**Exhibit 10.2**

 

**BEHRINGER HARVARD MULTIFAMILY REIT I, INC.**

 

**AMENDED AND RESTATED PROPERTY**

**MANAGEMENT AGREEMENT**

 

THIS AMENDED AND RESTATED PROPERTYMANAGEMENT AGREEMENT (this “**Agreement**”) is made as of (although not necessarilyon) the 2nd day of September, 2008, between BEHRINGER HARVARD MULTIFAMILY REITI, INC. (the “**Company**”), a Marylandcorporation, BEHRINGER HARVARD MULTIFAMILY OP I LP (the “**OP**”),a Delaware limited partnership and BEHRINGER HARVARD MULTIFAMILY MANAGEMENTSERVICES, LLC, a Texas limited liability company (“**Manager**”).

 

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

 

ARTICLE I

 

Definitions

 

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

 

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

 

1.2       “**ApprovedLeasing Parameters**” means parameters established by or otherwiseapproved in writing by Owner specifying the manner of the Manager’s performanceof promotional, leasing and management activities required to lease apartmentunits in a Project.

 

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

 

1.4       “**ControllingAgreements**” means articles of incorporation, agreements oflimited partnership, joint venture agreements, operating agreements, loanagreements, deeds of trust or mortgages, each as may be amended from time totime, of Owner, as applicable.

 

1.5       “**EconomicInterest Percentage**” means****the percentageof capital contributed directly or indirectly to the Joint Venture as comparedwith the total capital contributed to the Joint Venture by all of the owners ofthe Joint Venture as such percentage shall be calculated in good faith by theOwner.  For purposes of defining EconomicInterest Percentage, any in-kind contribution shall be considered in thecalculation and valued at the fair market value of the contribution on the dateof contribution as determined by the Owner.

 

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

 

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1.7       “**GrossRevenues**” means all amounts actually collected as rents or othercharges for use and occupancy of apartment units and from users of garagespaces (if any), leases of other non-dwelling facilities in each Project andconcessionaires (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 interruptioninsurance, and other miscellaneous income collected at each Project; but shallexclude all other receipts, including but not limited to, income derived frominterest on investments or otherwise, proceeds of claims on account ofinsurance policies (other than rental interruption[s] insurance), abatement oftaxes, and awards arising out of eminent domain proceedings, discounts anddividends on insurance policies.

 

1.8       “**IntellectualProperty Rights**” means all rights, titles and interests, whetherforeign or domestic, in and to any and all trade secrets, confidentialinformation rights, patents, invention rights, copyrights, service marks,trademarks, know-how, or similar intellectual property rights and allapplications and rights to apply for such rights, as well as any and all moralrights, rights of privacy, publicity and similar rights and license rights ofany type under the laws or regulations of any governmental, regulatory, orjudicial authority, foreign or domestic and all renewals and extensionsthereof.

 

1.9       “**JointVenture**” means an investment in a legal organization formed toprovide for the sharing of the risks and rewards in an enterprise co-owned andoperated for mutual benefit by two or more business partners and established toacquire 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     “**ManagementFee**” has the meaning set forth in Section 4.1 hereof.

 

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

 

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

 

1.14     “**OversightFee**” 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 orother affiliate of the Company or the OP that owns, in whole or in part, onbehalf of the Company, any Projects.

 

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

 

1.17     “**ProprietaryProperty**” means all modeling algorithms, tools, computerprograms, know-how, methodologies, processes, technologies, ideas, concepts,skills, routines, subroutines, operating instructions and other materials andaides used by Manager in performing its duties set forth in this Agreement thatrelate to management advice, services and techniques regarding current andpotential Projects, and all modifications, enhancements and derivative works ofthe foregoing.

 

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

 

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1.19     “**Texas TaxCode**” means the Texas Tax Code as amended by Texas H.B. 3, 79thLeg., 3rd C.S. (2006), and reference to any provision of the TexasTax Code Act shall mean such provision as in effect from time to time, as thesame may be amended, and any successor provision thereto, as interpreted by anyapplicable 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 suchengagement and agrees to perform the services set forth herein.  Such engagement shall not commence withrespect to any particular Project until Owner, in its sole discretion, has theability to appoint or hire the Manager. Further, Owner may elect to exclude any Project from the terms of thisAgreement upon written notice to Manager delivered by Owner within ten (10) daysfollowing the later of (i) Owner’s acquisition of a direct or indirectequity interest in such Project or (ii) the date on which Owner, in itssole discretion, has the ability to appoint or hire the Manager with respect tosuch Project.  Owner has the right toinclude any previously excluded Project ten (10) days following deliveryof written notice from Owner to Manager. Notwithstanding the foregoing, Manager shall be entitled to an OversightFee pursuant to Section 4.1 with respect to any Project excluded from theterms of this Agreement, but only after Owner, in its sole discretion, has theability to appoint or hire the Manager for such Project.

 

2.2       Status of Manager;Limitation on Authority.  Managershall act under this Agreement as an independent contractor and not as Owner’sagent or employee.  Manager shall nothave the right, power or authority to enter into agreements or incur liabilityon 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 independentcontractors of Manager and not of Owner. Manager shall use due care in the selection and supervision of suchemployees or independent contractors, who shall be duly qualified and licensed,as necessary.  Any action taken byManager which is not expressly permitted by this Agreement shall not bindOwner.

