Document:

LIMITED LIABILITY COMPANY

 

OF

 

BR BERRY HILL MANAGING MEMBER, LLC

 

A DELAWARE LIMITED LIABILITY COMPANY

 

DATED AS OF OCTOBER 18, 2012 

	 

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	 	 	Page
	Section 1.	Definitions	1
	Section 2.	Organization of the Company	8
	 	 	 
	2.1	Name	8
	 	 	 
	2.2	Place of Registered Office; Registered Agent	8
	 	 	 
	2.3	Principal Office	8
	 	 	 
	2.4	Filings	9
	 	 	 
	2.5	Term	9
	 	 	 
	2.6	Expenses of the Company	9
	 	 	 
	Section 3.	Purpose	9
	Section 4	Conditions	9
	 	 	 
	4.1	SOIF III Conditions	9
	 	 	 
	4.2	BEMT Conditions	9
	 	 	 
	Section 5.	Capital Contributions, Loans, Percentage Interests and Capital Accounts	10
	 	 	 
	5.1	Initial Capital Contributions	10
	 	 	 
	5.2	Additional Capital Contributions	10
	 	 	 
	5.3	Percentage Ownership Interest	12
	 	 	 
	5.4	Return of Capital Contribution	12
	 	 	 
	5.5	No Interest on Capital	12
	 	 	 
	5.6	Capital Accounts	13

 

    	 

    	 

    

 

	5.7	New Members	13
	 	 	 
	Section 6.	Distributions	13
	 	 	 
	6.1	Distribution of Distributable Funds	13
	 	 	 
	Section 7.	Allocations	14
	 	 	 
	7.1	Allocation of Net Income and Net Losses Other than in Liquidation	14
	 	 	 
	7.2	Allocation of Net Income and Net Losses in Liquidation	14
	 	 	 
	7.3	U.S. Tax Allocations	14
	 	 	 
	Section 8.	Books, Records, Tax Matters and Bank Accounts	15
	 	 	 
	8.1	Books and Records	15
	 	 	 
	8.2	Reports and Financial Statements	15
	 	 	 
	8.3	Tax Matters Member	16
	 	 	 
	8.4	Bank Accounts

	16
	 	 	 
	8.5	Tax Returns	16
	 	 	 
	8.6	Expenses	17
	 	 	 
	Section 9.	Management	17
	 	 	 
	9.1	Management	17
	 	 	 
	9.2	Affiliate Transactions	17
	 	 	 
	9.3	Other Activities	18
	 	 	 
	9.4	Operation in Accordance with REOC/REIT Requirements	18
	 	 	 
	9.10	FCPA	20

  

    	2

    	 

    

 

	Section 10.	Confidentiality	21
	Section 11.	Representations and Warranties	22
	 	 	 
	11.1	In General	22
	 	 	 
	11.2	Representations and Warranties	22
	 	 	 
	Section 12.	Sale, Assignment, Transfer or other Disposition	25
	 	 	 
	12.1	Prohibited Transfers	25
	 	 	 
	12.2	Affiliate Transfers	25
	 	 	 
	12.3	Admission of Transferee; Partial Transfers	26
	 	 	 
	12.4	Withdrawals	27
	 	 	 
	Section 13.	Dissolution	27
	 	 	 
	13.1	Limitations	27
	 	 	 
	13.2	Exclusive Events Requiring Dissolution	28
	 	 	 
	13.3	Liquidation	28
	 	 	 
	13.4	Continuation of the Company	29
	 	 	 
	Section 14.	Indemnification	29
	 	 	 
	14.1	Exculpation of Members	29
	 	 	 
	14.2	Indemnification by Company	29
	 	 	 
	14.3	General Indemnification by the Members	30
	 	 	 
	Section 15.	Sale Rights	30
	 	 	 
	15.1	Push / Pull Rights	30
	 	 	 
	15.2	Forced Sale Rights	32

  

    	3

    	 

    

 

	Section 16.	Mediation and Arbitration of Disputes	33
	 	 	 
	16.1	Events Giving Rise to Mediation or Arbitration	33
	 	 	 
	16.2	Selection of Arbitrators	33
	 	 	 
	16.3	Arbitration Hearing	34
	 	 	 
	16.4	Decision of the Arbitrators/Binding Effect	34
	 	 	 
	Section 17.	Miscellaneous	34
	 	 	 
	17.1	Notices	34
	 	 	 
	17.2	Governing Law	35
	 	 	 
	17.3	Successors	35
	 	 	 
	17.4	Pronouns	36
	 	 	 
	17.5	Table of Contents and Captions Not Part of Agreement	36
	 	 	 
	17.6	Severability	36
	 	 	 
	17.7	Counterparts	36
	 	 	 
	17.8	Entire Agreement and Amendment	36
	 	 	 
	17.9	Further Assurances	36
	 	 	 
	17.10	No Third Party Rights	36
	 	 	 
	17.11	Incorporation by Reference	36
	 	 	 
	17.12	Limitation on Liability	37

  

    	4

    	 

    

 

	17.13	Remedies Cumulative	37
	 	 	 
	17.14	No Waiver	37
	 	 	 
	17.15	Limitation On Use of Names	37
	 	 	 
	17.16	Publicly Traded Partnership Provision	37
	 	 	 
	17.17	Uniform Commercial Code	38
	 	 	 
	17.18	Public Announcements	38
	 	 	 
	17.19	No Construction Against Drafter	38

 

    	5

    	 

    

 

BR BERRY HILL MANAGING MEMBER, LLC

LIMITED LIABILITY COMPANY AGREEMENT

 

This Limited Liability
Company Agreement (this “Agreement”) is adopted, executed, and agreed to effective on October 18, 2012, by and
among Bluerock Special Opportunity + Income Fund III, LLC, a Delaware limited liability company (“SOIF III”),
and BEMT Berry Hill, LLC, a Delaware limited liability company (“BEMT”), as Members (together, the “Members”),
and BEMT, as Manager (the “Manager”).

 

WITNESSETH:

 

WHEREAS, BR Berry Hill
Managing Member, LLC, a Delaware limited liability company (the “Company”), was formed on October 3, 2012, pursuant
to the Act;

 

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

 

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

 

Section
1.            Definitions.  As
used in this Agreement:

 

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

 

“Adjusted Capital
Account Deficit” shall mean, with respect to any Member, the deficit balance, if any, in such Member’s Capital
Account as of the end of the applicable Fiscal Year after (i) crediting such Capital Account with any amounts which such Member
is deemed to be obligated to restore pursuant to Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), and (ii) debiting such Capital
Account by the amount of the items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6). The foregoing definition
of Adjusted Capital Account Deficit is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.

 

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

 

“Affiliate”
shall mean as to any Person any other Person that directly or indirectly controls, is controlled by, or is under common control
with such first Person. For the purposes of this Agreement, a Person shall be deemed to control another Person if such Person possesses,
directly or indirectly, the power to direct or cause the direction of the management, policies and/or decision making of such other
Person, whether through the ownership of voting securities, by contract or otherwise. In addition, “Affiliate” shall
include as to any Person any other Person related to such Person within the meaning of Code Sections 267(b) or 707(b)(1). Notwithstanding
the foregoing, SOIF III and BEMT shall not be considered to be “Affiliates” of each other.

 

    	 

    	 

    

 

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

 

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

 

“Applicable
Adjustment Percentage” shall have the meaning set forth in Section 5.2(b)(3).

 

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

 

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

 

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

 

“BEMT”
shall have the meaning set forth in the recitals.

 

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

 

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

 

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

 

    	2

    	 

    

 

“Cash Flow”
shall mean, for any period for which Cash Flow is being calculated, gross cash receipts of the Company (but excluding Capital Contributions,
less the following payments and expenditures (i) all payments of operating expenses of the Company, (ii) all payments of principal
of, interest on and any other amounts due with respect to indebtedness, leases or other commitments or obligations of the Company
(and other loans by Members to the Company), (iii) all sums expended by the Company for capital expenditures, (iv) all prepaid
expenses of the Company, and (v) all sums expended by the Company which are otherwise capitalized.

 

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

 

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

 

“Collateral
Agreement” shall mean any agreement, instrument, document or covenant concurrently or hereafter made or entered into
under, pursuant to, or in connection with this Agreement and any certifications made in connection therewith or amendment or amendments
made at any time or times heretofore or hereafter to any of the same.

 

“Company”
shall mean BR Berry Hill Managing Member, LLC a Delaware limited liability company organized under the Act.

 

“Company Interest”
shall mean all of the Company’s interest in Stonehenge Bluerock Berry Hill JV, including its limited liability company interest
and its managerial interest therein.

 

“Company Minimum
Gain” shall have the meaning given to the term “partnership minimum gain” in Regulations Sections 1.704-2(b)(2)
and 1.704-2(d).

 

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

 

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

 

“Default Loan”
shall have the meaning provided in Section 5.2(b)(1).

 

“Default Loan
Rate” shall have the meaning provided in Section 5.2(b)(1).

