ex1012.htm


    Exhibit 10.12

    
 

    PLEDGE AND SECURITY
AGREEMENT

    


    This PLEDGE AND SECURITY AGREEMENT
(this “Agreement”), dated as of December 3, 2009, made by Bluerock
Enhanced Multifamily Holdings, L.P., a Delaware limited partnership (“BEMHLP”)
and BEMT Springhouse, LLC, a Delaware limited liability company (“BEMT”) for
Bluerock Special Opportunity + Income Fund, LLC, a Delaware limited liability
company (the “SOIF”), recites and provides:

    


    Recitals:

    


    
      	
              A.       
        

            	
              BEMT
      is a wholly owned subsidiary of
BEMHLP.

            


    

    


    B.           BEMT
has entered into that certain Secured Promissory Note dated December 3, 2009 for
the benefit of SOIF (the “BEMT Note”), which serves to benefit
BEMHLP.

    


    C.           BEMHLP
desires to grant SOIF 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.

    


    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 to fund the BEMT Note, BEMHLP and SOIF 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 December 3, 2009 by BEMT as
Borrower for the benefit of SOIF as Lender.

    


    “Membership
Interests” shall mean any and all membership interests of BEMT 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”
shall mean Bluerock Special Opportunity + Income Fund, LLC, a Delaware limited
liability company.

    


    “Transaction
Documents” shall mean the BEMT Note, this Agreement and that certain Pledge and
Security Agreement by and between SOIF and BEMT.

    


    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 to fund the BEMT Note, BEMHLP hereby
pledges, assigns, hypothecates, transfers, and delivers to SOIF and grants to
SOIF a security interest in, all BEMHLP’s right, title, and interest (but none
of BEMHLP’s obligations) in, to, and under the following (the “Pledged
Collateral”), with full authority to sell, transfer, and
rehypothecate:

    


    (a) all
of the 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 Membership Interests;
and

    


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

    


    (d) all
right, title and interest of BEMHLP to participate in the management of BEMT;
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 Membership Interests, including
amounts past due and unpaid; and

    


    (f) 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 BEMHLP’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, BEMHLP covenants and agrees that,
unless SOIF otherwise expressly consents in writing:

    


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

     

     

    
      
        
        

      

      
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    Section 
3.2. Changes in BEMHLP’s
Name.  BEMHLP shall not change, or suffer or permit any change
of, BEMHLP’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) BEMHLP shall have given SOIF no less than ninety (90) days’
prior written notice thereof, (b) BEMHLP shall have, prior to such change,
delivered to SOIF 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) BEMHLP shall have taken all other action or actions
necessary, or reasonably requested by SOIF, 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, BEMHLP may vote any
Membership Interests for any purpose and to any effect to the extent not
inconsistent with the provisions of the Transaction Documents, and, upon
BEMHLP’s reasonable written request therefor, SOIF will execute and deliver (or
cause to be executed and delivered) to BEMHLP any such proxy or other instrument
as is reasonably necessary to enable BEMHLP to vote any Membership Interests for
any such purpose and to any such effect.

    


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

    


    Section 3.5. No Issuance of Additional Membership
Interests.  During the term of this Agreement, BEMHLP shall not
cause, suffer, or permit BEMT 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 Membership Interests to be less than 100% of the issued
and outstanding securities of BEMT.

    


    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
BEMHLP 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 shall have given
BEMHLP 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
shall have all the following rights, powers, and remedies, which SOIF 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 as SOIF may select, without any


     

     

    
      
        
        

      

      
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hindrance
or delay by BEMHLP and without any notice or demand upon BEMHLP except
as expressly required in this Section 4.2:

    

    


    Section 4.2.1.
Acceleration.  SOIF 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,
BEMHLP may collect and retain any and all amounts owing under or in
connection with any Pledged Collateral, which SOIF hereby expressly authorizes
BEMHLP to do, but, after the occurrence of an Event of Default, (a) SOIF
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
BEMHLP shall, at all times after BEMHLP’s receipt of the Default Notice,
segregate all such amounts from BEMHLP’s other funds and property, and shall,
immediately upon BEMHLP’s receipt of the Default Notice, deliver actual
possession of all such amounts to SOIF and (b) BEMHLP shall hold and be
deemed to hold all such amounts in trust for SOIF and as SOIF’s
bailee.

