Document:

Exhibit 10.4

 

EXECUTION VERSION 

 

AMENDED
AND RESTATED

LIMITED LIABILITY COMPANY AGREEMENT

OF

GUNKI HOLDINGS, LLC

August 3, 2015 

 

     

     

    

 

TABLE
OF CONTENTS

 

	 	 	Page
	 	 	 
	ARTICLE I DEFINITIONS, ETC.	4
	 	 	 
	1.1	Definitions	4
	1.2	Exhibits, Etc	14
	 	 
	ARTICLE II ORGANIZATION	14
	 	 	 
	2.1	Limited Liability Company	14
	2.2	Name	14
	2.3	Character of the Business	14
	2.4	Location of the Principal Place of Business	15
	2.5	Registered Agent and Registered Office	15
	2.6	Original LLC Agreement; Members	15
	2.7	Tax Status of Company	15
	 	 
	ARTICLE III TERM	15
	 	 
	ARTICLE IV CAPITAL CONTRIBUTIONS	15
	 	 	 
	4.1	Initial Capital Contributions	15
	4.2	Capital Accounts	16
	4.3	Liability for Deficits in Capital Accounts	16
	4.4	Future Capital Contributions	16
	4.5	No Interest; No Return	16
	4.6	Units	16
	4.7	Issuances of Additional Units	16
	4.8	Units Have Not Been Registered	17
	4.9	No Preemptive Rights	17
	 	 
	ARTICLE V ALLOCATIONS, DISTRIBUTIONS, AND OTHER TAX
    AND ACCOUNTING MATTERS	17
	 	 	 
	5.1	Allocations	17
	5.2	Distributions	18
	5.3	Books of Account	19
	5.4	Tax Elections and Returns	19
	5.5	Tax Matters Member	19
	 	 
	ARTICLE VI	20
	 	 
	RIGHTS, DUTIES AND RESTRICTIONS OF THE MANAGING MEMBER	20
	 	 	 
	6.1	Expenditures by the Company	20
	6.2	Powers and Duties of Managing Member	20

 

    	 	i	 

     

    

 

	6.3	Certificate of Formation	24
	6.4	Restrictions on Managing Member’s Authority	24
	6.5	Reliance by Third Parties	25
	6.6	Title Holder	26
	6.7	Compensation of the Managing Member	26
	6.8	Indemnification	26
	6.9	Liability of the Managing Member	28
	6.10	Other Matters Concerning the Managing Member	29
	 	 
	ARTICLE VII DISSOLUTION, LIQUIDATION AND WINDING-UP	29
	 	 	 
	7.1	Accounting	29
	7.2	Distribution on Dissolution	30
	7.3	Sale of Properties	30
	7.4	Distributions in Kind	30
	7.5	Documentation of Liquidation	30
	7.6	Dissolution	31
	 	 
	ARTICLE VIII TRANSFER OF UNITS	31
	 	 	 
	8.1	Transfers by Members	31
	8.2	Transfer of the Managing Member’s Class A Units	32
	8.3	Transfer of Units Other then the Class A Units	32
	8.4	Restrictions on Transfer	33
	8.5	Attempted Transfers That Do Not Comply with this Article VIII	34
	8.6	Record of Transfers; Certificates for Units	34
	 	 
	ARTICLE IX RIGHTS AND OBLIGATIONS OF THE MEMBERS	34
	 	 	 
	9.1	No Participation in Management	34
	9.2	Rights to Obtain Certain Documents and Information	35
	9.3	No Withdrawal	35
	9.4	Limited Liability	35
	9.5	Investment Policy	35
	 	 
	ARTICLE X GRANT OF EXCHANGE RIGHTS TO MEMBERS Holding
    Class B Units	35
	 	 	 
	10.1	Exchange Right	35
	10.2	Clipper’s Option	36
	10.3	Exchange Right	36
	10.4	Clipper Common Shares	36
	10.5	Limitations	36
	10.6	Additional Conditions	37
	 	 
	ARTICLE XI GENERAL PROVISIONS	37
	 	 	 
	11.1	Notices	37
	11.2	Successor	38
	11.3	No Third-Party Rights Created Hereby	38

 

    	 	ii	 

     

    

 

	11.4	No Rights as Stockholders of Clipper	38
	11.5	Creditors	38
	11.6	Counterparts	38
	11.7	Members Not Agents	38
	11.8	Entire Understanding	38
	11.9	Severability	39
	11.10	Pronouns and Headings	39
	11.11	Assurances	39
	11.12	Expenses	39
	11.13	Waiver of Partition	39
	11.14	GOVERNING LAW	39
	11.15	Jurisdiction	40

  

	Exhibit A	Special Allocation Rules
	Exhibit B	Notice of Exchange
	 	 
	Schedule A	Members
	Schedule B	Capital Contributions; Units

  

    	 	iii	 

     

    

 

THE UNITS REFERRED
TO IN THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
OR ANY STATE SECURITIES LAWS. ACCORDINGLY, NO UNITS MAY BE RESOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS SUBSEQUENTLY
REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE,
AND UNLESS THE OTHER TRANSFER RESTRICTIONS CONTAINED HEREIN HAVE BEEN SATISFIED. REFERENCE IS MADE TO ARTICLE VIII OF THIS AGREEMENT
FOR PROVISIONS RELATING TO VARIOUS RESTRICTIONS ON THE SALE OR OTHER TRANSFER OF THESE UNITS.

 

THIS
AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT (this “Agreement”) of Gunki Holdings, LLC, a Delaware
limited liability company (the “Company”), is made and entered into as of the 3rd day of August, 2015 (the
“Effective Date”), by and among those persons listed on Schedule A, as it may be amended from time
to time, as members of the Company (each a “Member” and collectively, the “Members”) and
any other Persons who become Members after Effective Date.

 

WITNESSETH:

 

WHEREAS,
the Company was formed pursuant to a Certificate of Formation, filed with the Secretary of State of the State of Delaware on January
10, 2003;

 

WHEREAS,
the Continuing Investors (as defined below) and/or their predecessors-in-interest entered into that certain Operating Agreement,
dated as January 21, 2003 and amended on May 3, 2007 and December 31, 2012 (the “Original LLC Agreement”);

 

WHEREAS,
upon and subject to the terms of this Agreement and the Investment Agreement dated the date hereof, the Company has admitted Clipper
Realty L.P. as a Member of the Company; and

 

WHEREAS,
the Members desire to amend and restate the terms and provisions of the Original LLC Agreement and intend for this Agreement to
supersede the Original LLC Agreement.

 

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

 

ARTICLE
I

DEFINITIONS, ETC.

 

1.1       Definitions.
Each of the following terms will have the meaning set forth below:

 

“Act”
means the Delaware Limited Liability Company Act, as it may hereafter be amended from time to time and any successor to such statute.

 

     

     

    

 

“Adjusted
Capital Account Deficit” means with respect to any Member, the deficit balance, if any, in such Member’s Capital
Account as of the end of the relevant Fiscal Year, after giving effect to the following adjustments:

 

(a)        Credit to such
Capital Account any amounts which such Member is obligated to restore or is deemed to be obligated to restore to the Company pursuant
to the penultimate sentences of Treasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

 

(b)        Debit to such Capital
Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6)
of the Treasury Regulations.

 

The
foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Section 1.704-1(b)(2)(ii)(d)
of the Treasury Regulations and shall be interpreted consistently therewith.

 

“Adjustment
Factor” means 1.0; provided, however, that in the event that:

 

(a)        Clipper
(i) declares or pays a dividend on the outstanding Clipper Common Shares wholly or partly in Clipper Common Shares or makes
a distribution to all holders of the outstanding Clipper Common Shares wholly or partly in Clipper Common Shares, (ii) splits
or subdivides the outstanding Clipper Common Shares or (iii) effects a reverse stock split or otherwise combines the outstanding
Clipper Common Shares into a smaller number of Clipper Common Shares, the Adjustment Factor shall be adjusted by multiplying the
Adjustment Factor previously in effect by a fraction, (1) the numerator of which shall be the number of Clipper Common Shares
issued and outstanding on the record date for such dividend, distribution, split, subdivision, reverse split or combination (assuming
for such purposes that such dividend, distribution, split, subdivision, reverse split or combination has occurred as of such time)
and (2) the denominator of which shall be the actual number of Clipper Common Shares (determined without the above assumption)
issued and outstanding on the record date for such dividend, distribution, split, subdivision, reverse split or combination;

 

(b)
        Clipper distributes any rights, options or warrants to all holders of Clipper Common Shares to subscribe for or to purchase
or to otherwise acquire Clipper Common Shares (or other securities or rights convertible into, exchangeable for or exercisable
for Clipper Common Shares) at a price per share less than the Value of a Clipper Common Share on the record date for such distribution
(each a “Distributed Right”), then, as of the distribution date of such Distributed Rights, or, if later, the
time such Distributed Rights become exercisable, the Adjustment Factor shall be adjusted by multiplying the Adjustment Factor
previously in effect by a fraction (i) the numerator of which shall be the number of Clipper Common Shares issued and outstanding
on the record date (or, if later, the date such Distributed Rights become exercisable) plus the maximum number of Clipper Common
Shares purchasable under such Distributed Rights and (ii) the denominator of which shall be the number of Clipper Common
Shares issued and outstanding on the record date (or, if later, the date such Distributed Rights become exercisable) plus a fraction
(1) the numerator of which is the maximum number of Clipper Common Shares purchasable under such Distributed Rights times
the minimum purchase price per Clipper Common Share under such Distributed Rights and (2) the denominator of which is the
Value of a Clipper Common Share as of the record date (or, if later, the date such Distributed Rights become exercisable); provided,
however, that if any such Distributed Rights expire or become no longer exercisable, then the Adjustment Factor shall be adjusted,
effective retroactive to the date of distribution of the Distributed Rights, to reflect a reduced maximum number of Clipper Common
Shares or any change in the minimum purchase price for the purposes of the above fraction;

 

    	 	5	 

     

    

 

(c)
        Clipper shall, by dividend or otherwise, distribute to all holders of Clipper Common Shares evidences of its indebtedness
or assets (including securities, but excluding any dividend or distribution referred to in subsection (a) or (b) above),
then the Adjustment Factor shall be adjusted to equal the amount determined by multiplying the Adjustment Factor in effect immediately
prior to the close of business on the date fixed for determination of stockholders of Clipper entitled to receive such distribution
by a fraction (i) the numerator of which shall be such Value of a Clipper Common Share on the date fixed for such determination
and (ii) the denominator of which shall be the Value of a Clipper Common Share on the dates fixed for such determination
less the then fair market value (as determined by Clipper, whose determination shall be conclusive) of the portion of the evidences
of indebtedness or assets so distributed applicable to one Clipper Common Share; and

 

(d)
        an entity other than Clipper shall become the general partner of the Managing Member pursuant to any merger, consolidation
or combination of Clipper with or into another entity (the “Successor Entity”), the Adjustment Factor shall
be adjusted by multiplying the Adjustment Factor by the number of shares of the Successor Entity into which one Clipper Common
Share is converted pursuant to such merger, consolidation or combination, determined as of the date of such merger, consolidation
or combination.

 

Any
adjustments to the Adjustment Factor shall become effective immediately after the effective date of such event, retroactive to
the record date, if any, for such event. Notwithstanding the foregoing, the Adjustment Factor shall not be adjusted in connection
with an event described in clauses (a) or (b) above if, in connection with such event, the Company makes a distribution
of cash, Units, OP Units, Clipper Common Shares and/or rights, options or warrants to acquire Units, OP Units and/or Clipper Common
Shares with respect to all applicable Units or effects a reverse split of, or otherwise combines, the Units, as applicable, that
is comparable as a whole in all material respects with such an event, or if in connection with an event described in clause (d) above,
the consideration in Section 8.2 hereof is paid. 

 

“Administrative
Expenses” means (a) all administrative and operating costs and expenses incurred by the Company, (b) all salaries
paid to officers of the Company and the Managing Member, and all accounting and legal expenses undertaken by the Company and the
Managing Member, in each case on behalf or for the benefit of the Company, (c) costs and expenses relating to the formation
and continuity of existence of the Company, including taxes, fees and assessments associated therewith, (d) costs and expenses
associated with compliance by the Company and the Managing Member (to the extent solely related to its capacity as Managing Member
of the Company) with laws, rules and regulations promulgated by any regulatory body, and (e) all other operating or administrative
costs of the Company and the Managing Member incurred in the ordinary course of its business on behalf of the Company.

 

    	 	6	 

     

    

 

“Affiliate”
means, with respect to any Person, (a) any Person directly or indirectly controlling or controlled by or under common control
with such Person or (b) any director, general partner, managing member or trustee of such Person or any Person referred to
in clause (a) above. For the purposes of this definition, “control” when used with respect to any Person
means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling”
and “controlled” have meanings correlative to the foregoing.

 

“Agreement”
means this Amended and Restated Limited Liability Company Agreement of Gunki Holdings, LLC, as it may be amended or supplemented
from time to time in accordance with the terms hereof.

 

“Assignee”
means a Person to whom one or more Units have been transferred, but who has not been admitted as a Member.

 

“Available
Cash” means, with respect to any period for which such calculation is being made, the amount of cash available for distribution
by the Company as determined by the Managing Member in its sole and absolute discretion.

 

“Business
Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized
or required by law to close.

 

“Bylaws”
means the Bylaws of Clipper, as amended, supplemented or restated from time to time.

 

“Capital
Account” means, with respect to any Member, the separate “book” account that the Company establishes and
maintains for such Member in accordance with Section 704(b) of the Code and Treasury Regulations Section 1.704-1(b)(2)(iv)
and such other provisions of Treasury Regulations Section 1.704-1(b) that must be complied with in order for the Capital Accounts
to be determined in accordance with the provisions of such Treasury Regulations. In furtherance of the foregoing, the Capital
Accounts will be maintained in compliance with Treasury Regulations Section 1.704-1(b)(2)(iv), and the provisions hereof
will be interpreted and applied in a manner consistent therewith. The Capital Account of each Member shall be increased by (a)
the Gross Asset Value of property (net of liabilities encumbering the property) as of the date of contribution of any property
contributed to the capital of the Company by such Member and (b) the amount of any Profits allocated to that member under Section
5.1(a). The Capital Account of each Member shall be decreased by (a) the amount of any Losses allocated to that Member under Section
5.1(b) and (b) the amount of any cash and the agreed Gross Asset Value of property (net of liabilities encumbering the property)
as of the date of distribution distributed by the Company to a Member. In the event that a Unit is transferred in accordance with
the terms of this Agreement, the Capital Account of the transferor, at the time of the transfer, attributable to the transferred
interest will carry over to the transferee.

 

“Capital
Contribution” means, with respect to any Member, an amount of cash or other consideration contributed by such Member
to the Company.

 

    	 	7	 

     

    

 

“Cash
Amount” means, with respect to a Tendering Member, an amount of cash equal to the product of (a) the Value of a
Clipper Common Share and (b) such Tendering Member’s Clipper Common Shares Amount determined as of the date of receipt
by the Managing Member of such Tendering Member’s Notice of Exchange or, if such date is not a Business Day, the immediately
preceding Business Day.

 

“Charter”
means the Articles of Incorporation of Clipper as filed with the State Department of Assessments and Taxation of Maryland, as
amended, supplemented or restated from time to time.

 

“Class A
Units” means Units that are designated by the Managing Member as Class A Units.

 

“Class
B Unitholder” means a holder of Class B Units.

 

“Class B
Units” means Units that are designated by the Managing Member as Class B Units.

 

“Clipper”
means Clipper Realty Inc., a Maryland corporation.

 

“Clipper
Common Share” means a share of Common Stock, $0.01 par value per share, of Clipper.

 

“Clipper
Common Shares Amount” means a number of Clipper Common Shares equal to the product of (a) the number of Tendered
Units and (b) the Adjustment Factor in effect on the Specified Exchange Date with respect to such Tendered Units; provided,
however, that in the event that Clipper issues to all holders of Clipper Common Shares as of a certain record date rights, options,
warrants or convertible or exchangeable securities entitling Clipper’s stockholders to subscribe for or purchase Clipper
Common Shares, or any other securities or property (collectively, the “Rights”), with the record date for such
Rights issuance falling within the period starting on the date of the Notice of Exchange and ending on the day immediately preceding
the Specified Exchange Date, which Rights will not be distributed before the relevant Specified Exchange Date, then the Clipper
Common Shares Amount shall also include such Rights that a holder of that number of Clipper Common Shares would be entitled to
receive, expressed, where relevant hereunder, in a number of Clipper Common Shares determined by Clipper in good faith.

 

“Clipper
Special Stock” means Special Voting Stock, $0.01 par value per share, of Clipper.

 

“Code”
means the Internal Revenue Code of 1986, as amended.

 

“Company”
is defined in the preamble to this Agreement.

 

“Company
Minimum Gain” has the meaning ascribed to the term “partnership minimum gain” in Treasury Regulations Section
1.704-2(d)(1).

 

“Continuing
Investors” means those persons listed on Schedule A on the date hereof.

 

    	 	8	 

     

    

 

“Depreciation”
means, with respect to any asset of the Company, for any Fiscal Year or other period, the depreciation, amortization or other
cost recovery deduction, as the case may be, allowed or allowable for U.S. federal income tax purposes in respect of such asset
for such Fiscal Year or other period; except that, if there is a difference between the Gross Asset Value and the adjusted tax
basis of such asset, Depreciation means “book depreciation or amortization” as determined under Treasury Regulations
Section 1.704-l(b)(2)(iv)(g)(3).

 

“Entity”
means any Person other than a natural person.

 

“Effective
Date” is defined in the preamble to this Agreement.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974 or any corresponding provisions of succeeding laws, as amended from
time to time.

 

“Exchange
Right” is defined in Section ‎10.1.

 

“Fiscal
Quarter” means the three-month period ending on March 31, June 30, September 30 or December 31 in
each year, except that the Managing Member may, from time to time, designate different fiscal quarters corresponding to any new
Fiscal Year designated by the Managing Member.

 

“Fiscal
Year” means the calendar year.

 

“Gross
Asset Value” means, with respect to any asset of the Company, such asset’s adjusted basis for U.S. federal income
tax purposes; provided, however that (a) if any asset is contributed to the Company, the initial Gross Asset Value of such asset
shall equal its fair market value on the date of contribution, (b) the Gross Asset Values of all assets of the Company shall have
been adjusted to equal their respective gross fair market values in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f)
in connection with the Capital Contribution of Clipper Realty L.P. to the Company and the admission of Clipper Realty L.P. as
a Member pursuant to the Investment Agreement, (c) the Gross Asset Value of all Company assets shall be adjusted to equal their
respective gross fair market values, as reasonably determined by the Managing Member, as of the following times: (i) the acquisition
of any additional Unit by any new or existing Member in exchange for more than a de minimis Capital Contribution, (ii)
the distribution by the Company to a Member of more than a de minimis amount of property as consideration for a Unit, (iii)
in connection with the liquidation of the Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g)
and (iv) and any other instance in which such adjustment is permitted under Treasury Regulations Section 1.704-1(b)(2)(iv), provided
however that adjustments pursuant to clauses (i), (ii) and (iv) above shall be made only if the Managing Member reasonably determines
that such adjustments are necessary or appropriate to reflect the relative economic interests of the Members of the Company. The
Gross Asset Values of the Company shall be adjusted thereafter by Depreciation.

 

    	 	9	 

     

    

 

“Incapacity”
or “Incapacitated” means, (a) as to any Member who is an individual, death, total physical disability
or entry by a court of competent jurisdiction adjudicating such Member incompetent to manage his or her person or his or her estate;
(b) as to any Member that is a corporation or limited liability company, the filing of a certificate of dissolution, or its
equivalent, or the revocation of the corporation’s charter; (c) as to any Member that is a partnership, the dissolution
and commencement of winding up of the partnership; (d) as to any Member that is an estate, the distribution by the fiduciary
of the estate’s entire interest in the Company; (e) as to any trustee of a trust that is a Member, the termination
of the trust (but not the substitution of a new trustee); or (f) as to any Member, the bankruptcy of such Member. For purposes
of this definition, bankruptcy of a Member shall be deemed to have occurred when (i) the Member commences a voluntary proceeding
seeking liquidation, reorganization or other relief of or against such Member under any bankruptcy, insolvency or other similar
law now or hereafter in effect, (ii) the Member is adjudged as bankrupt or insolvent, or a final and nonappealable order
for relief under any bankruptcy, insolvency or similar law now or hereafter in effect has been entered against the Member, (iii) the
Member executes and delivers a general assignment for the benefit of the Member’s creditors, (iv) the Member files
an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Member in
any proceeding of the nature described in clause (ii) above, (v) the Member seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator for the Member or for all or any substantial part of the Member’s properties,
(vi) any proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar
law now or hereafter in effect has not been dismissed within 120 days after the commencement thereof, (vii) the appointment
without the Member’s consent or acquiescence of a trustee, receiver or liquidator has not been vacated or stayed within
90 days of such appointment, or (viii) an appointment referred to in clause (vii) above is not vacated within 90 days
after the expiration of any such stay.

 

“Indemnified
Party” means (a) any Person made a party to a proceeding by reason of its status as (i) the Managing Member,
any successor thereto or the holder of Class A Units or (ii) an officer or director, as applicable, of the Company, the Managing
Member, Clipper or a subsidiary thereof (including by reason of being named a Person who is about to become a director) and (b) such
other Persons as the Managing Member may designate from time to time (whether before or after the event giving rise to potential
liability), in its sole and absolute discretion.

 

“Initial
Capital Contribution” is defined in Section 4.1.

 

“Interest”
means an equity interest in an Entity.

 

“IRS”
means the Internal Revenue Service.

 

“Liquidating
Event” is defined in Section 7.6.

 

“Majority
in Interest of the Members” means Members (excluding for this purpose the Managing Member) holding in the aggregate
50% or more of all outstanding Units (excluding for this purpose any Units directly or indirectly owned by, or on behalf of, the
Managing Member).

