Exhibit 10.359


 


PROJECT ADMINISTRATION AGREEMENT


[West Morehead, Charlotte, NC]


 


THIS PROJECT ADMINISTRATION
MANAGEMENT AGREEMENT (this “Agreement”) is made as of the 24th day of November, 2015, by and between BRG
MOREHEAD DEVELOPMENT MANAGER, LLC, a Delaware limited liability company (“Development Manager”) and ARCHCO WMH PM
LLC, a Delaware limited liability company (“Project Manager”), and joined into on a limited basis by BR ARCHCO MOREHEAD,
LLC, a Delaware limited liability company (“Owner”).


 


WHEREAS, Owner is
the owner or contract vendee of the West Morehead project. The West Morehead
site is comprised of comprised of real property located at 1309 and 1331 West Morehead Street and 811 and 829 South Summit Avenue,
Charlotte, North Carolina (the “Property”);


 


WHEREAS, Owner is
of desirous of retaining development and project administration services to expediently and cost-effectively complete construction
of the Property to become a Class A apartment community consisting of, as currently planned, 287 Class A apartment units in a
five-story, wood-frame building surrounding a pre-cast six-level garage. Amenities within the community will be comparable to
the new apartment properties in the vicinity, and will include a resort-style swimming pool, fitness center, business center and
three courtyards.


 


WHEREAS, Owner has
entered into a Development Agreement with Development Manager for the above-noted services, and Development Manager and Project
Manager are desirous of entering into this Agreement whereby Project Manager will provide such services to Development Manager
on behalf of Owner subject to Development Manager’s oversight and control, in accordance with the terms and conditions of
this Agreement.


 


NOW, THEREFORE, the
parties hereto, intending legally to be bound, hereby agree as follows:


 


ARTICLE I

DEFINITIONS


 


1.1           Each
of the following terms is defined as follows:


 


“Architect”
means Poole & Poole Archicture, LLC, the architectural firm retained by Owner.


 


“Architect’s
Contract” means the contract entered into between Owner and Architect in connection with the Project.


 


“Bankruptcy
Code” shall mean Title 11 of the United States Code, as amended or any other applicable bankruptcy or insolvency statute
or similar law.


 




     


     

    

 


“Bankruptcy/Dissolution
Event” shall mean, with respect to the affected party, (i) the entry of an Order for Relief under the Bankruptcy Code, (ii)
the admission by such party of its inability to pay its debts as they mature, (iii) the making by it of an assignment for the
benefit of creditors generally, (iv) the filing by it of a petition in bankruptcy or a petition for relief under the Bankruptcy
Code or any other applicable federal or state bankruptcy or insolvency statute or any similar law, (v) the expiration of sixty
(60) days after the filing of an involuntary petition under the Bankruptcy Code without such petition being vacated, set aside
or stayed during such period, (vi) an application by such party for the appointment of a receiver for the assets of such party,
(vii) an involuntary petition seeking liquidation, reorganization, arrangement or readjustment of its debts under any other federal
or state insolvency law, provided that the same shall not have been vacated, set aside or stayed within sixty (60) days after
filing, (viii) the imposition of a judicial or statutory lien on all or a substantial part of its assets unless such lien is discharged
or vacated or the enforcement thereof stayed within sixty (60) days after its effective date, (ix) an inability to meet its financial
obligations as they accrue, or (x) a dissolution or liquidation.


 


“Change
Cap” shall mean $250,000.


 


“Commencement
of Construction” means the date on which Owner delivers a notice to commence
construction to the General Contractor
after the Owner has acquired the Property.


 


“Construction
Contract” means any contract between Owner and a Contractor providing for the construction of any portion of the Improvements;
such term includes the General Contract.


 


“Contractor”
means each party who enters into a contract directly with the Owner and who provides labor, services or materials for any part
of the Improvements under the terms of a Construction Contract; such term includes the General Contractor.


 


“Construction
Lender” shall mean the lender that enters into Construction Loan Documents with the Owner for the Project.


 


“Construction
Loan” shall mean the loan by Construction Lender pursuant to which Owner shall finance the development, construction and
lease-up of the Project, all as more specifically provided in the Construction Loan Documents.


 


“Construction
Loan Documents” shall mean the loan and security documents and all instruments, agreements and all other documentation executed
and delivered in connection with the Construction Loan.


 


“Construction
Schedule” shall mean the construction schedule attached hereto as Exhibit C,
as the same may be modified by or with the prior written approval of Development Manager, on behalf of Owner, based on the proposal
of Project Manager.


 


“Development
Budget” means the projected costs and expenses, in the form attached hereto as Exhibit B (which shall be based upon the
Construction Schedule attached hereto as Exhibit C), prepared by Project Manager and approved in writing by Development
Manager, on behalf of Owner, as the same may be modified by or with the prior written
approval of Development Manager, on behalf of Owner, based on the proposal of Project Manager. The Development Budget is intended
to reflect all projected costs and expenses to be incurred in connection with the acquisition and completion of the Project through
Project Final Completion (including, without limitation or duplication, pre-development costs, financing costs, hard and soft
costs of completing the Improvements (on-site and off-site), fixtures and equipment, design fees, and legal expenses). 


 




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“Development
Manager” shall have the meaning ascribed to it in the preamble hereof.


 


“Development
Plan” shall mean and consist of those materials which show the means, methods, sequences and schedules pursuant to which
Project Manager shall complete the Improvements, develop the Property, and otherwise fulfill the purposes of this Agreement. Without
limitation, these materials shall include the Development Budget, the Construction Schedule, and the Drawings and Specifications.


 


“Drawings and
Specifications” means the construction drawings and specifications necessary or appropriate for completion of the Project,
and all change orders, revisions, amendments or addenda thereto which are approved in writing by Owner or by Development Manager
on behalf of Owner.


 


“General Contract”
means the fixed price or guaranteed maximum price general contract entered into, or to be entered into, by Owner for construction
of the Project.


 


“General Contractor”
means the Contractor that is the party to the General Contract other than Owner.


 


“Improvements”
means the improvements to the Land, which, as contemplated by the Drawings and Specifications, shall consist of, without limitation,
a Class A apartment community consisting of 287 apartment units in a five-story, wood-frame building surrounding a pre-cast
six-level garage, amenities comparable to the new apartment properties in the vicinity, a resort-style swimming pool, a fitness
center, a business center and three courtyards.


 


“Land”
means the land legally described on Exhibit A attached hereto.


 


“Project”
means the Improvements and the Land.


 


“Project Documents”
means


 


		(a)	The Architect’s Contract;



 


		(b)	The Development Budget;



 


		(c)	All Construction Contracts;



 


		(d)	The Construction Schedule;



 


		(e)	This Agreement; and



 


		(f)	Any and all applications, permits, easements, approvals,
surety bonds and all other contracts and agreements relating to the Project executed or otherwise approved in writing by Development
Manager or which Project Manager is otherwise authorized to execute or enter into pursuant to this Agreement.



