Exhibit 10.2

 

BEHRINGER HARVARD MULTIFAMILY REIT I, INC.

 

AMENDED AND RESTATED PROPERTY

MANAGEMENT AGREEMENT

 

THIS AMENDED AND RESTATED PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is
made as of (although not necessarily on) the 2nd day of September, 2008, between
BEHRINGER HARVARD MULTIFAMILY REIT I, INC. (the “Company”), a Maryland
corporation, BEHRINGER HARVARD MULTIFAMILY OP I LP (the “OP”), a Delaware
limited partnership and BEHRINGER HARVARD MULTIFAMILY MANAGEMENT SERVICES, LLC,
a Texas limited liability company (“Manager”).

 

WHEREAS, on March 17, 2008 the former manager, HPT MANAGEMENT SERVICES LP, a
Texas limited partnership, and with the consent of the Company and OP, assigned
any and all rights, duties and obligations to the Manager.

 

ARTICLE I

 

Definitions

 

Except as otherwise specified or as the context may otherwise require, the
following terms have the respective meanings set forth below for all purposes of
this Agreement, and the definitions of such terms are equally applicable both to
the singular and plural forms thereof:

 

1.1       “Annual Business Plan” has the meaning set forth in
Section 3.12(a) hereof.

 

1.2       “Approved Leasing Parameters” means parameters established by or
otherwise approved in writing by Owner specifying the manner of the Manager’s
performance of promotional, leasing and management activities required to lease
apartment units in a Project.

 

1.3       “Capital Budget” has the meaning set forth in Section 3.12(a) hereof.

 

1.4       “Controlling Agreements” means articles of incorporation, agreements
of limited partnership, joint venture agreements, operating agreements, loan
agreements, deeds of trust or mortgages, each as may be amended from time to
time, of Owner, as applicable.

 

1.5       “Economic Interest Percentage” means the percentage of capital
contributed directly or indirectly to the Joint Venture as compared with the
total capital contributed to the Joint Venture by all of the owners of the Joint
Venture as such percentage shall be calculated in good faith by the Owner.  For
purposes of defining Economic Interest Percentage, any in-kind contribution
shall be considered in the calculation and valued at the fair market value of
the contribution on the date of contribution as determined by the Owner.

 

1.6       “Governmental Requirements” means applicable ordinances, regulations,
rules, statutes, or laws of governmental entities having jurisdiction over a
Project or the requirements of the board of fire underwriters or other similar
bodies.

 

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1.7       “Gross Revenues” means all amounts actually collected as rents or
other charges for use and occupancy of apartment units and from users of garage
spaces (if any), leases of other non-dwelling facilities in each Project and
concessionaires (if any) in respect of each Project, including furniture rental,
parking fees, forfeited security deposits, application fees, late charges,
income from coin operated machines, proceeds from rental interruption insurance,
and other miscellaneous income collected at each Project; but shall exclude all
other receipts, including but not limited to, income derived from interest on
investments or otherwise, proceeds of claims on account of insurance policies
(other than rental interruption[s] insurance), abatement of taxes, and awards
arising out of eminent domain proceedings, discounts and dividends on insurance
policies.

 

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

 

1.9       “Joint Venture” means an investment in a legal organization formed to
provide for the sharing of the risks and rewards in an enterprise co-owned and
operated for mutual benefit by two or more business partners and established to
acquire or hold properties.

 

1.10     “Losses” means any and all claims, causes of action, demands, suits,
proceedings, loss, judgments, damage, awards, liens, fines, costs, attorney’s
fees and expenses, of every kind and nature whatsoever.

 

1.11     “Management Fee” has the meaning set forth in Section 4.1 hereof.

 

1.12     “Manager Indemnified Parties” has the meaning set forth in
Section 2.5(a) hereof.

 

1.13     “Operating Budget” has the meaning set forth in Section 3.12(a) hereof.

 

1.14     “Oversight Fee” has the meaning set forth in Section 4.1 hereof.

 

1.15     “Owner” means the Company, the OP and any Joint Venture, limited
liability company or other affiliate of the Company or the OP that owns, in
whole or in part, on behalf of the Company, any Projects.

 

1.16     “Project” means, collectively, the apartment communities in which Owner
now owns a direct or indirect equity interest or hereafter acquires a direct or
indirect equity interest.

 

1.17     “Proprietary Property” means all modeling algorithms, tools, computer
programs, know-how, methodologies, processes, technologies, ideas, concepts,
skills, routines, subroutines, operating instructions and other materials and
aides used by Manager in performing its duties set forth in this Agreement that
relate to management advice, services and techniques regarding current and
potential Projects, and all modifications, enhancements and derivative works of
the foregoing.

 

1.18     “Submanager” has the meaning set forth in Section 6.1 hereof.

 

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

 

ARTICLE II

 

Engagement of Manager and Rental Responsibility

 

2.1       Engagements.  Subject to the restrictions of this Section 2.1, Owner
hereby engages Manager to manage the Project, and Manager accepts such
engagement and agrees to perform the services set forth herein.  Such engagement
shall not commence with respect to any particular Project until Owner, in its
sole discretion, has the ability to appoint or hire the Manager.  Further, Owner
may elect to exclude any Project from the terms of this Agreement upon written
notice to Manager delivered by Owner within ten (10) days following the later of
(i) Owner’s acquisition of a direct or indirect equity interest in such Project
or (ii) the date on which Owner, in its sole discretion, has the ability to
appoint or hire the Manager with respect to such Project.  Owner has the right
to include any previously excluded Project ten (10) days following delivery of
written notice from Owner to Manager.  Notwithstanding the foregoing, Manager
shall be entitled to an Oversight Fee pursuant to Section 4.1 with respect to
any Project excluded from the terms of this Agreement, but only after Owner, in
its sole discretion, has the ability to appoint or hire the Manager for such
Project.

 

2.2       Status of Manager; Limitation on Authority.  Manager shall act under
this Agreement as an independent contractor and not as Owner’s agent or
employee.  Manager shall not have the right, power or authority to enter into
agreements or incur liability on behalf of Owner except as expressly set forth
herein.  Any personnel hired by Manager to maintain, operate and/or lease each
Project shall be the employees or independent contractors of Manager and not of
Owner.  Manager shall use due care in the selection and supervision of such
employees or independent contractors, who shall be duly qualified and licensed,
as necessary.  Any action taken by Manager which is not expressly permitted by
this Agreement shall not bind Owner.

