ex109barrettlkesassgnmto






                                                                         EXHIBIT 10.9                                                 Freddie Mac Loan Number: 504021354                                              Property Name: The 1800 at Barrett Lakes                 ASSIGNMENT OF MANAGEMENT AGREEMENT AND                     SUBORDINATION OF MANAGEMENT FEES                                  (Revised 7-12-2016)   THIS  ASSIGNMENT    OF  MANAGEMENT     AGREEMENT     AND  SUBORDINATION     OF  MANAGEMENT FEES      ("Assignment") is made effective as of the 31st day of July, 2018, by  and  among  STAR   BARRETT    LAKES,  LLC,   a Delaware limited liability company  ("Borrower"), PNC BAt'IK, NATIONAL   ASSOCIATION,    a national banking association  ("Lender"), and STEADFAST MANAGEMENT C01"IPANY, INC., a California corporation  ("Property Manager").                                     RECITALS:   A.    Borrower has requested that Lender make a loan to Borrower ("Loan"). The Loan will be        evidenced by a Multifamily Note from Borrower to Lender effective as of the date of this        Assignment ("Note"). The Note is secured by, among other things, a Multifamily Loan        and Security Agreement ("Loan Agreement") and a Multifamily Mortgage, Deed of        Trust, or Deed to Secure Debt ("Security Instrument"), dated as of the date of this        Assignment, which grants Lender a lien on the property encumbered by the Security        Instrument ("Mortgaged Property"). The Note, the Loan Agreement, the Security        Instrument, this Assignment and  any of the other documents evidencing the Loan are        collectively referred to as the "Loan Documents". Other capitalized terms used but not        defined in this Assignment will have the meanings given to those terms in the Loan        Agreement.  B.    Pursuant to a Management Agreement  between Borrower and Property Manager        ("Management Agreement") (a true and correct copy of which is attached as Exhibit B),        Borrower employed Property Manager exclusively to lease, operate and manage the        Mortgaged Property, and Property Manager is entitled to certain management fees        ("Management Fees") pursuant to the Management Agreement.  C.    Lender requires as a condition to the making of the Loan that Borrower assign the        Management  Agreement and that Property Manager subordinate its interest in the        Management Fees in lien and payment to the Loan as set forth below.  For good and valuable consideration the parties agree as follows:   1.    Assignment of Management Agreement. As additional collateral security for the Loan,        Borrower conditionally transfers, sets over, and assigns to Lender all of Borrower's right,        title and interest in and to the Management Agreement and all extensions and renewals.        This transfer and assignment will automatically become a present, unconditional        assignment, at Lender's option, upon a default by Borrower under the Note. the Loan        Agreement, the Security Instrument or any of the other Loan Documents ( each, an        "Event of Default"), and the failure of Borrower to cure such Event of Default within        any applicable grace period.  2.    Subordination of Management  Fees. The Management  Fees and all rights and        privileges of Property Manager to the Management Fees are and will at all times continue        to be subject and unconditionally subordinate in all respects in lien and payment to the   Assignment of Management Agreement and  Subordination of Management Fees  





 






       lien and payment of the Loan Agreement, the Security Instrument, the Note, and the other         Loan Documents, and  to any renewals, extensions, modifications, assignments,         replacements, or consolidations of the Loan Documents and the rights, privileges, and         powers of Lender under the Note. the Loan Agreement, the Security Instrument, or any of         the other Loan Documents.   3.     Estoppel. Property Manager and Borrower represent and warrant that all of the following         are true as of the date of this Assignment:          (a)  The Management Agreement is in full force and effect and has not been modified,              amended or assigned other than pursuant to this Assignment.          (b)  Neither Property Manager nor Borrower is in default under any of the terms,              covenants or provisions of the Management Agreement and Property Manager              knows of no event which, but for the passage of time or the giving of notice or              both, would constitute an event of default under the Management Agreement.          (c)  Neither Property Manager nor Borrower has commenced any action or given or              received any notice for the purpose of terminating the Management Agreement.          (d)  The  Management Fees and all other sums due and payable to the Property              Manager under the Management Agreement have been paid in full.   4.    Agreement  by Borrower and Property Manager. Borrower and Property Manager        agree that if there is an Event of Default by Borrower ( continuing beyond any applicable        grace period) under the Note, the Loan Agreement, the Security Instrument or any of the        other Loan Documents during the tenn of this Assignment or upon the occurrence of any        event which would entitle Lender to terminate the Management Agreement in accordance        with the terms of the Loan Documents, Lender may terminate the Management        Agreement without payment of any cancellation fee or penalty and require Property        Manager to transfer its responsibility for the management of the Mortgaged Property to a        management company selected by Lender in Lender's sole discretion, effective as of the        date set forth in Lender's notice to Property Manager. Following any such termination,        Property Manager agrees to apply all rents, security deposits, issues, proceeds and profits        of the Mortgaged Property in accordance with Lender's written directions to Property        Manager.   5.    Lender's Right to Replace Property Manager. If Lender, in Lender's reasonable        discretion, at any time during the term of this Assignment, determines that the Mortgaged        Property is not being managed in accordance with generally accepted management        practices for properties similar to the Mortgaged Property, Lender will deliver written        notice to Borrower and Property Manager, which notice will specify with particularity the        grounds for Lender's determination. If Lender reasonably determines that the conditions        specified in Lender's notice are not remedied to Lender's reasonable satisfaction by        Borrower or Property Manager within 30 days from receipt of such notice or that        Borrower or Property Manager have failed to diligently undertake correcting such        conditions within such 30-day period, Lender may direct Borrower to terminate Property        Manager  as manager of the Mortgaged Property and terminate the Management        Agreement without payment of any cancellation fee or penalty and to replace Property        Manager with a management company acceptable to Lender in Lender's sole discretion        pursuant to a management agreement acceptable to Lender in Lender's sole discretion.    Assignment ofM:magement Agreement and  Subordination of Management Fees                                          Pagc2  





 






6.    Receipt of Management  Fees. Property Manager will not be obligated to return or        refund to Lender any Management Fees or other fee, commission or other amount        received by Property Manager prior to the occurrence of the Event of Default, and to        which Property Manager was entitled under the Management Agreement. If the Property        Manager receives any Management Fees after it has received notice of an Event of        Default, Property Manager agrees that such Management Fees will be received and held        in trust for Lender, to be applied by Lender to amounts due under the Loan Documents.   7.    Consent and Agreement by Property Manager. Property Manager acknowledges and        consents to this Assignment and agrees that Property Manager will act in conformity with        the provisions of this Assignment and Lender's rights under this Assignment or otherwise        related to the Management Agreement. If the responsibility for the management of the        Mortgaged Property is transferred from Property Manager in accordance with the        provisions of this Assignment, then PropertY Manager will fully cooperate in transferring        its responsibility to a new management company and complete such transfer no later than        30 days from the date the Management Agreement is terminated. Further, Property        Manager agrees as follows:         (a)   It will not contest or impede the exercise by Lender of any right Lender has under              or in connection with this Assignment.         (b)   It will give at least 30 days prior written notice to Lender of its intention to              terminate the Management Agreement or otherwise discontinue its management              of the Mortgaged Property, in the manner provided for in this Assignment.         ( c)  It will not amend any of the provisions or terms of the Management Agreement              without the prior consent of Lender.   8.    Termination. When the Loan is paid in full and the Security Instrument is released or        assigned of record, this Assignment and all of Lender's right, title and interest hereunder        with respect to the Management Agreement will terminate.  9.    Notices.         (a)   All notices under or concerning this Assignment ("Notice") will be in writing.              Each Notice will be deemed given on the earliest to occur of: (i) the date when              the Notice is received by the addressee, (ii) the first Business Day after the Notice              is delivered to a recognized overnight courier service, with arrangements made for              payment of charges for next Business Day delivery, or (iii) the third Business Day              after the Notice is deposited in the United States mail with postage prepaid,              certified mail, return receipt requested. Addresses for Notice are as follows:                If to Lender:       PNC Bank, National Association                                   26901 Agoura Road, Suite 200                                   Calabasas Hills, California 91301                                   Attention: Loan Servicing Manager    Assignment of Management Agreement and  Subordination of Management Fees                                          Page 3  





