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HomeMy WebLinkAboutC99-181 OMNI Properties_riverviewL-9 JUL iJ `jJ lu % 14 NO . UU1 F. UZ 1 PROPERTY MANAGEMENT A13RREMENT " 0 ' ­ ' THIS AGREEMENT, entered into in NIVI, "J¢� , Colorado, this day of '^� , 199 1 by and between EAGLE RIVERVIEW AFFORDABLE HOUSING CORPORATION, a Colorado non-profit corporation (hereinafter called "Owner")and OMNI PROPERTIRS, INC., (hereinafter called "Manager"). WHEREAS, Owner is the owner of the property described as Lot 1, Block 21 Eagle -Vail Subdivision Filing No. 2, County of. Eagle, State of Colorado, commonly known as "Riverview Apartmente,1, and also commonly known as 39169 U.S. Highway 6/24, Avon, Colorado, consisting of a five building complex comprising 73 apartment units and associated service and recreational facilities ( "Premises") ; and WHEREAS, the Owner is issuing approximately $5,750,000 principal amount Of its Multifamily Housing Project Revenue Bonds, Series 1999A, and approximately $1,550,000 principal amount of its Multifamily Housing project Subordinate Revenue Bonds, Series 1999E and 1999C, in order to finance the cost of a multifamily residential rental project (the "Project") in Eagle County, Colorado, pursuant to a Trust Indenture dated as of July 1, 1999, between the Owner and The Bank of.Cherry Creek, N.A., as Trustee (the "Indenture"); and WHEREAS, the Premises is operated under a Housing Assistance Payments contract with the United States Housing and Urban Development Department ("HUD") pursuant to Section 8 of the United States Housing Act of 1937 ("Section 8"); and WHEREAS, Community Development Block Grant funds in the amount $600,000 received by Eagle County pursuant to its contract with the State of Colorado Department of Local Affairs ("CDBO contract") will be used by the`County to purchase certain of the Subordinate Revenue Bonds for the purpose of providing funds to Owner for certain rehabilitation of the Premises; and WHEREAS, Owner owns and operates tale Premises pursuant to the 13roject• Agreement dated July 1, 1999, with Eagle County, Colorado ("Project Agreement"); and WIIEREAS, pursuant to Section 5.10 of the Indenture, the Owner, agrees to hire a professional manager to manage the project; and WHEREAS, Manager is expert in the management of multifamily residential apartment complexes in the state of Colorado, including those operating under Section 8; and WIIEREAS, Manager has familiarized itself with the Premises, including its physical cosidition and operations under Section 8; and G:InOI%WII'VI'CMI'llOLU11IOI11IN(i1RIVRRVL12,WPD • •�+�� �.vvi� i I vINUIL— I iar I v vLv JL1 J ,lVL 1J 77 194 • L7 IVU . VVL r . U WHEREAS, pursuant to the Indenture, Owner wishes to obtain the benefits of Managers expertise in the Field of real estate management by relinquishing to Manager control and discretion in the operation, direction, management:and•- supervision of the lands and premises described in Schedule A subject to the terms and provisions of this Agreement, and Manager for a fee agrees to assume said control and discretion in the operation, management and supervision of the lands and premises on behalf of Owner. NOW, THEREFORE, in consideration of the mutual covenants herein contained and of other good and valuable consideration, the parties hereto agree as follows; ARTICLE 1 Owner hereby contracts witch Manager to manage, operate, direct and supervise the Premises on behalf of Owner and to provjde services as required under Article 6 of this Agreement. in accepting this appointment, Manager acknowledges that -this agreement Js subordinate to and Manager is subject to the terms and conditions of the Housing Assistance Payments contract and the Project Agreement. In accepting this appointment, Manager acknowledges that it is bound to the terms and conditions of the CDBG contract as if Owner werethe "contractor" and Manager were a "subcontractor" thereunder. ARTICLE 2 TERM , Subject to and upon Lhe terms and conditions set forth herein, or in any exhibit or addendum hereto, this Agreement shall commence on July 14, 1999, and shall continue in force, ending at 11:59 p.m. on July 310 2000, subject, however, to the termination provisions in Article 13. ARTICLE 3 All actions by Manager in performing its duties and providing services pursuant to this Agreement shall be for the account of the Owner. With the exception of the exclusions outlined in Article 11, Owner agrees to be responsible for all costs, expenses and disbursements incurred by Manager, consi atent: with Section 7.2, in providing management and operational services hereunder, such as, for example, but not limited to, contracts for landscaping or maintenance services and orders for supplies and equipment. Owner agrees 2 ��:\r�()}i W I I'\'1'1:Mi'} }ul.uu ruus}NG\RIVTRvt}2.wr� I 1 11 1 1 1J1%11` 1 LLO J 1 V VLV ..JL1 J JVL- L%J 77 1&1 • LJ NU . VVL r � t to indemnify and hold Manager harmless from and against any loss, cost, expense, liabi3ity or claims of any kind or nature whatsoever arising from or in connection with Manager's performance of its duties under thin ngreement''— except. Manager's negligence or willful misconduct. ARTICLE 4 Manager shall have the right to delegate its responsibilities under this Agreement to employees of Manager or to engage independent contractors for performance of any part of the services to be provided hereunder. Neither the Owner, nor the Manager, shall assign all or any part of this Agreement without the prior written consent of the other parties to this Agreement. ARTICLE 5 P 5.1. IIUD has the right to terminate this Agreement for failure to comply with the provisions of the Projact Owner's/Management Agent's Certification for Multifamily Housing Projects for Identity -of -Interest or Independenet Management Agents, or other good cause, thirty (30) days after HUD has mailed the Owner a writ.t;en notice of its desire to terminate this Agreement. 