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MANAGEMENT GROUP

 

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PROPERTY MANAGEMENT AGREEMENT

 

dated as of March 21, 2014

 

between

 

BR CARROLL LANSBROOK, LLC

Owner

 

and

 

CARROLL MANAGEMENT GROUP, LLC

Manager

 

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PROPERTY MANAGEMENT AGREEMENT

 

THIS PROPERTY MANAGEMENT AGREEMENT (this "Agreement") is made as of March 21,
2014, by and between BR CARROLL LANSBROOK, LLC, a Delaware limited liability
company ("Owner"), and CARROLL MANAGEMENT GROUP, LLC, a Georgia limited
liability company ("Manager").

 

RECITALS:

 

A. Owner is the owner of certain real property more particularly described in
Exhibit "A" attached hereto and incorporated herein by this reference, upon
which certain improvements consisting of approximately 572 condominium units
(subject to increase based on future acquisitions of Additional Units) in the
774-unit multi-family complex located in Palm Harbor, Florida and commonly known
as Lansbrook Village, and related amenities, landscaping, parking facilities and
other common areas have been constructed (collectively, the "Project"). Owner
and Manager acknowledge that the business plan for the Owner includes the
expectation that certain additional condominium units (the "Additional Units")
within Lansbrook Village will be acquired by the Owner and, upon any such
acquisition such units will be automatically added to, and thereafter constitute
part of, the Project.

 

B.  Manager has represented to Owner that Manager is experienced in the
management, leasing, operation, bookkeeping, reporting, marketing, maintenance
and repair of projects similar to the Project;

 

C.    Owner hereby appoints Manager as sole and exclusive agent of Owner to
manage the Project on the terms herein and Manager accepts such appointment on
the terms herein and agrees to use diligent efforts to conduct and enhance the
management of the Project, subject to the terms herein; and

 

D.        The relationship of Manager to Owner shall be that of an independent
contractor. Nothing herein shall be construed as creating a partnership, joint
venture, or any other relationship between the parties hereto;

 

NOW, THEREFORE, in consideration of the premises and the sum of TEN AND N0/100
DOLLARS ($10.00) paid by Owner to Manager, and for other valuable consideration,
including the mutual covenants hereinafter set forth, the receipt, adequacy, and
sufficiency of which are acknowledged by the parties hereto, Owner and Manager
covenant and agree as follows:

 

1.            Definitions.

 

"Additional Units" shall have the meaning set forth in the Recitals.

 

"Affiliate" means any person that directly or indirectly, through one or more
intermediaries, controls or is controlled by or is under common control with a
designated Person.

 

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"Annual Business Plan" shall mean, with respect to calendar year 2014, the
Annual Business Plan for the management and operation of the Project attached
hereto as Exhibit "B" and incorporated herein by this reference, as the same may
be modified and amended from time to time to reflect the Additional Units, and
for all other years during the term of this Agreement, the Annual Business Plan
for such year established pursuant to Section 5(e) below.

 

"Applicable Law" shall mean all building codes, zoning ordinances, laws, orders,
writs, ordinances, rules and regulations of any Federal, state, county, city,
borough, or municipality, or of any division, agency, bureau, court, commission
or department or of any division, agency, bureau, court, commission or
department thereof, or of any public officer or official, having jurisdiction
over or with respect to the Project.

 

"Approved Operating Expenses" shall mean, with respect to calendar year 2014,
the expenses set forth in the Annual Business Plan attached hereto as Exhibit
"B" and incorporated herein by this reference, as the same may be modified and
amended from time to time to reflect the Additional Units, and for all other
years during the term of this Agreement, the expenses contained in the Annual
Business Plan for such year established pursuant to Section 5(e) below, together
with all other operating expenses with respect to the Project which are
otherwise approved by Owner or permitted pursuant to the express terms of this
Agreement.

 

"Cause" shall have the meaning set forth in the Operating Agreement. "Claims"
shall have the meaning set forth in Section 9(a) below.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, or
any corresponding provision or provisions of succeeding law.

 

“Confidential Information” shall mean the books, records, business practices,
methods of operations, computer software, financial models, financial
information, policies and procedures, and all other information relating to
Owner and the Project (including any such information relating to the Project
generated by Manager), which is not available to the public.

 

“Controllable Expenses” shall mean all expenses, other than Uncontrollable
Expenses, with respect to the Project.

 

“Depository Accounts” shall have the meaning set forth in Section 5(c) below.

 

“Emergency” shall mean an event requiring action to be taken prior to the time
that approval could reasonably be obtained from Owner, (i) in order to comply
with Applicable Law, any insurance requirement or this Agreement, or to preserve
the Project (or any part thereof), or for the safety of any Tenants, occupants,
customers or invitees thereof, or (iii) to avoid the suspension of any services
necessary to the Tenants, occupants, licensees or invitees thereof.

 

“Emergency Expenditures” shall have the meaning set forth in Section 5(j) below.

 

“Excluded Items” means:

 

(a)           capital contributions by Owner or any interest therein;

 

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(b)           the refinancing of any loan or any voluntary conversion, sale,
exchange or other disposition of the Project or any portion thereof;

 

(c)           casualty insurance proceeds;

 

(d)           proceeds of condemnation awards;

 

(e)           any deposits including rental, security, damage, or cleaning
deposits;

 

(f)            interest on investments or otherwise;

 

(g)           abatement of taxes;

 

(h)           any utility reimbursements received from Tenants for amounts
actually paid by Owner or Manager directly to the utility companies (Owner
acknowledging and agreeing that any revenues, fees, mark-ups and overhead
charges received from Tenants in excess of amounts actually paid to the utility
companies shall be included in Monthly Gross Receipts);

 

(i)            discounts and dividends on insurance policies; and

 

G)            other income not directly derived from Manager's management of the
Project.

 

"Leases" shall have the meaning set forth in Section 5(f)(ii) below.

 

"Loan Documents" shall mean any and all documents evidencing or securing any
indebtedness obtained by Owner and secured by the Project with respect to which
Manager has received written notice from Owner, as same shall be amended,
replaced, refinanced or otherwise modified from time to time during the Term of
this Agreement. Manager acknowledges receipt of the Loan Documents of even date
herewith evidencing and securing that certain Loan in the original maximum
principal amount of $48,000,000, more or less, from General Electric Capital
Corporation ("Lender") to Owner.

 

"Management Fee" shall have the meaning set forth in Section 4(a).

 

"Manager Indemnitees" shall have the meaning set forth in Section 9(b) below.

 

"Manager's Event of Default" shall have the meaning set forth in Section 10(a)
below.

 

"Master Insurance Program" shall have the meaning set forth in Section 6(b)
below.

 

"Monthly Gross Receipts" shall include the entire amount of all Rental Income
and additional revenues derived from the Project other than the Excluded Items,
including all receipts, determined on a cash basis, from:

 

(a)Rental Income;

 

(b)Owner's share of vendor income proceeds from vending machines and
concessions; and

 

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(c)All other income and cash receipts attributable to or derived from the
Project other than the Excluded Items.

 

"Operating Agreement" shall mean that certain Limited Liability Company
Agreement for BR Carroll Lansbrook JV, LLC, dated February 12, 2014.

 

"Owner Indemnitees" shall have the meaning set forth in Section 9(a) below.

 

"Owner's Event of Default" shall have the meaning set forth in Section l0(c)
below.

 

"Person" means any individual, partnership, corporation, trust, limited
liability company or other entity.

 

"Per Unit Controllable Expenses" shall have the meaning set forth in Section
5(e) below.

 

"Per Unit Revenue" shall have the meaning set forth in Section 5(e) below.

 

"Project" shall have the meaning set forth in the recitals above.

 

"Reimbursable Expenses" shall have the meaning set forth in Section 4(b) below.

 

"Rental Income" means all rent and other charges due from Tenants, from users of
garage spaces, storage closets, parking charges, and from any other lessees of
other non-dwelling facilities, if any, in the Project, from concessionaires in
consequence of the authorized operation of facilities in the Project maintained
primarily for the benefit of Tenants, and all other rental fees and other
charges otherwise due Owner and collected by Manager with respect to the
Project.

 

"Security Account" shall have the meaning set forth in Section 5(d) below.

 

"Tenants" shall have the meaning set forth in Section 5(d) below.

 

"Uncontrollable Expenses" shall mean the following expenses with respect to the
Owner: taxes and insurance; licenses; HOA assessments; utilities; unanticipated
material repairs that are essential to preserve or protect the Project; debt
service; and costs due to a change in law.

 

2.            Appointment of Manager. On and subject to the terms and conditions
of this Agreement, Owner hereby retains Manager commencing on March 21, 2014
(the "Commencement Date") to manage and lease the Project.

 

3.            Term. This Agreement shall commence on the Commencement Date and
shall continue for a term of forty-eight (48) months (the "Initial Term") or
until Manager is terminated pursuant to Section 11 of this Agreement.

 

4.            Management Fee; Other Fees; Reimbursement of Expenses. In
consideration of the performance by Manager of its duties and obligations
hereunder:

 

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(a)           Owner agrees to pay to Manager a fee computed and payable monthly
in arrears in an amount equal to two and seventy five hundredths percent (2.75%)
of Monthly Gross Receipts (the "Management Fee"). The Management Fee shall be
deducted each month from the Monthly Gross Receipts to be paid to Owner pursuant
to this Agreement.

 

(b)           Subject to the Annual Business Plan, Owner agrees to reimburse
Manager for the aggregate expenses incurred by Manager in connection with or
arising from the ownership, operation, management, repair, replacement,
maintenance and use or occupancy of the Project (exclusive of any common
elements or limited common elements owned, controlled, maintained or operated by
the Project condominium association), including, without limitation, those costs
expressly set forth in Exhibit "C" attached hereto and incorporated herein by
this reference (all items to be reimbursed pursuant to this Section 4(b) are
referred to herein as "Reimbursable Expenses"). If any such Reimbursable
Expenses are a part of the Approved Operating Expenses and are paid by Manager
and not from Monthly Gross Receipts on hand, then Owner agrees to reimburse such
amounts to Manager. All other Reimbursable Expenses which are not a part of
Approved Operating Expenses and not contained in the list set forth in Exhibit
"C" attached hereto must be approved by Owner in advance, such approval not to
be unreasonably withheld, conditioned or delayed. Manager shall submit to Owner
an invoice detailing the calculation of such Reimbursable Expenses no later than
the fifteenth (15th) day of each month for the immediately preceding month. The
Reimbursable Expenses then owed shall be deducted each month from the Monthly
Gross Receipts to be paid to Owner pursuant to this Agreement.

 

(c)           Intentionally Omitted.

 

(d)           A construction management fee in the amount of five percent (5.0%)
of the rehabilitation and renovation expenses for the Project, as set forth in
the Annual Business Plan, which fee shall be calculated and paid upon each
respective draw and within thirty (30) days of final draw or following
completion of the restoration or satisfaction of the claim, whichever is
applicable.

 

(e)           A fee will be charged for the initial takeover of the Project in
the amount of $2,000.00 to cover costs for training and marketing of the
Project.

 

(f)            Intentionally Omitted

 

(g) Upon the termination or expiration of this Agreement other than for Cause, a
close-out fee equal to one hundred percent (100%) of the last month's full
management fee (the "Close Out Fee"). The Close Out Fee shall be deducted from
the final month's Monthly Gross Receipts to be paid to Owner.

 

5.            Authority and Responsibilities of Manager.

 

(a)           Independent Contractor. In the performance of its duties
hereunder, Manager shall be and act as an independent contractor, with the sole
duty to supervise, manage, operate, control, direct and determine the methods of
performance of the specified duties and obligations hereunder. Nothing contained
in this Agreement shall be deemed or construed to create a partnership, joint
venture, employment relationship, or otherwise to create any liability for one
party with respect to indebtedness, liabilities or obligations of the other
party except as otherwise may be expressly set forth herein.

 

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(b)           Standard of Care; Acquisition of Additional Units. Manager shall
perform its duties and obligations in a professional manner, and shall maintain
the Project in accordance with the applicable Annual Business Plan and in
accordance with the standards a reasonably prudent multifamily property manager
would employ with respect to properties of similar age, size, and as the Project
in the market area in which the Project is located. Manager further acknowledges
that it shall serve as Owner's primary point of contact with respect to the
Owner's acquisition of Additional Units, and shall act in a commercially
reasonable manner to assist Owner to acquire such Additional Units as
efficiently and as promptly as practicable.

 

(c)           Depository Accounts. All Monthly Gross Receipts from the Project,
after deducting Approved Operating Expenses, Reimbursable Expenses and the
Management Fee, shall be deposited by Manager into one or more deposit accounts
designated by Owner (each a "Depository Account"). All Depository Accounts shall
be the sole and exclusive property of Owner, and Manager shall retain no
interest therein, except as may be expressly provided in this Agreement. Manager
shall not commingle Depository Accounts with any other funds. Checks may be
drawn upon such Depository Accounts only by persons authorized by Owner in
writing to sign checks, at least one of whom shall be a designee of Manager. No
loans shall be made from the Depository Account. Depository Accounts shall be
established by and in the name of Manager to be held in trust for Owner.