 




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“Project Final
Completion” refers to the completion of the Improvements, and shall mean and be effective at such time as (a) the satisfactory
lien-free completion of all Improvements substantially in accordance with the Drawings and Specifications (including punchlist
items), as evidenced by (i) final lien waivers by all Contractors (and, if applicable, the consent of each surety which shall have
issued a performance and payment bond for the benefit of Owner or Development Manager with respect to the Project), (ii) an affidavit
from the General Contractor substantially in the form of AIA document G704, and (iii) such other affidavits, waivers and releases
from the General Contractor and/or the Contractors as Owner and its title insurer
or Construction Lender may reasonably require in order to assure lien free completion of the Project (including any
equitable lien claims), and (b) the receipt by Owner (or by Development Manager on behalf of Owner) of all final certificates of
occupancy necessary for occupancy of all of the Project), (c) the receipt by Owner (or by Development Manager on behalf of Owner)
of six copies of a final “as-built” survey, a final record set of Drawings and Specifications showing actual changes
made during construction, and all warranties and operation manuals for all equipment, appliances and other components contained
in the Project, (d) the General Contractor has completed its final site cleanup and restoration, including, without limitation,
removal of all excess materials, rock, sand, paving, and miscellaneous debris, supplies, equipment and trailers; and (e) all temporary
utilities are disconnected.


 


“Units”
shall mean the Project’s apartment units.


 


ARTICLE II

APPOINTMENT


 


2.1           Development
Manager hereby retains Project Manager as an independent contractor to provide the development management services set forth in
this Agreement, with the authority to act on behalf of, and to bind, Development Manager, as agent for the Owner, but subject to
the specific limitations set forth in this Agreement. Subject only to any specific limitations of Project Manager’s authority
set forth elsewhere in this Agreement, Project Manager hereby agrees to provide the development management services provided for
in this Agreement, including but not limited to all phases of the design, finance administration, administration of the construction
draw requests and other financial and reporting under the Construction Loan and as required under the Construction Loan Documents,
governmental approval process, construction and completion of the Improvements.


 


2.2           As
an inducement to Development Manager to appoint Project Manager and enter into this Agreement, Project Manager covenants to Development
Manager as follows:


 


(a)          The
duties of Project Manager hereunder shall be performed or supervised at all times during the term of this Agreement by Neil T.
Brown, or by such successor as Development Manager may reasonably approve in writing from time to time.


 


(b)          Project
Manager shall work diligently, in accordance with the level of professionalism and expertise expected of a first-class, multifamily
real estate developer.


 




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(c)          Project
Manager shall use all reasonable efforts, at all times and in the most expeditious and economical manner, to further the interests
of the Owner with respect to the Project and to cause timely Project Final Completion of the Project in accordance with the Project
Documents, subject only to the specific reservations set forth herein.


 


(d)          Project
Manager shall employ at its own cost and expense such qualified and capable personnel as may be necessary and appropriate to perform
its obligations and carry out its responsibilities hereunder;


 


(e)          Project
Manager shall use commercially reasonable efforts to cause the Improvements to be constructed, substantially in accordance with
the Drawings and Specifications, and any material defect in the Improvements or any material departure from the Drawings and Specifications
to be corrected by the Contractor.


 


(f)          Project
Manager shall provide Development Manager with information relevant to the Project, including without limitation the issuance of
the periodic reports required in section 8.1 below;


 


(g)          Project
Manager shall provide day-to-day coordination and periodic evaluation of the activities of all surveyors, architects, Contractors,
engineers, consultants and, to the extent bearing upon the Project, public utilities and governmental officials, and promptly advise
Development Manager with respect to any significant issues that may arise;


 


(h)          Project
Manager shall make recommendations to Development Manager in connection with decisions regarding the Project reserved to Development
Manager, including, without limitation, the retention of consultants;


 


(i)          Project
Manager shall cause the General Contractor to coordinate with the various public utility companies for the required removal of
any existing utilities, for the installation of any temporary service, for the installation of any new permanent service and, upon
Project Final Completion, disconnection of any temporary service;


 


(j)          Project
Manager shall negotiate, enter into contracts in the name, and authorize on behalf, of Owner, any consulting engineering, planning,
and surveying work in connection with the Project, all as provided for in the Development Budget, provided, however, no such contract
will, by the terms thereof, continue in effect after Project Final Completion without the prior review and approval of Development
Manager;


 


(k)          Project
Manager shall in the event of an emergency at the Project, take any action required under the circumstances to protect Owner’s
interest in the Project after first making all reasonable efforts to contact Development Manager orally for approval of such action
and confirm in writing the action so taken promptly thereafter;


 


(l)          Project
Manager shall cause the General Contractor to strictly supervise all work and ensure that the use and occupancy of the completed
Project shall comply with all applicable laws;


 




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(m)          Project
Manager shall coordinate with the General Contractor, to the extent requested by the General Contractor, to accomplish the transfer
of, the application for, and issuance or re-issuance of, a building permit (if not heretofore issued) and coordinate the application
and approval process in connection with the issuance of certificates of occupancy, and periodic inspections conducted by governmental
officials, and any other required licenses or permits relating to the development and construction of the Project.


 


(n)          Project
Manager shall keep the Project free from unreasonable accumulations of waste materials and refuse at all times.


 


(o)          Project
Manager shall notify Development Manager in writing, promptly after it has knowledge of any action, suit or proceeding filed in
connection with the Project.


 


(p)          Development
Manager and any other designated representative of Development Manager shall, at all times during the term of this Agreement, have
the right of entry and free access to the Project and the right (but not the obligation) to inspect all work done, labor performed
and materials furnished in and about the Project and the right (but not the obligation) to inspect and audit all books, records,
and contracts relating to the Project.


 


(r)          Project
Manager shall provide to Development Manager true copies of all licenses, permits, authorizations and approvals pertaining to the
Project promptly after the same have been procured.


 


2.3           Development
Manager shall, from time to time, designate in writing one or more “representatives” to act on behalf of Development
Manager in all matters under this Agreement. Initially, Development Manager’s representatives shall be James Babb and Michael
Konig. Actions by a Development Manager’s representative shall be deemed actions of Development Manager. Project Manager
shall, from time to time, designate in writing one or more “representatives” to act on behalf of Project Manager in
all matter under this Agreement. Initially, Project Manager’s representative shall be Neil T. Brown. Actions by Project Manager’s
representative shall be deemed actions of Project Manager.