 

2.3       Leasing of Premises.  Manager shall perform promotional, leasing and
management activities required to lease apartment units in the Project in
accordance with the Approved Leasing Parameters.  Throughout the term of this
Agreement, Manager shall use its diligent efforts to lease apartment units in
the Project.  Subject to reimbursement by Owner, Manager shall advertise the
Project, or portions thereof, prepare and secure advertising signs, space plans,
circular matter, marketing brochures and other forms of advertising.  Manager is
authorized to advertise the Project in conjunction with general advertising
campaigns and to allocate the cost of such campaigns on a pro rata basis among
the projects being advertised (to the extent authorized by the Annual Business
Plan).  All inquiries for any leases or renewals or agreements for the rental of
the Project or portions thereof shall be referred to Manager and all
negotiations connected therewith shall be conducted solely by or under the
direction of Manager in accordance with the parameters established by or
otherwise approved in writing by Owner.  Manager is hereby authorized to
execute, deliver and renew leases on behalf of Owner including, but not limited
to tenant and commercial leases (such as laundry room leases) in accordance with
the Approved Leasing Parameters.  Manager is authorized to utilize the services
of apartment locator services and pay compensation of duly qualified and
licensed leasing personnel responsible for the leasing of each Project; the fees
for such services shall be operating expenses of the Project and, to the extent
paid by Manager, reimbursable to Manager by Owner to the extent set forth in the
applicable Annual Business Plan.

 

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2.4       Manager’s Standard of Care.  In performing Manager’s duties under this
Agreement, Manager shall exercise the same degree of care, prudence, and skill
as other professional property managers of similar properties in the area.  In
no event shall Manager be liable to Owner for any loss or damage, unless caused
by the misconduct and/or negligence of the Manager, its agents, servants, or
employees.

 

2.5       Compliance With Laws; Environmental Matters.

 

(a)           Owner assumes all responsibility as to the compliance of the
Project with all laws applicable to the Project.  Owner agrees to defend and
indemnify and hold harmless Manager and its members, officers, directors,
employees, managers, successors and assigns (collectively, the “Manager
Indemnified Parties”) from and against any and all Losses arising out of any
violation, breach or failure of the Project to comply with any or all state or
federal laws applicable to the Project, except for any violations caused by the
misconduct and/or negligence of the Manager, its agents, servants, or employees.

 

(b)           Owner hereby warrants and represents to Manager that to the best
of Owner’s knowledge, no Project, upon acquisition of an interest therein by
Owner, nor any part thereof, will be used to treat, deposit, store, dispose of
or place any hazardous substance that may subject Manager to liability or claims
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (42 U.S.C.A. Section 9607) or any constitutional provision, statute,
ordinance, law, or regulation of any governmental body or of any order or ruling
of any public authority or official thereof, having or claiming to have
jurisdiction thereover.  Furthermore, Owner agrees to indemnify, protect,
defend, save and hold harmless Manager and all of the other Manager Indemnified
Parties from any and all Losses involving, concerning or in any way related to
any past, current or future allegations regarding treatment, depositing,
storage, disposal or placement by any duly qualified and licensed person or
entity other than Manager of hazardous substances on any Project.

 

2.6       Treatment Under Texas Margin Tax.  For purposes of the Texas margin
tax, Manager’s performance of the services specified in this Agreement will
cause Manager to conduct part of the active trade or business of Owner, and
Manager’s compensation includes both the payment of fees due pursuant to
Section 4.1 and the reimbursement of specified costs incurred in Manager’s
conduct of the active trade or business of the Owner.  Therefore, Owner and
Manager intend Manager to be, and shall treat Manager as, a “management company”
within the meaning of Section 171.0001(11) of the Texas Tax Code.  Owner and
Manager will apply Sections 171.1011(m-1) and 171.1013(f)-(g) of the Texas Tax
Code to Owner’s reimbursements paid to Manager pursuant to this Agreement of
specified costs and allocable wages and compensation.  Owner and Manager further
recognize and intend that as a result of the relationship created by this
Agreement, reimbursements paid to Manager pursuant to this Agreement include
(i) “flow-though funds” that Manager is mandated by law or fiduciary duty to
distribute, within the meaning of Section 171.1011(f) of the Texas Tax Code, and
(ii) “flow-through funds” that Manager is mandated by contract to distribute,
within the meaning of Section 171.1011(g).  The terms of this Agreement shall be
interpreted in a manner consistent with the characterization of the Manager as a
“management company” as defined in Section 171.0001(11), and with the
characterization of the reimbursements as “flow-though funds” within the meaning
of Section 171.1011(f)-(g) of the Texas Tax Code.

 

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ARTICLE III

Services to be Performed by Manager

 

3.1       Expense of Owner.  All acts performed by Manager in the performance of
its obligations under this Agreement shall be performed on behalf of Owner, and
all obligations or expenses incurred thereby, if included in the Annual Business
Plan or otherwise approved in writing by Owner, shall be for the account of, on
behalf of, and at the expense of Owner, except as otherwise specifically
provided in this Article III.  Owner shall not be obligated to reimburse Manager
for any expense allocable to (i) time spent on projects other than the Project,
or (ii) any personnel other than personnel located at the Project site and
personnel spending a portion of their working hours (to be charged on a pro rata
basis) at the Project site or in specifically performing Manager’s obligations
hereunder, whether on or off the Project site.  Manager may use employees
normally assigned to other work centers or part-time employees to properly staff
the Project, whose wages and related expenses shall be reimbursed on a pro rata
basis for the time actually spent at or for the Project to the extent set forth
in the applicable Annual Business Plan.  Owner shall reimburse to Manager the
costs and expenses incurred by Manager on Owner’s behalf including the wages and
salaries and other employee-related expenses and benefits of all on-site and
affiliate employees of Manager who are engaged in the operation, management,
maintenance and leasing or access of a Project, including taxes, insurance and
benefits relating to such employees, costs of technology related to the
Projects, including computers, telephone systems and property management and
accounting software and any upgrades or conversions thereof, and legal, travel
and other out-of-pocket expenses directly related to the management of a
Project, provided that such items are reflected in the Annual Business Plan. 
Owner acknowledges that the following miscellaneous expenses, when incurred with
respect to the performance of Manager’s obligations under this Agreement, shall
be reimbursable to Manager by Owner (which list of expenses is not intended to
be all-inclusive) to the extent set forth in the applicable Annual Business
Plan: courier services, postage, photocopies, signage, check printing, marketing
expenses, bank charges, telephone and answering service (which may be allocated
on a pro rata basis among the Project and other projects managed by Manager). 
All reimbursable payments made by Manager hereunder shall be reimbursed by Owner
from funds deposited in an account established pursuant to Section 5.2 of this
Agreement.  Manager shall not be obligated to make any advance to or for the
account of Owner or to pay any sums, except out of funds held in an account
maintained under Section 5.2, nor shall Manager be obligated to incur any
liability or obligation for the account of Owner without assurance that the
necessary funds for the discharge thereof will be provided by Owner.  All debts
and liabilities to third persons incurred by Manager in the course of its
operation and management of the Project shall be the debts and liabilities of
the Owner only, and Manager shall not be liable for any such debt or
liabilities, except to the extent Manager has exceeded its authority hereunder. 
Manager may sub-contract any or all of its responsibilities hereunder, but Owner
shall look to Manager for the performance of such responsibilities in accordance
with this Agreement and Manager shall be solely responsible for paying the fees
and expenses of any duly qualified and licensed person or entity to which it
sub-contracts its responsibilities hereunder, except as otherwise agreed in
writing between Owner and Manager.

