Document:

Ex 10.23 Management Agreement (Hearthstone)

EXHIBIT 10.23

PROPERTY MANAGEMENT AGREEMENT
THIS PROPERTY MANAGEMENT AGREEMENT (this “Agreement”) is made and entered into as of June 25, 2015 (the “Effective Date”), by and between STAR HEARTHSTONE, LLC, a Delaware limited liability company (“Owner”), and STEADFAST MANAGEMENT COMPANY, INC., a California corporation (“Manager”). 
ARTICLE 1
DEFINITIONS
Section 1.1    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 Year” 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 taxes, franchise fees, and awards arising out of eminent domain proceedings, discounts and dividends on insurance policies.

“Hazardous Materials” means any material 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 hazardous 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.
“Management Fee” has the meaning given in Section 4.1.
“Manager” 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.
“Property” means the multifamily apartment project listed and described on Exhibit B attached hereto and made a part hereof.
“Security Deposit Account” has the meaning given in Section 5.1.
“State” means the state in which the Property is located.
ARTICLE 2
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.
Section 2.3    Leasing.  Manager shall perform 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 in its capacity as manager pursuant to this Agreement.  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.
ARTICLE 3 
SERVICES TO BE PERFORMED BY MANAGER

Section 3.1    Expense of Owner.  All acts performed by Manager in the performance 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:

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(a)    Costs and Expenses.  All costs and expenses incurred by Manager, in its capacity as Manager pursuant to this Agreement, in connection with 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 expenses), general accounting and reporting expenses for services included among Manager’s duties under the Agreement; and
(b)    Other.  All sums otherwise 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 all 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. 

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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 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, in its capacity as Manager pursuant to this Agreement, at Owner’s expense, 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 its capacity as Manager to this Agreement, 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 Manager 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 and 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 taking 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 laws, rules, restrictions or regulations applicable to Manager 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.

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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, in its capacity as Manager pursuant to this Agreement, 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, in its capacity as Manager pursuant to this Agreement, negotiate contracts with all necessary contractors, subcontractors, materialmen, suppliers, architects, and engineers and may, in its capacity as Manager pursuant to this Agreement, compromise and settle any dispute or claim arising therefrom; 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 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 performed 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.

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Owner agrees to timely provide evidence of required 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 in its capacity as Manager pursuant to this Agreement.  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 Owner, Manager is authorized to settle any and all claims against insurance companies arising out of any policies, including the execution of proofs of loss, the adjustment of losses, 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 damage 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, damage, loss, liability or expense occurs as a result of injury to person or damage to property, regardless whether any such demand, claim, action, damage, 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, to 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 

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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.
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, in its capacity as Manager pursuant to this Agreement, to request, demand, collect, receive and receipt for all such rent and other charges and to institute legal proceedings 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.

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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 with 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 provisions of this Section 3.9 regarding reimbursements to Manager shall not limit Manager’s rights under any other provision of this Agreement.
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 compliance 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.

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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 acknowledges 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 withheld, 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 (10%) or $25,000, whichever is greater, in any one accounting category for the current month cumulative year-to-date total shall be promptly explained to Owner by Manager in the next operating statement submitted by Manager to Owner.

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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 term 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 are maintained as the property of Owner.
Section 3.13    Financial Reports.
(a)    Monthly Reports.  On or before the fifteenth (15th) 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 with such Governmental Requirements, subject to the limitation contained in Section 3.5 of this Agreement regarding the making of alterations and repairs.  Manager, however, shall not take any such action as long as Owner is contesting or has affirmed its intention to contest and promptly institute proceedings contesting any such order or requirement.  If, however, 

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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 harmless for taking 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 of law, or for anything that it may do or refrain from doing, except in cases of willful misconduct or gross negligence of Manager.
ARTICLE 4
MANAGER’S COMPENSATION, TERM
Section 4.1    Fees Paid to Manager.  Commencing on the 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 terminated as provided herein.  Thereafter, if neither party gives written notice to the other at least 60 days prior to the expiration date hereof that this Agreement is to terminate, then this Agreement shall be automatically renewed on a month-to-month basis.  
Section 4.3    Termination Rights.  Notwithstanding anything that may be contained herein to the contrary, Owner may terminate this 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, the party not in breach hereunder may terminate this Agreement by giving written notice to the other.  Any notice given pursuant to this Article 4, shall be sent by certified mail.  
Section 4.4    Duties on Termination.  Upon any termination of this Agreement as contemplated in Section 4.3, 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 termination, 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 within 30 days after any such termination, Manager shall deliver to Owner’s Representative, as required by Section 3.13(b), the statement of cash flow for the Fiscal Year or portion thereof ending on the date of termination.  In addition, upon termination of this Agreement for any reason, Manager will submit to Owner within 30 days after termination any reports required hereunder, all of the cash and bank accounts of the Property, including, without limitation, the Security Deposit Account, investments and records. Manager will, within 30 days after termination, turn 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 them at its own expense.

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ARTICLE 5
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    Depository 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    Working 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, in its capacity as Manager pursuant to this Agreement, have the right, but not the obligation, to advance funds or contribute property 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.

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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 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.
ARTICLE 6 
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 Hearthstone, 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 Beneficiary.  Neither this Agreement nor any part hereof nor any service relationship shall inure to the benefit of any third party, to any trustee in bankruptcy, to any assignee for the benefit of creditors, to any receiver by reason of insolvency, to any other fiduciary or officer representing a bankrupt or insolvent estate of either party, or to the creditors or claimants of such an estate.  Without limiting the generality of the foregoing sentence, it is specifically understood and agreed that such insolvency or bankruptcy of either party hereto shall, at the option of the other party, void all rights of such insolvent or bankrupt party hereunder (or so many of such rights as the other party shall elect to void).

13

Section 6.6    Severability.  If any one or more of the provisions of this Agreement, or the applicability of any such provision to a specific situation, shall be held invalid or unenforceable, such provision should be modified to the minimum extent necessary to make it or its application valid and enforceable, and the validity and enforceability of all other provisions of this Agreement and all other applications of such provisions shall not be affected thereby.
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 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 Property 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.

14

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.]

15

This Property Management Agreement is hereby executed by duly authorized representatives of the parties hereto as of the Effective Date.

	
					
	OWNER:
	 
	STAR HEARTHSTONE, LLC,

	 
	 
	a Delaware limited liability company

	 
	 
	 
	 
	 

	 
	 
	By:
	Steadfast Apartment Advisor, LLC, its Manager

	 
	 
	 
	 
	 

	 
	 
	 
	By:
	/s/ Ana Marie del Rio

	 
	 
	 
	 
	Ana Marie del Rio, Secretary

	
					
	MANAGER:
	 
	STEADFAST MANAGEMENT COMPANY, INC.,

	 
	 
	a California corporation

	 
	 
	 
	 
	 

	 
	 
	By:
	/s/ William C. Stoll

	 
	 
	 
	William C. Stoll, Vice President

16

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.

17

EXHIBIT B
THE PROPERTY

Hearthstone at City Center is located at 932 South Helena Way, Aurora, Colorado, in the County of Arapahoe, and described as follows:

The Property is comprised of 39 one- and two-story buildings with 360 units and a clubhouse/leasing office.  Site amenities include swimming pool, sauna, fitness center, business center, outdoor basketball court, and playground.  It is situated on 18.25 acres and it was built in 1984 and renovated in 2011.

18Ex. 10.24 Construction Agreement (Hearthstone)

EXHIBIT 10.24

CONSTRUCTION MANAGEMENT SERVICES AGREEMENT
THIS CONSTRUCTION MANAGEMENT SERVICES AGREEMENT (this “Agreement”) is entered into as of June 25, 2015 by and between STAR HEARTHSTONE, LLC, a Delaware limited liability company (the “Company”), and PACIFIC COAST LAND & CONSTRUCTION, INC., a California corporation (the “Construction Manager”).  
RECITALS
A.    The Company, directly or through a wholly-owned subsidiary, owns that certain 360-unit multifamily housing development located in Aurora, Colorado and commonly known as Hearthstone at City Center Apartments (the “Project”), which Project is scheduled to undertake certain capital improvements projects (the “Improvements”) and/or certain revitalization projects (the “Revitalization”) from time to time.
B.    The Construction Manager is experienced and staffed to oversee and manage completion of the Improvements and Revitalization.   
C.    The Company desires to engage the Construction Manager to provide certain services for the Company with respect to the Improvements and Revitalization, including but not limited to compliance with the Agreement(s) for Contractor Services executed in connection with the Improvements and Revitalization, a form of which is attached hereto as Exhibit A, and will be entered into with each contractor (the “Contractor Agreements”).  
NOW, THEREFORE, in consideration of the foregoing, of the mutual promises of the parties hereto, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:
AGREEMENT
1.Appointment.  The Company hereby appoints the Construction Manager to render services in connection with the Improvements and Revitalization as contemplated herein and in the Contractor Agreements, and confirms and ratifies the appointment of the Construction Manager with respect to such services rendered for the Company to date, if any.
2.Authority.  The Construction Manager shall have the authority and the obligation to:
(a)    monitor the Scope of Work (as described in the applicable Contractor Agreement) and timely completion of each Improvement and Revitalization project, as such Improvement and Revitalization project is to be completed pursuant to the applicable Contractor Agreement;
(b)    make recommendations with respect to the Improvements and Revitalization and their repair or construction; 

    

