Document:

Exhibit 10.7

 

GUARANTY AGREEMENT

 

This Guaranty Agreement
(this "Guaranty") is made as of the 20th day of May, 2015, by BLUEROCK RESIDENTIAL GROWTH
REIT, INC., a Maryland corporation having its principal address c/o Bluerock Real Estate Holdings, LLC, 712 Fifth Avenue, 9th
Floor, New York, New York 10019 ("Guarantor"), in favor of KEYBANK NATIONAL ASSOCIATION, a national
banking association having an address at 225 Franklin Street, 18th Floor, Boston, Massachusetts 02110 (together with its successors
and assigns, "Lender").

 

Recitals

 

Pursuant to the terms
and provisions of that certain Loan Agreement of even date herewith (as the same may from time to time be amended, supplemented,
restated or otherwise modified, the "Loan Agreement"), by and between the Lender and BR-TBR Whetstone Owner,
LLC, a Delaware limited liability company ("Borrower"), Borrower has requested, and Lender has agreed to
provide a loan (the "Loan") to Borrower in the original principal amount of Twenty-Five Million One Hundred
Forty-Seven Thousand Five Hundred and No/100 Dollars ($25,147,500.00), and which Loan is (a) evidenced by, inter alia,
that certain Promissory Note of even date herewith by Borrower to the order of Lender and in said original principal amount (as
the same may from time to time be amended, supplemented, restated or otherwise modified, the "Note") and
(b) secured by the Security Documents. As a condition precedent to making the Loan, Lender has required that Guarantor execute
and deliver this Guaranty to Lender. Any capitalized term used and not defined in this Guaranty or on Exhibit A attached
hereto and made a part hereof shall have the meaning given to such term in the Loan Agreement.

 

Agreements

 

For good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and in order to induce Lender to make the Loan to Borrower,
Guarantor hereby guarantees to Lender the prompt and full payment and performance of the indebtedness and obligations described
below in this Guaranty (collectively called the "Guaranteed Obligations"), this Guaranty being upon the
following terms and conditions:

 

    	 

    	 

    

 

Section 1.          Guaranty
of Payment.

 

(a)          Guarantor
hereby unconditionally and irrevocably guarantees to Lender the punctual payment when due, whether by lapse of time, by acceleration
of maturity, or otherwise, of the Principal Guaranty Amount (as defined below), interest (including interest accruing after maturity
and after the commencement of any bankruptcy or insolvency proceeding by or against Borrower, whether or not allowed in such proceeding),
Interest Rate Agreements (as defined in the Deed of Trust defined in the Loan Agreement), prepayment premiums, fees, late charges,
costs, expenses, indemnification indebtedness, and other sums of money now or hereafter due and owing, or which Borrower is obligated
to pay, pursuant to the terms of the Note, the Loan Agreement, any of the other Loan Documents, any application, agreement, note
or other document executed and delivered in connection with any of the other Loan Documents, as the same may from time to time
be amended, supplemented, restated or otherwise modified (collectively, the "Indebtedness"), provided,
however, that the Indebtedness shall not include any Excluded Hedging Obligations (as defined in Exhibit A attached
hereto). The "Principal Guaranty Amount" shall be (1) 25% of the principal amount of the Note outstanding
on the earliest of the following dates, the "Determination Date"): (x) the Maturity Date (as defined
in the Note), (y) the date upon which Lender elects to accelerate the Maturity Date after the occurrence of an Event of Default,
or (z) the date on which Borrower or Guarantor becomes the subject of any bankruptcy, receivership or other insolvency proceeding.
The Indebtedness includes all costs and expenses incurred by Lender in seeking to enforce Lender's rights and remedies with respect
to the Indebtedness, including court costs, costs of alternative dispute resolution and reasonable attorneys' fees, whether or
not suit is filed or other proceedings are initiated thereon. This Guaranty covers the Indebtedness presently outstanding and the
Indebtedness arising subsequent to the date hereof, including all amounts advanced by Lender in stages or installments. The guaranty
of Guarantor as set forth in this Section 1 is a continuing guaranty of payment and not a guaranty of collection. Any and
all payments made by Borrower or any other person other than Guarantor, and any and all payments, proceeds, credits or other sums
received by Lender on account of the Loan Documents and the obligations secured thereby, whether arising from the disposition of
the Property or any other collateral securing the Note or otherwise, shall be applied by Lender first, without modifying, releasing
or reducing Guarantor's obligations hereunder, to reduce that portion of the principal of the Note and other amounts not guaranteed
by Guarantor hereunder and only thereafter to the portion of the principal of the Note and other amounts guaranteed by Guarantor
hereunder.

 

(b)          Notwithstanding
any provision contained in this Guaranty or any security agreement or other agreement now or hereafter securing this Guaranty (collectively,
the "Guaranty Documents") to the contrary, it is the intention and agreement of Guarantor and Lender that
the obligations of Guarantor under this Guaranty shall be valid and enforceable against Guarantor to the maximum extent permitted
by applicable law. Accordingly, if any provision of this Guaranty creating any obligation of Guarantor in favor of Lender shall
be declared to be invalid or unenforceable in any respect or to any extent, it is the stated intention and agreement of Guarantor
and Lender that any balance of the obligation created by such provision and all other obligations of Guarantor to Lender created
by other provisions of this Guaranty shall remain valid and enforceable. Likewise, if any sums which Lender may be otherwise entitled
to collect from Guarantor under this Guaranty shall be declared to be in excess of those permitted under any law (including any
federal or state fraudulent conveyance or like statute or rule of law) applicable to Guarantor's obligations under this Guaranty,
it is the stated intention and agreement of Guarantor and Lender that all sums not in excess of those permitted under such applicable
law shall remain fully collectible by Lender from Guarantor and such excess sums shall nevertheless survive as a subordinate obligation
of Guarantor, junior in right to the claims of general unsecured creditors, but prior to the claims of equityholders in Guarantor.
This provision shall control every other provision of the Guaranty Documents.

 

Section 2.          Guaranty
of Specific Obligations.

 

(a)          Guarantor
hereby unconditionally and irrevocably guarantees payment of, and agrees to protect, defend, indemnify and hold harmless Lender
for, from and against, any and all losses, damages or liability, which may be suffered or incurred by, imposed on or awarded against
Lender as a result of:

 

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(i)         Fraud
by Borrower or Guarantor in connection with the leasing, operation, refinancing or sale of the Property, the making or disbursement
of the Loan, or any certificates or documents provided in connection therewith;

 

(ii)        Material
misrepresentation, gross negligence, willful misconduct, or breach of warranty by Borrower or Guarantor in connection with the
leasing, operation, refinancing or sale of the Property, the making or disbursement of the Loan, or any certificates or documents
provided in connection therewith;

 

(iii)       Intentional
physical waste or intentional physical damage to the Property by Borrower;

 

(iv)      After
the occurrence and during the continuance of an Event of Default, distributions to the members, partners or shareholders of Borrower
or Guarantor (or to any beneficiary or trustee if Borrower or Guarantor is a trust) of any rents, security deposits, or other income
arising with respect to any property covered by the Loan Documents which should have been applied against costs and expenses associated
with the Property or paid to Lender pursuant to the Loan Documents;

 

(v)        The
misapplication or misappropriation by Borrower or Guarantor of any rents, security deposits, insurance proceeds, condemnation awards
or other income or proceeds with respect to any property covered by the Loan Documents which, under the terms thereof, should have
been applied otherwise or paid to Lender;

 

(vi)      Any
acts of Borrower or Guarantor taken in bad faith with the intent to hinder, delay or interfere with the exercise by Lender of any
rights and remedies under the Loan Documents after the occurrence of and during the continuance of an Event of Default;

 

(vii)     Any
material amendment, modification, supplement or restatement of the organizational documents of Borrower without Lender's prior
written consent (which consent may be withheld in Lender's sole and absolute discretion); or

 

(viii)    Breach
of or failure to perform Guarantor's obligations under the Environmental Indemnity Agreement.

 

(b)          Upon
the occurrence of a Trigger Event (as defined below), and notwithstanding the provisions set forth in Sections 1 and 2(a)
above, Guarantor guarantees to Lender the prompt and full payment, performance and observance upon the occurrence of a Trigger
Event (and not merely the collectability), of all of the obligations, terms and conditions to be paid, performed and observed by
Borrower under the Loan Agreement, the Note, and each other Loan Document, each as the same may be hereafter amended, modified,
extended, renewed or recast, including, but not limited to the payment of the entire amount of all then outstanding principal balance
of the Loan, together with interest and other charges thereon as provided in the Loan Documents. As used herein, the term "Trigger
Event" shall mean and refer to the occurrence of any of the following events:

 

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(i)         Any
filing by Borrower or any manager or managing member of Borrower of a bankruptcy petition, or the making by Borrower or any manager
or managing member of Borrower of an assignment for the benefit of creditors, or the appointment of a receiver of any property
of Borrower or any manager or managing member of Borrower in any action initiated by, or affirmatively consented to by, Borrower
or such manager or managing member, or the dissolution of Borrower or merger of Borrower into any other entity without the prior
written consent of Lender;

 

(ii)        The
contesting or opposition by Borrower or Guarantor of any motion for relief for the automatic stay filed by Lender in any involuntary
bankruptcy proceeding of Borrower;

 

(iii)       Any
involuntary petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or
state law, is filed against Borrower or any general partner of Borrower or Guarantor, in which any of Borrower or any general partner
of Borrower or Guarantor colludes, cooperates or acquiesces; or

 

(iv)       Any
Transfer of an interest in the Property or in Borrower prohibited under the terms of the Loan Documents.

 

(c)          Guarantor
hereby unconditionally and irrevocably guarantees to Lender the punctual payment when due of all other costs of owning, developing,
operating, leasing, maintaining, repairing and restoring, the Property, other than payment of the principal of the Loan except
as stated in Section 1(a) above, and including, without limitation, the payment when due of all interest, real estate taxes, municipal
charges, utility charges, insurance premiums, other operating expenses and expenses of developing, marketing and leasing the Property.

