Document:

Exhibit 10.9

 

THIRD AMENDMENT TO LINE OF CREDIT AND
SECURITY AGREEMENT

 

THIS THIRD AMENDMENT
TO LINE OF CREDIT AND SECURITY AGREEMENT (this “Third Amendment”) is made and effective as of August 29,
2013 (the “Effective Date”), 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 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;

 

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 (the “First Amendment to the LOC Agreement”), which amended and restated the Original 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 by six (6) months to October 2, 2013;

 

WHEREAS, the
LOC Agreement is secured by certain assets owned by the Borrower and its subsidiaries, including but not limited to the Borrower’s
subsidiary’s membership interests in BR Berry Hill Managing Member, LLC (the “Berry Hill Collateral”),
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 (“Berry Hill”);

 

WHEREAS, the
LOC Agreement was further amended to accommodate the Borrower’s request to sell a portion of the Berry Hill Collateral free
and clear of the SOIF Parties’ liens thereon, including, in consideration for such lien release, the elimination of the revolving
nature of the line of credit, the setting of a fixed Commitment Amount, and the imposition a $100,000 release fee to be added to
the principal balance of the Borrower’s obligation, (the “Second Amendment to the Original LOC Agreement”)
and, in connection therewith, the Borrower executed and delivered a Replacement Promissory Note dated August 9, 2013 (the “Replacement
Note”), and closed the sale of such interest in the Berry Hill Collateral on August 13, 2013;

 

WHEREAS, after
the sale on August 13, 2013, and adding the $100,000 release fee, the principal balance due from the Borrower under the LOC Agreement
increased to $13,060,000;

 

WHEREAS, the
LOC Agreement and the Replacement Note mature on October 2, 2013 and, accordingly, the Borrower has now requested an extension
of the said maturity date by six (6) months (with an additional six month extension option) and, in exchange for such extension
request, the SOIF Parties have requested an extension fee equal to 1% of the then-outstanding principal balance for each such extension,
as well as increasing the interest rate to a minimum 10% per annum effective as of October 3, 2013;

 

WHEREAS, in
connection with the extension request, the SOIF Parties have also requested a paydown of the principal balance due and owing by
the Borrower under the LOC Agreement and the Replacement Note, and the Borrower has offered to do so by selling an additional portion
of the Berry Hill Collateral, with such sale to be made to SOIF III (the “SOIF III Sale”), with the purchase
price consideration to be credited against the outstanding principal balance of the Borrower’s obligations under the LOC
Agreement and the Replacement Note;

 

WHEREAS, in
connection with the SOIF III Sale, the Borrower and SOIF III have entered into a Membership Interest Purchase Agreement dated August
29, 2013 (the “SOIF III MIPA”)

 

    	 

    	 

    

 

Exhibit 10.9

 

WHEREAS, after
the closing of the SOIF III Sale under the SOIF III MIPA, and crediting the purchase price against the amount due under the LOC
Agreement and the Replacement Note, the principal balance due from the Borrower under the LOC Agreement would total $7,535,588,
which when added to the required 1% extension fee of $75,356, would total $7,610,944 of principal due from the Borrower as of the
Effective Date; and

 

WHEREAS, the
SOIF Parties are willing to grant the Borrower’s requests as stated above, subject to the terms and conditions set forth
herein;

 

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 LOC
Agreement, as amended.

 

2. Third Amendment. The LOC
Agreement and, to the extent applicable, the First Amendment to the LOC Agreement and the Second Amendment to the LOC Agreement,
are further modified and amended as follows:

 

		A.	The Recitals in the LOC Agreement are hereby deleted in their entirety, and are replaced with the
following:

 

“RECITALS

 

WHEREAS, the SOIF Parties have
provided Borrower with acquisition and working capital financing in the maximum available amount of Thirteen Million Five Hundred
Thousand and 00/100 Dollars ($13,500,000.00) on certain terms and conditions as set forth in this Agreement dated October 2, 2012
(the “LOC Agreement”), as amended on March 4, 2013 and as further amended on August 13, 2013.

 

WHEREAS, the Borrower has requested
a further amendment to the LOC Agreement, as amended, as set forth herein.”

