REGISTRATION RIGHTS AGREEMENT

 

This REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of April 2,
2014, is made and entered into by and among Bluerock Residential Growth REIT,
Inc., a Maryland corporation (the “Company”), BR-NPT Springing Entity, LLC (“NPT
SE”), a Delaware limited liability company, and Bluerock Property Management,
LLC, a Michigan limited liability company (“NPT Manager”). NPT SE and NPT
Manager are each referred to herein as a “Holder” and collectively as the
“Holders.” Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in Section 1.

 

 WHEREAS, Bluerock Residential Holdings, L.P., a Delaware limited partnership
(“Bluerock OP”), and NPT SE have entered into a contribution agreement (the
“Contribution Agreement”), pursuant to which NPT SE has contributed all of its
right, title and interest in the Property for operating partnership units of
Bluerock OP (“OP Units”) redeemable for cash or exchangeable, at the Company’s
option, for shares of the Company’s Class A common stock (“Class A Common
Stock”) on a one-for-one basis, in accordance with the terms of the Partnership
Agreement; and

 

WHEREAS, pursuant to the terms of certain management arrangements between NPT SE
and NPT Manager, NPT Manager was entitled to a disposition fee upon any
disposition of an interest in the Property by NPT SE; and

 

WHEREAS, in lieu of the payment of the disposition fee payable to NPT Manager in
cash, NPT SE determined to have a portion of the OP Units issuable to it under
the Contribution Agreement issued to NPT Manager as payment of the disposition
fee and NPT Manager agreed to accept the OP Units in lieu of cash; and

 

 WHEREAS, the Company desires to enter into this Agreement with the Holders in
order to grant the Holders the registration rights contained herein; and

 

WHEREAS, NPT SE contributed the Property to Bluerock OP in consideration of
receiving and NPT Manager’s receipt of, among other things, the registration
rights set forth herein.

 

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

 

 Section 1. Definitions. As used in this Agreement, the following terms shall
have the following meanings:

 

“Affiliate” shall mean, when used with reference to a specified Person, (i) any
Person that directly or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the specified Person; (ii)
any Person who, from time to time, is a member of the immediate family of a
specified Person; (iii) any Person who, from time to time, is an officer or
director or manager of a specified Person; or (iv) any Person who, directly or
indirectly, is the beneficial owner of 50% or more of any class of equity
securities or other ownership interests of the specified Person, or of any
Person of which the specified Person is directly or indirectly the owner of 50%
or more of any class of equity securities or other ownership interests.

 

“Agreement” shall mean this Registration Rights Agreement as originally executed
and as amended, supplemented or restated from time to time.

 

“Bluerock OP” has the meaning set forth in the Recitals hereto.

 

“Board” shall mean the Board of Directors of the Company and any successor
governing body of the Company or any successor of the Company.  

 

“Business Day” shall mean each day other than a Saturday, a Sunday or any other
day on which banking institutions in the State of New York are authorized or
obligated by law or executive order to be closed.

 

 

 

 

“Class A Common Stock” shall have the meaning set forth in the Recitals hereto.

 

“Commission” shall mean the United States Securities and Exchange Commission and
any successor thereto.

 

“Company” shall have the meaning set forth in the introductory paragraph hereof
and includes the Company’s successors by merger, acquisition, reorganization or
otherwise.

 

“Continuous Offering Registration Statement” shall have the meaning set forth in
Section 2(a) hereof.

 

“Contribution Agreement” shall have the meaning set forth in the Recitals
hereto.

 

“Control” (including the terms “Controlling,” “Controlled by” and “under common
Control with”) shall mean the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person through
the ownership of Voting Power, by contract or otherwise.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended (or
any corresponding provision of succeeding law), and the rules and regulations
thereunder.

 

“Holder” and “Holders” have the meanings set forth in the introductory paragraph
above.

 

“NPT Manager” has the meaning set forth in the introductory paragraph above.

 

“NPT SE” has the meaning set forth in the introductory paragraph above.

 

“Offering” means the firmly underwritten public offering by the Company of
shares of its Class A Common Stock registered with the Commission with
Registration No. 333-192610.

 

“OP Units” shall have the meaning set forth in the Recitals hereto.

 

“Partnership Agreement” means the Second Amended and Restated Agreement of
Limited Partnership of Bluerock OP, dated as of April 2, 2014, as the same may
be amended, modified or restated from time to time.

 

“Person” shall mean any individual, partnership, corporation, limited liability
company, joint venture, association, trust, unincorporated organization or other
governmental or legal entity.

 

“Piggy-Back Registration” shall have the meaning set forth in Section 2(c)
hereof.

 

“Property” means that certain multi-family apartment complex containing 313
residential apartment units, commonly known as North Park Towers located in the
City of Southfield, Oakland County, Detroit MSA.

