LIMITED LIABILITY COMPANY AGREEMENT OF BEHRINGER HARVARD ARBORS, LLC DATED DECEMBER 12, 2011

(1) supplies for cleaning, maintenance and operations in commercially reasonable amounts required for use in the ordinary course of business, provided such items are incidental to the use of the Property and are used, stored and disposed of in compliance with all applicable Requirements of Environmental Laws, and (2) gas, oil and other ordinary automotive fluids contained in an ordinary manner in motor vehicles visiting the Property in the ordinary course of business); provided, however, with respect to any environmental matter that, if not timely resolved, would result in a violation of any environmental indemnity or covenant provided by an indemnitor under the Loan Documents or the Company to any lender, tenant or insurance company, or would otherwise result in a violation of law, BH hereby agrees to reply promptly (in no less than ten (10) days) to requests regarding such environmental matters, provided that Managing Member indicates the urgency of such request when providing notice of the Major Decision;

(xxxix)         requiring Additional Capital Contributions in accordance with Section 4.2(a);

(xl)                              making any allocations or distributions other than as provided in Article VI of this Agreement;

(xli)                           establishing of or additions to a pre-approved list of signatories on bank accounts (the initial list of pre-approved signatories is attached hereto as Appendix C); provided, however, either Member shall have the unilateral right to remove and replace any Person designated by such Member and BH shall have the unilateral right to remove and replace any person designated by the Managing Member or Property Manager following an Event of Default under this Agreement or a default under the Property Management Agreement or if the Managing Member is removed as the Managing Member in accordance with the terms of this Agreement, from such pre-approved list of signatories, and upon any such Person’s removal, such Person shall immediately cease to have rights as a signatory on bank accounts;

(xlii)                        selecting title insurance underwriters which the Company may use for any future loans on or sales of the Property;

(xliii)                     any reciprocal easement agreement or similar agreement to be entered into on behalf of the Company;

(xliv)                    selecting outside Company auditors or any appraiser or evaluation expert retained by the Company;

(xlv)                       approving the interim closing of the Company’s books on the permitted Transfer of a Member’s Interest; and;

(xlvi)                    winding up the affairs of the Company after a voluntary or involuntary dissolution.

(b)                                 The Managing Member shall have all of the same powers and, to the extent not inconsistent with terms of this Agreement, duties as a general partner of a limited

36

partnership under the Laws of the State of Delaware, including, without limitation (but subject to the other provisions of this Agreement), the full power and authority to cause the Company to:

(i)                                     acquire, hold, operate, manage, sell, transfer, assign, convey, exchange, lease, sublease, mortgage or otherwise dispose of or deal with all or any part of the Company Property;

(ii)                                  in furtherance of the Company’s purposes and business, borrow money, whether on a secured or unsecured basis, refinance, recast, modify, amend, extend, compromise or otherwise deal with any such loan, and in connection therewith, issue evidences of indebtedness and secure the same by mortgages, deeds of trust, security agreements or other similar documents affecting the assets of the Company;

(iii)                               authorize other persons to execute and deliver such documents on behalf of the Company as the Managing Member may deem necessary or desirable for the Company’s business, including, without limitation, guaranties and indemnities;

(iv)                              perform, or cause to be performed, all of the Company’s obligations under any agreement to which the Company is a party;

(v)                                 enter into contracts on behalf of the Company and make expenditures as are required to operate and manage the Company and the Company Properties; and

(vi)                              do, or cause to be done, any act which is necessary or desirable to carry out any of the purposes of the Company.

(c)                                  Only the Managing Member shall have the right or power to make decisions on behalf of and exercise control over the Company business, affairs or operations; provided, however, that the Managing Member may elect to implement those decisions through any Member it selects in writing, pursuant to the terms hereof, and/or through one or more officers it elects in writing; and provided further that the Managing Member may not, without the Approval of BH, take any action which specifically requires the Approval of BH pursuant to the terms hereof. Except as otherwise provided in this Agreement, BH shall not have the right, absent prior authorization from the Managing Member, to bind the Company by reason of Section 18-402 of the Delaware Act.

(d)                                 Notwithstanding anything in this Agreement to the contrary, the Managing Member shall have no authority to perform any act for, on behalf of or with respect to the Company in violation of any provision of any Management Agreement or other property management or material agreement or loan agreement (or Loan Document) to which the Company is a party, the Transaction Documents and any and all applicable Laws, rules or regulations.

(e)                                  Notwithstanding anything to the contrary contained in this Agreement, all Net Cash Flow. Net Capital Proceeds and cash reserves of the Company shall be deposited into an account in the name of the Company, as set forth in Section 7.2(c)(vi), prior to distribution of

37

all or any portion thereof pursuant to Article VI. The designation of such account pursuant to this Section 7.1(e) shall have no effect on the distributions to be made pursuant to Article VI.

7.2                               Duties of Managing Member.

(a)                                 The Managing Member shall use commercially reasonable efforts to implement the Approved Budget and Approved Operating Plan (including the Initial Approved Budget and Approved Operating Plan) and shall otherwise perform those duties set forth below, and shall have the authority to perform the duties described in this Section 7.2 or as otherwise specifically set forth herein, in each instance subject to the requirement of receiving the prior Approval of BH, if and when required by the terms hereof. Specifically, the Managing Member shall:

(i)                                     conduct the business of the Company on a day-to-day basis, and use diligent efforts to cause such operations to be conducted in accordance with the Approved Budget and the Approved Operating Plan, which duties may be discharged by delegating the same to a property and/or development manager pursuant to the Management Agreements;

(ii)                                  subject to the limitations set forth in this Agreement, enter into contracts and leases for the Company Property on behalf of the Company in accordance with the current Approved Budget and Approved Operating Plan, and make expenditures as are required to implement such Approved Budget and Approved Operating Plan, but only to the extent that any such expenditures and amounts required to be paid by the Company under such contracts, leases and other instruments and documents are consistent with the parameters set forth in the Approved Budget and Approved Operating Plan or otherwise authorized by the terms of this Agreement; and

(iii)                               perform such other duties and obligations as BH and MP shall agree from time to time.

Subject to any right provided to the Managing Member to be reimbursed for Company Expenses pursuant to Section 7.5, and subject further to the fees authorized pursuant to the provisions of Section 7.3, the Managing Member shall not otherwise be entitled to receive any fees or other compensation in respect of any duties or services, and will not receive reimbursement for compensation payable to any of its employees or other direct or indirect overhead which may be attributable to such duties and services.

(b)                                 Notwithstanding anything to the contrary contained in Section 7.1(a)(iii), if at the beginning of any calendar year the Budget and Operating Plan or any item or portion thereof shall not have been Approved by BH, then:

(i)                                     any items or portions of the Budget and Operating Plan and amounts of expenses provided therein which have been so Approved shall become operative immediately and the Managing Member shall be entitled to expend funds in accordance with those operative portions;

38

(ii)                                  with respect to the Budget, the Managing Member shall be entitled to, and shall, expend, in respect of non-capital, recurring expenses in any month of the then-current calendar year, an amount equal to the budgeted amount for the corresponding month of the immediately preceding calendar year, as set forth on the immediately preceding calendar year Approved Budget after giving effect to any dispositions or other material changes to the Company Property during the prior or current year; provided, however, that if any contract Approved by BH or entered into pursuant to the provisions hereof provides for an automatic increase in costs thereunder after the beginning of the then current calendar year, then the Managing Member shall be entitled to expend the amount of such increase; and

(iii)                               the Managing Member shall be entitled to, and shall, expend funds in respect of debt service on the Company’s financing (including the expense of curing any defaults thereunder), utilities, real estate taxes and assessments, insurance and emergency repairs, any annual or other periodic fees, or other expenditures which the Managing Member determines are necessary for the continued ordinary operation of the Company Property, including without limitation uninsured losses or deductibles, operating shortfalls, repairs, additions or modifications to comply with applicable Laws or insurance requirements, insurance premiums for insurance policies Approved by BH, and any final orders, judgments, or other proceedings and all costs and expenses related thereto, regardless of whether the Budget has been approved or whether such expenditures exceed the amounts provided for in the applicable Budget (all of the foregoing described in this clause (iii), collectively, “Necessary Expenses”). Notwithstanding the foregoing, the Managing Member shall not have any obligation to expend funds for Necessary Expenses where there are no Company funds available or already reserved to pay such Necessary Expenses and where BH has not Approved an Additional Capital Contribution therefor.

(iv)                              notwithstanding the above, in the event that Necessary Expenses are due, owing and unpaid, and the Members have not (or will not) made adequate funds available through Additional Capital Contributions, or otherwise, or if the Company has adequate funds to pay Necessary Expenses but BH will not permit the Managing Member to disburse those funds, or for any reason BH cannot or will not make such funds available, the Managing Member is authorized to advance such amounts to the Company as it determines, and such funds shall be treated as either Priority Capital Contribution as provided in Section 4.2(b) or as a regular Capital Contribution in accordance with Section 4.2(d).

(c)                                  Subject to the availability of adequate funds therefor in the Approved Budget and from Operating Revenues, Capital Contributions or other sources, and subject further, in any event, to the provisions of Section 7.1 and any other relevant provisions hereof, in addition to and without limiting any other duties set forth in this Agreement, the Managing Member shall:

(i)                                     oversee, coordinate and process the operations of the Company on a day-to-day basis, including without limitation, the management, servicing, leasing, development, renovation and sale of any and all of the assets which comprise any portion

39

of the Company Property, and prepare all communications with any property manager, any lender and any other relevant third parties;

(ii)                                  take all proper and necessary actions reasonably required to cause the Company and all third parties at all times to perform and comply with the terms and provisions (including without limitation, any provisions requiring the expenditure of funds by the Company) of the Management Agreements, any Loan Documents, the Transaction Documents and any other agreement, mortgage, lease, or other contract, instrument or agreement to which the Company is a party or is bound, or which affects all or any portion of the Company Property or the operation thereof;

(iii)                               pay in a timely manner all non-disputed operating expenses of the Company in accordance with the terms of the Approved Budget and the Approved Operating Plan or as otherwise provided herein;

(iv)                              to the extent available, obtain and maintain insurance coverage on the Company Property as Approved by BH and pay all non-disputed taxes, assessments, charges and fees payable in connection with the ownership, use and occupancy of the Company Property;

(v)                                 deliver to the other Members promptly upon the receipt or sending thereof, copies of all material notices, reports and communications (other than routine, usual and customary notices and other standard communications) between the Company and any lender, manager, governmental agencies, neighboring property owners, community groups and other relevant third parties affecting all or any portion of any Company Property, or any of such other parties, which relates to any existing or pending default thereunder or to any financial or operational information required by such Person;

(vi)                              deposit all receipts from operations of the Company Property to a separate account established and maintained by BH, subject to the terms of the Property Management Agreement in the name of the Company, and not commingle those receipts with any other funds or accounts of the Managing Member or any member of the CH Member Group;

(vii)                           assist in the management and administration of the process of selling and financing all or any portion of the Company Property;

(viii)                        if and to the extent the Managing Member delegates to any loan servicer or property manager (previously Approved by BH) or subcontracts with any third party or Affiliate for the performance of any of the services to be performed by the Managing Member, supervise and oversee the performance of the services performed by such third parties or Affiliates and cause the same to be performed in the manner required hereunder; and

(ix)                              execute and deliver agreements, certificates and similar documents (in the name or on behalf of the Company) which are necessary to obtain and/or maintain any third party loan pursuant to Loan Documents Approved by BH, as well as manage any approved financing or refinancing, on terms Approved by BH.

40

(d)                                 Notwithstanding anything to the contrary contained in this Agreement, BH shall have the absolute right, power and authority at any time upon delivery of written notice to Managing Member and after the occurrence of any (i) For Cause Event (as set forth in Section 7.2(e) below) or (ii) the occurrence of any Event of Default (as set forth in Article XII) to remove CH as the Managing Member and appoint or designate BH or an Affiliate of BH as a replacement Managing Member.

(e)                                  Upon and after the occurrence of any For Cause Event as described in this Section 7.2(e), or any Event of Default with respect to any member of the CH Member Group, in each case subject to any applicable cure rights, BH shall have the right in its sole and absolute discretion to terminate CH as the Managing Member by the delivery of (1) written notice of such termination to Managing Member and (2) to the extent required under this Agreement, obtaining a Carve-Out Release of the Key Principal or delivering or maintain a Carve-Out Indemnity from BH Opp REIT II substantially in the form of the Indemnification Agreement as provided in Section 4.5(c), then (x) BH may cause the Company to terminate any Management Agreement with an Affiliate of CH immediately and without payment of a termination fee, (2) BH may designate a successor Managing Member (which may be itself or an Affiliate of BH), (3) any distributions to the Members under Sections 6.3 and 6.4 shall no longer be made under Sections 6.3 and 6.4 hereof and from that time forward shall be made instead under Section 6.5 hereof, and (4) BH may make a Buy-Sell Offer under Section 15.1 and, notwithstanding anything to the contrary contained in this Agreement, BH shall have the unilateral right and authority to make all decisions on behalf of the Company and cause the Company to take any and all actions which BH, in its sole discretion, may determine. For the purposes of this Agreement, a “For Cause Event” shall mean any of the following:

(i)                                     any actions or omissions on the part of (i) any on-site personnel that are not cured as provided below or (ii) the CH Member Group or any of its representatives (including, without limitation any CH Person), or by any other Person at the explicit direction of any manager of CH or any CH Person which amounts to fraud, willful misconduct or gross negligence; provided, however, that with respect to any fraud, willful misconduct or gross negligence by any on-site personnel not acting at the explicit direction of an CH Person (or at the explicit direction of another Person acting at the explicit direction of a CH Person), CH shall have the right to cure any damage or loss to the Company resulting from an above-described action or omission within a Reasonable Period, which cure may include, but is not limited to, payment by CH to the Company of the amount of any such damage or loss, and upon completion of such cure within a Reasonable Period, it shall be deemed that no For Cause Event has occurred as a result of any such act or omission by any on-site personnel; or

(ii)                                  any Change in Control involving Managing Member or the Property Manager occurs; or

(iii)                               the Managing Member takes any action which, under this Agreement, requires the consent or Approval of BH, without obtaining such consent or Approval (except where BH is required not to withhold such consent or Approval unreasonably, such consent or Approval has been duly requested and BH has either unreasonably withheld it or has failed, within thirty (30) days after such request, to state a

41

reasonable objection to such action in a written notice to the Managing Member). Notwithstanding the forgoing provisions of this Subsection (iii), BH may not declare that a For Cause Event has occurred relating to a failure to obtain BH’s Approval to a Major Decision that is susceptible to cure without first providing Managing Member with written notice of same and allowing Managing Member a 10-day period to cure any monetary default (to the extent a For Cause Event relating to a Major Decision can be cured by the payment of money) and the right to cure any other non-monetary act or omission susceptible of cure) within a Reasonable Period by (A) reversing such action (to the extent such action can be reversed without the Company or BH suffering any damage or liability), or (B) taking such other steps as may be necessary to cure any damage or loss to the Company or BH to the reasonable satisfaction of BH resulting from such unauthorized action or omission within a Reasonable Period. For purposes of the preceding sentence, the inadvertent failure to CH to obtain the consent of BH to the following actions may be susceptible of cure and to the extent any such event does not constitute a monetary default for which the Managing Member has a 10-day cure period, accordingly, CH shall be afforded a Reasonable Period to cure same: the Major Decisions described in Sections 7.1(a)(i)-(viii), 7.1(a)(xiv)-(xxi), 7.1(a)(xxviii), 7.1(a)(xxx), 7.1(a)(xxxviii), 7.1(a)(xlii), and 7.1(a)(xlv)-(xlvi).

