Document:

EX4.1

 Exhibit 4.1 

FISCAL AND PAYING AGENCY AGREEMENT 

Between 
 DISCOVER BANK

 Issuer  

and 
 U.S. BANK NATIONAL
ASSOCIATION 
 Fiscal and Paying Agent 
  

 
 Dated as of
June 4, 2015 
  
  

3.100% Notes Due 2020 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
		
	ARTICLE 1 APPOINTMENT	  	 	1	 
			
	Section 1.1.	 	 Appointment of Fiscal and Paying Agent
	  	 	1	 
		
	ARTICLE 2 THE NOTES	  	 	1	 
			
	Section 2.1.	 	 Form of Notes
	  	 	1	 
	Section 2.2.	 	 Certifications of Authorized Representatives of the Bank
	  	 	2	 
	Section 2.3.	 	 Authentication and Delivery
	  	 	2	 
	Section 2.4.	 	 Denominations; Issuance of Certificated Securities
	  	 	3	 
	Section 2.5.	 	 Principal Amount; Reopening
	  	 	4	 
	Section 2.6.	 	 Security Register; Registration of Transfer and Exchange
	  	 	4	 
	Section 2.7.	 	 Persons Deemed Owners
	  	 	5	 
	Section 2.8.	 	 Cancellation of Unissued Global Notes
	  	 	5	 
	Section 2.9.	 	 Mutilated, Stolen or Destroyed Notes
	  	 	5	 
	Section 2.10.	 	 Redemption
	  	 	5	 
		
	ARTICLE 3 THE FISCAL AND PAYING AGENT	  	 	6	 
			
	Section 3.1.	 	 Payment of Notes
	  	 	6	 
	Section 3.2.	 	 Information Regarding Amounts Payable
	  	 	6	 
	Section 3.3.	 	 Deposit of Funds
	  	 	6	 
	Section 3.4.	 	 Disposition of Funds Held for Payment of Notes
	  	 	7	 
	Section 3.5.	 	 Receipt and Delivery of Notices
	  	 	7	 
	Section 3.6.	 	 Additional Responsibilities
	  	 	7	 
	Section 3.7.	 	 Miscellaneous
	  	 	8	 
		
	ARTICLE 4 LIABILITY AND INDEMNIFICATION	  	 	8	 
			
	Section 4.1.	 	 Liability
	  	 	8	 
	Section 4.2.	 	 Indemnification
	  	 	9	 
	Section 4.3.	 	 Agents and Advisors
	  	 	9	 
		
	ARTICLE 5 RESIGNATION OR REMOVAL OF FISCAL AND PAYING AGENT; SUCCESSION	  	 	9	 
			
	Section 5.1.	 	 Resignation or Removal
	  	 	9	 
	Section 5.2.	 	 Successor Fiscal and Paying Agent
	  	 	10	 
	Section 5.3.	 	 Successor by Merger, Etc.
	  	 	10	 
		
	ARTICLE 6 MISCELLANEOUS	  	 	10	 
			
	Section 6.1.	 	 Compensation of the Fiscal and Paying Agent
	  	 	10	 
	Section 6.2.	 	 Reliance on Opinions of Counsel or Officer’s Certificate
	  	 	11	 

  
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	Section 6.3.		 Notes Held by Fiscal and Paying Agent
		 	11	 
	Section 6.4.		 Notices
		 	11	 
	Section 6.5.		 Parties
		 	12	 
	Section 6.6.		 Governing Law
		 	12	 
	Section 6.7.		 Separability
		 	12	 
	Section 6.8.		 Effect of Headings
		 	12	 
	Section 6.9.		 Amendments
		 	12	 
	Section 6.10.		 Events of Default; Rescission
		 	13	 
	Section 6.11.		 Actions Due on Saturdays, Sundays and Holidays
		 	14	 
	Section 6.12.		 Agreement to Pay Attorneys’ Fees and Other Expenses
		 	14	 
	Section 6.13.		 Survival
		 	14	 
	Section 6.14.		 No Implied Waivers
		 	14	 
	Section 6.15.		 Counterparts
		 	14	 
	Section 6.16.		 Term
		 	14	 
	Section 6.17.		 Complete Agreement
		 	14	 

  
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 This FISCAL AND PAYING AGENCY AGREEMENT (the “Agreement”) is entered into as of
June 4, 2015 by and between Discover Bank, as Issuer (the “Bank”), and U.S. Bank National Association as Fiscal and Paying Agent (the “Fiscal and Paying Agent”). 

W I T N E S S E T H: 

WHEREAS, the Bank proposes to issue and sell $1,250,000,000 of its 3.100% Notes Due 2020 (the “Notes”) in minimum denominations of
$250,000 to certain institutional accredited investors in an offering that is exempt from registration with the Securities and Exchange Commission; and 

WHEREAS, the Bank desires to appoint the Fiscal and Paying Agent as fiscal and paying agent of the Bank with respect to the preparation,
authentication, delivery, registration and payment of the Notes; 
 NOW, THEREFORE, in consideration of the mutual promises, covenants,
conditions and agreements set forth herein, the parties hereby agree as follows: 
 ARTICLE 1 

APPOINTMENT 

Section 1.1. Appointment of Fiscal and Paying Agent. The Fiscal and Paying Agent is hereby appointed as fiscal and paying
agent for the Notes on the terms and conditions specified in this Agreement and in the Notes, and the Fiscal and Paying Agent hereby accepts such appointment. The Bank hereby appoints the Fiscal and Paying Agent as registrar for the Notes. 

ARTICLE 2 
 THE NOTES

 Section 2.1. Form of Notes. The Notes will be represented by one or more global certificates, each such
certificate hereinafter called a “Global Note.” All Global Notes shall be registered in the name of The Depository Trust Company (“DTC”), as depository, or its nominee or a successor depository or nominee. All Global Notes shall
be in substantially the form attached hereto as Exhibit A and may have such appropriate insertions, omissions, variations or substitutions as are required or permitted by, and not inconsistent with, this Agreement, and may also have such letters,
numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any applicable law or with any applicable rules or regulations made pursuant thereto or with the rules or regulations of any
securities exchange or governmental agency or as may, consistently herewith, be determined by the officers of the Bank executing such Global Notes, as evidenced by their execution thereof. Beneficial interests in the Global Notes will be shown on,
and transfers thereof will be effected only through, records maintained by DTC or its nominee and its participants. 

 Section 2.2. Certifications of Authorized Representatives of the Bank. 

(a) Any instruction given by the Bank to the Fiscal and Paying Agent under this Agreement shall be in the form of an Officer’s
Certificate. For the purposes of this Agreement, “Officer’s Certificate” means a certificate signed by an Authorized Representative (defined below) and delivered to the Fiscal and Paying Agent. 

(b) On or before the original issue date, the Bank shall furnish the Fiscal and Paying Agent with an Officer’s Certificate of the Bank
certifying the incumbency and specimen signatures of the representatives of the Bank who are authorized to instruct the Fiscal and Paying Agent regarding the completion and delivery of the Global Notes and take other actions hereunder (each an
“Authorized Representative”). The Bank shall notify the Fiscal and Paying Agent promptly in writing if any of such persons ceases to be so authorized or if any additional person becomes so authorized together, in the case of an additional
authorized person, with evidence satisfactory to the Fiscal and Paying Agent that such person has been so authorized and any such change shall become effective on the Business Day (as hereinafter defined) on which the Fiscal and Paying Agent
receives notice thereof. 
 Section 2.3. Authentication and Delivery. 

(a) All Notes shall be issued and delivered in accordance with the terms of this Agreement, the Global Notes and the Letter of Representations
from the Bank to DTC dated November 11, 2009. All instructions regarding the completion and delivery of Notes shall be given in writing by an Authorized Representative by telex, telecopy, electronic transmission or other means acceptable to the
Fiscal and Paying Agent. Upon receipt of such written instructions as described in the preceding sentence, the Fiscal and Paying Agent shall: 

(i) manually authenticate such Global Note or Global Notes by any one of the officers of the Fiscal and Paying Agent duly authorized and
designated by it for such purpose; and 
 (ii) deliver such Global Note or Global Notes to DTC or its nominees or retain and hold such
Global Note or Global Notes as custodian for DTC pursuant to DTC’s instructions. 
 (b) Each Note shall bear an original issue date
which shall remain the same for all Notes subsequently issued upon transfer, exchange or substitution of such original Note regardless of the date of issuance of any such subsequently issued Note. 

(c) All instructions given by the Bank pursuant to this Section 2.3 must be received by the Fiscal and Paying Agent by 11 a.m., New
York City time, on the Business Day (except as indicated in Sections 3.1(b) and 6.11) preceding the original issue date for the Global Notes. For all purposes under this Agreement, the term “Business Day” shall mean any day
that is not a Saturday or Sunday and that, in The City of New York, New York, is not a day on which banking institutions are generally authorized or required by law to be closed. The Fiscal and Paying Agent shall not be required to perform any
duties on any day that is not a Business Day. 

  
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 (d) The Fiscal and Paying Agent shall have no responsibility to the Bank to determine by whom a
facsimile signature of the Bank shall be affixed on the Global Notes, or whether a signature of an Authorized Representative is genuine, if such signature resembles the specimen signature of such Authorized Representative on the Officer’s
Certificate delivered pursuant to Section 2.2(b). The Fiscal and Paying Agent shall incur no liability to the Bank in acting or refraining from taking any action hereunder upon instructions contemplated hereby which the recipient thereof
believed in good faith to have been given by an Authorized Representative. In the event a discrepancy exists between the instructions as originally received by the Fiscal and Paying Agent and any subsequent instruction relating to the same subject
matter, the original instructions will be deemed controlling if action has already been taken in reliance thereon. The Fiscal and Paying Agent agrees to give notice to the Bank of such discrepancy reasonably promptly upon the discovery by the Fiscal
and Paying Agent of such discrepancy. 
 (e) Each instruction given to the Fiscal and Paying Agent in accordance with this
Section 2.3 shall constitute a representation and warranty to the Fiscal and Paying Agent by the Bank that (i) the issuance and delivery of the Global Notes to which the instruction relates have been duly and validly authorized by
the Bank, (ii) such Global Notes, when completed, authenticated and delivered pursuant hereto, will constitute valid and legally binding obligations of the Bank and (iii) the Fiscal and Paying Agent’s appointment to act for the Bank
hereunder has been duly authorized by all necessary corporate action of the Bank. 
 (f) The Bank further represents and warrants to the
Fiscal and Paying Agent that the Bank is free to enter into this Agreement and to perform the terms hereof. 
 Section 2.4.
Denominations; Issuance of Certificated Securities. 
 (a) Except as provided in paragraph (b) of this Section 2.4,
the Notes shall be issuable only in book-entry form, without coupons, in denominations of $250,000 and any amount in excess thereof which is an integral multiple of $1,000. 

(b) If at any time (i) DTC notifies the Bank in writing that it is unwilling or unable to act as depository for the Notes or if DTC ceases
to be a clearing agency registered pursuant to Section 17A of the Securities Exchange Act of 1934, as amended, and a successor depository is not appointed by the Bank within 90 days after the effective date of DTC’s ceasing to act as
depository for the Notes, (ii) the Bank, at its option, notifies the Fiscal and Paying Agent in writing that it elects to cause the issuance of Notes in definitive form or (iii) any event shall have happened and be continuing which, after
notice or lapse of time, or both, would constitute an Event of Default as defined in the Notes, the Bank will execute, and the Fiscal and Paying Agent will, upon the execution of the then standard form of the Fiscal and Paying Agent’s agreement
for certificated securities and upon receipt of instructions in writing from the Bank, authenticate and deliver Notes of like tenor and terms in definitive form in an aggregate principal amount equal to the principal amount of the Global Notes then
outstanding in exchange for such Global Notes. Any such certificated Notes will be issued in fully registered form to the persons identified by DTC as the beneficial owners thereof, without coupons, in denominations of $250,000 or any amount in
excess thereof which is an integral multiple of $1,000. Such certificated Notes may not subsequently be exchanged by a holder for Notes in denominations of less than $250,000. If Notes are issued in definitive form hereunder, payment and other terms
related to such Notes will be as set forth on the face thereof. 

  
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 Section 2.5. Principal Amount; Reopening. The aggregate principal amount of
the Notes that may be authenticated and issued under this Agreement is initially limited to $1,250,000,000, except for Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to
Sections 2.4, 2.6 or 2.9; provided, however, that the Bank may, so long as no Event of Default (as defined in the Notes) has occurred and is continuing, reopen the Notes to issue additional Notes on the same terms and conditions
(except for issue date and offering price), with the same CUSIP number as the Notes and which shall form a single series with the originally issued Notes, without the consent of the holders of the Notes; provided, however, that such
additional Notes must be fungible with the originally issued Notes for U.S. federal income tax purposes. As used herein, the term “Notes” includes any such additional Notes. 

Section 2.6. Security Register; Registration of Transfer and Exchange.  

(a) The Fiscal and Paying Agent shall, so long as any of the Notes remain outstanding, maintain records in accordance with its customary
practices, including all forms of transfer for the Notes and shall: (i) keep at its corporate trust office or the office of its affiliate in New York City, a register (the “Security Register”) in such form as the Fiscal and Paying
Agent may determine, in which, subject to such reasonable requirements as it may prescribe, it shall provide for the registration of the Global Notes and of any exchanges or transfers thereof and (ii) maintain records showing for each
outstanding Note issued in definitive form under Section 2.4(b), the principal amount, maturity date, interest rate and other terms thereof, the date of original issue and all subsequent transfers and consolidations or exchanges. 

(b) All Notes presented for transfer shall be duly endorsed or be accompanied by a written instrument of transfer with such evidence of due
authorization and guarantee of signature as may reasonably be required by the Fiscal and Paying Agent. Upon receipt by the Bank of a Note submitted for transfer, the Bank will execute, and the Fiscal and Paying Agent will authenticate, one or more
new Notes of like tenor and terms in an aggregate principal amount equal to the principal amount of the Note presented for transfer in accordance with the transfer instructions accompanying same. The Fiscal and Paying Agent shall date its signature
on the date it signs such Notes. No service charge (other than any cost of delivery) shall be imposed by the Fiscal or Paying Agent for any exchange or registration of transfer of a Note but the Bank or Fiscal and Paying Agent may require the
payment of a sum sufficient to cover any stamp or other tax or governmental charge that may be imposed in connection therewith or presentation of evidence that such tax or charge has been paid. Notwithstanding anything to the contrary set forth
herein, no registration or transfer shall be made on or after the fifteenth day immediately preceding the Maturity Date (as defined in the Note). 

(c) Notwithstanding anything in this Agreement to the contrary, unless Notes are issued in definitive form under Section 2.4(b)
hereof, beneficial ownership of the Notes will only be shown on, and transfers thereof will be effected only through, records maintained by DTC, its nominees or its participants (as defined in the offering circular dated June 1, 2015 relating
to the offering of the Notes). The Fiscal and Paying Agent shall have no responsibility 

  
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or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Note or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests, and it shall be fully protected in acting or refraining from acting on any such information provided by DTC with respect thereto. 

Section 2.7. Persons Deemed Owners. Prior to due presentment of a Note for registration or transfer, the Bank, the Fiscal
and Paying Agent and any agent of the Bank or the Fiscal and Paying Agent may treat the person in whose name such Note is registered as the owner of such Note for the purpose of receiving payments of principal and interest, if any, and for all other
purposes whatsoever, whether or not such Note be overdue, and neither the Bank nor the Fiscal and Paying Agent shall be affected by notice to the contrary. 

Section 2.8. Cancellation of Unissued Global Notes. Promptly upon the written request of the Bank, the Fiscal and Paying
Agent shall cancel and return to the Bank all unissued Global Notes in its possession. 
 Section 2.9. Mutilated, Stolen or
Destroyed Notes. In case a Note shall at any time become mutilated, destroyed, lost or stolen and such Note or evidence satisfactory to the Bank or the Fiscal and Paying Agent of the loss, theft, or destruction thereof (together with
indemnity satisfactory to the Bank and the Fiscal and Paying Agent and such other documents of proof as may be required by them) shall be delivered to the Bank, a new Note of like tenor will be issued by the Bank in exchange for the Note so
mutilated, or in lieu of the Note so destroyed or lost or stolen. The Fiscal and Paying Agent will authenticate any such substituted Note and deliver the same on the written request or authorization of an Authorized Representative. All expenses and
reasonable charges associated with procuring the indemnity referred to above and with the preparation, authentication and delivery of a new Note shall be borne by the holder of the Note so mutilated, destroyed, lost or stolen. If any Note which has
matured or is about to mature shall become mutilated, destroyed, lost or stolen, the Bank may, instead of issuing a substitute Note, pay or authorize the payment of the same (without surrender thereof except in the case of a mutilated Note) upon
compliance by the holder thereof with the provisions of this Section 2.9 (including delivery of an indemnity satisfactory to the Bank and the Fiscal and Paying Agent and such other documents of proof as may be required by them). 

Section 2.10. Redemption. 

(a) No sinking fund will be provided for the Notes. 

(b) The Notes are subject to redemption at the option of the Bank, at any time after May 4, 2020, in whole or in part on no less than 10
nor more than 60 days’ prior notice delivered to the Holders. The Notes will be redeemable at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest. If fewer than all of the Notes
are to be redeemed, the Fiscal and Paying Agent will select the Notes for redemption on a pro rata basis, by lot or by such other method in accordance with the Depository’s procedures. The Notes will be redeemed in denominations of $250,000 and
integral multiples of $1,000 in excess thereof. If any Notes are to be redeemed in part only, the notice of redemption that relates to the Notes will state the portion of the Notes to be redeemed. Unless the Bank defaults in payment of the
redemption price, on and after the redemption date, interest will cease to accrue on the Notes or the portions of the Notes called for redemption. 

  
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 ARTICLE 3 

THE FISCAL AND PAYING AGENT 

Section 3.1. Payment of Notes.  

(a) Payments of principal and interest payable at the Maturity Date will be made by wire transfer in immediately available funds to the bank
accounts in the United States designated by the holders of the Notes, provided that the Notes are presented to the Fiscal and Paying Agent in time for the Fiscal and Paying Agent to make such payments in such funds in accordance with its normal
procedures and subject to Section 3.3 hereof. 
 (b) Payments of interest (other than interest payable at Maturity Date) will be
made on June 4 and December 4 of each year, commencing on December 4, 2015 to the holders of the Notes entitled thereto as of the close of business on the June 1 or December 1, as the case may be (whether or not such day is
a Business Day) (each such date, a “Regular Record Date”) immediately preceding the interest payment date, by wire transfer of immediately available funds to the bank accounts in the United States designated by such holders in a written
notice received by the Fiscal and Paying Agent not later than the applicable Regular Record Date and subject to Section 3.3 hereof. 

(c) The Fiscal and Paying Agent is authorized and, subject to its prior receipt of funds in respect thereof, will pay amounts falling due in
respect of any Note duly presented for payment as provided in paragraph (a) of this Section 3.1 as long as the Global Note representing such Note has been authenticated by one of the Fiscal and Paying Agent’s officers who was
duly designated and authorized for such purpose at the time of such authentication, notwithstanding that said officer is no longer so designated or the authority of said officer has been terminated between the time of execution and the time of
payment. 
 (d) The Fiscal and Paying Agent shall have no obligation to use its own funds for any payment of principal or interest on the
Notes or for any other purpose pursuant to this Agreement. 
 Section 3.2. Information Regarding Amounts Payable. The
Fiscal and Paying Agent shall, as soon as practicable after each record date for the payment of interest on the Notes (other than interest payable on the Maturity Date), but not later than five days preceding the related interest payment date,
notify the Bank of the amount of interest to be paid on the Notes on the related interest payment date. 
 Section 3.3. Deposit
of Funds. The Bank shall deposit with the Fiscal and Paying Agent by 10 a.m., New York City time (i) on each interest payment date (other than the Maturity Date) an amount in immediately available funds sufficient to pay the interest
due on the Notes on such date and (ii) on the Maturity Date an amount in immediately available funds sufficient to pay the full principal amount of the Notes and all unpaid interest accrued thereon to the Maturity Date. 

  
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 Section 3.4. Disposition of Funds Held for Payment of Notes. 

(a) In acting under this Agreement and in connection with the Notes, the Fiscal and Paying Agent is acting solely as agent of the Bank and does
not assume any obligation or relationship of agency or trust with the holders of the Notes or the beneficial owners of the Global Notes, except that, subject to the provisions of subsection (b) of this Section 3.4, all money
deposited with the Fiscal and Paying Agent pursuant to Section 3.3 shall be held by it on behalf of the holders of the Notes and the beneficial holders of the Global Notes entitled thereto until such money is disbursed to the holders of
the Notes (subject to escheat and other unclaimed property laws) in accordance with the provisions of the Notes and this Agreement. Money deposited with the Fiscal and Paying Agent need not be segregated from other funds of the Fiscal and Paying
Agent, except to the extent required by law. The Fiscal and Paying Agent agrees that it shall not exercise any right of set-off, lien or similar claim in respect of such money deposited with the Fiscal and Paying Agent. 

(b) Any money deposited with the Fiscal and Paying Agent for the payment of the principal of or interest on any Note that remains unclaimed or
unpaid for two years after such principal or interest has become due and payable or if sooner, at the effectiveness of the resignation or removal of the Fiscal and Paying Agent, shall be remitted by the Fiscal and Paying Agent to the Bank and the
holders of the Notes entitled thereto shall thereafter, as unsecured general creditors, look only to the Bank for payment thereof as successor fiscal and paying agent, and all liability of the Fiscal and Paying Agent with respect to such money shall
thereupon cease. 
 Section 3.5. Receipt and Delivery of Notices. 

(a) Forthwith upon the receipt by the Fiscal and Paying Agent of a demand or notice from any holder of a Note in accordance with the provisions
hereof, the Fiscal and Paying Agent shall promptly forward a copy thereof to the Bank. 
 (b) On behalf of and at the request and expense of
the Bank, the Fiscal and Paying Agent shall cause to be delivered to the holders of the Notes all notices required to be given by the Bank to such holders in accordance with the provisions hereof. 

Section 3.6. Additional Responsibilities. If the Bank shall ask the Fiscal and Paying Agent to perform any duties not
specifically set forth in this Agreement as duties of the Fiscal and Paying Agent (the “Additional Responsibilities”) and the Fiscal and Paying Agent chooses to perform such Additional Responsibilities, the Fiscal and Paying Agent shall be
held to the same standard of care and shall be entitled to all the protective provisions (including, but not limited to, indemnification) set forth herein with respect to such Additional Responsibilities unless the Fiscal and Paying Agent has
entered into a separate written agreement which specifically addresses the standard of care with respect to such Additional Responsibilities. 

  
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 Section 3.7. Miscellaneous. Notwithstanding anything to the contrary herein:

 (a) in paying principal and interest on the Notes hereunder, the Fiscal and Paying Agent shall be acting as a conduit and shall not be
paying such principal or interest for its own account. In the absence of written notice from the Bank to the contrary, the Fiscal and Paying Agent shall be entitled to assume that any Note presented to it, or deemed presented to it, for payment, is
entitled to be so paid; 
 (b) the Fiscal and Paying Agent shall not be required to invest any moneys delivered to it pursuant to this
Agreement and shall have no liability for interest on any moneys received or held by it hereunder; 
 (c) the Fiscal and Paying Agent
shall not be responsible for the accuracy of any recital of any party (other than the Fiscal and Paying Agent) that is stated herein or in the Notes or in any offering materials relating thereto and makes no representations as to the validity or
enforceability of the Notes and shall incur no responsibility in respect thereto; 
 (d) the Fiscal and Paying Agent shall be protected
in acting or refraining from acting upon any notice, order, requisition, request, consent, certificate, order, opinion (including an opinion of counsel, Officer’s Certificate or both), affidavit, letter, telegram or other paper or document
deemed by it in good faith to be genuine and correct and to have been signed or sent by the proper person or persons; and 
 (e) any
action taken by the Fiscal and Paying Agent pursuant to this Agreement upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the holder of a Note shall be conclusive and
binding upon (i) all future holders of the same Note and any Note issued in exchange therefor or in place thereof, (ii) all beneficial owners of the same Note and (iii) all holders of the same Note issued in definitive form pursuant
to Section 2.4(b) hereof. 
 ARTICLE 4 

LIABILITY AND INDEMNIFICATION 

Section 4.1. Liability.  

