for any capital improvement project if the cost of such project is reasonably expected to exceed $25,000. All capital
improvement projects requiring expenditures in excess of $25,000 shall, at Owner’s election, be planned and supervised by an architect, designer, inspector or general contractor designated by Property Manager and approved in writing by Owner.

 (j)        Conservation
Techniques.  Property Manager shall provide proper energy management and utilize utility conservation techniques. 
 (k)        Security.  Property Manager shall use reasonable efforts to maintain security adequate to the needs of the Property as directed by Owner
from time to time. Property Manager shall promptly notify Owner of any incidents or conditions which reflect on or affect the adequacy of the security provisions for the Property. 

  
 6 

(l)        Taxes.  Property Manager shall obtain
and caused to be verified bills for real estate and personal property taxes, sales taxes on rental payments, improvement assessments and other like charges which are or may become liens against any portion of the Property (collectively,
“Taxes”). Owner may elect to pay some or all of such bills for Taxes and, in such event, Property Manager shall remit all bills for Taxes to Owner not less than thirty (30) calendar days prior to the date on which each becomes
delinquent. Upon Property Manager’s receipt of written notice from Owner of Owner’s election to pay a bill for Taxes, Property Manager shall pay such bill not less than fifteen (15) calendar days prior to the date on which it becomes
delinquent. If Owner decides to contest any Taxes, Owner shall advise Property Manager and Property Manager shall not pay such Taxes until directed by Owner. 

(m)        Compliance.  Property Manager shall
operate the Property in compliance with all terms and conditions of applicable law, any ground lease, space lease, mortgage, deed of trust or other security instrument affecting the Property and of which Property Manager has knowledge, but Property
Manager shall not be required to make any payment (except those provided in the Approved Operating Budget) on account thereof unless specifically instructed to do so by Owner in writing. Property Manager shall also comply or supervise compliance
with the provisions of any insurance policy or policies insuring Owner in relation to the Property (so as not to decrease the insurance coverage or increase the insurance premiums). Property Manager shall be responsible for performance by Owner
under all license agreements, easement agreements, covenants, conditions, restrictions, documents of record, use permits, development agreements, operating agreements or other similar documents governing or applicable to the title, operation,
management, occupancy, promotion and leasing of the Property known to Property Manager. 

(n)        Licenses and Permits.  Property
Manager shall assist in obtaining at Owner’s expense all licenses, permits or other instruments required for the operation of the Property or any portion thereof (collectively, “Licenses”). Property Manager shall send to Owner
a copy of all initial or renewal license applications. Licenses shall be obtained in Owner’s name whenever possible. Any Licenses held in the name of Property Manager shall be held by it on behalf of Owner, and upon the termination or
expiration of this Agreement, Property Manager shall transfer or assign any such Licenses to Owner or to such person as Owner may direct. Property Manager shall keep in full force and effect all licenses, permits, consents and authorizations as may
be necessary for the proper performance by Property Manager of its duties and obligations under this Agreement (including, without limitation, qualification to do business) or as may be required under any lease covering any portion of the Property.
All such licenses, permits, consents and authorizations shall be in the name of Property Manager. 
 (o)        Notice and Cooperation in Legal Proceedings.  Owner and Property Manager shall forthwith give notice to each other of the commencement
of any action, suit or proceeding against Owner or against Property Manager with respect to the operations of the Property or otherwise affecting the Property. Property Manager shall fully cooperate, and shall cause all its employees to fully
cooperate, in connection with the prosecution or defense of all legal proceedings affecting the Property. 

  
 7 

 (p)         Other
Complaints and Notices.   Property Manager shall handle promptly complaints and requests from tenants, concessionaires and licensees and notify Owner of any major complaint made by a tenant, concessionaire or licensee. Property Manager
shall notify Owner promptly of: (i) any notice received by Property Manager or known to Property Manager of violation of any governmental requirements (and make recommendations regarding compliance therewith); (ii) any defect or unsafe
condition in the Property known to Property Manager; (iii) any notice received by Property Manager or known to Property Manager of violation of covenants, conditions and restrictions affecting the Property or noncompliance with loan documents
affecting the Property, if any; (iv) any fire, accident or other casualty or damage to the Property; (v) any condemnation proceedings, rezoning or other governmental order, lawsuit or threat thereof involving the Property; (vi) any
violations relative to the leasing, use, repair and maintenance of the Property under governmental laws, rules, regulations, ordinances or like provisions; (vii) defaults under any leases or other agreements affecting the Property (excluding
resident leases); or (viii) any violation of any insurance requirement. Property Manager shall promptly deliver to Owner copies of any documentation in its possession relating to such matters. Property Manager shall keep Owner reasonably
informed of the status of the particular matter through the final resolution thereof. In the case of any fire or other damage to the Property or violation or alleged violation of laws respecting Hazardous Wastes (as defined in Section 5.03),
Property Manager shall immediately give telephonic notice thereof to Owner. Property Manager shall complete all necessary and customary loss reports in connection with any fire or other damage to the Property. Property Manager shall retain in the
records it maintains for the Property copies of all supporting documentation with reference to such notices. 
 (q)         Business Plan and Property Review Program. Property Manager shall provide Owner with a draft of a business plan for the Property for the
forthcoming Fiscal Year no later than November 1 of each year during the term hereof containing such information as Owner may reasonably request, including (i) a list of all properties competitive with the Property, a list of the tenants
of each and all other reasonably available information respecting each, and (ii) basic demographic data relating to the market area of the Property, including population growth, major employers, employment and unemployment levels and, if the
Property is a retail property, retail sales and housing starts. With respect to the first Fiscal Year of the term, Property Manager shall submit to Owner for approval a draft of a business plan for the balance of such calendar year as soon as
possible and no later than thirty (30) days after the date hereof. In addition, Property Manager shall participate in Owner’s property review programs to the extent requested by Owner. Such review shall include asset, investment, financial
and strategy profiles in form and substance satisfactory to Owner and such assistance as Owner may request in connection with appraisals of the Property. Property Manager shall respond, within 10 days, to Owner’s management evaluation reports
concerning actions to be taken by Property Manager to correct or modify its management standards for the operations or financial services provided for the Property. 

(r)         General.   Property Manager shall
afford such supervision, professional management and in-house staff services as may be necessary or desirable to operate the Property in the same manner as is customary and usual in the operation of other properties of

  
 8 

 
substantially comparable location, class, size and standing, and shall provide such services at the Property as are consistent with the Property’s size and existing facilities. Subject only
to those express limitations set forth in this Agreement, Property Manager shall have control and discretion in the management and operation of the Property and in the performance of the foregoing services. Without limiting the foregoing, if
applicable, Property Manager shall review and, if so directed by Owner, conduct an audit of each retail tenant’s compliance with its obligation to pay a percentage rent or any other amount determined on the basis of the tenant’s sales or
gross or net income. 
 ARTICLE 3.   COMPENSATION AND EXPENSES OF PROPERTY MANAGER. 

 

	3.01.    	Fees. 

 (a)         Owner shall pay Property Manager, and Property Manager shall accept as full compensation for the property management services to be rendered to Owner
hereunder during the term hereof, a sum equivalent to three percent (3%) of Gross Monthly Collections (the “Management Fee”). Such compensation shall be payable monthly on or before the 20th of the subsequent month. 

(b)         In the event that Property Manager is requested by
Owner to coordinate and supervise major repairs or improvements to a Property (after its development is completed) that should be capitalized under generally accepted accounting principles (“Capital Expenditures”), Property Manager
shall receive a construction supervision fee equal to a percentage of the hard costs of such Capital Expenditures (the “Construction Supervision Fee”) as follows: 

 

					
	JOB COST:	    	    FEE:	    	 
	 Under $100,000
	    	    8.0%	    
	 $100,000 - $249,999
	    	    6.5%	    
	 $250,000 - $499,999
	    	    6.0%	    
	 $500,000 – 4,999,999
	    	    5.0%	    
	 Over $5,000,000
	    	    Negotiable	    

 (c)         If the Property
includes retail space, Owner may agree to pay a leasing commission (the “Retail Commission”) to Property Manager, at a rate to be agreed upon, for retail leases executed during the term of this Agreement between Owner and the retail
tenants procured or obtained by Property Manager. Notwithstanding the foregoing, Owner shall have the right in its sole and absolute discretion to reject any prospective retail lease, renewal or extension agreement and, in such event, no Retail
Commission or other compensation shall be earned or payable in connection with such proposed retail lease, renewal or extension agreement or the activities of Property Manager, or any other broker in connection therewith. 

(d)         Except with respect to other services provided by
Affiliates of Property Manager in accordance with Section 3.01 (e), which shall be reimbursed by Owner pursuant to Section 3.01(e), Property Manager shall pay from the Management Fee all costs

  
 9 

 
associated with or relating to its own office overhead and management personnel not located or employed at the Property, including without limitation, the salaries, wages and all other
compensation, together with associated unemployment and social security taxes and contributions, as well as expenses specifically stated in this Agreement to be borne by Property Manager. 

(e)         If included in the Approved Capital Budget or with
the prior approval and direction of Owner, Property Manager may obtain services and materials including, but not limited to, advertising, consulting, training, computer hardware and software, forms for use at the Property, contract services,
accounting and bookkeeping services and building materials through the organization, subsidiaries or Affiliates of Property Manager for the benefit of the Property, provided the quality of service and the price thereof is competitive with comparable
prices and services offered by third parties, and the costs therefore shall be reimbursed by Owner. All discounts, rebates and other savings realized thereon by Property Manager are to be passed on to Owner, in full. 