 

2.3       Leasing of Premises.  Manager shall perform promotional, leasingand management activities required to lease apartment units in the Project inaccordance with the Approved Leasing Parameters.  Throughout the term of this Agreement,Manager shall use its diligent efforts to lease apartment units in theProject.  Subject to reimbursement byOwner, Manager shall advertise the Project, or portions thereof, prepare andsecure advertising signs, space plans, circular matter, marketing brochures andother forms of advertising.  Manager isauthorized to advertise the Project in conjunction with general advertisingcampaigns and to allocate the cost of such campaigns on a *pro rata*basis among the projects being advertised (to the extent authorized by theAnnual Business Plan).  All inquiries forany leases or renewals or agreements for the rental of the Project or portionsthereof shall be referred to Manager and all negotiations connected therewithshall be conducted solely by or under the direction of Manager in accordancewith 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 totenant and commercial leases (such as laundry room leases) in accordance withthe Approved Leasing Parameters.  Manageris authorized to utilize the services of apartment locator services and paycompensation of duly qualified and licensed leasing personnel responsible forthe leasing of each Project; the fees for such services shall be operatingexpenses of the Project and, to the extent paid by Manager, reimbursable toManager by Owner to the extent set forth in the applicable Annual BusinessPlan.

 

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2.4       Manager’s Standard ofCare.  In performing Manager’s dutiesunder this Agreement, Manager shall exercise the same degree of care, prudence,and skill as other professional property managers of similar properties in thearea.  In no event shall Manager beliable to Owner for any loss or damage, unless caused by the misconduct and/ornegligence of the Manager, its agents, servants, or employees.

 

2.5       Compliance With Laws;Environmental Matters.

 

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

 

(b)           Ownerhereby warrants and represents to Manager that to the best of Owner’sknowledge, no Project, upon acquisition of an interest therein by Owner, norany part thereof, will be used to treat, deposit, store, dispose of or placeany hazardous substance that may subject Manager to liability or claims underthe Comprehensive Environmental Response, Compensation and Liability Act of1980 (42 U.S.C.A. Section 9607) or any constitutional provision, statute,ordinance, law, or regulation of any governmental body or of any order orruling of any public authority or official thereof, having or claiming to havejurisdiction thereover.  Furthermore,Owner agrees to indemnify, protect, defend, save and hold harmless Manager andall of the other Manager Indemnified Parties from any and all Losses involving,concerning or in any way related to any past, current or future allegationsregarding treatment, depositing, storage, disposal or placement by any dulyqualified and licensed person or entity other than Manager of hazardoussubstances on any Project.

 

2.6       Treatment Under TexasMargin Tax.  For purposes of theTexas margin tax, Manager’s performance of the services specified in thisAgreement will cause Manager to conduct part of the active trade or business ofOwner, and Manager’s compensation includes both the payment of fees duepursuant to Section 4.1 and the reimbursement of specified costs incurredin Manager’s conduct of the active trade or business of the Owner.  Therefore, Owner and Manager intend Managerto be, and shall treat Manager as, a “management company” within the meaning ofSection 171.0001(11) of the Texas Tax Code.  Owner and Manager will apply Sections171.1011(m-1) and 171.1013(f)-(g) of the Texas Tax Code to Owner’sreimbursements paid to Manager pursuant to this Agreement of specified costsand allocable wages and compensation. Owner and Manager further recognize and intend that as a result of therelationship created by this Agreement, reimbursements paid to Manager pursuantto this Agreement include (i) “flow-though funds” that Manager is mandatedby law or fiduciary duty to distribute, within the meaning of Section 171.1011(f) ofthe Texas Tax Code, and (ii) “flow-through funds” that Manager is mandatedby contract to distribute, within the meaning of Section 171.1011(g).  The terms of this Agreement shall beinterpreted in a manner consistent with the characterization of the Manager asa “management company” as defined in Section 171.0001(11), and with thecharacterization of the reimbursements as “flow-though funds” within themeaning of Section 171.1011(f)-(g) of the Texas Tax Code.

 

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ARTICLE III

Services to be Performedby Manager

 

