ex107.htm


    Exhibit 10.7

     

    LIMITED
LIABILITY COMPANY/JOINT VENTURE AGREEMENT

     

    OF

     

    BR
SPRINGHOUSE MANAGING MEMBER, LLC

     

    A
DELAWARE LIMITED LIABILITY COMPANY

     

    DATED AS
OF DECEMBER 3, 2009

     

    
      


    


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    TABLE OF
CONTENTS

    
      
        	 
      	 
      	 
      
	 
      	 
      	
                Page

              
	
                Section
      1.

              	
                Definitions

              	
                1

              
	
                Section
      2.

              	
                Organization
      of the Company

              	
                8

              
	
                2.1

              	
                Name

              	
                8

              
	
                2.2

              	
                Place
      of Registered Office; Registered Agent

              	
                9

              
	
                2.3

              	
                Principal
      Office

              	
                9

              
	
                2.4

              	
                Filings

              	
                9

              
	
                2.5

              	
                Term

              	
                9

              
	
                2.6

              	
                Expenses
      of the Company

              	
                9

              
	
                Section
      3.

              	
                Purpose

              	
                9

              
	
                Section
      4

              	
                Conditions

              	
                9

              
	
                4.1

              	
                SOIF
      Conditions

              	
                9

              
	
                4.2

              	
                BEMT
      Conditions

              	
                10

              
	
                Section
      5.

              	
                Capital
      Contributions, Loans, Percentage Interests and Capital
      Accounts

              	
                10

              
	
                5.1

              	
                Initial
      Capital Contributions

              	
                10

              
	
                5.2

              	
                Additional
      Capital Contributions

              	
                10

              
	
                5.3

              	
                Percentage
      Ownership Interest

              	
                12

              
	
                5.4

              	
                Return
      of Capital Contribution

              	
                12

              
	
                5.5

              	
                No
      Interest on Capital

              	
                13

              
	
                5.6

              	
                Capital
      Accounts

              	
                13

              




      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      
        	
                5.7

              	
                New
      Members

              	
                13

              
	
                Section
      6.

              	
                Distributions

              	
                13

              
	
                6.1

              	
                Distribution
      of Distributable Funds

              	
                14

              
	
                Section
      7.

              	
                Allocations

              	
                14

              
	
                7.1

              	
                Allocation
      of Net Income and Net Losses Other than in Liquidation

              	
                14

              
	
                7.2

              	
                Allocation
      of Net Income and Net Losses in Liquidation

              	
                14

              
	
                7.3

              	
                U.S.
      Tax Allocations

              	
                15

              
	
                Section
      8.

              	
                Books,
      Records, Tax Matters and Bank Accounts

              	
                15

              
	
                8.1

              	
                Books
      and Records

              	
                15

              
	
                8.2

              	
                Reports
      and Financial Statements

              	
                15

              
	
                8.3

              	
                Tax
      Matters Member

              	
                16

              
	
                8.4

              	
                Bank
      Accounts

              	
                17

              
	
                8.5

              	
                Tax
      Returns

              	
                17

              
	
                8.6

              	
                Expenses

              	
                17

              
	
                Section
      9.

              	
                Management

              	
                17

              
	
                9.1

              	
                Management

              	
                17

              
	
                9.2

              	
                Affiliate
      Transactions

              	
                18

              
	
                9.3

              	
                Other
      Activities

              	
                18

              
	
                9.4

              	
                Operation
      in Accordance with REOC/REIT Requirements

              	
                18

              
	
                9.10

              	
                FCPA

              	
                20

              


      

      


       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

      
 

      
        	
                Section
      10.

              	
                Confidentiality

              	
                21

              
	
                Section
      11.

              	
                Representations
      and Warranties

              	
                22

              
	
                11.1

              	
                In
      General

              	
                22

              
	
                11.2

              	
                Representations
      and Warranties

              	
                22

              
	
                Section
      12.

              	
                Sale,
      Assignment, Transfer or other Disposition

              	
                25

              
	
                12.1

              	
                Prohibited
      Transfers

              	
                25

              
	
                12.2

              	
                Affiliate
      Transfers

              	
                25

              
	
                12.3

              	
                Admission
      of Transferee; Partial Transfers

              	
                26

              
	
                12.4

              	
                Withdrawals

              	
                27

              
	
                Section
      13.

              	
                Dissolution

              	
                28

              
	
                13.1

              	
                Limitations

              	
                28

              
	
                13.2

              	
                Exclusive
      Events Requiring Dissolution

              	
                28

              
	
                13.3

              	
                Liquidation

              	
                28

              
	
                13.4

              	
                Continuation
      of the Company

              	
                29

              
	
                Section
      14.

              	
                Indemnification

              	
                29

              
	
                14.1

              	
                Exculpation
      of Members

              	
                29

              
	
                14.2

              	
                Indemnification
      by Company

              	
                29

              
	
                14.3

              	
                General
      Indemnification by the Members

              	
                30

              
	
                Section
      15.

              	
                Sale
      Rights

              	
                30

              
	
                15.1

              	
                Push
      / Pull Rights

              	
                30

              
	
                15.2

              	
                Forced
      Sale Rights

              	
                32

              


      

      


      


      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

      


      
        	
                Section
      16.

              	
                Mediation
      and Arbitration of Disputes

              	
                33

              
	
                16.1

              	
                Events
      Giving Rise to Mediation or Arbitration

              	
                33

              
	
                16.2

              	
                Selection
      of Arbitrators

              	
                33

              
	
                16.3

              	
                Arbitration
      Hearing

              	
                34

              
	
                16.4

              	
                Decision
      of the Arbitrators/Binding Effect

              	
                34

              
	
                Section
      17.

              	
                Miscellaneous

              	
                34

              
	
                17.1

              	
                Notices

              	
                34

              
	
                17.2

              	
                Governing
      Law

              	
                35

              
	
                17.3

              	
                Successors

              	
                36

              
	
                17.4

              	
                Pronouns

              	
                36

              
	
                17.5

              	
                Table
      of Contents and Captions Not Part of Agreement

              	
                36

              
	
                17.6

              	
                Severability

              	
                36

              
	
                17.7

              	
                Counterparts

              	
                36

              
	
                17.8

              	
                Entire
      Agreement and Amendment

              	
                36

              
	
                17.9

              	
                Further
      Assurances

              	
                36

              
	
                17.10

              	
                No
      Third Party Rights

              	
                37

              
	
                17.11

              	
                Incorporation
      by Reference

              	
                37

              
	
                17.12

              	
                Limitation
      on Liability

              	
                37

              


      

       

       

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

       

      
        	
                17.13

              	
                Remedies
      Cumulative

              	
                37

              
	
                17.14

              	
                No
      Waiver

              	
                37

              
	
                17.15

              	
                Limitation
      On Use of Names

              	
                37

              
	
                17.16

              	
                Publicly
      Traded Partnership Provision

              	
                37

              
	
                17.17

              	
                Uniform
      Commercial Code

              	
                38

              
	
                17.18

              	
                Public
      Announcements

              	
                38

              
	
                17.19

              	
                No
      Construction Against Drafter

              	
                38

              


      

       

       

       

       

      
        
          
            
              


              
                	 
      	 
      	 
      


              

               

            

             


          

          
            5

            
              

            

          

          
             


          

        



    

    


     

    BR
SPRINGHOUSE MANAGING MEMBER, LLC

     

     

    LIMITED
LIABILITY COMPANY AGREEMENT

     

    


     

    This
Limited Liability Company Agreement (this “Agreement”) is
adopted, executed, and agreed to effective on December 3, 2009, by and among
Bluerock Special Opportunity + Income Fund, LLC, a Delaware limited liability
company (“SOIF”), and BEMT
Springhouse, LLC, a Delaware limited liability company (“BEMT”), as Members
(together, the “Members”), and SOIF
and BEMT, as Managers (together, the “Managers”).

     

     

    W I T N E S S E T H :

     

    WHEREAS,
BR Springhouse Managing Member, LLC, a Delaware limited liability company (the
“Company”), was
formed on September 28, 2009, pursuant to the Act;

     

    WHEREAS,
the Members desire to participate in the Company for the purposes described
herein;

     

    NOW,
THEREFORE, in consideration of the agreements and covenants set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:

     

    
      	
              Section
      1.  

            	
              Definitions.
      As used in this Agreement:

            


    

     

    “Act” shall mean the
Delaware Limited Liability Company Act (currently Chapter 18 of Title 6 of the
Delaware Code), as amended from time to time.

     

    “Adjusted Capital Account
Deficit” shall mean, with respect to any Member, the deficit balance, if
any, in such Member’s Capital Account as of the end of the applicable Fiscal
Year after (i) crediting such Capital Account with any amounts which such Member
is deemed to be obligated to restore pursuant to Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5), and (ii) debiting such Capital Account by the
amount of the items described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).  The foregoing
definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

     

    “Advisor” shall mean
any accountant, attorney or other advisor retained by a Member.

     

    “Affiliate” shall mean
as to any Person any other Person that directly or indirectly controls, is
controlled by, or is under common control with such first Person.  For
the purposes of this Agreement, a Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management, policies and/or decision making of such
other Person, whether through the ownership of voting securities, by contract or
otherwise.  In addition, “Affiliate” shall include as to any Person
any other Person related to such Person within the meaning of Code Sections
267(b) or 707(b)(1).  

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

      Notwithstanding
the foregoing, SOIF and BEMT shall not be considered to be “Affiliates” of each
other.

    

     

    “Agreed Upon Value”
shall mean the fair market value (net of any debt) agreed upon pursuant to a
written agreement between the Members of property contributed by a Member to the
capital of the Company, which shall for all purposes hereunder be deemed to be
the amount of the Capital Contribution applicable to such property
contributed.

     

    “Agreement” shall mean
this Limited Liability Company Agreement, as amended from time to
time.

     

     “Applicable Adjustment
Percentage” shall have the meaning set forth in Section
5.2(b)(3).

     

    “Bankruptcy Code”
shall mean Title 11 of the United States Code, as amended or any other
applicable bankruptcy or insolvency statute or similar law.

     

    “Bankruptcy/Dissolution
Event” shall mean, with respect to the affected party, (i) the entry of
an Order for Relief under the Bankruptcy Code, (ii) the admission by such party
of its inability to pay its debts as they mature, (iii) the making by it of an
assignment for the benefit of creditors generally, (iv) the filing by it of a
petition in bankruptcy or a petition for relief under the Bankruptcy Code or any
other applicable federal or state bankruptcy or insolvency statute or any
similar law, (v) the expiration of sixty (60) days after the filing of an
involuntary petition under the Bankruptcy Code without such petition being
vacated, set aside or stayed during such period, (vi) an application by such
party for the appointment of a receiver for the assets of such party, (vii) an
involuntary petition seeking liquidation, reorganization, arrangement or
readjustment of its debts under any other federal or state insolvency law,
provided that the same shall not have been vacated, set aside or stayed within
sixty (60) days after filing, (viii) the imposition of a judicial or statutory
lien on all or a substantial part of its assets unless such lien is discharged
or vacated or the enforcement thereof stayed within sixty (60) days after its
effective date, (ix) an inability to meet its financial obligations as they
accrue, or (x) a dissolution or liquidation.

     

    “Beneficial Owner”
shall have the meaning provided in Section
5.7.

     

     “BEMT” shall have the
meaning set forth in the recitals.

     

    “BEMT Transferee”
shall have the meaning set forth in Section
12.2(b)(i).

     

    “BR Hawthorne JV”
shall mean BR Hawthorne Springhouse JV, LLC, a Delaware limited liability
company.

     

    “BR Hawthorne JV Operating
Agreement” shall mean the Limited Liability Company/Joint Venture
Agreement of BR Hawthorne JV, as amended from time to time.

     

    “BR REIT” shall have
the meaning provided in Section
12.2(b)(ii).

     

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

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Capital Account”
shall have the meaning provided in Section
5.6.

     

    “Capital Contribution”
shall mean, with respect to any Member, the aggregate amount of (i) cash, and
(ii) the Agreed Upon Value of other property contributed by such Member to the
capital of the Company net of any liability secured by such property that the
Company assumes or takes subject to.

     

    “Cash Flow” shall
mean, for any period for which Cash Flow is being calculated, gross cash
receipts of the Company (but excluding Capital Contributions, less the following
payments and expenditures (i) all payments of operating expenses of the Company,
(ii) all payments of principal of, interest on and any other amounts due with
respect to indebtedness, leases or other commitments or obligations of the
Company (and other loans by Members to the Company), (iii) all sums expended by
the Company for capital expenditures, (iv) all prepaid expenses of the Company,
and (v) all sums expended by the Company which are otherwise
capitalized.

     

    “Certificate of
Formation” shall mean the Certificate of Formation of the Company, as
amended from time to time.

     

    “Code” shall mean the
Internal Revenue Code of 1986, as amended from time to time, including the
corresponding provisions of any successor law.

     

    “Collateral Agreement”
shall mean any agreement, instrument, document or covenant concurrently or
hereafter made or entered into under, pursuant to, or in connection with this
Agreement and any certifications made in connection therewith or amendment or
amendments made at any time or times heretofore or hereafter to any of the
same.

     

    “Company” shall mean
BR Springhouse Managing Member, LLC a Delaware limited liability company
organized under the Act.

     

    “Company Interest”
shall mean all of the Company’s interest in BR Hawthorne JV, including its
limited liability company interest and its managerial interest
therein.

     

    “Company Minimum Gain”
shall have the meaning given to the term “partnership minimum gain” in
Regulations Sections 1.704-2(b)(2) and 1.704-2(d).

     

    “Confidential
Information” shall have the meaning provided in Section
10(a).

     

     “Default Amount” shall
have the meaning provided in Section
5.2(b).