3.02.    Expenses to be Borne by Property Manager.   Unless otherwise provided in the Approved
Operating Budget or Section 4.01 (b) below, expenses incurred in rendering all overall supervisory, lease negotiation (exclusive of lease commissions, if any), rent and other collection (exclusive of on-site personnel, attorneys’ fees
and outside collection agency fees), lease enforcement (exclusive of on-site personnel and attorneys’ fees), lease termination, management, accounting, bookkeeping (exclusive of checks and bank charges) and recordkeeping and other services to
be rendered by Property Manager in connection with the operations of the Property shall be borne by Property Manager and not charged to Owner. Without limiting the generality of the foregoing provisions of this section, the following expenses and
costs incurred by and/or on behalf of Property Manager shall be at the sole cost and expense of Property Manager and shall not be reimbursed by Owner: 

(a)         All costs of gross salary and wages, payroll taxes,
insurance, workmen’s compensation and other costs of Property Manager’s corporate office and executive personnel (other than full time or part time personnel whose positions and salaries are specifically authorized in the Approved
Operating Budget); 
 (b)         All costs incurred as
a result of Property Manager’s breach of this Agreement, and/or the negligence and/or willful misconduct of Property Manager and/or any one or more of its Affiliates, employees, independent contractors, agents and/or other representatives;

 (c)         Unless otherwise provided in the Approved
Operating Budget, all costs of forms, accounting materials, administrative materials, papers, ledgers and other supplies and equipment used in Property Manager’s corporate office, all costs of Property Manager’s data processing equipment
located at Property Manager’s corporate office and all costs of data processing provided by computer service companies to Property Manager’s corporate office; 

(d)         All costs of bonuses, incentive compensation, profit
sharing or any pay advances to employees employed by Property Manager in connection with the operation and management of the Property, except for payments to individuals specifically set forth in the Approved Operating Budget or otherwise approved
in writing by Owner in advance; 

  
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   (e)         All costs of
automobile purchases and/or rentals, unless provided for in the Approved Operating Budget or Approved Capital Budget or the automobile is being provided by Owner; 

  (f)          All costs of comprehensive crime insurance
purchased by Property Manager for its own account; 
   (g)
        All costs of meals, travel and hotel accommodations for Property Manager’s home or regional office personnel who travel to and from the Property, unless expressly authorized by Owner; and

   (h)         All costs (exclusive of fees that are
directly property related, e.g., registration fee) of obtaining and maintaining such licenses, permits, consents and authorizations as are required by Section 2.02(n). 

3.03.     Noncustomary Services.   Notwithstanding anything provided in this Agreement to the
contrary, Property Manager shall not furnish or render to the tenants of the Property services other than those services customarily furnished to tenants of properties similar to the Property unless: (a) Property Manager makes a separate,
adequate charge to tenants for such services; (b) such separate charge is received and retained by Property Manager; (c) Property Manager bears the cost of providing such services; (d) Property Manager first obtains the consent in
writing of Owner; and (e) Property Manager certifies in writing to Owner that (i) Property Manager qualifies as an independent contractor with respect to Owner (and Owner’s direct and indirect beneficial owners) under
Section 856(d)(3) of the Internal Revenue Code, and (ii) Owner (and Owner’s direct and indirect beneficial owners) does not derive or receive any income from Property Manager. For purposes of this Section 3.03, it is agreed,
without limitation, that the furnishing of water, heat, light and air conditioning, public entrances and exits, the performance of general maintenance and of janitorial services and cleaning services, the collection of trash, watchmen or guard
services and parking facilities are examples of services customarily furnished to the tenants of similar properties. 

3.04.     Nonpayment.   If Property Manager fails to make any payment when required or fails to
perform any act required under this Agreement, to the extent sufficient funds are available, then Owner, after ten (10) days’ written notice to Property Manager (or, in the case of any emergency, without notice) and without waiving or
releasing Property Manager from any of its obligations hereunder, may (but shall not be required to) make such payment or perform such act. Owner shall have (in addition to any other right or remedy) the right to offset all costs and expenses
incurred in exercising its rights under this Section 3.04 against any sums due or to become due to Property Manager, including, without limitation, the Management Fee. 
 ARTICLE 4.   PERSONNEL AND BONDING. 

4.01.     Stability of Management Team.   Owner and Property Manager recognize the benefits inherent
in promoting stability in the management team engaged in the operation of the Property. 
   (a)
        Property Manager shall, in the hiring of all employees and in retaining 

  
 11 

 
independent contractors, use reasonable care to select qualified, competent and trustworthy employees and independent contractors. Subject to the provisions of this Section 4.01, the
selection, terms of employment (including rates of compensation) and termination thereof, and the supervision, training and assignment of duties of all employees of Property Manager engaged in the operation of the Property shall be the duty and
responsibility of and shall be determined by Property Manager. All personnel at the Property shall be employees of Property Manager and/or contractors of Property Manager. 

(b)         Property Manager shall employ at Property
Manager’s sole cost and expense (unless otherwise provided in the Approved Operating Budget) at least the following for the Property: 
       (i)         a manager who works from the Records Office and manages the Property and other properties (the costs and expenses
for whom, if provided for in the Approved Operating Budget, shall be pro rated in light of the time spent managing the Property as opposed to other properties); and 

      (ii)         an accountant
working on Property matters and other properties (who shall be part of Property Manager’s in-house staff) who works from a central location (the costs and expenses for whom, if provided for in the Approved Operating Budget, shall be pro rated
in light of the time spent working on the Property as opposed to other properties). 
 4.02.    Fidelity
Bond.   Property Manager, at Property Manager’s cost, shall obtain a fidelity bond or bonds covering Property Manager, and all persons who handle, have access to, or are responsible for, Owner’s monies in such amount and in
such forms as are reasonably acceptable to Owner, at all times and to cover all periods, during the term of this Agreement. Any changes in such bond(s) must be approved by Owner. Property Manager hereby agrees to add Owner as a joint loss payee
under its blanket crime policy as it pertains to the Property. Property Manager hereby assigns all proceeds of said bond(s) as they relate to the Property to Owner and agrees to execute such further assignments and notices thereof as shall be
required by Owner. Such bond(s) shall indemnify Owner against any loss of money or other property which Owner shall sustain through any criminal, fraudulent or dishonest act or acts committed by Property Manager or any of its employees or agents,
during the performance of their obligations under this Agreement or their employment. Alternatively, Property Manager may obtain a crime insurance policy covering the Property Manager, and all persons who handle, have access to, or are responsible
for, Owner’s monies which shall be obtained at Manager’s sole expense and shall provide Owner coverage of Two Million Dollars ($2,000,000.00) per occurrence with a Fifty Thousand Dollar ($50,000.00) deductible which deductible shall be an
expense of Manager. Owner shall be furnished by Property Manager with a certificate or other satisfactory documentation relating to the bond(s) or alternative crime insurance policy immediately upon issuance thereof. 

4.03.    Affiliates.   Property Manager shall not contract for outside services for the Property with any
Affiliate of Property Manager without the prior written consent of Owner. 
 ARTICLE 5.   COMPLIANCE WITH LAWS. 

  
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 5.01.     Compliance.   Property Manager shall comply
fully with and abide by all laws, rules, regulations, requirements, orders, notices, determinations and ordinances (collectively, “Requirements”) of any federal, state or municipal authority to the extent applicable, including, but
not by way of limitation, the federal Occupational Safety and Health Act (OSHA) statutes, rules and regulations, and all requirements of the insurers of the Property and Owner’s liabilities with regard thereto. If the cost of compliance is
(i) not included in the Approved Operating Budget or Approved Capital Budget or (ii) in excess of $10,000, Property Manager shall notify Owner promptly and obtain Owner’s prior written approval prior to making the expenditure.

 5.02.      Notice.   Property Manager shall promptly notify Owner of any
non-compliance with, or alleged violation of, any Requirement after becoming aware of the same. 
  

	5.03.	      Hazardous Wastes. 

      (a)          Property Manager
shall not place, cause or permit to be placed on the Property, other than in the ordinary course of performing its obligations under this Agreement and in compliance with applicable law, any hazardous or toxic wastes or substances, as such terms are
defined by federal, state or municipal statutes or regulations promulgated thereunder (collectively, “Hazardous Wastes”). If Property Manager discovers the existence of any Hazardous Wastes on the Property (other than
Hazardous Wastes used, generated or stored in the ordinary course of business and in compliance with applicable law), Property Manager shall immediately notify Owner. If such Hazardous Wastes were placed or knowingly permitted to be placed on the
Property by Property Manager, Property Manager shall, at its cost, diligently arrange for and complete the immediate removal thereof in accordance with applicable laws and Owner’s directions. Except as expressly provided herein to the contrary,
Property Manager shall not be responsible for any Hazardous Wastes present on the Property prior to the Effective Date hereof, unless deposited thereon by Property Manager, nor shall Property Manager be responsible for any Hazardous Wastes brought
onto the Property by a person other than Property Manager, its agents or employees. Property Manager shall immediately notify Owner of any notice received by Property Manager from any governmental authority of any actual or threatened violation of
any applicable laws, regulations or ordinances governing the use, storage or disposal of any Hazardous Wastes and shall cooperate with Owner in responding to such notice and correcting or contesting any alleged violation at Owner’s expense.

       (b)         
Property Manager shall provide its employees, agents, consultants, governmental entities and the public with any notices or disclosures concerning Hazardous Wastes associated with the Property required to be delivered by Property Manager under any
applicable laws, including without limitation, any notices or disclosures concerning Hazardous Waste which Property Manager has received from Owner. Owner shall have the right to review such notices and disclosures before their distribution or
submission by Property Manager and shall have the right, but not the obligation, to prescribe the form and content of any such notices or disclosures as long as the form and content prescribed by Owner comply with all applicable laws relating to
such notices or disclosures. Owner shall provide Property Manager with any notices or disclosures concerning Hazardous Waste associated with the Property required to be delivered by Owner under any applicable laws. 

 

  
 13 

 (c)         Without
limiting any other indemnification obligations provided by law or specified in this Agreement, Property Manager shall indemnify, defend (at Property Manager’s sole cost and expense and with legal counsel approved by Owner which approval shall
not be unreasonably withheld) and hold harmless the Owner, its agents, employees and contractors from and against any and all claims, demands, losses, damage, disbursements, liabilities, obligations, fines, penalties, actions, causes of action,
suits, costs and expenses, including without limitation, reasonable attorneys’ fees and costs, and all other professionals’ or consultants’ expenses incurred in investigating, preparing for, serving as a witness in, or defending any
action or proceeding, whether actually commenced or threatened, or in removing or remediating any Hazardous Wastes on, under, from or about the Property, arising out of or relating to, directly or indirectly, Property Manager’s breach of any of
the terms of this Section 5.03. This indemnity shall survive termination of this Agreement. 

5.04.     Asbestos and Similar Compliance Matters.   If the Property is subject to the Occupational
Safety and Health Administration’s regulations relating to asbestos, or to any state law or regulation relating to asbestos or to any state law or regulation relating to carcinogenic or toxic chemicals, Property Manager shall, at Owner’s
expense, comply with such laws and regulations as they relate to the Property. 
 ARTICLE 6. ACCOUNTING AND FINANCIAL
MATTERS. 
 6.01.     Books and Records.   Property Manager shall cause to be kept for
Owner at the Records Office accounts and books and records of the Property, pursuant to methods and systems, and in form and substance, approved by Owner, showing all receipts, expenditures and all other records necessary or convenient for the
recording of the results of operations of the Property. Such books are to be maintained on both a cash and accrual accounting basis utilizing the Yardi accounting software hosted by Legacy Partners Residential, Inc. Such accounts, books and records
shall be kept in a secure location at the Records Office and shall be open to inspection by Owner and its representatives during normal business hours and Property Manager agrees to cooperate in making such accounts, books and records available for
inspection. Upon the effective date of any termination of this Agreement, all of such books and records shall be delivered forthwith to Owner so as to ensure the orderly continuance of the operation of the Property. Cut-off date for books on a
monthly basis will be the last working day of each month. 
  