3.1       Expense of Owner.  All acts performed by Manager in theperformance of its obligations under this Agreement shall be performed onbehalf of Owner, and all obligations or expenses incurred thereby, if includedin the Annual Business Plan or otherwise approved in writing by Owner, shall befor the account of, on behalf of, and at the expense of Owner, except as otherwisespecifically provided in this Article III. Owner shall not be obligated to reimburse Manager for any expenseallocable to (i) time spent on projects other than the Project, or (ii) anypersonnel other than personnel located at the Project site and personnelspending a portion of their working hours (to be charged on a *pro rata* basis) at the Project site or in specificallyperforming Manager’s obligations hereunder, whether on or off the Projectsite.  Manager may use employees normallyassigned to other work centers or part-time employees to properly staff theProject, whose wages and related expenses shall be reimbursed on a *pro rata* basis for the time actually spent at or for theProject to the extent set forth in the applicable Annual Business Plan.  Owner shall reimburse to Manager the costsand expenses incurred by Manager on Owner’s behalf including the wages andsalaries and other employee-related expenses and benefits of all on-site andaffiliate employees of Manager who are engaged in the operation, management,maintenance and leasing or access of a Project, including taxes, insurance andbenefits relating to such employees, costs of technology related to theProjects, including computers, telephone systems and property management andaccounting software and any upgrades or conversions thereof, and legal, traveland other out-of-pocket expenses directly related to the management of aProject, provided that such items are reflected in the Annual BusinessPlan.  Owner acknowledges that the followingmiscellaneous expenses, when incurred with respect to the performance ofManager’s obligations under this Agreement, shall be reimbursable to Manager byOwner (which list of expenses is not intended to be all-inclusive) to theextent set forth in the applicable Annual Business Plan: courier services,postage, photocopies, signage, check printing, marketing expenses, bankcharges, telephone and answering service (which may be allocated on a *pro rata* basis among the Project and other projects managedby Manager).  All reimbursable paymentsmade by Manager hereunder shall be reimbursed by Owner from funds deposited inan account established pursuant to Section 5.2 of this Agreement.  Manager shall not be obligated to make anyadvance to or for the account of Owner or to pay any sums, except out of fundsheld in an account maintained under Section 5.2, nor shall Manager beobligated to incur any liability or obligation for the account of Owner withoutassurance that the necessary funds for the discharge thereof will be providedby Owner.  All debts and liabilities tothird persons incurred by Manager in the course of its operation and managementof the Project shall be the debts and liabilities of the Owner only, and Managershall not be liable for any such debt or liabilities, except to the extentManager 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 inaccordance with this Agreement and Manager shall be solely responsible forpaying the fees and expenses of any duly qualified and licensed person orentity to which it sub-contracts its responsibilities hereunder, except asotherwise agreed in writing between Owner and Manager.

 

3.2       Covenants ConcerningPayment of Operating Expenses.  Ownercovenants to pay all sums for operating expenses in excess of gross receiptsrequired to operate the Project in accordance with the Annual Business Planupon written notice and demand from Manager within ten (10) days afterreceipt of such written notice.  Ownerfurther recognizes that the Project may be operated in conjunction with otherproperties, and costs may be allocated or shared between such other propertieson a more efficient or less expensive basis. In such regard, Owner consents to the allocation of costs and/or thesharing of any expenses in an effort to save costs or operate the Project in amore efficient manner so long as such allocation is done on an equitable basisand so long as the computations of such allocations are provided to Owner forits approval pursuant to Section 3.12 hereof.

 

3.3       Employment ofPersonnel.  Manager shall use itsdiligent efforts to investigate, hire, pay, supervise and discharge dulyqualified and licensed personnel necessary to be employed by it to properlymaintain, operate and lease the Project, including without limitation, aproperty manager or 

 

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businessmanager at the Project.  Owner has noright of supervision or direction of agents or employees of the Managerwhatsoever.  All Owner directives shallbe communicated to Manager’s senior level management employees.  Manager and all personnel of Manager whohandle or who are responsible for handling Owner’s monies shall be dulyqualified and licensed, bonded under a fidelity bond or a crime/employeedishonesty insurance policy or equivalent in favor of Owner.  Manager shall furnish such fidelitybond/insurance policy at Manager’s sole expense and shall provide Owner TwoMillion Dollars ($2,000,000.00) per occurrence coverage with no more than a TenThousand Dollar ($10,000.00) deductible. Manager shall execute and file when due all forms, reports, and returnsrequired by law relating to the employment of its personnel.

 

3.4       Utility and ServiceContracts.  Manager shall make, atOwner’s expense and in Owner’s name or in Manager’s name, as an authorizedrepresentative for Owner, contracts for water, electricity, gas, fuel, oil,telephone, vermin extermination, trash removal, cable television, securityprotection and other services deemed by Manager to be necessary or advisablefor 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 toproperly maintain the Project.  Managermay make such contracts and place such orders in Owner’s name or in its ownname, as Owner’s authorized representative. In addition, Owner agrees to specifically assume in writing allobligations under all such contracts so entered into by Manager, on behalf ofOwner, upon the termination of this Agreement, and Owner shall indemnify,protect, save, defend and hold harmless Manager and the other Manager IndemnifiedParties harmless from and against any and all Losses resulting from, arisingout of or in any way related to such contracts and that relate to or concernmatters occurring after termination of this Agreement, but excluding mattersarising out of the misconduct and/or negligence of the Manager, its agents,servants, or employees.  Owner agrees topay or reimburse Manager for all expenses and liabilities incurred inaccordance with this Section 3.4.

 

3.5       Maintenance andRepair of a Project.  Manager shalluse its diligent efforts to maintain, at Owner’s expense, the buildings,appurtenances and grounds of the Project in good condition and repair and inaccordance 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 bereasonably desirable taking into consideration the amount allocated thereforein the Annual Business Plan.  Withrespect to any expenditure not contemplated by the Annual Business Plan,Manager shall not incur any individual item for repair or replacement in excessof Five Thousand Dollars ($5,000.00) unless authorized in writing by Owner,excepting, however, that emergency repairs immediately necessary for thepreservation and safety of the Project or to avoid the suspension of anyservice to the Project or danger of injury to persons or damage to property maybe made by Manager upon written notice to Owner, but without the approval ofOwner.  Manager shall not be obligated bythis Section to perform any major capital improvements.

