Exhibit 10.6

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

SALE OF BERRY HILL INTEREST

 

FROM

 

BEMT BERRY HILL, LLC

 

TO

 

BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND III, LLC

 

 

 

 

Exhibit 10.6

 

CONTENTS

 

Clause   Page           Article 1.   PURCHASE OF INTEREST; CONSIDERATION;
DEFINITIONS   1           1.1   Purchase of Berry Hill Interest; Purchase Price;
Payment Methodology   1 1.2   Definitions   1 1.3   Descriptive Headings; Word
Meaning   1           Article 2.   CLOSING   2           2.1   Seller Deliveries
  2 2.2   Buyer Deliveries   2 2.3   Closing Statement   2           Article 3.
  PRORATIONS; COSTS   2           3.1   Prorations   2 3.2   Post-Closing
Corrections   2 3.3   Costs; Transfer Taxes   2 3.4   Sales Commissions   3 3.5
  Excluded Obligations and Assets   3           Article 4.   REPRESENTATIONS AND
WARRANTIES   3           4.1   Seller’s Representations and Warranties as to
Seller   3 4.2   Seller’s Representations and Warranties as to the Berry Hill
Interest   4 4.3   Buyer’s Representations and Warranties   5 4.4   Limitations
  6 4.5   Survival of Representations and Warranties   6           Article 5.  
INDEMNIFICATION AND LIMITATION ON LIABILITY   6           5.1   Indemnification
between Seller and Buyer   6 5.2   Limitation on Seller’s Liability   6 5.3  
Survival   7           Article 6.   MISCELLANEOUS   7           6.1   Parties
Bound   7 6.2   Headings; Entirety; Amendments   7 6.3   Invalidity and Waiver  
7 6.4   Governing Law; Calculation of Time Periods; Time   7 6.5   No Third
Party Beneficiary   7 6.6   Confidentiality   7 6.7   Enforcement Expenses   8
6.8   Notices   8 6.9   Construction   8 6.10   Execution in Counterparts   8
6.11   Further Assurances   8 6.12   Waiver of Jury Trial; Forum   8 6.13  
Mutual Execution   8 6.14   Cooperation   9

 

i

 

 

Exhibit 10.6

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

SCHEDULE OF EXHIBITS AND APPENDICES

 

Exhibit A - Organizational Charts       Appendix 1.2 - Defined Terms      
Appendix 2.1(a) - Form of Assignment of Interest       Appendix 2.1(c) - Form of
Venture Agreement Amendment

 

ii

 

 

Exhibit 10.6

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

This Membership Interest Purchase Agreement (this “Agreement”) is made as of the
29th day of August, 2013 (the “Effective Date”) by and among BEMT BERRY HILL,
LLC, a Delaware limited liability company (“Seller”), and BLUEROCK SPECIAL
OPPORTUNITY + INCOME FUND III, LLC, a Delaware limited liability company
(“Buyer”).

 

RECITALS

 

A. Seller is the owner and holder of a 64.806% limited liability company
interest in BR Berry Hill Managing Member, LLC, a Delaware limited liability
company (“BR Berry Hill Member”).

 

B. BR Berry Hill Member is a co-manager of, and is the owner and holder of an
82.5% limited liability company interest in, BR Stonehenge 23Hundred JV, LLC, a
Delaware limited liability company (“Berry Hill Venture”), which is the sole
member of 23Hundred, LLC, a Delaware limited liability company (the
“Subsidiary”), which is the fee simple owner and holder of the Berry Hill
Property (as defined in Appendix 1.2).

 

D. BR Berry Hill Member is an indirect owner of the Berry Hill Property, as
shown in the organizational chart attached to this Agreement as Exhibit A-1 (the
“Existing Organizational Chart”).

 

E. Seller desires to sell, and Buyer desires to purchase from Seller, all of
Seller’s right, title and interest in a 34.381% limited liability company
interest in BR Berry Hill Member (the “Berry Hill Interest”), which equates to a
28.36% indirect interest in the Berry Hill Property.