 






             If to Borrower:     ST AR Barrett Lakes, LLC                                   c/o Steadfast Companies                                    18100 Von Kannan Avenue, Suite 500                                   Irvine, California 92612                                   Attention - General Counsel: Ana Marie de! Rio                If to Property       Steadfast Management Company, Inc.               Manager:            c/o Steadfast Companies                                    18100 Von Karman Avenue, Suite 500                                    Irvine, California 92612                                   Attention - General Counsel: Ana Marie de! Rio         (b)   Any party to this Assignment may change the address to which Notices intended              for it are to be directed by means of Notice given to the other parties in              accordance with this Section 9. Each party agrees that it will not refuse or reject              delivery of any Notice given in accordance with this Section 9, that it will              acknowledge, in writing, the receipt of any Notice upon request by the other party              and that any Notice rejected or refused by it will be deemed for purposes of this              Section 9 to have been received by the rejecting party on the date so refused or              rejected, as conclusively established by the records of the U.S. Postal Service or              the courier service.   10.  Governing Law; Consent to Jurisdiction and Venue.        (a)   This Assignment will be construed in accordance with and governed by the laws              of the Property Jurisdiction.         (b)   Borrower and Property Manager agree that any controversy arising under or in              relation to this Assignment may be litigated in the Property Jurisdiction. The state              and federal courts and authorities with jurisdiction in the Property Jurisdiction              will have jurisdiction over all controversies that may arise under or in relation to              this Assignment. Borrower and Property Manager irrevocably consent to service,              jurisdiction and venue of such courts for any such litigation and waive any other              venue to which it might be entitled by virtue of domicile, habitual residence or              otherwise. However, nothing in this Section 10 is intended to limit Lender's right              to bring any suit, action or proceeding relating to matters under this Assignment              in any court of any other jurisdiction.  11.   Captions, Cross References and Exhibits. The captions assigned to provisions of this        Assignment are for convenience only and will be disregarded in construing this        Assignment. Any reference in this Assignment to an "Exhibit" or a "Section," unless        otherwise explicitly provided, will be construed as referring, respectively, to an Exhibit        attached to this Assignment or to a section of this Assignment. All Exhibits attached to or        referred to in this Assignment are incorporated by reference into this Assignment.  12.   Number and  Gender. Use of the singular in this Assignment includes the plural, use of        the plural includes the singular, and use of one gender includes all other genders, as the        context may require.   13.   No Partnership. This Assignment is not intended to, and will not, create a partnership or        joint venture among the parties, and no party to this Assignment will have the power or        authority to bind any other party except as explicitly provided in this Assignment.   Assignment of 1\'Ianagement Agreement and  Subordination of i\lanagcmcnt Fees                                        Page4  





 






14.   Severability. The invalidity or unenforceability of any provision of this Assignment will        not affect the validity of any other provision, and all other provisions will remain in full        force and effect.  15.   Entire Assignment. This Assignment contains the entire agreement among the parties as        to the rights granted and the obligations assumed in this Assignment.   16.  No  \Vaiver; No Remedy Exclusive. Any forbearance by a party to this Assignment in        exercising any right or remedy given under this Assignment or existing at law or in        equity will not constitute a waiver of or preclude the exercise of that or any other right or        remedy. Unless otherwise explicitly provided, no remedy under this Assignment is        intended to be exclusive of any other available remedy, but each remedy will be        cumulative and will be in addition to other remedies given under this Assignment or        existing at law or in equity.  17.   Third Party Beneficiaries. Neither any creditor of any party to this Assignment, nor any        other person, is intended to be a third party beneficiary of this Assignment.   18.  Further Assurances and Corrective Instruments. To the extent permitted by law, the        parties will, from time to time, execute, acknowledge and deliver, or cause to be        executed, acknowledged and delivered, such supplements to this Assignment and such        further instruments as may reasonably be required for carrying  out the intention of or        facilitating the performance of this Assignment.   19.  Counterparts. This Assignment may be executed in multiple counterparts, each of which        will constitute an original document and all of which together will constitute one        agreement.  20.   Indemnity. By executing this Assignment Borrower agrees to indemnify and hold        harmless Lender and its successors and assigns from and against any  and all losses,        claims, damages, liabilities and expenses including Attorneys' Fees and Costs, which        may be imposed or incurred in connection with this Assignment.  21.   Costs and Expenses. Wherever pursuant to this Assignment it is provided that Borrower        will pay any costs and expenses, such costs and expenses will include Lender's        Attorneys' Fees and Costs.   22.   Determinations by Lender. In any instance where the consent or approval of Lender        may be given or is required, or where any determination, judgment or decision is to be        rendered by Lender under this Assignment, the granting, withholding or denial of such        consent or approval and the rendering of such determination, jud1,'111ent or decision will        be made or exercised by Lender (or its designated representative) at its sole and exclusive        option and in its sole and absolute discretion and will be final and conclusive, except as        may be otherwise expressly and specifically provided in this Assignment.  23.   Successors and Assigns. This Assignment will be binding upon and inure to the benefit        of Borrower, Lender and Property Manager and their respective successors and assigns        forever.   24.   Secondary Market. Lender may sell, transfer and deliver the Note and assign the Loan        Agreement, the Security Instrument, this Assignment and the other Loan Documents to        one or more investors in the secondary mortgage market ("Investors"). In connection   Assignment of Management Agreement and  Subordination of Management Fees                                         Pages  





 






      with such sale, Lender may retain or assign responsibility for servicing the Loan,         including the Note, the Loan Agreement, the Security Instrument, this Assignment and         the other Loan Documents, or may delegate some or all of such responsibility and/or         obligations to a servicer including any subservicer or master servicer, on behalf of the         Investors. All references to Lender in this Assignment will refer to and include any such         servicer to the extent applicable.   25.  Attached Exhibits. The following Exhibits, if marked with an "X" in the space         provided, are attached to this Assignment:                   Exhibit A    Modifications to Assignment                   Exhibit B    Copy of Management Agreement    IN WITNESS  WHEREOF   the undersigned have executed this Assignment as of the date and   year first written above.                             [END OF PAGE- SIGNATURES TO FOLLOW]    Assignment of Management Agreement and  Subordination of Management Fees                                          Page6  





