MEMBERSHIP INTEREST PURCHASE AND SALE AGREEMENT (BH INTERESTS) FROM BEHRINGER HARVARD MULTIFAMILY OP I LP TO MILKY WAY PARTNERS, L.P.

Exhibit 10.8

MEMBERSHIP INTEREST

PURCHASE AND SALE AGREEMENT

(BH INTERESTS)

FROM

BEHRINGER HARVARD MULTIFAMILY OP I LP

TO

MILKY WAY PARTNERS, L.P.

CONTENTS

i

CONTENTS

ii

PURCHASE AND SALE AGREEMENT

SCHEDULE OF EXHIBITS AND APPENDICES

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MEMBERSHIP INTEREST

PURCHASE AND SALE AGREEMENT

(BH Interests)

This Purchase and Sale Agreement (this “Agreement”) is made as of the Effective Date (defined below), by and between BEHRINGER HARVARD MULTIFAMILY OP I LP, a Delaware limited liability company (“Seller”), and MILKY WAY PARTNERS, L.P., a Delaware limited partnership (“Buyer”).

R E C I T A L S

A.  Seller is the sole member of each of Behringer Harvard Belmar, LLC, a Delaware limited liability company (“Belmar Managing Member”), Behringer Harvard Cyan, LLC, a Delaware limited liability company (“Cyan Managing Member”), and Behringer Harvard Waterford Place, LLC, a Delaware limited liability company (“Waterford Managing Member”).  Belmar Managing Member is the managing member of, and is the owner and holder of a 70% limited liability company membership interest in, Behringer Harvard Belmar Venture, LLC, a Delaware limited liability company (“Belmar Venture”), Cyan Managing Member is the managing member of, and is the owner and holder of a 70% limited liability company membership interest in, Behringer Harvard Cyan Venture, LLC, a Delaware limited liability company (“Cyan Venture”); and Waterford Managing Member is the managing member of, and is the owner and holder of a 55% limited liability company membership interest in, Behringer Harvard Waterford Place Venture, LLC, a Delaware limited liability company (“Waterford Venture”), which interest represents a 95% indirect limited liability company membership interest in Waterford Venture’s indirect interest in Behringer Harvard Argenta, LLC, a Delaware limited liability company (“Argenta Title Holder”).  Each of Belmar Venture, Cyan Venture and Waterford Venture is the 99.9% indirect owner of its respective Property (as defined in Appendix 1.2), through one or more Subsidiaries (as defined in Appendix 1.2) controlled by such entity, as shown in the organizational charts attached to this Agreement as Exhibits ▇-▇, ▇-▇ and B-3.

B.  Seller is the sole member of and owner and holder of all of the limited liability company membership interests in each of (i) Behringer Harvard NOHO, LLC, a Delaware limited liability company (“NOHO Title Holder”), (ii) Behringer Harvard Park Crest Commercial, LLC, a Delaware limited liability company (“Park Crest Commercial Title Holder”) and (iii) Behringer Harvard Park Crest LLC, a Delaware limited liability company (“Park Crest Residential Title Holder”, and collectively with Park Crest Commercial Title Holder, the “Park Crest Title Holders”).

C.  Seller is (i) the sole member of and owner and holder of all of the limited liability company membership interests in Behringer Harvard Santa Rosa GP, LLC, a Delaware limited liability company (“Acacia GP”) and (ii) the sole limited partner of and owner and holder of a 99.9% limited partnership interest in Behringer Harvard Santa Rosa LP, a Delaware limited partnership (“Acacia Title Holder”; and collectively with Acacia GP, the “Acacia Entities”); and Acacia GP is the sole general partner of and owner and holder of a 0.1% general partner interest in Acacia Title Holder.

D.  Seller desires to sell, and Buyer desires to purchase from Seller, (i) a 15% limited liability company membership interest in each of Belmar Venture and Cyan Venture; (ii) a 45% limited liability company membership interest in each of certain limited liability companies to be formed as provided in this Agreement to own and hold, indirectly, the limited liability company and partnership interests in, respectively, (x) NOHO Title Holder, (y) Park Crest Title Holders; and (z) the Acacia Entities; and (iii) a 40% limited liability company membership interest in Waterford Venture, representing an indirect 40% limited liability company membership interest in Argenta Title Holder.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer agree as follows:

ARTICLE 1.  SCHEDULE; DEFINITIONS; PURCHASE PRICE

1.1                               Schedule.  The following basic terms are made a part of this Agreement:

1.2                               Definitions.  Certain terms, capitalized but not defined in the body of this Agreement or otherwise designated in Section 1.1 hereof, shall have the meanings ascribed to them on Appendix 1.2 attached hereto.

1.3                               Purchase and Sale.  Seller agrees to sell and convey and cause the applicable Managing Members to sell and convey to Buyer, and Buyer agrees to purchase from Seller, the Interests on the terms and conditions set forth herein.

1.4                               ▇▇▇▇▇▇▇ Money.  If Buyer does not exercise its right to terminate this Agreement on or before the expiration of the Due Diligence Period pursuant to Section 2.4, (i) Seller, Buyer and the Escrow Agent shall execute the escrow agreement substantially in the form of Appendix 1.4 attached hereto (the “Escrow Agreement”) and (ii) on or before the date which is eight (8) days following the Effective Date, Buyer shall deposit the ▇▇▇▇▇▇▇ Money with the Escrow Agent.  The ▇▇▇▇▇▇▇ Money shall be held and disbursed as provided in the Escrow Agreement.  If the ▇▇▇▇▇▇▇ Money becomes payable to Seller pursuant to any provision of this Agreement prior to the date the ▇▇▇▇▇▇▇ Money has been deposited with the Escrow Agent, then the ▇▇▇▇▇▇▇ Money shall nevertheless be deposited with the Escrow Agent and held and disbursed as provided in the Escrow Agreement.

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ARTICLE 2.  INSPECTION

2.1                               Due Diligence; Indemnity.  Buyer shall have the Due Diligence Period in which to examine and inspect the Properties, and the Companies to determine, in its sole discretion, whether the Properties, the Companies and the Interests are satisfactory to Buyer.  Upon reasonable advance notice to Seller and BH subject to the rights of tenants under Leases, Buyer and other parties designated by it (“Buyer’s Representative”) shall have reasonable access to the Properties and all books and records for the Properties and the Companies that are in Seller’s or its property manager’s possession or control for the purpose of conducting surveys, inspections and tests (including reasonable intrusive inspection and sampling), required by Buyer.  Seller shall have the right to accompany Buyer during its inspection and investigation of the Properties.  In the course of its investigations, but subject to the provisions of Section 9.6, Buyer may make inquiries to third parties, including, without limitation, municipal, local and other government representatives.

If any inspection or test damages a Property, Buyer will restore such Property to its condition immediately prior to any such inspection or test.  Notwithstanding the foregoing, Buyer shall not conduct any soil borings, core samples or other invasive testing without the prior written consent of Seller and BH, which consent will not unreasonably withheld, delayed or conditioned and which shall be deemed given unless the Seller or BH provides written notice of objection to Buyer, specifying the basis for such objection, within three (3) days after submission by Buyer of a request for such testing.  Buyer shall indemnify, defend, and hold Seller and each Title Holder harmless from any liens arising out of its inspections as well as any claims asserted by third parties against Seller or any Title Holder (other than those arising out of the gross negligence or willful misconduct of Seller or BH or any of their respective Affiliates) to recover for personal injury or property damage as a result of Buyer’s Representative’s entry onto the Properties; provided, however, the indemnity shall not extend to protect Seller from any pre-existing liabilities for matters merely discovered by Buyer (i.e., latent environmental contamination) so long as Buyer’s actions do not intentionally exacerbate any pre-existing liability of Seller.  Buyer shall procure and continue in force from and after the date Buyer and Buyer’s designated agents first enter the Properties, and continuing throughout the term of this Agreement, liability insurance of not less than $5,000,000.  Prior to entering the Property, Buyer shall provide to Seller a certificate of insurance evidencing such coverage.  Buyer’s obligations under this Section 2.1 shall survive the termination of this Agreement for a period of twelve (12) months.

2.2                               Seller’s Delivery of Specified Documents.  Buyer acknowledges that, prior to the Effective Date, Seller or BH has provided to Buyer access to a virtual data room containing information with respect to the Properties and the Existing Companies.  Seller or BH shall, within two (2) Business Days after the Effective Date, provide to Buyer complete copies of any of the following in the possession or control of either which has not previously been made available to Buyer through the virtual data room: (a) the items set forth on Appendix 2.2(a) to this Agreement with respect to each Property (collectively, the “Property Information”), and (b) the Charter Documents of each of the Existing Companies and the other documents listed on Appendix 2.2(b) (the “Company Information”).  During the pendency of this Agreement, (i) Seller and BH shall post in the virtual data room any document described above as and when it comes into Seller’s, BH’s or its property manager’s possession or control or is produced by Seller, BH or its property manager after the initial delivery of the Property Information; and (ii) Seller and BH shall endeavor to keep Buyer reasonably informed as to the material operation of the Properties, and shall post in such virtual data room copies of leasing status reports, operating statements and other management reports with respect to the Properties prepared in the ordinary course of business.  Without limiting the foregoing, Seller and BH shall make all other documents, files and information concerning the Properties and the Existing Companies in the possession or control of Seller or BH available for Buyer’s inspection at the Properties, in such virtual data room or such other location as the parties may reasonably agree.  Notwithstanding any contrary provision of this Section 2.2, Seller, BH, any of their

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respective Affiliates and/or the property manager (each, a “Disclosing Party”) shall have no obligation to provide Buyer with any document reasonably believed by such Disclosing Party to be proprietary or confidential, or whose disclosure to Buyer would require disclosure by such Disclosing Party in connection with its financial reporting, securities disclosures or other legal, tax or financial requirements or guidelines applicable to such Disclosing Party, including any disclosures required to the Securities and Exchange Commission.  Buyer acknowledges that, prior to the Effective Date, Seller and ▇▇▇▇▇▇▇ Capital Management LLC entered into that certain Access and Confidentiality Agreement dated as of August 15, 2011, pursuant to which Buyer, directly or indirectly, has been granted access to the Property Information and Company Information in compliance with this Section 2.2.

2.3                               Title and Survey.  Buyer, at its expense, may, during the Due Diligence Period, order (i) any no further action letters, date down endorsements, updated title reports with respect to each of the Existing Title Policies, or commitments for new owner’s title insurance policies as it desires, (ii) such surveys or updates to existing surveys with respect to the Properties as it desires and (iii) such UCC, judgment, lien and bankruptcy searches with respect to Seller, the Companies and the Properties as it desires.  Seller and BH shall cooperate to cause the Title Holders and other parties, as applicable, to execute owner’s affidavits, GAP undertakings, non-imputation affidavits, and no-change affidavits with respect to existing surveys, in customary form and modified to reflect existing facts, as Buyer may reasonably request, to enable Buyer to obtain at Closing new title insurance policies inuring the Title Holders or date-downs to Existing Title Policies (collectively, “Title Coverage Deliveries”).

2.4                               Objection Notice.  If Buyer is not satisfied in its sole discretion with any of its inspections, reviews or with any other matter concerning the Properties or the Companies, Buyer may, either (i) on or prior to the expiration of the Due Diligence Period, terminate this Agreement by notice to Seller, in which event neither party shall have further obligations hereunder, except for the payment of certain expenses pursuant to Section 5.3 and except with respect to the provision of Section 2.1, or (ii) on or prior to October 3, 2011, raise certain objections by providing notice in writing (the “Objection Notice”), which Objection Notice may, at Buyer’s option, specify in reasonable detail which matters (the “Objections”) Buyer does not find satisfactory with respect to the Properties.

If Buyer timely provides an Objection Notice, then Seller shall have three Business Days (3) after delivery of such Objection Notice to notify Buyer in writing as to whether it intends to remove or cause to be corrected to Buyer’s satisfaction, any of such Objections, and removal or correction of any such Objections which Seller elects to remove or correct (or is obligated to remove or correct hereunder) shall be a condition to Borrower’s obligation to close (collectively, “Mandatory Cure Items”).  Anything herein to the contrary notwithstanding, Seller shall not have any obligation to remove or correct any Objections other than voluntary Encumbrances of the Interests or the Properties (but not including liens and security interests securing the Loans), or any other Objections which Seller elects to cure as provided above, all of which shall be removed by Seller on or before Closing.  The foregoing notwithstanding, Seller shall be required to (i) remove any mechanic’s or material liens encumbering the Properties or (ii) cause such liens to be insured over on the title policies or date down endorsements obtained by Buyer at Closing or otherwise bonded over or secured to Buyer’s reasonable satisfaction.

If Seller does not elect in writing to remove or correct any Objection to Buyer’s satisfaction within such three (3) Business Day period, then Buyer shall elect by written notice to Seller on or prior to the expiration of the Due Diligence Period, to terminate this Agreement, in which event the ▇▇▇▇▇▇▇ Money (to the extent deposited with the Escrow Agent) shall be immediately returned to Buyer and neither party shall have any further obligations hereunder, except for the payment of certain expenses pursuant to Section 5.3 and except with respect to the provisions of Section 2.1, or (ii) accept the Interests and the Properties subject to any Objections (other than Mandatory Cure Items), and proceed to close as

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to all of the Interests, with the further right to deduct from the Purchase Price amounts required to remove any Mandatory Cure Items that are liens of an ascertainable amount.

If this Agreement is not terminated on or prior to the expiration of the Due Diligence Period, then Buyer shall proceed to close under this Agreement subject only to the satisfaction of Buyer’s closing conditions set forth in Section 4.2 of this Agreement.

ARTICLE 3.  OPERATIONS AND RISK OF LOSS

3.1                               Ongoing Operations.  From the Effective Date through the Closing Date:

(a)                                 Operation of Properties.  Seller and BH shall use Commercially Reasonable Efforts to cause each Title Holder to maintain each Property in substantially its current condition, subject to ordinary wear and tear, natural deterioration and obsolescence between the Effective Date and the Closing Date, and in material compliance with all applicable Laws.  Except as necessary to comply with the preceding sentence, Seller and BH shall not make or permit any material alterations to the Properties or any portion thereof without Buyer’s prior written consent, which shall not be unreasonably withheld, conditioned or delayed.  Seller and BH will cause each Managing Member and each Company to perform its material obligations under all Leases, Service Contracts and other agreements that may affect it or its Property or the Interests.  Seller and BH will not remove or permit the removal of any Personal Property except as may be required for necessary repair or replacement, and repair and replacement shall be of equal quality and quantity as existed as of the time of its removal.  None of Seller, BH nor their employees, agents or contractors, shall knowingly or intentionally take or permit to be taken any action that causes Seller’s representations or warranties to become materially untrue or that causes one or more of Buyer’s conditions to Closing to be unsatisfied or knowingly or intentionally fail to take any action within its actual control that is required to cause Seller’s representations and warranties to be true.

(b)                                 New Contracts.  Seller and BH shall not, and shall not knowingly or intentionally cause or permit any of the Managing Members or the Companies to, (i) without Buyer’s prior written consent (which may be withheld in Buyer’s reasonable discretion prior to the expiration of the Due Diligence Period and in Buyer’s sole discretion after the end of the Due Diligence Period), amend, grant concessions or waivers regarding or under, or enter into any material contract or other agreement that will be an obligation affecting any of the Companies or any Property after Closing or binding on any of the Companies after Closing, except leases or service contracts in the ordinary course of business consistent with past practices (and consistent with then-current concessions and parameters) and contracts terminable by any of the Companies without penalty on no later than 60 days’ notice or (ii) list the Interests or any Property with any broker or otherwise solicit, negotiate or accept any offers to sell all or any part of the Interests or the Properties or any interest therein or in any of the Subsidiaries.  If Buyer fails to respond to a request of Seller for consent required by Section 3.1(b)(i) within five (5) days after Buyer’s receipt of Seller’s written request and all information reasonably required in order to make an informed decision, Buyer shall (A) prior to the expiration of the Due Diligence Period, be deemed to have consented to Seller entering into such contract or agreement and (B) after the expiration of the Due Diligence Period, be deemed to have objected to such proposed action.

(c)                                  Maintenance of Permits and Insurance.  Seller and BH shall cause each of the Managing Members and Existing Companies to maintain in existence all licenses, permits and approvals necessary or reasonably appropriate to the ownership, operation or improvement of its Property or Properties as well as all insurance currently affecting the Properties.

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(d)                                 Leasing.  Seller and BH shall not cause or permit any Title Holder or any of the Managing Members or the Companies to enter into any Leases, or grant any lease concessions, incentives or waivers, except in the ordinary course of business consistent with current practices.

(e)                                  Loan Documents.  Seller and BH will cause the Managing Members and the Companies to timely comply with all of the terms and conditions of the Loan Documents.  Except for any amendments expressly contemplated hereby, Seller and BH shall not and shall not cause or permit any of Managing Members and the Companies to amend or terminate the Loan Documents without Buyer’s prior written consent (which may be withheld in Buyer’s reasonable discretion prior to the expiration of the Due Diligence Period and in Buyer’s sole discretion after the end of the Due Diligence Period).

(f)                                   Property Encumbrances.  Except for any liens and security interests securing any New Loan, Seller and BH shall not create or acquiesce to the creation of, and shall not permit any Title Holder to create or acquiesce to the creation of, any Encumbrances to title with respect to any Property other than the Existing Title Exceptions with respect to such Property, without in each case the prior written consent of Buyer, which consent may not be unreasonably withheld, conditioned or delayed prior to the expiration of the Due Diligence Period, but which may be withheld in Buyer’s sole discretion following the expiration of the Due Diligence Date.