 


2.4           Development
Manager is an affiliate of Bluerock Residential Growth REIT, Inc. and Bluerock
Real Estate, LLC (collectively, “Bluerock”) and Project Manager is an affiliate of ArchCo Residential LLC (“ArchCo”),
respectively. Their respective affiliates (“Bluerock Affiliates” and “ArchCo Affiliates”) are or may become
indirect owners of Owner. Bluerock Affiliates and ArchCo Affiliates may have other rights and obligations with respect to the
Project under other agreements. Nothing herein contained shall be construed or deemed to alter, change or modify any of the rights
or obligations which any of those parties may otherwise have under any of the Project Documents, the limited liability company
agreement of Owner, the limited liability company agreement of the sole member of Owner, or any other agreement.


  




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ARTICLE III

INTENTIONALLY OMITTED


 


ARTICLE IV

INTENTIONALLY OMITTED


 


ARTICLE V

DESIGN ACTIVITIES


 


5.1           Project
Manager shall exercise any and all rights and responsibilities of Owner, as authorized agent of Owner, under the Architect’s
Contract, except (a) as otherwise directed in writing by Development Manager from time to time and (b) except any exercise which
would result in (i) a modification (including any change order) or termination of the Architect’s Contract; (ii) any modification
(including any change order) of the Drawings and Specifications that will, in the aggregate, increase or decrease the cost of
construction or development of the Project by more than the Change Cap other
than any change (each, a “Mandated Change”) (A) reasonably necessary for compliance with laws (including, without
limitation, any such change which is reasonably necessary for the issuance of any permits or certificate of occupancy), (B) required
to address a previously unknown condition (e.g., the environmental or physical condition of the Site) or (C) required by the Construction
Lender; or (iii) any other matter which could have a material adverse affect on the Project and/or the Owner. Notwithstanding
the foregoing, Project Manager shall obtain Development Manager’s consent prior to initiating any Mandated Change costing
in the aggregate in excess of the Change Cap that would not otherwise be covered
by the Development Budget, after taking into account cost savings and amounts available for contingency, or which would result
in the foreseeable future of the Construction Loan falling “out of balance” as result of such expenditure.


 


5.2           Project
Manager shall supervise Architect and other consultants with respect to the preparation of the Drawings and Specifications, as
well as with respect to any and all proposed change orders, revisions, amendments or addenda thereto.


 


5.3           Project
Manager shall review any and all requests for changes in the Drawings and Specifications and, with respect to changes requiring
Owner’s approval pursuant to Section 5.1, make recommendations to Development Manager with regard to any such requested
changes.


 


ARTICLE VI

CONSTRUCTION


 


6.1           Except
as expressly provided to the contrary below, prior to re-commencing construction of the Project or at such later time as Project
Manager deems appropriate during the course of construction in order to comply with the Construction Schedule, Project Manager
shall (to the extent it has not already done so) do the following:


 


(a)          Obtain,
or cause the General Contractor to obtain, all necessary permits required by any governmental authority to re-commence and complete
construction of the Improvements, and verify that the contemplated use thereof, upon completion, will comply with all zoning and
land use laws.


 




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(b)          Assist
Development Manager in selecting and retaining the professional services of surveyors, special consultants and testing laboratories
and coordinate their services to the extent the need for such services is known prior to the commencement of construction;


 


(c)          Negotiate
for Owner’s approval any easements required for (i) access to or egress from the Land, (ii) the installation of any utilities,
(iii) sanitary sewer systems and storm water sewer systems or storm water management;


 


(d)          Verify
that all zoning and land use laws and all other statutes, ordinances, codes, rules, regulations, orders, or other applicable laws
of any governmental or quasi-governmental authorities relating to the construction of the Project are being complied with and that
no such law, statute, ordinance, rule, regulation, or order shall impair or inhibit in any way the development and construction
of the Project;


 


(e)          Assist
Development Manager in the selection of each Contractor and the negotiation of each Construction Contract; provided, however, that
final selection of each Contractor and the approval and execution of each Construction Contract are reserved to Development Manager.


 


(f)          Prior
to the execution of any Construction Contract, Project Manager shall cause the preparation, for approval by Development Manager,
of the Construction Schedule identifying milestone events during construction thereunder. Project Manager shall prepare the Construction
Schedule, in cooperation with the Contractor, or shall review and analyze the Construction Schedule if prepared by the Contractor.


 


6.2           Project
Manager shall exercise any and all rights and responsibilities of Owner, as authorized agent of Owner, under each Construction
Contract, except as otherwise instructed by Development Manager from time to time, except any exercise which would result in (i)
any modification or termination of the Construction Contract, (ii) any change in the work covered by such Construction Contract,
and/or (iii) any adverse affect on the Project and/or Owner.


 


6.3           Project
Manager shall prepare the Development Budget and propose updates thereto on
a periodic basis so that it remains an accurate reflection of the future costs and expenses through Project Final Completion.
In addition, if at any time during the term of this Agreement it becomes reasonably apparent to Project Manager that the future
credit availability under the Construction Loan Documents may be insufficient to fund the Project through and including Project
Final Completion (i.e., the Construction Loan is at risk of going “out of balance”), then Project Manager shall immediately
notify Development Manager, including in such notice the anticipated timing and extent to which the Construction Loan may go out
of balance, together with Project Manager’s recommendations to prevent it from doing so or reducing the extent to which
it goes out of balance.


 


6.4           Changes
to Drawings and Specifications.


 


(a)          Except
otherwise provided in this Agreement, the Drawings and Specifications shall not be amended or modified by Project Manager without
the prior written consent of the Development Manager and, unless the Development Manager so consents, the Project Manager shall
cause the Project to be constructed substantially in accordance with the Drawings and Specifications as approved.


 




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(b)          Project
Manager shall evaluate all proposed changes to the Drawings and Specifications with respect to (i) the validity, necessity and
cost thereof, and (ii) any implications to the overall job progress and costs, applicable Construction Contracts or engineering
contracts and identify possible alternatives. Project Manager shall prepare and submit to Development Manager a written report,
together with its recommendations, regarding any proposed changes, and any possible alternatives, requiring Development Manager’s
approval of any changes thereto. No work shall be commenced based on, or with respect to, any such proposed change until Development
Manager has approved a change order therefor.


 


(c)           If the proposed
changes to the Drawings and Specifications (i) (A) do not modify the Development Budget or (B) do not require consent of the Construction
Lender under the Construction Loan Documents, and (ii) if the Development Manager shall fail to respond to a request for approval
of a proposed change order, or alternative thereto, within five (5) business days after such submission, then Development Manager
shall be deemed to have approved Project Manager’s recommended action. If contrary to subsection (i)(A), the proposed change
would result in an adverse economic impact or change to the Development Budget, then Project Manager may not go forward with the
Project Manager’s recommended action until it shall have provided to Development Manager a proposed revised Development Budget
and shall have affirmatively obtained Development Manager’s express approval thereof (which will be sufficient if given by
electronic mail). If contrary to subsection (i)(B), the proposed change would require consent of the Construction Lender under
the Construction Loan Documents, then Project Manager may not go forward with the recommended action, except with Construction
Lender’s and the Development Manager’s prior written consent.


