Document:

Exhibit 4.5

 

STATEMENT REGARDING RESTRICTIONS ON

TRANSFERABILITY OF SHARES OF COMMON STOCK

 

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

and without Charge to Stockholders Issued Shares
without Certificates)

 

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

 

Until
the Common Shares are Listed, to purchase Common Shares, the purchaser must
represent to the Company: (i) that the purchaser (or, in the case of sales to
fiduciary accounts, that the beneficiary, fiduciary account or grantor or donor
who directly or indirectly supplies the funds to purchase the shares if the
grantor or donor is the fiduciary) has a minimum annual gross income of $70,000
and a net worth (excluding home, home furnishings and automobiles) of not less
than $70,000; or (ii) that the purchaser (or, in the case of sales to fiduciary
accounts, that the beneficiary, fiduciary account or grantor or donor who
directly or indirectly supplies the funds to purchase the shares if the grantor
or donor is the fiduciary) has a net worth (excluding home, home furnishings
and automobiles) of not less than $250,000. Until the Common Shares are Listed,
each issuance or transfer of Common Shares shall comply with the requirements
regarding minimum initial and subsequent cash investment amounts set forth in
the Company’s registration statement filed under the Securities Act for the
Initial Public Offering as that registration statement has been amended or
supplemented as of the date of the issuance or transfer.

 

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

 

Note: Instead of the foregoing notice, at the time of issue
or transfer of shares without certificates, the Company may send the Stockholder
a written statement indicating that the Company will furnish information about
the restrictions on transfer to the Stockholder on request and without charge.
If the Company issues Shares with certificates, each certificate shall either
contain the notice set forth above or shall state that the Company will furnish
information about the restrictions on transfer to the Stockholder on request
and without charge.Exhibit 10.1

 

BEHRINGER HARVARD MULTIFAMILY REIT II, INC.

 

FORM OF ADVISORY MANAGEMENT AGREEMENT

 

This ADVISORY MANAGEMENT
AGREEMENT (this “Agreement”), is made and entered
as of the [    ] day of
[          ], 2011 (the “Effective Date”), by and between BEHRINGER HARVARD
MULTIFAMILY REIT II, INC., a Maryland corporation (the “Company”), and BEHRINGER HARVARD MULTIFAMILY ADVISORS II,
LLC, a Texas limited liability company (the “Advisor”).

 

W I T N E S S E T H

 

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

 

WHEREAS, the Company
has been formed to acquire and operate a diverse portfolio of real estate
assets at all stages of development with a focus on high quality multifamily,
student housing, age-restricted properties, commercial properties, such as
office buildings, shopping centers, business and industrial parks,
manufacturing facilities, warehouses and distribution facilities and motel and
hotel properties, originate or invest in mortgage, bridge, mezzanine or other
loans and Section 1031 tenant-in-common interests, or in entities that make
investments similar to the foregoing, and make investments with joint venture
partners;

 

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

 

WHEREAS, the Company
desires to avail itself of the experience, sources of information, advice,
assistance and certain facilities available to the Advisor and to have the
Advisor undertake the duties and responsibilities hereinafter set forth, on
behalf of, and subject to the supervision of, the Board, all as provided
herein; and

 

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

 

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

 

 

ARTICLE
ONE

 

DEFINITIONS

 

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

 

Acquisition Expenses.  A non-accountable acquisition expense
reimbursement in the amount of: (i) 0.25% of the funds paid for purchasing an
Asset, including any debt attributable to the Asset, plus 0.25% of the funds
budgeted for development, construction or improvement in the case of Assets
that we acquire and intend to develop, construct or improve or (ii) 0.25% of
the funds advanced in respect of a completed loan or other investment.   In addition, to the extent the Advisor
directly provides services usually provided by third parties, including without
limitation accounting services related to the preparation of audits required by
the Securities and Exchange Commission, property condition reports, title
services, title insurance, insurance brokerage or environmental services
related to the preparation of environmental assessments in connection with a
prospective or completed investment (the “Additional Services”), the direct
employee costs and burden to the Advisor of providing the Additional Services
shall be Acquisition Expenses regardless of whether the investment is
completed.  Acquisition Expenses also
include, regardless of whether the investment is completed, any
investment-related expenses due to third parties, including, but not limited to
legal fees and expenses, travel and communications expenses, costs of
appraisals, accounting fees and expenses, third-party brokerage or finder’s
fees, title insurance, premium expenses and other closing costs.  Regardless of whether the investment is
completed, Acquisition Expenses also include any payments made to (i) a
prospective seller of an asset, (ii) an agent of a prospective seller of an asset,
or (iii) a party that has the right to control the sale of an asset intended
for investment by the Company that are not refundable and that are not
ultimately applied against the purchase price for such asset.

 

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

 

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

 

Advisor.  Behringer Harvard Multifamily Advisors II,
LLC, a Texas limited liability company, any successor advisor to the Company,
or any Person to which Behringer Harvard Multifamily Advisors II, LLC or any
successor advisor subcontracts all or substantially all of its functions.