 

(d)           Security Deposits. Manager shall deposit and maintain all security
deposits in a separate account designated by Owner and insured by the Federal
Deposit Insurance Corporation (the "Security Account"). Manager shall fully fund
all security deposits actually received by Manager from tenants of the Project
under written leases (collectively, "Tenants") into the Security Account,
notwithstanding whether Applicable Law requires full funding. The Security
Account shall be a segregated account that is distinct from the Depository
Accounts and any other accounts relating to the Project or Manager. The Security
Account shall be the sole and exclusive property of Owner, and Manager shall
retain no interest therein, except as may be expressly provided herein. Manager
shall not commingle the Security Account with any other funds. Checks may be
drawn upon the Security Account only by persons authorized by Owner in writing
to sign checks, at least one of whom shall be a designee of Manager. No loans
shall be made from the Security Account. Manager shall not use a "standardized
clearing account" for the Security Account. The Security Account shall be
established in the name of Manager to be held in trust for Owner.

 

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(e)           Annual Business Plan. Manager agrees to prepare an Annual Business
Plan for the operation of the Project for Owner's review and approval, no later
than November 1 in each year during the term of this Agreement. If final
approval of a proposed Annual Business Plan by Owner has not been given by the
beginning of the year to which such proposed Annual Business Plan relates,
Property Manager shall operate the Project on the basis of an Annual Business
Plan determined by (i) assuming that the revenue from the Project will increase
to 103% of the revenues collected in the prior year, (ii) assuming that the
Controllable Expenses will increase to 103% of the amount of the actual
Controllable Expenses incurred in the prior year, (iii) increasing all
Uncontrollable Expenses by any anticipated or known increases in such
Uncontrollable Expenses, and (iv) including any Emergency Expenditure (as
defined in Section 5(j) below). In the event that the number of condominium
units has increased from the prior year, the Annual Business Plan established
pursuant to the preceding sentence would be further adjusted as follows: (1) the
amount of revenues determined in accordance with clause (i) above shall be
calculated on a per-unit basis based on the type of condominium unit ("Per Unit
Revenue"); such Per Unit Revenue shall be applied on a consistent basis to the
newly acquired condominium units based on the type of condominium unit; and the
amount of revenues in the Annual Business Plan shall be increased by the
revenues associated with the newly acquired condominium units as determined
pursuant to this sentence; (2) the amount of Controllable Expenses determined in
accordance with clause (ii) above shall be calculated on a per-unit basis based
on the type of condominium unit ("Per Unit Controllable Expenses"); such Per
Unit Controllable Expenses shall be applied on a consistent basis to the newly
acquired condominium units based on the type of condominium unit; and the amount
of Controllable Expenses in the Annual Business Plan shall be increased by the
Controllable Expenses associated with the newly acquired condominium units as
determined pursuant to this sentence; (3) items referenced in clauses (iii) and
(iv) above shall likewise apply to the newly acquired condominium units. No
material deviations (as defined herein) from any item in an Annual Business Plan
approved in accordance with the terms herein shall be made by Manager without
the prior approval of the "Management Committee" (as defined in the Operating
Agreement), to the extent required by the Operating Agreement. The Manager shall
provide quarterly updates to the Annual Business Plan, solely for informational
purposes. Each Annual Business Plan shall include the information set forth in
Exhibit "E". Owner (and its sole member) will consider the proposed Annual
Business Plan in accordance with the terms of the Operating Agreement and will
consult with Manager prior to the commencement of the forthcoming calendar year
in order to agree on an Annual Business Plan for such calendar year. The Annual
Business Plan for calendar year 2014 is attached hereto at Exhibit "B".
Notwithstanding anything herein to the contrary, the Owner may, at any time and
from time to time, in connection with the addition of Additional Units or
otherwise, submit to Manager reasonable modifications to all or any portion of
the Annual Business Plan during the course of a calendar year, which
modifications shall be incorporated in the Annual Business Plan then in effect
and such Annual Business Plan as modified shall be deemed to be the Annual
Business Plan then in effect, and Owner shall fund into the Disbursement Account
any and all amounts as and when necessary to fund any increases in expenditures
which may be required as a result of any such change to the Annual Business
Plan. Notwithstanding the foregoing sentence to the contrary, in no event shall
Owner have the right to modify the Annual Business Plan to reduce the Management
Fee or Reimbursable Expenses otherwise due pursuant to Section 4. In no event
shall Manager be deemed in default under this Agreement if such changes by Owner
to the Annual Business Plan causes Manager to have insufficient funds to perform
its obligations hereunder. Manager agrees to use commercially reasonable efforts
to ensure that the actual costs of maintaining and operating the Project shall
not exceed the amount reasonably necessary and, in any event, will not exceed
either the Annual Business Plan (as modified to reflect any Additional Units)
either in total amount or in any one accounting category. Notwithstanding
anything to the contrary, Manager shall secure Owner's prior written approval
for any expenditure that will result in an excess of the annual budgeted amount
in any one accounting category by more than $10,000.00 of the Annual Business
Plan or $25,000.00 in the aggregate for all categories (a "material deviation").
Manager shall promptly advise and inform the Owner of any transaction, notice,
event or proposal directly relating to the management and operation of the
Project which does or is likely to significantly affect, either adversely or
favorably, the Project, other assets of the Owner or cause a material deviation
from the Annual Business Plan. Nothing contained herein shall in any way
diminish the obligations or duties of Manager hereunder.

 

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(f)            Leasing, Collection of Rents, Etc.

 

(i)    Manager shall use commercially reasonable efforts consistent with the
standard of care set forth herein to lease apartment units in accordance with
all Applicable Laws, to retain residents and to maximize Rental Income. Manager
shall not enter into any Lease which has a term greater than twelve (12) months,
except as may be expressly permitted by any Loan Documents. Manager shall comply
in all material respects with all of the terms and conditions applicable to the
leasing of the Project set forth in any Loan Documents.

 

(ii)   Manager shall sign apartment leases ("Leases") on behalf of Owner in its
capacity as property manager hereunder. Manager shall only sign Leases in the
form of lease attached hereto as Exhibit "D".

 

(iii)  Manager shall collect rents, security deposits and other charges payable
by Tenants in accordance with the Leases, and shall collect Monthly Gross
Receipts due Owner with respect to the Project from all other sources, and shall
deposit all such monies received promptly upon receipt in the appropriate
accounts as provided herein. If Manager receives Excluded Items, Manager shall
promptly deposit same in an account designated by Owner.

 

(iv)  Manager shall pay all debt service, monthly bills and insurance premiums
on the Project from the Depository Account.

 

(v)   Manager shall, at Owner's expense, market the Project for rental,
terminate Leases, evict Tenants, institute and settle suits for delinquent
payments as Manager, in its reasonable discretion, deems advisable, subject to
other provisions of this Agreement. In connection therewith, Manager may, at
Owner's expense, as limited by the provisions of Section 5(k) of this Agreement,
consult and retain legal counsel.

 

(vi)  Manager shall, at Owner's written request, on the twenty-first (21st) day
of each month, pay Owner an amount equal to Monthly Gross Receipts for such
month, less amounts paid for Approved Operating Expenses of the Project in
accordance with this Agreement, including, without limitation, the fees owed to
Manager pursuant to Section 4 of this Agreement.

 

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(vii)   The responsibilities and services included in this Section 5 as part of
Manager's duties shall not entitle Manager to any additional compensation over
and above the fees set forth in Section 4 of this Agreement. Except as expressly
provided in Section 4, Manager shall not be entitled to any compensation based
upon any Project financing or sale of the Project, unless Manager is engaged
pursuant to a separate agreement with Owner to provide brokerage services in
connection therewith, in which case Manager's right to compensation for Project
financing or sale shall be based upon such separate agreement.

 

(g)           Repair, Maintenance and Service.

 

(i)   Manager shall maintain the Project in good repair and condition,
consistent with the standard of care set forth herein and in accordance with the
Annual Business Plan.

 

(ii)  Subject to the other terms and conditions of this Agreement, Manager in
its capacity hereunder shall, in Owner's name and at Owner's expense, execute
contracts for water, sanitary sewer, electricity, gas, internet service,
telephone, trash removal, television, vermin or pest extermination and any other
services which are necessary to properly maintain the Project, except for
utility services to individual apartment units, which shall be each Tenants'
respective responsibility to the extent provided in the applicable Leases. Any
such contracts shall not, unless the Owner otherwise approves the terms thereof,
materially deviate from the terms of the then existing approved Annual Business
Plan of the Project. Manager shall, in Owner's name and at Owner's expense, out
of available cash flow, hire and discharge independent contractors for the
repair and maintenance of the Project. Other than Leases, which Manager is
authorized to execute hereunder, Manager shall not, without the prior written
consent of the Owner, enter into any contract in the name of Owner which may not
be terminated without payment of penalty or premium with not more than thirty
(30) days' notice. Except as set forth above, Manager shall be permitted to and
shall enter into all other contracts (in the name of and/or as agent for Owner)
in accordance with the standard of care established by this Agreement and as
Manager reasonably believes are necessary to perform Manager's obligations
hereunder. Manager shall act at arms' length with all contractors and shall
employ no Affiliates of Manager without the prior written consent of Owner.

 

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(h)           Manager's Employees. Manager shall have in its employ at all times
a sufficient number of employees to enable it to professionally manage the
Project in accordance with the terms of this Agreement, as determined by Manager
in its professional discretion and subject to the Annual Business Plan. Manager
shall prepare, execute and file all forms, reports and returns, as applicable,
but only to the extent expressly required by Applicable Laws, and Manager shall
be permitted to rely on the advice of counsel and other experts in making the
determination of what is required. Manager is authorized to screen, test,
investigate, hire, supervise, discharge, and pay all personnel necessary in
Manager's reasonable discretion to maintain and operate the Project. Owner shall
reimburse Manager for all employee related expenses, liabilities, and
administrative burden (including, without limitation, costs for all full-time
and part- time employees such as gross salaries and wages, payroll taxes, health
insurance, workers compensation, and other benefits of Manager's employees
including the costs for training, software, and other administrative and
processing costs, including without limitation, Project accounting, payroll
processing, risk management, benefits administration, travel, marketing
expenses, bank charges, telephone and answering service [which may be equitably
allocated on a prorata basis (based on the gross revenues of each such property)
among the Project and other properties managed by Manager, if applicable]) and
all costs related to pre-employment testing and screening, provided, however,
that all of the foregoing costs shall be subject to the then effective Annual
Business Plan or otherwise permitted or approved by Owner pursuant to this
Agreement. Owner expressly acknowledges and agrees that Manager may use
employees normally assigned to other work centers and/or part-time employees to
properly staff the Project, in which case wages and related expenses shall be
reimbursed on a pro rata basis for the time actually spent for the Project
(rather than being allocated based on the gross revenues of each property);
provided, however, Owner shall not pay or reimburse Manager for all or any part
of Manager's general overhead expenses, including salaries and payroll expenses
of personnel of Manager, except as otherwise set forth herein.

 

(i)            Maintenance of Records. Manager agrees to keep and maintain at
all times all necessary books and records relating to the leasing, management
and operation of the Project, and to prepare and render to Owner monthly
itemized accounts of receipts and disbursements incurred in connection with its
leasing operation and management by the thirteenth (13th) day of the following
month. In particular, Manager shall furnish Owner with the statements and
reports listed on Exhibit "F" attached hereto. An annual audit report shall be
prepared at Owner's expense, showing a balance sheet and an income and expense
statement, all in reasonable detail and certified by an independent certified
public accountant approved by Owner in its sole discretion. All books,
correspondence and data pertaining to the leasing, management and operation of
the Project shall, at all times, be safely preserved. Such books, correspondence
and data shall be available to Owner at all reasonable times, upon not less than
forty-eight (48) hours' advance notice, for Owner's inspection thereof, and
shall, upon the termination of this Agreement be delivered to Owner in their
entirety and upon request of Owner be delivered to Owner within thirty (30) days
of such request. Manager shall maintain files of all original documents relating
to Leases, vendors and all other business of the Project in an orderly fashion
at the Project, which files shall be the property of Owner and shall at all
times be open to Owner's inspection and available for copying at Owner's
request, cost and expense. On or about the end of each calendar quarter of each
year, Manager shall cause to be furnished to BR Lansbrook JV Member, LLC
("Bluerock") such information as reasonably requested in writing by Bluerock as
is necessary for any reporting requirements of the any direct or indirect
members of Bluerock or for any reporting requirements of any REIT Member (as
defined in the Operating Agreement) (whether a direct or indirect owner) to
determine its qualification as a real estate investment trust and its compliance
with REIT Requirements (as defined in the Operating Agreement) as shall be
reasonably requested by Bluerock. Further, the Manager shall cooperate in a
reasonable manner at the request of Owner and any direct or indirect member of
Owner to work in good faith with any designated accountants or auditors of such
party or its Affiliates so that such party or its Affiliate is able to comply
with its public reporting, attestation, certification and other requirements
under the Securities Exchange Act of 1934, as amended, applicable to such
entity, and to work in good faith with the designated accountants or auditors of
the such party or any of its Affiliates in connection therewith, including for
purposes of testing internal controls and procedures of such party or its
Affiliates.

