Document:

Exhibit 10.1

 

SECOND AMENDMENT TO LINE OF CREDIT AND
SECURITY AGREEMENT

 

THIS SECOND AMENDMENT
TO LINE OF CREDIT AND SECURITY AGREEMENT (this “Agreement”) is made as of August 13, 2013, between and among
BLUEROCK MULTIFAMILY GROWTH REIT, INC., a Maryland corporation f/k/a Bluerock Enhanced Multifamily Trust,
Inc. (the “Borrower”), and BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND II, LLC, a Delaware
limited liability company (“SOIF II”) and BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND III, LLC,
a Delaware limited liability company (“SOIF III,” and together with SOIF II and their collective successors
and assigns, the “SOIF Parties”).

 

WITNESSETH:

 

WHEREAS, the
SOIF Parties and the Borrower entered into that certain Line of Credit and Security Agreement dated as of October 2, 2012 (the
“LOC Agreement”), which LOC Agreement evidenced a revolving line of credit and the obligation of the Borrower
thereunder to repay to the SOIF Parties the principal sum of up to Twelve Million Five Hundred Thousand dollars ($12,500,000.00)
(the “Commitment Amount”) plus interest, fees and costs; and

 

WHEREAS, the
SOIF Parties and the Borrower entered into that certain Line of Credit and Security Agreement Modification Agreement dated as of
March 4, 2013, whereunder the SOIF Parties and the Borrower modified the LOC Agreement to (i) increase the Commitment Amount to
Thirteen Million Five Hundred Thousand dollars ($13,500,000.00), and (ii) extend the maturity date thereof by six (6) months to
October 2, 2013; and

 

WHEREAS, the
LOC as amended March 4, 2013 (the “Amended LOC”) is secured by certain assets owned by the Borrower, including
but not limited to the Borrower’s membership interests in BR Berry Hill Managing Member, LLC, a majority owner of BR Stonehenge
23 Hundred, LLC, the owner of 23 Hundred, LLC, the owner of a 266-unit multi-family development project known as 23Hundred@Berry
Hill, Nashville, Tennessee (the “Berry Hill Collateral”); and

 

WHEREAS, the
outstanding principal balance under Amended LOC as of the effective date is $12,960,000.00; and

 

WHEREAS, the
Borrower is seeking to sell a portion of the Berry Hill Collateral and is requesting the SOIF Parties’ consent to a one-time
release of their lien on the cash proceeds that would result from such sale; and

 

WHEREAS, the
SOIF Parties are willing to grant such request, subject to the terms and conditions set forth herein, including but not limited
to eliminating the Borrower’s right to further borrow against the Amended LOC;

 

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

 

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

 

2. Amendment to Amended LOC.
The Amended LOC is hereby modified and amended as follows:

 

		A.	The second sentence of Section 1 of the Amended LOC - - which sentence provides as follows: “The
Line of Credit shall be a revolving line of credit, against which disbursements may be made to Borrower, repaid by Borrower and
additional disbursements made to Borrower, subject to the limitations contained in this Agreement; provided, that the SOIF Parties
shall have no obligation to make any disbursement (A) that would cause the outstanding principal balance of the Line of Credit
plus all outstanding principal and any accrued but unpaid interest to exceed the Commitment Amount or (B) if there is an Event
of Default or a Default (as defined below).” - - is hereby deleted in its entirety.

 

    	 

    	 

    

 

Exhibit 10.1

 

		B.	Section 2 of the Amended LOC - - which Section provides as follows: “Advances. Advances under
the Line of Credit will be made by the SOIF Parties upon receipt by the SOIF Parties of at least five (5) days' prior written notice
setting forth the amount of the advance.” - - is hereby deleted in its entirety and is replaced as follows as of the effective
date:

 

		“2.	No Re-Borrowing. Borrower shall have no right to make further draws against, or re-borrow any funds
under the Line of Credit.”

 

		C.	Section 3 of the Amended LOC - - which Section provides as follows: “The Note. Borrower's
obligation to pay the principal of and interest on the Line of Credit shall be evidenced by a Promissory Note (the "Note"),
substantially in the form attached hereto as Exhibit A, which shall (i) be duly executed and delivered by Borrower, (ii) be dated
as of the date hereof, (iii) be in the stated principal amount of the Line of Credit, (iv) mature on the Maturity Date, (v) bear
interest as provided in the Note, and (vi) be governed by this Agreement.” - - is hereby deleted in its entirety and is replaced
as follows as of the effective date:

 

		“3.	The Replacement Promissory Note. Borrower's obligation to pay the principal of and interest on
the Line of Credit shall be evidenced by a Replacement Promissory Note modified in accordance with this Second Amendment to Line
of Credit and Security Agreement including but not limited to providing that it shall (i) be in the stated principal amount of
$12,960,000 as of the effective date, (ii) be dated, duly executed and delivered by Borrower as of the effective date hereof, (iii)
replace the Note previously delivered under the Amended LOC, (iv) bear interest as provided in the Amended LOC, and (iv) mature
on the Maturity Date.”