 

“Managing
Member” means the Operating Partnership.

 

“Member
Nonrecourse Debt” has the meaning for the term “partner nonrecourse debt” set forth in Treasury Regulations
Section 1.704-2(b)(4).

 

    	 	10	 

     

    

 

“Member
Nonrecourse Debt Minimum Gain” means an amount, 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, determined in accordance with
Treasury Regulations Section 1.704-2(i)(2).

 

“Member
Nonrecourse Deductions” has the meaning for the term “partner nonrecourse deductions” set forth in Treasury
Regulations Section 1.704-2(i). The amount of Member Nonrecourse Deductions with respect to a Member Nonrecourse Debt for a Fiscal
Year equals the excess, if any, (a) of the net increase, if any, in the amount of the Company Minimum Gain attributable to such
Member Nonrecourse Debt during such Fiscal Year, over (b) the aggregate amount of any distributions during such year to the Member
that bears the economic risk of loss for such Member Nonrecourse Debt to the extent such distributions are from proceeds of such
Member Nonrecourse Debt and are allocable to an increase in Member Nonrecourse Debt Minimum Gain attributable to such Member Nonrecourse
Debt, determined according to the provisions of Treasury Regulations Section 1.704-2(i).

 

“Members”
is defined in the preamble to this Agreement.

 

“National
Securities Exchange” means an exchange registered with the SEC under Section 6(a) of the Securities Exchange Act of
1934, as amended, or any other exchange (domestic or foreign, and whether or not so registered) designated by Clipper as a National
Securities Exchange.

 

“Nonrecourse
Deductions” has the meaning set forth for such term in Treasury Regulations Section 1.704-2(c). The amount of Nonrecourse
Deductions for a Fiscal Year equals the excess, if any, of the net increase, if any, in the amount of Company Minimum Gain in
respect of that Fiscal Year, over the aggregate amount of any distributions during that Fiscal Year of proceeds of a Nonrecourse
Liability that are allocable to an increase in Company Minimum Gain, determined according to the provisions of Treasury Regulations
Section 1.704-2(c).

 

“Nonrecourse
Liability” has the meaning set forth in Treasury Regulations Section 1.704-2(b)(3).

 

“Notice
of Exchange” means a Notice of Exchange in the form of Exhibit B.

 

“Operating
Partnership” means Clipper Realty L.P., a Delaware limited partnership, and its successors and assigns.

 

“OP
Unit” means a fractional share of the Operating Partnership that is generally entitled to a pro rata share of
distributions from the Operating Partnership.

 

“Original
LLC Agreement” is defined in the recitals of this Agreement.

 

“Person”
means any individual, corporation, sole proprietorship, partnership, limited liability company, cooperative, association, trust,
joint venture or other entity or organization, including a government or political subdivision or an agency or instrumentality
thereof.

 

    	 	11	 

     

    

  

“Profits”
or “Losses” shall mean, for each Fiscal Year or other period, the Company’s taxable income or loss for
such Fiscal Year or other period, determined in accordance with Section 703(a) of the Code (but including in taxable income or
loss, for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Section 703(a)(1)
of the Code), with the following adjustments:

 

(a)        any income of the
Company exempt from U.S. federal income tax and not otherwise taken into account in computing Profits or Losses pursuant to this
definition shall be added to such taxable income or loss;

 

(b)        in lieu of the
depreciation, amortization and other cost recovery deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such Fiscal Year or other period, computed in accordance with the definition of “Depreciation”
above;

 

(c)        any expenditures
of the Company described in Section 705(a)(2)(B) of the Code (or treated as expenditures described in Section 705(a)(2)(B) of
the Code pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(l)) and not otherwise taken into account in computing
Profits or Losses pursuant to this definition shall be subtracted from such taxable income or loss;

 

(d)        in the event the
Gross Asset Value of any asset of the Company is adjusted, the amount of such adjustment shall be taken into account as gain or
loss from the disposition of such Company asset for purposes of computing Profits or Losses;

 

(e)        gain or loss resulting
from any disposition of any asset of the Company with respect to which gain or loss is recognized for U.S. federal income tax
purposes shall be computed by reference to the Gross Asset Value of the asset disposed of, notwithstanding the fact that the adjusted
basis of such Company asset differs from its Gross Asset Value.

 

Profits and
Losses shall be further determined and adjusted in accordance with the Treasury Regulations issued under Section 704 of the Code.

 

“Properties”
or “Property” means any real property in which the Company, directly or indirectly, holds or acquires ownership
of a fee, mortgage or leasehold interest.

 

“Publicly
Traded” means listed or admitted to trading on the New York Stock Exchange, NYSE MKT, the NASDAQ Stock Market or another
National Securities Exchange or any successor of the foregoing.

 

“Record
Date” is defined in Section ‎5.2(c) hereof.

 

“REIT”
means a real estate investment trust qualifying under Code Section 856.

 

“Rights”
is defined in the definition of “Clipper Common Shares Amount”.

 

“SEC”
means the Securities and Exchange Commission. 

 

    	 	12	 

     

    

 

“Securities
Act” means the Securities Act of 1933 or any successor act.

 

“Specified
Exchange Date” means the 10th Business Day following receipt by the Managing Member of a Notice of Exchange;
provided, that, if the Clipper Common Shares are not Publicly Traded, the Specified Exchange Date means the 30th Business
Day following receipt by the Managing Member of a Notice of Exchange.

 

“Substituted
Member” means any Person admitted to the Company as a Member pursuant to Section 8.1.

 

“Tax
Matters Member” is defined in Section 5.5.

 

“Tax
Protection Agreement” means that certain Tax Protection Agreement, dated as of August 3, 2015 by and among Clipper,
Clipper Realty L.P., a Delaware limited partnership, the Renaissance Equity Holdings LLC, a New York limited Liability Company,
Berkshire Equity LLC, a Delaware limited liability company, the Company, 50/53 JV LLC, a Delaware limited liability company and
the members of Renaissance Equity Holdings LLC, Berkshire Equity LLC, the Company and 50/53 JV LLC listed on Schedules A-D thereto.

 

“Tendered
Units” is defined in Section 10.1.

 

“Tendering
Member” is defined in Section 10.1.

 

“Terminating
Capital Transaction” means any sale or other disposition of all or substantially all of the assets of the Company or
a related series of transactions that, taken together, result in the sale or other disposition of all or substantially all of
the assets of the Company.

 

“Transfer,”
means any sale, assignment, bequest, conveyance, devise, gift (outright or in trust), pledge, encumbrance, hypothecation, mortgage,
exchange, transfer or other disposition or act of alienation, whether voluntary or involuntary or by operation of law; provided,
however, that “Transfer” does not include any exchange of Class B Units pursuant to the exercise of the Exchange Right.
The terms “Transferred” and “Transferring” have correlative meanings.

 

“Treasury
Regulations” means the regulations promulgated from time to time under the Code or, if no final or temporary regulations
with respect to a tax issue are then in effect, proposed regulations then in effect if approved by the Managing Member.

 

“Units”
mean membership interests in the Company (including Class A Units and Class B Units). Each Unit represents a limited liability
company interest with the designations, preferences and relative, participating, optional or other special rights, powers and
duties provided in this Agreement and by the Act.

 

    	 	13	 

     

    

 

“Value”
means, on any date of determination with respect to a Clipper Common Share, the average of the daily Market Prices for ten consecutive
trading days immediately preceding the date of determination; with respect to an exercise of the Exchange Right, the “date
of determination” shall be the date of receipt by the Managing Member of a Notice of Exchange or, if such date is not a
Business Day, the immediately preceding Business Day. The term “Market Price” on any date shall mean, with
respect to the Clipper Common Shares, the Closing Price for such Clipper Common Shares on such date. The “Closing Price”
on any date shall mean the last sale price for Clipper Common Shares, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, for such Clipper Common Shares, in either case as reported
in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if such Clipper Common Shares are not listed or admitted to trading on the New York Stock Exchange, as
reported on the principal consolidated transaction reporting system with respect to securities listed on the principal National
Securities Exchange on which such Clipper Common Shares are listed or admitted to trading or, if such Clipper Common Shares are
not listed or admitted to trading on any National Securities Exchange, the last quoted price, or, if not so quoted, the principal
other automated quotation system that may then be in use or, if such Clipper Common Shares are not quoted by any such organization,
the average of the closing bid and asked prices as furnished by a professional market maker making a market in such Clipper Common
Shares selected by the Board of Directors of Clipper or, in the event that no trading price is available for such Clipper Common
Shares, the fair market value of the Clipper Common Shares, as determined in good faith by the Board of Directors of Clipper.
In the event that the Clipper Common Shares Amount includes Rights that a holder of Clipper Common Shares would be entitled to
receive, then the Value of such Rights shall be determined by Clipper, acting in good faith on the basis of such quotations and
other information as it considers, in its reasonable judgment, appropriate.

 

1.2        Exhibits,
Etc. References to an “Exhibit” or to a “Schedule” are, unless otherwise specified, to one of the
Exhibits or Schedules of this Agreement and references to an “Article” or a “Section” are, unless otherwise
specified, to one of the Articles or Sections of this Agreement.

 

ARTICLE
II

ORGANIZATION

 

2.1        Limited
Liability Company. The Company was formed as a limited liability company under the Act pursuant to a Certificate of Formation,
filed with the Secretary of State of the State of Delaware on January 10, 2003. To the extent permitted by the Act, the provisions
of this Agreement shall override the provisions of the Act in the event of any inconsistency between them.

 

2.2        Name.
The name of the Company is Gunki Holdings, LLC.

 

2.3        Character
of the Business. The purpose of the Company is to, directly or indirectly, through one ore more subsidiaries, acquire, hold,
own, develop, redevelop, construct, improve, maintain, operate, manage, sell, lease, sub-lease, rent, transfer, finance, refinance,
encumber, mortgage, convey, exchange and otherwise dispose of, deal with, foreclose upon or exercise rights with respect to, any
of the Properties and any other real, personal or intangible property; to exercise all of the powers of a partner, member or owner
of an equity interest in the subsidiaries of the Company; to undertake such other activities as may be necessary, advisable, desirable
or convenient to carry out the foregoing purposes; and to undertake such other activities as may be undertaken by the Company
in accordance with the Act.

 

    	 	14	 

     

    

 

2.4         Location
of the Principal Place of Business. The location of the principal place of business of the Company will be at 4611 Twelfth
Avenue, Brooklyn, New York 11219, or such other location as may be selected from time to time by the Managing Member.

 

2.5         Registered
Agent and Registered Office. The registered agent of the Company will be United Corporate Services, Inc. or such other Person
as the Managing Member may select. The registered office of the Company will be 874 Walker Road, Suite C, Dover, Delaware 19904,
or such other location as the Managing Member may select.

 

2.6         Original
LLC Agreement; Members.

 

(a)        This
Agreement is adopted by the Members and hereby amends and restates the Original LLC Agreement in its entirety. The Original LLC
Agreement shall be deemed superseded in all respects by this Agreement and shall have no further force or effect from and after
the Effective Date.

 

(b)        The
Members agree to continue the Company as a limited liability company under the Act, upon the terms and conditions set forth in
this Agreement, as amended, supplemented or restated from time to time.

 

(c)        Schedule
A shall constitute the record list of the Members for all purposes of this Agreement. The name and mailing address of each
Member shall be set forth in the books and records of the Company, as may be updated from time to time.

 

2.7        Tax
Status of Company. Each of Company and its Members agree to treat the Company as a partnership for U.S. tax purposes, and
to take no position or make any election inconsistent with this treatment on its respective U.S. federal, state and local tax
returns and related correspondences with any taxing authority, unless required to do so by applicable law.

 

ARTICLE
III

TERM

 

The
term of the Company began upon the filing of Certificate of Formation with the Secretary of State of the State of Delaware, and
will continue until the Company is dissolved and its affairs wound up in accordance with the provisions of this Agreement or the
Act. The Company will have a perpetual existence unless terminated as stated above.

 

ARTICLE
IV

CAPITAL CONTRIBUTIONS

 

4.1        Initial
Capital Contributions. Each Member has made, or concurrently with its acceptance as a Member will make, a Capital
Contribution to the Company as set forth under the column entitled “Capital Contributions” in Schedule B
(the “Initial Capital Contribution”), and, in consideration thereof, the Company has issued or will issue
to each such Member the number of Class A Units, Class B Units or other Units set forth opposite such Member’s name in Schedule
B. Schedule B incorporates and supersedes any and all interest of the Members pursuant to the Original LLC
Agreement and any capital contributions which may have been made pursuant to the Original LLC Agreement.

 

    	 	15	 

     

    

 

4.2        Capital
Accounts. The Company will establish and maintain a separate Capital Account for each Member. Except as provided in Section ‎5.2
or Section ‎7.2, no Member will have the right to the distribution or payment of
its Capital Account.

 

4.3        Liability
for Deficits in Capital Accounts. At no time during the term of the Company or upon dissolution and liquidation thereof shall
a Member with a negative balance in its Capital Account have any obligation to the Company or the other Members to restore such
negative balance, except as may be required by non-waivable provisions of applicable law.

 

4.4        Future
Capital Contributions. No Member will be required to make any loans to the Company or any Capital Contribution, other than
the Initial Capital Contributions, without such Member’s prior written consent. No Member will be permitted to make any
such additional Capital Contribution unless requested to do so by the Managing Member. Members do not have the right to participate,
on a pro rata basis or otherwise, in any such additional Capital Contributions.  

 

4.5        No
Interest; No Return. No Member will be entitled to interest on its Capital Contributions or its Capital Account. Except as
provided herein or by law, no Member will have any right to demand or receive the return of its Capital Contribution or its Capital
Account from the Company or from any of the other Members.

 

4.6        Units.
From and after the Effective Date, until such time as additional classes or series of Units are created pursuant to Section 4.6
below, the Company shall have two classes of Units, entitled “Class A Units” and “Class B Units.” Class
A Units may be held only by the Managing Member.

 

4.7        Issuances
of Additional Units. Notwithstanding Section 6.4(b) hereof, but subject to Section 6.4(c), the Managing Member is
hereby authorized to cause the Company to issue additional Units, for any Company purpose, at any time or from time to time,
to the Members or to other Persons, and to admit such Persons as additional Members, for such consideration and on such terms
and conditions as shall be established by the Managing Member in its sole and absolute discretion, all without the approval
of any other Member. Without limiting the foregoing, the Managing Member is expressly authorized to cause the Company to
issue Units (a) upon the conversion, redemption or exchange of any debt, Units or other securities issued by the
Company, (b) for less than fair market value, so long as the Managing Member concludes in good faith that such issuance
is in the best interests of the Company (taking into account the Company’s status as a subsidiary of Clipper), and
(c) in connection with any merger of any other Person into the Company or any subsidiary of the Company if the
applicable merger agreement provides that Persons are to receive Units in exchange for their interests in the Person merging
into the Company or any subsidiary of the Company. Any Unit that is not specifically designated by the Managing Member as
being of a particular class or series shall be deemed to be a Class B Unit. Subject to Section 6.4(c) and applicable law, any
additional Units may be issued in one or more classes, or one or more series of any of such classes, with such designations,
preferences and relative, participating, optional or other special rights, powers and duties as shall be determined by the
Managing Member, in its sole and absolute discretion without the approval of any other Member, and set forth in a written
document thereafter attached to and made an exhibit to this Agreement which exhibit shall be an amendment to this Agreement
and shall be incorporated herein by this reference. Without limiting the generality of the foregoing, the Managing Member
shall have authority to specify (i) the allocations of items of Company income, gain, loss, deduction and credit to each
such class or series of Units; (ii) the right of each such class or series of Units to share (on a pari passu,
junior or preferred basis) in distributions; (iii) the rights of each such class or series of Units upon dissolution and
liquidation of the Company; (iv) the voting rights, if any, of each such class or series of Units; and (v) the
conversion, redemption or exchange rights applicable to each such class or series of Units. Upon the issuance of any
additional Units, the Managing Member shall cause such issuance to be reflected in the books and records of the Company,
including by amending Schedule B.

 

    	 	16	 

     

    

 

4.8        Units
Have Not Been Registered. Each of the Members acknowledges that the Units were issued in transactions that were exempt from
the registration requirements of the Securities Act, have not been registered under any federal or state securities laws and,
as a result thereof and in addition to the limitations on Transfer set forth in Article VIII, may not be sold or otherwise
Transferred unless such Transfer is exempt from registration under such laws or the Transfer is registered under such laws.

 

4.9        
 No Preemptive Rights. No Person, including any Member or Assignee shall have any preemptive, preferential, participation
or similar right or rights to subscribe for or acquire any Units.

 

ARTICLE
V

 

ALLOCATIONS, DISTRIBUTIONS, AND OTHER TAX AND ACCOUNTING MATTERS

 

5.1         Allocations.

 

(a)        Profits.
After giving effect to the special allocations set forth in Exhibit A, Profits shall be allocated, (i) first, to the Managing
Member with respect to the Class A Units held by the Managing Member to the extent that Losses previously allocated to the Managing
Member pursuant to Section 5.1(b)(ii) hereof exceed Profits previously allocated to the Managing Member pursuant to this Section
5.1(a)(i); (ii) second, to the Class B Unitholders to the extent that Losses previously allocated to such Class B Unitholders
pursuant to Section 5.1(b)(i) hereof exceed Profits previously allocated to the Class B Unitholders pursuant to this Section 5.1(a)(ii);
(iii) third, to the Class B Unitholders in a manner consistent with the distributions that each such Member is entitled to receive
pursuant to Section 5.2(b) and (iv) thereafter, to the Managing Member with respect to the Class A Units held by the Managing
Member.

 

(b)        Losses.
After giving effect to the special allocations set forth in Exhibit A, Losses shall be allocated, (i) first, to the Class
B Unitholders in proportion to the number of Class B Units held; provided, however, that Losses shall not be allocated to any
such Class B Unitholder pursuant to this Section 5.1(b)(i) to the extent that such allocation would cause such Class B Unitholder
to have an Adjusted Capital Account Deficit (or increase any existing Adjusted Capital Account Deficit) and shall be allocated
to and among the Class B Unitholders without Adjusted Capital Account Deficits and (ii) thereafter, to the Managing Member with
respect to the Class A Units held by the Managing Member.

 

    	 	17	 

     

    

 

(c)        Allocations
for Tax Purposes. Except as otherwise provided in this Section 5.1, the taxable income or loss of the Company (and items thereof)
shall be allocated among the Members in the same manner as the corresponding items of Profits and Losses and separate items of
income, gain, loss and deduction (excluding items for which there are no related tax items) are allocated among the Members for
Capital Account purposes; provided, that, in the case of any Company asset the Gross Asset Value of which differs from its adjusted
tax basis for U.S. federal income tax purposes, income, gain, loss and deduction with respect to such asset shall be allocated
solely for income tax purposes in accordance with the principles of Section 704(c) of the Code and the Treasury Regulations thereunder
(in any manner determined by the Managing Member in its sole discretion that constitutes a “reasonable method,” except
as provided in the Tax Protection Agreement) so as to take account of the difference between the Gross Asset Value and the adjusted
tax basis of such asset.

 

(d)        Nonrecourse
Debt and Nonrecourse Deductions. Throughout the term of the Company,
the Nonrecourse Liabilities of the Company (other than Member Nonrecourse Debt) and the Nonrecourse Deductions of the Company
(other than Member Nonrecourse Deductions) shall be allocated for tax purposes among the Members in accordance with any permissible
method determined by the Managing Member.

 

(e)        Allocations
Governed by Tax Protection Agreement. Notwithstanding anything to the contrary in this Section 5.1, to the extent of a conflict
between the provisions of this Section 5.1 and the Tax Protection Agreement, the Tax Protection Agreement shall control.

 

5.2         Distributions.

 

(a)        The
Managing Member may cause the Company to distribute at least quarterly, within forty-five days of the end of a Fiscal Quarter
all, or such portion as the Managing Member may in its sole and absolute discretion determine, of Available Cash generated by
the Company during such Fiscal Quarter to Members on the Record Date with respect to such Fiscal Quarter.

 

(b)        Each
Class B Unitholder will be entitled, with respect to such Class B Unitholder’s Class B Units, to a preferred distribution
equal to the lesser of (i) the amount that would be distributed by the Operating Partnership to the Class B LLC Unitholder if
such Class B Unitholder held the same number of OP Units in the Operating Partnership as the number of Class B Units held by such
Class B Unitholder and (ii) the product of all of the Available Cash generated by the Company during the applicable Fiscal Quarter
and a fraction, the numerator of which is the number of Class B Units held by such Class B Unitholder and the denominator of which
is the total number of outstanding Class B Units. The Managing Member will be entitled to any remaining cash flow of the Company
with respect to the Class A Units held by the Managing Member.

 

    	 	18	 

     

    

 

(c)        Only
Members that, according to the books and records of the Company, are holders of Units as of the close of business on the last
day of the last Fiscal Quarter prior the date on which a distribution under this Section 5.2 is made (the “Record
Date”) will be entitled to receive the distribution. If Units are transferred of record prior to the close of business
on the last day of a Fiscal Quarter, the transferor will be entitled to receive all distributions with respect to such Units for
any Fiscal Quarter ended prior to the transfer, and the transferee will be entitled to receive all distributions with respect
to the Units for the Fiscal Quarter in which the transfer is made.

 

5.3        Books
of Account. At all times during the continuance of the Company, the Managing Member will maintain or cause to be maintained
books of account in accordance with this Agreement, including Schedule B. In addition, the Company will keep all records
as required to be kept pursuant to the Act. Each Member will at all reasonable times have access to such books and records and
the right to inspect the same.

 

5.4        Tax
Elections and Returns. Except as otherwise provided in this Agreement, all elections required or permitted to be made by the
Company under any applicable tax law will be made by the Managing Member in its sole discretion. The Managing Member will prepare
and file, or cause to be prepared and filed, all state and federal tax returns on a timely basis. The Managing Member will, on
a timely basis, provide the Members with the tax information required by them to prepare their tax returns, including a Form K-1.
The taxable year of the Company shall be its Fiscal Year.