5.2. In the event of a default under the Deeds of Trust, Security Agreements, Indenture, or Him Housing Assistance Payments contract or successor thereto, HUD has the right to terminate this Agreement immediately upon HUD's issuance of a nnt.i ce of termination to the Owner and Manager. 5.3. If IUD exercises this right of termination, the Owner agrees � to promptly make arrangements for providing manageTm-iet that is satisfactory to HUD. 5.4. If there is a conflict between this Agreement and MM's rights and requirements, HUD's rights and requirements will prevail. S.S. If this Agreement is terminated, Manager will give to the Owner all of the project's cash, trust accounts investments and records within thirty (30) days of the date the Management Agreement is terminated. ARTICLE 6 6.1 Management and On_ration. The Manager shall manage, operate and maintain the Premises in a manner normally associated with the management and operation of -a reasonable quality apartment project and in a manner reflective of the standards set forth by the real estate management industry. Manager 3 C:1L1013 W! J'1'1"I:MPH()1.n1WCLJ$]NG11tl VLili V l J2. W Pp -- - - v v � v .iLy JVL iV 77 164 •LV IYU . VVL r . VJ % shall act in a fiduciary capacity with respect to the proper protection of and accounting for Owner's assets. 6.2 RMployees. The Manager shall have in its employ at all times a sufficient number of capable employees to enable it to properly and safely manage, operate and maintain the Premises. The salaries of all such employees, except those employees specified in Paragraph 11.2(a), shall be paid from the Operating Fund established under the -Indenture consistent with budget: thereunder. All matters pertaining to the employment, supervision, compensation, promotion and discharge of such employees are the responsibility of. the Manager. Any employee who handles cash shall be appropriately bonded by the Manager. 6.3 pugets. Manager shall prepare and submit to Owner a proposed Operating Budget and a proposed Capital Budget for the management and operation of the Premises for the forthcoming calendar year by October 15 of each year (within 30 days of the beginning of the term of this Agreement for the balance of. 1999) . owner shall consider the proposed budgets, consult with the Manager, and agree on an approved Operating Budget and an approved Capital Budget for the forthcoming calendar year as provided for in Article V of the Indenture. The approved budgets shall serve as a guideline to the Manager in maintaining and operating the Premises, and Manager agrees, subject to the provisions of Article 7, to use diligence and to -employ all reasonable efforts in order to effect that the actual cost of maintaining and operating the Premises shall not exceed the Approved Budget pertaining thereto. 14T-TVIW*3_ Manager shall use reasonable and diligent efforts -- including collection suits and proceedings, but subject to Owner's prior approval. -- to Collect promptly all rents (including laundry income and all. other income) and other charger which may become due at any time from any tenant or from others for services provided in connection with or for the use of the Premises or any portion thereof. Manager shall collect and identify any income due Owner from miscellaneous services provided to tenants or the public, including, but not limited to, cleaning income, tenant storage and coin operated -machines of: all types (e.g., vending machines, pay telephones, etc.). All monies so collected shall be deposited daily in the Revenue fund established under the Indenture. In conneetiion with such suits or proceedings, only legal counsel designated by Owner shall be retained. All. legal expenses incurred in bringing such approved suit or proceeding shall be submitted to Owner for its approval. Manager shall not write off any income items without prior approval of Owner. 6.5 Jaeasing. Manager shall be responsible for the leasing of the Premises. Manager shall have the specific authority to negotiate leases and rental agreements in connection with amendments, renewals, extensions, modification or cancellation of existing leases and preparation of new leases, consistent 4 G:uJ0JJW1PV11:M1'! iOLDU1OLISIN(s*uctVlikVt12.Wi't) \fir with Section 8 and the Housing Assistance Payments contract with HUD, and any successor contract or other low and moderate income guidelines approved by Owner from time to time. Manager shall make every reasonable effort to obtain and keep desirable tenants for the Premises and perform whatever services may be required in connection with the above mentioned negotiations, including the establishment, implementation and coordination of a marketing plan. 6.6 Repair,, Decoration, Alterations. Manager will cause Premises to be maintained and repaired in accordance with state and local codes in a condition acceptable to Owner. Without limiting the generality of the foregoing, Manager shall institute and supervise all ordinary and extraordinary repairs, decorations and alterations, including the administration of a preventive maintenance program for all mechanical,. electrical and plumbing systems and equipment. Subject to Section 7.8 of this Agreement, Manager shall be responsible for arranging all remodeling and alteration work including obtaining bids and proposals, obtaining tenant approval, invoicing tenants for reimbursement, collecting same and making payment from the Operating Account for the work done after the initial construction and tenant occupancy of the Premises. Notwithstanding the generality of the foregoing, except for developing the Capital Budget Manager shll not be responsible for instituting or supervising major construction and rehabilitation projects except as may be provided in a separate agreement with Owner. 