 

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

 

2

 

Applicable Asset Management Fee
Percentage.  A
percentage that shall initially be equal to 0.25%, provided that the percentage
shall increase to (i) 0.50% commencing on the first day of the first quarter
following two consecutive fiscal quarters during which the Company’s Modified
Funds From Operations equal or exceed 25% of the Coverage Amount, (ii) 0.75%
commencing on the first day of the first quarter following two consecutive
fiscal quarters during which the Company’s Modified Funds From Operations equal
or exceed 50% of the Coverage Amount, (iii) 1.00% commencing on the first day
of the first quarter following two consecutive fiscal quarters during which the
Company’s Modified Funds From Operations equal or exceed 75% of the Coverage
Amount, and (iv) 1.25% commencing on the first day of the first quarter
following two consecutive fiscal quarters during which the Company’s Modified
Funds From Operations equal or exceed the Coverage Amount.  Once the Applicable Asset Management Fee
Percentage shall become 1.25% it shall remain 1.25% until the Advisor has
earned, since the Effective Date, Asset Management Fees under this Agreement
equal to the amount of Asset Management Fees the Advisor would have earned if
the Applicable Asset Management Fee Percentage had been 1.00% every day since
the Effective Date, whereupon the percentage shall return to 1.00% upon the
first day following the quarter following such event.  Once the Applicable Asset Management Fee
Percentage increases at any time after the Effective Date to 0.50%, 0.75%,
1.00% or 1.25%, as the case may be, it shall not decrease from the highest of
such amounts except as described in the preceding sentence, regardless of the
Company’s Modified Funds From Operations in any subsequent period.

 

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

 

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

 

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

 

Average Invested Assets.  For a specified period, the average of the
aggregate book value of the assets of the Company invested, directly or
indirectly, in equity interests in and loans secured by real estate, before
deducting depreciation, bad debts or other non-cash reserves, computed by
taking the average of such values at the end of each month during such period.

 

Board.  The Board of Directors of the Company.

 

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

 

Change of Control.  Any (i) event (including, without limitation,
issue, transfer or other disposition of Shares of capital stock of the Company
or equity interests in the Operating Partnership, merger, share exchange or
consolidation) after which any “person” (as that term is used in Sections 13(d)
and 14(d) of the Exchange Act) is or becomes the “beneficial owner” (as defined
in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of
the Company or the Operating Partnership representing greater than 50% of the
combined voting power of the Company’s or the Operating Partnership’s then
outstanding securities, respectively; provided, that, a Change of Control shall
not be deemed to occur as a result of any widely distributed public offering of
the Common Shares or (ii) direct or indirect sale, transfer, conveyance or
other disposition (other than pursuant to clause (i)), in one or a series of
related transactions, of all or substantially all of the properties or assets
of the Company or the Operating 

 

3

 

Partnership, taken as a
whole, to any “person” (as that term is used in Sections 13(d) and 14(d) of the
Exchange Act).

 

Code.  Internal Revenue Code of 1986, as amended
from time to time, or any successor statute thereto. Reference to any provision
of the Code shall mean the provision as in effect from time to time, as the
same may be amended, and any successor provision thereto, as interpreted by any
applicable regulations as in effect from time to time.

 

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

 

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

 

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

 

Construction Fee.  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
rehabilitations on a Property.

 

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

 

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

 

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

 

Coverage Amount.  An amount of Modified Funds From Operations
per share for a fiscal quarter of the Company of fifteen cents ($0.15).

 

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

 

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

 

4

 

Director.  A member of the Board.

 

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

 

Exchange Act.  The Securities Exchange Act
of 1934, as amended from time to time, or any successor statute thereto.  Reference to any provision of the Exchange
Act shall mean such provision as in effect from time to time, as the same may
be amended, and any successor provision thereto, as interpreted by any
applicable regulations as in effect from time to time.

 

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

 

Gross Proceeds.  The aggregate purchase price of all Common
Shares sold for the account of the Company through an Offering, without
deduction for Organization and Offering Expenses.

 

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

 

Initial Investment.  Initial Investment shall have the meaning
ascribed to such term in Section 6.13.

 

Intellectual
Property Rights.  All rights,
titles and interests, whether foreign or domestic, in and to any and all trade
secrets, confidential information rights, patents, invention rights,
copyrights, service marks, trademarks, know-how, or similar intellectual
property rights and all applications and rights to apply for such rights, as
well as any and all moral rights, rights of privacy, publicity and similar
rights and license rights of any type under the laws or regulations of any
governmental, regulatory, or judicial authority, foreign or domestic and all
renewals and extensions thereof.

 

5

 

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

 

Listing or
Listed.  The filing
of a Form 8-A (or any successor form) to register the Common Shares on a
national securities exchange and the approval of an original listing
application related thereto by the applicable exchange; provided, that the Common
Shares shall not be deemed to be Listed until trading in the Common Shares
shall have commenced on the relevant national securities exchange.  Upon a Listing, the Common Shares shall be
deemed Listed.  A Listing shall also be
deemed to occur on the effective date of a merger in which the consideration
received by the holders of Common Shares is securities of another issuer that
are listed on a national securities exchange.

 

Modified Funds From Operations.  With respect to any fiscal quarter, the
Company’s funds from operations, or FFO (as defined by the National Association
of Real Estate Investment Trusts) during such quarter, plus Acquisition
Expenses, impairment charges and adjustments to fair value for derivatives not
qualifying for hedge accounting during such quarter.  However, if a trade or industry group
promulgates a different definition of Modified Funds From Operations applicable
to listed or non-listed REITs that the Company adopts in its periodic reports
filed with the Securities and Exchange Commission, Modified Funds From
Operations shall have the meaning of such different definition.  In addition, if the Board, including a
majority of the Independent Directors, or the Company’s audit committee
approves a different definition, then Modified Funds From Operations shall have
the meaning of such different definition. 
Such approval shall be deemed to have been made if the Company adopts a
different definition of Modified Funds From Operations in its periodic reports
filed with the Securities and Exchange Commission.