 

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(j)            Approved Operating Expenses; Emergency Expenditures. The Approved
Operating Expenses which Manager is authorized to incur and pay on behalf of
Owner under this Agreement shall in all respects be limited to those expenses
set forth in the Annual Business Plan for the period during which such expenses
are paid; provided, however, that Manager shall be authorized to incur and pay
for all other expenses permitted pursuant to Section 5(e) above, or which are
otherwise expressly permitted by this Agreement regardless of whether or not
such expenses are within the limitations set by the Annual Business Plan. Any
expenses permitted pursuant to Section 5(e) or otherwise approved in writing by
Owner which were not included in the Annual Business Plan shall be deemed sums
permitted to be expended by Manager in addition to (and not in limitation of)
the amounts permitted under the Annual Business Plan. The foregoing
notwithstanding, if an Emergency occurs necessitating repairs the cost of which
would have the effect of exceeding the Annual Business Plan by more than those
limitations as provided above (such expenses referred to herein as "Emergency
Expenditures"), and Manager is unable to communicate promptly with Owner, then
Manager may order, contract for and pay for such Emergency Expenditures not to
exceed $20,000.00, with the cost thereof being included as a Reimbursable
Expense for the purposes of the Agreement, and Manager shall promptly thereafter
notify Owner of any such expenses and the nature of the Emergency.

 

(k)           Legal Proceedings and Compliance with Applicable Laws.

 

(i)   Manager shall promptly notify Owner (and each insurance carrier of which
Manager is aware and whose policy may cover a related claim) in writing of the
receipt of, or attempted service on Owner or Manager of (A) any demand, notice
or legal process, or (B) the occurrence of any casualty, loss, injury or damage
on, at or concerning the Project.

 

(ii)  Manager acknowledges that it is not authorized to accept service of
process or any other notice on behalf of Owner. Manager shall not make
representations or provide information to any Person that is inconsistent with
the foregoing.

 

(iii)  Manager shall promptly provide copies to Owner of all notices and other
written communications from Owner's insurance carriers with respect to accepting
coverage, appointing counsel or any other matter related to a claim against
Owner.

 

(iv)  Manager shall promptly provide notice to Owner of any oral or written
communication relating to the Project that Manager receives from a governmental
or regulatory agency. Manager shall promptly provide Owner with a complete copy
of any such written materials.

 

11

 

 

(v)   Manager shall fully comply and cause its employees to fully comply, with
all Applicable Laws in connection with this Agreement and the performance of its
obligations hereunder.

 

(vi)   Manager agrees that it shall not, and shall not permit its employees to,
cause any hazardous materials or toxic substances, to be stored, released or
disposed of on or in the Project except as may be incidental to the operation of
the Project (e.g., cleaning supplies, fertilizers, paint, pool supplies and
chemicals) and then only in complete compliance with all Applicable Laws, in
conformity with the standard of care established hereby and in accordance with
any limitations set forth in in any loan documents evidencing or securing any
financing secured by the Project. If (A) there is a violation of Applicable Laws
or a violation of the terms of any applicable loan documents regarding the
storage, release and disposal of such hazardous materials, or toxic substances,
or (B) Manager reasonably believes that the storage, release or disposal of any
hazardous material, petroleum product, or toxic substances, could cause
liability to the Owner, including any releases caused by Tenants, third parties
or employees, on or affecting the Project, Manager shall notify Owner promptly.

 

(vii)   Manager agrees that the Project shall be offered to all prospective
tenants on a nondiscriminatory basis without regard to race, color, religion,
sex, family status, handicap or national origin in accordance with Applicable
Law.

 

(l) Computers. All computers, hardware, software, computer upgrades and
maintenance in connection therewith shall be at Owner's expense.

 

(m) Insufficient Cash Flow. In the event Manager, at its sole option, elects to
advance funds for Owner's account or Owner is indebted to Manager for services
or otherwise arising out of, and incurred in accordance with the terms of, this
Agreement, all monies advanced by Manager or otherwise past-due shall thereafter
be due and payable by Owner upon demand and shall bear interest at the prime
rate as set forth in the Wall Street Journal, plus one percent, per annum,
computed on monthly debit balances on Owner's account. At the election of
Manager, and upon prior written notice to Owner, Manager may satisfy any
permitted advances made by Manager, together with the interest due thereon, from
the Monthly Gross Receipts of the Project. In the event that the Depository
Accounts for the Project do not have sufficient funds to cover the monetary
obligations of Manager or the Project pursuant to this Agreement, Manager shall
give Owner prompt written notice with respect to such shortfall and if Owner has
not promptly provided funds, then Manager will have no duty to perform any such
obligations until Owner provides sufficient funding, unless Manager so elects in
its sole discretion pursuant to this Section 5(m), and Manager shall not be in
default under this Agreement for failure to perform any obligation hereunder as
a result of such lack of funds. If Manager suspects that the cash flow from the
Project will not, at any time, be sufficient to cover any Project related
expenses, Manager shall promptly notify Owner, and Manager and Owner shall
mutually determine the order in which the obligations of the Project will be
satisfied; provided, however, that Manager and Owner agree that available cash
flow will in any event first be applied to Uncontrollable Expenses that are then
due and payable.

 

12

 

 

6.             Insurance Requirements.

 

(a)           Manager's Insurance. With respect to its operations of the
Project, Manager shall carry, (i) worker's compensation insurance for
compensation to any person engaged in the performance of any work undertaken
under this Agreement, including employer's liability coverage with limits of not
less than as may be required by Applicable Law, (ii) commercial general
liability insurance and excess/umbrella liability insurance policies with
combined limits of not less than $3,000,000.00 per occurrence and in the
aggregate; such policies shall be written on an occurrence basis, and include
contractual liability and other provisions as Owner shall reasonably require,
(iii) a crime insurance policy including insuring agreement for employee
dishonesty, forgery and alteration, theft, disappearance and destruction, and
robbery and safe burglary, with limits of liability for each insuring agreement
not less than $100,000.00, with a maximum deductible of $5,000.00 per claim, and
(iv) if the Manager provides services similar to those set forth in this
Agreement to third-party clients with which the Manager has no other
affiliation, a professional liability insurance policy covering all the
activities of Manager; such policy shall be written on a "claims made" basis,
with limits of at least $1,000,000.00 in the aggregate and with a maximum
deductible of $25,000.00. Any loss for less than the amount of the deductibles
shall be borne by Manager. All policies of insurance shall be maintained in
effect during the period of this Agreement. Each policy shall be from an
insurance company rated "A" or higher by the A.M. Best Insurance Guide, with a
financial size category rating of 12 or higher. The Commercial General Liability
insurance policy shall be endorsed to include Owner as an additional insured.
Manager shall furnish Owner with copies Acord certificates evidencing such
policies and the renewals thereof.

 

(b)           Owner's Insurance. As an operating expense of the Project, Owner
or Owner's representative shall provide and maintain insurance as consistent and
required by the loan documents relating to the Project, or if there are none
applicable, in an amount equal to 100% of the full replacement value of the
Project and the improvements thereon. Alternatively, Manager has arranged,
through its insurance agent, a master insurance program in which owners of
property managed by Manager may participate (the "Master Insurance Program"). If
Owner elects to participate in the Master Insurance Program, the Owner shall pay
the amount thereof set forth on the insurance invoice delivered to Owner under
the Master Insurance Program, which invoice may include administrative charges
in excess of the actual insurance premiums charged by the underling insurance
carriers. All insurance coverage provided under the Master Insurance Program
shall be terminated when this Agreement expires or is sooner terminated without
the need for prior notice of termination of the insurance coverage. Owner
acknowledges that Manager is not an expert or consultant regarding insurance
coverages and requirements; accordingly, Owner assumes all risk with respect to
the adequacy of insurance coverages, whether such insurance is provided through
the Master Insurance Program or otherwise, and Manager shall have no liability
therefor in any respect. Manager shall be named an additional insured under any
policies of insurance carried by Owner with respect to the Project.

 

13

 

 

(c)           Annual Business Plan. Upon Manager's submission of each Annual
Business Plan, Manager shall affirmatively and in writing confirm and set forth
the scope of all existing insurance coverage, including confirming coverage for
the forthcoming year.

 

7.            Representations and Duties of Manager.  Manager represents,
warrants, covenants and agrees that:

 

(a)           Manager has the authority to enter into and to perform this
Agreement, to execute and deliver all documents relating to this Agreement, and
to incur the obligations provided for in this Agreement.

 

(b)           When executed, this Agreement shall constitute the valid and
legally binding obligations of Manager in accordance with its terms.

 

(c)           Manager has all necessary licenses, consents and permissions to
enter into this Agreement, manage the Project, and otherwise comply with and
perform Manager's obligations and duties hereunder. Manager shall comply with
any conditions or requirements set out in any such licenses, consents and
permissions, and shall at all times operate and manage the Project in accordance
with such conditions and requirements.

 

(d)           During the term of this Agreement, Manager will be a valid limited
liability company, duly organized under the laws of the State of its formation,
be qualified in the State in which the Project is located and shall have full
power and authority to manage the Project, and otherwise comply with and perform
Manager's obligations and duties under this Agreement.

 

(e)           Manager shall comply with any requirements under applicable
environmental laws, regulations and orders which affect the Project.

 

(f)           Manager shall cause the Project to be operated in a manner so that
all requirements shall be met which are necessary to obtain or achieve issuance
of all necessary permanent unconditional certificates of occupancy, including
all governmental approvals required to permit occupancy of all of the apartment
units in the Project.

 

8.            Representations of Owner. Owner represents and warrants, that:

 

(a)           Owner has the authority to enter into and to perform this
Agreement, to execute and deliver all documents relating to this Agreement, and
to incur the obligations provided for in this Agreement;

 

(b)           The Person executing this Agreement on behalf of Owner has the
requisite power and authority to execute this Agreement on behalf of Owner; and

 

14

 

 

(c)           When executed, this Agreement, together with all documents
executed pursuant hereto, shall constitute the valid and legally binding
obligations of Owner in accordance with its terms.

 

9.            Indemnification.

 

(a)           Indemnification of Owner. Manager shall indemnify, protect, defend
(with legal counsel approved by Owner) and hold harmless Owner and Owner's
members, managers, partners and Affiliates, together with their respective
officers, directors, agents, employees and affiliates (collectively, "Owner
Indemnitees"), from and against any and all claims, demands, actions,
liabilities, losses, costs, expenses, damages, penalties, interest, fines,
injuries and obligations, including reasonable attorneys' fees, court costs and
litigation expenses ("Claims") actually incurred by any Owner Indemnitee as a
result of (i) any act by Manager (or any officer, agent, employee or contractor
of Manager) outside the scope of Manager's authority hereunder, (ii) any act or
failure to act by Manager (or any officer, agent, employee or contractor of
Manager) constituting gross negligence, willful misconduct, fraud or material
breach of this Agreement, other than as covered by Owner's insurance (for
negligence or misconduct only) and to the extent Owner's insurance is available,
(iii) Claims made by current or former employees or applicants for employment
arising from hiring, supervising or firing same, or (iv) any act or omission by
Manager, its employees, officers, agents or contractors knowingly in violation
of any Applicable Laws.

 

(b)           Indemnification of Manager by Owner. Owner shall indemnify,
protect, defend and hold harmless Manager and its Affiliates, together with
their respective officers, directors, agents, employees and affiliates
(collectively, "Manager lndemnitees") from and against any and all Claims
actually incurred by any Manager Indemnitee resulting from performance of its
obligations under this Agreement, except that this indemnification shall not
apply with respect to any Claims (i) resulting from any act by Manager, its
employees, officers, agents or contractors outside the scope of Manager's
authority hereunder, (ii) resulting from any act or failure to act by Manager,
its employees, officers, agents or contractors constituting gross negligence,
willful misconduct, fraud or material breach of this Agreement, (iii) resulting
from Claims made by current, former employees or applicants for employment
arising from hiring, supervising or firing same, or (iv) any act by Manager, its
employees, agents or contractors knowingly in violation of any Applicable Law.

 

(c)           Survival. The provisions of this Section 9 shall survive the
termination of this Agreement.

 

10.          Defaults.

 

(a)           Manager's Event of Default. Manager shall be deemed to be in
default hereunder upon the happening of any of the following ("Manager's Event
of Default"):

 

(i)   The failure by Manager to keep, observe or perform any covenant,
agreement, term or provision of this Agreement and the continuation of such
failure, in full or in part, for a period of thirty (30) days after written
notice thereof by Owner to Manager, or if such default cannot be cured within
such thirty (30) day period, then such additional period as shall be reasonable
(but in no event to exceed an additional sixty (60) days thereafter), provided
Manager commences to cure such default within such thirty (30) day period and
proceeds diligently to prosecute such cure to completion;

 

15

 

 

(ii)   The making of a general assignment by Manager for benefit of its
creditors, the filing by Manager with any bankruptcy court of competent
jurisdiction of a voluntary petition under Title 11 of U.S. Code, as amended
from time to time, the filing by Manager of any petition or answer seeking any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or state act
or law relating to bankruptcy, insolvency, or other relief for debtors, Manager
being the subject of any order for relief issued under such Title 11 of the U.S.
Code, as amended from time to time, or the dissolution or liquidation of
Manager;

 

(iii)  The intentional misapplication, misappropriation or commingling of funds
held by Manager for the benefit of Owner, including the payment of fees to
Affiliates of the Manager or the loaning of funds to Affiliates; or

 

(iv)    The occurrence of any other for Cause event with respect to Manager's
Affiliate, Carroll Lansbrook JV Member, LLC.

