Bluerock Residential Growth REIT, Inc. (Form: 8-K, Received: 10/19/2016 17:21:20)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15( d ) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 13, 2016

Bluerock Residential Growth REIT, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Maryland	001-36369	26-3136483
(State or other jurisdiction of incorporation	(Commission File Number)	(I.R.S. Employer
or organization)		Identification No.)

712 Fifth Avenue, 9th Floor

New York, NY 10019

(Address of principal executive offices)

(212) 843-1601

(Registrant’s telephone number, including area code)

None.

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K/A filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01

ENTRY INTO MATERIAL DEFINITIVE AGREEMENT

The information in this Report set forth under Item 2.03 is incorporated herein by reference.

The disclosure below describes our investment in Nevadan. All figures provided below are approximate.

On October 13, 2016, we, through our operating partnership, Bluerock Residential Holdings, L.P., a Delaware limited partnership, or our Operating Partnership, through BRG Glenridge, LLC, a Delaware limited liability company and a wholly owned subsidiary of our Operating Partnership, or BRG Glenridge, through BR Glenridge JV Member, LLC, a Delaware limited liability company and a wholly owned subsidiary of BRG Glenridge, or BR JV Member, acquired a 90.0% limited liability company interest, or the BRG Glenridge Interest, in BR Carroll Glenridge JV, LLC, a Delaware limited liability company, or BR Carroll JV Entity, which is the owner and holder of a 100% limited liability company interest in BR Carroll Glenridge, LLC, a Delaware limited liability company, or Property Owner. Property Owner concurrently acquired a 480-unit, multi-family community located in Atlanta, Georgia, or the Nevadan Property.

The material features of the investment in the joint venture are described below. The related acquisition financing for the Nevadan Property and our entry into certain guaranties under the loan documents are described under Item 2.03.

Following our investment in the Nevadan Property, the organizational structure with respect to the ownership of the Nevadan Property is such that: (i) the Nevadan Property is owned by Property Owner, (ii) Property Owner is wholly owned by BR Carroll JV Entity, (iii) and the BR Carroll JV Entity is a joint venture entity owned 90.0% by BR JV Member and 10.0% by Carroll Co-Invest IV Glenridge, LLC, a Georgia limited liability company, or Carroll Member.

BR Carroll JV Entity

BR JV Member initially invested approximately $22.77 million to acquire the BRG Glenridge Interest, and the Carroll Member initially invested approximately $2.53 million to acquire the remaining 10.0% equity interest in BR Carroll JV Entity. BR JV Member and the Carroll Member have entered into a joint venture operating agreement for the BR Carroll JV Entity, or the JV Agreement. The JV Agreement contains terms, conditions, and indemnities that are customary and standard for joint ventures in the real estate industry.

Management and Major Decisions

BR JV Member is manager of BR Carroll JV Entity, subject to oversight by a management committee, which is controlled by BR JV Member. Under the JV Agreement, decisions of the management committee are subject to major decisions that are reserved to the members. These major decisions require the consent of both members, and include, but are not limited to: (i) any capital transaction, including a refinancing or sale of the Nevadan Property; (ii) admission of additional members, subject to certain permitted affiliate transfers; (iii) liquidation, dissolution or termination of BR Carroll JV Entity or Property Owner; (iv) granting options, rights of first refusal, mortgages and similar interests in the Nevadan Property; (v) selling or otherwise disposing of the Nevadan Property; (vi) acquiring real property or other assets other than the Nevadan Property; (vii) taking actions that are reasonably likely to expose a party to liability under a loan guaranty; (viii) instituting or settling legal claims in excess of $50,000; (ix) entering into any agreement with an affiliated party; (x) amending, refinancing or replacing any financing to which BR Carroll JV Entity or Property Owner is a party, or which encumbers the Nevadan Property; (xi) incurring any capital expenses in excess of $50,000 unless pursuant to the approved annual business plan; (xii) making a loan to any member; (xiii) filing or initiating a bankruptcy or similar creditor protection action of BR Carroll JV Entity or Property Owner; (xiv) terminating the Property Management Agreement (as defined below) or declaring a default thereunder, subject to cure provisions, although BR JV Member has certain heightened remedial rights with respect to a default by the Carroll-affiliated property manager; (xv) any amendment to the organizational documents of BR Carroll JV Entity or Property Owner; or (xvi) making distributions to members other than in accordance with the JV Agreement. We refer to each of these herein as a JV Major Decision.

To the extent that BR JV Member and Carroll Member are not able to agree on a JV Major Decision on or after October 14, 2018, either party may initiate a buy-sell process compelling the other member to purchase the initiating party’s membership interest or sell to the initiating party the non-initiating party’s membership interest. On or after October 14, 2018, either party may also initiate a process to compel the sale of the Nevadan Property, and if the non-initiating party rejects the offer of sale, the initiating party may put its membership interest in BR Carroll JV Entity to the non-initiating party.

Additional Capital Contributions

The JV Agreement provides that either member may call for mandatory, protective additional capital contributions to protect BR Carroll JV Entity’s interest in the Nevadan Property (e.g., payment of taxes, repair of the property following uninsured damage, payment of insurance premiums), prevent a default under any financing (e.g., payment of debt service following an operating shortfall, reserves required by the lender, a reduction in principal required by the lender to meet loan to value requirements), or for funds required to refinance the Nevadan Property when the current financing has matured or will mature in the near future (e.g., commitment fees, loan application fees, equity infusions to meet market loan to value requirements). The JV Agreement further provides that the management committee may call for capital contributions as reasonably determined to be necessary to effect an investment or expenditure for the Nevadan Property, BR Carroll JV Entity or Property Owner.

Distributions

Pursuant to the provisions of the JV Agreement, distributions will be made as follows: (a) first, to the members in accordance with their ownership percentages until BR JV Member and Carroll Member each has received an internal rate of return of 10% and a return on its capital contributions equal to a 1.35 multiple thereof; and (b) second, (i) if a Carroll Change Event (as defined in the JV Agreement) has occurred, to the members in accordance with their ownership percentages, (ii) if a Carroll Change Event has not occurred, (x) an amount equal to 30% to Carroll Member and an amount equal to 70% to BR JV Member until BR JV Member has actually received and realized through distributions the greater of a 15% internal rate of return and a return on its capital contributions equal to a 1.5 multiple thereof, and then, (y) an amount equal to 40% to Carroll Member and an amount equal to 60% to BR JV Member.

For the first 24 months of the Property Management Agreement (as defined below), if distributable funds for any quarter are insufficient to provide BR JV Member and Carroll Member with a cash-on-cash return on their capital contributions equal to, when determined on a quarterly basis and annualized, nine percent, or the Minimum Return, a portion of the Property Management Fee (as defined below), equal to 16.67% of the Property Management Fee, will be withheld and distributed to BR JV Member and Carroll Member, in accordance with their membership interests, up to the amount necessary to satisfy the Minimum Return for BR JV Member and Carroll Member for such quarter. Any portion of the Property Management Fee withheld, as described above, will accrue and be cumulative. Such portion of the Property Management Fee will be paid from distributable funds in excess of the Minimum Return for any subsequent quarter until repaid in full.

Indirect Ownership Interests in the Nevadan Property

As a result of the structure described above, we hold a 90.0% indirect equity interest in the Nevadan Property and the Carroll Member holds the remaining 10.0% indirect equity interest.

The Nevadan Property

The Nevadan Property is a 480-unit, multi-family community located at 5501 Glenridge Drive NE, Atlanta, Georgia 30342. The property is located in Fulton County and is part of the Atlanta Metropolitan Statistical Area. It was built in 1990 and features one-, two- and three-bedroom units averaging 1,095 square feet and average monthly rents of $1,033 per occupied unit. The Nevadan Property features a large clubhouse and amenity area. Community amenities include a resort style swimming pool with a poolside grill and lounge area, a 24-hour fitness center, two lighted tennis courts and underground parking. The interiors of the units feature kitchens equipped with sheet vinyl flooring, formica countertops, frost free refrigerators with icemakers, electric range, and dual basin stainless steel sinks. Select units have a wood burning fireplace, vaulted ceilings, or a private balcony or patio.

The business plan of the BR Carroll JV Entity is to grow cash flow at the Nevadan Property through enhanced property management, a modest value-add renovation to unit interiors and improving the exterior curb appeal, amenities and common areas.

The Nevadan Property is managed by Carroll Management Group, LLC, an unaffiliated entity, or Property Manager, under a property management agreement, or the Property Management Agreement. The property management fee is 3.0% of annual gross cash revenues, or the Property Management Fee, payable monthly. Property Manager is also entitled to a construction management fee equal to 5.0% of any expenses incurred in connection with the original capital expenditure plan, as shown in Exhibit G to the Property Management Agreement. For capital improvements beyond those set forth on Exhibit G to the Property Management Agreement, compensation for such capital improvements shall be agreed to in advance by Property Owner and the Property Manager.

The total purchase price paid for the Nevadan Property was $68.25 million, which gives effect to a credit received from the seller in the amount of $1.25 million, based on arm’s length negotiations between an affiliate of Carroll Member and the unaffiliated seller of the Nevadan Property. In evaluating the Nevadan Property as a potential investment, a variety of factors were considered, including overall valuation of net rental income, expected capital expenditures, submarket demographics, community features and amenities, location, price per unit and occupancy.

ITEM 2.03

CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF BALANCE SHEET ARRANGEMENT OF REGISTRANT

Senior Loan Financing and Guaranty Obligations Related to the Nevadan Property

The acquisition of the Nevadan Property by Property Owner was funded with approximately $25.30 million of gross equity from BR Carroll JV Entity, and a senior mortgage loan made by KeyBank National Association, on behalf of Freddie Mac, or the Lender, to Property Owner in the original principal amount of approximately $48.43 million, or the Loan, which Loan is secured by the Nevadan Property.

The Loan will mature on November 1, 2023. The first payment on the Loan will be due December 1, 2016. The Loan requires monthly, interest only payments on the first day of each calendar month from December 1, 2016 up to, but not including, December 1, 2019 in an amount equal to the product of (A) annual interest on the unpaid principal balance of the Loan as of the first day of the calendar month immediately preceding such payment date at the 1-month LIBOR Index Rate for such calendar month plus 2.48%, or the Floating Rate, divided by 360, multiplied by (B) the number of days in such calendar month; provided, however, the Floating Rate is capped at 5.50%.

Thereafter and up to and including November 1, 2023, principal and accrued interest will be payable by Property Owner in monthly payments on the first day of each calendar month. The amount of each monthly installment of principal and interest payable will be calculated so as to equal the monthly payment amount which would be payable as if the unpaid principal balance of the Loan, as of the first day of the calendar month immediately preceding such payment date, was to be fully amortized, together with interest thereon at the Floating Rate in effect for such calendar month, in equal consecutive monthly payments paid on the first day of each calendar month over a period equal to 360 months minus the number of scheduled monthly installments of principal and interest that have elapsed since the date of the Loan. On November 1, 2023, all remaining indebtedness under the Loan, including all principal and interest, will be due and payable by Property Owner.

At the closing of the Nevadan Property, we entered into a Guaranty to provide certain standard scope non-recourse carveout guarantees (and related hazardous materials indemnities) to the Loan which generally call for protection against losses by the Lender for so-called “bad acts,” such as misrepresentations, and may include full recourse liability for more significant events such as bankruptcy, or the Guaranty. Our financial obligations under the Loan and the Guaranty, as discussed in this Item 2.03, arose on October 13, 2016 in connection with the closing of the Loan. Carroll Multifamily Real Estate Fund IV, LP, an affiliate of the Carroll Member, entered into the Guaranty on a joint and several basis with us and the parties additionally entered into a backstop agreement pursuant to which the liability under the Guaranty was allocated between the parties.

ITEM 9.01

FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.

Exhibit No.		Description

10.1		Limited Liability Company Agreement of BRG Glenridge, LLC by Bluerock Residential Holdings, L.P., dated as of August 2, 2016
10.2		Limited Liability Company Agreement of BR Glenridge JV Member, LLC by BRG Glenridge, LLC, dated as of August 2, 2016

10.3		Limited Liability Company Agreement of BR Carroll Glenridge JV, LLC by and between BR Glenridge JV Member, LLC and Carroll Co-Invest IV Glenridge, LLC, dated as of October 13, 2016
10.4		Limited Liability Company Agreement of BR Carroll Glenridge, LLC by BR Carroll Glenridge JV, LLC, dated as of August 2, 2016
10.5		Multifamily Loan and Security Agreement (Non-Recourse) by and between BR Carroll Glenridge, LLC and KeyBank National Association, dated as of October 13, 2016
10.6		Multifamily Note by BR Carroll Glenridge, LLC to and for the benefit of KeyBank National Association, dated as of October 13, 2016
10.7		Multifamily Deed to Secure Debt, Assignment of Leases and Rents and Security Agreement by BR Carroll Glenridge, LLC to and for the benefit of KeyBank National Association, dated as of October 13, 2016
10.8		Assignment of Management Agreement and Subordination of Management Fees by and among BR Carroll Glenridge, LLC, KeyBank National Association and Carroll Management Group, LLC, dated as of October 13, 2016
10.9		Guaranty by Bluerock Residential Growth REIT, Inc. and Carroll Multifamily Real Estate Fund IV, LP to and for the benefit of KeyBank National Association, dated as of October 13, 2016
10.10		Assignment of Security Instrument by KeyBank National Association to Federal Home Loan Mortgage Corporation, dated as of October 13, 2016
10.11		Property Management Agreement by and between BR Carroll Glenridge, LLC and Carroll Management Group, LLC, dated as of October 13, 2016

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	BLUEROCK RESIDENTIAL GROWTH REIT, INC.

Dated: October 19, 2016	By:	/s/ Christopher J. Vohs
		Christopher J. Vohs
		Chief Accounting Officer and Treasurer

EXHIBIT INDEX

Exhibit No.		Description

10.1		Limited Liability Company Agreement of BRG Glenridge, LLC by Bluerock Residential Holdings, L.P., dated as of August 2, 2016
10.2		Limited Liability Company Agreement of BR Glenridge JV Member, LLC by BRG Glenridge, LLC, dated as of August 2, 2016
10.3		Limited Liability Company Agreement of BR Carroll Glenridge JV, LLC by and between BR Glenridge JV Member, LLC and Carroll Co-Invest IV Glenridge, LLC, dated as of October 13, 2016
10.4		Limited Liability Company Agreement of BR Carroll Glenridge, LLC by BR Carroll Glenridge JV, LLC, dated as of August 2, 2016
10.5		Multifamily Loan and Security Agreement (Non-Recourse) by and between BR Carroll Glenridge, LLC and KeyBank National Association, dated as of October 13, 2016
10.6		Multifamily Note by BR Carroll Glenridge, LLC to and for the benefit of KeyBank National Association, dated as of October 13, 2016
10.7		Multifamily Deed to Secure Debt, Assignment of Leases and Rents and Security Agreement by BR Carroll Glenridge, LLC to and for the benefit of KeyBank National Association, dated as of October 13, 2016
10.8		Assignment of Management Agreement and Subordination of Management Fees by and among BR Carroll Glenridge, LLC, KeyBank National Association and Carroll Management Group, LLC, dated as of October 13, 2016
10.9		Guaranty by Bluerock Residential Growth REIT, Inc. and Carroll Multifamily Real Estate Fund IV, LP to and for the benefit of KeyBank National Association, dated as of October 13, 2016
10.10		Assignment of Security Instrument by KeyBank National Association to Federal Home Loan Mortgage Corporation, dated as of October 13, 2016
10.11		Property Management Agreement by and between BR Carroll Glenridge, LLC and Carroll Management Group, LLC, dated as of October 13, 2016

Exhibit 10.1

LIMITED LIABILITY COMPANY AGREEMENT OF

BRG GLENRIDGE, LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT of BRG GLENRIDGE, LLC, a Delaware limited liability company (the “ Company ”), as amended from time to time, (the “ Agreement ”) is entered into by Bluerock Residential Holdings, LP, a Delaware limited partnership, the sole member of the Company (the “ Member ”).

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 ”).

B. The undersigned desires to execute this Agreement to set forth the terms and conditions under which the management, business, and financial affairs of the Company will be conducted.

C. Definitions for this Agreement are set forth in Article XI.

AGREEMENT

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 party hereby covenants and agrees as follows:

ARTICLE I

PURPOSE AND POWERS OF COMP ANY

1.1 Purpose . The Company’s business and purpose shall consist solely of (x) the acquisition, ownership, operation, management, financing and disposition of the multi-family real estate project consisting of approximately 480 units and located at 5501 Glenridge Drive, Atlanta, Georgia and currently commonly known as Nevadan Apartments (and to be rebranded as Glenridge Apartments) (the “ Property ”), which will be owned by a Subsidiary, (y) the ownership and management of one or more Subsidiaries in connection with the Property and (z) such activities as are necessary, incidental or appropriate in connection therewith.

1.2 Powers . The Company shall have all powers of a limited liability company formed under the Act and not prohibited by the Act or this Agreement.

1.3 Title to Company Property . All property owned by the Company shall be owned by the Company as an entity and, insofar as permitted by applicable law, no Member shall have any ownership interest in any Company property in its individual name or right, and each Member’s Membership Interest shall be personal property for all purposes.

1.4 Term . This Agreement shall not terminate until the Company is terminated in accordance with this Agreement.

1.5 Registered Office and Registered Agent . The Company’s initial registered office and initial registered agent shall be as provided 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 pursuant to the Act.

1.6 Formation and Authorized Person . On or before execution of this Agreement, an authorized person within the meaning of the Act shall have duly filed or caused to be filed the Certificate of Formation of the Company with the office of the Secretary of State of Delaware, as provided in Section 18-201 of the Act, and the Member hereby ratifies such filing. The Member shall use its best efforts to take such other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of Delaware. Notwithstanding anything contained herein to the contrary, the Company shall not do business in any jurisdiction that would jeopardize the limitation on liability afforded to the Member and/or any subsequent members under the Act or this Agreement.

ARTICLE II

MEMBERS

Initial Member

(a) The name, address and initial Membership Interest of the initial Member is as follows:

Name		Membership Interest
Bluerock Residential Holdings, LP		100%
c/o Bluerock Real Estate, L.L.C.
712 Fifth Avenue, 9 ^th Floor
New York, NY 10019

(b) The Member was admitted to the Company as a member of the Company upon its execution of a counterpart signature page to this Agreement.

ARTICLE III

MANAGEMENT BY MEMBER

3.1 In General . The powers of the Company shall be exercised by, or under the authority of, the Member. In addition, the business and affairs of the Company shall be ·managed under the direction of the Member. Subject to the limitations set forth in this Agreement, the Member shall be entitled to make all decisions and take all actions for the Company.

3.2 Management by Member . Except as otherwise limited by this Agreement, 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; provided, however, that the Company may, at its election, appoint one or more officers to exercise its rights under this Agreement. The Member shall be entitled to make all decisions and take all actions for the Company, and the Member has the authority to bind the Company.

3.3 Required Approval . Any provision in this Agreement that requires the approval of the Members, but does not specify the particular percentage interests or number of Members required for such approval, shall be interpreted to require the affirmative vote of the Member holding a majority of the total Membership Interests from time to time, and specifically shall not be interpreted to require unanimous consent of the Member.

3.4 Action By Member . In exercising the voting or other approval rights as provided herein, the Member may act through meetings and/or written consents.

3.5 Authorization . The Company shall possess and may exercise all of the powers and privileges granted by the Act, and the Company is hereby authorized to do any act, enter into any agreement, contract or other instrument, and otherwise to engage in any activity and to do any action not prohibited under the Act or other applicable law which is necessary, useful, desirable or convenient to the conduct, promotion and attainment of the business and purposes of the Company.

ARTICLE IV

[INTENTIONALLY OMITTED]

ARTICLE V

[INTENTIONALLY OMITTED]

ARTICLE VI

EFFECT OF BANKRUPTCY. DEATH OR INCOMPETENCY OF A MEMBER

6.1 The bankruptcy, death, dissolution, liquidation, termination or adjudication of incompetency of a Member shall not cause the termination or dissolution of the Company and the business of the Company shall continue. Upon any such occurrence, the trustee, receiver, executor, administrator, committee, guardian or conservator of such Member shall have all the rights of such Member for the purpose of settling or managing its estate or property, subject to satisfying conditions precedent to the admission of such assignee as a substitute member. The transfer by such trustee, receiver, executor, administrator, committee, guardian or conservator of any Company Interest shall be subject to all of the restrictions hereunder to which such transfer would have been subject if such transfer had been made by such bankrupt, deceased, dissolved, liquidated, terminated or incompetent Member. The foregoing shall apply to the extent permitted by applicable law. Notwithstanding any other provision of the Certificate of Formation or this Agreement, no member of the Company shall have any right under Section 18-801(b) of the Act to agree in writing to dissolve the Company upon the bankruptcy of a member of the Company or the occurrence of any event that causes a member of the Company to cease to be a member of the Company. The existence of the Company as a separate legal entity shall continue until the cancellation of its Certificate of Formation as provided in the Act.

ARTICLE VII

CONTRIBUTIONS TO THE COMPANY AND DISTRIBUTIONS

7.1 Member Capital Contributions . Upon execution of this Agreement, the Member shall contribute as the Member’s initial Capital Contribution, $100 in cash.

7.2 [Intentionally Omitted]

7.3 Distributions and Allocation s. All distributions of cash or other property (except upon the Company’s dissolution, which shall be governed by the applicable provisions of the Act and Article IX hereof) and all allocations of income, profits, and loss shall be made 100% to the Member in accordance with its Membership Interest. All amounts withheld pursuant to the Code or any provisions of state or local tax law with respect to any payment or distribution to the Member from the Company shall be treated as amounts distributed to the Member pursuant to this Section 7.3. 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.

ARTICLE VIII

ASSIGNMENTS AND RESIGNATIONS

8.1 Assignment, Resignation and Admission Generally .

(a) Assignments . The Member may assign in whole or in part its Membership Interest in the Company. If the Member transfers all of its Membership Interest pursuant to this Section 8.1, 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 Member shall cease to be a member of the Company. Notwithstanding anything in this Agreement to the contrary, any successor to the Member by merger or consolidation shall, without further act, be the Member hereunder, and such merger or consolidation shall not constitute an assignment for purposes of this Agreement and the Company shall continue without dissolution.

(b) Resignation . The Member is permitted to resign. If the Member is permitted to resign pursuant to this Section 8.l (b), an additional member of the Company shall be admitted to 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 resignation and, immediately following such admission, and the resigning Member shall cease to be a member of the Company.

(c) Admission of Additional Members . One or more additional members may be admitted to the Company with the written consent of the Member.

8.2 Absolute Prohibition . Notwithstanding any other provision in this Article VIII, the Membership Interest of the Member, in whole or in part, or any rights to distributions therefrom, shall not be sold, exchanged, conveyed, transferred, pledged, hypothecated, subjected to a security interest, or otherwise assigned or encumbered, if such action would result in a violation of federal or state securities laws in the opinion of counsel for the Company.

8.3 Additional Requirements . In addition to all requirements imposed in this Article VIII, any admission of a member or assignment of a Membership Interest shall be subject to all restrictions relating thereto expressly imposed by the Act.

8.4 Effect of Prohibited Action . Any assignment in violation of this Article VIII shall be, to the fullest extent permitted by law, void and of no force or effect whatsoever.

ARTICLE IX

DISSOLUTION AND TERMINATION

9.1 Dissolution . Subject to the other provisions of this Agreement, the Company shall be dissolved upon the first to occur of the following: (a) 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 unless the Company is continued without dissolution in a manner permitted by this Agreement or the Act or (b) the entry of a decree of judicial dissolution 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 (other than upon continuation of the Company without dissolution upon (i) an assignment by the Member of all of its Membership Interest and the admission of the transferee pursuant to Section 8.1, or (ii) the resignation of the Member and the admission of an additional member of the Company pursuant to Section 8.1), 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 (x) to continue the Company and (y) to admit 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.

9.2 Liquidation . Upon its dissolution, the Company shall wind up its affairs and distribute its assets in accordance with Section 9.4 below and the Act by either or a combination of the following methods as the Member (or the Person carrying out the liquidation) shall determine:

(a) selling the Company’s assets and, after the satisfaction of Company liabilities, distributing the net proceeds therefrom to the Member; and/or

(b) subject to the satisfaction of Company liabilities, distributing the Company’s assets to the Member in kind, with the Member accepting an undivided interest in the Company’s assets in satisfaction of its Membership Interest.

9.3 Orderly Liquidation . A reasonable time as determined by the Member (or the Person carrying out the liquidation) shall be allowed for the orderly liquidation of the assets of the Company and the discharge of liabilities to the creditors so as to minimize any losses attendant upon dissolution.

9.4 Distributions . Upon dissolution, the Company’s assets (including any cash on hand) shall be distributed in the following order and in accordance with the following priorities:

(a) first, to the satisfaction of all debts and liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof) and the expenses of liquidation, including a sales commission to the selling agent, if any; then

(b) second, to the Member.

9.5 Termination . 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. The existence of the Company as a separate legal entity shall continue until cancellation of the Certificate of Formation as provided in the Act.

ARTICLE X

MISCELLANEOUS PROVISIONS

10.1 Governing Law . This Agreement shall be construed, enforced, and interpreted in accordance with the laws of the State of Delaware, without regard to conflicts of law provisions and principles thereof.

10.2 Indemnity . The Company shall indemnify and hold harmless any person who was or is a party to any proceeding, including any proceeding brought by a member in the right of the Company or brought by or on behalf of any member of the Company, by reason of the fact that he is or was an officer of the Company, against any liability incurred by him in connection with such proceedings unless he engaged in willful misconduct or knowing violation of the criminal law or any federal or state securities laws. Furthermore, in any such proceedings brought by or on behalf of the Company or bought by or on behalf of the members of the Company, no officer shall be liable to the Company or its members for any monetary damages with respect to any transaction, occurrence, course of conduct or otherwise, except for liability resulting from such officer’s having engaged in willful misconduct or a knowing violation of the criminal law or any federal or state securities laws.

10.3 Integrated and Binding Agreement; Amendment . This Agreement contains the entire understanding and agreement among the parties hereto with respect to the subject matter hereof, and there are no other agreements, understandings, representations or warranties among the parties hereto other than those set forth herein. This Agreement may be amended only by written agreement of the Member and only as provided in this Agreement. Notwithstanding any other provision of this Agreement, the parties hereto agree that this Agreement constitutes a legal, valid and binding agreement, and is enforceable against each of them in accordance with its terms.

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

10.5 Headings . The headings in this 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 Agreement or any provision hereof.

10.6 Counterparts . This 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.

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

10.8 Notices . All notices under this Agreement shall be in writing and shall be given to the party entitled thereto by personal service or by mail, posted to the address maintained by the Company for such person or at such other address as he may specify in writing.

10.9 Rights and Remedies Cumulative; Waivers. The rights and remedies provided by this Agreement are cumulative and the use of any one right or remedy by any party shall not preclude or waive the right to use any or all other remedies, and are given in addition to any other rights the parties may have by law, statute, ordinance, or otherwise. 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 Agreement shall not prevent a subsequent act, which would have originally constituted a violation, from having the effect of an original violation.

10.10 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 Agreement, their respective heirs, legal representatives, successors, and assigns.

10.11 Partition . Each member agrees that the assets of the Company are not and will not be suitable for partition. Accordingly, each member hereby irrevocably waives (to the fullest extent permitted by law) any and all rights that he may have, or may obtain, to maintain any action for partition of any of the assets of the Company.

10.12 Tax Status . It is the intention of the Member that the Company be a disregarded entity for federal income tax purposes under Section 7701 of the Code and the Treasury Regulations promulgated pursuant thereto.

10.13 Effective Date . 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.

ARTICLE XI

DEFINITIONS

In addition to any other defined terms herein, the following terms used in this Agreement shall have the following meanings (unless otherwise expressly provided herein):

(a) “Affiliate” shall mean any Person controlling or controlled by or under common control with the Company, including, without limitation (i) any person who has a familial relationship, by blood, marriage or otherwise with any Member or employee of the Company, or any Affiliate thereof and (ii) any Person which receives compensation for administrative, legal or accounting services from the Company, or any of its Affiliates. For purposes of this definition, “control” when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

(b) “Bankruptcy” shall mean, 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 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.

(c) “Capital Contribution” shall mean any contribution to the capital of the Company by the Member in cash, property, or services, or a binding obligation to contribute cash, property, or services, whenever made.

(d) “Certificate of Formation” shall mean the Certificate of Formation of the Company, as amended and in force from time to time.

(e) “Company Interest” shall mean any equity interest in the Company, direct or indirect.

(f) “Code” shall mean the Internal Revenue Code of 1986, as amended, or corresponding provisions of subsequent superseding federal revenue laws and the rules and regulations promulgated thereunder.

(g) “Company shall mean BRG GLENRIDGE, LLC.

(h) “Entity” shall mean any general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative, association or other entity.

(i) “Member” shall mean the Person identified in Article II hereof and includes any Person admitted as an additional member or a substitute member of the Company pursuant to the provisions of this Agreement, each in its capacity as a member of the Company.

(j) “Membership Interest” shall mean the Member’s limited liability company interest in the Company and the other rights and obligations with respect thereto as set forth in this Agreement. The Membership Interest is set forth beside the Member’s name in Article II of this Agreement.

(k) “Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization, or government or any agency or political subdivision thereof.

(l) “Property” is defined in Section 1.1 of this Agreement.

(m) “Subsidiary” shall mean any Entity in which the Company owns, directly or indirectly, a membership or other equity interest equal to 50% or more of the outstanding equity in that Entity.

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The undersigned hereby agrees, acknowledges, and certifies that the foregoing constitutes the sole and entire Limited Liability Company Agreement of the Company.

	Member :	Bluerock Residential Holdings, LP
		a Delaware limited partnership

By:

Bluerock Residential Growth REIT, Inc., a Maryland corporation, its general partner

		By:	/s/ Ramin Kamfar
		Name:	Ramin Kamfar
		Title:	Authorized Signatory

Exhibit 10.2

LIMITED LIABILITY COMPANY AGREEMENT OF

BR GLENRIDGE JV MEMBER, LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT of BR GLENRIDGE JV MEMBER, LLC, a Delaware limited liability company (the “ Company ”), as amended from time to time, (the “ Agreement ”) is entered into by BRG Glenridge, LLC, a Delaware limited liability company, the sole member and manager of the Company (the “ Member ”).

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 ”).

B. The undersigned desires to execute this Agreement to set forth the terms and conditions under which the management, business, and financial affairs of the Company will be conducted.

C. Definitions for this Agreement are set forth in Article XI.

AGREEMENT

ARTICLE I

PURPOSE AND POWERS OF COMP ANY

1.1 Purpose . The Company’s business and purpose shall consist solely of (x) the acquisition, ownership, operation, management, financing and disposition of the multi-family real estate project consisting of approximately 480 units and located at 5501 Glenridge Drive, Atlanta, Georgia and currently commonly known as the Nevadan Apartments (and to be rebranded as Glenridge Apartments) (the “ Property ”), which will be owned by a Subsidiary, (y) the ownership and management of one or more Subsidiaries in connection with the Property and (z) such activities as are necessary, incidental or appropriate in connection therewith.

1.2 Powers . The Company shall have all powers of a limited liability company formed under the Act and not prohibited by the Act or this Agreement.

1.3 Title to Company Property . All property owned by the Company shall be owned by the Company as an entity and, insofar as permitted by applicable law, no member shall have any ownership interest in any Company property in its individual name or right, and each member’s Membership Interest shall be personal property for all purposes.

1.4 Term . This Agreement shall not terminate until the Company is terminated in accordance with this Agreement.

1.6 Formation and Authorized Person . On or before execution of this Agreement, an authorized person within the meaning of the Act shall have duly filed or caused to be filed the Certificate of Formation of the Company with the office of the Secretary of State of Delaware, as provided in Section 18-201 of the Act, and the Manager hereby ratifies such filing. The Manager shall use its best efforts to take such other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of Delaware. Notwithstanding anything contained herein to the contrary, the Company shall not do business in any jurisdiction that would jeopardize the limitation on liability afforded to the Member under the Act or this Agreement.

ARTICLE II

MEMBERS

2.1 Initial Member .

(a) The name, address and initial Membership Interest of the initial Member is as follows:

Name		Membership Interest
BRG Glenridge, LLC		100%
c/o Bluerock Real Estate, L.L.C.
712 Fifth Avenue, 9 ^th Floor
New York, NY 10019

(b) The Member was admitted to the Company as a member of the Company upon its execution of a counterpart signature page to this Agreement.

ARTICLE III

MANAGEMENT

3.1 Initial Manager . The initial Manager shall be the Member.

3.2 In General . The powers of the Company shall be exercised by, or under the authority of, the Manager. In addition, the business and affairs of the Company shall be ·managed under the direction of the Manager. Subject to the limitations set forth in this Agreement, the Manager shall be entitled to make all decisions and take all actions for the Company.

3.3 Management by Manager . Except as otherwise limited by this Agreement, the Manager 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; provided, however, that the Company may, at its election, appoint one or more officers to exercise its rights under this Agreement. The Manager shall be entitled to make all decisions and take all actions for the Company, and the Manager has the authority to bind the Company.

3.4 Required Approval . Any provision in this Agreement that requires the approval of the members, but does not specify the particular percentage interests or number of members required for such approval, shall be interpreted to require the affirmative vote of the members holding a majority of the total Membership Interests from time to time, and specifically shall not be interpreted to require unanimous consent of the members.

3.5 Action By Manager . In exercising the voting or other approval rights as provided herein, the Manager may act through meetings and/or written consents.

3.6 Term of Manager . The Manager shall serve until the Member’s withdrawal from the Company. At such time any existing or new Members may elect a new Manager through vote of the Members then owning more than 50% in Membership Interests.

3.7 Authorization . The Company shall possess and may exercise all of the powers and privileges granted by the Act, and the Company is hereby authorized to do any act, enter into any agreement, contract or other instrument, and otherwise to engage in any activity and to do any action not prohibited under the Act or other applicable law which is necessary, useful, desirable or convenient to the conduct, promotion and attainment of the business and purposes of the Company.

ARTICLE IV

[INTENTIONALLY OMITTED]

ARTICLE V

[INTENTIONALLY OMITTED]

ARTICLE VI

EFFECT OF BANKRUPTCY. DEATH OR INCOMPETENCY OF A MEMBER

6.1 The bankruptcy, death, dissolution, liquidation, termination or adjudication of incompetency of a member shall not cause the termination or dissolution of the Company and the business of the Company shall continue. Upon any such occurrence, the trustee, receiver, executor, administrator, committee, guardian or conservator of such member shall have all the rights of such member for the purpose of settling or managing its estate or property, subject to satisfying conditions precedent to the admission of such assignee as a substitute member. The transfer by such trustee, receiver, executor, administrator, committee, guardian or conservator of any Company Interest shall be subject to all of the restrictions hereunder to which such transfer would have been subject if such transfer had been made by such bankrupt, deceased, dissolved, liquidated, terminated or incompetent member. The foregoing shall apply to the extent permitted by applicable law. Notwithstanding any other provision of the Certificate of Formation or this Agreement, no member of the Company shall have any right under Section 18-801(b) of the Act to agree in writing to dissolve the Company upon the bankruptcy of a member of the Company or the occurrence of any event that causes a member of the Company to cease to be a member of the Company. The existence of the Company as a separate legal entity shall continue until the cancellation of its Certificate of Formation as provided in the Act.

ARTICLE VII

CONTRIBUTIONS TO THE COMPANY AND DISTRIBUTIONS

7.1 Member Capital Contributions . Upon execution of this Agreement, the Member shall contribute as the Member’s initial Capital Contribution, $100 in cash.

7.2 Distributions and Allocation s. All distributions of cash or other property (except upon the Company’s dissolution, which shall be governed by the applicable provisions of the Act and Article IX hereof) and all allocations of income, profits, and loss shall be made 100% to the members in accordance with their Membership Interest. All amounts withheld pursuant to the Code or any provisions of state or local tax law with respect to any payment or distribution to the members from the Company shall be treated as amounts distributed to the members pursuant to this Section 7.2. 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 interest in the Company if such distribution would violate Section 18-607 of the Act or any other applicable law.

ARTICLE VIII

ASSIGNMENTS AND RESIGNATIONS

8.1 Assignment, Resignation and Admission Generally .

(a) Assignments . A member may assign in whole or in part its Membership Interest in the Company. If a member transfers all of its Membership Interest pursuant to this Section 8.1, 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, such member shall cease to be a member of the Company. Notwithstanding anything in this Agreement to the contrary, any successor to a member by merger or consolidation shall, without further act, be a member hereunder, and such merger or consolidation shall not constitute an assignment for purposes of this Agreement and the Company shall continue without dissolution.

(b) Resignation . A member is permitted to resign. If a member is permitted to resign pursuant to this Section 8.l(b), an additional member of the Company shall be admitted to 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 resignation and, immediately following such admission, and the resigning member shall cease to be a member of the Company.

(c) Admission of Additional Members . One or more additional members may be admitted to the Company with the written consent of the Manager.

8.2 Absolute Prohibition . Notwithstanding any other provision in this Article VIII, the Membership Interest of a member, in whole or in part, or any rights to distributions therefrom, shall not be sold, exchanged, conveyed, transferred, pledged, hypothecated, subjected to a security interest, or otherwise assigned or encumbered, if such action would result in a violation of federal or state securities laws in the opinion of counsel for the Company.

8.4 Effect of Prohibited Action . Any assignment in violation of this Article VIII shall be, to the fullest extent permitted by law, void and of no force or effect whatsoever.

ARTICLE IX

DISSOLUTION AND TERMINATION

9.1 Dissolution . Subject to the other provisions of this Agreement, the Company shall be dissolved upon the first to occur of the following: (a) 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 unless the Company is continued without dissolution in a manner permitted by this Agreement or the Act or (b) the entry of a decree of judicial dissolution 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 Manager to cease to be a member of the Company (other than upon continuation of the Company without dissolution upon an assignment by the Manager of all of its Membership Interest and the admission of the transferee pursuant to Section 8.1), 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 (x) to continue the Company and (y) to admit 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.

9.2 Liquidation . Upon its dissolution, the Company shall wind up its affairs and distribute its assets in accordance with Section 9.4 below and the Act by either or a combination of the following methods as the Manager (or the Person carrying out the liquidation) shall determine:

(a) selling the Company’s assets and, after the satisfaction of Company liabilities, distributing the net proceeds therefrom to the members; and/or

(b) subject to the satisfaction of Company liabilities, distributing the Company’s assets to the members in kind in satisfaction of their Membership Interests.

9.3 Orderly Liquidation . A reasonable time as determined by the Manager (or the Person carrying out the liquidation) shall be allowed for the orderly liquidation of the assets of the Company and the discharge of liabilities to the creditors so as to minimize any losses attendant upon dissolution.

9.4 Distributions . Upon dissolution, the Company’s assets (including any cash on hand) shall be distributed in the following order and in accordance with the following priorities:

(b) second, to the members.

9.5 Termination . 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. The existence of the Company as a separate legal entity shall continue until cancellation of the Certificate of Formation as provided in the Act.

ARTICLE X

MISCELLANEOUS PROVISIONS

10.2 Indemnity . The Company shall indemnify and hold harmless any person who was or is a party to any proceeding, including any proceeding brought by a member in the right of the Company or brought by or on behalf of any member of the Company, by reason of the fact that he is or was a Manager or an officer of the Company, against any liability incurred by him in connection with such proceedings unless he engaged in willful misconduct or knowing violation of the criminal law or any federal or state securities laws. Furthermore, in any such proceedings brought by or on behalf of the Company or bought by or on behalf of the members of the Company, no Manager or officer shall be liable to the Company or its members for any monetary damages with respect to any transaction, occurrence, course of conduct or otherwise, except for liability resulting from such Manager’s or officer’s having engaged in willful misconduct or a knowing violation of the criminal law or any federal or state securities laws.

10.3 Integrated and Binding Agreement; Amendment . This Agreement contains the entire understanding and agreement among the parties hereto with respect to the subject matter hereof, and there are no other agreements, understandings, representations or warranties among the parties hereto other than those set forth herein. This Agreement may be amended only by written agreement of the Manager and only as provided in this Agreement. Notwithstanding any other provision of this Agreement, the parties hereto agree that this Agreement constitutes a legal, valid and binding agreement, and is enforceable against each of them in accordance with its terms.

10.6 Counterparts . This 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.

10.12 Tax Status . It is the intention of the Manager that the Company be a disregarded entity for federal income tax purposes under Section 7701 of the Code and the Treasury Regulations promulgated pursuant thereto.

ARTICLE XI

DEFINITIONS

In addition to any other defined terms herein, the following terms used in this Agreement shall have the following meanings (unless otherwise expressly provided herein):

(d) “Certificate of Formation” shall mean the Certificate of Formation of the Company, as amended and in force from time to time.

(e) “Company Interest” shall mean any equity interest in the Company, direct or indirect.

(h) “Code” shall mean the Internal Revenue Code of 1986, as amended, or corresponding provisions of subsequent superseding federal revenue laws and the rules and regulations promulgated thereunder.

(i) “Company” shall mean BR GLENRIDGE JV MEMBER, LLC.

(j) “Entity” shall mean any general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative, association or other entity.

(k) “Manager” shall mean BRG Glenridge, LLC or any entity or individual subsequently elected as manager pursuant to Section 3.6 of this Agreement.

(l) “Member” shall mean the Person identified in Article II hereof and includes any Person admitted as an additional member or a substitute member of the Company pursuant to the provisions of this Agreement, each in its capacity as a member of the Company.

(m) “Membership Interest” shall mean the member’s limited liability company interest in the Company and the other rights and obligations with respect thereto as set forth in this Agreement. The Membership Interest is set forth beside the member’s name in Article II of this Agreement.

(n) “Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization, or government or any agency or political subdivision thereof.

(o) “Property” is defined in Section 1.1 of this Agreement.

(p) “Subsidiary” shall mean any Entity in which the Company owns, directly or indirectly, a membership or other equity interest equal to 50% or more of the outstanding equity in that Entity.

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The undersigned hereby agrees, acknowledges, and certifies that the foregoing constitutes the sole and entire Limited Liability Company Agreement of the Company.

	Member and Manager :

	BRG Glenridge, LLC, a Delaware limited liability company

By:

Bluerock Residential Holdings, LP, a Delaware limited partnership, its sole member

By:

Bluerock Residential Growth REIT, Inc., a Maryland corporation, its general partner

			By:	/s/ R. Ramin Kamfar
			Name:	R. Ramin Kamfar
			Title:	Authorized Signatory

Exhibit 10.3

LIMITED LIABILITY COMPANY AGREEMENT

BR CARROLL GLENRIDGE JV LLC

A DELAWARE LIMITED LIABILITY COMPANY

DATED AS OF OCTOBER 13, 2016

LIMITED LIABILITY COMPANY AGREEMENT

BR CARROLL GLENRIDGE JV LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT of BR CARROLL GLENRIDGE JV LLC (“ JV ” or “ Company ”) is made and entered into and is effective as of October 13, 2016, by and between BR Glenridge JV Member, LLC, a Delaware limited liability company (“ Bluerock ”) and Carroll Co-Invest IV Glenridge, LLC , a Georgia limited liability company (“ Carroll ”) (this “ Agreement ”). Capitalized terms used herein shall have the meanings ascribed to such terms in this Agreement.

Effective as of October 13, 2016, the Members, by execution of this Agreement, hereby form 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 Members hereby agree as follows:

Section 1.

Definitions . As used in this Agreement:

“ Act ” shall mean the Delaware Limited Liability Company Act (currently Chapter 18 of Title 6 of the Delaware Code), as amended from time to time.

“ Adjusted Capital Account Deficit ” shall mean, with respect to any Member, the deficit balance, if any, in such Member’s Capital Account as of the end of the applicable Fiscal Year after (i) crediting such Capital Account with any amounts which such Member is deemed to be obligated to restore pursuant to Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), and (ii) debiting such Capital Account by the amount of the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

“ Advisor ” shall mean any accountant, attorney or other advisor retained by a Member.

“ Affiliate ” shall mean with respect to any Person (i) more than ten percent (10%) of the issued and outstanding stock of which, or more than ten percent (10%) of the ownership interests of which, is owned, directly or indirectly, by a Person, including a Member, (ii) that now or hereafter owns, directly or indirectly, more than a ten percent (10%) ownership interest in a Person, including the Company or in any Member, (iii) any agent, trustee, officer, director, employee, partner, member, manager or shareholder or member of the family of such Person (or any member of the family of any such agent, trustee, officer, director, employee, partner, member, manager or shareholder) or (iv) any corporation, partnership, limited liability company, trust or other entity that, directly or indirectly, through one or more intermediaries, controls, or is controlled by, or is under common control with, such Person. 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 a Person, 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.

“ Agreed Upon Value ” shall mean the fair market value (net of any debt) agreed upon pursuant to a written agreement between the Members of property contributed by a Member to the capital of the Company, which shall for all purposes hereunder be deemed to be the amount of the Capital Contribution applicable to such property contributed.

“ Agreement ” shall mean this Limited Liability Company Agreement, as amended from time to time.

“ Annual Business Plan ” shall mean, with respect to the Property, the business plan for a Fiscal Year of the Company prepared by Property Manager and approved by the Members as further described in Section 9.3 .

“ Applicable Adjustment Percentage ” shall have the meaning set forth in Section 5.2(b)(3) .

“ Backstop Agreement(s) ” shall mean those certain agreements providing for the allocation of liability and contribution for losses arising from any “bad boy” guaranties constituting part of the Loan Documents.

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

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

“ Beneficial Owner ” shall have the meaning provided in Section 5.7 .

“ Bluerock ” shall have the meaning provided in the first paragraph of this Agreement.

“ Bluerock Transferee ” shall have the meaning set forth in Section 12.2(b)(2) .

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“ BR REIT ” shall mean Bluerock Residential Growth REIT, Inc., a Maryland corporation.

“ BR Growth ” shall mean Bluerock Growth Fund, LLC, a Delaware limited liability company.]

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

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

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

“ Capital Account ” shall have the meaning provided in Section 5.6 .

“ Capital Contribution ” shall mean, with respect to any Member, the aggregate amount of (i) cash, and (ii) the Agreed Upon Value of other property contributed by such Member to the capital of the Company net of any liability secured by such property that the Company assumes or takes subject to.

“ Carroll ” shall have the meaning provided in the first paragraph of this Agreement.

“ Carroll Parent ” shall mean MPC Partnership Holdings LLC, a Georgia limited liability company.

“ Carroll Change Event ” shall mean (i) gross negligence, willful misconduct, fraud or bad faith by Carroll or any of its Affiliates in connection with or relating to the Company or the Property or any portion thereof; (ii) a Bankruptcy/Dissolution Event shall have occurred with respect to Carroll or Property Manager; or (iii) failure to satisfy the Carroll Ownership/Control Requirement.

“ Carroll Ownership/Control Requirement ” as of any particular date means that each of the following conditions is satisfied: (i) at least one of the Key Individuals is not then dead, insane as determined by a qualified physician, incapacitated as determined by a qualified physician, or the subject of a Bankruptcy/Dissolution Event; and (ii) at least one of the Key Individuals is actively involved in the operation and management of (a) Carroll or Carroll Parent and (b) CMG.

“ Carroll Transferee ” shall have the meaning set forth in Section 12.2(b)(1) .

“ Cash Flow ” shall mean, for any period for which Cash Flow is being calculated, gross cash receipts of the Company (but excluding Capital Contributions), less the following payments and expenditures: (i) all payments of operating expenses of the Company (or the Subsidiary owning the Property), (ii) all payments of principal of, interest on and any other amounts due with respect to indebtedness, leases or other commitments or obligations of the Company (or the Subsidiary owning the Property) (including on loans by Members to the Company), (iii) all sums expended by the Company (or any Subsidiary owning the Property) for capital expenditures, (iv) all prepaid expenses of the Company (or any Subsidiary owning the Property), and (v) all sums expended by the Company (or any Subsidiary owning the Property) which are otherwise capitalized.

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“ Cause ” shall mean gross negligence, willful misconduct, fraud, bad faith or a Bankruptcy/Dissolution Event, or a termination of the Management Agreement by or at the behest of a third-party lender under an applicable Collateral Agreement.

“ Certificate of Formation ” shall mean the Certificate of Formation of the Company, as amended from time to time.

“ CMG ” shall mean Carroll Management Group, LLC, a Georgia limited liability company.

“ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, including the corresponding provisions of any successor law.

“ Collateral Agreement ” shall mean any agreement, instrument, document or covenant concurrently or hereafter made or entered into under, pursuant to, or in connection with this Agreement and any certifications made in connection therewith or amendment or amendments made at any time or times heretofore or hereafter to any of the same (including, without limitation, the Management Agreement and the Cost Sharing Agreement).

“ Company ” shall mean BR Carroll Glenridge JV LLC, a Delaware limited liability company organized under the Act.

“ Company Minimum Gain ” shall have the meaning given to the term “partnership minimum gain” in Regulations Sections 1.704-2(b)(2) and 1.704-2(d).

“ Confidential Information ” shall have the meaning provided in Section 10.01 .

“ Controllable Expenses ” shall mean all expenses, other than Uncontrollable Expenses, incurred by the Company or any Subsidiary of the Company with respect to the Property.

“ Cost Sharing Agreement ” shall mean the Agreement Regarding Purchase and Sale Contract & Acquisition Loan Fees and Deposits, dated August 16, 2016 by and between Bluerock Residential Holdings, L.P. and Carroll Acquisitions, LLC with respect to the Property.

“ Default Amount ” shall have the meaning provided in Section 5.2(b) .

“ Default Loan ” shall have the meaning provided in Section 5.2(b)(1) .

“ Default Loan Rate ” shall have the meaning provided in Section 5.2(b)(1) .

“ Defaulting Member ” shall have the meaning provided in Section 5.2(b) .

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“ Delaware UCC ” shall mean the Uniform Commercial Code as in effect in the State of Delaware from time to time.

“ Dissolution Event ” shall have the meaning provided in Section 13.2 .

“ Distributable Funds ” with respect to any month or other period, as applicable, shall mean an amount equal to the Cash Flow of the Company for such month or other period, as applicable, as reduced by reserves for anticipated capital expenditures, future working capital needs and operating expenses, contingent obligations and other purposes of the Company or any Subsidiary, the amounts of which shall be reasonably determined from time to time by the Management Committee.

“ Distributions ” shall mean the distributions payable (or deemed payable) to a Member (including, without limitation, its allocable portion of Distributable Funds).

“ Emergency Expenditure ” shall have the meaning provided in the Management Agreement.

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

“ Fiscal Year ” shall mean each calendar year ending December 31.

“ Flow Through Entity ” shall have the meaning provided in Section 5.7 .

“ 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.

“ Imputed Closing Costs ” means an amount (not to exceed one and one quarter percent (1.25%) of the purchase price) that would normally be incurred by the Company or a Subsidiary if the Property were sold for an amount specified in Section 15.1 or Section 15.2 (as applicable), for title insurance premiums, survey costs, brokerage commissions, legal fees, and other commercially reasonable closing costs.

“ Income ” shall mean the gross income of the Company for any month, Fiscal Year or other period, as applicable, including gains realized on the sale, exchange or other disposition of the Company’s assets.

“ Indemnified Party ” shall have the meaning provided in Section 14.4(a) .

“ Indemnifying Party ” shall have the meaning provided in Section 14.4(a) .

“ Inducement Agreements ” shall have the meaning provided in Section 14.4(a) .

“ Initial Business Plan ” shall have the meaning provided in Section 9.3(a) .

“ Initiating Member ” shall have the meaning provided in Section 15.2(a) .

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“ Interest ” of any Member shall mean the entire limited liability company interest of such Member in the Company, which includes, without limitation, any and all rights, powers and benefits accorded a Member under this Agreement and the duties and obligations of such Member hereunder.

“ Internal Rate of Return ” and “ IRR ” shall mean, as of any date, the internal rate of return on the Total Investment of a Member to such date, calculated to be that discount rate (expressed on a percent per annum basis) which, when divided by twelve (12), compounded annually and applied to such Total Investment and the corresponding Distributions with respect thereto, causes the net present value, as of such date, of such Distributions and Total Investment to equal zero (calculated with the “XIRR” function in Microsoft Excel and using the latest version of Microsoft Excel available as of the date hereof). For this purpose, Capital Contributions and Distributions shall be assumed to have occurred as of the end of the month in which such Capital Contribution or Distribution takes place. For purposes of determining the Internal Rates of Return hereunder, calculations shall be denominated and calculated in US Dollars.

“ Key Individual ” shall mean each of Patrick Carroll and Joshua Champion.

“ Loan ” shall mean that certain acquisition loan in the initial principal amount of Forty Eight Million Four Hundred Thirty One Thousand and no/100 Dollars ($48,431,000.00) originally made by Keybank National Association (“ Keybank ”), for and on behalf of Freddie Mac, as the assignee thereof which is secured by the Property.

“ Loss ” shall mean the aggregate of losses, deductions and expenses of the Company for any month, Fiscal Year or other period, as applicable, including losses realized on the sale, exchange or other disposition of the Company’s assets.

“ Major Decision ” means any decision for the Company to take, or refrain from taking, any action or incurring any obligation with respect to the following matters (or the effectuation of any such action or obligation):

(i)

any merger, conversion or consolidation involving the Company or any Subsidiary or the sale, lease, transfer, exchange or other disposition of all or substantially all of the Company’s assets or all of the Interests of the Members in the Company, in one or a series of related transactions;

(ii)

except as expressly provided in Section 12 with respect to Transfers by Bluerock or a Bluerock Transferee to a Bluerock Transferee and with respect to Transfers by Carroll as permitted thereunder, the admission or removal of any Member or the Company’s issuance to any third party of any equity interest in the Company (including interests convertible into, or exchangeable for, equity interests in the Company);

(iii)

except upon the occurrence of any Dissolution Event, any liquidation, dissolution or termination of the Company or any Subsidiary;

(iv)

giving, granting or undertaking any options, rights of first refusal, deeds of trust, mortgages, pledges, ground leases, security or other interests in or encumbering the Property, any portion thereof or any other material assets;

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(v)

selling, conveying or effecting any other direct or indirect transfer of the Property, any Subsidiary or other material asset of the Company or any portion thereof or the entering into of any agreement, commitment or assumption with respect to any of the foregoing;

(vi)

acquiring, directly or through any Subsidiaries, by purchase, ground lease or otherwise, any real property or other material asset or the entry into of any agreement, commitment or assumption with respect to any of the foregoing, or the making or posting of any deposit (refundable or non-refundable);

(vii)

taking any action by the Company or any Subsidiary that is reasonably likely to result in any Member or any of its Affiliates having individual liability under any so called “bad boy” guaranties or similar agreements provided to third party lenders in respect of financings relating to the Company, the Subsidiaries or any of their assets which provide for recourse as a result of willful misconduct, fraud or gross negligence or failure to comply with the covenants or any other provisions of such “bad boy” guaranties;

(viii)

institute or settle any Company or Subsidiary legal claims in excess of $50,000;

(ix)

employ, enter into any contract with (or materially modify any contract with), or otherwise compensate, directly or indirectly, the Manager or any Affiliate of the Manager;

(x)

amend, modify, recast, refinance or replace any financing to which the Company or a Subsidiary is a party or which encumbers the Property or any portion thereof;

(xi)

incur on behalf of the Company or a Subsidiary during any year any capital expenditures in excess of $50,000 in the aggregate unless pursuant to an Annual Business Plan approved by the Members;

(xii)

make any loan to any Member, except as expressly provided for in this Agreement;

(xiii)

cause or permit the Company or a Subsidiary to file for or fail to contest a bankruptcy proceeding, or seek or permit a receivership or make an assignment for the benefit of its creditors;

(xiv)

terminate the Management Agreement or issue a notice of default pursuant to the Management Agreement; provided, however, that (A) any such termination shall be subject to the terms of the Management Agreement and (B) in the event of a default by CMG under the Management Agreement, which default is not cured in any available cure period, only Bluerock shall be authorized to take any action with respect to any remedies on behalf of the Company or any Subsidiary, including the right to terminate the Management Agreement, and to solicit bids for, and enter into any replacement Management Agreement with, any replacement manager thereunder;

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(xv)

cause or permit any of the organizational documents, including this Agreement, of the Company or of any Subsidiary of the Company to be amended in any manner, other than any amendment (A) required (1) by a lender to the Company or any Subsidiary of the Company or (2) in order for a REIT Member to qualify as a “real estate investment trust” under the Code, in each case, to the extent such amendment referenced in clauses (1) and (2) of this subparagraph does not result in the dilution of any Member, does not adversely affect any Member’s right to Distributions pursuant to Section 6 and does not otherwise have a materially adverse effect on the rights of any Member, or (B) that is solely ministerial in nature to reflect or implement this Agreement under its express terms (such as, for example, to periodically update the Members’ respective Capital Contribution amounts, Percentage Interests or Management Committee representatives on Exhibit A); or

(xvi)

make distributions to the Members, except in accordance with Section 6 hereof.

“ Management Agreement ” shall mean, the property management agreement to be entered into between the Company (or any Subsidiary of the Company), as owner, and Property Manager, as manager, pursuant to which Property Manager will provide certain management services for the Property, to be in the form attached hereto as Exhibit C .

“ Management Committee ” shall have the meaning provided in Section 9.2(a) .

“ Manager ” shall have the meaning provided in Section 9.1(a) .

“ Material Deviation ” shall have the meaning provided in Section 9.3(f) .

“ Member ” and “ Members ” shall mean Bluerock, Carroll and any other Person admitted to the Company pursuant to this Agreement. For purposes of the Act, the Members shall constitute a single class or group of members.

“ Member in Question ” shall have the meaning provided in Section 16.12 .

“ Member Minimum Gain ” shall mean an amount, determined in accordance with Regulations Section 1.704-2(i)(3) with respect to each Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a Nonrecourse Liability.

“ Member Nonrecourse Debt ” shall have the meaning given the term “partner nonrecourse debt” in Regulations Section 1.704-2(b)(4).

“ Member Nonrecourse Deductions ” shall have the meaning given the term “partner nonrecourse deductions” in Regulations Section 1.704-2(i).

“ Minimum Return ” shall mean a cash-on-cash return on a Member’s total Capital Contributions to the Company equal to, when determined on a quarterly basis and annualized, nine percent (9%).

“ Net Income ” shall mean the amount, if any, by which Income for any period exceeds Loss for such period.

“ Net Loss ” shall mean the amount, if any, by which Loss for any period exceeds Income for such period.

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“ New York UCC ” shall have the meaning set forth in Section 16.17 .

“ Non-Initiating Member ” shall have the meaning provided in Section 15.2(a) .

“ Nonrecourse Deduction ” shall have the meaning given such term in Regulations Section 1.704-2(b)(1).

“ Nonrecourse Liability ” shall have the meaning given such term in Regulations Section 1.704-2(b)(3).

“ Offer ” shall have the meaning provided in Section 15.2(a) .

“ Offeror ” shall have the meaning provided in Section 15.1(b) .

“ Offeree ” shall have the meaning provided in Section 15.1(b) .

“ Owner ” shall mean BR Carroll Glenridge, LLC, a Delaware limited liability company.

“ Ownership Entity ” shall have the meaning provided in Section 15.2(a) .

“ Percentage Interest ” shall have the meaning provided in Section 5.3 .

“ Person ” shall mean any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other legal entity.

“ Preferred Return ” shall mean, with regard to any and all Capital Contributions made by a Member the greater of (a) an Internal Rate of Return equal to ten percent (10%) and (b) a return on such capital contributions equal to a 1.35 multiple thereof. The Preferred Return shall be calculated from the date that any such Capital Contributions are made including, in the case of any amounts funded pursuant to the Cost Sharing Agreement, the date such amounts are actually funded under the Cost Sharing Agreement.

“ Property ” shall have the meaning provided in Section 3 .

“ Property Management Fee ” shall have the meaning provided in Section 9.7 .

“ Property Manager ” shall mean CMG so long as the initial Management Agreement is in full force and effect with respect to the Property, and, thereafter, the entity performing similar services for the Company (or any Subsidiary that owns the Property) with respect to the Property.

“ Property Manager Reports ” shall have the meaning set forth in Section 8.2(c) .

“ Protective Capital Call ” shall mean a Capital Call necessary or advisable to (a) protect the Company’s (or any Subsidiary’s) interest in the Property (e.g., payment of taxes, repair of the Property following uninsured damage thereto, payment of insurance premiums, etc.); (b) to prevent a default with respect to any financing obtained by the Company or any Subsidiary (e.g., payment of debt service following an operating shortfall, reserves required by the lender, a reduction in principal required by the lender to meet loan to value requirements); or (c) funds required to refinance the Property when the current financing has matured or will mature in the near future (e.g., commitment fees, loan application fees, equity infusions to meet market loan to value requirements, etc.).

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“ Purchase Agreement ” shall mean that certain Sale-Purchase Agreement, dated August 12, 2016, as amended by that First Amendment of Sale-Purchase Agreement dated August 19, 2016, as further amended by that Second Amendment of Sale-Purchase Agreement dated August 24, 2016, as further amended by that Third Amendment of Sale-Purchase Agreement dated August 25, 2016, by and between Carroll Acquisitions, LLC (“ Carroll Acquisitions ”), and the seller party named therein, pursuant to which Carroll Acquisitions has contracted to acquire the Property.

“ Pursuer ” shall have the meaning provided in Section 10.3 .

“ Regulations ” shall mean the Treasury Regulations promulgated pursuant to the Code, as amended from time to time, including the corresponding provisions of any successor regulations.

“ Reimbursable Expenses ” shall have the meaning provided in the Management Agreement.

“ 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.

“ Representatives ” shall have the meaning provided in Section 9.2(a) .

“ Response Period ” shall have the meaning provided in Section 15.2(b) .

“ Sale Notice ” shall have the meaning provided in Section 15.2(a) .

“ Securities Act ” shall mean the Securities Act of 1933, as amended.

“ Seller ” shall mean, with respect to the Purchase Agreement, RPG Glenridge LLC, a Delaware limited liability company.

“ SOIFs” shall mean, collectively, BR SOIF II and BR SOIF III.

“ Subordinated Property Management Fee ” shall mean a portion of the Property Management Fee equal to 16.67% of the Property Management Fee or 0.5% of Gross Receipts.

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“ Subsidiary ” shall mean, with respect to any Person, any corporation, partnership, limited liability company or other entity of which at least a majority of the capital stock or other equity securities is owned by such Person.

“ Tax Matters Member ” shall have the meaning provided in Section 8.3 .

“ Total Investment ” shall mean the sum of the aggregate Capital Contributions made by a Member.

“ Transfer ” means, as a noun, any transfer, sale, assignment, exchange, charge, pledge, gift, hypothecation, conveyance, encumbrance or other disposition, voluntary or involuntary, by operation of law or otherwise and, as a verb, voluntarily or involuntarily, by operation of law or otherwise, to transfer, sell, assign, exchange, charge, pledge, give, hypothecate, convey, encumber or otherwise dispose of.

“ Uncontrollable Expenses ” shall mean the following expenses with respect to the Company, Subsidiary or Property: taxes and insurance; licenses; utilities; unanticipated material repairs that are essential to preserve or protect the Property; debt service; and costs due to a change in law.

“ Unsubordinated Property Management Fee ” shall mean a portion of the Property Management Fee equal to 83.33% of the Property Management Fee or 2.5% of Gross Receipts.

“ Valuation Amount ” shall have the meaning provided in Section 15.1(b) .

Section 2.

Organization of the Company .

2.1 Name . The name of the Company shall be “ BR Carroll Glenridge JV LLC ”. The business and affairs of the Company shall be conducted under such name or such other name as the Members deem necessary or appropriate to comply with the requirements of law in any jurisdiction in which the Company may elect to do business.

2.2 Place of Registered Office; Registered Agent . The address of the registered office of the Company in the State of Delaware is 160 Greentree Drive, Suite 101, Dover, Delaware 19904. The name and address of the registered agent for service of process on the Company in the State of Delaware is National Registered Agents, Inc., 160 Greentree Drive, Suite 101, Dover, Delaware 19904. The Management Committee may at any time on five (5) days prior notice to all Members change the location of the Company’s registered office or change the registered agent.

2.3 Principal Office . The principal address of the Company shall be c/o Bluerock Real Estate, L.L.C., 712 Fifth Avenue, 9 ^th Floor, New York, New York 10019 and the principal office of Property Manager shall be c/o Carroll Organization, LLC, 3340 Peachtree Road, Suite 1620, Atlanta, Georgia 30326, or, in each case, at such other place or places as may be determined by the Management Committee from time to time.

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2.4 Filings . On or before execution of this Agreement, an authorized person within the meaning of the Act shall have duly filed or caused to be filed the Certificate of Formation of the Company with the office of the Secretary of State of Delaware, as provided in Section 18-201 of the Act, and the Members hereby ratify such filing. The Manager shall use its best efforts to take such other actions as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws of Delaware. Notwithstanding anything contained herein to the contrary, the Company shall not do business in any jurisdiction that would jeopardize the limitation on liability afforded to the Members under the Act or this Agreement.

2.5 Term . The Company shall continue in existence from the date hereof until December 31, 2065, unless extended by the Members, or until the Company is dissolved as provided in Section 13 , whichever shall occur earlier.

2.6 Expenses of the Company . Other than the reimbursement of costs and expenses as provided herein and the fees described in Section 9.7 , no fees, costs or expenses shall be payable by the Company to any Member (or its Affiliates).

Section 3.

Purpose .

The purpose of the Company, subject in each case to the terms hereof, shall be to engage, directly or through a Subsidiary, in the business of acquiring, owning, operating, developing, renovating, repositioning, managing, leasing, selling, financing and refinancing the real estate and any real estate related investments (or portions thereof) consisting of (a) an approximately 480-unit multi-family complex located at 5501 Glenridge Drive NE, Atlanta, Georgia 30342, and to be hereafter commonly known as the “Glenridge Apartments” (the “ Property ”), which will be owned by the Company or a Subsidiary of the Company, and all other activities reasonably necessary to carry out such purpose.

Section 4.

Conditions .

4.1 Bluerock Conditions . The obligation of Bluerock to consummate the transactions contemplated herein and to make the initial Capital Contributions under Section 5.1 is subject to fulfillment of all of the following conditions on or prior to the closing date under the Purchase Agreement:

(a) Subject to the terms of the Cost Sharing Agreement, Carroll shall deposit in the Company’s bank account or the designated escrow account of Chicago Title Insurance Company, c/o Fidelity National Title Group, 5565 Glenridge Drive, Suite 300, Atlanta, Georgia 30342, Attn: Chris Valentine ( chris.valentine@fntg.com ) (“ Title Company ”), the aggregate amount of its initial Capital Contribution set forth on Exhibit A hereto;

(b) The Purchase Agreement shall have been assigned to the Company (or to one or more Subsidiaries of the Company);

(c) The Cost Sharing Agreement has been executed and Carroll and its affiliates are in full compliance with the terms thereof;

(d) The Management Agreement for the Property shall have been executed by the Company (or a Subsidiary of the Company) and Property Manager;

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(e) All of the representations and warranties of Carroll and Property Manager contained in this Agreement and the Collateral Agreements shall be true and correct as of the date hereof;

(f) The Company (or a Subsidiary of the Company) shall have borrowed (or be concurrently borrowing) the Loan with respect to the Property, as contemplated by the loan documents (the “ Loan Documents ”); and

(g) The form of Backstop Agreement shall have been approved by, and executed by, the applicable parties and delivered to Bluerock.

4.2 Carroll Conditions . The obligation of Carroll to consummate the transactions contemplated herein and to make the initial Capital Contributions under Section 5.1 is subject to fulfillment of all of the following conditions on or prior to the closing date under the Purchase Agreement:

(a) Subject to the terms of the Cost Sharing Agreement, Bluerock shall deposit into the Company’s bank account or Title Company’s designated escrow account the amount of its aggregate initial Capital Contribution set forth on Exhibit A hereto;

(b) The Purchase Agreement shall have been assigned to the Company (or to one or more Subsidiaries of the Company);

(c) The Cost Sharing Agreement has been executed and Bluerock and its affiliates are in full compliance with the terms thereof;

(d) The Company (or a Subsidiary of the Company) shall have borrowed (or be concurrently borrowing) the Loan with respect to the Property, contemplated by the Loan Documents;

(e) The Management Agreement for the Property shall have been executed between the Company (or a Subsidiary of the Company) and Property Manager;

(f) All of the representations and warranties of Bluerock contained in this Agreement and the Collateral Agreements shall be true and correct as of the date hereof; and

(g) The form of Backstop Agreement shall have been approved by, and executed by, the applicable parties and delivered to Carroll.

Section 5.

Capital Contributions, Loans, Percentage Interests and Capital Accounts .

5.1 Initial Capital Contributions . Subject to satisfaction of the conditions set forth in Section 4 , upon execution of this Agreement, Bluerock and Carroll shall each make an initial Capital Contribution to the Company of cash in an amount equal to the respective amounts set forth in Exhibit A attached hereto; provided, however, any funds advanced by Bluerock or Carroll (or their respective affiliates) pursuant to the terms of the Cost Sharing Agreement shall be credited against the applicable Member’s obligation and provided, further, in the case of Carroll, its initial Capital Contribution to the Company shall be credited with $341,250 for the agreed value of certain contractual rights and intangibles contributed to the Company, including the assignment of the purchase agreement to acquire the Property to the Company or one or more of its Subsidiaries. ¹ The initial Capital Contribution of the Members to the Company may include amounts for working capital.

¹ At closing of the acquisition of the Property, $341,250 shall be added to the required equity for closing and each Member shall be responsible for funding its pro-rata share of such amount at the closing as part of its Initial Capital Contribution according to its Percentage Interest; provided, Carroll’s required Initial Capital Contribution shall be net of the credit amount provided in Section 5.1.

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5.2 Additional Capital Contributions .

(a) Additional Capital Contributions may be called for from the Members (i) by either Member if the same is a Protective Capital Call, or (ii) as reasonably determined by the Management Committee, by written notice to the Members from time to time as and to the extent capital is necessary to effect an investment or expenditures for the Property, the Company, or its Subsidiaries. Except as otherwise agreed by the Members, such additional Capital Contributions shall be in an amount for each Member equal to the product of the amount of the aggregate Capital Contribution called multiplied by each Member’s then current Percentage Interest. Such additional Capital Contributions shall be payable by the Members to the Company upon the earlier of (i) twenty (20) days after written request from the Company, or (ii) the date when the Capital Contribution is required, as set forth in a written request from the Company.

(b) If a Member (a “ Defaulting Member ”) fails to make a Capital Contribution that is required as provided in Section 5.2(a) within the time frame required therein (the amount of the failed contribution and related loan shall be the “ Default Amount ”), the other Member, provided that it has made the Capital Contribution required to be made by it, in addition to any other remedies it may have hereunder or at law, shall have one or more of the following remedies:

(1) to advance to the Company on behalf of, and as a loan to the Defaulting Member, an amount equal to the Default Amount to be evidenced by a promissory note in form reasonably satisfactory to the non-failing Member (each such loan, a “ Default Loan ”). The Capital Account of the Defaulting Member shall be credited with the amount of such Default Amount attributable to a Capital Contribution and the aggregate of such amounts shall constitute a debt owed by the Defaulting Member to the non-failing Member. Any Default Loan shall bear interest at the rate of twenty percent (20%) per annum, but in no event in excess of the highest rate permitted by applicable laws (the “ Default Loan Rate ”), and shall be payable by the Defaulting Member on demand from the non-failing Member and from any Distributions due to the Defaulting Member hereunder. Interest on a Default Loan, to the extent unpaid, shall accrue and compound on a quarterly basis. A Default Loan shall be prepayable, in whole or in part, at any time or from time to time without penalty. Any such Default Loans shall be with full recourse to the Defaulting Member and shall be secured by the Defaulting Member’s interest in the Company including, without limitation, such Defaulting Member’s right to Distributions. In furtherance thereof, upon the making of any such Default Loan, the Defaulting Member hereby pledges, assigns and grants a security interest in its Interest to the non-failing Member and agrees to promptly execute such documents and statements reasonably requested by the non-failing Member to further evidence and secure such security interest. Any advance by the non-failing Member on behalf of a Defaulting Member pursuant to this Section 5.2(b)(1) shall be deemed to be a Capital Contribution made by the Defaulting Member except as otherwise expressly provided herein. All Distributions to the Defaulting Member hereunder shall be applied first to payment of any interest due under any Default Loan and then to principal until all amounts due thereunder are paid in full. While any Default Loan is outstanding, the Company shall be obligated to pay directly to the non-failing Member, for application to and until all Default Loans have been paid in full, the amount of (x) any Distributions payable to the Defaulting Member, and (y) any proceeds of the sale of the Defaulting Member’s Interest in the Company;

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(2) subject to any applicable thin capitalization limitations on indebtedness of the Company for U.S. federal income tax purposes, to treat the non-failing Member’s portion of such Capital Contribution as a loan to the Company (rather than a Capital Contribution) and to advance to the Company as a loan to the Company an amount equal to the Default Amount, which loan shall be evidenced by a promissory note in form reasonably satisfactory to the non-failing Member and which loan shall bear interest at the Default Loan Rate and be payable on a first priority basis by the Company from available Cash Flow and prior to any Distributions made to any Member. If each Member has loans outstanding to the Company under this provision, such loans shall be payable to each Member in proportion to the outstanding balances of such loans to each Member at the time of payment. Any advance to the Company pursuant to this Section 5.2(b)(2) shall not be treated as a Capital Contribution made by the Defaulting Member;

(3) to make an additional Capital Contribution to the Company equal to the Default Amount whereupon the Percentage Interests of the Members shall be recalculated to (i) increase the non-defaulting Member’s Percentage Interest by the percentage (“ Applicable Adjustment Percentage ”) determined by dividing one hundred fifty percent (150%) of the Default Amount by the sum of the Members’ Total Investment (taking into account the actual amount of such additional Capital Contribution) and by increasing its Total Investment solely for purposes of determining the Member’s Percentage Interest, by one and one-half of the amount of the Default Amount, and (ii) to reduce the Defaulting Member’s Percentage Interest by the Applicable Adjustment Percentage and by decreasing its Total Investment solely for purposes of determining the Member’s Percentage Interest by one-half of the amount of the Default Amount; or

(4) in lieu of the remedies set forth in subparagraphs (1), (2) or (3), revoke its portion of such additional Capital Contribution, whereupon the portion of the Capital Contribution made by the non-failing Member shall be returned within ten (10) days.

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(c) Notwithstanding the foregoing provisions of this Section 5.2 , no additional Capital Contributions shall be required from any Member if (i) the Company or any other Person shall be in default (or with notice or the passage of time or both, would be in default) in any material respect under any loan, indenture, mortgage, non-residential lease, agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company (or any of its Subsidiaries) or any of its properties or assets is or may be bound, (ii) any other Member, the Company or any of its Subsidiaries shall be insolvent or bankrupt or in the process of liquidation, termination or dissolution, (iii) any other Member, the Company or any of its Subsidiaries shall be subjected to any pending litigation (x) in which the amount in controversy exceeds $500,000, (y) which litigation is not being defended by an insurance company who would be responsible for the payment of any judgment in such litigation, and (z) which litigation if adversely determined could have a material adverse effect on such other Member and/or the Company or any of its Subsidiaries and/or could interfere with their ability to perform their obligations hereunder or under any Collateral Agreement, or (iv) there has been a material adverse change in (including, but not limited to, the financial condition of) any other Member (and/or its Affiliates) which, in such Member’s reasonable judgment, prevents such other Member (and/or its Affiliates) from performing, or substantially interferes with their ability to perform, their obligations hereunder or under any Collateral Agreement. If any of the foregoing events shall have occurred and any Member elects not to make a Capital Contribution on account thereof, then any other Member which has made its pro rata share of such Capital Contribution shall be entitled to a return of such Capital Contribution from the Company.