(c)    assist the Company in making determinations and taking action under the Contractor Agreements; 
(d)    coordinate accurate and timely draw requests for lender, if any, and release of all applicable contractor lien rights for work completed; and
(e)    maintain complete and accurate records relating to the Improvements and Revitalization, the Contractor Agreements and the services provided under this Agreement.
3.    Fees.  For services that are to be, or have been, performed under this Agreement, the Company agrees to pay the Construction Manager a fee (the “Construction Management Fee”), in an amount equal to Eight Percent (8.0%) of the total costs of the Improvements and Revitalization, which Construction Management Fee shall be payable from time to time as and when the Company makes payments under the Contractors Agreement.  
4.    Insurance; Indemnification.  During the term of this Agreement, Construction Manager shall procure and maintain, at its sole cost and expense, at least the following types and amounts of insurance coverage: (a) Commercial General Liability with limits no less than $1 Million per occurrence and $2 Million in the aggregate; (b) Commercial Automobile Liability with limits no less than $1 Million, combined single limit, (c) Worker's Compensation insurance with limits no less than the minimum amount required by applicable law; and (d) Errors and Omissions/Professional Liability with limits no less than $1 Million per occurrence.  All required insurance policies shall be issued by insurance companies with a Best's Rating of no less than A-VII and provide that such insurance carriers give the Company at least 30 days' prior written notice of cancellation or non-renewal of policy coverage.  The policies are to name the Company or its applicable subsidiary as additional insureds and will waive any right of subrogation of the insurers against the Company or any of its affiliates.
The Company shall defend, indemnify and hold harmless the Construction Manager and its officers, directors, employees, agents, successors and permitted assigns (each, an “Indemnitee") from and against all claims, costs, losses and damages,  arising out of or resulting from any third party claim, suit, action or proceeding relating to the Project or the Improvements and Revitalization.  Construction Manager shall defend, indemnify and hold harmless the Company and its Indemnitees from and against all losses arising out of or resulting solely from the willful, fraudulent or grossly negligent acts or omissions of Construction Manager.
5.    Termination.  This Agreement may be terminated by either party with 30-days prior written notice to the other party.  
6.    Assignment; Successors and Assigns.  No party shall assign its rights or delegate its obligations without the consent of the other party, which consent may be withheld in such other parties’ sole and absolute discretion; provided, however, that no consent is required for an assignment to an affiliate of such party.  In the event of an assignment permitted hereunder, this Agreement shall be binding on the parties hereto and their successors and assigns.

	
			
	 
	2

	 

Construction Management Services Agreement

    

7.    Arbitration.  All claims and disputes arising under or relating to this Agreement are to be settled by binding arbitration in the state of California or another location mutually agreeable to the parties. The arbitration shall be conducted on a confidential basis pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Any decision or award as a result of any such arbitration proceeding shall be in writing and shall provide an explanation for all conclusions of law and fact and shall include the assessment of costs, expenses, and reasonable attorneys' fees.  Any such arbitration shall be conducted by an arbitrator experienced in construction matters and mutually agreed upon by the parties.  The arbitrator shall include a written record of the arbitration hearing.    The ruling of such arbitrator shall be binding upon the parties hereto and shall be final and non-appealable.  An award of arbitration may be confirmed in a court of competent jurisdiction.   
8.    Separability of Provisions.  Each provision of this Agreement shall be considered separable and if for any reason any provision that is not essential to the effectuation of the basic purposes of this Agreement is determined to be invalid and contrary to any existing or future law, such invalidity shall not impair the operation of or affect those provisions of this Agreement which are valid.
9.    Facsimile Signatures; Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original copy and all of which together shall constitute one agreement binding on all parties hereto, notwithstanding that all the parties shall not have signed the same counterpart.  Any party may effect the execution and delivery of this Agreement by signing the same and sending a copy thereof to the other party or its attorney by facsimile or electronic transmission. Such facsimile document, including the signatures thereon, shall be treated in all respects as an original instrument bearing an original signature.
10.    No Continuing Waiver.  The waiver of any party of any breach of this Agreement shall not operate or be construed to be a waiver of any subsequent breach.
11.    Applicable Law.  This Agreement shall be construed and enforced under the laws of the state in which the Project is located.

[Remainder of page intentionally left blank.]

	
			
	 
	3

	 

Construction Management Services Agreement

    

IN WITNESS WHEREOF, the parties have caused this Construction Management Services Agreement to be duly executed as of the date as first written above.

COMPANY:

STAR HEARTHSTONE, LLC, a Delaware limited liability company

		
	By:
	 STEADFAST APARTMENT ADVISOR, LLC, its Manager

    	
			
	By:
	/s/ Ana Marie del Rio

	Name:
	Ana Marie del Rio

	Its:
	Secretary

CONSTRUCTION MANAGER:

PACIFIC COAST LAND & CONSTRUCTION, INC., a California corporation

	
			
	By:
	/s/ Dinesh Davar

	Name:
	Dinesh Davar

	Its:
	Chief Financial Officer

	
			
	 
	4

	 

Construction Management Services Agreement

    

AGREEMENT FOR CONTRACTOR SERVICES
This Agreement for Contractor Services (this "Agreement") is made as of ___________, 20__, between ______________________________, a _________________ ("Owner"), and __________________________________________, a __________________________ ("Contractor").  For purposes of this Agreement, Owner shall mean Owner or its agent, Pacific Coast Land & Construction, Inc., a California corporation ("Construction Manager"), as directed by Owner.

		
	1.
	Job Site:       _____________________ Apartments, located at _____________________________, City of ________, State of _________________ (the "Job Site").

		
	2.
	Scope of the Work:  Contractor agrees to furnish all supervision, labor, materials, equipment, supplies, services, machinery, tools and all other elements necessary for the proper, complete, expeditious and efficient performance of the work described below which shall be hereinafter referred to as (the “Work”):

(a)    Attached Proposal / Work Scope from Contractor.  □  Attached, or
(b)    Other (please describe):  __________________________________________________________________________________________________

		
	3.
	Contract Plans and Specifications:  The addenda, drawings, plans, general and supplementary conditions and specifications attached to this Agreement, together with __________________ (collectively, the "Plans and Specifications"), constitute the approved Plans and Specifications for the Work.  Contractor and its subcontractors will be and are bound by any and all of said Plans and Specifications insofar as they relate in any part or in any way to the work covered by this Agreement.  In the event of any conflict between the provisions of Plans and Specifications and the Contractor’s proposal, the Plans and Specifications shall govern.

		
	4.
	Commencement and Completion:  The Work shall commence on _______________, 20__ and shall be complete in accordance with this Agreement without delay on ______________, 20__.  The term “day”, used throughout this Agreement, refers to calendar days.   Contractor shall not be entitled to any additional compensation for any Permitted Delays.  If this Agreement is not signed and returned to the Owner before any work commences, this Agreement will be considered as accepted as presented to the Contractor.

		
	5.
	Payment:

(a)Contract Price:  The Owner agrees to pay the Contractor for the full and faithful performance of the Work, including all applicable taxes, and the Contractor agrees to accept such payment as full and just compensation therefor.  The Work is to be done on a time and material basis as it is set forth in the “Scope of Work” referenced in Section 2 above, and the total estimated cost for the Work is ___________________________________________ DOLLARS AND __/100 ($________.__) (the “Contract Price”) in current funds subject to additions and deductions for changes and/or charges as may be agreed upon in writing pursuant to this Agreement.

(b)Progress Payments:  All applications for payment ("Invoices"), in form acceptable to Owner, shall include a complete description of the labor and materials supplied, and the work done during the period covered by the Invoice (the "Invoice Period").  All Invoices shall be accompanied by (i) a list of all suppliers and subcontractors whose materials or services have been utilized by Contractor to perform the work described in the Invoice, and (ii) signed waivers of and releases from any claim of lien, or stop notice that could be asserted by such suppliers, subcontractors and Contractor as a result of the work performed during the Invoice Period.  Each Invoice will be accompanied by certified statements from each supplier and subcontractor (1) indicating the total amount due them as a result of the work performed during the Invoice Period, (2) acknowledging that Contractor may or may not (in the Owner’s sole discretion) be paid by means of a joint check prepared based upon such certified statements, and (3) agreeing that such supplier's or subcontractor's negotiation of any such check shall be its representation that it has been timely and fully paid for work performed through the end of the Invoice Period.  Such certified statements shall be in the form prescribed by the laws of the state in which the Job Site is located, or if no such prescribed form exists, in substantially the form attached hereto as Exhibit A.  Contractor agrees to furnish, if and when required by Owner, payroll affidavits, receipts, vouchers, releases of claims for labor, material and subcontractors performing work or furnishing material under this Agreement, all in form satisfactory to Owner.  Subject to the payment provisions of this Agreement, ninety percent (90%) of the amount set forth in the Invoices shall be paid in any calendar month upon payment of the progress payment for such month to Contractor.  Invoices shall not be submitted more frequently than monthly, and shall include all charges made since the preceding Invoice Period.

(i)    Final Payment.  Contractor shall not be paid the remaining ten percent (10%) of the Contract Price until the Work has been completed in accordance with the Plans and Specifications, including but not limited to, (1) receipt of properly executed warranties; (2) attic stock materials designated in the  Plans and Specifications; (3) spare parts designated in the Plans and Specifications; (4) final lien releases from all suppliers, subcontractors and Contractor in the form prescribed by the laws of the state in which the Job Site is located, or if no such prescribed form exists, in substantially the form attached hereto as Exhibit B; (5) reasons listed in “Withholding Payment” have been removed; in each case to Owner’s satisfaction and (a) either (i) thirty (30) days have elapsed after a Notice of Completion for the Work has been recorded, or (ii) if a Notice of Completion for the Work is not recorded, Contractor receives a written notice of acceptance of the Work from Owner within thirty (30) days after Owner determines in good faith that the Work has been fully and acceptably performed, and (b) within ten (10) days after Lender has released retainage funds, which will not occur prior to 50% completion for the entire project, however, holding retainage could extend to final completion of the project.