 

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

 

ARTICLE 1. PURCHASE OF INTEREST; CONSIDERATION; DEFINITIONS

 

1.1 Purchase of Berry Hill Interest; Purchase Price; Payment Methodology. In
accordance with the Recitals set forth above, which Recitals are incorporated
into this Agreement and made a part thereof, Seller agrees to sell and convey,
and Buyer agrees to purchase, the Berry Hill Interest on the terms and
conditions set forth herein. As consideration for Seller’s agreement to sell the
Berry Hill Interest to Buyer, Buyer shall pay $5,524,412 to Seller (the
“Consideration”), due at the Closing. The Consideration shall be payable by way
of Buyer providing a credit against and deemed paydown of the Seller’s
outstanding principal balance under that certain Line of Credit and Security
Agreement dated as of October 2, 2012 by and between Seller and Secured Lender,
as subsequently amended by that certain Line of Credit and Security Agreement
Modification Agreement dated March 4, 2013, that certain Second Amendment to
Line of Credit and Security Agreement dated August 9, 2013 and that certain
Third Amendment to Line of Credit and Security Agreement dated of even date
herewith.

 

1.2 Definitions. Certain terms, capitalized but not defined in the body of this
Agreement shall have the meanings ascribed to them on Appendix 1.2 attached
hereto.

 

1.3 Descriptive Headings; Word Meaning. The descriptive headings of the
paragraphs of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any provisions of this
Agreement. Words such as “herein,” “hereinafter,” “hereof” and “hereunder” when
used in reference to this Agreement, refer to this Agreement as a whole and not
merely to a subdivision in which such words appear, unless the context otherwise
requires. The singular shall include the plural and the masculine gender shall
include the feminine and neuter, and vice versa, unless the context otherwise
requires. The word “including” shall not be restrictive and shall be interpreted
as if followed by the words “without limitation.”

 

1

 

 

Exhibit 10.6

 

ARTICLE 2. CLOSING

 

The transaction described herein shall be closed upon (i) the consummation of
the purchase and sale of the Berry Hill Interest as contemplated in this
Agreement, and (ii) the execution and delivery of the documents set forth in
this Article 2.

 

2.1 Seller Deliveries. Seller shall deliver or cause to be delivered to Buyer
the following, each such document being duly executed and, where appropriate, in
recordable form and notarized:

 

(a) Assignment of Interest. An assignment of the Berry Hill Interest, in the
form attached hereto as Appendix 2.1(a), executed by Seller (the “Assignment of
Interest”);

 

(b) Authority. Evidence of the existence, organization and authority of Seller
and of the authority of the Persons executing documents on behalf of Seller
reasonably satisfactory to Buyer;

 

(c) Amendment to Venture Agreement. An amendment to the Venture Agreement, in
the form attached hereto as Appendix 2.1(c), duly executed by Seller and
reflecting the consummation of the purchase and sale of the Berry Hill Interest
as contemplated herein (the “Venture Agreement Amendment”); and

 

(d) Other Deliveries. Such other documents, certificates and instruments
reasonably necessary in order to effectuate the transactions described herein,
including without limitation, a lien waiver from the Secured Lender with respect
to its security interest in the Berry Hill Interest, transfer tax declarations,
broker lien waivers, and any other Closing deliveries required to be made by or
on behalf of Seller.

 

2.2 Buyer Deliveries. Buyer shall deliver or cause to be delivered to Seller the
following, each such document being duly executed and, where appropriate, in
recordable form and notarized:

 

(a) Consideration. Payment of the Consideration in the manner described in
Section 1.1 of this Agreement;

 

(b) Authority. Evidence of the existence, organization and authority of Buyer
and of the authority of the Persons executing documents on behalf of Buyer
reasonably satisfactory to Seller;

 

(c) Venture Agreement Amendment. The Venture Agreement Amendment, duly executed
by Buyer; and

 

(d) Other Deliveries. Such other documents, certificates and instruments
reasonably necessary in order to effectuate the transactions described herein,
including without limitation, transfer tax declarations, broker lien waivers,
and any other Closing deliveries required to be made by or on behalf of Buyer.