 

5.5        Tax
Matters Member. The Managing Member is hereby designated as the tax
matters partner (the “Tax Matters Member”) of the Company for U.S. federal income tax purposes. The Tax Matters
Member is authorized, but not required: (a) to enter into any settlement with the IRS with respect to any administrative or judicial
proceedings for the adjustment of Company items required to be taken into account by a Member for income tax purposes (such administrative
proceedings being referred to as a “tax audit” and such judicial proceedings being referred to as “judicial
review”), and in the settlement agreement the Tax Matters Member may expressly state that such agreement shall bind all
Members, except that such settlement agreement shall not bind any Member (i) who (within the time prescribed pursuant to the Code
and Treasury Regulations) files a statement with the IRS providing that the Tax Matters Member shall not have the authority to
enter into a settlement agreement on behalf of such Member or (ii) who is a “notice partner” (as defined in Code Section
6231) or a member of a “notice group” (as defined in Code Section 6223(b)(2)); (b) in the event that a notice of a
final administrative adjustment at the Company level of any item required to be taken into account by a Member for tax purposes
(a “final adjustment”) is mailed to the Tax Matters Member, to seek judicial review of such final adjustment, including
the filing of a petition for readjustment with the United States Tax Court or the United States Claims Court, or the filing of
a complaint for refund with the District Court of the United States for the district in which the Company’s principal place
of business is located; (c) to intervene in any action brought by any other Member for judicial review of a final adjustment;
(d) to file a request for an administrative adjustment with the IRS at any time and, if any part of such request is not allowed
by the IRS, to file an appropriate pleading (petition or complaint) for judicial review with respect to such request; (e) to enter
into an agreement with the IRS to extend the period for assessing any tax that is attributable to any item required to be taken
into account by a Member for tax purposes, or an item affected by such item; and (f) to take any other action on behalf of the
Members in connection with any tax audit or judicial review proceeding to the extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by the Tax Matters Member in connection with any such proceeding, except
to the extent required by law, is a matter in the sole and absolute discretion of the Tax Matters Member and the provisions relating
to indemnification of the Managing Member set forth in Section 6.8 hereof shall be fully applicable to the Tax Matters Member
in its capacity as such.

 

    	 	19	 

     

    

 

ARTICLE
VI

 

RIGHTS,
DUTIES AND RESTRICTIONS OF THE MANAGING MEMBER

 

6.1         Expenditures
by the Company. The Managing Member is hereby authorized to pay all Administrative Expenses. All such Administrative Expenses
will be made on behalf of the Company, and the Managing Member will be entitled to reimbursement by the Company for any such Administrative
Expenses paid by the Managing Member on behalf of the Company. The Company will also assume, and pay when due, all Administrative
Expenses.

 

6.2         Powers
and Duties of Managing Member.

 

(a)        Except
as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Company are and
shall be exclusively vested in the Managing Member, and no other Member shall have any right to participate in or exercise control
or management power over the business and affairs of the Company. The Managing Member may not be removed by the Members with or
without cause, except with the consent of the Managing Member. In addition to the powers now or hereafter granted to the Managing
Member under applicable law or that are granted to the Managing Member under any other provision of this Agreement, the Managing
Member, subject to the other provisions hereof including, the definition of Managing Member and Section 6.4, shall have full power
and authority to do all things deemed necessary or desirable by it to conduct the business of the Company and to effectuate the
purposes set forth in Section 2.3 hereof, including:

 

(i)        the
making of any expenditures, the lending or borrowing of money and making prepayments on loans the assumption or guarantee of,
or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness (including the securing
of same by deed to secure debt, mortgage, deed of trust or other lien or encumbrance on the Company’s assets) and the incurring
of any obligations that it deems necessary for the conduct of the activities of the Company;

 

(ii)        the
making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having
jurisdiction over the business or assets of the Company;

 

(iii)        subject
to Section 8.2 hereof, the acquisition, sale, lease, transfer, exchange or other disposition of any, all or substantially all
of the assets of the Company (including, but not limited to, the exercise or grant of any conversion, option, privilege or subscription
right or any other right available in connection with any assets at any time held by the Company) or the merger, consolidation,
reorganization or other combination of the Company with or into another entity;

 

    	 	20	 

     

    

 

(iv)        the
mortgage, pledge, encumbrance or hypothecation of any assets of the Company, the assignment of any assets of the Company in trust
for creditors or on the promise of the assignee to pay the debts of the Company, the use of the assets of the Company (including
cash on hand) for any purpose consistent with the terms of this Agreement and on any terms that it sees fit, including the financing
of the operations and activities of the Managing Member, the Company or any of the Company’s subsidiaries, the lending of
funds to other Persons (including the Company’s subsidiaries) and the repayment of obligations of the Company, its subsidiaries
and any other Person in which the Company has an equity investment, and the making of capital contributions to and equity investments
in the Company’s subsidiaries;

 

(v)        the
use of the assets of the Company (including cash on hand) for any purpose consistent with the terms of this Agreement and on any
terms it sees fit, including the financing of the conduct of the operations of the Managing Member, the Company or any of the
Company’s subsidiaries, the lending of funds to other Persons (including the Managing Member and its subsidiaries and the
Company’s subsidiaries) and the repayment of obligations of the Company and its subsidiaries and any other Person in which
the Company has an equity investment and the making of capital contributions to its subsidiaries;

 

(vi)        the
management, operation, development, redevelopment, leasing, remodeling, provision of services, repair, alteration, maintenance,
demolition, replacement or improvement of any Property or other asset of the Company or any subsidiary;

 

(vii)        the
negotiation, execution and performance of any contracts, leases, conveyances or other instruments that the Managing Member considers
useful or necessary to the conduct of the Company’s operations or the implementation of the Managing Member’s powers
under this Agreement, including contracting with contractors, developers, consultants, government authorities, accountants, legal
counsel, other professional advisors and other agents and the payment of their expenses and compensation out of the Company’s
assets;

 

(viii)        the
distribution of Company cash or other Company assets in accordance with this Agreement, the holding, management, investment and
reinvestment of cash and other assets of the Company and the collection and receipt of revenues, rents and income of the Company;

 

(ix)        the
maintenance of such insurance (including directors and officers insurance) for the benefit of the Company and the Members (including
the Managing Member) as the Managing Member deems necessary or appropriate, including (i) casualty, liability and other insurance
on the Properties and (ii) liability insurance for Indemnified Parties hereunder;

 

(x)        the
formation of, or acquisition of an interest in, and the contribution of property to, any further limited or general partnerships,
limited liability companies, joint ventures or other relationships that the Managing Member deems desirable (including the acquisition
of interests in, and the contributions of property to, any subsidiary and any other Person in which it has an equity investment
from time to time);

 

    	 	21	 

     

    

 

(xi)        the
filing of applications, communicating and otherwise dealing with any and all governmental agencies having jurisdiction over, or
in any way affecting, the Company’s assets or any other aspect of the Company’s business;

 

(xii)        the
taking of any action necessary or appropriate to comply with all regulatory requirements applicable to the Company in respect
of its business, including preparing or causing to be prepared all financial statements required under applicable regulations
and contractual undertakings;

 

(xiii)        the
control of any matters affecting the rights and obligations of the Company, including the settlement, compromise, submission to
arbitration or any other form of dispute resolution, or abandonment, of any claim, cause of action, liability, debt or damages,
due or owing to or from the Company, the commencement or defense of suits, legal proceedings, administrative proceedings, arbitrations
or other forms of dispute resolution, and the representation of the Company in all suits or legal proceedings, administrative
proceedings, arbitrations or other forms of dispute resolution, the incurring of legal expense, and the indemnification of any
Person against liabilities and contingencies to the extent permitted by law;

 

(xiv)        the
undertaking of any action in connection with the Company’s direct or indirect investment in any subsidiary or any other
Person (including the contribution or loan of funds by the Company to such Persons);

 

(xv)        except
as otherwise specifically set forth in this Agreement, the determination of the fair market value of any Company property distributed
in-kind using such reasonable method of valuation as it may adopt; provided, that such methods are otherwise consistent with the
requirements of this Agreement;

 

(xvi)        the
exercise, directly or indirectly, through any attorney-in-fact acting under a general or limited power-of-attorney, of any right,
including the right to vote, appurtenant to any asset or investment held by the Company;

 

(xvii)        the
exercise of any of the powers of the Managing Member enumerated in this Agreement on behalf of or in connection with any subsidiary
of the Company or any other Person in which the Company has a direct or indirect interest, or jointly with any such subsidiary
or other Person;

 

(xviii)        the
exercise of any of the powers of the Managing Member enumerated in this Agreement on behalf of any Person in which the Company
does not have an interest, pursuant to contractual or other arrangements with such Person;

 

    	 	22	 

     

    

 

(xix)        the
making, execution and delivery of any and all deeds, leases, notes, deeds to secure debt, mortgages, deeds of trust, security
agreements, conveyances, contracts, guarantees, warranties, indemnities, waivers, releases or legal instruments or agreements
in writing necessary or appropriate in the judgment of the Managing Member for the accomplishment of any of the powers of the
Managing Member enumerated in this Agreement;

 

(xx)        the
issuance of additional Units, as appropriate and in the Managing Member’s sole and absolute discretion, in connection with
Capital Contributions by Members pursuant to Section 4.7 hereof;

 

(xxi)        the
selection of agents, outside attorneys, accountants, consultants and contractors of the Company, the determination of their compensation
and other terms of hiring;

 

(xxii)        the
distribution of cash to acquire Class B Units held by a Member in connection with such Member’s exercise of the Exchange
Right;

 

(xxiii)        maintaining,
or causing to be maintained, the books and records of the Company to reflect accurately at all times the Capital Contributions
of and Units issued to Members as the same are adjusted from time to time to the extent necessary to reflect redemptions, Capital
Contributions, the issuance of Units, the admission of any Member or otherwise;

 

(xxiv)        the
collection and receipt of revenues and income of the Company;

 

(xxv)        an
election to dissolve the Company pursuant to Section 7.6(d) hereof; and

 

(xxvi)        the
taking of any action necessary or appropriate to enable Clipper to qualify as a REIT (so long as Clipper desires to maintain or
restore its qualification as a REIT).

 

(b)        At
all times from and after the date hereof, the Managing Member may cause the Company to obtain and maintain (i) casualty, liability
and other insurance on the Properties and (ii) liability insurance for the Indemnified Parties hereunder.

 

(c)        At
all times from and after the date hereof, the Managing Member may cause the Company to establish and maintain working capital
and other reserves in such amounts as the Managing Member, in its sole and absolute discretion, deems appropriate and reasonable
from time to time.

 

(d)        In
exercising its authority under this Agreement, the Managing Member may, but shall be under no obligation to, take into account
the tax consequences to any Member (including the Managing Member) of any action taken (or not taken) by it. Except as may be
provided in a separate written agreement between the Company and the Members, the Managing Member and the Company shall not have
liability to any other Member under any circumstances as a result of a tax liability incurred by such Member as a result of an
action (or inaction) by the Managing Member pursuant to its authority under this Agreement provided, that the Managing Member
has acted in good faith and pursuant to its authority under this Agreement.

 

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6.3         Certificate
of Formation. To the extent that such action is determined by the Managing Member to be reasonable and necessary or appropriate,
the Managing Member shall file amendments to and restatements of the Certificate of Formation and do all the things to maintain
the Company as a limited liability company under the laws of the State of Delaware and each other state, the District of Columbia
or any other jurisdiction, in which the Company may elect to do business or own property. Except as otherwise required under the
Act, the Managing Member shall not be required, before or after filing, to deliver or mail a copy of the Certificate of Formation
or any amendment thereto to any Member. The Managing Member shall use all reasonable efforts to cause to be filed such other certificates
or documents as may be reasonable and necessary or appropriate for the formation, continuation, qualification and operation of
a limited liability company in the State of Delaware and any other state, or the District of Columbia or other jurisdiction, in
which the Company may elect to do business or own property.

 

6.4         Restrictions
on Managing Member’s Authority.

 

(a)        The
Managing Member may not take any action in contravention of an express prohibition or limitation of this Agreement without the
written consent of a Majority in Interest of the Members.

 

(b)        The
Managing Member shall not, without the written consent of a Majority in Interest of the Members, except as provided in Sections
4.7 and 6.4(c) hereof, amend, modify or terminate this Agreement.

 

(c)        Notwithstanding
Section 6.4(b), the Managing Member shall have the exclusive power, without the prior consent of the other Members, to amend this
Agreement as may be required to facilitate or implement any of the following purposes:

 

(i)        to
add to the obligations of the Managing Member or surrender any right or power granted to the Managing Member or any Affiliate
of the Managing Member for the benefit of the other Members;

 

(ii)        to
reflect the admission, substitution or withdrawal of Members or the termination of the Company in accordance with this Agreement,
and to cause the Company to amend its books and records in connection with such admission, substitution or withdrawal;

 

(iii)        
to reflect a change that is of an inconsequential nature or does not adversely affect the Members as such in any material respect,
or to cure any ambiguity, correct or supplement any provision in this Agreement not inconsistent with law or with other provisions,
or make other changes with respect to matters arising under this Agreement that will not be inconsistent with law or with the
provisions of this Agreement;

 

(iv)        to
satisfy any requirements, conditions or guidelines contained in any order, directive, opinion, ruling or regulation of a federal
or state agency or contained in federal or state law;

 

    	 	24	 

     

    

  

(v)        to
set forth or amend the designations, preferences, conversion or other rights, voting powers, restrictions, limitations as to distributions,
qualifications or terms or conditions of exchange of the holders of any additional Units issued or established pursuant to this
Agreement;

 

(vi)        to
reflect such changes as are reasonably necessary for Clipper to maintain or restore its qualification;

 

(vii)        to
modify either or both the manner in which items of Profits or Losses are allocated pursuant to Section 5.2 or the manner in which
Capital Accounts are computed (but only to the extent set forth in the definition of “Capital Account” or contemplated
by the Code or the Treasury Regulations);

 

(viii)        to
issue additional Units in accordance with Section 4.7; and

 

(ix)        to
reflect any other modification to this Agreement as is reasonably necessary for the business or operations of the Company or the
Managing Member and which does not violate Section 6.4(d);

 

The
Managing Member will provide notice to the other Members whenever any action under this Section 6.4(c) is taken.

 

(d)        Notwithstanding
Section 6.4(c) hereof, this Agreement shall not be amended, and no action may be taken by the Managing Member, without the consent
of each Member adversely affected thereby, if such amendment or action would (i) modify the limited liability of a Member, (ii)
alter the rights of any Member to receive the distributions to which such Member is entitled, pursuant to Section 5.2 hereof,
(iii) alter or modify the Exchange Rights, or amend or modify any related definitions (provided, however, that the Managing Member
may update the schedules to this Agreement as necessary to reflect an exercise of the Exchange Right), (iv) alter or modify Section
8.2 hereof or (v) amend this Section 6.4(d). Further, no amendment may alter the restrictions on the Managing Member’s authority
set forth elsewhere in this Section 6.4 without the consent specified therein. Any such amendment or action consented to by any
Member shall be effective as to that Member, notwithstanding the absence of such consent by any other Member.

 

6.5        Reliance
by Third Parties. Any Person dealing with the Company will be entitled to assume that the Managing Member has full power
and authority to encumber, sell or otherwise use any and all assets of the Company and to enter into any contracts on behalf
of the Company, and such Person will be entitled to deal with the Managing Member as if it were the Company’s sole
party in interest, both legally and beneficially. Each Member hereby waives any and all defenses or other remedies that may
be available against such Person to contest, negate or disaffirm any action of the Managing Member in connection with any
such dealing. In no event will any Person dealing with the Managing Member or its representatives be obligated to ascertain
that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action
of the Managing Member or its representatives. Each certificate, document or other instrument executed on behalf of the
Company by the Managing Member will be conclusive evidence in favor of any Person relying thereon or claiming thereunder that
(a) at the time of the execution and effect of such certificate, document or instrument, this Agreement (or prior versions
thereof) was in full force and effect; (b) the Managing Member was authorized and empowered to execute and deliver such
certificate, document or instrument on behalf of the Company; and (c) such certificate, document or instrument is
binding upon the Company.

 

    	 	25	 

     

    

 

6.6          Title
Holder. To the extent allowable under applicable law, title to all or any part of the assets of the Company may be held in
the name of the Company or in the name of any other Person that is (a) a special purpose Entity, (b) wholly owned, directly
or indirectly, by the Company and (c) disregarded as a separate Entity for federal tax purposes.

 

6.7          Compensation
of the Managing Member. The Managing Member will not be entitled to any compensation for services rendered to the Company
solely in its capacity as Managing Member, except with respect to reimbursement of expenditures pursuant to Section 6.1.

 

6.8          Indemnification.

 

(a)        The
Company shall, to the maximum extent permitted by applicable law in effect from time to time, indemnify, and, without requiring
a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of
final disposition of a proceeding to each Indemnified Party; provided, however, that the Company shall not indemnify an Indemnified
Party (1) for material acts or omissions that were committed in bad faith or were the result of active and deliberate dishonesty,
(2) for any transaction for which such Indemnified received an improper personal benefit in money, property or services in violation
or breach of any provision of this Agreement, or (3) in the case of any criminal proceeding, the Indemnified Party had reasonable
cause to believe that the act or omission was unlawful. Without limitation, the foregoing indemnity shall extend to any liability
of any Indemnified Party, pursuant to a loan guaranty or otherwise (unless otherwise provided by the terms of any such guaranty
or other instrument), for any indebtedness of the Company or any subsidiary of the Company (including any indebtedness which the
Company or any subsidiary of the Company has assumed or taken subject to), and the Managing Member is hereby authorized and empowered,
on behalf of the Company, to enter into one or more indemnity agreements consistent with the provisions of this Section 6.8 in
favor of any Indemnified Party having or potentially having liability for any such indebtedness. The termination of any proceeding
by judgment, order or settlement does not create a presumption that the Indemnified Party did not meet the requisite standard
of conduct set forth in this Section 6.8(a). The termination of any proceeding by conviction of an Indemnified Party or upon a
plea of nolo contendere or its equivalent by an Indemnified Party, or an entry of an order of probation against an Indemnified
Party prior to judgment, does not create a presumption that such Indemnified Party acted in a manner contrary to that specified
in this Section 6.8(a) with respect to the subject matter of such proceeding. Any indemnification pursuant to this Section 6.8
shall be made only out of the assets of the Company and any insurance proceeds from the liability policy covering the Managing
Member and any Indemnified Party, and neither the Managing Member nor any Member shall have any obligation to contribute to the
capital of the Company or otherwise provide funds to enable the Company to fund its obligations under this Section 6.8.

 

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(b)        To
the fullest extent permitted by law, and without requiring a preliminary determination of the Indemnified Party’s ultimate
entitlement to indemnification under Section 6.8(a) above, expenses incurred by an Indemnified Party who is a party to a proceeding
or otherwise subject to or the focus of or is involved in any proceeding shall be paid or reimbursed by the Company as incurred
by the Indemnified Party in advance of the final disposition of the proceeding upon receipt by the Company of (1) a written affirmation
by the Indemnified Party of the Indemnified Party’s good faith belief that the standard of conduct necessary for indemnification
by the Company as authorized in this Section 6.8(b) has been met and (2) a written undertaking by or on behalf of the Indemnified
Party to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.

 

(c)        The
indemnification provided by this Section 6.8 shall be in addition to any other rights to which an Indemnified Party or any other
Person may be entitled under any agreement, pursuant to any vote of the Members, as a matter of law or otherwise, and shall continue
as to an Indemnified Party who has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors, assigns
and administrators of the Indemnified Party unless otherwise provided in a written agreement with such Indemnified Party or in
the writing pursuant to which such Indemnified Party is indemnified.

 

(d)        The
Company may, but shall not be obligated to, purchase and maintain insurance, on behalf of any of the Indemnified Parties and such
other Persons as the Managing Member shall determine, against any liability that may be asserted against or expenses that may
be incurred by such Person in connection with the Company’s activities, regardless of whether the Company would have the
power to indemnify such Person against such liability under the provisions of this Agreement.

 

(e)        In
no event may an Indemnified Party subject any of the Members to personal liability by reason of the indemnification provisions
set forth in this Agreement.

 

(f)        An
Indemnified Party shall not be denied indemnification in whole or in part under this Section 6.8 because the Indemnified Party
had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted
by the terms of this Agreement.

 

(g)        The
provisions of this Section 6.8 are for the benefit of the Indemnified Parties, their heirs, successors, assigns and administrators
and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this
Section 6.8 or any provision hereof shall be prospective only and shall not in any way affect the obligations of the Company or
the limitations on the Company’s liability to any Indemnified Party under this Section 6.8 as in effect immediately prior
to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

 

    	 	27	 

     

    

 

(h)        If
and to the extent any payments to the Managing Member pursuant to this Section 6.8 constitute gross income to the Managing Member
(as opposed to the repayment of advances made on behalf of the Company) such amounts shall be treated as “guaranteed payments”
for the use of capital within the meaning of Code Section 707(c), shall be treated consistently therewith by the Company and all
Members, and shall not be treated as distributions for purposes of computing the Members’ Capital Accounts.

 

6.9          Liability
of the Managing Member.

 

(a)        Notwithstanding
anything to the contrary set forth in this Agreement, to the maximum extent that Delaware law in effect from time to time permits,
none of the Managing Member, Clipper or any of their directors, partners or officers shall be liable or accountable in damages
or otherwise to the Company, any Members or any Assignees for losses sustained, liabilities incurred or benefits not derived as
a result of errors in judgment or mistakes of fact or law or of any act or omission if the Managing Member, Clipper or such director,
partner or officer acted in good faith.