(a) The duties and obligations of the Fiscal and Paying Agent are ministerial in nature and such duties and obligations shall be determined
solely by the express provisions of this Agreement. The Fiscal and Paying Agent will not have any fiduciary duties. The Fiscal and Paying Agent shall not be liable to the Bank, the holders of Notes or the beneficial owners of the Global Notes except
for the performance of such duties and obligations as are specifically set forth herein and no implied covenants shall be read into this Agreement against it. 

(b) The Fiscal and Paying Agent shall not be required to ascertain whether any action taken by the Bank hereunder, including (i) the
offering and sale of Notes, (ii) the issuance of such Notes or (iii) any amendment or termination of this Agreement, has been duly authorized by the Bank or is in compliance with any other agreement to which the Bank is a

  
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party (whether or not the Fiscal and Paying Agent is also a party to such other agreements) or any law or governmental regulation to which the Bank is subject. The Fiscal and Paying Agent shall
have no responsibility in the case of any default by the Bank in the performance of the Notes. 
 (c) The Fiscal and Paying Agent shall not
have any liability hereunder except in the case of its gross negligence, bad faith, willful misconduct or failure to perform in accordance with this Agreement (which failure constitutes gross negligence, bad faith or willful misconduct).
NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, IN NO EVENT SHALL THE FISCAL AND PAYING AGENT BE LIABLE FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR PUNITIVE DAMAGES. THIS LIMITATION OF LIABILITY WILL APPLY REGARDLESS OF THE FORM OF ACTION,
INCLUDING, WITHOUT LIMITATION, BREACH OF THIS CONTRACT OR TORT.  
 Section 4.2. Indemnification. The Bank agrees to
indemnify and hold harmless the Fiscal and Paying Agent, its officers, directors, employees and agents (each an “Indemnified Party”) from and against all losses, liabilities, obligations, claims, damages, costs and expenses of any kind or
nature whatsoever (including, without limitation, reasonable legal fees and expenses) relating to or arising out of the performance of its duties under this Agreement, except to the extent they are caused by the negligence, bad faith or willful
misconduct of such Indemnified Party or failure of such Indemnified Party to perform in accordance with this Agreement. In the event of resignation or removal of the Fiscal and Paying Agent, any successor to the performance of the obligations of the
Fiscal and Paying Agent as specified in this Agreement shall be entitled to rely upon this indemnity. These indemnification obligations shall survive the termination of this Agreement, including any termination pursuant to any applicable federal or
state bankruptcy law, to the extent enforceable under applicable law, and shall survive the resignation or removal of the Fiscal and Paying Agent while remaining applicable to any action taken or omitted by the Fiscal and Paying Agent while acting
pursuant to this Agreement. 
 Section 4.3. Agents and Advisors. The Fiscal and Paying Agent may execute any of the
powers hereunder or perform any duties hereunder either directly or by or through agents or advisors selected by it in good faith as it may reasonably require and will not be responsible for any negligence or misconduct on the part of any of them so
selected by the Fiscal and Paying Agent in good faith and without negligence. 
 ARTICLE 5 

RESIGNATION OR REMOVAL OF FISCAL AND PAYING AGENT; SUCCESSION 

Section 5.1. Resignation or Removal. The Fiscal and Paying Agent may at any time resign from its duties hereunder by giving
written notice of resignation to the Bank specifying the date on which such resignation shall become effective; provided, however, that such date shall not be less than 60 Business Days after such notice is given to the Bank. The Bank may at any
time remove the Fiscal and Paying Agent by giving written notice of removal to the Fiscal and Paying Agent specifying the date on which such removal shall be effective; provided, however, that such date shall not be less than 30 Business Days after
such notice is given to the Fiscal and Paying Agent. Any termination or resignation hereunder shall not affect the Fiscal and Paying Agent’s right to the payment of fees earned or charges incurred through the effective date of such termination
or resignation, as the case may be. 

  
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 Section 5.2. Successor Fiscal and Paying Agent. Upon the effective date of
such resignation or removal, the Fiscal and Paying Agent shall deliver any money then held by it pursuant to Section 3.4(a) to the successor appointed by the Bank to serve as fiscal and paying agent for the Notes and all liability of the
Fiscal and Paying Agent with respect to such money shall thereupon cease. The Fiscal and Paying Agent shall also provide such successor with a copy of its records relating to the Notes as such successor shall reasonably request. However, the Fiscal
and Paying Agent may retain copies of any records turned over for archival purposes. If such successor has not been appointed by the effective date of such resignation or removal, the Fiscal and Paying Agent shall pay such money and deliver such
records to the Bank with the same effect as though such payment were made pursuant to Section 3.4(b); it being understood and agreed that the Bank may undertake to perform any of the functions of the Fiscal and Paying Agent. The
delivery, transfer and assignment of such moneys and records by the Fiscal and Paying Agent to its successor or the Bank, as the case may be, shall be sufficient, without the requirement of any additional act or the requirement of any indemnity to
be given by the Fiscal and Paying Agent, to relieve the Fiscal and Paying Agent of all further responsibility for the exercise of the rights or the performance of the obligations vested in the Fiscal and Paying Agent pursuant to this Agreement. The
Bank shall notify, or cause the Fiscal and Paying Agent to notify, each holder of Global Notes of the appointment of any successor Fiscal and Paying Agent or the undertaking of the Bank to perform the functions of the Fiscal and Paying Agent. 

Section 5.3. Successor by Merger, Etc. Any corporation or association into which the Fiscal and Paying Agent may be
converted or merged, or with which it may be consolidated, or to which it may sell or transfer its corporate trust and agency business as a whole, or any corporation or association resulting from any such conversion, sale, merger, consolidation or
transfer to which it is a party, shall be and become successor Fiscal and Paying Agent hereunder and shall be invested with all of the rights, powers, trusts, duties and obligations of the Fiscal and Paying Agent hereunder, without the execution or
filing of any instrument or any further act. The Fiscal and Paying Agent shall provide notice to the Bank of any such conversion, merger, consolidation, sale or transfer as soon as practicable after the Fiscal and Paying Agent obtains knowledge that
such event will occur or has occurred. 
 ARTICLE 6 

MISCELLANEOUS 

Section 6.1. Compensation of the Fiscal and Paying Agent. The Bank agrees to pay the Fiscal and Paying Agent compensation
for all services rendered by the Fiscal and Paying Agent hereunder in such amounts as set forth on the Fee Schedule attached hereto and payable at such times as the Bank and the Fiscal and Paying Agent may agree to and to promptly reimburse the
Fiscal and Paying Agent for all reasonable out-of-pocket expenses (including reasonable attorneys’ fees), disbursements and advances incurred or made by the Fiscal and Paying Agent in the performance of its duties hereunder. The obligation of
the Bank pursuant to this Section 6.1 shall survive the termination of this Agreement, including any termination pursuant to any federal or state bankruptcy law, to the extent enforceable under applicable law. 

  
 10 

 Section 6.2. Reliance on Opinions of Counsel or Officer’s Certificate. 

 (a) The Fiscal and Paying Agent may, at any time, request and receive an opinion of counsel (including its in-house counsel) concerning
its duties hereunder. The Fiscal and Paying Agent shall be free to act upon the advice contained in such opinion and shall have no liability to the Bank, the holders of the Notes or the beneficial owners of the Global Notes in respect of an action
taken or omitted by the Fiscal and Paying Agent in good faith in reliance on a written opinion of such counsel (including its in-house counsel). 

(b) The Fiscal and Paying Agent shall have no liability to the Bank, the holders of the Notes or the beneficial owners of the Global Notes in
respect of an action taken or omitted by the Fiscal and Paying Agent in good faith in reliance on an Officer’s Certificate. 

Section 6.3. Notes Held by Fiscal and Paying Agent. The Fiscal and Paying Agent, in its individual or other capacity, may
become a purchaser, holder, transferor, pledgee or may otherwise own, hold or transfer any beneficial interest in any Notes and may commence or join in any action which a beneficial owner of a Note is entitled to take without any conflict with its
responsibilities pursuant to this Agreement. 
 Section 6.4. Notices. Notices and other communications hereunder shall
(except to the extent otherwise expressly provided) be in writing or given via electronic media and shall be addressed as follows, or to such other addresses as the parties hereto shall specify from time to time. 

 

					
	If to the Bank:		Discover Bank
			12 Read’s Way
			New Castle, Delaware 19720
			Attention:		Michael F. Rickert
			Telephone:		(302) 323-7184
			Telecopy:		(302) 323-7393
			Email: mikerickert@discover.com
		
	With a copy to:		Discover Financial Services
			2500 Lake Cook Road
			Riverwoods, Illinois 60015
			Attention:		D. Christopher Greene
			Telephone:		(224) 405-0330
			Telecopy:		(224) 405-4073
			Email: christophergreene@discover.com

  
 11 

					
	If to the Fiscal		U.S. Bank National Association
	And Paying Agent		100 Wall Street – Suite 1600
			New York, NY 10005
			Attention:		Corporate Trust Services
			Telephone:		212-951-8561
			Telecopy:		212-509-3384

 All notices shall be deemed given when received. All notices required to be given to the holders of Notes shall be in writing
and sent by first-class mail to such holders at their respective addresses shown in the Security Register. 
 Section 6.5.
Parties. Except for rights arising under Section 3.4(a), this Agreement is solely for the benefit of the parties hereto and their successors and assigns and nothing herein, express or implied, shall grant any benefit or any legal
or equitable right, remedy or claim under this Agreement to any other person including, without limitation, any holder of a Note or any beneficial owner of a Global Note. 

Section 6.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND, WHERE APPROPRIATE, THE LAWS OF THE UNITED STATES. 

Section 6.7. Separability. In case any provision in this Agreement shall be held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 

Section 6.8. Effect of Headings. The article and section headings herein are for convenience of reference only and shall
not affect the construction hereof. 
 Section 6.9. Amendments.  

(a) Without the consent of the holders of the Notes, the Bank and the Fiscal and Paying Agent, at any time and from time to time, may amend the
terms of this Agreement and the Notes, including amendments to the terms of the Notes designed to cure ambiguities, defects or inconsistencies; except, however, that the consent of all holders of Notes is required in order to: 

(i) change the Maturity Date of any Note, extend the time of payment on any overdue principal amount, change the coin or currency in
which any Note or the interest thereon is payable, change the definition of interest payment date contained in the Notes, reduce the principal amount of or the rate of interest on any Note, change the method of payment specified in the Notes to
other than wire transfer in immediately available funds, or impair the right of a holder of the Notes to institute suit for the enforcement of any payments of principal of or interest or other amounts on such Notes; 

  
 12 

 (ii) reduce the percentage in principal amount of Notes outstanding, the consent of whose
holders is required for any such amendment to this Agreement or the Notes; or 
 (iii) modify any of the provisions of this
Section 6.9, except to increase any such percentage or to provide that certain other provisions of this Agreement or the Notes cannot be modified or waived without the consent of the holder of each outstanding Note. 

If the consent of the holders of the Notes is required hereunder, the Bank and the Fiscal and Paying Agent shall request such consent and the
Fiscal and Paying Agent will deliver to each holder of Notes an explanation provided to it by (or on behalf of) the Bank of such amendment and the terms thereof. It shall not be necessary under this Section 6.9 for the holders of the
Notes to approve the precise form of any proposed amendment. 
 (b) Upon the execution of any amendment to this Agreement under this
Section 6.9 by the Bank and the Fiscal and Paying Agent, this Agreement shall be modified in accordance therewith, such amendment shall form a part of this Agreement for all purposes and each holder of Notes theretofore or thereafter
authenticated and delivered hereunder shall be bound thereby. The Fiscal and Paying Agent, on behalf of the Bank, shall promptly transmit by mail to each holder of Notes a notice setting forth the general terms of any amendment to this Agreement
executed under this Section 6.9. 
 (c) Before entering into any amendment to this Agreement, the Fiscal and Paying Agent shall
receive and be fully protected in relying upon an Officer’s Certificate and an opinion from counsel to the Bank that such amendment has been duly authorized, executed and delivered by the Bank and that all conditions precedent in connection
with the execution of such amendment have been satisfied. 
 Section 6.10. Events of Default; Rescission. 

(a) Upon the occurrence of an Event of Default (as defined in the Notes) or the curing of an Event of Default, the Bank will promptly notify in
writing the Fiscal and Paying Agent thereof, and the Fiscal and Paying Agent will promptly notify, by first-class mail, postage prepaid, the holders of the Notes thereof. If an Event of Default shall occur and be continuing, the holder of a Note,
upon written notice to the Bank and the Fiscal and Paying Agent, may, at its option, declare such Note to be, and, on the day such declaration shall have been delivered to the Bank and the Fiscal and Paying Agent, unless the Fiscal and Paying Agent
shall have received notice from the Bank that all Events of Default have been cured by the Bank prior to receipt by the Fiscal and Paying Agent of such declaration, such Note shall become, immediately due and payable at its principal amount,
together with accrued and unpaid interest thereon to the date of payment. 
 (b) At any time after the delivery to the Fiscal and Paying
Agent of a declaration of an Event of Default and acceleration pursuant to the provisions of a Note, the holder of a Note, by written notice evidencing its ownership interest to the Bank and the Fiscal and Paying Agent, may rescind and annul such
declaration of an Event of Default and its consequences with respect to such Note. No such rescission shall affect any subsequent Event of Default or impair any right consequent thereto. 

  
 13 

 (c) The holder of a Note may waive any past Event of Default and its consequences with respect to
such Note. No such waiver shall affect any subsequent Event of Default or impair any right consequent thereto. 
 Section 6.11.
Actions Due on Saturdays, Sundays and Holidays. If any date on which a payment, notice or other action required by this Agreement falls is other than a Business Day, then that action or payment need not be taken or made on such date, but may
be taken or made on the next succeeding Business Day on which the Fiscal and Paying Agent is open for business with the same force and effect as if made on such date. 

Section 6.12. Agreement to Pay Attorneys’ Fees and Other Expenses. In the event the Bank shall default under any of
the provisions of this Agreement and the Fiscal and Paying Agent shall employ outside attorneys or incur other expenses for the enforcement of performance or observance or any such obligation or agreement, the Bank agrees that it will on demand pay
to the Fiscal and Paying Agent the reasonable fees and expenses of such attorneys and such other reasonable expenses incurred by the Fiscal and Paying Agent. 

Section 6.13. Survival. The Fiscal and Paying Agent’s rights to compensation, reimbursement and indemnification shall
survive the termination of this Agreement, including any termination pursuant to any federal or state bankruptcy law, to the extent enforceable under applicable law. 

Section 6.14. No Implied Waivers. The right of any party under any provision of this Agreement shall not be affected by its
prior failure to require the performance by any other party under such provision or any other provision of this Agreement, nor shall the waiver by any party of a breach of any provision hereof constitute a waiver of any succeeding breach of the same
or any other provision or constitute a waiver of the provision itself or any other provision. 
 Section 6.15. Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall constitute an original but both or all of which, when taken together, shall constitute but one instrument, and shall become effective when copies hereof which,
when taken together, bear the signatures of each of the parties hereto, shall be delivered to each of the parties hereto. 

Section 6.16. Term. This Agreement shall remain in full force and effect until the earlier to occur of (i) such time
as the principal of and interest on all the Notes shall have been paid, (ii) the effective date of the resignation or removal of the Fiscal and Paying Agent or (iii) the payment of funds to the Bank in accordance with
Section 3.4(b). 
 Section 6.17. Complete Agreement. This Agreement and any appendix hereto contain the
entire understanding of the parties with respect to the subject hereof (except for any separate confidentiality agreement between the Bank and the Fiscal and Paying Agent), and no waiver, alteration or modification of any of the provisions hereof,
shall be binding unless in writing and signed by a duly authorized representative of all parties hereto. 

  
 14 

 IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT 

The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Fiscal and Paying Agent, like all
financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account
with the Fiscal and Paying Agent. The parties to this Agreement agree that they will provide the Fiscal and Paying Agent with such information as it may request in order for the Fiscal and Paying Agent to satisfy the requirements of the U.S.A.
Patriot Act. 

  
 15 

 IN WITNESS WHEREOF, the undersigned have executed this Agreement on the date first set forth
above. 
  

			
	DISCOVER BANK,
	as Issuer of the Notes
		
	By:		 /s/ Tod J. Gordon

	Name:		Tod J. Gordon
	Title:		Senior Vice President and Treasurer
	
	 U.S. BANK NATIONAL ASSOCIATION,
 as
Fiscal and Paying Agent

		
	By:		 /s/ K. Wendy Kumar

	Name:		K. Wendy Kumar
	Title:		Vice President

  
 16 

 EXHIBIT A 

FORM OF GLOBAL NOTE 
 THIS NOTE IS NOT
REQUIRED TO BE, AND IS NOT, REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). 
 THIS OBLIGATION IS NOT A DEPOSIT
AND IS NOT INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION (THE “FDIC”) OR ANY OTHER GOVERNMENT AGENCY OR INSTRUMENTALITY AND IS SUBJECT TO INVESTMENT RISK, INCLUDING POSSIBLE LOSS OF PRINCIPAL. THE OBLIGATIONS OF
DISCOVER BANK (THE “BANK”) EVIDENCED BY THIS NOTE ARE UNSECURED AND UNSUBORDINATED INDEBTEDNESS OF THE BANK AND RANK PARI PASSU AMONG THEMSELVES AND OTHER UNSECURED AND UNSUBORDINATED INDEBTEDNESS OF THE BANK BUT THEY ARE SUBORDINATE AND
JUNIOR IN RIGHT OF PAYMENT TO THE BANK’S OBLIGATIONS TO ITS DEPOSITORS AND OTHER OBLIGATIONS ENTITLED TO ANY PRIORITIES OR PREFERENCES, ARE INELIGIBLE AS COLLATERAL FOR A LOAN BY THE BANK AND ARE NOT SECURED.  

THIS NOTE IS AN OBLIGATION SOLELY OF THE BANK AND WILL NOT BE AN OBLIGATION OF, OR OTHERWISE GUARANTEED BY, DISCOVER FINANCIAL SERVICES OR ANY OF THE
BANK’S OTHER AFFILIATES. 
 THIS NOTE IS ISSUABLE ONLY IN FULLY REGISTERED FORM IN MINIMUM DENOMINATIONS OF $250,000 AND INTEGRAL MULTIPLES OF $1,000
IN EXCESS THEREOF. EACH OWNER OF A BENEFICIAL INTEREST IN THIS NOTE MUST BE AN INSTITUTIONAL INVESTOR WHO IS AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501 UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND IS REQUIRED TO HOLD A
BENEFICIAL INTEREST IN A $250,000 PRINCIPAL AMOUNT OR ANY INTEGRAL MULTIPLE OF $1,000 IN EXCESS THEREOF OF THIS NOTE AT ALL TIMES. 

Registered Principal Amount: 

No.: 
 CUSIP No.:
25466A AG6  
 ISIN No.: US25466AAG67  

Common Code: 121208768  

  
 A-1 

 DISCOVER BANK 

3.100% Note Due 2020 
 This 3.100% Note Due 2020
(the “Security”) is registered in the name of CEDE & CO., the nominee of The Depository Trust Company (the “Depository”), 55 Water Street, New York, New York, and may not be transferred except as a whole by the nominee
of the Depository to another nominee of the Depository or to the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository unless and until this Security is exchanged in whole or in part
for Securities in definitive form. Unless this certificate is presented by an authorized representative of the Depository to the Corporate Trust Department of U.S. Bank National Association, as Fiscal and Paying Agent or any duly appointed successor
Fiscal and Paying Agent (the “Fiscal and Paying Agent”), and any certificate issued is registered in the name of Cede & Co. or such other name as is requested in writing by an authorized representative of the Depository (and any
payment is made to Cede & Co. or to such other entity as is requested in writing by an authorized representative of the Depository), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE OR TO ANY PERSON IS WRONGFUL, inasmuch as
the registered owner hereof, Cede & Co., has an interest herein. 
 The Bank, for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal amount of                  ($             ) on June 4, 2020 (the
“Maturity Date”) and to pay interest from June 4, 2015, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, at the rate of 3.100% per annum (calculated on the basis of a 360-day
year of twelve 30-day months), on the unpaid principal hereof until said principal amount has been paid in full or duly made available for payment, semiannually in arrears on June 4 and December 4 of each year, commencing December 4,
2015 and on the Maturity Date (each, an “Interest Payment Date”). Payments will include interest accrued to (but excluding) the relevant Interest Payment Date. All payments on this Security shall be applied first to accrued interest and
the balance, if any, to principal. 
 If the Maturity Date or any other Interest Payment Date falls on a day that is not a Business Day (as defined below),
the related payment shall be made on the next succeeding Business Day with the same force and effect as if made on the day such payment was due, and no interest shall accrue on the amount so payable for the period from and after such Maturity Date
or Interest Payment Date, as the case may be. The term “Business Day” means any day that is not a Saturday or Sunday and that is not a day on which banking institutions are generally authorized or required to be closed in The City of New
York, New York. 
 Reference is made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as though fully set forth at this place. 
 Unless the certificate of authentication hereon has been executed by the Fiscal
and Paying Agent by the manual signature of one of its authorized signatories, this Security shall not be valid or obligatory for any purpose. 

  
 A-2 

 IN WITNESS WHEREOF, the Bank has caused this Security to be duly executed and its corporate seal to be hereunto
affixed and attested. 
  

							
	 		 		DISCOVER BANK
			
	(CORPORATE SEAL)		By:		  

			
	Attest:				
				
	By:		  
				
	Name:		  
				
	Title:		  
				
			
	This is one of the Securities referred to in the within-mentioned Fiscal and Paying Agency Agreement:				
			
	 U.S. BANK NATIONAL ASSOCIATION,
 as
Fiscal and Paying Agent
				
				
	By:		  
				
			
	Dated: June 4, 2015				

  
 A-3 

 Form of Reverse Side of Note 

1. This Security is one of a duly authorized issue of securities of the Bank, designated as its “3.100% Notes Due 2020” (the
“Securities”), initially limited in aggregate principal to $1,250,000,000. The Bank may, so long as no Event of Default (as defined below) has occurred and is continuing and without the consent of the Holders (as defined below) hereof,
issue additional Securities and thereby increase such aggregate principal amount in the future, on the same terms and conditions (except for issue date and offering price) and with the same CUSIP number as this Security; provided, however,
that such additional Securities shall be consolidated and form a single series with this Security only if such additional Securities are fungible with this Security for U.S. federal income tax purposes. The Bank, for the benefit of the registered
holders from time to time of the Securities (collectively, the “Holders”), has entered into a Fiscal and Paying Agency Agreement, dated as of June 4, 2015 (as the same may be amended, supplemented or otherwise modified from time to
time, the “Fiscal and Paying Agency Agreement”), between the Bank and the Fiscal and Paying Agent. Reference is hereby made to the Fiscal and Paying Agency Agreement (copies of which are on file and available for inspection during normal
business hours at the offices of the Fiscal and Paying Agent at U.S. Bank National Association, 100 Wall Street – Suite 1600, New York, NY 10005, Attention: Corporate Trust Administration, or at such other place or places as the Fiscal and
Paying Agent shall designate by notice to the Holder in whose name this Security is registered on the Security Register (as defined in Section 3 of this Security)), for a statement of the further rights of the Holders and the further rights,
limitations of rights, duties and indemnities thereunder of the Bank and the Fiscal and Paying Agent and of the terms upon which the Securities are, and are to be, authenticated and delivered. 

