Exhibit 10.1

EXECUTION VERSION

OPERATING AGREEMENT

OF BR-TBR WHETSTONE VENTURE, LLC

THIS OPERATING AGREEMENT (this “Agreement”) is made and entered into this 20 ^th day of May, 2015, by and between TRIBRIDGE CO-INVEST 27, LLC, a Georgia limited liability company (the “TriBridge Member”) and BR WHETSTONE MEMBER, LLC, a Delaware limited liability company (the “BR Member”).

BACKGROUND INFORMATION :

A.          BR-TBR Whetstone Venture, LLC (the “Company”) was formed effective as of the 10th day of April, 2015 by the filing of its Certificate of Formation with the Secretary of State of Delaware.

B.           The Company is the sole member of BR-TBR Whetstone Owner, LLC, a Delaware limited liability company (the “Borrower”).

C.           The Borrower holds legal title to the Property (as defined below).

D.           The TriBridge Member and the BR Member desire to enter into this Agreement to reflect the current business arrangement among the Members.

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agree as follows:

ARTICLE 1.
DEFINITIONS

In addition to terms defined in the body of this Agreement, the following terms used in this Operating Agreement shall have the following meanings (unless otherwise expressly provided herein);

“Act” means the Delaware Limited Liability Company Act, as amended from time to time.

“Additional Member.” A member other than an Initial Member, who has acquired a Membership Interest from the Company.

“Adjusted Capital Account Deficit” The deficit balance, if any, in the Member’s Capital Account as of the end of the relevant taxable year, after giving effect to the following adjustments: (a) the deficit shall be decreased by the amounts which the Member is deemed obligated to restore pursuant to Regulation Section 1.704-1(b)(2)(ii)(c); and (b) the deficit shall be increased by the items described in Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6).

“Additional Capital Contributions.” With respect to each Member, all additional Capital Contributions made by such Member in excess of their Initial Capital Contribution amounts.

“Additional Contribution Priority Return.” Repayment of a Member’s Additional Capital Contributions at a sixteen percent (16%) Internal Rate of Return, except that if the contribution is made as a Shortfall, then such contribution shall instead earn a twenty percent (20%) Internal Rate of Return.

“Affiliate.” (i) In the case of an individual, any relative of such Person, (ii) any officer, director, trustee, partner, manager, employee or holder of ten percent (10%) or more of any class of the voting securities of or equity interest in such Person; (iii) any corporation, partnership, limited liability company, trust or other entity controlling, controlled by or under common control with such Person; or (iv) any officer, director, trustee, partner, manager, employee or holder of ten percent (10%) or more of the outstanding voting securities of any corporation, partnership, limited liability company, trust or other entity controlling, controlled by or under common control with such Person.

“Available Cash.” The cash funds of the Company on hand as of a particular time after payment of all current operating expenses of the Company as of such time, less any Reserve(s) approved in accordance with this Agreement in order to provide for the payment of the Company’s and Borrower’s outstanding and unpaid obligations or for any other lawful purpose.

“Bankruptcy.” The filing by a Person of a voluntary petition or otherwise initiating proceedings (a) to have the Person adjudicated insolvent; (b) seeking an order for relief of the Person as debtor under the United States Bankruptcy Code; (c) seeking any composition, reorganization, readjustment, liquidation, dissolution, or similar relief under the present or any future federal bankruptcy laws or any other present or future applicable federal, state, or other statute or law relative to bankruptcy, insolvency, or other relief for debtors with respect to the Person; or (d) seeking the appointment of any trustee, receiver, conservator, assignee, sequestrator, custodian, liquidator (or other similar official) of the Person, or of all or any substantial part of its property, or make any general assignment for the benefit of creditors of the Person.

“Bridge Loan.” That certain bridge loan from KeyBank National Association in the approximate principal amount of $25,147,500, which bridge loan will be used to finance the acquisition of the Project by the Borrower.

“Capital Account.” A capital account maintained in accordance with the rules contained in Treas. Reg. Section 1.704-1(b)(2) as maintained in accordance with applicable rules under the Code and as set forth in Treas. Reg. Section 1-704-1(b)(2)(4) as amended from time to time.

“Capital Contribution.” The total amount of cash and the Gross Asset Value of any property contributed or agreed to be contributed to the Company by each Member pursuant to terms of this Agreement (minus any liabilities that the Company assumes or takes subject to).

“Capital Percentage.” The Capital Percentage of each Member is set forth on Exhibit A , except as otherwise adjusted under the Agreement .

“Capital Proceeds” means (a) the net proceeds of a Capital Transaction after (i) payment of all expenses associated with the Capital Transaction, (ii) repayment of all secured and unsecured Company debts (other than an obligation incurred in order to effect a refinancing which is the applicable Capital Transaction) required to be paid in connection with such Capital Transaction or that the Managers determine should be paid in connection with such Capital Transaction, and (iii) such amounts retained as Reserves and (b) any amounts included in Reserves derived from Capital Contributions and/or Capital Transactions which the Managers reasonably determine to distribute.

“Capital Transaction” means (i) a transaction pursuant to which the indebtedness secured by the Project is financed or refinanced by the Borrower; (ii) a sale, condemnation, exchange or casualty not followed by reconstruction, or other disposition, whether by foreclosure or otherwise, of the Project or any part thereof by the Borrower; or (iii) an insurance recovery or any other transaction with respect to the Borrower which, in accordance with generally accepted accounting principles, is considered capital in nature.

“Certificate of Formation.” The certificate of formation of the Company filed with the Delaware Secretary of State as required by the Act, as such certificate of formation may be amended or amended and restated from time to time.

“Code.” The Internal Revenue Code of 1986, as amended from time to time.

“Cost-Sharing Agreement.” That certain Agreement Regarding Purchase and Sale Contract & Acquisition Loan Fees and Deposits by and between Affiliates of the Members and dated February 20, 2015.

“Cost Overrun” shall mean any cost overruns incurred in connection with the construction of the Parking Improvements.

“Debt Service” means, for any period, scheduled principal, interest and other required payments owing on the Bridge Loan or any other Loan of the Company or the Borrower.

“Debt Service Shortfall” means for any period, the amount by which (i) Debt Service exceeds (ii) the sum of (a) Available Cash for such period and (b) amounts released from Reserves (including Reserves under the Bridge Loan or any other Loan, as hereinafter defined, or any subsequent loan) during such period for payment of Debt Service.

“Depreciation” means, for each fiscal year or other period, an amount equal to the depreciation, amortization and other cost recovery deductions allowable with respect to an asset for such fiscal year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such fiscal year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization and other cost recovery deductions for such fiscal year or other period bears to such beginning adjusted tax basis; provided, however , if the adjusted basis for federal income tax purposes of an asset at the beginning of such fiscal year or other period is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the Managers.

“Distributions.” The distributions payable (or deemed payable) to a Member.

“Economic Interest.” A Member’s or Economic Interest Owner’s share of one or more of the Company’s Profits, Losses and distributions of the Company’s assets pursuant to this Operating Agreement and the Act, but shall not include any right to vote on, consent to or otherwise participate in any decision of the Members or Managers.

“Economic Interest Owner.” The owner of an Economic Interest who is not a Member.

“Entity.” Any general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative or association or any foreign trust or foreign business organization.

“Fiscal Year.” The Company’s fiscal year, which shall be the calendar year.

“Foreign Corrupt Practices Act” shall mean the Foreign Corrupt Practices Act of the United States, 15 U.S.C. Sections 78a, 78m, 78dd-1, 78dd-2, 78dd-3, and 78ff, as amended, if applicable, or any similar law of the jurisdiction where the Property is located or where the Company or any of its Subsidiaries transacts business or any other jurisdiction, if applicable.

“Gross Asset Value.” With respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

(a)          The initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset on the date of the contribution, as agreed to and set forth in Exhibit A and, otherwise, as determined by the Managers;

(b)          The Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values in accordance with Regulations Section 1.704-1(b)(2)(iv)(g) (taking Code Section 7701(g) into account), as determined by agreement of the Managers, as of the following times: (1) the acquisition of an additional Membership Interest by any new or existing Member in exchange for more than a de minimis Capital Contribution; (2) the distribution by the Company to a Member of more than a de minimis amount of property as consideration for a Membership Interest; (3) the grant of a Membership Interest in the Company (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Company by a new or existing Member acting in a Member capacity or in anticipation of being a Member; provided, however, that an adjustment pursuant to clauses (1), (2) and (3) shall be made only if the Managers reasonably determine that such adjustment is necessary or appropriate to reflect the relative economic interests of the Members in the Company; and (4) the liquidation of the Company within the meaning of Regulations Section 1.704-1(b)(2)(ii)( g );

(c)          The Gross Asset Value of any Company asset distributed to any Member (taking Code Section 7701(g) into account) shall be adjusted to equal the gross fair market value of such asset on the date of distribution as reasonably determined by the Managers; and

(d)          The Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 732(d), 734(b) or 743(b), but only to the extent that the adjustment is taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)( m ), provided that Gross Asset Values will not be adjusted under this paragraph (d) to the extent that the Managers reasonably determine that an adjustment under paragraph (b) above is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment under this paragraph (d).

(e)          If the Gross Asset Value of an asset has been determined or adjusted pursuant to paragraph (a), (b) (c) or (d) hereof, such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Profits and Losses.

(f)          In all other cases, Gross Asset Value of any Company asset means the adjusted basis of such asset for federal income tax purposes.

“Initial Capital Contribution.” The initial contribution to the capital of the Company made by a Member pursuant to this Operating Agreement. The Initial Capital Contributions of the Initial Members due upon execution of this Agreement are set forth on Exhibit A .

“Initial Members.” Those persons identified on Exhibit A attached hereto and made a part hereof by this reference, who have executed this Agreement.

“Internal Rate of Return” and “IRR.” As of any date, the internal rate of return on the sum of the applicable Capital Contributions made by a Member (including giving credit for the 3:1 multiplier on the Member’s Additional Capital Contributions as may occur under Section 8.04(d)), to such date calculated to be that discount rate (expressed on a per annum basis) which, when compounded annually and applied to such Capital Contributions and the corresponding Distributions with respect thereto, causes the net present value, as of such date, of such Distributions and Capital Contributions to equal zero. For this purpose, Capital Contributions and Distributions shall be assumed to have occurred as of the first of the month nearest the actual date such Capital Contribution or Distribution is made. The formula used to calculate IRR on monthly cash flows shall be: (1+ IRR Hurdle) ^ (1/12)-1.

“Lender.” Any lender that makes a Bridge Loan or other Loan to Borrower.

“Loan.” The Permanent Loan or any subsequent mortgage loan obtained by Borrower to refinance the Permanent Loan.

“Loan Guaranty” shall mean, collectively, any required guaranty or indemnity, including, without limitation, any recourse-based, project completion or repayment guaranties (each, a “Recourse Guaranty”) and any “bad boy” non-recourse carveout guaranty and/or any environmental indemnification agreement (each a “Non-Recourse Carveout Guaranty”) in connection with the Bridge Loan or any other Loan.

“Managers.” The BR Member and the TriBridge Member, or any other Person(s) that succeed such Persons in their capacities as Managers.

“Member.” Each of the parties who executes a counterpart of this Operating Agreement as a Member and each of the parties who may hereafter become Members. To the extent a Manager has purchased a Membership Interest in the Company, he will have all the rights of a Member with respect to such Membership Interest, and the term “Member” as used herein shall include a Manager to the extent he has purchased such Membership Interest in the Company. If a Person is a Member immediately prior to the purchase or other acquisition by such Person of an Economic Interest, such Person shall have all the rights of a Member with respect to such purchased or otherwise acquired Membership Interest or Economic Interest, as the case may be. The initial Capital Percentages associated with the Membership Interests of the Members are set forth on Exhibit A attached hereto and incorporated herein by reference.

“Membership Interest.” A Member’s entire interest in the Company including such Member’s Economic Interest and the right to participate in the management of the business and affairs of the Company, including the right to vote on, consent to, or otherwise participate in any decision or action of or by the Members granted pursuant to this Operating Agreement or the Act.

“Minimum Gain.” The same meaning set forth in Regulation Section 1.704-2(d). Minimum Gain shall be computed separately for each Member in a manner consistent with the Regulations under Code Section 704(b).

“Net Cash Flow” means, for any period, the total annual cash gross receipts during such period derived from the Project and any and all sources, other than Capital Contributions or as a result of a Capital Transaction during such period, together with any amounts included in Reserves (other than Reserve amounts derived from Capital Contributions or Capital Transactions) or working capital from prior periods which the Managers reasonably determine to distribute, less the (i) Debt Service, (ii) the Operating Expenses paid during such period, and (iii) any increases or replacements in Reserves (other than from Capital Contributions or Net Cash from a Capital Transaction) during such period. For purposes hereof, Net Cash Flow determined at the Borrower level shall be deemed to be the Net Cash Flow for the Company, without any duplication.

“Nonrecourse Deductions.” The same meaning set forth in Regulation Section 1.704-2(b)(1). The amount of Nonrecourse Deductions for a taxable year of the Company equals the net increase, if any, in the amount of Minimum Gain during that taxable year, determined according to the provisions of Regulation Section 1.704-2(c).

“Operating Agreement.” This Operating Agreement as originally executed and as amended from time to time, also referred to herein as the “Agreement,” from time to time.

“Operating Expenses” for the purposes herein, means the cash expenditures made by the Borrower in connection with owning and operating the Project or otherwise conducting its business; provided, that, notwithstanding the foregoing, Operating Expenses shall not include any cash or capital expenditures expended out of established and accumulated cash Reserves of the Company or Borrower used for the particular purpose for which such Reserves were established or not otherwise allocated for specific purposes.

“Parking Improvements” shall mean the additional improvements to be constructed by the Borrower with respect to the existing parking garage at the Project for the construction of an additional level to the Project’s existing parking deck; which addition is expected to increase the parking stalls in the parking deck by approximately 65 stalls and which construction is expected to commence in late 2015 or early 2016 and take approximately 3 months to complete once commenced. The anticipated costs for the construction of the Parking Improvements are the subject of the Total Project Budget.

“Permanent Loan” shall mean the Loan to refinance the Bridge Loan.

“Person.” Any individual or Entity, and the heirs, executors, administrators, legal representatives, successors, and assigns of such “Person” where the context so permits.

“Principals” mean Steve Broome, Lee Walker and Robert West.

“Profits or Losses” means, for each Fiscal Year or other period, an amount equal to the Company’s taxable loss or income, respectively, for such Fiscal Year or period, determined in accordance with Section 703(a) of the Code (and for this purpose, all items of income, gain, loss, or reduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or loss), with the following adjustments:

(a)          Any income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses shall be added to such taxable income or loss;

(b)          Any expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) expenditures pursuant to Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses shall be subtracted from such taxable income or loss;

(c)          In the event the Gross Asset Value of any Company asset is adjusted pursuant to paragraph (b) or (c) of the definition thereof, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Profits or Losses;

(d)          Gain or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

(e)          In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for the Fiscal Year or other period;

(f)          To the extent an adjustment to the tax basis of any Company asset pursuant to Code Section 734(b) is required pursuant to Treasury Regulation §1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than a complete liquidation of Member’s interest in the Company, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Profits or Losses; and

(g)          Any items which are specially allocated pursuant to Article 10 hereof shall not be taken into account in computing Profits or Losses but shall be determined by applying rules analogous to those set forth in paragraphs (a) through (d) of this definition.

If the profit or loss for such Fiscal Year or other period, as adjusted in the manner provided herein, is a positive amount, such amount shall be the Profits for such Fiscal Year or other period; and if negative, such amount shall be the Losses for such Fiscal Year or other period.

“Project” An existing 204-unit rental apartment complex located upon the Property and commonly known as Whetstone Apartments.

“Project Stabilization” means the Project is at least 90% leased up by third party tenants.

“Property.” That certain property located in Durham, North Carolina which is more particularly described in Exhibit B attached hereto and incorporated herein upon which the Project is located.

“REIT” shall mean a real estate investment trust as defined in Code Section 856.

“REIT Member” shall mean any Member, if such Member is a REIT or a direct or indirect subsidiary of a REIT.

“REIT Requirements” shall mean the requirements for qualifying as a REIT under the Code and Regulations.

“Reserves.” With respect to any fiscal period, funds set aside or amounts allocated to reserves for the Project during such period which shall be maintained in amounts deemed sufficient by the TriBridge Member for working capital, capital expenditures, repairs, replacements and anticipated expenditures for paying taxes, insurance, Debt Service or other costs or expenses incident to the ownership or operation of the Company’s business; provided that, BR Member shall have the right to reasonably approve the amount of any such Reserves.

“Total Project Budget.” The Parking Improvement construction budget annexed hereto as Exhibit D , as the same may be amended and updated from time to time by the mutual consent of all of the Members and, to the extent required, approved by the lender under the Bridge Loan.

“Transferring Member.” A Member or Economic Interest Owner who sells, assigns, pledges, hypothecates or otherwise transfers for consideration or gratuitously all or any portion of its Membership Interest or Economic Interest.

“Treasury Regulations” or “Regulations.” The Federal Income Tax Regulations, including any temporary regulations, promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

“TriBridge Change of Control” shall be deemed to have occurred if any two or more of the three Principals should cease to be actively involved as principals in the day to day operations and management of TriBridge Residential, LLC, TriBridge Investments, LLC, TriBridge Residential Property Management Advisors and the TriBridge Member.

ARTICLE 2.

FORMATION OF COMPANY

2.01        Formation . On April 10, 2015, the Company was formed as a Delaware limited liability company by executing and delivering the Certificate of Formation to the Secretary of State of Delaware in accordance with the provisions of the Act.

2.02        Name . The name of the Company is BR-TBR Whetstone Venture, LLC. The Company may do business under that name and under any other name or names upon which the Members select. If the Company does business under a name other than that set forth in its Certificate of Formation, then the Company shall file a trade name certificate as required by law.

2.03        Principal Place of Business . The principal place of business of the Company is 1575 Northside Drive, Building 100, Suite 200, Atlanta, GA 30318. The Company may locate its places of business at any other place or places as the Managers may from time to time deem advisable.

2.04        Registered Office and Registered Agent . The Company’s initial registered office and the name of its initial registered agent shall be as set forth in the Certificate of Formation. The registered office and registered agent may be changed from time to time by filing the address of the new registered office and/or the name of the new registered agent with the Secretary of State of Delaware pursuant to the Act and the applicable rules promulgated thereunder.

2.05        Term . The term of the Company commenced on the date the Certificate of Formation was filed with the Secretary of State of Delaware and shall continue thereafter in perpetuity unless earlier dissolved in accordance with the provisions of this Operating Agreement or the Act.

ARTICLE 3.

BUSINESS OF COMPANY

3.01        Permitted Businesses . The business of the Company shall be:

(a)          To directly, or indirectly through Borrower, acquire, develop, sell, exchange, construct, improve, subdivide, mortgage, lease, maintain, transfer, operate, own as an investment and/or otherwise engage in all general business activities related or incidental to the ownership and renovation of the Project, either directly or indirectly through ownership of one or more other Entities engaged in the foregoing; and

(b)          To engage in all activities necessary, customary, convenient, or incident to any of the foregoing.

ARTICLE 4.

NAMES AND ADDRESSES OF INITIAL MEMBERS

The names and addresses of the Initial Members are set forth on Exhibit A attached hereto and by this reference made a part hereof.

ARTICLE 5.          

RIGHTS AND DUTIES OF MANAGERS

5.01        Management . The business and affairs of the Company shall be managed by its Managers. Except for situations in which the approval of the Members is expressly required by this Operating Agreement or by nonwaivable provisions of applicable law or as otherwise set forth in this Agreement, the Managers shall have full and complete authority, power and discretion to manage and control the business, affairs and properties of the Company, to make all decisions regarding those matters and to perform any and all other acts or activities customary or incident to the management of the Company’s business. In addition, so long as the Management Company is an Affiliate of the TriBridge Member or the TriBridge Member has not been removed as a Manager under Section 5.09, the Managers hereby delegate to the TriBridge Member the authority to implement any Operating Budget approved in accordance with the terms of this Operating Agreement.

5.02        Number, Tenure and Qualifications . The Company shall have two (2) Managers, and the BR Member and the TriBridge Member shall serve as the initial Managers. Subject to the foregoing, each Manager shall hold office until its successor shall have been elected and qualified or until his earlier death, resignation, or removal. Subject to the foregoing and Section 5.10, the Managers shall be elected by the affirmative vote of all Members.

5.03        Certain Powers of Managers . Subject to the terms of Sections 5.04 and 7.07 below, either Manager shall have power and authority, on behalf of the Company or in the Company’s capacity as a member of Borrower, as applicable:

(a)          To cause Borrower to acquire the Property and to renovate the Project, including undertaking the Parking Improvements.

(b)          To invest any Company funds (by way of example but not limitation) in time deposits, short-term governmental obligations, or other investments, provided the funds in any such investment vehicle are insured by the Federal Deposit Insurance Corporation (or its successor or replacement).

(c)          To execute all instruments and documents, including, without limitation, checks; drafts; notes and other negotiable instruments; purchase and sale agreements, mortgages or deeds of trust; security agreements; financing statements; deeds, contracts, settlement statements, agreements, affidavits and any other documents providing for the acquisition, mortgage or disposition of the Company’s or Borrower’s property; assignments; bills of sale; leases; partnership agreements; operating agreements of other limited liability companies; and any other instruments or documents necessary, in the opinion of the Managers, to the business of the Company.

(d)          To purchase liability and other insurance to protect employees, officers, property and business.

(e)          Subject to Section 5.13, to employ accountants, engineers, architects, surveyors, attorneys, managing agents, leasing agents, and other experts to perform services for the Company and to compensate them from Company funds.

(f)          To enter into any and all other agreements on behalf of the Company, with any other Person for any purpose, in such forms as the Managers may approve.

(g)          To create offices and designate officers, who need not be Members. Any such persons appointed to be officers of the Company may or may not be employees of the Company, any Member, or any Affiliate thereof. Any officers so appointed shall have such authority and perform such duties as the Managers may, from time to time, expressly delegate to them in writing and the officers so appointed shall serve at the pleasure of the Managers.

(h)          Subject to Section 6.05(a), to the extent permissible in connection with the Bridge Loan or any subsequent Loan, to borrow money for the Company from banks, other lending institutions, Managers, Members, or Affiliates of the Managers or Members on such terms as the Managers deem appropriate, and in connection therewith, to hypothecate, encumber and grant security interests in the assets of the Company to secure repayment of the borrowed sums. No debt shall be contracted or liability incurred by or on behalf of the Company except by the Managers or by agents or employees of the Company expressly authorized by the Managers to contract such debts or incur such liability by the Managers.

(i)          To cause Borrower to subdivide the Property or condominiumize the Property, or portions thereof.

(j)          To do and perform all other acts as may be necessary or appropriate to the conduct of the Company’s business, to the extent such acts are not reserved unto the Members pursuant to Section 7.07 of this Agreement.

Unless authorized to do so by this Operating Agreement or by the Managers, no attorney-in-fact, employee or other agent of the Company shall have any power or authority to bind the Company in any way, to pledge its credit or to render it liable pecuniary for any purpose. No Member shall have any power or authority to bind the Company unless the Member has been authorized by the Managers or Members to act as an agent of the Company in accordance with the previous sentence.

5.04        Management Committee .

(a)          The Managers and Members hereby establish a management committee (the “Management Committee”) for the Company for the purpose of the Managers considering and approving actions pursuant to Section 5.03. The Management Committee shall consist of four (4) individuals appointed to act as “representatives” of the Manager and Member that appointed him or her (the “Representatives”) as follows: (i) BR Member shall be entitled to designate two (2) Representatives to represent the BR Member as Manager and Member; and (ii) TriBridge Member shall be entitled to designate two (2) Representatives to represent the TriBridge Member as Manager and Member. The initial members of the Management Committee are set forth on Exhibit A .

(b)          Each Representative as a member of the Management Committee, subject to this Section 5.04(b), shall hold office until death, resignation or removal at the pleasure of the Managers and Member that appointed him or her. If a vacancy occurs on the Management Committee, the Manager with the right to appoint and remove such vacating Representative shall appoint his or her successor. A Manager shall lose its right to have its Representatives vote on any item as of the date on which such Manager ceases to be a Manager, including by means of removal under Section 5.09, or as otherwise provided in this Agreement. If the BR Member transfers all or a portion of its membership interest to a transferee permitted by Section 12.02(a), such transferee shall automatically, and without any further action or authorization by any Manager or Member, succeed to the rights and powers of the BR Member under this Section 5.04 as may be agreed to between the BR Member which is transferring the membership interest, on the one hand, and the permitted transferee to which the membership interest is being transferred, on the other hand, including the shared or unilateral right to appoint the Representatives that the BR Member was theretofore entitled to appoint pursuant to this Section 5.04. If the TriBridge Member transfers all or a portion of its membership interest to a transferee permitted pursuant to Section 12.02(b), such permitted transferee shall automatically, and without any further action or authorization by any Manager or Member, succeed to the rights and powers of the TriBridge Member under this Section 5.04 as may be agreed to between the TriBridge Member which is transferring the membership interest, on the one hand, and the permitted transferee to which the membership interest is being transferred, on the other hand, including the shared or unilateral right to appoint the Representatives that the TriBridge Member was theretofore entitled to appoint pursuant to this Section 5.04.

(c)          The Management Committee shall meet at least once every quarter (unless waived by mutual agreement of the Managers) and as otherwise required. The only Representatives required to constitute a quorum for a meeting of the Management Committee shall be one (1) Representative appointed by BR Member and one (1) Representative appointed by TriBridge Member; provided, however, if any Representative fails to attend any meeting and as a result thereof the Company is unable to obtain a quorum, and thereafter such Representative fails to agree to reschedule and attend any such meeting within 15 days after receipt of written notice that the Company was unable to obtain a quorum (the “Absent Representative”) , then a quorum can be obtained without the attendance of a Representative of the Member who selected the Absent Representative.

(d)          Each of the two (2) Representatives appointed by BR Member shall be entitled to cast two (2) votes on any matter that comes before the Management Committee and each of the Representatives appointed by TriBridge Member shall be entitled to cast one (1) vote on any matter that comes before the Management Committee. Approval by the Management Committee of any matter (other than matters which are Major Decisions under Section 7.07 or which may be made unilaterally by a Member, but only as expressly set forth in this Agreement) shall require the affirmative vote of at least a majority of the votes of the Representatives then in office voting at a duly held meeting of the Management Committee.

(e)          Any meeting of the Management Committee may be held by conference telephone call, video conference or through similar communications equipment by means of which all persons participating in the meeting can communicate with each other. Participation in a telephonic and/or video conference meeting held pursuant to this Section 5.04(e) shall constitute presence in person at such meeting.

(f)          Any action required or permitted to be taken at a meeting of the Management Committee may be taken without a meeting, without prior notice and without a vote if a consent or consents in writing, setting forth the action so taken, shall be signed by Representatives having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all Representatives entitled to vote thereon were present and voted. All consents shall be filed with the minutes of the proceedings of the Management Committee.

5.05        Limitation of Liability . No Manager has guaranteed nor shall have any obligation with respect to the return of a Member’s Capital Contributions or profits from the operation of the Company. Each Manager shall be entitled to rely on information, opinions, reports or statements, including but not limited to financial statements or other financial data prepared or presented in accordance with the provisions of the Act. No Manager shall be liable to the Company or to any Member for good faith negligence or for honest mistakes of judgment or losses or liabilities due to such good faith mistakes or due to the negligence, dishonesty, unlawful acts or bad faith of any employee, broker or other agent, accountant, attorney, other professional or person employed by the Company provided that such person was selected, engaged, retained and supervised by such Manager with reasonable care. No Manager shall have any liability to the Company or to any Member for any loss suffered by the Company which arises out of any action or inaction of such Manager if, prior thereto, such Manager, in good faith, determined that such course of conduct was in, and not opposed to, the best interests of the Company and such course of conduct did not constitute willful misconduct or a material breach of this Agreement or gross negligence. It is the express intention of the parties that the Managers’ standard of care be limited to acting in a manner reasonably believed by them in good faith to be in accordance with their authority under this Agreement, that the Managers’ obligations be limited to those expressly provided in this Agreement, and that any duties of loyalty or care and any and all other fiduciary duties arising at law or in equity, if any, are hereby strictly limited to accord with the provisions of this Section 5.05 and to the performance by the Managers of their express obligations under this Agreement, and any broader duty is hereby waived by the other Members.

5.06        Managers Have No Exclusive Duty to Company . A Manager shall not be required to manage the Company as his or its sole and exclusive function and he or it (or any Manager) may have other business interests and may engage in other activities in addition to those relating to the Company. Neither the Company nor any Member shall have any right, by virtue of this Operating Agreement, to share or participate in such other investments or activities of a Manager or to the income or proceeds derived therefrom. A Manager shall incur no liability to the Company or to any of the Members as a result of engaging in any other business or venture.

5.07        Bank Accounts . The Management Committee may from time to time open bank accounts, brokerage accounts and other accounts in the name of the Company, and the Managers shall be the sole signatories thereon, unless the Management Committee determines otherwise.

5.08        Resignation . Any Manager of the Company may resign at any time by giving written notice to the Members of the Company. The resignation of any Manager shall take effect upon receipt of notice thereof or at such later time as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective. The resignation of a Manager shall also constitute the resignation of such Manager’s Representatives on the Management Committee. The resignation of a Manager who is also a Member shall not affect the Manager’s rights as a Member and shall not constitute a withdrawal of a Member.

5.09        Removal of Managers . At a meeting called expressly for that purpose, a Manager may be removed, by the affirmative vote of all Members (excluding the Membership Interests of the BR Member or its permitted transferee in the event the BR Member or its permitted transferee is the subject of such removal vote and excluding the Membership Interests of the TriBridge Member or its permitted transferee in the event the TriBridge Member or its permitted transferee is the subject of such removal vote), only in the event of any of the following (each a “Removal Event”): (a) a material breach of this Agreement on the part of such Manager or its affiliated Member, which breach shall continue uncured for thirty (30) calendar days after the giving of written notice thereof to such Manager specifying the nature of such breach; (b) a Default Action by a Member (or an Affiliate of such Member) affiliated with such Manager; or (c) gross negligence or willful misconduct on the part of such Manager or any of its Affiliates (including any Affiliated property manager); provided, however, with regard to such acts by Affiliates, only to the extent such acts result in a material adverse effect on the Project, Borrower or the Company. The removal of a Manager shall also constitute the removal of such Manager’s Representatives on the Management Committee. The removal of a Manager as a result of a Removal Event who is also a Member shall not affect the Manager’s rights as a Member and shall not constitute a withdrawal of a Member. In any instance where: (i) any Member is removed as Manager (the “Removed Manager”), the other Member shall cause the Member and/or any Affiliate affiliated with the Removed Manager that executed a guaranty to be released in full from any Loan Guaranty; provided, however, that, if the other Member is unable to obtain such release despite its commercially reasonable efforts to do so, then the other Member (and certain Affiliates reasonably acceptable to the Member Affiliated with the Removed Manager) shall be obligated to jointly and severally indemnify and hold harmless the Member and/or any Affiliate affiliated with the Removed Manager (each, a “Removed Manager Indemnified Party”) pursuant to this Section 5.09 (and without prejudice to any other indemnification right under Section 15) for actual losses and expenses (including reasonable attorney’s fees and costs) incurred by a Removed Manager Indemnified Party arising after the date of removal of the Manager, and resulting from actions taken by the other Member after such date, pursuant to an indemnification agreement in form and substance reasonably satisfactory to the Member affiliated with the Removed Manager, except to the extent the amount sought to be recovered would never be collectible from, or claimed against, the Company but for the fraud, willful misconduct, gross negligence or willful misappropriation of funds by the Removed Manager Indemnified Party; provided, further, the other Member shall not be obligated to indemnify the Member affiliated with the Removed Manager with respect to any action which the other Member has expressly approved of or consented to in writing within two (2) business days following the receipt of written notice from the Member affiliated with the Removed Manager that it intends to take such action. If the other Member has not affirmatively responded to the Member affiliated with the Removed Manager by the end of such two (2) business day period, the other Member shall be deemed to have expressly disagreed with the action. Unless removed from the Loan Guaranty, the Removed Manager and its Affiliates shall remain protected under any applicable Backstop Agreement.

5.10        Vacancies . Any vacancy occurring for any reason in the number of Managers of the Company may be filled by the affirmative vote of all Members (excluding the Membership Interests of BR Member or its permitted transferee to the extent the vacancy results from BR Member or its permitted transferee being removed as Manager and excluding the Membership Interests of TriBridge Member or its permitted transferee to the extent the vacancy results from TriBridge Member or its permitted transferee being removed as Manager). A Manager elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office and shall hold office until the expiration of such term and until his successor shall be elected and shall qualify or until his earlier death, resignation or removal.

5.11        Salaries . The salaries and other compensation of the Managers shall be fixed from time to time by an affirmative vote of all the Members, and no Manager shall be prevented from receiving such salary by reason of the fact that he is also a Member of the Company.

5.12        Parking Garage Construction and Project Management Fee .

5.12.1      Project Manager . Subject to the Members agreeing upon whether to proceed with the construction of the Parking Deck Improvements in accordance with Section 7.07(s), the Company shall engage, or shall cause Borrower to engage, TBR Whetstone Project Management, LLC (“Project Manager”), a North Carolina limited liability company and an Affiliate of the TriBridge Member, to manage the construction of the Parking Improvements (the “Parking Deck Construction Project”). Project Manager’s duties shall involve engaging and overseeing a general contractor for the Parking Deck Construction Project, coordinating and monitoring the work of any other professionals involved in the Parking Deck Construction Project, administering construction contracts for such project, and causing the general contractor to complete the Parking Deck Construction Project in accordance with final plans and specifications approved and provided by Borrower and the Total Project Budget (for avoidance of doubt, the Project Manager shall have no responsibility for Cost Overruns, which shall be governed in accordance with Section 8.04(b) of this Agreement).

5.12.2      Fee . As compensation for the services to be rendered by Project Manager pursuant to the terms of this Section 5.12, the Company shall pay to Project Manager, or cause Borrower to pay to Project Manager, a project management fee (the “Project Management Fee”) equal to five percent (5%) of budgeted hard costs as set forth in the Total Project Budget for the Parking Deck Construction Project as approved by Borrower. The Project Management Fee shall be paid to Project Manager by wire transfer or other immediately available funds as follows: One-half (1/2) of the Project Management Fee shall be paid upon the date of this Agreement and the remaining one-half (1/2) shall be paid upon the issuance of a certificate of substantial completion (or its reasonable equivalent) by either the project architect or general contractor for the Parking Deck Construction Project.

5.12.3      General Contractor . Project Manager shall be responsible for arranging with an arms-length, third-party general contractor a guaranteed maximum price contract for construction of the Parking Improvements, which shall, prior to the execution thereof by Borrower, be reviewed and approved by the BR Member in its sole discretion (the “GMP Contract”); provided, that, the pricing terms set forth in the GMP Contract must in all events comply with the Total Project Budget. The BR Member acknowledges and agrees that the Project Manager anticipates using Barnhill Construction as the general contractor, and as such, the contract shall be arms-length with a GC Fee reasonably approved by the BR Member.

5.12.4      Construction Information . During the construction process, Project Manager will provide to Borrower, Company and BR Member copies of all construction related information, including but not limited to construction draws top sheets with budget-versus-actual information to Borrower, Company and BR Member, plus full physical access to the Property and all documentation in connection therewith.

5.12.5      Project Manager Contribution . Without limitation, and for no additional charge or credit to the TriBridge Member’s Capital Account, the TriBridge Member shall cause Project Manager to contribute to the Borrower all of (a) the design and construction plans for the Parking Improvements (at Project Manager’s actual cost, free and clear of all liabilities) and (b) all other tangible and intangible rights associated with the Parking Improvements and (c) all other items appurtenant to the construction of the Parking Improvements (collectively, the “Project Manager’s Rights”).

5.12.6      Warranties . The TriBridge Member shall cause the Project Manager to use commercially reasonable efforts to cause the general contractor to warrant to the Borrower and the Company the construction of the Parking Improvements for twelve (12) months after the Certificate of Occupancy is received for the Parking Improvements such that the general contractor must promptly correct and repair, at its sole cost and expense, all defects discovered during such period. The Company may assign such warranty and any subcontractor warranties to any third party who purchases the Project from the Borrower during such period.