     

    “Default Loan” shall
have the meaning provided in Section
5.2(b)(1).

     

    “Default Loan Rate”
shall have the meaning provided in Section
5.2(b)(1).

     

    “Defaulting Member”
shall have the meaning provided in Section
5.2(b).

     

    “Delaware UCC” shall
mean the Uniform Commercial Code as in effect in the State of Delaware from time
to time.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Dissolution Event”
shall have the meaning provided in Section
13.2.

     

    “Distributable Funds”
with respect to any month or other period, as applicable, shall mean the sum of
(x) an amount equal to the Cash Flow of the Company for such month or other
period, as applicable, as reduced by reserves for anticipated capital
expenditures, future working capital needs and operating expenses, contingent
obligations and other purposes, the amounts of which shall be reasonably
determined from time to time by the Managers.

     

    “Distributions” shall
mean the distributions payable (or deemed payable) to a Member (including,
without limitation, its allocable portion of Distributable Funds).

     

     “ERISA” shall mean the
Employee Retirement Income Security Act of 1974, as amended from time to
time.

     

    “Fiscal Year” shall
mean each calendar year ending December 31.

     

    “Flow Through Entity”
shall have the meaning provided in Section
5.7.

     

    “Foreign Corrupt Practices
Act” shall mean the Foreign Corrupt Practices Act of the United States,
15 U.S.C. Sections 78a, 78m, 78dd-1, 78dd-2, 78dd-3, and 78ff, as amended, if
applicable, or any similar law of the jurisdiction where the Property is located
or where the Company or any of its Subsidiaries transacts business or any other
jurisdiction, if applicable.

     

     “Imputed Closing
Costs” means an amount (not to exceed one and one quarters percent
(1.25%) of the purchase price) that would normally be incurred by a Subsidiary
if the Property were sold for an amount specified in Section 15.1 or Section 15.2 (as
applicable), for title insurance premiums, survey costs, brokerage commissions,
legal fees, and other commercially reasonable closing costs.

     

     “Income” shall mean
the gross income of the Company for any month, Fiscal Year or other period, as
applicable, including gains realized on the sale, exchange or other disposition
of the Company’s assets.

     

    “Indemnified Party”
shall have the meaning provided in Section
14.3(a).

     

    “Indemnifying Party”
shall have the meaning provided in Section
14.3(a).

     

    “Inducement
Agreements” shall have the meaning provided in Section
14.3(a).

     

     “Initiating Member”
shall have the meaning provided in Section
15.2(a).

     

    “Interest” of any
Member shall mean the entire limited liability company interest of such Member
in the Company, which includes, without limitation, any and all rights, powers
and benefits accorded a Member under this Agreement and the duties and
obligations of such Member hereunder.

     

    “Loss” shall mean the
aggregate of losses, deductions and expenses of the Company for any month,
Fiscal Year or other period, as applicable, including losses realized on the
sale, exchange or other disposition of the Company’s assets.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Major Decision” means
any decision for the Company to take, or refrain from taking, any action or
incurring any obligation with respect to the following matters (or the
effectuation of any such action or obligation), including in the Company’s
capacity as a member of the BR Hawthorne JV with respect to making or refraining
to make a decision on the following matters to the extent the vote or approval
of the Company is required:

     

    
      	
               
      

            	
              (i)

            	
              any
      merger, conversion or consolidation involving the Company or any
      Subsidiary or the sale, lease, transfer, exchange or other disposition of
      all or substantially all of the Company’s assets, including the Company
      Interest, or all of the Interests of the Members in the Company, in one or
      a series of related transactions;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              except
      as expressly provided in Section 12 with
      respect to Transfers by SOIF or a SOIF Transferee to a SOIF Transferee and
      with respect to Transfers by BEMT or a BEMT Transferee to a BEMT
      Transferee as permitted thereunder, the admission or removal of any Member
      or the Company’s issuance to any third party of any equity interest in the
      Company (including interests convertible into, or exchangeable for, equity
      interests in the Company);

            


    

     

    
      	
               
      

            	
              (iii)

            	
              except
      as provided in Section 13, any
      liquidation, dissolution or termination of the
  Company;

            


    

     

    
      	
               
      

            	
              (iv)

            	
              employing
      any individual or establishing or entering into any employment contracts,
      agreements with respect to salaries or bonus compensation or other
      employee benefit plans;

            


    

     

    
      	
            	
              (v)

            	
              
                the
      incurrence by the Company or any Subsidiary, in an amount in excess of US
      $25,000, of any indebtedness for borrowed money or any capitalized lease
      obligation or the entry into of any agreement, commitment, assumption or
      guarantee with respect to any of the
  foregoing;

              

            


    

     

    
      	
            	
              (vi)

            	
              
                expenditures
      or distributions of cash or property by the Company or any Subsidiary, in
      an amount in excess of US $25,000, which are not otherwise provided for in
      this Agreement or the establishment of any
  reserves;

              

            


    

     

    
      	
            	
              (vii)

            	
              
                entering
      into any material agreement, including without limitation any management
      agreement or development agreement, contract, license or lease that could
      result in an obligation or liability of the Company or any Subsidiary in
      excess of US $25,000;

              

            


    

     

    
      	
            	
              (viii)

            	
              
                doing
      any act which would make it impossible or unreasonably burdensome to carry
      on the business of the
Company;

              

            


    

     

    
      	
            	
              (ix)

            	
              
                any
      material change in the strategic direction of the Company or any material
      expansion of the business of the Company, whether into new or existing
      lines of business or any change in the structure of the
      Company;

              

            


    

     

    
    

    
      	
               
      

            	
              (x)

            	
              giving,
      granting or undertaking any options, rights of first refusal, deeds of
      trust, mortgages, pledges, ground leases, security or other interests in
      or encumbering the Property, any portion thereof or any other material
      assets;

            


    

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (xi)

            	
              selling,
      conveying, refinancing or effecting any material asset of the Company,
      including the Company Interest, or any portion thereof or the entering
      into of any agreement, commitment or assumption with respect to any of the
      foregoing;

            


    

     

    
      	
               
      

            	
              (xii)

            	
              confessing
      a judgment against the Company (or any Subsidiary), submitting a Company
      (or Subsidiary) claim to arbitration or engaging, terminating and/or
      replacing counsel to defend or prosecute on behalf of the Company (or any
      Subsidiary) any action or
proceeding;

            


    

     

    
      	
               
      

            	
              (xiii)

            	
              acquiring
      by purchase, ground lease or otherwise, any real property or other
      material asset or the entry into of any agreement, commitment or
      assumption with respect to any of the foregoing, or the making or posting
      of any deposit (refundable or
non-refundable);

            


    

     

    
      	
            	
              (xiv)

            	
              taking
      any action by the Company that is reasonably likely to result in any
      Member or any of its Affiliates having individual liability under any so
      called “bad boy” guaranties or similar agreements provided to third party
      lenders in respect of financings relating to the Company, the Subsidiaries
      or any of their assets which provide for recourse as a result of willful
      misconduct, fraud or gross negligence or failure to comply with the
      covenants or any other provisions of such “bad boy”
      guaranties;

            


    

     

    
      	
            	
              (xv)

            	
              appointment
      and removal of the Company’s Representatives on the Management
      Committee;

            


    

     

    
    

    
      	
            	
              (xvi)

            	
              
                the
      amount of, whether and when to make, contributions to the Company (other
      than the contributions under Section 5.1(a)
      made contemporaneously with the execution of this Agreement) and
      Distributions by the Company;

              

            


    

     

    
      	
            	
              (xvii)

            	
              
                amendment
      of the Company’s Certificate of Formation or this Agreement;
      or

              

            


    

     

    
      	
            	
              (xviii) 

            	
              
                any
      item requiring the approval of the Company as a Member of BR Hawthorne JV,
      including but not limited to those matters set forth in Exhibit E to
      the BR Hawthorne JV Operating
Agreement.

              

            


    

     

    
    

    “Management Agreement”
shall mean that certain property management agreement attached hereto as Exhibit C to be
entered into between BR Hawthorne JV (or a Subsidiary of BR Hawthorne JV), as
owner, and Property Manager, as manager, pursuant to which Property Manager will
provide certain management services for the Properties.

     

    “Management Committee”
shall mean the management committee of BR Hawthorne JV as provided in Section
9.2(a) of the BR Hawthorne JV Operating Agreement.

     

    “Member” and “Members” shall mean
SOIF, BEMT and any other Person admitted to the Company pursuant to this
Agreement.  For purposes of the Act, the Members shall constitute a
single class or group of members.

     

    “Member in Question”
shall have the meaning provided in Section
17.12.

     

    “Member Minimum Gain”
shall mean an amount, determined in accordance with Regulations
Section 1.704-2(i)(3) with respect to each Member Nonrecourse Debt, equal
to the 

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

      Company
Minimum Gain that would result if such Member Nonrecourse Debt were treated as a
Nonrecourse Liability.

    

     

    “Member Nonrecourse
Debt” shall have the meaning given the term “partner nonrecourse debt” in
Regulations Section 1.704-2(b)(4).

     

    “Member Nonrecourse
Deductions” shall have the meaning given the term “partner nonrecourse
deductions” in Regulations Section 1.704-2(i).

     

    “Net Income” shall
mean the amount, if any, by which Income for any period exceeds Loss for such
period.

     

    “Net Loss” shall mean
the amount, if any, by which Loss for any period exceeds Income for such
period.

     

    “New York UCC” shall
have the meaning provided in Section
17.17.

     

    “Non-Initiating
Member” shall have the meaning provided in Section
15.2(a).

     

    “Nonrecourse
Deduction” shall have the meaning given such term in Regulations Section
1.704-2(b)(1).

     

    “Nonrecourse
Liability” shall have the meaning given such term in Regulations Section
1.704-2(b)(3).

     

    “Offer” shall have the
meaning provided in Section
15.2(a).

     

    “Offeree” shall have
the meaning provided in Section
15.1(b).

     

    “Offeror” shall have
the meaning provided in Section
15.1(b).

     

    “Ownership Entity”
shall have the meaning provided in Section
15.2(a).

     

    “Percentage Interest”
shall have the meaning provided in Section
5.3.

     

    “Person” shall mean
any individual, corporation, partnership, joint venture, association,
joint-stock company, limited liability company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other legal entity.

     

    “Property” shall have
the meaning provided in the BR Hawthorne JV Operating Agreement.

     

    “Property Manager”
shall mean Hawthorne Residential Partners, LLC, so long as the Management
Agreement is in full force and effect and thereafter, the entity performing
similar services with respect to the Property.

     

    “Property Manager
Reports” shall have the meaning set forth in Section
8.2(c).

     

    “Pursuer” shall have
the meaning provided in Section
10(c).

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    “Regulations” shall
mean the Treasury Regulations promulgated pursuant to the Code, as amended from
time to time, including the corresponding provisions of any successor
regulations.

     

    “REIT” shall mean a
real estate investment trust as defined in Code Section 856.

     

    “REIT Member” shall
mean any Member, if such Member is a REIT or a direct or indirect subsidiary of
a REIT.

     

    “REIT Requirements”
shall mean the requirements for qualifying as a REIT under the Code and
Regulations.

     

     “Representatives”
shall mean the representatives of the Management Committee.

     

    “Response Period”
shall have the meaning provided in Section
15.2(b).

     

    “Sale Notice” shall
have the meaning provided in Section
15.2(a).

     

    “Securities Act” shall
mean the Securities Act of 1933, as amended.

     

    “SOIF” shall have the
meaning provided in the first paragraph of this Agreement.

     

    “SOIF Transferee”
shall have the meaning set forth in Section
12.2(b)(ii).

     

    “Subsidiary” shall
mean any corporation, partnership, limited liability company or other entity of
which fifty percent (50%) of which at least a majority of the capital stock or
other equity securities is owned by the Company or more is owned by the
Company.

     

    “Tax Matters Member”
shall have the meaning provided in Section
8.3.

     

    “Total Investment”
shall mean the sum of the aggregate Capital Contributions made by a
Member.

     

    “Transfer” means, as a
noun, any transfer, sale, assignment, exchange, charge, pledge, gift,
hypothecation, conveyance, encumbrance or other disposition, voluntary or
involuntary, by operation of law or otherwise and, as a verb, voluntarily or
involuntarily, by operation of law or otherwise, to transfer, sell, assign,
exchange, charge, pledge, give, hypothecate, convey, encumber or otherwise
dispose of.

     

    “Unreturned Investment
Amount” shall have the meaning provided in Section
15.2(a).

     

                                  
 “Valuation
Amount” shall have the meaning provided in Section
15.1(b).

     

    
      	
              Section
      2.  

            	
              Organization
      of the Company.

            


    

     

    2.1 Name.  The
name of the Company shall be “BR Springhouse Managing Member,
LLC”.  The business and affairs of the Company shall be
conducted under such name 

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    or such
other name as the Managers deem necessary or appropriate to comply with the
requirements of law in any jurisdiction in which the Company may elect to do
business.

    


    2.2 Place of Registered Office;
Registered Agent.  The address of the registered office of the
Company in the State of Delaware is 2711 Centerville Road, Wilmington, Delaware
19808.  The name and address of the registered agent for service of
process on the Company in the State of Delaware is Corporation Service Company,
2711 Centerville Road, Wilmington, Delaware 19808.  The Managers may
at any time on five (5) days prior notice to all Members change the location of
the Company’s registered office or change the registered agent.

    


    2.3 Principal
Office.  The principal address of the Company shall be c/o
Bluerock Real Estate, L.L.C., 680 Fifth Avenue, New York, New York 10019, or, in
each case, at such other place or places as may be determined by the Managers
from time to time.