 


(d)          The
Drawings and Specifications shall be at all times deemed the property of the Owner and neither the Development Manager nor the
Project Manager shall have or claim any ownership interest therein.


 


6.5           The
development and construction management services to be performed by the Project Manager shall consist of the services listed below
and such other services which may reasonably be inferred therefrom or from the other terms of this Agreement, including the Development
Plan. Without limitation, the Project Manager shall oversee, manage, and coordinate the development of the Project, including,
without limitation, to: (i) cause the Project to be completed in an expeditious manner, (ii) cause the General Contractor substantially
to comply with and adhere to any progress schedules adopted by the Development Manager for the Project (without limitation, the
Construction Schedule); and (iii) cause the General Contractor to keep at the Project an adequate supply of workmen and materials.
In connection with the foregoing , the Project Manager shall, without limitation:


 


(a)          Advise
on the division of the Project into individual Construction Contracts for various categories of work (e.g., site work, building,
landscaping), including the method to be used for selecting Contractors and awarding Construction Contracts. If multiple Construction
Contracts are to be awarded, Project Manager shall review the Construction Contracts and make recommendations as required to provide
that (1) the work of the Contractors is coordinated, (2) all requirements for the Project have been assigned to the appropriate
Construction Contract, (3) the likelihood of jurisdictional disputes has been minimized, and (4) proper coordination has been provided
for phased construction.


 




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(b)          Develop
bidders’ interest in the Project, establish bidding schedules, issue, with the assistance of the Architect, bidding documents
to bidders, conduct prebid conferences with prospective bidders and assist the Architect with regard to questions from bidders
and the issuance of addenda. Notwithstanding the foregoing, Project Manager may negotiate a Construction Contract with a single
Contractor on a “no-bid” basis, provided that such Construction Contract shall be subject to Development Manager’s
approval.


 


(c)          Receive
bids, prepare bid analyses and make recommendations to Development Manager for Owner’s award of Construction Contracts or
rejection of bids.


 


(d)          Prepare
and negotiate Construction Contracts, subject to Development Manager’s approval, and advise the Development Manager on the
acceptability of subcontractors and material suppliers proposed by Contractors.


 


(e)          As
necessary, inspect the progress of the work on the Project, and promptly notify Development Manager and the applicable Contractor
of any defective work or any other default under a Construction Contract observed by Project Manager.


 


(f)          Identify
and analyze alternative courses of action for unforeseen conditions, such as shortages, work stoppages, and/or accidents or casualties,
as they occur.


 


(g)          Review
each Contractor’s monthly payment requisitions and, if appropriate or necessary, negotiate revisions thereto with such Contractor.


 


(h)          Inspect
all of the Improvements (including landscaping), review and ensure the accuracy and completeness of all monthly reports and punchlists
prepared by Architect or an engineer and approved in writing by Development Manager for finalizing the work; supervise each Contractor
to facilitate the satisfactory completion of all of the work to be done under such Contractor’s Construction Contract; and
procure record drawings with notation of all changes and added details. Without limitation, Project Manager shall cause the Project
to be equipped with all fixtures, equipment and items of personal property required for the completion and operation of the Project
following completion, all substantially in accordance with the Drawings and Specifications.


 


(i)          Supervise
the building start-up and initial system operation, including inspection for punchlist items, and cause the General Contractor
to coordinate any modification of such systems as required.


 


(j)          Provide
administrative, management, financial and related services as required to (i) coordinate and supervise the work of each Contractor
with the activities and responsibilities of Development Manager and Architect to complete the Project in accordance with the Development
Plan, and (ii) comply with the draw requests and related requirements under the Construction Loan Documents so as to enable the
Owner to draw fundings of Construction Loan is accordance with Development Budget. Development Manager reserves the right to approve
all requisitions prepared by Project Manager, provided that such approval shall not cause a delay in the processing of pay applications,
before they shall be authorized on behalf of the Owner.


 




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(k)          Review
any final claims and proposed final change orders and close-out of each Construction Contract, review the final payments on each
Construction Contract and ensure, in a prompt fashion to allow Development Manager to cause Owner to timely make payments under
the Construction Contract, that adequate final lien waivers have been collected in the correct amount from all subcontractors and
materialmen working on the job; all such payments shall be made by Development Manager in the manner specified in the applicable
Construction Contract, but only upon receipt by Development Manager of documentation reasonably satisfactory to Development Manager;
be responsible for the collection of such documentation; prepare and submit to Development Manager at least fifteen (15) days before
the final payment of retention is due, a written report with respect to such documentation (provided, however, that Development
Manager acknowledges that the final unconditional lien waiver from each Contractor shall be submitted to Project Manager concurrently
with the final payment of retainage and a copy shall promptly thereafter be forwarded to Development Manager). Development Manager
reserves the right to approve all such matters before they are finalized on behalf of the Owner, such approval not to be unreasonably
withheld or delayed.


 


(l)          Maintain
or cause to be maintained separate true, complete and correct books of account and records pertaining to all costs incurred by
Project Manager in connection with development and construction of the Improvements, including, without limitation, costs advanced
prior to the date of this Agreement, and any reimbursements or refinancing proceeds to or on behalf of the Owner out of the proceeds
of the initial advance under the Construction Loan for the Project, which books and records the Development Manager shall have
the right to inspect and copy at its own expense during regular business hours, at the place where they are then regularly maintained,
on reasonable advance notice to the Project Manager.


 


(m)          Consult
with Architect and Development Manager if a Contractor requests interpretations of the meaning and intent of the Drawings and Specifications
and assist in the resolution of questions which may arise.


 


(n)          Receive
certificates of insurance from (and ensure that insurance is maintained for) each Contractor and forward such certificates to Development
Manager.


 


ARTICLE VII

OMITTED


 


ARTICLE VIII

REPORTS


 


8.1           Project
Manager will submit written reports to Development Manager as necessary or appropriate, but no more frequently than monthly, which
shall indicate (i) the progress of the construction of the Improvements, (ii) any proposed revisions to the Construction Schedule,
the Development Budget or the Drawings and Specifications, with recommendations of action to be taken by Development Manager, and
(iii) any other recommendations and information which Project Manager is requested by Development Manager to provide.