(f)                                   CH’s appointment as the Managing Member shall automatically terminate if it (or a Permitted Transferee thereof) is no longer a Member of the Company.

7.3                               Management of the Property; Fees.

(a)                                 Provided that the Property is purchased by the Company on the Closing Date, the Managing Member shall cause the Company to enter into the Property Amendment with the Oversight Manager to add the Property to the Oversight Agreement in the form attached hereto as Appendix A (the “Property Amendment”), and the Property Management Contract in the form Approved by BH, which shall provide for the payment of market standard leasing commissions and management fees in the aggregate amount of 3.50% of the Gross Revenues (as defined therein) under the Management Agreements comprised of (i) 0.50% payable under the Oversight Agreement and (ii) 3.00% payable under the Property Management Contract and subject to the terms set forth therein.

(b)                                 Provided that the Property is purchased by the Company on the Closing Date, the Company will pay Carter-Haston Real Estate Services, Inc an acquisition fee in the amount of 0.50% of the purchase price of the Property and will pay Behringer Harvard Opportunity OP II LP, a Delaware limited partnership (or its designee), an acquisition fee in the amount 0.50% of the purchase price of the Property.

7.4                               Duties and Conflicts.

(a)                                 The Members and their respective officers, employees, and Affiliates shall devote such time to the Company business as they deem to be necessary or desirable in connection with their respective duties and responsibilities hereunder. Except as provided hereunder or as otherwise agreed to in writing by the Members, no Member nor any member,

42

partner, shareholder, officer, director, employee, agent or representative of any Member shall receive any salary or other remuneration for its services rendered pursuant to this Agreement.

(b)                                 Each of the Members recognizes, acknowledges and agrees as follows:

(i)                                     each of the Members and their respective Affiliates, employees, agents, and representatives have or may have in the future other business interests, activities and investments, some of which may be in conflict or competition with the business of the Company, and are entitled to carry on such other business interests, activities and investments;

(ii)                                  each of the Members and their respective Affiliates, employees, agents, and representatives may engage, invest in and/or possess an interest in, independently, with one another, or with others, any business activity of any type or description, including without limitation, those that might be the same as or similar to the business of the Company and that might be in direct or indirect competition with the Company, and including, without limitation, owning, financing, acquiring, leasing, promoting, developing, improving, operating, managing and servicing real property and loans on its own behalf or on behalf of other entities with which any of the Members is affiliated or otherwise;

(iii)                               each of the Members and their respective Affiliates, employees, agents, and representatives may engage in any such activities, whether or not competitive with the Company, without any obligation to offer any interest in such activities to the Company or to the other Members;

(iv)                              neither the Company nor any Member shall have any right, by virtue of this Agreement, in or to such ventures or activities, or the income or profits derived therefrom, and the pursuit of such activities, even if competitive with the business of the Company, shall not be deemed wrongful or improper; and

(v)                                 the obligations and duties of the Members to each other and to the Company shall be limited solely to those arising under the Transaction Documents, and neither the Members nor their respective Affiliates shall be obligated to present any investment opportunity or prospective economic advantage to the Company or the Members, even if the opportunity is of the character that, if presented to the Company or the Members, could be taken by any of them.

(c)                                  Notwithstanding the provisions of Section 7.4(b), until such time as the Company has been dissolved in accordance with Section 11.1, the CH Member Group and its respective Affiliates shall not own or manage or participate in the ownership or management of any competing multifamily apartment project of the same general class and with similar rent parameters as the Property within a three mile radius of the Property that may compete with or be detrimental to the Property, unless such ownership or management has been Approved by BH in its sole discretion. Such Approval rights shall (i) cease to be applicable at such time as either (A) the Company no longer has any ownership interest in the Property, or (B) neither BH nor any

43

Affiliate has any interest in the Company; and (ii) not apply to the existing projects of the CH Member Group and its Affiliates owned or managed on the date of this Agreement

(d)                                 Notwithstanding the preceding provisions of this Section 7.4, no member of the CH Member Group or their Affiliates shall initiate the solicitation of tenants in any building that comprises any part of the Property to move to other buildings owned or managed by any member of the CH Member Group or their Affiliates outside of the Company without the prior written consent of BH. As used herein the term “initiate the solicitation of” shall mean the initiation of contact directly between the CH Member Group or its Affiliates and a tenant regarding a move by such tenant to a property which is not the Property; provided, however, that such term shall in no event apply to (i) responses to requests for proposals submitted by tenants or their brokers, agents or representatives or (ii) new or additional requirements of such tenants or (iii) general advertising. Furthermore, no member of the CH Member Group nor their Affiliates shall actively discourage prospective tenants from leasing available space in a building that comprises all or part of the Property and shall not discriminate against a building that comprises any part of the Property in favor of other properties owned outside the Company in its presentations and communications with potential tenants.

7.5                               Company Expenses.  The Company shall be responsible for paying, and shall pay, all costs and expenses related to the business of the Company and of acquiring, holding, owning, developing, leasing, servicing, collecting upon and operating the Company Property, except for (i) costs of preparing the reports to Members specifically called for by the terms hereof and the Approved Budget and Operating Plan, which shall be the cost of the Managing Member (provided that reasonable third party costs (including audit and legal) incurred in connection with the same shall be at the Company’s expense), (ii) costs to be borne by any third party under any agreement with the Company, and (iii) costs to be borne by any Member or its Affiliates as specifically provided in this Agreement or the Management Agreements. Subject to the preceding sentence and the other provisions of this Agreement, all management fees and expenses payable under Section 7.3, costs of financing and financing fees, fees and disbursements of attorneys, financial advisors, accountants, appraisers, brokers and engineers, travel expenses, and all other fees, costs and expenses directly attributable to the business and operations of the Company shall be borne by the Company. In the event any such costs and expenses are or have been paid by any Member, such Member shall be entitled to be reimbursed for such payment so long as such payment is reasonably necessary for Company business or operations and has been Approved by the other Member or is expressly authorized in this Agreement or the appropriate Approved Budget or Approved Operating Plan (including any permitted variance hereunder).  Notwithstanding the foregoing, in no event shall the Company have any obligation to pay or reimburse any Member or any of their respective Affiliates for any general overhead or similar costs and expenses of such Member or Affiliate.

7.6                               Venture Coordinator.  BH will designate an asset manager for its investment in the Company (the “Venture Coordinator”) who will have primary responsibility for fulfilling BH’s obligations under this Agreement and will be empowered to Approve matters for and on behalf of BH, including with respect to Major Decisions. Such Venture Coordinator shall be designated in writing and may be changed by BH by Notice to CH.

44

7.7                               Enforcement of Affiliate Agreements.  Notwithstanding anything herein or in any other agreement to the contrary, in the event the Company has the right to terminate, amend, modify, extend, renew, waive, consent to or approve any material right or exercise any remedy with regard to any Management Agreement or other agreement between the Managing Member or any Affiliate of the Managing Member, on the one hand, and the Company, on the other hand, then the exercise of any such right on behalf of the Company, including the giving of any notice or approval with regard thereto, will be controlled solely by BH which shall have the right to cause the Company to exercise any rights to vote or influence the actions of the Company in connection therewith, and the Managing Member shall not have the right to exercise any control over the Company’s actions in respect thereof. Any decision made by BH in accordance with the preceding sentence shall be implemented solely by BH.

ARTICLE VIII
BOOKS, RECORDS, REPORTS AND PROPERTY PLAN

8.1                               Books and Records. The Managing Member shall maintain, or cause to be maintained, at the expense of the Company, in a manner customary and consistent with good accounting principles, practices and procedures, a comprehensive system of office records, books and accounts (which records, books and accounts shall be and remain the property of the Company) in which shall be entered fully and accurately each and every financial transaction with respect to the ownership and operation of the Company Property. Bills, receipts and vouchers shall be maintained on file by the Managing Member. The Managing Member shall maintain or cause to be maintained said books and accounts in a safe manner and separate from any records not having to do directly with the Company or any Company Property. At the cost and expense of the Company, the Managing Member shall cause audits to be performed and audited statements and income tax returns to be prepared as required by Section 8.3. Such books and records of account shall be prepared and maintained by the Managing Member at the principal place of business of the Managing Member. Each Member or its duly authorized representative shall have the right to inspect, examine and copy such books and records of account at the Company’s office during reasonable business hours. Additionally, upon request of a Member, all professionals given access to any such books or records shall be directed to provide such books or records to such Member.

8.2                               Accounting and Fiscal Year. The books of the Company shall be kept on the accrual basis in accordance with GAAP and on a tax basis and the Company shall report its operations for tax purposes on the accrual method. The fiscal year and federal income tax year of the Company shall end on December 31 of each year, unless a different tax year shall be required by the Code.

8.3                               Reports.

(a)                                 The Managing Member will prepare, or cause to be prepared, at the expense of the Company, and furnish to each Member the following within the periods set forth below (provided that if the last day for delivery called for below falls on any day that is not a Business Day, the deadline shall be extended to the next Business Day and for so long as it diligently performs its obligations hereunder, the Managing Member shall not be responsible for the delays of any Person that is not an Affiliate of Managing Member or reputable accountants or

45

auditors retained by the Managing Member on behalf of the Company), all of which shall be certified by the Managing Member to the best of the Managing Member’s knowledge as being true and correct:

(i)                                     within ten (10) days after the end of each calendar month of the Company, (A) an unaudited balance sheet of the Company dated as of the end of such calendar month, (B) an unaudited related income statement of the Company for such calendar month, (C) an unaudited statement of each Member’s Capital Account for such calendar month, (D) an unaudited statement of cash flows of the Company for such calendar month, and (E) a reconciliation of actual Operating Expenses and Operating Revenues during such period compared with the Budget amounts for such items, and (F) a monthly explanation of the discrepancies; and

(ii)                                  within ten (10)  days after the end of each calendar month, a status report of the Company’s activities during such calendar month, including summary descriptions of additions to, dispositions of and leasing and occupancy of Company Property and any material legal issues such as claims filed or threatened against the Company, material claims of the Company against other parties and developments in any then pending legal actions affecting the Company during such month.

(b)                                 The Managing Member will prepare, or cause to be prepared, on an accrual basis in accordance with GAAP and on a tax basis, at the expense of the Company, and furnish to each Member no later than January 15 after the end of each fiscal year of the Company the following, all of which shall be certified by the Managing Member to the best of the Managing Member’s knowledge as being true and correct:

(i)                                     an unaudited balance sheet of the Company dated as of the end of such fiscal year;

(ii)                                  an unaudited related income statement of the Company for such fiscal year;

(iii)                               an unaudited statement of each Member’s Capital Account for such fiscal year;

(iv)                              an unaudited statement of cash flows of the Company as of the end of the fiscal year; and

(v)                                 such other supporting schedules, reports and backup information as are reasonably requested by BH.

(c)                                  In addition, if requested by BH, the Managing Member will use its diligent commercially reasonable efforts to cause to be prepared, at the expense of the Company, and furnish to each Member within forty-five (45) calendar days after the end of each fiscal year of the Company, the final audited amount of net income of the Company for such fiscal year and, within sixty (60) calendar days after the end of such taxable year, each of the following, all of which shall be certified by the Managing Member to the best of the Managing Member’s knowledge as being true and correct and all of which shall be certified in the customary manner

46

by the Company Accountant (which firm shall provide such balance sheet, income statement and statement of Capital Account in draft form to the Members for review prior to finalization and certification thereof) (i) an audited balance sheet of the Company dated as of the end of such taxable year; (ii) an audited related income statement of the Company for such taxable year; (iii) an audited statement of cash flows for such taxable year; and (iv) an audited statement of each Member’s Capital Account for such taxable year.

(d)                                 All schedules of book income shall be prepared on a GAAP basis. Promptly after the end of each fiscal year, the Managing Member will cause the Company Accountant to prepare and deliver to each Member a Schedule K-1 and a report setting forth in sufficient detail all such additional information and data with respect to business transactions effected by or involving the Company during the fiscal year as will enable the Company and each Member to timely prepare its federal, state and local income tax returns in accordance with applicable Laws, rules and regulations. The Managing Member will use its diligent commercially reasonable efforts to cause the Company Accountant to prepare all federal, state and local tax returns required of the Company, submit those returns to BH for its approval not later than March 1st of the year following such fiscal year and will file the tax returns after they have been Approved by BH and the Managing Member.

(e)                                  The Managing Member shall prepare, or cause to be prepared, at Company expense, such additional financial reports and other information as BH may determine are appropriate. The Managing Member will furnish to each Member upon request, at the expense of the Company, copies of all reports, statements, notices and other material written information received by the Company or the Managing Member from, or delivered by or on behalf of the Company to, any third party lender. Subject to the provisions of Section 13.14, each Member shall be permitted to deliver to any of its Affiliates, and BH shall be permitted to deliver to any of its direct or indirect members, partners or investors, a copy of any of the reports and statements provided to such Member pursuant to this Section 8.3.

(f)                                   All decisions as to accounting principles shall be made by the Managing Member with the Approval of BH, subject to the provisions of this Agreement.

8.4                               The Company Accountant. The Company shall retain as the regular accountant and auditor for the Company (the “Company Accountant”) any nationally-recognized or regionally-recognized accounting firm designated by the Managing Member and Approved by BH from time to time or any other accountant and auditor Approved by BH. The reasonable fees and expenses of the Company Accountant shall be a Company expense.