 

“Registrable Securities” shall mean, at any time, a class of equity securities
of the Company or of a successor to the entire business of the Company which (i)
are the shares of Class A Common Stock that may be acquired by each Holder in
connection with the exercise by such Holder of the exchange rights associated
with the OP Units and (ii) are of a class of securities that are listed for
trading on a national securities exchange; provided, however, such Registrable
Securities shall cease to be Registrable Securities when (A) a registration
statement with respect to the sale of such Registrable Securities shall have
been declared effective by the Commission and all such Registrable Securities
shall have been disposed of in accordance with such registration statement, (B)
such Registrable Securities shall have been sold in accordance with Rule 144 (or
any successor provision) under the Securities Act, (C) such Registrable
Securities become eligible to be publicly sold without limitation as to amount
or manner of sale pursuant to Rule 144 (or any successor provision) under the
Securities Act, (D) such Registrable Securities have ceased to be outstanding,
or (E) such Registrable Securities have otherwise been transferred in a
transaction that constitutes a sale thereof under the Securities Act, the
Company has delivered to the Holder’s transferee a new certificate or other
evidence of ownership for such shares not bearing the Securities Act restricted
stock legend and such shares may subsequently be resold or otherwise transferred
by such transferee without registration under the Securities Act.

 

 

 

 

“Registration Expenses” shall mean (i) the fees and disbursements of counsel and
independent public accountants for the Company incurred in connection with the
Company’s performance of or compliance with this Agreement, including the
expenses of any special audits or “comfort” letters required by or incident to
such performance and compliance, and any premiums and other costs of policies of
insurance obtained by the Company against liabilities arising out of the sale of
any securities and (ii) all registration, filing and stock exchange fees, all
fees and expenses of complying with securities or “blue sky” laws, all fees and
expenses of custodians, transfer agents and registrars, all printing expenses,
messenger and delivery expenses; provided, however, Registration Expenses shall
not include any out-of-pocket expenses of the Holders, transfer taxes,
underwriting or brokerage commissions or discounts associated with effecting any
sales of Registrable Securities that may be offered, or legal expenses of any
Holder or group of Holders, which expenses shall be borne by each Holder of
Registrable Securities on a pro rata basis with respect to the Registrable
Securities so sold.

 

“Rule 144” shall mean Rule 144 promulgated by the Commission under the
Securities Act.

 

“Securities Act” shall mean the Securities Act of 1933, as amended (or any
successor corresponding provision of succeeding law), and the rules and
regulations thereunder.

 

“Stand-Off Period” shall have the meaning set forth in Section 6 hereof.

 

“Voting Power” shall mean voting securities or other voting interests ordinarily
(and apart from rights accruing under special circumstances) having the right to
vote in the election of board members or Persons performing substantially
equivalent tasks and responsibilities with respect to a particular entity.

 

Section 2. Continuous Offering Registration; Piggy-Back Registration.  

 

(a) Continuous Offering Registration. The Company agrees to prepare and file
with the Commission not earlier than the first anniversary of the initial
closing of the Offering and no later than 30 business days following the first
anniversary of the initial closing of the Offering a registration statement
under Rule 415 of the Securities Act or any successor rule thereto for the
offering on a continuous or delayed basis in the future covering resales of the
Registrable Securities (the “Continuous Offering Registration Statement”), and
will use commercially reasonable efforts to cause such Continuous Offering
Registration Statement to be declared effective by the Commission as soon as
practicable thereafter. The Continuous Offering Registration Statement shall be
on an appropriate form, as determined by the Company, and the Continuous
Offering Registration Statement and any form of prospectus included therein (or
prospectus supplement relating thereto) shall reflect the plan of distribution
or method of sale as the Holders may from time to time specify in a notice to
the Company.  In the event that the Company fails to file, or if filed fails to
maintain the effectiveness of, a Continuous Offering Registration Statement, the
Holders may participate in a Piggy-Back Registration pursuant to Section 2(c)
hereof, subject to the limitations set forth herein; provided that, if and so
long as a Continuous Offering Registration Statement is on file and effective,
then the Company shall have no obligation to allow participation in a Piggy-Back
Registration.

 

(b) Effectiveness. The Company shall use commercially reasonable efforts to keep
the Continuous Offering Registration Statement continuously effective for the
period beginning on the date on which the Continuous Offering Registration
Statement is declared effective and ending on the date that all of the
Registrable Securities registered under the Continuous Offering Registration
Statement cease to be Registrable Securities. During the period that the
Continuous Offering Registration Statement is effective, the Company shall
supplement or make amendments to the Continuous Offering Registration Statement,
as required by the Securities Act or other law, including to reflect any
specific plan of distribution or method of sale, and shall use its commercially
reasonable efforts to have such supplements and amendments declared effective,
if required, as soon as practicable after filing.