 




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8.2           Upon
Development Manager’s reasonable advance notice, Project Manager shall make it and sufficiently knowledgeable personnel available
to meet with Development Manager and/or its designees (telephonically or in-person) and, in advance of each such meeting, Project
Manager shall provide reports in such forms as may be reasonably required by the Development Manager or by the Construction Lender,
including reports regarding (a) the costs incurred in connection with the development, construction and equipping of the Project,
on a line by line basis as itemized in the Development Budget and on a cumulative basis; (b) a comparison of costs incurred to
the date of such report with the Development Budget; and (c) any recommended revision of the Development Plan, the Development
Budget, the Construction Schedule, or all of them.


 


8.3           All
written data and materials, including all records, contracts, receipts for deposits, unpaid bills, and other papers or documents
in the possession of the Project Manager or its affiliates which pertain to the Project or the business or affairs of the Owner
or the Project are and shall remain the property of the Owner; and


 


ARTICLE IX

RESPONSIBILITIES OF THE PARTIES


 


9.1           Project
Manager hereby agrees to indemnify, defend and hold Owner and Development Manager, and their respective members, officers, directors,
employees and agents harmless from any and all loss, liability or damage, or any claim thereof, that Owner or Development Manager
may incur or be subjected to as a result of the gross negligence or willful misconduct of Project Manager or default by Project
Manager under this Agreement. Subject to the foregoing, except to the extent that any of the following could have been avoided
by the diligent performance by the Project Manager of its duties hereunder, the Project Manager shall not be responsible for defaults
by the General Contractor and subcontractors in performance of their respective contracts, or for defaults by the Architect and
design engineers in performance of their respective contracts.


 


9.2           Development
Manager shall respond to all written requests submitted by Project Manager, and make all necessary decisions called for in such
requests as soon as practicable following receipt of such request taking into account the subject matter of such request.


 


9.3           Development
Manager shall provide Project Manager with access to any information or documents which will reasonably assist Project Manager
in meeting its obligations.


 


9.4           Development
Manager reserves the right of final approval as to all material documentation relating to the Project, including, without limitation
all Project Documents, all other third party contracts for the development of the Project, all change orders and any substantial
change in any of the foregoing. Notwithstanding the foregoing, material documentation shall not include equipment leases, temporary
staging agreements and other similar documents in the ordinary course of developing the Project, none of which by the terms thereof
will continue in effect after Project Final Completion without the prior review and approval of Development Manager.


 




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9.5           Project
Manager shall notify Development Manager of, and Development Manager shall have the right to participate in, all meetings concerning
the development of the Project, including, without limitation, meetings with subcontractors regarding material disputes, meetings
with consultants and other third parties regarding the Project, and all regularly scheduled project meetings with the General Contractor,
provided, however, it is not intended that Project Manager notify Development Manager of day-to-day meetings involving only its
employees and the General Contractor (and subcontractors) if no material dispute is involved).


 


ARTICLE X

FEES


 


10.1         In
consideration of Project Manager’s services provided hereunder, Development Manager shall cause Owner to pay directly to
Project Manager a Development Fee in the amount equal to 3.0% of the total amount of the Final Development Budget (as defined
in Section 12.4) (but excluding from the Final Development Budget any Development Fee payable to Project Manager) (such amount,
the “Development Fee”), which Development Fee (a) shall be payable twenty-five percent upon Commencement of Construction
and (b) the balance earned and payable on a monthly basis in equal monthly installments
beginning on the first day of the second calendar month following the Commencement
of Construction and on the first day of each month thereafter during the construction period
as set forth in the Construction Schedule. If the Construction Schedule is modified, appropriate adjustments to the amount of
the monthly installments on account of the Development Fee shall be made.


 


10.2         In
addition, Development Manager shall cause Owner to pay directly to Project Manager a Construction Management Fee in the amount
equal to 1.0% of hard costs included in the Final Development Budget (the “CM Fee”), which CM Fee shall be payable
on a monthly basis in equal monthly installments beginning on Commencement of Construction and on the first day of each month thereafter
during the construction period.


 


10.3         In
addition, Development Manager shall cause Owner to reimburse Project Manager for its reasonable and actually incurred out-of-pocket
expenses for its reasonable and actually incurred out-of-pocket business expenses (together, the “Expense Reimbursements”),
provided however, Project Manager’s expense reimbursements may not exceed $50,000 without the Development Manager’s
prior consent. Expense Reimbursements shall be made only if Project Manager provides the Development Manager with receipts and
other evidence reasonably required by the Development Manager to substantiate the amount to be reimbursed. For the avoidance of
doubt, the Expense Reimbursements are not intended to include any amounts for salaries or other overhead expenses of Project Manager
or ArchCo Affiliates.


 


10.4         Owner
hereby joins this Agreement for the limited purpose of confirming its obligation to pay the Development Fee and CM Fees (collectively,
the “Fees”) and Expense Reimbursements if, as and when earned and/or payable.


 




    	 	13	 



     

    

 


10.5         Notwithstanding
anything to the contrary in this Agreement, no Fees shall be deemed earned (or payable) unless and until there has been a Commencement
of Construction, nor shall there be any obligation to pay or liability for Expense Reimbursements unless and until there has been
a Commencement of Construction.


 


ARTICLE XI

TERM


 


11.1         The
term of this Agreement shall commence on the date hereof and shall terminate at such time as (i) Project Final Completion has been
achieved, Project Manager has performed its obligations hereunder, and all Fees due Project Manager hereunder have been paid, or
(ii) if prior thereto, Project Manager receives a written notice from Development Manager to the effect that Owner or Development
Manager are abandoning the Project, or (iii) the Agreement is terminated pursuant to Article XII hereof.


 


11.2         In
the event that this Agreement is terminated under Section 11.1(ii) or if this Agreement is terminated under Section 11.1(iii) due
to a default by the Development Manager or Owner under one or more of the provisions in Article XII hereof, the Project Manager
shall be entitled to the full amount of its Fees and Development Manager shall cause the Owner to pay directly to Project Manager
the balance of the unpaid Fees in a single lump sum payment within ten days of termination; provided however, any such payment
otherwise called for under the preceding sentence shall not be earned, due or payable unless, as a threshold matter, there has
first been a Commencement of Construction.


 


ARTICLE XII

DEFAULT AND TERMINATION


 


12.1         It
shall be an event of default hereunder if


 


(a)          Either
party fails to perform any of its obligations under this Agreement, and such failure to perform continues for a period of twenty
(20) days after written notice of such failure to the defaulting party from the other party hereto; provided, however, that, unless
the breach is by its nature not susceptible to cure, if the default cannot be cured within twenty (20) days and the defaulting
party commences a cure within such twenty (20) day period and thereafter diligently pursues such cure, the cure period shall extend
for not more than an additional 60 day period of time necessary to effect such cure.


