12-Exhibit B Property Management Agreement.pdf

MANAGEMENT AGREEMENT

THIS MANAGEMENT AGREEMENT (this “Agreement”) made and entered into as of

April 23, 2026 (the “Effective Date”), by and between HAYS CONSOLIDATED

INDEPENDENT SCHOOL DISTRICT (the “District”), a political subdivision in the state of

Texas. ____________________ (the “Property Owner”), and ____________________ (the

“Manager”) (the District, Property Owner and Manager are collectively referred to as the

“Parties”).

WITNESSETH:

WHEREAS, PPDC HAYS, LLC is the fee owner of the Project (as defined below) and entered into a 55 (Fifty-Five) year triple net lease with the District leasing the entire Project to the

District (the “Master Lease”);

WHEREAS, ___________________, an affiliate PPDC HAYS, LLC and acting hereunder on its behalf, shall be referred to as “Property Owner” for purposes of this Agreement;

WHEREAS, the Manager is engaged in the business of managing real property;

WHEREAS, the Parties acknowledge that the Project is intended to be financed with the proceeds of tax-exempt bonds, and the use, leasing, and operation of the Project shall at all times comply with the requirements of Section 145 of the Internal Revenue Code of 1986, as amended, and applicable Treasury Regulations; and

WHEREAS, The Parties wish to set forth their agreement with respect to the management of the Project by Manager.

NOW, THEREFORE, in consideration of the terms, conditions, and covenants hereinafter set forth and other valuable consideration, Property Owner, Manager and the District hereto mutually agree as follows:

SECTION 1. Appointment and Representations

1.1 Appointment and Acceptance. During the Term of this Agreement, the District hereby appoints Manager, and Manager hereby accepts such appointment, on the terms and conditions hereinafter provided, as exclusive manager of the real estate located in Hays County, Texas that is subject of the Master Lease, together with all improvements thereon (collectively, the “Project”). The Project is comprised of a single-family housing community containing 362 units plus the parking areas, management offices and other amenities associated therewith.

1.2 Representations.

1.2.1 the District Representations. The District hereby represents and warrants that it has entered into a 55 (Fifty-Five) year triple net lease with PPDC HAYS, LLC for the Project and is fully empowered and authorized to hire the Manager and contract with the Manager and Property Owner as herein provided.

4907-1876-5882v.6

1.2.2 Property Owner’s Representations. Property Owner hereby represents and warrants that it, or an affiliate, is the owner of fee simple title to the Project, and it is fully empowered and authorized to enter into this Agreement.

1.2.3 Manager’s Representations. Manager represents that it is fully empowered and authorized to enter into this Agreement. Manager will secure and keep in effect during the Term hereof the licenses, permits, and authorizations necessary to enable Manager to perform its duties under this Agreement. Property Owner and the District agree to cooperate to the fullest extent with Manager in applying for, obtaining, and maintaining such licenses and permits.

1.3 Term. This Agreement shall have an initial term (the "Initial Term") of exactly two

(2) years, commencing on the Commencement Date. If this Agreement is not terminated by one or more of the events described below, and if approved by the District's Board of Trustees (the

“Board”), then this Agreement shall be automatically renewed on the anniversary of the

Commencement Date for an additional one (1) year period (the “Subsequent Term”). This

Agreement shall continue to renew for additional one (1) year periods on the anniversary of each

Subsequent Term without lapse, until this Agreement is terminated by one or more provision as set forth below in Section 5 (such applicable period, whether the Initial Term or Subsequent

Term(s), collectively referred to as the “Term”). Notwithstanding the foregoing, Manager shall provide Property Owner and the District with thirty (30) days written notice prior to the renewal of each Subsequent Term.

1.4 Services Rendered. During the Term of this Agreement, Manager shall render to the District the following services as set forth below (collectively, the “Services”) beginning upon the delivery of written notice from the District, which shall not be earlier than three months prior to the delivery of the first Unit under the Master Lease (the “Commencement Date”):

SECTION 2. Services Rendered by Manager

2.1 Leasing. During the Term, Manager shall perform leasing, management, and occupancy activities, as more particularly set forth herein using Manager’s preferred version of its property management software. Manager understands that the Project is to benefit the District employees and other tenants of the Project. Manager shall (i) advertise the Project, display signs thereon and conduct an active canvassing campaign to solicit residents (the District to lease units in the Project via a lease or rental agreement with the District (each such lease or rental agreement, a “Lease”, or plural, “Leases”), (ii) cause references and credit history of prospective residents to be investigated, (iii) execute and deliver following appropriate Board action, in the name of and on behalf of the District, Leases on apartment units or beds in the Project, (iv) renew and/or cancel existing Leases, and (v) collect and maintain security deposits deposited by residents under the

Leases and, with respect to such security deposits, comply with applicable state and local laws concerning the District's responsibility for maintaining and/or refunding security deposits and interest thereon. Manager shall provide the forms used for Leases to the District, which must be as approved by the District. All leasing decisions shall be subject to policies and rental parameters approved in advance by the District, and the District retains the ultimate right to approve or disapprove lease forms, rental rates, and leasing policies.