Payment of the principal and interest payable on the Maturity Date will be made by wire transfer in immediately available funds to a bank
account in the United States designated by the Holder, upon presentation and surrender of this Security at the office of the Fiscal and Paying Agent or its affiliate in New York City or at such other place or places as the Fiscal and Paying Agent
shall designate by notice to the Holder, provided that this Security is presented to the Fiscal and Paying Agent in time for the Fiscal and Paying Agent to make such payments in such funds in accordance with its normal procedures and subject to the
deposit by the Bank of sufficient funds to enable the Fiscal and Paying Agent to make such payments. Payments of interest (other than interest payable on the Maturity Date) shall be made by wire transfer in immediately available funds to a bank
account in the United States designated by the Holder in a written notice received by the Fiscal and Paying Agent not later than the applicable Record Date (as defined below). Interest payable on any Interest Payment Date (other than the Maturity
Date) shall be payable to the Holder in whose name this Security is registered at the close of business on the June 1 or December 1, as the case may be (whether or not a Business Day), immediately preceding the Interest Payment Date (each
such date being referred to herein as a “Regular Record Date”), notwithstanding the cancellation of this Security after such Regular Record Date and prior to or on such Interest Payment Date. Any interest so payable, but not punctually
paid or made available for payment, on any Interest Payment Date will forthwith cease to be payable to the Holder on such Regular Record Date and such defaulted interest will be paid to the Person in whose name this Security is registered at the
close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Bank (a “Special Record Date”), notice of which shall be given to the Holder of this Security not less than 10 days prior to such
Special 

  
 A-4 

 
Record Date (the Regular Record Date and Special Record Date are referred to herein collectively as “Record Dates”). Interest payable on this Security on the Maturity Date will be
payable to the Holder to whom the principal of this Note is payable on such date. To the extent permitted by applicable law, interest shall accrue, at the rate at which interest accrues on the principal of this Security, on any amount of principal
of or interest on this Security not paid when due. All payments on this Security shall be applied first to accrued interest and the balance, if any, to principal. 

2. Payments of principal of and interest on this Security shall be made in such coin or currency of the United States of America as at the time
of payment shall be legal tender for the payment of public and private debts. Until the date on which all of the Securities shall have been surrendered or delivered to the Fiscal and Paying Agent for cancellation or destruction, or become due and
payable and a sum sufficient to pay the principal of and interest on all of the Securities shall have been made available for payment and either paid or returned to the Bank as provided herein and in the Fiscal and Paying Agency Agreement, the
Fiscal and Paying Agent or its affiliate shall at all times maintain an office or agency in New York City, where Securities may be presented or surrendered for payment; provided that, any successor Fiscal and Paying Agent appointed by the Bank as
permitted by Section 10 of this Security, or the Bank upon undertaking the performance of the functions of Fiscal and Paying Agent, shall not be required to maintain an office in New York City but shall be required to maintain an office or
agency the location of which shall be communicated promptly to the Holder of this Security. 
 3. Except as otherwise provided on the face of
this Security, this Security is transferable in whole or in part, and may be exchanged for a like aggregate principal amount of Securities of other authorized denominations, by the Holder in person, or by his, her or its attorney duly authorized in
writing, at the office of the Fiscal and Paying Agent or its affiliate in New York City. The Fiscal and Paying Agent shall maintain a register providing for the registration of the Securities and any exchange or transfer thereof (the “Security
Register”). Upon surrender or presentation of this Security for exchange or registration of transfer, the Bank shall execute and the Fiscal and Paying Agent shall authenticate and deliver in exchange therefor a Security or Securities, each in a
denomination of $250,000 or any amount in excess thereof which is an integral multiple of $1,000 which has or have an aggregate denomination equal to the denomination of this Security and is or are registered in such name or names requested by the
Holder. Any Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Fiscal and Paying Agent) be duly endorsed, or accompanied by a written instrument of transfer with such evidence of due
authorization and guarantee of signature as may reasonably be required by the Fiscal and Paying Agent in form satisfactory to the Fiscal and Paying Agent, duly executed by the Holder or his, her or its attorney duly authorized in writing, and with
such tax identification number or other information for each person in whose name a Security is to be issued as the Fiscal and Paying Agent may reasonably request to comply with applicable law. No exchange or registration of transfer of this
Security shall be made on or after the fifteenth day immediately preceding the Maturity Date. 
 No service charge (other than any cost of
delivery) shall be imposed for any exchange or registration of transfer of this Security, but the Bank or Fiscal and Paying Agent may require the payment of a sum sufficient to cover any stamp or other tax or governmental charge that may be imposed
in connection therewith (or presentation of evidence that such tax or charge has been paid). 

  
 A-5 

 Prior to due presentment of this Security for registration of transfer, the Bank, the Fiscal and
Paying Agent and their respective agents may treat the Holder in whose name this Security is registered in the Security Register as the absolute owner of this Security for the purpose of receiving payments of principal of and interest on this
Security and for all other purposes whatsoever, whether or not this Security be overdue, and the Bank and the Fiscal and Paying Agent shall not be affected by any notice to the contrary. 

4. This Security is not subject to repayment at the option of the Holder prior to the Maturity Date and is not subject to any sinking fund.

 5. This Security is subject to redemption at the option of the Bank, at any time after May 4, 2020, in whole or in part on no less
than 10 nor more than 60 days’ prior notice delivered to the Holders. This Security will be redeemable at a redemption price equal to 100% of the principal amount of this Security to be redeemed, plus accrued and unpaid interest. If fewer than
all of the Securities are to be redeemed, the Fiscal and Paying Agent will select the Securities for redemption on a pro rata basis, by lot or by such other method in accordance with the Depository’s procedures. This Security will be redeemed
in denominations of $250,000 and integral multiples of $1,000 in excess thereof. If any Securities are to be redeemed in part only, the notice of redemption that relates to such Securities will state the portion of such Securities to be redeemed.
Unless the Bank defaults in payment of the redemption price, on and after the redemption date, interest will cease to accrue on such Securities or the portions of such Securities called for redemption. 

6. The indebtedness of the Bank evidenced by this Security, including the principal and interest, is unsecured and unsubordinated but it is
subordinate and junior in right of payment to the Bank’s obligations to its depositors and other obligations that are entitled to any priorities or preferences, such as its obligations under bankers’ acceptances and letters of credit and
its obligations to any Federal Reserve Bank or the Federal Deposit Insurance Corporation (“FDIC”) and to any rights acquired by the FDIC as a result of loans made by the FDIC to the Bank or the purchase or guarantee of any of its assets by
the FDIC pursuant to the provisions of 12 U.S.C. Section 1823(c), (d) or (e), in each case whether outstanding at the date of this Security or hereafter incurred (except any such obligations which rank on a parity with or junior to this
Security). In the case of any insolvency proceedings, receivership, conservatorship, reorganization, readjustment of debt, marshalling of assets and liabilities or similar proceedings or any liquidation, dissolution or winding-up of the Bank,
whether voluntary or involuntary, all such obligations, except obligations that expressly rank on a parity with or junior to this Security, shall be entitled to be paid in full before any payment shall be made on account of the principal of, or
interest on, this Security. In the event of any such proceeding, after payment in full of all sums owing with respect to such prior obligations, the Holder of this Security, together with the holders of any other obligations of the Bank ranking on a
parity with this Security, shall be entitled to be paid from the remaining assets of the Bank, the unpaid principal of, and the unpaid interest on, this Security or such other obligations before any payment or other distribution, whether in cash,
property or otherwise, shall be made on account of any capital stock or any obligations of the Bank ranking junior to this Security. Nothing herein shall impair the obligation of the Bank, which is absolute and unconditional, to pay the principal of
and any interest on this Security in accordance with its terms. 

  
 A-6 

 7. Notwithstanding any other provisions of this Security, including specifically those set forth
in the sections relating to events of default and covenants of the Bank, it is expressly understood and agreed that the FDIC or any other receiver or conservator of the Bank shall have the right in the performance of his or her legal duties, and as
part of any transaction or plan of reorganization or liquidation designed to protect or further the continued existence of the Bank or the rights of any parties or agencies with an interest in, or claim against, the Bank or its assets, to transfer
or direct the transfer of the obligations of this Security to any national banking association, state bank or bank holding company selected by him or her which shall expressly assume the obligation of the due and punctual payment of the unpaid
principal and interest on this Security and the due and punctual performance of all covenants and conditions hereof; and that the completion of such transfer and assumption shall serve to supersede and void any default, acceleration or subordination
which may have occurred, or which may occur due or related to such transaction, plan, transfer or assumption, pursuant to the provisions of this Security, and shall serve to return the Holder to the same position, other than for substitution of the
obligor, it would have occupied had no default, acceleration or subordination occurred; except that any interest and principal previously due, other than by reason of acceleration, and not paid shall, in the absence of a contrary agreement by the
Holder of this Security, be deemed to be immediately due and payable as of the date of such transfer and assumption, together with the interest from its original due date at the rate provided for herein. 

8. Any depository institution, as that term is defined in Section 3(c)(1) of the Federal Deposit Insurance Act, which holds this Security
(or beneficial interest herein) shall be deemed to have agreed by acquiring this Security (or beneficial interest herein) that any rights of such institution to offset all or any portion of the indebtedness represented by this Security (or
beneficial interest herein) against any indebtedness or other obligations of such institution to the Bank are waived by such institution. 

9. All notices to the Bank under this Security shall be in writing and addressed to the Bank at Discover Bank, 12 Read’s Way, New Castle,
Delaware 19720, Attention: Michael F. Rickert, Vice President, Chief Financial Officer and Assistant Treasurer, with a copy to Discover Financial Services, 2500 Lake Cook Road, Riverwoods, IL 60015, Attention: D. Christopher Greene, Deputy General
Counsel and Secretary, or to such other address as the Bank may notify to the Holder. All notices to the Fiscal and Paying Agent shall be in writing and addressed to the Fiscal and Paying Agent at the office of the Fiscal and Paying Agent at U.S.
Bank National Association, 100 Wall Street—Suite 1600, New York, NY 10005, Attention: Corporate Trust Operations. All notices to the Holder shall be in writing and sent by first-class mail to the Holder at his or its address as set forth in the
Security Register. 
 10. In acting under the Fiscal and Paying Agency Agreement, the Fiscal and Paying Agent is acting solely as the agent
of the Bank and does not assume any obligation or relationship of agency or trust with the Holder except money deposited with the Fiscal and Paying Agent will be held on behalf of the Holders until disbursed to the Holders, except as provided in the
Fiscal and Paying Agency Agreement. Under the terms of the Fiscal and Paying Agency Agreement, the Bank may remove any Fiscal and Paying Agent and appoint a new 

  
 A-7 

 
Fiscal and Paying Agent in respect of the Securities, or may remove any Fiscal and Paying Agent and undertake to perform at the Bank any or all of the functions of the Fiscal and Paying Agent
under the Fiscal and Paying Agency Agreement. The Bank shall notify, or cause the Fiscal and Paying Agent to notify, the Holder of this Security of the appointment of any successor Fiscal and Paying Agent or the undertaking of the Bank to perform at
the Bank the functions of the Fiscal and Paying Agent. 
 11. The Securities are issuable only as fully registered Securities without
interest coupons in denominations of $250,000 or any amount in excess thereof which is an integral multiple of $1,000. 
 12. The term
“Event of Default,” as used in this Security, means any of the following events (whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or
order of any court or any decree, order, rule or regulation of any governmental agency or body): 
  

	 	(i)	default in the payment of any interest with respect to the Securities when due, which continues for 30 calendar days; 

  

	 	(ii)	default in the payment of any principal of the Securities when due; 

  

	 	(iii)	the entry by a court having jurisdiction in the premises of: 

  

	 	a.	a decree or order for relief in respect of the Bank in an involuntary case or proceeding under any applicable United States federal or state bankruptcy, insolvency, reorganization or other similar law; or

  

	 	b.	a decree or order appointing a conservator, receiver, liquidator, assignee, trustee, sequestrator or any other similar official of the Bank, or of substantially all of the property of the Bank, or ordering the winding
up or liquidation of the affairs of the Bank; 

 and the continuance of any such decree or order for relief or any such other
decree or order unstayed and in effect for a period of 60 consecutive days; 
  

	 	(iv)	the commencement by the Bank of a voluntary case or proceeding under any applicable United States federal or state bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be
adjudicated as bankrupt or insolvent, or the consent by the Bank to the entry of a decree or order for relief in an involuntary case or proceeding under any applicable United States federal or state bankruptcy, insolvency, reorganization or other
similar law or to the commencement of any bankruptcy or insolvency case or proceeding, or the filing by the Bank of a petition or answer or consent seeking reorganization or relief under any applicable United States federal or state bankruptcy,
insolvency, reorganization or similar law, or the consent by the Bank to the filing of such petition or to the appointment of or taking possession by a custodian, conservator, receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Bank or of substantially all of the property of the Bank, or the making by the Bank of an assignment for the benefit of creditors, or the taking of corporate action by the Bank in furtherance of any such action. 

  
 A-8 

 The Fiscal and Paying Agency Agreement provides that the Bank will promptly notify the Fiscal and
Paying Agent, and the Fiscal and Paying Agent will promptly notify by first-class mail, postage prepaid, the Holders of the Securities, upon the occurrence of an Event of Default. 

13. If an Event of Default shall occur and be continuing, the Holder may, at its option, by written notice to the Bank and the Fiscal and
Paying Agent, declare this Security to be, and on the day of such declaration shall have been delivered to the Bank and the Fiscal and Paying Agent, unless the Fiscal and Paying Agent shall have received notice from the Bank that all Events of
Default have been cured by the Bank prior to receipt by the Fiscal and Paying Agent of such declaration, such Security shall become, immediately due and payable at its principal amount, together with accrued and unpaid interest thereon to the date
of payment. 
 The Fiscal and Paying Agency Agreement provides that the Holder of this Security may rescind a declaration of an Event of
Default and acceleration with respect to this Security under certain circumstances and may waive any past Event of Default and its consequences. 

14. Subject to Section 7 hereof, the Bank shall not consolidate with or merge into any other person or convey, transfer or lease its
properties and assets substantially as an entirety to any person, unless the person formed by such consolidation or into which the Bank is merged or the person which acquires by conveyance or transfer, or which leases, the properties and assets of
the Bank substantially as an entirety shall be a corporation, partnership or other entity organized and validly existing under the laws of the United States of America, any State thereof or the District of Columbia and shall expressly assume the due
and punctual payment of the principal of and interest on this Security and the performance or observance of every provision of this Security on the part of the Bank to be performed or observed. 

15. The Fiscal and Paying Agency Agreement provides that the Bank and the Fiscal and Paying Agent may amend the Fiscal and Paying Agency
Agreement and the Securities, including amendments to the terms of the Securities designed to cure ambiguities, defects or inconsistencies, without the consent of the Holders of the Securities, except that the consent of all Holders of Securities is
required in order to change the Maturity Date of any Security, to extend the time of payment on any overdue principal amount, to change the coin or currency in which any Security or the interest thereon is payable, to change the definition of
Interest Payment Date, to reduce the principal amount of or rate of interest on any Security, to change the method of payment to other than wire transfer in immediately available funds, to impair the right of the Holder of this Security to institute
suit for the enforcement of payments of principal of or interest or other amounts on the Securities, to reduce the percentage in principal amount of Securities outstanding the consent of whose Holders is required to amend the Fiscal and Paying
Agency Agreement or the Securities or to modify the provisions of the Fiscal and Paying Agency Agreement governing the amendment thereof and of the Securities. If the consent of the Holders of Securities is required, the Bank and the Fiscal and
Paying Agent shall request such consent and will deliver to each Holder of Securities an explanation of such amendment and the terms thereof. It shall not be necessary for the Holders of Securities to approve the precise form of any proposed
amendment. 

  
 A-9 

 Any consent or waiver given by the Holder of this Security shall be conclusive and binding upon
such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange therefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 16. No reference herein to the Fiscal and Paying Agency Agreement and no provision of this Security shall alter or impair the obligation
of the Bank, which is absolute and unconditional, to pay the principal of and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. No failure or delay on the part of the Holder in exercising any
right under this Security shall operate as a waiver of, or impair, any such right. No waiver of any such rights shall be effective unless given in writing. 

17. No recourse shall be had for the payment of principal of or interest on this Security for any claim based hereon, or otherwise in respect
hereof, against any shareholder, employee, agent, officer or director, as such, past, present or future, of the Bank or of any successor organization, either directly or through the Bank or any successor organization, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issue hereof, expressly waived and released. 

18. This Security is a debt of the Bank only and is not an obligation of Discover Financial Services or any of its affiliates other than the
Bank. 
 19. THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK AND,
WHERE APPROPRIATE, THE LAWS OF THE UNITED STATES. 

  
 A-10 

 FEE SCHEDULE 

Fee ScheduleExhibit 10.1

 

EXECUTION COPY

 

OPERATING AGREEMENT

OF BR/CDP CB VENTURE, LLC 

 

THIS OPERATING AGREEMENT (this “Agreement”)
is made and entered into this 29th day of May, 2015, by and between CB DEVELOPER, LLC, a Georgia limited liability company
(the “Catalyst Member”) and BR CHESHIRE MEMBER, LLC, a Delaware limited liability company (the “BR Member”).

 

BACKGROUND INFORMATION:

 

A.           BR/CDP
CB VENTURE, LLC (the “Company”) was formed effective as of the 1st day of April, 2015 by the filing of its Certificate
of Formation with the Secretary of State of Delaware.

 

B.           The
Company is the sole member of CB Owner, LLC, a Delaware limited liability company (the “Borrower”).

 

C.           The
Borrower is the trustee under that certain BR/CDP Trust Agreement dated on or about the date hereof (the “Trust Agreement”).

 

D.           The
Borrower holds legal title to the Property (as defined below) for the benefit of the Company, Commander Habersham, LLC and Duke
of Lexington, LLC, each an Ohio limited liability company (the “Brown Co-Tenants”), as tenants-in-common pursuant to
(x) the Trust Agreement and (y) that certain Tenancy In Common Agreement and that certain TIC Management Agreement, in each case
dated on or about the date hereof (collectively, the “TIC Agreement”).

 

E.           The
Catalyst Member and the BR Member desire to enter into this Agreement to reflect the current business arrangement among the Members.

 

NOW THEREFORE, for
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agree as
follows:

 

ARTICLE
1.

DEFINITIONS

 

In addition to terms
defined in the body of this Agreement, the following terms used in this Operating Agreement shall have the following meanings (unless
otherwise expressly provided herein);

 

“Act” means
the Delaware Limited Liability Company Act, as amended from time to time.

 

“Additional Member.”
A member other than an Initial Member, who has acquired a Membership Interest from the Company.

 

“Additional Capital
Contributions.” With respect to each Member, all additional Capital Contributions made by such Member in excess of their
Initial Capital Contribution amounts, including for the funding of Shortfalls but not on account of Section 8.04(a) Advances.

 

    	 

    	 

    

  

“Additional Contribution
Priority Return.” An amount accruing at the rate of ten percent (10%) per annum on a Member’s unreturned Additional
Capital Contributions. The Additional Contribution Priority Return shall be compounded monthly, calculated on a cumulative basis.

 

“Adjusted Capital
Account Deficit.” The deficit balance, if any, in the Member’s Capital Account as of the end of the relevant taxable
year, after giving effect to the following adjustments: (a) the deficit shall be decreased by the amounts which the Member is deemed
obligated to restore pursuant to Regulation Section 1.704-1(b)(2)(ii)(c); and (b) the deficit shall be increased by the items described
in Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6).

 

“Affiliate.”
(i) In the case of an individual, any relative of such Person, (ii) any officer, director, trustee, partner, manager, employee
or holder of ten percent (10%) or more of any class of the voting securities of or equity interest in such Person; (iii) any corporation,
partnership, limited liability company, trust or other entity controlling, controlled by or under common control with such Person;
or (iv) any officer, director, trustee, partner, manager, employee or holder of ten percent (10%) or more of the outstanding voting
securities of any corporation, partnership, limited liability company, trust or other entity controlling, controlled by or under
common control with such Person.

 

“Available Cash.”
The cash funds of the Company on hand as of a particular time after payment of all current operating expenses of the Company as
of such time, less any Reserve(s) approved in accordance with this Agreement in order to provide for the payment of the Company’s
and Borrower’s outstanding and unpaid obligations or for any other lawful purpose.

 

“Bankruptcy.”
The filing by a Person of a voluntary petition or otherwise initiating proceedings (a) to have the Person adjudicated insolvent;
(b) seeking an order for relief of the Person as debtor under the United States Bankruptcy Code; (c) file any petition seeking
any composition, reorganization, readjustment, liquidation, dissolution, or similar relief under the present or any future federal
bankruptcy laws or any other present or future applicable federal, state, or other statute or law relative to bankruptcy, insolvency,
or other relief for debtors with respect to the Person; (d) or seek the appointment of any trustee, receiver, conservator, assignee,
sequestrator, custodian, liquidator (or other similar official) of the Person, or of all or any substantial part of its property,
or make any general assignment for the benefit of creditors of the Person.

 

“BR Section 8.04(a)
Advance” shall have the meaning ascribed in Section 8.04(a).

 

“Capital Account.”
A capital account maintained in accordance with the rules contained in Treas. Reg. Section 1.704-1(b)(2) as maintained in accordance
with applicable rules under the Code and as set forth in Treas. Reg. Section 1-704-1(b)(2)(4) as amended from time to time.

 

“Capital Contribution.”
The total amount of cash and the Gross Asset Value of any property contributed or agreed to be contributed to the Company by each
Member pursuant to the terms of this Agreement (minus any liabilities that the Company assumes or takes subject to).

 

    	2

    	 

    

  

“Capital Proceeds”
means (a) the Company’s share of the net proceeds of a Capital Transaction after (i) payment of all expenses associated with
the Capital Transaction, (ii) repayment of all secured and unsecured Company debts (other than an obligation incurred in order
to effect a refinancing which is the applicable Capital Transaction) required to be paid in connection with such Capital Transaction
or that the Managers determine should be paid in connection with such Capital Transaction, and (iii) such amounts retained as Reserves
and (b) any amounts included in Reserves derived from Capital Contributions and/or Capital Transactions which the Managers reasonably
determine to distribute.

 

“Capital Transaction”
means (i) a transaction pursuant to which the indebtedness secured by the Project is fully financed or refinanced by the Borrower;
(ii) a sale, condemnation, exchange or casualty not followed by reconstruction, or other disposition, whether by foreclosure or
otherwise, of the Project or any part thereof by the Borrower; or (iii) an insurance recovery or any other transaction with respect
to the Borrower which, in accordance with generally accepted accounting principles, is considered capital in nature.

 

“Catalyst Change
of Control” shall be deemed to have occurred if any two of the four Principals should cease to maintain an ownership interest
in and cease to be actively involved as principals of Catalyst Development Partners II, LLC.

 

“Catalyst Section
8.04(a) Advance” shall have the meaning ascribed in Section 8.04(a).

 

“Certificate
of Formation.” The certificate of formation of the Company filed with the Delaware Secretary of State as required by the
Act, as such certificate of formation may be amended or amended and restated from time to time.

 

“Co-Tenants.”
Collectively, the Company and the Brown Co-Tenants.

 

“Code.”
The Internal Revenue Code of 1986, as amended from time to time.

 

“Cost Savings”
means the amount by which the total costs of developing and constructing the Project are less than the Total Project Budget.

 

“Cost-Sharing
Agreement.” That certain Agreement Regarding Pre-Development Costs & Purchase and Sale Contract by and between Catalyst
Development Partners II, LLC, an affiliate of the BR Member, and Bluerock Real Estate, L.L.C., an Affiliate of BR Member, dated
March 20, 2015.

 

“Debt Service”
means, for any period, scheduled principal, interest and other required payments (including any required loan rebalancing payments,
except to the extent that such loan rebalancing is required by the Lender as a result of a Hard Cost Overrun or Soft Cost Overrun)
owing on any Loan of the Company or the Borrower. Debt Service as used in this Agreement shall not mean any principal amounts due
under the Loan at maturity or as a result of an acceleration after a default thereunder.

 

“Debt Service
Shortfall” means for any period, the amount by which (i) the Company’s share of Debt Service exceeds (ii) the sum of
(a) Available Cash for such period and (b) the Company’s share of amounts released from Reserves (including Reserves under
the applicable Loan, as hereinafter defined, or any subsequent loan) during such period for payment of Debt Service.

 

    	3

    	 

    

  

“Default Action”
is as defined in Section 6.06.

 

“Depreciation”
means, for each fiscal year or other period, an amount equal to the depreciation, amortization and other cost recovery deductions
allowable with respect to an asset for such fiscal year or other period, except that if the Gross Asset Value of an asset differs
from its adjusted basis for federal income tax purposes at the beginning of such fiscal year or other period, Depreciation shall
be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization
and other cost recovery deductions for such fiscal year or other period bears to such beginning adjusted tax basis; provided,
however, if the adjusted basis for federal income tax purposes of an asset at the beginning of such fiscal year or other period
is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected
by the Managers.