	6.02.     	 Reports and Reconciliation of Accounts. 

(a)         On or before the last day of each month, Property
Manager shall provide such reports and data to Owner as shall be required from time to time by Owner. Without limitation, Property Manager shall provide the following to Owner for the current calendar month: 

(i)          A detailed report of all monies collected
(identified by tenant or other source) which shall include, but not be limited to, rents collected (including laundry or other vending income, garage or parking income, percentage rent and other amounts payable under any retail leases, if any),
rents prepaid beyond the current 

  
 14 

 
month, and security deposits collected, and of vacancies and delinquent rents. 
 (ii)           A detailed report of all expenses paid. 

(iii)          A comparison of the current month and
year-to-date account of actual revenue and expenses to budgeted amounts; calculations of monthly and year-to-date variances from the Approved Operating and Capital Budgets, appropriate descriptions of any significant monthly or year-to-date
variances, and, if requested by Owner, a revised annualized projection of monies to be collected and expenses to be paid for the balance of the calendar year. 

(iv)          A written report describing any material
changes in the Property which occurred during the month or are anticipated to occur. 

(v)           A reconciliation on of amounts receivable
or due to Owner accompanied by payment of same. 

(vi)          A reconciliation of the Property Bank
Account, including a copy of the bank statement. 

(vii)         Any other special information as required from time
to time by Owner. 
 (b)        Property Manager shall
provide a monthly management report to be submitted with the applicable monthly financial statements which shall contain without limitation, the recommendations of Property Manager regarding the physical condition or operation of the Property and
leasing status reports (which shall include a list of retail leases executed, written lease proposals, security deposits and rents received, and leasing commissions earned on each retail lease). In addition, on or before January 30 after the
end of each calendar year, Property Manager shall at its sole cost and expense submit to Owner an annual report summarizing all retail leasing activities, if any. 

(c)         Periodically, Property Manager shall furnish to Owner
as reasonably requested: 
 (i)          Market
surveys and any other tenant information in accordance with Section 2.02(q) above. 

(ii)          Reports covering on-site physical inspections
and operating reviews. 
 (iii)         A current
inventory of personal property and equipment used in connection with the Property. Such an inventory shall be submitted to Owner no later than thirty (30) days prior to the end of each calendar year. 

6.03.       Audit.   Owner shall have the right to conduct an audit of the Property’s
operations at any time. Property Manager shall promptly correct all weaknesses and errors disclosed by Owner’s audits, and shall timely inform Owner in writing of all corrective actions taken. Owner’s audit shall

  
 15 

 
be at Owner’s expense unless an error is discovered that is equal to or greater than two percent (2%) of annual gross receipts of the Property for the period audited, in which case
Property Manager shall bear the full cost of the subject audit. Any adjustments in amounts due and owing from Owner or Property Manager shall be paid within fifteen (15) calendar days following Owner’s receipt of the audit. 

6.04.     Other Reports and Statements.   Property Manager shall furnish to Owner, as promptly as
practicable, such other reports, statements or other information with respect to the operations of theProperty as Owner may from time to time reasonably request. 
 6.05.     Contracts and Other Agreements.   Property Manager shall maintain at the Records Office one original (or a copy, if no original is available) of all
contracts, occupancy leases, lease abstracts, tenant income certifications, equipment leases, maintenance agreements and all other agreements relating to the Property. 
 6.06.      Final Accounting.   Following termination of this Agreement, whether by expiration of the term hereof or sooner, Property Manager shall be responsible
for preparing a final accounting within thirty (30) days after the effective date of said termination. Such final accounting shall set forth all current income, all current expenses, and all other expenses contracted for on Owner’s behalf
but not yet incurred in connection with the Property. The final accounting shall also include all other items reasonably requested by Owner. Property Manager shall be entitled to receive a prorated share of its Management Fee to the date of
termination and all earned but unpaid Construction Supervision Fees. 
 6.07.      Tax
Returns.   Property Manager shall file all tax returns for all sales taxes, payroll taxes and other taxes directly related to the Property; excluding, however, federal and state income tax returns of Owner. 

6.08.      Certification.   All financial statements shall be certified as true and correct in
all material respects by Property Manager. 
 6.09.      SAS 70 Type II Designation.  
The management of the Property shall be designated as SAS 70 Type II (to the extent such designation is still then available) compliant by a certified public accountant on or prior to December 1st of 2010 and each subsequent year after 2010.
The SAS 70 Type II report should be an unqualified report and for 2010 the report shall cover at minimum a period from July through October and for each subsequent year after 2010, the report shall cover at minimum a period from April through
September on an annual basis and must be issued by December 1st of each calendar year. If the Property Manager has a joint management agreement, all companies in the joint management agreement must be covered by the annual SAS 70 Type II report
or each company is required to provide the Owner annually their individual SAS 70 Type II unqualified report. 
 ARTICLE
7.   BANK ACCOUNTS. 
 7.01.      Property Accounts. 

(a)         All funds received by Property Manager derived from
the operation of the 

  
 16 

 
Property, as well as working capital furnished by Owner, shall be deposited in an account (the “Property Bank Account”) in Property Manager’s name, as agent
for Owner, in an FDIC-insured bank designated or approved by Owner, which such account will be in compliance with applicable law. Owner may direct Property Manager to change depository banks or the depository arrangements. All funds so deposited
shall be deemed to be trust funds held by Property Manager for the benefit of Owner and shall be held and disbursed as provided herein. Property Manager shall establish another custodial and/or trust account as required by applicable law or the
Owner for the deposit of tenant security deposits (the “TSD Account”). 
 (b)         A Working Capital Reserve equal to Fifty Thousand Dollars ($50,000) (the “Working Capital Reserve”) shall be funded upon execution of
this Agreement and maintained in the Property Bank Account at all times throughout the term of the Agreement. A monthly cash payment will be made by Property Manager to Owner solely from funds in the Property Bank Account in excess of the amount of
the Working Capital Reserve in an amount equal to the excess, if any, of the current month projected cash receipts less the current month’s budgeted operating and capital expenditures. This payment will be made to Owner on or before the tenth
(10th) day of each month. A reconciliation of
receipts and expenditures will be prepared by Property Manager in accordance with Section 6.02 above to account for any prior period operating cash overage or shortage and any additional cash payments due to Owner will be made to Owner no later
than the twenty-fifth (25th) day of the current month
and any overpayments made to Owner will be returned to Property Manager for deposit in the Property Bank Account no later than the thirtieth (30th) day of the current month. 

(c)         No non-Property funds shall be commingled with the
funds in the Property Bank Account or TSD Account (collectively, the “Accounts”). Property Manager may not, under any circumstances, write a check payable to or in favor of, or transfer funds to, Property Manager or any Affiliate of
Property Manager from the Accounts other than to (i) reimburse itself or an Affiliate for expenditures made on behalf of Owner and approved by Owner, or (ii) pay itself the Management Fee or other fee payable hereunder; provided that,
within fifteen (15) days after payment to itself of the Management Fee or other fee, Property Manager shall provide Owner with a statement setting forth the calculations made in computing the Management Fee or other fee in detail reasonably
satisfactory to Owner. Only those persons specifically authorized by Property Manager and approved by Owner shall have authority to write checks from the Property Bank Account. There shall be monetary limits on the checks Property Manager shall be
authorized to write. Checks in excess of $25,000 (excluding debt service and those items provided for in the Approved Operating Budget) shall require the prior written consent of Owner. 

7.02.      Expenses Paid from Property Bank Account.   The following costs are to be paid
directly from the Property Bank Account: 

(a)          Any and all costs necessary for the management,
operation and maintenance of the Property, provided such costs are provided for and are within the limits of the Approved Operating Budget or specifically approved in writing by Owner; 

  
 17 

 (b)        Capital
expenditures provided for in the Approved Capital Budget or authorized in writing by Owner and directed by Owner to be incurred by Property Manager; and 

(c)        Any and all costs necessary for emergency expenses as
provided in Section 2.02(f). 
      Property Manager shall not be obligated to make
any advance to or for the account of Owner or to pay any sums except out of funds in the Property Bank Account. 
 ARTICLE
8.  INSURANCE AND INDEMNITY. 
 8.01.     INDEMNIFICATION. 

(A)        PROPERTY MANAGER AGREES TO AND SHALL, COMPLETELY
AND TO THE MAXIMUM EXTENT PERMITTED BY LAW, INDEMNIFY, DEFEND (WITH COUNSEL REASONABLY ACCEPTABLE TO OWNER), PROTECT AND HOLD OWNER AND ITS RESPECTIVE PRINCIPALS, OFFICERS, DIRECTORS, SHAREHOLDERS, PARTNERS, MEMBERS, EMPLOYEES, AUTHORIZED
SUCCESSORS, AUTHORIZED ASSIGNS AND AGENTS HARMLESS FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, ACTIONS, FINES, PENALTIES, LIABILITIES, LOSSES, TAXES, DAMAGES, INJURIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ACTUAL ATTORNEYS’,
CONSULTANTS’ AND EXPERT WITNESS’ FEES, AND DEFENSE COSTS AT BOTH THE TRIAL AND APPELLATE LEVELS) (COLLECTIVELY, “DAMAGES”) IN ANY MANNER RELATED TO, ARISING OUT OF OR RESULTING FROM (I) ANY FAILURE OF PROPERTY MANAGER TO
PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT CAUSING DAMAGE TO OWNER, BUT ONLY TO THE EXTENT SUCH DAMAGES ARE NOT COVERED BY THE INSURANCE MAINTAINED BY OWNER UNDER SECTION 8.05 BELOW, (II) ANY ACTS OF PROPERTY MANAGER BEYOND THE SCOPE OF ITS
AUTHORITY UNDER THIS AGREEMENT, (III) ANY NEGLIGENCE, WILLFUL MISCONDUCT OR OTHER WRONGFUL OR INTENTIONAL ACTS OR OMISSIONS OF PROPERTY MANAGER, BUT WITH REGARD TO NEGLIGENCE OF PROPERTY MANAGER (AS OPPOSED TO GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR
OTHER WRONGFUL OR INTENTIONAL ACTS OR OMISSIONS) ONLY TO THE EXTENT SUCH DAMAGES ARE NOT COVERED BY THE INSURANCE MAINTAINED BY OWNER UNDER SECTION 8.05 BELOW, (IV) ANY INJURY, DAMAGE OR DEATH TO PROPERTY MANAGER, ITS OFFICERS, DIRECTORS, PARTNERS,
EMPLOYEES, AGENTS AND OTHER REPRESENTATIVES, AND (V) ANY INJURY, DAMAGE AND/OR DEATH TO ANY INDEPENDENT CONTRACTORS OF PROPERTY MANAGER. THE OBLIGATIONS OF PROPERTY MANAGER UNDER THIS SUBSECTION (A) SHALL APPLY ONLY TO THE EXTENT DAMAGES
OF AN INDEMNIFIED PARTY ARE NOT FULLY PAID BY OWNER’S 