	
			
	 
	1
	 

    

(ii)    Designated Representatives.  Owner and Contractor shall each designate a field representative, as such representative may be changed from time to time by written notice to the other party.  All notices, writings or other communications concerning this Agreement or the Work shall be made through each party's designated field representative, which for purposes of this Agreement shall be the respective Designated Representatives set forth below.  All addenda, change orders, or modifications to this Agreement must be signed by an authorized Designated Representative. 

		
	1.
	General Conditions:  This Agreement includes the General Conditions attached hereto and made a part hereof.

		
	2.
	Supplementary Conditions:  This Agreement also includes the Supplementary Conditions, if any, attached hereto as Appendix 1 and made a part hereof.  In the event of any conflict between the provisions of Appendix 1 and any other provision of this Agreement, the provisions of Appendix 1 shall control.  All Supplementary Conditions must be initialed by both Owner and Contractor in order to be binding upon the parties. 

NOTICE:  STATE REQUIRED NOTICES AND/OR DISCLOSURES, IF ANY, ARE ATTACHED HERETO AS APPENDIX 2.
	
		
	

OWNER:

_____________________________, a ________________________

By:  Pacific Coast Land & Construction, Inc.,
        a California corporation,
   authorized agent of Owner

     By:__________________________________________________
     Name:  ______________________________________________
     Title:  ________________________________________________

Dated: _________________________________________________

Address:  18100 Von Karman Avenue, Suite 500
                 Irvine, CA 92612

Designated Representative:

_____________________________________________
	

CONTRACTOR:

____________________________________, a _______________

By:__________________________________________________

Its:__________________________________________________

Dated:_______________________________________________

Address: _____________________________________________
           
License No.:__________________________________________
Federal Tax I.D. or F.I.C.A. No.:_______________________

Designated Representative:

_____________________________________________

	
			
	 
	2
	 

    

GENERAL CONDITIONS

1.    The Work.
(a)    Plans and Specifications; Laws.  The Work shall be performed in strict accordance with: (i) the Plans and Specifications; and (ii) all applicable federal, state and local codes, laws, permits, orders, ordinances and any rules and regulations promulgated there under, (collectively "Laws").
(b)    Shop Drawings.  Contractor shall submit such shop drawings, product data, samples and similar submittals (collectively, "Shop Drawings") to Owner as are required to accomplish the Work with reasonable promptness and in such sequence so as to cause no delay in the Work or in the activities of Owner or other contractors.  Owner shall review and approve all Shop Drawings with reasonable promptness.  Such review shall be for the sole purpose of verifying that the Shop Drawings comply with the requirements of the Plans and Specifications and are otherwise satisfactory to Owner.  Owner’s review and approval of the Shop Drawings is not an endorsement or approval of the safety or design of the Shop Drawings or their compliance with the Laws (Contractor is solely liable for such matters).  For purposes of this Agreement, Shop Drawings are drawings, diagrams, schedules and other information specially prepared for the Work.  Product data are illustrations, standard schedules, performance charts, instructions, brochures, diagrams and other information furnished by Contractor to illustrate materials or equipment used in connection with the Work.  Samples are examples of illustrative material or workmanship and establish standards by which the Work will be evaluated.
(c)    List of Suppliers and Subcontractors.  Concurrently with signing this Agreement, Contractor shall submit a signed statement under penalty of perjury to Owner in the form of Exhibit C attached hereto ("Supplier Statement") showing the names and addresses of all persons from whom Contractor expects to request or has requested services, materials, fixtures, or machinery and equipment for the Work.  Owner may object to any person or entity identified in the Supplier Statement by written notice to Contractor within five (5) calendar days after Owner receives the Supplier Statement.  Owner's failure to notify Contractor within the 5-day period constitutes acceptance of all persons identified in the Supplier Statement, subject to Owner's rights in Paragraph 2(a).  If Owner timely objects to any person or entity identified in the Supplier Statement, Contractor shall immediately replace the objectionable person or entity and resubmit an alternate to Owner for approval in accordance with the requirements and time constraints in this Paragraph1(c) until an acceptable alternate is submitted.  No additions to or changes of such statement will be made without the Owner's prior written consent.
(d)    Protection of the Work.  Contractor shall take all steps necessary to protect the Work from loss or damage by the elements, including fire, flood, rain, wind, hail, sand, cave-ins, collapses, and other hazards, and by the defective or incomplete labor or materials of others, or otherwise.  In the event of such loss or damage, Contractor shall promptly replace and restore the Work or any damaged portion thereof at its expense.
(e)    Overtime and Extra Labor and Equipment.  Contractor shall, at its expense, work such overtime and engage such extra labor and equipment as may be required to ensure the diligent prosecution and timely completion of the Work.
(f)    Reduction in the Work.  Owner may, by written notice to Contractor, reduce the amount of the Work to be completed by Contractor, without any liability to Contractor except to pay for work satisfactorily completed.
(g)    Permitted Delay.  Contractor shall be excused for any delay in performance or completion of the Work caused by (1) acts of God, public utilities or public bodies, (2) the elements beyond average weather conditions for the region, (3) modifications requested by Owner, and (4) other matters Contractor could not reasonably anticipate, control or avoid ("Permitted Delays").  In such event, the Completion Date shall be extended for a period equal to the Permitted Delay to the extent that it affects the critical path for performance of the Work, and provided that Contractor gives Owner written notice of the nature of the delay within twenty-four (24) hours after the delay begins, and under no circumstances shall the time of completion be extended to a date which will prevent Owner from completing the entire project within the time that Owner allows for such completion.  Contractor shall not be entitled to any additional compensation for any Permitted Delays.
(h)    Material Furnished By Others.  In the event the scope of work includes installation of material or equipment furnished by others, it shall be the responsibility of Contractor to examine the items so provided and thereupon unload, lift, handle, store and install the items with such skill and care as to insure a satisfactory installation.  Loss or damage due to acts of Contractor shall be charged to the account of Contractor and deducted from monies owed to Contractor under this Agreement. 
		
	2.
	    Job Site Conditions.

(a)    Supervision of the Work.  Contractor shall supervise and direct the Work at all times.  In this regard, Contractor shall (i) enforce strict discipline and good order among its employees (and those of its subcontractors and suppliers), (ii) faithfully and rigidly observe and ensure that its agents, employees, suppliers and subcontractors so observe, all (1) Laws and prudent business practices, and (2) rules of Owner and Contractor in effect at the Job Site from time to time, (iii) not employ or allow at the Job Site any unfit person or anyone not skilled in the work assigned to him and (iv) retain only competent persons on the jobsite.  Any person Owner determines to be incompetent, disorderly or otherwise unsatisfactory shall be immediately removed from the Job Site and shall not again be employed at the Job Site or at any other job of Owner.  Contractor shall not allow its own employees, its subcontractors' employees, or any other persons associated with the Work to (i) consume alcoholic beverages or illegal substances at the Job Site, (ii) perform any labor or work or traveling to or from the Job Site while under the influence of alcohol or illegal substances, and (iii) bring pets to the Job Site.

	
			
	 
	3
	 

    