 

(b)           Remedies of Owner. Upon a Manager's Event of Default, after
expiration of all applicable notice and cure periods, Owner shall be entitled to
(i) terminate in writing this Agreement effective as of the date designated by
Owner (which may be the date upon which notice is given) and/or (ii) pursue an
action for the actual compensatory damages incurred by Owner provided the
Manager's Event of Default has not then been cured or such cure has not
commenced and is not being diligently pursued. Owner expressly agrees that
termination of this Agreement and compensatory monetary damages are its sole
rights and remedies with respect to a Manager's Event of Default and Owner
expressly waives and releases all other rights and remedies, including, without
limitation, the right to seek equitable relief, including specific performance
or injunctive relief, and to sue for any consequential or punitive damages.

 

(c)           Owner's Event of Default. Owner shall be deemed to be in default
hereunder upon the happening of any of the following (an "Owner's Event of
Default"):

 

(i)   The failure by Owner to keep, observe or perform any covenant, agreement,
term or provision of this Agreement to be kept, observed or performed by Owner,
and such default shall continue for a period of thirty (30) days after written
notice thereof by Manager to Owner, or if such default cannot be cured within
such thirty (30) day period, then such additional period as shall be reasonable,
provided Owner commences to cure such default within such thirty (30) day period
and proceeds diligently to prosecute such cure to completion; or

 

16

 

 

(ii)   The making of a general assignment by Owner for benefit of its creditors,
the filing by Owner with any bankruptcy court of competent jurisdiction of a
voluntary petition under Title 11 of U.S. Code, as amended from time to time,
the filing by Owner of any petition or answer seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any present or future federal or state act or law relating to
bankruptcy, insolvency, or other relief for debtors, Owner being the subject of
any order for relief issued under such Title 11 of the U.S. Code, as amended
from time to time, or the dissolution or liquidation of Owner.

 

(d)           Remedies of Manager. Upon an Owner's Event of Default, Manager
shall be entitled to (i) terminate in writing this Agreement effective as of the
date designated by Manager which is at least ten (10) days after receipt of such
notice of termination by Owner provided the Owner's Event of Default has not
then been cured or such cure commenced, and/or (ii) pursue an action for the
actual compensatory damages incurred by Manager. Manager expressly agrees that
termination and compensatory monetary damages are its sole rights and remedies
with respect to an Owner's Event of Default and Manager expressly waives and
releases the right to seek equitable relief, including specific performance or
injunctive relief, and to sue for any consequential or punitive damages.

 

11.          Termination Rights. In addition to the termination right set forth
in Section 3 above, Manager and Owner shall have the following rights to
terminate this Agreement:

 

(a)           Termination By Owner Upon Manager's Event of Default. Upon a
Manager's Event of Default, Owner may terminate this Agreement as specified in
Section 10(b) of this Agreement.

 

(b)           Termination By Manager Upon Owner's Event of Default. Upon an
Owner's Event of Default, Manager may terminate this Agreement as specified in
Section l0(d) of this Agreement.

 

(c)           Termination Without Cause. Either Owner or Manager may terminate
this Agreement on ninety (90) days' prior written notice after the expiration of
the Initial Term, without cause. In addition, upon any sale of the Project, this
Agreement shall automatically terminate as of the closing date of such sale.

 

(d)           Effect of Termination Upon Payment of Fees. Upon the termination
of this Agreement for any reason, Manager shall be entitled to its earned, but
unpaid, fees as set forth in Section 4 of this Agreement, for the period prior
to the termination.

 

(e)           Final Accounting; Delivery of Project Upon Termination.

 

(i)   Within thirty (30) days after termination of this Agreement for any
reason, Manager shall:

 

(1)     deliver to Owner all funds (less final payroll and applicable fees),
checks, keys, Lease files, books and records and other Confidential Information;
and

 

17

 

 

 

(2)      Promptly leave the Project and cause Manager's employees to leave the
Project without causing any damage thereto.

 

(ii)   Within ninety (90) days' after termination of this Agreement, Manager
shall deliver to Owner a final accounting for the Project, reflecting the
balance of income and expenses thereon as of the date of termination.

 

(iii)  Termination of this Agreement under any of the prov1s1ons of this
Agreement shall not release either party as against the other from liability for
failure to perform any of its duties or obligations as expressed herein and
required to be performed prior to such termination. Owner agrees to cooperate
with Manager in the performance of the obligations set forth in this Section
1l(e).

 

12.          Confidentiality.

 

(a)           Preservation of Confidentiality. In connection with the
performance of its obligations hereunder, Manager acknowledges that it will have
access to Confidential Information. Manager shall treat such Confidential
Information as proprietary to Owner and private, and shall preserve the
confidentiality thereof and not disclose, or cause or permit its employees,
agents or contractors to disclose, such Confidential Information.
Notwithstanding the foregoing, Manager shall have the right to disclose
Confidential Information if and only to the extent it has become public
knowledge, but not due to the actions of Manager, or Manager is required by
court order to disclose any Confidential Information. IfManager or anyone to
whom Manager transmits Confidential Information pursuant to this Agreement
becomes legally compelled to disclose any of the Confidential Information,
Manager shall provide Owner with prompt notice thereof so that Owner may seek a
protective order or other appropriate remedy or waive compliance with the
provisions of this Agreement. In the event that such protective order or other
remedy is not obtained by Owner or Owner waives compliance with the provisions
of this Agreement, Manager shall furnish or cause to be furnished only that
portion of the Confidential Information which Manager is required by Applicable
Law to furnish, and will exercise commercially reasonable efforts to obtain
reliable assurances that confidential treatment is accorded the Confidential
Information so furnished.

 

(b)           Property Right in Confidential Information. All Confidential
Information shall remain the property of Owner and Manager shall have no
ownership interest therein.

 

13.          Survival of Agreement. All indemnity obligations set forth herein,
all obligations to pay earned and accrued fees and expenses, all confidentiality
obligations, and all obligations to perform accrued prior to the date of
termination shall survive the termination of this Agreement.

 

14.          Enforcement of Agreement. This Agreement, its interpretation,
performance and enforcement, and the rights and remedies of the parties hereto,
shall be governed and construed by and in accordance with the law of the State
in which the Project is located. In any dispute pertaining to, or litigation or
arbitration arising from the enforcement or interpretation of the provisions of
this Agreement, the prevailing party shall be entitled to recover its reasonable
attorney's fees and costs actually incurred, including those incurred in
connection with all appellate levels, bankruptcy, mediation or otherwise to
maintain such action, from the losing party.

 

18

 

 

15. Assignment. Manager shall not sell, directly or indirectly, assign or
otherwise transfer by operation of law or otherwise all or any part of its
rights or obligations under this Agreement, except, with Owner's consent, to an
Affiliate of Manager or to any lender of Manager as collateral security for any
and all borrowings of Manager and/or any of its Affiliates, and any such
unauthorized assignment shall be void ab initio and of no effect. A change in
the ownership of Manager shall not constitute an assignment, provided that the
Key Individuals (as defined in the Operating Agreement), or any of them, remain
in control of the day to day operations of Manager with respect to the Project.

 

16.          Use of Trademark. If at any time the Project shall be promoted and
branded using the name "ARIUM" (the "Trademark"), as elected by Owner in its
sole discretion, Owner shall grant (or cause to be granted} to Manager a
non-exclusive, royalty-free license to use (but not the right to sublicense) the
Trademark for such purpose, until the earlier of (i) the dissolution and
termination of the Agreement or (ii) the date on which Owner elects, in its sole
discretion, to brand the Project using a different name. Owner and certain of
its Affiliates retain ownership of and the right to use (and to license) the
Trademark in connection with any and all matters. At no time during the term of
the Agreement shall any value be placed upon the Trademark by Manager or the
right to its use, or the goodwill, if any, attached thereto. Upon the
dissolution of the Agreement, neither the Trademark nor the right to its use,
nor the goodwill, if any, attached thereto shall be considered as an asset of
the Manager, unless otherwise licensed or sublicensed to Manager by Affiliates
of Owner having a right to so license or sublicense the Trademark.

 

17.   Notices. All notices, demands, requests or other communications to be sent
by one party to the other hereunder or required by Applicable Law shall be in
writing and shall be deemed to have been validly given or served by delivery of
same in person to the addressee, by depositing same with a nationally recognized
overnight delivery service such as Federal Express for next business day
delivery ("Overnight Delivery") or by sending by facsimile transmission,
addressed as follows:

 

If to Owner: c/o Bluerock Real Estate, L.L.C.     712 Fifth Avenue, 9th Floor
New
York, New York 10019 Attention:
Jordan B. Ruddy Facsimile No.
(646) 278-4220         with copies to: c/o Bluerock Real Estate, L.L.C.     712
Fifth Avenue, 9th Floor New
York, New York 10022 Attention:
Michael Konig, Esq. Facsimile
No. (646) 278-4220  

 

19

 

 

And: c/o Carroll Organization, LLC 3340     Peachtree Road, Suite 1620    
Atlanta, Georgia 30326 Attention:
M. Patrick Carroll Facsimile No.
(404) 523-9372         If to Manager: Carroll Management Group, LLC.     c/o
Carroll Organization, LLC 3340
Peachtree Rd, NE Suite 2250     Atlanta, GA 30326 Attn:
Linda Masterson     Facsimile No. 404-806-4266  

 

All notices shall· be effective upon such personal delivery, upon being
deposited in Overnight Delivery or upon facsimile transmission as required
above. However, with respect to notices so deposited in Overnight Delivery, the
time period in which a response to any such notice, demand or request must be
given shall commence to run from the next business day following any such
deposit in Overnight Delivery. Notices delivered via facsimile will be effective
upon sender's receipt of confirmation of transmission. A party may change its
address for notice purposes by giving to the other party hereto at least fifteen
(15) days' prior written notice in accordance with the provisions hereof.

 

18.          Miscellaneous.

 

(a)           Captions. The captions of this Agreement are inserted only for the
purposes of convenient reference and do not define, limit or prescribe the scope
or intent of this Agreement or any part hereof.

 

(b)           Amendments. This Agreement cannot be amended or modified except by
another agreement in writing, signed by both Owner and Manager.

 

(c)           Entire Agreement. This Agreement embodies the entire understanding
of the parties, and there are no further agreements or understandings, written
or oral, in effect between the parties relating to the subject matter hereof.

 

(d)           Time is of Essence. Time is the essence hereof.

 

(e)           Construction of Document. This Agreement has been negotiated at
arms' length and has been reviewed by counsel for the parties. No provision of
this Agreement shall be construed against any party based upon the identity of
the drafter.

 

(f)            Severability. If any provision of this Agreement or the
application thereof is held to be invalid or unenforceable, such defect shall
not affect other provisions or applications of this Agreement that can be given
effect without the invalid or unenforceable provisions or applications, and to
this end, the provisions and applications of this Agreement shall be severable.

 

20

 

 

(g)           Waiver of Jury Trial. To the fullest extent permitted by
Applicable Law, each party to this agreement severally, knowingly, irrevocably
and unconditionally waives any and all rights to trial by jury in any action,
suit or counterclaim brought by any party to this Agreement arising in
connection with, out of or otherwise relating to this Agreement.

 

(h)           No Continuing Waiver. No waiver by a party hereto of any breach of
this Agreement shall be effective unless in a writing executed by such party. No
waiver shall operate or be construed to be a waiver of any subsequent breach.

 

(i)            Terrorism and Money Laundering: Owner and Manager mutually
represent and warrant to each other as follows:

 

(i)   They are not now nor will they be at any time following the execution of
this Agreement a Person with whom a U.S. Person is prohibited from transacting
business of the type contemplated by this Agreement, whether such prohibition
arises under U.S. law, regulation, executive orders and lists published by the
Office of Foreign Asset Control ("OFAC") (including those executive orders and
lists published by OFAC with respect to Specially Designated Nationals and
Blocked Persons) or otherwise (such persons being referred to in this Agreement
as "Prohibited Persons"); and

 

(ii)   They have made reasonable inquiry and taken such other steps, consistent
with best industry practices (including conducting background searches and
checking published lists of Prohibited Persons) and in any event as required by
Applicable Law, to ensure that no Person who is an employee of their respective
organization or who owns an interest in their respective organization is now, or
will be at any time following the execution of the Agreement, a Prohibited
Person.

 

(j) Governing Law. It is the express intention of Manager and Owner that the
laws of the State of Florida shall govern the validity, interpretation,
construction and performance of this Agreement, excluding any conflict-of-law
rules which would direct the application of the law of another jurisdiction.
Each of the parties hereto irrevocably submits to the jurisdiction of the New
York State courts and the Federal courts sitting in the State of New York and
agrees that all matters involving this Agreement shall be heard and determined
in such courts. Each of the parties hereto waives irrevocably the defense of
inconvenient forum to the maintenance of such action or proceeding. Each of the
parties hereto designates CT Corporation System, 1633 Broadway, New York, New
York 10019, as its agent for service of process in the State of New York, which
designation may only be changed on not less than ten (10) days' prior notice to
all of the other parties.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

21

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement under seal as of
the date first set forth above.