  
 18 

 
COMMERCIAL GENERAL LIABILITY INSURANCE DESCRIBED BELOW IN SECTION 8.05(B). NOTWITHSTANDING ANY OTHER PROVISIONS OF THIS AGREEMENT TO THE CONTRARY, PROPERTY MANAGER’S OBLIGATIONS UNDER THIS
SECTION 8.01 SHALL SURVIVE THE EXPIRATION, TERMINATION OR CANCELLATION OF THIS AGREEMENT, AND SHALL BIND ANY AND ALL OF THE HEIRS, SUCCESSORS, ASSIGNS, TRANSFEREES AND REPRESENTATIVES OF PROPERTY MANAGER. THE RIGHTS OF OWNER UNDER THIS SECTION 8.01
SHALL ALSO INURE TO THE BENEFIT OF ANY AND ALL OF THEIR PRINCIPALS, OFFICERS, DIRECTORS, SHAREHOLDERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS, TRUSTEES, HEIRS, BENEFICIARIES, TRUSTS, SUCCESSORS, ASSIGNS, TRANSFEREES AND REPRESENTATIVES, AND TO THE
BENEFIT OF ANY AND ALL PERSONS AND LEGAL ENTITIES WHO ARE, COULD BE OR ARE ALLEGED TO BE, LIABLE FOR THE OBLIGATIONS OF OWNER OR SUCH PRINCIPALS, OFFICERS, DIRECTORS, SHAREHOLDERS, PARTNERS, MEMBERS, EMPLOYEES, AGENTS, TRUSTEES, HEIRS,
BENEFICIARIES, TRUSTS, SUCCESSORS, ASSIGNS, TRANSFEREES AND REPRESENTATIVES. 

(B)        OWNER AGREES TO AND SHALL, COMPLETELY AND TO THE
MAXIMUM EXTENT PERMITTED BY LAW, INDEMNIFY, DEFEND (WITH COUNSEL REASONABLY ACCEPTABLE TO PROPERTY MANAGER), PROTECT AND HOLD PROPERTY MANAGER (AND ITS EMPLOYEES, AGENTS, SUCCESSORS, ASSIGNS AND TRANSFEREES) HARMLESS FROM AND AGAINST ANY AND ALL
DAMAGES IN ANY MANNER RELATED TO OR ARISING OUT OF PROPERTY MANAGER’S PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT WHICH ARE (A) WITHIN THE SCOPE OF ITS AUTHORITY UNDER THIS AGREEMENT, AND (B) NOT WITHIN THE SCOPE OF PROPERTY
MANAGER’S INDEMNITY SET FORTH IN SECTION 8.01(A) ABOVE. 

(C)        THE RIGHTS AND OBLIGATIONS OF INDEMNITY PROVIDED IN
THIS SECTION 8.01 SHALL NOT BE EXCLUSIVE AND SHALL BE IN ADDITION TO SUCH OTHER RIGHTS AND OBLIGATIONS AS OTHERWISE EXIST INDEPENDENT OF THE PROVISIONS OF THIS SECTION 8.01. 

8.02.    Property Manager’s Insurance Responsibility. 

(a)        The Property Manager shall maintain during the term of
this Agreement, and any extensions or renewals thereof, each of the following insurance coverages with deductibles, if applicable: 
  

	 	(i)	 Workers’ Compensation Insurance at no less than statutory requirements including employer’s liability with a limit of not less than
$1,000,000 each accident for bodily injury accident and $1,000,000 each employee and policy limit for bodily injury by disease. 

  
 19 

(ii)        Non-Occupational Disability Insurance when required
by law, if applicable. 
 (iii)       Commercial General
Liability Insurance with a minimum combined bodily injury and property damage per occurrence limit of liability of $5,000,000, a products-completed operations aggregate limit of $5,000,000 and a general aggregate limit of $10,000,000. Limits of
liability may be satisfied through the maintenance of a combination of primary and umbrella/excess liability policies. 
 (iv)       Automobile Liability Insurance covering owned, hired and nonowned vehicles, separate coverage in an amount not less than $1,000,000 combined single limit for
bodily injury and property damage of $1,000,000 each accident. 

(v)        Errors and Omissions Insurance coverage in an amount
not less than $1,000,000 each claim and general aggregate. 

(b)        Property Manager shall promptly provide Owner no later
than three (3) days after the Effective Date with certificates of insurance or other satisfactory documentation which evidence that all required insurance is in full force and effect. Upon request, Property Manager shall provide Owner with a
copy of the foregoing insurance policies. The insurance as required in Subsections 8.02(a)(i), (ii) and (v) to be maintained by Property Manager shall provide that the insurer shall provide to Owner thirty (30) days’ advance
notice of cancellation or material change. The liability policies required by Subsections 8.02(a)(iii) and (iv) shall provide that the insurer shall provide to Owner thirty (30) days’ advance notice of cancellation or material change
and shall name Owner and its principals, officers, directors, shareholders, partners, members, trustees, beneficiaries and employees as additional insureds. All liability policies shall be written to apply to all bodily injury, property damage,
personal injury and other covered loss, however occasioned, which occurred or arose (or the onset of which occurred or arose) in whole or in part during the policy period. Such liability policies also shall contain endorsements including
cross-liability and waiver of subrogation, and shall contain such other endorsements as may be reasonably required by Owner. The liability policies required by Subsections 8.02(a)(iii) shall include broad form contractual liability insurance
coverage. 
 8.03.    Contract Documents; Indemnity Provisions.  Property Manager shall use
its best efforts to include in service and supply contracts prepared or executed by Property Manager respecting the Property provisions to the effect that the other contracting party shall, to maximum extent permitted by law, indemnify, defend (with
counsel reasonably acceptable to Owner), protect and hold harmless Property Manager and Owner and their respective principals, officers, directors, shareholders, partners, members, managers, trustees, beneficiaries and employees from and against any
and all Damages in any manner related to, arising out of and/or resulting from any damage to or injury to, or death of, persons or property caused or occasioned by or in connection with or arising out of any acts or omissions of said contracting
party or its employees or agents or contractors and agree that no principal, officer, director, shareholder, partner, member, manager, investor, trustee, officer, employee or agent of Owner shall be personally liable for any of the obligations of
Owner 

  
 20 

 
hereunder. 
 8.04.    Ratings of Insurance
Companies.  All insurance required to be carried by Property Manager shall be written with companies having a policyholder and asset rate, as circulated by Best’s Insurance Reports, of A-:VIII or better unless an exception is
approved by Owner. 
 8.05.    Owner’s Insurance Responsibility.  Owner shall maintain
during the term of this Agreement, and any extensions thereof, each of the following insurance coverages which shall be primary and noncontributory insurance: 

(a)        All-Risk Property Damage Insurance and Loss of Rents
Insurance coverage on the Property. 

(b)        Commercial General Liability Insurance coverage with a
minimum general aggregate limit of not less than $10,000,000. Property Manager shall be designated an insured under Owner’s commercial general liability insurance policy while acting within the scope of its authority as Owner’s property
manager. All other terms and conditions of this Agreement (including, without limitation, the indemnification provisions of Section 8.01 and Property Manager’s obligation to maintain insurance described in Section 8.02) shall not be
affected by this Section 8.05(b). 
 8.06.    Property Manager’s Duties in Case of
Loss.  Property Manager shall: 

(a)        Immediately notify Owner of any fire or other damage
to the Property; and in the event of any serious damage to the Property or any releases of hazardous materials or contaminants, telephone Owner so that an insurance adjustor may view the Property before repairs are started, but in no event shall
Property Manager settle any losses, complete loss reports or adjust losses on behalf of Owner or meet with any federal, state or local regulatory agency without the prior written consent of Owner. 

(b)        Promptly notify Owner of any personal injury or
property damage occurring to or claimed by any tenant or third party on or with respect to the Property; and immediately forward copies to Owner of any summons, subpoena or other like legal document served upon Property Manager relating to actual or
alleged potential liability of Owner, Property Manager or the Property. 
 ARTICLE 9.  RELATIONSHIP OF PARTIES and
REPRESENTATIONS and WARRANTIES. 
 9.01.    Nature of Relationship.  In taking any
action pursuant to this Agreement, Property Manager will be acting only as an independent contractor, and nothing in this Agreement, expressed or implied, shall be construed as creating a partnership or joint venture or an employment relationship or
that of principal and agent between Property Manager (or any person employed by Property Manager) and Owner or any other relationship between the parties hereto except that of property owner and independent contractor. 

  
 21 

 9.02.    Communications Between Parties.  Owner shall
rely on Property Manager to direct and control all operations at the Property; provided, however, Owner reserves the right to communicate directly with the manager specified in Subsection 4.0l(b)(i), Property Manager’s accountant(s) working on
Property matters, all tenants and tenants’ representatives, all lease prospects, all advertising, management, cleaning and servicing firms doing work for the Property, and all parties contracting with Owner or Property Manager with respect to
the Property. 
 9.03.    Relationship of Owner and Property Manager with Respect to
Leasing.  Property Manager shall not be entitled to any commission or other fee in connection with the leasing of apartment units at the Property, except as specifically provided in Article 3 hereof. On-site employees of Property
Manager shall be entitled to receive incentive leasing bonuses as may be included in the Approved Operating Budget. Property Manager shall procure references from prospective tenants, investigate such references, and use its best judgment in the
selection of prospective tenants. As soon as practicable prior to any residential unit vacancy, Property Manager shall prepare rental listings and attempt to find a new tenant for such unit. Prior to entering into any leasing arrangement with any
retail tenant, if any, Property Manager shall prepare and submit to Owner for its approval a written lease proposal setting forth proposed leasing terms, including, without limitation, duration of the lease, rental rate, tax and operating expense
escalations, consumer price index adjustments, common area maintenance charges or other rental adjustments, rent and/or parking/other concessions, insurance requirements, expansion and renewal rights, tenant improvement allowance, the desired mix of
tenants, and policy with respect to guarantees, and such other matters as Owner deems appropriate. The parties intend that Property Manager shall be obligated to give available residential units and any retail space at the Property exposure at least
equal to the exposure Property Manager gives other available residential units and retail space in similar projects owned, leased, managed or operated by Property Manager or an Affiliate, and Owner shall have the right to terminate this Agreement
pursuant to Section 10.02(e) below if Property Manager fails so to do. The parties also intend that the Property Manager shall be obligated to use reasonable efforts to retain existing tenants at the Property, and Owner shall have the right to
terminate this Agreement pursuant to Section 10.02(e) below if Property Manager fails so to do. 