 

“Developer.”
CDP Developer I, LLC, a Georgia limited liability company.

 

“Development
Agreement.” That certain Development Agreement between the Borrower and Developer dated of even date herewith, as the same
may be amended from time to time.

 

“Discretionary
Changes” means any modifications or changes that the Members agree to make to the Plans or the Project (and any applicable
corresponding changes to the Total Project Budget) that (i) are not required to complete the construction of the Project as originally
contemplated by the Plans and (ii) are not necessitated by design or construction deficiencies in or government-mandated revisions
of the Plans or the Project. Discretionary Changes include, for example, upgrades/downgrades of interior or exterior finishes,
additional/fewer Project amenities, and increases/decreases in square footage.

 

“Distributions.”
The distributions payable (or deemed payable) to a Member.

 

“Economic Interest.”
A Member’s or Economic Interest Owner’s share of one or more of the Company’s Profits, Losses and distributions
of the Company’s assets pursuant to this Operating Agreement and the Act, but shall not include any right to vote on, consent
to or otherwise participate in any decision of the Members or Managers.

 

“Economic Interest
Owner.” The owner of an Economic Interest who is not a Member.

 

“Entity.”
Any general partnership, limited partnership, limited liability company, corporation, joint venture, trust, business trust, cooperative
or association or any foreign trust or foreign business organization.

 

“Fiscal Year.”
The Company’s fiscal year, which shall be the calendar year.

 

“Force Majeure
Event” shall mean acts of God, war, riots, civil insurrections, hurricanes, tornados, floods, earthquakes, epidemics or plagues,
acts or campaigns of terrorism or sabotage, interruptions to domestic or international transportation, trade restrictions, delays
caused by any governmental or quasi-governmental entity, shortages of materials, natural resources or labor, labor strikes, governmental
prohibitions or regulations including administrative delays in obtaining building permits, inability to obtain materials, or any
other cause beyond the reasonable control of the Members.

 

    	4

    	 

    

  

“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.

 

“Gross Asset
Value.” With respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:

 

(a)          The
initial Gross Asset Value of any asset contributed by a Member to the Company shall be the gross fair market value of such asset
on the date of the contribution, as agreed to and set forth in Exhibit A and, otherwise, as determined by the Managers;

 

(b)          The
Gross Asset Values of all Company assets shall be adjusted to equal their respective gross fair market values in accordance with
Regulations Section 1.704-1(b)(2)(iv)(g) (taking Code Section 7701(g) into account), as determined by agreement of the Managers,
as of the following times: (1) the acquisition of an additional Membership Interest by any new or existing Member in exchange for
more than a de minimis Capital Contribution; (2) the distribution by the Company to a Member of more than a de minimis
amount of property as consideration for a Membership Interest; (3) the grant of a Membership Interest in the Company (other
than a de minimis interest) as consideration for the provision of services to or for the benefit of the Company by a new
or existing Member acting in a Member capacity or in anticipation of being a Member; provided, however, that an adjustment
pursuant to clauses (1), (2) and (3) shall be made only if the Managers reasonably determine that such adjustment is necessary
or appropriate to reflect the relative economic interests of the Members in the Company; and (4) the liquidation of the Company
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g);

 

(c)          The
Gross Asset Value of any Company asset distributed to any Member (taking Code Section 7701(g) into account) shall be adjusted to
equal the gross fair market value of such asset on the date of distribution as reasonably determined by the Managers; and

 

(d)          The
Gross Asset Values of Company assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Code Section 732(d), 734(b) or 743(b), but only to the extent that the adjustment is taken into account in determining
Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), provided that Gross Asset Values will not be adjusted
under this paragraph (d) to the extent that the Managers determine that an adjustment under paragraph (b) above is necessary or
appropriate in connection with a transaction that would otherwise result in an adjustment under this paragraph (d).

 

(e)          If
the Gross Asset Value of an asset has been determined or adjusted pursuant to paragraph (a), (b) (c) or (d) hereof, such Gross
Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing
Profits and Losses.

 

(f)          In
all other cases, Gross Asset Value of any Company asset means the adjusted basis of such asset for federal income tax purposes.

 

    	5

    	 

    

  

“Hard Costs”
means all items under the category heading “Hard Cost” in the Total Project Budget. Notwithstanding the foregoing,
in no event shall costs relating to Force Majeure Events, taxes, insurance premiums, Debt Service, Discretionary Changes and/or
post-completion operating deficits of the Company or Borrower constitute Hard Costs.

 

“Hard Cost Overrun”
means, from time to time, the amount by which the aggregate Hard Costs incurred in connection with the development and construction
of the Project as of the date of measurement exceed the portion of the Total Project Budget allocated to Hard Costs, including
the available Hard Cost contingency in the Total Project Budget. Hard Cost Overruns include, without duplication, loan rebalancing
payments required by a Lender in connection with the Loan, but only to the extent that such loan rebalancing payments are required
by the Lender as a result of an actual or projected Hard Cost Overrun. Hard Cost Overruns also include overruns resulting from
Non-Discretionary Changes but not overruns resulting from Discretionary Changes.

 

“Initial Capital
Contribution.” The initial contribution to the capital of the Company made by a Member pursuant to this Operating Agreement.
The Initial Capital Contributions of the Initial Members are set forth on Exhibit A.

 

“Initial Members.”
Those persons identified on Exhibit A attached hereto and made a part hereof by this reference, who have executed this Agreement.

 

“Internal Rate
of Return” and “IRR.” As of any date, the internal rate of return on the IRR-Included Capital Contributions of
a Member to such date (including, if applicable, giving credit for the 3:1 multiplier on the Member’s Additional Capital
Contributions as may occur under Section 8.04(e) below), calculated to be that discount rate (expressed on a percentage basis)
which, when divided by twelve (12), compounded monthly and applied to such IRR-Included Capital Contributions and the corresponding
Distributions with respect thereto, causes the net present value, as of such date, of such Distributions and IRR-Included Capital
Contributions to equal zero. For this purpose, Capital Contributions and Distributions shall be assumed to have occurred as of
the first of the month nearest the actual date such Capital Contribution or Distribution is made. The formula used to calculate
IRR shall be: (1+monthly IRR) ^ 12-1.

 

“IRR-Included
Capital Contributions.” A Member's Initial Capital Contributions and any Additional Capital Contributions that are made solely
as a result of a change in the Total Project Budget occurring on or prior to the later to occur of: (x) the date of the Loan closing
and (y) the date of execution of the GMP Contract. For purposes of the waterfall in Section 9.01(e), any such Additional Capital
Contributions made solely as a result of a change in the Total Project Budget occurring on or prior to the date of execution of
the GMP Contract shall be (1) repaid as Additional Capital Contributions as provided in Sections 9.01(a) through (d), but (2) for
purposes of determining whether the hurdles under Section 9.01(e) have been achieved, shall be included in the calculations required
thereunder.

 

“Lender.”
The lender that makes the Loan to Borrower.

 

“Loan.”
The construction loan to be obtained by Borrower for the development of the Project.

 

    	6

    	 

    

  

“Managers.”
The BR Member and the Catalyst Member, or any other Person(s) that succeed such Persons in their capacities as Managers.

 

“Member.”
Each of the parties who executes a counterpart of this Operating Agreement as a Member and each of the parties who may hereafter
become Members. To the extent a Manager has purchased a Membership Interest in the Company, he will have all the rights of a Member
with respect to such Membership Interest, and the term “Member” as used herein shall include a Manager to the extent
he has purchased such Membership Interest in the Company. If a Person is a Member immediately prior to the purchase or other acquisition
by such Person of an Economic Interest, such Person shall have all the rights of a Member with respect to such purchased or otherwise
acquired Membership Interest or Economic Interest, as the case may be. The initial Ownership Percentages associated with the Membership
Interests of the Members are set forth on Exhibit A attached hereto and incorporated herein by reference.

 

“Membership Interest.”
A Member’s entire interest in the Company including such Member’s Economic Interest and the right to participate in
the management of the business and affairs of the Company, including the right to vote on, consent to, or otherwise participate
in any decision or action of or by the Members granted pursuant to this Operating Agreement or the Act.

 

“Minimum Gain.”
The same meaning set forth in Regulation Section 1.704-2(d). Minimum Gain shall be computed separately for each Member in a manner
consistent with the Regulations under Code Section 704(b).

 

“Net Cash Flow”
means, for any period, the total annual cash gross receipts of the Company during such period derived from Company’s co-tenancy
interest in the Project and any and all sources, other than Capital Contributions or as a result of a Capital Transaction during
such period, together with any amounts included in Reserves (other than Reserve amounts derived from Capital Contributions or Capital
Transactions) or working capital from prior periods which the Managers reasonably determine to distribute, less (i) the Company’s
share of Debt Service, (ii) the Operating Expenses of the Company paid during such period, and (iii) any increases or replacements
in Company Reserves (other than from Capital Contributions or Net Cash from a Capital Transaction) during such period.

 

“Non-Development
Cost Overrun” shall mean the Company’s share of any cost overruns with respect to the Project which are attributable
to Force Majeure Events, taxes, insurance premiums, Debt Service, Discretionary Changes and/or post-completion operating deficits.

 

“Non-Discretionary
Changes” means any modifications or changes that the Members are required to make to the Plans or to the Project (other than
Discretionary Changes). Non-Discretionary Changes include, for example, changes to the Plans or the constructed portions of the
Project to correct design or construction deficiencies or to implement government-mandated revisions, or general contractor claims
under the GMP Contract for increased compensation in excess of the original “Contract Sum” (or similar term, as defined
in the Construction Contract) for errors or inconsistencies in the Plans, concealed conditions, delays or other reasons (other
than Discretionary Changes).

 

    	7

    	 

    

  

“Nonrecourse
Deductions.” The same meaning set forth in Regulation Section 1.704-2(b)(1). The amount of Nonrecourse Deductions for a taxable
year of the Company equals the net increase, if any, in the amount of Minimum Gain during that taxable year, determined according
to the provisions of Regulation Section 1.704-2(c).

 

“Operating Agreement.”
This Operating Agreement as originally executed and as amended from time to time, also referred to herein as the “Agreement,”
from time to time.

 

“Operating Expenses”
for the purposes herein, means the Company’s share of all cash expenditures made by the Borrower in connection with owning
and operating the Project or otherwise conducting its business; provided, that, notwithstanding the foregoing, Operating Expenses
shall not include any cash or capital expenditures expended out of established and accumulated cash Reserves of the Company or
Borrower used for the particular purpose for which such Reserves were established or not otherwise allocated for specific purposes

 

“Ownership Percentage.”
Subject to adjustment pursuant to other provisions of this Agreement, the initial Ownership Percentage of each Member is as described
on Exhibit A.

 

“Person.”
Any individual or Entity, and the heirs, executors, administrators, legal representatives, successors, and assigns of such “Person”
where the context so permits.

 

“Principals”
means Robert Meyer, Mark Mechlowitz, Jorge Sardinas and Robert Fishel.

 

“Profits or Losses”
means, for each Fiscal Year or other period, an amount equal to the Company’s taxable loss or income, respectively, for such
year or period, determined in accordance with Section 703(a) of the Code (and for this purpose, all items of income, gain, loss,
or reduction required to be stated separately pursuant to Section 703(a)(1) of the Code shall be included in taxable income or
loss), with the following adjustments:

 

(a)          Any
income of the Company that is exempt from federal income tax and not otherwise taken into account in computing Profits or Losses
shall be added to such taxable income or loss;

 

(b)          Any
expenditures of the Company described in Section 705(a)(2)(B) of the Code or treated as Section 705(a)(2)(B) expenditures pursuant
to Regulation Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Profits or Losses shall be subtracted
from such taxable income or loss;

 

(c)          In
the event the Gross Asset Value of any Company asset is adjusted pursuant to paragraph (b) or (c) of the definition thereof, the
amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing
Profits or Losses;

 

(d)          Gain
or loss resulting from any disposition of Company property with respect to which gain or loss is recognized for federal income
tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of notwithstanding that the adjusted
tax basis of such property differs from its Gross Asset Value;

 

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(e)          In
lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income
or loss, there shall be taken into account Depreciation for the Fiscal Year or other period;

 

(f)          To
the extent an adjustment to the tax basis of any Company asset pursuant to Code Section 734(b) is required pursuant to Treasury
Regulation §1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution
other than a complete liquidation of Member’s interest in the Company, the amount of such adjustment shall be treated as
an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset)
from the disposition of the asset and shall be taken into account for purposes of computing Profits or Losses; and

 

(g)          Any
items which are specially allocated pursuant to Article 10 hereof shall not be taken into account in computing Profits or Losses
but shall be determined by applying rules analogous to those set forth in paragraphs (a) through (d) of this definition.

 

If the profit or loss
for such Fiscal Year or other period, as adjusted in the manner provided herein, is a positive amount, such amount shall be the
Profits for such Fiscal Year or other period; and if negative, such amount shall be the Losses for such Fiscal Year or other period.

 

“Project.”
An approximately 285-unit Class A rental apartment complex to be constructed upon the Property.

 

“Project Completion”
means completion of construction of the Project and issuance of a Final Certificate of Occupancy and less than $100,000 of punchlist
items.

 

“Project Stabilization”
means completion of construction of the Project and the Project at least is 90% leased up by third party tenants.

 

“Property.”
That certain property located in Atlanta, Georgia which is more particularly described in Exhibit B attached hereto and
incorporated herein upon which the Borrower intends to develop the Project.

 

“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.

 

“Reserves.”
With respect to any fiscal period, funds set aside or amounts allocated to reserves for the Company’s co-tenancy interest
in the Project during such period which shall be maintained in amounts deemed sufficient by the Catalyst Member for working capital,
capital expenditures, repairs, replacements and anticipated expenditures for paying taxes, insurance, Debt Service or other costs
or expenses incident to the ownership or operation of the Company’s business; provided that, BR Member shall have the right
to reasonably approve the amount of any such Reserves.

 

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“Section 8.04(a)
Advance” shall have the meaning ascribed in Section 8.04(a).

 

“Soft
Cost(s)” means all items under the category heading “Soft Cost” in the Total Project Budget. Soft
Costs include, without limitation, interest reserve, architectural and engineering fees, and legal fees incurred by the Company.
Notwithstanding the foregoing, in no event shall costs relating to Force Majeure Events, taxes, insurance premiums, Debt Service
after Project Completion, Discretionary Changes and/or post-Project Completion operating deficits of the Company or Borrower constitute
Soft Costs.

 

“Soft
Cost Overrun” means, from time to time, the amount by which the aggregate Soft Costs incurred in connection with the
development and construction of the Project as of the date of measurement exceed the portion of the Total Project Budget allocated
to Soft Costs, including the available Soft Cost contingency in the Total Project Budget. Soft Cost Overruns include, without duplication,
loan rebalancing payments required by the Lender in connection with the Loan, but only to the extent that such loan rebalancing
payments are required by the Lender as a result of an actual or projected Soft Cost Overrun. Soft Cost Overruns includes overruns
resulting from Non-Discretionary Changes but excludes overruns resulting from Discretionary Changes.

 

“Standard
Market Financing” means non-recourse mortgage financing on commercially reasonable terms in an amount up to 80% of
the Project value and at an interest rate not to exceed the then-current yield on the 10-year Treasury Bond plus 350 basis points.

 

“Total Project
Budget.” The final budget annexed hereto as Exhibit C, as updated from time to time hereafter by the mutual consent
of all of the Members and as approved by the Lender. For the avoidance of doubt, the Total Project Budget refers to the Borrower-level
budget, inclusive of capital contributions required from the Company and the Brown Co-Tenants.

 

“Transferring
Member.” A Member or Economic Interest Owner who sells, assigns, pledges, hypothecates or otherwise transfers for consideration
or gratuitously all or any portion of its Membership Interest or Economic Interest.

 

“Treasury Regulations”
or “Regulations.” The Federal Income Tax Regulations, including any temporary regulations, promulgated under the Code,
as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

 

ARTICLE
2.

FORMATION OF COMPANY

 

2.01         Formation.
On April 1, 2015, the Company was formed as a Delaware limited liability company by executing and delivering the Certificate of
Formation to the Secretary of State of Delaware in accordance with the provisions of the Act.

 

2.02         Name.
The name of the Company is BR-CDP Cheshire Venture, LLC. The Company may do business under that name and under any other name or
names the Members select. If the Company does business under a name other than that set forth in its Certificate of Formation,
then the Company shall file a trade name certificate as required by law.

 

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2.03         Principal
Place of Business. The principal place of business of the Company is 880 Glenwood Avenue SE, Suite H, Atlanta, GA 30316. The
Company may locate its places of business at any other place or places as the Managers may from time to time deem advisable.

 

2.04         Registered
Office and Registered Agent. The Company’s initial registered office and the name of its initial registered agent shall
be as set forth in the Certificate of Formation. The registered office and registered agent may be changed from time to
time by filing the address of the new registered office and/or the name of the new registered agent with the Secretary of State
of Delaware pursuant to the Act and the applicable rules promulgated thereunder.

 

2.05         Term.
The term of the Company commenced on the date the Certificate of Formation was filed with the Secretary of State of Delaware and
shall continue thereafter in perpetuity unless earlier dissolved in accordance with the provisions of this Operating Agreement
or the Act.

 

ARTICLE
3.

BUSINESS OF COMPANY

 

3.01         Permitted
Businesses. The business of the Company shall be:

 

(a)          To
acquire, develop, sell, exchange, construct, improve, subdivide, mortgage, lease, maintain, transfer, operate, own as an investment
and/or otherwise engage in all general business activities related or incidental to the ownership and development of the Project,
in its capacity as a Co-Tenant;

 

(b)          To
acquire a limited liability company interest in and serve as the sole member of the Borrower; and

 

(c)          To
engage in all activities necessary, customary, convenient, or incident to any of the foregoing.

 

ARTICLE
4.

NAMES AND ADDRESSES OF INITIAL MEMBERS

 

The names and addresses
of the Initial Members are set forth on Exhibit A attached hereto and by this reference made a part hereof.

 

ARTICLE
5.

RIGHTS AND DUTIES OF MANAGERS

 

5.01         Management.
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 Operating 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 will delegate the day-to-day administration
and management of the development and construction of the Project to the Developer pursuant to the terms, conditions and obligations
of the Development Agreement. In addition, the Managers hereby delegate to the Catalyst Member the authority to implement any Operating
Budget approved in accordance with the terms of this Operating Agreement.

 

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5.02        Number,
Tenure and Qualifications. The Company shall have two (2) Managers, and BR Member and the Catalyst Member shall serve as the
initial Managers. 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. Subject to the foregoing and Section 5.10, Managers shall be elected by the
affirmative vote of all Members.

 

5.03        Certain
Powers of Managers. Subject to Sections 5.04 and 7.07 below, either Manager shall have power and authority, on behalf of the
Company or in the Company’s capacity as a member of Borrower and/or as a Co-Tenant, as applicable:

 

(a)          To
cause Borrower to acquire the Property and to construct and develop the Project.

 

(b)          To
invest any Company funds (by way of example but not limitation) in time deposits, short-term governmental obligations, or other
investments, provided the funds in any such investment vehicle are insured by the Federal Deposit Insurance Corporation (or its
successor or replacement).

 

(c)          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 or
Borrower’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.

 

(d)          To
purchase liability and other insurance to protect employees, officers, property and business.

 

(e)          Subject
to Section 5.14, to employ accountants, engineers, architects, surveyors, attorneys, managing agents, leasing agents, and other
experts to perform services for the Company and to compensate them from Company funds.

 

(f)          To
enter into any and all other agreements on behalf of the Company, with any other Person for any purpose, in such forms as the Managers
may approve, including but not limited to the Trust Agreement and the TIC Agreement.

 

(g)          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.

 

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(h)          To
the extent permissible in connection with the Loan, 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. No
debt shall be contracted or liability incurred by or on behalf of the Company except by the Managers or by agents or employees
of the Company expressly authorized by the Managers to contract such debts or incur such liability by the Managers.

 

(i)          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 7.07 of this Agreement.

 

Unless
authorized to do so by this Operating Agreement or by the Managers, no 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 pecuniary for any
purpose. No Member shall have any power or authority to bind the Company unless the Member has been authorized by the Managers
or Members to act as an agent of the Company in accordance with the previous sentence.

 

5.04        Management
Committee.

 

(a)          The
Managers and Members hereby establish a management committee (the “Management Committee”) for the Company for the purpose
of the Managers considering and approving actions pursuant to Section 5.03. 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) BR Member shall be entitled to designate two (2) Representatives to represent the BR Member as Manager and Member;
and (ii) Catalyst Member shall be entitled to designate two (2) Representatives to represent the Catalyst Member as Manager and
Member. The initial members of the Management Committee are set forth on Exhibit A.

 

(b)          Each
Representative as a member of the Management Committee, subject to this Section 5.04(b), shall hold office until death, resignation
or removal at the pleasure of the Managers 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 as of the date on which such Manager ceases to be a Manager, including
by means of removal under Section 5.09, or as otherwise provided in this Agreement. If the BR Member transfers all or a portion
of its membership interest to a transferee permitted by Section 12.02(a), such transferee shall automatically, and without any
further action or authorization by any Manager or Member, succeed to the rights and powers of the BR Member under this Section
5.04 as may be agreed to between the BR Member 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 the BR Member was theretofore entitled to appoint pursuant to this Section 5.04. If the Catalyst
Member transfers all or a portion of its membership interest to a transferee permitted pursuant to Section 12.02(b), such permitted
transferee shall automatically, and without any further action or authorization by any Manager or Member, succeed to the rights
and powers of the Catalyst Member under this Section 5.04 as may be agreed to between the Catalyst Member 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 the Catalyst Member was theretofore
entitled to appoint pursuant to this Section 5.04.

 

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(c)          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 BR Member and one (1) Representative appointed by Catalyst Member; provided, however, if any Representative fails
to attend any meeting and as a result thereof the Company is unable to obtain a quorum, and thereafter such Representative fails
to agree to reschedule and attend any such meeting within 15 days after receipt of written notice that the Company was unable to
obtain a quorum (the “Absent Representative”), then a quorum can be obtained
without the attendance of a Representative of the Member who selected the Absent Representative.

 

(d)          Each
of the two (2) Representatives appointed by BR Member shall be entitled to cast two (2) votes on any matter that comes before the
Management Committee and each of the Representatives appointed by Catalyst Member 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 under Section 7.07 or which may be made unilaterally by a Member, but only as expressly 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.

 

(e)          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 to this Section 5.04(e) shall constitute presence in person at such meeting.

 

(f)          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 a consent or consents in writing, setting forth the action so taken, shall be signed by Representatives
having not less than the minimum number 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. All consents shall be filed with the minutes of the proceedings
of the Management Committee.

 

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5.05         Limitation
of Liability. 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. No Manager shall be liable to the Company or to any Member for good faith negligence or for honest mistakes
of judgment or losses or liabilities due to such good faith mistakes or due to the negligence, dishonesty, unlawful acts or bad
faith of any employee, broker or other agent, accountant, attorney, other professional or person employed by the Company provided
that such person was selected, engaged, retained and supervised by such Manager with reasonable care. No Manager shall have any
liability to the Company or to any Member for any loss suffered by the Company which arises out of any action or inaction of such
Manager if, prior thereto, such Manager, in good faith, determined that such course of conduct was in, and not opposed to, the
best interests of the Company and such course of conduct did not constitute willful misconduct or a material breach of this Agreement
or gross negligence. It is the express intention of the parties that the Managers’ standard of care be limited to acting
in a manner reasonably believed by them in good faith to be in accordance with their authority under this Agreement, that the Managers’
obligations be limited to those expressly provided in this Agreement, and that any duties of loyalty or care and any and all other
fiduciary duties arising at law or in equity, if any, are hereby strictly limited to accord with the provisions of this Section
5.05 and to the performance by the Managers of their express obligations under this Agreement, and any broader duty is hereby waived
by the other Members.

 

5.06         Managers
Have 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 Operating 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.

 

5.07         Bank
Accounts. The Management Committee may from time to time open bank accounts, brokerage accounts and other accounts in the name
of the Company, and the Managers shall be the sole signatories thereon, unless the Management Committee determines otherwise.

