Exhibit 4.1





 





This Letter Agreement (the “Agreement”) dated February
6, 2017 is entered by and between Bluerock Residential Growth REIT, Inc., a Maryland corporation (the “REIT”), and
Cetera Financial Group, Inc. (“Cetera”) for itself and on behalf of its broker dealer affiliates listed in Appendix
A (“Cetera BDs”).


 


WHEREAS, the Cetera BDs have entered into a Selling Group Agreement
(“SGA”) with Bluerock Capital Markets, LLC, a Massachusetts limited liability company, the Managing Broker-Dealer for
the REIT’s publicly registered offering of Series B Redeemable Preferred Stock, $0.01 par value per share (the “Series
B Preferred Stock”);


 


WHEREAS, in connection with the Cetera BDs entering into the
SGA, the REIT has agreed to provide certain additional protections to the holders of Series B Preferred Stock (“Holders”)
in addition to those provided under the REIT’s charter (“Charter”).


 


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


 


		1.	As used in this Agreement, (1) “Senior Stock” means any class or series of capital stock of the REIT, the terms
of which expressly provide that it ranks senior to the Series B Preferred Stock with respect to priority of payment of dividends,
or with respect to any other distributions or liquidation rights upon voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the REIT, (2) “Junior Stock” means all classes or series of the REIT’s common stock and
any other class or series of capital stock of the REIT issued in the future, unless the terms of such stock expressly provide that
it ranks senior to, or on parity with, the Series B Preferred Stock with respect to priority of payment of dividends, or with respect
to any other distributions or liquidation rights upon voluntary or involuntary liquidation, dissolution or winding up of the affairs
of the REIT, (3) “Parity Preferred Stock” means any class or series of capital stock of the REIT, the terms of which
expressly provide that it ranks on parity with the Series B Preferred Stock, including the REIT’s 8.250% Series A Cumulative
Redeemable Preferred Stock, $0.01 par value per share, 7.625% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per
share, and 7.125% Series D Cumulative Preferred Stock, $0.01 par value per share, with respect to priority of payment of dividends,
or with respect to any other distributions or liquidation rights upon voluntary or involuntary liquidation, dissolution or winding
up of the affairs of the REIT, and (4) “Parity Voting Preferred Stock” means shares of Parity Preferred Stock upon
which voting rights have been conferred and are exercisable as provided in Section 4 below.



		2.	So long as any shares of Series B Preferred Stock remain outstanding, the REIT agrees that it will maintain a Dividend Coverage
Ratio (as defined below) of not less than 1.1:1 (the “Coverage Requirement”) as of the end of each calendar quarter.
Within five (5) business days following the date of filing by the REIT of a Form 10-Q or 10-K, as applicable, for such calendar
quarter (each, a “Testing Date”), the REIT shall deliver a written certificate to Cetera (a) certifying and demonstrating
by calculation that the REIT met the Coverage Requirement as of the end of the applicable calendar quarter and (b) certifying that
the REIT is reasonably expected to maintain the Dividend Coverage Ratio for the subsequent calendar quarter based solely on information
known to the Chief Executive Officer, Chief Accounting Officer and Chief Financial Officer (as applicable) of the REIT as of the
Testing Date (each, a “Coverage Certificate”). If the REIT is not able to make both of the certifications set forth
in clauses (a) and (b) of the preceding sentence in a Coverage Certificate, following the Testing Date the REIT will not issue
any additional preferred stock other than Junior Stock, and will not make any voluntary distributions on shares of common stock
or any other class of Junior Stock (other than distributions required to maintain status as a REIT for tax purposes) until and
unless the Coverage Requirement is certified in a subsequent Coverage Certificate.