 

(b)        The
Members expressly agree that if there is a conflict between the duties owed by Clipper’s directors and officers to Clipper
and its stockholders and the duties owed by Clipper, in its capacity as the general partner of the Managing Member, to the Members,
Clipper and the Managing Member may fulfill its duties to the Members by acting the best interests of Clipper’s stockholders.

 

(c)        Subject
to its obligations and duties as Managing Member set forth in Section 6.2 hereof, the Managing Member may exercise any of the
powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through
its employees or agents (subject to the supervision and control of the Managing Member). The Managing Member shall not be responsible
for any misconduct or negligence on the part of any such agent appointed by it in good faith.

 

(d)        To
the extent that, at law or in equity, the Managing Member has duties (including fiduciary duties) and liabilities relating thereto
to the Company or the Members, the Managing Member shall not be liable to the Company or to any other Member for its good faith
reliance on the provisions of this Agreement.

 

(e)        Notwithstanding
anything herein to the contrary, except for fraud, willful misconduct or gross negligence, or pursuant to any express indemnities
given to the Company by any Member pursuant to any other written instrument, no Member shall have any personal liability whatsoever,
to the Company or to the other Members, for the debts or liabilities of the Company or the Company’s obligations hereunder,
and the full recourse of the other Members shall be limited to the interest of such Members in the Company. To the fullest extent
permitted by law, no officer, director, partner or stockholder of the Managing Member or Clipper shall be liable to the Company
for money damages except for (1) active and deliberate dishonesty established by a nonappealable final judgment or (2) actual
receipt of an improper benefit or profit in money, property or services.

 

Without
limitation of the foregoing, and except for fraud, willful misconduct or gross negligence, or pursuant to any such express indemnity,
no property or assets of any Member, other than its interest in the Company, shall be subject to levy, execution or other enforcement
procedures for the satisfaction of any judgment (or other judicial process) in favor of any other Members and arising out of,
or in connection with, this Agreement.

 

    	 	28	 

     

    

  

(f)        Any
amendment, modification or repeal of this Section 6.9 or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the Managing Member’s, and its officers’ and directors’, liability to the Company
and the Members under this Section 6.9 as in effect immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless
of when such claims may arise or be asserted.

 

6.10        Other
Matters Concerning the Managing Member.

 

(a)        The
Managing Member upon good faith may rely, and will be protected in acting or refraining from acting, upon any resolution, certificate,
statement, instrument, opinion, report or other document believed by it to be genuine and to have been signed or presented by
the proper party or parties.

 

(b)        The
Managing Member may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other
consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons
as to matters that the Managing Member reasonably believes to be within such Person’s professional expertise will be conclusively
presumed to have been done or omitted in good faith and in accordance with such opinion.

 

(c)        The
Managing Member will have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly
authorized officers and any attorney or attorneys-in-fact duly appointed by the Managing Member. Each such attorney will, to the
extent provided by the Managing Member in the power of attorney, have full power and authority to do and perform any act and duty
that is permitted or required to be done by the Managing Member hereunder.

 

(d)        Notwithstanding
any other provision of this Agreement or the Act, any action of the Managing Member on behalf of the Company or any decision of
the Managing Member to refrain from acting on behalf of the Company, undertaken in the good faith belief that such action or omission
is necessary or advisable in order to protect the ability of Clipper to continue to qualify as a REIT or the Company to be taxed
as a partnership, is expressly authorized under this Agreement and is deemed approved by all of the Members.

 

ARTICLE
VII

DISSOLUTION, LIQUIDATION AND WINDING-UP

 

7.1        Accounting.
In the event of the dissolution, liquidation and winding-up of the Company, a proper accounting will be made of the Capital Account
of each Member and of the Profits or Losses of the Company from the date of the last accounting prior to the date of dissolution.
Financial statements presenting such accounting will include a report of a national certified public accountant selected by the
Managing Member.

 

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7.2         Distribution
on Dissolution. In the event of the liquidation and dissolution of the Company for any reason, the assets of the Company will
be distributed in the following order and priority:

 

(a)        First,
payment of creditors of the Company (other than Members) in the order of priority as provided by law;

 

(b)        Second,
establishment by the Managing Member of reasonable reserves to provide for contingent liabilities, if any, as and to the extent
required by law;

 

(c)        Third,
payment of debts of the Company to Members, if any, in the order of priority provided by law; and

 

(d)        Fourth,
pro rata to the Members in accordance with the positive balances of their respective Capital Accounts, after giving effect
to all contributions, distributions and allocations for all periods.

 

Whenever
the Managing Member reasonably determines that any reserves established pursuant to paragraph (b) above are in excess of
the reasonable requirements of the Company, the amount determined to be excess will be distributed to the Members in accordance
with the order and priority set forth above.

 

7.3        Sale
of Properties. In the event of the liquidation and dissolution of the Company, the Managing Member may sell assets of the
Company, or cause its subsidiaries to sell Properties and other assets, on the best terms and conditions as the Managing Member
in good faith believes are reasonably available at the time and under the circumstances and on a non-recourse basis to the Members.
The liquidation of the Company will not be deemed completed until the Company has received cash payments in full with respect
to obligations such as notes, installment sale contracts or other similar receivables received by the Company in connection with
the sale of assets of the Company and all obligations of the Company have been satisfied, released or assumed by the Managing
Member. The Managing Member will continue to act to enforce all of the rights of the Company pursuant to any such obligations
until such obligations are paid in full or otherwise satisfied.

 

7.4        Distributions
in Kind. To the extent practicable, all distributions under Section 7.2 will be paid in cash. In the event that it becomes
necessary to make a distribution of property of the Company in kind, the Managing Member may Transfer and convey such property
to the distributees as tenants in common, subject to any liabilities attached thereto, so as to vest in them undivided interests
in the whole of such property in proportion to their respective rights to share in the proceeds of the sale of such property (other
than as a creditor) in accordance with the provisions of Section 7.2.

 

7.5        Documentation
of Liquidation. Upon the completion of the dissolution and liquidation of the Company, the Company will terminate and the
Managing Member will have the authority to execute and record any and all documents or instruments required to effect the dissolution,
liquidation and termination of the Company.

 

    	 	30	 

     

    

  

7.6        Dissolution.
The Company will not be dissolved by the admission of a Member or Substitute Member or by the admission of a successor Managing
Member in accordance with the terms of this Agreement. Upon the withdrawal of the Managing Member, any successor Managing Member
selected in accordance with the terms of this Agreement will continue the business of the Company without dissolution. However,
the Company will dissolve, and its affairs will be wound up, upon the first to occur of any of the following (a “Liquidating
Event”):

 

(a)        a
final and nonappealable judgment is entered by a court of competent jurisdiction ruling that the Managing Member is bankrupt or
insolvent, or a final and nonappealable order for relief is entered by a court with appropriate jurisdiction against the Managing
Member, in each case under any federal or state bankruptcy or insolvency laws as now or hereafter in effect, unless, prior to
the entry of such order or judgment, a Majority in Interest of the Members agree in writing, in their sole and absolute discretion,
to continue the business of the Company and to the appointment, effective as of a date prior to the date of such order or judgment,
of a successor Managing Member;

 

(b)        an
election to dissolve the Company made by the Managing Member in its sole and absolute discretion, with or without the consent
of a Majority in Interest of the Members;

 

(c)        entry
of a decree of judicial dissolution of the Company pursuant to the provisions of the Act;

 

(d)        the
occurrence of a Terminating Capital Transaction;

 

(e)        the
exchange (or acquisition by the Managing Member) of all Units that the Company has authorized other than Units held by the Managing
Member; or

 

(f)        the
Incapacity or withdrawal of the Managing Member, unless all of the remaining Members in their sole and absolute discretion agree
in writing to continue the business of the Company and to the appointment, effective as of a date prior to the date of such Incapacity,
of a substitute Managing Member.

 

Upon
the occurrence of a Liquidating Event, the Company will continue solely for the purposes of winding up its affairs in an orderly
manner, liquidating its assets and satisfying the claims of its creditors and Members.

 

ARTICLE
VIII

TRANSFER OF UNITS

 

8.1         Transfers
by Members.

 

(a)        No
part of the interest of a Member shall be subject to the claims of any creditor, to any spouse for alimony or support, or to legal
process, and may not be voluntarily or involuntarily alienated or encumbered except as may be specifically provided for in this
Agreement.

 

    	 	31	 

     

    

  

(b)        No
Unit shall be Transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article VIII.
Any Transfer or purported Transfer of a Unit not made in accordance with this Article VIII shall be null and void ab initio unless
consented to by the Managing Member in its sole and absolute discretion.

 

8.2         Transfer
of the Managing Member’s Class A Units.

 

(a)        The
Managing Member may not transfer any Class A Units except in connection with (i) a transaction permitted under Section 8.2(b),
(ii) any merger (including a triangular merger), consolidation or other combination with or into another Person following the
consummation of which the equity holders of the surviving entity are either the Managing Member or substantially identical to
the stockholders of Clipper, (iii) a transfer to a Qualified REIT Subsidiary or (iv) as otherwise expressly permitted under this
Agreement, nor shall the Managing Member withdraw as Managing Member except in connection with a transaction permitted under Section
8.2(b) or any merger, consolidation, or other combination permitted under clause (ii) of this Section 8.2(a).

 

(b)        The
Managing Member shall not engage in any merger (including, without limitation, a triangular merger), consolidation or other combination
with or into another Person (other than any transaction permitted by Section 8.2(a)), any sale of all or substantially all of
its assets or any reclassification or recapitalization, unless (i) it receives the consent of a Majority in Interest of the Members,
(ii) following such merger or other consolidation, substantially all of the assets of the surviving entity consist of Units or
(iii) in connection with which all Members (other than the Managing Member) who hold Units either will receive, or will have the
right to receive, for each Unit an amount of cash, securities, or other property equal to the product of the Adjustment Factor
and the greatest amount of cash, securities or other property paid to a holder of Clipper Common Shares in consideration of one
such Clipper Common Share at any time during the period from and after the date on which the transaction is consummated; provided,
however, that, if in connection with such transaction, a purchase, tender or exchange offer shall have been made to and accepted
by the holders of the percentage required for the approval of mergers under the organizational documents of Clipper, each Member
(other than the Managing Member) who holds Units shall receive, or shall have the right to receive without any right of consent
set forth above in this Section 8.2(b), the greatest amount of cash, securities, or other property which such holder would have
received had it exercised the Exchange Right and received Clipper Common Shares in exchange for its Units immediately prior to
the expiration of such purchase, tender or exchange offer and had thereupon accepted such purchase, tender or exchange offer.

 

8.3         Transfer
of Units Other then the Class A Units        

 

(a)        A
Member other than the Managing Member may Transfer all or any portion of its Units to any transferee without the consent of any
other Member in accordance with the terms and conditions set forth in this Article VIII. The Transferring Member shall give prior
written notice of such Transfer to the Managing Member and shall provide the Managing Member with such information related to
the Transfer and the transferee as the Managing Member may reasonably request.

 

    	 	32	 

     

    

  

(b)        
The transferee in such Transfer shall assume by operation of law or express agreement all of the obligations of the transferor
Member under this Agreement with respect to such Transferred Units; provided, that no such Transfer (unless made pursuant to a
statutory merger or consolidation wherein all obligations and liabilities of the transferor Member are assumed by a successor
corporation by operation of law) shall relieve the transferor Member of its obligations under this Agreement without the approval
of the Managing Member, in its sole and absolute discretion. Notwithstanding the foregoing, any transferee of any Transferred
Unit shall be subject to any and all ownership limitations contained in the Charter that may limit or restrict such transferee’s
ability to exercise its Exchange Rights. Any transferee shall take subject to the obligations of the transferor hereunder.

 

(c)        If
a Member is subject to Incapacity, the executor, administrator, trustee, committee, guardian, conservator or receiver of such
Member’s estate shall have all the rights of a Member, but not more rights than those enjoyed by other Members, for the
purpose of settling or managing the estate, and such power as the Incapacitated Member possessed to Transfer all or any part of
its interest in the Company. The Incapacity of a Member, in and of itself, shall not dissolve or terminate the Company.

 

(d)        The
Managing Member may impose restrictions on the Transfer of a Unit if it receives an opinion of counsel reasonably to the effect
that such restrictions are necessary in order to comply with any federal or state securities laws or regulations applicable to
the Company or the Units. The Managing Member may impose such restrictions by amending this Agreement without the approval of
the Members.

 

8.4        Restrictions
on Transfer.        In addition to any other restrictions on Transfer herein contained, in no event may any Transfer of a
Unit by any Member be made (i) to any Person who or which, in each case, to the knowledge of the transferring Member, lacks
the legal right, power or capacity to own a Unit, or, except with the prior written consent of the Managing Member, to a Person
that is not either (x) an “Accredited Investor” within the meaning of Regulation D promulgated by the SEC
under the Securities Act or (y) a Person with a “Purchaser Representative” within the meaning of Regulation D
promulgated by the SEC under the Securities Act; (ii) in violation of this Agreement; (iii) in violation of applicable
law; (iv) of any component portion of a Unit, such as the Capital Account separate and apart from other components of the
Unit; (v) if such Transfer would cause a termination of the Company for U.S. federal income tax purposes; (vi) if such
Transfer would, in the opinion of counsel to the Company, cause the Company to cease to be classified as a partnership for U.S.
federal income tax purposes; (vii) if such Transfer would, in the opinion of counsel to the Company, cause the Company to
become, with respect to any employee benefit plan subject to Title 1 of ERISA, a “party-in-interest” (as defined in
Section 3(14) of ERISA) or a “disqualified person” (as defined in Section 4975(c) of the Code), (viii) if
such Transfer would, in the opinion of counsel to the Company, cause any portion of the assets of the Company to constitute assets
of any employee benefit plan pursuant to Department of Labor Regulations Section 2510.3-101; (ix) if such Transfer may
not be effected without registration of such Units under the Securities Act or would otherwise violate any federal, state or foreign
securities laws or regulations applicable to the Company or such Units; (x) to a lender to the Company or any Person who
is related (within the meaning of Treasury Regulations Section 1.752-4(b)) to any lender to the Company whose loan constitutes
a “nonrecourse liability” (within the meaning of Treasury Regulations Section 1.752-1(a)(2)) without the consent
of the Managing Member, unless the Company’s basis for tax purposes would not be reduced as a result of such Transfer; (xi) except
with the express written consent of the Managing Member, if such Transfer, in the opinion of counsel to the Managing Member, would
result in either the Company having more than one hundred Members or in the Company being classified as a “publicly traded
partnership” within the meaning of the Code and the Treasury Regulations; (xii) except with the express written consent
of the Managing Member, to any Entity that is a partnership, grantor trust or S corporation if (A) substantially all of the
value of the interest of a person owning an interest in such Entity is attributable to the Entity’s (direct or indirect)
interest in a Unit, and (B) a principal purpose of the use of the tiered arrangement is to permit the Company to satisfy
the 100-person limitation in paragraph (h)(i)(ii) of Treasury Regulations Section 1.7704-1; (xiv) if the Managing
Member determines in its reasonable discretion that if it permitted such transfer the Company would be unable to obtain an opinion
of counsel recognized standing to the effect that the Company should not be treated as a “publicly traded partnership”
within the meaning of Section 7704(b) of the Code, except with respect to (A) transfers qualifying as a “private transfer”
for purposes of Treasury Regulations Section 1.7704-1(e) or any successor provision or (B) up to two Transfers (excluding
for this purpose, transfers qualifying as “private transfers”) of interests directly or indirectly held by the estate
of or other successor to, a person that has died within the preceding 12 months, (xv) if the Transfer would violate any agreement
in existence as of the date of this Agreement, unless the transferor first receives any consents required under such agreement,
or (xvi) if the Transfer would result in the payment of a participation or transaction fee under the terms of any agreement
in existence on the date of this Agreement, unless the transferor first reimburses the Company for the amount of the fee.

 

    	 	33	 

     

    

 

8.5        Attempted
Transfers That Do Not Comply with this Article VIII. Any attempt to Transfer Units that does not comply with this Article VIII
will be ineffective. In the event of any such attempted Transfer, the Managing Member may, in its discretion, upon written notice
to the transferring Member with a 30-day period for the transferring Member to cure, withhold any distributions, decline to honor
any Exchange Rights or refuse to recognize any other rights of ownership of the Units purported to be transferred until the attempted
Transfer is rescinded or a Transfer in compliance with this Article VIII is made.

 

8.6        Record
of Transfers; Certificates for Units. The Managing Member will maintain a record of all Transfers of Units. None of the Units
will be represented by certificates.

 

ARTICLE
IX

RIGHTS AND OBLIGATIONS OF THE MEMBERS

 

9.1        No
Participation in Management. Except as expressly permitted hereunder, the Members, in their capacities as Members of the Company,
will not take part in the management of the Company’s business, transact any business in the Company’s name or have
the power to sign documents for or otherwise bind the Company; except that, this provision is not intended to limit the authority
of the Managing Member or to prohibit or preclude any Member or its Affiliates from serving as an officer, director or employee
of the Company.

 

    	 	34	 

     

    

  

9.2         Rights
to Obtain Certain Documents and Information. In addition to other rights provided by this Agreement or by the Act, each Member
will have the right, for a purpose reasonably related to such Member’s interest as a Member, upon written demand with a
statement of the purpose of such demand and at such Member’s own expense (including such copying and administrative charges
as the Managing Member may establish from time to time):

 

(a)        to
obtain a copy of the Company’s federal, state and local income tax returns for each Fiscal Year;  

 

(b)        to
obtain a current list of the name and last known business, resident or mailing address of each Member; and

 

(c)        to
obtain a copy of this Agreement and the Certificate of Formation.

 

9.3         No
Withdrawal. No Member may withdraw from the Company without the prior written consent of the Managing Member, other than as
expressly provided in this Agreement or in the Act.

 

9.4         Limited
Liability. No Member will be bound, or personally liable for, the expenses, liabilities or obligations of the Company, except
as provided by this Agreement or the Act.

 

9.5         Investment
Policy. Members (other than Members who are bound by Clipper’s Investment Policy), and any assignees, officers, directors,
members, employees, agents, trustees, affiliates or stockholders of such Member are permitted to engage in other business ventures
and investments and are not required to present corporate opportunities to the Company, Clipper or their Affiliates, even if such
opportunities directly or indirectly compete with the Company, Clipper or their Affiliates. None of the Company, Clipper, the
other Members no their Affiliates will have any rights in or to such opportunities, and such opportunities are hereby renounced.

 

ARTICLE
X

GRANT OF EXCHANGE RIGHTS TO MEMBERS Holding Class B Units

 

10.1        Exchange
Right. Each Member shall have the right (the “Exchange Right”),
subject to the terms and conditions set forth herein and in any other such agreement, as applicable, to require the Managing
Member to exchange all or a portion of the Class B Units held by such Member (such Class B Units being hereafter referred to as
“Tendered Units”), together with the same number of shares of Clipper Special Stock, in exchange for the Cash
Amount, unless the terms of such Class B Units or a separate agreement entered into between the Company and the holder of such
Class B Units provide that such Class B Units are not entitled to the Exchange Right or impose conditions on the exercise of the
Exchange Right. The Member who is exercising the Exchange Right (the “Tendering Member”) shall have no right,
with respect to any Class B Units so exchanged, to receive any distributions paid on or after the Specified Exchange Date. Any
Exchange Right exercise shall be pursuant to a Notice of Exchange delivered to the Managing Member (with a copy to Clipper) by
the Tendering Member. The Cash Amount shall be payable to the Tendering Member on the Specified Exchange Date against delivery
of the Tendered Units to the Managing Member and the same number of shares of Clipper Special Stock to Clipper.

 

    	 	35	 

     

    

 

10.2        Clipper’s
Option. Notwithstanding Section 10.1 above, if a Member has delivered
to the Managing Member (with a copy to Clipper) a Notice of Exchange, then Clipper may, in its sole and absolute discretion (subject
to the limitations on ownership and transfer of Clipper Common Shares set forth in the Charter), elect to assume and satisfy the
Managing Member’s Exchange obligation and acquire some or all of the Tendered Units (and the same number of shares of Clipper
Special Stock) from the Tendering Member in exchange for the Clipper Common Shares Amount (as of the Specified Exchange Date)
and, if Clipper so elects, the Tendering Member shall sell the Tendered Units (and the same number of shares of Clipper Special
Stock) to Clipper in exchange for the Clipper Common Shares Amount. In such event, the Tendering Member shall have no right to
cause the Managing Member to exchange such Tendered Units for the Cash Amount. Clipper shall give such Tendering Member written
notice of its election on or before the close of business on the fifth Business Day after the receipt of the Notice of Exchange.

 

10.3        Exchange
Right. The Clipper Common Shares Amount, if applicable, shall be
delivered as duly authorized, validly issued, fully paid and nonassessable Clipper Common Shares and, if applicable, free of any
pledge, lien, encumbrance or restriction, other than those provided in the Charter or the Bylaws, the Securities Act, relevant
state securities or blue sky laws and any applicable registration rights agreement with respect to such Clipper Common Shares
entered into by the Tendering Member. Notwithstanding any delay in such delivery (but subject to Section 10.5), the Tendering
Member shall be deemed the owner of such Clipper Common Shares for all purposes, including rights to vote or consent, and receive
dividends, as of the Specified Exchange Date. In addition, the Clipper Common Shares for which the Class B Units might be exchanged
shall bear the legend set forth in the Charter. 

 

10.4        Clipper
Common Shares. Each Member covenants and agrees with the Managing
Member and Clipper that all Tendered Units (and the same number of shares of Clipper Special Stock) shall be delivered to the
Managing Member or Clipper, as applicable, free and clear of all liens, claims and encumbrances whatsoever and should any such
liens, claims and/or encumbrances exist or arise with respect to such Tendered Units or shares of Clipper Special Stock, neither
the Managing Member nor Clipper shall be under any obligation to acquire the same.