5.3 Percentage Ownership Interest . The Members shall have the initial percentage ownership interests (as the same are adjusted as provided in this Agreement, a “ Percentage Interest ”) in the Company set forth on Exhibit A immediately following the Capital Contributions provided for in Section 5.1 . The Percentage Interests of the Members in the Company shall be adjusted monthly, and if appropriate to reflect any pending adjustments that have been determined but not yet effected, prior to any request for Additional Capital Contributions pursuant to Section 5.2 or any distributions to Members pursuant to Section 6.1 , so that the respective Percentage Interests of the Members at any time shall be in proportion to their respective cumulative Total Investment made (or deemed to be made) pursuant to Sections 5.1 and 5.2 , as the same may be further adjusted pursuant to Section 5.2(b)(3) . Percentage Interests shall not be adjusted by Distributions made (or deemed made) to a Member.

5.4 Return of Capital Contribution . Except as approved by each of the Members, no Member shall have any right to withdraw or make a demand for withdrawal of the balance reflected in such Member’s Capital Account (as determined under Section 5.6 ) until the full and complete winding up and liquidation of the business of the Company.

5.5 No Interest on Capital . Interest earned on Company funds shall inure solely to the benefit of the Company, and no interest shall be paid upon any Capital Contributions nor upon any undistributed or reinvested income or profits of the Company.

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5.6 Capital Accounts . A separate capital account (the “ Capital Account ”) shall be maintained for each Member in accordance with Section 1.704-1(b)(2)(iv) of the Regulations. Without limiting the foregoing, the Capital Account of each Member shall be increased by (i) the amount of any Capital Contributions made by such Member, (ii) the amount of Income allocated to such Member and (iii) the amount of income or profits, if any, allocated to such Member not otherwise taken into account in this Section 5.6 . The Capital Account of each Member shall be reduced by (i) the amount of any cash and the fair market value of any property distributed to the Member by the Company (net of liabilities secured by such distributed property that the Member is considered to assume or take subject to), (ii) the amount of Loss allocated to the Member and (iii) the amount of expenses or losses, if any, allocated to such Member not otherwise taken into account in this Section 5.6 . The Capital Accounts of the Members shall not be increased or decreased pursuant to Regulations Section 1.704-1(b)(2)(iv)(f) to reflect a revaluation of the Company’s assets on the Company’s books in connection with any contribution of money or other property to the Company pursuant to Section 5.2 by existing Members. If any property other than cash is distributed to a Member, the Capital Accounts of the Members shall be adjusted as if such property had instead been sold by the Company for a price equal to its fair market value, the gain or loss allocated pursuant to Section 7 , and the proceeds distributed in the manner set forth in Section 6.1 or Section 13.3(d)(3) . No Member shall be obligated to restore any negative balance in its Capital Account. No Member shall be compensated for any positive balance in its Capital Account except as otherwise expressly provided herein. The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with the provisions of Regulations Section 1.704-1(b)(2) and shall be interpreted and applied in a manner consistent with such Regulations.

5.7 New Members . Upon approval by Bluerock and Carroll, the Company may issue additional Interests and thereby admit a new Member or Members, as the case may be, to the Company, only if such new Member (i) has delivered to the Company its Capital Contribution, (ii) has agreed in writing to be bound by the terms of any Collateral Agreement (including the Backstop Agreement) and this Agreement by becoming a party hereto, and (iii) has delivered such additional documentation as the Company shall reasonably require to so admit such new Member to the Company. Without the prior written consent of each then-current Member, a new Member may not be admitted to the Company if the Company would, or may, have in the aggregate more than one hundred (100) members. For purposes of determining the number of members under this Section 5.7 , a Person (the “ beneficial owner ”) indirectly owning an interest in the Company through a partnership, grantor trust or S corporation (as such terms are used in the Code) (the “ flow-through entity ”) shall be considered a member, but only if (i) substantially all of the value of the beneficial owner’s interest in the flow-through entity is attributable to the flow-through entity’s interest (direct or indirect) in the Company and (ii) in the sole discretion of the Management Committee, a principal purpose of the use of the flow-through entity is to permit the Company to satisfy the 100-member limitation.

Section 6.

Distributions .

6.1 Distribution of Distributable Funds

(a) The Management Committee shall calculate and determine the amount of Distributable Funds for each applicable period. Except as provided in Sections 5.2(b), 6.1 or 13.3 or otherwise provided hereunder, Distributable Funds, if any, shall be distributed to the Members, on a monthly basis based on a calendar year, so long as the Loan is outstanding. Thereafter, such distributions shall be made on the 15 ^th day of each month or from time to time as determined by the Management Committee .

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(b) Any Distributions otherwise payable to a Member under this Agreement shall be applied first to satisfy amounts due and payable on account of the indemnity and/or contribution obligations of such Member under this Agreement and/or any other agreement delivered by such Member to the Company or any other Member but shall be deemed distributed to such Member for purposes of this Agreement.

(c) During the first twenty four (24) months of the Initial Term (as defined in the Management Agreement), if Distributable Funds for any calendar quarter (to be determined as soon as reasonably practicable following the expiration of such calendar quarter) are insufficient to satisfy the Minimum Return for all Members for such calendar quarter, then the Subordinated Property Management Fee due to Property Manager for such calendar quarter pursuant to the Management Agreement shall be withheld from the Property Manager and treated as Distributable Funds payable to the Members, up to the amount necessary to satisfy the Minimum Return for all Members for such calendar quarter. The balance of any Subordinated Property Management Fee payable with respect to such calendar quarter, if any, shall be paid to Property Manager in accordance with the Property Management Agreement. For the avoidance of doubt, no portion of any Unsubordinated Property Management Fee shall be subject to this Section 6.1(c) . The portions of the Subordinated Property Management Fee withheld from the Property Manager and distributed to the Members pursuant to this Section shall be referred to herein as the “ Deferred Management Fee .” If Distributable Funds for any calendar quarter are independently sufficient to meet the Minimum Return for such quarter with respect to all Members after payment of the Property Management Fee to Property Manager with respect to such calendar quarter, then the Property Manager shall be entitled to payment of any existing Deferred Management Fee from any excess Distributable Funds (i.e. Distributable Funds remaining after payment of the current quarter’s Property Management Fee and the Minimum Return) from such calendar quarter prior to distribution of same to the Members, until either such excess Distributable Funds for such quarter are exhausted or all Deferred Management Fee have been paid to Property Manager, whichever first occurs. After the expiration of the first twenty four (24) months of the Initial Term: (i) prior to the twentieth (20 ^th ) day of the twenty-fifth (25 ^th ) month of the Initial Term, the Members shall mutually determine the balance remaining to be paid to the Members, if any, to satisfy the Minimum Return for the first twenty four (24) months of the Initial Term (the “Minimum Return Balance”), (ii) the current month’s Property Management Fee shall be paid on a monthly basis in accordance with the terms of the Management Agreement, and (iii) Distributable Funds remaining, if any, in each calendar month shall be distributed first, to the Members, until the Minimum Return Balance is reduced to zero, and second, to Property Manager until the balance of any Deferred Management Fee is reduced to zero. All Distributable Funds payable to the Members (including any Distributable Funds payable to the Members prior to payment of any Deferred Management Fee to Property Manager) shall be distributed according to the following priority:

(1) First, to the Members in proportion to their respective Percentage Interests until each Member shall realize through Distributions and actually receive the Preferred Return; and

(2) Second, the balance, if any, of such Distributable Funds remaining after the Distributions pursuant to (1) above shall be distributed as follows:

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if a Carroll Change Event has occurred, such Distributable Funds shall be distributed to the Members in proportion to their Percentage Interests; and

if a Carroll Change Event has not occurred, such Distributable Funds shall be distributed as follows: (A) first, an amount equal to thirty percent (30%) of such Distributable Funds shall be distributed to Carroll and an amount equal to seventy percent (70%) of such Distributable Funds shall be distributed to Bluerock until Bluerock shall have actually realized and received through Distributions the greater of (i) a fifteen percent (15%) Internal Rate of Return and (ii) a return on Bluerock Capital Contributions equal to a 1.5x multiple thereof and (B) thereafter, an amount equal to forty percent (40%) of such Distributable Funds shall be distributed to Carroll and an amount equal to sixty percent (60%) of such Distributable Funds shall be distributed to Bluerock.

6.2 Distributions in Kind . In the discretion of the Management Committee, Distributable Funds may be distributed to the Members in cash or in kind and Members may be compelled to accept a distribution of any asset in kind even if the percentage of that asset distributed to it exceeds a percentage of that asset that is equal to the percentage in which such Member shares in Distributions from the Company. In the case of all assets to be distributed in kind, the amount of the Distribution shall equal the fair market value of the asset distributed as determined by the Management Committee. In the case of a Distribution of publicly traded property, the fair market value of such property shall be deemed to be the average closing price for such property for the thirty (30) day period immediately prior to the Distribution, or if such property has not yet been publicly traded for thirty (30) days, the average closing price of such property for the period prior to the Distribution in which the property has been publicly traded.

Section 7.

Allocations .

7.1 Allocation of Net Income and Net Losses Other than in Liquidation . Except as otherwise provided in this Agreement, Net Income and Net Losses of the Company for each Fiscal Year shall be allocated among the Members in a manner such that, as of the end of such Fiscal Year and taking into account all prior allocations of Net Income and Net Losses of the Company and all Distributions made by the Company through such date, the Capital Account of each Member is, as nearly as possible, equal to the Distributions that would be made to such Member pursuant to Section 6.1 if the Company were dissolved, its affairs wound up and assets sold for cash equal to their tax basis (or book value in the case of assets that have been revalued in accordance with Section 704(b) of the Code), all Company liabilities were satisfied, and the net assets of the Company were distributed in accordance with Section 6.1 immediately after such allocation.

7.2 Allocation of Net Income and Net Losses in Liquidation . Net Income and Net Losses realized by the Company in connection with the liquidation of the Company pursuant to Section 13 shall be allocated among the Members in a manner such that, taking into account all prior allocations of Net Income and Net Losses of the Company and all Distributions made by the Company through such date, the Capital Account of each Member is, as nearly as possible, equal to the amount which such Member is entitled to receive pursuant to Section 13.3(d)(3) .

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7.3 U.S. Tax Allocations .

(a) Subject to Section 704(c) of the Code, for U.S. federal and state income tax purposes, all items of Company income, gain, loss, deduction and credit shall be allocated among the Members in the same manner as the corresponding item of income, gain, loss, deduction or credit was allocated pursuant to the preceding paragraphs of this Section 7 .

(b) In accordance with Code Section 704(c) and the Treasury regulations promulgated thereunder, income and loss with respect to any property contributed to the capital of the Company (including, if the property so contributed constitutes a partnership interest, the applicable distributive share of each item of income, gain, loss, expense and other items attributable to such partnership interest whether expressly so allocated or reflected in partnership allocations) shall, solely for U.S. federal income 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 U.S. federal income tax purposes and its Agreed Upon Value at the time of contribution. Such allocation shall be made in accordance with the “traditional method” set forth in Regulations Section 1.704-3(b) unless the Members unanimously agree to another permissible method under such Regulations.

(c) Any elections or other decisions relating to such allocations shall be made by the Members in any manner that reasonably reflects the purpose and intention of this Agreement. Allocations pursuant to this Section 7.3 are solely for purposes of U.S. federal, state and local income taxes and shall not affect, or in any way be taken into account in computing, any Member’s share of Net Income, Net Loss, other items or distributions pursuant to any provisions of this Agreement.

Section 8.

Books, Records, Tax Matters and Bank Accounts .

8.1 Books and Records . The books and records of account of the Company shall be maintained in accordance with industry standards and shall be based on the Property Manager Reports. The books and records shall be maintained at the Company’s principal office or at a location designated by the Management Committee, and all such books and records (and the dealings and other affairs of the Company and its Subsidiaries) shall be available to any Member at such location for review, investigation, audit and copying, at such Member’s sole cost and expense, during normal business hours on at least twenty-four (24) hours prior notice. In connection with such review, investigation or audit, such Member (and its representatives and agents) shall have the unfettered right to meet and consult with any and all employees of Property Manager (or any of their respective Affiliates) and to attend meetings and independently meet and consult with any and all third parties having dealings or any other relationship with the Company or any of its Subsidiaries or with Property Manager in respect of the Company or any of its Subsidiaries.

8.2 Reports and Financial Statements .

(a) Within thirty (30) days of the end of each Fiscal Year, the Manager shall cause each Member to be furnished with two sets of the following additional annual reports computed as of the last day of the Fiscal Year:

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(1) An unaudited balance sheet of the Company;

(2) An unaudited statement of the Company’s profit and loss; and

(3) A statement of the Members’ Capital Accounts and changes therein for such Fiscal Year.

(b) Within fifteen (15) days of the end of each quarter of each Fiscal Year, and provided that any such request was made prior to the end of the quarter, the Property Manager shall cause to be furnished to Bluerock such information as requested by Bluerock as is necessary for any reporting requirements of the SOIFs, BR Growth, or BR Growth II (to the extent any of such affiliates of Bluerock are hereafter a Member or direct or indirect owner of a Member of the Company) and any reporting requirements of 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 reasonably requested by Bluerock. Further, the Property 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.

(c) The Members acknowledge that the Property Manager is obligated to perform Property-related accounting and furnish Property-related accounting statements under the terms of the Management Agreement (the “ Property Manager Reports ”). Manager shall be entitled to rely on the Property Manager Reports with respect to its obligations under this Section 8 , and the Members acknowledge that the reports to be furnished shall be based on the Property Manager Reports, without any duty on the part of the Manager to further investigate the completeness, accuracy or adequacy of the Property Manager Reports.

8.3 Tax Matters Member . Bluerock is hereby designated as the “tax matters partner” of the Company and the Subsidiaries, as defined in Section 6231(a)(7) of the Code (the “ Tax Matters Member ”) and shall prepare or cause to be prepared all income and other tax returns of the Company and its Subsidiaries pursuant to the terms and conditions of Section 8.5 . Except as otherwise provided in this Agreement, all elections required or permitted to be made by the Company and its Subsidiaries under the Code or state tax law shall be timely determined and made by Bluerock after consultation with Carroll. The Members intend that the Company be treated as a partnership for U.S. federal, state and local tax purposes, and the Members will not elect or authorize any person to elect to change the status of the Company from that of a partnership for U.S. federal, state and local income tax purposes. Bluerock agrees to consult with Carroll with respect to any written notice of any material tax elections and any material inquiries, claims, assessments, audits, controversies or similar events received from any taxing authority. In addition, upon the request of any Member, the Company and each of its Subsidiaries shall make an election pursuant to Code Section 754 to adjust the basis of the Company’s property in the manner provided in Code Sections 734(b) and 743(b). The Company hereby indemnifies and holds harmless Bluerock from and against any claim, loss, expense, liability, action or damage resulting from its acting or its failure to take any action as the “tax matters partner” of the Company and its Subsidiaries, provided that any such action or failure to act does not constitute gross negligence or willful misconduct by Bluerock.

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8.4 Bank Accounts . All funds of the Company are to be deposited in the Company’s name in such bank account or accounts as may be designated by the Management Committee or in the Management Agreement and shall be withdrawn on the signature of such Person or Persons as the Management Committee may authorize.

8.5 Tax Returns . Bluerock shall cause to be prepared all income and other tax returns of the Company and its Subsidiaries required by applicable law and shall submit such returns to the Management Committee for its review, comment and approval at least twenty (20) 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, Manager 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.

8.6 Expenses . Notwithstanding any contrary provision of this Agreement, the Members acknowledge and agree that the reasonable expenses and charges incurred directly or indirectly by or on behalf of the Manager, Bluerock, Carroll or the Property Manager in connection with its obligations under this Section 8 will be reimbursed by the Company to the applicable party. Further, it is expressly understood and agreed that all reasonable expenses of Bluerock, Carroll and their principals and Affiliates associated with the Company or the Property, along with all accounting and administrative expenses for Carroll, shall be reimbursed by the Company, including without limitation, filing fees, tax returns, closing costs, due diligence and travel.

Section 9.

Management and Operations .

9.1 Management .

(a) The Company shall be managed by Bluerock (“ Manager ”), who shall have the authority to exercise all of the powers and privileges granted by the Act, any other law or this Agreement, together with any powers incidental thereto, and to take any other action not prohibited under the Act or other applicable law, so far as such powers or actions are necessary or convenient or related to the conduct, promotion or attainment of the business, purposes or activities of the Company. Manager shall manage the operations and affairs of the Company, subject to the oversight of the Management Committee. To the extent that Bluerock or a Bluerock Transferee Transfers all or a portion of its Interest in accordance with Section 12 to a Bluerock Transferee, such Bluerock Transferee may be appointed as the Manager under this Section 9.1(a) by Bluerock or a Bluerock Transferee then holding all or a portion of an Interest without any further action or authorization by any Member.

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(b) The Management Committee may appoint individuals to act on behalf of the Company with such titles and authority as determined from time to time by the Management Committee.

9.2 Management Committee .

(a) Bluerock and Carroll hereby establish a management committee (the “ Management Committee ”). The Management Committee shall consist of four (4) individuals appointed to act as “representatives” of the Member that appointed him or her (the “ Representatives ”) as follows: (i) Bluerock shall be entitled to designate two (2) Representatives to represent Bluerock; and (ii) Carroll shall be entitled to designate two (2) Representatives to represent Carroll. The initial members of the Management Committee are set forth on Exhibit A . Bluerock and Carroll each represents, warrants and covenants that the Representatives designated by them on Exhibit A have, and shall at all times have, the full power and authority to make decisions and vote as a member of the Management Committee, and that such Representatives’ votes as members of the Management Committee will be binding on each of them and any transferee of all or a portion of their Interest; unless and until such time as Bluerock or Carroll or their transferee notifies the other Member of a change in a Representative, after which time this sentence shall apply only with respect to the replacement Representative.

(b) Each member of the Management Committee shall hold office until death, resignation or removal at the pleasure of the Member that appointed him or her. If a vacancy occurs on the Management Committee, the Person with the right to appoint and remove such vacating Representative shall appoint his or her successor. A Member shall lose its right to have Representatives on the Management Committee, and its Representatives on the Management Committee shall be deemed to be automatically removed, as of the date on which such Member ceases to be a Member or as otherwise provided in this Agreement. If Bluerock or a Bluerock Transferee Transfers all or a portion of its Interest to a Bluerock Transferee pursuant to Section 12.2 , such Bluerock Transferee shall automatically, and without any further action or authorization by any Member, succeed to the rights and powers of Bluerock under this Section 9 as may be agreed to between Bluerock or the Bluerock Transferee which is transferring the Interest, on the one hand, and the Bluerock Transferee to which the Interest is being transferred, on the other hand, including the shared or unilateral right to appoint the Representatives that Bluerock was theretofore entitled to appoint pursuant to Section 9.2(a) .

(c) The Management Committee shall meet once every quarter (unless waived by mutual agreement of the Members) and at such other times as may be necessary for the conduct of the Company’s business on at least five (5) days prior written notice of the time and place of such meeting given by any Representative. Notice of regular meetings of the Management Committee is not required. Representatives may waive in writing the requirements for notice before, at or after a special meeting, and attendance at such a meeting without objection by a Representative shall be deemed a waiver of such notice requirement.

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(d) The Management Committee shall have the right, but not the obligation, to elect one of the Representatives or another person to serve as Secretary of the Management Committee. Such person shall hold office until his or her death, resignation or removal by a vote of the Management Committee. The Secretary or a person designated by him or her shall take written minutes of the proceedings of the meetings of the Management Committee, and such minutes shall be filed with the records of the Company.

(e) The only Representatives required to constitute a quorum for a meeting of the Management Committee shall be one (1) Representative appointed by Bluerock and one (1) Representative appointed by Carroll; provided, however, that if Carroll has not appointed at least one (1) Representative to the Management Committee at the time of such meeting (for example, if each Carroll Representative has been removed and not replaced), then a quorum for a meeting of the Management Committee shall be one (1) Representative appointed by Bluerock. Each of the two (2) Representatives appointed by Bluerock shall be entitled to cast two (2) votes on any matter that comes before the Management Committee and each of the Representatives appointed by Carroll 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 shall require the affirmative vote (including votes cast by proxy) of at least a majority of the votes of the Representatives then in office voting at a duly held meeting of the Management Committee.

(f) 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 9 shall constitute presence in person at such meeting.

(g) 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 the Representatives having not less than the minimum 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.

(h) Except as otherwise expressly provided in this Agreement, none of the Members or their Representatives (in their capacities as members of the Management Committee) only, shall have any duties or liabilities to the Company or any other Member (including any fiduciary duties), whether or not such duties or liabilities otherwise arise or exist in law or in equity, and each Member hereby expressly waives any such duties or liabilities; provided , however , that this Section 9.2(h) shall not eliminate or limit the liability of such Representatives or the Members (A) for acts or omissions that involve fraud, intentional misconduct or a knowing and culpable violation of law, or (B) for any transaction not permitted or authorized under or pursuant to this Agreement from which such Representative or Member derived a personal benefit unless the Management Committee has approved in writing such transaction in accordance with this Agreement; provided , further , however , that the duty of care of each of such Representatives and the Members is to not act with fraud, intentional misconduct or a knowing and culpable violation of law. Except as provided in this Agreement, whenever in this Agreement a Representative of a Member and/or a Member is permitted or required to make a decision affecting or involving the Company, any Member or any other Person, such Representative and/or such Member shall be entitled to consider only such interests and factors as he, she or it desires, including a particular Member’s interests, and shall, to the fullest extent permitted by applicable law, have no duty or obligation to give any consideration to any interest of or factors affecting the Company or any Member.

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9.3 Annual Business Plan .

(a) The initial Annual Business Plan for the period from the date of this Agreement through the end of calendar year 2016, which is deemed approved by the Property Manager and the Owner with respect to the Property, and is attached hereto as Exhibit D and is incorporated herein for all intents and purposes under this Agreement (the “ Initial Business Plan ”). The foregoing notwithstanding, the Manager has also delivered to Owner on or before September 23, 2016, the proposed Annual Business Plan for the calendar year 2017.

(b) In addition to the Annual Business Plan for calendar year 2017 prepared by the Property Manager and delivered to Owner prior to the date of this Agreement in accordance with the preceding Section, Property Manager shall prepare the Annual Business Plan for the calendar year 2018 for the operation of the Property for the Owner’s review and approval, no later than September 15 of the immediately preceding year for the 2018 calendar year (and any subsequent) Annual Business Plan. If final approval of an Annual Business Plan (including the 2017 Annual Business Plan) by the Owner has not been given by the beginning of the year to which such proposed Annual Business Plan relates, Property Manager shall operate the Property on the basis of the previous year’s approved Annual Business Plan adjusted by (i) assuming that the revenue from the Property will increase to 103% of the revenues collected in the prior year, (ii) assuming that the Controllable Expenses will increase to 103% of the amount of the actual Controllable Expenses incurred in the prior year, (iii) increasing all Uncontrollable Expenses by any anticipated or known increases in such Uncontrollable Expenses, and (iv) including any Emergency Expenditure. Notwithstanding the foregoing to the contrary, if, prior to the commencement of calendar year 2017, the parties have not agreed on the budget for capital expenditures at the Property in the Annual Business Plan for calendar year 2017, there shall be no budgeted capital expenditures for calendar year 2017; provided, however, that any incomplete capital projects commenced in calendar year 2016 and contemplated in the Initial Business Plan shall be funded as provided in the Initial Business Plan until such capital projects are completed.

(c) If Property Manager and the Owner agreed to an Annual Business Plan for calendar year 2018 in accordance with subsection (b) above, then the Annual Business Plan for calendar year 2019 shall also be determined in accordance with the applicable provisions of subsection (b) above. If, however, Property Manager and the Owner were unable to agree to an Annual Business Plan for calendar year 2018, then such Owner may establish the Annual Business Plan for calendar year 2019, without Property Manager’s consent.

(d) For the Annual Business Plan for calendar years 2020 and all subsequent calendar years, if applicable, Property Manager shall have the right to prepare and propose an Annual Business Plan for such calendar year on or prior to September 15 of the immediately preceding year (without obligation to do so), and the Owner may, regardless of the information contained in Property Manager’s proposal, establish the Annual Business Plan for the applicable calendar year, without Property Manager’s consent.

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(e) Property Manager and the Company, on behalf of the Owner, each acknowledge and agree that, in establishing the Annual Business Plan in accordance with this Section 9.3 , each shall be obligated to act reasonably and in good faith, taking into account past performance of the Property, leasing trends and competitive properties within the market where the Property is located, the age of the Property and the units at the time such Annual Business Plan is established, and such other factors as reasonably prudent owners and managers of multifamily assets substantially similar to the Property would take into account in order to maximize revenue therefrom.

(f) No Material Deviations (as defined herein) from any item in an Annual Business Plan approved in accordance with the terms herein shall be made by Property Manager without the prior approval of the Management Committee, to the extent required hereunder. The Property Manager shall provide quarterly updates to each Annual Business Plan, solely for informational purposes. Each Annual Business Plan shall include the information set forth in Exhibit B . The Company, for itself and on behalf of the Owner, will consider a proposed Annual Business Plan in accordance with the terms hereof and will consult with Property Manager prior to the commencement of the forthcoming calendar year in order to agree on an Annual Business Plan for such calendar year. In no event shall the Company, acting on behalf of an Owner, have the right to modify (or alter the treatment of) any Annual Business Plan to reduce the Property Management Fee or Reimbursable Expenses otherwise due. In no event shall Property Manager be deemed in default under any Management Agreement if such changes by the Company, acting on behalf of the Owner, to an Annual Business Plan cause Property Manager to have insufficient funds to perform its obligations thereunder. Property Manager agrees to use commercially reasonable efforts to ensure that the actual costs of maintaining and operating the Property shall not exceed the amount reasonably necessary and, in any event, will not exceed the applicable Annual Business Plan either in total amount or in any one accounting category. Notwithstanding anything to the contrary, Property Manager shall secure the Company’s, on behalf of the Owner, prior written approval for any expenditure that will result in an excess of the annual budgeted amount set forth in the Annual Business Plan in any one accounting category by the lesser of ten percent (10%) or $10,000 or $25,000 in the aggregate for all categories (a “ Material Deviation ”). Property Manager shall promptly advise and inform the Company, acting on behalf of the Owner, of any transaction, notice, event or proposal directly relating to the management and operation of the Property which does or is likely to significantly affect, either adversely or favorably, the Property, other assets of the Owner or cause a Material Deviation from the applicable Annual Business Plan. Nothing contained herein shall in any way diminish the obligations or duties of Property Manager hereunder.

(g) Notwithstanding the terms of Section 9.3(a) through Section 9.3(f) above, (i) any Annual Business Plan may, at any time, be amended upon unanimous approval by the Members, and (ii) failure on the part of the Members to agree on any such Annual Business Plan (or any amendment thereto) shall not constitute the failure to obtain agreement on a Major Decision and shall not entitle either Member to exercise the rights under Section 15 applicable to a failure to obtain agreement on Major Decisions.

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(h) For all purposes of this Section 9.3 , decisions on behalf of the Owner shall be made by the Management Committee.

9.4 Implementation of Plan by Property Manager . Property Manager shall, subject to the limitations contained herein, the availability of operating revenues and other cash flow and any other matters outside of the reasonable control of Property Manager, implement and shall not vary or modify the then applicable Annual Business Plan without the prior written approval of the Management Committee. Property Manager shall promptly advise and inform the Management Committee of any transaction, notice, event or proposal directly relating to the management and operation of the Property, other assets of the Company or the Company or any Subsidiary of the Company which does or is likely to significantly affect, either adversely or favorably, such Property, other assets of the Company or the Company or such Subsidiary or cause a significant deviation from the applicable Annual Business Plan. Nothing contained herein shall in any way diminish the obligations or duties of Property Manager hereunder.

9.5 Affiliate Transactions . No agreement shall be entered into by the Company or any Subsidiary with a Member or any Affiliate of a Member and no decision shall be made in respect of any such agreement (including, without limitation, the enforcement or termination thereof) unless such agreement or related decision shall have been approved in writing by all Members. Without limiting the foregoing, any such agreement shall be on arm’s length terms and conditions, be terminable on fifteen (15) days’ notice without penalty and the terms and conditions of such agreement shall be disclosed to all Representatives prior to the execution and delivery thereof. Further, the written approval of Bluerock shall be required prior to the use of the name “Bluerock” in connection with any matter or transaction.

9.6 Other Activities .

(a) Right to Participation in Other Member Ventures . Neither the Company nor any Member (or any Affiliate of any Member) shall have any right by virtue of this Agreement either to participate in or to share in any other now existing or future ventures, activities or opportunities of any of the other Members or their Affiliates, or in the income or proceeds derived from such ventures, activities or opportunities.

(b) Limitation on Actions of Members; Binding Authority . No Member shall, without the prior written consent of the other Members, take any action on behalf of, or in the name of, the Company, or enter into any contract, agreement, commitment or obligation binding upon the Company, or, in its capacity as a Member or Manager of the Company, perform any act in any way relating to the Company or the Company’s assets, except in a manner and to the extent consistent with the provisions of this Agreement.

9.7 Management Agreement .

(a) Independent Contractor . CMG, as Property Manager, has agreed to provide management services to the Company (or a Subsidiary of the Company) with respect to the Property on the terms set forth in the Management Agreement; and it is agreed that Property Manager shall provide such management services to the Company (or a Subsidiary of the Company) as an independent contractor.

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(b) Management and Oversight Fees . The Company (or a Subsidiary of the Company) has entered into the Management Agreement with Property Manager (which Management Agreement shall be updated and supplemented from time to time) pursuant to which Property Manager will provide the management services described therein to the Company (or a Subsidiary of the Company). Pursuant to the Management Agreement and subject to the terms of the Loan Documents, Property Manager will be entitled to receive a net property management fee equal to 3.00% of Gross Receipts (as defined in the Management Agreement) (the “ Property Management Fee ”); provided, however, that the payment and amount of the Property Management Fee shall be subject to the restrictions, limitations and language regarding the deferral and subordination of such fee as described in Section 4(a) of the Management Agreement and in Section 6.1(c) herein. CMG, as Property Manager, shall also be entitled to a construction management fee of five percent (5.0%) of any expenses incurred in connection with the original capital expenditure and plan attached as Exhibit G to the Management Agreement. Any additional support (and any applicable compensation with respect thereto) for any capital improvements beyond those set forth on Exhibit G to the Management Agreement shall be agreed to in advance by Owner and the Property Manager. If CMG has been terminated as the Property Manager for Cause with respect to the Property, then Bluerock will be entitled to retain a new Property Manager and receive an oversight fee equal to 1.0% of the Gross Receipts for such Property (the “ Oversight Fee ”). It is understood that if CMG is terminated as the Property Manager without Cause, Bluerock shall not be entitled to the Oversight Fee, unless Bluerock purchases the Interest of Carroll pursuant to Section 15 or otherwise by agreement of the parties. The foregoing shall not be deemed to imply that Bluerock will have any unilateral right to purchase the Interest of Carroll solely on account of the termination of CMG as Property Manager.

(1) The Management Agreement shall be terminable as provided under its terms and conditions by the Company or Bluerock or, as long as the Property Manager is CMG, by Property Manager.

(2) Notwithstanding anything to the contrary in this Section 9.7(c) , no termination of a Management Agreement or buyout of the other party’s Interest in the Company shall be permitted unless permitted or approved under any applicable Collateral Agreement or under the Loan Documents.

(d) Delegation . Any delegation of the responsibilities of Property Manager or the subcontracting for such services will be subject to the prior written consent of the Management Committee. Separate agreements may also be entered into with Carroll, Bluerock, their respective Affiliates, or with third parties for certain services to be provided to the Company (or a Subsidiary of the Company), including leasing, construction management, property management, asset management, technology services, etc. Such arrangements shall be at market rates, and shall be entered into only with the prior written approval of the Management Committee, consistent with an approved budget and business plan for each asset. Unless otherwise agreed, all such contracts will be payable on a monthly basis and will be terminable upon thirty (30) days’ notice for any reason or no reason.

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9.8 Operation in Accordance with REOC/REIT Requirements .

(a) The Members acknowledge that Bluerock or one or more of its Affiliates (a “ BR Affiliate ”) intends or may intend 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 in such case be operated in a manner that will enable Bluerock and such BR Affiliate to so qualify. Notwithstanding anything herein to the contrary, the Company and its Subsidiaries shall not take, or refrain from taking, any action that Bluerock notifies the Company would result in Bluerock or a BR Affiliate from failing to qualify as a REOC. The Members acknowledge and agree that Bluerock may assign any or all of its rights or powers under this Agreement as Manager, to designate committee representatives, to provide consents and approvals, or any other rights or powers to one or more of its BR Affiliates as it deems appropriate, and the exercise of any such rights or powers by a BR Affiliate shall have full force and effect under this Agreement without the need for any further consent or approval. Except as disclosed to Bluerock, Carroll (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", and (b) shall comply with any reasonable requirements specified by Bluerock in order to ensure compliance with this Section 9.8.

(b) 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 Manager 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.

(c) 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:

(i) Entering into any lease, license, concession or other agreement or permitting any sublease, license, concession or other agreement that provides for rent or other payment based in whole or in part on the income or profits of any person, excluding for this purpose a lease that provides for rent based in whole or in part on a fixed percentage or percentages of gross receipts or gross sales of any person without reduction for any costs of the lessee (and in the case of a sublease, without reduction for any sublessor costs);

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(ii) Leasing personal property, excluding for this purpose a lease of personal property that is entered into in connection with a lease of real property where the rent attributable to the personal property is less than 15% of the total rent provided for under the lease;

(iii) Acquiring or holding any debt investments, excluding for these purposes “debt” solely between wholly-owned Subsidiaries of the Company, unless (I) the amount of interest income received or accrued by the Company under such loan does not, directly or indirectly, depend in whole or in part on the income or profits of any person, and (II) the debt is fully secured by mortgages on real property or on interests in real property. Notwithstanding anything to the contrary herein, in the case of debt issued to the Company by a Subsidiary which is treated as a “taxable REIT subsidiary” of the REIT Member, such debt shall be secured by a mortgage or similar security interest, or by a pledge of the equity ownership of a subsidiary of such taxable REIT subsidiary;

(iv) Acquiring or holding, directly or indirectly, more than 10% of the outstanding securities of any one issuer (by vote or value) other than an entity which either (i) is taxable as a partnership or a disregarded entity for United States federal income tax purposes, (ii) has properly elected to be a taxable REIT subsidiary of the REIT Member by jointly filing with REIT, IRS Form 8875, or (iii) has properly elected to be a real estate investment trust for U.S. federal income tax purposes;

(v) Entering into any agreement where the Company receives amounts, directly or indirectly, for rendering services to the tenants of any property that is owned, directly or indirectly, by the Company other than (i) amounts received for services that are customarily furnished or rendered in connection with the rental of real property of a similar class in the geographic areas in which the Property is located where such services are either provided by (A) an Independent Contractor (as defined in Section 856(d)(3) of the Code) who is adequately compensated for such services and from which the Company or REIT Member do not, directly or indirectly, derive revenue or (B) a taxable REIT subsidiary of REIT Member who is adequately compensated for such services or (ii) amounts received for services that are customarily furnished or rendered in connection with the rental of space for occupancy only (as opposed to being rendered primarily for the convenience of the Property’s tenants);

(vi) Entering into any agreement where a material amount of income received or accrued by the Company under such agreement, directly or indirectly, does not qualify as either (i) “rents from real property” or (ii) “interest on obligations secured by mortgages on real property or on interests in real property,” in each case as such terms are defined in Section 856(c) of the Code;

(vii) Holding cash of the Company available for operations or distribution in any manner other than a traditional bank checking or savings account;

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(viii) Selling or disposing of any property, subsidiary or other asset of the Company prior to (i) the completion of a two (2) year holding period with such period to begin on the date the Company acquires a direct or indirect interest in such property and begins to hold such property, subsidiary or asset for the production of rental income, and (ii) the satisfaction of any other requirements under Section 857 of the Code necessary for the avoidance of a prohibited transaction tax on the REIT; or

(ix) Failing to make current cash distributions to REIT Member each year in an amount which does not at least equal the taxable income allocable to REIT Member for such year; provided, however, any such cash distributions shall be made in accordance with the priorities set forth in Section 6.1(c).

Notwithstanding the foregoing provisions of this Section 9.8(c), the Company may enter into a REIT Prohibited Transaction if it receives the prior written approval of the REIT Member specifically acknowledging that the REIT Member is approving a REIT Prohibited Transaction pursuant to this Section 9.8(c). For purposes of this Section 9.8(c), “REIT Prohibited Transactions” shall mean any of the actions specifically set forth in Sections 9.8(c)(i) through (c)(ix) as well as any action of which the Company receives notice from Bluerock or a REIT Member that such action would result in a REIT Member losing its REIT status under IRC Section 856 or would cause such REIT Member to be subject to any punitive taxation pursuant to IRC Section 857(b)(6). The Loan or any loan contemplated by Section 5.2(b) shall not be considered a REIT Prohibited Transaction.

9.9 FCPA .

(a) 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.

(b) 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.

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(c) 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.

Section 10.

Confidentiality .

10.1 Any information relating to a Member’s business, operation or finances which are proprietary to, or considered proprietary by, a Member are hereinafter referred to as “Confidential Information”. All Confidential Information in tangible form (plans, writings, drawings, computer software and programs, etc.) or provided to or conveyed orally or visually to a receiving Member, shall be presumed to be Confidential Information at the time of delivery to the receiving Member. All such Confidential Information shall be protected by the receiving Member from disclosure with the same degree of care with which the receiving Member protects its own Confidential Information from disclosure. Each Member agrees: (i) not to disclose such Confidential Information to any Person except to those of its employees or representatives who need to know such Confidential Information in connection with the conduct of the business of the Company and who have agreed to maintain the confidentiality of such Confidential Information and (ii) neither it nor any of its employees or representatives will use the Confidential Information for any purpose other than in connection with the conduct of the business of the Company; provided that such restrictions shall not apply if such Confidential Information is or hereafter becomes public, other than by breach of this Agreement; was already in the receiving Member’s possession prior to any disclosure of the Confidential Information to the receiving Member by the divulging Member; or has been or is hereafter obtained by the receiving Member from a third party not bound by any confidentiality obligation with respect to the Confidential Information; provided , further , that nothing herein shall prevent any Member from disclosing any portion of such Confidential Information (1) to the Company and allowing the Company to use such Confidential Information in connection with the Company’s business, (2) pursuant to judicial order or in response to a governmental inquiry, by subpoena or other legal process, but only to the extent required by such order, inquiry, subpoena or process, and only after reasonable notice to the original divulging Member, (3) as necessary or appropriate in connection with or to prevent the audit by a governmental agency of the accounts of Carroll or Bluerock, (4) in order to initiate, defend or otherwise pursue legal proceedings between the parties regarding this Agreement, (5) necessary in connection with a Transfer of an Interest permitted hereunder or (6) to a Member’s respective attorneys or accountants or other representatives.

10.2 The Members and their Affiliates shall each act to safeguard the secrecy and confidentiality of, and any proprietary rights to, any non-public information relating to the Company and its business, except to the extent such information is required to be disclosed by law or reasonably necessary to be disclosed in order to carry out the business of the Company. Each Member may, from time to time, provide the other Members written notice of its non-public information which is subject to this Section 10.2 .

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10.3 Without limiting any of the other terms and provisions of this Agreement (including, without limitation, Section 9.6 ), to the extent a Member (the “ Pursuer ”) provides the other Member with information relating to a possible investment opportunity then being actively pursued by the Pursuer on behalf of the Company, the other Member receiving such information shall not use such information to pursue such investment opportunity for its own account to the exclusion of the Pursuer so long as the Pursuer is actively pursuing such opportunity on behalf of the Company and shall not disclose any Confidential Information to any Person (except as expressly permitted hereunder) or take any other action in connection therewith that is reasonably likely to cause damage to the Pursuer.

Section 11.

Representations and Warranties .

11.1 In General . As of the date hereof, each of the Members hereby makes each of the representations and warranties applicable to such Member as set forth in Section 11.2 . Such representations and warranties shall survive the execution of this Agreement.

11.2 Representations and Warranties . Each Member hereby represents and warrants that:

(a) Due Incorporation or Formation; Authorization of Agreement . Such Member is a corporation duly organized or a partnership or limited liability company duly formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation and has the corporate, partnership or company power and authority to own its property and carry on its business as owned and carried on at the date hereof and as contemplated hereby. Such Member is duly licensed or qualified to do business and in good standing in each of the jurisdictions in which the failure to be so licensed or qualified would have a material adverse effect on its financial condition or its ability to perform its obligations hereunder. Such Member has the corporate, partnership or company power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution, delivery and performance of this Agreement has been duly authorized by all necessary corporate, partnership or company action. This Agreement constitutes the legal, valid and binding obligation of such Member.

(b) No Conflict with Restrictions; No Default . Neither the execution, delivery or performance of this Agreement nor the consummation by such Member (or any of its Affiliates) of the transactions contemplated hereby (i) does or will conflict with, violate or result in a breach of (or has conflicted with, violated or resulted in a breach of) any of the terms, conditions or provisions of any law, regulation, order, writ, injunction, decree, determination or award of any court, any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator, applicable to such Member or any of its Affiliates, (ii) does or will conflict with, violate, result in a breach of or constitute a default under (or has conflicted with, violated, resulted in a breach of or constituted a default under) any of the terms, conditions or provisions of the articles of incorporation, bylaws, partnership agreement or operating agreement of such Member or any of its Affiliates or of any material agreement or instrument to which such Member or any of its Affiliates is a party or by which such Member or any of its Affiliates is or may be bound or to which any of its properties or assets is subject, (iii) does or will conflict with, violate, result in (or has conflicted with, violated or resulted in) a breach of, constitute (or has constituted) a default under (whether with notice or lapse of time or both), accelerate or permit the acceleration of (or has accelerated) the performance required by, give (or has given) to others any material interests or rights or require any consent, authorization or approval under any indenture, mortgage, lease, agreement or instrument to which such Member or any of its Affiliates is a party or by which such Member or any of its Affiliates or any of their properties or assets is or may be bound or (iv) does or will result (or has resulted) in the creation or imposition of any lien upon any of the properties or assets of such Member or any of its Affiliates.

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(c) Governmental Authorizations . Any registration, declaration or filing with, or consent, approval, license, permit or other authorization or order by, or exemption or other action of, any governmental, administrative or regulatory authority, domestic or foreign, that was or is required in connection with the valid execution, delivery, acceptance and performance by such Member under this Agreement or consummation by such Member (or any of its Affiliates) of any transaction contemplated hereby has been completed, made or obtained on or before the date hereof.

(d) Litigation . There are no actions, suits, proceedings or investigations pending, or, to the knowledge of such Member or any of its Affiliates, threatened against or affecting such Member or any of its Affiliates or any of their properties, assets or businesses in any court or before or by any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation could lead to any action, suit or proceeding which if adversely determined could) reasonably be expected to materially impair such Member’s ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Member; such Member or any of its Affiliates has not received any currently effective notice of any default, and such Member or any of its Affiliates is not in default, under any applicable order, writ, injunction, decree, permit, determination or award of any court, any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could reasonably be expected to materially impair such Member’s (or any of its Affiliate’s) ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition of such Member.

(e) Investigation . Such Member is acquiring its Interest based upon its own investigation, and the exercise by such Member of its rights and the performance of its obligations under this Agreement will be based upon its own investigation, analysis and expertise. Such Member is a sophisticated investor possessing an expertise in analyzing the benefits and risks associated with acquiring investments that are similar to the acquisition of its Interest.

(f) Broker . No broker, agent or other person acting as such on behalf of such Member was instrumental in consummating this transaction and that no conversations or prior negotiations were had by such party with any broker, agent or other such person concerning the transaction that is the subject of this Agreement.

(g) Investment Company Act . Neither such Member nor any of its Affiliates is, nor will the Company as a result of such Member holding an interest therein be, an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940, as amended.

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(h) Securities Matters .

(1) None of the Interests are registered under the Securities Act or any state securities laws. Such Member understands that the offering, issuance and sale of the Interests are intended to be exempt from registration under the Securities Act, based, in part, upon the representations, warranties and agreements contained in this Agreement. Such Member is an “accredited investor” as such term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

(2) Neither the Securities and Exchange Commission nor any state securities commission has approved the Interests or passed upon or endorsed the merits of the offer or sale of the Interests. Such Member is acquiring the Interests solely for such Member’s own account for investment and not with a view to resale or distribution thereof in violation of the Securities Act.

(3) Such Member is unaware of, and in no way relying on, any form of general solicitation or general advertising in connection with the offer and sale of the Interests, and no Member has taken any action which could give rise to any claim by any person for brokerage commissions, finders’ fees (without regard to any finders’ fees payable by the Company directly) or the like relating to the transactions contemplated hereby.

(4) Such Member is not relying on the Company or any of its officers, directors, employees, advisors or representatives with regard to the tax and other economic considerations of an investment in the Interests, and such Member has relied on the advice of only such Member’s advisors.

(5) Such Member understands that the Interests may not be sold, hypothecated or otherwise disposed of unless subsequently registered under the Securities Act and applicable state securities laws, or an exemption from registration is available. Such Member agrees that it will not attempt to sell, transfer, assign, pledge or otherwise dispose of all or any portion of the Interests in violation of this Agreement.

(6) Such Member has adequate means for providing for its current financial needs and anticipated future needs and possible contingencies and emergencies and has no need for liquidity in the investment in the Interests.

(7) Such Member has significant prior investment experience, including investment in non-listed and non-registered securities. Such Member is knowledgeable about investment considerations and has a sufficient net worth to sustain a loss of such Member’s entire investment in the Company in the event such a loss should occur. Such Member’s overall commitment to investments which are not readily marketable is not excessive in view of such Member’s net worth and financial circumstances and the purchase of the Interests will not cause such commitment to become excessive. The investment in the Interests is suitable for such Member.

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(8) Such Member represents to the Company that the information contained in this subparagraph (h) and in all other writings, if any, furnished to the Company with regard to such Member (to the extent such writings relate to its exemption from registration under the Securities Act) is complete and accurate and may be relied upon by the Company in determining the availability of an exemption from registration under federal and state securities laws in connection with the sale of the Interests.

Section 12.

Sale, Assignment, Transfer or other Disposition .

12.1 Prohibited Transfers . Except as otherwise provided in this Section 12 , Sections 5.2(b) , 15.1 and 15.2 , or as approved by the Management Committee, no Member shall Transfer all or any part of its Interest, whether legal or beneficial, in the Company, and any attempt to so Transfer such Interest (and such Transfer) shall be null and void and of no effect. Notwithstanding the foregoing, either Member shall have the right, with the consent of the other Member, at any time to pledge to a lender or creditor, directly or indirectly, all or any part of its Interest in the Company for such purposes as it deems necessary in the ordinary course of its business and operations.

12.2 Affiliate Transfers .

(a) Subject to the provisions of Section 12.2(b) 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 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 Interest. If such Affiliate shall thereafter cease being an Affiliate of such Member while such Affiliate holds such 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 any Collateral Agreement.

(b) Notwithstanding anything to the contrary contained in this Agreement, the following Transfers shall not require the approval set forth in Section 12.2(a) :

(1) Any Transfer by Carroll of up to one hundred percent (100%) of its Interest to any Affiliate of Carroll Parent (a “ Carroll Transferee ”), it being expressly understood and agreed that transfers of ownership interests in Carroll shall not be prohibited as long as at least one of the Key Individuals (collectively or individually) remains actively involved in the operation and management of Carroll (to the extent that it continues to hold, or control, any interest in the Company), Carroll Parent and any Carroll Transferee; and

(2) Any Transfer by Bluerock or a Bluerock Transferee of up to one hundred percent (100%) of its Interest to any Affiliate of Bluerock, including but not limited to (A) BR Growth or any Person that is directly or indirectly owned by BR Growth; (B) BR SOIF II or any Person that is directly or indirectly owned by BR SOIF II; (C) BR SOIF III or any Person that is directly or indirectly owned by BR SOIF III; (D) BR REIT or any Person that is directly or indirectly owned by BR REIT; or (E) BR Growth II, or any Person that is directly or indirectly owned by BR Growth II (collectively, a “ Bluerock Transferee ”);

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provided however, as to subparagraphs (b)(1) and (b)(2), and as to subparagraph (a), no Transfer shall be permitted and shall be void ab initio if it shall violate any “Transfer” provision of the Loan Documents or any applicable Collateral Agreement with third party lenders.

(c) Upon the execution by any such Carroll Transferee or Bluerock Transferee of such documents necessary to admit such party into the Company and to cause the Carroll Transferee or Bluerock Transferee (as applicable) to become bound by this Agreement, the Carroll Transferee or Bluerock Transferee (as applicable) shall become a Member, without any further action or authorization by any Member.

(d) The Transfer of any interest in Manager and any transferee of an interest in Manager shall be recognized and permitted under this Agreement and by the Members, without any further action or authorization by any Member.

12.3 Admission of Transferee; Partial Transfers . Notwithstanding anything in this Section 12 to the contrary and except as provided in Section 5.2(b) , no Transfer of Interests in the Company shall be permitted unless the potential transferee is admitted as a Member under this Section 12.3 :

(a) If a Member Transfers all or any portion of its 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

(b) Notwithstanding the foregoing, any Transfer or purported Transfer of any 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 Interest, if the Management Committee determines in its sole discretion that:

(1) the Transfer would require registration of any Interest under, or result in a violation of, any federal or state securities laws;

(2) the Transfer would result in a termination of the Company under Code Section 708(b); provided, however, that any such determination under this Section 12.3(b)(2) shall require the reasonable determination and approval of at least one (1) Representative appointed by Carroll.

(3) as a result of such Transfer the Company would be required to register as an investment company under the Investment Company Act of 1940, as amended, or any rules or regulations promulgated thereunder;

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(4) if as a result of such Transfer the aggregate value of Interests held by “benefit plan investors” including at least one benefit plan investor that is subject to ERISA, could be “significant” (as such terms are defined in U.S. Department of Labor Regulation 29 C.F.R. 2510.3-101(f)(2)) with the result that the assets of the Company could be deemed to be “plan assets” for purposes of ERISA;

(5) as a result of such Transfer, the Company would or may have in the aggregate more than one hundred (100) members and material adverse federal income tax consequences would result to a Member. For purposes of determining the number of members under this Section 12.3(b)(5) , a Person (the “ beneficial owner ”) indirectly owning an interest in the Company through a partnership, grantor trust or S corporation (as such terms are used in the Code) (the “ flow-through entity ”) shall be considered a member, but only if (i) substantially all of the value of the beneficial owner’s interest in the flow-through entity is attributable to the flow-through entity’s interest (direct or indirect) in the Company and (ii) in the sole discretion of the Management Committee, a principal purpose of the use of the flow-through entity is to permit the Company to satisfy the 100-member limitation; or

(6) the transferor failed to comply with the provisions of Sections 12.2(a) or (b) .

The Management Committee may require the provision of a certificate as to the legal nature and composition of a proposed transferee of an 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 12.3 .

12.4 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 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 Section 13 . No Member shall be entitled to receive any distribution or otherwise receive the fair market value of its Interest in compensation for any purported resignation or withdrawal not in accordance with the terms of this Agreement.

Section 13.

Dissolution .

13.1 Limitations . The Company may be dissolved, liquidated and terminated only pursuant to the provisions of this Section 13 , and, to the fullest extent permitted by law but subject to the terms of this Agreement, the parties hereto do hereby irrevocably waive any and all other rights they may have to cause a dissolution of the Company or a sale or partition of any or all of the Company’s assets.

13.2 Exclusive Events Requiring Dissolution . The Company shall be dissolved only upon the earliest to occur of the following events (a “ Dissolution Event ”):

(a) the expiration of the specific term set forth in Section 2.5 ;

(b) at any time at the election of all of the Members in writing;

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(d) the entry of a decree of judicial dissolution pursuant to Section 18-802 of the Act; or

(e) the Purchase Agreement has not been closed by November 18, 2016.

13.3 Liquidation . Upon the occurrence of a Dissolution Event, the business of the Company shall be continued to the extent necessary to allow an orderly winding up of its affairs, including the liquidation of the assets of the Company pursuant to the provisions of this Section 13.3 , as promptly as practicable thereafter, and each of the following shall be accomplished:

(a) The Management Committee shall cause to be prepared a statement setting forth the assets and liabilities of the Company as of the date of dissolution, a copy of which statement shall be furnished to all of the Members.

(b) The property and assets of the Company shall be liquidated or distributed in kind under the supervision of the Management Committee as promptly as possible, but in an orderly, businesslike and commercially reasonable manner.

(c) Any gain or loss realized by the Company upon the sale of its property shall be deemed recognized and allocated to the Members in the manner set forth in Section 7.2 . To the extent that an asset is to be distributed in kind, such asset shall be deemed to have been sold at its fair market value on the date of distribution, the gain or loss deemed realized upon such deemed sale shall be allocated in accordance with Section 7.2 and the amount of the distribution shall be considered to be such fair market value of the asset.

(d) The proceeds of sale and all other assets of the Company shall be applied and distributed as follows and in the following order of priority:

(1) to the satisfaction of the debts and liabilities of the Company (contingent or otherwise) and the expenses of liquidation or distribution (whether by payment or reasonable provision for payment), other than liabilities to Members or former Members for Distributions;

(2) to the satisfaction of loans made pursuant to Section 5.2(b) in proportion to the outstanding balances of such loans at the time of payment;

(3) the balance, if any, to the Members in accordance with Section 6.1 .

13.4 Continuation of the Company . Notwithstanding anything to the contrary contained herein, the death, retirement, resignation, expulsion, bankruptcy, dissolution or removal of a Member shall not in and of itself cause the dissolution of the Company, and the Members are expressly authorized to continue the business of the Company in such event, without any further action on the part of the Members.

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Section 14.

Indemnification .

14.1 Exculpation of Members . No Member, Manager, Representative or officer of the Company shall be liable to the Company or to the other Members for damages or otherwise with respect to any actions or failures to act taken or not taken relating to the Company, except to the extent any related loss results from fraud, gross negligence or willful or wanton misconduct on the part of such Member, Manager, Representative or officer or the willful breach of any obligation under this Agreement.

14.2 Indemnification by Company . The Company hereby indemnifies, holds harmless and defends the Members, the Manager, the Representatives, the officers and each of their respective agents, officers, directors, members, managers, partners, shareholders and employees from and against any loss, expense, damage or injury suffered or sustained by them (including but not limited to any judgment, award, settlement, reasonable attorneys’ fees and other costs or expenses incurred in connection with the defense of any actual or threatened action, proceeding or claim) by reason of or arising out of (i) their activities on behalf of the Company or in furtherance of the interests of the Company, including, without limitation, the provision of guaranties to third party lenders in respect of financings relating to the Company or any of its assets (but specifically excluding from such indemnity by the Company any so called “bad boy” guaranties or similar agreements which provide for recourse as a result of failure to comply with covenants, willful misconduct or gross negligence), (ii) their status as Members, Managers, Representatives, employees or officers of the Company, or (iii) the Company’s assets, property, business or affairs (including, without limitation, the actions of any officer, director, member, manager or employee of the Company or any of its Subsidiaries), if the acts or omissions were not performed or omitted fraudulently or as a result of gross negligence or willful or wanton misconduct by the indemnified party or as a result of the willful breach of any obligation under this Agreement by the indemnified party. For the purposes of this Section 14.2 , officers, directors, members, managers, employees and other representatives of Affiliates of a Member who are functioning as representatives of such Member in connection with this Agreement shall be considered representatives of such Member for the purposes of this Section 14 . Reasonable expenses incurred by the indemnified party in connection with any such proceeding relating to the foregoing matters shall be paid or reimbursed by the Company in advance of the final disposition of such proceeding upon receipt by the Company of (x) written affirmation by the Person requesting indemnification of its good faith belief that it has met the standard of conduct necessary for indemnification by the Company and (y) a written undertaking by or on behalf of such Person to repay such amount if it shall ultimately be determined by a court of competent jurisdiction that such Person has not met such standard of conduct, which undertaking shall be an unlimited general obligation of the indemnified party but need not be secured.

14.3 Indemnification by Members for Misconduct .

(a) Carroll hereby indemnifies, defends and holds harmless the Company, Bluerock, each Bluerock Transferee and each of their subsidiaries and their agents, officers, directors, members, managers, partners, shareholders and employees from and against all losses, costs, expenses, damages, claims and liabilities (including reasonable attorneys’ fees) as a result of or arising out of any fraud, gross negligence or willful or wanton misconduct on the part of, or by, Carroll, the Key Individual, any entity controlled directly or indirectly by the Key Individual that directly or indirectly controls Carroll, or any Representative appointed by Carroll.

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(b) Bluerock hereby indemnifies, defends and holds harmless the Company, Carroll, each Carroll Transferee and each of their subsidiaries and their agents, officers, directors, members, managers, partners, shareholders and employees from and against all losses, costs, expenses, damages, claims and liabilities (including reasonable attorneys’ fees) as a result of or arising out of any fraud, gross negligence or willful or wanton misconduct on the part of, or by, Bluerock or any entity controlled directly or indirectly by Bluerock, or any Representative appointed by Bluerock.

14.4 General Indemnification by the Members .

(a) Notwithstanding any other provision contained herein, each Member (the “ Indemnifying Party ”) hereby indemnifies and holds harmless the other Members, the Company and each of their subsidiaries and their agents, officers, directors, members, managers, partners, shareholders and employees (each, an “ Indemnified Party ”) from and against all losses, costs, expenses, damages, claims and liabilities (including reasonable attorneys’ fees) as a result of or arising out of (i) any breach of any obligation of the Indemnifying Party under this Agreement, or (ii) any breach of any obligation by or any inaccuracy in or breach of any representation or warranty made by the Indemnifying Party or its Affiliates, whether in this Agreement or in any other agreement with respect to the conveyance, assignment, contribution or other transfer of the Property (or interests therein), assets, agreements, rights or other interests conveyed, assigned, contributed or otherwise transferred to the Company (collectively, the “ Inducement Agreements ”).

(b) Except as otherwise provided herein or in any other agreement, recourse for the indemnity obligation of the Members under this Section 14.4 shall be limited to such Indemnifying Party’s Interest in the Company; provided, however, that recourse against either Member under its indemnity obligations under this Agreement or otherwise shall be further limited to an aggregate amount equal to the value of such Member’s Interest as determined by and being limited to the then current liquidation value of such Member’s Interest assuming the Company were liquidated in an orderly fashion and all net proceeds thereof were distributed in accordance with Section 6.

(c) The indemnities, contributions and other obligations under this Agreement shall be in addition to any rights that any Indemnified Party may have at law, in equity or otherwise. The terms of this Section 14 shall survive termination of this Agreement.

Section 15.

Sale Rights .

15.1 Push / Pull Rights .

(a) Availability of Rights . If, at any time following the second anniversary of the date that the Property is initially acquired, the Members are unable to agree on a Major Decision and such failure to agree has continued for fifteen (15) days after written notice from one Member to the other Member indicating an intention to exercise rights under this Section 15.1 , either Member may exercise its right to initiate the provisions of this Section 15.1 .

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(b) Exercise . The Member wishing to exercise its rights pursuant to this Section 15.1 (the “ Offeror ”) shall do so by giving notice to the other Member (the “ Offeree ”) setting forth a statement of intent to invoke its rights under this Section 15.1 , stating therein the aggregate dollar amount (the “ Valuation Amount ”) that the Offeror would be willing to pay for the assets of the Company as of the Closing Date (as defined below) free and clear of all liabilities, and setting forth all oral or written offers and inquiries received by the Offeror during the previous twelve-month period relating to the financing, disposition or leasing of any Company property (including proposals for the formation of one or more new entities for the ownership and operation of the Property).

(c) Offeree Response . After receipt of such notice, the Offeree shall elect to either (i) sell its entire Interest to the Offeror for an amount equal to the amount the Offeree would have been entitled to receive if the Company had sold its assets for the Valuation Amount on the Closing Date and the Company had immediately paid all Company liabilities and Imputed Closing Costs and distributed the net proceeds of sale to the Members in satisfaction of their Interests pursuant to Section 13.3 , or (ii) purchase the entire Interest of the Offeror for an amount equal to the amount the Offeror would have been entitled to receive if the Company had sold all of its assets for the Valuation Amount on the Closing Date and the Company had immediately paid all Company liabilities and Imputed Closing Costs and distributed the net proceeds of the sale to the Members in satisfaction of their Interests pursuant to Section 13.3 . The Offeree shall have thirty (30) days from the giving of the Offeror’s notice in which to exercise either of its options by giving written notice to the Offeror. If the Offeree does not elect to acquire the Offeror’s Interest within such time period, the Offeree shall be deemed to have elected to sell its Interest to the Offeror as provided in subsection (i) above.

(d) Earnest Money . Within five (5) business days after an election has been made or deemed made under Section 15.1(c) , the acquiring Member shall deposit with a mutually acceptable third-party escrow agent a non-refundable earnest money deposit in the amount of two percent (2%) of the amount the selling Member is entitled to receive for its Interest under this Section 15.1 , which amount shall be applied to the purchase price at closing. If the acquiring Member should thereafter fail to consummate the transaction for any reason other than a default by the selling Member or a refusal by any lender of the Company (or any Subsidiary of the Company) who has a right under its loan documents to consent to such transfer to so consent, (i) (A) the earnest money deposit shall be distributed from escrow to the selling Member, free of all claims of the acquiring Member, as liquidated damages and constituting the sole and exclusive remedy available to the selling Member because of a default by the acquiring Member or (B) the selling Member may, by delivering to the acquiring Member written notice thereof, elect to buy the acquiring Member’s entire Interest for an amount equal to the amount the acquiring Member would have been entitled to receive if the Company had sold all of its assets for the Valuation Amount and the Company had immediately paid all Company liabilities and Imputed Closing Costs and distributed the net proceeds of the sale to the Members in satisfaction of their Interests pursuant to Section 13.3, in which case, the Closing Date therefor shall be the date specified in the selling Member’s notice, and (ii) if the acquiring Member was the Offeror, the non-refundable earnest money deposit for any future election by the acquiring Member to buy the selling Member’s Interest shall be twenty percent (20%) of the amount the selling Member is entitled to receive for its Interest in connection with such future election.

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(e) Closing . The closing of an acquisition pursuant to this Section 15.1 shall be held on a mutually acceptable date (the “ Closing Date ”) not later than sixty (60) days (or, if the Offeree is the acquiring Member, ninety (90) days) after an election has been made or deemed made under Section 15.1(c) . At such closing, the following shall occur:

(1) The selling Member shall assign to the acquiring Member or its designee the selling Member’s Interest in accordance with the instructions of the acquiring Member, and shall execute and deliver to the acquiring Member all documents which may be required to give effect to the disposition and acquisition of such interests, in each case free and clear of all liens, claims, and encumbrances, with covenants of general warranty; and

(2) The acquiring Member shall pay to the selling Member the consideration therefor in cash.

(f) Enforcement . It is expressly agreed that the remedy at law for breach of the obligations of the Members set forth in this Section 15.1 is inadequate in view of (i) the complexities and uncertainties in measuring the actual damage to be sustained by reason of the failure of a Member to comply fully with such obligations, and (ii) the uniqueness of the Company’s business and the Members’ relationships. Accordingly, each of such obligations shall be, and is hereby expressly made, enforceable by an order of specific performance.

15.2 Forced Sale Rights .

(a) Offers . If, at any time following the second anniversary of the date that the Property is initially acquired, either Member (i) desires to offer the Property for sale on specified terms, or (ii) receives from an unaffiliated purchaser a bona fide written cash offer (i.e., not seller financed) for the purchase of the Property at a price in excess of the then-pending balance due under the Loan and otherwise on terms that such Member desires for the Company, or any Subsidiary that owns the Property (individually or collectively, the “ Ownership Entity ”), to accept (such specified terms or bona fide offer being herein called an “ Offer ”), then the Member desiring to make or accept the Offer (the “ Initiating Member ”) shall provide written notice of the terms of such Offer (each, a “ Sale Notice ”) to the other Member (the “ Non-Initiating Member ”).

(b) Response . The Non-Initiating Member shall have thirty (30) days from the date of the applicable Sale Notice (the “ Response Period ”) to provide written notice to the Initiating Member of whether the applicable Ownership Entity should make or accept the applicable Offer; the failure to timely deliver such notice shall be deemed to constitute an election to accept the applicable Offer and sell such Property on the terms of the applicable Offer.

(1) If the Non-Initiating Member does not wish for the Company, or the applicable Ownership Entity, to make or accept the applicable Offer, the Initiating Member may elect to sell its Interest to the Non-Initiating Member, in which case the Non-Initiating Member must purchase the Initiating Member’s Interest in the Property for an amount equal to the amount that would be distributable to the Initiating Member if the Company had accepted the applicable Offer, closed the sale pursuant to such Offer and, if applicable, wound up its affairs pursuant to Section 13 .

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(2) For purposes of the foregoing calculations, the purchase price for a sale shall be reduced by Imputed Closing Costs therefor. The Initiating Member must exercise this option, if at all, by delivering written notice thereof to the Non-Initiating Member within twenty (20) days after the end of the applicable Response Period. The Non-Initiating Member shall pay the Company cash for each Ownership Entity or the Initiating Member cash for its Interest, as the case may be. Closing shall take place on or before the date specified in the applicable Sale Notice, but if the Non-Initiating Member is purchasing the Initiating Member’s Interest or one or more Ownership Entities, the Non-Initiating Member shall have until 120 days after the Sale Notice in which to close. If the Initiating Member or the Non-Initiating Member defaults at closing, the non-defaulting party shall have the right to bring suit for damages, for specific performance, or exercise any other remedy available at law or in equity. Upon payment at closing, the Initiating Member shall execute and deliver all documents reasonably required to transfer the interest being sold.

(d) Offer Acceptable . If the Non-Initiating Member consents (or is deemed to have consented) to the Company or the applicable Ownership Entity selling the Property on the terms of an Offer, then the Initiating Member shall be allowed to sell the Property for cash on the terms of the applicable Offer for a period of up to one hundred eighty (180) days following the expiration of the applicable Response Period. If the Initiating Member obtains a bona fide third party contract to sell all the Property on the terms of the applicable Offer within such one hundred eighty (180) day period, the Initiating Member shall have an additional period of ninety (90) days after the date of such contract (that is, not to exceed 270 days after the expiration of the applicable Response Period) in which to consummate the sale. If after having received the consent (or deemed consent) of the Non-Initiating Member to the sale of the Property on the terms of the applicable Offer, the Initiating Member is unable to obtain a bona fide contract within such one hundred eighty (180) day period, or if after having obtained such bona fide contract, the Initiating Member is unable to consummate such sale within 270 days after the expiration of the applicable Response Period, then the Initiating Member must again submit an Offer to the Non-Initiating Member under the terms of this Section 15.2 before it may sell the Property.

Section 16.

Miscellaneous .

16.1 Notices .

(a) All notices, requests, approvals, authorizations, consents and other communications required or permitted under this Agreement shall be in writing and shall be (as elected by the Person giving such notice) hand delivered by messenger or overnight courier service, mailed (airmail, if international) by registered or certified mail (postage prepaid), return receipt requested, or sent via facsimile (provided such facsimile is immediately followed by the delivery of an original copy of same via one of the other foregoing delivery methods) addressed to:

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If to Bluerock:

c/o Bluerock Real Estate, L.L.C.
712 Fifth Avenue, 9 ^th Floor
New York, New York 10019
Attention: James G. Babb, III

Facsimile No. (646) 278-4220

with copies to:

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

712 Fifth Avenue, 9 ^th Floor

New York, New York 10022

Attention: Michael Konig, Esq.

Facsimile No. (646) 278-4220

and

Kaplan, Voekler, Cunningham & Frank, PLC

1401 East Cary Street

Richmond, VA 23223

Attention: S. Edward Flanagan, Esq.

Facsimile No. (804) 823-4099

If to Carroll:

c/o Carroll Organization, LLC
3340 Peachtree Road, Suite 1620
Atlanta, Georgia 30326
Attention: M. Patrick Carroll

Facsimile No. (404) 523-9372

With a copy to:

Morris, Manning & Martin LLP
1600 Atlanta Financial Center
3343 Peachtree Road, NE
Atlanta, Georgia 30326
Attention: Corey B. May, Esq.
Facsimile: (404) 365-9532

(b) Each such notice shall be deemed delivered (i) on the date delivered if by hand delivery or overnight courier service or facsimile, and (ii) on the date upon which the return receipt is signed or delivery is refused or the notice is designated by the postal authorities as not deliverable, as the case may be, if mailed (provided, however, if such actual delivery occurs after 5:00 p.m. (local time where received), then such notice or demand shall be deemed delivered on the immediately following business day after the actual day of delivery).

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(c) By giving to the other parties at least fifteen (15) days written notice thereof, the parties hereto and their respective successors and assigns shall have the right from time to time and at any time during the term of this Agreement to change their respective addresses.

16.2 Governing Law; Forum . This Agreement and the rights of the Members hereunder shall be governed by, and interpreted in accordance with, the laws of the State of Delaware, without regard to its conflicts of law provisions. Any legal action or other legal proceeding relating to this Agreement or the enforcement of any provision of this Agreement shall only be brought or otherwise commenced in any state or federal court located in the State of New York. Each of the parties hereto:

(a) Expressly and irrevocably consents and submits to the exclusive personal jurisdiction of and venue in each state and federal court located in the State of New York (and each appellate court located in the State of New York), in connection with any such legal proceeding;

(b) Agrees that each state and federal court located in the State of New York shall be deemed to be a convenient forum; and

(c) Agrees not to assert (by way of motion, as a defense or otherwise), in any such legal proceeding commenced in any state or federal court located in the State of New York, any claim that it is not subject personally to the jurisdiction of such court, that such legal proceeding has been brought in an inconvenient forum, that the venue for such proceeding is improper or that this Agreement or the subject matter of this Agreement may not be enforced in or by such court.

Each of the parties hereto designates CT Corporation System, 1633 Broadway, New York, New York 10019, as its agent for service of process in the State of New York, which designation may only be changed on not less than ten (10) days’ prior notice to all of the other parties.

16.3 Successors . This Agreement shall be binding upon, and inure to the benefit of, the parties and their successors and permitted assigns. Except as otherwise provided herein, any Member who Transfers its Interest as permitted by the terms of this Agreement shall have no further liability or obligation hereunder, except with respect to claims arising prior to such Transfer.

16.4 Pronouns . Whenever from the context it appears appropriate, each term stated in either the singular or the plural shall include the singular and the plural, and pronouns stated in either the masculine, the feminine or the neuter gender shall include the masculine, feminine and neuter.

16.5 Captions Not Part of Agreement . The captions contained in this Agreement are inserted only as a matter of convenience and in no way define, limit or extend the scope or intent of this Agreement or any provisions hereof.

16.6 Severability . If any provision of this Agreement shall be held invalid, illegal or unenforceable in any jurisdiction or in any respect, then the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired, and the Members shall use their best efforts to amend or substitute such invalid, illegal or unenforceable provision with enforceable and valid provisions which would produce as nearly as possible the rights and obligations previously intended by the Members without renegotiation of any material terms and conditions stipulated herein.

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

16.8 Entire Agreement and Amendment . This Agreement and the other written agreements described herein between the parties hereto entered into as of the date hereof, constitute the entire agreement between the Members relating to the subject matter hereof. In the event of any conflict between this Agreement and such other written agreements, the terms and provisions of this Agreement shall govern and control. No amendment or waiver by a party shall be enforceable against that party unless it is in writing and duly executed by such party.

16.9 Further Assurances . Each Member agrees to execute and deliver any and all additional instruments and documents and do any and all acts and things as may be necessary or expedient to effectuate more fully this Agreement or any provisions hereof or to carry on the business contemplated hereunder.

16.10 No Third Party Rights . The provisions of this Agreement are for the exclusive benefit of the Members and the Company, and no other party (including, without limitation, any creditor of the Company) shall have any right or claim against any Member by reason of those provisions or be entitled to enforce any of those provisions against any Member.

16.11 Incorporation by Reference . Every Exhibit and Annex attached to this Agreement is incorporated in this Agreement by reference.

16.12 Limitation on Liability . Except as set forth in Section 14 and with respect to a Default Loan as set forth in Section 5.2(b) , the Members shall not be bound by, or be personally liable for, by reason of being a Member, a judgment, decree or order of a court or in any other manner, for the expenses, liabilities or obligations of the Company, and the liability of each Member shall be limited solely to the amount of its Capital Contributions as provided under Section 5 . Except as set forth in Section 14.3 and with respect to a Default Loan as set forth in Section 5.2(b) , any claim against any Member (the “ Member in Question ”) which may arise under this Agreement shall be made only against, and shall be limited to, such Member in Question’s Interest, the proceeds of the sale by the Member in Question of such Interest or the undivided interest in the assets of the Company distributed to the Member in Question pursuant to Section 13.3(d) hereof. Except as set forth in Section 14.3 and with respect to a Default Loan as set forth in Section 5.2(b) , any right to proceed against (i) any other assets of the Member in Question or (ii) any agent, officer, director, member, manager, partner, shareholder or employee of the Member in Question or the assets of any such Person, as a result of such a claim against the Member in Question arising under this Agreement or otherwise, is hereby irrevocably and unconditionally waived.

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16.13 Remedies Cumulative . The rights and remedies given in this Agreement and by law to a Member shall be deemed cumulative, and the exercise of one of such remedies shall not operate to bar the exercise of any other rights and remedies reserved to a Member under the provisions of this Agreement or given to a Member by law. In the event of any dispute between the parties hereto, the prevailing party shall be entitled to recover from the other party reasonable attorney’s fees and costs incurred in connection therewith.

16.14 No Waiver . One or more waivers of the breach of any provision of this Agreement by any Member shall not be construed as a waiver of a subsequent breach of the same or any other provision, nor shall any delay or omission by a Member to seek a remedy for any breach of this Agreement or to exercise the rights accruing to a Member by reason of such breach be deemed a waiver by a Member of its remedies and rights with respect to such breach.

16.15 Limitation On Use of Names . Notwithstanding anything contained in this Agreement or otherwise to the contrary, each of Bluerock and Carroll as to itself agree that neither it nor any of its Affiliates, agents, or representatives is granted a license to use or shall use the name of the other under any circumstances whatsoever, except such name may be used in furtherance of the business of the Company but only as and to the extent unanimously approved by the Members. Any change in the name of any portion of the Property must be approved by the Management Committee.

16.16 Publicly Traded Partnership Provision . Each Member hereby severally covenants and agrees with the other Members for the benefit of such Members, that (a) it is not currently making a market in Interests in the Company and will not in the future make such a market and (b) it will not Transfer its Interest on an established securities market, a secondary market or an over-the-counter market or the substantial equivalent thereof within the meaning of Code Section 7704 and the Regulations, rulings and other pronouncements of the U.S. Internal Revenue Service or the Department of the Treasury thereunder. Each Member further agrees that it will not assign any Interest in the Company to any assignee unless such assignee agrees to be bound by this Section 16.16 and to assign such Interest only to such Persons who agree to be similarly bound.

16.17 Uniform Commercial Code . The interest of each Member in the Company shall be an “uncertificated security” governed by Article 8 of the Delaware UCC and the UCC as enacted in the State of New York (the “ New York UCC ”), including, without limitation, (i) for purposes of the definition of a “security” thereunder, the interest of each Member in the Company shall be a security governed by Article 8 of the Delaware UCC and the New York UCC and (ii) for purposes of the definition of an “uncertificated security” thereunder.

16.18 Public Announcements . Neither Carroll nor any of its Affiliates shall, without the prior approval of Bluerock, issue any press releases or otherwise make any public statements with respect to the Company or the transactions contemplated by this Agreement, except as may be required by applicable law or regulation or by obligations pursuant to any listing agreement with any national securities exchange so long as Carroll or such Affiliate has used reasonable efforts to obtain the approval of Bluerock prior to issuing such press release or making such public disclosure.

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16.19 No Construction Against Drafter . This Agreement has been negotiated and prepared by Bluerock and Carroll and their respective attorneys and, should any provision of this Agreement require judicial interpretation, the court interpreting or construing such provision shall not apply the rule of construction that a document is to be construed more strictly against one party.

Section 17. Insurance . During the Term, Property Manager, pursuant to the terms of the Management Agreement, shall procure and maintain insurance as is determined to be appropriate by the Management Committee (in form and with endorsements, waivers and deductibles and with insurance companies, designated or approved by Bluerock) naming the Company (and the Subsidiary owning the Property), Bluerock and Carroll as insureds thereunder.

[ SIGNATURES ON FOLLOWING PAGES ]

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IN WITNESS WHEREOF, this Agreement is executed by the Members, effective as of the date first set forth above.