 

2.3 Closing Statement. Seller and Buyer shall execute a closing statement
consistent with this Agreement.

 

ARTICLE 3. PRORATIONS; COSTS

 

3.1 Prorations. Buyer and Seller agree to use customary commercially reasonable
practices to determine all prorations and adjustments to be made between Buyer
and Seller at Closing.

 

3.2 Post-Closing Corrections. Either party shall be entitled to a post-Closing
adjustment for any incorrect proration or adjustment, provided such adjustment
is claimed by such party within twelve (12) months after Closing. The provisions
of this Section 3.2 shall survive the Closing.

 

3.3 Costs; Transfer Taxes. Buyer shall pay any Transfer Taxes due and payable
with respect to the conveyance of the Berry Hill Interest, if any. Seller shall
pay the cost of removing any Encumbrances on the Berry Hill Interest. Except as
provided in Section 5.1 and Section 6.7 of this Agreement, or in any document or
instrument executed pursuant to this Agreement, each party shall be responsible
for their own attorneys’ and other professional fees, except that Seller shall
cover and pay for $5,000 of Buyer’s attorneys’ fees. Seller and Buyer shall
execute any required city, county and state transfer tax or other declarations,
if applicable.

 

2

 

 

Exhibit 10.6

 

3.4 Sales Commissions. Seller and Buyer represent and warrant each to the other
that they have not dealt with any real estate broker or salesperson in
connection with this transaction. In the event of any claim for broker’s or
finder’s fees or commissions in connection with the negotiation, execution or
consummation of this Agreement or the transaction contemplated hereby, each
party shall indemnify, defend and hold harmless the other party from and against
any such claim based upon any actual or alleged statement, representation or
agreement of the indemnifying party. This provision shall survive the Closing
and any termination of this Agreement.

 

3.5 Excluded Obligations and Assets.

 

(a) Seller Obligations. Buyer is purchasing the Berry Hill Interest free and
clear of any and all of Seller’s obligations with respect thereto and
Encumbrances thereon.

 

(b) Survival. The provisions of this Section 3.5 shall survive Closing
indefinitely and shall not be subject to the limitations set forth in Section
4.5 or Article 5.

 

ARTICLE 4. REPRESENTATIONS AND WARRANTIES

 

4.1 Seller’s Representations and Warranties as to Seller. As a material
inducement to Buyer to execute this Agreement and consummate the Closing, Seller
represents and warrants to Buyer that:

 

(a) Seller has been duly formed or organized as a limited liability company, is
validly existing and is in good standing in the State of Delaware, and is
authorized to exercise all its powers, rights and privileges.

 

(b) Seller has the power and authority, under its Charter Documents, to own and
operate its assets, to carry on its business as now conducted, and to enter into
and perform its obligations under this Agreement.

 

(c) All manager, member, or other action on the part of Seller and the BR Berry
Hill Member necessary for Seller’s authorization, execution and delivery of this
Agreement, and the performance of all obligations of Seller hereunder and the
completion of the Closing pursuant hereto has been taken prior to the Closing.
This Agreement constitutes a legally binding and valid obligation of Seller,
enforceable against Seller in accordance with its terms, subject to bankruptcy,
insolvency, reorganization, moratorium or other similar Laws affecting
creditors’ rights and remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).

 

(d) The execution and delivery of this Agreement by Seller and the performance
by Seller of its obligations pursuant hereto will not result in any violation
of, be in conflict with, or constitute a default under, with or without the
passage of time or the giving of notice: (x) any provision of Seller’s Charter
Documents as such documents exist immediately prior to the Closing; (y) any
provision of any judgment, decree or order to which Seller is a party or by
which its properties or assets are bound; or (z) any Laws applicable to Seller
or its properties or assets.

 

(e) The execution and delivery of this Agreement by Seller and the performance
by Seller of its obligations pursuant hereto will not result in any violation
of, be in conflict with, or constitute a default under, with or without the
passage of time or the giving of notice any material contract or agreement to
which Seller is a party.

 

(f) The execution, delivery and performance by Seller of this Agreement does not
require the consent, approval, notice, clearance, waiver, order or authorization
of any Person or Governmental Authority that has not been obtained or given.