 

(d)          (i) If
Borrower elects to construct another level of structured parking to the garage that is part of the Property or undertakes any other
construction of improvements at the Property (the "Construction"), Guarantor hereby unconditionally and
irrevocably guarantees that: (A) Borrower shall construct, equip and complete the Construction in accordance with the Loan
Agreement; (B) Borrower shall, subject to the contest rights described in Section 5.4 of the Deed of Trust, fully and
punctually pay and discharge any and all costs and expenses and liabilities for or in connection with the construction, equipping,
and completion of the Construction as the same may become due and payable, and also pay and discharge all proper claims and demands
for labor and materials and services used for or in connection with the construction, equipping and completion of the Construction;
(C) the Property and the Construction shall be and remain free and clear of all liens from any and all persons, firms, corporations
or other entities furnishing materials, labor or services in the construction, equipping or completion of the Construction; and
(D) Borrower shall fully and punctually comply with all the terms, covenants and conditions on its part to be complied with
under the Loan Agreement or the other Loan Documents with respect to the Construction.

 

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(ii)         In
the event that the Construction is not completed and paid for or is not free of all liens, claims and demands upon the completion
thereof, as guaranteed in this sub-section (b), (x) Guarantor agrees to fully indemnify Lender and save Lender harmless from all
costs and damages that Lender may suffer by reason thereof; (y) in the event that Lender shall (i) cause any construction or equipping
of the Construction to be done, (ii) pay any costs in connection with the construction or equipping of the Construction or (iii)
cause any such lien, claim or demand to be released or paid, then Guarantor agrees to reimburse Lender for all sums paid and all
costs and expenses incurred by it in connection therewith; and (z) Guarantor agrees, if requested by Lender, to complete or cause
the completion of the construction and equipment of the Construction in accordance with the Loan Agreement and to pay all bills
in connection therewith. Guarantor acknowledges and agrees that it will be impossible to measure accurately the damages to Lender
resulting from a breach of the covenant to complete or to cause the completion of the construction or equipping of the Construction
set forth in sub-section (z) hereof, that such a breach will cause irreparable injury to Lender and that Lender has no adequate
remedy at law in respect of such breach and, as a consequence, agrees that such covenant shall be specifically enforceable against
Guarantor and hereby waives and agrees not to assert any defense based on the denial of any of the foregoing in an action for specific
performance of such covenant.

 

Section 3.          Primary
Liability of Guarantor.

 

(a)          This
Guaranty is an absolute, irrevocable and unconditional guaranty of payment and performance, and Guarantor shall be liable for the
payment and performance of the Guaranteed Obligations as a primary obligor. This Guaranty shall be effective as a waiver of, and
Guarantor hereby expressly waives, any right to which Guarantor may otherwise have been entitled, whether existing under statute,
at law or in equity, to require Lender to take prior recourse or proceedings against any collateral, security or Person or to cause
a marshalling of the assets of the Borrower or of any of the collateral securing the Guaranteed Obligations. It shall not be necessary
for Lender, in order to enforce such payment or performance by Guarantor, first to institute suit or pursue or exhaust any rights
or remedies against Borrower or to proceed against any other Guarantor or Person liable on such Guaranteed Obligations or for such
performance or to proceed against any of such other Guarantor or Persons in any particular order, or to enforce any rights against
any security given to secure such Guaranteed Obligations or performance, or to join Borrower or any other Person liable for the
payment or performance of the Guaranteed Obligations or any part thereof in any action to enforce this Guaranty, or to resort to
any other means of obtaining payment or performance of the Guaranteed Obligations; provided, however, that nothing
herein contained shall prevent Lender from suing on the Note or exercising any other right under the Loan Documents.

 

(b)          Suit
may be brought or demand may be made against Borrower or against any or all parties who have signed this Guaranty or any other
guaranty covering all or any part of the Guaranteed Obligations, or against any one or more of them, separately or together, without
impairing the rights of Lender against any party hereto.

 

Section 4.          Certain
Agreements and Waivers by Guarantor.

 

(a)          Guarantor
agrees that neither Lender's rights or remedies nor Guarantor's obligations under the terms of this Guaranty shall be released,
diminished, impaired, reduced or affected by any one or more of the following events, actions, facts, or circumstances, and the
liability of Guarantor under this Guaranty shall be absolute, unconditional and irrevocable irrespective of:

 

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(i)         any
limitation on the liability of, or recourse against, any other Person in any Loan Document or arising under any law;

 

(ii)        any
claim or defense that this Guaranty was made without consideration or is not supported by adequate consideration or that the obligations
of Guarantor hereunder exceed or are more burdensome than those of Borrower under the other Loan Documents;

 

(iii)       the
taking or accepting of any other security or guaranty for, or right of recourse with respect to, any or all of the Guaranteed Obligations;

 

(iv)       the
operation of any statutes of limitation or other laws regarding the limitation of actions, all of which are hereby waived as a
defense to any action or proceeding brought by Lender against Guarantor, to the fullest extent permitted by law;

 

(v)        any
homestead exemption or any other exemption that is waivable under applicable law;

 

(vi)       any
release, surrender, abandonment, exchange, alteration, sale or other disposition, subordination, deterioration, waste, failure
to protect or preserve, impairment, or loss of, or any failure to create or perfect any lien or security interest with respect
to, or any other dealings with, any collateral or security at any time existing or purported, believed or expected to exist in
connection with any or all of the Guaranteed Obligations, or any impairment of Guarantor's recourse against any Person or collateral;

 

(vii)      whether
express or by operation of law, any partial release of the liability of Guarantor hereunder (except to the extent expressly so
released) or any complete or partial release of Borrower, any other Guarantor or any other Person liable, directly or indirectly,
for the payment or performance of any or all of the Guaranteed Obligations;

 

(viii)     the
death, insolvency, bankruptcy, disability, dissolution, liquidation, termination, receivership, reorganization, merger, consolidation,
change of form, structure or ownership, sale of all assets, or lack of corporate, partnership or other power of Borrower or any
other Person at any time liable for the payment or performance of any or all of the Guaranteed Obligations;

 

(ix)       either
with or without notice to or consent of Guarantor, any renewal, extension, amendment, modification, supplement, subordination or
rearrangement of the terms of any or all of the Guaranteed Obligations and/or any of the Loan Documents, including without limitation,
material alterations of the terms of payment (including changes in maturity date(s) and interest rate(s)) or performance or any
other terms thereof, or any waiver, termination, or release of, or consent to departure from, any of the Loan Documents or any
other guaranty of any or all of the Guaranteed Obligations, or any adjustment, indulgence, forbearance, or compromise that may
be granted from time to time by Lender to Borrower or any other Person at any time liable for the payment or performance of any
or all of the Guaranteed Obligations;

 

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(x)        any
neglect, lack of diligence, delay, omission, failure, or refusal of Lender to take or prosecute (or in taking or prosecuting) any
action for the collection or enforcement of any of the Guaranteed Obligations, or to foreclose or take or prosecute any action
to foreclose (or in foreclosing or taking or prosecuting any action to foreclose) upon any security therefor, or to exercise (or
in exercising) any other right or power with respect to any security therefor, or to take or prosecute (or in taking or prosecuting)
any action in connection with any Loan Document, or any failure to sell or otherwise dispose of any collateral securing any or
all of the Guaranteed Obligations in compliance with applicable law or in a commercially reasonable manner;

 

(xi)       any
failure of Lender to notify Guarantor of any creation, renewal, extension, rearrangement, modification, supplement, subordination,
or assignment of the Guaranteed Obligations or any part thereof, or of any Loan Document, or of any release of or change in any
security, or of the occurrence or existence of any Default or Event of Default, or of any other action taken or refrained from
being taken by Lender against Borrower or any security or other recourse, or of any new agreement between Lender and Borrower,
it being understood that Lender shall not be required to give Guarantor any notice of any kind under any circumstances with respect
to or in connection with the Guaranteed Obligations, any and all rights to notice Guarantor may have otherwise had being hereby
waived by Guarantor, and Guarantor shall be responsible for obtaining for itself information regarding Borrower, including any
changes in the business or financial condition of Borrower, and Guarantor acknowledges and agrees that Lender shall have no duty
to notify Guarantor of any information which Lender may have concerning Borrower;

 

(xii)      the
existence of any claim, counterclaim, set-off or other right that Guarantor may at any time have against Borrower, Lender, or any
other Person, whether or not arising in connection with this Guaranty, the Note, the Loan Agreement or any other Loan Document
other than the defense of payment;

 

(xiii)     the
invalidity or unenforceability of all or any part of the Guaranteed Obligations against Borrower, whether because the Guaranteed
Obligations exceed the amount permitted by law or violate any usury law, or because the Persons creating the Guaranteed Obligations
acted in excess of their authority, or because of a lack of validity or enforceability of or defect or deficiency in any of the
Loan Documents, or because Borrower has any valid defense, claim or offset with respect thereto, or because Borrower's obligation
ceases to exist by operation of law, or because of any other reason or circumstance, it being agreed that Guarantor shall remain
liable hereon regardless of whether Borrower or any other Person be found not liable on the Guaranteed Obligations, or any part
thereof, for any reason (and regardless of any joinder of Borrower or any other party in any action to obtain payment or performance
of any or all of the Guaranteed Obligations);

 

(xiv)     any
order, ruling or plan of reorganization emanating from proceedings under Title 11 of the United States Code with respect to
Borrower or any other Person, including any extension, reduction, composition, or other alteration of the Guaranteed Obligations,
whether or not consented to by Lender, or any action taken or omitted by Lender in any such proceedings, including any election
to have Lender's claim allowed as being secured, partially secured or unsecured, any extension of credit by Lender in any such
proceedings or the taking and holding by Lender of any security for any such extension of credit;

 

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(xv)      any
other condition, event, omission or action that would in the absence of this paragraph result in the release or discharge of a
Guarantor from the performance or observance of any obligation, covenant or agreement contained in this Guaranty or any other agreement
other than irrevocable payment in full in cash of the Guaranteed Obligations;

 

(xvi)     any
early termination of any of the Guaranteed Obligations;

 

(xvii)    Lender's
enforcement or forbearance from enforcement of the Guaranteed Obligations on a net or gross basis;

 

(xviii)   all
suretyship defenses and defenses in the nature thereof;

 

(xix)      notice
of the acceptance hereof, presentment, demand for payment, protest, notice of protest, or any and all notice of nonpayment, nonperformance,
nonobservance or default, or other proof or notice of demand whereby to charge a Guarantor therefor; or

 

(xx)       the
avoidance of any lien in favor of Lender for any reason.

