Document:

Exhibit 10.38

 

	 

 

LIMITED LIABILITY COMPANY/JOINT VENTURE
AGREEMENT

 

OF

 

BELL BR WATERFORD CROSSING JV, LLC

 

A DELAWARE LIMITED LIABILITY COMPANY

 

DATED AS OF MARCH 29, 2012

 

	 

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	 	Page
	Section 1.     Definitions	
	Section 2.     Organization of the Company	10
	 	 	 
	2.1	Name	10
	 	 	 
	2.2	Place of Registered Office; Registered Agent	10
	 	 	 
	2.3	Principal Office	10
	 	 	 
	2.4	Filings	10
	 	 	 
	2.5	Term	10
	 	 	 
	2.6	Expenses of the Company	11
	 	 
	Section 3.     Purpose	11
	Section 4     Conditions	11
	 	 	 
	4.1	Bluerock Conditions	11
	 	 	 
	4.2	Bell Conditions	12
	 	 	 
	Section 5.     Capital Contributions, Loans, Percentage Interests and Capital Accounts	12
	 	 	 
	5.1	Initial Capital Contributions; Mandatory Capital Contributions	12
	 	 	 
	5.2	Additional Capital Contributions	13
	 	 	 
	5.3	Percentage Ownership Interest	15
	 	 	 
	5.4	Return of Capital Contribution	15
	 	 	 
	5.5	No Interest on Capital	15
	 	 	 
	5.6	Capital Accounts	16
	 	 	 
	5.7	New Members	16
	 	 	 
	Section 6.     Distributions	16
	 	 	 
	6.1	Cash from Operations	17
	 	 	 
	6.1	Cash from Sale or Refinancing	17
	 	 	 
	6.3	Indemnity Obligations	17

 

    	 

    	 

    

  

	6.4	Distributions in Kind	17
	 	 	 
	Section 7.     Allocations	17
	 	 	 
	7.1	Allocation of Net Income and Net Losses Other than in Liquidation	17
	 	 	 
	7.2	Allocation of Net Income and Net Losses in Liquidation	18
	 	 	 
	7.3	U.S. Tax Allocations	18
	 	 	 
	Section 8.     Books, Records, Tax Matters and Bank Accounts	18
	 	 	 
	8.1	Books and Records	18
	 	 	 
	8.2	Reports and Financial Statements	19
	 	 	 
	8.3	Tax Matters Member	20
	 	 	 
	8.4	Bank Accounts	20
	 	 	 
	8.5	Tax Returns	20
	 	 	 
	8.6	Expenses	20
	 	 	 
	Section 9.     Management and Operations	21
	 	 	 
	9.1	Management	21
	 	 	 
	9.2	Annual Business Plan	22
	 	 	 
	9.3	Implementation of Plan by Property Manager	22
	 	 	 
	9.4	Affiliate Transactions	22
	 	 	 
	9.5	Other Activities	23
	 	 	 
	9.6	Management Agreement	23
	 	 	 
	9.7	Operation in Accordance with REOC/REIT Requirements	24
	 	 	 
	9.8	FCPA	26
	 	 	 
	Section 10.    Confidentiality	27
	Section 11.    Representations and Warranties	28
	 	 	 
	11.1	In General	28
	 	 	 
	11.2	Representations and Warranties	28
	 	 	 
	Section 12.    Sale, Assignment, Transfer or other Disposition	31

 

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	12.1	Prohibited Transfers	31
	 	 	 
	12.2	Affiliate Transfers	31
	 	 	 
	12.3	Admission of Transferee; Partial Transfers	32
	 	 	 
	12.4	Withdrawals	33
	 	 	 
	Section 13.    Dissolution	33
	 	 	 
	13.1	Limitations	33
	 	 	 
	13.2	Exclusive Events Requiring Dissolution	33
	 	 	 
	13.3	Liquidation	34
	 	 	 
	13.4	Continuation of the Company	35
	 	 	 
	Section 14.    Indemnification	35
	 	 	 
	14.1	Exculpation of Members, Managers and Their Representatives	35
	 	 	 
	14.2	Indemnification by Company	35
	 	 	 
	14.3	Indemnification by Members for Misconduct	36
	 	 	 
	14.4	General Indemnification by the Members	36
	 	 	 
	14.5	Pledge of Bell Interest	36
	 	 	 
	14.6	Pledge of Bluerock Interest	37
	 	 	 
	Section 15.    Sale Rights	38
	 	 	 
	15.1	Push / Pull Rights	38
	 	 	 
	15.2	Forced Sale Rights	40
	 	 	 
	Section 16.    Mediation of Disputes	42
	 	 	 
	16.1	Events Giving Rise to Mediation	42
	 	 	 
	16.2	Selection of Mediator	43
	 	 	 
	16.3	Mediation	43
	 	 	 
	Section 17.    Miscellaneous	43
	 	 	 
	17.1	Notices	43

 

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	17.2	Governing Law	44
	 	 	 
	17.3	Successors	44
	 	 	 
	17.4	Pronouns	45
	 	 	 
	17.5	Table of Contents and Captions Not Part of Agreement	45
	 	 	 
	17.6	Severability	45
	 	 	 
	17.7	Counterparts	45
	 	 	 
	17.8	Entire Agreement and Amendment	45
	 	 	 
	17.9	Further Assurances	45
	 	 	 
	17.10	No Third Party Rights	45
	 	 	 
	17.11	Incorporation by Reference	46
	 	 	 
	17.12	Limitation on Liability	46
	 	 	 
	17.13	Remedies Cumulative	46
	 	 	 
	17.14	No Waiver	46
	 	 	 
	17.15	Limitation On Use of Names	46
	 	 	 
	17.16	Publicly Traded Partnership Provision	46
	 	 	 
	17.17	Uniform Commercial Code	47
	 	 	 
	17.18	Public Announcements	47
	 	 	 
	17.19	No Construction Against Drafter	47

 

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LIMITED LIABILITY COMPANY/JOINT VENTURE
AGREEMENT

OF

BELL BR WATERFORD CROSSING JV, LLC

 

THIS LIMITED LIABILITY COMPANY/JOINT VENTURE
AGREEMENT of BELL BR WATERFORD CROSSING JV, LLC (“JV” or “Company”) is made and entered
into and is effective as of March 29, 2012, by and between BR Waterford JV Member, LLC, a Delaware limited liability company
(“Bluerock”) and Bell HNW Nashville Portfolio, LLC, a North Carolina limited liability company (“Bell”)
(this “Agreement”). Capitalized terms used herein shall have the meanings ascribed to such terms in this Agreement.

 

WITNESSETH:

 

WHEREAS, the Company
was formed on February 23, 2012, pursuant to the Act;

 

WHEREAS, the Members
desire to participate in the Company for the purposes described herein;

 

WHEREAS, Bell Partners
Inc. (“Property Manager”), an Affiliate of Bell, has agreed to provide management services to the Company on the terms
set forth in the Management Agreement; and

 

WHEREAS, it is agreed
that Property Manager shall provide such management services to the Company as an independent contractor.

 

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

 

Section 1.            Definitions.
As used in this Agreement:

 

“Acquiring Indemnitees”
shall have the meaning provided in Section 15.1(e).

 

“Acquisition”
shall mean the closing of the purchase of the Property by the Company.

 

“Acquisition
Commission” shall mean a real estate commission in an amount equal to one percent (1.0%) of the total cost (including
currently budgeted renovations set forth on the initial Budget for the Property) of the Property.

 

“Act”
shall mean the Delaware Limited Liability Company Act (currently Chapter 18 of Title 6 of the Delaware Code), as amended from time
to time.

 

“Advisor”
shall mean any accountant, attorney or other advisor retained by a Member.

 

    	 

    	 

    

  

“Affiliate”
shall mean as to any Person any other Person that directly or indirectly controls or is controlled by, or is under common control
with such first Person. For the purposes of this Agreement, a Person shall be deemed to control another Person if such person possesses,
directly or indirectly, the power to direct or cause the direction of the management, policies and/or decision making of such other
Person, whether through the ownership of voting securities, by contract or otherwise. In addition, “Affiliates” shall
include as to any Person any other Person related to such person within the meaning of Code Sections 267(b) or 707(b)(1)..

 

“Agreed Upon
Value” shall mean the fair market value (net of any debt) agreed upon pursuant to a written agreement between the Members
of property contributed by a Member to the capital of the Company, which shall for all purposes hereunder be deemed to be the amount
of the Capital Contribution applicable to such property contributed.

 

“Agreement”
shall mean this Limited Liability Company/Joint Venture Agreement, as amended from time to time.

 

“Annual Business
Plan” shall mean the business plan for a Fiscal Year of the Company prepared by the Property Manager and approved by
the Managers as further described in Section 9.2.

 

“Backstop Agreement”
shall have the meaning set forth in Section 4.1(e).

 

“Bankruptcy
Code” shall mean Title 11 of the United States Code, as amended or any other applicable bankruptcy or insolvency statute
or similar law.

 

“Bankruptcy/Dissolution
Event” shall mean, with respect to the affected party, (i) the entry of an Order for Relief under the Bankruptcy Code,
(ii) the admission by such party of its inability to pay its debts as they mature, (iii) the making by it of an assignment for
the benefit of creditors generally, (iv) the filing by it of a petition in bankruptcy or a petition for relief under the Bankruptcy
Code or any other applicable federal or state bankruptcy or insolvency statute or any similar law, (v) the expiration of sixty
(60) days after the filing of an involuntary petition under the Bankruptcy Code without such petition being vacated, set aside
or stayed during such period, (vi) an application by such party for the appointment of a receiver for the assets of such party,
(vii) an involuntary petition seeking liquidation, reorganization, arrangement or readjustment of its debts under any other federal
or state insolvency law, provided that the same shall not have been vacated, set aside or stayed within sixty (60) days after filing,
(viii) the imposition of a judicial or statutory lien on all or a substantial part of its assets unless such lien is discharged
or vacated or the enforcement thereof stayed within sixty (60) days after its effective date, (ix) an inability to meet its financial
obligations as they accrue, or (x) a dissolution or liquidation.

 

“Bell”
shall have the meaning provided in the first paragraph of this Agreement.

 

“Bell Indemnity
Collateral” shall have the meaning provided in Section 14.5(a).

 

“Bell Inducement Obligation”
shall have the meaning provided in Section 14.5(a).

 

“Bell Pledge
Agreement” shall have the meaning provided in Section 14.5(a).

 

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“Bell Pre-Closing
Default” is (i) a failure by Bell to fund its share of the Mandatory Capital Contribution as and when the same is due;
(ii) the failure by Bell to deliver any documentation required by Lender to approve or close the Loan (such failure to include
the failure of any Bell-affiliated guarantor to do likewise); or (iii) an action (or failure to act) by Bell or its Affiliates
(other than the Company), whether intentional or negligent, that is proven to trigger a default under the Purchase Contract, and
which is not cured by such party in any applicable cure period under the Purchase Contract.

 

“Bell Transferee”
shall have the meaning set forth in Section 12.2(b)(i).

 

“Beneficial
Owner” shall have the meaning provided in Section 5.7.

 

“Bluerock”
shall have the meaning provided in the first paragraph of this Agreement.

 

“Bluerock Indemnity
Collateral” shall have the meaning provided in Section 14.6(a).

 

“Bluerock Inducement Obligation”
shall have the meaning provided in Section 14.6(a).

 

“Bluerock Pledge
Agreement” shall have the meaning provided in Section 14.6(a).

 

“Bluerock Pre-Closing
Default” is (i) a failure by Bluerock to fund its share of the Mandatory Capital Contribution as and when the same is
due; (ii) the failure by Bluerock to deliver any documentation required by Lender to approve or close the Loan (such failure to
include the failure of any Bluerock affiliated guarantor to do likewise); or (iii) an action (or failure to act) by Bluerock or
its Affiliates (other than the Company), whether intentional or negligent that is proven to trigger a default under the Purchase
Contract and which is not cured by such party in any applicable cure period under the Purchase Contract.

 

“Bluerock Transferee”
shall have the meaning set forth in Section 12.2(b)(ii).

 

“BR REIT”
shall have the meaning provided in Section 12.2(b)(ii).

 

“BR SOIF”
shall mean Bluerock Special Opportunity + Income Fund, LLC, a Delaware limited liability company.

 

“BR SOIF II”
shall mean Bluerock Special Opportunity + Income Fund II, LLC, a Delaware limited liability company.

 

“Capital Account”
shall have the meaning provided in Section 5.6.

 

“Capital Contribution”
shall mean, with respect to any Member, the aggregate amount of (i) cash, and (ii) the Agreed Upon Value of other property contributed
by such Member to the capital of the Company net of any liability secured by such property that the Company assumes or takes subject
to.

 

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“Cash from Operations”
shall mean the net cash realized by the Company from all sources, including, but not limited to, the operations of the Property
(but excluding Cash from Sale or Refinancing) after payment of all cash expenditures of the Property, the Company and any of its
Subsidiaries, including, but not limited to, all operating expenses including all fees payable to the Managers or Property Manager,
all payments of principal and interest on indebtedness, expenses for repairs and maintenance, capital improvements and replacements,
and such reserves and retentions as the Managers reasonably determine to be necessary and desirable in connection with Company
operations.

 

“Cash from Sale
or Refinancing” shall mean the net cash realized by the Company from the sale, financing, refinancing, redemption, repayment
or other disposition of the Property or of any interest of the Company in or related to the Property, after payment of all cash
expenditures of the Property, the Company and any of its Subsidiaries related to such sale, financing, refinancing redemption,
repayment or other disposition of the Property, including, but not limited to, all sale or refinancing expenses including all fees
payable to the Managers, all payments of principal and interest on indebtedness, expenses for repairs and maintenance, capital
improvements and replacements, and such reserves and retentions as the Managers reasonably determine to be necessary and desirable
in connection therewith.

 

“Certificate
of Formation” shall mean the Certificate of Formation of the Company, as amended from time to time.

 

“Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time, including the corresponding provisions of any successor
law.

 

“Collateral
Agreement” shall mean any agreement, instrument, document or covenant concurrently or hereafter made or entered into
under, pursuant to, or in connection with this Agreement and any certifications made in connection therewith or amendment or amendments
made at any time or times heretofore or hereafter to any of the same (including, without limitation, the Management Agreement and
any third-party financing documents including but not limited to the Loan Documents).

 

“Company”
shall mean Bell BR Waterford Crossing JV, LLC a Delaware limited liability company organized under the Act.

 

“Confidential
Information” shall have the meaning provided in Section 10(a).

 

“Default Amount”
shall have the meaning provided in Section 5.2(b).

 

“Default Loan”
shall have the meaning provided in Section 5.2(b)(i).

 

“Default Loan
Rate” shall have the meaning provided in Section 5.2(b)(i).

 

“Defaulting
Member” shall have the meaning provided in Section 5.2(b).

 

“Delaware UCC”
shall mean the Uniform Commercial Code as in effect in the State of Delaware from time to time.

 

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“Dissolution
Event” shall have the meaning provided in Section 13.2.

 

“Distributable
Funds” with respect to any month or other period, as applicable, shall mean Cash from Operations and Cash from Sale or
Refinancing determined by the Managers to be available for Distribution to the Members in accordance with Section 6. Distributable
Funds shall not include any loan proceeds or Capital Contributions held prior to investment.

 

“Distributions”
shall mean the distributions payable (or deemed payable) to a Member (including, without limitation, its allocable portion of Distributable
Funds).

 

“ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“Fiscal Year”
shall mean each calendar year ending December 31.

 

“Flow Through
Entity” shall have the meaning provided in Section 5.7.

 

“Foreign Corrupt
Practices Act” shall mean the Foreign Corrupt Practices Act of the United States, 15 U.S.C. Sections 78a, 78m, 78dd-1,
78dd-2, 78dd-3, and 78ff, as amended, if applicable, or any similar law of the jurisdiction where the Property is located or where
the Company or any of its Subsidiaries transacts business or any other jurisdiction, if applicable.

 

“Imputed Closing
Costs” means an amount (not to exceed one and one quarter percent (1.25%) of the purchase price) that would normally
be incurred by the Company or a Subsidiary if the Property were sold for an amount specified in Section 15.1 or Section
15.2 (as applicable), for title insurance premiums, survey costs, brokerage commissions, legal fees, and other commercially
reasonable closing costs.

 

“Income”
shall mean the gross income of the Company for any month, Fiscal Year or other period, as applicable, including gains realized
on the sale, exchange or other disposition of the Company’s assets.

 

“Indemnified
Party” shall have the meaning provided in Section 14.4(a).

 

“Indemnifying
Party” shall have the meaning provided in Section 14.4(a).

 

“Inducement Agreements”
shall have the meaning provided in Section 14.4(a).

 

“Initiating Member”
shall have the meaning provided in Section 15.2(a).

 

“Initiating
Member Carveout Guarantor” shall have the meaning provided in Section 15.2(c).

 

“Interest”
of any Member shall mean the entire limited liability company interest of such Member in the Company, which includes, without limitation,
any and all rights, powers and benefits accorded a Member under this Agreement and the duties and obligations of such Member hereunder.

 

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“Internal Rate
of Return” or “IRR” shall mean, with respect to a Member’s investment in the Company, the discount
rate that causes the sum of the net present value of all cash in-flows from such Member (i.e. Capital Contributions) and the net
present value of all cash out-flows to that Member resulting from the investment (i.e. Distributions from the Company to the Member)
to equal zero ($0) dollars. For purposes of computing the IRR, (i) all cash in-flows and cash out-flows will be discounted to present
value using monthly measuring periods (and compounding); and (ii) the calculation of the IRR will be made using the Microsoft Excel
XIRR function or similar calculation.

 

A Member will be deemed
to receive IRR with respect to any Capital Contributions when that Member has received a return of all of those Capital Contributions
plus a compounded return on those Capital Contributions at the applicable IRR, calculated commencing on the date or dates those
Capital Contributions are made to the Company, taking into account the timing and amounts of all previous distributions made (or
deemed made) by the Company to that Member and the timing and amounts of all previous Capital Contributions made to the Company
by that Member. For purposes of calculating the IRR and notwithstanding anything to the contrary herein, each Member’s initial
Capital Contribution and the Mandatory Capital Contributions shall be deemed to have been made as of the Acquisition Date.

 

“Lender”
means CW Capital, LLC, its successors or assigns.

 

“Loan”
means that certain acquisition loan in the principal amount of $20,100,000 from Lender to the Company.

 

“Loan Documents”
shall mean any and all documents evidencing or securing any loans obtained in connection with the acquisition of the Property or
any refinancing thereof.

 

“Loss”
shall mean the aggregate of losses, deductions and expenses of the Company for any month, Fiscal Year or other period, as applicable,
including losses realized on the sale, exchange or other disposition of the Company’s assets.

 

“Major Decision”
means any decision for the Company to take, or refrain from taking, any action or incurring any obligation with respect to the
following matters (or the effectuation of any such action or obligation):

 

		(i)	any merger, conversion or consolidation involving the Company or any Subsidiary or the sale, lease,
transfer, exchange or other disposition of all or substantially all of the Company’s assets or all of the Interests of the
Members in the Company, in one or a series of related transactions;

 

		(ii)	except as expressly provided in Section 12 with respect to Transfers by Bluerock or a Bluerock
Transferee to a Bluerock Transferee and with respect to Transfers by Bell or a Bell Transferee to a Bell Transferee as permitted
thereunder, the admission or removal of any Member or the Company’s issuance to any third party of any equity interest in
the Company (including interests convertible into, or exchangeable for, equity interests in the Company);

 

		(iii)	any voluntary liquidation, dissolution or termination of the Company;

 

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		(iv)	giving, granting or undertaking any options, rights of first refusal, deeds of trust, mortgages,
pledges, ground leases, security or other interests in or encumbering a Property, any portion thereof or any other material assets;

 

		(v)	selling, conveying, refinancing or effecting any other direct or indirect transfer of the Property,
any Subsidiary, or in any interest in the Property or in any Subsidiary or of any other material asset of the Company or any portion
thereof, or the entering into of any agreement, commitment or assumption with respect to any of the foregoing;

 

		(vi)	acquiring by purchase, ground lease or otherwise, any real property or other material asset, or
the entry into of any agreement, commitment or assumption with respect to any of the foregoing, or the making or posting of any
deposit (refundable or non-refundable);

 

		(vii)	taking any action by the Company that is reasonably likely to result in any Member or any of its
Affiliates having individual liability under any so called “bad boy” guaranties or similar agreements provided to third
party lenders in respect of financings relating to the Property, the Company, the Subsidiaries or any of their assets which provide
for recourse as a result of willful misconduct, fraud or gross negligence, or for failure to comply with the covenants or any other
provisions of such “bad boy” guaranties (each, a “Non-Recourse Carveout Guaranty”);

 

		(viii)	entering into, renewing or terminating any property management, leasing or development contract,
other than entering into the Management Agreement;

 

		(ix)	the amendment of this Agreement; or

 

		(x)	the decision to call for additional capital under Section 5.2.

 

“Management
Agreement” shall mean that certain property management agreement to be attached hereto as Exhibit C and to be
entered into between the Company, as owner, and Property Manager, as property manager, pursuant to which Property Manager will
provide certain management services for the Property.

 

“Manager”
and “Managers” shall have the meaning provided in Section 9.1(a).

 

“Mandatory Bell
Capital Contribution” shall be the Mandatory Capital Contribution allocable to Bell equal to the amount of the Mandatory
Capital Contribution multiplied by forty percent (40%).

 

“Mandatory Bluerock
Capital Contribution” shall be the Mandatory Capital Contribution allocable to Bluerock equal to the amount of the Mandatory
Capital Contribution multiplied by sixty percent (60%).

 

“Mandatory Capital
Contribution” shall be the amount of capital required to close the Acquisition of the Property, after taking into account
the initial Capital Contributions made by the Members in accordance with Section 5.1 (a) and the net proceeds of any purchase money
financing, plus such amounts for initial working capital, due diligence-related expense reimbursements and the Acquisition Commission
payable to Bell Partners Inc. and such other items as the Members may agree.

 

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“Member”
and “Members” shall mean Bluerock, Bell and any other Person admitted to the Company pursuant to this Agreement.
For purposes of the Act, the Members shall constitute a single class or group of members.

 

“Member in Question”
shall have the meaning provided in Section 17.12.

 

“Net Income”
shall mean the amount, if any, by which Income for any period exceeds Loss for such period.

 

“Net Loss”
shall mean the amount, if any, by which Loss for any period exceeds Income for such period.

 

“New York UCC”
shall have the meaning set forth in Section 17.17.

 

“Non-Initiating Indemnitees”
shall have the meaning provided in Section 15.2(c).

 

“Non-Initiating Member”
shall have the meaning provided in Section 15.2(a).

 

“Non-Recourse
Carveout Guaranty” shall have the meaning provided in the definition of “Major Decision.”

 

“Offer” shall
have the meaning provided in Section 15.2(a).

 

“Offeror” shall
have the meaning provided in Section 15.1(b).

 

“Offeree” shall
have the meaning provided in Section 15.1(b).

 

“Ownership Entity”
shall have the meaning provided in Section 15.2(a).

 

“Percentage
Interest” shall have the meaning provided in Section 5.3.

 

“Person”
shall mean any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company,
trust, unincorporated organization, government or any agency or political subdivision thereof or any other legal entity.

 

“Pre-Closing
Costs” shall mean all loan fees and charges, due diligence costs, entity formation expenses, and attorneys’ fees
due to counsel in connection with the negotiation of this Agreement and the other associated transaction documents between the
Members and the Members and their Affiliates and the closing on the Property or the Loan.

 

“Preferred Return”
shall mean an amount equal to an 8.0% Internal Rate of Return on a Member’s Capital Contribution. The Preferred Return will
initially begin to accrue on the date of a Member’s Capital Contribution to the Company, as to each Capital Contribution.

 

“Prior Acts”
shall have the meanings provided in Sections 15.1(e) and 15.2(c), respectively.

 

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“Property”
shall have the meaning provided in Section 3.

 

“Property Manager”
shall mean Bell Partners Inc., so long as the Management Agreement is in full force and effect and, thereafter, the entity performing
similar services with respect to the Property.

 

“Property Manager
Reports” shall have the meaning set forth in Section 8.2(c).

 

“Purchase Contract”
means that certain Purchase and Sale Agreement by and between Bell Partners Inc. and Seller dated February 1, 2012, as amended
and concurrently herewith assigned to the Company.

 

“Pursuer”
shall have the meaning provided in Section 10.3.

 

“Rate Lock Deposit”
means the sum of $402,000 posted with Lender pursuant to the Rate Lock Letter Agreement.

 

“Rate Lock Letter
Agreement” means that certain letter agreement between the Company and Lender dated March ___, 2012 by which the interest
rate for the Loan was fixed at 3.59% per annum.

 

“REIT”
shall mean a real estate investment trust as defined in Code Section 856.

 

“REIT Member”
shall mean any Member, if such Member is a REIT or a direct or indirect subsidiary of a REIT.

 

“REIT Requirements”
shall mean the requirements for qualifying as a REIT under the Code and Regulations.

 

“Regulations”
shall mean the Treasury Regulations promulgated pursuant to the Code, as amended from time to time, including the corresponding
provisions of any successor regulations.

 

“Representatives”
shall have the meaning provided in Section 14.1.

 

“Response Period”
shall have the meaning provided in Section 15.2(b).

 

“Sale Notice”
shall have the meaning provided in Section 15.2(a).

 

“Securities
Act” shall mean the Securities Act of 1933, as amended.

 

“Seller”
means Grove at Waterford Crossing, LLC.

 

“Selling Member
Carveout Guarantor” shall have the meaning provided in Section 15.1(e).

 

“Subsidiary”
shall mean any corporation, partnership, limited liability company or other entity of which fifty percent (50%) or more is owned
by the Company or of which at least a majority of the capital stock or other equity securities is owned by the Company.

 

    	-9-

    	 

    

  

“Tax Matters
Member” shall have the meaning provided in Section 8.3.

 

“Total Investment”
shall mean the sum of the aggregate Capital Contributions made by a Member.

 

“Transfer”
means, as a noun, any transfer, sale, assignment, exchange, charge, pledge, gift, hypothecation, conveyance, encumbrance or other
disposition, voluntary or involuntary, by operation of law or otherwise and, as a verb, voluntarily or involuntarily, by operation
of law or otherwise, to transfer, sell, assign, exchange, charge, pledge, give, hypothecate, convey, encumber or otherwise dispose
of.