 

    	 	36	 

     

    

 

10.5        Limitations.    Notwithstanding the provisions of Sections 10.1, 10.2, 10.3 or any other
provision of this Agreement, a Member (a) shall not be entitled to effect an exchange pursuant to the Exchange Right to the
extent that, assuming Clipper makes the election described in Section 10.2, the ownership or right to acquire Clipper Common Shares
pursuant to such exchange by such Member on the Specified Exchange Date could cause such Member or any other Person to violate
the restrictions on ownership and transfer of Clipper stock set forth in the Charter, after taking into account any waiver required
to be granted by Clipper pursuant to the immediately following two sentences, and (b) shall have no rights under this Agreement
to acquire Clipper Common Shares which would otherwise be prohibited under the Charter. If a Member seeking to effect an exchange
pursuant to the Exchange Right during the first half of Clipper’s taxable year (within the meaning of Section 542(a)(2)
of the Code) is subject to a binding commitment to dispose, prior to the close of the first half of such taxable year, of the
Clipper Common Shares acquired pursuant to the Exchange Right, Clipper shall grant a waiver to any relevant restrictions on ownership
and transfer of Clipper Common Shares that would otherwise be violated by the exchange pursuant to the Exchange Right, subject
to such conditions or restrictions as Clipper may reasonably deem appropriate in connection with granting such waiver in order
to determine or ensure Clipper’s status as a REIT. If the conditions of the preceding sentence do not apply, a Member seeking
to effect an exchange pursuant to the Exchange Right may obtain (and Clipper shall grant) a waiver to any relevant restrictions
on ownership and transfer of Clipper Common Shares to the maximum extent possible, subject to such conditions or restrictions
as Clipper may reasonably deem appropriate in connection with granting such waiver in order to determine or ensure Clipper’s
status as a REIT. To the extent any attempted exercise of the Exchange Right would be in violation of this Section 10.5, it shall
be null and void ab initio and such Member shall not acquire any rights or economic interest in the cash otherwise payable, or
the Clipper Common Shares otherwise issuable, upon such exchange.

 

10.6        Additional
Conditions. Notwithstanding anything herein to the contrary (but
subject to Section 10.5), with respect to any exchange pursuant to the Exchange Right:(a) without the consent of the Managing
Member, each Member may not effect an exchange for less than 1,000 Class B Units or, if the Member holds less than 1,000 Class
B Units, all of the Class B Units held by such Member; (b) without the consent of the Managing Member, each Member may not
effect an exchange of Class B Units during the period after the Record Date with respect to a distribution and before the record
date established by Clipper for a distribution to its stockholders of some or all of its portion of such distribution; (c) the
consummation of any exchange of Class B Units shall be subject to the expiration or termination of the applicable waiting period,
if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; and (d) each Tendering Member shall continue
to own all Class B Units subject to any exchange, and be treated as a Member with respect to such Class B Units for all purposes
of this Agreement, until such Class B Units are transferred to the Managing Member or Clipper, as applicable, and paid for or
exchanged for Clipper Common Shares on the Specified Exchange Date. Until a Specified Exchange Date, the Tendering Member shall
have no rights as a stockholder of Clipper with respect to such Tendering Member’s Class B Units.

 

ARTICLE
XI

GENERAL PROVISIONS

 

11.1        Notices.
All notices, demands, consents, requests or other communications provided for or permitted to be given hereunder by a party hereto
must be in writing, may be delivered in person, confirmed facsimile transmission, registered or certified mail, return receipt
requested, or overnight courier, to the applicable Member at the address of such Member set forth in the books and records of
the Company or such other address of which such Member shall notify the Managing Member in accordance with the provisions hereof,
will be deemed to have been properly given or served upon actual receipt (with rejection of delivery by addressee to constitute
receipt) by such Member. For purposes of this Section 11.1, the address of the Managing Member is:

 

    	 	37	 

     

    

  

Gunki
Holdings, LLC

c/o Clipper
Equity Inc.

4611 Twelfth Avenue

Brooklyn, New York 11219

Attention: David Bistricer

Fax: 718-438-1290  

 

The
address of the Managing Member may be changed by a notice in writing given in accordance with the provisions hereof.  

 

11.2        Successor.
This Agreement and all the terms and provisions hereof will be binding upon and will inure to the benefit of the Company, the
Members and their legal representatives, heirs, successors and permitted assigns, except as otherwise provided in this Agreement.

 

11.3        No
Third-Party Rights Created Hereby. The provisions of this Agreement are solely for the purpose of defining the interests of
the Member, inter se; and no other person, firm or entity (i.e., a party who is not a signatory hereto or a permitted successor
to such signatory hereto) shall have any right, power, title or interest by way of subrogation or otherwise, in and to the rights,
powers, title and provisions of this Agreement. No creditor or other third party having dealings with the Company (other than
as expressly set forth herein with respect to Indemnified Parties) shall have the right to enforce the right or obligation of
any Member to make Capital Contributions or loans to the Company or to pursue any other right or remedy hereunder or at law or
in equity. None of the rights or obligations of the Members herein set forth to make Capital Contributions or loans to the Company
shall be deemed an asset of the Company for any purpose by any creditor or other third party, nor may any such rights or obligations
be sold, transferred or assigned by the Company or pledged or encumbered by the Company to secure any debt or other obligation
of the Company or any of the Members.

 

11.4        No
Rights as Stockholders of Clipper. Nothing contained in this Agreement shall be construed as conferring upon the holders of
Units any rights whatsoever as stockholders of Clipper, including without limitation any right to receive dividends or other distributions
made to stockholders of Clipper or to vote or to consent or receive notice as stockholders in respect of any meeting of stockholders
for the election of directors of Clipper or any other matter.

 

11.5        Creditors.
Other than as expressly set forth herein with respect to Indemnified Parties, none of the provisions of this Agreement shall be
for the benefit of, or shall be enforceable by, any creditor of the Company.     

 

11.6        Counterparts.
This Agreement may be executed in counterparts, each of which will be an original, but all of which will constitute one and the
same instrument.

 

11.7        Members
Not Agents. Nothing contained in this Agreement will be construed to constitute any Member as the agent of another Member
or of the Company.

 

11.8        Entire
Understanding. This Agreement constitutes the entire agreement and understanding among the Members regarding the subject matter
of this Agreement and supersedes any prior understandings and written or oral agreements among them respecting the subject matter.

 

    	 	38	 

     

    

 

11.9        Severability.
If any provision of this Agreement, or the application of any provision to any person or circumstance, is held to be invalid by
a court of competent jurisdiction, the remainder of this Agreement, or the application of the provision to persons or circumstances
other than those to which it is held invalid by such court, will not be affected thereby.

 

11.10        Pronouns
and Headings. As used herein, all pronouns will include the masculine, feminine and neuter, and all defined terms will include
the singular and plural thereof wherever the context and facts require such construction. The headings, titles and subtitles herein
are for convenience of reference only and are to be ignored in any construction of the provisions hereof. Any references in this
Agreement to “including” will be deemed to mean “including without limitation.”

 

11.11        Assurances.
Each of the Members will hereafter execute and deliver such further instruments and do such further acts and things as may be
reasonably required or useful to carry out the intent and purpose of this Agreement and as are not inconsistent with the terms
hereof, at the expense of the party making such request, except that no Member will, in connection with the foregoing, be obligated
to incur any liabilities or obligations other than those expressly contemplated in this Agreement. 

 

11.12        Expenses.
Each of the parties will pay its own expenses, including expenses of counsel, incurred in connection with the negotiation, drafting
and execution of this Agreement and the schedules and exhibits hereto.

 

11.13        Waiver
of Partition. Except as otherwise expressly provided in this Agreement, no Member will, either directly or indirectly, take
any action to require partition or appraisement of the Company or any of its assets or properties or cause the sale of any assets
of the Company or property, and notwithstanding any provision of applicable law to the contrary, each Member (for itself and its
legal representatives, successors and assigns) hereby irrevocably waives any and all right to partition, or to maintain any action
for partition, or to compel any sale with respect to its interest in, or with respect to, any assets or properties of the Company,
except as expressly provided in this Agreement.

 

11.14        GOVERNING
LAW. THE PARTIES HERETO AGREE THAT THIS AGREEMENT WILL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF DELAWARE].

 

    	 	39	 

     

    

 

11.15        Jurisdiction.
Each of the parties submits to the jurisdiction of any State of Delaware court or Federal Court of the United States of America
sitting in the State of Delaware, and any appellate court from any such court, in any suit, action or proceeding arising out of
or relating to this Agreement, or for recognition or enforcement of any judgment. All claims in respect of any such suit, action
or proceeding may be brought, heard and determined in such State of Delaware court or, to the extent permitted by law, in such
Federal Court. Final judgment in any such suit, action or proceeding will be conclusive and may be enforced in other jurisdictions
by suit on the judgment or in any other manner provided by law. Each of the parties waives, to the fullest extent it may legally
and effectively do so, any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any State of Delaware court or Federal Court sitting in the State of Delaware.
Each of the parties waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of
such suit, action or proceeding in any such court. Nothing contained in this Section 11.15 will be construed as preventing
any of the parties from (i) objecting to the jurisdiction of any State of Delaware court on the ground that the matter involved
exceeds the statutory jurisdiction of such court or (ii) from seeking to remove any suit, action or proceeding from a State
of Delaware court to a Federal Court sitting in the State of Delaware, or vice versa.

 

    	 	40	 

     

    

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

 

	MANAGING MEMBER:	 	DAVID BISTRICER
	 	 	 
	CLIPPER REALTY L.P.	 	/s/ David Bistricer
	 	 	 
	   By: CLIPPER REALTY INC.	 	ECL HOLDINGS LLC
	 	 	 	 
	 	/s/ David Bistricer	 	By:	/s/ Sam Levinson
	 	Name: David Bistricer  	 	Name:	Sam Levinson
	 	Title: Chief Executive Officer and President  	 	Title:	Authorized Signatory

 

 

	 	JACOB SCHWIMMER
	 	 
	 	/s/ Jacob Schwimmer

 

	 	MORIC BISTRICER
	 	 
	 	/s/ Moric Bistricer

 

	 	SCHWIMMER FAMILY IRREVOCABLE GIFT TRUST 2
	 	 
	 	By:	/s/ Jacob Schwimmer
	 	Name:	Jacob Schwimmer	 
	 	Title:	Trustee	 

 

	 	TRAPEZE D HOLDINGS LLC
	 	 
	 	By:	/s/ Sam Levinson
	 	Name:	Sam Levinson  
	 	Title:	Authorized Signatory  
	 	 
	 	TRAPEZE INC.
	 	 
	 	By:	/s/ Sam Levinson
	 	Name:	Sam Levinson    
	 	Title:	Authorized Signatory    

 

[Signature
Page to LLC Agreement of Gunki Holdings LLC] 

 

    	 	41	 

     

    

 

EXHIBIT
A

SPECIAL ALLOCATION
RULES

 

Notwithstanding
any other provision of the Agreement or this Exhibit A, the following special allocations shall be made in the following
order:

 

(a)        Minimum
Gain Chargeback. If there is a net decrease in Company Minimum Gain or Member Nonrecourse Debt Minimum Gain (determined in
accordance with the principles of Treasury Regulations Sections 1.704-2(d) and 1.704-2(i)) during any Fiscal Year, then items
of income and gain for such year (and, if necessary, for subsequent periods) shall be allocated to the Members in the manner and
to the extent required by Treasury Regulations Sections 1.704-2(f) and 1.704-2(i) (subject to the exceptions to this requirement
described therein). This paragraph (a) is intended to constitute a “minimum gain chargeback” as provided by Treasury
Regulations Section 1.704-2(f) and to satisfy the “partner nonrecourse debt minimum gain” chargeback requirements
of Treasury Regulations Section 1.704-2(i)(4), and this clause shall be construed accordingly.

 

(b)        Qualified
Income Offset. If any Member receives any adjustments, allocations or distributions described in Treasury Regulations Sections
1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Company income and gain (including gross income) shall be specially
allocated to each such Member in a manner and amount sufficient to eliminate, to the extent required by such Treasury Regulations,
the Adjusted Capital Account Deficit of the Member created by such adjustments, allocations or distributions as quickly as possible.
The foregoing provision is intended to comply with Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
and applied in a manner consistent with such Treasury Regulations.

 

(c)        Gross
Income Allocation. If any Member has an Adjusted Capital Account Deficit at the end of any Fiscal Year, each such Member shall
be specially allocated items of Company income and gain in the amount of such Adjusted Capital Account Deficit as quickly as possible,
provided, that an allocation pursuant to this paragraph (c) shall be made only if and to the extent that such Member
would have an Adjusted Capital Account Deficit after all other allocations provided for in Section 5.1 and this Exhibit A
had been made as if paragraphs (c) and (d) were not included in this Agreement.

 

(d)        Nonrecourse
Deductions. Nonrecourse Deductions for any Partnership Year shall be allocated to the Members in accordance with any permissible
method determined by the Managing Member 

 

(e)        Member
Nonrecourse Deductions. Any Member Nonrecourse Deductions for any Fiscal Year shall be specially allocated to the Member who
bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are attributable
in accordance with Treasury Regulations Sections 1.704-2(b)(4) and 1.704-2(i).

 

     

     

    

 

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

  

    E-A-2 

     

    

 

EXHIBIT
B

NOTICE OF
EXCHANGE

 

To:  Clipper Realty L.P.

c/o
Clipper Equity Inc.

4611
Twelfth Avenue

Brooklyn,
New York 11219

Attention:
David Bistricer

Fax: 718-438-1290

 

The
undersigned Member hereby irrevocably tenders for exchange [NUMBER] Class B Units (the “Tendered Units”) in
Gunki Holdings, LLC (the “Company”), in accordance with the terms of the Amended and Restated Limited Liability
Company Agreement of the Company, dated as of August 3, 2015 (the “Agreement”), and the Exchange Right referred
to therein.

 

The
undersigned Member:

 

		1.	undertakes
                                         to surrender such Tendered Units, the same number of shares of Clipper Special Stock
                                         and any certificates therefor at the closing of the exchange;

 

		2.	directs
                                         that the certified check representing the Cash Amount deliverable upon the closing of
                                         the exchange be delivered to the address specified below;

 

		3.	represents,
                                         warrants, certifies and agrees that the undersigned:

 

(a)        has,
and at the closing of the exchange will have, good, marketable and unencumbered title to such Tendered Units and shares of Clipper
Special Stock, free and clear of the rights or interests of any other person or entity,

 

(b)        has,
and at the closing of the exchange will have, the full right, power and authority to tender and surrender such Tendered Units
and shares of Clipper Special Stock as provided herein, and

 

(c)        has
obtained the consent or approval of all persons and entities, if any, having the right to consent to or approve such tender and
surrender; and

 

		4.	acknowledges
                                         that the undersigned will continue to own such Tendered Units until and unless such Tendered
                                         Units are transferred to the
                                         Managing Member or Clipper and paid for or exchanged for Clipper Common Shares.

 

All
capitalized terms used herein and not otherwise defined shall have the same meaning ascribed to them respectively in the Agreement.

 

Dated: __________________

 

     

     

    

 

	 	Name
of Member:

         

	 	 
	 	 
	 	(Signature of Member)
	 	 
	 	 
	 	(Street Address)
	 	 
	 	(City)                 (State)
                    (Zip Code)
	 	 
	 	Signature Medallion Guaranteed by:
	 	 
	 	 
	Issue Check Payable/Clipper Common Shares to:
	 
	Name:	 
	Please insert social security or identifying number:	 

 

Copy:   Clipper Realty, Inc.

4611
Twelfth Avenue

Brooklyn,
New York 11219

Attention:
David Bistricer

Fax: 718-438-1290

 

    E-B-2Exhibit 10.5

 

EXECUTION VERSION 

 

REGISTRATION RIGHTS AGREEMENT

 

This Registration Rights Agreement (this “Agreement”)
is made and entered into as of August 3, 2015, between Clipper Realty Inc., a Maryland corporation (together with any successor
entity thereto, the “Company”), and FBR Capital Markets & Co., a Delaware corporation, as the initial purchaser/placement
agent (“FBR”) for the benefit of FBR, the purchasers (“Participants”) of the Company’s
common stock, $0.01 par value per share (“Common Stock”), in the private offering by the Company of shares of
Common Stock contemplated by the Purchase/Placement Agreement (defined below), and the direct and subsequent transferees of such
shares of Common Stock of FBR and each of the Participants.

 

This Agreement is made pursuant to the Purchase/Placement
Agreement (the “Purchase/Placement Agreement”), dated as of July 27, 2015, between the Company and FBR in connection
with the purchase and sale or placement of an aggregate of 10,667,667 shares of Common Stock. In order to induce FBR to enter into
the Purchase/Placement Agreement, the Company has agreed to provide the registration rights provided for in this Agreement to FBR,
the Participants, and their respective direct and subsequent transferees. The execution of this Agreement is a condition to the
closing of the transactions contemplated by the Purchase/Placement Agreement.

 

The parties hereby agree as follows:

 

1.           Definitions

 

As used in this Agreement, the following terms
shall have the following meanings:

 

Affiliate: As to any specified Person,
as defined in Rule 12b-2 promulgated under the Exchange Act.

 

Agreement: As defined in the preamble.

 

Board of Directors: As defined in Section
3(b) hereof.

 

Business Day: A day on which the principal
office of the Commission is open within the meaning of Rule 110.

 

Closing Date: The date of this Agreement.

 

Commission: The Securities and Exchange
Commission.

 

Common Stock: As defined in the preamble.

 

Company: As defined in the preamble.

 

Controlling Person: As defined in Section 7(a)
hereof.

 

    	 	 	 

     

    

 

End of Suspension Notice: As defined
in Section 6(b) hereof.

 

Exchange Act: The Securities Exchange
Act of 1934, as amended.

 

FBR: As defined in the preamble.

 

FINRA: The Financial Industry Regulatory
Authority.

 

First Trigger Date: As defined in Section
3(a) hereof.

 

Holder: Each record owner of any Registrable
Shares from time to time, including FBR and its Affiliates to the extent FBR or any such Affiliate holds any Registrable Shares.

 

Indemnified Party: As defined in Section 7(c)
hereof.

 

Indemnifying Party: As defined in Section 7(c)
hereof.

 

Insider Shares: As defined in Section
3(h) hereof.

 

IPO Registration Statement: As defined
in Section 2(b) hereof.

 

Issuer Free Writing Prospectus: As defined
in Section 2(c) hereof.

 

JOBS Act:  The Jumpstart Our Business
Startups Act, as amended, and the rules and regulations promulgated by the Commission thereunder.

 

Liabilities: As defined in Section 7(a)
hereof.

 

National Securities Exchange: In the
event the Common Stock first becomes listed for trading in connection with an underwritten initial public offering of Common Stock,
National Securities Exchange means The New York Stock Exchange, the Nasdaq Global Select Market or the Nasdaq Global Market; and
in the event the Common Stock first becomes listed for trading following the effectiveness of a resale Shelf Registration Statement
without any underwritten public offering of Common Stock, National Securities Exchange means The New York Stock Exchange, the Nasdaq
Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market or another national securities exchange selected by the
Company in its sole discretion.

 

No Objections Letter: As defined in Section 5(s)
hereof.

 

Nominee: As defined in Section 3(e) hereof.

 

Participants: As defined in the preamble.

 

    	 	- 2 -	 

     

    

 

Person: An individual, partnership, corporation,
limited liability company, trust, unincorporated organization, government or agency or political subdivision thereof, or any other
legal entity.

 

Private Placement Shares: As defined
in the Purchase/Placement Agreement.

 

Proceeding: An action, claim, suit or
proceeding (including without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or,
to the knowledge of the Person subject thereto, threatened.

 

Prospectus: The prospectus included in
any Registration Statement, including any preliminary prospectus at the “time of sale” within the meaning of Rule 159
and all other amendments and supplements to any such prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference, if any, in such prospectus.

 

Purchase/Placement Agreement: As defined
in the preamble.

 

Purchaser Indemnitee: As defined in Section 7(a)
hereof.

 

Registrable Shares: The Private Placement
Shares (including but not limited to any such shares issued and sold in the Offering to officers and directors of the Company and
their designated friends, family and affiliates) and the Rule 144A/Regulation S Shares, upon original issuance thereof, and
at all times subsequent thereto, including upon the transfer thereof by the original holder or any subsequent holder and any shares
or other securities issued in respect of such Registrable Shares by reason of or in connection with any stock dividend, stock distribution,
stock split, purchase in any rights offering or in connection with any exchange for or replacement of such Registrable Shares or
any combination of shares, recapitalization, merger or consolidation, or any other equity securities issued pursuant to any other
pro rata distribution with respect to the Common Stock, until, in the case of any such Private Placement Share or Rule 144A/Regulation S
Share, the earliest to occur of: (i) the date on which the resale of such share has been registered pursuant to the Securities
Act and it has been disposed of in accordance with the Registration Statement relating to it, (ii) the date on which such
share either (a) has been transferred pursuant to Rule 144 (or any similar provision then in effect) or (b) is freely saleable,
without being subject to any volume limitation or other condition pursuant to Rule 144, including any current public information
requirements, (iii) the date on which such share is sold to the Company or an Affiliate of the Company, or (iv) the date on
which such share ceases to be outstanding.

 

Registration Default: As defined in Section 2(f)(i)
hereof.

