HomeMy WebLinkAboutTR_Echo_Mountain_Proof_of_Authorization_221205_v1.pdfPROPERTY MANAGEMENT
AGREEMENT
This Property Management Agreement (this "Agreement") dated as of November 7th,
2019, by and between AUK -Montclair LLC FLP-Montclair LLP and KFP-Montclair LLC, each
a Delaware limited liability entity, as tenants in common, having offices at 900 Larkspur
Landing Circle, Suite 100, Larkspur, California 94939 ("Owner"), and Avenues Residential
LLC, a Delaware limited liability company, having an office at 901 5th Avenue, Suite 3000,
Seattle, Washington 98164 ("Manager").
RECITALS
Owner is the owner of the Property (described herein) commonly known as Montclair
Heights Apartments located at 2223 Benson Road South, Renton, Washington 98055.
Owner desires to appoint Manager as an independent contractor to manage and lease the
Property, and Manager desires to accept such appointment, upon the terms, covenants, conditions
and provisions of this Agreement.
Now, Therefore, in consideration of the mutual covenants and agreements set forth in this
Agreement and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, and intending to be legally bound hereby, Owner and Manager hereby
covenant and agree as follows:
1. Definitions and Interpretation
1.1. In this Agreement, unless otherwise specified, the following terms have the
following meanings:
"Affiliate" means with respect to any Person, any relative of the Person in question, if
such Person is an individual, or any other Person directly or indirectly Controlled by,
Controlling or under common Control with the Person in question, or any Person who
owns, directly or indirectly, ten percent (10%) or more of the equity interest of the Person
in question.
"Budget" has the meaning given to that term in Section 3.5(d).
"Capital Event" means any sale, ground lease, financing, casualty or condemnation that
occurs during the Term hereof with respect to which capital proceeds are received by
Owner.
"Cash Flow" means, for any period, Gross Receipts collected less Operating Expenses,
debt service, and capital expenditures paid during each period.
"Contracts" means the agreements, contracts, documents and obligations (other than the
Leases and the Financing Documents) now or hereafter in effect and relating to the
Property.
"Effective Date" shall mean the date upon which Manager shall undertake the
Page 1 of 32
107344706.8
management of the Property. Unless otherwise agreed, the Effective Date shall be
February 28, 2019.
"Financing Documents" means loan agreements, deeds of trust and mortgages, security
agreements guaranties, environmental indemnity agreements and other written
agreements evidencing or otherwise relating to Financings, which have been provided by
Owner to Manager.
"Fiscal Year" means a calendar year or other period defined by Owner, except that the
first Fiscal Year shall commence on the date hereof and end on the next succeeding
December 31, and the last Fiscal Year shall commence on the January 1st immediately
preceding the date this Agreement expires or terminates and shall end on such expiration
or termination date.
"Gross Receipts" shall mean all amounts actually collected (i.e., on a cash basis and not
an accrual basis) as rents or other charges for use or occupancy of space or facilities in
the Property, forfeited security deposits (but only to the extent such forfeited security
deposits are applied against rents owed under the Lease in question and are not used for
other purposes), tenant charges, late charges, any net cash received in connection with the
tenant liability insurance program (after paying all related third -party fees and expenses)
and other miscellaneous income with respect to the operation of the Property, but
excluding other receipts, such as (i) interest or investment income, (ii) security deposits
(unless and until applied against rents as provided above), (iii) insurance proceeds, (iv)
tax refunds, (v) condemnation awards, (vi) dividends on insurance policies, (vii) proceeds
of any other Capital Event, (viii) one-time door fees and bonus payments paid in
connection with cable, internet and telecommunications agreements (but recurring
monthly revenue under such agreements shall be included as Gross Receipts), (ix) vendor
rebates, and (x) any other income received by Owner or the Property that is similar in
nature to the foregoing exclusion items that is derived from the ongoing operation of the
Property and Manager's efforts in connection with the same.
"Leases" means all leases, subleases, and other occupancy agreements now or hereafter
in effect and relating to the Property, including all renewals, extensions, amendments and
other modifications thereof and all guarantees of the obligations of Tenants thereunder.
"Legal Requirements" means all permits, laws, codes, acts, ordinances, orders,
judgments, decrees, injunctions, rules, regulations, directions and requirements of, and
agreements with, governmental bodies, agencies or officials, now or hereafter applicable
to the Property, and adjoining vaults, sidewalks, streets or rights of way or any use or
condition of any thereof, including, but not limited to all applicable environmental laws.
"Operating Expenses" means, for any period, all accrual -based expenses (exclusive of
interest expense and capital expenditures) incurred with respect to the Property in
accordance with the terms of this Agreement.
"Person" means any individual, corporation, partnership, limited liability company,
association, trust or other entity or organization, including a government or political
subdivision or agency or instrumentality thereof.
"Performance Standard" means the discharge of duties solely in the interest of Owner
Page 2 of 32
107344706.8
(i) with the care, skill, prudence, and diligence under the circumstances then prevailing
that a prudent Person acting in a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with like aims, and (ii) in a manner
intended to maximize the Cash Flow and the long term preservation of the value of the
Property and achieve the investment goals and objectives of Owner.
"Property" means the land and the real property and improvements, and their respective
appurtenances, commonly described above and legally described on Exhibit A.
"Property Employees" shall mean all persons employed by Manager or any Affiliates of
Manager in connection with the operation and maintenance of the Property who shall
perform services at the Property.
"Tenants" means the tenants and other occupants under the Leases and rental
agreements.
"Trademarks" means all trademarks, trade names, corporate names, company names,
business names, fictitious business names, Internet domain names, service marks, trade
dress, certification marks, collective marks, logos, other source or business identifiers,
designs and general intangibles of a like nature.
1.2. Interpretation. In this Agreement, unless otherwise specified, (i) singular words
include the plural and plural words include the singular; (ii) words importing any gender include
the other genders; (iii) references to any Person include such Person's successors and assigns.
No inference in favor or against any Person or party shall be drawn from the fact that such
Person or its attorneys drafted any portion hereof. The internal laws of the state where the
Property is located shall govern the performance, interpretation and enforcement of this
Agreement.
1.3. Accounting Terms and Determinations. In this Agreement, unless otherwise
specified, (i) all accounting terms used herein shall be interpreted, (ii) all accounting
determinations hereunder shall be made and (iii) books, records, financial statements and reports
required to be kept and delivered hereunder shall be kept and prepared in accordance with
GAAP, except for changes directed or approved by Owner contemporaneously herewith or
subsequently. Owner shall notify Manager, in writing concerning any changes from GAAP.
2. Appointment and General Provisions
2.1. Appointment. Subject to the provisions of this Agreement, Owner hereby
appoints Manager as an independent contractor to manage, operate, maintain, repair and lease,
on an exclusive basis, the Property while this Agreement remains in effect, and Manager hereby
accepts such appointment.
2.2. Management Duties and Authority. Subject to the provisions of this
Agreement and at the direction of Owner, Manager shall manage, operate, maintain, repair and
lease the Property in accordance with the Performance Standard and the terms of any financing
pursuant to the Financing Documents, subject to and within the Budget. Subject to the
provisions hereof and the Budget, Manager shall provide all services reasonably necessary,
proper, desirable or appropriate for the successful management, operation, maintenance, repair,
and leasing of the Property, including the duties and services specified in this Agreement.
Page 3 of 32
107344706.8
2.3. Independent Contractor. Manager's relationship to Owner hereunder is that of
an independent contractor, and neither Manager nor Owner shall represent to any other Person
that Manager's relationship to Owner hereunder is other than that of an independent contractor.
All persons employed by Manager or any Affiliates of Manager in connection with the operation
and maintenance of the Property shall be employees solely of Manager or such Affiliates and not
of Owner and all arrangements with such employees are solely the concern of Manager or such
Affiliates. Nothing herein is intended to limit Manager's obligation to act in accordance with the
Performance Standard.
2.4. Licenses. Manager represents, warrants and covenants that it and its personnel
are, and while this Agreement remains in effect, Manager and its personnel shall continue to be,
fully licensed and qualified, to the extent required by applicable law, to perform Manager's
duties and obligations hereunder. Manager shall fully comply with all applicable Legal
Requirements relating to the performance of its duties and obligations hereunder.
2.5. Cooperation. Manager shall consult with Owner at Owner's request and to the
extent necessary or appropriate to enable Manager to perform its duties and obligations
hereunder. Manager shall conduct meetings between Owner and Manager from time to time as
necessary or appropriate to enable Manager to perform its duties and obligations hereunder or as
requested by Owner. Each party shall cooperate fully in all matters relating to the management,
operation, maintenance, repair and leasing of the Property and the defense of any claim, action or
proceeding relating thereto or to this Agreement, and Manager shall promptly respond to all
requests for information by Owner, including furnishing all documents and services relating
thereto required by Owner in connection with the operation of the Property.
2.6. Indemnification by Manager. To the fullest extent permitted by law, Manager
shall indemnify, defend and hold harmless Owner, and its stockholders, members, partners,
directors, officers, managers, employees, agents and Affiliates (the "Owner Indemnified
Parties") from and against: (i) any and all claims, actions, suits, proceedings, losses, damages,
liabilities, costs and expenses, including reasonable attorneys' fees and disbursements
("Damages"), arising out of or resulting from the gross negligence, willful or intentional
misconduct, fraud, or criminal misconduct, of Manager and its directors, officers, and
employees; and for (ii) any and all claims which arise from any actions of Manager and its
directors, officers, and employees beyond the scope of the authority conferred upon Manager
hereunder (collectively, the "Excluded Actions"). The indemnity obligation of Manager shall
only apply upon the issuance of a final non -appealable judgment or other final adjudication
determining that Manager owes a duty of indemnification under the terms of this Agreement.
