Contract analysis

ARTICLE I — DEFINITIONS As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Agreement shall have the meanings ascribed to them in the Operating Agreement. "Affiliate" shall mean, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. For purposes

ARTICLE II — APPOINTMENT AND TERM

Section 2.1 — Appointment Owner hereby engages Fairwater as the exclusive development manager for the Project. Fairwater hereby accepts such engagement and agrees to perform the Development Services in accordance with the terms and conditions set forth in this Agreement. The engagement of Fairwater as Development Manager is exclusive, and Owner shall not, during the term of this Agreement, engage any other party to p

Section 2.2 — Term The term of this Agreement (the "Term") shall commence on the Commencement Date and shall continue until the earliest to occur of the following: (a) the date of Substantial Completion of the Project (estimated September 2028), as certified in accordance with the GMP Contract; (b) the date of termination of this Agreement pursuant to Article IX; or (c) the date of dissolution or winding up of Owner

Section 2.3 — Relationship to Operating Agreement The Parties acknowledge and agree that this Agreement is entered into pursuant to, and is subject to, the Operating Agreement. The rights, obligations, and authority of Development Manager under this Agreement are in all respects subject to the terms and provisions of the Operating Agreement, including, without limitation, the Major Decision consent rights of Prescott

ARTICLE III — SCOPE OF DEVELOPMENT SERVICES

Section 3.1 — General Scope Development Manager shall provide comprehensive development management services for all phases of the Project, from pre-construction through Substantial Completion, as more particularly described in Sections 3.2 through 3.10 of this Article III (collectively, the "Development Services"). The Development Services shall include all services reasonably necessary and appropriate for the effici

Section 3.2 — Pre-Construction Services Development Manager shall perform the following pre-construction services: (a) Coordination of the final design development and construction document phases with the Project architect, Whitfield + Sato Architecture, P.C., and all design consultants engaged for the Project, including review and approval of design submissions, value engineering analysis, and coordination of desig

Section 3.3 — Construction Oversight and Administration Development Manager shall perform the following construction oversight and administration services throughout the construction period: (a) Day-to-day oversight and management of Pinnacle General Contractors, Inc. under the GMP Contract, including regular communication with the General Contractor's project team, participation in weekly project meetings, and coord

Section 3.4 — Budget Management Development Manager shall perform the following budget management services: (a) Preparation and ongoing maintenance of the Approved Budget, including monthly cost tracking, forecasting, and variance analysis across all budget categories; (b) Monitoring of actual expenditures versus budgeted amounts across all line items, including land acquisition costs ($54,000,000), hard costs ($432,

Section 3.5 — Contractor and Consultant Coordination Development Manager shall perform the following contractor and consultant coordination services: (a) Management and administration of all contracts with subcontractors, architects, engineers, environmental consultants, and other Project consultants, including monitoring performance, processing invoices, and enforcing contractual obligations; (b) Procurement of addi

Section 3.6 — Permitting and Governmental Compliance Development Manager shall perform the following permitting and governmental compliance services: (a) Obtaining and maintaining all governmental permits, licenses, approvals, and authorizations required for the construction and development of the Project, including building permits, grading permits, sediment and erosion control permits, storm water management approv

Section 3.7 — Insurance Administration Development Manager shall perform the following insurance administration services: (a) Procurement and maintenance of all Project insurance required under this Agreement, the Operating Agreement, the Construction Loan documents, and the GMP Contract, including without limitation: (i) Builder's risk insurance providing coverage for the full replacement cost of the Project during

Section 3.8 — Financing Coordination Development Manager shall perform the following financing coordination services: (a) Coordination with Meridian National Bank, N.A. (contact: Kevin P. Driscoll, Senior Vice President, Real Estate Finance) for all Construction Loan administration, including preparation and submission of monthly draw requests, compilation of required supporting documentation (including contractor pa

Section 3.9 — Pre-Leasing and Marketing Coordination Development Manager shall perform the following pre-leasing and marketing coordination services: (a) Development and implementation of a comprehensive leasing and marketing strategy for the residential units and ground-floor retail space, including market analysis, competitive positioning, pricing strategy, and targeted marketing campaigns; (b) Engagement and overs

Section 3.10 — Substantial Completion and Transition Development Manager shall perform the following Substantial Completion and transition services: (a) Oversight and management of punch list completion in coordination with the General Contractor, the Project architect, and Owner's designated representatives; (b) Coordination of certificate of occupancy applications with the Baltimore City Department of Housing and C