 

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

 

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

 

“Developer”
shall mean Stonehenge Real Estate Group, LLC, a Georgia limited liability company.

 

“Development
Agreement” shall mean that certain development agreement attached hereto as Exhibit C to be entered into between
23Hundred, LLC, a Delaware limited liability company (a Subsidiary of Stonehenge Bluerock Berry Hill JV), as owner, and Developer,
as developer, pursuant to which Developer will provide certain development services for the Properties.

 

    	3

    	 

    

 

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

 

“Distributable
Funds” with respect to any month or other period, as applicable, shall mean the sum of (x) an amount equal to the Cash
Flow of the Company for such month or other period, as applicable, as reduced by reserves for anticipated capital expenditures,
future working capital needs and operating expenses, contingent obligations and other purposes, the amounts of which shall be reasonably
determined from time to time by the Manager.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Indemnified
Party” shall have the meaning provided in Section 14.3(a).

 

“Indemnifying
Party” shall have the meaning provided in Section 14.3(a).

 

“Inducement Agreements”
shall have the meaning provided in Section 14.3(a).

 

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

 

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

 

    	4

    	 

    

 

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

 

“Major Decision”
means any decision for the Company to take, or refrain from taking, any action or incurring any obligation with respect to the
following matters (or the effectuation of any such action or obligation), including in the Company’s capacity as a member
of the Stonehenge Bluerock Berry Hill JV with respect to making or refraining to make a decision on the following matters to the
extent the vote or approval of the Company is required:

 

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

 

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

 

		(iii)	except as provided in Section 13, any liquidation, dissolution or termination of the Company;

 

		(iv)	the incurrence by the Company, in an amount in excess of US $25,000, of any indebtedness for borrowed
money or any capitalized lease obligation or the entry into of any agreement, commitment, assumption or guarantee with respect
to any of the foregoing;

 

		(v)	expenditures or distributions of cash or property by the Company, in an amount in excess of US
$25,000, which are not otherwise provided for in this Agreement or the establishment of any reserves;

 

		(vi)	entering into any material agreement, including without limitation any management agreement or
development agreement, contract, license or lease that could result in an obligation or liability of the Company in excess of US
$25,000;

 

		(vii)	doing any act which would make it impossible or unreasonably burdensome to carry on the business
of the Company;

 

		(viii)	any material change in the strategic direction of the Company or any material expansion of the
business of the Company, whether into new or existing lines of business or any change in the structure of the Company;

 

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

 

    	5

    	 

    

 

		(xi)	selling, conveying, refinancing or effecting any material asset of the Company, including the Company
Interest, or any portion thereof or the entering into of any agreement, commitment or assumption with respect to any of the foregoing;

 

		(xii)	confessing a judgment against the Company (or any Subsidiary), submitting a Company claim to arbitration
or engaging, terminating and/or replacing counsel to defend or prosecute on behalf of the Company any action or proceeding;

 

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

 

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

 

		(xv)	the amount of, whether and when to make, contributions to the Company (other than the contributions
under Section 5.1(a) made contemporaneously with the execution of this Agreement) and Distributions by the Company; or

 

		(xvi)	amendment of the Company’s Certificate of Formation or this Agreement;.

 

“Management Committee”
shall mean the management committee of Stonehenge Bluerock Berry Hill JV as provided in Section 5.03.2 of the Stonehenge Bluerock
Berry Hill JV Operating Agreement.

 

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

 

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

 

“Member Minimum
Gain” shall mean an amount, determined in accordance with Regulations Section 1.704-2(i)(3) with respect to each
Member Nonrecourse Debt, equal to the Company Minimum Gain that would result if such Member Nonrecourse Debt were treated as a
Nonrecourse Liability.

 

“Member Nonrecourse
Debt” shall have the meaning given the term “partner nonrecourse debt” in Regulations Section 1.704-2(b)(4).

 

“Member Nonrecourse
Deductions” shall have the meaning given the term “partner nonrecourse deductions” in Regulations Section 1.704-2(i).

 

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

 

    	6

    	 

    

 

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

 

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

 

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

 

“Nonrecourse
Deduction” shall have the meaning given such term in Regulations Section 1.704-2(b)(1).

 

“Nonrecourse
Liability” shall have the meaning given such term in Regulations Section 1.704-2(b)(3).

 

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

 

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

 

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

 

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

 

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

 

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

 

“Property”
shall have the meaning provided in the Stonehenge Bluerock Berry Hill Operating Agreement.

 

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

 

“Pursuer”
shall have the meaning provided in Section 10(c).

 

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

 

“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.

 

“Representatives”
shall mean the representatives of the Management Committee.

 

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

 

    	7

    	 

    

 

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

 

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

 

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

 

“SOIF III Transferee”
shall have the meaning provided in Section 12.2(b)(i).

 

“Stonehenge
Bluerock Berry Hill JV” shall mean BR Stonehenge 23Hundred JV, LLC, a Delaware limited liability company.

 

“Stonehenge
Bluerock Berry Hill JV Operating Agreement” shall mean the Limited Liability Company Agreement of BR Stonehenge 23Hundred
JV, as amended from time to time.

 

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

 

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

 

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

 

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

 

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

 

Section
2.             Organization of the Company.

 

2.1           Name.
The name of the Company shall be “BR Berry Hill Managing Member, LLC”. The business and affairs of the Company
shall be conducted under such name or such other name as the Manager deems necessary or appropriate to comply with the requirements
of law in any jurisdiction in which the Company may elect to do business.

 

2.2           Place
of Registered Office; Registered Agent. The address of the registered office of the Company in the State of Delaware is 2711
Centerville Road, Wilmington, Delaware 19808. The name and address of the registered agent for service of process on the Company
in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Wilmington, Delaware 19808. The Manager may at
any time on five (5) days prior notice to all Members change the location of the Company’s registered office or change the
registered agent.

 

2.3           Principal
Office. The principal address of the Company shall be c/o Bluerock Real Estate, L.L.C., Heron Tower, 70 East 55th
Street, 9th Floor, New York, New York 10022, or, in each case, at such other place or places as may be determined by
the Manager from time to time.

 

    	8

    	 

    

 

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

 

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

 

2.6           Expenses
of the Company. Other than the reimbursements of costs and expenses as provided herein, no fees, costs or expenses shall be
payable by the Company to any Member (or its Affiliates).

 

Section
3.            Purpose.

 

The Company is organized
for the purpose of engaging in any lawful business, purpose or activity that may be undertaken by a limited liability company organized
under and governed by the Act. The Company shall possess and may exercise all of the powers and privileges granted by the Act,
by any other law or by this Agreement, together with any powers incidental thereto, including such powers and privileges as are
necessary or convenient to the conduct, promotion or attainment of the business, purposes or activities of the Company.

 

Section
4.            Conditions.

 

4.1           SOIF
III Conditions. The obligation of SOIF III to consummate the transactions contemplated herein and to make the initial Capital
Contributions under Section 5.1 is subject to fulfillment of all of the following conditions on or prior to the date hereof:

 

(a)          BEMT
shall deposit in the Company’s bank account or the designated escrow account of a mutually agreeable title company (“Title
Company”) the amount of its initial Capital Contribution set forth on Exhibit A hereto; and

 

(b)          All
of the representations and warranties of BEMT contained in this Agreement shall be true and correct as of the date hereof.

 

4.2           BEMT
Conditions. The obligation of BEMT to consummate the transactions contemplated herein and to make the initial Capital Contributions
under Section 5.1 is subject to fulfillment of all of the following conditions on or prior to the date hereof:

 

    	9

    	 

    

 

(a)          SOIF
III shall deposit into the Company’s bank account or Title Company’s designated escrow account the amount of its initial
Capital Contribution set forth on Exhibit A hereto; and

 

(b)          All
of the representations and warranties of SOIF III contained in this Agreement shall be true and correct as of the date hereof.

 

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

 

5.1          Initial
Capital Contributions. Subject to the conditions set forth in Section 4, upon execution of this Agreement, SOIF III
and BEMT shall each make an initial Capital Contribution to the Company of cash in the amounts set forth in Exhibit A attached
hereto. The initial Capital Contribution of the Members to the Company may include amounts for working capital and reserves. 

 

5.2          Additional
Capital Contributions.

 

(a)          Additional
Capital Contributions may be called for from the Members by the Manager from time to time as and to the extent capital is necessary
to effect an investment. Except as otherwise agreed by the Members, such additional Capital Contributions shall be in an amount
for each Member equal to the product of the amount of the aggregate Capital Contribution called for multiplied by twenty-nine percent
(29%) in the case of SOIF III and seventy-one percent (71%) in the case of BEMT. Such additional Capital Contributions shall be
payable by the Members to the Company upon the earlier of (i) twenty (20) days after written request from the Company, or (ii)
the date when the Capital Contribution is required, as set forth in a written request from the Company.