 

“Valuation Amount”
shall have the meaning provided in Section 15.1(b).

 

Section 2.            Organization
of the Company.

 

2.1           Name.
The name of the Company shall be “Bell BR Waterford Crossing JV, LLC”. The business and affairs of the Company
shall be conducted under such name or such other name as the Managers deem necessary or appropriate to comply with the requirements
of law in any jurisdiction in which the Company may elect to do business.

 

2.2           Place
of Registered Office; Registered Agent. The address of the registered office of the Company in the State of Delaware is 1209
Orange Street, Wilmington, Delaware 19801. The name and address of the registered agent for service of process on the Company in
the State of Delaware is The Corporation Trust Company, Wilmington, Delaware 19808. The Managers may at any time on five (5) days
prior notice to all Members change the location of the Company’s registered office or change the registered agent.

 

2.3           Principal
Office. The principal address of the Company shall be c/o Bell Partners Inc., 300 North Greene Street, Suite 1000, Greensboro,
North Carolina 27401, and the principal office of Property Manager shall be c/o Bell Partners Inc., 300 North Greene Street, Suite
1000, Greensboro, North Carolina 27401, or, in each case, at such other place or places as may be determined by the Managers from
time to time.

 

2.4           Filings.
On or before execution of this Agreement, an authorized person within the meaning of the Act shall have duly filed or caused to
be filed the Certificate of Formation of the Company with the office of the Secretary of State of Delaware, as provided in Section
18-201 of the Act, and the Members hereby ratify such filing. The Managers shall use their best efforts to take such other actions
as may be reasonably necessary to perfect and maintain the status of the Company as a limited liability company under the laws
of Delaware. Notwithstanding anything contained herein to the contrary, the Company shall not do business in any jurisdiction that
would jeopardize the limitation on liability afforded to the Members under the Act or this Agreement.

 

2.5           Term.
The Company shall continue in existence from the date hereof until December 31, 2062, unless extended by the Members, or until
the Company is dissolved as provided in Section 13, whichever shall occur earlier.

 

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2.6           Expenses
of the Company. Other than the reimbursement of costs and expenses as provided herein, including Section 8.6, and the
fees described in Section 9.6, no fees, costs or expenses shall be payable by the Company to any Member (or its Affiliates).

 

Section
3.            Purpose.

 

The purpose of the Company,
subject in each case to the terms hereof, shall be to engage in the business of acquiring, owning, operating, developing, renovating,
repositioning, managing, leasing, selling, financing and refinancing the real estate and any real estate related investments (or
portions thereof) known as the Grove at Waterford Crossing, which is located at 101 Spade Leaf Blvd., Hendersonville, TN, which
is held by the Company (any property acquired as aforesaid shall hereinafter be referred to as the “Property”),
and all other activities reasonably necessary to carry out such purposes.

 

Section
4.            Conditions.

 

4.1           Bluerock
Conditions. The obligation of Bluerock to make the Mandatory Bluerock Capital Contribution under Section 5.1 and to
otherwise consummate the transactions contemplated herein is subject to fulfillment of all of the following conditions on or prior
to the date of closing of the Acquisition:

 

(a)           Bell
shall deposit in the Company’s bank account or the designated escrow account of Old Republic National Title Insurance Company
(“Title Company”) the amount of its Mandatory Bell Capital Contribution;

 

(b)           The
Management Agreement shall have been executed by the Company, and Property Manager;

 

(c)           All
of the representations and warranties of Bell and Property Manager contained in this Agreement and the Collateral Agreements shall
be true and correct as of the date hereof;

 

(d)           The
Company shall have received the loan proceeds contemplated by the loan documents to be entered into between the Company and CW
Capital and its further assignee, the Fannie Mae Delegated Underwriting and Service Program (the “Loan Documents”);
provided however, if such failure to receive loan proceeds is solely attributable to the failure of Bluerock to fund its Mandatory
Bluerock Capital Contribution, Bluerock may not use this condition to excuse its performance;

 

(e)           Execution
by Bell Partners Inc. and Bell HNW Nashville Portfolio, LLC of the Non-Recourse Carveout Guaranties and execution of that certain
agreement by and among Bluerock Special Opportunity + Income Fund, LLC, Bluerock Special Opportunity + Income Fund II, LLC, Bell
Partners Inc. and Bell HNW Nashville Portfolio, LLC, providing for the allocation of liability and contribution for losses arising
from the Non-Recourse Carveout Guaranties constituting part of the Loan Documents that shall have been executed by such guarantors
(the “Backstop Agreement”); and

 

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(f)           Bell
shall have complied with the terms of Section 5.1 (a) with respect to the payment of its initial Capital Contribution and there
shall have occurred no Bell Pre-Closing Default.

 

4.2          Bell
Conditions. The obligation of Bell to make the Mandatory Bell Capital Contribution under Section 5.1 and to otherwise
consummate the transactions contemplated herein is subject to fulfillment of all of the following conditions on or prior to the
date of closing of the Acquisition:

 

(a)           Bluerock
shall deposit into the Company’s bank account or Title Company’s designated escrow account the amount of its Mandatory
Bluerock Capital Contribution;

 

(b)           The
Company shall have received the loan proceeds contemplated by the Loan Documents; provided however, if such failure to receive
loan proceeds is solely attributable to the failure of Bell to fund its Mandatory Bell Capital Contribution, Bell may not use this
condition to excuse its performance;

  

(c)           The
Management Agreement shall have been executed between the Company and Property Manager;

 

(d)           All
of the representations and warranties of Bluerock contained in this Agreement shall be true and correct as of the date hereof;
and

 

(e)           Execution
by Bluerock Special Opportunity + Income Fund, LLC and Bluerock Special Opportunity + Income Fund II, LLC of the Non-Recourse Carveout
Guaranties and execution of the Backstop Agreement by and among Bluerock Special Opportunity + Income Fund, LLC, Bluerock Special
Opportunity + Income Fund II, LLC, Bell Partners Inc. and Bell HNW Nashville Portfolio, LLC; and

 

(f)           Bluerock
shall have complied with the terms of Section 5.1 (a) with respect to the payment of its initial Capital Contribution and there
shall have occurred no Bluerock Pre-Closing Default.

 

Section
5.            Capital Contributions, Loans, Percentage Interests and Capital
Accounts.

 

5.1           Initial
Capital Contributions; Mandatory Capital Contributions; Bluerock Supplemental Capital Contribution

 

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(a)           As
of the date hereof, Bluerock and Bell have made the initial Capital Contributions set forth in Exhibit A attached hereto.
$300,000 of the initial Capital Contributions has been used to fund (or to reimburse Bell Partners, Inc. for funding) the Earnest
Money pursuant to the Purchase Contract and $402,000 has been used to fund the Rate Lock Deposit pursuant to the Rate Lock Letter
Agreement and, in connection therewith, the Purchase Contract has been concurrently assigned to the Company. In the event that
(i) the Earnest Money or any portion thereof is forfeited to Seller pursuant to the terms of the Purchase Contract or as the result
of any litigation or settlement of litigation in connection thereto or (ii) the Rate Lock Deposit or any portion thereof is forfeited
to Lender pursuant to the terms of the Rate Lock Letter Agreement or as the result of any litigation or settlement of litigation
in connection thereto and such forfeiture under the preceding clauses (i) or (ii) is due to a Bluerock Pre-Closing Default, then
Bluerock shall solely bear such forfeiture, with Bluerock being required to reimburse Bell for forty percent (40%) of all amounts
so forfeited and 100% of any Pre-Closing Costs incurred by Bell or its Affiliates. Conversely, in the event that (i) the Earnest
Money or any portion thereof is forfeited to Seller pursuant to the terms of the Purchase Contract or as the result of any litigation
or settlement of litigation in connection thereto or (ii) the Rate Lock Deposit or any portion thereof is forfeited to Lender pursuant
to the terms of the Rate Lock Letter Agreement or as the result of any litigation or settlement of litigation in connection thereto
and such forfeiture under the preceding clauses (i) or (ii) is due to a Bell Pre-Closing Default, then Bell shall solely bear such
forfeiture, with Bell being required to reimburse Bluerock for sixty percent (60%) of all amounts so forfeited and 100% of any
Pre-Closing Costs incurred by Bluerock or its Affiliates. The obligations of Bluerock pursuant to this section are guaranteed by
Bluerock Real Estate, L.L.C. and the obligations of Bell pursuant to this section are guaranteed by Bell Partners Inc. Any sums
due by any party hereunder that are not received within five (5) days of when same are owing shall bear interest at an annual rate
equal to the lesser of (i) ten percent (10%) or (ii) the highest rate permitted by applicable law. Each party shall be entitled
to maintain an action at law or equity to enforce the other party’s obligations hereunder and shall be entitled to recover
past due amounts, including interest as provided above, together with all attorneys’ fees incurred in seeking recovery and
collection of amounts due hereunder and enforcing each party’s respective obligations hereunder.

 

(b)           Subject
to the conditions set forth in Section 4, Bluerock and Bell shall each make their respective Mandatory Bluerock Capital
Contribution and Mandatory Bell Capital Contribution.

 

5.2           Additional
Capital Contributions.

 

(a)           Additional
Capital Contributions may be called for from the Members by the Managers by written notice to the Members from time to time as
and to the extent capital is necessary to effect an investment or expenditures approved by the Managers. Except as otherwise agreed
by the Members, such subsequent and additional Capital Contributions shall be in an amount for each Member equal to the product
of the amount of the aggregate Capital Contribution called for multiplied by such Member’s Percentage Interest, and shall
be payable by the Members to the Company upon the earlier of (i) twenty (20) days after written request from the Company, or (ii)
the date when the Capital Contribution is required, as set forth in a written request from the Company.

 

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

 

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(i)          to
advance to the Company on behalf of, and as a loan to the Defaulting Member, an amount equal to the Default Amount to be evidenced
by a promissory note in form reasonably satisfactory to the non-failing Member (each such loan, a “Default Loan”).
The Capital Account of the Defaulting Member shall be credited with the amount of such Default Amount attributable to a Capital
Contribution and the aggregate of such amounts shall constitute a debt owed by the Defaulting Member to the non-failing Member.
Any Default Loan shall bear interest at the rate of twenty (20%) percent per annum, but in no event in excess of the highest rate
permitted by applicable laws (the “Default Loan Rate”), and shall be payable by the Defaulting Member on demand
from the non-failing Member and from any Distributions due to the Defaulting Member hereunder. Interest on a Default Loan to the
extent unpaid, shall accrue and compound on a quarterly basis. A Default Loan shall be prepayable, in whole or in part, at any
time or from time to time without penalty. Any such Default Loan shall be with full recourse to the Defaulting Member and shall
be secured by the Defaulting Member’s interest in the Company including, without limitation, such Defaulting Member’s
right to Distributions. In furtherance thereof, upon the making of such Default Loan, the Defaulting Member hereby pledges, assigns
and grants a security interest in its Interest to the non-failing Member and agrees to promptly execute such documents and statements
reasonably requested by the non-failing Member to further evidence and secure such security interest. Any advance by the non-failing
Member on behalf of a Defaulting Member pursuant to this Section 5.2(b)(i) shall be deemed to be a Capital Contribution
made by the Defaulting Member except as otherwise expressly provided herein. All Distributions to the Defaulting Member hereunder
shall be applied first to payment of any interest due under any Default Loan and then to principal until all amounts due thereunder
are paid in full. While any Default Loan is outstanding, the Company shall be obligated to pay directly to the non-failing Member,
for application to and until all Default Loans have been paid in full, the amount of (x) any Distributions payable to the Defaulting
Member, and (y) any proceeds of the sale of the Defaulting Member’s Interest in the Company;

 

(ii)         subject
to any applicable thin capitalization limitations on indebtedness of the Company, to treat its portion of such Capital Contribution
as a loan to the Company (rather than a Capital Contribution) and to advance to the Company as a loan to the Company an amount
equal to the Default Amount, which loan shall be evidenced by a promissory note in form reasonably satisfactory to the non-failing
Member and which loan shall bear interest at the Default Loan Rate and be payable on a first priority basis by the Company from
available Cash from Operations and Cash from Sale or Refinancing, prior to any Distributions made to the Defaulting Member. If
each Member has loans outstanding to the Company under this provision, such loans shall be payable to each Member in proportion
to the outstanding balances of such loans to each Member at the time of payment. Any advance to the Company pursuant to this Section
5.2(b)(ii) shall not be treated as a Capital Contribution made by the Defaulting Member;

 

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

 

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(c)           Notwithstanding
the foregoing provisions of this Section 5.2, no additional Capital Contributions shall be required under Section 5.2
from any Member if (i) the Company or any other Person shall be in default (or with notice or the passage of time or both, would
be in default) in any material respect under any loan, indenture, mortgage, lease, agreement or instrument to which the Company
or any of its Subsidiaries is a party or by which the Company (or any of its Subsidiaries) or any of its properties or assets is
or may be bound; provided, however, if such additional Capital Contribution is required to cure a monetary default thereunder then
this subsection (i) exception shall not apply, (ii) any other Member, the Company or any of its Subsidiaries shall be insolvent
or bankrupt or in the process of liquidation, termination or dissolution, (iii) any other Member, the Company or any of its Subsidiaries
shall be subjected to any pending litigation (x) in which the amount in controversy exceeds $500,000, (y) which litigation is not
being defended by an insurance company who would be responsible for the payment of any judgment in such litigation, and (z) which
litigation if adversely determined could have a material adverse effect on such other Member and/or the Company or any of its Subsidiaries
and/or could interfere with their ability to perform their obligations hereunder or under any Collateral Agreement, or (iv) there
has been a material adverse change in (including, but not limited to, the financial condition of) any other Member (and/or its
Affiliates) which, in Member’s reasonable judgment, prevents such other Member (and/or its Affiliates) from performing, or
substantially interferes with their ability to perform, their obligations hereunder or under any Collateral Agreement. If any of
the foregoing events shall have occurred and any Member elects not to make a Capital Contribution on account thereof, then any
other Member which has made its pro rata share of such Capital Contribution shall be entitled to a return of such Capital Contribution
from the Company.

 

5.3           Percentage
Ownership Interest. The Members shall have the initial percentage ownership interests (as the same are adjusted as provided
in this Agreement, a “Percentage Interest”) in the Company set forth on Exhibit A immediately following
the Capital Contributions provided for in Section 5.1. The Percentage Interests of the Members in the Company shall be adjusted
monthly so that the respective Percentage Interests of the Members at any time shall be in proportion to their respective cumulative
Total Investment made (or deemed to be made) pursuant to Sections 5.1 and 5.2. Percentage Interests shall not be
adjusted by Distributions made (or deemed made) to a Member.

 

5.4           Return
of Capital Contribution. Except as approved by each of the Members, no Member shall have any right to withdraw or make a demand
for withdrawal of the balance reflected in such Member’s Capital Account (as determined under Section 5.6) until the
full and complete winding up and liquidation of the business of the Company.

 

5.5           No
Interest on Capital. Interest earned on Company funds shall inure solely to the benefit of the Company, and no interest shall
be paid upon any Capital Contributions nor upon any undistributed or reinvested income or profits of the Company.

 

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5.6           Capital
Accounts. A separate capital account (the “Capital Account”) shall be maintained for each Member in accordance
with Section 1.704-1(b)(2)(iv) of the Regulations. Without limiting the foregoing, the Capital Account of each Member shall be
increased by (i) the amount of any Capital Contributions made by such Member, (ii) the amount of income allocated to such
Member and (iii) the amount of income or profits, if any, allocated to such Member not otherwise taken into account in this Section
5.6. The Capital Account of each Member shall be reduced by (i) the amount of any cash and the fair market value of any property
distributed to the Member by the Company (net of liabilities secured by such distributed property that the Member is considered
to assume or take subject to), (ii) the amount of Loss allocated to the Member and (iii) the amount of expenses or losses, if any,
allocated to such Member not otherwise taken into account in this Section 5.6. The Capital Accounts of the Members shall
not be increased or decreased pursuant to Regulations Section 1.704-1(b)(2)(iv)(f) to reflect a revaluation of the Company’s
assets on the Company’s books in connection with any contribution of money or other property to the Company pursuant to Section
5.2 by existing Members. If any property other than cash is distributed to a Member, the Capital Accounts of the Members shall
be adjusted as if such property had instead been sold by the Company for a price equal to its fair market value, the gain or loss
allocated pursuant to Section 7, and the proceeds distributed in the manner set forth in Sections 6.1 and 6.2 or
Section 13.3(d)(iii). No Member shall be obligated to restore any negative balance in its Capital Account. No Member shall
be compensated for any positive balance in its Capital Account except as otherwise expressly provided herein. The foregoing provisions
and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with the provisions
of Regulations Section 1.704-1(b)(2) and shall be interpreted and applied in a manner consistent with such Regulations.

 

5.7           New
Members. The Company may issue additional Interests and thereby admit a new Member or Members, as the case may be, to the Company,
only if such new Member (i) has delivered to the Company its Capital Contribution, (ii) has agreed in writing to be bound by the
terms of this Agreement by becoming a party hereto, and (iii) has delivered such additional documentation as the Company shall
reasonably require to so admit such new Member to the Company. Without the prior written consent of each then-current Member, a
new Member may not be admitted to the Company if the Company would, or may, have in the aggregate more than one hundred (100) members.
For purposes of determining the number of members under this Section 5.7, a Person (the “Beneficial Owner”)
indirectly owning an interest in the Company through a partnership, grantor trust or S corporation (as such terms are used
in the Code) (the “Flow-Through Entity”) shall be considered a member, but only if (i) substantially all of
the value of the Beneficial Owner’s interest in the Flow-Through Entity is attributable to the Flow-Through Entity’s
interest (direct or indirect) in the Company and (ii) in the sole discretion of the Managers, a principal purpose of the use of
the Flow-Through Entity is to permit the Company to satisfy the 100-member limitation.

 

Section
6.            Distributions.

 

The Managers shall calculate
and determine the amount of Distributable Funds for each applicable period. Except as provided in Sections 5.2(b), 6.3 or
13.3 or otherwise provided in this Agreement, Distributable Funds, if any, shall be distributed to the Members (or, as to
the Disposition Commission, to Bell Partners Inc.) as set forth in Sections 6.1 and 6.2 below, in proportion to their Percentage
Interests, on the 15th day of the month following each calendar quarter or from time to time as determined by the Managers
(or in the case of the Disposition Commission to Bell Partners Inc. on or promptly following the date of the disposition of the
Property).

 

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6.1          Cash
from Operations. Distributable Funds arising from Cash from Operations shall be distributed to the Members in proportion to
their Percentage Interests.

 

6.2          Cash
from Sale or Refinancing.. Distributable Funds arising from Cash from Sale or Refinancing shall be distributed as follows:

 

(a)           First,
to the Members in proportion to their Percentage Interests until the Members have been distributed (under this Section 6.2(a) and
Section 6.1) an amount equal to their accrued but undistributed Preferred Return;

 

(b)           Second,
Disposition Commissions payable to Bell Partners Inc. under Section 9.6(c); and

 

(c)           Third,
100% to the Members in proportion to their Percentage Interests.

 

6.3           Indemnity
Obligations Any distributions otherwise payable to a Member under this Agreement shall be applied first to satisfy amounts
due and payable on account of the indemnity and/or contribution obligations of such Member under this Agreement and/or any other
agreement delivered by such Member to the Company or any other Member (including but not limited to the Backstop Agreement) but
shall be deemed distributed to such Member for purposes of this Agreement.

 

6.4           Distributions
in Kind. In the discretion of the Managers, Distributable Funds may be distributed to the Members in cash or in kind; provided,
however, that no Member may be compelled to accept from the Company a distribution of any asset in kind unless each Member receives
at the same time a distribution of an interest in the property being distributed that is proportionate to such Member’s Percentage
Interest. In the case of all assets to be distributed in kind, the amount of the distribution shall equal the fair market value
of the asset distributed as determined by the Managers. In the case of a distribution of publicly traded property, the fair market
value of such property shall be deemed to be the average closing price for such property for the thirty (30) day period immediately
prior to the distribution, or if such property has not yet been publicly traded for thirty (30) days, the average closing price
of such property for the period prior to the distribution in which the property has been publicly traded.

 

Section
7.            Allocations.

 

7.1           Allocation
of Net Income and Net Losses Other than in Liquidation. Except as otherwise provided in this Agreement, Net Income and Net
Losses of the Company for each Fiscal Year shall be allocated among the Members in a manner such that, as of the end of such Fiscal
Year and taking into account all prior allocations of Net Income and Net Losses of the Company and all distributions made by the
Company through such date, the Capital Account of each Member is, as nearly as possible, equal to the distributions that would
be made to such Member pursuant to Sections 6.1 and 6.2 if the Company were dissolved, its affairs wound up and assets sold
for cash equal to their tax basis (or book value in the case of assets that have been revalued in accordance with Section 704(b)
of the Code), all Company liabilities were satisfied, and the net assets of the Company were distributed in accordance with Sections 6.1
and 6.2 immediately after such allocation.

 

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7.2          Allocation
of Net Income and Net Losses in Liquidation. Net Income and Net Losses realized by the Company in connection with the liquidation
of the Company pursuant to Section 13 shall be allocated among the Members in a manner such that, taking into account all
prior allocations of Net Income and Net Losses of the Company and all distributions made by the Company through such date, the
Capital Account of each Member is, as nearly as possible, equal to the amount which such Member is entitled to receive pursuant
to Section 13.3(d)(iii).

 

7.3          U.S.
Tax Allocations.

 

(a)           Subject
to Section 704(c) of the Code, for U.S. federal and state income tax purposes, all items of Company income, gain, loss, deduction
and credit shall be allocated among the Members in the same manner as the corresponding item of income, gain, loss, deduction or
credit was allocated pursuant to the preceding paragraphs of this Section 7.

 

(b)           In
accordance with Code Section 704(c) and the Regulations promulgated thereunder, income and loss with respect to any property contributed
to the capital of the Company (including, if the property so contributed constitutes a partnership interest, the applicable distributive
share of each item of income, gain, loss, expense and other items attributable to such partnership interest whether expressly so
allocated or reflected in partnership allocations) shall, solely for U.S. federal income tax purposes, be allocated among the Members
so as to take account of any variation between the adjusted basis of such property to the Company for U.S. federal income tax purposes
and its Agreed Upon Value at the time of contribution. Such allocation shall be made in accordance with such method set forth in
Regulations Section 1.704-3(b) as the Managers in their reasonable discretion approve.

 

Any elections or other
decisions relating to such allocations shall be made by the Managers in any manner that reasonably reflects the purpose and intention
of this Agreement. Allocations pursuant to this Section 7.3. are solely for purposes of U.S. federal, state and local income
taxes and shall not affect, or in any way be taken into account in computing, any Member’s share of Net Income, Net Loss,
other items or distributions pursuant to any provisions of this Agreement.

 

Section
8.             Books, Records, Tax Matters and Bank Accounts.

 

8.1           Books
and Records. The books and records of account of the Company shall be maintained in accordance with industry standards and
shall be based on the Property Manager Reports. The books and records shall be maintained at the Company’s principal office
or at such other location designated by the Managers, and all such books and records (and the dealings and other affairs of the
Company and its Subsidiaries) shall be available to any Member at such location for review, investigation, audit and copying, at
such Member’s sole cost and expense, during normal business hours on at least twenty-four (24) hours prior notice. In connection
with such review, investigation or audit, such Member (and its representatives and agents) shall have the unfettered right to meet
and consult with any and all employees of Property Manager (or any of their respective Affiliates) and to attend meetings and independently
meet and consult with any and all third parties having dealings or any other relationship with the Company or any of its Subsidiaries
or with Property Manager in respect of the Company or any of its Subsidiaries.

 

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8.2           Reports
and Financial Statements.

 

(a)           Within
sixty (60) days of the end of each Fiscal Year, or such later date as specified herein, Bell (or such other party as the Managers
may designate) shall cause each Member to be furnished with two sets of the following annual reports computed as of the last day
of the Fiscal Year:

 

(i)          An
unaudited balance sheet of the Company;

 

(ii)         An
unaudited statement of the Company’s profit and loss; and

 

(iii)        A
statement of the Members’ Capital Accounts and changes therein for such Fiscal Year to be provided with the tax returns.

 

(b)          Within
twenty (20) days of the end of each quarter of each Fiscal Year, the Property Manager shall cause to be furnished to Bluerock such
information as requested by Bluerock as is necessary for any REIT Member (whether a direct or indirect owner) to determine its
qualification as a REIT and its compliance with REIT Requirements as shall be requested by Bluerock. Further, the Property Manager
shall cooperate in a reasonable manner at the request of any Member to work in good faith with any designated accountants or auditors
of such Member or its Affiliates so that such Member or its Affiliate is able to comply with its public reporting, attestation,
certification and other requirements under the Securities Exchange Act of 1934, as amended, applicable to such entity, and to work
in good faith with the designated accountants or auditors of the Member or any of its Affiliates in connection therewith, including
for purposes of testing internal controls and procedures of such Member or its Affiliates.

 

(c)           The
Members acknowledge that the Property Manager is obligated to perform Property-related accounting and furnish Property-related
accounting statements under the terms of the Management Agreement (the “Property Manager Reports”). Managers
shall be entitled to rely on the Property Manager Reports with respect to their obligations under this Section 8, and the
Members acknowledge that the reports to be furnished shall be based on the Property Manager Reports, without any duty on the part
of the Managers to further investigate the completeness, accuracy or adequacy of the Property Manager Reports.