8.5                               Reserves. The Managing Member may, in its discretion and subject to the Approval of BH and such conditions as it shall determine, establish reasonable reserves for the purposes and requirements as it may deem appropriate, provided that the Managing Member will in any case, to the extent Company funds are available to do so, establish and maintain reserves from funds of the Partnership to the extent required under the Loan Documents.

8.6                               The Budget and Operating Plan. The Budget and Operating Plan attached hereto as Appendix B is a preliminary estimated Budget for the period through December 31, 2012 and Operating Plan for the Company for the period from the Closing Date through December 31,

47

2012, which include projected costs to operate the Company and make Property improvements and capital expenditures to be set forth therein to be made in the budget period following acquisition of the Property (the “Initial Approved Budget and Operating Plan”), which have been Approved by BH. Thereafter, commencing for the 2013 fiscal year, the Budget and Operating Plan shall be prepared in proposed form and submitted annually by the Managing Member to BH for Approval at least sixty (60) calendar days prior to the end of the current fiscal year (so that the Managing Member will submit a Budget and Operating Plan for the 2013 fiscal year no later than November 1, 2012 to BH for its Approval) with respect to the following fiscal year, together with five (5) year forward projections (provided if the Managing Member should fail to timely prepare and submit in proposed form any such Budget and Operating Plan, BH shall be authorized to prepare such Budget and Operating Plan and submit it to the Managing Member for informational purposes and for use by the Managing Member in carrying out its duties under this Agreement). In formulating the comprehensive Budget and Operating Plan, to the extent reasonably feasible at the time of preparation thereof, the Managing Member will develop (for Approval by BH) proposed strategies regarding (i) plans for renovation, leasing, financing, sale and rehabilitation of the Property and any other real property and proposed reductions to Operating Expenses and other Company costs and expenses and increases in revenues, (ii) preparation and release of all promotional and advertising material relating to, and a marketing plan for, the Company Property or concerning the Company, (iii) terms for any proposed sale or disposition of any Company Property, or acquisition of additional Company Property, and (iv) selection of legal counsel, accountants, appraisers and other consultants for the Company to efficiently implement the Approved Budget and Operating Plan. The Managing Member will also consider and make recommendations to the extent it deems the same appropriate regarding the financing, amendment, modification, alteration, change, cancellation, or prepayment of any indebtedness evidenced by any loan presently or hereafter affecting any Company Property, and procurement of title insurance and other insurance for the Company, or decrease or vary the insurance carried by or on behalf of the Company and any other matters affecting the Company’s business. BH and the Managing Member may from time to time review the Approved Budget and Operating Plan and make such amendments or modifications thereto as they shall jointly determine to be appropriate or necessary.

8.7                               Accounts. All funds of the Company shall be deposited in such checking accounts, savings accounts, time deposits, or certificates of deposit in the name of the Company or shall otherwise be invested in the name of the Company, in such manner as shall be jointly Approved by the Managing Member and BH. Company funds shall not be commingled with those of any other person or entity. Company funds shall be used only for the business of the Company.

8.8                               REIT Matters. Within fifteen (15) days following the end of each calendar quarter, the Company shall provide to BH all tax information requested by BH and necessary for BH (or its REIT affiliates including Behringer Harvard Opportunity REIT II, Inc,, a Maryland corporation) to comply with the REIT requirements under Sections 856 and 857 of the Code (provided that BH has advised CH of what tax information is necessary to accomplish such compliance). Notwithstanding anything to the contrary in this Agreement, neither the Company nor any Member (acting on the Company’s behalf) shall take any action which would cause BH (or its REIT affiliates) to (a) fail to qualify as a “real estate investment trust” (as defined under Sections 856 & 857 of the Code) or (b) incur any additional taxes under Section 857 or

48

Section 4981 of the Code (or any successor provisions). In particular, the Company shall conduct its business affairs in a manner so as to avoid incurring income that would not qualify under Sections 856(c)(2) and 856(c)(3) of the Code and will not acquire assets that are not described in Section 856(c)(4) of the Code unless approved by BH. The Members shall periodically consult with each other (or their designee) to ensure that any prospective transaction undertaken by the Company, or a Member acting on behalf of the Company, shall not cause BH (or its REIT affiliates) to fail to qualify as a REIT. If the Members disagree as to whether any transaction will cause BH (or its REIT affiliates) to fail to qualify as a REIT (as defined under Sections 856 and 857 of the Code) or incur any additional taxes under Section 857 or Section 4981 of the Code (or any successor provisions), the determination of BH shall be final.

ARTICLE IX
TRANSFER OF INTERESTS

9.1                               No Transfer. Except as expressly permitted or contemplated by this Agreement (including pursuant to Sections 9.2 below, and pursuant to Article XV), no Member may sell, assign, give, hypothecate, pledge, encumber or otherwise transfer (“Transfer”) all or any portion of its Interest, whether directly or indirectly, without the Approval of the other Members. Any Transfer in contravention of this Article IX shall be null and void. In no event shall any Member transfer all or any part of its Interest to any Person if, as a result of such Transfer, a Prohibited Person would be the direct, indirect, or beneficial owner of all or a portion of such Interest. No Member, without the prior Approval of the other Members, shall resign from the Company except as permitted by this Article IX. Nothing in this Article IX is meant to or will be interpreted to restrict in any way the ability of any equity holder in Behringer Harvard Opportunity REIT II, Inc. BHO II, Inc., BHO Business Trust II or Behringer Harvard Opportunity OP II, LP and/or their constituent owners from transferring securities issued by such entities.

9.2                               Permitted Transfers.

(a)                                 Notwithstanding anything to the contrary contained in this Agreement but subject to the terms of the Loan Documents, BH and the CH Member Group may from time to time without the consent or Approval of BH or the CH Member Group, as applicable, Transfer (directly or indirectly) all or any portion of its direct or indirect interest in the Company to any Affiliate other than a Prohibited Person; provided, however, that any such Transfer (either individually or when aggregated with any other prior Transfer by such Member or CH Member Group under this Section 9.2(a)) shall not result in a Change in Control.

(b)                                 Notwithstanding anything to the contrary contained in this Agreement but subject to the terms of the Loan Documents, any Member, its constituents and/or the direct or indirect individual holders of any interest in the Company may Transfer (directly or indirectly) all or any portion of its direct or indirect interest in the Company to any Person (other than a Prohibited Person) for estate planning purposes or to a trust for the benefit of the immediate family members of the ultimate direct or indirect individual holders of an interest in such Member on the date of this Agreement; provided, however, that, any such Transfer (either individually or when aggregated with any other prior Transfers by such Member or CH Member Group under this Section 9.2(b)) shall not result in a Change in Control.

49

(c)           A transferee under Sections 9.2(a) or Section 9.2(b) in which the Transfer otherwise complies with all of the requirements of this Article IX is a “Permitted Transferee.” Any permitted Transfer under Sections 9.2(a) and 9.2(b) above shall not relieve the transferor of any of its obligations prior to such Transfer. The parties hereto agree to amend the transfer provisions of Article IX if any Member reasonably determines that such amendment is necessary for the Company to be treated as a partnership for federal and state income tax purposes. Nothing contained in this Article IX shall prohibit a Transfer indirectly of any Interest in the Company if a direct Transfer would otherwise be permitted under this Section 9.2. Subject to Section 9.3, any Permitted Transferee pursuant to this Section 9.2 shall become a Member of the Company. The provisions of this Section 9.2 will not apply to or be deemed to authorize or permit any collateral transfer of, or grant of a security interest in, a Member’s Interest in the Company, or in Company Property (which transfer or grant shall be subject to the other provisions of this Agreement).

(d)           Notwithstanding the foregoing, if the Company is required by applicable Law to recognize a Transfer that is not a permitted Transfer (an “Unapproved Transfer”) (or if the Managing Member and the non-transferring Member(s), in its (or their) sole discretion, shall elect to recognize but not Approve a Transfer that is not a permitted Transfer), the Interest Transferred shall be strictly limited to the transferor’s rights to allocations and distributions as provided by this Agreement with respect to the transferred Interest, which allocations and distributions may be applied (without limiting any other legal or equitable rights of the Company) to satisfy any debts, obligations, or liabilities for damages that the transferor or transferee of such Interest may have to the Company or any other Member prior to any other allocations or distributions relating to the Unapproved Transfer. In the case of a Transfer or attempted Transfer of an Interest that is not a permitted Transfer, the parties engaging or attempting to engage in such Transfer shall be liable to indemnify and hold harmless the Company and the other Members from all cost, liability and damage that any of such indemnified Persons may incur (including, without limitation, incremental tax liability and lawyers’ fees and expenses) as a result of such Transfer or attempted Transfer and efforts to enforce the indemnity granted hereby. A Person who acquires an Interest in an Unapproved Transfer as provided in this Section 9.2(d) but who is not admitted as a substituted Member shall be entitled only to allocations and distributions with respect to such Interest in accordance with this Agreement, and shall have no right to any information or accounting of the affairs of the Company, shall not be entitled to inspect the books or records of the Company, and shall not have any of the rights of a Member under the Act or this Agreement, including any voting rights; provided, however, that no rights, including but not limited to rights to distributions, shall be transferred or permitted with respect to any Interest if a Prohibited Person would be the direct, indirect or beneficial owner of all or any portion of such rights.

(e)           Notwithstanding the foregoing provisions of this Article IX, to the extent any transfer is prohibited or requires the Lender’s consent under the Loan Documents, no transfer shall be permitted until such lender’s consent is obtained and any transfer must be done in accordance with any applicable lender’s consent or approval and the requirements of the Loan Documents. Any transfer prohibited under the Loan Documents which is not consented to as provided above shall be null and void. To the extent that any fees or expenses are incurred in connection with a lender’s consent or approval, including a transfer fee and lender’s legal fees, the party requesting such consent in connection with its proposed transfer shall be responsible for

50

payment of all such fees and expenses, the payment thereof being a condition precedent to any such transfer

9.3          Transferees. Notwithstanding anything to the contrary contained in this Agreement, no transferee of all or any portion of any Interest shall be admitted as a Member unless (a) such Interest is transferred in compliance with the applicable provisions of this Agreement, (b) such transferee shall have furnished evidence of satisfaction of the requirements of Section 9.2 reasonably satisfactory to a Majority-In-Interest of the remaining Members, and (c) such transferee shall have executed and delivered to the Company such instruments as a Majority-In-Interest of the remaining Members reasonably deem necessary or desirable to effectuate the admission of such transferee as a Member and to confirm the agreement of such transferee to be bound by all of the terms and provisions of this Agreement with respect to such Interest. At the request of a Majority-In-Interest of the remaining Members, each such transferee shall also cause to be delivered to the Company, at the transferee’s sole cost and expense, a favorable opinion of legal counsel, to the effect that (i) such transferee has the legal right, power and capacity to own the Interest proposed to be transferred, (ii) if applicable, such Transfer does not violate any provision of any loan commitment or any mortgage, deed of trust or other security instrument encumbering all or any portion of the Company Property or any Loan Document, and (iii) such Transfer does not violate any federal or state securities Laws and will not cause the Company to become subject to the Investment Company Act of 1940, as amended. As promptly as practicable after the admission of any Person as a Member, the books and records of the Company shall be changed to reflect such admission. All reasonable costs and expenses incurred by the Company in connection with any Transfer of any Interest and, if applicable, the admission of any transferee as a Member shall be paid by such transferee.

9.4          Section 754 Election. In the event of a Transfer of all or part of the Interest of a Member, at the request of the transferee or if required by the Code, or if otherwise in the best interests of the Company (as determined by a Majority-In-Interest of the Members), the Company shall elect pursuant to Section 754 of the Code to adjust the basis of Company Property as provided by Sections 734 and 743 of the Code, and any cost of such election or cost of administering or accounting for such election shall be at the sole cost and expense of the requesting transferee.

9.5          [Reserved]

ARTICLE X
EXCULPATION AND INDEMNIFICATION

10.1        Exculpation. No Member, Managing Member, general or limited partner of any Member, shareholder, partner, or member or other holder of an equity interest of any Member or manager, officer or director of any of the foregoing, shall be liable to the Company or to any other Member for monetary damages for any losses, claims, damages or liabilities arising from any breach of fiduciary duty or act or omission performed or omitted by it and arising out of or in connection with this Agreement or the Company’s business or affairs, provided that any such act or omission was taken in good faith, was reasonably believed to be in the best interests of the Company and it was within the scope of authority granted to such Person, and in the case of a Member, Managing Member or related Person, was not attributable to such Member’s, Managing

51

Member’s or Person’s fraud, bad faith, willful misconduct or negligence or the breach of any covenant, agreement or obligation by such Person contained in this Agreement. No general or limited partner of any Member, Managing Member, shareholder, partner, member or other holder of an equity interest in such Member, Managing Member or manager, officer of director of any of the foregoing shall be personally liable for the performance of any such Member’s or Managing Member’s obligations under this Agreement, but the foregoing shall not relieve any such partner, shareholder or member of any Member or Managing Member from its obligations to such Member or Managing Member.

10.2        Indemnification.

(a)           The Company shall, to the fullest extent permitted by applicable law, indemnify, defend and hold harmless each Member, the Managing Member and each general or limited partner of any Member or such Member’s Affiliates, shareholders, members, partners or other holders of any equity interest in such Member or its Affiliates, or any manager, officer or director of any of the foregoing (collectively, the “Indemnitees”), from and against any losses, claims, demands, liabilities, costs, damages, expenses (including, without limitation, reasonable fees and expenses of outside counsel) and causes of action imposed on, incurred by, asserted against or to which such Indemnitee may otherwise become subject by reason of or in connection with any breach of fiduciary duty or matter arising out of or incidental to any act performed or omitted to be performed by any such Indemnitee in connection with this Agreement or the Company’s business or affairs; provided, that any such act or omission was taken in good faith, was reasonably believed by the applicable Indemnitee to be in the best interest of the Company and was within the scope of authority granted to such Member or applicable Indemnitee, and in the case of a Member or related Indemnitee, was not attributable to such Indemnitee’s fraud, bad faith, willful misconduct or negligence or the breach of any covenant, agreement or obligation by such Person contained in this Agreement. Any indemnity under this Section 10.2 shall be paid solely out of and to the extent of Company assets and shall not be a personal obligation of any Member and in no event will any Member be required, or permitted without the Approval of all of the Members, to contribute additional capital under Section 4.2 to enable the Company to satisfy any obligation under this Section 10.2. All judgments against the Company and the Members, or any one or more thereof, wherein such Member (or Members) is entitled to indemnification, must first be satisfied from Company assets.

