Exhibit 10.188

 

CONTRIBUTION AND DISTRIBUTION AGREEMENT

 

THIS CONTRIBUTION AND DISTRIBUTION AGREEMENT (“Agreement”) is made and entered
into as of the 9th day of December, 2014 (the “Effective Date” ), by and among
BR Berry Hill Managing Member, LLC, a Delaware limited liability company
(“MMI”), BR Berry Hill Managing Member II, LLC, a Delaware limited liability
company (“MMII”), Bluerock Special Opportunity + Income Fund III, LLC, a
Delaware limited liability company (“SOIF III”) and BEMT Berry Hill, LLC, a
Delaware limited liability company (“BEMT”).

 

RECITALS:

 

A.           SOIF III is the owner and holder of a 53.0522% limited liability
company interest in MMI.

 

B.           Bluerock Residential Holdings, LP, a Delaware limited partnership
(the "Operating Partnership"), wholly owns BEMT. BEMT is the owner and holder of
a 46.9478% limited liability company interest in MMI.

 

C.           MMI is the owner and holder of a 33.4649% limited liability company
interest in BR Stonehenge 23Hundred JV, LLC, a Delaware limited liability
company ("Stonehenge JV'' ).

 

D.           Stonehenge JV is the owner and holder of 100% of the limited
liability company interests in 23Hundred, LLC, a Delaware limited liability
company, which is the fee simple owner and holder of the 23Hundred at Berry Hill
apartments located in the City of Berry Hill, Davidson County, Tennessee (the
"Berry Hill Apartments").

 

E.           Affiliates of Bluerock Residential Growth REIT, Inc., a Maryland
corporation (the “REIT”), which is the parent and general partner of the
Operating Partnership, intend to enter into a series of transactions pursuant to
which the ownership of Stonehenge JV and the Berry Hill Apartments will be
restructured (such transactions being referred to collectively as the
"Stonehenge JV Restructuring").

 

F.           In connection with the Stonehenge JV Restructuring, MMI desires to
contribute, and MMII desires to accept the contribution from MMI of, all of
MMI's right, title and interest in 20.00% of its limited liability company
interests in Stonehenge JV (the "Stonehenge JV Interest") free and clear of
Liens and Claims, and the parties desire to amend the ownership structure of
Stonehenge JV in connection therewith, after which MMI will have a 33.4649%
limited liability company interest in Stonehenge JV and MMII will have a 20.00%
limited liability company interest in Stonehenge JV.

 

G.           In consideration of the Stonehenge JV Interest, MMII shall
distribute 53.0522% of the limited liability company interests in itself to SOIF
III and 46.9478% of the limited liability company interests in itself to BEMT,
as provided herein (collectively, the "MMII Interests").

 

H.           Capitalized terms used herein but not otherwise defined shall have
the respective meanings set forth in Schedule 1.

 

 

 

 

NOW, THEREFORE, in consideration of the promises and the mutual covenants
contained herein, the parties hereby agree as follows:

 

1.            Contribution of the Stonehenge JV Interest. For and in
consideration of the MMII Interests to be issued by MMII to SOIF III and BEMT
and other good and valuable consideration, the sufficiency of which is hereby
acknowledged, and subject to the terms and conditions herein set forth, MMI
hereby contributes, conveys, transfers and irrevocably assigns to MMII, and MMII
accepts such contribution from MMI, the Stonehenge JV Interest, free and clear
of all Liens and Claims.

 

2.            Consideration. In exchange for the contribution, conveyance,
transfer and assignment of the Stonehenge JV Interest held by MMI, (i) MMII
shall issue and deliver to SOIF III 53.0522% of the limited liability company
interests in itself and (ii) MMII shall issue and deliver to BEMT 46.9478% of
the limited liability company interests in itself. SOIF III and BEMT understand
and acknowledge that MMII makes no representations regarding the actual value of
the MMII Interests.

 

3.            Representations and Warranties of MMI. MMI represents and warrants
to MMII that the following statements are true, complete and correct as of the
Effective Date.