 

 

 

 

(c) Piggy-Back Registration. Subject to Section 2(a) hereof, if the Company
proposes to file a registration statement under the Securities Act with respect
to an underwritten equity offering by the Company, in an amount of at least
Thirty Million Dollars ($30,000,000) for its own account or for the account of
any of its security holders of any class of security (other than (i) any
registration statement filed by the Company under the Securities Act relating to
an offering of Class A Common Stock for its own account as a result of the
exercise of the exchange rights set forth in the Partnership Agreement, (ii) any
registration statement filed in connection with a demand registration right,
(iii) a registration statement on Form S-4 or S-8 (or any substitute form that
may be adopted by the Commission) or filed in connection with an exchange offer
or offering of securities solely to the Company’s existing securities holders),
or (iv) any registration statement filed prior to the first anniversary of the
initial closing of the Offering, then the Company shall give written notice of
such proposed filing to the Holders as soon as practicable (but in no event less
than ten (10) days before the anticipated filing date), and such notice shall
offer the Holders the opportunity to register such number of shares of
Registrable Securities as each such Holder may request (a “Piggy-Back
Registration”); provided, however, that in no event shall the Company be
required to register in a Piggy-Back Registration any Registrable Securities
registered pursuant to an effective, or filed but not yet effective, Continuous
Offering Registration Statement. The Company shall use its commercially
reasonable efforts to cause the managing underwriter or underwriters of a
proposed underwritten offering to permit the Registrable Securities requested to
be included in a Piggy-Back Registration to be included on the same terms and
conditions as any similar securities of the Company included therein.

 

(d) Reduction of Offering. Notwithstanding anything contained herein, if in the
opinion of the managing underwriter or underwriters of an offering described in
Section 2(c) hereof, the (i) size of the offering that the Holders, the Company
and such other Persons intend to make or (ii) kind of securities that the
Holders, the Company and/or any other Persons intend to include in such offering
are such that the success of the offering would be adversely affected by
inclusion of the Registrable Securities requested to be included, then (A) if
the size of the offering is the basis of such underwriter’s opinion, the amount
of Registrable Securities to be offered for the accounts of Holders shall be
reduced pro rata (according to the Registrable Securities proposed for
registration) to the extent necessary to reduce the total amount of Registrable
Securities to be included in such offering to the amount recommended by such
managing underwriter or underwriters; provided that, in the case of a Piggy-Back
Registration, if the securities are being offered for the account of other
Persons as well as the Company, then with respect to the Registrable Securities
intended to be offered by Holders, the proportion by which the amount of such
class of securities intended to be offered by Holders is reduced shall not
exceed the proportion by which the amount of such class of the securities
intended to be offered by such other Persons is reduced; and (B) if the
combination of the securities to be offered is the basis of such underwriter’s
opinion, (x) the Registrable Securities to be included in such offering shall be
reduced as described in clause (A) above (subject to the proviso in clause (A))
or (y) if the actions described in clause (x) would, in the opinion of the
managing underwriter or underwriters, be insufficient to substantially eliminate
the adverse effect that inclusion of the Registrable Securities requested to be
included would have on such offering, such Registrable Securities will be
excluded from such offering.

 

Section 3. Black-Out Periods.  

 

Notwithstanding anything herein to the contrary, the Company shall have the
right, exercisable from time to time by the Board, to defer the filing of a
Registration Statement or to require the Holders not to sell pursuant to a
Registration Statement or similar document under the Securities Act filed
pursuant to Section 2 or to suspend the effectiveness thereof if at the time of
the delivery of such notice the Board reasonably and in good faith has
determined that (a) such offer or sale of any Registrable Securities would
materially impede, delay or interfere with any material transaction involving
the Company; (b) the sale of Registrable Securities pursuant to a Registration
Statement or similar document under the Securities Act filed pursuant to Section
2 would require disclosure of non-public material information not otherwise
required to be disclosed under applicable law; (c)(i) the Company has a bona
fide business purpose for preserving the confidentiality of a material
transaction; (ii) disclosure would have a material adverse effect on the Company
or the Company’s ability to consummate such a material transaction; or (iii)
such a material transaction renders the Company unable to comply with Commission
requirements, in each case, under circumstances that would make it impracticable
or inadvisable, to cause the Registration Statement or other similar document
under the Securities Act filed pursuant to Section 2 to become effective or to
promptly amend or supplement the Registration Statement on a post-effective
basis, as applicable; or (d) the Board determines in good faith that it is in
the Company’s best interests or the Company is required by law, rule or
regulation to supplement a Registration Statement or other similar document in
order to ensure that the prospectus included in such Registration Statement or
similar document (i) contains the information required by the form on which such
Registration Statement or similar document was filed, or (ii) discloses any
facts or events arising after the effective date of the Registration Statement
or similar document that, individually or in the aggregate, represents a
fundamental change in the information set forth therein; provided, however, that
in no event shall any black-out period extend for an aggregate period of more
than 90 days in any 12-month period. The Company, as soon as practicable, shall
(i) give the Holders prompt written notice in the event that the Company has
suspended sales of Registrable Securities pursuant to this Section 3, (ii) give
the Holders prompt written notice of the completion of such suspension event and
(iii) use its commercially reasonable efforts to cause the Registration
Statement to become effective or to amend or supplement the Registration
Statement on a post-effective basis or to take such action as is necessary to
permit resumed use of the Registration Statement or filing thereof as soon as
reasonably possible following the conclusion of the applicable suspension event
and its effect.

