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.


 

















 


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 


 


7

















 


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 


 


9

















 


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.


 


10

















 


(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.


 


11

















 


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 


 


12

















 


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 


 


13

















 


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 


 


14

















 


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 


 


15

















 


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.


 


16

















 


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]


 


17

















 


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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