2.2 Advertising and Promotional Matters. Manager may publish advertisements, post renting signs, prepare and circulate brochures, and engage in such other forms of advertising and incentive programs and promotional activities deemed advisable by Manager subject to the cost restrictions in the Operating Budget (as defined in Section 3.1). The District agrees to reimburse

Manager for all such advertising and promotional expenses that are made in accordance to Section

3.1 or otherwise approved by the District. The District will assist Manager with coordination of school events, marketing campaigns, or other marketing methods to help target the District employees and other residents in accordance with the District's policies and rental parameters for the Project. The Project will be branded and marketed as an Upward Community.

2.3 Enforcement of Leases. Manager shall, and is hereby authorized (i) to request, demand, collect, receive and receipt for all monthly rents, parking charges, late payment charges, non-negotiable check charges and any other taxes or charges due from any resident of the Project permitted or required to be collected by the District or Manager under any Leases, as such amounts become due; (ii) to initiate legal and other procedure(s) to collect overdue rental payments or take such action as may be necessary or desirable to evict any resident delinquent in payment of such rents and to collect any rents owed by such resident; (iii) to take all actions necessary or desirable to enforce, to the extent practicable, any resident's full compliance with the terms and conditions of its Lease; and (iv) to settle, compromise and release any action or suit, and/or reinstate tenancies when expedient, as determined in the sole and reasonable discretion of Manager. Each legal action initiated by Manager pursuant to this Section 2.3 shall be in the name, and on behalf, of the District, unless such action is for damages caused directly to Manager in its individual rather than its representative capacity. Manager must seek and obtain written approval by the designated representative of the District before initiating any legal proceeding on behalf of the District. All costs associated with any legal action, including court costs and legal fees (including attorney’s fees), shall be borne solely by the District, and Manager, with consultation with District’s legal counsel, may select the attorney of its choice to handle any such litigation, which selection is subject to District approval, such approval not to be unreasonably withheld or delayed.

2.4 Service Requests. Manager shall receive, consider and promptly act upon and record in systematic fashion maintenance and service requests of the Project residents. Manager shall promptly report to the District complaints of a serious nature after thorough investigation, Manager shall make its recommendations in writing to the District concerning such complaints.

2.5 Utility Billing. The District may choose, with Manager’s consultation, a utility billing service (i.e. Conservice, SimpleBills, Entrata, etc.) to handle utility billing of Project residents.

2.6 Maintenance of Project. Manager shall, in accordance with the Operating Budget

(as defined in Section 3.1), maintain or cause to be maintained, and is hereby authorized to so maintain or cause to be maintained, the buildings, equipment, personalty, landscaping and other improvements of the Project in accordance with the standards of apartment projects of a similar character in the market area, including interior and exterior cleaning, painting and decorating, plumbing, carpentry and such normal maintenance and repair work as may be necessary or advisable and as determined by Manager and approved by the District in order to so maintain such buildings, equipment, personalty, landscaping and other improvements of the Project or to comply) with any laws, ordinances, orders or other requirements of any federal, state, District or municipal authority having jurisdiction over and affecting the Project; provided, however, that Manager shall not be required to perform any obligations required to be performed by a resident under such resident's Lease; and, provided, further, that, except for Priority Expenditures or otherwise agreed by Manager and the District in writing, Manager shall not have any obligations or responsibilities with regard to the structural condition or structural maintenance of the Project. Manager shall coordinate with vendors, contractors, and manufacturers regarding all applicable warranties, including warranty claims and administration.

2.7 Personnel. Manager shall hire such on-site managerial and/or maintenance personnel as may be necessary for the efficient discharge of the duties of Manager hereunder and the efficient operation of the Project in accordance with the Operating Budget (as defined in

Section 3.1), as Manager may determine appropriate. Such on-site personnel may include, without limitation, property supervisors, resident managers, assistant managers, leasing managers, maintenance engineers, porters, maids, handymen, gardeners and other personnel necessary to be employed in order to maintain and operate the Project pursuant to this Agreement. District shall not be obligated to pay any costs and expenses of the supervisory services to be rendered by

Manager's employees other than on-site and pre-approved off-site employees pursuant to this

Section 2.7. Compensation for the services of each such on-site personnel and pre-approved off-site employees, including base salary, incentive bonuses, payroll taxes, payments for accrued PTO, and any other associated costs of an individual's employment shall be considered an operating expense of the Project.