 

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

 

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

 

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

 

Offering. Any public
offering of Shares pursuant to an effective registration statement filed under
the Securities Act, other than a public offering of Shares under a distribution
reinvestment plan.

 

Operating Partnership.  Behringer Harvard
Multifamily OP II LP, a Texas limited partnership, through which the Company
may own Assets.

 

Organization
and Offering Expenses.  Any
and all costs and expenses incurred by and to be paid by the Company in
connection with an Offering, the formation of the Company, and including the
qualification and registration of the Offering and the marketing and
distribution of its Shares, including, without limitation:  total underwriting and brokerage discounts
and commissions (including fees of the underwriters’ attorneys); expenses for
printing, engraving, amending registration statements and supplementing
prospectuses; mailing and distribution costs; salaries of employees while
engaged in sales activity, such as preparing supplemental sales literature;
telephone and other telecommunication costs; all 

 

6

 

advertising and marketing
expenses, including the costs related to investor and broker-dealer meetings;
charges of transfer agents, registrars, trustees, escrow holders, depositories
and experts; filing, registration and qualification fees and taxes relating to
the Offering under federal and state laws; accountants’ and attorneys’ fees;
reimbursement of bona fide due diligence expenses of broker-dealers; the cost
of bona fide training and education meetings held by the Company (including the
travel, meal and lodging costs of registered representatives of
broker-dealers); attendance and sponsorship fees and cost reimbursement for
employees of the Advisor and its affiliates to attend retail conferences
conducted by broker-dealers; reimbursement to broker-dealers for technology
costs associated with the Offering; costs and expenses related to such
technology costs; and costs and expenses associated with the facilitation of
the marketing of the Shares and the ownership of the Shares by such
broker-dealers’ customers.

 

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

 

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

 

Property or Properties.  As the context requires, any, or all,
respectively, of the Real Property acquired by the Company, either directly or
indirectly (whether through Joint Ventures or other investment interests,
regardless of whether the Company consolidates the financial results of these
entities).

 

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

 

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

 

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

 

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

 

Sale or Sales.  (i) Any transaction or series of transactions
whereby: (A) the Company or the Operating Partnership directly or indirectly
(except as described in other subsections of this definition) sells, grants,
transfers, conveys, or relinquishes its ownership of any Property or portion
thereof, including the lease of any Property consisting of a building only, and
including any event with respect to any Property which gives rise to a
significant amount of insurance proceeds or condemnation awards; (B) the
Company or the Operating Partnership directly or indirectly (except as
described in other subsections of this definition) sells, grants, transfers, conveys,
or relinquishes its ownership of all or substantially all of the interest of
the Company or the Operating Partnership in any Joint Venture in which it is a
co-venturer or partner; (C) any Joint Venture directly or indirectly (except as
described in other subsections of this definition) in which the Company or the
Operating Partnership as a co-venturer or partner sells, grants, transfers,
conveys, or relinquishes its ownership of any Property or portion thereof,
including any event with respect to any Property which gives rise to insurance
claims or condemnation awards; (D) the Company or the Operating Partnership
directly or indirectly (except as described in other subsections of this 

 

7

 

definition) sells, grants,
conveys or relinquishes its interest in any Mortgage or other loan or portion
thereof (including with respect to any Mortgage or other loan, all payments
thereunder or in satisfaction thereof other than regularly scheduled interest
payments of amounts owed pursuant to the Mortgage or other loan) and any event
with respect to a Mortgage or other loan which gives rise to a significant
amount of insurance proceeds or similar awards; or (E) the Company or the
Operating Partnership directly or indirectly (except as described in other
subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its ownership of any other Asset not previously described in this
definition or any portion thereof, but (ii) not including any transaction or
series of transactions specified in clause (i) (A) through (E) above in which
the proceeds of such transaction or series of transactions are reinvested in
one or more Assets within 180 days thereafter.

 

Securities
Act.  The Securities Act of 1933, as
amended from time to time, or any successor statute thereto.  Reference to any provision of the Securities
Act shall mean the provision as in effect from time to time, as the same may be
amended, and any successor provision thereto, as interpreted by any applicable
regulations as in effect from time to time.

 

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

 

Shares.  Shares of stock of the Company of any class
or series, including Common Shares, Preferred Shares or Convertible Shares.

 

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

 

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

 

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

 

Termination Date.  The date of termination of this Agreement.

 

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

 

Total
Operating Expenses. All costs and expenses paid or incurred by
the Company, as determined under generally accepted accounting principles,
which are in any way related to the operation of the Company or to Company
business, including the Asset Management Fee, but excluding (i) the expenses of
raising capital such as Organization and Offering Expenses, legal, audit,
accounting, underwriting, brokerage, listing, registration, and other fees,
printing and other expenses and tax incurred in connection with the issuance,
distribution, transfer, registration and Listing of the Shares, (ii) interest
payments, (iii) taxes, (iv) non-cash expenditures such as depreciation,
amortization and bad debt reserves, (v) incentive fees paid to the Advisor in
compliance with Section 8.7 of the Articles of Incorporation (as such provision
may be amended or renumbered from time to time), (vi) Acquisition Fees and
Acquisition Expenses, real estate commissions on the Sale of Assets, and other
fees and expenses connected with the acquisition, disposition, management and
ownership of real estate interests, mortgage loans or other property 

 

8

 

(including the costs of
foreclosure, insurance premiums, legal services, maintenance, repair and
improvement of property).