6.7 operating Activities. Manager shall institute and supervise all operational activities of the Premises, such as, but not limited to, the following: (a) Supervision of the security on behalf of the Owner; (b) Responsibility and supervision of maintenance, repair and replacement of landscaping; (c) Responsibility and supervision of a preventive maintenance program; (d) Responsibility and supervision for any necessary maintenance or repairs to the Premises; and (e) Any other activity incidental to the normal operation of an apartment project. 6.8 property Taxes and Loan Raymente. The Manager shall obtain and verify billn for real estate and personal property taxes, improvement assessmPnrs and other like.charges which are or may become liens against the Premises and recommend payment or appeal as its best judgement may decide. The Manager shall make payment from Owner's funds for property taxes and debt service on any securf".:y affecting the Premises as provided in the Indenture. 5 CG:IL;OPW IP1'I'FMPH()1.1)11 IUtlS1NG\IU VUtVU2.WPn `1 1v" v.v V I 1 1 1 1 1 1 %Jll%I\L. 1 i LIP • J I V V G. V .!L i J .JVL 1%J 77 1&4-4f IVU .VVL r .V( �"woo 6.9 Compliance. Manager shall be responsible for operational compliance with all Terms and conditions in the Indenture and the Deeds of Trust (F'irsti Second and Third), Security Agreements, and Assignments of Rents and T.easea, a3] dated as of July 1, 1999, and shall cooperate with Owner in complying with thQ provisions of such documents. However, Manager must be made aware in writing by Owner or Trustee of any conditions in any future lease, mortgage, deed of trust or other security instrument affecting the Premises. Manager shall not be required to make any payment on account thereof unless requested by Owner an provided above. In no event small the Manager incur any liability to the holder of any such security instrument. In addition, Manager shall operate and maintain the Project in accordance with environmental laws pursuant: to Section 5.17 of the Indenture. Manager also shall be responsible for operational comp31ance with all. Lerinu and conditions of the Housing Assistance Payments contract and the Project Agreement, and shall cooperate with Owner in complying with the provisions of such documents. Manager also shall be responsible for operational compliance with the CDBG contract as if Owner were the "contractor" therein, and shall cooperate with Owner in complying with the provisions thereof. 6.10 Rant of Lsxpenses. Manager shall pay all operatisig expenses other than expenses paid through its own account from the Operating Fund established under the Yndenture for authorized -expenditures. 6.11 payroll. Manager shall prepare and pay all payrolls from the Operating Fund and maintain comprehensive payroll records. 6.3.2 Bank Relationship. Manager shall handle all operational banking maCLers related to its contractual responsibility. Owner shall designate which banks) or financial institutions Manager shall use in discharging this responsibility. 6.13 Property Tnanection. Manager shall conduct periodic comprehensive inspections of the Premises and report periodically to the Owner in writing with any recommendation. 6.14 Maintnnance of R__ordn. Manager shall maintain complete and idFntifiable records, and files on all matters pertaining to the Premises. Such records, and records and financial reports pursuant to Section 6.39, shall he available to the Owner, Bond Trustee or any holder of bonds under the Indenture during business hours upon two (2) days of written notice. 6.15 Manager Availabi];tt�v. Manager shall maintain 24-hour availability for emergencies. 6.16 Manager shall administer a tenant relations program W th maintains a high visibility of management prf%senco and service among tenants. 6 t;:vcc�c3wii►�•rc:Mhtic.�r.f�11 iUUS1NGtR1VCkvt12.WF� � V I_ i V J J 11 - L 1 11V . V V L 1 . V V 6.17 Owner Communications. Manager shall be available for communication with Owner and will keep Owner advised of items affecting the Premises. Manager shall attend Owner's Board of Directors meetings as and when invited.- With*n five (5) days after Manager receives a certified or registered letter from any tenant, a copy will be sent to Owner. 6.18 Linancial Reports. Financial reporting and record keeping: (•a) Manager, in the conduct of its responsibilities to Owner, shall maintain adequate and separate books and records for the Premises in accordance with generally accepted accounting principles, which shall be supported by sufficient documentation to ascertain chat raid entries are properly and accurately recorded. Such books and records shall be maintained by Manager at Manager's office located on the Premises. Manager shall maintain such control over accounting and financial transactions as is reasonably required to protect Owner's assets from theft, error or fraudulent activity. (b) Manager shall adopt a Chart of Accounts (a system of Classification of accounting entriea) as generally utilized in the residential property management industry.. (c) The Manger shall furnish operating reports for the Premises of all transactions occurring from the first day of the prior month to the last day of the prior month. There reports are to be received by Owner no later than 30 calendar days after the end of the above described accounting period and must show all collections, delinquencies, uncollectible items, vacancies, and other matters pertaining to the management, operation, and maintenance of the Premises during the month. The reports shall include a comparison of monthly and year-to-date actual income and expense with the Approved Operating Budget for the Premises. In addition, the Manager shall remit to Owner all unexpended funds which it had previously requisitioned from the Operating Fund and which are not being held for payment to