 

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8.3           Tax
Matters Member. Bell is hereby designated as the “tax matters partner” of the Company and the Subsidiaries, as
defined in Section 6231(a)(7) of the Code (the “Tax Matters Member”) ”); provided, however, the Tax Matters
Member shall not without the affirmative written consent of the Managers: (a) extend the statute of limitations for assessing or
computing any tax liability against the Company (or the amount or character of any Company tax items); (b) settle any audit with
the IRS concerning the adjustment or readjustment of any Company item(s) (within the meaning of Section 6231(a)(3) of the Code);
(c) file a request for an administrative adjustment with the IRS at any time or file a petition for judicial review with respect
to any such request; (d) initiate or settle any judicial review or action concerning the amount or character of any Company tax
item(s) (within the meaning of Section 6231(a)(3) of the Code); (e) intervene in any action brought by any other Member for judicial
review of a final adjustment; or (f) approve the settlement or compromise of any other review or action concerning the amount or
character of any Company tax items. Except as otherwise provided in this Agreement, all elections required or permitted to be made
by the Company and the Subsidiaries under the Code or state tax law shall be timely determined and made by the Tax Matters Member;
provided, that such elections do not materially alter the economic arrangement of the Members or otherwise unfairly discriminate
against any Member. The Members intend that the Company be treated as a partnership for U.S. federal, state and local tax purposes,
and the Members will not elect or authorize any person to elect to change the status of the Company from that of a partnership
for U.S. federal, state and local income tax purposes. The Tax Matters Member agrees to consult with the Members with respect to
any written notice of any material tax elections and any material inquiries, claims, assessments, audits, controversies or similar
events received from any taxing authority. In addition, upon the request of any Member, the Company and each Subsidiary shall make
an election pursuant to Code Section 754 to adjust the basis of the Company’s property in the manner provided in Code Sections
734(b) and 743(b). The Company hereby indemnifies and holds harmless The Tax Matters Member from and against any claim, loss, expense,
liability, action or damage resulting from its acting or its failure to take any action as the “tax matters partner”
of the Company and the Subsidiaries, provided that any such action or failure to act does not constitute gross negligence
or willful misconduct. The Company shall reimburse and otherwise bear all costs incurred by a Tax Matters Member in connection
with serving in that position, including without limitation, the fees of any accountants and/or lawyers retained by the Tax Matters
Member in connection with any Internal Revenue Service audit of the Company.

 

8.4           Bank
Accounts. All funds of the Company are to be deposited in the Company’s name in such bank account or accounts as may
be designated by the Managers and shall be withdrawn on the signature of such Person or Persons as the Managers may authorize.
In addition, each Member shall be authorized on the Company’s bank accounts if such Member so requests.

 

8.5           Tax
Returns. Bell Partners Inc. shall cause to be prepared all income and other tax returns of the Company and the Subsidiaries
required by applicable law and shall submit such returns to the Members for their review, comment and approval at least ten (10)
days prior to the due date or extended due date thereof and shall thereafter cause the same to be filed in a timely manner (including
extensions). No later than the due date or extended due date, the Managers shall deliver or cause to be delivered to each Member
a copy of the tax returns for the Company and such Subsidiaries with respect to such Fiscal Year, together with such information
with respect to the Company and such Subsidiaries as shall be necessary for the preparation by such Member of its U.S. federal
and state income or other tax and information returns. The Managers shall further cause the Company to deliver any and all copies
of tax returns of the Company and its Subsidiaries required to be delivered under the Loan Documents.

 

8.6           Expenses.
Notwithstanding any contrary provision of this Agreement, the Members acknowledge and agree that the reasonable expenses and charges
incurred directly or indirectly by or on behalf of the Managers in connection with their obligations under this Section 8
will be reimbursed by the Company to each of the Managers, as applicable.

 

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Section
9.            Management and Operations.

 

9.1           Management.

 

(a)            The
Company shall be managed by one or more managers (each, a “Manager,” and collectively, the “Managers”.
The Managers may also be referred to collectively as the “Co-Managers,” and individually as a “Co-Manager”).
Bluerock shall have the power and authority to appoint one (1) Manager without any further action or approval by any Member, and
Bluerock hereby appoints Bluerock as its initial Manager. Bell shall have the power and authority to appoint one (1) Manager without
any further action or approval by any Member, and Bell hereby appoints Bell Partners Inc. as its initial Manager. A Member may
only remove and replace a Manager appointed by that Member. Each Manager may appoint one or more of its officers to act on its
behalf.

 

(b)            The
Managers acting jointly, and each of them if acting with the approval of the other, shall have the authority to exercise all of
the powers and privileges granted by the Act, any other law or this Agreement, together with any powers incidental thereto, and
to take any other action not prohibited under the Act or other applicable law, so far as such powers or actions are necessary or
convenient or related to the conduct, promotion or attainment of the business, purposes or activities of the Company.

 

(c)            Intentionally
Omitted

 

(d)            The
signature of any Manager (or other individual to whom the Managers have delegated the appropriate authority) is sufficient to constitute
execution of a document on behalf of the Company, including the Loan Documents and any other promissory notes with respect to indebtedness
for borrowed money and related trust deeds, mortgages and other security instruments. A copy or extract of this Agreement may be
shown to the relevant parties in order to confirm such authority.

 

(e)            The
Managers shall meet once every quarter (unless waived by mutual agreement of the Members) and at such other times as may be necessary
for the conduct of the Company’s business on at least five (5) days prior written notice of the time and place of such meeting
given by any Manager. Notice of regular meetings of the Managers is not required. Managers may waive in writing the requirement
for notice before, at or after a special meeting, and attendance at such a meeting without objection by a Manager shall be deemed
a waiver of such notice requirement. Notice of any special meeting shall also be sent by Bluerock to each of the managers of Bluerock
(the “Bluerock Managers”). The Bluerock Managers shall be invited by Bluerock to attend any quarterly meeting
of the Managers, and be provided the right to substantially participate at such meetings in discussions regarding the affairs of
the Company, including the operation, management and potential refinancing or sale or other transfer of the Property. The Managers
shall consider any matters raised by the Bluerock Managers in good faith, and shall provide, if requested, direct and substantial
access to the Property Manager so that the Bluerock Managers are able, subject to the terms of the Management Agreement,
to substantially and directly participate in decisions regarding the management of the Property. Any meeting of the Managers may
be held by conference telephone call, video conference or through similar communications equipment by means of which all persons
participating in the meeting can communicate with each other. Participation in a telephonic and/or video conference meeting held
pursuant to this Section 9.1(e) shall constitute presence in person at such meeting.

 

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(f)            Except
as otherwise specifically provided in this Agreement, no Member will act for, deal on behalf of, or bind the Company in any way,
other than in its capacity as a Manager of the Company, if any.

 

9.2           Annual
Business Plan. No later than thirty (30) days prior to the end of the then current Fiscal Year (except for the 2012 Annual
Business Plan, a copy of which shall be attached hereto as Exhibit B), Property Manager shall prepare (or cause to be prepared)
and shall deliver to the Managers for approval pursuant to Section 9.1 the proposed capital expenditures plan for the next
Fiscal Year. If Property Manager fails to deliver a proposed capital expenditures plan or if the plan proposed is unacceptable
to the Managers, the Managers shall have the right to prepare a proposed capital expenditures plan (a plan approved by the Managers,
is referred to herein as the “Annual Business Plan”). No material changes or departures from any item in an
Annual Business Plan approved by the Managers shall be made by Property Manager without the prior approval of the Managers.

 

9.3           Implementation
of Plan by Property Manager. Property
Manager shall, subject to the limitations contained herein, the availability of operating revenues and other cash flow and any
other matters outside of the reasonable control of Property Manager, implement and shall not vary or modify the then applicable
Annual Business Plan without the prior written approval of the Managers. Property Manager shall promptly advise and inform the
Managers of any transaction, notice, event or proposal directly relating to the management and operation of the Property, other
assets of the Company or the Company or any Subsidiary which does or is likely to significantly affect, either adversely or favorably,
such Property, other assets of the Company or the Company or such Subsidiary or cause a significant deviation from the Annual Business
Plan. Nothing contained herein shall in any way diminish the obligations or duties of Property Manager hereunder.

 

9.4           Affiliate
Transactions. No agreement shall be entered into by the Company or any Subsidiary with a Member or any Affiliate of a Member
and no decision shall be made in respect of any such agreement (including, without limitation, the enforcement or termination thereof)
unless such agreement or related decision shall have been approved in writing by the Managers. Without limiting the foregoing,
any such agreement shall be on arm’s length terms and conditions, and unless otherwise specified or otherwise provided by
Section 9.6 below, shall be terminable on fifteen (15) days’ notice without penalty and the terms and conditions of such
agreement shall be disclosed to the Managers prior to the execution and delivery thereof. Further, the written approval of Bluerock
shall be required prior to the use of the name “Bluerock” in connection with any matter or transaction. Notwithstanding
the foregoing to the contrary, the Management Agreement is deemed to be approved by the Managers.

 

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9.5           Other
Activities.

 

(a)            Right
to Participation in Other Member Ventures. Neither the Company nor any Member (or any Affiliate of any Member) shall have any
right by virtue of this Agreement either to participate in or to share in any other now existing or future ventures, activities
or opportunities of any of the other Members or their Affiliates, or in the income or proceeds derived from such ventures, activities
or opportunities.

 

(b)            Limitation
on Actions of Members; Binding Authority. No Member shall, without the prior written consent of the other Members, take any
action on behalf of, or in the name of, the Company, or enter into any contract, agreement, commitment or obligation binding upon
the Company, or, in its capacity as a Member or Manager of the Company, perform any act in any way relating to the Company or the
Company’s assets, except in a manner and to the extent consistent with the provisions of this Agreement. Notwithstanding
any provision in this Agreement to the contrary and without the need for any additional consent from any Person, the Company is
hereby authorized to execute, deliver and perform that certain Consent and Agreement of the Company attached to each of the Bell
Pledge Agreement and Bluerock Pledge Agreement.

 

9.6           Management
Agreement.

 

(a)            The
Company shall enter into the Management Agreement for the Property with Property Manager (which Management Agreement shall be updated
and supplemented from time to time) pursuant to which Property Manager will provide the management services described therein to
the Company.

 

(b)            The
Management Agreement shall be terminable in the event of an exercise of rights under Section 15, or by the Company and/or
Bluerock only “for cause,” as defined in the Management Agreement on written notice from the Managers or Bluerock to
Property Manager (for the avoidance of doubt, a termination “for cause” or in the event of an exercise of rights by
either party under Section 15 shall not be a Major Decision). The Managers acknowledge that a third party lender may require
the Management Agreement to be terminable on thirty (30) days notice but neither the Managers or Bluerock shall exercise such right
except (i) for cause; or (ii) as required by such lender. Any delegation of the responsibilities of Property Manager or the subcontracting
for such services will be subject to Bluerock’s prior written consent. Separate agreements may also be entered into with
Bell, Bluerock, their respective Affiliates, or with third parties for certain services to be provided to the Company, including
leasing, construction management, property management, asset management, technology services, etc. Such arrangements shall be at
market rates, and shall be entered into only with the prior written approval of the Managers and Bluerock, consistent with an approved
budget and business plan for each asset. Unless otherwise agreed, all such contracts will be payable on a monthly basis and will
be terminable upon thirty (30) day’s notice for any reason or no reason.

 

(c)            On
the date the Company or its Subsidiary shall acquire the Property (the “Acquisition Date”), Bell Partners Inc.
shall earn and the Company shall pay (or cause its Subsidiary to pay) an Acquisition Commission to Bell Partners Inc. The cost
to the Company of the Acquisition Commission shall be borne equally by Bluerock and Bell, and shall be included in their respective
Capital Contributions. Upon the sale of the Property by the Company, Bell Partners Inc. shall earn and the Company shall pay to
Bell Partners Inc. a real estate commission (the “Disposition Commission”) in an amount equal to the contract
sales price of the Property multiplied by one percent (1.0%).

 

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9.7           Operation
in Accordance with REOC/REIT Requirements.

 

(a)           The
Members acknowledge that Bluerock or one or more of its Affiliates (an “BR Affiliate”) intends to qualify as
a “real estate operating company” or “venture capital operating company” within the meaning of U.S. Department
of Labor Regulation 29 C.F.R. §2510.3-101 (a “REOC”), and agree that the Company and its Subsidiaries shall
be operated in a manner that will enable Bluerock and such BR Affiliate to so qualify. Notwithstanding anything herein to the contrary,
the Company and its Subsidiaries shall not take, or refrain from taking, any action that Bluerock notifies the Company would result
in Bluerock or a BR Affiliate from failing to qualify as a REOC. The Members acknowledge and agree that Bluerock may assign any
or all of its rights or powers under this Agreement as Manager, to designate committee representatives, to provide consents and
approvals, or any other rights or powers to one or more of its BR Affiliates as it deems appropriate, and the exercise of any such
rights or powers by a BR Affiliate shall have full force and effect under this Agreement without the need for any further consent
or approval. Except as disclosed to Bluerock, Bell (a) shall not fund any Capital Contribution "with the 'plan assets' of
any 'employee benefit plan' within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended or any 'plan' as defined by Section 4975 of the Internal Revenue Code of 1986, as amended", and (b) shall comply with
any requirements specified by Bluerock in order to ensure compliance with this Section 9.7.

 

(b)           Except
for the Property, neither the Company nor its Subsidiaries shall hold any investment, incur any indebtedness or otherwise take
any action that would cause any Member of the Company (or any Person holding an indirect interest in the Company through an entity
or series of entities treated as partnerships for U.S. federal income tax purposes) to realize any “unrelated business taxable
income” as such term is defined in Code Sections 511 through 514, unless specifically agreed to by the Managers in writing.
No Manager or Member shall be liable for any income or other taxes, damages, costs or expenses incurred by the Company or any Member
by reason of the recognition by the Company of UBTI, unless caused by its own willful misconduct or gross negligence.

 

(c)           The
Company (and any direct or indirect
Subsidiary of the Company) may not engage in any activities or hold any assets that would constitute or result in the occurrence
of a REIT Prohibited Transaction as defined herein. Notwithstanding anything to the contrary contained in this Agreement, during
the time a REIT Member is a Member of the Company, neither the Company, any direct or indirect
Subsidiary of the Company, nor any Member of the Company shall take or refrain from taking any action which, or the effect
of which, would constitute or result in the occurrence of a REIT Prohibited Transaction by the Company or any direct
or indirect Subsidiary thereof, including without limiting the generality of the foregoing, but in amplification
thereof:

 

(i)          Entering
into any lease, license, concession or other agreement or permitting any sublease, license, concession or other agreement that
provides for rent or other payment based in whole or in part on the income or profits of any person, excluding for this purpose
a lease that provides for rent based in whole or in part on a fixed percentage or percentages of gross receipts or gross sales
of any person without reduction for any costs of the lessee (and in the case of a sublease, without reduction for any sublessor
costs);

 

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(ii)         Leasing
personal property, excluding for this purpose a lease of personal property that is entered into in connection with a lease of real
property where the rent attributable to the personal property is less than 15% of the total rent provided for under the lease;

 

(iii)        Acquiring
or holding any debt investments, excluding for these purposes “debt” solely between wholly-owned Subsidiaries of the
Company, unless (I) the amount of interest income received or accrued by the Company under such loan does not, directly or indirectly,
depend in whole or in part on the income or profits of any person, and (II) the debt is fully secured by mortgages on real property
or on interests in real property. Notwithstanding anything to the contrary herein, in the case of debt issued to the Company by
a Subsidiary which is treated as a “taxable REIT subsidiary” of the REIT Member, such debt shall be secured by a mortgage
or similar security interest, or by a pledge of the equity ownership of a subsidiary of such taxable REIT subsidiary;

 

(iv)        Acquiring
or holding, directly or indirectly, more than 10% of the outstanding securities of any one issuer (by vote or value) other than
an entity which either (i) is taxable as a partnership or a disregarded entity for United States federal income tax purposes, (ii)
has properly elected to be a taxable REIT subsidiary of the REIT Member by jointly filing with REIT, IRS Form 8875, or (iii) has
properly elected to be a real estate investment trust for U.S. federal income tax purposes;

 

(v)         Entering
into any agreement where the Company receives amounts, directly or indirectly, for rendering services to the tenants of any property
that is owned, directly or indirectly, by the Company other than (i) amounts received for services that are customarily furnished
or rendered in connection with the rental of real property of a similar class in the geographic areas in which the Property is
located where such services are either provided by (A) an Independent Contractor (as defined in Section 856(d)(3) of the Code)
who is adequately compensated for such services and from which the Company or REIT Member do not, directly or indirectly, derive
revenue or (B) a taxable REIT subsidiary of REIT Member who is adequately compensated for such services or (ii) amounts received
for services that are customarily furnished or rendered in connection with the rental of space for occupancy only (as opposed to
being rendered primarily for the convenience of the Property’s tenants);

 

(vi)        Entering
into any agreement where a material amount of income received or accrued by the Company under such agreement, directly or indirectly,
does not qualify as either (i) “rents from real property” or (ii) “interest on obligations secured by mortgages
on real property or on interests in real property,” in each case as such terms are defined in Section 856(c) of the Code;

 

(vii)       Holding
cash of the Company available for operations or distribution in any manner other than a traditional bank checking or savings account;

 

(viii)      Selling
or disposing of any property, subsidiary or other asset of the Company prior to (i) the
completion of a two (2) year holding
period with such period to begin on the date the Company acquires a direct or indirect interest in such property
and begins to hold such property, subsidiary or asset for the production of rental income, and (ii) the satisfaction of any other
requirements under Section 857 of the Code necessary for the avoidance of a prohibited transaction tax on the REIT;
or

 

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(ix)         Failing
to make current cash distributions to REIT Member each year in an amount which does not at least equal the taxable income
allocable to REIT Member for such year. Notwithstanding the foregoing provisions of this Section 9.7(c), the Company may
enter into a REIT Prohibited Transaction if it receives the prior written approval of the REIT Member specifically
acknowledging that the REIT Member is approving a REIT Prohibited Transaction pursuant to this Section 9.7(c). For purposes
of this Section 9.7(c), “REIT Prohibited Transactions” shall mean any of the actions specifically set forth in
Sections 9.7(c)(i) through (c)(ix) as well as any action of which the Company receives notice from BR or a REIT Member that
such action would result in a REIT Member losing its REIT status under IRC Section 856 or would cause such REIT Member to be
subject to any punitive taxation pursuant to IRC Section 857(b)(6). The Loan or any loan contemplated by Section 5.2(b)(ii)
shall not be considered a REIT Prohibited Transaction.

 

9.8           FCPA.

 

(a)           In
compliance with the Foreign Corrupt Practices Act, each Member will not, and will ensure that its officers, directors, employees,
shareholders, members, agents and Affiliates, acting on its behalf or on the behalf of the Company or any of its Subsidiaries or
Affiliates do not, for a corrupt purpose, offer, directly or indirectly, promise to pay, pay, promise to give, give or authorize
the paying or giving of anything of value to any official representative or employee of any government agency or instrumentality,
any political party or officer thereof or any candidate for office in any jurisdiction, except for any facilitating or expediting
payments to government officials, political parties or political party officials the purpose of which is to expedite or secure
the performance of a routine governmental action by such government officials or political parties or party officials. The term
“routine governmental action” for purposes of this provision shall mean an action which is ordinarily and commonly
performed by the applicable government official in (i) obtaining permits, licenses, or other such official documents which such
Person is otherwise legally entitled to; (ii) processing governmental papers; (iii) providing police protection, mail pick-up and
delivery or scheduling inspections associated with contract performance or inspections related to transit of goods across country;
(iv) providing phone service, power and water supply, loading and unloading of cargo, or protecting perishable products or commodities
from deterioration; or (v) actions of a similar nature.

 

The term routine governmental
action does not include any decision by a government official whether, or on what terms, to award new business to or to continue
business with a particular party, or any action taken by an official involved in the decision making process to encourage a decision
to award new business to or continue business with a particular party.

 

(b)           Each
Member agrees to notify immediately the other Member of any request that such Member or any of its officers, directors, employees,
shareholders, members, agents or Affiliates, acting on its behalf, receives to take any action that may constitute a violation
of the Foreign Corrupt Practices Act.

 

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Section
10.          Confidentiality.

 

10.1         Any
information relating to a Member’s business, operation or finances which are proprietary to, or considered proprietary by,
a Member are hereinafter referred to as “Confidential Information”. All Confidential Information in tangible form (plans,
writings, drawings, computer software and programs, etc.) or provided to or conveyed orally or visually to a receiving Member,
shall be presumed to be Confidential Information at the time of delivery to the receiving Member. All such Confidential Information
shall be protected by the receiving Member from disclosure with the same degree of care with which the receiving Member protects
its own Confidential Information from disclosure. Each Member agrees: (i) not to disclose such Confidential Information to any
Person except to those of its employees or representatives who need to know such Confidential Information in connection with the
conduct of the business of the Company and who have agreed to maintain the confidentiality of such Confidential Information and
(ii) neither it nor any of its employees or representatives will use the Confidential Information for any purpose other than in
connection with the conduct of the business of the Company; provided that such restrictions shall not apply if such Confidential
Information:

 

(a)            is
or hereafter becomes public, other than by breach of this Agreement;

 

(b)           was
already in the receiving Member’s possession prior to any disclosure of the Confidential Information to the receiving Member
by the divulging Member; or

 

(c)            has
been or is hereafter obtained by the receiving Member from a third party not bound by any confidentiality obligation with respect
to the Confidential Information; provided, further, that nothing herein shall prevent any Member from disclosing
any portion of such Confidential Information (1) to the Company and allowing the Company to use such Confidential Information
in connection with the Company’s business, (2) pursuant to judicial order or in response to a governmental inquiry, by subpoena
or other legal process, but only to the extent required by such order, inquiry, subpoena or process, and only after reasonable
notice to the original divulging Member, (3) as necessary or appropriate in connection with or to prevent the audit by a governmental
agency of the accounts of Bell or Bluerock, (4) in order to initiate, defend or otherwise pursue legal proceedings between the
parties regarding this Agreement, (5) necessary in connection with a Transfer of an Interest permitted hereunder or (6) to a Member’s
respective attorneys or accountants or other representative.

 

10.2         The
Members and their Affiliates shall each act to safeguard the secrecy and confidentiality of, and any proprietary rights to, any
non-public information relating to the Company and its business, except to the extent such information is required to be disclosed
by law or reasonably necessary to be disclosed in order to carry out the business of the Company. Each Member may, from time to
time, provide the other Members written notice of its non-public information which is subject to this Section 10.2.

 

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10.3         Without
limiting any of the other terms and provisions of this Agreement (including, without limitation, Section 9.5), to the extent
a Member (the “Pursuer”) provides the other Member with information relating to a possible investment opportunity
then being actively pursued by the Pursuer on behalf of the Company, the other Member receiving such information shall not use
such information to pursue such investment opportunity for its own account to the exclusion of the Pursuer so long as the Pursuer
is actively pursuing such opportunity on behalf of the Company and shall not disclose any Confidential Information to any Person
(except as expressly permitted hereunder) or take any other action in connection therewith that is reasonably likely to cause damage
to the Pursuer.

 

Section
11.          Representations and Warranties.

 

11.1         In
General. As of the date hereof, each of the Members hereby makes each of the representations and warranties applicable to such
Member as set forth in Section 11.2. Such representations and warranties shall survive the execution of this Agreement.

 

11.2         Representations
and Warranties. Each Member hereby represents and warrants that:

 

(a)           Due
Incorporation or Formation; Authorization of Agreement. Such Member is a corporation duly organized or a partnership or limited
liability company duly formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or
formation and has the corporate, partnership or company power and authority to own its property and carry on its business as owned
and carried on at the date hereof and as contemplated hereby. Such Member is duly licensed or qualified to do business and in good
standing in each of the jurisdictions in which the failure to be so licensed or qualified would have a material adverse effect
on its financial condition or its ability to perform its obligations hereunder. Such Member has the corporate, partnership or company
power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution, delivery
and performance of this Agreement has been duly authorized by all necessary corporate, partnership or company action. This Agreement
constitutes the legal, valid and binding obligation of such Member.

 

(b)           No
Conflict with Restrictions; No Default. Neither the execution, delivery or performance of this Agreement nor the consummation
by such Member (or any of its Affiliates) of the transactions contemplated hereby (i) does or will conflict with, violate or result
in a breach of (or has conflicted with, violated or resulted in a breach of) any of the terms, conditions or provisions of any
law, regulation, order, writ, injunction, decree, determination or award of any court, any governmental department, board, agency
or instrumentality, domestic or foreign, or any arbitrator, applicable to such Member or any of its Affiliates, (ii) does or will
conflict with, violate, result in a breach of or constitute a default under (or has conflicted with, violated, resulted in a breach
of or constituted a default under) any of the terms, conditions or provisions of the articles of incorporation, bylaws, partnership
agreement or operating agreement of such Member or any of its Affiliates or of any material agreement or instrument to which such
Member or any of its Affiliates is a party or by which such Member or any of its Affiliates is or may be bound or to which any
of its properties or assets is subject, (iii) does or will conflict with, violate, result in (or has conflicted with, violated
or resulted in) a breach of, constitute (or has constituted) a default under (whether with notice or lapse of time or both), accelerate
or permit the acceleration of (or has accelerated) the performance required by, give (or has given) to others any material interests
or rights or require any consent, authorization or approval under any indenture, mortgage, lease, agreement or instrument to which
such Member or any of its Affiliates is a party or by which such Member or any of its Affiliates or any of their properties or
assets is or may be bound or (iv) does or will result (or has resulted) in the creation or imposition of any lien upon any of the
properties or assets of such Member or any of its Affiliates.

 

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(c)            Governmental
Authorizations. Any registration, declaration or filing with, or consent, approval, license, permit or other authorization
or order by, or exemption or other action of, any governmental, administrative or regulatory authority, domestic or foreign, that
was or is required in connection with the valid execution, delivery, acceptance and performance by such Member under this Agreement
or consummation by such Member (or any of its Affiliates) of any transaction contemplated hereby has been completed, made or obtained
on or before the date hereof.

 

(d)            Litigation.
Except as disclosed to the Member relying on this representation, there are no actions, suits, proceedings or investigations pending,
or, to the knowledge of such Member or any of its Affiliates, threatened against or affecting such Member or any of its Affiliates
or any of their properties, assets or businesses in any court or before or by any governmental department, board, agency or instrumentality,
domestic or foreign, or any arbitrator which could, if adversely determined (or, in the case of an investigation could lead to
any action, suit or proceeding which if adversely determined could) reasonably be expected to materially impair such Member’s
ability to perform its obligations under this Agreement or to have a material adverse effect on the consolidated financial condition
of such Member; such Member or any of its Affiliates has not received any currently effective notice of any default, and such Member
or any of its Affiliates is not in default, under any applicable order, writ, injunction, decree, permit, determination or award
of any court, any governmental department, board, agency or instrumentality, domestic or foreign, or any arbitrator which could
reasonably be expected to materially impair such Member’s (or any of its Affiliate’s) ability to perform its obligations
under this Agreement or to have a material adverse effect on the consolidated financial condition of such Member.