Notwithstanding the foregoing, Owner shall indemnify and hold Manager Indemnified Parties
harmless as to any claim which is insured by the commercial general liability insurance, the
property insurance or other insurance policies which Owner has obtained covering the Property
and Manager.
2.7. Indemnification by Owner. To the fullest extent permitted by law, Owner shall
indemnify, defend and hold harmless Manager and its partners, members, stockholders,
managers, directors, officers, employees and agents (the "Manager Indemnified Parties") from
and against any and all Damages made by unaffiliated third parties arising out of or in
connection with the performance by Manager of its duties in accordance with the terms of this
Agreement; provided, however, that Owner's indemnity obligation shall not apply in the case of
any claim, action, suit or proceeding is finally determined by a court of competent jurisdiction to
be caused by or resulting from the Excluded Actions of Manager or any Manager Indemnified
Page 4 of 32
107344706.8
Party. In addition, Owner shall indemnify defend and hold Manager harmless, including claims
for court costs and attorney's fees, as to all claims alleging violations of the Americans with
Disabilities Act or any similar statute or regulation, except to the extent arising from the
Excluded Actions of Manager or any Manager Indemnified Party.
2.8. Indemnification for Fair Housing Related Claims and Defense: Owner shall
bear the expense of the investigation and defense of all claims related to an alleged violation of
the Fair Housing Act and all amendments thereto, and any Federal, State and local fair housing
law or similar statute, ordinance or regulation. However, Manager shall defend and indemnify
Owner as to all losses suffered by Owner, where there has been a final adjudication, by
arbitration or by a court of competent jurisdiction, that there was an actual violation of such laws
and regulations by Manager or Manager's employees and such violation was the proximate cause
of Owner's losses. In addition, Manager shall bear the cost of defense and indemnification where
any federal or state agency has issued a complaint against Manager alleging Manager violated
such laws, following such agency's initial investigation.
2.9. Authority to Settle Claims Subject to Indemnification. Neither party shall
have the authority to settle any claim, action, suit or proceeding that is the subject of the
indemnification agreement set forth in this subsection without first obtaining the consent of the
other party. Such consent shall not be unreasonably withheld. Manager or Owner, as applicable,
shall regularly apprise the other of the status of all claims, actions, suits and proceedings that are
the subject of the indemnification agreement set forth in this subsection.
2.10. Survival of Indemnification Terms. The provisions of Sections 2.6 through 2.9
shall survive the expiration or termination of this Agreement.
2.11. Compliance with Legal Requirements. The duty of Manager to comply with
Legal requirements as provided in this Agreement shall not affect the relative duties of the
parties concerning indemnification for claims asserted against Manager and/or Owner.
2.12. Sale and Financing. Except as may be agreed to in writing by Owner and
Manager, Manager shall not be entitled to any compensation, commissions or other fee, with
respect to any Capital Event relating to the Property or any interest therein.
2.13. Owner's Representatives.
(a) Whenever any consent, approval or other action of Owner is required or
permitted hereunder, such consent, approval or other action shall be effective if given or taken by
Jason Fuchs, Caleb Wolper or Linton Young. Owner may change such representatives at any
time by notice to Manager pursuant to Section 8.1 hereof.
(b) Whenever any consent, approval or other action of Manager is required or
permitted hereunder, such consent, approval or other action shall be effective if given or taken by
Walter Smith or Steve Davis acting individually on behalf of Manager. Such representatives
may be changed by Manager with Owner's prior written consent which shall not be unreasonably
withheld or delayed.
3. Management Obligations and Authority
3.1. Property Management Generally. Subject to the other terms and conditions of
Page 5 of 32
107344706.8
this Agreement in all respects:
(a) Manager shall, at the expense of Owner (as provided in this Agreement),
manage, operate, maintain and repair the Property in accordance with the Performance Standard
and the terms of any financing under the Financing Documents and do all things necessary,
desirable or appropriate therefor, subject to and within the Budget. Without limiting the
generality of the foregoing, Manager shall:
(i) implement the Budget;
(ii) make and renew all Contracts for water (hot and chilled), sanitary
and storm sewer, drainage, electricity, steam, gas, telephone, fuel, cleaning, snow
removal, window washing, garbage removal, pest control, life -safety, fire prevention,
emergency response, security and other utilities and all other services necessary or
appropriate for the management and operation of the Property in accordance with the
Budget unless otherwise provided herein;
(iii) purchase all supplies, inventories, provisions and equipment
necessary or appropriate for the maintenance, management and operation of the Property
in accordance with the Budget unless otherwise provided herein;
(iv) provide regular, systematic inspections of the Property, consult
with, and make recommendations to, Owner concerning the condition of the Property and
the necessity for maintenance, repair, alteration or Restoration thereof; at the expense of
Owner;
(v) perform and complete all repairs at the Property in a good and
workmanlike manner;
(vi) perform through Manager's (or its Affiliates') employees or third -
party contractors all work, labor and services necessary or appropriate to maintain and
repair the Property in accordance with the Performance Standard and the Budget;
(vii) take such action as Owner may direct with respect to the
maintenance, repair, alteration, addition or Restoration of or to the Property; make all
Contracts for such maintenance, repair, alteration, addition or Restoration of or to the
Property and monitor and enforce the performance of all Contracts;
(viii) as soon as reasonably possible, but in no event later than two (2)
business days from the time received by Manager or Manager's risk manager, deliver to
Owner a copy of each incident report delivered to Manager or Manager's risk manager;
as soon as reasonably possible, but in no event later than two (2) business days from the
time Manager learns of any casualty or condemnation (or threatened condemnation),
provide Owner with notice in reasonable detail of such casualty or condemnation;
promptly investigate and consult with, and make recommendations to, Owner with
respect to all accidents or claims for damage relating to the ownership, operation or
maintenance of the Property, all damage or destruction to the Property and all casualties
and condemnation and the estimated cost of repair thereof,
(ix) take such actions as Manager in good faith believes are necessary
Page 6 of 32
107344706.8
or appropriate in light of an emergency threatening imminent and immediate personal
injury or imminent material physical damage. Manager shall, no later than twenty-four
(24) hours from the time Manager learns of any such emergency, provide Owner with
notice in reasonable detail of the emergency and the actions taken by Manager in
connection therewith;
(x) perform (or arrange for the performance of) the other services
required to be performed hereunder or under any Financing Documents, as directed by
Owner;
(xi) at periodic intervals perform (or arrange for the performance of) a
"shopping report" by one or more employees providing leasing services at the Property
and forward to Owner with the monthly reports such shopping report(s) prepared during
the preceding month;
(xii) prior to entering into new Leases with proposed Tenants, perform
such Tenant screening, credit and background checks as permitted by law and as may be
recommended by Manager and approved in writing by Owner;
(xiii) coordinate on a regular basis with Owner regarding rental rates,
concessions and leasing terms for Tenant Leases; and
(xiv) where permitted by applicable law, conduct a criminal background
on each prospective Tenant, and, if permitted by applicable law, Manager shall not enter
into a Lease with any prospective Tenant convicted of a felony within the prior six years.
(b) All Contracts and purchases made hereunder at the expense of Owner
(whether or not specifically requiring the approval of Owner pursuant hereto) shall be made in
the name of Owner or the Property and executed directly by Owner or, where allowed by this
Agreement, by Manager executing the Contract as Owner's agent. Owner shall retain title to all
property purchased by Manager for the Property, at the expense of Owner.
(c) Owner acknowledges that Manager maintains certain programs with its
Affiliates and with third parties on a for profit enterprise basis that may generate fees,
compensation, incentives, commissions, and coordination fees Manager, in connection with the
services offered. Notwithstanding the foregoing, in no event shall Manager enter into any
Contract, program or relationship that pays the Manager or any Affiliate of Manager any
compensation, fees, incentives or commission or that provides the Manager or any Affiliate of
Manager any discounts, if such Contract, program or relationship results in higher costs or lower
revenues to Owner than would be available from an unrelated third party in an arms -length
transaction for the same service or product provided under such Contract. Additionally, Manager
shall only enter into any Contract with any Affiliate of Manager on terms that are consistent with
the terms that would be available on an arms -length basis with an unrelated third party. Manager
shall disclose in writing to Owner all Contracts that are entered into with Affiliates of Manager.
(d) Manager maintains health insurance and workers' compensation
insurance, for the benefit of all of its employees, including Property Employees. Manager will
include the cost of such employee insurance programs and other employee benefits as line item
expenses in the Budget, and upon approval of the Budget, Owner will be deemed to have
expressly approved such allocated insurance expenses, to the extent included in the Budget.
Page 7 of 32
107344706.8
(e) Notwithstanding anything to the contrary contained herein, without the
prior consent of Owner, Manager shall not, and shall not have the authority to, make any
Contract or purchase unless such Contract or purchase is (i) contained within the then current
Budget; or which is reasonably required due to an emergency; (ii) and which must be terminable
without termination fee or penalty by Owner upon not more than thirty (30) days' written notice.
(f) In making any Contract or purchase hereunder, Manager shall use
commercially reasonable efforts to obtain favorable discounts for Owner and all such discounts,
rebates or commissions under any Contract or purchase order made hereunder shall inure to the
benefit of Owner. Manager shall make payments under any such Contract or purchase order at
such date or otherwise in compliance with such Contract or purchase order so as to enable Owner
to take advantage of any such discount.
(g) Manager shall use commercially reasonable efforts to prevent and detect
the occurrence or existence of any hazardous condition at the Property. If during the Initial Term
or any Renewal Term, Manager becomes aware of the existence of hazardous materials or
wastes, toxic substances or wastes, asbestos or asbestos -bearing materials and the like or any
other hazardous condition at, in, on or under the Property, Manager shall promptly notify Owner
of the condition, both orally and in writing.