(g)                                  Ownership Interests.  Seller and BH shall not, and shall not permit any of the Managing Members or the Companies to, sell, assign, convey, transfer, pledge, hypothecate or otherwise Encumber any membership or partnership interest in any of the Companies, other than (i) the assignment of the Interests pursuant to this Agreement, and (ii) the contribution of the interests in NOHO Title Holder, the Park Crest Title Holders and the Acacia Entities to the New REIT Subs as contemplated by this Agreement.

3.2                               Damage.  Risk of loss up to and including the Closing Date shall be borne by Seller.  Seller shall promptly give Buyer written notice of any damage to the Properties, describing such damage, stating whether such damage and loss of rents is covered by insurance and the estimated cost of repairing such damage.  In the event of any “material damage” (described below) to any Property, Buyer may, at its option, by notice to Seller given within ten (10) Business Days after Seller has provided the above described notice (and if necessary the Closing Date as it pertains to such Property, but only as it pertains to such Property, shall be extended to give Buyer the full ten (10) Business Day period to make its election) to:  (i) terminate this Agreement, or (ii) proceed under this Agreement including the Interest in the Venture which owns the damaged Property, and receive a credit at Closing for Seller’s applicable percentage of any applicable deductible amount under any insurance policies.  If Buyer fails to timely make such election, Buyer shall be deemed to have elected to terminate this Agreement.  If the applicable Property is not materially damaged, then (x) Buyer shall not have the right to terminate this Agreement and (y) at Closing, Buyer shall receive a credit for the applicable Percentage Interest of any deductible amount under said insurance policies and any uninsured loss.  “Material damage” and “materially damaged” means, with respect to each Property, damage which in Buyer’s and Seller’s reasonable estimation (based on a third party report, prepared by a qualified third party, that is mutually acceptable to Buyer and Seller, each acting in its reasonable discretion) exceeds $500,000 to repair.

3.3                               Condemnation.  In the event any proceedings in eminent domain are contemplated, threatened or instituted against any portion of any Property by any Governmental Authority having the power of eminent domain, Buyer may, at its option, by notice to Seller given within ten (10) Business Days after Seller provides written notice to Buyer of such proceedings together with all relevant information concerning such proceedings (and if necessary the Closing Date as it pertains to such Property, but only as it pertains to such Property, shall be extended to give Buyer the full ten (10) Business Day period to make such election):  (i) terminate this Agreement, or (ii) proceed under this

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Agreement as to the Interests including the affected Interest, in which case Buyer shall receive a credit at Closing in an amount equal to, (x) with respect to any Wholly Owned Property, 45% of any condemnation proceeds with respect to such taking previously distributed to Seller, (y) with respect to Belmar or Cyan, 21.43% of any condemnation proceeds with respect to such Taking previously distributed to Seller or the respective Managing Member; and with respect to Argenta, 42.1% of any condemnation proceeds with respect to such Taking previously distributed to Seller or the respective Managing Member.  If Buyer fails to timely make such election, Buyer shall be deemed to have elected to terminate this Agreement.

3.4                               Certain Tax Matters.

(a)                                 For that portion of its taxable year in which the Closing occurs which ends on the Closing Date, Seller covenants and agrees to cause each Existing REIT Sub to operate and take any other actions necessary to cause each Existing REIT Sub to qualify as a REIT under the Code and avoid the imposition of U.S. federal income tax under Section 857(c) of the Code or Section 4981 of the Code.

(b)                                 Between the Effective Date and the Closing Date, Seller shall give Buyer and its authorized representatives full access to all books, records and tax returns of or relating to the Existing REIT Subs, whether in possession of an Existing REIT Sub, Seller, BH or any of their Affiliates or any third-party professional advisor or representative, in order that Buyer may have full opportunity to make such investigations as it shall desire to make of the affairs of the Existing REIT Subs.  Seller and BH shall use Commercially Reasonable Efforts to cause all of their respective third-party advisors and representatives, including without limitation accountants and attorneys, to fully cooperate and be available to Buyer in connection with such investigation.

(c)                                  Not later than December 31, 2011, Seller shall cause each of the New REIT Subs to file a valid election, effective as of the day immediately following the Closing Date, pursuant to Treasury Regulations Section 301.7701-3(c) to be treated as an association taxable as a corporation for U.S. federal income tax purposes.  Seller covenants and agrees that Seller shall cause each New REIT Sub to file, on its return for the taxable year beginning on the first day such New REIT Sub is treated as an association taxable as a corporation, an election pursuant to Section 856(c)(1) of the Code to be treated as a REIT.  The provisions of this Section 3.4(c) shall survive Closing.

3.5                               Restructuring of Wholly Owned Properties.

(a)                                 Prior to the Closing Date, Seller shall form a new Delaware limited liability company with respect to each of the Wholly Owned Properties (each a “New Venture” and collectively the “New Ventures”).  Prior to Closing Seller shall be the sole member of each New Venture, and following Closing, Seller shall be the 55% managing member and Buyer shall be the 45% non-managing member of each new Venture, as provided in the applicable Amended and Restated Venture Agreement.  The parties hereto intend that each New Venture shall initially be classified as an entity disregarded as separate from its owner for U.S. federal income tax purposes, and Seller agrees to take no action inconsistent with such treatment.

(b)                                 Prior to the Closing Date, Seller shall cause each New Venture to form a new Delaware limited liability company Subsidiary (each a “New REIT Sub” and collectively, the “New REIT Subs”), in which such New Venture shall be the owner and holder of all REIT Units in such New REIT Sub and, prior to Closing, the sole member of such New REIT Sub.  The limited liability company operating agreement for each New REIT Sub shall be in a form approved by Buyer and Seller.  The parties hereto intend that each New REIT Sub shall initially be classified as an entity disregarded as separate from its

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owner for U.S. federal income tax purposes and Seller agrees to take no action, and to cause each New Venture to take no action, inconsistent with such treatment.

(c)                                  Prior to the Closing Date Seller shall contribute all of its membership or partnership interests, as applicable, in NOHO Title Holder, the Park Crest Title Holders and the Acacia Entities to the applicable New REIT Sub.

ARTICLE 4.  CLOSING

4.1                               Closing.  The Closing shall occur on the Closing Date through an escrow with the Title Company at the offices of the Title Company.  Buyer and Seller shall execute supplemental escrow instructions as may be appropriate to enable the Title Company to comply with the terms of this Agreement, so long as such instructions are not in conflict with this Agreement.  The transactions described herein shall be closed by means of concurrent delivery of the documents of title, transfer of interest, delivery of title policies or endorsements (or the Title Company’s written irrevocable commitment to issue such title policies or endorsements) and the Purchase Price.

4.2                               Conditions to the Parties’ Obligations to Close.

(a)                                 Debt Conditions.

A.                                    As a condition to Buyer’s obligation to close, any consent of a Lender to the conveyance of the Interests and the Restructuring required under any of the Loan Documents shall have been obtained from each applicable Lender and any terms and conditions imposed by any such Lender in connection with issuing such consent shall be satisfactory to the Buyer in its sole discretion.

B.                                    As a condition to Buyer’s obligation to close, the provisions governing permitted transfers under the Loan Documents shall have been modified to the extent necessary to (i) provide Buyer with the same rights to transfer or Encumber the Interests as currently provided to the Related Seller and its constituent entities, (ii) eliminate any restrictions on transfer or encumbrance of direct or indirect interests in Buyer; and (iii) permit the issuance of Preferred Units in each New REIT Sub.

C.                                    As a condition to Buyer’s obligation to close, neither Buyer nor any of its direct or indirect owners shall be obligated to assume any personal liability for any of the undertakings under the Loan Documents.

D.                                    As a condition to Buyer’s obligation to close, as of the Closing Date there shall not exist any uncured event of default under the Loan Documents and each Title Holder shall have paid in full all interest and other amounts (including, without limitation, installments of principal and interest and any applicable fees, charges or penalties) that are then due and payable under the Loan Documents to which it is a party at or prior to Closing.

E.                                     As a condition to Buyer’s, Seller’s and BH’s obligation to close, Seller and BH shall have obtained and consummated a mortgage loan for the residential portion of Park Crest (but not including the commercial portion of Park Crest) (a “New Loan”) with a loan to value ratio (based on the value for such Property as agreed by Buyer, Seller and BH) not to exceed 50%, and otherwise on terms mutually satisfactory to Buyer, Seller and BH.  Following the expiration of the Due Diligence Period Seller and BH shall use Commercially Reasonable Efforts to obtain and consummate a New Loan for each such Property.  Buyer, Seller and BH shall promptly provide to each Lender all information the Lender may reasonably require in order to consummate such New Loan.  Except to the extent set forth in clause (ii) of

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the immediately following paragraph, costs incurred in obtaining any New Loan shall be borne by the applicable Title Holder.

F.                                      As a condition to Buyer’s obligation to close, Seller and BH shall have obtained a term sheet for a mortgage loan for the commercial portion of Park Crest, on terms mutually satisfactory to Buyer, Seller and BH.  The closing of such loan shall not be a condition to Closing, but Seller and BH shall use commercially reasonable efforts to effect such closing as soon as practicable after the Closing, which obligation shall survive Closing.

The conditions precedent set forth in this Section 4.2(a), and in Section 4.2(a) of the Related PSA, are referred to collectively in this Agreement as the “Debt Conditions”.  If Buyer does not exercise its right to terminate this Agreement on or before the expiration of the Due Diligence Period pursuant to Section 2.4, following the expiration of the Due Diligence Period, Seller and BH shall use Commercially Reasonable Efforts to cause the Debt Conditions to be satisfied and Buyer agrees to cooperate in good faith and with reasonable diligence with such efforts.  At Closing Buyer shall pay (or reimburse Seller or BH, as applicable, with respect to) (i) 100% of any payments required to be made to any Lender and 100% of the reasonable legal fees of BH’s debt counsel incurred in connection with satisfaction of the Debt Conditions in Sections 4.2(a)(A) and (B) and (ii) 45% of any payments required to be made and actually paid (or to be paid on the Closing Date) to any Lender and 45% of the reasonable legal fees of BH’s debt counsel theretofore incurred and actually paid (or to be paid on the Closing Date), in each case, in connection with satisfaction of the Debt Condition in Section 4.2(a)(E).  Buyer shall have no obligation to pay or reimburse any fees, costs or other expenses in connection with satisfaction of the Debt Conditions in Sections 4.2(a)(C) and (D).  Buyer shall have the right to participate with Seller and BH with respect to negotiation with each Lender concerning satisfaction of the Debt Conditions.

(b)                                 Intentionally Omitted.

(c)                                  REIT Opinions.  As a condition to Buyer’s obligation to close, Buyer shall have received an opinion from DLA Piper, which shall also be addressed to Seller, in form and substance satisfactory to Buyer, as to each Existing REIT Sub, that such Existing REIT Sub has been organized and operated in conformity with the requirements for qualification as a REIT for U.S. federal income tax purposes for all taxable periods commencing with the first year that such Existing REIT Sub elected to be classified as a REIT under the Code through and including the Closing Date.

(d)                                 Approval of Limited Partner.  As a condition to Buyer’s obligation to close, on or before December 1, 2011, this Agreement and the Related PSA and the transactions hereunder and thereunder, shall have been approved by Buyer’s limited partner (the “Approval Condition”).  Buyer shall promptly notify Seller and BH upon receipt of such approval.  If Buyer does not provide notice to Seller and BH with respect to satisfaction of the Approval Condition on or before December 1, 2011, the Approval Condition shall be deemed to have not been met.  If the Approval Condition is not met, the ▇▇▇▇▇▇▇ Money (if previously deposited by Buyer) shall be returned to Buyer, this Agreement shall terminate, and no party shall have any further obligation to any other, except for obligations which survive termination as expressly provided in this Agreement.

(e)                                  Title Policies.  It shall be a condition to Buyer’s obligation to close that the Title Company (or another national title insurance company reasonably acceptable to Buyer) shall be committed to issue, upon the condition of the payment of its applicable premium and other standard conditions contained in commercially available commitments for title insurance (e.g., delivery of organizational documents and consents, affidavits and transaction documents), an ALTA form (or other form required by state law) owner’s policy of title insurance with respect to each Property, with extended coverage (i.e., with ALTA General Exceptions 1 through 5 deleted, or if the Property is located in a non-

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ALTA state, with corresponding deletions to the extent available), insuring the applicable Title Holder in the amount of the value allocated to such Property as shown on Appendix 1.1, that title to the Property is vested of record in such Title Holder on the Closing Date, with a non-imputation endorsement and with such endorsements as Buyer and the applicable title company shall have agreed prior to the end of the Due Diligence Period, subject only to the printed conditions and exceptions of such policy and the Permitted Exceptions.  The foregoing notwithstanding, Buyer, at its sole discretion, may elect as to any Property to accept a date down endorsement to the Existing Title Policy for such Property in lieu of a new title insurance policy, but subject to the same requirement that such date down endorsement include non-imputation coverage and show no exceptions other than the Permitted Exceptions.

(f)                                   Conditions under each Related PSA.  The obligation of Seller and BH, on the one hand, and Buyer, on the other hand, to consummate the Closing, shall be contingent upon the satisfaction of all conditions precedent to such party’s obligation to close the transactions under each Related PSA.  It is the intention of the parties that the transactions under this Agreement and each Related PSA shall be closed concurrently.

(g)                                  Performance Conditions.  The obligation of Seller and BH to consummate the Closing shall be contingent upon the following: (i) Buyer’s representations and warranties contained herein shall be true and correct in all material respects as of the date of this Agreement and the Closing Date, except to the extent the inaccuracy of which would not have a Material Adverse Effect, without giving effect to any knowledge based qualifications; (ii) as of the Closing Date, Buyer shall have performed its obligations hereunder that are to be performed on or prior to the Closing Date and all deliveries to be made at or prior to the Closing Date shall have been tendered.  The obligation of Buyer to consummate the Closing shall be contingent upon the following:  (x) Seller’s and BH’s representations and warranties contained herein shall be true and correct in all material respects as of the date of this Agreement and the Closing Date, without giving effect to any knowledge based qualifications or to any Exception Matters pursuant to Section 8.6, (y) as of the Closing Date, except to the extent the inaccuracy of which would not have a Material Adverse Effect, each of Seller and BH shall have performed its respective obligations hereunder that are to be performed on or prior to the Closing Date and all deliveries to be made at or prior to the Closing Date shall have been tendered (other than the failure by Seller or BH to provide or make available any immaterial document or information in accordance with Section 2.2).

(h)                                 Other Mutual Conditions.  The obligation of Seller and BH, on the one hand, and Buyer, on the other hand, to consummate the Closing shall be contingent upon the following:  (i) there shall exist no actions, suits, arbitrations, claims, attachments, proceedings, assignments for the benefit of creditors, insolvency, bankruptcy, reorganization or other proceedings pending against any other party that would materially and adversely affect the operation or value of any Property (or with respect to Buyer’s obligation to close, any of the Companies) or the other party’s ability to perform its obligations under this Agreement; and (ii) all other conditions set forth in this Agreement to the other party’s obligation to close shall have been satisfied or waived in writing by such other party.

(i)                                     Uncured Violations.  As a condition to Buyer’s obligation to close: there shall be no notice issued after the expiration of the Due Diligence Period of any material violation or alleged material violation of any applicable Law, with respect to any Property or any of the Companies, which has not been corrected to the satisfaction of the issuer of the notice.

(j)                                    Failure of Condition.  So long as a party is not in default hereunder beyond any applicable notice and cure periods, if any condition to such party’s obligation to proceed with the Closing set forth in this Agreement has not been satisfied as of the Closing Date (as it may have been extended by Buyer as provided herein), such party may, in its sole discretion, (i) terminate this Agreement in whole by delivering written notice to the other party on or before the Closing Date, or (ii) elect on or before the

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Closing Date to effect the Closing, notwithstanding the non-satisfaction of such condition, in which event such party shall be deemed to have waived any such condition.  Any failure to elect on or before the Closing Date under clauses (i) or (ii) above, shall be deemed an election under clause (i) above. If this Agreement is terminated due to a failure of a condition, which failure was not the result of a default by Buyer hereunder, the ▇▇▇▇▇▇▇ Money shall be returned to Buyer.

4.3                               Seller’s and BH’s Deliveries in Escrow.  At least two (2) Business Days prior to the Closing Date, Seller and BH shall deliver or cause to be delivered in escrow to the Title Company or to Buyer (for release only upon written confirmation of Seller or its Counsel) the following, each duly executed and, where appropriate, in recordable form and notarized:

(a)                                 Assignment of Interest.  Two counterparts of an assignment of the Interests with respect to each Venture in form reasonably satisfactory to Buyer, executed by Seller or the applicable Managing Member (the “Assignment of Interests”);

(b)                                 FIRPTA.  The certification of Seller (the “FIRPTA Certificate”) substantially in the form of Appendix 4.3(b) attached hereto;

(c)                                  Authority.  Evidence of the existence, organization and authority of Seller and of the authority of the persons executing documents on behalf of Seller reasonably satisfactory to Buyer;

(d)                                 Debt Condition Documents.  Such documents and deliveries from or on behalf of Seller, BH or any Title Holder or Affiliate of any of them as may be required by any Lender to satisfy the Debt Conditions; together with a written certification by Seller to Buyer that there is no uncured default under the Loan Documents and that each Title Holder has paid in full all interest and other amounts (including, without limitation, installments of principal and interest and any applicable fees, charges or penalties) which are then due and payable under the Loan Documents to which such Title Holder is a party at or prior to Closing;

(e)                                  Bring-Down Certificate.  A written certification by Seller to Buyer certifying that Seller’s representations and warranties in Article 6 of this Agreement are true and correct in all material respects as of the Closing Date, except as expressly disclosed in such certificate and except to the extent the inaccuracy of which would not have a Material Adverse Effect;

(f)                                   Amended and Restated Venture Agreements.  An amended and restated or new Venture Agreement for each Existing Venture and New Venture (each an “Amended and Restated Venture Agreement” and collectively, the “Amended and Restated Venture Agreements”), in the forms attached hereto as Appendix 4.3(f-1) with respect to Waterford Venture, and Appendix 4.3(f-2) with respect to each other Venture, each duly executed by the applicable Managing Member;

(g)                                  Updated Rent Roll and Schedule of Service Contracts.  For each Property, an updated Rent Roll and updated schedule of Service Contracts, dated not earlier than 10 day prior to the Closing Date; and

(h)                                 Other Deliveries.  Such other documents, certificates and instruments reasonably necessary in order to effectuate the transaction described herein, including without limitation, Title Coverage Deliveries, transfer tax declarations, broker lien waivers, and any other Closing deliveries required to be made by or on behalf of Seller or BH.