 

3.1.         Organization; Validity; Authority; No Conflict.

 

3.1.1.          MMI is a limited liability company duly organized, validly
existing and in good standing under the Laws of the State of Delaware and has
full legal right, power and authority to enter into, execute and deliver this
Agreement, to perform its obligations hereunder, and to contribute, convey,
transfer and irrevocably assign to MMII the Stonehenge JV Interest, as herein
provided.

 

3.1.2.          The execution and delivery of this Agreement by MMI, the
performance by MMI of the transactions contemplated by this Agreement, or the
transfer of Stonehenge JV Interest provided for herein will not (i) violate or
conflict with any provision of Law or any Order applicable to MMI; (ii) require
any consent or approval by or filing or notice with any Governmental Entity; or
(iii) violate or conflict with any agreement or understanding by which MMI or
the Stonehenge JV Interest is bound.

 

3.1.3.          This Agreement has been duly authorized by all necessary limited
liability company action on the part of MMI. This Agreement has been, or upon
execution and delivery will be, duly executed and delivered by MMI and
constitutes, or upon execution and delivery will constitute, the valid and
binding obligations of MMI enforceable against MMI in accordance with its terms.

 

3.2.        Title to the Stonehenge JV Interest. MMI has good and valid title to
its Stonehenge JV Interest, free and clear of any Lien.

 

3.3.        Litigation. There are no outstanding Orders by which MMI is bound,
or any pending or to the Knowledge of MMI, threatened, which relate to or affect
the Stonehenge JV Interest, nor to the Knowledge of MMI are there any facts or
circumstances which are likely to give rise to any such Action or Proceeding.

 

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4.            Representations and Warranties of MMII. MMII represents and
warrants to MMI, SOIF III and BEMT that the following statements are true,
complete and correct as of the Effective Date:

 

4.1.          Organization; Validity; Authority. MMII is a limited liability
company duly organized, validly existing and in good standing under the Laws of
the State of Delaware. MMII has all requisite limited liability company power
and authority to enter into the Agreement and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement has been duly
authorized by all necessary limited liability company action on the part of
MMII. The Agreement has been, or upon execution and delivery will be, duly
executed and delivered and constitutes, or upon execution and delivery will
constitute, the valid and binding obligation of MMII, enforceable against MMII
in accordance with its terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, and similar laws affecting
creditors' rights and remedies generally, and to general principles of equity
(regardless of whether enforcement is sought in a proceeding at law or in
equity).

 

4.2.          Distribution of the MMII Interests. The MMII Interests, when
issued and delivered in compliance with the provisions of this Agreement, will
be duly authorized, validly issued, fully paid and non-assessable. The MMII
Interests will be free of any Liens. The MMII Interests will not be issued in
violation of any preemptive rights or rights of first refusal afforded to any
Person.

 

5.            Effect of Contribution of Stonehenge JV Interest. From and after
the Effective Date, MMI shall not be entitled to any portion of income, gain,
Loss, deduction or credit allocable to the Stonehenge JV Interest on or after
such date. Nothing in this Agreement will affect the allocation to MMI of
profits, Losses and other items of income, gain, Loss, deduction or credit
allocable to the Stonehenge JV Interest and attributable to any period before
the Effective Date or any distribution payments made to MMI with respect to the
Stonehenge JV Interest before such date, and MMI shall be entitled to receive
any and all distributions that have accrued but remain unpaid as of the
Effective Date with respect to the Stonehenge JV Interest.

 

6.            Indemnification.

 

6.1.          Indemnification of MMII by MMI. MMI shall indemnify, defend and
hold MMII, its successors, assigns and Affiliates (each an "MMII Indemnified
Party," and collectively, the "MMII Indemnified Parties") harmless from any
liability, claim, demand, loss, expense or damage that is: (a) suffered by, or
asserted by any third party against, an MMII Indemnified Party arising from any
act or omission of MMI, its agents, employees or contractors or otherwise
arising out of the ownership or operation of the Stonehenge JV Interest first
arising or occurring prior to the Effective Date; (b) arising out of the breach
or inaccuracy of MMI' s representations and warranties set forth herein; or (c)
except as otherwise provided in this Agreement, arising out of any failure by
MMI to perform any covenant or obligation set out in this Agreement.