 

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

 

ARTICLE
II

 

THE
ADVISOR

 

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

 

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

 

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

 

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

 

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

 

(d)           investigate, select, and, on behalf of the Company, engage
and conduct business with the duly qualified and licensed Persons as the
Advisor deems necessary to the proper performance of its obligations hereunder,
including but not limited to duly qualified and licensed consultants,
accountants, correspondents, lenders, technical advisors, attorneys, brokers,
underwriters, corporate fiduciaries, escrow agents, depositaries, custodians,
agents for collection, insurers, 

 

9

 

insurance agents, banks,
builders, developers, property owners, mortgagors, property management
companies, transfer agents and any and all agents for any of the foregoing,
including duly qualified and licensed Affiliates of the Advisor, and duly
qualified and licensed Persons acting in any other capacity deemed by the
Advisor necessary or desirable for the performance of any of the foregoing
services, including but not limited to entering into contracts in the name of
the Company with any of the foregoing;

 

(e)           consult with the officers and the Board and assist the
Board in the formulation and implementation of the Company’s financial
policies, and, as necessary, furnish the Board with advice and recommendations
with respect to the making of investments consistent with the investment
objectives and policies of the Company and in connection with any borrowings
proposed to be undertaken by the Company;

 

(f)            subject to the provisions of Sections 2.02(h) and 2.03
hereof, (i) locate, analyze and select potential investments in Assets, (ii)
structure and negotiate the terms and conditions of transactions pursuant to
which investment in Assets will be made; (iii) make investments in Assets on
behalf of the Company or the Operating Partnership in compliance with the
investment objectives and policies of the Company; (iv) arrange for financing
and refinancing and make other changes in the asset or capital structure of,
and dispose of, reinvest the proceeds from the sale of, or otherwise deal with
the investments in, Assets; and (v) enter into leases of Property and service
contracts for Assets with duly qualified and licensed Persons and, to the
extent necessary, perform all other operational functions for the maintenance
and administration of the Assets, including the servicing of Mortgages;

 

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

 

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

 

(i)            negotiate on behalf of the Company with banks or lenders
for loans to be made to the Company, negotiate on behalf of the Company with
investment banking firms and broker-dealers, and negotiate private sales of
Shares and other securities of the Company or obtain loans for the Company, as
and when appropriate, but in no event in such a way so that the Advisor shall
be acting as broker-dealer or underwriter; and provided, further, that any fees
and costs payable to third parties incurred by the Advisor in connection with the
foregoing shall be the responsibility of the Company;

 

(j)            obtain reports (which may be prepared by or for the
Advisor or its Affiliates), where appropriate, concerning the value of
investments or contemplated investments of the Company in Assets;

 

(k)           from time to time, or at any time reasonably requested by
the Board, make reports to the Board of its performance of services to the
Company under this Agreement;

 

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

 

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

 

(n)           upon request of the Company, act, or obtain the services
of duly qualified and licensed others to act, as attorney-in-fact or agent of
the Company in making, acquiring and disposing of 

 

10

 

Assets, disbursing, and
collecting the funds, paying the debts and fulfilling the obligations of the
Company and retaining counsel or other advisors to assist in handling,
prosecuting and settling any claims of the Company, including foreclosing and
otherwise enforcing mortgage and other liens and security interests comprising
any of the Assets;

 

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

 

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

 

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

 

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

 

2.03         Authority of Advisor.

 

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

 

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

 

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

 

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

 

The Board may, at any time
upon the giving of notice to the Advisor, modify or revoke the authority set
forth in this Section 2.03. If and to the extent the Board so modifies or
revokes the authority contained herein, the Advisor shall henceforth submit to the
Board for prior approval the proposed

 

11

 

transactions involving
investments in Assets as thereafter require prior approval, provided however,
that the modification or revocation shall be effective upon receipt by the
Advisor and shall not be applicable to investment transactions to which the Advisor
has committed the Company prior to the date of receipt by the Advisor of the
notification.

 

2.04         Bank Accounts.  The Advisor may establish and maintain one or
more bank accounts in its own name for the account of the Company or in the
name of the Company and may collect and deposit into any account or accounts,
and disburse from any account or accounts, any money on behalf of the Company,
under the terms and conditions as the Board may approve, provided that no funds
of the Company or the Operating Partnership shall be commingled nor shall any
of such funds be commingled with the funds of the Advisor; and the Advisor
shall from time to time render accountings of the collections and payments to
the Board, its audit committee and the auditors of the Company.

 

2.05         Records; Access.  The Advisor shall maintain records of all its
activities hereunder and make the records available for inspection by the Board
and by counsel, auditors and authorized agents of the Company, at any time or
from time to time during normal business hours. 
The Advisor shall at all reasonable times have access to the books and
records of the Company.

