PLEDGE AND SECURITY AGREEMENT

This PLEDGE AND SECURITY AGREEMENT (this “Agreement”), dated as of January 20,
2011, made by BEMT Meadowmont, LLC, a Delaware limited liability company
(“BEMT”) for Bluerock Special Opportunity + Income Fund II, LLC, a Delaware
limited liability company (the “SOIF II”), recites and provides:

Recitals:

A.           BEMT has entered into that certain Secured Promissory Note dated
January 20, 2011 for the benefit of SOIF II (the “BEMT Note”).

B.           BEMT desires to grant SOIF II a security interest in the Pledged
Collateral (as defined herein) to secure BEMT’s performance under the BEMT Note
in accordance with the provisions hereof.

C.           BEMT owns a membership interest in BR Meadowmont Managing Member,
LLC, a Delaware limited liability company (the “JV”).

Agreement:

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and to further induce SOIF II to fund the BEMT Note, BEMT and SOIF
II hereby covenant and agree as follows:

Section 1. Definitions.                                            Unless the
context expressly or by necessary implication otherwise requires, (a) in
addition to any terms defined elsewhere in this Agreement, the capitalized terms
defined in this Article 1 shall, for the purposes of this Agreement, have the
meanings set forth below, (b) except as otherwise defined or limited herein,
terms defined in the UCC when used herein shall have the respective meanings
attributed to them therein, and (c) except as otherwise defined or limited
herein, terms defined in the BEMT Note when used herein shall have the
respective meanings assigned to them in the BEMT Note.

“BEMT Note” shall mean the Secured Promissory Note dated January 20, 2011 by
BEMT as Borrower for the benefit of SOIF II as Lender.

“JV Membership Interests” shall mean any and all membership interests of the JV
owned by BEMT at any time and from the time included in the Pledged Collateral,
free and clear of any liens or encumbrances except as created herein.

“Obligations” shall mean the punctual payment, when and as due, of any and all
accrued interest and outstanding principal of the BEMT Note and any other costs,
liabilities, reimbursements, etc. required under the terms of the BEMT Note.

“Pledged Collateral” shall have the meaning set forth in Section 2 hereof.

“Proceeds” shall mean any and all “proceeds,” as defined in the UCC, of any and
all Pledged Collateral and, in any event, at any time whatsoever arising or
receivable, any and all cash, shares of stock, instruments, other securities,
rights, properties, interests, claims, and other proceeds arising in connection
with any collection, exchange, sale, transfer, or other disposition

 
 
 

--------------------------------------------------------------------------------

 
 

of any Pledged Collateral or interest therein or into which any Pledged
Collateral or interest therein is voluntarily or involuntarily converted, and
other amounts from time to time paid or payable under or in connection with any
Pledged Collateral.

“SOIF II” shall mean Bluerock Special Opportunity + Income Fund II, LLC, a
Delaware limited liability company.

“Transaction Documents” shall mean the BEMT Note, this Agreement and that
certain Pledge and Security Agreement by and among SOIF II, BEMT and Bluerock
Enhanced Multifamily Holdings, L.P.

Section  2. Pledge and Grant of Security Interest.  As collateral security for
BEMT’s performance under the BEMT Note and in order to induce SOIF II to fund
the BEMT Note, BEMT hereby pledges, assigns, hypothecates, transfers, and
delivers to SOIF II and grants to SOIF II a security interest in, all BEMT’s
right, title, and interest (but none of BEMT’s obligations) in, to, and under
the following (the “Pledged Collateral”), with full authority to sell, transfer,
and rehypothecate:

(a)  all of the JV Membership Interests; and

(b) all dividends and other distributions, whether in cash, property,
obligations, or any other form whatsoever, from time to time, payable, or
distributable in respect of or in exchange for any or all of the JV Membership
Interests; and

(c) all right, title and interest of BEMT in and to any of the property of the
JV; and

(d) all right, title and interest of BEMT to participate in the management of
the JV; and

(e) all interest, dividends, cash, checks, instrument and other property now or
in the future payable under or received, receivable or otherwise distributed in
respect of or in substitution or exchange for the JV Membership Interests,
including amounts past due and unpaid; and

(f) all fees and other amounts payable by BEMT to SOIF II, but excluding any
such amount paid or prepaid for reimbursement of any cost or expense incurred or
to be incurred by BEMT for any purpose or on behalf of any person or entity
whatsoever; and

(g) any and all Proceeds of any and all of the foregoing, whether or not
constituting any kind or type of tangible or intangible personal or real
property whatsoever and whether now owned or hereafter acquired, including
without limitation certificates, instruments, shares of stock, other securities,
and rights, privileges, and options pertaining to any thereof,

in each case, howsoever BEMT’s interest therein may arise or appear, whether by
ownership, security interest, claim, or otherwise.