 

3.6       Supervision ofCapital 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 theinstallation and construction of all capital improvements or major repairs tothe Project where such work constitutes other than normal maintenance andrepair, for additional compensation as set forth in a separate agreementbetween Owner and Manager.  In suchevents, Manager may negotiate contracts with all contractors, subcontractors,materialmen, suppliers, architects, and engineers approved by Owner, on behalfof, and in the name of, Owner, and may compromise and settle any dispute orclaim arising therefrom on behalf of and in the name of Owner; provided onlythat the Manager shall act in good faith and in the best interest of the Ownerat all times.  Manager will furnish allpersonnel necessary for proper supervision of the work and may assign personnellocated at the Project to such supervisory work (and such assignment shall notreduce or abate any other fees or compensation owed to Manager under thisAgreement).

 

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

 

3.8       Insurance andIndemnification.

 

(a)           Insuranceto be Carried.

 

(i)            Manager shallobtain and keep in full force and effect insurance on the Project against suchhazards as Owner and Manager shall deem appropriate, but in any event insurancesufficient to comply with the leases and other agreements with respect to theProject and the Controlling Agreements shall be maintained.  All liability policies shall providesufficient insurance satisfactory to both Owner and Manager and shall containwaivers of subrogation for the benefit of Manager.

 

(ii)           Manager shallobtain and keep in full force and effect, in accordance with the laws of thestate in which such Project is located, workers’ compensation and employer’sliability insurance applicable to and covering all employees of Manager at theProject and all persons engaged in the performance of any work requiredhereunder, and Manager shall furnish Owner certificates of insurance evidencingthat such insurance is in effect.  If anywork under this Agreement is subcontracted as permitted herein, Manager shallinclude in each subcontract a provision that the subcontractor shall alsofurnish Owner with such a certificate.

 

(b)           InsuranceExpenses.  Premiums and otherexpenses of such insurance, as well as any applicable payments in respect ofdeductibles, shall be borne by Owner.

 

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

 

(d)           Accidentsand Claims.  Manager shall promptlyinvestigate and shall report in detail to Owner all accidents and claims fordamage relating to the ownership, operation or maintenance of the Project, andany damage or destruction to the Project and the estimated costs of repairthereof, and shall prepare for approval by Owner all reports required by aninsurance company in connection with any such accident, claim, damage, ordestruction.  Such reports shall be givento Owner promptly, and shall be noted in the monthly reports delivered to Ownerpursuant to Section 3.14 below. Manager is authorized to settle any claim against an insurance companyarising out of any policy and, in connection with such claim, to execute proofsof 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 forany reason prior to the expiration of its original term or any renewal term,Owner shall indemnify, protect, defend, save and hold harmless Manager and allof the other Manager Indemnified Parties from and against any and all Lossesthat may be imposed on or incurred by reason of the willful misconduct, grossnegligence and/or unlawful acts (such 

 

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unlawfulnesshaving been adjudicated by a court of proper jurisdiction) of Owner, itsagents, servants, or employees.

 

(ii)           Property Damageand Injury to Person.  Owner agreesto indemnify, defend, protect, save and hold harmless Manager and all of theother Manager Indemnified Parties from any and all Losses in connection with orin any way related to each Project and from liability for damage to eachProject and injuries to or death of any person whomsoever, and damage toproperty; provided, however, that such indemnification and exculpation shallnot extend to any such Losses arising out of the misconduct and/or negligenceof Manager, its agents, servants, or employees; provided, further, that suchindemnification and exculpation shall be limited to the extent that Managerrecovers insurance proceeds with respect to such matter.  Manager shall not be liable for any error ofjudgment or for any mistake of fact or law, or for any thing that it may do orrefrain 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 orliability for any injury or damage to any person or property whatsoever forwhich Manager is responsible occurring in, on, or about the Project when suchinjury or damage shall be caused by the willful misconduct, gross negligenceand/or unlawful acts (such unlawfulness having been adjudicated by a court ofproper jurisdiction) of Manager, its agents, servants, or employees, except tothe extent that Owner recovers insurance proceeds with respect to such matter.

 

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

 

3.9       Collection of Monies.  Manager shall use its diligent efforts tocollect all rents and other charges due from tenants, users of garage spaces(if any), storage spaces, commercial lessees (if any) and concessionaires (ifany) in respect of the Project and otherwise due Owner with respect to theProject in the ordinary course of business, provided that Manager does notguarantee the creditworthiness of any tenants, users, lessees, concessionairesor 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 andto institute legal proceedings in the name of Owner, and at Owner’s expense,for the collection thereof, and for the dispossession of tenants and otherpersons from the Project or to cancel or terminate any lease, license orconcession agreement for breach or default thereunder, and such expense mayinclude the engaging of legal counsel approved by Owner in writing for any suchmatter.  All monies collected by Managershall be deposited in the separate bank account referred to in Section 5.2herein.