4.4                               Buyer’s Deliveries in Escrow.  Except as specified below, at least two (2) Business Days prior to the Closing Date, Buyer shall deliver or cause to be delivered in escrow to the Title

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Company or to Seller (for release only upon written confirmation from Buyer or its counsel) the following, each duly executed and, where appropriate, in recordable form and notarized:

(a)                                 Purchase Price.  The Purchase Price, less the ▇▇▇▇▇▇▇ Money, plus or minus applicable prorations and adjustments as provided herein, deposited by Buyer with the Title Company on the Closing Date in immediate, same-day federal funds wired for credit into the Title Company’s escrow account;

(b)                                 Assignment of Interests.  Two counterparts of each of the Assignment of Interests, executed by Buyer;

(c)                                  Bring-Down Certificate.  A written certification by Buyer to Seller certifying that Buyer’s representations and warranties in Article 6 of this Agreement are true and correct as of the Closing Date, except as expressly disclosed in such certificate;

(d)                                 Amended and Restated Venture Agreements.  The Amended and Restated Venture Agreements executed by Buyer; and

(e)                                  Other Deliveries.  Such other documents, certificates and instruments reasonably necessary in order to effectuate the transactions described herein.

4.5                               Closing Statements.  At least two (2) Business Days prior to the Closing Date, Seller and Buyer shall deposit with the Title Company executed closing statements consistent with this Agreement.

ARTICLE 5.  PRORATIONS; COSTS

5.1                               Prorations.  Buyer and Seller agree to use the proration method set forth on Appendix 5.1 to determine all prorations and adjustments to be made between Buyer and Seller at Closing.

5.2                               Post-Closing Corrections.  Either party shall be entitled to a post-Closing adjustment for any incorrect proration or adjustment, provided such adjustment is claimed by such party within twelve months after Closing.  The provisions of this Section 5.2 shall survive the Closing.

5.3                               Costs; Transfer Taxes.  Buyer shall pay (i) the Title Company’s escrow fee, closing charges and any cancellation fee, (ii) the cost of any date down and other endorsements to the Existing Title Policies or new title policies and endorsements obtained by Buyer, (iii) the costs of any survey updates or new surveys obtained by Buyer, (iv) other costs associated with Buyer’s due diligence activities and (v) any Transfer Taxes due and payable with respect to the conveyance of the Interests.  Seller shall pay the cost of removing any encumbrances on the Interests.  Except as provided in Section 4.2(a), Section 7.1, Section 7.3, Section 8.1, Section 8.3 and Section 9.7 of this Agreement, or in any document or instrument executed pursuant to this Agreement, each party shall be responsible for their own attorneys’ and other professional fees.  Seller and Buyer shall execute any required city, county and state transfer tax or other declarations.

5.4                               Sales Commissions.  Seller and Buyer represent and warrant each to the other that they have not dealt with any real estate broker or sales person in connection with this transaction.  In the event of any claim for broker’s or finder’s fees or commissions in connection with the negotiation, execution or consummation of this Agreement or the transactions contemplated hereby, each party shall indemnify, defend and hold harmless the other party from and against any such claim based upon any actual or

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alleged statement, representation or agreement of the indemnifying party.  This provision shall survive the Closing and any termination of this Agreement.

5.5                               Excluded Obligations and Assets.

(a)                                 Park Crest Fee.  Seller has advised Buyer that, pursuant to that certain Agreement dated as of March 16, 2010, by and between Park Crest Residential Title Holder and ▇▇▇▇▇▇▇ Financial Services, LLC, a Virginia limited liability company (“▇▇▇▇▇▇▇”), a fee is payable to ▇▇▇▇▇▇▇ with respect to a future sale of Park Crest (the “Park Crest Fee”).  Seller, as owner of Park Crest Residential Title Holder, shall retain the obligation to pay the Park Crest Fee, if and when the same is due and payable, and neither Buyer nor any Venture shall have any obligation to pay the Park Crest Fee.  Seller shall indemnify, defend and hold Buyer and the applicable Venture and Title Holder harmless from and against any liability, claim, demand, loss, expense or damage arising out of the failure by Seller to pay the Park Crest Fee in full as and when due.

(b)                                 Excluded NoHo Assets.  The following assets of NoHo Title Holder (“Excluded NoHo Assets”) shall be excluded from the sale hereunder and shall not be taken into account for purposes of prorations under Appendix 5.1:  (i) a prorated portion of the 2011 CRA Payment for the period from July 1, 2011 through and including the day proceeding the Closing Date; and (ii) the tax increment financing receivable having an approximately $400,000 net present value, including all payments of principal and interest thereunder.  For purposes of this Agreement and the applicable Amended and Restated Venture Agreement, the Excluded NoHo Assets shall not be deemed to be assets of NoHo Title Holder or the applicable Venture, shall remain the property of Seller, and shall be distributed to Seller upon receipt.

(c)                                  Survival.  The provisions of this Section 5.5 shall survive Closing indefinitely and shall not be subject to the limitations set forth in Section 6.5 or Article 8.

ARTICLE 6.  REPRESENTATIONS AND WARRANTIES

6.1                               Seller’s Representations and Warranties as to Seller.  As a material inducement to Buyer to execute this Agreement and consummate the Closing, Seller represents and warrants to Buyer that:

(a)                                 Seller has been duly formed or organized as a limited partnership, is validly existing and is in good standing in the State of Delaware, and is authorized to exercise all its powers, rights and privileges.

(b)                                 Seller has the power and authority, under its Charter Documents, to own and operate its assets, to carry on its business as now conducted, and to enter into and perform its obligations under this Agreement.

(c)                                  All partner, member, or other action on the part of Seller and each Managing Member necessary for Seller’s authorization, execution and delivery of this Agreement, and the performance of all obligations of Seller hereunder and the completion of the Closing pursuant hereto has been taken or will be taken prior to the Closing.  This Agreement constitutes a legally binding and valid obligation of Seller, enforceable against Seller in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

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(d)                                 The execution and delivery of this Agreement by Seller and the performance by Seller of its obligations pursuant hereto will not result in any violation of, be in conflict with, or constitute a default under, with or without the passage of time or the giving of notice:  (x) any provision of Seller’s, Managing Members’ or the Companies’ Charter Documents as such documents exist immediately prior to the Closing; (y) any provision of any judgment, decree or order to which Seller, any Managing Members or any Company is a party or by which any of them or their respective properties or assets are bound; or (z) any statute, rule or governmental regulation applicable to Seller, any Managing Member or the Companies, or their respective property or assets.

(e)                                  The execution and delivery of this Agreement by Seller and the performance by Seller of its obligations pursuant hereto will not result in any violation of, be in conflict with, or constitute a default under, with or without the passage of time or the giving of notice any material contract or agreement to which Seller, any Managing Member, or any Company is a party, assuming receipt of the consents referred to in Section 4.2(d) and satisfaction of the Debt Conditions.

(f)                                   The execution, delivery and performance by Seller of this Agreement does not require the consent, approval, clearance, waiver, order or authorization of any Person or Governmental Authority that has not been obtained, except for any required consents of Lenders to be obtained in satisfaction of the Debt Conditions and except for the approval described in Section 4.2(d).

(g)                                  There is no action, suit, proceeding or investigation pending or, to the knowledge of Seller, threatened in writing against Seller that challenges the validity of this Agreement or the right of Seller to enter into this Agreement, or that might result, either individually or in the aggregate, in Seller’s inability to perform its obligations under this Agreement.  There is no material judgment, decree or order of any court, arbitrator, tribunal or governmental or similar authority in effect against Seller, any Managing Member, or any Company, and neither Seller nor any Managing Member nor any Company is in material default with respect to any order or any court, arbitrator, tribunal or governmental or similar authority binding upon Seller, any Managing Member, or any Company or by which any of them or their respective properties or assets are bound, that would prevent Seller from performing it obligations under this Agreement.

(h)                                 Seller is not and is not acting on behalf of (i) an “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), (ii) a “plan” within the meaning of Section 4975 of the Internal Revenue Code of 1986, as amended or (iii) an entity deemed to hold “plan assets” within the meaning of 29 C.F.R. §2510.3-101 of any such employee benefit plan or plans.

(i)                                     Seller is not acting, directly or indirectly for, or on behalf of, any person, group, entity or nation named by any Executive Order (including the September 24, 2001, Executive Order Blocking Properties and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or other banned or blocked person, entity, or nation pursuant to any Law that is enforced or administered by the Office of Foreign Assets Control, and is not engaging in the transactions described herein, directly or indirectly, on behalf of, or instigating or facilitating the transactions described herein, directly or indirectly, on behalf of, any such person, group, entity or nation.

(j)                                    Seller is not insolvent and will not become insolvent by executing or performing its obligations under this Agreement or the documents to be executed in connection herewith.

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6.2                               Seller’s Representations and Warranties as to Interests and Companies.  As a material inducement to Buyer to execute this Agreement and consummate the Closing, Seller represents and warrants to Buyer that:

(a)                                 Each of the Managing Members and Existing Companies is duly formed as a limited partnership or limited liability company, as applicable, is validly existing and is in good standing under the laws of the state of its formation.  At Closing each of the New Companies will be duly formed as a limited liability company, and will be validly existing and in good standing under the laws of the state of its formation.

(b)                                 Each of the Title Holders is qualified to do business in and is in good standing in the state where its Property is located.

(c)                                  Seller is the owner and holder of all of the membership interests in each of the Managing Members, each of Belmar Managing Member and Cyan Managing Member is the owner and holder of a 70% limited liability company membership interest in each of Belmar Venture and Cyan Venture, respectively, and Waterford Managing Member is the owner and holder of a 55% limited liability company membership interest in Waterford Venture, which represents an indirect 95% limited liability company membership interest in Argenta Title Holder and an indirect 55% limited liability company membership interest in its other, respective Title Holders, in each case free and clear of any lien or security interest, subject only to restrictions on transfer imposed under applicable U.S. federal and state securities Laws and the limited liability company agreement of each such Venture; and the applicable Managing Member has not conveyed, transferred, assigned, pledged or hypothecated any interests in its Existing Venture, in whole or in part, or granted any rights, options or rights of first refusal or first offer to purchase any of such interests or any portion thereof (except for the rights of Buyer under this Agreement with respect to the Interests in the Existing Ventures).  Prior to the Restructuring, Seller is the owner and holder of all of the membership interests in each of NOHO Title Holder, the Park Crest Title Holders and Acacia GP, and all of the limited partnership interests in Acacia Title Holder, and Acacia GP is the owner and holder of all of the general partnership interests in Acacia Title Holder, in each case free and clear of any lien or security interest, subject only to restrictions on transfer imposed under applicable U.S. federal and state securities Laws; and Seller has not conveyed, transferred, assigned, pledged or hypothecated any of its interests in the Wholly Owned Entities.  Upon consummation of the Restructuring and at all times thereafter prior to the Closing, Seller will be the owner and holder of all of the membership interests in each New Venture, free and clear of any lien or security interest, subject only to restrictions on transfer imposed under applicable U.S. federal and state securities Laws; and Seller shall not have conveyed, transferred, assigned, pledged or hypothecated any interests in the New Ventures, in whole or in part, or granted any rights, options or rights of first refusal or first offer to purchase any of such interests or any portion thereof (except the rights of Buyer under this Agreement with respect to the Interests in the New Ventures).  Upon consummation of the Restructuring and on the Closing Date, each New Venture will be the owner and holder of all of the membership interests in its respective New REIT Sub and each New REIT Sub will be the owner and holder of all of the interests in the respective Wholly Owned Entities to be contributed to it as contemplated by the Restructuring, in each case free and clear of any lien or security interest, subject only to restrictions on transfer imposed under applicable U.S. federal and state securities Laws; Seller shall not have conveyed, transferred, assigned, pledged or hypothecated any interests in any New Venture, in whole or in part, or granted any rights, options or rights of first refusal or first offer to purchase any of such interests or any portion thereof (except the rights of Buyer under this Agreement with respect to the Interests in the New Ventures); and none of the New Ventures or New REIT Subs shall have conveyed, transferred, assigned, pledged or hypothecated any interests in any of its respective Subsidiaries, in whole or in part, or granted any rights, options or rights of first refusal or first offer to purchase any of such interests or any portion thereof.  The Interests in the Existing Ventures have been duly and validly issued and, except as contemplated by this Agreement or the limited liability

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company agreement of each such Existing Venture, there exists no agreement, arrangement or obligation (actual or contingent) to issue, transfer, redeem, repay or repurchase any such Interest or any portion thereof.  Upon consummation of the Restructuring and as of the Closing, the Interests in the New Ventures will have been duly and validly issued and, except as contemplated by this Agreement or the limited liability company agreement of each such New Venture, there shall exist no agreement, arrangement or obligation (actual or contingent) to issue, transfer, redeem, repay or repurchase any such Interest or any portion thereof.

(d)                                 Other than as provided in the limited liability company agreement of each Venture, there are no options, warrants, stock appreciation rights, calls, pre-emptive rights, subscriptions, contribution rights, convertible securities, or other rights or other agreements or commitments of any character whatsoever which are an obligation of Seller, any Managing Member or any of the Companies to issue, transfer or sell any securities exercisable for, or otherwise evidencing a right to acquire, any interests of any kind in any of the Companies (except the rights of the Buyer under this Agreement).

(e)                                  The organizational charts attached to this Agreement as Exhibits B-1 through B-3 are correct and correctly show each of the Existing Ventures and its respective Subsidiaries and the percentage of the ownership interest of each holder of interests in the Existing Ventures and its respective Subsidiaries immediately prior to the Closing hereunder.  Upon consummation of the Restructuring and as of the Closing, the organizational charts attached to this Agreement as Exhibits B-4 through B-6 will be correct and correctly show each of the New Ventures and their respective Subsidiaries and the percentage of the ownership interest of each holder of interests in the New Ventures and their respective Subsidiaries immediately prior to the Closing hereunder.

(f)                                   Seller has delivered or made available to the Buyer complete and correct copies, as amended to date, of the Charter Documents of each of the Existing Companies and Tax information filings and returns of such entities, including all amendments thereto since the initial formation of such entities.

(g)                                  None of the Existing Companies owns, and upon consummation of the Restructuring, none of the New Companies will own, assets or property, or any interests therein (whether direct or indirect), except the applicable Properties and interests in the other Companies as shown on the Org Charts, or engages or will engage in any business or activity other than in connection with its ownership of the Properties and interests in other Companies.

(h)                                 The information contained in the Recitals to this Agreement is true and correct.

(i)                                     The books and records of each Existing Company required to be kept by Law are current and have been maintained in all material respects in accordance with all applicable Laws on a proper and consistent basis and contain complete and accurate records, in all material respects, of all matters required to be dealt with in such books and records and all such books and records are in the possession and control of the Seller or the Existing Ventures.

(j)                                    The financial statements of the Existing Companies (collectively the “Financial Statements”) provided to Buyer in the Due Diligence Materials are complete and correct in all material respects, have been prepared in accordance with generally accepted accounting principles, consistently applied, present fairly in all material respects the financial position and result of operations of the applicable Companies, at the dates and for the periods to which they relate and show all material liabilities, absolute or contingent, of the Existing Companies; provided, however, that any Financial Statements for periods other than the fiscal year end of the Existing Companies are subject to modification resulting from the absence of footnotes thereto and ordinary course fiscal year-end audit

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adjustments.  Except as set forth in the Financial Statements, the Existing Companies have no liabilities, debts, or other obligations, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business of the Title Holders subsequent to the respective dates of the Financial Statements, (ii) obligations under contracts and commitments incurred in the ordinary course of business of the Title Holders and not required under generally accepted accounting principles to be reflected in the Financial Statements, which, individually and in the aggregate, are immaterial in amount, (iii) obligations under contracts or arrangements described in Appendix 6.2-6.3 (the “Disclosure Schedule”), not including any breach of such contracts or agreements, and (iv) liabilities identified and prorated pursuant to Section 5.1.

(k)                                 The Companies have not had any employees and will not have any employees from the date hereof through the Closing Date.

(l)                                     There is no claim, litigation, arbitration or other proceeding pending or, to the knowledge of Seller, threatened, in writing, against any of the Managing Members or the Companies, except as set forth on the Disclosure Schedule.

(m)                             All books, files and records delivered by or on behalf of Seller to the Buyer, or made available by Seller to Buyer for review, are the complete and unaltered copies, in all material respects, of such books, files and records in Seller’s possession or control.  All books, files and records related to the Companies in the Seller’s possession or control have been, or will be during the Due Diligence Period, delivered or made available to Buyer for review.