 

2.06         Limitations on Activities.  Anything else in this Agreement to the
contrary notwithstanding, the Advisor shall refrain from taking any action
which, in its sole judgment made in good faith, would (a) adversely affect the
status of the Company as a REIT, (b) subject the Company to regulation under
the Investment Company Act of 1940, as amended, or (c) violate any law, rule,
regulation or statement of policy of any governmental body or agency having
jurisdiction over the Company, the Shares or any of the Company’s securities,
or otherwise not be permitted by the Articles of Incorporation or Bylaws,
except if the action shall be ordered by the Board, in which case the Advisor
shall notify promptly the Board of the Advisor’s judgment of the potential
impact of the action and shall refrain from taking the action until it receives
further clarification or instructions from the Board.  In such event the Advisor shall have no
liability for acting in accordance with the specific instructions of the Board
so given.  The Advisor, its directors,
officers, employees and stockholders, and the directors, officers, employees
and stockholders of the Advisor’s Affiliates shall not be liable to the Company
or to the Board or Stockholders for any act or omission by the Advisor, its
directors, officers, employees or stockholders, or for any act or omission of
any Affiliate of the Advisor, its directors, officers or employees or
stockholders except as provided in Section 5.02 of this Agreement.

 

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

 

2.08         Other Activities of the
Advisor.  Nothing herein
contained shall prevent the Advisor or its Affiliates from engaging in other
activities, including, without limitation, the rendering of advice to other
Persons (including other REITs) and the management of other programs advised,
sponsored or organized by the Advisor or its Affiliates; nor shall this
Agreement limit or restrict the right of any director, officer, employee, or
stockholder of the Advisor or its Affiliates to engage in any other business or
to render services of any kind to any other Person.  The Advisor may, with respect to any
investment in which the Company is a participant, also render advice and
service to each and every other participant therein.  The Advisor shall report to the Board the
existence of any condition or circumstance, existing or anticipated, of which
it has knowledge, which creates or could create a conflict of interest between
the Advisor’s obligations to the Company and its obligations to or its interest
in any other Person.  The Advisor or its
Affiliates shall promptly disclose to the Board knowledge of such condition or
circumstance.  The 

 

12

 

Advisor shall inform the
Board at least quarterly of the investment opportunities that have been offered
to other programs with similar investment objectives sponsored by the Sponsor,
Advisor, Director or their Affiliates. 
If the Sponsor, Advisor, Director or Affiliates thereof have sponsored
other investment programs with similar investment objectives which have
investment funds available at the same time as the Company, it shall be the
duty of the Board (including the Independent Directors) to adopt the method set
forth in the Company’s most recent Prospectus for its Shares or another
reasonable method by which investments are to be allocated to the competing
investment entities and to use their best efforts to apply such method fairly
to the Company.

 

2.09         Payment of Certain
Organization and Offering Expenses.  The Company shall pay directly all
Organization and Offering Expenses considered underwriting compensation by the
Financial Industry Regulatory Authority, or FINRA.  Such payments, other than Selling Commissions
and the dealer manager fee, shall apply towards the limit on Organization and
Offering Expenses reimbursable by the Company to the Advisor pursuant to
Section 3.02(a)(i) below.

 

ARTICLE
III

 

COMPENSATION
AND REIMBURSEMENT OF SPECIFIED COSTS

 

3.01         Fees.

 

(a)           Asset Management Fee.  The Company shall pay the Advisor a monthly
Asset Management Fee for each month in an amount equal to 1/12th of the Applicable Asset Management Fee
Percentage of the sum of, for each and every Asset, the higher of the Cost of
Investment or the Value of Investment as of the last day of such month;
provided, however, that no portion of such fee shall be earned or paid if such
portion would cause the total Asset Management Fees earned by the Advisor since
the Effective Date to exceed the amount of Asset Management Fees the Advisor
would have earned if the Applicable Asset Management Fee Percentage had been
1.00% every day since the Effective Date. 
The Advisor, in its sole discretion, may waive, reduce or defer all or
any portion of the Asset Management Fee to which it would otherwise be
entitled.  The Asset Management Fee will
be due on the 15th day following the end of the month for which
it applies.

 

(b)           Acquisition and Advisory Fees.  The Company shall pay the Advisor a fee in
the amount of 1.25% of the Contract Purchase Price of each Asset as Acquisition
and Advisory Fees.  The total of all
Acquisition Fees and any Acquisition Expenses shall be limited in accordance
with the Articles of Incorporation. 
Acquisition and Advisory Fees shall be paid as follows: (1) for real
property (including properties where development/redevelopment is expected), at
the time of acquisition, (2) for development/redevelopment projects (other than
the initial acquisition of the real property), at the time a final budget is
approved, and (3) for loans and similar assets (including without limitation
mezzanine loans), quarterly based on the value of loans made or acquired.  In the case of a development/redevelopment
project subject to clause (2) above, upon completion of the
development/redevelopment project, the Advisor shall determine the actual
amounts paid.  To the extent the amounts
actually paid vary from the budgeted amounts on which the Acquisition and
Advisory Fee was initially based, the Advisor will pay or invoice the Company
for 1.25% of the budget variance such that the Acquisition and Advisory Fee is
ultimately 1.25% of amounts expended on such development/redevelopment
project.  The Advisor, in its sole
discretion, may waive, reduce or defer all or any portion of the Acquisition
and Advisory Fees to which it would otherwise be entitled.  With respect to Joint Venture 

 

13

 

investments, such fees will
be prorated based on the Company’s portion of the capital contributed to the
Joint Venture.