 

3

 

 

Exhibit 10.6

 

(g) There is no action, suit, proceeding or investigation pending or, to the
knowledge of Seller, threatened in writing against Seller that challenges the
validity of this Agreement or the right of Seller to enter into this Agreement,
or that might result, either individually or in the aggregate, in Seller’s
inability to perform its obligations under this Agreement. There is no material
judgment, decree or order of any court, arbitrator, tribunal or governmental or
similar authority in effect against Seller, nor is Seller in material default
with respect to any order or any court, arbitrator, tribunal or governmental or
similar authority binding upon Seller, by which it or its respective properties
or assets are bound, which would prevent Seller from performing its obligations
under this Agreement.

 

(h) Seller is not and is not acting on behalf of (i) an “employee benefit plan”
within the meaning of Section 3(3) of ERISA), (ii) a “plan” within the meaning
of Section 4975 of the Code or (iii) an entity deemed to hold “plan assets”
within the meaning of 29 C.F.R. §2510.3-101 of any such employee benefit plan or
plans.

 

(i) Seller is not acting, directly or indirectly for, or on behalf of, any
Person, group, entity or nation named by any Executive Order (including the
September 24, 2001, Executive Order Blocking Properties and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism)
or the United States Treasury Department as a terrorist, “Specially Designated
National and Blocked Person,” or other banned or blocked Person, group, entity,
or nation pursuant to any Law that is enforced or administered by the Office of
Foreign Assets Control, and is not engaging in the transactions described
herein, directly or indirectly, on behalf of, or instigating or facilitating the
transactions described herein, directly or indirectly, on behalf of, any such
Person, group, entity or nation.

 

(j) Seller is not insolvent and will not become insolvent by executing or
performing its obligations under this Agreement or the documents to be executed
in connection herewith.

 

4.2 Seller’s Representations and Warranties as to the Berry Hill Interest. As a
material inducement to Buyer to execute this Agreement and consummate the
Closing, Seller represents and warrants to Buyer with respect to the Berry Hill
Interest, BR Berry Hill Member, Berry Hill Venture and the Subsidiary that:

 

(a) Seller is the owner and holder of 64.806% of the limited liability company
interests in BR Berry Hill Member. The Berry Hill Interest is subject to a lien
and security interest held by the Secured Lender, but is otherwise free and
clear of any Encumbrances, and is otherwise subject only to restrictions on
transfer imposed under applicable U.S. federal and state securities Laws, the
Venture Agreement and the Loan Documents. The Berry Hill Interest has been duly
and validly issued and, except as contemplated by this Agreement or the Venture
Agreement, there exists no agreement, arrangement or obligation (actual or
contingent) to issue, transfer, redeem, repay or repurchase the Berry Hill
Interest or any portion thereof.

 

(b) Other than as provided in the limited liability company agreement of Berry
Hill Venture or the Subsidiary or the Venture Agreement, there are no options,
warrants, stock appreciation rights, calls, pre-emptive rights, subscriptions,
contribution rights, convertible securities, or other rights or other agreements
or commitments of any character whatsoever which are an obligation of Seller to
issue, transfer or sell any securities exercisable for, or otherwise evidencing
a right to acquire, any interests of any kind in any of BR Berry Hill Member,
Berry Hill Venture or the Subsidiary (except the rights of Buyer under this
Agreement).

 

(c) The Existing Organizational Chart attached at Exhibit A-1 is correct and
correctly shows Berry Hill Venture and the Subsidiary and the percentage
ownership interest of BR Berry Hill Member in Berry Hill Venture, and indirectly
in the Subsidiary, and the existing ownership interest of Seller and the
ownership interest of Bluerock Growth Fund, LLC (“BGF”) in the BR Berry Hill
Member immediately prior to the Closing hereunder.

 

(d) The Post-Sale Organizational Chart attached at Exhibit A-2 is correct and
correctly shows Berry Hill Venture and the Subsidiary and the percentage
ownership interest of BR Berry Hill Member in Berry Hill Venture, and indirectly
in the Subsidiary, and the pro forma ownership interests of Seller, Buyer and
BGF in the BR Berry Hill Member immediately following the Closing hereunder.