third parties as of' the 75111 of the reporting month. The Manager's fee shall be requisitioned by Manager from the Operating Fund only after payment of all operating and maintenance expenses then due and payable, but before -remittance of the unexpended funds to Owner; such requisition by Manager shall certify that: all operating and maintenance expenses then due and payable have been paid. (d) Manager small timely provide to MM and Colorado Department of Loca] Affairs, or their respective agents, reports required by the terms of Section 8, the Housing Assistance Payments contract, the CDBG contract, and any subsequent low and moderate income housing programs. Copies of such.reports shall be transmitted to Owner simultaneously. (a) Manager shall timely provide to the Indenture Truet:ee reports required by section 5.16 of the Indenture. Copies of such reports shall be transmitted to Owner simultaneously. 7 G:11101) W II'11'l;Ml'l1ULU1I1()l1SIN(RRIV F.R V I.)2.WP1) JVL iv .!J 1"•LV 14U.VV4 r .V7 (f) Supporting Documentation. As additional support to the monthly fi:iatirial statement, Manager shall make available to the Owner, upon request, copies or originals of the following: 0. 1. All bank statements, bank deposit slips and bank reconciliations; 2. Detailed cash receipts and disbursements records; 3. Detailed trial balances; 4. Paid invoices; Suimnaries of adjusting journal entries; and 6. Supporting documentation for payroll, payroll taxes and employee benefits. (g) Manager shall maintain necessary liaison with Ownev e accountant. 6.19 Tenant Securitv_D'2oiits,. Unless prohibited by local law, all tenant security deposits are to be forwarded monthly to the Owner who in turn will assume the liability for said deposit. All adjustments to the security deposit account will be noted by Manager in the next succeeding report. 6.20 nooks. Cards. Rtc. All books, cards, registers, receipts, documents, disks, tapes and any other papers or electronic records connected with the operation are the sole property of Owner, and Manager will not publish, tranumit or release said information to any party without the prior consent of Owner. 6.21 Leased Em2loyee&. Owner acknowledges that all on -site employees at the Premises will be employees of Personnel Systems, Inc., a personnel leasing firm. Nothing in this Agreement is intended to require Manager to duplicate the insurance coverage, payments, reporting or other conduct performed by personnel Systems, Inc. with respect to those leased employees. ARTICLE 7 V.:.: rVT 7.1 Manager's Authority. Manager's authority is expressly limited to the provisions provided herein or as may be amended in writing from time to time by Owner and mutually agreed to and accepted by Manager in writing. 7.2 Approved Operating Budget. Owner's approval of the approved Operating Budget, shall constitute for Manager to expend money from the Operat.aing Fund under the Indenture in order to operate and manage the Premises, and Manager may do so without further approval as long as Manager does not exceed the aggregate amount set for in the Approved Budget for any calendar quarter. The 8 ti:1H()HW I1'1'1't-:MPHUI.[)1H()1151N(i>>tl V�KV 112.W1'V LNULt t.UUIV I T H I I UKIvt Y 11J ( U JLtS JL 1 y J UL 13 " `J`.i 14 :1t5 NO . UU1 V . 1 U 1�1"w `%W/ expenditures in excess of the approved Operating Budget which do not cumulatively vary more than fifteen percent (is&) from said approved budget in any fiscal quarter may be made upon filing with the Trustee a requisitfiod for additional operating expenses which further specified the percentage variance from Lhe original approved operating budget. In accordance with the Indenture, a cumulative budget variance in any calendar quarter may not be incurred without further consent as specified in the Indenture. In the event that a management consultant is called in as a result of expenditure variances above twenty percent (20t), then the management consultant shall formulate a revised approved operating budget and approved variance, if any, therefrom. 7.3 Anprovcd Capital Budget. Owner's approval of the approved Capital Budget. shall not constitute an authorization for Manager to expend any money. Any capital expenditure must be specifically authorized by the owner. with respect to the purchase and installation of major items of new or replacement equipment., Manager shall recommend that Owner purchase the items when Manager believes such purchase to be necessary or desirable. Owner may arrange to purchase and install the same itself or may authorize Manager to do no subject to prescribed supervision and specification requirements and conditions. Unless Owner opceifically waives such requirements, either by memorandum or an an amendment to this Agreement, all capital equipment, new or replacement, with a cost to obtain and install exceeding $5000 shall be awarded on the hams of competitive bidding when appropriate. 7.4 contracts. Manager may enter into contracts for maintaining, repairing or servicing the property and any of the constituent parts of the property subject to the approved Operating Budget, 7.5 Compliance with Lawn. IL is the intent of .the Owner that the Premised be operated in full -compliance with federal, state and municipal laws, ordinances,.regulations and orders relative to the use, operation, repair and maintenance of the Premises and with the rules, regulations or orders of the local Board of Fire underwriters or other similar body. Manager,shall promptly endeavor to remedy any violation or potential violation of any such law, ordinance, rule, regulation or order which comes to its attention and shall promptly report any violation or potential violation and proposed action to be taken to Owner. 