 

5.08         Resignation.
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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5.09         Removal
of Managers. At a meeting called expressly for that purpose, a Manager may be removed, by the affirmative vote of all Members
(excluding the Membership Interests of BR Member or its permitted transferee in the event BR Member or its permitted transferee
is the subject of such removal vote and excluding the Membership Interests of Catalyst Member or its permitted transferee in the
event Catalyst Member or its permitted transferee is the subject of such removal vote), only in the event of any of the following
(each a “Removal Action”): (a) a material breach of this Agreement on the part of such Manager or its Affiliated
Member, which breach shall continue uncured for thirty (30) calendar days after the giving of written notice thereof to such Manager
specifying the nature of such breach; (b) a Default Action by a Member (or an Affiliate of such Member) affiliated with such Manager;
(c) gross negligence or willful misconduct on the part of such Manager, its affiliated Member or any of their Affiliates (including
any Affiliated developer or property manager); provided, however, with regard to such acts by Affiliates, only to the extent such
acts result in a material adverse effect on the Property or the Company; or (d) in the case of a Manager designated by the Catalyst
Member, the termination of the Development Agreement as a result of an event of default by the Developer thereunder. 

 

The removal of a Manager
as a result of a Removal Action 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 Managers’ rights as a Member and shall not constitute
a withdrawal of a Member. However, if the Catalyst Member is removed as Manager pursuant to clause (b) of the preceding paragraph
as a result of the occurrence of an event described in either subsection (2) or subsection (3) of the definition of a Default Action,
(x) the BR Member shall have the right to cause the Company and the Borrower to terminate the Developer under the Development Agreement
and (y) if such removal occurs before Project Stabilization, the Catalyst Member will no longer be entitled to receive any portion
of the ‘promote’ otherwise payable to it under the Section 9.01 (i.e., the 30.56% share payable under Section 9.01(g)
or the 38.89% share payable under Section 9.01(h)), but rather will only be entitled to distributions to it under Sections 9.01(g)
or (h) based on its Ownership Percentage.

 

In any instance where
the Catalyst Member is removed as Manager and/or the Developer is removed as developer under the Development Agreement, regardless
of the cause of such removal, the BR Member shall cause the Catalyst Member and/or any Affiliate that executed a guaranty to be
released in full from any Loan Guaranty; provided, that, if the BR Member is unable to obtain such release despite its commercially
reasonable efforts to do so, the BR Member (and certain Affiliates reasonably acceptable to the Catalyst Member) shall be obligated
to indemnify and hold harmless the Catalyst Member and/or any Affiliate (each, a “Catalyst Indemnified Party”) pursuant
to an indemnification agreement in form and substance reasonably satisfactory to the Catalyst Indemnified Parties, without prejudice
to any other indemnification right under Section 15, for any amount paid by the Catalyst Indemnified Parties under such
Loan Guaranty or other guaranty or indemnity agreement and actual losses and expenses (including reasonable attorney’s fees
and costs) incurred by the Catalyst Indemnified Parties in defending against a claim for performance under such Loan Guaranty or
other guaranty or indemnity agreement, except to the extent (i) the Catalyst Indemnified Parties are separately obligated to the
Company or the BR Member, without right of reimbursement, under a written agreement for the amount sought to be recovered under
such Loan Guaranty or indemnity agreement or (ii) the amount sought to be recovered would never be collectible from, or claimed
against, the Company but for the fraud, willful misconduct, gross negligence or willful misappropriation of funds by the Catalyst
Indemnified Parties; provided, however, that the BR Member and its Affiliates shall not be obligated to indemnify the Catalyst
Indemnified Parties if, with respect to any action taken by the BR Member after the date of removal, the Catalyst Member has expressly
approved of or consented to the action taken by BR Member in writing within two (2) business days following the receipt of written
notice from BR Member that BR Member intends to take such action (and if the Catalyst Member has not affirmatively responded to
BR Member by the end of such two (2) business day period, the Catalyst Member shall be deemed to have expressly disagreed with
the action).

 

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5.10       Vacancies.
Any vacancy occurring for any reason in the number of Managers of the Company may be filled by the affirmative vote of all Members
(excluding the Membership Interests of BR Member or its permitted transferee to the extent the vacancy results from BR Member or
its permitted transferee being removed as Manager and excluding the Membership Interests of Catalyst Member or its permitted transferee
to the extent the vacancy results from Catalyst Member or its permitted transferee being removed as 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.

 

5.11       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.

 

5.12       Development
and Development Fee.

 

		5.12.1	Development Agreement. The Borrower and Developer shall enter into a Development Agreement
in the form attached as Exhibit D hereto and by this reference made a part hereof to govern the rights and responsibilities
of the parties, including a Development Fee payable to Developer as described below. Developer will cause the Project to be constructed
in a first class manner in accordance with the Plans and the Total Project Budget (including reasonable change orders within the
scope of authority provided by Lender) as mutually agreed upon by Developer and BR Member. The Developer shall be responsible to
obtain from the Project’s design professional certified documentation at Project completion that the Project has been built
in accordance with the approved Plans.

 

		5.12.2	General Contractor. Developer shall be responsible for arranging with Summit Contracting
Group, Inc. or another arms-length, third-party general contractor a guaranteed maximum price contract for construction of the
Project (the “GMP Contract”) for execution and approval by the Borrower; provided, that, (x) the pricing terms set
forth in the GMP Contract must comply with the Total Project Budget and (y) the BR Member's approval of the GMP Contract is required.

 

		5.12.3	Development Fee. Under and subject to the Development Agreement, Developer will be entitled
to earn a Development Fee equal to three percent (3%) of the Total Project Budget (exclusive of the Development Fee). The Development
Fee shall compensate Developer for all development management and project management services (including financial reporting) required
to complete the Project, through and including issuance of final certificates of occupancy for all buildings and apartments. To
the extent permitted by the Lender, the Development Fee shall be paid in 18 equal monthly installments, to commence upon execution
of the GMP Contract, from draws against the Loan.

 

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		5.12.4	Development Information. During the construction process, Developer will provide to Borrower,
Company and BR Member copies of all Loan-related and draw-related information, including but not limited to monthly copies of the
construction draws, construction draws top sheets with budget-versus-actual information to Borrower, Company and BR Member, plus
full physical access to the Property and all documentation in connection with the development and construction of the Project.

 

		5.12.5	Developer Contribution. Without limitation, and for no additional charge or credit to the
Catalyst Member’s Capital Account, Catalyst Member shall cause Developer to contribute to the Borrower all of (a) Developer’s
ownership and contract rights in and to the subject lands and/or purchase agreements (including but not limited to Developer’s
Affiliate’s rights to acquire the Property in accordance with the Purchase Agreement (as defined in the Cost-Sharing Agreement)
(the “Land Contract”), (b) all design and construction plans for the Project (at Developer’s actual cost, free
and clear of all liabilities), (c) all other tangible and intangible rights associated with the Project and (d) all other items
appurtenant to the development of the Project (collectively, the “Developer Rights”).

 

		5.12.6	BR Member’s Owner Representative. The BR Member will be entitled to staff the Project,
at the expense of the Co-Tenants, with an owner’s representative throughout the construction period to oversee, supervise
and assist the Developer in the administration of the Project as needed by the Developer. The reasonable cost of the owner’s
representative, which shall not exceed $50,000, will be capitalized into the Total Project Budget and paid from the construction
draws to the extent approved by Lender (or, to the extent not so paid, added to the Capital Account of the BR Member and set off
on a dollar for dollar basis amounts owed for the owner’s representative).

 

		5.12.7	Warranties. Catalyst Member shall cause the Developer to use commercially reasonable efforts
to cause the general contractor to warrant to the Borrower and the Company the construction of the Project for twelve (12) months
after the Certificate of Occupancy is received for the Project such that the general contractor must promptly correct and repair,
at its sole cost and expense, all defects discovered during such period. The Company may assign such warranty and any subcontractor
warranties to any third party who purchases the Project from the Borrower during such period.

 

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5.13       Investment
Banking Fee. At the Closing of the acquisition of the Property, the BR Member or its designee shall earn an investment banking
fee equal to one percent (1%) of the Total Project Budget (exclusive of the Development Fee and this investment banking fee). In
lieu of the Company paying the investment banking fee to the BR Member in cash, the BR Member shall be entitled to offset a portion
of its Initial Capital Contribution by the amount of the investment banking fee.

 

5.14       Total Project
Budget and Operating Budget.

 

		5.14.1	Total Project Budget. The Members have attached the current agreed form of Total Project
Budget to this Agreement as Exhibit C. For the avoidance of doubt, in connection with the signing of the GMP Contract, the
Members anticipate that they will amend Exhibit C by attaching a revised Total Project Budget that has been mutually approved
by the Members and the Lender. Subject to the approval of the final Total Project Budget by the Members and the Lender, the Members
hereby authorize Developer to construct the Project in accordance with the Total Project Budget, with such modifications as may
be agreed to by the Members pursuant to Section 7.07.

 

		5.14.2	Operating Budget. Other than with respect to the construction of the Project, the Company
shall cause the Co-Tenants to operate the Project under a business plan and an annual operating budget (each, an “Operating
Budget”) commencing for the 12-month period beginning as of the date of issuance of a temporary certificate of occupancy
for the Project. The Catalyst Member as Manager shall deliver to the Members for approval the initial proposed Operating Budget,
and also by November 1st for each following calendar. After the Operating Budget has been approved, the Catalyst Member shall administratively
implement it on behalf of Company and the other Co-Tenants and may incur the expenditures and obligations therein provided. No
material changes or departures from any item in an approved Operating Budget shall be made by the Catalyst Member without the prior
approval of the BR Member. If an Operating Budget has not been approved by January 1st of any subsequent year, the Company
and the other Co-Tenants shall continue to operate the Project under the Operating Budget for the previous year with such adjustments
as may be necessary to reflect deletion of non-recurring expense items set forth in the previous Operating Budget and positive
or negative adjustments in insurance costs, taxes, utility costs and Debt Service payments. The Catalyst Member shall promptly
advise and inform the BR Member of any transaction, notice, event or proposal directly relating to the management and operation
of the Project, other assets of the Company or Borrower or the Company or the Borrower which does or is likely to significantly
affect, either adversely or favorably, the Project, other assets of the Company or Borrower or is expected to cause a material
deviation from the Operating Budget.

 

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5.15       Management
Company. The Managers shall agree upon and cause the Borrower to enter into a management agreement (the “Management Agreement”)
with a management company mutually agreed upon by the Members (“Management Company”) to manage, lease-up and operate
the Property pursuant to the Management Agreement. The Management Agreement shall require that Management Company operate the Project
in a first class manner, and in accordance with the standards and conditions for the type, style, class, use and location of the
Property, consistent with the Property’s Operating Budget. The Borrower shall pay Management Company a management fee in
the amount of no more than three percent (3%) of annual gross cash revenues (except during the lease up phase), payable monthly.

 

5.16       Operation
in Accordance with REOC/REIT Requirements.

 

		5.16.1	The Members acknowledge that BR Member 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 BR Member and such BR Affiliate to so qualify; provided, however,
in no event shall the foregoing require any loss of voting or decision rights to the Catalyst Member or result in any adverse effect
on the economic rights of the Catalyst Member. Except as disclosed to BR Member, Catalyst Member (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.

 

		5.16.2	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 Members 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 and not related to the Property.

 

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		5.16.3	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, none of 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:

 

		5.16.3.1	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);

 

		5.16.3.2	Leasing, as a lessor, 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;

 

		5.16.3.3	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;

 

		5.16.3.4	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;

 

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		5.16.3.5	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);

 

		5.16.3.6	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;

 

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

 

		5.16.3.8	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; provided, that such restriction shall not affect, restrict or be deemed to modify (i) either Member’s right
to exercise its buy-sell rights under Section 12.06; or (ii) Catalyst’s rights pursuant to Section 6.05(c) or 12.09;
or

 

		5.16.3.9	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.

 

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		5.16.4	Notwithstanding the foregoing provisions of Section 5.16.3, 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 5.16.4. For purposes of this Section 5.16.4, “REIT Prohibited Transactions”
shall mean any of the actions specifically set forth in Sections 5.16.3(1) through (9).

 

5.17         FCPA.
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. 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.

 

ARTICLE
6.

RIGHTS AND OBLIGATIONS OF MEMBERS

 

6.01         Limitation
on Liability. Each Members’ liability shall be limited as set forth in this Operating Agreement, the Act and other applicable
law.

 

6.02         No Liability
for Company Obligations. No Member will have any personal liability for any debts or losses of the Company beyond its respective
Capital Contributions, except as provided by law or otherwise provided by separate agreement among the Members.

 

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6.03       List
of Members. Upon written request of any Member, the Company shall provide a list showing the names, addresses and Membership
Interest and Economic Interest of all Members and any other information required by Section 18-305 of the Act and maintained pursuant
to Section 11.02.

 

6.04       Dissenters’
Rights. No Member shall have appraisal or dissenters’ rights pursuant to Section 18-210 of the Act.

 

6.05       Financing
and Recourse Obligations; Refinancing.

 

(a)          The
Catalyst Member will use commercially reasonable efforts to secure a Loan from a Lender, which Loan shall be in an amount no less
than 70% (and may be up to 75%) of total development costs as set forth on the Total Project Budget subject to market terms and
conditions, with Borrower serving as the borrower; provided however, any “transfer” restrictions therein shall be at
the sole but reasonable discretion of the BR Member. In the event that the Catalyst Member fails to secure a Loan within six (6)
months after the date hereof, then, subject to Section 7.07, the BR Member shall have the right to secure a Loan on behalf of the
Borrower.

 

(b)          If
required in connection with the Loan, the Catalyst Member and/or an affiliate of the Catalyst Member acceptable to Lender in its
sole discretion shall be obligated to provide, or cause its Affiliate to provide (subject to the requirements of the applicable
Lender), any required guaranty or indemnity, including, without limitation, any project completion and repayment guaranties (each,
a “Recourse Guaranty”) and any “bad boy” non-recourse carveout guaranty and/or any environmental indemnification
agreement (each a “Non-Recourse Carveout Guaranty”); provided, however, the terms and conditions of such guaranty or
indemnity shall be subject to the approval of the Catalyst Member in its sole and absolute discretion (each, as the same may be
amended or restated from time to time, a “Loan Guaranty”). The BR Member, in its sole and absolute discretion may,
if it elects to do so, provide or cause one of its Affiliates to provide, a Non-Recourse Carveout Guaranty on terms and conditions
satisfactory to BR Member in its sole discretion. Neither BR Member nor any Affiliate of BR Member shall be required to execute
a Recourse Guaranty or Non-Recourse Carveout Guaranty.

 

(c)          Notwithstanding
anything contained in this Agreement to the contrary, the Catalyst Member, for so long as the Catalyst Member or its Affiliate
has any outstanding Loan Guaranty, may unilaterally in the first instance make a call upon the Members for Additional Capital Contributions
to fund on a timely basis (other for than Hard Cost Overruns or Soft Cost Overruns, or for any such portions of the capital that
the Brown Co-Tenants would be obligated to fund under the TIC Agreement, or for amounts equivalent to Section 8.04(a) Advances)
any Debt Service Shortfall or other payment which if unpaid would constitute a payment default on any such guaranty or under
the Loan (a “Protection Payment”). Furthermore, if there is an imminent payment default under the Loan and the Catalyst
Member has not initiated the capital call noted above, then the BR Member may do so to the same extent necessary to raise the necessary
capital to make a Protection Payment.

 

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In the event that either Member elects
to make such capital call for a Protection Payment, it shall cause the Company to cause the Borrower to issue a Cash Call Notice
(as that term is defined in the TIC Agreement) to the Co-Tenants, and they shall each have fourteen (14) days to fund their respective
shares of the required capital; namely, the Brown Co-Tenants shall be obligated to fund ten percent (10%) as Additional Cash Contributions
pursuant to the TIC Agreement, and the Company shall be required to fund the other ninety percent (90%) (all of which shall be
funded by the BR Member as an Additional Capital Contribution pursuant to this Agreement). Notwithstanding the foregoing, if the
Brown Co-Tenants do not timely fund their 10% share, then the Company shall be required to fund the full one hundred percent (100%)
of the amount required pursuant to the Cash Call Notice (of which 90% shall be funded by the BR Member and 10% shall be funded
by the Catalyst Member as an Additional Capital Contribution pursuant to this Agreement).

 

If either the BR Member, on the one hand,
or both the Brown Co-Tenants and the Catalyst Member, on the other hand, fails or refuses to timely contribute its above share
of such call for Additional Capital Contributions for a Protection Payment, then the Member initiating the capital call, as the
sole remedy against the other Member, shall have the right to unilaterally cause the Borrower, but only so long as and only to
the extent necessary to prevent or cure such default under a Loan Guaranty, to (1) refinance the Loan on commercially reasonable
terms, (2) obtain commercially reasonable supplemental loans secured by assets of the Borrower, (3) enter into negotiations with
the Lender to restructure the Loan and modify the terms of the Loan on commercially reasonable terms, (4) sell the Project, (5)
exercise the Buy/Sell under Section 12.06 (notwithstanding any “lockout” period in Section 12.06) or (6) in the case
of the Catalyst Member, initiate its Put Right. For avoidance of doubt, failure to fund such call for Additional Capital Contributions
shall not give rise to Shortfall funding rights or treatment under Section 8.04(e) to the extent one Member, but not the other,
funds.

 

(d)          The
Catalyst Member shall have the unilateral right to cause the Borrower to refinance the Loan with Standard Market Financing at any
time; provided, however:

 

(A)       (i) before closing the new
refinancing loan the Catalyst Member must provide the terms of such proposed new loan to the BR Member (including without limitation
a copy of a fully negotiated term sheet or similar evidence of the terms of the proposed Standard Market Financing), (ii) the BR
Member shall have sixty (60) days from the date it receives the terms of such new proposed loan from the Catalyst Member within
which to obtain a loan proposal with the same or better economic terms than those obtained by the Catalyst Member (without requirement
for any guaranty or indemnity agreement by the Catalyst Member or any of its Affiliates, except as may have been included in the
Standard Market Financing proposal provided by the Catalyst Member), (iii) if the BR Member is able to obtain better loan terms
than those obtained by the Catalyst Member, the Company and the Members shall take any and all actions necessary to cause the Borrower
to close the new loan proposed by the BR Member and (iv) if the BR Member is unable to obtain better loan terms, the Company and
the Members shall take any and all actions necessary to cause the Borrower to close the Standard Market Financing obtained by the
Catalyst Member; and

 

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(B) in no event shall any such
refinancing loan under this Section 6.05(d), (i) include any prepayment lock-outs (but this provision does not prohibit
breakage costs for loans based on LIBOR or other matched-funding arrangements or prepayment premiums not based on yield maintenance),
(ii) provide for a principal amount in excess of the then-current principal amount of the Loan (except for an increase in principal
to pay transactional costs for closing of the refinancing), (iii) provide for additional interest or similar payments to the lender
based on cash flow or profits of the Company or capital proceeds realized by the Company, (iv) except for a standard CMBS financing
transaction, be pooled (including as to collateralized or defaults) with any property not owned by the Company or (v) require the
BR Member or its Affiliates to take on any guaranty obligations beyond that which it had in connection with the Loan.

 

Notwithstanding the foregoing,
if the Catalyst Member has not prior to 120 days before maturity of the Loan put forth a Standard Market Financing proposal to
refinance the Loan, then the BR Member may proceed to refinance it on commercially reasonable terms so long as such refinancing
meets the same requirements and limitations in subsection (B) above and such financing does not require any guaranty or indemnity
agreement by the Catalyst Member or any of its Affiliates beyond a Non-Recourse Carveout Guaranty of substantially similar scope
to that signed by the BR Member or its Affiliates.

 

6.06       Default.
If any Member or its Affiliate commits any Default Action (as defined below), then, provided the other Member and/or its Affiliate
is not in material breach or default hereunder and has not otherwise committed a Default Action, in addition to the rights available
under this Agreement (including but not limited to Section 5.09) and any other legal or equitable remedy available to the non-breaching
Member, the non-breaching Member shall be entitled to recover its actual damages, including reasonable attorney’s fees (but
specifically excluding special, consequential, punitive or exemplary damages) sustained by the non-breaching Member as a result
of such Default Action. The following actions are collectively referred to as “Default Actions”: (1) Bankruptcy of
a Member, (2) willful misconduct or gross negligence, (3) willful misappropriation of Company or Borrower funds, (4) the transfer
of a Membership Interest in violation of this Agreement (5) any action or omission that, to the extent caused solely by a Member’s
actions or omissions, results in Lender asserting liability under a Non-Recourse Carveout Guaranty (but expressly excluding therefrom,
any liquidity based non-recourse carveout), (6) withdrawal of a Member in violation of the Agreement; (7) solely with respect to
the Catalyst Member, the Bankruptcy of Developer or any Affiliate of Catalyst that has provided a Loan Guaranty, but only to the
extent that the Bankruptcy by a Catalyst Affiliate triggers a default under the terms of the applicable Loan and (8) solely with
respect to the BR Member, the Bankruptcy of Bluerock Residential Growth REIT, Inc. following the date that it first acquires a
direct or indirect common interest in the Company or the Project; provided, that the non-defaulting Member shall provide notice
to the defaulting Member of the occurrence of any Default Action under clauses (1), (4), (5), (6), (7) or (8) and the defaulting
Member shall have thirty (30) days from the receipt of such notice to cure such Default Action; provided, however, that if more
than thirty (30) days is reasonably required to cure such Default Action and if the defaulting Member has commenced to cure within
the original thirty (30) day cure period and diligently continues to cure such default, then the defaulting Member shall receive
such additional time as is reasonably necessary to cure the Default Action (not to exceed an additional thirty (30) days).

 

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ARTICLE
7.

MEETINGS OF MEMBERS

 

7.01       Meetings.
Meetings of the Members, for any purpose or purposes, may be called by the Managers or any Member.

 

7.02       Place
of Meetings. The Persons calling any meeting may designate any place in Atlanta, Georgia 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 Georgia.

 

7.03       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 five (5) days before the date of the meeting, either personally
or by mail, by or at the direction of the Managers 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 (2) 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.

 

7.04       Meeting
of all Members. If all of the Members shall meet at any time and place, either within or outside of the State of Georgia, 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.

 

7.05       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 Managers 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.

 

7.06       Quorum.
All of the Members, represented in person or by proxy, shall constitute a quorum at any meeting of Members.

 

7.07       Manner
of Acting. The affirmative consent of both the BR Member and the Catalyst Member shall be required to approve these actions
(each, a “Major Decision”):

 

(a)          do
any act in contravention of, or amend the Company’s Certificate of Formation or this Operating Agreement;

 

(b)          do
any act not specifically authorized herein which would make it impossible or impractical to own or develop the Project or to otherwise
carry on the ordinary business of the Company or the Borrower;

 

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(c)          possess
any property of the Company or assign the rights of the Company in any specific property of the Company for other than a Company
purpose;

 

(d)          change
or reorganize the Company into any other legal form or to cause any merger of the Company with another entity;

 

(e)          commence,
or respond to, or settle any litigation involving the Company, the Borrower or the Property;

 

(f)          filing
or initiating a Company or Borrower Bankruptcy;

 

(g)          permit
or cause the Company or the Borrower to purchase or invest in real property other than its co-tenancy interest in the Project;

 

(h)          make
loans using funds of the Company;

 

(i)          except
as expressly provided in Section 12.02, the admission of additional Members to the Company;

 

(j)          take
any action which would cause a default under the Loan or reasonably be expected to otherwise expose the Catalyst Member, BR Member
or any Affiliate thereof to liability under any Loan Guaranty;

 

(k)          enter
into any transaction with a Member and/or any Affiliate thereof (except as expressly authorized herein);

 

(l)           adoption
of or modifications to the preliminary drawings or the final bid set of construction drawings and specifications for the Project
(collectively, such plans, drawings and specifications, as they may be modified in accordance with this Agreement, are referred
to as the “Plans”); and any changes to the final Plans, including, without limitation, any Discretionary Changes (as
hereinafter defined); except for (i) government-mandated changes, (ii) supplemental instructions and clarifications issued by the
Project architect, (iii) changes required by a Lender, and (iv) changes deemed appropriate by the Catalyst Member that individually
do not increase or decrease Hard Costs by more than $75,000 and, when taken together with all other change orders that are not
either approved by the Members or required by governmental authorities or a Lender, do not increase or decrease Hard Costs, on
a net basis, by more than $200,000 in the aggregate; provided, however, that no such changes described in this clause (iv) shall
be inconsistent with the Total Project Budget;

 

(m)         approve
any modifications to the Total Project Budget;

 

(n)          make
any expenditure or incur any obligation that varies from the Total Project Budget or Operating Budget, as applicable;

 

(o)          approve
any general contractor or co-developer for the Property, or any agreement with such Person, except (i) as provided in Section 5.12
or (ii) for the engagement of a replacement developer if the Catalyst Member is removed as a Manager under Section 5.09;

 

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(p)          incur
any indebtedness for borrowed money or grant a security interest in the Company’s or Borrower’s property;

 

(q)          enter
into any one or more agreements or contractual commitments, on behalf of the Company or the Borrower obligating the Company or
Borrower, as applicable, to make expenditures exceeding, in the aggregate for any one year, $30,000 (except as expressly authorized
herein);

 

(r)          
approve any Operating Budget or make any modifications thereto;

 

(s)          subject
to Sections 6.05(c), 6.05(d), 12.06 and 12.09, any sale, refinance or other capital transaction with regard to the Project;

 

(t)          in
the event of a fire, other casualty or partial condemnation of the Property, a determination whether to construct or reconstruct
improvements located in the Property, where such construction or reconstruction would cost in excess of One Hundred Thousand Dollars
($100,000) and is not required under the terms and provisions of any lease, mortgage or deed of trust affecting the damaged or
condemned portion of the Property in question;

 

(u)          any
material changes to the Company’s or Borrower’s business plan, including without limitation changes with regard to
leasing strategy and rental rates;

 

(v)         hiring
or terminating any property manager and the entry into any related property management agreement for the Property; and

 

(w)        making
any decisions or elections under the Trust Agreement or TIC Agreement.

