Exhibit 10.4

 

BR BERRY HILL MANAGING MEMBER, LLC
FIRST AMENDMENT TO AMENDED AND RESTATED LIMITED LIABILITY COMPANY
AGREEMENT

 

This First Amendment to Amended and Restated Limited Liability Company Agreement
(this “First Amendment”) of BR Berry Hill Managing Member, LLC, a Delaware
limited liability company (the “Company”), is adopted, executed and agreed to
effective as of August 13, 2013, by and among Bluerock Special Opportunity +
Income Fund III, LLC, a Delaware limited liability company (“SOIF III”),
Bluerock Growth Fund, LLC (formerly known as BR Berry Hill Nashville, LLC)
(“BGF”) and BEMT Berry Hill, LLC, a Delaware limited liability company (“BEMT”).
Undefined terms used herein shall have the meaning ascribed to them in the
Agreement (as defined below).

 

WITNESSETH:

 

WHEREAS, the Company, was formed on October 3, 2012, pursuant to the Act;

 

WHEREAS, SOIF III and BEMT were the initial members of the Company and entered
into that certain Limited Liability Company Agreement dated October 18, 2012
(the “Original LLC Agreement”) providing for the operation and administration of
the Company;

 

WHEREAS, SOIF III subsequently sold and transferred to BEMT an additional 6.253%
Interest in the Company, as reflected in that certain First Amendment to Limited
Liability Company dated December 17, 2012;

 

WHEREAS, BGF was admitted as a member of the Company and SOIF III, BEMT and BGF
subsequently entered into that certain Amended and Restated Limited Liability
Company Agreement dated December 26, 2012 (the “Agreement”) to supersede and
replace the Original Agreement as amended on December 17, 2012;

 

WHEREAS, BGF pursuant to a separate securities offering purchased Interest in
the Company as SOIF III’s Interests in the Company were simultaneously redeemed
with such securities offering proceeds;

 

WHEREAS, BEMT and BGF have entered into a Membership Interest Purchase Agreement
pursuant to which BEMT will sell to BGF, and BGF will acquire from BEMT, a
further ownership interest in the Company;

 

WHEREAS, the parties hereto wish to amend the Agreement to reflect these and
related matters.

 

NOW, THEREFORE, in consideration of the agreements and covenants set forth
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:

 

1.          Except for the 6.253% Interest in the Company sold by SOIF III to
BEMT as reflected in the December 17, 2012 First Amendment to the Original
Agreement, as to which BEMT is the full successor in interest to such Interest,
all Interests in the Company formerly owned or held by SOIF III have been fully
redeemed. As such, SOIF III is no longer a Member of the Company nor does it
have any further economic or voting interest in or to the Company. Accordingly,
SOIF III has withdrawn as a Member and all references in the Agreement to SOIF
III being a Member or having any right, title or interest in or to any Interest
in the Company are hereby deleted.

 

2.          Section 5.1 of the Agreement is hereby deleted in its entirety and
replaced with the following:

 

“Exhibit A attached hereto reflects the Base Capital Contribution made by the
Members.”

 

 

 

 

Exhibit 10.4

 

3.          Exhibit A of the Agreement is hereby deleted in its entirety and
replaced with the Exhibit A attached hereto.

 

4.          Section 5.2 of the Agreement is hereby deleted in its entirety and
replaced with the following:

 

“Additional Capital Contributions.

 

(a)          Additional Capital Contributions (“Additional Capital
Contributions”) may be called for from the Members by the Manager from time to
time as and to the extent capital is necessary. Such Additional Capital
Contributions shall be requested in an amount for each Member equal to the
product of the amount of the aggregate Capital Contribution called for
multiplied by that Member’s Percentage Interest, as defined in Section 5.3. Such
Additional Capital Contributions, if payable, 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)          [intentionally deleted]

 

(c)          BEMT and BHN shall be required to fund their proportionate share of
the Additional Capital Contributions (the “Required Funding Amount”) in an
amount for each of BEMT and BHN equal to the product of the Required Funding
Amount multiplied by the ratio of that Member’s Capital Contributions to
aggregate Capital Contributions made by BEMT and BHN.