 

(e)            Investigation.
Such Member is acquiring its Interest based upon its own investigation, and the exercise by such Member of its rights and the performance
of its obligations under this Agreement will be based upon its own investigation, analysis and expertise. Such Member is a sophisticated
investor possessing an expertise in analyzing the benefits and risks associated with acquiring investments that are similar to
the acquisition of its Interest.

 

(f)            Broker.
No broker, agent or other person acting as such on behalf of such Member was instrumental in consummating this transaction and
no conversations or prior negotiations were had by such party with any broker, agent or other such person concerning the transaction
that is the subject of this Agreement.

 

(g)            Investment
Company Act. Neither such Member nor any of its Affiliates is, nor will the Company as a result of such Member holding an interest
therein be, an “investment company” as defined in, or subject to regulation under, the Investment Company Act of 1940,
as amended.

 

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(h)           Securities
Matters.

 

(i)          None
of the Interests are registered under the Securities Act or any state securities laws. Such Member understands that the offering,
issuance and sale of the Interests are intended to be exempt from registration under the Securities Act, based, in part, upon the
representations, warranties and agreements contained in this Agreement. Such Member is an “accredited investor” as
such term is defined in Rule 501 of Regulation D promulgated under the Securities Act.

 

(ii)         Neither
the Securities and Exchange Commission nor any state securities commission has approved the Interests or passed upon or endorsed
the merits of the offer or sale of the Interests. Such Member is acquiring the Interests solely for such Member’s own account
for investment and not with a view to resale or distribution thereof in violation of the Securities Act.

 

(iii)        Such
Member is unaware of, and is in no way relying on, any form of general solicitation or general advertising in connection with the
offer and sale of the Interests, and no Member has taken any action which could give rise to any claim by any person for brokerage
commissions, finders’ fees (without regard to any finders’ fees payable by the Company directly) or the like relating
to the transactions contemplated hereby.

 

(iv)        Such
Member is not relying on the Company or any of its officers, directors, employees, advisors or representatives with regard to the
tax and other economic considerations of an investment in the Interests, and such Member has relied on the advice of only such
Member’s advisors.

 

(v)         Such
Member understands that the Interests may not be sold, hypothecated or otherwise disposed of unless subsequently registered under
the Securities Act and applicable state securities laws, or an exemption from registration is available. Such Member agrees that
it will not attempt to sell, transfer, assign, pledge or otherwise dispose of all or any portion of the Interests in violation
of this Agreement.

 

(vi)        Such
Member has adequate means for providing for its current financial needs and anticipated future needs and possible contingencies
and emergencies and has no need for liquidity in the investment in the Interests.

 

(vii)       Such
Member has significant prior investment experience, including investment in non-listed and non-registered securities. Such Member
is knowledgeable about investment considerations and has a sufficient net worth to sustain a loss of such Member’s entire
investment in the Company in the event such a loss should occur. Such Member’s overall commitment to investments which are
not readily marketable is not excessive in view of such Member’s net worth and financial circumstances and the purchase of
the Interests will not cause such commitment to become excessive. The investment in the Interests is suitable for such Member.

 

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(viii)      Such
Member represents to the Company that the information contained in this subparagraph (h) and in all other writings, if any, furnished
to the Company with regard to such Member (to the extent such writings relate to its exemption from registration under the Securities
Act) is complete and accurate and may be relied upon by the Company in determining the availability of an exemption from registration
under federal and state securities laws in connection with the sale of the Interests.

 

Section
12.          Sale, Assignment, Transfer or other Disposition.

 

12.1         Prohibited
Transfers. Except as otherwise provided in this Section 12, Section 5.2(b), Section 14.5 or Section
14.6, as approved by the Managers, no Member shall Transfer all or any part of its Interest, whether legal or beneficial, in
the Company, and any attempt to so Transfer such Interest (and such Transfer) shall be null and void and of no effect. Notwithstanding
the foregoing, either Member shall have the right, with the consent of the other Member, at any time to pledge to a lender or creditor,
directly or indirectly, all or any part of its Interest in the Company for such purposes as it deems necessary in the ordinary
cause of its business and operations. Further, no Transfer shall be permitted and shall be void ab initio if it shall violate
any “Transfer” provision of any applicable Collateral Agreement with third party lenders.

 

12.2         Affiliate
Transfers.

 

(a)           Subject
to the provisions of Section 12.2(b) hereof, and subject in each case to the prior written approval of each Member (such approval
not to be unreasonably withheld), any Member may Transfer all or any portion of its Interest in the Company at any time to an Affiliate
of such Member, provided that such Affiliate shall remain an Affiliate of such Member at all times that such Affiliate holds such
Interest. If such Affiliate shall thereafter cease being an Affiliate of such Member while such Affiliate holds such Interest,
such cessation shall be a non-permitted Transfer and shall be deemed void ab initio, whereupon the Member having made the
Transfer shall, at its own and sole expense, cause such putative transferee to disgorge all economic benefits and otherwise indemnify
the Company and the other Member(s) against loss or damage under any Collateral Agreement. Further, no Transfer shall be permitted
and shall be void ab initio if it shall violate any “Transfer” provision of any applicable Collateral Agreement
with third party lenders.

 

(b)           Notwithstanding
anything to the contrary contained in this Agreement, the following Transfers shall not require the approval set forth in Section
12.2(a):

 

(i)          Any
Transfer by Bell or a Bell Transferee of up to one hundred percent (100%) of its Interest to any Affiliate of Bell (a “Bell
Transferee”); and

 

(ii)         Any
Transfer by Bluerock or a Bluerock Transferee of up to one hundred percent (100%) of its Interest to any Affiliate of Bluerock,
including but not limited to (A) Bluerock Enhanced Multifamily Trust, Inc. (“BR REIT”) or any Person that is
directly or indirectly owned by BR REIT; (B) Bluerock Special Opportunity + Income Fund, LLC (“BR SOIF”), or
any Person that is directly or indirectly owned by BR SOIF; (C) Bluerock Special Opportunity + Income Fund II, LLC (“BR
SOIF II”) or any Person that is directly or indirectly owned by BR SOIF II and/or (D) Bluerock Special Opportunity +
Income Fund III, LLC (“BR SOIF III”) (collectively, a “Bluerock Transferee”); provided however, as to subparagraphs (b)(i)
and (b)(ii), and as to subparagraph (a), no Transfer shall be permitted and shall be void ab initio if it shall violate
any “Transfer” provision of any applicable Collateral Agreement with third party lenders.

 

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(c)           Upon
the execution by any such Bell Transferee or Bluerock Transferee of such documents necessary to admit such party into the Company
and to cause the Bell Transferee or Bluerock Transferee (as applicable) to become bound by this Agreement, the Bell Transferee
or Bluerock Transferee (as applicable) shall become a Member, without any further action or authorization by any Member.

 

(d)          The
Transfer of any interest in any Manager and any transferee of an interest in any Manager shall be recognized and permitted under
this Agreement and by the Members, without any further action or authorization by any Member; provided, however, that no Transfer
shall be permitted and shall be void ab initio if it shall violate any “Transfer” provision of any applicable
Collateral Agreement with third party lenders.

 

12.3         Admission
of Transferee; Partial Transfers. Notwithstanding anything in this Section 12 to the contrary and except as provided
in Section 5.2(b), Section 14.5 and Section 14.6, no Transfer of Interests in the Company shall be permitted
unless the potential transferee is admitted as a Member under this Section 12.3:

 

(a)           If
a Member Transfers all or any portion of its Interest in the Company, such transferee may become a Member if (i) such transferee
executes and agrees to be bound by this Agreement, (ii) the transferor and/or transferee pays all reasonable legal and other fees
and expenses incurred by the Company in connection with such assignment and substitution and (iii) the transferor and transferee
execute such documents and deliver such certificates to the Company and the remaining Members as may be required by applicable
law or otherwise advisable; and

 

(b)         Notwithstanding
12.3(a) above, any Transfer or purported Transfer of any Interest, whether to another Member or to a third party, shall be of no
effect and void ab initio, and such transferee shall not become a Member or an owner of the purportedly transferred Interest,
if the Managers determine in their sole discretion that:

 

(i)          the
Transfer would require registration of any Interest under, or result in a violation of, any federal or state securities laws;

 

(ii)         the
Transfer would result in a termination of the Company under Code Section 708(b) (except for Transfers specifically approved
by the Managers or Affiliate Transfers pursuant to 12.2);

 

(iii)        as
a result of such Transfer the Company would be required to register as an investment company under the Investment Company Act of
1940, as amended, or any rules or regulations promulgated thereunder;

 

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(iv)        if
as a result of such Transfer the aggregate value of Interests held by “benefit plan investors” including at least one
benefit plan investor that is subject to ERISA, could be “significant” (as such terms are defined in U.S. Department
of Labor Regulation 29 C.F.R. 2510.3-101(f)(2)) with the result that the assets of the Company could be deemed to be “plan
assets” for purposes of ERISA;

 

(v)         as
a result of such Transfer, the Company would or may have in the aggregate more than one hundred (100) members and material adverse
federal income tax consequences would result to a Member. For purposes of determining the number of members under this Section
12.3(b)(v), a Beneficial Owner indirectly owning an interest in the Company through a Flow-Through Entity shall be considered
a member, but only if (i) substantially all of the value of the Beneficial Owner’s interest in the Flow-Through Entity is
attributable to the Flow-Through Entity’s interest (direct or indirect) in the Company and (ii) in the sole discretion of
the Managers, a principal purpose of the use of the Flow-Through Entity is to permit the Company to satisfy the 100-member limitation;
or

 

(vi)        the
transferor failed to comply with the provisions of Sections 12.2(a) or (b). The Managers may require the provision of a
certificate as to the legal nature and composition of a proposed transferee of an Interest of a Member and from any Member as
to its legal nature and composition and shall be entitled to rely on any such certificate in making such determinations under
this Section 12.3.

 

12.4         Withdrawals.
Each of the Members does hereby covenant and agree that it will not withdraw, resign, retire or disassociate from the Company,
except as a result of a Transfer of its entire Interest in the Company permitted under the terms of this Agreement and that it
will carry out its duties and responsibilities hereunder until the Company is terminated, liquidated and dissolved under Section
13. No Member shall be entitled to receive any distribution or otherwise receive the fair market value of its Interest in compensation
for any purported resignation or withdrawal not in accordance with the terms of this Agreement.

 

Section
13          Dissolution.

 

13.1         Limitations.
The Company may be dissolved, liquidated and terminated only pursuant to the provisions of this Section 13, and, to the
fullest extent permitted by law but subject to the terms of this Agreement, the parties hereto do hereby irrevocably waive any
and all other rights they may have to cause a dissolution of the Company or a sale or partition of any or all of the Company’s
assets.

 

13.2         Exclusive
Events Requiring Dissolution. The Company shall be dissolved only upon the earliest to occur of the following events (a “Dissolution
Event”):

 

(a)            the
expiration of the specific term set forth in Section 2.5;

 

(b)            in
the event the conditions set forth in Section 4 are not fulfilled;

 

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(c)           at
any time at the election of the Managers in writing;

 

(d)           at
any time there are no Members (unless otherwise continued in accordance with the Act); or

 

(e)           the
entry of a decree of judicial dissolution pursuant to Section 18-802 of the Act.

 

13.3         Liquidation.
Upon the occurrence of a Dissolution Event, the business of the Company shall be continued to the extent necessary to allow an
orderly winding up of its affairs, including the liquidation of the assets of the Company pursuant to the provisions of this Section
13.3, as promptly as practicable thereafter, and each of the following shall be accomplished:

 

(a)            The
Managers shall cause to be prepared a statement setting forth the assets and liabilities of the Company as of the date of dissolution,
a copy of which statement shall be furnished to all of the Members.

 

(b)           The
property and assets of the Company shall be liquidated or distributed in kind under the supervision of the Managers as promptly
as possible, but in an orderly, businesslike and commercially reasonable manner.

 

(c)           Any
gain or loss realized by the Company upon the sale of its property shall be deemed recognized and allocated to the Members in the
manner set forth in Section 7.2. To the extent that an asset is to be distributed in kind, such asset shall be deemed to
have been sold at its fair market value on the date of distribution, the gain or loss deemed realized upon such deemed sale shall
be allocated in accordance with Section 7.2 and the amount of the distribution shall be considered to be such fair market
value of the asset. Notwithstanding the foregoing and unless all of the Members otherwise agree, no Member may be compelled to
accept from the Company a distribution of any asset in kind unless each Member receives at the same time a distribution of any
interest in the property distributed that is proportionate to such Member’s Percentage Interest.

 

(d)          The
proceeds of sale and all other assets of the Company shall be applied and distributed as follows and in the following order of
priority:

 

(i)          to
the satisfaction of the debts and liabilities of the Company (contingent or otherwise) and the expenses of liquidation or distribution
(whether by payment or reasonable provision for payment), other than liabilities to Members or former Members for distributions;

 

(ii)         to
the satisfaction of loans made pursuant to Section 5.2(b) in proportion to the outstanding balances of such loans at the
time of payment;

 

(iii)        the
balance, if any, to the Members in accordance with Sections 6.2.

 

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13.4         Continuation
of the Company. Notwithstanding anything to the contrary contained herein, the death, retirement, resignation, expulsion, bankruptcy,
dissolution or removal of a Member shall not in and of itself cause the dissolution of the Company, and the Members are expressly
authorized to continue the business of the Company in such event, without any further action on the part of the Members.

 

Section
14.          Indemnification.

 

14.1         Exculpation
of Members, Managers and Their Representatives. No Member or Manager shall be liable to the Company or to the other Members
for damages or otherwise with respect to any actions or failures to act taken or not taken relating to the Company, except to the
extent any related loss results from fraud, gross negligence or willful or wanton misconduct on the part of such Member or Manager.
For purposes of this Section 14, officers, directors, employees, agents, appointees and other representatives of the Member
or of the Manager, or of their respective Affiliates, who are functioning on behalf of such Member or Manager in connection with
this Agreement (collectively, “Representatives”) shall receive the same benefits of exculpation from liability
and of indemnification, as provided to Members and Managers as set forth herein.

 

14.2         Indemnification
by Company. The Company hereby indemnifies, holds harmless and defends the Members, the Managers and the Representatives (each,
an “Indemnitee”) from and against any loss, expense, damage or injury suffered or sustained by them (including
but not limited to any judgment, award, settlement, reasonable attorneys’ fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim) by reason of or arising out of (a)(i) their activities
on behalf of the Company or in furtherance of the interests of the Company, including, without limitation, the provision of guaranties
to third party lenders in respect of financings relating to the Company or any of its assets (but specifically excluding from such
indemnity by the Company any liability under Non-Recourse Carveout Guaranties triggered as a result of such Indemnitee’s
breach thereof), (ii) their status as Members, Managers or Representatives of the Company, or (iii) the Company’s assets,
property, business or affairs (including, without limitation, the actions of any officer, director, member or employee of the Company
or any of its Subsidiaries), if (b) the Indemnitee’s acts or omissions were not performed or omitted fraudulently or as a
result of gross negligence or willful or wanton misconduct. Reasonable expenses incurred by the Indemnitee in connection with any
such proceeding relating to the foregoing matters shall be paid or reimbursed by the Company in advance of the final disposition
of such proceeding upon receipt by the Company of (x) written affirmation by the Person requesting indemnification of its good
faith belief that it has met the standard of conduct necessary for indemnification by the Company and (y) a written undertaking
by or on behalf of such Person to repay such amount if it shall ultimately be determined by a court of competent jurisdiction that
such Person has not met such standard of conduct, which undertaking shall be an unlimited general obligation of the indemnified
party but need not be secured.

 

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14.3         Indemnification
by Members for Misconduct.

 

(a)           Bell
hereby indemnifies, defends and holds harmless the Company, Bluerock, each Bluerock Transferee and each of their subsidiaries and
their officers, directors, members, partners, shareholders, employees, agents and appointees from and against all losses, costs,
expenses, damages, claims and liabilities (including reasonable attorneys’ fees) as a result of or arising out of any fraud,
gross negligence or willful or wanton misconduct on the part of, or by, Bell.

 

(b)           Bluerock
hereby indemnifies, defends and holds harmless the Company, Bell, each Bell Transferee and each of their subsidiaries and their
officers, directors, members, partners, shareholders, employees, agents and appointees from and against all losses, costs, expenses,
damages, claims and liabilities (including reasonable attorneys’ fees) as a result of or arising out of any fraud, gross
negligence or willful or wanton misconduct on the part of, or by, Bluerock.

 

14.4         General
Indemnification by the Members.

 

(a)            Notwithstanding
any other provision contained herein, each Member (the “Indemnifying Party”) hereby indemnifies and holds harmless
the other Members, the Company and each of their subsidiaries and their officers, directors, members, partners, shareholders, employees,
agents and appointees (each, an “Indemnified Party”) from and against all losses, costs, expenses, damages,
claims and liabilities (including reasonable attorneys’ fees) as a result of or arising out of (i) any breach of any obligation
of the Indemnifying Party under this Agreement, or (ii) any breach of any obligation by or any inaccuracy in or breach of any representation
or warranty made by the Indemnifying Party or its Affiliates, whether in this Agreement, a Collateral Agreement or in any other
agreement with respect to the conveyance, assignment, contribution or other transfer of the Property (or interests therein), assets,
agreements, rights or other interests conveyed, assigned, contributed or otherwise transferred to the Company (collectively, the
“Inducement Agreements”).

 

(b)           Except
as otherwise provided herein or in any other agreement (including but not limited to the Backstop Agreement), recourse for the
indemnity obligation of the Members under this Section 14.4 shall be limited to such Indemnifying Party’s Interest
in the Company.

 

(c)            The
indemnities, contributions and other obligations under this Agreement shall be in addition to any rights that any Indemnified Party
may have at law, in equity or otherwise. The terms of this Section 14 shall survive termination of this Agreement.

 

14.5         Pledge
of Bell Interest.

 

(a)            As
security for the indemnity obligations of Bell under Sections 14.3(a) and 14.4(a) (the “Bell Inducement
Obligation”), Bluerock may require that Bell execute and deliver to Bluerock a certain Pledge Agreement (the “Bell
Pledge Agreement”) and related documents pursuant to which Bell grants to Bluerock a lien upon and a continuing interest
in Bell’s Interest in the Company including all payments due or to become due to Bell hereunder from and after the entry
of a judgment described in Section 14.5(c) and such other rights pledged under the Pledge Agreement (collectively, the “Bell
Indemnity Collateral”). Any Transfer by Bell of its Interest shall be subject to the lien and security interest granted
hereby until and unless such lien and security interest are released by Bluerock.

 

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(b)           At
the request of Bluerock, Bell shall prepare and file UCC financing statements and such other documents and take such other action
necessary to grant to Bluerock a fully perfected first priority security interest in all of Bell’s Interest in the Company.
Each Indemnified Party shall have all of the rights now or hereafter existing under applicable law, and all rights as a secured
creditor under the Uniform Commercial Code in all relevant jurisdictions, with respect to the Indemnity Collateral, and Bell agrees
to take all such actions as may be reasonably requested of it by an Indemnified Party to ensure that the Indemnified Parties can
realize on such security interest.

 

(c)            In
the event an Indemnified Party obtains a judgment on account of an Inducement Obligation, then Bluerock shall, to the fullest extent
permitted by law, be deemed, without payment of further consideration or the taking of further action by Bell or any of its Subsidiaries,
to have acquired from Bell such portion of the Indemnity Collateral as shall be equal in value to the amount of the judgment; provided,
at the request of Bluerock, Bell shall execute and deliver to Bluerock an amendment to this Agreement to reflect the change in
the Interests and Percentage Interests of the Members.

 

(d)           The
rights provided in this Section 14.5 shall not be available to any Member and shall be unenforceable to the extent that
the exercise of rights and attendant Transfer of Interest violate any applicable Collateral Agreement, and any such Transfer, if
made, shall be void ab initio.

 

14.6         Pledge
of Bluerock Interest.

 

(a)           As
security for the indemnity obligations of Bluerock under Sections 14.3(b) and 14.4(a) (the “Bluerock Inducement
Obligation”), Bell may require that Bluerock execute and deliver to Bell a certain Pledge Agreement (the “Bluerock
Pledge Agreement”) and related documents pursuant to which Bluerock grants to Bell a lien upon and a continuing interest
in Bluerock’s Interest in the Company including all payments due or to become due to Bluerock hereunder from and after the
entry of a judgment described in Section 14.6(c) and such other rights pledged under the Pledge Agreement (collectively,
the “Bluerock Indemnity Collateral”). Any Transfer by Bluerock of its Interest shall be subject to the lien
and security interest granted hereby until and unless such lien and security interest are released by Bell.

 

(b)           At
the request of Bell, Bluerock shall prepare and file UCC financing statements and such other documents and take such other action
necessary to grant to Bell a fully perfected first priority security interest in all of Bluerock’s Interest in the Company.
Each Indemnified Party shall have all of the rights now or hereafter existing under applicable law, and all rights as a secured
creditor under the Uniform Commercial Code in all relevant jurisdictions, with respect to the Indemnity Collateral, and Bluerock
agrees to take all such actions as may be reasonably requested of it by an Indemnified Party to ensure that the Indemnified Parties
can realize on such security interest.

 

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(c)           In
the event an Indemnified Party obtains a judgment on account of an Inducement Obligation, then Bell shall, to the fullest extent
permitted by law, be deemed, without payment of further consideration or the taking of further action by Bluerock or any of its
Subsidiaries, to have acquired from Bluerock such portion of the Indemnity Collateral as shall be equal in value to the amount
of the judgment; provided, at the request of Bell, Bluerock shall execute and deliver to Bell an amendment to this Agreement to
reflect the change in the Interests and Percentage Interests of the Members.

 

(d)           The
rights provided in this Section 14.6 shall not be available to any Member and shall be unenforceable to the extent that
the exercise of rights and attendant Transfer of Interest violate any applicable Collateral Agreement, and any such Transfer, if
made, shall be void ab initio.

 

Section 15.          Sale
Rights

 

15.1         Push
/ Pull Rights.

 

(a)           Availability
of Rights. At any time that the Managers are unable to agree on a Major Decision and such failure to agree has continued for
fifteen (15) days after written notice from one Member to the other Member indicating an intention to exercise rights under this
Section 15.1, either Member has the right to initiate the provisions of this Section 15.1. Further, at any time that
the Managers are unable to agree on a decision to terminate the Management Agreement pursuant to its terms, and such failure to
agree has continued for fifteen (15) days after written notice from Bluerock to Bell, Bluerock, and only Bluerock, has the right
to initiate the provisions of this Section 15.1. The rights provided in this Section 15.1 shall not be available
to any Member and shall be unenforceable to the extent that the exercise of rights and attendant Transfer of Interest violate any
applicable Collateral Agreement, and any such Transfer, if made, shall be void ab initio.

 

(b)           Exercise.
The Member wishing to exercise its rights pursuant to this Section 15.1 (the “Offeror”) shall do so by
giving notice to the other Member (the “Offeree”) setting forth a statement of intent to invoke its rights under
this Section 15.1, stating therein the aggregate dollar amount (the “Valuation Amount”) that the Offeror
would be willing to pay for the assets of the Company as of the Closing Date (as defined below) free and clear of all liabilities,
and setting forth all oral or written offers and inquiries received by the Offeror during the previous twelve-month period relating
to the financing, disposition or leasing of any Company property (including proposals for the formation of a new entity for the
ownership and operation of the Property).

 

(c)           Offeree
Response. After receipt of such notice, the Offeree shall elect to either (i) sell its entire Interest to the Offeror for an
amount equal to the amount the Offeree would have been entitled to receive if the Company had sold its assets for the Valuation
Amount on the Closing Date and the Company had immediately paid all Company liabilities and Imputed Closing Costs and distributed
the net proceeds of sale to the Members in satisfaction of their Interests pursuant to Section 13.3, or (ii) purchase the
entire Interest of the Offeror for an amount equal to the amount the Offeror would have been entitled to receive if the Company
had sold all of its assets for the Valuation Amount on the Closing Date and the Company had immediately paid all Company liabilities
and Imputed Closing Costs and distributed the net proceeds of the sale to the Members in satisfaction of their Interests pursuant
to Section 13.3. The Offeree shall have thirty (30) days from the giving of the Offeror’s notice in which to exercise
either of its options by giving written notice to the Offeror. If the Offeree does not elect to acquire the Offeror’s Interest
within such time period, the Offeree shall be deemed to have elected to sell its Interest to the Offeror as provided in subsection
(i) above.

 

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(d)           Earnest
Money. Within five (5) business days after an election has been made or deemed made under Section 15.1(c), the acquiring
Member shall deposit with a mutually acceptable third-party escrow agent a non-refundable earnest money deposit in the amount
of five percent (5%) of the amount the selling Member is entitled to receive for its Interest under this Section 15.1,
which amount shall be applied to the purchase price at closing. If the acquiring Member should thereafter fail to consummate the
transaction for any reason other than a default by the selling Member or a refusal by any lender
of the Company who has a right under its loan documents to consent to such transfer to so consent, (i) (A) the earnest
money deposit shall be distributed from escrow to the selling Member, free of all claims of the acquiring Member, as liquidated
damages and constituting the sole and exclusive remedy available to the selling Member because of a default by the acquiring Member
or (B) the selling Member may, by delivering to the acquiring Member written notice thereof, elect to buy the acquiring Member’s
entire Interest for an amount equal to the amount the acquiring Member would have been entitled to receive if the Company had
sold all of its assets for the Valuation Amount and the Company had immediately paid all Company liabilities and Imputed Closing
Costs and distributed the net proceeds of the sale to the Members in satisfaction of their Interests pursuant to Section 13.3,
in which case, the Closing Date therefor shall be the date specified in the selling Member’s notice, and (ii) if the acquiring
Member was the Offeror, the non-refundable earnest money deposit for any future election by the acquiring Member to buy the selling
Member’s Interest shall be twenty percent (20%) of the amount the selling Member is entitled to receive for its Interest
in connection with such future election.