	BR GLENRIDGE JV MEMBER, LLC,
	a Delaware limited liability company

By:

BRG Glenridge, LLC, a Delaware limited liability company, its manager

By:

Bluerock Residential Holdings, L.P., a Delaware limited partnership, its sole member

By:

Bluerock Residential Growth REIT, Inc., a Maryland corporation, its general partner

		By:	/s/ Michael Konig
		Name:	Michael Konig
		Title:	Authorized Signatory

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	CARROLL CO-INVEST IV GLENRIDGE, LLC,
	a Georgia limited liability company

By:

Carrroll Multi-Family Real Estate Fund IV, LP, a Delaware limited partnership, it manager

By:

MPC Property Holdings IV, LLC, a Georgia limited liability company, its general partner

By:

MPC Partnership Holdings LLC, a Georgia limited liability company, its sole member

By:

P. Carroll Capitol Partners, LLC, a Georgia limited liability company, its managing member

By:

HUP Investment Company, LLC, a Georgia limited liability company, its sole member

	By:	/s/ M. Patrick Carroll
	Name:	M. Patrick Caroll
	Its:	Sole Member

	For purposes of Sections 6.1(c), 8.2(b), 9.3, 9.4, 9.7 and 17 only, and only for the term Carroll Management Group, LLC is Property Manager under the Management Agreement.

	CARROLL MANAGEMENT GROUP, LLC

	By:	/s/ Josh Champion
	Name:	Josh Champion
	Title:	President

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EXHIBIT A

Initial Capital Contributions and Percentage Interests

Member Name	Capital Contributions			Percentage Interest

BR Glenridge JV Member, LLC	$	22,770,975.08			90	%

Carroll Co-Invest IV Glenridge, LLC	$	2,530,108.34	**		10	%

**Made up of $2,530,108.34 (including $341,250 in intangibles) allocable to the Property.

Management Committee Representatives

Bluerock :

James G. Babb, III

Jordan B. Ruddy

Carroll :

Patrick Carroll

Joshua Champion

EXHIBIT B

Annual Business Plan Information

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

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

a projected balance sheet as of the end of the next Fiscal Year;

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

a marketing plan indicating the portions of the Property that Property Manager recommends be made available for sale or lease and the proposed terms and conditions relating thereto;

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

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

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

a projection of the amount of any anticipated additional Capital Contributions which may be called for pursuant to Section 5.2(a) and the purposes for which such additional Capital Contributions may be used; and

10.

such other information requested from time to time by any Member.

EXHIBIT C

Management Agreement

Exhibit D

Initial Annual Business Plan

Exhibit 10.4

LIMITED LIABILITY COMPANY AGREEMENT OF

BR CARROLL GLENRIDGE, LLC

THIS LIMITED LIABILITY COMPANY AGREEMENT of BR CARROLL GLENRIDGE, LLC, a Delaware limited liability company (the “ Company ”), as amended from time to time, (the " Agreement ") is entered into among BR Carroll Glenridge JV, LLC, a Delaware limited liability company, the sole member of the Company (the " Member "), Michael L. Konig (“ Springing Member 1 ”), and Jordan B. Ruddy (“ Springing Member 2 ” and together with Springing Member 1, the “ Springing 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 ").

B. The undersigned desire to execute this Agreement to set forth the terms and conditions under which the management, business, and financial affairs of the Company will be conducted.

C. Definitions for this Agreement are set forth in Article XI.

AGREEMENT

ARTICLE I

PURPOSE AND POWERS OF COMP ANY

1.1 Purpose . The Company's business and purpose shall consist solely of the acquisition, ownership, operation, management, financing and disposition of the multi-family real estate project consisting of approximately 480 units and located at 5501 Glenridge Drive, Atlanta, Georgia and currently commonly known as Nevadan Apartments (and to be rebranded as Glenridge Apartments) (the " Mortgaged Property ") and such activities as are necessary, incidental or appropriate in connection therewith.

1.2 Powers . The Company shall have all powers of a limited liability company formed under the Act and not prohibited by the Act or this Agreement; provided, however, that during the term of that certain loan from the Lender in the approximate amount of $48,431,000.00 (the " Loan "), the Company will comply with the applicable single purpose requirements of the Lender set forth in the Loan Documents and in Section 1.7 of this Agreement.

1.3 Title to Company Property . All property owned by the Company shall be owned by the Company as an entity and, insofar as permitted by applicable law, no Member shall have any ownership interest in any Company property in its individual name or right, and each Member's Membership Interest shall be personal property for all purposes.

1.4 Term . This Agreement shall not terminate until the Company is terminated in accordance with this Agreement.

1.5 Registered Office and Registered Agent . The Company's initial registered office and initial registered agent shall be as provided 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 pursuant to the Act.

1.6 Formation and Authorized Person . The Certificate of Formation has been filed with the Secretary of State of the State of Delaware in accordance with and pursuant to the Act. Chris 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, and is hereby authorized to execute, deliver and file any other certificates (and any amendments and/or restatements thereof) necessary or desirable for the Company to qualify to do business in any other jurisdiction in which the Company may wish to conduct business (the " Qualification Papers "). The execution, delivery and filing of the Qualification Papers by Chris Vohs as an "authorized person" within the meaning of the Act is hereby approved and ratified in all respects. Upon the filing of all of Qualification Papers, 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.

1.7 Limitation on Certain Activities .

(a) Until the Loan is paid in full, the Company shall remain a Single Purpose Entity.

(b) A “ Single Purpose Entity ” means a limited liability company which, at all times since its formation and thereafter:

(i)

shall not engage in any business or activity, other than the ownership, operation and maintenance of the Mortgaged Property and activities incidental thereto;

(ii)

shall not acquire, own, hold, lease, operate, manage, maintain, develop or improve any assets other than the Mortgaged Property and such Personalty as may be necessary for the operation of the Mortgaged Property and shall conduct and operate its business as presently conducted and operated;

(iii)

shall preserve its existence as an entity duly organized, validly existing and in good standing under the laws of Delaware and shall do all things necessary to observe organizational formalities;

(iv)

shall not merge or consolidate with any other Person;

(v)

shall not take any action to dissolve, wind-up, terminate or liquidate in whole or in part; to sell, transfer or otherwise dispose of all or substantially all of its assets; to change its legal structure; transfer or permit the direct or indirect transfer of any membership interests, other than Transfers permitted under the Loan Agreement; issue additional membership interests; or seek to accomplish any of the foregoing;

(vi)

shall not, without the prior unanimous written consent of all of the Company’s members: (A) file any insolvency, or reorganization case or proceeding, to institute proceedings to have the Company be adjudicated bankrupt or insolvent, (B) institute proceedings under any applicable insolvency law, (C) seek any relief under any law relating to relief from debts or the protection of debtors, (D) consent to the filing or institution of bankruptcy or insolvency proceedings against the Company, (E) 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 insolvency, (F) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official for the Company or a substantial part of its property, (G) make any assignment for the benefit of creditors of the Company, (H) admit in writing the Company’s inability to pay its debts generally as they become due, or (I) take action in furtherance of any of the foregoing;

(vii)

shall not amend or restate its organizational documents if such change would modify the requirements set forth in Section 6.13 of the Loan Agreement;

(viii)

shall not own any subsidiary or make any investment in any other Person;

(ix)

shall not commingle its assets with the assets of any other Person and shall hold all of its assets in its own name;

(x)

shall not incur any debt, secured or unsecured, direct or contingent (including, without limitation, guaranteeing any obligation), other than the following; provided, no Member of the Company will be required to contribute any additional capital to satisfy this covenant, (A) the Loan (and any further indebtedness as described in Section 11.11 of the Loan Agreement with regard to Supplemental Loans) and (B) customary unsecured trade payables incurred in the ordinary course of owning and operating the Mortgaged Property provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum amount of two percent (2%) of the original principal amount of the Loan and are paid within sixty (60) days of the date incurred;

(xi)

shall maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person and shall not list its assets as assets on the financial statement of any other Person; provided, however, that the Company’s assets may be included in a consolidated financial statement of its Affiliate provided that (A) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of the Company from such Affiliate and to indicate that the Company’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person and (B) such assets shall also be listed on the Company’s own separate balance sheet;

(xii)

except for capital contributions or capital distributions permitted under the terms and conditions of its organizational documents, shall only enter into any contract or agreement with any member or Affiliate of the Company upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties;

(xiii)

shall not maintain its assets in such a manner that will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person;

(xiv)

shall not assume or guaranty (excluding any guaranty that has been executed and delivered in connection with the Loan) the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person, or hold out its credit as being available to satisfy the obligations of any other Person;

(xv)

shall not make or permit to remain outstanding any loans or advances to any other Person except for those investments permitted under the documents evidencing and/or securing the Loan and shall not buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities);

(xvi)

shall file its own tax returns separate from those of any other Person, except to the extent that the Company is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and shall pay any taxes required to be paid under applicable law;

(xvii)

shall hold itself out to the public as a legal entity separate and distinct from any other Person and conduct its business solely in its own name, shall correct any known misunderstanding regarding its separate identity and shall not identify itself or any of its Affiliates as a division or department of any other Person;

(xviii)

shall maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and shall pay its debts and liabilities from its own assets as the same shall become due, provided that no member of the Company will be required to contribute any additional capital to satisfy this covenant;

(xix)

shall allocate fairly and reasonably shared expenses with Affiliates (including, without limitation, shared office space) and use separate stationery, invoices and checks bearing its own name;

(xx)

shall pay (or cause the Property Manager to pay on behalf of the Company from the Company’s funds) its own liabilities (including, without limitation, salaries of its own employees) from its own funds;

(xxi)

shall not acquire obligations or securities of its members or Affiliates;

(xxii)

except as contemplated or permitted by the property management agreement with respect to the Property Manager, shall not permit any Affiliate or constituent party independent access to its bank accounts;

(xxiii)

shall maintain a sufficient number of employees (if any) in light of its contemplated business operations and pay the salaries of its own employees, if any, only from its own funds;

(xxiv)

shall satisfy each of the following conditions:

(A)

be formed and organized under Delaware law;

(B)

have two springing members who are natural persons;

(C)

otherwise comply with all Rating Agencies criteria for single member limited liability companies (including the delivery of Delaware single member limited liability company opinions acceptable in all respects to lenders and to the Rating Agencies); and

(D)

at all times the Company will have one and only one member.

The provisions of this Section 1.7 shall govern and supersede any other provision of this Agreement to the contrary.

ARTICLE II

MEMBERS

2.1

Initial Member .

(a) The name, address and initial Membership Interest of the initial Member is as follows:

	Name		Membership Interest
	BR Carroll Glenridge JV, LLC		100%
	c/o Bluerock Real Estate, L.L.C.
	712 Fifth Avenue, 9 ^th Floor
	New York, NY 10019

(b) The Member was admitted to the Company as a member of the Company upon its execution of a counterpart signature page to this Agreement.

2.2 Special Member . Upon the occurrence of any event that causes the Member to cease to be a member of the Company (other than (i) upon an assignment by the Member of all of its limited liability company interest in the Company and the admission of the transferee, or (ii) the resignation of the Member and the admission of an additional member of the Company, (a “ Member Cessation Event ”)), Springing Member 1 shall, without any action of any Person and simultaneously with the Member Cessation Event, automatically be admitted to the Company as a Special Member and shall continue the Company without dissolution. If, however, at the time of a Member Cessation Event, Springing Member 1 has died or is otherwise no longer able to step into the role of Special Member, then in such event, Springing Member 2 shall, concurrently with the Member Cessation Event, and without any action of any Person and simultaneously with the Member Cessation Event, automatically be admitted to the Company as Special Member and shall continue the Company without dissolution. It is the intent of these provisions that the Company never have more than one Special Member at any particular point in time. No Special Member may resign from the Company or transfer its rights as Special Member unless a successor Special Member has been admitted to the Company as Special Member by executing a counterpart to this Agreement. The Special Member shall automatically cease to be a member of the Company upon the admission to the Company of a substitute member. The Special Member shall be a member of the Company that has no interest in the profits, losses and capital of the Company and has no right to receive any distributions of Company assets. Pursuant to Section 18-301 of the Act, a Special Member shall not be required to make any capital contributions to the Company and shall not receive a limited liability company interest in the Company. A Special Member, in its capacity as Special Member, may not bind the Company. Except as required by any mandatory provision of the Act, a Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, the Company, including, without limitation, the merger, consolidation or conversion of the Company. In order to implement the admission to the Company of the Special Member, each of Springing Member 1 and Springing Member 2 shall execute a counterpart to this Agreement. Prior to its admission to the Company as Special Member, neither Michael L. Konig nor Jordan B. Ruddy shall be a member of the Company.

The Company shall at all times have a Springing Member 1 and Springing Member 2. No resignation or removal of either Springing Member 1 or Springing Member 2, and no appointment of a successor Springing Member, shall be effective unless and until such successor shall have executed a counterpart to this Agreement. In the event of a vacancy in the position of Springing Member 1 or Springing Member 2, the Member shall, as soon as practicable, appoint a successor Springing Member to fill such vacancy. By signing this Agreement, a springing member agrees that, should such Springing Member become a Special Member, such springing member will be subject to and bound by the provisions of this Agreement applicable to a Special Member.

ARTICLE III

MANAGEMENT BY MEMBER

3.3 Required Approval . Any provision in this Agreement that requires the approval of the Members, but does not specify the particular percentage interests or number of Members required for such approval, shall be interpreted to require the affirmative vote of the Member or Members holding a majority of the total Membership Interests from time to time, and specifically shall not be interpreted to require unanimous consent of the Members.

3.4 Action By Member . In exercising the voting or other approval rights as provided herein, the Member may act through meetings and/or written consents.

3.5 Authorization . The Company is authorized to acquire the Mortgaged Property and to borrow the Loan from KeyBank National Association for and on behalf of Freddie Mac, the assignee of the Loan (together with its successors and assigns, the " Lender "), and from time to time refinance the Loan. In furtherance of the conduct of the purposes described herein, the Company shall possess and may exercise all of the powers and privileges granted by the Act, and the Company is hereby authorized to do any act, enter into any agreement, contract or other instrument, and otherwise to engage in any activity and to do any action not prohibited under the Act or other applicable law which is necessary, useful, desirable or convenient to the conduct, promotion and attainment of the business and purposes of the Company. In addition, the Company, or the Member on behalf of the Company, may enter into and perform the Loan Documents and all documents, agreements, certificates, or financing statements contemplated thereby or related thereto, all without any further act, vote or approval of any other Person notwithstanding any other provision of this Agreement, the Act or applicable law, rule or regulation. The foregoing authorization shall not be deemed a restriction on the powers of the Member to enter into other agreements on behalf of the Company in accordance with this Agreement.

ARTICLE IV

INTENTIONALLY OMITTED

ARTICLE V

SUBORDINATION OF INDEMNIFICATION PROVISIONS

5.1 Notwithstanding any provision hereof to the contrary, any indemnification claim against the Company arising under the Certificate of Formation, this Agreement or the laws of the state of organization of the Company shall be fully subordinate to any obligations of the Company arising under the Mortgage or any other Loan Document, and shall only constitute a claim against the Company to the extent of, and shall be paid by the Company in monthly installments only from, the excess of net operating income of the Company for any month over all amounts then due under the Mortgage and the other Loan Documents.

ARTICLE VI

EFFECT OF BANKRUPTCY. DEATH OR INCOMPETENCY OF A MEMBER

6.1 The bankruptcy, death, dissolution, liquidation, termination or adjudication of incompetency of a Member shall not cause the termination or dissolution of the Company and the business of the Company shall continue. Upon any such occurrence, the trustee, receiver, executor, administrator, committee, guardian or conservator of such Member shall have all the rights of such Member for the purpose of settling or managing its estate or property, subject to satisfying conditions precedent to the admission of such assignee as a substitute member. The transfer by such trustee, receiver, executor, administrator, committee, guardian or conservator of any Company Interest shall be subject to all of the restrictions hereunder to which such transfer would have been subject if such transfer had been made by such bankrupt, deceased, dissolved, liquidated, terminated or incompetent Member. The foregoing shall apply to the extent permitted by applicable law. Notwithstanding any other provision of the Certificate of Formation or this Agreement, no Member or Special Member of the Company shall have any right under Section 18-801(b) of the Act to agree in writing to dissolve the Company upon the bankruptcy of a Member or Special Member or the occurrence of any event that causes a Member or Special Member of the Company to cease to be a member of the Company. The existence of the Company as a separate legal entity shall continue until the cancellation of its Certificate of Formation as provided in the Act.

ARTICLE VII

CONTRIBUTIONS TO THE COMPANY AND DISTRIBUTIONS

7.1 Member Capital Contributions . Upon execution of this Agreement, the Member shall contribute as the Member's initial Capital Contribution, $100 in cash.

7.2 [Intentionally Left Blank]

7.3 Distributions and Allocations . All distributions of cash or other property (except upon the Company's dissolution, which shall be governed by the applicable provisions of the Act and Article IX hereof) and all allocations of income, profits, and loss shall be made 100% to the Member in accordance with its Membership Interest. All amounts withheld pursuant to the Code or any provisions of state or local tax law with respect to any payment or distribution to the Member from the Company shall be treated as amounts distributed to the Member pursuant to this Section 7.3. 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.

ARTICLE VIII

ASSIGNMENTS AND RESIGNATIONS

8.1 Assignment, Resignation and Admission Generally .

(a) Assignments . Subject to the terms of the Loan Documents and this Section 8.l(a), the Member may assign in whole or in part its Membership Interest in the Company. If the Member transfers all of its Membership Interest pursuant to this Section 8.1, 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, and the Member shall cease to be a member of the Company. Notwithstanding anything in this Agreement to the contrary, any successor to the Member by merger or consolidation in compliance with the Basic Documents shall, without further act, be the Member hereunder, and such merger or consolidation shall not constitute an assignment for purposes of this Agreement and the Company shall continue without dissolution.

(b) Resignation . So long as any obligation is outstanding under the Loan, the Member may not resign, except as permitted under the Basic Documents. If the Member is permitted to resign pursuant to this Section 8.l(b), an additional member of the Company shall be admitted to 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 resignation and, immediately following such admission, and the resigning Member shall cease to be a member of the Company.

(c) Admission of Additional Members . One or more additional members may be admitted to the Company with the written consent of the Member or the members, if applicable; provided, however, that, notwithstanding the foregoing, except as otherwise provided in the Loan Documents, so long as any obligation remains outstanding under the Loan, no additional member may be admitted to the Company pursuant to this Section 8.l(c) unless approved by the Lender.

8.4 Effect of Prohibited Action . Any assignment in violation of this Article VIII shall be, to the fullest extent permitted by law, void and of no force or effect whatsoever.

ARTICLE IX

DISSOLUTION AND TERMINATION

(a) selling the Company's assets and, after the satisfaction of Company liabilities, distributing the net proceeds therefrom to the Member; and/or

(b) subject to the satisfaction of Company liabilities, distributing the Company's assets to the Member in kind, with the Member accepting an undivided interest in the Company's assets in satisfaction of its Membership Interest.

9.4 Distributions . Upon dissolution, the Company's assets (including any cash on hand) shall be distributed in the following order and in accordance with the following priorities:

(a) first, to the satisfaction of the Loan; then

(b) second, to the satisfaction of the other debts and liabilities of the Company (whether by payment or the making of reasonable provision for payment thereof) and the expenses of liquidation, including a sales commission to the selling agent, if any; then

ARTICLE X

MISCELLANEOUS PROVISIONS

10.2 Indemnity . The Company shall indemnify and hold harmless any person who was or is a party to any proceeding, including any proceeding brought by a member in the right of the Company or brought by or on behalf of any member of the Company, by reason of the fact that he is or was an officer of the Company, against any liability incurred by him in connection with such proceedings unless he engaged in willful misconduct or knowing violation of the criminal law or any federal or state securities laws. Furthermore, in any such proceedings brought by or on behalf of the Company or bought by or on behalf of the members of the Company, no officer shall be liable to the Company or its members for any monetary damages with respect to any transaction, occurrence, course of conduct or otherwise, except for liability resulting from such officer's having engaged in willful misconduct or a knowing violation of the criminal law or any federal or state securities laws.

10.6 Counterparts . This 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.

10.11 Partition . Each Member agrees that the assets of the Company are not and will not be suitable for partition. Accordingly, each Member hereby irrevocably waives (to the fullest extent permitted by law) any and all rights that he may have, or may obtain, to maintain any action for partition of any of the assets of the Company.

ARTICLE XI

DEFINITIONS

In addition to any other defined terms herein, the following terms used in this Agreement shall have the following meanings (unless otherwise expressly provided herein):

(a) "Affiliate" shall mean any Person controlling or controlled by or under common control with the Company, including, without limitation (i) any person who has a familial relationship, by blood, marriage or otherwise with any Member or employee of the Company, or any Affiliate thereof and (ii) any Person which receives compensation for administrative, legal or accounting services from the Company, or any of its Affiliates. For purposes of this definition, "control" when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

(b) "Bankruptcy" shall mean, 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 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.

(c) "Basic Documents" shall mean collectively this Agreement, the Loan Documents, the Property Management Agreement and all documents and certificates contemplated thereby or delivered in connection therewith.

(d) "Capital Contribution" shall mean any contribution to the capital of the Company by the Member in cash, property, or services, or a binding obligation to contribute cash, property, or services, whenever made.

(e) "Certificate of Formation" shall mean the Certificate of Formation of the Company, as amended and in force from time to time.

(f) “Closing Date” shall mean the date on which the Company acquires the Mortgaged Property.

(g) “Company Interest” shall mean any equity interest in the Company, direct or indirect.

(h) "Code" shall mean the Internal Revenue Code of 1986, as amended, or corresponding provisions of subsequent superseding federal revenue laws and the rules and regulations promulgated thereunder.

(i) “Company shall mean BR CARROLL GLENRIDGE, LLC.

(j) "Entity" shall mean any general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative, association or other entity.

(k) “Lender” is defined in Section 3.5 of this Agreement.

(l) "Loan" is defined in Section 1.2 of this Agreement.

(m) “Loan Agreement” mean that certain loan agreement, dated October 13, 2016, in the amount of Forty Eight Million Four Hundred Thirty One Thousand and No/100 Dollars ($48,431,000.00) by and between Lender and the Company.

(n) "Loan Documents" shall mean collectively the Note, the Mortgage, any guaranty, assignment, indemnity agreement, escrow agreement, or the functional equivalent of any of the aforementioned, and any and all other documents evidencing or securing the Loan and any and all documents related thereto.

(m) "Member" shall mean the Person identified in Article II hereof and includes any Person admitted as an additional member or a substitute member of the Company pursuant to the provisions of this Agreement, each in its capacity as a member of the Company; provided, however, the term "Member" shall not include the Special Member.

(n) “Member Cessation Event” shall have the meaning prescribed in Section 2.2 of this Agreement.

(o) "Membership Interest" shall mean the Member's limited liability company interest in the Company and the other rights and obligations with respect thereto as set forth in this Agreement. The Membership Interest is set forth beside the Member's name in Article II of this Agreement.

(p) "Mortgage" shall mean that certain security instrument executed by the Company in favor of the Lender pursuant to which the Company grants a mortgage lien to Lender against the Mortgaged Property.

(q) “Mortgaged Property” is defined in Section 1.1 of this Agreement.

(r) “Note” shall mean that certain promissory note related to the Loan and evidencing the Loan Agreement.

(s) "Person" shall mean any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization, or government or any agency or political subdivision thereof.

(t) “Personalty” shall have the meaning prescribed in the Loan Agreement.

(u) "Property Manager" shall mean Carroll Management Group, LLC, a Georgia limited liability company, and its successors and assigns, so long as the initial Property Management Agreement is in full force and effect and, thereafter, the entity performing similar services for the Company with respect to the Mortgaged Property.

(v) "Property Management Agreement" shall mean that certain management agreement between the Company and the Property Manager with respect to the management of the Mortgaged Property.

(w) “Rating Agency” shall have the meaning prescribed in the Loan Agreement.

(x) "Special Member" shall mean, upon such Springing Member’s admission to the Company as a member of the Company, the Person bound by this Agreement as Special Member in such Person's capacity as a member of the Company. A Special Member shall only have the rights and duties expressly set forth in this Agreement.

(y) “Special Purpose Entity” is defined in Section 1.7 of this Agreement.

(z) “Springing Member 1” shall be Michael L. Konig or any successor to him.

(aa) “Springing Member 2” shall be Jordan B. Ruddy or any successor to him.

(bb) “Supplemental Loan” shall have the meaning prescribed in the Loan Agreement.

(cc) “Transfers” shall have the meaning prescribed in the Loan Agreement.

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

The undersigned hereby agree, acknowledge, and certify that the foregoing constitutes the sole and entire Limited Liability Company Agreement of the Company.

MEMBER :	BR Carroll Glenridge JV, LLC,
	a Delaware limited liability company

	By:	BR Glenridge JV Member, LLC,
		a Delaware limited liability company, its manager

	By:	BRG Glenridge, LLC,
		a Delaware limited partnership, its manager

	By:	Bluerock Residential Holdings, LP
		a Delaware limited partnership, its sole member

	By:	Bluerock Residential Growth REIT, Inc.,
		a Maryland corporation, its general partner

	By:	/s/ R. Ramin Kamfar
	Name:	R. Ramin Kamfar
	Title:	Authorized Signatory

SPRINGING MEMBER 1 :	By:	/s/ Michael L. Konig
	Name:	Michael L. Konig

SPRINGING MEMBER 2 :	By:	/s/ Jordan B. Ruddy
	Name:	Jordan B. Ruddy

Exhibit 10.5

Freddie Mac Loan Number: 708657427

Property Name: Nevadan Apartments

MULTIFAMILY LOAN AND SECURITY AGREEMENT

(Revised 7-12-2016)

Borrower:	BR CARROLL GLENRIDGE, LLC , a Delaware limited liability company
Lender:	KEYBANK NATIONAL ASSOCIATION , a national banking association
Date:	As of October 13, 2016
Loan Amount:	$48,431,000.00

Reserve Fund Information

(See Article IV)

Imposition Reserves (fill in “Collect” or “Deferred” as appropriate for each item)

Deferred		Insurance
Collect		Taxes
Deferred		water/sewer
N/A		Ground Rents
Deferred		assessments/other charges

Repairs & Repair Reserve	Repairs required?	x Yes	¨ No
	If No, is radon testing required?	¨ Yes	¨ No
	If Yes, is a Reserve required?	x Yes	¨ No
If Yes to Repairs, but No Reserve, is a Letter of Credit required?		¨ Yes	¨ No

Replacement Reserve	x Yes If Yes: x Funded ¨ Deferred
	¨ No

Rental Achievement Reserve	¨ Yes If Yes: ¨ Cash ¨ Letter of Credit
	x No

Rate Cap Agreement Reserve	x Yes	¨ No

Other Reserve(s)	¨ Yes	x No

If Yes, specify:

Lease-Up Transaction

¨ Yes

x No

If Yes, is a Reserve required?	¨ Yes	¨ No

If Yes, is a Letter of Credit required?	¨ Yes	¨ No

Attached Riders

(See Article XIII)

Name of Rider		Date Revised
Rider to Multifamily Loan and Security Agreement - Repair Reserve Fund		7-12-2016
Rider to Multifamily Loan and Security Agreement - Replacement Reserve Fund – Immediate Deposits		7-1-2014
Rider to Multifamily Loan and Security Agreement – Affiliate Transfer (MPC Partnership Holdings LLC)		7-12-2016
Rider to Multifamily Loan and Security Agreement – Affiliate Transfer (Bluerock Residential Holdings, LP)		7-12-2016
Rider to Multifamily Loan and Security Agreement - Buy-Sell Transfer		7-12-2016
Rider to Multifamily Loan and Security Agreement - Rate Cap Agreement and Rate Cap Agreement Reserve Fund		1-27-2016
Rider to Multifamily Loan and Security Agreement – Entity Guarantor		3-1-2014
Rider to Multifamily Loan and Security Agreement - Termite or Wood Damaging Insect Control		3-1-2014

Exhibit B Modifications

(See Article XIV)

Are any Exhibit B modifications attached?

x Yes

¨ No

TABLE OF CONTENTS

ARTICLE I		DEFINED TERMS; CONSTRUCTION	1
1.01	Defined Terms		1
1.02	Construction		1

ARTICLE II		LOAN	2
2.01	Loan Terms		2
2.02	Prepayment Premium		2
2.03	Exculpation		2
2.04	Application of Payments		2
2.05	Usury Savings		2
2.06	Floating Rate Mortgage - Third Party Cap Agreement		2

ARTICLE III		LOAN SECURITY AND GUARANTY	3
3.01	Security Instrument		3
3.02	Reserve Funds		3
3.03	Uniform Commercial Code Security Agreement		3
3.04	Cap Agreement and Cap Collateral Assignment		4
3.05	Guaranty		4
3.06	Reserved		4
3.07	Reserved		4
3.08	Reserved		4

ARTICLE IV		RESERVE FUNDS AND REQUIREMENTS	4
4.01	Reserves Generally		4
4.02	Reserves for Taxes, Insurance and Other Charges		5
4.03	Repairs; Repair Reserve Fund		6
4.04	Replacement Reserve Fund		6
4.05	Rental Achievement Provisions		6
4.06	Debt Service Reserve		6
4.07	Rate Cap Agreement Reserve Fund		6
4.08	through 4.20 are Reserved		6

ARTICLE V		REPRESENTATIONS AND WARRANTIES	6
5.01	Review of Documents		6
5.02	Condition of Mortgaged Property		6
5.03	No Condemnation		6
5.04	Actions; Suits; Proceedings		6
5.05	Environmental		7
5.06	Commencement of Work; No Labor or Materialmen’s Claims		8
5.07	Compliance with Applicable Laws and Regulations		8
5.08	Access; Utilities; Tax Parcels		8
5.09	Licenses and Permits		9
5.10	No Other Interests		9
5.11	Term of Leases		9
5.12	No Prior Assignment; Prepayment of Rents		9
5.13	Illegal Activity		9
5.14	Taxes Paid		9
5.15	Title Exceptions		10
5.16	No Change in Facts or Circumstances		10
5.17	Financial Statements		10
5.18	ERISA – Borrower Status		10

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5.19	No Fraudulent Transfer or Preference		10
5.20	No Insolvency or Judgment		11
5.21	Working Capital		11
5.22	Cap Collateral		11
5.23	Ground Lease		11
5.24	Purpose of Loan		11
5.25	Through 5.39 are Reserved		12
5.40	Recycled SPE Borrower		12
5.41	Recycled SPE Equity Owner		12
5.42	through 5.50 are Reserved		12
5.51	Survival		12
5.52	through 5.57 are Reserved		12
5.58	Prohibited Parties Lists; Economic Sanctions Laws		12
5.59	through 5.62 are Reserved		13

ARTICLE VI		BORROWER COVENANTS	13
6.01	Compliance with Laws		13
6.02	Compliance with Organizational Documents		13
6.03	Use of Mortgaged Property		13
6.04	Non-Residential Leases		14
6.05	Prepayment of Rents		16
6.06	Inspection		16
6.07	Books and Records; Financial Reporting		17
6.08	Taxes; Operating Expenses; Ground Rents		20
6.09	Preservation, Management and Maintenance of Mortgaged Property		21
6.10	Insurance		25
6.11	Condemnation		29
6.12	Environmental Hazards		32
6.13	Single Purpose Entity Requirements		34
6.14	Repairs and Capital Replacements		38
6.15	Residential Leases Affecting the Mortgaged Property		39
6.16	Litigation; Government Proceedings		39
6.17	Further Assurances and Estoppel Certificates; Lender’s Expenses		40
6.18	Cap Collateral		40
6.19	Ground Lease		40
6.20	ERISA Requirements		40
6.21	through 6.52 are Reserved		41
6.53	Economic Sanctions Laws		41
6.54	through 6.58 are Reserved		41

ARTICLE VII		TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER	41
7.01	Permitted Transfers		41
7.02	Prohibited Transfers		42
7.03	Conditionally Permitted Transfers		43
7.04	Preapproved Intrafamily Transfers		47
7.05	Lender’s Consent to Prohibited Transfers		49
7.06	SPE Equity Owner Requirement Following Transfer		51
7.07	Additional Transfer Requirements - External Cap Agreement		51
7.08	Reserved		52
7.09	Reserved		52

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ARTICLE VIII		SUBROGATION	52

ARTICLE IX		EVENTS OF DEFAULT AND REMEDIES	52
9.01	Events of Default		52
9.02	Protection of Lender’s Security; Security Instrument Secures Future Advances		55
9.03	Remedies		56
9.04	Forbearance		57
9.05	Waiver of Marshalling		57

ARTICLE X		RELEASE; INDEMNITY	58
10.01	Release		58
10.02	Indemnity		58
10.03	Reserved		63

ARTICLE XI		MISCELLANEOUS PROVISIONS	63
11.01	Waiver of Statute of Limitations, Offsets and Counterclaims		63
11.02	Governing Law; Consent to Jurisdiction and Venue		63
11.03	Notice		63
11.04	Successors and Assigns Bound		64
11.05	Joint and Several (and Solidary) Liability		64
11.06	Relationship of Parties; No Third Party Beneficiary		64
11.07	Severability; Amendments		65
11.08	Disclosure of Information		65
11.09	Determinations by Lender		65
11.10	Sale of Note; Change in Servicer; Loan Servicing		65
11.11	Supplemental Financing		66
11.12	Defeasance		70
11.13	Lender’s Rights to Sell or Securitize		73
11.14	Cooperation with Rating Agencies and Investors		73
11.15	Letter of Credit Requirements		73
11.16	through 11.18 are Reserved		74
11.19	State Specific Provisions		74
11.20	Time is of the Essence		74

ARTICLE XII		DEFINITIONS	75

ARTICLE XIII		INCORPORATION OF ATTACHED RIDERS	89

ARTICLE XIV		INCORPORATION OF ATTACHED EXHIBITS	89

ARTICLE XV		RESERVED	89

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MULTIFAMILY LOAN AND SECURITY AGREEMENT

THIS MULTIFAMILY LOAN AND SECURITY AGREEMENT (“ Loan Agreement ”) is dated as of the 13th day of October, 2016 and is made by and between BR CARROLL GLENRIDGE, LLC , a Delaware limited liability company (“ Borrower ”), and KEYBANK NATIONAL ASSOCIATION , a national banking association (together with its successors and assigns, “ Lender ”).

RECITAL

Lender has agreed to make and Borrower has agreed to accept a loan in the original principal amount of $48,431,000.00 (“ Loan ”). Lender is willing to make the Loan to Borrower upon the terms and subject to the conditions set forth in this Loan Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of these promises, the mutual covenants contained in this Loan Agreement and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

ARTICLE I

DEFINED TERMS; CONSTRUCTION.

1.01

Defined Terms. Each defined term in this Loan Agreement will have the meaning ascribed to that term in Article XII unless otherwise defined in this Loan Agreement.

1.02

Construction.

(a)

The captions and headings of the Articles and Sections of this Loan Agreement are for convenience only and will be disregarded in construing this Loan Agreement.

(b)

Any reference in this Loan Agreement to an “Exhibit,” an “Article” or a “Section” will, unless otherwise explicitly provided, be construed as referring, respectively, to an Exhibit attached to this Loan Agreement or to an Article or Section of this Loan Agreement.

(c)

All Exhibits and Riders attached to or referred to in this Loan Agreement are incorporated by reference in this Loan Agreement.

(d)

Any reference in this Loan Agreement to a statute or regulation will be construed as referring to that statute or regulation as amended from time to time.

(e)

Use of the singular in this Loan Agreement includes the plural and use of the plural includes the singular.

(f)

As used in this Loan Agreement, the term “including” means “including, but not limited to” and the term “includes” means “includes without limitation.”

(g)

The use of one gender includes the other gender, as the context may require.

(h)

Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document in this Loan Agreement will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth in this Loan Agreement), and (ii) any reference in this Loan Agreement to any Person will be construed to include such Person’s successors and assigns.

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(i)

Any reference in this Loan Agreement to “Lender’s requirements,” “as required by Lender,” or similar references will be construed, after Securitization, to mean Lender’s requirements or standards as determined in accordance with Lender’s and Loan Servicer’s obligations under the terms of the Securitization documents.

ARTICLE II

LOAN.

2.01

Loan Terms. The Loan will be evidenced by the Note and will bear interest and be paid in accordance with the payment terms set forth in the Note.

2.02

Prepayment Premium. Borrower will be required to pay a prepayment premium in connection with certain prepayments of the Indebtedness, including a payment made after Lender’s exercise of any right of acceleration of the Indebtedness, as provided in the Note.

2.03

Exculpation. Borrower’s personal liability for payment of the Indebtedness and for performance of the other obligations to be performed by it under this Loan Agreement is limited in the manner, and to the extent, provided in the Note.

2.04

Application of Payments. If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, then Lender may apply that payment to amounts then due and payable in any manner and in any order determined by Lender (unless otherwise required by applicable law), in Lender’s sole and absolute discretion. Neither Lender’s acceptance of an amount that is less than all amounts then due and payable, nor Lender’s application of such payment in the manner authorized, will constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction. Notwithstanding the application of any such amount to the Indebtedness, Borrower’s obligations under this Loan Agreement, the Note and all other Loan Documents will remain unchanged.

2.05

Usury Savings. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower is interpreted so that any charge provided for in any Loan Document, whether considered separately or together with other charges levied in connection with any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that charge is reduced to the extent necessary to eliminate that violation. The amounts, if any, previously paid to Lender in excess of the permitted amounts will be applied by Lender to reduce the principal amount of the Indebtedness. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness which constitutes interest, as well as all other charges levied in connection with the Indebtedness which constitute interest, will be deemed to be allocated and spread ratably over the stated term of the Note. Unless otherwise required by applicable law, such allocation and spreading will be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of the Note.

2.06

Floating Rate Mortgage - Third Party Cap Agreement. If (a) the Note does not provide for interest to accrue at a floating or variable interest rate (other than during any Extension Period, if applicable), and (b) a third party Cap Agreement is not required, then this Section 2.06 and Section 3.04 will be of no force or effect.

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(a)

So long as there is no Event of Default, Lender or Loan Servicer will remit to Borrower each Cap Payment received by Lender or Loan Servicer with respect to any month for which Borrower has paid in full the monthly installment of principal and interest or interest only, as applicable, due under the Note. Alternatively, at Lender’s option, so long as there is no Event of Default, Lender may apply a Cap Payment received by Lender or Loan Servicer with respect to any month to the applicable monthly payment of accrued interest due under the Note if Borrower has paid in full the remaining portion of such monthly payment of principal and interest or interest only, as applicable.

(b)

Neither the existence of a Cap Agreement nor anything in this Loan Agreement will relieve Borrower of its primary obligation to timely pay in full all amounts due under the Note and otherwise due on account of the Indebtedness.

ARTICLE III

LOAN SECURITY AND GUARANTY.

3.01

Security Instrument. Borrower will execute the Security Instrument dated of even date with this Loan Agreement. The Security Instrument will be recorded in the applicable land records in the Property Jurisdiction.

3.02

Reserve Funds.

(a)

Security Interest . To secure Borrower’s obligations under this Loan Agreement and to further secure Borrower’s obligations under the Note and the other Loan Documents, Borrower conveys, pledges, transfers and grants to Lender a security interest pursuant to the Uniform Commercial Code of the Property Jurisdiction or any other applicable law in and to all money in the Reserve Funds, as the same may increase or decrease from time to time, all interest and dividends thereon and all proceeds thereof.

(b)

Supplemental Loan . If this Loan Agreement is entered into in connection with a Supplemental Loan and if the same Person is or becomes both Senior Lender and Supplemental Lender, then:

(i)

Borrower assigns and grants to Supplemental Lender a security interest in the Reserve Funds established in connection with the Senior Indebtedness as additional security for all of Borrower’s obligations under the Supplemental Note.

(ii)

In addition, Borrower assigns and grants to Senior Lender a security interest in the Reserve Funds established in connection with the Supplemental Indebtedness as additional security for all of Borrower’s obligations under the Senior Note.

(iii)

It is the intention of Borrower that all amounts deposited by Borrower in connection with either the Senior Loan Documents, the Supplemental Loan Documents, or both, constitute collateral for the Supplemental Indebtedness secured by the Supplemental Instrument and the Senior Indebtedness secured by the Senior Instrument, with the application of such amounts to such Senior Indebtedness or Supplemental Indebtedness to be at the discretion of Senior Lender and Supplemental Lender.

3.03

Uniform Commercial Code Security Agreement. This Loan Agreement is also a security agreement under the Uniform Commercial Code for any of the Mortgaged Property which, under applicable law, may be subjected to a security interest under the Uniform Commercial Code, for the purpose of securing Borrower’s obligations under this Loan Agreement and to further secure Borrower’s obligations under the Note, Security Instrument and other Loan Documents, whether such Mortgaged Property is owned now or acquired in the future, and all products and cash and non-cash proceeds thereof (collectively, “ UCC Collateral ”), and by this Loan Agreement, Borrower grants to Lender a security interest in the UCC Collateral.

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3.04

Cap Agreement and Cap Collateral Assignment. Reserved.

3.05

Guaranty. Borrower will cause each Guarantor (if any) to execute a Guaranty of all or a portion of Borrower’s obligations under the Loan Documents effective as of the date of this Loan Agreement.

3.06

Reserved.

3.07

Reserved.

3.08

Reserved.

ARTICLE IV

RESERVE FUNDS AND REQUIREMENTS.

4.01

Reserves Generally.

(a)

Establishment of Reserve Funds; Investment of Deposits . Unless otherwise provided in Section 4.03 and/or Section 4.04, each Reserve Fund will be established on the date of this Loan Agreement and each of the following will apply:

(i)

All Reserve Funds will be deposited in an Eligible Account at an Eligible Institution or invested in “permitted investments” as then defined and required by the Rating Agencies.

(ii)

Lender will not be obligated to open additional accounts or deposit Reserve Funds in additional institutions when the amount of any Reserve Fund exceeds the maximum amount of the federal deposit insurance or guaranty. Borrower acknowledges and agrees that it will not have the right to direct Lender as to any specific investment of monies in any Reserve Fund. Lender will not be responsible for any losses resulting from investment of monies in any Reserve Fund or for obtaining any specific level or percentage of earnings on such investment.

(b)

Interest on Reserve Funds; Trust Funds . Unless applicable law requires, Lender will not be required to pay Borrower any interest, earnings or profits on the Reserve Funds. Any amounts deposited with Lender under this Article IV will not be trust funds, nor will they operate to reduce the Indebtedness, unless applied by Lender for that purpose pursuant to the terms of this Loan Agreement.

(c)

Use of Reserve Funds . Each Reserve Fund will, except as otherwise provided in this Loan Agreement, be used for the sole purpose of paying, or reimbursing Borrower for payment of, the item(s) for which the applicable Reserve Fund was established. Borrower acknowledges and agrees that, except as specified in this Loan Agreement, monies in one Reserve Fund will not be used to pay, or reimburse Borrower for, matters for which another Reserve Fund has been established.

(d)

Termination of Reserve Funds . Upon the payment in full of the Indebtedness, Lender will pay to Borrower all funds remaining in any Reserve Funds.

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(e)

Reserved.

4.02

Reserves for Taxes, Insurance and Other Charges.

(a)

Deposits to Imposition Reserve Deposits . Borrower will deposit with Lender on the day monthly installments of principal or interest, or both, are due under the Note (or on another day designated in writing by Lender), until the Indebtedness is paid in full, an additional amount sufficient to accumulate with Lender the entire sum required to pay, when due, the items marked “Collect” below. Except as provided in Section 4.02(e), Lender will not require Borrower to make Imposition Reserve Deposits with respect to the items marked “Deferred” below.

	[Deferred]	Property Insurance premiums or premiums for other Insurance required by Lender under Section 6.10
	[Collect]	Taxes and payments in lieu of taxes
	[Deferred]	water and sewer charges that could become a Lien on the Mortgaged Property
	[N/A]	Ground Rents
	[Deferred]	assessments or other charges that could become a Lien on the Mortgaged Property, including home owner association dues

The amounts deposited pursuant to this Section 4.02(a) are collectively referred to in this Loan Agreement as the “ Imposition Reserve Deposits .” The obligations of Borrower for which the Imposition Reserve Deposits are required are collectively referred to in this Loan Agreement as “ Impositions .” The amount of the Imposition Reserve Deposits must be sufficient to enable Lender to pay each Imposition before the last date upon which such payment may be made without any penalty or interest charge being added. Lender will maintain records indicating how much of the monthly Imposition Reserve Deposits and how much of the aggregate Imposition Reserve Deposits held by Lender are held for the purpose of paying Taxes, Insurance premiums, Ground Rent (if applicable) and each other Imposition.

(b)

Disbursement of Imposition Reserve Deposits . Lender will apply the Imposition Reserve Deposits to pay Impositions so long as no Event of Default has occurred and is continuing. Lender will pay all Impositions from the Imposition Reserve Deposits held by Lender upon Lender’s receipt of a bill or invoice for an Imposition. If Borrower holds a ground lessee interest in the Mortgaged Property and Imposition Reserve Deposits are collected for Ground Rent, then Lender will pay the monthly or other periodic installments of Ground Rent from the Imposition Reserve Deposits, whether or not Lender receives a bill or invoice for such installments. Lender will have no obligation to pay any Imposition to the extent it exceeds the amount of the Imposition Reserve Deposits then held by Lender. Lender may pay an Imposition according to any bill, statement or estimate from the appropriate public office, Ground Lessor (if applicable) or insurance company without inquiring into the accuracy of the bill, statement or estimate or into the validity of the Imposition.

(c)

Excess or Deficiency of Imposition Reserve Deposits . If at any time the amount of the Imposition Reserve Deposits held by Lender for payment of a specific Imposition exceeds the amount reasonably deemed necessary by Lender, the excess will be credited against future installments of Imposition Reserve Deposits. If at any time the amount of the Imposition Reserve Deposits held by Lender for payment of a specific Imposition is less than the amount reasonably estimated by Lender to be necessary, Borrower will pay to Lender the amount of the deficiency within 15 days after Notice from Lender.

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(d)

Delivery of Invoices . Borrower will promptly deliver to Lender a copy of all notices of, and invoices for, Impositions.

(e)

Deferral of Collection of Any Imposition Reserve Deposits; Delivery of Receipts . If Lender does not collect an Imposition Reserve Deposit with respect to an Imposition either marked “Deferred” in Section 4.02(a) or pursuant to a separate written deferral by Lender, then on or before the earlier of the date each such Imposition is due, or the date this Loan Agreement requires each such Imposition to be paid, Borrower will provide Lender with proof of payment of each such Imposition. Upon Notice to Borrower, Lender may revoke its deferral and require Borrower to deposit with Lender any or all of the Imposition Reserve Deposits listed in Section 4.02(a), regardless of whether any such item is marked “Deferred” (i) if Borrower does not timely pay any of the Impositions, (ii) if Borrower fails to provide timely proof to Lender of such payment, (iii) at any time during the existence of an Event of Default or (iv) upon placement of a Supplemental Loan in accordance with Section 11.11.

(f)

through (i) are Reserved.

4.03

Repairs; Repair Reserve Fund. Reserved.

4.04

Replacement Reserve Fund. Reserved.

4.05

Rental Achievement Provisions. Reserved.

4.06

Debt Service Reserve. Reserved.

4.07

Rate Cap Agreement Reserve Fund. Reserved.

4.08

through 4.20 are Reserved.

ARTICLE V

REPRESENTATIONS AND WARRANTIES.

Borrower represents and warrants to Lender as follows as of the date of this Loan Agreement:

5.01

Review of Documents. Borrower has reviewed: (a) the Note, (b) the Security Instrument, (c) the Commitment Letter, and (d) all other Loan Documents.

5.02

Condition of Mortgaged Property. Except as Borrower may have disclosed to Lender in writing in connection with the issuance of the Commitment Letter, the Mortgaged Property has not been damaged by fire, water, wind or other cause of loss, or any previous damage to the Mortgaged Property has been fully restored.

5.03

No Condemnation. No part of the Mortgaged Property has been taken in Condemnation or other like proceeding, and, to the best of Borrower’s knowledge after due inquiry and investigation, no such proceeding is pending or threatened for the partial or total Condemnation or other taking of the Mortgaged Property.

5.04

Actions; Suits; Proceedings.

(a)

There are no judicial, administrative, mediation or arbitration actions, suits or proceedings pending or, to the best of Borrower’s knowledge, threatened in writing against or affecting Borrower (and, if Borrower is a limited partnership, any of its general partners or if Borrower is a limited liability company, any member of Borrower) or the Mortgaged Property which, if adversely determined, would have a Material Adverse Effect.

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(b)

Reserved.

5.05

Environmental. Except as previously disclosed by Borrower to Lender in writing (which written disclosure may be in certain environmental assessments and other written reports accepted by Lender in connection with the funding of the Indebtedness and dated prior to the date of this Loan Agreement), each of the following is true:

(a)

Borrower has not at any time engaged in, caused or permitted any Prohibited Activities or Conditions on the Mortgaged Property.

(b)

To the best of Borrower’s knowledge after due inquiry and investigation, no Prohibited Activities or Conditions exist or have existed on the Mortgaged Property.

(c)

The Mortgaged Property does not now contain any underground storage tanks, and, to the best of Borrower’s knowledge after due inquiry and investigation, the Mortgaged Property has not contained any underground storage tanks in the past. If there is an underground storage tank located on the Mortgaged Property that has been previously disclosed by Borrower to Lender in writing, that tank complies with all requirements of Hazardous Materials Laws.

(d)

To the best of Borrower’s knowledge after due inquiry and investigation, Borrower has complied with all Hazardous Materials Laws, including all requirements for notification regarding releases of Hazardous Materials. Without limiting the generality of the foregoing, all Environmental Permits required for the operation of the Mortgaged Property in accordance with Hazardous Materials Laws now in effect have been obtained and all such Environmental Permits are in full force and effect.

(e)

To the best of Borrower’s knowledge after due inquiry and investigation, no event has occurred with respect to the Mortgaged Property that constitutes, or with the passage of time or the giving of notice, or both, would constitute, noncompliance with the terms of any Environmental Permit.

(f)

There are no actions, suits, claims or proceedings pending or, to the best of Borrower’s knowledge after due inquiry and investigation, threatened in writing, that involve the Mortgaged Property and allege, arise out of, or relate to any Prohibited Activity or Condition.

(g)

Borrower has received no actual or constructive notice of any written complaint, order, notice of violation or other communication from any Governmental Authority with regard to air emissions, water discharges, noise emissions or Hazardous Materials, or any other environmental, health or safety matters affecting the Mortgaged Property or any property that is adjacent to the Mortgaged Property.

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5.06

Commencement of Work; No Labor or Materialmen’s Claims. Except as set forth on Exhibit E , prior to the recordation of the Security Instrument, no work of any kind has been or will be commenced or performed upon the Mortgaged Property, and no materials or equipment have been or will be delivered to or upon the Mortgaged Property, for which the contractor, subcontractor or vendor continues to have any rights including the existence of or right to assert or file a mechanic’s or materialmen’s Lien. If any such work of any kind has been commenced or performed upon the Mortgaged Property, or if any such materials or equipment have been ordered or delivered to or upon the Mortgaged Property, then prior to the execution of the Security Instrument, Borrower has satisfied each of the following conditions:

(a)

Borrower has fully disclosed in writing to the title insurance company issuing the mortgagee title insurance policy insuring the Lien of the Security Instrument that work has been commenced or performed on the Mortgaged Property, or materials or equipment have been ordered or delivered to or upon the Mortgaged Property.

(b)

Borrower has obtained and delivered to Lender and the title company issuing the mortgagee title insurance policy insuring the Lien of the Security Instrument Lien waivers from all contractors, subcontractors, suppliers or any other applicable party, pertaining to all work commenced or performed on the Mortgaged Property, or materials or equipment ordered or delivered to or upon the Mortgaged Property.

Borrower represents and warrants that all parties furnishing labor and materials for which a Lien or claim of Lien may be filed against the Mortgaged Property have been paid in full and, except for such Liens or claims insured against by the policy of title insurance to be issued in connection with the Loan, there are no mechanics’, laborers’ or materialmen’s Liens or claims outstanding for work, labor or materials affecting the Mortgaged Property, whether prior to, equal with or subordinate to the Lien of the Security Instrument.

5.07

Compliance with Applicable Laws and Regulations.

(a)

To the best of Borrower’s knowledge after due inquiry and investigation, each of the following is true:

(i)

All Improvements and the use of the Mortgaged Property comply with all applicable statutes, rules and regulations, including all applicable statutes, rules and regulations pertaining to requirements for equal opportunity, anti-discrimination, fair housing, environmental protection, zoning and land use (“legal, non-conforming” status with respect to uses or structures will be considered to comply with zoning and land use requirements for the purposes of this representation).

(ii)

The Improvements comply with applicable health, fire, and building codes.

(iii)

There is no evidence of any illegal activities relating to controlled substances on the Mortgaged Property.

(b)

Reserved.

(c)

Reserved.

5.08

Access; Utilities; Tax Parcels. The Mortgaged Property: (a) has ingress and egress via a publicly dedicated right of way or via an irrevocable easement permitting ingress and egress, (b) is served by public utilities and services generally available in the surrounding community or otherwise appropriate for the use in which the Mortgaged Property is currently being utilized, and (c) constitutes one or more separate tax parcels.

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5.09

Licenses and Permits.

(a)

Borrower, any commercial tenant of the Mortgaged Property and/or any operator of the Mortgaged Property is in possession of all material licenses, permits and authorizations required for use of the Mortgaged Property, which are valid and in full force and effect as of the date of this Loan Agreement.

(b)

Through (i) are reserved.

5.10

No Other Interests. To the best of Borrower’s knowledge after due inquiry and investigation, no Person has (a) any possessory interest in the Mortgaged Property or right to occupy the Mortgaged Property except under and pursuant to the provisions of existing Leases by and between tenants and Borrower (a form of residential lease having been previously provided to Lender together with the material terms of any and all Non-Residential Leases at the Mortgaged Property), or (b) an option to purchase the Mortgaged Property or an interest in the Mortgaged Property, except as has been disclosed to and approved in writing by Lender.

5.11

Term of Leases. All Leases for residential dwelling units with respect to the Mortgaged Property satisfy each of the following conditions:

(a)

They are on forms that are customary for similar multifamily properties in the Property Jurisdiction.

(b)

They are for initial terms of at least 6 months and not more than 2 years (unless otherwise approved in writing by Lender).

(c)

They do not include any Corporate Leases (unless otherwise approved in writing by Lender).

(d)

They do not include options to purchase.

5.12

No Prior Assignment; Prepayment of Rents. Borrower has (a) not executed any prior assignment of Rents (other than an assignment of Rents securing any prior indebtedness that is being assigned to Lender, or that is being paid off and discharged with the proceeds of the Loan evidenced by the Note or, if this Loan Agreement is entered into in connection with a Supplemental Loan, other than an assignment of Rents securing any Senior Indebtedness), and (b) not performed any acts and has not executed, and will not execute, any instrument which would prevent Lender from exercising its rights under any Loan Document. At the time of execution of this Loan Agreement, unless otherwise approved by Lender in writing, there has been no prepayment of any Rents for more than 2 months prior to the due dates of such Rents.

5.13

Illegal Activity. No portion of the Mortgaged Property has been or will be purchased with the proceeds of any illegal activity.

5.14

Taxes Paid. Borrower has filed all federal, state, county and municipal tax returns required to have been filed by Borrower, and has paid all Taxes which have become due pursuant to such returns or to any notice of assessment received by Borrower, and Borrower has no knowledge of any basis for additional assessment with respect to such Taxes. To the best of Borrower’s knowledge after due inquiry and investigation, there are not presently pending any special assessments against the Mortgaged Property or any part of the Mortgaged Property.

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5.15

Title Exceptions. To the best of Borrower’s knowledge after due inquiry and investigation, none of the items shown in the schedule of exceptions to coverage in the title policy issued to and accepted by Lender contemporaneously with the execution of this Loan Agreement and insuring Lender’s interest in the Mortgaged Property will have a Material Adverse Effect on the (a) ability of Borrower to pay the Loan in full, (b) ability of Borrower to use all or any part of the Mortgaged Property in the manner in which the Mortgaged Property is being used on the Closing Date, except as set forth in Section 6.03, (c) operation of the Mortgaged Property, or (d) value of the Mortgaged Property.

5.16

No Change in Facts or Circumstances.

(a)

All information in the application for the Loan submitted to Lender, including all financial statements for the Mortgaged Property, Borrower, and any Borrower Principal, and all Rent Schedules, reports, certificates, and any other documents submitted in connection with the application (collectively, “ Loan Application ”) is complete and accurate in all material respects as of the date such information was submitted to Lender.

(b)

There has been no change in any fact or circumstance since the Loan Application was submitted to Lender that would make any information submitted as part of the Loan Application materially incomplete or inaccurate.

(c)

The organizational structure of Borrower is as set forth in Exhibit H .

5.17

Financial Statements. The financial statements of Borrower and each Borrower Principal furnished to Lender as part of the Loan Application reflect in each case a positive net worth as of the date of the applicable financial statement.

5.18

ERISA – Borrower Status. Borrower represents as follows:

(a)

Borrower is not an “investment company,” or a company under the Control of an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended.

(b)

Borrower is not an “employee benefit plan,” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA or a “plan” to which Section 4975 of the Tax Code applies, and the assets of Borrower do not constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA.

(c)

Borrower is not a "governmental plan" within the meaning of Section 3(32) of ERISA, and is not subject to state statutes regulating investments or fiduciary obligations with respect to governmental plans.

5.19

No Fraudulent Transfer or Preference. No Borrower or Borrower Principal (a) has made, or is making in connection with and as security for the Loan, a transfer of an interest in the property of Borrower or Borrower Principal to or for the benefit of Lender or otherwise as security for any of the obligations under the Loan Documents which is or could constitute a voidable preference under federal bankruptcy, state insolvency or similar applicable creditors’ rights laws, or (b) has made, or is making in connection with the Loan, a transfer (including any transfer to or for the benefit of an insider under an employment contract) of an interest of Borrower or any Borrower Principal in property which is or could constitute a voidable preference under federal bankruptcy, state insolvency or similar applicable creditors’ rights laws, or (c) has incurred, or is incurring in connection with the Loan, any obligation (including any obligation to or for the benefit of an insider under an employment contract) which is or could constitute a fraudulent transfer under federal bankruptcy, state insolvency, or similar applicable creditors’ rights laws.

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5.20

No Insolvency or Judgment.

(a)

No Pending Proceedings or Judgments . No Borrower or Borrower Principal is (i) the subject of or a party to (other than as a creditor) any completed or pending bankruptcy, reorganization or insolvency proceeding, or (ii) the subject of any judgment unsatisfied of record or docketed in any court located in the United States.

(b)

Insolvency . Borrower is not presently insolvent, and the Loan will not render Borrower insolvent. As used in this Section, the term “insolvent” means that the total of all of a Person’s liabilities (whether secured or unsecured, contingent or fixed, or liquidated or unliquidated) is in excess of the value of all of the assets of the Person that are available to satisfy claims of creditors.

5.21

Working Capital. After the Loan is made, Borrower intends to have sufficient working capital, including cash flow from the Mortgaged Property or other sources, not only to adequately maintain the Mortgaged Property, but also to pay all of Borrower’s outstanding debts as they come due (other than any balloon payment due upon the maturity of the Loan). Lender acknowledges that no members or partners of Borrower or any Borrower Principal will be obligated to contribute equity to Borrower for purposes of providing working capital to maintain the Mortgaged Property or to pay Borrower’s outstanding debts except as may otherwise be required under their organizational documents.

5.22

Cap Collateral. Reserved.

5.23

Ground Lease. Reserved.

5.24

Purpose of Loan. The purpose of the Loan is as indicated by the checked boxes below:

Refinance Loan : The Loan is a refinancing of existing indebtedness and, except to the extent specifically required by Lender, there is to be no change in the ownership of either the Mortgaged Property or Borrower Principals. The intended use of any cash received by Borrower from Lender, to the extent applicable, in connection with the refinancing has been fully disclosed to Lender.

Acquisition Loan – Mortgaged Property : All of the consideration given or received or to be given or received in connection with the acquisition of the Mortgaged Property has been fully disclosed to Lender. The Mortgaged Property was or will be purchased from RPG Glenridge LLC, a Delaware limited liability company (“ Property Seller ”). No Borrower or Borrower Principal has or had, directly or indirectly (through a family member or otherwise), any interest in the Property Seller and the acquisition of the Mortgaged Property is an arm’s-length transaction. To the best of Borrower’s knowledge after due inquiry and investigation, the purchase price of the Mortgaged Property represents the fair market value of the Mortgaged Property and Property Seller is not or will not be insolvent subsequent to the sale of the Mortgaged Property.

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Acquisition Loan – Membership Interests : All of the consideration given or received or to be given or received in connection with the acquisition of 100% of the membership interests of the Borrower (“ Membership Interests ”) has been fully disclosed to Lender. The Membership Interests were or will be purchased from _________________________________ (“ Membership Interests Seller ”). No Borrower Principal has or had, directly or indirectly (through a family member or otherwise), any interest in the Membership Interests Seller and the acquisition of the Membership Interests is an arm’s-length transaction. To the best of Borrower’s knowledge after due inquiry and investigation, the purchase price of the Membership Interests represents the fair market value of the Membership Interests and Membership Interest Seller is not or will not be insolvent subsequent to the sale of the Membership Interest.

Supplemental Loan : The Loan is a Supplemental Loan and, except to the extent specifically required or approved by Lender, there has been no change in the ownership of either the Mortgaged Property or Borrower Principals since the date of the Senior Note. The intended use of any cash received by Borrower from Lender, to the extent applicable, in connection with the Supplemental Loan has been fully disclosed to Lender.

Cross-Collateralized/Cross-Defaulted Loan Pool : The Loan is part of a cross-collateralized/cross-defaulted pool of loans described as follows:

____ being simultaneously made to Borrower and/or Borrower’s Affiliates

____ made previously to Borrower and/or Borrower’s Affiliates

The intended use of any cash received by Borrower from Lender, to the extent applicable, in connection with the Loan and the other loans comprising the cross-collateralized/cross-defaulted loan pool has been fully disclosed to Lender.

5.25

through 5.39 are reserved.

5.40

Recycled SPE Borrower. Reserved.

5.41

Recycled SPE Equity Owner. Reserved.

5.42

through 5.50 are Reserved.

5.51

Survival. The representations and warranties set forth in this Loan Agreement will survive until the Indebtedness is paid in full; however, the representations and warranties set forth in Section 5.05 will survive beyond repayment of the entire Indebtedness, to the extent provided in Section 10.02(i).

5.52

through 5.57 are Reserved.

5.58

Prohibited Parties Lists; Economic Sanctions Laws. To the best of Borrower’s knowledge, after due inquiry and investigation, none of (a) Borrower, (b) any Borrower Principal, (c) any Person with a collective equity interest (whether direct or indirect) in Borrower of 25% or more, or (d) any Non-U.S. Equity Holder, is presently listed or at any time has been listed on any Prohibited Parties List.

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5.59

through 5.62 are Reserved.

ARTICLE VI

BORROWER COVENANTS.

6.01

Compliance with Laws. Borrower will comply with all laws, ordinances, rules, regulations and requirements of any Governmental Authority having jurisdiction over the Mortgaged Property and all licenses and permits and all recorded covenants and agreements relating to or affecting the Mortgaged Property, including all laws, ordinances, regulations, requirements and covenants pertaining to health and safety, construction of improvements on the Mortgaged Property, Repairs, Capital Replacements, fair housing, disability accommodation, zoning and land use, applicable building codes, special use permits and environmental regulations, Leases and the maintenance and disposition of tenant security deposits. Borrower will take appropriate measures to prevent, and will not engage in or knowingly permit, any illegal activities at the Mortgaged Property, including those that could endanger tenants or visitors, result in damage to the Mortgaged Property, result in forfeiture of the Mortgaged Property, or otherwise materially impair the Lien created by the Security Instrument or Lender’s interest in the Mortgaged Property. Borrower will at all times maintain records sufficient to demonstrate compliance with the provisions of this Section 6.01.

6.02

Compliance with Organizational Documents. Borrower will at all times comply with all laws, regulations and requirements of any Governmental Authority relating to Borrower’s formation, continued existence and good standing in its state of formation and, if different, in the Property Jurisdiction. Borrower will at all times comply with its organizational documents, including its partnership agreement (if Borrower is a partnership), its by-laws (if Borrower is a corporation or housing cooperative corporation or association) or its operating agreement (if Borrower is a limited liability company or tenancy-in-common). If Borrower is a housing cooperative corporation or association, Borrower will at all times maintain its status as a “cooperative housing corporation” as such term is defined in Section 216(b) of the Internal Revenue Code of 1986, as amended, or any successor statute thereto.

6.03

Use of Mortgaged Property.

(a)

Unless required by applicable law, without the prior written consent of Lender, Borrower will not take any of the following actions:

(i)

Allow changes in the use for which all or any part of the Mortgaged Property is being used at the time this Loan Agreement is executed.

(ii)

Convert any individual dwelling units or common areas to commercial use.

(iii)

Initiate a change in the zoning classification of the Mortgaged Property or acquiesce to a change in the zoning classification of the Mortgaged Property.

(iv)

Establish any condominium or cooperative regime with respect to the Mortgaged Property beyond any which may be in existence on the date of this Loan Agreement.

(v)

Combine all or any part of the Mortgaged Property with all or any part of a tax parcel which is not part of the Mortgaged Property.

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(vi)

Subdivide or otherwise split any tax parcel constituting all or any part of the Mortgaged Property.

(vii)

Add to or change any location at which any of the Mortgaged Property is stored, held or located unless Borrower (A) gives Notice to Lender within 30 days after the occurrence of such addition or change, (B) executes and delivers to Lender any modifications of or supplements to this Loan Agreement that Lender may require, and (C) authorizes the filing of any financing statement which may be filed in connection with this Loan Agreement, as Lender may require.

(viii)

Convert, in whole or in part, any non-residential income producing units to non-income producing units.

(b)

Reserved.

(c)

Notwithstanding anything contained in this Section to the contrary, if Borrower is a housing cooperative corporation or association, Lender acknowledges and consents to Borrower’s use of the Mortgaged Property as a housing cooperative.

6.04

Non-Residential Leases.

(a)

Prohibited New Non-Residential Leases or Modified Non-Residential Leases . Except as set forth in Section 6.04(b), Borrower will not enter into any New Non-Residential Lease, enter into any Modified Non-Residential Lease or terminate any Non-Residential Lease (including any Non-Residential Lease in existence on the date of this Loan Agreement) without the prior written consent of Lender.

(b)

New Non-Residential Leases or Modified Non-Residential Leases for which Lender’s Consent is Not Required . Lender’s consent will not be required for Borrower to enter into a Modified Non-Residential Lease or a New Non-Residential Lease, provided that the Modified Non-Residential Lease or New Non-Residential Lease satisfies each of the following requirements:

(i)

The tenant under the New Non-Residential Lease or Modified Non-Residential Lease is not an Affiliate of Borrower or any Guarantor.

(ii)

The terms of the New Non-Residential Lease or Modified Non-Residential Lease are at least as favorable to Borrower as those customary in the applicable market at the time Borrower enters into the New Non-Residential Lease or Modified Non-Residential Lease.

(iii)

The Rents paid to Borrower pursuant to the New Non-Residential Lease or Modified Non-Residential Lease are not less than 90% of the rents paid to Borrower pursuant to the Non-Residential Lease, if any, for that portion of the Mortgaged Property that was in effect prior to the New Non-Residential Lease or Modified Non-Residential Lease.

(iv)

The term of the New Non-Residential Lease or Modified Non-Residential Lease, including any option to extend, is 10 years or less.

(v)

Any New Non-Residential Lease must provide that the space may not be used or operated, in whole or in part, for any of the following:

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(A)

The operation of a so-called “head shop” or other business devoted to the sale of articles or merchandise normally used or associated with illegal or unlawful activities such as, but not limited to, the sale of paraphernalia used in connection with marijuana or controlled drugs or substances.

(B)

A gun shop, shooting gallery or firearms range.

(C)

A so-called massage parlor or any business which sells, rents or permits the viewing of so-called “adult” or pornographic materials such as, but not limited to, adult magazines, books, movies, photographs, sexual aids, sexual articles and sex paraphernalia.

(D)

Any use involving the sale or distribution of any flammable liquids, gases or other Hazardous Materials.

(E)

An off-track betting parlor or arcade.

(F)

A liquor store or other establishment whose primary business is the sale of alcoholic beverages for off-site consumption.

(G)

A burlesque or strip club.

(H)

Any illegal activity.

(vi)

The aggregate of the income derived from the space leased pursuant to the New Non-Residential Lease accounts for less than 20% of the gross income of the Mortgaged Property on the date that Borrower enters into the New Non-Residential Lease.

(vii)

Such New Non-Residential Lease is not an oil or gas lease, pipeline agreement or other instrument related to the production or sale of oil or natural gas.

(c)

Executed Copies of Non-Residential Leases . Borrower will, without request by Lender, deliver a fully executed copy of each Non-Residential Lease to Lender promptly after such Non-Residential Lease is signed.

(d)

Subordination and Attornment Requirements . All Non-Residential Leases, regardless of whether Lender’s consent or approval is required, will specifically include the following provisions:

(i)

The Lease is subordinate to the Lien of the Security Instrument, with such subordination to be self-executing.

(ii)

The tenant will attorn to Lender and any purchaser at a foreclosure sale, such attornment to be self-executing and effective upon acquisition of title to the Mortgaged Property by any purchaser at a foreclosure sale or by Lender in any manner.

(iii)

The tenant agrees to execute such further evidences of attornment as Lender or any purchaser at a foreclosure sale may from time to time request.

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(iv)

The tenant will, upon receipt of a written request from Lender following the occurrence of and during the continuance of an Event of Default, pay all Rents payable under the Lease to Lender.

(v)

Reserved.

(vi)

Reserved.

6.05

Prepayment of Rents. Borrower will not receive or accept Rent under any Lease (whether a residential Lease or a Non-Residential Lease) for more than 2 months in advance.

6.06

Inspection.

(a)

Right of Entry . Borrower will permit Lender, its agents, representatives and designees and any interested Governmental Authority to make or cause to be made entries upon and inspections of the Mortgaged Property to inspect, among other things: (i) Repairs, (ii) Capital Replacements, (iii) Restorations, (iv) Property Improvement Alterations, and (v) any other Improvements, both in process and upon completion (including environmental inspections and tests performed by professional inspection engineers) during normal business hours, or at any other reasonable time, upon reasonable Notice to Borrower if the inspection is to include occupied residential units (which Notice need not be in writing). During normal business hours, or at any other reasonable time, Borrower will also permit Lender to examine all books and records and contracts and bills pertaining to the foregoing. Notice to Borrower will not be required in the case of an emergency, as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.

(b)

Inspection of Mold . If Lender determines that Mold has or may have developed as a result of a water intrusion event or leak, Lender, at Lender’s Discretion, may require that a professional inspector inspect the Mortgaged Property to confirm whether Mold has developed and, if so, thereafter as frequently as Lender determines is necessary until any issue with Mold and its cause(s) are resolved to Lender’s satisfaction. Such inspection will be limited to a visual and olfactory inspection of the area that has experienced the Mold, water intrusion event or leak. Borrower will be responsible for the cost of each such professional inspection and any remediation deemed to be necessary as a result of the professional inspection. After any issue with Mold is remedied to Lender’s satisfaction, Lender will not require a professional inspection any more frequently than once every 3 years unless Lender otherwise becomes aware of Mold as a result of a subsequent water intrusion event or leak.

(c)

Certification in Lieu of Inspection . If Lender or Loan Servicer determines not to conduct an annual inspection of the Mortgaged Property, and in lieu thereof Lender requests a certification, Borrower will provide to Lender a factually correct certification, each year that the annual inspection is waived, to the following effect:

Borrower has not received any written complaint, notice, letter or other written communication from any tenant, Property Manager or governmental authority regarding mold, fungus, microbial contamination or pathogenic organisms (“Mold”) or any activity, condition, event or omission that causes or facilitates the growth of Mold on or in any part of the Mortgaged Property or, if Borrower has received any such written complaint, notice, letter or other written communication, that Borrower has investigated and determined that no Mold activity, condition or event exists or alternatively has fully and properly remediated such activity, condition, event or omission in compliance with the Moisture Management Plan for the Mortgaged Property.

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If Borrower is unwilling or unable to provide such certification, Lender may require a professional inspection of the Mortgaged Property at Borrower’s expense.

6.07

Books and Records; Financial Reporting.

(a)

Delivery of Books and Records . Borrower will keep and maintain at all times at the Mortgaged Property or the Property Manager’s office, and upon Lender’s request will make available at the Mortgaged Property (or, at Borrower’s option, at the Property Manager’s office), complete and accurate books of account and records (including copies of supporting bills and invoices) adequate to reflect correctly the operation of the Mortgaged Property, in accordance with GAAP consistently applied (or such other method which is reasonably acceptable to Lender), and copies of all written contracts, Leases, and other instruments which affect the Mortgaged Property. The books, records, contracts, Leases and other instruments will be subject to examination and inspection by Lender at any reasonable time.

(b)

Delivery of Statement of Income and Expenses; Rent Schedule and Other Statements . Borrower will furnish to Lender each of the following:

(i)

Within 25 days after the end of each calendar quarter prior to Securitization and within 35 days after each calendar quarter after Securitization, each of the following:

(A)

A Rent Schedule dated no earlier than the date that is 5 days prior to the end of such quarter.

(B)

A statement of income and expenses for Borrower’s operation of the Mortgaged Property that is either of the following:

(1)

For the 12 month period ending on the last day of such quarter.

(2)

If at the end of such quarter Borrower or any Affiliate of Borrower has owned the Mortgaged Property for less than 12 months, for the period commencing with the acquisition of the Mortgaged Property by Borrower or its Affiliate, and ending on the last day of such quarter.

(C)

When requested by Lender, a balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal quarter.

(ii)

Within 90 days after the end of each fiscal year of Borrower, each of the following:

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(A)

An annual statement of income and expenses for Borrower’s operation of the Mortgaged Property for that fiscal year.

(B)

A balance sheet showing all assets and liabilities of Borrower relating to the Mortgaged Property as of the end of that fiscal year and a profit and loss statement for Borrower.

(C)

An accounting of all security deposits held pursuant to all Leases, including the name of the institution (if any) and the names and identification numbers of the accounts (if any) in which such security deposits are held and the name of the person to contact at such financial institution, along with any authority or release necessary for Lender to access information regarding such accounts.

(iii)

Within 30 days after the date of filing, copies of all tax returns filed by Borrower.

(c)

Delivery of Borrower Financial Statements Upon Request . Borrower will furnish to Lender each of the following:

(i)

Upon Lender’s request, in Lender’s sole and absolute discretion prior to a Securitization, and thereafter upon Lender’s request in Lender’s Discretion, a monthly Rent Schedule and a monthly statement of income and expenses for Borrower’s operation of the Mortgaged Property, in each case within 25 days after the end of each month.

(ii)

Upon Lender’s request in Lender’s sole and absolute discretion prior to a Securitization, and thereafter upon Lender’s request in Lender’s Discretion, within 10 days after such a request from Lender, each of the following:

(A)

a statement that identifies all owners of any interest in Borrower and any Designated Entity for Transfers and the interest held by each (unless Borrower or any Designated Entity for Transfers is a publicly-traded entity in which case such statement of ownership will not be required), and if Borrower or a Designated Entity for Transfers is a corporation then all officers and directors of Borrower and the Designated Entity for Transfers, and if Borrower or a Designated Entity for Transfers is a limited liability company then all non-member Managers.

(B)

To the extent not included in the statement provided under Section 6.07(c)(ii)(A), a statement that identifies (1) all Persons with a collective equity interest (whether direct or indirect) of 25% or more in Borrower, and (2) all Non-U.S. Equity Holders.

(iii)

Upon Lender’s request in Lender’s Discretion, such other financial information or property management information (including information on tenants under Leases to the extent such information is available to Borrower, copies of bank account statements from financial institutions where funds owned or controlled by Borrower are maintained, and an accounting of security deposits) as may be required by Lender from time to time, in each case within 30 days after such request.