5.12.7      Joinder . Project Manager has joined in the execution of this Agreement for purposes of evidencing its consent and agreement to abide by the provisions of this Section 5.12.

5.13        Acquisition Fee . At the Closing of the acquisition of the Property, the TriBridge Member or its designee shall earn an acquisition fee equal to $360,000.

5.14        Operating Budget . The Borrower shall operate the Project under a business plan and an annual operating budget (each, an “Operating Budget”) commencing for the 12-month period beginning as of the date of closing of the acquisition of the Property. A copy of the initial agreed upon Operating Budget is annexed hereto as Exhibit C. The TriBridge Member shall deliver to BR Member for their joint approval the subsequent proposed Operating Budget, for each subsequent calendar year, beginning with calendar year 2016, by November 1st of the preceding calendar year. After the Operating Budget has been approved, and for so long as the TriBridge Member’s Affiliate is serving as the property manager of the Project under the Management Agreement, the TriBridge Member shall administratively implement it on behalf of the Borrower and may incur the expenditures and obligations therein provided. No material changes or departures from any item in an approved Operating Budget shall be made or permitted without the prior written approval of BR Member. If an Operating Budget has not been approved by January 1st of any subsequent year, the Borrower shall continue to operate the Project under the Operating Budget for the previous year, with such adjustments as may be necessary to reflect deletion of non-recurring expense items set forth on the previous Operating Budget and positive or negative adjustments in insurance costs, taxes, utility costs and Debt Service payments (collectively “Uncontrollables”); provided, further, if the Members cannot agree on an Operating Budget for the following year, the Management Committee shall establish the Operating Budget for such year taking into account whether any increases to the Operating Budget (other than with respect to Uncontrollables) are reasonably required under the circumstances, and are consistent with the prior use of the Project. The TriBridge Member shall promptly advise and inform the BR Member of any transaction, notice, event or proposal directly relating to the management and operation of the Project, other assets of the Company or Borrower or the Company or the Borrower which does or is likely to significantly affect, either adversely or favorably, the Project, other assets of the Company or Borrower or is expected to cause a material deviation from the Operating Budget.

5.15        Management Company . The Managers shall cause the Borrower to enter into a management agreement, in a form approved by the TriBridge Member and BR Member (the “Management Agreement”) with TriBridge Residential Property Management Advisors, LLC (“Management Company”) to manage, lease-up and operate the Property pursuant to the Management Agreement. The Management Agreement shall require that Management Company operate the Project in a first class manner, and in accordance with the standards and conditions for the type, style, class, use and location of the Property, consistent with the Project’s Operating Budget and providing for payment of a management fee in an amount not to exceed the greater of (i) $5,000 per month and (ii) three percent (3%) of annual gross cash revenues, payable monthly. Subject to the following sentence, the Management Agreement shall be renewed annually, subject to the approval of the Company. The BR Member shall act on behalf of the Company in regard to enforcement of rights under the Management Agreement and with respect to determining whether to renew the Management Agreement annually; provided, however, so long as the Management Company has met lease-up, income, and controllable expenses as projected (expressly excluding expenses of a capital nature resulting from casualty or condemnation or relating to force majeure events) under the Operating Budget for 2015, the Management Agreement will be automatically renewed for 2016 (at all times subject to “cause” termination rights).

5.16        Operation in Accordance with REOC/REIT Requirements .

5.16.1     The Members acknowledge that BR Member or one or more of its Affiliates (an “ BR Affiliate ”) intends to qualify as a “real estate operating company” or “venture capital operating company” within the meaning of U.S. Department of Labor Regulation 29 C.F.R. §2510.3-101 (a “ REOC ”), and agree that the Company and its Subsidiaries shall be operated in a manner that will enable BR Member and such BR Affiliate to so qualify; provided, however, in no event shall the foregoing require any loss of voting or decision rights to the TriBridge Member or result in any adverse effect on the economic rights of the TriBridge Member. Except as disclosed to BR Member, TriBridge Member (a) shall not fund any Capital Contribution with the ‘plan assets’ of any ‘employee benefit plan’ within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or any ‘plan’ as defined by Section 4975 of the Internal Revenue Code of 1986, as amended.

5.16.2     Except for the Property, neither the Company nor its Subsidiaries shall hold any investment, incur any indebtedness or otherwise take any action that would cause any Member of the Company (or any Person holding an indirect interest in the Company through an entity or series of entities treated as partnerships for U.S. federal income tax purposes) to realize any “unrelated business taxable income” as such term is defined in Code Sections 511 through 514, unless specifically agreed to by the Members in writing. No Manager or Member shall be liable for any income or other taxes, damages, costs or expenses incurred by the Company or any Member by reason of the recognition by the Company of UBTI, unless caused by its own willful misconduct or gross negligence and not related to the Property.

5.16.3     The Company (and any direct or indirect Subsidiary of the Company ) may not engage in any activities or hold any assets that would constitute or result in the occurrence of a REIT Prohibited Transaction as defined herein. Notwithstanding anything to the contrary contained in this Agreement, during the time a REIT Member is a Member of the Company, neither the Company, any direct or indirect Subsidiary of the Company, nor any Member of the Company shall take or refrain from taking any action which, or the effect of which, would constitute or result in the occurrence of a REIT Prohibited Transaction by the Company or any direct or indirect Subsidiary thereof, including without limiting the generality of the foregoing, but in amplification thereof:

5.17        FCPA . In compliance with the Foreign Corrupt Practices Act, each Member will not, and will ensure that its officers, directors, employees, shareholders, members, agents and Affiliates, acting on its behalf or on the behalf of the Company or any of its Subsidiaries or Affiliates do not, for a corrupt purpose, offer, directly or indirectly, promise to pay, pay, promise to give, give or authorize the paying or giving of anything of value to any official representative or employee of any government agency or instrumentality, any political party or officer thereof or any candidate for office in any jurisdiction, except for any facilitating or expediting payments to government officials, political parties or political party officials the purpose of which is to expedite or secure the performance of a routine governmental action by such government officials or political parties or party officials. The term “routine governmental action” for purposes of this provision shall mean an action which is ordinarily and commonly performed by the applicable government official in (i) obtaining permits, licenses, or other such official documents which such Person is otherwise legally entitled to; (ii) processing governmental papers; (iii) providing police protection, mail pick-up and delivery or scheduling inspections associated with contract performance or inspections related to transit of goods across country; (iv) providing phone service, power and water supply, loading and unloading of cargo, or protecting perishable products or commodities from deterioration; or (v) actions of a similar nature. The term routine governmental action does not include any decision by a government official whether, or on what terms, to award new business to or to continue business with a particular party, or any action taken by an official involved in the decision making process to encourage a decision to award new business to or continue business with a particular party. Each Member agrees to notify immediately the other Member of any request that such Member or any of its officers, directors, employees, shareholders, members, agents or Affiliates, acting on its behalf, receives to take any action that may constitute a violation of the Foreign Corrupt Practices Act.

ARTICLE 6.

RIGHTS AND OBLIGATIONS OF MEMBERS

6.01        Limitation on Liability . Each Members’ liability shall be limited as set forth in this Operating Agreement, the Act and other applicable law.

6.02        No Liability for Company Obligations . No Member will have any personal liability for any debts or losses of the Company beyond its respective Capital Contributions, except as provided by law or otherwise provided by separate agreement among the Members.

6.03        List of Members . Upon written request of any Member, the Company shall provide a list showing the names, addresses and Membership Interest and Economic Interest of all Members and any other information required by Section 18-305 of the Act and maintained pursuant to Section 11.02.

6.04        Dissenters’ Rights . No Member shall have appraisal or dissenters’ rights pursuant to Section 18-210 of the Act.

6.05        Refinancing Right With Respect to Bridge Loan; Special Rights to Call for Capital to Avoid or Cure Imminent Loan Defaults; Backstop Agreement .

(a)          The Bridge Loan will be guaranteed by Bluerock Residential Growth REIT, Inc., an Affiliate of the BR Member. The guarantor will be required to meet and maintain certain financial covenants during the terms of the Bridge Loan and failure to do so may result in a default under the Bridge Loan which, for the avoidance of doubt, would be a 100% liability event on the part of the guarantor pursuant to the Backstop Agreement (as defined below). Notwithstanding the Major Decisions provisions of this Agreement, the BR Member shall have the right to cause the Borrower to refinance the Bridge Loan on commercially reasonable terms as approved by the TriBridge Member, which approval shall not be unreasonably withheld, conditioned or delayed (as refinanced, the “Permanent Loan”). Any subsequent refinancing of the Permanent Loan shall be as otherwise governed under this Agreement.

(b)          Notwithstanding anything contained in this Agreement to the contrary, at any time and from time to time, either Member may unilaterally make a call for Additional Capital Contributions to fund on a timely basis any Debt Service Shortfall or any other payment that if unpaid would constitute a payment default under the Bridge Loan or any subsequent Loan, and if the other Member fails or refuses to timely contribute its proportional share of such Additional Capital Contribution such that a resulting default would occur thereunder, then (i) the provisions of Section 8.04 shall apply with regard to each Member’s obligation to fund its share of the capital call and the consequences of failing to do so; provided however, (ii) to the extent that the capital call is to (A) pay for a balloon payment due in connection with a default thereunder or upon maturity of the Bridge Loan or any subsequent Loan or (B) fund principal paydown in connection with a restructuring or to fund “gap equity” that may be required in order for the Borrower to qualify for or close a new Loan to pay off the Permanent Loan or any subsequent Loan if it were to fall in default [i.e., the Equity Gap funding obligations to refinance the Bridge Loan with the Permanent Loan are governed by Section 8.04(e) but do not apply with respect to any restructurings of the Permanent Loan or subsequent refinancing of it], then with respect to any matter under subsection (ii), only the provisions of subsections (iii) and (iv) below shall apply (not Section 8.04).

(iii)         If subsection (b)(ii) has been triggered (i.e., a payment in the nature of principal is required to prevent or cure a default under the Bridge Loan or any subsequent Loan), neither party shall be obligated under this Agreement to fund its share of the called capital. Rather, the parties shall instead undertake good faith negotiations to arrive at a commercially reasonable solution but if they are unable to do so within 14 days, then, except as provided in subsection (iv) below, either party may engage the Lender in negotiations on behalf of the Borrower to address the default. If despite good faith efforts no commercially reasonable and mutually satisfactory resolution has been reached within 30 days, then either party may cause the Borrower to sell the Project (in which case they shall jointly control the sale process) or exercise the buy-sell contained in Section 12.06 below (notwithstanding the “lockout” period therein).

(iv)         Notwithstanding the provisions of subsection (iii) above, if the reason for the default was due to the actions solely of one Member or its Affiliates (and the other Member and its Affiliates are not otherwise in default under this Agreement or responsible for the default under any Loan Guaranty), then subsection (iii) above shall not apply and the other Member shall have the right, notwithstanding any other provision in this Agreement, to (1) control the negotiations with the Lender to restructure and/or modify the Bridge Loan or any subsequent Loan on commercially reasonable terms, (2) obtain commercially reasonable supplemental loans secured by assets of the Borrower to cure the default, (3) seek to refinance the Bridge Loan or any subsequent Loan on commercially reasonable terms, (4) cause the Borrower to sell the Project (and it shall control the sale process), or (5) exercise the buy-sell contained in Section 12.06 below (notwithstanding the “lockout” period therein).

(c)          Upon execution of this Agreement, the Members will execute a backstop agreement (the “Backstop Agreement”), pursuant to which the Members and certain of their Affiliated credit parties (which credit party shall be, in the case of the TriBridge Member, TriBridge Residential, LLC) will be proportionately responsible for any Non-Recourse Carve-Out Guaranty liability, unless either such Member or its Affiliates caused the liability to be incurred as a result of its action or omission, in which case such party shall bear 100% of the liability.

6.06        Default . If any Member or its Affiliate commits any Default Action (as defined below), then, provided the other Member and/or its Affiliate is not in material breach or default hereunder and has not otherwise committed a Default Action, in addition to any other legal or equitable remedy available to the non-breaching Member (or pursuant to the terms of this Agreement, including under Section 5.09), the non-breaching Member shall be entitled to recover its actual damages, including reasonable attorney’s fees (but specifically excluding special, consequential, punitive or exemplary damages) sustained by the non-breaching Member as a result of such Default Action. The following actions are collectively referred to as “Default Actions”: (1) Bankruptcy of a Member, (2) willful misconduct or gross negligence, (3) willful misappropriation of Company or Borrower funds, (4) the material breach or violation of this Agreement (but expressly excluding a Member’s failure to make an Additional Capital Contribution), (5) the transfer of a Membership Interest (or, in the case of the TriBridge Member, the occurrence of a TriBridge Change of Control) in violation of this Agreement; (6) any action or omission that, to the extent caused solely by a Member’s (or its Affiliate’s) actions or omissions, results in Lender asserting liability under a Non-Recourse Carveout Guaranty (but expressly excluding therefrom, any liquidity based Non-Recourse Carveout Guaranty provision), (7) withdrawal of a Member in violation of this Agreement; (8) solely with respect to the TriBridge Member, the Bankruptcy of any Affiliate of the TriBridge Member that triggers a default under the terms of the Bridge Loan or any subsequent Loan or any Loan Guaranty and (9) solely with respect to the BR Member, the Bankruptcy of Bluerock Residential Growth REIT, Inc. following the date that it first acquires a direct or indirect common interest in the Company or the Project; provided, that the non-defaulting Member shall provide notice to the defaulting Member of the occurrence of any Default Action under clauses (1), (4), (5), (6), (7), (8) or (9) and the defaulting Member shall have thirty (30) days from the receipt of such notice to cure such Default Action; provided, however, that if more than thirty (30) days is reasonably required to cure such Default Action and if the defaulting Member has commenced to cure within the original thirty (30) day cure period and diligently continues to cure such default, then the defaulting Member shall receive such additional time as is reasonably necessary to cure the Default Action (not to exceed an additional thirty (30) days). For any Default Action under clause (3) caused by an employee of the Member or its Affiliate, no Default Action shall be deemed to exist if the Member (a) terminates the employment of said employee; and (b) restores the misappropriated funds immediately.

ARTICLE 7.

MEETINGS OF MEMBERS

7.01        Meetings . Meetings of the Members, for any purpose or purposes, may be called by the Managers or any Member.

7.02        Place of Meetings . The Persons calling any meeting may designate any place in Atlanta, Georgia as the place of meeting for any meeting of the Members. If no designation is made, the place of meeting shall be the principal executive office of the Company in the State of Georgia.

7.03        Notice of Meetings . Written notice stating the place, day and hour of the meeting and the purpose or purposes for which the meeting is called shall be delivered not less than two (2) nor more than five (5) days before the date of the meeting, either personally or by mail, by or at the direction of the Managers or Person calling the meeting, to each Member entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered two (2) calendar days after being deposited in the United States mail, addressed to the Member at its address as it appears on the books of the Company, with postage thereon prepaid. Notice provided in accordance with this Section shall be effective notwithstanding anything in the Act to the contrary.

7.04        Meeting of all Members . If all of the Members shall meet at any time and place, either within or outside of the State of Georgia, and consent to the holding of a meeting at such time and place, such meeting shall be valid without call or notice, and at such meeting any lawful action may be taken.

7.05        Record Date . For the purpose of determining Members entitled to notice of or to vote at any meeting of Members or any adjournment thereof, or Members entitled to receive payment of any distribution, or in order to make a determination of Members for any other purpose, the date on which notice of the meeting is mailed or the date on which such distribution is made, as the case may be, shall be the record date for such determination of Members unless the Managers shall otherwise specify another record date. When a determination of Members entitled to vote at any meeting of Members has been made as provided in this Section, such determination shall apply to any adjournment thereof.

7.06        Quorum . All of the Members, represented in person or by proxy, shall constitute a quorum at any meeting of Members.

7.07        Manner of Acting . The affirmative vote of the TriBridge Member and the BR Member shall be required to approve these actions (each, a “Major Decision”):

(a)          do any act in contravention of, or amend, the Company’s Certificate of Formation or this Operating Agreement or the Borrower’s organizational documents;

(b)          do any act not specifically authorized herein which would make it impossible or impractical to own the Project or to otherwise carry on the ordinary business of the Company or the Borrower;

(c)          possess any property of the Company or assign the rights of the Company in any specific property of the Company for other than a Company purpose;

(d)          change or reorganize the Company or Borrower into any other legal form or to cause any merger of the Company or Borrower with another entity;

(e)          commence, or respond to, or settle any litigation involving the Company, the Borrower or the Property in amounts in excess of $25,000;

(f)           filing or initiating a Company or Borrower Bankruptcy;

(g)          permit or cause the Company or the Borrower to purchase or invest in real property other than its interest in the Project;

(h)          make loans using funds of the Company or Borrower;

(i)           except as expressly provided in Section 12.02, the admission of additional Members to the Company or to Borrower;

(j)           enter into any transaction with a Member and/or any Affiliate thereof (except as expressly authorized herein);

(k)          incur any indebtedness for borrowed money or grant a security interest in the Company’s or Borrower’s property, except for the refinancing of the Bridge Loan into a Permanent Loan, which shall be governed by Section 6.05(a);

(l)           subject to Sections 6.05(a) and (b) , any sale, refinance or other capital transaction with regard to the Project;

(m)         in the event of a fire, other casualty or partial condemnation of the Property, a determination whether to construct or reconstruct improvements located in the Property, where such construction or reconstruction would cost in excess of One Hundred Thousand Dollars ($100,000) and is not required under the terms and provisions of any lease, mortgage or deed of trust affecting the damaged or condemned portion of the Property in question;

(n)          take any action which would cause a default under the Bridge Loan or any subsequent Loan or that would otherwise reasonably be expected to expose the TriBridge Member, BR Member or any Affiliate thereof to liability under any Loan Guaranty;

(o)          subject to Section 5.14, approve any Operating Budget or make any modifications thereto;

(p)          subject to Section 5.14, changes to the Company’s or Borrower’s business plan, leasing strategy, rental rates (subject to approved use of daily pricing software), etc.;

(q)          hiring or retaining any property manager (other than the hiring of TriBridge Residential Property Management Advisors, LLC who has been approved by the Members), disposition broker, insurance agent, or other vendors of the Company or Borrower; although the form and terms of the Management Agreement remain subject to the approval of the Members. For the avoidance of doubt, the retention or termination of TriBridge Residential Property Management Advisors, LLC as property manager may, subject to certain restrictions on terminating the Management Agreement as set forth in Section 5.14, be decided solely by BR Member. In the event TriBridge Residential Property Management Advisors, LLC is properly terminated or not renewed by the Borrower under the Management Agreement, the replacement property manager may be selected by BR Member in its sole discretion;

(r)           enter into any one or more agreements or contractual commitments, on behalf of the Company or the Borrower obligating the Company or Borrower, as applicable, to make expenditures exceeding, in the aggregate for any one year, $30,000 (except as authorization to do so is otherwise exercised under other provisions of this Agreement);

(s)          decision as to whether to construct the Parking Improvements; and

(t)           modifications to the Total Project Budget.

7.08        Proxies . A Member may vote in person or by proxy executed in writing by the Member or by a duly authorized attorney-in-fact. Such written proxy shall be delivered to the Company.

7.09        Action by Members Without a Meeting . Action required or permitted to be taken by the Members at a meeting may be taken without a meeting if the action is evidenced by one or more written consents describing the action taken, signed by all of the Members. Action take under this Section is effective when the Members required to approve such action have signed the consent, unless the consent specifies a different effective date. The record date for determining Members entitled to take action without a meeting shall be the date the first Member signs a written consent.

7.10        Waiver of Notice . Pursuant to Section 18-302(c) of the Act, when any notice is required to be given to any Member, a waiver thereof in writing signed by the person entitled to such notice, whether before, at, or after the time stated therein, shall be equivalent to the giving of such notice.

7.11        Meeting by Telephone; Action by Consent . Pursuant to Section 18-302(d) of the Act, Members may also meet by conference telephone call if all Members can hear one another on such call and the requisite notice is given or waived.

ARTICLE 8.

CONTRIBUTIONS TO THE COMPANY AND CAPITAL ACCOUNTS

8.01        Members’ Initial Capital Contributions . Contemporaneously with the execution hereof, each Member has contributed such amount as is set forth in Exhibit “A” hereto as its share of the Initial Capital Contribution. The amount of the Initial Capital Contribution is anticipated to include sufficient capital to complete the Parking Improvements based on the Total Project Budget. Notwithstanding the foregoing, the Members agree that all costs related to the pursuit of the Project under the Cost-Sharing Agreement previously incurred by a Member or its Affiliate either (i) shall be deemed an Initial Capital Contribution of such Member and reduce the amount otherwise to be contributed by it to the Company or (ii) shall be refunded to such Member.

8.02        Additional Contributions . Except as set forth in this Article 8, no Member shall be required to make any Capital Contributions to the Company.

8.03        Loans to Company . To the extent approved by the Managers and Members pursuant to Section 7.07, any Member may make a secured or unsecured loan to the Company or the Borrower.

8.04        Additional Capital Contributions .

(a)          Additional Capital Contributions for Operating or Other Cash Deficits. Except as otherwise provided in Section 6.05(b)(i), in the event the Borrower is unable to pay its cash obligations as and when they become due, and thus has or is expected to have an actual cash flow deficit (other than as a result of a Cost Overrun or for a shortfall as discussed in Section 6.05(b)(ii)), and such funds cannot be obtained pursuant to Section 8.03 above, the TriBridge Member as Manager shall in the first instance determine the amount of required funds (but if it does not timely act, the BR Member as Manager may do so), shall notify the Management Committee of same and shall recommend that the Management Committee make a capital call for such funds pursuant to this Section 8.04(a). Upon the receipt of the recommendation, the Management Committee shall evaluate such recommendation in good faith and shall determine whether such capital call is reasonably required under the circumstances, is required for funding operating deficits and/or debt service shortfalls and is consistent with the prior use and operation of the Project. In the event that the Management Committee determines that it is appropriate to make such capital call based on the standards set forth in the preceding sentence (or upon any instance in which either Member has a right to call for capital pursuant to Section 6.05(b), the Management Committee (or in the case of 6.05(b), the Member making the call for an Additional Capital Contribution) shall so notify the Members, and the TriBridge Member and the BR Member shall have thirty (30) days to make Capital Contributions of its pro-rata share (i.e. based upon its Capital Percentage) of the necessary funds (an “Additional Capital Contribution”). All such Additional Capital Contributions shall be entitled to receive an Additional Contribution Priority Return.

(b)          Additional Capital Contributions for Cost Overruns. In the event the Borrower incurs a Cost Overrun with respect to the construction of the Parking Improvements, and such Cost Overrun cannot be resolved pursuant to Section 8.03 above, the TriBridge Member as Manager shall in the first instance determine the amount of required funds necessary to satisfy the Cost Overrun with respect to the Parking Improvements (but if it does not timely act, the BR Member as Manager may do so), shall notify the Management Committee of same and shall recommend that the Management Committee make a capital call for such funds pursuant to this Section 8.04(b). Upon the receipt of the recommendation with respect to any such Cost Overrun, the Management Committee shall evaluate such recommendation in good faith and shall determine whether such capital call is reasonably required under the circumstances. In the event that the Management Committee elects to make such capital call, it shall so notify the Members, and the TriBridge Member and the BR Member shall have thirty (30) days to make an Additional Capital Contribution equal to its pro-rata share (i.e. based upon its Capital Percentage) of the necessary funds. All such Additional Capital Contributions shall be entitled to receive an Additional Contribution Priority Return.

(c)          Failure to Make Additional Capital Contributions. In the event a Member fails to make all of its Additional Capital Contribution (“Defaulting Member”) as required in Section 6.05(b)(i), Section 8.04(a), Section 8.04 (b) or Section 8.04(e) on the due date (the “Contribution Default Date”), the following shall apply:

(i)          the Defaulting Member’s voting rights and rights to participate in the management of the business of the Company (including but not limited to as a Manager, for Management Committee participation and Major Decisions) shall automatically be suspended; and

(ii)         the non-Defaulting Member(s) may (but shall not be obligated to) contribute the unpaid portion of the Defaulting Member’s Additional Capital Contribution (a “ Shortfall ”). If there is more than one non-Defaulting Member desiring to make the Additional Capital Contribution on behalf of the Defaulting Member to cover the Shortfall, then such non-Defaulting Members shall be entitled to contribute the Defaulting Member’s Additional Capital Contribution in such amounts as they may agree among each other, or, in the absence of such agreement, in proportion to their respective Capital Percentages.

(d)          In addition to any other rights available under this Agreement, if, as provided in Section 8.04(c)(ii) above, a non-Defaulting Member contributes a Shortfall amount on behalf of a Defaulting Member solely in connection with a Cost Overrun, then the amount so contributed shall be deemed an Additional Capital Contribution pursuant to this Section 8.04(d), in which case the non-Defaulting Member shall be credited with Additional Capital Contributions at a 3:1 ratio for each such dollar of Shortfall/Additional Capital Contribution so made on behalf of the Defaulting Member. For example, if the TriBridge Member fails to fund its share of a Cost Overrun the BR Member shall have the right but not the obligation to fund such amount to the Company as an Additional Capital Contribution and, to the extent that it does, shall be credited at a 3:1 ratio (meaning, for every $100,000 of Additional Capital Contribution made by the BR Member for that purpose, the BR Member would be credited with having made $300,000 of Additional Capital Contributions). For the sake of clarity, this Section 8.04(d) shall not apply to Additional Capital Contributions required pursuant to Sections 6.05(b)(i) or 8.04(a).

(e)          Notwithstanding the foregoing, if in connection with any refinancing of the Bridge Loan, the amount of the Permanent Loan which has been provided to refinance the Bridge Loan is insufficient to fully payoff the Bridge Loan and/or the equity required to qualify for and close a Permanent Loan that would be sufficient to fully payoff the Bridge Loan (any such deficiency, an “Equity Gap”), then to the extent the aggregate Capital Contributions of the TriBridge Member are equal to or have exceeded 1,007,640.61 to date, or to the extent that the TriBridge Member’s share of the Equity Gap would result in the TBR Member contributing (i.e. in addition to its Initial Capital Contribution), in the aggregate, capital equal to or in excess of $1,007,640.61 (the “TriBridge Cap”), then the BR Member shall be responsible for funding one hundred percent (100%) of any such Equity Gap in excess of the TriBridge Cap (a “BR Equity Gap Contribution”). In such instance, the respective Capital Percentages of the TriBridge Member and BR Member shall be adjusted ratably so that the TriBridge Member is diluted on a proportionate basis, by the amount by which BR Member funds any BR Equity Gap Contribution. Amounts funded by either Member in connection with any Equity Gap, including, without limitation, any BR Equity Gap Contributions, shall not be treated as an Additional Capital Contribution and shall not be repaid as an Additional Contribution Priority Return, but rather shall be treated as part of the Member’s Initial Capital Contribution but considered contributed as of the date actually made (for avoidance of doubt, IRR shall not be calculated as if such amounts were contributed on the same date that earlier Initial Capital Contributions were made). For example, if the TriBridge Member’s aggregate Capital Contributions at the time of the refinance are $800,000.00, and the TriBridge Member’s share of the Equity Gap is $300,000.00, then the TBR Member shall be required to fund $200,000.000, which amount shall be considered part of the TriBridge Member’s Initial Capital Contribution, and the BR Member shall be required to fund $100,000 as a BR Equity Gap Contribution, which amount shall be treated as a part of the BR Member’s Initial Capital Contribution, and the Capital Percentage of the TriBridge Member shall be reduced (and the Capital Percentage of the BR Member shall be increased) by an amount equal to a fraction, the numerator of which is $100,000.00 and the denominator of which is all Capital Contributions made by the Members. For the avoidance of doubt, this Section 8.04(e) only applies to Equity Gaps with respect to refinancing of the Bridge Loan, not with respect to any shortfall in the event of a refinancing of the Permanent Loan.

(f)          The remedies provided in Sections 6.05(b) and 8.04 with respect to any Member’s failure to make any Additional Capital Contribution shall be the sole and exclusive remedies of the Non-Defaulting Member for such failure.

8.05        Withdrawal or Reduction of Members’ Contributions to Capital .

(a)          A Member shall not receive out of the Company’s property any part of such Member’s Capital Contributions until all liabilities of the Company, except liabilities to Members on account of their Capital Contributions, have been paid or there remains property of the Company sufficient to pay them.

(b)          A Member, irrespective of the nature of such Member’s Capital Contribution, has only the right to demand and receive cash in return for such Capital Contribution.

8.06        Maintenance of Capital Accounts . The Company shall establish and maintain a Capital Account for each Member and Economic Interest Owner. Each Member’s Capital Account shall be increased by (a) the amount of any Capital Contribution contributed by the Member to the Company, (b) the fair market value of any property, as determined by the Company and the Member by arm’s length agreement at the time of contribution (net of liabilities assumed by the Company or subject to which the Company takes such property within the meaning of Section 752 of the Code), and (c) the Member’s share of Profits and of any separately allocated items of income or gain (including any gain or income allocated to the Member to reflect the difference between the book value and tax basis of assets contributed by such Member). Each Member’s Capital Account shall be decreased by (a) the amount of any money distributed to the Member by the Company (excluding payments received by a Member from the Company as repayment of a loan by the Company to the Member), (b) the fair market value of any property distributed to the Member (net of liabilities of the Company assumed by the Member or subject to which the Member takes such property within the meaning of Section 752 of the Code), and (c) the Member’s share of Losses and of any separately allocated items of deduction or loss (including any loss or deduction allocated to the Member to reflect the difference between the book value and tax basis of assets contributed by the Member).

ARTICLE 9.

DISTRIBUTIONS

9.01        Distributions . Distributions of Net Cash Flow and Capital Proceeds shall be distributed and applied by the Managers in the following order and priority:

(a)          First, pari passu to each Member based on its Additional Contribution Priority Return until paid in full;

(b)          Next, to the Members, pari passu, in accordance with their Capital Percentages, until such time as the Members have received an Internal Rate of Return of nine percent (9%) on all Initial Capital Contributions (including in connection with any Equity Gap funding as provided under Section 8.04(e));

(c)          Next, (i) 81.08% to the Members, pari passu, in accordance with their Capital Percentages, and (ii) 18.92% to the TriBridge Member, until such time as the BR Member has received an Internal Rate of Return of fifteen percent (15%);

(d)          Next, (i) 70.27%, to the Members, pari passu, in accordance with their Capital Percentages, and (ii) 29.73% to the TriBridge Member, until such time as the BR Member has received an Internal Rate of Return of eighteen percent (18%); and

(e)          Thereafter, 54.05%, to the Members, pari passu, in accordance with their Capital Percentages, and (ii) 45.95% to the TriBridge Member.

9.02        Limitation Upon Distributions . No distribution shall be made to Members if prohibited by Section 18-607 of the Act.

9.03        Interest On and Return of Capital Contributions . No Member shall be entitled to interest on its Capital Contribution or to return of its Capital Contribution, except as otherwise specifically provided for herein.

ARTICLE 10.

ALLOCATIONS OF NET PROFITS AND NET LOSSES

10.01      Allocation of Profits and Losses . Profits and Losses for any Fiscal Year or other period of the Company will be allocated to the Members as follows:

(a)           Allocations of Profits and Losses for Capital Account Purposes . After giving effect to the special allocations set forth in Sections 10.02 and 10.03, Profits and Losses of the Company for any Fiscal Year or portion thereof shall be allocated among the Capital Accounts of the Members in such a manner that would cause, to the extent possible, the Capital Accounts of the Members as of the end of a Fiscal Year or portion thereof, after adjustment for all contributions and distributions during the year, and after adjustment for the special allocations set forth in Sections 10.02 and 10.03 (including the allocations of such Members’ shares of the “partnership minimum gain” and “partner nonrecourse debt minimum gain” (as such terms are used in Regulation Section 1.704-2) not otherwise required to be taken into account during such period), to equal the aggregate distributions that the Members would be entitled to receive pursuant to Section 9.01, in each case determined as if (i) all assets of the Company, including cash, were sold for their Gross Asset Values (which, for the avoidance of doubt, shall not be “booked up” to fair market value for this purpose outside of an actual liquidation), (ii) all Company liabilities, including the Company’s share of any liability of any entity treated as a partnership for U.S. federal income tax purposes in which the Company is a partner, were satisfied in cash according to their terms (each nonrecourse liability is limited to the book value of the assets securing such liability) and (iii) the remaining proceeds were distributed in accordance with Section 9.01. The Managers, based on the advice of the Company’s tax advisors, shall have the authority to correct or adjust any allocation provision hereunder as it determines to be necessary or appropriate (and not unfairly discriminatory against any Member) for such allocations, in the aggregate, to be made in the manner provided in the first sentence of this Section 10.01.

(b)           Limitations on Losses for Capital Account Purposes . Notwithstanding anything in Section 10.01(a) to the contrary, the Managers will not allocate any item of loss or deduction to a Member that would cause or increase a deficit balance in such Member’s Capital Account (as increased by such Member’s share of “partnership minimum gain” and “partner nonrecourse debt minimum gain”, as such terms are defined in Regulations Section 1.704-2 and applied to the Members of the Company), and will make special allocations of the Profits or Losses of the Company among the Members as necessary to cause the allocations under this Section 10.01 to be respected under Code Section 704(b) and Regulations Section 1.704 1(b)(1). The Managers shall, to the extent possible and in whatever manner they deem appropriate, make subsequent curative allocations of other items of income, gain, loss and deduction to offset any such special tax allocations.

10.02      Special Allocations . The following special allocations shall be made in the following order:

(a)           Minimum Gain Chargeback . Notwithstanding any other provision of this Article 10, if there is a net decrease in Company Minimum Gain during any Company Fiscal Year, each Member shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Section 1.704-2(f) of the Regulations. This Section 10.02(a) is intended to comply with the minimum gain chargeback requirement in such Section of the Regulations and shall be interpreted consistently therewith.

(b)           Member Minimum Gain Chargeback . Notwithstanding any other provision of this Article 10, except Section 10.02(a), if there is a net decrease in Member Minimum Gain attributable to a Member Nonrecourse Debt during any Company Fiscal Year, each Member who has a share of the Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined in accordance with Section 1.704-2(i)(4) of the Regulations. This Section 10.02(b) is intended to comply with the minimum gain chargeback requirement in such Section of the Regulations and shall be interpreted consistently therewith.

(c)           Qualified Income Offset . In the event any Member unexpectedly receives any adjustments, allocations, or Distributions described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Company income and gain shall be specially allocated to each such Member in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit of such Member as quickly as possible, provided that an allocation pursuant to this Section 10.02(c) shall be made if and only to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in this Article 10 have been tentatively made as if this Section 10.02(c) were not in the Agreement.

(d)           Gross Income Allocation . In the event any Member has a deficit Capital Account at the end of any Company Fiscal Year that is in excess of the sum of (i) the amount such Member is obligated to restore, and (ii) the amount such Member is deemed to be obligated to restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation pursuant to this Section 10.02(d) shall be made if and only to the extent that such Member would have a deficit Capital Account in excess of such sum after all other allocations provided for in this Article 10 have been tentatively made as if Section 10.02(c) hereof and this Section 10.02(d) were not in the Agreement.

(e)           Nonrecourse Deductions . Nonrecourse Deductions for any fiscal year or other period shall be specially allocated to the Members in accordance with their respective Capital Percentages.

(f)           Member Nonrecourse Deductions . Any Member Nonrecourse Deductions for any fiscal year or other period shall be specially allocated to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable in accordance with Regulations Section 1.704-2(i).

(g)           Section 754 Adjustment . To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant to such Section of the Regulations.

10.03      Curative Allocations .

(a)          The allocations set forth in Sections 10.01(b) and 10.2 (the “Regulatory Allocations”) are intended to comply with certain requirements of the Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss or deduction pursuant to this Section 10.03. Therefore, notwithstanding any other provision of this Article 10 (other than the Regulatory Allocations), the Managers shall make such offsetting special allocations of Company income, gain, loss or deduction in whatever manner they determine appropriate so that, after such offsetting allocations are made, each Member’s Capital Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not part of the Agreement and all Company items were allocated pursuant to Section 10.01.