 

		B.	Section 1 of the LOC Agreement is hereby deleted in its entirety, and is replaced with the following:

 

		“1.	Indebtedness. As of August 29, 2013, after consummation of the sale by Borrower to SOIF III of
a 34.381% interest in BR Berry Hill Managing Member, LLC (which is the equivalent of a 28.36% indirect equity ownership interest
in 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), in exchange for a $5,524,412 credit against SOIF III’s lender interest under
the LOC Agreement and, after adding a one percent (1%) extension fee in the amount of $75,356, the Borrower ratifies and acknowledges
its indebtedness, jointly and severally, to the SOIF Parties in the aggregate principal amount of seven million six hundred ten
thousand nine hundred forty four dollars ($7,610,944), without defense, offset or counterclaim. Effective as of August 29, 2013,
the outstanding principal balance shall bear interest as follows: (a) through October 2, 2013, at a simple annual rate of the 30-Day
LIBOR Rate applicable on April 2, 2013 plus six percent (6.0%), wherein the minimum interest rate shall be at least eight and one-half
percent (8.5%), and (b) from and after October 3, 2013, at a simple annual rate of the 30-Day LIBOR Rate applicable on October
3, 2013 plus six percent (6.0%), wherein the minimum interest rate shall be at least ten percent (10.0%); which accrued interest
shall be payable monthly in arrears, on the fifth day of each month. If not sooner paid, all outstanding principal, accrued but
unpaid interest and other outstanding sums due under this Agreement shall be paid in full on April 2, 2014 (the "Maturity
Date"). The Maturity Date may be extended in the sole and absolute discretion of the Borrower, with at least five (5) days’
prior written notice to, and payment of an extension fee equal to one percent (1.0%) of the then outstanding principal balance
to, the SOIF Parties, for an additional six (6) month period (the “Maturity Extension Period”) at a simple annual rate
of the 30-Day LIBOR Rate applicable on April 2, 2014 plus six percent (6.0%), wherein the minimum interest rate shall be at least
ten percent (10.0%).”

 

    	 

    	 

    

 

Exhibit 10.9

 

		C.	Section 3 of the LOC 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 due
and owing to the SOIF Parties shall be evidenced by a Replacement Promissory Note dated August 29, 2013 providing, inter alia,
that it shall (i) be in the stated principal amount of $7,610,944 as of August 29, 2013, (ii) be dated, duly executed and delivered
by Borrower as of August 29, 2013, (iii) replace the Replacement Promissory Note dated August 9, 2013 previously delivered in connection
with the “Second Amendment to Line of Credit and Security Agreement”, (iv) bear interest at a simple annual rate of
the 30-Day LIBOR Rate applicable on April 2, 2013 plus six percent (6.0%), wherein the minimum interest rate shall be at least
8.5% through and including October 2, 2013, and from and after October 3, 2013 at a simple annual rate of the 30-Day LIBOR Rate
applicable on October 3, 2013 plus six percent (6.0%), wherein the minimum interest rate shall be at least ten percent (10.0%),
and (iv) mature on the Maturity Date, with a further six-month extension available for an additional 1% extension fee.”

 

3. Partial Release of Berry Hill
Collateral; Assigned to SOIF III; Future Asset Sales. The SOIF Parties hereby release the lien of their security interest
in a thirty four and three hundred eighty one one-thousandths percent (34.381%) interest in BR Berry Hill Managing Member, LLC
owned by BEMT Berry Hill, LLC, a wholly-owned subsidiary of the Borrower, which is the equivalent of a twenty eight and thirty
six one-hundredths percent (28.36%) 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 be entitled to a five million five hundred twenty four thousand
four hundred twelve dollar and no cents ($5,524,412) credit against the outstanding principal balance due under the LOC Agreement
and the August 9, 2013 Replacement Promissory Note, in exchange for assigning such interest in the Berry Hill Collateral to SOIF
III. In addition, although the LOC Agreement remains secured by a lien in favor of the SOIF Parties on substantially all of the
Borrower’s assets, and therefore requires the Borrower to further paydown the outstanding principal balance with the net
proceeds of such future asset sales, the SOIF Parties, subject to their sole but reasonable discretion, may allow the Borrower
to retain a portion of such future net sale proceeds for its use in connection with its pursuit of its future strategic alternatives.