(h) Manager is not responsible for providing security services to the Property.
At Owner's direction, Manager will, in Owner's name and at Owner's expense, contract with a
third party to provide security services to the Property. In no event shall Manager have any
liability to Owner or any other party for criminal acts of any kind committed by tenants or third
parties on or with respect to the Property.
(i) Manager and Owner shall promptly notify the other upon receiving any
notice issued under (i) any Lease or rental agreement; (ii) any contract or agreement; (iii) any
law or regulation by any governmental official or authority; or (iv) relating to any claim for
damages by any third party.
0) Manager shall perform all of its obligations and duties hereunder in
compliance with all applicable laws, rules, regulations and orders of any federal, state, county or
local governmental authority.
3.2. Management Employees.
(a) Manager shall have in its employ at all times sufficient staff of capable
personnel for the proper leasing, management, maintenance and operation of the Property. Such
personnel shall be employees of Manager and all matters pertaining to such personnel shall be
the responsibility of Manager. All salaries, wages and other compensation of personnel
employed by Manager hereunder, including fringe benefits, shall be expenses of the Property and
reimbursed by Owner to the extent such expenses are included in the Budget. Manager shall be
responsible for all payroll and other taxes (excluding income taxes) and all other deductions paid
or made and/or required by law, and for preparing and filing all returns and other documents
required under federal or local laws in connection therewith. All such expenses shall be
reimbursable to Manager by Owner to the extent such expenses are included in the Budget.
(b) Manager shall fully comply with all Legal Requirements relating to
Page 8 of 32
107344706.8
worker's compensation, employee safety and health, social security, unemployment insurance,
wages, hours, working conditions, employee leaves of absence, disability rights, employee
benefits and benefit plans, plant closings and layoffs, immigration, the classification of
individuals as employees or independent contractors, terms and conditions of employment, union
organizing, labor relations, and other matters pertaining to Manager's personnel. Manager shall
indemnify, defend and hold harmless each Owner Indemnified Party from and against any and
all Damages, relating to Manager's failure to comply with this subsection.
(c) Manager shall fully comply with all Legal Requirements relating to equal
employment opportunity discrimination and harassment. Manager shall indemnify, defend and
hold Owner Indemnified Parties harmless from and against any Damages relating to Manager's
failure to comply with this subsection.
(d) Manager shall promptly notify Owner of any pending changes in
Manager's business, business ownership, on -site or off -site personnel for the Property, or the
amount of time devoted by on -site or off -site personnel to the Property. At Owner's reasonable
discretion, Owner shall be entitled to preapprove persons presented for key positions in leasing,
operations, management/general management, and accounting for the Property. Manager shall
notify Owner prior to any transfer of the property manager or the maintenance supervisor from
the Property to other properties that are owned by Manager or its Affiliates.
(e) Manager may appear in or commence legal or other proceedings on behalf
of Owner in Owner's name only upon the express written consent of Owner, it being understood
that Owner will pay any legal fees in connection therewith, except that Manager may commence
and pursue ordinary course litigation relating to enforcing Leases, collections and evictions,
without the need to obtain Owner's consent.
(f) Manager shall use commercially reasonable efforts to collect and maintain
current certificates of insurance from all Tenants in compliance with types of coverage, limits of
coverage and deductible limits all as specified in the applicable Leases, which shall in all events
require liability insurance in an amount not less than $100,000 per occurrence, and from each
other party to any Contract in compliance with types of coverage, limits of coverage and
deductible limits all as specified in the applicable Contracts or, as to Contracts with contractors,
subcontractors and other Persons performing work at the Property, as specified under Exhibit D.
If any Tenant shall fail to have current certificates of insurance in compliance with the terms of
its Lease, Manager shall enforce the insurance obligations of such Tenant under its Lease and
dispossess any such Tenant in default under its Lease. If any other party to a Contract shall fail
to have current certificates of insurance in compliance with the terms of its Contract, Manager
shall promptly notify Owner of such noncompliance.
(g) Manager represents and warrants that it is in compliance with, and will
remain in compliance with, all Anti -Corruption Laws. No part of the payments received by
Manager, directly or indirectly, from Owner, will be used for any purpose that would cause a
violation of Anti -Corruption Laws. Manager will keep accurate books and records in connection
with its services to be performed under this Agreement and will make such books and records
available to the auditors for Owner if requested. Manager will fully cooperate in any audit that
may be conducted by Owner or its designated representatives.
As used herein, "Anti -Corruption Laws" is defined as any law relating to terrorism,
anti -terrorism, money-laundering or anti -money laundering activities, including without
Page 9 of 32
107344706.8
limitation the United States Bank Secrecy Act, the United States Money Laundering Control Act
of 1986, Executive Order No. 13224, and Title 3 of the USA Patriot Act, and any regulations
promulgated under any of them. As used herein "Executive Order No. 13224" is defined as
Executive Order No. 13224 on Terrorist Financing effective September 24, 2001 and relating to
"Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to
Commit, or Support Terrorism", as may be amended from time to time. "Prohibited Person" is
defined as: (i) a person or entity that is listed in the Annex to Executive Order No. 13224, or a
person or entity owned or controlled by an entity that is listed in the Annex to Executive Order
No. 13224; (ii) a person or entity with whom Landlord is prohibited from dealing or otherwise
engaging in any transaction by any Anti -Corruption Law; or (iii) a person or entity that is named
as a "specially designated national and blocked person" on the most current list published by the
U.S. Treasury Department Office of Foreign Assets Control at its official website,
http://www.treas.gov/ofac/tI Isdn.pdf or at any replacement website or other official publication
of such list. "USA Patriot Act" is defined as the "Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001" (Public
Law 107-5 6), as may be amended from time to time.
3.3. Rent Collection.
(a) Manager shall use commercially reasonable efforts to cause the Property
to be fully rented to desirable Tenants in compliance with all applicable Legal Requirements.
Manager shall consult with Owner with respect to rental and renewal of occupancy space to
desirable Tenants in compliance with all Legal Requirements and propose, supervise and
implement the Budget for the applicable Fiscal Year. All Leases shall be on the standard lease
form approved by the National Apartment Association (sometimes known as the "Blue Moon
Lease form") which has been approved by Owner. Manager shall revise the standard lease form,
as required by law or as requested by Owner.
(b) Upon the request of Owner, Manager shall use Yardi software or any other
revenue management software that may be required by Owner from time -to -time.
(c) Manager shall use commercially reasonable efforts to collect and enforce
the collection of all rents and other charges payable by Tenants under their Leases. Manager
shall bill Tenants for any additional rent in a timely manner so that such additional rent is not
forfeited. Manager shall consult with Owner as to policies for the assignment of accounts to a
commercial collection agency. Where post termination accounts are assigned to Manager or to
an Affiliate of Manager for collection, the collection fees chargeable shall be as set forth in
Exhibit C to this Agreement. Any amounts retained as fees by Manager or Manager's Affiliates
pursuant to the terms of Exhibit C shall not be part of the Gross Receipts; but any collections
made by other assigned collection agencies that are actually received by Owner shall be part of
the Gross Receipts.
(d) Manager shall immediately deposit all rents and other sums collected by
Manager in the Operating Account.
(e) Manager and Owner shall consult with each other concerning any legal
action to be taken with respect to defaults by any Tenant and concerning the institution of legal
proceedings against any Tenant. Manager shall, with the consent of Owner, designate the
attorneys for any such legal proceedings. Any such legal action may be brought in the name of
Manager or in the name of Owner.
Page 10 of 32
107344706.8
(f) Manager shall be responsible for the giving of all notices and statements
required to be given to Tenants under the terms of the respective Tenants' Leases and for the
giving of all other notices necessary to accomplish the proper management of the Property in
accordance herewith.
(g) Manager shall consider and advise Owner from time to time as to
appropriate or desirable rules and regulations or any additional rules and regulations required to
be made under the Leases with Tenants or for the better or more efficient operation of the
Property. Manager shall ensure that all Tenants are informed with respect to, and shall enforce,
such rules, regulations and notices as may be promulgated by Owner or Manager.
(h) Manager shall maintain accurate records of all security deposits held by
Owner, including the amount of each security deposit, the party from whom each security
deposit is collected, interest earned on each security deposit, the amount of such interest required
(if applicable law so required) to be paid to each Tenant with respect to such Tenant's security
deposit, and the date(s) upon which Manager collected each security deposit. Manager shall
deliver a monthly report to Owner which indicates when a refund of all or any portion of a
security deposit is required and has been approved by Manager, and Manager shall keep an
accurate record of all refunds.
(i) Manager shall perform such additional services and undertake such
additional obligations as Owner may reasonably request from time to time. Where such services
are not specified in this Agreement, Manager shall be entitled to receive additional
compensation.
0) Unless otherwise required by applicable law, Manager shall use its best
efforts to maintain confidential and not disclose to any third party the name or contact
information of (i) Owner, (ii) Aukum Group LLC, or (iii) any direct or indirect member,
manager or principal of the foregoing. Manager may disclose the identity of Owner to vendors
so as to avoid making Manager an agent for an undisclosed principal.
3.4. Contracts with Third Parties.
(a) All Contracts that would impose an obligation on Owner in excess of Ten
Thousand Dollars ($10,000) (unless otherwise required or permitted by Owner) shall be awarded
on the basis of competitive bidding by not less than three (3) contractors or vendors and shall be
subject to rebid every year, or more frequently if deemed necessary by Owner.