9.04.    No Sales Brokerage Agreement.  There are no sales brokerage agreements between Owner and
Property Manager; Property Manager has no brokerage agreement or understanding (exclusive or otherwise) with respect to the sale of all or part of the Property on behalf of Owner; and in the event that Owner effects a sale of the Property, whether
on its own or through the use of others, brokers or otherwise, Property Manager shall be entitled to no compensation, fee or commission or other payment on account of such sale. Unless specifically approved by Owner, Property Manager shall have no
right to obligate Owner for the payment of any fees or commissions to any outside real estate agent or broker for tenant leases. Except as expressly provided to the contrary elsewhere herein or as otherwise approved by Owner in writing, Property
Manager shall be fully responsible for any compensation due employees of Property Manager and any real estate brokers cooperating with Property Manager. Property Manager shall indemnify and hold Owner harmless with respect to any action, proceeding,
claim, liability, loss, cost or expense (including reasonable attorneys’ fees) arising in connection with any claim for brokerage or finder’s fees or any other like payment payable as a result of a breach under this Section 9.04 by
Property Manager. Property Manager’s obligations with respect to the foregoing indemnity shall survive the expiration or earlier termination of this 

  
 22 

 Agreement. 
 9.05.    Confidentiality.  Except as may be otherwise required by law, Property Manager and Owner shall maintain the confidentiality of all matters pertaining to this
Agreement and all operations and transactions relating to the Property. 
 9.06.    Property Manager Not
to Pledge Owner’s Credit.  Property Manager shall not, except in the purchase of goods, wares, merchandise, materials, supplies and services reasonably required in the ordinary course of business in the operation of the Property
or as may be otherwise required in the performance of its obligations under this Agreement and in either case as previously approved by Owner, pledge the credit of Owner; nor shall Property Manager, in the name or on behalf of Owner, borrow any
money or execute any promissory note, installment purchase agreement, bill of exchange or other obligation binding on Owner or the Property. 
 9.07      Representations and Warranties. 
 (a)      Property Manager represents and warrants that (i) Property Manager has full power, authority and legal right to execute, deliver and perform this Agreement and
to perform all of its obligations hereunder and (ii) the execution, delivery and performance of all or any portion of this Agreement do not and will not (x) require any consent or approval from any governmental authority, (y) violate
any provisions of law or any government order or (z) conflict with, result in a breach of, or constitute a default under, the charter or bylaws of Property Manager or any instrument to which Property Manager is a party or by which it or any of
its property is bound. 
 (b)      Owner represents and warrants
that it has full power, authority and legal right to execute, deliver and perform this Agreement. 
 (c)       Property Manager acknowledges and agrees that Owner is relying upon the representations and warranties set forth in Sections 9.07 (a) in entering into this
Agreement, and Owner acknowledges and agrees that Property Manager is relying upon the representations and warranties set forth in Section 9.07 (b) in entering into this Agreement. 

 

	ARTICLE 10.          TERMINATION.	 

10.01.     Termination by Owner Without Cause.  This Agreement may be terminated by Owner at any
time without cause and upon written notice to Property Manager by Owner, effective thirty (30) days from the date of such notice, which shall be considered the effective date of termination. 

10.02.     Termination by Owner for Cause.  This Agreement may be terminated by Owner (or the
Property Manager may be required by Owner to change its personnel assigned as Property Manager for the Property) at any time during the term hereof upon written notice to Property Manager effective immediately for any of the following causes:

 (a)        If Property Manager shall suspend or
discontinue business; 

  
 23 

 (b)      If a court shall
enter a decree or order for relief in respect of Property Manager in an involuntary case under the federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal, state or foreign bankruptcy, insolvency or other similar
law, or appoint a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of Property Manager or for any substantial part of its property, or for the winding-up, dissolution or liquidation of its affairs, and such
decree or order shall continue unstayed and in effect for a period of sixty (60) consecutive days or if Property Manager shall consent to any of the foregoing; 

(c)      If Property Manager shall commence a voluntary case or action
under the federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy insolvency or other similar law, or consent to the appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of Property Manager or for any substantial part of its property, or make any assignment for the benefit of creditors, or admit in writing that it is unable, or fail generally to pay its
debts as such debts become due, or take action in furtherance of any of the foregoing; 

(d)      If Property Manager is grossly negligent or engages in willful
misconduct with respect to its duties or obligations to Owner under this Agreement; or 

(e)      If Property Manager commits any other material default in the
performance of any of its obligations under this Agreement, unless such default is cured with thirty (30) days after written notice of such default is given to Property Manager, or, if not curable within thirty (30) days, commenced within
such thirty (30) days and diligently prosecuted to completion. 
 10.03.  Termination by Property
Manager.    This Agreement may be terminated by Property Manager, without cause, upon ninety (90) days’ written notice to Owner. This Agreement may be terminated by Property Manager for cause if Owner commits any
material default in the performance of any of its obligations under this Agreement, including, without limitation, its obligation to pay to Property Manager any fees due and payable under Section 3.01 above, and such default shall continue for
a period of thirty (30) days after notice thereof by Property Manager to Owner. 
 10.04.  Orderly
Transition.  In the event of any termination or expiration of this Agreement, Property Manager shall use its best efforts to effect an orderly transition of the management and operation of the Property to an agent designated by Owner
and to cooperate with such agent, and the Accounts shall be immediately transferred as directed by Owner. Upon termination or expiration of this Agreement, Property Manager’s right to withdraw funds from the Accounts or any other account which
contains funds collected in connection with the Property shall terminate. Property Manager shall remove all signs that it may have placed at the Property containing its name and repair any resulting damage. In addition, Property Manager shall
deliver the following to Owner on or before thirty (30) days following the termination or expiration date: 
 (a)      A final accounting, reflecting the balance of income and expenses for the 

  
 24 

 
Property as of the date of termination or expiration; 
 (b)      Any monies due to Owner and any tenant security deposits held by Property Manager with respect to the Property; and 

(c)      All keys, property, supplies, records, contracts, drawings, leases
and correspondence, in existence at the time of termination or expiration and all other papers or documents pertaining to the Property. All data, information and documents shall at all times be the property of Owner. 

10.05.  Rights Which Survive Termination or Expiration.  Termination and/or expiration of this Agreement shall
in no event terminate or prejudice any right arising out of or accruing in connection with the terms of this Agreement attributable to events and circumstances occurring prior to termination or expiration of this Agreement, and/or all rights and
obligations specified in this Agreement to survive such termination and/or expiration. 
  

	ARTICLE 11.      MISCELLANEOUS.	 

11.01.  Governing Law.  This Agreement shall be construed and enforced in accordance with the laws of the
State in which the property is located without going effect to the conflict of law principles of such State. 

11.02.  Table of Contents and Headings.  The Table of Contents preceding this Agreement and the headings of
the various articles and sections of this Agreement have been inserted for convenient reference only and shall not have the effect of modifying or amending the express terms and provisions of this Agreement. 

11.03.  Entire Agreement.  This Agreement contains the entire agreement between the parties with regard to the
subject matter hereof, and this Agreement shall not be amended, modified or cancelled except in writing signed by both parties or by their duly authorized agents. 
 11.04.  Successors and Assigns.  All terms, conditions and agreements herein set forth shall inure to the benefit of, and be binding upon the parties, and any and all of their
respective permitted heirs, successors, representatives and assigns. Notwithstanding the foregoing, this Agreement may not be assigned by Property Manager nor shall Property Manager delegate any of its duties hereunder without Owner’s prior
written consent, which consent may be granted or withheld in Owner’s sole and absolute discretion. Any attempted assignment or delegation by Property Manager hereunder in violation of this Section 11.04 shall be null and void and of no
force or effect. 
 11.05.  Waiver.  The failure of either party to insist upon a strict performance
of any of the terms or provisions of this Agreement or to exercise any option, right or remedy herein contained, shall not be construed as a waiver or as a relinquishment for the future of such terms, provisions, option, right or remedy, but the
same shall continue and remain in full force and effect. No waiver by either party of any terms or provisions hereof shall be deemed to have been made unless expressed in writing 

  
 25 

 
and signed by such party. In the event of consent by Owner to an assignment of this Agreement, no further assignment shall be made without the express written consent of Owner. 

11.06.  Severability.  Whenever possible each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under all applicable laws. However, if any provision of this Agreement is invalid under any applicable law, such provision shall be ineffective only to the extent of such invalidity without invalidating the remaining
provisions of this Agreement and, to the fullest extent possible, this Agreement shall be interpreted so as to give effect to the stated written intent of the parties. 
 11.07.   Time.  Time is of the essence of this Agreement. 
 11.08.  Attorneys’ Fees.  In the event of any legal or equitable proceeding for enforcement of any of the terms or conditions of this Agreement, or any alleged disputes,
breaches, defaults or misrepresentations in connection with any provision of this Agreement, the prevailing party in such proceeding, or the non-dismissing party where the dismissal occurs other than by reason of a settlement, shall be entitled to
recover its reasonable costs and expenses, including without limitation reasonable attorneys’ fees and costs, paid or incurred in good faith at the pre-trial, trial and appellate levels, and in enforcing any award or judgment granted pursuant
thereto. Any award, judgment or order entered in any such proceeding shall contain a specific provision providing for the recovery of attorneys’ fees and costs incurred in enforcing such award or judgment, including without limitation
(a) post-award or post-judgment motions, (b) contempt proceedings, (c) garnishment, levy, and debtor and third party examinations, (d) discovery and (e) bankruptcy litigation. The “prevailing party”, for purposes
of this Agreement, shall be deemed to be that party that obtains substantially the result sought, whether by dismissal, award or judgment. 
 11.09.  Further Acts.  Owner and Property Manager shall execute such other documents and perform such other acts as may be reasonably necessary and/or helpful to carry out the
purposes of this Agreement. 
 11.10.  No Advertising.  No publication, announcement or other public
advertisement of the name of Owner in connection with the Property shall be made by Property Manager, except as may be required by applicable law or with the prior written consent of Owner. 