 

3.10         Manager Disbursements.

 

(a)           Managershall, from the funds collected and deposited, cause to be disbursed regularlyand punctually (1) Manager’s compensation, together with all sales orother taxes (other than income) which Manager is obligated, presently or in thefuture, to collect and pay to any applicable governmental authority, (2) theamounts reimbursable to Manager under this Agreement, (3) the amount ofall real estate taxes and other impositions levied by appropriate authoritieswhich, if not escrowed with any mortgagee, shall be paid upon specific writtendirection of Owner before interest begins to accrue thereon, (4) debtservice related to any mortgages of the Project; and (5) amounts otherwisedue and payable as operating expenses of the Project authorized to be incurredunder the terms of this Agreement.

 

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After (i) making disbursements as herein specified and (ii) establishinga cash reserve to pay taxes, insurance, and/or other costs and expensesincidental to the operation of the Project, including nonrecurring emergencyrepairs and capital expenditures which shall become due and payable within thesucceeding calendar month and for which the cash to make such payments may notbe generated by operations during such period, any balance remaining at the endof each calendar month during the term of this Agreement shall be disbursed ortransferred as generally or specifically directed from time to time by Owner.

 

(b)           Allcosts, expenses, debts and liabilities owed to third persons that are incurredby Manager pursuant to the terms of this Agreement and in the course ofmanaging, leasing and operating the Project shall be the responsibility ofOwner and not Manager.  Owner agrees toprovide sufficient working capital funds to Manager so that all amounts due andowing may be promptly paid by Manager. Manager is not obligated to advance any funds.  As of the first day of each month of thisAgreement, Manager will project the cash requirements for such month and (if itshall reasonably determine that collections will be insufficient to meet suchcash requirements) request the necessary additional funds from the Owner, whichfunds will be deposited with the Manager in the segregated bank accountreferred to in Section 5.2 on or before ten (10) days following thereceipt of such request.  If at any monthend, the bank balance exceeds the projected cash requirements, such excessshall be returned to the Owner within five days.  If at any time there is not sufficient cashin the account with which to promptly pay the bills due and owing, the Managerwill request that the necessary additional funds be deposited in an amountsufficient to create an operating reserve pursuant to Section 5.4.  Owner will deposit the additional fundsrequested by the Manager within five (5) days following the receipt ofsuch request.

 

3.11     Use and Maintenance ofPremises.  Manager agrees that itwill not knowingly permit the use of the Project for any purpose which mightvoid any policy of insurance held by Owner or which might render any lossthereunder uncollectible, or which would be in violation of any governmentrestriction or any covenant or restriction of any lease of the Project.  Manager shall use its good faith efforts tosecure substantial compliance by the tenants with the terms and conditions oftheir respective leases.

 

3.12     Annual Business Plan.

 

(a)           Onor before October 1 of each calendar year during the term of thisAgreement, Manager shall prepare and submit to Owner for Owner’s approval, an “**Annual Business Plan**” for theProject for the promotion, leasing, operations, repair and maintenance of theProject for each calendar year during which this Agreement is in effect.  The Annual Business Plan shall include adetailed budget of projected income and expenses for the Project for suchcalendar year (the “**Operating Budget**”) and a detailed budget of projectedcapital improvements for the Project for such calendar year (the “**CapitalBudget**”).  Within 30 daysfollowing the purchase of a Project by Owner, after the approval of the AnnualBusiness Plan for such calendar year, Manager shall prepare and submit to Ownera comparable business plan for such Project and Manager and Owner must followthe procedure set forth in (b) below with respect to approving any suchadditional business plan.

 

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

 

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for such Project.  Owneracknowledges that the Operating Budget is intended only to be a reasonableestimate of the Project’s income and expenses for the ensuing calendaryear.  Manager shall not be deemed tohave made any guarantee, warranty or representation whatsoever in connectionwith the Operating Budget.

 

(c)           Managermay revise the Operating Budget from time to time, as necessary, to reflect anyunpredicted significant changes, variables or events or to include significantadditional, unanticipated items of revenue and expense.  Any such revision shall be subject to theprior written approval of Owner.

 

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

 

3.13     Records.  Manager shall maintain all office records andbooks of account and shall record therein, and keep copies of, each invoicereceived from services, work and supplies ordered in connection with themaintenance and operation of the Project. Such records shall be maintained on a double entry basis.  Owner and persons designated by Owner shallat all reasonable times have access to and the right to audit and makeindependent examinations of such records, books and accounts and all vouchers,files and all other material pertaining to the Project and this Agreement, allof which Manager agrees to keep safe, available and separate from any recordsnot pertaining to the Project, at a place recommended by Manager and approvedby Owner.

 

3.14     Financial Reports.

 

(a)           MonthlyReports.  On or before the 10thday after the end of each month during the term of this Agreement, Managershall prepare and submit to Owner the following reports and statements:

 

(i)            rental collectionrecord;

 

(ii)           monthly operatingand cash flow statement;

 

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

 

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

 

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

 

(vi)          copy of ledgerentries for such period relating to security deposits maintained by Manager, ifrequested.

 

In addition to the above, Manager shalldeliver to Owner such other reports and statements as are reasonably requestedby Owner.