 

4. Effectiveness. The modifications
provided in paragraph 2 hereof shall be effective as of August 29, 2013.

 

5. Reaffirmation of LOC Agreement.
All other provisions of the LOC Agreement, as amended, except superseded by or inconsistent with this Third Amendment, shall continue
to be in full force and effect.

 

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

 

    	 

    	 

    

 

 Exhibit 10.9

 

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/ Ramin Kamfar 	 	 
	Name: 	Ramin Kamfar	 	 
	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/ Jordan Ruddy 	 
	 	 	Name:	Jordan Ruddy	 
	 	 	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/ Jordan Ruddy	 
	 	 	Name:	Jordan Ruddy	 
	 	 	Title:	Authorized SignatoryExhibit 10.10

 

REPLACEMENT PROMISSORY NOTE

  

	$7,610,944	August 29, 2013

  

For value received,
BLUEROCK MULTIFAMILY GROWTH REIT, INC. (f/k/a BLUEROCK ENHANCED MULTIFAMILY TRUST, INC.), a Maryland corporation (the “Borrower”),
hereby promises to pay to the order of BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND II, LLC, a Delaware limited liability
company, and BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND III, LLC, a Delaware limited liability company (together
with their successors and assigns, the “Lender”) the principal sum of Seven Million Six Hundred Ten Thousand Nine
Hundred Forty Four Dollars ($7,610,944), plus interest, fees and costs, in accordance with the terms and conditions of this
promissory note (the “Note”).

 

This Note is issued,
executed and delivered by Borrower to Lender in replacement and full satisfaction of that certain Promissory Note dated August
9, 2013 in the amount of $12,960,000 (together, the “Prior Note”).

 

The outstanding principal
balance due under this Note shall bear interest as follows: (a) through October 2, 2013, at a simple annual rate of the 30-Day
LIBOR Rate applicable on April 2, 2013 plus six percent (6.0%), wherein the minimum interest rate shall be at least eight and one-half
percent (8.5%), and (b) from and after October 3, 2013, at a simple annual rate of the 30-Day LIBOR Rate applicable on April 2,
2013 plus six percent (6.0%), wherein the minimum interest rate shall be at least ten percent (10.0%); which accrued interest shall
be payable monthly in arrears, on the fifth day of each month. If not sooner paid, all outstanding principal, accrued but unpaid
interest and other outstanding sums due under this Agreement shall be paid in full on April 2, 2014 (the "Maturity Date").
The Maturity Date may be extended in the sole and absolute discretion of the Borrower, with at least five (5) days’ prior
written notice to, and payment of an extension fee equal to one percent (1.0%) of the then outstanding principal balance to, the
Lender, for an additional six (6) month period (the “Maturity Extension Period”) at a simple annual rate of the 30-Day
LIBOR Rate applicable on April 2, 2014 plus six percent (6.0%), wherein the minimum interest rate shall be at least ten percent
(10.0%).

 

This Note may be prepaid
in whole or in part at any time or from time to time without penalty. Payments shall be applied first against interest or other
charges and/or fees (other than principal), and next to the payment of principal. Borrower expressly acknowledges that (x) as of
August 13, 2013, a $100,000 lien release fee has been added to and is included in the above-stated principal balance of this Note
in connection with the consummation of the sale by Borrower’s subsidiary of a 12.447% interest held by its subsidiary in
BR Berry Hill Managing Member, LLC, and (y) as of the date hereof, a $75,359 extension fee has been added to and is included in
the above-stated principal balance of this Note in connection with the extension of the maturity date under the Prior Note, to
the Maturity Date under this Note.