 

(c)           [Intentionally Omitted]

 

(d)           Debt Financing Fee. 
In the event of any debt financing obtained by or for the Company
(including any refinancing of debt or assumption of debt), the Company will pay
to the Advisor a debt financing fee equal to one percent (1%) of the amount
available under the financing.  The Debt
Financing Fee includes the reimbursement of the specified cost incurred by the
Advisor of engaging third parties to source debt financing, and nothing herein
shall prevent the Advisor from entering fee-splitting arrangements with third
parties with respect to the Debt Financing Fee. 
The Advisor, in its sole discretion, may waive, reduce or defer all or
any portion of the Debt Financing Fee to which it would otherwise be
entitled.  With respect to Joint Venture
financings, such fee will be prorated based on the Company’s portion of the
capital contributed to the Joint Venture.

 

(e)           Development Fee. 
If the Advisor or an Affiliate provides the development services, the Company
shall pay the Advisor Development Fees in amounts that are usual and customary
for comparable services rendered to similar projects in the geographic market;
provided, however, that a majority of the Independent Directors must determine
that such Development Fees are fair and reasonable and on terms and conditions
not less favorable than those available from unaffiliated third parties.  Development Fees will include the
reimbursement of the specified cost incurred by the Advisor of engaging third
parties for such services.  With respect
to Joint Venture investments, such fees will be prorated based on the Company’s
portion of the capital contributed to the Joint Venture.  The Advisor, in its sole discretion, may
waive, reduce or defer all or any portion of the Development Fee to which it
would otherwise be entitled. 
Notwithstanding the above, the Advisor may engage (on behalf of the
Company) third parties to provide development services pursuant to its
authority under Section 2.03 and pay such third parties all applicable
Development Fees.

 

3.02         Expenses.

 

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

 

(i)            Organization and Offering Expenses; provided, however,
that once an Offering terminates, 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 in the completed Offering 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;

 

(ii)           Acquisition Fees and Acquisition Expenses;

 

(iii)          the actual cost of goods, services and materials used by
the Company and obtained from Persons not affiliated with the Advisor, other
than Acquisition Expenses, 

 

14

 

including brokerage fees
paid in connection with the purchase and sale of Shares or other securities;

 

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

 

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

 

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

 

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

 

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

 

(ix)           except as otherwise limited by the Articles of
Incorporation, expenses associated with Listing or with the issuance and
distribution of Shares and other securities of the Company, such as selling
commissions and fees, advertising expenses, taxes, legal and accounting fees
and Listing and registration fees, but excluding Organization and Offering
Expenses;

 

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

 

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

 

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

 

(xiii)         personnel and related employment costs
incurred by the Advisor or its Affiliates in performing the services described
herein, including but not limited to reasonable salaries and wages, benefits
and overhead of all employees directly involved in the performance of such
services; provided, that 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 a separate fee other than in
connection with the Advisor directly providing the Additional Services; and

 

(xiv)        audit, accounting and legal fees.

 

(b)           Expenses incurred by the Advisor on behalf of the Company
and payable pursuant to this Section 3.02 shall be reimbursed no less than
quarterly to the Advisor within 60 days after the end of each quarter.  The Advisor shall prepare a statement
documenting the expenses of the Company during each quarter, and shall deliver
the statement to the Company within 45 days after the end of each quarter.

 

15

 

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

 

3.04         Reimbursement
to the Advisor. Commencing upon the earlier to occur of
four fiscal quarters after (i) the Company’s acquisition of its first Asset or
(ii) six months after commencement of its first Offering, the Company shall not
reimburse the Advisor for Total Operating Expenses to the extent that Total
Operating Expenses (including the Asset Management Fee), in the four
consecutive fiscal quarters then ended (the “Expense
Year”) exceed (the “Excess Amount”)
the greater of 2% of Average Invested Assets or 25% of Net Income for that
period of four consecutive fiscal quarters. Any Excess Amount paid to the
Advisor during a fiscal quarter shall be repaid to the Company. Reimbursement
of all or any portion of the Total Operating Expenses that exceed the
limitation set forth in the preceding sentence may, at the option of the Advisor,
be deferred without interest and may be reimbursed in any subsequent Expense
Year where such limitation would permit such reimbursement if the Total
Operating Expense were incurred during such period. Notwithstanding the
foregoing, if there is an Excess Amount in any Expense Year and the Independent
Directors determine that all or a portion of such excess was justified, based
on unusual and nonrecurring factors which they deem sufficient, the Excess
Amount may be reimbursed to the Advisor. 
If the Independent Directors determine such excess was justified, then,
after the end of any fiscal quarter of the Company for which there is an Excess
Amount for the 12 months then ended paid to the Advisor, the Advisor, at the
direction of the Independent Directors, shall cause such fact to be disclosed
in the next quarterly report of the Company or in a separate writing and sent
to the Stockholders within 60 days of such quarter end, together with an
explanation of the factors the Independent Directors considered in determining
that such Excess Amount was justified. Such determination shall be reflected in
the minutes of the meetings of the Board. The Company will not reimburse the
Advisor or its Affiliates for services for which the Advisor or its Affiliates are
entitled to compensation in the form of a separate fee. All figures used in any
computation pursuant to this Section 3.04 shall be determined in accordance
with generally accepted accounting principles applied on a consistent basis.