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(iv)

Upon Lender’s request in Lender’s Discretion, a monthly property management report for the Mortgaged Property, showing the number of inquiries made and rental applications received from tenants or prospective tenants and deposits received from tenants and any other information requested by Lender within 30 days after such request. However, Lender will not require the foregoing more frequently than quarterly except when there has been an Event of Default and such Event of Default is continuing, in which case Lender may require Borrower to furnish the foregoing more frequently.

(d)

Form of Statements; Audited Financials . A natural person having authority to bind Borrower (or the SPE Equity Owner or Guarantor, as applicable) will certify each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) to be complete and accurate. Each of the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) will be in such form and contain such detail as Lender may reasonably require. Lender also may require that any of the statements, schedules or reports listed in Sections 6.07(b), 6.07(c) and 6.07(f) be audited at Borrower’s expense by independent certified public accountants acceptable to Lender, at any time when an Event of Default has occurred and is continuing or at any time that Lender, in its reasonable judgment, determines that audited financial statements are required for an accurate assessment of the financial condition of Borrower or of the Mortgaged Property.

(e)

Failure to Timely Provide Financial Statements . If Borrower fails to provide in a timely manner the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f), Lender will give Notice to Borrower specifying the statements, schedules and reports required by Sections 6.07(b), 6.07(c) and 6.07(f) that Borrower has failed to provide. If Borrower has not provided the required statements, schedules and reports within 10 Business Days following such Notice, then (i) Borrower will pay a late fee of $500 for each late statement, schedule or report, plus an additional $500 per month that any such statement, schedule or report continues to be late, and (ii) Lender will have the right to have Borrower’s books and records audited, at Borrower’s expense, by independent certified public accountants selected by Lender in order to obtain such statements, schedules and reports, and all related costs and expenses of Lender will become immediately due and payable and will become an additional part of the Indebtedness as provided in Section 9.02. Notice to Borrower of Lender’s exercise of its rights to require an audit will not be required in the case of an emergency, as determined in Lender’s Discretion, or when an Event of Default has occurred and is continuing.

(f)

Delivery of Guarantor and SPE Equity Owner Financial Statements . Borrower will cause Guarantor and/or SPE Equity Owner to deliver each of the following to Lender within 10 Business Days following Lender’s request:

(i)

Guarantor’s or SPE Equity Owner’s (as applicable) balance sheet and profit and loss statement as of the end of (A) the quarter that ended at least 30 days prior to the due date of the requested items, and/or (B) the fiscal year that ended at least 90 days prior to the due date of the requested items.

(ii)

Other Guarantor or SPE Equity Owner (as applicable) financial statements as Lender may reasonably require.

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(iii)

Written updates on the status of all litigation proceedings that Guarantor or SPE Equity Owner (as applicable) disclosed or should have disclosed to Lender as of the Closing Date.

(iv)

If an Event of Default has occurred and is continuing, copies of Guarantor’s or SPE Equity Owner’s (as applicable) most recent filed state and federal tax returns, including any current tax return extensions.

(g)

Reporting Upon Event of Default . If an Event of Default has occurred and is continuing, Borrower will deliver to Lender upon written demand all books and records relating to the Mortgaged Property or its operation.

(h)

Credit Reports . Borrower authorizes Lender to obtain a credit report on Borrower at any time.

(i)

Reserved.

6.08

Taxes; Operating Expenses; Ground Rents.

(a)

Payment of Taxes and Ground Rent . Subject to the provisions of Sections 6.08(c) and (d), Borrower will pay or cause to be paid (i) all Taxes when due and before the addition of any interest, fine, penalty or cost for nonpayment, and (ii) if Borrower’s interest in the Mortgaged Property is as a Ground Lessee, then the monthly or other periodic installments of Ground Rent before the last date upon which each such installment may be made without penalty or interest charges being added.

(b)

Payment of Operating Expenses . Subject to the provisions of Section 6.08(c), Borrower will (i) pay the expenses of operating, managing, maintaining and repairing the Mortgaged Property (including utilities, Repairs and Capital Replacements) before the last date upon which each such payment may be made without any penalty or interest charge being added, and (ii) pay Insurance premiums at least 30 days prior to the expiration date of each policy of Insurance, unless applicable law specifies some lesser period.

(c)

Payment of Impositions and Reserve Funds . If Lender is collecting Imposition Reserve Deposits pursuant to Article IV, then so long as no Event of Default exists, Borrower will not be obligated to pay any Imposition for which Imposition Reserve Deposits are being collected, whether Taxes, Insurance premiums, Ground Rent (if applicable) or any other individual Impositions, but only to the extent that sufficient Imposition Reserve Deposits are held by Lender for the purpose of paying that specific Imposition and Borrower has timely delivered to Lender any bills or premium notices that it has received with respect to that specific Imposition (other than Ground Rent). Lender will have no liability to Borrower for failing to pay any Impositions to the extent that: (i) any Event of Default has occurred and is continuing, (ii) insufficient Imposition Reserve Deposits are held by Lender at the time an Imposition becomes due and payable, or (iii) Borrower has failed to provide Lender with bills and premium notices as provided in this Section.

(d)

Right to Contest . Borrower, at its own expense, may contest by appropriate legal proceedings, conducted diligently and in good faith, the amount or validity of any Imposition other than Insurance premiums and Ground Rent (if applicable), if: (i) Borrower notifies Lender of the commencement or expected commencement of such proceedings, (ii) the Mortgaged Property is not in danger of being sold or forfeited, (iii) if Borrower has not already paid the Imposition, Borrower deposits with Lender reserves sufficient to pay the contested Imposition, if requested by Lender, and (iv) Borrower furnishes whatever additional security is required in the proceedings or is reasonably requested by Lender, which may include the delivery to Lender of reserves established by Borrower to pay the contested Imposition.

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6.09

Preservation, Management and Maintenance of Mortgaged Property.

(a)

Maintenance of Mortgaged Property; No Waste . Borrower will keep the Mortgaged Property in good repair, including the replacement of Personalty and Fixtures with items of equal or better function and quality. Borrower will not commit waste or permit impairment or deterioration of the Mortgaged Property.

(b)

Abandonment of Mortgaged Property . Borrower will not abandon the Mortgaged Property.

(c)

Preservation of Mortgaged Property . Borrower will restore or repair promptly, in a good and workmanlike manner, any damaged part of the Mortgaged Property to the equivalent of its original condition, or such other condition as Lender may approve in writing, whether or not Insurance proceeds or Condemnation awards are available to cover any costs of such Restoration or repair; provided, however, that Borrower will not be obligated to perform such Restoration or repair if (i) no Event of Default has occurred and is continuing, and (ii) Lender has elected to apply any available Insurance proceeds and/or Condemnation awards to the payment of Indebtedness pursuant to Section 6.10(l) or Section 6.11(d).

(d)

Property Management . Borrower will provide for professional management of the Mortgaged Property by the Property Manager at all times under a property management agreement approved by Lender in writing. Borrower will not surrender, terminate, cancel, modify, renew or extend its property management agreement, or enter into any other agreement relating to the management or operation of the Mortgaged Property with Property Manager or any other Person, or consent to the assignment by the Property Manager of its interest under such property management agreement, in each case without the consent of Lender, which consent will not be unreasonably withheld.

(i)

If at any time Lender consents to the appointment of a new Property Manager, such new Property Manager and Borrower will, as a condition of Lender’s consent, execute an Assignment of Management Agreement in a form acceptable to Lender.

(ii)

If any such replacement Property Manager is an Affiliate of Borrower, and if a nonconsolidation opinion was delivered on the Closing Date, Borrower will deliver to Lender an updated nonconsolidation opinion in form and substance satisfactory to Lender with regard to nonconsolidation.

(iii)

Reserved.

(e)

Alteration of Mortgaged Property . Borrower will give Notice to Lender of and, unless otherwise directed in writing by Lender, will appear in and defend any action or proceeding purporting to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Loan Agreement. Borrower will not (and will not permit any tenant or other Person to) remove, demolish or alter the Mortgaged Property or any part of the Mortgaged Property, including any removal, demolition or alteration occurring in connection with a rehabilitation of all or part of the Mortgaged Property, except that each of the following is permitted:

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(i)

Repairs or Capital Replacements in accordance with the terms and conditions of this Loan Agreement.

(ii)

Any repairs or replacements made in connection with the replacement of tangible Personalty.

(iii)

If Borrower is a cooperative housing corporation or association, repairs or replacements to the extent permitted with respect to individual dwelling units under the form of a proprietary lease or occupancy agreement.

(iv)

Any repairs or replacements in connection with making an individual unit ready for a new occupant or pursuant to Sections 6.09(a) and (c).

(v)

Property Improvement Alterations, provided that each of the following conditions is satisfied:

(A)

At least 30 days prior to the commencement of any Property Improvement Alterations, Borrower must submit to Lender a Property Improvement Notice. The Property Improvement Notice must include all of the following information:

(1)

The expected start date and completion date of the Property Improvement Alterations.

(2)

A description of the anticipated Property Improvement Alterations to be made.

(3)

The projected budget of the Property Improvement Alterations and the source of funding.

If any changes to Property Improvement Alterations as described in the Property Improvement Notice are made that extend beyond the overall scope and intent of the Property Improvement Alterations set forth in the Property Improvement Notice ( e.g., renovations changed to renovate common areas but Property Improvement Notice only described renovations to the residential dwelling unit bathrooms), then Borrower must submit a new Property Improvement Notice to Lender in accordance with this Section 6.09(e)(v)(A).

(B)

The Property Improvement Alterations may not be commenced within 12 months prior to the Maturity Date without prior written consent of the Lender and must be completed at least 6 months prior to the Maturity Date.

(C)

Neither the performance nor completion of the Property Improvement Alterations may result in any of the following:

(1)

An adverse effect on any Major Building System.

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(2)

A change in residential dwelling unit configurations on a permanent basis.

(3)

An increase or decrease in the total number of residential dwelling units.

(4)

The demolition of any existing Improvements.

(5)

A permanent obstruction of tenants’ access to units or a temporary obstruction of tenants’ access to units without a reasonable alternative access provided during the period of renovation which causes the obstruction.

(D)

The cost of the Property Improvement Alterations made to residential dwelling units during the term of the Mortgage must not exceed the Property Improvement Total Amount.

(E)

The Leases used to calculate Minimum Occupancy for use in Section 6.09(e)(v)(I) must meet all of the following conditions:

(1)

The Leases are with tenants that are not Affiliates of Borrower or Guarantor (except as otherwise expressly agreed by Lender in writing).

(2)

The Leases are on arms’ length terms and conditions.

(3)

The Leases otherwise satisfy the requirements of the Loan Documents.

(F)

The Property Improvement Alterations must be completed in accordance with Section 6.14 and any reference to Repairs in Sections 6.06 and 6.14 will be deemed to include Property Improvement Alterations.

(G)

Upon completion of the applicable Property Improvement Alterations, Borrower must provide all of the following to the Lender:

(1)

Borrower’s Certificate of Property Improvement Alterations Completion, in the form attached as Exhibit O (“ Certificate of Completion ”).

(2)

Any other certificates or approval, acceptance or compliance required by Lender, including certificates of occupancy, from any Governmental Authority having jurisdiction over the Mortgaged Property and the Property Improvement Alterations and professional engineers certifications.

(H)

Borrower must deliver to Lender within 10 days of Lender’s request a written status update on the Property Improvement Alterations.

(I)

While Property Improvement Alterations that result in individual residential dwelling units not being available for leasing are ongoing, if a Rent Schedule shows that the occupancy of the Mortgaged Property has decreased to less than the Minimum Occupancy, Borrower must take each of the following actions:

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(1)

Complete all pending Property Improvement Alterations to such individual residential dwelling units in a timely manner until the Mortgaged Property satisfies the Minimum Occupancy requirement.

(2)

Suspend any additional Property Improvement Alterations which would cause residential dwelling units to be unavailable for leasing until the Mortgaged Property satisfies the Minimum Occupancy requirement.

(J)

If Borrower has commenced Property Improvement Alterations on the Mortgaged Property, then Borrower will deliver to Lender, upon Lender’s request, and in a timely manner, the Certificate of Completion together with such additional information as Lender may request.

(K)

At no time during the term of the Loan may the Property Improvement Total Amount (including any amounts expended by Borrower on Property Improvement Alterations for Non-Residential Units) then outstanding for services and/or materials that are then due and payable exceed 10% of the original principal loan amount; provided that at no time will such amount exceed the Property Improvement Total Amount .

(vi)

Reserved.

(vii)

Reserved.

(viii)

Reserved.

(f)

Establishment of MMP . Unless otherwise waived by Lender in writing, Borrower will have or will establish and will adhere to the MMP. If Borrower is required to have an MMP, Borrower will keep all MMP documentation at the Mortgaged Property or at the Property Manager’s office and available for review by Lender or the Loan Servicer during any annual assessment or other inspection of the Mortgaged Property that is required by Lender. At a minimum, the MMP must contain a provision for: (i) staff training, (ii) information to be provided to tenants, (iii) documentation of the plan, (iv) the appropriate protocol for incident response and remediation, and (v) routine, scheduled inspections of common space and unit interiors.

(g)

No Reduction of Housing Cooperative Charges . If Borrower is a housing cooperative corporation or association, until the Indebtedness is paid in full, Borrower will not reduce the maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy agreements below a level which is sufficient to pay all expenses of Borrower, including all operating and other expenses for the Mortgaged Property and all payments due pursuant to the terms of the Note and any Loan Documents.

(h)

through (l) are reserved.

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6.10

Insurance. At all times during the term of this Loan Agreement, Borrower will maintain at its sole cost and expense, for the mutual benefit of Borrower and Lender, all of the Insurance specified in this Section 6.10, as required by Lender and applicable law, and in such amounts and with such maximum deductibles as Lender may require, as those requirements may change:

(a)

Property Insurance . Borrower will keep the Improvements insured at all times against relevant physical hazards that may cause damage to the Mortgaged Property as Lender may require (“ Property Insurance ”). Required Property Insurance coverage may include any or all of the following:

(i)

All Risks of Physical Loss . Insurance against loss or damage from fire, wind, hail, and other related perils within the scope of a “Special Causes of Loss” or “All Risk” policy, in an amount not less than the Replacement Cost of the Mortgaged Property.

(ii)

Ordinance and Law . If any part of the Mortgaged Property is legal non-conforming under current building, zoning or land use laws or ordinances, then “Ordinance and Law Coverage” in the amount required by Lender.

(iii)

Flood . If any of the Improvements are located in an area identified by the Federal Emergency Management Agency (or any successor to that agency) as a “Special Flood Hazard Area,” flood Insurance in the amount required by Lender.

(iv)

Windstorm . If windstorm and/or windstorm related perils and/or “named storm” are excluded from the “Special Causes of Loss” policy required under Section 6.10(a)(i), then separate coverage for such risks (“ Windstorm Coverage ”), either through an endorsement or a separate policy. Windstorm Coverage will be written in an amount not less than the Replacement Cost of the Mortgaged Property.

(v)

Boiler and Machinery/Equipment Breakdown . If the Mortgaged Property contains a central heating, ventilation and cooling system (“ HVAC System ”) where steam boilers and/or other pressurized systems are in operation and are regulated by the Property Jurisdiction, Insurance providing coverage in the amount required by Lender.

(vi)

Builder’s Risk . During any period of construction or Restoration, builder’s risk Insurance (including fire and other perils within the scope of a policy known as “Causes of Loss – Special Form” or “All Risk” policy) in an amount not less than the sum of the related contractual arrangements.

(vii)

Other . Insurance for other physical perils applicable to the Mortgaged Property as may be required by Lender including earthquake, sinkhole, mine subsidence, avalanche, mudslides, and volcanic eruption. If Lender reasonably requires any updated reports or other documentation to determine whether additional Insurance is necessary or prudent, Borrower will pay for the updated reports or other documentation at its sole cost and expense.

(viii)

Reserved.

(ix)

Reserved.

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(b)

Business Income/Rental Value . Business income/rental value Insurance for all relevant perils to be covered in the amount required by Lender, but in no case less than the effective gross income attributable to the Mortgaged Property for the preceding 12 months, as determined by Lender in Lender’s Discretion.

(c)

Commercial General Liability Insurance . Commercial general liability Insurance against legal liability claims for personal and bodily injury, property damage and contractual liability in such amounts and with such maximum deductibles as Lender may require, but not less than $1,000,000 per occurrence and $2,000,000 in the general aggregate on a per-location basis, plus excess and/or umbrella liability coverage in such amounts as Lender may require.

(d)

Terrorism Insurance . Insurance required under Section 6.10(a)(i) and (ii) and Section 6.10(b) will provide coverage for acts of terrorism. Terrorism coverage may be provided through one or more separate policies, which will be on terms (including amounts) consistent with those required under Section 6.10(a)(i) and (ii) and Section 6.10(b). If Insurance against acts of terrorism is not available at commercially reasonable rates and if the related hazards are not at the time commonly insured against for properties similar to the Mortgaged Property and located in or around the region in which the Mortgaged Property is located, then Lender may opt to temporarily suspend, cap or otherwise limit the requirement to have such terrorism insurance for a period not to exceed one year, unless such suspension or cap is renewed by Lender for additional one year increments.

(e)

Payment of Premiums . All Property Insurance premiums and premiums for other Insurance required under this Section 6.10 will be paid in the manner provided in Article IV, unless Lender has designated in writing another method of payment.

(f)

Policy Requirements . The following requirements apply with respect to all Insurance required by this Section 6.10:

(i)

All Insurance policies will be in a form approved by Lender.

(ii)

All Insurance policies will be issued by Insurance companies authorized to do business in the Property Jurisdiction and/or acting as eligible surplus insurers in the Property Jurisdiction, which have a general policyholder’s rating satisfactory to Lender.

(iii)

All Property Insurance policies will contain a standard mortgagee or mortgage holder’s clause and a loss payable clause, in favor of, and in a form approved by, Lender.

(iv)

If any Insurance policy contains a coinsurance clause, the coinsurance clause will be offset by an agreed amount endorsement in an amount not less than the Replacement Cost.

(v)

All commercial general liability and excess/umbrella liability policies will name Lender, its successors and/or assigns, as additional insured.

(vi)

Professional liability policies will not include Lender, its successors and/or assigns, as additional insured.

(vii)

All Insurance policies will provide that the insurer will notify Lender in writing of cancelation of policies at least 10 days before the cancelation of the policy by the insurer for nonpayment of the premium or nonrenewal and at least 30 days before cancelation by the insurer for any other reason.

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(g)

Evidence of Insurance; Insurance Policy Renewals . Borrower will deliver to Lender a legible copy of each Insurance policy, and Borrower will promptly deliver to Lender a copy of all renewal and other notices received by Borrower with respect to the policies. Borrower will ensure that the Mortgaged Property is continuously covered by the required Insurance. At least 15 days prior to the expiration date of each Insurance policy, Borrower will deliver to Lender evidence acceptable to Lender in Lender’s Discretion that each policy has been renewed. If the evidence of a renewal does not include a legible copy of the renewal policy, Borrower will deliver a legible copy of such renewal no later than the earlier of the following:

(i)

60 days after the expiration date of the original policy.

(ii)

The date of any Notice of an insured loss given to Lender under Section 6.10(i).

(h)

Compliance With Insurance Requirements . Borrower will comply with all Insurance requirements and will not permit any condition to exist on the Mortgaged Property that would invalidate any part of any Insurance coverage required under this Loan Agreement.

(i)

Obligations Upon Casualty; Proof of Loss .

(i)

If an insured loss occurs, then Borrower will give immediate written notice to the Insurance carrier and to Lender.

(ii)

Borrower authorizes and appoints Lender as attorney in fact for Borrower to make proof of loss, to adjust and compromise any claims under policies of Property Insurance, to appear in and prosecute any action arising from such Property Insurance policies, to collect and receive the proceeds of Property Insurance, to hold the proceeds of Property Insurance, and to deduct from such proceeds Lender’s expenses incurred in the collection of such proceeds. This power of attorney is coupled with an interest and therefore is irrevocable. However, nothing contained in this Section 6.10 will require Lender to incur any expense or take any action.

(j)

Lender’s Options Following a Casualty . Lender may, at Lender’s option, take one of the following actions:

(i)

Require a “repair or replacement” settlement, in which case the proceeds will be used to reimburse Borrower for the cost of restoring and repairing the Mortgaged Property to the equivalent of its original condition or to a condition approved by Lender (“ Restoration ”). If Lender determines to require a repair or replacement settlement and to apply Insurance proceeds to Restoration, Lender will apply the proceeds in accordance with Lender’s then-current policies relating to the Restoration of casualty damage on similar multifamily properties. If Lender, in Lender’s Discretion, retains a professional inspection engineer or other qualified third party to inspect any Restoration items, Lender may charge Borrower an amount sufficient to pay all reasonable costs and expenses charged by such third party inspector.

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(ii)

Require an “actual cash value” settlement in which case the proceeds may be applied to the payment of the Indebtedness, whether or not then due.

(k)

Borrower’s Options Following a Casualty . Subject to Section 6.10(l), Borrower may take the following actions:

(i)

If a casualty results in damage to the Mortgaged Property for which the cost of Repairs will be less than the Borrower Proof of Loss Threshold, Borrower will have the sole right to make proof of loss, adjust and compromise the claim and collect and receive any proceeds directly without the approval or prior consent of Lender so long as the Insurance proceeds are used solely for the Restoration of the Mortgaged Property.

(ii)

If a casualty results in damage to the Mortgaged Property for which the cost of Repairs will be more than the Borrower Proof of Loss Threshold, but less than the Borrower Proof of Loss Maximum, Borrower is authorized to make proof of loss and adjust and compromise the claim without the prior consent of Lender, and Lender will hold the applicable Insurance proceeds to be used to reimburse Borrower for the cost of Restoration of the Mortgaged Property and will not apply such proceeds to the payment of the Indebtedness.

(l)

Lender’s Right to Apply Insurance Proceeds to Indebtedness . Lender will have the right to apply Insurance proceeds to the payment of the Indebtedness if Lender determines, in Lender’s Discretion, that any of the following conditions are met:

(i)

An Event of Default (or any event, which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default) has occurred and is continuing.

(ii)

There will not be sufficient funds from Insurance proceeds, anticipated contributions of Borrower of its own funds or other sources acceptable to Lender to complete the Restoration.

(iii)

The rental income from the Mortgaged Property after completion of the Restoration will not be sufficient to meet all operating costs and other expenses, deposits to Reserve Funds and Loan repayment obligations relating to the Mortgaged Property.

(iv)

The Restoration will be completed less than (A) 6 months prior to the Maturity Date if re-leasing will be completed prior to the Maturity Date, or (B) 12 months prior to the Maturity Date if re-leasing will not be completed prior to the Maturity Date.

(v)

The Restoration will not be completed within one year after the date of the loss or casualty.

(vi)

The casualty involved an actual or constructive loss of more than 30% of the fair market value of the Mortgaged Property, and rendered untenantable more than 30% of the residential units of the Mortgaged Property.

(vii)

After completion of the Restoration the fair market value of the Mortgaged Property is expected to be less than the fair market value of the Mortgaged Property immediately prior to such casualty (assuming the affected portion of the Mortgaged Property is re-let within a reasonable period after the date of such casualty).

(viii)

Leases covering less than 35% of the residential units of the Mortgaged Property will remain in full force and effect during and after the completion of Restoration.

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(m)

Lender’s Succession to Insurance Policies . If the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the Mortgaged Property, Lender will automatically succeed to all rights of Borrower in and to any Insurance policies and unearned Insurance premiums and in and to the proceeds resulting from any damage to the Mortgaged Property prior to such sale or acquisition.

(n)

Payment of Installments After Application of Insurance Proceeds . Unless Lender otherwise agrees in writing, any application of any Insurance proceeds to the Indebtedness will not extend or postpone the due date of any monthly installments referred to in the Note, Article IV of this Loan Agreement or change the amount of such installments.

(o)

Assignment of Insurance Proceeds . Borrower agrees to execute such further evidence of assignment of any Insurance proceeds as Lender may require.

(p)

Borrower Acknowledgment of Lender’s Right to Change Insurance Requirements . Borrower acknowledges and agrees that Lender’s Insurance requirements may change from time to time throughout the term of the Indebtedness to include coverage for the kind of risks customarily insured against and in such minimum coverage amounts and maximum deductibles as are generally required by institutional lenders for properties comparable to the Mortgaged Property.

6.11

Condemnation.

(a)

Rights Generally . Borrower will promptly notify Lender in writing of any action or proceeding or notice relating to any proposed or actual condemnation or other taking, or conveyance in lieu thereof, of all or any part of the Mortgaged Property, whether direct or indirect (“ Condemnation ”). Borrower will appear in and prosecute or defend any action or proceeding relating to any Condemnation unless otherwise directed by Lender in writing. Borrower authorizes and appoints Lender as attorney in fact for Borrower to commence, appear in and prosecute, in Lender’s or Borrower’s name, any action or proceeding relating to any Condemnation and to settle or compromise any claim in connection with any Condemnation, after consultation with Borrower and consistent with commercially reasonable standards of a prudent lender. This power of attorney is coupled with an interest and therefore is irrevocable. However, nothing contained in this Section 6.11(a) will require Lender to incur any expense or take any action. Borrower transfers and assigns to Lender all right, title and interest of Borrower in and to any award or payment with respect to (i) any Condemnation, or any conveyance in lieu of Condemnation, and (ii) any damage to the Mortgaged Property caused by governmental action that does not result in a Condemnation.

(b)

Application of Award . Lender may hold such awards or proceeds and apply such awards or proceeds, after the deduction of Lender’s expenses incurred in the collection of such amounts (including Attorneys’ Fees and Costs) at Lender’s option, to the Restoration or repair of the Mortgaged Property or to the payment of the Indebtedness, with the balance, if any, to Borrower. Unless Lender otherwise agrees in writing, any application of any awards or proceeds to the Indebtedness will not extend or postpone the due date of any monthly installments referred to in the Note or Article IV of this Loan Agreement, or change the amount of such installments. Borrower agrees to execute such further evidence of assignment of any Condemnation awards or proceeds as Lender may require.

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(c)

Borrower’s Right to Condemnation Proceeds . Notwithstanding any provision to the contrary in this Section 6.11, but subject to Section 6.11(e), in the event of a partial Condemnation of the Mortgaged Property, as long as no Event of Default, or any event which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default, has occurred and is continuing, in the event of a partial Condemnation resulting in proceeds or awards in the amount of less than $100,000, Borrower will have the sole right to make proof of loss, adjust and compromise the claim and collect and receive any proceeds directly without the approval or prior consent of Lender so long as the proceeds or awards are used solely for the Restoration of the Mortgaged Property.

(d)

Right to Apply Condemnation Proceeds to Indebtedness . In the event of a partial Condemnation of the Mortgaged Property resulting in proceeds or awards in the amount of $100,000 or more and subject to Section 6.11(e), Lender will have the right to exercise its option to apply Condemnation proceeds to the payment of the Indebtedness only if Lender, in Lender’s Discretion, determines that at least one of the following conditions is met:

(i)

An Event of Default (or any event, which, with the giving of Notice or the passage of time, or both, would constitute an Event of Default) has occurred and is continuing.

(ii)

There will not be sufficient funds from Condemnation proceeds, anticipated contributions of Borrower of its own funds or other sources acceptable to Lender to complete the Restoration.

(iii)

(iv)

The Restoration will not be completed at least one year before the Maturity Date (or 6 months before the Maturity Date if re-leasing of the Mortgaged Property will be completed within such 6 month period).

(v)

The Restoration will not be completed within one year after the date of the Condemnation.

(vi)

The Condemnation involved an actual or constructive loss of more than 15% of the fair market value of the Mortgaged Property, and rendered untenantable more than 25% of the residential units of the Mortgaged Property.

(vii)

After Restoration the fair market value of the Mortgaged Property is expected to be less than the fair market value of the Mortgaged Property immediately prior to the Condemnation (assuming the affected portion of the Mortgaged Property is re-let within a reasonable period after the date of the Condemnation).

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(viii)

Leases covering less than 35% of residential units of the Mortgaged Property will remain in full force and effect during and after the completion of Restoration.

(e)

Right to Apply Condemnation Proceeds in Connection with a Partial Release . Notwithstanding anything to the contrary set forth in this Loan Agreement, including this Section 6.11, for so long as the Loan or any portion of the Loan is included in a Securitization in which the Note is assigned to a REMIC trust, then each of the following will apply:

(i)

If any portion of the Mortgaged Property is released from the Lien of the Loan in connection with a Condemnation and if the ratio of (A) the unpaid principal balance of the Loan to (B) the value of the Mortgaged Property (with the value of the Mortgaged Property first being reduced by the outstanding principal balance of any Senior Indebtedness or any indebtedness secured by the Mortgaged Property that is at the same level of priority with the Indebtedness and taking into account only the related land and buildings and not any personal property or going-concern value), as determined by Lender in its sole and absolute discretion based on a commercially reasonable valuation method permitted in connection with a Securitization, is greater than 125% immediately after such Condemnation and before any Restoration or repair of the Mortgaged Property (but taking into account any planned Restoration or repair of the Mortgaged Property as if such planned Restoration or repair were completed), then Lender will apply any net proceeds or awards from such Condemnation, in full, to the payment of the principal of the Indebtedness whether or not then due and payable, unless Lender has received an opinion of counsel (acceptable to Lender if such opinion is provided by Borrower) that a different application of the net proceeds or awards will not cause such Securitization to fail to meet applicable federal income tax qualification requirements or subject such Securitization to any tax, and the net proceeds or awards are applied in the manner specified in such opinion..

(ii)

If (A) neither Borrower nor Lender has the right to receive any or all net proceeds or awards as a result of the provisions of any agreement affecting the Mortgaged Property (including any Ground Lease (if applicable), condominium document, or reciprocal easement agreement) and, therefore cannot apply the net proceeds or awards to the payment of the principal of the Indebtedness as set forth above, or (B) Borrower receives any or all of the proceeds or awards described in Section 6.11(e)(ii)(A) and fails to apply the proceeds in accordance with Section 6.11(e)(i), then Borrower will prepay the Indebtedness in an amount which Lender, in its sole and absolute discretion, deems necessary to ensure that the Securitization will not fail to meet applicable federal income tax qualification requirements or be subject to any tax as a result of the Condemnation, unless Lender has received an opinion of counsel (acceptable to Lender if such opinion is provided by Borrower) that a different application of the net proceeds or awards will not cause such Securitization to fail to meet applicable federal income tax qualification requirements or subject such Securitization to any tax, and the net proceeds or awards are applied in the manner specified in such opinion.

(f)

Succession to Condemnation Proceeds . If the Mortgaged Property is sold at a foreclosure sale or Lender acquires title to the Mortgaged Property, Lender will automatically succeed to all rights of Borrower in and to any Condemnation proceeds and awards prior to such sale or acquisition.

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6.12

Environmental Hazards.

(a)

Prohibited Activities and Conditions . Except for matters described in this Section 6.12, Borrower will not cause or permit Prohibited Activities or Conditions. Borrower will comply with all Hazardous Materials Laws applicable to the Mortgaged Property. Without limiting the generality of the previous sentence, Borrower will: (i) obtain and maintain all Environmental Permits required by Hazardous Materials Laws and comply with all conditions of such Environmental Permits, (ii) cooperate with any inquiry by any Governmental Authority, and (iii) comply with any governmental or judicial order that arises from any alleged Prohibited Activity or Condition.

(b)

Employees, Tenants and Contractors . Borrower will take all commercially reasonable actions (including the inclusion of appropriate provisions in any Leases executed after the date of this Loan Agreement) to prevent its employees, agents and contractors, and all tenants and other occupants from causing or permitting any Prohibited Activities or Conditions. Borrower will not lease or allow the sublease or use of all or any portion of the Mortgaged Property to any tenant or subtenant for nonresidential use by any user that, in the ordinary course of its business, would cause or permit any Prohibited Activity or Condition.

(c)

O&M Programs . As required by Lender, Borrower will also have established a written operations and maintenance program with respect to certain Hazardous Materials. Each such operations and maintenance program and any additional or revised operations and maintenance programs established for the Mortgaged Property pursuant to this Section 6.12 must be approved by Lender and will be referred to in this Loan Agreement as an “ O&M Program .” Borrower will comply in a timely manner with, and cause all employees, agents, and contractors of Borrower and any other Persons present on the Mortgaged Property to comply with each O&M Program. Borrower will pay all costs of performance of Borrower’s obligations under any O&M Program, and Lender’s out of pocket costs incurred in connection with the monitoring and review of each O&M Program must be paid by Borrower upon demand by Lender. Any such out-of-pocket costs of Lender that Borrower fails to pay promptly will become an additional part of the Indebtedness as provided in Section 9.02.

(d)

Notice to Lender . Borrower will promptly give Notice to Lender upon the occurrence of any of the following events:

(i)

Borrower’s discovery of any Prohibited Activity or Condition.

(ii)

Borrower’s receipt of or knowledge of any written complaint, order, notice of violation or other communication from any tenant, Property Manager, Governmental Authority or other Person with regard to present or future alleged Prohibited Activities or Conditions, or any other environmental, health or safety matters affecting the Mortgaged Property.

(iii)

Borrower’s breach of any of its obligations under this Section 6.12.

Any such Notice given by Borrower will not relieve Borrower of, or result in a waiver of, any obligation under this Loan Agreement, the Note or any other Loan Document.

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(e)

Environmental Inspections, Tests and Audits . Borrower will pay promptly the costs of any environmental inspections, tests or audits, a purpose of which is to identify the extent or cause of or potential for a Prohibited Activity or Condition (“ Environmental Inspections ”), required by Lender in connection with any foreclosure or deed in lieu of foreclosure, or as a condition of Lender’s consent to any Transfer under Article VII, or required by Lender following a reasonable determination by Lender that Prohibited Activities or Conditions may exist. Any such costs incurred by Lender (including Attorneys’ Fees and Costs and the costs of technical consultants whether incurred in connection with any judicial or administrative process or otherwise) that Borrower fails to pay promptly will become an additional part of the Indebtedness as provided in Section 9.02. As long as: (i) no Event of Default has occurred and is continuing, (ii) Borrower has actually paid for or reimbursed Lender for all costs of any such Environmental Inspections performed or required by Lender, and (iii) Lender is not prohibited by law, contract or otherwise from doing so, Lender will make available to Borrower, without representation of any kind, copies of Environmental Inspections prepared by third parties and delivered to Lender. Lender reserves the right, and Borrower expressly authorizes Lender, to make available to any party, including any prospective bidder at a foreclosure sale of the Mortgaged Property, the results of any Environmental Inspections made by or for Lender with respect to the Mortgaged Property. Borrower consents to Lender notifying any party (either as part of a notice of sale or otherwise) of the results of any Environmental Inspections made by or for Lender. Borrower acknowledges that Lender cannot control or otherwise ensure the truthfulness or accuracy of the results of any Environmental Inspections and that the release of such results to prospective bidders at a foreclosure sale of the Mortgaged Property may have a material and adverse effect upon the amount that a party may bid at such sale. Borrower agrees that Lender will have no liability whatsoever as a result of delivering the results of any Environmental Inspections made by or for Lender to any third party, and Borrower releases and forever discharges Lender from any and all claims, damages or causes of action arising out of, connected with or incidental to the results of the delivery of any Environmental Inspections made by or for Lender.

(f)

Remedial Work . If any investigation, site monitoring, containment, clean-up, Restoration or other remedial work (“ Remedial Work ”) is necessary to comply with any Hazardous Materials Law or order of any Governmental Authority that has or acquires jurisdiction over the Mortgaged Property or the use, operation or improvement of the Mortgaged Property, or is otherwise required by Lender as a consequence of any Prohibited Activity or Condition or to prevent the occurrence of a Prohibited Activity or Condition, Borrower will, by the earlier of (i) the applicable deadline required by Hazardous Materials Law, or (ii) 30 days after Notice from Lender demanding such action, begin performing the Remedial Work, and thereafter diligently prosecute it to completion, and must in any event complete the work by the time required by applicable Hazardous Materials Law. If Borrower fails to begin on a timely basis or diligently prosecute any required Remedial Work, Lender may, at its option, cause the Remedial Work to be completed, in which case Borrower will reimburse Lender on demand for the cost of doing so. Any reimbursement due from Borrower to Lender will become part of the Indebtedness as provided in Section 9.02.

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6.13

Single Purpose Entity Requirements.

(a)

Single Purpose Entity Requirements . Until the Indebtedness is paid in full, each Borrower and any SPE Equity Owner will remain a “Single Purpose Entity,” which means at all times since its formation and thereafter it will satisfy each of the following conditions:

(i)

It will not engage in any business or activity, other than the ownership, operation and maintenance of the Mortgaged Property and activities incidental thereto.

(ii)

It will not acquire, own, hold, lease, operate, manage, maintain, develop or improve any assets other than the Mortgaged Property and such Personalty as may be necessary for the operation of the Mortgaged Property and will conduct and operate its business as presently conducted and operated.

(iii)

It will preserve its existence as an entity duly organized, validly existing and in good standing (if applicable) under the laws of the jurisdiction of its formation or organization and will do all things necessary to observe organizational formalities.

(iv)

It will not merge or consolidate with any other Person.

(v)

It will not take any action to dissolve, wind-up, terminate or liquidate in whole or in part; to sell, transfer or otherwise dispose of all or substantially all of its assets; to change its legal structure; transfer or permit the direct or indirect transfer of any partnership, membership or other equity interests, as applicable, other than Transfers permitted under this Loan Agreement; issue additional partnership, membership or other equity interests, as applicable, or seek to accomplish any of the foregoing.

(vi)

It will not, without the prior unanimous written consent of all of Borrower’s partners, members, or shareholders, as applicable, and, if applicable, the prior unanimous written consent of 100% of the members of the board of directors or of the board of Managers of Borrower or the SPE Equity Owner, take any of the following actions:

(A)

File any insolvency, or reorganization case or proceeding, to institute proceedings to have Borrower or any SPE Equity Owner be adjudicated bankrupt or insolvent.

(B)

Institute proceedings under any applicable insolvency law.

(C)

Seek any relief under any law relating to relief from debts or the protection of debtors.

(D)

Consent to the filing or institution of bankruptcy or insolvency proceedings against Borrower or any SPE Equity Owner.

(E)

File a petition seeking, or consent to, reorganization or relief with respect to Borrower or any SPE Equity Owner under any applicable federal or state law relating to bankruptcy or insolvency.

(F)

Seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official for Borrower or a substantial part of its property or for any SPE Equity Owner or a substantial part of its property.

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(G)

Make any assignment for the benefit of creditors of Borrower or any SPE Equity Owner.

(H)

Admit in writing Borrower’s or any SPE Equity Owner’s inability to pay its debts generally as they become due.

(I)

Take action in furtherance of any of the foregoing.

(vii)

It will not amend or restate its organizational documents if such change would cause the provisions set forth in those organizational documents not to comply with the requirements set forth in this Section 6.13.

(viii)

It will not own any subsidiary or make any investment in, any other Person.

(ix)

It will not commingle its assets with the assets of any other Person and will hold all of its assets in its own name.

(x)

It will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the following:

(A)

The Indebtedness and any further indebtedness as described in Section 11.11 with regard to Supplemental Instruments.

(B)

Customary unsecured trade payables incurred in the ordinary course of owning and operating the Mortgaged Property provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum amount of 2% of the original principal amount of the Indebtedness and are paid within 60 days of the date incurred.

(C)

through (H) are reserved.

(xi)

It will maintain its records, books of account, bank accounts, financial statements, accounting records and other entity documents separate and apart from those of any other Person and will not list its assets as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliate provided that (A) appropriate notation will be made on such consolidated financial statements to indicate the separateness of Borrower from such Affiliate and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliate or any other Person, and (B) such assets will also be listed on Borrower’s own separate balance sheet.

(xii)

Except for capital contributions or capital distributions permitted under the terms and conditions of its organizational documents, it will only enter into any contract or agreement with any general partner, member, shareholder, principal or Affiliate of Borrower or any Guarantor, or any general partner, member, principal or Affiliate thereof, upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arm’s-length basis with third parties.

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(xiii)

It will not maintain its assets in such a manner that will be costly or difficult to segregate, ascertain or identify its individual assets from those of any other Person.

(xiv)

It will not assume or guaranty (excluding any guaranty that has been executed and delivered in connection with the Note) the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person, or hold out its credit as being available to satisfy the obligations of any other Person.

(xv)

It will not make or permit to remain outstanding any loans or advances to any other Person except for those investments permitted under the Loan Documents and will not buy or hold evidence of indebtedness issued by any other Person (other than cash or investment-grade securities).

(xvi)

It will file its own tax returns separate from those of any other Person, except to the extent that Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law, and will pay any taxes required to be paid under applicable law.

(xvii)

It will hold itself out to the public as a legal entity separate and distinct from any other Person and conduct its business solely in its own name, will correct any known misunderstanding regarding its separate identity and will not identify itself or any of its Affiliates as a division or department of any other Person.

(xviii)

(xix)

It will allocate fairly and reasonably shared expenses with Affiliates (including shared office space) and use separate stationery, invoices and checks bearing its own name.

(xx)

It will pay (or cause the Property Manager to pay on behalf of Borrower from Borrower’s funds) its own liabilities (including salaries of its own employees) from its own funds.

(xxi)

It will not acquire obligations or securities of its partners, members, shareholders, or Affiliates, as applicable.

(xxii)

Except as contemplated or permitted by the property management agreement with respect to the Property Manager, it will not permit any Affiliate or constituent party independent access to its bank accounts.

(xxiii)

It will maintain a sufficient number of employees (if any) in light of its contemplated business operations and pay the salaries of its own employees, if any, only from its own funds.

(xxiv)

If such entity is a single member limited liability company, such entity will satisfy each of the following conditions:

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(A)

Be formed and organized under Delaware law.

(B)

Have either one springing member that is a corporation or two springing members who are natural persons. If there is more than one springing member, only one springing member will be the sole member of Borrower or SPE Equity Owner (as applicable) at any one time, and the second springing member will become the sole member only upon the first springing member ceasing to be a member.

(C)

Otherwise comply with all Rating Agencies’ criteria for single member limited liability companies (including the delivery of Delaware single member limited liability company opinions acceptable in all respects to Lender).

(D)

At all times Borrower or SPE Equity Owner (as applicable) will have one and only one member.

(xxv)

If such entity is a single member limited liability company that is board-managed, such entity will have a board of Managers separate from that of Guarantor and any other Person and will cause its board of Managers to keep minutes of board meetings and actions and observe all other Delaware limited liability company required formalities.

(xxvi)

If an SPE Equity Owner is required pursuant to this Loan Agreement, if Borrower is (A) a limited liability company with more than one member, then Borrower has and will have at least one member that is an SPE Equity Owner that has satisfied and will satisfy the requirements of Section 6.13(b) and such member is its managing member, or (B) a limited partnership, then all of its general partners are SPE Equity Owners that have satisfied and will satisfy the requirements set forth in Section 6.13(b).

(xxvii)

Reserved.

(xxviii)

Reserved.

(b)

SPE Equity Owner Requirements . The SPE Equity Owner, if applicable, will at all times since its formation and thereafter comply in its own right (subject to the modifications set forth below), and will cause Borrower to comply, with each of the requirements of a Single Purpose Entity. Upon the withdrawal or the disassociation of an SPE Equity Owner from Borrower, Borrower will immediately appoint a new SPE Equity Owner, whose organizational documents are substantially similar to those of the withdrawn or disassociated SPE Equity Owner, and deliver a new nonconsolidation opinion to Lender in form and substance satisfactory to Lender with regard to nonconsolidation by a bankruptcy court of the assets of each of Borrower and SPE Equity Owner with those of its Affiliates.

(i)

With respect to Section 6.13(a)(i), the SPE Equity Owner will not engage in any business or activity other than being the managing member or general partner, as the case may be, of Borrower and owning at least 0.5% equity interest in Borrower.

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(ii)

With respect to Section 6.13(a)(ii), the SPE Equity Owner has not and will not acquire or own any assets other than its equity interest in Borrower and personal property related thereto.

(iii)

With respect to Section 6.13(a)(viii), the SPE Equity Owner will not own any subsidiary or make any investment in any other Person, except for Borrower.

(iv)

With respect to Section 6.13(a)(x), the SPE Equity Owner has not and will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (A) customary unsecured payables incurred in the ordinary course of owning Borrower provided the same are not evidenced by a promissory note, do not exceed, in the aggregate, at any time a maximum amount of $10,000 and are paid within 60 days of the date incurred, and (B) in its capacity as general partner of Borrower (if applicable).

(v)

With respect to Section 6.13(a)(xiv), the SPE Equity Owner will not assume or guaranty the debts or obligations of any other Person, hold itself out to be responsible for the debts of another Person, pledge its assets to secure the obligations of any other Person or otherwise pledge its assets for the benefit of any other Person, or hold out its credit as being available to satisfy the obligations of any other Person, except for in its capacity as general partner of Borrower (if applicable).

(c)

Effect of Transfer on Single Purpose Entity Requirements . Notwithstanding anything to the contrary in this Loan Agreement, no Transfer will be permitted under Article VII unless the provisions of this Section 6.13 are satisfied at all times.

6.14

Repairs and Capital Replacements.

(a)

Completion of Repairs . Borrower will commence any Repairs as soon as practicable after the date of this Loan Agreement and will diligently proceed with and complete such Repairs on or before the Completion Date. All Repairs and Capital Replacements will be completed in a good and workmanlike manner, with suitable materials, and in accordance with good building practices and all applicable laws, ordinances, rules, regulations, building setback lines and restrictions applicable to the Mortgaged Property. Borrower agrees to cause the replacement of any material or work that is defective, unworkmanlike or that does not comply with the requirements of this Loan Agreement, as determined by Lender.

(b)

Purchases . Without the prior written consent of Lender, no materials, machinery, equipment, fixtures or any other part of the Repairs or Capital Replacements will be purchased or installed under conditional sale contracts or lease agreements, or any other arrangement wherein title to such Repairs or Capital Replacements is retained or subjected to a purchase money security interest, or the right is reserved or accrues to anyone to remove or repossess any such Repairs or Capital Replacements, or to consider them as personal property.

(c)

Lien Protection . Borrower will promptly pay or cause to be paid, when due, all costs, charges and expenses incurred in connection with the construction and completion of the Repairs or Capital Replacements, and will keep the Mortgaged Property free and clear of any and all Liens other than the Lien of the Security Instrument and any other Lien to which Lender has consented.

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(d)

Adverse Claims . Borrower will promptly advise Lender in writing of any litigation, Liens or claims affecting the Mortgaged Property and of all complaints and charges made by any Governmental Authority that may delay or adversely affect the Repairs or Capital Replacements.

6.15

Residential Leases Affecting the Mortgaged Property.

(a)

Borrower will, promptly upon Lender’s request, deliver to Lender an executed copy of each residential Lease then in effect.

(b)

All Leases for residential dwelling units will satisfy the following conditions:

(i)

They will be on forms that are customary for similar multifamily properties in the Property Jurisdiction.

(ii)

They will be for initial terms of at least 6 months and not more than 2 years (unless otherwise approved in writing by Lender).

(iii)

They will not include any Corporate Leases (unless otherwise approved in writing by Lender).

(iv)

They will not include options to purchase.

(c)

If Borrower is a cooperative housing corporation or association, notwithstanding anything to the contrary contained in this Loan Agreement, so long as Borrower remains a cooperative housing corporation or association and is not in breach of any covenant of this Loan Agreement, Lender consents to each of the following:

(i)

The execution of Leases for terms in excess of 2 years to a tenant shareholder of Borrower, so long as such Leases, including proprietary Leases, are and will remain subordinate to the Lien of the Security Instrument.

(ii)

The surrender or termination of such Leases where the surrendered or terminated Lease is immediately replaced or where Borrower makes its best efforts to secure such immediate replacement by a newly-executed Lease of the same apartment to a tenant shareholder of Borrower. However, no consent is given by Lender to any execution, surrender, termination or assignment of a Lease under terms that would waive or reduce the obligation of the resulting tenant shareholder under such Lease to pay cooperative assessments in full when due or the obligation of the former tenant shareholder to pay any unpaid portion of such assessments.

6.16

Litigation; Government Proceedings. Borrower will give prompt Notice to Lender of any litigation or governmental proceedings pending or, to the best of Borrower’s knowledge, threatened in writing against Borrower or any Borrower Principal which might have a Material Adverse Effect. As and when requested by Lender, Borrower will provide Lender with written updates on the status of all litigation proceedings affecting Borrower or any Borrower Principal.

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6.17

Further Assurances and Estoppel Certificates; Lender’s Expenses. Within 10 days after a request from Lender, in Lender’s Discretion, Borrower will take each of the following actions:

(a)

Deliver to Lender a written statement, signed and acknowledged by Borrower, certifying to Lender or any Person designated by Lender, as of the date of such statement: (i) that the Loan Documents are unmodified and in full force and effect (or, if there have been modifications, that the Loan Documents are in full force and effect as modified and setting forth such modifications), (ii) the unpaid principal balance of the Note, (iii) the date to which interest under the Note has been paid, (iv) that Borrower is not in default in paying the Indebtedness or in performing or observing any of the covenants or agreements contained in this Loan Agreement or any of the other Loan Documents (or, if Borrower is in default, describing such default in reasonable detail), (v) whether there are any then-existing setoffs or defenses known to Borrower against the enforcement of any right or remedy of Lender under the Loan Documents, and (vi) any additional facts requested by Lender.

(b)

Execute, acknowledge and/or deliver, at its sole cost and expense, all further acts, deeds, conveyances, assignments, estoppel certificates, financing statements or amendments, transfers and assurances as Lender may require from time to time in order to better assure, grant and convey to Lender the rights intended to be granted, now or in the future, to Lender under this Loan Agreement and the Loan Documents or in connection with Lender’s consent rights under Article VII.

Borrower acknowledges and agrees that, in connection with each request by Borrower under this Loan Agreement or any Loan Document, Borrower will pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender and Loan Servicer, including any fees charged by the Rating Agencies, if applicable, regardless of whether the matter is approved, denied or withdrawn. Any amounts payable by Borrower under this Loan Agreement will be deemed a part of the Indebtedness, will be secured by the Security Instrument and will bear interest at the Default Rate if not fully paid within 10 days of written demand for payment.

6.18

Cap Collateral. Reserved.

6.19

Ground Lease. Reserved.

6.20

ERISA Requirements.

(a)

Borrower will not engage in any transaction which would cause an obligation, or action taken or to be taken under this Loan Agreement (or the exercise by Lender of any of its rights under the Note, this Loan Agreement or any of the other Loan Documents) to be a non-exempt prohibited transaction under ERISA or Section 4975 of the Tax Code.

(b)

Borrower will deliver to Lender such certifications or other evidence from time to time throughout the term of this Loan Agreement, as requested by Lender in Lender’s Discretion, confirming each of the following:

(i)

Borrower is not an “employee benefit plan” as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, a “plan” to which Section 4975 of the Tax Code applies, or an entity whose underlying assets constitute “plan assets” of one or more of such plans.

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(ii)

Borrower is not a “governmental plan” within the meaning of Section 3(32) of ERISA.

(iii)

Borrower is not subject to state statutes regulating investments or fiduciary obligations with respect to governmental plans.

(iv)

One or more of the following circumstances is true:

(A)

Equity interests in Borrower are publicly offered securities within the meaning of 29 C.F.R. Section 2510.3-101(b)(2), as amended from time to time or any successor provision.

(B)

Less than 25% of each outstanding class of equity interests in Borrower are held by “benefit plan investors” within the meaning of Section 3(42) of ERISA, as amended from time to time or any successor provision.

(C)

Borrower qualifies as either an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R. Section 2510.3-101(c) or (e), as either may be amended from time to time or any successor provisions, or is an investment company registered under the Investment Company Act of 1940.

6.21

through 6.52 are Reserved.

6.53

Economic Sanctions Laws.

(a)

Borrower, each Borrower Principal and each Non-U.S. Equity Holder will at all times comply with the Economic Sanctions Laws.

(b)

Borrower and each Borrower Principal will have in place practices and procedures to ensure, and will ensure, that no Person who is listed on any Prohibited Parties List is admitted into the ownership or management of Borrower or any Borrower Principal.

6.54

through 6.58 are Reserved.

ARTICLE VII

TRANSFERS OF THE MORTGAGED PROPERTY OR INTERESTS IN BORROWER.

Upon the occurrence of a Transfer prohibited by or requiring Lender’s approval (if applicable) under this Article VII, Lender may, in Lender’s Discretion, by Notice to Borrower and the proposed transferee(s), modify or render void, any or all of the negotiated modifications to the Loan Documents (and/or deferral of deposits to Reserve Funds) as a condition to Lender’s consent to the proposed Transfer.

7.01

Permitted Transfers. The occurrence of any of the following Transfers will not constitute an Event of Default under this Loan Agreement, notwithstanding any provision of Section 7.02 to the contrary:

(a)

A Transfer to which Lender has consented.

(b)

A Transfer that is not a prohibited Transfer pursuant to Section 7.02.

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(c)

A Transfer that is conditionally permitted pursuant to Section 7.03 upon the satisfaction of all applicable conditions.

(d)

The grant of a leasehold interest in an individual dwelling unit for a term of 2 years or less (or longer if approved by Lender in writing) not containing an option to purchase.

(e)

Entering into any New Non-Residential Lease, or modifying or terminating any Non-Residential Lease, in each case in compliance with Section 6.04.

(f)

A Condemnation with respect to which Borrower satisfies the requirements of Section 6.11.

(g)

A Transfer of obsolete or worn out Personalty or Fixtures that are contemporaneously replaced by items of equal or better function and quality, which are free of Liens, encumbrances and security interests other than those created by the Loan Documents or consented to by Lender.

(h)

The creation of a mechanic’s, materialmen’s, or judgment Lien against the Mortgaged Property, which is released of record, bonded, or otherwise remedied to Lender’s satisfaction within 60 days of the date of creation; provided, however, if Borrower is diligently prosecuting such release or other remedy and advises Lender that such release or remedy cannot be consummated within such 60-day period, Borrower will have an additional period of time (not exceeding 120 days from the date of creation or such earlier time as may be required by applicable law in which the lienor must act to enforce the Lien) within which to obtain such release of record or consummate such other remedy.

(i)

If Borrower is a housing cooperative corporation or association, the Transfer of the shares in the housing cooperative or the assignment of the occupancy agreements or Leases relating thereto to tenant shareholders of the housing cooperative or association.

(j)

A Supplemental Instrument that complies with Section 11.11(if applicable) or Defeasance that complies with Section 11.12(if applicable).

(k)

If applicable, a Preapproved Intrafamily Transfer that satisfies the requirements of Section 7.04.

(l)

Reserved

7.02

Prohibited Transfers. The occurrence of any of the following Transfers will constitute an Event of Default under this Loan Agreement:

(a)

A Transfer of all or any part of the Mortgaged Property or any interest in the Mortgaged Property, including the grant, creation or existence of any Lien on the Mortgaged Property, whether voluntary, involuntary or by operation of law, and whether or not such Lien has priority over the Lien of the Security Instrument, other than the Lien of the Security Instrument or, if this Loan Agreement is entered into in connection with a Supplemental Loan, the Lien of the Senior Instrument, or any other Lien to which Lender has consented.

(b)

A Transfer or series of Transfers of any legal or equitable interest of any Guarantor which owns a direct or indirect interest in Borrower that result(s) in such Guarantor no longer owning any direct or indirect interest in Borrower.

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(c)

A Transfer or series of Transfers of any legal or equitable interest since the Closing Date that result(s) in a change of more than 50% of the ownership interests (or beneficial interests, if the applicable entity is a trust) in Borrower or any Designated Entity for Transfers.

(d)

A Transfer of any general partnership interest in a partnership, or any manager interest (whether a member manager or nonmember manager) in a limited liability company, or a change in the trustee of a trust other than as permitted in Section 7.04, if such partnership, limited liability company, or trust, as applicable, is Borrower or a Designated Entity for Transfers.

(e)

If Borrower or any Designated Entity for Transfers is a corporation whose outstanding voting stock is held by 100 or more shareholders, one or more Transfers by a single transferor within a 12-month period affecting an aggregate of 10% or more of that stock.

(f)

The grant, creation or existence of any Lien, whether voluntary, involuntary or by operation of law, and whether or not such Lien has priority over the Lien of the Security Instrument, on any ownership interest in Borrower or any Designated Entity for Transfers, if the foreclosure of such Lien would result in a Transfer prohibited under Sections 7.02(b), (c), (d), or (e).

(g)

If Borrower is a trust (i) the termination or revocation of the trust, or (ii) the removal, appointment or substitution of a trustee of the trust.

(h)

Reserved.

(i)

Reserved.

(j)

Reserved.

7.03

Conditionally Permitted Transfers. The occurrence of any of the following Transfers will not constitute a prohibited Transfer under Section 7.02, provided that Borrower has complied with all applicable specified conditions in this Section.

(a)

Transfer by Devise, Descent or Operation of Law . Upon the death of a natural person, a Transfer which occurs by devise, descent, or by operation of law to one or more Immediate Family Members of such natural person or to a trust or family conservatorship established for the benefit of such Immediate Family Members (each a “ Beneficiary ”), provided that each of the following conditions is satisfied:

(i)

The Property Manager continues to be responsible for the management of the Mortgaged Property, and such Transfer will not result in a change in the day-to-day operations of the Mortgaged Property.

(ii)

Lender receives confirmation acceptable to Lender, in Lender’s Discretion, that Borrower continues to satisfy the requirements of Section 6.13.

(iii)

Each Guarantor executes such documents and agreements as Lender requires in Lender’s Discretion to evidence and effect the ratification of each Guaranty, or in the event of the death of any Guarantor, Borrower causes one of the following to occur:

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(A)

One or more Persons acceptable to Lender, in Lender’s Discretion, execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

(B)

The estate of the deceased Guarantor immediately ratifies the Guaranty in writing, and within 6 months after the date of the death of the deceased Guarantor one or more Persons, acceptable to Lender in Lender’s Discretion, execute(s) and deliver(s) to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

(iv)

Borrower gives Lender Notice of such Transfer together with copies of all documents effecting such Transfer not more than 30 calendar days after the date of such Transfer, and contemporaneously with the Notice, takes each of the following additional actions:

(A)

Borrower reaffirms the representations and warranties under Article V.

(B)

Borrower satisfies Lender, in Lender’s Discretion, that the Beneficiary’s organization, credit and experience in the management of similar properties are appropriate to the overall structure and documentation of the existing financing.

(v)

Borrower or Beneficiary causes to be delivered to Lender such legal opinions as Lender deems necessary, in Lender’s Discretion, including a nonconsolidation opinion (if a nonconsolidation opinion was delivered on the Closing Date and if required by Lender), an opinion that the ratification of the Loan Documents and Guaranty (if applicable) have been duly authorized, executed, and delivered and that the ratification documents and Guaranty (if applicable) are enforceable as the obligations of Borrower, Beneficiary or Guarantor, as applicable.

(vi)

Borrower (A) pays the Transfer Processing Fee to Lender, and (B) pays or reimburses Lender, upon demand, for all costs and expenses including all Attorneys’ Fees and Costs, incurred by Lender in connection with such Transfer; provided, however, that Lender will not be entitled to collect a Transfer Fee.

(b)

Easement, Restrictive Covenant or Other Encumbrance . The grant of an easement, restrictive covenant or other encumbrance, provided that each of the following conditions is satisfied:

(i)

Borrower provides Lender with at least 30 days prior Notice of the proposed grant.

(ii)

Prior to the grant, Lender determines, in Lender’s Discretion, that the easement, restrictive covenant or other encumbrance will not materially affect the operation or value of the Mortgaged Property or Lender’s interest in the Mortgaged Property.

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(iii)

Borrower pays or reimburses Lender, upon demand, for all costs and expenses, including all Attorneys’ Fees and Costs, incurred by Lender in connection with reviewing Borrower’s request for Lender’s review of such grant of easement, restrictive covenant or other encumbrance; provided, however, that Lender will not be entitled to collect a Transfer Fee.

(iv)

If the Note is held by a REMIC trust, Lender may require an opinion of counsel which meets each of the following requirements:

(A)

The counsel providing the opinion is acceptable to Lender.

(B)

The opinion is addressed to Lender.

(C)

The opinion is paid for by Borrower.

(D)

The opinion is in form and substance satisfactory to Lender in its sole and absolute discretion.

(E)

The opinion confirms each of the following:

(1)

The grant of such easement has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time).

(2)

The qualification and status of the REMIC trust as a REMIC will not be adversely affected or impaired as a result of such grant.

(3)

The REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of such grant.

(c)

Publicly-Held Fund or Publicly-Held Real Estate Investment Trust . If a Designated Entity for Transfers is a publicly-held fund or a publicly-held real estate investment trust, either of the following:

(i)

The public issuance of common stock, convertible debt, equity or other similar securities (“ Public Fund/REIT Securities ”) and the subsequent Transfer of such Public Fund/REIT Securities.

(ii)

The acquisition by a single Public Fund/REIT Securities holder of an ownership percentage of 10% or more in the Designated Entity for Transfers, if within 30 days following the acquisition, Borrower does each of the following:

(A)

Provides notice to Lender of that acquisition.

(B)

Complies with each of the following conditions:

(1)

Borrower delivers to Lender searches confirming that no Person with a collective equity interest (whether direct or indirect) of 25% or more in Borrower is on any Prohibited Parties List.

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(2)

Borrower either (a) certifies in writing to Lender that there are no Non-U.S. Equity Holders, or (b) delivers to Lender searches confirming that no Non-U.S. Equity Holder is on any Prohibited Parties List.

(d)

Transaction Specific Transfers .

(i) through (v) are reserved.

(vi)

Limited Partner or Non-Managing Member Transfer . A Transfer that results in the cumulative Transfer of more than 50% and up to 100% of the non-managing membership interests in or the limited partnership interests in Borrower or any Designated Entity for Transfer (“ Investor Interests ”) to third party transferees (“ Investor Interest Transfer ”), provided that each of the following conditions is satisfied:

(A)

Borrower provides Lender with at least 30 days prior Notice of the proposed Investor Interest Transfer.

(B)

At the time of the proposed Investor Interest Transfer, no Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(C)

Following the Investor Interest Transfer, Control and management of the day-to-day operations of Borrower continue to be held by the Person exercising such Control and management immediately prior to the Investor Interest Transfer and there is no change in the Guarantor, if applicable.

(D)

The Investor Interest Transfer does not result in a Transfer of the type described in Section 7.02(b).

(E)

At any time that one Person acquires 25% or more of the aggregate of direct or indirect Investor Interests as a result of the Investor Interest Transfer, Borrower must meet the following additional requirements:

(1)

Borrower pays to Lender the Transfer Processing Fee at the time the Borrower provides Lender with the Notice set forth in Section 7.03(d)(vi)(A).

(2)

Borrower pays or reimburses Lender, upon demand, for all costs and expenses, including all Attorneys’ Fees and Costs, incurred by Lender in connection with the Investor Interest Transfer.

(3)

Lender receives confirmation acceptable to Lender that (X) the requirements of Section 6.13 continue to be satisfied, and (Y) the term of existence of the holder of 25% or more of the Investor Interests after the Investor Interest Transfer (exclusive of any unexercised extension options or rights) does not expire prior to the Maturity Date.

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(4)

Lender receives organizational charts reflecting the structure of Borrower prior to and after the Investor Interest Transfer and copies of the then-current organizational documents of Borrower and the entity in which Investor Interests were transferred, if different from Borrower, including any amendments.

(5)

Each transferee with an interest of 25% or more delivers to Lender a certification that each of the following is true:

(X)

He/she/it has not been convicted of fraud or a crime involving moral turpitude (or if an entity, then no principal of such entity has been convicted of fraud or a crime involving moral turpitude).

(Y)

He/she/it has not been involved in a bankruptcy or reorganization within the ten years preceding the date of the Investor Interest Transfer.

(6)

Borrower delivers to Lender searches confirming that no Person with a collective equity interest (whether direct or indirect) in Borrower of 25% or more is on any Prohibited Parties List.

(7)

If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to the Investor Interest Transfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than a 50% direct or indirect interest in Borrower as of the Closing Date, Borrower delivers to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender, with regard to nonconsolidation.

(F)

Borrower either (1) certifies that there are no Non-US Equity Holders, or (2) delivers to Lender searches confirming that no Non-U.S. Equity Holder is on any Prohibited Parties List.

(vii) through (x) are reserved.

(e) through (k) are reserved.

7.04

Preapproved Intrafamily Transfers. The occurrence of a Transfer of more than a 50% interest in Borrower or a Designated Entity for Transfers as set forth in this Section will be considered to be a “ Preapproved Intrafamily Transfer ” provided that each of the conditions set forth in Sections 7.04(a) and (b) is satisfied:

(a)

Type of Transfer . The Transfer is one of the following:

(i)

A sale or transfer to one or more of the transferor’s Immediate Family Members.

(ii)

A sale or transfer to any trust having as its sole beneficiaries the transferor and/or one or more of the transferor’s Immediate Family Members.

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(iii)

A sale or transfer from a trust to any one or more of its beneficiaries who are the settlor and/or Immediate Family Members of the settlor of the trust.

(iv)

The substitution or replacement of the trustee of any trust with a trustee who is an Immediate Family Member of the settlor of the trust.

(v)

A sale or transfer from a natural person to an entity owned and under the Control of the transferor or the transferor’s Immediate Family Members.

(b)

Conditions . The Preapproved Intrafamily Transfer satisfies each of the following conditions:

(i)

Borrower must provide Lender with 30 days prior Notice of the proposed Preapproved Intrafamily Transfer.

(ii)

Following the Transfer, Control and management of the day-to-day operations of Borrower continue to be held by the Person exercising such Control and management immediately prior to the Transfer and there is no change in the Guarantor, if applicable.

(iii)

At the time of the Preapproved Intrafamily Transfer, no Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(iv)

At any time that one Person acquires 25% or more of the aggregate of direct or indirect interests in Borrower or a Designated Entity for Transfers as a result of the Preapproved Intrafamily Transfer, Borrower must meet the following additional requirements:

(A)

Borrower must pay to Lender the Transfer Processing Fee at the time the Borrower provides Lender with the Notice set forth in Section 7.04(b)(i).

(B)

Borrower must pay or reimburse Lender, upon demand, for all costs and expenses, including all Attorneys’ Fees and Costs, incurred by Lender in connection with the Preapproved Intrafamily Transfer.

(C)

Borrower must deliver to Lender organizational charts reflecting the structure of Borrower prior to and after the Preapproved Intrafamily Transfer, together with copies of the then-current organizational documents of Borrower and any other entity in which interests were transferred, including any amendments made in connection with the Preapproved Intrafamily Transfer.

(D)

Each transferee with an interest of 25% or more must deliver to Lender a certification that each of the following is true:

(1)

He/she/it has not been convicted of fraud or a crime involving moral turpitude (or if an entity, then no principal of such entity has been convicted of fraud or a crime involving moral turpitude).

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(2)

He/she/it has not been involved in a bankruptcy or reorganization within the 10 years preceding the date of the Preapproved Intrafamily Transfer.

(E)

Borrower must deliver to Lender searches confirming that no Person with a collective equity interest (whether direct or indirect) in Borrower of 25% or more is on any Prohibited Parties List.

(F)

If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to the Preapproved Intrafamily Transfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than a 50% direct or indirect interest in Borrower as of the Closing Date, Borrower must deliver to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender, with regard to nonconsolidation.

(v)

Borrower either (A) certifies that there are no Non-U.S. Equity Holders, or (B) delivers to Lender searches confirming that no Non-U.S. Equity Holder is on any Prohibited Parties List.

7.05

Lender’s Consent to Prohibited Transfers.

(a)

Conditions for Lender’s Consent . With respect to a Transfer that would otherwise constitute an Event of Default under this Article VII, Lender will consent, without any adjustment to the rate at which the Indebtedness bears interest or to any other economic terms of the Indebtedness set forth in the Note, provided that, prior to such Transfer, each of the following requirements is satisfied:

(i)

Borrower has submitted to Lender all information required by Lender to make the determination required by this Section along with the Transfer Processing Fee.

(ii)

No Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default unless such Transfer would cure the Event of Default.

(iii)

Lender in Lender’s Discretion has determined that the transferee meets Lender’s eligibility, credit, management and other standards (including any standards with respect to previous relationships between Lender and the transferee).

(iv)

Lender in Lender’s Discretion has determined that the transferee’s organization, credit and experience in the management of similar properties to be appropriate to the overall structure and documentation of the Loan.

(v)

Lender in Lender’s Discretion has determined that the Mortgaged Property will be managed by a Property Manager meeting the requirements of Section 6.09(d).

(vi)

Lender in Lender’s Discretion has determined that the Mortgaged Property, at the time of the proposed Transfer, meets all of Lender’s standards as to its physical condition, occupancy, net operating income and the accumulation of reserves.

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(vii)

Lender in Lender’s Discretion has determined that the transferee and any SPE Equity Owner of such transferee meet the requirements of Section 6.13.

(viii)

If any Supplemental Instrument is outstanding, Borrower has obtained the consent of each Supplemental Lender, if different from Lender.

(ix)

In the case of a Transfer of all or any part of the Mortgaged Property, each of the following conditions is satisfied:

(A)

The transferee executes Lender’s then-standard assumption agreement that, among other things, requires the transferee to perform all obligations of Borrower set forth in the Note, the Security Instrument, this Loan Agreement and any other Loan Document, and may require that the transferee comply with any provisions of this Loan Agreement or any other Loan Document which previously may have been waived or modified by Lender.

(B)

If Lender requires, the transferee causes one or more Persons acceptable to Lender, in Lender’s Discretion, to execute and deliver to Lender a Guaranty in a form acceptable to Lender.

(C)

The transferee executes such additional documentation (including filing financing statements, as applicable) as Lender may require.

(x)

In the case of a Transfer of any interest in Borrower or a Designated Entity for Transfers, if a Guarantor requests that Lender release the Guarantor from its obligations under a Guaranty executed and delivered in connection with the Note, this Loan Agreement or any of the other Loan Documents, then Borrower causes one or more Persons acceptable to Lender, in Lender’s Discretion, to execute and deliver to Lender a Guaranty in a form acceptable to Lender.

(xi)

Lender has received such legal opinions as Lender deems necessary, including a nonconsolidation opinion (if a nonconsolidation opinion was delivered on the Closing Date and if required by Lender), an opinion that the assignment and assumption of the Loan Documents has been duly authorized, executed, and delivered and that the assignment documents and the Loan Documents are enforceable as the obligations of Borrower, transferee and Guarantor, as applicable.

(xii)

Lender collects all costs, including the cost of all title searches, title insurance and recording costs, and all Attorneys’ Fees and Costs incurred in reviewing the Transfer request and any fees charged by the Rating Agencies, if applicable.

(xiii)

At the time of the Transfer, Borrower pays the Transfer Fee to Lender.

(xiv)

The Transfer will not occur during any Extension Period, if applicable.

(xv)

Reserved.

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(b)

Continuing Liability of Borrower . If Borrower requests a release of its liability under the Loan Documents in connection with a Transfer of all of Borrower’s interest in the Mortgaged Property, and Lender approves the Transfer pursuant to Section 7.05(a), then one of the following will apply:

(i)

If Borrower delivers to Lender a current Site Assessment which (A) is dated within 90 days prior to the date of the proposed Transfer, and (B) evidences no presence of Hazardous Materials on the Mortgaged Property and no other Prohibited Activities or Conditions with respect to the Mortgaged Property (“ Clean Site Assessment ”), then Lender will release Borrower from all of Borrower’s obligations under the Loan Documents except for any liability under Section 6.12 or Section 10.02(b) with respect to any loss, liability, damage, claim, cost or expense which directly or indirectly arises from or relates to any Prohibited Activities or Conditions existing prior to the date of the Transfer.

(ii)

If Borrower does not deliver a Clean Site Assessment as described in Section 7.05(b)(i), then Lender will release Borrower from all of Borrower’s obligations under the Loan Documents except for liability under Section 6.12 or Section 10.02(b).

(c)

Continuing Liability of Guarantor . If Guarantor requests a release of its liability under the Guaranty in connection with a Transfer which is permitted, preapproved, or approved by Lender pursuant to this Article VII, and Borrower has provided a replacement Guarantor acceptable to Lender under the terms of Section 7.05(a)(ix)(B), then one of the following will apply:

(i)

If Borrower delivers to Lender a Clean Site Assessment, then Lender will release Guarantor from all of Guarantor’s obligations except Guarantor’s obligation to guaranty Borrower’s liability under Section 6.12 or Section 10.02(b) with respect to any loss, liability, damage, claim, cost or expense which directly or indirectly arises from or relates to any Prohibited Activities or Conditions existing prior to the date of the Transfer.

(ii)

If Borrower does not deliver a Clean Site Assessment as described in Section 7.05(b)(i), then Lender will release Guarantor from all of Guarantor’s obligations except for Guarantor’s obligation to guaranty Borrower’s liability under Section 6.12 or Section 10.02(b).

7.06

SPE Equity Owner Requirement Following Transfer. Following any Transfer pursuant to this Article VII, Borrower must satisfy the applicable conditions regarding an SPE Equity Owner set forth in Section 6.13(a)(xxvi) of this Loan Agreement.

7.07

Additional Transfer Requirements - External Cap Agreement.

(a)

Continuation of Cap Agreement . If a Transfer of all or part of the Mortgaged Property permitted by this Loan Agreement occurs, Borrower will ensure that any third-party Cap Agreement is transferred to the applicable transferee or, if the Cap Agreement is not transferable, Borrower will replace the third-party Cap Agreement in accordance with Lender’s then-current requirements.

(b)

Establishment or Modification of Rate Cap Agreement Reserve Fund

(i)

If the third-party Cap Agreement which will be in place immediately following the Transfer is scheduled to expire prior to the Maturity Date, Lender may require Borrower to establish a Rate Cap Agreement Reserve Fund.

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(ii)

If Borrower has previously established a Rate Cap Agreement Reserve Fund, then Lender will determine whether the balance of any existing Rate Cap Agreement Reserve Fund is sufficient under then-current market conditions to purchase a Replacement Cap Agreement, and may then take any of the following actions:

(A)

Lender may require Borrower to make an additional deposit into the Rate Cap Agreement Reserve Fund.

(B)

If funding of the Rate Cap Agreement Reserve Fund has been deferred, Lender may require Borrower to begin making monthly deposits into the Rate Cap Agreement Reserve Fund.

(C)

Lender may require Borrower to increase the amount of monthly deposits to the Rate Cap Agreement Reserve Fund.

7.08

Reserved.

7.09

Reserved.

ARTICLE VIII

SUBROGATION.

If, and to the extent that, the proceeds of the Loan, or subsequent advances under Section 9.02, are used to pay, satisfy or discharge a Prior Lien, such Loan proceeds or advances will be deemed to have been advanced by Lender at Borrower’s request, and Lender will automatically, and without further action on its part, be subrogated to the rights, including Lien priority, of the owner or holder of the obligation secured by the Prior Lien, whether or not the Prior Lien is released.

ARTICLE IX

EVENTS OF DEFAULT AND REMEDIES.

9.01

Events of Default. The occurrence of any one or more of the following will constitute an Event of Default under this Loan Agreement:

(a)

Borrower fails to pay or deposit when due any amount required by the Note, this Loan Agreement or any other Loan Document.

(b)

Borrower fails to maintain the Insurance coverage required by Section 6.10.

(c)

Borrower or any SPE Equity Owner fails to comply with the provisions of Section 6.13 or if any of the assumptions contained in any nonconsolidation opinions delivered to Lender at any time is or becomes untrue in any material respect.

(d)

Borrower or any SPE Equity Owner, any of its officers, directors, trustees, general partners or managers or any Guarantor commits fraud or a material misrepresentation or material omission in connection with: (i) the application for or creation of the Indebtedness, (ii) any financial statement, Rent Schedule, or other report or information provided to Lender during the term of the Indebtedness, or (iii) any request for Lender’s consent to any proposed action, including a request for disbursement of funds under this Loan Agreement.

(e)

Borrower fails to comply with the Condemnation provisions of Section 6.11.

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(f)

A Transfer occurs that violates the provisions of Article VII, whether or not any actual impairment of Lender’s security results from such Transfer.

(g)

A forfeiture action or proceeding, whether civil or criminal, is commenced which could result in a forfeiture of the Mortgaged Property or otherwise materially impair the Lien created by the Security Instrument or Lender’s interest in the Mortgaged Property.