 

		D.	Section 15 of the Amended LOC Agreement is deleted in its entirety, and is hereby replaced as follows:

 

		“15.	Notices. Any notice required or permitted to be given hereunder shall be in writing and will be
deemed received (a) on the date of receipted delivery by a courier service or (b) on the fifth business day after mailing, by registered
or certified United States mail, postage prepaid, to the appropriate party at its address set forth below:

 

	If to Borrower:	c/o Bluerock Enhanced Multifamily Advisor
	 	712 Fifth Avenue, 9th Floor
	 	New York, NY 10019
	 	Attn:  Michael L. Konig, Esq.

 

	If to SOIF II:	c/o BR SOIF II Manager
	 	712 Fifth Avenue, 9th Floor
	 	New York, NY 10019
	 	Attn: Jordan B. Ruddy

 

	If to SOIF III:	c/o BR SOIF III Manager
	 	712 Fifth Avenue, 9th Floor
	 	New York, NY 10019
	 	Attn: Jordan B. Ruddy”

 

3. Partial Release of Berry Hill
Collateral. The SOIF Parties hereby release the lien of their security interest in nineteen and fifty three one-hundredths
percent (19.53%) of the Borrower’s ownership interests in the Berry Hill Collateral, which is the equivalent of a twelve
and forty five one-hundredths percent (12.45%) interest in BR Berry Hill Managing Member, LLC, which is the equivalent of a ten
and twenty seven one-hundredths percent (10.27%) indirect ownership interest in 23 Hundred, LLC. This will be a one-time release
of the SOIF Parties’ security interests, for which the Borrower shall pay the SOIF Parties an aggregate $100,000 release
fee, which shall be deemed automatically added to the principal balance of the Replacement Promissory Note as of the date of the
Borrower’s sale of such interest in the Berry Hill Collateral and payable from the proceeds of the next sale of assets by
Borrower or on the Maturity Date, whichever occurs earlier. 

 

    	 

    	 

    

 

Exhibit 10.1

 

4. Effectiveness. The modifications
provided in paragraph 2 hereof shall be effective as of August 95, 2013.

 

5. Reaffirmation of LOC Agreement.
All other provisions of the Amended LOC shall continue to be in full force and effect.

 

[Remainder of
page intentionally left blank. Signature page follows.]

 

    	 

    	 

    

 

Exhibit 10.1

 

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

 

Borrower:

 

BLUEROCK MULTIFAMILY GROWTH REIT, INC., 

a Maryland corporation f/k/a Bluerock Enhanced Multifamily
Trust, Inc.

 

	By:	/s/ Jordan Ruddy 	 
	Name: 	 Jordan Ruddy	 
	Its: 	Authorized Signatory	 

 

SOIF Parties:

 

BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND II, LLC

a Delaware limited liability company

 

	By:	BR SOIF II Manager, LLC
	 	a Delaware limited liability company
	Its:	Manager

 

	 	By:	Bluerock Real Estate, L.L.C,
	 	 	a Delaware limited liability company
	 	Its:	Sole Member

 

	 	 	By:	/s/ Ramin Kamfar 	 
	 	 	Name:	Ramin Kamfar	 
	 	 	Title:	Authorized Signatory	 

 

BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND III, LLC

a Delaware limited liability company

 

	By:	BR SOIF III Manager, LLC
	 	a Delaware limited liability company
	Its:	Manager

 

	 	By:	Bluerock Real Estate, L.L.C,
	 	 	a Delaware limited liability company
	 	Its:	Sole Member

 

	 	 	By:	/s/ Ramin Kamfar  	 
	 	 	Name:	Ramin Kamfar	 
	 	 	Title:	Authorized SignatoryExhibit 10.2

 

REPLACEMENT PROMISSORY NOTE

 

	$12,960,000	August 13, 2013

  

For value received,
BLUEROCK MULTIFAMILY GROWTH REIT, INC. (f/k/a BLUEROCK ENHANCED MULTIFAMILY TRUST, INC.), a Maryland corporation (the “Borrower”),
hereby promises to pay to the order of BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND II, LLC, a Delaware limited liability
company, and BLUEROCK SPECIAL OPPORTUNITY + INCOME FUND III, LLC, a Delaware limited liability company (together
with their successors and assigns, the “Lender”) the principal sum of Twelve Million Nine Hundred Sixty Thousand
Dollars ($12,960,000), plus interest, fees and costs, in accordance with the terms and conditions of this promissory note (the
“Note”).