(b) Unless otherwise provided herein, Manager shall, at the expense of
Owner, in accordance with the Budget, punctually pay and perform on behalf of Owner all of
Owner's obligations under Contracts and enforce, preserve and keep unimpaired the rights of
Owner and the obligations of other parties under Contracts.
(c) Manager shall not enter into any Contract unless (1) such Contract
contains a clause whereby the service provider agrees to indemnify, defend and hold all Owner
Indemnified Parties harmless from and against all claims, actions, suits, proceedings, losses,
damages, liabilities, costs and expenses (including without limitation, reasonable attorneys' fees
and disbursements) arising out of, resulting from or in connection with the acts or omissions of
the service provider and its directors, officers, employees, contractors, subcontractors and agents,
which constitute negligence, fraud, breach of the service agreement, willful, reckless or criminal
Page 11 of 32
107344706.8
misconduct or any actions of the service provider beyond the scope of authority conferred upon
the service provider pursuant to the terms of the Contract, and (2) as to Contracts with
contractors, subcontractors and other Persons performing work at the Property, (i) such
contractors, subcontractors or other Persons are obligated to maintain insurance in accordance
with the terms of Exhibit D, and (ii) such Contracts contain delivery/completion schedules with
commercially reasonable penalties for a failure to comply with such delivery/completion
schedules.
(d) Without limiting any obligations of Manager hereunder, Owner
acknowledges that Manager utilizes the services of Registry Monitoring Insurance Services, Inc.
in connection with the performance of its obligations under this Section.
3.5. Records and Reports. All reporting to Owner will be delivered in an electronic
format. In addition, Manager will submit certain information electronically in a format
compatible with Owner's property management software:
(a) Standard Property Manager Reporting Period. Manager shall consider the
monthly reporting period to cover the period from the 26th of the previous month to the 25th of
the current month. Owner and Manager shall establish reporting requirements and due dates as
Owner deems necessary and appropriate.
(b) Property Management Software. Manager will use or convert to, at
Owner's sole expense (but in accordance with the pricing set forth on Exhibit B, (i) Yardi, or any
other property management software which Owner shall reasonably require, with the version and
release number to be provided by Owner, or (ii) software or data extract routines identified
and/or provided by Owner; provided, however, that Owner shall pay the actual out of pocket
amount charged by Yardi (without markup), if any, to convert to the Yardi property management
software. The modules required for implementation shall include general ledger, commercial
management, accounts payable and distributed processing. Owner, at its sole discretion, may
require an Owner modified version and release of the property management software. The
database structure, system type, and property number will be provided by Owner and will not be
modified without the consent of Owner. Owner will provide Manager with a standard chart of
accounts, Tenant charge (billing) codes, and report formats which are to be used unless otherwise
approved in writing by Owner. Manager will submit, on a date to be determined by Owner, a
monthly electronic download of selected financial and operational data, including general ledger
and lease information. Owner reserves the right to periodically modify its software and reporting
requirements.
(c) Distribution of Cash Flows. Manager shall remit to Owner by wire
transfer, on a date to be determined by Owner but no later than the 201h of the next following
calendar month, the Cash Flow generated from operating the Property.
(d) Budget. Not later than thirty (30) days prior to the beginning of each
Fiscal Year, Manager shall submit to Owner for its approval a proposed annual budget prepared
on the accounting basis selected by Owner for the Property for the ensuing Fiscal Year. The
proposed annual budget shall set forth on a monthly basis Manager's good faith estimates of. (i)
Gross Receipts, Operating Expenses, and interest expense for the Property for such year, all in
detail reasonably satisfactory to Owner, (ii) the recommended capital expenditures and
extraordinary expenses for such year described in reasonable detail, (iii) Cash Flow from the
Property, (iv) liability in the succeeding Fiscal Year for real estate taxes, (v) the amount of debt
Page 12 of 32
107344706.8
service becoming due and payable during the next succeeding Fiscal Year in connection with all
financings or advances in connection with the Property (to the extent such information is
provided to Manager by Owner), (vi) wages, salaries, and other compensation to be paid to
employees of Manager working at or on the Property, as well as the status of any negotiations
affecting said wages, salaries and other compensation, (vii) the extent of completion of any
uncompleted improvements to the Property, together with a projection of the costs of
constructing such improvements to be incurred during the next succeeding Fiscal Year, (viii) the
current legal status of pending or threatened suits concerning the Property (or any portion
thereof), (ix) a 5-year capital plan, reflecting forecasted capital expenditures for each of the
succeeding five (5) Fiscal Years and actual capital expenditures for the current Fiscal Year, (x)
list of service contracts, key terms and last bid date and (xi) such other information as Owner
may reasonably require. The Budget shall be in the format and detail as required by and
satisfactory to Owner. Manager shall also submit to Owner with the submission of the Budget, a
written narrative discussion of significant events in the relevant market where the Property is
located which shall highlight the Property's position in its relevant market and discuss matters
such as vacancy, new construction and rental trends. The proposed annual budget for any Fiscal
Year once submitted by Manager and thereafter approved by Owner, shall herein be referred to
as the "Budget."
(e) Budget Approval. Owner shall approve, disapprove or comment on the
proposed annual budgets within thirty (30) days after Owner's receipt of same. Owner may
approve, disapprove or modify any proposed annual budget in whole or in part.
(f) Operation Within Budget. The Budget shall constitute a major control
under which Manager shall operate the Project, and there shall be no variances therefrom except
as permitted by other provisions of this Agreement or approved in advance by Owner in writing.
Consequently, except as permitted by other provisions of this Agreement, no expenses may be
incurred or commitments made by Manager in connection with the maintenance and operation of
the Project which exceed the amounts allocated to the corresponding summary accounts in the
Budget for the period in question by more than five percent (5%) without the prior consent of
Owner; provided that the foregoing limitation shall not apply to the Management Fee (which will
be determined as provided in this Agreement), or to expenses for taxes, insurance, utilities or
other non -controllable expenses, or to expenditures required due to emergencies that (i) threaten
life, injury or property, or (ii) could result in civil or criminal liability for Owner and/or
Manager; and provided that Manager may pay expenses in excess of Budget allowances if the
expenses represent reallocation among periods of amounts otherwise allowed by this provision.
(g) Manager shall use, manage and operate the Property strictly in accordance
with the then current Budget, provided that, without Owner's prior approval, Manager may incur
expenses in excess of the Budget in the event of an emergency requiring immediate action to
avoid imminent personal injury or imminent material property damage.
(h) If a proposed annual budget is disapproved by Owner in whole or in part,
or if a proposed annual budget is not approved prior to the commencement of the ensuing Fiscal
Year, Manager shall continue to manage and operate the Property pursuant to the prior year's
Budget (except for non -recurring expenditures and capital expenditures which shall be deemed
removed from such prior year's Budget), until Manager and Owner can resolve their differences,
provided, however, that Manager shall, unless otherwise directed by Owner, be authorized to
pay, as an expense of the Property, all non -discretionary items, such as insurance, utilities, taxes
and debt service. Manager has the authority to expend funds as provided for herein in
Page 13 of 32
107344706.8
accordance with the provisions of the current Budget, provided that Manager shall not be
required to expend its own funds if there are insufficient funds available in the Operating
Account. Manager's failure to manage the Property in accordance with the Performance
Standard shall be excused if Manager is prevented from doing so due to the failure to approve a
Budget.
(i) Books and Records. Manager shall maintain, and keep at its main office
accurate books, records and accounts of the management, operation and financial condition of
the Property's operations. Such books, records and accounts shall be prepared and kept on a
financial accounting basis specified in writing by Owner.
0) Owner shall at all times retain title to the information constituting such
books, records and accounts. Manager shall, during the Term, retain such books, records and
accounts. Any and all computer programs, software and hardware not the property of Owner
utilized by Manager to maintain such books, records and accounts shall in all events remain the
property of Manager.
(k) Upon reasonable notice to Manager, Owner may, at its expense, inspect,
audit and copy such books, records and accounts during regular business hours on a periodic or
continuing basis by accountants retained by, or other representatives of Owner, and Manager
shall cooperate fully with Owner in connection with the same.
(1) Weekly Reports. Manager shall furnish to Owner (without notice or
demand by Owner) an occupancy report for the Property within two (2) business days after the
end of each work week typically ending on Sunday.
(m) Monthly Reports. Manager shall furnish to Owner the monthly reports
specified by Owner. Such reports shall show the monthly and year to date activity not later than
fifteen (15) days after the end of the prior calendar month.
(n) Tax Matters Reporting. Manager shall coordinate with Owner's
accountants and cooperate in the preparation of Owner's tax return including, but not limited to,
supplying requested information for preparation of such tax return. The tax return will be
prepared by Owner's accountants on a timely basis and the cost of preparation and filing of the
tax return will be borne by Owner. Owner's accountant shall prepare, where applicable, Federal,
state and local income, franchise and net worth tax returns. Owner shall provide copies of all
Property related tax bills to the Property Accounting Manager and to the Corporate Controller,
via email or as otherwise provided in Section 8.1 hereof.
(o) Accounting Policies and Procedures. Notwithstanding anything to the
contrary contained herein, Manager shall prepare and deliver all reports in accordance with, and
shall otherwise comply with, Owner's accounting policies and procedures as reasonably adopted
from time to time and provided to Manager in writing.
(p) Other Reports. Manager shall provide such other reports as Owner may
reasonably request.
3.6. Bank Accounts.
(a) Manager shall maintain an operating account in the name of Owner (the
Page 14 of 32
107344706.8
"Operating Account"). In addition, Manager shall maintain an account for the Property in the
name of Owner or Manager (as required by law) for tenant security deposits (the "Security
Deposit Account"), which Security Deposit Account shall be interest bearing if allowed or
required by applicable law.