 

(b)          In
the event any payment by Borrower or any other Person to Lender is held to constitute a preference, fraudulent transfer or other
voidable payment under any bankruptcy, insolvency or similar law, or if for any other reason Lender is required to refund such
payment or pay the amount thereof to any other party, such payment by Borrower or any other party to Lender shall not constitute
a release of Guarantor from any liability hereunder, and this Guaranty shall continue to be effective or shall be reinstated (notwithstanding
any prior release, surrender or discharge by Lender of this Guaranty or of Guarantor), as the case may be, with respect to, and,
to the extent the same constitute Guaranteed Obligations, this Guaranty shall apply to, any and all amounts so refunded by Lender
or paid by Lender to another Person (which amounts shall constitute part of the Guaranteed Obligations), and any interest paid
by Lender and any attorneys' fees, costs and expenses paid or incurred by Lender in connection with any such event.

 

(c)          It
is the intent of Guarantor and Lender that the obligations and liabilities of Guarantor hereunder are absolute, irrevocable and
unconditional under any and all circumstances and that until the Guaranteed Obligations are fully and finally paid and performed,
and not subject to refund or disgorgement, the obligations and liabilities of Guarantor hereunder shall not be discharged or released,
in whole or in part, by any act or occurrence that might, but for the provisions of this Guaranty, be deemed a legal or equitable
discharge or release of a Guarantor.

 

(d)          Guarantor's
obligations shall not be affected, impaired, lessened or released by loans, credits or other financial accommodations now existing
or hereafter advanced by Lender to Borrower in excess of the Guaranteed Obligations. All payments, repayments and prepayments of
the Loan, whether voluntary or involuntary, received by Lender from Borrower, any other Person or any other source (other than
from a Guarantor pursuant to a demand by Lender hereunder), and any amounts realized from any collateral for the Loan, shall be
deemed to be applied first to any portion of the Loan which is not covered by this Guaranty, and last to the Guaranteed Obligations,
and this Guaranty shall bind Guarantor to the extent of any Guaranteed Obligations that may remain owing to Lender. Lender shall
have the right to apply any sums paid by Guarantor to any portion of the Loan in Lender's sole and absolute discretion.

 

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(e)          If
acceleration of the time for payment of any amount payable by Borrower under the Note, the Loan Agreement, or any other Loan Document,
is stayed or delayed by any law or tribunal, all such amounts shall nonetheless be payable by Guarantor on demand by Lender.

 

Section 5.          Subordination.

 

If, for any reason
whatsoever, Borrower is now or hereafter becomes indebted to Guarantor (which indebtedness shall include without limitation any
acquisition fee, guaranty fee, loan fee and organizational costs):

 

(a)          such
indebtedness and all interest thereon and all liens, security interests and rights now or hereafter existing with respect to property
of Borrower securing such indebtedness shall, at all times, be subordinate in all respects to the Guaranteed Obligations and to
all liens, security interests and rights now or hereafter existing to secure the Guaranteed Obligations;

 

(b)          no
Guarantor shall be entitled to enforce or receive payment, directly or indirectly, of any such indebtedness of Borrower to Guarantor
until the Guaranteed Obligations have been fully and finally paid and performed; provided, however, that so long
as no Default shall have occurred and be continuing, Guarantor shall not be prohibited from receiving such fees or other sums as
are permitted to be paid to a Guarantor pursuant to the Loan Agreement;

 

(c)          Guarantor
hereby assigns and grants to Lender a security interest in all such indebtedness and security therefor, if any, of Borrower to
a Guarantor now existing or hereafter arising, including any dividends and payments pursuant to debtor relief or insolvency proceedings
referred to below. In the event of receivership, bankruptcy, reorganization, arrangement or other debtor relief or insolvency proceedings
involving Borrower as debtor, Lender shall have the right to prove its claim in any such proceeding so as to establish its rights
hereunder and shall have the right to receive directly from the receiver, trustee or other custodian (whether or not an Event of
Default shall have occurred or be continuing under any of the Loan Documents), dividends and payments that are payable upon any
obligation of Borrower to Guarantor now existing or hereafter arising, and to have all benefits of any security therefor, until
the Guaranteed Obligations have been fully and finally paid and performed. If, notwithstanding the foregoing provisions, Guarantor
should receive any payment, claim or distribution that is prohibited as provided above in this Section 5, Guarantor
shall pay the same to Lender immediately, Guarantor hereby agreeing that it shall receive the payment, claim or distribution in
trust for Lender and shall have absolutely no dominion over the same except to pay it immediately to Lender; and

 

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(d)          Guarantor
shall promptly upon request of Lender from time to time execute such documents and perform such acts as Lender may reasonably require
to evidence and perfect Lender's interest and to permit or facilitate exercise of Lender's rights under this Section 5,
including execution and delivery of proofs of claim, further assignments and security agreements, and delivery to Lender of any
promissory notes or other instruments evidencing indebtedness of Borrower to Guarantor. All promissory notes, accounts receivable
ledgers or other evidences, now or hereafter held by a Guarantor, of obligations of Borrower to Guarantor shall contain a specific
written notice thereon that the indebtedness evidenced thereby is subordinated under and is subject to the terms of this Guaranty.

 

Section 6.          Other
Liability of Guarantor or Borrower.

 

If Guarantor is or
becomes liable, by endorsement or otherwise, for any indebtedness owing by Borrower to Lender other than under this Guaranty, such
liability shall not be in any manner impaired or affected hereby, and the rights of Lender hereunder shall be cumulative of any
and all other rights that Lender may have against Guarantor. If Borrower is or becomes indebted to Lender for any indebtedness
other than or in excess of the Guaranteed Obligations, any payment received or recovery realized upon such other indebtedness of
Borrower to Lender may be applied to such other indebtedness. This Guaranty is independent of (and shall not be limited by) any
other guaranty now existing or hereafter given. Further, Guarantor's liability under this Guaranty is in addition to any and all
other liability Guarantor may have in any other capacity, including, if applicable, its capacity as a general partner.

 

Section 7.          Lender
Assigns; Disclosure of Information.

 

This Guaranty is for
the benefit of Lender and Lender's successors and assigns, and in the event of an assignment of the Guaranteed Obligations, or
any part thereof, the rights and benefits hereunder, to the extent applicable to the Guaranteed Obligations so assigned, may be
transferred with such Guaranteed Obligations. Guarantor waives notice of any transfer or assignment of the Guaranteed Obligations
or any part thereof. Lender may sell or offer to sell the Loan or interests therein to one or more assignees or participants. Guarantor
shall execute, acknowledge and deliver any and all instruments reasonably requested by Lender in connection therewith, and to the
extent, if any, specified in any such assignment or participation, such assignee(s) or participant(s) shall have the same rights
and benefits with respect to the Loan Documents as such Person(s) would have if such Person(s) were Lender hereunder. Lender may
disclose to any such assignee or participant or prospective assignee or participant, to Lender's affiliates, to any regulatory
body having jurisdiction over Lender and to any other parties as necessary or appropriate in Lender's reasonable judgment, any
information Lender now has or hereafter obtains pertaining to the Guaranteed Obligations, this Guaranty, or Guarantor, including
information regarding any security for the Guaranteed Obligations or for this Guaranty, and/or credit or other information on Guarantor
and/or any other Person liable, directly or indirectly, for any part of the Guaranteed Obligations.

 

Section 8.          Binding
Effect; Joint and Several Liability.

 

This Guaranty is binding
not only on Guarantor, but also on Guarantor's heirs, personal representatives, successors and assigns. Upon the death of a Guarantor,
if Guarantor is a natural person, this Guaranty shall continue against Guarantor's estate as to all of the Guaranteed Obligations,
including that portion incurred or arising after the death of Guarantor and shall be provable in full against Guarantor's estate,
whether or not the Guaranteed Obligations are then due and payable. If this Guaranty is signed by more than one Person, then all
of the obligations of Guarantor arising hereunder shall be binding on the undersigned, and its heirs, personal representatives,
successors and assigns, and the term "Guarantor" shall mean all of such Persons and each of them individually.

 

    	- 10 -

    	 

    

 

Section 9.          Governing
Law.

 

The validity, enforcement,
and interpretation of this Guaranty, shall for all purposes be governed by and construed in accordance with the laws of the Commonwealth
of Massachusetts and applicable United States federal law, and is intended to be performed in accordance with, and only to the
extent permitted by, such laws. All obligations of Guarantor hereunder are payable and performable at the place or places where
the Guaranteed Obligations are payable and performable.

 

Section 10.        Invalidity
of Certain Provisions.

 

If any provision of
this Guaranty or the application thereof to any Person or circumstance shall, for any reason and to any extent, be declared to
be invalid or unenforceable, neither the remaining provisions of this Guaranty nor the application of such provision to any other
Person or circumstance shall be affected thereby, and the remaining provisions of this Guaranty, or the applicability of such provision
to other Persons or circumstances, as applicable, shall remain in effect and be enforceable to the maximum extent permitted by
applicable law.

 

Section 11.        Costs
and Expenses of Enforcement.

 

Guarantor agrees to
pay to Lender on demand all costs and expenses incurred by Lender in seeking to enforce Lender's rights and remedies under this
Guaranty, including court costs, costs of alternative dispute resolution and reasonable attorneys' fees, whether or not suit is
filed or other proceedings are initiated hereon. All such costs and expenses incurred by Lender shall constitute a portion of the
Guaranteed Obligations hereunder, shall be subject to the provisions hereof with respect to the Guaranteed Obligations and shall
be payable by Guarantor on demand by Lender.

 

Section 12.        No
Usury.

 

It is not the intention
of Lender or Guarantor to obligate Guarantor to pay interest in excess of that lawfully permitted to be paid by a Guarantor under
applicable law. Should it be determined that any portion of the Guaranteed Obligations or any other amount payable by Guarantor
under this Guaranty constitutes interest in excess of the maximum amount of interest that a Guarantor, in Guarantor's capacity
as guarantor, may lawfully be required to pay under applicable law, the obligation of Guarantor to pay such interest shall automatically
be limited to the payment thereof in the maximum amount so permitted under applicable law. The provisions of this Section 12
shall override and control all other provisions of this Guaranty and of any other agreement between Guarantor and Lender.

 

    	- 11 -

    	 

    

 

Section 13.        Representations,
Warranties, and Covenants of Guarantor.