 

This Note is issued,
executed and delivered by Borrower to Lender in replacement and full satisfaction of that certain Promissory Note dated October
2, 2012 in the amount of ‘up to’ $12,500,000, as modified by that certain Promissory Note Modification Agreement dated
as of March 4, 2013 (together, the “Prior Note”).

 

This
Note shall accrue interest at a simple annual interest rate of the currently pending 30-Day LIBOR Rate plus 6.00%, subject to a
minimum interest rate of at least eight and one-half percent (8.5%) per annum. All outstanding principal and interest shall
be due and payable on October 2, 2013 (the “Maturity Date”).

 

This Note may be prepaid
in whole or in part at any time or from time to time without penalty. Payments shall be applied first against interest or other
charges and/or fees (other than principal), and next to the payment of principal. Borrower expressly acknowledges that a $100,000
lien release fee may be added to the principal balance of this Note upon consummation of the sale by Borrower of a 12.447% interest
held by its subsidiary in BR Berry Hill Managing Member, LLC.

 

If
this Note is not paid in full on the Maturity Date, then, at the Lender’s election, all amounts not paid when due
at the Maturity Date shall become part of principal and shall thereafter accrue interest at the rate of twelve percent (12%) per
annum. In the event of an acceleration of the maturity of this Note (as described below), this Note
shall become immediately due and payable without presentation, demand, protest or notice of dishonor, all of which are hereby waived
by the Borrower. The Borrower also shall pay and this Note shall evidence Borrower’s obligation to pay Lender
any and all actual costs incurred by Lender for the interpretation, performance, exercise, enforcement or protection of its rights
hereunder and for the collection of Borrower’s obligations under this Note and for the protection of the security for this
Note, including reasonable attorneys’ fees and expenses, and all costs to collect, possess, preserve, repair and liquidate
the collateral given by Borrower to secure the obligations owed to Lender.

 

If the rate of interest
required to be paid hereunder exceeds the maximum rate permitted by law, such rate of interest shall be automatically reduced to
the maximum rate permitted by law and any amounts collected in excess of the permissible amount shall be returned to Borrower or
applied to principal all pursuant to the terms of and as further set forth herein. To the fullest extent permitted by law, interest
shall continue to accrue after the filing by or against Borrower of any petition seeking any relief in bankruptcy or under any
act or law pertaining to insolvency or debtor relief, whether state, federal or foreign.

 

If Borrower makes any
payment to Lender that is subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid
to a trustee, receiver or any other party, then, to the extent of such payment, the obligation intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been received by Lender.

 

    	 

    	 

    

 

The Borrower covenants,
warrants, and represents to the Lender that:

 

		(i)	the execution, delivery and performance of this Note have been duly authorized;

 

		(ii)	this Note is enforceable against the Borrower in accordance with its terms;

 

		(iii)	the execution and delivery of this Note does not violate or constitute a breach of any agreement
to which the Borrower is a party; and

 

		(iv)	the loan evidenced by this Note is for commercial purposes and will not be used in any consumer
transaction.

 

Payment of this Note
is secured by the pledge of the Collateral as that term is defined in that certain Line of Credit and Security Agreement dated
October 2, 2012, as amended March 4, 2013 and as further amended by that certain Second Amendment to Line of Credit and Security
Agreement dated as of August 9, 2013, among the Borrower and the Lender (the “Pledge Agreement”).

 

The occurrence of any
one or more of the following shall constitute an Event of Default under this Note:

 

		(a)	the Borrower fails to pay Lender any interest, principal or other money due and payable by Borrower
to Lender under this Note on or before the Maturity Date thereof;

 

		(b)	the failure of Borrower to comply with any material covenant set forth herein and the expiration
of any applicable notice and cure provisions contained herein;

 

		(c)	the occurrence of an Event of Default under the Pledge Agreement and the expiration of any applicable
notice and cure provisions contained therein;

 

		(d)	the Borrower terminates its existence, voluntarily or involuntarily, allows the appointment of
a receiver for any part of its property or makes an assignment for the benefit of creditors; or

 

		(e)	the Borrower does any of the following:

 

		(i)	admits in writing its inability to pay its debts generally as they become due;

 

		(ii)	consents to, or acquiesce in, the appointment of a receiver,
liquidator or trustee of itself or of the whole or any substantial part of its properties or assets;

 

		(iii)	files a petition or answer seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under the Federal Bankruptcy laws or any other applicable
law;

 