 

3.2       Covenants Concerning Payment of Operating Expenses.  Owner covenants
to pay all sums for operating expenses in excess of gross receipts required to
operate the Project in accordance with the Annual Business Plan upon written
notice and demand from Manager within ten (10) days after receipt of such
written notice.  Owner further recognizes that the Project may be operated in
conjunction with other properties, and costs may be allocated or shared between
such other properties on a more efficient or less expensive basis.  In such
regard, Owner consents to the allocation of costs and/or the sharing of any
expenses in an effort to save costs or operate the Project in a more efficient
manner so long as such allocation is done on an equitable basis and so long as
the computations of such allocations are provided to Owner for its approval
pursuant to Section 3.12 hereof.

 

3.3       Employment of Personnel.  Manager shall use its diligent efforts to
investigate, hire, pay, supervise and discharge duly qualified and licensed
personnel necessary to be employed by it to properly maintain, operate and lease
the Project, including without limitation, a property manager or

 

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business manager at the Project.  Owner has no right of supervision or direction
of agents or employees of the Manager whatsoever.  All Owner directives shall be
communicated to Manager’s senior level management employees.  Manager and all
personnel of Manager who handle or who are responsible for handling Owner’s
monies shall be duly qualified and licensed, bonded under a fidelity bond or a
crime/employee dishonesty insurance policy or equivalent in favor of Owner. 
Manager shall furnish such fidelity bond/insurance policy at Manager’s sole
expense and shall provide Owner Two Million Dollars ($2,000,000.00) per
occurrence coverage with no more than a Ten Thousand Dollar ($10,000.00)
deductible.  Manager shall execute and file when due all forms, reports, and
returns required by law relating to the employment of its personnel.

 

3.4       Utility and Service Contracts.  Manager shall make, at Owner’s expense
and in Owner’s name or in Manager’s name, as an authorized representative for
Owner, contracts for water, electricity, gas, fuel, oil, telephone, vermin
extermination, trash removal, cable television, security protection and other
services deemed by Manager to be necessary or advisable for the operation of the
Project.  Manager shall also place orders in the name of Owner for such
equipment, tools, appliances, materials, and supplies as are reasonable and
necessary to properly maintain the Project.  Manager may make such contracts and
place such orders in Owner’s name or in its own name, as Owner’s authorized
representative.  In addition, Owner agrees to specifically assume in writing all
obligations under all such contracts so entered into by Manager, on behalf of
Owner, upon the termination of this Agreement, and Owner shall indemnify,
protect, save, defend and hold harmless Manager and the other Manager
Indemnified Parties harmless from and against any and all Losses resulting from,
arising out of or in any way related to such contracts and that relate to or
concern matters occurring after termination of this Agreement, but excluding
matters arising out of the misconduct and/or negligence of the Manager, its
agents, servants, or employees.  Owner agrees to pay or reimburse Manager for
all expenses and liabilities incurred in accordance with this Section 3.4.

 

3.5       Maintenance and Repair of a Project.  Manager shall use its diligent
efforts to maintain, at Owner’s expense, the buildings, appurtenances and
grounds of the Project in good condition and repair and in accordance with
standards established by Owner in writing from time to time, including interior
and exterior cleaning, painting and decorating, plumbing, carpentry and such
other normal maintenance and repair work as may be reasonably desirable taking
into consideration the amount allocated therefore in the Annual Business Plan. 
With respect to any expenditure not contemplated by the Annual Business Plan,
Manager shall not incur any individual item for repair or replacement in excess
of Five Thousand Dollars ($5,000.00) unless authorized in writing by Owner,
excepting, however, that emergency repairs immediately necessary for the
preservation and safety of the Project or to avoid the suspension of any service
to the Project or danger of injury to persons or damage to property may be made
by Manager upon written notice to Owner, but without the approval of Owner. 
Manager shall not be obligated by this Section to perform any major capital
improvements.

 

3.6       Supervision of Capital Improvements or Major Repairs.  When requested
by the Owner or set forth in an Annual Business Plan, Manager, at Owner’s
expense and in Owner’s name, shall supervise the installation and construction
of all capital improvements or major repairs to the Project where such work
constitutes other than normal maintenance and repair, for additional
compensation as set forth in a separate agreement between Owner and Manager.  In
such events, Manager may negotiate contracts with all contractors,
subcontractors, materialmen, suppliers, architects, and engineers approved by
Owner, on behalf of, and in the name of, Owner, and may compromise and settle
any dispute or claim arising therefrom on behalf of and in the name of Owner;
provided only that the Manager shall act in good faith and in the best interest
of the Owner at all times.  Manager will furnish all personnel necessary for
proper supervision of the work and may assign personnel located at the Project
to such supervisory work (and such assignment shall not reduce or abate any
other fees or compensation owed to Manager under this Agreement).

 

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3.7       Controlling Agreements.  Manager has received copies of (and will be
provided with copies of future) Controlling Agreements and is and will be
familiar with the terms thereof.  Manager shall use reasonable care to avoid any
act or omission that, in the performance of its duties hereunder, shall in any
way conflict with the terms of Controlling Agreements.

 

3.8       Insurance and Indemnification.

 

(a)           Insurance to be Carried.

 

(i)            Manager shall obtain and keep in full force and effect insurance
on the Project against such hazards as Owner and Manager shall deem appropriate,
but in any event insurance sufficient to comply with the leases and other
agreements with respect to the Project and the Controlling Agreements shall be
maintained.  All liability policies shall provide sufficient insurance
satisfactory to both Owner and Manager and shall contain waivers of subrogation
for the benefit of Manager.