 

Until the Guaranteed
Obligations are paid and performed in full and each and every term, covenant and condition of this Guaranty is fully performed,
Guarantor hereby represents, warrants, and covenants that:

 

(a)          Guarantor
has a financial or business interest in Borrower and/or the making of the Loan to Borrower, and will derive a material and substantial
benefit, directly or indirectly, from the making of the Loan to Borrower and from the making of this Guaranty by Guarantor;

 

(b)          this
Guaranty is duly authorized and valid, and is binding upon and enforceable against Guarantor in accordance with the terms hereof,
except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, receivership, fraudulent conveyance,
moratorium or similar laws affecting creditors' rights generally, and by general equitable principles (whether enforcement is sought
by proceedings in equity or at law);

 

(c)          no
Guarantor is, and the execution, delivery and performance by Guarantor of this Guaranty will not cause Guarantor to be, in violation
of or in default with respect to any law or in default (or at risk of acceleration of indebtedness) under any agreement or restriction
by which Guarantor is bound or affected;

 

(d)          unless
a Guarantor is a natural person, Guarantor is duly organized, validly existing, and in good standing under the laws of the state
of its organization and has full power and authority to enter into and perform this Guaranty;

 

(e)          there
is no litigation pending or, to the knowledge of Guarantor, threatened by or before any tribunal against or affecting Guarantor
which, if adversely determined, could reasonably be expected to prevent Guarantor from performing its obligations hereunder or
which would have a material adverse effect on the financial condition of Guarantor;

 

(f)           all
financial statements and information heretofore furnished to Lender by Guarantor do, and all financial statements and information
hereafter furnished to Lender by Guarantor will, fully and accurately present the condition (financial or otherwise) of Guarantor
as of their dates and the results of Guarantor's operations for the periods therein specified, and, since the date of the most
recent financial statements of Guarantor heretofore furnished to Lender, no material adverse change has occurred in the financial
condition of Guarantor;

 

(g)          after
giving effect to this Guaranty, Guarantor is solvent, is not engaged or about to engage in business or a transaction for which
the property of Guarantor is an unreasonably small capital, and does not intend to incur or believe that it will incur debts that
will be beyond its ability to pay as such debts mature;

 

(h)          Guarantor
has read the provisions contained in the Note, the Loan Agreement, and the other Loan Documents and agrees to be bound by the terms
thereof which relate to Guarantor (including, without limitation, Guarantor's obligations to deliver financial statements and other
financial information as more particularly set forth in Section 6.2 of the Loan Agreement and the limitations on distributions
set forth in Section 6.1(n)) as if such terms were set forth in this Guaranty in their entirety;

 

    	- 12 -

    	 

    

 

(i)          Guarantor
agrees that it shall have and maintain, on a combined basis in accordance with GAAP or another recognized method of accounting
reasonably acceptable to Lender, tested as of the close of each fiscal quarter: (i) Liquidity of at least $1,000,000; and (ii) Tangible
Net Worth of at least (A) $109,414,601 which is seventy-five percent (75%) of the amount of Tangible Net Worth as of March 31,
2015 plus (B) seventy-five percent (75%) of the net proceeds of all future equity issuances. The terms "Liquidity"
and "Tangible Net Worth" shall have the meanings given thereto on Exhibit A attached hereto; and

 

In the event that Guarantor
fails to perform any covenant set forth in this Section 13, or if any of the representations, warranties, or covenants
set forth in this Section 13 becomes untrue after the date hereof but prior to the Guaranteed Obligations being paid
and performed in full and each and every term, covenant and condition of this Guaranty being fully performed, then thirty (30)
days after receipt of written notice of such occurrence, an "Event of Default" shall occur under this Guaranty; provided
that, if such default is reasonably capable of being cured and such cure cannot reasonably be effected within such 30-day period,
such failure shall not be an Event of Default so long as Guarantor promptly commences cure within thirty (30) days after receipt
of such notice, and thereafter diligently prosecutes such cure to completion within an additional thirty (30) day period.

 

Section 14.        Notices.

 

All notices, requests,
consents, demands and other communications required or which any party desires to give hereunder or under any other Loan Document
shall be in writing and, unless otherwise specifically provided in such other Loan Document, shall be deemed sufficiently given
or furnished if delivered by personal delivery, by nationally recognized overnight courier service, or by certified United States
mail, postage prepaid, addressed to the party to whom directed at the addresses specified in this Guaranty (unless changed by similar
notice in writing given by the particular party whose address is to be changed) or by facsimile. Any such notice or communication
shall be deemed to have been given either at the time of personal delivery or, in the case of courier or mail, as of the date of
first attempted delivery at the address and in the manner provided herein, or, in the case of facsimile, upon receipt; provided
that service of a notice required by any applicable statute shall be considered complete when the requirements of that statute
are met. Notwithstanding the foregoing, no notice of change of address shall be effective except upon actual receipt. This Section
shall not be construed in any way to affect or impair any waiver of notice or demand provided in this Guaranty or in any other
Loan Document or to require giving of notice or demand to or upon any Person in any situation or for any reason.

 

Section 15.        Cumulative
Rights.

 

All of the rights and
remedies of Lender under this Guaranty and the other Loan Documents are cumulative of each other and of any and all other rights
at law or in equity, and the exercise by Lender of any one or more of such rights and remedies shall not preclude the simultaneous
or later exercise by Lender of any or all such other rights and remedies. No single or partial exercise of any right or remedy
shall exhaust it or preclude any other or further exercise thereof, and every right and remedy may be exercised at any time and
from time to time. No failure by Lender to exercise, nor delay in exercising, any right or remedy shall operate as a waiver of
such right or remedy or as a waiver of any Event of Default. No notice to or demand on Guarantor in any case shall of itself entitle
Guarantor to any other or further notice or demand in similar or other circumstances. No provision of this Guaranty or any right
or remedy of Lender with respect hereto, or any default or breach, can be waived, nor can this Guaranty or Guarantor be released
or discharged in any way or to any extent, except specifically in each case by a writing intended for that purpose (and which refers
specifically to this Guaranty) executed and delivered by Lender to Guarantor.

 

    	- 13 -

    	 

    

 

 

Section 16.        Term
of Guaranty.

 

This Guaranty shall
continue in effect until all the Guaranteed Obligations and all of the obligations of Guarantor to Lender under this Guaranty are
fully and finally paid, performed and discharged and are not subject to any bankruptcy preference period or any other disgorgement.

 

Section 17.        Subrogation.

 

Until the Guaranteed
Obligations and all other obligations of Guarantor to Lender under this Guaranty are fully and finally paid in cash by a Non-Contestable
Payment, performed and discharged, no Guarantor shall have any right of subrogation under any of the Loan Documents or any right
to participate in any security for the Guaranteed Obligations or any right to reimbursement, exoneration, contribution, indemnification
or any similar rights, and Guarantor hereby waives all of such rights during such period. Payment and satisfaction of the Guarantied
Obligations shall be deemed "Non-Contestable Payment" only upon such payment in cash and satisfaction and
the expiration of ninety-one (91) days thereafter, with: (A) no claim for the recovery of a preferential payment, fraudulent conveyance,
or fraudulent transfer having been filed or asserted, or (B) if so filed or asserted, the final, non-appealable decision of a court
of competent jurisdiction denying the claim or assertion.

 

Section 18.        Time
of Essence.

 

Time shall be of the
essence in this Guaranty with respect to all of Guarantor's obligations hereunder.

 

Section 19.        Entire
Agreement; Counterparts; Construction.

 

This Guaranty embodies
the entire agreement between Lender and Guarantor with respect to the guaranty by Guarantor of the Guaranteed Obligations. This
Guaranty supersedes all prior agreements and understandings, if any, with respect to the guaranty by Guarantor of the Guaranteed
Obligations. This Guaranty shall be effective upon execution by Guarantor and delivery to Lender. This Guaranty may not be modified,
amended or superseded except in a writing signed by Lender and Guarantor referencing this Guaranty by its date and specifically
identifying the portions hereof that are to be modified, amended or superseded. This Guaranty has been executed in a number of
identical counterparts, each of which shall be deemed an original for all purposes and all of which constitute, collectively, one
agreement. As used herein, the words "include" and "including" shall be interpreted as if followed by the words
"without limitation."

 

    	- 14 -

    	 

    

 

Section 20.        Forum.

 

Guarantor hereby irrevocably
submits generally and unconditionally for itself and in respect of its property to the jurisdiction of any state court or any United
States federal court sitting in the State specified in the governing law section of this Guaranty and to the jurisdiction of any
state court or any United States federal court sitting in the Commonwealth of Massachusetts over any Dispute. Guarantor hereby
irrevocably waives, to the fullest extent permitted by Law, any objection that Guarantor may now or hereafter have to the laying
of venue in any such court and any claim that any such court is an inconvenient forum. Guarantor hereby agrees and consents that,
in addition to any methods of service of process provided for under applicable law, all service of process in any such suit, action
or proceeding in any state court or any United States federal court sitting in the state specified in the governing law section
of this Guaranty may be made by certified or registered mail, return receipt requested, directed to Guarantor at its address for
notice set forth in this Guaranty, or at a subsequent address of which Lender received actual notice from Guarantor in accordance
with the notice section of this Guaranty, and service so made shall be complete five (5) days after the same shall have been so
mailed. Nothing herein shall affect the right of Lender to serve process in any manner permitted by Law or limit the right of Lender
to bring proceedings against Guarantor in any other court or jurisdiction.

 

Section 21.        WAIVER
OF JURY TRIAL.

 

GUARANTOR AND LENDER
WAIVE TRIAL BY JURY IN RESPECT OF ANY SUCH "DISPUTE" AND ANY ACTION ON SUCH "DISPUTE." THIS WAIVER IS KNOWINGLY,
WILLINGLY AND VOLUNTARILY MADE BY GUARANTOR AND LENDER, AND GUARANTOR AND LENDER HEREBY REPRESENT THAT NO REPRESENTATIONS OF FACT
OR OPINION HAVE BEEN MADE BY ANY PERSON OR ENTITY TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS
EFFECT. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THE LOAN DOCUMENTS. GUARANTOR AND LENDER ARE EACH
HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL. GUARANTOR
FURTHER REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS GUARANTY AND IN THE MAKING OF THIS WAIVER BY
INDEPENDENT LEGAL COUNSEL, OR HAS HAD THE OPPORTUNITY TO BE REPRESENTED BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL,
AND THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL. 