		(iv)	has a court of competent jurisdiction enter an order,
judgment or decree appointing a receiver, liquidator or trustee of Borrower, or of the whole or any substantial part of the property
or assets of Borrower, and such order, judgment or decree shall remain unvacated or not set aside or unstayed for sixty (60) days;

 

		(v)	has a petition filed against it seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar relief under the Federal Bankruptcy laws or any other
applicable law and such petition shall remain undismissed for sixty (60) days;

 

		(vi)	has, under the provisions of any other law for the relief
or aid of debtors, any court of competent jurisdiction assume custody or control of Borrower or of the whole or any substantial
part of its property or assets and such custody or control shall remain unterminated or unstayed for sixty (60) days;

 

    	 

    	 

    

 

(vii)
has an attachment or execution levied against any substantial portion of the property of Borrower which is not discharged or dissolved
by a bond within thirty (30) days; or

 

(viii)
has any materially adverse change in its financial condition since the date of this Note.

 

Upon the occurrence
of an Event of Default, the Lender may at any time thereafter exercise any one or more of the following remedies:

 

		(a)	the Lender may accelerate the Maturity Date and declare the unpaid principal balance, accrued but
unpaid interest and all other amounts payable hereunder at once due and payable,

 

		(b)	the Lender may set off the amount due against any and all accounts, credits, money, securities
or other property held by or in the possession of the Lender;

 

		(c)	the Lender may exercise any of its other rights, powers and remedies available at law or in equity.
All of the rights and remedies of the Lender under this Note, at law or in equity are cumulative, and the exercise by the Lender
of any one or more of such rights and remedies shall not preclude the simultaneous or later exercise by the Lender of any or all
such other rights and remedies.

 

The enumeration of Lender’s rights
and remedies herein is not intended to be exhaustive and the exercise by Lender of any right or remedy shall not preclude the exercise
of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Pledge Agreements or that may now or hereafter exist in law or in equity or by suit or otherwise.

 

This Note shall
be governed by and construed in accordance with the internal laws of the State of New York, notwithstanding any conflicts-of-law
provision to the contrary. The Borrower and Lender waive their respective rights to a jury trial to the maximum extent permitted
by law for any claim or cause of action arising out of this Note. Each party has reviewed this waiver with its counsel.

 

Except as specifically
provided herein and except as prohibited by law, Borrower hereby waives presentment, demand, protest
and notice of dishonor, as well as the benefit of any exemption under the Homestead and all other exemption or insolvency laws
as to this debt.

 

Lender’s failure
at any time to require strict performance by Borrower hereunder shall not waive or affect any right of Lender at any time thereafter
to demand strict performance, and any waiver of any Event of Default by Lender shall not waive or affect any other Event of Default,
whether prior or subsequent thereto, and whether of the same or a different type. None of the provisions of this Note shall be
deemed waived by any act, knowledge or course of dealing of Lender, or its agents, except by an instrument in writing signed by
Lender and directed to Borrower specifying such waiver.

 

All notices, requests,
demands and other communications with respect hereto shall be in writing and shall be delivered by hand against a receipt, sent
prepaid by FedEx (or a comparable overnight delivery service) or sent by the United States mail, certified, postage prepaid, return
receipt requested, at the addresses designated below. Any notice, request, demand or other communication delivered or sent in the
manner aforesaid shall be deemed given or made (as the case may be) only when actually received by the intended recipient. Rejection
or other refusal to accept or the inability to deliver because of a changed address of which no written notice was given shall
be deemed to be receipt of the notice, request, demand or other communication sent as of the date three (3) business days following
the date such rejected, refused or undeliverable notice was sent. The Borrower or the Lender may change their addresses by notifying
the other party of the new address in any manner permitted by this paragraph.

 

    	 

    	 

    

 

	If to the Borrower:	c/o Bluerock Real Estate
	 	712 Fifth Ave., 9th Floor
	 	New York, New York 10022
	 	Attn:  R. Ramin Kamfar
	 	Fax:  (212) 843-3411

 

	If to the Lender:	c/o Bluerock Real Estate, LLC
	 	712 Fifth Ave., 9th Floor
	 	New York, New York 10022
	 	Attn:  R. Ramin Kamfar
	 	Fax:  (212) 843-3411

 

To the extent any provision
herein is prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition
or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Note.

 

This Note shall be
binding upon and inure to the benefit of the heirs, successors and assigns of the parties.

 

IN WITNESS WHEREOF,
the Borrower has caused this Note to be executed by its duly authorized company officer, as of the day and year first above written.

 

Borrower:

 

BLUEROCK MULTIFAMILY
GROWTH REIT, INC.

a Maryland corporation

 

	 	 	By:	/s/ Jordan Ruddy	 
	 	 	Name:	 Jordan Ruddy	 
	 	 	Title:	Authorized Signatory

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