 

(e)           Closing.
The closing of an acquisition pursuant to this Section 15.1 shall be held at the principal place of business of the Company
on a mutually acceptable date (the “Closing Date”) not later than sixty (60) days (or, if the Offeree is the
acquiring Member, ninety (90) days) after an election has been made or deemed made under Section 15.1(c). As a precondition
to the closing, (A) the acquiring Member shall work in good faith with the selling Member to remove completely the selling Member
or any Affiliate of the selling Member that is a party to any Non-Recourse Carveout Guaranty (a “Selling Member Carveout
Guarantor”) from that Non-Recourse Carveout Guaranty contemporaneously with the closing, including by means of substituting
a replacement for the Selling Member Carveout Guarantor and (B) to the extent that the acquiring Member and selling Member are
not able to remove the Selling Member Carveout Guarantor completely from the Non-Recourse Carveout Guaranty contemporaneously with
the closing, the acquiring Member or an affiliate of the acquiring Member (in either case whose financial strength and creditworthiness
shall be reasonably acceptable to the Selling Member Carveout Guarantor) shall provide an indemnity to the Selling Member Carveout
Guarantor commensurate with the Selling Member Carveout Guarantor’s remaining exposure under the Non-Recourse Carveout Guaranty
for liabilities and losses that are the result of the acts or omissions of the acquiring Member or any Affiliates of the Acquiring
Member; provided, however, that in any event, the Selling Member Carveout Guarantor shall remain liable for any liabilities or
losses arising under the Non-Recourse Carveout Guaranty for acts or omissions prior to the closing other than those liabilities
or losses caused by the acts or omissions of the acquiring Member or its Affiliates (“Prior Acts”), and if the
Selling Member Carveout Guarantor is removed from the Non-Recourse Carveout Guaranty with respect to Prior Acts, then the Selling
Member Carveout Guarantor shall execute a backstop indemnity agreement acceptable to the acquiring Member and any Affiliate of
the acquiring Member that is a party to the Non-Recourse Carveout Guaranty (the “Acquiring Indemnitees”) indemnifying
each of the Acquiring Indemnitees from liabilities and losses arising from Prior Acts.

 

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At such closing,
the following shall occur:

 

(i)          The
selling Member shall assign to the acquiring Member or its designee the selling Member’s Interest in accordance with the
instructions of the acquiring Member, and shall execute and deliver to the acquiring Member all documents which may be required
to give effect to the disposition and acquisition of such interests, in each case free and clear of all liens, claims, and encumbrances,
with covenants of general warranty; and

 

(ii)         The
acquiring Member shall pay to the selling Member the consideration therefor in cash.

 

(f)            Enforcement.
It is expressly agreed that the remedy at law for breach of the obligations of the Members set forth in this Section 15.1
is inadequate in view of (i) the complexities and uncertainties in measuring the actual damage to be sustained by reason of the
failure of a Member to comply fully with such obligations, and (ii) the uniqueness of the Company’s business and the Members’
relationships. Accordingly and except as provided in Section 15.1(a), each of such obligations shall be, and is hereby expressly
made, enforceable by an order of specific performance.

 

15.2         Forced
Sale Rights.

 

(a)           Offers.
If, at any time following the third anniversary of the date that the Property is acquired by the Company, (i) either Member desires
to offer the Property for sale on specified terms, or (ii) receives from an unaffiliated purchaser a bona fide written
cash offer (i.e., not seller financed) for the purchase of such Property on terms that such Member desires for the Company, or
the Subsidiaries that own such Property (individually or collectively, the “Ownership Entity”) to accept (such
specified terms or bona fide offer being herein called the “Offer”), then the Member desiring
to make or accept the Offer (the “Initiating Member”) shall provide written notice of the terms of such Offer
(the “Sale Notice”) to the other Member (the “Non-Initiating Member”). Any offer must be
in an amount at least equal to the amount of any indebtedness secured by such Property plus the aggregate unreturned investment
amount of such Member.

 

(b)           Response.
The Non-Initiating Member shall have thirty (30) days from the date of the Sale Notice (the “Response Period”)
to provide written notice to the Initiating Member of whether the Ownership Entity should make or accept the Offer; the failure
to timely deliver such notice shall be deemed to constitute an election to accept the Offer and sell such Property on the terms
of the Offer.

 

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(c)           Offer
Unacceptable. If the Non-Initiating Member does not wish for the Company, or the Ownership Entity, to make or accept the Offer,
the Initiating Member may elect to sell its Interest to the Non-Initiating Member, in which case the Non-Initiating Member must
purchase the Initiating Member’s Interest for an amount equal to the amount that would be distributable to the Initiating
Member if the Company had accepted the Offer, closed the sale pursuant to such Offer and wound up its affairs pursuant to Section
13.

 

For purposes of the
foregoing calculations, the purchase price for a sale shall be reduced by Imputed Closing Costs therefor. The Initiating Member
must exercise this option, if at all, by delivering written notice thereof to the Non-Initiating Member within twenty (20) days
after the end of the Response Period. The Non-Initiating Member shall pay the Company cash for each Ownership Entity or the Initiating
Member cash for its Interest, as the case may be. Closing shall take place on or before the date specified in the Sale Notice,
but if the Non-Initiating Member is purchasing the Initiating Member’s Interest or one or more Ownership Entities, the Non-Initiating
Member shall have until 120 days after the Sale Notice in which to close. If the Initiating Member or the Non-Initiating Member
defaults at closing, the non-defaulting party shall have the right to bring suit for damages, for specific performance, or exercise
any other remedy available at law or in equity. Upon payment at closing, the Initiating Member shall execute and deliver all documents
reasonably required to transfer the interest being sold. As a precondition to the closing, (A) the Non-Initiating Member shall
work in good faith with the Initiating Member to remove completely the Initiating Member and any Affiliate of the Initiating Member
that is a party to any Non-Recourse Carveout Guaranty (an “Initiating Member Carveout Guarantor”) from that
Non-Recourse Carveout Guaranty contemporaneously with the closing, including by means of substituting a replacement for the Initiating
Member Carveout Guarantor and (B) to the extent that the Non-Initiating Member and Initiating Member are not able to remove the
Initiating Member Carveout Guarantor completely from the Non-Recourse Carveout Guaranty contemporaneously with the closing, the
Non-Initiating Member or an Affiliate of the Non-Initiating Member (in either case whose financial strength and creditworthiness
shall be reasonably acceptable to the Initiating Member Carveout Guarantor) shall provide an indemnity to the Initiating Member
Carveout Guarantor commensurate with the Initiating Member Carveout Guarantor’s remaining exposure under the Non-Recourse
Carveout Guaranty for liabilities and losses that are the result of the acts or omissions of the Non-Initiating Member or any Affiliates
of the Non-Initiating Member; provided, however, that in any event, the Initiating Member Carveout Guarantor shall remain liable
for any liabilities or losses arising under the Non-Recourse Carveout Guaranty for acts or omissions prior to the closing other
than those liabilities or losses caused by the acts or omissions of the non-Initiating Member or its Affiliates (“Prior
Acts”), and if the Initiating Member Carveout Guarantor is removed from the Non-Recourse Carveout Guaranty with respect
to Prior Acts, then the Initiating Member Carveout Guarantor shall execute a backstop indemnity agreement acceptable to the Non-Initiating
Member and any Affiliate of the Non-Initiating Member that is a party to the Non-Recourse Carveout Guaranty (the “Non-Initiating
Indemnitees”) indemnifying each of the Non-Initiating Indemnitees from liabilities and losses arising from Prior Acts.

 

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(d)           Offer
Acceptable. If the Non-Initiating Member consents (or is deemed to have consented) to the Company or the Ownership Entities
selling the Property on the terms of the Offer, then the Initiating Member shall be allowed to sell such Property for cash on the
terms of the Offer for a period of up to one hundred eighty (180) days following the expiration of the Response Period. If the
Initiating Member obtains a bona fide third party contract to sell any such Property on the terms of the offer within
such one hundred eighty (180) day period, the Initiating Member shall have an additional period of ninety (90) days after the date
of such contract (that is, not to exceed 270 days after the expiration of the Response Period) in which to consummate the sale.
If after having received the consent (or deemed consent) of the Non-Initiating Member to the sale of such Property on the terms
of the Offer, the Initiating Member is unable to obtain a bona fide contract within such one hundred eighty (180)
day period, or if after having obtained such bona fide contract, the Initiating Member is unable to consummate such
sale within 270 days after the expiration of the Response Period, then the Initiating Member must again submit an Offer to the
Non-Initiating Member under the terms of this Section 15.2 before it may sell such Property.

 

(e)            The
rights provided in this Section 15.2 shall not be available to any Member and shall be unenforceable to the extent that
the exercise of rights and attendant Transfer of Interest or sale of the Property violate any applicable Collateral Agreement with
third party lenders, and any such Transfer or sale, if made, shall be void ab initio.

 

15.3         Buy
Sell in the event of a Pre-Closing Default. In the event of either a Bell Pre-Closing Default or a Bluerock Pre-Closing Default
then the non-defaulting party may elect to acquire the entire Membership Interest of the defaulting party (including its rights
with respect to any initial Capital Contribution made by such defaulting party) for the sum of One Dollar ($1) in lieu of any other
remedy for such default, including the rights set forth under Section 5.1 (a) hereof. Such election must be made in writing and
delivered to the defaulting party within ten (10) business days after the non-defaulting party learns of the Pre-Closing Default.
The Closing of an acquisition pursuant to this Section 15.3 shall be held in accordance with the provisions of Section 15.1(e).

 

Section
16.          Mediation of Disputes.

 

16.1         Events
Giving Rise To Mediation. In the event that there is a dispute between the Managers as to any action or issue, then and in
such event all of the Managers agree, upon the written request of any one Manager, to submit to mediation within ten (10) days
of receipt of the request for mediation for the purpose of resolving the dispute.

 

    	-42-

    	 

    

  

16.2         Selection
of Mediator. Within ten (10) days of the date upon which the written request is sent pursuant to Section 16.1, the Managers
shall meet for the purpose of selecting one (1) natural person to act as mediator for the Company for such dispute. In the event
that the Managers are unable to agree upon the selection of the mediator at such meeting, then within ten (10) days following such
meeting, the Manager requesting such mediation shall select one (1) qualified mediator and the remaining Manager shall select one
(1) qualified mediator and, within five (5) days of the date of their selection, the two persons so selected shall select a third
qualified mediator who will serve as the sole mediator for the dispute. In the event that the Manager requesting such mediation
selects one such natural person within such ten (10) day period, but the remaining Manager fails to select one such natural person
within such ten (10) day period, or vice versa, then the natural person selected shall serve as the sole mediator for the dispute.
No natural person selected by the Managers and/or by the mediators may be employed by, doing substantial business with or otherwise
affiliated with any of the Managers (including, but not limited to, acting as an attorney or accountant for any one or more of
the Managers or for the Company). The term “qualified mediator” as used herein shall mean a natural person experienced
in mediating disputes between businesses similar to the business in which the Company is engaged.

 

16.3         Mediation.
Not later than fifteen (15) days following the selection of the sole mediator, the mediation shall be convened by the mediator
at a mutually agreeable site. Such mediation shall take place in accordance with the Rules of the American Arbitration Association
as in effect on the date of commencement of the mediation. The mediator’s only authority hereunder shall be to assist the
Managers in mediating a dispute. The mediator’s fees shall be paid by the Company. If the mediation is unsuccessful, then
the Managers shall have such rights and remedies as may be provided at law or in equity. Nothing in this Section 16 shall
require the parties to submit to arbitration.

 

Section
17          Miscellaneous.

 

17.1         Notices.

 

(a)           All
notices, requests, approvals, authorizations, consents and other communications required or permitted under this Agreement shall
be in writing and shall be (as elected by the Person giving such notice) hand delivered by messenger or overnight courier service,
mailed (airmail, if international) by registered or certified mail (postage prepaid), return receipt requested, or sent via facsimile
(provided such facsimile is immediately followed by the delivery of an original copy of same via one of the other foregoing delivery
methods) addressed to:

 

If to Bluerock:

 

c/o Bluerock Real Estate, L.L.C.

70 East 55th Street, 9th Floor

New York, New York 10022

Attention: R. Ramin Kamfar

 

with a copy to:

c/o Bluerock Real Estate, L.L.C.

70 East 55th Street, 9th Floor

New York, New York 10022

Attention: Michael Konig, Esq.

 

    	-43-

    	 

    

  

If to Bell:

 

c/o Bell Partners Inc.

300 North Greene Street, Suite
1000

Greensboro, NC 27401

Attention: E. Durant Bell

Facsimile: 336-232-1901

Telephone: 336-232-1900

 

with a copy to:

 

Barbara R. Christy, Esq. and Thomas
Hockman, Esq.

Schell Bray Aycock Abel & Livingston
PLLC

1500 Renaissance Plaza, 230 North
Elm Street

Greensboro, North Carolina 27401

Facsimile: 336-370-8830

Telephone: 336-370-8800

 

(b)           Each
such notice shall be deemed delivered (a) on the date delivered if by hand delivery or overnight courier service or facsimile,
and (b) on the date upon which the return receipt is signed or delivery is refused or the notice is designated by the postal authorities
as not deliverable, as the case may be, if mailed (provided, however, if such actual delivery occurs after 5:00 p.m. (local time
where received), then such notice or demand shall be deemed delivered on the immediately following business day after the actual
day of delivery).

 

(c)           By
giving to the other parties at least fifteen (15) days written notice thereof, the parties hereto and their respective successors
and assigns shall have the right from time to time and at any time during the term of this Agreement to change their respective
addresses.

 

17.2         Governing
Law. This Agreement and the rights of the Members hereunder shall be governed by, and interpreted in accordance with, the laws
of the State of Delaware. Each of the parties hereto irrevocably submits to the jurisdiction of the New York State courts and the
Federal courts sitting in the State of New York and agree that all matters involving this Agreement shall be heard and determined
in such courts. Each of the parties hereto waives irrevocably the defense of inconvenient forum to the maintenance of such action
or proceeding. Each of the parties hereto designates CT Corporation System, 1633 Broadway, New York, New York 10019, as its agent
for service of process in the State of New York, which designation may only be changed on not less than ten (10) days’ prior
notice to all of the other parties.

 

17.3         Successors.
This Agreement shall be binding upon, and inure to the benefit of, the parties and their successors and permitted assigns. Except
as otherwise provided herein, any Member who Transfers its Interest as permitted by the terms of this Agreement shall have no further
liability or obligation hereunder, except with respect to claims arising prior to such Transfer.

 

    	-44-

    	 

    

  

17.4         Pronouns.
Whenever from the context it appears appropriate, each term stated in either the singular or the plural shall include the singular
and the plural, and pronouns stated in either the masculine, the feminine or the neuter gender shall include the masculine, feminine
and neuter.

 

17.5         Table
of Contents and Captions Not Part of Agreement. The table of contents and captions contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit or extend the scope or intent of this Agreement or any provisions hereof.

 

17.6         Severability.
If any provision of this Agreement shall be held invalid, illegal or unenforceable in any jurisdiction or in any respect,
then the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired, and the Members shall use their best efforts to amend or substitute such invalid, illegal or unenforceable provision
with enforceable and valid provisions which would produce as nearly as possible the rights and obligations previously intended
by the Members without renegotiation of any material terms and conditions stipulated herein.

 

17.7         Counterparts.
This Agreement may be executed in several counterparts, each of which shall be deemed an original but all of which shall constitute
one and the same instrument.

 

17.8         Entire
Agreement and Amendment. This Agreement and the other written agreements described herein between the parties hereto entered
into as of the date hereof, constitute the entire agreement between the Members relating to the subject matter hereof. In the event
of any conflict between this Agreement or such other written agreements, the terms and provisions of this Agreement shall govern
and control. Amendment of this Agreement requires the unanimous written consent of the Members. No amendment or waiver by Bluerock
shall be enforceable against Bluerock unless it is in writing and duly executed by Bluerock.

 

17.9         Further
Assurances. Each Member agrees to execute and deliver any and all additional instruments and documents and do any and all acts
and things as may be necessary or expedient to effectuate more fully this Agreement or any provisions hereof or to carry on the
business contemplated hereunder.

 

17.10        No
Third Party Rights. The provisions of this Agreement are for the exclusive benefit of the Members and the Company, and no other
party (including, without limitation, any creditor of the Company) shall have any right or claim against any Member by reason of
those provisions or be entitled to enforce any of those provisions against any Member, except that the Bluerock Managers shall
be third party beneficiaries, and have standing to enforce, the provisions of Section 9.1(e) as to benefits provided thereunder
to them.

 

    	-45-

    	 

    

  

17.11        Incorporation
by Reference. Every Exhibit and Annex attached to this Agreement is incorporated in this Agreement by reference.

 

17.12        Limitation
on Liability. Except as set forth in Section 14 and with respect to a Default Loan as set forth in Section 5.2(b),
the Members shall not be bound by, or be personally liable for, by reason of being a Member, a judgment, decree or order of a court
or in any other manner, for the expenses, liabilities or obligations of the Company, and the liability of each Member shall be
limited solely to the amount of its Capital Contributions as provided under Section 5. Except as set forth in Sections
14.3(a) and (b) and 14.4(a) and (b) and with respect to a Default Loan as set forth in Section 5.2(b), any claim against
any Member (the “Member in Question”) which may arise under this Agreement shall be made only against, and shall
be limited to, such Member in Question’s Interest, the proceeds of the sale by the Member in Question of such Interest or
the undivided interest in the assets of the Company distributed to the Member in Question pursuant to Section 13.3(d) hereof.
Except as set forth in Sections 14.3(a) and (b) and 14.4(a) and (b) and with respect to a Default Loan as set forth in Section
5.2(b), any right to proceed against (i) any other assets of the Member in Question or (ii) any agent, officer, director, member,
partner, shareholder or employee of the Member in Question or the assets of any such Person, as a result of such a claim against
the Member in Question arising under this Agreement or otherwise, is hereby irrevocably and unconditionally waived.

 

17.13        Remedies
Cumulative. The rights and remedies given in this Agreement and by law to a Member shall be deemed cumulative, and the exercise
of one of such remedies shall not operate to bar the exercise of any other rights and remedies reserved to a Member under the provisions
of this Agreement or given to a Member by law. In the event of any dispute between the parties hereto, the prevailing party shall
be entitled to recover from the other party reasonable attorney’s fees and costs incurred in connection therewith.

 

17.14        No
Waiver. One or more waivers of the breach of any provision of this Agreement by any Member shall not be construed as a waiver
of a subsequent breach of the same or any other provision, nor shall any delay or omission by a Member to seek a remedy for any
breach of this Agreement or to exercise the rights accruing to a Member by reason of such breach be deemed a waiver by a Member
of its remedies and rights with respect to such breach.

 

17.15        Limitation
On Use of Names. Notwithstanding anything contained in this Agreement or otherwise to the contrary, each of Bluerock and Bell
as to itself agree that neither it nor any of its Affiliates, agents, or representatives is granted a license to use or shall use
the name of the other under any circumstances whatsoever, except such name may be used in furtherance of the business of the Company
but only as and to the extent unanimously approved by the Members. Any change in the Name of the Property must be approved by Managers.

 

17.16        Publicly
Traded Partnership Provision. Each Member hereby severally covenants and agrees with the other Members for the benefit of such
Members, that (i) it is not currently making a market in Interests in the Company and will not in the future make such a market
and (ii) it will not Transfer its Interest on an established securities market, a secondary market or an over-the-counter market
or the substantial equivalent thereof within the meaning of Code Section 7704 and the Regulations, rulings and other pronouncements
of the U.S. Internal Revenue Service or the Department of the Treasury thereunder. Each Member further agrees that it will not
assign any Interest in the Company to any assignee unless such assignee agrees to be bound by this Section and to assign
such Interest only to such Persons who agree to be similarly bound.

 

    	-46-

    	 

    

  

17.17       Uniform
Commercial Code. The interest of each Member in the Company shall be an “uncertificated security” governed by Article
8 of the Delaware UCC and the UCC as enacted in the State of New York (the “New York UCC”), including, without
limitation, (i) for purposes of the definition of a “security” thereunder, the interest of each Member in the Company
shall be a security governed by Article 8 of the Delaware UCC and the New York UCC and (ii) for purposes of the definition of an
“uncertificated security” thereunder.

 

17.18       Public
Announcements. Neither Bell nor any of its Affiliates shall, without the prior approval of Bluerock, issue any press releases
or otherwise make any public statements with respect to the Company or the transactions contemplated by this Agreement, except
as may be required by applicable law or regulation or by obligations pursuant to any listing agreement with any national securities
exchange so long as Bell or such Affiliate has used reasonable efforts to obtain the approval of Bluerock prior to issuing such
press release or making such public disclosure.

 

17.19       No
Construction Against Drafter. This Agreement has been negotiated and prepared by Bluerock and Bell and their respective attorneys
and, should any provision of this Agreement require judicial interpretation, the court interpreting or construing such provision
shall not apply the rule of construction that a document is to be construed more strictly against one party.

 

    	-47-

    	 

    

  

IN WITNESS WHEREOF, this
Agreement is executed by the Members, effective as of the date first set forth above.

 

	 	BR WATERFORD JV MEMBER, LLC, a

Delaware limited liability company
	 	 	 
	 	By:	Bluerock Special Opportunity + Income Fund, LLC, a co-manager

 

	 	By:	Bluerock Real Estate, L.L.C., a

Delaware limited liability company, its

manager

 

	 	By:	/s/ Jordan Ruddy	 
	 	 	Name:	Jordan Ruddy	 
	 	 	Title:	President	 

 

	 	By:	Bluerock Special Opportunity + Income Fund II, LLC, a co-manager

 

	 	By:	BR SOIF II Manager, LLC, a

Delaware limited liability company, its

manager

 

	 	By:	/s/ Jordan Ruddy	 
	 	 	Name:	Jordan Ruddy	 
	 	 	Title:	President	 

 

(signatures continued on following
page)

 

    	-48-

    	 

    

  

	 	BELL HNW NASHVILLE PORTFOLIO, LLC, a North Carolina limited liability company
	 	 	 
	 	By:	 Bell Partners Inc., a North Carolina corporation, its Manager

 

	 	By:	/s/ Jonathan D. Bell	 
	 	 	Name:	Jonathan D. Bell	 
	 	 	Title:	President	 

 

	 	For purposes of acknowledging its obligations under Sections 5.1(a), 8.2(b), 8.5, 9.2 and 9.3 only and, with respect to Sections 8.2(b), 9.2 and 9.3, only for the term Bell Partners Inc. is Property Manager under the Management Agreement.
	 	 
	 	BELL PARTNERS INC., a North Carolina corporation

 

	 	By:	/s/ Jonathan D. Bell	 
	 	Name:	Jonathan D. Bell	 
	 	Title:	President	 

 

	 	For purposes of acknowledging its obligations under Section 5.1(a).
	 	 
	 	BLUEROCK REAL ESTATE, L.L.C., a Delaware limited liability company

 

	 	By:	/s/ Jordan Ruddy	 
	 	Name:	Jordan Ruddy	 
	 	Title:	President	 

 

    	-49-

    	 

    

 

EXHIBIT A

 

Initial Capital Contributions and Percentage
Interests

 

	Member Name	 	Initial Capital
 Contribution	 	 	Mandatory
 Capital
 Contribution	 	 	Percentage
 Interest	 
	 	 	 	 	 	 	 	 	 	 	 	 	 
	BR Waterford JV Member, LLC	 	$	428,218.39	 	 	$	4,734,757.84	 	 	 	60.00	%
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Bell HNW Nashville Portfolio, LLC	 	$	285,478.93	 	 	$	3,156,505.23	 	 	 	40.00	%

 

    	 

    	 

    

  

EXHIBIT B

 

Annual Business Plan 

 

(Anticipated Capital Expenditures)

 

 

 

 

    	(ii)

    	 

    

  

EXHIBIT C

 

Management Agreement

 

    	 

    	 

    

  

PROPERTY MANAGEMENT AGREEMENT

 

This PROPERTY MANAGEMENT AGREEMENT
(the “Agreement”), entered into as of this 29th day of March, 2012, by Bell BR Waterford Crossing JV, LLC,
a Delaware limited liability company (“Owner”) and Bell Partners Inc., a North Carolina corporation (“Manager”).

 

IN CONSIDERATION of the mutual covenants
and promises each to the other made herein, the Owner does hereby engage Manager exclusively as an independent contractor, and
the Manager does hereby accept the engagement, to rent, lease, operate, repair and manage the property more particularly described
below (the “Project”) upon the following terms and conditions.

 

THE PROJECT: That certain apartment
property located in the City of Hendersonville, State of Tennessee and being known to consist of 252 multi-family units and more
particularly described as:

 

Project Name: Grove at Waterford Crossing

Street Address: 101 Spade Leaf Blvd.

City, State, Zip Code: Hendersonville, TN _______

 

SECTION 1: DEFINITIONS

 

1.01 TERM

The term of this Agreement
shall commence on the later of the date above or the date Owner acquires the Project and shall, subject to the provisions hereof,
terminate twelve months thereafter (the “Term”). This Agreement will automatically renew on a year to year basis
thereafter until and unless terminated in accordance with the terms hereof and each renewal period shall, from and after its commencement,
constitute part of the Term.

 

1.02 FEES

 

The management fee (“Base
Management Fee”) payable each month by Owner to Manager hereunder shall be an amount equal to three and one-half percent
(3.5%) of the Gross Receipts from the Project.

 

Yieldstar. Owner agrees to
deploy Yield Management (the process of balancing supply and demand to price apartments to maximize rental revenue) at the Project.
Manager will provide pricing authority support services in exchange for cost-offset compensation of ($.70) per unit per month.
Licensing fees and software costs to run Yield Management software shall be paid by Owner to Yieldstar as a normal operating expense
at a cost of a one-time licensing fee and a monthly user fee at the then prevailing Yieldstar rate. Yield Management pricing authority
support services provided by Manager shall include daily monitoring of apartment pricing, quarterly reporting and bi-weekly conference
calls with site staff. The Manager will review pricing recommendations and shall have final authority for making pricing decisions
concerning the Project. Manager will be responsible for set-up and maintenance of the Yield Management software.

 

Ops Technology. Owner agrees
to deploy Ops Technology (enables suppliers and service providers to present targeted pre-negotiated catalog pricing, receive orders
electronically, and insert electronic invoices into the Manager’s payment processing system) at the Project. Manager will
provide oversight of the e-procurement and invoicing management platform at a cost (all paid to the service provider and not to
Manager) of a one-time licensing fee, monthly use fee and a per paper invoice processing fee at the then prevailing Ops Technology
rate. Licensing, user and invoice processing costs shall be paid by the Owner as a normal operating expense.