 

OWNER:

 

  BR CARROLL LANSBROOK, LLC, a Delaware limited liability company         By:
/s/ Jordan B. Ruddy   Name: Jordan B. Ruddy   Title: Chief Executive Officer

 

MANAGER:

 

  CARROLL MANAGEMENT GROUP, LLC, a Georgia limited liability company         By:
/s/ M. Patrick Carroll   Name: M. Patrick Carroll   Title: President and CEO

 

Exhibits:

 

Exhibit A - Property Description

Exhibit B -2014 Annual Business Plan

Exhibit C - Reimbursable Expenses

Exhibit D - Form of Lease

Exhibit E - Additional Business Plan Information

Exhibit F- Statements and Reports

 

22

 

 

EXHIBIT "A"

 

Project Legal Description

 

[See Attached]

 

A-1

 

 

EXHIBIT A

 

PARCEL I:

 

UNITS as shown on Exhibit ''A" LEGAL DESCRIPTION being in the following:

 

LANSBROOK VILLAGE CONDOMINIUM, a Condominium according to the Declaration of
Condominium thereof, as recorded in O.R. Book 14696, Pages 673 through 874,
inclusive and according to the Plat thereof recorded in Condominium Book 139,
Pages 42 through 62, inclusive and all amendments thereof, of the Public Records
of Pinellas County, Florida, together with an undivided interest in the common
elements for each unit described in Exhibit "A" LEGAL DESCRIPTION.

 

PARCEL 2:

Easements in and to the common areas, as more particularly defined and described
in the Declaration of Covenants, Conditions, Restrictions and Easements for The
Villages at Lansbrook (The "Villages at Lansbrook Declaration, recorded December
17, 1999, in O.R. Book 10758, Page 763, as further supplemented by the document
recorded in

O.R. Book 10758, Page 855, as further supplements by the document recorded in
O.R Book 11378, Page 120 and as Amended and Restated by Amended and Restate
Declaration of Covenants, Conditions, Restrictions and Easements for Village of
Lansbrook, recorded in O.R. Book 12489, Page 234 l, Second Amended and Restate
Declaration of Covenants, Conditions, Restrictions and Easements for Villages of
Lansbrook recorded October 4, 2004, in 0.R

Book 13864, Page 2510, all of the Public Records of Pinellas County, Florida.
LESS and EXCEPT those easement

areas created under the aforementioned documentation that are located within
Parcel l described above.

 

PARCEL 3:

Drainage and retention easements over the drainage area more particularly
described and defined in the Declaration of Drainage Easements and Maintenance
Agreement (the "Drainage Declaration") recorded October 15, 1993, in O.R Book
8437, Page 1145, as modified by O.R..Book 9109, Page 1086 and as supplemented by
document recorded in O.R. Book 11378, Page 111, all of the Public Records of
Pinellas County, Florida.

 

A-2

 

 

EXHIBIT "A" LEGAL DESCRIPTION

 

PARCEL 1:

 

Cambridge Village "C" Units

 

C1-101 C1-103 C1-104 C1-106 C1-201 C1-202 C1-205 C1-206

C2-101 C2-103 C2-104 C2-201 C2-202 C3-101 C3-102 C3-104 C3-105 C3-106 C3-201
C3-202 C3-203 C3-204 C3-205 C4-101 C4-102 C4-103 C4-104 C4-201 C4-203 C4-204
C5-104 C5-105 C5-106 C5-202 C5-203 C5-205 C5-206 C6-101 C6-102 C6-103 C6-104
C6-201 C6-203 C6-204 C7-104 C7-105 C7-106 C7-201 C7-202 C7-204 C7-206 CB-101
CB-104 CB-201 CB-203 CB-204 C9-101 C9-102 C9-103 C9-104 C9-201 C9-202

C9-203 C9-204 C10-102 C10-103 C10-104 C10-105 C10-106 C10-201 C10-202 C10-203
C10-205 C10-206 C11-101 C11-102 C11-103 C11-201 C11-202 C11-203 C12-101 C12-104
C12-201 C12-203 C13-101 C13-102 C13-104 C13-201 C13-203 C13-204 C14-102 C14-104
C14-201 C14-202 C14-204 C15-101 C15-102 C15-104 C15-201 C15-202 C15-204 C16-101
C16-102 C16-104 C16-201 C16-202 C16-203 C16-204 C17-103 C17-104 C17-201 C17-202
C17-203 C17-204 C18-101 C18-102 C18-103 C18-104 C18-201 C18-202 C18-203 C18-204
C19-104 C19-201 C19-203 C19-204 C20-101 C20-104 C20-201 C20-204 C21-101 C21-102
C21-103 C21-104 C21-201 C21-202 C21-203 C22-103 C22-104 C22-105 C22-106 C22-204
C22-205 C22-206 C23-101 C23-102 C23-103 C23-104 C23-105 C23-106 C23-201 C23-202
C23-203 C23-204 C23-205 C23-206 C24-101 C24-102 C24-103 C24-201 C24-203 C24-204
C25-101 C25-102 C25-104 C25-105 C25-201 C25-203 C25-204 C25-205 C25-206 C26-101
C26-102 C26-104 C26-201 C26-203 C26-204

 

Hampton Village "H" Units

 

H1-102 H1-103 H1-104 H1-106 H1-107 H1-108 H2-101 H2-103 H2-104 H2-105 H2-106
H2-108 H3-103 H3-104 H3-105 H3-106 H3-107 H4-101 H4-106 H5-103 H5-104 H6-101
H6-102 H6-107 H6-108 H6-201 H6-202 H6.:203 H6-204 H6-207 H6-208 H6-301 H6-302
H6-303 H6-304 H6-305 H6-306 H6-307 H6-308 H7-102 H7-103 HB-101 HB-103 H9-102
H9-103

H9-104 H9-105 H9-106 H9-107 H9-108 H10-101 H10-102 H10-103 H10-106

H10-107 H10-108 H10-203 H10-204 H10-205 H10-206 H10-207 H10-301 H10-302 H10-304
H10-306 H10-307 H10-308 H11-103 H11-105 H11-106 H11-107 H11-108 H11-109 H12-101
H12-102 H12-103 H12-104 H12-105 H12-106 H12-107 H12-108 H12-201 H12-202 H12-203
H12-205 H12-206 H12-207 H12-208 H12-301 H12-302 H12-304 H12-305 H12-306 H13-103
H13-104 H13-105 H14-101 H14-102 H14-104 H14-105 H15-101 H15-106 H15-108 H16-104
H16-105 H16-106 H16-107 H16-108 H16-201 H16-202 H16-203 H16-204 H16-205 H16-206
H16-207 H16-208 H16-301 H16-302 H16-304 H16-306 H16-307 H16-308 H17-102 H17-104
H17-105 H17-106 H17-107 H18-101 H18-102 H18-103 H18-104 H18-105 H18-106 H18-108
H19-102 H19-103 H19-104 H19-105 H19-106 H20-101 H20-102 H20-103 H20-104 H20-105
H21-103 H21-105 H21-107 H21-108 H21-109 H21-110 H22-103 H22-104 H22-106 H22-107
H22-108 H22-109 H22-110 H23-101 H23-102 H23-103 H23-104 H23-105 H23-106 H24-101
H24-102 H24-103 H24-105 H24-108 H23-109

 

A-3

 

 

Windsor Village 'W" Units

 

W1-101 W1-204 W2-104 W2-201 W2-203 W3-101 W3-201 W3-202 W3-203 W3-204 W4-102
W4-104 W4-204 W5-101 W5-104 W6-101 W6-102 W6-104 W6-203 W6-204 W7-101 W7-103
W7-104 W7-201 W7-202 W7-203 W7-204 WB-101 WB-102 WB-104 WB-201 WB-202 WB-204
W9-104 W9-105 W10-101

W10-103 W10-105 W11-104 W11-106 W12-101 W12-103 W12-104 W12-105 W12-106

W13-102 W13-105 W13-106 W14-102 W14-103 W14-104 W15-101 W15-102 W15-103 W15-104
W15-105 W15-106 W16-102 W16-103 W16-104 W16-105 W17-101 W17-103 W18-101 W18-102
W18-103 W18-104 W18-201 W18-202 W18-203 W18-204 W19-101 W19-201 W19-204 W20-102
W20-103 W20-104 W20-203 W21-101 W21-102 W21-103 W21-201 W21-202 W21-204 W22-101
W22-102 W22-103 W22-104 W22-202 W22-203 W22-204 W23-101 W23-102 W23-104 W23-202
W23-203 W24-101 W24-102 W24-103 W24-104 W24-202 W24-203 W24-204 W25-101 W25-102
W25-103 W25-104 W25-203 W26-101 W26-102 W26-103 W26-104 W26-201 W26-202 W27-202
W28-102 W28-103 W28-202 W28-203 W29-102 W29-103 W30-101 W30-102 W30-201 W31-101
W31-103 W31-104 W32-101 W32-103 W33-101 W33-104 W34-101 W34-105 W35-101 W35-102
W35-104 W35-105 W35-106 W36-103 W36-106 W37-101 W37-102 W34-103 W37-104 W37-105
W38-101 W38-104 W38-106 W39-101 W39-105 W40-101 W41-101 W41-102 W41-103 W41-104

 

C19-102 CB-202 C20-103 C25-103 CS-204 CB-103 C10-101 C12-102 C12-202 C19-103

 

H6-206 H10-201 H10-303 H11-110 H15-102 H15-104 H15-110 H16-305 H22-105 H1-105
HS-101 H6-104 H16-103 H6-106 H17-103 H22-101

 

W3-102 W1-201 WS-201 WS-204 W?-102 W10-104 W12-102 W16-101 W19-102

W19-104 W21-104 W27-203 W28-101 W28-104 W28-204 W29-204 W30-103 W11-101 W10-102
W36-105 W26-204 W27-201 W36-102 WB-203 W20-101 W33-106 W25-204 W27-102

 

C1-102 H10-105 W1-102 W2-102 W10-106 W25-201

H3-101 H23-107 W1-103 W4-203 W21-203 W29-104 W33-103 W34-102 W36-101

 

W2-204

 

A-4

 

 

EXHIBIT "B"

 

Calendar Year 2014

Annual Business Plan

 

[See Attached]

 

B-1

 

 

Lansbrook Village  RESIDENTIAL OPERATING BUDGET   PRINTED 3/21/2014  # of Units
     571  CARROLL MANAGEMENT GROUP              Leasable SF 662225     
Mar-2014   Apr-2014   May'2014   Jun-2014   Jul-2014   Aug-2014   Sep-2014  
Oct-2014   Nov-2014   Dec-2014   Jan-2015   Feb-2015   TOTAL   $/SQFT   $/UNIT  
%OF GROSS                                                                      
   OCCUPANCY PERCENTAGE   93.17%   92.99%   93.17%   92.64%   92.64%   92.82% 
 92.99%   93.17%   93.17%   92.99%   92.64%   92.82%   92.94%               
REVENUE:                                                                     
              4310-0000  MARKET RENT PER SCHEDULE   619,266    624,976  
 628,973    638,680    638,680    638,680    648,387    648,387    648,387  
 648,387    648,387    648,387    7,679,577    11.60    13,449    102.35%
4320-0000  LEASES OVER/UNDER SCHEDULE   (3,940)   (8,393)   (10,897)   (18,878) 
 (16,650)   (14,530)   (22,365)   (20,093)   (17,948)   (15,987)   (14,124) 
 (12,353)   (176,159)             -2.35%    GROSS POTENTIAL RENT   615,326  
 616,583    618,076    619,802    622,030    624,150    626,022    628,294  
 630,439    632,400    634,263    636,034    7,503,418    11.33    13,141  
 100.00%                                                                       
                                                                               
                   5220-0000  VACANCY LOSS   42,028    43,193    42,215  
 45,590    45,753    44,816    43,854    42,913    43,060    44,301    46,653  
 45,670    530,047              7.06% 6312-0000  ADMINISTRATIVE UNITS   3,975  
 3,975    3,975    3,975    3,975    3,975    3,975    3,975    3,975    3,975  
 3,975    3,975    47,700              0.64%                                    
                                                 6370-0000  BAD DEBT   2,054  
 2,054    2,054    2,054    2,054    2,054    2,054    2,054    2,054    2,054  
 2,054    2,054    24,648              0.33% 6370-0001  BAD DEBT RECOVERY 
 (650)   (650)   (650)   (650)   (650)   (650)   (650)   (650)   (650)   (650) 
 (650)   (650)   (7,800)                5250-0000  LOST RENT- CONCESSIONS 
 1,200    1,200    1,200    1,200    1,200    1,200    1,200    1,200    1,200  
 1,200    1,200    1,200    14,400              0.19%    TOTAL RENTAL LOSSES 
 48,607    49,772    48,794    52,169    52,332    51,395    50,433    49,492  
 49,639    50,880    53,232    52,249    608,995    0.92    1,067    8.12%      
                                                                              
   NET RENTAL  INCOME   566,720    566,811    569,282    567,633    569,697  
 572,754    575,589    578,801    580,800    581,520    581,030    583,785  
 6,894,423    10.41    12,074    91.88% OTHER INCOME:                          
                                                      5990-0040  GARAGE INCOME 
                                                                 $     <=PER
UNIT PER MONTH  5990-0045  STORAGE UNIT INCOME                               
                                                                               