 

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6.2.          Indemnification of MMI, SOIF III and BEMT by MMII. MMII shall
indemnify, defend and hold MMI, SOIF III, and BEMT, their successors, assigns
and Affiliates (each an "MMI Indemnified Party," and collectively, the "MMI
Indemnified Parties ") harmless from any liability, claim, demand, loss, expense
or damage that is: (a) suffered by, or asserted by any third party against, an
MMI Indemnified Party arising from any act or omission of MMII, its assigns, its
agents, employees or contractors or otherwise arising out of the ownership and
operation of the MMII Interests first arising or occurring prior to the
Effective Date; (b) suffered by, or asserted by any third party against, an MMI
Indemnified Party arising from any act or omission of MMII, its assigns, its
agents, employees or contractors or otherwise arising out of the ownership and
operation of the Stonehenge JV Interest first arising from and after the
Effective Date; (c) arising out of the breach or inaccuracy of any of MMII's
representations and warranties set forth herein; or (d) except as otherwise
provided in this Agreement, arising out of any failure by MMII to perform any
covenant or obligation set out in this Agreement.

 

7.            Miscellaneous.

 

7.1.          Entire Agreement. This Agreement shall constitute the entire
agreement between the parties relating to the contribution of the Stonehenge JV
Interest and the distribution of the MMII Interests, and supersedes and cancels
all previous negotiations, understandings and agreements between the parties
regarding the subject matter hereof. No conditions, use of trade, course of
dealing, understanding or agreement purporting to vary, explain or supplement
the terms of this Agreement shall be binding unless hereafter made in writing
and signed by each of the parties to this Agreement.

 

7.2.          Choice of Law. This Agreement shall be interpreted in accordance
with the Laws of the State of Delaware, without regard to the conflict of laws
principles thereof.

 

7.3.          Waiver. No waiver of any of the terms or conditions of this
Agreement shall be effective or binding unless such waiver is in writing and is
signed by all of the parties, nor shall this Agreement be changed, modified,
discharged or terminated other than in accordance with its terms, in whole or in
part, except by a writing signed by all of the parties. Waiver by any party of
any term, provision or condition of this Agreement shall not be construed to be
a waiver of any other term, provision or condition nor shall such waiver be
deemed a subsequent waiver of the same term, provision or condition.

 

7.4.          Severability. In the event any provision in this Agreement shall
be deemed invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.

 

7.5.          Assignment. No party shall in any way sell, transfer, assign or
otherwise dispose of this Agreement or any of the rights, privileges, duties and
obligations granted or imposed under this Agreement. Any attempted or actual
sale, transfer, assignment, or disposal, in whole or in part, of this Agreement
will be void and have no effect.

 

7.6.          Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument. Facsimile and electronic
executions and deliveries shall have the full force and effect of original
signatures.

 

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7.7.          Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties and their respective successors and
permitted assigns.

 

7.8.          Waiver of Jury Trial; Forum. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY SHALL BRING ANY ACTION AGAINST THE
OTHER IN CONNECTION WITH THIS AGREEMENT IN A FEDERAL OR STATE COURT LOCATED IN
NEW YORK, NEW YORK, CONSENTS TO THE JURISDICTION OF SUCH COURTS, AND WAIVES ANY
RIGHT TO HAVE ANY PROCEEDING TRANSFERRED FROM SUCH COURTS ON THE GROUND OF
IMPROPER OR INCONVENIENT FORUM.

 

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date set forth above.