 


(b)          Owner
or Development Manager suffers or incurs any loss, liability or damage as a
result of the gross negligence, willful misconduct, fraud or bad faith of Project Manager or any of its affiliates in connection
with the Project.


 


(c)          Owner,
Development Manager or any of their affiliates causes Project Manager or WMH Sponsor LLC to incur any loss, liability or damage
as a result of the gross negligence, willful misconduct, fraud or bad faith of Owner, Development Manager or any of their affiliates
in connection with the Project.


 


(d)          Project
Manager, WMH Sponsor LLC or ArchCo WMH CM LLC is the subject of any Bankruptcy/Dissolution
Event.


 




    	 	14	 



     

    

 


(e)          Owner,
Development Manager or the guarantor of the Construction Loan is the subject of any Bankruptcy/Dissolution
Event.


 


(f)          Neil
T. Brown does not own at least 51% of the equity interests in ArchCo Residential LLC or does not control, directly or indirectly,
the day-to-day operations of ArchCo Residential LLC and Project Manager.


 


12.2         Upon
the occurrence of an event of default by Owner or Development Manager, Project Manager,
provided it is not in default hereunder, shall have the right to terminate this Agreement, by giving written notice to
Development Manager. 


 


12.3         Upon
the occurrence of an event of default by Project Manager, Development Manager shall have the right to terminate this Agreement,
by giving written notice to Project Manager, in which event the Project Manager upon termination shall be paid its Expense Reimbursements
and Fees for services hereunder which had been earned prior to the date of Project Manager’s default (less any damages incurred
by Owner or Development Manager as a result of such default), but which remain unpaid, but, upon termination, neither Owner nor
Development Manager shall be obligated to make any further interim payments of Fees to Project Manager and no Fees shall be thereafter
due or payable, and Development Manager shall be permitted to pursue any and all remedies available at law or in equity. 
For the avoidance of doubt, all liability of Project Manager accruing hereunder prior to such termination shall survive such termination.


 


12.4         For
the avoidance of doubt, each of the following shall constitute an event of default on the part of Project Manager with respect
to which there shall be notice and cure rights provided for in Section 12.1: (a) the Project Manager’s failure to maintain
the progress called for under the final form of Construction Schedule that, at the time of Commencement of Construction, is prepared
by Project Manager and approved in writing by Development Manager on behalf of Owner (“Final Construction Schedule”),
but including any subsequent changes thereto proposed by Project Manager and, in its sole discretion, approved in writing by Development
Manager on behalf of Owner (but in all cases other than by reason of delays resulting from force majeure events or acts of the
Development Manager), or (b) actual or reasonably projected expenses under the Development Budget (as updated from time to time
by the Project Manager as provided herein), less land cost, are in excess of two and one-half percent (2.5%) more than (i) the
amount of the final Development Budget that, at the time of Commencement of Construction, is prepared by Project Manager and approved
in writing by Development Manager on behalf of Owner, plus/minus any subsequent changes thereto proposed by Project Manager and,
in its sole discretion, approved in writing by Development Manager on behalf of Owner (“Final Development Budget”),
less (ii) land cost, in the aggregate.


 


12.5         In
addition to all other requirements of Project Manager hereunder, upon the expiration of the term of this Agreement, whether by
completion of the Project or any earlier termination, Project Manager shall deliver to Development Manager the original of all
materials relating to the Project prepared pursuant to this Agreement or any of the Project Documents and/or other materials prepared
with respect to the Project which are in the possession of Project Manager.


 




    	 	15	 



     

    

 


ARTICLE XIII

SUCCESSORS AND ASSIGNS


 


The provisions of
this Agreement shall be binding upon, and inure to the benefit of, Development Manager, Project Manager and their respective successors,
assigns, and legal representatives; provided, however, that Project Manager shall not assign or transfer its interest in this
Agreement without the written consent of Development Manager, which may be granted or withheld in its discretion.


 


ARTICLE XIV

INSURANCE


 


14.1         Project
Manager shall place and maintain in force insurance with coverage, limits and amounts as follows:


 


(a)          Worker’s
Compensation insurance (including employers’ liability insurance) covering employees of Project Manager, employed in, on
or about the Project, in an amount sufficient to provide statutory benefits as required by applicable laws.


 


(b)          Commercial
General Liability insurance, with limits of at least $2,000,000.00 per occurrence. The policy(ies) for such insurance shall: (i)
name Owner, Construction Lender and Development Manager as an additional insured,
(ii) be issued by insurers, and be in forms and for amounts, approved by Development Manager, (iii) be effected under valid and
enforceable policies issued by insurers of recognized responsibility, and (iv) provide that such policy(ies) shall not be canceled
without at least thirty (30) days’ prior written notice to Construction Lender
and Development Manager; provided, however, if the insurer will not commit to give such notice to both Construction Lander and
Development Manager, then Construction Lender will be entitled to such notice and Project Manager shall give immediate
notice to Development Manager of any cancellation.


 


(c)          Auto
Liability insurance with limits of at least $2,000,000 per occurrence. The policy(ies) for such insurance shall name the Development
Manager as an additional insured.


 


14.2         The
Development Manager shall place and maintain Builder’s Risk Property insurance covering the Project as a project expense.


 


ARTICLE XV

MISCELLANEOUS


 


15.1         This
Agreement and any Exhibits attached hereto represents the entire and integrated agreement between Development Manager and Project
Manager with respect to the development of the Project and supersedes all prior negotiations, representations or agreements, either
written or oral. This Agreement may be amended only by written instrument signed by both Development Manager and Project Manager.
The Project Manager shall have no right or interest in the Project, nor any claim of lien with respect thereto arising out of
this Agreement or the performance of its services or the services of any Affiliate (as hereinafter defined). The Project Manager
shall not file, and shall prevent any ArchCo Affiliate from filing, any lien against the Project.


 




    	 	16	 



     

    

 


15.2         In
performing its services hereunder, the Project Manager is and shall be, for federal tax purposes, an independent contractor and
not an employee or agent of the Development Manager or the Owner and the Project Manager is and shall be authorized to act as
the agent of the Development Manager solely to the extent required to perform the services and obligations set forth in this Agreement.


 


15.3         Project
Manager shall use commercially reasonable efforts to ensure that construction of the Project is effected in compliance with all
relevant provisions of the Construction Loan Documents disclosed to Project Manager.


 


15.4         The
Development Manager and Project Manager hereby agree that this Agreement and any and all liens, rights (including the right to
receive any and all fees) and interests ( whether choate or inchoate) owed, claimed or held by either such Manager in and to the
Project or the rent and revenue generated therefrom, are and shall be in all respects subordinate and inferior to the liens and
security interests created or to be created for the benefit of the Construction Lender under the Construction Loan Documents.