 

Notwithstanding anything contained herein
to the contrary, the items listed in subsections (p) through (w) above shall cease to be Major Decisions and shall only require
the approval of the BR Member, after soliciting the viewpoint of the Catalyst Member, from and after the date that the Termination
Conditions (as hereinafter defined) have been satisfied. As used herein, “Termination Conditions” shall mean (i) at
least thirty (30) months have lapsed from the date of this Agreement, and (ii) the Catalyst Member and/or any Affiliate have been
or, upon consummation of the proposed Major Decision, will be released in full from any Loan Guaranty.

 

7.08         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.

 

7.09         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 all of the Members. 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.

 

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7.10       Waiver
of Notice. Pursuant to Section 18-302(c) of the Act, 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.

 

7.11       Meeting
by Telephone; Action by Consent. Pursuant to Section 18-302(d) of the Act, 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.

 

ARTICLE
8.

CONTRIBUTIONS TO THE COMPANY AND CAPITAL
ACCOUNTS

 

8.01       Members’
Initial Capital Contributions. Each Member shall be obligated to contribute such amount as is set forth in Exhibit “A”
hereto as its share of the Initial Capital Contribution. The Members shall make their entire Initial Capital Contribution on the
date hereof. In addition to the Members’ Initial Capital Contributions, Exhibit A for informational purposes only
reflects the initial capital contributions into the Borrower that will be required from and simultaneously made by the Brown Co-Tenants.
Notwithstanding the foregoing, the Members agree that all Pursuit Costs (as such term is defined in the Cost-Sharing Agreement)
previously incurred by a Member or its Affiliate either (i) shall be deemed an Initial Capital Contribution of such Member and
reduce the amount otherwise to be contributed by it to the Company or (ii) shall be refunded to such Member by the Borrower such
that each of the Co-Tenants bears its pro rata share of such amount.

 

8.02       Additional
Contributions. Except as set this Article 8, no Member shall be required to make any Capital Contributions to the Company.

 

8.03       Loans
to Company. To the extent approved by the Managers and Members pursuant to Section 7.07, any Member may make a secured or unsecured
loan to the Company or the Borrower.

 

8.04       Mandatory
Additional Capital Contributions; Cost Savings.

 

(a)          Non-Development
Cost Overruns. Except as separately addressed in Section 8.04(b) for Hard Cost Overruns and Soft Cost Overruns, in the event
the Borrower is reasonably expected to incur a Non-Development Cost Overrun not solely caused by the Catalyst Member, the BR Member
or their respective Affiliates and is expected to result in the Borrower having an imminent cash deficit, and such funds are not
obtained pursuant to Section 8.03 above or pursuant to the TIC Agreement, the Catalyst Member as Manager shall in the first
instance determine the amount of required funds (but if it fails to timely do so, the BR Member as Manager may do so), shall notify
the Management Committee of same and shall recommend that the Management Committee make a capital call for such funds pursuant
to this Section 8.04(a).

 

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Upon the receipt of such
recommendation, the Management Committee shall evaluate it in good faith and determine whether such capital call is reasonably
required under the circumstances. In the event that the Management Committee elects to make such capital call, it shall cause the
Company to cause the Borrower to issue a Cash Call Notice (as that term is defined in the TIC Agreement) to the Co-Tenants, and
they shall each have fourteen (14) days to fund their respective shares of the required capital; namely, the Brown Co-Tenants shall
be obligated to fund ten percent (10%) as Additional Cash Contributions pursuant to the TIC Agreement, and the Company shall be
required to fund the other ninety percent (90%) (all of which shall be funded by the BR Member as an Additional Capital Contribution
pursuant to this Agreement). Notwithstanding the foregoing, if the Brown Co-Tenants do not timely fund their 10% share, then the
Company shall be required to fund the full one hundred percent (100%) of the amount required pursuant to the Cash Call Notice (of
which 90% shall be funded by the BR Member and 10% shall be funded by the Catalyst Member as an Additional Capital Contribution
pursuant to this Agreement). These fundings will, in turn, be contributed to the Borrower as Additional Cash Contributions (as
that term is defined and used in the TIC Agreement) and then returned by the Borrower back to the Company on a fourth priority
basis, in accordance with the provisions of the TIC Agreement.

 

Notwithstanding the
foregoing: (i) the Catalyst Member must on its own account solely fund into the Company any Non-Development Cost Overrun caused
by, or any other additional capital required by the Company because of, a Default Action of the Catalyst Member or its Affiliates
(a “Catalyst Section 8.04(a) Advance”) (to be paid back as provided in Section 9.01(f) below, but without any interest
or return thereon); and (ii) the BR Member must on its own account solely pay over to the Company any Non-Development Cost Overrun
caused by, or any other additional capital required by the Company because of, a Default Action of the BR Member or its Affiliates
(a “BR Section 8.04(a) Advance” and, generically with the Catalyst Section 8.04(a) Advance, the “Section 8.04(a)
Advance”) (to be paid back as provided in Section 9.01(f) below, but without any interest or return thereon).

  

(b)          Hard
Cost Overruns and Soft Cost Overruns. In the event the Borrower is reasonably expected to incur a Hard Cost Overrun or Soft
Cost Overrun, the Catalyst Member shall determine the amount of required funds to keep the Loan “in balance,” and shall
promptly notify the Management Committee of same and recommend that the Management Committee make a capital call for such funds
pursuant to this Section 8.04(b). Upon the receipt of the recommendation of the Catalyst Member, the Management Committee shall
evaluate it in good faith and determine whether such capital call is reasonably required under the circumstances. In the event
that the Management Committee elects to make such capital call, it shall cause the Company to cause the Borrower to issue a Cash
Call Notice (as that term is defined in the TIC Agreement) to the Co-Tenants, and they shall each have fourteen (14) days to fund
their respective shares of the required capital; namely, the Brown Co-Tenants shall be obligated to fund ten percent (10%) as Additional
Cash Contributions pursuant to the TIC Agreement, and the Company shall be required to fund the other ninety percent (90%) (of
which 55.56% shall be funded by the BR Member and 44.44% shall be funded by the Catalyst Member as an Additional Capital Contribution
pursuant to this Agreement). Notwithstanding the foregoing, if the Brown Co-Tenants do not timely fund their 10% share, then the
Company shall be required to fund the full one hundred percent (100%) of the amount required pursuant to the Cash Call Notice (of
which 50% shall be funded by the BR Member and 50% shall be funded by the Catalyst Member as an Additional Capital Contribution
pursuant to this Agreement).

 

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(c)          In
the event a Member fails (as applicable, the “Defaulting Member”) to make all the Additional Capital Contributions
required above, or its Section 8.04(a) Advances, by the due date (the “Contribution Default Date”), the non-Defaulting
Member(s) may (but shall not be obligated to) contribute the unpaid portion that the Defaulting Member was obligated to fund (the
“Shortfall”). If there is more than one non-Defaulting Member desiring to contribute the Shortfall on behalf of a Defaulting
Member, then such non-Defaulting Members shall be entitled to do so in such amounts as they may agree among each other, or, in
the absence of such agreement, in proportion to their respective Ownership Percentages. For the avoidance of doubt, it is the intent
of the Members that any such Shortfall will, in turn, be contributed to the Borrower and that the Borrower will then return such
Shortfall to the Company on a priority basis, in accordance with the provisions of the TIC Agreement.

 

(d)          Cost
Savings. With the approval of the Lender, the Catalyst Member may reallocate Cost Savings within Hard Costs or Soft Costs to
other line items within either such category of the Total Project Budget (including the contingency for Hard Costs or Soft Costs)
in order to pay for Hard Cost Overruns before having to make a capital call to pay for such Hard Cost Overruns or to pay for Soft
Cost Overruns before having to make a capital call to pay for such Soft Cost Overruns. The Catalyst Member shall provide to the
BR Member, on a monthly basis, a list of any proposed Cost Savings to be reallocated to another line item of the Total Project
Budget, identifying the line item from which the Cost Savings originated and the line item to which the Cost Savings were reallocated
if approved by the Lender. In the event Lender approves a construction draw on the Loan to pay the aggregate Cost Savings to Borrower,
then in such event the Catalyst Member shall be entitled to 100% of the proceeds derived from such funding draw on the Loan.

 

(e)          Failure
to Make Section 8.04(a) Advances or Fund Cost Overruns. Notwithstanding anything contained herein to the contrary, and in addition
to any other rights available under this Agreement, if a non-Defaulting Member contributes a Shortfall amount on behalf of a Defaulting
Member in connection with the failure to make Additional Capital Contributions required to fund Hard Cost Overruns or Soft Cost
Overruns or Section 8.04(a) Advances, then the non-Defaulting Member shall be credited with Additional Capital Contributions at
a 3:1 ratio for each such dollar of Shortfall/Additional Capital Contribution so made on behalf of the Defaulting Member. For example,
if the Brown Co-Tenants fail to fund their share of a Hard Cost Overrun and the Catalyst Member fails on their behalf to do so
as required under Section 8.04(b), the BR Member shall have the right but not the obligation to fund such amount to the Company
as an Additional Capital Contribution and, to the extent that it does, shall be credited at a 3:1 ratio (meaning, for every $100,000
of Additional Capital Contribution made by the BR Member for that purpose, the BR Member would be credited with having made $300,000
of Additional Capital Contributions and the 10% Additional Contribution Priority Return will be calculated on such $300,000 figure).
For the avoidance of doubt, as provided in the TIC Agreement, any such Shortfalls/Additional Capital Contributions made under this
Section 8.04(e) and contributed to the Borrower will be entitled to the same 3:1 ratio at the Borrower level and shall be returned
by the Borrower to the Company with the three times multiple, along with any further preferred return thereon, on a priority basis,
in accordance with the TIC Agreement. For the avoidance of doubt, this Section 8.04(e) shall not apply with respect to the
failure of a Member to fund Non-Development Cost Overruns.

 

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(f)          The
remedies provided in this Section 8.04 with respect to any Member’s failure to make any Additional Capital Contribution or
Section 8.04(a) Advance shall be the sole and exclusive remedies of the non-Defaulting Member for such failure.

 

8.05       Withdrawal
or Reduction of Members’ Contributions to Capital.

 

(a)          A
Member shall not receive out of the Company’s property any part of such Member’s Capital Contributions until all liabilities
of the Company, except liabilities to Members on account of their Capital Contributions, have been paid or there remains property
of the Company sufficient to pay them.

 

(b)          A
Member, irrespective of the nature of such Member’s Capital Contribution, has only the right to demand and receive cash in
return for such Capital Contribution.

 

8.06       Maintenance
of Capital Accounts. The Company shall establish and maintain a Capital Account for each Member and Economic Interest Owner.
Each Member’s Capital Account shall be increased by (a) the amount of any Capital Contribution contributed by the Member
to the Company, (b) the fair market value of any property, as determined by the Company and the Member by arm’s length agreement
at the time of contribution (net of liabilities assumed by the Company or subject to which the Company takes such property within
the meaning of Section 752 of the Code), and (c) the Member’s share of Profits and of any separately allocated items of income
or gain (including any gain or income allocated to the Member to reflect the difference between the book value and tax basis of
assets contributed by such Member). Each Member’s Capital Account shall be decreased by (a) the amount of any money distributed
to the Member by the Company (excluding payments received by a Member from the Company as repayment of a loan by the Company to
the Member), (b) the fair market value of any property distributed to the Member (net of liabilities of the Company assumed by
the Member or subject to which the Member takes such property within the meaning of Section 752 of the Code), and (c) the Member’s
share of Losses and of any separately allocated items of deduction or loss (including any loss or deduction allocated to the Member
to reflect the difference between the book value and tax basis of assets contributed by the Member).

 

ARTICLE
9.

DISTRIBUTIONS

 

9.01       Distributions.
Distributions of Net Cash Flow and Capital Proceeds shall be distributed and applied by the Managers in the following order and
priority:

 

(a)          First,
to non-Defaulting Members, pari passu, in accordance with their accrued but unpaid Additional Contribution Priority Return, if
any, until each non-Defaulting Member entitled to an Additional Contribution Priority Return is paid such amount in full;

 

(b)          Next,
to non-Defaulting Members, pari passu, in accordance with their Additional Capital Contributions, until their unreturned Additional
Capital Contributions are reduced to zero;

 

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(c)          Next,
to Defaulting Members, pari passu, in accordance with their accrued but unpaid Additional Contribution Priority Return, if any,
until each Defaulting Member entitled to an Additional Contribution Priority Return is paid such amount in full;

 

(d)          Next,
to Defaulting Members, pari passu, in accordance with their Additional Capital Contributions, until their unreturned Additional
Capital Contributions are reduced to zero;

 

(e)          Next,
to the Members, pari passu, in accordance with their Ownership Percentages, until such time as the BR Member has received an amount
which, when aggregated with all prior applicable distributions pursuant to subsections (a) through (d) above, is equal to the greater
of (1) an Internal Rate of Return of ten percent (10%) and (2) 135% of the BR Member’s IRR-Included Capital Contributions;

 

(f)          Next,
to each applicable Member in accordance with their Section 8.04(a) Advances, without interest, pari passu to the Members based
on the principal amounts advanced with respect to each Member;

 

(g)          Next,
pari passu, 69.44% to the BR Member and 30.56% to the Catalyst Member, until such time as the BR Member has received an Internal
Rate of Return of at least twenty percent (20%); and

 

(h)         Thereafter,
pari passu, 61.11% to the BR Member and 38.89% to the Catalyst Member.

 

9.02         Limitation
Upon Distributions. No distribution shall be made to Members if prohibited by Section 18-607 of the Act.

 

9.03         Interest
On and Return of Capital Contributions. No Member shall be entitled to interest on its Capital Contribution or to return of
its Capital Contribution, except as otherwise specifically provided for herein.

 

ARTICLE
10.

ALLOCATIONS OF NET PROFITS AND NET
LOSSES

 

10.01      Allocation
of Profits and Losses. Profits and Losses for any Fiscal Year or other
period of the Company will be allocated to the Members as follows: 

 

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(a)          Allocations
of Profits and Losses for Capital Account Purposes. After giving effect to the special allocations set forth in Sections 10.02
and 10.03, Profits and Losses of the Company for any Fiscal Year or portion thereof shall be allocated among the Capital Accounts
of the Members in such a manner that would cause, to the extent possible, the Capital Accounts of the Members as of the end of
a Fiscal Year or portion thereof, after adjustment for all contributions and distributions during the year, and after adjustment
for the special allocations set forth in Sections 10.02 and 10.03 (including the allocations of such Members’ shares of the
“partnership minimum gain” and “partner nonrecourse debt minimum gain” (as such terms are used in Regulation
Section 1.704-2) not otherwise required to be taken into account during such period), to equal the aggregate distributions
that the Members would be entitled to receive pursuant to Section 9.01, in each case determined as if (i) all assets of the
Company, including cash, were sold for their Gross Asset Values (which, for the avoidance of doubt, shall not be “booked
up” to fair market value for this purpose outside of an actual liquidation), (ii) all Company liabilities, including the
Company’s share of any liability of any entity treated as a partnership for U.S. federal income tax purposes in which the
Company is a partner, were satisfied in cash according to their terms (each nonrecourse liability is limited to the book value
of the assets securing such liability) and (iii) the remaining proceeds were distributed in accordance with Section 9.01.
The Managers, based on the advice of the Company’s tax advisors, shall have the authority to correct or adjust any allocation
provision hereunder as it determines to be necessary or appropriate (and not unfairly discriminatory against any Member) for such
allocations, in the aggregate, to be made in the manner provided in the first sentence of this Section 10.01.

 

(b)          Limitations
on Losses for Capital Account Purposes. Notwithstanding anything in Section 10.01(a) to the contrary, the Managers will
not allocate any item of loss or deduction to a Member that would cause or increase a deficit balance in such Member’s Capital
Account (as increased by such Member’s share of “partnership minimum gain” and “partner nonrecourse debt
minimum gain”, as such terms are defined in Regulations Section 1.704-2 and applied to the Members of the Company),
and will make special allocations of the Profits or Losses of the Company among the Members as necessary to cause the allocations
under this Section 10.01 to be respected under Code Section 704(b) and Regulations Section 1.704 1(b)(1). The Managers
shall, to the extent possible and in whatever manner they deem appropriate, make subsequent curative allocations of other items
of income, gain, loss and deduction to offset any such special tax allocations.

 

10.02     Special
Allocations. The following special allocations shall be made in the following order:

 

(a)          Minimum
Gain Chargeback. Notwithstanding any other provision of this Article 10, if there is a net decrease in Company Minimum Gain
during any Company Fiscal Year, each Member shall be specially allocated items of Company income and gain for such year (and, if
necessary, subsequent years) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain, determined
in accordance with Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion
to the respective amounts required to be allocated to each Member pursuant thereto. The items to be so allocated shall be determined
in accordance with Section 1.704-2(f) of the Regulations. This Section 10.02(a) is intended to comply with the minimum
gain chargeback requirement in such Section of the Regulations and shall be interpreted consistently therewith.

 

(b)          Member
Minimum Gain Chargeback. Notwithstanding any other provision of this Article 10, except Section 10.02(a), if there is
a net decrease in Member Minimum Gain attributable to a Member Nonrecourse Debt during any Company Fiscal Year, each Member who
has a share of the Member Minimum Gain attributable to such Member Nonrecourse Debt, determined in accordance with Regulations
Section 1.704-2(i)(5), shall be specially allocated items of Company income and gain for such year (and, if necessary, subsequent
years) in an amount equal to such Member’s share of the net decrease in Company Minimum Gain attributable to such Member
Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence
shall be made in proportion to the respective amounts required to be allocated to each Member pursuant thereto. The items to be
so allocated shall be determined in accordance with Section 1.704-2(i)(4) of the Regulations. This Section 10.02(b) is
intended to comply with the minimum gain chargeback requirement in such Section of the Regulations and shall be interpreted
consistently therewith.

 

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(c)          Qualified
Income Offset. In the event any Member unexpectedly receives any adjustments, allocations, or Distributions described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Company income and gain shall be specially allocated to each such Member
in an amount and manner sufficient to eliminate, to the extent required by the Regulations, the Adjusted Capital Account Deficit
of such Member as quickly as possible, provided that an allocation pursuant to this Section 10.02(c) shall be made if and
only to the extent that such Member would have an Adjusted Capital Account Deficit after all other allocations provided for in
this Article 10 have been tentatively made as if this Section 10.02(c) were not in the Agreement.

 

(d)          Gross
Income Allocation. In the event any Member has a deficit Capital Account at the end of any Company Fiscal Year that is in excess
of the sum of (i) the amount such Member is obligated to restore, and (ii) the amount such Member is deemed to be obligated to
restore pursuant to the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Member shall
be specially allocated items of Company income and gain in the amount of such excess as quickly as possible, provided that an allocation
pursuant to this Section 10.02(d) shall be made if and only to the extent that such Member would have a deficit Capital Account
in excess of such sum after all other allocations provided for in this Article 10 have been tentatively made as if Section 10.02(c)
hereof and this Section 10.02(d) were not in the Agreement.

 

(e)          Nonrecourse
Deductions. Nonrecourse Deductions for any fiscal year or other period shall be specially allocated to the Members in accordance
with their respective Ownership Percentages.

 

(f)          Member
Nonrecourse Deductions. Any Member Nonrecourse Deductions for any fiscal year or other period shall be specially allocated
to the Member who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse
Deductions are attributable in accordance with Regulations Section 1.704-2(i).

 

(g)          Section 754
Adjustment. To the extent an adjustment to the adjusted tax basis of any Company asset pursuant to Code Section 734(b)
or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially
allocated to the Members in a manner consistent with the manner in which their Capital Accounts are required to be adjusted pursuant
to such Section of the Regulations.

 

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10.03     Curative
Allocations.

 

(a)          The
allocations set forth in Sections 10.01(b) and 10.2 (the “Regulatory Allocations”) are intended to comply with certain
requirements of the Regulations. It is the intent of the Members that, to the extent possible, all Regulatory Allocations shall
be offset either with other Regulatory Allocations or with special allocations of other items of Company income, gain, loss or
deduction pursuant to this Section 10.03. Therefore, notwithstanding any other provision of this Article 10 (other than the
Regulatory Allocations), the Managers shall make such offsetting special allocations of Company income, gain, loss or deduction
in whatever manner they determine appropriate so that, after such offsetting allocations are made, each Member’s Capital
Account balance is, to the extent possible, equal to the Capital Account balance such Member would have had if the Regulatory Allocations
were not part of the Agreement and all Company items were allocated pursuant to Section 10.01.

 

(b)          The
Managers shall have reasonable discretion, with respect to each Company Fiscal Year, to (i) apply the provisions of Section 10.03(a)
hereof in whatever manner is likely to minimize the economic distortions that might otherwise result from the Regulatory Allocations,
and (ii) divide all allocations pursuant to Section 10.03(a) hereof among the Members in a manner that is likely to minimize
such economic distortions.

 

10.04     Tax
Allocations.

 

(a)          Except
as set forth in this Section 10.04, allocations for income tax purposes of items of income, gain, loss, deduction, and credits,
and basis therefor, shall be made in the same manner as allocations for book purposes set forth in Sections 10.01, 10.02 and 10.03
hereof. In applying this Section 10.04, each item of income, gain, expense and loss for a period not specially allocated shall
be allocated in the same proportions as the allocation of Profits and Losses for such period.

 

(b)          In
the event of a contribution of property other than cash to the Company, income, gain, loss and deduction with respect to such contributed
property shall be shared among the Members for tax purposes so as to take account of the variation between the basis of the property
to the Company and its fair market value at the time of contribution in accordance with Code Section 704(c) and the Regulations
thereunder.

 

(c)          In
the event the book value of any Company asset is adjusted to equal its fair market value in accordance with Regulations Sections
1.704-1(b)(2)(iv)(d) and 1.704-1(b)(2)(iv)(f), subsequent allocations of income, gain, loss and deduction with respect to such
asset shall take into account any variation between the adjusted basis of such asset for federal income tax purposes and its fair
market value pursuant to Code Section 704(c) and the Regulations thereunder.

 

(d)          In
accordance with Sections 704(b) and 704(c) of the Code and applicable Treasury Regulations, including Treasury Regulations Section 1.704-1(b)(4)(i),
items of income, gain, deduction and loss with respect to any property that is properly reflected on the books of the Company at
a book value that differs from the adjusted tax basis of such property within the meaning of the Regulation 1.704-1(b)(2)(iv)(g)(1)
(“Book Property”) (and, if necessary, any other property of the Company) shall, solely for tax purposes, be allocated
among the Members so as to take account of any variation between the adjusted basis of the Book Property to the Company for federal
income tax purposes and its book value.