 






     


     


    

 


For purposes of this Agreement, the “Dividend
Coverage Ratio” shall equal:


 


		(A)	the REIT’s Adjusted Funds from Operations (“AFFO”), calculated in accordance with commonly accepted industry
standards and further adjusted to add back the expense of all preferred dividends, for the two most recent quarters, plus the sum
of:



 


(1) the product of (a)(i) unrestricted cash on the
REIT’s balance sheet as reflected in the Quarterly Filing filed at the Testing Date (the “Current Filing”), minus
(ii) an amount equal to the greater of $5,000,000 or 5.0% of the amount in subclause (i)(provided, if such calculation would cause
the amount to be negative, it shall instead be equal to zero), multiplied by (b) a 5.0% annualized rate of return over such quarterly
period, and


 


(2) the product of (a)(i) unrestricted cash on the
REIT’s balance sheet as reflected in the Quarterly Filing immediately preceding the Current Filing, minus (ii) an amount
equal to the greater of $5,000,000 or 5.0% of the amount in subclause (i)(provided, if such calculation would cause the amount
to be negative, it shall instead be equal to zero), multiplied by (b) a 5.0% annualized rate of return over such quarterly period.


 


over


 


 


		(B)	the amount of preferred dividends required to be distributed to holders of the Series B Preferred Stock, the Parity Preferred
Stock and any Senior Stock for the such quarters without any breach, default or deferral with respect to any such distributions.






 


		3.	So long as any shares of Series B Preferred Stock remain outstanding, the REIT agrees, on behalf of itself and as general partner
of Bluerock Residential Holdings, L.P., a Delaware limited partnership and the REIT’s operating partnership (“OP”),
that none of the REIT, the OP or any controlled subsidiary of the REIT or the OP will not undertake any corporate action that restricts
the REIT’s ability to redeem Series B Preferred Stock with shares of the REIT’s Class A common stock, $0.01 par value
per share.



		4.	So long as any shares of Series B Preferred Stock remain outstanding, in addition to any other vote or consent of stockholders
required by the Charter, the affirmative vote or consent of a majority of the votes cast by holders of outstanding shares of Series
B Preferred Stock and of Parity Voting Preferred Stock (such holders together, the Parity Holders, voting together as a single
class), at a meeting at which a quorum of such Parity Holders is present (a majority of the outstanding shares of Parity Preferred
Stock, present in person or by proxy, shall constitute a quorum), shall be required to authorize, create or issue, or increase
the number of authorized or issued shares of, any class or series of Senior Stock, or to reclassify any authorized shares of capital
stock of the REIT into Senior Stock, or to create, authorize or issue any obligation or security convertible into or evidencing
the right to purchase Senior Stock (the “Parity Preferred Voting Right”).



 






     


     


    

 


	 	 	 



		a.	At any time when the Parity Preferred Voting Right applies, a proper officer of the REIT shall call or cause to be called a
special meeting of the Parity Holders by mailing or causing to be mailed to such Parity Holders a notice of such special meeting
to be held not fewer than ten nor more than 45 days after the date such notice is given. The record date for determining Parity
Holders of the Parity Preferred Stock entitled to notice of and to vote at such special meeting will be the close of business on
the third Business Day preceding the day on which such notice is mailed. Notice of all meetings at which Holders of the Series
B Preferred Stock shall be entitled to vote will be given to such Holders at their addresses as they appear in the REIT’s
transfer records and to Cetera at the address specified herein.



		b.	For the avoidance of doubt, Holders of shares of Series B Preferred Stock shall not be entitled to vote with respect to (i)
any issuance or increase in the total number of authorized shares of REIT common stock or preferred stock, (ii) any issuance or
increase in the number of authorized shares of Series B Preferred Stock or the creation or issuance of any other class or series
of capital stock, or (iii) any increase in the number of authorized shares of any other class or series of capital stock, in each
case referred to in clause (i), (ii) or (iii) above constituting Parity Preferred Stock or Junior Stock, and in the case of the
creation of Parity Preferred Stock that requires such Parity Preferred Stock to vote together with the Series B Preferred Stock
as a single class.



		c.	Except as set forth in this Paragraph 4, Holders of Series B Preferred Stock shall not have any voting rights with respect
to, and the consent of the Holders of Series B Preferred Stock shall not be required for, the taking of any corporate action, regardless
of the effect that such corporate action may have upon the powers, preferences, voting power or other rights or privileges of the
Series B Preferred Stock.



