Name: _________

Location: ____________ [City, County, State]

No. of dwelling units: _________

(a). "HUD" means the United States Department of Housing and Urban Development.

(b). "Secretary" means the secretary of the United States Department of Housing and Urban Development.

(c). "Mortgage" means that certain indenture of mortgage by and between the owner, as mortgagor, and the mortgagee, with respect to the project, which mortgage is insured by the United States Department of Housing and Urban Development.

(d). "Mortgagee" means any holder of the mortgage.

(e). "Principal parties" means the owner and the agent.

(f). "Consenting parties" means the secretary and the mortgagee.

(a). Preparation and submission to the owner of a recommended operating budget for the initial operating year of the project.

(b). Preparation and submission to the owner (for the owner's signature and submission to HUD) of the monthly statement of income and expenses (forms HUD-93479, HUD-93480, HUD-93481) throughout the period from initial occupancy through the achievement of sustaining (95%) occupancy.

(c). Continuing review of the management plan, for the purpose of keeping the owner advised of necessary or desirable changes.

(a). The agent will follow the tenant selection policy described in the management plan, giving preference to low and moderate income families who have certificates of eligibility as displaced persons.

(b). The agent will show the premises to prospective tenants.

(c). The agent will take and process applications for rentals. If an application is rejected, the applicant will be told the reason for rejection, and the rejected application, with reason for rejection noted thereon, will be kept on file for one year. A current list of prospective tenants will be maintained.

(d). The agent will prepare all dwelling leases and parking permits, and will execute the same in its name, identified thereon as agent for the owner. The terms of all leases will comply with the pertinent provisions of the regulatory agreement, and the directives of the secretary. Dwelling leases will be in a form approved by the owner and the secretary, but individual dwelling leases and parking permits need not be submitted for the approval of the owner or the secretary.

(e). The owner will furnish the agent with rent schedules, as from time to time approved by the secretary, showing fair market rents and basic rents for dwelling units, and other charges for facilities and services. In no event will such fair market rents and other charges be exceeded. Eligibility for dwelling rents which are less than such fair market rents, and the amount of such lesser rents, will be determined in accordance with the regulatory agreement, and the directives of the secretary.

(f). The agent will counsel all prospective tenants regarding eligibility for dwelling rents which are less than fair market rents, and will prepare and verify eligibility certifications and recertifications in accordance with the regulatory agreement, the rent supplement contract, and the directives of the secretary.

(g). The agent will negotiate commercial leases and concession agreements, and will execute the same in its name, identified thereon as agent for the owner, subject to the owner's prior approval of all terms and conditions. Commercial rents will not be less than the minimums from time to time approved by the secretary.

(h). The agent will collect, deposit, and disburse security deposits, if required, in accordance with the terms of each tenant's lease. The amount of each security deposit will be as specified in the management plan. Security deposits will be deposited by the agent in an interest-bearing account, separate from all other accounts and funds, with a bank or other financial institution whose deposits are insured by an agency of the United States government. This account will be carried in the agent's name and designated of record as "_________ security deposit account."

(a). Special attention will be given to preventive maintenance, and to the greatest extent feasible, the services of regular maintenance employees will be used.

(b). Subject to the owner's prior approval, the agent will contract with qualified independent contractors for extraordinary repairs beyond the capability of regular maintenance employees.

(c). The agent will systematically and promptly receive and investigate all service requests from tenants, take such action thereon as may be justified, and will keep records of the same. Emergency requests will be received and serviced on a 24 hour basis. Complaints of a serious nature will be reported to the owner after investigation.

(d). The agent is authorized to purchase all materials, equipment, tools, appliances, supplies and services necessary to proper maintenance and repair.

(e). Notwithstanding any of the foregoing provisions, the prior approval of the owner will be required for any expenditure which exceeds $300 in any one instance for labor, materials, or otherwise in connection with the maintenance and repair of the project, except for recurring expenses within the limits of the operating budget or emergency repairs involving manifest danger to persons or property, or required to avoid suspension of any necessary service to the project. In the latter event, the agent will inform the owner of the facts as promptly as possible.

(a). As more particularly described in the management plan, the resident manager will have duties of the type usually associated with his position and will be responsible for the conduct of the social services program for the project.

(b). The compensation (including fringe benefits) of the resident manager, and the maintenance employees will be as prescribed in the management plan. Compensation of bookkeeping, clerical, and other managerial personnel will be within the agent's sole discretion, provided that minimum wage standards will be met.

(c). The owner will reimburse the agent for compensation (including fringe benefits) payable to the maintenance employees, as prescribed in the management plan, and for all local, state, and federal taxes and assessments (including but not limited to social security taxes, unemployment insurance, and workman's compensation insurance) incident to the employment of such personnel. Such reimbursements will be paid out of the rental agency account and will be treated as project expenses.

(d). Compensation (including fringe benefits) payable to the resident manager, and all bookkeeping, clerical, and other managerial personnel, plus all local, state, and federal taxes and assessments incident to the employment of such personnel will be borne solely by the agent, and will not be paid out of the owner's funds or treated as project expenses. For this purpose, the rental value of any dwelling unit furnished rent-free to the resident manager will not be considered a part of his compensation, but will instead be treated as a cost to be borne by the owner.