    


    Section 
4.2.3. UCC, Other
Rights.  SOIF 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, BEMHLP hereby expressly waives) to or upon
BEMHLP or any other person or entity, SOIF may (1) immediately enter
BEMHLP’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’s offices, or
elsewhere, at such prices as SOIF 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 BEMHLP to assemble any Pledged Collateral, and
BEMHLP shall make all such Pledged Collateral available to SOIF at such
place or places as SOIF shall select, which in any event shall be reasonably
convenient to SOIF;
and

    


    (b) SOIF
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 BEMHLP; and

    


    (c) SOIF
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, BEMHLP waives all claims, damages,
and demands against SOIF arising out of the repossession, retention, or usage by
SOIF 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’s sole discretion
and on such terms and conditions 

     

     

    
      
        
        

      

      
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as SOIF
may deem desirable, SOIF 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 or upon any exercise by SOIF 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.  BEMHLP shall, from time to time at SOIF’s
request and BEMHLP’s sole expense, assist SOIF 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, and prospective purchasers of the Pledged Collateral such
information respecting the properties, prospects, profits, performance,
business, and condition (financial and otherwise) of SOIF as may be reasonably
available; and

    


    (b)
causing SOIF to permit the prospective purchasers, and their respective
employees, agents, and other representatives to enter the premises of
BEMHLP to inspect BEMHLP’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 BEMHLP to execute and deliver, all
instruments and documents, and doing, and causing to be done, all acts and
things SOIF 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 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 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 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.  BEMHLP shall not vote or take any other steps
with respect to the Pledged Collateral without SOIF’s express prior written
consent and SOIF shall have the sole right, in its sole discretion without any
notice to 

     

     

    
      
        
        

      

      
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BEMHLP or
any other person or entity, to transfer all or any part of the Pledged
Collateral into SOIF’s name and to vote any and all Membership Interests as it
deems advisable for its protection.

    

    


    Section 
4.3.3. Application of
Proceeds.  Any and all amounts received by SOIF 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 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 account to
BEMHLP 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.  BEMHLP hereby authorizes SOIF, to the extent
permitted by applicable law, to file any financing or continuation statement
without the signature of BEMHLP, to complete, execute, and file any such
statement on behalf of BEMHLP, 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
AND BEMHLP, BY DELIVERY AND ACCEPTANCE OF THIS AGREEMENT, 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 THIS
AGREEMENT, 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 

     

     

    
      
        
        

      

      
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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
BEMHLP:                                              c/o
Bluerock Enhanced Multifamily Trust, Inc.

    680 5th
Avenue, 16th
Floor

    New York, New York
10019

    Attn:  R. Ramin
Kamfar

    


    to
BEMT:                                             
     c/o Bluerock Enhanced Multifamily Trust,
Inc.

    680 5th
Avenue, 16th
Floor

    New York, New York
10019

    Attn:  R. Ramin
Kamfar

    


    to
SOIF:                                              
       c/o Bluerock Real Estate, LLC

    680 5th
Avenue, 16th
Floor

    New York, New York
10019

    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 BEMHLP, and shall, together with all rights, powers,
and remedies of SOIF hereunder, inure to the benefit of SOIF and any one or more
present or future successors, pledgees, assignees, or endorsees of SOIF, 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.

     

    
 

    
      
        
        

      

      
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    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.

    


    


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    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.

    


    
      	
               
      

            	
              BEMHLP:

            


    

    


    
      	
               
      

            	
              Bluerock
      Enhanced Multifamily Holdings,
L.P.,

            


    

    
      	
               
      

            	
              a
      Delaware limited partnership

            


    

    


    By:         Bluerock
Enhanced Multifamily Trust, Inc.,

       a Maryland
corporation

    Its:         General
Partner

    


    By:          
_________________      

    Name:      R.
Ramin Kamfar

    Its:           CEO

    


    


    
      	
               
      

            	
              BEMT:

            


    

    


    
      	
               
      

            	
              BEMT
      Springhouse, 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:           __________________

    Name:      R.
Ramin Kamfar

    Its:           CEO

    


    


    SOIF:

    


    Bluerock
Special Opportunity + Income Fund, LLC,

    a
Delaware limited liability company

    


    By:         Bluerock
Real Estate, LLC,

       a Delaware limited
liability company

    Its:         Manager

    


    By:           ______________________

    Name:      R.
Ramin Kamfar

    Its:           CEO

    


    


    


    


     

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