2.8 Contracts/Orders. Manager may enter into, and is hereby authorized to, as an agent of the District and at the District expense, enter into contracts for: (i) the furnishing of services, utilities, and concessions, such as water, electricity, gas, fuel, telephone, vermin extermination, heating and air conditioning maintenance and repairs, and other necessary or advisable services as determined by the Manager in conformity with the approved Operating Budget (as defined in

Section 3.1); and (ii) a licensing service pertaining to any music and/or other media played in the common areas at the Project. Manager shall purchase or lease, and is hereby authorized to purchase or lease, on behalf of the District (as an agent of the District) any equipment, tools, appliances, materials and supplies as are reasonably necessary or advisable to operate the Project or perform any maintenance, repairs, replacements, structural alterations or capital improvements pursuant to this Agreement. Manager shall use commercially reasonable efforts to make purchases, and where necessary or advisable obtain bids, for labor and materials at the lowest possible cost that are consistent with good quality workmanship and service standards.

2.9 Structural Defects. After the Commencement Date, the District or Project Owner shall promptly inform Manager in writing after the District or Project owner gains actual knowledge of the existence on the Project of any structural defect which causes a nuisance upon the Project or adjacent properties or poses a danger to life or health or safety of any persons on or about the Project. Manager shall promptly inform the District and Project Owner in writing after

Manager gains actual knowledge of the existence on the Project of any structural defect which causes a nuisance upon the Project or adjacent properties or poses a danger to life or health or safety of any persons on or about the Project. The District may agree to correct or otherwise repair, as reasonably necessary such structural defects after obtaining knowledge of the existence of any such defect. Failure of Project Owner or the District to promptly remedy such defect or condition will give Manager the option to terminate this Agreement.

2.10 Capital Improvements, Dispositions and Emergency Repairs. Manager shall obtain the consent of the District prior to incurring (i) any charge or obligation for capital improvements, as defined under generally accepted accounting principles, with respect to the Project, unless the item(s) is provided for in the Operating Budget (as defined in Section 3.1), or (ii) any item of expense which is more than $1,000 or fifteen percent (15%) (whichever is greater) in excess over the amount budgeted for such expense within a particular line item category of the Operating

Budget (as defined in Section 3.1); provided, however, that Manager may without the prior consent of the District make emergency repairs to the Project involving danger to life or property, or that are immediately necessary for the preservation and safety of the Project, for the safety of the residents, or required to avoid the suspension of any necessary service irrespective of the cost limitations imposed by this Section 2.9 (“Emergency Repair”). Manager agrees to promptly confer with the District regarding any such emergency expenditure and its effect on the Operating Budget.

Manager shall obtain the consent of the District prior to disposing of any personal or real property that is part of the Project.

2.11 Construction Supervision. This Agreement does not include construction management services for any tenant improvements or other construction work at the Project. The

District shall have the right to hire an independent construction manager for any such services. If the District or the Project Owner requests construction management services of Manager, Manager, the Project Owner (as applicable) and/or the District shall enter into a mutually agreeable separate written agreement for such services. Manager does not have the authority to accept or approve delivery of newly constructed units at the Project.

2.12 Condition of Project. The District acknowledges that Manager is not a property inspector or engineer and is not qualified to inspect or make representations as to the physical or environmental condition of the Project. As a Project expense, the District may direct Manager from time to time to obtain from a third party-inspector a property condition report relative to the

Project, and the District will rely upon such property condition report(s) (and not upon Manager) for all matters relative to the physical or environmental conditions of the Project. Project Owner shall indemnify, defend and hold harmless any Manager Indemnified Parties (as defined below) from and against any and all Claims incurred by or asserted against Manager as a result of or in connection with the physical or environmental condition of the Project, except to the extent such condition results from (i) failure of Manager to perform its covenants or obligations under this

Agreement, or (ii) the gross negligence or intentional misconduct of Manager, its shareholders, directors, employees, officers, managers, or contractors.

2.13 Security Services Not Provided. Manager does not provide security services to the

Project. Should the District choose to provide Security Services, the District may separately contract with a company (a "Security Company") providing alarm systems, patrol and similar services ("Security Services"). Except as hereinafter provided, Manager's sole responsibility in respect of Security Services shall be reasonable cooperation with any Security Company.

SECTION 3. Operations

3.1 Operating Budget. At least thirty (30) days prior to the beginning of each calendar year (from January 1 to December 31), and in the case of the initial operating budget, no later than sixty (60) days after Manager has begun managing the Project, Manager shall prepare an operating budget (each, an “Operating Budget”) setting forth an itemized statement of anticipated receipts and disbursements for the next fiscal year based upon the then current and projected schedule of monthly rents, taking into account the general condition of the Project, all anticipated increases in operating expenses, all anticipated or recommended capital expenditures, all anticipated dispositions of property, finance costs, plus reserves for contingencies and necessary replacements.