 

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

 

    	10

    	 

    

 

(1)         to
advance to the Company on behalf of, and as a loan to the Defaulting Member, an amount equal to the Default Amount to be evidenced
by a promissory note in form reasonably satisfactory to the non-failing Member (each such loan, a “Default Loan”).
The Capital Account of the Defaulting Member shall be credited with the amount of such Default Amount attributable to a Capital
Contribution and the aggregate of such amounts shall constitute a debt owed by the Defaulting Member to the non-failing Member.
Any Default Loan shall bear interest at the rate of twenty (20%) percent per annum, but in no event in excess of the highest rate
permitted by applicable laws (the “Default Loan Rate”), and shall be payable by the Defaulting Member on demand
from the non-failing Member and from any Distributions due to the Defaulting Member hereunder. Interest on a Default Loan to the
extent unpaid, shall accrue and compound on a quarterly basis. A Default Loan shall be prepayable, in whole or in part, at any
time or from time to time without penalty. Any such Default Loans shall be with full recourse to the Defaulting Member and shall
be secured by the Defaulting Member’s interest in the Company including, without limitation, such Defaulting Member’s
right to Distributions. In furtherance thereof, upon the making of such Default Loan, the Defaulting Member hereby pledges, assigns
and grants a security interest in its Interest to the non-failing Member and agrees to promptly execute such documents and statements
reasonably requested by the non-failing Member to further evidence and secure such security interest. Any advance by the non-failing
Member on behalf of a Defaulting Member pursuant to this Section 5.2(b)(1) shall be deemed to be a Capital Contribution
made by the Defaulting Member except as otherwise expressly provided herein. All Distributions to the Defaulting Member hereunder
shall be applied first to payment of any interest due under any Default Loan and then to principal until all amounts due thereunder
are paid in full. While any Default Loan is outstanding, the Company shall be obligated to pay directly to the non-failing Member,
for application to and until all Default Loans have been paid in full, the amount of (x) any Distributions payable to the Defaulting
Member, and (y) any proceeds of the sale of the Defaulting Member’s Interest in the Company;

 

(2)         subject
to any applicable thin capitalization limitations on indebtedness of the Company, to treat its portion of such Capital Contribution
as a loan to the Company (rather than a Capital Contribution) and to advance to the Company as a loan to the Company an amount
equal to the Default Amount, which loan shall be evidenced by a promissory note in form reasonably satisfactory to the non-failing
Member and which loan shall bear interest at the Default Loan Rate and be payable on a first priority basis by the Company from
available Cash Flow and prior to any Distributions made to the Defaulting Member. If each Member has loans outstanding to the Company
under this provision, such loans shall be payable to each Member in proportion to the outstanding balances of such loans to each
Member at the time of payment. Any advance to the Company pursuant to this Section 5.2(b)(2) shall not be treated as a Capital
Contribution made by the Defaulting Member;

 

(3)         to
make an additional Capital Contribution to the Company equal to the Default Amount whereupon the Percentage Interests of the Members
shall be recalculated to (i) increase the non-defaulting Member’s Percentage Interest by the percentage (“Applicable
Adjustment Percentage”) determined by dividing one hundred fifty percent (150%) of the Default Amount by the sum of the
Members’ Total Investment (taking into account the actual amount of such additional Capital Contribution) and by increasing
its Capital Account by one and one-half of the amount of the Default Amount, and (ii) to reduce the Defaulting Member’s Percentage
Interest by the Applicable Adjustment Percentage and by decreasing its Capital Account by one-half of the amount of the Default
Amount; or

 

(4)         in
lieu of the remedies set forth in subparagraphs (1), (2) or (3), revoke its portion of such additional Capital Contribution, whereupon
the portion of the Capital Contribution made by the non-failing Member shall be returned within ten (10) days with interest computed
at the Default Loan Rate by the Company.

 

    	11

    	 

    

 

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

 

5.3           Percentage
Ownership Interest. The Members shall have the initial percentage ownership interests (as the same are adjusted as provided
in this Agreement, a “Percentage Interest”) in the Company set forth on Exhibit A immediately following
the Capital Contributions provided for in Section 5.1. The Percentage Interests of the Members in the Company shall be adjusted
monthly so that the respective Percentage Interests of the Members at any time shall be in proportion to their respective cumulative
Total Investment made (or deemed to be made) pursuant to Sections 5.1 and 5.2, as the same may be further adjusted
pursuant to Section 5.2(b)(3). Percentage Interests shall not be adjusted by distributions made (or deemed made) to a Member.

 

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

 

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

 

    	12

    	 

    

 

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

 

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

 

Section
6.            Distributions.

 

6.1         Distribution
of Distributable Funds

 

(a)          The
Manager shall calculate and determine the amount of Distributable Funds for each applicable period. Except as provided in Sections
5.2(b), 6.1(b) or 13.3 or otherwise provided hereunder, Distributable Funds, if any, shall be distributed to the Members,
in proportion to their Percentage Interests, on the 15th day of each month or from time to time as determined by the
Manager.

 

    	13

    	 

    

 

(b)          Any
distributions otherwise payable to a Member under this Agreement shall be applied first to satisfy amounts due and payable on account
of the indemnity and/or contribution obligations of such Member under this Agreement and/or any other agreement delivered by such
Member to the Company or any other Member but shall be deemed distributed to such Member for purposes of this Agreement.

 

6.2           Distributions
in Kind. In the discretion of the Manager, Distributable Funds may be distributed to the Members in cash or in kind and Members
may be compelled to accept a distribution of any asset in kind even if the percentage of that asset distributed to it exceeds a
percentage of that asset that is equal to the percentage in which such Member shares in distributions from the Company. In the
case of all assets to be distributed in kind, the amount of the distribution shall equal the fair market value of the asset distributed
as determined by the Manager. In the case of a distribution of publicly traded property, the fair market value of such property
shall be deemed to be the average closing price for such property for the thirty (30) day period immediately prior to the distribution,
or if such property has not yet been publicly traded for thirty (30) days, the average closing price of such property for the period
prior to the distribution in which the property has been publicly traded.

 

Section
7.           Allocations.

 

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

 

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

 

7.3           U.S.
Tax Allocations.

 

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

 

    	14

    	 

    

 

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

 

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

 

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

 

8.1          Books
and Records. The books and records of account of the Company shall be maintained in accordance with industry standards and
shall be based on the Property Manager Reports. The books and records shall be maintained at the Company’s principal office
or at a location designated by the Manager, and all such books and records (and the dealings and other affairs of the Company and
its Subsidiaries, including Stonehenge Bluerock Berry Hill JV) shall be available to any Member at such location for review, investigation,
audit and copying, at such Member’s sole cost and expense, during normal business hours on at least twenty-four (24) hours
prior notice.

 

8.2          Reports
and Financial Statements.

 

(a)          Within
thirty (30) days of the end of each Fiscal Year, the Manager shall cause each Member to be furnished with two sets of the following
additional annual reports computed as of the last day of the Fiscal Year:

 

(i)          An
unaudited balance sheet of the Company;

 

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

 

(iii)        A
statement of the Members’ Capital Accounts and changes therein for such Fiscal Year.

 

(b)          Within
fifteen (15) days of the end of each quarter of each Fiscal Year, the Manager shall cause to be furnished to BEMT
or any REIT Member such information as requested by BEMT or any REIT Member as is necessary for BEMT or any
REIT Member to determine its qualification as a REIT and its compliance with REIT Requirements as shall be requested by BEMT
or any REIT Member.

 

    	15

    	 

    

 

(c)          The
Members acknowledge that the Developer is obligated to perform Project-related accounting and furnish Project-related accounting
statements under the terms of the Development Agreement (and any future property manager for the Property shall be required to
do the same) (the “Property Manager Reports”). The Manager shall be entitled to rely on the Property Manager Reports
with respect to its obligations under this Section 8, and the Members acknowledge that the reports to be furnished shall
be based on the Property Manager Reports, without any duty on the part of the Manager to further investigate the completeness,
accuracy or adequacy of the Property Manager Reports.

 

(d)          At
the expense and cost of BEMT, the Manager will use its commercially best efforts to obtain such financial statements (audited or
unaudited), information and attestations as may be required by BEMT or any of its Affiliates in connection with public reporting,
attestation, certification and other requirements under the Securities Exchange Act of 1934, as amended, and the Sarbanes-Oxley
Act of 2002, as amended, applicable to such entity, and work in good faith with the designated accountants or auditors of BEMT
or any of its Affiliates in connection therewith, including for purposes of testing internal controls and procedures of BEMT or
any of its Affiliates.

 

8.3           Tax
Matters Member. BEMT is hereby designated as the “tax matters partner” of the Company and the Subsidiaries,
as defined in Section 6231(a)(7) of the Code (the “Tax Matters Member”) and shall prepare or cause to be prepared
all income and other tax returns of the Company and the Subsidiaries pursuant to the terms and conditions of Section 8.5.
Except as otherwise provided in this Agreement, all elections required or permitted to be made by the Company and the Subsidiaries
under the Code or state tax law shall be timely determined and made by SOIF III. The Members intend that the Company
be treated as a partnership for U.S. federal, state and local tax purposes, and the Members will not elect or authorize any person
to elect to change the status of the Company from that of a partnership for U.S. federal, state and local income tax purposes.
SOIF III agrees to consult with BEMT with respect to any written notice of any material tax elections and any material
inquiries, claims, assessments, audits, controversies or similar events received from any taxing authority. In addition, upon the
request of any Member, the Company and each Subsidiary shall make an election pursuant to Code Section 754 to adjust the basis
of the Company’s property in the manner provided in Code Sections 734(b) and 743(b). The Company hereby indemnifies and holds
harmless SOIF III from and against any claim, loss, expense, liability, action or damage resulting from its acting
or its failure to take any action as the “tax matters partner” of the Company and the Subsidiaries, provided
that any such action or failure to act does not constitute gross negligence or willful misconduct.