                                                      5910-0010  MONTH TO MONTH
FEES        -                             -                                     
    5910-0000  LAUNDRY INCOME                                      -            
               $     <=PER UNIT PER MONTH  5910-0002  VENDING INCOME        -  
      -                   -                                          5910-0004 
ADMINISTRATIVE FEES   2,600    2,700    2,900    3,000    3,300    3,500  
 3,100    3,000    2,900    2,600    2,500    2,800    34,900                   
                                                                             
    5920-0000  LATE CHARGES   2,177    2,177    2,177    2,177    2,177  
 2,177    2,177    2,177    2,177    2,177    2,177    2,177    26,124       
         5920-0002  NSF CHARGES   150    150    150    150    150    150  
 150    150    150    150    150    150    1,800                                
                                                                     5920-0003 
CLEANING & DAMAGE FEES   250    250    250    250    250    250    250    250  
 250    250    250    250    3,000   $8.50    <=PER UNIT TURNED     FORFEITED
DEPOSIT   1,100    1,100    1,100    1,100    1,100    1,100    1,100    1,100  
 1,100    1,100    1,100    1,100    13,200   $1.93    <=PER UNIT PER MONTH 
5990-0001  CORPORATE UNITS                                                   
      -                      5990-0002  LEGAL FEES   1,000    1,000    1,000  
 1,000    1,000    1,000    1,000    1,000    1,000    1,000    1,000    1,000  
 12,000                                                                        
                             5990-0003  PET FEES   6,155    6,155    6,155  
 6,155    6,155    6,155    6,155    6,155    6,155    6,155    6,155    6,155  
 73,860                 5990-0004  TERMINATION FEES   5,000    5,000    5,000  
 5,000    5,000    5,000    5,000    5,000    5,000    5,000    5,000    5,000  
 60,000                    GARAGE I CARPORT INCOME   4,200    4,200    4,200  
 4,200    4,200    4,200    4,200    4,200    4,200    4,200    4,200    4,200  
 50,400                    STORAGE UNIT INCOME                               
                                                 5990-0005  APPLICATION FEES 
 1,430    1,485    1,595    1,650    1,815    1,925    1,705    1,650    1,595  
 1,430    1,375    1,540    19,195                 5990-0006  WASHER/DRYER
COLLECTIONS                            -                             -       
              5990-0008  UTILITY COLLECTIONS   5,340    5,320    5,310  
 5,320    5,290    5,290    5,300    5,310    5,320    5,320    5,310    5,290  
 63,720                                                                        
                             5990-0009  CABLE TV COLLECTIONS           
 11,883    -         12,127              11,669              11,771    47,450  
              5990-0099  MISCELLANEOUS INCOME   500    500    500    500  
 500    500    500    500    500    500    500    500    6,000                
   TOTAL OTHER INCOME   29,902    30,037    42,220    30,502    30,937  
 43,374    30,637    30,492    42,016    29,882    29,717    41,933    411,649  
 0.62    721    5.49%                                                        
                                TOTAL REVENUE   596,622    596,848    611,502  
 598,135    600,634    616,128    606,226    609,293    622,816    611,402  
 610,747    625,718    7,306,072    11    12,795    97.37%

 

B-2

 

 

Lansbrook Village  RESIDENTIAL OPERATING BUDGET   PRINTED 3/21/2014  # of Units 
571  CARROLL MANAGEMENT GROUP              Leasable SF  662225  Mar-2014  
Apr-2014   May-2014   Jun-2014   Jul-2014   Aug-2014   Sep-2014   Oct-2014  
Nov-2014   ·Dec-2014   Jan-2015   Feb-2015   TOTAL   $/SQFT   $/UNIT   %OF
GROSS                                                                      
PERSONNEL COSTS:                                                             
                   6310-0000  SALARIES· ADMINISTRATIVE   23,916    19,736  
 19,736    25,424    19,736    23,916    19,736    19,736    19,736    19,736  
 25,424    23,916    260,748                 6330-0000  SALARIES ·MANAGER      
                                                                         
6280-0000  SALARIES· RECREATIONAL             -                                
                                  6280-0001  SALARIES ·NETWORK CENTER        .  
                     .                                               6540-0000 
SALARIES· MAINTENANCE   14,898    14,898    14,898    22,346    14,898  
 14,898    14,898    14,898    14,898    14,898    22,346    14,898    193,669  
              6270-0000  COMMISSIONS & BONUS   5,500    5,500    5,500  
 5,500    5,500    5,500    5,500    5,500    5,500    5,500    5,500    5,500  
 66,000    15%  <=% OF GROSS SALARIES  6331-0000  MANAGER & OFFICE APARTMENTS 
      .                                                                       
6521-0000  MAINTENANCE APARTMENTS        .                                     
                                  6711-0000  PAYROLL TAXES   6,070    5,482  
 5,482    7,330    5,482    6,070    5,482    5,482    5,482    5,482    7,330  
 6,070    71,243                 6722-0000  WORKERS COMPENSATION   1,108  
 1,077    1,077    1,462    1,077    1,112    1,077    1,077    1,077    1,077  
 1,462    1,112    13,795                 6723-0000  HEALTH INS & OTHER
BENEFITS   3,740    3,740    3,740    3,740    3,740    3,740    3,740  
 3,740    3,740    3,740    3,740    3,740    44,880                           
                                                                            
TOTAL SALARIES & PERSONNEL   55,231    50,433    50,433    65,802    50,433  
 55,235    50,433    50,433    50,433    50,433    65,802    55,235    650,334  
 0.98    1,139    8.67% ADMINISTRATIVE EXPENSES                               
                                                 6290-0001  DUES AND
SUBSCRIPTIONS   101,466    100,966    100,966    100,966    100,966    100,966  
 100,966    100,966    100,966    100,966    100,966    100,966    1,212,096  
$176.90    <=PER UNIT PER MONTH  6311-0000  OFFICE SUPPLIES   570    570  
 570    570    570    570    570    570    570    570    570    570    6,840  
              6311-0001  OFFICE EQUIPMENT   603    603    603    603    603  
 603    603    603    603    603    603    603    7,236                
6311-0002  COURIER SERVICE   50    50    50    50    50    50    50    50  
 50    50    50    50    600                 6311-0003  ADMINISTRATION-FORMS 
 75    75    75    75    75    75    75    75    75    75    75    75    900  
              6311-0004  CREDIT COLLECTION & EVICTION   1,085    1,085  
 1,085    1,085    1,085    1,085    1,085    1,085    1,085    1,085    1,085  
 1,085    13,020   $1.90    <=PER UNIT PER MONTH  6311-0005  UNIFORMS   3,229  
 (521)   (21)   (521)   (521)   3,229    (521)   (521)   479    (521)   (521) 
 (521)   2,748                 6311-0006  COMMUNICATIONS   1,370    1,370  
 1,370    1,370    1,370    1,370    1,370    1,370    1,370    1,370    1,370  
 1,370    16,440   $2.40    <=PER UNIT PER MONTH  6390-0020  RENT REVENUE
SYSTEM   1,568    1,568    1,568    1,568    1,568    1,568    1,568    1,568  
 1,568    1,568    1,568    1,568    18,810                 6390-0004 
YARDl/COMPUTER   1,020    1,020    1,020    1,020    1,020    1,020    1,020  
 1,020    1,020    1,020    1,020    1,020    12,240                 6390-0015 
WEBSITE/RESIDENT PORTAL   3,127    627    627    627    627    627    627  
 627    627    627    627    627    10,024                 6390-0007  TRAINING &
TRAVEL   250    550    250    250    550    250    250    550    750    250  
 550    500    4,950                 6390-0099  MISCELLANEOUS ADMIN. EXP   150  
 150    150    150    150    150    150    150    150    150    150    150  
 1,800                 6390-0098  BANK FEES   300    300    300    300    300  
 300    300    300    300    300    300    300    3,600                
5099-0500  Shared Office Reimbursement   2,985    2,985    2,985    2,985  
 2,985    2,985    2,985    2,985    2,985    2,985    2,985    2,985  
 35,820                    TOTAL ADMINISTRATIVE EXP.   117,848    111,398  
 111,598    111,098    111,398    114,848    111,098    111,398    112,598  
 111,098    111,398    111,348    1,347,124    2.03    2,359    17.95%
MARKETING  EXPENSE                                                             
                   6210-0002  OUTDOOR ADVERTISING   1,100    800    500    500  
 800    500    1,100    800    500    500    800    500    8,400'            
    6210-0003  INDUSTRY MAG/INTERNET   4,715    4,715    4,715    4,715  
 4,715    4,715    4,715    4,715    4,715    4,715    4,715    4,715  
 56,580                 6210-0015  RESIDENT RELATIONS   700    700    700  
 700    700    700    700    700    700    700    700    700    8,400       
         6210-0099  BROCHURES/COLLATERAL   4,000    1,000    2,000    300       
 2,000    300              2,000    300         11,900                
6250-0001  REFERRAL FEES   50    50    50    50    50    50    50    50    50  
 50    50    50    600                 6251-0000  RECREATION EXPENSE   50  
 50    50    50    50    50    50    50    50    50    50    50    600       
         6260-0001  MINI ·MODEL EXPENSE   100    100    100    100    100  
 100    100    100    100    100    100    100    1,200                      
                                                                              
   TOTAL MARKETING EXPENSE   10,715    7,415    8,115    6,415    6,415  
 8,115    7,015    6,415    6,115    8,115    6,715    6,115    87,680    0.13  
 154    1.17%

 

B-3

 

 

Lansbrook Village  RESIDENTIAL OPERATING BUDGET   PRINTED 3/21/2014 # of Units 
571  CARROLL MANAGEMENT GROUP             Leasable SF  662225  Mar-2014  
Apr-2014   May-2014   Jun-2014   Jul-2014   Aug-2014   Sep-2014   Oct-2014  
Nov-2014   Dec-2014   Jan-2015   Feb-2015   TOTAL   $/SQFT   $/UNIT   %OF GROSS
                                                                    REPAIRS &
MAINTENANCE EXPENSE                                                             
                 6525-0001  INTERIOR DOORS EXPENSE   1,000    1,000    1,000  
 1,000    1,000    1,000    1,000    1,000    1,000    1,000    1,000    1,000  
 12,000               6536-0000  LANDSCAPING SUPPLIES                          
 -         -         -    -    -    -               6541-0001  ELECTRICAL
SUPPLIES   2,000    2,000    2,000    2,000    2,000    2,000    2,000  
 2,000    2,000    2,000    2,000    2,000    24,000               6541-0002 
PLUMBING SUPPLIES/REPAIRS   2,000    2,000    2,000    2,000    2,000    2,000  
 2,000    2,000    2,000    2,000    2,000    2,000    24,000              
6541-0003  APPLIANCE PARTS   1,000    1,000    1,000    1,000    1,000  
 1,000    1,000    1,000    1,000    1,000    1,000    1,000    12,000       
       6541-0005  GLASS\SCREENS/MIRRORS   2,000    2,000    2,000    2,000  
 2,000    2,000    2,000    2,000    2,000    2,000    2,000    2,000  
 24,000               6541-0099  OTHER MAINTENANCE MATERIALS   300    300  
 300    300    300    300    300    300    300    300    300    300    3,600  
            6542-0001  ROOF REPAIRS   50    50    50    50    50    50    50  
 50    50    50    50    50    600               6542-0004  FENCE REPAIRS I
GATES   150    150    150    150    150    150    150    150    150    150  
 150    150    1,800               6542-0005  LOCKS & KEYS   910    945  
 1,015    1,050    1,155    1,225    1,085    1,050    1,015    910    875  
 980    12,215               6542-0006  GUTTER/DOWNSPOUTS/REPAIRS   50    50  
 50    50    50    50    50    50    50    50    50    50    600              
6542-0007  PAVING/CONCRETE/STRIPING   50    50    50    50    50    50    50  
 50    50    50    50    50    600               6546-0001  HVAC PARTS &
SUPPLIES   3,020    3,020    3,020    3,020    3,020    3,020    3,020  
 3,020    3,020    3,020    3,020    3,020    36,240               6547-0000 
POOL EXPENSE                                                                  
            6548-0000  SNOW REMOVAL                                         
                                     6570-0000  EQUIPMENT VEHICLE EXPENSE 
 350    350    350    350    350    350    350    350    350    350    350  
 350    4,200               6590-0001  FIRE PROTECTION   150    150    150  
 7,000    150    1,500    150    150    150    150    150    150    10,000  
                                                                             
 -                                                                           
      -                                                                      
           -                  TOTAL REPAIRS & MAINTENANCE   13,030    13,065  
 13,135    20,020    13,275    14,695    13,205    13,170    13,135    13,030  
 12,995    13,100    165,855    0.25    290   2.21% CLEANING AND DECORATING 
                                                                            