(h)

Borrower fails to perform any of its obligations under this Loan Agreement (other than those specified in Section 9.01), as and when required, which failure continues for a period of 30 days after Notice of such failure by Lender to Borrower. However, if Borrower’s failure to perform its obligations as described in this Section 9.01(h) is of the nature that it cannot be cured within the 30 day cure period after such Notice from Lender but reasonably could be cured within 90 days, then Borrower will have additional time as determined by Lender in Lender’s Discretion, not to exceed an additional 60 days, in which to cure such default, provided that Borrower has diligently commenced to cure such default during the initial 30 day cure period and diligently pursues the cure of such default. However, no such Notice or cure periods will apply in the case of any such failure which could, in Lender’s judgment, absent immediate exercise by Lender of a right or remedy under this Loan Agreement, result in harm to Lender, danger to tenants or third parties, or impairment of the Note, the Security Instrument or this Loan Agreement or any other security given under any other Loan Document.

(i)

Borrower fails to perform any of its obligations as and when required under any Loan Document other than this Loan Agreement which failure continues beyond the applicable cure period, if any, specified in that Loan Document.

(j)

The holder of any other debt instrument secured by a mortgage, deed of trust or deed to secure debt on the Mortgaged Property exercises any right to declare all amounts due under that debt instrument immediately due and payable.

(k)

Any of the following occurs:

(i)

Borrower or any SPE Equity Owner commences any case, Proceeding or other action under any existing or future law of any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency, reorganization, conservatorship or relief of debtors (A) seeking to have an order for relief entered with respect to it, or seeking to adjudicate it bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, winding-up, liquidation, dissolution, composition or other relief with respect to it or its debt, or (B) seeking appointment of a receiver, trustee, custodian, conservator or other similar official for it or for all or any substantial part of its assets.

(ii)

Any party other than Lender commences any case, Proceeding, or other action of a nature referred to in Section 9.01(k)(i) against Borrower or any SPE Equity Owner which (A) results in the entry of an order for relief or any such adjudication or appointment, or (B) has not been dismissed, discharged or bonded for a period of 90 days.

(iii)

Any case, Proceeding or other action is commenced against Borrower or any SPE Equity Owner seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its assets which results in the entry of any order by a court of competent jurisdiction for any such relief which is not vacated, discharged, or stayed or bonded pending appeal within 90 days from the entry thereof.

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(iv)

Borrower or any SPE Equity Owner takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the acts set forth in Section 9.01(k)(i), (ii) or (iii).

(l)

Borrower or any SPE Equity Owner has made any representation or warranty in Article V or any other Section of this Loan Agreement that is false or misleading in any material respect.

(m)

If the Loan is secured by an interest under a Ground Lease, Borrower fails to comply with the provisions of Section 6.19.

(n)

If the Loan is a Supplemental Loan, any Event of Default occurs under (i) the Senior Note, the Senior Instrument or any other Senior Loan Document, or (ii) any loan document related to another loan in connection with the Mortgaged Property, regardless of whether Borrower has obtained Supplemental Lender’s approval of the placement of such Lien on the Mortgaged Property. In addition, if the Loan is a Supplemental Loan, as Borrower under both the Supplemental Instrument and the Senior Instrument, Borrower acknowledges and agrees that if there is an Event of Default under the Supplemental Note, the Supplemental Instrument or any other Supplemental Loan Document, such Event of Default will be an Event of Default under the terms of the Senior Instrument and will entitle Senior Lender to invoke any and all remedies permitted to Senior Lender by applicable law, the Senior Note, the Senior Instrument or any of the other Senior Loan Documents.

(o)

If the Mortgaged Property is subject to any covenants, conditions and/or restrictions, land use restriction agreements or similar agreements, Borrower fails to perform any of its obligations under any such agreement as and when required, and such failure continues beyond any applicable cure period.

(p)

A Guarantor files for bankruptcy protection under the Bankruptcy Code or a Guarantor voluntarily becomes subject to any reorganization, receivership, insolvency proceeding or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights, or any creditor (other than Lender) of a Guarantor commences any involuntary case against a Guarantor pursuant to the Bankruptcy Code or other federal or state law affecting debtor and creditor rights, unless each of the following conditions is satisfied:

(i)

Borrower or Guarantor provides Notice of such action to Lender within 30 days after the filing of such action.

(ii)

Either (A) the case is dismissed or discharged within 90 days after filing, or (B) within 90 days following the date of such filing or commencement, the affected Guarantor is replaced with one or more other Persons acceptable to Lender, in Lender’s Discretion, each of whom executes and delivers to Lender a replacement Guaranty in form and content acceptable to Lender, together with such legal opinions as Lender deems necessary.

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(iii)

If Borrower must provide a replacement Guarantor pursuant to Section 9.01(p)(ii), then Borrower pays the Transfer Processing Fee to Lender.

(q)

With respect to a Guarantor, either of the following occurs:

(i)

The death of any Guarantor who is a natural person, unless within 30 days following the Guarantor’s death, Borrower causes one of the following to occur:

(A)

(B)

(ii)

The dissolution of any Guarantor who is an entity, unless each of the following conditions is satisfied:

(A)

Within 30 days following the dissolution of the Guarantor, Borrower causes one or more Persons acceptable to Lender, in Lender’s Discretion, to execute and deliver to Lender a guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, without any cost or expense to Lender.

(B)

Borrower pays the Transfer Processing Fee to Lender.

(r)

If a Cap Agreement is required, Borrower fails to provide Lender with a Replacement Cap Agreement prior to the expiration of the then-existing Cap Agreement.

(s)

through (hhh) are Reserved.

9.02

Protection of Lender’s Security; Security Instrument Secures Future Advances.

(a)

If Borrower fails to perform any of its obligations under this Loan Agreement or any other Loan Document, or if any action or proceeding is commenced which purports to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Loan Agreement, including eminent domain, insolvency, code enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials Laws, fraudulent conveyance or reorganizations or proceedings involving a bankrupt or decedent, then Lender, in Lender’s Discretion, may make such appearances, file such documents, disburse such sums and take such actions as Lender reasonably deems necessary to perform such obligations of Borrower and to protect Lender’s interest, including: (i) payment of Attorneys’ Fees and Costs, (ii) payment of fees and out-of-pocket expenses of accountants, inspectors and consultants, (iii) entry upon the Mortgaged Property to make Repairs or secure the Mortgaged Property, (iv) procurement of the Insurance required by Section 6.10, (v) payment of amounts which Borrower has failed to pay under Section 6.08, (vi) performance of Borrower’s obligations under Section 6.09, and (vii) advances made by Lender to pay, satisfy or discharge any obligation of Borrower for the payment of money that is secured by a Prior Lien.

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(b)

Any amounts disbursed by Lender under this Section 9.02, or under any other provision of this Loan Agreement that treats such disbursement as being made under this Section 9.02, will be secured by the Security Instrument, will be added to, and become part of, the principal component of the Indebtedness, will be immediately due and payable and will bear interest from the date of disbursement until paid at the Default Rate.

(c)

Nothing in this Section 9.02 will require Lender to incur any expense or take any action.

9.03

Remedies.

(a)

Upon an Event of Default, Lender may exercise any or all of its rights and remedies provided under the Loan Documents and Borrower will pay all costs associated therewith, including Attorneys’ Fees and Costs.

(b)

Each right and remedy provided in this Loan Agreement is distinct from all other rights or remedies under this Loan Agreement or any other Loan Document or afforded by applicable law or equity, and each will be cumulative and may be exercised concurrently, independently or successively, in any order. Lender’s exercise of any particular right or remedy will not in any way prevent Lender from exercising any other right or remedy available to Lender. Lender may exercise any such remedies from time to time and as often as Lender chooses.

(c)

Lender will have all remedies available to Lender under Revised Article 9 of the Uniform Commercial Code of the Property Jurisdiction, the Loan Documents and under applicable law.

(d)

Lender may also retain (i) all money in the Reserve Funds, including interest, and (ii) any Cap Payment, and in Lender’s sole and absolute discretion, may apply such amounts, without restriction and without any specific order of priority, to the payment of any and all Indebtedness.

(e)

If a claim or adjudication is made that Lender has acted unreasonably or unreasonably delayed acting in any case where, by law or under this Loan Agreement or the other Loan Documents, Lender has an obligation to act reasonably or promptly, then Lender will not be liable for any monetary damages, and Borrower’s sole remedy will be limited to commencing an action seeking injunctive relief or declaratory judgment. Any action or proceeding to determine whether Lender has acted reasonably will be determined by an action seeking declaratory judgment.

(f)

Reserved.

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9.04

Forbearance.

(a)

Lender may (but will not be obligated to) agree with Borrower, from time to time, and without giving Notice to, or obtaining the consent of, or having any effect upon the obligations of, any Guarantor or other third party obligor, to take any of the following actions:

(i)

Extend the time for payment of all or any part of the Indebtedness.

(ii)

Reduce the payments due under this Loan Agreement, the Note or any other Loan Document.

(iii)

Release anyone liable for the payment of any amounts under this Loan Agreement, the Note or any other Loan Document.

(iv)

Accept a renewal of the Note.

(v)

Modify the terms and time of payment of the Indebtedness.

(vi)

Join in any extension or subordination agreement.

(vii)

Release any portion of the Mortgaged Property.

(viii)

Take or release other or additional security.

(ix)

Modify the rate of interest or period of amortization of the Note or change the amount of the monthly installments payable under the Note.

(x)

Otherwise modify this Loan Agreement, the Note or any other Loan Document.

(b)

Any forbearance by Lender in exercising any right or remedy under the Note, this Loan Agreement or any other Loan Document or otherwise afforded by applicable law, will not be a waiver of or preclude the exercise of any other right or remedy, or the subsequent exercise of any right or remedy. The acceptance by Lender of payment of all or any part of the Indebtedness after the due date of such payment, or in an amount which is less than the required payment, will not be a waiver of Lender’s right to require prompt payment when due of all other payments on account of the Indebtedness or to exercise any remedies for any failure to make prompt payment. Enforcement by Lender of any security for the Indebtedness will not constitute an election by Lender of remedies so as to preclude the exercise of any other right available to Lender. Lender’s receipt of any awards or proceeds under Sections 6.10 and 6.11 will not operate to cure or waive any Event of Default.

9.05

Waiver of Marshalling. Notwithstanding the existence of any other security interests in the Mortgaged Property held by Lender or by any other party, Lender will have the right to determine the order in which any or all of the Mortgaged Property will be subjected to the remedies provided in this Loan Agreement or any other Loan Document or applicable law. Lender will have the right to determine the order in which any or all portions of the Indebtedness are satisfied from the proceeds realized upon the exercise of such remedies. Borrower and any party who now or in the future acquires a security interest in the Mortgaged Property and who has actual or constructive notice of the Security Instrument waives any and all right to require the marshalling of assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels or as an entirety in connection with the exercise of any of the remedies permitted by applicable law or provided in this Loan Agreement.

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ARTICLE X

RELEASE; INDEMNITY.

10.01

Release. Borrower covenants and agrees that, in performing any of its duties under this Loan Agreement, none of Lender, Loan Servicer or any of their respective agents or employees will be liable for any losses, claims, damages, liabilities and expenses that may be incurred by any of them as a result of such performance, except that no party will be released from liability for any losses, claims, damages, liabilities or expenses arising out of the willful misconduct or gross negligence of such party.

10.02

Indemnity.

(a)

General Indemnity . Borrower agrees to indemnify, hold harmless and defend Lender, including any custodian, trustee and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties, any prior owner or holder of the Note, the Loan Servicer, any prior Loan Servicer, the officers, directors, shareholders, partners, employees and trustees of each of the foregoing, and the heirs, legal representatives, successors and assigns of each of the foregoing (collectively, “ Indemnitees ”) against any and all losses, claims, damages, liabilities and expenses including Attorneys’ Fees and Costs, which may be imposed or incurred by any of them directly or indirectly arising out of, or in any way relating to, or as a result of: (i) any failure of the Mortgaged Property to comply with the laws, regulations, ordinance, code or decree of any Governmental Authority, including those pertaining to the Americans with Disabilities Act, zoning, occupancy and subdivision of real property, (ii) any obligation of Borrower under any Lease, and (iii) any accident, injury or death to any natural person on the Mortgaged Property or any damage to personal property located on the Mortgaged Property, except that no such party will be indemnified from liability for any losses, claims, damages, liabilities or expenses arising out of the willful misconduct or gross negligence of such party.

(b)

Environmental Indemnity . Borrower agrees to indemnify, hold harmless and defend Indemnitees from and against all proceedings, claims, damages, penalties and costs (whether initiated or sought by Governmental Authorities or private parties), including Attorneys’ Fees and Costs and remediation costs, whether incurred in connection with any judicial or administrative process or otherwise, arising directly or indirectly from any of the following:

(i)

Any breach of any representation or warranty of Borrower in Section 5.05.

(ii)

Any failure by Borrower to perform any of its obligations under Section 6.12.

(iii)

The existence or alleged existence of any Prohibited Activity or Condition.

(iv)

The presence or alleged presence of Hazardous Materials on or under the Mortgaged Property or in any of the Improvements.

(v)

The actual or alleged violation of any Hazardous Materials Law.

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(c)

Indemnification Regarding ERISA Covenants . BORROWER WILL INDEMNIFY LENDER AND DEFEND AND HOLD LENDER HARMLESS FROM AND AGAINST ALL CIVIL PENALTIES, EXCISE TAXES, OR OTHER LOSS, COST, DAMAGE AND EXPENSE (INCLUDING REASONABLE ATTORNEYS’ FEES AND COSTS INCURRED IN THE INVESTIGATION, DEFENSE AND SETTLEMENT OF CLAIMS AND LOSSES INCURRED IN CORRECTING ANY PROHIBITED TRANSACTION OR IN THE SALE OF A PROHIBITED LOAN, AND IN OBTAINING ANY INDIVIDUAL PROHIBITED TRANSACTION EXEMPTION UNDER ERISA THAT MAY BE REQUIRED, IN LENDER’S SOLE AND ABSOLUTE DISCRETION) THAT LENDER MAY INCUR, DIRECTLY OR INDIRECTLY, AS A RESULT OF DEFAULT UNDER SECTION 6.20. THIS INDEMNITY WILL SURVIVE ANY TERMINATION, SATISFACTION OR FORECLOSURE OF THE SECURITY INSTRUMENT.

(d)

Securitization Indemnification .

(i)

Borrower agrees to indemnify, hold harmless and defend the Indemnified Parties from and against any and all proceedings, losses, claims, damages, liabilities, penalties, costs and expenses (whether initiated or sought by Governmental Authorities or private parties), including Attorneys’ Fees and Costs, which may be incurred by any Indemnified Party (either directly or indirectly), which arise out of, are in any way related to, or are as a result of a claim that the Borrower Information contains an untrue statement of any material fact or the Borrower Information omits to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading (collectively, the “ Securitization Indemnification ”).

(ii)

Borrower will not be liable under the Securitization Indemnification if the claim is based on Borrower Information which Lender has materially misstated or materially misrepresented in the Disclosure Document.

(iii)

For purposes of this Section 10.02(d):

(A)

“ Borrower Information ” includes any information provided at any time to Lender or Loan Servicer by Borrower, any SPE Equity Owner, any Guarantor, any Property Manager or any Affiliates of the foregoing with respect to any of the following:

(1)

Any Person listed in Section 10.02(d)(iii)(A).

(2)

The Loan.

(3)

The Mortgaged Property.

Borrower Information includes: (i) representations and warranties made in the Loan Documents, (ii) financial statements of Borrower, any SPE Equity Owner, any Designated Entity for Transfers or any Guarantor, and (iii) operating statements and rent rolls with respect to the Mortgaged Property. Borrower Information does not include any information provided directly to Lender or Loan Servicer by a third party such as an appraiser or an environmental consultant.

(B)

The term “ Lender ” includes its officers and directors.

(C)

An “ Issuer Person ” includes all of the following:

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(1)

Any Person that has filed the registration statement, if any, relating to the Securitization, and any Affiliate of such Person.

(2)

Any Person acting as issuer, depositor, sponsor and/or in a similar capacity with respect to the Securitization, and any Affiliate of such Person.

(D)

The “ Issuer Group ” includes all of the following:

(1)

Each director and officer of any Issuer Person.

(2)

Each entity that Controls any Issuer Person within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act.

(E)

The “ Underwriter Group ” includes all of the following:

(1)

Each entity which is acting as an underwriter, manager, placement agent, initial purchaser or in a similar capacity with respect to the Securitization.

(2)

Each entity that Controls any such entity described in Section 10.02(d)(iii)(E)(1) within the meaning of Section 15 of the Securities Act or Section 20 of the Securities Exchange Act and is acting as an underwriter, manager, placement agent, initial purchaser or in a similar capacity with respect to the Securitization.

(3)

The directors and officers of the entities described in Section 10.02(d)(iii)(E)(1) and Section 10.02(d)(iii)(E)(2).

(F)

“ Indemnified Party ” or “ Indemnified Parties ” means one or more of Lender, Issuer Person, Issuer Group, and Underwriter Group.

(e)

Selection and Direction of Counsel . Counsel selected by Borrower to defend Indemnitees will be subject to the approval of those Indemnitees. In any circumstances in which the indemnity under this Article X applies, Lender may employ its own legal counsel and consultants to prosecute, defend or negotiate any claim or legal or administrative proceeding and Lender, with the prior written consent of Borrower (which will not be unreasonably withheld, delayed or conditioned) may settle or compromise any action or legal or administrative proceeding. However, unless an Event of Default has occurred and is continuing, or the interests of Borrower and Lender are in conflict, as determined by Lender in Lender’s Discretion, Lender will permit Borrower to undertake the actions referenced in this Article X so long as Lender approves such action, which approval will not be unreasonably withheld or delayed. Borrower will reimburse Lender upon demand for all costs and expenses incurred by Lender, including all costs of settlements entered into in good faith, consultants’ fees and Attorneys’ Fees and Costs.

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(f)

Settlement or Compromise of Claims . Borrower will not, without the prior written consent of those Indemnitees who are named as parties to a claim or legal or administrative proceeding (“ Claim ”), settle or compromise the Claim if the settlement (i) results in the entry of any judgment that does not include as an unconditional term the delivery by the claimant or plaintiff to Lender of a written release of those Indemnitees, satisfactory in form and substance to Lender, or (ii) may materially and adversely affect Lender, as determined by Lender in Lender’s Discretion.

(g)

Effect of Changes to Loan on Indemnification Obligations . Borrower’s obligation to indemnify the Indemnitees will not be limited or impaired by any of the following, or by any failure of Borrower or any Guarantor to receive notice of or consideration for any of the following:

(i)

Any amendment or modification of any Loan Document.

(ii)

Any extensions of time for performance required by any Loan Document.

(iii)

Any provision in any of the Loan Documents limiting Lender’s recourse to property securing the Indebtedness, or limiting the personal liability of Borrower or any other party for payment of all or any part of the Indebtedness.

(iv)

The accuracy or inaccuracy of any representations and warranties made by Borrower under this Loan Agreement or any other Loan Document.

(v)

The release of Borrower or any other Person, by Lender or by operation of law, from performance of any obligation under any Loan Document.

(vi)

The release or substitution in whole or in part of any security for the Indebtedness.

(vii)

Lender’s failure to properly perfect any Lien or security interest given as security for the Indebtedness.

(h)

Payments by Borrower . Borrower will, at its own cost and expense, do all of the following:

(i)

Pay or satisfy any judgment or decree that may be entered against any Indemnitee or Indemnitees in any legal or administrative proceeding incident to any matters against which Indemnitees are entitled to be indemnified under this Article X.

(ii)

Reimburse Indemnitees for any expenses paid or incurred in connection with any matters against which Indemnitees are entitled to be indemnified under this Article X.

(iii)

Reimburse Indemnitees for any and all expenses, including Attorneys’ Fees and Costs, paid or incurred in connection with the enforcement by Indemnitees of their rights under this Article X, or in monitoring and participating in any legal or administrative proceeding.

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(i)

Other Obligations . The provisions of this Article X will be in addition to any and all other obligations and liabilities that Borrower may have under applicable law or under other Loan Documents, and each Indemnitee will be entitled to indemnification under this Article X without regard to whether Lender or that Indemnitee has exercised any rights against the Mortgaged Property or any other security, pursued any rights against any Guarantor, or pursued any other rights available under the Loan Documents or applicable law. If Borrower consists of more than one Person, the obligation of those Persons to indemnify the Indemnitees under this Article X will be joint and several. The obligation of Borrower to indemnify the Indemnitees under this Article X will survive any repayment or discharge of the Indebtedness, any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Lien of the Security Instrument. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of, or held title to, the Mortgaged Property, Borrower will have no obligation to indemnify the Indemnitees under this Article X after the date of the release of record of the Lien of the Security Instrument by payment in full at the Maturity Date or by voluntary prepayment in full.

(j)

Reserved.

10.03

Reserved.

ARTICLE XI

MISCELLANEOUS PROVISIONS.

11.01

Waiver of Statute of Limitations, Offsets and Counterclaims. Borrower waives the right to assert any statute of limitations as a bar to the enforcement of this Loan Agreement or the Lien of the Security Instrument or to any action brought to enforce any Loan Document. Borrower waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or otherwise to offset any obligations to make the payments required by the Loan Documents. No failure by Lender to perform any of its obligations under the Loan Documents will be a valid defense to, or result in any offset against, any payments that Borrower is obligated to make under any of the Loan Documents.

11.02

Governing Law; Consent to Jurisdiction and Venue.

(a)

This Loan Agreement, and any Loan Document which does not itself expressly identify the law which is to apply to it, will be governed by the laws of the Property Jurisdiction.

(b)

Borrower agrees that any controversy arising under or in relation to the Note, the Security Instrument, this Loan Agreement or any other Loan Document may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that may arise under or in relation to the Note, any security for the Indebtedness or any other Loan Document. Borrower irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 11.02 is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters under this Loan Agreement in any court of any other jurisdiction.

11.03

Notice.

(a)

All Notices under or concerning this Loan Agreement will be in writing. Each Notice will be deemed given on the earliest to occur of: (i) the date when the Notice is received by the addressee, (ii) the first Business Day after the Notice is delivered to a recognized overnight courier service, with arrangements made for payment of charges for next Business Day delivery, or (iii) the third Business Day after the Notice is deposited in the United States mail with postage prepaid, certified mail, return receipt requested. Addresses for Notice are as follows:

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If to Lender:

KeyBank National Association
c/o KeyBank Real Estate Capital - Servicing Department, 11501 Outlook Street, Suite 300
Overland Park, Kansas 66211
Mailcode: KS-01-11-0501, Attn: Servicing Manager

If to Borrower:

BR Carroll Glenridge, LLC
c/o Carroll Organization, LLC
3340 Peachtree Road, NE, Suite 2250
Atlanta, Georgia 30326
Attention: Josh Champion

(b)

Any party to this Loan Agreement may change the address to which Notices intended for it are to be directed by means of Notice given to the other party in accordance with this Section 11.03. Each party agrees that it will not refuse or reject delivery of any Notice given in accordance with this Section 11.03, that it will acknowledge, in writing, the receipt of any Notice upon request by the other party and that any Notice rejected or refused by it will be deemed for purposes of this Section 11.03 to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of the U.S. Postal Service or the courier service.

	(c)	Any Notice under the Note and any other Loan Document that does not specify how Notices are to be given will be given in accordance with this Section 11.03.

(d)

Reserved.

11.04

Successors and Assigns Bound. This Loan Agreement will bind the respective successors and assigns of Borrower and Lender, and the rights granted by this Loan Agreement will inure to Lender’s successors and assigns.

11.05

Joint and Several (and Solidary) Liability. If more than one Person signs this Loan Agreement as Borrower, the obligations of such Persons will be joint and several. For a Mortgaged Property located in Louisiana, if more than one Person signs this Loan Agreement as Borrower, the obligations of such Persons with be joint and several and solidary, and wherever the phrase “joint and several” appears in this Loan Agreement, the phrase is amended to read “joint, several, and solidary.”

11.06

Relationship of Parties; No Third Party Beneficiary.

(a)

The relationship between Lender and Borrower will be solely that of creditor and debtor, respectively, and nothing contained in this Loan Agreement will create any other relationship between Lender and Borrower. Nothing contained in this Loan Agreement will constitute Lender as a joint venturer, partner or agent of Borrower, or render Lender liable for any debts, obligations, acts, omissions, representations or contracts of Borrower.

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(b)

No creditor of any party to this Loan Agreement and no other Person will be a third party beneficiary of this Loan Agreement or any other Loan Document. Without limiting the generality of the preceding sentence: (i) any arrangement (“ Servicing Arrangement ”) between Lender and any Loan Servicer for loss sharing or interim advancement of funds will constitute a contractual obligation of such Loan Servicer that is independent of the obligation of Borrower for the payment of the Indebtedness, (ii) Borrower will not be a third party beneficiary of any Servicing Arrangement, and (iii) no payment by the Loan Servicer under any Servicing Arrangement will reduce the amount of the Indebtedness.

11.07

Severability; Amendments.

( a)

The invalidity or unenforceability of any provision of this Loan Agreement will not affect the validity or enforceability of any other provision, and all other provisions will remain in full force and effect. This Loan Agreement contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Loan Agreement.

(b)

This Loan Agreement may not be amended or modified except by a writing signed by the party against whom enforcement is sought.

11.08

Disclosure of Information. Borrower acknowledges that Lender may provide to third parties with an existing or prospective interest in the servicing, enforcement, evaluation, performance, ownership, purchase, participation or Securitization of the Loan, including any of the Rating Agencies, any entity maintaining databases on the underwriting and performance of commercial mortgage loans, as well as governmental regulatory agencies having regulatory authority over Lender, any and all information which Lender now has or may hereafter acquire relating to the Loan, the Mortgaged Property, Borrower, any SPE Equity Owner or any Guarantor, as Lender determines necessary or desirable and that such information may be included in disclosure documents in connection with a Securitization or syndication of participation interests, including a prospectus, prospectus supplement, offering memorandum, private placement memorandum or similar document (each, a “Disclosure Document” ) and also may be included in any filing with the Securities and Exchange Commission pursuant to the Securities Act or the Securities Exchange Act. To the fullest extent permitted under applicable law, Borrower irrevocably waives all rights, if any, to prohibit such disclosure, including any right of privacy.

11.09

Determinations by Lender. Unless otherwise provided in this Loan Agreement, in any instance where the consent or approval of Lender may be given or is required, or where any determination, judgment or decision is to be rendered by Lender under this Loan Agreement, the granting, withholding or denial of such consent or approval and the rendering of such determination, judgment or decision will be made or exercised by Lender (or its designated representative) at its sole and exclusive option and in its sole and absolute discretion.

11.10

Sale of Note; Change in Servicer; Loan Servicing. The Note or a partial interest in the Note (together with this Loan Agreement and the other Loan Documents) may be sold one or more times without prior Notice to Borrower. A sale may result in a change of the Loan Servicer. There also may be one or more changes of the Loan Servicer unrelated to a sale of the Note. If there is a change of the Loan Servicer, Borrower will be given Notice of the change. All actions regarding the servicing of the Loan evidenced by the Note, including the collection of payments, the giving and receipt of Notice, inspections of the Mortgaged Property, inspections of books and records, and the granting of consents and approvals, may be taken by the Loan Servicer unless Borrower receives Notice to the contrary. If Borrower receives conflicting Notices regarding the identity of the Loan Servicer or any other subject, any such Notice from Lender will govern.

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11.11

Supplemental Financing.

(a)

This Section will apply only if at the time of any application referred to in Section 11.11(b), Freddie Mac has in effect a product described in its Multifamily Seller/Servicer Guide under which it purchases supplemental mortgages on multifamily properties that meet specified criteria (“ Supplemental Mortgage Product ”). For purposes of this Section 11.11 only, the term “Freddie Mac” will include any affiliate or subsidiary of Freddie Mac.

(b)

After the first anniversary of the date of the most recently incurred Senior Indebtedness, Freddie Mac will consider an application from an originating lender that is generally approved by Freddie Mac to sell mortgages to Freddie Mac under the Supplemental Mortgage Product (“ Approved Seller/Servicer ”) for the purchase by Freddie Mac of a proposed indebtedness of Borrower to the Approved Seller/Servicer to be secured by one or more Supplemental Instruments on the Mortgaged Property. Freddie Mac will purchase each Supplemental Loan secured by the Mortgaged Property if each of the following conditions is satisfied:

(i)

At the time of the proposed Supplemental Loan, no Event of Default may have occurred and be continuing and no event or condition may have occurred and be continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(ii)

Borrower and the Mortgaged Property must be acceptable to Freddie Mac under its Supplemental Mortgage Product.

(iii)

New loan documents must be entered into to reflect each Supplemental Loan, such documents to be acceptable to Freddie Mac in its discretion.

(iv)

No Supplemental Loan may cause the combined debt service coverage ratio of the Mortgaged Property after the making of that Supplemental Loan to be less than the Minimum DSCR. As used in this Section, the term “combined debt service coverage ratio” means, with respect to the Mortgaged Property, the ratio of:

(A)

the annual net operating income from the operations of the Mortgaged Property at the time of the proposed Supplemental Loan,

(B)

the aggregate of the annual principal and interest payable on all of the following:

(I)

the Indebtedness under this Loan Agreement (using a 30 year amortization schedule),

(II)

any “Indebtedness” as defined in any security instruments recorded against the Mortgaged Property (using a 30 year amortization schedule for any Supplemental Loans), and

(III)

the proposed “Indebtedness” for any Supplemental Loan (using a 30 year amortization schedule).

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As used in this Section, “annual principal and interest” with respect to a floating rate loan will be calculated by Freddie Mac using an interest rate equal to one of the following:

(X)

If the loan has an internal interest rate cap, the Capped Interest Rate.

(Y)

If the loan has an external interest rate cap, the Strike Rate plus the Margin.

(Z)

If the loan has no interest rate cap, the greater of (I) 7%, or (II) the then-current LIBOR Index Rate plus the Margin plus 300 basis points.

The annual net operating income of the Mortgaged Property will be as determined by Freddie Mac in its discretion considering factors such as income in place at the time of the proposed Supplemental Loan and income during the preceding 12 months, and actual, historical and anticipated operating expenses. Freddie Mac will determine the combined debt service coverage ratio of the Mortgaged Property based on its underwriting. Borrower will provide Freddie Mac such financial statements and other information Freddie Mac may require to make these determinations.

(v)

No Supplemental Loan may cause the combined loan to value ratio of the Mortgaged Property after the making of that Supplemental Loan to exceed the Maximum Combined LTV, as determined by Freddie Mac. As used in this Section, “combined loan to value ratio” means, with respect to the Mortgaged Property, the ratio, expressed as a percentage, of:

(A)

the aggregate outstanding principal balances of all of the following:

(I)

the Indebtedness under this Loan Agreement,

(II)

any “Indebtedness” as defined in any security instruments recorded against the Mortgaged Property, and

(III)

the proposed “Indebtedness” for any Supplemental Loan,

(B)

the value of the Mortgaged Property.

Freddie Mac will determine the combined loan to value ratio of the Mortgaged Property based on its underwriting. Borrower will provide Freddie Mac such financial statements and other information Freddie Mac may require to make these determinations. In addition, Freddie Mac, at Borrower’s expense, may obtain MAI appraisals of the Mortgaged Property in order to assist Freddie Mac in making the determinations under this Section. If Freddie Mac requires an appraisal, then the value of the Mortgaged Property that will be used to determine whether the Maximum Combined LTV has been met will be the lesser of the appraised value set forth in such appraisal or the value of the Mortgaged Property as determined by Freddie Mac.

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(vi)

Borrower’s organizational documents are amended to permit Borrower to incur additional debt in the form of Supplemental Loans (Lender will consent to such amendment(s)).

(vii)

One or more Persons acceptable to Freddie Mac executes and delivers to the Approved Seller/Servicer a Guaranty in a form acceptable to Freddie Mac with respect to the exceptions to non-recourse liability described in Freddie Mac’s form promissory note, unless Freddie Mac has elected to waive its requirement for a Guaranty.

(viii)

The loan term of each Supplemental Loan will be coterminous with the Senior Indebtedness or longer than the Senior Indebtedness, in Freddie Mac’s discretion.

(ix)

The Prepayment Premium Period of each Supplemental Loan will be coterminous with the Prepayment Premium Period or the combined Lockout Period and Defeasance Period, as applicable, of the Senior Indebtedness.

(x)

The interest rate of each Supplemental Loan will be determined by Freddie Mac in its discretion.

(xi)

Lender enters into an intercreditor agreement (“ Intercreditor Agreement ”) acceptable to Freddie Mac and to Lender for each Supplemental Loan.

(xii)

Borrower’s payment of fees and other expenses charged by Lender, Freddie Mac, the Approved Seller/Servicer, and the Rating Agencies (including reasonable Attorneys’ Fees and Costs) in connection with reviewing and originating each Supplemental Loan.

(xiii)

Commencing on the date that the first Supplemental Loan is originated and continuing for so long as any Supplemental Loan is outstanding, the first lien Senior Lender will begin collection of any deferred Monthly Deposit or Revised Monthly Deposit for Capital Replacements in accordance with Section 4.04(e) (if applicable) as well as Imposition Reserve Deposits for any of the following Impositions marked ‘Deferred’ in Section 4.02(a):

(A)

Property Insurance premiums or premiums for other Insurance required by Lender under Section 6.10.

(B)

Taxes and payments in lieu of taxes

(C)

Ground Rents

Such deposits will be credited to the payment of any such required Imposition Reserve Deposits under any Supplemental Loan.

(xiv)

If any covenants, conditions and restrictions affecting the Mortgaged Property provide for a lien for any assessments or other unpaid amounts, Borrower will provide satisfactory evidence that such lien will be subordinate to the lien of the Supplemental Instrument.

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(xv)

All other requirements of the Supplemental Mortgage Product must be met, unless Freddie Mac has elected to waive one or more of its requirements.

(xvi)

Reserved.

(xvii)

Reserved.

(xviii)

Reserved.

(c)

No later than 5 Business Days after Lender’s receipt of a written request from Borrower, Lender will provide the following information to an Approved Seller/Servicer:

(i)

The then-current outstanding principal balance of the Senior Indebtedness.

(ii)

Payment history of the Senior Indebtedness.

(iii)

Whether any Reserve Funds are being collected on the Senior Indebtedness and the amount of each such Reserve Fund deposit as of the date of the request.

(iv)

Whether any Repairs, Capital Replacements or improvements or rental achievement or burn-off guaranty requirements are existing or outstanding under the terms of the Senior Indebtedness.

(v)

A copy of the most recent inspection report for the Mortgaged Property.

(vi)

Whether any modifications or amendments have been made to the Loan Documents for the Senior Indebtedness since origination of the Senior Indebtedness and, if applicable, a copy of such modifications and amendments.

(vii)

Whether to Lender’s knowledge any Event of Default exists under the Senior Indebtedness.

Lender will only be obligated to provide this information in connection with Borrower’s request for a Supplemental Loan from an Approved Seller/Servicer. Notwithstanding anything in this Section to the contrary, if Freddie Mac is the owner of the Note, this Section 11.11(c) is not applicable.

(d)

Lender will have no obligation to consent to any mortgage or Lien on the Mortgaged Property that secures any indebtedness other than the Indebtedness, except as set forth in this Loan Agreement.

(e)

If a Supplemental Loan is made to Borrower, Borrower agrees that the terms of the Intercreditor Agreement will govern with respect to any distributions of excess proceeds by Lender to the Supplemental Lender, and Borrower agrees that Lender may distribute any excess proceeds received by Lender pursuant to the Loan Documents to Supplemental Lender pursuant to the Intercreditor Agreement.

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11.12

Defeasance. (Section Applies if Loan is Assigned to REMIC Trust Prior to the Cut-off Date and if the Note provides for Defeasance) . This Section 11.12 will apply only if the Note is assigned to a REMIC trust prior to the Cut-off Date, and if the Note provides for Defeasance. If both of these conditions are met, then, subject to Section 11.12(a) and (c), Borrower will have the right to defease the Loan in whole (“ Defeasance ”) and obtain the release of the Mortgaged Property from the Lien of the Security Instrument upon the satisfaction of each of the following conditions:

(a)

Borrower will not have the right to obtain Defeasance at any of the following times:

(i)

If the Loan is not assigned to a REMIC trust.

(ii)

During the Lockout Period.

(iii)

After the expiration of the Defeasance Period.

(iv)

After Lender has accelerated the maturity of the unpaid principal balance of, accrued interest on, and other amounts payable under, the Note pursuant to Section 11 of the Note.

(b)

Borrower will give Lender Notice ( “Defeasance Notice” ) specifying a Business Day ( “Defeasance Closing Date” ) on which Borrower desires to close the Defeasance. The Defeasance Closing Date specified by Borrower may not be more than 60 calendar days, nor less than 30 calendar days, after the date on which Lender receives the Defeasance Notice. Lender will acknowledge receipt of the Defeasance Notice and will notify Borrower of the identity of the accommodation borrower (“ Successor Borrower ”).

(c)

The Defeasance Notice must be accompanied by a $10,000 non-refundable fee (“ Defeasance Fee ”) for Lender’s processing of the Defeasance. If Lender does not receive the Defeasance Fee, then Borrower’s right to obtain Defeasance pursuant to that Defeasance Notice will terminate.

(d)

(i)

If Borrower timely pays the Defeasance Fee, but Borrower fails to perform its other obligations under this Section, Lender will have the right to retain the Defeasance Fee as liquidated damages for Borrower’s default and, except as provided in Section 11.12(d)(ii), Borrower will be released from all further obligations under this Section 11.12. Borrower acknowledges that Lender will incur financing costs in arranging and preparing for the release of the Mortgaged Property from the Lien of the Security Instrument in reliance on the executed Defeasance Notice. Borrower agrees that the Defeasance Fee represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Loan Agreement, of the damages Lender will incur by reason of Borrower’s default.

(ii)

If the Defeasance is not consummated on the Defeasance Closing Date for any reason, Borrower agrees to reimburse Lender for all third party costs and expenses (other than financing costs covered by Section 11.12(d)(i)) incurred by Lender in reliance on the executed Defeasance Notice, within 5 Business Days after Borrower receives a written demand for payment, accompanied by a statement, in reasonable detail, of Lender’s third party costs and expenses.

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(iii)

All payments required to be made by Borrower to Lender pursuant to this Section 11.12 will be made by wire transfer of immediately available funds to the account(s) designated by Lender in its acknowledgement of the Defeasance Notice.

(e)

No Event of Default has occurred and is continuing.

(f)

Borrower will deliver each of the following documents to Lender, in form and substance satisfactory to Lender, on or prior to the Defeasance Closing Date, unless Lender has issued a written waiver of its right to receive any such document:

(i)

One or more opinions of counsel for Borrower confirming each of the following:

(A)

Lender has a valid and perfected first Lien and first priority security interest in the Defeasance Collateral and the proceeds of the Defeasance Collateral.

(B)

The Pledge Agreement is duly authorized, executed, delivered and enforceable against Borrower in accordance with its terms.

(C)

If, as of the Defeasance Closing Date, the Note is held by a REMIC trust, then each of the following is correct:

(1)

The Defeasance has been effected in accordance with the requirements of Treasury Regulation Section 1.860G-2(a)(8) (as such regulation may be modified, amended or replaced from time to time).

(2)

The qualification and status of the REMIC trust as a REMIC will not be adversely affected or impaired as a result of the Defeasance.

(3)

The REMIC trust will not incur a tax under Section 860G(d) of the Tax Code as a result of the Defeasance.

(D)

The Defeasance will not result in a “sale or exchange” of the Note within the meaning of Section 1001(c) of the Tax Code and the temporary and final regulations promulgated thereunder.

(ii)

A written certificate from an independent certified public accounting firm (reasonably acceptable to Lender), confirming that the Defeasance Collateral will generate cash sufficient to make all Scheduled Debt Payments as they fall due under the Note, including full payment due on the Note on the Maturity Date.

(iii)

Lender’s form of a pledge and security agreement (“ Pledge Agreement ”) and financing statements which pledge and create a first priority security interest in the Defeasance Collateral in favor of Lender.

(iv)

Lender’s form of a transfer and assumption agreement (“ Transfer and Assumption Agreement ”), pursuant to which Borrower and any Guarantor (in each case, subject to satisfaction of all requirements under this Loan Agreement) will be relieved from liability in connection with the Loan to the extent described in Sections 7.05(b) and 7.05(c), respectively, and Successor Borrower will assume all remaining obligations.

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(v)

Forms of all documents necessary to release the Mortgaged Property from the Liens created by the Security Instrument and related UCC financing statements (collectively, “ Release Instruments ”), each in appropriate form required by the Property Jurisdiction.

(vi)

Any other opinions, certificates, documents or instruments that Lender may reasonably request.

(g)

Borrower will deliver to Lender, on or prior to the Defeasance Closing Date, each of the following:

(i)

The Defeasance Collateral, which meets all of the following requirements:

(A)

It is owned by Borrower, free and clear of all Liens and claims of third-parties.

(B)

It is in an amount sufficient to provide for (1) redemption payments to occur prior, but as close as possible, to all successive Installment Due Dates occurring under the Note after the Defeasance Closing Date, and (2) delivery of redemption proceeds at least equal to the amount of principal and interest due on the Note on each Installment Due Date including full payment due on the Note on the Maturity Date (“ Scheduled Debt Payments ”).

(C)

All redemption payments received from the Defeasance Collateral will be paid directly to Lender to be applied on account of the Scheduled Debt Payments occurring after the Defeasance Closing Date.

(D)

The pledge of the Defeasance Collateral will be effected through the book-entry facilities of a qualified securities intermediary designated by Lender in conformity with all applicable laws.

(ii)

All accrued and unpaid interest and all other sums due under the Note, this Loan Agreement and under the other Loan Documents, including all amounts due under Section 11.12(i), up to the Defeasance Closing Date.

(h)

Reserved.

(i)

Borrower will pay all reasonable costs and expenses incurred by Lender in connection with the Defeasance in full on or prior to the Defeasance Closing Date, which payment is required prior to Lender’s issuance of the Release Instruments and whether or not Defeasance is completed. Such expenses include all fees, costs and expenses incurred by Lender and its agents in connection with the Defeasance (including Attorneys’ Fees and Costs for the review and preparation of the Pledge Agreement and of the other materials described in this Loan Agreement and any related documentation, Rating Agencies’ fees, or other costs related to the Defeasance).

Lender reserves the right to require that Borrower post a deposit to cover costs which Lender reasonably anticipates that Lender will incur in connection with the Defeasance.

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(j)

No Transfer Fee will be payable to Lender upon a Defeasance made in accordance with this Section 11.12.

(k)

Reserved.

11.13

Lender’s Rights to Sell or Securitize. Borrower acknowledges that Lender, and each successor to Lender’s interest, may (without prior Notice to Borrower or Borrower’s prior consent), sell or grant participations in the Loan (or any part of the Loan), sell or subcontract the servicing rights related to the Loan, securitize the Loan or place the Loan in a trust. Borrower agrees to cooperate with all reasonable requests of Lender in connection with any of the foregoing including taking the following actions:

(a)

Executing any financing statements or other documents deemed necessary by Lender or its transferee to create, perfect or preserve the rights and interest to be acquired by such transferee.

(b)

Delivering revised organizational documents, counsel opinions, and executed amendments to the Loan Documents satisfactory to the Rating Agencies.

(c)

Providing updated financial information with appropriate verification through auditors’ letters, if required by Lender. (If Lender requires that Borrower’s updated financial information be accompanied by appropriate verification through auditors’ letters, then Lender will reimburse Borrower for the costs which Borrower reasonably incurs in connection with obtaining such auditors’ letters.)

(d)

Providing updated information on all litigation proceedings affecting Borrower or any Borrower Principal as required in Section 6.16.

(e)

Reviewing information contained in any Disclosure Document and providing a mortgagor estoppel certificate, written confirmation of Borrower’s indemnification obligations under this Loan Agreement, and such other information about Borrower, any SPE Equity Owner, any Guarantor, any Property Manager or the Mortgaged Property as Lender may require for Lender’s offering materials.

11.14

Cooperation with Rating Agencies and Investors. Borrower covenants and agrees that if Lender decides to include the Loan as an asset of a Secondary Market Transaction, Borrower will do all of the following:

(a)

At Lender’s request, meet with representatives of the Rating Agencies and/or investors to discuss the business and operations of the Mortgaged Property.

(b)

Permit Lender or its representatives to provide related information to the Rating Agencies and/or investors.

(c)

Cooperate with the reasonable requests of the Rating Agencies and/or investors in connection with all of the foregoing.

11.15

Letter of Credit Requirements.

(a)

Any Letter of Credit required under this Loan Agreement must satisfy the following conditions:

(i)

It must be a clean, irrevocable, unconditional standby letter of credit.

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(ii)

It must name Lender as the sole beneficiary and permit Lender to assign the Letter of Credit without further consent from Issuer.

(iii)

It must have an initial term of not less than 12 months.

(iv)

It must be in the form required by Lender.

(v)

It must provide that it may be drawn on by Lender or Loan Servicer, in whole or in part, by presentation to Issuer of a sight draft without any other restrictions on the right to draw.

(vi)

It must be issued by an Issuer meeting Lender’s requirements, which Issuer (i) must be an Eligible Institution, and (ii) may not, unless Lender agrees in writing, be an affiliate of Borrower or Lender.

(vii)

It must be obtained on behalf of Borrower by a Person other than Borrower’s general partners or managing members if Borrower is a general or limited partnership or limited liability company. Neither Borrower nor the general partners or managing members, if applicable, may have any liability or other obligations under any reimbursement agreement with respect to the Letter of Credit.

(viii)

It may not be secured by a lien on all or any part of the Mortgaged Property or related Personalty.

(ix)

When delivered to Lender, it must be accompanied by an opinion acceptable to Lender in Lender’s Discretion issued by counsel to the Issuer that includes opinions as to Issuer’s power and authority to issue the Letter of Credit and the enforceability of the Letter of Credit against Issuer and an updated nonconsolidation opinion with regard to any such Letter of Credit in form and substance satisfactory to Lender.

(b)

If at any time the Issuer of a Letter of Credit held by Lender ceases to be an Eligible Institution, Lender will have the right to immediately draw down the Letter of Credit in full and hold the Proceeds in an escrow account in accordance with the terms of this Loan Agreement.

(c)

Each Letter of Credit held by Lender pursuant to this Loan Agreement provides additional collateral for the Indebtedness in addition to the lien of the Security Instrument.

11.16

Reserved.

11.17

Reserved.

11.18

Reserved.

11.19

State Specific Provisions. Reserved.

11.20

Time is of the Essence. Time is of the essence with respect to each covenant of this Loan Agreement.

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ARTICLE XII

DEFINITIONS.

The following terms, when used in this Loan Agreement (including when used in the recitals), will have the following meanings:

“Affiliate” of any Person means:

(i)

Any other individual or entity that is, directly or indirectly, one of the following:

(A)

In Control of the applicable Person.

(B)

Under the Control of the applicable Person.

(C)

Under common Control with the applicable Person.

(ii)

Any individual that is a director or officer of the applicable Person.

(iii)

Any individual that is a director or officer of any entity described in clause (i) of this definition.

“ Approved Seller/Servicer ” is defined in Section 11.11(b).

“ Assignment of Management Agreement ” means the Assignment of Management Agreement and Subordination of Management Fees, dated the same date as this Loan Agreement, among Borrower, Lender and Property Manager, including all schedules, riders, allonges and addenda, as such Assignment of Management Agreement may be amended from time to time, and any future Assignment of Management Agreement and Subordination of Management Fees executed in accordance with Section 6.09(d).

“ Attorneys’ Fees and Costs ” means: (i) fees and out of pocket costs of Lender’s and Loan Servicer’s attorneys, as applicable, including costs of Lender’s and Loan Servicer’s in-house counsel, support staff costs, costs of preparing for litigation, computerized research, telephone and facsimile transmission expenses, mileage, deposition costs, postage, duplicating, process service, videotaping and similar costs and expenses; (ii) costs and fees of expert witnesses, including appraisers; (iii) investigatory fees; and (iv) costs for any opinion required by Lender pursuant to the terms of the Loan Documents.

“ Bankruptcy Code ” means the United States Bankruptcy Code, 11 U.S.C. Section 101 et seq., as amended from time to time.

“ Borrower ” means all Persons identified as “Borrower” in the first paragraph of this Loan Agreement, together with their successors and assigns.

“ Borrower Information ” is defined in Section 10.02(d).

“ Borrower Principal ” means any of the following:

(i)

Any general partner of Borrower (if Borrower is a partnership).

(ii)

Any manager or managing member of Borrower (if Borrower is a limited liability company).

(iii)

Any Person (limited partner, member or shareholder) with a collective direct or indirect equity interest in Borrower equal to or greater than 25%.

(iv)

Any Guarantor of all or any portion of the Loan or of any obligations of Borrower under the Loan Documents.

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“ Borrower Proof of Loss Threshold ” means $200,000.00.

“ Borrower Proof of Loss Maximum ” means $800,000.00.

“ Business Day ” means any day other than a Saturday, a Sunday, or any other day on which Lender or the national banking associations are not open for business.

“ Cap Agreement ” means any interest rate cap agreement, interest rate swap agreement or other interest rate-hedging contract or agreement, in a form acceptable to Lender, obtained by Borrower from a Cap Provider as a requirement of any Loan Document or as a condition of Lender’s making the Loan.

“ Cap Collateral ” means all of the following:

(i)

The Cap Agreement.

(ii)

The Cap Payments.

(iii)

All rights of Borrower under any Cap Agreement and all rights of Borrower to all Cap Payments, including contract rights and general intangibles, whether existing now or arising after the date of this Loan Agreement.

(iv)

All rights, liens and security interests or guaranties granted by a Cap Provider or any other Person to secure or guaranty payment of any Cap Payments whether existing now or granted after the date of this Loan Agreement.

(v)

All documents, writings, books, files, records and other documents arising from or relating to any of the foregoing, whether existing now or created after the date of this Loan Agreement.

(vi)

All cash and non-cash proceeds and products of (ii) through (v) of this definition.

“ Cap Payment(s) ” means any and all monies payable pursuant to any Cap Agreement by a Cap Provider.

“ Cap Provider” means the third-party financial institution approved by Lender that is the counterparty under any Cap Agreement or Replacement Cap Agreement.

“ Capital Replacement ” means the replacement of those items listed on Exhibit F .

“ Capped Interest Rate ” is defined in the Note, if applicable.

“ Claim ” is defined in Section 10.02(f).

“ Clean Site Assessment ” is defined in Section 7.05(b)(i).

“ Closing Date ” means the date on which Lender disburses the proceeds of the Loan to or for the account of Borrower.

“ Commitment Letter ” means the fully executed commitment letter or early rate lock application between Lender and Borrower issued in connection with the Loan, as such document may have been modified, amended or extended.

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“ Completion Date ” means, with respect to any Repair, the date specified for that Repair in the Repair Schedule of Work (Exhibit C), as such date may be extended by Lender in writing.

“ Condemnation ” is defined in Section 6.11(a).

“ Control ” means to possess, directly or indirectly, the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, including the power to elect a majority of the directors or trustees of a corporation or trust, as the case may be.

“ Corporate Lease ” means a Lease for one or more residential units under which one entity will rent all such units from Borrower and will have the right to sublease such units to individual subtenants.

“ Cut-off Date ” is defined in the Note, if applicable.

“ Default Rate ” is defined in the Note.

“ Defeasance ” is defined in Section 11.12.

“ Defeasance Closing Date ” is defined in Section 11.12(b).

“ Defeasance Collateral ” means: (i) a Freddie Mac Debt Security, (ii) a Fannie Mae Debt Security, (iii) U.S. Treasury Obligations, or (iv) FHLB Obligations.

“ Defeasance Fee ” is defined in Section 11.12(c).

“ Defeasance Notice ” is defined in Section 11.12(b).

“ Defeasance Period ” is defined in the Note, if applicable.

“ Designated Entity for Transfers ” means each entity so identified in Exhibit I , and that entity’s successors and permitted assigns.

“ Disclosure Document ” is defined in Section 11.08.

“ Economic Sanctions Laws ” means the foreign assets control regulations, 31 C.F.R. Chapter V, as amended, and any amending legislation or executive order relating to such legislation, as administered by OFAC.

“ Eligible Account ” means an identifiable account which is separate from all other funds held by the holding institution that is either (i) an account or accounts maintained with the corporate trust department of a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution, or (ii) a segregated trust account or accounts maintained with the corporate trust department of a federal or state chartered depository institution or trust company acting in its fiduciary capacity which, in the case of a state chartered depository institution or trust company is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal and state authority. An Eligible Account will not be evidenced by a certificate of deposit, passbook or other instrument.

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“ Eligible Institution ” means a federal or state chartered depository institution or trust company insured by the Federal Deposit Insurance Corporation, the short term unsecured debt obligations or commercial paper of which are rated at least A-1 by Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., P-1 by Moody’s Investors Service, Inc. and F-3 by Fitch, Inc. in the case of accounts in which funds are held for 30 days or less or, in the case of letters of credit or accounts in which funds are held for more than 30 days, the long term unsecured debt obligations of which are rated at least “A” by Fitch, Inc. and Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., and “A2” by Moody’s Investors Service, Inc. If at any time an Eligible Institution does not meet the required rating, the Loan Servicer must move the Eligible Account within 30 days of such event to an appropriately rated Eligible Institution.

“ Environmental Inspections ” is defined in Section 6.12(e).

“ Environmental Permit ” means any permit, license, or other authorization issued under any Hazardous Materials Law with respect to any activities or businesses conducted on or in relation to the Mortgaged Property.

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended.

“ Event of Default ” means the occurrence of any event listed in Section 9.01.

“Extension Period” is defined in the Note, if applicable.

“ Fannie Mae Debt Security ” means any non-callable bond, debenture, note, or other similar debt obligation issued by the Federal National Mortgage Association.

“ FHLB Obligations ” mean direct, non-callable and non-redeemable securities issued, or fully insured as to payment, by the Federal Home Loan Bank.

“ Fixtures ” means all property owned by Borrower which is attached to the Land or the Improvements so as to constitute a fixture under applicable law, including: machinery, equipment, engines, boilers, incinerators and installed building materials; systems and equipment for the purpose of supplying or distributing heating, cooling, electricity, gas, water, air or light; antennas, cable, wiring and conduits used in connection with radio, television, security, fire prevention or fire detection or otherwise used to carry electronic signals; telephone systems and equipment; elevators and related machinery and equipment; fire detection, prevention and extinguishing systems and apparatus; security and access control systems and apparatus; plumbing systems; water heaters, ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances; light fixtures, awnings, storm windows and storm doors; pictures, screens, blinds, shades, curtains and curtain rods; mirrors; cabinets, paneling, rugs and floor and wall coverings; fences, trees and plants; swimming pools; and exercise equipment.

“ Freddie Mac ” means the Federal Home Loan Mortgage Corporation.

“ Freddie Mac Debt Security ” means any non-callable bond, debenture, note, or other similar debt obligation issued by Freddie Mac.

“ Freddie Mac Web Site ” means the web site of Freddie Mac, located at www.freddiemac.com.

“ GAAP ” means generally accepted accounting principles.

“ Governmental Authority ” means any board, commission, department, agency or body of any municipal, county, state or federal governmental unit, or any subdivision of any of them, that has or acquires jurisdiction over the Mortgaged Property, or the use, operation or improvement of the Mortgaged Property, or over Borrower.

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“ Guarantor ” means the Person(s) required by Lender to guaranty all or a portion of Borrower’s obligations under the Loan Documents, as set forth in the Guaranty. The required Guarantors as of the date of this Loan Agreement are set forth in Exhibit I .

“ Guaranty ” means the Guaranty executed by Guarantor and/or any replacement or supplemental guaranty executed pursuant to the terms of this Loan Agreement.

“ Hazardous Materials ” means petroleum and petroleum products and compounds containing them, including gasoline, diesel fuel and oil; explosives; flammable materials; radioactive materials; polychlorinated biphenyls (PCBs) and compounds containing them; lead and lead-based paint; asbestos or asbestos containing materials in any form that is or could become friable; underground or above-ground storage tanks, whether empty or containing any substance; any substance the presence of which on the Mortgaged Property is prohibited by any Governmental Authority; any substance that requires special handling and any other material or substance now or in the future that (i) is defined as a “hazardous substance,” “hazardous material,” “hazardous waste,” “toxic substance,” “toxic pollutant,” “contaminant,” or “pollutant” by or within the meaning of any Hazardous Materials Law, or (ii) is regulated in any way by or within the meaning of any Hazardous Materials Law.

“ Hazardous Materials Law ” and “ Hazardous Materials Laws ” means any and all federal, state and local laws, ordinances, regulations and standards, rules, policies and other governmental requirements, administrative rulings and court judgments and decrees in effect now or in the future, including all amendments, that relate to Hazardous Materials or the protection of human health or the environment and apply to Borrower or to the Mortgaged Property. Hazardous Materials Laws include the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601, et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901, et seq., the Toxic Substance Control Act, 15 U.S.C. Section 2601, et seq., the Clean Water Act, 33 U.S.C. Section 1251, et seq., and the Hazardous Materials Transportation Act, 49 U.S.C. Section 5101 et seq., and their state analogs.

“ HVAC System ” is defined in Section 6.10(a)(v).

“ Immediate Family Members ” means a Person’s spouse, parent, child (including stepchild), grandchild (including step-grandchild) or sibling.

“ Imposition Reserve Deposits ” is defined in Section 4.02(a).

“ Impositions ” is defined in Section 4.02(a).

“ Improvements ” means the buildings, structures and improvements now constructed or at any time in the future constructed or placed upon the Land, including any future alterations, replacements and additions.

“ Indebtedness ” means the principal of, interest at the fixed or variable rate set forth in the Note on, and all other amounts due at any time under, the Note, this Loan Agreement or any other Loan Document, including prepayment premiums, late charges, default interest, and advances as provided in Section 9.02 to protect the security of the Security Instrument.

“ Indemnified Party/ies ” is defined in Section 10.02(d).

“ Indemnitees ” is defined in Section 10.02(a).

“Installment Due Date” is defined in the Note.

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“ Insurance ” means Property Insurance, liability insurance and all other insurance that Lender requires Borrower to maintain pursuant to this Loan Agreement.

“ Intercreditor Agreement ” is defined in Section 11.11(b).

“ Investor Interest Transfer ” is defined in Section 7.03(d)(vi).

“ Investor Interests ” is defined in Section 7.03(d)(vi).

“Issuer” means the issuer of any Letter of Credit.

“ Issuer Group ” is defined in Section 10.02(d).

“ Issuer Person ” is defined in Section 10.02(d).

“ Land ” means the land described in Exhibit A .

“ Leases ” means all present and future leases, subleases, licenses, concessions or grants or other possessory interests now or hereafter in force, whether oral or written, covering or affecting the Mortgaged Property, or any portion of the Mortgaged Property (including proprietary leases or occupancy agreements if Borrower is a cooperative housing corporation), and all modifications, extensions or renewals.

“ Lender ” means the entity identified as “Lender” in the first paragraph of this Loan Agreement, or any subsequent holder of the Note.

“ Lender’s Discretion ” means Lender’s reasonable discretion unless otherwise set forth in this Loan Agreement.

“ Letter of Credit ” means any letter of credit required under the terms of this Loan Agreement or any other Loan Document.

“ LIBOR Index Rate ” is defined in the Note, if applicable.

“ Lien ” means any mortgage, deed of trust, deed to secure debt, security interest or other lien or encumbrance on the Mortgaged Property.

“ Loan ” is defined on Page 1 of this Loan Agreement.

“ Loan Agreement ” means this Multifamily Loan and Security Agreement.

“ Loan Application ” is defined in Section 5.16(a).

“ Loan Documents ” means the Note, the Security Instrument, this Loan Agreement, all guaranties, all indemnity agreements, all collateral agreements, UCC filings, O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any Guarantor or any other Person in connection with the Loan evidenced by the Note, as such documents may be amended from time to time.

“ Loan Servicer ” means the entity that from time to time is designated by Lender to collect payments and deposits and receive Notices under the Note, the Security Instrument, this Loan Agreement and any other Loan Document, and otherwise to service the Loan evidenced by the Note for the benefit of Lender.

“ Lockout Period, ” if applicable, is defined in the Note.

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“ Major Building System” means one that is integral to the Improvements, providing basic services to the tenants and other occupants of the Improvements including:

Electrical (electrical lines or power upgrades, excluding fixture replacement).

HVAC (central and unit systems, excluding replacement of in kind unit systems).

Plumbing (supply and waste lines, excluding fixture replacement).

Structural (foundation, framing, and all building support elements).

“ Manager ” or “ Managers ” means a Person who is named or designated as a manager or managing member or otherwise acts in the capacity of a manager or managing member of a limited liability company in a limited liability company agreement or similar instrument under which the limited liability company is formed or operated.

“ Margin ” is defined in the Note, if applicable.

“ Material Adverse Effect ” means a significant detrimental effect on: (i) the Mortgaged Property, (ii) the business, prospects, profits, operations or condition (financial or otherwise) of Borrower, (iii) the enforceability, validity, perfection or priority of the Lien of any Loan Document, or (iv) the ability of Borrower to perform any obligations under any Loan Document.

“ Maturity Date ” means the Scheduled Maturity Date, as defined in the Note.

“ Maximum Combined LTV ” means 70%.

“ Membership Interests ” is defined in Section 5.24.

“ Membership Interests Seller ” is defined in Section 5.24.

“ Minimum DSCR ” means, with respect to a Supplemental Loan, (i) if the Senior Indebtedness bears interest at a fixed rate, 1.25:1, or (ii) if the Senior Indebtedness bears interest at a floating rate, 1.10:1.

“ Minimum Occupancy ” means 85% of units at the Mortgaged Property with leases that comply with Section 5.11, Section 6.09(e)(v)(E), and Section 6.15.

“ MMP ” means a moisture management plan to control water intrusion and prevent the development of Mold or moisture at the Mortgaged Property throughout the term of this Loan Agreement.

“ Modified Non-Residential Lease ” means an extension or modification of any Non-Residential Lease, which Non-Residential Lease was in existence as of the date of this Loan Agreement.

“ Mold ” means mold, fungus, microbial contamination or pathogenic organisms.

“ Mortgaged Property ” means all of Borrower’s present and future right, title and interest in and to all of the following:

(i)

The Land, or, if Borrower’s interest in the Land is pursuant to a Ground Lease, the Ground Lease and the Leasehold Estate.

(ii)

The Improvements.

(iii)

The Fixtures.

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(iv)

The Personalty.

(v)

All current and future rights, including air rights, development rights, zoning rights and other similar rights or interests, easements, tenements, rights of way, strips and gores of land, streets, alleys, roads, sewer rights, waters, watercourses and appurtenances related to or benefiting the Land or the Improvements, or both, and all rights-of-way, streets, alleys and roads which may have been or may in the future be vacated.

(vi)

All proceeds paid or to be paid by any insurer of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, whether or not Borrower obtained the Insurance pursuant to Lender’s requirement.

(vii)

All awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Land or the Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, including any awards or settlements resulting from Condemnation proceedings or the total or partial taking of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property under the power of eminent domain or otherwise and including any conveyance in lieu thereof.

(viii)

All contracts, options and other agreements for the sale of the Land, or the Leasehold Estate, as applicable, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property entered into by Borrower now or in the future, including cash or securities deposited to secure performance by parties of their obligations.

(ix)

All proceeds from the conversion, voluntary or involuntary, of any of the items described in items (i) through (viii) of this definition, into cash or liquidated claims, and the right to collect such proceeds.

(x)

All Rents and Leases.

(xi)

All earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements or any other part of the Mortgaged Property, and all undisbursed proceeds of the Loan.

(xii)

All Imposition Reserve Deposits.

(xiii)

All refunds or rebates of Impositions by any Governmental Authority or insurance company (other than refunds applicable to periods before the real property tax year in which this Loan Agreement is dated).

(xiv)

All tenant security deposits which have not been forfeited by any tenant under any Lease and any bond or other security in lieu of such deposits.

(xv)

All names under or by which any of the Mortgaged Property may be operated or known, and all trademarks, trade names and goodwill relating to any of the Mortgaged Property.

(xvi)

If required by the terms of Section 4.05 or elsewhere in this Loan Agreement, all rights under any Letter of Credit and the Proceeds, as such Proceeds may increase or decrease from time to time.

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(xvii)

If the Note provides for interest to accrue at a floating or variable rate and there is a Cap Agreement, the Cap Collateral.

(xviii)

through (xxv) are Reserved.

“ New Non-Residential Lease ” is any Non-Residential Lease not in existence as of the date of this Loan Agreement.

“ Non-Residential Lease ” is a Lease of a portion of the Mortgaged Property to be used for non-residential purposes.

“ Non-U.S. Equity Holder ” means any Person with a collective equity interest (whether direct or indirect of 10% or more in Borrower, and which is either (a) an individual who is not a citizen of the United States, or (b) an entity formed outside the United States.

“ Note ” means the Multifamily Note (including any Amended and Restated Note, Consolidated, Amended and Restated Note, or Extended and Restated Note) executed by Borrower in favor of Lender and dated as of the date of this Loan Agreement, including all schedules, riders, allonges and addenda, as such Multifamily Note may be amended, modified and/or restated from time to time.

“ Notice ” or “ Notices ” means all notices, demands and other communication required under the Loan Documents, provided in accordance with the requirements of Section 11.03.

“ O&M Program ” is defined in Section 6.12(c) and consists of the following: Asbestos.

“ OFAC ” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.

“ Person ” means any natural person, sole proprietorship, corporation, general partnership, limited partnership, limited liability company, limited liability partnership, limited liability limited partnership, joint venture, association, joint stock company, bank, trust, estate, unincorporated organization, any federal, state, county or municipal government (or any agency or political subdivision thereof), endowment fund or any other form of entity.

“ Personalty ” means all of the following:

(i)

Accounts (including deposit accounts) of Borrower related to the Mortgaged Property.

(ii)

Equipment and inventory owned by Borrower, which are used now or in the future in connection with the ownership, management or operation of the Land or Improvements or are located on the Land or Improvements, including furniture, furnishings, machinery, building materials, goods, supplies, tools, books, records (whether in written or electronic form) and computer equipment (hardware and software).

(iii)

Other tangible personal property owned by Borrower which is used now or in the future in connection with the ownership, management or operation of the Land or Improvements or is located on the Land or in the Improvements, including ranges, stoves, microwave ovens, refrigerators, dishwashers, garbage disposers, washers, dryers and other appliances (other than Fixtures).

(iv)

Any operating agreements relating to the Land or the Improvements.

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(v)

Any surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements.

(vi)

All other intangible property, general intangibles and rights relating to the operation of, or used in connection with, the Land or the Improvements, including all governmental permits relating to any activities on the Land and including subsidy or similar payments received from any sources, including a Governmental Authority.

(vii)

Any rights of Borrower in or under any Letter of Credit.

“ Pledge Agreement ” is defined in Section 11.12(f)(iii).

“ Preapproved Intrafamily Transfer ” is defined in Section 7.04.

“ Prepayment Premium Period ” is defined in the Note.

“ Prior Lien ” means a pre-existing mortgage, deed of trust or other Lien encumbering the Mortgaged Property.

“ Proceeding ” means, whether voluntary or involuntary, any case, proceeding or other action against Borrower or any SPE Equity Owner under any existing or future law of any jurisdiction relating to bankruptcy, insolvency, reorganization or relief of debtors.

“ Proceeds ” means the cash obtained by a draw on a Letter of Credit.

“ Prohibited Activity or Condition ” means each of the following:

(i)

The presence, use, generation, release, treatment, processing, storage (including storage in above-ground and underground storage tanks), handling or disposal of any Hazardous Materials on or under the Mortgaged Property.

(ii)

The transportation of any Hazardous Materials to, from or across the Mortgaged Property.

(iii)

Any occurrence or condition on the Mortgaged Property, which occurrence or condition is or may be in violation of Hazardous Materials Laws.

(iv)

Any violation of or noncompliance with the terms of any Environmental Permit with respect to the Mortgaged Property.

(v)

Any violation or noncompliance with the terms of any O&M Program.

However, the term “Prohibited Activity or Condition” expressly excludes lawful conditions permitted by an O&M Program or the safe and lawful use and storage of quantities of: (i) pre-packaged supplies, cleaning materials and petroleum products customarily used in the operation and maintenance of comparable multifamily properties, (ii) cleaning materials, personal grooming items and other items sold in pre-packaged containers for consumer use and used by tenants and occupants of residential dwelling units in the Mortgaged Property, and (iii) petroleum products used in the operation and maintenance of motor vehicles from time to time located on the Mortgaged Property’s parking areas, so long as all of the foregoing are used, stored, handled, transported and disposed of in compliance with Hazardous Materials Laws.

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“ Prohibited Parties List ” means any one or more of the following:

(i)

The OFAC Specially Designated Nationals and Blocked Persons List.

(ii)

The OFAC Consolidated Sanctions List.

(iii)

The list of individuals and entities prohibited from doing business with the Department of Housing and Urban Development.

“ Property Improvement Alterations ” means alterations and additions to the Improvements existing at or upon the Mortgaged Property as of the date of this Loan Agreement, which are being made to renovate or upgrade the Mortgaged Property and are not otherwise permitted under Section 6.09(e). Repairs, Capital Replacements, Restoration or other work required to be performed at the Mortgaged Property pursuant to Sections 6.10 or 6.11 will not constitute Property Improvement Alterations.

“ Property Improvement Notice ” means a Notice to Lender that Borrower intends to begin the Property Improvement Alterations identified in the Property Improvement Notice.

“Property Improvement Total Amount” means the aggregate of $10,000,000.00 during the term of the Mortgage.

“ Property Insurance ” is defined in Section 6.10(a).

“ Property Jurisdiction ” means the jurisdiction in which the Land is located.

“ Property Manager ” means Carroll Management Group, LLC, a Georgia limited liability company, or another residential rental property manager which is approved by Lender in writing.

“ Property Seller ” is defined in Section 5.24.

“ Public Fund/REIT Securities ” is defined in Section 7.03(c).

“ Rate Cap Agreement Reserve Fund ” means the account established pursuant to Section 4.07, if applicable, to pay for the cost of a Replacement Cap Agreement.

“ Rating Agencies ” means Fitch, Inc., Moody’s Investors Service, Inc., or Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor entity of the foregoing, or any other nationally recognized statistical rating organization.

“ Release Instruments ” is defined in Section 11.12(f).

“ Remedial Work ” is defined in Section 6.12(f).

“ Rent(s) ” means all rents (whether from residential or non-residential space), revenues and other income of the Land or the Improvements, parking fees, laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged Property, whether now due, past due or to become due, and deposits forfeited by tenants, and, if Borrower is a cooperative housing corporation or association, maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy agreements, whether now due, past due or to become due.

“ Rent Schedule ” means a written schedule for the Mortgaged Property showing the name of each tenant, and for each tenant, the space occupied, the lease expiration date, the rent payable for the current month, the date through which rent has been paid, and any related information requested by Lender.

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“ Repairs ” means the repairs to be made to the Mortgaged Property, as described on the Repair Schedule of Work (Exhibit C) or as otherwise required by Lender in accordance with this Loan Agreement.

“ Replacement Cap Agreement ” means any Cap Agreement satisfying the provisions of this Loan Agreement, using documentation approved by Lender, and purchased by Borrower to replace any initial Cap Agreement or subsequent Cap Agreement.

“ Replacement Cost ” means the estimated replacement cost of the Improvements, Fixtures, and Personalty (or, when used in reference to a property that is not the Mortgaged Property, all improvements, fixtures, and personalty located on such property), excluding any deduction for depreciation, all as determined annually by Borrower using customary methodology and sources of information acceptable to Lender in Lender’s Discretion. Replacement Cost will not include the cost to reconstruct foundations or site improvements, such as driveways, parking lots, sidewalks, and landscaping.

“ Reserve Fund ” means each account established for Imposition Reserve Deposits, the Replacement Reserve Fund, the Repair Reserve Fund (if any), the Rate Cap Agreement Reserve Fund (if any), the Rental Achievement Reserve Fund (if any), and any other account established pursuant to Article IV of this Loan Agreement.

“ Restoration ” is defined in Section 6.10(j)(i).

“ Scheduled Debt Payments ” is defined in Section 11.12(g)(i)(B).

“ Secondary Market Transaction” means: (i) any sale or assignment of this Loan Agreement, the Note and the other Loan Documents to one or more investors as a whole loan, (ii) a participation of the Loan to one or more investors, (iii) any deposit of this Loan Agreement, the Note and the other Loan Documents with a trust or other entity which may sell certificates or other instruments to investors evidencing an ownership interest in the assets of such trust or other entity, or (iv) any other sale, assignment or transfer of the Loan or any interest in the Loan to one or more investors.

“ Securitization ” means when the Note or any portion of the Note is assigned to a REMIC or grantor trust.

“Securitization Indemnification” is defined in Section 10.02(d).

“ Security Instrument ” means the mortgage, deed of trust, deed to secure debt or other similar security instrument encumbering the Mortgaged Property and securing Borrower’s performance of its Loan obligations, including Borrower’s obligations under the Note and this Loan Agreement (including any Amended and Restated Security Instrument, Consolidation, Modification and Extension Agreement, Extension and Modification Agreement or similar agreement or instrument amending and restating existing security instruments).

“ Senior Indebtedness ” means, for a Supplemental Loan, if any, the Indebtedness evidenced by each Senior Note and secured by each Senior Instrument for the benefit of each Senior Lender.

“ Senior Instrument ” – Not applicable.

“ Senior Lender ” means each holder of a Senior Note.

“ Senior Loan Documents ” means, for a Supplemental Loan, if any, all documents relating to each loan evidenced by a Senior Note.

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“ Senior Note ” means, for a Supplemental Loan, if any, each Multifamily Note secured by a Senior Instrument.

“ Servicing Arrangement ” is defined in Section 11.06(b).

“ Single Purpose Entity ” is defined in Section 6.13(a).

“ Site Assessment ” means an environmental assessment report for the Mortgaged Property prepared at Borrower’s expense by a qualified environmental consultant engaged by Borrower, or by Lender on behalf of Borrower, and approved by Lender, and in a manner reasonably satisfactory to Lender, based upon an investigation relating to and making appropriate inquiries to evaluate the risks associated with Mold and any existence of Hazardous Materials on or about the Mortgaged Property, and the past or present discharge, disposal, release or escape of any such substances, all consistent with the most current version of the ASTM 1527 standard (or any successor standard published by ASTM) and good customary and commercial practice.

“ SPE Equity Owner ” is not applicable. Borrower will not be required to maintain an SPE Equity Owner in its organizational structure during the term of the Loan and all references to SPE Equity Owner in this Loan Agreement and in the Note will be of no force or effect .

“ Successor Borrower ” is defined in Section 11.12(b).

“ Supplemental Indebtedness ” the Indebtedness evidenced by the Supplemental Note(s) and secured by the Supplemental Instrument(s) for the benefit of Supplemental Lender(s), if any.

“ Supplemental Instrument ” means, for each Supplemental Loan (whether one or more), if any, the Security Instrument executed to secure the Supplemental Note for that Supplemental Loan.

“ Supplemental Lender ” means, for each Supplemental Loan (whether one or more), if any, the lender named in the Supplemental Instrument for that Supplemental Loan and its successors and/or assigns.

“ Supplemental Loan ” means any loan that is subordinate to the Senior Indebtedness.

“ Supplemental Loan Documents ” means, for each Supplemental Loan (whether one or more), if any, all documents relating to the loan evidenced by the Supplemental Note for that Supplemental Loan.

“ Supplemental Mortgage Product ” is defined in Section 11.11(a).

“ Supplemental Note ” means, for each Supplemental Loan (whether one or more), if any, the Multifamily Note secured by the Supplemental Instrument for that Supplemental Loan.

“ Tax Code ” means the Internal Revenue Code of the United States, 26 U.S.C. Section 1 et seq., as amended from time to time.

“ Taxes ” means all taxes, assessments, vault rentals and other charges, if any, whether general, special or otherwise, including all assessments for schools, public betterments and general or local improvements, which are levied, assessed or imposed by any public authority or quasi-public authority, and which, if not paid, will become a Lien on the Land or the Improvements.