The Operating Budget shall be subject to whether the Project has been funded through the property appropriations procedures of the District. Each annual Operating Budget shall be deemed to have been approved by the District if not disapproved by the District in writing within sixty (60) days after the District's receipt thereof (such District approval not to be unreasonably withheld or delayed). Should the District properly reject in writing such proposed Operating Budget then

Manager shall operate under the terms and conditions of the prior year’s Operating Budget until such new Operating Budget is approved by the District. If a new Operating Budget is not approved by February 28th of the then applicable calendar year, then the prior year’s Operating Budget shall be deemed the approved Operating Budget for the remainder of such calendar year. With respect to any particular line-item classification of expense within the approved Operating Budget, except as expressly permitted elsewhere in this Agreement, no expense may be incurred or commitment made by Manager which is more than $1,000 or fifteen percent (15%) (whichever is greater) in excess of the amount allocated to such line item classifications of expense in the approved

Operating Budget. In the event of an overrun of a line item in the Operating Budget that is not due to an Emergency Repair, which is more than $1,000 or fifteen percent (15%) (whichever is greater) in excess with respect to any line item of the Operating Budget, Manager shall make a proposal to the District for a modification to the Operating Budget to reflect such overrun, and such modification may be deemed approved if not rejected in writing by the District, specifying the particular reasons for such rejection, within sixty (60) days after receipt thereof. Manager shall operate strictly within the approved Operating Budget unless otherwise authorized in writing by the District.

3.2 Project Operating Account. Manager shall establish, maintain, and control in a financial institution selected by Manager a separate operating account in the name of the District that is designated as a trust account for the Project (“Project Operating Account”). The Project

Operating Account shall be established in compliance with all applicable law and regulations, including but not limited to broker regulations and any others applicable to the provision and oversight of the Services. Manager may also maintain a separate security deposit account in the name of the District in keeping with applicable law, which shall be designated as a trust account

(such security deposit account(s), if any, and Project Operating Account referred to collectively as

“Accounts”). Manager shall be the sole signatory on the Accounts. District shall be granted viewing access of the account. Manager agrees that at all times funds of the District will not be commingled or combined with funds of other owners or in any way combined with other accounts maintained by Manager. No later than sixty (60) days after Manager has begun managing the

Project, the District agrees to deposit a sum equal to (i) one (1) months’ Base Fee (as defined below); (ii) one (1) months’ payroll expense; and (iii) one (1) months’ utility payments (with each amounts in (ii) and (iii) being determined based on the then current Operating Budget) into the

Project Operating Account (items (i)-(iii) referred to collectively as the “Operating Reserve”).

Manager shall be authorized to draw on such Project Operating Account to discharge any liabilities or obligations of Manager or the District incurred for the Project pursuant to the terms of this

Agreement, including fees payable to Manager hereunder, subject to the priority order set forth herein. On a monthly basis, Manager shall disburse to the District the net operating proceeds of the Project after (a) the payment of monthly amounts then owed for the Project’s mortgage (if any) and utilities, (b) the payment of monthly amounts then owed for the Project’s insurance premiums and/or taxes (and if monthly amounts are not then owed for a given month confirmation that appropriate monthly funds have been reserved in preparation for the next required periodic payment (quarterly, bi-annually, annually, etc.) of the same per the Operating Budget), (c) the payment of all fees due to Manager pursuant to this Agreement, (d) all other operating expenses related to the Project; and (e) funding the Operating Reserve (as needed). If there are insufficient funds in the Project Operating Account to cover operating expenses and/or Manager projects that there will be insufficient funds in the Project Operating Account to cover operating expenses, Manager shall request such additional funds as necessary to cover all outstanding operating expenses, which additional funds shall be deposited by the District into the Project Operating

Account within thirty (30) days after such request. In the event such funds are not deposited, Manager shall be entitled to terminate this Agreement and shall be relieved of its obligations in connection with such operating expenses. If District requests Manager to submit ACH Orders as a

Third Party Sender on the District’s behalf, the District and Manager agree to execute the documentation reasonably required by the financial institution in order to permit Manager to act as a Third Party Sender for and on the District’s behalf. The District will not request or authorize

Manager to submit any ACH Orders or otherwise originate or participate in the origination of transactions that violate the laws of the United States or any other governing jurisdictions. For any

ACH Orders requested by the District, the District represents, warrants, and covenants that the

District has fulfilled the compliance requirements pursuant to all Anti-Money Laundering and

Anti-Terrorist Financing laws in the jurisdictions governing the transaction, if applicable. The

Parties agree and acknowledge that the Parties will work cooperatively to set up the accounts set forth in this Section 3.2, provided however, that the Parties agree that reasonable accommodations shall be made if required by the Project’s lender.

3.3 Priority Expenditures. Manager shall promptly notify the District in the event that

Manager becomes aware that the condition of the Project or any portion thereof (i) requires expenditures for any repairs, replacements or structural alterations in excess of the amount budgeted for such repairs, replacements or structural alterations in the Operating Budget, or (ii) fails to meet the standards of any federal, state or local law, ordinance or regulation of which

Manager has actual knowledge (“Priority Expenditures”). Promptly (in fifteen (15) days or less) after such report by Manager to the District, the District shall fund such additional monies to the

Project Operating Account as may be necessary to remedy such Priority Expenditures. Failure of the District to timely fund such additional monies will give Manager the option to terminate this

Agreement pursuant to Section 5.3.