(b)           The Company and each Member shall be indemnified and held harmless by the other Member from and against any and all claims, demands, liabilities, costs, damages, expenses and causes of action of any nature whatsoever, excluding consequential, indirect or special damages, arising out of or attributable to (i) any act performed by or on behalf of such Member (including acts performed as the Managing Member) which is not performed in good faith or is not reasonably believed by such Member to be in the best interest of the Company and within the scope of authority conferred upon such Member under this Agreement, (ii) the fraud, bad faith, willful misconduct or negligence of such Member, (iii) the breach by the Company of any of its representations and warranties made under any Transaction Document, which breach was the result of information or matters relating to such Member and provided by such member which information was untrue when provided, or (iv) any final denial of an insurance claim by the Company based on an intentional misstatement or intentional withholding of information by any Member.

52

(c)           The provisions of this Section 10.2 shall survive for a period of two years from the date of dissolution of the Company, provided that, if at the end of such period there are any actions, proceedings or investigations then pending, any Indemnitee may so notify the Company and the other Members at such time (which notice shall include a brief description of each such action, proceeding or investigation and the liabilities asserted therein) and the provisions of this Section 10.2 shall survive with respect to each such action, proceeding or investigation set forth in such notice (or any related action, proceeding or investigation based upon the same or similar claim) until such date that such action, proceeding or investigation is finally resolved, so long as the same is pursued with reasonable diligence.

(d)           Notwithstanding anything to the contrary contained in this Agreement, the obligations of the Company or any Member under this Section 10.2 shall (i) be in addition to any liability which the Company or such Member may otherwise have and (ii) inure to the benefit of such Indemnitee, its Affiliates and their respective members, partners, shareholders, managers, directors, officers, employees, agents and Affiliates and any successors, assigns, heirs and personal representatives of such Persons.

(e)           Notwithstanding any of the preceding provisions of this Section 10.2, in no event shall the Company have any obligation under this Section 10.2 that is prohibited by the charter of Behringer Harvard Opportunity REIT II, Inc., as same may exist as of the date of this Agreement or after any amendment hereafter made in order to comply with laws and regulations applicable to real estate investment trusts. BH represents and warrants to CH that there is no Company obligation under this Section 10.2 that is prohibited by the charter of Behringer Harvard Opportunity REIT II, Inc., as such charter exists as of the date of this Agreement.

(f)            In the event that (i) BH does not Approve any request by the Managing Member (a) under Section 7.(1)(a)(xxxviii) relating to the adoption of and implementation of any operation and maintenance program or any other program to remove or otherwise remediate hazardous materials or relating to the introduction or allowance of any substance regulated of as a hazardous substance under applicable Law, (b) for any Additional Capital Contributions, or use of Net Cash Flow, necessary to prevent waste to the Property (provided that CH has notified BH that the failure to approve and fund Additional Capital Contributions or use Net Cash Flow may result in waste as such term is used in the Loan Documents) of the property, or (ii) BH fails to maintain any Insurance required to under the Loan Documents that BH has agreed to or is required to maintain, or (iii) BH makes any Transfers prohibited under the Loan Documents without first obtaining the Lender’s consent, or (iv) BH causes a Bankruptcy Event by the Company in violation of the Loan Documents, BH (and not the Company) shall indemnify the CH persons who are Key Principals from and against any losses, claims, demands, liabilities, costs, damages, expenses (including, without limitation, reasonable fees and expenses of outside counsel) and causes of action imposed on, incurred by, asserted against or to which such Key Principals may otherwise become subject under the Loan Documents as a result of any of the foregoing.

53

ARTICLE XI
DISSOLUTION AND TERMINATION

11.1        Dissolution.

(a)           The Company shall be dissolved and its business wound up upon the earliest to occur of any of the following events:

(i)            the sale, condemnation or other disposition of all Company Property and the receipt of all consideration therefor;

(ii)           the unanimous agreement of the Members to dissolve the Company;

(iii)          the bankruptcy or dissolution of the last remaining Member (which shall not include the occurrence of such an event with respect to any Member’s constituent equity owners which does not cause such an event to occur with respect to the Member itself) or the occurrence of any other event that terminates the continued membership of all Members in the Company; or

(iv)          the occurrence of an event requiring the winding-up of the Company under the Delaware Act.

(b)           Without limitation on, but subject to, the other provisions hereof, the assignment of all or any part of a Member’s Interest permitted hereunder will not result in the dissolution of the Company. Except as otherwise specifically provided in this Agreement, each Member agrees that, without the Approval of the other Members, a Member may not withdraw from or cause a voluntary dissolution of the Company. In the event a Member withdraws from or causes a voluntary dissolution of the Company in contravention of this Agreement, such withdrawal or the causing of a voluntary dissolution shall not affect such Member’s liability hereunder.

11.2        Termination. In all cases of dissolution of the Company, the business of the Company shall be wound up and the Company terminated as promptly as practicable thereafter, and each of the following shall be accomplished:

(a)           The Liquidating Member shall cause to be prepared a statement setting forth the assets and liabilities of the Company as of the date of dissolution, a copy of which statement shall be furnished to all of the Members.

(b)           The Company Property shall be liquidated by the Liquidating Member as promptly as possible, but in an orderly and businesslike and commercially reasonable manner and subject to the provisions of the Operating Plan then in effect or a liquidating plan Approved by BH. The Liquidating Member may distribute Company Property in kind only with the Approval of all Members.

(c)           The proceeds of sale and all other assets of the Company shall be applied and distributed as follows and in the following order of priority:

54

(i)            first, to the payment of (A) the debts and liabilities of the Company (including any outstanding amounts due on any indebtedness encumbering the Company Property, or any part thereof) and (B) the expenses of liquidation;

(ii)           second, subject to the Approval of BH, to the setting up of any reserves which the Liquidating Member and the Managing Member shall determine to be reasonably necessary for contingent, unliquidated or unforeseen liabilities or obligations of the Company or any Member arising out of or in connection with the Company. Such reserves may, in the discretion of the Liquidating Member, be paid over to a national bank or national title company selected by it and authorized to conduct business as an escrow agent to be held by such bank or title company as escrow agent for the purposes of disbursing such reserves to satisfy the liabilities and obligations described above, and at the expiration of such period as the Liquidating Member may reasonably deem advisable, distributing any remaining balance as provided in Section 11.2(c)(iii); provided, however, that, to the extent that it shall have been necessary, by reason of applicable law or regulation, to create any reserves prior to any and all distributions which would otherwise have been made under Section 11.2(c)(i) and, by reason thereof, a distribution under Section 11.2(c)(i) has not been made, then any balance remaining shall first be distributed pursuant to Section 11.2(c)(i);

(iii)          thereafter, the balance, if any, to the Members in accordance with Section 6.6.

11.3        Liquidating Member.  The Liquidating Member shall not be required to post a bond and is hereby irrevocably appointed as the true and lawful attorney in the name, place and stead of each of the Members, such appointment being coupled with an interest, to make, execute, sign, acknowledge and file with respect to the Company all papers which shall be necessary or desirable to effect the dissolution and termination of the Company in accordance with the provisions of this Article XI. Notwithstanding the foregoing, each Member, upon the request of the Liquidating Member or the Managing Member, shall promptly execute, acknowledge and deliver all such documents, certificates and other instruments as the Liquidating Member or the Managing Member shall reasonably request to effectuate the proper dissolution and termination of the Company, including the winding up of the business of the Company.

11.4        Claims of the Members. Members and former Members shall look solely to the Company’s assets for the return of their Capital Contributions, and if the assets of the Company remaining after payment of or due provision for all debts, liabilities and obligations of the Company are insufficient to return such Capital Contributions, the Members and former Members shall have no recourse against the Company or any other Member.

ARTICLE XII
DEFAULT BY MEMBER

12.1        Events of Default. For the purposes of this Agreement, an “Event of Default” shall exist with respect to a Member if and so long as any of the following shall occur and be continuing:

55

(a)           A voluntary Transfer of any Member’s Interest, other than a permitted Transfer made in accordance with Sections 9.2 or Article XV.

(b)           A Member’s voluntary withdrawal as a Member for any reason other than a permitted Transfer of its Interest and the admission of the transferee as a Member in its stead (in accordance with the applicable provisions of Sections 9.2).

(c)           Any representation or warranty of such Member contained in Sections 13.1, 14.1, or 14.2 is inaccurate or untrue in any material respect.

(d)           Such Member or its Affiliates shall violate any other material term, breach any material provision or default in the performance of any of its duties or material covenant applicable to such Member as set forth in this Agreement (excluding a failure to make Additional Capital Contributions, the exclusive remedy for which is set forth in Section 4.2) and (i) such violation, breach or default causes more than a de minimis loss or damage to the Company, or any of its Members or their respective Affiliates, and (ii) such violation, breach or default is not cured (including without limitation, by the breaching Member reimbursing the Company or the affected Member for the resulting damage or loss) within a Reasonable Period.

(e)           The occurrence of a Bankruptcy Event of a Member;

(f)            Solely with respect to CH, an “event of default” shall occur and be continuing, subject to applicable notice and cure provisions, under any Management Agreement or other material agreement that the Company enters into with the CH Member Group or any of its Affiliates, and (i) such violation, breach or default causes Material Damage or Loss to the Company, or any of its Members or their respective Affiliates, and (ii) such violation, breach or default is not cured (including without limitation, by the CH Member Group reimbursing the Company or the affected Member for the resulting Material Damage or Loss) within a Reasonable Period; or

(g)           Solely with respect to the Managing Member, the occurrence of a For Cause Event that is not cured within any applicable cure period.

Notwithstanding the foregoing provisions of this Section 12.1, a failure by any Member to make any Additional Capital Contribution to the extent required or requested hereunder shall not constitute an Event of Default by such Member.

12.2        Effect of Event of Default. Subject to the provisions hereof, upon the occurrence of an Event of Default by BH or the CH Member Group, then the non-defaulting party (BH or the CH Member Group) shall have the right, at any time within one year from the date of such Event of Default and upon giving the defaulting party at least ten (10) days prior written notice of such election to pursue any right or remedy available to it at law or in equity against the defaulting party (which shall represent a recourse obligation of such party); provided, however, the parties hereto waive any claims to any consequential, indirect or special damages. In addition, BH shall have the remedies set forth in Section 7.2(e) if the defaulting party is any member of the CH Member Group.

56

ARTICLE XIII
MISCELLANEOUS

13.1        Representations and Warranties of the Members.

(a)           Each Member represents and warrants to the other Members as follows:

(i)            It is duly organized, validly existing and in good standing under the Laws of its jurisdiction of formation with all requisite power and authority to enter into this Agreement and to conduct the business of the Company.

(ii)           This Agreement constitutes the legal, valid and binding obligation of the Member enforceable in accordance with its terms.

(iii)          No consents or approvals are required from any governmental authority or other person or entity for the Member to enter into this Agreement and the Company. All limited liability company, corporate or partnership action on the part of the Member necessary for the authorization, execution and delivery of this Agreement, and the consummation of the transactions contemplated hereby, have been duly taken.

(iv)          The execution and delivery of this Agreement by the Member, and the consummation of the transactions contemplated hereby, does not conflict with or contravene the provisions of its organizational documents or any agreement or instrument by which it or its properties are bound or any law, rule, regulation, order or decree to which it or its properties are subject.

(v)           The Member has not retained any broker, finder or other commission or fee agent other than Brush Island Capital, LLC or Lender and no such person has acted on its behalf in connection with the acquisition of the Company Property or the execution and delivery of this Agreement.

(vi)          It understands that (A) an investment in the Company involves substantial and a high degree of risk, (B) no federal or state agency has passed on the offer and sale of the Interest in the Company to such Person, (C) it must bear the economic risk of such Person’s investment in the Company for an indefinite period of time, since such Person’s Interest in the Company has not been registered for sale under the Securities Act of 1933 and, therefore, cannot be sold or otherwise transferred unless subsequently registered under the Securities Act of 1933 or an exemption from such registration is available, and the Interest in the Company of such Person cannot be sold or otherwise transferred unless registered under applicable state securities or blue sky Laws or an exemption from such registration is available, (D) there is no established market for the Interest of such Person in the Company and no public market will develop and (E) such Person’s principals have such knowledge and experience in real estate and, other financial and business matters that they are capable of evaluating the merits and risks of an investment in the Company. It has acquired its Interest solely for investment purposes only and not for the purpose of resale.

57

(vii)         Neither such Member, nor, to such Member’s knowledge, any Person who holds any interest in such Member and with respect only to CH, nor any CH Person is a Prohibited Person nor a Person with whom a U.S. Person, including a “financial institution” as defined in 31 U.S.C. 5312 (a)(z), as amended (“Financial Institution”), is prohibited from transacting business of the type contemplated by this Agreement or any Transaction Agreement, whether such prohibition arises under United States law, regulation, executive orders and lists published by the OFAC (including those executive orders and lists published by OFAC with respect to Specially Designated Nationals and Blocked Persons) or otherwise.

(viii)        Such Member has taken, and shall continue to take, such measures as are required by applicable law to assure that the funds used to pay sellers and lessors under the Transaction Agreements are derived: (i) from transactions that do not violate United States law nor, to the extent such funds originate outside the United States, do not violate the Laws of the jurisdiction in which they originated; and (ii) from permissible sources under United States law and to the extent such funds originate outside the United States, under the Laws of the jurisdiction in which they originated.

(ix)          Such Member is in compliance with all applicable provisions of the USA Patriot Act of 2001, Pub. L. No. 107-56 in all material respects.

(b)           In addition, CH represents and warrants to BH that it, and for so long as CHRES/Management, L.L.C. is the Property Manager, the Property Manager are or will be Controlled by at least one of the CH Persons.

(c)           Each Member agrees to indemnify and hold harmless the Company and each other Member and their officers, directors, shareholders, partners, members, employees, successors and assigns from and against any and all loss, damage, liability or expense (including costs and attorneys’ fees) which they may incur by reason of, or in connection with, any breach of the foregoing representations and warranties or those set forth in Article XIV made by such Member and all such representations and warranties shall represent recourse obligations of the Members and will survive the execution and delivery of this Agreement and the termination and dissolution of the Company or any Member.

13.2        Further Assurances. Each Member agrees to execute, acknowledge, deliver, file, record and publish such further instruments and documents, and do all such other acts and things as may be required by law, or as may be required to carry out the intent and purposes of this Agreement.