 

8.4           Bank
Accounts. All funds of the Company are to be deposited in the Company’s name in such bank account or accounts as may
be designated by the Manager and shall be withdrawn on the signature of such Person or Persons as the Manager may authorize.

 

8.5           Tax
Returns. The Manager shall cause to be prepared all income and other tax returns of the Company and the Subsidiaries required
by applicable law. No later than the due date or extended due date thereof, the Manager 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.

 

    	16

    	 

    

 

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

 

Section
9.          Management.

 

9.1          Management. 

 

(a)          The
Company shall be managed by BEMT (the “Manager”). To the extent that BEMT or a BEMT Transferee Transfers all or a portion
of its Interest in accordance with Section 12 to a BEMT Transferee, such BEMT Transferee may be appointed as an additional Manager
under this Section 9.1(a) by BEMT or a BEMT Transferee then holding all or a portion of an Interest without any further action
or authorization by any Member. The Manager may not be removed by the Members other than for an act or omission related to the
Company constituting gross negligence or fraud.

 

(b)          The
Manager shall have the authority to exercise all of the powers and privileges granted by the Act, any other law or this Agreement,
together with any powers incidental thereto, and to take any other action not prohibited under the Act or other applicable law,
so far as such powers or actions are necessary or convenient or related to the conduct, promotion or attainment of the business,
purposes or activities of the Company, except that any Major Decision or other matter submitted by the Manager to the Members shall
require the express and unanimous approval of the Members; provided, and notwithstanding any provision herein to the contrary,
that any decision to be made by the Company or its Representatives on the Management Committee of the Stonehenge Bluerock Berry
Hill JV, shall only require the approval of and be subject to the direction of BEMT and not any other Member of the Company; provided,
further, that only BEMT, and not any other Member of the Company, shall have the power and authority to exercise the powers
and privileges of the Company as manager of the Stonehenge Bluerock Berry Hill JV.

 

(c)          The
Manager may appoint individuals to act on behalf of the Company with such titles and authority as determined from time to time
by the Manager. Each of such individuals shall hold office until his or her death, resignation or replacement by any Manager.

 

9.2          Affiliate
Transactions. No agreement shall be entered into by the Company or any Subsidiary with a Member or any Affiliate of a Member
and no decision shall be made in respect of any such agreement (including, without limitation, the enforcement or termination thereof)
unless such agreement or related decision shall have been approved unanimously in writing by the Manager.

 

    	17

    	 

    

 

9.3          Other
Activities.

 

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

 

(b)          Limitation
on Actions of Members; Binding Authority. No Member shall take any action on behalf of, or in the name of, the Company, or
enter into any contract, agreement, commitment or obligation binding upon the Company, or, in its capacity as a Member or Manager
of the Company, perform any act in any way relating to the Company or the Company’s assets, except in a manner and to the
extent consistent with the provisions of this Agreement.

 

9.4          Operation
in Accordance with REOC/REIT Requirements.

 

(a)          The
Members acknowledge that SOIF III 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 SOIF III and such SOIF III Affiliate to so qualify. Notwithstanding anything herein to the contrary,
the Company and its Subsidiaries shall not take, or refrain from taking, any action that would result in SOIF III or a SOIF III
Affiliate from failing to qualify as a REOC. BEMT (a) shall not fund any Capital Contribution "with the 'plan assets' of any
'employee benefit plan' within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
or any 'plan' as defined by Section 4975 of the Internal Revenue Code of 1986, as amended", and (b) shall comply with any
requirements specified by SOIF III in order to ensure compliance with this Section 9.4.

 

(b)          Notwithstanding
anything in this Agreement to the contrary, unless specifically agreed to by the Manager in writing, 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.

 

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

 

    	18

    	 

    

 

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

 

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

 

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

 

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

 

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

 

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

 

    	19

    	 

    

 

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

 

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

 

(ix)        Failing
to make current cash distributions to REIT Member each year in an amount which does not at least equal the taxable income allocable
to REIT Member for such year.

 

Notwithstanding
the foregoing provisions of this Section 9.4(c), the Company may enter into a REIT Prohibited Transaction if it receives
the prior written approval of the REIT Member specifically acknowledging that the REIT Member is approving a REIT Prohibited Transaction
pursuant to this Section 9.4(c). For purposes of this Section 9.4(c), “REIT Prohibited Transactions”
shall mean any of the actions specifically set forth in this Section 9.4(c).

 

9.5          FCPA.

 

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

 

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

 

    	20

    	 

    

 

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

 

Section
10.         Confidentiality.

 

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

 

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

 

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

 

(z)          has
been or is hereafter obtained by the receiving Member from a third party not bound by any confidentiality obligation with respect
to the Confidential Information;

 

provided, further, that nothing
herein shall prevent any Member from disclosing any portion of such Confidential Information (1) to the Company and allowing the
Company to use such Confidential Information in connection with the Company’s business, (2) pursuant to judicial order or
in response to a governmental inquiry, by subpoena or other legal process, but only to the extent required by such order, inquiry,
subpoena or process, and only after reasonable notice to the original divulging Member, (3) as necessary or appropriate in connection
with or to prevent the audit by a governmental agency of the accounts of BEMT or SOIF III, (4) in order to initiate, defend or
otherwise pursue legal proceedings between the parties regarding this Agreement, (5) necessary in connection with a Transfer of
an Interest permitted hereunder or (6) to a Member’s respective attorneys or accountants or other representative.

 

    	21

    	 

    

 

(b)          The
Members and their Affiliates shall each act to safeguard the secrecy and confidentiality of, and any proprietary rights to, any
non-public information relating to the Company and its business, except to the extent such information is required to be disclosed
by law or reasonably necessary to be disclosed in order to carry out the business of the Company. Each Member may, from time to
time, provide the other Members written notice of its non-public information which is subject to this Section 10(b).

 

(c)          Without
limiting any of the other terms and provisions of this Agreement (including, without limitation, Section 9.6), to the extent
a Member (the “Pursuer”) provides the other Member with information relating to a possible investment opportunity
then being actively pursued by the Pursuer on behalf of the Company, the other Member receiving such information shall not use
such information to pursue such investment opportunity for its own account to the exclusion of the Pursuer so long as the Pursuer
is actively pursuing such opportunity on behalf of the Company and shall not disclose any Confidential Information to any Person
(except as expressly permitted hereunder) or take any other action in connection therewith that is reasonably likely to cause damage
to the Pursuer.

 

Section
11.         Representations and Warranties.

 

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

 

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

 

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

 

    	22

    	 

    

 

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

 

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

 

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

 

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

 

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

 

    	23

    	 

    

 

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

 

(h)          Securities
Matters.

 

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

 

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

 

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

 

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

 

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

 

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

 

    	24

    	 

    

 

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

 

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

 

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

 

12.1         Prohibited
Transfers. Except as otherwise provided in this Section 12, Sections 5.2(b) or as approved by the Manager, no
Member shall Transfer all or any part of its Interest, whether legal or beneficial, in the Company, and any attempt to so Transfer
such Interest (and such Transfer) shall be null and void and of no effect. Notwithstanding the foregoing, either Member shall have
the right, with the consent of the other Member, at any time to pledge to a lender or creditor, directly or indirectly, all or
any part of its Interest in the Company for such purposes as it deems necessary in the ordinary cause of its business and operations.

 

12.2         Affiliate
Transfers.

 

(a)          Subject
to the provisions of Section 12.2(b) hereof, and subject in each case to the prior written approval of each Member (such
approval not to be unreasonably withheld), any Member may Transfer all or any portion of its Interest in the Company at any time
to an Affiliate of such Member, provided that such Affiliate shall remain an Affiliate of such Member at all times that such Affiliate
holds such Interest. If such Affiliate shall thereafter cease being an Affiliate of such Member while such Affiliate holds such
Interest, such cessation shall be a non-permitted Transfer and shall be deemed void ab initio, whereupon the Member having
made the Transfer shall, at its own and sole expense, cause such putative transferee to disgorge all economic benefits and otherwise
indemnify the Company and the other Member(s) against loss or damage under any Collateral Agreement.