3.4 Reports/Returns. Working in conjunction with an accountant designated by the

District, Manager shall prepare for execution and filing by the District all forms, reports and returns required by any governmental authority having jurisdiction over the Project; provided, however, that Manager shall not be obligated to prepare or file any of the District's state or federal: (i) income tax returns; (ii) sales/use tax returns; and/or (iii) personal property tax returns. Manager shall prepare and file all forms, reports and returns for unemployment insurance, workmen's compensation insurance, disability benefits and social security for all of Manager's employees, if any, that are employed by Manager as on-site employees of the Project.

3.5 Payment/Records. So long as sufficient funds are available in the Project Operating

Account, Manager shall timely pay all bills or invoices for the Project where satisfactory service or supplies have been received so as to maintain good credit for the Project. Manager shall maintain a comprehensive system of office records, books and accounts, which records (as they pertain to the immediately preceding twelve (12) months, or longer as required by law, of operations of the

Project) shall be made available for examination, at the District’s expense, by the District, or its authorized agents, attorneys or accountants, upon reasonable advance written notice to Manager during normal business hours. No later than the thirtieth (30th) day of each month (or the last day of the month in the case of February), with respect to the preceding month, Manager shall provide

(via any reasonable delivery method and in any reasonable format) to the District or to whomever the District shall reasonably designate: (i) detailed statements of receipts and disbursements; (ii) aging of accounts receivable and payable (30, 60, and 90 days); (iii) a comparison of income and expense to the Operating Budget; (iv) bank statements as of the close out day of the preceding month reconciled with the net cash flow forwarded to the District; (v) a security deposit statement;

and (vi) Manager's comments and recommendations. Manager shall use commercially reasonable efforts to preserve originals of all invoices, vouchers and bills until such time as this Agreement is terminated, whereupon, they shall be stored, transferred to the District or disposed of according to

IRS regulations.

3.6 Sale of the Project. The Parties understand that the District has the right to purchase the Project. If the District decides to purchase the Project, the District agrees to promptly inform

Manager’s corporate office. Manager shall reasonably cooperate with any such broker at the

District direction; provided, however, that Manager shall not be required to perform any activities that reasonably inhibit Manager’s ability to provide the Services or cause unnecessary or unreasonable interference with the residents’ use or enjoyment of the Project. Manager shall permit the broker to exhibit the Project during reasonable business hours. the District agrees to promptly notify Manager in writing as to the expected date of closing when same is determined, as well as what reasonable measures and steps the District wishes Manager to take in preparation for such closing. The District agrees to provide Manager with written documentation pertaining to the distribution of funds pertaining to the Project as it pertains to the Manager’s interests.

3.7 Reimbursable Expenses. Reimbursable expenses shall include: (i) all amounts specifically referenced as reimbursable in this Agreement; (ii) all reimbursable amounts expended according to the Operating Budget; and (iii) non-budgeted reimbursable expense, as described below (“Reimbursable Expenses”). Manager shall be permitted to reimburse itself for

Reimbursable Expenses permitted under this Agreement from the Project Operating Account. If the necessary funds to cover all outstanding Reimbursable Expenses are not available in the Project

Operating Account, Manager may request such additional funds, as necessary.

3.8 Non-Budgeted Reimbursable Expenses. Reimbursable Expenses that may not be included in the Operating Budget include: (i) operating costs specific to the Project, such as third-party administrative costs relating to late rent payments, non-negotiable check charges, credit reporting fees, and the like; (ii) postage (including overnight courier, registered mail, etc.) specific to the Project; (iii) de minimis miscellaneous expenses that are directly attributable to the Project;

and (iv) any other expenses that are approved by the District.

3.9 Manager Not Responsible to Advance Funds. Any payments to be made by

Manager hereunder shall be made out of such sums as are available in the Project Operating

Account, and it is agreed that Manager shall not be obligated to expend its own funds for any payments which Manager is authorized to make hereunder.

3.10 Obligations of the District. Subject to limitations for expenses set out in this

Agreement, any and all expenses to third parties that are related to the Project and incurred by

Manager in performing its obligations under this Agreement or acting under the express or implied direction of the District shall be on behalf of, belong to, be the responsibility of, and be borne by the District only, and Manager shall not be liable for any expenses.

3.11 Limitation on Reimbursable Expenses. Reimbursable Expenses shall be limited to direct out-of-pocket expenses of Manger as permitted by the Operating Budget, and shall expressly exclude overhead costs, including salaries, other than on-site employees as contemplated in

Section 2.7 hereof. Reimbursable Expenses shall be limited to reasonable, and customary fees set by local fair market standards.