    


    2.4 Filings. On or before
execution of this Agreement, an authorized person within the meaning of the Act
shall have duly filed or caused to be filed the Certificate of Formation of the
Company with the office of the Secretary of State of Delaware, as provided in
Section 18-201 of the Act, and the Members hereby ratify such
filing.  The Managers shall use their best efforts to take such other
actions as may be reasonably necessary to perfect and maintain the status of the
Company as a limited liability company under the laws of
Delaware.  Notwithstanding anything contained herein to the contrary,
the Company shall not do business in any jurisdiction that would jeopardize the
limitation on liability afforded to the Members under the Act or this
Agreement.

    


    2.5 Term.  The
Company shall continue in existence from the date hereof until January 30, 2059,
unless extended by the Members, or until the Company is dissolved as provided in
Section 13,
whichever shall occur earlier.

    


    2.6 Expenses of the
Company.  Other than the reimbursements of costs and expenses
as provided herein, no fees, costs or expenses shall be payable by the Company
to any Member (or its Affiliates).

    


    
      	
              Section
      3.  

            	
              Purpose.

            


    

    


    The
Company is organized for the purpose of engaging in any lawful business, purpose
or activity that may be undertaken by a limited liability company organized
under and governed by the Act.  The Company shall possess and may
exercise all of the powers and privileges granted by the Act, by any other law
or by this Agreement, together with any powers incidental thereto, including
such powers and privileges as are necessary or convenient to the conduct,
promotion or attainment of the business, purposes or activities of the
Company.

     

    
      	
              Section
      4.  

            	
              Conditions.

            


    

    


    4.1 SOIF
Conditions.  The obligation of SOIF to consummate the
transactions contemplated herein and to make the initial Capital Contributions
under Section
5.1 is subject to fulfillment of all of the following conditions on or
prior to the date hereof:

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    


    (a)           BEMT
shall deposit in the Company’s bank account or the designated escrow account of
First American Title Insurance Company of New York (“Title Company”) the amount
of its initial Capital Contribution set forth on Exhibit A hereto;
and

     

    (b)           All
of the representations and warranties of BEMT contained in this Agreement shall
be true and correct as of the date hereof.

     

    4.2   BEMT
Conditions.  The obligation of BEMT to consummate the
transactions contemplated herein and to make the initial Capital Contributions
under Section
5.1 is subject to fulfillment of all of the following conditions on or
prior to the date hereof:

    


    (a)           SOIF
shall deposit into the Company’s bank account or Title Company’s designated
escrow account the amount of its initial Capital Contribution set forth on Exhibit A hereto;
and

     

    (b)           All
of the representations and warranties of SOIF contained in this Agreement shall
be true and correct as of the date hereof.

     

    
      	
              Section
      5.  

            	
              Capital
      Contributions, Loans, Percentage Interests and Capital
      Accounts.

            


    

    


    5.1   Initial Capital
Contributions.  Subject to the conditions set forth in Section 4, upon
execution of this Agreement, SOIF and BEMT shall each make an initial Capital
Contribution to the Company of cash in the amounts set forth in Exhibit A attached
hereto. The initial Capital Contribution of the Members to the Company may
include amounts for working capital and reserves. 

    


    5.2   Additional Capital
Contributions.  Additional Capital Contributions may be called
for from the Members by the Managers from time to time as and to the extent
capital is necessary to effect an investment.  Except as otherwise
agreed by the Members, such additional Capital Contributions shall be in an
amount for each Member equal to the product of the amount of the aggregate
Capital Contribution called for multiplied by fifty (50%) percent in the case of
SOIF and fifty (50%) percent in the case of BEMT.  Such additional
Capital Contributions shall be payable by the Members to the Company upon the
earlier of (i) twenty (20) days after written request from the Company, or (ii)
the date when the Capital Contribution is required, as set forth in a written
request from the Company.

     
 

    (b)           If
a Member (a “Defaulting Member”)
fails to make a Capital Contribution that is required as provided in Section 5.2(a) within
the time frame required therein (the amount of the failed contribution and
related loan shall be the “Default Amount”), the
other Member, provided that it has made the Capital Contribution required to be
made by it, in addition to any other remedies it may have hereunder or at law,
shall have one or more of the following remedies:

     

    (1)           to
advance to the Company on behalf of, and as a loan to the Defaulting Member, an
amount equal to the Default Amount to be evidenced by a promissory note in form
reasonably satisfactory to the non-failing Member (each such loan, a “Default
Loan”).  The Capital Account of the Defaulting Member shall be
credited with the 

    
      
        
        

      

      
        10

        
          

        

      

      
        
        
               
amount of such Default Amount attributable to a Capital Contribution and the
aggregate of such amounts shall constitute a debt owed by the Defaulting Member
to the non-failing Member.  Any Default Loan shall bear interest at
the rate of twenty (20%) percent per annum, but in no event in excess of the
highest rate permitted by applicable laws (the “Default Loan Rate”),
and shall be payable by the Defaulting Member on demand from the non-failing
Member and from any Distributions due to the Defaulting Member
hereunder.  Interest on a Default Loan to the extent unpaid, shall
accrue and compound on a quarterly basis.  A Default Loan shall be
prepayable, in whole or in part, at any time or from time to time without
penalty.  Any such Default Loans shall be with full recourse to the
Defaulting Member and shall be secured by the Defaulting Member’s interest in
the Company including, without limitation, such Defaulting Member’s right to
Distributions.  In furtherance thereof, upon the making of such
Default Loan, the Defaulting Member hereby pledges, assigns and grants a
security interest in its Interest to the non-failing Member and agrees to
promptly execute such documents and statements reasonably requested by the
non-failing Member to further evidence and secure such security
interest.  Any advance by the non-failing Member on behalf of a
Defaulting Member pursuant to this Section 5.2(b)(1)
shall be deemed to be a Capital Contribution made by the Defaulting Member
except as otherwise expressly provided herein.  All Distributions to
the Defaulting Member hereunder shall be applied first to payment of any
interest due under any Default Loan and then to principal until all amounts due
thereunder are paid in full.  While any Default Loan is outstanding,
the Company shall be obligated to pay directly to the non-failing Member, for
application to and until all Default Loans have been paid in full, the amount of
(x) any Distributions payable to the Defaulting Member, and (y) any proceeds of
the sale of the Defaulting Member’s Interest in the Company;

    

     

    (2)           subject
to any applicable thin capitalization limitations on indebtedness of the
Company, to treat its portion of such Capital Contribution as a loan to the
Company (rather than a Capital Contribution) and to advance to the Company as a
loan to the Company an amount equal to the Default Amount, which loan shall be
evidenced by a promissory note in form reasonably satisfactory to the
non-failing Member and which loan shall bear interest at the Default Loan Rate
and be payable on a first priority basis by the Company from available Cash Flow
and prior to any Distributions made to the Defaulting Member.  If each
Member has loans outstanding to the Company under this provision, such loans
shall be payable to each Member in proportion to the outstanding balances of
such loans to each Member at the time of payment.  Any advance to the
Company pursuant to this Section 5.2(b)(2)
shall not be treated as a Capital Contribution made by the Defaulting
Member;

     

    (3)           to
make an additional Capital Contribution to the Company equal to the Default
Amount whereupon the Percentage Interests of the Members shall be recalculated
to (i) increase the non-defaulting Member’s Percentage Interest by the
percentage (“Applicable Adjustment
Percentage”) determined by dividing one hundred fifty percent (150%) of
the Default Amount by the sum of the Members’ Total Investment (taking into
account the actual amount of such additional Capital Contribution) and by
increasing its Capital Account by one and one-half of the amount of the Default
Amount, and (ii) to reduce the Defaulting Member’s Percentage Interest by the
Applicable Adjustment 

    
      
        
        

      

      
        11

        
          

        

      

      
        
        
               
Percentage and by decreasing its Capital Account by one-half of the amount of
the Default Amount; or

    

     

    (4)           in
lieu of the remedies set forth in subparagraphs (1), (2) or (3), revoke its
portion of such additional Capital Contribution, whereupon the portion of the
Capital Contribution made by the non-failing Member shall be returned within ten
(10) days with interest computed at the Default Loan Rate by the
Company.

     

    (c)           Notwithstanding
the foregoing provisions of this Section 5.2, no
additional Capital Contributions shall be required from any Member if (i) the
Company or any other Person shall be in default (or with notice or the passage
of time or both, would be in default) in any material respect under any loan,
indenture, mortgage, lease, agreement or instrument to which the Company or any
of its Subsidiaries is a party or by which the Company (or any of its
Subsidiaries) or any of its properties or assets is or may be bound, (ii) any
other Member, the Company or any of its Subsidiaries shall be insolvent or
bankrupt or in the process of liquidation, termination or dissolution, (iii) any
other Member, the Company or any of its Subsidiaries shall be subjected to any
pending litigation (x) in which the amount in controversy exceeds $500,000, (y)
which litigation is not being defended by an insurance company who would be
responsible for the payment of any judgment in such litigation, and (z) which
litigation if adversely determined could have a material adverse effect on such
other Member and/or the Company or any of its Subsidiaries and/or could
interfere with their ability to perform their obligations hereunder or under any
Collateral Agreement, (iv) there has been a material adverse change in
(including, but not limited to, the financial condition of) any other Member
(and/or its Affiliates) which, in Member’s reasonable judgment, prevents such
other Member (and/or its Affiliates from performing, or substantially interferes
with their ability to perform, their obligations hereunder or under any
Collateral Agreement.  If any of the foregoing events shall have
occurred and any Member elects not to make a Capital Contribution on account
thereof, then any other Member which has made its pro rata share of such Capital
Contribution shall be entitled to a return of such Capital Contribution from the
Company.

     

    5.3   Percentage Ownership
Interest.  The Members shall have the initial percentage
ownership interests (as the same are adjusted as provided in this Agreement, a
“Percentage
Interest”) in the Company set forth on Exhibit A
immediately following the Capital Contributions provided for in Section
5.1.  The Percentage Interests of the Members in the Company
shall be adjusted monthly so that the respective Percentage Interests of the
Members at any time shall be in proportion to their respective cumulative Total
Investment made (or deemed to be made) pursuant to Sections 5.1 and
5.2, as the
same may be further adjusted pursuant to Section
5.2(b)(3).  Percentage Interests shall not be adjusted by
distributions made (or deemed made) to a Member.

    


    5.4   Return of Capital
Contribution.  Except as approved by each of the Members, no
Member shall have any right to withdraw or make a demand for withdrawal of the
balance reflected in such Member’s Capital Account (as determined under Section 5.6) until
the full and complete winding up and liquidation of the business of the
Company.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    


    5.5   No Interest on
Capital.  Interest earned on Company funds shall inure solely
to the benefit of the Company, and no interest shall be paid upon any Capital
Contributions nor upon any undistributed or reinvested income or profits of the
Company.

    


    5.6   Capital
Accounts.  A separate capital account (the “Capital Account”)
shall be maintained for each Member in accordance with Section 1.704-1(b)(2)(iv)
of the Regulations. Without limiting the foregoing, the Capital Account of each
Member shall be increased by (i) the amount of any Capital Contributions
made by such Member, (ii) the amount of Income allocated to such Member and
(iii) the amount of income or profits, if any, allocated to such Member not
otherwise taken into account in this Section
5.6.  The Capital Account of each Member shall be reduced by
(i) the amount of any cash and the fair market value of any property distributed
to the Member by the Company (net of liabilities secured by such distributed
property that the Member is considered to assume or take subject to), (ii) the
amount of Loss allocated to the Member and (iii) the amount of expenses or
losses, if any, allocated to such Member not otherwise taken into account in
this Section
5.6.  The Capital Accounts of the Members shall not be
increased or decreased pursuant to Regulations Section 1.704-1(b)(2)(iv)(f) to
reflect a revaluation of the Company’s assets on the Company’s books in
connection with any contribution of money or other property to the Company
pursuant to Section
5.2 by existing Members.  If any property other than cash is
distributed to a Member, the Capital Accounts of the Members shall be adjusted
as if such property had instead been sold by the Company for a price equal to
its fair market value, the gain or loss allocated pursuant to Section 7, and the
proceeds distributed in the manner set forth in Section 6.1 or Section
13.3(e)(iii).  No Member shall be obligated to restore any
negative balance in its Capital Account.  No Member shall be
compensated for any positive balance in its Capital Account except as otherwise
expressly provided herein.  The foregoing provisions and the other
provisions of this Agreement relating to the maintenance of Capital Accounts are
intended to comply with the provisions of Regulations Section 1.704-1(b)(2)
and shall be interpreted and applied in a manner consistent with such
Regulations.

    


    5.7   New
Members.  The Company may issue additional Interests and
thereby admit a new Member or Members, as the case may be, to the Company, only
if such new Member (i) has delivered to the Company its Capital Contribution,
(ii) has agreed in writing to be bound by the terms of this Agreement by
becoming a party hereto, and (iii) has delivered such additional documentation
as the Company shall reasonably require to so admit such new Member to the
Company.  Without the prior written consent of each then-current
Member, a new Member may not be admitted to the Company if the Company would, or
may, have in the aggregate more than one hundred (100) members.  For
purposes of determining the number of members under this Section 5.7, a Person
(the “beneficial
owner”) indirectly owning an interest in the Company through a
partnership, grantor trust or S corporation (as such terms are used in the
Code) (the “flow-through entity”)
shall be considered a member, but only if (i) substantially all of the value of
the beneficial owner’s interest in the flow-through entity is attributable to
the flow-through entity’s interest (direct or indirect) in the Company and (ii)
in the sole discretion of the Managers, a principal purpose of the use of the
flow-through entity is to permit the Company to satisfy the 100-member
limitation.

    


     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    
  


      
        	
                Section
      6.  

              	
                Distributions.

