Exhibit 10.1

 

SECOND AMENDMENT TO LINE OF CREDIT AND SECURITY AGREEMENT

 

THIS SECOND AMENDMENT TO LINE OF CREDIT AND SECURITY AGREEMENT (this
“Agreement”) is made as of August 13, 2013, between and among BLUEROCK
MULTIFAMILY GROWTH REIT, INC., a Maryland corporation f/k/a Bluerock Enhanced
Multifamily Trust, Inc. (the “Borrower”), and BLUEROCK SPECIAL OPPORTUNITY +
INCOME FUND II, LLC, a Delaware limited liability company (“SOIF II”) and
BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND III, LLC, a Delaware limited
liability company (“SOIF III,” and together with SOIF II and their collective
successors and assigns, the “SOIF Parties”).

 

WITNESSETH:

 

WHEREAS, the SOIF Parties and the Borrower entered into that certain Line of
Credit and Security Agreement dated as of October 2, 2012 (the “LOC Agreement”),
which LOC Agreement evidenced a revolving line of credit and the obligation of
the Borrower thereunder to repay to the SOIF Parties the principal sum of up to
Twelve Million Five Hundred Thousand dollars ($12,500,000.00) (the “Commitment
Amount”) plus interest, fees and costs; and

 

WHEREAS, the SOIF Parties and the Borrower entered into that certain Line of
Credit and Security Agreement Modification Agreement dated as of March 4, 2013,
whereunder the SOIF Parties and the Borrower modified the LOC Agreement to (i)
increase the Commitment Amount to Thirteen Million Five Hundred Thousand dollars
($13,500,000.00), and (ii) extend the maturity date thereof by six (6) months to
October 2, 2013; and

 

WHEREAS, the LOC as amended March 4, 2013 (the “Amended LOC”) is secured by
certain assets owned by the Borrower, including but not limited to the
Borrower’s membership interests in BR Berry Hill Managing Member, LLC, a
majority owner of BR Stonehenge 23 Hundred, LLC, the owner of 23 Hundred, LLC,
the owner of a 266-unit multi-family development project known as
23Hundred@Berry Hill, Nashville, Tennessee (the “Berry Hill Collateral”); and

 

WHEREAS, the outstanding principal balance under Amended LOC as of the effective
date is $12,960,000.00; and

 

WHEREAS, the Borrower is seeking to sell a portion of the Berry Hill Collateral
and is requesting the SOIF Parties’ consent to a one-time release of their lien
on the cash proceeds that would result from such sale; and

 

WHEREAS, the SOIF Parties are willing to grant such request, subject to the
terms and conditions set forth herein, including but not limited to eliminating
the Borrower’s right to further borrow against the Amended LOC;

 

NOW, THEREFORE, in consideration of the foregoing premises, and other good and
valuable consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:

 

1. Defined Terms. All capitalized terms used herein and not otherwise expressly
defined herein shall have the respective meanings given to such terms in the
Amended LOC.

 

2. Amendment to Amended LOC. The Amended LOC is hereby modified and amended as
follows:

 

A.The second sentence of Section 1 of the Amended LOC - - which sentence
provides as follows: “The Line of Credit shall be a revolving line of credit,
against which disbursements may be made to Borrower, repaid by Borrower and
additional disbursements made to Borrower, subject to the limitations contained
in this Agreement; provided, that the SOIF Parties shall have no obligation to
make any disbursement (A) that would cause the outstanding principal balance of
the Line of Credit plus all outstanding principal and any accrued but unpaid
interest to exceed the Commitment Amount or (B) if there is an Event of Default
or a Default (as defined below).” - - is hereby deleted in its entirety.

 

 

 

 

Exhibit 10.1

 

B.Section 2 of the Amended LOC - - which Section provides as follows: “Advances.
Advances under the Line of Credit will be made by the SOIF Parties upon receipt
by the SOIF Parties of at least five (5) days' prior written notice setting
forth the amount of the advance.” - - is hereby deleted in its entirety and is
replaced as follows as of the effective date:

 

“2.No Re-Borrowing. Borrower shall have no right to make further draws against,
or re-borrow any funds under the Line of Credit.”

 

C.Section 3 of the Amended LOC - - which Section provides as follows: “The Note.
Borrower's obligation to pay the principal of and interest on the Line of Credit
shall be evidenced by a Promissory Note (the "Note"), substantially in the form
attached hereto as Exhibit A, which shall (i) be duly executed and delivered by
Borrower, (ii) be dated as of the date hereof, (iii) be in the stated principal
amount of the Line of Credit, (iv) mature on the Maturity Date, (v) bear
interest as provided in the Note, and (vi) be governed by this Agreement.” - -
is hereby deleted in its entirety and is replaced as follows as of the effective
date:

 

“3.The Replacement Promissory Note. Borrower's obligation to pay the principal
of and interest on the Line of Credit shall be evidenced by a Replacement
Promissory Note modified in accordance with this Second Amendment to Line of
Credit and Security Agreement including but not limited to providing that it
shall (i) be in the stated principal amount of $12,960,000 as of the effective
date, (ii) be dated, duly executed and delivered by Borrower as of the effective
date hereof, (iii) replace the Note previously delivered under the Amended LOC,
(iv) bear interest as provided in the Amended LOC, and (iv) mature on the
Maturity Date.”

 

D.Section 15 of the Amended LOC Agreement is deleted in its entirety, and is
hereby replaced as follows:

 

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

 

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

 

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

 

3. Partial Release of Berry Hill Collateral. The SOIF Parties hereby release the
lien of their security interest in nineteen and fifty three one-hundredths
percent (19.53%) of the Borrower’s ownership interests in the Berry Hill
Collateral, which is the equivalent of a twelve and forty five one-hundredths
percent (12.45%) interest in BR Berry Hill Managing Member, LLC, which is the
equivalent of a ten and twenty seven one-hundredths percent (10.27%) indirect
ownership interest in 23 Hundred, LLC. This will be a one-time release of the
SOIF Parties’ security interests, for which the Borrower shall pay the SOIF
Parties an aggregate $100,000 release fee, which shall be deemed automatically
added to the principal balance of the Replacement Promissory Note as of the date
of the Borrower’s sale of such interest in the Berry Hill Collateral and payable
from the proceeds of the next sale of assets by Borrower or on the Maturity
Date, whichever occurs earlier.

 

 

 

 

Exhibit 10.1

 

4. Effectiveness. The modifications provided in paragraph 2 hereof shall be
effective as of August 95, 2013.

 

5. Reaffirmation of LOC Agreement. All other provisions of the Amended LOC shall
continue to be in full force and effect.

 

[Remainder of page intentionally left blank. Signature page follows.]

 

 

 

 

Exhibit 10.1

 

IN WITNESS WHEREOF, Borrower and the SOIF Parties have caused their duly
authorized officers to set their hands and seals as of the day and year first
above written.

 

Borrower:

 

BLUEROCK MULTIFAMILY GROWTH REIT, INC.,

a Maryland corporation f/k/a Bluerock Enhanced Multifamily Trust, Inc.

 

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

 

SOIF Parties:

 

BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND II, LLC

a Delaware limited liability company

 

By: BR SOIF II Manager, LLC   a Delaware limited liability company Its: Manager

 

  By: Bluerock Real Estate, L.L.C,     a Delaware limited liability company  
Its: Sole Member

 

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

 

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: Bluerock Real Estate, L.L.C,     a Delaware limited liability company  
Its: Sole Member

 

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