 

(ii)           Manager shall obtain and keep in full force and effect, in
accordance with the laws of the state in which such Project is located, workers’
compensation and employer’s liability insurance applicable to and covering all
employees of Manager at the Project and all persons engaged in the performance
of any work required hereunder, and Manager shall furnish Owner certificates of
insurance evidencing that such insurance is in effect.  If any work under this
Agreement is subcontracted as permitted herein, Manager shall include in each
subcontract a provision that the subcontractor shall also furnish Owner with
such a certificate.

 

(b)           Insurance Expenses.  Premiums and other expenses of such
insurance, as well as any applicable payments in respect of deductibles, shall
be borne by Owner.

 

(c)           Cooperation with Insurers.  Manager shall cooperate with and
provide reasonable access to the Project to representatives of insurance
companies and insurance brokers or agents with respect to insurance that is in
effect or for which application has been made.  Manager shall use its best
efforts to comply with all requirements of insurers.

 

(d)           Accidents and Claims.  Manager shall promptly investigate and
shall report in detail to Owner all accidents and claims for damage relating to
the ownership, operation or maintenance of the Project, and any damage or
destruction to the Project and the estimated costs of repair thereof, and shall
prepare for approval by Owner all reports required by an insurance company in
connection with any such accident, claim, damage, or destruction.  Such reports
shall be given to Owner promptly, and shall be noted in the monthly reports
delivered to Owner pursuant to Section 3.14 below.  Manager is authorized to
settle any claim against an insurance company arising out of any policy and, in
connection with such claim, to execute proofs of loss and adjustments of loss
and to collect and receipt for loss proceeds.

 

(e)           Indemnification.

 

(i)            On Termination.  In the event this Agreement is terminated for
any reason prior to the expiration of its original term or any renewal term,
Owner shall indemnify, protect, defend, save and hold harmless Manager and all
of the other Manager Indemnified Parties from and against any and all Losses
that may be imposed on or incurred by reason of the willful misconduct, gross
negligence and/or unlawful acts (such

 

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unlawfulness having been adjudicated by a court of proper jurisdiction) of
Owner, its agents, servants, or employees.

 

(ii)           Property Damage and Injury to Person.  Owner agrees to indemnify,
defend, protect, save and hold harmless Manager and all of the other Manager
Indemnified Parties from any and all Losses in connection with or in any way
related to each Project and from liability for damage to each Project and
injuries to or death of any person whomsoever, and damage to property; provided,
however, that such indemnification and exculpation shall not extend to any such
Losses arising out of the misconduct and/or negligence of Manager, its agents,
servants, or employees; provided, further, that such indemnification and
exculpation shall be limited to the extent that Manager recovers insurance
proceeds with respect to such matter.  Manager shall not be liable for any error
of judgment or for any mistake of fact or law, or for any thing that it may do
or refrain from doing, except in cases of misconduct and/or negligence.  Manager
agrees to indemnify, defend, protect, save and hold harmless Owner and its
stockholders, officers, directors, employees, managers, successors and assigns
from any and all claims or liability for any injury or damage to any person or
property whatsoever for which Manager is responsible occurring in, on, or about
the Project when such injury or damage shall be caused by the willful
misconduct, gross negligence and/or unlawful acts (such unlawfulness having been
adjudicated by a court of proper jurisdiction) of Manager, its agents, servants,
or employees, except to the extent that Owner recovers insurance proceeds with
respect to such matter.

 

(iii)          Limitations.  Notwithstanding anything to the contrary in this
Agreement, any indemnification and exculpation by the Owner under this Agreement
is subject to any limitations imposed under the Company’s Articles of
Incorporation or any amendments thereto.

 

3.9       Collection of Monies.  Manager shall use its diligent efforts to
collect all rents and other charges due from tenants, users of garage spaces (if
any), storage spaces, commercial lessees (if any) and concessionaires (if any)
in respect of the Project and otherwise due Owner with respect to the Project in
the ordinary course of business, provided that Manager does not guarantee the
creditworthiness of any tenants, users, lessees, concessionaires or
collectibility of accounts receivable from any of the foregoing.  Owner
authorizes Manager to request, demand, collect, receive and provide a receipt
for all such rent and other charges and to institute legal proceedings in the
name of Owner, and at Owner’s expense, for the collection thereof, and for the
dispossession of tenants and other persons from the Project or to cancel or
terminate any lease, license or concession agreement for breach or default
thereunder, and such expense may include the engaging of legal counsel approved
by Owner in writing for any such matter.  All monies collected by Manager shall
be deposited in the separate bank account referred to in Section 5.2 herein.

 

3.10         Manager Disbursements.

 

(a)           Manager shall, from the funds collected and deposited, cause to be
disbursed regularly and punctually (1) Manager’s compensation, together with all
sales or other taxes (other than income) which Manager is obligated, presently
or in the future, to collect and pay to any applicable governmental authority,
(2) the amounts reimbursable to Manager under this Agreement, (3) the amount of
all real estate taxes and other impositions levied by appropriate authorities
which, if not escrowed with any mortgagee, shall be paid upon specific written
direction of Owner before interest begins to accrue thereon, (4) debt service
related to any mortgages of the Project; and (5) amounts otherwise due and
payable as operating expenses of the Project authorized to be incurred under the
terms of this Agreement.

 

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After (i) making disbursements as herein specified and (ii) establishing a cash
reserve to pay taxes, insurance, and/or other costs and expenses incidental to
the operation of the Project, including nonrecurring emergency repairs and
capital expenditures which shall become due and payable within the succeeding
calendar month and for which the cash to make such payments may not be generated
by operations during such period, any balance remaining at the end of each
calendar month during the term of this Agreement shall be disbursed or
transferred as generally or specifically directed from time to time by Owner.

 

(b)           All costs, expenses, debts and liabilities owed to third persons
that are incurred by Manager pursuant to the terms of this Agreement and in the
course of managing, leasing and operating the Project shall be the
responsibility of Owner and not Manager.  Owner agrees to provide sufficient
working capital funds to Manager so that all amounts due and owing may be
promptly paid by Manager.  Manager is not obligated to advance any funds.  As of
the first day of each month of this Agreement, Manager will project the cash
requirements for such month and (if it shall reasonably determine that
collections will be insufficient to meet such cash requirements) request the
necessary additional funds from the Owner, which funds will be deposited with
the Manager in the segregated bank account referred to in Section 5.2 on or
before ten (10) days following the receipt of such request.  If at any month
end, the bank balance exceeds the projected cash requirements, such excess shall
be returned to the Owner within five days.  If at any time there is not
sufficient cash in the account with which to promptly pay the bills due and
owing, the Manager will request that the necessary additional funds be deposited
in an amount sufficient to create an operating reserve pursuant to Section 5.4. 
Owner will deposit the additional funds requested by the Manager within five
(5) days following the receipt of such request.