(n)                                 Each Existing REIT Sub has an Existing Venture as its managing member and such Venture owns REIT Units. The REIT Units currently constitute 100% of the common membership interests in each Existing REIT Sub.  The Preferred Units currently are the only other outstanding equity interests in each Existing REIT Sub.  Each applicable Existing Venture holds all right, title and interest in and to its REIT Units, free of all Encumbrances, and such Venture’s REIT Units were not issued in violation of the preemptive right of any person or any agreement or laws by which an Existing REIT Sub at the time of issuance was bound.  Upon consummation of the Restructuring and as of Closing, (a) each New REIT Sub has a New Venture as its managing member and such Venture owns REIT Units; (b) the REIT Units in each New REIT Sub constitute 100% of the common membership interests in each New REIT Sub; (c) no Preferred Units are outstanding in any New REIT Sub; and (d) each applicable New Venture holds all right, title and interest in and to its REIT Units, free of all Encumbrances, and such Venture’s REIT Units were not issued in violation of the preemptive right of any person or any agreement or laws by which a New REIT Sub at the time of issuance was bound.

(o)                                 With respect to the following tax matters, to Seller’s knowledge:

A.                                    All Tax or information filings and returns required to be filed by each of the Existing Companies have been properly prepared and duly filed, and, except with respect to appeals of any property tax assessments that are being contested in good faith in the ordinary course of business, all Taxes required to be paid by any of the Existing Companies have been paid in full.  There are no (A) pending audits, actions, proceedings or examinations of any of the Existing Companies or of any of the Tax or information returns of the Existing Companies, as applicable, being conducted by any federal, state, local, or foreign taxing authority, (B) pending or threatened claims or disputes relating to any Taxes allegedly owed by any of the Existing Companies or (C) outstanding agreements or waivers extending the statutory limitations period applicable to the payment of any Taxes by or on behalf of any of the Existing Companies with respect to any filed returns.  The Due Diligence Materials contain true, correct and complete copies, in all material respects, of all tax returns of the Existing Companies since the formation of each, including copies of all Schedules K-1 issued or received by any partnership or limited liability company.

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B.                                    An election has been made to treat each Existing REIT Sub as a REIT for U.S. federal income tax purposes beginning with its first taxable year.  Effective following the Closing Date an election shall be made to treat each New REIT Sub as a REIT for U.S. federal income tax purposes in accordance with Section 3.4(c).

C.                                    No Company other than an Existing REIT Sub has elected, and will not elect prior to the Closing Date, to be classified as a corporation for U.S. federal income tax purposes.

D.                                    Each Existing Venture is currently classified as a partnership for U.S. federal income tax purposes and shall not (I) make an election pursuant to Treasury Regulations Section 301.7701-3(c) to be treated as an entity other than a partnership or (II) make an election pursuant to Section 761(a) of the Code to be excluded from the provisions of subchapter K of the Code.

E.                                     Each Subsidiary other than an Existing REIT Sub is currently classified as an entity disregarded as separate from its owner for U.S. federal income tax purposes.

F.                                      No tax attributes of an Existing REIT Sub are subject to limitations described in Section 382 of the Code, nor will any tax attributes of an Existing REIT Sub be subject to limitations described in Section 382 of the Code as a result of Buyer’s purchase of Interests in the Ventures as contemplated by this Agreement.

G.                                    No REIT Sub directly or indirectly holds any Real Property as a dealer for U.S. federal income tax purposes and no REIT Sub has otherwise undertaken any action which would cause a sale or disposition of such Real Property to be treated as a “prohibited transaction” pursuant to Section 857(b)(6)(B)(iii) of the Code.

H.                                   Each Existing REIT Sub has been organized and has continuously operated in conformity with the requirements for qualification as a REIT under the Code for all taxable periods commencing with the first year that such Existing REIT Sub elected to be classified as a REIT under the Code through and including the Closing Date.

6.3                               Seller’s Representations and Warranties as to the Properties.  As a material inducement to Buyer to execute this Agreement and consummate the Closing, Seller represents and warrants to Buyer that:

(a)                                 The most current Rent Roll for each Property delivered to Buyer as part of the Property Information is the Rent Roll relied upon by Seller in the ordinary course of business.

(b)                                 To Seller’s knowledge, each Title Holder has complied in all material respects with its obligations under each of the Leases in effect with respect to its Property.

(c)                                  The list of Service Contracts included in the Due Diligence Materials is true and correct in all material respects as of the date of its preparation.  Other than the Service Contracts delivered to Buyer as part of the Property Information, there are, to Seller’s knowledge, no other property or asset management contracts or other arrangements, contracts and agreements to which any of the Companies is a party affecting the ownership, repair, maintenance, leasing or operation of the Properties, and the copies of such documents delivered to Buyer are true and correct in all material respects.  To Seller’s knowledge, neither the applicable Title Holder nor any other party to any of the Service Contracts is in default thereunder beyond any applicable notice or cure period.

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(d)                                 There are no pending or, to Seller’s knowledge, threatened in writing (a) eminent domain proceedings for the condemnation of any portion of the Land or (b) litigation against the Title Holder or any of the Companies in respect of any Property which, if decided adversely to the Title Holder or any of the Companies, would have a Material Adverse Effect.

(e)                                  To Seller’s knowledge, and except as set forth on the Disclosure Schedule: (a) all material licenses or permits necessary to operate each Property in material compliance with applicable Laws and otherwise as presently operated are in full force and effect and (b) the Title Holder is in compliance in all material respects with each such license and permit.

(f)                                   Except as set forth on the Disclosure Schedule, no Company has received written notice from any governmental authority or agency having jurisdiction over its Property that the Property or its use is in material violation of any Law that would have a Material Adverse Effect.

(g)                                  To Seller’s knowledge, and except as may be disclosed in the environmental reports made available to Buyer as a part of the Property Information, Hazardous Materials have, during the period of each Title Holder’s ownership of its respective Property, existed or currently exist in, on or under, or have been or are being disposed of or released from, such Property in quantities that exceed reportable concentrations under current applicable Environmental Laws; and, to Seller’s knowledge, no well or ▇▇▇▇▇, underground storage tank or tanks (whether existing or abandoned) exist or have, during the period of each Title Holder’s ownership of its respective Property, existed on or under such Property.

(h)                                 Copies of the Property Information and all documents containing information material to the ownership or operation of the Properties have been delivered to Buyer and are true, correct and complete copies; and Seller is not aware of any material inaccuracy or omission in such information.

(i)                                     The Loan Documents delivered to the Buyer as part of the Property Information include true, accurate and complete copies in all material respects of all of the documents and instruments in effect with respect to the Loans, including all amendments, modifications and supplements thereto.  No material default or breach exists under any Loan Document beyond any applicable cure period, nor does there exist any material default or breach, or any material event or circumstance, which, with the giving of notice or passage of time, or both, would constitute, to Seller’s knowledge, a material default or breach by the Title Holder or any other party under any of the Loan Documents.

(j)                                    Each Title Holder is the owner of its respective Personal Property free and clear of all Encumbrances other than the Permitted Exceptions, and has not previously assigned its rights in and to its Personal Property except for security interests granted as security for the Loans. Except as set forth in the Property Information, the Title Holders do not lease any equipment or other personal property in connection with the ownership or operation of their respective Properties.

(k)                                 All vacant rental units at the Properties are in rent ready condition, except in the case of units which have been vacant for not more than 5 days for such cleaning and other routine maintenance as is customarily performed by each Title Holder in preparing vacated rental units for re-letting in the ordinary course of business consistent with current practices.

(l)                                     Each Property which is subject to Affordable Housing Requirements is in material compliance with such requirements.

(m)                             Except as set forth in the Disclosure Schedule, Seller has not received written notice of any uncured violation of any declaration of covenants, conditions and restrictions, reciprocal easement agreements or similar instrument governing or affecting the use, operation, maintenance, management or

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improvement of all of any portion of any Property (collectively “CCRs”), and to Seller’s knowledge no Title Holder is in material default under, and each Property is in compliance in all material respects with, all applicable CCRs.  Without limiting the foregoing, to Seller’s knowledge, no Title Holder is in default with respect to payment of any material contributions or assessments payable by such Title Holder under any CCRs.

(n)                                 Except for the representations and warranties contained in Section 6.1, Section 6.2 and Section 6.3 (as modified by the Exception Matters, Appendices and Schedules hereto), or any documents delivered to Buyer at Closing in connection with this Agreement (collectively, “Seller’s Reps”), neither Seller nor any other Person  (including, for the avoidance of doubt, any equity holder of Seller) makes any other express or implied representation or warranty in respect of any of the Companies, the Properties or the transactions contemplated hereby, and Seller disclaims all other representations or warranties, whether made by any of the Companies or any of their respective Affiliates, officers, directors, employees, agents or representatives.  Except for Seller’s Reps, Seller hereby disclaims all liability and responsibility for any representation, warranty, projection, forecast, statement, or information made, communicated, or furnished (orally or in writing) to Buyer or its Affiliates or representatives (including any opinion, information, projection or advice that may have been or may be provided to Buyer by any director, officer, employee, agent, consultant or representative of any of the Companies or any of their respective Affiliates).  The disclosure of any matter or item in any schedule hereto shall not be deemed to constitute an acknowledgment that any such matter is required to be disclosed. EXCEPT FOR AND SUBJECT ONLY TO SELLER’S REPS, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, EXPRESS, IMPLIED OR STATUTORY, RELATING TO THE PROPERTIES OR ANY PORTION THEREOF, OR THE CONDITION OF OR MATERIALS RELATING TO THE PROPERTIES, IN WHOLE OR IN PART, OR ANY OTHER MATTER, ALL SUCH REPRESENTATIONS AND WARRANTIES BEING HEREBY EXPRESSLY DISCLAIMED.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AND EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND SUBJECT ONLY TO SELLER’S REPS, BUYER IS PURCHASING THE PROPERTY “AS IS” AND “WITH ALL FAULTS.”  EXCEPT FOR SELLER’S REPS, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES WITH RESPECT TO, AND BUYER IS NOT RELYING ON ANY REPRESENTATIONS WITH RESPECT TO:  (a) environmental matters relating to the Property or any portion thereof, including the presence of any Hazardous Materials on any Property; (b) the presence of mold or other microbial agents in any Property; (c) geological or seismic conditions, including, without limitation, subsidence, subsurface conditions, water table, underground water reservoirs, and limitations regarding the withdrawal of water there from, and faulting; (d) whether or not and the extent to which any Property or any portion thereof is affected by any stream (surface or underground), body of water, flood prone area, flood plain, floodway, or special flood hazard; (e) drainage and soil conditions of any Property; (f) the existence of or availability of any development rights; (g) zoning requirements (including any special use permits) to which any Property or any portion thereof may be subject or the status of compliance with such requirements; (h) the availability of any utilities to any Property or any portion thereof including, without limitation, water, sewage, gas and electricity; (i) usages of any adjoining property; (j) access to any Property or any portion thereof; (k) the value, compliance with specifications, size, location, age, use, merchantability, quality, description, or condition of any Property or any portion thereof, or suitability of any Property or any portion thereof for Buyer’s purposes, or fitness for any use or purpose whatsoever; (l) the compliance of any Property with applicable building codes, fire codes, land use or access laws or ordinances including, without limitation, the Americans with Disabilities Act (and the local equivalent thereof) or any similar Laws, including Environmental Laws; (m) enforceability of any Lease or Contract; (n) whether Seller will continue to own or operate any hospital adjacent to or in proximity to any Property, (o) the square footage or leaseable area of the Improvements and/or the real Property, or (p) the credit-worthiness of any tenant under any of the Leases.  The disclaimer expressed in this Section 6.3(n) shall survive Closing.

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(o)                                 As used herein, “Seller’s knowledge”, “known to Seller” or similar phrases means (i) with respect to the representations and warranties made in Section 6.2(o), the actual knowledge of Behringer Harvard Multifamily Advisors I, LLC, a Texas limited liability company, the advisor to BH, and (ii) with respect to the other representations and warranties in this Agreement, the actual knowledge of the managing member of each Venture and for any Property which is managed by an Affiliate of BH, the actual knowledge of such Affiliate property manager.

6.4                               Buyer’s Representations and Warranties.  As a material inducement to Seller to execute this Agreement and consummate the Closing, Buyer represents and warrants to Seller that:

(a)                                 Buyer has been duly formed or organized as a limited partnership, is validly existing and, as of Closing, will be in good standing in the state of its formation or organization, and is authorized to exercise all of its powers, rights and privileges.

(b)                                 Buyer has the power and authority, under its Charter Documents, to own and operate its properties, to carry on its business as now conducted, and to enter into and perform its obligations under this Agreement.

(c)                                  All action on the part of the Buyer and its partners, owners, members, managers, officers, directors and shareholders necessary for the authorization, execution and delivery of this Agreement, the performance of all obligations of Buyer hereunder and completion of the transactions hereunder, has been taken or will be taken prior to the expiration of the Due Diligence Period.  This Agreement constitutes a legally binding and valid obligation of Buyer enforceable in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

(d)                                 The execution and delivery of this Agreement by Buyer and the performance by Buyer of its obligations pursuant hereto will not result in any violation of, be in conflict with, or constitute a default under, with or without the passage of time or the giving of notice:  (x) any provision of Buyer’s Charter Documents; (y) any provision of any judgment, decree or order to which Buyer is a party or by which it or its property or assets are bound; or (z) any statute, rule or governmental regulation applicable to Buyer or its property or assets.

(e)                                  The execution and delivery of this Agreement by Buyer and the performance by Buyer of its obligations pursuant hereto will not result in any violation of, be in conflict with, or constitute a default under, with or without the passage of time or the giving of notice, any material contract or agreement to which Buyer is a party.

(f)                                   There is no action, suit, proceeding or investigation pending or, to the knowledge of Buyer, threatened in writing against Buyer that challenges the validity of this Agreement or the right of Buyer to enter into this Agreement, or that might result, either individually or in the aggregate, in Buyer’s inability to perform its obligations under this Agreement.  There is no judgment, decree or order of any court, arbitrator, tribunal or governmental or similar authority in effect against Buyer, and the Buyer is not in default with respect to any order of any court, arbitrator, tribunal or governmental or similar authority binding upon Buyer or by which it or its property or assets are bound that would prevent the Buyer from performing its obligations under this Agreement.

(g)                                  Buyer is not acting, directly or indirectly for, or on behalf of, any person, group, entity or nation named by any Executive Order (including the September 24, 2001, Executive Order Blocking

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Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) or the United States Treasury Department as a terrorist, “Specially Designated National and Blocked Person,” or other banned or blocked person, entity, or nation pursuant to any Law that is enforced or administered by the Office of Foreign Assets Control, and is not engaging in the transactions described herein, directly or indirectly, on behalf of, or instigating or facilitating the transactions described herein, directly or indirectly, on behalf of, any such person, group, entity or nation.

(h)                                 Buyer is acquiring the Interests for its own account, for investment purposes only and not with a view to the distribution (as such term is used in Section 2(11) of the Securities Act of 1933, as amended (the “Securities Act”)) thereof.  Buyer understands that the Interests have not been registered under the Securities Act and cannot be sold unless subsequently registered under the Securities Act or an exemption from such registration is available.

6.5                               Survival of Representations and Warranties.  The representations and warranties set forth in this Article 6 are made as of the Effective Date and each of Seller and Buyer shall be deemed to have remade all of their respective representations and warranties as of the Closing Date.  Such representations and warranties shall not be deemed to be merged into or waived by the instruments of Closing, but shall survive the Closing for a period of 12 months (the “Limitation Period”); provided that (a) the representations set forth in Section 6.1(a), (b), (c) and (d), Section 6.2(c), (d), (e) and (n) and Section 6.4(a), (c) and (d)  (the “Title and Authority Warranties”) shall survive the Closing indefinitely and (b) the representations set forth in Section 6.2(o) (the “Tax Warranties”) shall survive the Closing for a period ending sixty (60) days after the expiration of the applicable statute of limitations (including extensions thereof).  Seller and Buyer shall have the right to bring an action for breach of such representations and warranties if they give the other party written notice of the circumstances giving rise to the alleged breach within the survival period specified therefor in this Section 6.5.

ARTICLE 7.  DEFAULT AND REMEDIES

7.1                               Seller’s Default.  If the Closing fails to occur due to the default of Seller and such default is not cured within five (5) days after notice to Seller, then Buyer may, at its sole discretion and as its sole remedies:  (a) terminate this Agreement upon written notice to Seller whereupon the ▇▇▇▇▇▇▇ Money (to the extent deposited with the Escrow Agent) shall be immediately disbursed to Buyer and Buyer shall be entitled to recover from Seller all of its reasonable and documented out of pocket costs and expenses incurred in connection with this Agreement, and Buyer’s investigations of the Interests, Companies and Properties, together with reasonable and documented costs of enforcement and collection, provided that Seller’s liability for costs and expenses under this Section 7.1 shall not exceed $1,000,000.00 or (b) assert and seek specific performance of Seller’s obligations hereunder, it being acknowledged that the Properties and Interests are unique and that monetary damages would not be an adequate remedy.  If Buyer elects to seek specific performance under clause (b), but the remedy of specific performance is not available, Buyer shall be entitled to its remedies under clause (a)  notwithstanding that Buyer first elected to seek its remedies under clause (b).  Buyer hereby acknowledges and agrees that it unconditionally waives all other rights and remedies available at law or in equity for Seller’s pre-Closing breach of its obligations hereunder.

7.2                               Buyer’s Default.  If this transaction fails to close due to the default of Buyer and such default is not cured within five (5) days after notice to Buyer, then Seller’s sole remedy in such event shall be to terminate this Agreement and to retain the ▇▇▇▇▇▇▇ Money as liquidated damages, Seller waiving all other rights or remedies in the event of such default by Buyer.  The parties acknowledge that Seller’s actual damages in the event of a default by Buyer under this Agreement will be difficult to ascertain, and that such liquidated damages represent the parties’ best estimate of such damages.