Section 3. General Covenants. So long as any Obligation remains unpaid, BEMT
covenants and agrees that, unless SOIF II otherwise expressly consents in
writing:

 
 
 

--------------------------------------------------------------------------------

 
 
Section 3.1. Limitations on Dispositions, etc. BEMT shall not directly or
indirectly (a) suffer any amendment or other modification of any JV Membership
Interests or (b) sell, assign (by operation of law or otherwise), exchange,
liquidate, grant, or otherwise dispose of any JV Membership Interests or any
lien or other interest therein.

Section 3.2. Changes in BEMT’s Name.  BEMT shall not change, or suffer or permit
any change of, BEMT’s name or identity which could in any manner make any
financing or continuation statement filed in connection herewith (including
without limitation under this Section 3.2) “seriously misleading,” as defined in
the UCC, unless (a) BEMT shall have given SOIF II no less than ninety (90) days’
prior written notice thereof, (b) BEMT shall have, prior to such change,
delivered to SOIF II acknowledgment copies of financing statements duly
completed, executed, and filed in each jurisdiction necessary or advisable to
ensure the continuous perfection of all security interests granted pursuant to
this Agreement, and (c) BEMT shall have taken all other action or actions
necessary, or reasonably requested by SOIF II, to preserve and protect all such
security interests, including without limitation the continuous perfection
thereof.

Section 3.3. Voting, etc., of Pledged Collateral.  So long as no Event of
Default (defined hereinafter) shall have occurred and be continuing, BEMT may
vote any JV Membership Interests for any purpose and to any effect to the extent
not inconsistent with the provisions of the Transaction Documents, and, upon
BEMT’s reasonable written request therefor, SOIF II will execute and deliver (or
cause to be executed and delivered) to BEMT any such proxy or other instrument
as is reasonably necessary to enable BEMT to vote any JV Membership Interests
for any such purpose and to any such effect.

Section 3.4. Certain Rights respecting Pledged Collateral.  SOIF II shall have
the right, exercisable at any time and from time to time in its sole discretion,
to cause the interest of SOIF II in any Pledged Collateral to be duly noted on
any transfer books for JV Membership Interests or other records therefor.

Section 3.5. No Issuance of Additional Membership Interests.  During the term of
this Agreement, BEMT shall not cause, suffer, or permit the JV to issue any
additional securities of any class or nature, nor to take any other action, or
omit to take any action, the result of which is to render the JV Membership
Interests to be less than 50% of the issued and outstanding securities of the
JV.

Section 4. Default.

Section 4.1. Events of Default.  An Event of Default shall occur hereunder upon
the occurrence of any one or more of the following:

(a) If BEMT shall in any manner breach or violate, or fail to perform or
satisfy, any term, covenant, condition, obligation, or other provision hereof
and such default shall continue at any time after the period of thirty (30)
consecutive days next following the date on which SOIF II shall have given BEMT
notice specifying such default and requesting that such default be remedied; or

(b) If any “Event of Default” shall occur under one or more of the Transaction
Documents.
 
 
 
 

--------------------------------------------------------------------------------

 

 
Section 4.2. Remedies; Rights Upon Default.  At any time after the occurrence of
an Event of Default, in addition to any other rights, powers, and remedies
available under any Transaction Document, or at law, in equity, by statute, or
otherwise, SOIF II shall have all the following rights, powers, and remedies,
which SOIF II may (but shall not be obligated to) exercise, concurrently or
singly, in whole or in part, at any time and from time to time, by or through
such officers, agents, employees, or other representatives of SOIF II as SOIF II
may select, without any hindrance or delay by BEMT and without any notice or
demand upon BEMT except as expressly required in this Section 4.2:

Section 4.2.1. Acceleration.  SOIF II may declare any and all Obligations to be
immediately due and payable.