 

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

 

    	25

    	 

    

 

(i)          Any
Transfer by SOIF III or a SOIF III Transferee of up to one hundred percent (100%) of its Interest to any Affiliate of SOIF III,
including but not limited to (A) BEMT or any Person that is directly or indirectly owned by BEMT; (B) Bluerock Special Opportunity
+ Income Fund, LLC (“SOIF”) or any Person that is directly or indirectly owned by SOIF; and/or (C) Bluerock
Special Opportunity + Income Fund II, LLC (“SOIF II”) or any Person that is directly or indirectly owned by SOIF II
(collectively, a “SOIF III Transferee”);

 

(ii)         Any
Transfer by BEMT or a BEMT Transferee of up to one hundred percent (100%) of its Interest to any Affiliate of BEMT, including but
not limited to (A) SOIF or any Person that is directly or indirectly owned by SOIF; (B) SOIF II or any Person that is directly
or indirectly owned by SOIF II; and/or (C) SOIF III or any Person that is directly or indirectly owned by SOIF III (collectively,
a “BEMT Transferee”);

 

provided however, as to subparagraphs (b)(i)
and (b)(ii), and as to subparagraph (a), no Transfer shall be permitted and shall be void ab initio if it shall violate
any “Transfer” provision of any applicable Collateral Agreement with third party lenders.

 

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

 

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

 

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

 

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

 

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

 

(ii)         the
Transfer would result in a termination of the Company under Code Section 708(b);

 

    	26

    	 

    

 

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

 

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

 

(v)         as
a result of such Transfer, the Company would or may have in the aggregate more than one hundred (100) members and material adverse
federal income tax consequences would result to a Member. For purposes of determining the number of members under this Section
12.3(b)(v), a Person (the “beneficial owner”) indirectly owning an interest in the Company through a partnership,
grantor trust or S corporation (as such terms are used in the Code) (the “flow-through entity”) shall be
considered a member, but only if (i) substantially all of the value of the beneficial owner’s interest in the flow-through
entity is attributable to the flow-through entity’s interest (direct or indirect) in the Company and (ii) in the sole discretion
of the Manager, a principal purpose of the use of the flow-through entity is to permit the Company to satisfy the 100-member limitation;
or

 

(vi)        the
transferor failed to comply with the provisions of Sections 12.2(a) or (b).

 

The Manager may require
the provision of a certificate as to the legal nature and composition of a proposed transferee of an Interest of a Member and from
any Member as to its legal nature and composition and shall be entitled to rely on any such certificate in making such determinations
under this Section 12.3.

 

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

 

Section
13.         Dissolution.

 

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

 

    	27

    	 

    

 

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

 

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

 

(b)          at
any time at the election of the Manager in writing;

 

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

 

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

 

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

 

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

 

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

 

(c)          Any
gain or loss realized by the Company upon the sale of its property shall be deemed recognized and allocated to the Members in the
manner set forth in Section 7.2. To the extent that an asset is to be distributed in kind, such asset shall be deemed to
have been sold at its fair market value on the date of distribution, the gain or loss deemed realized upon such deemed sale shall
be allocated in accordance with Section 7.2 and the amount of the distribution shall be considered to be such fair market
value of the asset.

 

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

 

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

 

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

 

(iii)        the
balance, if any, to the Members in accordance with Sections 6.1.

 

    	28

    	 

    

 

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

 

Section
14.         Indemnification.

 

14.1         Exculpation
of Members. No Member, Manager, representative or officer of the Company shall be liable to the Company or to the other Members
for damages or otherwise with respect to any actions or failures to act taken or not taken relating to the Company, except to the
extent any related loss results from fraud, gross negligence or willful or wanton misconduct on the part of such Member, Manager,
representative or officer or the willful breach of any obligation under this Agreement.

 

14.2         Indemnification
by Company. The Company hereby indemnifies, holds harmless and defends the Members, the Manager, the officers and each of their
respective agents, officers, directors, members, partners, shareholders and employees from and against any loss, expense, damage
or injury suffered or sustained by them (including but not limited to any judgment, award, settlement, reasonable attorneys’
fees and other costs or expenses incurred in connection with the defense of any actual or threatened action, proceeding or claim)
by reason of or arising out of (i) their activities on behalf of the Company or in furtherance of the interests of the Company,
including, without limitation, the provision of guaranties to third party lenders in respect of financings relating to the Company
or any of its assets (but specifically excluding from such indemnity by the Company any so called “bad boy” guaranties
or similar agreements which provide for recourse as a result of failure to comply with covenants, willful misconduct or gross negligence,
(ii) their status as Members, Manager, representatives, employees or officers of the Company, or (iii) the Company’s assets,
property, business or affairs (including, without limitation, the actions of any officer, director, member or employee of the Company
or any of its Subsidiaries), if the acts or omissions were not performed or omitted fraudulently or as a result of gross negligence
or willful or wanton misconduct by the indemnified party or as a result of the willful breach of any obligation under this Agreement
by the indemnified party. For the purposes of this Section 14.2, officers, directors, employees and other representatives
of Affiliates of a Member who are functioning as representatives of such Member in connection with this Agreement shall be considered
representatives of such Member for the purposes of this Section 14. Reasonable expenses incurred by the indemnified party
in connection with any such proceeding relating to the foregoing matters shall be paid or reimbursed by the Company in advance
of the final disposition of such proceeding upon receipt by the Company of (x) written affirmation by the Person requesting indemnification
of its good faith belief that it has met the standard of conduct necessary for indemnification by the Company and (y) a written
undertaking by or on behalf of such Person to repay such amount if it shall ultimately be determined by a court of competent jurisdiction
that such Person has not met such standard of conduct, which undertaking shall be an unlimited general obligation of the indemnified
party but need not be secured.

 

    	29

    	 

    

 

14.3        General
Indemnification by the Members.

 

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

 

(b)          Except
as otherwise provided herein or in any other agreement, recourse for the indemnity obligation of the Members under this Section
14.3 shall be limited to such Indemnifying Party’s Interest in the Company.

 

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

 

Section 15.         Sale
Rights

 

15.1        Push
/ Pull Rights.

 

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

 

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

 

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

 

    	30

    	 

    

 

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

 

(e)        Closing.
The closing of an acquisition pursuant to this Section 15.1 shall be held at the principal place of business of the Company
on a mutually acceptable date (the “Closing Date”) not later than sixty (60) days (or, if the Offeree is the
acquiring Member, ninety (90) days) after an election has been made or deemed made under Section 15.1(c). At such closing,
the following shall occur:

 

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

 

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

 

    	31

    	 

    

 

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

 

15.2         Forced
Sale Rights.

 

(a)          Offers.
If, at any time following the third anniversary of the date that the Property is acquired by a Subsidiary, (i) either Member desires
to offer the Company Interest for sale on specified terms, or (ii) receives from an unaffiliated purchaser a bona fide
written cash offer (i.e., not seller financed) for the purchase of such Company Interest on terms that such Member desires for
the Company to accept (such specified terms or bona fide offer being herein called the “Offer”),
then the Member desiring to make or accept the Offer (the “Initiating Member”) shall provide written notice
of the terms of such Offer (the “Sale Notice”) to the other Member (the “Non-Initiating Member”).

 

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

 

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

 

For purposes
of the foregoing calculations, the purchase price for a sale shall be reduced by Imputed Closing Costs therefor. The Initiating
Member must exercise this option, if at all, by delivering written notice thereof to the Non-Initiating Member within twenty (20)
days after the end of the Response Period. The Non-Initiating Member shall pay the Initiating Member cash for its Interest, as
the case may be. Closing shall take place on or before the date specified in the Sale Notice, but if the Non-Initiating Member
is purchasing the Initiating Member’s Interest, the Non-Initiating Member shall have until 120 days after the Sale Notice
in which to close. If the Initiating Member or the Non-Initiating Member defaults at closing, the non-defaulting party shall have
the right to bring suit for damages, for specific performance, or exercise any other remedy available at law or in equity. Upon
payment at closing, the Initiating Member shall execute and deliver all documents reasonably required to transfer the interest
being sold.

 

    	32

    	 

    

 

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

 

Section
16.         Mediation and Arbitration of Disputes.

 

16.1         Events
Giving Rise To Mediation or Arbitration. In the event that there is a dispute between the Manager or the Members as to any
action or issue, or in the event of a deadlock between the Members, then and in such event all of the Members agree, upon the written
request of any one Member, to submit to mediation within ten (10) days of receipt of the request for mediation for the purpose
of resolving the dispute. If mediation is not successful in resolving the dispute; one or more of the Members may elect to have
the dispute submitted to binding arbitration as provided in this Article 10 by giving written notice to each of the Members of
such Member’s election to require arbitration of such dispute. Said written notice shall set forth (i) the action or issue
in dispute and (ii) a brief description of the position of the electing Member with respect to such dispute.