SECTION 4. Compensation

4.1 Management Fee. Manager shall be entitled to receive from the District a fee as compensation for the management and administrative services performed under this Agreement

(the “Management Fee”) as follows:

Management Phase Proposed Fee

From Commencement Date until termination of Agreement.

The Greater of $XXXX (the “Base Fee”) or

X% of Gross Monthly Collections, in addition to other reimbursable expenses pursuant to this Agreement and/or in the Operating

Budget.

4.2 Gross Monthly Collections. For purposes of this Agreement, the term “Gross

Monthly Collections” of the Project for any calendar month shall mean the entire amount of all rents actually collected under the Leases for such month, together with all other charges collected from tenants and/or guarantors, all revenue earned from laundry, game room and similar facilities, all forfeited security and pet deposits (if any), Lease termination payments, utility reimbursement income, damage awards paid to the District by virtue of lawsuits against residents for the collection of rents (but not for repairs or other approved reimbursable expenses), and all other income earned by the Project from the tenants and/or guarantors of the Project. The Management Fee shall be based solely on an agreed upon fixed dollar amount or a permitted percentage of gross revenues

(and not on net income or net profits of the Project). The Parties expressly agree that the

Management Fee shall not share in any net profits from the operation of the Project.

4.3 Payment of Management Fee. The Management Fee payable to Manager with respect to any calendar month during the Term hereof shall be payable prior to the end of such calendar month in accordance with the Texas Government Prompt Payment Act (Texas

Government Code Chapter 2251). Manager shall be entitled and authorized to pay such

Management Fee from the monies available in the Project Operating Account. No (i) error by

Manager in calculation of the Management Fee; or (ii) decision by Manager to not seek or delay in seeking redress for any breach of this Agreement by the District related to non-payment of any amounts due to Manager, shall constitute a waiver by Manager of payment of all amounts due under this Agreement.

4.4 Additional Accounting Services. Beginning on the Commencement Date and continuing until termination, Manager will perform the accounting services necessary for Manager to perform the Services. If Manager performs accounting services at the request of the District: (i) at any time after ninety (90) days after the termination of the Term of this Agreement; (ii) pertaining to periods of time outside of the Term of this Agreement; and/or (iii) outside the scope of what is necessary to provide the Services, Manager shall be entitled to receive and the District shall pay Manager at a rate of five hundred dollars ($500.00) per month for any month, including partial months, when any such services are performed. Manager’s fee for additional accounting services shall be prorated for any partial month(s) where any such additional accounting services are not provided for the full month. Any fees earned by Manager for the additional accounting services referenced in this Section shall be payable to Manager in accordance with the Texas

Government Prompt Payment Act. If funds are not available in the Project Operating Account, Manager shall notify the District and provide proper documentation of the expenses incurred. The

District shall fund the Project Operating Account or issue payment directly to Manager within thirty (30) days of notification.

SECTION 5. Termination of the Agreement

5.1 Termination Without Cause. After the initial two-year term, this Agreement may be terminated by any party hereto without cause by written notice delivered to the other parties at least sixty (60) days prior to the date of termination. In the event that such notice of termination is timely given as set forth in the immediately preceding sentence, then this Agreement shall terminate on the date specified in the notice of termination; otherwise, this Agreement shall automatically be renewed as provided above in Section 1.3. In the event Project Owner or the

District provides a notice of termination contrary to the requirements of this Section 5.1, Project

Owner shall have elected to exercise a buy-out for the remainder of the Term (“Buy Out”). The amount of the Buy Out shall be equal to the Base Fee (as defined in Section 4.1) multiplied by each month remaining in the Term.

5.2 Termination by the District for Cause. The District may terminate this Agreement for cause upon written notice to Manager. The notice shall specify the grounds for termination.

The effective date of such termination for which Manager has no option to cure shall be five (5)

Business Days after written notice of termination is delivered by the District to Manager setting forth the grounds for which Owner claims the right to terminate this Agreement. The effective date of such termination for which Manager has the option to cure shall be the last day of the applicable cure period if no cure is made.

(a) No Cure Termination. The District may terminate this Agreement, with no opportunity to cure, upon the occurrence of any of the following:

1. Fraud, dishonesty, or misappropriation of funds by Manager or its agents;

2. Gross negligence or willful misconduct of Manager;

3. Material violation of applicable law, rule, or regulation;

4. Loss, suspension, or failure to maintain any required license or qualification;

5. Any insolvency-related event of Manager, including:

i. filing of a bankruptcy petition by or against Manager not dismissed within sixty (60) days;

ii. assignment for the benefit of creditors; or

iii. any action indicating insolvency or inability to pay debts as they become due.

(b) Termination with Limited Cure Period. For any other material breach of this

Agreement, Manager shall have ten (10) Business Days after receipt of written notice to cure such breach. If the breach is not cured within such period, termination shall be effective immediately upon expiration of the cure period.