(b) The Operating Account and the Security Deposit Account shall be
maintained at a bank as determined by Owner (the "Depository"). All bank accounts shall
require two authorized signatories to draw on such accounts for payments in excess of Twenty -
Five Thousand Dollars ($25,000). Manager shall also obtain email approval from Owner's asset
manager for any draws in excess of Twenty -Five Thousand Dollars ($25,000). Manager's
representatives approved by Owner shall be empowered to draw upon such accounts. Owner's
representatives specified in writing by Owner shall also be empowered to draw upon the
Operating Account. In addition, Owner, upon termination of this Agreement, shall have, and is
hereby granted, the authority to terminate the authority of Manager and its officers and
representatives to draw upon such accounts. All funds received by Manager with respect to the
Property shall be held by Manager in trust for Owner, shall not be commingled with Manager's
other funds, and shall be deposited by Manager in the Operating Account. Manager shall in no
event have any liability in the event that the Depository should fail, go into receivership or
conservatorship or if such funds are otherwise not available for reasons beyond Manager's
reasonable control.
(c) At Owner's cost, Manager shall employ the use of ACH fraud filters,
positive pay services (such as positive pay, positive pay with payee validation, or reverse
positive pay) and payment authorization services for all applicable bank accounts for the
Property (collectively "Positive Pay Practices") and adopt the Positive Pay Practices that are
recommended by the Depository and approved by Owner. If Manager complies with the
provisions of this Section, but Owner nevertheless suffers or incurs a loss from payment of
fraudulent or unauthorized instruments, Manager shall work with the Depository and assist
Owner in recovering the loss. If Manager fails to comply with the provisions of this Section and
Owner suffers or incurs a loss from payment of fraudulent or unauthorized instruments, Manager
shall reimburse Owner for such loss. If Owner declines to utilize Positive Pay Practices, any
loss from fraud or unauthorized payments shall be the responsibility of Owner.
(d) Manager shall indemnify and hold harmless Owner from and against any
and all Damages occurring by reason of any unauthorized application by Manager or its
directors, officers, employees or representatives of any such funds held for the account of
Owner.
(e) Manager shall cause the transfer of all of the available excess funds in the
Operating Account to an account in the name of Owner to be maintained at a bank determined by
Owner, on a schedule determined by Owner.
(f) Manager shall ensure that security deposits are deposited promptly in the
Security Deposit Account. As needed, Manager shall withdraw such amounts from the Security
Deposit Account as necessary to (i) repay a security deposit (or portion thereof) to a Tenant as
required pursuant to the terms of such Tenant's Lease; and (ii) cause the transfer of a forfeited
security deposit (or portion thereof) to the Operating Account.
(g) A cash reserve in the amount of One Hundred Fifty Dollars ($150) per
rental unit (the "Working Capital Reserve") shall be maintained in the Operating Account and
Page 15 of 32
107344706.8
shall be readily available to Manager during the Term to be used in connection with the
operation of the Property in accordance with the terms of this Agreement. Additionally, a cash
reserve in an amount equal to two (2) weeks of the Property's estimated salary and employee
benefit expenses (the "Payroll Reserve") shall be maintained in the Operating Account or in a
separate Payroll Account and shall be readily available to Manager during the Term to be used in
connection with the operation of the Property in accordance with the terms of this Agreement. If
at any time during the Term the Working Capital Reserve and/or the Payroll Reserve is
diminished, Manager will request, in writing to Owner, that the necessary additional funds be
deposited by Owner in an amount sufficient to maintain the reserve amounts required above.
Owner will deposit the additional funds requested by Manager within five (5) days of receiving
such written request. In the event Owner does not adequately replenish such reserve funds
within said period, Manager may elect to terminate this Agreement.
3.7. Payment of Expenses and Capital Expenditures.
(a) Manager shall pay all expenses of operating the Property from the
Operating Account including, without limitation, Operating Expenses, debt service and capital
expenditures. All such expenses shall be paid in the order provided for in subsection 3.7(c)
below. At the discretion of Owner, capital expenditures may be required to be requisitioned and
approved by Owner prior to payment or be funded separately by Owner. If Owner elects to fund
the capital expenditures separately, capital expenditures are to be requested based on actual
expenditures and supported by actual invoices.
(b) If the funds on deposit in the Operating Account are insufficient or
projected to be insufficient to cover the amounts necessary to pay the Operating Expenses, debt
service and capital expenditures for such month, Manager shall promptly notify Owner, and
Owner shall make up such negative cash flow by depositing an amount equal to the deficit in the
Operating Account. Manager will not be obligated to, advance Manager's own funds on behalf
of Owner to make up any negative cash flow.
(c) Manager shall use the Operating Account to pay when due the following
items in the following order of priority:
(i) all property and liability insurance premiums on the Property;
(ii) debt service;
(iii) all utility charges as and when they become due and payable with
respect to the Property;
(iv) all real estate taxes as and when they become due (if Owner has
provided copies of the tax bills in sufficient time to allow for payment by Manager);
(v) reimbursable payroll expenses including all state and federal taxes
incident to the payroll and incident to the performance of services by personnel at the
property;
(vi) all other fees, costs and expenses payable pursuant to this
Agreement, including the Management Fee and other amounts due to Manager under this
Agreement;
Page 16 of 32
107344706.8
(vii) all proper charges due and payable under the Contracts;
(viii) all amounts necessary to purchase supplies, tools, uniforms and
other materials necessary for the proper maintenance and operation of the Property; and
(ix) all capital expenditures for such period.
(d) Owner shall reimburse Manager for all actual out-of-pocket expenses
incurred and paid by Manager in connection with the management, maintenance, repair and
operation of the Property pursuant to the Budget. Such expenses shall not include (i) Manager's
central office overhead, other central office general, leasing or administrative personnel or other
expenses, or office equipment expenses, (ii) travel expenses to and from the Property, (iii) the
costs of providing the reports and documents to be provided pursuant to the provisions hereof,
(iv) costs and expenses (including overhead) attributable to services rendered by off -site
personnel of Manager or its Affiliates in connection with the management, leasing and operation
of the Property, and (v) the cost of premiums to maintain the insurance required to be maintained
by Manager pursuant to Section 5.2, except to the extent such expenses are expressly set forth in,
and are in accordance with, the Budget. Manager's current Pricing Schedule for such
reimbursements is attached hereto as part of Exhibit B and is subject to changes in January of
each year upon written notice to Owner or as otherwise agreed by the parties. The pricing will
be incorporated into the Budget for the Property.
3.8. Services with Respect to Financing. Manager shall, at the expense of Owner, in
accordance with the Budget, duly and punctually pay and perform on behalf of Owner all of
Owner's obligations under the Financing Documents that have been delivered to Manager which
relate to the operation of the Property
3.9. Intellectual Property. All Trademarks that identify the Property, Owner, any
Affiliate of Owner or that are otherwise owned by Owner or any Affiliate of Owner are the sole
property of Owner or its Affiliates. All Trademarks that identify Manager are the sole property
of Manager or its Affiliates.
3.10. Website & Domain Names. Manager shall take all actions (subject to Owner's
approval) to establish and continuously maintain at least one website at an appropriately titled
domain name for the Property ("Website"). Rights to the Website including all content, artwork,
graphic designs, links, layout, look and feel, works of authorship, software (both in object and
source code form), work flows and processes, documentation and all other information needed to
run the Website shall be the sole property of Owner; provided that the Trademarks of Manager
shall remain the property of Manager. Manager shall, upon expiration or earlier termination of
this Agreement, make arrangements to transfer such Website and/or information including all
content, artwork, graphic designs, layout, look and feel, works of authorship, software (both in
object and source code form), work flows and processes, documentation and all other
information needed to run the content on a separate and distinct website to Owner or another
Person designated by Owner, with appropriate releases or transfers of rights with respect to all of
the same. All domain names registered in connection with a Website shall list Owner or another
Person designated by Owner as the registrant.
4. Services with Respect to Property Sales and Post Sale -Closing. In regard to any
potential sale of the Property, Manager shall cooperate with Owner during the due diligence
process and shall make available to Owner copies of such reports as are regularly generated for
Page 17 of 32
107344706.8
FC 71iM-
5. Insurance
5.1. Insurance for the Property. Owner shall obtain and maintain insurance in full
force and effect, with respect to the Property and any personal property of Owner located at the
Property, under insurance policies issued by insurance companies which have an A.M. Best
General Policyholder's Service rating of not less than "A-VIII" (or otherwise satisfactory to
Owner and Manager). The insurance policies described in this Section 5.1 shall be comprised of
the following coverages:
(a) "All Risk" property damage insurance including, without limitation, fire,
flood, sprinkler leakage, windstorm, water damage and earthquake, if applicable and available at
commercially reasonable rates, in an amount equal to 100% of full replacement cost of the
Property and having a deductible approved by Owner. The policies of insurance carried in
accordance with this subsection 5.1(a) shall contain (i) a replacement cost endorsement without
deduction for depreciation or obsolescence and (ii) a waiver of subrogation clause, all in form
satisfactory to Owner.
(b) Rental value insurance on the Property, if applicable, with a minimum
twelve (12) month indemnity period.
(c) Business interruption insurance, if applicable, with a minimum twelve
(12) month indemnity period and including ordinary payroll coverages with a valuation clause
covering actual loss sustained on business interruption and extra expense if appropriate.
(d) Commercial general liability insurance, written on an occurrence basis,
including products and completed operations and personal injury coverage with a minimum
combined single limit for any one occurrence of $2,000,000.
(e) Excess liability insurance with a limit of not less than $5,000,000.