6517-0000  CLEANING CONTRACT   2,835    3,045    3,045    3,255    3,045  
 3,150    3,255    3,150    3,150    2,730    2,625    3,150    36.435  
$103.22    <=PER UNIT TURNED 6515-0000  CLEANING SUPPLIES   100    100    100  
 100    100    100    100    100    100    100    100    100    1,200       
       6560-0002  FLOOR COVERING REPAIRS   1,360    1,360    1,360    1,360  
 1,210    1,210    1,210    1,210    1,210    1,360    1,360    1,360  
 15,570   $44.11    <=PER UNIT TURNED 6560-0003  CONTRACT PAINTING - INTERIOR 
 5,340    5,730    5,730    6,120    5,730    5,925    6,120    5,925    5,925  
 5,145    4,950    5,925    68,565   $194.24    <=PER UNIT TURNED 6561-0002 
PAINTING SUPPLIES   295    315    315    335    315    325    335    325  
 325    285    275    325    3,770               6560-0004  CARPET CLEANING 
 1,350    1,450    1,450    1,550    1,450    1,500    1,550    1,500    1,500  
 1,300    1,250    1,500    17,350   $49.15    <=PER UNIT TURNED 6561-0001 
COUNTERTOPS RESURFACED                  -              -                      
 -                    6561-0003  TUBS RESURFACED                               
                                               6561-0004  WALLPAPER & SUPPLIES 
                                                                 $     <=PER
UNIT TURNED 6560-0099  SHEETROCK REPAIR   262    262    262    262    262  
 62    262    262    262    262    262    262    3,144   $8.91    <=PER UNIT
TURNED                                                                       
           TOTAL CLEAN & DECORATING   11,542    12,262    12,262    12,982  
 12,112    12,472    12,832    12,472    12,472    11,182    10,822    12,622  
 146,034    0.22    256   1.95%

 

B-4

 

 

Lansbrook Village  RESIDENTIAL OPERATING BUDGET   PRINTED 3/21/2014  # of Units 
571  CARROLL MANAGEMENT GROUP              Leasable SF  662225  Mar-2014  
Apr-2014   May-2014   Jun-2014   Jul-2014   Aug-2014   Sep-2014   Oct-2014  
Nov-2014   Oec-2014   Jan-2015   Feb-2015   TOTAL   $/SQFT   $/UNIT   %OF GROSS 
CONTRACT SERVICES                                                             
                   6317-0001  CONTRACT COMMON AREA CLEANING   400    400  
 400    400    400    400    400    400    400    400    400    400    4,800  
              6460-0000  CONTRACT CABLE TV                                    
                                            6519-0000  CONTRACT EXTERMINATING 
                                                                  <=PER UNIT PER
MONTH  6530-0002  CONTRACT COURTESY PATROL                                    
                                            6531-0000  SECURITY RENT FREE APT 
                                                                              
6532-0000  INTRUSION ALARMS   200    200    200    200    200    200    200  
 200    200    200    200    200    2,400                 6537-0000  CONTRACT
YARDS & GROUNDS                                                             
      <=PER UNIT PER MONTH  6542-0000  CONTRACT REPAIRS        3,000    5,000  
                                              8,000                 6545-0001 
CONTRACT ELEVATOR                                                             
                   6546-0002  CONTRACT HVAC                                    
                                            6590-0099  LIFT STATION EXPENSE LIFT
STATION EXPENSE                                                             
                      TOTAL CONTRACT SERVICES   600    3,600    5,600    600  
 600    600    600    600    600    600    600    600    15,200    0.02    27  
 0.20% PROFESSIONAL FEES:                                                   
                             6320-0000  MANAGEMENT FEES   16,407    16,413  
 16,816    16,449    16,517    16,944    16,671    16,756    17,127    16,814  
 16,796    17,207    200,917         <=MONTHLY MINIMUM  6321-0000  MANAGEMENT
FEES - OTHER                                                                  
 2.75%   <=MANAGEMENT FEE %  6340-0000  PROFESSIONAL FEES                     
                                                           6350-0000  AUDIT
FEES                                                                            
    6351-0000  BOOKKEEPING FEES                                              
                    <=BK FEE $/UNIT/MON  6390-0002  AD VALOREM TAX SERVICE      
                                                                         
6790-0000  BUSINESS LICENSES & PERMITS                                         
                                          TOTAL PROFESSIONAL FEES   16,407  
 16,413    16,816    16,449    16,517    16,944    16,671    16,756    17,127  
 16,814    16,796    17,207    200,917    0.30    352    2.68% UTILITIES:    
                                                                  SQ.FT/YR  
 UNIT/MO       6450-0001  ELECTRICITY -VACANT   2,850    2,850    2,850  
 2,850    2,850    2,850    2,850    2,850    2,850    2,850    2,850    2,850  
 34,200    0.05            6450-0003  ELECTRICITY - COMMON   1,200    1,200  
 1,200    1,200    1,200    1,200    1,200    1,200    1,200    1,200    1,200  
 1,200    14,400    0.02            6451-0000  WATER AND SEWER   850    850  
 850    850    850    850    850    850    850    850    850    850    10,200  
 0.02            6453-0000  LAKE TREATMENT                                    
                                            6452-0001  GAS -VACANT           
                                                                     6452-0004 
GAS • LAUNDRY                                                                  
              6525-0000  TRASH                                              
                                     TOTAL UTILITY EXPENSE   4,900    4,900  
 4,900    4,900    4,900    4,900    4,900    4,900    4,900    4,900    4,900  
 4,900    58,800    0.09    103    0.78% TAXES & INSURANCE:                     
                                                           6710-0001  REAL
ESTATE TAXES   65,766    65,766    65,766    65,766    65,766    65,766  
 65,766    65,766    65,766    65,766    65,766    65,766    789,186    1.19  
 1,382    10.52% 6710-0002  PERSONAL PROPERTY TAX                               
                                              0.00% 6720-0000  HAZARD INSURANCE 
 13,417    13,417    13,417    13,417    13,417    13,417    13,417    13,417  
 13,417    13,417    13,417    13,417    161,000    0.24    282    2.15%
6721-0000  FIDELITY BOND INSURANCE                                              
                                     TOTAL TAXES & INSURANCE   79,182  
 791182    79,182    79,182    79,182    79,182    79,182    79,182    79,182  
 79,182    79,182    79,182    950,186    1.43    1,664    12.66% TOTAL
OPERATING EXPENSES   309,455    298,668    302,041    317,448    294,832  
 306,991    295,936    295,325    296,562    295,353    309,210    300,310  
 3,622,130    5.47    6,343    48.27% NET OPERATING INCOME   287,166  
 298,180    309,461    280,687    305,802    309,138    310,290    313,968  
 326,254    316,049    301,538    325,408    3,683,942    5.56    6,452  
 49.10% FINANCIAL  EXPENSES                                                   
                             6820-0001  INTEREST 1ST MORTGAGE                
                                                                6820-0002 
INTEREST 2ND MORTGAGE                                                        
                        6820-0003  INTEREST 3RD MORTGAGE                     
                                                           6850-0000  MORTGAGE
INSURANCE PREM.                                                             
                   6890-0000  DISTRIBUTION TO OWNER                          
                                                      5420-0005  INTEREST
REDUCTION                                                                       
         6890-0000  MISCELLANEOUS                                              
                                     TOTAL FINANCIAL EXPENSES                
                                                             0.00% MORTGAGE·
REPLACEMENT RESERVE                                                             
                   6900-0001  CAPITAL RESERVE WITHDRAWAL                     
                                                           6900-0002 
REPLACEMENT RESERVE DEP.   12,146    12,146    12,146    12,146    12,146  
 12,146    12,146    12,146    12,146    12,146    12,146    12,146    145,752  
              6900-0003  REPLACEMENT RESERVE W/D             (36,438)           
 (36,438)             (36,438)             (36,438)   (145,752)               
6900-0004  PRINCIPAL 1ST MORTGAGE,                                              
                                 

 

B-5

 

 

Lansbrook Village  RESIDENTIAL OPERATING BUDGET   PRINTED 3/21/2014  # of Units 
571  CARROLL MANAGEMENT GROUP              Leasable SF  662225  Mar-2014  
Apr-2014   May-2014   Jun-2014   Jul-2014   Aug-2014   Sep-2014   Oct-2014  
Nov-2014   Dec-2014   Jan-2015   Feb-2015   TOTAL   $/SQFT   $/UNIT   %OF GROSS 
                                                                     6900-0005 
PRINCIPAL 2ND MORTGAGE                                                        
                        6900-0006  PRINCIPAL 3RD MORTGAGE                     
                                                              TOTAL
MORTGAGE/RESERVE   12,146    12,146    (24,292)   12,146    12,146    (24,292) 
 12,146    12,146    (24,292)   12,146    12,146    (24,292)                
 0.00% RETURN TO OWNER                                                        
                        6901-0000  RETURN TO OWNER                          
                                                      CASH FLOW BEFORE CAPITAL
EXP.   275,020    286,034    333,753    268,541    293,656    333,430  
 298,144    301,822    350,546    303,903    289,392    349,700    3,683,942  
 5.56    6,452    49.10% CAPITAL EXPENSES                                    
                          0                    Working Capital Withdraw      
      -11081.17              -11081.17              -11081.17            
 -11081.17    -44324.68                 7005-0001  DISHWASHER   400       
 400         400         400         400         400         2,400            
    7005-0002  STOVES        350         350         350    .    350       
 350    .    350    2,100                 7005-0003  REFRIGERATORS   900       
 900         900         900         900         900         5,400            
    7005-0005  CEILING FANS                                                   
                             7005-0007  CARPET   11,729    11,729    11,729  
 10,827    10,827    10,827    10,827    10,827    10,827    10,827    10,827  
 10,827    132,627                 7005-0008  TILE        .                 
                                                      7005-0009  VINYL      
                                                                         
7005-0010  EQUIPMENT-OFFICE   13,500                                          
                13,500                 7005-0011  FURNITURE-OFFICE           
                                                                     7005-0012 
FURNITURE-MODEL/CLUB.                                                        
                        7005-0013  FURNITURE-OUTDOOR                          
                                                      7005-0014  HVAC CONDENSING
UNITS   2,750    2,750    2,750    3,850    3,850    3,850    3,300    2,750  
 '2,200    1,650    1,650    1,650    33,000                 7005-0015  MAJOR
WATER LINE REPLACEMENT                                                        
                        7005-0016  WATER HEATERS   350                      
 350                             350    1,050                 7005-0017  MAJOR
SEWER REPLACEMENT                                                             
                   7005-0018  PARKING AREA                                    
                                            7005-0019  SWIMMING POOL           
                                                                     7005-0020 
TENNIS COURTS                                                                  
              7005-0021  POOL DECKING                                         
                                       7005-0022  PERIMETER FENCING           
                                                                     7005-0023 
PLAYGROUND EQUIPMENT                                                        
                        7005-0024  MAINTENANCE EQUIPMENT                     
                                                           7005-0025  GOLF CART 
                                                                              
7005-0026  CLUBHOUSE RENOVATIONS                                              
                                  7005-0027  BALCONIES                          
                                                      7005-0028  GUTTERS/DOWN
SPOUTS                                                               .       
         7005-0029  BATH LIGHT FIXTURES                                         
                                       CAPITAL EXPENSES CONTINUED           
                                                                     7005-0030 
TUB AND TILE WALL REPLACEMENT                                                   
                             7005-0031  HANDICAP/ADA RENOV                     
                                                           7005-0032  BOILER &
PARTS REPLACEMENT                                                             
                   7005-0033  EXTERIOR LIGHTING & BREAKERS                     
                                                           7005-0034  KITCHEN
LIGHT FIXTURES                                                                  
              7005-0035  COUNTERTOPS                                 .       
           .    .    .                 7005-0036  SIGNAGE                     
                                         .                 7005-0037  ROOF
REPLACEMENT                                                                  
              7005-0038  OTHER BLDG IMPROVEMENTS                               
                                                 7005-0039  KITCHEN CABINETS 
                                                                              
7005-0040  BATH VANITIES                                                        
                        7005-0042  EXTERIOR DOOR REPLACEMENT                
                                                                7005-0043  LIFT
STATION PUMPS & ALARMS                                                        
                        7005-0044  MINI & VERTICAL BLINDS                     
                                                              TOTAL CAPITAL
REPLMENT   29,629    14,829    15,779    15,027    15,977    15,377    15,427  
 13,927    14,327    12,827    13,777    13,177    190,077    0.29    333  
 2.53% EXTRAORDINARY EXPENSES                                                   
                                REPLACEMENT RESERVE                          
                                    .                 7111-0010  MAJOR
LANDSCAPING                                                               .  
              7111-0004  PARKING AREA                                         
                     .                