		d.	The foregoing voting provisions of this Paragraph 4, including the Parity Preferred Voting Right, shall not apply if, at or
prior to the time when the act with respect to which such vote would otherwise be required shall be effected, all outstanding shares
of Series B Preferred Stock shall have been redeemed or called for redemption upon proper notice pursuant hereto and, if being
redeemed in cash, sufficient funds in cash shall have been deposited in trust to effect such redemption.



		e.	Each share of Series B Preferred Stock shall be entitled to one vote per $1,000.00 of liquidation preference, and each other
share of Parity Preferred Stock shall be entitled to one vote per $1,000.00 of liquidation preference.



		f.	Except as set forth in this Paragraph 4 with respect to the Parity Preferred Voting Right, Holders of Series B Preferred Stock
shall have no voting rights.



		5.	So long as any shares of Series B Preferred Stock remain outstanding, the REIT agrees that it will not sell an asset if such
sale would cause the REIT to fail to meet the Coverage Requirement, with AFFO for these purposes determined on a reasonable pro
forma basis to adjust for the effect of disposing of the subject property, unless such sale is reasonably necessary for the REIT
to continue to qualify as a real estate investment trust for federal income tax purposes, as determined by a majority of the independent
directors of the REIT’s Board of Directors.



		6.	So long as any shares of Series B Preferred Stock remain outstanding, the REIT agrees to (i) conduct a valuation of its assets
within twelve months of any previous valuation using the services of a third-party valuation firm reasonably acceptable to Cetera,
and will, based on such valuation, publish a per share estimated value for each share of the Series B Preferred Stock in a manner
reasonably designed to comply with applicable requirements under FINRA Rule 2310 and NASD Rule 2340 or any similar rule applicable
to Cetera, and (ii) provide Cetera within 10 business days of each Quarterly Filing with an internal analysis indicating whether
the per share estimated value of Series B Preferred Stock has decreased since the previous valuation based on the use of a third-party
valuation firm.



 






     


     


    

 


	 	 	 



		7.	So long as any shares of Series B Preferred Stock remain outstanding, the REIT agrees not to undertake any corporate action
intended to or that could be reasonably expected to cause the rights of Holders of Series B Preferred Stock under this Agreement
to be terminated or materially adversely affected.



		8.	This Agreement will remain in full force and effect regardless of whether Cetera remains a member of the selling group for
the Series B Preferred Stock, including by termination of the offering of such shares or otherwise.



		9.	In the event Cetera seeks to enforce any provision of this agreement, the REIT shall not assert (1) lack of standing, (2) interference
with business relationships, or (3) any claim dependent at least in part on the fact that Cetera is not a holder of the Series
B Preferred Stock.



		10.	This Agreement shall be governed by the law of the State of Maryland.



 


 


IN WITNESS WHEREOF, the parties have executed
this Agreement on the date first above written.


 


 





	 	COMPANY:
	 	
	 	Bluerock Residential Growth REIT, Inc., 
	 	 
	 	a Maryland corporation
	 	 	 
	 	By:	/s/ Michael L. Konig
	 	 	Michael L. Konig, COO
	 	 	 
	 	 	 
	 	CETERA:
	 	 
	 	CETERA FINANCIAL GROUP, INC.
	 	 
	 	a  Delaware corporation
	 	 	 
	 	By:	/s/ Stanley R. Smiley
	 	 	Stanley R. Smiley, Vice President
	 	 	 
	 	 	 
	 	200 North Sepulveda Boulevard
	 	 
	 	Suite 1200
	 	 
	 	El Segundo, California 90245










 






     


     


    

 


APPENDIX A


 


Cetera Advisors LLC, a Delaware limited liability company


 


Cetera Advisor Networks LLC, a Delaware limited liability company


 


Cetera Financial Specialists LLC, a Delaware limited liability
company


 


Cetera Investment Services LLC, a Delaware limited liability
company


 


First Allied Securities, Inc., a New York C corporation


 


Girard Securities, Inc., a California corporation


 


Summit Brokerage Services, Inc., a Florida corporation