(b)          The Managers shall have reasonable discretion, with respect to each Company Fiscal Year, to (i) apply the provisions of Section 10.03(a) hereof in whatever manner is likely to minimize the economic distortions that might otherwise result from the Regulatory Allocations, and (ii) divide all allocations pursuant to Section 10.03(a) hereof among the Members in a manner that is likely to minimize such economic distortions.

10.04      Tax Allocations .

(a)          Except as set forth in this Section 10.04, allocations for income tax purposes of items of income, gain, loss, deduction, and credits, and basis therefor, shall be made in the same manner as allocations for book purposes set forth in Sections 10.01, 10.02 and 10.03 hereof. In applying this Section 10.04, each item of income, gain, expense and loss for a period not specially allocated shall be allocated in the same proportions as the allocation of Profits and Losses for such period.

(b)          In the event of a contribution of property other than cash to the Company, income, gain, loss and deduction with respect to such contributed property shall be shared among the Members for tax purposes so as to take account of the variation between the basis of the property to the Company and its fair market value at the time of contribution in accordance with Code Section 704(c) and the Regulations thereunder.

(c)          In the event the book value of any Company asset is adjusted to equal its fair market value in accordance with Regulations Sections 1.704-1(b)(2)(iv)(d) and 1.704-1(b)(2)(iv)(f), subsequent allocations of income, gain, loss and deduction with respect to such asset shall take into account any variation between the adjusted basis of such asset for federal income tax purposes and its fair market value pursuant to Code Section 704(c) and the Regulations thereunder.

(d)          In accordance with Sections 704(b) and 704(c) of the Code and applicable Treasury Regulations, including Treasury Regulations Section 1.704-1(b)(4)(i), items of income, gain, deduction and loss with respect to any property that is properly reflected on the books of the Company at a book value that differs from the adjusted tax basis of such property within the meaning of the Regulation 1.704-1(b)(2)(iv)(g)(1) (“Book Property”) (and, if necessary, any other property of the Company) shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of the Book Property to the Company for federal income tax purposes and its book value.

(e)          To the extent of any recapture income resulting from the sale or other taxable disposition of assets of the Company, the amount of any gain from such disposition allocated to a Member (or a successor in interest) for federal income tax purposes pursuant to the above provisions shall be deemed to be recapture income to the extent that such Member has been allocated or has claimed any deduction directly or indirectly giving rise to the treatment of such gain as recapture income.

(f)          The items of income, gain, deduction and loss for tax purposes allocated to the Members pursuant to this Section 10.04 shall not be reflected in the Members’ Capital Accounts. Any elections or other decisions relating to such allocations shall be made by the Managers in any manner that reasonably reflects the purpose and intent of this Agreement and is consistent with the economic arrangement among the Members.

(g)          Pursuant to Treasury Regulations Section 1.752-3(a)(3), the Members hereby agree to allocate excess nonrecourse liabilities of the Company in accordance with their respective Capital Percentages.

10.05      Varying Interest in Company . Allocations to any Member whose Membership Interest changes during a Company Fiscal Year or to any Member who is a Member for less than a full Company Fiscal Year, whether by reason of the admission of a Member, the withdrawal of a Member, a non-pro rata contribution of capital to the Company or any other event described in Section 706(d)(1) of the Code and the Regulations issued thereunder, shall be made in accordance with Section 706(d) of the Code and the Regulations promulgated thereunder to take into account the varying Interests of the Members in the Company during the Company Fiscal Year.

ARTICLE 11.

BOOKS AND RECORDS

11.01      Accounting Period . The Company’s accounting period shall be the calendar year.

11.02      Records . Proper and complete records and books of accounts shall be kept or shall be caused to be kept by the Managers in which shall be entered fully and accurately all transactions and other matters relating to the Company’s business in such detail and completeness as is customary and usual for businesses of the type engaged in by the Company. The Company shall keep at its principal place of business the following records:

(a)          A current list of the full name and last known address of each Member, Economic Interest Owner and Manager;

(b)          Copies of records to enable a Member to determine the relative voting rights, if any, of the Members;

(c)          A copy of the Certificate of Formation of the Company and all amendments thereto;

(d)          Copies of the Company’s federal, state and local income tax returns and reports, if any, for the three most recent years;

(e)          Copies of the Company’s written Operating Agreement, together with any amendments thereto;

(f)          Copies of any financial statements of the Company for the three (3) most recent years.

The books and records shall at all times be maintained at the principal office of the Company and shall be open to the reasonable inspection and examination of the Members, Economic Interest Owners, or their duly authorized representatives during reasonable business hours.

11.03      Reports and Financial Statements .

(a)          Within fifteen (15) days of the end of each Fiscal Year, the TriBridge Member shall cause each Member to be furnished with the following annual reports computed as of the last date of the Fiscal Year: (i) an unaudited balance sheet of the Company; (ii) an unaudited statement of the Company’s profit and loss; and (iii) a statement of the Members’ Capital Accounts and changes therein in such Fiscal Year.

(b)          Within fifteen (15) days of the end of each quarter of each Fiscal Year, the TriBridge Member shall cause to be furnished to the BR Member such information as reasonably requested by the BR Member, and to the extent not readily available, which may be reasonably prepared by the TriBridge Member at the expense of the Company, as is necessary for any REIT Member (whether a direct or indirect owner) to determine its qualification as a REIT and its compliance with REIT Requirements as shall be requested by the BR Member. Further, the TriBridge Member shall cooperate in a reasonable manner at the request of any Member, at the expense of the Company, 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 any 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.

11.04      Tax Returns . The BR Member shall cause the preparation and timely filing of all tax returns required to be filed by the Company pursuant to the Code and all other tax returns deemed necessary and required in each jurisdiction in which the Company does business and shall submit such returns to the Members for their review, comment and approval at least ten (10) days prior to the due date or extended due date thereof and shall thereafter cause the same to be filed in a timely manner (including extensions). No later than the due date or extended due date, the BR Member shall deliver or cause to be delivered to each Member a copy of the tax returns for the Company and such Subsidiaries with respect to such Fiscal Year, together with such information with respect to the Company and such Subsidiaries as shall be necessary for the preparation by such Member of its U.S. federal and state income or other tax and information returns.

ARTICLE 12.

TRANSFERABILITY

12.01      General Prohibition . Except as provided in Sections 12.02 and 12.06 hereof, in which event no consent from any party shall be required to effectuate the transfer(s) described therein, no Member or Economic Interest Owner may assign, convey, sell, transfer, liquidate, encumber, or in any way alienate (collectively a “Transfer”), all or any part of its Interest without the prior written consent of the Members, which consent may be given or withheld in the sole discretion of any Member; provided, however, that nothing contained herein shall prohibit any transfers of direct or indirect equity interests in the Members so long as, in the case of the TriBridge Member, such transfers do not result in a TriBridge Change of Control . Any attempted Transfer of all or any portion of an Interest without the necessary consent, or as otherwise permitted hereunder, shall be null and void and shall have no effect whatsoever. Upon the transfer of a Membership Interest in accordance with this Article 12, the Capital Percentages of the transferring Member and of the transferee shall be adjusted accordingly.

12.02      Affiliate Transfers . Notwithstanding anything to the contrary contained in this Agreement, the following Transfers shall not require the approval set forth in Section 12.01, to the extent otherwise permissible under the Bridge Loan or any subsequent Loan:

(a)          Any Transfer by a BR Member or a Bluerock Transferee of up to one hundred percent (100%) of its Interest to any Affiliate of Bluerock Real Estate, L.L.C. that has sufficient capital to perform the obligations of the transferring BR Member hereunder, including but not limited to (A) Bluerock Residential Growth REIT, Inc. (“ BR REIT ”) or any Person that is directly or indirectly owned by BR REIT; (B) Bluerock Special Opportunity + Income Fund, LLC (“ BR SOIF ”) or any Person that is directly or indirectly owned by BR SOIF; (C) Bluerock Special Opportunity + Income Fund II, LLC (“ BR SOIF II ”) or any Person that is directly or indirectly owned by BR SOIF II, (D) Bluerock Special Opportunity + Income Fund III, LLC (“BR SOIF III”) or any Person that is directly or indirectly owned by BR SOIF III, (E) Bluerock Growth Fund, LLC (“ BR Growth ”) or any Person that is directly or indirectly owned by BR Growth, and/or (F) Bluerock Growth Fund II, LLC (“ BR Growth II ”) or any Person that is directly or indirectly owned by BR Growth II (collectively, a “ Bluerock Transferee ”); provided, that, following the date the BR REIT first acquires a direct or indirect common interest in the Company or the Project, in all instances, BR REIT shall either retain, direct or indirectly, more than fifty percent (50%) of the ownership interests in the BR Member or otherwise retain the power to control, directly or indirectly, the major activities of BR Member such that BR REIT can consolidate the Project on its audited financial statements; and

(b)          Provided only that the Parking Improvements are complete and the Project has reached Project Stabilization, any Transfer (other than a Transfer that would result in a TriBridge Change of Control) by the TriBridge Member or a TriBridge Transferee of up to one hundred percent (100%) of its Interest to any Affiliate of the TriBridge Member that has sufficient capital to perform the obligations of the TriBridge Member hereunder (a “TriBridge Transferee”).

12.03      Conditions of Transfer and Assignment . A transferee of an Interest pursuant to 12.01 or 12.02 shall become a Member only if the following conditions have been satisfied:

(a)          the transferor, his legal representative or authorized agent must have executed a written instrument of transfer of such Interest in form and substance satisfactory to the Managers;

(b)          the transferee must have executed a written agreement, in form and substance satisfactory to the Managers, to assume all of the duties and obligations of the transferor under this Operating Agreement with respect to the transferred Interest and to be bound by and subject to all of the terms and conditions of this Operating Agreement;

(c)          the transferor, his legal representative or authorized agent, and the transferee must have executed a written agreement, in form and substance satisfactory to the Managers to indemnify and hold the Company, the Managers and the other Members harmless from and against any loss or liability arising out of the transfer;

(d)          the transferee must have executed such other documents and instruments as the Managers may deem necessary to effect the admission of the transferee as a Member; and

(e)          unless waived by the Managers, the transferee or the transferor must have paid the expenses incurred by the Company in connection with the admission of the transferee to the Company.

12.04      Transfers of Economic Interest Only . A permitted transferee of an Economic Interest who does not become a Member shall be an Economic Interest Owner only and shall be entitled only to the transferor’s Economic Interest to the extent assigned. Such transferee shall not be entitled to vote on any question regarding the Company, and the Capital Percentage associated with the transferred Economic Interest shall not be considered to be outstanding for voting purposes.

12.05      Successors as to Economic Rights . References in this Operating Agreement to Members shall also be deemed to constitute a reference to Economic Interest Owners where the provision relates to economic rights and obligations. By way of illustration and not limitation, such provisions would include those regarding Capital Accounts, distributions, allocations, and contributions. A transferee shall succeed to the transferor’s Capital Contributions and Capital Account to the extent related to the Economic Interest transferred, regardless of whether such transferee becomes a Member.

12.06      Buy/Sell .

(a)          In the event the TriBridge Member and BR Member are deadlocked and are unable to agree unanimously on any Major Decision, and the TriBridge Member and BR Member are unable through good faith and the exercise of their reasonable efforts to break such deadlock for a period of fifteen (15) days following notice from such Member to the other Member that a deadlock exists with regard to a Major Decision, the deadlock may be broken by the invocation of the provisions of this Section 12.06; provided, however, except as otherwise provided in Section 6.05, this Section 12.06 may be invoked if and only if such deadlock occurs after the second (2 ^nd ) anniversary of the first date upon which the Project achieves Project Stabilization. Prior to invoking the provisions of this Section, the TriBridge Member and BR Member shall in good faith meet within fifteen (15) days of such deadlock, and use their reasonable efforts to resolve any disagreements regarding any Major Decision. As used in this Section 12.06, “deadlock” shall mean the inability of the TriBridge Member and BR Member to unanimously agree with respect to a Major Decision.

(b)          Either Member may initiate the buy/sell procedure by providing a written notice (the “Value Notice”) to the other Member. The Member which initiates the buy/sell procedure, is referred to herein as the “Offeror.” The Member who receives the Value Notice is referred to herein as the “Offeree.” The Value Notice shall include an offer by the Offeror to purchase all (and not less than all) of the Membership Interest(s) owned by the Offeree and an offer by the Offeror to sell all (and not less than all) of the Membership Interest(s) owned by the Offeror to the Offeree, based upon an amount representing the Offeror’s estimate of the gross sales price at which the Project would be sold (the “Stated Amount”), and which shall be used in the calculations of the purchase price of the Membership Interest(s) pursuant to Section 12.06(e).

(c)          The Offeree shall have thirty (30) days from its receipt of the Value Notice to provide a written notice (the “Election Notice”) to the Offeror stating either that the Offeree will sell all (and not less than all) its Membership Interest(s) to the Offeror or that the Offeree will purchase all (and not less than all) the Offeror’s Membership Interest(s) at the purchase price referenced in Section 12.06(b) hereof. If the Offeree fails to give a timely Election Notice, the Offeree shall be deemed to have elected to sell all (and not less than all) its Membership Interest(s) to the Offeror. The Election Notice shall specify the date of closing (the “Buy-Sell Closing Date”), which date shall be at least thirty (30) days after the giving of the Election Notice, but in any event not later than the ninetieth (90th) day after such notice. If the Offeree fails to provide an Election Notice, the Buy-Sell Closing Date shall be held on the first Business Day which is at least ninety (90) days after the giving of the Value Notice.

(d)          The Member (or Members) that finally becomes obligated to sell its or their Membership Interest(s) is sometimes referred to herein collectively as the “Seller.” The Member that finally becomes obligated to purchase the other Member’s or Members’ Membership Interest(s) is sometimes referred to herein as the “Buyer.”

(e)          The aggregate purchase price for the Seller’s Membership Interest(s) pursuant to this Section 12.06 shall be that amount which would be distributed to the Seller pursuant to Section 9.01 above (after giving effect to all applicable provisions of this Agreement, but after liquidating all Reserves then existing and without establishing any additional Reserves) if all of the property then held by the Borrower were sold on the Buy-Sell Closing Date for a gross sales price equal to the Stated Amount and all liabilities and obligations of the Borrower were satisfied from the proceeds from such sales price and any remaining proceeds were distributed to the Members in accordance with Section 9.01. No Member shall be entitled to any sales fee or commission if either Member exercises the buy/sell procedure set forth in this Section 12.06.

(f)           The closing of a purchase of Membership Interest(s) pursuant to this Section 12.06 shall be held on the Buy-Sell Closing Date, subject to the terms and conditions specified herein.

(g)          As of the effective date of any transfer of a Membership Interest(s) pursuant to this Section 12.06, the Buyer shall assume all obligations of the Seller with respect to the Membership Interest so transferred, including any liability of the Seller or any Affiliate thereof with respect to any Company liabilities. Upon such transfer, the Seller’s rights and obligations under this Agreement shall terminate with respect to such transferred Membership Interest, except as to indemnity rights of such Member under this Agreement attributable to acts or events occurring prior to the effective date of such transfer.

12.07      Escrow and Closing of Buy-Sell .

(a)           Closing Time and Location . Except as otherwise provided for in this Agreement, the closing of any offer of a Membership Interest between the Members pursuant to Section 12.06 shall take place at a mutually agreed upon location in Atlanta, Georgia.

(b)           Required Documents . Prior to or at the closing, Seller shall supply to Buyer all documents customarily required (or reasonably required by Buyer) to make a good and sufficient conveyance of such Membership Interest to the Buyer, which documents shall be in form and substance reasonably satisfactory to the Buyer and Seller. All payments shall be by wire transfer of immediately available funds.

(c)           Conditions Precedent to Closing . The obligation of Buyer to pay the purchase price shall be conditioned upon the Membership Interest being transferred free and clear of all liens, claims and encumbrances. This condition is for the sole benefit of Buyer and may be waived by Buyer in whole or in part in its sole discretion.

(d)           Closing Costs . Each party shall pay its own attorneys’ fees and expenses incurred in connection with the closing, and costs of the escrow or closing, including, without limitation all premiums for title insurance and any escrow fees, recording charges, and transfer taxes arising from the closing of the buy-sell transaction, shall be borne or allocated in the manner customary in the area in which the Project is located and, to the extent no custom exists, shall be shared equally by Seller and Buyer. Unless previously deducted in determining the price for the Membership Interest, the Buyer shall deduct from the price otherwise payable to the Seller an amount equal to all liens, claims and encumbrances of a definite or ascertainable amount, if any, which encumber the Seller’s Membership Interest being transferred which are not released or repaid on or prior to the closing (if Buyer elects to waive the conditions set forth in Section 12.07(c)).

(e)           Warranty of Title . The Seller shall represent, warrant and agree that its Membership Interest being sold hereunder is free of all liens, claims and encumbrances (except liens, claims or encumbrances that were deducted in determining the applicable price of the Membership Interest) and that the Seller shall defend, indemnify and hold harmless the Buyer from any such liens, claims and encumbrances.

(f)            Closing of Buy-Sell Transaction . At the closing of a sale of a Membership Interest by one Member to the other Member pursuant to Section 12.06 hereof, the following shall occur:

(i)          The Seller shall convey and assign to the Buyer or its designee the entire Membership Interest of the Seller, free and clear of all liens, claims and encumbrances (other than liens, claims and encumbrances that were waived by Buyer and deducted in determining the applicable price of the Membership Interest), and the Seller and the Buyer shall execute all documents which may be reasonably required to give effect to the sale and purchase of such Membership Interest.

(ii)         The Buyer shall pay or cause to be paid to the Seller the applicable purchase price for the Membership Interest being purchased in cash or by wire transfer at the closing.

(iii)        Notwithstanding any provision herein to the contrary, it shall be a condition or requirement of any offer and the closing to obtain a release of the Seller and the Seller’s Affiliates from any personal liability arising out of any and all Loan Guaranties.

12.08      Default .

(a)           Events of Default . The failure of a Member to perform any of the obligations set forth in Sections 12.06 or 12.07 with respect to an offer of its Membership Interest or purchase of the other Member’s Membership Interest shall constitute an event of default (“Event of Default”) on the part of the Member with respect to whom such failure occurs.

(b)           Remedies . Upon the occurrence of an Event of Default, the non-defaulting Member may exercise, in addition to all other rights and remedies provided in this Agreement or available at law or in equity, any one or more of the remedies provided for in Section 12.08 (c) below.

(c)           Remedies for Failure to Transfer Membership Interest .

(i)           Seller’s Failure . In the event that the Seller fails to make conveyance of its Membership Interest pursuant to its obligations herein, then the Buyer shall have the option: (A) to demand and receive specific performance of the Seller’s obligations to convey its Membership Interest as provided for herein; (B) to recover damages on account of the Seller’s failure to make conveyance (which rights shall be in addition to the right granted under subparagraph (A) above, if the Buyer so elects); or (C) to terminate the obligations of the parties to proceed with the sale of the Membership Interest, whereupon the position of the parties shall revert to the status quo ante as if no notice to purchase from either party to the other had been given under the provisions of this Agreement.

(ii)          Buyer’s Failure . In the event that the Buyer defaults in the closing of a purchase of a Membership Interest as herein provided, then the Seller shall have the option to: (A) elect to purchase the Buyer’s Membership Interest on the terms and conditions otherwise set forth herein, by notice to the Buyer of the Seller’s intention so to do, given within fifteen (15) days after such default in which event the Seller shall become the Buyer and the Buyer shall become the Seller, and all the applicable terms, conditions and provisions of this Agreement with respect to such sales shall govern, except that the closing thereof shall take place thirty (30) days after such date of notice from the Seller (now the Buyer) to the Buyer (now the Seller) and except that the purchase price shall be ten percent (10%) less than the price which the Seller (now the Buyer) would have had to pay had such Buyer (now the Seller) originally elected to sell its Membership Interest; (B) terminate the Seller’s obligation to convey its Membership Interest to the Buyer by notice to the Buyer, in which case the position of the parties shall revert to the status quo ante as if no notice from either party to the other had been given under the provisions of this Agreement; or (C) sue Buyer in the appropriate court for specific performance.

12.09      Specific Performance . It is expressly agreed that the remedy at law for breach of any of the obligations set forth in this Article 12 is inadequate in view of (i) the complexities and uncertainties in measuring the actual damages that would be sustained by reason of the failure of a party to comply fully with each of said obligations, and (ii) the uniqueness of each Member’s business and assets and the relationship of the Members. Accordingly, each of the aforesaid obligations and restrictions shall be, and is hereby expressly made, enforceable by specific performance.

ARTICLE 13.

ISSUANCE OF ADDITIONAL MEMBERSHIP INTERESTS

Except as otherwise provided for herein, any Person approved by all of the Members may become a Member in the Company by the issuance by the Company of Membership Interests for such consideration as all of the Members shall determine. No new Members shall be entitled to any retroactive allocation of losses, income or expense deductions incurred by the Company. The Managers may, upon the approval of all the existing Members, at the time a Member is admitted, close the Company books (as though the Company’s tax year had ended) or make pro rata allocations of loss, income and expense deductions to a new Member for that portion of the Company’s tax year in which a Member was admitted in accordance with the provisions of Section 706(d) of the Code and the Treasury Regulations promulgated thereunder.

ARTICLE 14.

DISSOLUTION AND TERMINATION

14.01      Dissolution .

(a)          The Company shall be dissolved upon the occurrence of any of the following events:

i.            by the unanimous written agreement of all Members; or

ii.           by a decree of judicial dissolution under the Act.

To the maximum extent permitted under the Act, the Company shall not dissolve upon an event of dissociation with respect to the last remaining Member, but instead the legal successor to such Member shall automatically become a Member of the Company with all rights and obligations appurtenant thereto.

(b)          If a Member who is an individual dies or a court of competent jurisdiction adjudges him to be incompetent to manage his person or his property, the Member’s executor, administrator, guardian, conservator, or other legal representative may exercise all of the Member’s rights for the purpose of settling his estate or administering his property, but such person shall be a holder of an Economic Interest and shall not have the rights of a Member. Further, such Person shall be subject to the provisions of Article 12.

14.02      Effect of Dissolution . Upon dissolution, the Company shall cease to carry on its business, except as permitted by Section 18-803 of the Act.

14.03      Winding Up, Liquidation and Distribution of Assets .

(a)          Upon dissolution, an accounting shall be made by the Company’s independent accountants of the accounts of the Company and of the Company’s assets, liabilities and operations, from the date of the last previous accounting until the date of dissolution. The Managers or if none, the Person or Persons selected by the Members (the “Liquidators”) shall immediately proceed to wind up the affairs of the Company.

(b)          If the Company is dissolved and its affairs are to be wound up, the Liquidators shall:

i.            Sell or otherwise liquidate all of the Company’s assets as promptly as practicable;

ii.          Allocate any profit or loss resulting from such sales to the Members and Economic Interest Owners in accordance with Article 10 hereof as if the Company had distributed all distributable Capital Proceeds in accordance with Article 9 hereof;

iii.         Discharge all liabilities of the Company, including liabilities to Members and Economic Interest Owners who are creditors, to the extent otherwise permitted by law, other than liabilities to Members and Economic Interest Owners for distributions, and establish such Reserves as may be reasonably necessary to provide for contingent liabilities of the Company; and

iv.         Distribute the remaining proceeds to the Members in accordance with Section 9.01.

(c)          In the final Fiscal Year of the Company, before making the final distributions provided for in Section 14.03(b)(iv), Profits and Losses shall be credited or charged to Capital Accounts of the Members (which Capital Accounts shall be first adjusted to take into account all distributions other than liquidating distributions made during the Fiscal Year) in the manner provided in Article 10. The allocations and distributions provided for in this Agreement are intended to result in the Capital Account of each Member immediately prior to the liquidation distributions of the Company’s assets pursuant to Section 14.03(b)(iv) being equal to the amount distributable to such Member pursuant to Section 14.03(b)(iv). The Managers are authorized to make appropriate adjustments in the allocation of Profits and Losses and, if necessary, items of gross income and gross deductions of the Company, for the year of liquidation of the Company (or, if earlier, the year in which all or substantially all of the Company’s assets are sold, transferred or disposed of) as necessary to cause the amount of each Member’s Capital Account immediately prior to the distribution of the Company’s assets pursuant to Section 14.03(b)(iv) to equal the amount distributable to such Member pursuant to Section 14.03(b)(iv). Notwithstanding the foregoing, nothing in this Section 14.03(c) shall affect the amounts distributable to the Members under Section 14.03(b)(iv).

(d)          Notwithstanding anything to the contrary in this Operating Agreement, upon a liquidation within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury Regulations, if any Member has a deficit Capital Account (after giving effect to all contributions, distributions, allocations and other Capital Account adjustments for all taxable years, including the year during which such liquidation occurs), such Member shall have no obligation to make any Capital Contribution, and the negative balance of such Member’s Capital Account shall not be considered a debt owed by such Member to the Company or to any other Person for any purpose whatsoever.

(e)          Upon completion of the winding up, liquidation and distribution of the assets, the Company shall be deemed terminated.

(f)           The Liquidators shall comply with any applicable requirements of applicable law pertaining to the winding up of the affairs of the Company and the final distribution of its assets.

14.04      Certificate of Cancellation . When all debts, liabilities and obligations have been paid and discharged or adequate provisions have been made therefor and all of the remaining property and assets have been distributed to the Members, a Certificate of Cancellation may be executed and filed with the Secretary of State of Delaware in accordance with Section 18-203 of the Act.

14.05      Return of Contribution Nonrecourse to Other Members . Except as provided by law or as expressly provided in this Operating Agreement, upon dissolution, each Member shall look solely to the assets of the Company for the return of its Capital Contribution. If the Company property remaining after the payment or discharge of the debts and liabilities of the Company is insufficient to return the cash contribution of one or more Members, such Member or Members shall have no recourse against any other Member.

ARTICLE 15.

INDEMNIFICATION

15.01      Indemnification by Company . The Managers, the Members and their respective members, managers, agents, employees and representatives (each, an “Indemnitee”) shall be indemnified by the Company to the fullest extent permitted by law, against any losses, judgments, liabilities, expenses and amounts paid in settlement of any claims sustained by it or any of them in connection with the Company (each, a “Claim”), provided that (i) such course of conduct was, in good faith, intended to be in, and not opposed to, the best interests of the Company and such liability or loss was not the result of willful misconduct, or a material breach of this Agreement or gross negligence on the part of such Indemnitee, and (ii) any such indemnification will only be recoverable from the assets of the Company and the Members shall not have any liability on account thereof except any obligations to return distributions received from the Company that are required to be returned to the Company in respect of such indemnification obligations under applicable law. No Member shall be authorized to make a call for Additional Capital Contributions to satisfy the Company’s indemnification obligations under this Section 15.01.

15.02      Indemnification by Members for Misconduct . In addition to any rights that may exist in the Backstop Agreement:

(a)          The TriBridge Member hereby indemnifies, defends and holds harmless the Company, the BR Member, each Bluerock Transferee and each of their subsidiaries and their officers, directors, members, managers, partners, shareholders, employees, agents and appointees from and against all losses, costs, expenses, damages, claims and liabilities (including reasonable attorneys’ fees) incurred to the extent arising out of any fraud, gross negligence or willful misconduct on the part of, or by, the TriBridge Member or its Affiliates.

(b)          The BR Member hereby indemnifies, defends and holds harmless the Company, the TriBridge Member, each TriBridge Transferee and each of their subsidiaries and their officers, directors, members, managers, partners, shareholders, employees, agents and appointees from and against all losses, costs, expenses, damages, claims and liabilities (including reasonable attorneys’ fees) incurred to the extent arising out of any fraud, gross negligence or willful misconduct on the part of, or by, BR Member or its Affiliates.

ARTICLE 16.

MISCELLANEOUS PROVISIONS

16.01      Application of Delaware Law . This Operating Agreement, and the application and interpretation thereof, shall be governed exclusively by its terms and by the laws of the State of Delaware, and specifically the Act.

16.02      No Action for Partition . No Member or Economic Interest Owner has any right to maintain any action for partition with respect to the property of the Company.

16.03      Construction . Whenever the singular number is used in this Operating Agreement and when required by the context, the same shall include the plural and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa.

16.04      Headings . The headings in this Operating Agreement are inserted for convenience only and are in no way intended to describe, interpret, define, or limit the scope, extent or intent of this Operating Agreement or any provision hereof.

16.05      Waivers . The failure of any party to seek redress for violation of or to insist upon the strict performance of any covenant or condition of this Operating Agreement shall not prevent a subsequent act, which would have originally constituted a violation, from having the effect of an original violation.

16.06      Rights and Remedies Cumulative . The rights and remedies provided by this Operating Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right not to use any or all other remedies. Such rights and remedies are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise.

16.07      Severability . If any provision of this Operating Agreement or the application thereof to any person or circumstance shall be invalid, illegal or unenforceable to any extent, the remainder of this Operating Agreement and the application thereof shall not be affected and shall be enforceable to the fullest extent permitted by law.

16.08      Heirs, Successors and Assigns . Each and all of the covenants, terms, provisions and agreements herein contained shall be binding upon and inure to the benefit of the parties hereto and, to the extent permitted by this Operating Agreement, their respective heirs, legal representatives, successors and assigns.

16.09      Creditors . None of the provisions of this Operating Agreement shall be for the benefit of or enforceable by any creditors of the Company or by any Person not a party hereto.

16.10      Counterparts . This Operating Agreement may be executed in counterparts, each of which shall be deemed an original but all of which shall constitute one and the same instrument.

16.11      Federal Income Tax Elections . All elections required or permitted to be made by the Company under the Code shall be made by the Members.

16.12      Certification of Non-Foreign Status . In order to comply with Section 1445 of the Code and the applicable Treasury Regulations thereunder, in the event of the disposition by the Company of a United States real property interest as defined in the Code and Treasury Regulations, each Member shall provide to the Company, an affidavit stating, under penalties of perjury, (i) the Member’s address, (ii) United States taxpayer identification number, and (iii) that the Member is not a foreign person as that term is defined in the Code and Treasury Regulations. Failure by any Member to provide such affidavit by the date of such disposition shall authorize the Managers to withhold ten percent (10%) of each such Member’s distributive share of the amount realized by the Company on the disposition.

16.13      Notices . Any and all notices, offers, demands or elections required or permitted to be made under this Agreement (“Notices”) shall be in writing and shall be delivered either by personally delivering it by hand or Federal Express or similar commercial courier service to the person to whom Notice is directed, or by electronic mail, or by depositing it with the United States Postal Service, certified mail, return receipt requested, with adequate postage prepaid, addressed to the appropriate party (and marked to a particular individual’s attention). Notice shall be deemed given and effective (i) when hand-delivered if by personal delivery or Federal Express or similar commercial courier service, (ii) as of the date and time it is transmitted by electronic mail if there is a written or electronic record of the date, time and email address to which the Notice was sent, or (iii) on the third (3rd) business day (which term means a day when the United States Postal Service, or its legal successor (“Postal Service”) is making regular deliveries of mail on all of its regularly appointed week-day rounds in Dover, Delaware) following the day (as evidenced by proof of mailing) upon which such Notice is deposited, postage pre-paid, certified mail, return receipt requested, with the Postal Service. Rejection or other refusal by the addressee to accept the Notice shall be deemed to be receipt of the Notice. In addition, the inability to deliver the Notice because of a change of address of the party of which no Notice was given to the other party as provided on Exhibit A hereof shall be deemed to be the receipt of the Notice sent. The addresses to which Notice is to be sent shall be those set forth below on Exhibit A or such other address as shall be designated in writing to Managers. Managers shall keep a list of all designated addresses and such list shall be available to any Member upon request thereof. Such addresses may be changed by designating the change of address to the Managers in writing.

16.14      Amendments . Any amendment to this Agreement shall be made in writing and signed by Members holding all of the Capital Percentages; provided , however, the Managers shall have the right upon any transfer of Membership Interests or admission of any new Member in accordance herewith to unilaterally amend this Agreement without a writing signed by all Members to substitute Exhibit “A” attached hereto with an updated Exhibit “A” reflecting all of the current Members and their respective Capital Percentages.

16.15      Invalidity . The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof, and the Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted. If any particular provision herein is construed to be in conflict with the provisions of the Act, the Act shall control and such invalid or unenforceable provisions shall not affect or invalidate the other provisions hereof, and this Agreement shall be construed in all respects as if such conflicting provision were omitted.

16.16      Captions . Titles and captions are inserted for convenience only and in no way define, limit, extend or describe the scope or intent of this Agreement or any of its provisions and in no way are to be construed to affect the meaning or construction of this Agreement or any of its provisions.

16.17      Banking . All funds of the Company shall be deposited in its name in an account or accounts as shall be designated from time to time by the Managers. All funds of the Company shall be used solely for the business of the Company. All withdrawals from the Company bank accounts shall be made only upon check signed by the Managers or by such other persons as the Managers may designate from time to time.

16.18      Governing Law; Jurisdiction . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. The parties hereto agree that any suit brought to enforce this Agreement shall be venued only in any court of competent jurisdiction in the State of New York, Borough of Manhattan, and, by execution and delivery of this Agreement, each of the parties to this Agreement hereby irrevocably accepts and waives all objection to, the exclusive jurisdiction of the aforesaid courts in connection with any suit brought to enforce this Agreement, and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties hereto hereby agrees that service of process in any such proceeding may be made by giving notice to such party in the manner and at the place set forth in 16.13 herein. The parties irrevocably and voluntarily waive any right they may have to a trial by jury in respect of any claim arising under this Agreement.

16.19      Further Assurances . The Members each agree to cooperate, and to execute and deliver in a timely fashion any and all additional documents or instruments necessary to effectuate the purposes of the Company and this Agreement or necessary to comply with any laws, rules or regulations.

16.20      Time . TIME IS OF THE ESSENCE OF THIS AGREEMENT, AND TO ANY PAYMENTS, ALLOCATIONS AND DISTRIBUTIONS SPECIFIED UNDER THIS AGREEMENT.

16.21      Investment Representations and Indemnity Agreement . In addition to the restrictions on transfer set forth above, each Member understands that Members must bear the economic risk of this investment for an indefinite period of time because the Membership Interests are not registered under the Securities Act of 1933, as amended (the “1933 Act”) or the securities laws of any state or other jurisdiction. Each Member has been advised that there is no public market for the Membership Interests and that the Membership Interests are not being registered under the 1933 Act upon the basis that the transactions involving its sale are exempt from such registration requirements and that reliance by the Company on such exemption is predicated in part on the Member’s representations set forth in this Agreement. Each Member acknowledges that no representations of any kind concerning the Property or the future intent or ability to offer or sell the Membership Interest in a public offering or otherwise have been made to the Member by the Company or any other Person or entity. Each Member understands that the Company makes no covenant, representation or warranty with respect to the registration of securities under the Securities Exchange Act of 1933, as amended, or its dissemination to the public of any current financial or other information concerning the Company. Accordingly, each Member acknowledges that there is no assurance that there will ever by any public market for the Membership Interests, and that the Member may not be able to publicly offer or sell any thereof. Furthermore, each Member (and his/her/its assignees and transferees) agrees to indemnify the other Members, the Managers, the Company and any director, officer, employee, affiliate or legal counsel of such parties, from any and all losses, damage, liability, claims and expenses incurred, suffered or sustained by any of them in any manner because of the falsity of any representation contained in this Section including, without limitation, liability for violation of the Securities Laws of the United States or of any state which violation would not have occurred had such representation been true.

16.22      No Partnership Interest for Non-Tax Purposes . The Members have formed the Company under the Act and expressly disavow any intention to form a partnership under Delaware’s Uniform Partnership Act, Delaware’s Uniform Limited Partnership Act, or the Partnership Act or laws of any other state. The Members do not intend to be partners one to another or partners as to any third party. To the extent any Member, by word or action, represents to another person that any other Member is a partner or that the Company is a partnership, the Member making such wrongful representations shall be liable to any other Member who incurs personal liability by reason of such wrongful representation.

16.23      Entire Agreement . This Agreement, along with the Cost-Sharing Agreement, contains the entire understanding among the parties hereto with respect to the subject matter hereof. This Agreement supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or written, except for the Cost-Sharing Agreement, which shall survive in accordance with its terms.