5.2. Manager's Insurance. Manager shall, at all times and at the expense of
Manager, maintain in full force and effect insurance policies issued by insurance companies
which have an A.M. Best General Policyholder's Service rating of not less than "A-VIII"
providing the following coverage:
(a) Worker's compensation subject to the statutory limits of the state in which
the Property is located. Manager shall provide Owner with a certificate evidencing such
coverage with the following provisions: (i) coverage for injury, death or occupational disease of
Manager's employees arising out of or in the scope of employment; and (ii) employer's liability
insurance with a limit of at least $1,000,000 per each accident and per each employee.
(b) Comprehensive automobile liability insurance covering owned, non -
owned, and hired vehicles in an amount not less than $1,000,000 combined single limit for
bodily injury and property damage. Such requirements may be satisfied by layering of
comprehensive automobile liability, umbrella and excess liability policies.
Page 18 of 32
107344706.8
(c) Fidelity bond or fidelity insurance with an annual limit of a minimum of
$1,000,000 for each director, officer, employee or agent of Manager associated with the
management of the Property including the handling of receipts and disbursements.
(d) Commercial general liability insurance, written on an occurrence basis, in
an amount not less than $1,000,000 per occurrence and $2,000,000 annual aggregate.
(e) Excess liability insurance with a limit of not less than $10,000,000 annual
aggregate. Such umbrella liability insurance shall apply in excess of Manager's commercial
general liability insurance and automobile liability insurance.
(f) Professional liability insurance with an annual limit not less than
$5,000,000 each claim and in the annual aggregate with an extended period of indemnity. Such
insurance policy shall survive the termination or expiration of this Agreement for a minimum
two (2) years following the expiration or termination of this Agreement.
(g) Employment practices liability insurance, including coverage for third -
party claims, with an annual limit of $1,000,000.
5.3. Blanket Insurance. Either party may effect any coverage required hereunder
under a blanket insurance policy satisfactory to Owner.
5.4. Policies.
(a) The insurance maintained under Section 5.1 shall name Owner as the
named insured and Manager as a defined insured or as an additional insured. The insurance
maintained under Section 5.2 shall name Manager as the insured and Owner as a defined insured
or as an additional insured.
(b) As to claims for Excluded Actions of Manager or any Manager
Indemnified Party, the insurance required to be maintained by Manager under Section 5.2 shall
be primary and non-contributory to any other insurance which may be maintained by Owner. In
all other cases the insurance specified in Section 5.1 shall be primary and non-contributory.
(c) All insurance maintained under Article 5 shall provide that (i) no
cancellation or reduction thereof shall be effective until at least ten (10) days after receipt by
Owner and Manager of written notice thereof, and (ii) all losses shall be payable notwithstanding
any act, omission, or any form of negligence of Manager or any of its partners, directors,
officers, employees or agents which might, absent such agreement, result in a forfeiture of all or
part of such insurance payment, (iii) the occupation or use of the Property for purposes more
hazardous than permitted by the terms of such policy, (iv) any foreclosure or other action or
proceeding taken pursuant to the provision of any mortgage with respect to the Property, and/or
(v) any change in title or ownership of the Property.
(d) The parties shall each furnish to the other party certificates of insurance or
other evidence reasonably satisfactory to the requesting party of the renewal thereof, and
evidence reasonably satisfactory of payment of the premiums therefor. Failure by either party to
demand such evidence with these insurance requirements or failure by either party to identify a
deficiency from evidence provided will not be construed as a waiver of either party's obligation
to maintain such insurance.
Page 19 of 32
107344706.8
5.5. Cooperation. Owner and Manager agree to fully cooperate, participate and
comply with all reasonable requirements and recommendations of the insurers and insurance
brokers issuing or arranging for issuance of the policies required herein, in all areas of safety,
insurance program administration, claim reporting and investigating and audit procedures.
5.6. Claims. In the event of an alleged loss or claim (a "Claim") under any of the
insurance policies described in subsections 5.1 and 5.2, Manager shall, when Manager has
knowledge of the loss, notify Owner of any such Claim within two (2) business days of acquiring
such knowledge. Manager shall also provide Owner with a copy of any Incident Report, legal
notice, and other information and documentation which Owner might need to respond to the
Claim. If requested by Owner, Manager will aid Owner in tendering the Claim to Owner's
insurer. Without the prior written approval of Owner, Manager shall have no right to settle,
compromise or otherwise dispose of any claim, demand, suit, or other proceeding against Owner,
whether or not covered by insurance.
5.7. Subrogation. Each party hereby waives all rights of subrogation against the
other party to the extent allowed by law.
6. Manager's Compensation.
6.1. Management Fee.
(a) Owner shall pay to Manager, and Manager shall accept, as compensation
for Manager's management and leasing services during the Term, a fee ("Management Fee") on
a monthly basis in the amount of two and one-half percent (2.5%) of Gross Receipts actually
collected by Manager during that calendar month.
(b) Eighty percent (80%) of the estimated Management Fee, based on the
prior month's Gross Receipts, shall be payable by the tenth (1 Oth) day of each calendar month,
with the full balance being payable on or prior to the last day of the month to which it relates.
Manager is hereby authorized to pay itself the Management Fee from the Operating Account.
(c) Manager shall provide an accounting of the Management Fee paid on a
monthly basis.
6.2. Termination Fee. In the event Owner terminates this Agreement during the
Initial Term for any reason other than the breach of this Agreement by Manager, Owner shall
pay to Agent a "Termination Fee" equal to two (2) months' Management Fees, provided that if
the Agreement is terminated by Owner pursuant to Section 7.3(d), the Termination Fee will be
the Management Fee due for the 30 days from the date that notice is given to terminate the
Agreement until the termination becomes effective plus one additional month's Management
Fees (i.e., a total of 30 days plus one month's worth of Management Fees from the date that the
Agreement is terminated by Owner pursuant to Section 7.3(d)). The Termination Fee shall be
payable Manager within ten (10) business days following the termination date of this Agreement
and shall be based on the Gross Receipts during the last full month of the Term of this
Agreement prior to termination.
6.3. Construction Management Fee. Construction Management Services and fees
will be subject to a separate agreement between Owner and Manager or an Affiliate of Manager.
Page 20 of 32
107344706.8
6.4. No Other Fees. Except for fees expressly provided in this Article 6, and as
otherwise specified herein, Owner shall not be obligated to pay Manager any additional fee for
any services covered by the terms of this Agreement.
7. Term and Termination.
7.1. Initial Term. The initial term of this Agreement shall commence as of the
Effective Date and shall expire on the first (1st) anniversary of the date hereof (the "Initial
Term"), unless extended or sooner terminated as hereinafter provided.
7.2. Extension. After the expiration of the Initial Term, and subject to termination
under Section 7.3, the term of this Agreement shall be automatically extended on a month -to -
month basis (the "Renewal Term"). The Initial term and the Renewal Term are collectively
referred to as the "Term."
7.3. Termination.
(a) This Agreement shall automatically terminate upon the consummation of
any of the following: (i) the sale by Owner of all of its right, title and interest in and to the entire
Property (including any sale by assignment, foreclosure, deed in lieu of foreclosure, or sale of all
of the direct or indirect ownership interests in Owner), or (ii) the sale by Owner of all of its right,
title and interest in and to a portion of the Property, in which case the termination shall be
effective only as to such portion of the Property sold. This Agreement shall terminate, at the
option of Owner, upon a casualty resulting in all or a substantial portion of the Property being
untenantable or upon a condemnation of all or a substantial portion of the Property.
(b) Owner may terminate this Agreement if any one or more of the following
events (each an "Event of Default") shall occur and be continuing:
(i) if Manager shall assign this Agreement or delegate its duties
hereunder without the consent of Owner;
(ii) if any material license or qualification held by Manager and
necessary for the performance of its duties or services hereunder shall be terminated or
suspended, and such termination or suspension, as the case may be, is not remedied
within fifteen (15) days of such termination or suspension;
(iii) if Manager or any of its directors, officers or employees shall
misappropriate any funds of Owner or shall take any action (or omit to take any action)
constituting gross negligence, bad faith, fraud, malfeasance, or willful, reckless or
criminal misconduct in connection with Manager's duties hereunder;
(iv) if Manager shall fail to pay any amount payable to Owner under
this Agreement when due and such default shall continue for three (3) business days after
notice thereof to Manager;
(v) if Manager shall breach any material provision of this Agreement
and such default shall continue for ten (10) business days after notice of such breach is
given by Owner to Manager;
Page 21 of 32
107344706.8
(vi) if Manager shall fail to follow any lawful direction of Owner with
respect to the Property which direction complies with this Agreement and such default
shall continue for three (3) business days after notice of such default given by Owner to
Manager;
(vii) if Manager shall commence any form of bankruptcy or
receivership proceeding as to Manager;
(viii) an unrelated third party shall commence involuntary bankruptcy
proceedings against Manager and such proceedings shall not be dismissed within sixty
(60) days;
(ix) if there shall be a dissolution or termination of the entity existence
of Manager by merger, consolidation or otherwise;
Following the occurrence of any such Event of Default, Owner shall have the right to terminate
this Agreement by written notice to Manager and to exercise any and all other rights and
remedies available under this Agreement and at law or in equity.
(c) Manager may terminate this Agreement in the event Owner does not pay
or reimburse any amounts due to Manager in accordance with the terms of this Agreement and
such failure continues for ten (10) business days after notice of such default is given by Manager
to Owner. Manager shall have the right to terminate this Agreement by written notice to Owner
and may also exercise any and all other rights and remedies available under this Agreement.
(d) Notwithstanding anything to the contrary contained herein, either party
shall have the right to terminate this Agreement upon thirty (30) days' prior written notice to the
other party, with or without cause. If this Agreement is terminated by Owner pursuant to this
Section 7.3(d) prior to the expiration of the Initial Term, Owner shall pay the Termination Fee
contemplated under Section 6.2. In all other events, this Agreement may be terminated pursuant
to this Section 7.3(d) without termination fee, premium or penalty.