13.3        Notices. All material notices, demands, consents, requests for Approvals, or other requests or communications which any of the parties to this Agreement may desire or be required to give hereunder (collectively, “Notices”) shall be in writing and shall be given by (i) personal delivery, (ii) facsimile transmission with confirmed receipt or (iii) a reputable overnight courier service, fees prepaid, addressed as follows:

58

The foregoing notice provision shall not be applicable to routine communications between the Members relating to the day-to-day operation of the Property or the Company. Any Member may designate another addressee (and/or change its address) for Notices hereunder by a Notice given pursuant to this Section 13.3. A Notice sent in compliance with the provisions of this Section 13.3 shall be deemed to be delivered, given, and received for all purposes as of (A) the actual date of delivery or transmission, as shown on the postal or courier service receipt or on the transmittal log sheet generated by the sending Fax machine, if delivered or transmitted before 5:00 pm, recipient’s local time, on a Business Day (and, otherwise, on the first Business Day after the date of actual delivery or transmission) or (B) as of the actual date of attempted delivery (but not attempted but failed Fax transmission), if delivery is attempted but refused between the hours of 9:00 am and 5:00 pm, recipient’s local time, on a Business Day..

13.4        Governing Law. This Agreement shall be governed by and construed in accordance with the Laws of the State of Delaware applicable to agreements made and to be performed wholly within that State.

59

13.5        Captions. All titles or captions contained in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit, extend, or describe the scope of this Agreement or the intent of any provision in this Agreement and do not constitute substantive matter to be considered in construing the terms of this Agreement.

13.6        Pronouns and Interpretation. All pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, and neuter, singular and plural, as the identity of the party or parties may require. Unless the context otherwise requires, (i) all references made in this Agreement to a Section, Schedule, Annex or an Exhibit are to a Section, Schedule, Annex or an Exhibit of or to this Agreement, (ii) “or” is disjunctive but not necessarily exclusive, (iii) “will” shall be deemed to have the same meaning as the word “shall” and (iv) words in the singular includes the plural and vice versa. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation,” where or not so followed. All references to “$” or dollar amounts are to lawful currency of the United States of America, unless otherwise expressly stated.

13.7        Successors and Assigns. This Agreement shall be binding upon the parties hereto and their respective executors, administrators, legal representatives, heirs, successors and assigns, and shall inure to the benefit of the parties hereto and, except as otherwise provided herein, their respective executors, administrators, legal representatives, heirs, successors and permitted assigns.

13.8        Extension Not a Waiver. No delay or omission in the exercise of any power, remedy or right herein provided or otherwise available to a Member or the Company shall impair or affect the right of such Member or the Company thereafter to exercise the same. Any extension of time or other indulgence granted to a Member hereunder shall not otherwise alter or affect any power, remedy or right of any other Member or of the Company, or the obligations of the Member to whom such extension or indulgence is granted.

13.9        Creditors Not Benefited. Nothing contained in this Agreement is intended or shall be deemed to benefit any creditor of the Company or any creditor of any Member, and no creditor of the Company shall be entitled to require the Company or the Members to solicit or accept any Additional Capital Contribution for the Company or to enforce any right which the Company or any Member may have against any Member under this Agreement or otherwise or under any guaranty.

13.10      Recalculation of Interest. If any applicable law is ever judicially interpreted so as to deem any distribution, contribution, payment or other amount received by any Member or the Company under this Agreement as interest and so as to render any such amount in excess of the maximum rate or amount of interest permitted by applicable law, then it is the express intent of the Members and the Company that all amounts in excess of the highest lawful rate or amount theretofore collected be credited against any other distributions, contributions, payments or other amounts to be paid by the recipient of the excess amount or refunded to the appropriate Person, and the provisions of this Agreement immediately be deemed reformed, without the necessity of the execution of any new document, so as to comply with the applicable law, but so as to permit the payment of the fullest amount otherwise required hereunder. All sums paid or agreed to be paid that are judicially determined to be interest shall, to the extent permitted by applicable law,

60

be amortized, prorated, allocated and spread throughout the term of such obligation so that the rate or amount of interest on account of such obligation does not exceed the maximum rate or amount of interest permitted under applicable law.

13.11      Severability. In case any one or more of the provisions contained in this Agreement or any application thereof shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein and other application thereof shall not in any way be affected or impaired thereby.

13.12      Entire Agreement. This Agreement contains the entire agreement between the parties relating to the subject matter hereof and all prior agreements relative hereto which are not contained herein are terminated. Amendments, variations, modifications or changes herein may be made effective and binding upon the Members by, and only by, the setting forth of same in a document duly executed by each Member, and any alleged amendment, variation, modification or change herein which is not so documented shall not be effective as to any Member.

13.13      Publicity and Press Releases. No public announcement, press release or other similar public disclosure of the terms of this Agreement, the activities of the Company, or the plans of the Company will be made unless same is Approved by BH. However, notwithstanding the preceding sentence, any Member shall have the right, without obtaining the consent of any other Member, to make disclosures in the course of normal reporting practices to its prospective members, shareholders or partners, or actual members, shareholders or partners or as may, in the reasonable judgment of such Member’s counsel, be required by applicable Law. Furthermore, it is agreed that the foregoing provisions of this Section 13.13 shall not prohibit a Member from disclosing such information to the actual or prospective accountants, attorneys, consultants, lenders and vendors of the Company to allow such parties to provide services, funds or goods to the Company. Further, it is understood and agreed that BH is a direct or indirect subsidiary of Behringer Harvard Opportunity REIT II, Inc., a corporation that is required to make public disclosures of material facts and events under U.S. federal securities Law, and that, notwithstanding anything to the contrary contained herein, Behringer Harvard Opportunity REIT II, Inc. shall have the right to determine, in its sole and absolute discretion, whether any such disclosure is required by U.S. federal securities Law and to make such disclosure of information as is consistent with such determination. The Members have agreed that if a Member breaches the obligation set forth in the first sentence of this Section 13.13 (the “Non-Disclosure Obligation”), the actual damages that will be incurred by the other Member as a result of such breach would be extremely difficult or impracticable to determine. Therefore, the Members agree that if a Member or any Affiliate of a Member breaches the Non-Disclosure Obligation, such Member shall pay to the other Member liquidated damages (the “Liquidated Damages”) in the amount of Twenty Thousand Dollars ($20,000) for each such breach, such amount having been agreed upon, after negotiation, as the Members’ reasonable estimate of the damages that will be suffered by reason of a breach of the Non-Disclosure Obligation. Any Liquidated Damages becoming payable pursuant to this Section 13.13 shall be paid within ten (10) days after the breach of the Non-Disclosure Obligation giving rise to the Liquidated Damages. If not paid within such ten (10) day period, the Liquidated Damages shall thereafter bear interest at the lesser of twelve percent (12%) per annum or the highest rate permitted by applicable law. All Company distributions and other payments that otherwise would be made to the Member that is liable for Liquidated Damages shall be paid to the other Member until the Liquidated Damages

61

and all interest accrued thereon are paid in full (with all such payments being applied first to accrued and unpaid interest and then to the Liquidated Damages).

13.14      Confidentiality.

(a)           The terms of this Agreement, the identity of any person with whom the Company may be holding discussions with respect to any investment, acquisition, disposition or other transaction, and all other business, financial, or other information relating directly to the conduct of the business and affairs of the Company, the Company Property or the relative or absolute rights or interests of any of the Members (collectively, the “Confidential Information”) that is not already publicly available or that has not been publicly disclosed pursuant to authorization by all of the Members is confidential and proprietary information of the Company, the disclosure of which would cause irreparable harm to the Company and the Members. Provided, however, that any Member (or its Affiliates) may disclose such Confidential Information (i) required by law (it being specifically understood and agreed that anything set forth in a registration statement or any other document filed pursuant to law will be deemed required by law), or (ii) to its employees, its proposed lenders, proposed investors, management company, accountants, due diligence consultants, brokers, legal counsel and other agents and representatives who need to know such information to the extent reasonably necessary for such persons to properly analyze and evaluate the proposed transaction, property purchase, loan or investment provided that the disclosing party has informed the recipients of the confidential information and such recipients are subject to an agreement (including by way of a written policy or rule to which the recipient is subject) to keep the Confidential Information confidential and to use it solely for the purpose for which the Confidential Information was disclosed, or (iii) if necessary for it to perform any of its duties or obligations hereunder or in any property management agreement to which it is a party covering any Company Property, or to market the Company Property or any Interests as permitted by the terms of this Agreement; provided, however, that the Company, CH and the CH Persons, BH and its Affiliates may disclose Confidential Information to any of their partners, members, lenders, or other actual or prospective investor in or purchaser of the Company Property in accordance with the terms of this Agreement. Without limitation of the foregoing, it is understood and agreed that BH is an indirect subsidiary of Behringer Harvard Opportunity REIT II, Inc., a corporation that is required to make public disclosures of material facts and events under U.S. federal securities Law, and that in respect of item (b) in the preceding sentence, Behringer Harvard Opportunity REIT II, Inc. shall determine, in its sole and absolute discretion, whether any such disclosure is required by applicable Law or regulations. Nothing contained in the foregoing provisions shall be construed to prohibit the recordation in the appropriate real estate records of any document that, when executed, is necessary to effectuate the intent of this Agreement or will evidence or convey an interest in real property or debt secured by real property and that is customarily recorded.

(b)           Subject to the provisions of Section 13.14(a), each Member agrees not to disclose any Confidential Information to any Person (other than a Person (including without limitation an attorney or advisor) who does not agree to maintain all Confidential Information in strict confidence.

(c)           Notwithstanding any other provision herein to the contrary, a Member shall have no liability with respect to the obligation to maintain all Confidential Information in

62

strict confidence if (i) ordered to deliver the Confidential Information by a court or similar tribunal or governmental entity with the power to enforce its order with a contempt decree or otherwise; (ii) any proceeding, dispute or litigation between the parties hereto occurs; (iii) the Confidential Information is already known by others not bound by a duty of confidentiality herein; or (iv) the Confidential Information is or becomes publicly available through no fault of the Member or its representatives

(d)           The covenants contained in this Section 13.14 will survive the Transfer of the Interest of any Member and the termination of the Company.

13.15      Venue. Each of the Members consents to the jurisdiction of any court in Wilmington, Delaware, Memphis, Tennessee, Nashville, Tennessee, or Dallas, Texas for any action arising out of matters related to this Agreement. Each of the Members waives the right to commence an action in connection with this Agreement in any court outside of Wilmington, Delaware, Memphis, Tennessee, Nashville, Tennessee, or Dallas, Texas.

13.16      WAIVER OF JURY TRIAL. EACH OF THE MEMBERS HEREBY WAIVES TRIAL BY JURY IN ANY ACTION ARISING OUT OF MATTERS RELATED TO THIS AGREEMENT, WHICH WAIVER IS INFORMED AND VOLUNTARY.

13.17      Cooperation. In connection with the sale of the Company Property or any portion thereof, each Member agrees to reasonably cooperate with each other Member (the “Exchanging Member”), which seeks to structure the disposition of its Interest in a manner that will afford the Exchanging Member an opportunity to take advantage of provisions of the Code governing tax free exchanges or reorganizations; provided that such structuring does not have an adverse effect on any such sale (including without limitation, with respect to timing), and provided that the Exchanging Member shall bear all costs and expenses associated with such structuring, the other Members shall not be required to take title to any property or interest or assume or be subject to any obligations, and the Exchanging Member shall indemnify, defend and hold the other Member(s) and the Company harmless from and against any and all liabilities that they may incur by reason of their participation or cooperation in such exchange or reorganization transaction, and such structuring shall not delay any such transaction, and shall be subject to any reasonable restrictions proposed by the Members that are not Exchanging Members.

13.18      Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be an original but all of which together shall constitute but one and the same agreement.

13.19      Attorneys’ Fees. If the Company or any Member obtains a judgment against any Member by reason of the breach of this Agreement or the failure to comply with the terms hereof, it is the intent of the parties that reasonable attorneys’ fees and costs as fixed by the court shall be included in such judgment.

13.20      Effectiveness. Pursuant to Section 18-201(d) of the Delaware Act, this Agreement shall be effective as of the time of the filing of the Certificate of Formation with the Office of the Delaware Secretary of State (the “Effective Date”).

63

ARTICLE XIV
PATRIOT ACT

14.1        Compliance with International Trade Control Laws and OFAC Regulations. Each Member represents, warrants and covenants to the other Member with respect to itself and its Affiliates, as applicable, that:

(a)           It is not now nor shall it be at any time during the term of this Agreement a Person with whom a U.S. Person, including a Financial Institution, is prohibited from transacting business of the type contemplated by this Agreement, whether such prohibition arises under U.S. law, regulation, executive orders and lists published by the OFAC (including those executive orders and lists published by OFAC with respect to Specially Designated Nationals and Blocked Persons) or otherwise.

(b)           Such Member, no CH Person, and no Person who owns a direct interest in such Member is not now nor shall be at any time during the term of this Agreement a Person with whom a U.S. Person, including a Financial Institution, is prohibited from transacting business of the type contemplated by this Agreement, whether such prohibition arises under U.S. law, regulation, executive orders and lists published by the OFAC (including those executive orders and lists published by OFAC with respect to Specially Designated Nationals and Blocked Persons) or otherwise.

14.2        Member’s Funds.

(a)           Each Member represents, warrants and covenants to the other Member that it has taken, and shall continue to take during the term of this Agreement, such measures as are required by law to assure that the funds invested in the Company and/or used to make payments in connection therewith are derived (i) from transactions that do not violate U.S. law nor, to the extent such funds originate outside the United States, do not violate the Laws of the jurisdiction in which they originated; and (ii) from permissible sources under U.S. law or to the extent such funds originate outside the United States, under the Laws of the jurisdiction in which they originated.

(b)           Each Member further represents, warrants and covenants to the other Member that, to the best of its knowledge after making due inquiry, neither the Member, nor any Affiliate, nor any holder of a direct interest in such Member, no any CH Person, nor any Person providing funds to such Member (i) is under investigation by any governmental authority for, or has been charged with, or convicted of, money laundering, drug trafficking, terrorist related activities, any crimes which in the United States would be predicate crimes to money laundering, or any violation of any Anti-Money Laundering Laws; (ii) has been assessed civil or criminal penalties under any Anti-Money Laundering Laws; (iii) has been convicted of any crimes involving moral turpitude or tax fraud; and (iv) has had any of its funds seized or forfeited in any action under any Anti-Money Laundering Laws.

14.3        Member Compliance with Patriot Act.  Each Member represents and warrants that it is in material compliance with any and all applicable provisions of the Patriot Act.