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7.3                               Other Expenses.  Notwithstanding the respective limitations set forth in Section 7.1 and 7.2, if this Agreement is terminated due to the default of a party, then the defaulting party shall pay any fees due to the Escrow Agent for holding the ▇▇▇▇▇▇▇ Money and any fees due to the Title Company for cancellation of the Title Commitment.

ARTICLE 8.  INDEMNIFICATION AND LIMITATION ON LIABILITY

8.1                               Indemnification.  Subject to Section 8.6, Seller and Buyer shall indemnify, defend and hold the other (the “indemnified party”) harmless from any liability, claim, demand, loss, expense or damage that is: (a) suffered by, or asserted by any third party against the indemnified party arising from any act or omission of the indemnitor, its agents, employees or contractors or otherwise arising out of the ownership or operation of the Interests first arising or occurring prior to the Closing (with respect to Seller as indemnitor) or from and after the Closing (with respect to Buyer as the indemnitor); (b) arising out of the breach or inaccuracy of any of the indemnitor’s representations and warranties set forth herein; or (c) except as provided in Article 7, arising out of any failure by Seller or Buyer to perform any covenant or obligation of Seller or Buyer, as applicable, set out in this Agreement.

8.2                               Limitation on Seller’s Liability.  Notwithstanding any other provision of this Article 8 to the contrary, (a) Seller shall not have any indemnification obligations for claims under Section 8.1 and Section 8.3 unless and until the aggregate amount of such claims exceeds $30,000 (provided that, once the amount of such claims exceeds $30,000, Seller shall pay damages from the first dollar of damages) and (b) in no event shall Seller’s aggregate liability for claims under Section 8.1 and Section 8.3 of this Agreement exceed $500,000; provided, however, that the limitations on liability set forth in this Section 8.2 shall not apply to any loss or liability arising from any breach of any of the Title and Authority Warranties, or to Seller’s obligations with respect to reprorations under Section 5.2, which liability and obligations shall not be credited against the foregoing cap.  Except as provided in Article 7, the provisions of this Article 8 shall be the sole and exclusive remedy of Buyer with respect to matters which are subject to indemnification by Seller under Sections 8.1 and 8.3 of this Agreement, all other remedies with respect to such matters being hereby waived.

8.3                               Tax Indemnification.

(a)                                 From and after the Closing Date, subject to the limitations set forth herein, (i) Seller shall protect, defend, indemnify and hold harmless Buyer and each Company (including, without limitation, each REIT Sub) from any and all Taxes which are imposed on any Company in respect of its income, business, property or operations or for which any Company may otherwise be liable as a result of any inaccuracy or breach of any Tax Warranties; and (ii) Seller shall reimburse Buyer, on an after-tax basis, for all reasonable attorneys’ fees incurred or that may be incurred as a result of any such claims or demands as well as for all losses, verdicts, judgments, settlements, tax liability, interest, costs and other expenses incurred or that may be incurred by Buyer as a result of any matter described in clause (i) above.

(b)                                 Buyer will, as to any Taxes in respect of which Seller has agreed to indemnify Buyer or any Company (including, without limitation, each REIT Sub), promptly inform Seller of, and permit the participation of Seller in, any investigation, audit or other proceeding by or with the Internal Revenue Service or any other taxing authority empowered to administer or enforce such a tax and will not consent to the settlement or final determination in such proceeding without the prior written consent of Seller (which consent will not be unreasonably withheld).

8.4                               Survival.  The provisions of this Article 8 shall survive the Closing; provided that claims under clause (a) or (b) of Section 8.1 shall be subject to the time limitations set forth in Section 6.5.  For the avoidance of doubt, the parties acknowledge that, notwithstanding that claims under clause (a) of

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Section 8.1 may not arise out of a breach or inaccuracy of the indemnitor’s representations or warranties, such claims are subject to the Limitation Period.  Any claim for indemnification under Section 8.1(a) or (b) not made on or prior to the expiration of the Limitation Period set forth in Section 6.5 shall be irrevocably and unconditionally waived and released.

8.5          No Liability for Exception Matters.  As used herein, the term “Exception Matter” shall refer to a matter actually disclosed to Buyer in writing or actually discovered by Buyer before the Closing, that would make a representation or warranty of Seller contained in this Agreement untrue or incorrect, including, without limitation, matters disclosed in writing to Buyer by Seller or by any other person.  If Buyer obtains actual knowledge of any Exception Matter after the date hereof and if Seller, in its sole discretion, does not agree in writing to cure or remedy such Exception Matter, Buyer may, as to any Exception Matter the existence of which would have a Material Adverse Effect (a “Material Exception Matter”), as its sole and exclusive remedy, terminate this Agreement in its entirety and receive a return of the Deposit upon written notice to Seller, as provided below.  Buyer shall promptly notify Seller in writing of any Material Exception Matter of which Buyer obtains actual knowledge before the Closing.  If Buyer obtains actual knowledge of any Material Exception Matter before the Closing, but nonetheless elects to proceed with the Closing of this Agreement, Buyer shall consummate the transaction contemplated herein subject to such Material Exception Matter and Seller shall have no liability with respect to such Material Exception Matter following Closing, notwithstanding any contrary provision, covenant, representation or warranty contained in this Agreement; provided that the foregoing shall not be deemed to waive Seller’s obligation to cure certain matters on or before Closing, or Buyer’s right to offset certain costs against the Purchase Price, as expressly provided elsewhere in this Agreement, including, without limitation, in Section 2.4.  If Buyer elects to terminate this Agreement on the basis of any Material Exception Matter, Buyer shall so notify Seller in writing within five days following Buyer’s discovery of the Material Exception Matter (but in all events prior to Closing).  If Buyer so terminates this Agreement, the ▇▇▇▇▇▇▇ Money shall be returned to Buyer.  Buyer’s failure to timely give such notice shall be deemed a waiver by Buyer of such Material Exception Matter.  Upon any such termination of this Agreement, neither party shall have any further rights or obligations hereunder, other than as set forth herein with respect to rights or obligations which survive termination.  Seller shall have no obligation to cure or remedy any Material Exception Matter, and, subject to Buyer’s right to terminate this Agreement as set forth above, Seller shall have no liability whatsoever to Buyer with respect to any Material Exception Matters.  Notwithstanding the foregoing, the limitation on Buyer’s remedies and Seller’s liabilities set forth in this Section 8.5 in the event of a Material Exception Matter before the Closing shall not apply (i) in the case of an intentional breach by Seller of any of its covenants and obligations under this Agreement or (ii) with respect to any matter which Seller is obligated to cure hereunder on or before Closing or for which Buyer has an express right of offset against the Purchase Price hereunder, including, without limitation, under Section 2.4.

ARTICLE 9.  MISCELLANEOUS

9.1          Parties Bound.  Neither party may assign this Agreement without the prior written consent of the other, and any such prohibited assignment shall be void; provided, however, that Buyer may assign this Agreement without Seller’s consent to an Affiliate or to the client or an Affiliate of the client on whose behalf Buyer has entered into this Agreement but any such assignment shall not relieve Buyer of its obligations hereunder.  Upon Closing, Buyer shall be relieved of its obligations under this Agreement in the event of any such assignment and all actions to be taken by, or documents to be delivered to, Buyer shall be made by or delivered to such assignee.  Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit of the respective legal representatives, successors, permitted assigns, heirs, and devises of the parties.

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9.2          Headings; Entirety; Amendments.  The article and paragraph headings of this Agreement are for convenience only and in no way limit or enlarge the scope or meaning of the language hereof.  All exhibits, schedules and appendices attached to this Agreement are incorporated herein as if fully set forth in this Agreement and shall be deemed to be a part of this Agreement.  This Agreement embodies the entire agreement between the parties and supersedes all prior agreements and understandings relating to the Properties.  This Agreement may be amended or supplemented (except as noted in the preceding sentence) only by an instrument in writing executed by the party against whom enforcement is sought.

9.3          Invalidity and Waiver.  If any portion of this Agreement is held invalid or inoperative, then so far as is reasonable and possible the remainder of this Agreement shall be deemed valid and operative, and, to the greatest extent legally possible, effect shall be given to the intent manifested by the portion held invalid or inoperative.  The failure by either party to enforce against the other any term or provision of this Agreement shall not be deemed to be a waiver of such party’s right to enforce against the other party the same or any other such term or provision in the future.

9.4          Governing Law; Calculation of Time Periods; Time.  This Agreement shall, in all respects, be governed and enforced in accordance with the laws of the state of Delaware.  Unless otherwise specified, in computing any period of time described herein, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included, unless such last day is a Saturday, Sunday or legal holiday for national banks in Chicago, Illinois, in which event the period shall run until the end of the next day which is neither a Saturday, Sunday, or legal holiday.  The last day of any period of time described herein shall be deemed to end at 5:30 p.m. Chicago, Illinois time.  Time is of the essence in the performance of this Agreement.

9.5          No Third Party Beneficiary.  This Agreement is not intended to give or confer any benefits, rights, privileges, claims, actions, or remedies to any person or entity as a third party beneficiary, decree, or otherwise, other than the indemnified parties referenced in Section 2.1 pursuant to and for purposes of Section 2.1, who shall be express third party beneficiaries hereof solely for purposes of Section 2.1 and the exonerated persons referenced in Section 6.3(n) who shall be express third party beneficiaries hereto solely for purposes of Section 6.3(n).

9.6          Confidentiality.  Neither Buyer nor Seller shall make a public announcement or other disclosure of this Agreement or any information related to this Agreement to outside brokers or third parties, before or after the Closing, without the prior written specific consent of the other, which consent may not be unreasonably conditioned, delayed or withheld so long as such public disclosure is otherwise in compliance with this Agreement; provided, however, that without the consent of the other party, a party may make (i) any public disclosure it reasonably believes is required by applicable Law, rule or regulation (in which event such party shall use reasonable efforts to advise the other party prior to the making of such disclosure); (ii) such disclosure as may be reasonably necessary to enforce any provision of this Agreement; (iii) any disclosure to any lender or prospective lender, creditor, officer, employee, agent, current or prospective investor and their advisors, current or prospective financial partner, or Affiliate as necessary to perform its obligations under this Agreement or (iv) any public disclosure that is deemed advisable by such party or its counsel to be disclosed in connection with financial reporting, securities disclosures or other legal, tax or financial requirements or guidelines applicable to such party or any Affiliate thereof, including any disclosures to the Securities and Exchange Commission and any press release required by the Securities and Exchange Commission in connection therewith.

Notwithstanding anything to the contrary set forth herein or in any other agreement to which the parties hereto are parties or by which they are bound, the obligations of confidentiality contained herein and therein, as they relate to the transactions contemplated by this Agreement (the “Transaction”), shall

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not apply to the federal tax structure or federal tax treatment of the Transaction, and each party hereto (and any employee, representative or agent of any party hereto) may disclose to any and all persons, without limitation of any kind, the federal tax structure and federal tax treatment of the Transaction.  The preceding sentence is intended to cause the Transaction to be treated as not having been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor provision) of the Treasury Regulations promulgated under Section 6011 of the Code, and shall be construed in a manner consistent with such purpose.  In addition, each party hereto acknowledges that it has no proprietary or exclusive rights to the federal tax structure of the Transaction or any federal tax matter or federal tax idea related to the Transaction.

9.7          Enforcement Expenses.  Should any party employ attorneys or arbitrators to bring an action or arbitration to enforce any of the provisions hereof, the non-prevailing party in such action or arbitration shall pay the prevailing party all reasonable costs, charges, and expenses, including attorneys’ fees and costs, expended or incurred in connection therewith (not to exceed, in the aggregate, $500,000).  The limitations set forth in Section 8.2 shall not apply with respect to this Section 9.7.

9.8          Notices.  All notices required or permitted hereunder shall be in writing and shall be served on the parties in the manner and at the addresses set forth in Appendix 9.8.

9.9          Construction.  The parties acknowledge that the parties and their counsel have reviewed and revised this Agreement and the documents to be executed on or prior to the Closing Date and agree that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement, the documents to be delivered on or prior to the Closing Date or any exhibits or amendments thereto.

9.10        Execution in Counterparts.  This Agreement may be executed in any number of counterparts, and by each party hereto on separate counterparts, each of which shall be deemed to be an original, and all of such counterparts shall constitute one Agreement.  To facilitate execution of this Agreement, the parties may execute and exchange by telephone facsimile or email counterparts of the signature pages which shall be deemed original signatures for all purposes.

9.11        Further Assurances.  In addition to the acts and deeds recited herein and contemplated to be performed, executed and/or delivered by either party on or prior to the Closing Date, each party agrees to perform, execute and deliver, but without any obligation to incur any additional liability or expense, on or after the Closing any further deliveries and assurances as may be reasonably necessary to consummate the transactions contemplated hereby or to further perfect the conveyance, transfer and assignment of the Interests to Buyer.

9.12        Waiver of Jury Trial; Forum.  TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH PARTY SHALL BRING ANY ACTION AGAINST THE OTHER IN CONNECTION WITH THIS AGREEMENT IN A FEDERAL OR STATE COURT LOCATED IN NEW CASTLE COUNTY, DELAWARE, CONSENTS TO THE JURISDICTION OF SUCH COURTS, AND WAIVES ANY RIGHT TO HAVE ANY PROCEEDING TRANSFERRED FROM SUCH COURTS ON THE GROUND OF IMPROPER VENUE OR INCONVENIENT FORUM.

9.13        Mutual Execution.  Until this Agreement has been duly executed by Buyer, Seller and BH and a fully executed copy has been delivered to each of Buyer, Seller and BH (which may occur by facsimile transmission or e-mail), this Agreement shall not be legally binding against the parties.

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9.14        Cooperation.  Subject to the provisions of this Agreement, the parties agree to cooperate and use Commercially Reasonable Efforts to consummate the transactions contemplated hereby.

9.15        Termination of Related PSA Upon Termination of this Agreement.  Unless otherwise agreed to by Buyer in its sole discretion, if Buyer terminates this Agreement pursuant to any termination right granted to Buyer under this Agreement, such termination shall also be deemed a termination of the Related PSA in whole.  If this Agreement provides that Buyer is entitled to return of the ▇▇▇▇▇▇▇ Money upon such termination (to the extent deposited with the Escrow Agent), each Related Buyer shall also be entitled to a return of its ▇▇▇▇▇▇▇ money under the Related PSA (to the extent deposited with the Escrow Agent).

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Agreement on the day and year written below.

JOINDER

This joinder (this “Joinder”) is attached to and made a part of that certain Membership Interest Purchase and Sale Agreement, dated as of November 29, 2011, by and between Behringer Harvard Master Partnership I LP, a Delaware limited partnership, and Milky Way Partners, L.P., a Delaware limited partnership (the “Agreement”), and all terms capitalized but not defined herein shall have the respective meanings given to them in the Agreement.  The undersigned, BEHRINGER HARVARD MULTIFAMILY REIT I, INC., a Maryland corporation (“BH”), for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, hereby duly executes with proper authority and joins in the execution of the Agreement for the purpose of agreeing to be bound by its obligations and agreements set forth in Section 2.2, Section 2.3, Section 3.1, Section 3.4, Section 4.2(a), Section 4.2(d) and Section 4.3 of the Agreement (the “BH Agreements”).  Buyer shall have the right to proceed directly against BH with respect to the BH Agreements without first making written demand to Seller (and without any obligation to bring suit against the Seller) for the satisfaction of any such obligations.

BH, on behalf of its Affiliate which is the Managing Member of each Venture, hereby consents to the conveyance of the Interests to Buyer, pursuant to the Agreement.

BH acknowledges that the execution of this Joinder is a material inducement and condition to Buyer’s execution of the Agreement.  BH represents and warrants that it has the legal right, power, authority and capacity to execute this Joinder, that such execution does not violate the organizational documents of, or any other material agreement or instrument by which BH is bound, and that this Joinder is binding and enforceable against the undersigned, subject to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights and remedies generally, and subject, as to enforceability, to general principles of equity, including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity).

The provisions of Section 2.2, Section 2.3, Section 3.1, Section 3.4, Section 4.2(a), Section 4.2(d), Section 4.3 and Article 9 of the Agreement are hereby incorporated by reference into this Joinder as if fully set forth herein.  Finally, any notice required or given hereunder shall be sent pursuant to the provisions of Section 9.8 of the Agreement.

Exhibit A

Ventures, Properties and Percentage Interests

*Waterford Venture is the indirect owner of two properties in addition to Argenta, with respect to which Buyer is acquiring additional interests in Waterford Venture pursuant to the Related PA.  However such additional interests are not addressed in this Agreement.

**The Lofts of Park Crest consists of a commercial portion, owned by Park Crest Commercial Title Holder, and a residential portion, owned by Park Crest Residential Title Holder.

Exhibit B-1 to B-6

Org Charts

[SEE ATTACHMENTS]

APPENDIX 1.2

Defined Terms

“2011 CRA Payment” shall have the meaning given to it in Section 2.1.6 of Appendix 5.1.

“Acacia Entities” shall have the meaning given to it in the Recitals to this Agreement.

“Acacia GP” shall have the meaning given to it in the Recitals to this Agreement.

“Acacia Title Holder” shall have the meaning given to it in the Recitals to this Agreement.

“Argenta Title Holder” shall have the meaning given to it in the Recitals to this Agreement.

“Affiliate” shall mean:  (a) an entity that directly or indirectly controls, is controlled by or is under common control with the party in question; or (b) an entity at least a majority of whose economic interest is owned by the party in question; and the term “control” means the power to direct the management of such entity through voting rights, ownership or contractual obligations.