(c) Additional Grounds for Cause. “Cause” shall also include, without limitation:

1. Repeated non-material breaches that collectively evidence a failure to perform;

2. Failure to comply with District policies or directives, provided that they do not contradict this Agreement or applicable law;

3. Failure to provide required reports, accountings, or financial controls;

4. Failure to maintain required insurance;

5. Failure to perform services in accordance with the standard of care required under this Agreement.

5.3 Termination by Manager for Cause. Manager may terminate this Agreement for cause only under the limited circumstances set forth below, and subject to strict compliance with the notice and cure provisions herein. The effective date of such termination for which the District or

Manager has no option to cure shall be five (5) Business Days after written notice of termination is delivered by Manager setting forth the grounds for which Manager claims the right to terminate this Agreement. The effective date of such termination for which the District or

Manager has the option to cure shall be the last day of the applicable cure period if no cure is made.

(a) No Cure Termination. The Manager may terminate this Agreement, with no opportunity to cure, upon the occurrence of any of the following:

1. Fraud, dishonesty, or misappropriation of funds by District or Project Owner or its agents;

2. Gross negligence or willful misconduct of the District or Project Owner;

3. Material violation of applicable law, rule, or regulation by the District or Project

Owner;

4. Loss, suspension, or failure to maintain any required license or qualification;

5. Any insolvency-related event of the District or Project Owner, including:

i. filing of a bankruptcy petition by or against the District or Project Owner not dismissed within sixty (60) days;

ii. assignment for the benefit of creditors; or

iii. any action indicating insolvency or inability to pay debts as they become due, including any failure of the District or Project Owner to pay or re-imburse

Manager any amounts contemplated by this Agreement or failure by the Board to appropriate funds to manage the Project or any anticipated shortfall in appropriation.

(b) Termination with Limited Cure Period. For any other material breach of this

Agreement, the District or Manager (as applicable) shall have ten (10) Business Days after receipt of written notice to cure such breach. If the breach is not cured within such period, termination shall be effective immediately upon expiration of the cure period.

(c) Additional Grounds for Cause. “Cause” shall also include, without limitation:

1. Repeated non-material breaches that collectively evidence a failure to perform;

2. Failure to comply with Manager policies or directives, provided that they do not contradict this Agreement or applicable law; or

4. Failure of the District or Project Owner (as applicable) to maintain required insurance.

(d) No Immediate Termination Rights. Manager shall have no right to immediate termination, and all termination rights are subject to the notice and cure requirements above.

5.4 Non-Solicitation. Project Owner and the District understand and acknowledge that

Manager has a significant and material interest in (i) retaining its employees; (ii) in preventing its employees from using, for their own benefit, confidential information obtained through such employees' employment by Manager; and (iii) in preventing its employees from using the information, techniques, practices and methods learned through their employment by Manager in competition with Manager. Project Owner and the District therefore covenants and agrees that during the Term of this Agreement and for a period of one (1) year after the end of the Term, Project Owner and the District shall not directly or indirectly (through another property manager or by any other means) solicit, recruit, engage, hire, employ or otherwise retain, on a full-time, part-time, consulting, work-for-hire or any other kind of basis, any current employee(s) of

Manager. If Project Owner or the District violates the terms of this Section 5.4, Project Owner or the District (as applicable) shall pay to Manager as liquidated damages and not as a penalty an amount equal to the sum of one (1) years’ salary of the employee(s) of Manager at issue at the rate which such employee was most recently being paid by Manager. Manager or the District shall not be in violation of this Section 5.4 for any current and/or former employee of Manager whose first contact at issue is in response to an external and public posting.

5.5 Lease Termination. This Agreement may be terminated by Project Owner, upon written notice to Manager delivered in the event of a termination of the Master Lease (“Lease

Termination”). The effective date for any Lease Termination shall be the date of the termination of the Master Lease or 30 days after written notice of the closing date is delivered to Manager, whichever is later. Project Owner agrees to promptly notify Manager of any changes to the closing date for any termination of the Lease.

5.6 Termination of Manager by Project Owner.

5.6.1 After the initial two-year Term, Project Owner may terminate Manager without cause upon one thirty (30) days’ prior written notice to Manager. In the event of such termination, Project Owner shall have the right to appoint a replacement manager, subject to the District's approval, which shall not be unreasonably withheld, conditioned, or delayed. Such termination and replacement shall not interrupt or adversely affect the operations, the monetary terms of the agreement, the management, or performance of this Agreement, which shall remain in full force and effect between Project Owner and the District. In the event Project Owner is unable to secure a replacement manager for the services, Project Owner shall be responsible for providing the same services rendered by Manager during the term of the Master Lease.