“Total Insurable Value” means the sum of the Replacement Cost, business income/rental value Insurance and the value of any business personal property.

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“ Transfer ” means any of the following:

(i)

A sale, assignment, transfer or other disposition or divestment of any interest in Borrower, a Designated Entity for Transfers, or the Mortgaged Property (whether voluntary, involuntary or by operation of law).

(ii)

The granting, creating or attachment of a Lien, encumbrance or security interest (whether voluntary, involuntary or by operation of law).

(iii)

The issuance or other creation of an ownership interest in a legal entity, including a partnership interest, interest in a limited liability company or corporate stock.

(iv)

The withdrawal, retirement, removal or involuntary resignation of a partner in a partnership or a member or Manager in a limited liability company.

(v)

The merger, dissolution, liquidation, or consolidation of a legal entity or the reconstitution of one type of legal entity into another type of legal entity.

(vi)

A change of the Guarantor.

For purposes of defining the term “Transfer,” the term “partnership” means a general partnership, a limited partnership, a joint venture, a limited liability partnership, or a limited liability limited partnership and the term “partner” means a general partner, a limited partner, or a joint venturer.

“Transfer” does not include any of the following:

(i)

A conveyance of the Mortgaged Property at a judicial or non-judicial foreclosure sale under the Security Instrument.

(ii)

The Mortgaged Property becoming part of a bankruptcy estate by operation of law under the Bankruptcy Code.

(iii)

The filing or recording of a Lien against the Mortgaged Property for local taxes and/or assessments not then due and payable.

“ Transfer and Assumption Agreement ” is defined in Section 11.12(f)(iv).

“ Transfer Fee ” means a fee paid when the Transfer is completed. Unless otherwise specified, the Transfer Fee will be equal to the lesser of the following:

(i)

1% of the outstanding principal balance of the Indebtedness as of the date of the Transfer.

(ii)

$250,000.

“ Transfer Processing Fee ” means a nonrefundable fee of $15,000 for Lender’s review of a proposed or completed Transfer.

“ U.S. Treasury Obligations ” means direct, non-callable and non-redeemable securities issued, or fully insured as to payment, by the United States of America.

“ UCC Collateral ” is defined in Section 3.03.

“ Underwriter Group ” is defined in Section 10.02(d).

“ Uniform Commercial Code ” means the Uniform Commercial Code as promulgated in the applicable jurisdiction.

“ Windstorm Coverage ” is defined in Section 6.10(a)(iv).

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ARTICLE XIII

INCORPORATION OF ATTACHED RIDERS.

The Riders listed on Page ii are attached to and incorporated into this Loan Agreement.

ARTICLE XIV

INCORPORATION OF ATTACHED EXHIBITS.

The following Exhibits, if marked with an “X” in the space provided, are attached to this Loan Agreement:

x	Exhibit A	Description of the Land (required)

x	Exhibit B	Modifications to Multifamily Loan and Security Agreement

x	Exhibit C	Repair Schedule of Work

x	Exhibit D	Repair Disbursement Request (required)

x	Exhibit E	Work Commenced at Mortgaged Property

x	Exhibit F	Capital Replacements (required)

x	Exhibit G	Description of Ground Lease

x	Exhibit H	Organizational Chart of Borrower as of the Closing Date (required)

x	Exhibit I	Designated Entities for Transfers and Guarantor(s) (required)

x	Exhibit J	Description of Release Parcel

¨	Exhibit K	Reserved

¨	Exhibit L	Reserved

¨	Exhibit M	Reserved

¨	Exhibit N	Reserved

x	Exhibit O	Borrower’s Certificate of Property Improvement Alterations Completion (required)

ARTICLE XV

RESERVED.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK;
SIGNATURES ON FOLLOWING PAGES

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	BORROWER:

	BR CARROLL GLENRIDGE, LLC , a Delaware limited liability company

	By:	/s/ Jordan Ruddy
		Jordan Ruddy
		Authorized Signatory

SIGNATURES CONTINUE ON FOLLOWING PAGE

Multifamily Loan and Security Agreement

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	LENDER:

	KEYBANK NATIONAL ASSOCIATION , a national banking association

	By:	/s/ Tonya E. Barnes
		Tonya E. Barnes
		Vice President

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

REPAIR RESERVE FUND

(Revised 7-12-2016)

The following changes are made to the Loan Agreement which precedes this Rider:

Section 4.03 is deleted and replaced with the following:

4.03

Repair Reserve Fund.

(a)

Deposits to Repair Reserve Fund . Lender and Borrower acknowledge that Borrower has established the Repair Reserve Fund by depositing the Repair Reserve Deposit with Lender on the date of this Loan Agreement, and that Borrower must complete the Repairs required pursuant to Section 6.14.

(b)

Costs Charged by Lender .

(i)

If Lender, in Lender’s Discretion, retains a professional inspection engineer or other qualified third party to inspect any Repairs pursuant to the terms of Section 6.06, Lender may charge Borrower an amount sufficient to pay all reasonable costs and expenses charged by such third party inspector.

(ii)

Lender will be entitled, but not obligated, to deduct from the Repair Reserve Fund the costs and expenses set forth in Section 4.03(b)(i). Lender will be entitled to charge Borrower for such costs and expenses and Borrower will pay the amount of such item(s) to Lender immediately after Notice from Lender to Borrower of such charge(s).

(iii)

If there are insufficient funds to pay for the costs and expenses set forth in Section 4.03(b)(i), then Lender will be entitled to charge Borrower for the costs and expenses specified in Section 4.03(b)(i), and Borrower will pay the amount of such item(s) to Lender immediately after Notice from Lender to Borrower of such charge(s).

(c)

Insufficient Amount in Repair Reserve Fund . If Lender determines, in Lender’s Discretion that the money in the Repair Reserve Fund is insufficient to pay for the Repairs, Lender will provide Borrower with Notice of such insufficiency, and as soon as possible (but in no event later than 20 days after such Notice) Borrower will pay to Lender an amount, in cash, equal to such deficiency, which Lender will deposit in the Repair Reserve Fund.

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(d)

Disbursements of Repair Reserve Fund .

(i)

Disbursement . From time to time, as construction and completion of the Repairs progresses, upon Borrower’s submission of a Repair Disbursement Request in the form attached to this Loan Agreement as Exhibit D , and provided that no Event of Default has occurred and no condition exists which but for the passage of time or giving of Notice, or both, would constitute an Event of Default, Lender will make disbursements from the Repair Reserve Fund for payment or reimbursement of the actual costs of the Repairs. In connection with each disbursement, Borrower will take each of the following actions:

(A)

Sign Borrower’s Repair Disbursement Request.

(B)

Include with each Repair Disbursement Request a report setting out the progress of the Repairs and any other reports or information relating to the construction of the Repairs that may be reasonably requested by Lender.

(C)

Include with each Repair Disbursement Request copies of any applicable invoices and/or bills and appropriate lien waivers for the prior period for which disbursement was made, executed by all contractors and suppliers supplying labor or materials for the Repairs.

(D)

Include with each Repair Disbursement Request, a report prepared by the professional engineer employed by Lender as to the status of the Repairs, unless Lender has waived this requirement in writing.

(E)

Include with each Repair Disbursement Request, Borrower’s written representation and warranty that the Repairs as completed to the applicable stage do not violate any laws, ordinances, rules or regulations, or building setback lines or restrictions, applicable to the Mortgaged Property.

Except for the final Repair Disbursement Request, no Repair Disbursement Request may be for an amount less than the Minimum Repair Disbursement Request Amount.

(ii)

Conditions Precedent . Lender will not be obligated to make any disbursement from the Repair Reserve Fund to or for the benefit of Borrower unless at the time of such Repair Disbursement Request all of the following conditions exist:

(A)

There exists no condition, event or act that would constitute a default (with or without Notice and/or lapse of time) under this Loan Agreement or any other Loan Document.

(B)

Borrower is in full compliance with the provisions of this Loan Agreement, the other Loan Documents and any request or demand by Lender permitted by this Loan Agreement.

(C)

No lien or claim based on furnishing labor or materials has been recorded, filed or asserted against the Mortgaged Property, unless Borrower has properly provided bond or other security against loss in accordance with applicable law.

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(D)

All licenses, permits, and approvals of any Governmental Authority required for the Repairs as completed to the applicable stage have been obtained and submitted to Lender upon Lender’s request.

(iii)

Reporting Requirements; Completion . Prior to the applicable Completion Date, Borrower will deliver to Lender, in addition to the information required by Section 4.03(d)(i) above, all of the following:

(A)

Contractor’s Certificate . If required by Lender, a certificate signed by each major contractor and supplier of materials, as reasonably determined by Lender, engaged to provide labor or materials for the Repairs to the effect that such contractor or supplier has been paid in full for all work completed and that the portion of the Repairs provided by such contractor or supplier has been fully completed in accordance with the plans and specifications (if any) provided to it by Borrower and that such portion of the Repairs is in compliance with all applicable building codes and other rules and regulations promulgated by any applicable regulatory authority or Governmental Authority.

(B)

Borrower’s Certificate . A certificate signed by Borrower to the effect that the Repairs have been fully paid for and that all money disbursed from the Repair Reserve Fund has been used for the Repairs and no claim exists against Borrower or against the Mortgaged Property out of which a lien based on furnishing labor or material exists or might ripen. Borrower may except from the certificate described in the preceding sentence any claim(s) that Borrower intends to contest, provided that any such claim is described in Borrower’s certificate and Borrower certifies to Lender that the money in the Repair Reserve Fund is sufficient to make payment of the full amount which might in any event be payable in order to satisfy such claim(s). If required by Lender, Borrower also must certify to Lender that the Repairs are in compliance with all applicable building codes and zoning ordinances.

(C)

Engineer’s Certificate . If required by Lender, a certificate signed by the professional engineer employed by Lender to the effect that the Repairs have been completed in a good and workmanlike manner in compliance with the Repair Schedule of Work and all applicable building codes, zoning ordinances and other rules and regulations promulgated by applicable regulatory or Governmental Authorities.

(D)

Other Certificates . Any other certificates of approval, acceptance or compliance required by Lender from any Governmental Authority having jurisdiction over the Mortgaged Property and the Repairs.

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(iv)

Inspection . Prior to and as a condition of the final disbursement of funds from the Repair Reserve Fund, Lender will inspect or will cause the Repairs and Improvements to be inspected in accordance with the terms of Section 6.06(a), to determine whether all interior and exterior Repairs have been completed in a manner acceptable to Lender.

(v)

Indirect and Excess Disbursements from Repair Reserve Fund . Lender, in its sole and absolute discretion, is authorized to hold, use and disburse funds from the Repair Reserve Fund to pay any and all costs, charges and expenses whatsoever and howsoever incurred or required in connection with the construction and completion of the Repairs, or, if an Event of Default has occurred and is continuing, in the payment or performance of any obligation of Borrower to Lender. If Lender, for purposes specified in this Section 4.03, elects to pay any portion of the money in the Repair Reserve Fund to parties other than Borrower, then Lender may do so, at any time and from time to time, and the amount of advances to which Borrower will be entitled under this Loan Agreement will be correspondingly reduced.

(vi)

Repair Schedule of Work . All disbursements from the Repair Reserve Fund will be limited to the costs of those items set forth on the Repair Schedule of Work. Without the prior written consent of Lender, Borrower will not make any payments from the Repair Reserve Fund other than for the costs of those items set forth on the Repair Schedule of Work or alter the Repair Schedule of Work.

(e)

Termination of Repair Reserve Fund . The provisions of this Section 4.03 will cease to be effective upon the completion of the Repairs in accordance with this Loan Agreement to Lender’s satisfaction, and the full disbursement by Lender of the Repair Reserve Fund. If there are funds remaining in the Repair Reserve Fund after the Repairs have been completed in accordance with this Loan Agreement, and provided no Event of Default has occurred and is continuing under this Loan Agreement or under any of the other Loan Documents, and no condition exists which but for the passage of time or giving of Notice, or both, would constitute an Event of Default, such funds remaining in the Repair Reserve Fund will be refunded by Lender to Borrower.

(f)

Right to Complete Repairs . If Borrower abandons or fails to proceed diligently with the Repairs or otherwise, or there exists an Event of Default under this Loan Agreement, Lender will have the right (but not the obligation) to enter upon the Mortgaged Property and take over and cause the completion of the Repairs. Any contracts entered into or indebtedness incurred upon the exercise of such right may be in the name of Borrower, and Lender is irrevocably appointed the attorney in fact of Borrower, such appointment being coupled with an interest, to enter into such contracts, incur such obligations, enforce any contracts or agreements made by or on behalf of Borrower (including the prosecution and defense of all actions and proceedings in connection with the Repairs and the payment, settlement, or compromise of all claims for materials and work performed in connection with the Repairs) and do any and all things necessary or proper to complete the Repairs including signing Borrower’s name to any contracts and documents as may be deemed necessary by Lender. In no event will Lender be required to expend its own funds to complete the Repairs, but Lender may, in Lender’s sole and absolute discretion, advance such funds. Any funds advanced will be added to the Indebtedness, secured by the Security Instrument and payable to Lender by Borrower in accordance with the provisions of the Loan Documents pertaining to the protection of Lender’s security and advances made by Lender. Borrower waives any and all claims it may have against Lender for materials used, work performed or resultant damage to the Mortgaged Property.

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(g)

Completion of Repairs . Lender’s disbursement of monies in the Repair Reserve Fund or other acknowledgment of completion of any Repair in a manner satisfactory to Lender will not be deemed a certification by Lender that the Repair has been completed in accordance with applicable building, zoning or other codes, ordinances, statutes, laws, regulations or requirements of any Governmental Authority. Borrower will at all times have the sole responsibility for insuring that all Repairs are completed in accordance with all such governmental requirements.

The following definitions are added to Article XII:

“ Minimum Repair Disbursement Request Amount ” means $7,500.00.

“ Repair Disbursement Request ” means Borrower’s written requests to Lender in the form attached as Exhibit D for the disbursement of money from the Repair Reserve Fund pursuant to Article IV.

“ Repair Reserve Deposit ” means $975,937.50.

“ Repair Reserve Disbursement Period ” means the interval between disbursements from the Repair Reserve Fund, which interval will be no shorter than once every 90 days during the term of this Loan Agreement.

“ Repair Reserve Fund ” means the account which may be established by this Loan Agreement into which the Repair Reserve Deposit is deposited.

“ Repair Schedule of Work ” means the Repair Schedule of Work attached as Exhibit C .

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

REPLACEMENT RESERVE FUND – IMMEDIATE DEPOSITS

(Revised 7-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

Section 4.04 is deleted and replaced with the following:

4.04

Replacement Reserve Fund.

(a)

Deposits to Replacement Reserve Fund . On the Closing Date, the parties will establish the Replacement Reserve Fund and Borrower will pay the Initial Deposit to Lender for deposit into the Replacement Reserve Fund. Commencing on the date the first installment of principal and/or interest is due under the Note and continuing on the same day of each successive month until the Loan is paid in full, Borrower will pay the Monthly Deposit to Lender for deposit into the Replacement Reserve Fund, together with its regular monthly payments of principal and/or interest as required by the Note. A transfer of funds into the Replacement Reserve Fund from the Repair Reserve Fund, pursuant to the terms of Section 4.03(e), if applicable, will not alter or reduce the amount of any deposits to the Replacement Reserve Fund.

(b)

Costs Charged by Lender .

(i)

If Lender, in Lender’s Discretion, retains a professional inspection engineer or other qualified third party to inspect any Capital Replacements pursuant to the terms of Section 6.06, Lender may charge Borrower an amount sufficient to pay all reasonable costs and expenses charged by such third party inspector.

(ii)

If there are sufficient funds in Replacement Reserve Fund, Lender will be entitled, but not obligated, to deduct from the Replacement Reserve Fund the costs and expenses set forth in Section 4.04(b)(i). Lender will be entitled to charge Borrower for such costs and expenses and Borrower will pay the amount of such item(s) to Lender immediately after Notice from Lender to Borrower of such charge(s).

(iii)

If there are insufficient funds in the Replacement Reserve Fund, then Lender will be entitled to charge Borrower for the costs and expenses specified in Section 4.04(b)(i), and Borrower will pay the amount of such item(s) to Lender immediately after Notice from Lender to Borrower of such charge(s).

(c)

Adjustments to Replacement Reserve Fund . If the initial term of the Loan is greater than 120 months, then the following provisions will apply:

(i)

Lender reserves the right to adjust the amount of the Monthly Deposit based on Lender’s assessment of the physical condition of the Mortgaged Property, however, Lender will not make such an adjustment prior to the date that is 120 months after the first installment due date, nor more frequently than every 10 years thereafter during the term of the Loan.

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(ii)

Borrower will pay the cost of any assessment required by Lender pursuant to Section 4.04(c)(i) to Lender immediately after Notice from Lender to Borrower of such charge.

(iii)

Upon Notice from Lender or Loan Servicer, Borrower will begin paying the Revised Monthly Deposit on the first monthly payment date that is at least 30 days after the date of Lender’s or Loan Servicer’s Notice. If Lender or Loan Servicer does not provide Borrower with Notice of a Revised Monthly Deposit, Borrower will continue to pay the Monthly Deposit or the Revised Monthly Deposit then in effect.

(d)

Insufficient Amount in Replacement Reserve Fund . If Borrower requests disbursement from the Replacement Reserve Fund for a Capital Replacement in accordance with this Loan Agreement in an amount which exceeds the amount on deposit in the Replacement Reserve Fund, Lender will disburse to Borrower only the amount on deposit in the Replacement Reserve Fund. Borrower will pay all additional amounts required in connection with any such Capital Replacement from Borrower’s own funds.

(e)

Reserved.

(f)

Reserved.

(g)

Disbursements from Replacement Reserve Fund .

(i)

Requests for Disbursement . Lender will disburse funds from the Replacement Reserve Fund as follows:

(A)

Borrower’s Request . If Borrower determines, at any time or from time to time, that a Capital Replacement is necessary or desirable, Borrower will perform such Capital Replacement and request from Lender, in writing, reimbursement for such Capital Replacement. Borrower’s request for reimbursement will include (1) a detailed description of the Capital Replacement performed, together with evidence, satisfactory to Lender, that the cost of such Capital Replacement has been paid, and (2) if required by Lender, lien waivers from each contractor and material supplier supplying labor or materials for such Capital Replacement.

(B)

Lender’s Request . If Lender reasonably determines at any time or from time to time, that a Capital Replacement is necessary for the proper maintenance of the Mortgaged Property, it will so notify Borrower, in writing, requesting that Borrower obtain and submit to Lender bids for all labor and materials required in connection with such Capital Replacement. Borrower will submit such bids and a time schedule for completing each Capital Replacement to Lender within 30 days after Borrower’s receipt of Lender’s Notice. Borrower will perform such Capital Replacement and request from Lender, in writing, reimbursement for such Capital Replacement. Borrower’s request for reimbursement will include (1) a detailed description of the Capital Replacement performed, together with evidence, satisfactory to Lender, that the cost of such Capital Replacement has been paid, and (2) if required by Lender, lien waivers from each contractor and material supplier supplying labor or materials for such Capital Replacement.

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(ii)

Conditions Precedent . Disbursement from the Replacement Reserve Fund will be made no more frequently than once every Replacement Reserve Disbursement Period and, except for the final disbursement, no disbursement will be made in an amount less than the Minimum Replacement Disbursement Request Amount. Disbursements will be made only if the following conditions precedent have been satisfied, as determined by Lender in Lender’s Discretion:

(A)

Each Capital Replacement has been performed and/or installed on the Mortgaged Property in a good and workmanlike manner with suitable materials (or in the case of a partial disbursement, performed and/or installed on the Mortgaged Property to an acceptable stage), in accordance with good building practices and all applicable laws, ordinances, rules and regulations, building setback lines and restrictions applicable to the Mortgaged Property, and has been paid for by Borrower as evidenced by copies of all applicable paid invoices or bills submitted to Lender by Borrower at the time Borrower requests disbursement from the Replacement Reserve Fund.

(B)

There is no condition, event or act that would constitute a default (with or without Notice and/or lapse of time).

(C)

No Lien or claim based on furnishing labor or materials has been recorded, filed or asserted against the Mortgaged Property, unless Borrower has properly provided a bond or other security against loss in accordance with applicable law.

(D)

All licenses, permits and approvals of any Governmental Authority required for the Capital Replacement as completed to the applicable stage have been obtained and submitted to Lender upon Lender’s request.

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(h)

Right to Complete Capital Replacements . If Borrower abandons or fails to proceed diligently with any Capital Replacement in a timely fashion or an Event of Default occurs and continues under this Loan Agreement for 30 days after Notice of such failure by Lender to Borrower, Lender will have the right (but not the obligation) to enter upon the Mortgaged Property and take over and cause the completion of such Capital Replacement. However, no such Notice or cure period will apply in the case of such failure which could, in Lender’s sole and absolute discretion, absent immediate exercise by Lender of a right or remedy under this Loan Agreement, result in harm to Lender, tenants or third parties or impairment of the security given under this Loan Agreement, the Security Instrument or any other Loan Document. Any contracts entered into or indebtedness incurred upon the exercise of such right may be in the name of Borrower, and Lender is irrevocably appointed the attorney in fact for Borrower, such appointment being coupled with an interest, to enter into such contracts, incur such obligations, enforce any contracts or agreements made by or on behalf of Borrower (including the prosecution and defense of all actions and proceedings in connection with the Capital Replacement and the payment, settlement or compromise of all bills and claims for materials and work performed in connection with the Capital Replacement) and do any and all things necessary or proper to complete any Capital Replacement, including signing Borrower’s name to any contracts and documents as may be deemed necessary by Lender. In no event will Lender be required to expend its own funds to complete any Capital Replacement, but Lender may, in Lender’s Discretion, advance such funds. Any funds advanced will be added to the Indebtedness, secured by the Security Instrument and payable to Lender by Borrower in accordance with the provisions of the Note, this Loan Agreement, the Security Instrument and any other Loan Document pertaining to the protection of Lender’s security and advances made by Lender.

(i)

Completion of Capital Replacements . Lender’s disbursement of monies from the Replacement Reserve Fund or other acknowledgment of completion of any Capital Replacement in a manner satisfactory to Lender in Lender’s Discretion will not be deemed a certification by Lender that the Capital Replacement has been completed in accordance with applicable building, zoning or other codes, ordinances, statutes, laws, regulations or requirements of any Governmental Authority. Borrower will at all times have the sole responsibility for ensuring that all Capital Replacements are completed in accordance with all such requirements of any Governmental Authority.

(j)

Reserved.

(k)

Reserved.

The following definitions are added to Article XII:

“ Initial Deposit ” means $0.00.

“ Minimum Replacement Disbursement Request Amount ” means $7,500.00.

“ Monthly Deposit ” means $10,840.00.

“ Replacement Reserve Deposit ” means the Initial Deposit, the Monthly Deposit and/or the Revised Monthly Deposit, as appropriate.

“ Replacement Reserve Disbursement Period ” means the interval between disbursements from the Replacement Reserve Fund, which interval will be no shorter than once a month.

“ Replacement Reserve Fund ” means the account established pursuant to this Loan Agreement to defray the costs of Capital Replacements.

“ Revised Monthly Deposit ” means the adjusted amount per month that Lender determines Borrower must deposit in the Replacement Reserve Fund following any adjustment determination by Lender pursuant to Section 4.04(c).

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

AFFILIATE TRANSFER

(MPC Partnership Holdings LLC)

(Revised 7-12-2016)

The following changes are made to the Loan Agreement which precedes this Rider:

Section 7.03(d)(i) is deleted and replaced with the following:

(i)

Affiliate Transfer. A Transfer of any direct or indirect interests in Borrower held by, or by an entity owned and Controlled by, MPC Partnership Holdings LLC (“Affiliate Transferor”) to one or more of Affiliate Transferor’s Affiliates (“Affiliate Transfer”) provided that each of the following conditions is satisfied:

(A)

Borrower provides Lender with at least 30 days prior Notice of the proposed Affiliate Transfer and pays to Lender the Transfer Processing Fee.

(B)

At the time of the proposed Affiliate Transfer, no Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(C)

Borrower pays or reimburses Lender, upon demand, for all costs and expenses including all Attorneys’ Fees and Costs, incurred by Lender in connection with the Affiliate Transfer.

(D)

Lender determines, in Lender’s Discretion, that the Affiliate meets Lender’s eligibility, credit, management and other standards.

(E)

After the Affiliate Transfer, MPC Partnership Holdings LLC maintains direct or indirect Control of the Affiliate transferee, and Control and management of the day-to-day operations of Borrower continue to be held by the Person exercising such Control and management immediately prior to the Affiliate Transfer and there is no change in the Guarantor, if applicable.

(F)

Lender receives organizational charts reflecting the structure of Borrower prior to and after the Affiliate Transfer.

(G)

Lender will not be entitled to collect a Transfer Fee as the result of the Affiliate Transfer.

(H)

Lender receives confirmation acceptable to Lender that (1) the requirements of Section 6.13 continue to be satisfied, and (2) the term of existence of the Affiliate (exclusive of any unexercised extension options or rights) does not expire prior to the Maturity Date.

(I)

Borrower delivers to Lender a search confirming that the Affiliate is not on any Prohibited Parties List.

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(J)

If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to the Affiliate Transfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than a 50% direct or indirect interest in Borrower as of the Closing Date, Borrower delivers to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender, with regard to nonconsolidation.

(K)

Borrower either (1) certifies that there are no Non-US Equity Holders, or (2) delivers to Lender searches confirming that no Non-U.S. Equity Holder is on any Prohibited Parties List.

(L)

At Lender’s request, Borrower executes a reaffirmation of its obligations under the Loan Documents in a form acceptable to Lender.

(M)

In the event of a Transfer prohibited by or requiring Lender’s approval under this Section 7.03, the provisions of this Section 7.03(d)(i) may be modified or rendered void by Lender at Lender’s sole option by Notice to Borrower and the transferee(s) as a condition to Lender’s consent.

The following definition is added to Article XII:

“Affiliate Transfer” is defined in Section 7.03(d)(i).

“Affiliate Transferor” is defined in Section 7.03(d)(i).

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

AFFILIATE TRANSFER

(Bluerock Residential Holdings, LP)

(Revised 7-12-2016)

The following changes are made to the Loan Agreement which precedes this Rider:

Section 7.03(d) ~~(i)~~ (ii) is deleted and replaced with the following:

(ii)

Affiliate Transfer. A Transfer of any direct or indirect interests in Borrower held by an entity directly or indirectly owned and Controlled by Bluerock Residential Growth REIT, Inc. (“Bluerock Affiliate Transferor”) to one or more “Bluerock Affiliate Transferor’s Affiliates” (“Bluerock Affiliate Transfer”) provided that each of the following conditions is satisfied:

(A)

Borrower provides Lender with at least 30 days prior Notice of the proposed Bluerock Affiliate Transfer and pays to Lender the Transfer Processing Fee.

(B)

At the time of the proposed Bluerock Affiliate Transfer, no Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(C)

Borrower pays or reimburses Lender, upon demand, for all costs and expenses including all Attorneys’ Fees and Costs, incurred by Lender in connection with the Bluerock Affiliate Transfer.

(D)

Lender determines, in Lender’s Discretion, that the Bluerock Affiliate Transferor’s Affiliate meets Lender’s eligibility, credit, management and other standards.

(E)

After the Bluerock Affiliate Transfer, Control and management of the day-to-day operations of Borrower and the Facility continue to be held by the Person exercising such Control and management immediately prior to the Bluerock Affiliate Transfer and there is no change in the Guarantor, if applicable.

(F)

Lender receives organizational charts reflecting the structure of Borrower prior to and after the Bluerock Affiliate Transfer.

(G)

Lender will not be entitled to collect a Transfer Fee as the result of the Bluerock Affiliate Transfer.

(H)

Lender receives confirmation acceptable to Lender that (1) the requirements of Section 6.13 continue to be satisfied, and (2) the term of existence of the Bluerock Affiliate Transferor’s Affiliate (exclusive of any unexercised extension options or rights) does not expire prior to the Maturity Date.

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(I)

Borrower delivers to Lender a search confirming that the Bluerock Affiliate Transferor’s Affiliate is not on any Prohibited Parties List.

(J)

If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to the Bluerock Affiliate Transfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than a 50% direct or indirect interest in Borrower as of the Closing Date, Borrower delivers to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender, with regard to nonconsolidation.

(K)

Borrower either (1) certifies that there are no Non-US Equity Holders, or (2) delivers to Lender searches confirming that no Non-U.S. Equity Holder is on any Prohibited Parties List.

(L)

At Lender’s request, Borrower executes a reaffirmation of its obligations under the Loan Documents in a form acceptable to Lender.

(M)

In the event of a Transfer prohibited by or requiring Lender’s approval under this Section 7.03, the provisions of this Section 7.03(d)(ii) may be modified or rendered void by Lender at Lender’s sole option by Notice to Borrower and the transferee(s) as a condition to Lender’s consent.

The following definition is added to Article XII:

“ Bluerock Affiliate Transfer” is defined in Section 7.03(d) ~~(i)~~ (ii) .

“ Bluerock Affiliate Transferor” is defined in Section 7.03(d) ~~(i)~~ (ii) .

“Bluerock Affiliate Transferor’s Affiliates” is defined as any entity that is, directly or indirectly, owned or otherwise controlled by, or under common control with, Bluerock Residential Growth REIT , Inc. For purposes hereof, Bluerock Residential Growth REIT, Inc will be deemed controlled by Ramin Kamfar, its current Chief Executive Officer, President and Board Chairman as well as the majority owner of its advisor.

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

BUY-SELL TRANSFER

(Revised 7-12-2016)

The following changes are made to the Loan Agreement which precedes this Rider:

Section 7.03(d)(iii) is deleted and replaced with the following:

(iii)

Buy-Sell Transfer . A one-time Transfer (“ Buy-Sell Transfer ”) pursuant to a buy-sell agreement, operating agreement, joint venture agreement or similar agreement of the interests in BR Carroll Glenridge JV LLC , the sole member of Borrower.

(A)

The Buy-Sell Transfer may consist of either of the following Transfers:

(1)

The Transfer of the interests of BR Glenridge JV Member, LLC , a Delaware limited liability company ( for convenience, referred to herein as “ Manager ”) to Carroll Co-Invest IV Glenridge, LLC , a Delaware limited liability company or to its ~~wholly owned~~ Affiliate ( for convenience, referred to herein as “ Equity ”) (either by purchase of the ownership interest of the Manager or replacement of the Manager as the general partner, manager or managing member).

(2)

The Transfer of the Equity’s ownership to the Manager or to a ~~wholly owned~~ Affiliate of Manager (either by purchase of the ownership interest of the Equity or replacement of the Equity as a participant in any management committee).

(B)

The Buy-Sell Transfer will be a permitted Transfer if each of the following conditions is satisfied:

(1)

Borrower provides Lender with at least 30 days prior Notice of the proposed Buy-Sell Transfer and pays to Lender the Transfer Processing Fee.

(2)

At the time of the proposed Buy-Sell Transfer, no Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default; provided, however, if the Buy-Sell Transfer would cure the Event of Default, the Buy-Sell Transfer must occur within 60 days after all conditions in this Section have been met to Lender’s satisfaction.

(3)

Borrower pays or reimburses Lender, upon demand, for all costs and expenses, including all Attorneys’ Fees and Costs, incurred by Lender in connection with the Buy-Sell Transfer.

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(4)

For the purposes of this Section 7.03(d)(iii), Bluerock Residential Growth REIT, Inc. will be referred to as the “Bluerock Guarantor,” and Carroll Multifamily Real Estate Fund IV, LP will be referred to as the “Carroll Guarantor.” If there is a new manager of Borrower (“ New Manager ”), New Manager provides a guarantor (“ New Manager Guarantor ”) acceptable to Lender in Lender’s Discretion, and each of the following requirements is met (collectively, the “New Manager Requirements” ):

(I)

At the time of the Buy-Sell Transfer, if the Manager is the transferor, the Carroll ~~New Manager~~ Guarantor has a net worth of at least $15,000,000, and liquid assets of at least $3,000,000.

(II)

~~Lender receives all information and organizational documents requested by Lender in Lender’s Discretion, with respect to New Manager Guarantor~~ At the time of the Buy-Sell Transfer, if the Equity is the transferor, the Bluerock Guarantor has a net worth of at least $15,000,000, and liquid assets of at least $4,843,100 .

(III)

~~New Manager Guarantor~~ The Bluerock Guarantor (if the Equity is the transferor) or the Carroll Guarantor (if the Manager is the transferor) executes a ratification of its Guaranty in a form acceptable to Lender and ~~in substantially the same form as the Guaranty executed on the Closing Date (“ New Manager Guaranty ”), however, if New Manager Guarantor is an entity,~~ the following condition s will be applicable:

(X)

The ~~New Manager~~ ratification of the Guaranty ~~has been modified to include, at New Manager Guarantor’s option, either~~ will confirm that the ratifying Guarantor alone must satisfy the requirements of the Rider to Guaranty – Material Adverse Change, or the Rider to Guaranty – Minimum Net Worth/Liquidity , as applicable, during the entire remaining term of the Loan .

~~(Y)~~

~~Section 9.01(ccc) will be deleted and replaced with the following:~~

~~(ccc)~~

~~Any failure by Guarantor to comply with the Minimum Net Worth/Liquidity Rider to the Guaranty, or the Material Adverse Change Rider to the Guaranty, if applicable.~~

(IV)

Following the Buy-Sell Transfer, Control and management of the day-to-day operations of the Equity (if the Manager is the transferor) or of the Manager (if the Equity is the transferor) continues to be held by the Person exercising such Control and management immediately prior to the Buy-Sell Transfer.

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(5)

The Mortgaged Property continues to be managed by the initial Property Manager or a successor Property Manager satisfactory to Lender pursuant to a property management agreement approved by Lender in writing; which approval will not be unreasonably withheld, provided that such successor Property Manager and Borrower execute an assignment of the management agreement in form acceptable to Lender.

(6)

Reserved.

(7)

At the time of the proposed Buy-Sell Transfer, if the Equity (if the Manager is the transferor) or the ~~becomes a New~~ Manager (if the Equity is the transferor) , it certifies to Lender that its net worth and liquidity are substantially the same as or better than its net worth and liquidity as of the date of this Loan Agreement and there is not any pending bankruptcy, reorganization or litigation which would substantially negatively affect such net worth and/or liquidity.

(8)

Lender receives organizational charts reflecting the structure of Borrower prior to and after the Buy-Sell Transfer.

(9)

Lender receives confirmation acceptable to Lender that (1) the requirements of Section 6.13 continue to be satisfied, and (2) the term of existence of each of the Equity and the Manager (exclusive of any unexercised extension options or rights) does not expire prior to the Maturity Date.

(10)

If the Transfer is to a ~~wholly-owned~~ Affiliate of either the Equity or Manager, Borrower delivers to Lender a search confirming that the transferee Affiliate is not on any Prohibited Parties List.

(11)

If a nonconsolidation opinion was delivered on the Closing Date and if, after giving effect to the Buy-Sell Transfer and all prior Transfers, 50% or more in the aggregate of direct or indirect interests in Borrower are owned by any Person and its Affiliates that owned less than a 50% direct or indirect interest in Borrower as of the Closing Date, Borrower delivers to Lender an opinion of counsel for Borrower, in form and substance satisfactory to Lender with regard to nonconsolidation.

(12)

If ~~there is a New Manager Guarantor and all of the New Manager R~~ the r equirements of Section 7.03(d)(iii)(B)(4) have been satisfied, the Bluerock Guarantor (if the Manager is the transferor) or the Carroll Guarantor (if the Equity is the transferor), ~~may request~~ will be deemed automatically to have requested a release of its liability under the Guaranty in accordance with Section 7.05(c) of this Loan Agreement.

(13)

Borrower either (1) certifies that there are no Non-US Equity Holders, or (2) delivers to Lender searches confirming that no Non-U.S. Equity Holder is on any Prohibited Parties List.

The following definitions are added to Article XII:

“ Buy-Sell Transfer ” is defined in Section 7.03(d)(iii).

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“ Equity ” is defined in Section 7.03(d)(iii)(A)(1).

“ Manager ” is defined in Section 7.03(d)(iii)(A)(1).

~~“ New Manager ” is defined in Section 7.03(d)(iii)(B)(4).~~

~~“New Manager Guarantor”~~ ~~is defined in Section 7.03(d)(iii)(B)(4).~~

~~“New Manager Guaranty”~~ ~~is defined in Section 7.03(d)(iii)(B)(4)(III).~~

~~“New Manager Requirements”~~ ~~is defined in Section 7.03(d)(iii)(B)(4).~~

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RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

RATE CAP AGREEMENT AND RATE CAP AGREEMENT RESERVE FUND

(Revised 1-27-2016)

The following changes are made to the Loan Agreement which precedes this Rider:

Section 3.04 is deleted and replaced with the following:

3.04

Cap Agreement and Cap Collateral Assignment.

(a)

Cap Agreement . To protect against fluctuations in interest rates, Borrower must obtain and maintain a Cap Agreement at all times so long as the Loan is outstanding. The initial Cap Agreement must be successfully bid no later than the Closing Date and be effective for an initial term ending not earlier than the third anniversary of the Closing Date. The initial Cap Agreement must be in a Notional Amount equal to the principal amount of the Loan on the Closing Date and have a Strike Rate that does not exceed the Original Strike Rate. The Cap Agreement, including any Replacement Cap Agreement, must be from a Cap Provider, be in a form acceptable to Lender, and obligate the Cap Provider to make monthly payments directly to Lender or to Loan Servicer on behalf of Lender in an amount equal to the excess of (i) the interest on the Notional Amount at the Index Rate over (ii) interest on the Notional Amount at the Strike Rate.

(b)

Replacement Cap Agreement . At least 60 days prior to the date on which an existing Cap Agreement terminates, Borrower must give Notice to and provide evidence satisfactory to Lender that Borrower will deliver a Replacement Cap Agreement. Borrower must ensure that the Replacement Cap Agreement is in full force and effect not later than the day immediately following the expiration of the then-existing Cap Agreement. Any Replacement Cap Agreement must satisfy the requirements for a Cap Agreement in this Loan Agreement and (i) have a term expiring not earlier than one year from its effective date, (ii) have a Strike Rate that does not exceed the Original Strike Rate, and (iii) be in a Notional Amount equal to the outstanding principal balance due under the Note on the effective date of the Replacement Cap Agreement.

(c)

Attorneys’ Fees and Costs . Borrower must pay or reimburse Lender, upon demand, for all costs and expenses in connection with the initial Cap Agreement and any Replacement Cap Agreement, including (i) all Attorneys’ Fees and Costs incurred by Lender, and (ii) the cost of the cap broker, if any.

(d)

Cap Collateral . To secure Borrower’s payment obligations under the Loan, Borrower grants to Lender a security interest in the Cap Collateral, including any Replacement Cap Agreement.

B. Section 4.07 is deleted and replaced with the following:

4.07

Rate Cap Agreement Reserve Fund . As a condition to making the Loan, Lender has required Borrower to establish the Rate Cap Agreement Reserve Fund to ensure that adequate funds are available for, among other things, the purchase, if applicable, of any Replacement Cap Agreement.

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(a)

Deposits to Rate Cap Agreement Reserve Fund . If the initial Cap Agreement terminates prior to the Maturity Date, Lender will establish the Rate Cap Agreement Reserve Fund on the Closing Date. Commencing on the date the first installment of principal and/or interest is due under the Note and continuing on the same day for each successive month until the purchase of the last Replacement Cap Agreement, Borrower must pay to Lender an amount equal to the Rate Cap Reserve Deposit.

(b)

Adjustments to Rate Cap Reserve Deposit . Lender will recompute the amount of the Rate Cap Reserve Deposit every 6 months based on the anticipated outstanding principal balance due under the Note immediately prior to termination of the then-existing Cap Agreement. Lender will provide Notice to Borrower of any revised Rate Cap Reserve Deposit.

(c)

Disbursements from Rate Cap Agreement Reserve Fund . Lender will apply the funds in the Rate Cap Agreement Reserve Fund to the cost of the Replacement Cap Agreement, unless an Event of Default has occurred and is continuing, in which case Lender at its option may apply such funds to the Indebtedness in any amount and in any order as Lender determines in Lender’s Discretion. To the extent there are funds in the Rate Cap Agreement Reserve Fund in excess of the cost of the Replacement Cap Agreement, such funds may be applied to pay Attorneys’ Fees and Costs related to the Replacement Cap Agreement and to pay the cap broker, if any. In the event that, for any reason, there are insufficient funds in the Rate Cap Agreement Reserve Fund to purchase a Replacement Cap Agreement, Borrower must fund the amount of any such deficiency, including amounts necessary to pay Attorneys’ Fees and Costs and the cost of the cap broker, if any.

(d)

Termination of Rate Cap Agreement Reserve Fund . Upon purchase by Borrower of a Replacement Cap Agreement with an expiration date on or after the Maturity Date, Borrower will no longer be required to make Rate Cap Reserve Deposits. Any funds remaining in the Rate Cap Agreement Reserve Fund will be returned to Borrower upon the earlier to occur of (i) purchase of a Replacement Cap Agreement with a termination date not earlier than the Maturity Date, provided no Event of Default has occurred and is continuing, or (ii) payment in full of the Indebtedness.

Section 5.22 is deleted and replaced with the following:

5.22

Cap Collateral.

(a)

Obligation to Make Cap Payments . Borrower has instructed each Cap Provider and any guarantor of a Cap Provider’s obligations to make Cap Payments directly to Lender or to Loan Servicer on behalf of Lender.

(b)

Dodd-Frank Act . Borrower has complied with the applicable requirements of the Dodd-Frank Act in purchasing the initial Cap Agreement.

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Section 6.18 is deleted and replaced with the following:

6.18

Cap Collateral.

(a)

Obligation to Make Payments . Borrower will instruct each Cap Provider and any guarantor of a Cap Provider’s obligations to make Cap Payments directly to Lender or to Loan Servicer on behalf of Lender.

(b)

Dodd-Frank Act . Borrower will comply with the applicable requirements of the Dodd-Frank Act in purchasing any Replacement Cap Agreement.

The following definitions are added to Article XII:

“Dodd Frank Act” means the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“Index Rate” means the published variable rate index designated in the Cap Agreement as the “Floating Rate Option,” which Index Rate must be 1-month LIBOR.

“Notional Amount” means the dollar amount designated in the Cap Agreement as the “Notional Amount” which must be (i) with respect to the initial Cap Agreement, an amount equal to the principal amount of the Loan on the Closing Date, and (ii) with respect to any Replacement Cap Agreement, an amount equal to the outstanding principal balance due under the Note on the commencement date of the Replacement Cap Agreement.

“Original Strike Rate” means 3.02%.

“Rate Cap Reserve Deposit” means a monthly amount payable by Borrower sufficient to accumulate funds in an amount equal to 125% of the amount estimated by Lender to be sufficient to purchase, immediately prior to termination of the then-existing Cap Agreement, a Replacement Cap Agreement (i) expiring on the earlier of the date that is two years after the termination date of the then-existing Cap Agreement or the Maturity Date, (ii) having a Notional Amount equal to the outstanding principal balance due under the Note on the commencement date of the Replacement Cap Agreement, and (iii) having a Strike Rate equal to the Original Strike Rate.

“Strike Rate” means a fixed rate of interest under the Cap Agreement that does not exceed the Original Strike Rate.

Rider to Multifamily Loan and Security Agreement
Rate Cap Agreement and Rate Cap Agreement Reserve Fund

Page 3

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

ENTITY GUARANTOR

(Revised 3-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

Section 9.01(dd) is deleted and replaced with the following:

(dd)

Guarantor fails to comply with the provisions of the Section of the Guaranty entitled “Material Adverse Change” or “Minimum Net Worth/Liquidity Requirements ”, as applicable.

Rider to Multifamily Loan and Security Agreement

Entity Guarantor

RIDER TO MULTIFAMILY LOAN AND SECURITY AGREEMENT

TERMITE OR WOOD DAMAGING INSECT CONTROL

(Revised 3-1-2014)

The following changes are made to the Loan Agreement which precedes this Rider:

Section 6.09(k) is deleted and replaced with the following:

(k)

Termite or Wood Damaging Insect Control . Borrower will maintain a contract with a qualified service provider for control of termites or other wood damaging insects at the Mortgaged Property for so long as the Indebtedness remains outstanding.

Rider to Multifamily Loan and Security Agreement

Termite or Wood Damaging Insect Control

EXHIBIT A

DESCRIPTION OF THE LAND

(Nevadan Apartments)

TRACT ONE :

ALL THAT TRACT of land in Land Lots 38 and 69 of the 17th District of Fulton County, Georgia, described as follows:

BEGINNING at the intersection of the northeast right-of-way line of Northland Drive (variable right-of-way) with the south right-of-way line of Glenridge Drive (variable right-of-way); thence, running along the south and southeast right-of-way line of Glenridge Drive, the following courses and distances: (1) North 79 degrees 10 minutes 20 seconds East 175.27 feet to a point, (2) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 75 degrees 22 minutes 49 seconds East 62.93 feet and a radius of 475.00 feet) 62.87 feet to a point, (3) North 89 degrees 12 minutes 57 seconds East 22.82 feet to a point, (4) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 57 degrees 07 minutes 19 seconds East 231.76 feet and a radius of 449.22 feet) 234.42 feet to a point, (5) North 47 degrees 51 minutes 39 seconds West 11.78 feet to a point, and (6) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 38 degrees 00 minutes 36 seconds East 62.84 feet and a of 436.44 feet) 62.90 feet to a point; thence, leaving said right-of-way line, South 54 degrees 00 minutes 00 seconds East 91.00 feet to a point; thence South 36 degrees 30 minutes 00 seconds, West 26.00 feet to a point; thence South 54 degrees 30 minutes 00 seconds East 325.00 feet to a point; thence North 28 decrees 56 minutes 16 seconds East 79.00 feet to a point; thence South 66 degrees 57 minutes 51 seconds East 37.00 feet to a point; thence South 58 degrees 54 minutes 02 seconds East 194.00 feet to a point thence South 28 degrees 02 minutes 54 seconds West 164.00 feet to a point; thence South 18 degrees 12 minutes 19 seconds West 250.86 feet to a 1-inch crimp top iron pin found; thence North 89 degrees 40 minutes 49 seconds West 340.60 feet to a 1-1/2-inch crimp top iron pin found; thence North 20 degrees 01 minute 13 seconds West 267.84 feet along the northeast boundary line of Lot 1, Block B, Unit Two, Glenridge Manor Subdivision to a 1-1/2-inch crimp top iron pin found; thence South 62 degrees 43 minutes 16 seconds West 229.10 feet along the northwest boundary line of said Lot 1 to a point on the northeast right-of-way line of said Northland Drive; thence, along said northeast right-of-way line, the following courses and distances: (1) North 20 degrees 24 minutes 30 seconds West 24.58 feet to a point, (2) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 25 degrees 52 minutes 13 second West 123.95 feet and a radius of 651.08 feet) 124.14 feet to a point; (3) North 31 degrees 19 minutes 57 seconds West 12.81 feet to a point, (4) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 45 degrees 14 minutes 44 seconds West 96.68 feet and a radius of 201.03 feet) 97.53 feet to a point, and (5) along the arc of a curve to the right (which arc is subtended by a chord having a bearing and distance of North 49 degrees 03 minutes 48 seconds West 148.42 feet and a radius of 423.36 feet) 149.19 feet to the POINT OF BEGINNING, said tract containing 8.41301 acres.

TOGETHER WITH a non-exclusive right, title and interest in and to all non-exclusive easements contained in that certain Sewer Easement Agreement between Andrew E. Chandler and Independent Living International Corp. dated as of July 20, 1989, recorded in Deed Book 12661, Page 107, Fulton County, Georgia records.

TOGETHER WITH a non-exclusive right, title and interest in and to all non-exclusive easements contained in that certain Sewer Easement Agreement between Sarah J. Carpenter and Independent Living International Corp. dated as of July 20, 1989, recorded in Deed Book 12661, Page 98, aforesaid records.

Multifamily Loan and Security Agreement

Page A- 1

TRACT TWO :

ALL THAT TRACT of land in Land Lots 38 and 69 of the 17th District of Fulton County, Georgia, described as follows:

TO FIND THE TRUE POINT OF BEGINNING, commence at the intersection of the northeast right-of-way line of Northland Drive (variable right-of-way) with the south right-of-way line of Glenridge Drive (variable right-of-way); thence, running along the south and southeast right-of-way line of Glenridge Drive, the following courses and distances: (1) North 79 degrees 10 minutes 20 second East 175.27 feet to a point, (2) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 75 degrees 22 minutes 49 seconds East 62.83 feet and a radius of 475.00 feet) 62.87 feet to a point, (3) North 89 degrees 12 minutes 57 seconds East 22.82 feet to a point, (4) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 57 degrees 07 minutes 19 seconds East 231.76 feet and a radius of 448.22 feet) 234.42 feet to a point, (5) North 47 degrees 51 minutes 39 seconds West 11.78 feet to a point, and (6) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 38 degrees 00 minutes 36 seconds East 62.84 feet and a radius of 436.44 feet) 62.90 feet to a point and the TRUE POINT OF BEGINNING: from the TRUE POINT OF BEGINNING as thus established, continuing thence along said right-of-way line, the following courses and distances: (1) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 29 degrees 56 minutes 36 seconds East 59.95 feet and a radius of 436.44 feet) 60.00 feet to a point, (2) North 26 degrees 00 minutes 18 seconds East 174.82 feet to a point, (3) along the arc of a curve to the right (which arc is subtended by a chord having a bearing and distance of North 38 degrees 40 minutes 03 seconds East 220.49 feet and a radius of 502.92 feet) 222.29 feet to a point, and (4) North 51 degrees 19 minutes 49 seconds East 120.96 feet to a point on the southwest boundary line of Lot 4, Block A, Unit One, Glenridge Manor Subdivision; thence, leaving said right-of-way line, South 39 degrees 07 minutes 55 seconds East 216.57 feet along the southwest boundary line of said Lot 4 to a point; thence North 46 degrees 30 Minutes 16 seconds East 59.50 feet along the South boundary line of said Lot 4 to a 3/8-inch reinforcing, rod found at the northwest corner of Lot 6. Block A, Unit Two, Glenridge Manor Subdivision thence South 49 degrees 50 minutes 45 seconds East 193.19 feet along the southwest boundary line of said Lot 6 to a 1-3/4-inch crimp top iron pin found on the northwest right-of-way line of Royervista Drive; (a 50 foot-right-of-way) thence along said northwest right-of-way line, the following courses and distances: (1) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of South 27 degrees 55 minutes 01 second West 285.75 feet and a radius of 741 197 feet) 287.55 feet to a point, and (2) South 16 degrees 48 minutes 11 seconds West 125.89 feet to a point; thence, leaving said northwest right-of-way line South 64 degrees 30 minutes 58 seconds East 278.84 feet to a point on the northwest boundary line of Lot 23, Block B, Unit Two, Glenridge Manor Subdivision; thence South 17 degrees 40 minutes 41 seconds West 249.84 feet along the northwest boundary line of said, Lot 23 and along the northwest boundary line of Lot 24 Block B, Unit Two, Glenridge Manor Subdivision to an angle iron found, thence South 44 degrees 07 minutes 25 seconds West 231.89 feet along the northwest boundary line of Lot 25 Block B Unit Two, Glenridge Manor Subdivision to a 1-1/2-inch reinforcing rod found on the land lot line common to said Land Lots 38 and 69; thence North 89 degrees 40 minutes 51 seconds West 104.85 feet to a 1-inch crimp top iron pin found; thence North 18 degrees 12 minutes 19 seconds East 250.86 feet to a point; thence North 28 degrees 02 minutes 54 seconds East 164.00 feet to a point; thence North 58 degrees 54 minutes 02 seconds West 194.00 feet to a point; thence North 66 degrees 57 minutes 51 seconds West 37.00 feet to a point; thence South 28 degrees 56 minutes 16 seconds West 79.00 feet to a point; thence North 54 degrees 30 minutes 00 seconds West 325.00 feet to a point thence North 36 degrees 30 minutes 00 seconds East 26.00 feet to a point; thence North 54 degrees 00 minutes 00 seconds West 91.00 feet to the TRUE POINT OF BEGINNING, said tract containing 8.30101 acres.

TOGETHER WITH a non-exclusive right, title and interest in and to all non-exclusive easements contained in that certain Sewer Easement Agreement between Andrew E. Chandler and Independent Living International Corp. dated as of July 20,1989, recorded in Deed Book 12661, Page 107, Fulton County, Georgia records.

Multifamily Loan and Security Agreement

Page A- 2

EXHIBIT B

MODIFICATIONS TO Multifamily Loan and security AGREEMENT

The following modifications are made to the text of the Loan Agreement that precedes this Exhibit.

Section 6.06(a) is modified as follows:

(a)

Section 6.12(f) is modified as follows:

(f)

Remedial Work . If any investigation, site monitoring, containment, clean-up, Restoration or other remedial work (“ Remedial Work ”) is necessary to comply with any Hazardous Materials Law or order of any Governmental Authority that has or acquires jurisdiction over the Mortgaged Property or the use, operation or improvement of the Mortgaged Property, or is otherwise required by Lender as a consequence of any Prohibited Activity or Condition or to prevent the occurrence of a Prohibited Activity or Condition, Borrower will, by the earlier of (i) the applicable deadline required by Hazardous Materials Law, or (ii) 30 days after Notice from Lender demanding such action (or such longer period of time as is specifically allowed under any insurance policy covering such issue with a risk carrier that has accepted coverage responsibility for same subject to the requirements of Hazardous Materials Law and so long as Lender has determined that immediate action is not required to protect the residents of, or the value of, the Mortgaged Property) , begin performing the Remedial Work, and thereafter diligently prosecute it to completion, and must in any event complete the work by the time required by applicable Hazardous Materials Law. If Borrower fails to begin on a timely basis or diligently prosecute any required Remedial Work, Lender may, at its option, cause the Remedial Work to be completed, in which case Borrower will reimburse Lender on demand for the cost of doing so. Any reimbursement due from Borrower to Lender will become part of the Indebtedness as provided in Section 9.02.

Multifamily Loan and Security Agreement

Page B- 1

Section 6.13(a)(x) is modified as follows:

(x)

It will not incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than the following ; provided that no member of Borrower will be required to contribute any capital in excess of that required by Borrower’s organizational documents to satisfy this covenant, but provided further that this qualification will not be deemed to amend or modify the obligations under the Guaranty of any member of Borrower who is a Guarantor, if applicable :

(A)

The Indebtedness and any further indebtedness as described in Section 11.11 with regard to Supplemental Instruments.

(B)

(C)

through (F) are reserved.

Section 6.13(a)(xviii) is modified as follows:

(xviii)

It will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations and will pay its debts and liabilities from its own assets as the same become due ; provided that no member of Borrower will be required to contribute any capital in excess of that required by Borrower’s organizational documents to satisfy this covenant, but provided further that this qualification will not be deemed to amend or modify the obligations under the Guaranty of any member of Borrower who is a Guarantor, if applicable.

Section 6.13(a)(xx) is modified as follows:

(xx)

It will pay (or cause the Property Manager to pay on behalf of Borrower from Borrower’s funds) its own liabilities (including salaries of its own employees) from its own funds ; provided that no member of Borrower will be required to contribute any capital in excess of that required by Borrower’s organizational documents to satisfy this covenant, but provided further that this qualification will not be deemed to amend or modify the obligations under the Guaranty of any member of Borrower who is a Guarantor, if applicable

Section 7.03(c) is modified as follows:

(c)

(i)

The ~~public~~ issuance of common stock, convertible debt, equity or other similar securities (“ Public Fund/REIT Securities ”) and the subsequent Transfer of such Public Fund/REIT Securities. In the case of Bluerock Residential Growth REIT, Inc (“BR Reit”) such permitted Transfers shall expressly include Transfers arising out of (A) the sale of the Public Fund/REIT Securities to another publicly traded real estate investment trust (or an affiliate thereof controlled by the publicly traded real estate investment trust), (B) the merger, roll up, or other consolidation of BR Reit with another entity so long as Bluerock Reit or another publicly traded real estate investment trust (or an affiliate thereof controlled by the publicly traded real estate investment trust) is the surviving entity and (C) the issuance of put options in Bluerock Reit as part of an UPREIT or downREIT transaction.

Multifamily Loan and Security Agreement

Page B- 2

(ii)

(A)

Provides notice to Lender of that acquisition.

(B)

Complies with each of the following conditions:

(1)

Borrower delivers to Lender searches confirming that no Person with a collective equity interest (whether direct or indirect) of 25% or more in Borrower is on any Prohibited Parties List.

(2)

New Section 7.03(e) is added as follows:

(e)

Additional Bluerock Transfer Provisions . Transfers of interests in any Designated Entity for Transfers not otherwise permitted or conditionally permitted by the terms of this Loan Agreement resulting from a Transfer (including by merger or other consolidation) of all of the assets of or interests in Bluerock Residential Holdings, LP or Bluerock REIT Holdings, LLC (a “ Bluerock Entity Transfer ”) provided that each of the following conditions is satisfied:

(A)

Borrower provides Lender with at least 30 days prior Notice of the proposed Bluerock Entity Transfer and pays to Lender the Transfer Processing Fee.

(B)

At the time of the proposed Bluerock Entity Transfer, no Event of Default has occurred and is continuing and no event or condition has occurred and is continuing that, with the giving of Notice or the passage of time, or both, would become an Event of Default.

(C)

Borrower pays or reimburses Lender, upon demand, for all costs and expenses including all Attorneys’ Fees and Costs, incurred by Lender in connection with the Bluerock Entity Transfer.

(D)

After the Bluerock Entity Transfer, Control and management of the day-to-day operations of Borrower continue to be held, directly or indirectly, by (i) Bluerock REIT, (ii) MPC Partnership Holdings LLC, or (iii) a publicly held real estate investment trust which is (or to whose Affiliate is) the transferee of the Bluerock Entity Transfer.

Multifamily Loan and Security Agreement

Page B- 3

(E)

Lender receives organizational charts reflecting the structure of Borrower prior to and after the Bluerock Entity Transfer.

(F)

Lender will not be entitled to collect a Transfer Fee as the result of the Bluerock Entity Transfer.

(G)

Lender receives confirmation acceptable to Lender that (1) the requirements of Section 6.13 continue to be satisfied, and (2) the term of existence of the Bluerock Entity Transfer transferee and of the “Replacement Bluerock Guarantor” described below (exclusive of any unexercised extension options or rights) does not expire prior to the Maturity Date.

(H)

Borrower delivers to Lender a search confirming that the Bluerock Entity Transfer transferee is not on any Prohibited Parties List.

(I)

At Lender’s request, Borrower executes a reaffirmation of its obligations under the Loan Documents in a form acceptable to Lender.

(J)

Borrower provides a replacement Guarantor (“ Replacement Guarantor ”) acceptable to Lender in Lender’s Discretion, and each of the following requirements is met (collectively, the “Replacement Requirements” ):

(I)

At the time of the Bluerock Entity Transfer, Replacement Guarantor and the Carroll Guarantor (provided the Carroll Guarantor is a Guarantor at the time of the Bluerock Entity Transfer) collectively have a net worth of at least $ 15,000,000 , and liquid assets of at least $ 4,843,100 .

(II)

Lender has received all information and organizational documents requested by Lender in Lender’s Discretion, with respect to Replacement Guarantor.

(III)

Replacement Guarantor executes a Guaranty in a form acceptable to Lender and in substantially the same form as the Guaranty executed on the Closing Date, and the Carroll Guarantor executes a ratification of its Guaranty executed on the Closing Date.

(K)

Multifamily Loan and Security Agreement

Page B- 4

Section 11.03 is hereby modified by adding a new subsection (d) as follows:

(d)

Lender shall endeavor to give the individuals or entities listed below courtesy copies of any Notice given to Borrower or any guarantor by Lender, at the addresses set forth below; provided, however, that failure to provide such courtesy copies of Notices shall not affect the validity or sufficiency of any Notice to Borrower or any guarantor, shall not affect Lender’s rights and remedies hereunder or under any other Loan Documents and shall not subject Lender to any claims by or liability to Borrower, any guarantor or any other individual or entity. It is acknowledged and agreed that no individual or entity listed below is a third-party beneficiary to any of the Loan Documents.

Bluerock Residential

with a copy to :

Growth REIT, Inc.

712 Fifth Avenue

9 ^th Floor

New York, New York 10019

Attention: Michael Konig, Esq.

Telephone: (212) 843-1601

Email: mkonig@bluerockre.com

Kaplan Voekler Cunningham & Frank PLC

1401 E. Cary St.
Richmond, VA 23219

Attention: S. Edward Flanagan

Telephone: (804) 823-4000

Email: eflanagan@kv-legal.com

Multifamily Loan and Security Agreement

Page B- 5

EXHIBIT c

REPAIR SCHEDULE OF WORK

Description of Repair	Cost		(Completion Date) Days after Closing Date to complete

Retaining Walls: Repair or replace the south end of the crib wall retaining wall to the north of Building 8	$	15,000		180
Retaining Walls Guardrails: Install guardrails at the top of all retaining walls greater than 40-inches in height	$	12,000		180
Unit 801 Patio (Foundation) Wall: Evaluation by a structure engineer and repaired as needed	$	15,000		90
Building 2 Cladding / Framing: Repair damaged framing members and cladding	$	30,000		180
Exterior Walls (paint/finish): Inspect all buildings and repair areas of wood deterioration and sealant separation as needed	$	192,000		180
Stairways: Check all stairways for deteriorating components and repair as necessary	$	225,000		180
Breezeway Decking: Sand and repaint all deteriorated breezeway decking as needed	$	45,000		180
Balconies: Repair areas of deterioration on decking, door frames, and guardrails as necessary	$	180,000		180
Fire Safety Systems: Correct all deficiencies noted on the Century Fire inspection dated July 12, 2016 (and included in the zoning report dated 8/3/2016) relating to fire sprinkler risers and fire extinguishers that were tagged with noncompliance tags.	$	49,500		90
Carbon monoxide detectors: Install detectors in all units with fireplaces	$	12,250		90
Apparent Mold Growth: Check all riser closets for AMG and repair areas listed in report	$	5,000		90
Parking restripe: Restripe necessary spaces to bring the number of ADA accessible spaces into compliance	$	0		90

Multifamily Loan and Security Agreement

Page C- 1

EXHIBIT d

REPAIR DISBURSEMENT REQUEST

The undersigned requests from (“Lender”) the disbursement of funds in the amount of $_________________ (“Disbursement Request”) from the Repair Reserve Fund established pursuant to the Multifamily Loan and Security Agreement dated , 20 by and between Lender and the undersigned ( “Loan Agreement”) to pay for repairs to the multifamily apartment project known as and located in .

The undersigned represents and warrants to Lender that the following information and certifications provided in connection with this Disbursement Request are true and correct as of the date hereof:

Purpose for which disbursement is requested:

To whom the disbursement will be made (may be the undersigned in the case of reimbursement for advances and payments made or cost incurred for work done by the undersigned):

Estimated costs of completing the uncompleted Repairs as of the date of this Disbursement Request:

The undersigned certifies that each of the following is true:

(a)

The disbursement requested pursuant to this Disbursement Request will be used solely to pay a cost or costs allowable under the Loan Agreement.

(b)

None of the items for which disbursement is requested pursuant to this Disbursement Request has formed the basis for any disbursement previously made from the Repair Reserve Fund.

(c)

All labor and materials for which disbursements have been requested have been incorporated into the Improvements or suitably stored upon the Mortgaged Property in accordance with reasonable and standard building practices, the Loan Agreement and all applicable laws, ordinances, rules and regulations of any governmental authority having jurisdiction over the Mortgaged Property.

(d)

The materials, supplies and equipment furnished or installed for the Repairs are not subject to any Lien or security interest or that the funds to be disbursed pursuant to this Disbursement Request are to be used to satisfy any such Lien or security interest.

All capitalized terms used in this Disbursement Request without definition will have the meanings ascribed to them in the Loan Agreement.

Multifamily Loan and Security Agreement

Page D- 1

IN WITNESS WHEREOF, the undersigned has executed this Disbursement Request as of the day and date first above written.

			BORROWER:

Date:

Multifamily Loan and Security Agreement

Page D- 2

EXHIBIT e

WORK COMMENCED AT MORTGAGED PROPERTY

NONE

Multifamily Loan and Security Agreement

Page E- 1

EXHIBIT F

CAPITAL REPLACEMENTS

Carpet/vinyl flooring

Window treatments

Roofs

Furnaces/boilers

Air conditioners

Ovens/ranges

Refrigerators

Dishwashers

Water heaters

Garbage disposals

Paving

Striping

Pool and/or spa filtration equipment

Exterior walls (paint/repair)

Other items that Lender may approve subject to any conditions that Lender may require, all in Lender’s sole and absolute discretion.

Multifamily Loan and Security Agreement

Page F- 1

EXHIBIT G

DESCRIPTION OF GROUND LEASE

Not Applicable

Multifamily Loan and Security Agreement

Page G- 1

EXHIBIT H

ORGANIZATIONAL CHART of borrower as of the closing date

Multifamily Loan and Security Agreement

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EXHIBIT I

DESIGNATED ENTITIES FOR TRANSFERS AND GUARANTOR(S)

Designated Entities for Transfers

BR Carroll Glenridge JV, LLC

BR Glenridge JV Member, LLC

BRG Glenridge, LLC

Bluerock Residential Holdings, LP

Bluerock Residential Growth REIT, Inc.

Carroll Co-Invest IV Glenridge, LLC

Carroll Multifamily Real Estate Fund IV, LP

MPC Property Holdings IV, LLC

MPC Partnership Holdings LLC

P. Carroll Capital Partners, LLC

HUP Investment Company, LLC

Guarantor(s)

Bluerock Residential Growth REIT, Inc.

Carroll Multifamily Real Estate Fund IV, LP

Multifamily Loan and Security Agreement

Page I- 1

EXHIBIT J

DESCRIPTION OF RELEASE PARCEL

Not Applicable

Multifamily Loan and Security Agreement

Page J- 1

EXHIBIT O

BORROWER’S CERTIFICATE OF

PROPERTY IMPROVEMENT ALTERATIONS COMPLETION

THIS BORROWER’S CERTIFICATE OF PROPERTY IMPROVEMENT ALTERATIONS COMPLETION (“ Certificate ”) is made as of __________, 20___, by ______________, a ________________ (“ Borrower ”) for the benefit of ________________, a ________________, and it successors and assigns (collectively, “ Lender ”).

In connection with Section 6.09(e)(v)(G) of the Loan Agreement, Borrower certifies to Lender as follows:

[INSERT THE APPLICABLE SECTION (a) AND DELETE THE OTHER:]

[USE THE FOLLOWING IF ALL PROPERTY IMPROVEMENT ALTERATIONS THAT WERE COMMENCED HAVE BEEN COMPLETED]

(a)

All Property Improvement Alterations described in the Property Improvement Notice that were commenced have been completed. The completed Property Improvement Alterations and their completion dates are as follows:

Description of Property Improvement Alteration Commenced		Completion Date

[OR]

[USE THE FOLLOWING IF MINIMUM OCCUPANCY HAS DECREASED BELOW THE MINIMUM OCCUPANCY REQUIREMENT AND NOT ALL THE PROPERTY IMPROVEMENT ALTERATIONS THAT WERE COMMENCED HAD BEEN COMPLETED AT SUCH TIME]

(a)

All Property Improvement Alterations described in the Property Improvement Notice that resulted in individual residential dwelling units not being available for leasing that were commenced have been or will be completed in a timely manner. Such Property Improvement Alterations that were commenced and their completion dates and/or, if applicable, anticipated completion dates, are as follows:

Description of Property Improvement Alteration Commenced	Completion Date	Anticipated Completion Date	Comments

Multifamily Loan and Security Agreement

Page O- 1

[FOR ALL LOANS:]

(b)

The completed Property Improvement Alterations were completed in a good and workmanlike manner and in compliance with all laws (including, without limitation, any and all life safety laws, environmental laws, building codes, zoning ordinances and laws for the handicapped and/or disabled)

(c)

Should Borrower intend to contest any claim or claims for labor, materials or other costs, Borrower agrees to give Lender notice within 30 days of the existence of such claim or claims and certifies to Lender that payment of the full amount which might in any event be payable in order to satisfy such claim or claims will be made.

[INSERT THE FOLLOWING IF MINIMUM OCCUPANCY HAS DECREASED BELOW THE MINIMUM OCCUPANCY REQUIREMENT]

(d)

Any additional Property Improvement Alterations not yet commenced which would cause residential dwelling units to be unavailable for leasing have been suspended.

[BORROWER SIGNATURE]

Multifamily Loan and Security Agreement

Page O- 2

Exhibit 10.6

Freddie Mac Loan Number: 708657427

Property Name: Nevadan Apartments

MULTIFAMILY NOTE

FLOATING RATE

(Revised 7-12-2016)

US $48,431,000.00

Effective Date: As of October 13, 2016

FOR VALUE RECEIVED, BR CARROLL GLENRIDGE, LLC , a Delaware limited liability company (together with such party’s or parties’ successors and assigns, “ Borrower ”) jointly and severally (if more than one), promises to pay to the order of KEYBANK NATIONAL ASSOCIATION , a national banking association, the principal sum of $48,431,000.00, with interest on the unpaid principal balance, as hereinafter provided.

Defined Terms.

(a)

As used in this Note:

“ Amortization Period ” means a period of 360 full consecutive calendar months.

“ Base Recourse ” means a portion of the Indebtedness equal to 0% of the original principal balance of this Note.

“ Business Day ” means any day other than a Saturday, a Sunday, or any other day on which Lender or the national banking associations are not open for business.

“ Capped Interest Rate ” is not applicable, there is no Capped Interest Rate for the Loan.

“ Default Rate ” means a variable annual interest rate equal to 4 percentage points above the Floating Interest Rate in effect from time to time. However, at no time will the Default Rate exceed the Maximum Interest Rate.

“ First Installment Due Date ” means December 1, 2016.

“ First Principal and Interest Installment Due Date ” means December 1, 2019.

“ Floating Interest Rate ” means the variable annual interest rate calculated for each Interest Adjustment Period so as to equal the Index Rate for such Interest Adjustment Period (truncated at the 5 ^th decimal place if necessary) plus the Margin. However, in no event will the Floating Interest Rate exceed the Capped Interest Rate.

“ Freddie Mac ” means the Federal Home Loan Mortgage Corporation.

“ ICE ” means ICE Benchmark Administration Limited.

“ Index Rate ” means, for any Interest Adjustment Period, the 1-month LIBOR Index Rate for such Interest Adjustment Period.

Multifamily Note

Floating Rate

“ Installment Due Date ” means, for any monthly installment of interest-only or principal and interest, the date on which such monthly installment is due and payable pursuant to Section 3 of this Note.

“ Interest Adjustment Period ” means each successive one (1) calendar month period until the entire Indebtedness is paid in full, except that the first Interest Adjustment Period is the period from the date of this Note through October 31, 2016. Therefore, the second Interest Adjustment Period will be the period from November 1, 2016 through November 30, 2016, and so on until the entire Indebtedness is paid in full.

“ Lender ” means the holder from time to time of this Note.

“ LIBOR ” means the London Interbank Offered Rate.

“ LIBOR Index ” means ICE’s one (1) month LIBOR rate for United States Dollar deposits, as displayed on the LIBOR Index Page used to establish the LIBOR Index Rate.

“ LIBOR Index Rate ” means, for any Interest Adjustment Period after the first Interest Adjustment Period, ICE’s LIBOR rate for the LIBOR Index released by ICE most recently preceding the first day of such Interest Adjustment Period, as such LIBOR rate is displayed on the LIBOR Index Page. The LIBOR Index Rate for the first Interest Adjustment Period means ICE’s LIBOR rate for the LIBOR Index released by ICE most recently preceding the first day of the month in which the first Interest Adjustment Period begins, as such LIBOR rate is displayed on the LIBOR Index Page; provided, however, that if at any time the LIBOR Index Rate is less than zero, the LIBOR Index Rate shall be deemed to be zero for all purposes of this Note and the Loan Agreement.

“ LIBOR Index Page ” is the Bloomberg L.P., page “BBAM”, or such other page for the LIBOR Index as may replace page BBAM on that service, or at the option of Lender (i) the applicable page for the LIBOR Index on another service which electronically transmits or displays ICE LIBOR rates, or (ii) any publication of LIBOR rates available from ICE. In the event ICE ceases to set or publish a LIBOR rate/interest settlement rate for the LIBOR Index, Lender will designate an alternative index, and such alternative index will constitute the LIBOR Index Page.

“ Loan ” means the loan evidenced by this Note.

“ Loan Agreement ” means the Multifamily Loan and Security Agreement entered into by and between Borrower and Lender, effective as of the effective date of this Note, as amended, modified, or supplemented from time to time.

“ Lockout Period ” means the period from the date of this Note through the day preceding the 12th Installment Due Date under this Note.

“ Margin ” means two and forty-eight hundredths percentage points (248 basis points).

“ Maturity Date ” means the earlier of (i) November 1, 2023 (“ Scheduled Maturity Date ”) and (ii) the date on which the unpaid principal balance of this Note becomes due and payable by acceleration or otherwise pursuant to the Loan Documents or the exercise by Lender of any right or remedy under any Loan Document; provided, however, that if the unpaid principal balance of this Note becomes due and payable by acceleration but such acceleration is rendered null and void and of no further force and effect by operation of law or agreement by Lender, such acceleration will have no effect on the Maturity Date.

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“ Maximum Interest Rate ” means the rate of interest which results in the maximum amount of interest allowed by applicable law.

“ Prepayment Premium Period ” means the period during which, if a prepayment of principal occurs, a prepayment premium will be payable by Borrower to Lender. The Prepayment Premium Period is the period from and including the date of this Note until but not including the first day of the Window Period.

“ Program Plus® Seller/Servicer ” means an institution approved to sell multifamily mortgages to Freddie Mac as a Program Plus Seller/Servicer.

“ Remaining Amortization Period ” means, at any point in time, the number of consecutive calendar months equal to the number of months in the Amortization Period minus the number of scheduled monthly installments of principal and interest that have elapsed since the date of this Note.

“ Security Instrument ” means the multifamily mortgage, deed to secure debt or deed of trust effective as of the effective date of this Note, from Borrower to or for the benefit of Lender and securing this Note, as amended, modified or supplemented from time to time.

“ Window Period ” means the 3 consecutive calendar month period prior to the Scheduled Maturity Date.

(b)

Other capitalized terms used but not defined in this Note will have the meanings given to such terms in the Loan Agreement.

Address for Payment. All payments due under this Note will be payable at c/o KeyBank Real Estate Capital, P.O. Box 145404, Cincinnati, Ohio 45250, or such other place as may be designated by Notice to Borrower from or on behalf of Lender.

Payments.

(a)

Interest will accrue on the outstanding principal balance of this Note at the Floating Interest Rate, subject to the provisions of Section 8 of this Note.

(b)

Interest under this Note will be computed, payable and allocated on the basis of an actual/360 interest calculation schedule (interest is payable for the actual number of days in each month, and each month’s interest is calculated by multiplying the unpaid principal amount of this Note as of the first day of the month for which interest is being calculated by the applicable Floating Interest Rate, dividing the product by 360, and multiplying the quotient by the number of days in the month for which interest is being calculated). For convenience in determining the amount of a monthly installment of principal and interest under this Note, Lender will use a 30/360 interest calculation payment schedule (each year is treated as consisting of twelve 30-day months). However, as provided above, the portion of the monthly installment actually payable as and allocated to interest will be based upon an actual/360 interest calculation schedule, and the amount of each installment attributable to principal and the amount attributable to interest will vary based upon the number of days in the month for which such installment is paid. Each monthly payment of principal and interest will first be applied to pay in full interest due, and the balance of the monthly payment paid by Borrower will be credited to principal.

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(c)

Unless disbursement of principal is made by Lender to Borrower on the first day of a calendar month, interest for the period beginning on the date of disbursement and ending on and including the last day of such calendar month will be payable by Borrower simultaneously with the execution of this Note. If disbursement of principal is made by Lender to Borrower on the first day of a calendar month, then no payment will be due from Borrower at the time of the execution of this Note. The Installment Due Date for the first monthly installment payment under Section 3(d) of interest-only or principal and interest, as applicable, will be the First Installment Due Date set forth in Section 1(a) of this Note. Except as provided in this Section 3(c) and Section 10, accrued interest will be payable in arrears.