Section 4.2.2. Accounts, etc.  Until the occurrence of an Event of Default, BEMT
may collect and retain any and all amounts owing under or in connection with any
Pledged Collateral, which SOIF II hereby expressly authorizes BEMT to do, but,
after the occurrence of an Event of Default, (a) SOIF II may curtail or
terminate such authority at any time and from time to time by delivery of a
default notice requesting the same (the “Default Notice”) and BEMT shall, at all
times after BEMT’s receipt of the Default Notice, segregate all such amounts
from BEMT’s other funds and property, and shall, immediately upon BEMT’s receipt
of the Default Notice, deliver actual possession of all such amounts to SOIF II
and (b) BEMT shall hold and be deemed to hold all such amounts in trust for SOIF
II and as SOIF II’s bailee.

Section 4.2.3. UCC, Other Rights.  SOIF II shall have and may exercise all the
rights, powers, and remedies of a secured party under the UCC, and, in addition
and not in limitation of the generality of the foregoing:

(a) without demand of payment or performance or other demand, advertisement, or
notice of any kind (all and each of which demands, advertisements, and notices,
excepting only the notice of time and place of public or private sale specified
in this Section 4.2.3 and any other demand, advertisement, or notice which by
law may not be waived, BEMT hereby expressly waives) to or upon BEMT or any
other person or entity, SOIF II may (1) immediately enter BEMT’s premises
without legal process and without any liability therefor, (2) immediately
collect, receive, appropriate, and realize upon any Pledged Collateral, (3)
immediately sell, lease, assign, give any options to purchase, or otherwise
dispose of and deliver any Pledged Collateral (or contract to do so) at any
public or private sale, at any exchange, broker’s board, any of SOIF
II’s offices, or elsewhere, at such prices as SOIF II may in good faith deem
appropriate, for cash, on credit, or for future delivery with or without
assumption of any credit risk, and (4) require BEMT to assemble any Pledged
Collateral, and BEMT shall make all such Pledged Collateral available to SOIF II
at such place or places as SOIF II shall select, which in any event shall be
reasonably convenient to SOIF II; and

(b) SOIF II shall have the right upon any such public sale, and, to the extent
permitted by law, upon any such private sale, to purchase any Pledged Collateral
so sold, free of any right or equity of redemption in BEMT; and

(c) SOIF II need not give more than fifteen (15) days prior written notice of
the time and place of any public sale or of the time after which any private
sale may occur, which notice shall constitute reasonable notification thereof;
and
 
 
 
 

--------------------------------------------------------------------------------

 

 
(d) to the extent permitted by applicable law, BEMT waives all claims, damages,
and demands against SOIF II arising out of the repossession, retention, or usage
by SOIF II or any agent, or other representative thereof of any Pledged
Collateral.

Section 4.3. Rights of Conversion, etc.  At any time and from time to time after
the occurrence of an Event of Default, in SOIF II’s sole discretion and on such
terms and conditions as SOIF II may deem desirable, SOIF II may (but shall not
be obligated to) exercise any and all rights of conversion, exchange,
subscription, and other rights, privileges, or options pertaining to any Pledged
Collateral as if the absolute owner thereof, including without limitation any
right to exchange any Pledged Collateral upon any merger, consolidation,
reorganization, recapitalization, or other adjustment of SOIF II or upon any
exercise by SOIF II of any right, privilege, or option pertaining to any Pledged
Collateral, and, in connection therewith, to deposit and deliver any Pledged
Collateral with any clearing corporation, custodian bank, depository, registrar,
transfer or other agent, committee, or other person or entity whatsoever,
including without limitation any nominee of any thereof.