 

ARTICLE
IV

 

TERM
AND TERMINATION

 

4.01         Term; Renewal.  Subject to Section 4.02 hereof, this
Agreement shall continue in force until one year from the Effective Date.  Thereafter, this Agreement may be renewed for
an unlimited number of successive one-year terms upon mutual consent of the
parties.  It is the duty of the Board to
evaluate the performance of the Advisor annually before renewing the Agreement,
and each such renewal shall be for a term of no more than one year.

 

4.02         Termination.  This Agreement will automatically terminate
upon Listing.  This agreement also may be
terminated at the option of either party upon 60 days written notice without
cause or penalty (if termination is by the Company, then the termination shall
be upon the approval of a majority of the Independent Directors).  Notwithstanding the foregoing, the provisions
of Section 4.03, Article V and Article VI shall continue in full force and
effect and shall survive the termination or expiration of this Agreement.

 

16

 

4.03         Payments to and Duties of
Advisor upon Termination.

 

(a)           After the Termination Date, the Advisor shall not be
entitled to compensation for further services hereunder except it shall be
entitled to and receive from the Company within 30 days after the effective
date of the termination all unpaid reimbursements of expenses, subject to the
provisions of Section 3.04 hereof, and all contingent liabilities related to
fees payable to the Advisor prior to termination of this Agreement.

 

(b)           Subject to Section 4.03(c) below, the Advisor shall
promptly upon termination:

 

(i)            pay over to the Company all money collected and held for
the account of the Company pursuant to this Agreement, after deducting any
accrued compensation and reimbursement for its expenses to which it is then
entitled;

 

(ii)           deliver to the Board a full accounting, including a
statement showing all payments collected by it and a statement of all money
held by it, covering the period following the date of the last accounting
furnished to the Board;

 

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

 

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

 

(c)                                  In the event
that a Termination Date occurs after the commencement of an Offering and prior
to the Advisor’s reimbursement of Organization and Offering Expenses pursuant
to the provisions of Section 3.02(a)(i), the Advisor shall, within 90 days
after the end of the year in which such Offering terminates, make the necessary
reimbursement.

 

ARTICLE
V

 

INDEMNIFICATION

 

5.01         Indemnification by the
Company.

 

(a)                                  The Company
shall indemnify and hold harmless the Advisor and its Affiliates, including
their respective officers, directors, partners and employees, from all
liability, claims, damages or losses arising in the performance of their duties
hereunder, and related expenses, including reasonable attorneys’ fees, to the
extent such liability, claims, damages or losses and related expenses are not
fully reimbursed by insurance, subject to any limitations imposed by the laws
of the State of Maryland, the Articles of Incorporation and the NASAA REIT
Guidelines.  Notwithstanding the foregoing,
the Company shall not indemnify or hold harmless the Advisor or its Affiliates,
including their respective officers, directors, partners and employees, for any
liability or loss suffered by the Advisor or its Affiliates, including their
respective officers, directors, partners and employees, nor shall it provide
that the Advisor or its Affiliates, including their respective officers,
directors, partners and employees, be held harmless for any loss or liability
suffered by the Company, unless all of the following conditions are met: (i)
the Advisor or its Affiliates, including their respective officers, directors,
partners and employees, have determined, in good faith, that the course of
conduct which caused the 

 

17

 

loss or liability was in the
best interests of the Company; (ii) the Advisor or its Affiliates, including
their respective officers, directors, partners and employees, were acting on
behalf of or performing services of the Company; (iii) the liability or loss
was not the result of negligence or misconduct by the Advisor or its
Affiliates, including their respective officers, directors, partners and
employees; and (iv) the indemnification or agreement to hold harmless is
recoverable only out of the Company’s net assets and not from stockholders.
Notwithstanding the foregoing, the Advisor and its Affiliates, including their
respective officers, directors, partners and employees, shall not be
indemnified by the Company for any losses, liability or expenses arising from
or out of an alleged violation of federal or state securities laws by such
party unless one or more of the following conditions are met: (i) there has
been a successful adjudication on the merits of each count involving alleged securities
law violations as to the particular indemnitee; (ii) such claims have been
dismissed with prejudice on the merits by a court of competent jurisdiction as
to the particular indemnitee; and (iii) a court of competent jurisdiction
approves a settlement of the claims against a particular indemnitee and finds
that indemnification of the settlement and the related costs should be made,
and the court considering the request for indemnification has been advised of
the position of the Securities and Exchange Commission and of the published
position of any state securities regulatory authority in which securities of
the Company were offered or sold as to indemnification for violations of
securities laws.

 

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

 

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

 

5.02         Indemnification by Advisor.  The Advisor shall indemnify and hold harmless
the Company from contract or other liability, claims, damages, taxes or losses
and related expenses including attorneys’ fees, to the extent that the
liability, claims, damages, taxes or losses and related expenses are not fully
reimbursed by insurance and are incurred by reason of the Advisor’s bad faith,
fraud, misfeasance, misconduct, gross negligence or reckless disregard of its
duties, but the Advisor shall not be held responsible for any action of the
Board in following or declining to follow any advice or recommendation given by
the Advisor.