 

If
this Note is not paid in full on the Maturity Date (or extended as provided above), then, at the Lender’s election, all
amounts not paid when due at the Maturity Date shall become part of principal and shall thereafter accrue interest at the rate
of twelve percent (12%) per annum. In the event of an acceleration of the maturity of this Note (as
described below), this Note shall become immediately due and payable without presentation, demand, protest or notice of dishonor,
all of which are hereby waived by the Borrower. The Borrower also shall pay and this Note shall evidence Borrower’s
obligation to pay Lender any and all actual costs incurred by Lender for the interpretation, performance, exercise, enforcement
or protection of its rights hereunder and for the collection of Borrower’s obligations under this Note and for the protection
of the security for this Note, including reasonable attorneys’ fees and expenses, and all costs to collect, possess, preserve,
repair and liquidate the collateral given by Borrower to secure the obligations owed to Lender.

 

If the rate of interest
required to be paid hereunder exceeds the maximum rate permitted by law, such rate of interest shall be automatically reduced to
the maximum rate permitted by law and any amounts collected in excess of the permissible amount shall be returned to Borrower or
applied to principal all pursuant to the terms of and as further set forth herein. To the fullest extent permitted by law, interest
shall continue to accrue after the filing by or against Borrower of any petition seeking any relief in bankruptcy or under any
act or law pertaining to insolvency or debtor relief, whether state, federal or foreign.

 

    	 

    	 

    

 

If Borrower makes any
payment to Lender that is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid
to a trustee, receiver or any other party, then, to the extent of such payment, the obligation intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been received by Lender.

The Borrower covenants,
warrants, and represents to the Lender that:

 

		(i)	the execution, delivery and performance of this Note have been duly authorized;

 

		(ii)	this Note is enforceable against the Borrower in accordance with its terms;

 

		(iii)	the execution and delivery of this Note does not violate or constitute a breach of any agreement
to which the Borrower is a party; and

 

		(iv)	the loan evidenced by this Note is for commercial purposes and will not be used in any consumer
transaction.

 

Payment of this Note
is secured by the pledge of the Collateral as that term is defined in that certain Line of Credit and Security Agreement dated
October 2, 2012, as amended March 4, 2013 by that certain Line of Credit and Security Agreement Modification Agreement, as further
amended by that certain Second Amendment to Line of Credit and Security Agreement effective as of August 9, 2013, and as further
amended by that certain Third Amendment to Line of Credit and Security Agreement dated August 29, 2013,among the Borrower and the
Lender (the “Pledge Agreement”); provided however, the SOIF Parties in their sole but reasonable discretion may allow
the Borrower to retain a portion of the net sale proceeds from future sales of the Collateral for its use in connection with its
pursuit of its future strategic alternatives.

 

The occurrence of any
one or more of the following shall constitute an Event of Default under this Note:

 

		(a)	the Borrower fails to pay Lender any interest, principal or other money due and payable by Borrower
to Lender under this Note on or before the Maturity Date thereof;

 

		(b)	the failure of Borrower to comply with any material covenant set forth herein and the expiration
of any applicable notice and cure provisions contained herein;

 

		(c)	the occurrence of an Event of Default under the Pledge Agreement and the expiration of any applicable
notice and cure provisions contained therein;

 

		(d)	the Borrower terminates its existence, voluntarily or involuntarily, allows the appointment of
a receiver for any part of its property or makes an assignment for the benefit of creditors; or

 

		(e)	the Borrower does any of the following:

 

		(i)	admits in writing its inability to pay its debts generally as they become due;

 

(ii)   consents
to, or acquiesce in, the appointment of a receiver, liquidator or trustee of itself or of the whole or any substantial part of
its properties or assets;

 

(iii)  
files a petition or answer seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar
relief under the Federal Bankruptcy laws or any other applicable law;

 

    	 

    	 

    

 

(iv) has
a court of competent jurisdiction enter an order, judgment or decree appointing a receiver, liquidator or trustee of Borrower,
or of the whole or any substantial part of the property or assets of Borrower, and such order, judgment or decree shall remain
unvacated or not set aside or unstayed for sixty (60) days;

 

(v) has
a petition filed against it seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar
relief under the Federal Bankruptcy laws or any other applicable law and such petition shall remain undismissed for sixty (60)
days;

 

(vi) has,
under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction assume custody or control
of Borrower or of the whole or any substantial part of its property or assets and such custody or control shall remain unterminated
or unstayed for sixty (60) days;

 

(vii)
has an attachment or execution levied against any substantial portion of the property of Borrower which is not discharged or dissolved
by a bond within thirty (30) days; or

 

(viii)
has any materially adverse change in its financial condition since the date of this Note.