 

    	 	- 3 -	 

     

    

 

Registration Expenses: Any and all actual
fees and expenses incident to the performance of or compliance with this Agreement, including, without limitation: (i) all
Commission, securities exchange, FINRA or other registration, listing, inclusion and filing fees; (ii) all fees and expenses
incurred in connection with compliance with international, federal or state securities or blue sky laws (including, without limitation,
any registration, listing and filing fees and fees and disbursements of counsel in connection with blue sky qualification of any
of the Registrable Shares and the preparation of a blue sky memorandum and compliance with the rules of FINRA); (iii) all
expenses in preparing or assisting in preparing, word processing, duplicating, printing, delivering and distributing any Registration
Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements, certificates
and any other documents relating to the performance under and compliance with this Agreement; (iv) all fees and expenses incurred
in connection with the listing or inclusion of any of the Registrable Shares on any securities exchange pursuant to Section 5(n)
of this Agreement; (v) the fees and disbursements of counsel for the Company and of the independent registered public accounting
firm of the Company (including, without limitation, the expenses of any special audit and “cold comfort” letters required
by or incident to the performance of this Agreement); (vi) reasonable fees and disbursements of Sidley Austin LLP or, if Sidley
Austin LLP is unable or unwilling to so serve, one such other nationally-recognized securities counsel reasonably acceptable to
the Company and FBR, with respect to a review of the registration statement and other offering arrangements with respect to the
Holders (such counsel, “Review Counsel,” it being understood that such Review Counsel shall not be deemed to
represent any Holder unless such counsel and such Holder so agree in writing); provided, however, that Holders holding a majority
of the Registrable Shares (or, in the case of an Underwritten Offering in which Holders elect to sell Registrable Shares, Holders
holding a majority of the Registrable Shares held by the Holders who have elected to sell Registrable Shares in such Underwritten
Offering) may object to the appointment of Sidley Austin LLP or such other nationally-recognized securities counsel as Review Counsel
and appoint a new Review Counsel; provided, however, that if Holders electing to sell Registrable Shares in an Underwritten
Offering object to the appointment of Sidley Austin LLP or such other nationally-recognized securities counsel as Review Counsel
and appoint a new Review Counsel, such objection and appointment shall only be applicable to such Underwritten Offering, in all
cases under this clause (vi) not to exceed $50,000; and (vii) any other fees and disbursements customarily paid in issues
and sales of securities (including the fees and expenses of any experts retained by the Company in connection with any Registration
Statement); provided, however, that Registration Expenses shall exclude brokers’ or underwriters’ discounts,
commissions and placement fees, if any, relating to the sale or disposition of Registrable Shares by a Holder.

 

Registration Statement: Any registration
statement of the Company that covers the resale of Registrable Shares pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration statement or Prospectus, including pre- and post-effective amendments,
all exhibits thereto and all material incorporated by reference or deemed to be incorporated by reference, if any, in such registration
statement.

 

Review Counsel: As defined in paragraph
(vi) of the definition for Registration Expenses.

 

Rule 144A/Regulation S Shares: As
defined in the Purchase/Placement Agreement.

 

Second Trigger Date: As defined in Section
3(c) hereof.

 

Securities Act: The Securities Act of
1933, as amended. Any reference to a “Rule” number herein, unless otherwise specified, shall be a reference to such
Rule number promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission as a replacement thereto having substantially the same effect as
such rule.

 

    	 	- 4 -	 

     

    

 

Shares: The shares of Common Stock sold
pursuant to the Purchase/Placement Agreement.

 

Shelf Registration Statement: As defined
in Section 2(a) hereof.

 

Special Election Meeting: As defined
in Section 3(a) hereof.

 

Special Voting Shares: The Company’s
special voting stock, $0.01 par value per share.

 

Suspension Event: As defined in Section 6(b)
hereof.

 

Suspension Notice: As defined in Section 6(b)
hereof.

 

Underwritten Offering: A sale of Shares
to or through an underwriter or underwriters for re-offering to the public.

 

2.           Registration
Rights

 

(a)          Mandatory
Shelf Registration. As set forth in Section 5 hereof, the Company agrees to confidentially submit or file with the Commission
as soon as reasonably practicable following the date of this Agreement (but in no event later than November 1, 2015) a shelf Registration
Statement on Form S-11 or such other form under the Securities Act then available to the Company providing for the resale of any
Registrable Shares pursuant to Rule 415 from time to time by the Holders (a “Shelf Registration Statement”).
The Company shall use its commercially reasonable efforts to cause such Shelf Registration Statement to be declared effective by
the Commission as soon as reasonably practicable after the initial filing thereof and to cause its Common Stock, including the
Registrable Shares, to be listed on a National Securities Exchange concurrently with the effectiveness of the Shelf Registration
Statement. Any Shelf Registration Statement shall provide for the resale from time to time, and pursuant to any customary method
or combination of customary methods legally available (including, without limitation, an Underwritten Offering, a direct sale to
purchasers or a sale through brokers or agents) by the Holders of any and all Registrable Shares.

 

(b)          IPO
Registration. If the Company proposes to file a Registration Statement on Form S-11 or such other form under the Securities
Act providing for the initial public offering of shares of Common Stock (the “IPO Registration Statement”),
the Company will notify in writing each Holder of the filing within five Business Days after the initial filing and afford each
Holder an opportunity to include in the IPO Registration Statement all or any part of the Registrable Shares then held by such
Holder. The Company will also concurrently provide FBR with a copy of the notice and any related materials provided to the Holders.
Each Holder desiring to include in the IPO Registration Statement all or part of the Registrable Shares held by such Holder shall,
within 20 days after receipt of the above-described notice from the Company, so notify the Company in writing, and in such
notice shall inform the Company of the number of Registrable Shares such Holder wishes to include in the IPO Registration Statement.
Any election by any Holder to include any Registrable Shares in the IPO Registration Statement will (A) be binding upon such Holder
thereafter except that a Holder may withdraw such Holder’s Registrable Shares from inclusion in the IPO Registration Statement
in accordance with the provisions in the third paragraph of Section 2(d) hereof and (B) not affect the inclusion of such Registrable
Shares in the Shelf Registration Statement until such Registrable Shares have been sold under the IPO Registration Statement.

 

    	 	- 5 -	 

     

    

 

(i)          Right
to Terminate IPO Registration. The Company shall have the right to terminate or withdraw the IPO Registration Statement initiated
by it and referred to in this Section 2(b) whether or not any Holder has elected to include Registrable Shares in such registration;
provided, however, the Company must provide each Holder that elected to include any Registrable Shares in such IPO Registration
Statement prompt written notice of such termination or withdrawal. Furthermore, in the event the IPO Registration Statement is
not declared effective within 120 days following the initial filing of the IPO Registration Statement, unless a road show for the
Underwritten Offering pursuant to the IPO Registration Statement is actually in progress at such time, the Company shall promptly
provide a new written notice to all Holders giving them another opportunity to elect to include Registrable Shares in the pending
IPO Registration Statement. Each Holder receiving such notice shall have the same election rights afforded such Holder as described
in clause (b) above.

 

(ii)         Selection
of Underwriter. Until the first anniversary of the Closing Date (the “Post Offering Period”), if the Company
conducts an initial public offering of its Common Stock (an “IPO”), the Company shall appoint FBR as the lead
underwriter and lead bookrunner (the “Lead Underwriter”) in connection with the IPO, unless the Company receives
a signed writing by the chief executive officer of FBR stating that FBR does not wish to serve as the Lead Underwriter in the IPO.
In the event FBR is the Lead Underwriter in an IPO as contemplated by this Section 2(b)(ii), FBR shall be named on the cover of
any IPO prospectus in the upper left relative to the names of the other underwriters participating in the IPO, shall manage all
of the “roadshow” logistics, share allocations and all stabilization transactions in connection with the IPO and shall
perform such other customary tasks of a lead underwriter and lead bookrunner in an initial public offering. FBR’s compensation
as the Lead Underwriter in connection with the IPO shall be determined by agreement between the Company and FBR on the basis of
compensation customarily paid to leading investment banks acting as underwriters in similar transactions. If the First Trigger
Date (as such term is defined herein) is extended pursuant to the terms of this Agreement, the Post Offering Period shall be extended
until such extended First Trigger Date.

 

    	 	- 6 -	 

     

    

 

(iii)        Shelf
Registration not Impacted by IPO Registration Statement. The Company’s obligation to confidentially submit or file the
Shelf Registration Statement pursuant to Section 2(a) hereof shall not be affected by the filing or effectiveness of the IPO
Registration Statement. In addition, the Company’s obligation to use its commercially reasonable efforts to cause the Shelf
Registration Statement to be declared effective by the Commission pursuant to Section 2(a) hereof shall not be affected by the
filing or effectiveness of an IPO Registration Statement; provided, however, if the Company files an IPO Registration Statement
before the effective date of the Shelf Registration Statement and the Company has used and is continuing to use commercially reasonable
efforts to pursue the completion of such initial public offering, the Company shall have the right to defer causing the Commission
to declare such Shelf Registration Statement effective until up to 60 days after the closing date of its initial public offering
pursuant to the IPO Registration Statement so long as such closing date occurs on or before the first anniversary of the Closing
Date. Notwithstanding any other provision in this Agreement to the contrary, if the Company files an IPO Registration Statement
before the effective date of the Shelf Registration Statement, and the deadline for causing such Shelf Registration Statement to
go effective is after the 60 day period beginning on the closing date of the Company’s initial public offering pursuant to
the IPO Registration Statement, the Company shall cause the Shelf Registration Statement to be declared effective no later than
60 days after the closing date of the Company’s initial public offering pursuant to the IPO Registration Statement. If the
Company completes an initial public offering of its Common Stock pursuant to an IPO Registration Statement, the Company agrees
that it will, upon the effectiveness of the Shelf Registration Statement, cause the Registrable Shares to be listed on the same
National Securities Exchange on which the Common Stock was listed in connection with its initial public offering.

 

Notwithstanding any provision to the contrary
in this Agreement, any amendment to this Section 2(b) of this Agreement shall be valid only if declared advisable by the Board
of Directors and approved by the affirmative vote of the common stockholders required to alter, amend or repeal Article X of the
Company’s Charter.

 

(c)          Issuer
Free Writing Prospectus. The Company represents and agrees that, unless it obtains the prior consent of Holders of a majority
of the Registrable Shares that are registered under a Shelf Registration Statement at such time or the consent of the managing
underwriter in connection with any Underwritten Offering of Registrable Shares under such Shelf Registration Statement, and each
Holder represents and agrees that, unless it obtains the prior consent of the Company and any such underwriter, it will not make
any offer relating to the Shares pursuant to such Shelf Registration Statement that would constitute an “issuer free writing
prospectus,” as defined in Rule 433 (an “Issuer Free Writing Prospectus”), or that would otherwise
constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission. The
Company represents that any such Issuer Free Writing Prospectus will not include any information that conflicts with the information
contained in any such Shelf Registration Statement or the related Prospectus, and any such Issuer Free Writing Prospectus, when
taken together with the information in such Shelf Registration Statement and the related Prospectus, will not include any untrue
statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading.

 

    	 	- 7 -	 

     

    

 

(d)          Underwriting.
The Company shall advise all Holders of the lead managing underwriter(s) for the Underwritten Offering proposed under the IPO Registration
Statement. The right of any such Holder’s Registrable Shares to be included in the IPO Registration Statement pursuant to
Section 2(b) shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s
Registrable Shares in the underwriting to the extent provided herein. All Holders proposing to distribute their Registrable Shares
through such underwriting shall enter into an underwriting agreement in customary form with the managing underwriter(s) selected
for such underwriting and complete and execute any questionnaires, powers of attorney, indemnities, custody agreements, securities
escrow agreements and other documents, including opinions of counsel, reasonably required under the terms of such underwriting,
and furnish to the Company such information as the Company may reasonably request in writing for inclusion in the Registration
Statement relating to such Underwritten Offering; provided, however, that no Holder shall be required to make any
representations or warranties to or agreements with the Company or the underwriters other than representations, warranties or agreements
(1) regarding such Holder and such Holder’s intended method of distribution, (2) required by law or (3) reasonably requested
by the underwriters. Notwithstanding any other provision of this Agreement, if the managing underwriter(s) determine(s) in good
faith that marketing factors require a limitation on the number of shares to be included in the initial public offering, then the
managing underwriter(s) may exclude shares (including Registrable Shares) from the IPO Registration Statement and Underwritten
Offering, and any shares included in such IPO Registration Statement and Underwritten Offering shall be allocated first,
to the Company, and second, to each of the Holders requesting inclusion of their Registrable Shares in such IPO Registration
Statement (on a pro rata basis based on the total number of Registrable Shares then held by each such Holder who is requesting
inclusion); provided, however, that the number of Registrable Shares to be included in the IPO Registration Statement
shall not be reduced unless all other securities of the Company held by (i) officers, directors, other employees of the Company
and consultants and (ii) other holders of the Company’s capital stock with registration rights that are inferior (with
respect to such reduction) to the registration rights of the Holders set forth herein, are first entirely excluded from the underwriting
and registration; provided, further, however, that Holders of Registrable Shares shall be permitted to include
Registrable Shares comprising at least 25% of the total securities included in the Underwritten Offering proposed under the IPO
Registration Statement.

 

By electing to include the Registrable Shares
in the IPO Registration Statement pursuant to Section 2(b), the Holder of such Registrable Shares shall be deemed to have
agreed not to effect any public sale or distribution of securities of the Company of the same or similar class or classes of the
securities included in the IPO Registration Statement or any securities convertible into or exchangeable or exercisable for such
securities, including a sale pursuant to Rule 144 or Rule 144A under the Securities Act, during such periods as reasonably
requested (but in no event for a period longer than 30 days prior to and 180 days following the effective date of the
IPO Registration Statement) by the representatives of the underwriters, in an Underwritten Offering, or by the Company in any other
registration.

 

Once a Holder has elected to include Registrable
Shares in the IPO Registration Statement pursuant to Section 2(b), such Holder may elect to withdraw therefrom only by providing
written notice to the Company and the managing underwriter(s), delivered prior to the later of (i) two Business Days after the
IPO price range is communicated by the Company to such Holder and (ii) ten Business Days prior to the effective date of the
IPO Registration Statement. Any Registrable Shares excluded or withdrawn from such underwriting shall be excluded and withdrawn
from the IPO Registration Statement.

 

    	 	- 8 -	 

     

    

 

(e)          Expenses.
The Company shall pay all Registration Expenses in connection with the registration and listing of the Registrable Shares pursuant
to this Agreement. Each Holder participating in a registration pursuant to this Section 2 shall bear such Holder’s proportionate
share (based on the total number of Registrable Shares sold in such registration) of all discounts and commissions payable to underwriters
or brokers and all transfer taxes and transfer fees in connection with a registration of Registrable Shares pursuant to this Agreement.

 

(f)          Penalty
Provisions. If the Company does not confidentially submit or file a Shelf Registration Statement by November 1, 2015 (the “Filing
Deadline”), other than as a result of the Commission being unable to accept such filings on the Filing Deadline in which
case the Filing Deadline shall be the first date thereafter that the Commission is able to accept such filings (the failure by
the Company to so confidentially submit or file a Shelf Registration Statement by the Filing Deadline shall be a “Registration
Default”), then David Bistricer, if employed by the Company and at any time owed an annual and/or discretionary bonus
with respect to services performed in 2015, whether under an employment agreement with the Company, a bonus plan or any other bonus
arrangement, including any bonus compensation for which payment would otherwise be deferred until after that fiscal year, shall
forfeit 50% of the amount that would otherwise be payable to him in respect of such bonus, and shall thereafter forfeit an additional
10% of the amount that would otherwise be payable to him in respect of such bonus for each complete calendar month any such Registration
Default continues after November 1, 2015, until a Shelf Registration Statement is filed. The Company acknowledges and agrees
that that no bonuses, compensation, awards, equity compensation or other amounts shall be payable or granted in lieu of or to make
Mr. Bistricer whole for any such forfeited bonus.

 

(g)          JOBS
ACT Submissions. For purposes of this Agreement, if the Company elects to confidentially submit a draft of a Shelf Registration
Statement with the Commission pursuant to the JOBS Act, the initial confidential submission of the draft Shelf Registration Statement
with the Commission shall be deemed to be a filing with the Commission for purposes of this Section 2 and the date on which the
Company makes such confidential submission will be deemed to be the date of the initial filing of such Shelf Registration Statement.

 

3.           Special
Election Meetings.

 

(a)          Special
Election Meeting Following First Trigger Date. Notwithstanding any other provision in this Agreement to the contrary, unless
(A) a Registration Statement registering the resale of the Registrable Shares has been declared effective by the Commission by
the earlier of (i) the first anniversary of the Closing Date or (ii) if the Company closes its initial public offering pursuant
to the IPO Registration Statement prior to the first anniversary of the Closing Date, the date that is 60 days after the closing
of such initial public offering (such earlier date, the “First Trigger Date”) and (B) the Registrable Shares
have been listed for trading on a National Securities Exchange by the First Trigger Date, a special meeting of the Company’s
stockholders (a “Special Election Meeting”) shall be called in accordance with the Charter and Bylaws of the
Company, unless Holders of at least two-thirds of the Registrable Shares (other than Registrable Shares that are Insider Shares)
waive the requirement that the Company hold such Special Election Meeting. Such Special Election Meeting shall occur as soon as
practicable following the First Trigger Date, but in no event more than 60 days after the First Trigger Date.

 

    	 	- 9 -	 

     

    

 

(b)          Purposes
of First Special Election Meeting. The Special Election Meeting pursuant to Section 3(a)(A) shall be called solely for the
purposes of considering and voting upon proposals to (i) expand the size of the Board of Directors of the Company (the “Board
of Directors”) by two, thereby creating two vacancies on the Board of Directors of the Company, and (ii) electing two
new directors to fill such two vacancies on the Board of Directors. The Special Election Meeting pursuant to Section 3(a)(B) shall
be called solely for the purposes of considering and voting upon proposals to (i) expand the size of the Board of Directors by
three, thereby creating three vacancies on the Board of Directors of the Company, and (ii) electing three new directors to fill
such three vacancies on the Board of Directors; provided, that the size of the Board shall not be expanded by more than three and
not more than three new directors may be elected to fill the vacancies created thereby if the conditions in Section 3(a)(A) and
Section 3(a)(B) have not been satisfied.

 

(c)          Special
Election Meeting Following Second Trigger Date. Notwithstanding any other provision in this Agreement to the contrary, unless
(A) a Registration Statement registering the resale of the Registrable Shares has been declared effective by the Commission by
the first anniversary of the First Trigger Date (the “Second Trigger Date”) and (B) the Registrable Shares have
been listed for trading on a National Securities Exchange by the Second Trigger Date, a Special Election Meeting shall be called
in accordance with the Charter and Bylaws of the Company, unless Holders of at least two-thirds of the outstanding Registrable
Shares (other than Registrable Shares that are Insider Shares) waive the requirement that the Company hold such Special Election
Meeting. Such Special Election Meeting shall occur as soon as practicable following the Second Trigger Date, but in no event more
than 60 days after the Second Trigger Date.

 

(d)          Purposes
of Second Special Election Meeting. Such Special Election Meeting pursuant to Section 3(c) shall be called solely for the purposes
of: (i) considering and voting upon proposals to remove each then-serving director of the Company; and (ii) electing such number
of directors as there are then vacancies on the Board of Directors of the Company (including any vacancies created by the removal
of any director pursuant to this Section 3(d)). The removal of any director pursuant to Section 3(d)(i) hereof shall be effective
immediately upon the receipt of the final report of the Inspector of Elections for the Special Election Meeting of the result of
the vote on the proposal to remove such director.

 

(e)          Nominations.
Nominations of individuals for election to the Board of Directors of the Company at a Special Election Meeting may only be made
(i) [reserved] (ii) in accordance with the Company’s Bylaws, or (iii) upon receipt by the Company of written notice of Holders
entitled to cast not less than 20% of all the votes entitled to be cast at the Special Election Meeting, which notice, to be effective,
shall identify the Nominees (as defined below) and include the information, consents and resignations required under Section 3(f)
hereof, in addition to any other information required by the Company’s Charter or Bylaws; provided, however, that
each Nominee must be “independent” (as defined in Rule 303A in the New York Stock Exchange Listed Company Manual and
any other National Securities Exchange on which the Company’s securities are then listed) and must satisfy the basic requirements
of financial literacy and integrity established for nominees of the Board of Directors generally by the Nominating and Corporate
Governance Committee or the Board of Directors. Each individual whose nomination is made in accordance with this Section 3(e) is
hereinafter referred to as a “Nominee.”

 

    	 	- 10 -	 

     

    

 

(f)          Procedure
for Stockholder Nominations. As a condition for the Company being obligated to call a Special Election Meeting and as a condition
for nominations of individuals for election to the Board of Directors to be properly brought before the Special Election Meeting
by Holders pursuant to Section 3(e) hereof, the Holders must have given notice thereof in writing to the Secretary of the Company
not later than 5:00 p.m., Eastern Time, on the 10th day after the First Trigger Date or the Second Trigger Date, as
applicable. Such notice shall (1) include each proposed Nominee’s written consent to serve as a director, if elected, (2)
in the case of a Special Election Meeting following the Second Trigger Date, include an irrevocable resignation by each proposed
Nominee that will automatically be effective upon the effectiveness of a Shelf Registration Statement or listing with a National
Securities Exchange, as applicable, and (3) specify, in addition to any information required by the Company’s Charter or
Bylaws:

 

(i)          as
to each proposed Nominee, the name, age, business address and residence address of such proposed Nominee and all other information
relating to such proposed Nominee that would be required, pursuant to Regulation 14A promulgated under the Exchange Act (or any
successor provision), to be disclosed in a contested solicitation of proxies with respect to the election of such individual as
a director; and

 

(ii)         as
to each Holder giving the notice, the class, series and number of all shares of beneficial interest of the Company that are owned
by such Holder, beneficially or of record.

 

(g)          Notice.
The Secretary of the Company shall give to each stockholder entitled to vote at, or to receive notice of, such meeting at such
stockholder’s address as it appears in the share transfer records of the Company, notice of such Special Election Meeting
in accordance with applicable law and the Company’s Charter and Bylaws setting forth (i) the time and place of the Special
Election Meeting, (ii) the purposes for which the Special Election Meeting has been called and (iii) the name of each Nominee.