 

    	 

    	 

    

  

All of the fees referred to
above shall be collectively referred to herein as “Management Fees.”

 

In the event Manager negotiates
video (cable), data (internet), voice (phone) and laundry agreements on behalf of the Owner and such agreement provides for the
payment to Owner of an upfront or “door” fee payment then, Manager shall be paid 10% of such payment in return for
its services in negotiating the contract.

 

If additional services not
outlined herein are required by the Owner or Manager, Owner shall pay Manager for such additional services under the terms and
conditions to be agreed upon by the parties. Manager shall be under no obligation to provide such additional services unless and
until the parties have entered into a written agreement reflecting the terms and conditions thereof.

 

1.03 DEPOSITORY

An FDIC insured bank located
in the United States of America, designated by Manager and approved by Owner. 

 

1.04 FISCAL YEAR

The year beginning January
1st and ending December 31st.

 

1.05 BUDGET

A composite of (i) an operations
Budget, which shall be an estimate of receipts and expenditures for the operation of the Project during a Fiscal Year, including
a schedule of expected apartment rentals (excluding security deposits) for the period stated therein and a schedule of expected
special repairs and maintenance projects, (ii) a capital Budget, which shall be an estimate of capital replacements, substitutions
of, and additions to, the Project for the Fiscal Year.

 

1.06 GROSS RECEIPTS

The entire amount of all receipts,
determined on a cash basis, from (a) tenant rentals, parking rent and other charges collected pursuant to tenant leases for each
month during the term hereof; provided, however, that there shall be excluded from tenant rentals any tenant security deposits
(except as provided below); (b) cleaning, tenant security and damage deposits forfeited by tenants in such period; (c) tenant reimbursements
for utilities (gas, electric, water and sewer); (d) video (cable), data (internet), local or long-distance services (voice), laundry
and vending machine income and other ancillary revenue generated as a percentage of gross receipts; (e) any and all receipts from
the operation of the Project received and relating to such period; (f) proceeds from rental interruption insurance; and (g) any
other sums and charges collected in connection with termination of the tenant leases (collectively, the “Gross Receipts”).
Gross Receipts do not include the proceeds of (i) any sale, exchange, refinancing, condemnation, or other disposition of all or
any part of the Project, (ii) any loans to the Owner whether or not secured by all or any part of the Project, (iii) any capital
contributions to the Owner, (iv) any insurance (other than rental interruption insurance) maintained with regard to the Project,
or (v) proceeds of casualty insurance or damage claims as a result of damage or loss to the Project.

 

    	 

    	 

    

  

1.07 PROJECT EMPLOYEES

Those persons employed by Manager
on-site as a management staff; e.g., senior manager, manager, assistant managers, leasing agents, maintenance personnel, courtesy
officers, and other personnel necessary to be directly employed by the Manager in order to maintain and operate the
Project.

 

SECTION 2: DUTIES AND RIGHTS OF MANAGER

 

2.01 APPOINTMENT OF
MANAGER

During the term of this Agreement,
Manager agrees, for and in consideration of the compensation provided in Section 1.02, and Owner hereby grants to Manager the sole
and exclusive right, to supervise and direct the leasing, management, repair, maintenance and operation of the Project as per the
authority granted herein. All services performed by Manager under this Agreement shall be done as an independent contractor of
Owner. All obligations or expenses incurred hereunder, including the pro rata portion used in connection with, or for the benefit
of the Project for all purchases, contracts, sales or services in bulk or volume which Manager may obtain for discount or convenience
in connection thereof shall be for the account of, on behalf of, and at the expense of, Owner except as otherwise specifically
provided. Owner shall be obligated to reimburse Manager for all reasonable expenses of Manager incurred specifically for the Project.

 

2.02 GENERAL OPERATION

Manager shall operate the Project
in the same manner as is customary and usual in the operation of comparable facilities, and shall provide such services as are
customarily provided by operators of apartment projects of comparable class and standing consistent with the Project's facilities,
subject, however, in all events to the limitations of the Budget. In addition to the other obligations of Manager set forth herein,
Manager shall render the following services and perform the following duties for Owner in a timely, faithful, diligent and efficient
manner: (a) coordinate the plans of tenants for moving their personal effects into the Project or out of it, with a view toward
scheduling such movements so that there shall be a minimum of inconvenience to other tenants; (b) maintain businesslike relations
with tenants whose service requests shall be received, considered and recorded in systematic fashion in order to show the action
taken with respect to each; (c) use its commercially reasonable efforts to collect all monthly rents due from tenants and rent
for users or lessees of other non-dwelling facilities in the Project, if any; request, demand, collect, receive and receipt for
any and all charges or rents which become due to Owner, and at Owner's expense, take such legal action as may be necessary or desirable
to evict tenants delinquent in payment of monthly rental or other charges (security deposits, late charges, etc.); (d) prepare
or cause to be prepared for execution and filing by the Manager as an independent contractor all forms, reports and returns required
by all federal, state or local laws in connection with the unemployment insurance, workers' compensation insurance, disability
benefits, Social Security and other similar taxes now in effect or hereafter imposed, and also any other requirements relating
to the employment of personnel; (e) advertise when necessary, at Owner's expense and approval, the availability for rental for
the Project units using commercially reasonable business strategies in connection with the use of promotional materials , market
outreach efforts, internet and web-based marketing and display “for rent” or other similar signs upon the Project,
it being understood that Manager may install one or more signs on or about the Project stating that same is under management of
Manager and may use in a tasteful manner Manager's name and logo in any display advertising which may be done on behalf of the
Project; (f) re-name the Project and replace the signs at the Project at Owner's expense and with Owner’s approval, using
commercially reasonable business strategies; and (g) sign, renew and cancel tenant leases for the Project, write apartment leases
for terms and on terms approved by Owner (or on a month to month basis following the expiration of the initial term of a tenant
lease) to bona fide individuals based upon Manager's recommendations. Manager shall exercise its commercially reasonable efforts
to include the Project in signage advertising rentals available to be placed at the Project during any lease-up period. Notwithstanding
anything herein to the contrary, in the event the Project name contains the trade names and/or trademarks “Bell Partners”
or “Bell” (collectively, the “Bell Brand Rights”), Owner shall not be entitled to any right, title
or interest of Manager in the Bell Brand Rights. Owner, at its cost, shall immediately cease using any Bell Brand Right and shall
replace all signage that contains a Bell Brand Right within thirty (30) days after the termination of this Agreement.

 

    	 

    	 

    

  

It is understood and agreed
that Manager is not in the business of, and will not be providing alarm systems, guards, patrols and/or similar services (the “Security
Services”) to the Project. Owner may direct Manager, on the Owner’s behalf, to separately contract with a company providing
Security Services.

 

2.03 BUDGET

(a) Attached hereto as Exhibit
A is the Budget approved by the Owner for the stated portion of the current Fiscal Year. For subsequent Fiscal Years, Manager
shall submit the Budget for the ensuing Fiscal Year for Owner's approval no later than ninety (90) days prior to the beginning
of each successive Fiscal Year. The Budget shall be reasonably approved by Owner prior to December 31. In the event Owner disapproves
the Budget, in whole or in part, Owner will provide edits for the Manager to make as may be reasonably practicable. Until
a complete new Budget is approved, Manager shall operate on the Budget or part thereof which is approved and the disapproved items
shall be governed by the like item approved for the prior Fiscal Year, with the exception of expenses for personnel which may be
reasonably increased based on existing competitive conditions unless the increase for personnel is the item that is being disputed,
in which case expenses for personnel will not be increased. The Budget shall reflect the schedule of monthly rents proposed for
the new Fiscal Year. It shall also constitute a major control under which Manager shall operate the Project, and Manager shall
make all reasonable efforts to ensure there are no substantial variances therefrom except for any variations which are in compliance
with this Section and Section 2.07(a). Consequently, no expenses may be incurred or commitments made by Manager in connection with
the maintenance and operation of the Project which exceed the amounts allocated to any particular operating expense category (i.e.
Payroll/Landscape / Security / Redecorating / Maintenance / Marketing / Administrative / Capital) in the Budget for any month
by more than the lesser of (x) $5,000 or (y) ten percent (10%); provided, however, that the foregoing limitation with
respect to incurring any expense not covered by the Budget shall not apply to expenses relating to taxes, insurance or utilities.
Manager makes no guaranty, warranty or representation whatsoever in connection with the Budgets or the operational results of owning
the Project, such being intended as estimates only. Manager will use its commercially reasonable efforts to develop the Budget
and manage the Project in accordance with the Budget.

 

(b) In the event there shall
be a substantial variance of greater than 10% between the actual results of operations for any month and the estimated results
of operations for such month as set forth in the Budget, Manager shall furnish to Owner, within fifteen (15) days after the expiration
of such month, a written explanation as to reasons for such variance. If substantial variances have occurred or are anticipated
by Manager during the remainder of any Fiscal Year, Manager shall prepare and submit to Owner a revised Budget covering the remainder
of the Fiscal Year with an explanation for the revision which revised Budget shall be subject to Owner’s approval, which
shall not be unreasonably withheld, conditioned or delayed.

 

    	 

    	 

    

  

2.04 PROJECT EMPLOYEES
AND OTHER PERSONNEL

(a) Manager shall hire, employ,
instruct, pay, promote, direct, discharge and supervise the work of the Project employees and shall supervise, through the Project
employees, the firing, promotion, discharge and work of all other operating and service employees performing services in, for or
about the Project, all in the name of Manager. All training and training-related travel and accommodations are a normal operating
expense and shall be budgeted and paid monthly as a Project expense. Manager shall be solely responsible for legal compliance concerning
the foregoing activities and shall indemnify and hold harmless Owner from employee claims and violations of law by Manager in respect
to employment matters. As some of the Project employees may be required to reside at the Project and be available on a full-time
basis in order to perform properly the duties of his/her employment, it is further understood and agreed that to the extent contemplated
in the Budget or with Owner’s prior written approval, the Project employees (including spouses or significant others and
dependent children), in addition to salary and fringe benefits, may receive up to a 20% discount, or rental concession on the normal
rental rates for any unit such employee is required to occupy.

 

(b) At all times, the Project
employees shall at all times be deemed solely employees of Manager. Owner shall reimburse Manager bi-weekly for the total aggregate
compensation, including salary and fringe benefits, payable with respect to the Project employees and any temporary employees performing
duties at the Project. The term “fringe” benefits, as used herein, shall mean and include the employee's and employer’s
contribution of FICA, unemployment compensation and other employment taxes, workers' compensation, group life, accident and health
insurance premiums, disability, vacation, holiday, and sick leave, 401(k) contributions and other similar benefits paid or payable
to employees on other projects operated by Manager. Any 401(k) employee or employer contributions forfeited by the employee remain
with the plan. The cost of such Project employees shall be outlined and approved in the Budget. The compensation, payroll taxes,
employee benefits, insurance, payroll and administrative costs of such employees shall be considered a normal operating expense
and shall be paid as a Project expense, as provided and to the extent permitted in the Budget.

 

2.05 CONTRACTS AND
SUPPLIES

Subject to the Budget the Manager
shall, in the name of and on behalf of Owner and at Owner's expense, consummate arrangements with unrelated third party concessionaires,
licensees, tenants or other intended users of the facilities of the Project, shall enter into contracts for furnishing to the Project
electricity, gas, water, steam, telephone, cleaning, vermin exterminators, furnace and air-conditioning maintenance, security protection,
pest control, landscaping, solid waste removal and any other utilities, services and concessions which are provided in connection
with the maintenance and operation of apartment projects which are comparable to the Project and in accordance with standards comparable
to those prevailing in other comparable apartment projects, and shall place purchase orders for such equipment, tools, appliances,
materials and supplies as are reflected in the Budget and necessary to maintain the Project. Manager will make a reasonable
attempt to make all contracts cancelable without penalty with no more than (30) days written notice.

 

    	 

    	 

    

  

In the event that utility or
power companies require a surety bond or other form of security in order to provide utilities, electrical or other services to
the Project, the Manager is authorized to obtain such bond at Owner’s sole expense. Manager may, in its sole discretion,
elect to guarantee, indemnify, defend and hold harmless those parties supplying such bonds or other form of security (the “Surety”)
for any premiums, liabilities, losses, costs, damages, attorney fees and other expenses, including interest, which the Surety may
sustain or incur by reason of, or in connection with, the issuance, renewal or continuation of such bonds or other form of security.
In such event, Owner will reimburse and indemnify Manager pursuant to Section 6.03 with regard to the same.

 

2.06 MANAGER'S SERVICES

In the performance of its duties
under this Agreement, it is agreed that Manager may enter into any contract on behalf of Owner with subsidiaries and affiliates
of Manager for the furnishing of supplies and services to the Project, including but not limited to the purchasing of furniture,
operating equipment, operating supplies, maintenance and landscaping services, and advertising, provided, however, that the net
cost of such supplies and services to Owner is competitive with such similar services or supplies customarily used in the industry,
whose services or supplies are reasonably available to the industry and whose services or supplies are reasonably available to
the Project.

 

2.07 ALTERATIONS, REPAIRS
AND MAINTENANCE

(a) To the extent adequate
funds are made available to Manager by Owner, Manager shall make or install, or cause to be made and installed at Owner's expense
and in the name of Owner, all necessary or desirable repairs, interior and exterior cleaning, painting and decorating, plumbing,
alterations, replacements, improvements and other normal maintenance and repair work on and to the Project as are customarily made
by Manager in the operation of apartment projects or are required by any lease; provided, however, that no unbudgeted expenditures
in excess of the lesser of 10% or $5,000 may be made for such purposes without the consent of the Owner. Manager may make emergency
repairs involving manifest danger to life or property which are immediately necessary for the preservation of the safety of the
Project, or for the safety of the tenants, or are required to avoid the suspension of any necessary service to the Project, in
which event such reasonable expenditures may be made by the Manager without prior approval and irrespective of the cost limitations
imposed by this Section 2.07, provided that Owner or its successor in interest is notified in a timely manner and thereafter given
written notice of such situation and such costs incurred.

 

(b) In accordance with the
terms of the Budget, by Manager’s recommendation or upon Owner demand and/or approval (except in the case of emergency),
Manager shall, at Owner's expense, from time to time during the term hereof, make all required capital replacements or repairs
to the Project (“Capital Project”). For any Capital Projects, including but not limited to Project improvements, rehab/renovation
projects, and fire restoration, that cost more than $10,000 on an individual basis, Owner shall pay Manager a Construction Management
Fee equal to 5% of the total cost of the completed work, including both hard and soft costs.

 

2.08 LICENSES AND PERMITS

Manager shall, in a timely manner,
apply for, and thereafter use commercially reasonable efforts to obtain and maintain in the name and at the expense of Owner all
licenses and permits (including deposits and bonds) required of Owner or Manager in connection with the management and operation
of the Project. Owner agrees to execute and deliver any and all applications and other documents and to otherwise cooperate to
the fullest extent with Manager in applying for, obtaining and maintaining such licenses and permits.

 

    	 

    	 

    

  

2.09 COMPLIANCE WITH
LAWS

Manager, at Owner's expense,
shall use its commercially reasonable efforts to cause all acts and duties to be done in and about the Project to comply with all
laws, regulations and requirements of any federal, state, regional, county or municipal government, having jurisdiction respecting
the use or manner of use of the Project or the maintenance, alteration or operation thereof.

 

Owner shall use its commercially
reasonable efforts to cause all acts and duties to be done in and about the Project to comply with all laws, regulations and requirements
of any federal, state, regional, county or municipal government having jurisdiction over the use or manner of use of the Project
or the maintenance, alteration or operation thereof.

 

2.10 LEGAL PROCEEDINGS

Manager shall institute, in
its own name or in the name of Owner, but in any event at the expense of Owner, any and all legal actions or proceedings which
Manager deems reasonable to collect charges, rent or other income from the Project, or to dispossess tenants or other persons in
possession, or to cancel or terminate any lease, license or concessions agreement for the breach thereof, or default thereunder
by any tenant, licensee or concessionaire. Any legal proceedings for which the costs are reasonably expected to exceed the amounts
budgeted in the Budget shall require the approval of the Owner.

 

2.11 DEBTS OF OWNER

In the performance of its duties
as Manager, Manager shall act solely as the representative of the Owner. All debts and liabilities to third persons incurred by
Manager in the course of its operation and management of the Project shall be the debts and liabilities of the Owner only, and
Manager shall not be liable for any such debts or liabilities.

 

SECTION 3: MANAGEMENT
FEES

 

3.01 MANAGEMENT FEE

The Owner shall pay to Manager,
during the term hereof, the Management Fees for the previous month on or before the tenth (10th) day of each subsequent month;
provided, however that with respect to the Management Fee due for the last month of the term hereof, such Management Fee
shall be payable on the last day of such month. Manager shall have the right to withdraw the monthly Management Fee from the Operating
Account established by Manager. 

 

3.02 PLACE OF PAYMENT

All sums payable by Owner to
Manager hereunder shall be payable to Manager at 300 N. Greene Street, Suite 1000, Greensboro, NC 27401, unless the Manager shall,
from time to time, specify a different address in writing.

 

SECTION 4: PROCEDURE FOR HANDLING RECEIPTS
AND OPERATING CAPITAL

 

4.01 BANK DEPOSITS

All monies received by Manager
for or on behalf of Owner shall be deposited by Manager with the Depository. Manager shall maintain separate accounts for such
funds consistent with the system of accounting of the Project. All funds on deposit shall be managed by Manager subject to the
terms hereof. All monies of Owner held by Manager pursuant to the terms hereof shall be held by Manager in trust for the benefit
of Owner to be held and disbursed as herein provided and shall not, unless Owner otherwise has agreed or directed, be commingled
with the funds of any other project or person, including Manager or any affiliate of Manager. In no event shall Manager be responsible
for any loss to amounts on deposit caused by the insolvency or other similar event or occurrence with respect to the Depository.

 

    	 

    	 

    

  

4.02 SECURITY DEPOSIT
ACCOUNT

Manager shall comply with all
applicable laws with respect to security deposits paid by tenants. All security deposit funds held by Manager shall at all times
be the property of Owner, subject to all applicable laws with respect thereto. Upon commencement of this Agreement, the Owner authorizes
the Manager to make withdrawals therefrom for the purpose of returning them as required by the lease or by existing law.

 

4.02A OPERATING ACCOUNT

Manager shall deposit all Gross
Receipts from the operations of the Project into an Operating Account, on which both Manager and Owner shall be signatories and
pay the normal operating expenses of the Project, including Manager’s fees, debt and taxes as directed.

 

4.03 DISBURSEMENT OF
DEPOSITS

Manager shall disburse and
pay all funds on deposit on behalf of and in the name of Owner, in such amounts and at such times as the same are required in connection
with the ownership, maintenance and operation of the Project on account of all taxes, assessments and charges of every kind imposed
by any governmental authority having jurisdiction over the Project, and all costs and expenses of maintaining, operating and supervising
the operation of the Project, including, but not limited to, the Management Fees due hereunder, salaries, fringe benefits and expenses
of the Project employees, insurance premiums, debt service, legal and accounting fees and the cost and expense of utilities, services,
marketing, advertising and concessions. To the extent there are insufficient funds to pay all of such costs and expenses, Manager
shall pay such of the foregoing items in the order and manner selected by Manager. Nothing in this Agreement shall require
the Manager to advance money on the Owner’s behalf.

 

4.04 AUTHORIZED SIGNATURES

Any persons from time to time
designated by Manager and agreed to in writing by Owner shall be authorized signatories on all bank accounts established by Manager
hereunder and shall have authority to make disbursements from such accounts to the extent permitted in this Section 4. Funds may
be withdrawn from all bank accounts established by Manager, in accordance with this Section 4, only upon the signature of an individual
who has been granted that authority by Owner. Owner may at any time and at Owner's sole discretion direct Manager to withdraw funds
and make disbursements from such accounts, except all persons who are authorized signatories or who in any way handle funds for
the Project shall be bonded or covered by dishonesty insurance in the minimum amount of $100,000 per employee. At the beginning
of each year and as new persons shall be designated authorized signatories, Manager shall provide Owner with evidence of such bonding.
Any expenses relating to such bond for on-site employees and for off-site employees shall be borne by Manager.

 

    	 

    	 

    

  

SECTION
5: ACCOUNTING

 

5.01 BOOKS AND RECORDS

Manager, on behalf of the Owner,
shall keep all books and accounts pertaining to the Project in accordance with Generally Accepted Accounting Principles in the
US. The cutoff date of the accounting period shall be the last day of each calendar month. Manager, on behalf of Owner, shall also
supervise and direct the keeping of a comprehensive system of office records, books and accounts pertaining to the Project. Such
records shall be subject to examination, at the office where they are maintained, by Owner or its authorized agents, attorneys
and accountant at all reasonable business hours and upon reasonable, advance notice to Manager.

 

5.02 PERIODIC STATEMENTS

(a) On or before ten (10) days
following the end of each calendar month, Manager shall deliver or cause to be delivered to Owner its standard list of financial
reports customarily provided to owners of properties it manages and such other items as set forth on Exhibit B. This
list is subject to change from time to time by Owner or Manager provided Manager shall not substantively decrease the quality of
the information provided.

 

(b) Within fifteen (15) days
after the end of such Fiscal Year, Manager will deliver to the Owner, an income and expense statement as of Fiscal Year end, and
the results of operation of the Project during the preceding Fiscal Year (anything contained herein to the contrary notwithstanding,
however, Manager shall not be obligated to prepare any of Owner's state or federal income tax returns).

 

(c) In the event that Owner
or Owner's Mortgagee(s) requires an audit, the Manager shall cooperate with the auditors in a timely manner to complete the audit
engagement. Also, Manager shall cooperate in a reasonable manner at the request of any indirect owner of Owner and shall work in
good faith with its designated representatives, accountants or auditors to enable compliance with its public reporting, attestation,
certification and other requirements under applicable securities laws and regulations, including for testing internal controls
and procedures.

 

(d) Owner may request and Manager
shall provide when available such monthly, quarterly and/or annual leasing and management reports that relate to the operations
of the Project as Manager customarily provides the owners of properties it manages.

 

5.03 EXPENSES

All costs and expenses incurred
in connection with the preparation of any statements, budgets, schedules, computations and other reports required under this Section
5, or under any other provisions of this Agreement, shall be borne by the Manager. Any costs and expenses incurred in connection
with the preparation of any statement or report not described in Exhibit B, as from time to time modified, shall be borne by Owner.

 

SECTION 6: GENERAL COVENANTS OF OWNER
AND MANAGER

 

6.01 OPERATING EXPENSES

The Owner shall be solely liable
for the costs and expenses of maintaining and operating the Project that have been incurred by Owner or Manager in accordance with
the terms of this Agreement, and shall pay, or Manager shall pay on Owner's behalf, all such costs and expenses, including, without
limitation, the salaries of all Project employees; provided, however, the Owner shall have no direct obligations to Project employees
for salaries and fringe benefits as all Project employees are employed solely by Manager and not by Owner. Owner covenants to pay
all sums for operating expenses (including the fees due Manager hereunder) in excess of Gross Receipts required to operate the
Project upon written notice and demand from Manager within fifteen (15) days after receipt of written notice. Nothing in this Agreement
shall require Manager to advance funds on Owner’s behalf, however if funds are advanced by Manager in the operation, or management
of the Project, these funds will be reimbursed by the Owner within thirty (30) days of submitting itemized invoices to the Owner.
Owner further recognizes that the Project may be operated in conjunction with other projects and that costs may be allocated or
shared between such projects on a more efficient and less expensive method of operation. In such regard, Owner consents to the
allocation of costs and/or the sharing of any expenses in an effort to save costs and operate the Project in a more efficient manner
to be allocated in a manner not prejudicial to Owner, provided that all such allocations are undertaken on the basis reflected
in the Budget.

 

    	 

    	 

    

  

6.02 OWNER'S RIGHT
OF INSPECTION AND REVIEW

Owner and Owner's accountants,
attorneys and agents have the right to enter upon any part of the Project at any reasonable time during the Term of this Agreement
for the purpose of examining or inspecting the Project or examining or making copies of books and records of the Project. Any inspection
shall be done with as little disruption to the business of the Project as possible. Books and records of the Project shall be kept,
as of the commencement date, at the Project or at the location where any central accounting and bookkeeping services are performed
by Manager but at all times shall be the property of Owner.

 

6.03 INDEMNIFICATION
AND HOLD HARMLESS BY OWNER

Except for the gross negligence
or willful misconduct of Manager (excluding any such gross negligence or willful misconduct undertaken in connection with actions
or policies which have been approved or required by Owner), Owner shall be obligated, whether named as a defendant or not, to indemnify,
hold harmless, and defend Manager (and Manager's partners, directors, shareholders, officers, employees, and agents), with counsel
reasonably satisfactory to Manager, from and against any and all liabilities, claims, causes of action, suits, losses, demands
and expenses whatsoever including, but not limited to attorneys' fees, paralegal expenses and costs arising out of or in the connection
with the ownership, maintenance or operation of the Project or this Agreement or the performance of Manager's agreements hereunder
(collectively “Claims”), including but not limited to, Claims involving the operation and maintenance of the Security
Services, matters in which Manager is acting under the express or implied directions of Owner, and the loss of use of property
following and resulting from damage or destruction. In all cases, Owner's Liability Insurance, as defined in Section 8.02 below,
will be required to cover all actions of Manager such that the Owner's insurer agrees to provide Owner and Manager a defense
(whether or not such defense is provided with a reservation of rights by the insurer). The indemnification by Owner contained in
this Section 6.03 is in addition to any other indemnification obligations of Owner contained in this Agreement, and is not limited
by or to Owner's Liability Insurance. It is the intent of the parties hereto, however, to look first to Owner’s Liability
Insurance with respect to all Claims hereunder.

 

6.04 INDEMNIFICATION
BY MANAGER

Manager shall indemnify Owner
from and against all Claims for bodily injury and property damage which (i) arise out of or are a result of the gross negligence
or willful misconduct of Manager except where attributable to actions or policies approved or required by Owner and (ii) result
in liability to Owner, including but not limited to, liability to Owner as a result of a final adjudication or judgment on the
merits by a court or arbitration proceeding and liability to Owner as a result of a good faith settlement by Owner of such Claims.
Manager shall have no obligation to furnish Owner with a defense or with counsel to defend any Claims which may be asserted or
made against Owner, regardless of the nature of the allegations. If, however, any such Claims result in liability to Owner, Manager
shall reimburse Owner for any attorneys' fees and costs actually and reasonably incurred by Owner to defend the portion or portions
of such Claims against Owner which arise out of or are a result of the gross negligence or willful misconduct of Manager (except
actions or policies approved or required by Owner).