 

4

 

 

Exhibit 10.6

 

4.3 Buyer’s Representations and Warranties. As a material inducement to Seller
to execute this Agreement and consummate the Closing, Buyer represents and
warrants to Seller that:

 

(a) Buyer has been duly formed or organized as a limited liability company, is
validly existing and, is in good standing in the state of its organization, and
is authorized to exercise all of its powers, rights and privileges.

 

(b) Buyer has the power and authority, under its Charter Documents, to own and
operate its properties, to carry on its business as now conducted, and to enter
into and perform its obligations under this Agreement.

 

(c) All action on the part of Buyer and its members, managers, and officers
necessary for the authorization, execution and delivery of this Agreement, the
performance of all obligations of Buyer hereunder and completion of the
transactions hereunder, has been taken or will be taken prior to the Closing.
This Agreement constitutes a legally binding and valid obligation of Buyer
enforceable in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of
equity, including principles of commercial reasonableness, good faith and fair
dealing (regardless of whether enforcement is sought in a proceeding at law or
in equity).

 

(d) The execution and delivery of this Agreement by Buyer and the performance by
Buyer of its obligations pursuant hereto will not result in any violation of, be
in conflict with, or constitute a default under, with or without the passage of
time or the giving of notice: (x) any provision of Buyer’s Charter Documents;
(y) any provision of any judgment, decree or order to which Buyer is a party or
by which it or its property or assets are bound; or (z) any Laws applicable to
Buyer or its property or assets.

 

(e) The execution and delivery of this Agreement by Buyer and the performance by
Buyer of its obligations pursuant hereto will not result in any violation of, be
in conflict with, or constitute a default under, with or without the passage of
time or the giving of notice, any material contract or agreement to which Buyer
is a party.

 

(f) There is no action, suit, proceeding or investigation pending or, to the
knowledge of Buyer, threatened in writing against Buyer that challenges the
validity of this Agreement or the right of Buyer to enter into this Agreement,
or that might result, either individually or in the aggregate, in Buyer’s
inability to perform its obligations under this Agreement. There is no judgment,
decree or order of any court, arbitrator, tribunal or governmental or similar
authority in effect against Buyer, and Buyer is not in default with respect to
any order of any court, arbitrator, tribunal or governmental or similar
authority binding upon Buyer or by which it or its property or assets are bound
that would prevent Buyer from performing its obligations under this Agreement.

 

(g) Buyer is a Secured Lender and consents to the release of its lien on the
Berry Hill Interest, and has also obtained the consent of the other Secured
Lender to release its lien on the Berry Hill Interest so as to permit Buyer to
purchase the Berry Hill Interest free and clear of all Secured Lender liens and
encumbrances on the Berry Hill Interest. Secured Lender (including Buyer) have
jointly and severally agreed to enter into a Third Amendment to Line of Credit
and Security Agreement and a Replacement Promissory Note in the amount of
$7,610,944, both effective of even date herewith.

 

(h) Buyer is not acting, directly or indirectly for, or on behalf of, any
Person, group, entity or nation named by any Executive Order (including the
September 24, 2001, Executive Order Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism)
or the United States Treasury Department as a terrorist, “Specially Designated
National and Blocked Person, or other banned or blocked Person, group, entity,
or nation pursuant to any Law that is enforced or administered by the Office of
Foreign Assets Control, and is not engaging in the transactions described
herein, directly or indirectly, on behalf of, or instigating or facilitating the
transactions described herein, directly or indirectly, on behalf of, any such
Person, group, entity or nation.

 

(h) Buyer is acquiring the Berry Hill Interest for its own account, for
investment purposes only and not with a view to the distribution (as such term
is used in Section 2(11) of the Securities Act of 1933, as amended (the
“Securities Act”)) thereof. Buyer understands that the Berry Hill Interest has
not been registered under the Securities Act and cannot be sold unless
subsequently registered under the Securities Act or an exemption from such
registration is available.