 

 

 

 

Each Holder agrees in connection with the redemption of OP Units in exchange for
Registrable Securities, that, upon receipt of any notice from the Company of the
happening of any event of the kind described in this Section 3, such Holder will
forthwith discontinue its disposition of Registrable Securities pursuant to the
Continuous Offering Registration Statement relating to such Registrable
Securities until such Holder’s receipt of the notice of completion of such
event.

 

Section 4. Registration Procedures.  

 

(a) In connection with the filing of the Continuous Offering Registration
Statement as provided by this Agreement, until the Registrable Securities cease
to be Registrable Securities, the Company shall use commercially reasonable
efforts to, as expeditiously as reasonably practicable:   

 

(i)            furnish to each Holder of the Registrable Securities being
registered, without charge, such number of conformed copies of such Continuous
Offering Registration Statement and of each such amendment and supplement
thereto (in each case including all exhibits) other than those which are being
incorporated into such Continuous Offering Registration Statement by reference,
such number of copies of the prospectus contained in such Continuous Offering
Registration Statement (including each complete prospectus and any summary
prospectus) and any other prospectus filed under Rule 424 under the Securities
Act in conformity with the requirements of the Securities Act, and such other
documents, including documents incorporated by reference, as such Holder may
reasonably request;  

 

(ii)            register or qualify all Registrable Securities under such other
securities or “blue sky” laws of such jurisdictions as the Holders and the
underwriters of the Registrable Securities being registered, if any, shall
reasonably request, but only to the extent legally required to do so, to keep
such registration or qualification in effect for so long as such Continuous
Offering Registration Statement remains in effect, to allow the Holders to
consummate the disposition in such jurisdiction of the securities owned by the
Holders, except that the Company shall not for any such purpose be required to
qualify generally to do business as a foreign company or to register as a broker
or dealer in any jurisdiction where it would not otherwise be required to
qualify but for this Section 4(a)(ii), or to consent to general service of
process in any such jurisdiction, or to be subject to any material tax
obligation in any such jurisdiction where it is not then so subject;  

 

(iii)           notify the Holders at any time when the Company becomes aware
during any period during which a prospectus for Registrable Securities is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such Continuous Offering
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be stated therein
or necessary to make the statements therein not misleading in light of the
circumstances under which they were made, and promptly prepare and file a
supplement or prepare, file and obtain effectiveness of a post-effective
amendment to the Continuous Offering Registration Statement and, at the request
of the Holders, furnish to the Holders a reasonable number of copies of a
supplement to, or an amendment of, such prospectus as may be necessary so that,
as thereafter delivered to the purchasers of such Registrable Securities, such
prospectus shall not include an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which
they were made;  

 

 

 

 

(iv)            comply or continue to comply in all material respects with the
Securities Act and the Exchange Act and with all applicable rules and
regulations of the Commission thereunder so as to enable any Holder to sell its
Registrable Securities pursuant to the Continuous Offering Registration
Statement;

 

(v)            provide a transfer agent and registrar for all Registrable
Securities covered by such Continuous Offering Registration Statement not later
than the effective date of such Continuous Offering Registration Statement;  

 

(vi)            cooperate with the Holders to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold (if
the Registrable Securities are then certificated) and not bearing any Securities
Act legend; and enable certificates for such Registrable Securities to be issued
for such number of shares and registered in such names as the Holders may
reasonably request in writing at least two Business Days prior to any sale of
Registrable Securities;  

 

(vii)            list all Registrable Securities covered by such Continuous
Offering Registration Statement on any securities exchange or national quotation
system on which any such class of securities is then listed or quoted and cause
to be satisfied all requirements and conditions of such securities exchange or
national quotation system to the listing or quoting of such Registrable
Securities that are reasonably within the control of the Company including,
without limitation, registering the applicable class of Registrable Securities
under the Exchange Act, if appropriate, and using commercially reasonable
efforts to cause such registration to become effective pursuant to the rules of
the Commission;  

 

(viii)          in connection with any sale, transfer or other disposition by
any Holder of any Registrable Securities pursuant to Rule 144, cooperate with
such Holder to facilitate the timely preparation and delivery of certificates
representing the Registrable Securities to be sold and not bearing any
Securities Act legend, and enable certificates for such Registrable Securities
to be for such number of shares and registered in such name as the Holders may
reasonably request in writing at least three Business Days prior to any sale of
Registrable Securities pursuant to Rule 144. 