7.6 Expenses RegalrdinS violations. Expenses incurred in remedying violations of the kind referred to in Article 7.5 may be paid from the Operating Fund provided such expenses do not exceed One Thousand and no/100 Dollars ($1000.00) in any one instance. When more than such amount is required or if the violation is one For which the Owner might be Subject to penalty, Manager shall transmit notice of such violation to the Owner to assure that prompt arrangements may be made to remedy the violation. 7.7 Fmergency. In case of emergency, Manager may make expenditures for repairs which exceed budget+ or prior approvals from Owner without prior writt,3n approval if it is necessary to prevent damage or injury. Owner must be informed of any such expenditures within the next five (5) business days. 9 G:\IIOTtW1PITT?MP1in1.E)1H()tJ.S1N(i1Et1VE RVt)2.WPI) .. - - - v im+ v v" J. V J J 1 19 • L J I I U . V V L 1 . 1 1 7.8 Atructural Changes. The Owner expressly withholds from the Manager any power or authority to make any structural changes in any building or to make any other major alterations or additions in or to any such building or equipment therein, or to incur any expense chargeable to the Owner other than expenses related to exercising the express powers above vented in the Manager without the prior written direction of the Owner. 7.9 Competent Employees. Manager is specifically authorized and directed by Owner to employ and supervise competent employees to adequately and reasonably maintain and protect the Premises. The personnel to be employed, the number of personnel and their compensation shall be subject to the approval of the Owner as part of the approved Operating Budget. All expenses incurred by Manager in employing such staff shall be paid by Owner as provided in Article 11.3 (c) . ARTICLE 8 ) 111.1 .. 8.1 Owner to Obtain -Adequate Insurance. Owner will obtain in Owner's name and at Owner's expense, in amounts to be specified by owner, insuring against physical damage, liability for lose against business interruption, and damage or injury to property or persons of third persons which may arise out of the occupancy, management, operation or maintenance of the Premises. Manager shall: (a) notify Owner with twenty-four (24) hours after Manager receives notice of any such loss, damage or injury; (b) take no action (such as admission of liability) which might bar Owner from obtaining any protection afforded by any policy owner may hold or which might prejudice owner in its defense to a claim based on ouch loss, damage or injury; and (c) agree that Owner shall have the exclusive right, at its option to conduct the defense to any claim, demand or•euit within limits prescribed by the policy or policies of insurance. Nothing herein shall be construed as indemnifying the Manager against any intentional tort of the Manager or its employees, contractors or agents or to indemnify the Manager against any act or omission for which insurance protection is not available; neither is the foregoing intended to affect the genera]. requirement of this Agreement that the premises shall be managed, operated and maintained in a safe condition and in proper and careful manner. 8.2 Manager's Insurance. Manager shall maintain at all times during the term of this Agreement workers' compensation insurance in accordance with statutory limits for all of its employees'(whether direct employees or'leased employees) and comprehensive liability insurance insuring against: property 1() tJM101+w1PV7.11.M1►1101 JAI 101JS1N(9AR1VUKVU2.WPQ +" - . `-'-W J VL 1 V JJ iti • VV 14U . VVG r . 1 L loss and personal injuries with coverage limits at minimum $150,000 per person and $600,000 per occurrence. Owner shall be named as an additional insured on the comprehensive liability insurance. Manager shall provide Owner ' "0- Certificates of insurance in a form satisfactory to Owner and providing that no. exich insurance wl.11 terminate, expire, be cancelled or revised without written notice to Owner at least 15 days in advance. 8.3 jnformation Fuxninhad. The Manager shall furnish whatever information is requested by Owner for the purpose of establishing the placement of insurance coverages and shall aid and cooperate in every reasonable way with respect to such insurance and any lose thereunder. owner shall include in its hazard policy covering the Premises, personal property, fixtures and equipment located thereon. Manager shall make recommendations regarding the amounts and typee of insurance to be carried by the Owner but the owner shall make the final determination of the amounts of insurance, the types of coverage, the insuring companies and the agencies writing such insurance. A.3 Subcontractor's I aurance. Manager shall require that eubcontractorFs brought onto the Premises have insurance coverage at the subcontractor's expense, in the minimum coverages and coverage limits set forth in paragraph 8.2 hereof. The Manager shall obtain and keep on file a Certificate of insurance which shows that the subcontractor is so insured. Manager shall have Owner and Manager named as additional insured before commencement of any work by the cubcontraetor. ARTICLE 9 K Ili !- :41-W I'll 1161. 4 WE %[*JWAJJP4 9.1 Owner's Right to Audit. Owner reserves the right for Owner's employeeH or others appointed by Owner, to conduct examinations, 'Without notification, of the kooks and records maintained for Owner by Manager no matter where books and records are located. Owner also reserves the right to perform any and all additional audit: tests relating to Manager's activities; either at the Premises, or at any office of the Manager, provided such audit tests are related to those activities performed by Manager for owner: 9.2 Government Right to Audi. Manager is subject to audit by HQD and the state of Colorado pursuant to the Housing Assistance Payments contract and the CDHG contract, and Manager will cooperate in any such audit. 