 

3.11     Use and Maintenance of Premises.  Manager agrees that it will not
knowingly permit the use of the Project for any purpose which might void any
policy of insurance held by Owner or which might render any loss thereunder
uncollectible, or which would be in violation of any government restriction or
any covenant or restriction of any lease of the Project.  Manager shall use its
good faith efforts to secure substantial compliance by the tenants with the
terms and conditions of their respective leases.

 

3.12     Annual Business Plan.

 

(a)           On or before October 1 of each calendar year during the term of
this Agreement, Manager shall prepare and submit to Owner for Owner’s approval,
an “Annual Business Plan” for the Project for the promotion, leasing,
operations, repair and maintenance of the Project for each calendar year during
which this Agreement is in effect.  The Annual Business Plan shall include a
detailed budget of projected income and expenses for the Project for such
calendar year (the “Operating Budget”) and a detailed budget of projected
capital improvements for the Project for such calendar year (the “Capital
Budget”).  Within 30 days following the purchase of a Project by Owner, after
the approval of the Annual Business Plan for such calendar year, Manager shall
prepare and submit to Owner a comparable business plan for such Project and
Manager and Owner must follow the procedure set forth in (b) below with respect
to approving any such additional business plan.

 

(b)           Manager shall meet with Owner to discuss the proposed Annual
Business Plan and Owner shall notify Manager with respect to the approval or
disapproval of the proposed Annual Business Plan within 20 days following the
receipt of the Annual Business Plan.  Any notice which disapproves a proposed
Annual Business Plan must contain specific objections in reasonable detail.  If
Owner fails to provide approval of a proposed Annual Business Plan within such
20 day period, the proposed Annual Business Plan shall be deemed to be
disapproved and the Annual Business Plan in effect for the previous calendar
year shall remain in effect until Owner approves a new Annual Business Plan

 

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for such Project.  Owner acknowledges that the Operating Budget is intended only
to be a reasonable estimate of the Project’s income and expenses for the ensuing
calendar year.  Manager shall not be deemed to have made any guarantee, warranty
or representation whatsoever in connection with the Operating Budget.

 

(c)           Manager may revise the Operating Budget from time to time, as
necessary, to reflect any unpredicted significant changes, variables or events
or to include significant additional, unanticipated items of revenue and
expense.  Any such revision shall be subject to the prior written approval of
Owner.

 

(d)           Manager agrees to use diligence and to employ all reasonable
efforts to ensure that the actual costs of maintaining and operating the Project
shall not exceed the Operating Budget which is a part of the approved Annual
Business Plan either in total or in any one accounting category.  Any expense
causing or likely to cause a variance of greater than ten percent (10%) or
$2,000, whichever is greater, in any one accounting category on a cumulative
year-to-date basis shall be promptly explained to Owner by Manager in the next
monthly report submitted by Manager to Owner under Section 3.14(a) below. 
During the calendar year Manager shall inform Owner of any major increases or
decreases in costs, expenses, and income that were not reflected in the Annual
Business Plan.

 

3.13     Records.  Manager shall maintain all office records and books of
account and shall record therein, and keep copies of, each invoice received from
services, work and supplies ordered in connection with the maintenance and
operation of the Project.  Such records shall be maintained on a double entry
basis.  Owner and persons designated by Owner shall at all reasonable times have
access to and the right to audit and make independent examinations of such
records, books and accounts and all vouchers, files and all other material
pertaining to the Project and this Agreement, all of which Manager agrees to
keep safe, available and separate from any records not pertaining to the
Project, at a place recommended by Manager and approved by Owner.

 

3.14     Financial Reports.

 

(a)           Monthly Reports.  On or before the 10th day after the end of each
month during the term of this Agreement, Manager shall prepare and submit to
Owner the following reports and statements:

 

(i)            rental collection record;

 

(ii)           monthly operating and cash flow statement;

 

(iii)          copy of cash disbursements ledger entries for such period, if
requested;

 

(iv)          copy of cash receipts ledger entries for such period, if
requested;

 

(v)           the original copies of all contracts entered into by Manager on
behalf of Owner during such period, if requested; and

 

(vi)          copy of ledger entries for such period relating to security
deposits maintained by Manager, if requested.

 

In addition to the above, Manager shall deliver to Owner such other reports and
statements as are reasonably requested by Owner.

 

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(b)           Annual Report.  Within 60 days after the end of each calendar year
of the Project, Manager shall deliver to Owner a statement showing the results
of operations for the calendar year or portion thereof during which the
provisions of this Agreement were in effect.  Manager shall cooperate with and
submit to Owner at such times as may be required (monthly or annually, as
applicable) such other information, reports or statements requested by Owner
regarding the Project or as may be necessary to comply with any reporting
requirements of Owner or prepare any balance sheets, operating statements or
disclosure statements which may be required to be prepared or filed by Owner.

 

(c)           Returns Required by Law.  Manager shall execute and file
punctually when due all forms, reports and returns required by law relating to
the employment of personnel.

 

3.15     Compliance with Legal Requirements.  Manager shall execute and file
when due all forms, reports, and returns required by law relating to the
employment of its personnel.  Manager shall promptly, and in no event later than
72 hours from the time of receipt, notify Owner in writing of all notices of
violation or other notices relating the Project from any governmental authority,
board of fire underwriters or insurance company, and shall make such
recommendations regarding compliance with such notice as shall be appropriate. 
Manager shall be responsible for notifying Owner in the event it receives notice
that any improvement on the Project or any equipment therein does not comply
with the requirements of any statute, ordinance, law or regulation of any
governmental body or of any public authority or official thereof having or
claiming to have jurisdiction thereover.  Manager shall promptly forward to
Owner any complaints, warnings, notices or summonses received by it relating to
such matters.  Owner represents that to the best of its knowledge each of the
Project and any equipment thereon will upon acquisition by Owner comply with all
such requirements.  Owner authorizes Manager to disclose the ownership of each
Project by Owner to any such officials.  Owner agrees to indemnify, protect,
defend, save and hold harmless Manager and the other Manager Indemnified Parties
from and against any and all Losses that may be imposed on them or any or all of
them by reason of the failure of Owner to correct any present or future
violation or alleged violation of any and all present or future laws,
ordinances, statutes, or regulations of any public authority or official
thereof, having or claiming to have jurisdiction thereover, of which it has
actual notice.