 

    	37

    	 

    

  

(e)          To
the extent of any recapture income resulting from the sale or other taxable disposition of assets of the Company, the amount of
any gain from such disposition allocated to a Member (or a successor in interest) for federal income tax purposes pursuant to the
above provisions shall be deemed to be recapture income to the extent that such Member has been allocated or has claimed any deduction
directly or indirectly giving rise to the treatment of such gain as recapture income.

 

(f)          The
items of income, gain, deduction and loss for tax purposes allocated to the Members pursuant to this Section 10.04 shall not
be reflected in the Members’ Capital Accounts. Any elections or other decisions relating to such allocations shall be made
by the Managers in any manner that reasonably reflects the purpose and intent of this Agreement and is consistent with the economic
arrangement among the Members.

 

(g)          Pursuant
to Treasury Regulations Section 1.752-3(a)(3), the Members hereby agree to allocate excess nonrecourse liabilities of the
Company in accordance with their respective Ownership Percentages.

 

10.05         Varying
Interest in Company. Allocations to any Member whose Membership Interest changes during a Company Fiscal Year or to any Member
who is a Member for less than a full Company Fiscal Year, whether by reason of the admission of a Member, the withdrawal of a Member,
a non-pro rata contribution of capital to the Company or any other event described in Section 706(d)(1) of the Code and the
Regulations issued thereunder, shall be made in accordance with Section 706(d) of the Code and the Regulations promulgated
thereunder to take into account the varying Interests of the Members in the Company during the Company Fiscal Year.

 

ARTICLE
11.

BOOKS AND RECORDS

 

11.01     Accounting
Period. The Company’s accounting period shall be the calendar year.

 

11.02     Records.
Proper and complete records and books of accounts shall be kept or shall be caused to be kept by the Managers in which shall be
entered fully and accurately all transactions and other matters relating to the Company’s business in such detail and completeness
as is customary and usual for businesses of the type engaged in by the Company. The Company shall keep at its principal place of
business the following records:

 

(a)          A
current list of the full name and last known address of each Member, Economic Interest Owner and Manager;

 

(b)          Copies
of records to enable a Member to determine the relative voting rights, if any, of the Members;

 

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(c)          A
copy of the Certificate of Formation of the Company and all amendments thereto;

 

(d)          Copies
of the Company’s federal, state and local income tax returns and reports, if any, for the three most recent years;

 

(e)          Copies
of the Company’s written Operating Agreement, together with any amendments thereto;

 

(f)          Copies
of any financial statements of the Company for the three (3) most recent years.

 

The books and records
shall at all times be maintained at the principal office of the Company and shall be open to the reasonable inspection and examination
of the Members, Economic Interest Owners, or their duly authorized representatives during reasonable business hours.

 

11.03     Reports
and Financial Statements.

 

(a)          Within
fifteen (15) days of the end of each Fiscal Year, the Catalyst Member shall cause each Member to be furnished with the following
annual reports computed as of the last date 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
in such Fiscal Year.

 

(b)          Within
fifteen (15) days of the end of each quarter of each Fiscal Year, the Catalyst Member shall cause to be furnished to the BR Member
such information as reasonably requested by the BR Member, and to the extent not readily available, which may be reasonably prepared
by the Catalyst Member at the expense of the Company, 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 the BR Member. Further,
the Catalyst Member shall cooperate in a reasonable manner at the request of any Member, at the expense of the Company, 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 any 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.

 

11.04     Tax
Returns. Until such time as the BR Member otherwise elects by written notice to the Catalyst Member to undertake such preparation
and filing activities, the Catalyst Member shall cause the preparation and timely filing of all tax returns required to be filed
by the Company pursuant to the Code and all other tax returns deemed necessary and required in each jurisdiction in which the Company
does business 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 Member responsible for making such filings hereunder 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.

 

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ARTICLE
12.

TRANSFERABILITY

 

12.01     General
Prohibition. Except as provided in Sections 12.02, 12.06 and 12.09 hereof, in which event no consent from any party shall be
required to effectuate the transfer(s) described therein, no Member or Economic Interest Owner may assign, convey, sell, transfer,
liquidate, encumber, or in any way alienate (collectively a “Transfer”), all or any part of its Interest without the
prior written consent of the Members, which consent may be given or withheld in the sole discretion of any Member; provided, however,
that nothing contained herein shall prohibit any transfers of direct or indirect equity interests in the Members so long as, in
the case of the Catalyst Member, such transfers do not result in a Catalyst Change of Control until after the Termination Conditions
have been satisfied. Any attempted Transfer of all or any portion of an Interest without the necessary consent, or as otherwise
permitted hereunder, shall be null and void and shall have no effect whatsoever. Upon the transfer of a Membership Interest in
accordance with this Article 12, the Ownership Percentages of the transferring Member and of the transferee shall be adjusted accordingly.
Notwithstanding anything contained herein to the contrary, no Transfers shall be permitted that would violate the terms of any
Loan documents.

 

12.02     Affiliate
Transfers. Notwithstanding anything to the contrary contained in this Agreement, the following Transfers shall not require
the approval set forth in Section 12.01:

 

(a)          Any
Transfer by BR Member or a Bluerock Transferee of up to one hundred percent (100%) of its Interest to any Affiliate of Bluerock
Real Estate, L.L.C., including but not limited to (A) Bluerock Residential Growth REIT, 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, (D) Bluerock Special Opportunity + Income
Fund III, LLC (“BR SOIF III”) or any Person that is directly or indirectly owned by BR SOIF III, (E) Bluerock Growth
Fund, LLC (“BR Growth”) or any Person that is directly or indirectly owned by BR Growth, and/or (F) Bluerock
Growth Fund II, LLC (“BR Growth II”) or any Person that is directly or indirectly owned by BR Growth II (collectively,
a “Bluerock Transferee”); provided, that, following the date the BR REIT first acquires a direct or indirect
common interest in the Company or the Project, in all instances, BR REIT shall either retain, direct or indirectly, more than a
fifty percent (50%) equity interest in the BR Member or otherwise retain the power to control, directly or indirectly, the major
activities of the BR Member such that BR REIT can consolidate the BR Member on its audited financial statements; and

 

(b)          Provided
only that the development of the Project is complete (as evidenced by the delivery of a final certificate of occupancy, the delivery
of an architect’s certificate of completion and the release of the final contractor retainage), any Transfer by Catalyst
Member or a Catalyst Transferee of up to one hundred percent (100%) of its Interest to any Affiliate of the Catalyst Member (a
“Catalyst Transferee”).

 

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12.03     Conditions
of Transfer and Assignment. A transferee of an Interest pursuant to 12.01 or 12.02 shall become a Member only if the following
conditions have been satisfied:

 

(a)          the
transferor, his legal representative or authorized agent must have executed a written instrument of transfer of such Interest in
form and substance satisfactory to the Managers;

 

(b)          the
transferee must have executed a written agreement, in form and substance satisfactory to the Managers, to assume all of the duties
and obligations of the transferor under this Operating Agreement with respect to the transferred Interest and to be bound by and
subject to all of the terms and conditions of this Operating Agreement;

 

(c)          the
transferor, his legal representative or authorized agent, and the transferee must have executed a written agreement, in form and
substance satisfactory to the Managers to indemnify and hold the Company, the Managers and the other Members harmless from and
against any loss or liability arising out of the transfer;

 

(d)          the
transferee must have executed such other documents and instruments as the Managers may deem necessary to effect the admission of
the transferee as a Member; and

 

(e)          unless
waived by the Managers, the transferee or the transferor must have paid the expenses incurred by the Company in connection with
the admission of the transferee to the Company.

 

12.04    Transfers
of Economic Interest Only. A permitted transferee of an Economic Interest who does not become a Member shall be an Economic
Interest Owner only and shall be entitled only to the transferor’s Economic Interest to the extent assigned. Such transferee
shall not be entitled to vote on any question regarding the Company, and the Ownership Percentage associated with the transferred
Economic Interest shall not be considered to be outstanding for voting purposes.

 

12.05     Successors
as to Economic Rights. References in this Operating Agreement to Members shall also be deemed to constitute a reference to
Economic Interest Owners where the provision relates to economic rights and obligations. By way of illustration and not limitation,
such provisions would include those regarding Capital Accounts, distributions, allocations, and contributions. A transferee shall
succeed to the transferor’s Capital Contributions and Capital Account to the extent related to the Economic Interest transferred,
regardless of whether such transferee becomes a Member.

 

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12.06     Buy/Sell.

 

(a)          In
the event the Members are deadlocked and are unable to agree unanimously on any Major Decision that requires unanimity, and the
Members are unable through good faith and the exercise of their reasonable efforts to break such deadlock for a period of fifteen
(15) days following notice from one Member to the other Member that a deadlock exists with regard to a Major Decision, the deadlock
may be broken by the invocation of the provisions of this Section 12.06; provided, however, this Section 12.06 may be invoked if
and only if such deadlock occurs after the date which is 24 months from the date of Project Stabilization. Prior to invoking
the provisions of this Article, the Members shall in good faith meet within fifteen (15) days of such deadlock, and use their reasonable
efforts to resolve any disagreements regarding any Major Decision. As used in this Section 12.06, “deadlock” shall
mean the inability of the Members to unanimously agree with respect to a Major Decision that requires unanimity.

 

(b)          Either
Member may initiate the buy/sell procedure by providing a written notice (the “Value Notice”) to the other Member.
The Member which initiates the buy/sell procedure, is referred to herein as the “Offeror.” The Member who receives
the Value Notice is referred to herein as the “Offeree.” The Value Notice shall include an offer by the Offeror to
purchase all (and not less than all) of the Membership Interest(s) owned by the Offeree and an offer by the Offeror to sell all
(and not less than all) of the Membership Interest(s) owned by the Offeror to the Offeree. In the case of the BR Member, the offer
referred to in the preceding sentence shall also include an offer to purchase the co-tenancy interest of the Brown Co-Tenants;
and in the case of the Catalyst Member, the offer referred to in the preceding sentence shall also include an offer to sell the
co-tenancy interest of the Brown Co-Tenants (with respect to which the Catalyst Member represents to the BR Member that it has
such drag-along rights). The Value Notice shall specify an amount (the “Stated Amount”), which shall in any case be
not less than the aggregate of all indebtedness owed at that time by the Borrower, and which shall be used in the calculations
of the purchase price pursuant to this Section 12.06. Notwithstanding the foregoing, upon the receipt of a Value Notice from the
BR Member, the Catalyst Member shall have the right, to the extent available pursuant to Section 12.09, to exercise the Put Right
contained in Section 12.09 below by issuing a Put Notice within ten (10) business days thereafter, in which case the Value Notice
shall be deemed to have been rescinded by the BR Member.

 

(c)          The
Offeree shall have forty-five (45) days from its receipt of the Value Notice to provide a written notice (the “Election Notice”)
to the Offeror stating either that the Offeree will sell all (and not less than all) its Membership Interest(s) to the Offeror
or that the Offeree will purchase all (and not less than all) the Offeror’s Membership Interest(s) at the purchase price
referenced in Section 12.06(b) hereof. If the Offeree fails to give a timely Election Notice, the Offeree shall be deemed to have
elected to sell all (and not less than all) its Membership Interest(s) to the Offeror. The Election Notice shall specify the date
of closing (the “Buy-Sell Closing Date”), which date shall be at least thirty (30) days after the giving of the Election
Notice, but in any event not later than the ninetieth (90th) day after such notice. If the Offeree fails to provide an Election
Notice, the Buy-Sell Closing Date shall be held on the first Business Day which is at least ninety (90) days after the giving of
the Value Notice. For the sake of clarity, all references in this Section and in Sections 12.07 and 12.08 to the Membership Interest
of the Catalyst Member shall be deemed to include a reference to the co-tenancy interests of the Brown Co-Tenants, to the extent
applicable.

 

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(d)          The
Member (or Members) that finally becomes obligated to sell its or their Membership Interest(s) is sometimes referred to herein
collectively as the “Seller,” and the Member or Members that finally becomes obligated to purchase the other Member’s
or Members’ Membership Interest(s) is sometimes referred to herein as the “Buyer.” If the Catalyst Member is
the Seller, then the term shall also be deemed to include the Brown Co-Tenants.

 

(e)          The
aggregate purchase price for the Seller’s Membership Interest(s) pursuant to this Section 12.06 shall be that amount which
would be distributed to the Seller pursuant to Section 9.01 above (after giving effect to all applicable provisions of this Agreement,
but after liquidating all Reserves then existing and without establishing any additional Reserves) if the Project was sold by the
Borrower on the Buy-Sell Closing Date for a gross sales price equal to the Stated Amount and all liabilities and obligations of
the Borrower were satisfied from the proceeds from such sales price and any remaining proceeds were distributed to the Co-Tenants
by the Borrower as required under applicable agreements, and then the proceeds received by the Company were distributed to the
Members in accordance with Section 9.01. If the Catalyst Member is the Seller, then the purchase price shall also include that
amount that would be distributed to the Brown Co-Tenants directly pursuant to the TIC Agreement in connection with the sale of
the Project, with any such portion of the price allocable to the Brown Co-Tenants paid directly thereto in exchange for full and
complete relinquishment of any and all of their rights in and to the Trust or the Property. No Member shall be entitled to any
sales fee or commission if either Member exercises the buy/sell procedure set forth in this Section 12.06.

 

(f)          The
closing of a purchase of Membership Interest(s) pursuant to this Section 12.06 shall be held on the Buy-Sell Closing Date, subject
to the terms and conditions specified herein.

 

(g)         As
of the effective date of any transfer of a Membership Interest(s) pursuant to this Section 12.06, the Buyer shall assume all obligations
of the Seller with respect to the Membership Interest so transferred, including any liability of the Seller or any Affiliate thereof
with respect to any Company liabilities. Upon such transfer, the Seller’s rights and obligations under this Agreement shall
terminate with respect to such transferred Membership Interest, except as to indemnity rights of such Member under this Agreement
attributable to acts or events occurring prior to the effective date of such transfer. If the Buyer is the BR Member, the Buyer
shall also assume any obligations of the Brown Co-Tenants pursuant to the TIC Agreement.

 

(h)          Notwithstanding
anything contained herein to the contrary, if the Catalyst Member is the Buyer, the Catalyst Member shall have the right to assign
all of any portion of its rights under this Section 12.06 to one or more of the Brown Co-Tenants or their Affiliates.

 

12.07     Escrow
and Closing of Buy-Sell.

 

(a)          Closing
Time and Location. Except as otherwise provided for in this Agreement, the closing of any offer of a Membership Interest between
the Members pursuant to Section 12.06 shall take place through a mutually agreed escrow agent located in Atlanta, Georgia.

 

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(b)          Required
Documents. Prior to or at the closing, Seller shall supply to Buyer all documents customarily required (or reasonably required
by Buyer) to make a good and sufficient conveyance of such Membership Interest to the Buyer, which documents shall be in form and
substance reasonably satisfactory to the Buyer and Seller. All payments shall be by wire transfer of immediately available funds.

 

(c)          Conditions
Precedent to Closing. The obligation of Buyer to pay the purchase price shall be conditioned upon the Membership Interest being
transferred free and clear of all liens, claims and encumbrances (except for, in the case of the co-tenancy interest of the Brown
Co-Tenants, non-monetary liens otherwise affecting the Property that were of record on the date hereof or that were otherwise previously
approved by the Members (“Permitted Liens”)). This condition is for the sole benefit of Buyer and may be waived by
Buyer in whole or in part in its sole discretion.

 

(d)          Closing
Costs. Each party shall pay its own attorneys’ fees and expenses incurred in connection with the closing, and costs of
the escrow or closing, including, without limitation all premiums for title insurance and any escrow fees, recording charges, and
transfer taxes arising from the closing of the buy-sell transaction, shall be borne or allocated in the manner customary in the
area in which the Project is located and, to the extent no custom exists, shall be shared equally by Seller and Buyer. Unless previously
deducted in determining the price for the Membership Interest, the Buyer shall deduct from the price otherwise payable to the Seller
an amount equal to all liens, claims and encumbrances of a definite or ascertainable amount, if any, which encumber the Seller’s
Membership Interest being transferred which are not released or repaid on or prior to the closing (if Buyer elects to waive the
conditions set forth in Section 12.07(c)).

 

(e)          Warranty
of Title. The Seller shall represent, warrant and agree that its Membership Interest being sold hereunder is free of all liens,
claims and encumbrances (except liens, claims or encumbrances that were deducted in determining the applicable price of the Membership
Interest and except for Permitted Liens) and that the Seller shall defend, indemnify and hold harmless the Buyer from any such
liens, claims and encumbrances.

 

(f)          Closing
of Buy-Sell Transaction. At the closing of a sale of a Membership Interest by one Member to the other Member pursuant to Section
12.06 hereof, the following shall occur:

 

(i)          The
Seller shall convey and assign to the Buyer or its designee the entire Membership Interest of the Seller, free and clear of all
liens, claims and encumbrances (other than liens, claims and encumbrances that were waived by Buyer and deducted in determining
the applicable price of the Membership Interest and except for Permitted Liens), and the Seller and the Buyer shall execute all
documents which may be reasonably required to give effect to the sale and purchase of such Membership Interest.

 

(ii)         The
Buyer shall pay or cause to be paid to the Seller the applicable purchase price for the Membership Interest being purchased in
cash or by wire transfer at the closing.

 

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(iii)        Notwithstanding
any provision herein to the contrary, it shall be a condition or requirement of any offer and the closing to obtain a release of
the Seller and the Seller’s Affiliates from any personal liability arising out of any and all Recourse Guaranties and Non-Recourse
Carveout Guaranties.

 

12.08     Default.

 

(a)          Events
of Default. The failure of a Member to perform any of the obligations set forth in Sections 12.06 or 12.07 with respect to
an offer of its Membership Interest or purchase of the other Member’s Membership Interest shall constitute an event of default
(“Event of Default”) on the part of the Member with respect to whom such failure occurs.

 

(b)          Remedies.
Upon the occurrence of an Event of Default, the non-defaulting Member may exercise, in addition to all other rights and remedies
provided in this Agreement or available at law or in equity, any one or more of the remedies provided for in Section 12.08 (c)
below.

 

(c)          Remedies
for Failure to Transfer Membership Interest.

 

(i)          Seller’s
Failure. In the event that the Seller fails to make conveyance of its Membership Interest pursuant to its obligations herein,
then the Buyer shall have the option: (A) to demand and receive specific performance of the Seller’s obligations to convey
its Membership Interest as provided for herein; (B) to recover damages on account of the Seller’s failure to make conveyance
(which rights shall be in addition to the right granted under subparagraph (A) above, if the Buyer so elects); or (C) to terminate
the obligations of the parties to proceed with the sale of the Membership Interest, whereupon the position of the parties shall
revert to the status quo ante as if no notice to purchase from either party to the other had been given under the provisions of
this Agreement.

 

(ii)         Buyer’s
Failure. In the event that the Buyer defaults in the closing of a purchase of a Membership Interest as herein provided, then
the Seller shall have the option to: (A) elect to purchase the Buyer’s Membership Interest on the terms and conditions
otherwise set forth herein, by notice to the Buyer of the Seller’s intention so to do, given within fifteen (15) days after
such default in which event the Seller shall become the Buyer and the Buyer shall become the Seller, and all the applicable terms,
conditions and provisions of this Agreement with respect to such sales shall govern, except that the closing thereof shall take
place thirty (30) days after such date of notice from the Seller (now the Buyer) to the Buyer (now the Seller) and except that
the purchase price shall be ten percent (10%) less than the price which the Seller (now the Buyer) would have had to pay had such
Buyer (now the Seller) originally elected to sell its Membership Interest; (B) terminate the Seller’s obligation to convey
its Membership Interest to the Buyer by notice to the Buyer, in which case the position of the parties shall revert to the status
quo ante as if no notice from either party to the other had been given under the provisions of this Agreement; or (C) sue Buyer
in the appropriate court for specific performance.

 

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12.09     Catalyst
Put Right.

 

(a)          Notwithstanding
anything contained herein to the contrary, in the event that the Catalyst Member desires to either sell the Project or refinance
the Loan, and in either such case the BR Member fails to provide its consent thereto, then at the Catalyst Member’s election,
the Catalyst Member shall have the right to require that the BR Member purchase its Membership Interest on the terms contained
herein, along with the purchase of the co-tenancy interest of the Brown Co-Tenants (the “Put Right”); provided, however,
this Section 12.09 may only be invoked following Project Completion.

 

(b)          The
Catalyst Member may exercise the Put Right by providing a written notice (the “Put Notice”) to the BR Member. The Put
Notice shall state that the Catalyst Member is requiring the BR Member to purchase all (but not less than all) of the Membership
Interest owned by the Catalyst Member along with the co-tenancy interest of the Brown Co-Tenants at a price to be derived from
the Appraised Value of the Project. The Put Notice shall specify the date of closing (the “Put Closing Date”), which
date shall be no earlier than the later of (i) the thirtieth (30th) day after the giving of the Put Notice and (ii) the tenth (10th)
day following the final determination of Appraised Value, but in any event not later than the ninetieth (90th) day after such notice.

 

(c)          As
used herein, the term “Appraised Value” means the fair market value for the Project, to be established through the
following appraisal process. Each Member shall select an MAI certified appraiser, licensed in the State of Georgia, to value the
Project. If the deviation between the two valuations is less than three percent (3%), then the average of the two appraisals shall
form the basis of valuation for the Project. In the event the two appraised valuations deviate by more than three percent (3%),
then the two appraisers shall select a third appraiser to appraise the Project. The average of the two closest appraisals shall
form the basis of valuation for the Project. Catalyst shall have the right in its sole discretion to rescind its exercise of the
Put Right if it is unsatisfied with the results of the appraisal process but only on the following conditions: (i) it agrees to
bear all actual out-of pocket costs incurred in connection with the appraisal process; (ii) it agrees to waive all further rights
to exercise the Put Right; and (iii) if the BR Member had previously exercised the Buy-Sell in accordance with Section 12.06
above, the BR Member shall have the right to return to the extant Buy-Sell.

 

(d)          The
aggregate purchase price for the Catalyst Member’s Membership Interest pursuant to this Section 12.09 (the “Put Price”)
shall be that amount which would be distributed to the Catalyst Member pursuant to Section 9.01 above (after giving effect to all
applicable provisions of this Agreement, but after liquidating all Reserves then existing and without establishing any additional
Reserves) if the Project were sold by the Borrower on the Put Closing Date for a gross sales price equal to the Appraised Value
and all liabilities and obligations of the Borrower were satisfied from the proceeds from such sales price and any remaining proceeds
were distributed to the Co-Tenants by the Borrower, and then the proceeds received by the Company were distributed to the Members
in accordance with Section 9.01. In addition, the purchase price shall include that amount that would be distributed to the Brown
Co-Tenants directly pursuant to the TIC Agreement in connection with the sale of the Project, with any such portion of the price
allocable to the Brown Co-Tenants paid directly thereto in exchange for full and complete relinquishment of any and all of their
rights in and to the Trust or the Property. No Member shall be entitled to any sales fee or commission if the Catalyst Member exercises
the Put Right set forth in this Section 12.09.

 

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(e)          Notwithstanding
anything contained herein to the contrary, at any time prior to the commencement of vertical construction of the Project, in the
event that: (i) the Catalyst Member desires to commence vertical construction of the Project but is prohibited from doing so as
a result of the exercise by the BR Member of its rights pursuant to Section 7.07 above; and (ii) the Catalyst Member exercises
the Put Right as a result of its desire to market and sell the Project because of the BR Member’s unwillingness to proceed
with vertical construction, then the amount of the Put Price shall be an amount equal to the greater of: (x) the amount determined
pursuant to Section 12.09(d) above and (y) the sum of the (i) amount of the Catalyst Member’s Initial Capital Contributions
and (ii) the amounts contributed to the Borrower by the Brown Co-Tenants pursuant to the TIC Agreement.

 

(f)          The
closing of a purchase of Membership Interest(s) pursuant to this Section 12.09 shall be held on the Put Closing Date, subject to
the terms and conditions specified herein.