 

5

 

 

Exhibit 10.6

 

4.4 Limitations. Except for the representations and warranties contained in
Sections 4.1 and 4.2, or any documents delivered to Buyer at Closing in
connection with this Agreement (collectively, “Seller’s Reps”), neither Seller
nor any other Person (including, for the avoidance of doubt, any equity holder
of Seller) makes any other express or implied representation or warranty in
respect of the Berry Hill Interest, BR Berry Hill Member, Berry Hill Venture,
the Subsidiary, the Berry Hill Property or the transaction contemplated hereby,
and Seller disclaims all other representations or warranties, whether made by BR
Berry Hill Member, Berry Hill Venture, the Subsidiary or any of their respective
Affiliates, officers, directors, employees, agents or representatives. Except
for Seller’s Reps, Seller hereby disclaims all liability and responsibility for
any representation, warranty, projection, forecast, statement, or information
made, communicated, or furnished (orally or in writing) to Buyer or its
Affiliates or representatives (including any opinion, information, projection or
advice that may have been or may be provided to Buyer by any director, officer,
employee, agent, consultant or representative of BR Berry Hill Member, Berry
Hill Venture, the Subsidiary or any of their respective Affiliates). EXCEPT FOR
AND SUBJECT ONLY TO SELLER’S REPS, SELLER MAKES NO REPRESENTATIONS OR WARRANTIES
WHATSOEVER, EXPRESS, IMPLIED OR STATUTORY, RELATING TO THE BERRY HILL INTEREST,
BR BERRY HILL MEMBER, BERRY HILL VENTURE, THE SUBSIDIARY, THE BERRY HILL
PROPERTY OR ANY PORTION THEREOF, OR THE CONDITION OF OR MATERIALS RELATING TO
THE BERRY HILL INTEREST, BR BERRY HILL MEMBER, BERRY HILL VENTURE, THE
SUBSIDIARY OR THE BERRY HILL PROPERTY, IN WHOLE OR IN PART, OR ANY OTHER MATTER,
ALL SUCH REPRESENTATIONS AND WARRANTIES BEING HEREBY EXPRESSLY DISCLAIMED.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, AND EXCEPT AS EXPRESSLY SET
FORTH IN THIS AGREEMENT AND SUBJECT ONLY TO SELLER’S REPS, BUYER IS PURCHASING
THE BERRY HILL INTEREST “AS IS” AND “WITH ALL FAULTS.” The disclaimer expressed
in this Section 4.4 shall survive Closing.

 

4.5 Survival of Representations and Warranties. The representations and
warranties set forth in this Article 4 are made as of the Effective Date. Such
representations and warranties shall not be deemed to be merged into or waived
by the instruments of Closing, but shall survive the Closing for a period of
twelve (12) months (the “Limitation Period”); provided that (a) the
representations and warranties set forth in Sections 4.1(a), (b), (c) and (d),
Section 4.2 and Section 4.3(g) (the “Warranties”) shall survive the Closing
indefinitely. Seller and Buyer shall have the right to bring an action for
breach of such representations and warranties if they give the other party
written notice of the circumstances giving rise to the alleged breach within the
survival period specified therefor in this Section 4.5.

 

ARTICLE 5. INDEMNIFICATION AND LIMITATION ON LIABILITY

 

5.1 Indemnification between Seller and Buyer. Seller, on the one hand, and
Buyer, on the other hand (for purposes of this Section 5.1, each an
“indemnitor”), shall indemnify, defend and hold the other (for purposes of this
Section 5.1, the “indemnified party”) harmless from any liability, claim,
demand, loss, expense or damage that is: (a) suffered by, or asserted by any
third party against the indemnified party arising from any act or omission of
the indemnitor, its agents, employees or contractors or otherwise arising out of
the ownership of the Berry Hill Interest first arising or occurring prior to the
Closing (with respect to Seller as indemnitor) or from and after the Closing
(with respect to Buyer as the indemnitor); (b) arising out of the breach or
inaccuracy of any of the indemnitor’s representations and warranties set forth
herein; or (c) arising out of any failure by Seller or Buyer to perform any
covenant or obligation of Seller or Buyer, as applicable, set out in this
Agreement.