 






                                      BORRO\VER:                                        STAR   BARRETT LAKES, LLC, a Delaware                                           limited liability company                                        By:  Steadfast Apartment Advisor, LLC, a                                             Delaware limited liability company, its                                             Manager                                              By:                                                 Ella S. Neyland    "-                                                President    Assignment of Management Agreement and  Subordination of I\'Janagement Fees                                        Page S-1  





 






                                    LENDER:                                      PNC  BANK, NATIONAL ASSOCIATION,      a                                         national banking association                                        Byi!if:flKellA.  Tyleri \  'G ~                                         Vice President    Assignment of Management Agreement and  Subordination of Management Fees                                       Page S-2  





 






                                       PROPERTY MANAGER:                                          STEADFAST MANAGEMENT COMPANY,                                            INC., a California corporation                                          .,~Name:i<naMarie de!   Rio                                                            Title: Secretary    Assignment of i\Ianngement Agreement and  Subordinntion of .i\Innagement Fees                                          Pngc S-3  





 






                                  EXHIBIT A                         MODIFICATIONS TO ASSIGNMENT   The following modifications are made to the text of the Assignment that precedes this Exhibit.   I.   Section 3(a) is deleted in its entirety and replaced with the following:         (a)   The Management Agreement is in full force and effect and has not been modified,              Q!: amended or assigned other thaH 13ursuaHt to this AssignmeH!. There are no              assignments of the Management Agreement that remain in effect other than              pursuant to this Assignment.   2.    Section 6 is deleted in its entirety and replaced with the following:         6.    Receipt of Management Fees. Manager will not be obligated to return or refund              to Lender any Management Fees or other fee, commission or other amount              received by Property Manager prior to the occurrence of the Event of Default, and              to which Property Manager was entitled under the Management Agreement. If the              Property Manager receives any Management Fees after it has received notice of an              Event of Default, Property Manager agrees that such Management Fees will be              received and held in trust for Lender, to be applied by Lender to amounts due under              the Loan Documents; provided, however, that nothing herein shall prevent              Property Manager from terminating the Management Agreement in the event              Propertv Manager  is not paid all fees due to it under the Management              Agreement.    Assignment of Management Agreement and  Subordination of Management Fees                                        Pnge A-1  





 






                                           EXHIBITB                                  MANAGEMENT AGREEMENT                                             See Attached    Assignment ofl\'1anagcmcnt Agreement and  Subordination of Management Fees                                                          Page B-1  





 






               PROPERTY MANAGEIVIENT AGREEMENT        THIS  PROPERTY  MANAGEMENT     AGREEMENT   (this "Agreement") is made and  entered into as of November 20, 2014 (the "Effective Date"), by and between STAR BARRETT  LAKES,  LLC,  a Delaware limited liability company ("Owner"), and STEADFAST  MANAGEMENT COMPANY, INC., a California corporation ("Manager").                                   ARTICLE 1                                 DEFINITIONS         Section 1. I Definitions. The following terms shall have the following meanings when  used in this Agreement:         "Agreement" has the meaning given in the introductory paragraph.         "Annual Business Plan" has the meaning given in Section 3.11 (a).         "Capital Budget" has the meaning given in Section 3.11 (a).         "Depository" means such bank or federally-insured or other financial institution as  Owner shall designate in writing.         "Effective Date" has the meaning given in the introductory paragraph.         "Fiscal Y car" means the calendar year beginning January 1 and ending December 31 of  each calendar year, or such other fiscal year as determined by Owner and of which Manager is  notified in writing; provided that the first Fiscal Year of this Agreement shall be the period  beginning on the Effective Date and ending on December 31 of the calendar year in which the  Effective Date occurs.         "Governmental Requirements" has the meaning given in Section 3.14.         "Gross Collections" means all amounts actually collected as rents or other charges for  use and occupancy of apartment units and from users of garage spaces (if any), leases of other  non-dwelling facilities in the Property and concessionaires (if any) in respect of the Property,  including furniture rental, parking fees, forfeited security deposits, application fees, late charges,  income from coin-operated machines, proceeds from rental interruption insurance, and other  miscellaneous income collected at the Property; excluding, however, all other receipts, including  but not limited to, income derived from interest on investments or otherwise, proceeds of claims  on account of insurance policies (other than rental interruptions insurance), abatement of truces,  franchise fees, and awards arising out of eminent domain proceedings, discounts and dividends  on insurance policies.         "Hazardous Materials" means any muterial defined as a hazardous substance under the  Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource  Conservation and Recovery Act, or any state or local statute regulating the storage, release,  transportation or other disposition of ha'.lardous material, as any of those laws may have been  amended to the date hereof, and the administrative regulations promulgated thereunder prior to  





 






the date hereof, and, whether or not defined as hazardous substances under the foregoing  Governmental Requirements, petroleum products (other than petroleum products used in  accordance with Governmental Requirements by Owner or its tenants in the usual and ordinary  course of their activities), PCBs and radon gas.         "Major Capital Improvements" has the meaning given in Section 3.6.         "l\fanngcmcnt Fee" has the meaning given in Section 4.1.         "l\1anagcr" has the meaning given in the introductory paragraph.         "Operating Budget" has the meaning given in Section 3.11 (a).         "Owner" has the meaning given in the introductory paragraph.         "Owner's Representative" has the meaning given in Section 2.2.         "Pass-Through Amounts" means fees and/or reimbursements for services provided to  the Property but not covered by the Management Fee, as described in Exhibit A attached hereto  and made a part hereof.         "Propcrtv" means the multifamily apartment project listed and described on Exhibit B  attached hereto and made a part hereof.         "Securitv Deposit Account" has the meaning given in Section 5.1.         "fill!!!:" means the state in whlch the Property is located.                                    ARTICLE2           APPOINTMENT OF AGENCY AND RENTAL RESPONSIBILITY         Section 2.1 Appointment. Owner hereby appoints Manager and Manager hereby  accepts appointment as the sole and exclusive leasing agent and manager of the Property on the  terms and conditions set forth herein. Owner warrants and represents to Manager that Owner  owns fee simple title to the Property with all requisite authority to hereby appoint Manager and  to enter into this Agreement.         Section 2.2 Owner's Representative. Owner shall from time to time designate one or  more persons to serve as Owner's representative ("Owner's Representative") in all dealings  with Manager hereunder. Whenever the approval, consent or other action of Owner is called for  hereunder, such approval, consent or action shall be binding on Owner if specified in writing and  signed by Owner's Representative. The initial Owner's Representative shall be Ella S. Neyland,  President. Any Owner's Representative may be changed at the discretion of Owner, at any time,  and shall be effective upon Manager's receipt of written notice identifying the new Owner's  Representative.                                         2  





 