 

(g)          As
of the Put Closing Date, the BR Member shall assume all obligations of the Catalyst Member with respect to the Membership Interest
so transferred, including any liability of the Seller or any Affiliate thereof with respect to any Company liabilities. Upon such
transfer, the Catalyst Member’s rights and obligations under this Agreement shall terminate with respect to such transferred
Membership Interest, except as to indemnity rights of such Member under this Agreement attributable to acts or events occurring
prior to the effective date of such transfer. In addition, the BR Member shall cause the TIC Agreement to be terminated in its
entirety following the purchase of the co-tenancy interest of the Brown Co-Tenants.

 

(h)          The
provisions of Sections 12.07 (including without limitation Section 12.07(f)(iii)) and 12.08 above shall apply to this Section 12.09,
to the extent applicable.

 

12.10     Specific
Performance. It is expressly agreed that the remedy at law for breach of any of the obligations set forth in this Article 12
is inadequate in view of (i) the complexities and uncertainties in measuring the actual damages that would be sustained by reason
of the failure of a party to comply fully with each of said obligations, and (ii) the uniqueness of each Member’s business
and assets and the relationship of the Members. Accordingly, each of the aforesaid obligations and restrictions shall be, and is
hereby expressly made, enforceable by specific performance.

 

ARTICLE
13.

ISSUANCE OF ADDITIONAL MEMBERSHIP
INTERESTS

 

Except as otherwise
provided for herein, any Person approved by all of the Members may become a Member in the Company by the issuance by the Company
of Membership Interests for such consideration as all of the Members shall determine. No new Members shall be entitled to any retroactive
allocation of losses, income or expense deductions incurred by the Company. The Managers may, upon the approval of all the existing
Members, at the time a Member is admitted, close the Company books (as though the Company’s tax year had ended) or make pro
rata allocations of loss, income and expense deductions to a new Member for that portion of the Company’s tax year in which
a Member was admitted in accordance with the provisions of Section 706(d) of the Code and the Treasury Regulations promulgated
thereunder.

 

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ARTICLE
14.

DISSOLUTION AND TERMINATION

 

14.01     Dissolution.

 

(a)          The
Company shall be dissolved upon the occurrence of any of the following events:

 

i.            by
the unanimous written agreement of all Members; or

 

ii.         by
a decree of judicial dissolution under the Act.

 

To the maximum extent
permitted under the Act, the Company shall not dissolve upon an event of dissociation with respect to the last remaining Member,
but instead the legal successor to such Member shall automatically become a Member of the Company with all rights and obligations
appurtenant thereto.

 

(b)          If
a Member who is an individual dies or a court of competent jurisdiction adjudges him to be incompetent to manage his person or
his property, the Member’s executor, administrator, guardian, conservator, or other legal representative may exercise all
of the Member’s rights for the purpose of settling his estate or administering his property, but such person shall be a holder
of an Economic Interest and shall not have the rights of a Member. Further, such Person shall be subject to the provisions of Article
12.

 

14.02     Effect
of Dissolution. Upon dissolution, the Company shall cease to carry on its business, except as permitted by Section 18-803 of
the Act.

 

14.03     Winding
Up, Liquidation and Distribution of Assets.

 

(a)          Upon
dissolution, an accounting shall be made by the Company’s independent accountants of the accounts of the Company and of the
Company’s assets, liabilities and operations, from the date of the last previous accounting until the date of dissolution.
The Managers or if none, the Person or Persons selected by the Members (the “Liquidators”) shall immediately proceed
to wind up the affairs of the Company.

 

(b)          If
the Company is dissolved and its affairs are to be wound up, the Liquidators shall:

 

i.            Sell
or otherwise liquidate all of the Company’s assets as promptly as practicable;

 

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ii.         Allocate
any profit or loss resulting from such sales to the Members’ and Economic Interest Owners’ in accordance with Article
10 hereof as if the Company had distributed all distributable Capital Proceeds in accordance with Article 9 hereof;

 

iii.         Discharge
all liabilities of the Company, including liabilities to Members and Economic Interest Owners who are creditors, to the extent
otherwise permitted by law, other than liabilities to Members and Economic Interest Owners for distributions, and establish such
Reserves as may be reasonably necessary to provide for contingent liabilities of the Company; and

 

iv.         Distribute
the remaining proceeds to the Members in accordance with Section 9.01.

 

(c)          In
the final Fiscal Year of the Company, before making the final distributions provided for in Section 14.03(b)(iv), Profits and Losses
shall be credited or charged to Capital Accounts of the Members (which Capital Accounts shall be first adjusted to take into account
all distributions other than liquidating distributions made during the Fiscal Year) in the manner provided in Article 10. The allocations
and distributions provided for in this Agreement are intended to result in the Capital Account of each Member immediately prior
to the liquidation distributions of the Company’s assets pursuant to Section 14.03(b)(iv) being equal to the amount distributable
to such Member pursuant to Section 14.03(b)(iv). The Managers are authorized to make appropriate adjustments in the allocation
of Profits and Losses and, if necessary, items of gross income and gross deductions of the Company, for the year of liquidation
of the Company (or, if earlier, the year in which all or substantially all of the Company’s assets are sold, transferred
or disposed of) as necessary to cause the amount of each Member’s Capital Account immediately prior to the distribution of
the Company’s assets pursuant to Section 14.03(b)(iv) to equal the amount distributable to such Member pursuant to Section
14.03(b)(iv). Notwithstanding the foregoing, nothing in this Section 14.03(c) shall affect the amounts distributable to the Members
under Section 14.03(b)(iv).

 

(d)          Notwithstanding
anything to the contrary in this Operating Agreement, upon a liquidation within the meaning of Section 1.704-1(b)(2)(ii)(g) of
the Treasury Regulations, if any Member has a deficit Capital Account (after giving effect to all contributions, distributions,
allocations and other Capital Account adjustments for all taxable years, including the year during which such liquidation occurs),
such Member shall have no obligation to make any Capital Contribution, and the negative balance of such Member’s Capital
Account shall not be considered a debt owed by such Member to the Company or to any other Person for any purpose whatsoever.

 

(e)          Upon
completion of the winding up, liquidation and distribution of the assets, the Company shall be deemed terminated.

 

(f)          The
Liquidators shall comply with any applicable requirements of applicable law pertaining to the winding up of the affairs of the
Company and the final distribution of its assets.

 

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14.04     Certificate
of Cancellation. When all debts, liabilities and obligations have been paid and discharged or adequate provisions have been
made therefor and all of the remaining property and assets have been distributed to the Members, a Certificate of Cancellation
may be executed and filed with the Secretary of State of Delaware in accordance with Section 18-203 of the Act.

 

14.05     Return
of Contribution Nonrecourse to Other Members. Except as provided by law or as expressly provided in this Operating Agreement,
upon dissolution, each Member shall look solely to the assets of the Company for the return of its Capital Contribution. If the
Company property remaining after the payment or discharge of the debts and liabilities of the Company is insufficient to return
the cash contribution of one or more Members, such Member or Members shall have no recourse against any other Member.

 

ARTICLE
15. 

INDEMNIFICATION

 

15.01     Indemnification
by Company. The Managers, the Members or their respective members, managers, agents, employees and representatives (each, an
“Indemnitee”) shall be indemnified by the Company to the fullest extent permitted by law, against any losses, judgments,
liabilities, expenses and amounts paid in settlement of any claims sustained by it or any of them in connection with the Company
(each, a “Claim”), provided that (i) such course of conduct was, in good faith, intended to be in, and not opposed
to, the best interests of the Company and such liability or loss was not the result of willful misconduct, or a material breach
of this Agreement or gross negligence on the part of such Indemnitee, and (ii) any such indemnification will only be recoverable
from the assets of the Company and the Members shall not have any liability on account thereof except any obligations to return
distributions received from the Company that are required to be returned to the Company in respect of such indemnification obligations
under applicable law. No Member shall be authorized to make a call for capital to satisfy the Company’s indemnification obligations
under this Section 15.01.

 

15.02     Indemnification
by Members for Misconduct.

 

(a)          Catalyst
Member hereby indemnifies, defends and holds harmless the Company, BR Member, each Bluerock Transferee and each of their subsidiaries
and their officers, directors, members, managers, partners, shareholders, employees, agents and appointees from and against all
losses, costs, expenses, damages, claims and liabilities (including reasonable attorneys’ fees) incurred under any Loan Guaranty
to the extent arising out of any fraud, gross negligence or willful misconduct on the part of, or by, Catalyst Member.

 

(b)          BR
Member hereby indemnifies, defends and holds harmless the Company, Catalyst Member, each Catalyst Transferee and each of their
subsidiaries and their officers, directors, members, managers, partners, shareholders, employees, agents and appointees from and
against all losses, costs, expenses, damages, claims and liabilities (including reasonable attorneys’ fees) incurred under
any Loan Guaranty to the extent arising out of any fraud, gross negligence or willful misconduct on the part of, or by, BR Member.

 

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ARTICLE
16.

MISCELLANEOUS PROVISIONS

 

16.01     Application
of Delaware Law. This Operating Agreement, and the application and interpretation thereof, shall be governed exclusively by
its terms and by the laws of the State of Delaware, and specifically the Act.

 

16.02     No
Action for Partition. No Member or Economic Interest Owner has any right to maintain any action for partition with respect
to the property of the Company.

 

16.03     Construction.
Whenever the singular number is used in this Operating Agreement and when required by the context, the same shall include the plural
and vice versa, and the masculine gender shall include the feminine and neuter genders and vice versa.

 

16.04     Headings.
The headings in this Operating Agreement are inserted for convenience only and are in no way intended to describe, interpret, define,
or limit the scope, extent or intent of this Operating Agreement or any provision hereof.

 

16.05     Waivers.
The failure of any party to seek redress for violation of or to insist upon the strict performance of any covenant or condition
of this Operating Agreement shall not prevent a subsequent act, which would have originally constituted a violation, from having
the effect of an original violation.

 

16.06     Rights
and Remedies Cumulative. The rights and remedies provided by this Operating Agreement are cumulative and the use of any one
right or remedy by any party shall not preclude or waive the right not to use any or all other remedies. Such rights and remedies
are given in addition to any other rights the parties may have by law, statute, ordinance or otherwise.

 

16.07     Severability.
If any provision of this Operating Agreement or the application thereof to any person or circumstance shall be invalid, illegal
or unenforceable to any extent, the remainder of this Operating Agreement and the application thereof shall not be affected and
shall be enforceable to the fullest extent permitted by law.

 

16.08     Heirs,
Successors and Assigns. Each and all of the covenants, terms, provisions and agreements herein contained shall be binding upon
and inure to the benefit of the parties hereto and, to the extent permitted by this Operating Agreement, their respective heirs,
legal representatives, successors and assigns.

 

16.09     Creditors.
None of the provisions of this Operating Agreement shall be for the benefit of or enforceable by any creditors of the Company or
by any Person not a party hereto.

 

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

 

16.11     Federal
Income Tax Elections. All elections required or permitted to be made by the Company under the Code shall be made by the Members.

 

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16.12     Certification
of Non-Foreign Status. In order to comply with Section 1445 of the Code and the applicable Treasury Regulations thereunder,
in the event of the disposition by the Company of a United States real property interest as defined in the Code and Treasury Regulations,
each Member shall provide to the Company, an affidavit stating, under penalties of perjury, (i) the Member’s address, (ii) United
States taxpayer identification number, and (iii) that the Member is not a foreign person as that term is defined in the Code and
Treasury Regulations. Failure by any Member to provide such affidavit by the date of such disposition shall authorize the Managers
to withhold ten percent (10%) of each such Member’s distributive share of the amount realized by the Company on the disposition.

 

16.13     Notices.
Any and all notices, offers, demands or elections required or permitted to be made under this Agreement (“Notices”)
shall be in writing and shall be delivered either by personally delivering it by hand or Federal Express or similar commercial
courier service to the person to whom Notice is directed, or by electronic mail, or by depositing it with the United States Postal
Service, certified mail, return receipt requested, with adequate postage prepaid, addressed to the appropriate party (and marked
to a particular individual’s attention). Notice shall be deemed given and effective (i) when hand-delivered if by personal
delivery or Federal Express or similar commercial courier service, (ii) as of the date and time it is transmitted by electronic
mail if there is a written or electronic record of the date, time and email address to which the Notice was sent, or (iii) on the
third (3rd) business day (which term means a day when the United States Postal Service, or its legal successor (“Postal Service”)
is making regular deliveries of mail on all of its regularly appointed week-day rounds in Dover, Delaware) following the day (as
evidenced by proof of mailing) upon which such Notice is deposited, postage pre-paid, certified mail, return receipt requested,
with the Postal Service. Rejection or other refusal by the addressee to accept the Notice shall be deemed to be receipt of the
Notice. In addition, the inability to deliver the Notice because of a change of address of the party of which no Notice was given
to the other party as provided on Exhibit A hereof shall be deemed to be the receipt of the Notice sent. The addresses to
which Notice is to be sent shall be those set forth below on Exhibit A or such other address as shall be designated in writing
to Managers. Managers shall keep a list of all designated addresses and such list shall be available to any Member upon request
thereof. Such addresses may be changed by designating the change of address to the Managers in writing.

 

16.14     Amendments.
Any amendment to this Agreement shall be made in writing and signed by Members holding all of the Ownership Percentages; provided,
however, the Managers shall have the right upon any transfer of Membership Interests or admission of any new Member in accordance
herewith to unilaterally amend this Agreement without a writing signed by all Members to substitute Exhibit “A”
attached hereto with an updated Exhibit “A” reflecting all of the current Members and their respective Ownership
Percentages.

 

16.15     Invalidity.
The invalidity or unenforceability of any particular provision of this Agreement shall not affect the other provisions hereof,
and the Agreement shall be construed in all respects as if such invalid or unenforceable provision were omitted. If any particular
provision herein is construed to be in conflict with the provisions of the Act, the Act shall control and such invalid or unenforceable
provisions shall not affect or invalidate the other provisions hereof, and this Agreement shall be construed in all respects as
if such conflicting provision were omitted.

 

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16.16      Captions.
Titles and captions are inserted for convenience only and in no way define, limit, extend or describe the scope or intent of this
Agreement or any of its provisions and in no way are to be construed to affect the meaning or construction of this Agreement or
any of its provisions.

 

16.17      Banking.
All funds of the Company shall be deposited in its name in an account or accounts as shall be designated from time to time by the
Managers. All funds of the Company shall be used solely for the business of the Company. All withdrawals from the Company bank
accounts shall be made only upon check signed by the Managers or by such other persons as the Managers may designate from time
to time.

 

16.18      Governing
Law; Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware.
The parties hereto agree that any suit brought to enforce this Agreement shall be venued only in any court of competent jurisdiction
in the State of New York, Borough of Manhattan, and, by execution and delivery of this Agreement, each of the parties to this Agreement
hereby irrevocably accepts and waives all objection to, the exclusive jurisdiction of the aforesaid courts in connection with any
suit brought to enforce this Agreement, and irrevocably agrees to be bound by any judgment rendered thereby. Each of the parties
hereto hereby agrees that service of process in any such proceeding may be made by giving notice to such party in the manner and
at the place set forth in 16.13 herein.

 

16.19      Further
Assurances. The Members each agree to cooperate, and to execute and deliver in a timely fashion any and all additional documents
or instruments necessary to effectuate the purposes of the Company and this Agreement or necessary to comply with any laws, rules
or regulations.

 

16.20      Time.
TIME IS OF THE ESSENCE OF THIS AGREEMENT, AND TO ANY PAYMENTS, ALLOCATIONS AND DISTRIBUTIONS SPECIFIED UNDER THIS AGREEMENT.

 

16.21      Investment
Representations and Indemnity Agreement. In addition to the restrictions on transfer set forth above, each Member understands
that Members must bear the economic risk of this investment for an indefinite period of time because the Membership Interests are
not registered under the Securities Act of 1933, as amended (the “1933 Act”) or the securities laws of any state or
other jurisdiction. Each Member has been advised that there is no public market for the Membership Interests and that the Membership
Interests are not being registered under the 1933 Act upon the basis that the transactions involving its sale are exempt from such
registration requirements and that reliance by the Company on such exemption is predicated in part on the Member’s representations
set forth in this Agreement. Each Member acknowledges that no representations of any kind concerning the Property or the future
intent or ability to offer or sell the Membership Interest in a public offering or otherwise have been made to the Member by the
Company or any other Person or entity. Each Member understands that the Company makes no covenant, representation or warranty with
respect to the registration of securities under the Securities Exchange Act of 1933, as amended, or its dissemination to the public
of any current financial or other information concerning the Company. Accordingly, the Members acknowledge that there is no assurance
that there will ever by any public market for the Membership Interests, and that the Members may not be able to publicly offer
or sell any thereof. Furthermore, each Member (and his/her/its assignees and transferees) agrees to indemnify the other Members,
the Managers, the Company and any director, officer, employee, affiliate or legal counsel of such parties, from any and all losses,
damage, liability, claims and expenses incurred, suffered or sustained by any of them in any manner because of the falsity of any
representation contained in this Section including, without limitation, liability, for violation of the Securities Laws of the
United States or of any state which violation would not have occurred had such representation been true.

 

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16.22      No
Partnership Interest for Non-Tax Purposes. The Members have formed the Company under the Act and expressly disavow any intention
to form a partnership under Delaware’s Uniform Partnership Act, Delaware’s Uniform Limited Partnership Act, or the
Partnership Act or laws of any other state. The Members do not intend to be partners one to another or partners as to any third
party. To the extent any Member, by word or action, represents to another person that any other Member is a partner or that the
Company is a partnership, the Member making such wrongful representations shall be liable to any other Member who incurs personal
liability by reason of such wrongful representation.

 

16.23      Entire
Agreement. This Agreement, along with the Cost-Sharing Agreement, the Trust Agreement and the
TIC Agreement, contains the entire understanding among the parties hereto with respect to the subject matter hereof. This Agreement
supersedes all prior and contemporaneous agreements and understandings, inducements or conditions, express or implied, oral or
written, except for the Cost-Sharing Agreement, Trust Agreement and TIC Agreement, which shall survive in accordance with its terms.

 

(Signatures on following page)

 

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

 

	 	BR MEMBER:
	 	 
	 	BR Cheshire Member, LLC
	 	 
	 	By: Bluerock Special Opportunity + Income Fund III, LLC, its Manager

	 	 	 
	 	By: BR SOIF III Manager, LLC, its Manager
	 	 	 
	 	By:	/s/ Jordan Ruddy
	 	Name:	Jordan Ruddy
	 	Title:	Authorized Signatory

 

	 	CATALYST MEMBER:
	 	 
	 	CB DEVELOPER, LLC
	 	 
	 	By: 	Catalyst Development Partners II, LLC
	 	 	a Georgia limited liability company,
	 	 	as its Managing Member

 

	 	 	By:	/s/ Mark Mechlowitz
	 	 	Name:	Mark Mechlowitz
	 	 	Title:	Manager

 

    	 

    	 

    

  

List of Exhibits:

 

	Exhibit A	Information Regarding Members
	Exhibit B	Property
	Exhibit C	Total Project Budget
	Exhibit D	Development Agreement

 

    	 

    	 

    

  

Exhibit A

 

INFORMATION REGARDING MEMBERS

 

 

	Member Name
 and Address	 	Initial
 Capital Contribution	 	 	Ownership
 Percentage	 
	 	 	 	 	 	 	 
	BR Cheshire Member, LLC
 712 Fifth Avenue, 9th Floor
 New York, New York 10019	 	$	10,888,101	 	 	 	99.9	%
	 	 	 	 	 	 	 	 	 
	CB Developer, LLC
 880 Glenwood Avenue SE, Suite H 

Atlanta, GA 30316 	 	$	10,899	 	 	 	0.1	%
	 	 	 	 	 	 	 	 	 
	Total	 	$	10,899,000	 	 	 	100	%

 

BROWN CO-TENANTS’ INITIAL CASH CONTRIBUTION
TO BORROWER: $1,211,000

 

MANAGEMENT COMMITTEE REPRESENTATIVES:

 

Catalyst Member

 

1. Rob Meyer

2. Mark Mechlowitz

 

BR Member

 

1. Ryan MacDonald

2. Michael Konig

 

    	 

    	 

    

  

Exhibit B

 

LEGAL DESCRIPTION OF PROPERTY

 

All that tract of land lying or being Land Lot 6, 17th
District, Fulton County and the City of Atlanta, Georgia, and being more particularly described as follows:

 

BEGINNING at a 1/2 inch re-bar found at the intersection of
the southerly right of way of Interstate 85, a variable width right of way, and the westerly right of way of Cheshire Bridge Road,
also a variable width right of way;

 

THEN leaving the right of way of Interstate 85, proceed the
following courses along the said westerly right of way of Cheshire Bridge Road:

 

South 55 degrees 38 minutes 44 seconds East for 30.92 feet to
a 1/2 inch re-bar found;

THEN South 06 degrees 51 minutes 23 seconds East for 248.74
feet to a nail found;

THEN South 28 degrees 07 minutes 38 seconds East for 42.38 feet
to a 1/2 inch re-bar found;

THEN South 67 degrees 28 minutes 12 seconds West for 145.43
feet to a 1/2 inch re-bar found;

THEN South 00 degrees 42 minutes 52 seconds West for 123.24
feet to a 1/2 inch re-bar found;

THEN North 88 degrees 37 minutes 53 seconds West for 43.35 feet
to a 1/2 inch re-bar found;

THEN South 09 degrees 34 minutes 54 seconds East for 86.90 feet
to a 1/2 inch re-bar found;

THEN North 89 degrees 25 minutes 02 seconds West for 172.15
feet to a 1/2 inch open top pipe found;

THEN North 25 degrees 59 minutes 36 seconds West for 95.01 feet
to a point;

THEN North 26 degrees 42 minutes 06 seconds West for 470.00
feet to a point on the southerly variable right of way of Interstate 85;

THEN continue the following courses along said southerly right
of way of Interstate 85;

North 82 degrees 57 minutes 58 seconds East for 105.01 feet
to a 1/2 inch re-bar found;

THEN North 79 degrees 50 minutes 07 seconds East for 257.68
feet to a point;

THEN North 89 degrees 59 minutes 21 seconds East for 156.66
feet to a 1/2 inch re-bar found at the POINT OF BEGINNING.

 

Together with and subject to covenants, easements, and
restrictions of record.

 

Said property contains 4.877 acres more or less.

 

    	 

    	 

    

  

Exhibit C

 

TOTAL PROJECT BUDGET

 

	TOTAL USES:	 	 	 	 	per Unit	 	 	per SF	 
	Purchase Price	 	$	6,000,000	 	 	$	21,053	 	 	$	24.18	 
	Doc Stamps	 	 	183,775	 	 	 	645	 	 	 	0.74	 
	Project Feasibility Costs	 	 	42,500	 	 	 	149	 	 	 	0.17	 
	Design Costs	 	 	747,500	 	 	 	2,623	 	 	 	3.01	 
	Legal Costs	 	 	200,000	 	 	 	702	 	 	 	0.81	 
	Real Estate Taxes	 	 	457,622	 	 	 	1,606	 	 	 	1.84	 
	Insurance Costs	 	 	170,000	 	 	 	596	 	 	 	0.69	 
	Financing Costs	 	 	845,345	 	 	 	2,966		 	 	3.41	 
	Government Costs	 	 	662,422	 	 	 	2,324	 	 	 	2.67	 
	Misc. Direct Costs	 	 	79,000	 	 	 	277	 	 	 	0.32	 
	Construction Costs	 	 	34,633,720	 	 	 	121,522	 	 	 	139.58	 
	FF&E Costs	 	 	540,000	 	 	 	1,895	 	 	 	2.18	 
	Interest Reserve	 	 	493,570	 	 	 	1,732	 	 	 	1.99	 
	Operating Deficit Reserve	 	 	284,571	 	 	 	998	 	 	 	1.15	 
	Capitalized Development Fee	 	 	1,465,825	 	 	 	5,143	 	 	 	5.91	 
	Contingency - Hard Cost	 	 	1,236,386	 	 	 	4,338	 	 	 	4.98	 
	I-Banking Fee	 	 	467,764	 	 	 	 	 	 	 	 	 
	Marketing Costs	 	 	150,000	 	 	 	526	 	 	 	0.60	 
	Total Uses	 	$	48,660,000	 	 	$	170,737	 	 	$	196.11	 

 

    	 

    	 

    

  

Exhibit D

 

DEVELOPMENT AGREEMENT

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