(d)

(i)

Beginning on the First Installment Due Date, and continuing until and including the Installment Due Date immediately prior to the First Principal and Interest Installment Due Date, accrued interest-only will be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar month. The amount of the monthly installment of interest-only payable pursuant to this Section 3(d)(i) on an Installment Due Date will equal the product of (A) annual interest on the unpaid principal balance of this Note as of the first day of the Interest Adjustment Period immediately preceding the Installment Due Date at the Floating Interest Rate in effect for such Interest Adjustment Period, divided by 360, multiplied by (B) the number of days in such Interest Adjustment Period.

(ii)

Beginning on the First Principal and Interest Installment Due Date, and continuing until and including the monthly installment due on the Maturity Date, principal and accrued interest will be payable by Borrower in consecutive monthly installments due and payable on the first day of each calendar month. The amount of the monthly installment of principal and interest payable pursuant to this Section 3(d)(ii) on an Installment Due Date will be calculated so as to equal the monthly payment amount which would be payable on the Installment Due Date as if the unpaid principal balance of this Note as of the first day of the Interest Adjustment Period immediately preceding the Installment Due Date was to be fully amortized, together with interest thereon at the Floating Interest Rate in effect for such Interest Adjustment Period, in equal consecutive monthly payments paid on the first day of each calendar month over the Remaining Amortization Period.

(e)

Reserved.

(f)

Reserved.

(g)

Reserved.

(h)

All remaining Indebtedness, including all principal and interest, will be due and payable by Borrower on the Maturity Date.

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(i)

Lender will provide Borrower with Notice, given in the manner specified in the Loan Agreement, of the amount of each monthly installment due under this Note. However, if Lender has not provided Borrower with prior Notice of the monthly payment due on any Installment Due Date, then Borrower will pay on that Installment Due Date an amount equal to the monthly installment payment for which Borrower last received Notice. If Lender at any time determines that Borrower has paid one or more monthly installments in an incorrect amount because of the operation of the preceding sentence, or because Lender has miscalculated the Floating Interest Rate or has otherwise miscalculated the amount of any monthly installment, then Lender will give Notice to Borrower of such determination. If such determination discloses that Borrower has paid less than the full amount due for the period for which the determination was made, Borrower, within 30 calendar days after receipt of the Notice from Lender, will pay to Lender the full amount of the deficiency. If such determination discloses that Borrower has paid more than the full amount due for the period for which the determination was made, then the amount of the overpayment will be credited to the next installment(s) of interest only or principal and interest, as applicable, due under this Note (or, if an Event of Default has occurred and is continuing, such overpayment will be credited against any amount owing by Borrower to Lender).

(j)

All payments under this Note must be made in immediately available U.S. funds.

(k)

Any regularly scheduled monthly installment of interest only or principal and interest payable pursuant to this Section 3 that is received by Lender before the date it is due will be deemed to have been received on the due date for the purpose of calculating interest due.

(l)

Any accrued interest remaining past due for 30 days or more, at Lender’s discretion, may be added to and become part of the unpaid principal balance of this Note and any reference to “accrued interest” will refer to accrued interest which has not become part of the unpaid principal balance. Any amount added to principal pursuant to the Loan Documents will bear interest at the applicable rate or rates specified in this Note and will be payable with such interest upon demand by Lender and absent such demand, as provided in this Note for the payment of principal and interest.

(m)

In accordance with Section 16, interest charged under this Note cannot exceed the Maximum Interest Rate. If the Floating Interest Rate at any time exceeds the Maximum Interest Rate, resulting in the charging of interest hereunder to be limited to the Maximum Interest Rate, then any subsequent reduction in the Floating Interest Rate will not reduce the rate at which interest under this Note accrues below the Maximum Interest Rate until the total amount of interest accrued hereunder equals the amount of interest which would have accrued had the Floating Interest Rate at all times been in effect.

(n)

Reserved.

Application of Partial Payments. If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, Lender may apply the amount received to amounts then due and payable in any manner and in any order determined by Lender, in Lender’s discretion. Borrower agrees that neither Lender’s acceptance of a payment from Borrower in an amount that is less than all amounts then due and payable nor Lender’s application of such payment will constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction.

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Security. The Indebtedness is secured by, among other things, the Security Instrument, and reference is made to the Security Instrument and the Loan Agreement for other rights with respect to collateral for the Indebtedness.

Acceleration. If an Event of Default has occurred and is continuing, the entire unpaid principal balance, any accrued interest, any prepayment premium payable under Section 10, and all other amounts payable under this Note and any other Loan Document, will at once become due and payable, at the option of Lender, without any prior Notice to Borrower (except if notice is required by applicable law, then after such notice). Lender may exercise this option to accelerate regardless of any prior forbearance. For purposes of exercising such option, Lender will calculate the prepayment premium as if prepayment occurred on the date of acceleration. If prepayment occurs thereafter, Lender will recalculate the prepayment premium as of the actual prepayment date.

Late Charge.

(a)

If any monthly installment of interest or principal and interest or other amount payable under this Note or under the Loan Agreement or any other Loan Document is not received in full by Lender within 10 days after the installment or other amount is due, counting from and including the date such installment or other amount is due (unless applicable law requires a longer period of time before a late charge may be imposed, in which event such longer period will be substituted), Borrower must pay to Lender, immediately and without demand by Lender, a late charge equal to 5% of such installment or other amount due (unless applicable law requires a lesser amount be charged, in which event such lesser amount will be substituted). If the Loan is not fully amortizing, the late charge will not be due on the final payment of principal owed on the Maturity Date if such payment is not timely made.

(b)

Borrower acknowledges that its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan and that it is extremely difficult and impractical to determine those additional expenses. Borrower agrees that the late charge payable pursuant to this Section represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional expenses Lender will incur by reason of such late payment. The late charge is payable in addition to, and not in lieu of, any interest payable at the Default Rate pursuant to Section 8.

Default Rate.

(a)

So long as (i) any monthly installment under this Note remains past due for 30 days or more or (ii) any other Event of Default has occurred and is continuing, then notwithstanding anything in Section 3 of this Note to the contrary, interest under this Note will accrue on the unpaid principal balance from the Installment Due Date of the first such unpaid monthly installment or the occurrence of such other Event of Default, as applicable, at the Default Rate.

(b)

From and after the Maturity Date, the unpaid principal balance will continue to bear interest at the Default Rate until and including the date on which the entire principal balance is paid in full.

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(c)

Borrower acknowledges that (i) its failure to make timely payments will cause Lender to incur additional expenses in servicing and processing the Loan, (ii) during the time that any monthly installment under this Note is delinquent for 30 days or more, Lender will incur additional costs and expenses arising from its loss of the use of the money due and from the adverse impact on Lender’s ability to meet its other obligations and to take advantage of other investment opportunities, and (iii) it is extremely difficult and impractical to determine those additional costs and expenses. Borrower also acknowledges that, during the time that any monthly installment under this Note is delinquent for 30 days or more or any other Event of Default has occurred and is continuing, Lender’s risk of nonpayment of this Note will be materially increased and Lender is entitled to be compensated for such increased risk. Borrower agrees that the increase in the rate of interest payable under this Note to the Default Rate represents a fair and reasonable estimate, taking into account all circumstances existing on the date of this Note, of the additional costs and expenses Lender will incur by reason of the Borrower’s delinquent payment and the additional compensation Lender is entitled to receive for the increased risks of nonpayment associated with a delinquent loan.

Limits on Personal Liability.

(a)

Except as otherwise provided in this Section 9, Borrower will have no personal liability under this Note, the Loan Agreement or any other Loan Document for the repayment of the Indebtedness or for the performance of or compliance with any other obligations of Borrower under the Loan Documents and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations will be Lender’s exercise of its rights and remedies with respect to the Mortgaged Property and to any other collateral held by Lender as security for the Indebtedness. This limitation on Borrower’s liability will not limit or impair Lender’s enforcement of its rights against any Guarantor of the Indebtedness or any Guarantor of any other obligations of Borrower.

(b)

Borrower will be personally liable to Lender for the amount of the Base Recourse, plus any other amounts for which Borrower has personal liability under this Section 9.

(c)

In addition to the Base Recourse, Borrower will be personally liable to Lender for the repayment of a further portion of the Indebtedness equal to any loss or damage suffered by Lender as a result of the occurrence of any of the following events:

(i)

Borrower fails to pay to Lender upon demand after an Event of Default all Rents to which Lender is entitled under Section 3 of the Security Instrument and the amount of all security deposits collected by Borrower from tenants then in residence. However, Borrower will not be personally liable for any failure described in this Section 9(c)(i) if Borrower is unable to pay to Lender all Rents and security deposits as required by the Security Instrument because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

(ii)

Borrower fails to apply all Insurance proceeds and Condemnation proceeds as required by the Loan Agreement. However, Borrower will not be personally liable for any failure described in this Section 9(c)(ii) if Borrower is unable to apply Insurance or Condemnation proceeds as required by the Loan Agreement because of a valid order issued in a bankruptcy, receivership, or similar judicial proceeding.

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(iii)

Either of the following occurs:

(A)

Borrower fails to deliver the statements, schedules and reports required by Section 6.07 of the Loan Agreement and Lender exercises its right to audit those statements, schedules and reports.

(B)

If an Event of Default has occurred and is continuing, Borrower fails to deliver all books and records relating to the Mortgaged Property or its operation in accordance with the provisions of Section 6.07 of the Loan Agreement.

(iv)

Borrower fails to pay when due in accordance with the terms of the Loan Agreement the amount of any item below marked “Deferred”; provided however, that if no item is marked “Deferred”, this Section 9(c)(iv) will be of no force or effect.

	[Deferred]	Property Insurance premiums or other Insurance premiums
	[Collect]	Taxes or payments in lieu of taxes (PILOT)
	[Deferred]	water and sewer charges (that could become a lien on the Mortgaged Property)
	[N/A]	Ground Rents
	[Deferred]	assessments or other charges (that could become a lien on the Mortgaged Property), including home owner association dues

(v)

Borrower engages in any willful act of material waste of the Mortgaged Property.

(vi)

(vii)

Any of the following Transfers occurs:

(A)

Any Person that is not an Affiliate creates a mechanic’s lien or other involuntary lien or encumbrance against the Mortgaged Property and Borrower has not complied with the provisions of the Loan Agreement.

(B)

A Transfer of property by devise, descent or operation of law occurs upon the death of a natural person and such Transfer does not meet the requirements set forth in the Loan Agreement.

(C)

Borrower grants an easement that does not meet the requirements set forth in the Loan Agreement.

(D)

Borrower executes a Lease that does not meet the requirements set forth in the Loan Agreement.

(viii)

Reserved.

(ix)

through (xviii) are Reserved.

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(xix)

Borrower fails to complete any Property Improvement Alterations that have been commenced in accordance with Section 6.09(e)(v) of the Loan Agreement.

(xx)

Reserved.

(d)

In addition to the Base Recourse, Borrower will be personally liable to Lender for all of the following:

(i)

Borrower will be personally liable for the performance of all of Borrower’s obligations under Sections 6.12 and 10.02(b) of the Loan Agreement (relating to environmental matters).

(ii)

Borrower will be personally liable for the costs of any audit under Section 6.07 of the Loan Agreement.

(iii)

Borrower will be personally liable for any costs and expenses incurred by Lender in connection with the collection of any amount for which Borrower is personally liable under this Section 9, including Attorneys’ Fees and Costs and the costs of conducting any independent audit of Borrower’s books and records to determine the amount for which Borrower has personal liability.

(iv)

through (viii) are Reserved.

(ix)

Borrower will be personally liable for any fees, costs, or expenses incurred by Lender in connection with Borrower’s termination of any agreement for the provision of services to or in connection with the Mortgaged Property, including cable, internet, garbage collection, landscaping, security, and cleaning.

(x)

Reserved.

(e)

All payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Loan Agreement and the other Loan Documents will be applied first to the portion of the Indebtedness for which Borrower has no personal liability.

(f)

Notwithstanding the Base Recourse, Borrower will become personally liable to Lender for the repayment of all of the Indebtedness upon the occurrence of any of the following Events of Default:

(i)

Borrower fails to comply with Section 6.13(a)(i) or (ii) of the Loan Agreement or any SPE Equity Owner fails to comply with Section 6.13(b)(i) or (ii) of the Loan Agreement.

(ii)

Borrower fails to comply with any provision of Section 6.13(a)(iii) through (xxvi) of the Loan Agreement or any SPE Equity Owner fails to comply with any provision of Section 6.13(b)(iii) through (v) of the Loan Agreement and a court of competent jurisdiction holds or determines that such failure or combination of failures is the basis, in whole or in part, for the substantive consolidation of the assets and liabilities of Borrower or any SPE Equity Owner with the assets and liabilities of a debtor pursuant to Title 11 of the Bankruptcy Code.

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(iii)

A Transfer that is an Event of Default under Section 7.02 of the Loan Agreement occurs other than a Transfer set forth in Section 9(c)(vii) above (for which Borrower will have personal liability for Lender’s loss or damage); provided, however, that Borrower will not have any personal liability for a Transfer consisting solely of the involuntary removal or involuntary withdrawal of a general partner in a limited partnership or a manager in a limited liability company.

(iv)

There was fraud or written material misrepresentation by Borrower or any officer, director, partner, member, or employee of Borrower in connection with the application for or creation of the Indebtedness or there is fraud in connection with any request for any action or consent by Lender.

(v)

Borrower or any SPE Equity Owner voluntarily files for bankruptcy protection under the Bankruptcy Code.

(vi)

Borrower or any SPE Equity Owner voluntarily becomes subject to any reorganization, receivership, insolvency proceeding, or other similar proceeding pursuant to any other federal or state law affecting debtor and creditor rights.

(vii)

The Mortgaged Property or any part of the Mortgaged Property becomes an asset in a voluntary bankruptcy or becomes subject to any voluntary reorganization, receivership, insolvency proceeding, or other similar voluntary proceeding pursuant to any other federal or state law affecting debtor and creditor rights.

(viii)

An order of relief is entered against Borrower or any SPE Equity Owner pursuant to the Bankruptcy Code or other federal or state law affecting debtor and creditor rights in any involuntary bankruptcy proceeding initiated or joined in by a Related Party.

(ix)

An involuntary bankruptcy or other involuntary insolvency proceeding is commenced against Borrower or any SPE Equity Owner (by a party other than Lender) but only if Borrower or such SPE Equity Owner has failed to use commercially reasonable efforts to dismiss such proceeding or has consented to such proceeding. “Commercially reasonable efforts” will not require any direct or indirect interest holders in Borrower or any SPE Equity Owner to contribute or cause the contribution of additional capital to Borrower or any SPE Equity Owner.

(x)

through (xiii) are Reserved.

(g)

For purposes of Sections 9(f) and (h), the term “ Related Party ” will include all of the following:

(i)

Borrower, any Guarantor, or any SPE Equity Owner.

(ii)

Any Person that holds, directly or indirectly, any ownership interest (including any shareholder, member or partner) in Borrower, any Guarantor, or any SPE Equity Owner or any Person that has a right to manage Borrower, any Guarantor, or any SPE Equity Owner.

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(iii)

Any Person in which Borrower, any Guarantor, or any SPE Equity Owner has any ownership interest (direct or indirect) or right to manage.

(iv)

Any Person in which any partner, shareholder, or member of Borrower, any Guarantor, or any SPE Equity Owner has an ownership interest or right to manage.

(v)

Any Person in which any Person holding an interest in Borrower, any Guarantor, or any SPE Equity Owner also has any ownership interest.

(vi)

Any creditor (as defined in the Bankruptcy Code) of Borrower that is related by blood, marriage or adoption to Borrower, any Guarantor, or any SPE Equity Owner.

(vii)

Any creditor (as defined in the Bankruptcy Code) of Borrower that is related to any partner, shareholder or member of, or any other Person holding an interest in, Borrower, any Guarantor, or any SPE Equity Owner.

(h)

If Borrower, any Guarantor, any SPE Equity Owner, or any Related Party has solicited creditors to initiate or participate in any proceeding referred to in Section 9(f), regardless of whether any of the creditors solicited actually initiates or participates in the proceeding, then such proceeding will be considered as having been initiated by a Related Party.

(i)

To the extent that Borrower has personal liability under this Section 9, Lender may, to the fullest extent permitted by applicable law, exercise its rights against Borrower personally without regard to whether Lender has exercised any rights against the Mortgaged Property or any other security, or pursued any rights against any Guarantor, or pursued any other rights available to Lender under this Note, the Loan Agreement, any other Loan Document, or applicable law. To the fullest extent permitted by applicable law, in any action to enforce Borrower’s personal liability under this Section 9, Borrower waives any right to set off the value of the Mortgaged Property against such personal liability.

10.

Voluntary and Involuntary Prepayments.

(a)

Any receipt by Lender of principal due under this Note prior to the Maturity Date, other than principal required to be paid in monthly installments pursuant to Section 3, constitutes a prepayment of principal under this Note. Without limiting the foregoing, any application by Lender, prior to the Maturity Date, of any proceeds of collateral or other security to the repayment of any portion of the unpaid principal balance of this Note constitutes a prepayment under this Note.

(b)

Borrower may not voluntarily prepay any portion of the principal balance of this Note during the Lockout Period, if a Lockout Period is applicable to this Note. However, if any portion of the principal balance of this Note is prepaid during the Lockout Period by reason of the application by Lender of any proceeds of collateral or other security to any portion of the unpaid principal balance of this Note or following a determination that the prohibition on voluntary prepayments during the Lockout Period is in contravention of applicable law, then Borrower must also pay to Lender upon demand by Lender, a prepayment premium equal to 5% of the amount of principal being prepaid.

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(c)

Following the end of the Lockout Period, Borrower may voluntarily prepay all of the unpaid principal balance of this Note on an Installment Due Date so long as Borrower designates the date for such prepayment in a Notice from Borrower to Lender given at least 30 days prior to the date of such prepayment. If an Installment Due Date (as defined in Section 1(a)) falls on a day which is not a Business Day, then with respect to payments made under this Section 10 only, the term “Installment Due Date” will mean the Business Day immediately preceding the scheduled Installment Due Date.

(d)

Notwithstanding Section 10(c), Borrower may voluntarily prepay all of the unpaid principal balance of this Note on a Business Day other than an Installment Due Date if Borrower provides Lender with the Notice set forth in Section 10(c) and meets the other requirements set forth in this Section 10(d). Borrower acknowledges that Lender has agreed that Borrower may prepay principal on a Business Day other than an Installment Due Date only because Lender will deem any prepayment received by Lender on any day other than an Installment Due Date to have been received on the Installment Due Date immediately following such prepayment and Borrower must pay to Lender all interest that would have been due if the prepayment had actually been made on the Installment Due Date immediately following such prepayment.

(e)

Unless otherwise expressly provided in the Loan Documents, Borrower may not voluntarily prepay less than all of the unpaid principal balance of this Note. In order to voluntarily prepay all or any part of the principal of this Note, Borrower must also pay to Lender, together with the amount of principal being prepaid, (i) all accrued and unpaid interest due under this Note, plus (ii) all other sums due to Lender at the time of such prepayment, plus (iii) any prepayment premium calculated pursuant to Section 10(f).

(f)

Except as provided in Section 10(g), a prepayment premium will be due and payable by Borrower in connection with any prepayment of principal under this Note during the Prepayment Premium Period. The prepayment premium will be 1.0% of the amount of principal being prepaid for any prepayments occurring during the Prepayment Premium Period but after the Lockout Period (if applicable).

(g)

Notwithstanding any other provision of this Section 10, no prepayment premium will be payable with respect to any of the following:

(i)

Any prepayment made during the Window Period.

(ii)

Any prepayment occurring as a result of the application of any Insurance proceeds or Condemnation award.

(iii)

Any prepayment required under the terms of the Loan Agreement in connection with a Condemnation proceeding.

(iv)

Any prepayment of the entire principal balance of this Note that occurs on or after the 12 ^th Installment Due Date under this Note with the proceeds of a fixed interest rate mortgage loan that is the subject of a binding commitment for purchase between Freddie Mac and a Freddie Mac-approved Program Plus â Seller/Servicer.

(h)

Unless Lender agrees otherwise in writing, a permitted or required prepayment of less than the unpaid principal balance of this Note will not extend or postpone the due date of any subsequent monthly installments or change the amount of such installments.

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(i)

Borrower recognizes that any prepayment of any of the unpaid principal balance of this Note, whether voluntary or involuntary or resulting from an Event of Default by Borrower, will result in Lender’s incurring loss, including reinvestment loss, additional expense and frustration or impairment of Lender’s ability to meet its commitments to third parties. Borrower agrees to pay to Lender upon demand damages for the detriment caused by any prepayment, and agrees that it is extremely difficult and impractical to ascertain the extent of such damages. Borrower therefore acknowledges and agrees that the formula for calculating prepayment premiums set forth in this Note represents a reasonable estimate of the damages Lender will incur because of a prepayment. Borrower further acknowledges that any lockout and prepayment premium provisions of this Note are a material part of the consideration for the Loan, and that the terms of this Note are in other respects more favorable to Borrower as a result of the Borrower’s voluntary agreement to the lockout and prepayment premium provisions.

(j)

Reserved.

(k)

Reserved.

11.

Reserved.

12.

Reserved.

13.

Costs and Expenses. To the fullest extent allowed by applicable law, Borrower must pay all expenses and costs, including Attorneys’ Fees and Costs incurred by Lender as a result of any default under this Note or in connection with efforts to collect any amount due under this Note, or to enforce the provisions of any of the other Loan Documents, including those incurred in post-judgment collection efforts and in any bankruptcy proceeding (including any action for relief from the automatic stay of any bankruptcy proceeding) or judicial or non-judicial foreclosure proceeding. Borrower acknowledges and agrees that, in connection with each request by Borrower under this Note or any Loan Document, Borrower must pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees charged by the Rating Agencies (if applicable), regardless of whether the matter is approved, denied or withdrawn.

14.

Forbearance. Any forbearance by Lender in exercising any right or remedy under this Note, the Loan Agreement, or any other Loan Document, or otherwise afforded by applicable law, will not be a waiver of or preclude the exercise of that or any other right or remedy. The acceptance by Lender of any payment after the due date of such payment, or in an amount which is less than the required payment, will not be a waiver of Lender’s right to require prompt payment when due of all other payments or to exercise any right or remedy with respect to any failure to make prompt payment. Enforcement by Lender of any security for Borrower’s obligations under this Note will not constitute an election by Lender of remedies so as to preclude the exercise of any other right or remedy available to Lender.

15.

Waivers. Borrower and all endorsers and Guarantors of this Note and all other third party obligors waive presentment, demand, notice of dishonor, protest, notice of acceleration, notice of intent to demand or accelerate payment or maturity, presentment for payment, notice of nonpayment, grace, and diligence in collecting the Indebtedness.

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16.

Loan Charges. Neither this Note nor any of the other Loan Documents will be construed to create a contract for the use, forbearance, or detention of money requiring payment of interest at a rate greater than the Maximum Interest Rate. If any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower in connection with the Loan is interpreted so that any interest or other charge provided for in any Loan Document, whether considered separately or together with other charges provided for in any other Loan Document, violates that law, and Borrower is entitled to the benefit of that law, that interest or charge is hereby reduced to the extent necessary to eliminate that violation. The amounts, if any, previously paid to Lender in excess of the permitted amounts will be applied by Lender to reduce the unpaid principal balance of this Note. For the purpose of determining whether any applicable law limiting the amount of interest or other charges permitted to be collected from Borrower has been violated, all Indebtedness that constitutes interest, as well as all other charges made in connection with the Indebtedness that constitute interest, will be deemed to be allocated and spread ratably over the stated term of this Note. Unless otherwise required by applicable law, such allocation and spreading will be effected in such a manner that the rate of interest so computed is uniform throughout the stated term of this Note.

17.

Commercial Purpose. Borrower represents that Borrower is incurring the Indebtedness solely for the purpose of carrying on a business or commercial enterprise, and not for personal, family, household, or agricultural purposes.

18.

Counting of Days. Any reference in this Note to a period of “days” means calendar days, not Business Days, except where otherwise specifically provided.

19.

Governing Law. This Note will be governed by the law of the Property Jurisdiction.

20.

Captions. The captions of the Sections of this Note are for convenience only and will be disregarded in construing this Note.

21.

Notices; Written Modifications.

(a)

All Notices, demands, and other communications required or permitted to be given pursuant to this Note will be given in accordance with Section 11.03 of the Loan Agreement.

(b)

Any modification or amendment to this Note will be ineffective unless in writing and signed by the party sought to be charged with such modification or amendment; provided, however, in the event of a Transfer under the terms of the Loan Agreement that requires Lender’s consent, any or some or all of the Modifications to Multifamily Note set forth in Exhibit A to this Note may be modified or rendered void by Lender at Lender’s option, by Notice to Borrower and the transferee, as a condition of Lender’s consent.

22.

Consent to Jurisdiction and Venue. Borrower agrees that any controversy arising under or in relation to this Note may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that will arise under or in relation to this Note. Borrower irrevocably consents to service, jurisdiction, and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence, or otherwise. However, nothing in this Note is intended to limit any right that Lender may have to bring any suit, action, or proceeding relating to matters arising under this Note in any court of any other jurisdiction.

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23.

WAIVER OF TRIAL BY JURY . BORROWER AND LENDER EACH (a) AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS NOTE OR THE RELATIONSHIP BETWEEN THE PARTIES AS LENDER AND BORROWER THAT IS TRIABLE OF RIGHT BY A JURY AND (b) WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

24.

State-Specific Provisions. State-specific provisions, if any, are included on Schedule 1 to this Note.

25.

Attached Riders. The following Riders are attached to this Note:

Legal Non-Conforming Property

26.

Attached Schedules and Exhibits. The following Schedules and Exhibits, if marked with an “X” in the space provided, are attached to this Note:

Schedule 1 State Specific Provisions for Multifamily Note

Exhibit A Modifications to Multifamily Note

27.

Reserved.

28.

Reserved.

29.

Reserved.

30.

Reserved.

IN WITNESS WHEREOF, and in consideration of the Lender’s agreement to lend Borrower the principal amount set forth above, Borrower has signed and delivered this Note under seal or has caused this Note to be signed and delivered under seal by its duly authorized representative. Borrower intends that this Note will be deemed to be signed and delivered as a sealed instrument.

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BR CARROLL GLENRIDGE, LLC , a Delaware limited liability company

By:	/s/ Jordan Ruddy	(SEAL)
	Jordan Ruddy
	Authorized Signatory

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PAY TO THE ORDER OF FEDERAL HOME LOAN
MORTGAGE CORPORATION, WITHOUT RECOURSE.

KEYBANK NATIONAL ASSOCIATION , a
national banking association

By:	/s/ Tonya E. Barnes	(SEAL)
	Tonya E. Barnes
	Vice President

Freddie Mac Loan No. 708657427

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RIDER TO MULTIFAMILY NOTE

LEGAL NON-CONFORMING PROPERTY

(Revised 9-4-2015)

The following changes are made to the Note which precedes this Rider:

Section 9(c)(x) is deleted and replaced with the following:

(x)

A casualty occurs affecting the Mortgaged Property and which results in loss or damage to Lender because of either of the following:

(A)

(1) the Mortgaged Property is legally non-conforming under the applicable zoning laws, ordinances and/or regulations in the Property Jurisdiction (“ Zoning Code ”), (2) the affected Improvements cannot be rebuilt to their pre-casualty condition under the terms of the Zoning Code, and (3) the Property Insurance proceeds available to Lender under the terms of the Loan Agreement are insufficient to repay the Indebtedness in full.

(B)

Borrower fails to commence and diligently pursue completion of any Restoration within the time frame required by the Zoning Code and any permits issued pursuant to the Zoning Code which are necessary to allow the Restoration to the pre-casualty condition described in Section 9(c)(x)(A)(2).

Rider to Multifamily

Note Legal Non-Conforming Property

SCHEDULE 1

STATE SPECIFIC PROVISIONS FOR MULTIFAMILY NOTE

Property Jurisdiction	State-Specific Provision(s)
Georgia	None

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EXHIBIT A

MODIFICATIONS TO MULTIFAMILY NOTE

The following modifications are made to the text of the Note that precedes this Exhibit.

Section 9(a) is revised to read as follows:

(a)

Except as otherwise provided in this Section 9, neither Borrower nor any of its direct or indirect owners (with the exception of any Guarantor pursuant to any Guaranty of even date herewith, if any) will have no any personal liability under this Note, the Loan Agreement or any other Loan Document for the repayment of the Indebtedness or for the performance of or compliance with any other obligations of Borrower under the Loan Documents and Lender’s only recourse for the satisfaction of the Indebtedness and the performance of such obligations will be Lender’s exercise of its rights and remedies with respect to the Mortgaged Property and to any other collateral held by Lender as security for the Indebtedness. This limitation on Borrower’s liability will not limit or impair Lender’s enforcement of its rights against any Guarantor of the Indebtedness or any Guarantor of any other obligations of Borrower.

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Exhibit 10.7

Prepared by, and after recording

return to:

S.R. Sidarth, Esquire

Troutman Sanders LLP

P.O. Box 1122

Richmond, VA 23218

MULTIFAMILY DEED TO SECURE DEBT,

ASSIGNMENT OF RENTS

AND SECURITY AGREEMENT

GEORGIA

(Revised 3-1-2014)

Exhibit 10.7

Freddie Mac Loan No. 708657427

Nevadan Apartments

MULTIFAMILY DEED TO SECURE DEBT,

ASSIGNMENT OF RENTS

AND SECURITY AGREEMENT

GEORGIA

(Revised 3-1-2014)

THIS MULTIFAMILY DEED TO SECURE DEBT, ASSIGNMENT OF RENTS AND SECURITY AGREEMENT (“ Instrument ”) is made to be effective as of the 13th day of October, 2016, between BR CARROLL GLENRIDGE, LLC , a limited liability company organized and existing under the laws of Delaware, whose address is c/o Carroll Organization, LLC, 3340 Peachtree Road, NE, Suite 2250, Atlanta, Georgia 30326, as grantor (“ Borrower ”), and KEYBANK NATIONAL ASSOCIATION , a national banking association, whose address is c/o KeyBank Real Estate Capital - Servicing Department, 11501 Outlook Street, Suite 300, Overland Park, Kansas 66211, Mailcode: KS-01-11-0501, Attn: Servicing Manager, as grantee (“ Lender ”). Borrower’s organizational identification number, if applicable, is 6113182.

RECITAL

Borrower is indebted to Lender in the principal amount of $48,431,000.00, as evidenced by Borrower’s Multifamily Note payable to Lender, dated as of the date of this Instrument, and maturing on November 1, 2023 (“ Maturity Date ”).

AGREEMENT

TO SECURE TO LENDER the repayment of the Indebtedness, and all renewals, extensions and modifications of the Indebtedness, and the performance of the covenants and agreements of Borrower contained in the Loan Documents, Borrower grants, conveys and assigns to Lender and Lender’s successors and assigns, with power of sale, the Mortgaged Property, including the Land located in Fulton County, State of Georgia and described in Exhibit A attached to this Instrument. To have and to hold the Mortgaged Property unto Lender and Lender’s successors and assigns forever. As used in this Instrument, the term “Mortgaged Property” is synonymous with the term “Secured Property,” and the term “Lien” is synonymous with the term “security interest and title.”

Borrower covenants that Borrower is lawfully seized of the Mortgaged Property and has the right, power and authority to grant, convey and assign the Mortgaged Property, that the Mortgaged Property is unencumbered, except as shown on the schedule of exceptions to coverage in the title policy issued to and accepted by Lender contemporaneously with the execution and recordation of this Instrument and insuring Lender’s interest in the Mortgaged Property (the “ Schedule of Title Exceptions ”). Borrower covenants that Borrower will warrant and defend generally the title to the Mortgaged Property against all claims and demands, subject to any easements and restrictions listed in the Schedule of Title Exceptions.

Georgia

Multifamily Deed to Secure Debt, Assignment of Rents

and Security Agreement

UNIFORM COVENANTS

(Revised 7-17-2014)

Covenants. In consideration of the mutual promises set forth in this Instrument, Borrower and Lender covenant and agree as follows:

Definitions. The following terms, when used in this Instrument (including when used in the above recitals), will have the following meanings and any capitalized term not specifically defined in this Instrument will have the meaning ascribed to that term in the Loan Agreement:

“ Attorneys’ Fees and Costs ” means (a) fees and out-of-pocket costs of Lender’s and Loan Servicer’s attorneys, as applicable, including costs of Lender’s and Loan Servicer’s in-house counsel, support staff costs, costs of preparing for litigation, computerized research, telephone and facsimile transmission expenses, mileage, deposition costs, postage, duplicating, process service, videotaping and similar costs and expenses; (b) costs and fees of expert witnesses, including appraisers; (c) investigatory fees; and (d) the costs for any opinion required by Lender pursuant to the terms of the Loan Documents.

“ Borrower ” means all Persons identified as “Borrower” in the first paragraph of this Instrument, together with their successors and assigns.

“ Business Day ” means any day other than a Saturday, a Sunday or any other day on which Lender or the national banking associations are not open for business.

“ Event of Default ” means the occurrence of any event described in Section 8.

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“ Ground Lease ” means the lease described in the Loan Agreement pursuant to which Borrower leases the Land, as such lease may from time to time be amended, modified, supplemented, renewed and extended.

“ Improvements ” means the buildings, structures, improvements now constructed or at any time in the future constructed or placed upon the Land, including any future alterations, replacements and additions.

“ Indebtedness ” means the principal of, interest at the fixed or variable rate set forth in the Note on, and all other amounts due at any time under, the Note, this Instrument or any other Loan Document, including prepayment premiums, late charges, default interest, and advances as provided in Section 7 to protect the security of this Instrument.

“ Land ” means the land described in Exhibit A .

“ Leasehold Estate ” means Borrower’s interest in the Land and any other real property leased by Borrower pursuant to the Ground Lease, if applicable, including all of the following:

(a)

All rights of Borrower to renew or extend the term of the Ground Lease.

(b)

All amounts deposited by Borrower with Ground Lessor under the Ground Lease.

(c)

Borrower’s right or privilege to terminate, cancel, surrender, modify or amend the Ground Lease.

(d)

All other options, privileges and rights granted and demised to Borrower under the Ground Lease and all appurtenances with respect to the Ground Lease.

“ Lender ” means the entity identified as “Lender” in the first paragraph of this Instrument, or any subsequent holder of the Note.

“ Loan Agreement ” means the Multifamily Loan and Security Agreement executed by Borrower in favor of Lender and dated as of the date of this Instrument, as such agreement may be amended from time to time.

“ Loan Documents ” means the Note, this Instrument, the Loan Agreement, all guaranties, all indemnity agreements, all collateral agreements, UCC filings, O&M Programs, the MMP and any other documents now or in the future executed by Borrower, any guarantor or any other Person in connection with the loan evidenced by the Note, as such documents may be amended from time to time.

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“ Loan Servicer ” means the entity that from time to time is designated by Lender or its designee to collect payments and deposits and receive Notices under the Note, this Instrument and any other Loan Document, and otherwise to service the loan evidenced by the Note for the benefit of Lender. Unless Borrower receives Notice to the contrary, the Loan Servicer is the entity identified as “Lender” in the first paragraph of this Instrument.

“ Mortgaged Property ” means all of Borrower’s present and future right, title and interest in and to all of the following:

(a)

The Land, or, if Borrower’s interest in the Land is pursuant to a Ground Lease, the Ground Lease and the Leasehold Estate.

(b)

The Improvements.

(c)

The Fixtures.

(d)

The Personalty.

(e)

(f)

(g)

All awards, payments and other compensation made or to be made by any municipal, state or federal authority with respect to the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property, including any awards or settlements resulting from condemnation proceedings or the total or partial taking of the Land, the Improvements, the Fixtures, the Personalty or any other part of the Mortgaged Property under the power of eminent domain or otherwise and including any conveyance in lieu thereof.

(h)

(i)

All proceeds from the conversion, voluntary or involuntary, of any of the items described in subsections (a) through (h) inclusive into cash or liquidated claims, and the right to collect such proceeds.

(j)

All Rents and Leases.

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(k)

All earnings, royalties, accounts receivable, issues and profits from the Land, the Improvements or any other part of the Mortgaged Property, and all undisbursed proceeds of the loan secured by this Instrument.

(l)

All Imposition Reserve Deposits.

(m)

All refunds or rebates of Impositions by Governmental Authority or insurance company (other than refunds applicable to periods before the real property tax year in which this Instrument is dated).

(n)

All tenant security deposits which have not been forfeited by any tenant under any Lease and any bond or other security in lieu of such deposits.

(o)

All names under or by which any of the above Mortgaged Property may be operated or known, and all trademarks, trade names, and goodwill relating to any of the Mortgaged Property.

(p)

If required by the terms of Section 4.05 of the Loan Agreement, all rights under the Letter of Credit and the Proceeds, as such Proceeds may increase or decrease from time to time.

(q)

If the Note provides for interest to accrue at a floating or variable rate and there is a Cap Agreement, the Cap Collateral.

“ Note ” means the Multifamily Note (including any Amended and Restated Note, Consolidated, Amended and Restated Note, or Extended and Restated Note) executed by Borrower in favor of Lender and dated as of the date of this Instrument, including all schedules, riders, allonges and addenda, as such Multifamily Note may be amended, modified and/or restated from time to time.

“ Notice ” or “ Notices ” means all notices, demands and other communication required under the Loan Documents, provided in accordance with the requirements of Section 11.03 of the Loan Agreement.

“ Personalty ” means all of the following:

(a)

Accounts (including deposit accounts) of Borrower related to the Mortgaged Property.

(b)

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(c)

(d)

Any operating agreements relating to the Land or the Improvements.

(e)

Any surveys, plans and specifications and contracts for architectural, engineering and construction services relating to the Land or the Improvements.

(f)

(g)

Any rights of Borrower in or under letters of credit.

“ Property Jurisdiction ” means the jurisdiction in which the Land is located.

“ Rents ” means all rents (whether from residential or non-residential space), revenues and other income of the Land or the Improvements, parking fees, laundry and vending machine income and fees and charges for food, health care and other services provided at the Mortgaged Property, whether now due, past due or to become due, and deposits forfeited by tenants , and, if Borrower is a cooperative housing corporation or association, maintenance fees, charges or assessments payable by shareholders or residents under proprietary leases or occupancy agreements, whether now due, past due, or to become due .

Uniform Commercial Code Security Agreement.

(a)

This Instrument is also a security agreement under the Uniform Commercial Code for any of the Mortgaged Property which, under applicable law, may be subjected to a security interest under the Uniform Commercial Code, for the purpose of securing Borrower’s obligations under this Instrument and to further secure Borrower’s obligations under the Note, this Instrument and other Loan Documents, whether such Mortgaged Property is owned now or acquired in the future, and all products and cash and non-cash proceeds thereof (collectively, “ UCC Collateral ”), and by this Instrument, Borrower grants to Lender a security interest in the UCC Collateral. To the extent necessary under applicable law, Borrower hereby authorizes Lender to prepare and file financing statements, continuation statements and financing statement amendments in such form as Lender may require to perfect or continue the perfection of this security interest.

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(b)

Unless Borrower gives Notice to Lender within 30 days after the occurrence of any of the following, and executes and delivers to Lender modifications or supplements of this Instrument (and any financing statement which may be filed in connection with this Instrument) as Lender may require, Borrower will not (i) change its name, identity, structure or jurisdiction of organization; (ii) change the location of its place of business (or chief executive office if more than one place of business); or (iii) add to or change any location at which any of the Mortgaged Property is stored, held or located.

(c)

If an Event of Default has occurred and is continuing, Lender will have the remedies of a secured party under the Uniform Commercial Code, in addition to all remedies provided by this Instrument or existing under applicable law. In exercising any remedies, Lender may exercise its remedies against the UCC Collateral separately or together, and in any order, without in any way affecting the availability of Lender’s other remedies.

(d)

This Instrument also constitutes a financing statement with respect to any part of the Mortgaged Property that is or may become a Fixture, if permitted by applicable law.

Assignment of Rents; Appointment of Receiver; Lender in Possession.

(a)

As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all Rents.

(i)

It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Lender of all Rents and to authorize and empower Lender to collect and receive all Rents without the necessity of further action on the part of Borrower.

(ii)

Promptly upon request by Lender, Borrower agrees to execute and deliver such further assignments as Lender may from time to time require. Borrower and Lender intend this assignment of Rents to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only.

(iii)

For purposes of giving effect to this absolute assignment of Rents, and for no other purpose, Rents will not be deemed to be a part of the Mortgaged Property. However, if this present, absolute and unconditional assignment of Rents is not enforceable by its terms under the laws of the Property Jurisdiction, then the Rents will be included as a part of the Mortgaged Property and it is the intention of Borrower that in this circumstance this Instrument create and perfect a Lien on Rents in favor of Lender, which Lien will be effective as of the date of this Instrument.

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(b)

(i)

Until the occurrence of an Event of Default, Lender hereby grants to Borrower a revocable license to collect and receive all Rents, to hold all Rents in trust for the benefit of Lender and to apply all Rents to pay the installments of interest and principal then due and payable under the Note and the other amounts then due and payable under the other Loan Documents, including Imposition Reserve Deposits, and to pay the current costs and expenses of managing, operating and maintaining the Mortgaged Property, including utilities, Taxes and insurance premiums (to the extent not included in Imposition Reserve Deposits), tenant improvements and other capital expenditures.

(ii)

So long as no Event of Default has occurred and is continuing, the Rents remaining after application pursuant to the preceding sentence may be retained by Borrower free and clear of, and released from, Lender’s rights with respect to Rents under this Instrument.

(iii)

After the occurrence of an Event of Default, and during the continuance of such Event of Default, Borrower authorizes Lender to collect, sue for and compromise Rents and directs each tenant of the Mortgaged Property to pay all Rents to, or as directed by, Lender. From and after the occurrence of an Event of Default, and during the continuance of such Event of Default, and without the necessity of Lender entering upon and taking and maintaining control of the Mortgaged Property directly, or by a receiver, Borrower’s license to collect Rents will automatically terminate and Lender will without Notice be entitled to all Rents as they become due and payable, including Rents then due and unpaid. Borrower will pay to Lender upon demand all Rents to which Lender is entitled.

(iv)

At any time on or after the date of Lender’s demand for Rents, Lender may give, and Borrower hereby irrevocably authorizes Lender to give, notice to all tenants of the Mortgaged Property instructing them to pay all Rents to Lender. No tenant will be obligated to inquire further as to the occurrence or continuance of an Event of Default. No tenant will be obligated to pay to Borrower any amounts which are actually paid to Lender in response to such a notice. Any such notice by Lender will be delivered to each tenant personally, by mail or by delivering such demand to each rental unit. Borrower will not interfere with and will cooperate with Lender’s collection of such Rents.

(c)

If an Event of Default has occurred and is continuing, then Lender will have each of the following rights and may take any of the following actions:

(i)

Lender may, regardless of the adequacy of Lender’s security or the solvency of Borrower and even in the absence of waste, enter upon and take and maintain full control of the Mortgaged Property in order to perform all acts that Lender in its discretion determines to be necessary or desirable for the operation and maintenance of the Mortgaged Property, including the execution, cancellation or modification of Leases, the collection of all Rents, the making of Repairs to the Mortgaged Property and the execution or termination of contracts providing for the management, operation or maintenance of the Mortgaged Property, for the purposes of enforcing the assignment of Rents pursuant to Section 3(a), protecting the Mortgaged Property or the security of this Instrument, or for such other purposes as Lender in its discretion may deem necessary or desirable.

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(ii)

Alternatively, if an Event of Default has occurred and is continuing, regardless of the adequacy of Lender’s security, without regard to Borrower’s solvency and without the necessity of giving prior notice (oral or written) to Borrower, Lender may apply to any court having jurisdiction for the appointment of a receiver for the Mortgaged Property to take any or all of the actions set forth in the preceding sentence. If Lender elects to seek the appointment of a receiver for the Mortgaged Property at any time after an Event of Default has occurred and is continuing, Borrower, by its execution of this Instrument, expressly consents to the appointment of such receiver, including the appointment of a receiver ex parte if permitted by applicable law.

(iii)

If Borrower is a housing cooperative corporation or association, Borrower hereby agrees that if a receiver is appointed, the order appointing the receiver may contain a provision requiring the receiver to pay the installments of interest and principal then due and payable under the Note and the other amounts then due and payable under the other Loan Documents, including Imposition Reserve Deposits, it being acknowledged and agreed that the Indebtedness is an obligation of Borrower and must be paid out of maintenance charges payable by Borrower’s tenant shareholders under their proprietary leases or occupancy agreements.

(iv)

Lender or the receiver, as the case may be, will be entitled to receive a reasonable fee for managing the Mortgaged Property.

(v)

Immediately upon appointment of a receiver or immediately upon Lender’s entering upon and taking possession and control of the Mortgaged Property, Borrower will surrender possession of the Mortgaged Property to Lender or the receiver, as the case may be, and will deliver to Lender or the receiver, as the case may be, all documents, records (including records on electronic or magnetic media), accounts, surveys, plans, and specifications relating to the Mortgaged Property and all security deposits and prepaid Rents.

(vi)

If Lender takes possession and control of the Mortgaged Property, then Lender may exclude Borrower and its representatives from the Mortgaged Property.

Borrower acknowledges and agrees that the exercise by Lender of any of the rights conferred under this Section 3 will not be construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into actual possession of the Land and Improvements.

(d)

If Lender enters the Mortgaged Property, Lender will be liable to account only to Borrower and only for those Rents actually received. Except to the extent of Lender’s gross negligence or willful misconduct, Lender will not be liable to Borrower, anyone claiming under or through Borrower or anyone having an interest in the Mortgaged Property, by reason of any act or omission of Lender under Section 3(c), and Borrower hereby releases and discharges Lender from any such liability to the fullest extent permitted by law.

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(e)

If the Rents are not sufficient to meet the costs of taking control of and managing the Mortgaged Property and collecting the Rents, any funds expended by Lender for such purposes will become an additional part of the Indebtedness as provided in Section 7.

(f)

Any entering upon and taking of control of the Mortgaged Property by Lender or the receiver, as the case may be, and any application of Rents as provided in this Instrument will not cure or waive any Event of Default or invalidate any other right or remedy of Lender under applicable law or provided for in this Instrument.

Assignment of Leases; Leases Affecting the Mortgaged Property.

(a)

As part of the consideration for the Indebtedness, Borrower absolutely and unconditionally assigns and transfers to Lender all of Borrower’s right, title and interest in, to and under the Leases, including Borrower’s right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease.

(i)

It is the intention of Borrower to establish a present, absolute and irrevocable transfer and assignment to Lender of all of Borrower’s right, title and interest in, to and under the Leases. Borrower and Lender intend this assignment of the Leases to be immediately effective and to constitute an absolute present assignment and not an assignment for additional security only.

(ii)

For purposes of giving effect to this absolute assignment of the Leases, and for no other purpose, the Leases will not be deemed to be a part of the Mortgaged Property.

(iii)

However, if this present, absolute and unconditional assignment of the Leases is not enforceable by its terms under the laws of the Property Jurisdiction, then the Leases will be included as a part of the Mortgaged Property and it is the intention of Borrower that in this circumstance this Instrument create and perfect a Lien on the Leases in favor of Lender, which Lien will be effective as of the date of this Instrument.

(b)

Until Lender gives Notice to Borrower of Lender’s exercise of its rights under this Section 4, Borrower will have all rights, power and authority granted to Borrower under any Lease (except as otherwise limited by this Section or any other provision of this Instrument), including the right, power and authority to modify the terms of any Lease or extend or terminate any Lease. Upon the occurrence of an Event of Default, and during the continuance of such Event of Default, the permission given to Borrower pursuant to the preceding sentence to exercise all rights, power and authority under Leases will automatically terminate. Borrower will comply with and observe Borrower’s obligations under all Leases, including Borrower’s obligations pertaining to the maintenance and disposition of tenant security deposits.

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(c)

(i)

Borrower acknowledges and agrees that the exercise by Lender, either directly or by a receiver, of any of the rights conferred under this Section 4 will not be construed to make Lender a mortgagee-in-possession of the Mortgaged Property so long as Lender has not itself entered into actual possession of the Land and the Improvements.

(ii)

The acceptance by Lender of the assignment of the Leases pursuant to Section 4(a) will not at any time or in any event obligate Lender to take any action under this Instrument or to expend any money or to incur any expenses.

(iii)

Except to the extent of Lender’s gross negligence or willful misconduct, Lender will not be liable in any way for any injury or damage to person or property sustained by any Person or Persons in or about the Mortgaged Property.

(iv)

Prior to Lender’s actual entry into and taking possession of the Mortgaged Property, Lender will not be obligated for any of the following:

(A)

Lender will not be obligated to perform any of the terms, covenants and conditions contained in any Lease (or otherwise have any obligation with respect to any Lease).

(B)

Lender will not be obligated to appear in or defend any action or proceeding relating to the Lease or the Mortgaged Property.

(C)

Lender will not be responsible for the operation, control, care, management or repair of the Mortgaged Property or any portion of the Mortgaged Property. The execution of this Instrument by Borrower will constitute conclusive evidence that all responsibility for the operation, control, care, management and repair of the Mortgaged Property is and will be that of Borrower, prior to such actual entry and taking of possession.

(d)

Upon delivery of Notice by Lender to Borrower of Lender’s exercise of Lender’s rights under this Section 4 at any time after the occurrence of an Event of Default, and during the continuance of such Event of Default, and without the necessity of Lender entering upon and taking and maintaining control of the Mortgaged Property directly, by a receiver, or by any other manner or proceeding permitted by the laws of the Property Jurisdiction, Lender immediately will have all rights, powers and authority granted to Borrower under any Lease, including the right, power and authority to modify the terms of any such Lease, or extend or terminate any such Lease.

(e)

Borrower will, promptly upon Lender’s request, deliver to Lender an executed copy of each residential Lease then in effect.

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(f)

If Borrower is a cooperative housing corporation or association, notwithstanding anything to the contrary contained in this Instrument, so long as Borrower remains a cooperative housing corporation or association and is not in breach of any covenant of this Instrument, Lender consents to the following:

(i)

Borrower may execute leases of apartments for a term in excess of 2 years to a tenant shareholder of Borrower, so long as such leases, including proprietary leases, are and will remain subordinate to the Lien of this Instrument.

(ii)

Borrower may surrender or terminate such leases of apartments where the surrendered or terminated lease is immediately replaced or where Borrower makes its best efforts to secure such immediate replacement by a newly-executed lease of the same apartment to a tenant shareholder of Borrower. However, no consent is given by Lender to any execution, surrender, termination or assignment of a lease under terms that would waive or reduce the obligation of the resulting tenant shareholder under such lease to pay cooperative assessments in full when due or the obligation of the former tenant shareholder to pay any unpaid portion of such assessments.

Application of Payments. If at any time Lender receives, from Borrower or otherwise, any amount applicable to the Indebtedness which is less than all amounts due and payable at such time, then Lender may apply that payment to amounts then due and payable in any manner and in any order determined by Lender, in Lender’s discretion. Neither Lender’s acceptance of an amount that is less than all amounts then due and payable nor Lender’s application of such payment in the manner authorized will constitute or be deemed to constitute either a waiver of the unpaid amounts or an accord and satisfaction. Notwithstanding the application of any such amount to the Indebtedness, Borrower’s obligations under this Instrument, the Note and all other Loan Documents will remain unchanged.

Protection of Lender’s Security; Instrument Secures Future Advances.

(a)

If Borrower fails to perform any of its obligations under this Instrument or any other Loan Document, or if any action or proceeding is commenced which purports to affect the Mortgaged Property, Lender’s security or Lender’s rights under this Instrument, including eminent domain, insolvency, code enforcement, civil or criminal forfeiture, enforcement of Hazardous Materials Laws, fraudulent conveyance or reorganizations or proceedings involving a bankrupt or decedent, then Lender at Lender’s option may make such appearances, file such documents, disburse such sums and take such actions as Lender reasonably deems necessary to perform such obligations of Borrower and to protect Lender’s interest, including all of the following:

(i)

Lender may pay Attorneys’ Fees and Costs.

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(ii)

Lender may pay fees and out-of-pocket expenses of accountants, inspectors and consultants.

(iii)

Lender may enter upon the Mortgaged Property to make Repairs or secure the Mortgaged Property.

(iv)

Lender may procure the Insurance required by the Loan Agreement.

(v)

Lender may pay any amounts which Borrower has failed to pay under the Loan Agreement.

(vi)

Lender may perform any of Borrower’s obligations under the Loan Agreement.

(vii)

Lender may make advances to pay, satisfy or discharge any obligation of Borrower for the payment of money that is secured by a Prior Lien.

(b)

Any amounts disbursed by Lender under this Section 7, or under any other provision of this Instrument that treats such disbursement as being made under this Section 7, will be secured by this Instrument, will be added to, and become part of, the principal component of the Indebtedness, will be immediately due and payable and will bear interest from the date of disbursement until paid at the Default Rate.

(c)

Nothing in this Section 7 will require Lender to incur any expense or take any action.

Events of Default. An Event of Default under the Loan Agreement will constitute an Event of Default under this Instrument.

Remedies Cumulative. Each right and remedy provided in this Instrument is distinct from all other rights or remedies under this Instrument, the Loan Agreement or any other Loan Document or afforded by applicable law or equity, and each will be cumulative and may be exercised concurrently, independently or successively, in any order. Lender’s exercise of any particular right or remedy will not in any way prevent Lender from exercising any other right or remedy available to Lender. Lender may exercise any such remedies from time to time and as often as Lender chooses.

10.

Waiver of Statute of Limitations, Offsets, and Counterclaims. Borrower waives the right to assert any statute of limitations as a bar to the enforcement of the Lien of this Instrument or to any action brought to enforce any Loan Document. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or otherwise to offset any obligations to make the payments required by the Loan Documents. No failure by Lender to perform any of its obligations under this Instrument will be a valid defense to, or result in any offset against, any payments that Borrower is obligated to make under any of the Loan Documents.

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11.

Waiver of Marshalling.

(a)

Notwithstanding the existence of any other security interests in the Mortgaged Property held by Lender or by any other party, Lender will have the right to determine the order in which any or all of the Mortgaged Property will be subjected to the remedies provided in this Instrument, the Note, the Loan Agreement or any other Loan Document or applicable law. Lender will have the right to determine the order in which any or all portions of the Indebtedness are satisfied from the proceeds realized upon the exercise of such remedies.

(b)

Borrower and any party who now or in the future acquires a security interest in the Mortgaged Property and who has actual or constructive notice of this Instrument waives any and all right to require the marshalling of assets or to require that any of the Mortgaged Property be sold in the inverse order of alienation or that any of the Mortgaged Property be sold in parcels or as an entirety in connection with the exercise of any of the remedies permitted by applicable law or provided in this Instrument.

12.

Further Assurances; Lender’s Expenses.

(a)

Borrower will deliver, at its sole cost and expense, all further acts, deeds, conveyances, assignments, estoppel certificates, financing statements or amendments, transfers and assurances as Lender may require from time to time in order to better assure, grant and convey to Lender the rights intended to be granted, now or in the future, to Lender under this Instrument and the Loan Documents or in connection with Lender’s consent rights under Article VII of the Loan Agreement.

(b)

Borrower acknowledges and agrees that, in connection with each request by Borrower under this Instrument or any Loan Document, Borrower will pay all reasonable Attorneys’ Fees and Costs and expenses incurred by Lender, including any fees payable in accordance with any request for further assurances or an estoppel certificate pursuant to the Loan Agreement, regardless of whether the matter is approved, denied or withdrawn. Any amounts payable by Borrower under this Instrument or under any other Loan Document will be deemed a part of the Indebtedness, will be secured by this Instrument and will bear interest at the Default Rate if not fully paid within 10 days of written demand for payment.

13.

Governing Law; Consent to Jurisdiction and Venue. This Instrument, and any Loan Document which does not itself expressly identify the law that is to apply to it, will be governed by the laws of the Property Jurisdiction. Borrower agrees that any controversy arising under or in relation to the Note, this Instrument or any other Loan Document may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that may arise under or in relation to the Note, any security for the Indebtedness or any other Loan Document. Borrower irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 13 is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters under this Instrument in any court of any other jurisdiction.

14.

Notice. All Notices, demands and other communications under or concerning this Instrument will be governed by the terms set forth in the Loan Agreement.

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15.

Successors and Assigns Bound. This Instrument will bind the respective successors and assigns of Borrower and Lender, and the rights granted by this Instrument will inure to Lender’s successors and assigns.

16.

Joint and Several Liability. If more than one Person signs this Instrument as Borrower, the obligations of such Persons will be joint and several.

17.

Relationship of Parties; No Third Party Beneficiary.

(a)

The relationship between Lender and Borrower will be solely that of creditor and debtor, respectively, and nothing contained in this Instrument will create any other relationship between Lender and Borrower. Nothing contained in this Instrument will constitute Lender as a joint venturer, partner or agent of Borrower, or render Lender liable for any debts, obligations, acts, omissions, representations or contracts of Borrower.

(b)

No creditor of any party to this Instrument and no other Person will be a third party beneficiary of this Instrument or any other Loan Document. Without limiting the generality of the preceding sentence, (i) any arrangement (“ Servicing Arrangement ”) between Lender and any Loan Servicer for loss sharing or interim advancement of funds will constitute a contractual obligation of such Loan Servicer that is independent of the obligation of Borrower for the payment of the Indebtedness, (ii) Borrower will not be a third party beneficiary of any Servicing Arrangement, and (iii) no payment by the Loan Servicer under any Servicing Arrangement will reduce the amount of the Indebtedness.

18.

Severability; Amendments.

(a)

The invalidity or unenforceability of any provision of this Instrument will not affect the validity or enforceability of any other provision, and all other provisions will remain in full force and effect. This Instrument contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Instrument.

(b)

This Instrument may not be amended or modified except by a writing signed by the party against whom enforcement is sought; provided, however, that in the event of a Transfer prohibited by or requiring Lender’s approval under Article VII of the Loan Agreement, some or all of the modifications to the Loan Documents (if any) may be modified or rendered void by Lender at Lender’s option by Notice to Borrower and the transferee(s).

19.

Construction.

(a)

The captions and headings of the Sections of this Instrument are for convenience only and will be disregarded in construing this Instrument. Any reference in this Instrument to a “Section” will, unless otherwise explicitly provided, be construed as referring to a Section of this Instrument.

(b)

Any reference in this Instrument to a statute or regulation will be construed as referring to that statute or regulation as amended from time to time.

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(c)

Use of the singular in this Instrument includes the plural and use of the plural includes the singular.

(d)

As used in this Instrument, the term “including” means “including, but not limited to” and the term “includes” means “includes without limitation.”

(e)

The use of one gender includes the other gender, as the context may require.

(f)

Unless the context requires otherwise any definition of or reference to any agreement, instrument or other document in this Instrument will be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth in this Instrument).

(g)

Any reference in this Instrument to any person will be construed to include such person’s successors and assigns.

20.

Subrogation. If, and to the extent that, the proceeds of the loan evidenced by the Note , or subsequent advances under Section 7, are used to pay, satisfy or discharge a Prior Lien , such loan proceeds or advances will be deemed to have been advanced by Lender at Borrower’s request, and Lender will automatically, and without further action on its part, be subrogated to the rights, including Lien priority, of the owner or holder of the obligation secured by the Prior Lien, whether or not the Prior Lien is released.

21-30.

Reserved.

31.

Acceleration; Remedies.

(a)

At any time during the existence of an Event of Default, Lender, at Lender’s option, may declare the Indebtedness to be immediately due and payable without further demand, and may invoke the power of sale granted in this Instrument (and Borrower appoints Lender as Borrower’s agent and attorney-in-fact to exercise such power of sale in the name and on behalf of Borrower) and any other remedies permitted by Georgia law or provided in this Instrument or in any other Loan Document. Borrower acknowledges that the power of sale granted in this Instrument may be exercised by Lender without prior judicial hearing. Lender will be entitled to collect all costs and expenses incurred in pursuing such remedies, including reasonable Attorneys’ Fees and Costs and costs of documentary evidence, abstracts and title reports.

(b)

Lender may sell and dispose of the Mortgaged Property at public auction, at the usual place for conducting sales at the courthouse in the county where all or any part of the Mortgaged Property is located, to the highest bidder for cash, first advertising the time, terms and place of such sale by publishing a notice of sale once a week for four consecutive weeks (without regard to the actual number of days) in a newspaper in which sheriff’s advertisements are published in such county, all other notice being waived by Borrower; and Lender may thereupon execute and deliver to the purchaser a sufficient instrument of conveyance of the Mortgaged Property in fee simple, which may contain recitals as to the happening of the default upon which the execution of the power of sale granted by this Section depends. The recitals in the instrument of conveyance will be presumptive evidence that Lender duly complied with all preliminary acts prerequisite to the sale and instrument of conveyance. Borrower constitutes and appoints Lender as Borrower’s agent and attorney-in-fact to make such recitals, sale and conveyance. Borrower ratifies all of Lender’s acts, as such attorney-in-fact, and Borrower agrees that such recitals will be binding and conclusive upon Borrower and that the conveyance to be made by Lender (and in the event of a deed in lieu of foreclosure, then as to such conveyance) will be effectual to bar all right, title and interest, equity of redemption, including all statutory redemption, homestead, dower, curtsey and all other exemptions of Borrower, or its successors in interest, in and to the Mortgaged Property.

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(c)

The Mortgaged Property may be sold in one parcel and as an entirety, or in such parcels, manner or order as Lender, in its discretion, may elect, and one or more exercises of the powers granted in this Section will not extinguish or exhaust the power unless the entire Mortgaged Property is sold or the Indebtedness is paid in full, and Lender will collect the proceeds of such sale, applying such proceeds as provided in this Section. In the event of a deficiency, Borrower will immediately on demand from Lender pay such deficiency to Lender, subject to the provisions of the Note limiting Borrower’s personal liability for payment of the Indebtedness. Borrower acknowledges that Lender may bid for and purchase the Mortgaged Property at any foreclosure sale and will be entitled to apply all or any part of the Indebtedness as a credit to the purchase price. Borrower covenants and agrees that Lender will apply the proceeds of the sale in the following order: (i) to all reasonable costs and expenses of the sale, including reasonable Attorneys’ Fees and Costs and costs of title evidence; (ii) to the Indebtedness in such order as Lender, in Lender’s discretion, directs; and (iii) the excess, if any, to the person or persons legally entitled to the excess. The power and agency granted in this Section 31 are coupled with an interest, are irrevocable by death or otherwise and are in addition to the remedies for collection of the Indebtedness as provided by law.

(d)

If the Mortgaged Property is sold pursuant to this Section 31, Borrower, or any person holding possession of the Mortgaged Property through Borrower, will surrender possession of the Mortgaged Property to the purchaser at such sale on demand. If possession is not surrendered on demand, Borrower or such person will be a tenant holding over and may be dispossessed in accordance with Georgia law.

32.

Release. Upon payment of the Indebtedness, Lender will cancel this Instrument. Borrower will pay Lender’s reasonable costs incurred in canceling this Instrument.

33.

Borrower’s Waiver Of Certain Rights. To the fullest extent permitted by law, Borrower agrees that Borrower will not at any time insist upon, plead, claim or take the benefit or advantage of any present or future law providing for any appraisement, valuation, stay, extension or redemption, homestead, moratorium, reinstatement, marshalling or forbearance, and Borrower, for Borrower, Borrower’s heirs, devisees, representatives, successors and assigns, and for any and all persons ever claiming any interest in the Mortgaged Property, to the fullest extent permitted by law, waives and releases all rights of redemption, valuation, appraisement, stay of execution, reinstatement (including all rights under O.C.G.A. Section 44-14-85), notice of intention to mature or declare due the whole of the Indebtedness, and all rights to a marshalling of assets of Borrower, including the Mortgaged Property.

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34.

Deed To Secure Debt. This conveyance is to be construed under the existing laws of the State of Georgia as a deed passing title, and not as a mortgage, and is intended to secure the payment of the Indebtedness.

35.

Assumption Not a Novation. Lender’s acceptance of an assumption of the obligations of this Instrument and the Note, and the release of Borrower pursuant to Article VII of the Loan Agreement or otherwise, will not constitute a novation and will not affect the priority of the Lien created by this Instrument.

36.

WAIVER OF TRIAL BY JURY.

(a)

BORROWER AND LENDER EACH COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS INSTRUMENT OR THE RELATIONSHIP BETWEEN THE PARTIES AS BORROWER AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY.

(b)

BORROWER AND LENDER EACH WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

37.

Incorporation of Riders. The following Riders are attached to this Instrument: NONE.

38.

Attached Exhibits. The following Exhibits, if marked with an “X” in the space provided, are attached to this Instrument:

x	Exhibit A	Description of the Land (required)

¨	Exhibit B	Modifications to Instrument

¨	Exhibit C	Ground Lease Description (if applicable)

IN WITNESS WHEREOF, Borrower has signed and delivered this Instrument or has caused this Instrument to be signed and delivered by its duly authorized representative.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

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BR CARROLL GLENRIDGE, LLC , a Delaware limited liability company

By:	/s/ Jordan Ruddy	(SEAL)
	Jordan Ruddy
	Authorized Signatory

Signed, sealed and delivered in the presence of:

/s/ Molly Brown

Print Name: Molly Brown, Unofficial Witness

/s/ Dale Pozzi
Notary Public, New York
County, New York
[SEAL]

Date: September 27, 2016

My commission expires: January 28, 2017

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EXHIBIT A

DESCRIPTION OF THE LAND

(Nevadan Apartments)

TRACT ONE :

ALL THAT TRACT of land in Land Lots 38 and 69 of the 17th District of Fulton County, Georgia, described as follows:

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TRACT TWO :

ALL THAT TRACT of land in Land Lots 38 and 69 of the 17th District of Fulton County, Georgia, described as follows:

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TOGETHER WITH a non-exclusive right, title and interest in and to all non-exclusive easements contained in that certain Sewer Easement Agreement between Andrew E. Chandler and Independent Living International Corp. dated as of July 20,1989, recorded in Deed Book 12661, Page 107, Fulton County, Georgia records.

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Exhibit 10.8

Freddie Mac Loan Number: 708657427

Property Name: Nevadan Apartments

ASSIGNMENT OF MANAGEMENT AGREEMENT AND
SUBORDINATION OF MANAGEMENT FEES

(Revised 7-12-2016)

THIS ASSIGNMENT OF MANAGEMENT AGREEMENT AND SUBORDINATION OF MANAGEMENT FEES (“ Assignment ”) is made effective as of the 13th day of October, 2016, by and among BR CARROLL GLENRIDGE, LLC , a Delaware limited liability company (“ Borrower ”), KEYBANK NATIONAL ASSOCIATION , a national banking association (“ Lender ”), and CARROLL MANAGEMENT GROUP, LLC , a Georgia limited liability company (“ Property Manager ”).

RECITALS:

Borrower has requested that Lender make a loan to Borrower (“ Loan ”). The Loan will be evidenced by a Multifamily Note from Borrower to Lender effective as of the date of this Assignment (“ Note ”). The Note is secured by, among other things, a Multifamily Loan and Security Agreement (“ Loan Agreement ”) and a Multifamily Deed to Secure Debt, Assignment of Rents and Security Agreement (“ Security Instrument ”), dated as of the date of this Assignment, which grants Lender a first lien on the property encumbered by the Security Instrument (“ Mortgaged Property ”). The Note, the Loan Agreement, the Security Instrument, this Assignment and any of the other documents evidencing the Loan are collectively referred to as the “ Loan Documents ”. Other capitalized terms used but not defined in this Assignment will have the meanings given to those terms in the Loan Agreement.

Pursuant to a Management Agreement between Borrower and Property Manager (“ Management Agreement ”) (a true and correct copy of which is attached as Exhibit B ), Borrower employed Property Manager exclusively to lease, operate and manage the Mortgaged Property, and Property Manager is entitled to certain management fees (“ Management Fees ”) pursuant to the Management Agreement.

Lender requires as a condition to the making of the Loan that Borrower assign the Management Agreement and that Property Manager subordinate its interest in the Management Fees in lien and payment to the Loan as set forth below.

For good and valuable consideration the parties agree as follows:

Assignment of Management Agreement . As additional collateral security for the Loan, Borrower conditionally transfers, sets over, and assigns to Lender all of Borrower’s right, title and interest in and to the Management Agreement and all extensions and renewals. This transfer and assignment will automatically become a present, unconditional assignment, at Lender’s option, upon a default by Borrower under the Note, the Loan Agreement, the Security Instrument or any of the other Loan Documents (each, an “ Event of Default ”), and the failure of Borrower to cure such Event of Default within any applicable grace period.

Assignment of Management Agreement and

Subordination of Management Fees

Subordination of Management Fees. The Management Fees and all rights and privileges of Property Manager to the Management Fees are and will at all times continue to be subject and unconditionally subordinate in all respects in lien and payment to the lien and payment of the Loan Agreement, the Security Instrument, the Note, and the other Loan Documents, and to any renewals, extensions, modifications, assignments, replacements, or consolidations of the Loan Documents and the rights, privileges, and powers of Lender under the Note, the Loan Agreement, the Security Instrument, or any of the other Loan Documents.

Estoppel. Property Manager and Borrower represent and warrant that all of the following are true as of the date of this Assignment:

(a)

The Management Agreement is in full force and effect and has not been modified, amended or assigned other than pursuant to this Assignment.

(b)

Neither Property Manager nor Borrower is in default under any of the terms, covenants or provisions of the Management Agreement and Property Manager knows of no event which, but for the passage of time or the giving of notice or both, would constitute an event of default under the Management Agreement.

(c)

Neither Property Manager nor Borrower has commenced any action or given or received any notice for the purpose of terminating the Management Agreement.

(d)

The Management Fees and all other sums due and payable to the Property Manager under the Management Agreement have been paid in full.

Agreement by Borrower and Property Manager. Borrower and Property Manager agree that if there is an Event of Default by Borrower (continuing beyond any applicable grace period) under the Note, the Loan Agreement, the Security Instrument or any of the other Loan Documents during the term of this Assignment or upon the occurrence of any event which would entitle Lender to terminate the Management Agreement in accordance with the terms of the Loan Documents, Lender may terminate the Management Agreement without payment of any cancellation fee or penalty and require Property Manager to transfer its responsibility for the management of the Mortgaged Property to a management company selected by Lender in Lender’s sole discretion, effective as of the date set forth in Lender’s notice to Property Manager. Following any such termination, Property Manager agrees to apply all rents, security deposits, issues, proceeds and profits of the Mortgaged Property in accordance with Lender’s written directions to Property Manager.

Lender’s Right to Replace Property Manager. If Lender, in Lender’s reasonable discretion, at any time during the term of this Assignment, determines that the Mortgaged Property is not being managed in accordance with generally accepted management practices for properties similar to the Mortgaged Property, Lender will deliver written notice to Borrower and Property Manager, which notice will specify with particularity the grounds for Lender’s determination. If Lender reasonably determines that the conditions specified in Lender’s notice are not remedied to Lender’s reasonable satisfaction by Borrower or Property Manager within 30 days from receipt of such notice or that Borrower or Property Manager have failed to diligently undertake correcting such conditions within such 30-day period, Lender may direct Borrower to terminate Property Manager as manager of the Mortgaged Property and terminate the Management Agreement without payment of any cancellation fee or penalty and to replace Property Manager with a management company acceptable to Lender in Lender’s sole discretion pursuant to a management agreement acceptable to Lender in Lender’s sole discretion.

Assignment of Management Agreement and

Subordination of Management Fees

Page 2

Receipt of Management Fees. Property Manager will not be obligated to return or refund to Lender any Management Fees or other fee, commission or other amount received by Property Manager prior to the occurrence of the Event of Default, and to which Property Manager was entitled under the Management Agreement. If the Property Manager receives any Management Fees after it has received notice of an Event of Default, Property Manager agrees that such Management Fees will be received and held in trust for Lender, to be applied by Lender to amounts due under the Loan Documents.

Consent and Agreement by Property Manager . Property Manager acknowledges and consents to this Assignment and agrees that Property Manager will act in conformity with the provisions of this Assignment and Lender’s rights under this Assignment or otherwise related to the Management Agreement. If the responsibility for the management of the Mortgaged Property is transferred from Property Manager in accordance with the provisions of this Assignment, then Property Manager will fully cooperate in transferring its responsibility to a new management company and complete such transfer no later than 30 days from the date the Management Agreement is terminated. Further, Property Manager agrees as follows:

(a)

It will not contest or impede the exercise by Lender of any right Lender has under or in connection with this Assignment.

(b)

It will give at least 30 days prior written notice to Lender of its intention to terminate the Management Agreement or otherwise discontinue its management of the Mortgaged Property, in the manner provided for in this Assignment.

(c)

It will not amend any of the provisions or terms of the Management Agreement without the prior consent of Lender.

Termination. When the Loan is paid in full and the Security Instrument is released or assigned of record, this Assignment and all of Lender’s right, title and interest hereunder with respect to the Management Agreement will terminate.

Notices.

(a)

All notices under or concerning this Assignment ( “Notice” ) will be in writing. Each Notice will be deemed given on the earliest to occur of: (i) the date when the Notice is received by the addressee, (ii) the first Business Day after the Notice is delivered to a recognized overnight courier service, with arrangements made for payment of charges for next Business Day delivery, or (iii) the third Business Day after the Notice is deposited in the United States mail with postage prepaid, certified mail, return receipt requested. Addresses for Notice are as follows:

If to Lender:

KeyBank National Association
c/o KeyBank Real Estate Capital - Servicing
Department, 11501 Outlook Street, Suite 300
Overland Park, Kansas 66211
Mailcode: KS-01-11-0501, Attn: Servicing Manager

Assignment of Management Agreement and

Subordination of Management Fees

Page 3

If to Borrower:	BR Carroll Glenridge, LLC c/o Carroll Organization, LLC 3340 Peachtree Road, NE, Suite 2250 Atlanta, Georgia 30326 Attention: Josh Champion

If to Property Manager:	Carroll Management Group, LLC c/o Carroll Organization, LLC 3340 Peachtree Road, NE, Suite 2250 Atlanta, Georgia 30326 Attention: Josh Champion

(b)

Any party to this Assignment may change the address to which Notices intended for it are to be directed by means of Notice given to the other parties in accordance with this Section 9. Each party agrees that it will not refuse or reject delivery of any Notice given in accordance with this Section 9, that it will acknowledge, in writing, the receipt of any Notice upon request by the other party and that any Notice rejected or refused by it will be deemed for purposes of this Section 9 to have been received by the rejecting party on the date so refused or rejected, as conclusively established by the records of the U.S. Postal Service or the courier service.

10.

Governing Law; Consent to Jurisdiction and Venue.

(a)

This Assignment will be construed in accordance with and governed by the laws of the Property Jurisdiction.

(b)

Borrower and Property Manager agree that any controversy arising under or in relation to this Assignment may be litigated in the Property Jurisdiction. The state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies that may arise under or in relation to this Assignment. Borrower and Property Manager irrevocably consent to service, jurisdiction and venue of such courts for any such litigation and waive any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Section 10 is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters under this Assignment in any court of any other jurisdiction.

11.

Captions, Cross References and Exhibits . The captions assigned to provisions of this Assignment are for convenience only and will be disregarded in construing this Assignment. Any reference in this Assignment to an “Exhibit” or a “Section,” unless otherwise explicitly provided, will be construed as referring, respectively, to an Exhibit attached to this Assignment or to a section of this Assignment. All Exhibits attached to or referred to in this Assignment are incorporated by reference into this Assignment.

12.

Number and Gender. Use of the singular in this Assignment includes the plural, use of the plural includes the singular, and use of one gender includes all other genders, as the context may require.

13.

No Partnership. This Assignment is not intended to, and will not, create a partnership or joint venture among the parties, and no party to this Assignment will have the power or authority to bind any other party except as explicitly provided in this Assignment.

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14.

Severability. The invalidity or unenforceability of any provision of this Assignment will not affect the validity of any other provision, and all other provisions will remain in full force and effect.

15.