9.3 Correction of Diagrepancies. Should Owner's employees or appointees, or HUD or the Mate of Colorado Department of Local Affairs, discover either weakness in internal control or errors in record keeping, Manager shall correct such discrepancies either upon discovery or within a reasonable period of time. Manager shall Jnform Owner in writing, of the action taken to correct such audit discrepancies. Any and all such audits conducted either by Owner's employees or appointees will be at the sole expense of owner. 11 U;111(.)r, W I P\rl'.MPI IOLD11101JC1N(i1Rl V LKV U2. WPD �.vvi I I I a i I vINIIL 1 i L J I v .l LtV .JL 1 J `4m .jVL I%.) 77 1.4 • JV NU . V V Z r" . 1J 1114wv ARTICLE 10 10.) Operating- Account: Tru9L Revenue Fund and Trust ORerati= Fuj3d. The Manager shall deposit daily all rents and other funds collected from the operation of the Premises, or from the Trustee for the purpose of paying operating expenses, including any and all advance funds, in a bank approved by Owner. All revenues for the Premises promptly shall be transmitted to the Trustee for Lhe Revenue Fund in the name of Fagle Riverview Affordable Housing Corporation. Deposits from the Trust Revenue Fund to the Trust operating Puna shall be made as provided in the Indenture. From the Trust Operating Fund, Manager shall pay the operating expenses of the Premises and any other payments re3ative to the Premises as required by the terms of this Agreement and shall main. 10.2 segUrity Deposits. Manager shall maintain detailed records of all security deposits and such records will,be open for inspection by Owner's employees or appointees. Security depsits.chall be maintained separatRly from the Manager's corporate accounts, in a bank or financial institution approved by Owner, and in accordance with laws applicable to tenant security deposits. 10.3 Change of Banks. Owner may direct the Manager to change a depository bank or the depository arrangements for its respective Premises. 10.4 Access to AccQuntn. Owner shall be permitted access through additional signature cards if requested. ARTICLE 11 11.1 Expenses Paid From OperatingFund. The following costa are. to be pair] directly from the Operating Fund under the Indenture. (a) Any and all costs necessary to the management, operation, leasing and maintenance of the Premises which are covered within the approved budgetary guidelines as outlined in Artic3es 6 and 9. (h) Any other costs approved in writing by Owner to Manager. 11.2 Zxpenaea Paid By Masnaaer__Thrdueh TLg own Ageount. The following costs are to be paid by Manager from its own account. (a) Costs of the gross salary and compensation for the operations accounting personnel who are associated directly or indirectly with the management of the Premises. Said costs shall include gross salaries and bonuses, payroll taxes, insurance, workmen's eompensati:yn and other employee benefits. 12 G;1TinRW1PVr1:M1'i lOLL)NI IOU$lNO%R1VRRV02.WPD �..... .. . . .........- . �r . v ..�v v�i J .JVL iwr JJ 1-0 • V1 19U . VVG 1 • 114 (b) The costs of salary and compensation for training personnel. (c) All operations accounting expenses incurred by Manager in'trhe • " execution of Manager's responsibilities pursuant to the terms of this Agreement, to initial set-up and continuing costs of the electronic data processing, and the computer service costs of the monthly operating report_, including both the summary and detailed account, with the exception of the following, which shall be paid by the Owner: (1) Cost of all non-standard printed forma, notices, checks, invoices, purchase orders, reports, envelopes, etc. required for compliance with the terms and conditions of this Agreement, or as may be requested by Owner; (2) The cost of all audits required by the terms of this Agreement. (d) All costs related to management office expenses, except for the following items which shall be paid by the Owner: (1) All printed and non-standard office supplies; (2) All long distance telephone costs related to operation and maintenance of the Premises; (3) A personal computer shall be purchased to be used by the on - site property management; and (4) A current apartment management software package. 11.3 Expenses Paid By QW=. The following costs are to be. paid by Owner from the Operating Fund upon submittal to Owner by Manager of a regular billing accompanied by documentation which reasonably supports said billing: (a) The cost of all reasonable travel and entert.ainmem expenses incurred by Manager and approved by Owner, either through budgetary approval or by specific written approval of Owner, including local automobile mileage except for costs associated with travel to the property by Manager; (b) All costs specifically excluded in Article 11.2(c) and (d); (c) Except for the employees referred to in Article 11.2(a) and (b), the Owner ahall pay for or reimburse Manager for the allocab3e salary, including payroll taxes, workmen's compensation, fidelity bonds, and all employee benefits, of the following on -site personnel and any additional personnel approved or requested by Owner: Resident Manager and Maintenance personnel as required on the Premises; (d) Management fee pursuant to Article 19; and 13 [.i:1H(1HW I I>1 t'I:MI'1 !{')1,U11 IpUSINGIRI VCRVU2.WPD �.4.Jv11 1 1 11 1 1 vINaLAd v v4.W .JL1 J JVL 1J 77 IL4 JL NU . UUL I' 1 vow (e) All capital expenditures referred to in Article 6 and 7 and all remodeling and alteration expenditures authorized by Owner. 