              


      

    

     

                                   
6.1   Distribution of
Distributable Funds

    


    (a)           The
Managers shall calculate and determine the amount of Distributable Funds for
each applicable period.  Except as provided in Sections 5.2(b),
6.1(b) or 13.3 or otherwise
provided hereunder, Distributable Funds, if any, shall be distributed to the
Members, in proportion to their Percentage Interests, on the 15th day
of each month or from time to time as determined by the Managers.

     

    (b)           Any
distributions otherwise payable to a Member under this Agreement shall be
applied first to satisfy amounts due and payable on account of the indemnity
and/or contribution obligations of such Member under this Agreement and/or any
other agreement delivered by such Member to the Company or any other Member but
shall be deemed distributed to such Member for purposes of this
Agreement.

     

    6.2   Distributions in
Kind.  In the discretion of the Managers, Distributable Funds
may be distributed to the Members in cash or in kind and Members may be
compelled to accept a distribution of any asset in kind even if the percentage
of that asset distributed to it exceeds a percentage of that asset that is equal
to the percentage in which such Member shares in distributions from the
Company.  In the case of all assets to be distributed in kind, the
amount of the distribution shall equal the fair market value of the asset
distributed as determined by the Managers.  In the case of a
distribution of publicly traded property, the fair market value of such property
shall be deemed to be the average closing price for such property for the thirty
(30) day period immediately prior to the distribution, or if such property has
not yet been publicly traded for thirty (30) days, the average closing price of
such property for the period prior to the distribution in which the property has
been publicly traded.

    


    
      	
              Section
      7.  

            	
              Allocations.

            


    

    


    7.1   Allocation of Net Income and
Net Losses Other than in Liquidation.  Except as otherwise
provided in this Agreement, Net Income and Net Losses of the Company for each
Fiscal Year shall be allocated among the Members in a manner such that, as of
the end of such Fiscal Year and taking into account all prior allocations of Net
Income and Net Losses of the Company and all distributions made by the Company
through such date, the Capital Account of each Member is, as nearly as possible,
equal to the distributions that would be made to such Member pursuant to Section 6.1 if the
Company were dissolved, its affairs wound up and assets sold for cash equal to
their tax basis (or book value in the case of assets that have been revalued in
accordance with Section 704(b) of the Code), all Company liabil­ities were
satisfied, and the net assets of the Company were distributed in accordance with
Section 6.1
immediately after such allocation.

    


    7.2   Allocation of Net Income and
Net Losses in Liquidation.  Net Income and Net Losses realized
by the Company in connection with the liquidation of the Company pursuant to
Section 13
shall be allocated among the Members in a manner such that, taking into account
all prior allocations of Net Income and Net Losses of the Company and all
distributions made by the Company through such date, the Capital Account of each
Member is, as nearly as possible, equal to the amount which such Member is
entitled to receive pursuant to Section
13.3(d)(iii).

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

                                    
7.3   U.S. Tax
Allocations.

     

    (a)           Subject
to Section 704(c) of the Code, for U.S. federal and state income tax purposes,
all items of Company income, gain, loss, deduction and credit shall be allocated
among the Members in the same manner as the corresponding item of income, gain,
loss, deduction or credit was allocated pursuant to the preceding paragraphs of
this Section
7.

     

    (b)           Code Section
704(c).  In accordance with Code Section 704(c) and the
Treasury regulations promulgated thereunder, income and loss with respect to any
property contributed to the capital of the Company (including, if the property
so contributed constitutes a partnership interest, the applicable distributive
share of each item of income, gain, loss, expense and other items attributable
to such partnership interest whether expressly so allocated or reflected in
partnership allocations) shall, solely for U.S. federal income tax purposes, be
allocated among the Members so as to take account of any variation between the
adjusted basis of such property to the Company for U.S. federal income tax
purposes and its Agreed Upon Value at the time of contribution.  Such
allocation shall be made in accordance with such method set forth in Regulations
Section 1.704-3(b) as the Manager in its reasonable discretion
approves.

     

    Any
elections or other decisions relating to such allocations shall be made by SOIF
in any manner that reasonably reflects the purpose and intention of this
Agreement.  Allocations pursuant to this Section 7.3. are
solely for purposes of U.S. federal, state and local income taxes and shall not
affect, or in any way be taken into account in computing, any Member’s share of
Net Income, Net Loss, other items or distributions pursuant to any provisions of
this Agreement.

     

    
      	
              Section
      8.  

            	
              Books,
      Records, Tax Matters and Bank Accounts.

            


    

    


     

    8.1   Books and
Records.  The books and records of account of the Company shall
be maintained in accordance with industry standards and shall be based on the
Property Manager Reports.  The books and records shall be maintained
at the Company’s principal office or at a location designated by the Managers,
and all such books and records (and the dealings and other affairs of the
Company and its Subsidiaries, including BR Hawthorne JV) shall be available to
any Member at such location for review, investigation, audit and copying, at
such Member’s sole cost and expense, during normal business hours on at least
twenty-four (24) hours prior notice.

     

                                   
8.2   Reports and Financial
Statements.

    


    (a)           Within
thirty (30) days of the end of each Fiscal Year, the Managers shall cause each
Member to be furnished with two sets of the following additional annual reports
computed as of the last day of the Fiscal Year:

     

    (i)           An
unaudited balance sheet of the Company;

     

    (ii)           An
unaudited statement of the Company’s profit and loss; and

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    (iii)           A
statement of the Members’ Capital Accounts and changes therein for such Fiscal
Year.

     

    (b)           Within
fifteen (15) days of the end of each quarter of each Fiscal Year, the
Managers shall
cause to be furnished to BEMT or any REIT
Member such
information as requested by BEMT or any REIT
Member as is
necessary for BEMT or any REIT Member to determine its qualification as a REIT
and its compliance with REIT Requirements as shall be requested by BEMT or any REIT
Member.

     

    (c)           The
Members acknowledge that the Property Manager is obligated to perform
Project-related accounting and furnish Project-related accounting statements
under the terms of the Management Agreement (the “Property Manager
Reports”).  The Managers shall be entitled to rely on the Property
Manager Reports with respect to its obligations under this Section 8, and the
Members acknowledge that the reports to be furnished shall be based on the
Property Manager Reports, without any duty on the part of the Managers to
further investigate the completeness, accuracy or adequacy of the Property
Manager Reports.

     

    (d)           At
the expense and cost of BEMT, the Managers will use their commercially best
efforts to obtain such financial statements (audited or unaudited), information
and attestations as may be required by BEMT or any of its Affiliates in
connection with public reporting, attestation, certification and other
requirements under the Securities Exchange Act of 1934, as amended, and the
Sarbanes-Oxley Act of 2002, as amended, applicable to such entity, and work in
good faith with the designated accountants or auditors of BEMT or any of its
Affiliates in connection therewith, including for purposes of testing internal
controls and procedures of BEMT or any of its Affiliates.

     

    8.3           Tax Matters
Member. SOIF is hereby designated as
the “tax matters partner” of the Company and the Subsidiaries, as defined in
Section 6231(a)(7) of the Code (the “Tax Matters Member”)
and shall prepare or cause to be prepared all income and other tax returns of
the Company and the Subsidiaries pursuant to the terms and conditions of Section 8.5.  Except
as otherwise provided in this Agreement, all elections required or
per­mitted to be made by the Company and the Subsidiaries under the Code or
state tax law shall be timely determined and made by SOIF. The Members intend that
the Company be treated as a partnership for U.S. federal, state and local tax
purposes, and the Members will not elect or authorize any person to elect to
change the status of the Company from that of a partnership for U.S. federal,
state and local income tax purposes.  SOIF agrees to consult
with BEMT with
respect to any written notice of any material tax elections and any material
inquiries, claims, assessments, audits, controversies or similar events received
from any taxing authority.  In addition, upon the request of any
Member, the Company and each Subsidiary shall make an election pursuant to Code
Section 754 to adjust the basis of the Company’s property in the manner provided
in Code Sections 734(b) and 743(b).  The Company hereby indemnifies
and holds harmless SOIF from and against any
claim, loss, expense, liability, action or damage resulting from its acting or
its failure to take any action as the “tax matters partner” of the Company and
the Subsidiaries, provided that any
such action or failure to act does not constitute gross negligence or willful
misconduct.

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

     

    


    8.4           Bank
Accounts.  All funds of the Company are to be deposited in the
Company’s name in such bank account or accounts as may be designated by the
Managers and shall be withdrawn on the signature of such Person or Persons as
the Managers may authorize.

    


    8.5           Tax
Returns.  The Managers shall cause to be prepared all income
and other tax returns of the Company and the Subsidiaries required by applicable
law.  No later than the due date or extended due date thereof, the
Managers shall deliver or cause to be delivered to each Member a copy of the tax
returns for the Company and such Subsidiaries with respect to such Fiscal Year,
together with such information with respect to the Company and such Subsidiaries
as shall be necessary for the preparation by such Member of its U.S. federal and
state income or other tax and information returns.

    


    8.6           Expenses.  Notwithstanding
any contrary provision of this Agreement, the Members acknowledge and agree that
the reasonable expenses and charges incurred directly or indirectly by or on
behalf of the Managers in connection with its obligations under this Section 8 will be
reimbursed by the Company to the Managers.

    


    
      	
              Section
      9.  

            	
              Management.

            


    

     

    9.1   Management.

    


    (a)           The
Company shall be managed by one or more managers. SOIF shall have the power and
authority to appoint one (1) Manager without any further action or approval by
any Member, and SOIF hereby appoints SOIF as its initial
Manager.  BEMT shall have the power and authority to appoint one (1)
Manager without any further action or approval by any Member, and BEMT hereby
appoints BEMT as its initial Manager.  A Member may only remove and
replace a Manager appointed by that Member. To the extent that SOIF or a SOIF
Transferee Transfers all or a portion of its Interest in accordance with Section 12 to a SOIF
Transferee, such SOIF Transferee may be appointed as an additional Manager under
this Section
9.1(a) by SOIF or a SOIF Transferee then holding all or a portion of an
Interest without any further action or authorization by any
Member.  To the extent that BEMT or a BEMT Transferee Transfers all or
a portion of its Interest in accordance with Section 12 to a BEMT
Transferee, such BEMT Transferee may be appointed as an additional Manager under
this Section
9.1(a) by BEMT or a BEMT Transferee then holding all or a portion of an
Interest without any further action or authorization by any Member.

     

    (b)           Each
Manager, acting alone following consultation with the other Manager or acting
jointly, shall have the authority to exercise all of the powers and privileges
granted by the Act, any other law or this Agreement, together with any powers
incidental thereto, and to take any other action not prohibited under the Act or
other applicable law, so far as such powers or actions are necessary or
convenient or related to the conduct, promotion or attainment of the business,
purposes or activities of the Company, except that any Major Decision or other
matter submitted by the Managers to the Members shall require the express and
unanimous approval of the Members.

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

     

    (c)           The Managers may appoint
individuals to act on behalf of the Company with such titles and authority as
determined from time to time by the Managers. Each of such individuals
shall hold office until his or her death, resignation or replacement by any
Manager.

     

    9.2           Affiliate
Transactions.  No agreement shall be entered into by the
Company or any Subsidiary with a Member or any Affiliate of a Member and no
decision shall be made in respect of any such agreement (including, without
limitation, the enforcement or termination thereof) unless such agreement or
related decision shall have been approved unanimously in writing by the
Managers.

     

                                  
9.3   Other
Activities.

    


    (a)           Right to Participation in
Other Member Ventures.  Neither the Company nor any Member (or
any Affiliate of any Member) shall have any right by virtue of this Agreement
either to participate in or to share in any other now existing or future
ventures, activities or opportunities of any of the other Members or their
Affiliates, or in the income or proceeds derived from such ventures, activities
or opportunities.  Neither the Company nor any Member (or any
Affiliate of any Member) shall have any right by virtue of this Agreement either
to participate in or to share in any other now existing or future ventures,
activities or opportunities of any of the other Members or their Affiliates, or
in the income or proceeds derived from such ventures, activities or
opportunities.

     

    (b)           Limitation on Actions of
Members; Binding Authority. No Member shall take any action on behalf of,
or in the name of, the Company, or enter into any contract, agreement,
commitment or obligation binding upon the Company, or, in its capacity as a
Member or Manager of the Company, perform any act in any way relating to the
Company or the Company’s assets, except in a manner and to the extent consistent
with the provisions of this Agreement.

     

                                   
9.4   Operation in Accordance with
REOC/REIT Requirements.

     

    (a)           The
Members acknowledge that SOIF or one or more of its Affiliates (an “BR
Affiliate”) intends to qualify as a “real estate operating company” or “venture
capital operating company” within the meaning of U.S. Department of Labor
Regulation 29 C.F.R. §2510.3-101 (a “REOC”), and agree that the Company and its
Subsidiaries shall be operated in a manner that will enable SOIF and such SOIF
Affiliate to so qualify.  Notwithstanding anything herein to the
contrary, the Company and its Subsidiaries shall not take, or refrain from
taking, any action that would result in SOIF or a SOIF Affiliate from failing to
qualify as a REOC.  BEMT (a) shall not fund any Capital Contribution
"with the 'plan assets' of any 'employee benefit plan' within the meaning of
Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended or any 'plan' as
defined by Section 4975 of the Internal Revenue Code of 1986, as amended", and
(b) shall comply with any requirements specified by SOIF in order to ensure
compliance with this Section
9.4.

     

    (b)           Notwithstanding
anything in this Agreement to the contrary, unless specifically agreed to by the
Managers in writing, neither the Company nor its Subsidiaries shall hold any
investment, incur any indebtedness or otherwise take any action that would cause
any 

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

       

      Member of
the Company (or any Person holding an indirect interest in the Company through
an entity or series of entities treated as partnerships for U.S. federal income
tax purposes) to realize any “unrelated business taxable income” as such term is
defined in Code Sections 511 through 514.