 

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(b)           AnnualReport.  Within 60 days after the endof each calendar year of the Project, Manager shall deliver to Owner astatement showing the results of operations for the calendar year or portionthereof during which the provisions of this Agreement were in effect.  Manager shall cooperate with and submit toOwner at such times as may be required (monthly or annually, as applicable) suchother information, reports or statements requested by Owner regarding theProject or as may be necessary to comply with any reporting requirements ofOwner or prepare any balance sheets, operating statements or disclosurestatements which may be required to be prepared or filed by Owner.

 

(c)           ReturnsRequired by Law.  Manager shallexecute and file punctually when due all forms, reports and returns required bylaw relating to the employment of personnel.

 

3.15     Compliance with LegalRequirements.  Manager shall executeand file when due all forms, reports, and returns required by law relating tothe employment of its personnel.  Managershall 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 relatingthe Project from any governmental authority, board of fire underwriters orinsurance company, and shall make such recommendations regarding compliancewith such notice as shall be appropriate. Manager shall be responsible for notifying Owner in the event itreceives notice that any improvement on the Project or any equipment thereindoes not comply with the requirements of any statute, ordinance, law orregulation of any governmental body or of any public authority or officialthereof having or claiming to have jurisdiction thereover.  Manager shall promptly forward to Owner anycomplaints, warnings, notices or summonses received by it relating to suchmatters.  Owner represents that to thebest of its knowledge each of the Project and any equipment thereon will uponacquisition by Owner comply with all such requirements.  Owner authorizes Manager to disclose theownership 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 fromand against any and all Losses that may be imposed on them or any or all ofthem by reason of the failure of Owner to correct any present or futureviolation or alleged violation of any and all present or future laws,ordinances, statutes, or regulations of any public authority or officialthereof, having or claiming to have jurisdiction thereover, of which it hasactual notice.

 

Owner acknowledges that Manager does not hold itself out to be anexpert or consultant with respect to, or represent that, the Project currentlycomplies with Governmental Requirements. Manager shall take such action as may be reasonably necessary to complywith any Governmental Requirements applicable to Manager, including thecollection 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 inwhich the Project is located in connection with Manager’s compensation (setforth in Article IV below).  IfManager discovers the Project does not comply with any GovernmentalRequirements, Manager shall take such action as may be reasonably necessary tobring the Project into compliance with such Governmental Requirements, subjectto the limitation contained in Section 3.5 of this Agreement regarding themaking of alterations and repairs. Manager, however, shall not take any such action as long as Owner iscontesting or has affirmed its intention to contest and promptly institute proceedingscontesting any such order or requirement. If, however, failure to comply promptly with any such order orrequirement would or might expose Manager to civil or criminal liability,Manager shall have the right, but not the obligation, to cause the same to becomplied with and Owner agrees to indemnify and hold harmless Manager and theother Manager Indemnified Parties from and against any and all Losses that maybe imposed on them or any or all for taking such actions and to promptlyreimburse Manager for expenses incurred thereby.  The Manager also shall not be liable for anyeffort or judgment or for any mistake of fact of law, or for anything which itmay do or refrain from doing hereinafter, except in cases of misconduct and/ornegligence of Manager, its agents, servants, or employees.

 

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

 

3.17     Branding. Manager shall maintain and administer for Owner the standards of brandingestablished 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 notlimited 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; preparingunderwriting data for use in marketing insurance programs; negotiating andplacing insurance and related services; serving as liaison for insurancebrokers and monitoring insurance premium invoices for accuracy; managing andsettling loss control and insurance claims; consulting and coordinating insurance requirements for financing properties; reviewing and monitoringsub-contractor certificates of insurance; and consulting regarding insuranceverbiage requirements for leases and contracts.

 

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

 

3.20     Technology Use andSupport.  Manager shall utilize the software and technology platformsthat it believes are appropriate in connection with fulfilling its duties underthis Agreement.  In addition, Manager shall provide technical support andmaintenance 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 shallpay Manager a monthly management fee (“**Management Fee**”)equal to three and three-quarters percent (3-3/4%) of Gross Revenues for eachProject for such month payable monthly in arrears.  Certain of these Projects may be owned byJoint Ventures.  When the Manager is notpaid by the Joint Venture directly in respect of its services, the applicableManagement Fee or Oversight Fee to be paid by the Owner will be calculated bymultiplying the Management Fee or Oversight Fee by the Economic InterestPercentage****owned directly or indirectly bythe Owner in such Project. In the event that Owner contracts directlywith a third-party property manager not affiliated with the Manager in respectof a Project for which the Owner, in its sole discretion, has the ability toappoint or hire the Manager, Owner shall pay Manager an oversight fee (“**Oversight Fee**”) equal to one-halfof one percent (0.50%) of Gross Revenues of such Project.  In no event will Owner pay both a ManagementFee and an Oversight Fee to Manager with respect to any Project.  If Manager subcontracts its responsibilitieshereunder to another person or entity, Manager shall be solely responsible forthe payment to such third party.  TheManagement Fee includes the reimbursement of the specified cost incurred by theManager of engaging another person or entity to perform Manager’sresponsibilities hereunder; provided, however, that Manager shall beresponsible for 

 