(b)    No Defects.  Contractor's commencement of the Work constitutes Contractor's acceptance of the work of other contractors previously completed or commenced, and Contractor's acknowledgment that the Plans and Specifications are free of defects that would adversely affect Contractor's performance of the Work.  Contractor waives all claims against Owner with respect thereto.  If Contractor discovers a defect in the Plans and Specifications, the Work or in the work of others, Contractor shall immediately notify Owner of such defect.
(c)    Signs.  Contractor shall not post any sign at or in the vicinity of the Job Site nor permit any of its suppliers, subcontractors or employees to do so without the prior written approval of the style, size, type, color and location of the sign from Owner and from each applicable governmental agency.
(d)    Integration of the Work.  If necessary to integrate the Work with the work of others at the Job Site, Contractor shall (i) cut, fit, patch or plaster the Work so that it will be properly integrated with, receive or be received by, as applicable, the work of others, and (ii) alter the work of others provided (1) the prior written consent of Owner and the other contractors’ whose work will be affected is obtained, and (2) Contractor patches, plasters, paints, repairs and restores, at its expense, such altered work of others.
(e)    Hazardous Material.  Contractor shall not permit any Hazardous Material (as defined below) to be located, used, incorporated into the Work or brought onto the Job Site in connection with the Work unless (i) absolutely necessary because no alternative is available, (ii) the precise nature and quantity of the Hazardous Material is specified in writing to Owner, (iii) the prior written approval of Owner is obtained, and (iv) Contractor complies with all Laws and prudent business practices concerning the Hazardous Material required.  If Contractor encounters any material it reasonably believes to be Hazardous Material, or becomes aware of any incident involving Hazardous Material at the Job Site, Contractor shall immediately stop the Work in the area so affected and shall immediately report the same to Owner.  Contractor shall also immediately notify Owner of any notice Contractor receives concerning the presence or use of Hazardous Material at the Job Site.  Contractor shall be liable for all on and off-site disposal or transport of Hazardous Material (and shall sign any manifest for the transport or storage of such Hazardous Material), and for any discharge, release, injury to any person, or injury or damage to any property resulting from use of Hazardous Material in the performance of the Work.  Contractor shall, at its expense, cause the removal of the Hazardous Material and remedy any associated problems in accordance with applicable Laws and prudent business practices.  "Hazardous Material" shall mean (1) any Hazardous Material as defined under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act, or under any applicable state or local Laws, (2) any substance or matter that results in liability to any person or entity from discharge of or exposure to such substance or matter under any statutory or common law theory, (3) pesticides, asbestos, formaldehyde, polychlorinated biphenyl, solvents, petroleum and motor fuel hydrocarbon material, and (4) any other substance or matter that becomes subject to any federal, state or local agency order or requirement for removal, treatment or remedial action.
To the extent permitted by Law, and without in any way limiting any other indemnity obligation under this Agreement, Contractor shall indemnify, defend (at Contractor's sole cost and with legal counsel acceptable to Owner) and hold Owner and their respective officers, directors, agents, employees, representatives, shareholders, partners, affiliates, successors and assigns harmless, from and against any and all claims, losses, costs or liabilities arising out of an incurred connection with removing or remediating any Hazardous Materials on or about the Job Site or transported on, to, from or about the Job Site by Contractor.  This indemnity shall be effective during and after completion of the Work.
(f)    Cleanup, Storage and Safety.  Contractor shall maintain the site of the Work and the vicinity thereof, in a clean, neat and safe condition, to Owner's satisfaction and shall (i) store all materials, supplies and equipment in appropriate containers or enclosures that are secure from access by persons not associated with the Work in locations acceptable to Owner, (ii) remove from the Job Site all excess material and debris nightly during the performance of the Work, and all equipment, unused material and supplies and temporary structures upon completion of the Work, (iii) return each fence, barrier and obstruction that is temporarily relocated or displaced by Contractor to its original position and condition immediately after its relocation or displacement is no longer necessary.  No temporary structures, including construction trailers or other temporary office facilities, shall be placed or maintained at or in the vicinity of the Job Site without the Owner's prior written approval. Contractor shall take all reasonable safety precautions in the performance of the Work, including compliance with all OSHA requirements.  Contractor shall immediately notify Owner of any injury to any employee or agent of Contractor occurring at the Job Site.
		
	3.
	Examination by Contractor.

(a)    Review of Relevant Matters.  Contractor has examined, investigated and familiarized itself with: (i) the Plans and Specifications; (ii) the nature and location of the Job Site; (iii) the conformation of the ground and improvements of other contractors on which the Work is to be performed; (iv) the character, quality and quantity of the materials, equipment and facilities necessary to complete the Work in a good and workmanlike manner; (v) the general and local conditions relating to the Work; and (vi) all other matters that may affect Contractors performance of this Agreement.
(b)    No Reliance on Owner.  Contractor enters into this Agreement relying solely on its own examination and investigation of the foregoing matters and not on any representation or information relating to the Job Site or the Work (or the completion thereof) made by Owner or any agent of Owner not expressly contained in this Agreement.  Contractor assumes all risk of unknown Job Site conditions and releases Owner from any claim for additional compensation resulting from concealed or unknown and unusual Job Site conditions.
(c)    Satisfaction with Plans.  Any clarifications of any inadequacy, inconsistency, omission or conflict in the Plans and Specification or conflict or inconsistency in the Plans and Specifications and the Shop Drawings shall be made by Owner.  Contractor's failure to request any such clarification before execution of this Agreement shall not relieve Contractor of its obligation to perform in accordance with Owner's interpretations of the Plans and Specifications thereafter.  Contractor shall not be entitled to any additional compensation for performing the Work pursuant to Owner's interpretation of the Plans and Specifications.

	
			
	 
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4.    Insurance.
 Contractor shall, at its sole expense, maintain in effect at all times during the term of this Agreement and for a period of one year following completion of the Work, from a carrier with a Best rating of A-VIII or better, Workers' Compensation and Employer’s Liability, Commercial General Liability and Commercial Automobile Liability Insurance that covers all risks associated with the performance of the Work, the operation of vehicles, and the behavior of Contractor, its employees, suppliers, subcontractors and any other persons or entities associated with the Work at the request of or on behalf of Contractor.  Except as otherwise permitted by Law, such insurance shall include the following:
(a)    Statutory Workers' Compensation Insurance for all employees of Contractor together with Employer’s Liability coverage with minimum policy limits of one million dollars ($1,000,000) for bodily injury by accident/each accident, $1,000,000 bodily injury by disease/each employee, and $1,000,000 bodily injury by disease/policy limit.  Coverage must include waiver of subrogation endorsement in favor of Owner.
(b)    Commercial General Liability Insurance (Occurrence Form), including, but not limited to, Products-Completed Operations coverage and Contractual Liability assumed by Contractor with minimum policy limits of two million dollars ($2,000,000) General Aggregate, $2,000,000 Products-Completed Operations Aggregate, $1,000,000 Each Occurrence and $1,000,000 Personal and Advertising Injury.  Such coverage shall include an endorsement naming Owner as additional insured stating “Certificate Holder is named as Additional Insured per ACORD 25 Form (or equivalent form), an endorsement providing that the insurance afforded under Contractor’s policy is primary insurance with respect to Owner, and that any other insurance maintained by Owner is excess and non-contributory.  Coverage must include a Waiver of Subrogation endorsement.
(c)    Commercial Automobile Liability with minimum policy limits of $1,000,000 Combined Single Limit per accident for bodily injury and property damage, including coverage for owned, hired or non-owned vehicles operated by or on behalf of Contractor and used in connection with this Agreement. Owner will be named as additional insured. 
(d)    In addition to the above requirements, Owner reserves the right to require Umbrella or Excess Liability coverage.  Such additional requirements, if any, are attached hereto as Exhibit E.
Prior to occupying or beginning any Work on the Job Site, Contractor shall provide Owner with Certificates of Insurance evidencing such coverage in a form reasonably acceptable to Owner.

5.    Withholding Payment.
(a)    Reasons for Withholding.  Owner may withhold payments otherwise due to Contractor under this Agreement for any of the following reasons:
(i)    Omission of any Work required by this Agreement or Contractor's failure to cure defective or damaged Work;
(ii)    Failure to submit to Owner all information and waivers and releases required under this Agreement;
(iii)    Mechanics' liens, materialmen's liens, stop notices or bonded claims are filed or recorded or reasonable evidence indicating the probable filing or recording of such liens, notices or claims by Contractor or its suppliers or subcontractors, in which case Owner may withhold (1) in the case of a lien, notice or claim by Contractor, the amount claimed in the lien, notice or claim, and (2) in the case of a lien, notice or claim by Contractor's suppliers or subcontractors, One Hundred Fifty Percent (150%) of the amount sought;
(iv)    Contractor's failure to make payments properly to subcontractors, suppliers, materialmen, laborers, or other persons entitled to file a mechanics' lien, materialmen's lien, stop notice or claim as well as to union fringe benefit trust funds (to the extent required);
(v)    The existence of reasonable doubt by Owner that the Work will be completed for the balance of the Contract Price then unpaid, unless Contractor deposits with Owner funds in the amount of such suspected deficiency or performs a sufficient portion of the remaining Work to be performed at Contractor's sole cost so that such portion of the Contract Price then remaining unpaid is determined by Owner to be sufficient to complete the Work;
(vi)    Contractor's failure to complete the Work, or any reasonable indication that the Work will not be completed within the time required in this Agreement;
(vii)    Contractor's failure to construct, install or perform the items of the Work as required in this Agreement, or any reasonable indication that Contractor will be unable to perform the terms of the Work as required in this Agreement; and
(viii)    Any other grounds for withholding payment permitted by the Laws, or as otherwise permitted by this Agreement.
(b)    Payment of Withheld Amount.  Whenever the grounds giving rise to the above withholding have been removed, Owner shall pay Contractor the amount withheld less any expenses or damages Owner incurs as a result of the withholding, the cause of the withholding or the removal of the cause of the withholding.  If any of Contractor's laborers, subcontractors, suppliers or materialmen are not paid, Owner may pay such persons directly.  Any payment Owner makes directly to any of Contractor's laborers, subcontractors, suppliers or materialmen or for their benefit shall be deemed payment to Contractor and shall be credited against the Contract Price.