64

14.4        Cooperation with Other Members.  Each Member agrees to cooperate with the other Member, in providing such additional information and documentation on such Member’s legal or beneficial ownership, policies, procedures and sources of funds as any Member deems necessary or prudent to enable such Member to comply with Anti-Money Laundering Laws as now in existence or hereafter amended. From time to time upon the written request of any Member, each Member shall deliver to the other Member a schedule of the name, legal domicile address and jurisdiction of organization, if applicable, for such Member and each holder of a legal interest in such Member.

14.5        Actions Taken Pursuant to Anti-Money Laundering Laws.  If any Member reasonably believes that a Member may have breached any of the representations, warranties or covenants set forth in this Article XIV, each such Member has the right (and may have the obligation under applicable Law), with or without notice to such other Member, to (a) notify the appropriate governmental authority (or authorities) and to take such action as such governmental authority (or authorities) may direct; and/or (b) withhold distributions and segregate the assets constituting the Capital Contribution by such Member or any of such Member’s funds or assets deposited with or otherwise controlled by the Company pursuant to this Agreement or otherwise.

ARTICLE XV
BUY-SELL PROCEDURE

15.1        General Provisions.  Either BH or CH (the “Offeror”) may, upon the occurrence of a Deadlock Event, or if earlier, at any time following an Event of Default or a For Cause Event with respect to BH or the CH Member Group, in which event the non-breaching party (BH or CH) may be the Offeror, make an offer as described below (the “Buy-Sell Offer”) to the other (the “Offeree”), as set forth below.

(a)           The Buy-Sell Offer must (i) be in writing and be signed by the Offeror, (ii) specify the Offeror’s good faith estimate of the fair market value of the Company Property (the “Buy-Sell Offer Price”) at which the Offeror would purchase all of the assets of the Company, as if such assets were free and clear of all liens, claims and encumbrances (that can be discharged or removed with the payment of money), (iii) disclose all liabilities and potential liabilities of the Company known to the Offeror and a good faith estimate of the monetary amount of such liabilities, and (iv) disclose the terms and details of any financing, refinancing, proposed sale, or other monetization event that the Offeror has initiated, negotiated or discussed during the prior one hundred eighty (180) calendar days with a third party for all or any portion of the Company Property.

(b)           A copy of the Buy-Sell Offer must be delivered to the Offeree and to the Company Accountant who shall, within ten (10) Business Days of the Buy-Sell Offer, determine and notify the Members of the amount the Offeree would receive (the “Offeree Value”) and the amount the Offeror would receive (the “Offeror Value”) on account of its or their respective Interest(s) and any Priority Capital Contributions if all Company Property were sold for the aggregate Buy-Sell Offer Price, all liabilities of the Company were paid in full, and the remaining proceeds were distributed to the Members in accordance with Section 6.4.

65

(c)           The Offeree will have the right, exercisable by delivery of notice in writing (the “Election”) to the Offeror within forty five (45) calendar days after its receipt of the Buy-Sell Offer, to elect to either:

(i)            sell to the Offeror all of the Offeree’s rights, title and interests in and to its or their Interest(s) in the Company (and in any Priority Capital Contributions) for a cash purchase price equal to the Offeree Value; or

(ii)           purchase all of the Offeror’s rights, title and interests in and to its or their Interest(s) in the Company (and in any Priority Capital Contributions) for a cash purchase price equal to the Offeror Value.

Failure of the Offeree to timely give the Offeror notice of the Offeree’s Election will be deemed, upon the expiration of such forty five (45) day period, to be an Election to sell under Section 15.1(c)(i). Notwithstanding anything to the contrary in this Section 15.1, absent an agreement in writing among the parties, once a Buy/Sell Offer has been made in accordance with the terms hereto, the Buy/Sell process may not subsequently be stopped by the Offeree claiming that the Deadlock Event has been resolved or an Event of Default has been cured after the initiation of such process.

(d)           Contemporaneously with the Offeree’s Election or deemed Election, the purchasing party under this Section 15.1 shall deposit in escrow with a national title company or bank or other financial institution selected by the selling party as escrowee an earnest money deposit in cash in an amount equal to 5% multiplied by the purchase price to be paid in connection with such purchase, and, if for any reason such purchasing party fails to close such purchase as provided in this Section 15.1, then the selling party may retain such deposit as liquidated damages for its own account or elect to purchase all of the rights, title and interests of the purchasing party in and to its or their Interest(s) (and in any Priority Capital Contributions) for a cash purchase price equal to 95% of the Offeree Value or Offeror Value, as applicable and apply such deposit toward the purchase price. All closings of any purchase and sale under this Section 15.1 will be held at the principal office of the Company and shall take place no later than that date which is 90 calendar days after the later of the Offeree’s Election or deemed Election.

(e)           Each of BH and CH will be entitled to enforce its rights under this Section 15.1 by specific performance. If the purchasing party defaults under this Section 15.1, it will have no right to make any future Buy-Sell Offer hereunder.

(f)            Any party may freely assign its rights and obligations pursuant to this Section 15.1 by delivering notice of such assignment to BH or CH (as applicable), provided that the assigning party will remain liable for any and all obligations of its assignee, as if such party had not assigned its rights pursuant to this Section 15.1.

(g)           Notwithstanding the foregoing, no Buy-Sell Offer may be made until all periods for making elections and performing obligations under any previous Buy-Sell Offer pursuant to this Section 15.1 have terminated.

15.2        Termination of Other Agreements. If a purchase and sale of Interests under this Article XV is completed, all agreements between the Company and a selling Member or its

66

Affiliates related to the Company Property (including the Management Agreements related to BH or CH, as applicable) will (at the election of the purchasing party) be terminated on the date such Interest is purchased without payment of any penalty or termination fee. In addition, at the closing of such purchase made in accordance with Section 15.1, the purchaser shall (i) obtain a release of the selling Member and its Affiliates (including the Key Principals) from all liability, direct or contingent, by all holders of all Company debts, obligations or claims for which the selling Member or its Affiliates may be personally liable (including any guaranties of the non-recourse carve-outs and the indemnification of environmental hazards not in existence as of the date of closing) occurring or relating to the period on and after the date of the approval by the Lender under the Loan of the same and provided that such release shall not be required to extend to any liability relating to environmental hazards under the Loan Documents arising out of conditions existing as of the closing date for the purchase of such Interests unless such liabilities were incurred due to solely BH’s actions or inactions (directly or indirectly) that allowed for or resulted in such liabilities; provided, however, that if BH is the purchasing party and the Buy-Sell Offer had been made as a result of an Event of Default or a For Cause Event by the Managing Member (in either case following the expiration of any applicable cure periods) then BH shall not be obligated to obtain a release of the Key Principal if BH would not be obligated to obtain a Carve-out Release under the circumstances described in Section 4.5(c), or (ii) if purchaser is unable, after requesting same, to deliver such a release, then deliver to the selling Member and any other Person that is potentially subject to personal liability under the Loan Documents, including the Key Principals, an agreement in form and substance reasonably satisfactory to the selling Member and such other Persons from a creditworthy Affiliate to assume the debts, obligations or claims of the selling Member and its Affiliates with respect to, and to defend, indemnify and save the selling Member, its Affiliates and the Key Principals harmless from, any liability to the holders of such Company debts, obligations or claims arising on or after the date of the purchase; provided, however, that such assumption and indemnification shall not extend to those claims arising from the fraud, bad faith, willful misconduct or negligence of the selling Member or any of its Affiliates or to environmental hazards caused by or attributable to acts or omissions the selling Member or any of its Affiliates, or if BH would not be obligated to deliver a Carve-out Indemnity under the circumstances described in Section 4.5(c). Unless the indemnity from a credit worthy party has been Approved by the selling Member and the Key Principals in their reasonable discretion by the closing, then the purchaser must obtain the release provided for in clause (i) above; provided that if BH or a BH Affiliate is the purchaser and is obligated to obtain a release or provide an indemnity under this section, BH Opp REIT II shall be deemed to be a credit worthy entity provided that it has a minimum net worth of $15,000,000 as of the date such indemnity is to be provided and to the extent the release excludes any items that would otherwise be subject of the Indemnification Agreement, the Indemnification Agreement, amended so as to relate only to those items for which a release has not been obtained, shall be deemed to be a satisfactory form.

15.3        Power of Attorney. In the event that the Offeror or Offeree shall have failed or refused, within five calendar days after receipt of a notice from the other requesting such party to execute, acknowledge and deliver such documents, or cause the same to be done, as shall be required to effectuate the provisions of Section 15.1 hereof, then the non-defaulting party may execute, acknowledge and deliver such documents for, on behalf of and in the stead of the defaulting party or on behalf of and in the name of the Company, as applicable, and such execution, acknowledgment and delivery by the non-defaulting party shall be for all purposes

67

effective against and binding upon the defaulting party or the Company, as applicable, as though such execution, acknowledgment and delivery had been by the defaulting party or the Company, as applicable. Each of the Members does hereby irrevocably constitute and appoint the other Members as the true and lawful attorney in fact of such appointing Member, in the name, place and stead of such appointing Member, as the case may be, to execute, acknowledge and deliver such documents under the circumstances contemplated by this Section 15.3. It is expressly understood, intended and agreed by each Member, that the grant of the power of attorney to the other Members pursuant to this Section 15.3 is coupled with an interest, is irrevocable and shall survive the death, dissolution, termination or legal incompetency of such appointing Member, as the case may be, or the assignment of the interest of such appointing Member in the Company, or the dissolution of the Company.

ARTICLE XVI
RIGHT OF BH TO TRIGGER SALE OF THE PROPERTY; ROFO

16.1        ROFO on the Sale of the Property.

(a)           If on or after the second anniversary of this Agreement and subject to the terms of any applicable Loan Documents, BH desires to sell the Property to any third party, BH shall first deliver to CH written notice of its intention to offer to sell the Property setting forth the proposed cash purchase price which BH is willing to accept and all other material terms and conditions of the proposed sale (“ROFO Notice”). BH need not have located a prospective purchaser or have in its possession an actual offer to purchase in order to exercise its rights pursuant to this Section 16.1(a). The ROFO Notice shall include a statement by BH setting forth the financing and encumbrances, if any, to which the Property will remain subject to upon conveyance (the “Permitted Exceptions”) and shall be at a price stated in U.S. dollars only.  If the Acquisition Loan is to be assumed by a prospective purchaser, then BH shall cause such purchaser to replace the existing Key Principals simultaneously with closing and to cause the existing Key Principals to be fully released from liability, except (i) for those liabilities or obligations contained in any guaranty or indemnification agreement executed by the Key Principals which are owing or existing as of the date of the transfer, (ii) with respect to any environmental liability that relates to the period prior to the date of the closing (to the extent such release cannot otherwise be obtained), regardless of when such environmental matter is discovered, unless caused directly or indirectly by the actions or inactions of BH and (iii) for any liability relating to a breach by the existing Key Principals under the assumption and release agreement executed in connection with the loan assumption, including a breach of any representations and warranties of the Key Principals made therein.

(b)           At any time within forty-five (45) calendar days after the date CH receives the ROFO Notice (the “ROFO Response Period”), CH shall have the right, exercisable by delivery of notice in writing (the “ROFO Election”) to BH to either:

(i)            approve the terms of the proposed sale of the Property and authorize BH to cause the Company to sell or dispose of the Property on the terms and conditions set forth in the ROFO Notice; or

68

(ii)           purchase, or caused to be purchased, the Property for a purchase price equal to the cash purchase price stated in the ROFO Notice, less the sum of any debt or other obligations to be assumed by the purchaser and on the other terms and conditions set forth in the ROFO Notice and subject to no other terms and conditions.

(c)           Any election pursuant to subparagraph (ii) of Section 16.1(b) above shall be made by (i) delivering to BH the ROFO Election, which shall affirmatively state that CH is exercising such option, and (ii) depositing in escrow with a national title company or a bank or other financial institution selected by BH (the “ROFO Escrow Agent”), as escrowee, a non-refundable earnest money deposit in cash equal to five percent (5%) of the purchase price (the “ROFO Escrow Deposit”) (as set forth in the ROFO Notice) within five (5) calendar days of such election. BH and the CH shall close the purchase of the Property within 45 calendar days of the date of CH’s ROFO Election to purchase pursuant to subparagraph (ii) above and the Company shall convey the entire fee simple title to the Property by special warranty deed to CH or its designee, against receipt of payment of the cash portion of the purchase price and assumption of any debt as aforesaid, subject to no title exceptions or other encumbrances other than the Permitted Exceptions (and such other title exceptions as do not materially affect the operations of the Property).

(d)           If during the ROFO Response Period, CH does not (i) authorize BH to attempt to sell the Property as provided in Section 16.1(b)(i) above, or (ii) timely elect to purchase the Property by following the procedures in Section 16.1(b)(ii) above, then CH shall be deemed to have authorized and approved the sale of the Property pursuant to Section 16.1(b)(i), for a purchase price not less than ninety-five (95%) of the purchase price set forth in the ROFO Notice and otherwise pursuant to such other terms, conditions and provisions as are determined appropriate in the reasonable discretion of BH. If CH authorizes or is deemed to have authorized the sale of the Property pursuant to the terms described above, and the Company thereafter receives a bona fide offer for the purchase of the Property from any third party for a purchase price payable at closing which is at least equal to ninety-five percent (95%) of the purchase price set forth in the ROFO Notice, BH may consummate the sale of the Property on such terms set forth in the ROFO Notice, without the requirement of any consent or Approval of any other Member; provided, however, such sale must be consummated within 360 calendar days after the date on which CH authorized or was deemed to have authorized such sale. The failure of the Company to close such sale within the 360-day period referred to in the immediately preceding sentence requires BH to again deliver to CH an additional ROFO Notice and to again follow the procedures set forth in this Section 16.1.

(e)           All closings of any purchase and sale under this Section 16.1 will be held at the principal office of BH and all transfer, stamp and recording taxes imposed on the transfer, and all prepayment fees, exit fees or other fees or penalties payable to any lender in connection with any prepayment of any financing incident to any purchase and sale under this Section 16.1 and all other closing costs shall be allocated as set forth in the ROFO Notice (and in the absence of such specific allocation, in accordance with local custom), and each of the Company and CH shall each pay its own attorney’s fees. Upon the closing of the purchase and sale under this Section 16.1, the purchaser shall execute and deliver to the Company an agreement in mutually acceptable form providing in effect that the purchaser shall indemnify and hold harmless the

69

Company from and after the closing date for all costs, expenses, liabilities and obligations of and regarding the Property arising after the closing date.

