Document:

SECURED PROMISSORY NOTE MODIFICATION
AGREEMENT

 

THIS
NOTE MODIFICATION AGREEMENT (this “Agreement”) is made and entered into on January 20, 2012, by and among BLUEROCK
SPECIAL OPPORTUNITY + INCOME FUND II, LLC, a Delaware limited liability company (together with its successors and assigns,
the “Lender”), and BEMT MEADOWMONT, LLC,
a Delaware limited liability company (the “Borrower”).

 

W I T N E
S S E T H :

 

WHEREAS, the Lender and the Borrower entered
into that certain Secured Promissory Note dated as of January 20, 2011 (the “Promissory Note’), which Promissory
Note evidenced the obligation of the Borrower to repay the loan to the Lender in the aggregate principal sum of up to $500,000
(the “Loan”) plus interest, fees and costs; and

 

WHEREAS, the Promissory Note was extended
on July 20, 2011 (“the First Note Modification Agreement”), and all amounts owing thereunder, including without
limitation all principal and interest, became automatically and immediately due and payable on January 20, 2012; and

 

WHEREAS, the Borrower has requested that
the Lender modify the Promissory Note to further extend the maturity date thereof to July 20, 2012; and

 

WHEREAS, the Lender is willing to grant
such request, subject to the terms and conditions set forth herein;

 

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

 

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

 

2. Amendment to Promissory Note.
The Promissory Note is hereby modified and amended by deleting the last sentence of the first paragraph of the Promissory Note
in its entirety, and replacing it with the following:

 

All outstanding principal and interest
shall be due and payable on July 20, 2012 (the “Due Date”).

 

3. Effectiveness.
The modification provided in paragraph 2 shall be effective as of January 20, 2012 upon the execution
and delivery of this Agreement by the parties hereto. 

 

4. Reaffirmation of Transaction Documents.
All other items of the Promissory Note shall continue to be in effect.

 

    	 

    	 	

    
 

 

 

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

 

	Borrower:
	 	 	 	 	 
	BEMT Meadowmont, LLC
	a Delaware limited liability company
	 	 	 	 	 
	By:	Bluerock Enhanced Multifamily Holdings,
L.P.,
	 	a Delaware limited partnership
	Its:	Sole Member
	 	 	 	 	 
	 	By:	Bluerock Enhanced Multifamily
Trust, Inc.,
	 	 	a Maryland corporation
	 	Its:	General Partner
	 	 	 	 	 
	 	 	 	 	 
	 	 	By: 	/s/ Jordan Ruddy	
	 	 	Name: 	Jordan Ruddy	 
	 	 	Title: 	COO	 
	 	 	 	 	 
	Lender:
	 	 	 	 	 
	BLUEROCK SPECIAL OPPORTUNITY +
INCOME FUND II, LLC
	a Delaware limited liability company
	 	 	 	 	 
	By:	Bluerock Real Estate, LLC,
	 	a Delaware limited partnership
	Its:	Manager
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	By: 	/s/ Jordan Ruddy	
	 	 	Name: 	Jordan Ruddy	 
	 	 	Title: 	PresidentSECURED PROMISSORY NOTE MODIFICATION
AGREEMENT

 

THIS
NOTE MODIFICATION AGREEMENT (this “Agreement”) is made and entered into on February 28, 2012, by and among BLUEROCK
SPECIAL OPPORTUNITY + INCOME FUND II, LLC, a Delaware limited liability company (together with its successors and assigns,
the “Lender”), and BEMT AUGUSTA, LLC, a
Delaware limited liability company (the “Borrower”). 

 

W I T N E
S S E T H :

 

WHEREAS, the Lender and the Borrower entered
into that certain Secured Promissory Note dated as of September 1, 2010 (the “Promissory Note’), which Promissory Note
evidenced the obligation of the Borrower to repay the loan to the Lender in the aggregate principal amount of $1,931,484.17 (the
“Loan”) plus interest, fees and costs; and

 

WHEREAS, the Promissory Note was extended
on February 28, 2011 (“the First Note Modification Agreement”), and all amounts owing thereunder, including
without limitation all principal and interest, became automatically and immediately due and payable on August 31, 2011; and

 

WHEREAS, the Promissory Note was extended
on August 31, 2011 (“the Second Note Modification Agreement”), and all amounts owing thereunder, including without
limitation all principal and interest, became automatically and immediately due and payable on February 28, 2012; and

 

WHEREAS, the Borrower has requested that
Lender modify the Promissory Note to further extend the maturity date thereof to August 31, 2012; and

 

WHEREAS, the Lender is willing to grant
such request, subject to the terms and conditions set forth herein;

 

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

 

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

 

2. Amendment to Promissory Note.
The Promissory Note is hereby modified and amended by deleting the last sentence of the first paragraph of the Promissory Note
in its entirety, and replacing it with the following:

 

All outstanding principal and interest
shall be due and payable on August 31, 2012 (the “Due Date”).