 

18

 

ARTICLE
VI

 

MISCELLANEOUS

 

6.01         Assignment to an Affiliate.  This Agreement and any rights, duties,
liabilities and obligations hereunder and the fees and compensation related
thereto may be assigned by the Advisor, in whole or in part, to a duly
qualified and licensed Affiliate of the Advisor without obtaining the approval
of the Board.  Any other assignment shall
be made only with the approval of a majority of the Board (including a majority
of the Independent Directors).  The
Advisor may assign any rights to receive fees or other payments under this
Agreement without obtaining the approval of the Board.  This Agreement shall not be assigned by the
Company without the consent of the Advisor, except in the case of an assignment
by the Company to a corporation or other organization which is a successor to
all of the assets, rights and obligations of the Company, in which case the
successor organization shall be bound hereunder and by the terms of said
assignment in the same manner as the Company is bound by this Agreement.  This Agreement shall be binding on successors
to the Company resulting from a Change of Control or sale of all or
substantially all the assets of the Company or the Operating Partnership, and
shall likewise be binding upon any successor to the Advisor.

 

6.02         Non-Solicitation.  During the period commencing on the Effective
Date and ending one year following the termination of this Agreement, the
Company shall not, without the Advisor’s prior written consent, directly or
indirectly, (i) solicit or encourage any person to leave the employment or
other service of the Advisor or any of its affiliates, or (ii) hire, on behalf
of the Company or any other person or entity, any person who has left the
employment of the Advisor or any of its affiliates within the one-year period
following the termination of that person’s employment with the Advisor or any
of its affiliates.  During the period
commencing on the Effective Date and ending one year following the termination
of this Agreement, the Company will not, whether for its own account or for the
account of any other person, firm, corporation or other business organization,
intentionally interfere with the relationship of the Advisor or any of its
affiliates with, or endeavor to entice away from the Advisor or any of its
affiliates, any person who during the term of this Agreement is, or during the
preceding one-year period was, a tenant, co-investor, co-developer, joint
venturer or other customer of the Advisor or any of its affiliates.

 

6.03         Relationship of Advisor
and Company.  The Company
and the Advisor are not partners or joint venturers with each other, and
nothing in this Agreement shall be construed to make them such partners or
joint venturers or impose any liability as such on either of them.

 

6.04         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 Articles of Incorporation, the Bylaws, or accepted by the party to whom
it is given, and shall be given by being delivered by hand or by overnight mail
or other overnight delivery service to the addresses set forth herein:

 

	
  To the Directors and to
  the Company:

  	
  Behringer Harvard
  Multifamily REIT II, Inc.

  
	
   

  	
  15601 Dallas Parkway

  
	
   

  	
  Suite 600

  
	
   

  	
  Addison, Texas 75001

  
	
   

  	
   

  
	
  To the Advisor:

  	
  Behringer Harvard
  Multifamily Advisors II, LLC

  
	
   

  	
  15601 Dallas Parkway

  
	
   

  	
  Suite 600

  
	
   

  	
  Addison, Texas 75001

  

 

19

 

Either party shall, as soon
as reasonably practicable, give notice in writing to the other party of a
change in its address for the purposes of this Section 6.04.

 

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

 

6.06         Severability.  The provisions of this Agreement are
independent of and severable from each other, and no provision shall be
affected or rendered invalid or unenforceable by virtue of the fact that for
any reason any other or others of them may be invalid or unenforceable in whole
or in part.

 

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

 

6.08         Entire Agreement.  This Agreement contains the entire agreement
and understanding among the parties hereto with respect to the subject matter
hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter
hereof.  The express terms hereof control
and supersede any course of performance and/or usage of the trade inconsistent
with any of the terms hereof. This Agreement may not be modified or amended
other than by an agreement in writing signed by each of the parties hereto.

 

6.09         Waiver.  Neither the failure nor any delay on the part
of a party to exercise any right, remedy, power or privilege under this
Agreement shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, power or privilege preclude any other or further
exercise of the same or of any other right, remedy, power or privilege, nor
shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of the right, remedy, power or privilege
with respect to any other occurrence.  No
waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted the waiver.

 

6.10         Gender; Number.  Words used herein regardless of the number
and gender specifically used, shall be deemed and construed to include any
other number, singular or plural, and any other gender, masculine, feminine or
neuter, as the context requires.

 

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

 

6.12         Execution in Counterparts.  This Agreement may be executed in multiple
counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. 
This Agreement shall become binding when one or more counterparts
hereof, individually or taken together, shall bear the signatures of all of the
parties reflected hereon as the signatories.

 

6.13         Initial Investment.  The Advisor or one of its Affiliates has
contributed $200,001 (the “Initial Investment”)
in exchange for Shares of the Company. The Advisor or its Affiliates may not
sell any of the Shares purchased with the Initial Investment while the Advisor
acts in an advisory capacity to the Company. The restrictions included above
shall not apply to any Shares acquired by the Advisor or its Affiliates other
than the Shares acquired through the Initial Investment.

 

20

 

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

 

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

 

6.16         Savings Clause. 
If any provision of this Agreement is held unenforceable, then such provision
will be modified to reflect the parties’ intention.  All remaining
provisions of this Agreement shall remain in full force and effect.

 

[The remainder of this  page
intentionally blank]

 

21

 

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

 

	
   

  	
  BEHRINGER
  HARVARD MULTIFAMILY REIT II, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President —
  Corporate Development & Legal and Assistant Secretary

  
	
   

  	
   

  
	
   

  	
  BEHRINGER
  HARVARD MULTIFAMILY 

  ADVISORS II, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Gerald J. Reihsen, III

  
	
   

  	
   

  	
  Executive Vice President —
  Corporate Development & Legal and Assistant Secretary

  

 

22

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