Entire Assignment. This Assignment contains the entire agreement among the parties as to the rights granted and the obligations assumed in this Assignment.

16.

No Waiver; No Remedy Exclusive. Any forbearance by a party to this Assignment in exercising any right or remedy given under this Assignment or existing at law or in equity will not constitute a waiver of or preclude the exercise of that or any other right or remedy. Unless otherwise explicitly provided, no remedy under this Assignment is intended to be exclusive of any other available remedy, but each remedy will be cumulative and will be in addition to other remedies given under this Assignment or existing at law or in equity.

17.

Third Party Beneficiaries. Neither any creditor of any party to this Assignment, nor any other person, is intended to be a third party beneficiary of this Assignment.

18.

Further Assurances and Corrective Instruments. To the extent permitted by law, the parties will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements to this Assignment and such further instruments as may reasonably be required for carrying out the intention of or facilitating the performance of this Assignment.

19.

Counterparts. This Assignment may be executed in multiple counterparts, each of which will constitute an original document and all of which together will constitute one agreement.

20.

Indemnity. By executing this Assignment Borrower agrees to indemnify and hold harmless Lender and its successors and assigns from and against any and all losses, claims, damages, liabilities and expenses including Attorneys’ Fees and Costs, which may be imposed or incurred in connection with this Assignment.

21.

Costs and Expenses. Wherever pursuant to this Assignment it is provided that Borrower will pay any costs and expenses, such costs and expenses will include Lender’s Attorneys’ Fees and Costs.

22.

Determinations by Lender. In any instance where the consent or approval of Lender may be given or is required, or where any determination, judgment or decision is to be rendered by Lender under this Assignment, the granting, withholding or denial of such consent or approval and the rendering of such determination, judgment or decision will be made or exercised by Lender (or its designated representative) at its sole and exclusive option and in its sole and absolute discretion and will be final and conclusive, except as may be otherwise expressly and specifically provided in this Assignment.

23.

Successors and Assigns. This Assignment will be binding upon and inure to the benefit of Borrower, Lender and Property Manager and their respective successors and assigns forever.

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24.

Secondary Market. Lender may sell, transfer and deliver the Note and assign the Loan Agreement, the Security Instrument, this Assignment and the other Loan Documents to one or more investors in the secondary mortgage market (“ Investors ”). In connection with such sale, Lender may retain or assign responsibility for servicing the Loan, including the Note, the Loan Agreement, the Security Instrument, this Assignment and the other Loan Documents, or may delegate some or all of such responsibility and/or obligations to a servicer including any subservicer or master servicer, on behalf of the Investors. All references to Lender in this Assignment will refer to and include any such servicer to the extent applicable.

25.

Attached Exhibits. The following Exhibits, if marked with an “X” in the space provided, are attached to this Assignment:

x	Exhibit A	Modifications to Assignment

x	Exhibit B	Copy of Management Agreement

IN WITNESS WHEREOF the undersigned have executed this Assignment as of the date and year first written above.

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	BORROWER:

	BR CARROLL GLENRIDGE, LLC , a Delaware limited liability company

	By:	/s/ Jordan Ruddy
		Jordan Ruddy
		Authorized Signatory

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	LENDER:

	KEYBANK NATIONAL ASSOCIATION , a national banking association

	By:	/s/ Tonya E. Barnes
		Tonya E. Barnes
		Vice President

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	PROPERTY MANAGER:

	CARROLL MANAGEMENT GROUP, LLC , a Georgia limited liability company

	By:	/s/ Josh Champion
		Name: Josh Champion
		Title: President

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EXHIBIT A

MODIFICATIONS TO ASSIGNMENT

The following modifications are made to the text of the Assignment that precedes this Exhibit:

None.

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EXHIBIT B

MANAGEMENT AGREEMENT

See Attached

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Exhibit 10.9

Freddie Mac Loan Number: 708657427

Property Name: Nevadan Apartments

GUARANTY

MULTISTATE

(Revised 8-16-2016)

THIS GUARANTY (“ Guaranty ”) is entered into to be effective as of October 13, 2016, by BLUEROCK RESIDENTIAL GROWTH REIT, INC. , a Maryland corporation, and CARROLL MULTIFAMILY REAL ESTATE FUND IV, LP , a Delaware limited partnership (“ Guarantor ”, collectively if more than one), for the benefit of KEYBANK NATIONAL ASSOCIATION , a national banking association (“ Lender ”).

RECITALS

Pursuant to the terms of a Multifamily Loan and Security Agreement dated the same date as this Guaranty (as amended, modified or supplemented from time to time, the " Loan Agreement "), BR Carroll Glenridge, LLC, a Delaware limited liability company (“ Borrower ”) has requested that Lender make a loan to Borrower in the amount of $48,431,000.00 (“ Loan ”). The Loan will be evidenced by a Multifamily Note from Borrower to Lender dated effective as of the effective date of this Guaranty (as amended, modified or supplemented from time to time, the “ Note ”). The Note will be secured by a Multifamily Mortgage, Deed of Trust, or Deed to Secure Debt dated effective as of the effective date of the Note (as amended, modified or supplemented from time to time, the “ Security Instrument ”), encumbering the Mortgaged Property described in the Loan Agreement.

As a condition to making the Loan to Borrower, Lender requires that Guarantor execute this Guaranty.

Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material benefit from the making of the Loan.

AGREEMENT

NOW, THEREFORE, in order to induce Lender to make the Loan to Borrower, and in consideration thereof and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor agrees as follows:

Defined Terms. The terms “Indebtedness”, “Loan Documents”, and “Property Jurisdiction”, and other capitalized terms used but not defined in this Guaranty, will have the meanings assigned to them in the Loan Agreement.

Scope of Guaranty.

(a)

Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender each of the following:

Guaranty - Multistate

(i)

Guarantor guarantees the full and prompt payment when due, whether at the Maturity Date or earlier, by reason of acceleration or otherwise, and at all times thereafter, of each of the following:

(A)

Guarantor guarantees a portion of the Indebtedness (including interest at the Note rate) equal to 0% of the original principal balance of the Note (“ Base Guaranty ”).

(B)

In addition to the Base Guaranty, Guarantor guarantees all other amounts for which Borrower is personally liable under Sections 9(c), 9(d) and 9(f) of the Note (provided, however, that Guarantor will have no liability for failure of Borrower or SPE Equity Owner to comply with (I) Section 6.13(a)(xviii) of the Loan Agreement, and (II) the requirement in Section 6.13(a)(x)(B) of the Loan Agreement as to payment of trade payables within 60 days of the date incurred).

(C)

Guarantor guarantees all costs and expenses, including reasonable Attorneys’ Fees and Costs incurred by Lender in enforcing its rights under this Guaranty.

(ii)

Guarantor guarantees the full and prompt payment and performance of, and compliance with, all of Borrower’s obligations under Sections 6.12, 10.02(b) and 10.02(d) of the Loan Agreement when due and the accuracy of Borrower’s representations and warranties under Section 5.05 of the Loan Agreement.

(iii)

Guarantor guarantees the full and prompt payment and performance of, and compliance with, Borrower’s obligations under Section 6.09(e)(v) of the Loan Agreement to the extent Property Improvement Alterations have commenced and remain uncompleted.

(iv)

Reserved.

(v)

Reserved.

(b)

If the Base Guaranty stated in Section 2(a)(i)(A) is 100% of the original principal balance of the Note, then the following will be applicable:

(i)

The Base Guaranty will mean and include, and Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender, the full and complete prompt payment of the entire Indebtedness, the performance of and/or compliance with all of Borrower’s obligations under the Loan Documents when due, and the accuracy of Borrower’s representations and warranties contained in the Loan Documents.

(ii)

For so long as the Base Guaranty remains in effect (there being no limit to the duration of the Base Guaranty unless otherwise expressly provided in this Guaranty), the obligations guaranteed pursuant to Sections 2(a)(i)(B) and 2(a)(i)(C) will be part of, and not in addition to or in limitation of, the Base Guaranty.

(c)

If the Base Guaranty stated in Section 2(a)(i)(A) is less than 100% of the original principal balance of the Note, then Section 2(b) will be completely inapplicable.

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(d)

If Guarantor is not liable for the entire Indebtedness, then all payments made by Borrower with respect to the Indebtedness and all amounts received by Lender from the enforcement of its rights under the Loan Agreement and the other Loan Documents (except this Guaranty) will be applied first to the portion of the Indebtedness for which neither Borrower nor Guarantor has personal liability.

Additional Guaranty Relating to Bankruptcy.

(a)

Notwithstanding any limitation on liability provided for elsewhere in this Guaranty, Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Lender the full and prompt payment when due, whether at the Maturity Date or earlier, by reason of acceleration or otherwise, and at all times thereafter, the entire Indebtedness, in the event that:

(i)

Borrower or any SPE Equity Owner voluntarily files for bankruptcy protection under the Bankruptcy Code.

(ii)

(iii)

(iv)

(v)

(b)

For purposes of Section 3(a) the term “ Related Party ” will include all of the following:

(i)

Borrower, any Guarantor or any SPE Equity Owner.

(ii)

Any Person that holds, directly or indirectly, any ownership interest (including any shareholder, member or partner) in Borrower, any Guarantor or any SPE Equity Owner or any Person that has a right to manage Borrower, any Guarantor or any SPE Equity Owner.

(iii)

Any Person in which Borrower, any Guarantor or any SPE Equity Owner has any ownership interest (direct or indirect) or right to manage.

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(iv)

Any Person in which any partner, shareholder or member of Borrower, any Guarantor or any SPE Equity Owner has an ownership interest or right to manage.

(v)

Any Person in which any Person holding an interest in Borrower, any Guarantor or any SPE Equity Owner also has any ownership interest.

(vi)

Any creditor (as defined in the Bankruptcy Code) of Borrower that is related by blood, marriage or adoption to Borrower, any Guarantor or any SPE Equity Owner.

(vii)

(c)

If Borrower, any Guarantor, any SPE Equity Owner or any Related Party has solicited creditors to initiate or participate in any proceeding referred to in Section 3(a), regardless of whether any of the creditors solicited actually initiates or participates in the proceeding, then such proceeding will be considered as having been initiated by a Related Party.

Guarantor’s Obligations Survive Foreclosure. The obligations of Guarantor under this Guaranty will survive any foreclosure proceeding, any foreclosure sale, any delivery of any deed in lieu of foreclosure, and any release of record of the Security Instrument, and, in addition, the obligations of Guarantor relating to Borrower’s representations and warranties under Section 5.05 of the Loan Agreement, and Borrower’s obligations under Sections 6.12 and 10.02(b) of the Loan Agreement will survive any repayment or discharge of the Indebtedness. Notwithstanding the foregoing, if Lender has never been a mortgagee-in-possession of or held title to the Mortgaged Property, Guarantor will have no obligation under this Guaranty relating to Borrower’s representations and warranties under Section 5.05 of the Loan Agreement or Borrower’s obligations relating to environmental matters under Sections 6.12 and 10.02(b) of the Loan Agreement after the date of the release of record of the lien of the Security Instrument as a result of the payment in full of the Indebtedness on the Maturity Date or by voluntary prepayment in full.

Guaranty of Payment and Performance. Guarantor’s obligations under this Guaranty constitute an unconditional guaranty of payment and performance and not merely a guaranty of collection.

No Demand by Lender Necessary; Waivers by Guarantor. The obligations of Guarantor under this Guaranty must be performed without demand by Lender and will be unconditional regardless of the genuineness, validity, regularity or enforceability of the Note, the Loan Agreement, or any other Loan Document, and without regard to any other circumstance which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor. Guarantor hereby waives, to the fullest extent permitted by applicable law, all of the following:

(a)

The benefit of all principles or provisions of law, statutory or otherwise, which are or might be in conflict with the terms of this Guaranty and agrees that Guarantor’s obligations will not be affected by any circumstances, whether or not referred to in this Guaranty, which might otherwise constitute a legal or equitable discharge of a surety, a guarantor, a borrower or a mortgagor.

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(b)

The benefits of any right of discharge under any and all statutes or other laws relating to a guarantor, a surety, a borrower or a mortgagor, and any other rights of a surety, a guarantor, a borrower or a mortgagor under such statutes or laws.

(c)

Diligence in collecting the Indebtedness, presentment, demand for payment, protest, all notices with respect to the Note and this Guaranty which may be required by statute, rule of law or otherwise to preserve Lender’s rights against Guarantor under this Guaranty, including notice of acceptance, notice of any amendment of the Loan Documents, notice of the occurrence of any default or Event of Default, notice of intent to accelerate, notice of acceleration, notice of dishonor, notice of foreclosure, notice of protest, and notice of the incurring by Borrower of any obligation or indebtedness.

(d)

All rights to cause a marshalling of the Borrower’s assets or to require Lender to do any of the following:

(i)

Proceed against Borrower or any other guarantor of Borrower’s payment or performance under the Loan Documents (an “ Other Guarantor ”).

(ii)

Proceed against any general partner of Borrower or any Other Guarantor if Borrower or any Other Guarantor is a partnership.

(iii)

Proceed against or exhaust any collateral held by Lender to secure the repayment of the Indebtedness.

(iv)

Pursue any other remedy it may now or hereafter have against Borrower, or, if Borrower is a partnership, any general partner of Borrower.

(e)

Any right to object to the timing, manner or conduct of Lender’s enforcement of its rights under any of the Loan Documents.

(f)

Any right to revoke this Guaranty as to any future advances by Lender under the terms of the Loan Agreement to protect Lender’s interest in the Mortgaged Property.

Modification of Loan Documents. At any time or from time to time and any number of times, without notice to Guarantor and without affecting the liability of Guarantor, all of the following will apply:

(a)

Lender may extend the time for payment of the principal of or interest on the Indebtedness or renew the Indebtedness in whole or in part.

(b)

Lender may extend the time for Borrower’s performance of or compliance with any covenant or agreement contained in the Note, the Loan Agreement or any other Loan Document, whether presently existing or entered into after the date of this Guaranty, or waive such performance or compliance.

(c)

Lender may accelerate the Maturity Date of the Indebtedness as provided in the Note, the Loan Agreement, or any other Loan Document.

(d)

Lender and Borrower may modify or amend the Note, the Loan Agreement, or any other Loan Document in any respect, including an increase in the principal amount.

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(e)

Lender may modify, exchange, surrender or otherwise deal with any security for the Indebtedness or accept additional security that is pledged or mortgaged for the Indebtedness.

Joint and Several Liability. The obligations of Guarantor (and each party named as a Guarantor in this Guaranty) and any Other Guarantor will be joint and several. Lender, in its sole and absolute discretion, may take any of the following actions:

(a)

Lender may bring suit against Guarantor, or any one or more of the parties named as a Guarantor in this Guaranty, and any Other Guarantor, jointly and severally, or against any one or more of them.

(b)

Lender may compromise or settle with Guarantor, any one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, for such consideration as Lender may deem proper.

(c)

Lender may release one or more of the parties named as a Guarantor in this Guaranty, or any Other Guarantor, from liability.

(d)

Lender may otherwise deal with Guarantor and any Other Guarantor, or any one or more of them, in any manner.

No action of Lender described in this Section 8 will affect or impair the rights of Lender to collect from any one or more of the parties named as a Guarantor under this Guaranty any amount guaranteed by Guarantor under this Guaranty.

Limited Release of Guarantor Upon Transfer of Mortgaged Property. If Guarantor requests a release of its liability under this Guaranty in connection with a Transfer which Lender has approved pursuant to Section 7.05(a) of the Loan Agreement, and Borrower has provided a replacement Guarantor acceptable to Lender, then one of the following will apply:

(a)

If Borrower delivers to Lender a Clean Site Assessment, then Lender will release Guarantor from all of Guarantor’s obligations except Guarantor’s obligation to guaranty Borrower’s liability under Section 6.12 (Environmental Hazards) or Section 10.02(b) (Environmental Indemnification) of the Loan Agreement with respect to any loss, liability, damage, claim, cost or expense which directly or indirectly arises from or relates to any Prohibited Activities or Conditions existing prior to the date of the Transfer.

(b)

If Borrower does not deliver a Clean Site Assessment as described in Section 7.05(b)(i) of the Loan Agreement, then Lender will release Guarantor from all of Guarantor’s obligations except for Guarantor’s obligation to guaranty Borrower’s liability under Section 6.12 (Environmental Hazards) or Section 10.02(b) (Environmental Indemnification) of the Loan Agreement.

10.

Subordination of Borrower’s Indebtedness to Guarantor. Any indebtedness of Borrower held by Guarantor now or in the future is and will be subordinated to the Indebtedness and Guarantor will collect, enforce and receive any such indebtedness of Borrower as trustee for Lender, but without reducing or affecting in any manner the liability of Guarantor under the other provisions of this Guaranty.

11.

Waiver of Subrogation. Guarantor will have no right of, and hereby waives any claim for, subrogation or reimbursement against Borrower or any general partner of Borrower by reason of any payment by Guarantor under this Guaranty, whether such right or claim arises at law or in equity or under any contract or statute, until the Indebtedness has been paid in full and there has expired the maximum possible period thereafter during which any payment made by Borrower to Lender with respect to the Indebtedness could be deemed a preference under the United States Bankruptcy Code.

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12.

Preference. If any payment by Borrower is held to constitute a preference under any applicable bankruptcy, insolvency, or similar laws, or if for any other reason Lender is required to refund any sums to Borrower, such refund will not constitute a release of any liability of Guarantor under this Guaranty. It is the intention of Lender and Guarantor that Guarantor’s obligations under this Guaranty will not be discharged except by Guarantor’s performance of such obligations and then only to the extent of such performance.

13.

Financial Information and Litigation. Guarantor will deliver each of the following to Lender within 10 Business Days following a Notice from Lender requesting such information:

(a)

Guarantor’s balance sheet and profit and loss statement as of the end of (A) the quarter that ended at least 30 days prior to the due date of the requested items, and/or (B) the fiscal year that ended at least 90 days prior to the due date of the requested items.

(b)

Other Guarantor financial statements as Lender may reasonably require.

(c)

Written updates on the status of all litigation proceedings that Guarantor disclosed or should have disclosed to Lender as of the date of this Guaranty.

(d)

If an Event of Default has occurred and is continuing, copies of Guarantor’s most recent filed state and federal tax returns, including any current tax return extensions.

14.

Assignment. Lender may assign its rights under this Guaranty in whole or in part and upon any such assignment, all the terms and provisions of this Guaranty will inure to the benefit of such assignee to the extent so assigned. The terms used to designate any of the parties in this Guaranty will be deemed to include the heirs, legal representatives, successors and assigns of such parties, and the term “Lender” will also include any lawful owner, holder or pledgee of the Note.

15.

Complete and Final Agreement. This Guaranty and the other Loan Documents represent the final agreement between the parties and may not be contradicted by evidence of prior, contemporaneous or subsequent oral agreements. There are no unwritten oral agreements between the parties. All prior or contemporaneous agreements, understandings, representations, and statements, oral or written, are merged into this Guaranty and the other Loan Documents. Guarantor acknowledges that Guarantor has received a copy of the Note and all other Loan Documents. Neither this Guaranty nor any of its provisions may be waived, modified, amended, discharged, or terminated except by a writing signed by the party against which the enforcement of the waiver, modification, amendment, discharge, or termination is sought, and then only to the extent set forth in that writing.

16.

Governing Law. This Guaranty will be governed by and enforced in accordance with the laws of the Property Jurisdiction, without giving effect to the choice of law principles of the Property Jurisdiction that would require the application of the laws of a jurisdiction other than the Property Jurisdiction.

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17.

Jurisdiction; Venue. Guarantor agrees that any controversy arising under or in relation to this Guaranty may be litigated in the Property Jurisdiction, and that the state and federal courts and authorities with jurisdiction in the Property Jurisdiction will have jurisdiction over all controversies which may arise under or in relation to this Guaranty. Guarantor irrevocably consents to service, jurisdiction and venue of such courts for any such litigation and waives any other venue to which it might be entitled by virtue of domicile, habitual residence or otherwise. However, nothing in this Guaranty is intended to limit Lender’s right to bring any suit, action or proceeding relating to matters arising under this Guaranty against Guarantor or any of Guarantor’s assets in any court of any other jurisdiction.

18.

Guarantor’s Interest in Borrower. Guarantor represents to Lender that Guarantor has a direct or indirect ownership or other financial interest in Borrower and/or will otherwise derive a material financial benefit from the making of the Loan.

19.

Reserved.

20.

Reserved.

21.

Reserved.

22.

Reserved.

23.

Reserved.

24.

Reserved.

25.

State-Specific Provisions. State-specific provisions, if any, are included on Schedule 1 to this Guaranty.

26.

Community Property. If Guarantor (or any Guarantor, if more than one) is a married person, and the state of residence of Guarantor or his or her spouse (“ Guarantor Spouse ”) is a community property jurisdiction, then each of the following apply:

(a)

Guarantor (or each such married Guarantor, if more than one) agrees that Lender may satisfy Guarantor’s obligations under this Guaranty to the extent of all of Guarantor’s separate property and against the marital community property of Guarantor and Guarantor Spouse.

(b)

If Guarantor Spouse is not also a Guarantor of the Loan, Guarantor certifies that none of the assets shown on his or her financial statements submitted to Lender for purposes of underwriting the Loan were either (i) Guarantor Spouse’s individual property, or (ii) community property under the sole management, control, and disposition of Guarantor Spouse.

(c)

If Guarantor or Guarantor Spouse resides in Alaska, Arizona, Idaho, Louisiana, Nevada, New Mexico, Washington or Wisconsin, Guarantor has caused Guarantor Spouse to acknowledge this Guaranty as required on the signature page of this Guaranty.

27.

WAIVER OF TRIAL BY JURY.

(a)

GUARANTOR AND LENDER EACH COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY WITH RESPECT TO ANY ISSUE ARISING OUT OF THIS GUARANTY OR THE RELATIONSHIP BETWEEN THE PARTIES AS GUARANTOR AND LENDER THAT IS TRIABLE OF RIGHT BY A JURY.

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(b)

GUARANTOR AND LENDER EACH WAIVES ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO SUCH ISSUE TO THE EXTENT THAT ANY SUCH RIGHT EXISTS NOW OR IN THE FUTURE. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS SEPARATELY GIVEN BY EACH PARTY, KNOWINGLY AND VOLUNTARILY WITH THE BENEFIT OF COMPETENT LEGAL COUNSEL.

28.

Notices. All Notices required under this Guaranty will be provided in accordance with the requirements of Section 11.03 of the Loan Agreement. Guarantor’s address for Notices is as set forth on the signature page of this Guaranty unless changed in accordance with this Section 28.

29.

Attached Schedules and Riders. The following Schedules and Riders, if marked with an “X” in the space provided, are attached to this Guaranty:

	x	Schedule 1 – State Specific Provisions

	¨	Material Adverse Change Rider

	x	Minimum Net Worth/Liquidity Rider

	¨	Other:

30.

Attached Exhibit. The following Exhibit, if marked with an “X” in the space provided, is attached to this Guaranty:

Exhibit A

Modifications to Guaranty

IN WITNESS WHEREOF, Guarantor has signed and delivered this Guaranty under seal or has caused this Guaranty to be signed and delivered under seal by its duly authorized representative. Where applicable law provides, Guarantor intends that this Guaranty will be deemed to be signed and delivered as a sealed instrument.

(Remainder of page intentionally left blank; signature pages follow.)

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BLUEROCK RESIDENTIAL GROWTH REIT, INC. , a Maryland corporation

	By:	/s/ Michael Konig (SEAL)
		Name: Michael Konig
		Title: Authorized Signatory

Signed, sealed and delivered in the
presence of:

/s/ Molly Brown

Print Name: Molly Brown, Unofficial Witness

/s/ Dale Pozzi
Notary Public, New York
County, New York
[SEAL]

Date: September 27, 2016

My commission expires: January 28, 2017

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	CARROLL MULTIFAMILY REAL ESTATE FUND IV, LP , a Delaware limited partnership

	By: /s/ Josh Champion (SEAL)
	Josh Champion
	President of Acquisitions

Signed, sealed and delivered in the
presence of:

/s/ Norma R. Brantley

Print Name: Norma R. Brantley, Unofficial Witness

/s/ Stephanie Anne Meister
Notary Public, Georgia
County, Fulton
[SEAL]

Date: September 28, 2016

My commission expires: August 15, 2020

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(a)

Guarantor’s Notice Address:

		Name:	Bluerock Residential Growth REIT, Inc.
		Address:	712 Fifth Avenue, 9th Floor
			New York, New York 10019
			Attention: Jordan Ruddy and Michael Konig

		Name:	Carroll Multifamily Real Estate Fund IV, LP
		Address:	c/o Carroll Organization, LLC
			3340 Peachtree Road, NE, Suite 2250
			Atlanta, Georgia 30326

(b)

Guarantor represents and warrants that Guarantor is:

		¨ married
		¨ single
		x an entity

(c)

If Guarantor is married, then Guarantor represents and warrants that Guarantor’s state of residence is N/A and Guarantor Spouse’s state of residence is N/A .

(d)

If Guarantor (i) is married, and (ii) Guarantor Spouse is not also a Guarantor of this Loan, and (iii) Guarantor or Guarantor Spouse’s state of residence is Alaska, Arizona, Idaho, Louisiana, Nevada, New Mexico, Washington, or Wisconsin, then Guarantor must cause Guarantor Spouse to sign below in accordance with Section 26 of this Guaranty.

Any person signing this Guaranty solely as a Guarantor Spouse will bind only Guarantor Spouse’s marital community property and will not bind Guarantor Spouse’s separate property to the payment and performance of the Guarantor’s obligations under this Guaranty.

	Guarantor Spouse’s Signature:	N/A

	Guarantor Spouse’s Printed Name:	N/A

	Guarantor Spouse’s Address:	N/A

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SCHEDULE 1

STATE SPECIFIC PROVISIONS

Georgia

Guarantor waives the benefit of O.C.G.A. Section 10-7-24.

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Schedule 1 - Page 1

RIDER TO GUARANTY

MINIMUM NET WORTH/LIQUIDITY

(Revised 7-12-2016)

The following changes are made to the Guaranty which precedes this Rider:

Section 20 is deleted and replaced with the following:

20.

Minimum Net Worth/Liquidity Requirements.

(a)

Guarantor must maintain a minimum net worth of $15,000,000 with liquid assets of at least $4,843,100 (collectively, “ Minimum Net Worth Requirement ”).

(b)

In addition to the financial information that Guarantor is required to provide pursuant to Section 13 of this Guaranty, annually within 90 days after the end of each fiscal year of Guarantor (or at the end of each calendar year with respect to any Guarantor that is an individual), Guarantor must provide Lender with a written certification (“ Guarantor Certification ”) of the net worth and liquid assets of Guarantor, derived in accordance with customarily acceptable accounting practices. The Guarantor must certify the Guarantor Certification under penalty of perjury as true and complete.

(c)

Within 30 days of receipt of Notice from Lender that Guarantor has failed to maintain the Minimum Net Worth Requirement, Guarantor must either:

(i)

cause one or more natural persons or entities who individually or collectively, as applicable, meet the Minimum Net Worth Requirement and is/are acceptable to Lender, in its sole discretion, to execute and deliver to Lender a guaranty in the same form as this Guaranty, without any cost or expense to Lender; or

(ii)

deliver to Lender a letter of credit or other collateral acceptable to Lender in its discretion meeting the following conditions, as applicable:

(A)

If Guarantor supplies a letter of credit, the letter of credit must be in the form required by Lender and satisfy the requirements for Letters of Credit set forth in Section 11.15 of the Loan Agreement, except that an updated nonconsolidation opinion will not be required.

(B)

The letter of credit or other collateral must be in an amount equal to the greatest of:

(X)

the positive difference, if any, obtained by subtracting the net worth identified in the Guarantor Certification from the minimum net worth required under the Minimum Net Worth Requirement,

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Minimum Net Worth/Liquidity

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(Y)

the positive difference, if any, obtained by subtracting the liquid assets identified in the Guarantor Certification from the minimum liquid assets required under the Minimum Net Worth Requirement, and

(Z)

$100,000.

(d)

Lender will hold the letter of credit or other collateral until one of the following occurs:

(i)

Lender has a claim against the Guarantor, in which case Lender will be entitled to draw on the letter of credit and apply the proceeds or the other collateral to such claim(s), in Lender’s sole discretion.

(ii)

Lender returns the letter of credit or other collateral to Guarantor pursuant to Section (e).

(e)

Provided no Event of Default then exists, Guarantor will be entitled to request a return of the unused portion, if any, of the letter of credit or other collateral in the event it delivers to Lender evidence in form and substance satisfactory to Lender, including a Guarantor Certification, that Guarantor has satisfied the Minimum Net Worth Requirement.

(f)

If there is more than one Guarantor of the Indebtedness, Lender will determine compliance with the Minimum Net Worth Requirement based on the aggregate net worth and liquid assets of all Guarantors of the Indebtedness. However, each Guarantor of the Indebtedness will otherwise satisfy all other requirements of this Section 20 on an individual basis at all times.

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Exhibit 10.10

Prepared by, and after recording

return to:

S.R. Sidarth, Esquire

Troutman Sanders LLP

Post Office Box 1122

Richmond, Virginia 23218-1122

Freddie Mac Loan No. 708657427

Nevadan Apartments

ASSIGNMENT OF SECURITY INSTRUMENT

(Revised 12-19-2014)

FOR VALUABLE CONSIDERATION, KEYBANK NATIONAL ASSOCIATION , a national banking association (“ Assignor ”), having its principal place of business at c/o KeyBank Real Estate Capital - Servicing Department, 11501 Outlook Street, Suite 300, Overland Park, Kansas 66211, Mailcode: KS-01-11-0501, Attn: Servicing Manager, hereby assigns, grants, sells and transfers to the FEDERAL HOME LOAN MORTGAGE CORPORATION , a corporation organized and existing under the laws of the United States (“ Assignee ”), having its principal place of business at 8200 Jones Branch Drive, McLean, Virginia 22102, and Assignee’s successors, transferees and assigns forever, all of the right, title and interest of Assignor in and to the Multifamily Deed to Secure Debt, Assignment of Rents and Security Agreement dated as of October 13, 2016, entered into by BR CARROLL GLENRIDGE, LLC , a Delaware limited liability company (“ Borrower ”), for the benefit of Assignor, securing an indebtedness of Borrower to Assignor in the principal amount of $48,431,000.00, recorded in the land records of Fulton County, Georgia prior to this Assignment (“ Instrument ”), which indebtedness is secured by the property described in Exhibit A attached to this Assignment and incorporated into it by this reference.

Together with the Note or other obligation described in the Instrument and all obligations secured by the Instrument now or in the future.

IN WITNESS WHEREOF, Assignor has executed this Assignment as of the 13th day of October, 2016, to be effective as of the effective date of the Instrument.

Assignment of Security Instrument

Page 1

ASSIGNOR:

KEYBANK NATIONAL ASSOCIATION , a national banking association

By:	/s/ Tonya E. Barnes	(SEAL)
	Tonya E. Barnes
	Vice President

Signed, sealed and delivered in the
presence of:

/s/ Sharon D. Callahan

Print Name: Sharon D. Callahan, Unofficial Witness

/s/ Omara A. Smith-Newton
Notary Public, Omara A. Smith-Newton
County, District of Columbia
[SEAL]

Date: September 28, 2016

My commission expires: April 30, 2021

Assignment of Security Instrument

Page 2

EXHIBIT A

DESCRIPTION OF THE PROPERTY

(Nevadan Apartments)

TRACT ONE :

ALL THAT TRACT of land in Land Lots 38 and 69 of the 17th District of Fulton County, Georgia, described as follows:

Assignment of Security Instrument

Page A- 1

TRACT TWO :

ALL THAT TRACT of land in Land Lots 38 and 69 of the 17th District of Fulton County, Georgia, described as follows:

Assignment of Security Instrument

Page A- 2

TOGETHER WITH a non-exclusive right, title and interest in and to all non-exclusive easements contained in that certain Sewer Easement Agreement between Andrew E. Chandler and Independent Living International Corp. dated as of July 20,1989, recorded in Deed Book 12661, Page 107, Fulton County, Georgia records.

Assignment of Security Instrument

Page A- 3

Exhibit 10.11

PROPERTY MANAGEMENT AGREEMENT

dated as of October 13, 2016

between

BR CARROLL GLENRIDGE, LLC

Owner

and

CARROLL MANAGEMENT GROUP, LLC

Manager

PROPERTY MANAGEMENT AGREEMENT

THIS PROPERTY MANAGEMENT AGREEMENT (this " Agreement ") is made as of October 13, 2016 (the “ Effective Date ”), by and between BR CARROLL GLENRIDGE, LLC , a Delaware limited liability company (" Owner "), and CARROLL MANAGEMENT GROUP, LLC , a Georgia limited liability company (" Manager ").

RECITALS :

A. Owner is the owner of certain real property more particularly described in Exhibit “A” attached hereto and incorporated herein by this reference, upon which certain improvements consisting of a 480-unit multifamily Project and related amenities, landscaping, parking facilities and other common areas have been constructed (collectively, the " Project ").

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

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

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

NOW, THEREFORE , in consideration of the premises and the sum of TEN AND NO/100 DOLLARS ($10.00) paid by Owner to Manager, and for other valuable consideration, including the mutual covenants hereinafter set forth, the receipt, adequacy, and sufficiency of which are acknowledged by the parties hereto, Owner and Manager covenant and agree as follows:

Definitions.

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

“ Annual Business Plan ” shall mean, with respect to calendar year 2016, the Annual Business Plan for the management and operation of the Project attached hereto as Exhibit “B” and incorporated herein by this reference, and for all other years during the term of this Agreement, the Annual Business Plan for such year established pursuant to Section 5(e) below.

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

“ Approved Operating Expenses ” shall mean, with respect to calendar year 2016, the expenses set forth in the Annual Business Plan attached hereto as Exhibit “B” and incorporated herein by this reference, and for all other years during the term of this Agreement, the expenses contained in the Annual Business Plan for such year established pursuant to Section 5(e) below, together with all other operating expenses with respect to the Project which are otherwise approved by Owner or permitted pursuant to the express terms of this Agreement.

“ Cause ” shall have the meaning set forth in the Operating Agreement.

“ Claims ” shall have the meaning set forth in Section 9(a) below.

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

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

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

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

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

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

“ Excluded Items ” means:

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

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

(d) proceeds of condemnation awards;

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

(f) interest on investments or otherwise;

(g) abatement of taxes;

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

(i) discounts and dividends on insurance policies;

(j) door fees, marketing fees or similar lump sum payments from third parties under laundry contracts, cable contracts, antennae leases, and similar arrangements which are in addition to the monthly payments payable thereunder by such third parties;

(k) revenue generated from third party contracts negotiated by Owner and managed by Owner or a third party (other than Manager); and

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

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

“ Loan Documents ” shall mean any and all documents evidencing or securing any indebtedness obtained by Owner and secured by the Project with respect to which Manager has received written notice from Owner, as same shall be amended, replaced, refinanced or otherwise modified from time to time during the Term of this Agreement. Manager acknowledges receipt of the Loan Documents of even date herewith evidencing and securing that certain Loan in the original maximum principal amount of $48,431,000.00, more or less, from KeyBank National Association, and its successors or assigns (collectively, “ Lender ”) to Owner.

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

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

“ Manager’s Event of Default ” shall have the meaning set forth in Section 10(a) below.

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

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

(a) Rental Income;

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

“ Operating Agreement ” shall mean that certain Limited Liability Company Agreement for BR Carroll Glenridge JV, LLC, dated as of the Effective Date.

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

“ Owner’s Event of Default ” shall have the meaning set forth in Section 10(c) below.

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

“ Project ” shall have the meaning set forth in the recitals above.

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

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

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

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

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

2. Appointment of Manager . On and subject to the terms and conditions of this Agreement, Owner hereby retains Manager commencing on the Effective Date (the “ Commencement Date ”) to manage and lease the Project.

3. Term . This Agreement shall commence on the Commencement Date and shall continue for a term of thirty-six (36) months (the “ Initial Term ”) or until Manager is terminated pursuant to Section 11 of this Agreement. For avoidance of doubt, the Initial Term shall be automatically extended for additional twelve (12) month periods unless either party terminates this Agreement pursuant to Section 11 .

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

(a) Owner agrees to pay to Manager a fee computed and payable monthly in arrears in an amount equal to three percent (3.0%) of Monthly Gross Receipts (the “ Management Fee ”). The Management Fee shall be deducted each month from the Monthly Gross Receipts to be paid to Owner pursuant to this Agreement. The foregoing notwithstanding, during the initial twenty four (24) months of the Initial Term, the Management Fee shall be determined and paid to Manager on a calendar quarter basis rather than on a monthly basis and shall be subject to the deferral and subordination thereof described in Section 6.1(c) of the Operating Agreement.

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

(d) A construction management fee in the amount of five percent (5.0%) of any expenses incurred in connection with the original capital expenditure plan attached hereto as Exhibit G . Any additional support (and any applicable compensation with respect thereto) for any capital improvements beyond those set forth on Exhibit G shall be agreed to in advance by Owner and Manager. Any construction management fee shall in all cases be calculated and paid upon each respective draw and within thirty (30) days of final draw or following completion of the restoration or satisfaction of the claim, whichever is applicable.

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

(f) Intentionally Omitted

(g) Upon the termination of this Agreement by Owner pursuant to Section 11(c) , Owner shall pay to Manager a close-out fee equal to the sum of the Management Fees paid by Owner to Manager for the full three (3) months immediately preceding the date of termination (the “ Close Out Fee ”). The Close Out Fee shall be deducted from the final month’s Monthly Gross Receipts to be paid to Owner.

Authority and Responsibilities of Manager .

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

(b) Standard of Care . Manager shall perform its duties and obligations in a professional manner, and shall maintain the Project in accordance with the applicable Annual Business Plan and in accordance with the standards a reasonably prudent multifamily property manager would employ with respect to properties of similar age, size, and class as the Project in the market area in which the Project is located.

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

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

(e)

Annual Business Plan .

(i)

The initial Annual Business Plan for the period from the Effective Date through the end of calendar year 2016, which is deemed approved by Owner and Manager and is attached hereto as Exhibit “B ” and is incorporated herein for all intents and purposes under this Agreement (the “ Initial Business Plan ”). The foregoing notwithstanding, the Manager has also delivered to Owner on or before September 23, 2016 the proposed Annual Business Plan for the calendar year 2017.

(ii)

In addition to the Annual Business Plan for 2017 prepared by Manager and delivered to Owner prior to the Effective Date in accordance with the preceding Section, Manager agrees to prepare for the calendar year 2018, an Annual Business Plan for the operation of the Project for Owner's review and approval, no later than September 15 of the immediately preceding year for the 2018 (and any subsequent) calendar year. If final approval of a proposed Annual Business Plan (including the 2017 Annual Business Plan) by Owner has not been given by the beginning of the year to which such proposed Annual Business Plan relates, Manager shall operate the Project on the basis of the previous year’s approved Annual Business Plan, adjusted by (i) assuming that the revenue from the Project will increase to 103% of the revenues collected in the prior year, (ii) assuming that the Controllable Expenses will increase to 103% of the amount of the actual Controllable Expenses incurred in the prior year, (iii) increasing all Uncontrollable Expenses by any anticipated or known increases in such Uncontrollable Expenses, and (iv) including any Emergency Expenditure (as defined in Section 5(k) below). Notwithstanding the foregoing to the contrary, if, prior to the commencement of calendar year 2017, the parties have not agreed on the budget for capital expenditures at the Project in the Annual Business Plan for calendar year 2017, there shall be no budgeted capital expenditures for calendar year 2017; provided, however, that any incomplete capital projects commenced in calendar year 2016 and contemplated in the Initial Business Plan shall be funded as provided in the Initial Business Plan until such capital projects are completed.

(iii)

If Manager and Owner agreed to the Annual Business Plan for calendar year 2018 in accordance with subsection (ii) above, then the Annual Business Plan for calendar year 2019 shall also be determined in accordance with the applicable provisions of subsection (ii) above. If, however, Manager and Owner were unable to agree to the Annual Business Plan for calendar year 2018, then Owner may establish the Annual Business Plan for calendar year 2019 without Manager’s consent.

(iv)

For Annual Business Plans for calendar years 2020 and all subsequent calendar years, if applicable, Manager shall have the right to prepare and propose an Annual Business Plan for such calendar year on or prior to September 15 of the immediately preceding year (without obligation to do so), and Owner may, regardless of the information contained in Manager’s proposal, establish the Annual Business Plan for the applicable calendar year, without Manager’s consent.

(v)

Manager and Owner each acknowledge and agree that, in establishing the Annual Business Plans in accordance with this Section 5(e), each shall be obligated to act reasonably and in good faith, taking into account past performance of the Project, leasing trends and competitive properties within the market where the Project is located, the age of the Project and the units at the time such Annual Business Plan is established, and such other factors as reasonably prudent owners and managers of multifamily assets substantially similar to the Project would take into account in order to maximize revenue therefrom.

(vi)

No material deviations (as defined herein) from any item in an Annual Business Plan approved in accordance with the terms herein shall be made by Manager without the prior approval of the “ Management Committee ” (as defined in the Operating Agreement), to the extent required by the Operating Agreement. The Manager shall provide quarterly updates to the Annual Business Plan, solely for informational purposes. Each Annual Business Plan shall include the information set forth in Exhibit “E” . Owner (and its sole member) will consider the proposed Annual Business Plan in accordance with the terms of the Operating Agreement and will consult with Manager prior to the commencement of the forthcoming calendar year in order to agree on an Annual Business Plan for such calendar year. In no event shall Owner have the right to modify the Annual Business Plan to reduce the Management Fee or Reimbursable Expenses otherwise due pursuant to Section 4 . In no event shall Manager be deemed in default under this Agreement if such changes by Owner to the Annual Business Plan cause Manager to have insufficient funds to perform its obligations hereunder. Manager agrees to use commercially reasonable efforts to ensure that the actual costs of maintaining and operating the Project shall not exceed the amount reasonably necessary and, in any event, will not exceed the Annual Business Plan either in total amount or in any one accounting category. Notwithstanding anything to the contrary, Manager shall secure Owner's prior written approval for any expenditure that will result in an excess of the annual budgeted amount set forth in the Annual Business Plan in any one accounting category by the lesser of ten percent (10%) or $10,000 or $25,000 in the aggregate for all categories (a “ material deviation ”). Manager shall promptly advise and inform the Owner of any transaction, notice, event or proposal directly relating to the management and operation of the Project which does or is likely to significantly affect, either adversely or favorably, the Project, other assets of the Owner or cause a material deviation from the Annual Business Plan. Nothing contained herein shall in any way diminish the obligations or duties of Manager hereunder.

(f)

Leasing, Collection of Rents, Etc .

(i) Manager shall use commercially reasonable efforts consistent with the standard of care set forth herein to lease apartment units in accordance with all Applicable Laws, to retain residents and to maximize Rental Income. Manager shall not enter into any Lease which has a term less than six (6) months or greater than fifteen (15) months, except as approved by Owner or as may be expressly permitted by any loan documents applicable to the Project entered into by Owner from time to time during the term hereof. Manager shall comply in all material respects with all of the terms and conditions applicable to the leasing of the Project set forth in any Loan Documents.

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

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

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

(v) Manager shall, at Owner's expense, market the Project for rental, terminate Leases, evict Tenants, institute and settle suits for delinquent payments as Manager, in its reasonable discretion, deems advisable, subject to other provisions of this Agreement. In connection therewith, Manager may, at Owner's expense, as limited by the provisions of Section 5(l) of this Agreement, consult and retain legal counsel. Further, notwithstanding anything contained in this Agreement to the contrary, in no event shall Manager institute or defend any legal proceedings where the amount in dispute exceeds $5,000.00 without Owner’s prior written consent.

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

(vii) Manager shall, at Owner’s written request, cooperate with the seller of the Project to Owner for purposes of determining any post-closing adjustment to the closing prorations or any allocation of revenues received for the Project in accordance with the terms of the applicable purchase contract; provided, however, Manager shall not remit any funds to the seller of the Project pursuant to any such determination without Owner’s prior review of such proposed distributions and Owner’s express authorization to remit such funds.

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

(g) Repair, Maintenance and Service .

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

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

(h) Manager's Employees . Manager shall have in its employ at all times a sufficient number of employees to enable it to professionally manage the Project in accordance with the terms of this Agreement, as determined by Manager in its professional discretion and subject to the Annual Business Plan. Manager shall prepare, execute and file all forms, reports and returns, as applicable, but only to the extent expressly required by Applicable Laws, and Manager shall be permitted to rely on the advice of counsel and other experts in making the determination of what is required. Manager is authorized to screen, test, investigate, hire, supervise, discharge, and pay all personnel necessary in Manager’s reasonable discretion to maintain and operate the Project. The foregoing notwithstanding; in the case of hiring with respect to any property manager, assistant property manager, leasing manager, maintenance supervisor or similar position for the Project, Manager shall provide Owner with the opportunity to participate in any related interviews of candidates for such positions and to offer comments or suggestions with respect to Manager’s hiring of any proposed candidates for such positions; provided, however, nothing herein is intended to provide Owner with any right to make any hiring decisions on behalf of the Manager, it being understood that the decision as to the hiring of Manager’s employees shall in all events remain fully and solely vested in the Manager. Owner shall reimburse Manager for all employee related expenses, liabilities, and administrative burden (including, without limitation, costs for all full-time and part-time employees such as gross salaries and wages, payroll taxes, health insurance, workers compensation, and other benefits of Manager’s employees including the costs for training, software, and other administrative and processing costs, including without limitation, payroll processing, risk management, benefits administration, travel, marketing expenses, bank charges, telephone and answering service [which may be equitably allocated on a prorata basis (based on the gross revenues of each such property) among the Project and other properties managed by Manager, if applicable]) and all costs related to pre-employment testing and screening, provided, however, that all of the foregoing costs shall be subject to the then effective Annual Business Plan or otherwise permitted or approved by Owner pursuant to this Agreement. Owner expressly acknowledges and agrees that Manager may use employees normally assigned to other work centers and/or part-time employees to properly staff the Project, in which case wages and related expenses shall be reimbursed on a pro rata basis for the time actually spent for the Project (rather than being allocated based on the gross revenues of each property); provided, however, Owner shall not pay or reimburse Manager for all or any part of Manager's general overhead expenses, including salaries and payroll expenses of personnel of Manager, except as otherwise set forth herein.

(i) Books and Records . Manager shall keep, or shall supervise and direct the keeping of, a comprehensive system of office records, books and accounts pertaining to the Project. Such accounts shall be maintained using accrual method of accounting in accordance with generally accepted accounting principles (GAAP); provided that Owner may instruct Manager in writing to utilize an accounting method other than GAAP. Manager shall preserve all invoices for a period of seven years (or such other period as may be required by applicable law) or until this Agreement terminates and such items are delivered to Owner at Owner’s request and expense. All books, correspondence and data pertaining to the leasing, management and operation of the Project shall, at all times, be safely preserved. Such books, correspondence and data shall be available to Owner at all reasonable times, upon not less than forty-eight (48) hours’ advance notice, for Owner’s inspection thereof, and shall, upon the termination of this Agreement be delivered to Owner in their entirety and upon request of Owner be delivered to Owner within thirty (30) days of such request. Manager shall maintain files of all original documents relating to Leases, vendors and all other business of the Project in an orderly fashion at the Project, which files shall be the property of Owner and shall at all times be open to Owner's inspection and available for copying at Owner's request, cost and expense. Manager shall comply with the Capitalization and Expense Policy of Bluerock Real Estate, L.L.C., a copy of the current form of which has been provided to Manager.

(j) Reporting . Manager shall electronically furnish Owner with the statements and reports listed on Exhibit “F” attached hereto. For the purposes of delivering any and all statements and reports to be made on a monthly basis pursuant to Exhibit “F” , Owner acknowledges and agrees that Manager shall base such statements and reports on information current as of the close of business on the last day of the month, including applicable accruals, with respect to which such statements or reports apply. In addition, an annual audit report shall be prepared at Owner's expense, showing a balance sheet and an income and expense statement, all in reasonable detail and certified by an independent certified public accountant approved by Owner in its sole discretion. Within five (5) business days after the end of each calendar quarter of each year, Manager shall cause to be furnished to BR Glenridge JV Member, LLC (“Bluerock”) such information as reasonably requested in writing by Bluerock as is necessary for any reporting requirements of Bluerock or any direct or indirect members of Bluerock or for any reporting requirements of any REIT Member (as defined in the Operating Agreement) (whether a direct or indirect owner) to determine its qualification as a real estate investment trust and its compliance with REIT Requirements (as defined in the Operating Agreement) as shall be reasonably requested by Bluerock. Further, the Manager shall cooperate in a reasonable manner at the request of Owner and any direct or indirect member of Owner to work in good faith with any designated accountants or auditors of such party or its Affiliates so that such party or its Affiliate is able to comply with its public reporting, attestation, certification and other requirements under the Securities Exchange Act of 1934, as amended, applicable to such entity, and to work in good faith with the designated accountants or auditors of 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. Owner may request, and Manager shall provide within a commercially reasonable period after such request, assistance with draw requests, ad hoc reports and special accounting projects at a reasonable cost to be pre-approved by Owner. Manager shall also prepare and provide to Owner such reports and information as reasonably required by Owner to prepare the reports and tax returns required under (i) its limited liability company operating agreement and (ii) the Loan Documents. Except as noted above, in Section 4(b) or Exhibit F of this Agreement, all costs and expenses incurred in connection with the preparation of any statements, budgets, schedules, computations and other reports required under this Agreement shall be the responsibility of Manager.

(k) Approved Operating Expenses; Emergency Expenditures . The Approved Operating Expenses which Manager is authorized to incur and pay on behalf of Owner under this Agreement shall in all respects be limited to those expenses set forth in the Annual Business Plan for the period during which such expenses are paid; provided, however , that (x) notwithstanding the inclusion of any such expense in the Annual Business Plan, Manager shall be required to obtain Owner’s specific approval of any capital expenditure in excess of $25,000 prior to incurring such expense, and (y) Manager shall be authorized to incur and pay for all other expenses permitted pursuant to Section 5(e) above, or which are otherwise expressly permitted by this Agreement regardless of whether or not such expenses are within the limitations set by the Annual Business Plan. Any expenses permitted pursuant to Section 5(e) or otherwise approved in writing by Owner which were not included in the Annual Business Plan shall be deemed sums permitted to be expended by Manager in addition to (and not in limitation of) the amounts permitted under the Annual Business Plan. The foregoing notwithstanding, if an Emergency occurs necessitating repairs the cost of which would have the effect of exceeding the Annual Business Plan by more than those limitations as provided above (such expenses referred to herein as “ Emergency Expenditures ”), and Manager is unable to communicate promptly with Owner, then Manager may order, contract for and pay for such Emergency Expenditures not to exceed $20,000, with the cost thereof being included as a Reimbursable Expense for the purposes of the Agreement, and Manager shall promptly thereafter notify Owner of any such expenses and the nature of the Emergency.

(l)

Legal Proceedings and Compliance with Applicable Laws .

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

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

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

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

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

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

(vii) Manager agrees that the Project shall be offered to all prospective tenants on a nondiscriminatory basis without regard to race, color, religion, sex, family status, veteran status, disability, national origin or any other classification protected by local, state or federal law in accordance with Applicable Law.

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

(n) Insufficient Cash Flow . In the event that the Depository Accounts for the Project do not have sufficient funds to cover the monetary obligations of Manager or the Project pursuant to this Agreement, Manager shall give Owner prompt written notice with respect to such shortfall and if Owner has not promptly provided funds, then Manager will have no duty to perform any such obligations until Owner provides sufficient funding, and Manager shall not be in default under this Agreement for failure to perform any obligation hereunder as a result of such lack of funds. If Manager suspects that the cash flow from the Project will not, at any time, be sufficient to cover any Project related expenses, Manager shall promptly notify Owner, and Manager and Owner shall mutually determine the order in which the obligations of the Project will be satisfied; provided, however, that Manager and Owner agree that available cash flow will in any event first be applied to Uncontrollable Expenses that are then due and payable.

Insurance Requirements .

(a)

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 XII or higher.

(i)

COMMERCIAL GENERAL LIABILITY INSURANCE: Commercial general liability insurance for the benefit of Manager and Owner in the amount of $1,000,000 per occurrence and $2,000,000 in the aggregate covering claims for bodily injury, property damage, personal and advertising injury, products and completed operations (the "Manager's Liability Insurance"). The Manager’s Liability Insurance shall provide for:

Coverage on an occurrence form.

Contractual liability coverage covering the indemnification section of this Agreement.

“Additional Insured – Owners, Lessees or Contractors – (FORM B), CG 20 10 11 85” or its equivalent providing coverage for both ongoing and completed operations and naming Owner as an additional insured.

Manager’s policy shall not include a Limitation of Coverage Real Estate Operations (CG 22 60 07 98) endorsement, Real Estate Property Managed Endorsement (CG 22 70 11 85) or similar endorsements excluding or limiting coverage for bodily injury, property damage or personal and advertising injury.

Manager shall continue to name Owner as an additional insured for a period of three years following the termination of this Agreement. Manager shall provide Owner with an original certificate of insurance not less than fifteen days prior to each renewal date during this three-year period.

If the Manager utilizes the services of an employee leasing company, then its general liability policy must include ISO endorsement CG 04 24 10 93 Coverage for Injury to Leased Workers.

The pollution exclusion must be modified to include coverage for pollution claims related to a hostile fire as well as pollutants that are released from the building’s heating equipment or equipment used to heat water.

A separation of insured clause.

(ii)

UMBRELLA OR EXCESS LIABILITY: limits of $5,000,000: Providing follow-form coverage over the Commercial General Liability, Automobile Liability and Employers’ Liability policies.

(iii)

AUTO LIABILITY INSURANCE: Manager, at its expense which is not reimbursable, shall carry and maintain business auto liability insurance covering owned, non-owned and hired vehicles with a limit of not less than $1,000,000 per accident. If the Manager utilizes the services of an employee leasing company then its Commercial Auto Liability policy must include ISO endorsement CA 23 25 07 97 Coverage for Injury to Leased Workers. Owner shall be named as additional insured.

(iv)

WORKERS’ COMPENSATION AND EMPLOYERS’ LIABILITY INSURANCE:

Workers’ compensation – Statutory limits of insurance covering employees, including principals. In the event the principal has waived coverage for himself/herself, it is hereby agreed by all parties that the principal may not perform any work under this Agreement.

Employers’ liability limits.

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

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

(v)

PROPERTY MANAGER’S ERRORS AND OMISSIONS LIABILITY:

Limits of Insurance: $1,000,000 per occurrence, $2,000,000 aggregate

If coverage is on a claims-made basis, the retroactive date must be a date that is not later than the date on which Manager began performing services on behalf of the Owner.

Contingent bodily injury and property damage coverage.

Coverage shall be maintained for a period of three years after the termination of services. Manager shall provide Owner with an original certificate of insurance on or before each renewal date during this three-year period.

The policy shall include a separation of insureds clause.

(vi)

COMMERCIAL CRIME INSURANCE:

Limits of Insurance: $1,000,000 employee dishonesty, $1,000,000 forgery or alteration, $1,000,000 computer fraud, $1,000,000 wire funds transfer fraud, $1,000,000 money and securities on and off premises

Third party coverage.

No limitation or exclusion related to acts of collusion.

Owner shall be included as Loss Payees as its interest may appear.

Coverage shall be included for theft of Owner’s property by Manager’s owners, directors and officers.

The definition of employee shall include leased employees if the Manager utilizes the services of an employee leasing firm.

(vii)

EMPLOYMENT PRACTICES LIABILITY INSURANCE:

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.

(viii)

CERTIFICATES OF INSURANCE: Manager shall not begin performing services hereunder until original certificates of insurance showing evidence of the coverages outlined below have been furnished to and approved by Owner. Each policy shall provide for thirty (30) days' advance written notice of cancellation or material change by mail to Owner from the insurance company, and this provision shall be evidenced on the certificates. Evidence of renewal or replacement coverages shall be furnished to the Owner not less than ten (10) days prior to expiration but in no event later than the renewal date itself.

(b)

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 VIII or higher.

(i)

PROPERTY INSURANCE: Hazard insurance in the amount of the full replacement cost of the Project, and such other property insurance as Owner may elect, at Owner's expense.

(ii)

LIABILITY INSURANCE: Commercial general liability insurance including contractual liability for insured contracts, on an "occurrence" basis, naming Manager as an additional insured, with limits of not less than Three Million Dollars ($3,000,000) per occurrence (the "Owner's Liability Insurance"). This limit may be satisfied by a combination of CGL and umbrella/excess liability insurance. The Owner's Liability Insurance shall include coverage for losses arising from the ownership, management, and operation of the Project. This insurance shall be primary for Owner and Manager with respect to the Project.

(iii)

CERTIFICATE OF INSURANCE: Owner shall provide to Manager a certificate of insurance evidencing such coverage from an insurance carrier with an A.M. Best Rating of A VIII or higher reflecting that the Owner's Liability Insurance is effective in accordance with this section and that the Owner's Liability Insurance will not be canceled without at least thirty (30) days prior written notice to Manager.

(c)

MASTER INSURANCE PROGRAM. Alternatively, Manager has arranged, through its insurance agent, a master insurance program in which owners of property managed by Manager may participate (the “ Master Insurance Program ”). If Owner elects to participate in the Master Insurance Program, the Owner shall pay the amount thereof set forth on the insurance invoice delivered to Owner under the Master Insurance Program, which invoice may include administrative charges in excess of the actual insurance premiums charged by the underling insurance carriers. All insurance coverage provided under the Master Insurance Program shall be terminated when this Agreement expires or is sooner terminated without the need for prior notice of termination of the insurance coverage. Owner acknowledges that Manager is not an expert or consultant regarding insurance coverages and requirements; accordingly, Owner assumes all risk with respect to the adequacy of insurance coverages, whether such insurance is provided through the Master Insurance Program or otherwise, and Manager shall have no liability therefor in any respect. Manager shall be named an additional insured under any policies of insurance carried by Owner with respect to the Project.

(d)

ANNUAL BUSINESS PLAN . Upon Manager’s submission of each Annual Business Plan, Manager shall affirmatively and in writing confirm and set forth the scope of all existing insurance coverage, including confirming coverage for the forthcoming year.

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

(a)

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

(b)

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

(c)

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

(d)

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

(e)

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

(f)

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

Representations of Owner . Owner represents and warrants, that:

(a)

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

(b)

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

(c)

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

Indemnification .

(a)

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

(b)

Indemnification of Manager by Owner . Owner shall indemnify, protect, defend and hold harmless Manager and its Affiliates, together with their respective officers, directors, agents, employees and affiliates (collectively, " Manager Indemnitees ") from and against any and all Claims actually incurred by any Manager Indemnitee resulting from performance of its obligations under this Agreement, except that this indemnification shall not apply with respect to any Claims (i) resulting from any act by Manager, its employees, officers, agents or contractors outside the scope of Manager's authority hereunder, (ii) resulting from any act or failure to act by Manager, its employees, officers, agents or contractors constituting gross negligence, willful misconduct, fraud or material breach of this Agreement, (iii) resulting from Claims made by current, former employees or applicants for employment arising from hiring, supervising , firing , sexual harassment, and other employment-related torts, (iv) any act by Manager, its employees, agents or contractors knowingly in violation of any Applicable Law, or (v) any claims for financial harm that are the type covered under Manager’s property management errors and omissions/professional liability insurance.

(c)

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

10.

Defaults .

(a)

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

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

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

iii. The failure of the net operating income derived from operation of the Project for any twelve (12) consecutive month period to be 92% or more of the net operating income projected in the applicable Annual Business Plan (or Annual Business Plans, as applicable) for such trailing twelve (12) consecutive month period (the “ Performance Standard ”). For purposes of this Section 10(a)(iii) , the Performance Standard shall be tested every six (6) months, with the first test occurring in the month after the first (1 ^st ) anniversary of this Agreement;

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

v. The occurrence of any other for Cause event with respect to Manager’s Affiliate, Carroll Co-Invest IV Glenridge, LLC, a Georgia limited liability company.

(b)

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

(c)

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

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

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

(d)

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

11.

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

(a)

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

(b)

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

(c)

Termination Without Cause . Beginning on the first day of the thirty-fifth (35 ^th ) month of the Initial Term, and continuing thereafter during any renewal term pursuant to Section 3 , either Owner or Manager may give a written notice of termination, providing the other party at least thirty (30) days’ prior written notice, without cause.

(d)

Termination Upon Sale . Upon any sale of the Project, this Agreement shall automatically terminate as of the closing date of such sale.

(e)

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

(f)

Final Accounting; Delivery of Project Upon Termination .

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

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

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

ii. Within thirty (30) days after termination of this Agreement, Manager shall deliver to Owner a final accounting for the Project, reflecting the balance of income and expenses with respect to the Project as of the date of termination.

iii. Termination of this Agreement under any of the provisions of this Agreement shall not release either party as against the other from liability for failure to perform any of its duties or obligations as expressed herein and required to be performed prior to such termination. Owner agrees to cooperate with Manager, and Manager agrees to cooperate with Owner, in the performance of the obligations set forth in this Section 11(f) .

Notwithstanding anything set forth in this Agreement to the contrary, so long as that loan (the “ Loan ”) in favor of Owner from Lender is outstanding, Owner and Manager acknowledge and agree that Lender may require termination of this Agreement as more particularly set forth in the Loan Documents, including, without limitation, any subordination of this Agreement executed by Manager in connection therewith (the “ Subordination ”).

12.

Confidentiality .

(a)

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

(b)

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

13.

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

14.

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

15.

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

16.

Use of Trademark . If at any time the Project shall be promoted and branded using the name “ARIUM” (the “ Trademark ”), as elected by Owner in its sole discretion, Owner and Manager acknowledge and agree that the Trademark is a federally registered trademark owned by an Affiliate of Manager, and at such time as such election is made by Owner, Manager shall cause its Affiliate, Carroll Arium, LLC (“ Licensor ”), to grant to Owner a non-exclusive, royalty-free license to use (but not the right to sublicense) the Trademark for such purpose (the “ License ”) in form and substance reasonably acceptable to Licensor and Owner. Owner and Manager acknowledge and agree that, upon mutual execution of the License, the Project shall be promoted and branded using the Trademark until such time as the License has been terminated in accordance with its terms, and Owner, upon execution of the License, shall be deemed to have granted to Manager a non-exclusive, royalty-free license to use (but not sublicense) the Trademark for such purposes, subject to and in accordance with the terms of the License.

17.

Mortgage Provision . Notwithstanding any provisions contained in this Agreement to the contrary, the Manager shall observe the restrictions and requirements of any mortgages, deeds of trust and other loan documents now or hereafter affecting the Project, including, without limitation, the Loan Documents, provided the Owner provides copies thereof to Manager (Manager acknowledging receipt of the applicable Loan Documents in existence as of the date hereof). Without limiting the generality of the foregoing, Manager shall comply with any insurance and cash management system required by such loan documents. Manager agrees to enter into such agreements as the lender under such loan documents reasonably requires (including, without limitation, any Subordination) (i) to evidence and confirm the subordination of Manager’s rights hereunder to the rights of such lender, (ii) to acknowledge any assignment of this Agreement by the Owner to such lender; (iii) to give such lender notice of and opportunity to cure any default of Owner under this Agreement; (iv) to permit termination of this Agreement upon an event of default under such loan documents; and (v) to agree to continue performance hereunder for the benefit of such lender (so long as the fees provided herein continue to be paid).

18.

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

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

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

And:	c/o Carroll Organization, LLC
	3340 Peachtree Road, Suite 1620
	Atlanta, Georgia 30326
	Attention: M. Patrick Carroll
	Facsimile No. (404) 523-9372

If to Manager:	Carroll Management Group, LLC.
	c/o Carroll Organization, LLC
	3340 Peachtree Rd, NE Suite 2250
	Atlanta, GA 30326
	Attn: Linda Masterson
	Facsimile No. 404-806-4266

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

19.

Miscellaneous .

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

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

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

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

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

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

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

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

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

(i)

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

(ii)

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

(j) Governing Law . It is the express intention of Manager and Owner that all legal actions and proceedings related to this Agreement or to any rights or any relationship between the parties arising therefrom shall be solely and exclusively initiated and maintained in the courts and the laws of the State in which the Project is located, and such laws shall govern the validity, interpretation, construction and performance of this Agreement, excluding any conflict-of-law rules which would direct the application of the law of another jurisdiction. Manager represents that it has qualified to do business in the State in which the Project is located in connection with all actions based on or arising out of this Agreement. Venue for any action brought to enforce this Agreement or collect any sums due under this Agreement shall be in any court of applicable jurisdiction where the Project is located.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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

OWNER :

BR CARROLL GLENRIDGE, LLC ,
a Delaware limited liability company

By:	/s/ Jordan Ruddy
Name:	Jordan Ruddy
Title:	Authorized Signatory

MANAGER :

CARROLL MANAGEMENT GROUP, LLC , a Georgia
limited liability company

By:	/s/ Josh Champion
Name:	Josh Champion
Title:	President

Exhibits :

Exhibit A - Property Description

Exhibit B - 2016 Annual Business Plan

Exhibit C - Reimbursable Expenses

Exhibit D - Form of Lease

Exhibit E - Additional Business Plan Information

Exhibit F- Statements and Reports

Exhibit G - Initial Capital Expenditure Plan

EXHIBIT “A”

Project Legal Description

Tract One:

ALL THAT TRACT of land in Land Lots 38 and 69 of the 17th District of Fulton County, Georgia, described as follows:

BEGINNING at the intersection of the northeast right-of-way line of Northland Drive (variable right-of-way) with the south right-of-way line of Glenridge Drive (variable right-of-way); thence, running along the south and southeast right-of-way line of Glenridge Drive, the following courses and distances: (1) North 79 degrees 10 minutes 20 seconds East 175.27 feet to a point, (2) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 75 degrees 22 minutes 49 seconds East 62.93 feet and a radius of 475.00 feet) 62.87 feet to a point, (3) North 89 degrees 12 minutes 57 seconds East 22.82 feet to a point, (4) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 57 degrees 07 minutes 19 seconds East 231.76 feet and a radius of 449.22 feet) 234.42 feet to a point, (5) North 47 degrees 51 minutes 39 seconds West 11.78 feet to a point, and (6) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 38 degrees 00 minutes 36 seconds East 62.84 feet and a of 436.44 feet) 62.90 feet to a point; thence, leaving said right-of-way line, South 54 degrees 00 minutes 00 seconds East 91.00 feet to a point; thence South 36 degrees 30 minutes 00 seconds, West 26.00 feet to a point; thence South 54 degrees 30 minutes 00 seconds East 325.00 feet to a point; thence North 28 degrees 56 minutes 16 seconds East 79.00 feet to a point; thence South 66 degrees 57 minutes 51 seconds East 37.00 feet to a point; thence South 58 degrees 54 minutes 02 seconds East 194.00 feet to a point thence South 28 degrees 02 minutes 54 seconds West 164.00 feet to a point; thence South 18 degrees 12 minutes 19 seconds West 250.86 feet to a 1-inch crimp top iron pin found; thence North 89 degrees 40 minutes 49 seconds West 340.60 feet to a 1-1/2-inch crimp top iron pin found; thence North 20 degrees 01 minute 13 seconds West 267.84 feet along the northeast boundary line of Lot 1, Block B, Unit Two, Glenridge Manor Subdivision to a 1-1/2-inch crimp top iron pin found; thence South 62 degrees 43 minutes 16 seconds West 229.10 feet along the northwest boundary line of said lot 1 to a point on the northeast right-of-way line of said Northland Drive; thence, along said northeast right-of-way line, the following courses and distances: (1) North 20 degrees 24 minutes 30 seconds West 24.58 feet to a point, (2) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 25 degrees 52 minutes 13 second West 123.95 feet and a radius of 651.08 feet) 124.14 feet to a point; (3) North 31 degrees 19 minutes 57 seconds West 12.81 feet to a point, (4) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 45 degrees 14 minutes 44 seconds West 96.68 feet and a radius of 201.03 feet) 97.53 feet to a point, and (5) along the arc of a curve to the right (which arc is subtended by a chord having a bearing and distance of North 49 degrees 03 minutes 48 seconds West 148.42 feet and a radius of 423.36 feet) 149.19 feet to the POINT OF BEGINNING, said tract containing 8.41301 acres.

A- 1

Together with a non-exclusive right, title and interest in and to all non-exclusive easements contained in that certain Sewer Easement Agreement between Andrew E. Chandler and Independent Living International Corp. dated as of July 20, 1989, recorded in Deed Book 12661, Page 107, Fulton County, Georgia records.

Together with a non-exclusive right, title and interest in and to all non-exclusive easements contained in that certain Sewer Easement Agreement between Sarah J. Carpenter and Independent Living International Corp. dated as of July 20, 1989, recorded in Deed Book 12661, Page 98, aforesaid records.

Tract Two:

ALL THAT TRACT of land in Land Lots 38 and 69 of the 17th District of Fulton County, Georgia, described as follows:

TO FIND THE TRUE POINT OF BEGINNING, commence at the intersection of the northeast right-of-way line of Northland Drive (variable right-of-way) with the south right-of-way line of Glenridge Drive (variable right-of-way); thence, running along the south and southeast right-of-way line of Glenridge Drive, the following courses and distances: (1) North 79 degrees 10 minutes 20 seconds East 175.27 feet to a point, (2) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 75 degrees 22 minutes 49 seconds East 62.93 feet and a radius of 475.00 feet) 62.87 feet to a point, (3) North 89 degrees 12 minutes 57 seconds East 22.82 feet to a point, (4) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 57 degrees 07 minutes 19 seconds East 231.76 feet and a radius of 448.22 feet) 234.42 feet to a point, (5) North 47 degrees 51 minutes 39 seconds West 11.78 feet to a point, and (6) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 38 degrees 00 minutes 36 seconds East 62.84 feet and a of 436.44 feet) 62.90 feet to a point and the TRUE POINT OF BEGINNING: from the TRUE POINT OF BEGINNING as thus established, continuing thence along said right-of-way line, the following courses and distances: (1) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of North 29 degrees 56 minutes 36 seconds East 59.95 feet and a radius of 436.44) 60.00 feet to a point, (2) North 26 degrees 00 minutes 18 seconds East 174.82 feet to a point, (3) along the arc of a curve to the right (which arc is subtended by a chord having a bearing and distance of North 38 degree 40 minutes 03 seconds East 220.49 feet and a radius of 502.92 feet) 222.29 feet to as point, and (4) North 51 degrees 19 minutes 49 seconds East 120.96 feet to a point on the southwest boundary line of Lot 4, Block A, Unit One, Glenridge Manor Subdivision; thence, leaving said right-of-way line, South 39 degrees 07 minutes 55 seconds East 216.57 feet along the southwest boundary line of said Lot 4 to a point; thence North 46 degrees 30 Minutes 16 seconds East 59.50 feet along the South boundary line of said Lot 4 to a 3/8-inch reinforcing, rod found at the northwest corner of Lot 6. Block A, Unit Two, Glenridge Manor Subdivision thence South 49 degrees 50 minutes 45 seconds East 193.19 feet along the southwest boundary line of said Lot 6 to a 1-3/4-inch crimp top iron pin found on the northwest right-of-way line of Royervista Drive; ( a 50 foot-right-of-way) thence along said northwest right-of-way line, the following courses and distances: (1) along the arc of a curve to the left (which arc is subtended by a chord having a bearing and distance of South 27 degrees 55 minutes 01 second West 285.75 feet and a radius of 741.197 feet) 287.55 feet to a point, and (2) South 16 degrees 48 minutes 11 seconds West 125.89 feet to a point; thence, leaving said northwest right-of-way line South 64 degrees 30 minutes 58 seconds East 278.84 feet to a point on the northwest boundary line of Lot 23, Block B, Unit Two, Glenridge Manor Subdivision; thence South 17 degrees 40 minutes 41 seconds West 249.84 feet along the northwest boundary of said, Lot 23 and along the northwest boundary line of Lot 24 Block B, Unit Two, Glenridge Manor Subdivision to an angle iron found, thence South 44 degrees 07 minutes 25 seconds West 231.89 feet along the northwest boundary line of Lot 25 Block B Unit Two, Glenridge Manor Subdivision to a 1-1/2-inch reinforcing rod found on the land lot line common to said Land Lots 38 and 69; thence North 89 degrees 40 minutes 51 seconds West 104.85 feet to a 1-inch crimp top iron pin found; thence North 18 degrees 12 minutes 19 seconds East 250.86 feet to a point; thence North 28 degrees 02 minutes 54 seconds Est 164.00 feet to a point; thence North 58 degrees 54 minutes 02 seconds West 194.00 feet to a point; thence North 66 degrees 57 minutes 51 seconds West 37.00 feet to a point; thence South 28 degrees 56 minutes 16 seconds West 79.00 feet to a point; thence North 54 degrees 30 minutes 00 seconds West 325.00 feet to a point thence North 36 degrees 30 minutes 00 seconds East 26.00 feet to a point; thence North 54 degrees 00 minutes 00 seconds West 90.00 feet to the TRUE POINT OF BEGINNING, said tract containing 8.30101 acres.

EXHIBIT “B”

Calendar Year 2016

Annual Business Plan

[See Attached]

B- 1

EXHIBIT “C”

Approved Reimbursable Expenses

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

Management Fees

advertising and marketing expenses, and leasing fees and commissions

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

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

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

resident improvements and replacements and segregated reserves therefore

maintenance and repair of the Project and all property and equipment used in connection

with the operation thereof

refunds of security or other deposits to residents and contracting parties

10.

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

11.

service contracts and public utility charges and assessments

12.

personnel administration charges and pre-employment screening

13.

payroll costs including, without limitation, those set forth in Section5(h) of this Agreement

14.

costs of credit reports, bank charges and like matters

15.

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

C- 1

EXHIBIT “D”

Approved form of Lease

[See Attached]

D- 1

EXHIBIT “E”

Annual Business Plan Information

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

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

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

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

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

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

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

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

10.

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

E- 1

EXHIBIT “F”

Statements and Reports

(a)

Within five (5) business days following the end of each month, a statement of Monthly Gross Receipts for each month;

(b)

Within five (5) business days following the end of each month, a monthly GAAP balance sheet and GAAP income statement, with a cumulative calendar year GAAP income statement to date, and a statement of change in the Capital Account for each Member of Owner (“Member”) the preceding month and year to date;

(c)

Within five (5) business days following the end of each month, the monthly and year to date activity which shall be furnished (without notice or demand) as follows:

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

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

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

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

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

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

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

Fixed asset roll-forward and support (invoices and checks) for any new acquisition/additions and/or support for any disposals to fixed assets.

Security Deposit Activity

Mortgage Statement

Monthly Management Fee Calculation

Monthly Distribution Calculation

10.

General Ledger, with description and balance detail

11.

Monthly Check Register together with a detailed bank reconciliation, including copies of all associated checks

12.

Market Survey, including property comparison, trends, and concessions

13.

Rent Roll

14.

Variance Report, including the following:

Cap Ex Summary and Commentary

Monthly Income/Expense Variance with notes

Yearly Income/Expense Variance with notes

Occupancy Commentary

Market/Competition Commentary

Rent Movement/Concessions Commentary

F- 1

Crime Commentary

Staffing Commentary

Operating Summary, with leasing and traffic reporting

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

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

Within fifteen (15) days of the end of each quarter of each year, Manager shall furnish to Owner such information as requested by Owner or its Members or affiliates as is necessary for any REIT Member of Owner (whether a direct or indirect owner) to determine its qualification as a real estate investment trust (a “ REIT ”) and its compliance with any requirements for qualifying as a REIT (the “REIT Requirements”) as shall be requested by Owner or its Members. Further, Manager shall cooperate in a reasonable manner at the request of any Member to work in good faith with any designated accountants or auditors of such Member or its Affiliates so that such Member or its Affiliate is able to comply with its public reporting, attestation, certification and other requirements under the Securities Exchange Act of 1934, as amended, applicable to such entity, and to work in good faith with the designated accountants or auditors of the Member or any of its Affiliates in connection therewith, including for purposes of testing internal controls and procedures of such Member or its Affiliates. The requesting Member shall bear the cost of any information or reports provided to such Member pursuant to this Exhibit.

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

F- 2

EXHIBIT G

INITIAL CAPITAL EXPENDITURE PLAN

G- 1