 

3. Effectiveness. The modification
provided in paragraph 2 hereof shall be effective as of February 28, 2012 upon the execution and delivery of this Agreement by
the parties hereto.

 

4. Reaffirmation of Promissory Note.
All other provisions of the Promissory Note shall continue to be in effect.

 

    	 

    	 	

    

 

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

  

	Borrower:
	 	 	 	 	 
	BEMT AUGUSTA, LLC
	a Delaware limited liability company
	 	 	 	 	 
	By:	Bluerock Enhanced Multifamily Holdings,
L.P.,
	 	a Delaware limited partnership
	Its:	Sole Member
	 	 	 	 	 
	 	By:	Bluerock Enhanced Multifamily
Trust, Inc.,
	 	 	a Maryland corporation
	 	Its:	General Partner
	 	 	 	 	 
	 	 	 	 	 
	 	 	By: 	/s/ Jordan Ruddy	
	 	 	Name: 	Jordan Ruddy	 
	 	 	Title: 	COO	 
	 	 	 	 	 
	Lender:
	 	 	 	 	 
	BLUEROCK SPECIAL OPPORTUNITY +
INCOME FUND II, LLC
	a Delaware limited liability company
	 	 	 	 	 
	By:	BR SOIF II Manager, LLC
	 	a Delaware limited liability company
	Its:	Manager
	 	 	 	 	 
	 	By:	Bluerock Real Estate, L.L.C,
	 	 	a Delaware limited liability company
	 	Its:	Sole Member
	 	 	 	 	 
	 	 	 	 	 
	 	 	By: 	/s/ Jordan Ruddy	
	 	 	Name: 	Jordan Ruddy	 
	 	 	Title: 	PresidentExhibit 10.1

 

 

AGREEMENT

 

 

THIS AGREEMENT,
made effective the 7th day of March, 2012 by and between Derma Sciences, Inc., a business corporation organized under the laws
of the Commonwealth of Pennsylvania (“Employer”), and Edward J. Quilty (“Employee”).

 

WHEREAS,
Employee is currently employed by Employer as its President and Chief Executive Officer, and

 

WHEREAS,
the parties desire to enter into this Employment Agreement.

 

NOW, THEREFORE,
the parties hereto, in consideration of the mutual promises and covenants herein contained, hereby agree as follows:

 

1.  Employment. Employer
hereby employs Employee, and Employee agrees to be employed by Employer, as Employer’s President and Chief Executive Officer
with such duties appropriate to his office as may be assigned, from time to time, by the Board of Directors of Employer and upon
the terms and conditions hereinbelow set forth.

 

2.  Time and Efforts. Employee
will devote substantially all of his business time and efforts to his duties hereunder.

 

3.  Compensation.
During the Term hereof Employer shall pay compensation to Employee as follows:

 

  (a)  Base compensation at the
rate of Four Hundred Thousand Dollars ($400,000.00) per year effective January 1, 2012;

 

  (b)  Bonus, stock options and/or
such other incentive compensation as may be determined by Employer’s board of directors upon recommendation of its compensation
committee.

 

    	 

    	 

    

 

Reviews by the compensation committee
of Employee’s base compensation and incentive compensation shall be undertaken not less often than annually. The principal
criteria utilized by the compensation committee in the conduct of its reviews shall be the extent to which Employer attains its
performance objectives and the extent of Employee’s contributions thereto.

 

5.  Term. This Agreement
shall be effective as of the date hereof and shall expire on March 31, 2013 unless sooner terminated pursuant to Sections 6 or
7 hereinbelow or unless renewed or extended by mutual agreement of the parties hereto.

 

6.  Severance. In the
event that Employer, without cause, either terminates the Employment of Employee or fails to renew this Agreement upon expiration
hereof, Employer shall pay to Employee severance compensation in the amount of $800,000.00. The severance shall be paid in twenty
four equal monthly installments of $33,333.00 commencing on the first day of the month following the date of termination or expiration,
as applicable. In addition, during the twenty four month period following the date of termination or expiration, as applicable,
Employer shall provide Employee with the same health care benefits provided by Employer to its active employees at the Employer’s
cost.