 

Owner acknowledges that Manager does not hold itself out to be an expert or
consultant with respect to, or represent that, the Project currently complies
with Governmental Requirements.  Manager shall take such action as may be
reasonably necessary to comply with any Governmental Requirements applicable to
Manager, including the collection and payment of all sales and other taxes
(other than income taxes) which may be assessed or charged by any governmental
entities in the state in which the Project is located in connection with
Manager’s compensation (set forth in Article IV below).  If Manager discovers
the Project does not comply with any Governmental Requirements, Manager shall
take such action as may be reasonably necessary to bring the Project into
compliance with such Governmental Requirements, subject to the limitation
contained in Section 3.5 of this Agreement regarding the making of alterations
and repairs.  Manager, however, shall not take any such action as long as Owner
is contesting or has affirmed its intention to contest and promptly institute
proceedings contesting any such order or requirement.  If, however, failure to
comply promptly with any such order or requirement would or might expose Manager
to civil or criminal liability, Manager shall have the right, but not the
obligation, to cause the same to be complied with and Owner agrees to indemnify
and hold harmless Manager and the other Manager Indemnified Parties from and
against any and all Losses that may be imposed on them or any or all for taking
such actions and to promptly reimburse Manager for expenses incurred thereby. 
The Manager also shall not be liable for any effort or judgment or for any
mistake of fact of law, or for anything which it may do or refrain from doing
hereinafter, except in cases of misconduct and/or negligence of Manager, its
agents, servants, or employees.

 

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3.16     Dealings with Advisor.  Unless Owner specifically informs Manager to
the contrary, Behringer Harvard Multifamily Advisors I LP, or its successor as
advisor to the Company, may perform any of the obligations or exercise any of
the rights of Owner under this Agreement.

 

3.17     Branding.  Manager shall maintain and administer for Owner the
standards of branding established by Behringer Harvard Holdings, LLC with
respect to all billboards, signage and uniforms.

 

3.18     Risk Management.  Manager shall provide to Owner risk management
services, including, but not limited to, the following: assisting and providing
ways to mitigate, minimize, control, and transfer risk through the prudent use
of risk management, insurance programs and recommendations of safety and loss
control techniques; selecting and managing insurance brokers and service
products; preparing underwriting data for use in marketing insurance programs;
negotiating and placing insurance and related services; serving as liaison for
insurance brokers and monitoring insurance premium invoices for accuracy;
managing and settling loss control and insurance claims; consulting and
coordinating  insurance requirements for financing properties; reviewing and
monitoring sub-contractor certificates of insurance; and consulting regarding
insurance verbiage requirements for leases and contracts.

 

3.19     Real Estate Tax Management.  Manager shall provide to Owner tax
management services with respect to the Properties, including, but not limited
to, the following: coordinating payment of real estate taxes; contesting real
estate taxes, as Manager deems appropriate; accounting for all bills to be
processed at any given installment, and following up on missing bills; data
entry of tax amounts and equalized values when available; providing copies of
documents as requested (including following up on cancelled checks, monitoring
payment by third parties, communicating with interested parties and forwarding
tax bills to purchasers and other parties as necessary).

 

3.20     Technology Use and Support.  Manager shall utilize the software and
technology platforms that it believes are appropriate in connection with
fulfilling its duties under this Agreement.  In addition, Manager shall provide
technical support and maintenance with respect to any technology used in the
maintenance, operation, management and leasing of properties.

 

ARTICLE IV

Manager’s Compensation, Term

 

4.1       Management Fee.  Commencing on the date hereof, Owner shall pay
Manager a monthly management fee (“Management Fee”) equal to three and
three-quarters percent (3-3/4%) of Gross Revenues for each Project for such
month payable monthly in arrears.  Certain of these Projects may be owned by
Joint Ventures.  When the Manager is not paid by the Joint Venture directly in
respect of its services, the applicable Management Fee or Oversight Fee to be
paid by the Owner will be calculated by multiplying the Management Fee or
Oversight Fee by the Economic Interest Percentage owned directly or indirectly
by the Owner in such Project. In the event that Owner contracts directly with a
third-party property manager not affiliated with the Manager in respect of a
Project for which the Owner, in its sole discretion, has the ability to appoint
or hire the Manager, Owner shall pay Manager an oversight fee (“Oversight Fee”)
equal to one-half of one percent (0.50%) of Gross Revenues of such Project.  In
no event will Owner pay both a Management Fee and an Oversight Fee to Manager
with respect to any Project.  If Manager subcontracts its responsibilities
hereunder to another person or entity, Manager shall be solely responsible for
the payment to such third party.  The Management Fee includes the reimbursement
of the specified cost incurred by the Manager of engaging another person or
entity to perform Manager’s responsibilities hereunder; provided, however, that
Manager shall be responsible for

 

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payment of all such amounts to such third parties.  Nothing herein shall prevent
Manager from entering fee-splitting arrangements with third parties with respect
to the Management Fee.

 

4.2       Term  This Agreement commenced as of November 22, 2006, and shall
thereafter continue for a period of two years from said commencement date,
unless otherwise terminated as provided herein.  If no party gives written
notice to the other at least thirty (30) days prior to the expiration date
hereof that this Agreement is to terminate, then this Agreement shall
automatically continue thereafter for consecutive two-year periods until
terminated by any party by written notice given at least 30 days in advance of
such termination.  Provided, however, that in the event the Company terminates
its advisory management agreement with Behringer Harvard Multifamily Advisors I
LP, Manager, upon at least thirty (30) days prior written notice, shall have the
right to terminate this Agreement.  In addition, and notwithstanding the
foregoing, Owner may terminate this Agreement (i) at any time upon delivery of
written notice to Manager not less than thirty (30) days prior to the effective
date of termination, in the event of (and only in the event of) a showing by
Owner of willful misconduct, gross negligence or deliberate malfeasance of the
Manager, its agents, servants or employees in the performance of Manager’s
duties hereunder and (ii) immediately upon the occurrence of any of the
following:

 