 

  MMI:           BR BERRY HILL MANAGING MEMBER, LLC,     a Delaware limited
liability company             By: BEMT Berry Hill, LLC,       a Delaware limited
liability company     Its: Member and 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/ Michael
L. Konig         Name: Michael L. Konig           Its: Senior Vice President and
Chief Operating           Officer                

 

  MMII:           BR BERRY HILL MANAGING MEMBER II, LLC,       a Delaware
limited liability company               By: BEMT Berry Hill, LLC,       a
Delaware limited liability company      Its: Member and 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/
Michael L. Konig           Name: Michael L. Konig         Its: Senior Vice
President and Chief Operating
Officer                

  

[Signature Page to Contribution and Distribution Agreement]

 

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  SOIF III:           BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND III, LLC,   a
Delaware limited liability company             By: BR SOIF Ill Manager, LLC,    
  a Delaware limited liability company     Its: Manager               By: /s/
Jordan B. Ruddy         Name:  Jordan B. Ruddy       Its: President  

 

  BEMT:               BEMT BERRY HILL, 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/ Michael L. Konig           Name: Michael L.
Konig         Its: Senior Vice President and Chief Operating           Officer  
             

[Signature Page to Contribution and Distribution Agreement]

  

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SCHEDULE 1

DEFINITIONS

 

As used in this Agreement, the following terms have the following meanings
unless the context otherwise requires:

 

1.          "Action or Proceeding" means any action, complaint, petition, suit
or other legal proceeding, whether civil or criminal, in law or in equity, or
before any arbitrator or any Governmental Entity.

 

2.          "Affiliates" means when used in reference to a specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with the specified
Person. For purposes of this definition, "control" (including, with its
correlative meanings, the terms "controlling," "controlled by," and "under
common control with") as applied to any Person, means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of that Person, whether through ownership of voting securities or
equity interests, by contract or otherwise.

 

3.          "Applicable Person" means the people listed on Schedule 2.

 

4.          "Claim" means any pending contest, claim, demand, assessment,
Action, cause of action, litigation, notice or demand involving any Person.

 

5.          "Governmental Entity" means any government or any agency, bureau,
board, commission, court, department, official, political subdivision, tribunal
or other instrumentality in each case of any government, whether federal, state
or local, domestic or foreign.

 

6.          "Knowledge" means actual knowledge of an Applicable Person and the
knowledge that such Applicable Person without independent inquiry would
reasonably be expected to obtain in the course of diligently performing his or
her duties.

 

7.          "Law" means any constitutional provision, statute or other law,
rule, regulation, or interpretation of any Governmental Entity, and any Order.

 

8.          "Lien" means any lien, pledge, hypothecation, mortgage, security
interest, Claim, lease, charge, option, right of first refusal, easement,
servitude, transfer restriction under any stockholder or similar agreement,
encumbrance or any other restriction or limitation whatsoever.

 

9.          "Loss" means any and all costs, expenses, direct losses or damages,
fines, penalties or liabilities (including interest which may be imposed or
incurred in connection therewith, court costs, litigation expenses, reasonable
attorneys' fees and costs).

 

10.         "Order" means any decree, injunction, judgment, order, ruling,
assessment or writ of a Governmental Entity or arbitration award.

 

 

 

 

11.         "Person" means an association, a corporation, an individual, a
limited liability company, a partnership (whether general or limited), a trust
(whether inter vivos or testamentary) or any other entity or organization,
whether organized for profit or not for profit, and including a Governmental
Entity.

 

12.         "Tax" and "Taxes" mean any gross receipts, license, payroll,
employment, excise, severance, stamp, occupation, premium, windfall profits,
environmental (including taxes under Internal Revenue Code §59A), customs
duties, capital stock, franchise, profits, withholding, social security (or
similar), unemployment, disability, real property, personal property, sales,
use, transfer, registration, value added, alternative or add-on minimum,
estimated, escheatment or unclaimed property or other tax of any kind
whatsoever, including any interest, penalty, or addition thereto, whether
disputed or not, and including any obligations to indemnify or otherwise assume
or succeed to the Tax liability of any other Person, including pursuant to any
tax sharing agreement or any other contract relating to the sharing or payment
of any such tax, pursuant to operation of Law or otherwise.

 

 

 

 

SCHEDULE 2

 

APPLICABLE PERSONS

 

R. Ramin Kamfar

 

Michael L. Konig

 

Christopher J. Vohs

 

James G. Babb, III

 

Gary T. Kachadurian

 

Brian D. Bailey

 

I. Bobby Majumder

 

Romano Tio

 

Jordan B. Ruddy