      Section 2.3 Leasing. Manager  shall perfonn all promotional, leasing and  management activities required to lease apartment units in the Property. Throughout the term of  this Agreement, Manager shall use its diligent efforts to lease apartment units in the Property.  Manager shall advertise the Property, prepare and secure advertising signs, space plans, circulars,  marketing brochures and other forms of advertising. Owner hereby authorizes Manager pursuant  to the terms of this Agreement to advertise the Property in conjunction with institutional  advertising campaigns and allocate costs on a pro rata basis among the Properties being  advertised (to the extent authorized by the Annual Business Plan). All inquiries for any leases or  renewals or agreements for the rental of the Property or portions thereof shall be referred to  Manager and all negotiations connected therewith shall be conducted solely by or under the  direction of Manager. Manager is hereby authorized to execute, deliver and renew residential  tenant leases on behalf of Owner. Manager is authorized to utilize the services of apartment  locator services and the fees of such services shall be operating expenses of the Property and, to  the extent paid by Manager, reimbursable by Owner.         Section 2.4 Manager's Standard of Care, Manager shall perform its duties under  this Agreement in a manner consistent with professional property management services. In no  event shall the scope or quality of services provided by Manager for the Property hereunder be  less than those generally performed by professional property managers of similar properties in  the market area where the Property is located. Manager shall make available to Owner the full  benefit of the judgment, experience, and advice of the members and employees of Manager's  organization with respect to the policies to be pursued by Owner in operating the Property, and  will perform the services set forth herein and such other services as may be requested by Owner  in managing, operating, maintaining and servicing the Property.                                   ARTICLE3                  SERVICES TO BE PERFOR1VIED BY MANAGER         Section 3.1 Expense of Owner. All acts performed by Manager in the perfonnance  of its obligations under this Agreement shall be performed as an independent contractor of  Owner, and all obligations or expenses incurred thereby, shall be for the account of, on behalf of,  and at the expense of Owner, except as otherwise specifically provided in this Article 3, provided  Owner shall be obligated to reimburse Manager only for the following:               (a)  Costs and Expenses. All costs and expenses incurred by Manager on  behalf of Owner in connection \vith the management and operation of the Property, including but  not limited to all compensation, including the cost of benefits, payable to the employees at the  Property and identified in the Operating Budget and taxes and assessments payable in connection  therewith and reasonable training, travel and expenses associated therewith, all marketing costs,  all collection and lease enforcement costs, all maintenance and repair costs incurred in  accordance with Section 3.5 hereof, all utilities and related services, all on-site overhead costs  and all other costs reasonably incurred by Manager in the operation and management of the  Property, excluding, however, all of Manager's general overhead costs, including without  limitation, all expenses incurred at Manager's corporate headquarters and other Manager office  sites other than the property management office located at the Property (i.e., office expenses,  long distance phone calls, postage, copying, supplies, electronic data processing and accounting                                        .i  





 






expenses), general accounting and reporting expenses for services included among Manager's  duties under the Agreement; and               (b)  Other. All sums othetwise due and payable by Owner as expenses of the  Property authorized to be incurred by Manager under the terms of this Agreement and the  Operating Budget, including compensation payable under Section 4.1 hereof to Manager for its  services hereunder.         Manager may use employees normally assigned to other work centers or part-time  employees to properly staff the Property, reduced, increased or emergency work load and the like  including the property manager, business manager, assistant managers, leasing directors, or other  administrative personnel, maintenance employees or maintenance supervisors whose wages and  related expenses shall be reimbursed on a pro rata basis for the time actually spent at the  Property. A property manager or business manager at the Property and any other persons  performing functions substantially similar to those of a business manager, including but not  limited to assistant managers, leasing directors, leasing agents, sales directors, sales agents,  bookkeepers, and other administrative and/or maintenance personnel performing work at the site,  and on-site maintenance personnel, shall not be considered executive employees of Manager.  All reimbursable payments made by Manager hereunder shall be reimbursed from funds  deposited in an account established pursuant to Section 5.2 of this Agreement. Manager shall  not be obligated to make any advance to or for the account of Owner nor shall Manager be  obligated to incur any liability or obligation for the account of Owner without assurance that the  necessary funds for the discharge thereof will be provided by Owner. In the performance of its  duties as agent and manager of the Property, Manager shall act solely as an independent  contractor of Owner. All debts and liabilities to third persons incurred by Manager in the course  of its operation and management of the Property shall be the debts and liabilities of Owner only,  and Manager shall not be liable for any such debt or liabilities, except to the extent Manager has  exceeded its authority hereunder.         Section 3.2 Covenants Concerning Payment  of Operating Expenses. Owner  covenants to pay ail sums for reasonable operating expenses in excess of gross receipts required  to operate the Property upon written notice and demand from Manager within five days after  receipt of written notice for payment thereof.         Section 3.3 Employment of Personnel. Manager shall use its diligent efforts to  investigate, hire, pay, supervise and discharge the personnel necessary to be employed by it to  properly maintain, operate and lease the Property, including without limitation a property  manager or business manager at the Property. Such personnel shall in every instance be deemed  agents or employees, as the case may be, of Manager. Owner has no right of supervision or  direction of agents or employees of Manager whatsoever; however, Owner shall have the right to  require the reassignment or termination of any employee. All Owner directives shall be  communicated to Manager's senior level management employees. Manager and all personnel of  Manager who handle or who are responsible for handling Owner's monies shall be bonded in  favor of Owner. Manager agrees to obtain and keep in effect fidelity insurance in an amount not  less than Two Hundred Fifty Thousand Dollars ($250,000). All reasonable salaries, wages and  other compensation of personnel employed by Manager, including so-called fringe benefits,  worker's compensation, medical and health insurance and the like, shall be deemed to be                                        4  





 