11.11.  Signs.  Signs and building directories are prohibited unless specifically approved by Owner. Property
Manager may place reasonable leasing signs as required with the prior approval of Owner. All signs must meet all requirements of local sign codes and ordinances. 
 11.12.  Owner Exculpatory Clause: Waivers of Jury Trial and Punitive Damages.  Property Manager agrees that no principal, officer, director, shareholder, partner, member,
investor, manager, representative, trustee, officer, employee or agent of Owner or of its members or partners shall be personally liable for any of the obligations of Owner hereunder and that Property Manager must look solely to the assets of Owner
for the enforcement of any claims against Owner arising hereunder. In addition, Property Manager hereby waives in connection with any such claim any right it may have to a jury trial and any punitive or consequential damages. 

  
 26 

 11.14.  Notices.  Any notice required or desired to be given
under this Agreement shall be given in writing and shall be deemed sufficiently given and served for all purposes when personally delivered or delivered by any generally recognized courier, or by certified or registered mail, addressed to the
appropriate address shown below. Any notice given by depositing it in the United States mail as certified or registered mail, postage prepaid, shall be deemed given five (5) business days after deposit. 

 

			
	 Owner:
	  	KBS Legacy Partners Dakota Hill LLC
		  	c/o KBS Capital Advisors, LLC
		  	620 Newport Center Drive, Suite 1300
		  	Newport Beach, California 92660
		  	Attn: David Snyder
		
	 With a copy to:
	  	KBS Legacy Partners Dakota Hill LLC
		  	c/o Legacy Partners Residential Development, Inc.
		  	13155 Noel Road, Suite 825
		  	Dallas, Texas 75240-6814
		  	Attn: Spencer Stuart, Jr.
		
	 With a copy to:
	  	KBS Legacy Partners Dakota Hill LLC
		  	c/o Legacy Partners Residential Realty LLC
		  	4000 E. Third Avenue, Sixth Floor
		  	Foster City, California 94404
		  	Attn: W. Dean Henry/Guy K. Hays
		
	 Property Manager:
	  	Milestone Management, L.P.
		  	5429 LBJ Freeway, Suite 800
		  	Dallas, Texas 75240
		  	Attn: Steve Lamberti
		
	 With a copy to:
	  	Milestone Management, L.P.
		  	5429 LBJ Freeway, Suite 800
		  	Dallas, Texas 75240
		  	Attn: Legal Department

 11.15.  Counterparts.  This Agreement may be executed in any number of
counterparts and each such counterpart shall be deemed to be an original instrument, but all such executed counterparts together shall constitute one and the same instrument. 
 [remainder of page intentionally left blank] 

  
 27 

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

													
		 	OWNER:	  	KBS LEGACY PARTNERS DAKOTA HILL LLC, a
 Delaware limited
liability company
	  	
					
		 		  	By:	  	KBS LEGACY PARTNERS PROPERTIES
 LLC, a Delaware limited
liability company, its
 sole member
	  	
						
		 		  		  	By:	  	 KBS LEGACY PARTNERS LIMITED
 PARTNERSHIP, a Delaware limited
 partnership, its sole member
	  	
							
		 		  		  		  	 By:
	  	 KBS LEGACY PARTNERS

APARTMENT REIT, INC., a
 Maryland corporation,
its sole
 general partner
	  	
							
		 		  		  		  		  	By: /s/ Guy K. Hays                    	  	
		 		  		  		  		  	Name: Guy K. Hays	  	
		 		  		  		  		  	Title: Executive Vice President	  	
					
		 	PROPERTY MANAGER:	  		  	MILESTONE MANAGEMENT, L.P., a Delaware
 limited partnership,
doing business in Texas as
 TMG Milestone Management, L.P.
	  	
						
		 		  		  	BY:	  	 Milestone Management GP, LLC, a
 Delaware limited liability company, its
 general partner, doing business in Texas

as TMG Milestone Management GP, LLC
	  	
						
		 		  		  		  	By: /s/ Steve
Lamberti                               	  	
		 		  		  		  	Name:  Steve
Lamberti                             	  	
		 		  		  		  	Its:    President and
COO                            	  	

  
 28 

 EXHIBIT A 
 LEGAL DESCRIPTION OF PROPERTY 
 BEING ALL of Lot 2R, Block A, of JEFFERSON AT VALLEY RANCH
SUBDIVISION, REVISED, an addition to the City of Irving, Dallas County, Texas, described by Plat recorded in Volume 99215, Page 489, Deed Records, Dallas County, Texas. 

  
 A-1

 EXHIBIT B 
 RENTAL GUIDELINES 
 Property Manager may enter into new leases for space at the Property and renew
or extend existing leases without Owner’s prior written consent provided that each such lease: 
  

	1)	for residential apartment units: 

  

	 	a)	is documented using, and does not materially deviate from, the standard lease form attached as Exhibit D to this Agreement, other than changes required by law or any
governmental agency; and 

  

	 	b)	shall be for initial terms of at least six (6) months and not more than fifteen (15) months, unless a longer lease is included in the Annual Business Plan (as
defined in the Operating Agreement). 

  

	2)	provides for rental rates and terms no less than the suggested daily rates provided by YieldStar unless otherwise approved by Owner. 

 

	3)	is not for a corporate apartment unit except that the Property Manager may enter into an arms-length lease for corporate apartment units of up to ten percent
(10%) of the total number of apartment units, unless the Annual Business Plan provides for more than ten percent (10%) of the total number of apartment units to be available as corporate apartment units; provided, however, unless otherwise
approved by Owner Property Manager will not allow more than 10 corporate leases to expire in any given month. 

  

	4)	is an arms-length transaction with a tenant that is not an Affiliate of Owner or Property Manager (with the exception of apartment units which may be leased to
employees of an Affiliate of the Owner or Property Manager as designated in, and at rental rates no less than those set forth in, the Annual Business Plan). 

 

	5)	Equal Housing Opportunity: Property Management will do business in accordance with the Federal Fair Housing Law. 

 

	6)	Resident Income: Excepted as approved by Owner in writing, prospective residents will have monthly income which will at a minimum be three times the monthly rent.

  

	7)	Credit: All prospective residents must have satisfactory credit as determined in the best judgment of Property Manager. As evidence of prospective residents’
satisfactory credit history, Property Manager shall procure a background check and credit report for prospective tenants from a national reporting agency. 

 

	8)	Employment: Property manager shall confirm employment and salary for prospective tenants for at least the prior three years by, among other satisfactory methods,
contacting prior employers of prospective tenants. 

  

	9)	Previous Residence: If appropriate, Property Manager shall confirm satisfactory residency for prospective tenants, including without limitation, contacting previous
landlords of prospective tenants. 

  

	10)	Rental Guideline Changes: Any material changes in the above guidelines shall be submitted to the Owner for review and approval. 

  
 B-1

 EXHIBIT C 
 STANDARD RESIDENTIAL LEASE FORM 

  
 D-2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

			
	

	 	 Qualifying Criteria
 The Company and this community comply with all federal, state and local regulations regarding Fair Housing for all applicants and residents regardless of race, color, religion, sex, national origin,
familial status or handicap.

 Occupancy Standard 

 
 Two persons maximum per bedroom
(Exception: Child under 24 months of age, unless otherwise dictated by state or federal law) 
 Age Requirements 

 
 Lease Holders must be at least 18
years of age. All Lease Holders and Occupants age 18 years or older are required to submit an application for approval. 
 Credit

  
 Bankruptcy history
is acceptable if discharged and good credit is reflected for the most recent 12 months. Medical accounts, debts to utility companies (water, gas, and electric) and foreclosures are exempted from the above evaluation. Unpaid collections/debt to no
more than one landlord, not exceeding $1500.00, may be acceptable with a one month additional deposit. No credit is considered qualifying credit. International applicants may present a valid passport or other valid government identification in lieu
of credit reporting in the U.S. 
 Additional Deposit 

 
 If prospective Lease Holder(s)
does/do not satisfy the credit criteria (but not to the point of disqualification), an additional deposit in the amount of the standard application deposit will be required. Deposits are refundable in accordance with the application provisions.

 Check Writing 
  

Positive verification of check writing authorization or no checks will be accepted. 

Previous Residences 
  

All applicants and occupants must have positive rental history within the past 2 years. No evictions within the past five years will be
acceptable. Addresses indicated on the credit report(s) must exactly match residences listed on the rental application. 
 Criminal

  
 No applicant or
occupant may have received deferred adjudication for, or have been convicted of, a felony offense of any kind. No applicant or occupant may have received deferred adjudication for, or been convicted of, a misdemeanor of a violent crime against
persons within the previous ten years. No applicant or occupant may have been convicted of, or received deferred adjudication for, a misdemeanor of a property, drug possession under four ounces or weapons nature within the previous three years, or a
misdemeanor of a sexual nature within the previous ten years. 
 Income 

 
 The exact income requirement for
each application is determined by the credit rating(s) of the applicant(s). On average, the monthly rental amount cannot be more than 33% of the total gross income of all leaseholders. Allowances, third party support and other income require
verification. Paycheck stubs covering at least 30 days, the previous year’s W-2 (if self employed) or an offer letter if the applicant has not yet begun employment, are acceptable verification of both income and employment. The income
requirement may be modified if required by federal subsidy or financing programs. If a Guarantor is required, monthly rental amount cannot equal more than 14% of the Guarantor’s monthly income. 

Employment 
  

Lease Holder(s) must present evidence of stable work history for a minimum of one year. If not employed, must present evidence of regular
income. If self-employed must present income tax return from the previous year and bank statements from the previous two months. Persons who hold commission-only or base plus commissions, tips and bonuses jobs are considered self-employed. A letter
of intent to hire from the employer should be provided if employment has not yet begun. 
 Cosigner/Guarantor 

 
 If prospective Lease Holder(s)
does/do not satisfy the income criteria, a cosigner or guarantor will be required in addition to the above additional deposit. If the prospective Lease Holder(s) is/are also fulltime students, only the guarantor will be required. 