    

     

    (c)           The
Company (and any
direct or indirect Subsidiary of the Company) may not engage in any activities
or hold any assets that would constitute or result in the occurrence of a REIT
Prohibited Transaction as defined herein.  Notwithstanding anything to
the contrary contained in this Agreement, during the time a REIT Member is a
Member of the Company, neither the Company, any direct or indirect Subsidiary of
the Company, nor any Member of the Company shall take or refrain from taking any
action which, or the effect of which, would constitute or result in the
occurrence of a REIT Prohibited Transaction by the Company or any direct or
indirect Subsidiary
thereof, including without limiting the generality of the foregoing, but in
amplification thereof:

     

    (i) Entering
into any lease, license, concession or other agreement or permitting any
sublease, license, concession or other agreement that provides for rent or other
payment based in whole or in part on the income or profits of any person,
excluding for this purpose a lease that provides for rent based in whole or in
part on a fixed percentage or percentages of gross receipts or gross sales of
any person without reduction for any costs of the lessee (and in the case of a
sublease, without reduction for any sublessor costs);

     

    (ii) Leasing
personal property, excluding for this purpose a lease of personal property that
is entered into in connection with a lease of real property where the rent
attributable to the personal property is less than 15% of the total rent
provided for under the lease;

     

    (iii) Acquiring
or holding any debt investments, excluding for these purposes “debt” solely
between wholly-owned Subsidiaries of the Company, unless (I) the amount of
interest income received or accrued by the Company under such loan does not,
directly or indirectly, depend in whole or in part on the income or profits of
any person, and (II) the debt is fully secured by mortgages on real property or
on interests in real property.  Notwithstanding anything to the
contrary herein, in the case of debt issued to the Company by a Subsidiary which
is treated as a “taxable REIT subsidiary” of the REIT Member, such debt shall be
secured by a mortgage or similar security interest, or by a pledge of the equity
ownership of a subsidiary of such taxable REIT subsidiary;

     

    (iv) Acquiring
or holding, directly or indirectly, more than 10% of the outstanding securities
of any one issuer (by vote or value) other than an entity which either (i) is
taxable as a partnership or a disregarded entity for United States federal
income tax purposes, (ii) has properly elected to be a taxable REIT subsidiary
of the REIT Member by jointly filing with REIT, IRS Form 8875, or (iii) has
properly elected to be a real estate investment trust for U.S. federal income
tax purposes;

     

    (v) Entering
into any agreement where the Company receives amounts, directly or indirectly,
for rendering services to the tenants of any property that is owned, directly or
indirectly, by the Company other than (i) amounts received for services that are
customarily furnished or rendered in connection with the rental of real property
of a similar class in the geographic areas in which the Property is located
where such services are either provided by (A) an Independent Contractor (as
defined in Section 856(d)(3) of the Code) who is adequately compensated for such
services and from which the Company or REIT Member do not, directly or
indirectly, derive revenue or (B) a taxable REIT subsidiary of REIT Member who
is adequately compensated for such services or (ii) amounts received for
services that 

    
      
        
        

      

      
        19

        
          

        

      

      
        
        

      

       

      are
customarily furnished or rendered in connection with the rental of space for
occupancy only (as opposed to being rendered primarily for the convenience of
the Property’s tenants);

    

     

    (vi) Entering
into any agreement where a material amount of income received or accrued by the
Company under such agreement, directly or indirectly, does not qualify as either
(i) “rents from real property” or (ii) “interest on obligations secured by
mortgages on real property or on interests in real property,” in each case as
such terms are defined in Section 856(c) of the Code;

     

    (vii) Holding
cash of the Company available for operations or distribution in any manner other
than a traditional bank checking or savings account;

     

    (viii) Selling
or disposing of any property, subsidiary or other asset of the Company prior to
(i) the completion of a two
(2) year holding
period with such period to begin on the date the Company acquires a direct or
indirect interest in such property and begins to hold such property, subsidiary
or asset for the production of rental income, and (ii) the satisfaction of any
other requirements under Section 857 of the Code necessary for the avoidance of
a prohibited transaction tax on the REIT; or

     

    (ix)  Failing to make current
cash distributions to REIT Member each year in an amount which does not at least
equal the taxable income allocable to REIT Member for such year.

    


    Notwithstanding
the foregoing provisions of this Section 9.4(c), the Company may enter into a
REIT Prohibited Transaction if it receives the prior written approval of the
REIT Member specifically acknowledging that the REIT Member is approving a REIT
Prohibited Transaction pursuant to this Section 9.4(c).  For purposes
of this Section 9.4(c), “REIT Prohibited Transactions” shall mean any of the
actions specifically set forth in this Section 9.4(c)

     

                                     9.5   FCPA.

     

    (a)           In
compliance with the Foreign Corrupt Practices Act, each Member will not, and
will ensure that its officers, directors, employees, shareholders, members,
agents and Affiliates, acting on its behalf or on the behalf of the Company or
any of its Subsidiaries or Affiliates do not, for a corrupt purpose, offer,
directly or indirectly, promise to pay, pay, promise to give, give or authorize
the paying or giving of anything of value to any official representative or
employee of any government agency or instrumentality, any political party or
officer thereof or any candidate for office in any jurisdiction, except for any
facilitating or expediting payments to government officials, political parties
or political party officials the purpose of which is to expedite or secure the
performance of a routine governmental action by such government officials or
political parties or party officials.  The term “routine governmental
action” for 

    
      
        
        

      

      
        20

        
          

        

      

      
        
        

      

       

      purposes
of this provision shall mean an action which is ordinarily and commonly
performed by the applicable government official in (i) obtaining permits,
licenses, or other such official documents which such Person is otherwise
legally entitled to; (ii) processing governmental papers; (iii) providing police
protection, mail pick-up and delivery or scheduling inspections associated with
contract performance or inspections related to transit of goods across country;
(iv) providing phone service, power and water supply, loading and unloading of
cargo, or protecting perishable products or commodities from deterioration; or
(v) actions of a similar nature.

    

     

    The term
routine governmental action does not include any decision by a government
official whether, or on what terms, to award new business to or to continue
business with a particular party, or any action taken by an official involved in
the decision making process to encourage a decision to award new business to or
continue business with a particular party.

     

    (b)           Each
Member agrees to notify immediately the other Member of any request that such
Member or any of its officers, directors, employees, shareholders, members,
agents or Affiliates, acting on its behalf, receives to take any action that may
constitute a violation of the Foreign Corrupt Practices Act.

     

    


    
      	
              Section
      10.  

            	
              Confidentiality.

            


    

    


    (a)           Any
information relating to a Member’s business, operation or finances which are
proprietary to, or considered proprietary by, a Member are hereinafter referred
to as “Confidential Information”.  All Confidential Information in
tangible form (plans, writings, drawings, computer software and programs, etc.)
or provided to or conveyed orally or visually to a receiving Member, shall be
presumed to be Confidential Information at the time of delivery to the receiving
Member.  All such Confidential Information shall be protected by the
receiving Member from disclosure with the same degree of care with which the
receiving Member protects its own Confidential Information from
disclosure.  Each Member agrees:  (i) not to disclose such
Confidential Information to any Person except to those of its employees or
representatives who need to know such Confidential Information in connection
with the conduct of the business of the Company and who have agreed to maintain
the confidentiality of such Confidential Information and (ii) neither it nor any
of its employees or representatives will use the Confidential Information for
any purpose other than in connection with the conduct of the business of the
Company; provided that such restrictions shall not apply if such Confidential
Information:

     

    (x)           is
or hereafter becomes public, other than by breach of this
Agreement;

     

    (y)           was
already in the receiving Member’s possession prior to any disclosure of the
Confidential Information to the receiving Member by the divulging Member;
or

     

    (z)           has
been or is hereafter obtained by the receiving Member from a third party not
bound by any confidentiality obligation with respect to the Confidential
Information;

     

    provided, further, that nothing
herein shall prevent any Member from disclosing any portion of such Confidential
Information (1) to the Company and allowing the Company to use such


    
      
        
        

      

      
        21

        
          

        

      

      
        
        

      

    

     

    Confidential
Information in connection with the Company’s business, (2) pursuant to judicial
order or in response to a governmental inquiry, by subpoena or other legal
process, but only to the extent required by such order, inquiry, subpoena or
process, and only after reasonable notice to the original divulging Member, (3)
as necessary or appropriate in connection with or to prevent the audit by a
governmental agency of the accounts of BEMT or SOIF, (4) in order to initiate,
defend or otherwise pursue legal proceedings between the parties regarding this
Agreement, (5) necessary in connection with a Transfer of an Interest permitted
hereunder or (6) to a Member’s respective attorneys or accountants or other
representative.

     

    (b)           The
Members and their Affiliates shall each act to safeguard the secrecy and
confidentiality of, and any proprietary rights to, any non-public information
relating to the Company and its business, except to the extent such information
is required to be disclosed by law or reasonably necessary to be disclosed in
order to carry out the business of the Company.  Each Member may, from
time to time, provide the other Members written notice of its non-public
information which is subject to this Section
10(b).

     

    (c)           Without
limiting any of the other terms and provisions of this Agreement (including,
without limitation, Section 9.6), to the
extent a Member (the “Pursuer”) provides
the other Member with information relating to a possible investment opportunity
then being actively pursued by the Pursuer on behalf of the Company, the other
Member receiving such information shall not use such information to pursue such
investment opportunity for its own account to the exclusion of the Pursuer so
long as the Pursuer is actively pursuing such opportunity on behalf of the
Company and shall not disclose any Confidential Information to any Person
(except as expressly permitted hereunder) or take any other action in connection
therewith that is reasonably likely to cause damage to the Pursuer.

     

    
      	
              Section
      11.  

            	
              Representations
      and Warranties.

            


    

     

    11.1   In
General.  As of the date hereof, each of the Members hereby
makes each of the representations and warranties applicable to such Member as
set forth in Section
11.2.  Such representations and warranties shall survive the
execution of this Agreement.

     

    11.2   Representations and
Warranties.  Each Member hereby represents and warrants
that:

    


    (a)           Due Incorporation or
Formation; Authorization of Agreement.  Such Member is a
corporation duly organized or a partnership or limited liability company duly
formed, validly existing and in good standing under the laws of the jurisdiction
of its incorporation or formation and has the corporate, partnership or company
power and authority to own its property and carry on its business as owned and
carried on at the date hereof and as contemplated hereby.  Such Member
is duly licensed or qualified to do business and in good standing in each of the
jurisdictions in which the failure to be so licensed or qualified would have a
material adverse effect on its financial condition or its ability to perform its
obligations hereunder.  Such Member has the corporate, partnership or
company power and authority to execute and deliver this Agreement and to perform
its obligations hereunder, and the execution, delivery and performance of this
Agreement has been duly authorized by all necessary corporate, 

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

       

      partnership
or company action.  This Agreement constitutes the legal, valid and
binding obligation of such Member.

    

     

    (b)           No Conflict with
Restrictions; No Default.  Neither the execution, delivery or
performance of this Agreement nor the consummation by such Member (or any of its
Affiliates) of the transactions contemplated hereby (i) does or will conflict
with, violate or result in a breach of (or has conflicted with, violated or
resulted in a breach of) any of the terms, conditions or provisions of any law,
regulation, order, writ, injunction, decree, determination or award of any
court, any governmental department, board, agency or instrumentality, domestic
or foreign, or any arbitrator, applicable to such Member or any of its
Affiliates, (ii) does or will conflict with, violate, result in a breach of or
constitute a default under (or has conflicted with, violated, resulted in a
breach of or constituted a default under) any of the terms, conditions or
provisions of the articles of incorporation, bylaws, partnership agreement or
operating agreement of such Member or any of its Affiliates or of any material
agreement or instrument to which such Member or any of its Affiliates is a party
or by which such Member or any of its Affiliates is or may be bound or to which
any of its properties or assets is subject, (iii) does or will conflict with,
violate, result in (or has conflicted with, violated or resulted in) a breach
of, constitute (or has constituted) a default under (whether with notice or
lapse of time or both), accelerate or permit the acceleration of (or has
accelerated) the performance required by, give (or has given) to others any
material interests or rights or require any consent, authorization or approval
under any indenture, mortgage, lease, agreement or instrument to which such
Member or any of its Affiliates is a party or by which such Member or any of its
Affiliates or any of their properties or assets is or may be bound or (iv) does
or will result (or has resulted) in the creation or imposition of any lien upon
any of the properties or assets of such Member or any of its
Affiliates.

     

    (c)           Governmental
Authorizations.  Any registration, declaration or filing with,
or consent, approval, license, permit or other authorization or order by, or
exemption or other action of, any governmental, administrative or regulatory
authority, domestic or foreign, that was or is required in connection with the
valid execution, delivery, acceptance and performance by such Member under this
Agreement or consummation by such Member (or any of its Affiliates) of any
transaction contemplated hereby has been completed, made or obtained on or
before the date hereof.

     

    (d)           Litigation.  There
are no actions, suits, proceedings or investigations pending, or, to the
knowledge of such Member or any of its Affiliates, threatened against or
affecting such Member or any of its Affiliates or any of their properties,
assets or businesses in any court or before or by any governmental department,
board, agency or instrumentality, domestic or foreign, or any arbitrator which
could, if adversely determined (or, in the case of an investigation could lead
to any action, suit or proceeding which if adversely determined could)
reasonably be expected to materially impair such Member’s ability to perform its
obligations under this Agreement or to have a material adverse effect on the
consolidated financial condition of such Member; such Member or any of its
Affiliates has not received any currently effective notice of any default, and
such Member or any of its Affiliates is not in default, under any applicable
order, writ, injunction, decree, permit, determination or award of any court,
any governmental department, board, agency or instrumentality, domestic or
foreign, or any arbitrator which could reasonably be expected to materially
impair such Member’s (or any of its 

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

       

      Affiliate’s)
ability to perform its obligations under this Agreement or to have a material
adverse effect on the consolidated financial condition of such
Member.