Section 4.3.1. Assistance in Complying with Securities Laws.  BEMT shall, from
time to time at SOIF II’s request and BEMT’s sole expense, assist SOIF II in
making any sale or other disposition of the Pledged Collateral in compliance
with any and all applicable securities laws, which assistance shall include
without limitation:

(a) providing SOIF II, and prospective purchasers of the Pledged Collateral such
information respecting the properties, prospects, profits, performance,
business, and condition (financial and otherwise) of the JV as may be reasonably
available; and

(b) causing SOIF II to permit the prospective purchasers, and their respective
employees, agents, and other representatives to enter the premises of BEMT to
inspect BEMT’s properties, books, and records and to make such abstracts and
copies thereof as any thereof may desire; and

(c) executing and delivering, and causing BEMT to execute and deliver, all
instruments and documents, and doing, and causing to be done, all acts and
things SOIF II may deem necessary or advisable to register any Pledged
Collateral under applicable securities laws and to cause any registration
statement with respect thereto to become and remain effective for such period as
applicable securities laws may require; and

(d) making or causing to be made all supplements, amendments, and other
modifications to any of the foregoing and to any prospectus or prospectuses
which SOIF II may deem necessary or advisable for compliance or continued
compliance with applicable securities laws; and

(e) causing any Pledged Collateral to qualify under any applicable state
securities laws, including without limitation “Blue Sky” laws; and

(f) obtaining any approvals from any governmental authority SOIF II may deem
necessary or advisable in connection with such sale or other disposition of any
such Pledged Collateral; and
 
 
 
 

--------------------------------------------------------------------------------

 
 
(g) doing or causing to be done any other act or thing SOIF II may deem
necessary or advisable for such sale or other disposition to be valid, binding,
and in compliance with applicable law.

Section 4.3.2. Voting, etc., of Pledged Collateral.  BEMT shall not vote or take
any other steps with respect to the Pledged Collateral without SOIF II’s express
prior written consent and SOIF II shall have the sole right, in its sole
discretion without any notice to BEMT or any other person or entity, to transfer
all or any part of the Pledged Collateral into SOIF II’s name and to vote any
and all JV Membership Interests as it deems advisable for its protection.

Section 4.3.3. Application of Proceeds.  Any and all amounts received by SOIF II
in connection with any collection, negotiation, setoff, recovery, receipt,
appropriation, realization, sale, or exercise of any other right, power, or
remedy under this Section 4.3.3 or otherwise may, in its sole discretion, be
held as collateral security for the punctual payment, performance, and
satisfaction, when and as due, of any and all Obligations, and SOIF II may, upon
receipt thereof or at any time thereafter, apply all or any part of such amounts
against the Obligations.  Only after such application and after payment of any
other amount required by any provision of law need SOIF II account to BEMT for
any surplus.

Section 5. Miscellaneous.

Section 5.1. Sufficiency as Financing Statement, etc.  This Agreement or any
photographic, photostatic, xerographic, or other reproduction hereof or of any
financing statement shall be sufficient as a financing or continuation
statement.  BEMT hereby authorizes SOIF II, to the extent permitted by
applicable law, to file any financing or continuation statement without the
signature of BEMT, to complete, execute, and file any such statement on behalf
of BEMT, and to file this Agreement as a financing or continuation statement.

Section 5.2. Governing Law; Jurisdiction; Venue.  This Agreement shall be
construed and interpreted in accordance with the laws of the State of New York,
without regard to its conflict of law principles.  The parties hereto hereby
irrevocably (a) consent and submit to the exclusive in personam jurisdiction and
venue of the State of New York, in any action or proceeding arising out of or in
any way relating to this Note or any instrument or document relating hereto, (b)
agree that all claims in respect of such action or proceeding may be heard and
determined in such above-referenced state or federal court located in New
York,  (c) consent to the service of any and all process in any such action or
proceeding by the mailing of copies of such process in conformity with the
notice provision hereof, and (d) agree that a final judgment in any such action
or proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law.

Section 5.3. Waiver of Jury Trial.  SOIF II AND BEMT, BY DELIVERY AND ACCEPTANCE
OF THE BEMT NOTE, KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE THE RIGHT
EITHER MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENT, OR
ANY OTHER AGREEMENT EXECUTED OR CONTEMPLATED TO BE EXECUTED IN CONNECTION
HEREWITH, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH ANY COURSE OF CONDUCT,
COURSE OF DEALING, STATEMENTS (VERBAL OR WRITTEN) OR ACTION OF ANY PARTY,
WHETHER IN CONNECTION WITH THE MAKING OF THE LOAN EVIDENCED BY THE BEMT

 
 
 

--------------------------------------------------------------------------------

 
 

NOTE, ANY OTHER TRANSACTION DOCUMENT, COLLECTION OF SUCH LOAN, OR
OTHERWISE.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR ALL SUCH PARTIES TO
ENTER THE TRANSACTION DOCUMENTS.