 

5.2 Limitation on Seller’s Liability. Notwithstanding any other provision of
this Article 5 to the contrary, (a) Seller shall not have any indemnification
obligations for claims under Section 5.1 unless and until the aggregate amount
of such claims exceeds $30,000 (provided that, once the amount of such claims
exceeds $30,000, Seller shall pay damages from the first dollar of damages) and
(b) in no event shall Seller’s aggregate liability for claims under Section 5.1
of this Agreement exceed $500,010.00; provided, however, that the limitations on
liability set forth in this Section 5.2 shall not apply to any loss or liability
arising from any breach of any of Seller’s Warranties, or to Seller’s
obligations with respect to re-prorations under Section 3.2, which liability and
obligations shall not be credited against the foregoing cap. The provisions of
this Article 5 shall be the sole and exclusive remedy of Buyer with respect to
matters which are subject to indemnification by Seller under Section 5.1 of this
Agreement, all other remedies with respect to such matters being hereby waived.

 

6

 

 

Exhibit 10.6

 

5.3 Survival. The provisions of this Article 5 shall survive the Closing;
provided that claims under clause (a) or (b) of Section 5.1 shall be subject to
the Limitation Period. Any claim for indemnification under Section 5.1(a) or (b)
not made on or prior to the expiration of the Limitation Period set forth in
Section 4.5 shall be irrevocably and unconditionally waived and released.

 

ARTICLE 6. MISCELLANEOUS

 

6.1 Parties Bound. No party may assign this Agreement without the prior written
consent of the other party, and any such prohibited assignment shall be void.
This Agreement shall be binding upon and inure to the benefit of the respective
legal representatives, successors, permitted assigns, heirs, and devises of the
parties.

 

6.2 Headings; Entirety; Amendments. The article and paragraph headings of this
Agreement are for convenience only and in no way limit or enlarge the scope or
meaning of the language hereof. All exhibits and appendices attached to this
Agreement are incorporated herein as if fully set forth in this Agreement and
shall be deemed to be a part of this Agreement. This Agreement embodies the
entire agreement between the parties and supersedes all prior agreements and
understandings relating to the Berry Hill Interest, BR Berry Hill Member, Berry
Hill Venture, the Subsidiary or the Berry Hill Property (other than the Charter
Documents of BR Berry Hill Member, Berry Hill Venture and the Subsidiary). This
Agreement may be amended or supplemented (except as noted in the preceding
sentence) only by an instrument in writing executed by the party against whom
enforcement is sought.

 

6.3 Invalidity and Waiver. If any portion of this Agreement is held invalid or
inoperative, then so far as is reasonable and possible the remainder of this
Agreement shall be deemed valid and operative, and, to the greatest extent
legally possible, effect shall be given to the intent manifested by the portion
held invalid or inoperative. The failure by a party to enforce against another
party any term or provision of this Agreement shall not be deemed to be a waiver
of such party’s right to enforce against the other party the same or any other
such term or provision in the future.

 

6.4 Governing Law; Calculation of Time Periods; Time. This Agreement shall, in
all respects, be governed and enforced in accordance with the laws of the State
of New York. Unless otherwise specified, in computing any period of time
described herein, the day of the act or event after which the designated period
of time begins to run is not to be included and the last day of the period so
computed is to be included, unless such last day is a Saturday, Sunday or legal
holiday for national banks in New York, New York, in which event the period
shall run until the end of the next day which is neither a Saturday, Sunday, or
legal holiday. The last day of any period of time described herein shall be
deemed to end at 5:30 p.m. New York, New York time. Time is of the essence in
the performance of this Agreement.

 

6.5 No Third Party Beneficiary. This Agreement is not intended to give or confer
any benefits, rights, privileges, claims, actions, or remedies to any Person as
a third party beneficiary, decree, or otherwise, other than the indemnified
parties referenced in Section 5.1 pursuant to and for purposes of Section 5.1,
who shall be express third party beneficiaries hereof solely for purposes of
Section 5.1.