 

(h)          Special
Voting Shares and Insider Shares. The Holders of Special Voting Shares and shares of Common Stock held by the executive officers
and directors of the Company and their Affiliates (“Insider Shares”) shall not be permitted to vote in any Special
Election Meeting. So long as any director who was elected to the Board of Directors at a Special Election Meeting continues to
serve in such capacity as a director of the Company, the Special Voting Shares and Insider Shares shall not be entitled to vote
in the removal of any such director. For the avoidance of doubt, at any annual or special meeting of stockholders that is convened
subsequent to a Special Election Meeting and prior to the date on which the Common Stock is listed on a National Securities Exchange,
the special voting shares and Insider Shares shall not be entitled to vote in the removal of any director who was elected to the
Board of Directors at a Special Election Meeting, in the expansion of the size of the Board or in the re-election of any new director
who was initially elected at a Special Election Meeting.

 

    	 	- 11 -	 

     

    

 

4.           Rules 144
and 144A Reporting

 

With a view to making available the benefits
of certain rules and regulations of the Commission that may at any time permit the sale of the Registrable Shares to the public
without registration, the Company agrees to use commercially reasonable efforts to:

 

(a)          make
and keep current public information available, as those terms are understood and defined in Rule 144 under the Securities
Act, at all times after the effective date of the first registration statement under the Securities Act filed by the Company for
an offering of its securities to the general public;

 

(b)          to
file with the Commission in a timely manner all reports and other documents required to be filed by the Company under the Securities
Act and the Exchange Act (at any time after it has become subject to such reporting requirements);

 

(c)          so
long as a Holder owns any Registrable Shares, if the Company is not required to file reports and other documents under the Securities
Act and the Exchange Act, it will make available other information as required by, and so long as necessary to permit sales of
Registrable Shares pursuant to, Rule 144 or Rule 144A, and in any event shall make available (either by mailing a copy
thereof to an address provided by such Holder to the Company, by posting on the Company’s website, by including in a Registration
Statement filed by the Company with the Commission, by press release or otherwise) to each Holder a copy of:

 

(i)          the
Company’s annual financial statements (including at least balance sheets, statements of operations, statements of changes
in stockholders’ equity and statements of cash flows) prepared in accordance with U.S. generally accepted accounting principles
in the United States, accompanied by an audit report of the Company’s independent accountants, no later than 90 days
after the end of each fiscal year of the Company; and

 

(ii)         the
Company’s unaudited quarterly financial statements (including at least balance sheets, statements of operations and statements
of cash flows) prepared in a manner consistent with the preparation of the Company’s annual financial statements, no later
than 45 days after the end of each of the first three fiscal quarters of the Company;

 

(d)          if
the Company is not required to file reports and other documents under the Securities Act and the Exchange Act, the Company shall
hold, a reasonable time after the availability of the financial statements described in clause (c) above and upon reasonable notice
to the Holders and FBR (either by mail, by posting on the Company’s website, or by press release), a quarterly investor conference
call to discuss such financial statements, which call will also include an opportunity for the Holders to ask questions of management
with regard to such financial statements, and will also reasonably cooperate with, and make management reasonably available to,
FBR personnel in connection with making Company information available to investors; provided, that (1) during any period
when the Company has on file or within 30 days thereafter intends to file a Registration Statement with the Commission which has
not yet been declared effective or which relates to a proposed initial public offering that has not yet been completed, the Company
shall not be required to present information during such investor conference that is different than information contained in such
Registration Statement and (2) during any period between when the Company has confidentially submitted a draft Registration Statement
and such draft Registration Statement has not been declared effective or during which the Company intends to confidentially submit
or file a Registration Statement within the next 30 days, any obligations under this Section 4(d) shall be limited to the extent
necessary to ensure compliance with applicable quiet period restrictions until such Registration Statement is filed or the intention
to file such Registration Statement has been abandoned; and

 

    	 	- 12 -	 

     

    

 

(e)          so
long as a Holder owns any Registrable Shares, to furnish to the Holder promptly upon reasonable request (i) a written statement
by the Company as to its compliance with the reporting requirements of Rule 144 (at any time after 90 days after the
effective date of the first Registration Statement filed by the Company for an offering of its securities to the general public),
(ii) a copy of the most recent annual or quarterly report of the Company, and (iii) such other reports and documents
of the Company, and take such further actions, as a Holder may reasonably request in availing itself of any rule or regulation
of the Commission allowing a Holder to sell any such Registrable Shares without registration.

 

5.           Registration
Procedures

 

In connection with the obligations of the Company
with respect to a Shelf Registration Statement pursuant to this Agreement, the Company shall use its commercially reasonable efforts
to effect or cause to be effected the registration of the Registrable Shares under the Securities Act to permit the sale of such
Registrable Shares by the Holder or Holders in accordance with the Holder’s or Holders’ intended method or methods
of distribution, and the Company shall:

 

(a)          notify
FBR and Review Counsel, in writing, at least three Business Days prior to filing a Shelf Registration Statement, of its intention
to file a Shelf Registration Statement with the Commission and, at least two Business Days prior to such filing, provide a
copy of a draft of the Shelf Registration Statement to FBR and Review Counsel for review and comment; prepare and file with the
Commission, as specified in this Agreement, a Shelf Registration Statement, which Shelf Registration Statement shall comply as
to form in all material respects with the requirements of the Securities Act and the applicable form and include all financial
statements required by the Commission to be filed therewith; notify FBR and Review Counsel in writing, as soon as reasonably practicable
prior to filing of any amendment or supplement to such Shelf Registration Statement and, as soon as reasonably practicable prior
to filing, provide a copy of such amendment or supplement to FBR and Review Counsel for review and comment; promptly following
receipt from the Commission, provide to FBR and Review Counsel copies of any comments made by the staff of the Commission relating
to such Shelf Registration Statement and of the Company’s responses thereto for review and comment; and use its commercially
reasonable efforts to cause such Shelf Registration Statement to become effective as soon as practicable after filing and to remain
effective, subject to Section 6 hereof, until the earliest of (i) such time as all Registrable Shares covered thereby
have been sold in accordance with the intended distribution of such Registrable Shares, (ii) there are no Registrable Shares
outstanding or (iii) the first anniversary of the effective date of such Shelf Registration Statement (subject to extension
as provided in Section 6(c) hereof and the condition that the Registrable Shares have been transferred to an unrestricted
CUSIP, are listed or included on a National Securities Exchange pursuant to Section 5(n) of this Agreement, or on an alternative
trading system with the Registrable Shares qualified under the applicable state securities or “blue sky” laws of all
50 states); provided, however, that if the Company has an effective Shelf Registration Statement on Form S-11
(or other form then available to the Company) under the Securities Act and becomes eligible to use Form S-3 or such other
short-form registration statement form under the Securities Act, the Company may, upon ten Business Days prior written notice
to all Holders, register any Registrable Shares registered but not yet distributed under the effective Shelf Registration Statement
on such a short-form Shelf Registration Statement and, once the short-form Shelf Registration Statement is declared effective,
de-register such shares under the previous Registration Statement or transfer the filing fees from the previous Registration Statement
(such transfer pursuant to Rule 429, if applicable) unless any Holder registered under the initial Shelf Registration Statement
notifies the Company within five Business Days of receipt of the Company notice that such a registration under a new Shelf
Registration Statement and de-registration of the initial Shelf Registration Statement would materially interfere with its distribution
of Registrable Shares already in progress, in which case, the Company shall delay the effectiveness of the short-form Registration
Statement and termination of the then-effective initial Shelf Registration Statement or any short-form Registration Statement for
a period of not less than 30 days from the date that the Company receives the notice from such Holders requesting a delay;

 

    	 	- 13 -	 

     

    

 

(b)          subject
to Section 5(i) hereof, (i) prepare and file with the Commission such amendments and post-effective amendments to each
such Shelf Registration Statement as may be necessary to keep such Shelf Registration Statement effective for the period described
in Section 5(a) hereof; (ii) cause each Prospectus contained therein to be supplemented by any required Prospectus supplement,
and as so supplemented to be filed pursuant to Rule 424 or any similar rule that may be adopted under the Securities Act;
and (iii) comply with the provisions of the Securities Act with respect to the disposition of all securities covered by each
Shelf Registration Statement during the applicable period in accordance with the intended method or methods of distribution by
the selling Holders thereof;

 

(c)          furnish
to the Holders, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto and such other documents as such Holder may reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Shares; the Company consents, subject to Section 6 hereof, to the use of such Prospectus, including
each preliminary Prospectus, by the Holders, if any, in connection with the offering and sale of the Registrable Shares covered
by any such Prospectus;

 

(d)          use
its commercially reasonable efforts to register or qualify, or obtain exemption from registration or qualification for, all Registrable
Shares by the time the applicable Registration Statement is declared effective by the Commission under all applicable state securities
or “blue sky” laws of such jurisdictions as FBR or any Holder of Registrable Shares covered by a Registration Statement
shall reasonably request in writing, keep each such registration or qualification or exemption effective during the period such
Registration Statement is required to be kept effective pursuant to Section 5(a) and do any and all other acts and things
that may be reasonably necessary or advisable to enable such Holder to consummate the disposition in each such jurisdiction of
such Registrable Shares owned by such Holder; provided, however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction or to register as a broker or dealer in such jurisdiction where it would not otherwise
be required to qualify but for this Section 5(d) and except as may be required by the Securities Act, (ii) subject itself
to taxation in any such jurisdiction, or (iii) submit to the general service of process in any such jurisdiction;

 

    	 	- 14 -	 

     

    

 

(e)          use
its commercially reasonable efforts to cause all Registrable Shares covered by such Shelf Registration Statement to be registered
and approved by such other governmental agencies or authorities as may be necessary to enable the Holders thereof to consummate
the disposition of such Registrable Shares;

 

(f)          notify
FBR and each Holder promptly and, if requested by FBR or any Holder, confirm such advice in writing (1) when a Shelf Registration
Statement has become effective and when any post-effective amendments and supplements thereto become effective, (2) of the
issuance by the Commission or any state securities authority of any stop order suspending the effectiveness of a Shelf Registration
Statement or the initiation of any Proceeding for that purpose, (3) of any request by the Commission or any other federal,
state or foreign governmental authority for (A) amendments or supplements to a Shelf Registration Statement or related Prospectus
or (B) additional information and (4) of the happening of any event during the period a Shelf Registration Statement
is effective as a result of which such Shelf Registration Statement or the related Prospectus or any document incorporated by reference
therein contains any untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which they were made, not misleading (which information
shall be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) and (5) at
the request of any such Holder, subject to Section 6 hereof, promptly to furnish to such Holder a reasonable number of copies of
a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchaser of such
securities, such Prospectus shall not include an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made,
not misleading;

 

(g)          use
its commercially reasonable efforts to avoid the issuance of, or if issued, to obtain the withdrawal of, any order enjoining or
suspending the use or effectiveness of a Shelf Registration Statement or suspending the qualification of (or exemption from qualification
of) any of the Registrable Shares for sale in any jurisdiction, as promptly as practicable;

 

(h)          except
as provided in Section 6 hereof, upon the occurrence of any event contemplated by Section 5(f)(4) hereof, use its commercially
reasonable efforts to promptly prepare a supplement or post-effective amendment to a Shelf Registration Statement or the related
Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered
to the purchasers of the Registrable Shares, such Prospectus will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading;

 

    	 	- 15 -	 

     

    

 

(i)          in
the case of an Underwritten Offering, if reasonably requested by the representative of the underwriters or any Holders of Registrable
Shares being sold in connection with such offering, (i) promptly incorporate in a Prospectus supplement or post-effective
amendment such information as the representative of the underwriters, if any, or such Holders indicate relates to them or that
they reasonably request be included therein and (ii) make all required filings of such Prospectus supplement or such post-effective
amendment as soon as reasonably practicable after the Company has received notification of the matters to be incorporated in such
Prospectus supplement or post-effective amendment;

 

(j)          in
the case of an Underwritten Offering, use its commercially reasonable efforts to furnish to the underwriters: (i) an opinion
of counsel for the Company, addressed to the underwriters, dated the date of each closing under the underwriting agreement, covering
customary matters, reasonably satisfactory to such Holder and the underwriters and such counsel; and (ii) a “comfort”
letter, addressed to the underwriters and the Board of Directors, dated the effective date of such Registration Statement and the
date of each closing under the underwriting agreement, signed by the independent public accountants who have certified the Company’s
financial statements included in such Registration Statement, covering substantially the same matters with respect to such Shelf
Registration Statement (and the Prospectus included therein) and with respect to events subsequent to the date of such financial
statements, as are customarily covered in accountants’ letters delivered to underwriters in underwritten public offerings
of securities;

 

(k)          enter
into customary agreements (including in the case of an Underwritten Offering, an underwriting agreement in customary form and reasonably
satisfactory to the Company) and take all other reasonable action in connection therewith in order to expedite or facilitate the
distribution of the Registrable Shares included in such Shelf Registration Statement and, in the case of an Underwritten Offering,
make representations and warranties to the Holders covered by such Shelf Registration Statement and to the underwriters in such
form and scope as are customarily made by issuers to underwriters in underwritten offerings and confirm the same to the extent
customary if and when requested;

 

(l)          make
available for inspection during normal business hours upon reasonable request by representatives of the Holders and the representative
of any underwriters participating in any disposition pursuant to a Shelf Registration Statement and any special counsel or accountants
retained by such Holders or underwriters, such financial and other records, pertinent corporate documents and properties of the
Company as are reasonable in the context of such offering, and cause the respective officers, directors and employees of the Company
to supply all information reasonably requested by any such representatives, the representative of the underwriters, counsel thereto
or accountants in connection with a Shelf Registration Statement; provided, however, that such records, documents or information
that the Company determines, in good faith, to be confidential and notifies such representatives, representative of the underwriters,
counsel thereto or accountants are confidential shall not be disclosed by such representatives, representative of the underwriters,
counsel thereto or accountants unless (i) the disclosure of such records, documents or information is necessary to avoid or
correct a misstatement or omission in a Shelf Registration Statement or Prospectus, (ii) the release of such records, documents
or information is ordered pursuant to a subpoena or other order from a court of competent jurisdiction, or (iii) such records,
documents or information have been generally made available to the public; provided, however, that the representatives
of the Holders and any underwriters will use commercially reasonable efforts, to the extent practicable, to coordinate the foregoing
inspection and information gathering and not materially disrupt the Company’s business operations; provided, further,
that, notwithstanding anything to the contrary in this Agreement, the Company shall not be required to provide any confidential
information to any Person without such Person’s prior written agreement to keep such information confidential;

 

    	 	- 16 -	 

     

    

 

(m)          use
its commercially reasonable efforts (including, without limitation, seeking to cure any deficiencies cited by the exchange or market
in the Company’s listing or inclusion application) to list or include all Registrable Shares on the National Securities exchange
on which shares of the Common Stock are listed;

 

(n)          prepare
and file in a timely manner all documents and reports required by the Exchange Act and, to the extent the Company’s obligation
to file such reports pursuant to Section 15(d) of the Exchange Act expires prior to the expiration of the effectiveness period
of the Shelf Registration Statement as required by Section 5(a) hereof, the Company shall register the Registrable Shares
under the Exchange Act and shall maintain such registration through the effectiveness period required by Section 5(a) hereof;

 

(o)          provide
a CUSIP number for all Registrable Shares, not later than the effective date of the Shelf Registration Statement;

 

(p)          (i) otherwise
use its commercially reasonable efforts to comply with all applicable rules and regulations of the Commission, (ii) make generally
available to its stockholders, as soon as reasonably practicable, earnings statements covering at least 12 months beginning
after the effective date of the Shelf Registration Statement that satisfy the provisions of Section 11(a) of the Securities
Act and Rule 158, but in no event later than 90 days after the end of each fiscal year of the Company and (iii) not
file any Shelf Registration Statement or Prospectus or amendment or supplement to such Shelf Registration Statement or Prospectus
to which any Holder of Registrable Shares covered by any such Shelf Registration Statement shall have reasonably objected on the
grounds that such Shelf Registration Statement or Prospectus or amendment or supplement does not comply in all material respects
with the requirements of the Securities Act;

 

(q)          provide
and cause to be maintained a registrar and transfer agent for all Registrable Shares covered by any Shelf Registration Statement
from and after a date not later than the effective date of such Shelf Registration Statement;

 

(r)          in
connection with any sale or transfer of the Registrable Shares (whether or not pursuant to a Registration Statement) that will
result in the securities being delivered no longer being Registrable Shares, cooperate with the Holders and the representative
of the underwriters, if any, to facilitate the timely preparation and delivery of certificates representing the Registrable Shares
to be sold, which certificates shall not bear any restrictive transfer legends (other than as required by the Company’s organizational
documents) and to enable such Registrable Shares to be in such denominations and registered in such names as the representative
of the underwriters, if any, or the Holders may request at least three Business Days prior to any sale of the Registrable Shares;

 

    	 	- 17 -	 

     

    

 

(s)          in
connection with the initial filing of a Shelf Registration Statement and each amendment thereto with the Commission pursuant to
Section 2(a) hereof, cooperate with FBR in connection with the filing with FINRA of all forms and information required or
requested by FINRA in order to obtain written confirmation from FINRA that FINRA does not object to the fairness and reasonableness
of the underwriting terms and arrangements (or any deemed underwriting terms and arrangements) (each such written confirmation,
a “No Objections Letter”) relating to the resale of Registrable Shares pursuant to the Shelf Registration Statement,
including, without limitation, information provided to FINRA through its Public Offering System, and pay all actual costs, fees
and expenses incident to FINRA’s review of the Shelf Registration Statement and the related underwriting terms and arrangements,
including, without limitation, all filing fees associated with any filings or submissions to FINRA and the legal expenses, filing
fees and other disbursements of FBR and any other FINRA member that is the Holder of, or is affiliated or associated with an owner
of, Registrable Shares included in the Shelf Registration Statement (including in connection with any initial or subsequent member
filing);

 

(t)          in
connection with the initial filing of a Shelf Registration Statement and each amendment thereto with the Commission pursuant to
Section 2(a) hereof, provide to FBR and its representatives, upon reasonable notice, the reasonable opportunity to conduct
customary due diligence, including, without limitation, an inquiry of the Company’s financial and other records, and make
reasonably available members of its management for questions regarding information which FBR may request in order to fulfill any
due diligence obligation on its part;

 

(u)          upon
effectiveness of the first Shelf Registration Statement filed under this Agreement, take such actions and make such filings as
are necessary to effect the registration of the Common Stock under the Exchange Act simultaneously with or immediately following
the effectiveness of the Shelf Registration Statement; and

 

(v)         in
the case of an Underwritten Offering, use its commercially reasonable efforts to cooperate and assist in any filings required to
be made with FINRA and in the performance of any due diligence investigation by any underwriter and its counsel (including any
“qualified independent underwriter,” if applicable) that is required to be retained in accordance with the rules and
regulations of FINRA.

 

The Company may require the Holders to furnish
(and each Holder shall furnish) to the Company such information regarding the proposed distribution by such Holder of such Registrable
Shares as the Company may from time to time reasonably request in writing or as shall be required to effect the registration of
the Registrable Shares, and no Holder shall be entitled to be named as a selling stockholder in any Registration Statement and
no Holder shall be entitled to use the Prospectus forming a part thereof if such Holder does not provide such information to the
Company. Any Holder that sells Registrable Shares pursuant to a Registration Statement or as a selling security holder pursuant
to an Underwritten Offering shall be required to be named as a selling stockholder in the related prospectus and to deliver a prospectus
to purchasers.

 

    	 	- 18 -	 

     

    

 

Each Holder further agrees to furnish promptly
to the Company in writing all information required from time to time to make the information previously furnished by such Holder
not misleading. Each Holder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind
described in Section 5(f)(3) or 5(f)(4) hereof, such Holder will immediately discontinue disposition of Registrable Shares
pursuant to a Registration Statement until such Holder’s receipt of the copies of the supplemented or amended Prospectus
or the Company has otherwise notified such Holder that the disposition of Registrable Shares may be resumed. If so directed by
the Company, such Holder will deliver to the Company (at the expense of the Company) all copies in its possession, other than permanent
file copies then in such Holder’s possession, of the Prospectus covering such Registrable Shares current at the time of receipt
of such notice.

 

(w)          Notwithstanding
any other provision of this Agreement, if the Commission or any rules, regulations or guidance thereof sets forth a limitation
of the number of Registrable Shares or other shares of Common Stock permitted to be registered on a particular Shelf Registration
Statement (and notwithstanding that the Company used diligent efforts to advocate with the Commission for the registration of all
or a greater number of Registrable Shares), the number of Registrable Shares or other shares of Common Stock to be registered on
such Shelf Registration Statement will be reduced as follows: first, the Company shall reduce or eliminate the shares of Common
Stock to be included by any Person other than a Holder; second, the Company shall reduce or eliminate any shares of Common Stock
to be included by the Company; and third, the Company shall reduce the number of Registrable Shares to be included by all other
Holders on a pro rata basis based on the total number of unregistered Registrable Shares held by such Holders, subject to a determination
by the Commission that certain Holders must be reduced before other Holders based on the number of Registrable Shares held by such
Holders. In the event the Company amends the Shelf Registration Statement or files a Shelf Registration Statement, the Company
will use its commercially reasonable efforts to file with the Commission, as promptly as allowed by Commission any rules, regulations
or guidance thereof, one or more Shelf Registration Statements to register for resale those Registrable Shares that were not registered
for resale on the Shelf Registration Statement.