(f)            If CH shall default in its obligations to purchase the Property pursuant to the terms of this Section 16.1, the following shall be the sole and exclusive remedies for such default:

(i)            CH will immediately and without any further action cease to have any right to make a Buy-Sell Offer or otherwise trigger or initiate the provisions of Article XV;

(ii)           the ROFO Escrow Agent shall immediately deliver to BH the ROFO Escrow Deposit as liquidated damages;

(iii)          thereafter, BH may cause the Company to sell at any time the Property to any Person, without the prior written consent of CH and without having to comply with the provisions of this Section 16.1.

If BH shall default in its obligations to cause the Company to sell the Property pursuant to the terms of this Section 16.1, then CH shall have the right to pursue specific performance of such sale.

(g)           Notwithstanding the foregoing, if the provisions of Article XV of this Agreement have been initiated by a Member or CH, then BH may not initiate the provisions of this Section 16.1 until the procedures set forth in Article XV have been completed or terminated pursuant to the provisions thereof. No ROFO Notice may be delivered until all periods for making elections and performing obligations under any previous ROFO Notice pursuant to this Section 16.1 have terminated.

(h)           Subject to compliance with any applicable terms of the Loan Documents, CH may freely assign its rights and obligations pursuant to this Section 16.1 to an Affiliate by delivery of notice of such assignment to BH and the Company, provided that CH will remain liable for any and all obligations of its assignee, as if CH had not assigned its rights pursuant to this Section 16.1(h).

16.2        Termination of Other Agreements.  If the Property is sold under this Article XVI to BH or an Affiliate of BH or a third party, all other agreements between the Company and CH, the CH member Group or their Affiliates applicable to the Property will be terminated on the date the Property is purchased (without payment of any termination fee or penalty). If the Property is sold under this Article XVI to CH or an Affiliate of CH or the CH Member Group, all other agreements between BH and its Affiliates applicable to the Property will be terminated on the date the Property is purchased (without payment of any termination fee or penalty).

16.3        Power of Attorney.  If any Member shall have failed or refused, within five (5) calendar days after receipt of a notice from the other Member requesting such Member to execute, acknowledge and deliver such documents, or cause the same to be done, as shall be required to effectuate the provisions of Section 16.1, as applicable, then the other Member may execute, acknowledge and deliver such documents for, on behalf of and in the stead of the other

70

Member or on behalf of and in the name of the Company, as applicable, and such execution, acknowledgment and delivery by that Member shall be for all purposes effective against and binding upon the other Member and the Company, as applicable, as though such execution, acknowledgment and delivery had been by the refusing Member or the Company as applicable. Each Member does hereby irrevocably constitute and appoint each other Member as the true and lawful attorney-in-fact of such appointing Member and the successors and assigns thereof, in the name, place and stead of such appointing Member or the successors or assigns thereof, as the case may be, to execute, acknowledge and deliver such documents under the circumstances contemplated by Section 16.1. It is expressly understood, intended and agreed by each Member, for such Member and its successors and assigns, that the grant of the power of attorney to any other Member pursuant to this Section 16.3 is coupled with an interest, is irrevocable and shall survive the death, dissolution, termination or legal incompetency, as applicable, of such appointing Member, or the assignment of the Interest of such appointing Member, or the dissolution of the Company.

[Signature Page Follows]

71

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth in the introductory paragraph hereof.

72

Appendix A

FORM OF PROPERTY AMENDMENT

Arbors at Harbor Town Apartments

By execution of this Property Amendment and effective as of July       , 2011 (the “Effective Date”), BEHRINGER HARVARD ARBORS, LLC, a Delaware limited liability company (“Owner”), BEHRINGER HARVARD OPPORTUNITY II MANAGEMENT SERVICES, LLC, a Texas limited liability company (“Oversight Manager”), BEHRINGER HARVARD OPPURTUNITY REIT II, INC., a Maryland corporation (“BH Opportunity REIT II”) and BEHRINGER HARVARD OPPORTUNITY OP II LP, a Delaware limited partnership (“BH Opportunity II LP”) agree that the Property described below be added to the Amended and Restated Property Management and Leasing Agreement dated August 13, 2008, between Oversight Manager, BH OP REIT II, and BHOP II LP (the “Management Agreement”) as modified by this Property Amendment.

The following terms shall have the following meanings for purposes of this Property Amendment and the Agreement as it relates to the Property. This Property Amendment may be executed in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Property Amendment to produce or account for more than one such counterpart.  Capitalized terms used in this Property Amendment without definition have the same meanings ascribed to those terms in the Management Agreement.

1

[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]

2

Manager, Owner, BH Opportunity II LP and BH Opportunity REIT II have executed this Property Amendment on the dates set forth below their respective signatures to be effective as of the Effective Date.

3

4

EXHIBIT A to
Property Amendment

for

Arbors at Harbor Town Apartments
Memphis, Tennessee

LEGAL DESCRIPTION

LAND SITUATED IN SHELBY COUNTY, TENNESSEE:

PARCEL I:

AREA 1:

BEING PART OF THE ISLAND PROPERTIES ASSOCIATES PROPERTY IN MEMPHIS, SHELBY COUNTY, TENNESSEE AS DESCRIBED IN INSTRUMENT NUMBER AE 5971, IN THE SHELBY COUNTY REGISTER’S OFFICE IN MEMPHIS, TENNESSEE AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF AUCTION AVENUE (RIGHT-OF-WAY VARIES) AND THE EAST RIGHT-OF-WAY LINE OF ISLAND DRIVE (84 FOOT RIGHT-OF-WAY); THENCE ALONG SAID EAST LINE, N 12 DEGREES 31’ 23” E, 308.35 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID EAST RIGHT-OF-WAY LINE, N 12 DEGREES 31’ 23” E, A DISTANCE OF 217.97 FEET TO A POINT; THENCE ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 30 FEET, AN ARC DISTANCE OF 42.10 FEET TO A POINT OF REVERSE CURVATURE; THENCE ALONG A CURVE TO THE LEFT HAVING A RADIUS OF 153 FEET, AN ARC DISTANCE OF 68.80 FEET TO A POINT OF REVERSE CURVATURE; THENCE ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 7 FEET, AN ARC DISTANCE OF 9.72 FEET TO A POINT OF TANGENCY; THENCE S 33 DEGREES 16’ 20” E, 328.65 FEET TO A POINT OF CURVATURE; THENCE ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 58 FEET, AN ARC DISTANCE OF 46.97 FEET TO A POINT OF REVERSE CURVATURE; THENCE ALONG A CURVE TO THE LEFT HAVING A 58 FOOT RADIUS, AN ARC DISTANCE OF 138.07 FEET TO A POINT; THENCE S 33 DEGREES 16’ 20” E, A DISTANCE OF 150.19 FEET TO A POINT; THENCE S 20 DEGREES 45’ 15” W, A DISTANCE OF 130.42 FEET TO A POINT ON THE NORTH LINE OF LOT 198; THENCE ALONG SAID NORTH LINE, N 69 DEGREES 14’ 45” W, A DISTANCE OF 185.32 FEET TO A POINT AT THE NORTHWEST CORNER OF LOT 198; THENCE ALONG THE WEST LINE OF LOT 198, S 20 DEGREES 45’ 15” W, A DISTANCE OF 63.75 FEET TO A POINT ON THE NORTH LINE OF AUCTION AVENUE; THENCE ALONG SAID NORTH LINE THE FOLLOWING COURSES AND DISTANCES: N 69 DEGREES 14’ 45” W, A DISTANCE OF 90.03 FEET TO A POINT OF CURVATURE; THENCE ALONG A CURVE TO THE RIGHT HAVING A 300 FOOT RADIUS, AN ARC DISTANCE OF 428.14 FEET TO THE POINT OF BEGINNING.

LESS AND EXCEPT THAT PART CONVEYED IN QUIT CLAIM DEED OF RECORD IN INSTRUMENT JM 2856, IN THE REGISTER’S OFFICE, SHELBY COUNTY, TENNESSEE.

AREA 2:

BEING PART OF THE ISLAND PROPERTIES ASSOCIATES PROPERTY IN MEMPHIS, SHELBY COUNTY, TENNESSEE AS DESCRIBED IN INSTRUMENT NUMBER AE 5971, IN THE SHELBY COUNTY REGISTER’S OFFICE IN MEMPHIS, TENNESSEE AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT A POINT 581.77 FEET FROM THE INTERSECTION OF AUCTION AVENUE (RIGHT-OF-WAY VARIES) AND THE EAST RIGHT-OF-WAY LINE OF ISLAND DRIVE (84 FOOT RIGHT-OF-WAY); THENCE ALONG THE CENTERLINE OF HARBOR TOWN CIRCLE ALONG A CURVE TO THE LEFT HAVING A RADIUS OF 125 FEET, AN ARC LENGTH OF 99.43 FEET TO A POINT SAID POINT BEING THE INTERSECTION OF THE CENTERLINE OF HARBOR TOWN CIRCLE AND THE CENTERLINE OF HARBOR EDGE DRIVE (44 FOOT RIGHT-OF-WAY); THENCE ALONG THE CENTERLINE OF HARBOR EDGE DRIVE S 33 DEGREES 16’ 20” E, A DISTANCE OF 152.76 FEET; THENCE N 56 DEGREES 43’ 40” E, A DISTANCE OF 22 FEET TO A POINT ON THE NORTH LINE OF HARBOR EDGE DRIVE SAID POINT BEING THE POINT OF BEGINNING; THENCE N 56 DEGREES 43’ 40” E, A DISTANCE OF 34.73 FEET TO A POINT; THENCE S 77 DEGREES 28’ 37” E, A DISTANCE OF 279.15 FEET TO A POINT; THENCE S 51 DEGREES 53’ 08” E, A DISTANCE OF 45.00 FEET TO A POINT ON THE NORTHWEST LINE OF HARBOR BEND ROAD; THENCE ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 449 FEET, AN ARC DISTANCE OF 145.86 FEET TO A POINT OF TANGENCY; THENCE S 56 DEGREES 43’ 40” W, A DISTANCE OF 68.41 FEET TO A POINT; THENCE ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 32 FEET, AN ARC DISTANCE OF 50.27 FEET TO A POINT OF TANGENCY ON THE NORTHEAST LINE OF HARBOR EDGE DRIVE; THENCE ALONG SAID NORTHEAST LINE N 33 DEGREES 16’ 20” W, A DISTANCE OF 234.24 FEET TO A POINT OF BEGINNING.

AREA 3:

BEING PART OF THE ISLAND PROPERTIES ASSOCIATES PROPERTY AS RECORDED IN INSTRUMENT AE 5971, ALSO BEING PART OF AREA “A” HARBOR TOWN PLANNED DEVELOPMENT OUTLINE PLAN AS RECORDED IN PLAT BOOK 132, PAGE 2, AT THE SHELBY COUNTY REGISTER’S OFFICE LOCATED IN MEMPHIS, TENNESSEE AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT A POINT ON THE CENTERLINE OF AUCTION AVENUE (R.O.W. VARIES) 192.80 FEET EAST OF THE WEST LINE OF ISLAND DRIVE (84’ R.O.W.); THENCE N 20 DEG. 45 MIN. 15 SEC. E A DISTANCE OF 49.94 FEET TO A POINT; THENCE S 69 DEG. 14 MIN. 45 SEC. E A DISTANCE OF 150.00 FEET TO A POINT; THENCE N 20 DEG. 45 MIN. 15 SEC. E A DISTANCE OF 67.75 FEET TO A POINT; THENCE S 69 DEG. 14 MIN. 45 SEC. E A DISTANCE OF 109.62 FEET TO A POINT; THENCE N 14 DEG. 30 MIN. 57 SEC. E A DISTANCE OF 65.24 FEET TO A POINT; THENCE N 53 DEG. 15 MIN. 29 SEC. E A DISTANCE OF 42.96 FEET TO THE POINT OF BEGINNING; THENCE N 20 DEG. 45 MIN. 15 SEC. E A DISTANCE OF 51.63 FEET TO A POINT; THENCE S 33 DEG. 16 MIN. 20 SEC. E A DISTANCE OF 27.79 FEET TO A POINT; THENCE S 53 DEG. 15 MIN. 29 SEC. W A DISTANCE OF 41.86 FEET TO THE POINT OF BEGINNING.

TOGETHER WITH THE FOLLOWING EASEMENTS:

(1) A NONEXCLUSIVE PERPETUAL EASEMENT FOR UTILITIES, DRAINAGE AND INGRESS AND EGRESS TO AND FROM PARCEL I AND ISLAND DRIVE OVER, UPON, ACROSS AND BENEATH THOSE PORTIONS OF HARBOR TOWN CIRCLE, HARBOR EDGE DRIVE AND HARBOR BEND ROAD (PRIVATE DRIVES AS SHOWN ON PLAT OF RECORD IN PLAT BOOK 129, PAGE 73, SAID REGISTER’S OFFICE) THAT ABUT PARCEL I.

(2) A NONEXCLUSIVE PERPETUAL TWENTY-FIVE FOOT (25’) EASEMENT (“EASEMENT I”) FOR INGRESS AND EGRESS TO AND FROM AREA 1 AND HARBOR BEND ROAD OVER THE FOLLOWING DESCRIBED REAL PROPERTY:

BEING PART OF THE ISLAND PROPERTIES ASSOCIATES PROPERTY IN MEMPHIS, SHELBY COUNTY, TENNESSEE AS DESCRIBED IN INSTRUMENT NUMBER AE 5971 IN THE SHELBY COUNTY REGISTER’S OFFICE IN MEMPHIS, TENNESSEE AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT THE INTERSECTION OF THE CENTERLINE OF AUCTION AVENUE (RIGHT-OF-WAY VARIES) AND THE EAST RIGHT-OF-WAY LINE OF ISLAND DRIVE (84 FOOT RIGHT-OF-WAY); THENCE ALONG SAID EAST LINE, N 12 DEGREES 31’ 23” E, 308.35 FEET TO A POINT; THENCE CONTINUING ALONG SAID EAST RIGHT-OF-WAY LINE, N 12 DEGREES 31’ 23” E, A DISTANCE OF 217.97 FEET TO A POINT OF CURVATURE; THENCE ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 30.00 FEET, AN ARC DISTANCE OF 42.10 FEET (CHORD N 52 DEGREES 43’ 46” E 38.73 FEET) TO A POINT OF REVERSE CURVATURE; THENCE ALONG A CURVE TO THE LEFT HAVING A RADIUS OF 153.00 FEET, AN ARC DISTANCE OF 68.80 FEET (CHORD N 80 DEGREES 03’ 11” E 68.22 FEET) TO A POINT OF REVERSE CURVATURE; THENCE ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 7.00 FEET, AN ARC DISTANCE OF 9.72 FEET (CHORD S 73 DEGREES 03’ 04” E 8.96 FEET) TO A POINT OF TANGENCY; THENCE S 33 DEGREES 16’ 20” E, 328.65 FEET TO A POINT OF CURVATURE; THENCE ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 58.00 FEET, AN ARC DISTANCE OF 46.97 FEET (CHORD S 10 DEGREES 04’ 25” E 45.69 FEET) TO A POINT OF REVERSE CURVATURE; THENCE ALONG A CURVE TO THE LEFT HAVING A 58.00 FOOT RADIUS, AN ARC DISTANCE OF 138.07 FEET (CHORD S 55 DEGREES 04’ 25” E 107.70 FEET) TO THE POINT OF BEGINNING; THENCE S 33 DEGREES 16’ 20” E, A DISTANCE OF 150.19 FEET TO A POINT; THENCE S 20 DEGREES 45’ 15” W, A DISTANCE OF 130.42 FEET TO A POINT ON THE NORTH LINE OF LOT 198; THENCE ALONG THE NORTH LINE OF LOT 198 S 69 DEGREES 14’ 45” E A DISTANCE OF 25 FEET TO A POINT; THENCE N 20 DEGREES 45’ 15” E A DISTANCE OF 143.17 FEET TO A POINT; THENCE N 33 DEGREES 16’ 20” W A DISTANCE OF 168.60 FEET TO A POINT ON THE EAST LINE OF HARBOR EDGE DRIVE (44 FOOT PRIVATE DRIVE); THENCE ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 58.00 FEET AN ARC LENGTH OF 25.85 FEET (CHORD S 43 DEGREES 57’ 40” W A DISTANCE OF 25.63 FEET) TO THE POINT OF BEGINNING.