 

(ix)            notify the Holders, promptly after it shall receive notice
thereof, of the time when such Continuous Offering Registration Statement, or
any post-effective amendments to the Continuous Offering Registration Statement,
shall have become effective, or a supplement to any prospectus forming part of
such Continuous Offering Registration Statement has been filed or when any
document is filed with the Commission which would be incorporated by reference
into the prospectus;  

 

(x)            notify the Holders of any request by the Commission for the
amendment or supplement of such Continuous Offering Registration Statement or
prospectus for additional information; and  

 

(xi)          advise the Holders, promptly after it shall receive notice or
obtain actual knowledge thereof, of (A) the issuance of any stop order,
injunction or other order or requirement by the Commission suspending the
effectiveness of such Continuous Offering Registration Statement or the
initiation or threatening of any proceeding for such purpose and use
commercially reasonable efforts to prevent the issuance of any stop order,
injunction or other order or requirement or to obtain its withdrawal, if such
stop order, injunction or other order or requirement should be issued, (B) the
suspension of the registration of the subject shares of the Registrable
Securities in any state or other jurisdiction and (C) the removal of any such
stop order, injunction or other order or requirement or proceeding or the
lifting of any such suspension.  

 

(b) In connection with the filing of any Continuous Offering Registration
Statement covering Registrable Securities, each Holder shall furnish in writing
to the Company such information regarding such Holder (and any of his, her or
its Affiliates), the intended method of distribution of such Registrable
Securities and such other information requested by the Company as is necessary
or advisable for inclusion in the Continuous Offering Registration Statement
relating to such offering pursuant to the Securities Act, including, without
limitation, any information required by Item 507 of Regulation S-K promulgated
under the Securities Act as may be amended from time to time.  

 

 

 

 

Each Holder agrees by acquisition of the Registrable Securities that (i) upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 4(a)(iii) hereof, such Holder will forthwith discontinue
its disposition of Registrable Securities pursuant to the Continuous Offering
Registration Statement until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 4(a)(iii) hereof;
(ii) upon receipt of any notice from the Company of the happening of any event
of the kind described in clause (A) of Section 4(a)(xi) hereof, such Holder will
discontinue its disposition of Registrable Securities pursuant to such
Continuous Offering Registration Statement until such Holder’s receipt of the
notice described in clause (C) of Section 4(a)(xi) hereof; and (iii) upon
receipt of any notice from the Company of the happening of any event of the kind
described in clause (B) of Section 4(a)(xi) hereof, such Holder will discontinue
its disposition of Registrable Securities pursuant to such Continuous Offering
Registration Statement in the applicable state jurisdiction(s) until such
Holder’s receipt of the notice described in clause (C) of Section 4(a)(xi)
hereof.  

 

Section 5. Indemnification.  

 

(a) Indemnification by the Company. The Company agrees to indemnify and hold
harmless each Holder, its members, partners, officers, directors, managers,
trustees, stockholders, employees, retained professionals, agents and investment
advisers, each underwriter, broker or any other Person on behalf of such Holder,
and each Person, if any, who Controls such Holder, together with the members,
partners, officers, directors, managers, trustees, stockholders, employees,
retained professionals, agents and investment advisers of such Controlling
Person, against any losses, claims, damages, liabilities and expenses
(including, without limitation, reasonable attorneys’ fees),to which a Holder or
any such indemnitees may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages, liabilities and expenses (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of,
or based upon (i) any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
Registrable Securities were registered and sold under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or arising out of or based upon
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (ii) any violation
or alleged violation of the Securities Act or state securities laws or rules
thereunder by the Company that relate to any action or inaction by the Company
in connection with such registration statement, and the Company will reimburse
such Person for any reasonable legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending any such loss,
claim, liability, action or proceedings; provided, however, that the Company
shall not be liable to, or required to indemnify, any Holder under this Section
5(a) in any such case to the extent that any such loss, claim, damage, liability
(or action or proceeding in respect thereof) or expense arises out of or is
based upon, an untrue statement or alleged statement or omission or alleged
omission made in such registration statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company by any such
Holder or on such Holder’s behalf. The indemnity contained in this Section 5(a)
shall remain in full force and effect regardless of any investigation made by or
on behalf of a Holder or any such Controlling Person and shall survive the
transfer of such securities by a Holder.