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payment of all such amounts tosuch third parties.  Nothing herein shallprevent Manager from entering fee-splitting arrangements with third partieswith 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 saidcommencement date, unless otherwise terminated as provided herein.  If no party gives written notice to the otherat least thirty (30) days prior to the expiration date hereof that thisAgreement is to terminate, then this Agreement shall automatically continuethereafter for consecutive two-year periods until terminated by any party bywritten notice given at least 30 days in advance of such termination.  Provided, however, that in the event theCompany terminates its advisory management agreement with Behringer HarvardMultifamily Advisors I LP, Manager, upon at least thirty (30) days priorwritten notice, shall have the right to terminate this Agreement.  In addition, and notwithstanding theforegoing, Owner may terminate this Agreement (i) at any time upondelivery of written notice to Manager not less than thirty (30) days prior tothe effective date of termination, in the event of (and only in the event of) ashowing by Owner of willful misconduct, gross negligence or deliberatemalfeasance of the Manager, its agents, servants or employees in theperformance of Manager’s duties hereunder and (ii) immediately upon theoccurrence of any of the following:

 

(a)           Adecree or order is rendered by a court having jurisdiction (i) adjudgingManager as bankrupt or insolvent, or (ii) approving as properly filed apetition seeking reorganization, readjustment, arrangement, composition orsimilar relief for Manager under the federal bankruptcy laws or any similarapplicable law or practice, or (iii) appointing a receiver or liquidatoror trustee or assignee in bankruptcy or insolvency of Manager or a substantialpart of the property of Manager, or for the winding up or liquidating of itsaffairs; or

 

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

 

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

 

If Owner shall materially breach its obligations hereunder, and suchbreach remains uncured for a period of 10 days after written notification ofsuch breach, then Manager may terminate this Agreement by giving written noticeto 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 ObligationsUpon Termination.  Upon the terminationof this Agreement, Manager shall have the following duties:

 

(a)           Managershall deliver to Owner or its designee, all books and records with respect tothe Project.

 

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

 

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

 

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

 

(d)           Withinsixty (60) days immediately following the date of such termination, Managershall deliver to Owner the report required by Section 3.14(a) for anyperiod not covered by such a report at the time of termination, and withinsixty (60) days immediately following the date of such termination, Managershall deliver to Owner, as required by Section 3.14(b), the statement ofoperations for the fiscal year or portion thereof ending on the date oftermination.

 

4.4       Owner’s ObligationsUpon Termination.  Upon any terminationof this Agreement by Owner other than under clause (i) of the introductoryparagraph to Section 4.2, Manager shall be entitled to receive allcompensation and reimbursements, if any, due to Manager through the date oftermination.  Such amounts will be dueManager no later than 30 days from the date of such termination.  All provisions of this Agreement that requireOwner to have insured, or to protect, defend, save, hold and indemnify or toreimburse Manager shall survive any expiration or termination of thisAgreement, but only to the extent the applicable claim or cause of action isbased on an event occurring prior to the date of termination.

 

The parties understand and agree that Manager may withhold funds forsixty (60) days after the end of the month in which this Agreement isterminated to pay bills previously incurred but not yet invoiced and to closeaccounts. Should the funds withheld be insufficient to meet the obligation ofManager to pay bills previously incurred, Owner will, upon demand, advancesufficient funds to Manager to ensure fulfillment of Manager’s obligation to doso, within ten (10) days of receipt of notice and an itemization of suchunpaid bills.

 

ARTICLE V

Procedures for HandlingReceipts and Operating Capital

 

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

 

5.2       Separation of Owner’sMonies.  Manager shall establish andmaintain, in a bank of Manager’s choice whose deposits are insured by theFederal Deposit Insurance Corporation, and in a manner to indicate thecustodial nature thereof, a separate bank account for the deposit of all moniesof Owner.  Manager shall also establishsuch other special bank accounts as may be reasonably required by Owner.  All monies deposited from time to time inthese accounts shall be deemed trust funds and shall be and remain the propertyof Owner and shall be withdrawn and dispersed by Manager for the account ofOwner only as expressly permitted by this Agreement for the purposes ofperforming the obligations of 

 

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

 

5.3       Depository Accounts.  Owner and Manager agree that Manager shallhave no liability for loss of funds of Owner contained in the bank accounts forthe Project maintained by Manager pursuant to this Agreement due to insolvencyof the bank or financial institution in which its accounts are kept, whether ornot the amounts in such accounts exceed the maximum amount of federal or otherdeposit insurance applicable with respect to the financial institution inquestion.

 

5.4       Working Capital.  In addition to the funds derived from theoperation of the Project, Owner shall furnish and maintain in the operatingaccounts of the Project such other funds as may be necessary to dischargefinancial commitments required to efficiently operate the Project and to meetall payrolls and satisfy, before delinquency, and to discharge all accountspayable.  Manager shall have noresponsibility 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 ofOwner to satisfy obligations of Owner in connection with this Agreement and theProject.  Manager shall keep appropriaterecords to document all reimbursable expenses paid by Manager, which recordsshall be made available for inspection by Owner or its agents on request.  Owner agrees to reimburse Manager upon demandfor money paid or property contributed in connection with the Project and thisAgreement.