 

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

 

(i)          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
promissory note(s) in form reasonably satisfactory to the Non-Defaulting 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 (20%) percent 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-Defaulting 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 such Default Loan, the Defaulting Member hereby
pledges, assigns and grants a security interest in its Interest to the
Non-Defaulting Member and agrees to promptly execute such documents and
statements reasonably requested by the Non-Defaulting Member to further evidence
and secure such security interest. Any advance by the Non-Defaulting Member on
behalf of a Defaulting Member pursuant to this Section 5.2(d)(i) 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-Defaulting Member, for application to and until all Default Loans have
been paid in full, the pro rata 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;

 

 

 

 

Exhibit 10.4

 

(ii)         subject to any applicable thin capitalization limitations on
indebtedness of the Company, to treat its 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-Defaulting 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 the Defaulting
Member. If both BEMT and BHN have loans outstanding to the Company under this
provision, such loans shall be payable to such Member in proportion to the
outstanding balances of such loans to such Member at the time of payment. Any
advance to the Company pursuant to this Section 5.2(d)(ii) shall not be treated
as a Capital Contribution made by the Defaulting Member;

 

(iii)        in lieu of the remedies set forth in subparagraphs (i) or (ii),
revoke its portion of such Additional Capital Contribution, whereupon the
portion of the Capital Contribution made by the Non-Defaulting Member shall be
returned within ten (10) days with interest computed at the Default Loan Rate by
the Company.

 

(e)          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, 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, (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 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.          Section 6.1(a) of the Agreement is deleted in its entirety, and is
hereby replaced as follows:

 

“The Manager shall calculate and determine the amount of Distributable Funds for
each applicable period. Except as provided in Sections 5.2(d), 6.1(b) or 13.3 or
otherwise provided hereunder, Distributable Funds, if any, shall be distributed
to the Members on the 15th day of each month or from time to time as determined
by the Manager as follows: to the Members in accordance with their Percentage
Interests.”

 

 

 

 

Exhibit 10.4

 

6.          Section 16.1(a) of the Agreement is deleted in its entirety, and is
hereby replaced as follows:

 

“Notices. Any notice required or permitted to be given hereunder shall be in
writing and will be deemed received (a) on the date of receipted delivery by a
courier service or (b) on the fifth business day after mailing, by registered or
certified United States mail, postage prepaid, to the appropriate party at its
address set forth below:

 

If to BEMT: c/o Bluerock Enhanced Multifamily Advisor   712 Fifth Avenue, 9th
Floor   New York, NY 10019   Attn:  Michael L. Konig, Esq.    

 

If to BHN: c/o BR Fund Manager, LLC   712 Fifth Avenue, 9th Floor   New York, NY
10019   Attn: Jordan B. Ruddy”

 

[SIGNATURES ON FOLLOWING PAGE]

 

 

 

 

Exhibit 10.4

 

IN WITNESS WHEREOF, the Members have executed this First Amendment as of the
date first set forth above.

 

  MEMBERS:           BEMT BERRY HILL, LLC,     a Delaware limited liability
company  

 

  By: Bluerock Enhanced Multifamily Holdings, LP,     a Delaware limited
partnership,     its Manager

 

    By: Bluerock Multifamily Growth REIT, Inc.,       a Maryland corporation,  
    its General Partner        

 

  By: /s/ Jordan Ruddy     Jordan Ruddy     Authorized Signatory

 

  BLUEROCK GROWTH FUND, LLC,     a Delaware limited liability company  

 

  By: BR Fund Manager, LLC,     a Delaware limited liability company,     its
Manager

 

  By: /s/ Jordan Ruddy     Jordan Ruddy     Authorized Signatory

 

  FORMER MEMBER:       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

 

 

 

 

Exhibit 10.4

 

EXHIBIT A

 

Capital Contributions and Percentage Interests

 

Member Name   Capital
Contribution   Percentage Interest                 Bluerock Growth Fund, LLC   $
2,814,354.08   35.194 %             BEMT Berry Hill, LLC   $ 5,182,271.09  
64.806 %