Section 5.4. Notices.  Except as expressly provided herein to the contrary, any
notice, report, or writing required or permitted to be given hereunder to any
party shall be in writing and shall be served by delivering the same personally
either to such party, or by sending the notice postage prepaid by certified U.
S. first class mail, return receipt requested, or by FedEx or another reputable
delivery service.  Any and all such notices shall be delivered to the parties at
their respective addresses specified in this Section 5.4.  Any such notice
deposited in the mail shall be conclusively deemed delivered to and received by
the addressee on the third business day after the day in which such notice is
delivered to the U. S. Postal Service for mailing if all of the foregoing
conditions of notice shall have been satisfied.  Any notice delivered by any
other delivery service shall be deemed delivered on the date of delivery as
indicated by such carrier’s records, absent manifest error.

to BEMT:                                                   c/o Bluerock Enhanced
Multifamily Trust, Inc.
Heron Tower, 70 East 55th Street, 9th Floor
New York, New York 10022
Attn:  R. Ramin Kamfar

to SOIF II:                                                   c/o Bluerock Real
Estate, LLC
Heron Tower, 70 East 55th Street, 9th Floor
New York, New York 10022
Attn:  R. Ramin Kamfar

with a mandatory                                        Thomas G. Voekler,
Esquire
copy to:                                                        Hirschler
Fleischer
2100 East Cary St., 4th Floor
P.O. Box 500 (23218-0500)
Richmond, VA  23223

Any party hereto may change its address for the purposes of this Section 5.4 by
giving the other parties hereto written notice, as provided for herein, of the
new address.

Section 5.5. Time of Essence.  Time is of the essence with respect to every
term, covenant, condition, representation, warranty, obligation, and other
provision of this Agreement.

Section 5.6. Counterparts.  This Agreement may be executed and delivered in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute one and the same instrument.

Section 5.7. Successors and Assigns; Third Party Beneficiaries.  The terms,
covenants, conditions, and other provisions of this Agreement shall be binding
upon the administrators, successors, and assigns of BEMT, and shall, together
with all rights, powers, and remedies of SOIF II hereunder, inure to the benefit
of SOIF II and any one or more present or future successors, pledgees,
assignees, or endorsees of SOIF II, subject to all applicable provisions of the
BEMT Note.  Subject to the foregoing, no term, covenant, condition,
representation, warranty, obligation, or other provision hereof is for the
benefit of any person or entity not a party hereto.
 
 
 
 

--------------------------------------------------------------------------------

 

 
Section 5.8 Severability.  If any provision in this Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions shall nevertheless continue in full force and effect without being
impaired or invalidated in any way.

Section 5.9 Entire Agreement.  This Agreement contains the entire understanding
between the parties hereto and supersedes any prior written or oral agreements
between them respecting the within subject matter. There are no representations,
agreements or understandings, oral or written, between or among the parties
hereto relating to the subject matter of this Agreement which are not fully
expressed herein.

[BALANCE OF PAGE LEFT BLANK INTENTIONALLY]
 
 
 
 

--------------------------------------------------------------------------------

 

 
IN WITNESS WHEREOF, the parties hereto have duly executed, or caused their
authorized representatives to duly execute, this Agreement as of the date first
written above.

 
BEMT:

 
BEMT Meadowmont, LLC,

 
a Delaware limited liability company

 
By:
Bluerock Enhanced Multifamily Holdings, L.P.,

 
a Delaware limited partnership

Its:      Sole Member

By:           Bluerock Enhanced Multifamily Trust, Inc.,
 a Maryland corporation
Its:           General Partner

By:           /s/ Jordan Ruddy
Name:      Jordan Ruddy
Its:            COO

SOIF II:

Bluerock Special Opportunity + Income Fund, LLC,
a Delaware limited liability company

By:         Bluerock Real Estate, LLC,
   a Delaware limited liability company
Its:         Manager

By:           /s/ Jordan Ruddy
Name:     Jordan Ruddy
Its:           President