 

Upon the occurrence
of an Event of Default, the Lender may at any time thereafter exercise any one or more of the following remedies:

 

		(a)	the Lender may accelerate the Maturity Date and declare the unpaid principal balance, accrued but
unpaid interest and all other amounts payable hereunder at once due and payable,

 

		(b)	the Lender may set off the amount due against any and all accounts, credits, money, securities
or other property held by or in the possession of the Lender;

 

		(c)	the Lender may exercise any of its other rights, powers and remedies available at law or in equity.
All of the rights and remedies of the Lender under this Note, at law or in equity are cumulative, and the exercise by the Lender
of any one or more of such rights and remedies shall not preclude the simultaneous or later exercise by the Lender of any or all
such other rights and remedies.

 

The enumeration of Lender’s rights
and remedies herein is not intended to be exhaustive and the exercise by Lender of any right or remedy shall not preclude the exercise
of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Pledge Agreements or that may now or hereafter exist in law or in equity or by suit or otherwise.

 

This Note shall
be governed by and construed in accordance with the internal laws of the State of New York, notwithstanding any conflicts-of-law
provision to the contrary. The Borrower and Lender waive their respective rights to a jury trial to the maximum extent permitted
by law for any claim or cause of action arising out of this Note. Each party has reviewed this waiver with its counsel.

 

Except as specifically
provided herein and except as prohibited by law, Borrower hereby waives presentment, demand, protest
and notice of dishonor, as well as the benefit of any exemption under the Homestead and all other exemption or insolvency laws
as to this debt.

 

Lender’s failure
at any time to require strict performance by Borrower hereunder shall not waive or affect any right of Lender at any time thereafter
to demand strict performance, and any waiver of any Event of Default by Lender shall not waive or affect any other Event of Default,
whether prior or subsequent thereto, and whether of the same or a different type. None of the provisions of this Note shall be
deemed waived by any act, knowledge or course of dealing of Lender, or its agents, except by an instrument in writing signed by
Lender and directed to Borrower specifying such waiver.

 

    	 

    	 

    

 

All notices, requests,
demands and other communications with respect hereto shall be in writing and shall be delivered by hand against a receipt, sent
prepaid by FedEx (or a comparable overnight delivery service) or sent by the United States mail, certified, postage prepaid, return
receipt requested, at the addresses designated below. Any notice, request, demand or other communication delivered or sent in the
manner aforesaid shall be deemed given or made (as the case may be) only when actually received by the intended recipient. Rejection
or other refusal to accept or the inability to deliver because of a changed address of which no written notice was given shall
be deemed to be receipt of the notice, request, demand or other communication sent as of the date three (3) business days following
the date such rejected, refused or undeliverable notice was sent. The Borrower or the Lender may change their addresses by notifying
the other party of the new address in any manner permitted by this paragraph.

 

	If to the Borrower:	c/o Bluerock Real Estate
	 	712 Fifth Ave., 9th Floor
	 	New York, New York 10022
	 	Attn:  R. Ramin Kamfar
	 	Fax:  (212) 843-3411

 

	If to the Lender:	c/o Bluerock Real Estate, LLC
	 	712 Fifth Ave., 9th Floor
	 	New York, New York 10022
	 	Attn:  R. Ramin Kamfar
	 	Fax:  (212) 843-3411

 

To the extent any provision
herein is prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note.

 

This Note shall be
binding upon and inure to the benefit of the heirs, successors and assigns of the parties.

 

IN WITNESS WHEREOF,
the Borrower has caused this Note to be executed by its duly authorized company officer, as of the day and year first above written.

 

Borrower:

 

BLUEROCK MULTIFAMILY
GROWTH REIT, INC.

a Maryland corporation

 

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

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00223-of-00352.parquet"}]]