(a)           A decree or order is rendered by a court having jurisdiction
(i) adjudging Manager as bankrupt or insolvent, or (ii) approving as properly
filed a petition seeking reorganization, readjustment, arrangement, composition
or similar relief for Manager under the federal bankruptcy laws or any similar
applicable law or practice, or (iii) appointing a receiver or liquidator or
trustee or assignee in bankruptcy or insolvency of Manager or a substantial part
of the property of Manager, or for the winding up or liquidating of its affairs;
or

 

(b)           Manager (i) institutes proceedings to be adjudicated a voluntary
bankrupt or an insolvent, (ii) consents to the filing of a bankruptcy proceeding
against it, (iii) files a petition or answer or consent seeking reorganization,
readjustment, arrangement, composition or relief under any similar applicable
law or practice, (iv) consents to the filing of any such petition, or to the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy or
insolvency for it or for a substantial part of its property, (v) makes an
assignment for the benefit of creditors, (vi) is unable to or admits in writing
its inability to pay its debts generally as they become due unless such
inability shall be the fault of the other party, or (iv) takes corporate or
other action in furtherance of any of the aforesaid purposes; or

 

(c)           With respect to any particular Project, the sale of such Project.

 

If Owner shall materially breach its obligations hereunder, and such breach
remains uncured for a period of 10 days after written notification of such
breach, then Manager may terminate this Agreement by giving written notice to
Owner and Owner agrees to pay Manager the fees due to Manager pursuant to
Section 4.1  for the unexpired portion of the term.

 

4.3       Manager’s Obligations Upon Termination.  Upon the termination of this
Agreement, Manager shall have the following duties:

 

(a)           Manager shall deliver to Owner or its designee, all books and
records with respect to the Project.

 

(b)           Manager shall transfer and assign to Owner, or its designee, all
service contracts and personal property relating to or used in the operation and
maintenance of the Project, except personal

 

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property paid for and owned by Manager.  Manager shall also, for a period of
sixty (60) days immediately following the date of such termination, make itself
available to consult with and advise Owner, or its designee, regarding the
operation, maintenance and leasing of the Project.

 

(c)           Manager shall render to Owner an accounting of all funds of Owner
in its possession and shall deliver to Owner a statement of all fees and
reimbursements claimed to be due to Manager and shall cause funds of Owner held
by Manager relating to the Project to be paid to Owner or its designee.

 

(d)           Within sixty (60) days immediately following the date of such
termination, Manager shall deliver to Owner the report required by
Section 3.14(a) for any period not covered by such a report at the time of
termination, and within sixty (60) days immediately following the date of such
termination, Manager shall deliver to Owner, as required by Section 3.14(b), the
statement of operations for the fiscal year or portion thereof ending on the
date of termination.

 

4.4       Owner’s Obligations Upon Termination.  Upon any termination of this
Agreement by Owner other than under clause (i) of the introductory paragraph to
Section 4.2, Manager shall be entitled to receive all compensation and
reimbursements, if any, due to Manager through the date of termination.  Such
amounts will be due Manager no later than 30 days from the date of such
termination.  All provisions of this Agreement that require Owner to have
insured, or to protect, defend, save, hold and indemnify or to reimburse Manager
shall survive any expiration or termination of this Agreement, but only to the
extent the applicable claim or cause of action is based on an event occurring
prior to the date of termination.

 

The parties understand and agree that Manager may withhold funds for sixty (60)
days after the end of the month in which this Agreement is terminated to pay
bills previously incurred but not yet invoiced and to close accounts. Should the
funds withheld be insufficient to meet the obligation of Manager to pay bills
previously incurred, Owner will, upon demand, advance sufficient funds to
Manager to ensure fulfillment of Manager’s obligation to do so, within ten
(10) days of receipt of notice and an itemization of such unpaid bills.

 

ARTICLE V

Procedures for Handling Receipts and Operating Capital

 

5.1       Security Deposits.  Tenant security deposits shall be held by Manager
in accordance with the laws of the jurisdiction in which the Project is
located.  Owner agrees to indemnify and hold harmless Manager and the other
Manager Indemnified Parties from and against any and all Losses with respect to
any use by Owner of the tenant security deposits that is inconsistent with the
terms of the lease and applicable laws.

 

5.2       Separation of Owner’s Monies.  Manager shall establish and maintain,
in a bank of Manager’s choice whose deposits are insured by the Federal Deposit
Insurance Corporation, and in a manner to indicate the custodial nature thereof,
a separate bank account for the deposit of all monies of Owner.  Manager shall
also establish such other special bank accounts as may be reasonably required by
Owner.  All monies deposited from time to time in these accounts shall be deemed
trust funds and shall be and remain the property of Owner and shall be withdrawn
and dispersed by Manager for the account of Owner only as expressly permitted by
this Agreement for the purposes of performing the obligations of

 

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Manager hereunder.  No monies collected by Manager on Owner’s behalf shall be
commingled with the funds of Manager.

 

5.3       Depository Accounts.  Owner and Manager agree that Manager shall have
no liability for loss of funds of Owner contained in the bank accounts for the
Project maintained by Manager pursuant to this Agreement due to insolvency of
the bank or financial institution in which its accounts are kept, whether or not
the amounts in such accounts exceed the maximum amount of federal or other
deposit insurance applicable with respect to the financial institution in
question.

 

5.4       Working Capital.  In addition to the funds derived from the operation
of the Project, Owner shall furnish and maintain in the operating accounts of
the Project such other funds as may be necessary to discharge financial
commitments required to efficiently operate the Project and to meet all payrolls
and satisfy, before delinquency, and to discharge all accounts payable.  Manager
shall have no responsibility or obligation with respect to the furnishing of any
such funds.  Nevertheless, Manager shall have the right, but not the obligation,
to advance funds or contribute property on behalf of Owner to satisfy
obligations of Owner in connection with this Agreement and the Project.  Manager
shall keep appropriate records to document all reimbursable expenses paid by
Manager, which records shall be made available for inspection by Owner or its
agents on request.  Owner agrees to reimburse Manager upon demand for money paid
or property contributed in connection with the Project and this Agreement.

 

5.5       Authorized Signatures.  Any persons from time to time designated by
Manager shall be authorized signatories on all bank accounts established by
Manager pursuant to this Agreement and shall have authority to make
disbursements from such accounts.  Funds may be withdrawn from all bank accounts
established by Manager, in accordance with this Article V, only upon the
signature of an individual who has been granted that authority by Manager and
funds may not be withdrawn from such accounts by Owner unless Manager is in
default hereunder.