“Affordable Housing Requirements” shall mean any Laws or private covenants, conditions and restrictions which require any residential dwelling units at any Property to be made available as affordable housing units, low income housing units or moderate income housing units or similar designation.

“Agreement’ shall have the meaning given to it in the preamble to this Agreement.

“Amended and Restated Venture Agreement” and “Amended and Restated Venture Agreements” shall each have the respective meaning given to it in Section 4.3(f) hereof.

“Assignment of Interests” shall have the meaning given to it in Section 4.3(a) hereof.

“Belmar Managing Member” shall have the meaning given to it in the Recitals to this Agreement.

“Belmar Title Holder” shall have the meaning given to it in the Recitals to this Agreement.

“Belmar Venture” shall have the meaning given to it in the Recitals to this Agreement.

“BH” shall mean Behringer Harvard Multifamily REIT I, Inc., a Maryland corporation.

“Business Day” “shall mean a day other than a Saturday, Sunday or other day on which commercial banks are authorized or required to close under applicable laws, or are in fact closed, in Chicago, Illinois or Dallas, Texas.

“Buyer” shall have the meaning given to it in the preamble to this Agreement.

“Buyer’s Representative” shall have the meaning given to it in Section 2.1 hereof.

“Charter Documents” shall mean, with respect to any entity, its articles of incorporation, declaration of trust, bylaws, partnership agreement, statement of partnership, certificate of limited partnership, limited liability company agreement, limited liability certificate or articles, or other charter or

Appendix 1.2 - Page 1

governing or organizational documents, and all amendments or supplements to any of the foregoing (but excluding the Amended and Restated Venture Agreements).

“Closing” shall mean the occurrence of the following:  (i) the satisfaction of all conditions precedent set forth herein (or the waiver in writing of such condition by the party entitled to the benefit of such condition) and (ii) the execution and delivery of the other documents and items to be executed and delivered pursuant to Article 4 and the other provisions hereof; and (iii) the consummation of the purchase and sale of the Interests as provided in this Agreement.

“Closing Date” shall mean the date on which the Closing occurs.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

“Commercially Reasonable Efforts” shall mean, whenever there is imposed on any party such standard, that such party shall be required to exert those efforts or diligence only to the extent they are economically feasible, practicable and reasonable under the circumstances and shall not impose upon such party material financial or other burdens or require any party to institute any legal action.

“Companies” shall mean each of the Ventures and each of the Subsidiaries.

“Cyan Managing Member” shall have the meaning given to it in the Recitals to this Agreement.

“Cyan Title Holder” shall have the meaning given to it in the Recitals to this Agreement.

“Cyan Venture” shall have the meaning given to it in the Recitals to this Agreement.

“Debt Conditions” shall have the meaning given to it in Section 4.2(a) hereof.

“Disclosing Party” shall have the meaning given to it in Section 2.2 hereof.

“Disclosure Schedule” shall have the meaning given to it in Section 6.2 hereof.

“Due Diligence Materials” shall mean the Property Information, the Company Information and any other reports, financial statements or written materials delivered or made available to Buyer by or on behalf of Seller prior to the end of the Due Diligence Period.

“Encumber” shall mean to voluntarily or involuntarily create, or permit to suffer the creation of, any Encumbrances.

“Encumbrances” shall mean any and all security interests, pledges, lien, charges, easements, encroachments, claims, purchase options or other encumbrances or restrictions of any kind on title to any asset, including, without limitation, any restriction on the use, transfer, receipt of income or other exercise of any attribute of ownership of such asset (not including applicable Laws).

“Environmental Laws” shall mean, without limitation, the Resource Conservation and Recovery Act and the Comprehensive Environmental Response Compensation and Liability Act and other federal, state, county, municipal and other local laws governing or relating to Hazardous Materials or the environment together with their implementing regulations, ordinances and guidelines.

“ERISA” shall mean Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.

Appendix 1.2 - Page 2

“Escrow Agreement” shall have the meaning given to it in Section 1.4 hereof.

“Exception Matter” shall have the meaning given to it in Section 8.5 hereof.

“Existing Company” and “Existing Companies” shall mean, individually and collectively, the Existing Ventures and their respective Subsidiaries, and the Wholly Owned Entities.

“Existing REIT Sub” and “Existing REIT Subs” shall mean, the Subsidiaries which are 99.9% directly owned by each Existing Venture, as shown on the organizational charts attached to this Agreement as Exhibits B-1 through B-3.

“Existing Title Exceptions” shall mean as to each Existing Title Policy, the exceptions set forth in such Existing Title Policy.

“Existing Title Policies” shall mean the most recent owner’s title insurance policy insuring each Title Holder, copies of which have been or will be delivered to Buyer as part of the Property Information.

“Existing Venture” and “Existing Ventures” shall mean, individually and collectively, Belmar Venture, Cyan Venture and Waterford Venture.

“FIRPTA Certificate” shall have the meaning given to it in Section 4.3(b) hereof.

“Governmental Authority” and “Governmental Authorities” shall mean any governmental authority having jurisdiction over any of the Properties, Buyer, Seller, BH, the Companies or any of their respective Affiliates, including, without limitation, the United States of America, the state, county and municipality where each Property is located, and any court, agency, department, commission, board, bureau, utility district, flood control district, improvement district or similar district, or other instrumentality of any of them.

“Hazardous Materials” shall mean, without limitation, polychlorinated biphenyls, urea formaldehyde, radon gas, lead paint, radioactive matter, asbestos, petroleum products, including crude oil or any fraction thereof, natural gas, natural gas liquids, liquefied natural gas, or synthetic gas usable for fuel (or mixtures of natural gas or such synthetic gas), and any substance, material, waste, pollutant or contaminant listed or defined as hazardous, infectious or toxic under any Environmental Law.

“Improvements” shall mean, as to each Property, all buildings, fixtures, structures, parking areas, landscaping and other improvements located on the applicable Land.

“Intangible Property” shall mean, as to each Property, all right, title and interest of the applicable Title Holder in and to all intangible personal property owned by such Title Holder and now or hereafter used in connection with the operation, ownership, maintenance, management, or occupancy of the applicable Real Property, including, without limitation, any and all trade names and trademarks associated with such Real Property; the plans and specifications for the applicable Improvements, including as-built plans; unexpired warranties, guarantees, indemnities and claims against third parties; contract rights related to the construction, operation, repair, renovation, ownership or management of the Real Property; pending permit or approval applications as well as existing permits, approvals and licenses (to the extent assignable); insurance proceeds and condemnation awards; and books and records relating to the applicable Property.

“Interest” shall mean, (i) as to each Belmar Venture and Cyan Venture, an undivided portion of the applicable Managing Member’s membership interest in such Existing Venture, constituting 15% of

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the aggregate membership interests in such Existing Venture, (ii) as to Waterford Venture,  an undivided portion of the applicable Managing Member’s membership interest in such Existing Venture as to Argenta Title Holder only, constituting 40% of the aggregate membership interests in such Existing Venture with respect to Argenta Title Holder; and (ii) as to each New Venture, 45% of the aggregate membership interests in such New Venture.

“Interests” shall mean a collective reference to the Interest in each Venture.

“Land” shall mean, for each Property, the land owned by the applicable Title Holder, as described in the Existing Title Policy insuring such Title Holder, and all rights, benefits, privileges, easements, tenements, hereditaments, and appurtenances in anywise appertaining to the Land, including any and all mineral rights, development rights, water rights and the like; and all right, title, and interest of such Title Holder in and to all strips and gores and any land lying in the bed of any street, road or alley, open or proposed, adjoining the Land.

“Laws” shall mean all applicable federal, state and local laws, rules, ordinances, regulations and codes, including without limitation, all zoning, building, health and safety, environmental, land use and persons with disabilities requirements.

“Leases” shall mean, as to each Property, all leases, subleases or other occupancy agreements pursuant to which any person has the right to occupy space in the Improvements.

“Limitation Period” shall have the meaning given to it in Section 6.5 hereof.

“Loan” and “Loans” shall mean, individually and collectively as applicable, the mortgage loans encumbering each of the Properties, including any mortgage loan (if any) entered into after the Effective Date and on or prior to the Closing Date.

“Loan Documents” shall mean the documents and instruments evidencing and securing each of the Loans.

“Managing Member” and “Managing Members” shall mean, individually and collectively, the managing member or general partner of each Existing Venture, as shown on the organizational charts attached to this Agreement as Exhibits B-1 through B-3, each of which is indirectly owned and controlled by BH.

“Mandatory Cure Items” shall have the meaning given to it in Section 2.4.

“Material Adverse Effect” shall mean any circumstance, change or effect that (a) is materially adverse to the business, assets, properties, results of operations or financial condition of any Company or Property, individually or in the Aggregate, or (b) materially impedes the ability of the Seller to consummate the transactions contemplated hereby; provided, however, a Material Adverse Effect shall exclude any circumstance, change or effect resulting from any one or more of the following:  (i) any change in the United States or foreign economies or securities or financial markets in general, that does not materially disproportionately affect the business, assets, properties, results of operations or financial condition of the Companies taken as a whole as compared to other similarly situated Persons in the industries in which the Companies operate, (ii) any change that generally affects any industry in which any of the Companies operates, that does not materially disproportionately affect the business, assets, properties, results of operations or financial condition of the Companies taken as a whole as compared to other similarly situated Persons in the industries in which the Companies operate; (iii) any change arising in connection with hostilities, acts of war, sabotage or terrorism or military actions or any escalation or

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material worsening of any such hostilities, acts of war, sabotage or terrorism or military actions existing or underway as of the date hereof; (iv) any action taken by the Buyer or its Affiliates in respect of the transactions contemplated hereby or in respect of any of the Companies; (v) any changes in applicable Laws or accounting rules, which do not materially disproportionately affect the Companies taken as a whole as compared to other similarly situated Persons in the industries in which the Companies operate; or (vi) any effect resulting from the public announcement of this Agreement, compliance with terms of this Agreement or the consummation of the transactions contemplated hereby.

“New Company” and “New Companies” shall mean, individually and collectively, the New Ventures and the New REIT Subs.

“New Loan” shall have the meaning given to it in Section 4.2(a)(E) hereof.

“New REIT Sub” and “New REIT Subs” shall each have the meaning given to it in Section 3.5 hereof.

“New Venture” and “New Ventures” shall each have the meaning given to it in Section 3.5 hereof.

“NOHO Title Holder” shall have the meaning given to it in the Recitals to this Agreement.

“Objections” shall have the meaning given to it in Section 2.4 hereof.

“Objection Notice” shall have the meaning given to it in Section 2.4 hereof.

“Park Crest Commercial Title Holder” shall have the meaning given to it in the Recitals to this Agreement.

“Park Crest Residential Title Holder” shall have the meaning given to it in the Recitals to this Agreement.

“Park Crest Title Holders” shall have the meaning given to it in the Recitals to this Agreement.

“Org Charts” shall mean the organizational charts attached to this Agreement as Exhibits B-1 through B-6.

“Park Crest Fee” shall have the meaning given to it in Section 5.5 hereof.

“▇▇▇▇▇▇▇” shall have the meaning given to it in Section 5.5 hereof.

“Percentage Interest” shall mean as to each Venture, the percentage of the aggregate membership interests of all the members of such Venture of the Interest in such Venture to be purchased by Buyer hereunder.

“Permitted Exceptions” shall mean, the Existing Title Exceptions, any additional exceptions approved or deemed approved by Buyer pursuant to Section 2.4 of this Agreement, documents and instruments securing any Loan, including any New Loan, real estate taxes not yet due and payable and the rights of tenants in possession as tenants only under the Leases without any option to purchase or right of first refusal with respect to the Property.

“Preferred Units” shall mean the preferred limited liability company interests in a REIT Sub.

Appendix 1.2 - Page 5

“Person” shall mean a corporation, partnership, limited liability company, business trust or individual.

“Personal Property” shall mean as to each Real Property, all right, title and interest of the applicable Title Holder in and to all tangible personal property now or hereafter used in connection with the operation, ownership, maintenance, management, or occupancy of such Real Property, including, without limitation, all equipment, machinery, heating, ventilating and air conditioning units, furniture, art work, furnishings, trade fixtures, office equipment and supplies, and, whether stored on or off-site, all tools and maintenance equipment, supplies, and construction and finish materials not yet incorporated in the Improvements but held for repairs and replacements.

“Property” shall mean, for each property identified on Exhibit A, the Real Property, the Leases, the Rents, the Personal Property, and the Intangible Property.

“Properties” shall mean a collective reference to each Property.

“Property Information” shall have the meaning given to it in Section 2.2 hereof.

“Real Property” shall mean, the Land and the Improvements.

“Related Buyer” shall mean the buyer under each Related PSA.

“Related PSA” shall mean that certain Membership Interest Purchase and Sale Agreement of even date herewith between Buyer and Behringer Harvard Master Partnership I LP, a Delaware limited partnership, as seller.

“Related Seller” shall mean the seller under the Related PSA.

“Rent Roll” shall mean the rent roll for each Property delivered to Buyer as part of the Property Information.

“REIT” shall mean a real estate investment trust under Sections 856-860 of the Code.

“REIT Sub” and “REIT Subs” shall mean, individually and collectively, (i) the Existing REIT Subs; and (ii) the New REIT Subs to be formed pursuant to this Agreement as direct subsidiaries of each of the New Ventures, as shown on the organizational charts attached to this Agreement as Exhibits B-3 through B-5.

“REIT Units” shall mean the common limited liability company interests in a REIT Sub.

“Rents” shall mean, for each Property, all income from the applicable Real Property, including without limitation, all fixed or base rent, percentage rent, additional rent or other amounts payable by tenants under Leases with respect to operating expenses, taxes or other charges under the Leases.

“Restructuring” shall mean the actions with respect to ownership of the Wholly Owned Properties contemplated by Section 3.4(c) and Section 3.5.

“Seller” shall have the meaning given to it in the preamble to this Agreement.

“Service Contracts” shall mean, all service contracts and other contracts, agreements or instruments relating to the ownership, use, management or operation of the Properties, including equipment leases or any other lease in which Title Holder is lessee, but excluding the Leases.

Appendix 1.2 - Page 6

“Subsidiary” and “Subsidiaries” shall mean, individually and collectively, (i) each of the limited liability companies owned directly or indirectly by each Existing Venture, as shown on the organizational charts attached to this Agreement as Exhibits B-1 and B-2; and (ii) each of NOHO Title Holder, the Park Crest Title Holders, the Acacia Entities and the New REIT Subs.

“Taxes” shall mean all federal, state, local, foreign, and other taxes, including, without limitation, income taxes, estimated taxes, alternative minimum taxes, excise taxes, sales taxes, use taxes, value-added taxes, gross receipts taxes, bulk sales taxes, transient occupancy taxes, franchise taxes, capital stock taxes, employment and payroll-related taxes, withholding taxes, stamp taxes, Transfer Taxes and property taxes, whether or not measured in whole or in part by net income, and all deficiencies or other additions to taxes, including interest, fines and penalties.

“Tax Warranties” shall have the meaning given to it in Section 6.5 hereof.

“Title and Authority Warranties” shall have the meaning given to it in Section 6.5 hereof.

“Title Company” shall mean Chicago Title Insurance Company (National Division, Dallas, Texas).

“Title Coverage Deliveries” shall have the meaning given to it in Section 2.3 hereof.

“Title Holder” shall mean the respective Subsidiary which is the direct owner of each Property, as shown on the Org Charts.

“Title Policy” shall mean, an ALTA Owner’s Policy (2006) (or other form required by state law) of title insurance, with extended coverage, issued by the Title Company (and such reinsurers or co-insurers as required by Buyer during the Due Diligence Period) as of the date and time of the recording of the Deed, in the amount of the Purchase Price, containing the Endorsements and containing such reinsurance and co-insurance as required by Buyer during the Due Diligence Period, insuring the Title Holder as the owner of fee simple title to the Real Property, subject only to the Permitted Exceptions.

“Transaction” shall have the meaning given to it in Section 9.6 hereof.

“Transfer Taxes” shall mean any and all taxes on the transfer, or deemed transfer, of the any Property as a result of the conveyance of the Interests pursuant to this Agreement payable pursuant to applicable Laws, but if and only to the extent that the conveyance of the applicable Interest pursuant to this Agreement is deemed to constitute a transfer of such Property that is subject to such tax, but not including real estate taxes or income taxes.

“Venture” and “Ventures” shall mean, individually and collectively, each of the Existing Ventures and the New Ventures.

“Venture Agreement” shall mean the limited liability company operating agreement governing each Venture, as amended, supplemented or amended and restated prior to the Effective Date.

“Waterford Managing Member” shall have the meaning given to it in the Recitals to this Agreement.

“Waterford Venture” shall have the meaning given to it in the Recitals to this Agreement.

Appendix 1.2 - Page 7

“Wholly Owned Entities” shall mean NOHO Title Holder, the Park Crest Title Holders and the Acacia Entities.

“Wholly Owned Property” and “Wholly Owned Properties”, shall mean, individually and collectively, the Gallery at NOHO, the Lofts at Park Crest and Acacia.

Appendix 1.2 - Page 8

APPENDIX 1.4

Escrow Agreement

This Escrow Agreement (this “Agreement”) is made as of the        day of                                                 , 20     by and among                                                              (“Seller”),                                                                                          , a                                (“Buyer”) and                                                  (“Escrow Agent”).

R E C I T A L S

A.                                    Seller and Buyer have entered into that certain Membership Interest Purchase and Sale Agreement (the “Purchase Agreement”) dated of even date herewith, with respect to certain membership Interests described therein.

B.                                    All terms capitalized but not defined herein shall have the respective meanings ascribed to them in the Purchase Agreement.