11.4 ofof=.oL Manager. The Manager reserves and is granted the right to maintain an office in the complex of a size reasonably related to the operation of the Premises. The Manager shall not be required to pay for heat, light, or rent for the premises occupied as its office. ARTICLE 12 12.1 If at any time the gross income (or cash in the Operating Fund) from the Premises shall not be sufficient to pay the bills and charges which may by incurred with respect to the Premises, the Manager shall notify Owner immediately upon first projection or awareness of a cash shortage or pending cash shortage and owner and Manager shall jointly determine payment priority. Manager sha31 not be obligated to pay said expenses and charges from its own account. After Manager has paid, to the extent of available funds, all billu and charges based upon the ordered priorities set jointly by Owner and Manager, Manager shall submit to Owner a statement of all remaining unpaid bills. Owner shall immediately and without delay make all reasonable efforts to provide sufficient monies to pay any unpaid expenses before they became delinquent. ARTICLE 13 33.1 Termination for c ua_; Owner may terminate this contract upon fifteen (is) days wrJtten notice with cause. Cause shall be defined as 4he occurrence of any of the following events: (a} (i) the filing of a voluntary petition in bankruptcy; (ii) being adjudicated a bankrupt or insolvent; (iii) filing of any margew petition or answer seeking any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute or law relating to bankruptcy, insolvency, or other relief for debtors, whether federal or state; (iv) Manager seeking, consenting to, or acquiescing in the appointment of any trustee, receiver, conservator or liquidator of Manager, or of all or any substantial part of its properties (the terms "acquiescing," as used herein, shall be deemed to include but not be limited to the failure to file a -petition or motion to vacate or discharge any order, judgment or decree providing for such appointment, within the time specified by law); (v) a court of competent jurisdiction entering an order, judgment or decree approving a petition filed against Manager seeking any reorganization arrangement, composition, 14 ci:\1J0B W11'VT1?Mf1101.n\110US1NUkR1 VI.KVU2.WPo L-11vL_L_ �_Uwly I I n i i i LW • JI V 7 JVL 10 IVu .vuz r . to readjuat;ment, liquidation, dissolution or similar relief wider any present or future statute or law relating to bankruptcy, insolvency or other relief of debtors, whether federal or• state -- and Manager either consents to or acquiesces (as hereinabove defined) in the entry of such order, judgment or decree, or such order, -judgement or decree shall remain unvacated or unstayed for an aggregate of sixty (60) daye from the date of -entry thereof; or (vi) the appointment of a trustee, receiver, conservator or liquidator of Manager of all or any substantial part of its properties without the consent of or acquiescence of Manager which remains unvacated or un s tayed for an aggregate of. sixty (6 0) days; (b) (i) Manager fails to perform any of its services in the manner or within the time required herein; or, (ii) Manager commits or permits a breach of or default in any of its duties, liabilities or obligations hereunder; or (c) Manager's termination pursuant to implementation of the recommendations of the management consultant in accordance with Section 5.16 or any other provision of the Tndenture. 13.2 'Termination for Bond nefeasance. The Agreement may be terminated by the Corporation upon ninety (90) days written notice if the Eagle County exerciser its option to defeaee the bonds in accordance with Section 14.02 of the indenture. 13.3 Manager's Right to Comb _ng t7 on . Final Account„ i If this Agreement is terminated by any party as provided above, it is further agreed: (a) Notwithstanding any other provision herein to the contrary, the Manager's right to compensation shall cease as of the affective date set forth in the notice of termination, except that Manager shall be entitled Lo all monies owed to Manager by Owner up to the effective dare of termination. (b) That Manager's powers and authority under this Agreement shall crease and terminate at the effective data set for the in the notice of termination and Manager shall in no event make any expenditure in exceed of that shown on the Approved Operating or Capital Budget unless authorized In writing by the Owner to be charged. (a) Final Accountina. Manager shall deliver to Owner the following with respect to the premises: (1) A final accounting after termination of thin Agreement, reflecting the balance of income and expenses on the Premises as of the -effective date of termination to be delivered within fifteen (15) days after such termination. (2) Any balance or monies of Owner -help by Manager with respect to the Premises, shall be delivered immediately after such 15 r,:%jioisw»►rri.,MT11n1.Mf lotisiNG%RTv1?RvU2.wPQ "nv"" %IUVIv 1 1 n 1 1 uRwc I JUL 10 ' yy 14 : SS NO . UUZ F. 1 7 effective termination date and thereafter promptly after same are received by Manager. (3) All records, software, contracts, leases, receipts for deposits, unpaid bills and other papers or documents which pertain to the-Premi.ses also shall be delivered immediately upon such effective termination date. ARTICLE 14 should any claims, demands, suits or other legal proceedings be made or instituted by any person against Owner which arise out of any of the matters relating to the Agreement, the Manager shall give Owner all perLiuent iniorina Lion and reasonable assistance in the defense or other disposition thereof, at the sole expense of Owner. This obligation of Manager sha3.3 survive the termination or expiration of this Agreement. Upon termination of this Agreement, Manager will give to Owner all books, cards, registers, receipts, documents, tapes, disks and ocher information with respect to the project and the management thereof which Manager has it) 1.1,8 possession and shall cooperate, as requested by owner, in the transition to a new Manager of.the Project. ARTICLE 15 15.1 Manager shall not in the performance of this Agreement, be liable to Owner or to any other person for any act or omission of any agent. or employee of Owner or Manager, or its subsidiaries or affiliates, unless the same results from negligence or willful misconduct of the Manager, ite officers, employees or agents. 