    

     

    (e)           Investigation.  Such
Member is acquiring its Interest based upon its own investigation, and the
exercise by such Member of its rights and the performance of its obligations
under this Agreement will be based upon its own investigation, analysis and
expertise.  Such Member is a sophisticated investor possessing an
expertise in analyzing the benefits and risks associated with acquiring
investments that are similar to the acquisition of its Interest.

     

    (f)           Broker.  No
broker, agent or other person acting as such on behalf of such Member was
instrumental in consummating this transaction and that no conversations or prior
negotiations were had by such party with any broker, agent or other such person
concerning the transaction that is the subject of this Agreement.

     

    (g)           Investment Company
Act.  Neither such Member nor any of its Affiliates is, nor
will the Company as a result of such Member holding an interest therein be, an
“investment company” as defined in, or subject to regulation under, the
Investment Company Act of 1940, as amended.

     

    (h)           Securities
Matters.

     

    
      	
               
      

            	
              (i)

            	
              None
      of the Interests are registered under the Securities Act or any state
      securities laws.  Such Member understands that the offering,
      issuance and sale of the Interests are intended to be exempt from
      registration under the Securities Act, based, in part, upon the
      representations, warranties and agreements contained in this
      Agreement.  Such Member is an “accredited investor” as such term
      is defined in Rule 501 of Regulation D promulgated under the Securities
      Act.

            


    

     

    
      	
               
      

            	
              (ii)

            	
              Neither
      the Securities and Exchange Commission nor any state securities commission
      has approved the Interests or passed upon or endorsed the merits of the
      offer or sale of the Interests.  Such Member is acquiring the
      Interests solely for such Member’s own account for investment and not with
      a view to resale or distribution thereof in violation of the Securities
      Act.

            


    

     

    
      	
               
      

            	
              (iii)

            	
              Such
      Member is unaware of, and in no way relying on, any form of general
      solicitation or general advertising in connection with the offer and sale
      of the Interests, and no Member has taken any action which could give rise
      to any claim by any person for brokerage commissions, finders’ fees
      (without regard to any finders’ fees payable by the Company directly) or
      the like relating to the transactions contemplated
  hereby.

            


    

     

    
      	
               
      

            	
              (iv)

            	
              Such
      Member is not relying on the Company or any of its officers, directors,
      employees, advisors or representatives with regard to the tax and other
      economic considerations of an investment in the Interests, and such Member
      has relied on the advice of only such Member’s
  advisors.

            


    

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (v)

            	
              Such
      Member understands that the Interests may not be sold, hypothecated or
      otherwise disposed of unless subsequently registered under the Securities
      Act and applicable state securities laws, or an exemption from
      registration is available.  Such Member agrees that it will not
      attempt to sell, transfer, assign, pledge or otherwise dispose of all or
      any portion of the Interests in violation of this
    Agreement.

            


    

     

    
      	
               
      

            	
              (vi)

            	
              Such
      Member has adequate means for providing for its current financial needs
      and anticipated future needs and possible contingencies and emergencies
      and has no need for liquidity in the investment in the
      Interests.

            


    

     

    
      	
               
      

            	
              (vii)

            	
              Such
      Member is knowledgeable about investment considerations and has a
      sufficient net worth to sustain a loss of such Member’s entire investment
      in the Company in the event such a loss should occur.  Such
      Member’s overall commitment to investments which are not readily
      marketable is not excessive in view of such Member’s net worth and
      financial circumstances and the purchase of the Interests will not cause
      such commitment to become excessive.  The investment in the
      Interests is suitable for such
Member.

            


    

     

    
      	
               
      

            	
              (viii)

            	
              Such
      Member represents to the Company that the information contained in this
      subparagraph (h) and in all other writings, if any, furnished to the
      Company with regard to such Member (to the extent such writings relate to
      its exemption from registration under the Securities Act) is complete and
      accurate and may be relied upon by the Company in determining the
      availability of an exemption from registration under federal and state
      securities laws in connection with the sale of the
    Interests.

            


    

     

    
      	
              Section
      12.  

            	
              Sale,
      Assignment, Transfer or other
  Disposition.

            


    

     

    12.1   Prohibited
Transfers.  Except as otherwise provided in this Section 12, Sections 5.2(b) or as
approved by the Managers, no Member shall Transfer all or any part of its
Interest, whether legal or beneficial, in the Company, and any attempt to so
Transfer such Interest (and such Transfer) shall be null and void and of no
effect.  Notwithstanding the foregoing, either Member shall have the
right, with the consent of the other Member, at any time to pledge to a lender
or creditor, directly or indirectly, all or any part of its Interest in the
Company for such purposes as it deems necessary in the ordinary cause of its
business and operations.

     

    12.2   Affiliate
Transfers.

    


    (a)           Subject
to the provisions of Section 12.2(b) hereof, and subject in each case to the
prior written approval of each Member (such approval not to be unreasonably
withheld), any Member may Transfer all or any portion of its Interest in the
Company at any time to an Affiliate of such Member, provided that such Affiliate
shall remain an Affiliate of 

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

       

      such
Member at all times that such Affiliate holds such Interest.  If such
Affiliate shall thereafter cease being an Affiliate of such Member while such
Affiliate holds such Interest, such cessation shall be a non-permitted Transfer
and shall be deemed void ab
initio, whereupon the Member having made the Transfer shall, at its own
and sole expense, cause such putative transferee to disgorge all economic
benefits and otherwise indemnify the Company and the other Member(s) against
loss or damage under any Collateral Agreement.

    

    


    (b)           Notwithstanding
anything to the contrary contained in this Agreement, the following Transfers
shall not require the approval set forth in Section 12.2(a):

    


    (i)           Any
Transfer by SOIF or a SOIF Transferee of up to one hundred percent (100%) of its
Interest to any Affiliate of SOIF, including but not limited to (A) Bluerock
Enhanced Multifamily Trust, Inc. (“BR REIT”) or any
Person that is directly or indirectly owned by BR REIT; and/or (B) Bluerock
Special Opportunity + Income Fund II, LLC (“BR SOIF II”) or any
Person that is directly or indirectly owned by BR SOIF II (collectively, a
“SOIF
Transferee”);

    


    (ii)   Any
Transfer by BEMT or a BEMT Transferee of up to one hundred percent (100%) of its
Interest to any Affiliate of BEMT, including but not limited to (A) BR REIT or
any Person that is directly or indirectly owned by BR REIT; and/or (B) BR SOIF
II or any Person that is directly or indirectly owned by BR SOIF II
(collectively, a “BEMT
Transferee”);

    


    provided
however, as to subparagraphs (b)(i) and (b)(ii), and as to subparagraph (a), no
Transfer shall be permitted and shall be void ab initio if it shall
violate any “Transfer” provision of any applicable Collateral Agreement with
third party lenders.

    


    (c)   Upon the
execution by any such BEMT Transferee or SOIF Transferee of such documents
necessary to admit such party into the Company and to cause the BEMT Transferee
or SOIF Transferee (as applicable) to become bound by this Agreement, the BEMT
Transferee or SOIF Transferee (as applicable) shall become a Member, without any
further action or authorization by any Member.

    


    12.3   Admission of
Transferee;
Partial Transfers.  Notwithstanding anything in this Section 12 to the
contrary and except as provided in Sections 5.2(b), no
Transfer of Interests in the Company shall be permitted unless the potential
transferee is admitted as a Member under this Section
12.3:

    


    (a) If a
Member Transfers all or any portion of its Interest in the Company, such
transferee may become a Member if (i) such transferee executes and agrees to be
bound by this Agreement, (ii) the transferor and/or transferee pays all
reasonable legal and other fees and expenses incurred by the Company in
connection with such assignment and substitution and (iii) the transferor and
transferee execute such documents and deliver such certificates to the Company
and the remaining Members as may be required by applicable law or otherwise
advisable; and

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

    


    (b) Notwithstanding
the foregoing, any Transfer or purported Transfer of any Interest, whether to
another Member or to a third party, shall be of no effect and void ab initio, and such
transferee shall not become a Member or an owner of the purportedly transferred
Interest, if the Management Committee determines in its sole discretion
that:

    


    (i)           the
Transfer would require registration of any Interest under, or result in a
violation of, any federal or state securities laws;

     

    (ii)           the
Transfer would result in a termination of the Company under Code
Section 708(b);

     

    (iii)           as
a result of such Transfer the Company would be required to register as an
investment company under the Investment Company Act of 1940, as amended, or any
rules or regulations promulgated thereunder;

     

    (iv)           if
as a result of such Transfer the aggregate value of Interests held by “benefit
plan investors” including at least one benefit plan investor that is subject to
ERISA, could be “significant” (as such terms are defined in U.S. Department of
Labor Regulation 29 C.F.R. 2510.3-101(f)(2)) with the result that the assets of
the Company could be deemed to be “plan assets” for purposes of
ERISA;

     

    (v)           as
a result of such Transfer, the Company would or may have in the aggregate more
than one hundred (100) members and material adverse federal income tax
consequences would result to a Member.  For purposes of determining
the number of members under this Section 12.3(b)(v), a
Person (the “beneficial owner”)
indirectly owning an interest in the Company through a partnership, grantor
trust or S corporation (as such terms are used in the Code) (the “flow-through entity”)
shall be considered a member, but only if (i) substantially all of the value of
the beneficial owner’s interest in the flow-through entity is attributable to
the flow-through entity’s interest (direct or indirect) in the Company and (ii)
in the sole discretion of the Managers, a principal purpose of the use of the
flow-through entity is to permit the Company to satisfy the 100-member
limitation; or

     

    (vi)           the
transferor failed to comply with the provisions of Sections 12.2(a) or
(b).

     

    The
Managers may require the provision of a certificate as to the legal nature and
composition of a proposed transferee of an Interest of a Member and from any
Member as to its legal nature and composition and shall be entitled to rely on
any such certificate in making such determinations under this Section
12.3.

     

    12.4   Withdrawals.  Each
of the Members does hereby covenant and agree that it will not withdraw, resign,
retire or disassociate from the Company, except as a result of a Transfer of its
entire Interest in the Company permitted under the terms of this Agreement and
that it will carry out its duties and responsibilities hereunder until the
Company is terminated, liquidated and dissolved under Section
13.  No Member shall be entitled to receive any distribution or
otherwise receive the fair market value of its Interest in compensation for any
purported resignation or withdrawal not in accordance with the terms of this
Agreement.

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

    


    
      	
              Section
      13.  

            	
              Dissolution.

            


    

    


     

    13.1   Limitations.  The
Company may be dissolved, liquidated and terminated only pursuant to the
provisions of this Section 13, and, to
the fullest extent permitted by law but subject to the terms of this Agreement,
the parties hereto do hereby irrevocably waive any and all other rights they may
have to cause a dissolution of the Company or a sale or partition of any or all
of the Company’s assets.

    


    13.2   Exclusive Events Requiring
Dissolution.  The Company shall be dissolved only upon the
earliest to occur of the following events (a “Dissolution
Event”):

    


    (a)           the
expiration of the specific term set forth in Section
2.5;

     

    (b)           at
any time at the election of the Managers in writing;

     

    (c)           at
any time there are no Members (unless otherwise continued in accordance with the
Act); or

     

    (d)           the
entry of a decree of judicial dissolution pursuant to Section 18-802 of the
Act.

     

    13.3   Liquidation.  Upon
the occurrence of a Dissolution Event, the business of the Company shall be
continued to the extent necessary to allow an orderly winding up of its affairs,
including the liquidation of the assets of the Company pursuant to the
provisions of this Section 13.3, as
promptly as practicable thereafter, and each of the following shall be
accomplished:

    


    (a)           The
Managers shall cause to be prepared a statement setting forth the assets and
liabilities of the Company as of the date of dissolution, a copy of which
statement shall be furnished to all of the Members.

     

    (b)           The
property and assets of the Company shall be liquidated or distributed in kind
under the supervision of the Managers as promptly as possible, but in an
orderly, businesslike and commercially reasonable manner.

     

    (c)           Any
gain or loss realized by the Company upon the sale of its property shall be
deemed recognized and allocated to the Members in the manner set forth in Section
7.2.  To the extent that an asset is to be distributed in kind,
such asset shall be deemed to have been sold at its fair market value on the
date of distribution, the gain or loss deemed realized upon such deemed sale
shall be allocated in accordance with Section 7.2 and the
amount of the distribution shall be considered to be such fair market value of
the asset.

     

    (d)           The
proceeds of sale and all other assets of the Company shall be applied and
distributed as follows and in the following order of priority:

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    
      	
               
      

            	
              (i)

            	
              to
      the satisfaction of the debts and liabilities of the Company (contingent
      or otherwise) and the expenses of liquidation or distribution (whether by
      payment or reasonable provision for payment), other than liabilities to
      Members or former Members for
distributions;

            


    

     

    
      	
               
      

            	
              (ii)

            	
              to
      the satisfaction of loans made pursuant to Section 5.2(b)
      in proportion to the outstanding balances of such loans at the time of
      payment;

            


    

     

    
      	
               
      

            	
              (iii)

            	
              the
      balance, if any, to the Members in accordance with Sections
      6.1.

            


    

     

    13.4   Continuation of the
Company.  Notwithstanding anything to the contrary contained
herein, the death, retirement, resignation, expulsion, bankruptcy, dissolution
or removal of a Member shall not in and of itself cause the dissolution of the
Company, and the Members are expressly authorized to continue the business of
the Company in such event, without any further action on the part of the
Members.

    


     

    
      	
              Section
      14.  

            	
              Indemnification.