ARTICLE IV — STANDARD OF PERFORMANCE

Section 4.1 — Standard of Care Development Manager shall perform the Development Services in a diligent, professional, and competent manner consistent with the standards of care, skill, and diligence customarily exercised by experienced development managers of comparable Class A mixed-use projects in the Baltimore metropolitan area. Development Manager shall use commercially reasonable efforts to complete the Project

Section 4.2 — Compliance with Laws Development Manager shall perform all Development Services in compliance with all applicable federal, state, and local laws, regulations, ordinances, codes, rules, and orders, including without limitation Maryland real estate laws, Maryland environmental laws, Baltimore City building codes and zoning requirements, the Americans with Disabilities Act, the Fair Housing Act, OSHA requi

Section 4.3 — Key Personnel Marcus D. Okonkwo, Executive Vice President, Development, Fairwater Real Estate Investment Trust, shall serve as the primary individual responsible for the day-to-day performance of the Development Services on behalf of Development Manager. The Key Personnel and their respective roles are set forth in Exhibit C attached hereto. Development Manager shall not remove, reassign, or materially

Section 4.4 — No Conflicts Development Manager shall not engage in any activity, accept any engagement, or maintain any interest that conflicts with its duties and obligations under this Agreement or the Operating Agreement. Without limiting the foregoing, Development Manager shall not, during the Term of this Agreement, directly or indirectly manage or develop any competing project within a two (2)-mile radius of th

ARTICLE V — DEVELOPMENT MANAGEMENT FEE

Section 5.1 — Fee Amount In consideration of the performance of the Development Services, Owner shall pay to Development Manager a development management fee (the "Development Management Fee") equal to three and one-half percent (3.5%) of Hard Costs. Based on the budgeted Hard Costs of Four Hundred Thirty-Two Million Dollars ($432,000,000) set forth in the Approved Budget, the total Development Management Fee is Fift

Section 5.2 — Payment Schedule The Development Management Fee shall be earned and paid monthly in arrears, on a pro rata basis corresponding to the Hard Costs actually incurred during each calendar month. The monthly payment of the Development Management Fee shall be calculated as follows: Monthly Fee Payment = Hard Costs Incurred in Calendar Month × 3.5% Development Manager shall submit a written invoice to Owner, t

Section 5.3 — Adjustment for Budget Changes In the event that the Approved Budget is amended to increase or decrease Hard Costs (subject to the Budget Variance Threshold and Prescott Investor consent requirements under the Operating Agreement), the Development Management Fee shall be automatically recalculated based on the revised Hard Costs at the rate of three and one-half percent (3.5%). Any adjustment shall be ap

Section 5.4 — Source of Payment The Development Management Fee is a Project cost and shall be included as a line item in the Approved Budget under the soft costs category. Payments of the Development Management Fee may be funded from Construction Loan draw proceeds (subject to Lender's approval and the terms of the Construction Loan documents) or from equity contributions made by the members of Owner pursuant to the

Section 5.5 — No Other Fees During Construction During the Term of this Agreement, Development Manager shall not be entitled to any asset management fee, construction management oversight fee, acquisition fee, disposition fee, or other compensation from Owner or the JV with respect to the Project, other than the Development Management Fee as set forth in this Article V. For the avoidance of doubt, the following fees

ARTICLE VI — REPORTING OBLIGATIONS

Section 6.1 — Monthly Reports Development Manager shall prepare and deliver to Owner a written monthly development report (the "Monthly Report") within ten (10) business days after the end of each calendar month. Each Monthly Report shall include, at a minimum, the following: (a) A narrative summary of construction progress during the preceding month, including a comparison of actual progress against the Approved Sch

Section 6.2 — Quarterly Reports In addition to the Monthly Reports, Development Manager shall prepare and deliver to Owner a comprehensive quarterly development report (the "Quarterly Report") within twenty (20) business days after the end of each calendar quarter. Each Quarterly Report shall include, at a minimum, the following: (a) Detailed financial reporting, prepared in coordination with Alderman & Fields, CPAs,

Section 6.3 — Ad Hoc Reporting Development Manager shall promptly report to Owner (and, where applicable, to Lender) any material events or circumstances affecting the Project, including without limitation: (a) Any casualty, fire, flood, structural failure, accident, or environmental incident occurring at or affecting the Property; (b) Any threatened or actual litigation, arbitration, governmental investigation, or r

Section 6.4 — Access and Inspection Owner and its members (including Prescott Investor and its representatives, agents, and advisors) shall have reasonable access to the Project site, the books and records of Development Manager relating to the Project, and all Project-related files, correspondence, and documentation maintained by Development Manager, upon reasonable prior notice and during normal business hours. Dev