 

7.  Change in Control.
Within six months of the occurrence of a “change in control” of Employer (defined below), Employee may, but shall have
no obligation to, tender his resignation from Employer and receive severance compensation as provided in paragraph 6 above to the
same extent as if Employer had terminated Employee without cause as of the date of Employee’s resignation. For purposes of
this paragraph, a “change in control” shall be a “change in control event” as defined in accordance with
Section 409A of the Internal Revenue Code and the regulations thereunder (“Section 409A”).

 

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8.  Taxation. Any payments
made pursuant to this Agreement shall be subject to any tax or similar withholding requirements under applicable federal, state
or local employment or income tax laws or similar statutes or other provisions of law then in effect. This Agreement is intended
to comply with the requirements of Section 409A. To the extent that any provision in this Agreement is ambiguous as to its compliance
with Section 409A, the provision shall be interpreted in a manner so that no payment due to Employee hereunder shall be deemed
subject to an “additional tax” within the meaning of Section 409A(a)(1)(B) of the Code. For purposes of Section 409A,
each payment made under this Agreement shall be treated as a separate payment. In addition, the right to a series of installment
payments under this Agreement is to be treated as a right to a series of separate payments. Notwithstanding anything contained
herein to the contrary, Employer shall not be considered to have terminated employment with Employer for purposes of this Agreement
unless Employee has incurred a “termination of employment” from the Company within the meaning of Treasury Regulation
§l.409A-l(h)(l)(ii) promulgated under Section 409A. Notwithstanding the foregoing, if applicable and necessary to comply with
the restriction in Section 409A(a)(2)(B) of the Code concerning payments to “specified employees,” any payment made
to Employee pursuant to this Agreement on account of the Employee’s separation from service that would otherwise be due hereunder
within six months after such separation from service shall nonetheless be delayed until the first business day of the seventh month
following Employee’s separation from service (or, if earlier, the date of his death). The first payment that can be made
to Employee following such period shall include the cumulative amount of any payments or benefits that could not be paid or provided
during such period due to the application of Code Section 409A(a)(2)(B)(i). In no event may Employee, directly or indirectly, designate
the calendar year of any payment. All reimbursements provided under this Agreement shall be made or provided in accordance with
the requirements of Section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred
during Employee’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses
eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar
year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the
year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another
benefit. Employee further acknowledges that, while this Agreement is intended to comply with Section 409A, any tax liability incurred
by Employee under Section 409A is solely the responsibility of Employee.

 

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9.  Option
Exercise Extension. In the event that Employer, without cause, either terminates Employee’s employment or fails to renew
this Agreement upon expiration hereof, or in the event Employee tenders his resignation upon a “change in control,”
then the period to exercise any option to purchase the securities of Employer of which Employee may be possessed shall be extended
to the earlier to occur of (i) the expiration thereof as set forth in the option instrument or (ii) the 10th anniversary
of the original date of grant.

 

10.  Clawback of Bonus and/or
Incentive Compensation. In the event that Employer accords to Employee bonus and/or incentive compensation hereunder and in
the further event that the financial statements upon which such bonus and/or incentive compensation was predicated contained material
errors and/or omissions that served as the basis for, or influenced, the granting of such bonus or incentive compensation, then
Employee shall repay to Employer any and all amounts of bonus and/or incentive compensation reasonably attributable to the aforesaid
errors or omissions. Repayment of the aforesaid bonus and/or incentive compensation shall be required regardless of whether or
not Employee had knowledge of, or participated in, the conduct that resulted in the aforereferenced errors in the Corporation’s
financial statements.

 

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11.  Prior Agreements.  This
Agreement shall supersede any and all prior agreements between Employer and Employee relating to his employment.

 

[Signatures on Following Page]

 

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IN WITNESS WHEREOF, this Agreement has been executed by Employer and Employee as of the date first hereinabove written.

 

 

	 	EMPLOYER:	 
	 	 	 	 
	 	DERMA SCIENCES, INC.	 
	 	 	 	 
	 	 	 	 
	 	By:	/s/ Stephen T. Wills	 
	 	 	Stephen T. Wills	 
	 	 	Lead Director	 

 

 

	 	EMPLOYEE:	 
	 	 	 	 
	 	 	 
	 	By:	/s/ Edward J. Quilty	 
	 	 	Edward J. Quilty	 

 

 

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