            


    

    


     

    14.1   Exculpation of
Members.  No Member, Manager, representative or officer of the
Company shall be liable to the Company or to the other Members for damages or
otherwise with respect to any actions or failures to act taken or not taken
relating to the Company, except to the extent any related loss results from
fraud, gross negligence or willful or wanton misconduct on the part of such
Member, Manager, representative or officer or the willful breach of any
obligation under this Agreement.

    


    14.2   Indemnification by
Company.  The Company hereby indemnifies, holds harmless and
defends the Members, the Managers, the officers and each of their respective
agents, officers, directors, members, partners, shareholders and employees from
and against any loss, expense, damage or injury suffered or sustained by them
(including but not limited to any judgment, award, settlement, reasonable
attorneys’ fees and other costs or expenses incurred in connection with the
defense of any actual or threatened action, proceeding or claim) by reason of or
arising out of (i) their activities on behalf of the Company or in furtherance
of the interests of the Company, including, without limitation, the provision of
guaranties to third party lenders in respect of financings relating to the
Company or any of its assets (but specifically excluding from such indemnity by
the Company any so called “bad boy” guaranties or similar agreements which
provide for recourse as a result of failure to comply with covenants, willful
misconduct or gross negligence, (ii) their status as Members, Managers,
representatives, employees or officers of the Company, or (iii) the Company’s
assets, property, business or affairs (including, without limitation, the
actions of any officer, director, member or employee of the Company or any of
its Subsidiaries), if the acts or omissions were not performed or omitted
fraudulently or as a result of gross negligence or willful or wanton misconduct
by the indemnified party or as a result of the willful breach of any obligation
under this Agreement by the indemnified party.  For the purposes of
this Section 14.2,
officers, directors, employees and other representatives of Affiliates of a
Member who are functioning as representatives of such Member in connection with
this Agreement shall be considered representatives of such Member for the
purposes of this 

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

       

      Section
14.  Reasonable expenses incurred by the indemnified party in
connection with any such proceeding relating to the foregoing matters shall be
paid or reimbursed by the Company in advance of the final disposition of such
proceeding upon receipt by the Company of (x) written affirmation by the Person
requesting indemnification of its good faith belief that it has met the standard
of conduct necessary for indemnification by the Company and (y) a written
undertaking by or on behalf of such Person to repay such amount if it shall
ultimately be determined by a court of competent jurisdiction that such Person
has not met such standard of conduct, which undertaking shall be an unlimited
general obligation of the indemnified party but need not be
secured.

    

     

                                   
14.3   General Indemnification by
the Members.

     

    (a)           Notwithstanding
any other provision contained herein, each Member (the “Indemnifying Party”)
hereby indemnifies and holds harmless the other Members, the Company and each of
their subsidiaries and their agents, officers, directors, members, partners,
shareholders and employees (each, an “Indemnified Party”)
from and against all losses, costs, expenses, damages, claims and liabilities
(including reasonable attorneys’ fees) as a result of or arising out of (i) any
breach of any obligation of the Indemnifying Party under this Agreement, or (ii)
any breach of any obligation by or any inaccuracy in or breach of any
representation or warranty made by the Indemnifying Party, whether in this
Agreement or in any other agreement with respect to the conveyance, assignment,
contribution or other transfer of the Properties (or interests therein), assets,
agreements, rights or other interests conveyed, assigned, contributed or
otherwise transferred to the Company (collectively, the “Inducement
Agreements”).

     

    (b)           Except
as otherwise provided herein or in any other agreement, recourse for the
indemnity obligation of the Members under this Section 14.3 shall be
limited to such Indemnifying Party’s Interest in the Company.

     

    (c)           The
indemnities, contributions and other obligations under this Agreement shall be
in addition to any rights that any Indemnified Party may have at law, in equity
or otherwise.  The terms of this Section 14 shall
survive termination of this Agreement.

     

    
      	
              Section
      15.  

            	
              Sale
      Rights

            


    

     

                                  
15.1   Push / Pull
Rights.

    


    (a) Availability of
Rights.  At any time (i) after the third anniversary of this
Agreement or (ii) that the Members are unable to agree on a Major Decision and
such failure to agree has continued for fifteen (15) days after written notice
from one Member to the other Member indicating an intention to exercise rights
under this Section
15.1, either Member may exercise its right to initiate the provisions of
this Section
15.1.

    


    (b) Exercise.  The
Member wishing to exercise its rights pursuant to this Section 15.1 (the
“Offeror”)
shall do so by giving notice to the other Member (the “Offeree”) setting
forth a statement of intent to invoke its rights under this Section 15.1, stating
therein the aggregate dollar amount (the “Valuation Amount”)
that the Offeror would be willing to pay for the assets of the Company as of the
Closing Date (as defined below) free and clear of 

    
      
        
        

      

      
        30

        
          

        

      

      
        
        

      

       

      all
liabilities, and setting forth all oral or written offers and inquiries received
by the Offeror during the previous twelve-month period relating to the
financing, disposition or leasing of any Company property.

    

    


    (c)   Offeree
Response.  After receipt of such notice, the Offeree shall
elect to either (i) sell its entire Interest to the Offeror for an amount equal
to the amount the Offeree would have been entitled to receive if the Company had
sold its assets for the Valuation Amount on the Closing Date and the Company had
immediately paid all Company liabilities and Imputed Closing Costs and
distributed the net proceeds of sale to the Members in satisfaction of their
Interests pursuant to Section 13.3, or (ii)
purchase the entire Interest of the Offeror for an amount equal to the amount
the Offeror would have been entitled to receive if the Company had sold all of
its assets for the Valuation Amount on the Closing Date and the Company had
immediately paid all Company liabilities and Imputed Closing Costs and
distributed the net proceeds of the sale to the Members in satisfaction of their
Interests pursuant to Section
13.3.  The Offeree shall have thirty (30) days from the giving
of the Offeror’s notice in which to exercise either of its options by giving
written notice to the Offeror.  If the Offeree does not elect to
acquire the Offeror’s Interest within such time period, the Offeree shall be
deemed to have elected to sell its Interest to the Offeror as provided in
subsection (i) above.

    


    (d)   Earnest
Money.  Within five (5) business days after an election has
been made or deemed made under Section 15.1(c), the
acquiring Member shall deposit with a mutually acceptable third-party escrow
agent a non-refundable earnest money deposit in the amount of five percent (5%)
of the amount the selling Member is entitled to receive for its Interest under
this Section
15.1, which amount shall be applied to the purchase price at
closing.  If the acquiring Member should thereafter fail to consummate
the transaction for any reason other than a default by the selling Member or a
refusal by any lender of the Company or any Subsidiary who has a right under its
loan documents to consent to such transfer to so consent, (i) (A) the earnest
money deposit shall be distributed from escrow to the selling Member, free of
all claims of the acquiring Member, as liquidated damages and constituting the
sole and exclusive remedy available to the selling Member because of a default
by the acquiring Member or (B) the selling Member may, by delivering to the
acquiring Member written notice thereof, elect to buy the acquiring Member’s
entire Interest for an amount equal to the amount the acquiring Member would
have been entitled to receive if the Company had sold all of its assets for the
Valuation Amount and the Company had immediately paid all Company liabilities
and Imputed Closing Costs and distributed the net proceeds of the sale to the
Members in satisfaction of their Interests pursuant to Section 13.3, in
which case, the Closing Date therefor shall be the date specified in the selling
Member’s notice, and (ii) if the acquiring Member was the Offeror, the
non-refundable earnest money deposit for any future election by the acquiring
Member to buy the selling Member’s Interest shall be twenty percent (20%) of the
amount the selling Member is entitled to receive for its Interest in connection
with such future election.

    


    (e)   Closing.  The
closing of an acquisition pursuant to this Section 15.1 shall be
held at the principal place of business of the Company on a mutually acceptable
date (the “Closing
Date”) not later than sixty (60) days (or, if the Offeree is the
acquiring Member, ninety (90) days) after an election has been made or deemed
made under Section
15.1(c).  At such closing, the following shall
occur:

    
      
        
        

      

      
        31

        
          

        

      

      
        
        

      

    

    


    (i)   The
selling Member shall assign to the acquiring Member or its designee the selling
Member’s Interest in accordance with the instructions of the acquiring Member,
and shall execute and deliver to the acquiring Member all documents which may be
required to give effect to the disposition and acquisition of such interests, in
each case free and clear of all liens, claims, and encumbrances, with covenants
of general warranty; and

    


    (ii)   The
acquiring Member shall pay to the selling Member the consideration therefor in
cash.

    


    (f)   Enforcement.  It
is expressly agreed that the remedy at law for breach of the obligations of the
Members set forth in this Section 15.1 is
inadequate in view of (i) the complexities and uncertainties in measuring the
actual damage to be sustained by reason of the failure of a Member to comply
fully with such obligations, and (ii) the uniqueness of the Company’s business
and the Members’ relationships.  Accordingly, each of such obligations
shall be, and is hereby expressly made, enforceable by an order of specific
performance.

     

                                                    15.2   Forced Sale
Rights.

    


    (a)   Offers.  If, at any time
following the third anniversary of the date that the Property is acquired by a
Subsidiary, (i) either Member desires to offer the Company Interest for sale on
specified terms, or (ii) receives from an unaffiliated purchaser a bona fide written cash offer
(i.e., not seller financed) for the purchase of such Company Interest on terms
that such Member desires for the Company to accept (such specified terms or
bona fide offer being herein
called the “Offer”), then the
Member desiring to make or accept the Offer (the “Initiating Member”)
shall provide written notice of the terms of such Offer (the “Sale Notice”) to the
other Member (the “Non-Initiating
Member”).  Any offer must be in an amount at least equal to the
amount of the Company’s pro rata share of any indebtedness secured by such
Property plus the aggregate Unreturned Investment Amount.

    


    (b)   Response.  The
Non-Initiating Member shall have thirty (30) days from the date of the Sale
Notice (the “Response
Period”) to provide written notice to the Initiating Member of whether
the Company should make or accept the Offer; the failure to timely deliver such
notice shall be deemed to constitute an election to accept the Offer and sell
such Company Interest on the terms of the Offer.

    


    (c)   Offer
Unacceptable.  If the Non-Initiating Member does not wish for
the Company to make or accept the Offer, the Initiating Member may elect to sell
its Interest to the Non-Initiating Member, in which case the Non-Initiating
Member must purchase the Initiating Member’s Interest for an amount equal to the
amount that would be distributable to the Initiating Member if the Company had
accepted the Offer, closed the sale pursuant to such Offer and wound up its
affairs pursuant to Section
13.

    


    For
purposes of the foregoing calculations, the purchase price for a sale shall be
reduced by Imputed Closing Costs therefor.  The Initiating Member must
exercise this 

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

       

      option,
if at all, by delivering written notice thereof to the Non-Initiating Member
within twenty (20) days after the end of the Response Period.  The
Non-Initiating Member shall pay the Initiating Member cash for its Interest, as
the case may be.  Closing shall take place on or before the date
specified in the Sale Notice, but if the Non-Initiating Member is purchasing the
Initiating Member’s Interest, the Non-Initiating Member shall have until 120
days after the Sale Notice in which to close.  If the Initiating
Member or the Non-Initiating Member defaults at closing, the non-defaulting
party shall have the right to bring suit for damages, for specific performance,
or exercise any other remedy available at law or in equity.  Upon
payment at closing, the Initiating Member shall execute and deliver all
documents reasonably required to transfer the interest being
sold.

    

    


    (d)   Offer
Acceptable.  If the Non-Initiating Member consents (or is
deemed to have consented) to the Company selling the Company Interest on the
terms of the Offer, then the Initiating Member shall be allowed to sell the
Company Interest for cash on the terms of the Offer for a period of up to one
hundred eighty (180) days following the expiration of the Response
Period.  If the Initiating Member obtains a bona fide third party contract to
sell the Company Interest on the terms of the offer within such one hundred
eighty (180) day period, the Initiating Member shall have an additional period
of ninety (90) days after the date of such contract (that is, not to exceed 270
days after the expiration of the Response Period) in which to consummate the
sale.  If after having received the consent (or deemed consent) of the
Non-Initiating Member to the sale of such Company Interest on the terms of the
Offer, the Initiating Member is unable to obtain a bona fide contract within such one
hundred eighty (180) day period, or if after having obtained such bona fide contract, the Initiating
Member is unable to consummate such sale within 270 days after the expiration of
the Response Period, then the Initiating Member must again submit an Offer to
the Non-Initiating Member under the terms of this Section 15.2 before
it may sell such Company Interest.

    


    


    
      	
              Section
      16.  

            	
              Mediation
      and Arbitration of Disputes.

            


    

    


    16.1  Events Giving Rise To
Mediation or Arbitration.   In the event that there is a
dispute between the Managers or the Members as to any action or issue, or in the
event of a deadlock between the Members, then and in such event all of the
Members agree, upon the written request of any one Member, to submit to
mediation within ten (10) days of receipt of the request for mediation for the
purpose of resolving the dispute.  If mediation is not successful in
resolving the dispute; one or more of the Members may elect to have the dispute
submitted to binding arbitration as provided in this Article 10 by giving
written notice to each of the Members of such Member’s election to require
arbitration of such dispute.  Said written notice shall set forth (i)
the action or issue in dispute and (ii) a brief description of the position of
the electing Member with respect to such dispute.