(e). The agent will establish and follow an employment policy which affords residents of the project maximum opportunities for employment in the management and operation of the project and, to the extent consistent with that consideration, affords employment opportunities to lower-income persons in the area. While personnel will be employed primarily on the basis of ability, the agent will make a conscientious effort to provide special assistance and training for project residents and members of minority groups who are not initially qualified.

(a). From the funds collected and deposited by the agent in the rental agency account pursuant to section 10 above, the agent will make the following disbursements promptly when payable:

(b). Except for the disbursements mentioned in subsection 15(a), section 12(e) above, funds will be disbursed or transferred from the rental agency account only as the owner may from time to time direct in writing.

(c). In the event that the balance in the rental agency account is at any time insufficient to pay disbursements due and payable under subsection 16(a) above, the agent will inform the owner of that fact and the owner will then remit to the agent sufficient funds to cover the deficiency. In no event will the agent be required to use its own funds to pay such disbursements.

(a). The agent will establish and maintain a comprehensive system of records, books, and accounts in a manner conforming to the directives of the secretary, and otherwise satisfactory to the owner and the consenting parties. All records, books, and accounts will be subject to examination at reasonable hours by any authorized representative of the owner or either of the consenting parties.

(b). With respect to each fiscal year ending during the term of this agreement, the agent will cause an annual financial report to be prepared by a certified public accountant or other person acceptable to the owner and the secretary, based upon the preparer's examination of the books and records of the owner and the agent. The report will be prepared in accordance with the directives of the secretary, will be certified by the preparer and the agent, and will be submitted to the owner within 60 days after the end of the fiscal year, for the owner's further certification and submission to the secretary and the mortgagee. Compensation for the preparer's services will be paid out of the rental agency account as an expense of the project.

(c). The agent will prepare a quarterly report comparing actual and budgeted figures for receipts and disbursements, and will submit each such report to the owner within 15 days after the end of the quarter covered.

(d). The agent will furnish such information (including occupancy reports) as may be requested by the owner or the secretary from time to time with respect to the financial, physical, or operational condition of the project.

(e). The agent will prepare, on a monthly basis, form HUD-91709, schedule of computation of rental income in excess of BMIR rents and standard form 1034 and 1034a, Department of Housing and Urban Development, within 10 days after the end of the month. Such excess payments will be deposited to the residual receipts accounts.

(f). By the fifteenth day of each month, the agent will furnish the owner with an itemized list of all delinquent accounts, including rental accounts, as of the tenth day of the same month.

(g). By the tenth day of each month, the agent will furnish the owner with a statement of receipts and disbursements during the previous month, and with a schedule of accounts receivable and payable, and reconciled bank statements for the rental agency account and deposit account as of the end of the previous month.

(h). If, after the project reaches sustaining (95%) occupancy, the rental collections plus HUD subsidy fall below operating expenses for a sustained period of 60 days, the agent will immediately send written notification of the same to the appropriate HUD area/insuring office.

(i). Except as otherwise provided in this agreement, all bookkeeping, clerical, and other management overhead expenses (including but not limited to costs of office supplies and equipment, data processing services, postage, transportation for managerial personnel, and telephone services) will be borne by the agent out of his own funds and will not be treated as project expenses.

(a). A sum equal to _________ percent of effective gross income received during preceding month plus

(b). Any additional supplemental management funds applied for and approved by the secretary.

(a). This agreement will not be binding upon the principal parties until endorsed by the consenting parties.

(b). This agreement may be terminated by either of the principal parties as of the end of any calendar month, provided that at least 30 days' advance notice thereof is given to each of the consenting parties.

(c). In the event that a petition in bankruptcy is filed by or against either of the principal parties, or in the event that either makes an assignment for the benefit of creditors or takes advantage of any insolvency act, the other party may terminate this agreement without notice to the other, provided that prompt written notice of such termination is given to each of consenting parties.

(d). It is expressly understood and agreed by and between the principal parties that the secretary or the mortgagee shall have the right to terminate this agreement at the end of any calendar month, with or without cause, on 30 days' advance written notice to each of the principal parties, except that in the event of a default by the owner under its articles of incorporation under the obligation of the mortgage, the secretary or the mortgagee may terminate this agreement immediately upon the issuance of a notice of cancellation to each of the principal parties. It is further understood and agreed that no liability will attach to either of the principal parties in the event of such termination.

(e). Upon termination, the agent will submit to the owner any financial statements required by the secretary, and after the principal parties have accounted to each other with respect to all matters outstanding as of the date of termination, the owner will furnish the agent security, in form and principal amount satisfactory to the agent, against any obligations or liabilities which the agent may properly have incurred on behalf of the owner hereunder.

(a). At all times, this agreement will be subject and subordinate to all rights of the secretary, and will inure to the benefit of and constitute a binding obligation upon the principal parties and their respective successors and assigns. To the extent that this agreement confers rights upon the consenting parties, it will be deemed to inure to their benefit, but without liability to either, in the same manner and with the same effect as though the consenting parties were primary parties to the agreement.

(b). This agreement constitutes the entire agreement between the owner and the agent with respect to the management and operation of the project, and no change will be valid, unless made by supplemental written agreement, executed and approved by the consenting parties as well as the principal parties.

(c). This agreement has been executed in several counterparts, each of which shall constitute a complete original agreement, which may be introduced in evidence or used for any other purpose without production of any of the other counterparts.