	
			
	 
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6.    Changes in the Work.
(a)    Change Order Request.  Owner may, at any time and from time to time, order additions, deletions or other modifications to the Work (a "Work Change") by submitting a written change order request to Contractor ("Change Order Request").  Owner's Designated Representative is the only person authorized to sign Change Order Requests.  Contractor shall not be compensated for any Work Change performed by Contractor at the request of anyone other than Owner's Designated Representative pursuant to a written Change Order Request.  Upon receipt of a duly authorized Change Order Request, Contractor shall perform any extra work, make any substitutions in the Work, or omit any portion of the Work required thereby and shall not thereafter perform any work or order materials that are inconsistent with such Change Order Request.  Contractor or anyone acting for or on behalf of Contractor shall not be entitled to any additional compensation for any labor, materials or equipment performed or ordered after receipt of a duly authorized Change Order Request if the same are not consistent with the Change Order Request.  Contractor shall (i) maintain records of all duly authorized modifications made to the Work, (ii) notify Owner's Representative of each such duly authorized modification immediately upon making the modification, and (iii) show such duly authorized modifications on a copy of the Plans and Specifications.  
(b)    Change Order Statement.  Upon receipt of a Change Order Request, Contractor shall promptly furnish to Owner a statement in the form of Exhibit D ("Change Order Statement") setting forth in detail, with a labor and material breakdown by trades and work classifications, (i) Contractor's estimate of any changes in the Contract Price attributable to the Change Order Request, and (ii) any proposed adjustment of the Completion Date resulting from the Change Order Request.  Such Change Order Statement shall be delivered to Owner within five (5) business day after Contractor's receipt of a Change Order Request.  Contractor shall have no claim for additional compensation as a result of the Change Order Request unless a Change Order Statement is delivered to Owner as required by this paragraph.
(c)          Adjustments to Contract Price.  
(i)    Upon receipt of a Change Order Statement, Owner shall determine the adjustment, if any, to the Contract Price.  Contractor shall be deemed to have accepted the adjustment or nonadjustment to the Contract Price if Owner does not receive written objection notice from Contractor within five (5) business days after Contractor's receipt of notice of the amount of the adjustment or nonadjustment to the Contract Price from Owner.  If Contractor timely delivers a written objection notice to Owner, the adjustment shall be determined by applying one of the following standards: (1) by reference to Unit Prices or (2) in the case of additions to the Work, cost of performing the additional work plus fifteen percent (15%), and in the case of deletions from the Work, an amount equal to the savings in cost plus ten percent (10%).  The Work shall not be delayed or interrupted during resolution of the adjustment or nonadjustment to the Contract Price.
(ii)    Alternatively, and in Owner's sole discretion, Owner may ask Contractor to submit bid prices for the modifications in the Work.  Such bid prices shall be consistent with the contract prices for the Plans and Specification covered by this Agreement.  If any bid price is not consistent, Owner may accept bids from other contractors. If the same are lower than that of Contractor, Owner will afford Contractor the opportunity to adjust its bid accordingly.  If Contractor does not agree to adjust its bid accordingly within five (5) business days, Owner may, at its option, renegotiate or terminate this Agreement in its entirety.
(d)          Contractor Initiated Changes.   If the Contractor initiates a substitution, deviation or change in the work which affects the scope of work or the expense of other trades, Contractor shall be liable for the expense thereof, and any incidental extra work created by the change to the Owner’s work.  

7.    Warranty, Testing and Correction.
(a)    Warranty of Materials and Workmanship.  Notwithstanding that any labor, equipment, or material furnished or installed by Contractor has been approved or accepted by Owner or any governmental agency, Contractor expressly warrants that all labor, material, equipment, and fixtures furnished or installed by it (or by its subcontractors or materialmen) hereunder shall be of good quality, free of any faults and defects including patent, latent or developed defects, and shall be completed as required in this Agreement.  This warranty shall survive for so long as Owner may be held liable for the matters warranted hereunder (in their respective roles as contractor, builder or seller) but in no event less than one (1) year after the date of completion and final acceptance of the Work.  The above warranty shall not limit or affect other warranties or guarantees expressly or impliedly made by Contractor or any of its subcontractors or materialmen and shall not limit or affect any remedies concerning express or implied warranties or negligent or willful acts or omissions of Contractor or any of its subcontractors or materialmen.  The above warranty shall be for the benefit of Owner and its respective successors and assigns.
(b)    Testing and Inspection of the Work.  Contractor shall, at its expense, obtain all inspections and approvals required by any Law or other guidelines of any public authority having jurisdiction over the Work.  Contractor shall furnish Owner with originals of all certificates of inspection, testing and approval.  Owner shall not be responsible for reviewing, nor shall its review and acceptance of the Work or any part thereof be deemed an endorsement or approval of, the safety or design of the Work or any part thereof or a determination of conformance with the Laws; provided, however, that Owner may test, inspect and approve the Work or cause the same to be accomplished without notice to Contractor.  Contractor shall make all portions of the Work available for inspection, testing and approval by Owner and all applicable governmental authorities.  Contractor shall notify Owner in writing of any inspection or testing that must be performed within a certain time period so as not to require modification of the Work or the work of others in connection with the inspection, testing and approval.  If Contractor fails to so notify Owner, Contractor shall assume full responsibility for and costs of the uncovering of the Work or the work of others to allow the required inspection, testing and approval and the restoration of the Work and the work of others so affected.

	
			
	 
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(c)    Correction and Removal of Defective Work.   Contractor shall, at its own expense, provide all materials and labor to correct any defects in the Work, materials or equipment supplied by Contractor (together with any damage to all finishes, fixtures, equipment and personal property damaged as a result of such defects) in a manner reasonably satisfactory to Owner.  Contractor shall begin all corrective work necessary to cure any defect in the Work, materials or equipment supplied by Contractor within three (3) calendar days after receiving written notice from Owner; provided, however, that any defect related to plumbing, heating, electrical, and roofing shall be completed immediately after the notice to repair if Contractor is performing such type of work or supplying appurtenant equipment (e.g., HVAC).  Contractor shall diligently prosecute all corrective work to completion.  Contractor shall report to Owner in writing all action Contractor took to remedy the defective Work, materials or equipment and shall obtain the Owner's signature acknowledging its satisfaction of the corrective work.  If any defect is not satisfactorily remedied in the above specified time, or if Owner elects (in its sole discretion) to remedy the defect, Owner may, at its election remedy such defect.  If Owner remedies a defect for Contractor, Contractor shall pay to Owner the costs of all corrective work plus interest at the Default Rate from the date the corrective work is completed until the correction costs are paid by Contractor.
8.    Indemnification, Release and Limitation of Liability.
(a)    Indemnification.  Contractor shall indemnify, defend (at Contractor's sole cost and with legal counsel acceptable to Owner) and hold the Owner, Construction Manager and their partners, shareholders, directors, officers, agents and employees (collectively, the "Indemnified Parties"), harmless from all losses of profit, obligations, liabilities, claims, demands, damages, debts, expenses, and causes of action including, without limitation, (i) attorney fees, (ii) liabilities or damages incurred by Owner as a result of damage to property owned by Owner or others, (iii) bodily injury, (iv) death, and (v) any claims against or expenses incurred by Owner as a result of Owner's failure to timely and fully perform its obligations under any contract with a purchaser of real property from Owner, or incurred by Owner as a result of the failure of Owner to timely and fully perform its obligations under any contract with a contractor or supplier which arises from or relates to (1) defects in or inferiority of the materials, design or workmanship of the Work, (2) acts and omissions of Contractor or of any person or entity acting on Contractor's behalf, in connection with the Work, (3) Contractor's failure to fulfill its obligations under this Agreement in strict accordance with its terms, including Contractor's failure to perform any portion of the Work, (4) Contractor's breach of any representation or warranty given in this Agreement or elsewhere or provided for by law, (5) the behavior and activities of Contractor, its employees, agents, subcontractors, materialmen, suppliers, and any other persons or entities associated with the performance of the Work, (6) violation or alleged violation of any Laws by Contractor or by any of Contractor's directors, officers, employees, agents, subcontractors or suppliers, (7) any unpatented or patented inventions, article or appliance manufactured or used by or on behalf of Contractor in connection with the performance of the Work, (8) any use or misuse of the Job Site or any portion thereof or improvement thereon by Contractor or any of its agents, employees, subcontractors or suppliers, or (9) any and all claims of lien and liens arising out of or in any manner directly or indirectly related to the Work, (provided that at the time such claim of lien or liens is brought or filed, Contractor has been paid all sums due to Contractor for the work performed to the date of such claim of lien or liens).  To the extent permitted by law, this indemnification shall apply regardless of any active or passive negligent act or omission of the Indemnified Parties, but shall not include any injury or harm that is caused exclusively by the gross negligence or willful misconduct of the Indemnified Parties or any of them.  This indemnification shall be effective during and after completion of the Work.
(b)    Release.  Contractor waives and releases Owner from all claims, demands, expenses, debts, damages, and liabilities, including, lost wages, pain and suffering, permanent or temporary disability, medical and hospital expenses, attorney fees, and costs of repair and replacement of Contractor's property, which arises from or relates to (a) the physical condition, security or maintenance of the Job Site and the vicinity thereof; (b) vandalism, theft, or any other willful or negligent act by any person or entity at the Job Site or in the vicinity thereof, including, the operation of a motor vehicle; or (c) the activities, omissions or behavior, whether or not negligent, of suppliers and other contractors and subcontractors, whose services have been or are being utilized by or on behalf of Owner, as well as the activities, omissions or behavior of their agents and employees, whether or not actively or passively negligent.  Nothing in this subparagraph (d) shall release any of the Indemnified Parties from liability for their exclusive willful or grossly negligent acts.
9.    Trade Unions and Employees.
(a)    Labor Relations/Contractor.  Contractor agrees to comply with all of the terms and conditions of labor agreements governing the work insofar as Contractor may lawfully do so, and in particular agrees to comply with the terms and provisions of said agreements setting forth the jurisdiction and the scope of work claimed by each of such crafts and the procedure contained therein for resolution of jurisdictional disputes.  In the absence of any such procedure, or if such procedure fails to promptly resolve the jurisdictional dispute, Contractor agrees, at his own cost and expense, upon request of Owner to take any and all lawful steps to secure a binding and final determination of said jurisdictional dispute by the National Labor Relations Board.  Nothing in this Agreement shall relieve Contractor of its obligation to provide adequate staff to perform the Work in the manner prescribed by this Agreement.  Immediately upon receipt of Owner's oral or written request, Contractor shall furnish Owner with a copy of (i) each collective bargaining agreement or other labor agreement governing compensation of Contractor's employees and any other person associated with the Work, (ii) Contractor's payroll records demonstrating that Contractor is not delinquent concerning payment of its employees, and (iii) Contractor's records demonstrating that Contractor is not delinquent payments to health and welfare, pension, vacation, apprenticeship, or other union fringe benefit trust funds.
(b)    Labor Relations/Contractor's Agents.  Within five (5) business days of receipt of a written request from Owner, Contractor shall obtain and furnish Owner with (i) statements from each union fringe benefit trust fund established as a result of every collective bargaining agreement or other labor agreement applicable to the Work, including the collective bargaining agreement or other labor agreement governing the employees of Contractor's subcontractors, (ii) a copy of each collective bargaining agreement or other labor agreement governing compensation of the employees of Contractor's subcontractors, (iii) each such subcontractor's payroll records demonstrating that such subcontractor is not delinquent concerning payments of its employees, and (iv) each such subcontractor's records demonstrating that such subcontractor is not delinquent with respect to payments to health, welfare, pension, vacation, apprenticeship, or other union fringe benefit trust funds, in all cases, to the extent required or permitted by law.