reimbursable expenses of Manager. Manager may allow its employees who work at the Property  and provide services to the Property after normal business hours, to reside at the Property for  reduced rents (or rent fee as provided in the Operating Budget) in consideration of their benefit  to Owner and the Property, provided such reduced rents are reflected in the Annual Business  Plan.         Section 3.4 Utility and Service Contracts. Manager shall, at Owner's expense and in  Owner's name or in Manager's name as agent for Owner, enter into contracts for water,  electricity, gas, fuel, oil, telephone, vermin extermination, trash removal, cable television,  security protection and other services deemed by Manager to be necessary or advisable for the  operation of the Property. Manager shall also, in Owner's name or in Manager's name as agent  for Owner and at Owner's expense, place orders for such equipment, tools, appliances, materials,  and supplies as are reasonable and necessary to properly maintain the Property. Owner agrees to  pay or reimburse Maoager for all expenses  and liabilities incurred by reason of this Section  provided that such amounts are in accordance with the Operating Budget.         Section 3.5 Maintenance and Repair of Property. Manager shall use diligent efforts  to maintain, at Owner's expense, the buildings, appurtenances and grounds of the Property in  good condition aod repair, including interior and exterior cleaning, painting and decorating,  plumbing, carpentry and such other normal maintenance and repair work as may be necessary or  reasonably desirable talcing into consideration the amount allocated therefor in the Annual  Business Plan. With respect to any expenditure not contemplated by the Annual Business Plan,  Manager shall not incur any individual item of repair or replacement in excess of Five Thousand  Dollars ($5,000.00) unless authorized in writing by Owner's Representative, except, however,  that emergency repairs immediately necessary for the preservation and safety of the Property or  to avoid the suspension of any service to the Property or danger of injury to persons or damage to  property may be made by Manager without the approval of Owner's Representative. Owner  shall not establish standards of maintenance and repair that violate or may violate any Jaws,  rules, restrictions or regulations applicable to Maoager or the Property or that expose Manager to  risk of liability to tenants or other persons. Manager shall not be obligated by this Section to  perform any Major Capital Improvements.         Section 3.6 Supervision of Major Capital Improvements or Repairs. When  requested by Owner in writing or as set forth in an Approved Business Plan, Manager or an  affiliate thereof shall, at Owner's expense and in Owner's name or in Manager's name as agent  for Owner, supervise the installation and construction of all Major Capital Improvements to the  Property where such work constitutes other than normal maintenance and repair, for additional  compensation as set forth in a separate agreement. If Owner and Manager fail to reach an  agreement for Manager's additional compensation as provided in this Section 3.6, Owner may  contract with a third party to supervise installation or construction of Major Capital  Improvements. In such events, Manager may negotiate contracts with all necessary contractors,  subcontractors, materialmen, suppliers, architects, and engineers on behalf of, and in the name  of, Owner, and may compromise and settle any dispute or claim arising therefrom on behalf of  and in the name of Owner; provided only that Manager shall act in good faith and in the best  interest of Owner at all times and Owner shall approve all contracts for such work. Manager will  furnish or will cause to be furnished all personnel necessary for proper supervision of the work  and may assign personnel located at the Property where such work is being performed to such                                        5  





 






 supervisory work (and such assignment shall not reduce or abate any other fees or compensation   owed to Manager under this Agreement). For the purposes of this Agreement, the term "Major   Capital Improvements" shall mean work having an estimated cost of$25,000 or more.                Owner acknowledges  that Manager, or an affiliate of Manager, may bid on any   such work, and that Manager, or an affiliate of Manager, may be selected to perform part or all   of the work; provided that if Manager desires to select itself, or its affiliate to do any work, it   shall first notify Owner of the terms upon which it, or its affiliate, proposes to contract for the   work, and terms upon which the independent contractors have offered to perform, and shall state   the reasons for preferring itself, or its affiliate, over independent contractors and Owner shall   have fifteen days to disapprove Manager, or its affiliate, and to request performance by an   independent contractor. Only Owner shall have the power to compromise or settle any dispute or   claim arising from work perfonncd by Manager, or its affiliate; and it is expressly understood   that the selection of Manager, or its affiliate, will not affect any fee or other compensation   payable to Manager hereunder.          Section 3.7  Insurance.                (a)    Owner Requirements.   Owner agrees to maintain all forms of insurance  required by law or by any loan requirements for the Property and as otherwise deemed by Owner   to be reasonable and necessary to adequately protect Owner and Manager, including but not  limited to public liability insurance, boiler insurance, fire and extended coverage insurance, and  burglary and theft insurance. All insurance coverage shall be placed with such companies, in   such amounts and  with such beneficial interest appearing therein as shall be reasonably   acceptable to Owner. Public liability insurance shall be maintained in such amounts as Owner   determines as commercially reasonable or as otherwise required by its lenders or investors, but in  no case in an amount less than $5,000,000.                Owner agrees to timely provide evidence of Tequired insurance to Manager, and  acknowledges that if evidence of insurance coverage is not timely furnished, Manager may, but  shall not be obligated to, obtain such coverage on Owner's behalf. Manager shall be named an  additional insured on all Owner obtained insurance.                (b)    Manager Requirements. Manager agrees to maintain, at its own expense,  public liability insurance in an amount not less than Two Million Dollars ($2,000,000) and all  other forms of insurance required by law and as otherwise deemed by Owner and Manager to be  reasonable and necessary to adequately protect Owner and Manager, including but not limited to  workers  compensation insurance, professional  liability, employee practices, and fidelity  insurance. Manager agrees to timely provide evidence of required insurance to Owner and to  name Owner as an additional insured on appropriate policies.                Manager shall use its diligent efforts to investigate and make a written report to  the insurance company as to all accidents, claims for damage relating to the ownership, operation  and maintenance of the Property, any damage or destruction to the Property and the estimated  cost of repair thereof, and shall prepare any and all reports for any insurance company in  connection therewith. All such reports shall be timely filed with the insurance company as  required under the terms of the insurance policy involved. With the prior written approval of                                            6  





 






Owner, Manager is authorized to settle any and all claims against insurance companies arising  out of any policies, including the execution of proofs ofloss, the adjustment oflosses, signing of  receipts and collection of monies (no approval by Owner shall be required for the settlement of  claims of $5,000 or less). Manager is further authorized to contract for the maintenance and  repair of any damage or casualty in accordance with Section 3 .6 above. Manager shall receive as  an additional fee for such services that fee designated in the loss adjustment as a general  contractor's fee, provided that insurance proceeds that exceed the cost of repairing the drunage or  restoring the loss are available to pay such fees. In such event Manager shall be responsible for  all costs incurred by Manager in adjusting such loss and contracting for repairs.              (c)   Loss or Liability Claims. Owner and Manager mutually agree for the  benefit of each other to look only to the appropriate insurance coverages in effect pursuant to this  Agreement in the event any demand, claim, action, drunagc, loss, liability or expense occurs as a  result of injury to person or damage to property, regardless whether any such demand, claim,  action, drunage, loss, liability or expense is caused or contributed to, by or results from the  negligence of Owner or Manager or their respective subsidiaries, affiliates, employees, directors,  officers, agents or independent contractors and regardless whether the injury to person or damage  to property occurs in and about the Property or elsewhere as a result of the performance of this  Agreement. Except for claims that are covered by the indemnity contained in Section 3.7(d)  below, Owner agrees that Owner's insurance shall be primary without right of subrogation  against Manager with respect to all claims, actions, damage, loss or liability in or about the  Property. Nevertheless, in the event such insurance proceeds are insufficient to satisfy (or such  insurance does not cover) the demand, claim, action, loss, liability or expense, Owner agrees, at  its expense, Lo indemnify and hold Manager and its subsidiaries, affiliates, officers, directors,  employees, agents or independent contractors harmless to the extent of excess liability. For  purposes of this Section 3.7(c), any deductible amount under any policy of insurance shall not be  deemed to be included as part of collectible insurance proceeds.              (d)   Indemnification. Notwithstanding anything contained in this Agreement  to the contrary, Owner shall defend, indemnify, and hold harmless Manager and its  representative subsidiaries, affiliates, officers, directors, employees, agents or independent  contractors from and against all claims, demands, or legal proceedings (including expenses and  reasonable attorney's fees incurred in connection with the defense of any such matter) (each a  "Claim") that are brought against Manager arising out of the operation or management of the  Project, except with respect to claims arising out of Manager's gross negligence or willful  misconduct. Manager shall defend, indemnify, and hold harmless Owner and its representative  subsidiaries, affiliates, officers, directors, employees, agents or independent contractors from all  Claims arising out of the gross negligence or willful misconduct of Manager. The  indemnification obligations under this Section 3.7(d) shall survive termination of this  Agreement.               (e)  Acts of Tenants and Third Parties. In no event shall Manager have any  liability to Owner or others for any acts of vandalism, trespass or criminal activity of any kind by  tenants or third parties on or with respect to the Property and Owner's insurance shall be primary  insurance without right of subrogation against Manager regarding claims arising out of or  resulting from acts of vandalism, trespass or criminal activity.                                        7  