 

Section 22.        Credit
Verification.

 

Each legal entity and
individual obligated on this Guaranty hereby authorizes Lender to check any credit references, verify his/her employment and obtain
credit reports from credit reporting agencies of Lender's choice in connection with any monitoring, collection or future transaction
concerning the Loan, including any modification, extension or renewal of the Loan. Also in connection with any such monitoring,
collection or future transaction, Lender is hereby authorized to check credit references, verify employment and obtain a third
party credit report for the spouse of any married person obligated on this Guaranty, if such person lives in a community property
state.

 

    	- 15 -

    	 

    

 

Section 23.        Setoff.

 

Guarantor grants to
Lender a continuing lien, security interest and right of setoff as security for all liabilities and obligations to Lender arising
under or relating to the Guaranteed Obligations, whether now existing or hereafter arising, upon and against all deposits, credits,
collateral and property of Guarantor, and any other accounts established hereunder for the deposit of cash collateral in order
to secure the Guaranteed Obligations, now or hereafter in the possession, custody, safekeeping or control of Lender or any entity
under the control of KeyBank National Association, and their successors and assigns or in transit to any of them. At any time while
an Event of Default exists, without demand or notice (any such notice being expressly waived by Guarantor), Lender may setoff the
same or any part thereof and apply the same to any liability or obligation of Guarantor even though unmatured and regardless of
the adequacy of any other collateral securing the Guaranteed Obligations. ANY AND ALL RIGHTS TO REQUIRE LENDER TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE GUARANTEED OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHTS
OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF GUARANTOR ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED.

 

[The next page is the signature page]

 

    	- 16 -

    	 

    

 

IN WITNESS WHEREOF,
Guarantor has duly executed this Guaranty as an instrument under seal as of the date first written above.

 

	 	Guarantor:
	 	 
	 	BLUEROCK RESIDENTIAL GROWTH REIT,

INC., a Maryland corporation
	 	 
	 	By: 	/s/ R. Ramin Kamfar
	 	 	R. Ramin Kamfar
	 	 	Chairman of the Board, Chief Executive

Officer and President

 

[Signature Page
to Guaranty Agreement]

 

    	 

    	 

    

 

Exhibit A

Defined Terms

 

"Commodity Exchange Act"
means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute.

 

"Excluded Hedging Obligation"
means, with respect to Guarantor, any Guaranty Swap Obligation (as defined in this Exhibit A) if, and to the extent that,
all or a portion of the guarantee of Guarantor of, or the grant by Guarantor of a security interest to secure, such Guaranty Swap
Obligation (or any guarantee thereof) is or becomes illegal under the Commodity Exchange Act (as defined in this Exhibit A)
or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official interpretation of
any thereof) by virtue of Guarantor's failure for any reason to constitute an "eligible contract participant" as defined
in the Commodity Exchange Act and the regulations thereunder at the time the guarantee of Guarantor or the grant of such security
interest becomes effective with respect to such Guaranty Swap Obligation. If a Guaranty Swap Obligation arises under a master agreement
governing more than one swap, such exclusion shall apply only to the portion of such Guaranty Swap Obligation that is attributable
to swaps for which such guarantee or security interest is or becomes illegal.

 

"GAAP" means generally
accepted accounting principles in the United States of America.

 

"Guarantor Indebtedness"
means, with respect to the Guarantor, without duplication, (a) all obligations of such Person for borrowed money or with respect
to deposits or advances of any kind, (b) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments,
including mandatorily redeemable preferred stock, (c) all obligations of such Person upon which interest charges are customarily
paid, (d) all obligations of such Person under conditional sale or other title retention agreements relating to property acquired
by such Person, (e) all obligations of such Person in respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (f) all Indebtedness (as defined in the Loan Agreement for
the purpose of this definition) of others secured by (or for which the holder of such Indebtedness has an existing right, contingent
or otherwise, to be secured by) any lien on property owned or acquired by such Person, whether or not the Indebtedness secured
thereby has been assumed, (g) all guaranties by such Person of Indebtedness of others (provided, however, that for the purpose
of measuring the financial covenants set forth in this Guaranty, such guaranties shall exclude non-recourse carve-out guaranties
to the extent that they are contingent with no existing claims thereunder), (h) all capital lease obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in respect of letters of credit and letters of guaranty,
(j) all obligations, contingent or otherwise, of such Person in respect of bankers' acceptances, (k) all obligations contingent
or otherwise, of such Person with respect to any Interest Rate Agreements (calculated on a mark-to-market basis as of the reporting
date), and (l) payments received in consideration of sale of an ownership interest in a Guarantor when the interest so sold is
determined, and the date of delivery is, more than one (1) month after receipt of such payment and only to the extent that the
obligation to deliver such interest is not payable solely in such interest of such Person. The Guarantor Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor either directly or indirectly as a result of (and to the extent of) such Person's ownership
interest in or other relationship with such entity, except to the extent the terms of such Indebtedness provide that such Person
is not liable therefor. Guarantor Indebtedness shall be calculated on a consolidated basis in accordance with GAAP except that
for any non-wholly owned Properties, Guarantor Indebtedness shall be adjusted for Guarantor's and any of its subsidiary's pro rata
ownership percentage and shall eliminate any double counting.

 

Exhibit A

 

    	 

    	 

    

 

"Guaranty Swap Obligation"
means with respect to Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes
a "swap" within the meaning of Section 1a(47) of the Commodity Exchange Act.

 

"Liquidity" means
the sum of unencumbered cash and cash equivalents.

 

"Person" any individual,
corporation, limited liability company, partnership, joint venture, joint stock company, land trust, business trust, unincorporated
organization, Governmental Authority or other entity.

 

"Properties" means
any real property in which Guarantor holds a direct or indirect fee or leasehold interest (or undivided interests in the fee or
leasehold interests in the properties) from time to time.

 

"Tangible Net Worth"
means Total Asset Value less Guarantor Indebtedness (but eliminating any double counting thereof).

 

"Total Asset Value"
means the sum of (without duplication) (a) the aggregate fair market value (as determined by the Guarantor in its reasonable discretion)
of all of Guarantor's Properties existing on the date of this Agreement; plus (b) the greater of (i) the cost basis or
(ii) the as-is, appraised value (based on MAI appraisals) of all of Guarantor's Properties acquired after the date of this
Agreement; plus (c) the amount of any cash and cash equivalents, excluding tenant security and other restricted deposits. For any
non-wholly owned Properties, Total Asset Value shall be adjusted for the Guarantor's and its Subsidiary's pro rata ownership percentage
and shall eliminate any double counting.

 

Exhibit AExhibit 10.8

 

ENVIRONMENTAL AND HAZARDOUS SUBSTANCES
INDEMNITY AGREEMENT

 

Property Commonly Known As

"Whetstone Apartments"

 

This Environmental
and Hazardous Substances Indemnity Agreement (this "Indemnity Agreement") is executed and delivered as
of the 20th day of May, 2015, by BR-TBR WHETSTONE OWNER, LLC, a Delaware limited liability company ("Borrower"),
and BLUEROCK RESIDENTIAL GROWTH REIT, INC., a Maryland corporation ("Guarantor") to and for the
benefit of KEYBANK NATIONAL ASSOCIATION, a national banking association, its successors and assigns ("Lender").

 

RECITALS:

 

A.          On
or about the date hereof, Borrower and Lender entered into that certain Loan Agreement (as amended from time to time, the "Loan
Agreement") whereby Lender agreed to make a secured loan (the "Loan") available to Borrower
in the maximum aggregate amount at any time outstanding not to exceed the sum of Twenty-Five Million One Hundred Forty-Seven Thousand
Five Hundred Dollars ($25,147,500.00), to finance that certain 204-unit multifamily property known as "Whetstone Apartments"
located at 501 Willard Street in Durham, Durham County, North Carolina 27701 (the "Property"). A legal
description of the land included in the Property is set forth on Exhibit A attached hereto.

 

B.           In
connection with the Loan, Borrower has executed and delivered to Lender a Promissory Note in favor of Lender of even date herewith
(as amended from time to time, the "Note") in the principal amount of the Loan, payment of which is secured
by (i) a Deed of Trust made by Borrower in favor of Lender on the Property (as amended from time to time, the "Deed
of Trust") and (ii) the other Loan Documents.

 

C.           Borrower
and Guarantor will derive financial benefit from the Loan evidenced and secured by the Note, the Deed of Trust and the other Loan
Documents.

 

D.           Borrower
and Guarantor are referenced to individually herein as an "Indemnitor" and collectively, jointly and severally,
as "Indemnitors." As a condition to making the Loan, Lender requires the Indemnitors to indemnify Lender
upon the occurrence of certain events.

 

E.           Lender
has relied on the statements and agreements contained herein in agreeing to make the Loan.

 

AGREEMENTS:

 

In consideration of
the Recitals set forth above and hereby incorporated herein, and for other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, Indemnitors hereby agree as follows:

 

1.           Definitions.
(a) Capitalized terms used herein shall have the meanings set forth in Section 1(b) of this Indemnity Agreement
or in the specific sections of this Indemnity Agreement. Capitalized terms used and not otherwise defined in this Indemnity Agreement
shall have the meanings respectively ascribed to them in the Loan Agreement.

 

    	1

    	 

    

 

(b)         For
purposes of this Indemnity Agreement, the following terms shall have the meanings as hereinafter set forth:

 

"Environmental
Laws" means, collectively, all Laws related to or regulating or otherwise related to Hazardous Material, drinking water,
groundwater, wetlands, landfills, open dumps, storage tanks, underground storage tanks, solid waste, waste water, storm water run-off,
waste emissions or wells. Without limiting the generality of the foregoing, the term shall encompass each of the following statutes,
and regulations promulgated thereunder, and amendments and successors to such statutes and regulations, as may be enacted and promulgated
from time to time: the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. §9601 et seq.),
the Hazardous Materials Transportation Act (49 U.S.C. §1801 et seq.), the Public Health Service Act (42 U.S.C.
§300(f) et seq.), the Pollution Prevention Act (42 U.S.C. §13101 et seq.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. 5136 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §6901
et seq.), the Federal Clean Water Act (33 U.S.C. §1251 et seq.), the Federal Clean Air Act (42
U.S.C. §7401 et seq.), and any and all applicable North Carolina and/or Federal statutes, laws and regulations
regarding Hazardous Materials, as amended or restated from time to time including any successor thereto, and any regulations promulgated
pursuant thereto.