	
			
	 
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(c)    Labor Relations/Breach.  If Contractor or any of its subcontractors are or become, during the term of this Agreement, delinquent in the payment to the appropriate health, welfare pension, vacation or apprenticeship fund or funds (and regardless of whether the employees involved are employed on the Job Site or elsewhere), Owner may (i) deduct the full amount of such delinquencies from payments to be made to Contractor hereunder and without recourse by Contractor, (ii) pay such amount so deducted without inquiry as to the correctness of the amount or the validity of such claimed delinquencies, (1) directly to the appropriate fund or funds, or (2) by joint check payable to Contractor and the appropriate fund or funds.

10.    Liens and Stop Notices.  Contractor shall pay when due, all claims asserted and debts in favor of persons or entities who furnish labor, material, services, fixtures, or equipment applied to or utilized in the performance of the Work.  Contractor shall not cause or permit (a) the recordation of any claim of lien on Owner's property, (b) the imposition of any stop notice on funds held by a lender (a "Project Lender") that are intended to be paid to Owner pursuant to an agreement to finance completion in whole or in part of the project at the Job Site, and (c) the garnishment or attachment of funds held by Owner, by promptly satisfying all claims and debts asserted against Contractor or Contractor's subcontractors by such persons or entities.  In addition, Contractor shall use all possible means to cause (a) Owner's property to be released from all claims of lien, (b) all funds withheld from Owner on account of stop notices to be released from the effect of such notices, and (c) all suits to be dismissed against Owner within fourteen (14) days after each such claim of lien has been recorded against Owner's property, each such stop notice has been served upon a Project Lender and each such suit is brought against Owner, Contractor shall not apply any payments made by Owner to satisfy claims of suppliers, materialmen, subcontractors, utilities, or insurance companies unless such claims have arisen as a result of the work described in the Invoice being paid by Owner.  Contractor agrees within fourteen (14) days after written demand to cause the effect of any suit or lien to be removed from the premises, and in the event Contractor shall fail to do so, Owner is authorized to use whatever means in its discretion it may deem appropriate to cause said lien or suit to be removed or dismissed and the cost thereof, together with reasonable attorney’s fees, shall be immediately due and payable to Owner by Contractor.
11.    Bonding.
(a)    Faithful Performance Bond.  Owner may at any time require Contractor to furnish a faithful performance bond issued in a form and by a surety company acceptable to Owner securing the Contractor's faithful performance of its obligations under this Agreement, in an amount not less than the value of the Work remaining to be performed.  Upon Owner's request, Contractor shall indemnify the surety or post adequate collateral, or both, to secure any indemnity to any surety.  Owner shall pay the bond premium amount up to a maximum of one percent (1%) of the Contract Price.
(b)    Labor and Material Payment Bond.  Owner may at any time require Contractor to furnish a labor and material payment bond issued in a form and by a surety company acceptable to Owner, securing Contractor's payment of all monies owed to its employees, subcontractors, suppliers and any other persons or entities who may claim a mechanics' lien or materialmen's lien upon the Job Site.  Upon Owner's request, Contractor shall indemnify the surety or post adequate collateral, or both, to secure any indemnity to any surety.  The labor and material payment bond shall be an amount the lesser of one hundred and fifty percent (150%) of the Contract Price, or the maximum allowed by Law.
12.    Default and Remedies.
(a)    Failure to Perform.  Contractor's failure to comply with any of the provisions of this Agreement or in the event that Contractor at any time refuses, neglects or fails to supply a sufficient number of properly skilled workmen or a sufficient quantity of materials of proper quality, (i) make prompt payment to his materialmen and or laborers or fails in any respect to properly and diligently prosecute the work covered by this Agreement, or becomes delinquent with respect to his materialmen and or payment required to be made to any Health and Welfare, Pension, Vacation, Apprenticeship or other employee benefit program or trust, (ii) fulfill any of the provisions these General Conditions by him to be performed, or otherwise fails to perform fully any and all of the agreements herein contained, or the occurrence of any of the events set forth in Sections 12(b)(i)-(iv) below, shall constitute a default by Contractor, and Owner may, at its sole election and without notice to Contractor, take any one or more of the following remedial actions, none of which (other than subparagraph (iv) of this Paragraph 12) shall be deemed exclusive of any other:
(i)    Any remedy provided elsewhere in this Agreement.
(ii)    If Contractor fails to remedy any default within forty-eight (48) hours after receipt of written notice at the address appearing on the signature page of this Agreement or such longer period as is reasonably necessary if such breach cannot be cured within such forty-eight (48) hour time period (provided Contractor commences to cure immediately and thereafter diligently prosecutes such cure to completion), Owner may elect to terminate the Contractor's right to perform the Work in whole or in part without liability to Contractor for any Work thereafter performed by Owner or anyone else.  In such event, Owner may: (1) complete the Work or correct any failures in the Work and procure such equipment, labor and materials as is necessary therefor, and in so doing use any of Contractor's equipment and consume any materials on the Job Site until it is completed, and Contractor shall pay Owner the cost of such completion or correction, plus fifteen percent (15%) of such costs to compensate Owner for overhead and administration; (2) sue for and recover from Contractor the reasonable value of all or a portion of the cost to complete the performance of the Work; (3) sue for and recover from Contractor all damages arising out of such default, including but not limited to, loss of profits and recovery of any and all costs and expenses whatsoever directly or indirectly related to such default, or (4) pursue all alternatives under (1), (2) and (3).  If Owner completes the Work, Contractor shall receive no further payment until the Work is completed.  When the Work is completed, Owner shall pay Contractor the amount owing on the Contract Price less all of the costs Owner incurred in completing the Work, the fifteen percent (15%) markup described above and any attorney fees incurred by Owner as a result of such breach.
(iii)    Owner may withhold payment of any monies due until the default has been cured.

	
			
	 
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(iv)    Contractor acknowledges that if Contractor breaches this Agreement by delay in commencing or completing the Work (for any reason other than a Permitted Delay), the damages Owner would suffer ("Delay Damages") would include, among other items, losses, payments, liabilities and damages resulting from additional direct costs (including such items as Job Site payroll, cost of supervision, cost of site office facilities, Job Site telephone and rental value of any equipment not being utilized in connection with the other Work being performed at the Job Site), additional overhead expenses of the main office (including such items as salaries of executives and all other personnel, rent, and utilities), increased labor and material costs, and damages Owner may be required to pay to  other contractors and third parties.  Contractor also acknowledges that such Delay Damages would be difficult and impracticable to ascertain.  Therefore, for any day Contractor fails to commence or complete the Work required Contractor shall pay Owner, upon demand, liquidated damages of $ ______ per day for each day of delay.  The parties agree that the liquidated damages amount is a fair and reasonable approximation of the Delay Damages and shall be Owner's sole and exclusive remedy on account of any such delay.  Such liquidated damages may be deducted from amounts otherwise due Contractor.  If the liquidated damages are not paid upon Owner's demand, and the amounts otherwise due Contractor by Owner are less than the amount of the liquidated damages, the difference shall bear interest from the date of demand at the Default Rate, until paid in full by Contractor. 
(v)    Owner may set off the costs to complete the Work against monies due to Contractor under any other contract between Owner (or any entity owned or controlled by the Owner) and Contractor (or any entity owned or controlled by Contractor), whether such contract is in effect before or after this Agreement.
(vi)    Owner may pay any sums to any such persons, firms, itself or other entities to whom Contractor is obligated and to charge such sums paid to the account of Contractor without recourse by Contractor and without inquiry as to the validity of such obligation and the correctness of the amount thereof.  If such sum is greater than the amount then due Contractor, the excess shall be a debt due from Contractor to Owner and shall bear interest at the Default Rate from the date due until paid.
(vii)    Any and all such other remedies as may be provided at law or in equity.
(b)    Termination for Insolvency.  Owner may terminate Contractor's right to do the Work by giving Contractor at least twenty-four (24) hours written notice at any time after the occurrence of any of the following events (i) the filing of a petition for relief under the Bankruptcy Code or the institution of any other insolvency proceedings by, against, or on behalf of Contractor, (ii) the appointment of a receiver for Contractor, (iii) the death, dissolution or liquidation of Contractor, (iv) the transfer to others of more than twenty-five (25%) of the assets or ownership interest of Contractor, and (v) any act of insolvency by Contractor.  If an order for relief is entered under the Bankruptcy Code for the benefit of Contractor, Owner may terminate Contractor's right to do the Work by giving twenty-four (24) hours’ notice to Contractor, its trustee and its surety, if any, unless Contractor, the surety or its trustee: (1) immediately cures or takes action to cure all defaults of Contractor, (2) provides Owner adequate assurance of performance under this Agreement, (3) makes Owner whole for all loss suffered by Owner as a result of Contractor's default, and (4) assumes all obligations of Contractor within statutory time limits.
(c)    Termination by Owner.  Owner may also terminate this Agreement at any time before Contractor begins the Work and notifies Owner in writing of such commencement if (1) Owner sells the property on which the Work is being performed or (2) the economic climate does not warrant proceeding with the project of which the Work is a part.  In such circumstance, Contractor shall be entitled to receive that portion of the Contract Price earned by Contractor for Work performed to the satisfaction of Owner less any payments made before the date this Agreement is terminated.  Contractor shall not be entitled to any additional compensation or damages as a result of termination of this Agreement pursuant to this Paragraph 12(c).
(d)    Assignment of Contracts upon Termination.  If Contractor's right to perform the Work is terminated, any agreement of Contractor relating to the Work with third parties shall, at the election of Owner, be assigned to Owner without the need for further documentation.