 






      Section 3.8 Collection of Monies. Manager shall use its diligent efforts to collect all  rents and other charges due from tenants, users of garage spaces, carports, storage spaces (if  any), commercial lessees (if any) and concessionaires (if any) in respect of the Property and  otherwise due Owner with respect to the Property in the ordinary course of business, provided  that Manager does not guarantee the creditworthiness of any tenants, users, lessees or  concessionaires or collectability of accounts receivable from any of the foregoing. Owner  authorizes Manager to request, demand, collect, receive and receipt for all such rent and other  charges and to institute legal proceedings in the name of Owner, and at Owner's expense, for the  collection thereof, and for the dispossession of tenants and other persons from the Property or to  cancel or terminate any lease, license or concession agreement for breach or default thereunder,  and such expense may include the engaging of legal counsel for any such matter. All monies  collected by Manager shall be deposited in the separate bank account referred to in Section 5.2  herein.         Section 3.9 Manager Disbursements.               (a)  Manager's  Compensation  and  Reimbursements.   From  Gross  Collections, Manager shall be authorized to retain and pay (1) Manager's compensation, together  ,vith all sales or other taxes (other than income) which Manager is obligated, presently or in the  future, to collect and pay to the State or any other governmental authority with respect to the  Property or employees at the Property, (2) the amounts reimbursable to Manager under this  Agreement, (3) the amount of all real estate taxes and other impositions levied by appropriate  authorities with respect to the Property which, if not escrowed with any mortgagee, shall be paid  upon specific written direction of Owner before interest begins to accrue thereon; and  (4) amounts otherwise due and payable as operating expenses of the Property authorized to be  incurred under the terms of this Agreement.               (b)  Debt Service. The provisions of this Section 3.9 regarding disbursements  shall include the payment of debt service related to any mortgages of the Property, unless  otherwise instructed in writing by Owner.               (c)   Third Parties. All costs, expenses, debts and liabilities owed to third  persons that are incurred by Manager pursuant to the terms of this Agreement and in the course  of managing, leasing and operating the Property shall be the responsibility of Owner and not  Manager. Owner agrees to provide sufficient working capital funds to Manager so that all  amounts due and owing may be promptly paid by Manager. Manager is not obligated to advance  any funds. If at any time there is not sufficient cash in the account available to Manager  pursuant to Section 5.2 with which to promptly pay the bills due and owing, Manager will  request that the necessary additional funds be deposited by Owner in an amount sufficient to  meet the shortfall. Owner will deposit the additional funds requested by Manager within five  days.               (d)   Other Provisions. The  prov1s1ons of this Section 3.9 regarding  reimbursements to Manager shall not limit Manager's rights under any other provision of this  Agreement.                                         8  





 






     Section 3.10 Use and Maintenance of Premises. Manager agrees that it will not  knowingly permit the use of the Property for any purpose that might void any insurance policy  held by Owner or that might render any loss thereunder uncollectible, or that would be in  violation of Governmental Requirements, or any covenant or restriction of any lease of the  Property. Manager shall use its good faith efforts to secure substantial com pliancc by the tenants  with the terms and conditions of their respective leases. All costs of correcting or complying  with, and all fines payable in connection with, all orders or violations affecting the Property  placed thereon by any governmental authority or Board of Fire Underwriters or other similar  body shall be at the cost and expense of Owner.         Section 3.11 Annual Business Plan.              (a)   Submission. No later than 60 days prior to the end of each Fiscal Year  during the term of this Agreement, or such earlier date as reasonably requested by Owner, its  lenders or investors, Manager shall prepare and submit to Owner for Owner's approval, an  Annual Business Plan for the promotion, leasing, operations, repair and maintenance of the  Property for the succeeding Fiscal Year during which this Agreement is to remain in effect (the  "Annual Business Plan"). The Annual Business Plan shall include a detailed budget of  projected income and expenses for the Property for such Fiscal Year (the "Operating Budget")  and a detailed budget of projected capital improvements for the Property for such Fiscal Year  (the "Capital Budget").              (b)   Approval. Manager shall meet with Owner to discuss the proposed  Annual Business Plan and Owner shall approve the proposed Annual Business Plan within 20  days of its submission to Owner, or as soon thereafter as commercially practicable. To be  effective, any notice which disapproves a proposed Annual Business Plan must contain specific  objections in reasonable detail to individual line items. If Owner fails to provide an effective  notice disapproving a proposed Annual Business Plan within such 20-day period, the proposed  Annual Business Plan shall be deemed to be approved. Owner ac!mowledges that the Operating  Budget is intended only to be a reasonable estimate of the income and expenses of the Property  for the ensuing Fiscal Year. Manager shall not be deemed to have made any guarantee, warranty  or representation whatsoever in connection with the Operating Budget.               (c)  Revision. Manager may revise the Operating Budget from time to time,  as necessary, to reflect any unpredicted significant changes, variables or events or to include  significant additional, unanticipated items of revenue and expense, Any such revision shall be  submitted to Owner for approval, which approval shall not be unreasonably ,vithheld, delayed or  conditioned.               (d)  Implementation. Manager agrees to use diligence and to employ all  reasonable efforts to ensure that the actual costs of maintaining and operating the Property shall  not exceed the Operating Budget either in total or in any one accounting category. Any expense  causing or likely to cause a variance of greater than ten percent (I 0%) or S25,000, whichever is  greater, in any one accounting category for the current month cumulative year-to-date total shalJ  be promptly explained to Owner by Manager in the next operating statement submitted by  Manager to Owner.  