 

16.2         Selection
of Arbitrators.  Within ten (10) days of the date upon which the notice is sent pursuant to Section 10.1, the
Members shall meet for the purpose of selecting three (3) persons to act as arbitrators for the Company for such dispute. In the
event that the Members are unable to agree upon the selection of the arbitrators at such meeting, then within ten (10) days following
such meeting, the Member(s) requesting such arbitration shall select one (1) person to serve as an arbitrator and the remaining
Member(s) shall select one (1) person to serve as an arbitrator and, within five (5) days of the date of their selection, the two
persons so selected shall select a third person to serve as the third and final arbitrator. In the event that the Member(s) requesting
such arbitration select one such person within such ten (10) day period, but the remaining Member(s) fails to select one such person
within such ten (10) day period, or vice versa, then the person selected shall serve as the sole arbitrator and shall make the
determination required hereunder. In the event the two selected arbitrators are unable to agree upon the identity of the person
to serve as the third and final arbitrator, such determination shall be made by the American Arbitration Association in accordance
with its then-existing rules and regulations. No person selected by the Members and/or by the arbitrators may be employed by, doing
substantial business with or otherwise affiliated with any of the Members (including, but not limited to, acting as an attorney
or accountant for any one or more of the Members or for the Company).

 

    	33

    	 

    

 

16.3         Arbitration
Hearing. Not later than fifteen (15) days following the selection of the third arbitrator, a hearing shall be convened by the
arbitrators at a mutually agreeable site. At such hearing, each Member shall be entitled to present arguments in favor of and call
witnesses in support of such Member’s position with respect to the item in dispute; provided, however, that absent a written
agreement of the Members to the contrary, presentation and/or arguments (including the direct testimony of any witnesses called
by a Member) of each side of the dispute shall be limited to three (3) hours.

 

16.4         Decision
of the Arbitrators/Binding Effect. The arbitrators shall render their decision regarding the matter in dispute within ten (10)
days following the date of the hearing set forth in Section 10.3 hereinabove and said decision shall be final and binding
upon the Members and the Company. Each of the Members hereby covenant and agree that they shall comply with the decision of the
arbitrators.

 

Section
17.         Miscellaneous.

 

17.1        Notices.

 

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

 

If to SOIF III:

 

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

Heron Tower

70 East 55th Street, 9th
Floor

New York, New York 10022

Attn: R.
Ramin Kamfar

 

With a copy to:

 

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

Heron Tower

70 East 55th Street,
9th Floor

New York, New York 10022

Attn: Michael L. Konig, Esq.

 

    	34

    	 

    

 

If to BEMT:

 

Bluerock Enhanced Multifamily
Advisor, LLC

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

Heron Tower

70 East 55th Street,
9th Floor

New York, New York 10022

 

Attention: James G. Babb, III

 

with a copy to:

 

Kaplan, Voekler, Cunningham &
Frank, PLC

7 East 2nd Street

Richmond, Virginia 23218

Attention: Richard P. Cunningham,
Esq.

 

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

 

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

 

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

 

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

 

    	35

    	 

    

 

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

 

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

 

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

 

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

 

17.8         Entire
Agreement and Amendment. This Agreement and the other written agreements described herein between the parties hereto entered
into as of the date hereof, constitute the entire agreement between the Members relating to the subject matter hereof. In the event
of any conflict between this Agreement or such other written agreements, the terms and provisions of this Agreement shall govern
and control.

 

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

 

17.10       No
Third Party Rights. The provisions of this Agreement are for the exclusive benefit of the Members and the Company, and no other
party (including, without limitation, any creditor of the Company) shall have any right or claim against any Member by reason of
those provisions or be entitled to enforce any of those provisions against any Member.

 

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

 

    	36

    	 

    

 

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

 

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

 

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

 

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

 

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

 

    	37

    	 

    

 

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

 

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

 

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

 

    	38

    	 

    

 

IN WITNESS WHEREOF, the Members have executed this Limited Liability
Company Agreement as of the date set forth above.

 

	 	MEMBERS:
	 	Bluerock Special Opportunity + Income Fund III, LLC,
	 	a Delaware limited liability company
	 	 
	 	By: BR SOIF III Manager, LLC
	 	a Delaware limited liability
	 	Its: Manager
	 	 
	 	By:	/s/ Jordan B. Ruddy
	 	Name:  Jordan B. Ruddy
	 	Its:  President
	 	 
	 	BEMT Berry Hill, 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 B. Ruddy
	 	Name: Jordan B. Ruddy
	 	Its:  President and Chief Operating Officer

 

[Signature Page to Limited Liability Company
Agreement of BR Berry Hill Managing Member, LLC]

 

    	39

    	 

    

 

EXHIBIT A

 

Initial Capital Contributions and Percentage
Interests

 

	Member Name	 	Initial Capital
 Contribution	 	 	Percentage 
Interest
	 	 	 	 	 	 
	Bluerock Special Opportunity + Income Fund III, LLC	 	$	1,547,507.23	 	 	 	 	29.0	%
	 	 	 	 	 	 	 	 	 	 
	BEMT Berry Hill, LLC	 	$	3,788,724.60	 	 	 	 	71.0	%DEVELOPMENT AGREEMENT

 

THIS DEVELOPMENT
AGREEMENT (the “Agreement”), is made and entered into effective the 18th day of October, 2012, by and
between 23HUNDRED, LLC, a Delaware limited liability company (“Owner”) and STONEHENGE REAL ESTATE GROUP, LLC, a Georgia
limited liability company (“Developer”).

 

WITNESSETH:

 

WHEREAS, Owner
is the owner of certain property located in Davidson County, Tennessee which is more particularly described on Exhibit “A”
attached hereto and incorporated herein (the “Property”); and

 

WHEREAS, Owner
is owned by BR Stonehenge 23Hundred JV, LLC, a Delaware limited liability company (the “JV”), which is a joint venture
between BR Berry Hill Managing Member, LLC, a Delaware limited liability company (“BR Berry Hill”) and Stonehenge 23Hundred
JV Member, LLC, a Tennessee limited liability company (“Stonehenge”), an affiliate of Developer; and

 

WHEREAS, Owner
desires to develop a multifamily apartment complex and related improvements on the Property (the “Project”); and

 

WHEREAS, Owner
desires to retain the services of Developer to act on behalf of Owner and in accordance with the limitations in this Agreement
as the developer of the Project and to manage the development and construction of the Project; and

 

WHEREAS, Developer
desires to provide development services for the Project in return for the compensation set forth herein;

 

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

 

1.           General
Duties of Developer.

 

a.           Developer
shall in good faith and using all reasonable efforts generally cause the Project to be developed, completed and, as appropriate,
leased to third parties, in compliance with the provisions of the Operating Agreement of the JV
dated of even date herewith (the “JV’s Operating Agreement”), for which Developer hereby acknowledges its understanding,
and of any final approved plats, plans, drawings and specifications for the Project, all of which shall be approved by the Owner
(collectively the "Final Plans").

 

b.           In
furtherance of the obligations of Developer described in the preceding subparagraph (a), Developer shall do and perform, the following
matters or functions:

 

(i)          Planning:

 

(a)          Develop
and present to Owner for approval a master development plan for the Project (the "Master Plan") covering all improvements
and infrastructure. The Master Plan shall include financial projections, construction budgets, and other financial data.

 

    	1

    	 

    

 

(b)          Review
and update, if necessary, all projections, construction budgets and other financial data included in the Master Plan. Such reviews
shall take place at least four (4) times per calendar year.

 

(c)          Coordinate,
monitor and/or manage, activities of land planners, architects, engineers, other consultants, utility companies, and approval authorities,
including all relevant governmental agencies, on all matters relating to the design and development of the Project.

 

(d)          Assist
in and coordinate the implementation of the Master Plan; review designs, drawings, and specifications with respect to the Project
during the course of its phases of development; and reasonably monitor whether budgets for each such phase are complied with.

 

(e)          Assist
Owner in obtaining all necessary licenses and permits required to be obtained for the development and operation of the Project
and assist Owner in obtaining all other necessary licenses and approvals required for the operation of the Project, including,
without limitation, licenses and approvals required in connection with the installation of utilities serving the Project (the “Approvals”).

 

(ii)         Construction:

 

(a)          Engage
contractors and other trade vendors, subcontractors and material suppliers to work on the Project. This shall include, but not
be limited to, the engagement of a third-party general contractor with whom the Developer will arrange a guaranteed maximum price
(“GMP”) contract for construction of the Project, which such GMP contract will be subject to the prior written approval
of Owner and any secured lender on the Project, and which contract must comply with the construction budget approved by Owner in
writing pursuant to the JV’s Operating Agreement. Appropriate bids and contracts will be solicited directly by Developer
and presented by Developer to Owner for approval and execution. The parties hereby acknowledge that Developer intends to and is
approved by Owner to engage the joint venture of Cambridge Builders & Contractors, LLC and The Winter Construction Company
as the general contractor for the project under a GMP contract.

 

(b)          Coordinate,
manage, supervise, and administer the work of any and all contractors (which shall include the oversight of such contractor’s
coordination, management, supervision and administration of subcontractors, and other such trade vendors working on the Project),
and all other professionals performing services for the Project.

 

(c)          Manage
and administer construction contracts entered into with respect to or in connection with the Project, and regularly advise BR Berry
Hill Managing Member, LLC (“BR Berry Hill”), as Owner’s representative, with respect to the same. Developer will
not have the authority to execute contracts on Owner's behalf, except as otherwise specified herein.