(Signatures on following page)

IN WITNESS WHEREOF , the parties have executed this Agreement as of the date first written above.

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

List of Exhibits :

MANAGEMENT COMMITTEE:

TriBridge Member

BR Member

Exhibit B

LEGAL DESCRIPTION OF PROPERTY

FEE TRACK

All of the following land, with the buildings and improvements thereon, lying and being situate in Durham County, North Carolina, and being more particularly described as follows:

BEING all of that certain parcel containing approximately 2.0994 acres as shown on a map entitled “Exempt Final Recombination Plat 300 Jackson Street & 501 Willard St” recorded in Plat Book 192, Page 3, Durham County Registry which is more fully described as:

Beginning at a PK nail on the eastern right of way of Willard Street; thence with a curve turning to the right with an are length of 31.04’, with a radius of 20.00’, with a chord bearing of N 45°11 ’ 41” E, with a chord length of 28.02’ to an existing iron pipe; thence N 89°41’27” E a distance of 185.08’ to an existing iron pipe; thence with a curve turning to the right with an arc length of 114.62’, with a radius of 190.37’, with a chord bearing of S 73°14’22” E, with a chord length of 112.90’ to an existing iron pipe; thence S 59°12’33” E a distance of 111.39’ to an existing iron pipe; thence S 30°47’27” W a distance of 90.76’ to an existing iron pipe; thence S 27°33’27” W a distance of 158.72’ to an existing iron pipe; thence N 59°12’33“W a distance of 113.65’ to an existing iron pipe; thence N 89°21’33“W a distance of 193.78’ to an existing iron pipe; thence N 00°38’27“E a distance of 227.18’ to an existing iron pipe; which is the point of Beginning, having an area of 91,449.07 square feet or 2.099 acres as shown on plat prepared by Coulter Jewell Thames PA recorded in the Durham County Registry in Book 192 Page 3.

EASEMENT TRACK

TOGETHER WITH easements contained or conveyed in that certain Temporary Easement Agreement by and between BR-TBR Whetstone Owner, LLC, TriBridge Residential, LLC, University Ford, Inc., and University Properties of N.C., L.L.C. being recorded in Durham County Registry prior to the Deed of Trust from BR-TBR Whetstone Owner, LLC to KeyBank National Association.

Exhibit 10.2

LIMITED LIABILITY COMPANY AGREEMENT

OF

BR WHETSTONE Member, LLC

A DELAWARE LIMITED LIABILITY COMPANY

LIMITED LIABILITY COMPANY AGREEMENT

OF

BR WHETSTONE Member, LLC

A DELAWARE LIMITED LIABILITY COMPANY

THE UNITS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ SECURITIES ACT ”) OR UNDER THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE UNITS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES COMMISSION, OR ANY OTHER REGULATORY AUTHORITY. ACCORDINGLY, THESE SECURITIES MAY NOT BE RESOLD OR OTHERWISE TRANSFERRED OR CONVEYED IN THE ABSENCE OF REGISTRATION OF THE SAME PURSUANT TO THE APPLICABLE SECURITIES LAWS UNLESS AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY IS FIRST OBTAINED THAT SUCH REGISTRATION IS NOT THEN NECESSARY. ANY TRANSFER CONTRARY HERETO SHALL BE VOID.

THIS LIMITED LIABILITY COMPANY AGREEMENT OF BR WHETSTONE Member, LLC (herein referred to as the “ Agreement ”), is made and entered into as of May 20, 2015 (the “Effective Date”), by and among BRG Whetstone Durham, LLC , a Delaware limited liability company, as the Class A Member (“ BRG ”), and Bluerock Special Opportunity + Income Fund III, LLC , a Delaware limited liability company (“ SOIF III ”), as the Class B Member (BRG and SOIF III, together with any additional members hereinafter admitted, are referred to as the “ Members ”).

RECITALS

A.          The Company was formed as a Delaware limited liability company in accordance with the Delaware Limited Liability Company Act, as amended from time to time (the “ Act ”) on April 8, 2015.

B.          The Company was formed to hold a membership interest in the Company Subsidiary (as defined below) (the “ Subsidiary Interest ”).

C.          The Company Subsidiary currently holds (or will as of closing of the acquisition hold) all of the membership interests in BR-TBR Whetstone Owner, LLC (the “Property Owner”) which will in turn own the fee interest in the Property (as defined below).

D.          The Members desire to set forth their agreement and understanding with respect to the operation of the Company as a Delaware limited liability company from and after the date hereof.

NOW, THEREFORE, in consideration of the foregoing recitals and the mutual promises, covenants, and conditions herein contained, the receipt and sufficiency of which are hereby acknowledged, the undersigned Members hereby covenant and agree as follows:

ARTICLE 1

DEFINITIONS

For purposes of this Agreement, the following terms have the meanings set forth below:

1.1         “ Accountant ” shall mean the certified public accounting firm that, from time to time, represents the Company.

1.2         “ Act ” has the meaning set forth in the preamble to this Agreement.

1.3         “ Additional Capital Contributions ” shall have the meaning set forth in Section 5.3 .

1.4         “ Adjustment Period ” shall mean a period of time as follows: The first Adjustment Period shall commence on the date hereof and each succeeding Adjustment Period shall commence on the date immediately following the last day of the immediately preceding Adjustment Period; each Adjustment Period shall end on the earliest to occur after the commencement of such Adjustment Period of (i) the last day of each Fiscal Year as now exists or as may, from time to time, be selected by the Manager, (ii) a Capital Date, (iii) the day immediately preceding the date of the “liquidation” of a Member’s Membership Interest in the Company (within the meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury Regulations), (iv) the day immediately preceding the date of an increase in the Membership Interest of a Member, or (v) the date on which the Company is terminated under Article 3 or Section 12.1 of this Agreement.

1.5         “ Affiliate ” shall mean (i) any Entity more than five percent (5%) of the issued and outstanding stock of which, or more than five percent (5%) interest in which, is owned, directly or indirectly, by any Member or (ii) any Entity that now or hereafter owns, directly or indirectly, more than a ten percent (10%) interest in the Company or in any Member or (iii) any Entity who is an agent, trustee, officer, director, employee, member or shareholder or member of the family (or any member of the family of any agent, trustee, officer, director, employee, partner, member or shareholder) of the Company or of any Member or (iv) any Entity that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, the Company or any Member. The term “control” (including the terms “controlled by” and “under common control with”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of an Entity, whether through the ownership of voting securities, by contract or otherwise. The term “family” shall be deemed to include spouses, children, parents, brothers and sisters, and the spouse, children, parents, brothers and sisters of such spouse’s children, parents, brothers and sisters.

1.6         “ Agreement ” shall mean this Limited Liability Company Agreement of BR Whetstone Member, LLC, as it now exists and as it may from time to time hereafter be amended, restated or supplemented or otherwise modified from time to time.

1.7         “ Annual Financial Statements ” shall have the same meaning as set forth in Section 13.3 hereof.

1.8         “ Bankruptcy ” means, with respect to any Person, if such Person (i) makes an assignment for the benefit of creditors, (ii) files a voluntary petition in bankruptcy, (iii) is adjudged a bankrupt or insolvent, or has entered against it an order for relief, in any bankruptcy or insolvency proceedings, (iv) files a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding of this nature, (vi) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the Person or of all or any substantial part of its properties, or (vii) if one hundred twenty (120) days after the commencement of any proceeding against the Person seeking reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, if the proceeding has not been dismissed, or if within ninety (90) days after the appointment without such Person’s consent or acquiescence of a trustee, receiver or liquidator of such Person or of all or any substantial part of its properties, the appointment is not vacated or stayed, or within ninety (90) days after the expiration of any such stay, the appointment is not vacated.

1.9         “ Basic Documents ” means the (a) documents to be executed by the Property Owner in favor of the Lender as of the closing of the Loan, and all documents and certificates contemplated thereby or delivered in connection therewith; and (b) all similar documentation required by and delivered to any successor Lender and/or Mortgagee.

1.10       “ Benefit Plan Investor ” means (i) any “employee benefit plan” as defined by the Employee Retirement Income Security Act of 1974, as amended (“ ERISA ”), regardless of whether it is subject to ERISA, (ii) any plan as defined in Section 4975 of the IRC, and (iii) any entity deemed for any purpose of ERISA or Section 4975 of the IRC to hold assets of any such employee benefit plan or plan due to investments made in such entity by such employee benefit plans and plans.

1.11       “ BGF ” shall mean Bluerock Growth Fund, LLC, a Delaware limited liability company.

1.12       “ BGF II ” shall mean Bluerock Growth Fund II, LLC, a Delaware limited liability company.

1.13       “ BRG ” shall have the meaning set forth in the introductory paragraph above.

1.14       “ Budgeted Development Capital Calls ” shall have the meaning as set forth in Section 5.3(a).

1.15       “ Capital Accounts ” shall mean the capital accounts established by the Company for each Member pursuant to Section 5.5 hereof. Capital Accounts shall be determined and maintained throughout the full term of the Company for each Member in accordance with the rules of this definition. The balance of each Member’s Capital Account, as of any particular date, shall be an amount equal to the sum of the following:

(a)          The cumulative amount of cash and the value of all other property that has been contributed to the capital of the Company by such Member as a Capital Contribution; plus

(b)          The cumulative amount of the Company’s Net Profit and Gain that has been allocated to such Member hereunder; minus

(c)          The cumulative amount of the Company’s Net Loss and Loss that has been allocated to such Member hereunder; and minus

(d)          The cumulative amount of cash and the agreed upon value of all other property that has been distributed by the Company to such Member (other than in repayment of any loans).

A Member’s Capital Account shall also be increased or decreased to reflect any items described in Section 1.704-1(b)(2)(iv) of the Treasury Regulations that are required to be reflected in such Member’s Capital Account and that are not otherwise taken into account in computing such Capital Account under this definition.

1.16       “ Capital Contributions ” shall mean all amounts paid by a Member for its Membership Interests and any Additional Capital Contributions or Class A Priority Capital Contributions made by a Member.

1.17       “ Capital Date ” means the date on which any Gain or Loss is recognized by the Company.

1.18       “ Capital Transaction ” shall mean any (i) direct or indirect sale or other disposition of the Property or substantially all of the assets of the Company (including the Subsidiary Interest, the membership interests held by Company Subsidiary in Property Owner, or the Property) outside the ordinary and customary course of business, (ii) payment, on account of a casualty, for the Property or substantially all of the assets of the Company, Company Subsidiary or Property Owner to the extent such assets are not replaced or repaired, (iii) refinancing of any indebtedness incurred by the Company, the Company Subsidiary or Property Owner, including the Obligations, and (iv) similar items or transactions relating to the Property, the Subsidiary Interest, the membership interests held by Company Subsidiary in Property Owner, or substantially all of the assets of the Company, the Company Subsidiary or Property Owner, the proceeds of which under generally accepted accounting principles are deemed attributable to capital.

1.19       “ Cash Flow From Operations ” shall mean, for a given period, the amount of cash received by the Company from the Company Subsidiary and/or Property Owner other than on account of a Capital Transaction, minus administrative expenses of the Company, all determined in accordance with cash basis accounting principles, consistently applied.

1.20       “ Certificate of Formation ” means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware on April 8, 2015, as amended or amended and restated from time to time.

1.21       “ Class A Capital Commitment ” shall mean the amount of the Capital Contribution committed to be made by the Class A Member (including the projected amount of the Class A Preferred Reserve that will be required of the Company), exclusive of any Class A Priority Capital Contribution, as set forth on Schedule I . The Class A Capital Commitment represents the total amount of projected capital, together with the Class B Members’ initial Capital Contributions, that will be required of the Company by the Company Subsidiary and/or Property Owner to develop and lease-up the Project, as estimated under the Project Budget.

1.22       “ Class A Capital Contributions ” shall mean the amount of the Capital Contribution made by a Class A Member (including any Class A Preferred Reserve), but exclusive of any Class A Priority Capital Contribution.

1.23       “ Class A Mandatory Redemption Date ” shall mean that date which is the earlier of six (6) months following the maturity date of the Loan (including the exercise of any extensions, but not any refinancings thereof), or any earlier acceleration or due date thereof.

1.24       “ Class A Member ” means BRG and, with respect to those Units transferred from a Class A Member, any Person who has been admitted as a Substitute Member as to the Class A Membership Interest transferred. An Assignee of a Membership Interest who receives Units from a Class A Member shall not be considered a Class A Member.

1.25       “ Class A Membership Interest ” means with respect to any Class A Member the membership interest allocated to such Class A Member, which membership interest will be determined by using a fraction in which the number of Units owned by such Class A Member is the numerator and the aggregate number of Units that are then owned by all Class A Members is the denominator. The foregoing determination is also referred to as “Pro Rata as to the Class A Membership Interest”.

1.26       “ Class A Preferred Reserve ” shall have the meaning set forth in Section 5.2.

1.27       “ Class A Priority Capital Contribution ” shall have the meaning set forth in Section 5.3(b).

1.28       “ Class A Sinking Fund ” shall have the meaning set forth in Section 6.6(a).

1.29       “ Class A Units ” means the Units held by the Class A Members.

1.30       “ Class A Unit Redemption Amount ” shall mean, as of the date of redemption of the Class A Units pursuant to Section 10.5, the sum of (i) the aggregate Net Capital Contributions of the Class A Members plus (ii) the accrued but unpaid Current Class A Return and the accrued but unpaid Priority Class A Return of the Class A Members.

1.31       “ Class B Member ” means SOIF III, and, with respect to those Units transferred from a Class B Member, any Person who has been admitted as a Substitute Member as to the Class B Membership Interest transferred. An Assignee of a Membership Interest who receives Units from a Class B Member shall not be considered a Class B Member.

1.32       “ Class B Membership Interest ” means with respect to any Class B Member the membership interest allocated to such Class B Member, which membership interest will be determined by using a fraction in which the number of Units owned by such Class B Member is the numerator and the aggregate number of Units that are then owned by all Class B Members is the denominator. The foregoing determination is also referred to as “Pro Rata as to the Class B Membership Interest”.

1.33       “Class B Redemption Consideration” means the consideration payable in cash by BRG to the Company, for use by the Company to redeem of all outstanding Class B Units, payable to the then-existing Class B Member(s). The Class B Redemption Consideration shall be determined in accordance with the analysis set forth on Schedule II attached.

1.34       “ Class B Units ” means the Units held by the Class B Members.

1.35       “ Company ” shall refer to BR Whetstone Member, LLC, a Delaware limited liability company, as it may from time to time be constituted.

1.36       “ Company Subsidiary ” shall refer to BR-TBR Whetstone Venture, LLC, a Delaware limited liability company, as it may from time to time be constituted.

1.37       “ Company Subsidiary LLC Agreement ” shall refer to the Limited Liability Company Agreement of Company Subsidiary dated as of May 20, 2015, as may be amended or restated from time to time.

1.38       “ Conversion Date ” shall have the meaning set forth in Section 10.4(b).

1.39       “ Conversion Period ” shall mean the six (6) month period of time that commences on the Conversion Trigger Date.

1.40       “ Conversion Right ” shall mean the Class A Member’s right to convert its Class A Units to Class B Units, as provided in Section 10.4.

1.41       “ Conversion Trigger Date ” shall mean the date on which seventy percent (70%) of the Project’s apartments have been leased.

1.42       “ Current Class A Return ” means an amount equal to the product of fifteen percent (15.0%) per annum, determined on the basis of 365 or 366 days, as the case may be, for the actual number of days in the period for which the Current Class A Return is being determined, times the sum of the Net Class A Capital Contributions, commencing on the date the initial Class A Capital Contribution is made.

1.43       “ Default Event ” shall have the meaning as set forth in Section 8.6(c).

1.44       “ Entity ” shall mean any Person or other business entity, other than an individual.

1.45       “ Fiscal Year ” shall mean the fiscal year of the Company as set forth in Section 13.2 hereof.

1.46       “ Gain ” shall mean the gain recognized by the Company for federal income tax purposes in any Adjustment Period by reason of a Capital Transaction.

1.47       “ IRC ” shall mean the Internal Revenue Code of 1986, Title 26 of the United States Code, as the same may now or hereafter be amended.

1.48       “ Lender ” shall mean KeyBank National Association, and its successors and/or assigns.

1.49       “ Liquidating Trustee ” shall have the meaning as set forth in Section 12.4.

1.50       “ Loan ” shall refer to that certain bridge acquisition loan in the approximate amount of $25,147,500 to be hereafter borrowed by the Property Owner, as the same will be more specifically described in the Basic Documents, including any successor in interest to the Loan.

1.51       “ Loss ” shall mean the loss recognized by the Company for federal income tax purposes in any Adjustment Period by reason of a Capital Transaction.

1.52       “ Majority ” means a collection of Members owning, in the aggregate, more than 50% of the Membership Interests of all Members and, in the context of voting, means a collection of Members who approve, consent to, or vote in favor of a matter before the Members and who own, in the aggregate, more than 50% of the Membership Interests of all Members entitled to vote thereon. When used in the context of a class of Membership Interests, “Majority” shall mean a collection of those class Members owning, in the aggregate, more than 50% of the Membership Interests of all Members of that class, and, in the context of voting, means a collection of class Members who approve, consent to, or vote in favor of a matter before the class Members and who own, in the aggregate, more than 50% of the class Membership Interests of all class Members entitled to vote thereon.

1.53       “ Management Committee ” means the management committee of the Company Subsidiary as more fully described in the Company Subsidiary LLC Agreement.

1.54       “ Manager ” or “ Managers ” shall mean the Person or Persons selected to be the manager or managers of the Company from time to time by either a Majority of the Class B Members or pursuant to Section 7.4 herein. The initial Manager is SOIF III. A Member simply by virtue of its status as a member in the Company shall not be a Manager of the Company unless so selected by a Majority of the Class B Members or pursuant to Section 7.4 herein. A Manager does not have to be a Member of the Company. The term “Manager” as used herein shall specifically mean all of the then incumbent Managers of the Company where the context requires.

1.55       “ Material Action ” means to file any insolvency, or reorganization case or proceeding, to institute proceedings to have the Company be adjudicated bankrupt or insolvent, to institute proceedings under any applicable insolvency law, to seek any relief under any law relating to relief from debts or the protection of debtors, or consent to the institution of bankruptcy or insolvency proceedings against the Company or file a petition seeking, or consent to, reorganization or relief with respect to the Company under any applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Company or a substantial part of its property, or make any assignment for the benefit of creditors of the Company, or admit in writing the Company’s inability to pay its debts generally as they become due, or take action in furtherance of any such action.

1.56       “ Member ” or “ Members ” shall refer to the Persons listed above as Members and any other Persons who shall subsequently be admitted as Substitute Members in the Company, each in its capacity as a Member of the Company, including both Class A Members and Class B Members.

1.57       “ Membership Interest ” means with respect to any Member the membership interest allocated to such Member, which membership interest will be determined by using a fraction in which the number of Units owned by a Member is the numerator and the aggregate number of Units that are then outstanding is the denominator.

1.58       “ Minimum Gain ” shall mean, as of any particular date, an amount determined with respect to the Company on such date in accordance with Section 1.704-1(b)(4)(ii)(c) of the Treasury Regulations interpreting the IRC.

1.59       “ Mortgage ” means any deed to secure debt, mortgage, deed of trust, security agreement or other similar instrument at any time and from time to time constituting a lien upon, security interest in or security title to any of the assets of the Company, the Company Subsidiary or the Property Owner.

1.60       “ Mortgagee ” shall mean the holder of a Mortgage.

1.61       “ Net Cash Proceeds ” shall mean the proceeds received by the Company from a Capital Transaction less (i) any amounts retained by a Mortgagee and (ii) any costs incurred by the Company, the Company Subsidiary or the Property Owner in connection with such Capital Transaction not paid to an Affiliate of a Member.

1.62       “ Net Class A Capital Contributions ” means the Class A Capital Contributions, less all distributions made to the Class A Members under Section 6.8(f).

1.63       “ Net Class A Priority Capital Contributions ” means the Class A Priority Capital Contributions, less all distributions made to the Class A Members under Section 6.8(d).

1.64       “ Net Capital Contributions ” means, with respect to any Member, its aggregate Capital Contributions less any distributions delineated as return of Capital Contributions.

1.65       “ Net Profit ” or “ Net Loss ” shall mean, for each Adjustment Period, the Company’s taxable income or taxable loss for such Adjustment Period, as determined under Section 703(a) of the IRC and Section 1.703-1 of the Treasury Regulations interpreting the IRC (for this purpose, all items of income, gain, loss or deduction are required to be stated separately pursuant to Section 703(a)(1) of the IRC and shall be included in taxable income or taxable loss), with the following adjustments:

(a)          any tax-exempt income, as described in Section 705(a)(1)(B) of the IRC, realized by the Company during such Adjustment Period shall be taken into account in computing such Net Profit or Net Loss as if it were taxable income;

(b)          any expenditures of the Company described in Section 705(a)(2)(B) of the IRC for such Adjustment Period, including any items treated under Section 1.704-1(b)(2)(iv)(i) of the Treasury Regulations interpreting the IRC as items described in Section 705(a)(2)(B) of the IRC, shall be taken into account in computing such Net Profit or Net Loss as if they were deductible items;

(c)          any items of income, deduction, gain or loss that are specially allocated pursuant to Sections 6.4, 6.5 and 6.9 shall not be taken into account in computing Net Profit or Net Loss;

(d)          if the Company’s taxable income or taxable loss for such Adjustment Period, as adjusted in the manner provided above, is a positive amount, such amount shall be the Company’s Net Profit for such Adjustment Period, and if negative, such amount shall be the Company’s Net Loss for such Adjustment Period.

1.66       “ Obligations ” shall mean the indebtedness, liabilities and obligations of the Company, Company Subsidiary or Property Owner under or in connection with the Basic Documents or any related document in effect as of any date of determination.

1.67       “ Person ” means any individual, corporation, partnership, joint venture, limited liability company, limited liability partnership, association, joint stock company, trust, unincorporated organization or other organization, whether or not a legal entity, and any governmental authority.

1.68       “ Priority Class A Return ” shall have the meaning set forth in Section 5.3(b) .

1.69       “ Project ” means an approximately 204–unit Class A rental apartment complex located on the Property and owned by Property Owner, as more fully described in the Company Subsidiary LLC Agreement.

1.70       “ Project Budget ” means the Total Project Budget for the Parking Improvements as those terms are used in the Company Subsidiary LLC Agreement.

1.71       “ Property ” shall mean that certain real property located in Durham, North Carolina and more fully described in the Company Subsidiary LLC Agreement in which a fee interest is held by Property Owner and upon which the Project is located.

1.72       “ Property Owner ” shall have the meaning set forth in the preamble of this Agreement.

1.73       “ Property Owner LLC Agreement ” shall mean the Limited Liability Company Agreement of the Property Owner.

1.74       “ Representative ” means a representative to the Management Committee.

1.75       “ SOIF II ” shall mean Bluerock Special Opportunity+ Income Fund II, LLC, a Delaware limited liability company.

1.76       “ SOIF III ” shall have the meaning set forth in the introductory paragraph above.

1.77       “ Subsidiary Interest ” shall have the meaning set forth in the preamble to this Agreement.

1.78       “ Substitute Member ” shall mean a transferee of a Member’s Membership Interest who has complied with the requirements under Article 10 of this Agreement and is a Member of the Company.

1.79       “ Tax Rate ” shall mean, for any Fiscal Year, the sum of (i) the highest then marginal income tax rate for individual taxpayers as set forth in the IRC and (ii) the highest then marginal income tax rate for individual taxpayers in effect in the State of Delaware.

1.80       “ Taxing Jurisdiction ” means the federal, state, local, or foreign government that collects tax, interest, or penalties, however designated, on any Member’s share of the income or gain attributable to the Company.

1.81       “ Treasury Regulations ” shall mean the Income Tax Regulations promulgated under the IRC, as such regulations may be amended from time to time including corresponding provisions of succeeding regulations.

1.82       “ Unit ” means one or more of the units of limited liability company interest, or fractional portions thereof, representing a Member’s ownership rights in the Company, classified as Class A or Class B. Except as may be specifically otherwise provided in this Agreement (e.g., Section 10.4) a Member will be issued one (1) Unit for each dollar of Capital Contributions made by such Member.

ARTICLE 2

NAME, OFFICE, REGISTERED AGENT, AND
MEMBER’S NAMES AND MAILING ADDRESSES

2.1          Name : The name of the limited liability company is:

“BR WHETSTONE MEMBER, LLC”

2.2          Principal Business Office . The address of the principal business office of the Company shall be located at 712 Fifth Avenue, 9 ^th Floor, New York, New York 10019, and shall also be at such other place or places as the Manager may hereafter determine.

2.3          Registered Office . The address of the registered office of the Company in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree Dr., Suite 101, Dover, Delaware 19904.

2.4          Registered Agent . The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is National Registered Agents, Inc., 160 Greentree Dr., Suite 101, Dover, Delaware 19904.

2.5          Members’ Names and Number of Units . The names and addresses of the Members, number of Class A and Class B Units owned by each Member, Class A Membership Interests, and Class B Membership Interests are set forth on Schedule I .

ARTICLE 3

DURATION

The term of the Company shall commence on the date of the filing of a Certificate of Formation with the Office of the Secretary of State of the State of Delaware, and its duration shall be perpetual. The existence of the Company as a separate legal entity shall continue until cancellation of the Certificate of Formation.

ARTICLE 4

PURPOSE

The Company is organized for the purpose of: (i) acquiring, owning, holding, financing, hypothecating, pledging and disposing of the Subsidiary Interest; and (ii) engaging in any lawful business, purpose or activity that may be undertaken by a limited liability company organized under and governed by the Act. The Company shall possess and may exercise all of the powers and privileges granted by the Act, by any other law or by this Agreement, together with any powers incidental thereto, including such powers and privileges as are necessary or convenient to the conduct, promotion or attainment of the business, purposes or activities of the Company.

ARTICLE 5

CAPITAL CONTRIBUTIONS, MEMBERSHIP INTERESTS, ETC.

5.1          Admission of Member . The Members are admitted to the Company as the sole equity members of the Company upon their respective execution and delivery of a counterpart signature page to this Agreement.

5.2          Capital Contribution of the Members; Payment . The Members have made their respective initial Capital Contributions to the Company as set forth on Schedule I , and shall contribute such additional amounts of capital as provided in this Agreement. The Members agree that the Class A Member’s initial Capital Contributions, and each subsequent Capital Contribution pursuant to its Class A Capital Commitment, shall include an interest reserve calculated at a fifteen percent (15%) annual interest rate which shall be segregated by the Company from all other Capital Contributions made by the Class A Member pursuant to its Class A Capital Commitment, and from all other funds held by the Company, and shall be solely used to establish a specific reserve to the benefit of the Class A Member (the “ Class A Preferred Reserve ”). Except as otherwise provided in Sections 6.7 and 10.4(b), the funds on deposit in the Class A Preferred Reserve shall be earmarked and used specifically for the monthly draw and payment of a portion of the Current Class A Return equivalent to a 15% annualized return on all Class A Capital Contributions, and the Manager shall not have the authority to use the funds in the Class A Preferred Reserve for any other purpose without the prior written approval of the Class A Member (or if there is more than one Class A Member, Members owning a Majority of the Class A Membership Interests). Until such time as the Class A Units are redeemed or converted to Class B Units as provided in Section 10.4, the Company must at all times maintain not less than three (3) months’ worth of payments in the Class A Preferred Reserve.

5.3          Additional Contributions .

(a)          To the extent necessary and as required of the Company by the Company Subsidiary and/or Property Owner to develop and lease-up the Project under the Project Budget, the Manager may call for additional capital from the Members, and, until such time as the Class A Member has fully funded the Class A Capital Commitment, the Class A Member shall be obligated to fund its share (based on 89.5% Class A Member share and 10.5% Class B Member share) of all such capital calls (“ Budgeted Development Capital Calls ”). If Class A Member fails to fund its share of any Budgeted Development Capital Calls within ten (10) days of written notification of the need therefor, its Current Class A Return shall be as of that date reduced to seven percent (7%) per annum. All other capital calls shall be made as and in the amount determined by the Manager, including but not limited to for the funding of any Current Class A Return after payments thereon are drawn from the Class A Preferred Reserve, Priority Class A Return, or if additional funds are required by or called for pursuant to the Company Subsidiary LLC Agreement and/or Property Owner LLC Agreement (all such additional funds, other than Budgeted Development Capital Calls, are referred to as “ Additional Capital Contribution(s) ”). For the avoidance of doubt, to the extent that Cash Flow From Operations is insufficient to allow the Company, after taking into account any draws from the Class A Preferred Reserve as provided in Section 6.7, to pay the Class A Return and Priority Class A Return in full on a monthly basis as required under Sections 6.6(b) and (c), Manager shall be obligated to make a call for Additional Capital Contributions in such amounts as are necessary in order to allow the Company to do so, and all such capital called for that purpose shall be distributed as provided in Sections 6.6(b) and (c). Additional Capital Contributions shall be solely the obligation of the Class B Members, and the Class A Member shall have no obligation to make Additional Capital Contributions. All additional funds contributed by the Class B Members shall be contributed as additional capital to the Company by the Class B Members Pro Rata as to the Class B Membership Interest (or in any such other percentages as they shall agree) within ten (10) days of written notification of the need therefor; provided, that no Additional Capital Contributions funded shall be distributed to the Members without the prior written consent of the Class A Member. Any Additional Capital Contributions made by the Class B Members will be treated on the same basis and parity as the initial Capital Contributions of the Class B Members made in accordance with Section 5.2 above.

(b)          If the Class B Members fail to contribute all of their share (based on 89.5% Class A Member share and 10.5% Class B Member share) of any Budgeted Development Capital Call or to make all of an Additional Capital Contribution, the Class A Member may, but shall not be obligated to, contribute as additional capital to the Company (if there is more than one Class A Member, Pro Rata as to the Class A Membership Interest (or in any such other percentages as they shall agree)) all or a portion of the amount that the Class B Members failed to fund. Any such Capital Contributions made by the Class A Member shall be referred to as the “ Class A Priority Capital Contributions. ” Any Class A Priority Capital Contributions made by the Class A Member will be treated on the same basis as its prior Capital Contributions of the Class A Member made in accordance with Section 5.2 above, except that the Current Class A Return on such Class A Priority Capital Contributions shall be twenty percent (20%) per annum (the “ Priority Class A Return ”) and the Class A Member shall have a priority return of its Priority Class A Return and Class A Priority Capital Contributions in distributions from Capital Transactions and Liquidations, as set forth in Section 6.8.

(c)          Additional Capital Contributions shall be made in cash unless the Manager and Class A Member agree otherwise.

(d)          Except as provided in Sections 5.2, 5.3(a) and 5.3(b), no Capital Contributions may be made to the Company without the prior written consent of the Class A Member.

5.4          Return of Capital Contributions; Interest on Capital Contributions .

(a)          No Member shall have the right to withdraw his Capital Contributions or demand or receive the return of his Capital Contributions or any part thereof, except as provided in Section 10.5 with respect to the Class A Member and as otherwise provided in this Agreement.

(b)          The Manager shall not be liable for the return of the Capital Contributions of the Members. If and to the extent that any such return is required, such return shall be made solely from the assets of the Company.

(c)          The Company shall not pay interest on the Capital Contributions of any Member, except as otherwise provided in this Agreement.

5.5          Capital Accounts . The Capital Accounts of the Company shall be established and maintained for each Member hereunder in accordance with the federal income tax accounting practices and rules established under Section 704(b) of the IRC and the Treasury Regulations thereunder.

5.6          Membership Interests . The Class A Membership Interests and Class B Membership Interests in the Company are set forth on Schedule I .

5.7          Admission of Additional Members . The Company shall not be permitted to admit additional Members hereunder without consent of: (1) the Manager and (2)(a) the Members owning a Majority of the Membership Interests and (b) the Class A Membership Interest, to the extent outstanding. Except as expressly permitted in this Agreement, no other Person shall be admitted as a Member of the Company, and no additional interest in the Company shall be issued, without such approval of a Majority of the Membership Interests and the Class A Membership Interest.

ARTICLE 6

ALLOCATION AND DISTRIBUTION OF CERTAIN ITEMS

6.1          Net Profit . After giving effect to the special allocations set forth in Sections 6.4, 6.5 and 6.9, all Net Profit shall be allocated to the Members’ Capital Accounts in the following manner and order of priorities:

(a)         After giving effect to the allocations contained in Section 6.1(b), the Company’s Net Profit shall be allocated one hundred percent to the Class B Members’ Capital Accounts.

(b)         To the extent Net Loss was allocated to the Members’ Capital Accounts pursuant to Section 6.2(a), then prior to making the allocations under Section 6.1(a), Net Profit shall be allocated to the Members’ Capital Accounts in an amount equal to and in the reverse order that such Net Loss was allocated.

6.2          Net Loss . After giving effect to the special allocations set forth in Sections 6.4, 6.5, and 6.9, all Net Loss shall be allocated to the Members’ Capital Accounts in the following manner and order of priorities:

(a)          After giving effect to the allocations contained in Section 6.2(b), the Company’s Net Loss shall be allocated in the following manner and order of priorities:

(i)          First, one hundred percent (100%) to the Class B Members’ Capital Accounts until the cumulative Net Loss allocated to the Class B Members’ Capital Accounts pursuant to this Section 6.2(a)(i) equals the amount of the Class B Members’ capital contributions to the Company;

(ii)         Second, one hundred percent (100%) to the Class A Members’ Capital Accounts until the cumulative Net Loss allocated to the Class A Members’ Capital Accounts pursuant to this Section 6.2(a)(ii) equals the amount of the Class A Members’ capital contributions to the Company; and

(iii)        Third, the balance, to the Members who bear the risk of such loss or if no Members bears the risk of loss, one hundred percent (100%) to the Class B Members’ Capital Accounts.

(b)          To the extent Net Profit was allocated to the Members’ Capital Accounts pursuant to Section 6.1(a), then prior to making any allocations of Net Loss under Section 6.2(a), Net Loss shall be allocated to the Members’ Capital Accounts in an amount equal to and in the reverse order that such Net Profit were allocated.

6.3          Composition of Special Allocation Items . Except as required otherwise under the IRC or the Regulations issued thereunder, all special allocations of income, gain or deduction made pursuant to Sections 6.4, 6.5 and 6.9 shall consist of a proportionate part of each item of gross income, gain or deduction, as the case may be, that the Company recognizes in the year such allocation is to be made.

6.4          Special Current Class A Return Allocations . Prior to the allocations contained in Sections 6.1 and 6.2, items of income and Gain shall be specially allocated to the Class A Members in proportion to and to the extent of the excess, if any, of (i) the cumulative Current Class A Return distributed to each Member pursuant to Sections 6.6(b), 6.7(a) and 6.8(e) hereof from the commencement of the Company to a date thirty (30) days after the end of such Adjustment Period, over (ii) the cumulative items of income and Gain allocated to such Member pursuant to this Section 6.4 for all prior Adjustment Periods.

6.5          Special Priority Class A Return Allocations . Prior to the allocations contained in Sections 6.1 and 6.2, items of income and Gain shall be specially allocated to the Class A Members in proportion to and to the extent of the excess, if any, of (i) the cumulative Priority Class A Return distributed to each Member pursuant to Sections 6.6(c), 6.7(b) and Section 6.8(c) hereof from the commencement of the Company to a date thirty (30) days after the end of such Adjustment Period, over (ii) the cumulative items of Gain allocated to such Member pursuant to this Section 6.5 for all prior Adjustment Periods.