15.2 Notwithstanding any other provisions of this Agreement, in no event shall owner make any claim against Manager, or its affiliated or subsidiaries on account of any alleged errors of judgment made in good faith in connection with the operation of the Premises hereunder by Manager or the performance of any advisory or technica3 services provided by or arranged by the Manager. 15.3 Owner shall not object to any expenditures made by Manager in good faith in the course of its management of the Premises or in settlement of any claim arising out of the operation of the Premises unless such expenditure is spocifieally prohibited by this Agreement. 16 (;:%13013 WI1'VI'LMI'I IOLL)II IOUS1Na1RIVrRVL12.WPn .��•• .. . V..I.V I LAf W �I v vc.v JLiJ JVL 1J 77 ILi •JJ Nu .UUL i io ARTICLE 16 BFuMiSENTATTON ...� 16.1 Owner hereby represents that in entering into this Agreement, Owner Unders tanda that no guaranty is made or implied by Manager, or any of its affiliated companies as to the future financial success of the Premises. ARTICLE 17 REASONABLE CONSENT 17.1 Whenever in this Agreement the consent or approval of Manager or Owner i.s required, such consent or approval shall not be unreasonably withheld. ARTICLE 18 NOTICES 18.1 All notices, demands, consents' and reports provided for in this Agreement shall be in writing and shall be given to the appropriate Owner or Manager at the address set forth below or at such other address as they may specify hereafter in writing: MANAGER: Omni Properties, Inc. 3900 East Mexico Avenue, Ste. 770 Denver, CO 80210 OWNER: Eagle Riverview Affordable Housing Corporation c/o Eagle County Administrator P.O. Box 850 Eagle, CO 81631 Such notice or other communication may be mailed by United States mail, podLage prepaid, and may be deposited in a United States Post Office or a depository for the receipt of mail regularly maintained by the post office. Such notices, demands, consents and reports may also be delivered by hand, or by any other method or means permitted by law. Notice delivered by mail shall be deemed given the third business day after deposit in the United States mail; notice delivered by facsimile shall be accompanied by mailing a ropy within one day after transmission and shall then be deemed given the first business day after confirmed delivery. 17 a:v101:wu'rrr:MPI IOt.D\1IOtl$INGIItIVI'RV112.W1'f) ���va�� �..uv�� � � n l � ul�l��,. � 1L J I V ♦JGV JL1 7 JUL 10 77 14 . 04 NO . uuz r . ly ARTICLE 19 - 39.1. By the 251-11 day of each month, the Manager shall receive remuneration for its services in managing the Premises for such month as follows: (1) A Fixed Fee in the amount of $2,000.00 per month (prorated for the first month) ; and (2) A Variable Fee in the amount of four percent (4 0 of the gross collected income from the Premises per month in excess of ,L however, in no event shall the amount of the Variable Fee exceed thej„ amount of the Fixed Fee; and in no event shall the sum of feoA in (1) ``►►YY and this (2) exceed four percent (4%) of the gross monthly collected income. Gross receipts for these purposes are all amounts received from the operation of the Premises including, but not limited to, rents, parking fees, 'Deeurity deposit forfeitures (lout not: security deposits) , laundry income, and fees. To the extent that rental income from the income from the property in any month is not sufficient to pay the property management fee due undor. this Agreement, such fee shall accrue without interest until rental income is available, at which time accrued portions of the fee shall be then due and payable. ARTICLE 20 20.1 ConsLrucLion. The plural may include the singular and Lhesingular may include the plural and this Agreement shall be interpreted in this regard as the context may require. 20.2 Amendment. Except as otherwise herein provided, any•and all amendments;, additions or deletions ro this Agreement shall be null and void unless approved by the panties affected thereby in writing. 20.3 Headings. All headings herein are inserted only for convenience and ease of reference and are not to be considered in the construction or interpretation of any provision of thin Agreement. 20.4 Complete Agreement. This Agreement supersedes and take the place of ally and all previous negotiations, representations, and oral agreements between the parties hereto.. 20.5 dyer, The waiver of any of the terms and conditions of this Agreement on any occasion or occasions shall not be deemed as waiver of such terms and conditions on any future occasion. 18 iMl`110I.D111OUS1NG1R1V0(V UZ.WPD Jd6 L ! JVL 1J 77 1&4 •JAi IVU •UVL r Lu 20.6 Minding Nature. This Agreement shall be binding upon and inure to the benefit of Owner, each of his successors and/or permitted assigns, and shall be binding upon and inure to the.benefit of Manager, and its permitt4d r assigns. 20.7 ,��,�g� This Agreement shall be construed, interpreted and applied in accordance with and shall be govexned by, the laws applicable in the State of Colorado. 20.8 Rebates. Manager agrees it will not collect or charge any undisclosed fee, rebate or discount, and if any such should be received by Manager, these will be credited to the account of the Owner. 20.9 Divisibility, in the event any Article or Section of this Agreement its deemed illegal or unlawful, said Article or Section shall be struck from this Agreement and all other Articles and Sections shall remain valid and in fu3.3 affect. . IN WITNESS WHEREOF, the parties have executed this Agreement the day and year above written. OWNER: EAGLE RIVERVIEW AFFORDABLE HOUSING CORPORATION witrnes By: : By ; Date: `7-r3-49 MANAGER: OMNI PROPERTIES, INC. Witn ns 7//3 Hy: ! Hy: Date: 19 (i:11301)WI1I1TL'MPl IULUII IOUSINGIk)VL,*RVU2.WPD