 

6.6 Confidentiality. No party shall make a public announcement or other
disclosure of this Agreement or any information related to this Agreement to
outside brokers or third parties, before or after the Closing, without the prior
written specific consent of the other, which consent may not be unreasonably
conditioned, delayed or withheld so long as such public disclosure is otherwise
in compliance with this Agreement; provided, however, that without the consent
of the other party, a party may make (i) any public disclosure it reasonably
believes is required by applicable Laws (in which event such party shall use
reasonable efforts to advise the other party prior to the making of such
disclosure); (ii) such disclosure as may be reasonably necessary to enforce any
provision of this Agreement; (iii) any disclosure to any lender or prospective
lender, creditor, officer, employee, agent, current or prospective investor and
their advisors, current or prospective financial partner, or Affiliate as
necessary to perform its obligations under this Agreement or (iv) any public
disclosure that is deemed advisable by such party or its counsel to be disclosed
in connection with financial reporting, securities disclosures or other legal,
tax or financial requirements or guidelines applicable to such party or any
Affiliate thereof, including any disclosures to the Securities and Exchange
Commission and any press release required by the Securities and Exchange
Commission in connection therewith.

 

7

 

 

Exhibit 10.6

 

6.7 Enforcement Expenses. Should any party employ attorneys or arbitrators to
bring an action or arbitration to enforce any of the provisions hereof, the
non-prevailing party in such action or arbitration shall pay the prevailing
party all reasonable costs, charges, and expenses, including attorneys’ fees and
costs, expended or incurred in connection therewith.

 

6.8 Notices. All notices required or permitted hereunder shall be in writing and
shall be served on the following parties:

 

  If to Buyer: c/o Bluerock Real Estate, LLC     712 Fifth Avenue, 9th Floor    
New York, NY 10019     Attn:  Jordan B. Ruddy         If to Seller: c/o Bluerock
Multifamily Advisor, LLC     712 Fifth Avenue, 9th Floor     New York, NY 10019
    Attn: Michael L. Konig

 

6.9 Construction. The parties acknowledge that the parties and their counsel
have reviewed and revised this Agreement and the documents to be executed on or
prior to the Closing Date and agree that the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of this Agreement, the documents to be
delivered on or prior to the Closing Date or any exhibits or amendments thereto.

 

6.10 Execution in Counterparts. This Agreement may be executed in any number of
counterparts, and by each party hereto on separate counterparts, each of which
shall be deemed to be an original, and all of such counterparts shall constitute
one Agreement. To facilitate execution of this Agreement, the parties may
execute and exchange by telephone facsimile or email counterparts of the
signature pages which shall be deemed original signatures for all purposes.

 

6.11 Further Assurances. In addition to the acts and deeds recited herein and
contemplated to be performed, executed and/or delivered by either party on or
prior to the Closing Date, each party agrees to perform, execute and deliver,
but without any obligation to incur any additional liability or expense, on or
after the Closing any further deliveries and assurances as may be reasonably
necessary to consummate the transactions contemplated hereby or to further
perfect the conveyance, transfer and assignment of the Berry Hill Interest to
Buyer.

 

6.12 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 VENUE
OR INCONVENIENT FORUM.

 

6.13 Mutual Execution. Until this Agreement has been duly executed by both
parties hereto and a fully executed copy has been delivered to each party hereto
(which may occur by facsimile transmission or e-mail), this Agreement shall not
be legally binding against the parties.

 

8

 

 

Exhibit 10.6

 

6.14 Cooperation. Subject to the provisions of this Agreement, the parties agree
to cooperate and use Commercially Reasonable Efforts to consummate the
transactions contemplated hereby.

 

[signatures on following page]

 

9

 

 

Exhibit 10.6

 

IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement as of the Effective Date.

 

  BUYER:       BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND III, LLC,   a Delaware
limited liability company       By: BR SOIF III Manager, LLC,     a Delaware
limited liability company,     its Manager

 

    By: /s/ Jordan Ruddy       Jordan Ruddy       Authorized Signatory

 

  SELLER:       BEMT BERRY HILL, LLC,   a Delaware limited liability company    
  By: Bluerock Multifamily Holdings, LP,     a Delaware limited partnership,    
its Manager

 

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

 

  By: /s/ Ramin Kamfar     Ramin Kamfar     Authorized Signatory

 

10