6.6          Distributions of Cash Flow From Operations . Distributions of Cash Flow From Operations shall be made monthly. Distributions made pursuant to this Section shall be made monthly to the Members in the following order of priority:

(a)          On and after the Class A Mandatory Redemption Date, to the Class A Members until such Class A Members have received distributions in an amount equal to the Class A Unit Redemption Amount; provided, that, if distributions of Cash Flow From Operations to be made under this Section 6.6(a) are insufficient to fully satisfy the Class A Unit Redemption Amount, all Cash Flow From Operations shall be segregated in a separate account of the Company (the “ Class A Sinking Fund ”) until such time as distributions to be made under this Section 6.6(a) plus the amounts in the Class A Sinking Fund are sufficient, and are used, to fully satisfy the Class A Unit Redemption Amount;

(b)          Second, to the Class A Members (to be shared among them, pro rata, according to their respective unpaid Current Class A Return) until such Class A Members have received distributions in an amount equal to their respective unpaid Current Class A Return (as may be modified by Section 6.14) until it is paid in full pursuant to this Section 6.6(b), Section 6.7(a) and Section 6.8(e);

(c)          Third, to the Class A Members (to be shared among them, pro rata, according to their respective unpaid Priority Class A Return) until such Class A Members have received distributions in an amount equal to their respective unpaid Priority Class A Return (as may be modified by Section 6.14) until it is paid in full pursuant to this Section 6.6(c), Section 6.7(b) and Section 6.8(c); and

(d)          Fourth, to the Class B Members pro rata, in accordance with their respective Class B Membership Interests.

For the avoidance of doubt, to the extent that Cash Flow From Operations is insufficient to allow the Company, after taking into account any draws from the Class A Preferred Reserve as provided in Section 6.7, to pay the Class A Return and Priority Class A Return in full on a monthly basis, Manager shall be obligated to make a call for Additional Capital Contributions in such amount as are necessary in order to allow the Company to do so, and all such capital called for that purpose shall be distributed as provided in subsections (b) and (c) above.

6.7          Distributions from Class A Preferred Reserve . The Manager shall cause distributions to be made from the Class A Preferred Reserve on a monthly basis as necessary in order to pay a portion of the unpaid Current Class A Return equivalent to a 15% annualized return on all Class A Capital Contributions; provided however , from and after the occurrence of a Default Event, the Manager shall cause distributions to be made from the Class A Preferred Reserve on a monthly basis as necessary in order to pay any unpaid Current Class A Return and all unpaid Priority Class A Return, in the following order of priority:

(a)          To the Class A Members (to be shared among them, pro rata, according to their respective unpaid Current Class A Return) until such Class A Members have received distributions in an amount equal to their respective unpaid Current Class A Return (as may be modified by Section 6.14) until it is paid in full pursuant to Section 6.6(b), this Section 6.7(a) and Section 6.8(e); and

(b)          Second, to the Class A Members (to be shared among them, pro rata, according to their respective unpaid Priority Class A Return) until such Class A Members have received distributions in an amount equal to their respective unpaid Priority Class A Return (as may be modified by Section 6.14) until it is paid in full pursuant to Section 6.6(c), this Section 6.7(b) and Section 6.8(c).

6.8          Distributions From Capital Transactions and on Liquidations . Net Cash Proceeds in connection with Capital Transactions and/or in connection with the liquidation of the Company shall be distributed within thirty (30) days of the completion of the applicable event. Distributions made pursuant to this Section shall be made in the following amounts and order of priority:

(a)          To discharge the debts and obligations of the Company;

(b)          To fund reasonable and necessary reserves (i) as determined in good faith by the Manager and (ii) approved by the Class A Members;

(c)          To the Class A Members (to be shared among them, pro rata, according to their respective unpaid Priority Class A Return) until such Class A Members have received distributions of Net Cash Proceeds in an amount equal to their respective unpaid Priority Class A Return until it is paid in full pursuant to this Section 6.8(c), Section 6.7(b) and Section 6.6(c);

(d)          To the Class A Members (to be shared among them, pro rata, according to their respective Net Class A Priority Capital Contributions) until such Class A Members have received distributions of Net Cash Proceeds in an amount equal to their respective Net Class A Priority Capital Contributions until it is paid in full pursuant to this Section 6.8(d);

(e)          To the Class A Members (to be shared among them, pro rata, according to their respective unpaid Current Class A Return) until such Class A Members have received distributions of Net Cash Proceeds in an amount equal to their respective unpaid Current Class A Return until it is paid in full pursuant to this Section 6.8(e), Section 6.7(a) and Section 6.6(b);

(f)           To the Class A Members (to be shared among them, pro rata, according to their respective aggregate Net Class A Capital Contributions), until such Class A Members have received distributions of Net Cash Proceeds in the amount equal to their respective aggregate Net Class A Capital Contributions until they are repaid in full pursuant to this Section 6.8(f);

(g)          To the Class B Members pro rata, in accordance with (and in reduction of) their respective positive Capital Accounts; and

(h)          To the Class B Members pro rata, in accordance with their respective Class B Membership Interests.

6.9          Special Tax Allocations . The allocations in this Section 6.9 shall be given effect before giving effect to the allocations contained in Sections 6.1 through Section 6.5:

(a)          Notwithstanding any provision contained herein to the contrary, if the amount of Net Loss and Loss for any Adjustment Period that would otherwise be allocated to a Member hereunder would cause or increase a deficit balance in such Member’s Capital Account to an amount in excess of the sum of such Member’s share of Minimum Gain as of the last day of such Adjustment Period, then a proportionate part of such Net Loss and Loss equal to such excess shall be allocated proportionately first to the other Members in an amount up to, but not in excess of, the amount that would cause or increase a deficit balance in each of such Member’s Capital Accounts to an amount equal to the sum of their respective shares of Minimum Gain as of the last day of such Adjustment Period. For purposes of this Section 6.9(a), each Member’s Capital Account shall be computed as of the last day of such Adjustment Period in the manner provided in the definition of Capital Account, but shall be reduced for the items described in Section 1.704-1(b)(2)(ii)-(d)(4), (5) and (6) of the Treasury Regulations interpreting the IRC.

(b)          Notwithstanding any provision in this Agreement to the contrary, if any of the Members, as of the last day of any Adjustment Period, has a deficit balance in its Capital Account that exceeds the sum of its share of Minimum Gain as of such last day, then all items of income and gain of the Company (consisting of a prorata portion of each item of Company income, including gross income and Gain) for such Adjustment Period shall be allocated to such Members in the amount and in the proportions required to eliminate such excess as quickly as possible. For purposes of this Section, a Member’s Capital Account shall be computed as of the last day of an Adjustment Period in the manner provided in the definition of Capital Account, but shall be increased by any allocation of income to such Member for such Adjustment Period under Section 6.9(c).

(c)          Notwithstanding any provision in this Agreement to the contrary, if there is a net decrease in the Minimum Gain during any Adjustment Period, then all items of gross income and Gain of the Company for such Adjustment Period (and, if necessary, for subsequent Adjustment Periods) shall be allocated to each Member in proportion to, and to the extent of, an amount equal to the greater of (i) the portion of such Member’s share of the net decrease that is allocable to the disposition of Company property subject to one or more nonrecourse liabilities of the Company or (ii) the deficit balance in such Member’s Capital Account (determined before any allocation for such Adjustment Period) in excess of the sum of such Member’s share of the Minimum Gain as of the close of such Adjustment Period. The items required to be allocated to the Members under this Section 6.9(c) shall be determined in accordance with Section 1.704-2(f) of the Treasury Regulations.

(d)          Notwithstanding any other provision contained herein, any item of Company loss, deduction or IRC Section 705(a)(2)(B) expenditure that is attributable to a nonrecourse liability of the Company for which any Member bears the economic risk of loss (e.g., a Member or an Affiliate makes the nonrecourse loan to the Company) shall be allocated to the Member or Members who bear the economic risk of loss with respect to such liability to the extent required in Section 1.704-2(i) of the Treasury Regulations interpreting the IRC.

6.10        Curative Allocations. The allocations set forth in Section 6.9 (the “ Regulatory Allocations ”) are intended to comply with the requirements of the Treasury Regulations. The Regulatory Allocations may not be consistent with the manner in which the Members intend to divide Company distributions. Accordingly, notwithstanding any other provision of this Article (other than the Regulatory Allocations), the Manager may make such offsetting special allocations of income, gain, loss, or deduction in whatever manner it determines appropriate so as to prevent the Regulatory Allocations from distorting the manner in which the Company’s distributions would otherwise be divided among the Members. In general, the Members anticipate that this will be accomplished by specially allocating other profit, losses, gain, and deductions among the Members so that, after such offsetting special allocations are made, the amount of each Member’s Capital Account will be, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations were not a part of this Agreement and all Company items had been allocated to the Members solely pursuant to Sections 6.1 through 6.5.

6.11        IRC Section 704(c) Tax Allocations . In accordance with IRC Section 704(c) and the Treasury Regulations thereunder, income, gain, loss, and deduction with respect to any property contributed to the capital of the Company shall, solely for tax purposes, be allocated among the Members so as to take account of any variation between the adjusted basis of such property to the Company for federal income tax purposes and its fair market value. Any elections or other decisions relating to such allocations shall be made by the Manager in its sole discretion.

6.12        Distribution Limitations . Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not be required to make a distribution to the Members on account of their interests in the Company if such distribution would violate the Act or any other applicable law or would constitute a default under any Basic Document.

6.13        Amounts Withheld for Taxes or Paid on Composite Returns . All amounts withheld pursuant to the IRC or any provision of any state or local tax law with respect to any payment, distribution or allocation to the Company or one or more of the Members shall be treated as amounts paid or distributed, as the case may be, to the Members for whom such amounts were withheld pursuant to this Article for all purposes under this Agreement. The Manager may allocate any such amount among the Members in any manner that is in accordance with applicable law. The Company is authorized to withhold from payments and distributions to one or more Members, or with respect to allocations to one or more Members, and to pay over to any federal, state or local government, any amounts so withheld under this Agreement, the IRC or any provisions of any other federal, state, or local law, and shall allocate any such amounts to the Members for whom such amounts were withheld. To the extent required by any provision of any state or local tax law, the Company shall file a composite tax return on behalf of one or more of its Members and shall report and pay income taxes required by law to be paid with such composite tax returns to any Taxing Jurisdiction, and any such amounts shall be treated as a distribution to the Member for whom such composite tax return is filed. The Company shall have the power and authority to determine (a) whether a Member should be included in a composite tax return required to be filed by any provision of any applicable tax law, and (b) whether the Member is subject to withholding, pursuant to this Section, on payments, distributions or allocations from the Company. A Member shall be limited to an action against the applicable Taxing Jurisdiction(s) with respect to any claims based on over-withholding or over-payment on a composite tax return, and neither the Company, nor the Manager shall have any liability to any Member with respect to any withholding or composite tax return filings or payments made pursuant to this Section.

6.14        Timing of Distributions of Current Class A Return and Priority Class A Return . Distributions of Current Class A Return under Section 6.6(b) or Section 6.8(e) and Priority Class A Return under Section 6.6(c) or Section 6.8(c) will be made on a monthly basis on or before the 10 ^th day of each calendar month following the calendar month to which the Current Class A Return or Priority Class A Return relates. If a distribution of Current Class A Return or Priority Class A Return is not made on or before the 10 ^th day of a calendar month (a “ Delayed Distribution ”), the Current Class A Return and the Priority Class A Return (if any) shall be calculated by increasing the annual percentage rate therein by 3.5% from the 11 ^th day of such calendar month until such time as all Delayed Distributions are made.

ARTICLE 7

APPOINTMENT OF MANAGER; OBLIGATIONS, REPRESENTATIONS AND
WARRANTIES OF THE MANAGER

7.1          Appointment of the Manager . Subject to Section 8.6, the business and affairs of the Company shall be managed by or under the direction of the Manager. The Manager shall hold office until such Manager’s earlier dissolution, death, resignation, expulsion or removal. Any successor Manager shall be appointed by a Majority of the Class B Membership Interest prior to the Conversion Date and by a Majority of the Membership Interest on and after the Conversion Date, unless otherwise provided in this Agreement. A Manager need not be a Member. A Member shall not be deemed to be a Manager simply by virtue of being a Member in the Company. The initial Manager designated by the Class B Members is SOIF III.

7.2          Compensation of Manager; Removal of Manager . The Manager shall receive no compensation for serving as the Manager of the Company. The Manager shall be reimbursed for all reasonable expenses incurred in managing the Company. The Manager and Affiliates of a Member or the Manager may provide services to the Company, the Company Subsidiary, the Property Owner and the Property in addition to those contemplated to be provided by a manager and receive additional compensation therefor; provided that any fee paid by the Company, the Company Subsidiary or the Property Owner for such services shall be at rates customarily charged for similar services by Persons engaged in the same or substantially similar activities in the relevant geographical area and the provisions of each such contract shall be at least as favorable to the Company as the terms reasonably expected by the Manager to be available in an arm’s-length transaction with an independent third party and, provided further, that any such contract with an Affiliate of the Manager, Class B Members and/or their Affiliates must be approved by the Class A Members, which approval will not be unreasonably withheld, conditioned or delayed. Unless otherwise restricted by law or the Basic Documents, the Manager may resign by written notice to the Company, in which case if there are no persons or entities appointed by or willing to serve as Manager under the Class B Members, then any vacancy may be filled by the written consent of the Members owning a Majority of the Class A Membership Interests. Notwithstanding the foregoing and except as provided in Section 7.4, a Manager may not be removed or expelled as the Manager and no additional Manager may be appointed unless there is cause for removal. For purposes hereof, “cause for removal” shall mean (i) an event of default under the Loan or Basic Documents has been declared by the Lender, (ii) the assertion by the Class A Members that any action by the Manager constitutes fraud against the Company, the Company Subsidiary, the Class A Members, or the Project, (iii) the good faith assertion by the Class A Members that any action or failure to act by the Manager constitutes (or constituted) gross negligence, willful misconduct, bad faith or a material violation of law in the performance of its duties to the Company, (iv) the assertion by the Class A Members of a violation by the Manager of its fiduciary obligations to the Company, and (v) the good faith assertion by the Class A Members of any material breach by the Manager of the material terms of this Agreement; provided, however, that such alleged breach of this Agreement by the Manager described in subpart (v) has not been cured by the Manager within sixty (60) days after such time as it may be demonstrated that the Manager had actual knowledge of such alleged material breach; provided, however that if such breach cannot reasonably be cured within such sixty (60) day period and the Manager is diligently pursuing such cure, the sixty (60) day period shall be extended to ninety (90) days.

In the event that a “cause for removal” described in the definition of “cause for removal” above occurs, upon the giving of written notice by the Class A Members to the Manager that the Manager is replaced, then the current Manager shall be replaced by the Manager designated in such notice (the “ Class A Manager ”) and the Class A Manager shall be the sole Manager of the Company with all powers of the Manager of the Company and the initial Manager shall have no further rights as and shall immediately cease to act as Manager of the Company, and notwithstanding anything in this Agreement to the contrary, such Class A Manager may not thereafter be removed without the consent of the Class A Members.

7.3          Manager as Agent . To the extent of its powers set forth in this Agreement and subject to Section 8.6, the Manager is an agent of the Company for the purpose of the Company’s business, and the actions of the Manager taken in accordance with such powers set forth in this Agreement shall bind the Company.

7.4          Manager Following Class A Conversion Date . As of the date of closing of BRG’s exercise of its Conversion right as provided in Section 10.4 (the “ Conversion Date ”), SOIF III, and any then current Manager shall each and all be deemed to have automatically resigned as Managers and cease to be Managers of the Company, whereupon BRG shall become the sole Manager of the Company. Notwithstanding Section 7.2, on and after the Conversion, the Manager may only be removed by a Majority Vote of the Members for an act or omission by the Manager related to the Company constituting gross negligence or fraud causing a material diminution of value in the Company or the Subsidiary Interest.

ARTICLE 8

STATUS OF THE MANAGER’S POWERS
AND TRANSFERABILITY OF INTERESTS

8.1          Control and Responsibility . Except as otherwise expressly provided herein, the Manager shall be responsible for the management of the Company business and shall have all powers conferred by law as well as those that are necessary, advisable or consistent in connection therewith. Except as otherwise provided in Section 8.6(d) as to the Class A Member, any note, contract, management agreement, deed, bill of sale, assignment, conveyance, mortgage, lease or other commitment purporting to bind the Company or any third party to any action shall be executed and delivered by the Manager on behalf of the Company and no other signature whatsoever shall be required.

8.2          Status of Manager’s Interests . The Manager shall not have the right to transfer or assign the interests it holds as Manager in the Company; provided, however, t o the extent that BRG or a BRG Transferee Transfers all or a portion of its Interest in accordance with Article 10 to a BRG Transferee, then after a Conversion such BRG Transferee may be appointed as an additional Manager under Section 7.1 by BRG or a BRG Transferee then holding all or a portion of an Interest without any further action or authorization by any Member. 

8.3          No Right to Partition . To the fullest extent permitted by law, neither the Members nor the Manager shall have the right to bring an action for partition or any sale for division against the Company or any of its properties. Except as otherwise expressly provided in this Agreement, to the fullest extent permitted by law, each of the Members hereby irrevocably waives any right or power that such Person might have to cause the Company or any of its assets to be partitioned, to cause the appointment of a receiver for all or any portion of the assets of the Company, to compel any sale of all or any portion of the assets of the Company pursuant to any applicable law or to file a complaint or to institute any proceeding at law or in equity to cause the dissolution, liquidation, winding up or termination of the Company. To the fullest extent permitted by law, each of the Members hereby irrevocably waives any right or power that such Person might have to reject this Agreement in any bankruptcy or insolvency proceedings relating to such Person. The Members shall not have any interest in any specific assets of the Company, and the Members shall not have the status of a creditor with respect to any distribution pursuant to Agreement. The interest of the Members in the Company is personal property.

8.4          Extent of Obligation . The Manager shall devote such time to the business and affairs of the Company as the Manager shall reasonably deem necessary to conduct properly such business and affairs in accordance with this Agreement and applicable law.

8.5          Rights and Powers . In addition to any other rights and powers that it may possess under applicable law or by virtue of this Agreement, but in any event subject to Section 8.6 hereof and the Basic Documents to the contrary, the Manager shall have the full and absolute power and authority to bind the Company and take any and all actions and do anything and everything it deems necessary or appropriate in performing its duties hereunder and shall have all rights and powers required or appropriate to its management of the Company business (and indirectly the business of the Company Subsidiary and/or the Property Owner), including, but not limited to, the following specific rights and powers. If there is more than one Manager at any time, any action taken by the Managers must be agreed to by each Manager.

8.6          Limitations on Authority of the Manager .

(a)          It is expressly understood that the Manager shall not do or perform any of the following acts on behalf of the Company without first obtaining the approval of the Members holding at least a Majority of the Membership Interests:

(i)          any act in contravention of this Agreement;

(ii)         any act that would make it impossible to carry on the ordinary business of the Company, the Company Subsidiary or the Property Owner;

(iii)        confess a judgment against the Company;

(iv)        possess Company (or Company Subsidiary or Property Owner) property or assign the rights of the Company (or Company Subsidiary or Property Owner) in specific Company (or Company Subsidiary or Property Owner) property for other than Company (or Company Subsidiary or Property Owner) purposes;

(v)         admit a Person as a Manager, except as provided in Section 7.2;

(vi)        admit a Person as a Member except as otherwise provided herein;

(vii)       continue the business of the Company in contravention of Section 12.1 hereof; or

(viii)      cause or permit the Company to extend credit to or to make any loans or become surety, guarantor, endorser, or accommodation endorser for any Entity.

(b)          It is expressly understood that, without first obtaining the approval of a Majority of the Class A Membership Interests, in their sole and absolute discretion, and subject to the Basic Documents, the Manager shall not undertake or perform any of the actions set forth in Section 8.6(a) if doing so would cause any dilution of or material adverse economic effect upon the Class A Member’s Membership Interest or its rights under this Agreement or the Company Subsidiary LLC Agreement or the Property Owner LLC Agreement, nor may the Manager undertake or perform any of the following acts on behalf of the Company without first obtaining the approval of a Majority of the Class A Membership Interests, in their sole and absolute discretion, subject to the Basic Documents:

(i)          cause the Company to approve any Major Decision (as defined in Section 7.07 of the Company Subsidiary LLC Agreement, or any successor section thereto);

(ii)         cause the Company to approve any amendment to the Company Subsidiary LLC Agreement;

(iii)        file or consent to any filing any reorganization, receivership, insolvency, bankruptcy or other similar proceedings as to the Company, the Company Subsidiary or the Property Owner pursuant to any federal or state law affecting debtor and creditor rights;

(iv)        to the fullest extent permitted by law, dissolve or liquidate the Company;

(v)         distribute any cash or property of the Company other than as provided in this Agreement;

(vi)        merge or consolidate with any other Entity;

(vii)       amend, modify or alter this Agreement, except as otherwise provided herein; or

(viii)      cause the Company, the Company Subsidiary or the Property Owner to consent to any REIT Prohibited Transaction, as defined in the Company Subsidiary LLC Agreement.

(c)          Any action or failure to act by the Manager to comply with the provisions of Sections 8.6(a) or (b), or any other breach of this Agreement by the Manager or any Class B Member, shall constitute a “ Default Event .”

(d)           Notwithstanding any provision herein to the contrary, on and after the Conversion Date (if applicable), any decision to be made by the Company or its Representatives on the Management Committee, or pursuant to Sections 7.07 or 12.06 of the Company Subsidiary LLC Agreement, shall only require the approval of and be subject to the direction of BRG and not any other Member of the Company;  provided ,  further , that on and after the Conversion Date (if applicable) only BRG, and not any other Member of the Company, shall have the power and authority to exercise the powers and privileges of the Company as manager of the Company Subsidiary.

ARTICLE 9

STATUS OF MEMBERS

9.1          Liability . Except as otherwise provided by the Act, a Member shall not be bound by, or be personally liable for, the expenses, liabilities or obligations of the Company, solely by reason of being a member of the Company.

9.2          Business of the Company . Except as otherwise provided herein, a Member shall take no part in the conduct or control of the business of the Company and shall have no right or authority to act for or to bind the Company in any manner whatsoever. Whenever this Agreement provides for the approval or action of the Class B Members, unless specifically stated otherwise, such approval or action shall be made by the Class B Members owning a Majority of the Class B Membership Interest. Whenever this Agreement provides for the approval or action of the Class A Members, unless specifically stated otherwise, such approval or action shall be made by the Class A Member (or if there is more than one Class A Member, the Class A Members owning a Majority of the Class A Membership Interest).

9.3          Status of Member’s Interest . Except as otherwise provided in this Agreement, a Member’s Membership Interest shall be fully paid and non-assessable. No Member shall have the right to withdraw or reduce its Capital Contribution to the Company except as a result of (i) the dissolution and termination of the Company or (ii) as otherwise provided in this Agreement and in accordance with applicable law.

ARTICLE 10

TRANSFER OF MEMBERSHIP INTEREST; CLASS A CONVERSION RIGHT AND REDEMPTION

10.1        Sale, Assignment, Transfer or Other Disposition of Membership Interest .

(a)           Prohibited Transfers . Except as otherwise provided in this Article 10, or as approved by the Manager, no Member shall have the right to sell, transfer, assign, pledge or encumber (“ Transfer ”) all or any part of its Membership Interest, whether legal or beneficial, in the Company, and any attempt to so Transfer such Membership Interest (and such Transfer) shall be null and void and of no effect. Notwithstanding the foregoing, any Member shall have the right, with the consent of the other Members, at any time to pledge to a lender or creditor, directly or indirectly, all or any part of its Membership Interest in the Company for such purposes as it deems necessary in the ordinary course of its business and operations.

(b)           Affiliate Transfers .

(i)          Subject to the provisions of Section 10.1(b)(ii) hereof, and subject in each case to the prior written approval of each Member (such approval not to be unreasonably withheld), any Member may Transfer all or any portion of its Membership Interest in the Company at any time to an Affiliate of such Member, provided that such Affiliate shall remain an Affiliate of such Member at all times that such Affiliate holds such Membership Interest. If such Affiliate shall thereafter cease being an Affiliate of such Member while such Affiliate holds such Membership Interest, such cessation shall be a non-permitted Transfer and shall be deemed  void ab initio , whereupon the Member having made the Transfer shall, at its own and sole expense, cause such putative transferee to disgorge all economic benefits and otherwise indemnify the Company and the other Member(s) against loss or damage under the Basic Documents.

(ii)         Notwithstanding anything to the contrary contained in this Agreement, the following Transfers shall not require the approval set forth in Section 10.1(b)(i):

provided however, as to subparagraphs (b)(ii)(a), (b), and (c), and as to subparagraph (b)(i), no Transfer shall be permitted and shall be  void ab initio  if it shall violate any “Transfer” provision of the Basic Documents. Upon the execution by any such SOIF III Transferee or BRG Transferee of such documents necessary to admit such party into the Company and to cause the SOIF III Transferee or BRG Transferee (as applicable) to become bound by this Agreement, the SOIF III Transferee or BRG Transferee (as applicable) shall become a Member, without any further action or authorization by any Member.

(c)           Admission of Transferee; Partial Transfers . Notwithstanding anything in this Article 10 to the contrary, no Transfer of Membership Interests in the Company shall be permitted unless the potential transferee is admitted as a Member under this Section 10.1(c):

(i)          If a Member Transfers all or any portion of its Membership Interest in the Company, such transferee may become a Member if (i) such transferee executes and agrees to be bound by this Agreement, (ii) the transferor and/or transferee pays all reasonable legal and other fees and expenses incurred by the Company in connection with such assignment and substitution and (iii) the transferor and transferee execute such documents and deliver such certificates to the Company and the remaining Members as may be required by applicable law or otherwise advisable; and

(ii)         Notwithstanding the foregoing, any Transfer or purported Transfer of any Membership Interest, whether to another Member or to a third party, shall be of no effect and  void ab initio , and such transferee shall not become a Member or an owner of the purportedly transferred Membership Interest, if the Manager determines in its sole discretion that:

The Manager may require the provision of a certificate as to the legal nature and composition of a proposed transferee of a Membership Interest of a Member and from any Member as to its legal nature and composition and shall be entitled to rely on any such certificate in making such determinations under this Section 10.1(c).

10.2        Withdrawals . Each of the Members does hereby covenant and agree that it will not withdraw, resign, retire or disassociate from the Company, except as a result of a Transfer of its entire Membership Interest in the Company permitted under the terms of this Agreement and that it will carry out its duties and responsibilities hereunder until the Company is terminated, liquidated and dissolved under Article 12. No Member shall be entitled to receive any distribution or otherwise receive the fair market value of its Membership Interest in compensation for any purported resignation or withdrawal not in accordance with the terms of this Agreement.

10.3        Death, Incapacity or Dissolution of a Member .

(a)          The death, insanity or incompetency of a Member who is an individual shall not, in and of itself, cause the termination or dissolution of the Company. Thereafter, the legally authorized personal representative of such Member shall have all the rights of a Member for the purpose of settling or managing his estate, and shall have such power as such party possessed to make an assignment of his interest in the Company in accordance with the terms hereof and to join with such assignee in making application to substitute such assignee as a Member, provided all of the provisions of this Agreement are complied with by the holder of such Member’s interest.

(b)          The dissolution or other cessation to exist as a legal entity of any Member that is not an individual shall not, in and of itself, cause the termination or dissolution of the Company. Thereafter, the authorized representative of such entity, possessed of the rights of such Member for the purpose of winding up, in any orderly fashion, and disposing of the business of such entity, shall have such power as such entity possessed to make an assignment of its interest in the Company in accordance with the terms hereof and to join with such assignee in making application to substitute such assignee as a Member, provided all of the provisions of this Agreement are complied with by the holder of such Member’s interest.

10.4        BRG Class A Conversion Right . During the Conversion Period and for so long as BRG holds Class A Units in the Company, BRG shall have the right to convert all, but not less than all, of its Class A Units into Class B Units in accordance with this Section 10.4.

(a)          During the Conversion Period, and so long as BRG then holds a Majority of the Class A Membership Interests, BRG may deliver a notice to the Company (a “ Conversion Notice ”) indicating that BRG is exercising its conversion right under this Section 10.4. From and after the date of the Company’s receipt of the Conversion Notice (the “ Receipt Date ”), Current Class A Return and Priority Class A Return shall cease to accrue on BRG’s Net Capital Contributions to the Company; however, BRG shall retain all other rights of a Class A Member until the Conversion Date.

(b)          Within one (1) day of the date of the Receipt Date of the Conversion Notice, the Company shall simultaneously (i) redeem all then-issued Class B Membership Interests for the Class B Redemption Consideration, (ii) issue to BRG one (1) new Class B Unit representing ownership of 100% of the Company (the “ Conversion Unit ”), (iii) return to BRG any remaining funds in the Class A Preferred Reserve and (iv) cancel all of BRG’s Class A Units. The date of such redemption, issuance, return of funds and cancellation shall be referred to in this Agreement as the “ Conversion Date .” From and after the Conversion Date, BRG shall cease to be a Class A Member but shall be the sole Class B Member of the Company, with no further action required by the Company, the Manager or the Members. The Manager shall amend Schedule I as of the Conversion Date to reflect the conversion, including but not limited to an updated enumeration of all Class A Units, Class B Units and Membership Interests as of the Conversion Date.

(c)          [reserved].

10.5        Class A Mandatory Redemption .

(a)          Notwithstanding the restrictions on Transfer contained in this Article 10, but subject to the Basic Documents, the Company shall redeem all, but not less than all, of the Class A Units on the Class A Mandatory Redemption Date for payment of the Class A Unit Redemption Amount in immediately available funds to the Class A Members, unless prohibited by law, and in such event, on the earliest practicable date such redemption would not be prohibited by law; provided, however, this Section 10.5 shall not be applicable to the extent the Class A Member has exercised its Conversion Right under Section 10.4 prior to the Class A Mandatory Redemption Date.

(b)          Subjection to Section 10.5(a), on the Class A Mandatory Redemption Date (or earliest practicable date), upon receipt of the Class A Unit Redemption Amount, the Class A Member shall transfer its Class A Units to the Company free and clear of any and all liens, encumbrances or other restrictions and execute and acknowledge a written instrument of assignment, together with such other instruments as the Manager, in its reasonable discretion, may deem necessary or desirable to effect the Transfer to the Company of the Class A Units, all in form and substance reasonably satisfactory to the Manager.

(c)          Without limiting the generality of any other provision of this Agreement, following the redemption of the Class A Units, the Class A Members shall have no rights in the Company.

(d)          To the extent the Company does not redeem the Class A Units on the Class A Mandatory Redemption Date, the Class A Units shall continue to accrue the Current Class A Return except that the Current Class A Return shall be twenty percent (20%) per annum on and after the Class A Mandatory Redemption Date until and through the date the Class A Unit Redemption Amount is paid in full.

ARTICLE 11

CESSATION OF A MEMBER

A Member shall cease to be a Member of the Company upon the assignment of all of the Member’s Membership Interest in the Company.

ARTICLE 12

DISSOLUTION AND TERMINATION OF THE COMPANY

12.1        Dissolution and Termination . The Company shall be dissolved, and its affairs shall be wound up upon the first to occur of the following: (i) the decision of the Manager, with the written concurrence of the Members owning more than fifty percent (50%) of the Membership Interests, that it would be in the best interest of the Company to dissolve; (ii) the termination of the legal existence of the last remaining Member of the Company or the occurrence of any other event that terminates the continued membership of the last remaining Member of the Company in the Company unless the Company is continued without dissolution in a manner permitted by this Agreement or the Act; (iii) the entry of a decree of judicial dissolution under the Act; or (iv) the filing by the Secretary of State of a Certificate of Dissolution. Upon the occurrence of any event that causes the last remaining Member of the Company to cease to be a Member of the Company (other than upon continuation of the Company without dissolution upon (i) an assignment by the last remaining Member of all of its Membership Interest in the Company and the admission of the transferee pursuant to Article 10, or (ii) the resignation of the last remaining Member and the admission of an additional member of the Company pursuant to Article 10), to the fullest extent permitted by law, the personal representative of such Member is hereby authorized to, and shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of such Member in the Company, agree in writing (i) to continue the Company and (ii) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute Member of the Company, effective as of the occurrence of the event that terminated the continued membership of such Member in the Company.

(a)          Notwithstanding any other provision of this Agreement, the Bankruptcy of a Member shall not cause such Member to cease to be a Member of the Company and upon the occurrence of such an event, the Company shall continue without dissolution.

(b)          In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets of the Company in an orderly manner), and the assets of the Company shall be applied in the manner, and in the order of priority, set forth in Section 12.2.

(c)          The Company shall terminate when (i) all of the assets of the Company, after payment of or due provision for all debts, liabilities and obligations of the Company, shall have been distributed to the Members in the manner provided for in this Agreement and (ii) the Certificate of Formation shall have been canceled in the manner required by the Act.

12.2        Distribution Upon Dissolution . Upon the dissolution of the Company, the Manager shall take full account of the Company assets and liabilities, the assets shall be liquidated as promptly as is consistent with obtaining fair value thereof, and the proceeds therefrom, to the extent sufficient therefor, after payment of or due provision for all debts, liabilities and obligations of the Company as required by the Act and applicable law, shall be applied and distributed in accordance with Section 6.8 hereof. In the event it becomes necessary or desirable, in the sole discretion of the Manager, to make a distribution of the Company property in kind, then such property shall be transferred and conveyed to the Members, or their assigns, so as to vest in each of them as a tenant-in-common, a percentage interest in the whole of said property equal to the percentage interest he or she would have received had the aforesaid property not been distributed in kind.

12.3        Time . A reasonable time, as determined by the Manager, from the date of an event of dissolution, shall be allowed for the orderly liquidation of the assets of the Company and the discharge of Company liabilities.

12.4        Liquidating Trustee. In the event of a dissolution of the Company, liquidation of the assets of the Company and discharge of its liabilities may, in the sole discretion of the Manager, be carried out by a liquidation trustee or receiver, who shall be selected by the Manager and shall be a bank or trust company or other person or firm having experience in managing, liquidating or otherwise handling property of the type then owned by the Company. This trustee (the “ Liquidating Trustee ”) shall not be personally liable for the debts of the Company but otherwise shall have such obligations and authorities as are given the Manager pursuant to this Agreement.

12.5        Statement of Termination . The Members shall be furnished by the Manager with a statement prepared, at Company expense, by the Accountant that shall set forth the assets and liabilities of the Company as of the date of complete liquidation and distribution as herein provided. Such statement shall also schedule the receipts and disbursements made with respect to the termination hereunder.

ARTICLE 13

ACCOUNTING AND REPORTS

13.1        Books and Records .

(a)          The Manager shall maintain full and accurate books of the Company, showing all receipts and expenditures, assets and liabilities, profits and losses, and all other records necessary for recording the Company’s business and affairs, including those sufficient to record the allocations and distributions provided for in Article 6 and Section 12.2 hereof. Such books and records shall be open for the inspection and examination by any Member, in person or by its duly authorized representative, at reasonable times at the offices of the Company upon prior written notice.

(b)          The Company books and records shall be kept in accordance with Generally Accepted Accounting Principles and any change in method shall be made by the Manager in its sole discretion.

13.2        Fiscal Year . The annual accounting period of the Company shall be the calendar year. The cutoff date of the accounting period shall be the last day of the calendar month.

13.3        Reports . The Company shall create an internally prepared annual statement showing the revenue and expenses of the Company, the balance sheet thereof and a statement of change in cash flow at the end of each Fiscal Year (the “ Annual Financial Statements ”). The Annual Financial Statements shall be mailed to each Member within fifteen (15) days following the end of the Fiscal Year for which such statements were prepared. Each Member’s Schedule K-1 will be mailed to the Member no later than thirty (30) days after the end of each Fiscal Year of the Company. The Company shall transmit all reports received under Section 11.03 of the Company Subsidiary LLC Agreement to the Class A Members immediately upon the Company’s receipt of such reports.

13.4        Bank Accounts . All funds of the Company shall be deposited in its name in such checking and savings accounts or time certificates as shall be designated by the Manager. Withdrawals therefrom shall be made upon such signature(s) as the Manager may designate.

13.5        Tax Returns . In addition to the Annual Financial Statements, the Manager shall, at Company expense, cause all tax returns for the Company to be timely prepared and filed with the appropriate authorities.