 

"Environmental
Proceedings" means any proceedings, hearings or meetings, whether civil (including actions by private parties), criminal,
or administrative proceedings, relating to the environmental conditions or any Hazardous Material at, under, upon, emanating to
or from or otherwise related to the Property.

 

"Governmental
Authority" means any federal, state, county or municipal government, or political subdivision thereof, any governmental
or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality, or public body, or any court,
administrative tribunal, or public utility.

 

"Hazardous Material"
means and includes gasoline, petroleum, asbestos containing materials, explosives, radioactive materials or any hazardous or toxic
material, substance or waste which is defined by those or similar terms or is regulated as such under any Environmental Law of
any Governmental Authority having jurisdiction over the Property or any portion thereof or its use, including: (i) any "hazardous
substance" defined as such in (or for purposes of) the Comprehensive Environmental Response, Compensation and Liability Act,
42 U.S.C.A. § 9601(14) as may be amended from time to time, or any so-called "superfund" or "superlien"
Law, including the judicial interpretation thereof; (ii) any "pollutant or contaminant" as defined in 42 U.S.C.A.
§ 9601(33); (iii) any material now defined as "hazardous waste" pursuant to 40 C.F.R. Part 260; (iv) any
petroleum, including crude oil or any fraction thereof; (v) natural gas, natural gas liquids, liquefied natural gas, or synthetic
gas usable for fuel; (vi) any "hazardous chemical" as defined pursuant to 29 C.F.R. Part 1910; and (vii) any
other toxic substance or contaminant that is subject to any other Environmental Law or other past or present requirement of any
Governmental Authority. The foregoing notwithstanding, any such materials or substances used at the Property or located at the
Property in connection with the maintenance and operation of the Property by Borrower or any tenant under any lease in de minimis
amounts and in accordance with any applicable Environmental Laws shall not constitute Hazardous Materials.

 

    	2

    	 

    

 

"Indemnified
Parties" means Lender and Lender's parent, subsidiaries and affiliates, each of their respective shareholders, directors,
officers, employees and agents, and the successors and assigns of any of them; and "Indemnified Party" shall mean
any one of the Indemnified Parties.

 

"Laws"
means, collectively, all federal, state and local laws, statutes, codes, ordinances, orders, rules and regulations, including judicial
and administrative decrees and opinions or precedential authority in the applicable jurisdiction. Any reference above to a Law
includes the same as it may be amended from time to time, including the judicial interpretation thereof.

 

"Release"
shall mean any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, storing, escaping, leaching, dumping,
or discarding, burying, abandoning, or disposing into the environment.

 

"Threat of Release"
shall mean a substantial likelihood of a Release which requires action to prevent or mitigate damage to the environment which may
result from such Release.

 

2.           Representations
and Warranties. Each Indemnitor hereby represents and warrants to Lender (i) that, except as specifically disclosed in
the Environmental Reports (as defined below) listed in Exhibit B attached hereto and delivered on or before the date of
this Indemnity Agreement (the "Environmental Documents") to the best of its knowledge, (a) the Property
has been and is free from contamination by Hazardous Material, and (b) no Release of any Hazardous Material has occurred on, onto
or about the Property; (ii) that to its knowledge, except as specifically disclosed in the Environmental Documents or the Loan
Documents, the Property currently complies, and will comply based on its anticipated use, with all Environmental Laws; (iii) that,
to each Indemnitor's knowledge in connection with the ownership, operation, and use of the Property, all necessary notices have
been filed and all required permits, licenses and other authorizations have been obtained, including those relating to the generation,
treatment, storage, disposal or use of Hazardous Material; (iv) that to the best of its knowledge, except as disclosed in the Environmental
Documents, there is no present, past or threatened investigation, inquiry, judicial or administrative proceeding, complaint, action,
notice, order or claim relating to the environmental condition of, or to events involving Hazardous Materials on or about, the
Property; (v) except as may be reflected in the documents pursuant to which Borrower acquired the Property (copies of which
have been provided to Lender prior to the date hereof), it has not, nor will it, release or waive the liability of any previous
owner, lessee or operator of the Property or any party who may be potentially responsible for the presence of or removal of Hazardous
Material from the Property, nor has it made promises of indemnification regarding Hazardous Material on the Property to any party,
except as contained herein and in the Loan Documents; (vi) to its knowledge, except as disclosed in the Environmental Documents,
there are no existing or closed underground storage tanks or other underground storage receptacles for Hazardous Materials on the
Property; (vii) to its knowledge, except as disclosed in the Environmental Documents, no notice has been received of a claim by
any party that any use, operation or condition of the Property or any of Borrower's operations has caused any nuisance or any other
liability or adverse condition on any other property nor does Borrower know of any basis for such a claim; and (viii) to its knowledge,
except as disclosed in the Environmental Documents, there are no agreements, consent orders, decrees, judgments, license or permit
conditions or other orders or directives of any federal, state or local court, Governmental Authority or agreements, whether settlement
agreements or otherwise, with any third parties relating to the ownership, use, operation, sale, transfer or conveyance of the
Property that require any change in the present condition of the Property or any work, repairs, construction, containment, clean
up, investigations, studies, removal or other remedial action or capital expenditures with respect to the Property.

 

    	3

    	 

    

 

3.           Covenants.
Indemnitors shall

 

(a)          comply,
and cause all other persons and entities on or occupying the Property to comply, with all Environmental Laws in all material respects;

 

(b)          not
install, use, generate, manufacture, store, treat, release or dispose of, nor permit the installation, use, generation, storage,
treatment, release or disposal of, Hazardous Material on, under or about the Property except in compliance with all Environmental
Laws;

 

(c)          immediately
advise Lender in writing of:

 

(i)          any
and all Environmental Proceedings;

 

(ii)         the
presence of any Hazardous Material in violation of any Environmental Law on, under or about the Property of which Lender has not
previously been advised in writing;

 

(iii)        any
remedial action taken by, or on behalf of, any Indemnitor in response to any Hazardous Material on, under or about the Property
or to any Environmental Proceedings of which Lender has not previously been advised in writing;

 

(iv)        the
discovery by any Indemnitor of the presence of any Hazardous Material on, under or about any real property or bodies of water adjoining
or in the vicinity of the Property in violation of any Environmental Law; and

 

(v)         the
discovery by any Indemnitor of any occurrence or condition on any real property adjoining or in the vicinity of the Property that
could cause the Property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or
use of the Property under any Environmental Law;

 

For the purposes hereof, the term "discovery" shall
mean the date that Indemnitor acquires actual knowledge of such fact or circumstance.

 

(d)         provide
Lender with copies of all reports, analyses, notices, licenses, approvals, orders, correspondences or other written materials in
its possession or control relating to the presence of Hazardous Material at the Property in violation of any Environmental Law
or Environmental Proceedings immediately upon receipt, completion or delivery of such materials;

 

    	4

    	 

    

 

(e)          not
install or allow to be installed any tanks on, at or under the Property in violation of any Environmental Law;

 

(f)          not
create or permit to continue in existence any lien (whether or not such lien has priority over the lien created by the Deed of
Trust) upon the Property imposed pursuant to any Environmental Law;

 

(g)          not
change or alter the present use of the Property unless Indemnitors shall have notified Lender thereof in writing and Lender shall
have determined, in its sole and absolute discretion, that such change or modification will not result in the presence of Hazardous
Material in violation of any Environmental Law on the Property in such a level that would increase the potential liability for
Environmental Proceedings; and

 

(h)         upon
demand by an Indemnified Party, diligently defend any Environmental Proceeding or claim related to the noncompliance of any Environmental
Law with respect to the Property or the use thereof, all at the Indemnitors' own cost and expense and by counsel approved by Lender
in the exercise of its reasonable judgment; provided, however, that Lender may elect, at any time, to conduct its
own defense through counsel selected by Lender at the sole cost and expense of the Indemnitors during the existence of an Event
of Default or in the event of any conflict identified by counsel, or as a result of any dispute with Borrower's counsel regarding
strategy or, in the absence thereof, at Lender's cost.

 

    	5

    	 

    

 

4.           Right
of Entry and Disclosure of Environmental Reports. Subject to the rights of tenants under Leases (as defined in the Loan
Documents), Borrower hereby grants to Lender, its agents, employees, consultants and contractors, an irrevocable license and authorization
to enter upon and inspect the Property at reasonable times and upon reasonable advance notice, and conduct such environmental audits
and tests, including, without limitation, subsurface testing, soils and groundwater testing, and other tests which may physically
invade the Property, which Lender may in its sole and absolute discretion determine are necessary or desirable. With respect to
invasive testing, such as soil borings, Lender shall consult with Borrower in advance of such tests. Lender agrees, however, that
it shall not conduct any such environmental audits or tests, unless an Event of Default exists under the Loan Documents or Lender
has a commercially reasonable belief that such audit or test may disclose the presence or release of Hazardous Material or unless
an environmental audit deems further testing necessary. Without limiting the generality of the foregoing, Borrower agrees that
Lender shall have the right to appoint a receiver to enforce this right to enter and inspect the Property to the extent such authority
is provided under applicable law. All reasonable out-of-pocket costs and expenses incurred by Lender in connection with any inspection,
audit or testing conducted in accordance with this Section 4 shall be paid by Indemnitors upon demand by Lender. Except
to the extent that the results of the tests would obligate Lender or Indemnitors to make further disclosures under applicable law,
the results of all investigations and reports prepared by Lender shall be and at all times remain the property of Lender and under
no circumstances shall Lender have any obligation whatsoever to disclose or otherwise make available to Indemnitors or any other
party such results or any other information obtained by it in connection with such investigations and reports; provided, however,
that if there exists no Event of Default under the Loan Documents, if requested by Borrower, Lender shall provide to Borrower a
copy of the written report with respect to any inspection, audit or testing for which any Indemnitor has paid hereunder. Further,
all such Environmental Reports paid for by an Indemnitor shall be addressed to both Lender and Borrower so that, if no Event of
Default exists, Borrower may rely on all such Environmental Reports to the same extent that Lender may rely on them. Lender hereby
reserves the right, and Indemnitors hereby expressly authorize Lender to make available to any party in connection with a sale
of the Property any and all reports, whether prepared by Lender or prepared by Borrower and provided to Lender (collectively, the
"Environmental Reports") which Lender may have with respect to the environmental condition of the Property.
Indemnitors consent to Lender notifying any party under such circumstances of the availability of any or all of the Environmental
Reports and the information contained therein. Each Indemnitor further agrees that Lender may disclose such Environmental Reports
to any Governmental Authority if Lender reasonably believes that it is required to disclose any matter contained therein to such
Governmental Authority; provided that Lender shall give Borrower at least 48 hours prior written notice before so doing
and that Lender shall copy Borrower on any and all such notices. Notwithstanding anything herein to the contrary, in the event
that there exists no Event of Default under the Loan Documents and disclosure is required (or reasonably believed to be required
by Lender or Borrower) to any Governmental Authority as a result of the Environmental Reports, to the extent permitted by applicable
Law and so long as Lender does not incur liability as a result thereof, Lender shall permit Borrower to make and control such disclosure(s),
with copies thereof provided to Lender. Each Indemnitor acknowledges that Lender cannot control or otherwise assure the truthfulness
or accuracy of the Environmental Reports, and that the release of the Environmental Reports, or any information contained therein,
to prospective bidders at any foreclosure sale of the Property may have a material and adverse effect upon the amount which a party
may bid at such sale. Each Indemnitor agrees that Lender shall not have any liability whatsoever as a result of delivering any
or all of the Environmental Reports or any information contained therein to any third party, and each Indemnitor hereby releases
and forever discharges Lender from any and all claims, damages, or causes of action arising out of, connected with or incidental
to the Environmental Reports or the delivery thereof.