  

							
	  
	  		  	  
	  	
	Signature of Applicant
                                 Date	  		  	Signature of Applicant
                                Date	  	
	  
	  		  	  
	  	
	Signature of Applicant
                                 Date	  		  	Signature of Applicant
                                Date	  	
	  
	  		  		  	
	Signature of Owner’s Representative           Date	  		  	 

 

 
 LAUNDRY EQUIPMENT ADDENDUM 

This ADDENDUM (“Addendum”) shall become a part of the APARTMENT LEASE CONTRACT, (“Contract”) dated
the      day of             ,         , for apartment number
                     , between
                                         
            Apartments (“Owner”), and
                                    
,                                 ,
                                         
       ,
and                                        
     , (“Resident”). 
 This Addendum also operates as a release, waiver
and indemnity agreement between Resident named below, and Owner as of the date set out below. 
 RECITALS

 1.         Owner desires to lease to Resident and Resident desires to lease
from Owner certain Equipment (“Equipment”) described below that is (check one)            included in the rent for his/her/their apartment unit or
             not included in the rent and is an additional monthly cost of $                ,
payable to the leasing office on or before the              of the month. 
  

									
	             RESIDENT(S):
	 		  	EQUIPMENT:	  	
					
	 NAME(S)
	 	  
	 		  	FULL SIZE:  ̈   STACKABLE:  ̈	  	
		 	  
	 		  	MAKE:
                                         
                               
		 	  
	 		  	MODEL:
                                         
                             
		 	  
	 		  	MODEL:
                                         
                             
	 APT. #
	 	  
	 		  		  	

 THE PARTIES AGREE AS FOLLOWS: 
 2.         Both parties desire to enter into this Addendum, including the Release, Waiver and Indemnity provisions. 

a.         UPON EXPIRATION OF THE INITIAL LEASE TERM, THIS ADDENDUM SHALL CONTINUE ON A
MONTH-TO-MONTH BASIS, UNLESS CANCELLED BY EITHER THE RESIDENT OR OWNER. AFTER PROVIDING A 30 DAY NOTICE IN WRITING. 

b.        Resident will pay Owner far the repair of damages (other than normal wear and tear) to,
or the loss of Equipment. Resident will clean Equipment before returning. 
 c.
        Owner may remove the Equipment at a reasonable hour from the Resident’s apartment if Owner believes the Equipment is being abused by Resident. Resident will pay Owner for the repair of damages to
or loss of the Equipment other than normal wear and tear. In addition, Resident will be charged a Fifty dollar ($50.00) retrieval fee. 
 d.         The Equipment will be used only by the Resident’s household and only at the above address. 

e.         The Equipment remains at all times the sale and exclusive property of Owner and no
ownership interest, either legal or equitable, nor any possessory interest in the Equipment shall at any time attach to Resident. 
 f.         Owner agrees to repair the Equipment, if necessary, and keep the Equipment in satisfactory operation at no cost to Resident, except those damages caused
by Resident or others. Resident is not authorized to repair the Equipment for any reason. Resident agrees to notify Owner in writing of any Equipment malfunction. Resident agrees to allow Owner, or its authorized agents, representatives and
employees reasonable access to the Equipment in Resident’s apartment for the purpose of repair, maintenance, replacement or removal of the Equipment. 

 g.        By this instrument, Resident releases
Owner and its agents, representatives and officers, directors and employees of any and all claims, liabilities and actions, of whatever nature, resulting from or arising out of Resident’s lease and use of the Equipment and the presence in
Resident’s unit of any representative of Owner for the repair, maintenance or removal of the Equipment. 

h.        By this instrument, Resident waives any and all claims, liabilities and actions of
whatever nature it may have against. Owner, arising out of, or resulting from Resident’s lease and use of the Equipment and the presence in Resident’s apartment of any representative of Owner for the repair, maintenance or removal of the
Equipment. 
 i.         Resident agrees to indemnity Owner for any and all damages
of whatever nature or kind arising out of the willful or negligent misuse of the Equipment while such Equipment is being leased by Resident. 
 j.         The parties acknowledge that this written addendum is the entire agreement of the parties relative to the Equipment in the above referenced unit.
Any agreement that in any way varies the terms of this Addendum shall be unenforceable and completely void unless such agreement is in writing and signed by both parties. 
 DATED THIS          day of
                                    . 

BY SIGNING THIS ADDENDUM, I/WE AM/ARE GRANTING OWNER PERMISSION TO PROVIDE TEMPORARY ACCESS TO MY/OUR APARTMENT TO REPRESENTATIVES OR
AGENTS OF
                                         
        FOR THE SOLE PURPOSE OF DELIVERING AND INSTALLING THE EQUIPMENT OUTLINED IN THIS ADDENDUM. 
  

	
	
	  

	Resident
	
	  

	Resident
	
	  

	Resident
	
	  

	Resident
	
	  

	Owner’s Representative

 Revised 4/05 

			
	

	 	  
  
     AUTO DEBIT PROGRAM

 MILESTONE’S AUTO PAY PROGRAM 

This is a reliable and confidential way to have your rent and other charges paid from your bank account. With this program, your payment
is electronically debited from your checking or savings account as a regularly scheduled payment. 
 NO COST TO YOU 

This is a free service to Milestone residents. 
 PEACE OF MIND 
 You don’t need to
worry about getting your rent check in on time or paying late fees. 
 EASE OF USE

 Your payment will be shown on your monthly bank statement as a debit with date paid, reference number, amount and item
description. It typically reads “Ocius ACH” or a variation of. 
 TO ENROLL: 

	•	 	 Visit the MyResidentNetwork.net website after receiving your first Resident Statement in the mail. You will need some important information from
your statement in order to create your user name and password. 

	•	 	 Follow the instructions for New Resident Sign Up on the website. 

	•	 	 Attach a voided check to the authorization form that prints when signing up. 

	•	 	 Return enrollment form and voided check to the community leasing office. 

	•	 	 Payments will be processed on the 1st business day of each month (if the date falls on a weekend or holiday, payment will be processed on the next business
day.) 

	•	 	 If payment is denied, all applicable fees will apply. 

	•	 	 This enrollment form must be provided to your property management office by the 20th of the month prior to the selected first electronic payment date. 

	•	 	 To make a change, notify your Community Director in writing by completing the “Change” portion of this form below at least ten days before
the next scheduled payment. 

	•	 	 This service will continue until written notice to cancel is received by the Community Director by completing the “Stop” portion of this
form below at least ten days before the next scheduled payment. 

  

 
 CHECK ONE: 

 

	 ̈	YES – I would like to participate in the Auto Debit Program. 

  

	 ̈	STOP – Please stop my participation in the Auto Debit Program. 

 Stop month:
                                        
 
  

	 ̈	DECLINE – I do not wish to participate in the Auto Debit Enrollment Program, 

 

							
	                             
                   	 	                    	 	                             
                   	 	                    
	Resident signature	 	Date	 	Resident signature	 	Date
				
	                             
                   	 	                    	 	                             
                   	 	                    
	Resident signature	 	Date	 	Resident signature	 	Date
			
	                           
                                 	 	                    	 	
	Owner’s Representative Signature	 	Date	 	

 Revised 02-16-10 

			
	 

	  	  
 CREDIT/DEBIT CARD
PROGRAM

                         
                                         
                                         
              (property name), hereinafter called COMPANY: 
 To
ENROLL: 

	•	 	 Visit the MyResidentNetwork.net website after receiving your first Resident Statement in the mail. You will need some important information from your
statement in order to create your user name and password. 

	•	 	 Follow the instructions for New Resident Sign Up on the website. 

	•	 	 You will receive a receipt “Pending” approval of the management office. 

 
  
 I hereby authorize the COMPANY, to initiate credit/debit card transactions and to initiate, if necessary, any adjustments for any transaction in error, to credit and/or debit the same to such amount. This
authority is to remain in effect until COMPANY has received written notification of its termination in such time and in such manner as to afford COMPANY a reasonable opportunity to act on it. 
 CHECK ONE: 
  ̈ ONE-TIME
CHARGE – I would like my credit/debit card charged one-time for the amount due specified by the Company.* 
  ̈ MONTHLY CHARGES – I would like my credit/debit card set up to be charged monthly for the amount due specified by the Company.* 

 ̈ STOP – Please stop my participation in the Credit/Debit Card Program.

  ̈ DECLINE – I do not wish to participate in the Credit/Debit Card
Program. 
 *YOU WILL BE CHARGED A
FLAT FEE PER USE OF THIS SERVICE. 
  

											
	  
	    	  
	  		  	  
	    	  
	  	
	Resident signature	    	Date	  		  	Resident signature	    	Date	  	
						
	  
	    	  
	  		  	  
	    	  
	  	
	Resident signature	    	Date	  		  	Resident signature	    	Date	  	
					
	                           
                                     	  		  	                    	    		  	
	Owner’s Representative Signature	  		  	Date	    		  	

 Revised 02-16-10 

			
	 

	  	MILESTONE COMMUNITY POLICIES

 All policies apply to residents and their guests and are subject to change. Please remember your
neighbors and help us to maintain a quiet, clean community environment. 
 Rental Payment 

 
 Although your rental payment
polices are stated in your Lease Contract, we will explain them further here: 

	 	•	 	 Only one personal check will be accepted for apartment rent. No partial payments will be accepted. 

	 	•	 	 As stated in your lease, if the office receives your rent after the date specified in your lease, a late charge will be assessed.

	 	•	 	 When allowed by law, no personal checks will be accepted for rental payment after the 5th of the month. 

	 	•	 	 A returned check fee plus applicable late charges will be assessed on all checks returned by a bank for any reason. Checks will not be redeposited.
Returned checks must be paid by a cashier’s check or money order within 24 hours of notification. 

	 	•	 	 After two returned checks, we may no longer accept personal checks for rental payments (or any other charges). 

	 	•	 	 Cash is never accepted. 

Keys and Locks 
  

The care and maintenance of the keys and locks to your apartment is of critical importance. 

	 	•	 	 We do not offer lockout service after business hours. 

	 	•	 	 Our staff will be happy to make a duplicate of your apartment key for a minimum charge of $5.00. The legal resident of the apartment is required to
show current photo identification. 

	 	•	 	 If you wish to have your locks changed, a reasonable charge will be levied. Payment in advance of lock change is not required.