13.6        Tax Matters . SOIF III is hereby charged with the responsibility for all tax-related matters affecting the Company and is hereby designated as the “ Tax Matters Representative ”. It shall, within ten (10) days of receipt thereof, forward to each Member a photocopy of any relevant correspondence relating to the Company received from any Federal and/or State taxing authority (the “ Taxing Authority ”). It shall, within five (5) days thereof, advise each Member in writing of the substance of any material conversation held with any representative of a Taxing Authority. Any reasonable costs incurred by the Tax Matters Representative for retaining accountants and/or attorneys on behalf of the Company in connection with any Taxing Authority audit of the Company shall be expenses of the Company. The Tax Matters Representative shall, if applicable, comply with all requirements concerning the registration of tax shelters pursuant to Section 6111 of the IRC and the Treasury Regulations thereunder, and Form 8264 (or any successor thereto), including, but not limited to, registering the Company with the Taxing Authority and furnishing to each Member any identification numbers assigned by any Taxing Authority to the Company.

ARTICLE 14

SPECIAL LIMITED POWER OF ATTORNEY

14.1        Grant of Power .

(a)          Each Member does hereby irrevocably constitute and appoint the Manager as its true and lawful attorney, in its name, place and stead, to make, execute, sign, acknowledge, swear to (where appropriate), and file or record:

(i)          any articles, certificates, documents or instruments (including this Agreement) that may be required to be filed by the Company under applicable laws of any jurisdiction(s) to the extent that the Manager deems such filing(s) to be necessary or required;

(ii)         any and all amendments or modifications of the instruments described in subparagraph (a)(i) above; provided, that such amendments or modifications are necessary to effect the terms and intent of this Agreement, including, for example, but not limited to, the substitution of a Member, and to evidence or effect the consent, approval or acceptance of the Member to any action approved by the Member where this Agreement provides that such consent, approval or acceptance by the Member binds the Member with regard thereto;

(iii)        all certificates and other instruments that may be required to effect the dissolution and termination of the Company pursuant to the terms of this Agreement; and

(iv)        any and all consents or other instruments deemed necessary or desirable by the Manager for the admission of the Member and Substitute Members, pursuant to the terms of this Agreement;

(b)          It is expressly understood and intended by the Members that the grant of the foregoing powers of attorney are coupled with an interest and are irrevocable.

(c)          The foregoing powers of attorney are durable powers of attorney and shall not be affected by the disability, incompetency, and/or incapacity of the principal. Furthermore, the foregoing powers of attorney shall survive the death of any Member who shall die during the term of the Company.

(d)          The foregoing powers of attorney may be exercised by the Manager acting for any Member individually.

14.2        Limitation on Powers . To the fullest extent permitted by law, the foregoing power of attorney shall in no way cause a Member to be liable in any manner for the acts or omissions of the Manager.

14.3        Substitute Members . Each Substitute Member, upon admission to the Company, shall be deemed to have appointed, ratified and reaffirmed the appointment of the Manager as its true and lawful attorney for the purposes and on the same terms as set forth in Article 14 hereof.

ARTICLE 15

AMENDMENTS

(a)          Except as otherwise provided herein, this Agreement may only be amended by the unanimous written consent of all Members.

(b)          This Agreement shall be amended by the Manager without the consent of the Members whenever:

(i)          to reflect the transfer of Units, the admission of a Member, the change in any Unit, the change in the Membership Interests, or any other alteration in the matters set forth on Schedule I ; and

(ii)         it is necessary or appropriate, in the opinion of counsel to Company, to satisfy the requirements of the IRC, Treasury Regulations thereunder or administrative guidelines or interpretations relating thereto, to maintain the status of partnership taxation or to satisfy the requirements of federal and/or state securities laws.

(c)          Notwithstanding anything herein to the contrary, no amendment shall be made to this Agreement that, in the opinion of counsel for the Company:

(i)          is in violation of the provisions of applicable law; or

(ii)         would result in the Company being treated as other than a partnership for federal income tax purposes.

ARTICLE 16

INVESTMENT REPRESENTATION

Each of the Members, by executing this Agreement, represents and warrants to the Company and the Manager as follows:

(a)          Each Member or individual executing this Agreement on behalf of an Entity that is a Member hereby represents and warrants that such Member has acquired such Member’s Membership Interest in the Company for investment solely for such Member’s own account with the intention of holding such Membership Interest for investment, without any intention of participating directly or indirectly in any distribution of any portion of such Membership Interest, including an economic interest, and without the financial participation of any other Person in acquiring such Membership Interest in the Company.

(b)          Each Member hereby acknowledges that such Member is aware that such Member’s Membership Interest in the Company has not been registered (i) under the Securities Act of 1933, as amended (the “ Securities Act ”), (ii) under applicable Delaware securities laws or (iii) under any other state securities laws. Each Member further understands and acknowledges that his representations and warranties contained in this Section are being relied upon by the Company as the basis for the exemption of the Members’ Membership Interests in the Company from the registration requirements of the Securities Act and from the registration requirements of applicable state securities laws. Each Member further acknowledges that the Company will not and has no obligation to recognize any sale, transfer, or assignment of all or any part of such Member’s Membership Interest, including an economic interest in the Company to any Person unless and until the provisions of this Agreement hereof have been fully satisfied.

(c)          Each Member hereby acknowledges that prior to its execution of this Agreement, such Member received a copy of this Agreement and that such Member has examined this Agreement or caused this Agreement to be examined by such Member’s representative or attorney. Each Member hereby further acknowledges that such Member or such Member’s representative or attorney is familiar with this Agreement and with the Company’s business plans. Each Member acknowledges that such Member or such Member’s representative or attorney has made such inquiries and requested, received, and reviewed any additional documents necessary for such Member to make an informed investment decision and that such Member does not desire any further information or data relating to the Company. Each Member hereby acknowledges that such Member understands that the purchase of such Member’s Membership Interest in the Company is a speculative investment involving a high degree of risk and hereby represents that such Member has a net worth sufficient to bear the economic risk of such Member’s investment in the Company and to justify such Member’s investing in a highly speculative venture of this type.

ARTICLE 17

MISCELLANEOUS

17.1        Meetings . Meetings of the Company may be called by the Manager and shall be called by the Manager upon the written request of the Members holding at least twenty-five (25%) percent of the Membership Interests of the Company.

17.2        Members’ Action by Consent in Lieu of Meeting. Any action required by law to be taken at any annual or special meeting of Members, or any action which may be taken at a meeting of the Members, may be taken without a meeting, without prior notice and without a vote, if a consent in writing, setting forth the action so taken is signed by the Members having not less than the Membership Interests that would be necessary to authorize such action at a meeting at which all Members entitled to vote thereon were present and voted. Such consents shall have the same force and effect as the unanimous consent of the Members at a meeting duly held. Such consents shall be filed with the minutes of the meetings of the Members.

17.3        Other Ventures . Notwithstanding any duty otherwise existing at law or in equity, except as otherwise provided in this Agreement to the contrary, any of the Members, the Manager, BRG’s direct and indirect parents, SOIF II’s members, SOIF III’s members, BGF’s members, BGF II’s members or any of their Affiliates may engage in or possess an interest in other profit-seeking or business ventures of every nature and description, independently or with others, including those that may compete with the Company without any obligation to share any profits therefrom with the Company or the Members. The doctrine of corporate opportunity or any analogous doctrine, shall not apply to any Member, Manager, member of a Member or Manager, direct or indirect parent of BRG, member of SOIF II, SOIF III, BGF or BGF II, or any of their Affiliates. No Member, Manager, member of a Member or Manager, direct or indirect parent of BRG, member of SOIF II, SOIF III, BGF or BGF II, or any of their Affiliates who acquires knowledge of a potential transaction, agreement, arrangement or other matter that may be an opportunity for the Company shall have any duty to communicate or offer such opportunity to the Company, and such Member, Manager, member of a Member or Manager, direct or indirect parent of BRG, member of SOIF II, SOIF III, BGF or BGF II, or Affiliate shall not be liable to the Company or to the other Members for breach of any fiduciary or other duty by reason of the fact that such Member, Manager, member of a Member or Manager, direct or indirect parent of BRG, member of SOIF II, SOIF III, BGF or BGF II, or Affiliate pursues or acquires for, or directs such opportunity to, another Person or does not communicate such opportunity or information to the Company. Neither the Company nor any Member shall have any rights or obligations by virtue of this Agreement or the relationship created hereby in or to such independent ventures or the income or profits or losses derived therefrom, and the pursuit of such ventures, even if competitive with the activities of the Company, shall not be deemed wrongful or improper.

Nothing in this Agreement shall be deemed to preclude any Member, Manager, member of a Member or Manager, direct or indirect parent of BRG, member of SOIF II, SOIF III, BGF or BGF II, or any Affiliate of any Member, Manager, member of a Member or Manager, direct or indirect parent of BRG, or member of SOIF II, SOIF III, BGF or BGF II, from conducting its business in any manner it may elect, including, without limitation, entering into any transaction with any Person affiliated in any way with such Person, provided that no such conduct of its business shall result in a breach by such Member or Manager of its obligations under this Agreement.

17.4        Exculpation and Indemnification .

(a)          To the fullest extent permitted by applicable law, neither the Members, the Manager, SOIF III, BRG, direct or indirect parent of BRG, the members of SOIF III, nor any officer, manager, director, employee, agent or Affiliate of the foregoing (collectively, the “ Covered Persons ”) shall be liable to the Company or any other Person who is bound by this Agreement for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct.

(b)          To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of such Covered Person’s gross negligence or willful misconduct with respect to such acts or omissions; provided , however , that any indemnity under this Section by the Company shall be provided out of and to the extent of Company assets only, and the Members and the Manager shall not have personal liability on account thereof; and provided , further , that so long as any Obligations are outstanding, no indemnity payment from funds of the Company (as distinct from funds from other sources, such as insurance) of any indemnity under this Section shall be payable from amounts allocable to any other Person pursuant to the Basic Documents.

(c)          To the fullest extent permitted by applicable law, expenses (including reasonable legal fees) incurred by a Covered Person defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Covered Person to repay such amount if it shall be determined that the Covered Person is not entitled to be indemnified as authorized in this Section.

(d)          A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, or any other facts pertinent to the existence and amount of assets from which distributions to the Members might properly be paid.

(e)          To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company or any other Member, any Covered Person acting under this Agreement or otherwise shall not be liable to the Company or any Member for its good faith reliance on the provisions of this Agreement. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of a Covered Person to the Company or its members otherwise existing at law or in equity, are agreed by the parties hereto to replace such other duties and liabilities of such Covered Person.

(f)           Any liability of the Company shall be satisfied out of the income or assets of the Company (including the proceeds of any insurance that the Company may recover) and no Member shall have any liability with respect thereto.

(g)          Notwithstanding the foregoing provisions, any indemnification set forth herein shall be fully subordinate to the Loan, and to the fullest extent permitted by law, shall not constitute a claim against the Company in the event that the Company’s Cash Flow From Operations (including any additional capital contributions by the Members, if any) are insufficient to pay all of its monthly obligations to creditors.

(h)          The foregoing provisions of this Section shall survive any termination of this Agreement.

17.5        Notices . All notices under this Agreement shall be in writing, duly signed by the party giving such notice, and transmitted by registered or certified mail (and such notice shall be deemed delivered three (3) business days after deposit in the mail) or by a national overnight delivery service, such as Federal Express (and such notice will be deemed delivered the next business day after it is deposited with such delivery service) addressed as follows:

(a)          If given to the Company:

BR Whetstone Member, LLC

c/o Bluerock Real Estate, L.L.C.

712 Fifth Avenue, 9 ^th Floor

New York, NY 10019

(b)          If given to the Manager:

c/o Bluerock Real Estate, L.L.C.

712 Fifth Avenue, 9 ^th Floor

New York, NY 10019

(c)          If given to any Member, at the address set forth on Schedule I , or at such other address as any Member may hereafter designate by notice to the Company and all other Members.

Any party to this Agreement may change the address to which notices are to be sent in accordance with this Section by notifying the other parties hereto in writing of such new address.

17.6        Captions . Article and Section titles or captions contained in this Agreement are inserted only as a matter of convenience and for reference and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision hereof.

17.7        Identification . Whenever the singular number is used in this Agreement and when required by the context, the same shall include the plural, and vice versa; and the masculine gender shall include the feminine and neuter genders, and vice versa. The words “include” and “including” shall be deemed to be followed by the phrase “without limitation.” The terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section, paragraph or subdivision.

17.8        Counterparts . This Agreement may be executed in any number of counterparts and all of such counterparts shall be deemed an original and for all purposes constitute one agreement binding on the parties hereto, notwithstanding that all parties are not signatory to the same counterpart.

17.9        Governing Law . This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to principles of conflict of laws.

17.10      Members’ Competence . Anything in this Agreement to the contrary notwithstanding, no Member, or any Assignee of the Membership Interest thereof, shall be a person or organization prohibited by law from becoming such. Any assignment of an interest in the Company to any Person not meeting such standard shall be, to the fullest extent permitted by law, void and ineffectual and shall not bind the Company.

17.11      Binding Agreement . Except as otherwise provided herein to the contrary, this Agreement shall be binding upon and inure to the benefit of the parties hereto, their personal representatives, successors and assigns, and shall be enforceable in accordance with its terms.

17.12      Severability . If any provision of this Agreement shall be declared invalid or unenforceable, the remainder of this Agreement will continue in full force and effect so far as the intent of the parties can be carried out, and the parties further understand and agree that any non-waivable provision of the Act shall supersede any provision of the Agreement.

17.13      Entire Agreement . This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.

17.14      Benefits of Agreement; No Third-Party Rights . None of the provisions of this Agreement shall be for the benefit of or enforceable by any creditor of the Company or by any creditor of the Members. Nothing in this Agreement shall be deemed to create any right in any Person (other than Covered Persons) not a party hereto, and this Agreement shall not be construed in any respect to be a contract in whole or in part for the benefit of any third Person (other than Covered Persons).

17.15      Member’s Rights . In addition to all other rights and remedies that a Member may have at law and in equity, including, but not limited to, under the Act, a Member may bring any action against the Manager, another Member and/or the Company to enforce the terms and provisions of this Agreement, to obtain a judgment for damages for a breach of this Agreement, and/or to cause the Manager and/or a Member to perform its obligations under this Agreement.

17.16      Jurisdiction and Venue . Regardless of what venue would otherwise be permissive or required, the Members and Managers stipulate that all actions arising under or affecting this Agreement shall be brought in the appropriate city and/or county courts in the City of New York, State of New York (the “ State Courts ”) or the United States District Court for the Southern District of New York in the State of New York (the “ Federal Court ”), the Members and Managers agreeing that such forums are mutually convenient and bear a reasonable relationship to this Agreement.

17.17      Consent to Jurisdiction and Service of Process. The parties irrevocably submit to the jurisdiction of the State Courts and the Federal Court for the purpose of any suit, action, or other proceeding arising under or affecting this Agreement. In addition to all other proper forms of service of process, the Members and Managers hereby agree that service of process may be accomplished by providing such service in accordance with the notice provisions of Section 17.5.

17.18      Attorneys’ Fees . In any action or suit arising out of this Agreement, the prevailing party, as determined by the trier of fact, shall be entitled to recover from the other party its reasonable attorneys’ fees and costs incurred in such action or suit. Reasonable attorneys’ fees shall be based upon such fees actually incurred at the customary hourly rates of attorneys in the New York, New York area for the expertise required and shall not be based upon any statutory presumptions or rates.

17.19      Waiver of Right to Jury Trial . The Manager and Members do each hereby waive to the fullest extent of the law their right to a jury trial in regard to any matter, issue, dispute or other claim which arises out of this Agreement or the transactions contemplated by this Agreement. The Manager and each Member represent to one another that each has sought the advice of legal counsel in waiving its right to a jury trial and makes such waiver willingly and freely.

[SIGNATURES APPEAR ON THE IMMEDIATELY FOLLOWING PAGES]

MEMBER SIGNATURE

The undersigned Member, agreeing to be bound by the foregoing, executes this Agreement as of the 20 ^th day of May, 2015.

COMPANY AND MANAGER SIGNATURES

The Company and the Manager, agreeing to be bound by the foregoing, execute this Agreement as of the 20 ^th day of May, 2015.

SCHEDULE I

Class A Member : BRG Whetstone Durham, LLC

Class A Capital Commitment: $12,230,730 (inclusive of $1,223,073 for projected Class A Preferred Reserve)

Class A Initial Capital Contribution: $12,230,730 (inclusive of $1,223,073 for projected Class A Preferred Reserve)*

*Represents eight months’ worth of reserves to pay Current Class A Return and all scheduled capital commitments to complete the Parking Improvements..

*Includes all scheduled capital commitments to complete the Parking Improvements..

SCHEDULE II

Analysis for Class B Redemption Consideration is attached. This analysis assumes the Members have fully funded their respective initial Capital Contributions, that the Class A Capital Commitment has been fully funded, that the Parking Improvements were completed on Budget, and that all Current Class A Returns and Priority Class A Returns have been paid. In the event that the Class B Members’ Capital Contributions were substantially more than projected (for example through Additional Capital Contributions due to substantial cost overruns to complete the Parking Improvements or for the costs or additional equity required to complete a refinancing of the Loan if that occurs prior to issuance of a Conversion Notice), the Members will confer and in good faith determine a commensurate adjustment to the attached analysis.

Exhibit 10.3

LIMITED LIABILITY COMPANY AGREEMENT
OF
BR-TBR WHETSTONE OWNER, LLC

This Limited Liability Company Agreement (together with the schedules attached hereto, this “ Agreement ”) of BR-TBR WHETSTONE OWNER, LLC, a Delaware limited liability company (the “ Company ”), is entered into by BR-TBR WHETSTONE VENTURE, LLC, a Delaware limited liability company, as the sole member (the “ Member ”). Capitalized terms used and not otherwise defined herein have the meanings set forth on Schedule A hereto.

The Member, by execution of this Agreement, hereby forms the Company as a limited liability company pursuant to and in accordance with the Delaware Limited Liability Company Act (6 Del. C. § 18-101 et seq .), as amended from time to time (the “ Act ”), and this Agreement, and the Member hereby agrees as follows:

Section 1.           Name .

The name of the limited liability company formed hereby is BR-TBR Whetstone Owner, LLC.

Section 2.           Principal Business Office .

The principal business office of the Company shall be located at 1575 Northside Drive, Building 100, Suite 200, Atlanta, GA 30318 or such other location as may hereafter be determined by the Member.

Section 3.           Registered Office .

The address of the registered office of the Company in the State of Delaware is c/o National Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, DE 19904.

Section 4.           Registered Agent .

The name and address of the registered agent of the Company for service of process on the Company in the State of Delaware is National Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, DE 19904.

Section 5.           Member .

The mailing address of the Member is set forth on Schedule B attached hereto. The Member was admitted to the Company as a member of the Company upon its execution of a counterpart signature page to this Agreement.

Section 6.           Certificates .

Christopher Vohs is hereby designated as an “authorized person” within the meaning of the Act, and has executed, delivered and filed the Certificate of Formation of the Company with the Secretary of State of the State of Delaware. Upon the filing of the Certificate of Formation with the Secretary of State of the State of Delaware, his powers as an “authorized person” ceased, and the Member thereupon became the designated “authorized person” and shall continue as the designated “authorized person” within the meaning of the Act. The Member shall execute, deliver and file any other certificates (and any amendments and/or restatements thereof) necessary for the Company to qualify to do business in North Carolina and in any other jurisdiction in which the Company may wish to conduct business. The existence of the Company as a separate legal entity shall continue until cancellation of the Certificate of Formation as provided in the Act.

Section 7.           Purposes .

The sole purpose to be conducted or promoted by the Company is to engage in the following activities: (a) to acquire, own, manage and operate the Property; (b) to enter into and perform its obligations under the Loan Documents; (c) to refinance the Property in connection with a permitted repayment of the Loan; and (d) to transact any lawful business permitted to be transacted by limited liability companies organized under the laws of the State of Delaware that is related or incidental to and necessary, convenient or advisable for the accomplishment of the above mentioned purposes.

Section 8.           Powers .

The Company, and the Member on behalf of the Company, (a) shall have and exercise all powers necessary, convenient or incidental to accomplish its purposes as set forth in Section 7 and (b) shall have and exercise all of the powers and rights conferred upon limited liability companies formed pursuant to the Act.

Section 9.           Management .

The business and affairs of the Company shall be managed by or under the direction of the Member. The Member shall have the power to do any and all acts necessary, convenient or incidental to or for the furtherance of the purposes described herein, including all powers, statutory or otherwise. Subject to Section 7 , the Member has the authority to bind the Company.

Section 10.         Officers .

(a)       Officers . The Company may have such officers, representatives or agents as are appointed from time to time by the Member (the “ Officers ”). The initial Officers are hereby designated by the Member as listed on Schedule C hereto. The additional or successor Officers shall be chosen by the Member and may consist of a President, a Secretary and a Treasurer. The Member may also choose one or more Vice Presidents, Assistant Secretaries and Assistant Treasurers. Any number of offices may be held by the same person. The Member may appoint such other Officers and agents as it shall deem necessary or advisable who shall hold their offices for such terms as shall be determined from time to time by the Member. The salaries of all Officers and agents of the Company shall be fixed by or in the manner prescribed by the Member. The Officers of the Company shall hold office until their successors are chosen and qualified. Any Officer may be removed at any time, with or without cause, by the Member. Any vacancy occurring in any office of the Company shall be filled by the Member.

(b)        Powers of the Officers . Notwithstanding anything else in this Agreement, the Officers shall have the authority to act on behalf of and bind the Company only to the extent that the Member approves such action in each particular instance. For the sake of clarity and without limiting the foregoing, the Officers shall not have the power and authority to take any action without the specific approval or consent of the Member to take such action.

(c)        President . The President shall be the chief executive officer of the Company, shall be responsible for the general and active management of the business of the Company and, subject to Section 10(b) , shall see that all specific orders and resolutions of the Member are carried into effect. When expressly authorized by the Member, the President or any other Officer authorized by the President or the Member shall execute all bonds, mortgages and other contracts, except where required or permitted by law or this Agreement to be otherwise signed and executed.

(d)        Vice President . In the absence of the President or in the event of the President’s inability to act, the Vice President, if any (or in the event there be more than one Vice President, the Vice Presidents in the order designated by the Member, or in the absence of any designation, then in the order of their election), shall perform the duties of the President expressly authorized by the Member, and when so acting, shall have all the powers of and be subject to all the restrictions upon the President. In accordance with Section 10(b) , the Vice Presidents, if any, shall perform such other duties and have such other powers as the Member may from time to time prescribe.

(e)        Secretary and Assistant Secretary . The Secretary shall be responsible for filing legal documents and maintaining records for the Company. The Secretary shall record all the proceedings of the meetings of the Company in a book to be kept for that purpose and shall perform like duties for the standing committees when required. The Secretary shall give, or shall cause to be given, notice of all meetings of the Member, if any, and, subject to Section 10(b) , shall perform such other duties as may be prescribed by the Member or the President, under whose supervision the Secretary shall serve. The Assistant Secretary, or if there be more than one, the Assistant Secretaries in the order determined by the Member (or if there be no such determination, then in order of their election), shall, in the absence of the Secretary or in the event of the Secretary’s inability to act, perform the duties and exercise the powers of the Secretary and shall perform such other duties and have such other powers as the Member may from time to time prescribe in accordance with Section 10(b) .

(f)         Treasurer and Assistant Treasurer . The Treasurer shall have the custody of the Company funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the Company and shall deposit all moneys and other valuable effects in the name and to the credit of the Company in such depositories as may be designated by the Member. The Treasurer shall disburse the funds of the Company as may be expressly ordered by the Member, taking proper vouchers for such disbursements, and shall render to the President and to the Member an account of all of the Treasurer’s transactions and of the financial condition of the Company. The Assistant Treasurer, or if there shall be more than one, the Assistant Treasurers in the order determined by the Member (or if there be no such determination, then in the order of their election), shall, in the absence of the Treasurer or in the event of the Treasurer’s inability to act, perform the duties and exercise the powers of the Treasurer and shall perform such other duties and have such other powers as the Member may from time to time prescribe in accordance with Section 10(b) .

(g)        Officers as Agents . The Officers, to the extent their powers are vested in them by specific action of the Member not inconsistent with this Agreement, are agents of the Company for the purpose of the Company’s business and the actions of the Officers taken in accordance with such powers shall bind the Company.

(h)        Duties of Officers . Except to the extent otherwise provided herein, each Officer shall have a fiduciary duty of loyalty and care similar to that of officers of business corporations organized under the General Corporation Law of the State of Delaware.

Section 11.         Limited Liability .

Except as otherwise expressly provided by the Act, the debts, obligations and liabilities of the Company, whether arising in contract, tort or otherwise, shall be the debts, obligations and liabilities solely of the Company, and the Member shall not be obligated personally for any such debt, obligation or liability of the Company solely by reason of being a Member of the Company.

Section 12.         Capital Contributions .

The Member has contributed to the Company property listed on Schedule B attached hereto.

Section 13.         Additional Contributions .

The Member is not required to make any additional capital contribution to the Company. However, the Member may make additional capital contributions to the Company at any time upon the written consent of such Member. To the extent that the Member makes an additional capital contribution to the Company, the Member shall revise Schedule B of this Agreement.

Section 14.         Allocation of Profits and Losses .

The Company’s profits and losses shall be allocated to the Member.

Section 15.         Distributions .

Distributions shall be made to the Member at the times and in the aggregate amounts determined by the Member. Notwithstanding any provision to the contrary contained in this Agreement, the Company shall not be required to make a distribution to the Member on account of its interest in the Company if such distribution would violate Section 18-607 of the Act or any other applicable law or, until the Loan is paid in full, any provision of the Loan Documents.

Section 16.         Books and Records .

The Officers shall keep or cause to be kept complete and accurate books of account and records with respect to the Company’s business. The books of the Company shall at all times be maintained by the Officers. The Member and its duly authorized representatives shall have the right to examine the Company books, records and documents during normal business hours. The Company’s books of account shall be kept using the method of accounting determined by the Member. The Company’s independent auditor, if any, shall be an independent public accounting firm selected by the Member.

Section 17.         Other Business .

The Member and any Affiliate of the Member may engage in or possess an interest in other business ventures (unconnected with the Company) of every kind and description, independently or with others notwithstanding any provision to the contrary at law or in equity. The Company shall not have any rights in or to such independent ventures or the income or profits therefrom by virtue of this Agreement.

Section 18.         Exculpation and Indemnification .

(a)       Neither the Member nor any Officer, employee or agent of the Company nor any employee, representative, agent or Affiliate of the Member (collectively, the “ Covered Persons ”) shall, to the fullest extent permitted by law, be liable to the Company or any other Person that is a party to or is otherwise bound by this Agreement for any loss, damage or claim incurred by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that a Covered Person shall be liable for any such loss, damage or claim incurred by reason of such Covered Person’s gross negligence or willful misconduct.

(b)       To the fullest extent permitted by applicable law, a Covered Person shall be entitled to indemnification from the Company for any loss, damage or claim incurred by such Covered Person by reason of any act or omission performed or omitted by such Covered Person in good faith on behalf of the Company and in a manner reasonably believed to be within the scope of the authority conferred on such Covered Person by this Agreement, except that no Covered Person shall be entitled to be indemnified in respect of any loss, damage or claim incurred by such Covered Person by reason of such Covered Person’s gross negligence or willful misconduct with respect to such acts or omissions; provided , however , that any indemnity under this Section 18 by the Company shall be provided out of and to the extent of Company assets only, and the Member shall not have personal liability on account thereof.

(c)       To the fullest extent permitted by applicable law, expenses (including legal fees) incurred by a Covered Person defending any claim, demand, action, suit or proceeding shall, from time to time, be advanced by the Company prior to the final disposition of such claim, demand, action, suit or proceeding upon receipt by the Company of an undertaking by or on behalf of the Covered Person to repay such amount if it shall be determined that the Covered Person is not entitled to be indemnified as authorized in this Section 18 .

(d)      A Covered Person shall be fully protected in relying in good faith upon the records of the Company and upon such information, opinions, reports or statements presented to the Company by any Person as to matters the Covered Person reasonably believes are within such other Person’s professional or expert competence and who has been selected with reasonable care by or on behalf of the Company, including information, opinions, reports or statements as to the value and amount of the assets, liabilities, or any other facts pertinent to the existence and amount of assets from which distributions to the Member might properly be paid.

(e)       To the extent that, at law or in equity, a Covered Person has duties (including fiduciary duties) and liabilities relating thereto to the Company or to any other Covered Person, a Covered Person acting under this Agreement shall not be liable to the Company or to any other Covered Person for its good faith reliance on the provisions of this Agreement or any approval or authorization granted by the Company or any other Covered Person. The provisions of this Agreement, to the extent that they restrict or eliminate the duties and liabilities of a Covered Person otherwise existing at law or in equity, are agreed by the Member to replace such other duties and liabilities of such Covered Person.

(f)        The foregoing provisions of this Section 18 shall survive any termination of this Agreement.

Section 19.         Assignments .

Subject to any transfer restrictions contained in the Loan Documents, the Member may assign its limited liability company interest in the Company. If the Member transfers all of its limited liability company interest in the Company pursuant to this Section 19 , the transferee shall be admitted to the Company as a member of the Company upon its execution of an instrument signifying its agreement to be bound by the terms and conditions of this Agreement, which instrument may be a counterpart signature page to this Agreement. Such admission shall be deemed effective immediately prior to the transfer and, immediately following such admission, the transferor Member shall cease to be a member of the Company.

Section 20.         Admission of Additional Members .

One or more additional members of the Company may be admitted to the Company with the written consent of the Member. Notwithstanding the foregoing, until the Loan is paid in full, the Company shall only have one member at any time.

Section 21.         Dissolution .

(a)       The Company shall be dissolved, and its affairs shall be wound up upon the first to occur of the following: (i) the termination of the legal existence of the last remaining member of the Company or the occurrence of any other event which terminates the continued membership of the last remaining member of the Company in the Company unless the Company is continued without dissolution in a manner permitted by this Agreement or the Act or (ii) the entry of a decree of judicial dissolution of the Company under Section 18-802 of the Act. Upon the occurrence of any event that causes the last remaining member of the Company to cease to be a member of the Company or that causes the Member to cease to be a member of the Company, to the fullest extent permitted by law, the personal representative of such member is hereby authorized to, and shall, within 90 days after the occurrence of the event that terminated the continued membership of such member in the Company, agree in writing (i) to continue the existence of the Company and (ii) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of the Company, effective as of the occurrence of the event that terminated the continued membership of the last remaining member of the Company or the Member in the Company.

(b)      Notwithstanding any other provision of this Agreement, the Bankruptcy of the Member or any additional member shall not cause the Member or additional member, respectively, to cease to be a member of the Company and upon the occurrence of such an event, the Company shall continue without dissolution.

(c)       In the event of dissolution, the Company shall conduct only such activities as are necessary to wind up its affairs (including the sale of the assets and property of the Company in an orderly manner), and the assets and property of the Company shall be applied in the manner, and in the order of priority, set forth in Section 18-804 of the Act.

(d)      The Company shall terminate when (i) all of the assets of the Company, after payment of or due provision for all debts, liabilities and obligations of the Company shall have been distributed to the Member in the manner provided for in this Agreement and (ii) the Certificate of Formation shall have been canceled in the manner required by the Act.

Section 22.         No Third-Party Rights .

Nothing in this Agreement shall be deemed to create any right in any Person (other than Covered Persons) not a party hereto, and this Agreement shall not be construed in any respect to be a contract in whole or in part for the benefit of any third Person.

Section 23.         Severability of Provisions .

Each provision of this Agreement shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Agreement which are valid, enforceable and legal.

Section 24.         Entire Agreement .

This Agreement constitutes the entire agreement of the parties with respect to the subject matter hereof.

Section 25.         Governing Law .

This Agreement shall be governed by and construed under the laws of the State of Delaware (without regard to conflict of laws principles), all rights and remedies being governed by said laws.

Section 26.         Amendments .

This Agreement may be modified, altered, supplemented or amended pursuant to a written agreement executed and delivered by the Member.

Section 27.         Counterparts .

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original of this Agreement and all of which together shall constitute one and the same instrument.

Section 28.         Notices .

Any notices required to be delivered hereunder shall be in writing and personally delivered, mailed or sent by telecopy, electronic mail or other similar form of rapid transmission, and shall be deemed to have been duly given upon receipt (a) in the case of the Company, to the Company at its address in Section 2 , (b) in the case of the Member, to the Member at its address as listed on Schedule B attached hereto and (c) in the case of either of the foregoing, at such other address as may be designated by written notice to the other party.

Section 29.         Effectiveness .

Pursuant to Section 18-201 (d) of the Act, this Agreement shall be effective as of the time of the filing of the Certificate of Formation with the Office of the Delaware Secretary of State on April 10, 2015.

IN WITNESS WHEREOF, the undersigned, intending to be legally bound hereby, has duly executed this Limited Liability Company Agreement as of the 20 ^th day of May, 2015.

SCHEDULE A

Definitions

A.            Definitions

When used in this Agreement, the following terms not otherwise defined herein have the following meanings:

“ Affiliate ” means, with respect to any Person, any other Person directly or indirectly Controlling or Controlled by or under direct or indirect common Control with such Person.

“ Agreement ” means this Limited Liability Company Agreement of the Company, together with the schedules attached hereto, as amended, restated or supplemented or otherwise modified from time to time.

“ Bankruptcy ” means, with respect to any Person, if such Person (i) makes an assignment for the benefit of creditors, (ii) files a voluntary petition in bankruptcy, (iii) is adjudged bankrupt or insolvent, or has entered against it an order for relief, in any bankruptcy or insolvency proceedings, (iv) files a petition or answer seeking for itself any reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, (v) files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against it in any proceeding of this nature, (vi) seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator of the Person or of all or any substantial part of its properties, or (vii) if 120 days after the commencement of any proceeding against the Person seeking reorganization, arrangement, composition, readjustment, liquidation or similar relief under any statute, law or regulation, if the proceeding has not been dismissed, or if within 90 days after the appointment without such Person’s consent or acquiescence of a trustee, receiver or liquidator of such Person or of all or any substantial part of its properties, the appointment is not vacated or stayed, or within 90 days after the expiration of any such stay, the appointment is not vacated. The foregoing definition of “Bankruptcy” is intended to replace and shall supersede and replace the definition of “Bankruptcy” set forth in Sections 18-101(1) and 18-304 of the Act.

“ Certificate of Formation ” means the Certificate of Formation of the Company filed with the Secretary of State of the State of Delaware, as amended or amended and restated from time to time.

“ Company ” means BR-TBR Whetstone Owner, LLC, a Delaware limited liability company.

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities or general partnership or managing member interests, by contract or otherwise. “Controlling” and “Controlled” shall have correlative meanings. Without limiting the generality of the foregoing, a Person shall be deemed to Control any other Person in which it owns, directly or indirectly, a majority of the ownership interests.

“ Lender ” means KeyBank National Association, and its successors and assigns of the Loan.

“ Loan ” has the meaning assigned to that term in the Loan Agreement.

“ Loan Agreement ” means that certain Loan Agreement dated as of May 20, 2015 by and between Lender and the Company, as amended, restated, supplemented or otherwise modified from time to time.

“ Loan Documents ” has the meaning assigned to that term in the Loan Agreement.

“ Member ” means BR-TBR Whetstone Venture, LLC, a Delaware limited liability company, as the initial member of the Company, and includes any Person admitted as an additional member of the Company or a substitute member of the Company pursuant to the provisions of this Agreement, each in its capacity as a member of the Company.

“ Officers ” means the officers, representatives or agents appointed from time to time by the Member pursuant to Section 10(a) .

“ Person ” means any individual, corporation, partnership, joint venture, limited liability company, limited liability partnership, association, joint stock company, trust, unincorporated organization, or other organization, whether or not a legal entity, and any governmental authority.

“ Property ” has the meaning assigned to that term in the Loan Agreement.

B.             Rules of Construction

Definitions in this Agreement apply equally to both the singular and plural forms of the defined terms. The words “include” and “including” shall be deemed to be followed by the phrase “without limitation.” The terms “herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Section, paragraph or subdivision. The Section titles appear as a matter of convenience only and shall not affect the interpretation of this Agreement. All Section, paragraph, clause, Exhibit or Schedule references not attributed to a particular document shall be references to such parts of this Agreement.