 

5.           Indemnitor's
Remedial Work. Indemnitors shall promptly perform any and all necessary remedial work ("Remedial Work")
in response to any Environmental Proceedings or the presence, storage, use, disposal, transportation, discharge or release of any
Hazardous Material on, under or about any of the Property in violation of Environmental Laws; provided, however,
that Indemnitors shall perform or cause to be performed such Remedial Work so as to minimize any impairment to Lender's security
under the Loan Documents. All Remedial Work shall be conducted:

 

(a)          in
a diligent and timely fashion by licensed contractors acting under the supervision of a consulting environmental engineer;

 

(b)          pursuant
to a detailed written plan for the Remedial Work approved by any public or private agencies or persons with a legal or contractual
right to such approval;

 

(c)          with
such insurance coverage pertaining to liabilities arising out of the Remedial Work as is then customarily maintained with respect
to such activities; and

 

(d)          only
following receipt of any required permits, licenses or approvals.

 

    	6

    	 

    

 

The selection of the
Remedial Work contractors and consulting environmental engineer, the contracts entered into with such parties, any disclosures
to or agreements with any public or private agencies or parties relating to Remedial Work and the written plan for the Remedial
Work (and any changes thereto) shall each be subject to Lender's prior written approval, which shall not be unreasonably withheld
or delayed. In addition, Indemnitors shall submit to Lender, promptly upon receipt or preparation, copies of any and all reports,
studies, analyses, correspondence, governmental comments or approvals, proposed removal or other Remedial Work contracts and similar
information prepared or received by Indemnitors in connection with any Remedial Work, or Hazardous Material relating to the Property.
All costs and expenses of such Remedial Work shall be paid by Indemnitors, including, without limitation, the charges of the Remedial
Work contractors and the consulting environmental engineer, any taxes or penalties assessed in connection with the Remedial Work
and Lender's reasonable fees and out-of-pocket costs incurred in connection with monitoring or review of such Remedial Work. Lender
shall have the right but not the obligation to join and participate in, as a party if it so elects, any legal proceedings or actions
initiated in connection with any Environmental Proceedings.

 

6.           Indemnity.
Indemnitors shall protect, indemnify, defend and hold Lender and any successors to Lender's interest in the Property, and any other
Person who acquires any portion of the Property at a foreclosure sale or otherwise through the exercise of Lender's rights and
remedies under the Loan Documents, and all directors, officers, employees and agents of all of the aforementioned indemnified parties,
harmless from and against any and all actual or potential claims, liabilities, damages (direct or indirect), losses, fines, penalties,
judgments, awards, costs and expenses (including, without limitation, reasonable attorneys' fees and costs and expenses of investigation)
(collectively, "Expenses") which arise out of or relate in any way to any breach of any representation,
warranty or covenant contained herein, or any Environmental Proceedings or any use, handling, production, transportation, disposal,
release or storage of any Hazardous Material in, under or on the Property in violation of any Environmental Law, whether by any
Indemnitor or any other person, including, without limitation:

 

(a)         all
foreseeable and all unforeseeable Expenses arising out of:

 

(i)          Environmental
Proceedings or the use, generation, storage, discharge or disposal of Hazardous Material by Indemnitors, any prior owner or operator
of the Property or any person on or about the Property;

 

(ii)         any
residual contamination arising from the Property affecting any natural resource or the environment; or

 

(iii)        any
exercise by Lender of any of its rights and remedies hereunder; and

 

(b)         the
costs of any required or necessary investigation, assessment, testing, remediation, repair, cleanup, or detoxification of the Property
and the preparation of any closure or other required plans.

 

    	7

    	 

    

 

Indemnitors' liability
to the aforementioned indemnified parties shall arise upon the earlier to occur of (1) discovery of any such Hazardous Material
on, under or about the Property, that is in violation of the Environmental Laws or (2) the institution of any Environmental Proceedings,
and not upon the realization of loss or damage, and Indemnitors shall pay to Lender from time to time, immediately upon request,
an amount equal to such Expenses, as reasonably determined by Lender. In addition, in the event any Hazardous Material is removed,
or caused to be removed from the Property, by Indemnitors, Lender or any other person, the number assigned by the U.S. Environmental
Protection Agency to such Environmental Proceedings or any similar identification shall in no event be in the name of Lender or
identify the Lender as a generator, arranger or other designation. The foregoing indemnity shall not include Expenses arising solely
from (x) Hazardous Material which first exist on the Property (or if previously existing on the Property in compliance with
Environmental Laws, first violate any Environmental Law) following the date on which the Lender takes title to the Property, whether
by foreclosure of the Deed of Trust, deed-in-lieu thereof or otherwise or (y) any acts of Lender that constitute gross negligence
or willful misconduct of Lender or any other Indemnified Party.

 

7.           Remedies
Upon Default. In addition to any other rights or remedies Lender may have under this Indemnity Agreement, at law or in
equity, in the event that Indemnitors shall fail to timely comply with any of the provisions hereof, or in the event that any representation
or warranty made herein proves to be false or misleading, then, in such event, after (i) delivering written notice to Indemnitors,
which notice specifically states that Indemnitors have failed to comply with the provisions of this Indemnity Agreement; and (ii)
the expiration of the earlier to occur of the thirty (30) day period after receipt of such notice (or, if such default cannot be
reasonably cured within the thirty (30) day period, if Borrower does not commence to cure such nonmonetary default within such
thirty (30) day period or thereafter fails to diligently and continuously proceed to cure such nonmonetary default) or the cure
period, if any, permitted under any applicable Law with which Indemnitors shall have failed to comply, Lender may declare an Event
of Default under the Loan Documents and exercise any and all remedies provided for therein, and/or do or cause to be done whatever
is reasonably necessary to cause the Property to comply with all Laws relating to Hazardous Material and other applicable Laws,
and the cost thereof shall constitute an Expense hereunder and shall become immediately due and payable without notice and with
interest thereon at the Default Rate (as defined in the Note) until paid. Subject to the rights of tenants under Leases, Indemnitors
shall give to Lender and its agents and employees access to the Property for the purpose of effecting such compliance and hereby
specifically grant to Lender a license, effective upon expiration of the applicable period as described above, if any, to do whatever
is necessary to cause the Property to so comply, including, without limitation, to enter the Property and remove therefrom any
Hazardous Material that violates any Environmental Law or otherwise comply with any Laws relating to Hazardous Material.

 

8.           Obligations.
The obligations set forth herein, including, without limitation, Indemnitors' obligation to pay Expenses hereunder, are collectively
referred to as, the "Environmental Obligations". Notwithstanding any term or provision contained herein
or in the Loan Documents, the Environmental Obligations are unconditional. Indemnitors shall be fully and personally liable for
the Environmental Obligations hereunder, and such liability shall not be limited to the original principal amount of the Loan.
Subject to clauses (i) through (iv) below, the Environmental Obligations shall survive the repayment of the Loan and any foreclosure,
deed-in-lieu of foreclosure or similar proceedings by or through which Lender or any of its affiliates, nominees, successors or
assigns or any other person bidding at a foreclosure sale (each, a "Successor Owner") may obtain title
to the Property or any portion thereof, provided, however, that the Indemnitor shall not be liable to a Successor
Owner for any Environmental Obligations which arise solely from events or conditions at the Property which arise after the Successor
Owner has taken title to the Property. Notwithstanding anything herein to the contrary, the Environmental Obligations shall terminate
upon fulfillment of each of the following conditions to the reasonable satisfaction of Lender:

 

    	8

    	 

    

 

(i)          Lender
shall have received full repayment of the Loan, and there shall have expired all periods of time within which a claim for the recovery
of a preferential payment or fraudulent conveyance could be filed or asserted with respect to such repayment;

 

(ii)         No
Environmental Proceeding or any other environmental claim relating to the Property shall be pending or threatened in writing;

 

(iii)        The
Loan has been repaid without Lender or any affiliate thereof ever having taken possession of the Property through the appointment
of a receiver or through any other exercise of Lender's rights and remedies following an Event of Default under any of the Loan
Documents; and

 

(iv)        At
least twelve (12) months have passed since the date that the Loan was paid in full in cash and no claim has been asserted for which
any indemnification is provided for in this Indemnity Agreement.