 

B-6

 

 

Lansbrook Village  RESIDENTIAL OPERATING BUDGET   PRINTED 3/21/2014  # of Units 
571  CARROLL MANAGEMENT GROUP              Leasable SF  662225  Mar-2014  
Apr-2014   May-2014   Jun-2014   Jul-2014   Aug-2014   Sep-2014   Oct-2014  
Nov-2014   Dec-2014   Jan-2015   Feb-2015   TOTAL   $/SQFT   $/UNIT   %OF GROSS 
                                                                     7111-0043 
SIGNAGE                                                                       
         7111-0005  SIDEWALK REPLACEMENT                                    
                                            7111-0008  WINDOW REPLACEMENT      
                                                                         
7111-00006  ACCESS GATE                                                        
                        7111-0076  DOG PARK                                    
                                            7111-0060  POOL                     
                                                           7005-0060  FITNESS
CENTER EQUIPMENT                                                             
                   7111-0038  INTERIOR UNIT UPGRADES                          
                                                      7111-0910  CONSTRUCTION
SUPERVISION FEE                                                             
                      TOTAL EXTRAORDINARY EXPENSES                          
                               "              "    0.00% CASH FLOW AFTER
EXTRAORDINARY   245,391    271,206    317,974    253,515    277,680    318,053  
 282,717    287,896    336,220    291,076    275,615    336,524    3,493,865  
 5.28    6,119    46.56% PARTNERSHIP EXPENSES                               
                                                 8000-0000  PARTNERSHIP
EXPENSES                                                               0       
         8000-0010  PROFESSIONAL FEES                                 17500  
 4500                        22000                                          
                                         0                    TOTAL PARTNERSHIP
EXP   0    0    0    0    0    0    17500    4500    0    0    0    0    22000  
 0.03    39    0.29%                                                        
                             NET CASH FLOW   245,391    271,206    317,974  
 253,515    277,680    318,053    265,217    283,396    336,220    291,076  
 275,615    336,524    3,471,865    5.24    61080    46.27%

 

B-7

 

 

EXHIBIT "C"

 

Approved Reimbursable Expenses

 

1.license and permit fees, homeowner association fees and assessments, and all
other charges of any kind or nature by any governmental or public authority

 

2.Management Fees

 

3.advertising and marketing expenses, and leasing fees and commissions

 

4.legal, accounting, risk management, engineering, and other professional and
consulting fees and disbursements

 

5.accounts payable to contractors providing labor, materials, services, and
equipment to the Project

 

6.premiums for insurance paid with respect to the Project or the operations
thereof and costs and expenses associated with the administration thereof

 

7.resident improvements and replacements and segregated reserves therefore

 

8.maintenance and repair of the Project and all property and equipment used in
connection with the operation thereof

 

9.refunds of security or other deposits to residents and contracting parties

 

10.funds reserved for contingent or contested liabilities, real estate taxes,
insurance premiums, or other amounts not payable on a monthly basis

 

11.service contracts and public utility charges and assessments

 

12.personnel administration charges and pre-employment screening

 

13.payroll costs including, without limitation, those set forth in paragraph
5(h) of this Agreement

 

14.costs of credit reports, bank charges and like matters

 

15.incidental expenses incurred with respect to the performance of Manager's
obligations under this Agreement, including, without limitation: courier
services, postage, photocopies, signage, check printing, marketing expenses,
bank charges, telephone and answering services (which may be equitably allocated
on a prorata basis (based on the gross revenues of all properties against which
such charges are allocated) among the other properties managed by Manager).

 

C-1

 

 

EXHIBIT "D"

 

Approved form of Lease

 

[See attached]

 

D-1

 

 

[ex10-56pg01.jpg]

 

D-2

 

 

[ex10-56pg02.jpg]

 

D-3

 

 

[ex10-56pg03.jpg]

 

D-4

 

 

[ex10-56pg04.jpg]

 

D-5

 

 

[ex10-56pg05.jpg]

 

D-6

 

 

[ex10-56pg06.jpg]

 

D-7

 

 

[ex10-56pg07.jpg]

 

D-8

 

 

[ex10-56pg08.jpg]

 

D-9

 

 

[ex10-56pg09.jpg]

 

D-10

 

 

[ex10-56pg10.jpg]

 

D-11

 

 

[ex10-56pg11.jpg]

 

D-12

 

 

[ex10-56pg12.jpg]

 

D-13

 

 

[ex10-56pg13.jpg]

 

D-14

 

 

[ex10-56pg14.jpg]

 

D-15

 

 

[ex10-56pg15.jpg]

 

D-16

 

 

[ex10-56pg16.jpg]

 

D-17

 

 

[ex10-56pg17.jpg]

 

D-18

 

 

[ex10-56pg18.jpg]

 

D-19

 

 

[ex10-56pg19.jpg]

 

D-20

 

 

[ex10-56pg20.jpg]

 

D-21

 

 

[ex10-56pg21.jpg]

 

D-22

 

 

[ex10-56pg22.jpg]

 

D-23

 

 

[ex10-56pg23.jpg]

 

D-24

 

 

[ex10-56pg24.jpg]

 

D-25

 

 

[ex10-56pg25.jpg]

 

D-26

 

 

[ex10-56pg26.jpg]

 

D-27

 

 

[ex10-56pg27.jpg]

 

D-28

 

 

[ex10-56pg28.jpg]

 

D-29

 

 

[ex10-56pg29.jpg]

 

D-30

 

 

[ex10-56pg30.jpg]

 

D-31

 

 

[ex10-56pg31.jpg]

 

D-32

 

 

[ex10-56pg32.jpg]

 

D-33

 

 

[ex10-56pg33.jpg]

 

D-34

 

 

[ex10-56pg34.jpg]

 

D-35

 

 

[ex10-56pg35.jpg]

 

D-36

 

 

[ex10-56pg36.jpg]

 

D-37

 

 

[ex10-56pg37.jpg]

 

D-38

 

 

[ex10-56pg38.jpg]

 

D-39

 

 

[ex10-56pg39.jpg]

 

D-40

 

 

[ex10-56pg40.jpg]

 

D-41

 

 

[ex10-56pg41.jpg]

 

D-42

 

 

[ex10-56pg42.jpg]

 

D-43

 

 

[ex10-56pg43.jpg]

 

D-44

 

 

[ex10-56pg44.jpg]

 

D-45

 

 

[ex10-56pg45.jpg]

 

D-46

 

 

[ex10-56pg46.jpg]

 

D-47

 

 

[ex10-56pg47.jpg]

 

D-48

 

 

[ex10-56pg48.jpg]

 

D-49

 

 

[ex10-56pg49.jpg]

 

D-50

 

 

[ex10-56pg50.jpg]

 

D-51

 

 

[ex10-56pg51.jpg]

 

D-52

 

 

[ex10-56pg52.jpg]

 

D-53

 

 

[ex10-56pg53.jpg]

 

D-54

 

 

[ex10-56pg54.jpg]

 

D-55

 

 

[ex10-56pg55.jpg]

 

D-56

 

 

[ex10-56pg56.jpg]

 

D-57

 

 

[ex10-56pg57.jpg]

 

D-58

 

 

[ex10-56pg58.jpg]

 

D-59

 

 

[ex10-56pg59.jpg]

 

D-60

 

 

EXHIBIT E

 

Annual Business Plan Information

 

1.a narrative description of any acquisitions or sales that are planned and any
other activities proposed to be undertaken;

 

2.a projected annual income statement (accrual basis) on a quarter-by-quarter
basis;

 

3.a projected balance sheet as of the end of the next year;

 

4.a schedule of projected operating cash flow (including itemized operating
revenues, project costs and project expenses) for such year on a
quarter-by-quarter basis, including a schedule of projected operating deficits,
if any;

 

5.a marketing plan indicating the portions of the Project that Manager
recommends be made available for lease and the proposed terms and conditions
relating thereto;

 

6.a detailed budget reflecting on a line by line basis all projected operating
expenses and any proposed construction and capital expenditures for the Project,
including projected dates for commencement and completion of the foregoing;

 

7.a description of the proposed investment of any funds of the Owner which are
(or are expected to become) available for investment;

 

8.a description, including the identity of the recipient (if known) and the
amount and purpose, of all fees and other payments proposed, expected or
projected to be paid for professional services and, if a fee or payment exceeds
$25,000, for other services rendered to or on behalf of the Owner by third
parties;

 

9.a projection of the amount of any anticipated additional Capital Contributions
(as defined in the Operating Agreement) which may be called for pursuant to
Section 5.2(a) of the Operating Agreement and the purposes for which such
additional Capital Contributions may be used; and

 

10.such other information reasonably requested from time to time by Owner.

 

E-1

 

 

EXHIBIT E

 

Annual Business Plan Information

 

1.a narrative description of any acquisitions or sales that are planned and any
other activities proposed to be undertaken;

 

2.a projected annual income statement (accrual basis) on a quarter-by-quarter
basis;

 

3.a projected balance sheet as of the end of the next year;

 

4.a schedule of projected operating cash flow (including itemized operating
revenues, project costs and project expenses) for such year on a
quarter-by-quarter basis, including a schedule of projected operating deficits,
if any;

 

5.a marketing plan indicating the portions of the Project that Manager
recommends be made available for lease and the proposed terms and conditions
relating thereto;

 

6.a detailed budget reflecting on a line by line basis all projected operating
expenses and any proposed construction and capital expenditures for the Project,
including projected dates for commencement and completion of the foregoing;

 

7.a description of the proposed investment of any funds of the Owner which are
(or are expected to become) available for investment;

 

8.a description, including the identity of the recipient (if known) and the
amount and purpose, of all fees and other payments proposed, expected or
projected to be paid for professional services and, if a fee or payment exceeds
$25,000, for other services rendered to or on behalf of the Owner by third
parties;

 

9.a projection of the amount of any anticipated additional Capital Contributions
(as defined in the Operating Agreement) which may be called for pursuant to
Section 5.2(a) of the Operating Agreement and the purposes for which such
additional Capital Contributions may be used; and

 

10.such other information reasonably requested from time to time by Owner.

 

E-2

 

 

EXHIBIT F

 

Statements and Reports

 

(a)Within thirteen (13) days following the end of each month, a statement of
Monthly Gross Receipts for each month;

 

(b)Within thirteen (13) days following the end of each month, a monthly GAAP
balance sheet and GAAP income statement, with a cumulative calendar year GAAP
income statement to date, and a statement of change in the Capital Account for
each Member of Owner ("Member") the preceding month and year to date;

 

(c)Within thirteen (13) days following the end of each month, the monthly and
year to date activity which shall be furnished (without notice or demand) as
follows:

 

1.Balance Sheet, including monthly comparison and comparison to year end (if
applicable)

2.Budget Comparison[*], including month-to-date and year-to-date variances-
Detailed Income Statement, including prior 12 months

3.Profit and loss statement compared to budget with narrative for any large
fluctuations compared to budget

4.

5.

Trial Balance that includes mapping of the accounts to the financial statements
Account

reconciliations for each balance sheet account within the trial balance. -
Detailed support for each account reconciliation including the following:

a.Detail Accounts Payable Aging Listing - 0-30 days, 31-60 days, 61-90 days and
over 90 days

b.Detail Accounts Receivable/Delinquency Aging Report - 0-30 days, 31- 60 days,
61-90 days, over 90 days and prepayments

c.Fixed asset roll-forward and support (invoices and checks) for any new
acquisition/additions and/or support for any disposals to fixed assets.
Purchases will be accounted for using Bluerock's capitalization policy.

6.Security Deposit Activity

7.Mortgage Statement

8.Monthly Management Fee Calculation Monthly

9.Distribution Calculation

10.General Ledger, with description and balance detail

11.Monthly Check Register together with a detailed bank reconciliation Market

12.Survey, including property comparison, trends, and concessions Rent Roll

13.Variance Report, including the following:

14.a.           Cap Ex Summary and Commentary

b.Monthly Income/Expense Variance with notes

c.Yearly Income/Expense Variance with notes

d.Occupancy Commentary

 

F-1

 

 

e.Market/Competition Commentary

f.Rent Movement/Concessions Commentary

g.Crime Commentary

h.Staffing Commentary

i.Operating Summary, with leasing and traffic reporting -Other reasonable
reporting, as requested (e.g. Renovation/Rehab report)

 

All reports shall be prepared on an Accrual Basis in accordance with generally
accepted accounting principles, and shall be as of each calendar month end.
Manager shall furnish to Owner such other reports as may be reasonably requested
by Members in order for such Members to be able to comply with any reporting
requirements that are applicable to any such Member (or any Affiliate of any
such Member) under any applicable organizational or offering documents affecting
such Member or its Affiliates; and

 

Within thirteen (13) days of the end of each quarter of each year, Manager shall
furnish to Owner such information as requested by Owner or its Members or
affiliates as is necessary for any REIT Member of Owner (whether a direct or
indirect owner) to determine its qualification as a real estate investment trust
(a "REIT") and its compliance with any requirements for qualifying as a REIT
(the "REIT Requirements") as shall be requested by Owner or its Members.
Further, Manager shall cooperate in a reasonable manner at the request of any
Member to work in good faith with any designated accountants or auditors of such
Member or its Affiliates so that such Member or its Affiliate is able to comply
with its public reporting, attestation, certification and other requirements
under the Securities Exchange Act of 1934, as amended, applicable to such
entity, and to work in good faith with the designated accountants or auditors of
the Member or any of its Affiliates in connection therewith, including for
purposes of testing internal controls and procedures of such Member or its
Affiliates. The requesting Member shall bear the cost of any information or
reports provided to such Member pursuant to this Exhibit.

 

[*]       Budget Comparison shall include (i) an unaudited income and expense
statement showing the results of operation of the Project for the preceding
calendar month and the Fiscal Year to-date; (ii) a comparison of monthly line
item actual income and expenses with the monthly line item income and expenses
projected in the Budget. The balance sheet will show the cash balances for
reserves and operating accounts as of the cut-off date for such month.

 

F-2