ARTICLE VII — AUTHORITY AND LIMITATIONS

Section 7.1 — Delegated Authority Subject to the limitations set forth in this Article VII and the Operating Agreement, Development Manager shall have the authority to act on behalf of Owner in the ordinary course of Project development, including without limitation the execution of contracts with contractors, consultants, and vendors; the engagement of professional service providers; the approval and payment of expe

Section 7.2 — Major Decision Limitations Notwithstanding anything in this Agreement to the contrary, Development Manager shall not take any action, or authorize or permit any action to be taken, that constitutes a Major Decision under the Operating Agreement without first obtaining the prior written consent of Prescott Investor. Without limiting the generality of the foregoing, the following actions require the prior

Section 7.3 — GMP Contract Administration Development Manager shall administer the GMP Contract on behalf of Owner, including without limitation review and approval of monthly pay applications and lien waivers, negotiation and processing of Change Orders, enforcement of schedule milestones and liquidated damages provisions, monitoring of safety and quality programs, and management of any disputes or claims arising un

Section 7.4 — Sub-delegation Development Manager may delegate specific tasks and responsibilities within the scope of the Development Services to qualified personnel within Fairwater's organization or to qualified third-party consultants and service providers, provided that: (a) any such delegation shall not relieve Development Manager of its obligations and responsibilities under this Agreement; (b) Development Mana

ARTICLE VIII — REPRESENTATIONS AND WARRANTIES

Section 8.1 — Development Manager's Representations and Warranties Development Manager hereby represents and warrants to Owner, as of the Commencement Date, as follows: (a) Organization. Development Manager is a real estate investment trust duly organized, validly existing, and in good standing under the laws of the State of Maryland. Development Manager's Maryland State Department of Assessments and Taxation ("SDAT"

Section 8.2 — Owner's Representations and Warranties Owner hereby represents and warrants to Development Manager, as of the Commencement Date, as follows: (a) Organization. Owner is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. Owner's federal employer identification number is 84-6213950 (applied for). Owner is duly registered to do busines

Section 9.1 — Termination for Cause Owner may terminate this Agreement upon the occurrence of any of the following events: (a) A material breach by Development Manager of any of its obligations under this Agreement that remains uncured for a period of thirty (30) days after written notice from Owner specifying the nature of such breach in reasonable detail (consistent with the default cure period under the Operating

Section 9.2 — Termination Without Cause Owner may terminate this Agreement at any time without cause upon not less than ninety (90) days' prior written notice to Development Manager. Any such termination without cause shall not, in and of itself, constitute a removal of Fairwater Manager as Managing Member under the Operating Agreement, and the rights and obligations of the parties under the Operating Agreement shall

Section 9.3 — Termination by Development Manager Development Manager may terminate this Agreement upon Owner's material breach of any of its obligations under this Agreement (including, without limitation, the failure to pay the Development Management Fee when due) that remains uncured for a period of thirty (30) days after written notice from Development Manager specifying the nature of such breach in reasonable det

Section 9.4 — Effect of Termination (a) Termination for Cause. Upon termination of this Agreement by Owner for cause pursuant to Section 9.1, Development Manager shall forfeit any accrued but unpaid Development Management Fee attributable to the calendar month in which the termination becomes effective. Consistent with the Operating Agreement, upon removal of Fairwater Manager for cause, Fairwater's promote/carried i

Section 9.5 — Survival The following provisions shall survive the expiration or termination of this Agreement: Article X (Indemnification), Article XII (Confidentiality), Article XIII (Books, Records, and Audit Rights), this Section 9.5, and any other provisions that by their nature or express terms are intended to survive termination.

Section 10.1 — Development Manager Indemnification Development Manager shall indemnify, defend, and hold harmless Owner and its members (including Prescott Investor), and their respective managers, officers, directors, employees, agents, representatives, successors, and assigns (collectively, the "Owner Indemnified Parties"), from and against any and all losses, claims, damages, liabilities, costs, and expenses (incl

Section 10.2 — Owner Indemnification Owner shall indemnify, defend, and hold harmless Development Manager and its trustees, officers, directors, employees, agents, representatives, successors, and assigns (collectively, the "Development Manager Indemnified Parties"), from and against any and all Losses arising out of or resulting from (a) any material breach by Owner of its representations, warranties, covenants, or

Section 10.3 — Limitation of Liability (a) Except