 

The liabilities of
Indemnitors under this Indemnity Agreement shall in no way be limited or impaired by, and each Indemnitor hereby consents to and
agrees to be bound by, any amendment or modification of the provisions of the Loan Documents to or with Lender by Borrower or Guarantor
or any related party to or affiliate of Lender who succeeds Borrower as owner of the Property. In addition, notwithstanding any
terms of any of the Loan Documents to the contrary, the liability of each Indemnitor under this Indemnity Agreement shall in no
way be limited or impaired by: (i) any extensions of time for performance required by any of the Loan Documents; (ii) any sale,
assignment or foreclosure of the Note or the Deed of Trust or any sale or transfer of all or part of the Property; (iii) any exculpatory
provision in any of the Loan Documents limiting Lender's recourse to property encumbered by the Deed of Trust or to any other security,
or limiting Lender's rights to a deficiency judgment against any Borrower; (iv) the accuracy or inaccuracy of the representations
and warranties made by any Borrower or Guarantor under any of the Loan Documents; (v) the release of any Borrower or Guarantor
or any other person from performance or observance of any of the agreements, covenants, terms or conditions contained in the Loan
Documents by operation of law, Lender's voluntary act, or otherwise; (vi) the release or substitution, in whole or in part, of
any security for the Note; or (vii) Lender's failure to record the Deed of Trust or file any UCC-1 financing statements (or Lender's
improper recording or filing of any thereof) or to otherwise perfect, protect, secure or insure any security interest or lien given
as security for the Note; and, in any such case, whether with or without notice to Borrower or any Guarantor and with or without
consideration.

 

Each Indemnitor waives
any right or claim of right to cause a marshalling of any Borrower's assets or to cause Lender to proceed against any of the security
for the Loan before proceeding under this Indemnity Agreement against any Indemnitor or to proceed against any Indemnitor in any
particular order; each Indemnitor agrees that any payments required to be made hereunder shall become due on demand; each Indemnitor
expressly waive and relinquish all rights and remedies (including any rights of subrogation) accorded by applicable law to indemnitors
or guarantors.

 

    	9

    	 

    

 

9.           Waiver.
No waiver of any provision of this Indemnity Agreement nor consent to any departure by Indemnitors therefrom shall in any event
be effective unless the same shall be in writing and signed by Lender and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given. No notice to or demand on Indemnitors shall in any case entitle
Indemnitors to any other or further notice or demand in similar or other circumstances.

 

10.         Exercise
of Remedies. No failure on the part of Lender to exercise and no delay in exercising any right or remedy hereunder, at
law or in equity, shall operate as a waiver thereof. Lender shall not be estopped to exercise any such right or remedy at any future
time because of any such failure or delay; nor shall any single or partial exercise of any such right or remedy preclude any other
or further exercise of such right or remedy or the exercise of any other right or remedy.

 

11.         Assignment.
Lender may assign its interest under this Indemnity Agreement to any successor to its respective interests in the Property or the
Loan Documents. This Indemnity Agreement may not be assigned or transferred in whole or in part by Indemnitors, except upon prior
written consent of Lender, and any purported assignment by Indemnitors of this Indemnity Agreement (without Lender's prior written
consent) shall be void ab initio and of no force or effect.

 

12.         Counterparts.
This Indemnity Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original and all of such counterparts taken together shall constitute
but one and the same instrument.

 

13.         Governing
Law. This Indemnity Agreement shall be governed by, and shall be construed in accordance with, the laws of the State of
North Carolina.

 

14.         Modifications.
This Indemnity Agreement may be amended or modified only by an instrument in writing which by its express terms refers to this
Indemnity Agreement and which is duly executed by Indemnitors and consented to in writing by Lender.

 

15.         Attorneys'
Fees. If Lender commences litigation for the enforcement, termination, cancellation or rescission of this Indemnity Agreement,
or for damages for the breach of this Indemnity Agreement, Lender shall be entitled to its reasonable attorneys' fees (including,
but not limited to, in-house counsel fees) and court and other costs incurred in connection therewith.

 

16.         Interpretation.
This Indemnity Agreement has been negotiated by parties knowledgeable in the matters contained herein, with the advice of counsel,
is to be construed and interpreted in absolute parity, and shall not be construed or interpreted against any party by reason of
such party's preparation of the initial or any subsequent draft of the Loan Documents or this Indemnity Agreement.

 

17.         Severability.
If any term or provision of this Indemnity Agreement shall be determined to be illegal or unenforceable, all other terms and provisions
in this Indemnity Agreement shall nevertheless remain effective and shall be enforced to the fullest extent permitted by law.

 

    	10

    	 

    

 

18.         Other
Laws. Nothing in this Indemnity Agreement, and no exercise by Lender of its rights or remedies under this Indemnity Agreement,
shall impair, constitute a waiver of, or in any way affect Lender's rights and remedies with respect to Indemnitors under any Environmental
Laws, including without limitation, contribution provisions or private right of action provisions under such Environmental Laws.

 

19.         Notices.
Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall
be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States
Certified Mail (postage prepaid, return receipt requested), three Business Days after mailing; (c) if by Federal Express or other
reliable overnight courier service, on the next Business Day after delivered to such courier service or (d) if by telecopier on
the day of transmission so long as copy is sent on the same day by overnight courier as set forth below:

 

	Borrower:	BR-TBR Whetstone Owner, LLC
	 	c/o Bluerock Real Estate Holdings, LLC
	 	712 Fifth Avenue, 9th Floor
	 	New York, New York  10019
	 	Attention:	Jordan B. Ruddy, President
	 	Telephone:	(646) 278-4223
	 	Facsimile:	(212) 278-4220
	 	 	 
	And with a copy to:	Hirschler Fleischer – Attorneys at Law
	 	P.O. Box 500
	 	Richmond, VA  23218-0500
	 	Attention:	Edward S. Flanagan, Esq.
	 	Telephone:	(804) 771-9592
	 	Fax:	(804) 644-0957
	 	 	 
	Guarantor:	Bluerock Residential Growth REIT, Inc.
	 	c/o Bluerock Real Estate Holdings, LLC
	 	712 Fifth Avenue, 9th Floor
	 	New York, New York  10019
	 	Attention:	Jordan B. Ruddy, President
	 	Telephone:	(646) 278-4223
	 	Facsimile:	(212) 278-4220
	 	 	 
	With a copy to:	Hirschler Fleischer – Attorneys at Law
	 	P.O. Box 500
	 	Richmond, VA  23218-0500
	 	Attention:	Edward S. Flanagan, Esq.
	 	Telephone:	(804) 771-9592
	 	Fax:	(804) 644-0957

 

    	11

    	 

    

 

	Lender:	KeyBank National Association
	 	225 Franklin Street, 18th Floor
	 	Boston, Massachusetts  02110
	 	Attention:	Christopher T. Neil, Institutional Real Estate
	 	Telephone:	(617) 385-6202
	 	Facsimile:	(617) 385-6293
	 	 	 
	With a copy (which shall not constitute notice) to:
	 	 	 
	 	Locke Lord LLP
	 	2800 Financial Plaza
	 	Providence, Rhode Island 02903
	 	Attention:	Gail E. McCann, Esq.
	 	Telephone:	(401) 276-6527
	 	Facsimile:	(888) 325-9041

 

or at such other address as the party to
be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service
of notice.

 

20.         Joint
and Several Liability. Indemnitors agree that they shall each be jointly and severally liable for the performance of the
Environmental Obligations and all other obligations of Indemnitors contained herein.

 

21.         Captions.
The headings of each section herein are for convenience only and do not limit or construe the contents of any provisions of this
Indemnity Agreement.

 

(The next page is the signature page.)

 

    	12

    	 

    

 

IN WITNESS WHEREOF,
Indemnitors have caused this Indemnity Agreement to be executed as of the day and year first above written.

 

	 	BR-TBR WHETSTONE OWNER, LLC, a

Delaware limited liability company
	 	 	 	 
	 	By:	/s/ Jordan Ruddy
	 	 	 Jordan Ruddy, Authorized Signatory
	 	 	 
	 	BLUEROCK RESIDENTIAL GROWTH REIT,

INC., a Maryland corporation
	 	 	 	 
	 	 	By:  	/s/ R. Ramin Kamfar
	 	 	 	R. Ramin Kamfar
	 	 	 	Chairman of the Board, Chief Executive

Officer and President

 

[Signature
Page to Environmental Indemnity (Whetstone Apartments)]

 

    	 

    	 

    

 

Exhibit A

 

Legal Description

 

FEE TRACT

 

All of the following land, with the buildings
and improvements thereon, lying and being situate in Durham County, North Carolina, and being more particularly described as follows:

 

BEING all of that certain parcel containing
approximately 2.0994 acres as shown on a map entitled "Exempt Final Recombination Plat 300 Jackson Street & 501 Willard
St" recorded in Plat Book 192, Page 3, Durham County Registry which is more fully described as:

 

Beginning at a PK nail on the eastern right
of way of Willard Street; thence with a curve turning to the right with an arc length of 31.04', with a radius of 20.00', with
a chord bearing of N 45°11 ' 41" E, with a chord length of 28.02' to an existing iron pipe; thence N 89°41'27"
E a distance of 185.08' to an existing iron pipe; thence with a curve turning to the right with an arc length of 114.62', with
a radius of 190.37', with a chord bearing of S 73°14'22" E, with a chord length of 112.90' to an existing iron pipe; thence
S 59°12'33" E a distance of 111.39' to an existing iron pipe; thence S 30°47'27" W a distance of 90.76' to an
existing iron pipe; thence S 27°33'27" W a distance of 158.72' to an existing iron pipe; thence N 59°12'33"W
a distance of 113.65' to an existing iron pipe; thence N 89°21'33"W a distance of 193.78' to an existing iron pipe; thence
N 00°38'27"E a distance of 227.18' to an existing iron pipe; which is the point of Beginning, having an area of 91,449.07
square feet or 2.099 acres as shown on plat prepared by Coulter Jewell Thames PA recorded in the Durham County Registry in Book 192
Page 3.

 

EASEMENT TRACT

 

TOGETHER WITH easements contained or conveyed
in that certain Temporary Easement Agreement by and between BR-TBR Whetstone Owner, LLC, TriBridge Residential, LLC, University
Ford, Inc., and University Properties of N.C., L.L.C. being recorded in Durham County Registry prior to the Deed of Trust from
BR-TBR Whetstone Owner, LLC to KeyBank National Association.

 

    	 

    	 

    

 

Exhibit B

 

Environmental Reports

 

Freddie Mac Multi-Family Seller/Servicer
Phase I Environmental Site Assessment of Whetstone Apartments prepared by Blackstone Consulting LLC dated February 11, 2015

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