 






      Section 3.12 Records, Reporting. Manager shall maintain at the regular business  office of Manager or at such other address as Manager shall advise Owner in writing, separate  books and journals and orderly files, containing rental records, insurance policies, leases,  correspondence, receipts, bills and vouchers, and all other documents and papers pertaining  directly to the Property and the operation thereof. All corporate statements, receipts, invoices,  checks, leases, contracts, worksheets, financial statements, books and records, and all other  instruments and documents relating to or arising from the operation or management of the  Property shall be and remain the property of Owner and the Owner shall have the right to inspect  such records at any reasonable time upon prior notice; Manager shall have the right to request  and maintain copies of all such matters, at Manager's cost and expense, at all reasonable times  during the tenn of this Agreement, and for a reasonable time thereafter not to exceed three years.  All on-site records, including leases, rent rolls, and other related documents shall remain at the  respective Property for which such records arc maintained as the property of Owner.         Section 3.13 Financial Reports.               (a)  Monthly Reports. On or before the fifteenth (15111 ) day of each month  during the term of this Agreement, Manager shall deliver or cause to be delivered to Owner's  Representative a statement of cash flow for the Property (on a cash and not an accrual basis) for  the preceding calendar month. All notices from any mortgagee claiming any default in any  mortgage on the Property, and any other notice from any mortgagee not of a routine nature, shall  be promptly delivered by Manager to Owner's Representative.               (b)  Annual Reports. Within 45 days after the end of each Fiscal Year,  Manager shall deliver to Owner's Representative a statement of cash flow showing the results of  operations for the Fiscal Year or portion thereof during which the provisions of this Agreement  were in effect.               (c)   Employee Files. Manager shall execute and file punctually when due all  forms, reports and returns required by law relating to the employment of personnel.         Section 3.14 Compliance with Governmental Requirements. Manager shall comply  with all laws, ordinances and regulations relating to the management, leasing and occupancy of  the Property, including any regulatory or use agreements. Owner acknowledges that Manager  does not hold itself out to be an expert or consultant with respect to, or represent that, the  Property currently complies with applicable ordinances, regulations, rules, statutes, or laws of  governmental entities having jurisdiction over the Properties or the requirements of the Board of  Fire Underwriters or other similar bodies (collectively, "Governmental Requirements").  Manager  shall take such action as may be reasonably necessary to comply with any  Governmental Requirements applicable to Manager, including the collection and payment of all  sales and other taxes (other than income taxes) which may be assessed or charged by the State or  any governmental entities in connection with Manager's compensation. If Manager discovers  that the Property does not comply with any Governmental Requirements, Manager shall take  such action as may be reasonably necessary to bring the Property into compliance ,vith such   Governmental Requirements, subject to the limitation contained in Section 3.5 of this Agreement  regarding the making of alterations and repairs. Manager, however, shall not take any such  action as long as Owner is contesting or has affirmed its intention to contest and promptly                                        JO  





 






institute proceedings contesting any such order or requirement. If, however, failure to comply  promptly with any such order or requirement would or might expose Manager to civil or criminal  liability, Manager shall have the right, but not the obligation, to cause the same to be complied  with and Owner agrees to indemnify and hold Manager hannless for talcing such actions and to  promptly reimburse Manager for expenses incurred thereby. Manager shall promptly, and in no  event later than 72 hours from the time of receipt, notify Owner's Representative in writing of all  such orders or notices. Manager shall not be liable for any effort or judgment or for any mistake  of fact or oflaw, or for anything that it may do or refrain from doing, except in cases of willful  misconduct or gross negligence of Manager.                                   ARTICLE4                      MANAGER'S COMPENSATION, TERM         Section 4.1 Fees Paid to Manager. Commencing on tl1e date hereof, Owner shall pay  to Manager a fee (the "Management Fee"), payable monthly in arrears, in an amount equal to  Three Percent (3.0%) of Gross Collections for such month. The Management Fee shall not be  subject to off-sets and charges unless agreed upon by the parties. Pass-Through Amounts shall  be collected monthly by Manager, as applicable.         Section 4.2 Term. This Agreement shall commence on the Effective Date, and shall  thereafter continue for a period of one (1) year from the Effective Date, unless otherwise  tenninated as provided herein. Thereafter, if neither party gives written notice to the other at  least 60 days prior to the expiration date hereof that tliis Agreement is to tenninate, then this  Agreement shall be automatically renewed on a montli-to-month basis.         Section 4.3 Termination Rights. Notwithstanding anytliing that may be contained  herein to the contrary, Owner may terminate tliis Agreement at any time by giving Manager  thirty (30) days written notice thereof upon a determination of gross negligence, willful  misconduct or bad acts of Manager or any of its employees. If Owner or Manager shall  materially breach its obligations hereunder, and such breach remains uncured for a period of 30  days after written notification of such breach, tlie party not in breach hereunder may tenninate  this Agreement by giving written notice to tlie other, Any notice given pursuant to this Article 4,  shall be sent by certified mail.         Section 4.4 Duties on Termination. Upon any tennination of this Agreement as  contemplated in Section 4.4, Manager shall be entitled to receive all compensation and  reimbursements, if any, due to Manager through the date of termination. Within 30 days after  any tennination, Manager shall deliver to Owner's Representative, the report required by  Section 3.13(a) for any period not covered by such a report at time of termination, and witliin 30  days after any such termination, Manager shall deliver to Owner's Representative, as required by  Section 3.13(b), tlie statement of cash flow for the Fiscal Year or portion thereof ending on the  date of tennination. In addition, upon termination of this Agreement for any reason, Manager  will submit to Owner within 30 days after tcnnination any reports required hereunder, all of tlie  cash and bank accounts of the Property, including, without limitation, the Security Deposit  Account, investments and records. Manager will, within 30 days after termination, tum over to  Owner all copies of all books and records kept for the Property. If Manager desires to retain  records of the Property, Manager must reproduce tlicm at its own expense.                                        11  





 






                                ARTICLES       PROCEDURES FOR HANDLING RECEIPTS AND        OPERATING CAPITAL         Section 5.1 Security Deposits. Manager shall collect, deposit, hold, disburse and pay  security deposits as required by applicable State law and all other applicable laws, and in  accordance with the terms of each tenant's lease. The amount of each security deposit will be  specified in the tenant's lease. Security deposits shall be deposited into a separate non-interest­ bearing account unless otherwise required by law (the "Security Deposit Account") at a  Depository selected by Manager and approved by Owner. The Security Deposit Account shall  be established in the name of Manager and held separate from all other of Manager's funds and  accounts, unless Owner informs Manager, in writing that it intends to hold the Security Deposit  Account. If such account is held by Manager, only representatives of Manager will be  signatories to this account. To the extent possible, the Security Deposit Account shall be fully  insured by the Federal Deposit Insurance Corporation (FDIC). Owner agrees to indemnify and  hold harmless Manager, and Manager's representatives, officers, directors and employees for any  loss or liability with respect to any use by Owner of the tenant security deposits that is  inconsistent with the terms of tenant leases and applicable laws.         Section 5.2 Separation of Owner's Monies. Manager shall deliver all collected  rents, charges and other amounts received in connection with the management and operation of  the Property (except for tenants' security deposits, which will be handled as specified in this  Agreement) to a Depository selected by Manager and approved by Owner.         Section 5.3 Depositorv Accounts. Except to the extent that Manager has not  complied with its obligations under Sections 2.4 and 5.2, Owner and Manager agree that  Manager shall have no liability for loss of funds of Owner contained in the bank accounts for the  Property maintained by Owner or Manager pursuant to this Agreement due to insolvency of the  bank or financial institution in which its accounts are kept, whether or not the amounts in such  accounts exceed the maximum amount of federal or other deposit insurance applicable with  respect to the financial institution in question.         Section 5.4 \Vorking Capital. In addition to the funds derived from the operation of  the Property, Owner shall furnish and maintain in the operating accounts of the Property such  other funds as may be necessary to discharge financial commitments required to efficiently  operate the Property and to meet all payrolls and satisfy, before delinquency, and to discharge all  accounts payable. Manager shall have no responsibility or obligation with respect to the  furnishing of any such funds. Nevertheless, Manager shall have the right, but not the obligation,  to advance funds or contribute property on behalf of Owner to satisfy obligations of Owner in  connection with this Agreement and the Property. Manager shall keep appropriate records to  document all reimbursable expenses paid by Manager, which records shall be made available for  inspection by Owner or its agents on request. Owner agrees to reimburse Manager upon demand  for money paid or property contributed in connection with the Property and this Agreement.         Section 5.5 Authorized Signatures. Any persons from time to time designated by  Manager shall be authorized signatories on all bank accounts established by Manager pursuant to  this Agreement and shall have authority to make disbursements pursuant to the terms of this  Agreement from such accounts. Funds may be withdrawn from all bank accounts established by                                       12  