Following the expiration or termination of this Agreement, Manager shall cooperate fully with
Owner and Owner's agent and representatives to effectuate an orderly transition in connection
with the management and/or operation of the Property. Upon the expiration or termination of
this Agreement, or as otherwise provided herein, Manager shall deliver to Owner any (i) monies
owed to Owner and/or tenant security deposits held or received by Manager for Owner's
account, (ii) a final accounting within forty-five (45) days after the last day of the calendar
month in which such termination occurs, (iii) all books, records, Leases, Contracts, agreements,
and other documents and instruments in Manager's possession or control relating to the Property,
or the management or operation thereof, (iv) the unused inventory of all supplies, materials, tools
and equipment used in connection with the management and/or operation of the Property, (v) all
alarm codes for the Property, all userriames and passwords for computers and accounts for the
Property, all keys to any locks on the Property then in the possession of Manager, and any plans
and specifications pertaining to the Property then in the possession of Manager, and (vi) the
source code and object code of all content, artwork, graphic designs, links, layout, look and feel,
works of authorship, software, work flows and processes, documentation and all other
information that are part of the Website.
7.4. Determination of Fees. All fees and other sums payable by Owner to Manager
Page 22 of 32
107344706.8
hereunder (including the Management Fee) shall cease and be determined (subject to claims by
Owner for Damages in connection with defaults by Manager) as of the expiration or termination
of this Agreement. The Management Fee for partial months shall be prorated on the basis of the
number of days in said month.
8. Miscellaneous.
8.1. Notices. All notices, requests, permissions, waivers and other communications
(individually and collectively, a "Notice") to either party hereunder shall be in writing and,
unless otherwise specified herein, shall be delivered by hand, electronic mail (email), United
States certified mail, return receipt requested, United States Express Mail, FedEx, or any other
national overnight express delivery service (in each case postage or delivery charges paid by the
party giving such communication) addressed to the party to whom such communication is given
at its address or email address set forth below:
If to Owner: Aukum Group LLC/RE: Montclair Heights Apartments
Attn: Jason Fuchs
900 Larkspur Landing Circle, Suite 100
Larkspur, California 94939
Email: jason@aukum.com
If to Manager: Avenue5 Residential, LLC
Attn. Chief Executive Officer
901 5th Avenue, Suite 3000
Seattle, Washington 98164
Email: wsmith@avenue5.com
Unless otherwise specified herein, each such Notice addressed and given as set forth
above shall be effective (i) the date of receipt of such Notice, or attempted delivery of such
Notice, if receipt is refused; and (ii) if sent by mail as aforesaid, the date which is three days after
such Notice is deposited in the mail, postage prepaid as aforesaid. Any party listed above may
change its address under this Section 8.1 by notice to the other parties listed above provided that
no such address shall be located outside of the United States of America. As a condition to the
effectiveness of any Notice delivered by email, a confirmation copy of such Notice must also be
delivered by hand, United States certified mail, return receipt requested, United States Express
Mail, FedEx, or any other national overnight express delivery service, unless the recipient
thereof confirms receipt by reply email.
8.2. No Partnership, No Interest in Real Estate, Subordination. Nothing in this
Agreement shall be construed as making Owner or Manager partners, joint ventures or members
of a joint enterprise or as creating between Owner and Manager any employer employee
relationship. Nor shall Manager shall be considered to be the fiduciary of Owner. Manager shall
execute and deliver the form of subordination agreement required by Owner's lender from time
to time.
8.3. Severability. If any provision of this Agreement or the application thereof to any
Person or circumstances shall be held invalid or unenforceable, the other provisions of this
Page 23 of 32
107344706.8
Agreement or the application of such provision to other Persons or circumstances shall not be
affected thereby but shall continue to be valid and enforceable to the fullest extent permitted
under applicable law.
8.4. Modification. Except as specified herein, no provision of this Agreement shall
be modified, waived or terminated except by an instrument in writing signed by the party against
whom such modification, waiver or termination is to be enforced.
8.5. Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit of Manager
and Owner and their respective successors and assigns, and all references in this Agreement to
"Manager" and "Owner" shall include the respective successors and assigns of such parties.
(b) Notwithstanding the foregoing, Manager shall not assign this Agreement
or delegate its duties and obligations hereunder without the prior written consent of Owner,
which consent may be granted or withheld in the sole and absolute discretion of Owner.
8.6. Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be deemed to be an original, with the same effect as if the signatures thereto
and hereto were on the same instrument. Counterpart signatures pages may be delivered by
electronic mail.
8.7. Exclusive Benefit. Neither this Agreement nor any provision hereof nor any
service, relationship or other matter alluded to herein shall inure to the benefit of any third party
(except a successor or assign of Owner and its mortgagees, if any), 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 in such an estate.
9. Arbitration of Disputes. As to any matter of disagreement, dispute or controversy
between the parties hereto, either party may demand that such disagreement, dispute or
controversy be submitted to arbitration. The arbitration shall be in accordance with the
Commercial Rules for Arbitration of the American Arbitration Association (provided that there
shall be a single arbitrator). Such arbitration shall be deemed to be subject to the Federal
Arbitration Act and such act shall apply as to all matters which are subject to such statutes. Any
award rendered shall be final and conclusive upon the parties. Any party may apply to a court of
competent jurisdiction for a judgment enforcing the Arbitration Award. If any controversy is
held to be outside of the agreement to arbitrate, the parties agree that such dispute shall be
resolved without a jury. The location of the Arbitration shall be within the State and County
where the property is situated or at such other location as the parties shall agree upon. The
arbitrator shall have the authority to issue preliminary orders, temporary and preliminary
restraining orders.
9.1. Limitation of Damages. Owner and Manager hereby expressly waive any right
to exemplary or punitive damages (other than any such damages actually owing by such waiving
party to a third party) with respect to any claim, demand, action or cause of action arising under
this Agreement. The parties further waive all claims for incidental and consequential damages.
9.2. Litigation Fees and Expenses. The prevailing party in any action or arbitration
Page 24 of 32
107344706.8
and in any appeal, shall be entitled to recover its costs and expenses of litigation including but
not limited to arbitration fees, filing fees, service fees, and the reasonable fees and expenses of
attorneys and expert witnesses.
10. Confidentiality. Manager agrees for itself and all Persons retained or employed by
Manager in performing its obligations hereunder to hold in confidence and not to use or disclose
to others any matters pertaining to the finances of the Property or the physical condition of the
Property. Manager shall also maintain the confidentiality of the Tenants, to the extent required
by law. Manager may disclose the identity of the Owner so as to avoid acting as an agent for an
undisclosed principal.
11. Competing Properties. Owner and its Affiliates, and Manager and its Affiliates may
own, invest in, develop, operate, manage and/or lease properties which may compete with the
Property. Such ownership shall not be considered to be a breach of this Agreement.
(Signature Page Follows)
Page 25 of 32
107344706.8
IN WITNESS WHEREOF, Owner and Manager have executed and delivered this
Agreement as of the date first above written.
OWNER:
AUK -Montclair LLC,
a Delaware limited liability company
Co -Owner, Tenant in Common
FLP-Montclair LLC,
a Delaware limited liability company
Co -Owner, Tenant in Common
KFP-Montclair LLC,
a Delaware limited liability company
Co -Owner, Tenant in Common
By: Aukum Group LLC,
a Delaware limited liability company
Asset Manager for Tenancy -in -Common
By:
Name: J46n Fuchs
Its: Manager
MANAGER:
AVENUES RESIDENTIAL LLC,
a Delaware limiodLiability company
(seal)
By:
(Pr' t Name)
Its:
Date:
Page 26 of 32
107344706.E
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
That portion of the Southwest quarter of Section 20 and the Northwest quarter of Section 29, Township 23
North, Range 5 East, W.M., in King County, Washington, described as follows:
Beginning at a point on the South line of Section 20 and the East line of Puget Sound Power and Light
Company's 70-foot right-of-way, which point is North 87109'25" East 70.26 feet from the Southwest corner
thereof;
THENCE North 2106'30" East along said East line on a line parallel to and 70 feet East of, when measured at
right angles to the West line of said Section 20, a distance of 501.87 feet to the Southwest corner of a tract
sold to Washington Natural Gas Company by deed dated January 23, 1964, and recorded under Recording No.
5694120;
THENCE North 87009'25" East along the South line of said Gas Company Tract 801.99 feet to the Southeast
corner of said Tract;
THENCE South 21020'40" East 527.25 feet to the South line of Section 20;
THENCE North 87109'25" East along said South line 179.27 feet to the West line of S.S.N. No. 5-6 "Benson
Road";
THENCE Southerly along said West line 1,377.83 feet to a point on the East-West 1/16 line of the Northwest
quarter of said Section 29 which bears North 88112'53" East 24.42 feet from the center of said Northwest
quarter;
THENCE South 88112'53" West 24.42 feet to the center of said Northwest quarter;
THENCE South 1041'56" West along the North -South 1/16 line of said Northwest 1/4 850.50 feet;
THENCE South 89116'31" West parallel to the South line of said Northwest quarter 595.85 feet to the Easterly
line of Puget Sound Power and Light Company's 100-foot right-of-way;
THENCE North 19°58'29" West along said Easterly line 1,758.05 feet to a point 70 feet East of, when
measured at right angles to the West line of said Northwest quarter;
THENCE North 1°41'07" East parallel to said West line 493.99 feet to the Point of Beginning;
EXCEPT the South 100 feet of the East 100 feet of the Northwest quarter of the Northwest quarter of Section
29, and the North 100 feet of the East 100 feet of the Southwest quarter of the Northwest quarter of Section
29, and that portion of the Northeast quarter of the Northwest quarter of Section 29, lying Westerly of Benson
Road and South of the East prolongation of the North line of said South 100 feet of the East 100 feet of the
Northwest quarter of the Northwest quarter;
AND EXCEPT that portion on the West as conveyed to the State of Washington for SR 515 by Deed recorded
under Recording No. 7411190258;
AND EXCEPT that portion thereof platted as VICTORIA MILLS, according to the plat thereof recorded in
Volume 113 of Plats, pages 79 through 83, inclusive;
Also that portion of the Southwest quarter of Section 20, Township 23 North, Range 5 East, W.M., in King
County, Washington, described as follows:
Beginning at the Southwest corner of said Southwest quarter;
THENCE North 87009'25" East along the South line thereof 1262.15 feet to the West line of S.S.N. No. 5-C and
the True Point of Beginning;
THENCE North 21020'40" West along said West line 796.91 feet to the intersection of Puget Drive and S.S.N.