 Insurance 

 
 The apartment community provides no
guarantee of personal safety and security. Renter’s insurance  ̈is  ̈is not required as a term of residency at all Milestone Communities. A copy of
your renter’s insurance policy may be required upon move-in. 
 Ins. Company:
                                        
Policy Number:
                                         
    Effective Dates:
                                        

 Utilities 
  

You are responsible for all utilities, related deposits, and any charges or fees related to utilities for your apartment home. Per your
lease contract you must not allow any utilities, other than cable or internet, to be disconnected. 
 Electric Company:                              
                                         
                 Account Number:                    
                                         
         

Gas Company:              
                                         
                                       Account 
Number:                                        
                              
 Occupants 
  
 If, during the term of the lease, the resident has an additional child either by birth or adoption, and such additional child exceeds the maximum occupancy restrictions of the apartment, the resident must
either transfer into a larger apartment or vacate the apartment at the end of the lease term. The addition of any person to the apartment must be reported to the office. The addition of any person, other than infant by birth or adoption, in excess
of the maximum occupancy limitation, shall constitute a branch of the lease contract. All occupants over 18 years must be screened for criminal and residency history through the Milestone application process and an application fee must be paid prior
to move in. 
 Transferring 

 
 Occasionally residents choose to
transfer to another apartment within the Community or to another Milestone Community within the nation.  

Community On-Site Transferring 

	 	•	 	 A written notice to vacate, in accordance with your lease, must be given. 

	 	•	 	 The Community Director must approve the transfer. 

	 	•	 	 After 4 months of initial lease, no transfer fee applies. 

	 	•	 	 A $200.00 transfer fee applies if within the first 4 months of the initial lease. 

	 	•	 	 Application fee is waived. The community must still screen the resident(s) for the new apartment. 

	 	•	 	 We will waive the reletting fee. 

 National Relocation Program 

	 	•	 	 Application fee is waived. The new property must still prescreen the resident(s). 

	 	•	 	 The resident must have been in good standing in the present apartment for a minimum of six months. 

	 	•	 	 The transfer fee of half the realized concessions (as documented on the concession addendum) is waived after 6 months of the initial lease term.

	 	•	 	 A written notice to vacate, in accordance with your lease, must be given. 

	 	•	 	 The new community awards a $100 concession to the resident This concession is in addition to any standing concession already in place at the new
community. 

 I acknowledge receipt of these additional provisions to the Community Policies, thereby becoming
a part of the Lease Agreement. 
  

					
	 Resident(s)
	 		 	  

	  
	 		 	Owner’s Representative
			
	  
	 		 	  

	  

    
	 		 	 Date Signed
  

 Revised 7/9/09 

 LEASE ADDENDUM REGARDING 

MOVE-OUT NOTICE 
  

					
	1.	  	 Addendum. This is an addendum to the TAA Lease Contract for Apt. No.              in
the                                  Apartments in
                            , Texas OR the house, duplex, etc. located at (street address)
                                         
        in
                                         
       , Texas.
	  	 intended move out, provided that all other requirements below are met.

 

•      The move-out date in your notice [check one]: must be the last
day of the month; or may be the exact day designated in your notice. If neither is checked, the second applies.

			
	2.	  	 Replacement of Lease Contract language. The language of paragraph 37 the TAA Lease Contract is entirely replaced by the language of this
addendum.
	  	 •      Your move-out notice must be in writing. Oral move-out notice will not be
accepted and will not terminate your Lease Contract.

			
	3.	  	 Move-out notice. Before moving out, you must give our representative advance written move-out notice as provided below.
	  	 •      Your move-out notice must not terminate the Lease Contract sooner than the
end of the Lease Contract term renewal period.

			
		  	 Your move-out notice will not release you from liability for the full term of the Lease Contract or renewal
term. You will sill be liable for the entire Lease Contract term if you move out early (paragraph 22) except under the military clause (paragraph 23). YOUR MOVE-OUT NOTICE MUST COMPLY WITH EACH OF THE FOLLOWING:

 

•        We must receive advance written notice of your move-out
date. The advance notice must be at least the number of days of notice required in paragraph 3 or in special provisions—even if the Lease Contract has become a month-to-month lease. If a move-out notice is received on the fist, it will suffice
for move-out an the last day of the month of
	  	 •      If we require you to give us more than 30 days written notice to move-out before the
end of the lease term, we will give you one written reminder not less than 5 days nor more than 90 days before your deadline for giving us your written move-out notice. For month-to-month lenses under such circumstances. you acknowledge that you
must give us          days move-out notice, but we are not required to give you any additional advance reminder notices.

		  	  	  
 YOUR NOTICE IS NOT
ACCEPTABLE IF IT DOES NOT COMPLY WITH ALL OF THE ABOVE. Please use our written move-out form. You must obtain from our representative written acknowledgment that we received your move-out notice. If we terminate the Lease Contract, we must give you
the same advance notice—unless you are in default.

  

					
	 Resident or Residents
 [All residents must sign here]
	 		  	 Owner or Owner’s Representative

[signs here]

	  
	 		  	  

			
	  
	 		  	Date of Lease Contract
			
	  
	 		  	  

			
	  
	 		  	

 Revised 10/08 

 

 
  
 Photo Identification

 For Identification purposes, attach a Copy of Driver’s License or a traceable photo identification card at time of
move-in: 
  
  

 
 Refusal 

I refuse to provide have a copy of my photo identification card made for identification purposes. I know if there is no photo identification in the
apartment file, access to my apartment will be denied. 
  

			
	                             
                                         
                      	 	                             
                       
		
	Residents Signature	 	            Date

 4/05 

 

 
 Pest Control Information and Prevention Addendum 
 It is our goal to maintain the highest quality living environment
for our residents. Therefore, know that management has inspected your apartment prior to the lease begin date, and is not aware of any pest control issues in the apartment at the time of move in. 

It is important that Resident(s) keep the interior of the unit in a clean and sanitary condition and promptly notify management of any
sightings of bed bugs and/or other pest control issues in the apartment home. 
 Proper bed bug education and cooperation from
our residents is very important. 

	•	 	 Bed bugs are small parasitic insects that feed on human blood. 

 

	•	 	 Bed bugs range in color from dark red to nearly clear in color. At the smallest sizes, bed bugs can be difficult to see and may appear to be
translucent yellowish white. Full grown, bed bugs are about the size of an apple seed. 

  

	•	 	 Signs of bed bugs are commonly found beneath or near edges of mattresses and near the bunting seams. Bed bugs may also congregate near the
wall-ceiling juncture, along the floor-wall juncture near or behind molding, behind or near wall hangings, in or near electrical outlets or other such places. 

 

			
	If you think you have a bed bug infestation contact the property management office immediately
so that we can schedule a professional inspection and treatment of your apartment home.	  	

 All Residents agree to the following terms: 

 

	1.	 Visually inspect apartment home for the presence of bed bugs at the time of move in and report any findings to the management office immediately.

  

	2.	 Keep the apartment home in clean and sanitary condition at all times. 

 

	3.	 Acquiring furniture from dumpsters or other unknown or unsanitary sources is not permitted. 

 

	4.	 Resident(s) agrees to immediately notify landlord of any pest control issues. 

 

	5.	 Resident(s) full cooperation with the pest control company and management in regards to access and treatment is mandatory.

  

	6.	 Resident(s) must allow access to your apartment home for inspection in the event of a bed bug infestation in an adjacent unit.

  

	7.	 Failure of the Resident(s) to comply with reporting information regarding bed bugs, misrepresentation of information, or failure to comply with or
pay for pest control treatment as a result of bedbugs in the unit could result in the termination of the lease and would entitle the Owner to pursue any rights and remedies available under the lease terms or applicable law.

  

	8.	 Failure to comply with reporting or recommended treatments could result in the termination of the lease. 

 

							
	  
	 		  	  
	  	
	Resident Signature/Date	 		  	Resident Signature/Date	  	
				
	  
	 		  	  
	  	
	Resident Signature/Date	 		  	Resident Signature/Date	  	
				
	  
	 		  		  	
	Community Representative Signature/ Date	 		  		  	

  

			
	1	  	Revised 8/2010

 

 
 Bed Bug Awareness 
 Bed bugs’ increased presence across the United States in recent decades can be attributed largely to a surge in international travel and trade. While bed bugs are, by their very nature, more
attracted to clutter, they are certainly not discouraged by cleanliness. Bed bugs know no social or economic bounds. 

Identifying Bed Bugs 

What are bed bugs? 

Adult bed bugs are small, reddish-brown colored Insects. They have flat bodies, no wings, and are about the size of an apple seed. Young
bed bugs are much smaller and almost colorless. Bed bugs feed on the blood of humans and warm blooded animals. The lifespan of a bed bug is 10 to 18 months. They are nocturnal and feed at night. 

How do I know if I have bed bugs? 
 Bed bugs are very secretive and efficient parasites. They are capable of hiding in the tiniest of places but most are associated near where the host sleeps or rests. Even the most experienced
professionals report that it is difficult to find bed bugs in many cases. However, there are “tell tale” signs that you may notice if bed bugs are present and no actual insects are seen. These signs include the presence of staining and
fecal matter left by bed bugs. 
 What exactly should I look for? 
 If you are concerned that bed bugs may be in your home look for signs. Bed bugs feed on blood and their fecal matter may appear as dark blood stains on your bedding materials including sheets, blankets,
pillows, mattresses, or box springs. Such staining may also appear on couches, chairs, or throw pillows where people may sit or lay when watching television. Staining may also be found on walls and furniture around and in areas where bed bugs hide.
Bed bugs molt or shed their skin as they grow in a similar fashion as a snake does. You may find bed bug empty “skins” left behind from a bed bug that molted. 
 Prevention 
 How can I prevent bed bugs from entering my home? 

	 	•	 	 Take a few moments upon arriving at a travel destination to thoroughly inspect your accommodations for evidence of bed bugs.

	 	•	 	 Thoroughly inspect luggage and belongings before departing for home. 

	 	•	 	 Washing clothing and bedding immediately after returning from a trip can prevent some infestations. 

	 	•	 	 Be aware that reports of bed bug infestations have surfaced in train cars, ships, airplanes and buses. 

Bed Bug Don’ts 
  

	 	•	 	 Do not bring used furniture from unknown sources into your apartment. Countless bed bug infestations have stemmed directly from the introduction into a
resident’s apartment home of second-hand and abandoned furniture. 

	 	•	 	 While there are many pesticides available to the public, successful bed bug treatment requires thorough treatment methods best performed by
professionals and this professional service treatment is being provided to you by an approved pest control company authorized by property management It may, however, be necessary for you to treat some of your more sensitive items yourself (such as
clothing and electronics) with products that can be easily found at your local drugstore or home center. 

What should I do if I think I have bed bugs? 
 You should immediately call the property management office so that we can schedule a professional inspection and treatment, if needed, of your apartment. 

 

			
	2	 	Revised 8/2010

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