 

    	 

    	 

    

  

6.05 SURVIVAL AND SCOPE
OF INDEMNITY OBLIGATIONS

The indemnification and hold
harmless obligations of the parties in the Sections 6.03 and 6.04 shall survive the expiration or earlier termination of this Agreement.
The foregoing notwithstanding, the indemnification by Owner of Manager and its affiliates hereunder shall be solely with respect
to the performance of the Manager’s activities in its capacity as property manager under this Agreement and nothing herein
should be construed as limiting Manager’s and its affiliates’ liability under, or acting as an indemnity of Manager
and its affiliates for any liability such parties might have under, any other agreements, including under any guaranties provided
by such parties in connection with any financing secured by the Project or any organizational documents related to the Owner.

 

SECTION 7: DEFAULTS AND TERMINATION
RIGHTS

 

7.01 DEFAULT BY MANAGER

Manager shall be deemed to
be in default hereunder in the event Manager shall fail to keep, observe or perform any material covenant, agreement, term or provision
of this Agreement to be kept, observed or performed by Manager, and such default shall continue for a period of, in the case of
any default which can be cured by the payment of a liquidated sum of money, ten (10) days and, in the case of all other defaults,
thirty (30) days after notice thereof by Owner to Manager.

 

7.02 REMEDIES OF OWNER

Upon the occurrence of an event
of default by Manager as specified in Section 7.01 hereof (any one or more, a “for cause” event of default) , Owner
shall have the right to pursue any remedy it may have at law or in equity (provided that in no event shall Manager ever be liable
to Owner for, and Owner hereby waives all rights to receive, punitive, consequential or exemplary damages), it being expressly
understood that although Owner has no further obligation to pay any fee due hereunder, Manager shall remain liable for any losses
suffered as a result of Manager's default and the resulting termination of this Agreement. Upon such termination, Manager shall
deliver to Owner any funds, books and records of Owner then in the possession or control of Manager and all accounts established
by Manager for security deposits.

 

7.03 DEFAULTS BY OWNER

Owner shall be deemed to be
in default hereunder in the event Owner shall fail to keep, observe or perform any material covenant, agreement, term or provision
of this Agreement to be kept, observed or performed by Owner, and such default shall continue for a period of, in the case of any
default which can be cured by the payment of a liquidated sum of money, ten (10) days and, in the case of all other defaults, thirty
(30) days after notice thereof by Manager to Owner.

 

7.04 REMEDIES OF MANAGER

Upon the occurrence of an event
of default by Owner as specified in Section 7.03 hereof, Manager shall be entitled to terminate this Agreement, and upon any such
termination by Manager pursuant to this Section 7.04, Manager shall have the right to pursue any remedy it may have at law or in
equity (provided that in no event shall Owner ever be liable to Manager for, and Manager hereby waives all rights to receive, punitive,
consequential or exemplary damages), except that Owner shall continue to be obligated to pay and perform all of its obligations
which have accrued as of the date of termination and provided further that the Management Fee payable under Section 3.01 shall
continue to be paid.

    	 

    	 

    

  

7.05 EXPIRATION OF
TERM

Upon the expiration of the
Term hereof pursuant to Section 1.01 hereof, unless sooner terminated pursuant to Sections 7.02, 7.04, 7.06 or 9.09, Manager shall
deliver to Owner all funds, including tenant security deposits, books and records of Owner then in possession or control of Manager,
save and except such sums as are then due and owing to Manager hereunder. In addition, within sixty (60) days following expiration
or termination of this Agreement, Manager shall deliver to Owner a final accounting, in writing, with respect to the operations
of the Project, which delivery obligation shall survive termination.

 

7.06 TERMINATION WITHOUT
CAUSE

This Agreement shall be terminable
by either party without cause upon thirty (30) days prior written notice to the other. .

 

7.07 EFFECT OF TERMINATION

Upon termination of this Agreement
for any reason, neither the Owner, nor the Manager have any further rights or obligations under this Agreement other than obligations
accrued prior to the termination or by the express terms surviving this Agreement.

 

SECTION 8: INSURANCE AND INDEMNIFICATION

 

8.01 PROPERTY INSURANCE

Owner shall cause to be placed
and kept in force property damage insurance in the amount of the full replacement cost of the Project, and such other property
insurance as Owner may elect, at Owner's expense. Owner shall furnish to Manager appropriate endorsements and certificates of insurance.

 

8.02 OWNER'S LIABILITY
INSURANCE

During the Term of this Agreement,
Owner, at Owner's expense, shall carry and maintain primary and non-contributory commercial general liability insurance and blanket
contractual liability insurance on an “occurrence” basis, naming Manager as an additional insured (through endorsements
in form and substance satisfactory to Manager), with limits of not less than Three Million Dollars ($3,000,000.00) per occurrence
(the “Owner's Liability Insurance”). The Owner's Liability Insurance shall include coverage for losses arising from
the ownership, management, and operation of the Project.

 

Owner shall provide to Manager
a Certificate of Insurance evidencing such coverage from an insurance carrier with an A.M. Best Rating of A VIII or higher reflecting
that the Owner's Liability Insurance is effective in accordance with this section and that the Owner's Liability Insurance will
not be canceled without at least thirty (30) days prior written notice to Manager.

 

8.03 MANAGER'S LIABILITY
INSURANCE

During the Term of this Agreement,
Manager, at Manager's expense, shall carry and maintain commercial general liability insurance in the amount of $1 million per
occurrence and $2 million in the aggregate for the benefit of Manager (the “Manager's Liability Insurance”).

 

    	 

    	 

    

  

8.04 OWNER'S LIABILITY
INSURANCE SHALL BE PRIMARY

In connection with claims by
third parties, as between Owner's Liability Insurance and Manager's Liability Insurance, Owner's Liability Insurance shall for
all purposes be deemed the primary and non-contributory coverage. No claim shall be made by Owner or its insurance company under
or with respect to any insurance maintained by Manager except in the event such claim is caused solely by gross negligence (except
actions or policies specifically approved or required by Owner) or willful misconduct (except actions or policies specifically
approved or required by Owner) on the part of Manager or Manager's employees.

 

8.05 RENTER’S
INSURANCE

If at the direction of the
Owner, Manager implements a renter’s insurance program at the Project whether it is a limited liability, or limited liability
and personal contents coverage policy, any such policy held by the resident shall not remove, replace, reduce, or in any way modify
the parties’ indemnification obligations herein or the requirements of Owner or Manager to provide insurance and indemnification
in accordance with Sections 6 and 8. Manager agrees to use best efforts to insure compliance on the part of Project residents.
Manager assumes no responsibility, liability or reduction in payment of its Management Fee as a result of any expense incurred
by Owner, including but not limited to payment by Owner of any insurance deductible amount, caused by the failure of a resident
to have renter’s insurance in place. This exclusion of liability on Manager’s part applies whether the resident failed
to procure renter’s insurance at the time of initial lease signing, at the time the resident’s renter’s insurance
policy came up for renewal, or at any other time.

 

8.06 VENDOR INSURANCE
COMPLIANCE

At no cost to the Owner, Owner
agrees to utilize a Vendor Compliance Management Services Company to establish and manage vendor’s insurance agreeable to
Owner and Manager and approved by Manager.  Utilizing such a company to manage vendor Liability Insurance Certificates and
provide related services shall not remove, replace, reduce, or in any way modify the parties’ indemnification obligations
herein or the requirements of Owner or Manager to provide insurance and indemnification in accordance with Sections 6 and 8. Manager
assumes no responsibility, liability or reduction in payment of its Management Fee, for property loss, personal injury (including
death) or denial of claims based on the status of a vendor’s policy whether its policy is amended, changed or lapsed. Further,
Manager assumes no responsibility for the Vendor Compliance Management Services Company beyond that required under this Agreement.

 

8.07 WAIVER OF SUBROGATION

Each insurance policy maintained
by Owner or by Manager with respect to the Project shall contain a waiver of subrogation clause, so that no insurers shall have
any claim over or against Owner or Manager, as the case may be, by way of subrogation or otherwise, with respect to any claims
that are insured under such policy. All insurance relating to the Project shall be only for the benefit of the party securing said
insurance and all others named as insureds. Notwithstanding any contrary provision of this Agreement, Owner and Manager
hereby release each other from and waive all rights of recovery and claims under or through subrogation or otherwise for any and
all losses and damages to property to the extent caused by a peril insured or insurable under the policies of insurance required
to be maintained under this Agreement by the waiving party and agree that no insurer shall have a right to recover any amounts
paid with respect to any claim against Owner or Manager by subrogation, assignment or otherwise.

 

    	 

    	 

    

  

8.08 HANDLING CLAIMS

Manager shall report within
a reasonable amount of time to Owner all accidents and claims of which it is aware for damage and injury relating to the ownership,
operation, and maintenance of the Project and any damage or destruction to the Project coming to the attention of Manager and will
assist Owner in Owner's attempts to comply with all reporting and cooperation provisions in all applicable policies. Manager is
authorized to settle on Owner's behalf any and all claims against property insurers not in excess of $1,500, which includes authority
for the execution of proof of loss, the adjustment of losses, signing of receipts, and the collection of money. If the claim is
greater than $1,500, Manager shall act only with the prior written approval of Owner.

 

8.09 AUTOMOBILE INSURANCE.

Manager, at its expense which
is not reimbursable, shall carry and maintain business auto liability insurance covering owned, non-owned and hired vehicles with
a limit of not less than $1,000,000 per accident.

 

8.10 WORKERS' COMPENSATION
INSURANCE

Manager shall cause to be placed
and kept in force workers' compensation insurance in compliance with all applicable federal, state, and local laws and regulations
covering all employees of Manager and employer liability insurance with a limit of at least $12 million and Manager shall furnish
Owner certificates of same. Owner shall reimburse Manager for its expense on the basis of Manager's current workers' compensation
rates, the payroll of the Project, and Manager's current premium discounts. This will include any increased expense derived from
subsequent audits. In the event subsequent audits result in an increase in Manager's Workers' Compensation costs, then Owner shall
reimburse Manager for the increased amount.

 

8.11 DISHONESTY INSURANCE

Manager, at its expense which
is not reimbursable, shall furnish employee dishonesty insurance with limits of at least $1,000,000 per loss and in an amount sufficient
to cover all employees (whether on-site or off-site) employed by Manager who shall be responsible for handling any moneys belonging
to Owner that come under custody or control of Manager.

 

8.12 ENVIRONMENTAL
INDEMNIFICATION

Owner agrees to defend, indemnify,
and hold harmless Manager and Manager's partners, directors, shareholders, officers, employees and agents, against and from any
and all actions, administrative proceedings, causes of action, charges, claims, commissions, costs, damages, decrees, demands,
duties, expenses, fees, fines, judgments, liabilities, losses, obligations, orders, penalties, recourses, remedies, responsibilities,
rights, suits, and undertakings of every nature and kind whatsoever, including, but not limited to, attorneys' fees and litigation
expenses, from the presence of Hazardous Substances (as defined below) on, under or about the Project. Without limiting the generality
of the foregoing, the indemnification provided by this paragraph shall specifically cover costs incurred in connection with any
investigation of site conditions or any remediation, removal or restoration work required by any federal, state or local governmental
agency because of the presence of Hazardous Substances in, on, under or about the Project, except to the extent that the Hazardous
Substances are present as a result of gross negligence, criminal activity, or any willful misconduct of Manager or its employees.
For purposes of this section, “Hazardous Substances” shall mean all substances defined as hazardous materials, hazardous
wastes, hazardous substances, or extremely hazardous waste under any federal, state or local law or regulation. The foregoing notwithstanding,
the indemnification by Owner of Manager and its affiliates hereunder with respect to Hazardous Materials shall be solely with respect
to the performance of the Manager’s activities in its capacity as property manager and nothing herein should be construed
as limiting Manager’s and its affiliates’ liability under, or acting as an indemnity of Manager and its affiliates
for any liability such parties might have under, any other agreements with respect to Hazardous Materials, including under any
guaranties provided by such parties in connection with any financing secured by the Project or any organizational documents related
to the Owner.

 

    	 

    	 

    

  

SECTION 9: MISCELLANEOUS PROVISIONS

 

9.01 GOVERNING LAW

This Agreement shall be governed
by and construed and interpreted in accordance with the laws of the State where the Project is located. Manager represents that,
to the extent required, it has qualified to do business in the State where the Project is located in connection with all actions
based on or arising out of this Agreement.

 

9.02 NOTICES

All notices, demands, requests
or other communications required or permitted to be given hereunder must be sent by (i) personal delivery, (ii) FedEx or a similar
nationally recognized overnight courier service, or (iii) certified mail, return receipt requested. Any such notice, request, demand,
tender or other communication shall be deemed to have been duly given: (a) if served in person, when served; (b) if by overnight
courier, on the first Business Day after delivery to the courier; or (c) if by certified mail, return receipt requested, upon receipt.
Rejection or other refusal to accept, or inability to deliver because of changed address or facsimile number of which no notice
was given, shall be deemed to be receipt of such notice, request, demand, tender or other communication. Any party hereto may at
any time by giving ten (10) days written notice to the other party hereto designate any other address in substitution of the foregoing
address to which such notice or communication shall be given.

 

	     OWNER:	c/o Bluerock Real Estate, L.L.C.
	 	70 East 55th Street, 9th Floor
	 	New York, New York 10022
	 	Attention:  R. Ramin Kamfar
	 	 
	 	with a copy to:
	 	 
	 	c/o Bluerock Real Estate, L.L.C.
	 	70 East 55th Street, 9th Floor
	 	New York, New York 10022
	 	Attention:  Michael Konig, Esq.
	 	 
	MANAGER:	Chief Operating Officer
	 	Bell Partners Inc.
	 	300 N. Greene Street, Suite 1000
	 	Greensboro, NC  27401

 

9.03 SEVERABILITY

If any term, covenant or condition
of this Agreement or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the
remainder of this Agreement or such other documents, or the application of such term, covenant or condition to persons or
circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term, covenant
or condition of this Agreement or such other documents shall be valid and shall be enforced to the fullest extent permitted by
law.

 

    	 

    	 

    

  

9.04
NO JOINT VENTURE OR PARTNERSHIP

Owner
and Manager hereby agree that nothing contained herein or in any document executed in connection herewith shall be construed as
making Manager and Owner joint venturers or partners. In no event shall Manager have any obligation or liability whatsoever with
respect to any debts, obligations or liabilities of Owner or vice versa, except as set forth herein or as set forth in any separate
agreement signed by Manager.

 

9.05 MODIFICATION TERMINATION

This Agreement terminates
any and all prior management agreements between Owner and Manager relating to the Project, and any amendment, modification, termination
or release hereof may be effected only by a written document executed by Manager and Owner.

 

9.06 ATTORNEYS' FEES

Should either party be required
to employ an attorney or attorneys to enforce any of the provisions hereof or to protect its interest in any manner arising under
this Agreement, or to recover damages for the breach of this Agreement, the non-prevailing party in any actions (the finality of
which is not legally contested) agrees to pay to the prevailing party all reasonable costs, damages and expenses, including attorneys'
fees expended or incurred in connection therewith. Each party is responsible for its own appellate fees and costs, if any.

 

9.07 TOTAL AGREEMENT

This Agreement is a total and
complete integration of any and all undertakings existing between Manager and Owner and supersedes any prior oral or written agreements,
promises or representations between them regarding the subject matter hereof.

 

9.08 APPROVALS AND
CONSENTS

If any provision hereof requires
the approval or consent of Owner or Manager to any act or omission, such approval or consent shall not be unreasonably withheld
or delayed.

 

9.09 CASUALTY

In the event that the Project,
or any portion thereof, is substantially or totally damaged or destroyed by fire, tornado, windstorm, flood or other casualty during
the term of this Agreement, Manager or Owner may terminate this Agreement upon giving the other party written notice of termination
on or before the date which is thirty (30) days after the date of such casualty. In the event of termination pursuant to this Section
9.09, neither party hereto shall have any further liability hereunder.

 

    	 

    	 

    

  

9.10 SPECIAL AGREEMENTS

Notwithstanding Manager’s
review of and recommendations in respect to capital repairs and replacements for the Project, Owner acknowledges that Manager is
not an architect or engineer, and that all capital repairs, replacements and other construction in the Project will be designed
and performed by independent architects, engineers and contractors. Accordingly, Manager does not guarantee or warrant that the
construction documents for such work will comply with applicable law or will be free from errors or omissions, nor that any such
work will be free from defects, and Manager will have no liability therefor. In the event of such errors, omissions, or defects,
Manager will use reasonable efforts to cooperate in any action Owner desires to bring against such parties. Notwithstanding any
contrary provision hereof, Owner agrees that no partner, agent, director, member, officer, shareholder, or affiliate of Manager
shall be personally liable to Owner or anyone claiming by, through or under Owner, by reason of any default by Manager under this
Agreement, any obligation of Manager to Owner, or for any amount that may become due to Owner by Manager under the terms of this
Agreement otherwise. Notwithstanding any contrary provision hereof, Manager agrees that no partner, agent, director, member, manager,
officer, shareholder, or affiliate of Owner shall be personally liable to Manager or anyone claiming by, through or under Manager,
by reason of any default by Owner under this Agreement, any obligation of Owner to Manager, or for any amount that may become due
to Manager by Owner under the terms of this Agreement otherwise. The foregoing notwithstanding nothing herein shall be construed
as limiting the personal liability of Owner, its partners, agents, directors, members, managers, officers, shareholders or affiliates
under any separate agreement between such party and Manager or anyone claiming by, through or under Manager.

 

9.11 COMPETITIVE PROJECTS

Manager may, individually or
with others, provide management services in regard to and possess an interest in any other projects and ventures of every nature
and description, including, but not limited to, the ownership, financing, leasing, operation, management, brokerage, development
and sale of real property and apartment projects other than the Project, whether or not such other ventures or projects are competitive
with the Project, and Owner shall not have any right to the income or profits derived therefrom.

 

9.12 SUCCESSORS
AND ASSIGNS

This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their permitted successors and assigns. Either Manager or Owner may
assign this Agreement upon obtaining the other party's prior written consent, provided that no consent shall be required for assignment
to any mortgagee of Owner in connection with any financing procured by Owner and secured by the Project.

 

9.13 WAIVER
OF JURY TRIAL.

Owner and Manager hereby knowingly,
voluntarily and intentionally, to the extent permitted by law, waive the right to a trial by jury in respect of any litigation
based on, arising out of, under or in connection with this Agreement or any documents contemplated to be executed in connection
herewith or any course of conduct, course of dealings, statements (whether oral or written) or actions of either party arising
out of or related in any manner to the Project (including, without limitation, any action to rescind or cancel this Agreement or
any claims or defenses asserting that this Agreement was fraudulently induced or is otherwise void or voidable). This waiver is
a material inducement for the Owner to enter into and accept this Agreement. Owner and Manager agree that should issues arise that
would have required litigation; they mutually agree to resolve them via arbitration.

 

    	 

    	 

    

  

SECTION 10: SIGNATURES

 

IN WITNESS WHEREOF, the parties
hereto have executed this Management Agreement as of the day and year first above written.

 

	MANAGER:	BELL PARTNERS INC.

 

	 	By:	/s/ Jonathan D. Bell	 

 

	 	Name:	Jonathan D. Bell	 

 

	 	Title:	President	 

 

		OWNER:	BELL BR WATERFORD CROSSING JV, LLC, a Delaware limited liability company

 

	 	By: 	BR WATERFORD JV MEMBER, LLC, a Delaware limited liability company, its co-manager

 

	 	By: 	Bluerock Special Opportunity + Income Fund II, LLC, a
    co-manager

 

	 	By:	Bluerock Real Estate, L.L.C., a Delaware limited liability 
	 	company, its manager

 

	 	By:	/s/ Jordan Ruddy	 
	 	Name: 	Jordan Ruddy	 
	 	Title: 	President	 

 

	 	By: 	Bluerock Special Opportunity + Income Fund, LLC, a co-manager

 

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

 

	 	By:	/s/ Jordan Ruddy	 
	 	Name: 	Jordan Ruddy	 
	 	Title: 	President	 

 

	 	BELL HNW NASHVILLE PORTFOLIO, LLC, 
	 	a NC limited liability company
	 	 	 
	 	By:	Bell Partners Inc., a North Carolina corporation, its Manager

 

	 	By:	/s/ Jonathan D. Bell	 
	 	Name:	Jonathan D. Bell	 
	 	Title:	President	 

 

    	 

    	 

    

 

EXHIBIT “A”

2012 BUDGET

 

 

 

    	 

    	 

    

 

 

 

 

 

 

 

 

    	 

    	 

    

 

 

 

 

    	 

    	 

    

 

 

 

    	 

    	 

    

 

 

 

 

 

 

 

 

    	 

    	 

    

 

 

 

 

 

    	 

    	 

    

 

 

 

 

 

    	 

    	 

    

  

EXHIBIT B 

MONTHLY REPORTS

 

		1.	Balance Sheet, including monthly comparison and comparison to year end (if applicable)

		2.	Budget Comparison, including month-to-date and year-to-date variances- Detailed Income Statement, including prior 12 months

		3.	Profit and loss statement compared to budget with narrative for any large fluctuations compared to budget

		4.	Trial Balance that includes mapping of the accounts to the financial statements

		5.	Account reconciliations for each balance sheet account within the trial balance. — Detailed support for each account
reconciliation including the following:

		a.	Detail Accounts Payable Aging Listing — 0-30 days, 31-60 days, 61-90 days and over 90 days

		b.	Detail Accounts Receivable Delinquency Aging Report - 0-30 days, 31-60 days, 61- 90 days, over 90 days and prepayments

		c.	Fixed asset roll-forward and support (invoices and checks) for any new acquisition/additions and/or
support for any disposals to fixed assets. Purchases will be accounted for using Bluerock's capitalization policy.

		6.	Security Deposit Activity

		7.	Mortgage Statement

		8.	Monthly Management Fee Calculation

		9.	Monthly Distribution Calculation

		10.	General Ledger, with description and balance detail

		11.	Monthly Check Register including copies of all checks disbursed and copies of cancelled checks.

		12.	Market Survey, including property comparison, trends, and concessions

		13.	Rent Roll

		14.	Monthly Reporting and evidence of withdrawal, if any, of any Operating Reserve Account and
Capital Expense Reserve Account, including, but not limited to, any calculations evidencing shortfalls payable and calculations
regarding the 60 day maintenance (as defined in Section 4.04 of the Agreement)

		15.	Variance Report, including the following:

		a.	Cap Ex Summary and Commentary

		b.	Monthly Income/Expense Variance with notes

		c.	Yearly Income/Expense Variance with notes

		d.	Occupancy Commentary

		e.	Market/Competition Commentary

		f.	Rent Movement/Concessions Commentary

		g.	Crime Commentary

		h.	Staffing Commentary

		i.	Operating Summary, with leasing and traffic reporting -Other reasonable reporting, as requested (e.g. Renovation/Rehab report).

 

[1]             Budget
Comparison shall include (1) an unaudited income and expense statement showing the results of operation of the Project for the
preceding calendar month and the Fiscal Year to-dale; (ii) a comparison of monthly line item actual income and expenses with the
monthly line item income and expenses projected in the Budget. The balance sheet will show the cash balances for reserves and operating
accounts as of the cut-off date for such month.Exhibit 10.39

 

FIRST
amendment to

limited
liability company/joint venture agreement 

FOR
bell BR waterford crossing jv, LLC,

A
DELAWARE LIMITED LIABILITY COMPANY

 

This
first Amendment to limited liability company/joint venture agreement (this “First Amendment”)
is made as of the 2nd day of April, 2014, by and between BR WATERFORD JV MEMBER, LLC, a Delaware limited liability
company (“Bluerock”), and BELL HNW NASHVILLE PORTFOLIO, LLC, a North Carolina limited liability company (“Bell”).

 

WHEREAS,
a Limited Liability Company/Joint Venture Agreement dated March 29, 2012 (the “Operating Agreement”) for Bell BR Waterford
Crossing JV, LLC (the “Company”) was previously entered into by and among Bluerock and Bell.

 

WHEREAS,
in connection with certain transfers being undertaken by the members of Bluerock, Bluerock and Bell have agreed to amend the Operating
Agreement in order to, among other things, address the fact that the proposed transferee is a real estate investment trust and,
in connection with the acquisition of its interest, such transferee is requiring certain revision to the management structure
of the Company.

 

WHEREAS,
the parties hereto wish to amend the Operating Agreement as hereinafter provided.

 

NOW,
THEREFORE, the parties hereto modify and amend the Operating Agreement, effective as of the date hereof, as follows:

 

1.           Section
1 of the Operating Agreement is modified and amended as follows:

 

(a)          The
following defined terms are deleted from Section 1 of the Agreement and replaced with the definitions set forth below:

 

“Major
Decision” shall have the meaning provided in Section 9.9(g).

 

“Manager”
and “Managers” shall mean the Managers appointed pursuant to Section 9.1(b) of the Agreement.

 

(b)          The
following definitions are added to Section 1 of the Agreement:

 

“Affiliate
Transaction” means any agreement between the Company and a Member or any Affiliate of a Member with respect to or involving
the Property.

 

“Majority
Interest” means greater than 50% of the Percentage Interests.

 

“Asset
Manager” shall have the meaning provided in Section 9.9(g)(iii).

 

    	 

    	 

    

  

“Asset
Management Agreement” shall mean the asset management agreement entered into between the Company and the Asset Manager for
the asset management of the Property.

 

“Management
Committee” shall have the meaning provided in Section 9.1(c)(iii).

 

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

 

(a)          Management.
Except for the powers retained by the Members enumerated in Section 9.9 below, the business and affairs of the Company shall be
managed by its Managers. Except for situations in which the approval of the Members is expressly required by this Agreement or
by nonwaivable provisions of applicable law or as otherwise set forth in this Agreement, the Managers shall have full and complete
authority, power and discretion to manage and control the business, affairs and properties of the Company, to make all decisions
regarding those matters and to perform any and all other acts or activities customary or incident to the management of the Company’s
business. The Managers hereby irrevocably delegate certain management and administrative functions to the Asset Manager and the
Property Manager, as set forth herein.