 

(b) Indemnification by the Holder. Each Holder agrees to indemnify and hold
harmless the Company, each present or past member of the Board, each past or
present officer, employee, retained professional, agent and investment adviser,
each past or present external advisor or manager, of the Company, underwriter,
broker or other Person acting on behalf of the Holder, and each other Person, if
any, who Controls any of the foregoing, together with the members, partners,
officers, directors, managers, trustees, stockholders, employees, retained
professionals, agents and investment advisers of such Controlling Person,
against any losses, claims, damages, liabilities and expenses (including,
without limitation, reasonable attorneys’ fees), to which the Company or any
such indemnitees may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages, liabilities and expenses (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon (i) any untrue statement or alleged untrue statement of a
material fact in or omission or alleged omission to state a material fact from
such registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto, if
such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon information provided by such Holder or on
such Holder’s behalf, or (ii) any violation or alleged violation of the
Securities Act or state securities laws or rules thereunder by such Holder. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of the Company or any such Board member, officer, employee,
agent, investment adviser or Controlling Person and shall survive the transfer
of such securities by any Holder. The obligation of a Holder to indemnify will
be several and not joint, among the Holders of Registrable Securities and shall
be limited to the net proceeds (after underwriting fees, commissions or
discounts) actually received by such Holder from the sale of Registrable
Securities pursuant to such registration statement, except in the case of fraud
or willful misconduct by such Holder.

 

 

 

 

(c) Notices of Claims, Etc. Promptly after receipt by an indemnified party of
notice of the commencement of any action or proceeding involving a claim
referred to in the preceding paragraphs of this Section 5, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give prompt written notice to the latter of the commencement of such
action; provided, however, that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under the preceding paragraphs of this Section 5, except to the
extent that the indemnifying party is actually and materially prejudiced by such
failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party’s reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, the indemnifying party shall be entitled to assume the
defense thereof, for itself, if applicable, together with any other indemnified
party similarly notified, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to the indemnified party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof; provided, that if (i) any indemnified party shall have
reasonably concluded that there may be one or more legal or equitable defenses
available to such indemnified party which are additional to or conflict with
those available to the indemnifying party, or that such claim or litigation
involves or could have an effect upon matters beyond the scope of the indemnity
provided hereunder, or (ii) such action seeks an injunction or equitable relief
against any indemnified party or involves actual or alleged criminal activity,
the indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party without such indemnified party's
prior written consent (but, without such consent, shall have the right to
participate therein with counsel of its choice) and such indemnifying party
shall reimburse such indemnified party and any Person controlling such
indemnified party for that portion of the fees and expenses of any counsel
retained by the indemnified party which is reasonably related to the matters
covered by the indemnity provided hereunder. The indemnifying party shall not,
without the consent of the indemnified party, consent to any judgment or
settlement that (i) does not contain a full and unconditional release of the
indemnified party from all liability concerning any claim or litigation; (ii)
includes a statement about or an admission of fault, culpability or a failure to
act by or on behalf of any indemnified party; or (iii) commits any indemnified
party to take, or hold back from taking, any action.

 

(d) Indemnification Payments. To the extent that the indemnifying party does not
assume the defense of an action brought against the indemnified party as
provided in Section 5(c) hereof, or assumes such defense and thereafter does not
diligently pursue the same to conclusion the indemnified party (or parties if
there is more than one) shall be entitled to the reasonable legal expenses of
common counsel for the indemnified party (or parties). In such event, however,
the indemnifying party will not be liable for any settlement effected without
the written consent of such indemnifying party, which consent shall not be
unreasonably withheld. The indemnification required by this Section 5 shall be
made by periodic payments of the amount thereof during the course of an
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.

 

(e) Contribution. If, for any reason, the foregoing indemnity is unavailable, or
is insufficient to hold harmless an indemnified party, then the indemnifying
party shall contribute to the amount paid or payable by the indemnified party as
a result of the expense, loss, damage or liability, (i) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and the indemnified party on the other (determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission relates to information supplied by the indemnifying party or the
indemnified party and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission) or (ii) if the allocation provided by subclause (i) above is not
permitted by applicable law or provides a lesser sum to the indemnified party
than the amount hereinafter calculated, in the proportion as is appropriate to
reflect not only the relative fault of the indemnifying party and the
indemnified party, but also the relative benefits received by the indemnifying
party on the one hand and the indemnified party on the other, as well as any
other relevant equitable considerations. No indemnified party guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any indemnifying party
who was not guilty of such fraudulent misrepresentation.