PARCEL II:

BEING PART OF THE ISLAND PROPERTIES ASSOCIATES PROPERTY IN MEMPHIS, SHELBY COUNTY, TENNESSEE AS DESCRIBED IN INSTRUMENT NUMBER AE 5971, IN THE SHELBY COUNTY REGISTER’S OFFICE IN MEMPHIS, TENNESSEE AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT A POINT 3,678.61 FEET FROM THE INTERSECTION OF AUCTION AVENUE (RIGHT-OF-WAY VARIES) AND THE EAST LINE RIGHT OF WAY LINE OF ISLAND DRIVE (84 FOOT RIGHT-OF-WAY); THENCE ALONG THE SOUTH PROPERTY LINE OF JOSEPH L. BAIER TRACT S 82 DEGREES 03’ 54” E A DISTANCE OF 457.63 FEET TO THE POINT OF BEGINNING; THENCE CONTINUING ALONG SAID PROPERTY LINE S 82 DEGREES 03’ 54” E A DISTANCE OF 600 FEET TO A POINT; THENCE S 07 DEGREES 56’ 06” W, A DISTANCE OF 690 FEET TO A POINT; THENCE N 82 DEGREES 03’ 54” W, A DISTANCE OF 600 FEET TO A POINT; THENCE N 07 DEGREES 56’ 06” E A DISTANCE OF 690 FEET TO A POINT OF BEGINNING.

TOGETHER WITH THE FOLLOWING EASEMENTS:

(3) A NONEXCLUSIVE PERPETUAL SIXTY-SIX FOOT (66’) WIDE EASEMENT (“EASEMENT A”) FOR UTILITIES, DRAINAGE AND INGRESS AND EGRESS TO AND FROM PARCEL II AND HARBOR VILLAGE CIRCLE (A PRIVATE DRIVE AS SHOWN ON PLAT OF RECORD IN PLAT BOOK 129, PAGE 73, SAID REGISTER’S OFFICE) OVER, UPON, ACROSS AND BENEATH THE FOLLOWING DESCRIBED REAL PROPERTY:

BEING PART OF THE ISLAND PROPERTIES ASSOCIATES PROPERTY IN MEMPHIS, SHELBY COUNTY, TENNESSEE AS DESCRIBED IN INSTRUMENT NUMBER AE 5971, IN THE SHELBY COUNTY REGISTER’S OFFICE IN MEMPHIS, TENNESSEE AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT A POINT ON THE EAST LINE OF ISLAND DRIVE 3075.85 FEET NORTH OF THE INTERSECTION OF EAST RIGHT-OF-WAY OF ISLAND DRIVE AND THE CENTERLINE OF AUCTION AVENUE; THENCE S 80 DEGREES 46’ 01” E ALONG THE CENTERLINE OF HARBOR VILLAGE CIRCLE A DISTANCE OF 49.56 FEET TO A POINT OF CURVATURE; THENCE CONTINUING ALONG THE CENTERLINE WITH A CURVE TO THE LEFT HAVING A RADIUS OF 76.00 FEET AN ARC LENGTH OF 121.03 FEET (CHORD N 53 DEGREES 36’ 42” E, 108.64 FEET) TO A POINT, SAID POINT BEING THE CENTERLINE OF HARBOR VILLAGE DRIVE; THENCE ALONG THE SAID CENTERLINE S 82 DEGREES 00’ 35” E, A DISTANCE OF 36.37 FEET TO THE POINT OF BEGINNING; THENCE N 07 DEGREES 59’ 25” E, A DISTANCE OF 33.00 FEET TO A POINT IN THE NORTH LINE OF HARBOR VILLAGE DRIVE; THENCE S 82 DEGREES 00’ 35” E A DISTANCE OF 261.10 FEET TO A POINT; THENCE S 07 DEGREES 56’ 06” W, A DISTANCE OF 66 FEET TO A POINT IN THE SOUTH LINE OF HARBOR VILLAGE DRIVE; THENCE N 82 DEGREES 00’ 35” W, A DISTANCE OF 261.15 FEET TO A POINT; THENCE N 07 DEGREES 59’ 25” E A DISTANCE OF 33.00 FEET TO THE POINT OF BEGINNING.

(4) A NONEXCLUSIVE PERPETUAL FORTY-FOUR FOOT (44’) WIDE EASEMENT (“EASEMENT D”) FOR UTILITIES, DRAINAGE AND INGRESS AND EGRESS TO AND FROM PARCEL II AND HARBOR VIEW DRIVE (A PRIVATE DRIVE AS SHOWN ON PLAT OF RECORD IN PLAT BOOK 129, PAGE 73, SAID REGISTER’S OFFICE) OVER, UPON, ACROSS AND BENEATH THE FOLLOWING DESCRIBED REAL PROPERTY:

BEING PART OF THE ISLAND PROPERTIES ASSOCIATES PROPERTY IN MEMPHIS, SHELBY COUNTY, TENNESSEE AS DESCRIBED IN INSTRUMENT NUMBER AE 5971, IN THE SHELBY COUNTY REGISTER’S OFFICE IN MEMPHIS, TENNESSEE AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT A POINT ON THE EAST LINE OF ISLAND DRIVE 3075.85 FEET NORTH OF THE INTERSECTION OF THE EAST RIGHT-OF-WAY LINE OF ISLAND DRIVE AND THE CENTERLINE OF AUCTION AVENUE; THENCE S 80 DEGREES 46’ 01” E ALONG THE CENTERLINE OF HARBOR VILLAGE CIRCLE A DISTANCE OF 49.56 FEET TO A POINT OF CURVATURE; THENCE CONTINUING ALONG THE CENTERLINE WITH A CURVE TO THE LEFT HAVING A RADIUS OF 76.00 FEET AN ARC LENGTH OF 35.63 FEET. (CHORD N 85 DEGREES 48’ 11” E, 35.30 FEET) TO A POINT; THENCE S 33 DEGREES 46’ 30” E, ALONG THE CENTERLINE OF HARBOR VIEW DRIVE (66 FOOT PRIVATE DRIVE) A DISTANCE OF 653.04 FEET TO THE CENTERLINE OF HARBOR BEND ROAD (52 FOOT PRIVATE DRIVE); THENCE N 56 DEGREES 13’ 30” E, ALONG THE CENTERLINE OF SAID ROAD 38.00 FEET TO THE POINT OF BEGINNING; THENCE N 33 DEGREES 46’ 30” W, A DISTANCE OF 26 FEET TO A POINT IN THE WEST LINE OF PROPOSED HARBOR BEND ROAD EXTENSION (52 FOOT PRIVATE DRIVE); THENCE N 56 DEGREES 13’ 30” E ALONG THE WEST LINE OF SAID DRIVE 280.46 FEET TO A POINT; THENCE CONTINUING ALONG SAID PROPOSED DRIVE N 7 DEGREES 59’ 25” E A DISTANCE OF 161.77 FEET TO A POINT; THENCE S 82 DEGREES 03’ 54” E A DISTANCE OF 44.00 FEET TO A POINT IN THE EAST LINE OF SAID PROPOSED DRIVE; THENCE S 7 DEGREES 59’ 25” W A DISTANCE OF 192.24 FEET TO A POINT; THENCE CONTINUING ALONG THE EAST LINE OF SAID PROPOSED PRIVATE DRIVE S 56 DEGREES 13’ 30” W A DISTANCE OF 293.02 FEET TO A POINT; THENCE N 33 DEGREES 46’ 30” W A DISTANCE OF 26 FEET TO THE POINT OF BEGINNING.

(5) A NONEXCLUSIVE PERPETUAL FORTY-FOUR FOOT (44’) WIDE EASEMENT (“EASEMENT E”) FOR UTILITIES, DRAINAGE AND INGRESS AND EGRESS TO AND FROM PARCEL II AND HARBOR VIEW DRIVE, OVER, UPON, ACROSS AND BENEATH THE FOLLOWING REAL PROPERTY:

BEING PART OF THE ISLAND PROPERTIES ASSOCIATES PROPERTY IN MEMPHIS, SHELBY COUNTY, TENNESSEE AS DESCRIBED IN INSTRUMENT NUMBER AE 5971, IN THE SHELBY COUNTY REGISTER’S OFFICE IN MEMPHIS, TENNESSEE AND BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:

COMMENCING AT A POINT ON THE EAST LINE OF ISLAND DRIVE 3075.85 FEET NORTH OF THE INTERSECTION OF THE EAST RIGHT-OF-WAY LINE OF ISLAND DRIVE AND THE CENTERLINE OF AUCTION AVENUE; THENCE S 80 DEGREES 46’ 01” E ALONG THE CENTERLINE OF HARBOR VILLAGE CIRCLE A DISTANCE OF 49.56 FEET TO A POINT OF CURVATURE; THENCE CONTINUING ALONG THE CENTERLINE WITH A CURVE TO THE LEFT HAVING A RADIUS OF 76.00 FEET AN ARC LENGTH OF 121.03 FEET (CHORD N 53 DEGREES 36’ 42” E, 108.64 FEET) TO A POINT SAID POINT BEING THE CENTERLINE OF HARBOR VILLAGE DRIVE; THENCE ALONG THE SAID CENTERLINE S 82 DEGREES 00’ 35” E, A DISTANCE OF 36.37 FEET TO A POINT; THENCE CONTINUING ALONG PROPOSED HARBOR VILLAGE DRIVE CENTERLINE S 82 DEGREES 00’ 35” E A DISTANCE OF 261.13 FEET TO A POINT; THENCE S 07 DEGREES 56’ 06” W, 33 FEET TO THE POINT OF BEGINNING ON THE SOUTH LINE OF PROPOSED HARBOR VILLAGE DRIVE; THENCE ALONG THE EAST LINE OF THE PROPOSED INGRESS-EGRESS EASEMENT S 7 DEGREES 56’ 06” W A DISTANCE OF 156.15 FEET TO A POINT OF CURVATURE; THENCE ALONG A CURVE TO THE RIGHT HAVING A RADIUS OF 122.00 FEET AN ARC LENGTH OF 102.82 FEET (CHORD S 32 DEGREES 04’ 48” W, 99.81 FEET) TO A POINT OF TANGENCY; THENCE S 56 DEGREES 13’ 30” W, A DISTANCE OF 54.38 FEET TO A POINT ON HARBOR VIEW DRIVE (66 FOOT

PRIVATE DRIVE); THENCE N 33 DEGREES 46’ 30” W ALONG HARBOR VIEW DRIVE A DISTANCE OF 44.00 FEET TO A POINT; THENCE N 56 DEGREES 13’ 30” E A DISTANCE OF 49.80 FEET TO A POINT OF CURVATURE; THENCE ALONG A CURVE TO THE LEFT HAVING A RADIUS OF 78.00 FEET AN ARC LENGTH OF 65.74 FEET (CHORD N 32 DEGREES 04’ 48” E 63.81 FEET) TO A POINT OF TANGENCY; THENCE N 7 DEGREES 56’ 06” E A DISTANCE OF 616.52 FEET TO A POINT; THENCE S 82 DEGREES 00’ 54” E A DISTANCE OF 44.00 FEET TO A POINT; THENCE S 7 DEGREES 56’ 06” W A DISTANCE OF 460.36 FEET TO THE POINT OF BEGINNING.

(6) A NONEXCLUSIVE PERPETUAL EASEMENT FOR UTILITIES, DRAINAGE AND INGRESS AND EGRESS TO AND FROM EASEMENT A AND ISLAND DRIVE OVER, UPON, ACROSS AND BENEATH HARBOR VILLAGE CIRCLE.

(7) A NONEXCLUSIVE PERPETUAL EASEMENT FOR UTILITIES, DRAINAGE AND INGRESS AND EGRESS TO AND FROM EASEMENTS D AND E AND ISLAND DRIVE OVER, UPON, ACROSS AND BENEATH THOSE PORTIONS OF HARBOR VIEW DRIVE AND HARBOR VILLAGE CIRCLE LYING BETWEEN SAID EASEMENTS AND ISLAND DRIVE.

BEING THE SAME PROPERTY CONVEYED TO MEMPHIS CENTER CITY REVENUE FINANCE CORPORATION, A PUBLIC NOT-FOR-PROFIT CORPORATION, BY WARRANTY DEED OF RECORD IN INSTRUMENT BR 1144 AND QUIT CLAIM DEED OF RECORD IN INSTRUMENT JM 2855, BOTH IN THE REGISTER’S OFFICE, SHELBY COUNTY, TENNESSEE.

Appendix B

INITIAL APPROVED BUDGET AND BUSINESS PLAN

[Follows]

1

Appendix C

PRE-APPROVED SIGNATORIES

Managing Member:

L. Marc Carter

C. Harris Haston

Amanda Speed

BH:

Gary S. Bresky

Cindy Falls Cooper

Elaine Rainey

Terri Crocker

Stephanie Potter