 






Manager, in accordance with this Article 5, only upon the signature of an individual who has  been granted that authority by Manager and funds may not be withdrawn from such accounts by  Owner unless Manager is in default hereunder.                                   ARTICLE6                               MISCELLANEOUS         Section 6.1 Assignment. Upon 30 days written notification, Owner may assign its  rights and obligations to any successor in title to the Property and upon such assignment shall be  relieved of all liability accruing after the effective date of such assignment. This Agreement may  not be assigned or delegated by Manager without the prior written consent of Owner, which  Owner may withhold in its sole discretion. Any unauthorized assignment shall be null and void  ab initio, and shall not in any event release Manager from any liabilities hereunder.         Section 6.2 Notices. All notices required or permitted by this Agreement shall be in  writing and shall be sent by registered or certified mail, addressed in the case of Owner to STAR   Barrett Lakes, LLC, 18100 Von Karman Avenue, Suite 500, Irvine, CA 92612, Attention: Kevin  Keating; and in the case of Manager to Steadfast Management Company, Inc., 18100 Von  Karman Avenue, Suite 500, Irvine, CA 92612, Attention: Christopher Hilbert, or to such other  address as shall, from time to time, have been designated by written notice by either party given  to the other party as herein provided.         Section 6.3 Entire Agreement. This Agreement shall constitute the entire agreement  between the parties hereto and no modification thereof shall be effective unless in writing  executed by the parties hereto.         Section 6.4 No Partnership. Nothing contained in this Agreement shall constitute or  be construed to be or create a partnership or joint venture between Owner, its successors or  assigns, on the one part, and Manager, its successors and assigns, on the other part.         Section 6.5 No Third Party Bcnefic!nry. Neither this Agreement nor any part hereof  nor any service relationship shall inure to the benefit of any third party, to any trustee in  bankruptcy, to any assignee for the benefit of creditors, to any receiver by reason of insolvency,  to any other fiduciary or officer representing a bankrupt or insolvent estate of either party, or to  the creditors or claimants of such an estate. Without limiting the generality of the foregoing  sentence, it is specifica]Jy understood and agreed that such insolvency or bankruptcy of either  party hereto shall, at the option of the other party, void all rights of such insolvent or bankrupt  parcy hereunder (or  so many of such rights as the other party shall elect to void).         Section 6.6 Sevcrabil!ty. If any one or more of the provisions of this Agreement, or  the applicability of any such provision to a specific situation, shall be held invalid or  unenforceable, such provision should be modified to the minimum extent necessary to make it or  its application valid and enforceable, and the validity and enforceability of all other provisions of  this Agreement and all other applications of such provisions shall not be affected thereby.         Section 6.7 Captions, Plural Terms. Unless the context clearly requires otherwise,  the singular number herein shall include the plural, the plural number shall include the singular                                        13  





 






and  any gender shall include all genders. Titles and captions herein shall not affect the  construction of this Agreement.         Section 6.8 Attorneys' Fees. Should either party employ an attorney to enforce any  of the provisions of this Agreement, or to recover damages for breach of this Agreement, the  non-prevailing party in any action agrees to pay to the prevailing party all reasonable costs,  damages and expenses, including reasonable attorneys' fees, expended or incurred by the  prevailing party in connection therewith.         Section 6.9 Signs. Manager shall have the right to place signs on the Property in  accordance with applicable Governmental Requirements stating that Manager is the manager and  leasing agent for the Property.         Section 6.10 Survival of Indemnities. The indemnification obligations of the parties  to this Agreement shall survive the termination of this Agreement to the extent of any claim or  cause of action based on an event occurring prior to the date of termination.         Section 6.11 Governing Law. This Agreement shall be construed under and in  accordance with the laws of the State and is fully performable with respect to the Property in the  county in which the Properly is located.         Section 6.12 Competitive Properties. Manager may, individually or with others,  engage or possess an interest in any other project or venture of every nature and description,  including but not limited to, the ownership, financing, leasing, operation, management,  brokerage and sale of real estate projects including apartment projects other than the Property,  whether or not such other venture or projects are competitive with the Property and Owner shall  not have any claim as to such project or venture or to the income or profits derived therefrom.         Section 6.13 Set Off. Without prejudice to Manager's right to terminate this  Agreement in accordance with the terms of this Agreement, Manager may at any time and  without notice to Owner, set off or transfer any sums held by Manager for or on behalf of Owner  in the accounts (other  than the Security Deposit Account) maintained pursuant to this Agreement  in or towards satisfaction of any of Owner's liabilities to Manager in respect of any sums due to  Manager under this Agreement.         Section 6.14 Notice of Default Manager shall not be deemed in default under this  Agreement, and Owner's right to terminate Manager as a result of such default shall not accrue,  until Owner has delivered written notice of default to Manager and Manager has failed to cure  same within 30 days from the date of receipt of such notice.        Section 6.15 Counterparts. This Agreement may be executed in two or more  counterparts, each of which shall be deemed to be an original.                         [Signatures appear on following page.]                                        i4  





 






           This Property Management Agreement is hereby executed by duly authorized  representatives of the parties hereto as of the Effective Date.     O'WNER:                     STAR BARRETT LAKES, LLC,                               a Delaware limited liability company                                By:   Steadfast Apartment Advisor, LLC, its Manager     MANAGER:                    STEADFAST MANAGEMENT COMPANY, INC.,                               a California corporation                               By:/a     142                                   William C. Stoll, Vice President                                         i5  





 






                                    EXHIBIT A                       ESTIMATED PASS-THROUGH AMOUNTS   Benefits Administration                                  3.0% of total employee costs  IT Infrastructure, Licenses and Support                  At cost and expense  Marketing/Training/Continuing Education                  $20.00 p.u.p.y.                                             16  





 






                                    EXHIBITB                                   THE PROPERTY   The 1800 Barrett Lakes is located at 1800 Barrett Lakes Boulevard NW, Kennesaw, Georgia, in  the County of Cobb, and described as follows:   The Property is comprised of39 buildings with 500 units and 38 detached garages. Site  amenities include leasing center, clubhouse, two swimming pools, sauna, two lighted tennis  courts, fitness center, and playground. It is situated on 68.19 acres. Phase I was built in 1989  and phase 2 was built in 1997.                                             17