No. 5-C;
THENCE North 56115'12" West along said Intersection 139.29 feet to the arc of a curve to the right, the
center of which bears North 17051'28" East 384.26 feet, said Curve being the Southerly line of Puget Drive;
THENCE along said Curve to the right an arc distance of 137.46 feet to a point on the curve, the center of
which bears North 38020'55" East;
THENCE South 21020'40" East 957.12 feet to the South line of said Southwest quarter;
THENCE North 87009'25" East along said Line 179.27 feet to the True Point of Beginning;
107344706.8
EXCEPT that portion thereof condemned in King County Superior Court Cause Number 668210 for Secondary
State Highway No. 5-C;
AND EXCEPT that portion thereof conveyed to the City of Renton by Deed recorded under Recording No.
9210261059;
Said Land being formerly described as follows:
Units A,B,C,D,E,F,G,H,I,J,K,L,M,N,O,P,Q,R,S,T,U,V,W,X,AA, BB, CC, DD,EE,FF,GG,HH,II
and JJ of HILLSIDE VILLA CONDOMINIUM, a Condominium, according to the Declaration thereof recorded
under King County Recording No. 9011191708, together with all interest in the common and limited common
areas, and any amendments thereto, and in Volume 101 of Condominiums, pages 40 through 44, records of
King County, Washington;
EXCEPT that portion thereof conveyed to the City of Renton by Deed recorded under Recording No.
9210261059.
SITUATE in the County of King, State of Washington
107344706.8
EXHIBIT B
PRICING SCHEDULE
Avenues 2019/2020 Pricing Summary
New Hire (Screening)
$190/new hire hardcoded in budget
New Hire (Recruiting)
$250/new hire
Payroll Processing Fee
$34.50/associate per pay period
2020 Benefits
$313/pay period/associate
401(k)
50% up to 6%
National Leadership Conference
$1,900/per property annually
Associate Engagement
$10/associate per month
Career Development Support
$1.95/unit (under 250 units) per month
$1.65/unit (over 251 units) per month
Property Marketing
$1.20/unit per month
Administrative (Postage, Checks, Envelopes)
$0.35/unit per month
Technology (Standard Support)
$1.60/unit per month
Technology (Premium Support)
$1.90/unit per month
(optional support upgrade)
Avenue5 Yardi/Rent Caf6
$5.75/unit per month
Yardi Conversion
$3,000/one time fee
Client -hosted Yardi or Onesite
$3.25/unit per month
Account Tree
$2,000/per account tier
Spend Management
$1.00/unit per month
Rentlytics Business Intelligence Tool
$0.75/unit per month
Rentlytics Business Intelligence Tool Setup
$1.25/onetime fee per unit
Affordable Compliance Monitoring
$7.50/unit per month
Revenue Management (Yieldstar)
$3.68/unit per month
Yieldstar Setup
$4,000 setup/one time
Revenue Management (LRO)
$3.55/unit per month
LRO Setup
$4,000 setup/one time
Rent Maximizer
$2.75/unit per month
Rent Maximizer Setup
$1,000 setup/one time
Yardi Concierge
$0.75/unit per month
Active Building
$1.50/unit per month + setup cost
Avenue5 maintains partnerships with thoroughly vetted suppliers who have agreed
to provide us with highly competitive pricing, responsive service and innovative products.
*ALL PRICES ARE SUBJECT TO CHANGE ON AN ANNUAL BASIS
Page 28 of 32
107344706.9
EXHIBIT C
POST TENANCY BILLING & COLLECTION ADDENDUM
Avenue5 Billing and Collection Program Summary
Avenue5 offers a successful and comprehensive post move out billing and collection program.
This program has been designed to process move outs with a remaining balance due at the time
of vacancy in an efficient and timely manner to maximize recovery and mitigate risk. The
department is a valuable resource to our clients, associates and past residents, as we specialize in
Landlord tenant law, fair housing and collection law. Also, as first party representatives or agents
for the property owner, we are not governed by collection law. This allows for more flexibility
and almost no restrictions when attempting to collect a debt.
Avenue5 Mandated Policy:
Pre -Collect
• All move outs with a balance due, after the deposit has been applied, will automatically be
identified and sent electronically to the Avenue5 Billing Department via the management
software within 5 days after move out.
• Properties will send out final disposition/ledger prior to auto placement from the management
software system.
• Avenue5 Billing will complete a file audit and manage compliance to ensure all charges,
including accelerated rents and damages that may have been applied after move out and the
initial move out inspection.
• If necessary, Avenue5 Billing will revise and rebill all leaseholders if any changes have been
made since the original disposition was delivered.
• Avenue5 Billing will send multiple billing notifications via our electronic billing system until
the bill is either paid or closed.
Collections (post pre -collect)
• If no contact or payment has been made after 30-days Avenue5 Billing Specialists will begin
collection activity on the debt owed.
• Avenue5 Billing Department will work to collect debt owed (e.g. call ex -resident and/or
references, employers, send notifications via email and mail) until payment full payment has
been received or an approved payment arrangement has commenced.
• All accounts that remain unpaid, without a commenced payment arrangement may be
forwarded to a Yd party agency no sooner than 90 days from the delinquency date.
• At no time after the file is listed with Avenue5 Billing may the property discuss, negotiate,
make payment arrangements or accept payment on behalf of Avenue5 Billing without the
approval of the Billing Department Executive.
• All payments, correspondence or communication received at the property in any form must
be delivered to the Avenue5 Billing Department immediately upon receipt.
• Approval by the Billing Department Executive and Regional Manager (or above) is needed to
settle, close or cancel an account.
• Fee disbursements to the property will be made within 30 days of the last day of the previous
month.
• All fees are contingent and based upon the amount paid on the principle balance of the debt.
Page 29 of 32
107344706.8
Fees:
Avenue5 Standard Billing Department Fees in addition to Management Fee or any other fee(s)
agreed to within the Management Agreement:
Pre -collect (Standard Required)
• 0-30 days listing
• 31- 90 days
• Collection Agency Fee
Property or Owner Portfolio Name*:
Client 90% - Avenue5 Billing 10%
Client 50% - Avenue5 Billing 50%
Client 50% - Agency 50%
date:
(*Please provide a list of the properties approved under this agreement. Portfolio signatures
authorize all future property additions)
Owner or Agent
Page 30 of 32
107344706.8
Owner Signature:
date:
EXHIBIT D
INSURANCE REQUIREMENTS FOR WORK PERFORMED AT THE PROPERTY
For any Contracts with contractors, subcontractors and other Persons performing work at the
Property, Manager shall cause all contractors or subcontractors working at the Property to obtain
insurance in accordance with this Exhibit D (or on such other terms and conditions as may be
specified in writing from time to time by Owner) and shall submit to Owner, and shall cause all
contractors or subcontractors working at the Property to submit to Owner, valid, current insurance
certificates showing coverages in accordance with this Exhibit D prior to inception of any work.
Failure by Manager to cause all contractors or subcontractors to maintain the insurance requirements
under this Exhibit D constitutes an Event of Default by Manager.
Certificate Holder must be shown as:
Avenue5 Residential, LLC
c/o Registry Monitoring Insurance Services, Inc.
5388 Sterling Center Drive
Westlake Village, CA 91361
Coverage: Certificate must include:
o General Liability
■ Each Occurrence: $1,000,000
■ Personal & Adv Injury: $1,000,000
■ General Aggregate: $2,000,000
■ Products-Comp/OP Agg: $2,000,000
■ Commercial General Liability must be marked
■ Occur must be checked
■ Additional Insured language required
■ Additional Insured Endorsement must be attached
■ Primary Non -Contributing Endorsement shall be required.
■ The policy shall waive subrogation as against Owner and Manager.
■ The policy shall include a provision for indemnity for Owner and Manager as to
claims made by the contractor's employees.
o Auto Liability
■ Combined Single Limit: $1,000,000
■ Any Auto must be marked
o Workers Compensation and Employers Liability
■ E.L. Each Accident: $500,000
■ E.L. Disease -Ea Employee: $500,000
■ E.L. Disease -Policy Limit: $500,000
■ WC Statutory Limits much be marked
■ Waiver of Subrogation required
■ Waiver of Subrogation Endorsement must be attached
o Excess Umbrella Liability
■ Each Occurrence: $4,000,000
■ Aggregate: $4,000,000
Description of operations should read as follows:
Page 31 of 32
107344706.8
• Avenue5 Residential LLC and the Owner entity have been included as an additional
insureds as required by the written contract on the general liability policy as their interest
may appear, subject to policy terms, conditions and exclusions with respect to
work/services performed by the named insured.
Page 32 of 32
107344706.8