ex1011.htm


    Exhibit 10.11

     


    SECURED
PROMISSORY NOTE

    


    $3,200,000

     

    December
3, 2009

    


    For value
received, BEMT
SPRINGHOUSE,
LLC, a Delaware
limited liability company (the “Borrower”), hereby promises to pay to the order
of BLUEROCKSPECIAL OPPORTUNITY + INCOME FUND,
LLC, a Delaware limited liability company (together with its successors
and assigns, the “Lender”) the principal sum of Three Million, Two Hundred Thousand
Dollars ($3,200,000), plus interest, fees and costs, in accordance with
the terms and conditions of this promissory note (the “Note”).  The
Note shall accrue interest at the rate of the greater of:  (a) 30-Day
LIBOR plus 5.00%, or (b) seven percent (7.0%) per annum, compounded
monthly.  All outstanding principal and interest shall be due and
payable on June 3, 2010 (the “Due Date”).

    


    Commencing
on January 1, 2010, and on the first day of each month thereafter, until the
Note is fully paid, Borrower shall pay to Lender monthly all distributions,
proceeds, income, payments, dividends and capital repayments that Borrower
receives from any and all the membership interests that it owns in BR
Springhouse Managing Member, LLC, a Delaware limited liability company and any
income, distributions, dividends, proceeds and capital repayments that Borrower
receives from any other source, to the extent of any interest due for the month
plus any accrued interest and fees, if any.  All payments hereunder
shall be applied, first, to the payment of fees, interest and other obligations
(other than principal) hereunder in such order and priority as Lender shall
determine in its discretion, and second, to the payment of
principal.

    


    This Note
may be prepaid in whole or in part at any time or from time to time without
penalty.  If this Note is not paid in full on the Due Date, then, at
the Lender’s election, all amounts not paid when due at the Due Date shall
become part of principal and shall thereafter accrue interest at the rate of
thirteen percent (13%) per annum, compounded monthly.  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 the Pledge and Security Agreement, of even date hereof, among the Borrower
and the Lender and the Pledge and Security Agreement, of even date hereof, among
the Lender, Bluerock Enhanced Multifamily Holdings, L.P. and Borrower, of even
date herewith (collectively, the “Pledge Agreements”).

     

    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 due
      dates 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 Agreements 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 Due 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 Enhanced Multifamily Trust, Inc.

    680
5th
Avenue, 16th
Floor

    New York,
New York 10019

    Attn:  R.
Ramin Kamfar

    Fax:  (212)
843-3411

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    If to the
Lender:               
   c/o Bluerock Real Estate, LLC

    680
5th
Avenue, 16th
Floor

    New York,
New York 10019

    Attn:  R.
Ramin Kamfar

    Fax:  (212)
843-3411

    


    With a
Copy
to:               
   Thomas G. Voekler, Esq.

    Hirschler
Fleischer, a Professional Corporation

    2100 East
Cary Street

    Richmond,
Virginia  23223-7078

    Fax:  (804)
644-0957

    Email:  tvoekler@hf-law.com

    


    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:

    


    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

    Title:           CEO