Exhibit 10.4

PROPERTY MANAGEMENT AGREEMENT

This PROPERTY MANAGEMENT AGREEMENT (the “Agreement”), entered into as of this 20th day of May, 2015, by BR-TBR WHETSTONE OWNER, LLC, a Delaware limited liability company (“Owner”) and TRIBRIDGE RESIDENTIAL PROPERTY MANAGEMENT ADVISORS, LLC, a Georgia limited liability company (“Manager”).

IN CONSIDERATION of the mutual covenants and promises each to the other made herein, the Owner does hereby engage Manager exclusively as an independent contractor, and the Manager does hereby accept the engagement, to rent, lease, operate, repair and manage the property more particularly described below (the “Project”) upon the following terms and conditions.

THE PROJECT : Located in the City of Durham, County of Durham, State of North Carolina and being known to consist of 204 multi-family residential units, and more particularly described as:

Whetstone Apartments, 501 Willard St, Durham, NC 27701

SECTION 1: DEFINITIONS

1.01 TERM

The term of this Agreement shall commence on the date hereof and shall, subject to the provisions hereof, terminate on December 31, 2015. This Agreement will automatically renew on a year to year basis thereafter until and unless terminated in accordance with the terms hereof under Section 7.06; provided, however, as long as the Project has met the Projected Financial Metrics during the initial term expiring on December 31, 2015, the Owner will, subject to the absence of any “for cause” events described in Section 7.06, not terminate this Agreement on December 31, 2015 and the term will automatically extend for an additional one year period to December 31, 2016. For purposes hereof, “Projected Financial Metrics” shall mean (i) the Project is 60% leased as of November 20, 2015, and 70% occupied as of December 31, 2015, (ii) the controllable operating expenses for the Project (i.e., all expenses other than taxes, insurance and utilities and expenses arising out of a casualty or condemnation) have not exceeded the budgeted expenses in the aggregate as set forth in the approved Budget and (iii) for the month ending December 31, 2015, the Project has generated Gross Receipts that, if annualized, would equal $2,300,000 in annual Gross Receipts for calendar year 2015, provided that the calculation of Gross Receipts for purposes of this Section 1.01(iii) shall exclude non-recurring concessions associated with the lease-up of the Project.

1.02 FEES

The management fee (“Base Management Fee”) payable each month by Owner to Manager hereunder shall be an amount equal to the greater of (a) $5,000 per month and (b) three percent (3%) of the Gross Receipts from the Project including any partial month in which Manager accepts engagement; provided, however, once the Project initially reaches Stabilization, the $5,000 minimum Base Management Fee shall no longer be applicable. For purposes hereof, Stabilization is defined as the Project being at least 90% leased.

If additional services not outlined herein are required by the Owner or Manager, Owner shall pay Manager for such additional services under the terms and conditions to be agreed upon by the parties. Manager shall be under no obligation to provide such additional services unless and until the parties have entered into a written agreement reflecting the terms and conditions thereof.

1.03 DEPOSITORY

An FDIC insured bank located in the United States of America, designated by Manager and approved by Owner . The initial Depository is Wells Fargo Bank.

1.04 FISCAL YEAR

The year beginning January 1st and ending December 31st.

1.05 BUDGET

A composite of (i) an operations Budget, which shall be an estimate of receipts and expenditures for the full and complete operation (inclusive of all maintenance, repairs and alterations) of the Project during a Fiscal Year, including a schedule of expected apartment rentals (excluding security deposits) for the period stated herein and a schedule of expected special repairs and maintenance projects, (ii) a capital Budget, which shall be an estimate of capital replacements, substitutions of, and additions to, the Project for the Fiscal Year.

1.06 GROSS RECEIPTS

The entire amount of all receipts, determined on a cash basis, from (a) tenant rentals , parking rent and other charges collected pursuant to tenant leases for each month during the term hereof; provided, however, that there shall be excluded from tenant rentals any refundable tenant security deposits (except as provided below); (b) cleaning, tenant security and damage deposits forfeited by tenants in such period; (c) tenant reimbursements for utilities (gas, electric, water and sewer); (d) video (cable), data (internet), local or long-distance services (voice), laundry and vending machine income and other ancillary revenue generated as a percentage of gross receipts; (e) any and all receipts from the operation of the Project received and relating to such period; (f) proceeds from rental interruption insurance; and (g) any other sums and charges collected in connection with termination of the tenant leases. Gross Receipts do not include the proceeds of (i) any sale, exchange, refinancing, condemnation, or other disposition of all or any part of the Project, (ii) any loans to the Owner whether or not secured by all or any part of the Project, (iii) any capital contributions to the Owner, (iv) any insurance (other than rental interruption insurance) maintained with regard to the Project, or (v) proceeds of casualty insurance or damage claims as a result of damage or loss to the Project.

1.07 PROJECT EMPLOYEES

Those persons employed by Manager and located on-site as a management staff; e .g ., senior manager, manager, assistant managers, leasing agents, maintenance personnel, courtesy officers, and other personnel necessary to be directly employed by the Manager in order to maintain and operate the Project.

SECTION 2: DUTIES AND RIGHTS OF MANAGER

2.01 APPOINTMENT OF MANAGER

During the term of this Agreement , Manager agrees, for and in consideration of the compensation provided in Section 1.02, and Owner hereby grants to Manager the sole and exclusive right, to supervise and direct the leasing, management, repair, maintenance and operation of the Project as per the authority granted herein. All services performed by Manager under this Agreement shall be done as an independent contractor of Owner. All obligations or expenses incurred hereunder, including the pro rata portion used in connection with, or for the benefit of the Project for all purchases, contracts, sales or services in bulk or volume which Manager may obtain for discount or convenience in connection thereof shall be for the account of, on behalf of, and at the expense of, Owner except as otherwise specifically provided.

Owner shall designate up to two people to serve as Owner’s representative (“Owner’s Representative”) in all dealings with Manager hereunder. Whenever the approval, consent, or other action of Owner is called hereunder, such approval, consent or action shall be binding on Owner if specified in writing via email, facsimile, or written correspondence and approved by Owner’s Representative. The initial Owner’s Representative is Laurance Kaufman. Manager shall be entitled to rely on all instruction of the Owner’s Representative pending further notification by Owner. The Owner’s Representative may be changed at the discretion of Owner.

All obligations or expenses incurred hereunder, including the pro rata portion used in connection with, or for the benefit of, the Project for all purchases, contracts, sales or services in bulk or volume which Manager may obtain for discount or convenience in connection thereof shall be for the account of, on behalf of, and at the expense of, Owner except as otherwise specifically provided. Owner shall be obligated to reimburse Manager for all reasonable customary expenses of Manager incurred specifically for the Project, which were authorized in the Budget or otherwise approved in writing by the Owner.

2.02 GENERAL OPERATION

Manager shall operate the Project in the same manner as is customary and usual in the operation of comparable facilities, and shall provide such services as are customarily provided by operators of apartment projects of comparable class and standing consistent with the Project's facilities , subject, however, in all events to the limitations of the Budget . In addition to the other obligations of Manager set forth herein, Manager shall render the following services and perform the following duties for Owner in a timely, faithful, diligent and efficient manner: (a) coordinate the plans of tenants for moving their personal effects into the Project or out of it, with a view toward scheduling such movements so that there shall be a minimum of inconvenience to other tenants; (b) maintain businesslike relations with tenants whose service requests shall be received, considered and recorded in systematic fashion in order to show the action taken with respect to each; (c) use its commercially reasonable efforts to collect all monthly rents due from tenants and rent for users or lessees of other non-dwelling facilities in the Project, if any; request, demand, collect, receive and receipt for any and all charges or rents which become due to Owner, and at Owner's expense, take such legal action as may be necessary or desirable to evict tenants delinquent in payment of monthly rental, other charges (security deposits, late charges, etc.); (d) prepare or cause to be prepared for execution and filing by the Manager as an independent contractor all forms, reports and returns required by all federal, state or local laws in connection with the unemployment insurance, workers' compensation insurance, disability benefits, Social Security and other similar taxes now in effect or hereafter imposed, and also any other requirements relating to the employment of personnel; (e) advertise when necessary, at Owner's expense and approval, the availability for rental for the Project units using commercially reasonable business strategies in connection with the use of promotional materials, market outreach efforts, internet and web-based marketing and display "for rent" or other similar signs upon the Project, it being understood that Manager may install one or more signs on or about the Project stating that same is under management of Manager and may use in a tasteful manner Manager's name and logo in any display advertising which may be done on behalf of the Project; and (f) sign, renew and cancel tenant leases for the Project, write apartment leases for terms approved by Owner (or on a month to month basis following the expiration of the initial term of a tenant lease) to bona fide individuals based upon Manager's recommendations. Manager shall exercise its commercially reasonable efforts to include the Project in signage advertising rentals available to be placed at the Project during any lease-up period.

Security Services. It is understood and agreed that Manager is not in the business of, and will not be providing alarm systems, guards, patrols and/or similar services (the “Security Services”) to the Project as a part of its management services. Should Owner choose to do so, Owner may separately contract with a company (a “Security Company”) providing Security Services.

2.03 BUDGET

(a) Attached hereto as Exhibit A is the Budget approved by Owner for the stated portion of the current Fiscal Year. For subsequent Fiscal Years, Manager shall submit the Budget for the ensuing Fiscal Year for Owner's approval no later than November 1. The Budget shall be reasonably approved by Owner prior to December 31, or, if Owner does not disapprove the Budget by such date, shall be deemed approved by Owner. In the event Owner disapproves the Budget, in whole or in part, Owner will provide edits for the Manager to make as may be reasonably practicable. Until a complete new Budget is approved, Manager shall operate on the Budget or part thereof which is approved and the disapproved items shall be governed by the like item approved for the prior Fiscal Year, with the exception of expenses for personnel which may be reasonably increased based on existing competitive conditions unless the increase for personnel is the item that is being disputed, in which case expenses for personnel will not be increased. The approved Budget shall constitute an authorization from Owner for Manager to expend money to operate and manage the Project and Manager may do so without further approval of Owner, as long as Manager does not exceed budgeted expenditures over and above the maximums set forth in Section 2.03(b) hereof.

(b) The Budget shall reflect the schedule of monthly rents for the applicable Fiscal Year. It shall also constitute a major control under which Manager shall operate the Project, and Manager shall make commercially reasonable efforts to ensure there are no substantial variances therefrom except for the variations which are in compliance with Section 2.07(a)(ii). Consequently, no expenses may be incurred or commitments made by Manager in connection with the management or operation of the Project which exceed (or would cause the total expenses to exceed) by more than five percent (5%) for the “line item” amount allocated for such category of expense provided for in the approved Budget; provided, however, the foregoing limitation with respect to incurring any expense not covered by the Budget shall not apply to expenses relating to taxes, insurance or utilities. Manager makes no guaranty, warranty or representation whatsoever in connection with the Budgets or the operational results of owning the Project , such being intended as estimates only. Manager will use its commercially reasonable efforts to develop the Budget and manage the Project in accordance with the Budget.

(c) In the event there shall be substantial variances (expenses greater than 5% of any “line item” amount allocated for such category of expense, or Gross Receipts less than 95%, of projection) between the actual results of operations for any month and the estimated results of operations for such month as set forth in the Budget, Manager shall also furnish to Owner, within fifteen (15) days after the expiration of such month, a written explanation concerning the variances and the steps being taken by Manager to rectify the variances. If after a Budget has been approved substantial variations have occurred, or are anticipated by Manager during the course of the Fiscal Year, Manager shall promptly notify Owner and, upon Owner's request, shall prepare and submit to Owner a revised forecast of annual income and expenses for the remainder of the Fiscal Year based on actual year-to-date income and expenses and Manager's forecast of income and expenses for the remainder of the Fiscal Year. Such forecast shall not constitute a replacement Budget .

2.04 PROJECT EMPLOYEES AND OTHER PERSONNEL

(a) Manager shall investigate, hire, employ, instruct, pay, promote, direct, discharge and supervise the work of the Project Employees and shall supervise, through the Project E mployees , the firing, promotion, discharge and work of all other operating and service employees performing services in, for or about the Project, all in the name of Manager. All necessary and appropriate training and training-related costs may be included in the Budget and paid accordingly. Manager shall be solely responsible for legal compliance concerning the foregoing activities and shall indemnify and hold harmless Owner from employee claims and violations of law by Manager in respect to employment matters . To the extent that some of the Project Employees may be required to reside at the Project and be available on a full-time basis in order to perform properly the duties of his/her employment, it is further understood and agreed that to the extent contemplated in the Budget and with Owner’s prior written approval, such Project Employees (including spouses or significant others and dependent children), in addition to salary and fringe benefits, may receive up to a 20% discount, or rental concession on the normal rental rates for any unit such employee is required to occupy; provided that the Community Manager and Service Manager for the Project shall each be entitled to a rental concession of up to $800.00 per month.

(b) At all times, all Project Employees shall be deemed solely employees of Manager, and not of Owner. Owner nevertheless agrees to reimburse Manager, consistent with the Budget, bi-weekly for the total aggregate Budgeted compensation, including salary and fringe benefits, payable with respect to the Project Employees and any temporary employees performing duties at the Project. The term "fringe" benefits, as used herein, shall mean and include the employee's and employer’s contribution of FICA, unemployment compensation and other employment taxes, workers' compensation, group life, accident and health insurance premiums, performance bonuses provided for in the Budget and approved by Owner, disability, vacation, holiday, and sick leave, 401(k) contributions and other similar benefits paid or payable to employees on other projects operated by Manager. Any 401(k) employee or employer contributions forfeited by the employee remain with the plan. The cost of such Project Employees’ base salaries and fringe benefits shall be separately and specifically scheduled within the Payroll line item of the Budget. The compensation, payroll taxes, employee benefits, insurance, payroll and administrative costs of such employees shall be considered a normal operating expense and shall be paid as a Project expense, as provided and to the extent permitted in the Budget.

2.05 CONTRACTS AND SUPPLIES

Subject to the Budget, the Manager shall, in the name of and on behalf of Owner and at Owner's expense, consummate arrangements with unrelated third party concessionaires, licensees, tenants or other intended users of the facilities of the Project, shall enter into contracts for furnishing to the Project electricity, gas, water, steam, telephone, cleaning, vermin exterminators, furnace and air-conditioning maintenance, security protection, pest control, landscaping, solid waste removal and any other utilities, services and concessions which are provided in connection with the maintenance and operation of apartment projects which are comparable to the Project and in accordance with standards comparable to those prevailing in other comparable apartment projects, and shall place purchase orders for such equipment, tools, appliances, materials and supplies as are reflected in the Budget and necessary to maintain the Project. Manager will make a reasonable attempt to make all contracts cancelable without penalty with (30) days written notice.

In the event that utility or power companies require a surety bond or other form of security in order to provide utilities, electrical or other services to the Project, the Manager is authorized to obtain such bond at Owner’s sole expense. Manager may, in its sole discretion, elect to guarantee, indemnify, defend and hold harmless those parties supplying such bonds or other form of security (the “Surety”) for any premiums, liabilities, losses, costs, damages, attorney fees and other expenses, including interest, which the Surety may sustain or incur by reason of, or in connection with, the issuance, renewal or continuation of such bonds or other form of security. In such event, Owner will reimburse and indemnify Manager pursuant to Section 6.03 with regard to the same.

2.06 MANAGER'S SERVICES

In the performance of its duties under this Agreement , it is agreed that Manager may enter into any contract on behalf of Owner with subsidiaries and affiliates of Manager for the furnishing of supplies and services to the Project, including but not limited to the purchasing of furniture, operating equipment, operating supplies, maintenance and landscaping services, and advertising, provided, however, that the net cost of such supplies and services to Owner is competitive with such similar services or supplies customarily used in the industry, whose services or supplies are reasonably available to the industry and whose services or supplies are reasonably available to the Project.

2.07 ALTERATIONS, REPAIRS AND MAINTENANCE

(a) (i) To the extent adequate funds are made available to Manager by Owner, Manager shall make or install, or cause to be made and installed at Owner's expense and in the name of Owner, all necessary or desirable repairs, interior and exterior cleaning, painting and decorating, plumbing, alterations, replacements, improvements and other normal maintenance and repair work on and to the Project as are customarily made by Manager in the operation of apartment projects or are required by any lease; and (ii) Manager may make emergency repairs involving manifest danger to life or property which are immediately necessary for the preservation of the safety of the Project, or for the safety of the tenants, or are required to avoid the suspension of any necessary service to the Project, in which event such reasonable expenditures may be made by the Manager without prior approval and irrespective of the cost limitations imposed by the Budget, provided that Owner or its successor in interest is notified in a timely manner and thereafter given written notice of such situation and such costs incurred.

(b) In accordance with the terms of the Budget, by Manager’s recommendation or upon Owner demand and/or approval (except in the case of emergency), Manager shall, at Owner's expense, from time to time during the term hereof, make all required capital replacements or repairs to the Project (“Capital Project”). For any Capital Projects, including but not limited to Project improvements and rehab/renovation projects that cost more than $20,000 on an individual basis, Owner shall pay Manager a fee to supervise such Capital Projects equal to 5% of the total cost of the completed work, including both hard and soft costs. The foregoing notwithstanding, Manager shall not be entitled to receive any supervision fee in connection with the construction of the Parking Improvements (as such term is defined in that certain Operating Agreement for BR-TBR Whetstone Venture, LLC (the “Venture Agreement”)).

(c) In connection with this Agreement, Manager shall provide construction management services and supervision to restore or repair physical damage to the Project resulting from fortuitous loss or acts of God, including but not limited to, fire, wind, hail and flood (“Casualty Projects”). Manager shall be paid a construction oversight management oversight fee of five percent (5%) based upon the total cost of the Casualty Project work, including hard and soft costs.

The construction oversight management fee shall be paid to Manager by Owner as soon as practical, either at the earlier of as draws are paid, or at the completion of the Casualty Project work.

Manager shall where applicable make reasonable efforts to secure at least three (3) bids for all insurance loss claims and casualty work estimated to cost more than $50,000.

(d) Manager’s responsibilities with respect to the Casualty Projects shall be performed with the professional skill and care of first-class construction managers in the geographic area in which the Project is located. The services to be provided will include, but not be limited to, the following: coordination of space planning; providing a detailed scope of work; coordination of acquisition of city approvals and permits to be obtained by the general contractor for the work; acquisition of competitive bids from contractors where required by this Agreement; bid summary and recommendations for review by Owner; negotiation of construction contracts; handling relations with tenants of the Project; coordination of change orders; securing and recording conditional and unconditional lien releases (whether partial or final) from all contractors, subcontractors, material men, suppliers and the like prior to or concurrent with the making of any payments, and providing for such other arrangements as may be reasonably prudent under the circumstances to assure the appropriate application of construction funds; inspection of construction to ensure quality and completion prior to payment; timely filing or recording of notices of completion and posting of notices of non-responsibility on behalf of Owner (if applicable) as well as otherwise taking all steps necessary to comply with all laws and procedures relating to keeping the Project free of liens; preparation of a final punch list, and supervising the completion of any punch list items of remaining or defective work; coordination of inspections upon completion; securing certificates of occupancy; obtaining final lien waivers; review, approval, and submittal to Owner of all payment applications; ensuring that all contractors, subcontractors, material men, suppliers and the like carry sufficient insurance; and, such other services as are reasonable and necessary in connection with completion of the work. Manager shall make available to Owner the advice, consultation and expertise of Manager’s technical staff, and render such periodic progress reports to Owner as it shall reasonably request.

2.08 LICENSES AND PERMITS

Manager shall, in a timely manner, apply for, and thereafter use commercially reasonable efforts to obtain and maintain in the name and at the expense of Owner all licenses and permits (including deposits and bonds) required of Owner or Manager in connection with the management and operation of the Project. Owner agrees to execute and deliver any and all applications and other documents and to otherwise cooperate to the fullest extent with Manager in applying for, obtaining and maintaining such licenses and permits.

2.09 COMPLIANCE WITH LAWS

 Manager, at Owner's expense, and to the extent that Manager has knowledge of such requirements and that funds are made available by Owner for same, shall use its commercially reasonable efforts to cause all acts and duties to be done in and about the Project to comply with all laws, regulations and requirements of any federal, state, regional, county or municipal government, having jurisdiction respecting the use or manner of use of the Project or the maintenance, alteration or operation thereof. Notwithstanding the foregoing, Manager shall not be obligated to take any action which might result in any penalty or fine being imposed upon Manager, or which requires special licensing as a business or a profession in which Manager is not licensed.

Owner shall use its commercially reasonable efforts to cause all acts and duties to be done in and about the Project to comply with all laws, regulations and requirements of any federal, state, regional, county or municipal government having jurisdiction over the use or manner of use of the Project or the maintenance, alteration or operation thereof.

2.10 LEGAL PROCEEDINGS

Manager shall institute, in its own name or in the name of Owner, but in any event at the expense of Owner, any and all legal actions or proceedings which Manager deems reasonable to collect charges, rent or other income from the Project, or to dispossess tenants or other persons in possession, or to cancel or terminate any lease, license or concessions agreement for the breach thereof, or default thereunder by any tenant, licensee or concessionaire, provided, that the legal fees and related costs in connection with such proceeding do not exceed the associated amount set forth in the approved Budget.

2.11 DEBTS OF OWNER

In the performance of its duties as Manager, Manager shall act solely as the representative of the Owner. All debts and liabilities to third persons incurred by Manager in the course of its operation and management of the Project shall be the debts and liabilities of the Owner only, and Manager shall not be liable for any such debts or liabilities.

SECTION 3: MANAGEMENT FEES

3.01 BASE MANAGEMENT FEE

The Owner shall pay to Manager, during the term hereof, the Base Management Fee and other fees and costs due hereunder for the previous month on or before the tenth (10th) day of each subsequent month; provided, however that with respect to the Base M anagement Fee due for the last month of the term hereof, such Base M anagement Fee shall be payable on the last day of such month. Manager shall have the right to withdraw the monthly fee from the Operating Account established by Manager .

In the event Manager is owed past due Base Management Fee earned by Manager in performance of its duties under this Agreement or Owner fails to timely reimburse Manager for employee expenses as referenced in this Agreement, Manager in its sole discretion may terminate this Agreement with 72 hours written notice to Owner.

3.02 PLACE OF PAYMENT

All sums payable by Owner to Manager hereunder shall be payable to Manager at its notice address set forth below, unless the Manager shall, from time to time, specify a different address in writing.

SECTION 4: PROCEDURE FOR HANDLING RECEIPTS AND OPERATING CAPITAL

4.01 BANK DEPOSITS

All monies received by Manager for or on behalf of Owner shall be deposited by Manager with the Depository. Manager shall maintain separate accounts for such funds consistent with the system of accounting of the Project. All funds on deposit shall be managed by Manager subject to the terms hereof. All monies of Owner held by Manager pursuant to the terms hereof shall be held by Manager in trust for the benefit of Owner to be held and disbursed as herein provided and shall not, unless Owner otherwise has agreed or directed, be commingled with the funds of any other person, including Manager or any affiliate of Manager. In no event shall Manager be responsible for any loss to amounts on deposit caused by the insolvency or other similar event or occurrence with respect to the Depository.

4.02 SECURITY DEPOSIT ACCOUNT

Manager shall comply with all applicable laws with respect to security deposits paid by tenants . All security deposit funds held by Manager shall at all times be the property of Owner, subject to all applicable laws with respect thereto. Upon commencement of this Agreement, the Owner authorizes the Manager to make withdrawals therefrom for the purpose of returning them as required by the lease or by existing law.

4.03 OPERATING ACCOUNT

Manager shall deposit all gross receipts from the operations of the property into an Operating Account, on which both Manager and Owner shall be signatories and pay the normal operating expenses of the property, including Manager’s fees, debt and taxes as directed.

4.04 DISBURSEMENT OF DEPOSITS

(a) Manager shall disburse and pay all funds on deposit on behalf of and in the name of Owner, in such amounts and at such times as the same are required in connection with the ownership, maintenance and operation of the Project on account of all taxes, assessments and charges of every kind imposed by any governmental authority having jurisdiction over the Project, and all costs and expenses of maintaining, operating and supervising the operation of the Project, including, but not limited to , the Base Management Fee due hereunder, salaries, fringe benefits and expenses of the Project Employees , insurance premiums, debt service, legal and accounting fees and the cost and expense of utilities, services, marketing, advertising and concessions .

(b) To the extent there are insufficient funds to pay all of such costs and expenses, Manager shall promptly notify Owner of same, and Manager shall pay such of the foregoing items in the order and manner selected by Manager . Manager shall then submit to Owner a statement of all remaining costs and expenses, and Owner shall without undue delay (and in no event in more than ten (10) days) provide sufficient funds to pay any unpaid expenses payable by Owner, in accordance with the approved Budget then in effect. Manager shall not be liable to Owner for any failure or action on Manager’s part arising out of or in conjunction with the approved Budget not being sufficient to operate the Project in the manner described herein. Nothing in this Agreement shall require the Manager to advance money on the Owner’s behalf.

4.05 AUTHORIZED SIGNATURES

Any persons from time to time designated by Manager and agreed to in writing by Owner shall be authorized signatories on all bank accounts established by Manager hereunder and shall have authority to make disbursements from such accounts to the extent permitted in this Section 4. Funds may be withdrawn from all bank accounts established by Manager, in accordance with this Section 4, only upon the signature of an individual who has been granted that authority by Owner. Owner may at any time and at Owner's sole discretion direct Manager to withdraw funds and make disbursements from such accounts, except all persons who are authorized signatories or who in any way handle funds for the Project shall be bonded or covered by dishonesty insurance in the minimum amount of $100,000 per employee. At the beginning of each year and as new persons shall be designated authorized signatories, Manager shall provide Owner with evidence of such bonding. Any expenses relating to such bond for on-site employees and for off-site employees shall be borne by Manager. Owner’s designated agents shall be added as authorized signatories at Owner’s request.

SECTION 5: ACCOUNTING

5.01 BOOKS AND RECORDS

Manager, on behalf of Owner, shall keep all books and accounts pertaining to the Project in accordance with Generally Accepted Accounting Principles in the U.S. The cutoff date of the accounting period shall be the last day of each calendar month. Manager, on behalf of Owner, shall also supervise and direct the keeping of a comprehensive system of office records, books and accounts pertaining to the Project. Such records shall be subject to examination at the office where they are maintained by Owner or its authorized agents, attorneys and accountant at all reasonable business hours and upon reasonable, advance notice to Manager . In connection with the foregoing, the capitalization and expense policy of the BR Member , as in effect from time to time, shall be adhered to by Manager. A copy of the current policy is attached hereto and incorporated herein as Exhibit D and the BR Member shall be responsible, on behalf of the Owner, for hereafter providing any changes thereto to Manager as and when any such changes are adopted.

On or about the end of each calendar quarter of each year, Manager shall cause to be furnished to Owner such information as reasonably requested in writing by BR Whetstone Member, LLC (“BR Member”), the member of BR-TBR Whetstone Venture LLC associated with Bluerock Residential Growth REIT, Inc. as is necessary for any reporting requirements of any direct or indirect members of Owner or for any reporting requirements of any REIT Member (as defined in the Venture 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 Venture Agreement) as shall be reasonably requested by BR Member. 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 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.

5.02 PERIODIC STATEMENTS

(a) On or before ten (10) days following the end of each calendar month, Manager shall deliver or cause to be delivered to Owner its standard financial reports customarily provided the owners of properties it manages, a list of which is set forth on Exhibit B . On or before ten (10) days following the end of each calendar month, Manager shall also deliver or cause to be delivered to Owner the financial reports set forth on Exhibit C . The reports are subject to change from time to time by Owner or Manager provided Manager shall not substantively decrease the quality of the information provided.

(b) Within ten (10) days after the end of such Fiscal Year, Manager will deliver to the Owner, an income and expense statement as of Fiscal Year end, and the results of operation of the Project during the preceding Fiscal Year (anything contained herein to the contrary notwithstanding, however, Manager shall not be obligated to prepare any of Owner's state or federal income tax returns).

(c) Manager shall also prepare and provide to Owner such reports and information as required by Owner to prepare the reports and tax returns required under (i) the Venture Agreement and (ii) the Loan Documents that evidence and secure any loan secured by the Project from time to time, including, but not limited to the bridge loan with KeyBank National Association. Such reports and information under clause (i) shall not exceed in scope or frequency as Manager routinely provides other owners for which Manager is providing property management services.

(d) In the event that Owner or Owner's mortgagee(s) requires an audit, the Manager shall cooperate with the auditors in a timely manner to complete the audit engagement. Also, Manager shall cooperate in a reasonable manner at the request of any indirect owner of Owner and shall work in good faith with its designated representatives, accountants or auditors to enable compliance with its public reporting, attestation, certification and other requirements under applicable securities laws and regulations, including for testing internal controls and procedures .

(e) Owner may request and Manager shall provide when available such monthly, quarterly and/or annual leasing and management reports that relate to the operations of the Project as deemed reasonable by the parties.

5.03 EXPENSES

All costs and expenses incurred in connection with the preparation of any statements, budgets, schedules, computations and other reports required under this Section 5, or under any other provisions of this Agreement , shall be borne by the Manager. Any costs and expenses incurred in connection with the preparation of any statement or report not a part of the Manager’s standard reporting package, a list of which is set forth on Exhibit B , shall be borne by Owner.

SECTION 6: GENERAL COVENANTS OF OWNER AND MANAGER

6.01 OPERATING EXPENSES

The Owner shall be solely liable for, and shall pay, all costs and expenses of managing and operating the Project that have been incurred by Owner or by Manager in accordance with the provisions of this Agreement, and shall pay, or Manager shall pay on Owner's behalf, all such costs and expenses, including, without limitation, the salaries of all Project Employees, provided however, Owner shall have no direct obligations to Project Employees for salaries or fringe benefits, as all Project Employees are employed solely by Manager and not by Owner. Owner covenants to advance to Manager such sums that are in excess of Gross Receipts required to operate the Project, upon written notice and demand from Manager within ten (10) days after receipt of written notice. Nothing in this Agreement shall require Manager to advance funds on Owner’s behalf, however if funds are advanced by Manager in the operation, or management of the Project, these funds will be reimbursed by the Owner within ten (10) days of submitting itemized invoices to the Owner . Interest shall accrue on any amounts so advanced by Manager, from the date of notice of the advance is given to Owner by Manager until the date repaid to Manager, at a rate of ten percent (10%) per annum. Owner further recognizes that the Project may be operated in conjunction with other projects and that costs may be allocated or shared between such projects on a more efficient and less expensive method of operation. In such regard, Owner consents to the allocation of costs and/or the sharing of any expenses in an effort to save costs and operate the Project in a more efficient manner to be allocated in a manner not prejudicial to Owner, so long as all allocations are clearly indicated and approved in the Budget.

6.02 OWNER'S RIGHT OF INSPECTION AND REVIEW

Owner and Owner's accountants, attorneys and agents have the right to enter upon any part of the Project at any reasonable time during the Term for the purpose of examining or inspecting the Project or examining or making copies of books and records of the Project. Any inspection shall be done with as little disruption to the business of the Project as possible. Books and records of the Project shall be kept, as of the commencement date, at the Project or at the location where any central accounting and bookkeeping services are performed by Manager but at all times shall be the property of Owner.

6.03 INDEMNIFICATION BY OWNER

Except to the extent of the gross negligence, willful misconduct or criminal actions of Manager or its employees, directors, officers, agents or representatives in connection with its performance under this Agreement, Owner shall indemnify, hold harmless, and defend Manager (and Manager's partners, directors, shareholders, officers, employees, and agents), from and against any and all liabilities, claims, causes of action, suits, losses, demands and expenses whatsoever including, but not limited to reasonable legal fees and expenses arising out of or in the connection with the ownership, maintenance or operation of the Project or this Agreement or the performance of Manager's agreements hereunder (collectively "Claims"), including but not limited to, Claims alleging bodily injury or property damage, and/or the loss of use of property following and resulting from damage or destruction. The indemnification by Owner contained in this Section 6.03 is in addition to any other indemnification obligations of Owner contained in this Agreement, and is not limited by or to Owner's Liability Insurance. It is the intent of the parties hereto, however, to look first to Owner’s Liability Insurance with respect to all Claims hereunder.

6.04 INDEMNIFICATION BY MANAGER

Manager shall indemnify, defend and hold Owner harmless from and against all Claims for bodily injury and property damage or for financial loss to the extent that same (i) arise out of or are a result of the gross negligence, willful misconduct or criminal actions of Manager except where attributable to actions or policies approved in writing or required in writing by Owner and (ii) result in a claim against Owner arising out of the Manager’s gross negligence, willful misconduct or criminal actions. The indemnification by Manager contained in this Section 6.04 is in addition to any other indemnification obligations of Manager contained in this Agreement, and is not limited by or to Manager's Insurance. It is the intent of the parties hereto, however, to look first to Manager’s Insurance, where applicable, as set forth herein.

6.05 SURVIVAL OF INDEMNITY OBLIGATIONS

The indemnification and hold harmless obligations of the parties in Sections 6.03 and 6.04 shall survive the expiration or earlier termination of this Agreement with respect to any act or occurrence preceding such expiration or termination.

SECTION 7: DEFAULTS AND TERMINATION RIGHTS

7.01 DEFAULT BY MANAGER 

Manager shall be deemed to be in default hereunder in the event Manager shall fail to keep, observe or perform any material covenant, agreement, term or provision of this Agreement to be kept, observed or performed by Manager, and such default shall (i) result from Manager's grossly negligent acts or omissions or willful misconduct; (ii) involve Manager's misappropriation or intentional misapplication of funds received or held by Manager hereunder; or (iii) continue for a period of ten (10) days after written notice thereof by Owner to Manager as to any default in payment of money or thirty (30) days after notice thereof by Owner to Manager as to any non-monetary default, or, if such non-monetary default cannot be cured within thirty (30) days, then such additional period as shall be reasonable provided that Manager is capable of curing same and has continuously attempted to cure such default.

7.02 REMEDIES OF OWNER

Upon the occurrence of an event of default by Manager as specified in Section 7.01 hereof, Owner shall have the right to pursue any remedy it may have at law or in equity (provided that in no event shall Manager ever be liable to Owner for, and Owner hereby waives all rights to receive, punitive, consequential or exemplary damages) , it being expressly understood that although Owner has no further obligation to pay any fee due hereunder, Manager shall remain liable for any losses suffered as a result of Manager's default and the resulting termination of this Agreement . Upon such termination, Manager shall deliver to Owner any funds, books and records of Owner then in the possession or control of Manager and all accounts established by Manager for security deposits.

7.03 DEFAULTS BY OWNER

Owner shall be deemed to be in default hereunder in the event Owner shall fail to keep, observe or perform any material 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 , in the case of any default which can be cured by the payment of a liquidated sum of money, ten (10) days and, in the case of all other defaults, thirty (30) days after notice thereof by Manager to Owner but, if such non-monetary default cannot be cured within thirty (30) days, then such additional period as shall be reasonable provided that Owner is capable of curing same and has continuously attempted to cure such default.

7.04 REMEDIES OF MANAGER

Upon the occurrence of an event of default by Owner as specified in Section 7.03 hereof, Manager shall be entitled to terminate this Agreement, and upon any such termination by Manager pursuant to this Section 7.04, Manager shall have the right to pursue any remedy it may have at law or in equity (provided that in no event shall Owner ever be liable to Manager for, and Manager hereby waives all rights to receive, punitive, consequential or exemplary damages), except that, in addition to any other remedies pursued by Manager, Owner shall pay Manager a termination fee for the month in which this Agreement is terminated equal to the Base Management Fee paid for the last full calendar month preceding the month in which the Agreement was terminated .

7.05 EXPIRATION OF TERM

Upon the expiration of the Term hereof pursuant to Section 1.01 hereof, unless sooner terminated pursuant to the terms of this Agreement, Manager shall deliver to Owner all funds, including tenant security deposits, books and records of Owner then in possession or control of Manager, save and except such sums as are then due and owing to Manager hereunder. In addition, within sixty (60) days following expiration or termination of this Agreement, Manager shall deliver to Owner a final accounting, in writing, with respect to the operations of the Project, which obligation shall survive termination.