5.7 Manager Permitted to Retain Fees and Expenses and Pay Vendors. In the event of any termination of this Agreement, Manager shall be entitled to receive and is expressly authorized to withdraw from the Project Operating Account the Management Fee (actual Management Fee if available and, if not, the reasonably projected Management Fee), the Buy Out (if applicable pursuant to Section 5.1 above), and any other fees or reimbursable expenses for periods through the effective date of such termination. If funds for such payments are not available in the Project

Operating Account, the District shall be obligated to pay such amounts prior to, or within thirty

(30) days after a written request is received by the District from Manager. The District is required to pay any and all fees (including but not limited to termination fees, remainder of term fees, outstanding invoices, etc.) to any vendors who provided services to or performed work for the benefit of Project, engaged by Manager in accordance with the terms of this Agreement, and for which Manager (or an affiliate of Manager) is a party to the vendor contract. Manager is expressly authorized to withdraw the necessary funds to pay any such vendors from the Project Operating

Account. If funds for such payments are not available in the Project Operating Account, the District shall be obligated to pay such amounts prior to, or within thirty (30) days after a written request from Manager.

5.8 Effect of Termination. Upon termination of this Agreement, the District, Manager and Project Owner will comply with all applicable laws and regulations regarding the transfer of the management of the Project to Project Owner, or an approved successor manager. Further, Manager shall use commercially reasonable efforts to affect an orderly transition of the Project to

Project Owner or successor manager. The termination of this Agreement under the provisions of this Section 5 shall not affect the rights of either party with respect to any damages it has suffered as a result of any breach of this Agreement, nor shall it affect the rights or obligations of either party with respect to liability or claims accrued, or arising out of events occurring, prior to the date of termination, all of which shall survive such termination, unless otherwise agreed in writing.

SECTION 6. Insurance

6.1 Project’s Insurance. Project Owner or the District shall, with Manager's cooperation and assistance, arrange for the placement of property, general liability, umbrella/excess liability, and other insurance policies for the Project with coverages at least sufficient to comply with the requirements of this Agreement, the Master Lease, Project Owner’s lender, and applicable law.

With respect to any accident or claim for damage relating to the ownership, operation or maintenance of the Project, including any damage or destruction to the Project, Manager shall promptly investigate and make a written report to Project Owner and the District related thereto, which shall include the estimated cost of repair, and Manager shall cooperate with and make any and all reports required by the applicable insurance company(ies) having policies in effect with respect to the Project. Notwithstanding anything to the contrary, Manager is not responsible for filing or handling, in any way, claims on any insurance policy held or maintained by Project Owner or the District and Manager sole obligation toward Project Owner and the District (and their insurers) shall be those listed in the immediately preceding sentence.

6.2 Project Owner’s Insurance Requirements. Subject to the minimum requirements in

Exhibit A, Project Owner shall maintain, at its expense, insurance for the Project in amounts and with such insurance company(ies) having a general policy rating of "A" or better and a financial class of X or better by A.M. Best Company, Inc. and a claims paying ability of "A- " or better according to Standard & Poor's. Such insurance shall include property coverage on special form to include “all risks of direct physical loss or damage”, loss of rents coverage, commercial general liability, and umbrella/excess liability, all at Project Owner’s expense. Such insurance policies shall name Project Owner’s mortgagee as an additional insured and/or loss payee, as the case may be, and with respect to the liability policies only, extend to insure and indemnify Manager as an additional insured. Prior to the commencement of the Term and upon each renewal of any insurance policy required by this Section 6.2, Project Owner shall provide Manager with certificates and/or other proofs of insurance evidencing that Manager has been named as an additional insured on any liability policies subject to this Section 6.2. Project Owner’s insurance shall be primary to any other insurance or liability policies carried by Manager. Refer to attached

Exhibit A for Project Owner’s minimum insurance requirements that are to be afforded to

Manager. Project Owner must comply with these minimum requirements.

6.3 Optional Masters Insurance Program. If Manager has a master insurance program for property, commercial general liability, umbrella/excess, Project Owner or the District may participate in such program, if interested. Manager agrees to provide an outline of any such program containing the terms, conditions and pricing upon request.

6.4 Compliance with Insurance Requirements. Subject to the provisions of this

Agreement, Manager shall use commercially reasonable efforts to cause the Project to be in compliance with the terms of any insurance policies affecting the Project. Manager shall provide reasonable access to the Project to managers of any and all insurance companies who may, from time to time, be involved with the issuance of insurance policies for the Project or with inspections of the Project in connection with insurance policies then in force.

6.5 Contractors’ Insurance. Manager shall require that all independent contractors performing work at any Project shall maintain reasonably sufficient insurance coverage at such contractors’ expense, including workers’ compensation and employer’s liability (and other insurance pertaining to employees required by applicable law) and primary commercial general liability and automobile liability insurance covering owned, hired and non-owned vehicles, and umbrella/excess liability. The insurance referred to in this Section 6.5 shall, without additional cost to the District, Project Owner or Manager, include the District, Project Owner, Project

Owner’s mortgagee and Manager as additional insureds. Manager shall obtain and keep on file for each such contractor a certificate of insurance which shows that the contractor is so insured.

Contractors’ minimum…