 

(d)          Monitor
all work relating to the Project (the "Work"), and inspect the Work (and work with, coordinate and supervise all architects
and similar professionals) to determine if the Work is being performed in accordance with the requirements the Master Plan and
the Final Plans and any construction contracts entered into with respect to or in connection with the Project (the "Contract
Documents"), and regularly advise BR Berry Hill with respect to the same.

 

    	2

    	 

    

 

(e)          Enforce
the Contract Documents and ascertain responsibility for any defects or deficiencies in the performance of the parties thereunder
(and advise Owner and BR Berry Hill thereof); provided, however, that Developer shall not be obligated hereunder to commence legal
action to enforce the Contract Documents.

 

(f)          Determine
when any of the Work or a designated portion thereof is substantially complete and prepare for Owner a list of incomplete or unsatisfactory
items of such Work and a schedule for their completion. Developer shall also coordinate and diligently pursue the correction and
completion of any incomplete or unsatisfactory items of such Work.

 

(g)          Obtain
certified documentation as to completion from the architect or design professional when final completion of the Work has occurred.
Developer shall assist Owner, as requested by Owner, in conducting final inspection of any such Work. Developer shall obtain and
submit to Owner required warranties, guarantees, affidavits, releases, bonds and waivers as a part of or in connection with such
Work.

 

iii.         Marketing:

 

(a)          Study
and recommend the rents for each unit.

 

(b)          Provide
any and all assistance reasonably necessary or appropriate to consummate the lease of the units at such prices and on such terms
as are acceptable to Owner; provided, however, Developer does not hold a real estate license and Developer shall not perform any
services which require a real estate license.

 

(c)          Direct
the development and placement of advertisements and marketing for the Project.

 

(d)          Manage
and oversee any third-party property manager or other leasing professionals engaged to market and lease the Project.

 

iv.         Budgeting
and Bookkeeping:

 

(a)          Prepare
and, as appropriate, periodically revise financial projections for the Total Project Budget, as that term is defined in the JV’s
Operating Budget (the “Total Project Budget”), subject to the prior written approval of Owner.

 

(b)          Prepare
the Total Project Budget for Project with monthly breakdowns, and revise periodically such budget, subject to Owner’s prior
written approval.

 

(c)          Submit
monthly financial statements and activities reports, including, but not limited to, income statements, balance sheets, general
ledger, and development activity and narrative budget variance explanations in accordance with the JV’s Operating Agreement.

 

    	3

    	 

    

 

(d)          Financial
statements will be presented monthly, quarterly and annually presenting all assets and liabilities and receipts and expenses for
the Project in accordance with the JV’s Operating Agreement.

 

(e)          Developer
will prepare financial statements and related schedules in accordance with Owner's specifications. Developer and Owner acknowledge
that the parameters of such specifications may not be in accordance with generally accepted accounting principles ("GAAP").

 

(f)          Manage,
balance and monitor any bank accounts for the Project; provided, however, that Developer shall have no right or authority to write
or sign checks. Developer shall also submit to Owner, on a timely basis, for Owner’s review and written approval, accounts
payable as when due of or related to costs as contemplated on the development budget or under any Contract Documents.

 

(g)          Prepare
draw requests in accordance with the requirements of Owner and provide the requests to Owner for written approval. These draw requests
will be accompanied with a copy of the invoice for which payment is sought by drawing on the loan. Developer shall provide Owner
with copies of all loan related and draw related information, including but not limited to monthly copies of the construction draws,
construction draw top sheets with budget-versus-actual information, plus physical access to the Property and all documentation
in connection therewith.

 

(h)          Prepare
any and all such reports and accounting information as reasonably requested by Owner’s, Owner’s construction lender
and BR Berry Hill, and make all records and information regarding the Work and/or the Project available for their inspection upon
reasonable advance notice.

 

v.           Other:

 

(a)          Assist
and advise Owner in all matters concerning the development of the Project and in the preparation of the Project for the development
and lease of residential units, including any specific duties or functions which Owner may from time to time direct.

 

(b)          Provide
sufficient organization, personnel, and management to carry out the requirements of this Agreement.

 

(c)          Perform
any other functions which Owner reasonably requests associated with the Project.

 

(d)          Maintain
insurance coverage, including Builder’s Risk Insurance or its equivalent, of the type and amount customarily carried by a
developer for a project of the size and scope of the Project.

 

2.          Owner
Responsibilities. Notwithstanding anything to the contrary contained herein, it shall be the responsibility and obligation
of Owner to cooperate with Developer in all respects and to take all necessary steps to further the development of the Project.
Owner shall pay all commercially reasonable out-of-pocket costs and expenses incurred by Developer in performing its duties in
Section 1 above, which are presented to Owner for payment in a timely manner and which are set forth or authorized by a written
Owner-approved budget, budget adjustment or other form of authorization.

 

    	4

    	 

    

 

3.          No
Agency or Partnership. It is understood that in fulfilling its duties under this Agreement, Developer shall be acting as
an independent contractor. Furthermore, no express or implied term, provision, or condition of this Agreement shall be deemed to
constitute the parties as partners or joint venturers.

 

4.          Termination.

 

a.           This
Agreement shall terminate upon the earlier of: (i) completion of the Project (i.e. upon receipt of certificates of occupancy for
all phases of the Project); (ii) the conveyance by the Owner of the Property to another party; (iii) the refinancing of the Property
(collectively with any event described in subclause 4(a)(ii), “Capital Events” and, singularly, a “Capital Event”);
or (iv) mutual written agreement of all parties to this Agreement. Notwithstanding subsection (i) above, this Agreement shall survive
the completion of the Project until such time at the Project is at least 93% leased, wherein between the completion of the Project
and the achievement of leasing 93% of the units at the Project, Developer’s only duties under Section 1(b) hereof shall be
those found in Section 1(b)(iii) of this Agreement.

 

b.           Notwithstanding
the foregoing, either party may terminate this Agreement, with cause (wherein cause shall be limited to events of willful and material
fraud or gross negligence by the non-terminating party and only to the extent such acts result in a material adverse effect on
the Project or Owner) and by providing the other party with ten (10) days written notice, said termination to be self-operative
and automatic as of the tenth (10th) day following receipt of said notice subject to any cure provisions in the JV’s
Operating Agreement. In the event this Agreement is terminated in accordance with this Subparagraph 4(b), Developer shall be entitled
to reimbursement of its reasonable costs and expenses as contemplated in Paragraph 5(b) below through the date of termination and
the unpaid Development Fee based on the portion of the Project that is complete on the termination date. If Developer and Owner
are unable to agree on the portion of the Project that is complete within ten (10) days of the date of the termination of this
Agreement, the parties shall each appoint a registered architect. Each appointed architect shall issue a written statement attesting
to the completion stage of the project within thirty (30) days of their respective appointments. If the architects agree on the
completion stage of the Project, this shall establish the final and binding determination of the completion state of the Project.
If the appointed architects disagree on the completion stage, the architects shall jointly appoint a mutually agreeable third registered
architect (“Third Architect”) who shall determine the completion stage of the Project, which shall be the final and
binding determination of the completion stage of the Project. Each party shall pay the costs and expenses of the architect appointed
by such party and the parties shall each pay for 50% of the costs and expenses of the Third Architect.

 

5.           Developer
Compensation.

 

a.           As
compensation for the services to be rendered by Developer pursuant to the terms of this Agreement, Owner shall pay to Developer
a development fee equal to NINE HUNDRED FORTY EIGHT THOUSAND AND NO/100 DOLLARS ($948,000.00) (the “Development Fee”),
which shall be payable by wire transfer or other immediately available funds as follows:

 

1.          An
amount equal to 25% of the Development Fee (TWO HUNDRED THIRTY THOUSAND AND NO/100 DOLLARS $237,000.00) shall be paid to Developer
upon commencement of construction of the Project;

 

    	5

    	 

    

 

2.          Following
the commencement of construction of the Project, an amount equal to 50% of the Development Fee (FOUR HUNDRED SEVENTY FOUR THOUSAND
AND NO/100 DOLLARS $474,000.00) shall be paid to Developer in equal monthly installments over a seventeen (17) month period; and

 

3.          An
amount equal to 25% of the Development Fee (TWO HUNDRED THIRTY THOUSAND AND NO/100 DOLLARS $237,000.00) shall be paid to Developer
upon completion of the Project (as determined by the certified document of the architect or design professional) and the Project
achieving, through lease-up, a Debt Service Coverage Ratio (as that term is defined in that certain Construction Loan Agreement
by and between Fifth Third Bank and the Owner) of 1.20 to 1.00 (collectively, the “Stabilization”).

 

Notwithstanding anything to the contrary
contained herein, (a) if the Owner’s construction lender does not permit the aforesaid fees to be paid as draws under the
construction loan, then such amounts shall accrue as provided in the JV’s Operating Agreement, or (b) if the Owner causes
the Property to undergo a Capital Event prior to Stabilization, or any other termination event under Paragraph 4, the Owner shall,
within thirty (30) days after such Capital Event, or other termination event, pay, pro-rata to the amount of development constructed
as of the date of the Capital Event or other termination event, any outstanding, unpaid portion of the Development Fee which has
not been paid to Developer.