7.06 TERMINATION WITHOUT CAUSE

This Agreement shall be terminable by either party at any time without cause upon thirty (30) days prior written notice, in the case of the termination of the Agreement by Owner, and upon ninety (90) days prior written notice, in the case of the termination of the Agreement by Manager. Owner acknowledges Manager shall incur substantial expenses in the initial set-up of the management of the Project. In the event Owner terminates this Agreement without cause for any reason, including but not limited to, the sale or transfer of the Project’s ownership or assignment of property management services to another property manager within 120 days of commencement, in addition to payments and reimbursable expenses due Manager through the date of termination, Owner agrees to pay Manager an additional amount equal to one month’s Base Management Fee.

7.07 EFFECT OF TERMINATION

Upon termination of this Agreement for any reason, neither the Owner, nor the Manager, have any further rights or obligations under this Agreement other than obligations accrued prior to the termination or by the express terms surviving this Agreement.

SECTION 8: INSURANCE AND INDEMNIFICATION

8.01 OWNER’S INSURANCE: Owner shall obtain and maintain the following insurance (the specifications for which may be changed from time to time by Owner) necessary to protect the interest of Owner as it relates to the Project, at Owner's sole cost and expense, from authorized insurance companies with an AM Best rating of A IX or higher.

8.02 MANAGER'S INSURANCE: Manager shall obtain and maintain the following insurance (the specifications for which may be changed from time to time by Owner) necessary to protect the interest of Owner as it relates to Manager's operations hereunder, at Manager's sole cost and expense, from authorized insurance companies approved by Owner rated by Best's Rating at A IX or higher.

(A) $1,000,000 for bodily injury caused by accident, each accident.

(B) $1,000,000 for bodily injury caused by disease, each employee.

(C) $1,000,000 for bodily injury caused by disease, policy limit.

Employment Practices Liability insurance with limits of $1,000,000 per occurrence/aggregate, including third party coverage for sexual harassment, discrimination and other coverable employment-related torts.

8.04 OWNER'S LIABILITY INSURANCE PRIMARY AND NON-CONTRIBUTORY

In connection with claims by third parties, as between Owner's Liability Insurance and Manager's Liability Insurance, Owner's Liability Insurance shall for all purposes be deemed the primary and non-contributory coverage. No claim shall be made by Owner or its insurance company under or with respect to any insurance maintained by Manager except in the event such claim is caused by gross negligence (except actions or policies specifically approved or required by Owner), willful misconduct (except actions or policies specifically approved or required by Owner) or criminal actions on the part of Manager or Manager's employees.

8.05 RENTER’S INSURANCE

If at the direction of the Owner, Manager implements a renter’s insurance program at the Project whether it is a limited liability, or limited liability and personal contents coverage policy, any such policy held by the resident shall not remove, replace, reduce, or in any way modify the parties’ indemnification obligations herein or the requirements of Owner or Manager to provide insurance and indemnification in accordance with Sections 6 and 8. Manager agrees to use best efforts to insure compliance on the part of Project residents. Manager assumes no responsibility, liability or reduction in payment of its Base Management Fee as a result of any expense incurred by Owner, including but not limited to payment by Owner of any insurance deductible amount, cause by the failure of a resident to have renter’s insurance in place. This exclusion of liability on Manager’s part applies whether the resident failed to procure renter’s insurance at the time of initial lease signing, at the time the resident’s renter’s insurance policy came up for renewal, or at any other time.

8.06 VENDOR INSURANCE COMPLIANCE

At no cost to the Owner, Owner agrees to utilize a Vendor Compliance Management Services Company to establish and manage vendor’s insurance agreeable to Owner and Manager and approved by Manager. Utilizing such a company to manage vendor Liability Insurance Certificates and provide related services shall not remove, replace, reduce, or in any way modify the parties’ indemnification obligations herein or the requirements of Owner or Manager to provide insurance and indemnification in accordance with Sections 6 and 8. Manager assumes no responsibility, liability or reduction in payment of its Base Management Fee, for property loss, personal injury (including death) or denial of claims based on the status of a vendor’s policy whether its policy is amended, changed or lapsed. Further, Manager assumes no responsibility for the Vendor Compliance Management Services Company beyond that required under this Agreement.

8.06 WAIVER OF SUBROGATION

Each insurance policy maintained by Owner or by Manager with respect to the Project shall contain a waiver of subrogation clause, so that no insurers shall have any claim over or against Owner or Manager, as the case may be, by way of subrogation or otherwise, with respect to any claims that are insured under such policy. All insurance relating to the Project shall be only for the benefit of the party securing said insurance and all others named as insureds. Notwithstanding any contrary provision of this Agreement, Owner and Manager hereby release each other from and waive all rights of recovery and claims under or through subrogation or otherwise for any and all losses and damages to property to the extent caused by a peril insured or insurable under the policies of insurance required to be maintained under this Agreement by the waiving party and agree that no insurer shall have a right to recover any amounts paid with respect to any claim against Owner or Manager by subrogation, assignment or otherwise.

8.07 HANDLING CLAIMS

Manager shall report within a reasonable amount of time to Owner all accidents and claims of which it is aware for damage and injury relating to the ownership, operation, and maintenance of the Project and any damage or destruction to the Project coming to the attention of Manager and will assist Owner in Owner's attempts to comply with all reporting and cooperation provisions in all applicable policies. Manager is authorized to settle on Owner's behalf any and all claims against property insurers not in excess of $7,500, which includes authority for the execution of proof of loss, the adjustment of losses, signing of receipts, and the collection of money. If the claim is greater than $7,500, Manager shall act only with the prior written approval of Owner.

8.08 AUTOMOBILE INSURANCE. INTENTIONALLY OMITTED

8.09 WORKERS' COMPENSATION INSURANCE. INTENTIONALLY OMITTED

8.10 DISHONESTY INSURANCE. INTENTIONALLY OMITTED

8.11 ENVIRONMENTAL INDEMNIFICATION

Owner agrees to defend, indemnify, and hold harmless Manager and Manager's partners, directors, shareholders, officers, and agents, against and from any and all actions, administrative proceedings, causes of action, charges, claims, commissions, costs, damages, decrees, demands, duties, expenses, fees, fines, judgments, liabilities, losses, obligations, orders, penalties, recourses, remedies, responsibilities, rights, suits, and undertakings of every nature and kind whatsoever, including, but not limited to, attorneys' fees and litigation expenses, from the presence of Hazardous Substances (as defined below) on, under or about the Project. Without limiting the generality of the foregoing, the indemnification provided by this paragraph shall specifically cover costs incurred in connection with any investigation of site conditions or any remediation, removal or restoration work required by any federal, state or local governmental agency because of the presence of Hazardous Substances in, on, under or about the Project, except to the extent that the Hazardous Substances are present as a result of gross negligence, criminal activity, or any willful misconduct of Manager or its employees. For purposes of this section, "Hazardous Substances" shall mean all substances defined as hazardous materials, hazardous wastes, hazardous substances, or extremely hazardous waste under any federal, state or local law or regulation.

SECTION 9: MISCELLANEOUS PROVISIONS

9.01 GOVERNING LAW

This Agreement shall be governed by and construed and interpreted in accordance with the laws of the State of North Carolina. Manager represents that it has qualified to do business in the State of North Carolina in connection with all actions based on or arising out of this Agreement.

9.02 NOTICES

All notices, demands, requests or other communications required or permitted to be given hereunder must be sent by (i) personal delivery, (ii) FedEx or a similar nationally recognized overnight courier service, or (iii) certified mail, return receipt requested. Any such notice, request, demand, tender or other communication shall be deemed to have been duly given: (a) if served in person, when served; (b) if by overnight courier, on the first Business Day after delivery to the courier; or (c) if by certified mail, return receipt requested, upon receipt. Rejection or other refusal to accept, or inability to deliver because of changed address or facsimile number of which no notice was given, shall be deemed to be receipt of such notice, request, demand, tender or other communication. Any party hereto may at any time by giving ten (10) days written notice to the other party hereto designate any other address in substitution of the foregoing address to which such notice or communication shall be given.

9.03 SEVERABILITY

If any term, covenant or condition of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Agreement or such other documents, or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term, covenant or condition of this Agreement or such other documents shall be valid and shall be enforced to the fullest extent permitted by law.

9.04 NO JOINT VENTURE OR PARTNERSHIP

Owner and Manager hereby agree that nothing contained herein or in any document executed in connection herewith shall be construed as making Manager and Owner joint venturers or partners. In no event shall Manager have any obligation or liability whatsoever with respect to any debts, obligations or liabilities of Owner or vice versa, except as set forth herein or as set forth in any separate agreement signed by Manager.

9.05 MODIFICATION TERMINATION

This Agreement terminates any and all prior management agreements between Owner and Manager relating to the Project, and any amendment, modification, termination or release hereof may be effected only by a written document executed by Manager and Owner.

9.06 ATTORNEYS' FEES

Should either party be required to employ an attorney or attorneys to enforce any of the provisions hereof or to protect its interest in any manner arising under this Agreement , or to recover damages for the breach of this Agreement , the non-prevailing party in any actions (the finality of which is not legally contested) agrees to pay to the prevailing party all reasonable costs, damages and expenses, including attorneys' fees expended or incurred in connection therewith.

9.07 TOTAL AGREEMENT

This Agreement is a total and complete integration of any and all undertakings existing between Manager and Owner and supersedes any prior oral or written agreements, promises or representations between them regarding the subject matter hereof .

9.08 APPROVALS AND CONSENTS

If any provision hereof requires the approval or consent of Owner or Manager to any act or omission, such approval or consent shall not be unreasonably withheld or delayed.

9.09 CASUALTY

In the event that the Project, or any portion thereof, is substantially or totally damaged or destroyed by fire, tornado, windstorm, flood or other casualty during the term of this Agreement, Manager or Owner may terminate this Agreement upon giving the other party written notice of termination on or before the date which is thirty (30) days after the date of such casualty. In the event of termination pursuant to this Section 9.09, neither party hereto shall have any further liability hereunder, except for those obligations that by their terms survive termination of this Agreement.

9.10 SPECIAL AGREEMENTS

Notwithstanding Manager’s review of and recommendations in respect to capital repairs and replacements for the Project, Owner acknowledges that Manager is not an architect or engineer, and that all capital repairs, replacements and other construction in the Project will be designed and performed by independent architects, engineers and contractors. Accordingly, Manager does not guarantee or warrant that the construction documents for such work will comply with applicable law or will be free from errors or omissions, nor that any such work will be free from defects, and Manager will have no liability therefor. In the event of such errors, omissions, or defects, Manager will use reasonable efforts to cooperate in any action Owner desires to bring against such parties. Notwithstanding any contrary provision hereof, Owner agrees that no partner, agent, director, member, officer, shareholder, or affiliate of Manager shall be personally liable to Owner or anyone claiming by, through or under Owner, by reason of any default by Manager under this Agreement, any obligation of Manager to Owner, or for any amount that may become due to Owner by Manager under the terms of this Agreement otherwise.

9.11 COMPETITIVE PROJECTS

Manager may, individually or with others, provide management services in regard to and possess an interest in any other projects and ventures of every nature and description, including, but not limited to, the ownership, financing, leasing, operation, management, brokerage, development and sale of real property and apartment projects other than the Project, whether or not such other ventures or projects are competitive with the Project, and Owner shall not have any right to the income or profits derived therefrom.

9.12 SUCCESSORS AND ASSIGNS

Owner has entered into this Agreement with Manager based on Manager's abilities and, accordingly, Manager may not assign this Agreement without the prior written consent of Owner. Subject to this limitation on assignment, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their permitted successors and assigns. Either Manager or Owner may assign this Agreement upon obtaining the other party's prior written consent, provided that no consent shall be required for assignment to Owner's mortgagee(s).

9.13 WAIVER OF JURY TRIAL.

Owner and Manager hereby knowingly, voluntarily and intentionally, to the extent permitted by law, waive the right to a trial by jury in respect of any litigation based on, arising out of, under or in connection with this Agreement or any documents contemplated to be executed in connection herewith or any course of conduct, course of dealings, statements (whether oral or written) or actions of either party arising out of or related in any manner to the Project (including, without limitation, any action to rescind or cancel this Agreement or any claims or defenses asserting that this Agreement was fraudulently induced or is otherwise void or voidable). This waiver is a material inducement for the Owner to enter into and accept this Agreement.

9.14 SUBORDINATION; LIEN WAIVER.

This Agreement and the rights of the Manager hereunder shall be expressly subject and subordinate to the rights of KeyBank National Association under the Loan Documents evidencing and securing the bridge loan obtained by Owner from KeyBank National Association to acquire the Project and, to the extent required by the associated lender, any refinancing thereof. Further, Manager hereby expressly waives any and all available lien rights that Manager might otherwise have with respect to the Project as a result of the services rendered under this Agreement, including with respect to any lien rights that may otherwise exist as a result of any failure of the Owner to pay any Base Management Fee or other fees due Manager hereunder.

Signatures on following pages

SECTION 11: SIGNATURES

IN WITNESS WHEREOF, the parties hereto have executed this Management Agreement as of the day and year first above written.

EXHIBIT A

2015 BUDGET

EXHIBIT B

REPORTS

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

2.        Budget Comparison(1), including month-to-date and year-to-date variances.

3.        Detailed Income Statement, including prior 12 months.

4.        Trial Balance that includes mapping of the accounts to the financial statements.

5.        Account reconciliations for each balance sheet account within the trial balance.

6.        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.

 7.       Security Deposit Activity

 8.       Mortgage Statement

 9.       Monthly Base Management Fee Calculation

 10.     Monthly Distribution Calculation

 11.     General Ledger, with description and balance detail

 12.     Monthly Check Register including copies of all checks disbursed and copies of cancelled checks.

 13.     Rent Roll

 14.     Monthly Reporting and evidence of withdrawal, if any, of any operating reserve accounts and capital expense reserve accounts, including, but not limited to, any calculations evidencing shortfalls payable thereunder.

 15.     Other reasonable reporting at Owner’s expense, as requested and approved in writing by Owner at Owner’s expense

16.      Within five (5) business days of the end of each quarter, 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.

⁽¹⁾ 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.

EXHIBIT C

VARIANCE REPORTS

a.      Cap Ex Summary and Commentary

b.      Monthly Income/Expense Variance with notes

c.      Yearly Income/Expense Variance with notes

d.      Occupancy Commentary

e.      Market/Competition Commentary

f.      Rent Movement/Concessions Commentary

g.      Crime Commentary

h.      Staffing Commentary

i.       Operating Summary, with leasing and traffic reporting

j.       Other reasonable reporting, as requested (e.g. Renovation/Rehab report)  

⁽¹⁾ 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.

EXHIBIT D

CAPITALIZATION AND EXPENSE POLICY

Capex are funds spent on acquiring, enhancing, or upgrading physical assets, such as building improvements, land improvements, furniture and fixtures, machinery and equipment. Capital items add value to the operations of the property and extend the useful life of the assets. Capitalization guidelines are discussed below.

Recurring Capex  

The following exceptions to the above guidelines apply:

Major expenses are items that relate to the improvement of the property but do not meet the definition of a “capitalized asset.” Major expenses may have a shorter life and are less expensive than a capitalized asset.  They do not extend the useful life of the asset beyond the contemplated life when the asset was placed in service.

Repairs & Maintenance are repairs that are recurring and “typical” to maintain the asset’s current condition and do not extend the useful life of the asset. These included any repairs due to damages and the general maintenance or upkeep of the apartment buildings. As these do not increase the value of the asset, these costs will be expensed as incurred. To the degree that a repair increases the life or value of the asset the repair and maintenance will be capitalized if the value is greater than $1,000 threshold.

Rehabilitation/Construction in Process (CIP)

Capitalized assets can be the result of rehabilitation of the property which will be placed into the rehab or construction in process account. Some specific guidelines for these accounts include the following:

Exhibit 10.5

BACKSTOP AGREEMENT

THIS AGREEMENT (the " Agreement ") is made as of the 20 ^th day of May, 2015 (the " Effective Date "), by TRIBRIDGE RESIDENTIAL, LLC, a Georgia limited liability company (" TriBridge ") and BLUEROCK RESIDENTIAL GROWTH REIT, INC., a Maryland corporation (" Bluerock Guarantor ").

WITNESSETH

WHEREAS , BR WHETSTONE MEMBER, LLC, a Delaware limited liability company, an affiliate of the Bluerock Guarantor (the " BR Member "), and TRIBRIDGE CO-INVEST 27, LLC, a Georgia limited liability company, an affiliate of TriBridge (the " TriBridge "), have entered into that certain Operating Agreement, dated as of May 20, 2015 (" Operating Agreement "), of BR-TBR Whetstone Venture , LLC, a Delaware limited liability company (" Company ");

WHEREAS , the Company is the sole member of BR-TBR Whetstone Owner, LLC, a Delaware limited liability company (the " Property Owner "), the owner of fee simple title to the Property;

WHEREAS , on or about May 20, 2015, the Property Owner has obtained a loan from KeyBank National Association (" Lender "), in the maximum principal amount of Twenty-Five Million One Hundred Forty-Seven Thousand Five Hundred and No/100 Dollars ($25,147,500.00) (the " Loan ") evidenced by a Promissory Note dated May 20, 2015 (the " Note ") and a Loan Agreement dated May 20, 2015 (the " Loan Agreement ") and secured by a first lien deed of trust on the Property;

WHEREAS , pursuant to (i) certain Guaranty Agreement executed and delivered by the Bluerock Guarantor in favor of Lender (the " Mortgage Guaranty "), and (ii) that certain Environmental and Hazardous Substances Indemnity Agreement executed and delivered by the Bluerock Guarantor and Property Owner in favor of Lender (the " Environmental Indemnity " and together with the Mortgage Guaranty, the " Mortgage Guaranties "), the Bluerock Guarantor is guaranteeing certain obligations relating to the Loan;

WHEREAS , TriBridge has agreed to execute and deliver this Agreement to set forth its agreement with respect to liabilities which may arise under the Mortgage Guaranties; and

WHEREAS , capitalized terms used herein and not otherwise defined shall have the meaning ascribed thereto in the Operating Agreement.

NOW, THEREFORE , for good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties agree, as follows:

1.              Defined Terms . The following terms (whether or not underscored) when used in this Agreement, including its preamble and recitals, shall, except where the context otherwise requires, have the following meanings (such meanings to be equally applicable to the singular and plural forms thereof):

" Acquiesces " or " Acquiesced " means, with respect to any Person and any act or omission that may give rise to Guaranty Losses, and such Person having received (separately, simultaneously and with particularity) written notice from the Person causing such action to be taken or omitted and specifically describing such act or omission, such Person responding with a written statement within five (5) Business Days of its receipt of such notice affirmatively stating that such Person does not object to such noticed acts or omissions (it being specifically acknowledged and agreed, however, that if such Person does not so respond within such five (5) Business Day period, then such Person shall be deemed to have not Acquiesced). For example, if (x) any TriBridge Party desires to take or omit an action which if taken or omitted may give rise to Guaranty Losses, (y) such TriBridge Party gives simultaneous and specific written notices to the Bluerock Guarantor of such TriBridge Party’s intent with regard to such action, and (z) the Bluerock Guarantor fails to respond within five (5) Business Days, then the Bluerock Guarantor shall be deemed to have not Acquiesced to such action.

" BR Party " means any of (a) the Bluerock Guarantor, (b) BR Member, (c) any Person that acquires a membership interest in the Company from a BR Party pursuant to the provisions of the Operating Agreement, and (d) any employee, agent, representative, officer, manager or member of BR Member or the Bluerock Guarantor.

" BR Party Caused Guaranty Losses " means any Guaranty Losses that arise solely from (x) any acts, omissions or failure to perform of any BR Party, or (y) actions taken by another Person at the direction of, or pursuant to any contract or subcontract entered into with, any BR Party; provided , however , if such action or omission is (a) Acquiesced to by a TriBridge Party, then the same shall not be deemed a BR Party Caused Guaranty Loss, but rather shall be deemed a Joint Loss or (b) was undertaken at the direction of a TriBridge Party or on account of a prior act or omission of a TriBridge Party (unless Acquiesced to by a BR Party), then the same shall not be deemed a BR Party Caused Guaranty Loss, but rather shall be deemed a TriBridge Party Caused Guaranty Loss.

" Business Day " means a day of the year on which banks are open for business in the State of New York and the State of North Carolina other than a (a) Saturday, (b) Sunday, (c) legal holiday in the State of New York, (d) legal holiday in the State of North Carolina, or (e) legal holiday in the State of Georgia.

" Guaranty Loss" or "Guaranty Losses " means (individually and collectively, as appropriate) any and all actual out-of-pocket losses, damages, costs and expenses to the extent paid by (i) the Bluerock Guarantor to Lender (or its successor or assignee as lender under the Loan) under Section 2(a) and 2(b) of the Mortgage Guaranty (for avoidance of doubt, recourse repayment obligations shall not constitute the basis for any Guaranty Loss), or (ii) the Property Owner to Lender (or its successor or assignee as lender under the Loan) under the Environmental Indemnity (a " Property Owner Guaranty Loss ").

" Joint Loss" or "Joint Losses " means (individually and collectively, as appropriate) any Guaranty Losses that are not a BR Party Caused Guaranty Loss or a TriBridge Party Caused Guaranty Loss. TriBridge shall be responsible for 7.5% of any Joint Loss, and the Bluerock Guarantor shall be responsible for 92.5% of any Joint Loss.

" Loan Documents " has the meaning given thereto in the Loan Agreement.

" Person " means any natural person, partnership, corporation, limited liability company and any other form of business or legal entity.

" Party " means (individually and collectively, as appropriate) the Bluerock Guarantor and TriBridge.

" Property Manager " means TriBridge Residential Property Management Advisors, LLC, a Georgia limited liability company.

" TriBridge Party " means, any of (a) TriBridge, (b) the TriBridge Member, (c) Property Manager, (d) the TriBridge Principals, (e) any employee, agent, representative, officer or member of TriBridge, Property Manager or the TriBridge Member, and (f) and any Person that acquires a membership interest in the Company from a TriBridge Party pursuant to the provisions of the Operating Agreement.

" TriBridge Principals " means Steve Broome, R. Lee Walker and Robert H. West.

" TriBridge Party Caused Guaranty Losses " means any Guaranty Losses that arise as a result of (x) any acts, omissions or failure to perform of any TriBridge Party, or (y) actions taken by another Person at the direction of, or pursuant to any contract or subcontract entered into with, any TriBridge Party, provided , however , if an action or omission is (a) Acquiesced to by a BR Party, then the same shall not be deemed a TriBridge Party Caused Guaranty Loss, but rather shall be deemed a Joint Loss or (b) was undertaken at the direction of a BR Party or on account of a prior act or omission of a BR Party (unless Acquiesced to by a TriBridge Party), then the same shall not be deemed a TriBridge Party Caused Guaranty Loss but rather shall be deemed a BR Party Caused Guaranty Loss.

2.              Indemnity . Subject to Section 3 below, (a) TriBridge hereby indemnifies and holds (i) the Bluerock Guarantor harmless from and against (x) all TriBridge Party Caused Guaranty Losses and (y) 7.5% of all Joint Losses, and (ii) the Property Owner harmless from and against any Property Owner Guaranty Loss that is a TriBridge Party Caused Guaranty Loss, and (b) the Bluerock Guarantor hereby indemnifies and holds the Property Owner harmless from and against any Property Owner Guaranty Loss that is a BR Party Caused Guaranty Loss.

3.              Limitations . Notwithstanding anything to the contrary contained in this Agreement, the parties acknowledge and agree as follows:

(a)          in no event shall (i) TriBridge have any obligation under this Agreement for any loss, claim, liability, judgment, cost, damage and/or expense (including, without limitation, reasonable attorneys’ fees, costs and disbursements) incurred by the Bluerock Guarantor or the Property Owner with respect to a claim under a Mortgage Guaranty that is a BR Party Caused Guaranty Loss; or (ii) the Bluerock Guarantor have any obligation under this Agreement for any loss, claim, liability, judgment, cost, damage and/or expense (including, without limitation, reasonable attorneys’ fees, costs and disbursements) incurred by the Property Owner with respect to a claim under a Mortgage Guaranty that is a TriBridge Party Caused Guaranty Loss;

(b)          in the event that Property Manager ceases to function as the property manager for the Property for any reason and is not replaced by another property management company affiliated with a Tribridge Party (a “ Property Manager Removal Event ”), then TriBridge shall have no further obligations with respect to Joint Losses based on events or circumstances occurring subsequent to the occurrence of such Property Manager Removal Event and caused by the replacement property management company.

(c)          in the event that any BR Party acquires all of the membership interests in the Company owned on the Effective Date hereof by TriBridge Member (a " BR Party 100% Acquisition Event "), then TriBridge shall have no further obligations under this Agreement except with respect to (i) TriBridge Party Caused Guaranty Losses based on events or circumstances occurring prior to the occurrence of such BR Party 100% Acquisition Event, (ii) Joint Losses based on events or circumstances occurring prior to the occurrence of such BR Party 100% Acquisition Event, or (iii) attorneys’ fees or defenses costs for which TriBridge is liable under Section 4 below. Following any release of TriBridge from future liability in accordance with this Paragraph 3(c) , the Bluerock Guarantor shall remain fully liable for all obligations owing by the Bluerock Guarantor to the Property Owner under Paragraph 2(b) above (provided, however, that for these purposes and only in this limited circumstance, the Bluerock Guarantor shall be liable for 100% of any Joint Loss), the same to survive the occurrence of a BR Party 100% Acquisition Event; and

(d)          in the event that any TriBridge Party acquires all of the membership interests in the Company owned on the Effective Date hereof by BR Member (a " TriBridge Party 100% Acquisition Event "), then the Bluerock Guarantor shall have no further obligations under this Agreement (provided that nothing contained herein shall release the Bluerock Guarantor from potential liability to Lender pursuant to the Mortgage Guaranties executed by the Bluerock Guarantor) except with respect to (i) BR Party Caused Guaranty Losses based on events or circumstances occurring prior to the occurrence of such TriBridge Party 100% Acquisition Event, (ii) Joint Losses based on events or circumstances occurring prior to the occurrence of such TriBridge Party 100% Acquisition Event, or (iii) attorneys’ fees or defense costs for which the Bluerock Guarantor is liable under Section 4 below. Following any release of the Bluerock Guarantor from future liability in accordance with this Paragraph 3(d) , TriBridge shall remain fully liable for all obligations owing by TriBridge to the Bluerock Guarantor under Paragraph 2(a) above (and for all obligations owing to Property Owner under Paragraph 2(b) above) (provided, however, that for these purposes and only in this limited circumstance, TriBridge shall be liable for 100% of any Joint Loss), the same to survive the occurrence of a TriBridge Party 100% Acquisition Event.

4.             Claim Mechanics .

(a)          If the Bluerock Guarantor receives a notice of claim from the Lender under any Mortgage Guaranty or Property Owner receives a notice of claim under the Environmental Indemnity (for purposes of this Paragraph 4 , the Bluerock Guarantor or Property Owner are each a " Claiming Guarantor ") (any such notice, a " Lender Claim Notice ") and believes that it is entitled to indemnification under this Agreement, then the Claiming Guarantor:

(i)          shall deliver a notice (the " Claim Notice ") to the other Parties (and to all Parties if Property Owner is the Claiming Guarantor) (each a " Recipient Guarantor " in such instance) stating the amount claimed (the " Claimed Amount "), together with (x) a description of the basis for its belief that the Recipient Guarantors are liable for all or a portion of such amounts and (y) a copy of the Lender Claim Notice;

(ii)         shall take no action (such as admission of liability or payment to Lender of amounts in respect of the claim under any Mortgage Guaranty) that would prejudice the Recipient Guarantors in defense of any such claim; provided, however, that (x) the Claiming Guarantor shall be permitted to disclose information and/or make payments pursuant to the order of any court of competent jurisdiction (a " Court Order ") requiring such disclosure and/or payment, and (y) the Claiming Guarantor shall promptly notify the Recipient Guarantors of such Court Order to permit the Recipient Guarantors to seek a protective order or to take other appropriate action (provided that failure to so promptly notify Recipient Guarantors shall not serve to relieve the Recipient Guarantors from their obligations under this Agreement). The Claiming Guarantor shall, if requested by the Recipient Guarantors, cooperate (at no cost or expense to the Claiming Guarantor) in the Recipient Guarantors’ efforts to obtain an order barring such disclosure and/or payment;

(iii)        agrees that if the Recipient Guarantor(s) agrees that the Claim Notice relates to a Guaranty Loss caused by the Recipient Guarantor(s), then the Recipient Guarantors shall have the exclusive right to conduct the defense to any claim, demand or suit relating to such Lender Claim Notice; and

(iv)        agrees that if the Recipient Guarantor(s) agrees that the Claim Notice relates to a Guaranty Loss that is a Joint Loss, then the Bluerock Guarantor shall conduct the defense to any claim, demand or suit relating to such Lender Claim Notice, and TriBridge shall pay 7.5% and the Bluerock Guarantor shall pay 92.5% of the actual and reasonable attorneys’ fees and other actual and reasonable costs actually incurred in connection with such defense; provided, however, if the parties under such circumstance cannot agree on joint legal counsel or that the Claim Notice relates to a Joint Loss, then each of the Claiming Guarantors shall be entitled to conduct its own defense and the provisions of Paragraph 4(c)(i) through (iv) shall apply.

(b)       On or before the date which is ten (10) days after receipt of the Claim Notice, each Recipient Guarantor shall either:

(i)          pay the Claimed Amount to the Claiming Guarantor or directly to Lender;

(ii)         deliver notice to the Claiming Guarantor that such Recipient Guarantor agrees that it is liable for the Claimed Amount and that it is electing to defend against the Lender Claim Notice; or

(iii)        deliver a notice to the Claiming Guarantor disputing that such Recipient Guarantor is liable for any portion of the Claimed Amount (it being acknowledged that any Recipient Guarantor’s failure to respond shall be deemed delivery of a notice under this subparagraph (iii) on the last day of such ten (10) day period).

(c)        Each party to this Agreement agrees that, notwithstanding any provision herein to the contrary, if any Recipient Guarantor proceeds under the provisions of Paragraph 4(a)(iii) or Paragraph 4(b)(ii) above but such Recipient Guarantor thereafter fails to diligently defend against any such Lender Claim Notice, then after notice of such failure by the Claiming Guarantor to such Recipient Guarantor and the failure of such Recipient Guarantor to diligently commence such defense within ten (10) days of such notice (it being agreed that notices to Lender disputing the Lender Claim Notice shall constitute commencement of defense against such Lender Claim Notice and in such event the Recipient Guarantor shall not be required to commence litigation, arbitration or take other actions to be deemed to be defending against any such Lender Claim Notice):

(i)          the Claiming Guarantor shall have the right to conduct the defense to the applicable Lender Claim Notice;

(ii)         the Claiming Guarantor shall not be required to obtain the consent of such Recipient Guarantor to any settlement or resolution of any matters arising from the applicable Lender Claim Notice (including, without limitation, any proposed payment to Lender);

(iii)        if it is ultimately determined that such Lender Claim Notice relates to a TriBridge Party Caused Guaranty Loss or a BR Party Caused Guaranty Loss, then the applicable Recipient Guarantor(s) shall be required to pay all actual and reasonable attorneys’ fees and other reasonable costs actually incurred by the Claiming Guarantor in connection with such defense; and

(iv)        if it is ultimately determined that such Lender Claim Notice relates to a Joint Loss, TriBridge shall be required to pay 7.5% and the Bluerock Guarantor shall be required to pay 92.5% of the actual and reasonable attorneys’ fees and other reasonable costs actually incurred by the Claiming Guarantor in connection with such defense.

(d)          For the avoidance of doubt, nothing contained in this Section 4 shall limit the Bluerock Guarantor or the Property Owner from delivering more than one Claim Notice as to any particular Lender Claim Notice.

5.             WAIVER OF JURY TRIAL . THE PARTIES HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THIS AGREEMENT OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION HEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY THE PARTIES, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER BY EACH OTHER PARTY, AS APPLICABLE.

6.              VENUE AND JURISDICTION . THE PARTIES HEREBY CONSENT TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF NEW YORK, STATE OF NEW YORK AND IRREVOCABLY AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT SHALL BE LITIGATED IN SUCH COURTS. THE PARTIES ACCEPT FOR THEMSELVES AND IN CONNECTION WITH THEIR PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS AND WAIVE ANY DEFENSE OF FORUM NON CONVENIENS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO SUCH VENUE AS BEING AN INCONVENIENT FORUM.

7.              Entire Agreement; Writing Required . This Agreement constitutes the entire agreement between the Parties with respect to the matters referred to herein, and no modification or waiver of any of the terms hereof shall be effective unless in writing, signed by the Party to be charged with such modification or waiver.

8.              Governing Law . This Agreement shall be governed by the laws of the State of North Carolina, without regard for conflicts of laws principles or otherwise.

9.              Severability . Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

10.              Notices . Any notice or request required or permitted to be given hereunder (each, a " Notice " or a " notice ") shall be in writing and shall be (as elected by the Party giving such notice) (i) transmitted by certified or registered mail, return receipt requested, postage prepaid, (ii) transmitted by personal delivery, or (iii) transmitted by nationally recognized overnight courier service. Except as otherwise specified herein, all notices and other communications shall be deemed to have been duly given (a) five (5) Business Days after the date of posting if transmitted by certified or registered mail, (b) the date of delivery if transmitted by personal delivery or (c) the first Business Day after the date of posting if delivered by nationally-recognized overnight courier service. Each Party may change its address for purposes hereof by notice given to the other Parties. Notices hereunder shall be directed:

To TriBridge, at:

c/o TriBridge Residential, LLC
1575 Northside Drive

Building 100, Suite 200

Atlanta, Georgia 30318
Attn: Robert H. West

With a copy to:

Nelson Mullins

Atlantic Station

201 17 ^th St. NW, Suite 1700

Atlanta, Georgia 30363
Attn: Eric Wilensky, Esq.

To the Bluerock Guarantor:

c/o Bluerock Real Estate, L.L.C.

712 Fifth Avenue, 9 ^th Floor

New York, New York 10019

Attn: R. Ramin Kamfar

With a copy to:

c/o Bluerock Real Estate, L.L.C.

712 Fifth Avenue, 9 ^th Floor

New York, New York 10019

Attn: Michael L. Konig, Esq.

11.            Counterparts . This Agreement may be executed in counterparts (including facsimile counterparts), each of which shall be deemed an original and all of which taken together shall constitute the same instrument. All signatories hereto intend (as evidenced by their execution hereof) that a facsimile copy and signature shall have the same effect as an original.

12.            No Third Party Beneficiary; Recitals Incorporated . This Agreement does not create, and shall not be construed as creating, any rights or claims enforceable by any person or entity other than the Parties hereto, it being the intention of the Parties hereto that no one shall be deemed to be a third party beneficiary of this Agreement. The recitals set forth above are incorporated into this Agreement as if fully set forth herein. Notwithstanding the foregoing to the contrary, the Parties acknowledge and agree that the Property Owner, so long as any BR Party or any TriBridge Party is the owner of an interest (direct or indirect) in Property Owner, shall be a third-party beneficiary of this Agreement and be entitled to enforce the rights afforded to the Property Owner hereunder (including, without limitation, the indemnification provided in Section 2 above).

13.            Prevailing Party Fees . To the fullest extent permitted by law, in the event of any litigation arising out of this Agreement, including, but not limited to, any claim for amounts due under Section 4 , the prevailing party shall be entitled to receive from the losing party an amount equal to the prevailing party’s costs incurred in such litigation, including, without limitation, the prevailing party’s attorneys’ fees, costs and disbursements. If TriBridge becomes subject to any bankruptcy proceeding, other relief from creditors, receivership or similar proceedings (whether same are voluntary or involuntary), then the Bluerock Guarantor shall be entitled to receive reimbursement for all costs and expenses (including, without limitation, actual and reasonable attorneys’ fees, costs and disbursements) incurred by it in responding to or participating in such proceeding from TriBridge subject to such bankruptcy proceeding. The provisions of this Section 13 shall survive the termination of this Agreement.

14.            Further Assurances . Each party hereto agrees that it will without further consideration execute and deliver such other documents and take such other action, subsequent to the Effective Date as may be reasonably requested by another party hereto to consummate more effectively the purposes or subject matter of this Agreement.

15.            Representation . TriBridge hereby represents and warrants that TriBridge is solvent and is the same entity that provides recourse and non-recourse support for agency debt and construction loans obtained by TriBridge or its affiliates.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.