 

(b)          Number,
Tenure and Qualifications. The Company shall have two (2) Managers, with one Manager being elected by Bluerock and one Manager
being elected by Bell. Bluerock hereby elects Bluerock to serve as its initial Manager and Bell hereby elects Bell to serve as
its initial Manager. Subject to the foregoing, each Manager shall hold office until its successor shall have been elected and
qualified or until his earlier death, resignation, or removal.

 

(c)          Certain
Powers of Manager; Management Committee.

 

(i)         Certain
Powers of Manager. Subject to the powers retained by the Members enumerated in Section 9.9 below, and the delegation of certain
powers to the Property Manager pursuant to the Management Agreement (a copy of which is attached to the Agreement as Exhibit C)
and to the Asset Manager pursuant to the Asset Management Agreement (a copy of which is attached to the First Amendment to Limited
Liability Company/Joint Venture Agreement as Schedule 9.1(c)(i)), and without limitation of the general management powers granted
to the Managers pursuant to Section 9.1 above, the Managers shall have the specific power and authority, on behalf of the Company:

 

1.          To
acquire and hold ownership of the Property.

 

2.          To
borrow money for the Company from banks, other lending institutions, Managers, Members, or Affiliates of the Managers or Members
on such terms as the Managers deem appropriate, and in connection therewith, to hypothecate, encumber and grant security interests
in the assets of the Company to secure repayment of the borrowed sums (subject to Member approval as required pursuant to Section
9.9).

 

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3.          To
execute all instruments and documents, including, without limitation, checks; drafts; notes and other negotiable instruments;
purchase and sale agreements, mortgages or deeds of trust; security agreements; financing statements; deeds, contracts, settlement
statements, agreements, affidavits and any other documents providing for the acquisition, mortgage or disposition of the Company’s
property; assignments; bills of sale; leases; partnership agreements; operating agreements of other limited liability companies;
and any other instruments or documents necessary, in the opinion of the Managers, to the business of the Company (subject to Member
approval as required pursuant to Section 9.9).

 

4.          Except
as reserved to the Members pursuant to Section 9.9, to create offices and designate officers, who need not be Members. Any such
persons appointed to be officers of the Company may or may not be employees of the Company, any Member, or any Affiliate thereof.
Any officers so appointed shall have such authority and perform such duties as the Managers may, from time to time, expressly
delegate to them in writing and the officers so appointed shall serve at the pleasure of the Managers, except as may have been
otherwise delegated through, for example, the Asset Management Agreement, and except as otherwise reserved to the Members pursuant
to Section 9.9.

 

5.          To
do and perform all other acts as may be necessary or appropriate to the conduct of the Company’s business, to the extent
such acts are not reserved unto the Members pursuant to Section 9.9 of this Agreement.

 

(ii)         Limitation
of Members Powers. Unless authorized to do so by this Agreement or by the Managers, no Member, Manager, Affiliate, attorney-in-fact,
employee or other agent of the Company shall have any power or authority to bind the Company in any way, to pledge its credit
or to render it liable for any purpose.

 

(iii)         Management
Committee. The Managers and Members shall establish a management committee (the “Management Committee”) for the
Company for the purpose of the Managers considering and approving actions pursuant to Section 9.1(a) and (c). The Management Committee
shall consist of four (4) individuals appointed to act as “representatives” of the Manager and Member that appointed
him or her (the “Representatives”) as follows: (i) Bluerock shall be entitled to designate two (2) Representatives
to represent Bluerock as Manager and Member; and (ii) Bell shall be entitled to designate two (2) Representatives to represent
Bell as Manager and Member. The Management Committee shall be governed as provided in Schedule 9.1(c)(iii).

 

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(d)          Liability
for Certain Acts. No Manager has guaranteed nor shall have any obligation with respect to the return of a Member’s Capital
Contributions or profits from the operation of the Company. Each Manager shall be entitled to rely on information, opinions, reports
or statements, including but not limited to financial statements or other financial data prepared or presented in accordance with
the provisions of the Act. Except as otherwise expressly provided in this Agreement, none of the Managers or their Representatives
(in their capacities as members of the Management Committee), shall have any duties or liabilities to the Company or any other
Member, including any fiduciary duties, whether or not such duties or liabilities otherwise arise or exist in law or in equity,
and each Member hereby expressly waives any such duties or liabilities; provided, however, that this Section 9.1(d) shall not
eliminate or limit the liability of such Representatives or the Managers (a) for acts or omissions that involve fraud or gross
negligence, or (b) for any transaction not permitted or authorized under or pursuant to this Agreement, the Management Agreement
or the Asset Management Agreement unless the Management Committee or Members, as applicable has approved in writing such transaction
in accordance with this Agreement; provided, further, however, that the duty of care of each of such Representatives and the Managers
is to not act with fraud or gross negligence. Except as provided in this Agreement, whenever in this Agreement a Representative
of a Manager and/or a Manager is permitted or required to make a decision affecting or involving the Company, any Manager, any
Member or any other Person, such Representative and/or such Manager shall be entitled to consider only such interests and factors
as he, she or it desires, including a particular Member’s interests, and shall, to the fullest extent permitted by applicable
law, have no duty or obligation to give any consideration to any interest of or factors affecting the Company or any other Manager
or Member.

 

(e)          Manager
Has No Exclusive Duty to Company. A Manager shall not be required to manage the Company as his or its sole and exclusive function
and he or it (or any Manager) may have other business interests and may engage in other activities in addition to those relating
to the Company. Neither the Company nor any Member shall have any right, by virtue of this Agreement, to share or participate
in such other investments or activities of a Manager or to the income or proceeds derived therefrom. A Manager shall incur no
liability to the Company or to any of the Members as a result of engaging in any other business or venture.

 

(f)         Resignation.
Subject to the required consent of any Lender, any Manager of the Company may resign at any time by giving written notice to the
Members of the Company. The resignation of any Manager shall take effect upon receipt of notice thereof or at such later time
as shall be specified in such notice; and, unless otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. The resignation of a Manager shall also constitute the resignation of such Manager’s Representatives
on the Management Committee. The resignation of a Manager who is also a Member shall not affect the Manager’s rights as
a Member and shall not constitute a withdrawal of a Member.

 

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(g)          Removal
of Manager or Asset Manager. At a meeting called expressly for that purpose, a Manager may be removed at any time, by the
affirmative vote of all Members (excluding the Membership Interests of Bluerock or its permitted transferee in the event Bluerock
or its permitted transferee is the subject of such removal vote and excluding the Membership Interests of Bell or its permitted
transferees in the event Bell or its permitted transferee is the subject of such removal vote), in the event of willful and material
fraud or gross negligence on the part of such Manager, any of its Affiliates, or any Affiliated property manager or asset manager
(collectively, “Bad Acts”), or in the event of a material default under this Agreement, which remains uncured after
the requisite notice and period of time allowed for cure, by a Member affiliated with such Manager. The removal of a Manager shall
also constitute the removal of such Manager’s Representatives on the Management Committee. The removal of a Manager who
is also a Member shall not affect the Manager’s rights as a Member and shall not constitute a withdrawal of a Member. In
any instance where Bell is removed as Manager and/or the Asset Manager is removed by the Company as asset manager under the Asset
Management Agreement, regardless of the cause of such removal, Bluerock shall indemnify and hold harmless Bell (and/or any affiliate
thereof including, without limitation, Bell Partners Inc.) (a “Bell Indemnified Party”), pursuant to this Section
9.1(g) (and without prejudice to any other indemnification right under this Agreement), but only for actual losses and expenses
(including reasonable attorney’s fees and costs) incurred by a Bell Indemnified Party arising after the date of removal
of the Manager or Asset Manager, as applicable.

 

(h)          Vacancies.
Any vacancy occurring for any reason in the number of Managers of the Company may be filled by the applicable Members that elected
such Manager or Managers; provided, however, if any such Manager is removed pursuant to Section 9.1(g), the Member that elected
such Manager shall not be entitled to elect such Manager’s replacement Manager and in such event the other Member shall
have the right to elect such replacement Manager. A Manager elected to fill a vacancy shall be elected for the unexpired term
of his predecessor in office and shall hold office until the expiration of such term and until his successor shall be elected
and shall qualify or until his earlier death, resignation or removal.

 

(i)         Salaries.
The salaries and other compensation of the Managers shall be fixed from time to time by an affirmative vote of all the Members,
and no Manager shall be prevented from receiving such salary by reason of the fact that he is also a Member of the Company. Notwithstanding
the foregoing, the Company does not anticipate hiring any employees. 

 

4.           The
Operating Agreement is further modified and amended by adding the following new Section 9.9:

 

9.9           Meetings
of Members.

 

(a)          Meetings.
Meetings of the Members, for any purpose or purposes, may only be called by the Manager or a Member or Members holding at least
fifteen percent (15%) of the Percentage Interests.

 

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(b)          Place
of Meetings. The Persons calling any meeting may designate any place in North Carolina as the place of meeting for any meeting
of the Members. If no designation is made, the place of meeting shall be the principal executive office of the Company in the
State of North Carolina.

 

(c)          Notice
of Meetings. Written notice stating the place, day and hour of the meeting and the purpose or purposes for which the meeting
is called shall be delivered not less than two (2) nor more than fifty (50) days before the date of the meeting, with notice to
be given as provided in Section 17.1(a) of this Agreement, by or at the direction of the Manager or Person calling the meeting,
to each Member entitled to vote at such meeting. If mailed, such notice shall be deemed to be delivered two calendar days after
being deposited in the United States mail, addressed to the Member at its address as it appears on the books of the Company, with
postage thereon prepaid. Notice provided in accordance with this Section shall be effective notwithstanding anything in the Act
to the contrary.

 

(d)          Meeting
of all Members. If all of the Members shall meet at any time and place, either within or outside of the State of North Carolina,
and consent to the holding of a meeting at such time and place, such meeting shall be valid without call or notice, and at such
meeting any lawful action may be taken.

 

(e)          Record
Date. For the purpose of determining Members entitled to notice of or to vote at any meeting of Members or any adjournment
thereof, or Members entitled to receive payment of any distribution, or in order to make a determination of Members for any other
purpose, the date on which notice of the meeting is mailed or the date on which such distribution is made, as the case may be,
shall be the record date for such determination of Members unless the Manager shall otherwise specify another record date. When
a determination of Members entitled to vote at any meeting of Members has been made as provided in this Section, such determination
shall apply to any adjournment thereof.

 

(f)         Quorum.
Members holding a Majority Interest represented in person or by proxy, shall constitute a quorum at any meeting of Members. In
the absence of a quorum at any such meeting, a majority of the Membership Interests so represented may adjourn the meeting from
time to time for a period not to exceed sixty (60) days without further notice. However, if at the adjournment a new record date
is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each Member of record entitled to vote
at the meeting. At such adjourned meeting at which a quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally noticed. The Members present at a duly organized meeting may continue
to transact business until adjournment, notwithstanding the withdrawal during such meeting of that number of Membership Interests
whose absence would cause less than a quorum to be present. Notwithstanding the foregoing, for so long as the only two Members
are Bell and Bluerock, a quorum shall be constituted only if at least Bluerock and Bell attend; provided however, if Bluerock
or Bell, as applicable, does not appear after two (2) due notices of such meeting, then a quorum shall be constituted on the third
such meeting with only one of such Members (Bluerock or Bell, as applicable).

 

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(g)          Manner
of Acting. Notwithstanding the power vested in the Management Committee or any powers delegated to the Property Manager or
Asset Manager, or any provision in this Agreement to the contrary, the following powers are expressly reserved to the Members,
and the unanimous affirmative vote of Bluerock and Bell shall be required to approve any such action (each, a “Major Decision”):

 

		(i)	any loan to be obtained by
the Company and secured by the Property, including any refinancing, material amendment, material modification or extension of
the Loan;

 

		(ii)	any sale of the Property or
any action reasonably intended to accomplish same, including but not limited to entering into any contract of sale or binding
or non-binding term sheet, marketing the Property for sale, selecting or engaging any broker or anyone else for the purpose of
selling or marketing the Property, releasing Property information to any broker or anyone else for the purpose of selling or marketing
the Property, giving, granting or undertaking any options, rights of first refusal, pledges, ground leases, security or other
interests in or encumbering the Property, any portion thereof or any other material assets;

 

    	7

    	 

    

  

		(iii)	enter into any Affiliate Transaction
with an Affiliate of any Member (except the initial entry into the Management Agreement and the Asset Management Agreement, copies
of which are attached as Exhibit C to the Agreement and as Schedule 9.1(c)(i) of the First Amendment, respectively). The foregoing
notwithstanding, (A) the Company has entered into the Management Agreement with the Property Manager to property manage the Property
and (B) the Company is concurrently herewith entering into an Asset Management Agreement with Bell Partners Inc., a North Carolina
corporation (“Asset Manager”). Such initial Management Agreement and any other management agreement with the Property
Manager entered into by the Company after the termination or expiration of such initial management agreement, each as they may
be amended or restated from time to time (on unanimous consent of the Members), are referred to herein as the “Management
Agreement” and such initial Asset Management Agreement and any other asset management agreement with Asset Manager entered
into by the Company after the termination or expiration of such initial asset management agreement, each as they may be amended
or restated from time to time (on unanimous consent of the Members), are referred to herein as the “Asset Management Agreement.”
Subject to the remaining terms of this Section 9.9(g)), the Members shall have equal approval rights with respect to any change
in management of the Property, both with respect to the property management and asset management functions (i.e. any modification
or amendment of the Management Agreement or the Asset Management Agreement; provided however, termination of either such agreement
shall be solely subject to the terms thereof). For the avoidance of doubt, except as set forth in this Section 9.9(g), no other
Affiliates of Bell may be engaged to provide goods or services to the Property except (i) upon terms which are competitive at
that time in the relevant market and (ii) after giving notice to and with the prior written approval of Bluerock of such contract
or payments. Further, in the event of a material default with respect to any agreement between the Company and any Bell Affiliate,
which material default is not cured within the time frame allotted under such agreement, only Bluerock shall be authorized to
take action with respect to remedies on behalf of the Company relative to such defaulted agreement, including the right to terminate
the applicable agreement and to solicit bids for any replacement vendor with respect to the services being performed under the
defaulted agreement. In the event that Bluerock obtains bids or proposals for any replacement vendor that are satisfactory to
Bluerock, Bluerock shall submit such bids or proposals to Bell for approval, which shall not be unreasonably withheld, conditioned
or delayed. If Bell fails to so approve any such bids or proposals within fifteen (15) days thereafter, such failure to agree
shall constitute a failure to agree on a Major Decision;

 

		(iv)	any acquisition by purchase,
ground lease or otherwise, of any real property or other material asset, or the entry into of any agreement, commitment or assumption
with respect to any of the foregoing, or the making or posting of any deposit (refundable or non-refundable) in connection therewith;

 

		(v)	any taking of any action by
the Company that is reasonably likely to result in any Member or any of its Affiliates having individual liability under any so
called “bad boy” guaranties or similar agreements provided to third party lenders in respect of financings relating
to the Property, the Company, the Subsidiaries or any of their assets which provide for recourse as a result of willful misconduct,
fraud or gross negligence or for failure to comply with the covenants or any other provisions of such “bad boy” guaranties
(each, a “Non-Recourse Carveout Guaranty”);

 

    	8

    	 

    

  

		(vi)	except as expressly provided
in Section 12 with respect to (A) Transfers by Bluerock or a Bluerock Transferee to a Bluerock Transferee or (B) Transfers by
Bell or a Bell Transferee to a Bell Transferee, and as expressly provided in Section 15 with respect to the Push Pull Rights available
to the Members, the admission or removal of any Member to the Company, the redemption or other acquisition by the Company of any
Interest of a Member, or the issuance to any third party of an equity interest in the Company (including interests convertible
into, or exchangeable for, equity interests in the Company);

 

		(vii)	other than in connection with
the Loan, encumber or pledge any collateral interest in the Property or the Company’s assets, or grant any security interests
therein or assign (collectively or otherwise) any rights in specific property of the Company;

 

		(viii)	filing or initiating a Bankruptcy
for the Company or any of its Subsidiaries;

 

		(ix)	any decision of “Owner”
with respect to approval or amendment of any “Budget” as those terms are defined and used in the Management Agreement.

 

		(x)	any merger, conversion, reorganization
or consolidation involving the Company or any Subsidiary or the sale, lease, transfer, exchange or other disposition of the Property
or all or substantially all of the Company’s assets other than in the ordinary course of business, or of or related to all
of the Interests of the Members in the Company, in one or a series of related transactions;

 

		(xi)	any voluntary liquidation,
dissolution or termination of the Company;

 

		(xii)	any amendment, modification,
or termination of this Agreement, the Management Agreement or the Asset Management Agreement;

 

    	9

    	 

    

  

		(xiii)	causing the Company to (x)
form any Subsidiary, (y) acquire an equity interest in any other entity or (z) contribute any of the Company’s assets or
the assets of any Subsidiary to a partnership, corporation or other entity or Person;

 

		(xiv)	entering into any joint venture
(regardless of the form of the joint venture) with another Person;

 

		(xv)	making a call for Additional
Capital Contributions under Section 5.2;

 

		(xvi)	determining the amount of
Distributable Funds and the timing of distributions of Distributable Funds;

 

		(xvii)	acquiring, modifying, amending,
or terminating any insurance policy of the Company, other than in conjunction with any policies the cost of which was included
in the Budget and other than any policies necessary to respond to any requirements of the Lender under the Loan;

 

		(xviii)	changing the Tax Matters Member;
and

 

		(xix)	commencing or settling any
litigation or confessing a judgment on behalf of the Company to the extent that the amount paid or confessed exceeds $25,000.

 

(h)          Proxies.
A Member may vote in person or by proxy executed in writing by the Member or by a duly authorized attorney-in-fact. Such written
proxy shall be delivered to the Company.

 

(i)         Action
by Members Without a Meeting. Action required or permitted to be taken by the Members at a meeting may be taken without a
meeting if the action is evidenced by one or more written consents describing the action taken, signed by the Members entitled
to vote and having the requisite Membership Interests required to approve such action. Action take under this Section is effective
when the Members required to approve such action have signed the consent, unless the consent specifies a different effective date.
The record date for determining Members entitled to take action without a meeting shall be the date the first Member signs a written
consent. Written notice shall be provided to all Members in the event action is taken under this Section.

 

(j)         Waiver
of Notice. When any notice is required to be given to any Member, a waiver thereof in writing signed by the person entitled
to such notice, whether before, at, or after the time stated therein, shall be equivalent to the giving of such notice.

 

    	10

    	 

    

  

(k)          Meeting
by Telephone. Members may also meet by conference telephone call if all Members can hear one another on such call and the
requisite notice is given or waived.

 

5.           Section
12.2(b)(ii) is modified and amended by deleting the entire subsection and replacing it as follows:

 

Any Transfer by Bluerock
or a Bluerock Transferee of up to one hundred percent (100%) of its Interest to any Affiliate of Bluerock (a “Bluerock Transferee”).
Furthermore, for the avoidance of doubt, the concurrent transfer of up to 100% of the membership interests held by Bluerock Special
Opportunity + Income Fund, LLC and Bluerock Special Opportunity + Income Fund II, LLC in Bluerock to BRG Waterford, LLC, a Delaware
limited liability company, are deemed permitted transfers.

 

6.           Section
15.1 (a) of the Operating Agreement is modified and amended by deleting the first sentence thereof and inserting therefor the
following:

 

At any time that the Members
are unable to agree on a Major Decision, and such failure to agree has continued for fifteen (15) days after written notice from
one Member to the other Member indicating an intention to exercise the rights under this Section 15.1 either Member has the right
to initiate the provisions of this Section 15.1.

 

7.           Section
17.1 (a) of the Operating Agreement is in relevant part modified and amended as follows:

 

If to
Bluerock:

 

c/o
Bluerock Real Estate

712 Fifth Avenue, 9th Floor

New
York, New York 10019

Attention: R. Ramin Kamfar

Facsimile:
646-278-4220

Email: rkamfar@bluerockre.com

 

With
a copy to:

 

c/o
Bluerock Real Estate

712 Fifth Avenue, 9th Floor

New
York, New York 10019

Attention: Michael L. Konig, Esq.

Facsimile:
646-278-4220

Email: mkonig@bluerockre.com

 

8.           Schedules
9.1(c)(i) and 9.1(c)(iii) are attached hereto and incorporated herein.

 

9.           This
First Amendment is intended to be effective from and after the date set forth above.

 

    	11

    	 

    

  

[SIGNATURES
TO FOLLOW]

 

    	12

    	 

    

  

IN WITNESS WHEREOF
the undersigned have set their hands to this First Amendment as of the date first set forth above.

 

	BLUEROCK:	BR WATERFORD JV MEMBER, LLC, a
    Delaware limited liability company
	 	 	 
	 	By:	BRG Waterford, LLC, a Delaware limited
    liability company, its managing member
	 	 	 
	 	 	By:	Bluerock Residential Holdings, L.P., a Delaware limited
    partnership, its sole member
	 	 	 	 
	 	 	 	By:	Bluerock Residential Growth REIT, Inc., a Maryland corporation,
    its general partner
	 	 	 	 	 	 
	 	 	 	 	By:	/s/ Michael L. Konig
	 	 	 	 	Name:	Michael L. Konig
	 	 	 	 	Title:	Chief Operating Officer

 

	BELL:	BELL HNW NASHVILLE PORTFOLIO,
    LLC, a North Carolina limited liability company
	 	 
	 	By:	Bell Partners Inc., a North Carolina corporation, its
    Manager
	 	 	 	 
	 	 	By:	/s/ John E. Tomlinson 
	 	 	Name:  	John E. Tomlinson
	 	 	Title:	Chief Financial Officer

 

    	13

    	 

    

  

The
undersigned executes this First Amendment solely for purposes of acknowledging and consenting to the terms above:

 

	 	BELL PARTNERS INC., a North Carolina
    corporation
	 	 	 
	 	By:	/s/ John E. Tomlinson
	 	Name:  	John E. Tomlinson
	 	Title:	Chief Financial Officer

 

	 	BLUEROCK REAL ESTATE, L.L.C., a Delaware limited liability
    company
	 	 	 
	 	By: 	/s/ Jordan Ruddy
	 	Name:	Jordan Ruddy
	 	Title:	Authorized Signatory

 

    	14

    	 

    

  

SCHEDULE
9.1(c)(i)

 

Asset Management
Agreement

 

    	15

    	 

    

  

SCHEDULE
9.1(c)(iii)

 

Management
Committee

 

(i)         Subject
to this Schedule 9.1(c)(iii), and Section 9.1 of the Agreement, each member of the Management Committee, shall hold
office until death, resignation or removal at the pleasure of the Manager and Member that appointed him or her. If a vacancy occurs
on the Management Committee, the Manager with the right to appoint and remove such vacating Representative shall appoint his or
her successor. A Manager shall lose its right to have its Representatives vote on any item that does not constitute a Major Decision,
as of the date on which such Manager ceases to be a Manager, including by means of removal under Section 9.1(g), or as
otherwise provided in this Agreement. If Bluerock transfers all or a portion of its membership interest to a transferee permitted
by Section 12 of the Agreement, such transferee shall automatically, and without any further action or authorization by
any Manager or Member, succeed to the rights and powers of Bluerock as may be agreed to between Bluerock which is transferring
the membership interest, on the one hand, and the permitted transferee to which the membership interest is being transferred,
on the other hand, including the shared or unilateral right to appoint the Representatives that Bluerock was theretofore entitled
to appoint pursuant hereto. Likewise, if Bell transfers all or a portion of its membership interest to a transferee permitted
pursuant to Section 12 of the Agreement, such permitted transferee shall automatically, and without any further action
or authorization by any Manager or Member, succeed to the rights and powers of Bell as may be agreed to between Bell which is
transferring the membership interest, on the one hand, and the permitted transferee to which the membership interest is being
transferred, on the other hand, including the shared or unilateral right to appoint the Representatives that Bell was theretofore
entitled to appoint pursuant hereto.

 

(ii)         The
Management Committee shall meet at least once every quarter (unless waived by mutual agreement of the Managers) and as otherwise
required. The only Representatives required to constitute a quorum for a meeting of the Management Committee shall be one (1)
Representative appointed by Bluerock and one (1) Representative appointed by Bell; provided, however, that if Bluerock or
Bell has not appointed at least one (1) Representative to the Management Committee at the time of such meeting or a Representative
of Bluerock or Bell
does not appear after two (2) due notices of such meeting, then a quorum for a meeting of the Management Committee shall
be one (1) Representative appointed by Bluerock or Bell, as applicable.

 

(iii)         Each
of the two (2) Representatives appointed by Bluerock shall be entitled to cast two (2) votes on any matter that comes before the
Management Committee and each of the Representatives appointed by Bell shall be entitled to cast one (1) vote on any matter that
comes before the Management Committee. Approval by the Management Committee of any matter (other than matters which are Major
Decisions or which may be made unilaterally by a Member as set forth in this Agreement) shall require the affirmative vote of
at least a majority of the votes of the Representatives then in office voting at a duly held meeting of the Management Committee.
Any matter disapproved by Bell shall be subject to the Mediation provisions of Section 16 of the Agreement, so long as
express written notice of the determination to mediate is provided by Bell and received by Bluerock within ten (10) business days
of such decision of the Management Committee.

 

    	16

    	 

    

  

(iv)         Any
meeting of the Management Committee may be held by conference telephone call, video conference or through similar communications
equipment by means of which all persons participating in the meeting can communicate with each other. Participation in a telephonic
and/or video conference meeting held pursuant hereto shall constitute presence in person at such meeting.

 

(v)          Any
action required or permitted to be taken at a meeting of the Management Committee may be taken without a meeting, without prior
notice and without a vote if (X) a consent or consents in writing, setting forth the action so taken, shall be signed by the Representatives
having not less than the minimum of votes that would be necessary to authorize or take such action at a meeting at which all Representatives
entitled to vote thereon were present and voted and (Y) prior written notice of such proposed action is given to all Representatives
in the manner provided herein. All consents shall be filed with the minutes of the proceedings of the Management Committee.

 

(vi)         The
initial Representatives of Bluerock are James Babb and Jordan Ruddy, and the initial Representatives of Bell are John Tomlinson
and Nickolay Bochilo.

 

    	17

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