C.                                    Pursuant to the Purchase Agreement, among other things, Buyer has and will make deposits of ▇▇▇▇▇▇▇ Money to be held, invested and disbursed as provided herein.

NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which are hereby acknowledged the parties hereto agree as follows:

1.                                      Recitals.  The recitals set forth above are true and correct and are incorporated herein by reference.

2.                                      Investment and Use of Funds.  If directed by Buyer, the Escrow Agent shall invest the ▇▇▇▇▇▇▇ Money in a money market, U.S. Treasuries or similar investments as directed by Buyer, shall not commingle the ▇▇▇▇▇▇▇ Money with any funds of the Escrow Agent or others except as provided herein, and shall promptly provide Buyer and Seller with confirmation of the investments made.  Escrow Agent agrees to act as “the person responsible for closing” the transaction under the Purchase Agreement within the meaning of Section 6045(a) of the Internal Revenue Code of 1986, as amended, and to file all forms and returns required thereby.

4.                                      Termination.  Escrow Agent shall retain the ▇▇▇▇▇▇▇ Money until it receives written instructions executed by both Seller and Buyer as to the disposition and disbursement of the ▇▇▇▇▇▇▇ Money, or until ordered by final court order, decree or judgment, which is not subject to appeal, to deliver the ▇▇▇▇▇▇▇ Money to a particular party, in which event the ▇▇▇▇▇▇▇ Money shall be delivered in accordance with such notice, instruction, order, decree or judgment.

5.                                      Interpleader.  Seller and Buyer mutually agree that in the event of any controversy regarding the ▇▇▇▇▇▇▇ Money, unless mutual written instructions are received by the Escrow Agent directing the ▇▇▇▇▇▇▇ Money’s disposition, the Escrow Agent shall not take any action, but instead shall await the disposition of any proceeding relating to the ▇▇▇▇▇▇▇ Money or, at the Escrow Agent’s option, the Escrow Agent may interplead all parties and deposit the ▇▇▇▇▇▇▇ Money with a court of competent jurisdiction in which event the Escrow Agent may recover all of its court costs and reasonable attorneys’ fees.  Seller or Buyer, whichever loses in any such interpleader action, shall be solely obligated to pay such costs and fees of the Escrow Agent, as well as the reasonable attorneys’ fees of the prevailing party in accordance with the other provisions of the Purchase and Sale Agreement.

Appendix 1.4 - Page 1

6.                                      Liability of Escrow Agent.  The parties acknowledge that the Escrow Agent is acting solely as a stakeholder at their request and for their convenience, that the Escrow Agent shall not be deemed to be the agent of either of the parties, and that the Escrow Agent shall not be liable to either of the parties for any action or omission on its part taken or made in good faith, and not in disregard of this Agreement, but shall be liable for its willful misconduct and negligent acts and for any loss, cost or expense incurred by Seller or Buyer resulting from the Escrow Agent’s mistake of law respecting the Escrow Agent’s scope or nature of its duties.  Seller and Buyer shall jointly and severally indemnify and hold the Escrow Agent harmless from and against all costs, claims and expenses, including reasonable attorneys’ fees, incurred in connection with the performance of the Escrow Agent’s duties hereunder, except with respect to actions or omissions taken or made by the Escrow Agent in bad faith, in disregard of this Agreement or involving willful misconduct or negligence on the part of the Escrow Agent.  In the event the Escrow Agent is directed to invest the ▇▇▇▇▇▇▇ Money, the Escrow Agent shall not be held responsible for any loss of principal or interest which may be incurred as a result of making the directed investments or redeeming said investments at the direction of the parties hereto.

7.                                      Escrow Fee.  Except as expressly provided herein to the contrary, the escrow fee, if any, charged by the Escrow Agent for holding the ▇▇▇▇▇▇▇ Money or conducting the Closing shall be paid by Buyer.  There shall not be an escrow fee for holding the ▇▇▇▇▇▇▇ Money if the transaction closes and if it fails to close, the escrow fee for holding the ▇▇▇▇▇▇▇ Money shall be $150.00.

8.                                      Commingling.  Subject to Section 2, the Escrow Agent may commingle the ▇▇▇▇▇▇▇ Money with other deposits or with its own funds in the manner provided for in the administration of funds pursuant to applicable law; provided, however, that nothing herein shall diminish the Escrow Agent’s obligation to apply the full amount of the ▇▇▇▇▇▇▇ Money in accordance with the terms of this Agreement.

9.                                      Closing.  At Closing, the Escrow Agent shall fund the ▇▇▇▇▇▇▇ Money into the closing escrow, to be delivered to Seller and applied as a credit against the Purchase Price.

10.                               Execution in Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, and all of such counterparts shall constitute one Agreement.  To facilitate execution of this Agreement, the parties may execute and exchange by telephone facsimile or email counterparts of the signature pages which shall be deemed original signatures for all purposes.

11.                               Governing Law.  This Agreement shall, in all respects, be governed, construed, applied, and enforced in accordance with the law of the state of Texas.

IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement as of the day and year first set forth above.

Appendix 1.4 - Page 2

Appendix 1.4 - Page 3

APPENDIX 2.2(a)

Property Information

The following items, to the extent in Seller’s possession or control (exclusive of any items Seller reasonably determines to be confidential or proprietary:

Appendix 2.2(a) - Page 1

APPENDIX 2.2(b)

Company Information

1.                                      Financial statements of each Existing REIT Sub for each of the prior five years (or since formation, if formed within the prior five years)

2.                                      Tax returns of each Existing REIT Sub for each of the prior five years (or since formation, if formed within the prior five years)

3.                                      Tax returns of each Existing Venture for each of the prior five years (or since formation, if formed within the prior five years)

4.                                      A copy of resolutions and consents of the members, board of directors, board of managers or any advisory committee of the Companies, Seller or BH with respect to any of the Companies, as applicable based on policies in place in the ordinary course of business of Seller or any of its Affiliates.

Appendix 2.2(b) - Page 1

APPENDIX 4.3(b)

FIRPTA Certificate

Section 1445 of the Internal Revenue Code of 1986, as amended, provides that a transferee of a United States real property interest must withhold tax if the transferor is a foreign person.  For U.S. tax purposes (including Section 1445), the owner of a disregarded entity (which has legal to title to a U.S. real property interest under local law) will be the transferor of the property and not the disregarded entity.  To inform the Transferee (hereinafter defined) that withholding of tax is not required upon the disposition of a United States real property interest by                                                             , a                   (the “Transferor”) to                                                                     , a                               (the “Transferee”), the undersigned does hereby certify the following on behalf of the Transferor:

1.                                      The undersigned is the                                      of the Transferor and is familiar with the business of the Transferor;

2.                                      The Transferor is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as all such terms are defined in the Internal Revenue Code of 1986, as amended, and United States Treasury Department Income Tax Regulations in effect as of the date hereof);

3.                                      The Transferor is not a disregarded entity as defined in Section 1.1445-2(b)(2)(iii);

4.                                      The Transferor is a                    duly organized, validly existing and in good standing under the laws of the State of                      ;

5.                                      The Transferor’s United States employer identification number is                    ; and

6.                                      The Transferor’s office address is                                                                     .

The Transferor understands that this certification may be disclosed to the United States Internal Revenue Service by the Transferee and that any false statement contained herein could be punished by fine, imprisonment, or both.

Under penalties of perjury, the undersigned declares that he has examined this certificate, and to the best of the undersigned’s knowledge and belief, it is true, correct and complete.  The undersigned further declares that he has authority to sign this certificate on behalf of the Transferor.

Appendix 2.2(b) - Page 1

This certificate is executed and delivered as of the        day of                            , 20    .

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APPENDIX 4.3(f-1)

FORM OF AMENDED AND RESTATED VENTURE AGREEMENT

FOR WATERFORD VENTURE

Appendix 4.3(f-1) - Page 1

Dated as of                 , 2011

THE INTERESTS (THE “INTERESTS”) OF BEHRINGER HARVARD WATERFORD PLACE VENTURE, LLC HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), THE SECURITIES LAWS OF ANY STATE OR ANY OTHER APPLICABLE U.S. OR NON-U.S. SECURITIES LAWS, IN EACH CASE IN RELIANCE UPON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS.  THE INTERESTS MAY BE ACQUIRED FOR INVESTMENT ONLY, AND NEITHER THE INTERESTS NOR ANY PART THEREOF MAY BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD, ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH (I) THE SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS AND ANY OTHER APPLICABLE SECURITIES LAWS, AND (II) THE TERMS AND CONDITIONS OF THIS LIMITED LIABILITY COMPANY AGREEMENT.  THE INTERESTS WILL NOT BE TRANSFERRED OF RECORD EXCEPT IN COMPLIANCE WITH SUCH LAWS AND THIS LIMITED LIABILITY COMPANY AGREEMENT. THEREFORE, PURCHASERS OF THE INTERESTS WILL BE REQUIRED TO BEAR THE RISK OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

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EXHIBITS

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AMENDED AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

BEHRINGER HARVARD WATERFORD PLACE VENTURE, LLC

THIS AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT of BEHRINGER HARVARD WATERFORD PLACE VENTURE, LLC is made and entered into as of [          ], 2011 by and between Behringer Harvard Waterford Place, LLC (“BH Waterford”), a Delaware limited liability company that is an indirect wholly owned subsidiary of Behringer Harvard Multifamily REIT I, Inc. (“BH Multifamily REIT”), a Maryland corporation, with its principal office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Milky Way Partners, L.P. (“MWP”), a Delaware limited partnership with its principal office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and Behringer Harvard Master Partnership I LP (“BH MP”), a Delaware limited partnership with its principal office at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.

W I T N E S S E T H

WHEREAS, BH Waterford and BH MP formed the Venture for the purpose of jointly owning, operating and managing the real property located at (i) ▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the legal description for which is set forth in Exhibit B-1 hereof and which is known as Argenta (“Argenta”), (ii) ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the legal description for which is set forth in Exhibit B-2 hereof and which is known as Stonegate Village (“Stonegate”), and (iii) ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, the legal description for which is set forth in Exhibit B-3 hereof and which is known as West Village (“West Village”);

WHEREAS, BH Waterford and BH MP entered into a certain Limited Liability Company Agreement of Behringer Harvard Waterford Place Venture, LLC (the “Venture”), dated as of May 29, 2009 (the “Original Agreement”), to establish their respective rights and duties relating to the Venture on the terms provided therein;

WHEREAS, the Original Agreement was amended pursuant to a certain Amendment to Limited Liability Company Agreement of Behringer Harvard Waterford Place Venture, LLC, dated as of April 14, 2011;

WHEREAS, effective as of the date hereof, BH MP and BH Waterford have each transferred certain of their Interests to MWP, on the terms and subject to the conditions of those certain Membership Interest Purchase and Sale Agreements, dated as of [          ], 2011, between BH MP and MWP and BH Waterford and MWP, respectively (the “Purchase Agreements”);

WHEREAS, MWP desires to be admitted to the Venture as a Member and, pursuant to the terms and conditions of the Purchase Agreements, the Manager has agreed to admit MWP as a Member pursuant to Section 8.1 of the Original Agreement; and

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WHEREAS, the Members desire to amend and restate the Original Agreement, as amended, in its entirety as hereinafter set forth.

NOW, THEREFORE, in consideration of the premises and the mutual covenants of the parties hereto, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

Capitalized terms used in this Agreement (including, without limitation, Exhibits, Schedules and amendments) have the meanings set forth below or in the Section of this Agreement referred to below, except as otherwise expressly indicated or limited by the context in which they appear in this Agreement.  All terms defined in this Agreement in the singular have the same meanings when used in the plural and vice versa.  Accounting terms used but not otherwise defined shall have the meanings given to them under U.S. GAAP.  References to Sections, Articles and Exhibits and Schedules refer to the sections and articles of, and the exhibits and schedules to, this Agreement, unless the context requires otherwise.

“Act” means the Limited Liability Company Act of the State of Delaware, Del. Code ▇▇▇. tit. 6, §§ 18-101 et seq., as it may be amended from time to time, and any successor to such statute.

“Advisory Committee” has the meaning ascribed thereto in Section 8.1.

“Affiliate” means, when used with respect to a specified Person, (i) any Person that, directly or indirectly through one or more intermediaries, controls, is controlled by or is under common control with the specified Person or (ii) any Person that is an officer, general partner or trustee of, or serves in a similar capacity with respect to, the specified Person or of which the specified Person serves in a similar capacity.  For this purpose, the term “control” (including, without limitation, the terms “controlling,” “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, which shall conclusively be deemed to exist where one Person directly or indirectly is the beneficial owner of fifty and one-tenths percent (50.1%) or more of any class of voting equity securities or other voting ownership interests of another Person.

“Affiliated Entity” means, with respect to the Manager, an Entity that is an Affiliate of the Manager.  For the avoidance of doubt, an Affiliated Entity does not include any individual that is an Affiliate of the Manager.

“Agreement” means this Amended and Restated Limited Liability Company Agreement, as amended, modified, supplemented or restated from time to time.

“Alternative Offer Price” has the meaning ascribed thereto in Section 9.2(b)(ii).

“Alternative Purchaser” has the meaning ascribed thereto in Section 9.2(e)(ii).

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“Arbitration Notice” has the meaning ascribed thereto in Section 9.2(e)(ii)(1).

“Argenta” has the meaning ascribed thereto in the recitals to this Agreement.

“Authorized Representatives” has the meaning ascribed thereto in Section 8.1.

“Bankruptcy” has the meaning ascribed thereto in Section 11.1(b).

“Bankruptcy Event” has the meaning ascribed thereto in Section 11.1(a).

“Behringer Holdings” means Behringer Harvard Holdings, LLC, a Delaware limited liability company.

“Best Efforts” has the meaning ascribed thereto in Section 2.6(b)(ii).

“BH MP” has the meaning ascribed thereto in the recitals to this Agreement.

“BH Multifamily REIT” has the meaning ascribed thereto in the preamble to this Agreement.

“BH Representative” has the meaning ascribed thereto in Section 8.1.

“BH Waterford” has the meaning ascribed thereto in the preamble to this Agreement.

“Business Day” means a day other than a Saturday, Sunday or other day on which commercial banks in New York City are authorized or required by applicable law to close.

“Buy/Sell Interest” has the meaning ascribed thereto in Section 9.2(a)(ii).

“Buy/Sell Market Price” has the meaning ascribed thereto in Section 9.2(e)(ii)(5).

“Capital Account” has the meaning ascribed thereto in Section 3.6.

“Capital Call” means a call for capital to be contributed to the Venture in accordance with Section 3.3.

“Capital Contribution” means any initial capital contribution made pursuant to the Original Agreement or any capital contribution made by a Member (or its predecessor) to the Venture in accordance with Section 3.3 hereof.

“Cause” means (i) a material breach of this Agreement by the Manager involving fraud; or (ii) the conviction of, or the entry of a guilty plea or plea of no contest with respect to, a felony involving fraud, embezzlement or dishonesty by BH Multifamily REIT or any Affiliate of BH Multifamily REIT.

“Certificate” means the Certificate of Formation of the Venture, as originally filed with the office of the Secretary of State of the State of Delaware on December 3, 2009, as amended, supplemented or otherwise modified from time to time as herein provided or as provided in the Original Agreement.

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“Closing Date” has the meaning ascribed thereto in Section 9.2(d)(ii).

“Code” means the Internal Revenue Code of 1986, as amended from time to time (or any corresponding provisions of succeeding law); any reference to any section of the Code shall include any corresponding provision of succeeding laws. Notwithstanding the foregoing, any change in the Code which causes the Subsidiary REIT not to be a Domestically-Controlled REIT shall not be included in the definition of “Code” hereunder, it being understood that MWP and BH MP will bear the risk of such change; provided that the Manager will use commercially reasonable efforts to minimize the financial impact to MWP and PGGM PRE Fund (indirectly through BH MP) of any such change at the expense of MWP or PGGM PRE Fund, as the case may be; provided further that the same does not adversely affect the Manager’s tax status.

“Consent” means the vote, approval or consent, as the case may be, of a Person to do the act or thing for which the vote, approval or consent is solicited, or the act of voting or granting such approval or consent, as the context may require.

“CPR” means The International Institute for Conflict Prevention and Resolution, an international organization for public and private dispute resolution.

“Defaulting Purchaser” has the meaning ascribed thereto in Section 9.2(d)(i).

“Dispute Notice” has the meaning ascribed thereto in Section 8.3(a).

“Domestic Status Loss” means a disqualification of the Subsidiary REIT as a “domestically-controlled qualified investment entity” within the meaning of Section 897(h)(4)(B) of the Code.

“Domestically-Controlled REIT” means a REIT that is a “domestically-controlled qualified investment entity” for purposes of Section 897(h)(4)(B) of the Code.

“▇▇▇▇▇▇▇ Money Deposit” has the meaning ascribed thereto in Section 9.2(d)(i).

“Entity” means a partnership, corporation, business trust, limited liability company, proprietorship, joint stock company, trust, estate, unincorporated association, joint venture, pension fund, governmental entity, cooperative association or other foreign or domestic entity or enterprise.

“Escrow Agent” has the meaning ascribed thereto in Section 9.2(d)(i).

“Funding Event” has the meaning ascribed thereto in Section 3.4(a).

“Funding Member” has the meaning ascribed thereto in Section 3.4(a).

“Indemnified Person” and “Indemnified Persons” have the meanings ascribed thereto in Section 7.2(a).

“Information” has the meaning ascribed thereto in Section 14.20(a).

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“Interest” means, as to a Member, the ownership interest of such Member in the Venture at any particular time, including the right of such Member to any and all benefits to which such Member may be entitled as provided in this Agreement, together with the obligations of such Member to comply with all the terms and provisions of this Agreement.