(e)    Dispute Resolution.   Any dispute arising out of or relating to this Agreement shall be submitted to mediation by a neutral mediator with the parties equally sharing all costs of the mediation.  Failure to mediate shall result in a forfeiture of any rights to attorneys' fees and costs as set forth below.  Any dispute arising out of or relating to this Agreement, after having been submitted to mediation, shall be settled by arbitration in accordance with the rules of the American Arbitration Association.  The parties shall equally share all initial costs of arbitration. The prevailing party shall be entitled to reimbursement of attorneys' fees and costs as set forth below.  All decisions of the arbitrator shall be final, binding and conclusive on all parties.  Judgment may be entered upon any such decision in accordance with applicable Law in any court having jurisdiction thereof.  The venue for mediation and/or arbitration for any dispute arising out of or relating to this Agreement shall be in the state where the Job Site is located.

		
	13.
	Contractor Representations.  Contractor represents and warrants the following to Owner:

(a)    Authority.  Contractor is duly organized, validly existing and in good standing under the laws of the state in which it is organized and is duly authorized to operate in the state where the Job Site is located.  Contractor has all necessary powers to carry on its business.  Contractor has the right, power, legal capacity and authority to enter into this Agreement.  This Agreement and each document or instrument to be executed by Contractor pursuant to this Agreement, are and shall be valid, legally binding obligations of and enforceable against Contractor in accordance with their terms.  Contractor has taken all necessary action to authorize the execution, delivery and performance of this Agreement.  No further, approval or authority of any nature or other action by any person or entity is required in connection with the execution and delivery of this Agreement by Contractor, and the performance of the Work by Contractor.

	
			
	 
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(b)    Litigation.  Except as disclosed to Owner in writing concurrently with the execution of this Agreement by Contractor, there is no suit, action, arbitration, or legal administrative or other proceeding, or non-insured workers' compensation claim or governmental investigation pending or to its best  knowledge threatened after doing diligent inquiry, against or affecting Contractor.  Contractor is not in default concerning any order, writ, injunction or decree of any federal, state, local or foreign court, department, agency or instrumentality.  No attachments, execution proceedings, assignments for the benefit of creditors and insolvency, bankruptcy, reorganization or other proceedings are pending or threatened against Contractor or to its knowledge, any general partners of Contractor nor are any of such proceedings contemplated.
(c)    Financial Capability.  Contractor is and will remain financially solvent and financially capable of discharging its obligations under this Agreement.
(d)    Skill.  Contractor and everyone acting on its behalf in connection with the Work is skilled in performing the Work and in the means, methods, techniques, sequences and procedures related to completing the Work in the most expeditious and economical manner consistent with the interest of Owner.  Contractor is familiar with all manufacturer's instructions and specifications concerning the Work and the application, connection, erection and use of all equipment, materials and supplies incorporated into or that are a part of the Work.  Contractor is also familiar with all Laws applicable to the Work, has carefully studied the Work requirements and the Plans and Specifications, has made a thorough investigation and inspection of the physical condition of the Job Site and will remain familiar with all the physical and economic risks associated with the performance of the Work and assumes all such risks.
(e)    Licenses.   Contractor has and shall maintain all licenses and permits necessary to perform the Work and all other obligations of Contractor under this Agreement.
(f)    Agreement.  Contractor has read and has familiarized itself with all of the provisions of this Agreement on its own and without relying on any information obtained from Owner.
(g)    Safety.  Contractor shall, at its own expense, comply with all specific safety requirements promulgated by any government authority, including, without limitation, the requirements of the Occupational Safety Health Act of 1970, the Construction Safety Act of 1969, the California Labor Code, all successions and amendments to the foregoing, and all standards and regulations relating to occupational health and safety which have been or shall be promulgated by the parties or agencies which administer the same.  Contractor shall have and exercise full responsibility for compliance hereunder by itself, its agents, employees, materialmen, and subcontractors with respect to its portion of the work on this Project: and shall directly receive, respond to, defend and be responsible for any citation, assessment, fine, or penalty by reason of Contractor’s failure or failure of Contractor’s agents, employees, materialmen, and subcontractors to so comply.  Contractor shall indemnify and hold harmless Owner from and against any liability, loss, damage, cost, claims, awards, judgments, fines, expenses, including litigation expense, reasonable attorney’s fees, claims or liability for harm to persons or property, expenses incurred pursuant to or attendant to any hearing or meeting and any other applicable cost which may be incurred by Owner resulting from Contractor’s failure to fulfill covenants set forth in this paragraph.
In the event Contractor fails to comply with any citation issued by the Secretary of Labor or of any other body responsible for the administration and/or enforcement of any statute, regulation or ordinance relating to occupational health and safety within the period specified in any such citation or order, Owner may, in his discretion, exercise the rights and remedies provided him under the terms of this Agreement, including, but not limited to, the rights and remedies provided.
14.    Miscellaneous.
(a)    Nondiscrimination.  Contractor shall comply with all nondiscrimination Laws to the extent applicable to Contractor's performance of this Agreement.
(b)    Joint Payment.  Owner may, at its election and without the Contractor's consent, make any payment due hereunder jointly to Contractor, any of its subcontractors, materialmen, suppliers, and any other persons or entities who may claim a mechanics' lien or materialmen's lien as a result of the Work.
(c)    Construction.  Whenever used in this Agreement, the singular shall include the plural and the plural the singular.  The word "including" shall mean "including without limitation."  The word “materialman” shall have the same meaning as the term “material supplier”.
(d)    No Waiver.  Owner's express or implied waiver of any provision of this Agreement shall not constitute a future or further waiver by Owner of the same or other provision of this Agreement.  Delay in the enforcement of any remedy, or in the exercise of any right, shall not be a waiver.
(e)    Entire Agreement.  This Agreement and all of the addenda, attachments, schedules and exhibits hereto, which are hereby incorporated into this Agreement by this reference, are the entire agreement between the parties, and supersede all previous communications, representations or agreements, either written or oral, between the parties hereto concerning the subject matter hereof.  Any changes to this Agreement (including any change to any of the attachments hereto) must be in writing to be effective and signed by each party's respective Designated Representatives.
(f)    Counterparts; Facsimile Signatures.  This Agreement may be executed in counterparts.  Each counterpart is an original, and all counterparts together shall constitute one instrument. This Agreement may be executed by facsimile signature by any party and such signature will be deemed binding for all purposes hereof without delivery of an original signature being thereafter required.  In addition, any party may effect the execution and delivery of this Agreement by signing the same and sending a copy thereof to the other party or its attorney by facsimile transmission. Such facsimile document, including the signatures thereon, shall be treated in all respects as an original instrument bearing an original signature. 
(g)    Severability.  If any portion of this Agreement is declared by court of competent jurisdiction to be invalid or unenforceable, such portion shall be deemed severed from this Agreement, and the remaining portions shall remain in full force.

	
			
	 
	10
	 

    

(h)    Assignment.   Owner may, assign all or part of this Agreement at any time.  Contractor may not assign or further subcontract any portion of the Work or its obligations hereunder or assign, transfer, convey or otherwise dispose of this Agreement or its right, title or interest in or to this Agreement or any part hereof without the prior written consent of Owner and any sureties under bonds or guaranties made in favor of Owner concerning the Work.  Owner's consent to an assignment shall not release Contractor from (1) any obligation otherwise imposed upon Contractor by this Agreement, (2) the consequences of a breach of this Agreement by Contractor's assignee or Contractor, or (3) the failure of Contractor's assignee or Contractor to satisfy all of the warranties made by Contractor in this Agreement.  If Contractor is a corporation, a change in ownership of twenty-five percent (25%) or more of its stock, whether in one or more transactions, shall constitute an assignment of the Work.  Contractor acknowledges the reasonableness of this provision due to the personal service nature of this Agreement.
(i)    Title to Improvements.  Title to all materials, fixtures, Plans and Specifications and Shop Drawings shall be deemed vested in Owner when and as the same shall have been installed, affixed permanently to the realty or otherwise delivered to Owner.  Owner shall not be liable for loss or damage to any material or fixtures as to which title is not then vested in Owner at the time of such loss or damage whether such material or fixtures are on the Job Site, in transit, under the control of Owner, or otherwise.
(j)    Time.  Time is of the essence of this Agreement.  It shall be Contractor’s obligation to conform to Owner’s progress schedule, subject to Owner’s modification, which is incorporated herein by this reference and made a part hereof.  Contractor shall prepare and obtain approval as required by the Plans and Specifications for all shop drawings, details, samples, and do all other things necessary and incidental to the prosecution of his work in conformance with the said progress schedule.  If in the opinion of the Owner the Contractor falls behind in the progress of the Work, the Owner may direct the Contractor to take such steps as the Owner deems necessary to improve the rate of progress, including, without limitation, requiring the Contractor to increase the number of shifts, personnel, overtime operations, days of work, equipment, amount of plant, or other remedies and to submit to Owner for approval an outline schedule demonstrating the manner in which the required rate of progress will be regained, without additional costs to the Owner.  Owner may require Contractor to prosecute, in preference to other parts of the Work, such part or parts if the work as Owner may specify. 