    


    16.2   Selection of
Arbitrators.   Within
ten (10) days of the date upon which the notice is sent pursuant to Section
10.1, the Members shall meet for the purpose of selecting three (3) persons to
act as arbitrators for the Company for such dispute.  In the event
that the Members are unable to agree upon the selection of the arbitrators at
such meeting, then within ten (10) days following such meeting, the Member(s)
requesting such arbitration shall select one (1) 

    
      
        
        

      

      
        33

        
          

        

      

      
        
        

      

       

      person to
serve as an arbitrator and the remaining Member(s) shall select one (1) person
to serve as an arbitrator and, within five (5) days of the date of their
selection, the two persons so selected shall select a third person to serve as
the third and final arbitrator.  In the event that the Member(s)
requesting such arbitration select one such person within such ten (10) day
period, but the remaining Member(s) fails to select one such person within such
ten (10) day period, or vice versa, then the person selected shall serve as the
sole arbitrator and shall make the determination required
hereunder.  In the event the two selected arbitrators are unable to
agree upon the identity of the person to serve as the third and final
arbitrator, such determination shall be made by the American Arbitration
Association in accordance with its then-existing rules and
regulations.  No person selected by the Members and/or by the
arbitrators may be employed by, doing substantial business with or otherwise
affiliated with any of the Members (including, but not limited to, acting as an
attorney or accountant for any one or more of the Members or for the
Company).

    

    


    16.3   Arbitration
Hearing.   Not
later than fifteen (15) days following the selection of the third arbitrator, a
hearing shall be convened by the arbitrators at a mutually agreeable
site.  At such hearing, each Member shall be entitled to present
arguments in favor of and call witnesses in support of such Member’s position
with respect to the item in dispute; provided, however, that absent a written
agreement of the Members to the contrary, presentation and/or arguments
(including the direct testimony of any witnesses called by a Member) of each
side of the dispute shall be limited to three (3) hours.

    


    16.4   The
arbitrators shall render their decision regarding the matter in dispute within
ten (10) days following the date of the hearing set forth in Section 10.3
hereinabove and said decision shall be final and binding upon the Members and
the Company.  Each of the Members hereby covenant and agree that they
shall comply with the decision of the arbitrators.

    


    


    
      	
              Section
      17.  

            	
              Miscellaneous.

            


    

    


                                   
17.1   Notices.

     

    (a)           All
notices, requests, approvals, authorizations, consents and other communications
required or permitted under this Agreement shall be in writing and shall be (as
elected by the Person giving such notice) hand delivered by messenger or
overnight courier service, mailed (airmail, if international) by registered or
certified mail (postage prepaid), return receipt requested, or sent via
facsimile (provided such facsimile is immediately followed by the delivery of an
original copy of same via one of the other foregoing delivery methods) addressed
to:

    
      
        
        

      

      
        34

        
          

        

      

      
        
        

      

    

     

    If to
SOIF:

     

    c/o
Bluerock Real Estate, L.L.C.

                                   
680 Fifth Avenue

                                   
New York, New York 10019

                                   
Attention:  James G. Babb, III

     

    with a
copy to:

     

    c/o
Bluerock Real Estate, L.L.C.

    680 5th
Avenue, 16th Floor

    New York,
New York 10019

    Attention:  Michael
Konig, Esq.

     

    


    If to
BEMT:

     

    Bluerock
Enhanced Multifamily Advisor, LLC

    c/o
Bluerock Real Estate, L.L.C.

    680 Fifth
Avenue

    New York,
New York 10019

    Attention:  James
G. Babb, III

     

    with a
copy to:

     

    DLA
Piper, LLP

    4141
Parklake Avenue, Suite 300

    Raleigh,
North Carolina 27612-2350

    Attention:  Robert
H. Bergdolt, Esq.

    


     

    


     

    (b)           Each
such notice shall be deemed delivered (a) on the date delivered if by hand
delivery or overnight courier service or facsimile, and (b) on the date upon
which the return receipt is signed or delivery is refused or the notice is
designated by the postal authorities as not deliverable, as the case may be, if
mailed (provided, however, if such actual delivery occurs after 5:00 p.m. (local
time where received), then such notice or demand shall be deemed delivered on
the immediately following business day after the actual day of
delivery).

     

    (c)           By
giving to the other parties at least fifteen (15) days written notice thereof,
the parties hereto and their respective successors and assigns shall have the
right from time to time and at any time during the term of this Agreement to
change their respective addresses.

     

    17.2   Governing
Law.  This Agreement and the rights of the Members hereunder
shall be governed by, and interpreted in accordance with, the laws of the State
of Delaware. Each of the parties hereto irrevocably submits to the jurisdiction
of the New York State courts and the Federal courts sitting in the State of New
York and agree that all matters 

    
      
        
        

      

      
        35

        
          

        

      

      
        
        

      

       

      involving
this Agreement shall be heard and determined in such courts.  Each
of  the parties hereto waives irrevocably the defense of inconvenient
forum to the maintenance of such action or proceeding.  Each of the
parties hereto designates CT Corporation System, 1633 Broadway, New York, New
York  10019, as its agent for service of process in the State of New
York, which designation may only be changed on not less than ten (10) days’
prior notice to all of the other parties.

    

    


    17.3  Successors.  This
Agreement shall be binding upon, and inure to the benefit of, the parties and
their successors and permitted assigns.  Except as otherwise provided
herein, any Member who Transfers its Interest as permitted by the terms of this
Agreement shall have no further liability or obligation hereunder, except with
respect to claims arising prior to such Transfer.

    


    17.4   Pronouns.  Whenever
from the context it appears appropriate, each term stated in either the singular
or the plural shall include the singular and the plural, and pronouns stated in
either the masculine, the feminine or the neuter gender shall include the
masculine, feminine and neuter.

    


    17.5  Table of Contents and
Captions Not Part of Agreement.  The table of contents and
captions contained in this Agreement are inserted only as a matter of
convenience and in no way define, limit or extend the scope or intent of this
Agreement or any provisions hereof.

    


    17.6   Severability.  If
any provision of this Agreement shall be held invalid, illegal or unenforceable
in any jurisdiction or in any respect, then the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired, and the Members shall use their best efforts to amend
or substitute such invalid, illegal or unenforceable provision with enforceable
and valid provisions which would produce as nearly as possible the rights and
obligations previously intended by the Members without renegotiation of any
material terms and conditions stipulated herein.

    


    17.7   Counterparts.  This
Agreement may be executed in several counterparts, each of which shall be deemed
an original but all of which shall constitute one and the same
instrument.

    


    17.8   Entire Agreement and
Amendment.  This Agreement and the other written agreements
described herein between the parties hereto entered into as of the date hereof,
constitute the entire agreement between the Members relating to the subject
matter hereof.  In the event of any conflict between this Agreement or
such other written agreements, the terms and provisions of this Agreement shall
govern and control.

    


    17.9   Further
Assurances.  Each Member agrees to execute and deliver any and
all additional instruments and documents and do any and all acts and things as
may be necessary or expedient to effectuate more fully this Agreement or any
provisions hereof or to carry on the business contemplated
hereunder.

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

    


    17.10   No Third Party
Rights.  The provisions of this Agreement are for the exclusive
benefit of the Members and the Company, and no other party (including, without
limitation, any creditor of the Company) shall have any right or claim against
any Member by reason of those provisions or be entitled to enforce any of those
provisions against any Member.

    


    17.11   Incorporation by
Reference. Every Exhibit and Annex attached to this Agreement is
incorporated in this Agreement by reference.

    


    17.12   Limitation on
Liability.  Except as set forth in Section 14 and with
respect to a Default Loan as set forth in Section 5.2(b), the
Members shall not be bound by, or be personally liable for, by reason of being a
Member, a judgment, decree or order of a court or in any other manner, for the
expenses, liabilities or obligations of the Company, and the liability of each
Member shall be limited solely to the amount of its Capital Contributions as
provided under Section
5.  Except with respect to a Default Loan as set forth in Section 5.2(b), any
claim against any Member (the “Member in Question”)
which may arise under this Agreement shall be made only against, and shall be
limited to, such Member in Question’s Interest, the proceeds of the sale by the
Member in Question of such Interest or the undivided interest in the assets of
the Company distributed to the Member in Question pursuant to Section 13.3(d)
hereof.  Except with respect to a Default Loan as set forth in Section 5.2(b), any
right to proceed against (i) any other assets of the Member in Question or (ii)
any agent, officer, director, member, partner, shareholder or employee of the
Member in Question or the assets of any such Person, as a result of such a claim
against the Member in Question arising under this Agreement or otherwise, is
hereby irrevocably and unconditionally waived.

    


    17.13   Remedies
Cumulative.  The rights and remedies given in this Agreement
and by law to a Member shall be deemed cumulative, and the exercise of one of
such remedies shall not operate to bar the exercise of any other rights and
remedies reserved to a Member under the provisions of this Agreement or given to
a Member by law.  In the event of any dispute between the parties
hereto, the prevailing party shall be entitled to recover from the other party
reasonable attorney’s fees and costs incurred in connection
therewith.

    


    17.14   No
Waiver.  One or more waivers of the breach of any provision of
this Agreement by any Member shall not be construed as a waiver of a subsequent
breach of the same or any other provision, nor shall any delay or omission by a
Member to seek a remedy for any breach of this Agreement or to exercise the
rights accruing to a Member by reason of such breach be deemed a waiver by a
Member of its remedies and rights with respect to such breach.

    


    17.15   Limitation On Use of
Names.  Notwithstanding anything contained in this Agreement or
otherwise to the contrary, each of SOIF and BEMT as to itself agree that neither
it nor any of its Affiliates, agents, or representatives is granted a license to
use or shall use the name of the other under any circumstances whatsoever,
except such name may be used in furtherance of the business of the Company but
only as and to the extent unanimously approved by the Managers.

    


    17.16   Publicly Traded Partnership
Provision.  Each Member hereby severally covenants and agrees
with the other Members for the benefit of such Members, that (i) it is not


    
      
        
        

      

      
        37

        
          

        

      

      
        
        

      

       

      currently
making a market in Interests in the Company and will not in the future make such
a market and (ii) it will not Transfer its Interest on an established securities
market, a secondary market or an over-the-counter market or the substantial
equivalent thereof within the meaning of Code Section 7704 and the Regulations,
rulings and other pronouncements of the U.S. Internal Revenue Service or the
Department of the Treasury thereunder.  Each Member further agrees
that it will not assign any Interest in the Company to any assignee unless such
assignee agrees to be bound by this Section and to assign
such Interest only to such Persons who agree to be similarly
bound.

    

    


    17.17   Uniform Commercial
Code.  The interest of each Member in the Company shall be a
“certificated security” governed by Article 8 of the Delaware UCC and the UCC as
enacted in the State of New York (the “New York UCC”),
including, without limitation, (i) for purposes of the definition of a
“security” thereunder, the interest of each Member in the Company shall be a
security governed by Article 8 of the Delaware UCC and the New York UCC and (ii)
for purposes of the definition of a “certificated security”
thereunder.

    


    17.18  Public
Announcements.  Neither BEMT nor any of its Affiliates shall,
without the prior approval of SOIF, issue any press releases or otherwise make
any public statements with respect to the Company or the transactions
contemplated by this Agreement, except as may be required by applicable law or
regulation or by obligations pursuant to any listing agreement with any national
securities exchange so long as BEMT or such Affiliate has used reasonable
efforts to obtain the approval of SOIF prior to issuing such press release or
making such public disclosure.  Neither SOIF nor any of its Affiliates
shall, without the prior approval of BEMT, issue any press releases or otherwise
make any public statements with respect to the Company or the transactions
contemplated by this Agreement, except as may be required by applicable law or
regulation or by obligations pursuant to any listing agreement with any national
securities exchange so long as SOIF or such Affiliate has used reasonable
efforts to obtain the approval of BEMT prior to issuing such press release or
making such public disclosure.

    


    17.19  No Construction Against
Drafter.  This Agreement has been negotiated and prepared by
SOIF and BEMT and their respective attorneys and, should any provision of this
Agreement require judicial interpretation, the court interpreting or construing
such provision shall not apply the rule of construction that a document is to be
construed more strictly against one party.

    



    
      
         


      

      
        38

        
          

        

      

      
         


      

    


    IN
WITNESS WHEREOF, the Members have executed this Limited Liability Company
Agreement as of the date set forth above.

     

    
      
        	 
      	 
      	 
      
	 
      	
                MEMBERS:

              
	 
      	 
      	 
      
	 
      	
                Bluerock
      Special Opportunity + Income Fund, LLC,

              
	 
      	
                a
      Delaware limited liability company

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                Bluerock
      Real Estate, L.L.C.,

              
	 
      	 
      	
                a
      Delaware limited liability company,

              
	 
      	 
      	
                its
      Managing Member

              
	 
      	 
      	 
      
	 
      	 
      	
                By:______________________________

              
	 
      	 
      	
                Name:____________________________

              
	 
      	 
      	
                Title:_____________________________

              
	 	 	 
	 
      	
                BEMT
      Springhouse, LLC,

              
	 
      	
                a
      Delaware limited liability company

              
	 
      	 
      
	 
      	
                By:

              	
                Bluerock
      Enhanced Multifamily Holdings, L.P.,

              
	 
      	 
      	
                its
      Sole Member

              
	 
      	 
      	 
      
	 
      	
                By:

              	
                Bluerock
      Enhanced Multifamily Trust, Inc.,

              
	 
      	 
      	
                its
      General Partner

              
	 
      	 
      	 
      
	 
      	 
      	
                By:______________________________

              
	 
      	 
      	
                Name:____________________________

              
	 
      	 
      	
                Title:_____________________________

              
	 
      	 
      	 
      


      



    
      
         


      

      
        39

        
          

        

      

      
         


        
          EXHIBIT
D

        

      

    


    


     

    Initial Capital
Contributions and Percentage Interests

     

    
      	
              Member Name

            	 	
              Initial
      Capital

              Contribution

            	 	
              Vl

            	 	
              Percentage Interest

            	 
	
              Bluerock
      Special Opportunity + Income Fund, LLC

            	 	$	[  ]	 	 
      	 	 	50	%
	
              BEMT
      Springhouse, LLC

            	 	$	[ 
    ]	 	 
      	 	 	50	%