“IRS” has the meaning ascribed thereto in Section 3.8.

“Liquidation” means (i) when used with reference to the Venture, the date upon which the Venture ceases to be a going concern, and (ii) when used with reference to any Member, the earlier of (A) the date upon which there is a Liquidation of the Venture or (B) the date upon which such Member’s entire Interest in the Venture is terminated other than by Transfer to a Person other than the Venture.

“Liquidator” has the meaning ascribed thereto in Section 11.3(a).

“Major Decision” has the meaning ascribed thereto in Section 6.3(a).

“Major Dispute” means any disagreement of (i) BH MP and BH Waterford with respect to the Venture, the Subsidiary REIT or Stonegate or (ii) BH Waterford and MWP with respect to the Venture, the Subsidiary REIT, Argenta or West Village, in either case in respect of (A) the establishment of sale objectives and parameters for the applicable Project (it being understood that such parameters shall be consistent with the provisions of this Agreement, including Section 2.6(b)); (B) the sale or other disposition of the applicable Project or any other property owned, directly or indirectly, by the Venture with respect to such Project in excess of $100,000 (it being understood that such sale or other disposition shall be consistent with the provisions of this Agreement, including Section 2.6(b)); (C) incurring, materially restructuring or materially modifying any indebtedness of the Venture, the Subsidiary REIT or the Sub-Sub REIT holding such Project in excess of $100,000 or causing the Venture, the Subsidiary REIT or the Sub-Sub REIT holding such Project to become liable as an endorser, guarantor, surety or otherwise, except as otherwise contemplated under Section 6.3(a)(iii); (D) a mortgage, pledge or hypothecation of the applicable Project to secure indebtedness of the Subsidiary REIT or any Sub-Sub REIT, except as otherwise contemplated under Section 6.3(a)(iv); or (E) selling any additional interests in the Venture, the Subsidiary REIT or the Sub-Sub REIT holding such Project.

“Management Company” means Behringer Harvard Multifamily Management Services, LLC, a Texas limited liability company.

“Manager” means BH Waterford, or any permitted successor or delegee of BH Waterford in accordance with this Agreement, in such Person’s capacity as the manager of the Venture.

“▇▇▇▇ to Market Price” has the meaning ascribed thereto in Section 9.2(e)(ii)(1).

“Member” means MWP, BH MP, BH Waterford, or any permitted successor or assign of any of them that is admitted as a Member in accordance with this Agreement, in such Person’s capacity as a member of the Venture.

“Member Loan” has the meaning ascribed thereto in Section 3.3(a).

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“Member Representatives” has the meaning ascribed thereto in Section 14.20(a).

“MP Representative” has the meaning ascribed thereto in Section 8.1.

“MWP” has the meaning ascribed thereto in the preamble to this Agreement.

“MWP Representative” has the meaning ascribed there in Section 8.1.

“Negotiation Deadline” has the meaning ascribed thereto in Section 9.2(e)(ii)(1).

“Net Cash Flow,” for any period, means all cash receipts to the Venture from any source during such period (other than from Capital Contributions), plus releases from reserves, minus all cash expenditures by the Venture during such period (but only to the extent not made from Capital Contributions), including costs, expenses, fees and additions to reserves determined by the Manager in its sole discretion.

“Non-Funding Member” has the meaning ascribed thereto in Section 3.4(a).

“Non-U.S. Member” means a direct or indirect (through another partnership or limited liability company) Member of the Venture that is not a U.S. Person and for whom the direct or indirect receipt of Real Estate Proceeds would have a material adverse tax consequence on such Member.  For the avoidance of doubt, MWP and PGGM PRE Fund are Non-U.S. Members.

“Offer Price” has the meaning ascribed thereto in Section 9.2(a)(ii).

“Offeree” has the meaning ascribed thereto in Section 9.2(a).

“Offering Notice” has the meaning ascribed thereto in Section 9.2(a).

“Offeror” has the meaning ascribed thereto in Section 9.2(a).

“Operating Expenses” has the meaning ascribed thereto in Section 5.4.

“Option Period” has the meaning ascribed thereto in Section 9.2(b).

“Original Agreement” has the meaning ascribed thereto in the recitals to this Agreement.

“Percentage Interest” means, as to any Member and with respect to any Project, its percentage ownership interest in the Venture with respect to such Project as set forth in Exhibit A, as the same may be amended from time to time.

“Permitted Temporary Investments” means investments in (i) U.S. government and agency obligations with maturities of not more than one (1) year and one (1) day from the date of acquisition, (ii) commercial paper with maturities of not more than six (6) months and one (1) day from the date of acquisition and having a rating assigned to such commercial paper by Standard & Poor’s Ratings Services or ▇▇▇▇▇’▇ Investors Service, Inc. (or, if neither such organization shall rate such commercial paper at such time, by any nationally recognized rating organization in the United States of America) equal to one of the two highest commercial paper ratings assigned by such organization, it being understood that as of the date hereof such ratings

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by Standard and Poor’s Rating Services are “P1” and “P2” and such ratings by ▇▇▇▇▇’▇ Investors Service, Inc. are “A1” and “A2,” (iii) interest bearing deposits in U.S. banks with an unrestricted surplus of at least $250 million, maturing within one (1) year and (iv) money market mutual funds with assets of not less than $500 million, substantially all of which assets are believed by the Manager to consist of items described in the foregoing clause (i), (ii) or (iii).

“Person” means an individual or Entity.

“PGGM PRE Fund” means Stichting Depositary PGGM Private Real Estate Fund, a Dutch foundation, acting in its capacity as depositary of and for the account and risk of PGGM Private Real Estate Fund, a Dutch fund for the joint account of the participants (fonds voor gemene rekening).

“Prime Rate” means the highest prime rate (or base rate) reported in the Money Rates column or section of The Wall Street Journal published on the second Business Day of each month as having been the rate in effect for corporate loans at large United States money center commercial banks (whether or not such rate has actually been charged by any such bank) as of the first Business Day of such month for which such rate is published.  The Prime Rate shall change monthly and shall be effective for the entire calendar month.  If The Wall Street Journal ceases publication of the Prime Rate, the “Prime Rate” shall mean the prime rate (or base rate) announced by JPMorgan Chase & Co., New York, New York or its successors (whether or not such rate has actually been charged by such bank).  If such bank discontinues the practice of announcing the Prime Rate, the “Prime Rate” shall mean the highest rate charged by such bank on short-term, unsecured loans to its most creditworthy large corporate borrowers.

“Prior Operating Plan” has the meaning ascribed thereto in Section 6.2(b).

“Profits” or “Losses” means, for each period taken into account under Article 4, an amount equal to the Venture’s taxable income or taxable loss for such period, determined in accordance with U.S. federal income tax principles, adjusted to the extent the Manager determines that such adjustment is necessary to comply with the requirements of Section 704(b) of the Code.

“Prohibited Member” means any Person who is (i) a “designated national,” “specially designated national,” “specially designated terrorist,” “specially designated global terrorist,” “foreign terrorist organization,” or “blocked person” within the definitions set forth in the regulations of the United States Treasury Department’s Office of Foreign Assets Control; (ii) acting on behalf of, or a Person owned or controlled by, any government against whom the United States maintains economic sanctions or embargoes under the regulations of the United States Treasury Department, including, but not limited to, the “Government of Sudan,” the “Government of Iran” and the “Government of Cuba”; (iii) within the scope of Executive Order 13224—Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism, effective September 24, 2001; (iv) subject to additional restrictions imposed by the following statutes (or regulations and executive orders issued thereunder): the Trading with the Enemy Act, the Iraq Sanctions Act, the National Emergencies Act, the Antiterrorism and Effective Death Penalty Act of 1996, the International Emergency Economic Powers Act, the United Nations Participation Act, the International Security and

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Development Cooperation Act, the Nuclear Proliferation Prevention Act of 1994, the Foreign Narcotics Kingpin Designation Act, the Iran and Libya Sanctions Act of 1996, the Cuban Democracy Act, the Cuban Liberty and Democratic Solidarity Act, and the Foreign Operations, Export Financing, and Related Programs Appropriations Act; (v) designated or blocked, associated or involved in terrorism, subject to restrictions under laws, regulations or executive orders similar to, or any other law, regulation or executive order of similar import as, those set forth above under the preceding clauses (i) through (iv), if and to the extent such laws, regulations or executive orders are in effect; or (vi) as any of the laws, regulations or executive or other orders in the preceding clauses (i) through (v) may be amended, supplemented, adjusted, modified, reviewed or interpreted from time to time.

“Project” means each of Argenta, Stonegate and West Village.

“Project Net Capital” means, for each Member for each Project, the Member’s net capital attributable to such Project.  The Manager, in its reasonable discretion, shall determine each Member’s Project Net Capital attributable to each Project from time to time.  Each Member’s Project Net Capital attributable to each Project shall equal (i) all Capital Contributions of such Member (or its predecessor) that were used to acquire such Project or are otherwise used in connection with such Project; minus (ii) all Net Cash Flow attributable to such Project that has been distributed to such Member (or its predecessor).  For the avoidance of doubt, the Project Net Capital for BH MP in respect of Argenta and West Village is and shall hereafter be zero and the Project Net Capital for MWP in respect of Stonegate is and shall hereafter be zero.

“Purchase Agreements” has the meaning ascribed thereto in the recitals to this Agreement.

“Purchase Price” has the meaning ascribed thereto in Section 9.2(d)(i).

“Purchaser” has the meaning ascribed thereto in Section 9.2(d)(i).

“Purchaser Venture” has the meaning ascribed thereto in Section 9.2(e)(i).

“Qualifying Opinion” means a written opinion of outside, reputable tax counsel licensed to practice law in the United States and acting reasonably.

“Real Estate Proceeds” means proceeds from the direct sale of any Project (as opposed to proceeds from the sale of interests in the Subsidiary REIT or a Sub-Sub REIT).

“REIT” means a real estate investment trust under the Code.

“REIT Disposition Requirement” has the meaning ascribed thereto in Section 2.6(b)(i).

“Seller” has the meaning ascribed thereto in Section 9.2(d)(i).

“Senior Executives” has the meaning ascribed thereto in Section 8.3(a).

“Shares” means the shares of beneficial interests (including, for the avoidance of doubt, membership interests) in the Subsidiary REIT or a Sub-Sub REIT, as applicable.

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“Stonegate” has the meaning ascribed thereto in the recitals to this Agreement.

“Subsequent Operating Plan” has the meaning ascribed thereto in Section 6.2(b).

“Subsidiary REIT” means Behringer Harvard Waterford Place REIT, LLC, a subsidiary of the Venture.

“Substitute Capital” has the meaning ascribed thereto in Section 3.4(c).

“Substituted Purchase Price” has the meaning ascribed thereto in Section 9.2(d)(i).

“Substituted Purchaser” has the meaning ascribed thereto in Section 9.2(d)(i).

“Sub-Sub REIT” means any subsidiary of the Subsidiary REIT that is or is required by this Agreement or the Purchase Agreements to become structured as a REIT under the Code.

“Tax Matters Partner” has the meaning ascribed thereto in Section 6231(a)(7) of the Code.

“Taxes” means all taxes, charges, fees, duties, levies or other assessments, including without limitation, income, gross receipts, net proceeds, ad valorem, turnover, real and personal property (tangible and intangible), sales, use, franchise, excise, value added, stamp, leasing, lease, user, transfer, fuel, excess profits, occupational and interest equalization, windfall profits, severance and employees’ income withholding and Social Security taxes, which are imposed by the United States, or any state, local or foreign government or subdivision or agency thereof, and such term shall include any interest, penalties or additions to tax attributable to such Taxes.

“Tax Return” means any report, return or other information required to be supplied to a taxing authority in connection with Taxes.

“Transfer” means to give, sell, assign, pledge, hypothecate, devise, bequeath or otherwise dispose of, transfer or permit to be transferred, during life or at death.  The term “Transfer,” when used as a noun, means any Transfer transaction.

“U.S. GAAP” means U.S. generally accepted accounting principles at the time in effect.

“U.S. Person” means a “U.S. Person” as such term is defined in Section 7701(a)(30) of the Code.

“Venture” has the meaning ascribed thereto in the recitals to this Agreement.

“Waterford SPE” has the meaning ascribed thereto in Section 13.5(c).

“West Village” has the meaning ascribed thereto in the recitals to this Agreement.

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ARTICLE 2

THE VENTURE

2.1                               Formation of Venture.  The Venture has been formed as a limited liability company pursuant to the provisions of the Act, and the rights and liabilities of the Members shall be as provided in the Act except as herein otherwise expressly provided.

2.2                               Venture Name and Principal Office.  The name of the Venture shall be “Behringer Harvard Waterford Place Venture, LLC” or such other name as the Manager may determine.  The principal place of business and the principal administrative office of the Venture shall be ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.  The Venture may change such office and may have such additional offices as the Manager may determine.

2.3                               Office of and Agent for Service of Process.  The registered office of the Venture in the State of Delaware shall be ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and the Venture’s agent for service of process on the Venture in the State of Delaware shall be Corporation Service Company.  The Venture may change, at any time and from time to time, the location of such registered office and/or such registered agent upon written notice of the change to the Members.

2.4                               Term of the Venture.  The term of the Venture commenced on the date the Certificate was first filed with the Secretary of State of the State of Delaware.  Unless sooner terminated as hereinafter provided or by operation of law, the term of the Venture shall continue until December 31, 2057.

2.5                               Title to Assets.  Record title to all assets acquired by the Venture shall be held in the name of the Venture, and no Member shall have any property interest in such assets.

2.6                               Purpose and Powers.

(a)                                 The Venture has been organized for the object and purpose of investing in each Project through the Subsidiary REIT, owning, managing, supervising and disposing of such investment as provided in this Agreement, sharing the profits and losses therefrom and engaging in such activities necessary, incidental or ancillary thereto and in any other lawful act or activity in furtherance of the foregoing for which limited liability companies may be organized under the Act.  Notwithstanding any other provision of this Agreement, the Venture, and the Manager on behalf of the Venture, may execute, deliver and perform such agreements and documents as the Manager determines are necessary or desirable for the formation, organization and continuation of the Venture.  Any provision herein regarding the purpose and powers of the Venture and the authorization of actions hereunder may be done through the Subsidiary REIT (and any subsidiary thereof).  In furtherance of this purpose, subject to the limitations and restrictions set forth elsewhere in this Agreement, including, without limitation, Section 6.3 hereof, the Venture shall have all powers necessary, suitable or convenient for the accomplishment of the aforesaid purpose, as principal or agent, including, without limitation, all of the powers that may be exercised by the Manager on behalf of and, except as specifically provided herein, at the expense

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of, the Venture pursuant to this Agreement or the Act, and further including, without limitation, the following:

(i)            to organize or cause to be organized the Subsidiary REIT and any subsidiary thereof and to act as manager of the Subsidiary REIT, and to exercise all of the powers, duties, rights and responsibilities associated therewith;

(ii)           to borrow money, encumber assets and otherwise incur recourse and non-recourse indebtedness (including, without limitation, the issuance of guarantees of the payment or performance of obligations by any Person) in connection with or in furtherance of the acquisition or development or the financing or refinancing of any Project;

(iii)          to improve, develop, redevelop, construct, reconstruct, maintain, renovate, rehabilitate, reposition, manage, lease, mortgage and otherwise deal with the assets and/or businesses of the Venture;

(iv)          to lend money on a secured or unsecured basis and, if applicable, in connection therewith take as collateral a mortgage or pledge of any real or personal property and to extend or modify the terms of any such financing;

(v)           to alter or restructure the Venture’s investment in any Project at any time during the term of the Venture without any precondition that the Manager make any distributions to the Members in connection therewith;

(vi)          to make additional investments in any Project (including, without limitation, additional investments made to finance any capital improvements, tenant improvements or other improvements or alterations to any property constituting such Project or otherwise to protect the Venture’s investment in such Project or to provide working capital for such Project);

(vii)         to invest the Venture’s funds in Permitted Temporary Investments;

(viii)        to pay commissions, fees or other charges to Persons that may be applicable in connection with any transactions entered into by or on behalf of the Venture;

(ix)          to open, maintain and close bank accounts and draw checks and other orders for the payment of moneys;

(x)           to engage outside accountants, custodians, appraisers, attorneys, property managers, leasing brokers and any and all other third-party agents and assistants, both professional and nonprofessional, and to compensate them in such reasonable degree and manner as the Manager may deem necessary or advisable;

(xi)          subject to Section 2.6(b), to enter into, make and perform all contracts, agreements and other undertakings as may be necessary or advisable or incidental to carrying out its purpose, including, without limitation, such agreements as the Manager deems necessary or appropriate for the operation, management, financing, sale or other disposition of each Project or as otherwise contemplated by this Agreement;

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(xii)         to ▇▇▇ and be sued, to prosecute, arbitrate, settle or compromise all claims of or against third parties, to compromise, arbitrate, settle or accept judgment with respect to claims of or against the Venture and to execute all documents and make all representations, admissions and waivers in connection therewith;

(xiii)        to make any and all elections and filings for federal, state, local and foreign tax purposes, including, without limitation, any consent dividend on IRS Form 972;

(xiv)        to purchase, and otherwise enter into contracts of, insurance (including, without limitation, property and casualty insurance, terrorism insurance, and liability insurance in respect of any liabilities for which the Venture, the Manager or any other Indemnified Party would otherwise be entitled to indemnification under this Agreement);

(xv)         to enter into and perform the terms of any credit facility as borrower or guarantor and cause the Subsidiary REIT to enter into and perform the terms of any credit facility as borrower, including, without limitation, repaying borrowings under any credit facility on behalf of the Venture;