 


15.5         Whether
or not expressly required by the other provisions hereof, no approval by Development Manager shall be effective unless contained
in a writing signed by its Representative.


 


15.6         Nothing
contained herein shall be deemed to create any contractual relationship between Project Manager and any of the Contractors, subcontractors,
material suppliers, or consultants on the Project; nor shall anything contained herein be deemed to give any third party any claim
or right of action against Project Manager which does not otherwise exist without regard to this Agreement.


 


15.7         This
Agreement shall be governed under the laws of the State of North Carolina.


 


15.8         Time
is of the essence with respect to all matters set forth herein.


 


15.9         Any
obligation or liability whatsoever of either party hereto which may arise at any time under this Agreement or any obligation or
liability which may be incurred by it pursuant to any other instrument, transaction or undertaking contemplated hereby shall be
satisfied, if at all, only out of the assets of such party. No such obligation or liability shall be personally binding upon, nor
shall resort for the enforcement thereof be had to, the property of any of such party’s shareholders, trustees, officers,
employees or agents, regardless of whether such obligation or liability is in the nature of contract, tort or otherwise.


 


ARTICLE XVI

NOTICES


 


16.1         All
notices, requests, demands, and other communications required or permitted to be given under this instrument shall be in writing
and shall be conclusively deemed to have been duly given or delivered, as the case may be, (i) when hand delivered or sent by facsimile
(if confirmation of receipt has been received) to the addressee; (ii) upon transmission when sent in “PDF” format by
electronic mail electronic; (iii) three (3) business days after having been sent by certified mail, postage prepaid return receipt
requested; or (iv) one (1) business day after having been deposited, properly addressed and prepaid for guaranteed next-business-day
delivery, with a nationally-recognized overnight courier service. All such notices, requests, or demands shall be addressed as
set forth below, or to such other address as a party may from time to time designate by notice given to the other party(ies).


 




    	 	17	 



     

    

 


	If to Owner:	BRG Morehead Development
    Manager, LLC
	 	c/o Bluerock Real Estate, L.L.C.
	 	712 Fifth Avenue, 9th
    floor
	 	New York, New York 10019
	 	Attn:  R. Ramin Kamfar
    and James Babb
	 	Facsimile:  (212) 278-4220
	 	Email:  rkamfar@bluerockre.com and
	 	jbabb@bluerockre.com
	 	 
	With Copy to:	Michael Konig, Esq.
	 	c/o Bluerock Real Estate, L.L.C.
	 	712 Fifth Avenue, 9th
    floor
	 	New York, New York 10019
	 	Facsimile:  (212) 278-4220
	 	Email:  mkonig@bluerockre.com
	 	 
	If to Project Manager:	ArchCo WMH PM LLC
	 	Attention:  Neil T. Brown
	 	7 Piedmont Center
	 	Suite 300
	 	Atlanta, GA  30305
	 	Email:  neil@ntbrown.com
	 	 
	With Copy to:	ArchCo Residential LLC
	 	Attn:  Dorrie Green
	 	6820 Cypress Point North, #29
	 	Austin, TX  78746
	 	Email:  dgreen@archcoresidential.com


 


Any time period following
notice shall commence on the date of such delivery. Rejection or other refusal to accept or inability to deliver because of change
of address as to which no notice has been given shall constitute receipt of any such notice, demand or request.




    	 	18	 



     

    

 


IN WITNESS WHEREOF,
the parties hereby have executed this Agreement as of the day and year first set forth above.


 


	 	PROJECT MANAGER:
	 	 
	 	ARCHCO WMH PM LLC, 
	 	a Delaware limited liability company
	 	 	 	 
	 	By:	/s/ Neil T. Brown
	 	 	Name:	Neil T. Brown
	 	 	Title:	Authorized Signatory


 




     


     

    

 


	 	DEVELOPMENT MANAGER:
	 	 
	 	BRG MOREHEAD DEVELOPMENT MANAGER, LLC
	 	 	 	 
	 	By:	/s/ Michael Konig
	 	 	Name:	Michael Konig
	 	 	Title:	Authorized Signatory


 


OWNER HEREBY JOINS IN
THIS AGREEMENT FOR THE SOLE PURPOSE OF AGREEING TO BE BOUND BY THE TERMS OF SECTION 10.4.


 


	 	OWNER:
	 	 
	 	BR ARCHCO MOREHEAD, LLC, a Delaware limited liability company
	 	 	 	 
	 	By:	/s/ Michael Konig
	 	 	Name:	Michael Konig
	 	 	Title:	Authorized Signatory


 




     


     

    

 


EXHIBIT A


PROPERTY DESCRIPTION


 


West Morehead, Charlotte, North Carolina


 


PARCEL 1


BEGINNING at a point located at the intersection
of the southern margin of the right-of-way of West Morehead Street and the eastern margin of the right-of-way of South Summit Avenue,
thence from said Beginning point and with the eastern margin of the right-of-way of South Summit Avenue S 11-45 W. 220.0 ft. to
an iron located beneath the pavement in the northern margin of the Piedmont and Northern Railroad right-of-way; thence with said
right-of-way in two courses and distances as follows: (1) S. 78-15 E. 83.45 ft. to a point; (2) with the arc of a circular curve
to the left having a radius of 465.84 ft., a chord bearing and distance of N. 85-52-47 E. 254.39 feet and an arc distance of 257.66
ft. to an iron located beneath the pavement in the western margin of a paved 20 ft. alley way; thence with the western margin of
said alley way N. 03-10-25 W. 195.06 ft. to an iron pipe located in the southern margin of the right-of-way of West Morehead Street;
thence with said margin of West Morehead Street and with the arc of a circular curve to the right having a radius of 1263.11 ft.,
a chord bearing and distance of N. 86-02-44 W. 280.50 ft. and an arc distance of 281.08 ft. to the point and place of BEGINNING;
containing 1.5544 acres; as shown on a survey by R. B. Pharr & Associates, P.A., dated October 4, 1999, and being Lot 1 in
Block D of Wesley Heights as shown on a map recorded in Map Book 3 at Page 540 in the Office of the Register of Deeds for Mecklenburg
County, North Carolina.