 

 

 

 

Section 6. Market Stand-Off Agreement. Each Holder hereby agrees that it shall
not, to the extent requested by the Company or an underwriter of securities of
the Company in connection with any public offering of the Company’s Class A
Common Stock or other equity securities, directly or indirectly sell, offer to
sell (including, without limitation, any short sale), grant any option or
otherwise transfer or dispose of any Registrable Securities (other than to
donees of such Holder, who agree to be similarly bound) within fourteen days
prior to, and for up to 90 days following, the effective date of a Continuous
Offering Registration Statement of the Company filed under the Securities Act or
the date of an underwriting agreement with respect to an underwritten public
offering of the Company’s securities (the “Stand-Off Period”); provided,
however, that:  

 

(a) with respect to any Stand-Off Period, such agreement to Stand-Off shall not
be applicable to the Registrable Securities to be sold on the Holder’s behalf to
the public in such underwritten offering pursuant to such Continuous Offering
Registration Statement;  

 

(b) all executive officers and directors of the Company then holding shares of
Class A Common Stock of the Company shall enter into similar agreements;

 

(c) the Company shall use commercially reasonable efforts to obtain similar
agreements from each 5% or greater stockholder of the Company; and

 

(d) the Holder shall be allowed any concession or proportionate release allowed
to any (i) officer, (ii) director or (iii) other 5% or greater stockholder of
the Company that entered into similar agreements.  

 

In order to enforce the foregoing covenant, the Company shall have the right to
place restrictive legends on the certificates representing the Registrable
Securities subject to this Section 6 and to impose stop transfer instructions
with respect to the Registrable Securities and such other shares of Class A
Common Stock of each Holder (and the Class A Common Stock or securities of every
other Person subject to the foregoing restriction) until the end of such period.

 

 Section 7. Miscellaneous.  

 

(a) Termination; Survival. The rights of each Holder under this Agreement shall
terminate on the earlier of (i) the date on which such Holder no longer holds
any Registrable Securities, and (ii) the date that all of the Registrable
Securities held by such Holder may be sold during any three-month period in a
single transaction or series of transactions without volume limitations under
Rule 144 (or any successor provision) under the Securities Act. Notwithstanding
the foregoing, the obligations of the parties under Section 5 hereof and
paragraphs (d), (e) and (g) of this Section 7 shall survive the termination of
this Agreement.  

 

(b) Expenses. All Registration Expenses incurred in connection with any
Continuous Offering Registration Statement under Section 2 hereof shall be borne
by the Company, whether or not any Continuous Offering Registration Statement
related thereto becomes effective.

 

(c) Counterparts. This Agreement may be executed in one or more counterparts,
all of which shall be considered one and the same agreement, and shall become
effective when one or more such counterparts have been signed by each of the
parties and delivered to each of the other parties.  

 

(d) Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.

 

(e) Waiver Of Jury Trial; Forum. THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT AND FOR ANY COUNTERCLAIM THEREIN. EACH PARTY SHALL BRING ANY
ACTION AGAINST ANY OTHER PARTY 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.

 

 

 

 

(f) Prior Agreement; Construction; Entire Agreement. This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof,
and supersedes all prior agreements and understandings between the parties, and
all such prior agreements and understandings are merged herein and shall not
survive the execution and delivery hereof. This Agreement supersedes and
replaces all provisions of the Partnership Agreement with respect to the subject
matter hereof, including without limitation the provisions of Section 8.05 of
the Partnership Agreement.

 

(g) Notices. All notices or other communications required or permitted to be
given hereunder shall be in writing and shall be delivered by hand or sent,
postage prepaid, by registered, certified or express mail or reputable overnight
courier service or be telecopier and shall be deemed given when so delivered by
hand or, if mailed, three days after mailing (one Business Day in the case of
express mail or overnight courier service), addressed as follows:

 

 If to the Holder:   To the address set forth beside the respective Holder’s
signature      If to the Company:  

Bluerock Residential Growth REIT, Inc.

712 Fifth Avenue, 9th Floor

New York, New York 10019

Attention: R. Ramin Kamfar

Facsimile: 646-278-4220

         

with a copy to:

 

Kaplan, Voekler, Cunningham & Frank, PLC

1401 East Cary Street

Richmond, VA 23219

Attention: Richard P. Cunningham, Jr.

Facsimile: 804.823.4099

 

(h) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties
thereto. The Company may assign its rights or obligations hereunder to any
successor to the Company’s business or with the prior written consent of Holders
of a majority of the then outstanding Registrable Securities, which consent will
not be unreasonably withheld, conditioned or delayed. Notwithstanding the
foregoing, no assignee of the Company shall have any of the rights granted under
this Agreement until such assignee shall acknowledge its rights and obligations
hereunder by a signed written agreement pursuant to which such assignee accepts
such rights and obligations. A Holder may not assign its rights under this
Agreement without the consent of the Company, which the Company may withhold in
its sole discretion.