 

b.           Owner
shall also reimburse Developer for commercially reasonable out-of-pocket costs and expenses incurred by Developer for travel, administration,
meals, etc., according to the approved Total Project Budget, subject to the draw schedule imposed and/or approved by the Owner
and its construction lender. In the event any amounts payable hereunder to Developer are not delivered to Developer when due and
payable, interest shall accrue on such outstanding amount at eight percent (8%) per annum from the date following the date such
amount was due and payable.

 

6.          Notices.         Each
notice required or permitted to be given hereunder must comply with the requirements of this Paragraph. Each such notice shall
be in writing and shall be delivered either by personally delivering it by hand or Federal Express or similar courier service to
the person to whom notice is directed, or by facsimile transmission, 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). Such notice shall be deemed delivered at the time of personal delivery or, if mailed, when it is
deposited as provided above, but the time period in which a response to any such notice must be given or any action taken with
respect thereto shall commence to run from the date it is personally delivered or, if mailed, the date of receipt of the notice
by the addressee thereof, as evidenced by the return receipt. Notwithstanding the above, notice by facsimile transmission shall
be deemed to have been given as of the date and time it is transmitted if the sending facsimile machine produces a written confirmation
with a date, time and telephone number to which the notice was sent. 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 below shall be deemed to be the receipt of the notice
sent. The addresses of the parties to which notice is to be sent shall be those set forth below. Such addresses may be changed
by either party by designating the change of address to the other party in writing.

 

    	6

    	 

    

 

If To Owner:

 

c/o Bluerock Real Estate

Heron Tower

70 East 55th Street, 9th Floor

New York, New
York 10022

Attention: Michael L. Konig, Esq.

Email: mkonig@bluerockre.com

 

And:

 

c/o Bluerock Real Estate

Heron Tower

70 East 55th Street, 9th Floor

New York, New York 10022

Attention: Jordan B. Ruddy

 

With Copy To:

 

Kaplan Voekler Cunningham
& Frank, PLC

7 E. 2nd
Street

Richmond, Virginia
23224

Attn: Richard P. Cunningham,
Jr. Esq.

 

If To the Developer:

 

23Hundred, LLC

c/o Stonehenge Real Estate Group,
LLC

3200 West End Avenue, Suite 500

Nashville, TN 37203

Attn: Todd Jackovich

 

With a copy to:

 

Foltz Martin LLC

3525 Piedmont Road, Suite 750

Atlanta, GA 30305

Attn: Eric Wilensky

 

7.          Indemnification.
To the fullest extent permitted by law, Developer agrees to indemnify, defend and hold harmless the Owner, its members, officers,
agents, and attorneys (the “Owner Indemnified Parties”) from any and all fines, penalties, losses, damages, claims,
costs, expenses (including reasonable and actual attorney’s fees) or other liabilities but only to the extent directly attributable
to Developer’s breach of this Agreement, including, but not limited to any breach of any express representation, warranty
or covenant hereunder, fraud by the Developer or its agents (i.e. any principal of Developer or person or entity that Developer
has engaged to perform services at the Project) or incurred as a result of Developer’s violation of any law, rule, regulation,
contract or other agreement, but only to the extent of an Owner Indemnified Parties’ actual damages (“Damages”),
and the Owner Indemnified Parties hereby waive any right to any other kinds of damages including, without limitation, any incidental,
consequential, or punitive damages (“Special Damages”). Developer agrees to indemnify the Owner Indemnified Parties
as set forth above, but only to the extent of any Damages not arising out of or related to Owner Indemnified Party’s grossly
negligent or willful misconduct in connection with its obligations under this Agreement. Each defense indemnification obligation
of Developer as Indemnitor as set forth in this Agreement shall be subject to the following provisions: Owner Indemnified Parties
shall notify Developer of the applicable claim against Owner Indemnified Parties within thirty (30) days after it has written notice
of such claim and shall reasonably cooperate (at Developer’s cost) with Developer in the defense of such claim, but failure
to notify Developer within thirty (30) days or to reasonably cooperate in the defense, provided there is actual and material prejudice
to the Developer, shall excuse Developer from its obligations hereunder. For purposes of this Section 7, “material prejudice”
shall mean had Developer been so notified, Developer would have likely avoided incurring liability under this Section 7 for amounts
(a) in excess of $25,000.00 for any such incident; or (b) in excess of $50,000.00 in the aggregate of multiple incidents. If Developer
fails to undertake to defend the Owner Indemnified Parties against a claim within thirty (30) days after Owner Indemnified Parties
gives Developer written notice of the claim and thereafter fails to discharge its obligations, then Owner Indemnified Parties may
defend against and settle such claim, and Developer shall be liable for the costs and expenses, including reasonable attorneys'
fees, actually incurred by Owner Indemnified Parties in effecting the defense, as well as any settlement. Developer will not be
obligated for any settlement made without the written approval of Developer, unless Developer has failed to discharge its defense
obligation hereunder, or unless Developer’s objection to the proposed settlement is not in good faith or not commercially
reasonable; provided, however, in the event an objection is determined to not be commercially reasonable, then in such event Developer
shall have the right to withhold its approval by posting a bond in the amount of the claim or otherwise demonstrating, to the reasonable
satisfaction of Owner, that Developer has the financial ability to pay the full amount of the claim. To the extent any of the Damages
were due exclusively to the gross negligence, fraud or willful misconduct of Owner, then Owner shall indemnify Developer for such
caused Damages.

 

    	7

    	 

    

 

8.          Miscellaneous.
No consent or waiver, express or implied, by any party to or of any breach or default by any other party in the performance
by such other party of the obligations thereof under this Agreement shall be deemed or construed to be a consent to or waiver to
or of any other breach or default in the performance by such other party of the same or any other obligations of such other party
under this Agreement. Failure on the part of any party to complain of any act or failure to act of any other party or to declare
such other party in default, irrespective of how long such failure continues, shall not constitute a waiver of such party of the
rights thereof under this Agreement. If any provision of this Agreement or the application thereof to any entity or circumstances
shall be invalid or unenforceable to any extent, the remainder of this Agreement and the application of such provisions to any
other entity or circumstance shall not be affected thereby and shall be enforced to the greatest extent permitted by law. Neither
this Agreement nor any provision hereof may be changed, waived, discharged, or terminated orally, but only by an instrument in
writing signed by the parties against whom enforcement of the change, waiver, discharge, or termination is sought. All personal
pronouns used in this Agreement, whether used in the masculine, feminine, or neuter gender, shall include all other genders; the
singular shall include the plural; and the plural shall include the singular. Titles of sections and subsections of this Agreement
are for convenience only and neither limit nor amplify the provisions of this Agreement, and all references in this Agreement to
sections or subsection refer to sections or subsections of this Agreement unless specific reference is made to the articles, sections,
or subdivisions of another document or instrument. The provisions of this Agreement shall apply to, inure to the benefit of, and
bind the parties and the respective successors and assigns thereof. Subject to the above, whenever in this Agreement a reference
to any party is made, such reference shall be deemed to include a reference to the heirs, executors, legal representatives, successors,
and assigns of such party. Notwithstanding anything to the contrary contained herein, Owner shall have the right to assign its
rights or interest hereunder, in whole or in part, upon written notice to the other party. No provision of this Agreement shall
be construed against or interpreted to the disadvantage of any party by any court or other governmental or judicial authority by
reason of such party having or being deemed to have structured or dictated such provision. This Agreement and the obligations of
the Parties hereunder shall be interpreted, construed, and enforced in accordance with the laws of the State of Tennessee. This
Agreement contains the entire and final agreement of the parties on the subject matter herein and supersedes all previous and contemporaneous
verbal or written negotiations or agreements on the subject matter herein

 

    	8

    	 

    

 

IN WITNESS WHEREOF,
the undersigned have set their hands and seals hereto as of the day and year indicated under their signature.

  

	OWNER:	DEVELOPER:
	 	 
	23HUNDRED, LLC, a Delaware limited liability company	Stonehenge Real Estate group, LLC, a Georgia limited liability company,
	 	 
	By: BR Stonehenge 23Hundred JV, LLC,	By:  	/s/ Todd Jackovich
	a Delaware limited liability company, as its sole Member	 	Todd Jackovich, as its Manager
	 	 
	By: BR Berry Hill Managing Member, LLC,	 
	a Delaware limited liability company, as its Manager	 
	 	 
	By: Bluerock Enhanced Multifamily Trust, Inc.,  	 
	a Maryland corporation, as its	 
	Manager	 

 

	By:	/s/ Jordan B. Ruddy	 
	Name: Jordan B. Ruddy	 
	Its: President and Chief Operating Officer	 

 

    	9

    	 

    

 

EXHIBIT “A”

 

DESCRIPTION OF PROPERTY

 

    	A

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00211-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00211-of-00352.parquet"}]]