 


PARCEL 2


BEGINNING at an iron stake in the easterly
margin of South Summit Avenue and the southerly margin of the P. and N. right of way, said point of beginning being S. 11-45 W.
245 feet from the southerly margin of West Morehead Street, thence, along the easterly margin of South Summit Avenue S. 11-45 W.
145 feet to a point in the northerly margin of Bryant Street; thence, along the northerly margin of Bryant Street, S. 78-15 E.
84.69 feet, to an iron stake and a point of curve; thence, with the arc of a circular curve to the left of radius of 1146.28 feet,
a distance of 333.11 feet, to an iron stake in the northerly margin of Bryant Street and the westerly margin of a twenty foot alley;
thence, with the westerly line of said alley N. 12-57 W. 183.51 feet to a point in the westerly margin of said alley and southerly
margin of P. and N. right of way; thence, along the southerly margin of said right of way and with the arc of a circular curve
to the right of radius 490.84 feet, a distance of 247.64 feet, a bearing and chord of S 85-12-08 W 245.01', to a point on curve
on said right of way; thence, along the southerly margin of P. and N. right of way N. 78-15 W. 101.59 feet to the point and place
of BEGINNING, said lot being designated as Lot 2, Block D, Wesley Heights, as shown in Map Book 3, Page 540, of the Mecklenburg
County Public Registry, North Carolina.


 




    	 	Exhibit A	 



     

    

 


PARCEL 3


BEGINNING at a #4 rebar located on the
northern margin of Bryant Street at the southeast corner of the property of Southern Apartment Group-49, LLC (Deed Book 28056,
Page 975); thence N. 12-57-00 W. 183.51’ to a #4 rebar; thence along a curve to the right, with a radius of 490.84, an arc
of 10.07’, and bearing and chord of S 70-09-42 W. 10.07’, to a computed point; thence S. 12-57-00 E. 186.09’
to a computed point, located on the northern margin of Bryant Street; thence with the northern margin of Bryant Street, along a
curve to the left, with a radius of 1146.28’, an arc of 10.09’, and bearing and chord of S. 84-50-51 W. 10.09’
to the point and place of BEGINNING, containing 0.042 acres, more or less.


 


PARCEL 4


BEGINNING at a nail in the Eastern margin
of S. Summit Avenue, said point being located S. 11-45-00 W. 220.00’ from a nail in the sidewalk located at the intersection
of the Eastern margin of S. Summit Avenue and the Southern margin of West Morehead Street; thence running with Lot #1, Block D,
Map Book 3, Page 540 (Mecklenburg County Registry) S. 78-15-00 E. 83.45’ to a point; thence continuing with Lot #1, along
a curve to the left having a radius of 465.84’, an arc length of 257.66’, a chord of 254.39’ and bearing of N.
85-52-47 E. to an old iron pipe; thence S. 06-46-31 E. 26.14’ to a #4 rebar located at the northeasternmost corner of Lot
#2-A, Map Book 3, Page 540; thence with the Northern boundary line of said Lot #2-A, along a curve to the right having a radius
of 490.84’, an arc length of 247.63’, a chord of 245.01’ and a bearing of S. 85-12-08 W. to a point; thence continuing
with Lot #2-A, N. 78-15-00 W. 101.59’ to a nail along the Eastern margin of S. Summit Avenue; thence with the margin of S.
Summit Avenue, N 11-45-00 E. 25.00’ to the point and place of BEGINNING, containing 0.201 acres, more or less, as shown on
a survey by Robert J. Dedmon Dated February 6, 2013.


 




    	 	Exhibit A	 



     

    

 


EXHIBIT B


DEVELOPMENT BUDGET


 


CAPITAL BUDGET SUMMARY


West Morehead Site


Charlotte, NC


Update


 


	 	 	Total	 	 	Cost Per	 	 	Cost Per	 
	Budget Category	 	Cost	 	 	Unit	 	 	NRSF	 
	 	 	 	 	 	 	 	 	 	 
	LAND COSTS	 	 	 	 	 	 	 	 	 	 	 	 
	Purchase Price & Deposits	 	$	5,500,000	 	 	$	19,164	 	 	$	22.26	 
	Commissions	 	 	-	 	 	 	-	 	 	 	-	 
	Closing Costs  & Title Insurance	 	 	73,875	 	 	 	257	 	 	 	0.30	 
	Other Land *	 	 	(899,149	)	 	 	(3,133	)	 	 	(3.64	)
	Property Taxes	 	 	106,824	 	 	 	372	 	 	 	0.43	 
	TOTAL LAND COSTS	 	$	4,781,551	 	 	$	16,660	 	 	$	19.35	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	SOFT COSTS	 	 	 	 	 	 	 	 	 	 	 	 
	Legal Costs	 	$	380,000	 	 	$	1,324	 	 	$	1.54	 
	Design Costs	 	 	2,138,032	 	 	 	7,450	 	 	 	8.65	 
	Permit & Fee Costs	 	 	484,000	 	 	 	1,686	 	 	 	1.96	 
	Marketing Costs	 	 	860,000	 	 	 	2,997	 	 	 	3.48	 
	Finance Costs	 	 	 	 	 	 	 	 	 	 	 	 
	Construction Loan Interest & Fees	 	 	915,322	 	 	 	3,189	 	 	 	3.70	 
	Misc. Financing Costs	 	 	80,316	 	 	 	280	 	 	 	0.33	 
	Other Soft Costs	 	 	 	 	 	 	 	 	 	 	 	 
	Development Fee	 	 	1,553,750	 	 	 	5,414	 	 	 	6.29	 
	Operating Deficits	 	 	53,280	 	 	 	186	 	 	 	0.22	 
	Soft Cost Contingency	 	 	1,148,000	 	 	 	4,000	 	 	 	4.65	 
	TOTAL SOFT COSTS	 	$	7,612,700	 	 	$	26,525	 	 	$	30.81	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	HARD COSTS	 	 	 	 	 	 	 	 	 	 	 	 
	GMAX Contract	 	$	38,080,457	 	 	$	132,685	 	 	$	154.10	 
	Hard Cost Contingency	 	 	2,284,827	 	 	 	7,961	 	 	 	9.25	 
	Builder’s Risk Insurance	 	 	357,876	 	 	 	1,247	 	 	 	1.45	 
	Construction Management Fee	 	 	409,512	 	 	 	1,427	 	 	 	1.66	 
	Misc. Hard Costs	 	 	228,000	 	 	 	794	 	 	 	0.92	 
	TOTAL HARD COSTS	 	$	41,360,673	 	 	$	144,114	 	 	$	167.37	 
	TOTAL EXPECTED INVESTMENT	 	$	53,754,923	 	 	$	187,299	 	 	$	217.52	 





 




    	 	Exhibit B	 



     

    

 


EXHIBIT C


CONSTRUCTION SCHEDULE


 


	 	 	Construction

 Start Date	 	First Units 

Date	 	
        50% Units

        Delivered

        Date
	 	
        100% Units

        Delivered

        Date

	West Morehead	 	 	 	 	 	 	 	 
	Target Date	 	Apr-16	 	Aug-17	 	Jan-18	 	May-18
	Default Date	 	TBD	 	TBD	 	TBD	 	TBD




 


NOTE: The Default Date will be updated concurrent
with the commencement of construction.


 




    	 	Exhibit C