 

5.5       Authorized Signatures.  Any persons from time to time designated byManager shall be authorized signatories on all bank accounts established byManager pursuant to this Agreement and shall have authority to makedisbursements from such accounts.  Fundsmay be withdrawn from all bank accounts established by Manager, in accordancewith this Article V, only upon the signature of an individual who has beengranted that authority by Manager and funds may not be withdrawn from suchaccounts by Owner unless Manager is in default hereunder.

 

ARTICLE VI

Miscellaneous

 

6.1       Assignment.  Manager maydelegate partially or in full its duties and rights under this Agreement butonly with the prior written consent of Owner.  Owner acknowledges andagrees that any or all of the duties of Manager as contained herein may bedelegated 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 contractwith a Submanager; provided that, unless Owner otherwise agrees in writing withsuch Submanager, Owner shall have no liability or responsibility to any suchSubmanager for the payment of the Submanager’s fee or for reimbursement to theSubmanager of its expenses or to indemnify the Submanager in any manner for anymatter; and provided further that Manager shall require such Submanager toagree, in the written agreement setting forth the duties and obligations ofsuch Submanager, to indemnify Owner for all Losses incurred by Owner as aresult of the willful misconduct or gross negligence of the Submanager, exceptthat such indemnity shall not be required to the extent that Owner recoversissuance proceeds with respect to such matter.  Any contract entered intobetween Manager and a Submanager pursuant to this Section 6.1 shall beconsistent with the provisions of this Agreement, except to the extent Ownerotherwise specifically agrees in writing.  This Agreement shall be bindingupon and shall inure to the benefit of the parties hereto and their respectivesuccessors and assigns.

 

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

 

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person to leave the employment or other service of the Manager or anyof its affiliates, or (ii) hire, on behalf of the Company or OP or anyother person or entity, any person who has left the employment of the Manageror any of its affiliates within the one-year period following the terminationof that person’s employment with the Manager or any of its affiliates.  During the period commencing on the datehereof 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 theaccount of any other person, firm, corporation or other business organization,intentionally interfere with the relationship of the Manager or any of itsaffiliates with, or endeavor to entice away from the Manager or any of itsaffiliates, any person who during the term of thisAgreement is, or during the preceding one-year period was, a tenant,co-investor, co-developer, joint venturer or other customer of the Manager orany of its affiliates.

 

6.3       Notices.  All notices required or permitted by thisAgreement shall be in writing and shall be sent by registered or certifiedmail, 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 partyas herein provided.

 

6.4       Entire Agreement.  This Agreement shall constitute the entireagreement between the parties hereto and no modification thereof shall beeffective unless in writing executed by the parties hereto.

 

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

 

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

 

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

 

6.8            Captions, PluralTerms.  Unless the context clearlyrequires otherwise, the singular number herein shall include the plural, theplural number shall include the singular and any gender shall include allgenders.  Titles and captions hereinshall not affect the construction of this Agreement.

 

6.9            Attorneys’ Fees.  Should either party employ an attorney toenforce any of the provisions of this Agreement, or to recover damages forbreach of this Agreement, the non-prevailing party in any action agrees to payto the prevailing party all reasonable costs, damages and expenses, includingreasonable attorneys’ fees, expended or incurred by the prevailing party inconnection therewith.

 

6.10          Signs.  Manager shall have the right to place signson the Project in accordance with applicable Governmental Requirements statingthat Manager is the manager and leasing agent for the Project.

 

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6.11          Survivalof Indemnities.  The indemnificationobligations of the parties to this Agreement shall survive the termination ofthis Agreement to the extent of any claim or cause of action based on an eventoccurring prior to the date of termination.

 

6.12          Ownershipof Proprietary Property.  The Managerretains ownership of and reserves all Intellectual Property Rights in theProprietary Property.  To the extent thatOwner has or obtains any claim to any right, title or interest in theProprietary Property, including without limitation in any suggestions,enhancements or contributions that Owner may provide regarding the ProprietaryProperty, Owner hereby assigns and transfers exclusively to the Manager allright, title and interest, including without limitation all IntellectualProperty Rights, free and clear of any liens, encumbrances or licenses in favorof Owner or any other party, in and to the Proprietary Property.  In addition, at the Manager’s expense, Ownerwill perform any acts that may be deemed desirable by the Manager to evidencemore fully the transfer of ownership of right, title and interest in theProprietary Property to the Manager, including but not limited to the executionof any instruments or documents now or hereafter requested by the Manager toperfect, defend or confirm the assignment described herein, in a formdetermined by the Manager.

 

6.13          GoverningLaw, Venue.  This Agreement shall beconstrued under and in accordance with the laws of the State of Texas and isfully performable in Dallas County, Texas.

 

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

 

6.15          SavingsClause.  If any provision of this Agreement is held unenforceable,then such provision will be modified to reflect the parties’ intention. Byway of example and without limitation, if any provision requiring thereimbursement of certain of the Manager’s expenses should be deemedunenforceable, the parties shall take such action to reach an agreement forOwner to pay such reimbursable expenses.  All remaining provisions ofthis Agreement shall remain in full force and effect.

 

**[RESTOF PAGE INTENTIONALLY LEFT BLANK]**

 

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IN WITNESS WHEREOF, the parties heretohave caused this instrument to be duly executed by their duly authorizedrepresentatives.

 
| “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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