 

(i) Headings. Headings are included solely for convenience of reference and if
there is any conflict between headings and the text of this Agreement, the text
shall control.

 

(j) Amendments And Waivers. The provisions of this Agreement may be amended or
waived at any time only by the written agreement of the Company and the Holders
of a majority of the Registrable Securities; provided, however, that the
provisions of this Agreement may not be amended or waived without the consent of
the Holders of all the Registrable Securities adversely affected by such
amendment or waiver if such amendment or waiver adversely affects a portion of
the Registrable Securities but does not so adversely affect all of the
Registrable Securities; provided, further, that the provisions of the preceding
provision may not be amended or waived except in accordance with this sentence.
Any waiver, permit, consent or approval of any kind or character on the part of
any such Holders of any provision or condition of this Agreement must be made in
writing and shall be effective only to the extent specifically set forth in
writing. Any amendment or waiver effected in accordance with this paragraph
shall be binding upon each Holder of Registrable Securities and the Company.

 

 

 

 

(k) Interpretation; Absence Of Presumption. For the purposes hereof, (i) words
in the singular shall be held to include the plural and vice versa and words of
one gender shall be held to include the other gender as the context requires,
(ii) the terms “hereof,” “herein,” and “herewith” and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement, and section,
paragraph or other references are to the sections, paragraphs, or other
references to this Agreement unless otherwise specified, (iii) the word
“including” and words of similar import when used in this Agreement shall mean
“including, without limitation,” unless the context otherwise requires or unless
otherwise specified, (iv) the word “or” shall not be exclusive and (v)
provisions shall apply, when appropriate, to successive events and transactions.

 

 This Agreement shall be construed without regard to any presumption or rule
requiring construction or interpretation against the party drafting or causing
any instruments to be drafted.  

 

(l) Severability. If any provision of this Agreement shall be or shall be held
or deemed by a final, non-appealable order by a competent authority to be
invalid, inoperative or unenforceable, such circumstance shall not have the
non-appealable effect of rendering any other provision or provisions herein
contained invalid, inoperative or unenforceable, but this Agreement shall be
construed as if such invalid, inoperative or unenforceable provision had never
been contained herein so as to give full force and effect to the remaining such
terms and provisions.

 

(m) Specific Performance; Other Rights. The parties recognize that various other
rights rendered under this Agreement are unique and, accordingly, the parties
shall, in addition to such other remedies as may be available to them at law or
in equity, have the right to enforce the rights under this Agreement by actions
for injunctive relief and specific performance.

 

(n) Attorneys’ Fees. Should any party hereto 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.

 

(o) Further Assurances. In connection with this Agreement, as well as all
transactions and covenants contemplated by this Agreement, each party hereto
agrees to execute and deliver or cause to be executed and delivered such
additional documents and instruments and to perform or cause to be performed
such additional acts as may be necessary or appropriate to effectuate, carry out
and perform all of the terms, provisions and conditions of this Agreement and
all such transactions and covenants contemplated by this Agreement.

 

(p) No Waiver Of Breach. The waiver of any breach of any term or condition of
this Agreement shall not operate as a waiver of any other breach of such term or
condition or of any other term or condition, nor shall any failure to enforce
any provision hereof operate as a waiver of such provision or of any other
provision hereof.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

 

 

 

[Signature Page to Registration Rights Agreement]

 

IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement
to be duly executed as of the date first written above.

 

BLUEROCK RESIDENTIAL GROWTH REIT, INC.,

a Maryland corporation

 

By: /s/ Christopher J. Vohs   Name: Christopher J. Vohs   Its: Treasurer and
Chief Accounting Officer  

 

HOLDERS:

 

BR-NPT Springing Entity, LLC,

a Delaware limited liability company

 

By: BR-North Park Towers, LLC   Its: Manager  

 

  By: Bluerock Real Estate, L.L.C.   Its: Manager

 

  By: /s/ Jordan B. Ruddy     Name: Jordan B. Ruddy     Title: Authorized
Signatory  

 

ADDRESS: c/o Bluerock Real Estate L.L.C.     712 Fifth Avenue, Ninth Floor    
New York, New York 10019  

 

Bluerock Property Management, LLC,

a Michigan limited liability company

 

By: Bluerock Real Estate, L.L.C.   Its: Manager  

 

  By: /s/ Jordan B. Ruddy     Name: Jordan B. Ruddy     Its: Authorized
Signatory  

 

ADDRESS: c/o Bluerock Real Estate L.L.C.     712 Fifth Avenue, Ninth Floor    
New York, New York 10019