 

    	 	- 19 -	 

     

    

 

6.           Black-Out
Period

 

(a)          Subject
to the provisions of this Section 6 and a good faith determination by the Company that it is in the best interests of the
Company to suspend the use of the Registration Statement, following the effectiveness of a Registration Statement (and the filings
with any international, federal or state securities commissions), the Company, by written notice to FBR and the Holders, may direct
the Holders to suspend sales of the Registrable Shares pursuant to a Registration Statement for such times as the Company reasonably
may determine is necessary and advisable (but in no event for more than an aggregate of 90 days in any rolling 12 month period
commencing on the Closing Date), if any of the following events shall occur: (i) the representative of the underwriters of
an Underwritten Offering has advised the Company that the sale of Registrable Shares pursuant to the Registration Statement should
be suspended in connection with such Underwritten Offering; (ii) the Company shall have determined in good faith that (A) the
offer or sale of any Registrable Shares would materially impede, delay or interfere with any proposed financing, offer or sale
of securities, acquisition, merger, tender offer, business combination, corporate reorganization or other significant transaction
involving the Company, (B) after the advice of counsel, the sale of Registrable Shares pursuant to the Registration Statement
would require disclosure of non-public material information not otherwise required to be disclosed under applicable law, and (C) either
(x) the Company has a bona fide business purpose for preserving the confidentiality of such transaction, (y) disclosure
would have a material adverse effect on the Company or the Company’s ability to consummate such transaction, or (z) the
disclosure would render the Company unable to comply with Commission requirements, in each case under circumstances that would
make it impractical or inadvisable to cause the Registration Statement (or such filings) to become effective or to promptly amend
or supplement the Registration Statement on a post-effective basis, as applicable; or (iii) the Company shall have determined
in good faith, after the advice of counsel, that it is required by law, rule or regulation or that it is in the best interests
of the Company to supplement the Registration Statement or file a post-effective amendment to the Registration Statement in order
to incorporate information into the Registration Statement for the purpose of (1) including in the Registration Statement
any prospectus required under Section 10(a)(3) of the Securities Act; (2) reflecting in the prospectus included in the
Registration Statement any facts or events arising after the effective date of the Registration Statement (or of the most recent
post-effective amendment) that, individually or in the aggregate, represent a fundamental change in the information set forth therein;
or (3) including in the prospectus included in the Registration Statement any material information with respect to the plan
of distribution not disclosed in the Registration Statement or any material change to such information. Upon the occurrence of
any such suspension, the Company shall use its commercially reasonable efforts to cause the Registration Statement to become effective
or to promptly amend or supplement the Registration Statement on a post-effective basis or to take such action as is necessary
to make resumed use of the Registration Statement compatible with the Company’s best interests, as applicable, so as to permit
the Holders to resume sales of the Registrable Shares as soon as practicable.

 

(b)          In
the case of an event that causes the Company to suspend the use of a Registration Statement (a “Suspension Event”),
the Company shall give written notice (a “Suspension Notice”) to FBR and the Holders to suspend sales of the
Registrable Shares. Such notice shall not be required to state generally the basis for the notice if such basis is confidential.
Such suspension shall continue only for so long as the Suspension Event or its effect is continuing and the Company is using its
commercially reasonable efforts and taking all reasonable steps to terminate suspension of the use of the Registration Statement
as promptly as reasonably practicable. The Holders shall not effect any sales of the Registrable Shares pursuant to such Registration
Statement (or such filings) at any time after they have received a Suspension Notice from the Company and prior to receipt of an
End of Suspension Notice (as defined below). If so directed by the Company, each Holder will deliver to the Company (at the expense
of the Company) all copies other than permanent file copies then in such Holder’s possession of the Prospectus covering the
Registrable Shares at the time of receipt of the Suspension Notice. The Holders may recommence effecting sales of the Registrable
Shares pursuant to the Registration Statement (or such filings) following further notice to such effect (an “End of Suspension
Notice”) from the Company, which End of Suspension Notice shall be given by the Company to the Holders and FBR in the
manner described above promptly following the conclusion of any Suspension Event and its effect.

 

(c)          Notwithstanding
any provision herein to the contrary, if the Company shall give a Suspension Notice pursuant to this Section 6, the Company
agrees that it shall extend the period of time during which the applicable Registration Statement shall be maintained effective
pursuant to this Agreement by the number of days during the period from the date of receipt by the Holders of the Suspension Notice
to and including the date of receipt by the Holders of the End of Suspension Notice and provide copies of the supplemented or amended
Prospectus necessary to resume sales.

 

    	 	- 20 -	 

     

    

 

7.           Indemnification
and Contribution

 

(a)          The
Company agrees to indemnify and hold harmless (i) each Holder of Registrable Shares and any underwriter (as determined in
the Securities Act) for such Holder (including, if applicable, FBR), (ii) each Person, if any, who controls (within the meaning
of Section 15 of the Securities Act or Section 20(a) of the Exchange Act) any such Person described in clause (i)
(any of the Persons referred to in this clause (ii) being hereinafter referred to as a “Controlling Person”),
and (iii) the respective officers, directors, partners, members, employees, representatives and agents of any such Person
or any Controlling Person (any Person referred to in clause (i), (ii) or (iii) above may hereinafter be referred to as a “Purchaser
Indemnitee”), to the fullest extent lawful, from and against any and all losses, claims, damages, judgments, actions,
out-of-pocket expenses, and other liabilities (the “Liabilities”), including without limitation and as incurred,
reimbursement of all reasonable and documented costs of investigating, preparing, pursuing or defending any claim or action, or
any investigation or Proceeding by any governmental agency or body, commenced or threatened, including the reasonable and documented
fees and expenses of counsel to any Purchaser Indemnitee, joint or several, directly or indirectly related to, based upon, arising
out of or in connection with (x) with respect to any Registration Statement (or any amendment thereto), any untrue statement or
alleged untrue statement of a material fact contained therein or any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statement therein not misleading, or (y) with respect to any Prospectus
(or any amendment or supplement thereto) or any Issuer Free Writing Prospectus (or any amendment or supplement thereto), or any
preliminary Prospectus, any untrue statement or alleged untrue statement of a material fact contained therein or any omission or
alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, except insofar as such Liabilities arise out of or are
based upon any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with
information relating to any Purchaser Indemnitee furnished to the Company, or any underwriter in writing by such Purchaser Indemnitee
expressly for use therein. The Company shall notify FBR and the Holders promptly of the institution, threat or assertion of any
claim, Proceeding (including any governmental investigation that is not confidential), or litigation of which it shall have become
aware in connection with the matters addressed by this Agreement which involves the Company or a Purchaser Indemnitee. The indemnity
provided for herein shall remain in full force and effect regardless of any investigation made by or on behalf of any Purchaser
Indemnitee.

 

    	 	- 21 -	 

     

    

 

(b)          In
connection with any Registration Statement in which a Holder of Registrable Shares is participating, and as a condition to such
participation, such Holder agrees, severally and not jointly, to indemnify and hold harmless the Company and its officers, directors,
employees, representatives and agents and each Person who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act and their respective officers, directors, partners, members, employees, representatives
and agents of such Person or Controlling Person to the same extent as the foregoing indemnity from the Company to each Purchaser
Indemnitee, but only with reference to untrue statements or omissions or alleged untrue statements or omissions made in reliance
upon and in conformity with information relating to such Holder furnished to the Company in writing by such Holder expressly for
use in such Registration Statement (or any amendment thereto), Prospectus (or any amendment or supplement thereto), Issuer Free
Writing Prospectus (or any amendment or supplement thereto) or any preliminary Prospectus or any Liabilities arising out of or
based upon sales of Registrable Shares made by such Holder who has received notice of the suspension prior to such sale in violation
of Section 6(b). Absent gross negligence or willful misconduct, the liability of any Holder pursuant to this paragraph shall in
no event exceed the net proceeds received by such Holder from sales of Registrable Shares pursuant to such Registration Statement
(or any amendment thereto), Prospectus (or any amendment or supplement thereto), Issuer Free Writing Prospectus (or any amendment
or supplement thereto) or any preliminary Prospectus.

 

(c)          If
any suit, action, Proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted
against any Person in respect of which indemnity may be sought pursuant to paragraph (a) or (b) above, such Person (the “Indemnified
Party”) shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying Party”)
in writing of the commencement thereof (but the failure to so notify an Indemnifying Party shall not relieve it from any liability
which it may have under this Section 7, except to the extent the Indemnifying Party is materially prejudiced by the failure
to give notice), and the Indemnifying Party, upon request of the Indemnified Party, shall retain counsel reasonably satisfactory
to the Indemnified Party to represent the Indemnified Party and any others the Indemnifying Party may reasonably designate in such
Proceeding and shall pay the reasonable fees and expenses actually incurred by such counsel related to such Proceeding. Notwithstanding
the foregoing, in any such Proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party, unless (i) the employment of such counsel shall have been authorized
in writing by the Indemnifying Party in connection with the defense of such action, (ii) the Indemnifying Party shall not have
employed counsel to have charge of the defense of such action within a reasonable time or (iii) such Indemnified Party(ies) shall
have reasonably concluded (based on the advice of counsel) that counsel selected by the Indemnifying Party has an actual conflict
of interest or there are defenses available to the Indemnified Party(ies) which are different from those available to the Indemnifying
Party (in which case the Indemnifying Party shall not have the right to direct the defense of such action on behalf of the Indemnified
Party(ies)), in any of which events such reasonable and documented fees and expenses shall be borne by the Indemnifying Party and
paid as incurred (it being understood, however, that the Indemnifying Party shall not be liable for the fees and expenses of more
than one separate firm of counsel (in addition to local counsel) for all Indemnified Party(ies) in any one action or series of
related actions in the same jurisdiction representing the Indemnified Parties who are parties to such action), which firm shall
be designated in writing by those Indemnified Parties who sold a majority of the Registrable Shares sold by all such Indemnified
Parties and any such separate firm for the Company, the directors, officers, employees, representatives and agents and such control
Persons of the Company as shall be designated in writing by the Company). The Indemnifying Party shall not be liable for any settlement
of any Proceeding effected without its written consent. No Indemnifying Party shall, without the prior written consent of the Indemnified
Party, effect any settlement of any pending or threatened Proceeding in respect of which any Indemnified Party is or could have
been a party and indemnity could have been sought hereunder by such Indemnified Party, unless such settlement (i) includes an unconditional
release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding and (ii) does not
include a statement as to or an admission of, fault, culpability or a failure to act by or on behalf of the Indemnified Party.

 

    	 	- 22 -	 

     

    

 

(d)          If
the indemnification provided for in paragraphs (a) and (b) of this Section 7 is for any reason held to be unavailable
to an Indemnified Party in respect of any Liabilities referred to therein (other than by reason of the exceptions provided therein)
or is insufficient to hold harmless a party indemnified thereunder, then each Indemnifying Party under such paragraphs, in lieu
of indemnifying such Indemnified Party thereunder, shall contribute to the amount paid or payable by such Indemnified Party as
a result of such Liabilities in such proportion as is appropriate to reflect the relative benefits of the Indemnified Party on
the one hand and the Indemnifying Party(ies) on the other in connection with the statements or omissions that resulted in such
Liabilities and also the relative fault of the Indemnifying Party(ies) and the Indemnified Party, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and any Purchaser Indemnitees on the other shall be
determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission
or alleged omission to state a material fact relates to information supplied by the Company or by such Purchaser Indemnitees and
the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

 

(e)          The
parties agree that it would not be just and equitable if contribution pursuant to this Section 7 were determined by pro
rata allocation (even if such Indemnified Parties were treated as one entity for such purpose), or by any other method of allocation
that does not take account of the equitable considerations referred to in Section 7(d) above. The amount paid or payable by an
Indemnified Party as a result of any Liabilities referred to in Section 7(d) above shall be deemed to include, subject to the limitations
set forth above, any reasonable legal or other expenses actually incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this Section 7, in no event shall a Purchaser Indemnitee
be required to contribute any amount in excess of the amount by which the net proceeds received by such Purchaser Indemnitee from
sales of Registrable Shares exceeds the amount of any damages that such Purchaser Indemnitee has otherwise been required to pay
by reason of such untrue or alleged untrue statement or omission or alleged omission. For purposes of this Section 7, each
Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange
Act) FBR or a Holder of Registrable Shares shall have the same rights to contribution as FBR or such Holder, as the case may be,
and each Person, if any, who controls (within the meaning of Section 15 of the Securities Act or Section 20(a) of the
Exchange Act) the Company, and each officer, director, partner, employee, representative, agent or manager of the Company shall
have the same rights to contribution as the Company. Any party entitled to contribution will, promptly after receipt of notice
of commencement of any action, suit or Proceeding against such party in respect of which a claim for contribution may be made against
another party or parties, notify each party or parties from whom contribution may be sought, but the omission to so notify such
party or parties shall not relieve the party or parties from whom contribution may be sought from any obligation it or they may
have under this Section 7 or otherwise, except to the extent that any party is materially prejudiced by the failure to give
notice. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall
be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.

 

    	 	- 23 -	 

     

    

 

(f)          The
indemnity and contribution agreements contained in this Section 7 will be in addition to any liability which the Indemnifying
Parties may otherwise have to the Indemnified Parties referred to above. The Purchaser Indemnitee’s obligations to contribute
pursuant to this Section 7 are several in proportion to the respective number of Registrable Shares sold by each of the Purchaser
Indemnitees hereunder and not joint.

 

8.           Market
Stand-off Agreement

 

Each Holder hereby agrees that it shall not,
to the extent requested by the Company or the lead managing underwriter(s) of securities of the Company, directly or indirectly
sell, offer to sell (including without limitation any short sale), grant any option or otherwise transfer or dispose of any Registrable
Shares or other shares of Common Stock of the Company or any securities convertible into or exchangeable or exercisable for shares
of Common Stock of the Company then owned by such Holder (other than to donees or partners of the Holder who agree to be similarly
bound) (i) in the case of the Company and each of its officers, directors, managers and employees, in each case to the extent such
person or entity holds shares of Common Stock or securities convertible into or exchangeable or exercisable for shares of Common
Stock, for a period beginning on the effective date of, and continuing for 180 days following the effective date of, the IPO Registration
Statement to the Company; (ii) in the case of all other Holders who include Registrable Shares in the IPO Registration Statement,
beginning on the effective date of, and continuing for 180 days following the effective date of the IPO Registration Statement
of the Company, and (iii) in the case of all other Holders who do not include Registrable Shares in the IPO Registration Statement,
for a period of 60 days following the effective date of an IPO Registration Statement of the Company filed under the Securities
Act; provided, however,

 

(a)          the
restrictions above shall not apply to Registrable Shares sold pursuant to the IPO Registration Statement;

 

(b)          all
executive officers and directors of the Company then holding shares of Common Stock of the Company or securities convertible into
or exchangeable or exercisable for shares of Common Stock of the Company enter into agreements that are no less restrictive;

 

(c)          the
Holders shall be allowed any concession or proportionate release allowed to any officer or director that entered into agreements
that are no less restrictive (with such proportion being determined by dividing the number of shares being released with respect
to such officer or director by the total number of issued and outstanding shares held by such officer or director); provided,
that nothing in this Section 8(c) shall be construed as a right to proportionate release for the executive officers and directors
of the Company upon the expiration of the 60 day period applicable to all Holders other than the executive officers and directors
of the Company; and

 

(d)          this
Section 8 shall not be applicable if a Shelf Registration Statement of the Company filed under the Securities Act has been
declared effective prior to the filing of an IPO Registration Statement.

 

    	 	- 24 -	 

     

    

 

In order to enforce the foregoing covenant, the
Company shall have the right to place restrictive legends on the certificates representing the securities subject to this Section 8
and to impose stop transfer instructions with respect to the Registrable Shares and such other securities of each Holder (and the
securities of every other Person subject to the foregoing restriction) until the end of such period.

 

9.           Termination
of the Company’s Obligation

 

The Company shall have no obligation pursuant
to this Agreement with respect to any shares of Common Stock proposed to be sold by a Holder in a registration pursuant to this
Agreement if all such shares proposed to be sold by such Holder have ceased to be Registrable Shares.

 

10.         Limitations
on Subsequent Registration Rights

 

From and after the date of this Agreement, the
Company shall not, without the prior written consent of Holders beneficially owning not less than a majority of the then outstanding
Registrable Shares (provided, however, that for purposes of this Section 10, Registrable Shares that are owned, directly
or indirectly, by an Affiliate of the Company shall not be deemed to be outstanding), enter into any agreement with any holder
or prospective holder of any securities of the Company that would allow such holder or prospective holder (a) to include such
securities in any Shelf Registration Statement filed pursuant to the terms hereof, unless, under the terms of such agreement, such
holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of its
securities will not reduce the amount of Registrable Shares of the Holders that is included (other than pursuant to the cutback
provisions set forth herein on a pro rata basis), or (b) to have its securities registered on a Registration Statement
that is intended to be declared effective prior to the effective date of the first Registration Statement filed pursuant to this
Agreement.

 

11.         Miscellaneous

 

(a)          Remedies.
In the event of a breach by the Company of any of its obligations under this Agreement, each of FBR and each Holder, in addition
to being entitled to exercise all rights provided herein or, in the case of FBR, in the Purchase/Placement Agreement, or granted
by law, including the rights granted in Section 2(f) hereof and recovery of damages, will be entitled to specific performance of
its rights under this Agreement. Subject to Section 7, the Company agrees that monetary damages would not be adequate compensation
for any loss incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in
the event of any action for specific performance in respect of such breach, it shall waive the defense that a remedy at law would
be adequate.

 

    	 	- 25 -	 

     

    

 

(b)          Amendments
and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to or departures from the provisions hereof may not be given, without the written consent of the Company
and Holders beneficially owning at least two-thirds of the outstanding Registrable Shares; provided, however, that for purposes
of this Section 11(b), Registrable Shares that are owned, directly or indirectly, by an Affiliate of the Company shall not
be deemed to be outstanding; provided, further, however, that any amendments, modifications or supplements to, or any waivers
or consents to departures from, the provisions of Section 8 hereof that would have the effect of extending the 60 or 180 day periods
referenced therein shall be approved by, and shall only be applicable to, those Holders who provide written consent to such extension
to the Company. No amendment shall be deemed effective unless it applies uniformly to all Holders. Notwithstanding the foregoing,
a waiver or consent to or departure from the provisions hereof with respect to a matter that relates exclusively to the rights
of a Holder whose securities are being sold pursuant to a Registration Statement and that does not directly or indirectly affect,
impair, limit or compromise the rights of other Holders may be given by such Holder; provided that the provisions of this
sentence may not be amended, modified or supplemented except in accordance with the provisions of the first and second sentences
of this paragraph.

 

(c)          Notices.
All notices and other communications, provided for or permitted hereunder, shall be made in writing and delivered by facsimile
(with receipt confirmed), overnight courier or registered or certified mail, return receipt requested, or by telegram:

 

(i)          if
to a Holder, at the most current address given by the transfer agent and registrar of the Shares to the Company; and

 

(ii)         if
to the Company, at the offices of the Company at 4611 12th Avenue, Suite 1L, Brooklyn, New York 11219, Attention: David
Bistricer (facsimile: 718-438-1290); with a copy to Robert W. Downes, Sullivan & Cromwell LLP, 125 Broad Street, New York,
NY 10004 (facsimile: 212-291-9043); and

 

(iii)        if
to FBR, at the offices of FBR at 1001 Nineteenth Street North, Arlington, Virginia 22209, Attention: Gavin Beske, Esq. (facsimile
703-469-1012).

 

(d)          Successors
and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties
hereto, including, without limitation and without the need for an express assignment or assumption, subsequent Holders. The Company
agrees that the Holders shall be third party beneficiaries to the agreements made hereunder by FBR and the Company, and each Holder
shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect
its rights hereunder; provided, however, that such Holder fulfills all of its obligations hereunder.

 

(e)          Counterparts.
This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

 

(f)          Headings.
The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

    	 	- 26 -	 

     

    

 

(g)          Governing
Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES
AND EACH HOLDER BY ACCEPTING THE BENEFITS HEREOF AS THIRD PARTY BENEFICIARIES HERETO HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION
OF ANY STATE COURT IN THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING IN NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE PARTIES HERETO AND EACH HOLDER BY ACCEPTING THE BENEFITS
HEREOF AS THIRD PARTY BENEFICIARIES IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION OR PROCEEDING ARISING IN CONNECTION WITH OR AS A RESULT OF THIS AGREEMENT
OR ANY MATTER REFERRED TO HEREIN IS HEREBY WAIVED BY THE PARTIES HERETO.

 

(h)          Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties hereto
that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may
be hereafter declared invalid, illegal, void or unenforceable.

 

(i)          Entire
Agreement. This Agreement, together with the Purchase/Placement Agreement, is intended by the parties hereto as a final expression
of their agreement, and is intended to be a complete and exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein and therein.

 

(j)          Registrable
Shares Held by the Company or its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable
Shares is required hereunder, Registrable Shares held by the Company or its Affiliates and the Management Holders shall not be
counted in determining whether such consent or approval was given by the Holders of such required percentage.

 

(k)          Adjustment
for Stock Splits, etc. Wherever in this Agreement there is a reference to a specific number of shares, then upon the occurrence
of any subdivision, combination, or stock dividend of such shares, the specific number of shares so referenced in this Agreement
shall automatically be proportionally adjusted to reflect the effect on the outstanding shares of such class or series of stock
by such subdivision, combination, or stock dividend.

 

    	 	- 27 -	 

     

    

 

(l)          Survival.
This Agreement is intended to survive the consummation of the transactions contemplated by the Purchase/Placement Agreement. The
indemnification and contribution obligations under Section 7 of this Agreement shall survive the termination of the Company’s
obligations under Section 2 of this Agreement.

 

[Signature page follows]

 

    	 	- 28 -	 

     

    

 

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

 

	 	
        CLIPPER REALTY INC.

	 	 
	 	By:	/s/ David Bistricer
	 	 	Name:	David Bistricer
	 	 	Title:	Co-Chairman and Chief Executive Officer
	 	 	 	 
	 	FBR CAPITAL MARKETS & CO.
	 	 
	 	By:	/s/ Paul Dell’isola
	 	 	Name:	Paul Dell’isola
	 	 	Title:	Head of Equity Capital Markets

 

[Signature Page to Registration Rights Agreement]

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