(k)    Attorney Fees.  If either party institutes any action to enforce or interpret any provision of this Agreement the prevailing party shall be entitled to recover from the other party all costs, including costs of litigation and reasonable attorney fees and expert or consultant fees. 
(l)    Independent Contractor.  Contractor is an independent contractor and shall, at its sole expense, and without increase in the Contract Price, comply with all Laws and pay all manufacturers' sales, use and processing taxes and all federal, state and local taxes.
(m)    Survival of Obligations.  Any indemnity, guaranty, representation or warranty given by Contractor to Owner in this Agreement shall survive the expiration or termination of this Agreement.
(n)    No Third Party Beneficiaries.  This Agreement is between Owner and Contractor.  Except as expressly set forth herein, no other person or entity is intended to be, nor shall be, benefited by the terms hereof, whether as a third party beneficiary or otherwise.
(o)    Default Rate.  As used herein, the term "Default Rate" means the maximum legal rate which may be charged at the time.

	
		
	_______________________________________________
OWNER
	____________________________________________________
CONTRACTOR

	
			
	 
	11
	 

    

EXHIBIT A
TO
AGREEMENT FOR CONTRACTOR SERVICES
SUBCONTRACTORS AND SUPPLIER’S CONDITIONAL WAIVER AND RELEASE 
UPON PROGRESS PAYMENT
FORM OF SUBCONTRACTOR'S AND SUPPLIER’S CERTIFIED STATEMENT
TO ACCOMPANY INVOICE
_________________________
 CONDITIONAL WAIVER AND RELEASE ON 
PROGRESS PAYMENT 
NOTICE: THIS DOCUMENT WAIVES THE CLAIMANT’S LIEN, STOP PAYMENT NOTICE, AND PAYMENT BOND RIGHTS EFFECTIVE ON RECEIPT OF PAYMENT. A PERSON SHOULD NOT RELY ON THIS DOCUMENT UNLESS SATISFIED THAT THE CLAIMANT HAS RECEIVED PAYMENT. 
Identifying Information: 
Name of Claimant:________________________________________________________________________
Name of Customer:_______________________________________________________________________
Job Location:____________________________________________________________________________
Owner:_________________________________________________________________________________
Through Date:____________________________________________________________________________
Conditional Waiver and Release 
This document waives and releases lien, stop payment notice, and payment bond rights the claimant has for labor and service provided, and equipment and material delivered, to the customer on this job through the Through Date of this document. Rights based upon labor or service provided, or equipment or material delivered, pursuant to a written change order that has been fully executed by the parties prior to the date that this document is signed by the claimant, are waived and released by this document, unless listed as an Exception below. This document is effective only on the claimant’s receipt of payment from the financial institution on which the following check is drawn: 
Maker of Check:______________________________________________________________________
Amount of Check$____________________________________________________________________
Check Payable to: ____________________________________________________________________
Exceptions 
This document does not affect any of the following: 
		
	(1) 
	Retentions. 

		
	(2) 
	Extras for which the claimant has not received payment. 

		
	(3) 
	The following progress payments for which the claimant has previously given a conditional waiver and release but has not received payment: 

	
			
	 
	12
	 

    

Date(s) of waiver and release: _______________________________________________________
Amount(s) of unpaid progress payment(s): $ _____________________________________________ 
		
	(4)
	Contract rights, including: 

(A)    a right based on rescission, abandonment, or breach of contract, and 
(B)    the right to recover compensation for work not compensated by the payment. 
SIGNATURE 
Claimant’s Signature: ___________________________________________
Claimant’s Title: _______________________________________________ 
Date of Signature: ______________________________________________ 
NOTE: This form is to be used by a party who applies for a progress payment when the progress check has not yet cleared the bank. This release only becomes effective when the check, properly endorsed, has cleared the bank.

	
			
	 
	13
	 

    

EXHIBIT B
TO
AGREEMENT FOR CONTRACTOR SERVICES
SUBCONTRACTORS AND SUPPLIER’S CONDITIONAL WAIVER AND RELEASE
UPON FINAL PAYMENT
FORM OF SUBCONTRACTORS AND SUPPLIER'S CERTIFIED STATEMENT
TO ACCOMPANY INVOICE
_____________________________ 
 CONDITIONAL WAIVER AND RELEASE ON 
FINAL PAYMENT 
NOTICE: THIS DOCUMENT WAIVES THE CLAIMANT’S LIEN, STOP PAYMENT NOTICE, AND PAYMENT BOND RIGHTS EFFECTIVE ON RECEIPT OF PAYMENT. A PERSON SHOULD NOT RELY ON THIS DOCUMENT UNLESS SATISFIED THAT THE CLAIMANT HAS RECEIVED PAYMENT. 
Identifying Information: 
Name of Claimant:________________________________________________________________________
Name of Customer:_______________________________________________________________________
Job Location:____________________________________________________________________________
Owner:_________________________________________________________________________________
Conditional Waiver and Release 
This document waives and releases lien, stop payment notice, and payment bond rights the claimant has for labor and service provided, and equipment and material delivered, to the customer on this job. Rights based upon labor or service provided, or equipment or material delivered, pursuant to a written change order that has been fully executed by the parties prior to the date that this document is signed by the claimant, are waived and released by this document, unless listed as an Exception below. This document is effective only on the claimant’s receipt of payment from the financial institution on which the following check is drawn: 
Maker of Check:______________________________________________________________________
Amount of Check$____________________________________________________________________
Check Payable to: ____________________________________________________________________
Exceptions 
This document does not affect any of the following: 
Disputed claims for extras in the amount of: $__________________________________________
SIGNATURE 
Claimant’s Signature: _______________________________________________ 
Claimant’s Title: _______________________________________________ 
Date of Signature: _______________________________________________ 
NOTE: This release is not effective until the check that constitutes final payment has been properly endorsed and has cleared the bank.

	
			
	 
	14
	 

    

EXHIBIT C
LIST OF SUPPLIERS AND SUBCONTRACTORS
The following is a list of all suppliers and subcontractors whose materials and services will be or have been utilized by Contractor in the performance of the Work or as described in the Invoice, together with a description of the materials and services provided by such suppliers and subcontractors in connection with the Work or during the Invoice Period, and the price charged by such suppliers and subcontractors for such materials and services.  If necessary, this list will be continued on an additional sheet.  If this list is being submitted with an Invoice, attach a copy of each invoice submitted by the following suppliers and subcontractors representing all of the materials and services that Contractor has provided during the Invoice Period.
Material or Services
Name and Address                    Provided and Price Charged
1.                                                    
                                                    
                                                    

2.                                                    
                                                    
                                                    

3.                                                    
                                                    
                                                    

4.                                                    
                                                    
                                                    

5.                                                    
                                                    
                                                    

6.                                                    
                                                    
                                                    
	
		
	Invoice Period:
_____________________________________________, 20     to
_____________________________________________, 20__

	__________________________________________________, a
____________________________________________________
By:__________________________________________________
Its:__________________________________________________
"Subcontractor"

	
			
	 
	15
	 

    

EXHIBIT D
TO
AGREEMENT FOR CONTRACTOR SERVICES

CHANGE ORDER REQUEST
 
FROM:_____________________________        TO:_____________________________
_____________________________
_____________________________
_____________________________

Change Order No.: _____________________________
Previous Change Order Nos.: _____________________________
The following changes are to be made in the Contract between Owner and Contractor:
One original Contract Price was      $    
Net change by previous Change Order    $    
The Contract Price before this Change Order was    $    
The Contract Price will be (increased) (decreased)
(unchanged) by this Change Order    $    
The new Contract Price including this Change
Order will be ........................................................................................................................................    $    
The time for completion will be (increased) (decreased) (unchanged) by              days.
The Completion Date for the Work is (not extended) (extended to                 ).

	
		
	Owner:

By:  ________________________________________________

Owner’s Authorized Representative

Dated:____________________________
	Contractor:

By:  ______________________________________________

Its:  _______________________________________________

Dated:  ___________________________

	 
	 

	
			
	 
	16
	 

    

EXHIBIT E
TO
AGREEMENT FOR CONTRACTOR SERVICES

ADDITIONAL REQUIRED INSURANCE

None.

	
			
	 
	17
	 

    

APPENDIX 1
TO
AGREEMENT FOR CONTRACTOR SERVICES
SUPPLEMENTARY CONDITIONS

	
			
	Owner's Initials _________

	 
	Contractor Initials _________

    

APPENDIX 2
TO
AGREEMENT FOR CONTRACTOR SERVICES
STATE REQUIRED NOTICES AND/OR
DISCLOSURES

	
			
	Owner's Initials _________

	 
	Contractor Initials _________

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