 

ARTICLE VI

Miscellaneous

 

6.1       Assignment.  Manager may delegate partially or in full its duties and
rights under this Agreement but only with the prior written consent of Owner. 
Owner acknowledges and agrees that any or all of the duties of Manager as
contained herein may be delegated by Manager and performed by a person or entity
(“Submanager”) with whom Manager contracts for the purpose of performing such
duties.  Owner specifically grants Manager the authority to enter into such a
contract with a Submanager; provided that, unless Owner otherwise agrees in
writing with such Submanager, Owner shall have no liability or responsibility to
any such Submanager for the payment of the Submanager’s fee or for reimbursement
to the Submanager of its expenses or to indemnify the Submanager in any manner
for any matter; and provided further that Manager shall require such Submanager
to agree, in the written agreement setting forth the duties and obligations of
such Submanager, to indemnify Owner for all Losses incurred by Owner as a result
of the willful misconduct or gross negligence of the Submanager, except that
such indemnity shall not be required to the extent that Owner recovers issuance
proceeds with respect to such matter.  Any contract entered into between Manager
and a Submanager pursuant to this Section 6.1 shall be consistent with the
provisions of this Agreement, except to the extent Owner otherwise specifically
agrees in writing.  This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.

 

6.2       Non-Solicitation.  During the period commencing on the date on which
this Agreement is entered into and ending one year following the termination of
this Agreement, the Company and OP shall not, without the Manager’s prior
written consent, directly or indirectly, (i) solicit or encourage any

 

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person to leave the employment or other service of the Manager or any of its
affiliates, or (ii) hire, on behalf of the Company or OP or any other person or
entity, any person who has left the employment of the Manager or any of its
affiliates within the one-year period following the termination of that person’s
employment with the Manager or any of its affiliates.  During the period
commencing on the date hereof through and ending one year following the
termination of this Agreement, the Company and OP will not, whether for its or
their own account or for the account of any other person, firm, corporation or
other business organization, intentionally interfere with the relationship of
the Manager or any of its affiliates with, or endeavor to entice away from the
Manager or any of its affiliates, any person who during the term of this
Agreement is, or during the preceding one-year period was, a tenant,
co-investor, co-developer, joint venturer or other customer of the Manager or
any of its affiliates.

 

6.3       Notices.  All notices required or permitted by this Agreement shall be
in writing and shall be sent by registered or certified mail, addressed in the
case of Owner to 15601 Dallas Parkway, Suite 600, Addison, Texas 75001, and in
the case of Manager to 15601 Dallas Parkway, Suite 600, Addison, Texas 75001, or
to such other address as shall, from time to time, have been designated by
written notice by either party given to the other party as herein provided.

 

6.4       Entire Agreement.  This Agreement shall constitute the entire
agreement between the parties hereto and no modification thereof shall be
effective unless in writing executed by the parties hereto.

 

6.5       No Partnership.  Nothing contained in this Agreement shall constitute
or be construed to be or create a partnership or joint venture between the
Owner, its successors or assigns, on the one part, and Manager, its successors
and assigns, on the other part.

 

6.6       Severability.  If any one or more of the provisions of this Agreement,
or the applicability of any such provision to a specific situation shall be held
invalid or unenforceable, such provision should be modified to the minimum
extent necessary to make it or its application valid and enforceable, and the
validity and enforceability of all other provisions of this Agreement and all
other applications of such provisions shall not be affected thereby.

 

6.7            No Third Party Beneficiary.  Neither this Agreement nor any part
hereof nor any service relationship shall inure to the benefit of any third
party, to any trustee in bankruptcy, to any assignee for the benefit of
creditors, to any receiver by reason of insolvency, to any other fiduciary or
officer representing a bankrupt or insolvent estate of either party, or to the
creditors or claimants of such an estate.  Without limiting the generality of
the foregoing sentence, it is specifically understood and agreed that insolvency
or bankruptcy of either party hereto shall, at the option of the other party,
void all rights of such insolvent or bankrupt party hereunder (or so many of
such rights  as the other party shall elect to void).

 

6.8            Captions, Plural Terms.  Unless the context clearly requires
otherwise, the singular number herein shall include the plural, the plural
number shall include the singular and any gender shall include all genders. 
Titles and captions herein shall not affect the construction of this Agreement.

 

6.9            Attorneys’ Fees.  Should either party employ an attorney to
enforce any of the provisions of this Agreement, or to recover damages for
breach of this Agreement, the non-prevailing party in any action agrees to pay
to the prevailing party all reasonable costs, damages and expenses, including
reasonable attorneys’ fees, expended or incurred by the prevailing party in
connection therewith.

 

6.10          Signs.  Manager shall have the right to place signs on the Project
in accordance with applicable Governmental Requirements stating that Manager is
the manager and leasing agent for the Project.

 

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6.11          Survival of Indemnities.  The indemnification obligations of the
parties to this Agreement shall survive the termination of this Agreement to the
extent of any claim or cause of action based on an event occurring prior to the
date of termination.

 

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

 

6.13          Governing Law, Venue.  This Agreement shall be construed under and
in accordance with the laws of the State of Texas and is fully performable in
Dallas County, Texas.

 

6.14          Counterparts.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original.

 

6.15          Savings Clause.  If any provision of this Agreement is held
unenforceable, then such provision will be modified to reflect the parties’
intention. By way of example and without limitation, if any provision requiring
the reimbursement of certain of the Manager’s expenses should be deemed
unenforceable, the parties shall take such action to reach an agreement for
Owner to pay such reimbursable expenses.  All remaining provisions of this
Agreement shall remain in full force and effect.

 

[REST OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly
executed by their duly authorized representatives.

 

“OWNER”

“MANAGER”

 

 

BEHRINGER HARVARD MULTIFAMILY
REIT I, INC.

BEHRINGER HARVARD MULTIFAMILY
MANAGEMENT SERVICES, LLC

 

 

 

 

By:

/s/ Gerald J. Reihsen, III

 

By:

/s/ Gerald J. Reihsen, III

 

Gerald J. Reihsen, III

 

Gerald J. Reihsen, III

 

Executive Vice President – Corporate
Development and Legal

 

Executive Vice President – Corporate
Development and Legal

 

 

 

 

 

 

BEHRINGER HARVARD MULTIFAMILY
OP I LP

 

 

 

By:

BHMF, Inc., its General Partner

 

 

 

 

 

 

By:

/s/ Gerald J. Reihsen, III

 

 

 

Gerald J. Reihsen, III

 

 

Executive Vice President –
Corporate Development and Legal

 

 

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